Full text of Diaries of Henry Morgenthau, Jr. : Volume 831 : Part 1

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MICROSTAT

MICROFILM

ROLL NO.

1

March 22, 1945
9:30 a.m.

BRETTON WOODS

Present: Mr. D. W. Rell
Mr. Gaston

Mr. O'Connell

Mr. Bernstein
Mr. Luxford
Mr. White

Mr. Feltus
Mr. Fussell
Mrs. Klotz

asked is you sit
H.M.JR: Good morning, everybody. The PERSON I have

DIARY

Book 831

March 22, 1945

youwhether
here, particularly
with me
you likeDan,
it orfrom
notnow have through got to ten
o'clock, and O'Connell and Gaston, too, is I an leaving
Saturday, and I want you to know what have been up to.

MR. BELL: Have you been up to something? I am
curious.

H.M.JR: I figured if you gentlemen sat here you would
know and could help advise these people on various problems

which I have been care of. In socie instances
you
every
know about it, and taking some you don't. but appointment
that I an going to make today to do anything I want you

and Gaston to sit in so you will know. You will, please?
MR. GASTON: Yes, sir. I understand you were well

up to the job yesterday in New York. Mr. Pussell told se
you had a very successful meeting.

H.N.JR: It was very successful, I thought.
VR. F ELTUS: Didn't you tell theu they could use that
story on Russia?
H.M.JR: Yes.

3

-32

H.M.JR: The Student Prince and everything! I have
got my spies around, and they said Dan Bell didn't mind
If it was just B team of us KDO had the Student Prince,
but there were two hundred.

Walter Kiernan came on and said, "The only one I
heard told is the story which Secretary Morgentheu told me
was off the record.

H.M. JR: No, I thought it went very well. Kaltenborn
said, "I hope we are not going to all sit around here. I
have to get away at two-thirty.
I said, "You don't have to. We don't work like that.'
So we started right in in the beginning. I as sorry I couldn't
meet that Italian girl.
MR. FELTUS: Lisa Sergio.

B.N.JR: Everybody said the was able. She WAS Mussolini's
secretary, wasn't she?

MR. FELTUS: You told se that; I didn't know it.
MR. D. ii. FELL: There was nothing in the paper about
that. It was an open meeting.

MR. FELTUS: It was off the record.
H.K.JH: Can somebody who was here yesterday tell me
what happened on the Hill?
MR. O'CONNELL: I guess I can.

H.M.JR: Are you feeling all right, Joe?
MR. O'CONNELL: Yes, fine.

H.M.JR: I hear you put your foot down when they wanted
to bring the Rockets into this luncheon today.
MR. D. W. BELL: No.

H.M.. JR: That is the story that is going around the
Treasury. They wanted to bring the Rockets down from New
York and you said no.

KR. D. W. HELL: I thought the Treasury would be disturbed too much.

Charlie Stewart Bell?
MR. C. S. HELL: Two hundred out of the Treasury for
two hours! There wouldn't have been anybody left but the
messengers in the corridor.

deal in the
MR. O'CONNELL: Randolph Burgess WES the witness

yesterday, and in the morning he didn't hurt us at all.
He was very good for our side, because he got into a great
difficulty
explaining
what hethat
he thought
there about was a
CED ofreport,
and
he indicated
thought

pretty good basis for e compromise based on the CED report.

Now, he reads the CED report a little bit differently from
the way be read it, I believe. He described that 88 being
a proposal under which all what we could call the bad loans
were taken out of the Fund and put in the Bank. He said,
"If that were done, then they would probably have little
objection left.
(Hr. White enters the conference.)
MR. O*CONNELL: Except they would think it should all
be done in one organization instead of two.

In the afternoon he did 6 little better for their
side because the Democrats were not prepared other than
Brown and Patman, and none of the questions in the afternoon brought him back again to the CED report, so he was

again basing his oriticism and objections on the original
APA report, which is, of course, a horse of a slightly
different color. He was asked in the morning-H.M.JB What color?
MR. O'CONNELL: Slightly different.

H.K.JR: I wasn't quite sure.
MR. HERESTEIN: It was darker.

5

4

-5MR. O'CONNELL: He Was asked in the morning how he

would vote if he had to choose between the Bretton Woods
proposals and nothing. Their advantage was that it BBB
about the third question asked him by Brown. He had a

very difficult time with that question. he squirmed.
MR. HELL: He didn't answer it, did he?

MR. O'CONNELL: Well, he finally did after Patman
continued to press. Nolcott came to his assistance and
said it was an unfair question, and Patman said, Why is

it unfair? Patman kept saying, "How would you vote if
the choice were between the Bretton Woods proposals and

nothing?"

Well, he said he would be in favor of amending the

bill, of course.

Patman said, "You have lost that; you have lost all
your amendments. The question is yes or no on the bill."
He pressed him very hard. And finally, in effect, he said
he would probably hold his nose and vote yes.
H.M.JR: That was planted, I suppose, by somebody.

He would hold his nose?

MR. LUXFORD: Yes.

MR. O'CONNELL: He expressed it a little differently
in talking to Brown. he talked about taking a big glass
of orange juice or something of that sort. He sounded as
though he were trying to find the most palatable way of
taking castor oil.
H.M.J Congressman Brown wants me. Should I put
in a call now?
MR. LUXFORD: Yes.

MR. O'CONNELL: We gave Brown about six questions
on the CED report. He WEE very good.

MR. LUXFORD: He has been helping us right along.

MR. D. TVC PELL: That is unusual, too, isn't it? He
is usually against us.
MR. O'CONNELL: I was doubtful about giving them to
Brown because I didn't think he knew enough about them.
VB. LUXFORD: Better to give them to Brown, because
Patnen--

MR. O'CONNELL: I WB S a little doubtful about Brown's
ability, but he sat up there and smoked cigars and talked

like an expert. And that NBS really the best part of the
hearing.

H.K.JR: (To Mrs. Klotz) Tell Gamble his people were
supposed to let me know how Mr. Noodruff of Coca-Cola

stood on Bretton Woods. He is coming over at eleven.

Sometime between now and then you call.

(Secretary holds . telephone conversation with
Congressman Brown follows:)

March 22. 1945
9:45 A. M.
S

7

Operator:

Congressman Brown.

HMJr:

Hello.

Paul

Brown:
HMJr:

B: (cont.)

I personally hope you car 60.

EXJr:

Mr. Secretary, this is Brown of Georgin.
Yes. Before you talk to no, any I get n word in?

HWJr:

And tell you have much I appreciate the hate you
have been giving us.

Ahub.

HMJr:

How good an organization is that in Georgia?

Well, they aren't many That's just eort of a

B:

Well, I'm going down the line for you. of course,
valro going to have . hard job. The boys -

Miss

political fight out of 11.

HMJr:

The boys any you very swell yesterday.

HKJr:

HMJr:

of ARA and they any they going to have every

)

bank recreentivein Georgia desides other business

C

He wants you to come down and make . march 1000time before we leave here.

B:

HMJr:

Arah.

And he phoned = yesterday and mid that he you
writing you, and that he'd have everything from

B:

Georgia.
I especially vent for
the reason that not or-In-law 1. the President
of the Banker's Apposition,Devid H. Arnold

HMJr:

David H. Arnold. Arnold.
Yeah, he's my wife's brother.

B:

HKJr:

people.
HMJr:

Ahuh.

You'12 certainly have n swell around,and they are
very appreciative people. The League of Women,

B:

confidentally, are just sort of local people.

MNr

: ecc. Well, I'll tell it over with -

3:

You they might invite none of them, you know.

HMJr:

I see.

And they'11 have all the - you'll have

B:

the best around you ever had in your life. They

B:

Aluh.

And this brotherwin-inv has been president a counte

B:

Oh, yes.

group there in Atlente, you know.
I sec.

Course the Bankers -- they'r going to get everyhas been
body there. This fellow
moretary about 30 year#

B:

Well, you ands = eighty good witness. Mr. Secretary,
what I called you about. MacFedden, who is secretary
of the Georgia Bankers Association.

B:

The League of Women Votere invited me to come down

3:

a

B:

Well I'll certainly give it very serious consideration
there, too.

Yes.

B:

you made before our committee. Anytime between

April 5th, will give you plenty of latitude, and

in this meeting.
Ahuh. Well, its terribly nice to know that you are

wanted by bankers anywhere.

Ther's right. I think it would be If good stroke,

the they have some mighty good people there

like you COWN there and they want you to 69983 on

Bretton Woods.
HMJr:
B:

Ahuh.

