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DIARY
Book 811
January 19-23, 1945
-ABook
Page
Aarons, Lehman C.
See Appointments and Resignations
Appointments and Resignations
Aarons, Lehman C.: Appointed Assistant General Counsel 1/19/45
811
65
Taylor, William H. : Appointed Assistant Director of
Monetary Research - 1/19/45
66
-BBlue Network
See Morgenthau, Henry, Jr.
Bretton Woods Conference
See Post-War Planning
Business Conditions
Haas memorandum on situation, week ending
January 20, 1945 - 1/22/45
317
-cChina
Export-Import Bank loans - moratoria of (two-year)
discussed in White memorandum - 1/22/45
332
Correspondence
Mrs. Forbush's mail report - 1/19/45
Crowley, Leo T.
FDR's comment on continuation in Government reported to
Treasury group by HMJr - 1/20/45
113
193
-DDumbarton Oaks
See Post-War Planning
Financing, Government
Security market - current developments in: Haas memorandum 1/22/45
311
War Savings Bonds: 6th War Loan Drive
New York Herald Tribune editorial, "Home Front Victory"
France
Copy of and correspondence concerning - 1/22/45
Pleven-Mendes France views on inflation discussed in
letter from Treasury Representative Hoffman - 1/22/45
Pleven-Mendes France disagreement on financial policy
for France: See Book 814. page 129
Civil Servants: Forced saving system described by Treasury
Representative Hoffman - (1/8/45)
305,308
338
342
-G Book
Page
Germany
See also Post-War Planning
Conditions reported by Office of Strategic Services 1/19/45
811
158
(See also Book 812, page 330 - 1/26/45)
Hitler plot - story reported by Office of Strategic
Services - 1/27/45: See Book 813, page 74
"Free German Committee" in U.S.S.R. - 1/29/45:
Book 813, page 282
U.S.S.R. pattern in Rumania, Bulgaria, and Hungary Germans expect same: Book 813. page 292
Greece
Need for foreign loan discussed in cable to American
Embassy, Athens - 1/22/45
344
-H"Home Front Victory" (New York Herald Tribune editorial)
See Financing, Government: War Savings Bonds
(6th War Loan Drive)
-IItaly
Armistice Terms: Status of negotiations with British on
amendments - Glasser memorandus - 1/22/45
334
K-
Kilgore, Harley M. (Senator, West Virginia)
See Labor, Department of
Kiplinger Letter
Tax supplement - contacts in Treasury discussed by HMJr
and 9:30 group - 1/19/45
23
-LLabor Department
Kilgore or Winant as Secretary discussed by Mrs. FDR and
HMJr - 1/23/45
363
Lend-Lease
United Kingdom - Phase 2: Sir Robert Sinclair memorandum,
"Effects of Munitions Agreements on British Manpower"
-
1/19/45
151
-xMcConnell, Robert E.
See Post-Var Planning: Germany (Industries)
- I - (Continued)
Book
Page
Mendes-France, Pierre
See France
Morgenthau, Henry, Jr.
Book or series of articles on outstanding achievements
of HMJr - possibly by DuBois - discussed by Treasury
group - 1/19/45
811
8
Informal talk at meeting of personnel officers of
Treasury - 1/19/45
67
"You Lend Your Money": Blue Network weekly program
featuring Secretary of Treasury - 1/20/45
a) Procedure outlined - 1/26/45
214
295
Murphy, Robert
See State Department
-NNetherlands
Transfer of large industrial plants by the Germans
discussed by HMJr and staff - 1/20/45
211
New York Herald Tribune
"Home Front Victory - editorial: See Financing,
Government - War Savings Bonds (6th War Loan Drive)
-0Office of Strategic Services
Reports on conditions in Germany: See Germany
-P Pasvolsky, Leo
See State Department
Personnel Officers, Treasury
Informal talk by HMJr - 1/19/45
Philippine Islands
Ickes sent information concerning members of Commonwealth
Congress uncovered by Foreign Funds Control - 1/19/45
67
128
a) Ickes' reply - 1/31/45: See Book 817, page 157
b) Ickes' appreciation reported to Treasury group 2/5/45: Book 816, page 94
c) Foreign Funds Control program suggested in
Treasury letter - 2/7/45: Book 817, page 155
Pleven, Rene'
See France
Post-War Planning
Bretton Woods Conference (Continued on next page)
Conference in Rayburn's office; present: Rayburn, HMJr.
Acheson, McCormack, Spence, Wolcott, White, and
O'Connell - 1/22/45
381
Surplus Property, Disposal of: Pehie report for week
ending January 13, 1945 - 1/23/45
397
- P - (Continued)
Book
Page
Post-War Planning (Continued)
Bretton Woods Conference (Continued)
Legislation strategy discussed by Treasury group 1/24/45: See Book 812. page 1
(See also Financing, Government: Federal
Reserve Legislation - Book 812. page 3)
Legislation strategy discussed in office of Beaman
(Legislative Counsel, House of Representatives) 1/27/45: Book 813. page 17
Legislation strategy discussed in office of Acheson
(State Department) - 1/29/45: Book 813, page 223
Dumbarton Oaks: WINX broadcast and Mrs. HMJr's comment
thereon - 1/21/45
Germany: Industries - McConnell report on studies -
811
1/23/45
Taxation
253
407
"Outlook for Federal revenues" and "General economic
outlook in the post-war period" (Joint Committee on
Taxation studies) - Blough memorandum - 1/23/45
Blough discussion - 1/31/45: Book 814. page 184
387
-RRubber
Payment for Caylon rubber consigned to Rubber Reserve
Company before July 1: Letter to be signed by Secretary
of Treasury, Secretary of State, and Foreign Economic
Administration Administrator discussed by 9:30 group 1/19/45
27
(For actual letter see page 64)
-SSecurity Market
See Financing, Government
Sinclair, Sir Robert
"Effects of Munitions Agreements on British Manpower'
-
memorandum: See Lend-Lease (United Kingdom - Phase 2)
Speeches by HMJr
Informal talk at meeting of personnel officers of
Treasury - 1/19/45
67
State Department
Pasvolsky, Leo: Attitude toward Russia discussed by
Treasury group - 1/19/45
Murphy, Robert: Attitude toward Russia discussed by
Treasury group - 1/19/45
Surplus Property, Disposal of
See Post-Var Planning
4,47
4,48
-TBook
Page
Taxation
See Post-War Planning
Taylor, William H.
See Appointments and Resignations
-UUnited Kingdom
See Lend-Lease
-W--
War Criminals
Rosenman reports on conference - 1/19/45
811
a) War Department memorandum concerning punishment
5
57
1) Treasury comment thereon transmitted to
49
McCloy
Bidault, in conversation with Leon Henderson and
Ambassador Caffery (Paris), asks for severe punishment
for all German war criminals - 1/22/45
Rosenman asked to let Treasury see copy of report signed
by State, War, and Navy - 1/27/45: See Book 813, page 13
a) DuBois report on report - 1/29/45: Book 813, page 293
b)
" summary of report for FDR: Book 813, page 299
Winant, John G. (American Ambassador, England)
See Labor, Department of
WINX Radio Station (Washington Post)
See Post-War Planning: Dumbarton Oaks
-Y"You Lend Your Money" (Blue Network weekly program)
See Morgenthau, Henry, Jr.
343
1
January 19, 1945
9:30 a.m.
GROUP
Present:
Mr. D. W. Bell
Mr. Gaston
Mr. white
Mr. O'Connell
Mr. Haas
Mr. Blough
Mr. Pehle
Mr. Luxford
Mr. DuBois
Mr. Coyne
Mr. C. S. Bell
Mrs. Klotz
H.M.JR: Good morning.
We had a very good lead. Let me just make a note.
I haven't anything, but this committee on legislation,
State, Treasury, and Budget--Stettinius didn't have that
with him. Who is handling that?
MR. O'CONNELL: Luxford.
H.M.JR: Where is White?
MR. WHITE: Right here.
H.M.JR: Be sure somebody gives him that to take
to Cabinet.
MR. LUXFORD: To Cabinet today?
H.M.JR: Yes. He didn't have that.
MR. O'CONNELL: It is in State.
2
-2
MR. LUXFORD: Acheson has it; he was supposed to
get it signed yesterday. I will check with him.
H.M.JR: The Committee on Economic Policy--that is
State, Treasury, Interior, Commerce-MR. D. W. BELL: Question mark.
H.M.JR: I signed that, and I gave everything that
I had to Stettinius because he wanted it. He didn't
question it with me, but I would have felt better if he
took it back. There were no initials. I didn't see
Acheson's initials.
MR. LUXFORD: He must be talking about the President's
Message.
H.M.JR: I will come back to that.
MR. LUXFORD: We didn't have a chance to clear that
with Acheson.
H.M.JR: It is on foreign policy, isn't it?
MR. WHITE: No, on Bretton Woods. There is some
mention of other things, but it is referred to as the
Bretton Woods Message, and that is what it sounds like.
H.M.JR: He took that back with him. I gave him the
whole thing and he signed it here, but I have nothing
left; so if you want any copies, you will have to get it.
MR. LUXFORD: I have copies.
H.M.JR: But I explained to him that his people were
in complete agreement on that. Is that right?
MR. LUXFORD: That is right.
H.M.JR: On economic policy--very -- much in the room--
he is taking our version. He said he didn't want it
known we shouldn't say it--but he said Will Clayton told
him that ours was a much better draft than Acheson's.
-3MR. LUXFORD: I sensed that a little bit.
MR. PEHLE: It is a little private cut-throat.
H.M.JR: As long as the Treasury benefits!
MR. WHITE: Of course, we thought so. (Laughter)
H.M.JR: And we are going to try to press these three
things this afternoon after Cabinet to the President. He
agreed it was simpler. I underlined certain things with
a red pencil to show how ridiculous they were. (Reading
State Department draft of Executive Order Establishing
Foreign Ecnomic Policy Board.) " make recommendations
to the President of the United States regarding appointment,
a
reappointment and removal of United States Representatives
accredited to such organizations." He said on that basis
we recommend whom we should fire in UNRRA. He said, "It
is ridiculous." "
MR. WHITE: Mr. Clayton did not comment on the draft.
He kept quiet during the discussion. Acheson carried the
discussion.
H.M.JR: He read that from something. The final
and last thing I gave him was what Glasser gave me at
five minutes of nine.
He said, "Can I have this?"
I said, "Yes, it is for your eyes only." He is sick
over that.
He said, "This is a prejudiced document."
MR. WHITE: It is not a prejudiced document, but it
is not e ffective. Prejudiced in which direction?
H.M.JR: Against the fellows.
MR. WHITE: We were very careful. We thought there
was a possibility you might hand it over.
O
MRS. KLOTZ: You didn't hear what he said.
MR. WHITE: Anyhow, he has it. (Laughter)
-4H.M.JR: The only thing he sort of stumbled on was
Pasvolsky. The Robert Murphy thing--he said Eisenhower
wanted him, so I said, "Sure. Supposing something went
wrong?"
He said, "Whose man is he?
I said, "He is yours."
MR. WHITE: The Pasvolsky thing is very fair. That
one isn't. Well, have you read it, Mr. Secretary, carefully?
I said carefully. (Laughter)
MR. LUXFORD: Don't read it out loud, Mr. Secretary.
(Laughter)
MR. PEHLE: I would like to hear it. If it is a fair
statement, Harry wouldn't object to its being read.
MR. WHITE: I didn't write it, but it is fair.
H.M.JR: That is wonderful! Not even one teensy
weensy sentence?
MRS. KLOTZ: Itsy bitsy.
MR. WHITE: No, I had nothing to do with it.
MRS. KLOTZ: Not much.
MR. WHITE: We talked it over ahead of time.
H.M.JR: All right. (Hands draft of Executive Order
to Mrs. Klotz.)
This is the only thing I have, but I will take this
to Cabinet. I gave him the other thing, the Bretton Woods
foreign policy message. He has that.
MR. WHITE: An unsigned letter to the President which
he was to sign, and he is going to send it to the President.
5
5-
H.M.JR: We are supposed to see him after Cabinet
and take up these three things.
MR. PEHLE: Are you still seeing General Rudenko?
H.M.JR: At five o'clock. You had better be here
about five minutes of; in case I am late, you can entertain
him. I will bring down a bottle of vodka from the house--
give him a "pushkin" treatment. If you haven't seen "The
Voice of The Turtle," you won't get the inference.
Anyway, I am exhausted. Shall we adjourn?
MR. GASTON: If your business is transacted.
H.M.JR: Joe, give an account of where we stand on
crimes. Joe has done everything but chop their heads off.
MR. DuBOIS: Judge Rosenman called last night--he
had tried to reach the Secretary. He said at the meeting
yesterday that they had definitely agreed that there
wouldn't be a treaty, and that if the thing had to be
dealt with in any formal way, they would do it by Executive
agreement. Secondly, they had clearly agreed that the
extradition procedure would not be interfered with in any
way. With respect to arch criminals, everyone had disagreed on dealing with them without a trial. I told him
that we were preparing a memo which we are going to send
to him and Mr. McCloy, and he said that would be fine.
He specifically asked whether we were going to deal with
arch criminals in accordance with our approach.
I asked him what his judgment would be on that, and
he
it." said, All I can say is that everybody is opposed to
Now, I have here a memo for Mr. McCloy and for Judge
Rosenman which spells out much more definitely our views,
and I think it would be very helpful, Mr. Secretary, if
you could just sign a transmittal note to both of them and
send it.
6
-6H.M.JR: Last night when I talked to you--have you
included the one where we shoot the arch criminals or
not? I said I would leave that to you.
MR. DuBOIS: I should mention that. We discussed that,
and I called Rosenman. We discussed it, and we finally decided
it would be best not to include that in this memo, but
rather to hit very hard on these other points that are so
important.
H.M.JR: All right. Later on he talked to me, and
I think you will be pleased to know that he said the
Treasury memo was--he did use it at the meeting yesterday
morning, and it was very helpful. He thought this had a
lot to do with influencing and making the other people
change.
MR. LUXFORD: This is a purposeful document here.
MR. DuBOIS: That is fine.
H.M.JR: When I am through with this I want to start
something new in the Treasury. It is a little late, but
I want somebody--to coin a phrase--what is it, every four
years?
MR. GASTON: Quadrennially.
MR. DuBOIS: I can tell you, Mr. Secretary, the essence
ofit--what is in this memo. Our suggestion is that you
sign a transmittal note merely. In the memo we will make
clear what we mean by not cutting across strategic procedure,
namely, anyone of the United Nations who requests a criminal--
a war criminal--will have that criminal delivered to it
without any questions being asked. Rosenman a greed to
that in his conference with me, and according to what he
said last night, that was agreed upon at the meeting, which
means that if Russia asked for one hundred thousand people,
they would get them without any questions being asked, except
for he arch criminals. If France, Belgium, or Poland
asked for criminals, they would get them without any
questions. They would be tried under their own laws and
procedures. I think that is the most important thing in
7-
the whole field, and if we have won on that point, I
think we have won the major issue.
H.M.JR: Joe?
MR. O'CONNELL: I agree.
MR. DuBOIS: Two, we reiterated here, although it
has already been agreed upon, our objective for the
treaty. Three, we say if there is going to be this
sort of conspiracy, it has to be simple and not tied up
with egotistic red tape. And in that connection, we
defined some of the procedures we think would make the
trial very simple, including the fact that once you have
your judgment of conspiracy, that is binding as to the
guilt of all members of the organization which are included.
For example, if the SSS is convicted under this conspiracy
trial, that means every member of the SSS is guilty. Then
there are only two questions remaining, one, the identification of the person who is a member, and, two, the ques-
tion of fixing punishment solely on the basis that if he
was a member, there is a certain minimum punishment
without any further trial or any gradations upward,
depending upon the responsibility, but there are no further
individual trials involved; and then we make the fourth
point, that this has got to include crimes by Germans
against Bulgarians, which he also agreed to. And, finally,
we have a few paragraphs in the end which high-lights the fact
that international law is dynamic, not static, and unless
international law grows, it will die, and the world will
lose respect for international law. We have built up the
thesis that it has to deal with new problems in the light
of the new thesis.
H.M.JR: It sounds all right to me.
MR. O'CONNELL: It sounds fine.
H.M.JR: I know he worked all night.
You haven't seen it yet?
MR. WHITE: No, but I am sure I am in complete agree-
ment with it.
8
-8MR. LUXFORD: Mr. Secretary, you will be proud of
this document. It is a statesmanlike document.
H.M.JR: What I suggest is, I don't think you ever
finished writing up that book.
MR. DuBOIS: No.
H.M.JR: Before you take on anything else, I would
like you to do that. See? What I want you to do--and
I don't know whether we ought to get a historian like
other Departments have or whether someone like Miss
Diamond, but I would like a story written on when I
first saw Pell in London. He got right down to this
final thing, the story of the Treasury's part in this.
It ought to be done.
MR. DuBOIS: I agree with you.
H.M.JR: You haven't time to do it, and these things
happen--my diary is dated today, but they don't take up
one accomplishment.
MR. PEHLE: You have to have somebody especially
tagged with that. Everybody is under such pressure.
MR. WHITE: That is true of every major episode.
H.M.JR: Take a thing like this, well, like Rosenman
says, "What is this, Treasury business?"
Pell called on me in London and told me his troubles,
and I got in good. We stayed on it until it looks as
though we had a distinct part in shaping this very important
policy. Somebody ought to write that story.
MR. GASTON: I question whether you can get any extra
person --any special person to write that stuff. It seems
to me that those who have anything to do with it directly
have to dictate a memo of what they did, and that is the
raw material that can be used later.
o
-9MR. WHITE: The raw material is there.
MR. GASTON : What you want now is a memo.
MR. DuBOIS: We have that. I have dictated memos as
we went along. We have that, but it has to be brought
together. The only question is one of time. In the
last three weeks I think I have spent maybe one day on this
book. We are getting nowhere on it, because we just
don't have the time. And if that book is going to be finished,
it ought to be speeded up because--
MR. LUXFORD: The Russians won't wait.
H.M.JR: I don't sign--I don't agree with Herbert.
What I mean is, at the general consults office in London he
had a first-class historian, and he was complaining to
me that Spaatz would never let him sit in on things while
they were happening, and then months would pass and he was
supposed to write the thing up, and it was too late.
If we had a really good historian, he would get hold
of DuBois, with my backing, and make DuBois sit down and
tell him this thing, and then he would get all these documents and write the story.
Now, we were in London in August, and he hasn't even
written that up, and the longer you wait, the colder they
get. For instance, I would say to White, "would you write
up the one when White and Morgenthau went over the other
day and talked to fifteen people in the State Department?"
MR. WHITE: It is written up, Mr. Secretary. I
wrote it up yesterday.
H.M.JR: He is one of the worst.
MR. DuBOIS: It isn't--I can just say it isn't that-the London thing isn't going to die. We have memos on
everything; it is just a question of putting it together.
MR. WHITE: But it has to be written up, because
there are a lot of different things and different ways
- 10 -
it has to be woven in. It has to be a chapter. We have
done that with some things in the past. For example,
it is amazing how it grows. The Chinese negotiations
from two years ago on is one hundred and fifty pages.
H.M.JR: You take that story of negotiations of
Lend-Lease with the British which took place here after
Quebec--whether that's been written just as a chapter-I sent word to you and to the man who acted as secretary-what's-his-name, the FEA man?
MR. WHITE: Coe.
H.M.JR: He should write the whole thing up. I
don't know whether he has.
MR. WHITE: I will check up on that.
H.M.JR: You look for it for me. I want to
get a first-class historian.
MR. C. S. BELL: I have a very good man in mind that
we could put on.
MR. WHITE: And Joe could work with him. You could
turn all the material over to him; he is a factual writer,
not a historian, but from what they say, I don t know
as we need a historian, necessarily, but he can throw
everything together and get it in continuous form for
you and do a good job.
H.M.JR: Who is that?
MR. C. S. BELL: Mr. Shick. He works directly under
me. He writes well. We have loaned him to the Cannon
Committee for two weeks, but I can draw him back from that.
He doesn't have to go there until Monday.
H.M.JR: What is his background?
MR. C. S. BELL: He has been working on our office
o
procedure and methods in the field primarily for the
last three years.
- 11 -
H.M.JR: That isn't the man I had in mind. T am
thinking- the Navy has historians, and the Army.
MR. C. S. BELL: You a re thinking of the Peter
Odegard type?
H.M.JR: No, because Peter Odegard would get his own
feelings into this thing.
MRS. KLOTZ: How about this Ness?
MR. C. S. BELL: Ness would be good.
MR. WHITE: No, no, no, he has other work.
MRS. KLOTZ: I am speaking of a man like that.
MR. WHITE: I think he wants a full-time man.
MR. PERLE: I think it has to be a man with some
stature and who is complete trustworthy.
MR. WHITE: Why don't we all think of some men and
suggest names, because as far as writing ability, it
requires--
H.M.JR: I think it has to be somebody who would
appreciate the historical value of this.
MR. C. S. BELL: He would do that; he is very intelligent.
H.M.JR: I will tell you what we can do. If you put
it up to them to get suggestions, you will wait weeks,
if not months. why not get this man here and let him do
this thing, and see how well he does it while they are
trying to make up their minds, see?
MR. WHITE: That is an episode in itself.
H.M.JR: Let's get him to do this particular thing,
the Treasury's part in setting up procedure on how to
treat enemy criminals. Let him come in and do it.
12
- 12 -
MR. C. S. BELL: Could I bring him in for a couple
minutes this afternoon and let him hear from you what you
have in mind?
H.M.JR: Do it Monday morning. But, let's start it.
He can do two things. Get him to do my story--my trip
to England, which he has got the facts put together on,
and this one. And if he can get that out of him, we
will crown him king.
MR. C. S. Bell: O.K., sir.
H.M.JR: If he can get Joe DuBois to sit down and
do this thing, it would be wonderful. Here is Joe.
up.
MR. DuBOIS: It is a job, and it should be written
H.M.JR: It is one of the important things, looking
toward the peace of the world. These filthy so-and-so's
are exterminating, and the Treasury is playing an important
part in this thing, and I want the history written, but
I want DuBois and the other people, including myself, that
had something to do with it to do it. So when Judge
Rosenman or anybody else says, "what did the Treasury
have to do with it?" we will say, "Here is how we got
into it," and those things are happening every day.
MR. PEHLE: Somebody has to do the whole story on
the German thing. That is a tremendous job, and it is
very important.
H.M.JR: This is a segment.
MR. PEHLE: This is just one little segment.
H.M.JR: All right.
first.Have we got anything? I like to get my stuff over
MRS. KLOTZ: No.
13
-13-
MR. D.W. BELL: "A" priority.
H.M.JR: Oh, yes, one other thing--where is Luxford?
MR. LUXFORD: Right here, sir.
H.M.JR: Mr. White advised me, riding out to Takoma
Park the other day that I ought to go away in February.
Right?
MR. WHITE: Yes. I think all the gentlemen here
will agree with me.
MR. O'CONNELL: Where are you going? (To Mr. White)
MR. PEHLE: Are you tired, too?
MR. WHITE: We need to catch up.
H.M.JR: The reason I wasn't going to go was on
account of Bretton Woods.
Now, between Luxford and Joe O'Connell--Joe O'Connell
first and Luxford second on this end, I wish you could tell
me this afternoon when you think this Bretton woods legislation will be introduced, because I would like to be there on
the first day and make my little talk.
MR. O'CONNELL: You mean when they would start
hearings?
H.M.JR: Start hearings, and then based on that, the
day after that I would like to go away for two weeks down
to the farm.
MR. O'CONNELL: I don't think it would be possible to
give you a date this afternoon as to when hearings can
start, because there are three things I would like to
mention; one, we haven't come to an agreement on the
form of legislation. I hope we will have before you
meet with the delegates. Two, having come to an agreement
on the legislation here, we still have to have the form
-14-
of legislation agreed to by Spence and Wagner in the
Senate, and Wolcott. Wagner won't be back until the
end of next week. In addition, we have the Federal
Reserve legislation.
H.M.JR: You could say to Spence, "Look, Mr.
Morgenthau is tired; he wants to go away for a little
rest." Senator Wagner has been away, "But he wants to
suit his time in with yours. "
MR. WHITE: I thought, Mr. Secretary, you would go
away before that. It would take about two or three weeks
before this--you could be absent until this got up on
the hill, but then I think you should be around. I
was assuming that the thing would--
H.M.JR: well, I don't know.
MR. O'CONNELL: Why Harry, I had assumed the Secretary
would go down and open the game--the kickoff, SO to speak-and someone else would carry the ball from that time on.
MR. WHITE: I suppose the hearings are going to last
longer than two weeks, but somehwere along there there
will be other difficulties, maybe not the first couple of
weeks.
H.M.JR: I am stating--let's first find out--get as
near a date as we can from Spence. Put it on a strictly
personal basis. ne is a very nice gratlemen. Tell him
I would like to be away, and I would like to be here when
the thing opens.
MR. WHITE: You can call Wagner in Florida and get
him on the phone.
H.M.JR: Wagner has nothing to do with this.
MR. O'CONNELL: Start with Banking and Currency in
the House.
15
-15-
MR. WHITE: Not do them simultaneously?
MR. D.W. BELL: It seems to me if you are going
away right after your opening statement, you are not
going to get much rest. You will be on the phone
twenty-four hours a day while this is going on.
MR. LUXFORD: It would be better to go now and be
back before--it will be two weeks before you get into
the hearings.
MR. O'CONNELL: I think it will be more than two
weeks from today before they will start hearings.
H.M.JR: I doubt if I can get away much before.
I hope that makes sense. The 7th or 8th of February
will be the earliest.
MR. O'CONNELL: Still, that is all right. Today
is the 19th of January. It seems to me we have plenty
to occupy us for a month before we would--
MR. WHITE: That means that wouldn't come until
almost March 1. There is no particular reason why we should
wait that long, unless we have to.
MR. O'CONNELL: I am not suggesting that we stall
on this thing, but it will probably be two weeks before
that--I certainly wouldn't be able to say that a bill
would be agreed upon and a message sent down, and then
the bill introduced in less than two weeks from today.
F-1
-16-
16
MR. WHITE: We can agree on the bill within two
days.
MR. O'CONNELL: You can't agree on the bill and
introduce it until Wagner gets back, and we won't get
an agreement with the State Department and Congressmen
on the form of legislation, in less than a week from
now. It can't be done.
H.M.JR: Joe, I appointed a little committee
consisting of you and Mr. White and Mr. Luxford to
advise me as soon as you can let me know--Monday.
If you could let me know Monday when you think this
thing is going to take place, huh?
MR. O'CONNELL: Yes. One additional reason I
didn't want to have to vote on this today is because
of the question raised the other day about the priority
of Federal Reserve legislation on Reserve requirements
and the general Federal obligations, collateral, Federal
Reserve notes.
We have agreed on the form of legislation, but my
understanding is we talk to Eccles and probably the
men on the Hill, to see whether or not that legislation
is noncontroversial, and if it is not, that will help
to decide whether that goes ahead or behind.
MR. WHITE: I thought you were going to arrange
for a meeting this week with Eccles?
MR. O'CONNELL: It's been difficult. We have agreed
to the form of legislation, and it was easy. I was to call
Eccles yesterday, but I didn't get an opportunity to.
MR. WHITE: We can iron that out maybe by Monday.
H.M.JR: I don't want to go away the minute the
President gets back either, but I would appreciate
it--hell, you people want to get me out of town.
( Laughter)
MR. LUXFORD: Mr. Secretary, I take it you don't
want this February 19th date--
-17-
H.M.JR: I hoped I wouldn't have to concede that.
MR. LUXFORD: I wanted to tell him right away so
he will know whether he is to cancel it or not.
H.M.JR: Tell him we won't know before Monday or
Tuesday.
this?
MR. GASTON: Is that date of Coyne's affected by
MR. COYNE: February 11th.
H.M.JR: Well, I was, as I say, planning to be
here all of February. Mr. White gave me this talk
that brought tears to my eyes. Oh, yes, he thought
I ought to leave town.
MRS. KLOTZ: I agree with him. I agree with
Mr. White.
H.M.JR: Oh, yes, I think he had something to it
and if nothing else will crytallize--what is going to
happen on the legislation front?
MR. WHITE: McCarran called and we wants to know
whether this legislation is coming up within the next
two weeks, because he wants to leave town for two
weeks and he doesn't want to leave town if this legis-
lation is coming up, so I think he is going to try
to throw a monkey wrench in the machinery on the
silver issue.
MR D.W. BELL: You take care of him.
MR. COYNE: For just what period they want to get
rid of you, we can probably push this broadcast up to
the 18th or 25th.
MR. WHITE: I hope you are not taking it seriously.
F-3
18
-18-
MR. COYNE: I'm not.
MR. LUXFORD: You are not confirmed yet.
MRS. KLOTZ: I hope he will be on Monday.
H.M.JR: Will the inkwells flow then!
Mr. Gaston?
MR. GASTON: I have nothing.
H.M.JR: Mr. O'Connell?
MR. O'CONNELL: I pass.
H.M.JR: Mr. Blough?
I didn't sleep very well last night--if you weren't
here the other day, I am serious about Mr. Gaston's
quoting an editorial from the New York Tribune.
MR. BLOUGH: I beg your pardon. I was here. I
have something to report.
make.
H.M.JR: Before you report, I have a suggestion to
I think it would be very wholesome for the country-this grows out ofaluncheon we had yesterday with Mr.
Gaston and Mr. Parker, who is the President of ScrippsHoward and the editorial writer; but the suggestion I
would like to make is I would like to have you thinking
and working with Mr. Doughton and Mr. George on an
announcement that there is going to be no tax bill this
year. None.
MR. O'CONNELL: No tax legislation?
H.M.JR: No tax legislation. Just let it ride. I
thinktax
it would
No
bill athave
all. a wonderful effect on the people.
F-3
18
-18-
MR. COYNE: I'm not.
MR. LUXFORD: You are not confirmed yet.
MRS. KLOTZ: I hope he will be on Monday.
H.M.JR: Will the inkwells flow then!
Mr. Gaston?
MR. GASTON: I have nothing.
H.M.JR: Mr. O'Connell?
MR. O'CONNELL: I pass.
H.M.JR: Mr. Blough?
I didn't sleep very well last night--if you weren't
here the other day, I am serious about Mr. Gaston's
quoting an editorial from the New York Tribune.
MR. BLOUGH: I beg your pardon. I was here. I
have something to report.
make.
H.M.JR: Before you report, have a suggestion to
I think it would be very wholesome for the countrythis grows out ofaluncheon we had yesterday with Mr.
Gaston and Mr. Parker, who is the President of ScrippsHoward and the editorial writer; but the suggestion I
would like to make is I would like to have you thinking
and working with Mr. Doughton and Mr. George on an
announcement that there is going to be no tax bill this
year. None.
MR. O'CONNELL: No tax legislation?
H.M.JR: No tax legislation. Just let it ride. I
think it would have a wonderful effect on the people.
No
tax bill at all.
F-4
19
-19-
well?
it.
MR. D.W. BELL: Don't they understand that pretty
H.M.JR: Nobody understands it. I don't understand
MR. O'CONNELL: I think people understand there is
no substantial tax revision.
H.M.JR: I won't have anything. Just let it ride.
MR. WHITE: I don't think people are worrying
about it much. They are feeling if there is going to
be a tax bill, it is going to be a tax reduction, so
I don't think an announcement that there isn't going to
be a bill is going to be very well received.
MR. GASTON: Does anybody expect a tax increase?
MR. WHITE: He wasn't expecting it, he was ad-
vocating it. (Laughter)
Particularly, Mr. Secretary, it is not unlikely
the European phase of the war will be over before the
summer.
lation. There probably will be a demand for tax legis-
H.M.JR: Let's put it this way then. No tax bill
will be introduced as long as the war with Germany lasts.
MR. WHITE: That's right.
MR. BLOUGH: I think that is worth considering.
H.M.JR: No tax bill legislation will be introduced
as long as the war with Germany lasts, and let Mr. Goebbels
use that one.
MR. D.W. BELL: As long as there is a war on two
major fronts?
H.M.JR: No, I would say as long as the war with
o
Germany lasts.
F-5
20
-20-
Incidentally, Mrs. Morgenthau was told yesterday
by a Congresswoman from California-MR. LUXFORD: Douglas?
H.M.JR: Gahagan, that at the opening address
Mr. Rankin attacked me viciously and she said, "Please
don't repeat it, but I never hiss; but I found myself
hissing, and then I sort of ducked under my desk and I
don't think they knew where the hiss came from. That
is one thing I have been told not to do in Congress,
but I let out the most terrific hiss."
MR. WHITE: Was that in the House or in a committee?
H.M.JR: In the House.
MR. O'CONNELL: When?
H.M.JR: The first day.
The other thing which Mrs. Morgenthau got which is
interesting, was from a Congressman from Chicago, the
wife of--
MR. BLOUGH: Douglas.
H.M.JR: Oh, when she doesn't know how to vote she
writes Jake Viner to advise her.
MR. WHITE: She's very good. (Laughter)
MR. PEHLE: Nice looking, too.
MR. WHITE: Very nice looking. She would be very
helpful. There are several of them. She is a close
friend of Orvis Schmidt's father-in-law, and she will
be very helpful. She is very capable.
H.M.JR: Merriam. She is a good friend of Professor
Merriam. Anyway, have a look at what Kankin said.
-21-
MR. O'CONNELL: Yes.
H.M.JR: Mr. Blough, think this thing over, will
you?
MR. BLOUGH: I will and I would like to say what
I have done since Gaston brought the matter up at the
last staff meeting.
We met yesterday with this little inter-depart-
mental group, Prichard and Gerhard Colm--and who else?
Musgrave. I brought up the question now that the
Government is taking a tougher attitude on the war,
and should any increases in taxes be recommended?
We thrashed the thing out pretty thoroughly and con-
cluded that while a watchful waiting attitude ought
to be taken on developments, that certainly this is
not a good time now, and that the best that could be
done out of the present situation is to postpone
legislation which would reduce taxes. And that last
or latter point, I think, is in harmony with one the
Secretary just mentioned and that we may be able to
make some capital on holding the line longer and
stronger out of the present situation.
H.M.JR: Well, now, another man who had lunch
with me, and who is very interested in this, is
Chester Bowles.
MR. BLOUGH: I know they are interested over there.
H.M.JR: Will you kind of work with Joe--and whatever way you work together go to this Joint Committee
on the Hill and sort of sound out the possibility of a
three-cornered statement from George and Doughton that
no tax legislation will be introduced as long as we are
at war with Germany?
MR. BLOUGH: Of course, literally none means none
of those little points that sometimes just have to be
taken care of.
O
22
-22-
H.M.JR: That opens the door. I wouldn't have
any.
MR. O'CONNELL: There is only one thing that would
worry me about that. You recall the statement in which
George and Doughton said there is no possibility of any
substantial tax revision, at least until the end of the
war with Germany, and we won't predict now as to
whether it will be then. Unless you are awfully careful in what you say, you might run into a thing that
concerns us holding out some hope of a substantial tax
reduction at the end of the war with Germany. We were
very careful to avoid that.
H.M.JR: Even if that wasn't a published statement,
I would like to have a three-cornered agreement among
ourselves. I wouldn't begin to have all these refinements,
because when you have these refinements some Senator from
Texas or Oklahoma writes in some special legislation on
gasoline or oil or some other damn thing.
H.M.JR: There is nothing we want that must be done
until after the war with Germany ends so that we would
be prepared certainly to support that.
H.M.JR: I wish you and Joe would do something on
that on the Hill for me, will you, and report back to
Mr. Gaston?
MR. BLOUGH: Fine.
H.M.JR: And the New York Tribune--
MR. HAAS: It's an inflationary statement. It may
be criticized on this basis. With all this talk of in-
creasing expenditures, and you put on an absolute ceiling,
rigid like that, it will look as if increases in expenditures
is the only way to secure the funds--borrowing--and that's
inflationary in that regard.