I'd written nome time ago the fine presentation

MMW
3:

Well, I'll give very --Good banks in Georgia, and I think it will be very
helpful in our bill.

9

8

-6HMJr:
B:

I'll give 1: very serious consideration.

H.M.JR: That is what you boys have been needling me

A11 right. Let me know then as soon as you can.

on.

: certainly will.

MR. GASTON: Before April 5, he said.

A11 right. Thank you very such. Eye.

MR. LUXFORD From what you said, me don't need to.
Be have got them in our pockets.

MR. HERNSTEIN: I am not so sure this isn't 8 good
time to get the whole setup solidly behind us.
MR. LUXFORD: Not through the bankers.

H.M.JH: Let's let the thing pass for the minute, but
you remind me, Mrs. Klotz. I will think about it. Personally,
Ir I am going to do something else again, I will seriously

consider Feltus' suggestion of going to Chicago to address
the radio commentators of that area. In going to the radio
commentators--I give you credit for that whether you deserve

it or not. It is good idea. It *** your idea. I take

credit for the breakfast with the publishers, but you (Feltus)
CAD have this one, and this was good.

You are my limison fellow.
MR. LUXFORD: Sure.

H.M.JR: John S. Knight, owner of the Chicago Daily
News has written a half-page editorial that 10 favorable to
Bretton Woods. Have you people seen it?
MR. LUXFORD: They have a man up there. Is he the
owner?

MR. GASTON: Yes, be is the new owner of the Chicago
Daily News, and also owns the Akron-Beacon Journal, the

family Herald, and the Detroit Free Press.

H.M.JR: He used some of the arguments I used here.
He comes out--do you want to use this?

MR. LUXFORD: Yes, me will write letters to all of

0

them, Mr. Secretary.

(Secretary hands Mr. Luxford editorial by John S.
Knight on Retton Woods.)

11

10

-8MR. REENSTEIN: I would like to mention a thing on

H.M.JR: I would like that editorial back. I would
like to show it to the President.

that. Mr. Burgess was & little bit less than fair when

discussing what the bankers have done. He gave the impression that in 1928 If the New York bankers had had
their way, credit would have been tightened long ago.
There wouldn't have been this finacco with the stock market.
He never mentioned the bank of which Mr. Mitchell was the
head having left a meeting of the Board of the Federal
Reserve Bankers in New York and announced he didn't agree
with what the Federal Reserve Bank of New York WAS doing,
and his bank would lend money just 88 he thought the market
would need it.

MR. PERSTEIN: May I offer some comment on yesterday,

especially since it involves the Chicago Daily None?

H.M.JR: I will have to stop in three minutes.
MR. BERNSTEIN: T wasn't st the morning meeting. but
I was there in the afternoon. I heard what Joe mentioned
about the very effective testimony. But the reporter for
the Chicago Daily News, Lahey, crabbed hold of me 85 room

as I not there in the afternoon, and he cave the view that
while there may have been something helpful to us in the

H.N.JR: Did anybody bring that out?
MR. REINSTEIN: Nobody. But I talked to Mr. Roberts

morning's tentimony, there was & FOOD deal that RES hurtful

to us, particularly the insistence of Purgess that you
didn't have these choices that the people were urging, the
choice of not taking it. he believed that people would take
it, and it would work better, and so forth. But in the
afternoon he RBS devastating, in my opinion, to our side.

Re Was very reasonable, and said nice things about the
Treasury, how good it was to see the Treasury fighting to

put so such gold in the Fund, and so forth, but the fact he
kept reiterating was you couldn't stop it from being mis-

managed. It Was bound to go wrong as long as countries
felt they could come in and get whatever money they wanted.
He held himself exceptionally well with the Republicans. He
strengthened their doubts, and he gave, what was worse from
our side, two Democrats an opportunity to ask him questions
in which he strengthened their view that the Fund was not

a useful instrument, that it ought to be done through the
Bank.

Now, I had the feeling that Burgess with his reasonable.

ness, with his clarity and with his fairness of patting the

Treasury on the back five or six times did US more harm than
anything else we are likely to get.

H.N.JH: I would like to have the unvarnished truth,
even if it hurts. Did anybody bring out the record of the
ABAY

after the meeting and said thought it ESE peculiar for
Mr. Burgess to say that.
H.M.JR: Who is he?
,

MR. D. W. BELL: George Roberts?

MR. WHITE: Vice President of the National City Bank.
I think we had better meet Burgess on the arguments
as well B.B what you say.

H.M.JR: No, we have got to--I tried to tell it, and

I repeat over and over again, you have got to discredit
these people, the American Bankers.

Did anybody ask them about the position the American

Pankers took on postal savings?

MR. LUXFORD: Well, Patman and Outland both had it.

MR. PERNSTEIN: Burgess is coming back with the details

as to how he will amend the bills. He will bring in a
written statement on how to change the documents.

12
13

- 10

H.M.JH: I think they did have that material.

MR. O*CONNELL: Are you going to spend some time later
in the day or tax enforcement problems?

MR. O'CONNELL: Oh, yes, they had it.

H.M.JR: We will start at ten o'clock.

H.M.JR: Why not give him-MR. LUXFORD: More important than that, today Leon
Freser is on, and the have a dossier on Leon Froser and BIS
that I think we ought to go to work on.

MR. O*CONNELL: May I came?

H.M.JR: You were told to c ome.

H.M.JR: How about the recommendations of Kruger?

MR. O'CONNELL: It doesn't make any difference.

MR. LUXFORD: Not Kruger. This makes him or appeaser.

Mr. CASTON: Mr. Bernstein and I have . proposed.
MR. MAIVE: Did anybody here listen to the Taft-Tobey
debate last night?

H.M.JR: How about Kruper's being here?

MR. LUXFORD: I haven't any material on it, Mr.

MRS. KLOTE: It went extremely well.

Secretary.

H.M.JR: I told you--

MR. FELTUS: Tobey has magnificent.

MR. LUXFORD: 1 the comizant, and me are still looking.

It's in the files of Greenbaun. ze was managing director

.

H.M.JK You can call up Korris Ernst, and call up
about the files, because Edgie Greenbaus set up kind of
decoy and appointed him to act 65 sort of on arbitrator.

of--what is that investment They were represents-

tives for Kruger.

When he cane back George Harrison tried to et me to
take him as Under Secretary, and I went into his whole in
record. He personally #85 . representative of Kruger
this country. You call up Morris Ernet.
MR. O'CONNELL: Lee Higginson?

H.M.JR: It is Lee Higrinson. thless samebody has
something, I on going to have to stop non.

C

MRS. KLOTZ: Tobey WAS sarvelous.

MR. O'CONNELL: These things never mean the come thing

to two people. Burgess has very dishonest, but he HBS very
effective. lie is kind of & bully, and he overpowers people,
and he tomopolises the time and gets-H.M.JH: I 621 going to 20 to other mattern COR, if
Bell, White, and Mr. Geston would stay.
(1tr. Bernstein, Mr. O'Connell, and Mr. Fussell
leave the conference.)
MT. FELTUS: The National Foreign Trade Council came
out for US.

H.M.JR: Definitely. Excure me. Luxford, I want that
list of CED directors. You might ell ne who is working on it.
MR. LUXFO D: These are the ones, actually, on the
Research Committee. (Hands Secretary "The Bretton Foods
Proposels, prepared by CED.)

14

11 -

H.M.JR: This is what I want: I have been thinking
of calling up some of these fellows. Are you going on
the Hill this morning?
MR. LUXFORD: Yes.

H.M.JH: Can you get me people on foreign poliey?
MR. FELTUS: Foreign trade and this--

H.M.JR: I have got this. 1 will tell you what I am

I am getting new Treasury advisers on finance, and

doing. I an going to pick them out of these follow who are with US.
MR. LUXFORD: Gordon "asson--I don't know how he in

going on this, but I talked to him . long time ago, and he

is sort of : decent fellow.
H.K.JR: lie is the very fellow 1 a calling up--I called
Chester Davis and asked how he was, see? Then I as going to
call Chester Davis on the phone and find out where the rest
of then stend.
MR. LUXFORD: George Whitney on the ARA report or
the New York State Bankers report, 80 1 don't KNOW where he
stands.

H.M.JR: If TO get one Morgan partner, good.

MR. D. W. HELL: I oulcn't be surprised if Leffingsell

would be on our side.

MR. LUXFORD: Whitney is very eyapathetic to our
position.

H.M.JR: That you can do to save as time is, supposing-do you know Chester Davis?
MR. FELTUS: Yes.

H.M.JR: Call him up on the phone at the Federal Reserve
in St. Louis and itk him which of these men are definitely
with us and which fellows drs. their feet, and 1 want to
Know & little later on.

MR. FELTUS: Can

Margeret McBride's proj
do on it?

H.M.JR: Sing. Ye

17

16

2McCloy or somebody said, "Well, we were told yesterday by
Mr. McCloy that--

March 22, 1945
10:00 B.M.

H.M.JR: By Mr. KeCloy?
deindostrialization OF GERMANY

MR. COE: VeCloy. Harold TOT over to the four-agency
meeting with KeCloy the day before when you rang, and McCley

Present: Mr. D. 1. Bell

came into the meeting and said the draft was to be withdream. Is that right?

Mr. White
Mr. Gaston

Mr. Glasser

MR. GLASSER: No, he said that the agencies were--the
committee was to meet and sit around a table and try to

Mr. DuBois
Kr. Coe

get an agreement between the verious departments.

Mrs. Klotz

MR. COE: Clayton said he didn't have any such
understanding from Grew; the last he heard Gree that still
trying to get the President on this. however, we then ment
forward discussing the documents, paragraph by paragraph,
and agreeing to such changes 88 constituted-as as mill make-se devised 8 different document.

H.M.JR: will you proceed, Mr. Coe, in your usual
condensed Readers Digest manner?

MR. COE: Tell, we and the meeting of the working
comittee chairmen and will Clayton yesterday, and I
think perhaps the chief thing to say is at the beginning
he said that this group had been called together to ret
an interpretation of the draft directive of March 10.

0

Yesterday's discussion centered chiefly on the Army

stuff, the provisions they wanted for a more flexible military
government. State gave in to them on practically every point.
made quite 8 struggle to get c positive statement on decentralization agreed to. to ?0 into the document, and I got
no support or that at all--some support free the Army, but
they took the same line that McCloy did with you, that Stimson
ass viewing himself as an administrator in this thing and
they could carry out any policy. However, they did prefer
the policy of decentralization. I wanted the positive
statement from 1067 put back in. That was held over. There
was no decision on that. It took so long, and there WBS

McCloy spoke un and said that wasn't his understand
ing from you, ano that the Army had this thing which they
cut passages out of, and that in what they wanted.

Will Clayton said he didn't see BE there would be any
difficulty in meeting the Army on this discussion of their

documents.
State?

H.M.J May I ask who was there besides Clayton from

so such arguing about it that ze decided to move forward

with the consent of the group it was decided to have Despres
from Riddleberger's Section because of his familiarity with

to the other subjects. At the end of the time--ne met from
ten-thirty to one o' clock--st ten minutes to one we got on
the economic matters for the first time, the statements on
controls. The State Department directive reads, "You shall

understood you had told Grew, we would want to raise in

following purposes? And then it lists them. I took the

MR. COE: They had Matthews and Despres and Riddleberger.

the subject. I said, likewise, that in view of what

direct, administer, and control the German economy for the

connection with this draft any sort of question of policy

as well and have the case latitude on policy as they were
riving the Army on administrative netters, and Clayton or

position that EC would want that language turned around

and have it made clear that the responsibility for running

0

18
19

o
the German economy belonced to the German people and that,

MR. GASTON: Clayton, you mean?

therefore, you wouldn't direct, dminister, or control,

except for certain specified purposes. However, T said
I thought you shouldn't 20 at this thing paragraph by
paragraph, but wait until the next meeting and have a
thorough discussion of it. The State Department is using
reparations just as we are all using reperations, for the
reason of these controls.

MR. COE: He didn't act as if--he got himself all set
to oppose that particular doctrine whi ch was one of the
three doctrines in your zeso to nin, so he didn't act as
if he had been there.

At four-thirty four of us ment into I crafting 0.000
mittee headed by Riddleberger. Joe and I went for us and
took care of the language. There we seeised to et into the
document, or at any rate, it is roing to came before
full committee, & modified 1067 statement on decentralization.

ae there, the 2620 of the draft directive to linant as
soon as the President initialed it, and, therefore, they
are in a position--Minant has handed it to the British,
now if this thing is repudiated or substantially changed,

Joe thought that almost certainly they had sent this

they are worrying, "how are they going to explain to Winant
that something they had sent his was finally firm policy

from the U. S. Government? He has now been told it has been

H.V.JR: Yas it satisfactory?

withdrawn.

MR. COE: It was satisfactory to us, and all the lang=
uage that went through the committee was satisfactory to
US. It didn't concern economic matters, but it WAS har
Department modification of State's position. West we were,
H.M.JR: Would you hold your thought a minute?
MR. COE: Yes.

wanted it very clear that what we were engaged in doing

H.M.JR: Do you think that any of the alemos I sent
over to Grew got down to Clayton?

MR. COE: He didn't have it with him. If he did, I
For instance, after : nade 5 little speech
assuming

about at dn't not see it. responsibility for running the that whole he

economy, Clayton said something to the effect

certainly felt that way.

"What about it?" asked somebody.

Despres spoke up and said, "Well, that is that old
that is that fight that has been going on and on.
He one; wasn't acting very sophisticated at that particular
point. I mean, he seened-C

MR. DuBOIS: That is why they insist on calling this
an interpretation.
MR. COE: During the afternoon session Riddleberger
opened up by saying he wanted it asde very clear--some
people seemed to think that this document was withdream,

in effect, doing, is this:

and

1

and there seemed to be all kinds of ideas about it. He

was interpreting the basic document. I said didn't care

what name they called it, but it did seen to me an odd thing
to call a new document which we arrived at an interpretation
when it would consist. we hoped, of striking out & considerable portion of an old document, and sading some
opposite phrases to it.
H.M.JR: Where do you EO from here?

MR. COE: Well, we will take up at ten-thirty this
morning the basic economic stuff; it colles before a full
committee.

MR. DuBOIS: In other words, there is only one issue.
MR. WHITE: I think three of you ought to go.
MR. COF: Are you free? What about you?

20

21

-6MR. COE: Yes. He is presiding, and Hilldring and

MR. WHITE: If you think it is necessary, I can go,

but I don't think it is.

drewn?

someone else--

MR. COE: I think it is highly desirable.

H.M.. JR: You ought to go, Harry.

MR. DuBOIS: This is a major issue coming up.

MR. WHITE: Yes, I will no.

MR. WHITE: Is it clear that my stand WRS to be with-

MR. COE: The Secretary has precipitated this thing,
and they look for--

H.M.JR: That TO S my interpretation.

H.M.JR: I think you should go.

MR. COE: I wouldn't make an issue of it.

MH. WHITE: The four of us will go.

H.M.JR: That was my impression.

H.M.JR: What happens when Grea cames to see me at
three o'clock today?

MR. WHITE: You can't interpret the March 10 document

the way we want it, because it is the strangest kind of
interpretation.
H.M.JR: Shall I make it an issue?

O

it in MR. the WHITE: light of About what this? he said, Why because shouldn't I think they we postpone are

in a better position after we know what Grew said.

MR. WHITE: Not unless we fail in getting what we

MR. DuBOIS: Don't you want to see what happens this

want.

morning?

H.M.JR: Grew went to the President.

MR. WHITE: I think it is better to wait and hear
what Grew says, if he has seen the President.

MR. DuBOIS: I would mait, Mr. Secretary, because
I think, for example, yesterday's meetings here on one

H.M.JR: Why not let Grev case, and see what happens?

point. I think, in effect, we practically won to 6 major
extent.

MR. DuBOIS: I would wait and see what happens this
morning to see if you cancel Grew.

H.M.JR: I think this: I may be all wrong. but I
think there is nothing ventured--1: you want that, 1 will
try to do it. My impression WES this:

H.M.JR: Is there f meeting this morning?

MR. WHITE: This would be my suggestion, Mr. Secretary,
that those three men go with instructions, and those
instructions would be they should try to get there what

MR. DuBOIS: At ten-thirty.

H.M.JR: All right.

we want.

H.M.JR: Is Clayton attending these meetings?

c

22
23

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MR. COE: Mr. Secretary, one thing on what is really
happening as we debate this stuff. judging by the administrative matters, is that you decide to give the Control
Council in Germany flexibility. For instance, when we proposed that subject to the Control Council, subject to the
decisions of the Control Council, there shall be enough
room to do so and so, that tends togo through; 80 as you

slap on the policy, the positive policy tends togo out in
favor of saying it is to be decided at the Control Council.
H.M.JR: That would be satisfactory to as.
MR. COE: But we thought that THE

general.