H.M.JR: Well, it also serves notice on these boys
that we are going to hold the line, which is very hopeful.
23
-23-
MR. O'CONNELL: I think this much is true. That
from the earlier statements received, if the newspapers
took it through the conclusion that there would be no
tax increases, and the minor revision that within the
time in the statement, things that might come along
are essentially things that reduce the revenue--although
in smail statements that isn't true.
MR. BLOUGH: Yes.
H.M.JR: Well, if Blough and O'Connell will fix
this thing so that at least for my own satisfaction
1 could feel that as far as we are concerned, we are
not going to ask for any tax legislation, we are not
going to introduce any-MR. BLOUGH: Certainly not. It doesn't increase.
MRS. KLOTZ: Do you have a copy of--
H.M.JR: Kiplinger's tax letter of the 9th?
MR. BLOUGH: I don't have it. I'll look for it.
H.M.JR: If I could have it to read over the week-end-did
out? the Kiplinger tax man talk to you? Did he seek you
MR. BLOUGH: He hasn't talked to me for five years.
H.M.JR: Who does he talk to in the Treasury?
Joe, do you know?
MR. O'CONNELL: No, I don't know.
H.M.JR: Make inquiry, Roy. Does he talk to anybody
in the Treasury before he gets a letter out? Was it
friendly or unfriendly? It is four pages long.
MR. BLOUGH: Generally, they are pretty neutral on
the subject.
H.M.JR: Check and see if he has any pipeline in the
Treasury.
F-9
24
-24-
MR. GASTON: I haven't seen any of those boys around
here in a long time.
MR. D.W. BELL: I haven't seen one in a year.
MR. HAAS: Shelton used to come around. I haven't
seen him for four years.
MR. BLOUGH: They didn't get anything out of us
here and they stopped coming around, so I don't know
just where they do get it. I will see if I can find
out.
MR. D.W. BELL: Roy, don't you think Ezekial
might be interested in what the representatives of
the OPA and Stabilization office feel about the next
three or four months?
MR. BLOUGH: Yes, if we have a couple of minutes,
I would like to do that.
H.M.JR: . I know what Chester Bowles told me.
MR. BLOUGH: These people--Prichard of Vinson's
office was especially eloquent on the danger from the
wage front, immediate danger that labor has come to
the conclusion that after the war with Germany ends,
their borrowing power is going to be greatly reduced.
While it is all right for the Administration to talk
about higher wage levels at that time, that they just
won't get them; and Prichard is very much afraid that
there will be a strong drive for wage revisions upward
immediately, and that that will be reflected in prices
very rapidly.
The OPA man, Walter Salant, feels that about the
only thing that can be done effectively is to increase
production of civilian goods and that doesn't seem to
be in the cards at the moment.
H.M.JR: Sixteen thousand had to be loaned from the
Army and Navy to help on military production. Certainly
there is no chance of helping on civilian goods.
25
- 25 MR. FLOUGH: And the clothing apparently clothing
is reaching a very serious situation. Whether to ration
or not to ration is the problem at the present time, but
there is enough stuff. To ration some of the articles
seems to be the question. So the general feeling there
was that the next six months from now, say up to the
1st of July or so, assuming the war goes on the way it
has been, will be the toughest of the war so far as the
inflation front is concerned. So their feeling about
taxes was not due to any feeling that we are over the
hump or anything like that, but that would not be a very
effective method, and we would have no possible chance
of getting anything in that field.
H.M.JR: Weren't you going to give me a proposed
statement, Herbert, on currency?
MR. GASTON: Well, I just couldn't see how to
write any statement. I didn't think any statement
would be--I thought it would be well not to write one
just now.
H.M.JR: I am not going to bring it up today, but
sometime early next week I will have to talk to all of
you about it. Is that all, Mr. Blough?
MR. BLOUGH: No. The Joint Committee on Internal
Revenue Taxation met yesterday morning and heard the
report on expenditures, which you saw some time ago--
before Christmas. Mr. Lindow presented it, and he did
a very effective job. The reception was extremely cordial and friendly. The feeling of the group was that
this pretty well disposes of any rapid tax decreases,
and the prospects are a good deal less promising than
they had hoped for.
One thing they want is to attempt to project this
into a formal post-war year. We said we didn't want to
do that because it involves assuming certain policies,
26
-26-
important policies about the Army, aid to aged, aid to
unemployed, and so forth. We didn't feel we on a
technical level wanted to make them. They didn't want
to make them either, so they asked us to project it,
assuming we would be making them, and they will work
with those figures. Taft came up afterward and made
a few comments, and said he had a feeling that the
Budget would be close to twenty-five billion dollars,
which, I think, is a promising reaction for post-war periods,
and in view of the fact that people are talking sixteen,
nineteen, and twenty-one, the fact that Taft concluded
it will be in the neighborhood of twenty-five billion
means it will be hopeful as far as the same approach
to post-war periods is concerned. They are going to
meet again Tuesday at which time they are going to
take up revenue reports and probably get into post-
war economic problems.
I have written up very briefly, a few things I
have reported on, for your files.
(Hands Secretary two memos dated January 18)
MRS. KLOTZ: Do you want to read this?
H.M.JR: No, thank you.
MR. BLOUGH: That's all.
H.M.JR: Is your group going to go ahead and meet?
MR. C.S. BELL: I think they will twiddle their
thumbs until you get to them, sir. Supposing I go on
out and get the thing started?
H.M.JR: Get the thing started and tell them to
go ahead. How many people are there?
MR. C.S. BELL: About thirty.
H.M.JR: Why not go ahead and tell them to run
the meeting just the way they would any other day, and
when I am ready I will come in and talk to them? I
don't want them to twiddle their thumbs.
F-12
27
-27-
(Mr. C. S. Bell leaves the conference)
H.M.JR: George?
MR. HAAS: I have nothing.
MR. WHITE: You remember the question about Jesse
Jones paying for the rubber which he bought from the
English that the ships had sunk? We have been trying
to get a basis for asking them to pay for rubber that
was sunk, and it is taking them several weeks to run
down the contracts and we have a letter signed by Leo
Crowley, and there is a place for you to sign and the
Secretary of State, requesting that he pay for the
rubber that was sent, because it was purchased F.O.B.
and therefore he should pay for it, but it has taken
this long to get it.
H.M.JR: Do I have a copy here?
MR. WHITE: Yes.
H.M.JR: What happens after I sign?
MR. WHITE: We will send it to Stettinius to sign,
and it will go to Jones.
MR. GASTON: Doesn't Jones know the terms under
which he buys rubber?
MR. WHITE: He didn't tell us,and the way he stated
it in his letter it looked as though we were out on a
limb.
H.M.JR: What happens?
MR.
WHITE:
As soon as you sign it, if you will
let me
have
it back-H.M.JR: Sidney Sherwood. Is that my old Sidney
Sherwood, Special Assistant to the Administrator?
MR. WHITE: FEA?
28
- 28 H.M.JR: Is that Sidney?
MR. GASTON: That's him.
H.M.JR: Is that where he is now? What do I do?
MR. WHITE: That's all. If I can have it back-(The Secretary signs a letter addressed to Jesse
Jones, undated, and to be signed also by Secretary
Stettinius and Leo Crowley, and hands it back to Mr. White.)
MR. WHITE: Al Davidson has been made General Counsel,
and is taking Mr. Cox's place in FEA. You remember that
chap-
H.M.JR: So one of our boys finally made it.
MR. WHITE: He has been making it quite a while.
H.M.JR: He has been made General Counsel?
MR. WHITE: Yes, in place of Cox; Cox is Deputy.
H.M.JR: Cox is Deputy?
MR. GASTON: Deputy to Crowley.
H.M.JR: How many deputies does Crowley have?
MR. WHITE: I think he has three. He had three.
McCamy is one, and Riley, I thought, was another. I
am not sure--
H.M.JR: And Cox is the first deputy?
MR. WHITE: I don't know if he is called that, but-(Laughter)
MR. D. W. BELL: There were two names. I saw Cox's
name and somebody else's.
o
MR. WHITE: I am going up this week end to meet all
day with CED's conference to see what kind of a report
they can get out.
29
-29-
H.M.JR: Where do they meet?
MR. WHITE: In New York, and I have also made an
appointment with Ruml for several hours SO that--
H.M.JR: There are a couple of good shows in New
York, too.
MR. WHITE: I will be back Monday morning.
There was a letter--we are having a meeting this
afternoon in Dunn's office on Germany, which is the
first meeting after the discussion of yesterday, and
there was a letter that Mr. Grew sent you about the
desire of his group to discuss with you the proposal
for the Russian loan. Now, that meeting you had in
Stettinius' office was supposed to have wound that
up because--
H.M.JR: That covers that?
MR. WHITE: That's through then?
H.M.JR: Yes. That covers that. I mean Grew's
letter to me discussing the Russian Loan. That meeting
has taken place in Stettinius' office.
MR. WHITE: There is nothing for you to initiate,
because it wasn't left clearly at that meeting what the
next step was.
H.M.JR: What the next step was Stettinius said,
"I give you my word of honor in front of fifteen people
here
I will carry your message and explain it amply
to thethat
President."
MR. WHITE: Amen!
MRS. KLOTZ: That letter does not need an answer
H.M.JR: No.
o
30
-30-
MR. WHITE: Lieutenant Tasca who has been in Italy
for a couple of years in the Navy is now back. he is
going to be assigned to the Treasury and he is very
interesting to talk to on this matter. He has a number
of points, and also Lieutenant Willis is back from Italy,
who is working under him, and I think you ought to see
both of them next week.
H.M.JR: Remind me on Monday.
MR. O'CONNELL: Colonel Bernstein spoke to me and
spoke to Harry about getting some Treasury people to
work for the Army on financial matters in Paris and
on into Germany, and he asked for two of our lawyers
that are there. I made a sort of commitment on one
lawyer that works for John Pehle at the moment in
London, Jim Mann, and the three he has asked for are
three we can get along without, in some sense, better
than most other people, although they are very good
men, and I wanted to know, after talking to Harry, what
your attitude was.
MR. WHITE: There are three men; I don't think they
are the same ones.
H.M.JR: There are so damned many lawyers wearing
uniforms doing desk jobs! Let the Army pick from the
people they have. They are lousy with lawyers. It's
ridiculous to call here and ask for lawyers.
MR. O'CONNELL: He wasn't asking for them because
they are lawyers.
H.M.JR: The Army is lousy with them, they have
thousands of them.
MR. WHITE: We just took Andy Kamarck to send abroad.
He is not a lawyer, and the spot that Bernstein has for
him is an excellent one.
H.M.JR: Kamarck, that's different.
31
-31-
MR. WHITE: And the other two-MR. O'CONNELL: One is Ackerman, who has been in
North Africa and abroad working on the types of things
Bernstein is interested in. He just came back. He
has been with us a year and a half and has been working
entirely on Germany.
MR. WHITE: He would be doing the same kind of work
only more so.
MR. O'CONNELL: He wasn't asking for them merely
because they are lawyers but because of their peculiar
experience, and I am sympathetic.
H.M.JR: Don't come around and weep on my shoulder
and tell me you are short-handed.
MR. O'CONNELL: I haven't.
MR. WHITE: We have trimmed the list from fifteen
down to three, Mr. Secretary.
MR. PEHLE: We are holding back on Jim Mann for
the job.
MR. O'CONNELL: All right. I would like to hold
back on him.
H.M.JR: which of the two--the first fellow--Ackerman.
MR. O'CONNELL: O.K.
MR. WHITE: Ackerman and Hynning. Now, I say we
have trimmed the list of fifteen or twenty down to
three.
H.M.JR: Where is Ackerman now?
MR. O'CONNELL: He's here.
32
-32-
MR. WHITE: Bernie asked for fifteen or twenty and
we trimmed it down to three.
MR. O'CONNELL: Ackerman has been here now--
H.M.JR: Is he in uniform?
MR. O'CONNELL: No.
H.M.JR: And you are willing to let him go?
MR. O'CONNELL: Ackerman has--
MR. WHITE: He has been working on Germany with
Hynning.
MR. O'CONNELL: Ackerman and Hynning are in the
same category. He has worked almost exclusively on
Germany. He is a Treasury lawyer.
H.M.JR: He is not in uniform and they will go
as civilians?
MR. WHITE: Detailed to the War Department as
civilians and no communications between us and them
is allowed. It's a little different from the London
situation.
H.M.JR: Will you get this thing settled? Hynning,
Ackerman and Kamarck to be detailed to the Army to
assist Colonel Bernstein?
MR. C.S. BELL: Yes, sir.
H.M.JR: And when they come around and when they say
how short-handed they are, remember they have initiated
this, you see?
MR. C.S. BELL: Let them go, yes, sir.
H.M.JR: There will be no recriminations and saying
how short-handed they are, see? They have lots of people
they can spare for the Army, Charles, see?
33
-33-
MR. WHITE: Wait.
them.
H.M.JR: They have lots of people--they can spare
MR. WHITE: I will let the lawyers speak for them-
selves.
H.M.JR: They are lousy with lawyers and they want
to take three civilians and detail them to the Army.
MR. WHITE: That's not quite the case.
H.M.JR: Why not?
MR. WHITE: Take Kamarck--
H.M.JR: That's a man I suggested myself when he
came over, but these other two-MR. WHITE: We took him with the understanding with
you that we would send him abroad because we didn't want
to keep him here.
MR. O'CONNELL: I am only repeating myself. Originally-I am not arguing, Charlie, and I just understand-MR. WHITE: You are confining yourself to the lawyers.
MR. PEHLE: Go ahead, Joe.
T-1
-34-
MR. O'CONNELL: I give up.
H.M.JR: On these lawyers--here are a couple of
civilian lawyers we're giving to the Army, and I repeat
myself, the Pentagon Building is bursting with lawyers
in uniform.
MR. O'CONNELL: They are not these kind of lawyers.
MR. DuBOIS: The only reason we made that decision
is that we felt from an over-all point of the German
problem, that these people can make a more important con-
tribution there with Bernie, with their experience, than
they can here.
MR. O'CONNELL: They ought to be in that area where
they work for us and the War Department, and those fellows
are more valuable working for the War Department than they
are over here working for somebody else.
MRS. KLOTZ: They have 8 point there. You didn't
hear the end of it.
H.M.JR: They are going to hear the end of it from
me. All right. I still say that in the whole Pentagon
Building there must be a couple of lawyers in uniform
they can take, but you boys say no and Bernstein says
no, so it's all right with me.
How far have we got? All right, John.
MR. PEHLE: We are applying through the War Refugee
Board which is sending an application through the Budget
Bureau to the President for one million, one hundred
twenty-five thousand dollars for the Foreign Relief Fund
to use for further food packages. We previously sent
three hundred thousand, and they got permission to send
another three hundred thousand, and Procurement is going
to make them up.
H.M.JR: Do you want me to sign it?
MR. PEHLE: That is not necessary. Senator Murdock
T-2
35
-35-
got in touch with Mr. Silvermaster in connection with
one of the persons working for Silvermaster, Herbert
T. Weber, who has quite a bit of background in unemploy-
ment insurance, and Murdock wants to borrow him.
H.M.JR: For what?
MR. PEHLE: For a study Murdock wants made on
unemployment insurance. It would be a courtesy to the
Senator, and we can spare him.
H.M.JR: I am in favor of it.
MR. PEHLE: All right. It won't hurt to do a favor
for Murdock.
I read the transcript of the press conference on
the veterans thing, and thought that in spite of the fact
that you didn't like the answer, you gave it very well.
H.M.JR: I agree.
MR. PEHLE: You were on sound ground. It isn't an
easy answer to give, to pass the buck to the Board, but
it is their responsibility and not ours.
H.M.JR: I agree, as far as versus the Treasury and
the public is concerned, that that was the only answer
I could give, but versus you and me, I still want to
have
a showdown with you. But I certainly defended your
honor.
MR. PEHLE: You certainly did.
and my own, but I still think that I
don't know, I haven't seen my press clipping today. I
don't know what-H.M.JR:
MR. PEHLE: I haven't seen anything yet, but-H.M.JR: I still want to have a showdown.
(Mr. C. S. Bell re-inters conference)
T-3
28
-36-
MR. PEHLE: At your convenience.
H.M.JR: Yes.
MR. PEHLE: I just want to mention-H.M.JR: He has something tough coming after he's
been so polite.
MR. PEHLE: No, I haven't. The Philipine government
has sent a letter into Procurement from Osmena asking the
Procurement Division to locate all sorts of office supplies and typewriters and everything for them. The
Japanese cleaned everything out of Leyte. They even
took paper. They just wiped everything clean, and Osmena
has asked our help.
I have cleared with Interior, who usually have charge
of Philipine matters. We are getting most of the stuff
for them.
H.M.JR: Good.
MR. PEHLE: Mrs. Nelson--that's the mother of Page
Nelson, one of the boys caught in the Philipines--called
me and said she had received a postcard from him dated
last June, the only word in his handwriting she has ever
received in three years, since he has been a prisoner.
He says he is all right and was asking if he is still on
the payroll.
MR. CHARLES BELL: Yes. All of them are.
MR. PEHLE: It is the first direct word that has ever
been received from any of those people in three years,
since they have been prisoners.
H.M.JR: Based on that, we received some news concerning young Lieutenant Haas. Six months ago he was
supposed to be going up in an observation plane, observation for a tanker, and they had not heard from him.
They took for granted he was dead, and last night through
-37-
General Marshall's office we got word that he is a
prisoner in Germany.
MRS. KLOTZ: Six months?
H.M.JR: He is a prisoner in Germany. The other
boy, Robert Haas, was an aviator, and he was killed early
in the war. He was in the Navy, and they thought this
boy was dead, but they got word last night, after six
months, that he is alive.
Charlie Bell's office may want to notify
all ofMR.
the PEHLE:
families-MR. CHARLES BELL: We will send them a copy of the
notice, the post card, if Mrs. Nelson is agreeable.
H.M.JR: How many of them are there?
MR. CHARLES BELL: About five.
H.M.JR: I would like to fix it myself.
MR. WHITE: Do you think that might be a reassurance,
or do you think it might be the contrary. They might feel
she got a postcard and they didn't.
MR. PEHLE: The postcard is dated last June.
H.M.JR: write a letter as to the payroll status.
MR. PEHLE: They know the payroll status.
MRS. KLOTZ: The families know, yes.
H.M.JR: I just thought you meant the payroll.
MR. PEHLE: I just wanted to mention to you that the
Office in the
at
is
located
it was set up it was largely a question of warehouse
Procurement Fort Worth. Regional It there, Texas because area at is the located time
space which could only be obtained there. Sooner or later
38
-38-
we are going to have to shift that thing over to Dallas
and there will be a fight about it.
H.M.JR: Wait until I'm away, will you please?
MR. PEHLE: I just wanted to tell you that we are
laying plans to do it before the war is over, because if
you don't do it during the war, you will never get a chance.
H.M.JR: Listen, fellow, before you do it, consult
with Joe O'Connell what this means.
MR. PEHLE: I'll raise it.
H.M.JR: And make darn sure it's all right with the
Speaker.
MR. PEHLE: That's why I raised it here.
H.M.JR: Make sure moving it isn't--I think he's
from the Dallas District, but I certainly would consult
the Speaker and Tom Connally.
MR. PEHLE: I'll clear with Joe before we do anything.
It is very much in the preliminary stage, but I want to
do it if possible. They can cause a lot of trouble.
H.M.JR: when I was in Farm Credit, remember Herbert?
What is the capital of Mississippi? We wanted to move the
Farm Credit office from there.
MR. GASTON: I just don't remember that one.
H.M.JR: I do, and Pat Harrison--it caused us more
trouble. I said, Let's be inefficient and keep it where
he wants it.
MR.PEHLE: We may come to that.
H.M.JR: Sometimes it is more useful--I know it is a
terrible thing to say. Remember in St. Louis, in Missouri,
raising cane in that very small office down at Columbia?
Remember all the trouble, and wasn't it Cannon--
T-6
39
-39-
MR. COYNE: Yes, Cannon. We are paying a man twenty-
six hundred dollars a year.
H.M.JR: And I said, "Keep an office there," didn't
I?
MR. COYNE: Yes.
H.M.JR: Just to keep an office; what can we do?
Sometimes those things--you have to do it with your eyes
open. One of the reasons that Byrnes has never forgiven me
is because I got rid of a fellow out of Farm Credit. He
came down to my old office and sat there. The fellow
was a drunkard. It turned out he was his political manager.
I fired him, and he has never forgiven me.
MRS. KLOTZ: Why did he say he had been drinking?
H.M.JR: He said he had been taking cough medicine
every morning. He brought the medicine down and put it
on my desk. It was one of these-- what do you call. it,
Purina? (Laughter) He has never forgiven me. He brought
the medicine down here and said, "You smell it." It was
one of these malt extracts.
MR. GASTON: When we visited him in his home in
Columbia he had three different medicines. That was before
repeal--three different medicines in barrels in the cellar.
(Laughter) Excellent medicines.
H.M.JR: Remember the nice fish fry they gave us at
Columbia.
MR. GASTON: Yes. Asbury Lever, L-e-v-e-r; that is
the fellow.
H.M.JR: And what is the name of the fellow who ran
the paper down there? It was an Italian name.
MR. GASTON: I don't remember. Lever was chairman
of the Committee on Agriculture during the last war.
T-7
-40-
MR. HAAS: Lever, the author-MR. GASTON: Author of the Lever Act.
it up.
MR. PEHLE: I will watch it. That is why I brought
H.M.JR: We had a fellow from Virginia on Appropriations,
Woodrum. This is funny. I am reminiscing at my age. We
had a fellow Woodrum, and there I was smart. I learned
"me lesson." This fellow was getting forty-six hundred,
and he interfered with the whole efficiency of the office.
I partitioned him off and put 8 cot and chair in and told
him, "O.K., lie down, but don't go and associate with
anybody in the office." He had a cot and a chair, and
he lay there all day and slept, but he didn't interfere.
We paid him his forty-six hundred, and he didn't interfere.
MR. PEHLE: You are not talking about Woodrum's
son, are you?
H.M.JR: He told me, "Keep this fellow on, or you
won't get your appropriation.
I said, "O.K."
He slept. I said, "Don't you ever leave that office."
(Laughter) Those are some of the things a historian can
put in. (Laughter)
MR. PEHLE: Mr. Bell and I arranged something in
connection with Mr. Taber the other day. It was done at
a rather crucial moment in connection with Appropriations
hearings. I called him out of the hearing to give him
good news. I am sorry we are not up there this week
while he is out of town.
H.M.JR: You have to do those things every once in
a while with your eyes open and smile. Danny called at
the right time. John was ready to make a favorable decision,
anyhow, so he got the benefit of it.
-41-
MR. PEHLE: In talking to Governor Hurley the other
day, he told me it was his idea that the Surplus Property
Board ought to establish an office in each State Capitol
to deal with State and municipal problems, but the Board
had taken that up with Byrnes, and Byrnes said "Nothing
doing. Byrnes said he wanted the Board to be strictly
a policy organization, and not-11
H.M.JR: Strictly political?
MR. PEHLE: Strictly policy, and not to have any
field offices. It looks like we are going to have to
establish offices in every State.
H.M.JR: Really?
MR. D.W. BELL: What have you got now, eleven
offices, or twelve?
MR. PEHLE: Eleven in this country, and one in
Puerto Rico.
I heard some time ago that Crowley had at one time
made a misstatement to the effect that surplus property
ought to be held and not disposed of, because after the
war it would be used to industrialize China and other
countries, including Germany. But I was unable to lay
my hands on the statement.
Now, I see that Mr. Clayton, in response to interviews with the press, has said that--the press said that
he has partially confirmed rumors that some materialstalking about surplus materials--would be sold on credit
to China, France, South American countries, and possibly
to Germany in order to develop industry in these countries.
H.M.JP Refer it to Mr. White. He is seeing Clayton
this afternoon.
MR. PEHLE: I think they ought to stop Clayton from
making such statements.
MR. WHITE: That must be some time ago.
42
-42-
MH. PEHLE: No, January 3. He has nothing to do
with Surplus Property, and in the second place-H.M.JR: In his economic policy?
MR. O'CONNELL: But the Surplus Property Board
has well--
MR. PEHLE: He does have something to do with the
foreign side, but whether our policy is going to be used
is the question.
noon.
H.M.JR: Mr. White will take care of it this afterMR. WHITE: We will have to put this in abeyance to
use when we ask Ness.
H.M.JR: I approve, Mr. White.
MRS. KLOTZ: That is that, Mr. Pehle.
MR. LUXFORD: It will go on one of those memos some
day. (Laughter)
H.M.JR: Is there anything else?
MR. PEHLE: That is all.
H.M.JR: These meetings last a long time, but I
think they are useful.
MR. LUXFORD: I have nothing.
MR. COYNE: I have two small items. V-mail is
going along; we will have Art work on it today, and Dave
Levy is at work and is busy preparing your February 11
address.
H.M.JR: You know, before Ted left he was working
on this idea that I go on the air once a week, and I
never heard any more about it.
T-10
43
-43-
MR. COYNE: We are still working on that; the Blue
Networknow.
wants it, and Deve Levy is getting some background
material
H.M.JR: I don't know, but I suggested in the first
instance that we go to the Blue, but Ted didn't want to
go to the Blue.
MR. COYNE: That is the way it worked out.
H.M.JR: Who contacted Chester La Roche.
MR. COYNE: Tom Lane did two or three weeks ago.
H.V.JR: Good.
Joe?
MR. DuBOIS: I have nothing.
H.M.JR: I just want to congratulate you on the
work you did. It is fine.
MR. DuBOIS: I would like to say that it is still
not clear, that I am not going to build up fals hopes
that the thing is going to work out like it should. I
have my fingers crossed as to what the ultimate outcome
of this will be.
H.V.JR: Mr. Daniel Washington Bell.
MR.
D.
W. BELL: I have nothing this morning.
H.M.JR: Charles? Have you got a middle name?
MR. C. S. BELL: Stewart.
H.M. JR: Charles Stewart Bell.
MR. C. S. BELL:
Buzz Aarons is back from London.
H.M.JR: I saw him.
- 44 MR. C. S. BELL: And Joe wants to appoint him
Assistant General Counsel. He has been Assistant to
the General Counsel. I have that letter.
Joseph B. Friedman is now available again to Joe. He
would go into Buzz Aarons' old job, just as Assistant to
the General Younsel. That contemplates an increase in
salary. Both of these contemplate an increase in salary.
H.M.JR: I tell you what, if you tell them outside
there right after Lauch Currie leaves- if you and Joe
O'Connell would come here and have the boys here, I will
give them these. I will sign them now, but tell them as
soon as Lauch leaves I would like to see them.
(Mr. Bell hands Secretary letter addressed to Lehman
C. Aarons, dated January 19, 1945, which the Secretary signs.)
H.M.JR: How much increase for Friedman?
MR. C. S. BELL: Five hundred dollars. This is one
for William H. Taylor. (Hands Secretary letter to Mr.
William Taylor, dated January 14, 1945, which the Secretary
signs.) I understand Harry spoke to you about that.
MR. WHITE: Could you see him, too?
H.M.JR: Sure. Include them all at the same time.
MR. C. S. BELL: Congressman Celler's amendment is
to increase Cabinet Members' salary to twenty thousand
dollars, and increase the others. I didn't know whether
you knew that.
H.M.JR: I heard a lot of discussion about it. I don't
know how the Cabinet feels. They seemed to think it was bad.
I think Vinson spoke on it, that how could they turn around
and tell little steel and the rest of them they couldn't
have it if they gave it to the legislative and executive,
see? But I did want to say that if there was any such
o
T-12,
45
-45-
thought--I think that they may not get it now, but
eventually it should be taken care of--and the Under
Secretary and Assistant Secretaries, see? If the
Cabinet Members go to--
MR. C. S. BELL: Twenty thousand from fifteen.
H.M.JR: I think the Under Secretaries should get
fifteen and the Assistant Secretaries twelve. I t h i n k
that would be relatively fair.
MR. C. S. BELL: Couldn't Tom Lynch cover that
when he reports on this?
H.M.JR: It isn't coming out, but you have got to
do the thing. I understand they are not mentioned in the
bill.
MR. O'CONNELL: That particular bill--there are
several bills that have been proposed to Congress.
H.M.JR: Just to establish the position. I think
that they recognize that if we get it, then some day maybe
they will get it, too.
MR. LUXFORD: Mr. Secretary, did Judge Vinson consider
enacting the law now, but making it effective sixty days
after V-day or something like that?
H.M.JR: He talked it down and thought it was bad.
I said facetiously at Cabinet, having just made out
my income tax on that day, that unless the increase was
exempt from taxes, I was against it. If it would increase
my salary five thousand and have that five thousand exempt,
it would be very nice.
MRS. KLOTZ: You would be getting what, fifteen?
H.M.JR: See, complaining already.
MRS. KLOTZ: No.
46
-46-
MR. D.W. BELL: by the way, did you see where
Senator Thomas introduced a resolution to provide a
commission along the lines of your recommendation,
only a good deal broader--a foreign economic commission?
MR. GASTON: ne had everybody in town on it.
MR. D.W. BELL: He has twelve public members,
eight or ten from Congress, the Secretary of Agriculture,
Secretary of Commerce--
MR. O'CONNELL: Is it something like Foreign
Economic Administration?
MR. D.W. BELL: Along the same line, except broader.
H.M.JR: Maybe Crowley or Cox had that introduced.
MR. O'CONNELL: That was my reaction at first. The
Foreign Economic Administrator would be one of the members.
MR. DuBOIS: Just a second, Mr. Secretary. I should
have said this before. when you see Aarons and Friedman,
could you also mention this war criminal thing to them?
They did a lot of work on it. I would like to say that
it isn't my work. Joe O'Connell, Luxford, Harry White,
Aarons, Friedman everybody-- is a product of the
work of a lot of us. Aarons and Friedman also did a
lot of work on it.
H.M.JR: Is that why they are getting promoted?
MR. DuBOIS: They deserve promotions without that.
H.M.JR: All right.
to
July
1/19/45.
Leo Pasvolsky
He has been writing on Russian and international affairs
since 1916 and his writings have not been sympathetic with the
Soviet Union. He has consistently, since 1917, underestimated
the economic, political and military powers of the Soviet Union.
(One week after the German attack against the Soviet Union Pasvolsky said dogmatically that the Russian army would be annihilated within several weeks and the Soviet Government completely
destroyed.)
He has collaborated with Harold Moulton extensively since
1922 and up to several years ago maintained his connections
with Brookings Institution.
(Moulton was recent author of a book on post-war treatment
of Germany and Japan which took the position that both countries
should be permitted to return to their previous economic status.)
We have been told by Mr. Collado that Pasvolsky was attempting to "knife" Bretton Woods.
Penrose, Mosley and Radius, Political and Economic Advisers to
Winant on the EAC
Penrose is a former university professor who became associated with Ambassador Winant in the International Labor Office
and has been retained by Mr. Winant as his adviser almost con-
stantly since that time. He is not a regular State Department
employee.
Penrose 1s a humanitarian who has said that Germans must
be given at least 2,000 calories per day as a minimum diet.
Mosley is a career diplomat. After listening to Morgenthau
and White on the German problem in London he told other Treasury representatives that the ideas of Morgenthau and White were
fantastic, childish and imbecilic.
-2Radius was Berle's assistant. He was sent to London to
arrange for United Nations Organization to control inland
transportation in Europe. H18 efforts failed because he was
unable to reach agreement with the Russians on the use of the
transportation facilities of Germany.
All three of these advisers are completely out of sympathy with JCS 1067 in principal and in detail, and have at-
tempted to undermine the policies expressed in that document.
Robert Murphy
His record in France and North Africa is well known.
Murphy is on his spoken word hostile to and suspicious of the
Soviet Union. He has said that you cannot trust "those people"
and that it is impossible to deal with them. Murphy is spreadng the story that the President has renounced the ChurchillRoosevelt-Quebec memorandum on Germany and quotes the President
as saying that he doesn't know how he ever signed that document.
1/18/45
49
To Mr. McCloy:
Carbon of Treas memo "The War Dept
Memorandum Concerning the Punishment of
War Criminals" and copy of War Dept
memo "Trial and P,nishment of European
War Criminals" undated
HM, Jr's memo of transmittal dated
1/19 and signed 6. Morgenthau, Jr
selfly Pauck 1005
To Judge Rosenman:
Bauck 10.05 50
Ribbon copy and one caron of
0
Treas memo 1/19 "The War Dept memorandum
Concerning the Punishment of War Criminals"
and typed copy of War Dept memo to Pres
"Trial and Punishment of European War
Criminals"
hM,Jr's memo to Judge Rosenman
dated 1/19 and signed n Morgenthau, Jr
January 19, 1945
MEMORANDUM FOR MR. McCLOY
There is attached a copy of a memorandum
which we have submitted to Judge Rosenman
containing comments which we in the Treasury
have with respect to the War Department memorandum
concerning the trial and punishment of war criminals.
Secretary of the Treasury.
Attachment.
JED:ecr - 1/19/45
January 19, 1945
MEMORANDUM FOR JUDGE ROSENMAN
There is attached a memorandum setting
forth the comments which we in the Treasury desire
to make with respect to the War Department memoran-
dum concerning the trial and punishment of war
criminals.
I have sent a copy of this memorandum to
Mr. McCloy of the War Department.
Secretary of the Treasury
Attachment.
O
53
January 19, 1945
MEMORANDUM
Re: The War Department Memorandum
Concerning the Punishment of
War Criminals.
With respect to the attached draft of a memorandum for
the President, concerning the trial and punishment of European
war criminals, we in the Treasury have the following comments
to make:
(1) We think that the most fundamental issue which the
President should focus on immediately is the procedure to be
followed which will give the fullest possible effect to the
following provision in the Moscow statement on atrocities
of November 1943:
"At the time of the granting of any armistice
to any government which may be set up in Germany,
those German officers and men and members of the
Nazi party who have been responsible for, or have
taken a CO senting part in the above atrocities,
massacres and executions, will be sent back to the
countries in which their abominable deeds were done
in order that they may be judged and punished accord-
ing to the laws of these liberated countries and of
the free governments which will be created therein.
It is our view that, in accordance with the principle
laid down by this provision, the Allied military authorities
should hand over upon demand, without any examination of any
nature whatsoever of the merits, all Germans requested by any
of the United Nations. These Germans would be returned to the
country demanding them where they would be tried and disposed
of according to the laws and procedures of that country.
Specifically, it could be provided that upon a request
filed with the appropriate authorities by a representative of
any of the United Nations, any person who was stated in such
request to be charged by such United Nation with an offense
against its laws or its nationals, or under the laws of war,
should immediately be delivered up to the designated authorities
of such country. Such request should be promptly and summarily
complied with upon the apprehension of the person named in the
request. If the same person is requested by the representatives
of more than one country, such person should be delivered up to
the country charging him with the offense which, in the judgment
of the appropriate authorities, is most serious. Compliance
with any request, however, should not be hold up on the grounds
that other requests for the same person may be anticipated.
A
time limit should be set, say six months, during which the
-2country to which the person is delivered must convict him or
else return him for delivery to such other country as may desire
to try such person.
As provided in the Moscow Declaration this provision
would not apply to the case of the major criminals, whose
offenses have no particular geographical localization.
From the standpoint of keeping faith with our allies
as well as with our own people, we feel that it is most
important that no attempt be made to cut away at the principle
of the Moscow Declaration by provisions such as those requiring
that a formal extradition procedure be followed, that prima facie
evidence as to the guilt of the person be established, etc.
The extradition procedure should be administered in the most
ple and expeditious manner, the only question being one of
identifying the individual or group of individuals requested.
(2) Whatever procedure is adopted to deal with the war
criminals who are not turned over to the various United Nations,
this procedure should not involve any agreement in the form
of a treaty, as is suggested in the War Department memorandum.