MR. WHITE: Not only that, but I think as they berin
this operation and begin to see more light in it than they

non do--

I

said, "You just run across it in long hand. I W thdraw
this and will substitute this new one, and that WAS quite
agreeable to him, but he didn't actually physically do it,
you see? But the impression he left with me was be wanted
this thing withdrawn and something new substituted. he
didn't give no any orders, but that is the impression he
left with me, that that is what he wanted done.
MR. COE: Well, in effect, they are withdrawing it.

H.M.JR: Well, if it is there, then--I can't go into
all the explanations, but if you fellows feel that I
actually have to get the President on the thing--but there
done between them, you see.

MR. WHITE: Tie certainly will be more or less adamant
in our major position, no matter what happens this morning
until E have had a chance to talk to you again. We will
either win out or talk to you again.
'clock.

H.V.JR: I have got to stop nom unless you want something clearer, but that would antisfyme, because I would
put myself in the hands of the generals, and there would be
a Russian general there, an American general, and a French

were other people present, and God knows what they have

H.M.JR: And if by not withdrawing it the State
Department can save face--

H.M.JR: You people ought to come in here around two

MR. DuBOIS: You can go even further on this.

H.M.JH: Now, you see what happens. The President
said to me, "What do you mean having just that one document?" I wanted nin to withorn the March 10 one, and

MR. WHITE: I think--let's see what we can get. If
what we can get out of this is satisfactory, we can leave
it in the notes on basic points.

MR. WHITE: Yes.

MR. DuBOIS: Lubin is pressing for a reparations
document. Shell I give it to him?
H.M.JR: Yes.

25

24

-2March 22, 1945
10:15 s.m.

I told somebody to tell Pedrick to go ahead, and he
never got the word.
MR. O*CONNELL: You didn't tell me to tell Pedrick
to go ahead.

INTERNAL REVENUE - TAX EVASION

H.M.JR: I told somebody.

Present: Mr. D. W. Bell
Mr. Gaston

MR. O'CONNELL: You sent Pedrick's letter back to =

Mr. O*Connell

with 8 note to speak to you about it, and I tried half a

Mr. C. S. Bell

Mr. Trey

dozen times.

Er. Schoeneman
Mr. Nunan
Mr. Evans

Pedrick go ahead?"

H.M.JR: All you would have had to do was say, "Should

Mr. Berkshire

MR. O'CONNELL: I thought you wanted to talk more
about it.

Mr. Sherwood

Mr. Woolf

Mrs. Klotz
O

H.M.JR: I ESS in New York yesterday, and I had the
Collectors see me, and Mr. McQuillan. It was arranged by
Mr. Numan. And I frankly BILL shocked. I don't know what

on the thing and be KNOBE--

MR. O'CONNELL: 1 don't think Mr. Pedrick is the fellow
to go ahead, and I sent the Commissioner a meno in which I
suggested we proceed along the lines that were indicated
in Mr. Pedrick's memo, but it should be done through the
Intelligence Unit.

the hell is the matter with your organization that the

Secretary of the Treasury has got to go up to New York
and have these people tell him that people are evading

taxes, and the Collectors sit there on their chairs and
say, "Sure, we know all about it, but we are just Collectors."

H.M.JR: The Intelligence Unit sits up there, and I
don't know what they do. I can't understand it. No monder
J. Edgar Hoover gets places; he has inagination and drive,
and he is original. He gets things done; no wonder be is
on to our stuff. And I an constantly defending you fellows
against him, and by God, I am getting pretty sick and tired
of it. I mean, the organization is just going to sleep,

One of them spoke up, the fellow from Brooklyn, and

said, "Under the law our responsibility, toc. Now,
a

they all know what it roing on, and they are not doing

thing about it. McQuillan isn't doing 8 thing about it.

Where is Woolf? He knows about it, and he just sits there.
And they give me B lot of alible. They have "ot too many
girls and no place to put them, and they have got--they
were told not to recruit people after 8 certain date.
have never had a morea impression. It is just a bunch of
slibis. Sure, they KNOW people are buying furs and paying

and the people are getting away with murder up there.

I

Why, the Chairman of our State War Bonds--I think it
was his own doctor--he wouldn't say--ment to the Chase Bank
and wanted a bigger safety deposit box because he is taking

cash.

all his fees in cash. The only fellow up there that had
done anything is this fellow in Brooklyn who has gone after

a

O

H.N.JR: You never asked me once about it. I told
somebody to 10 ahead, and Pedrick said he spent ten days

27

26

0

-3.

C

cheating that is going on wholesale up in New York, and

the responsibility is O'Connell's and yours (Numan). I

this packet of big real estate. Maybe he has told you
about it.

KR. NUMAN: No, he hasn't.

H.M.JR: He has found some may--] couldn't quite
understand it--they go out there and pay about thirty
thousand dollars for real estate worth ten thousand

dollars. They have some way of writing it out. He found
some way and got cases in there where people are doing it.

They all admit it, and we sit here. There is no excuse,

Joe. This it at least a month old. And I think If the

Secretary of the Treasury says that this is going on, you
and Nunan should prove to me it isn't.
MR. O'CONNELL: I have no doubt that it is going on.
H.M.JR Why not let's do something?
MR. O'CONNELL: The are prepared to do something.

H.M.JR: Go ahead. thy with It is over a month 620
that I raised the question, and Pedrick says he car do it.
Now I all going to let Pedrick do it.
MR. O'CONNELL: %hat is Pedrick going to co?

H.M.JR: You find out. He wrote UE B letter.
MR. O'CONNELL: I have got it.

H.M.JR: I am not going to tell you what he is going
to do. Somebody says he can do it, and the other directors

are perfectly willing, they come in their districts. And
for me to have to fuss with this thing for thirty days with

all the morry I have got--and the only thing Elmer Irey can
think of is going to Florida and find out about a few thousand dollar bills. The organization stinks! It absolutely
stinks:

Now, I am telling you that something is going to
happen, and I haven't got the time, but I hope in the whole

Internal Revenue organization somebody can find out about the

0

mean, everybody sits back and says--Pedrick says he can
do it, so I an going to give Pedrick a chance, and I am
telling you to give him 8 chance and back him up.

They tell me there is a Doctor Rheea up there as
coordinator Give him some help and see what Pedrick can
do. Nobody else has done anything. He said he can find
out there the fur costs and jewelry are and WHO is buying

them, and all the rest. And I would like to know why
somebody hasn't brought it to Charles Bell's attention that
they have
stopped recruiting people; they can't get any

help. My God, you CBD to up to Congress. Nobody has made

any efforts.

MR. NUNAN I think Kr. Bell had news of it.
H.M.JR: Did you?

MR. C. S. HELL: Yes. They had their appropriation
reduced in the deficiency bill. The Senate cut then one

hundred and sixty-five thousand dollars, and Zunan sent out
wires to collectors not to hire any more people because
they dien't have the money to pay them.
H.N.JR You make 6 couple good CREED on night clubs,

jewelry, and fur coats and tell Congress what is going on,

and you can get the money.

HR. C. S. HELL: I think Joe feels now he could have
gotten money in the Senate had you # ppealed it. Isn't
that true?

MR. NUNAN: I wouldn't be sure of that. I said be
ml ght have gotten it. The answer WAS it war the best, in
everybody's mind. We night have been out further.
MR. C. S. HELL:They have cut everyone.

H.M.JR: I have got nothing to show McKeilar that
this thing is going on. Everybody tells me this thing is

going on; everybody has the money; they are paying cash right

28

29

O

C

of our that

and left for everything, and I go up there-and these
fellows are sincere fellows. They said, Mr. Morgenthau,

Kr. Trey and Nunan, and I have a meno which I had prepared
after talking to those people, suggesting we set up a group
of special agents in key cities and operate through the
Federal Reserve Banks, who will get information and give us
information on occasion for Foreign Funds purposes as to
oig cash exchanges and that me expand from that and have

if want us to do it, we will do it. One
you them say said, you "Under the lam it is responsibility

we collect. O.K., we will do it.' Pedrick is raring to
go. He says he can find out where is. He said all be

has to do 10 go to the legitimate people and they will tell

& group of people In each of the key cities starting in
New York, and some of the big ones who would have one

him WILD the people are that are cutting corners. Now, he
found out that they go to a saleman. The salesman

responsibilit that is divorced from their routine work

doesn't sell then the fur costs, say, in Jaeckel's, but he
puts the fellow in direct touch with the manufacturer. And
the manufacturer sells it to this customer all for cash,
and the salemman in Jaeckel's knows it, and It doesn't go
through Jaeckel's books at all.

to approach this problem from the currency transaction
angle, whether through banks, business houses, their stock
exchanges, or whatever you want. That is & result of a
whole series of discussions we have had here. Whether or

not it will work we don't know, but we think it is well

worth trying, and we are prepared to present it to you, and
that is what thought the Commissioner told you yesterday.