We are of the opinion that any attempt to deal with this problem
through a treaty is totally unnecessary and could only lead to
endless and frustrating delays and disagreements; and that if
the problem is handled in this way we might have even a worse
fiasco than we had after the last World War. If it is felt
for any reason that some sort of a formal agreement between
the United Nations is necessary with respect to some aspects
of this problem, an executive agreement entered into between
the nations concerned can be just as effective as a formal treaty.
(3) With respect to those criminals who are not requested
by any of the United Nations for trial in their own country,
the important thing in our mind is that these people be tried
by military tribunal under the most simple and expeditious
procedure that can be devised. Our fear with respect to a
conspiracy trial such as suggested in the War Department
memorandum is that, unless the greatest possible effort is
made to avoid legalistic red tape, it may become simply another
glorified "sedition trial".
If it is possible to have such a trial which would
carry with it the dignity of recognized judicial procedures,
but which at the same time would be unen cumbered by the technical
delays and defenses which even under our own system frequently
impede the execution of essential justice, then, in our opinion,
the suggestion that there be such a trial has some merit. Such
a trial might serve to demonstrate to the world that we as
55
-3-
civilized nations are able to bring to justice by regular
legal methods those who have committed unspeakable crimes
against humanity and might accordingly increase respect for
ourselves and for law and order. But if criminals known to
the whole world by their acts are permitted to delay punishment
by reliance on technical legal rules, we would earn the enmity
and disres ect of world opinion. The question, therefore, is
whether a procedure can be devised which will afford the
defendants some of the privileges afforded to defendants under
our normal criminal procedures and which will not at the same
time impede the punishment of those already convicted at the
bar of world opinion. If it is possible to devise such a
procedure, it will certainly be necessary that it assure such
things as the following:
(a) That the pleas of sovereign immunity, superior
orders, and insanity be eliminated as automatic defenses.
(b) That the crimes for which punishment is sought
be so specifically defined that the defendants will not
be able to argue collateral and irrelevant issues. For
example, Hitler and the other leaders should not be
permitted to reargue the theories expounded in "Mein Kampf"
and other expositions of Nazi dogma. They should be
confined to specific factual issues, such as, did the German
army invade Poland, Czechoslovakia, etc., and did German
civilians and military personnel pursue certain courses
of action in those countries and in Germany itself.
(c) The opportunity of the criminals to speak in
their own behalf should also be strictly limited as to time.
(d) The representatives of the Allied governments
should be completely unrestricted by rules of evidence
and other technicalities in presenting their case against
the defendants.
The ar Department memorandum provides that once the
judgment in the conspiracy charge is obtained, the civil and
milItary courts of the several United Nations will proveed to
try the members of the organizations which were adjudicated
to have been participants in the conspiracy and that these
trials would ascertain the nature and extent of their partici-
pation and fix the punishment of each participant in a measure
appropriate in the particular case.
We feel that if there is to be a conspiracy trial along
the lines suggested that the judgment in this trial should be
conclusive as to the guilt of those persons who fall within
56
-
those groups which are adjudged to have taken part in the
conspiracy. Thus, if organization X is adjudged to have
participated in the conspiracy, the only questions remaining
would be the following, which could be handled summarily
(a) The identification of the individual members of
Organization X.
(b) The determination that all members of Organization
X should receive as a minimum a certain type of punishment
with gradations depending upon the position of responsibility
held by such individuals in the organization.
(4) Whatever procedure is worked out must cover the
punishment of crimes committed by Germans against Germans and
persons of other Axis nationalities. If the conspiracy charge
is used, it should cover, for example, the murder of Jews and
other minority groups of Axis nationality.
0**#**
Above all, it is most important that in dealing with
this problem we recognize the fundamental fact that international
law must be dynamic, not static. Unless it grows as the problems
which the world faces grow, it will die. The respect which
the people of the world will have for international law is in
direct proportion to its ability to meet their needs. The one
way of assuring that the trial and punishment of war criminals
will produce a cynical public opinion would be to attempt to
apply past practices and procedures growing out of the relatively
puny wars of history to the present gigantic struggle for survival.
International law envisions the handling of novel situations
according to the rule of reason. When confronted by problems
which can not adequately be dealt with in accordance with
historical precedents, we must approach them with boldness,
courage and the determination to advance the science of international law by making the necessary decisions in a manner
consistent with the ethical, moral and humane principles
recognized by civilized men. The responsibility of the United
Nations in this unprecedented situation is a heavy one. It
must not be discharged with primary emphasis on the technical
construction of obsolete rules of conduct, but, on the contrary,
it must be discharged with due regard to achieving the goals
for which this war is being fought. There are no rules of
international law which present legal obstacles to obtaining
these goals.
1-18-45
WAR DEPARTMENT
C
0
Washington 25, D. C.
P
Y
MEMORANDUM FOR THE PRESIDENT:
Subject: Trial and Punishment of European
War Criminals.
We have been giving consideration to ways and means
for carrying out the United States policy regarding the trial
and punishment of war criminals, as established in your state-
ment on that subject dated October 7, 1942, the United Nations
Declaration on Persecution of Jews of December 17, 1942, the
Concurrent Resolution of the Congress of the United States of
March 18, 1943, (57 Stat. 721), the Moscow tatement on
Atrocities of November 1943, and your statement on the subject
of persecutions dated March 24, 1944.
DIFFICULTIES INHERENT IN SEPARATE TRIALS FOR INDIVIDUAL
OFFENSES
Any attempt to reach t ese crimes on the basis of the
separate prosecutions of large numbers of individuals will
only make good the Nazi assumption that their crimes would
go unpunished if they committed them on a sufficiently grandiose
scale. The practical difficulties of proceeding on this basis
are almost prohibitive. The crimes to be punished have been
committed the world over, and have been participated in by
thousands upon thousands of offenders. Literally millions of
victime and witnesses to these offenses have perished.
AS we read the pronouncements mentioned above, they
establish the United States policy that we will bring to trial
and punishment not only technical violations of the laws and
customs of war, but also (1) atrocities committed by the Nazis
before there was a state of war, and (2) atrocities committed
by them against their own nationals on racial, religious, and
political grounds. This raises the further complication that
these last two classes of offenses in and of themselves are
not cognisable as war crimes in the most limited and technical
sense. Moreover, the prosecution of Axis leaders for offenses
against their own nationals might be opposed as setting an unacceptable procedent of outside interference in the domestic
relationships between a sovereignty and its nationals.
SECRET
-2NAZI ATROCITIES, BOTH PRE-WAR AND SINCE, REPRESENT A
CRIMINAL C HSPIRACY
The criminality with which the Nasi leaders and groups are
charged does not consist of scat ered individual outrages such
as may occur in any war, but represents the results of a
systematic conspiracy to achieve domination of other nations
and peoples (a) by deliberate violation of the rules of war
as they have been accepted and adhered to by the nations of
the world, the violation of treaties and international con-
ventions and customs, and mass extermination of peoples, OF
(b) by a course of conduct reasonably and probably Involving
such violations. The objective in the prosecution of Nazi
war crimes should be not only to punish the individual criminals,
but also to establish and condom the basic criminal purpose
underlying the individual outrages.
The writings and statements of the Nazi leaders themselves Indicate that, beginning even prior to their assumption
of power in Germany, they have been engaged in this conspiracy.
The carrying out of the conspiracy demonstrably involved the
commission of the atrocities and war crimes which the United
Nations have pledged themselves to punish. We believe that
further research, which should be undertaken promptly and
carried through expeditiously and thoroughly, will develop the
full scope of this conspiracy so that it may be proved accord-
ing to accepted judicial standards before a fair tribunal.
LAW OF CRIMINAL C CONSPIRACY APPLICABLE
The well recognized law of criminal conspiracy makes
punishable not only the use of unlawful means to attain lawful
ends, but also the use of lawful means to attain unlawful ends.
An indictment upon a charge of conspiracy should be returned
against the leaders of State, the governmental and party agencies
such as the SA, SS and Gestapo, and other individuals and groups
who during the time in question have been in control of formulating and executing Masi policy. Under such charge there
would be admissible in evidence the acts of any of the conspirators done in preparation for, in furtherance of, and in consummation of the conspiracy, regardless of the fact that,
separately considered, certain of these acts could not be
prosecuted as war crimes in the accepted and most limited
definition of that term. The pertinent proof would include,
among other things, atrocities committed before there was a
state of war, and those committed by the Nasis against their
own nationals on racial, religious and political grounds.
SECRET
-3The indictment could properly include, in addition,
conspiracy counts covering the particular unlawful purposes
of such organisations as the SS and Gestapo, and counts
charging other particular acts of criminality committed by
the respective defendants or groups of defendants. These
additional counts would, to a substantial degree, be established by the proof on the general count, and at the same time
it would be possible to adapt the trial procedures to the
facts developed by research as indicated above.
CONSPIRACY CHARGE COULD BE DISPOSED OF IN SINGLE TRIAL
The basic charge of conspiracy and the additional counts
in all probability could be disposed of in a single trial of
the individuals and organizations involved. Certainly no more
than a very few trials would be required to dispose of this
basic charge.
The proceedings would be in two stages:
Stage A - The United Nations would physically bring
to the bar a group of individual defendants considered to be
fairly representative of the defendant groups and organizations.
An ad judication would be sought of the existence and purposes
of the conspiracy, its results, and the nature, extent, and
fact of participation by the several defendant groups and
organizations. The court, in this Stage A proceeding, (a)
would prescribe the punishment of those individual defendants
physically before it who are convicted, and (b) would determine
the facts of the conspiracy and establish them for the purposes
of further proceedings against the individuals and organizations
dealt with in the adjudication, and the members of such organisations, who are not physically before the court in Stage A.
Stage B - Thereafter the civil or military courts
of the several United Nations (or mixed tribunals of two OF
more of them) would proceed to try the members of the organisations which were adjudicated in Stage A to have been par-
tisipants in the conspiracy. These trials would consist of
(a) determining whether the persons charged with being members
of these organisations were in fact members; (b) ascertaining
the nature and extent of their participation in the conspiracy;
and (c) fixing the punishment of each participant in a measure
appropriate in the particular case. Thus, for example, in
.4those Stage B cases in which the proof showed no more than
membership in the conspiracy in a minor capacity, no capital
sentence would be imposed, and any other penalty would be so
adjusted as to reflect fairly the degree of participation in
the conspiracy by the individual concerned.
The procedure proposed above could be handled expeditiously,
and would insure that justice will not be defeated by delays and
complications. The proceedings will be judicial and not political.
They will consittite an application of established legal concepts.
They will afford a fair trial to those charged with atrocities.
A condemnation after such a proceeding will meet the judgment of
History, so that the Germans will not be able to claim, as they
have been claiming with regard to the Versailles Treaty, that
an admission of guilt was exacted from them under duress.
The procedure discussed above will not preclude trial of
individual members of the groups or organizations involved in
the conspiracy in the national courts or military tribunals of
any of the United Nations, for particular war crimes or other
offenses committed by these individuals. Regardless of their
participation in the conspiracy or conviction for participation
in it, such individuals may be remitted to the interested United
Nation for trial for such other war crimes and offenses.
It may be noted, in addition, that after the charge is pre-
ferred, and pending prosecution and punishment, those of the
criminals who have been or may hereafter be taken prisoners of
war will not have any protected status under the Geneva Prisoners
of ar Convention. They can then be dealt with freed from the
restrictions of that Convention.
RECOMMENDATION
We recommend that you approve this general method of
dealing with the basic war crimes problem.
APPROPRIATE COURTS FOR TRIALS OF CONSPIRACY CHARGES
Two princi al types of court could be employed for the
trial of conspiracy charges of the character outlined above:
I. Tribunal Created by Treaty. The charges could
be tried by an international court created by treaty, which
-5would (a) define the crimes to be tried, (b) establish the
composition and jurisdiction of the court to be established,
and (c) make suitable povisions for court procedures, thus
insuring the elimination of dilatory and irrelevant tactics
without impairing the essentials of due process.
Such & treaty should be simple and should limit the
jurisdiction of the court to the trial of the charges specified
in this memorandum and nothing else, thus avoiding long-term
and unprecidtable commitments. This treaty would also determine
whether the court shall be created with both military and
civilian members or on a purely military basis, appointed in
a manner to be stated in the treaty.
The creation of a court by treaty has the following
major advantages:
(1) The treaty would specify the offenses
against international law to be tried and the general procedure to be employed. Adoption of the treaty by the several
signatory nations would make its provisions a part of the law
of these ations and would afford a proper basis for the
application of the specified lay and procedures both by the
treaty court and by the civil and military courts of these
nations. Specifically, this would authorize receiving in evidence and enforcing in the Stage B proceedings, against individual defendants not before the court in Stage A, any
ad judications made in the Stage A proceedings with respect
to the conspiracy.
(2) The conspiracy charges to be tried will be
of such historical importance that they should be heard before
a court established by a method resting upon the highest
sanction provided by the laws of the several interested nations.
Trial by such a tribunal would command maximum public support
and historical approval.
a. There might be concern lest the trial of these
offenses should be long drawn out and serve as a sounding
board for propaganda on the part of the defendants. This can
be avoided by careful research into the facts and clear, fair,
well prepared and skillful resentation of those facts before
the court.
-6 b. The negotiation and approval of the suggested
treaty might take a substantial period of time and consideration of the treaty by BONG ratifying bodies might bring
suggestions of undesirable reservations. This objection
would be largely obviated by restricting the treaty court
to a limited jurisdiction, as above suggested.
C. If publicity were given to the proposed prosecution, retaliations by the Axis on United Nations prisoners
of war and other persons in their custody might occur. This
can be avoided by deferring public announcement of the
negotiation of the treaty and its presentation for ratifica-
tion until all United Nations personnel in German custody are
safe. However, negotiations could now be undertaken on a
confidential basis, as, for example, through the European
Advisory Commission.
II. Military Courts created by Executive Agreement or
Military Arrangement. So far as the offenses to be tried are
violations of the laws and customs of war, it is probable that
international mixed military tribunals to try them could be
created either by executive agreement on a governmental level
or by action of military CO manders.
e recommend, however, since the conspiracy charges to
be tried will be of such historical importance and will involve
some novel applications of existent principles of law, that
the charges should be tried before a court established by a
method resting upon the highest sanction provided by the laws
of the several interested nations. Trial by such a tribunal
would command greater public support among the several United
Nations and would receive greater long-term approval. In
addition a treaty could make apt provision for trial procedures,
which, once ratified, would give them the unquestioned force
of law in this and other interested countries.
BRITISH VIEW
The British Government has indicated, in commenting on
a Draft Convention for a United Nations ar Crimes Court submitted to it by the United Nations ar Crimes Commission, that
it favors neither the treaty process nor the erection of any
international tribunal for the tital of war offenses, other
than perhaps mixed military courts.
-7 The ar Crimes Commission's proposal, however, is very
different from the one presented in this memorandum. For
one thing, the convention drafted by the ar Crimes Commission
would have involved an indefinite, long-term commitment on
the part of the contracting powers. It would have established
a court of indeterminate duration, sitting in several divisions,
for the trial of such war crimes as any of the several nations
for any reason did not care to try in their own courts. It made
no provision for dealing with conduct not violative of the laws
of war in the strict sense. In effect it provided an inter-
national tribunal to do work which should properly be rem tted
to national civil or military courts, and which under the plan
proposed herein, will be thus remitted.
Consequently, we do not regard the British objections to
the War Crimes Commission's Draft Convention as necessarily
precluding assent to the proposal now advanced.
RECOMMENDATION
We recommend that you approve the preparation and
negotiation of a treaty to create a court of the type and
having the limited jurisdiction described above.
OTHER ESTABLISHED PROCEDURES NOT FORECLOSED
The program which we have described is not intended to
foreclose other available procedures for dealing with particular offenses. Thus, for example, as already noted, atrocities
against our nationals by identifiable Axis individuals will
remain subject to trial by United States military and naval
commissions. The military and civilian tribunals of the other
United Nations will probably be employed to try other individual
crimes, under either international or local law. These procedures
present no new problems of policy, and are mentioned only for
the sake of completeness. They do not require further action
on your part at this time.
POSITION OF THE NAVY DEPARTMENT
The Navy Department has indicated that it has a direct
interest only in war crimes in the strict sense, such as are
mentioned in the preceding paragraph, and that it disclaims
interest in any war atrocities outside that field.
Secretary of State.
Secretary of War.
1/19/45
Honorable Jesse Jones
Secretary of Commerce
Washington, D. C.
Dear Jesse:
Thank you very much for your letter of December 21, stating
that $11,847,328.46 will be paid to the United Kingdom for Ceylon
rubber consigned to the Rubber Reserve Company before July 1, 1943.
We have noted your statement that the above amount includes
$2,848,731.87 as payment for 5,077.2 long tons of rubber on three
ships lost at sea due to enemy action in the latter part of 1942.
Since we understand that Rubber Reserve Company purchased Ceylon
rubber on an f.o.b. basis and has, therefore, contracted to pay
the agreed purchase price, whether or not the rubber is lost in
transit from the f.o.b. ocean vessel point, we believe this sum
should be paid, as well as the charges for rubber that arrived
in the United States.
Sincerely yours,
Henry Morgenthau, Jr., Chairman
Secretary of the Treasury
Edward R. Stettinius, Jr.
Secretary of State
Leo T. Crowley, Administrator
Foreign Economic Administration
Mr. Lehman C. Aarone
Office of the General Counsel.
Sir:
You are hereby appointed Assistant General
Counsel for the Department of the Treasury with
compensation at the rate of 89,000 per annum,
payable from the appropriation "Salaries, office
of the General Counsel", effective February 1, 1945.
Very truly yours,
Secretary of the Treasury
CVC
06
January 19, 1943.
Mr. William H. Taylor,
Division of Monetary Research.
Sir:
You are hereby promoted as Assistant Director of
Monetary Research from grade P-7 at $6,500 per annum
to grade P-8 at $8,000 per annum, payable from the
"Exchange Stabilization Fund" appropriation, to be
effective February 1, 1945.
Very truly yours,
Age
Secretary of the Treasury.
Presented in
person by
jo
67
Speech of Secretary Morgenthau at the meeting of
the Personnel Officers, January 19, 1945 at 11 am
passwry
I think that this meeting is a long time overdue. It is my fault
that it hasn't happened before, but as somebody said the other day, the
first twelve years are the hardest.
I have taken a great deal of interest in the work that you people
are doing as I hear about it through Mr. Charles Bell and his assistants
I really am interested in the 90 odd thousand employees of the Treasury.
One of the real regrets of my job is that I get 80 little opportunity
to meet many of you. At Farm Credit I always knew every employee and we
felt that we had sort of a family organization. But unfortunately it has
not been possible in the Treasury because it is 80 vast.
I have always felt that the success of the head of a department like
the Treasury is in the holding of the loyalty of the Civil Service
employees. That I have tried to do this has been proved by the fact that
I recommended Mr. Bell for Undersecretary and Mr. Harry White as an
Assistant. I fully appreciate the job that the Civil Service employees
have been doing during the war, the extra amount of time they have put in,
with very rare instances of any extra compensation. I also know that you
people have more than your share of taxes, in many cases there is almost
a hardship.
In the past I have always said that if any persons had complaints
they could come to see me. In rare instances they have.
Starting way back when I made an inspection of the Bureau of Engrav-
ing and Printing, I saw a place where the employees actually couldn't get
68
-2out. They had the perfect makings of a fire trap. I made a survey of
the other buildings to make sure the people could get out in case of
fire.
Now there are other needs; for an illustration - we have unsanitary
working conditions and we need rest rooms.
I have always said that where there was one woman working in any
Treasury building, there should be a Public Health Unit. The doctors and
nurses usually go home at 4:30 P. m. and leave the girls to work until
midnight. If they faint or get sick there is no one there to look after
them.
I stress particularly the fact that I would like everyone, from topside down, to feel that this isn't just a machine, that we are all human
beings. I sometimes think, if you don't mind my being a little critical,
that some of the Civil Service em loyees in important positions are a
little too hard boiled. In some instances I found cases where there
should have been a little more understanding. I hope these instances
become less and less. There is no reason for any of us to be hard boiled
about things. For instance, what are the circumstances of the home? What
consideration is given to such things? I think they should be examined to
see if there aren't some outside conditions that affect the case. I
remember the case once of a woman who stole. When they investigated, they
found out that she was going blind and needed money. I don't mean that
they shouldn't be taken care of when they steal but in cases like that I
would rather they would err on the side of being a little soft than too
tough.
- -3 -
We are constantly trying to improve the working conditions. For
instance, we have a fine cafeteria in this building. In this cafeteria
there is no race discrimination. I like to think that all through the
Treasury there is no race or creed discrimination I suppose that is
too much to hope for but it is a pinnacle to work for. My head is not
in the sand and I realize there are many obstacles. When I go down to
the Cafeteria, I like to see them all eating together.
I have read Mrs. Doyle's report on her swing around the country and
the various places she visited, and on the whole it seemed pretty good.
I think you people who hold your important jobs should remember that
all of us should try to improve the working conditions of the people who
spend their lives in the service of their government. We should make it
as comfortable as possible for them. We will all then be a happy family
of 90,000.
Recently, we asked the Appropriations Committee for money to give
cash awards for outstanding recommendations for improvements in the
Treasury. In the meantime we will give meritorious promotions whenever
they are brought to my attention. You may be interested to know that I
pass on every single draft deferment and I will also pass on the
meritorious promotions. All employees should be encouraged to give their
suggestions for better conditions but special encouragement should be
given to those of the lower incomes.
I am sorry that I have so little time to talk with you. There has
been steady improvement under Mr. Charles Bell but mistakes always will
be made. We have a big turnover due to the war. Let's continue to
improve.
69
70
- -4 -
I will take this opportunity of thanking you for the very fine
cooperation you people have given. I would like to meet with you again
and get suggestions from you concerning improvements of working conditions
among employees. I do want you fine people to come in again with
suggestions to make to me. Any rulings that come from the top that you
think are unfair, don't hesitate to tell me about it.
We are all human and make mistakes but we like to think that each
day we are getting a little better.
Thank you.
71
nM Jr discussed with the President 1/19/45
Typed by
State
January 18, 1944
MEMORANDUM FOR THE PRESIDENT
Subject: Proposed Legislative Program
There is urgent need for a comprehensive and
unified program for legislation in the foreign affairs
field. There is also urgent need for a small cabinet
committee to sift proposals and methods and to make
recommendations to you.
The central factor on the Hill will be the struggle
over the prerogatives of the Senate -- whether in any
given case action should be by treaty, legislation, or
executive agreement. Uncoordinated and unplanned action
may produce a major controversy which will defeat many
measures.
The following matters may come up at this Session:
Dumbarton Oaks proposals, after a United Nations
Conference.
Bretton Woods proposals.
Extension of, and further funds for, the ExportImport Bank.
Repeal of the Johnson Act and similar provisions
affecting the Export-Import Bank.
Extension of the Trade Agreements Act.
Anglo-American Petroleum Agreement.
St. Lawrence Seaway.
Food
-2Food and Agriculture Organization.
United Nations organization on education.
Civil Aviation Agreements.
Privileges and immunities for international
organizations.
We need a cabinet general staff to recommend
priority, timing, and a unified theory of constitutional
powers.
We recommend that:
1. The Secretaries of State and Treasury and the
Director of the Budget be authorized to constitute such
a committee with authority as the need arises to consult
with the heads of other interested agencies.
2. Introduction of St. Lawrence Seaway legislation
be postponed until the question of the form of the
legislation can be worked out, and the legislation be
not brought up until the whole program has been further
developed.
3. Since the United Nations Conference on the
Dumbarton Oaks proposals cannot meet before Spring and
complete a document for ratification until late April
or May, legislation on some of the listed matters should
be sought before then.
4. At the earliest possible date there should be
initiated the action necessary to adopt the Bretton Woods
proposals. A draft message to Congress on Bretton Woods
should be promptly submitted by the committee to you.
5. The proposed committee should give immediate
consideration to the time and method of initiating action
on the
-3on the Food and Agriculture Organization, the ExportImport Bank and other matters.
6. The Foreign Relations Committee should be
advised officially that the Dumbarton Oaks proposals
will be submitted to the Senate as a treaty.
7. The committee should proceed on the basis of
this general outline and make concrete recommendations
to you on a case-by-case basis.
If you approve the proposals made in this memorandum,
there is attached a draft of a letter-you might send to
the other departments and agencies concerned.
Secretary of State
Secretary of the Treasury
Director, Bureau of the Budget
Enclosure:
Draft of letter
75
DRAFT
:
Dear Mr.
I have appointed a committee to make plans and
recommendations concerning priority, timing, and manner
of submission for a legislative program in the foreign
affairs field. The committee consists of the Secre- tary of State, Chairman, the Secretary of the Treasury,
and the Director of the Bureau of the Budget, who have
been authorized as the need arises to consult with
the heads of other interested agencies.
I know that I may count on your full cooperation
with this committee in its work.
Very sincerely yours,
MEMORANDUM OR THE PRESIDENT
1. On January 8 Secretary Morgenthau discussed the
Bretton Woods legislation with Senator lagner, Con ressmen
Spence and Wolcott, Judge Vinson and Dean Acheson. Senator
Tobey was unable to attend but expressed his wish to
cooperate fully. It was agreed at this meeting that the
Bretton Woods legislation should be introduced as soon as
possible and that it would be most important for you to
send a special message to the Congress on Bretton Woods.
2. Since that date ongressman McCormack has called
Secretary Morgenthau urging that the Bretton Woods
Agreements be considered by Con ress at once.
3. We have jointly prepared the attached message to
Con ress on Bretton Woods lor your signature. It is our
hope that you will sign this message now and in your
absence (and the absence of Secretary Stettinius) authorise
Secretary Mor enthau to have the message transmitted to
Congress on a date to be agreed upon by im and the leaders
of the appropriate incressional Committees. This procedure
will allow the message to be timed with the actual
introduction of the legislation which is presently being
drafted.
4. If you approve this procedure it will be
appreciated if you will so indicate below.
signed/ Edward R. Stettinius, Jr.
Secretary of State
signed/ H. Morgenthau, Jr.
Secretary 01 the Treasury
APPROVED:
TO THE CONGRESS OF THE UNITED STATES:
In my Budget Message of January 9 I called attention
to the need for immediate action on the Bretton Woods proposale
for an International Monetary Fund and an International Bank
for Reconstruction and Development. It is my purpose in this
message to indicate the importance of these international
organizations in our plans for a peaceful and prosperous world.
As we dedicate our total efforts to the task of
winning this war we must never lose sight of the fact that
victory is not only an end in itself but, in a large sense,
victory offers us the means of achieving the goal of lasting
peace and a better way of life. Victory does not insure the
achievement of these larger goals-it merely offers us the
opportuni ty-the chance-to seek their attainment. Whether
we will have the courage and vision to avail ourselves of this
tremendous opportunitypurchased at so great a cost-is yet
to be determined. On our shoulders rests the heavy responsibility
for making this momentous decision. I have said before, and I
repeat agains This generation has a rendesvous with destiny.
If we are to measure up to the task of peace with the
same stature as we have measured up to the task of war, we must
see that the institutions of peace rest firmly on the solid
foundations of international political and economic cooperation.
The cornerstone for international political cooperation is the
Dumbarton Oaks proposal for a permanent United Nations. Inter-
national political relations will be friendly and constructive,
however, only if solutions are found to the difficult economic
problems we face today. The cornerstone for international
economic cooperation is the Bretton Foods proposal for an
International Monetary Fund and an International Bank for
Reconstruction and Development.
These proposals for an International Fund and
International Bank are concrete evidence that the economic
objectives of the United States agree with those of the
United Nations. They illustrate our unity of purpose and
interest in the economic field . What we need and what
they need correspond-expanded production, employment,
exchange and consumption-in other words, more goods produced,
more jobs, more trade, and a higher standard of living for us
all. To the people of the United States this means real
peacetime employment for those who will be r turning from
the war and for those at home whose wartime work has ended.
It also means orders and profits to our industries and fair
prices to our farmers. the shall need prosperous markets in
the world to ensure our own prosperity, and we shall need the
goods the world can sell us. For all these purposes, as well
as for a peace that will endure, we need the partnership of
the United Nations.
The first problem in time which we must cope with is
that of saving life, and getting resources and people back into
production. In many of the liberated countries economic life
has all but stopped. Transportation systems are in ruins and
therefore coal and raw materials cannot be brought to factories.
Many factories themselves are shattered, power plants anashed,
transmission systems broken, bridges blown up or bombed, porte
79
elogged with sunketh wrecks, and great rich areas of farm land
inundated by the sea. People are tired and sick and hungry.
But they are eager to go to work again, and to create again
with their own hands and under their own leaders the necessary
physical basis of their lives.
Emergency relief is under way behind the armies under
the authority of local Governments, backed up first by the allied
military command and after that by the United Nations Relief and
Rehabilitation Administration. Our participation in the UNRRA
has been approved by Congress. But neither UNRRA nor the armies
are designed for the construction or reconstruction of large
scale public works or factories or power plants or transportation
systems. That job must be done otherwise, and it must be started
soon.
The main job of restoration is not one of relief. It is
one of reconstruction which must largely be done by local people
and their Governments. They will provide the labor, the local
money, and most of the materials. The same is true for all the
many plans for the improvement of transportation, agriculture,
industry, and housing, that are essential to the development
of the economically backward areas of the world. But some of
the things required for all these projects, both of reconstruction
and development, will have to come from overreas. It is at this
point that our highly developed economy can play a role important
to the rest of the world and very profitable to the United States.
Inquiries for numerous materials, and for all kinds of equipment
and machinery in connection with such projecte are already being
directed to our industries, and many more will come. This business
will be welcome just as soon as the more urgent production for the
war itself ends.
SO
The main problem will be for these countries to
obtain the means of payment. In the long run we can be paid
for what - sell abroad chiefly in goods and services. But at
the moment many of the countries who want to be our customers
are prostrate. Other countries have devoted their economies so
completely to the war that they do not have the resources for
reconstruction and development. Unless a means of financing is
found, such countries will be unable to restore their economies
and, in desperation, will be forced to carry forward and intensify
existing systems of discriminatory trade practices, restrictive
exchange controls, competitive depreciation of currencies and other
forms of economic warfare. That would destroy all our good hopes.
No must move promptly to prevent its happening, and we must move
on several fronts, including finance and trade.
The United States should act promptly upon the plan for
the International Bank, which will make or guarantee sound loans
for the foreign currency requirements of important reconstruction
and development projects in member countries. One of its most
important functions will be to facilitate and make secure wide
private participation in such loans. The Articles of Agreement
constituting the charter of the Bank have been worked out with
great care by an international conference of experts and give
adequate protection to all interests. I recommend to the Congress
that we accept the plan, subscribe the capital allotted to us, and
participate wholeheartedly in the Bank's work.
This measure, with others I shall later suggest, should
go far to take care of our part of the lending requirements of the
post-wer years. They should help the countries concerned to get
production started, to get over the first crisis of disorganization
050
and fear, to begin the work of reconstruction and development
and they should help our farmers and our industries to get over
the orisis of reconversion by making a large volume of export
business possible in the post-war years. As confidence returns
private investors will participate more and more in foreign lending
and investment without any Government assistance. But to get over
the first crisis, in the situation that confronts us, loans and
guarantees by agencies of Government will be essential.
We all know, however, that a prosperous world economy
must be built on more than foreign investment. Exchange rates
must be stabilised, and the channels of trade opened up throughout
the world. A large foreign trade after victory will generate production and therefore wealth. It will also make possible the
servicing of foreign investments.
Almost no one in the modern world produces what he eats
and wears and lives in. It is only by the division of labor among
people and among geographic areas with all their varied resources,
and by the increased all-around production which specialisation
makes possible, that any modern country can sustain its present
population. It is through exchange and trade that efficient production in large units because possible. To expand the trading
circle, to make it richer, more competitive, more varied, is a
fundamental contribution to everybody's wealth and welfare.
It is time for the United States to take the lead in
establishing the principle of economic cooperation as the foundation
for expanded world trade. We propose to do this, not by setting up
a super-government, but by international negotiation and agreement,
directed to the improvement of the monetary institutions of the world
-6and of the laws that govern trade. We have done a good deal in
those directionsin the last ten years under the Trade Agreements
Act of 1934 and through the stabilisation fund operated by our
Treasury. But our present enemies were powerful in those years
too, and they devoted all their efforts not to international
collaboration, but to autarchy and economic warfare. When
victory is won we must be ready to go forward rapidly on a wide
front. We all know very well that this will be a long and
complicated business.
A good start has been made. The United Nations Monetary
Conference at Bretton floods has taken a long step forward on a
matter of great practical importance to us all. The Conference
submitted a plan to create an International Monetary Fund which
will put an end to monetary chace. The Fund is a financial
institution to preserve stability and order in the exchange rates
between different moneys. It does not create a single money for
the world, neither we nor anyone else is ready to do that. There
will still be a different money in each country, but with the Fund
in operation the value of each currency in international trade will
remain comparatively stable. Changes in the value of foreign currencies will be made only after careful consideration by the Fund of
the factors involved. Furthermore, and equally important, the Fund
Agreement establishes a code of agreed principles for the conduct
of exchange and currency affairs. In a nutshell, the Fund Agreement
spells the difference between a world caught again in the malestron
of panic and economic warfare eulminating in war in the 1930'or a world in which the members strive for a better life through
actual trust, cooperation and assistance. The choice is ours.
83
-7I therefore recommend prompt action by the Congress to
provide the subscription of the United States to the International
Monetary Fund, and the legislation necessary for our membership in
the Fund.
The International Fund and Bank together represent one
of the most sound and useful proposals for international collaboration
now before us. On the other hand, I do not wass to leave with you
the impression that these proposals for the Fund and Bank are perfect
in every detail. It may well be that the experience of future years
will show us how they can be improved. I do wish to make it clear,
however, that these Articles of Agreement are the product of the
best minds that 44 nations could suster. These men, who represented
nations from all parts of the globe, nations in all stages of
economic development, nations with different political and economic
philosophies, have reached an accord which is presented to you for
your consideration and approval. It would be a tragedy if differences
of opinion on minor details should lead us to sacrifice the basic
agreement achieved on the major problems.
Nor do I want to leave with you the impression that the
Fund and the Bank are all that we will need to solve the economic
problems which will face the United Nations when the war is over.
There are other problems which We will be called upon to solve.
It is my expectation that other proposals will shortly be ready
to submit to you for your consideration. These will include the
establishment of the Food and Agriculture Organization of the United
Nations, broadening and strengthening of the Trade Agreements Act
of 1934, international agreement for the reduction of trade barriers,
84
the control of cartels and the orderly marketing of world
surpluses of certain commodities, a revision of the Export=
Import Bank, and an international oil agreement, as well as
proposals in the field of civil aviation, shipping and radio
and wire communication a. It will also be necessary, of course,
to repeal the Johnson Act.
In this message I have recommended for your consideration
the immediate adoption of the Bretton Woods Agreements and suggested
other measures which will have to be dealt with in the near future.
They are all parts of a consistent whole. That whole is our hope
for a secure and fruitful world, a world in which plain people in
all countries can work at tasks which they do well, exchange in
peace the products of their labor, and work out their several
destinies in security and peace; a world in which governments,
as their major contribution to the common welfare are highly and
effectively resolved to work together in practical affairs, and to
guide all their actions by the knowledge that any policy or act that
has effects abroad must be considered in the light of those effects.
The point in history at which we stand is full of promise
and of danger. The world will either move toward unity and widely
shared prosperity or it will move apart into necessarily competing
economic blocs. We have a chance, we citisens of the United States,
to use our influence in favor of a more united and cooperating world.
Whether we do so will determine, as far as it is in our power, the
kind of lives our grandchildren can live.
THE WHITE HOUSE,
85
EXECUTIVE ORDER
ESTABLISHING A FOREIGN ECONOMIC POLICY BOARD
By virtue of the authority vested in me, as President
of the United States, by the Constitution and statutes of
the United States, and in order to provide for the more
effective coordination of the functions and activities of
the Government in relation to foreign economic problems, it
is hereby ordered as follows:
1. There is hereby established the Foreign conomic
Policy Board bereinafter referred to as the Board).