Now, I started this thing on the liquor business
down in Florida, and we did it, and we found out how the
wholesalers were doing it, but I would like somebody to
come and say to me it would start from within the organize4

tion. There is enough of life and brains and originality
that they do the thing, and it it like everything else.

N.M.JH: You try that in Chicago, will you please?
Back up Pedrick and help him through this Coordinator of

his district.
Mr.

Kaiser can build shipyards. They can find 8 way to cross
a bridge. You can always find . way if there is enough rute
and courage eround . place to do fl thing, and I an telling
you now it is only # question of time before some other
organization will do It. Congress will know about it, and
they can crack down, and I have got to take it on the chin.
And I BILL not going to take it:

Now, it is right there. Tie sent thirty or forty sen

down to Florida, and when I started that, they said you
couldn't do it. we found the wholesalers; be found houses
all around the country. Some place in the organization
there must be somebody that has some originality and
little courage who will go up and find cut now this thing

is done. Pedrick says he is willing to do it.
MR. 0' CONNELL: May I say something?

H.M.JR: I say give him a chance. Sure.
MR. CONNELL: Well, it isn't as though no one around
here WBS doing anything or trying to do anything bout it.
be have had nil kinds of discussions with Mr. Gaston,

MR. NUMAN: Rhees is head of the Alcohol Tax Unit.
MR. GASTON He is the Coordinator of the Enforcement

Agencies. is properly, Elmer, an Intelligence Unit
inquiry, isn't it?
MR. TREY: Yes.

MR. GASTON: And that is the reason why they couldn't
work with Pedrick and get help and get scale deputy collectors
to help them and revenue agents from Krigbeun and Allen

and make a real project of it. I think it ought to be under
the Intelligence Unit.

MR. NUMAN: I think Mr. Geston is right. I don't
think Pedrick can do it by himself.
H.M.JR: He can, but I want to give Pedrick a chance.
MR. NUMAN We will give him everything he wants in

New York.

31

30

-8O

MR. NUMAN: Yes.

H.M. JR: And when you go up there Saturday, you to

MR. C. S. HELL: You might run into some of the same

and spend 20010 time.

cases.

MR. NUNAN: Saturday when I go up I will net the whole
thing up with Pedrick, Keluilian, Rhees, and anybody else

H.M.JR: All right.

he wants.

MR. NUNAN: I want McQuillan to assign a couple of
men to this plan Joe O'Connell has laid out.

H.M.JR: And if you want to try your way, try it in

Chicago.

H.J.JR: You get some good cases, and I Know you can
ret the money If you show what is going on on this whole
question. They say there isn't . single person in New York
who knows that we pay for information; and if that law isn't

MR. O'CONNELL: I would like to try half a dozen towns.

H.M.JR: Try one first.

right, let's get it on the basis that Custom's has it.

MR. C. S. HELL: They are getting that information

MR. O*CONNELL: The law is perfectly all right.

in New York.

MR. O'CONNELL: To give you an example of some of the
things we get, the Federal Reserve Bank Fave us . report

the other day on the owner of Longchamps Restaurant
and

posited five hundred forty-one thousand, five who hundred de-

dollars in four Nen York banks between March 3 and 13 this

0

MR. O'CONNELL: You don't have to; that is a matter
of regulation.

year. That is about as current and not material as I
could inagine. It is somewhat comparable to the four hundred
thousand dollar bills deposited in a bank quite a while
ago. The Federal Reserve Bank gives us that type of information. The stock exchange never got it for revenue purposes;
they got it as a matter of Foreign Funds Control work, the

MR. NUNAN: Custom's reward is better than ours, there
is no question about it.

similar arrangements with them to get this sort of information
to be used by whatever group is set up to do this job.

H.M.JR: If I as wrong, you fellows cone in and tell
me so, but I keep getting It, and getting it, and your
three collectors said yesterday I was right, but they said

stock exchange in New York. And Schran is equally concerned
about cash transactions and it would be simple to make

me.

H.M.JR: If they don't conflict, it is all right with
MR. O'CONNELL: They are entirely consistent.
H.M.. JR: will they supplement each other?
MR. NUNAN: Yes.

C

H.M.JR You have got to wait two years.

H.M.JR Are you satisfied?

MR. O'CONNELL:If it is based on the percentage of recovery,
according to the law, then we would be worse off because
we couldn't determine the amount of reward until after we
had collected.

nobody had said anything to them.

MR. NUNAN: Mr. Secretary, if they know the law is being
violated, I shouldn't think anybody would have to may
anything to them.

H.K.JR: I agree, but McQuillan is not doing anything
about it.

33

32
10

0

MR. GASTON: FBI has ten times as many men as we have

and they have nothing to do.

MR. WOOLF: He is not doing anything about it, not

pretending to. He has got 8 lot of alibis. He is full of

NR. TREY: None of them have gone in the Army. They
were all deferred.

alibis.

H.M.JR: Go ahead.

H.M.JR: I don't get the feeling Secret Service
is too busy in New York.

MR. WOOLF: Mr. Secretary, I WAS going to say that you
have seen some of the bad things, but on the other hand,
they have done & good job in New York in connection with
certain cases over there. We have gotten reports from
McQuillan in which he has BLOWN 5 number of cases where
taxes have been collected in the last few years, and which
probably are 88 great as any they have had. You have gotten
the bad side, and not same of the good side.

MR. GASTON: They have gotten plenty of tax cases

up there, but they can't-MR. O'CONNELL: They can't handle tax cases, anyway.
MR. GASTON Some of these people can be dragged in

on certain phases of this thing. Rhees' Alcohol Tax men
can be used.

H.M.JH: All right, I have tried to be fair for eleven
years. Tell me the good side. But the fact remains that

sooner or later somebody is going to get hold of this.
They are going to put a smart reporter on this thing and
find out what the situation is, somebody who is 8 good
citizen. Mayor LaGuardia may pick it up any day. I try to
sense these things before they come. have been talking
about this thing for a month. Now, if I were MoQuillan, I
would Paise hell and get men and money, and the fact that
be hasn't gotten them--he said, "I haven't got the men.

I told these collectors to write to you and tell their

troubles about space and men and put the heat on you. That

is what I would do if I were up there is charge of Law

Enforcement.

MR. TREY: It is n question of type of men. The type
of men you have got to have for this are not available; they
are in the Army. We have lost ninety-four of the best men
to the Army, and we can't go out in the streets to find that
type of man.

H.M.. JR: Are you trying to get same of them reassigned

to you?

MR. TREY: Yes. I had conferences with generals in
the Her Department and I haven' been able to get to first

base. We are working on one case with 8 Secret Service ann.

MR. IREY: We have dragged then into situations that
have developed in Procurement, robbed the service in order
0

to take care of that.

H.N.JR: You have fifteen men on Procurement they
tell me.

VR. TREY: Fifteen in New York City?
H.W.JR: Yes, fifteen men. Have you said enough?
MR. O'CONNELL: I would like to say one thing on the
manpower business. The theory of the mess I had written
WBS we ought to adopt what would be an invocation. We

off their work even we

arepeople working on, say, 1941 if cases. might The sacri- thought
ought fice that to take they

of this was to try to get current striking cases and press
publicity and try to get people to get more of an ices in
the back of their heads that somebody is looking over their
shoulders when they are thinking of not paying income taxes.
H.M.JR: You get scale striking cases, and we can go to
up on the Hill and see the Senators. They would love
get none more in New York. They would love it.

35
34

- 12 0

let them complete that, you know, and see how many of those

MR. GASTON: We decided to suggest to Mr. Nunen--

and we asked the Department of Justice to permit us to take
cases on this short form tax report direct to the District
Attorney, which is what we are not able to do, you know.
I don't know whether you know it or not, but that is one
of the biggest handicaps to enforcement; all this stuff
has came around through channels and goes through our
legal staff and then has to go over to the Tex Division
at Justice, and they decide whether any prosecution should
be made.

H.M.JR: They my a case has been resting here since
January.

MR. GASTON: That we are proposing is in minor cases
where we can show people have been doing each transactions
and particularlycases on that form where they are misrepresent
ing the number of dependents-and there are a great many of
those cases--that we can take that kind of case and some

of the other minor cases direct to the District Attorney
without going to Justice at all, just the same as you take

a narcotics case to him.

H.M.JR: Now, gentlemen, prove that I BD. wrong Nothing
would please me more. There is this memo?
MR. O'CONNELL: Right here. (Hands Secretary aelo
dated March 21, 1946.)

H.M.JR: Don't say you tried to give it to me five or

six times.

farmers and their hired men are filing income taxes. Just
pick a route out of Elmira, Rochester, Syracuse, or any
place, see? Will you do that for me?
MR. NUNAN: Yes.

B.K.JR: And I would like to know what proportion-I hear particularly that the hired men of the farmers-practically none of them file income taxes. If you will
get it--you see, we haven't got enough men--I would appreciate
that, but get a good story, and scare 8 lot of people, and
like somebody said, unless you are looking over their
shoulder they get away with murder. They are just thumbing
their noses t'the Government.

MR. TREY: I honestly think that the thing Mr. Gaston
mentioned is one of the most important things; it will accomplish what you want to do.
H.M.JR: There are enough people in this room who ought

to be able to find a way to do it. I will sign any letter,
or I will call anybody up. I will go to see anybody that

needs any help.

MR. CASTON: The important phase of this thing is
publicity--scare people.
E.K.JR: You find 6 couple good cases where R company

bought B fur cost for the wife of one of the members of
the board of directors, or something like that, or 8 dismond
bracelet, 8.5 I FILL told they are doing, and you will get all
the money you want from Congress, but you have got to have

MR. O*CONNELL: I wanted to talk to you about it.

5 couple good cases.

H.M.JR: One other thing, I as supposed to stop and

Incidentally, this one fellow you sent up there--they
tell se he is Erickson the gambler, and he is getting

see the press.
Somewhere around Syracure or some place like that

have somebody go out and just cover one RFD section--] don't
care where, but a complete RFD route--and interview every

farmer and every hired man on that route. I would like to
know what proportion-- just pick any route out of--1 say
Syracuse or Chester--I don't care, but pick 6 route and

twenty-six hundred . year.

VR. ROOLF: That is one of those names we sent.
H.N. TH: How many names did you send up?

37

36

March 22, 1945
10:25 a.m.
13 PRE-PRESS

MR. THEY: One hundred and fifty.

Present:

H.M.JR: One is Erickson, a very fancus gambler.

Mr. Gaston
Mr. White

Mr. Fussell
Mr. Shaeffer
Mrs. Klotz

MR. THEY: He is an old New Orleans use ano was connected with Huey Long.

Miss Chauncey

H.M.JR: The only income he snowed EBS twenty-six
hundred dollars.

H.M.JRI What's cooking?

MR. THEY: We want to check.

MO SHAEFFER: Maturities. There is a little bit
of resentment about the gold story that Lowell Thomas

MR. GASTON: The purpose in going to Miami FEE to

scatter word all through the country, and I think it will

had on the air last night, and there might be a question
on Sylvia Porter's article on Boothby.

have that effect.

H.M.JH: Joe has got to watch Bretton Woods. It is
almost a full-time job, see? and he has got to watch my
taxes and match the Hill. Now, the Office of the Secretary
is supposed to take care of you. I an oing to see what

Mr. D. W. Bell

(Mr. Fussell enters conference.)

0

H.M.JR: I don know who gave her that.

you can do.

(Mr. White enters conference.)

MR. NUMAN: les, sir.

MR. SHAEFFER: She dug most of it up herself.

H.M.J.: And your collectors up there would like to
do it. They would like to do it. 1 don't care whether it
is Pedrick or not, but I would give him a chance. He said
he could do it.

MR. GASTON: It is in the records, and anybody can
look at the clippings and get a story about Boothby.
I didn't see her story, did you?
MR. WHITE: Yes.

. NUNAN: Yes, sir.

MR. GASTON: Is it available to anybody that wants
it?

MR. WHITE: No. I don't know--she's got some of
that stuff, but I never knew the fellow had been in

trouble over there. I have it in the office.

0

PRECISION

MICROFILM

MICROSTATA

38

H.M.JH: She was alert.
MR. FUSSELL: Mr. Secretary, they are kind of worked

up about that Kussian story. Wouldn't it be a good idea
il you opened that subject yourself?
MR. WHITE: Was it on the air?
MR. FUSSELL: Yes.

H.M.JR: How would you handle it?
MR. FUSSELL: I would simply tell the circumstances,

I think, that it was all off the record and-it.

H.M.JR: No it wasn't. I told them they could use

MR. FUSSELL: No, up until that point, and then they
overpowered you and you let then have it.
MR. WHITE: I think it might be said in answer that
rather It came up in connection with--

H.M.JR Why not tell them the truth? I met with
some radio commentators up there, a group of them. I
have press conferences, why can't I meet with radio
people? That was what --his-name that told the story.
Mil. FUSSELL: They claim they knew the story before
and they had been turned down.

H.M.JR: Well, let's see.

All right, I was overpowered. (Laughter) If I

relied on these people for Bretton Woods, I wouldn't
get anywhere.

PRECISION

MICROSTATA

TRADE MARK

MICROFILM

ROLL NO

March 22 1945
11:12 A.M

,

,

39

40
C

0
HMJr:

Operator:

HKJr:

Hello.

-

Mr. McCloy 10 out of the office and won't be back

until after lunch.

HMJr:

Well, is his secretary

Operator:

Yes, Miss Werner is here.

HMJr:

Well.

Operator:

Go abound.

HMJr:

Hello,

W:

W:

Mica

HMJr:

Now are your

W:

HMJr:

HMJr:
V1

Very well,

HMJF

Where's your bose?

V:
W:

Well, be want off to a meeting and he von't be
back for avhile,

HMJr:

I: be over at the White Mouse?

V:

No. sir. He's going there eventually, but he's

HMJr:
Mr

HMJr:

Well, the reason I called - he cant = a mozeane
through Xr. White that on was ging to the White

House.
W:

That's right -- at 12:30.

HMJr:

on.

W:

Yes,

HMJr:

: ane.

We

Do you vest to talk to him before that? I'm not

sure can get in touch with him, but I'll try to

find him.
HMJ:
W:

See if you can.

All right, sir.

Well,
that's good. In the staying out there now
for while?
She's going to stay for a while yes. She doesn't
vant to move too often. I think the will come to
Well I can't blase her for not coming back here
pretty soon, because it is going to get too vars.
Well, the and the baby are wonderful,
Oh, fine,

Martha is too.
Very good.

o

not there now.

HNJr:

oh, the grandchild is wonderful and 00 is Martha,

U.S. when we get up to the farm.

VI

Good morning.

Listen, how is your grandchild? I know the
grandchild's mother.

HXJr:

HMJrs

Werner:

If you please

0

Thanks for inquiring
All right. Goodbye.
Goodbye.

RON TRADE MARK MC M

ROLL NO.

42

March 22, 1945
12:28 P.M.

HMJr:

Mr. Ted

I told them to send you a copy of my press

conference.

Gamble:

Fine.

HMJr:

I spent a half an hour talking about War Bonds.
Well, that's good.
And I think I did you some good.

G:

HMJr:

41

O

HMJr: cont. tomorrow morning.

Fine, fine. either one will be satisfactory.

G:

HMJr:

Well, I might agk you one question while I have
you on the abone. Would you object to giving
us -- giving Levy 15 minutes tomorrow to make
n couple of short transcriptions?

G:

Well, I'm glad to hear that.

G:

HMJr:

HMJr:

How long are you in town?

G:

I'm here until timorrow morning.

HMJr:

When do you leave in the morning?

HMJr:

of volunteers

HMJr:

To go to Richmond.

HMJr:

Oh. I've got an impossible day.

G:

Yes.

HMJr:

After you've read the press conference, would you

G:

Yes, air.

call no?

you get away.
HMJr:

Seturday is perfect.

HMJr:

I'll speak to Fits nox.

3:

Fine.

HMJr:

text on then.

Governor-General of Canada is coming in at 4:00.

Yes.

HMJr:

Are you going to that Press Club Dinner tonight?