The Board shall consist of the Secretary of state,
the Secretary of the Treasury, the Secretary of
Commerce and the Secretary of the Interior. The
Secretary of State shall be Chairman of the Board.
The Chairman of the Board shall request the heads
of other agencies and departments to be represented
in the Board's deliberations whenever matters
specially affecting such agencies or departments
are under consideration.
2. It shall be the function of the Board, acting
subject to the direction and control of the
President,
(a) To develop unified programs and to establish
policies with respect to the economic
relationships between this Government and
foreign governments.
86
-2(b) To arrange for the unification and
coordination of the activities of this
Government relating to foreign economic affairs.
(o) To report to the President at frequent intervals
concerning its activities and to make such
recomcndations to him as the Board may deem
appropriate.
All action of the Board shall be in conformity with
the foreign policy of the United States as determined
by the Secretary of State.
3. It shall be the duty of all agencies and departments
to supply or obtain for the Board such information
and to extend to the Board such assistance and
facilities as the Board may require in carrying out
the provisions of this order. Nothing contained in
this order shall remove the responsibility or
authority of each executive department or agency for
carrying out its OMN functions and operations but
such functions and operations shall be carried out
in accordance with the foreign economic policies
formulated by the Board.
4. All prior executive orders and instructions insofar
as they are in conflict herewith are amended
accordingly.
THE WHITE HOUSE
Franklin D. Roosevelt
March 1, 1945
MEMORANDUM SETTING UP COMMITTEE FOR
LEGISLATIVE PROGRAM
Approved by the President Jan. 19th, 1945
THE SECRETARY OF STATE
WASHINGTON
January 18, 1945
MEMORANDUM FOR THE PRESIDENT
Subject: Proposed Legislative Program
There is urgent need for a comprehensive and
unified program for legislation in the foreign affairs
field. There is also urgent need for a small cabinet
committee to sift proposals and methods and to make
recommendations to you.
The central factor on the Hill will be the struggle
over the prerogatives of the Senate -- whether in any
given case action should be by treaty, legislation, or
executive agreement. Uncoordinated and unplanned action
may produce a major controversy which will defeat many
measures.
The following matters may come up at this Session:
Dumbarton Oaks proposals, after a United Nations
Conference.
Bretton Woods proposals.
Extension of, and further funds for, the ExportImport Bank.
Repeal of the Johnson Act and similar provisions
affecting the Export-Import Bank.
Extension of the Trade Agreements Act.
Anglo-American Petroleum Agreement.
St. Lawrence Seaway.
Food
-2Food and Agriculture Organization.
United Nations organization on education.
Civil Aviation Agreements.
Privileges and immunities for international
organizations.
We need a cabinet general staff t recommend
priority, timing, and a unified theory of constitutional
powers.
We recommend that:
1. The Secretaries of State and Treasury and the
Director of the Budget be authorized to constitute such
a committee with authority as the need arises to consult
with the heads of other interested agencies.
2. Introduction of St. Lawrence Seaway legislation
be postponed until the question of the form of the
legislation can be worked out, and the legislation be
not brought up until the whole program has been further
developed.
3. Since the United Nations Conference on the
Dumbarton Oaks proposals cannot meet before Spring and
complete a document for ratification until late April
or May, legislation on some of the listed matters should
be sought before then.
4. At the earliest possible date there should be
initiated the action necessary to adopt the Bretton Woods
proposals. A draft message to Congress on Bretton Woods
should be promptly submitted by the committee to you.
5. The proposed committee should give immediate
consideration to the time and method of initiating action
on the
- -3- -
on the Food and Agriculture Organization, the Export-
Import Bank and other matters.
6. The Foreign Relations Committee should be
advised officially that the Dumbarton Oaks proposals
will be submitted to the Senate as a treaty.
7. The committee should proceed on the basis of
this general outline and make concrete recommendations
to you on a case-by-case basis.
If you approve the proposals made in this memorandum,
there is attached a draft of a letter you might send to
the other departments and agencies concerned.
Secretary of State
Secretary of the Treasury
Director, / Bareau of the Budget
Enclosure:
Draft of letter
O.K. htteld Villace
7th
DRAFT
:
Dear Mr.
I have appointed a committee to make plans and
recommendations concerning priority, timing, and manner
of submission for a legislative program in the foreign
affairs field. The committee consists of the Secretary of State, Chairman, the Secretary of the Treasury,
and the Director of the Bureau of the Budget, who have
been authorized as the need arises to consult with
the heads of other interested agencies.
I know that I may count on your full cooperation
with this committee in its work.
Very sincerely yours,
Pages 92-94 given to
Mrs. McHugh June 8, 1945.
Not returned.
Foreign Economic Policy Board: Executive Order
January 19, 1945
I Book 813
I
p. 15 + 16
For. Econ.
Policy Bd. - Exec. Order
1.19.45
Book 811 92-94
I pp.
It Preacher 68.45
I
MEMORANDUM FOR THE FILES
Meeting in Mr. Dunn's Office of the State Department
Regarding Post-War Treatment of Germany, January
19, 1945
Present: State Department: Mr. James C. Dunn, Mr. Will Clayton,
Dr. Freeman Matthews, Mr. Emil
Dupres, Mr. Leverich
Treasury Department:
Mr. H.D. White, Mr. A.F. Luxford,
Mr. J.E. DaBois, Mr. H. Glasser,
Mr. W.H. Taylor
The meeting had been arranged to allow for a fuller examination of the
Treasury position in respect to the post-war treatment of Germany. The
attached memorandum was circulated by Mr. white and was read aloud at the
meeting.
Mr. Dunn, in commenting on the memorandum, said that the American
Government was now in the process of formulating a program for the post-
war treatment of Germany to be submitted through the E.A.C. to the Allied
Governments, and that he thought the Treasury memorandum was inappropriate
in this regard because it contained so many negatives. He said that the
U. S. Government program to be submitted through the E.A.C. would be a
positive program. In this regard, he felt that any such statement as
that referred to in 1 (b) of the Treasury memorandum was entirely out of
place. He added that as far as he knew, no one had ever thought of building up Germany as a bulwark against Russia and Communism. He wondered
where the Treasury had received such an impression and added that the nega-
tion of such an attitude was "axiomatic" to any discussion on post-war
Germany. He urged, therefore, that it be deleted from the memorandum.
Mr. white explained that the Treasury memorandum was not intended to
be a document that would be put forward by the American Government as a
statement of its policy, but was purely intended as a basis for discussion
amongst ourselves in respect to Germany, and that the particular section
referred to by Mr. Dunn had been included for the purpose of clarity.
Mr. Dunn reiterated that he did not think the section was necessary,
inasmuch as no one, to his knowledge, held views to the contrary.
Mr. hite said that he was glad to know that that was the view of the
State Department, inasmuch as we had deduced from conversations with State
36
-2- Department officials in the past that the view might not be quite as prevalent
or consistently held as L.r. Dunn's assurances would indicate.
Mr. Clayton said that he was in substantial agreement with the Treasury
views as expressed in the memorandum, but that in thinking through the problems
that we would be confronted with in Germany, he had been wondering why it might
not be desirable to formulate a policy for the internationalization of the Ruhr
area, thereby maintaining its industrial equipment intact, rather than entering
upon a program of industrial destruction. The internationalizatic of the Ruhr
would allow not only for the retention of the Ruhr industries, but also for
their rebuilding. The Ruhr's productive capacity would be sorely needed in
post-war Europe. Such a program of internationalization would also insure
that the Allied Nations would be able to retain control over the industry
located within the Ruhr and prevent it from being used for future aggressive
moves on the part of Germany. Mr. Clayton added that such a program, in his
mind, also had another desirable feature. It would tend to prevent the growth
of a competitive iron and steel industry within Germany inasmuch as many of
the products from this area would continue to be marketed within Germany.
Mr. White stated that he fully appreciated the point of view expressed
by Mr. Clayton and that in the discussions within the Treasury, we had also
considered the desirability of internationalizing the Ruhr. If the Ruhr were
de-industrialized and made primarily an agrarian state cavable of supporting,
say, 3 million people instead of its present 14 million, then internationalisa-
tion would present no great problem. If, however, the Ruhr were to be internationalized and its industries to be maintained and encouraged, the questions
that would arise in relation thereto were enormous and would probably lead to
the defeat of the objective of keeping this area from again becoming a source
of potential industrial and military strength for Germany. If the industries
of the Ruhr are maintained such questions as what is to be done with the indus-
trial output of the area, where it is to be marketed, under what terms, prices
and conditions, must ever be questions of considerable conflict between the
international participants in the management of the Ruhr. If the industrial
products of the Ruhr were to be marketed in Belgium, Holland and France, those
countries would invariably assert that the low prices of the Ruhr were based
upon the low wage policy being pursued in that area or, for other reasons, were
due to some particular maladministration or undesirable attribute of the international governing body. Under these circumstances, an internationalized Ruhr
could only be a cause of continuous bickering and difficulties between the
international partners. The time would come -- maybe 10 years hence, maybe 20
years hence - when the managers would say, in effect: "Let us get rid of
these headaches by returning the Ruhr to Germany." At the same time, Germany
would be agitating constantly and by every device at her command, that the
internationalization of an industrialized Ruhr was a grave injustice to Germany
and something that could only be rectified by its return to the Reich.
-3We cannot depend, argued Mr. White, upon a continued feeling of
unanimity of view and intent amongst the United Nations in respect to
the imposition of international controls upon a defeated Germany over
a long period into the future.
Mr. Clayton said that he recognized the force of these arguments
and that the difficulty of maintaining an international regime in the
Ruhr had also troubled him. He could well see where differences between
the governing partners might well lead to the return of the area to Ger-
many within a generation. He asked if, in the event it was difficult to
foresee a continued international regime in the Ruhr, what would prevent
Germany in any event from rebuilding the industry of the Ruhr again in
the future, when our controls were relaxed.
Mr. mite replied that he also questioned the possibility of maintaining controls indefinitely into the future and that the issue was not one
of subjugating Germany for all time, out rather of gaining the advantage
of time for our side. The de-industrialization of the Ruhr would have two
fundamental advantages: it would tend to set a pattern towards agrarianism
in Germany and there could be no doubt but that the German people with their
technical and managerial aptitudes could go a long way towards improving
the efficiency and productivity of agriculture; furthermore, it would tend
to gain for the Allies a breathing spell of say, 10; 15, 20 years. During
that period and also at the end of that time, we might wish to re-evaluate
the situation. If the Allies were convinced that Germany was still a
menace to the peace and security of the world, we might wish to devise other
controls to keep her within bounds. If, on the other hand, we were convinced
that a real democratic trend had set in within Germany, we might not wish
for & continuance of controls.
Mr. white pointed out that if we were really to do anything about the
German picture, it would have to be done within a comparatively short period
following the defeat of Cermany, for the longer we put off making a decision,
the harder it would be to take adequately drastic measures.
Mr. Dupres said that he could not agree with Mr. White that the truncation of Germany would not be more effective than other forms of control. He
said that the cessation of territory from a defeated nation was, after all,
the most drastic measure that one could take and had generally been found to
be the most successful. Nor could he agree with what he considered to be Mr.
White's view that the de-industrialization of the Ruhr was essential because
of the probability of the failure of other fonas of control.
Mr. white said that the Treasury had no desire to debate the question of
territorial truncation as long as the ceding of territories had some basis
in reality. He said that we in the Treasury had assumed that certain German
08
4-
territories would be ceded; for example, the territorial frontier of
Czechoslovakia might be changed in order to adjust certain population
difficulties; that part of East Prussia and Silesia would probably go
to Poland; that some small portion of German territory might possibly
go to Holland in accord with a reservation entered by the Dutch if their
territory were to be flooded. Most of these territorial changes, however,
were ones that were to occur in the Eastern part of Germany and it did not
sean that this was a problem which concerned us particularly at this time.
As far as the Treasury knew, no decisions have been taken in respect
to the ceding to other nations of large sections of German territory in
the west, with the possible exception of the return of the Saar to France.
In respect to the Ruhr, it must always be borne in mind that if the Ruhr
or a substantial part thereof were to be joined to France, Belgium or
Holland, it might create a national minority problem which would raise the
question of the wisdom of the transfer at a later point. The State Department representatives said that no decision had yet been taken in respect
to the territorial cession of the Ruhr to any foreign power, and Lr. White
replied that inasmuch as that was the case, he thought it well that we
should proceed with the discussion of what was to happen in that area.
Regarding the desirability of controls other than de-industriali zation,
Mr. White pointed out that there was nothing in the memorandum or in his
remarks that could be considered as advocating the absence of or futility
of other controls. He said that everyone recognized that controls other
than de-industrialization were essential. The question was one of how far
these controls should be carried. The Treasury felt that strong controls
should be exercised over exports, imports, foreign exchange, capital movements and other such vital features of Germany's economy. Mr. white did not
feel that we should go in for controls which were incapable of being adequately or successfully enforced. Another aspect of controls was how long
they can be successfully applied and there was some skepticism, based upon
past experience, whether it would be possible to maintain such controls over
any extended period into the future.
Mr. Dupres stated as another objection to the Treasury proposal, that
even if Germany were to be deprived of her metallurgical, chemical and
electrical industries, this would still leave Germany with a great many industries and with a very strong agriculture. At this point, Mr. Dupres was
asked if he would care to suggest additions to the lists of industries of
which Germany should be deprived, and he retorted that he certainly would
not; that such was not his intention.
After some further discussion, it was decided that State and Treasury
representatives should pursue the subject matter of de-industrialization of
Germany further. Mr. Dunn suggested that Mr. Dupres should call a meeting of
State and Treasury with some of the FEA people who had been working on parti-
cular industrial surveys of German industry.
W. H. Taylor
99
January 19, 1945
MEMORANDUM
Re: Long Range Program for Germany
1. The single objective of any long range program towards Germany is
that of doing all that we can now to prevent Germany from starting a third
World War in the next generation. To accomplish this objective, the following
principles are clear:
(a) Germany must be rendered weak politically, militarily
and economically and must be kept weak for many years to come.
(b) Any program which has as its purpose the building up of
Germany as a bulwark against Russia and communism will inevitably
lead to a third World War.
(c) It is impossible to devise a program for Germany today
which will guarantee peace in the years to come. We can not expect
to find a panacea. There are certain minimum steps which we must
take now. Developments in the next five or ten years may require
that we take additional steps at that time. So long as the German
people retain the will to wage war, we must be ever vigilant to see
to it that they do not obtain the means to exercise this will.
(d) Since the stakes are so high, our goal must be that of
seeing how far we can go in making certain that Germany is unable
to embark upon another war rather than trying to find a minimum
program which would convince most people that we had solved the
problem.
2. There are many essential facets to a long range program for Germany.
Without intending at all to exclude from consideration the other essential
elements of the program, it is desired at this time to emphasize the impor-
tance of dealing effectively with German heavy industry because industry
represents an indispensable means by which Genuany can exercise her will to
wage war again. Although political, military and economic controls over
Germany in the post-war period are essential, they afford no reasonable
assurance that a strong industrial Germany could not within twenty to thirty
years again plunge the world into war. In order to make reasonably sure
that we have deprived Germany of the ability to make war again within the
next generation, it is absolutely essential that she be deprived of her
chemical, metallurgical and electrical industries. Although this does not
mean that other measures are unnecessary, the elimination of heavy industry
is one of the essential steps we must take now.
100
2
At the same time that German heavy industry is eliminated in
Germany every effort should be made to build up heavy industry in the
liberated countries surrounding Germany. The industrial equipment
moved from Germany as well as the resources in the Rhine and Ruhr
areas could make a real contribution toward such a program. In this
way the whole balance of industrial power in Europe will be shifted
so that Germany will no longer be the dominating power in Europe.
3. After careful study, we completely reject the following propositions:
(a) The fallacy that Europe needs a strong industrial
Germany.
(b) The contention that recurring reparations (which
would require immediate reconstruction of the German economy)
are necessary so that Genmany may be made to pay for the destruction she has caused.
(c) The belief that the removal or destruction of all
German war materials and the Genman arnament industry would in
itself prevent Germany from waging another war.
(d) The illogical assumption that a "soft" peace would
facilitate the growth of democracy in Germany.
(e) The fallacy that making Germany a predominantly agri- -
cultural country, with light industries but no heavy industries,
would mean starving Germans.
January 19, 1945.
Dear Deac:
This is the substance of what I was telling you
at lunch yesterday.
I think the Treasury in recent years has gone a
long way in democratising public finance. We have
broadened the tax base, as the saying goes, by greatly
increasing the number of taxpayers. We had around
a million and three quarters of individual income taxpayers in 1933, four million in 1939, and seven and one-
half million in 1940. We estimate more than fifty
million for this year. The Treasury had net receipts
from all sources in 1933 of just about an even two
billions, which by 1940 had climbed to $5,387,000,000.
For last year the figure was $44,149,000,000. This
was 47 per cent of our total expenditures.
As to Government bonds the story is a good deal
the same. You will remember that in March, 1935, we
launched the United States Savings Bonds, or "Baby
Bonds. I stated very definitely at the time that my
purpose was to increase the number of people who would
have a direct interest in Government finance by inducing
a great many people in moderate circumstances to buy
United States bonds. By the end of June, 1941, we had
made what I thought pretty good progress in that direction.
We had put out about six billion face value of the Savings
Bonds and had around two million owners. This seemed to
us a rather good record for six years' work in peacetime.
By that time people were becoming acquainted with a type
of security which a few months later became the War
Savings Bond. In the month of Pearl Harbor we really
went to town, with sales exceeding a billion dollars.
Now we have approximately eighty-five million owners of
-2War Savings Bonds, with a total outstanding of forty
billions present value. I think that eighty-five million
bond holders is really popularizing the wartime debt.
I believe that's the story. If you want me to
supplement it in any way, let me know.
With personal regards,
Sincerely,
(Signed) Henry
Mr. George B. Parker
Scripps-Howard - Newspapers
Daily News Building
1013 - 13th Street, N.W.
Washington, D.C.
HEG/mah
you
THE KIPLINGER TAX LETTER
WRITTEN PRIVATELY FOR CLIENTS
THE KIPLINGER WASHINGTON AGENCY
NATIONAL PRESS BLDG. WASHINGTON 4. D.C.
Dear Sir:
Washington, Tuesday, Jan. 9, 1945.
This will be a year of confusion in the planning of future taxes
and tax policies. There will be a flood of tax proposals in Congress,
and taken altogether they will not make sense. That is, some officials
will argue for delaying ALL actual consideration of tax proposals
until the German war is over. Others will argue for doing something now,
before the German end, applicable after the German end, so that people
will know what to expect, and how to plan their business operations.
All this babble is bound to be confusing and irritating, and doubtless
there will be many times when you will want to shut your ears to it all.
But don't do it, for out of this year's talk will grow the new tax laws
for this year and for postwar period.
Note that the President ducks mention of taxes almost entirely
in his 1946 Budget Message sent to Congress today. What he does say
is in vague, loose, broad, general language, with little meaning.
"There is no justification for tax reductions as long as
we are engaged in a major war," says the President.
And then he adds: "When a favorable development of the war
allows a major decline in war expenditures, minor tax adjustments
will become possible and desirable" minor adjustments.
President ties in tax revision with the employment problem
which U.S. will face, postwar and this has vital implications:
"We must overhaul the wartime tax structure to stimulate
consumers' demand and to promote business investment."
This is a plug for incentive tax viewpoint, say some officials.
Administration will drag out incentive taxes for postwar tax use.
Some fancy tax thinking is reported to be going on in gov't
along lines, for example, of tying future corporation income tax cuts
to rate of employment postwar relative rate between the postwar year
and some prewar base period year.
Don't be stampeded in your tax thinking by such suggestions.
This administration has brought forward "extreme" tax proposals before,
and most have fallen by the wayside.
Bickering between officials on tax matters has broken out again,
and this is getting administration off on the wrong foot with Congress.
This time it is Morgenthau taking a crack at Byrnes.
In a well run gov't, Byrnes would have checked with the Treasury,
at least have told tax officials what he intended to say.
In a well run gov't, the Secretary of the Treasury wouldn't have
blurted out in an ill-tempered manner as Morgenthau did.
Tax outcome isn't affected much by such squabbling, however.
Tax cuts will NOT be put off until 1947, as recently commented
by some officials in gov't.
Slightly lower taxes this year have better than 50-50 chance.
COPYRIGHT 1945, THE KIPLINGER WASHINGTON AGENCY. INC
Byrnes' three suggested tax amendments have been well received
in both the House and Senate. Most congressmen just can't understand
why Morgenthau acted so as to cast doubt on soundness of Byrnes' ideas.
They say that, more than anything else, "Morgenthau's dignity was hurt.
Enactment immediately after German war end that's the course
recommended by Byrnes in his report so as to remove "tax impediments
to reconversion and business expansion.
But Congress may vote changes BEFORE the end of the German war
in order to have them ready to OPERATE immediately after the German end.
At least Congress will do much of the preliminary work on these ideas
well ahead of the German war end. It's during this period that business
will be called on to give its opinions. So you shouldn't wait until law
is on the books before knowing what these issues are all about.
Accelerated depreciation is one proposal offered by Byrnes.
He stresses that the present gov't policy to depreciate on the basis
of the physical life of the property "has a tendency to discourage
the acquisition of new equipment and the formation of new enterprises.
This would be an optional plan, not a substitute for treatment
under the existing depreciation provisions. Business would have choice
of taking depreciation based on life expectancy or taking larger amount
in the earlier years. This "larger amount" would be limited to perhaps
one-third of the full cost.
Note this point: Byrnes suggests that this special allowance
might be further limited so that it could be used only in computing
the regular income taxes, NOT to be used to lessen excess profits tax.
Treasury isn't "sold" on this plan, believes it won't act Hove
the objectives set out for it. But Treasury won't oppose enactment
and it wouldn't change the prospects much even if the Treasury did.
Higher specific exemption for excess profits tax will be voted.
Byrnes suggests that the present $10,000 be increased to $25,000.
There is sentiment among some members of the tax committees
that the $25,000 is still not high enough. Main purpose of change
is to help small businesses, and these members say that the amount
should be perhaps as high as $50,000 to really do any good.
Businesses may count on change to at least the $25,000 figure,
with an even chance that it may be more.
Postwar profits tax refund bonds will be cashable sooner,
at least some portion of them, if Byrnes' third suggestion is voted,
and chances are it will be. He urges that some of these refund bonds
be cashable immediately after German war end.
Under present law, these bonds become negotiable at the end
the
war the Jap war and become progressively redeemable by series
on varying dates after the end of the war.
To permit their redemption earlier would ease the financing
of many businesses, especially some of the smaller lines.
Some limitation will be put on the amount. Don't know how much.
of
WHEN will these changes apply? No flat answer. Prospects depend
on course of German war. But we think, after weighing all the factors,
that they are likely to apply to THIS year, 1945.
3
Last chance to revise your 1944 estimated tax is close at hand,
if such a step is necessary to avoid the penalty for underestimating.
The deadline for filing an amended estimate for 1944 is Jan. 15.
If you have any doubt at all as to whether you may be penalized,
the safest thing to do is to make a last-minute check of your estimate
before the deadline on Jan. 15.
Here are the tests which will tell you what you should do:
If amount of your estimated tax is less than 80% of actual tax,
you will be subject to the penalty unless
(1) You file an amended return revising the estimate upward
so as to have the corrected estimate within the 20% error permitted.
(2) Your estimated INCOME for 1944 is at least equal to 1943,
in which case the penalty will not apply even though you make an error
Or
of more than 20% in your estimated tax. In this case, you need not file
an amended estimated tax return.
Note also that Jan. 15 is date for making 4th-quarter payment
on your 1944 estimated tax, if you haven't paid it yet.
You do NOT have to file estimated tax for 1945 on Jan. 15,
as many individuals seem to believe.
1945 tax estimate is to be filed by March 15, and procedure
will be about the same as it was last year. (We will discuss details
in our later Tax Letters.)
One point not to be overlooked is this: New tax withholding
which got under way on Jan. 1 will withhold more income tax during 1945
than was withheld during 1944. Roughly, a higher percentage is applied,
and withholding goes a little farther up the scale.
So be sure that you estimate properly the amount of income tax
your employer will withhold during 1945, for this has a direct bearing
on the amount of tax you will pay quarterly over and above the amount
that is withheld by the employer.
Soon you will get a bill for balance of the unforgiven tax.
Many individuals are still trying to find some mention of this
on the FINAL income tax return for 1944. It isn't there.
Revenue Bureau officials felt it was simpler to bill separately
for this unpaid balance than to try to work it in on 1944 tax return.
Payment deadline is March 15 same as for final 1944 tax return
and the first quarter payment of the 1945 estimated tax.
Note to employers: 1944 tax-withholding receipts must be given
to your employes no later than Jan. 31. Bureau officials still emphasize
that extra-special care should be exerted in making out these receipts.
Be sure you give each employe TWO copies of withholding receipt.
for many employes will want to use one of them as final 1944 tax return.
This will be the first year you will have to give worker TWO copies.
The triplicate will be sent to Revenue Bureau by the employer,
along with his last-quarter tax-withholding return, Jan. 31.
If you have a large quantity of these tax-withholding receipts
you may forward them in a separate package to your revenue collector.
This package should include the reconciliation form (W-3), and this form
must be accompanied by a list of the amounts shown on the receipts
preferably a list in the form of adding machine tape.
Keep an eye on these men as tax policies and details unfold here,
for they will take part in the formulation of both.
These are not the only men, of course, who will come to forefront
of the Washington tax picture, but they are the key men within Congress
and the administration who will be most quoted publicly.
These are the men with whom many businessmen will be dealing
during the drafting of the new tax laws this year.
First, the men in Congress, for, after all, they vote the laws:
Robert Doughton will again be Ways and Means Committee chairman.
He will guide the tax bills in the first stage, for it is his Committee
which must initiate all tax bills. Basically he will be conservative.
He squirms when "extreme" tax proposals are handed his Committee.
Jere Cooper will carry the ball for the administration again,
but probably with little success no greater than before.
Harold Knutson will be an influence as the ranking Republican.
He has a grasp of tax principles, will seek and take advice on details.
Frank Carlson will come more to fore in tax matters.
Walter George will again head up Senate Finance Committee,
and he, too, will be conservative in his approach to tax changes.
Taft and Vandenberg are strongest Republicans on Senate side.
Between them they will lead the Republicans on Finance Committee.
Colin Stam, head of Joint Committee staff, will be more weighty
in the coming tax revision than in past, mainly because Congress intends
to do what it wants, will be less-than-ever swayed by the Treasury.
The men in the administration whose statements you should weigh:
Morgenthau, as Secretary of the Treasury, can not be ignored,
even though members of House and Senate Committees would like to do it.
He will be an influence on the administration's tax policy, of course.
Roy Blough and Joseph O'Connell, Jr., will be the key tax men
for the Treasury, will present plans to and work with Congress.
There is some opinion that Treasury will have to bring in
a "big name" tax man, but there are no signs that this will be done.
Byrnes will continue to have a say on taxes, and the truth is
that he will come closer to getting what he wants than will Morgenthau.
Changes in congressional tax committees also are significant
Ways and Means will get one new Democrat, two new Republicans.
Clinton Anderson (N. Mex.) is the new Democrat who is succeeding
Wes Disney (0kla.), who resigned to run for the Senate and was defeated.
Anderson is said by his colleagues to be pro New Deal.
Two new Republicans haven't been named yet, but leaders say
they will be "along conservative lines."
Senate Finance will get one new Democrat & two new Republicans.
New Republicans are Harlan Bushfield (S.D.) and Albert Hawkes (N.J.).
The Democrat has not yet been chosen.
One of the busiest tax years ever is ahead, and these men
will have much to say about your future taxes business and personal.
Yours very truly,
Jan. 9, 1945.
N.D.
THE KIPLINGER RGGON AGENCY
MATERIAL 16 PROTECTED BY COPYRIGHT AND is NOT TO BE DUPLICATED IN WHOLE OR IN PART IN ANY FORM WHATSORVER.
63721
JAN 19 1945
Dear Hiennori
I am enclosing a short memorandus dealing with the
question of the relationship of Treasury borrowing to
the banking system, which was raised in a letter, dated
January 3. 1945. written to you by Mr. L. C. Christian
of Houston, Texas, which Miss Thompson sent to me on
January 11.
As is indicated in the first paragraph of the
memorandum, this subject is highly controversial. I
believe, however, that the material in the memorandum
will furnish an adequate reply to Mr. Christian.
Affectionately.
(Signed) Henry
Mrs. Kleanor Roosevelt
The White House
Washington, D. G.
Enclosure
APLT:hr 1/18/45
The question which Mr. Christina Foises involves many complex
theoretical points, and is the subject of widespread controversy
among experts. The whole problem is of much scope that 11 could
not be treated adequately in a letter. However. certain matters
of fact are pertinent to the question and may be of value in replying to Mr. Christian.
During the five years ended December 31, 1944, net borrowing
by the Federal Government, by the issuence of interest-bearing
securities which are either direct obligations of the United States
or guaranteed by the United States, amounted to about 8183 billions.
of this amount, about 362 billions were absorbed by commercial banks
and #16 billions by Federal Reserve Snake, or a total of $78 billions
by the banking system. The remaining $105 billions were taken by
individuals directly. or by other nonbank investors including savings
banks and life insurance companies. It is estimated that, at the end
of 1944, commercial and Federal Reserve Banks held $96 billions and
nonbank investors about $134 billions of the interest-bearing issues
outstanding at that time.
No United States securities were "given" to the banking system
OF to anyone else. The securities acquired by the braking system
were paid for. principally by deposits in the name of the United
States which have since been disbursed and are the property of the
individuals and corporations now holding them and not of the banks.
The banks hold the securities merely as offsets against the liabilities which they owe in turn to their depositors, and (in the case of
Federal Reserve Banks) to their note holders.
The only benefit which the banks have received from these
operations has been their earnings. consisting of an increase of
a little more than $1 billion in net worth, and dividends at a rate
of about 4 percent on invested capital at the beginning of the period.
THE WHITE HOUSE
WASHINGTON
mm
seill
63721
January 11,1945
Dear Mr. Secretary:
Mrs. Roosevelt would appreciate advice
as to how to answer the enclosed statement taken
from a letter from Mr. L. C. Christian, Houston,
Texas.
Very sincerely yours,
Malerina C. Thompson
Secretary to
Mrs. Roosevelt
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D.C.
L. C. Christian
Attorney-at-Law
306 West Building
Houston 2, Texas
January 3, 1945
Copy
You (Mrs. Roosevelt) say: "The suggestion you make to 'restore
to the people the power to issue, manage and control their own money and
credit has been done." Truth and candor compel me to say that the foregoing quoted statement is Wholly Untrue. Our Federal Government has
nothing whatever to do with the issuing, management and control of our
money and credit. This strictly governmental function is exercised solely
and
exclusively by private bankers, in direct defiance of the United States
Constitution,
During the last four years, our Federal Government has issued, and
given to private banks, in return for mere credits in government pass-books
on such banks, probably 250 billions in U.S. Bonds. For all these billions
in bonds, the banks did not pay one red cent. In addition to these untold
billions in U.S. Bonds given to banks directly, and which they now have in
their possession, and claim to legally own, many more billions have been
given to them, in the same manner, and then sold, by the banks, to their
depositors for cash. Our federal government has not possessed sufficient
intelligence to deal directly with its citizens in selling to them these
bonds, It first gives such bonds to the banks, and the banks then sell them
to ignorant, but patriotic, Americans for cash. When I try to discuss this
outrage upon decency and common sense, words fail me. I shall, therefore,
forbear further comment, except to say: The Roosevelt Administration has,
within the last four or five years, given to banks, without the payment
of one red cent in consideration therefor, U.S. Bonds almost (if not quite)
equal to the total wealth (300 billions) of the American people. This
hideous wrong, if not quickly corrected, will cause the Roosevelt Administration
to be cursed, not only by the present generation, but by generations yet
unborn. We, as a people, have been sold into economic slavery to banks forever,
and, in return, therefor. dad npt receive even "a mess of pottage". This is
indeed a fine prospect for our boys to return to, after fighting and winning
this war! Our government has told them that they are fighting to preserve
our political, religious and economic freedom, and this is what We give them,
No, our form of government will not, and cannot, survive under the
unconscionable burden of debt which has already been, and which is still
being, heaped upon it. I hesitate to even contemplate what will inevitably
happen, if this grievious wrong is not corrected now. Our fighting boys are
not going to submit to economic slavery when they come home; they will not
see their wives and children starve, or placed in "relief lines". I shall
carry on this fight 80 long as I live and breathe, or until this vile
vermin has been entirely destroyed!
JAN 19 1945
Dear Admiral Carpender:
Please accept this as an expression of my
appreciation for your effective cooperation in the
Sixth War Loan.
The Navy Show which was staged in Chicago, by
bringing vividly to public attention the magnificent
performance of the Navy during this war, was very
substantially helpful to our bond sales efforts.
Your understanding support of our war financing
program as evidenced by the assistance you have repeatedly rendered the War Finance Chairmen in the
states within the Ninth Naval District has been a
very real contribution toward enabling them to meet
and exceed their quotas.
I appreciate greatly your having made Naval
personnel and facilities available to the states
listed in your report to the Secretary of the Navy.
I trust that we may continue to count upon your interest and assistance in coming drives as in the past.
Sincerely,
(Signed H. Morgenthau, Jr.
Rear Admiral Arthur S. Carpender
Commandant Ninth Naval District
Chicago, Illinois
THE SECRETARY OF THE TREASURY
WASHINGTON
Dear Admiral Carpender:
Please accept this as an expression of my
appreciation for your effective cooperation in the
Sixth War Loan.
The Navy Show which was staged in Chicago, by
wee extremely effective in bringing about a realize invidle
tion of the magnificent performance of the Navy during make
this war, was very
allentin
bind sales
Your understanding support of our war financing program as evidenced by the assistance you have
repeatedly rendered the War Finance Chairmen in the
states within the Ninth Naval District has been a very
real contribution toward enabling them to meet and
exceed their quotas.
I appreciate greatly your having made Naval
personnel and facilities available to the states listed in your report to the Secretary of the Navy. I
trust that we may continue to count upon your interest
and assistance in coming drives as in the past.
Sincerely,
Rear Admiral Arthur S. Carpender
Commandant Ninth Naval District
Chicago, Illinois
FOR VICTORY
BUY
UNITED
STATES
WAR
BONDS
AND
STAMPS
111
1-23-45
D.C.
WAR WASHINGTON
DEPARTMENT photostitt me. Coyme
JAN 19 1945
The Honorable Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D. C.
Dear Mr. Secretary:
I appreciate the assistance of your war bond
organization which you offered in your letter of 2 January.
We are certainly interested in having all
available constructive assistance in connection with the
drive for increased production for the war effort which
is being made at the present time.
Mr. J. A. Krug, Chairman of the War Production
Board, is organizing this drive on a national basis in
cooperation with the War Manpower Commission. The use of
your war bond organization has been discussed with his
office and he will be in touch with you shortly.
Sincerely yours,
Henry h Eimson
Secretary of War.
FOR VICTORY
BUY
WAR
BONDS
AND
STAMPS
112
M
January 19, 1945
MEMORANDUM FOR THE SECRETARY
From:
Mr. Blough
(For your information; no action required)
The O.P.A. and Judge Vinson's office are much
concerned about rising real estate values, both
urban and rural. Judge Vinson's office has addressed
a letter to Chairman Eccles asking his views on
controlling this situation through credit restrictions.
Off the record, I understand Mr. Eccles will say
he does not think that credit control would be a
suitable method and will suggest special capital gains
taxation as a better remedy.
Special capital gains taxation might be helpful,
but it is not a political possibility at this time,
in my opinion.
MEMORANDUM FOR THE SECRETARY
January 19, 1945.
Mail Report
Mail kept a brisk pace again this week, and
though there was not a great deal of variety in the
letters, many of them were outspoken and some quite
urgent in tone.