G:

HMJr:

No, I as not.
Well, you read this thing and then give me a ring, and
we'11 get together either today, or maybe 8:30

I can do it Saturday if the stuff 18 ready -And the other is to launch the Treasury Salute
programs. They both will be short -- they both
will be very easy. We have already prepared the

I've got two things, I have to go to the White
House. The Earl of ---- whatever they-- the

G:

Well, I could do it such better Saturday morning.

G:

0

0:

HMJr:

Tomorrow?

That's right. We want to make the record before

G:

Richmond. Yes. And I'm back tomorrow night and
I'11 be here Saturday.

G:

Yes, I don't think I could.
I tell you what we want them for. Ve want one
for a closed circuit broadcast to our millions

G:

I leave on the plane around 10 o' clock.

G:

Well, I think from your standpoint 6:30 would be

better.

HMJr:
0:

Well, has anybody over here seen them?

Well, velve just --- I have it and was going to
bring it to the meeting this morning. I sent it
over to Gaston.

HWJ:

Send it to Fuenell.

0:

Fuenell. Fine, I'11 have our boys.--

HMJr:

And, I'll give Levy time Saturday.

43
44

March 22, 1945
12:30 p.m.

0
0:

Fine. Thank you very such.

HMJr

Thank you, air.

G:

A11 right.

DEINDUSTRIALIZATION OF GERMANY

Present: Mr. White

Mr. DuBois

Mr. Glasser
Mr. Coe

Mrs. Klotz

H.M.JR: I can't begin to overemphasize the secretiveness of this thing, but Mr. McCloy WBS kind enough to stop
in on his way to the White House and he had this meeting

with will Clayton. They had the meeting but they definItely

excluded us. They had prepared a paper in answer to the
Treasury document which he says la wholly unfair to the
Treasury. He said to Clayton, "Don't you think the Treasury
should be here when this thing is being discussed, and
furthermore, don't you think the Treasury should be over
at the white House when this meeting is taking place?

Clayton said, "You are absolutely right, and left the
room. He evidently talked to Grew and came back and

said it was set up so that we shouldn't be there. ne
said in this document should be strong centralization

in order to maintain peace in Germany, and he said, "Don't
you think it should be the minimum possible? He said
be tried his best. He said he made his position clear,
that he wasn't interested in the economic thing, but
as a private citizen he did all be possibly could. The
White House told him to bring Lt. Colonel Boettiger with
him of the Publicity Section, so he will be there to
present his case.

MR. WHITE: At twelve-thirty?

H.M.JR: At twelve-thirty, and I would be--but as I
say, I have a ninety-five percent assurance the President
will once more read my document before he sees these people,
so I will be there. Two of my documents right now are on
his desk, and they will be brought to his attention to
refresh his memory.

46

45

-3-

-2-

MR. WHITE: That's true, but I was questioning his

MR. WHITE: Did this meeting grow out of Grew's
request to see the President?

H.M.JR: I don't think he wants to go quite so far
as we do in deindustrialization.

I

H.M.JR: Yes, in part, and I can only guess.
don't know, but you can put two and two together, I

philosophy.

should think the fact that Boettiger is there, as to

MR. WHITE: He has made that clear.

who arranged the meeting. What?

H.M.JR He doesn't believe in a peace for Germany.
He doesn't think it would work. He doesn't want the
Aray commanders to have the job of running these areas.

MR. WHITE: You can find the name Boettiger some-

where along the line.

It Isn't feasible. I don't think in either case he goes

H.M.JR: Yes. So I said, "It's strange," and he
said it was a peculiar way to run & grocery store. I

quite so far, but he goes quite a ways down the road with
us.
He is against Leon Henderson; he is against
Boettiger's philosophy, which is one and the same thing,

said, It is strange that Lt. Colonel in & publicity

section can take an interest in the economic future of

so--

Germany with you as Assistant Secretary of War being

told by the Secretary of War that you can't. I said,
"Goddamnit! You are interested in the future of your
children. Go ahead and talk up over there. He said,
0

"I will.' I said, All right. Aren't you interested

in a future for your children? Make your position plain

MR. WHITE: I suppose he will call you back after
the meeting?
0

H.M.JR: He will, or he will drop in. It is very

and then talk. He said, "I'11 talk.

decent of him. But you fellows have to protect me on
this thing.

MR. WHITE: What impression did you get about the
way McCloy really feels?

is humanly possible.

MR. WHITE: I think you have done everything that

H.M.JR: I think he is trying terribly hard to be

square with me.

MR. WHITE: I think that's true.
H.M.JR: The fellow didn't just have to drop in.
I have never caught him telling an untruth. I don't
believe--if he told Clayton we should be there, it's
because

he knows 1 could check up, and I think he honestly true,

feels--he said again and again he has fought German busi-

ness men all his life. He said, "You have got to bring
goods into Germany in order to control prices. He told
that to Clayton, and he said, Are we going to import goods
into Germany? Now, I think this, Harry, and I can always
be wrong, but certainly he has given every indication of
being on the level with me. He honestly Is for the minimum.

H.M.JR: I can't do anything more, and I have made

sure personally, as an errand boy, that it is on the
President's desk, and he is going to be told to read
that thing before he sees these people, and I, in a way,
would just as leave have that document there to speak for
with the President than to get into an argument with then.
there.

me

MRS. KLOTZ: It's just as well that you got them

H.M.JR: I thought 1 would let those documents talk
for me. They are good documents. There are two documents

there, the one to the President and the one to Stettinius.

But the cards are stacked against us because here is McCley

taking the position that he monttalk on the economic front.

48

47

-4-

O

0

Boettiger is making this a cause. His personal prestige
most likely is at stake. The stuff has already gone to
Winant telling him that--

H.M.JR: What's-his-name told him, "I don't think
the American public is going to like this course. The
American public will never know it until it is a meas.
The thing that I think he is absolutely convinced of is
it isn't up to the United States Army to try to maintain

MR. WHITE: There is one big thing entirely
irrespective of what does happen and that is events.
They are going to find after they are in there that they
are not going to be able to--

the German economy, see?

MR. WHITE: We have done & job on him and I think

you are right. I think he is & little frightened of

H.M.JRI There are two things. McCloy said, "I
told then that Grew must tell the President that he has
to tell this to the Secretary of the Treasury face to
face, whatever his decision is. I said, "Yes." Can
you imagine him sending for me to tell it to me? But,
he tried his best to get me in there.

the attempt and that--

MR. GLASSER: He feels quite strongly there.

MR. COE: I think that the result of it anyway is
bound to be for the President to tell them to redo the
document, because War has objections.

MR. 00E: And Clayton checked with Grew who said

it was set up the other way?

H.M.JR: Be said he left the room and must have
talked with Grew,and he came back and said it couldn't

be done.

MR. WHITE: There might be another interpretation,
Mr. Secretary, and that is that the President knows
your views. The President himself is sympathetic with
your views and he wants to give the other side a hearing,
and therefore he doesn't want a debate.

H.M.JR: That isn't the way it happened.
MR. WHITE: No?

H.M.JR: No. Somebody told him, "Don't have

Morgenthau here, he only exoites you, which I didn't

me had there

do the other day. I didn't excite him at all.
don't want there. My God! They Boettiger They
to be on the spot to keep me from making my case.

MR. WHITE: Well, you don't have to be there in
person. Your documents and ideas will be there.

0

H.M.JR: Oh, McCley said be W.B.B very well pleased
with the way the thing was going along yesterday.

(Mr. Du Bois enters conference.)
H.M.JR: He was very well pleased. He said he was

very well satisfied. He said he didn't want White there.
I can't stress too much the extreme secrecy of
what I have just told you.
MR. WHITE: Well, I think you couldn't possibly do
any more.

H.M.. I can't do any more than I have done, Harry.
MR. WHITE: No, you couldn't possibly, and the fight

is not lost. Even if they win,It is not lost. There is

a long stretch between their making this directive and
the result, and they will change the orders and the
administration policy, not once but twenty times. It
will be much like the original OEM was here in Washington.
That's the way it will be, only worse.

49

50

O

H.M.JR: They will take this up on the European
Advisory Committee opposite the Russians.

MR. COE: State said yesterday in the person of
kiddleberger that they didn't intend to take this draft
directive up at the European Advisory Committee. They
weren't going to take it up anywhere. It was to be
for the guidance of proper American officials. They
weren't going to issue It to our Commander in Germany.
H.M.JH: Why do they send it over in such a hurry

to Winant?