A step-up in tax mail brought with it a decided
shift in subject. Inquiries, protests, and suggestions
about new tax measures just about doubled those received
the previous week, while at the same time demands for
tax refunds dropped off, both in our own receipts and
in those from the White House. A few correspondents
submitted completed tax forms, and others sent itemized
statements of income with requests that their taxes
be computed. Several writers spoke unfavorably of
what they considered extravagant advertising campaigns
carried on by certain business firms to reduce their
income tax liability.
As usual, bond mail included a great many questions
about ownership of War Bonds, a few inquiries about
Adjusted Service Bonds, and a number of suggestions
for promoting sales, especially for the Seventh Drive.
Reports of delays in receiving bonds purchased by
service men through the pay-roll deductions plan of
the War Department indicated that the situation has
not improved.
A total of 9 donations this week set something of
a record. The smallest gift was a 74 check returned
for cancellation, and the largest was a check for
slightly over $500 from Melchor Leon of Mexico City.
There was less anonymous mail than usual and almost
nothing of an abusive nature.
General Comments
Mrs. L. Allen Beck, Executive Secretary, Colorado
Branch of Citizens for Victory, Denver, Colorado.
The Executive Committee of Citizens for Victory has
asked me to express to you our deep appreciation
of the privilege of having Mr. Raymond F. Mikesell
here last week. * * # Mr. Mikesell outlined the plans
of the Bretton Woods conference so clearly and
forcibly, he was so generous with his time when it
came to the question period, that I'm sure he made
converts to the cause. I know I personally came
away with the conviction that the Bretton Woods
Agreements are the real foundation stone for any
international organization for peace. You are certainly to be congratulated on this new method of
presenting the facts to the American people, especially by means of such an able ambassador as
Mr. Mikesell. Thanks again for sending him to Denver.
Copy of a letter addressed to Senator Kenneth S.
Wherry from Sergeant Norbert R. Mahnken. I hope
that you may be able to assist me in obtaining some
information regarding the status of a claim for a
Government check covering Army pay and allowances
which I should have received August 31, 1944, and
which was lost or stolen. Payment was ordered stopped
by the Finance Officer at Omaha on September 8, and
when the check was presented to the Treasurer for payment by the bank which had accepted the forged check,
payment was declined on September 13. Immediately
I filed the required affidavits, both with the
Treasury Department and with Secret Service officials,
making claim for a duplicate check. Since that time
it has been virtually impossible to obtain any satis-
factory information as to the status of this claim.
A letter directed to the Treasury Department elicited
the reply of the nature that no action had been taken
inasmuch as a report of the investigation had not yet
been received. Yet when I was in Omaha several weeks
- -2- -
ago and inquired of an Agent at the Omaha Branch of
Secret Service, I was informed that such a report
recommending immediate payment had been filed November
16. No further information has been received since
that time. Naturally, I should like to know why
payment of my claim has been delayed so long; whether
I have been misinformed by one or the other agency;
or whether possibly the claim has been mislaid in
the deep, dark recesses of the lower file basket of
some petty Treasury Department official.
Anonymous -- Spokane, Washington. Herewith enclosed
please find $50.00 which I wish you to please throw
in the pot to help pay expenses of the War. Uncle
Sam has been good to me. This is the way in which
I show my appreciation. I could have bought War Bonds
but he would have had to pay me back; in that event,
I would not have been giving him anything. I want
him to have this as his very own. He is a fine Uncle.
With all my love and kisses -- (Signed) One of his
grateful children.
Melchor Leon, El Dragon De Oro S. A. Mexico, D.F.
With reference to your letter #7092, I take the
pleasure to inclose herewith New York draft in the
amount of $504.89, equivalent of $2,448.71 Mexican
pesos (at the rate of exchange of $4.85 pesos for
$1.00), to which amounted the 25% of all purchases
made by American citizens in this store during the
month of December 1944, that is donated to the U. S.
Government for "National Defense".
E. T. Tate, Chicago, Illinois. You are the most
cursed, unpopular man, in Chicago. Your hate attitude
toward the German people, I don't mean Nazis, is regretful. You would kill and transport millions of peoples,
out of their native land, to suit your hate. If comes
a day, when you are near death, you will suffer and
remember. *
-3Elise S. Haverbeck, Briarcliff Manor, New York.
It was with great dismay that I saw your proposal for
Germany's future so casually shelved. Frankly,
I think it is worth a great deal of further thought
and discussion by all the thinking people of the
Allied Nations. * * * To me, yours is the only sane
and safe idea, and one which should in no way detract
from the dignity of any country's existence. Working
the land is good for all men and all countries, regardless of why it is done. All people who work the
land get a very healthy viewpoint on life after a
time. That is just what Germany needs and will need
for many years to come, aside from keeping her in line
and out of mischief.
-4Favorable Comments on Bonds
Alfred H. Williams, President, Federal Reserve Bank
of Philadelphia. Thank you for your letter of
January 12, 1945, in which you so generously expressed
appreciation of the contribution of this Bank to the
success of the Sixth War Loan Drive. Notes of this
sort do much to heighten morale among employees these
strenuous days, and I shall bring your communication
to the attention of the staff.
William E. Clark, Louisville, Kentucky. Undoubtedly
you are aware of the ability of your Managing Director,
Louisville Branch, Federal Reserve Bank of St. Louis,
Mr. C. A. Schacht. However, when one finds efficiency
and speed in these days of confusion, it should be
appreciated. For a month I have been trying to locate
three bonds I bought during the recent Drive. They
were ordered to be delivered to me in care of my bank.
Yesterday at 4:00 p.m., as a last resort, I telephoned
your Mr. Schacht. In the first mail this morning
I had his letter locating the bonds and showing they
had been delivered by the Federal Reserve Bank here
December 13th and 14th. He may not be as oily in his
tone over the telephone as some, but this man should
go far in banking. My opinion is not due to his
locating my bonds, but to the speed and efficiency of
his procedure. * * *
W. Dale Clark, State Chairman, War Finance Committee,
Omaha, Nebraska. Thank you very much for your letter
of the 9th, and your comments are undeserved but
appreciated. The G.I.'s in the fox holes are winning
the war and deserve the credit, rather than their
fathers, mothers, brothers and sisters who are buying
the bonds and who make up the sales army.
-5Unfavorable Comments on Bonds
William J. Najjar, Duluth, Minnesota. This is to call
to your attention that ever since the O.P.A. cancelled
the sugar and food stamps, the people began to feel
reluctant to buy and hold War Bonds. In the stores,
on the street, and in various places, the people discuss the O.P.A.'s sudden cancellation of said stamps,
and express their bitter disapproval, and openly
discuss the possibility that some day the U. S. Government might also cancel the War Savings Bonds.
Miss Leila Barnes, Havre de Grace, Maryland. I was
the owner of $6,500 Federal Farm Mortgage Bonds,
interest due May 15, November 15. On November 15
I deposited with The First National Bank of this city
for collection coupons amounting to $97.50, only to
be told a few days later that coupons had been returned as no good, that bonds had been called May 15.
I read the financial sheet of newspapers every day
but did not see any mention of these bonds being paid,
nor any notice of same in banks. Seems some adjust-
ment is due me for this loss of interest. I am a
woman over 70 years of age and the investment repre-
sented hard-earned money saved for old age. I collected
for the $6,500 bonds and immediately purchased the new
Treasury Bonds of December 1, 1944.
B. S. Bailey, Ludington, Michigan. I just listened
to another radio appeal to buy bonds with the suggestion
that the money thus invested could be used to buy
some desired article ten years hence. However, my
reaction to such an appeal is vastly different than
it was one short month ago. If the Government, through
some bureaucratic head, can cancel food coupons simply
because there were too many in the hands of consumers,
why is it not possible -- even probable -- that
fifteen or twenty years hence, when we are in the
throes of the depression which must follow the wasteful
6-
spending orgy of our present Administration, that
the Treasury Department cannot say that the form of
Savings Bond then outstanding will not be honored?
I have three one thousand dollar bonds which have
been purchased to finance a college education for
my three grandchildren in the 1960's, and I am
gravely concerned about this matter.
W. R. Clark, Houston, Texas. I am writing you to let
you know how I feel and think about what and how this
war is being prosecuted, first it is very regrettable
for me to learn that we American citizens have been
led by our officials to believe that we were not to
buy anything not essential to life, even to the
economy in the using of our food ration coupons,
which we were led to believe that these economies
would give more to our Armed Forces, only to find
that our food coupons which were said by officials
would not become invalidated, had, in turn, been repudiated, and the food thus saved is being used to
pamper our War Prisoners, and these same War Prisoners
are allowed to escape. * * * I am herewith asking you
whether or not the repudiation of our food coupons
by Government officials cannot, in turn, eventually
lead to the repudiation of the War Bonds that we as
citizens of this nation have bought and paid for,
because of our doing without the non-essentials of
life.
George L. Borders, Bernalyn Farm, Kingston, Ohio.
The United States Government, through the cancella-
tion of ration points, has repudiated its obligations
and promises. Now will it sooner or later repudiate
its bonds? A Government that repudiates one obligation might be expected to repudiate another, and since
the country is rapidly approaching bankruptcy through
profligate spending and waste, I am wondering if the
future of Government securities isn't a little shaky.
*
0
-7-
Favorable Comments on Taxation
Mary Emily Young, Seattle, Washington. After having
written you a few days ago, complaining that I had
had no reply from the Pittsburgh, Pennsylvania,
office in response to my letter about overpayment
of tax in 1943, I have had an answer from them.
So I want to ask you to overlook my first letter to
you. Thank you very much.
O
8Unfavorable Comments on Taxation
C. Tuchschmid, Vaduz, Liechtenstein. * I filed
and paid the Collector of Internal Revenue at Baltimore
my U. S. income tax for 1940. In February 1944 my
bankers, Messrs. Harris, Upham and Company, New York,
cabled me that the Treasury is claiming additional
tax of $450.88 on stocks not held by them. In answer
wired that all dividend-paying stocks were held by
them and that I did not owe anything further. They
cabled again, this time claiming $319.88, stating
that my gross income was $8,025.17, tax liability
I
$1,324.16, paid at source $847.10, and my payment
$157.18. In reply to this I sent to my bankers for
the Treasury Official a detailed statement showing
every dividend and interest received, showing a total
income of $7,353.39, tax retained at source $1,056.10,
and my payment for balance of $157.18. On October 17
I once more received a cable in connection with this
matter, threatening seizure if I did not promptly pay,
stating at the same time that I did not include certain
dividends. I enclose herewith copy of my letter to my
bankers. I do not know the name of this Treasury
Official who has made these claims upon me, but Messrs.
Harris, Upham and Company, 14 Wall Street, New York,
can furnish you the same. # * # I would be very grateful to you if you would have this investigated and
reported to me. (The following comments are taken
from Mr. Tuchschmid's letter to his bankers.) #
Itemized: General Machinery -- You collected all
dividends for me yourselves, hence there should be no
difference with the Treasury. New England Public
Service Pfd. -- I received directly the dividends on
100 shares payable March 15 and June 15 of $87.50
gross, each, and they appear on those dates on my list.
On July 18, 1940, you sold these 100 shares and I consequently did not receive any further dividends. The
Treasury claims three dividends at $175.00. Any broker
will be able to tell the Treasury that only half of the
full dividend was paid. * # * Niles Bement Pond -- This
Company paid 50 cents in March and 75 cents each in
--9-
June, September and December, or a total of $275.00,
which duly appear on my list. The Treasury claims
that I collected three dividends at $187.50 each. The
Treasury official is perhaps good enough to show me
how to go about it in order to obtain these big dividends? If the Treasury does not take my word for it,
they can have recourse to the stock registers of the
different companies, which will easily prove holdings
and dividends paid. The claim of the Treasury Department has no basis whatsoever, however, in order to
save further cable expenses I instructed you to pay
this claim under protest. * To compel one to pay
something one does not owe by claiming things at
random and contrary to truth, is indeed a strange
method. I could understand it of the Nazis, but coming
from the U. S. Treasury Department really astonishes me.
MIGHT is not RIGHT.
R. G. Lichtenstein, Executive Vice President,
Continental Refining Company, Oil City, Pennsylvania.
This letter is addressed to you as the head of the
Treasury Department, and possibly the only man who
can take any action concerning this complaint, if you
will. We are now engaged in filling out Withholding
Receipt - 1944 Form W-2 (Rev.), which are individual
forms and are requiring an unholy amount of time to
fill out. We see no reason why these forms couldn't
have been printed in sheets the same as the accompanying Form W-2b which would not have necessitated
weaving carbons in and out the multiple copies and
continuously taking out of the typewriter. Our office
manpower situation now is so critical that we are compelled to work nights in an endeavor to keep our records
up-to-date, and when the Treasury Department thoughtlessly piles another job like this one on us, we believe
we have very legitimate grounds to file a harsh com-
plaint. # A substantial portion of the time of our
depleted office staff is now taken up with filing
literally a million and one Government reports and
when something like this comes along, our blood pressure
O
- 10 reaches the bursting point. Why don't you look into
a few matters like this and have your Department
statisticians furnish forms which, if not simple,
will at least lend themselves in some degree to convenience and rapidity in getting them out?
Stanton M. Hardy, M.D., Assistant Medical Director,
Lederle Laboratories, Inc., Pearl River, New York.
You may possibly remember having met me at Twillingate,
Newfoundland, several years ago when you visited that
fishing village and the Notre Dame Bay Memorial
Hospital there, as I was on the staff of that insti-
tution. In August 1943 I received an honorable discharge, having been found not physically qualified
for active duty. In making my 1943 income tax return,
I claimed a refund of $54.68. This matter has never
been adjusted, and although I have written to the
Collector of Internal Revenue at Newark, New Jersey,
several times about it, I have not as yet had the
courtesy of a reply to my request for information as
to whether this claim is to be allowed or denied and
if so, on what basis= I realize that the amount involved is extremely small, but it does seem that the
average taxpayer should at least be able to have an
explanation of such matters. If you can do anything
to hasten action, or at least have the Collector involved write to me explaining how the matter stands,
I would consider it a great favor.
Mrs. Kear, Columbus, Ohio. Am enclosing withholding
receipt for what you call income tax. How any Government can take twenty percent of any employee's wages
without consulting the employee and finding out what
he is able to pay out of his skimpy earnings is more
than any intelligent thinking American can understand.
It can more rightfully be called a holdup tax.
I mailed your letter in answer to mine concerning a
part of last year's tax -- $41.00. Some smarty from
the Internal Revenue tax department called me over the
- 11 -
phone during working hours, which is against the rules.
He offered no concession but told me that I'd have to
do what he said, and threatened me if I did not. Don't
this sound like Germany? I am not able to pay income
tax. This $118.60 that the Government has taken from
me of my hard-earned wages would have bought me some
very necessary clothing that I need -- underwear, hose,
shoes, etc. I would like to save enough of my wages
that I work hard for to pay my way in the Home for Aged.
My working years are about numbered. Senator Pepper
was going to do so much for the small wage earner, but
all I ever heard was wind, and it soon died. *
The following letter was addressed to the President by
C. C. Homby, Barracks 85, Room 68, Hanford, Washington,
and referred to the Treasury for handling. "I realize
there is a war going on, since being a defense worker
for the past four years. # * * We don't mind paying
any reasonable tax, but since when has it become a
luxury to hold your pants up? Yesterday I paid 20%
luxury tax on a belt that was to hold my pants up while
I worked. It seems like the luxury tax is a bit tight!
Herbert D. Myers, Greenville, Del. # My opinion of
the tax system forced upon the American people is that
it is unjust and un-American to the core because it is
fashioned on a plan that few, if any, people in the
country know what it is. For the last two years I have
had to employ help to make out my income tax report,
which is a very simple one, comparatively speaking, but
I have not known for the last two years what was done
nor why it was done -- the law is so complicated.
This check for $100.00 is sent with the proviso that
*
the full amount of it, or any part of it that is over-
paid, may be deducted from my next report or estimation,
whichever comes first. During the last year I have
- 12 moved. My rate of pay is changed. Where, in my
former employment, nothing was deducted from my pay,
now deductions are made for taxes, but no one has
been able to explain what it is or how it is figured.
All that has been shown me is a table of rates and
amounts to be deducted. I once went into a Government income tax office for help and because I had
studied the income tax blank and the instructions,
spending many hours in trying to figure out what was
wanted, and wanting to make out the income tax blank
correctly, your own agents, paid for out of my tax
money, refused to answer my questions or to help me
in any way, handing me a volume of hundreds of pages
of tax literature, far beyond what the untrained man
could ferret out or understand, and told me to look
up the answers to my questions myself while they sat
around smoking cigarettes and making uncomplimentary
remarks directed at me. * * * This letter is written
to let you know that I have had trouble, and lots of
it, with Government rules and regulations, and that
even the money I am now sending herewith is needed for
personal matters, the paying of long-standing debts,
and the keeping up of morale. # # *
Gladys Paul, Plainsfield, New Jersey. Enclosed you
will find my Federal income tax return for the year
1944, with a check for $131.00. I am sending the check
and the return to you directly as Secretary of the
Treasury because I wish to make a vigorous protest
against the injustice of the tax law passed about the
middle of 1944, which was made retroactive to Jan. 1,
1944, in which "own cousins" are not considered as
close relatives as step-mothers or step-fathers. There
have been many cases of reversal of decisions in official Washington. Would it not be as possible for the
tax committee to re-define "dependent" as for the
O.P.A. to re-define "indefinitely"? * My "own
cousin", living in Maine, is 72 years old. She has no
money and no one to care for her except her cousins.
She is crippled and has to be bathed and dressed,
O
- 13 and otherwise cared for in the same manner as a baby.
In the year 1944 I carried about 95% of that burden,
paying a practical nurse from January 1 to about
August 28, and from then through December 31, paying
for her care in a nursing home at a total cost of over
$900.00. I now find that I cannot claim her as a
dependent, but that I must pay, in addition to the
$497.00, already withheld from my school teacher's
salary, an additional $131.00. I am boiling at the
injustice of it. * * * It would seem to me that if an
individual has conscience enough to assume that kind
of a burden, a democratic government should be will-
ing to meet him half-way and not try to grind him
between the upper and nether millstones.
January 19, 1945
MEMORANDUM FOR THE FILES
I called Ned Brown about the lunch on Wednesday
of the Delegation to discuss Bretton Woods legislation.
He said that he deeply appreciated being invited but that
he was so overburdened at the present time with other
commitments that he has made that he did not think he
could make the date. I told him that we appreciated his
difficulties and that if he should be dropping by here in
the next week or so, I would be very glad to report to
him whatever occurs.
He asked me in particular to thank the Secretary
for inviting him.
Original to Secretary Morgenthau
Cc: Mr. White
Mr. O'Connell
JAN ly 1945
Dear Harold:
As you know, prior to the American landings
in the Philippines, the Treasury participated in a
series of conferences with representatives of your
Department and others in the preparation of civil Aifairs directives to General MacArthur and the other
military commanders involved. our participation was
at the instance of the war Department just as in the
case of the formulation of civil affairs plans involving financial matters for other liberated areas.
However, the Philippine directive which was
finally drafted was very general in character, covering only ticipated immediate problems of the liberating forces, because the military authorities took
the position that military responsibility for civil
affairs should be kept to an absolute minimum. The
War Department stated that it desires no responsibility
for military government as such in the Philippines beyoud immediate battle areas, and that at the earliest
possible moment normal civilian agencies of the United
States and of the philippines should carry the respon-
sibility for civilian affairs.
Under these circumstances, the Treasury, of
course, assumes that the responsibility for post-
liberation civilian operations in the Philippines,
insofar as the United States Government is concerned,
rests with the Department of the Interior and, accordingly, is not engaged in any planning concerning
Philippine financial matters such as was done in the
case of other liberated areas. I want you to feel free,
however, to call upon the Treasury Department for any
advice and assistance you may care to have. The
Treasury will be glad to meet such requests insofar as
it can.
In this connection, I am enclosing some information which has come to the attention of Foreign
Fuads Control in the course of its freezing operations,
-2concerning some of the members of the Philippine
Commonwealth Congress elected in November 1941. Al-
though I am sure that you already have most, if not
all, of this information in your files, I thought
that our summary compilation, a copy of which Is en-
closed, would be of interest to you, particularly in
view of Osmena's recent statement that this Congress
might be used in re-establishing the Philippine Common-
wealth Government.
Very truly yours,
(Signed) H. Morgenthau, Jr.
Secretary of the Treasury
The Honorable,
The Secretary of the Interior.
Enclosure.
GBronz:OASchmidt:RRShwartz:JbFriedman:rhb 12-29-44
SUMMARY OF ATTACHMENT
Foreign Funds Control has up-to-date - informa-
tion with respect to 15 of the 24 senators and 20 of the
98 represent a ives of the Philippine Commonwealth Congress
elected in November 1941. The facts which are summarized
in the attachment indicate that 33 of these 35 collaborated
actively with the Japanese during the period of occupation.
DESCRIPTION CF COLLABORATION BY MEMBERS
OF PRILIPPINE commonwealth CONGRESS
CLARO M. RECTO - SENATOR
VOLUNTEERS LIMEDIATE COLLABORATION (JANUARY 1942)
One of 34 prominent Filipinos WHO addressed a joint letter to the
Commander in Chief of the Imperial Japanese Forces in the Philippines on January 23, 1942, offering their support to the enemy
authorities.
POLITICAL ERVICE TO PUPPET ADMINISTRATIONS
Council of State - member from January 1942 to October 1943.
Minister of Foreign Affairs under puppet President jaurel
from October 1943 to date.
Readed the Department of Education, Health and Public
Welfare in the Vargas regime (January 1942 - October 1943).
PARTNER IN FORM TION OF PRILIPPINE PUPPET RE UB IC" (1943)
Member of the Japanese-sponsored "Preparatory Commission for
Philippine Independence" who participated in drafting and
si, ning a constitution for the "Philippine Puppet Republic."
REWARD FOR COLLABORATION
Awarded the Order of the Sacred Treasure, First Class, by
Hirohito in December 1944 "for meritorious services in fostering
amity between Japan and the Philippines."
PRE-WAR JAPANESE ASS CIATIONS
Recto was often reported before the outbrea of war to be proJapanese. He served as counsel for the Philippine offices of
Litsui, Mitsubishi, the Bank of Taiwan, and the philippine
Nippon Mining Co. lie was an incorporator for the Insular Mine
-2Operators and the Luzon Li hterage Co., both of which were
established in 1938 with the help of Japanese capital.
BENIGNO S. AQUINO - REPRESENTATIVE
VOLUNTEERS IMMEDIATE COLLABORATION (JANUARY 1942)
One of 34 prominent Filipinos who addressed a joint letter to the
Commander In Chief of the Imperial Japanese Forces in the philippines on January 23, 1942, offering their support to the enemy
authorities.
POLITICAL SERVICE TO PUPPET ADMINISTRATIONS
Council of State - member January 1942 - October 1943.
Headed Department of Interior under Vargas regime
January 1943 - October 1943.
Puppet Assembly - speaker October 1943 to date.
DIRECTOR OF JAPANESE-INSPIRED POLITICAL PARTY
Director General of the Kalibapi, philippine official political
party, established under Ja anese auspices. In office May 1944 to
date.
PARTNER IN FORMATION OF "PRILIPPINE PUPPET REPUBLIC" (1943)
Member of the Japanose-sponsored "Preparatory Commission for
Philippine Inde endence" who participated in drafting and
signing a constitution for the *Philippine Puppet Republic."
REWARD FOR COI.LABORATION
In April 1944 quino headed a Mission to Japan to express to t he
enemy Filipino gratitude for the benefits of Greater East Asia.
During his trip he was decorated by the Japanese Emperor with the
Grand Cordon of the Rising Sun. After inspecting the Japanese
war machine, he declared, 'I firmly believe that final victory
in the present conflict will be won by the Japanese Empire."
-3QUINTIN PAREDES - SENATOR
VOLUNTEERS IMMEDIATE COLLABORATION (JANUARY 1942)
One of 34 prominent Filipinos who addressed a joint letter to the
Commander In Chief of the Imperial Japanese Forces in the Philippines on January 23, 1942, offering their support to the enery
authorities.
POLITICAL SERVICE TO PUPPET ATMINISTRATIONS
Council of State - member January 1942 to October 1943.
Minister of Justice under Puppet President Laurel
September 1944 to date.
Minister of Public Works and Communications under Puppet
President Laurel October 1943 - September 1944.
Headed the Department of Public works and Communications in
the Vargas regime January 1942 - October 1943.
National Planning Board - member October 1943.
Economic Planning Board - member April 1944.
Philippine Shipping Association - member 1943.
Established under Japanese auspices to engage in
inter-island trade and to assist the eight member
companies in obtaining essential equipment and
supplies to aid Japanese war effort.
War Relief Board - Chairman until January 1944.
PARTNER IN FORMATION OF "PHILIPPINE PUPPET REPUBLIC" (1943)
Member of the Japanese-sponsored "Preparatory Commission for
Philippine Independence" who participated in crafting and
signing a constitution for the "Philippine Puppet Republic."
-4 REWARD FOR collaboration
Awarded the Order of the Sacred Treasure, First Class, by
Kirohito in December 1944 "for meritorious services in fostering
unity between Japan and the hilippines."
ANTONIO DE LAS ALAS - SENATOR
VOLUNTEERS IMMEDIATE C ILLABORATION (JANUARY 1942)
One of 34 prominent Filipinos WHO addressed a joint letter to the
Commander in Chief of the Imperial Japanese Forces in the philippines on January 23, 1942, offerin their support to the enemy
authorities.
POLITICAL SERVICE TO PUPPET ADMINISTRATIONS
Council of State - member January 1942 - October 1943.
headed Department of Finance under the Vargas regime
January 1942 - October 1943.
Minister of Finance under Puppet President Laurel
October 1943 to date.
National Planning Board - member October 1943.
Economic Planing Board - member April 1944.
PARTNER IN FORMATION OF "PLILIPPINE PUPPET REPUBLIC "(1943)
Member of the Japanese-sponsored "Preparatory Commission for
Philippine Independence" who participated in drafting and
signin a constitution for the "Philippine Puppet Republic."
PUBLIC SUPPORT OF JAPANESE (APRIL 1944)
Member of the April 1944 Mission to Japan to express to the
enemy Filipino gratitude for the benefits of Greater East Asia.
The following month de las Alas announced publicly that, as a
result of this trip, he was "further convinced of complete
victory for the Japanese.
-5REWARD FOR COLLABORATION
Awarded the Order of the Sacred Treasure, First Class, by
Hirohito in December 1944 for "meritorious services in fostering amity between Japan and the Philippines.
VICENTE ADRICAL - SENATOR
VOLUNTEERS I
COLL (JANUARY 1942)
me 01 34 prominent Filipinos who addressed a joint letter to the
Cornander in Chief of the Imperial Japanese Forces in the Philippines on January 23, 1942, offering their support to the enemy
authorities.
POLITICAL SERVICE TO PUPPET ADMINISTRATI
Council 01 State - no bar January 1942 - October 1943.
Philippine Shipping Association - member wepte or 1043.
Established under Japanese asspices to engage in
inter-Island trade and to assist the eight member
companies in obtaining essential equipment and
supplies to aid Japanese war effort.
PARTNER IN OF "PRILIPPINE POPPET AMPOLLIC" (1943)
ember of the Japanese-sponsored reparatory Commission for
Philippine Independence" who participated in drafting and sign-
ing a constitution for the Philippine Puppet Republic.
PUBLIC SUPP RT OF JAPANESE
Since the beginning of the occupation Madrigal has been an active
supporter of the Japanese. In ay 1942 he spoke on the subject
of Experiences in Japsnese-Philippine usiness" and declared,
We (the Filipino business community) have much to learn from
I wish to extend my thanks for the helpfulness
the Japanese
6-
that the Japanese Imperial Army and the Japanese Military
Administration have always shown us."
PRE-WAR JAPANESE ASS CI TIONS
Madrigal, a powerful shipping magnate, has a long record of
association with Japanese and Nazi interests in the Orient.
For example, in June 1936 he and certain other Filipinos acted
with two Japanese businessmen to organize the Philippine Fish
Packing Corporation; he was still a Director of that company
in 1940.
JOSE M. YULO - SENATOR
VOLUNTEERS I MEDIATE collaboration (JANUARY 1942)
One of 34 prominent Filipinos who addressed a joint letter to the
Commander in Chief 01 the Imperial Japanese FORCES in the Philip-
pines on January 23, 1942, offerin, their support to the enemy
authorities.
OLITIC SERVICE T PUPPET LMINISTR TIONS
Council of St te - member January - June 1942.
Chief of Justice of the Chilippine Suprome Court under the
Vargas regime - January 1942 - October 1943.
Chief Justice of the philippine Supreme Court under uppet
President Laurel - October 1943 to date.
National Planning Board - member October 1943.
economic Planning Board - member april 1844.
PUBLIC SUPPORT Or JUPANESE
Member of the April 1944 Mission to Japan to express to the
enemy Filipino gratitude for the benefits of Greater Last Asia.
REWARD FOR COLL BORATION
Awarded the Order of the Sacred Treasure, First Class, by
Kirohito in December 1944 "for meritorious services in fostering
anity between Japan and the Philippines.
-7FRANCISCO LAVIDES - REPRESENT TIVE
VOLUNTEERS Impediate COLL ABORATION (JANUARY 1942)
One of 34 prominent Filipinos who addressed a joint letter to
the Commander in Chief of the I perial Japanese Forces in the
Philippines on January 23, 1942, offerin, their support to the
enery authorities.
POLITICAL RRVICE TO PUPPET ADM LISTRATIONS
Council of State - member January 1942 - October 1943.
Military overnor of Laguna - 1944.
In this capacity, he attended a rally in Santa Cruz
supporting Laurel's declaration of war against the United
Stated in October 1944.
CHAMPION or JAPANESE CULTURE
Made president in August 1943 of Hito Nippon-Go Hukuy Kai, an
institution founded to spread Japanese language and culture in
the philippines.
PUPPET DIPLOMAT IN JAPAN
Philippine Embassy in Tokyo - 1944. Counselor and Acting
embassador.
EMILIANO TRIA TIRONA - SENATOR
POLITICAL SERVICE TO PUPPET ab MISTRATIONS
Director of the Bureau of Employment under the Vargas regime.
Puppet Assembly - member from Cavite and Chairman of the
Committee on Third Reading - October 1943 - January 1944.
Minister of Health, Labor and ublic welfare under Puppet
President Laurel - January 1944 to date.
Mar Relief Board - Chairman January 1944.
-8PARTNER IN FORMATION OF "PHILIPPINE puppet REPUBLIC" (1943)
Member of the Japanese-sponsored "Preparatory Commission for
Philippine Independence" who participated in drafting and
signing a constitution for the "Philippine Puppet Republic."
RAMON J. FERNANDEZ - SERATOR
VOLUNTEERS IMEDIATE COLLASORATION (JANUARY 1942)
One of 34 prominent Filipinos who addressed a joint letter to the
Commander in Chief of the Imperial Japanese Forces in the Philippines on January 23, 1942, offering their support to the enemy
authorities.
POLITICAL SERVICE TO PUPPET ALMINISTRATIONS
Council of State - member January 1942 to October 1943.
Philippine Shipping Association - Chairman, September 1943.
Established under Japanese auspices to engage in
inter-Island trade and to assist the eight member
companies in obtaining essential equipment and
supplies to ald Japanese war effort.
PRE-WAR JAPANESE ASSOCIATIONS
Fernandez, who has been prominent in Filipino banking and
industrial enterprises for almost forty years, has been
associated with Japanese collaborators and conservative
Spanish interests in the Philippines. Among his affiliations
is the Philippine Fish Packing Corporation which he formed
in 1936 with two Japanese businessmen.
MELICIO ARRANZ - SERATOR
VOLUNTEERS IMMEDIATE COLLABORATION (JANUARY 1942)
One of 34 prominent Filipinos who addressed a joint letter to
the Commander in Chief of the Imperial Japanese Forces in the
Philippines on January 23, 1942, offering their support to the
enemy authorities.
-9POLITICAL SERVICE T PURPET ADMINISTRATIONS.
Council of tate - member January to June 1942.
Puppet Assembly - member from Cagayan Province October 1943.
PARTNER In POTUATION OF "PRINIPPLE puppet pEPUBLIC" (1943)
Member of the Japanese-sponed "Preparatory Commission 1 or
Philippine Independence" who participated in drafting and
signing is constitution for the "Philippine Puppet Republic."
SPONSOR a COLLABORATIO IST B NKING PROGRAM
Arranz was the sponsor of the bill to create a new Central
Bank for the Philippines, W. ich had as one of its announced
purposes to promote cooperation between the Hilippine econom,
and other regions of the Co-Prosperity Sphere created by the
enemy out of conquered territories.
DOMINADOR TAB - REPRESENTATIVE
VOLUNTEER I MEDIATE COLLABORATION (JANU RY 1942)
One of 34 prominent Filipinos WAG addressed a joint letter to the
Commander in Chief 01 the Imperial Japanese Forces in the Philippines on January 23, 1942, offering their support to the enemy
Authorities.
POLITICAL SERVICE TO PUPPET ADMINISTRATIONS
Council of State - Member January to June 1942.
Puppet Assembly - ex-officio member September 1943.
DIRECTOR OF JAPANESE I SPIRED POLITICAL PARTY
Assistant Director General of the Kalibapi, Philippine official
political Party, established under Japanese auspices.
- 10 TEODORO DE VERA - REPRESENTATIVE
JAPANESE-INSPIRED POLITICAL PARTY
Director of the provincial and municipal branches of the
Kalibapi, Philippine official political party established under
Japanese auspices. De Vera took office in pril 1944.
MANUEL ROXAS - SERATOR
POLITICA SERVICE TO PUPPET ADMINISTRATIONS
Minister without Portfolio - -levated to cabinet pain in summer
01 1944.
economic Planning Board - Chairman, April 1944.
National Rice warehouse (BIBA) - Chairman of the board, April
1944.
PARTNER IN FORMATION OF *PhILIPPINE PUPPET REPUBLIC" (1943)
Member of the Japanese-sponsored "Preparatory Commission for
Philippine Inde endence" W o participated in drafting and
signing a constitution for the "Mill ine ruppet Republic."
PUBLIC SUPPORT OF JAPANESE
before the occupation of the Philippines it was generally
understood that Roxas was the protege of Oamena and the
successor to the "tarone" 20 an arran ement between Osmena
and Guezon. lt ough he accompanied uezon to Corregidor in
December 1941, Loxas did lot leave the Islands with the President and was not reported t 0 have been captured by the Japanese
until the sunser of 1943. In September 1943, no. ever, he
participated in the drafting of the constitution for the
Philippine Puppet Republic, and Japanese broadcasts commented on
his coming out of retirement to take an active part in the
Laurel Government as proof that Filipinos were through with
America.
EULOGIO RODRIGUEZ - SENATOR
VOLUNT RS IN EDIATE COLLABORATION (JANUARY 1942)
One of 34 prominent Filipinos who addressed a joint letter to the
Commander in Chief of the Imperial Japanese Forces in the Philippines on January 23, 1942, offering their support to the
- 11 enemy authorities.
POLITICAL SERVICE TO PUPPET ADMINISTRATIONS
Council of State - member January 1942 - October 1943.
Economic Planning Board - member and Chairman of Fish
Committee - April 1944.
BUSINESS ACTIVITY UNDER THE OCCUPATION
Two affiliated companies with which Rodriguez is associated,
the Luzon Investment Co. and the Luzon Surety Co., are
known to be operating under the occupation. Rodriguez was
elected President of the latter enterprise in 1944.
ELPIDIO QUIRINO - SENATOR
VOLUNTEERS IM EDIATE COLLABORATION (JANUARY 1942)
One of 34 prominent Filipinos who addressed E. joint letter to the
Commander in Chief of the Imperial Japanese Forces in the Philippines
on January 23, 1942, offering their support to the enemy
authorities.
POLITICAL SERVICE TO PUPPET ADMINISTRATIONS
Council of State - member January - June 1942.
National Planning Board - member October 1943.
Economic Planning Board - member; also Chairman of Leaf
Tobacco Sub-Committee - pril 1944.
PEDRO C. HERNAEZ - SENATOR
VOLUNTEERS ImmeDIATE COLL BORATION (JANUARY 1942)
One of 34 prominent #Ifipinos who addressed a joint letter to
the Commander in Chief of the Imperial Japanese Forces in the
philippines on January 23, 1942, offering their support to
the enemy authorities.
POLITICAL SERVICE TO PUPPET
Council of State - member January to June
PRE-WAR ASSOCIATION WIT AXIS SYMPATHIZERS
Hernaez has been identified with minin
Islands for some time. Amon, ...is associ
incorporators in these enterprises are prominest
and industrial figures including Enrigue Egbel,
consul who is reported to have exercised control
Fascist movement in the Philippines and Rainel Alume
been & staunch supporter of the puppet overnments
JOSE COJUANOCO SENTATIVE
POLITICAL SERVICE TO PUPPET ALMINISTRATION
Foodstuffs Control Association - Director July 1943.
The majority of directors in this a ency are Japanese.
PRE-MA JAPANESE ASSOCIATIONS
Cojuangco, a wealthy landowner from Tarlac, was in 1040 a
Director of the Balintawa Beer Brewery Co., Inc., one of the
lar est Japanese enterprises in the Philippines.
ALFONS E. MENDOZA - REPRESENTATIVE
POLITICAL SURTICA TO PUPPIN ILINISTIATION
Council of State - Member January to June 1942.
Puppet assembly - %xofficio member September 1943.
PROSPERO SANIDAL - REPRESENTATIVE
POLITICAL SERVICE TO PUPPET ALMINISTRATIONS
Council of State - Member January - June 1942.
- 12 POLITICAL SERVICE TO PUPPET ALMINISTRATIONS
Council of State - member January to June 1942.
PRE-WAR ASSOCIATION WITH AXIS SYMPATHIZERS
Hernaez has been identified with mining interests in the
Islands for some time. Among his associates as officers and
incorporators in these enterprises are prominent political
and industrial figures including Enrique Zobel, the Franco
consul who is reported to have exercised control over the
Fascist movement in the Philippines and Rafael Alunan who has
been a staunch supporter of the puppet governments.
JOSE COJUANGCO - REPRESENTATIVE
POLITICAL SERVICE TO PUPPET ALMINISTRATION
Foodstuffs Control Association - Director July 1943.
The majority of directors in this agency are Japanese.
PRE-WAR JAPANESE ASSOCIATIONS
Cojuangco, a wealthy landowner from Tarlac, was in 1940 a
Director of the Balintawak Beer Brewery Co., Inc., one of the
largest Japanese enterprises in the Philippines.
ALFONSO E. MENDOZA - REPRESENTATIVE
POLITICAL SERVICE TO PUPPET ALMINISTRATIONS
Council of State - Member January to June 1942.
Puppet Assembly - Ex-officio member September 1943.
PROSPERO SANIDAD - REPRESENTATIVE
POLITICAL SERVICE TO PUPPET AIMINISTRATIONS
Council of State - Member January - June 1942.
- 13 Special Representative of Puppet President Laurel to
head Committee on Peace and Order in Northern Luzon -
April 1944.
DATU OMBRA AMILBANGSA - REPRESENTATIVE
POLITICAL SERVICE TO PUPPET ADMINISTRATIONS
Governor of Sulu Province under the Japanese occu, ation.
PUBLIC SUPPORT OF JAPANESE
In May 1944 Amilbangsa was reported to have praised the
prosperity which the Japanese had brou, ht to the Philippine
Islands through their plans for Greater East Asia. He
emphasized the importance for the Islands of the Japanese
struggle against the est powers.
JOSE B. LAUREL, JR. - REPRESENTATIVE
POLITICAL SERVICE TO PUPPET ADMINISTRATIONS
Jose B. Laurel, Jr. was reported to be an ex-officio member
of the uppet Assembly in September 1943. It is thought
that he is the nephew of Jose . Laurel, the Puppet President
of the Philippine Islands.
SA RAMAIN ALONTO - THE SULTAN OF SULU - SENATOR
PARTNER IN FORMATION OF "PRILIPPINE PUPPET REPUBL IC" (1943)
Member of the Japanese-sponsored "Preparatory Commission for
Philippine Independence" who participated in drafting and
signing a constitution for the "Philippine Puppet Republic."
PUBLIC SUPPORT OF JAPANESE
Domocao Alonto, the Sultan's son, led a group of 26 Moros to
confer with the Japanese in August 1943.
- 14 PROCESO C. SEBASTIAN - SENATOR
POLITICAL SERVICE TO PUPPET ADMINISTRATIONS
Administrative Commissioner appointed by Laurel in October 1944.
PARTNER IN FORMATION OF "PHILIPPINE PUPPET REPUBLIC" (1943)
Member of the Japanese-sponsored "Preparatory Commission for
Philippine Independence" who participated in drafting and
signing a constitution for the "phillppine Puppet Republic."
JUAN A. SARENAS - REPRESENTATIVE
POLITICAL SERVICE TO PUPPET ALMINISTRATIONS
Puppet Assembly - Member from Davao Province September 1943.
Mayor of Davao City - August 1944.
GEORGE K. TAIT - REPRESENTATIVE
POLITICAL SERVICE TO PUPPET ADMINISTRATIONS
Puppet Assembly - member from Mountain Province September 1943.
LEON VALENCIA - REPRESENTATIVE
POLITICAL SERVICE TO PUPPET administrations
Puppet Assembly - Member from Balacan September 1943.
JOSE OZAMIZ - SERATOR
POLITICAL SERVICE TO PUPPET ALMINISTRATIONS
Puppet Assembly - Member from Mizamis Occidental, September 1943.
JOSE FUENTABELLA - REPRESENTATIVE
POLITICAL SERVICE TO PUPPET ALMINISTRATIONS
Puppet Assembly - Member from Camarines Sur, September 1943.
- 15 SENORA ELISA R. DE OCHOA - REPRESENTATIVE
POLITICAL SERVICE TO PUPPET ADMINISTRATIONS
Puppet Assembly - Member from Agusan - September 1943.
DATU UNCALINGAN PIANG - REPRESENTATIVE
POLITICAL SERVICE TO PUPPET ALMINISTRATIONS
Puppet Assembly - Member from Catabo - September 1943.
EUGENIO PEREZ - REPRESENTATIVE
VOLUNTEERS LIMEDIATE COLLABORATION (JANUARY 1942)
One of 34 prominent Filipinos who addressed a joint letter to the
Commander in Chief of the Imperial Japanese Forces in the Philippines
on January 23, 1942, offering their support to the enemy
authorities.
POLITICAL SERVICE TO PUPPET allinistrations
Council of State - Member January to June 1942.
JOSE ZULUETA - REPRESENTATIVE
VOLUNTEERS IMMEDIATE COLLABORATION (JANUARY 1942)
One of 34 prominent Filipinos who addressed a joint letter to
the Commander in Chief of the Imperial Japanese Forces in the
Philippines on January 23, 1942, offering their support to the
enemy authorities.
POLITICAL SERVICE TO PUPPET ALMINISTRATIONS
Council of State - Member January to June 1942.
- 16 JOSE VELOSO - REPRESENTATIVE
POLITICAL SERVICE TO PUPPET ALMINISTRATIONS
Council of State - Member January to June 1942.
147
FOREIGN ECONOMIC ADMINISTRATION
Copy to Hit
1/20/75.1
WASHINGTON 25, D. C.
January 19, 1945
Dear Secretary Morgenthau:
Leo Crowley asked me to send you the
attached copy of the memorandum on the French
Lend-Lease Agreement.
Sincerely yours,
Docar Cox
The Honorable
The Serretary of the Treasury
Washington, D. C.
148
MEMORANDUM TO THE PRESIDENT
After further discussion and consideration of the lendlease arrangements which this Government should enter into with
France, the Foreign Economic Administration, State Department and
the Treasury Department recommend that an agreement should be
proposed to the French similar to the lend-lease agreements with
Britain, Russia, China, and other lend-lease governments.
We feel that such an agreement would be preferable in a
number of respects to the earlier agreement which was under con-
sideration last summer when it appeared that there might be an early
end to the war in Europe. The principal advantages of the usual form
of lend-lease agreement would be:
1. It would create the least domestic and foreign
controversy since it would be in the precise pattern of
past land-lease agreements.
2. It would emphasise that the United States is
treating France on a par with our other fighting Allies.
3. It would retain in the United States Government
complete flexibility as to the supplies and services
which would contribute to the prosecution of the war and
would actually be made available. This flexibility has
149
-2- -
been proven by experience to be of the utmost importance
in view of constantly changing war conditions. Under the
existing lend-lease agreements, which are substantially
identical, the administrative decisions have varied from
country to country and have changed from time to time as
circumstances and our national interests may require or
make desirable.
4. It would leave for separate consideration and
negotiation, as with the Soviet Union, the question of a
3(c) type lend-lease agreement which would provide for a
commitment to pay in cash or on long term credit for
specific supplies such as long-life capital goods.
We feel that France is and can increasingly become a major
base of operations for the United Nations and that it is in our
interests to have France's resources utilised to the fullest in
order to speed the defeat of the Axis. France has facilities,
resources and manpower which can and should be utilised for this
purpose, but to contribute most effectively to the common war, she
will require additional supply assistance from the United States.
We believe that we can best mobilise France for the defeat of the
common enemy through arrangements similar to those we have with our
other Allies.
If this proposal meets with your approval, negotiations for
such an agreement-similar to the ones with Britain, Russia and China-
150
-3will go forward with the French authorities.
After the Master Land-Lease Agreement is negotiated with
and signed by the French, the State Department, the Treasury
Department and the Foreign Economic Administration will jointly
work out with the French the major lines of the non-munitions
program in the light of the status, actual and prospective, of the
French gold and dollar balances. In other words, the United States,
acting through the three interested agencies of the United States
Government, should determine the extent to which we deem it appro-
priate that the French should use their gold and dollar resources
in meeting their non-munitions requirements and the lend-lease aid
to them should be programmed accordingly.
Before the negotiations start with the French on the Master
Land-Lease Agreement, they should be advised that the non-sumitions
program under the agreement will be carried out along the lines
suggested above.
State Department
Treasury Department
Approved:
O
Foreign Economic Administration
151
Treasury Department
Division of Monetary Research
Date 1/19/45
To:
1943
Mrs. McHugh
From: L. Shanahan
In response to your request for
identification of the appended
document:
The Secretary requested this informa-
tion at meetings in his office on
Nov. 10, 1944 at 10:30 (U.S. group)
and 11:30 a.m. (combined group).
(Book 793)
Sir Robert Sinclair attended a meeting
in the Secretary's office on Nov. 17th,
at 4:00 p.m., which was the only time
he was present after November 10th,
so he must have handed the document to
the Secretary at that time.
(Book 796)
152
TOP SECRET
EFFECTS OF MUNITIONS AGREEMENTS ON BRITISH MANPOWER
(NOTE FOR HON. HENRY MORGENTHAU, JR.)
You asked for our estimate of what relief the supply
of munitions which has recently been negotiated would be likely
to afford to the U.K. manpower resources in the first year of
Stage II. The attached statement gives a statistical summary of
the outcome of these discussions. But I would exphasise that it
1.
is statistical and that it does not purport to bring out certain
important considerations of a general character to which allusion
would have to be made in any formal Report.
2.
It will be seen that provision has been made, or
financial cover agreed, for 82% of the requirements which we
originally submitted, and for 98% of our requirements as they
finally stood after discussion between the representatives of the
Service Departments on both sides.
3.
There are, however, some uncertainties which cannot be
ignored, and 17% of the total financial provision is for items which
clearly are, or are likely to be, in short supply and for which
therefore, there is no firm commitment to supply.
4.
The main document submitted to you, entitled "British
Requirements for the first year of Stage II" showed in Annex C the
proposed distribution of our manpower and the stringency that is
expected in manpower supplies during Stage II; and in Chapter I the
point was made that if, as a result of these discussions, the
United Kingdom had to assume a greater proportion of the production
of some items than had been planned, then she would have to be
relieved to a corresponding extent of the load in other items.
A very large proportion of our requirements from the United
States are, however, for items of American type which cannot be
made in the United Kingdom in the time available, (because there is
5.
no capacity existing to make them), and for which there is no
fully adequate substitute of British type.
/We
TOP SECRET.
6.
153
2.
We have gone very carefully through the list of items
which the U.S. Departments have found themselves unable to "accept
for procurement", and have consulted London to confirm the poss-
ibilities or impossibilities of British production. The result is
that we can say that the Agreements reached here will impose an
additional load on United Kingdom production roughly equivalent
to one year's output of 50,000 workers.
7.
That is, of course, a relatively small figure. It
represents less than 2% of our planned munitions labour force in
the first year of Stage II. But it is by no means negligible in
relation to the increase it might be possible to achieve in that
year in the average number of workers engaged in Exports, or
Building, or in Manufacturing Industry for the Home Market. The
target increase for all three is no more than 1,170,000, which
may well be reduced by something of the order of 500,000 because
of the deficit on our existing allocations and the likely increase
of unemployment above the present exceptionally low level of 100,000.
8.
For that reason we hope that if later on it should
become evident that more of certain items than is now included
in the agreed programmes could be supplied from the United States
and their supply would go some way towards reducing this additional
load on the U.K. manpower, we should be free to discuss any such
cases on their merits with the Departments concerned.
9.
In terms of dollar values, the financial provision that
has been agreed represents rather under 50% of the comparable figures
for munition lend-lease in 1944.
10.
We have attempted to calculate the equivalent in British
manpower of the munitions aid which has been promised to us. If it
were the case (which it is not) that all the supplies covered in
these Agreements could have been made in the United Kingdom, we would
/estimate
154
-3-
estimate that they would represent the output of approximately
900,000 British workers for one year (because of differences of
output per head the figure of U.S. workers employed would be very
substantially less). Since, however, most of the items could not,
in the time available, be replaced from production in the United
Kingdom, to use such a figure would be wholly misleading. We
believe that the value of the aid which the United States is
providing to us is more truly measured by the fact that thereby
we are able to put more men into our Armed Forces and to increase
their striking power, so helping to shorten the war and save lives.
Misuiden
17/11/44
155
FINANCIAL SUMMARY OF MUNITIONS AGREEMENTS
TABLE I
ANALYSIS OF REQUIREMENTS AND ACCEPTANCES
(Covering only the Items included in Original Submission)
($ MILLIONS)
Ground Army F.E.A. Air Navy
(a) Requirements
(Original Submission)
(b) Net Withdrawals
before Negotiations
(c) Net Withdrawals
during Negotiations
769
Requirements
-
36
80
(d) Differences between
U.K. and U.S. Prices
(e) Remaining
27
-
1832
416
3094
54
64
154
141
54
275
80
-
75
-
5
Total
648
72
1562
298
2585
604
107
1312
204
2227
205
20
225
74
74
298
2526
(f) Accepted
Items
(11) Additional
general Provisions
(111) Value of Ships
-
for which U.K. will
bid *
(iv) Total
604
107
1517
-44
+30
-45
.
(g) Not accepted
-
The figure of $74 millions is included
to cover U.K. bids for ships and craft
which are not accepted but which are
subject to assignment.
-
(1) Total of individual
-59
*
156
FINANCIAL SUMMARY OF MUNITIONS AGREEMENTS
TABLE II
$ millions
(1) TOTAL VALUE OF ORIGINAL SUBMISSION
3,094
(2) Differences between U.K. and U.S. Price
Calculations
80
(3) Net withdrawals before detailed
discussion
154
(4) Net withdrawals during detailed
discussion
275
(5) TOTAL VALUE OF U.K. REQUIREMENTS WHICH
"STOOD AT THE END OF DISCUSSIONS
2,585
(6) ACCEPTANCES
(a) Accepted for Procurement
without qualifications
1827
(b) Accepted for Procurement
but subject to review in
six months
18
(c) Accepted for Procurement
subject to further
detailed information
244
(d) Items in Short Supply for
which no specific procurement
for U.K. is possible and on
which it is agreed that we
must put in our bids before
C.M.A.B. or Combined Boards
(e) Items for which no detailed
provision is made, but which
are covered by a general provision for possible additional
production and assignment
(see (g) of Table I)
TOTAL OF ACCEPTANCES against
items included in the Original
212
225
2,526
Submission
(7) NOT ACCEPTED
59
-2-
157
FINANCIAL SUMMARY OF MUNITIONS AGREEMENTS
TABLE III
TOTAL OF U.S. ACCEPTANCES
(at U.S. Prices)
$ millions
Total U.S. Acceptances against
Items included in Original Submission (a)
Provision for Spot Items and New
Developments
(b)
2,526
145
Provision for Ship Repairs and Certain
Naval Items not included in Table II
35
Provision for Aircraft Modifications
Handling and Delivery Charges
131
2,837
(a) A figure of $74 millions is included
to cover U.K. bids for ships and craft
which are not accepted but which are
subject to assignment.
(b) Includes $70 millions of the $200 millions
in the Air Agreement to cover Spot Items
and additional deliveries - See Tables I
and II.
TABLE IV
DIVISION OF U.S. ACCEPTANCES BY DEPARTMENTS
at U.S. Prices)
$ millions
War Office and Ministry of Supply
Air Ministry, M.A.P. and F.A.A.
Admiralty (a)
761
1,718
358
2,837
Note:-
(a) See footnote (a) of Table III
-3-
RESTRICTED
158 -
OFFICE OF STRATEGIC SERVICES
WASHINGTON, D.C.
Hise tool
cablehome
January 19, 1945
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Treasury Building
Washington, D. C.
My dear Mr. Secretary:
Thank you for your letter of January 16th,
referring to the material which I forwarded to you.
I am enclosing two later messages received by radio
telephone from Bern, and hope that they may be of
some small interest to you.
I am sorry that the earlier material trans-
O
mitted to you was not handled in such a way as to
indicate that adequate safeguards should be taken in
the Treasury mail room. According to the Security
regulations and practices of this office, and, I believe, of the armed services, material classified
"restricted" can properly be transmitted to another
Government agency in a single envelope which bears
no classification stamp.
However, I appreciate your making the point
which appears in your letter of January 16th to me,
and will hereafter make sure that this material is
transmitted in double envelope.
Sincerely yours,
Rutellin
Putze(11, Jr.
Lt. (j.g.), USNR
Asst. Executive Officer
RESTRICTED
159
House
Form ORR-68
(Revised)
OFFICE OF STRATEGIC SERVICES
OFFICIAL DISPATCH
DATE 18 January 1945
,267
FROM Berne
PRIORITY
HBG
ROUTINE
DEFERRED
TO
DIRECTOR, OFFICE OF STRATEGIC SERVICES
DISTRIBUTION
(FOR INFORMATION)
(FOR ACTION)
RECEIVED IN PLAIN TEXT
RESTRICTED
GERMA NY
The Russian offensive has made a deep impression on Germany.
Communiques and reports of the German military critics have never been
more somber. Apparently now, in contrast to some months
made
to hide
from
the German
the of
tempt is boin
people
ago,
seriousness
no real
the situation. Breeks in the line are frankly admitted. Also the German,
rather than the Russian, communiques are often the first to give the details of the death of the Russian penetration and of the loss of important
cities.
All this fits in with the line of propegenda for which Goebbels has
been ao carefully preparing the people. Now it is not 8 war for supremacy,
but a wer for survival, It is a war against the invader at the frontier,
and against an invader -- or rother, three invaders -- who, according to
Goebbels, have voved to destroy, partition, and enslave the Germen people.
To whip the people up for such a war, Goobbels uses unsparingly bad news
when it suits his purpose. He is no longer frightened of it. To a oartain
extent. it is grist to his nov. mill.
AS the threat to alleais and & part of Germany becomes acute in
the East, the German military authorities must be asking themselves wast
fronts must be secrificed in order to try to create e new stabilized line
somewhere. Norway and Italy may well be the first theaters from which German withdretals will start. Several divisions have reportedly gone from
Italy towards Vienna already. But the forces in these thecter will not
suffice, and soon the High Command will be forced to decide whether to try
to hold the east or west front to the end. And the ensver to this denends
upon whether they would prefer to have the Russians or the Americans and
British first occupy the country and impress their mark upon the occupation;
whether they would prefer to fall into Russian or Anglo-Saxon bands. Here
the views are likely to be differing. Old-line conservative ebrascht
RESTRICTED
160
PAGE
OBS Form,698
2
OFFICE OF STRATEGIC SERVICES
RESTRICTED
OFFICIAL DISPATCH
REF. No. 267
FROM
Berne
TO DIRECTOR, OFFICE OF STRATEGIC SERVICES
RECEIVED
officers would probably prefer the West. The younger, more Nazi, officers
would prefer the bust as offering the grester likelihood of being able to
continue in their profession. In the Party itself there is also 80.00
division. The radical wing would prefer Russia. Others would prefer the
most, probably on the theory that 0 trial by the easy-going and quick to
forget Anglo-Saxons is preferable to the risks of quick liquidation at
Russian hands.
while such speculation is probably going on, it seems likely that
the men around Hitler and Himmler are preparing for the possibility of a
last stand in the inner German fortress of the Bavarian and Austrian Alps,
playing their last card, namely, that when the Ruosians and Anglo-Saxons
actually meet somewhere in Germany there will be such dissension among
them that the Nazis in the mountains, if they can hold out long enough,
can still away something from the wreckage or at least choose to vhom to
deliver themselves.
This idea of a defense in a mountain fortress is in line with the
general complex of the whole National Socialist movement and the fanat101sm of the Nazi youth. Hitler and his small band of brigands, who started
in the beer-hall of Munich, may find their end not for away in the Beverian Alps, after having laid most of Europe in ruins.
RESTRICTED
161
Form ORB- is
(Revised)
OFFICE OF STRATEGIC SERVICES
OFFICIAL DISPATCH
DATE 16 January 1945
FROM
$266
Berne
IE:G
PRIORITY
ROUTINE
DEFERRED
TO
DIRECTOR, OFFICE OF STRATEGIC SERVICES
DISTRIBUTION
(FOR INFORMATION)
(FOR ACTION)
RECEIVED IN PLAIN TEXT
GERLANY
1. A report recently received from Germany contains the estimate
that 20% of the German arnament industry has gone underground. Those under-
ground factorios, the report states, are often constructed in the mountainour parts of Germony, Thuringia, upper Bavaria, etc. This report also states
t t more and more factories are being built under the ruins of bombod-cut
cities.
The Germans consider that it is unlikely that tho Allics will again
bomb the wreckage of these cities, Also, it permits them to uso the underground systems which exist in large citics, and 1 pormits the uso of the
workers who still find lodgings in the collars of their bombod-out homes
in the larger citios.
This report is as yot quito unconfirmed and may well be only 14
projoct rather then n program already reclised.
2.Goebbola' article last wook in das Potch impressed MO as particulorly interesting. It goos back to one of his old thouse, namely, the social
revolution through which Germany has evolved as the antagonist of the "rlutocratic" West. In roading this article, one wonders whother he 1s trying
slowly to build a bridge to what has always been his each-foe, Soviet Russic.
Horo 1s a summary of the article:
More than in most of the past vars, political idoologies oro the
basis of this war and, even though they mcy bo overshndoved by military
events from time to time, they always retain their undiminished dynamic
force. Our own side of the struggle has the adventage that its objectivos
are entirely uniform, so that no divergencies are to be found, That is
certainly not the case in the anomy camp, as shown by many political and
military events. It would be woll, however, not to overestimato the diffor
onces among our enomies, because the will to destroy the Roich and wipe
out our people is so predominant with the enomy that it therate all other
RESTR
ED
162
PAGE
OSS Form 69a
OFFICE OF STRATEGIC SERVICES
OFFICIAL DISPATCH
REF. No.
FROM
Berne
266
TO DIRECTOR, OFFICE OF STRATEGIC SERVICES
RECEIVED
16-39301-1
REST
objectives; but those differences do exist.
In those countries whose people have no clear political Weltanschauunk, and consequently are unable to discover any real myth (?) in this
gigantic struggle, the coming peace will bring a veritable avalanche of
political divergences. The age of plutocracy is definitely finished, even
in the countries still run and governed according to that classical example,
A march towards a social community among the peoples is advancing throughout
the world. After the war, it will assert itself with elementary forco in
all countries. We ourselves will not have to learn much when that timo comes,
for we entered this war for the salvation of all those ideals which are
slowly but surely forcing their way to the surface in the groat and costly
battle of today. National Socialist Germuny will be not only the military
but also the moral victor of this war, and the reason for that is that
we are not seeking to conquer a Woltangehaumg but to defend one. We are
far ahead of therest of the world. That accounts for the magnificent steadfastness and political morale of the German people during the war.
This war is a social revolution. It will be won by the people. We
oct from its end a life worthy of human beings and, therefore, worth
living -- a firm foundation for the growth and future of their families
€
and children.
REST TED
INCOMING TELEGRAM
No. 91
Cd
From Dr. T. V. Soong
For
Chungking
Secretary Henry Morgenthau
Rec'd
House
Jan. 18, 1945
M
.
Sent
Thank you for your telegram and letter. My only purpose is
to see China emerge united and democratic. Condition since then is
whole hearted cooperation and friendship between our two countries.
Very glad Mr. Adler has returned. I intend keep constant touch
with him so that you will be kept fully informed and consulted.
Grateful to you and Mrs. Morgenthau for kind attention to my
family.
00 - Secretary Morgenthau
164
2871 WOODLAND DRIVE
WASHINGTON, D.C.
Jan. 18, 1945
Dear Mr. Secretary,
I received a telegram from Dr. Soong at Chungking
which I hasten to send to you.
Yours truly,
he than
H. C. Chun
Secretary to Dr. T. V. Soong
Mr. Henry Morgenthau
Secretary of the Treasury
Washington, D. C.
9
165
CORRECTION
RA
January 19, 1945
This telegram must be
closely paraphrased before being communicated
to anyone (SECRET or a Government agency.
Telegram from Chungking number 74 dated January 17,
9 a.m. page 2 line 23 delete longer pr (#) terest"
insert "longer. TV is maintaining a lively interest" so
as to read "will not keep his present position much
longer. TV is maintaining a lively interest in the
financial Etc".
DIVISION OF CENTRAL SERVICES
Note:
Correction from Amembassy Chungking
MEV
166
THE FOREIGN SERVICE
OF THE
UNITED STATES OF AMERICA
Cairo, Egypt, January 19, 1945
UNRESTRICTED
No. 494
Subject: Welfare and whereabouts of Mrs. Bick SCHNARZWELD.
The Honorable
The Secretary of State,
Washington, D.C.
Sir:
I have the honor to enclose a copy of a letter received from
the Director of Displaced Persons, Balkan Mission, UNRRA, together
with its enclosure from Mrs. L. Schattner, "Gan Hersel", Richonle-Zion, Palestine, requesting information as to whether her
mother, Mrs. Bick Selmarsweld, is among the refugees from Poland
who were evacuated to the "Oswage" and "Fort Catario" camps.
The Department may wish to conduct an investigation in the
premises and inform lire. Schattmer of the result through the
American Consulate General at Jerusalem.
Respectfully yours,
For the Minister:
Ralph Miller
American Consul
Enclosures
Copy of letter from UHRRA
together with its enclosure.
Copy to American Consulate General
at Jerusalon.
Sent to Department in esalid.
RM/ym
File No. 320
167
AIR MAIL
Enclosure to despatch No. 494 dated January 19, 1945
from American Legation, Caire.
UNITED NATIONS RELIEF AND REHABILITATION ADMINISTRATION
8 Sharia Dar E1 Shifa - Garden City Cairo
The Honorable S. Pinkney Tuck,
American Legation,
CAIRO.
My dear Mr. Minister,
I an transmitting herewith a copy of a letter dated 29
December 1944 from Mrs. L. Schattner concerning her mother who
she believes my have been transferred to a refugee camp at
Fort Cataria, New York.
Insemuch as this transfer and the administration of the
camp is an operation of the Government of the United States,
I believe you will wish to forward Mrs. Schattner's letter to
the appropriate agency of your Government in order that approprinte reply may be made to her.
I an sending a copy of this letter to Mrs. Schattner.
Sincerely yours,
(Signed) C.M. Pierce
C.M. Pierce
Director
Division on Displaced Persons
Balkan Mission.
Enclosures
Copy of letter, as above.
o
168
-2-
AIR MAIL
COPY
Mrs. L. Schattner
"Gan Hernel"
Rishon-le-Zice
PALESTINE
29.12.44.
UNERA HQ
Dear Sirs,
Today I've been reading an old "Illustrated News" dated
14. 10. 44 and was very impressed by an article describing the
arrival of Refugees in America from Concentration Campa in
Poland. As my mother was one of those unfortunates to be
deported to a concentration camp in Poland from Austria, I
wonder if she was one of those illustrated arriving as campa
in the places mentioned in the article, namely, "Oswega" and
"Fort Ontario".
If it should be at all possible for you to give me any
information of her probable whereabouts I should be extremely
grateful. The following details I have and hope they will
assist you.
Married Names SCHWARZWELD
Maiden Name: Bick
Date she became a widows 1918
Last known address: Leopold St. 6/8, e/o Mrs. Weinstein,
Vienna.
Date of birth: 16. 7. 1881.
Names of all childrent Anna, Adolph, Mary, Paula, Lis.
My details area
Names Schattner
Relations Daughter
Ages 32
Date of births 24. 12. 1913
Profession in Austrias Shop Shop Assistant
Date of marriages 29. 6. 34
Present address as at head of this letter.
Thanking you in anticipation. I shall remain yours
very sincerely, (Signed) MARY SCHATTIER.
169
CABLE TO WINANT, LONDON, FOR MANN FROM WAR REFUGEE BOARD
Reference your No. 377, January 11, with respect to Dutch Labor
project.
McClelland is being authorized to transfer Swiss franc equivalent
of $165,000 to Dutch Minister in Bern. This sum is total of all remittances to Switzerland made to date by Queen Wilhelmina Fund for
this specific project. Adequate assurances have now been given by
the Netherlands Government through Netherlands Embassy in Washington
that local currency equivalent of $90,000 has been made available
to labor groups in Holland and that local currency equivalent of
$75,000 will be made available to labor groups in Holland as soon
as the transfer of $165,000 to the Dutch Minister in Bern has taken
place.
Labor groups here are in full agreement and request that-you
advise Oldenbruck.
THIS IS WRB LONDON CABLE NO. 39.
10:30 a.m.
January 19, 1945
170
ALE
January 19, 1945
true reading only by
9 p.m.
Distribution of
special arrangement.
(SECRET #)
AMERBASSI
LONDON
441
The following for Mann is WRB 39.
Reference your No. 377, January 11, with respect to Datch
labor project.
McClelland is being authorised to transfer Swiss frane
equivalent of $165,000 to Dutch Minister in Bern. This sun is
total of all remittances to Switserland make to date by Queen
Wilholmine Fund for this specific project. Adequate assurances
have now been given by the Netherlands Government through
Netherlands Embassy in Washington that local currency equivalent
of $90,000 has been unde available to labor groups in Holland
and that local currency equivalent of $75,000 will be made avail.
able to labor groups in Holland as soon as the transfer of
$165,000 to the Dateh Minister in Bern has taken place.
Labor groups here are in full agreement and request that
you advise Oldenbrook.
STETTINIUS
(GIN)
WRB:
1/19/45
BC
WE
NO
SEP
171
CABLE TO AMERICAN EMBASSY, PARIS, FROM WAR REFUGEE BOARD
Please deliver the following message to Dr. Joseph Schwarts from
M. A. Leavitt, American Jewish Joint Distribution Committee:
QUOTE FOR REASONS WHICH HAROLD LINDER WILL EXPLAIN TO YOU
IN DETAIL WE HAVE ASSIGNED RICHARD PLAUT TO NORTH AFRICA.
PENDING YOUR DISCUSSION LINDER PLEASE ACHEPT THIS WITHOUT
QUESTION. WE ENGAGED SAUL ELGART FOR ASSIGNMENT FRANCE AND
HE WILL BE AVAILABLE AFTER FEBRUARY 15th. FISHZOHN DEPARTING
NEXT WEEK. PERLMAN NOT YET DECIDED WHETHER ABLE RETURN
OVERSEAS DUTY
L):
10:30 a.m.
January 19, 1945
UNQUOTE
CABLE TO AMERICAN LEGATION, LISBON, FROM WAR REFUGEE BOARD
Please deliver the following message to Robert Pilpel, 242 Rua Aurea,
Lisbon, from M. A. Leavitt, American Jewish Joint Distribution Committee:
QUOTE AWAITING SCHWARTZS REACTION OUR CABLE BUDGETARY GRANTS
JANUARY FEBRUARY. ESTIMATES OUR INCOME ON WHICH BUEGET INDICATIONS FOR FIRST TWO MONTHS PREDICATED NOW APPEAR TWENTY PERCENT
TOO HIGH AND VIEW LARGE EMERGENCY REQUIREMENTS WHICH WE RECENTLY
AGREED MEET URGE UTMOST CAUTION IN MAKING COMMITMENTS AND THAT
SCHWARTZ GIVE US EARLIEST HIS IDEAS WHERE INDICATED AMOUNTS MAY
BE CUT UNQUOTE
THIS IS WRB LISBON CABLE NO. 129.
10:30 a.m.
January 19, 1945
172
CABLE TO AMERICAN LEGATION, LISBON, FROM WAR REFUGEE BOARD
Please deliver the following message to Robert Pilpel, 242 Rua Aurea,
Lisbon, from M. A. Leavitt, American Jewish Joint Distribution Committee:
QUOTE WE BECOMING INCREASINGLY CONCERNED VIEW MOUNTING
REQUIREMENTS ESPECIALLY PURCHASES OVER ABOVE ALREADY EXCESSIVE COMMITMENTS APPROVED FIRST TWO MONTHS STOP WE
PURCHASING HERE OVER $100,000 SUPPLIES FRANCE WHEREAS
SCHWARTZ AUTHORIZED PURCHASES SWITZERLAND $60,000 FOR
FRANCE $35,000 BELGIUM ACCORDING YOUR CABLE DECEMBER 28TH
PRESUMABLY AGAINST THAT APPROPRIATION STOP OUR 396
SHOULD HAVE INDICATED WE MAKING PURCHASES HERE STOP WE
AGREED PURCHASE FROM UNRRA $60,000 MEDICAL SUPPLIES RUMANIA
BULGARIA STOP ADVISE SCHWARTZ COMMITTEE NOW APPROVES
$100,000 FOR SUPPLIES LIBERATED SECTIONS CZECHOSLOVANIA ON
HIS RECOMMENDATION LONDON STOP IN ADDITION AMOUNTS SPECIFIED OUR PREVIOUS CABLE WE APPROPRIATED $150,000 AGROJOINT
$100,000 PASSOVER RELIEF $30,000 SPECIAL EMERGENCY GRANT
YESHIVOTH PALESTINE STOP FOR FEBRUARY WE TRANSMITTING
$100,000 SWITZERLAND REPRESENTING REFUND FROM GILBERT
SIMOND ANKARA WHICH SHOULD REDUCE SWITZERLAND REQUIREMENTS
THAT EXTENT STOP WE FEEL CASH REMITTANCES FOR FRANCE
BELGIUM BALKANS TEC SHOULD BE REDUCED TO EXTENT PURCHASES
BEING MADE FOR THOSE AREAS UNQUOTE
THIS IS WRB LISBON CABLE NO. 130.
10:30 a.m.
January 19, 1945
173
CABLE TO AMERICAN LEGATION, LISBON, FROM WAR REFUGEE BOARD
Please deliver the following message to Robert Pilpel, 242 Rua Aurea,
Lisbon, from M. A. Leavitt, American Jewish Joint Distribution Committee:
QUOTE MAGNES REQUESTED UNRRA MAKE AVAILABLE MEDICAL SUPPLIES
COMBAT EPIDEMICS ROUMANIA BULGARIA STOP UNRRA NOT POSITION
PRESENTLY OPERATE THOSE COUNERIES BUT READY PROCURE SUPPLIES
FOR OUR ACCOUNT VALUE $60,000 STOP CABLE US NAMES CONSIGNEES
ROUMANIA BULGARIA STOP ASSUME YOU WILL GIVE INSTRUCTIONS
THAT SUPPLIES SHOULD BE USED ON NONSECTARIAN BASIS IN AREAS
OF JEWISH CONCENTRATION UNQUOTE
THIS IS WRB LISBON CABLE NO. 131.
10:30 a.m.
January 19, 1945
174
CABLE TO JOHNSON AND OLSEN, STOCKHOLM, FROM WAR REFUGEE BOARD
Reference WRB No. 284 of January 9 (Department's No. 51). American
Relief for Norway has advised Board that plans to make remittances of
$50,000 each on January 15 and March 1 for operations under license No.
V-2152 have now been changed. Please advise Evensen and Tranmael that the
two remittances of $50,000 each are now expected to be made around
February 1 and early in the third quarter of April to June, 1945. These
two remittances will exhaust the $2001000 allocated by the labor groups
for relief in Norway for the budget year ending September 30, 1945. You
will be kept advised of any further allocation for this project.
THIS IS WRB STOCKHOLM CABLE NO. 294.
10:30 a.m.
January 19, 1945
175
BAS
Distribution of true
reading only by special
January 19, 1945
8 p.m.
arrangement. (SECRET-#)
ANLEGATION
STOCKHOLM
106
The following for Johnson is WRB 293.
In view of well-known German practice of exterminating Jews
surviving in any area previous to its evacuation, Department and
WRB consider it necessary once more to draw attention of Swedish
authorities to the danger faced by the Jewish survivors in German-
controlled territory.
Accordingly, it will be appreciated if you will visit Swedish
Foreign Minister, and urge that continued efforts be made from now
on to keep the surviving vistime of Nasi persecution alive during
the coming stages of hostilities in Europe. You should specifically
mention in this connection the four largest concentrations of Jews
in Amts territory known to exist, vis. Lods with 60,000 to 80,000
innates, Theresionstadt with 40,000 to 60,000 innates, cappa near
Vienna with 18,000 innates, and camp Belsenbergen with 9,000 innates,
and you should also mention any other localities or regions where
Jews are believed by you to servive.
In your conference with Swedish Foreign Minister it should be
made clear that this Government considers that frequent and extended
00: Miss Chauncey (For Seely), Ackermann, Akmin, Cohn, Trury,
Caston, Hodel, Marks, McGorrack, Pehle, Files.
176
-2 visits of Swedish Consuls to places and regions where Jews are con-
centrated constitute one of the most effective means of preventing
their further extermination. This method proved its efficacy in
Budapest where, thanks to the presence of Swedish personnel, many
lives appear to have been saved.
More particularly, in view of large number of relief parcels
recently reaching camp Belsenbergen, with the assistance of
Swedish YMCA and Red Cross, please urge upon these organizations
the desirability of their delegates being stationed in or sent on
an extended visit to that camp, to assist in the distribution of
such parcels. You may explain informally that this suggestion is
made in the light of the above considerations with a view to safeguarding the lives of over 9,000 inmates reported to be in Belsenbergen.
Furthermore, please emphasise to Foreign Minister the mounting
evidence of confusion among local German officials and their increase
ing accessibility to psychological pressure seeking to dissuade them
from executing extermination policies ordered by certain German
authorities, and urge that full advantage be taken of this state of
mind in the interest of saving lives, through unofficial as well as
official channels.
Please endeavor to make clear to Swedes that the activities
suggested above should be actively pursued as long - the danger
continues.
177
.3Please advise Department and WRB of Swedish reaction.
The following from WRB for Minister Johnson and Cleens
It would be helpful if you inquired at frequent intervais
what specific action Swedes are taking to carry out the above
suggestions.
In view of the situation as outlined above and in view of
recent reports indicating effectiveness of publicity and other
forms of psycological pressure upon German officials, you are
requested to make special efforts through all channels available
to you to increase such pressure with a view to safeguarding the
lives of the surviving victims of Nami persecution.
STETTINIUS
(GIN)
WRB:MMV:KG
1/29/45
NCE
SWP
178
January 19, 1945
MFC
Distribution of true
reading only by special
9 p.m.
arrangement. (SECRET w)
AMERGATION
STOCKHOLM
107
The following for Johnson and Olsen is WRB 294.
Reference WRB No. 284 of January 9 (Department's No. 51).
American Relief for Norway has advised Board that plans to
make remittances of $50,000 each on January 15 and March 1
for operations under license No. W-2152 have now been
changed. Please advise Evensen and Transmel that the two
resittances of $50,000 each are now expected to be made around
February 1 and early in the third quarter of April to June,
1945. These two remittances will exhaust the $200,000 allosa-
ted by the labor groups for relief in Norway for the budget
year ending September 30, 1945. You will be kept advised of
any further allocation for this project.
STETTINIUS
(GMW)
NOE
1/19/45
SWP
179
CABLE TO AMLEGATION, BERN, FOR MCCLELLAND FROM WAR REFUGEE BOARD
Will you please explore with Saly Mayer the possibilities of
securing Shanghai dollars for refugee relief through Swedish kroner,
particularly whether same equivalent Chinese dollars can be secured
through Swedish kroner as with Swiss france and whether such transactions from Sweden are permissible.
THIS IS WRB BERN CABLE NO. 369.
10:30 a.m.
January 19, 1945
180
CABLE TO AMLEGATION, BERN, FOR MCCLELLAND FROM WAR REFUGEE BOARD
Reference paragraph 1 your No. 7877 of December 1, 1944, concerning
Queen Wilhelmina Fund project.
You are hereby authorized to pay the Swiss franc equivalent of the
$165,000 you have on hand (total of four remittances made to you by Queen
Wilhelmina Fund) to the Duth Minister at Bern. Adequate assurances have
now been given by the Netherlands Government through Netherlands Embassy
in Washington that local currency equivalent of $90,000 has been made
available to labor groups in Holland and that local currency equivalent
of $75,000 will be made available to labor groups in Holland as soon as
the transfer of $165,000 to the Dutch Minister in Bern has taken place.
Interested groups here approve of foregoing authorization to you,
Oldenbruck and Mann in London are being advised.
Please inform Board when payment has been made to Dut ch Minister.
THIS IS WRB BERN CABLE NO. 370.
10:30 a.m.
January 19, 1945
181
CABLE TO AMLEGATION, BERN, SWITZERLAND, FOR MCCLELLAND
Reference is made to Department's 127 of January 9, 1945, paragraph
5.
A report on the situation of Jews in Hungary by Intercross, dated
November 15, 1944, and transmitted to WRB through Intercross representa-
tive in Washington, states on page 10 (our translation from French) as
follows:
QUOTE Our delegation in Budapest specifies that, in
accordance with a declaration of Hungarian Minister of
Interior, the Delegation of Intercross in Germany will have
opportunity to exercise control over the working conditions
of Hungarian Jewish workers placed under the supervision of
Hungarian authorities. Intercross has immediately charged
its Delegation in Germany to obtain opportunity to control
the camps of Hungarian Jewish workers. A confirmation that
German authorities accept such control has not yet been
received to date. UNQUOTE
Please urge Intercross to follow up this matter until satisfaction
is obtained.
THIS IS WRB BERN CABLE NO. 371.
12:15 p.m.
January 19, 1945
182
January 19, 1945
SH
Distribution of true
reading only by special
5 p.m.
arrangement. (SECRET W)
AMLEGATION
BERN
308
The following for McClelland is WRB 369.
will you please explore with Saly Mayer the
possibilities of securing Shanghai dollars for
refugee relief through Smedish kinner, particularly
whether same equivalent Chinese dollars can be
secured through Swedish kroner as with Swiss france
and whether such transactions from Sweden are permissible.
STETTINIUS
(GIN)
WRB:
1/19/45
WE
SWP
183
January 19, 1945
EAS
Distribution of true
reading only by special
Midnight
arrangement. (SECRET-N)
AMLEGATION
BERN
I
317
The following for McClolland is WRB 370.
Reference paragraph 1 your No. 7877 of December 1, 1944,
concerning Queen Wilhelmina Fund project.
You are hereby authorized to pay the Swiss franc equivalent
of the $165,000 you have on hand (total of four remittances made
to you by Queen Wilholmina Fund) to the Dutch Minister at Born.
Adequate assurances have now been given by the Notherlands Govern-
mont through Notherlands Embassy in Washington that local currency
equivalent of $90,000 has been made available to labor groups in
Holland and that local currency equivalent of $75,000 will be
made available to labor groups in Holland as soon as the transfer
of $165,000 to the Dutch Minister in Bern has taken place.
Interested groups here approve of foregoing authorization to
you. Oldenbruck and Mann in London are being advised.
Please inform Board when payment has been made to Dutch
Minister.
STETTINIUS
(GLW)
WRB:MMV:KG
WE
NOE
SWP
1/19/45
cc: Miss Chauncey ({For Sec'y.), Ackermann, Akzin,
Cohn, Drury, DuBois, Gaston, Hodel, Marks,
McCormack, Pohlo, Files.
184
KAB-479
PLAIN
Barn
Dated January 19, 1945
Rec'd 7:03 a.m., 20th
Secretary of State,
Washington.
381, Nineteenth
FOR WRB FROM MCCLELLAND
Kindly deliver following message from Field to
Uniterian Service Boston:
"Polish delegate representing OSE and UNISERCO left
for Paris January 1 for negotiation with Stiblin representative France reports favorable progress especially concorning independent UNISERCO work Poland expect send
UNISERCO delegation Poland near future for purpose preparing
work there under own agents have provisionally selected
Elsie Haus Swiss directress Zurich post-war course and
Tonia Leohtmaun Polish student same course long social
work experience France now working our office both
excellently qualified loyal and imbund proper spirit
Lublin decires advance delegation be purely Polish but
have grounds hope will not insist." 15.55
HUDDLE
RB
0
185
JMM-409
Bern
reading only by special
Dated January 19, 1945
Distribution of true
arrangement. (SECRET w)
Rec'd 11:39 p.m.
Secretary of State
Washington
389, January 19, 5 p.m.
FOR WRB FROM MCCLELLAND.
As stated in Legation's 7347 November 4 and 7877
December 1, 1944 I have been attempting for many weeks
clear up question contained in your 3729 October 31,
WRB 251, to effect that donors these Luxombourg funds
"are unable ask for clearance of request use funds in
Luxembourg unless informed what specific purposes
trustees have in mind". In light of recent and first
message from Krier and Clement and of correspondence
between Oldenbrook (who is in close touch with donors),
National CIO War Relief Committee and Labor League for
human rights and 068 in London which has come to my
attention it becomes clear that trustees still propose,
in keeping with donors original instructions and intentions, use this money for support and reorganisations
labor unions and relief to labor victime (and their
186
-2- #389, January 19, 5 p.m. from Bern.
families) of Nasi oppression in Luxembourg. Krier and
Clement accordingly urge Luxembourg funds I am still
holding (83334.45 Swiss france) be made available to
them for above mentioned purpose as promptly as possible.
I fully share and sympathise with their viewpoint and
therefore recommend that original license W 2232 issued
to Friends of Luxembourg Inc. be promptly amended
to permit remittance this money to Krier and Clement or
to their appointed agent in Switserland Jules Elter
Luxembourg Consulate Lausanne.
I gather that there is growing feeling on part of
donors that American Legation at Bern has obstructed
proper disbursement these funds by excessive red taps,
et cetera, an impression I an anxious to dissipate as
I have since really regretted continued lack of clear or
coordinated instructions regarding disposition to be
made of this money which should have been put to prac-
tical use long ago. Kindly attempt therefore expedite
amendment this license to permit expenditure funds in
(repeat in) Luxenbourg and inform me as soon as obtained.
HUDDLE
WSB
187
CABLE TO AMBASSADOR STEINHARDT AND KATZKI, ANKARA, FROM SECRETARY OF THE
TREASURY AND PEHLE, WAR REFUGEE BOARD
Reference your No. 2407 of December 26. The 2,000 gold sovereigns
you are now holding for the War Refugee Board should be sent immediately
by State Department pouch to the American Legation Cairo, which has been
instructed as to their disposition.
THIS IS WRB ANKARA CABLE NO. 137.
10:30 a.m.
January 19, 1945
188
CABLE TO STEINHARDT, ANKARA, FOR KATZKI FROM WAR REFUGEE BOARD
With reference to your 29 of January 6 the Board has not (repeat
not) been able to obtain permission for you to proceed to Rumania and
Bulgaria.
In view of this and in view also of the decreased possibilities
for rescue in the Balkan area, the Board would appreciate your
recommendations with regard to the closing of the War Refugee Board
office in Turkey and your return to Washington for consultation.
Andrews agrees.
In view of your 51 of January 11, it is assumed that if you
decide to close the War Refugee Board office in Turkey, Miss Bixler
will accept other employment in Turkey whereas Mrs. Henderson will
return to the United States. The Board has no (mepeat no) objection
to Miss Bixler's accepting other employment provided that this is
agreeable to you. It is the Board's understanding that no (repeat
no) certificate of availability will be required for Miss Bixler to
accept government employment with other American agencies in Turkey.
THIS IS WRB ANKARA CABLE NO. 138.
10:30 a.m.
January 19, 1945
189
NOT TO BE RE-TRANSMITTED
COPY NO.
SECRET
OPTEL No. 22
Information received up to 10 a.m., 19th January, 1945.
NATAL
1.
HOME WATERS. Yesterday evening gale over southern half
2.
MEDITERRANEAN. Coastal craft destroyed three E-boats
3.
ENEMY ATTACK ON SHIPPING. 18th. A 7219 ton ship mined
Eritish Isles reached hurricane force.
found stranded on Unie Island (S.E. of Pola).
Night 17th/18th. Patrol vessels engaged explosive
motor boats south of Monaco and sank one taking two prisoners.
and sunk in convoy off Zeebrugge.
MILITARY
4.
WESTERN FRONT. In the South, in face determined and
repeated enemy attacks with tanks and infantry from bridgehead
across Rhine north of Strasbourg, U.S. troops forced to give up two
small villages. Further north, heavy fighting continues round
Hatten and Rittershofen where U.S. forces have prevented enemy
breaking through Maginot defences and have inflicted heavy casual-
ties, Ardennes sector: U.S. forces launched strong attack across
river Sure yesterday morning between Ecternach and Wiltz where
progress from 2-3,000 yards made at several points. Northern
Sector: British attack made good progress and captured Echt but
thaw has now stopped all cross country movement.
EASTERN FRONT. East Prussian sector: Germans report
5.
large scale defensive battles this area. North Central Sector:
Russians announce capture fortress of Modlin (20 miles N.W. of
Warsaw) and also further advances N.W. towards East Prussia.
South Central Sector: Rapid progress south bank River Vistula
and important railway junction Lowicz taken. Southern Poland:
Russians now three miles from Craccw. Germans report (unconfirmed
by Russians) withdrawal between Vistula and Czechoslovak frontier
with loss of Tomaszow (S.W. of Warsaw) and fighting in progress
area Nowy Sacz (S.E. of Cracow). Southern Sector: Russians report Pest finally mopped up and only small part Buda in German hands.
6.
GREECE. 17th. ELAS evacuation from Attica, Patras
and Salonika continued satisfactorily.
7.
BURMA. In Kaladan Valley our forces outflanking
strong opposition in hills on left flank now four miles N.W. of
0
Liyohaung. In Central Burma unopposed advance reported to N.W.
outskirts Monywa and by 16th patrols had reached line some 15
miles north of Sagaing where in contact small enemy parties.
AIR
WESTERN FRONT. Night 17th/18th. 128 aircraft despatched: Magdenburg 72, Ruthen 011 Storage Plant 8, Bomber
Support 48.
18th. 114 escorted Fortresses bombed railway centre
8.
Kaiserslautern (287 tons), through cloud. SHAEF (Air) under 100
sorties due to weather
Night 18th/19th. 75 Bomber Command aircraft despatched
of which 56 attacked Sterkrade Holten Synthetic 011 Plant.
9.
MEDITERRANEAN. 17th. Weather unfavourable but 152
Mitchells obtained good coverage attacking bridges on Brenner
route and N.E. Italy,
10.
BURMA. 16th. 72 Liberators bombed two airfields
near Rangoon (203 tons).
190
January 20, 1945
MEMORANDUM FOR THE SECRETARY'S FILES:
Pursuant to Secretary Morgenthau's letter of
January 16, a conference was held in the Secretary's
office at 5:00 p.m. Friday, January 19, attended by
the following persons:
Secretary Morgenthau
General Rudenko
Mrs. Klotz
Captain Prishchepenko
Mr. Pehle
Mr. Kamensky
Mr. Bondarenko
Captain Prishchepenko acted as interpreter for
General Rudenko.
General Rudenko explained that he was disturbed
about the delays in connection with the proposed
deliveries of the extensions to Russian refineries
3 and 4. He said that reports from Russia indicated
that his Government was speeding up construction of
the refineries already delivered; at the same time
it appears that more and more delays are being encountered with respect to the extension to such
refineries. These extensions originally were to be
delivered on June 30, 1945, and General Rudenko
indicated that it now appears that delivery will be
made in September 1945, or later.
Secretary Morgenthau indicated that he would do
everything in his power to press for delivery of this
equipment on time. He asked Pehle to explain the action
already taken. It was explained to General Rudenko and
the others present that on January 16 the Secretary had
191
-2written to Mr. Crowley, Administrator of FEA, urging
that steps be taken to obtain a better priority rating
for this equipment and at the same time the Secretary
had written to the same effect to Mr. Krug, Chairman
of the WPB.
Secretary Morgenthau then went on to explain to
General Rudenko that he would personally intervene in
this matter in order to see that the Russians' needs
were met. He said that 11 he did not hear from
Crowley by Monday he would telephone him and follow
up on the matter himself. Secretary Morgenthau said
the Russians would be kept posted with respect to
progress on the matter and would hear from us next
week, by Tuesday at the latest.
Secretary Morgenthau said that he was "for" the
Russians because they were killing more Germans than
anybody else. General Rudenko replied that the great
offensive on the eastern front which was now under way
was using great quantities of American equipment for
which his Government was very grateful, and that he
appreciated very much Secretary Morgenthau's personal
interest in this matter.
future
192
January 20, 1945
3:15 p.m.
FOREIGN ECONOMIC POLICY BOARD
Present: Mr. D. W. Bell
Mr. Gaston
Mr. Luxford
Mr. DuBois
Mr. O'Connell
Mrs. Klotz
H.M.JR: I got that map that shows the kind of
territory where the Russians are now. It is all flat
country. It is very interesting.
MR. GASTON: North of the Carpathians.
H.M.JR: It is all absolutely flat country where
they are now.
MR. O'CONNELL: Any rivers?
H.M.JR: No. This General who was here yesterday,
Rudenko, thought they were following the valley of the
Oder, that they are right in that valley. They think that
would be the natural way to follow. But you see, they
have been trying down there around Budapest, and it looks
to me as though they are going to go the other way now.
MR. BELL: You think they are on their way?
H.M.JR: Certainly the Times dispatches which they
copied from the German radio--Polish-German radio--say
they are in complete collapse.
MR. BELL: Swell.
H.M.JR: I called, let's see, the whole nine-thirty
staff last night, and Bell and Pehle were the only ones
working after I came back from the White House.
193
-2MR. GASTON : I wonder where the rest were.
H.M.JR: I don't know, but the President signed
everything that I took over to him, which was the Bretton
Woods Message and the Committee of Four on Economic Policy
which he dated March 1. He said I should lock it away and
tell nobody. This is all highly confidential. Stettinius
raised the question about Crowley, and the President thought
something would happen to Crowley between now and the first
of March. He didn't know what, but I think he put the "X"
on him. (Laughter)
And at Cabinet, the Committee on Legislation, which
was Stettinius, Harold Smith, and myself--the President
added wallace's name which delighted me. It was a good
sign. It isn't clear in my mind--I am going to see
Stettinius in the next day or two as to whether the
Legislative Committee should be made public or not. The
President moved so fast. He was in a mood where I think
he would have signed anything.
MR. BELL: Was that in the form of an Executive
Order, or a memo?
MR. O'CONNELL: Memo to the President with a short
letter from the President. Wasn't there a letter from
the President?
H.M.JR: Well, I spoke to Stettinius for a minute
today, and he wants to begin to operate on that at once,
and then the President would say--but the one on the Committee of Four he dated March 1.
MR. O'CONNELL: That is an Executive Order.
H.M.JR: This is all confidential. Crowley called
Stettinius last night and asked him whether there was
something cooking, and Stettinius said, "I told him there
wasn't. That is right isn't it, because the President
said not until the 1st of March?"
o
I gave him my best baby stare, but I didn't say
anything. I wasn t going to comment on it. (Laughter)
194
-3I think they might get away with it on the phone, but not
I.
MR. GASTON: I don't know whether he was getting sig-
natures or what he was doing flitting from chair to chair
last night.
H.K.JR: Who?
MR. GASTON : Leo.
H.M.JR: I shouldn't repeat these things, but they
are interesting, and I know you people.
At four-thirty last night Jones had not yet been
notified, but I am confident he was today.
MR. BELL: He wasn't there, was he?
H.M.JR: He walked within two feet of me, and I
just took a glance.
MR. BELL: I looked for him.
H.M.JR: He wouldn't have known I was there. He
looked right through me, so I think he must have gotten
his letter, and the thing is, I think Wallace's nomina-
tion will go up Monday and you will never guess, unless--
I don't think I told them. Did I tell them last night
who is going to be the head of Rural Electrification?
I
am not going to have a guessing game, but you fellows could
sit here all day. Do you want to make a guess?
MR. GASTON: As to who is going to head Rural Electrifi-
cation?
MR. LUXFORD: Aubrey Williams?
H.M.JR: Yes. Now, who told you? (Laughter)
MRS. KLOTZ: The same guy that tells him other things,
I guess.
195
-4MR. LUXFORD: No, I just sensed that that should be.
MR. GASTON: We should have seen the connection
between him and Jim Patton, yes.
MR. LUXFORD: More than that.
MR. BELL: I think it was in the paper more than a
week ago--two weeks ago--saying he might get it.
MR. O'CONNELL: Is that right?
H.M.JR: Yes. It is a move in the right direction.
I saw John McCormack, and I told him with great
secrecy that I had this message, the President left it
with me. I would like to see him, Sam Rayburn, and Spence
Monday.
He said, "Go and tell Sam that now."
I said, "I don't think I will bother." So will you
remind me Monday to call him up and go up there and let
them see it, you see, and ask them when they think they
want it?
At first the President kind of said, "Oh, this is
corny, and this is this, and that is that, and he didn't
like it. Then as he began to get into it, he liked it
better. I almost made a little confession that I had
never read it.
MR. LUXFORD: I know.
H.M.JR: How do you know? I had a lot of time to
wait there yesterday, and I told him last night I was never
more tired in my life than last night, because I am not
used to success. So I was extra tired last night; I
didn't know how to take it.
MRS. KLOTZ: You put it a little differently. It
sounds a little better; you said you had steeled yourself
against failure, and when you met with success you couldn't
take it.
196
-5H.M.JR: That is true.
MR. LUXFORD: It sounds very encouraging.
MR. O'CONNELL: Dan and John Pehle were the only
people in the building when you came back from the
white House.
H.M.JR: The interesting thing was, I had ample
chance-- all these people wanted to see the President
after Cabinet, and I insisted on seeing him in his room.
See?
So I told Stettinius everything that I was going to
do, and particularly pointed out that we were using the
Treasury draft on the Economic Committee. I said, "I
haven't brought your draft along."
He said, "That is all right."
But on the other thing--have I told everything I
told you last night?
MR. BELL: I think you have.
H.M.JR: Mrs. Klotz?
MRS.
KLOTZ: I think so.
H.M.JR: Everything they should know, anyway.
MR. BELL: The highlights.
H.M.JR: I think I told them more than I should.
MR. O'CONNELL: On that point, Mr. Secretary, I
recall Stettinius indicated to you a while back he was
very anxious and willing to go along with you on the Foreign
Economic Committee, and willing to use our draft of the
Executive Order.
I was with Dean Acheson yesterday afternoon when
Stettinius came back from the White House. He called
197
-6Acheson in, and when Acheson came back he said that
Stettinius had told him that the President had signed our
draft of the Executive Order on the Foreign Economic Committee. And Dean also said that/for whatever sense it
may make to you, Stettinius had indicated to him you had
not brought the State Department draft of the Executive
Order with you, which, I suppose, is true. All it means,
I suppose, is that Stettinius was letting Acheson down as
easily as he could. It seemed to me entirely understandable, but Dean told me just exactly what I told you.
MR. DuBOIS: Stettinius is up to his old tricks.
H.M.JR: Supposing the thing was reversed. In the
first place, Stettinius wouldn't ask to see the President
first. I had to ask; I had to get him in the office.
Stettinius had a half hour there, and he could have told
him. If it had been reversed and he came with his, I
would have said, "Nothing doing."
MR. O'CONNELL: I think Stettinius was perfectly right
so far as keeping faith with you is concerned, and at the
same time he has his own problems with Mr. Acheson and
others.
MRS. KLOTZ: And he works differently from what you
do, that
is all.
H.M.JR: The interesting thing was, I was forthright in giving the President what I wanted. Stettinius,
evidently, was worrying about his own people and didn't
want to say much. He let me carry the ball, with the result
that I got what I wanted. The President never treated me
nicer than he did yesterday. He was exceptionally nice
to me yesterday, no sarcasm.
Stettinius told the President what was in this Bretton
Woods Message. I sai d, "Oh, no, I don't work that way.
Please, let's give the President a chance to read this.'
I knew the President wasn't going to sign the message to
Congress without reading it. He read it very carefully,
but Stettinius wanted to just tell him what was in it.
wouldn t have been happy about it if the President had
I
198
7-
signed it. But he read it very carefully. I don't care
how he treats his people at home, just as long as he
doesn't go & round and try to take the President Acheson's
memo.
But if the thing had been reversed and he walked
over with Acheson S instead of mine-- but he told Acheson
he only came over with mine. Well, Acheson is no fool.
He must think, "After all, if there are two briefs, why
doesn't Stettinius have his own?"
MR. O'CONNELL: I only meant to indicate that
Stettinius was on the one hand playing fair with you, and
at the same time he had a problem with his own people.
MRS. KLOTZ: I think so.
MR. O'CONNELL: He did the sensible thing on both
sides.
H.M.JR: I don't agree with you, and I will tell you
why. If anybody in this room gave me a memo, see, and
I said, "All right, I will go to the President, let's
just say, and I come back and say, "I am awfully sorry,
boys, Stettinius appeared with the State Department memo;
I didn't have my memo and the President signed State's
memo," would they feel any better toward me?
MRS. KLOTZ: Yes.
H.M.JR: They would?
MRS. KLOTZ: But they would think the other fellow
was a SOB--and I shouldn't use that word--but anyway, that
is what they would have thought, the other fellow was
pulling a fast one.
MR. LUXFORD: I wouldn't have believed the story.
H.M.JR: They would have thought there was something
the matter with me. That is the whole point I am trying
to make. These fellows would say, "What's the matter
with Morgenthau? Why does he let Stettinius pull this
and not put up a fight? Morgenthau said, 'I am with
199
-8Luxford and DuBois. Now, I go over to the White House
and let the Acheson memo go through and say, "I am sorry,
boys, the only memo there was the Acheson memo and I didn't
do anything.
"
MR. O'CONNELL: I think Acheson knew what Stettinius
did, but I think that what Stettinius was doing was saving
Acheson's face as much as he could, and at the same time
Acheson knew very well Stettinius had agreed with you.
H.M.JR: The next time I go to the President, I am
going to do it, and you see what you think.
MR. DuBOIS: You won't feel as though your face
was saved.
MR. O'CONNELL: I don't work for the State Department;
I am not Dean Acheson. I am saying with the people involved
I could understand why he did what he did.
H.M.JR: You are explaining the mental processes that
Stettinius went through, and I am saying Acheson is nobody's
fool. And I am saying that he thinks that much less of
his boss.
MR. LUXFORD: Mr. Secretary, I would say further--
H.M.JR: There are two points of view.
MR. BELL: Did Acheson say this out in the meeting?
MR. O'CONNELL: He and I were in the room together.
Stettinius called him out. He didn't make any point of
it.
H.M.JR: Look at the way they have worn those chairs
out. It's their weight.
MR. O'CONNELL: What he did was tell me exactly what
Stettinius had finished telling him, and I was discussing
that.
o
MR. BELL: I thought maybe Crowley got some intimation
there.
200
-9H.M.JR: I told you what happened to Crowley last
night. He called Stettinius. You see, Stettinius didn't
want the President to sign that at Cabinet, the Foreign
Economic business; he wanted him to wait on Crowley, but
this was the last thing, I guess, the President did as
of the third term. It is the last action he took. And
I am reporting on the first day of the fourth term.
This is really interesting. That is most likely the last
Executive Order he signed as of the third term.
MR. LUXFORD: That is right.
MR. O'CONNELL: And he put Wallace in on the Legisla-
tive Committee.
MR. LUXFORD: There will be a holocaust sometime in
the White House when they find out you got that Order.
We used to have more trouble with them, couldn't have an
Order before they put a number on it. So I can imagine
there will be dismay some day when you walk in with a
signed Order.
H.M.JR: I walked into the Chief Clerk's office
yesterday; he wasn't there, but his assistant was. I
said, "I have a number of papers which the President pro-
perly signed, with copies.
He was very busy. I. said, "I am going to wait until
the President is out of town. Mr. Charles Bell will come
over with a copy of everything."
MRS. KLOTZ: And get the dates--those things have
been dated 1944, and they should have been dated 1945.
H.M.JR: I told them, so-MR. O'CONNELL: Our Legislative Committee--did he
put the Secretary of Commerce on that, the Secretary of
State, the Secretary of the Treasury, and the Director of
the Bureau of the Budget? Whichever he did, I take it it
is something that the examination even in the Government
would wait upon, what is going to happen to Mr. Wallace.
201
- 10 -
H.M.JR: Look, we have got to be terribly careful
on this thing because it is a very powerful cliquehere
in town that wants to kill it, a very powerful clique,
and we have just got to guard this thing until the right
time.
MR. BELL: We have seven weeks in which to do it.
MR. LUXFORD: I suspect it will be leaked.
H.M.JR: "Add Wallace after F.D.R. on the Legislative
thing.
"
MR. BELL: He just O.K.'ed it.
H.M.JR: He said, "O.K., but add Wallace.
MR. BELL: It is just an informal memo.
MR. GASTON : Nothing that is effective yet.
H.M.JR: It was the memo from the Treasury on the
proposed Legislative program, and he read it all through
but said, "O.K., but add Wallace."
MR. BELL: Smith knows about it. he told Stettinius.
H.M.JR: I didn't tell him he added Wallace.
MR. BELL: But I mean, you talked to Stettinius before-to Smith before you went to the White House. He said he
thought you ought to.
H.M.JR: He signed it. Yes, don't you believe what
you read in the column? I am very careful about these
things. Smith signed it.
MR. BELL: You told me you were going to have Stettinius
talk to him, but--
H.M.JR: Not only that, but it was my own insistance
that harold Smith be on this thing, and he had signed it
before it went to the President. Could it be more regular
than that?
202
- 11 MR. BELL: It is very regular.
H.M.JR: It surprises you.
MR. LUXFORD: Mr. Secretary, I just wanted to mention
that there is a good chance of that being leaked in the
next seven weeks, that this will be around the State Department no matter how you slice it.
MRS. KLOTZ: That is right.
MR. LUXFORD: Just like the German plan.
H.M.JR: As of last night I called him up.
MR. LUXFORD: Crowley?
H.M.JR: Crowley, yes.
MR. LUXFORD: That is a tip-off.
H.M.JR: The whole group knows it.
MR. LUXFORD: The whole group is going to scream
when they see a group like that controlling economic policy.
MR. O'CONNELL: Who will necessarily see it?
MR. BELL: Stettinius got all the copies; there are
no copies floating around.
did.
MR. O'CONNELL: Stettinius could tell Acheson, as he
MR. LUXFORD: Acheson drafted an order.
H.M.JR: And he was told it was turned down.
MR. O'CONNELL: But Acheson told me he was under very
strict injunction from Mr. Stettinius for whatever that
was worth. He did say several times he mentioned the
March 1 date and said Stettinius had stressed the importance
of nothing being said about it. And so what happens as
far as Acheson is concerned depends on how much credit
you get.
203
- 12 -
H.M.JR: It's like White said, why am I so calm in
the face of all the criticism of the Morgenthau plan on
which I have got a signed document by Mr. Churchill and
Mr. Roosevelt agreeing to the Morgenthau plan? I can
take it on the chin.
MR. DuBOIS: Did Harry bring you up-to-date at the
meeting yesterday on State?
H.M.JR: No, but before that, one other little tidbit -- I will try to tell this as it happened. Excuse me,
I am overtired, but I do remember something.
Before Cabinet Stettinius said to me, "Crowley wants
to see the President with you and me about French Lend-
Lease."
So I said quite hoarsely, "Well, Ed, if Crowley is
going to be there when we see the President, how could
we do this other business? Let's do it at Cabinet. What's
Cabinet for?" I said, "I don't want Crowley sticking
around. How are we going to get rid of him?" And I don't
know whether he wanted to get rid of him.
But anyway, he got Crowley to come over to our side
of the table, and he said, "We will do it right now."
Crowley handed me a memo and said, "Do you mind
signing this?"
I said, "well, I don't know. Has anybody in my
office seen it?"
He said, "I am absolutely sure that Oscar Cox has
cleared it with your people.'
MR. LUXFORD: With whom?
H.M. JR:
"
with your people."
So I said, "I am not questioning your word, Leo, but
I would kind of like to have the thing processed." 11
o
204
- 13 -
He said, "I am sure it is all right."
So I said, "Well, I only wrote to you and Stettinius
yesterday afternoon saying what we wanted, particularly
about the dollar balances of the French being considered,
and I think we sent a copy to you, Crowley, but I am not
sure."
He said, "Yes, Oscar Cox has a copy of it." I don't
know whether that is right.
MRS. KLOTZ: It is right, and I think they did--I
think Oscar Cox did speak to Glasser about it. Isn't
that the thing? Glasser should know.
H.M.JR: Get him on the phone; I will speak to him.
So I said, "What we want is the French dollar balances."
Well, they brought it up at the thing, and the President
was very, very sticky on French Lend-Lease. He didn't want
to go through with it at all.
( The Secretary holds a telephone conversation with
Mr. Glasser, as follows:)
205
January 20, 1945
3:31 p.m.
Harold
Glasser:
Hello.
HMJr:
Glasser.
G:
Yes, sir.
The memorandum that I sent to Mr. Stettinius
HMJr:
on Thursday on the French Lend-Lease.
G:
Yes.
HMJr:
Are you familiar with it?
G:
Yes.
HMJr:
Was Crowley furnished a copy of that?
HMJr:
I don't believe so. Oh, no. Mr. White gave
instructions that a copy was to go to Mr. Cox.
Yes. Well, that -- it did go?
G:
Yes.
G:
HMJr:
G:
You're sure of it?
I'11 have to check whether it went but I know
that Mr. White gave the instructions for it to
go.
HMJr:
Well, do you mind calling me back?
G:
All right, I will.
HMJr:
Right away.
G:
Yes, sir.
206
- 14 H.M.JR: Anyway, I won't go into the whole thing that
happened at Cabinet, but I did tell Crowley and the President I agreed, and then the interesting thing is, you
see, this memo came which Crowley wanted me to sign, but,
evidently we never did see it, because here Cox said, "Leo
Crowley asked me to send you the attached copy of the memo
of the French Lend-Lease agreement." He tried to get me
to sign this thing before Cabinet.
MRS. KLOTZ: I thought he saw it. Mr. Glasser said
he discussed it with Mr. Cox, a draft of the memo which
Crowley presented to Mr.-
H.M.JR: But an important thing like that--I mean,
Mr. O'Connell should see it.
MRS. KLOTZ: This came after the discussion.
H.M.JR: What I would like to know is--I am just
curious about this memo--was it ever in the Treasury?
MRS. KLOTZ: What is the date?
H.M.JR: This is the 19th.
MRS. KLOTZ: That came in today.
MR. DuBOIS: The President agreed to give him that?
H.M.JR: He finally agreed they could go ahead and
negotiate, but then--
MR. DuBOIS: I think it is a mistake myself, but--
H.M.JR: I have written a letter on it; it is going
out to Stettinius.
(The Secretary holds a telephone conversation with
Mr. Glasser, as follows:)
207 January 20, 1945
3:35 p.m.
HMJr:
Yes, Harold.
Harold
Glasser:
A copy was sent to Mr. Cox and we received an
acknowledgment this morning.
HMJr:
G:
Well, did it go -- when did it go?
Right after you signed it.
HMJr:
All right. Now, this memorandum that comes in
G:
Yes.
HMJr:
Let me -- it says, "Mr. Secretary: Leo Crowley
here from Oscar Cox
asked me to send you the attached copy of a
memorandum on French Lend-Lease agreement. "
G:
HMJr:
G:
HMJr:
G:
Yes.
I take it that it never was in the Treasury
before.
That's right.
But I also see from a memorandum here that
Harry White discussed this memorandum --was
that on the phone?
Harry White has been having discussions with
Oscar on the French Lend-Lease over the phone.
HMJr:
G:
HMJr:
Yes.
Now, whether -- what he's said to Mr. White,
I don't know.
But the point is, you see, Crowley tried to
get me to sign this memorandum before Cabinet.
G:
Yes.
HMJr:
I said, "This has never been in our shop before."
He said, "It was." Evidently it was not and he
sent it over after Cabinet. Is that right?
G:
I believe that's right, sir.
208
-2HMJr:
Well, I just wanted to get it straight.
G:
Fine.
HMJr:
I just wanted
G:
HMJr:
I'll check again and if that is not correct,
I'll call you back.
Yeah. But don't call me back unless it is
incorrect.
G:
That's right.
HMJr:
Right.
G:
Right.
209
- 15 H.M.JR: Now, who had this thing?
MRS. KLOTZ: I got that thing last night.
H.M.JR: All I would suggest is that a copy of it
go to White.
Crowley wants something in writing. I really didn't
want to sign that, but imagine his trying to slip me something like that.
Then also for the record, Jimmy Byrnes spoke up and
said that no Lend-Lease agreement should be entered into
with the French unless the Area Commander of the American
Army agreed to it.
Then Stimson sp oke up and said, "On shipping, you
now give them the ships and all the rest of the stuff.
I know you have given a lot of ships to them already. I
have been solicited, so I am perfectly willing to let
Gene
Monnet deal with Leo Crowley." It was very funny.
Jean
I said, "Yes" The President said--somebody said
something about Golden Monnet--s he said, "He is a great
friend of Henry's, an intimate friend.
Jean
I said that was true when Gene Monnet had his old
brandy, but he has run out of it now.
Stimson said, "That is right. I wouldn't do anything
for the second-class brandy.' "
MR. GASTON: No more of the four star?
H.M. JR: It was better than that. He used to have
beautiful French bottles. They held about a pint, and
the stuff was supposed to be one hundred years old.
MR. GASTON: It is Hennessy's Distilleries he is
connected with.
it has his own name on it. It belongs
to hisH.M.JR:
father'sNo,
family.
210
- 16 -
all.
Unless somebody wants to ask me something, that is
MR. BELL: Any limit on French Lend-Lease? Did he
get his two billion dollar promise?
H.M.JR: The way the President acted, and the way
Stettinius, when Stettinius saw the President aidn't
want to be bothered, cooled off immediately and left
Crowley by himself, I simply feel, having put myself on
record that I was for it--there's a funny thing--they
called up Harry almost twice a day. I rushed the letter
over on Lend-Lease to Stettinius, and Stettinius had never
read the letter. I am not going to blow hot and cold,
but they have as much chance as a snow ball in hell. But
Stimson takes ships away and Eisenhower O.K.'s it, and
his people there, and with the war going on the way it
is, they have got a fine chance.
MR. BELL: He got it before.
H.M.JR: Pardon me.
MR. BELL: He got almost a promise of it when we
started our conferences last July.
H.M.JR: Your telegram to Quebec killed it.
MR. BELL: Monnet had it when he left here; it was
in his pocket, a two billion dollar promise.
MR. DuBOIS: There is another aspect to that which
was just mentioned that you ought to bear in mind.
H.M.JR: Aspic--isn't that cold jelly?
MR. DuBOIS: This French thing.
H.M.JR: How do you pronounce it?
MRS. KLOTZ: Aspic.
o
MR. DuBOIS; On the question of the French getting
equipment, the best thing is to tell them to get it out
211
- 17 -
of the Germans. That is where they ought to get it for
post-war, not from us.
H.M.JR: I can't lay my hand on it this minute, but
I get this weekly bulletin which I have literally never
shown anybody; it is from the Joint Intelligence Committee.
They got out a weekly bulletin on that about a month ago
as to what the Germans are doing in Holland. I asked
General Marshall if I could discuss it with my staff and
use it in my discussion with McCloy, and he said I could.
When I get a breathing spell I want to dig it out and
read it to you, what the Germans have done right now
within the last two months on the big plants in Holland.
It is perfectly amazing. They just bodily lift them up
and take them away.
MR. O'CONNELL: Are they taking them back to Germany?
H.M.JR: I asked General Marshall's permission to
disclose that, names of plants, names of cities, and
everything else.
MR. GASTON: There has been something in the press
about it, but no details.
MR. BELL: One of the front line reporters wrote a
story.
H.M.JR: This gives the kind of plants. I know it
will be very interesting. Remind me to do it before we
have this luncheon with the OSS boys.
MR. O'CONNELL: That gives more punch to what you
suggest.
H.M.JR: The French have wanted to do that, but I am
an untenable position. I keep saying that they can't
have it. Then I say, "You can have it provided you watch
the dollar balances, so let Leo fight it out; I am not
in
going to.
MR. O'CONNELL: The agreement is to continue to
negotiate, not to give in.
212
- 18 H.M.JR: There is nothing mentioned -- well, I am
going home. I hope the rest of you have sense enough
to, too.
213
Jan. 20, 1945
Mr. Glasser says that Mr. Cox discussed with Mr. White
on the telephone the draft of the memorandum to the
President on French Lend-Lease which Crowley presented
yesterday.
C
o
Y
January 20, 1945
Mr. Hubbell Robinson
Vice President
The Blue Network
RCA Building
New York, New York
Dear Hub:
I have talked with Tom Lane about the proposed weekly
program, featuring the Secretary of the Treasury. Out of our
discussion have come a few ideas of a preliminary nature which
I have outlined below. I think that this presentation will
give you all the facts which you will need in discussing the
idea with Mr. Noble.
In general terms, we would like to suggest that the program originate directly from the Secretary's office in Washington; that it consist of the Secretary, and announcer - m.c.
(a man of some "name" value, but more importantly a man who
would be readily adaptable to the needs of the program);
three guests, each of whom would have interesting questions
and each of whom would be of interest in his own right. For
example, the guests might be selected from government workers,
returned war heroes, stars of stage and screen who happen to
be in Washington, wartime leaders, people of prestige such
as Mr. Noble, etc.
In addition to the questions these people will ask, the
announcer - m.o. would pose several questions taken from the
Secretary's mail, or would read brief excerpts of letters which
would call for comment from the Secretary. In addition, and
this is a most important part of the program, the Blue Network
would be likely to find itself the outlet, at times, of newsworthy statements made by both the Secretary and a selected
guest. Obviously, this feature alone could be of great promotional value to the Blue.
Attached to this letter is a proposed format for the program and, in addition, a list of some of the questions which
might be asked by guests and some of the letters which the
Secretary might answer specifically on the air.
215
We would be happy to answer any questions that you might
proposed series.
have. We would appreciate your early consideration of this
With kindest personal regards.
Sincerely,
David Levy
Lt. USNR
Special Radio Consultant
DL: jd
216
TITLE OF PROGRAM
"YOU AND YOUR MONEY" (other suggested
titles might be Washington Report," Washington Memo,
"Morgenthau Reports, etc.) I rather favor "You and Your Money"
because it is directed to the listener and it tells him exactly
what the show is about.
The show could open with an announcer in New York or in
Washington (who could, in fact, be in the Secretary's office at
the time of broadcast), saying in effect "The Blue Network now
takes you to a war front in Washington behind the gray facade
of one of the people's great arsenals for freedom -- The Treasury
Department.
"Take over,
.
The announcer - m.o. then comes in and says words to the
speaking from the inner office
effect that this is
of the Secretary of the Treasury, etc. At this point, he might
,
describe the setting (on subsequent broadcasts he might mention
in 30 seconds or so some little interesting aspect of the office,
such as the Jefferson Statue, etc.) and make brief mention of the
three questioners present, and introduce the Secretary. The
Secretary, in turn, would himself "work in" the first guest into
the program. He would bring out whatever was of particular
interest concerning that guest and then would proceed to answer
the guest's question.
At the conclusion of this interview, the announcer - m.c.
would then read two or three questions which would represent
excerpts from the Secretary's mail bag, and which would call for
brief answers from the Secretary.
At the conclusion of this brief period, the announcer - a.c.
would then present the second guest. Again the Secretary would
interview the guest and answer his questions.
The announcer -m.c. at the conclusion of the above spot would
then read excerpts from one or two more letters which would call
for answer or comment briefly from the Secretary. The Secretary
then would "work in" the third guest, whom he would again interview and again answer his question.
The announcer - m.o. would then close the program with a
teaser for next week on questions that will be answered and the
people who will ask them. He would also invite the listeners
who have questions of their own to write them in for answer by
the Secretary.
217
Note 1: The Secretary might himself, on occasion, tell
about some interesting letters he has received. Letters,
for example, in which the writer makes financial donations
for interesting purposes, contributes interesting ideas,
or makes comments worth passing on to the listeners.
Note 2: Typical of the kind of questions which might be
asked are the following:
1. Why does the Treasury Department limit the purchase
of "E" Bonds to $5,000 yearly for one person?
2. Why does the Treasury Department limit an individual's
total holdings of War Bonds?
3. What effect would the Bretton Woods Conference
have on "me" as an individual?
4. Will it be necessary to have Bond Drives after the
war?
5. How can we pay off the national debt?
6.
When can we expect taxes for individuals, corporations to be reduced?
7. What happens to money sent in as a gift to the
Treasury?
8. If the Government can cancel ration points, what
guarantee is there that they won't cancel Bond payments
or freeze redemption?
9. How can we best avoid inflation?
10. Is buying Bonds the only way to avoid inflation?
11. What is inflation?
12. Has making Bonds easier to redeem hurt the War
Finance program?
13. Why not have the $10 War Bonds for servicemen
also available for school children?
14. How can teachers and people on set salaries protect
themselves against inflation, etc?
218
o
Note 3: In addition to answering specific questions such as
those suggested above which might be posed by one of the
three questioners, the Secretary could comment on letters
sent in to him which contained questions or which pose
problems that call for action. For example, the following
letters taken from the Secretary's mail report (and which
I have boiled down somewhat are typical):
1. January 5, 1945 - Christopher B. Garnett, Barbour,
Garnett, Pickett, Keith & Glassie (law office, Washington, D. C.) writes about a client who has been regularly
purchasing U.S. Savings Bonds, Series "E", which are
inscribed with her own name but not with an alternate
beneficiary. She has been informed that if she dies
before cashing the Bonds that they will not be payable
to her estate. Lawyers want to know if upon her death
the estate can cash the same in when the Bond is payable
to one person and no alternate beneficiary 18 named.
An immediate response was asked for since one of this
firm's clients was considering cashing his Bonds in
order to avoid any contingency.
2. December 29, 1944 - Eugene LaPorte, Washington, D. C.
encloses a letter which says in part: "Collection of
your return discloses an unpaid balance of tax due to
the amount
with
interest of $65.91 this amount will be assessed
He complains about interest and
also complains because an Internal Revenue office clerk
filled out the form for him. He wants to know if he
would have to pay the interest and if the clerk should
not be made more responsible.
3. December 22, 1944 - William Ceratto of Schenectady
New York works in a war plant making tanks -- now faced
with an indefinite lay-off due to no contract. He cites
the war job done and the War Bonds purchased by the
workers in the plant, and the urgency with which he is
told daily by war leaders to stay at war work. But
faced with a lay-off, he will no longer be in the
position to buy Bonds but will have to cash his Bonds
in order to live (this is a letter which might call for
comment, either through discussion with the War Department as to further contracts with the company in question
or with the War Manpower Commission on other work needed
to be done in that vicinity, etc.)
219
Helen 0. Russell, Bristol, Vermont. She wants to
know why the United States refuses to accept the
payment of $35,000 for Finland.
Robert B. Link, CPhM, USN, c/o Fleet Post Office,
San Francisco, California (letter forwarded by
Senator Wagner of New York.) He bought Bonds out
of his Navy pay, naming his father as beneficiary,
for the past two years. Then he married and wished
to name his wife as the new beneficiary or as 00owner. His question: "Why must I have the approval
of the present beneficiary to name a new one?
He writes that the only alternative apparently was
to cash in his Bonds. He doesn't wish to do this
because his present Bonds will mature in 53 and
he doesn't want to switch them for those which will
mature in '55.
Pettina Gorfinkle, New York City. She complains
about the delay in refund of $229 due her. She
writes about her financial problems and the necessity
of her having to borrow money for medical needs.
What can be done? Why the delay?
220
ADDRESS REPLY TO
PORTICTORY
COMMANDING GENERAL ARMY AIR FORCES
BUY
WASHINGTON N.D.C.
WAR
HEADQUARTERS, ARMY AIR FORCES
ATTENTION:
WASHINGTON
20 JAN 1945
The Honorable
The Secretary of the Treasury
Dear Mr. Secretary:
Thank you very much for your letter of January 5th,
expressing appreciation of the assistance rendered by the
Army Air Forces to the Sixth War Loan. I am glad to know
that the efforts of our personnel were of material value
to the success of such a worthy event.
Your complimentary remarks are appreciated and have
been brought to the attention of the personnel concerned.
You may be assured of the continued wholehearted support
of the Army Air Forces in future war loan drives.
Sincerely yours,
Broom
H. H. ANNOLD
Geer
Commanding General, Army Air Forces
STAMPS
THE UNDER SECRETARY OF STATE
WASHINGTON
January 20, 1945
My dear Mr. Secretary:
I appreciate your letter of January 17, 1945, pointing out that my letter to you of January 15, 1945, concerning comprehensive financial aid to the
U.S.S.R. arrived in an envelope which
was marked neither personal nor confidential.
Thing
has ong
I have taken steps which I hope will
prevent a recurrence of such an omission
in the future.
Sincerely yours,
Jackson
Joseph C. Grew
The Honorable
Henry Morgenthau, Jr.,
Secretary of the Treasury.
222
January 17, 1945
My dear Mr. Grew:
I wish to acknowledge receipt of your
letter of January 15th, referring to 'comprehensive financial aid to the U.S.S.R".
There is inclosed herewith the envelope
in which this letter arrived at the Treasury. I
am taking the liberty of suggesting that when the
State Department sends me letters of such a confi-
dential nature that the envelopes be marked personal
and confidential for my attention. I am sure you
will understand that I am making this suggestion
in a friendly spirit.
Sincerely yours,
(Signed) H. Morgenthau, Jr.
The Honorable John C. Grew,
Under Secretary of State,
State Department,
Washington, D.C.
223
PORYICTORY
BUY
EXECUTIVE OFFICE OF THE PRESIDENT
WAR
WAR REFUGEE BOARD
WASHINGTON 25, D.C.
OFFICE OF THE
EXECUTIVE DIRECTOR
JAN 20 1945
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 January 8 to 13, 1945,
Very truly yours,
W. Pehic
Justine
Executive Director
The Honorable,
The Secretary of the Treasury.
Enclosure.
o
224
Report of the War Refugee Board
for the Week of January 8 to 13, 1945
EVACUEES FROM BERGEN BELSEN
Incident to the matter of evacuating from Switzerland the
group of Jews who recently arrived from Bergen Belsen,
Representative McClelland cabled us that the Swiss Federal
Police have requested that an earlier group of 320 persons
who arrived in Switzerland from Bergen Belsen in August 1944
be included in the evacuation of refugees from Switzerland
now being worked out by the Board in cooperation with the
War Department and UNRRA. The two groups comprise a total
of 1,672 persons to be removed from Swiss territory. It
was indicated that, if necessary, the Swiss Federal Railways
are prepared to furnish trains for the transportation of
these people to a French port of embarkation. Representative
Mann was advised that the first group of 320 persons should
be included in discussions with the British with respect to
the question of the admission of these refugees into Palestine.
According to information which was furnished to McClelland
by responsible members of the group which arrived in Switzerland in December, the number of Jewish deportees in the camp
at Bergen Belsen at the end of November 1944 was as follows:
4,500
2.
From Holland and Belgium
Slovak and Hungarian women and girls,
3,500
3.
from Auschwitz during September 1944
Poles holding Latin-American documents
1.
4.
5.
including a few children transferred
Jews of unspecified nationality in a
punitive block
Jews of such nationalities as Portuguese,
Argentine, Brazilian, etc., in a
so-called "Spanish" block
6.
7.
Greeks
Hungarians, chiefly craftsmen recently
transferred from Vienna
Total
349
300
300
150
89
9,188
It was indicated that a fairly accurate list of some 1,700
persons in the first group is available in Switzerland.
Several hundred persons in this group are said to hold Latin-
American documents or are registered for Palestine immigration.
Most of those in the second group are housed in tents and are
in a very needy condition, especially with respect to clothing.
They are expected to be gradually shifted to work camps in
Germany. The majority of group three are classified as
Palestine subjects, about thirty claiming United States
225
-2nationality. McClelland has secured a list of the persons
in this group, which includes some Jews who took part in
the defense of the Warsaw ghetto in April 1943 and later
escaped into Hungary. A list of the names of the persons
in group seven is also available.
SITUATION IN RUMANIA
From the United States Mission in Bucharest a report concerning the position of Jews in Rumania was received. On December 15, 1944, the Radescue cabinet approved and the King signed
a bill which abolishes all legal discrimination on the basis
of race and seeks to reestablish Jews in the country upon a
basis of equality. The provisions of the bill include:
The re-appointment of Jewish officials and the rehiring of Jewish employees for those dismissed under
the previous discriminatory laws.
Under certain conditions, committees with a judge
or a Labor Ministry agent will decide upon reappointing dismissed employees on considering
existing capacities of designated firms. Rehiring preference is given to those hardest hit
by the old racial legislation.
Properties which Jews lost through the racial laws
are to be restored and any sales or mortgages of such
properties are to be annulled. Jewish owners and
tenants can return to houses from which they were
evicted.
A grace period is provided to permit civil
servants', pensioners, low-paid workers and
artisans, war disabled, war widows, and war
orphans to remain until April 23, 1945, in view
of the difficulties of changing homes in the
middle of the winter. This provision also applies
to certain public authorities and institutions.
With regard to the possible later issuance of a law to deal
with the financial rights of Jews where the State is the
debtor, a Rumanian newspaper held that for the assistance
of the national economy and the fulfillment of the armistice
terms it has been considered "right and reasonable not to
burden the State with the execution of considerable financial
obligations arising from the repeal of the racial laws.
The entire Bucharest press of December 15 agreed that the
new law constitutes a beginning in furthering a better
atmosphere of harmony and in eliminating a "disgraceful blot
upon Rumania's history." One paper emphatically approved
the new bill, while two others suggested amendments to assist
Jews in being reinstated in their places of employment and in
being restored to their homes with more speed, one of the
226
-3latter taking the position that the decree seems more
concerned with safeguarding the interests of those who
have profited, in most cases cruelly and brutally, by the
wrongs done to the Jews than in repairing these wrongs.
The local Jewish reaction to the bill was unfavorable, the
general feeling, as expressed by Dr. Filderman, the head of
the Jewish Association in Rumania, being that it grants to
Jewish employees, owners, and tenants not a right, but a
favor, depending on costly, long-drawn-out law suits,
resulting not in the repeal, but in the maintenance of
racial laws. It is their view that the bill's provision
for the maintenance of all employees who replaced Jews
through the effect of the racial laws compels Jews to go
from employer to judge and leaves them at the mercy of
employers and commissions. The provision for the postponement of the payment of damages until after the war they
regard as tantamount to a refusal to pay damages, and the
extension of the validity of leases to April 23, 1945, they
apparently fear may be the first move to delay indefinitely
the restoration of Jews to their homes by subsequent extensions of the grace period. To the argument of government
officials that it is impossible "to lay fresh burdens on
the State" by paying now the damages due to Jewish owners
Dr. Filderman advanced the opinion that it is easier for
a population of 15,000,000 to share the damages incurred
than for a population of 750,000--half of whom have been
murdered, while the other half are ill-clad, barefoot, and
hungry--to be compelled to beg for posts and dwellings and
to wait for peace to receive the compensation due them.
INTER-GOVERNMENTAL COMMITTEE ON REFUGEES
Representative Mann recently advised us that the Inter-
governmental Committee proposes to send the equivalents of
$300,000 to Rumania and $50,000 to Northern Italy and to
raise by credit the equivalent of $300,000 in Hungary for
be accomplished by buying currencies of those countries
in Switzerland with precautions to see that no assistance
is thereby given to the enemy. Approval of the British
Treasury for the proposed transfers was obtained, and the
Inter-governmental Committee requested the approval of
United States authorities before proceeding with its
instructions. A cable was sent to Representative Mann
advising him that, in view of the urgency of the relief
needs in those areas, the State Department, the Board,
and the Treasury Department approve the proposed methods
of transfer for Inter-governmental Committee expenditures.
refugee relief, transfers in the first two instances to
227
4
VATICAN COOPERATION
The Apostolic Delegate in Washington, in a letter to the
Board, advised us of the receipt of a communication from
the Holy See, in response to renewed appeals for intercession by the Vatican to stop the extermination of Hungarian
Jewry, stating that the Holy See has never interrupted its
intense activities in behalf of Hungarian Jews. It was
further stated that the Apostolic Nunciature of Budapest
and the Hungarian Bishops have constantly lent themselves
to this work with every resource and effort possible and
that a substantial contribution was recently made to the
Apostolic Nunciature for alleviating the sufferings of the
Jews. It was indicated that since it has become impossible
for the Holy See to correspond with Budapest, the Apostolic
Nunciature in Berlin has been directed to concern itself
with this matter.
PSYCHOLOGICAL PROGRAM
We received a letter from the Office of War Information
indicating that that office shares the view of the Board
that everything must be done to combat the increasing muthlessness to be expected on the part of the Germans during
the closing period of the war. We were advised that careful
attention will be given to our suggestions for the preparation of German programs for the greatest possible effect in
preserving the lives of Jews remaining in German territory.
FOOD PARCELS
Representative McClelland advised us that, according to
information received by the International Red Cross from
its delegate in Germany, the retention of, shipment of
approximately 15,000 Board parcels near Lubeok is part of a
general stand-still of all parcels transshipped during the
last two months from Gothenburg via Lübeck, including those
for prisoners of war. Apparently, a closed east-west transport corridor was established by the Germans for bringing
up supplies for their recent western offensive, and no nonmilitary freight traffic in a north-south direction was
permitted to traverse the corridor. For some weeks Inter-
cross has been negotiating to move the stocks which were
held up, and on January 10 an unconfirmed report was received
that three cars containing Board parcels went forward on
January 4. It is expected that the shipment of some 60,000
Board parcels via Toulon can be handled with greater facility,
since they will be moved into Germany from the south.
228
5UNITED STATES VISAS FOR PERSONS IN ENEMY TERRITORY
Following the approach made by our Embassy in Ankara to
the Turkish Government with respect to the special visa
programs developed to benefit certain categories of persons
in enemy territory, the Turkish Ministry of Foreign Affairs
has informed our Embassy that the rupture of d iplomatic
relations between Turkey and Germany has made it impossible
to carry into effect our proposal for the issuance of
Turkish visas to affected categories of persons in Germany.
While the liberation of the Balkan countries by the Allied
armies was regarded as solving the problem of persecuted
persons in those countries, Turkish Consulates in the Balkans
have received appropriate instructions with respect to
Turkish visas for persons with qualifications for United
States visas.
EVACUATIONS THROUGH TURKEY
Representative Katzki advised us that a group of approximately
360 persons, including children repatriated from Transnis tria,
refugees from Hungary, Slovakia, and Poland who had succeeded
in escaping into Rumania, and Rumanian nationals, arrived
in Istanbul by railroad on January 5. On January 6, a second
group of approximately 260 persons, mainly Polish nationals
who had succeeded in escaping to Rumania and had been in that
country for some time, also arrived by train. Both groups
left Istanbul en route for Palestine on January 7, the
Turkish authorities having provided a special train for
the purpose despite the difficult seasonal transportation
problems of the railroads.
According to statistics reaching us from a private source,
a total of 2,405 immigrants to Palestine transited Turkey
during the months of October, November, and December 1944;
1,701 came from Rumania, 3 from Hungary, and 701 from Bulgaria.
These numbers included 566 Hungarian refugees, 140 Polish
refugees, and 380 Transnistrian orphans.
How
W. Pehle
Executive Director
229
Report of the War Refugee Board
for the Week of January 15 to 20, 1945
COOPERATION OF SWISS AND SWEDISH GOVERNMENTS
We cabled Representative McClelland that private relief agencies in this
country which are hopeful of being able to arrange large-scale escapes
of refugees from Nazi persecution have expressed doubts as to whether the
Swiss Government is willing to continue to permit a flow of refugees to
enter Switzerland without limit as to number. We asked him to inform us
of the results of any investigation he might find it necessary to make in
this connection. At the same time, we authorized him, if he should consider it useful now or at any time in the future, to emphasize to Swiss
officials that the assurances previously given by this Government, concerning the maintenance and evacuation of refugees from enemy persecution
admitted to Switzerland, were not restricted to any particular number of
persons and that continued Swiss cooperation in this humanitarian endeavor
by permitting the entry without regard to numbers of all such refugees
who may be able to reach Switzorland would be greatly appreciated by the
United States Government.
We sent a cable to Representative Olson in Stockholm, along the lines of
a message to Representative LiCClelland outlined in a recent report,
requesting that ho visit the Swedish Foreign Minister and urge that continued efforts be made from now on, in view of the increasing danger to
Jews in Gorman-controlled territory, to keep the surviving victims of Nazi
persecution alive during the coming stages of hostilities in Europe. We
enumerated the largest known concentrations of Jews in Axis territory,
including Camp Borgen Belsen with more than 9,000 inmates. We asked that
he mako clear to the Swedish Foreign Minister our view that frequent and
extended visits of Swedish Consuls to places and regions where Jows are
concentrated constitute one of the most effective means of preventing their
further extermination, as proved in Budapost, where the presence of Swedish
personnel appears to have boon instrumental in saving many lives. We
requested Representative Olscn to emphasize to the Foreign Minister the
mounting evidence of confusion among local German officials and their increasing accessibility to psychological pressure to dissuade them from
carrying out the extermination policios ordered by contral German authorities and to urgo that full advantage of this stato of mind be taken, through
unofficial as well as official channels, in the interest of saving lives.
It was pointed out that we are seeking unromitting pursuit of the suggosted
activities on the part of the Swedos as long as the danger lasts and not
one-time acts of intercession. In viow of the perilous situation of the
Jows in areas which the Gormans may soon have to ovacuate, and in view of
recent reports indicating the effectiveness of publicity and other forms of
o
psychological pressure upon Gorman officials, we also askod Minister Johnson
and Representative Olson to make special offorts to increase such pressure
through all channels available to thom.
CC: Miss Chauncey (for the Soc'y) Ackermann, Akzin, Cohn, Drury, DuBois,
Gaston, Hodel, McCormack, O'Dwyer, Filos
230
-2By way of specific action, we suggested that the desirability of delegates
of tho Swodish Y. M. C. A. and the Swedish Red Cross boing stationed in or
sont on extended visits to Borgen Bolson, to assist in the distribution of
the largo numbor of relief parcels recently reaching this camp with their
assistance, be urgod upon those organizations.
We also cabled Representative McClelland requesting that, in view of the large
number of roliof parcels recently reaching Borgon Belson, he urgo upon the
International Rod Cross the dosirability of having an Intercross delogate
stationed in or sont on an extended visit to the camp to assist in the distribution of such parcols. We indicated that this suggestion to safeguard
the livos of the camp inmatcs is made in lino with our recont request that
Swiss and Intercross efforts be redoubled to protect the romaining Jows in
Gormany and Gorman-occupicd territory in viow of the increasing dangor
threatoning their survival.
To our Logations in Born and Stockholm and Representatives McClolland and
Olsen we cabled our understanding that the Swiss and Swedish Ministers in
Washington, ct tice request of a private organization, are transmitting to
their Governments requests that Switzerland and Sweden again appeal to the
German Government to refrain fron further extermination and persecution of
the Jews remaining in German-occupied territory. We suggested that it be
indicated to S riss and Swedish officials that this Government would welcome
an appeal along such lines.
SITUATION CF JEWS IN GERMAN-CCCUPIED TERRITCRY--AUSCH/ITZ AND BIRKENAU
Representativo Mann cabled us that representatives of the Czoch Government
and various Jowish groups have approached the Russian Embassy in London,
pointing out the possibility that, as the Red armics approach the camps at
Auschwitz and Birkcnau, the Gormans will make a last-minuto offort to
extorminate every one in those camps. They urgod that the Russians try to
roach the camps at the carliest possiblo moment and that the Russian Govern-
mont ondeavor to provide every possible moans to protect tho camp inmatos
from last-minuto slaughter at the hands of the Gormans. Representativo Mann
was informed that the Russian Embassy promised to forward the request to
Moscow. The same groups approached him urging that the War Rofugoo Board
send a cable to Moscow requesting that the attention of Soviot authorities be
directed to the matter. Wo imnodiatoly cabled our Embassy in Moscow, pointing
to fears of a Gorman massacro of Jowish and other survivors in those and
other camps in that area prior to retroat, and asking that the urgency of
addressing suitable warnings to Gormans in thoso localities by radio and
pamphlots bo suggested to Soviot authorities. Our fooling that, in vicw of
the noorness of Soviot forcos, such warnings by them would be helpful and
effectivo was indicated. The Embassy was askod to raiso with Sovict authori-
tics the mattor of the feasibility of their taking direct measures for the
protection of camp inmatos. Wo further requested that, as an indication of
whother the Gormans are continuing their policy of exterminating the romaining
Jows previous to retrcat, the Embassy ondoavor to ascortain for us whether
the 60,000 to 80,000 Jows reported in Lodz a fow months ago wore found alive.
231
-3
From the United States Logation at Dublin, WC learnod that, at the request
of a momber of the Dail, the Irish Government addressed an inquiry to the
Government of Germany concerning the rumor that the Gormans intend to
exterminate the Jows in the camps at Auschwitz and Birkonau. The roply of
the Gorman authorities was that the rumor is purc invontion, devoid of
foundation, and that if the camps should be abandoned, the inmates would
bc ovacuated. A cable was sont to our Logation at Dublin asking that this
Government's appreciation of their humano activities in the matter of
thrcatoned Jowish inmates of Gorman camps bc conveyed to the Irish Govern-
mont. In this connection, and in view of the nearness of thoso camps to
the front, we asked that the Irish Government bo advised that it would be
greatly appreciated if a further communication could bc dispatchod with the
greatest possible spood to German authoritics, informing thom that their
roply to Iroland has boon noted by the Government of the Unitod Statos and
that the latter accordingly expects that Jows and other survivors of thoso
and other concentration, detention, and labor camps in Germany and Gorman-
controlled torritory will be kept alive by Gorman authoritics.
EVACULES FROM BERGEN BELSEN
To notified the War Department and the Unitod Nations Relief and Rohabilitation Administration that plans for the possiblo uso of the refugco camp
at Philippovillo, in connection with the romoval from Switzorland of 1,352
ovacuees from Borgon Belson, should include the initial group of 320 persons
who reachod Switzorland from Borgon Bolson in August, making the total number
of persons involved 1,672. life were informed by Assistant Scerctary of Nar
NcCloy that messages arc being sont to appropriate officials in the theater
concerning transportation arrangements, but indicating that if they so
recommend, considoration will bo given to arranging accommodations for
those refugoos at some camp other than Philippovillo.
Representativo Mann advisod us that ho has takon up with the Refugoo Section
of the British Foreign Office the question of admission of these rofugoos
into Palostino, stressing the urgency of the mattor.
JEWISH REFUGEES IN SHANGHAI
Information reaching us from privato sources through our Logation in
Stockholm referred to a message cabled to the King of Swoden from Palostino
requesting that Swedish protective passports bo given to certain rabbinical
groups, representing a part of somo 20,000 Jewish refugces in Shanghai, and
that Swedon sond a vessel to ovacuate thom. After an invostigation undortaken at the request of the Studdish Foreign Office, the Swodish Consul in
Shanghai reported: that evacuation from Japanose areas is impossible. From
the samo private source, a later report contained information, somowhat at
variance with the first report, given by representatives of a private
organization who stated that they had discussed the matter with the Japanose
Minister in Stockholm and woro given to understand that the Japanoso would
interpose no objection to the doparture of the rabbinical group from Shanghai,
232
-provided their reception in some noutral country could be guaranteed.
It was said that the only practicable routo for them to taku is via Russia,
and the assistance of the Unitod Statos Government in obtaining Russian
transit visas was sought.
According to information obtained from privato sources in the Unitod States,
Jowish officials in Palostino have received a mossago from the Vatican to
the effect that the Japaneso Government agrees to the ronoval of intorned
refugoo rabbinical scholars in Shanghai as part of an exchange schono.
This information was cabled to Mr. Myron Taylor at the Vatican with the
request that ho ascertain prociso facts regarding the matter and cablo us
such information as he is ablo to obtain.
J. W. Pohlo
Exocutivo Director
233
Paraphrase of Telegram Received
FROM:
American Embassy, London
TO:
Secretary of State, Washington
DATED:
January 20, 1945
NUMBER:
715
CONFIDENTIAL
US URGENT
Coech Government and various Jewish groups have approached
the Russian Embassy and pointed out possibility that Germans
will make last minute effort to externinate every one in the
camps at Rischwits and Birkenau as the Russian armide approach.
Already they have requested the Russian Government to reach
campa at earliest moment possible and to endeavor to provide
every available means to protect persons from slaughter at
the last minute by Germana. Russian Embassy has promised to
forward such request to Moscow I am informed. The same groups
in approaching no have insisted I communicate anxiety to the
War Refugee Board and request that attention of Soviet
authorities be directed to matter in cable to Moscow. In
view of the fact that the Russians have long been aware of
the situation and aware of their request in the matter I have
advised them I doubted any useful purpose would be served but
that their wishes would be communicated to you by no.
FROM MANN TO PEHLE.
WINANT
DC/L:ALC:MBM
1/21/45
CABLE TO JOHNSON AND OLSEN, STOCKHOLM, FROM DEPARTMENT AND WAR REFUGEE
BOARD,
Board understands that Swedish Minister in Washington, at the
request of a private organization, is transmitting to the Swedish
government the request that Sweden again appeal to the German Govern-
ment to refrain from further extermination and persecution of the
Jews remaining in German-occupied territory.
You may indicate to appropriate Swedish officials that this
Government would welcome an appeal along such lines.
THIS IS WRB STOCKHOLM CABLE NO. 296.
1:00 p.m.
January 20, 1945