MR. WHITE: How can they have a centralized policy
if only America knows about it?
MR. COE: That's what he said.
H.M.JR: They used the argument that they have to
have all four Commanders treat Germany the same way in
all greas.

MR. WHITE: That's the purpose of Leon Henderson's

trip. You have to have that similar-MR. DuBOIS: McCloy and Lubin are seeing him?

H.M.JR: Also Boettiger.
MR. DuBOIS: Lubin told no that.

H.M.JR: I'll see you fellows a little later. You

tell Joe.

MR. WHITE: You might be interested in a brief
comment on this morning's testimony. Fraser is not
as good as Burgess. He is a good Influence. lie
made & number of extreme statements which will be
possible to demonstrate.

H.M.JR: Did you fellows bring in BIS's letters?
MR. WHITE: What?

H.M.JR: Fraser's.

MR. WHITE: I don't know. We will get a complete
report.

MR. DuBOIS: I might mention on the reparations
thing we went over it in detail and Lubin agrees on
almost every point. He plans to take it up with the
President before taking It up with State.

March 22, 1945
2:45 P.M.
HMJr:

Hello.

Operatori

Mr. Grew

HMJr:

Hello.

Mr. Joseph

52

51

Gt(cont.)

bit of work. I'11 get at it as soon as possible,
and then I'll let you know. It will be heloful to

have a tolk.

Grow:

Hello, Mr. Secretary.

HMJr:

Well, I'm going every Saturday evening.

EMJr:

How are you?

G:

Friday or Saturday?

HMJr:

Saturday.

G:

Saturday evening.

G:

HMJr:
01

HMJP:
0:

How are your
O.K.

HMJr:

Just back?

Just back this morning.

Well, in regards to the German matter. I've gone
very fully into the paper you gave no.

G:

I think we can have it certainly before then.

HMJr:

: should hope so.

G1

106Jr:
0.

Yeah.

HMJr:

Cn D good many of the points, I think VII APP not

DD for spart. the President sent for to this

G:

morning.
C

HMJr:
0:

Yes.

And I had a YORT loss talk with him. As if result
of that talk I'm BSV drafting . review order which
I think is going to be good to be used to bring our
ideas together. I think It good deal of 1: 1.
roing to be it question of #pelling things out -that in, more definite than they have been spelled
out.

HMJr:
0:

I see.

Anyway, I don't think there is any good in ay caning
up to see you until : get that paper in order.

HMJr:

A11 right.

0:

I'd like to postpone 11, 17 I may, and than I'll

HMJr:

When 40 you think it will be?

0:

Well, I don't know. It is going to take quite a

let you know in due course.

a

Yes. to -

HMJr:

Yep. All right I'11 get in touch with you then.
Thank you.

All right.
Goodbye.

March 22, 1945
2:55 P.M.

5

EMJr:

Hello.

53

O

T:

And sold that he had gotten If massage that he YOS

Grace

Tully:

Hello, Mr. Scoretary.

MMJr:

Good afternoon.

T:

How are you now

HMJr:
T:

(Laughs)

Choog --

MMJr:

Did he get a chance to read that paper?

T:

I took then in to him, and give them to him jost
Almost as soon as you left.

HAJF:

Wonderful.

T:

So he had all the background there.

HOJF:

Fine.

T:

which : gays his too.
Good.

Grey was supposed to 0008 OVER here at three. and

he just phoned and said he had is long talk with the
President, and the President has gon into great
detail on what he vented.
T:

HMJr:

T:

HMJr:

Yes,

And now he was going to redreft it and it would

take . 10t if time.
I are

So evidently the President mist have sono into

great detail. When I got beek here -- this is
Just for you.

0

to bring - that he MBS to be accompanied by John.

T:

on.

MArr

Look - PC my inspicions --

It

Yes, you were right there. (laugh)

MMJr:

Not by General Hilldring but by John.

T:

T:

Yee, air.

SMJr:

McCloy dropped in on his way over there.

Abult, yes.

MMJr:

Well, anyway --

T:

Mell, about this -

MAJri

T:

So I's sure he 016 read it. because 10 they same

going to discuss it, I's sure he vented to be filled
in on it, and I also found the copy of the directive

HMJ:

Yes,

I'm coins to see If I can find out how they are
going to redreft it.
Yesh. will, I timesing you and McCloy probably can
talk about it.
Yeah, : think McC1ay has been simply swall about it.

I:

Well, you 11 get . fill-in there on what happened.

TOWS:

Thank you.

7:

Goodbye Mr. Secretary.
Goodhyee

Heroi 1945
3:00 P.M.

%ellog.

56

0

DPRECISION TRADE MARK MICROSTATI - MICROFILM

58

Hericost)

and

take

Ko:(cont)

Then

Holder
No:

59

HNJr:

Some degree of central control?

e

No:

Yet, and then Clayton said, *Well, there will be no
disagreement about that. We'll accept the Arry's
view on that 80 for as zones and their control
counselors are concerned." That's about the story.

HMJr:

Well, : think are form about 100%

No:

I would think NO. I would think no.

HMJr:

BECRUSS the only thing he gentioned MRS about

Mc:

Yeah, yeah.

HMJr:

And I MBE just repeating that you follows told no.

No:

Yeah, yish. He mid, General Hilldring self, 11:11,

centrol control-with the thing that : told his.

HMJr:

If you to in - the enerals - the first thing they

would do would be to say, Well DOM are are going to
run the postal service?
No:

104Jr:

No:

HMJr:

5

That there would be, no recognized, 2008 degree
of central control and he WAS ready to approve that.

1

Mo:

8

Wonderful.

No:

I

HMJr:

HMJr:

.

Kc:(cont)

something that would he suitable in the lihgt
of that conversation. But the general tone that
the President took was definitely one in which he
didn't agree with the strong emphasis upon centrol1zation that runs throughout March 10th.

I

-5-

Yes,

And I told that story to the President At the
time I told it to his, be argued a little bit with
no, and naid well, I don't KOOM whether you vent
a universel postal service all over Germany. 3-7
Yes.

So : said well, I'm Just telling you what the Aray

would do if you did nothing but leave them with 1067.

Mc:

Yes,

HMJr:

Was 1067 mentioned?

Mo:

1067 wasn't mentioned.

.PRECISION

TRADE MARK

1-A
61

62

2-A

0

M:

HM Jr:

He merely nodded his head on that. He just said,
"Well, maybe so. "Of course, we did agree to
reparations, he said, and then he came back to the
formula to the extent necessary to accomplish the
objectives of our occupation. I think that he
would say that probably you had to you should
put something into 1067 that is not in there now.
He kept coming back to this public service business.

Well, if he did, it is my fault, but on the other

hand, that's what you people
Mc:

Well, that's right, and I don't mind - we can modify
1067 without killing it, and I think it night be
desirable to do that, and I think that when we get

HM Jr:
Mc:

HM Jr:

Mo:

Mc:

But I mean I leaned over backwards trying to represent
the Army's viewpoint.

But it seems to the he hit right on the nose. When
we got through and were out there, Clayton said to

me In the hall he said "I want you to understand
that I came into this thing cold with only the

education that I got from my own people and
am beginning to see now things that T didn't see
before, and I am quite ready to say that I am convinced
now that March 10 as it was drawn up, is It mistake."
Isn't that something?

That's something. I think I am going to try to get

hold of Clayton for lunch tomorrow.
Mc:

Yes, I think that is the desirable thing to do because
he's a sensible fellow, and he's the one who is going

to guide this thing. And I don't believe that you are
going to have any difficulty with him.

O

Oh, yes, be tried to get him to okay March 10th, but
the President didn't do it.

Mo:

But that was I think . well, I think he just wanted to
maintain that position, that's all but not because
he really felt or knew very much about it, but that
was
lineit.he had been given to sustain, and he
triedthe
to do

HOW Jr:

Who tried to do it?

Mc:

Grew.

HM Jr:

Oh.

Mo:

But Grew SAW that he wasn't on the line with the
President on that.

HM Jr:

Well, I'm - I'm a new nan.

Mo:

Yes, that was pretty good.

I

HM Jr:

No, and he was taking the old State Department position.
He tried to get the President to okay March 10th.

Well, that's wonderful.

went away quite chastened over this business.
HM Jr:

No, but he didn't know much about it.

HM Jr:

around the table, and Riddleberger and the others

are there that we're still going to have sone fights.
But I believe these fellows the State Department

I don't think that Gree was too good in this thing.

HM Jr:

I'm 6 new man. Now let me ask you this-- If I

have Clayton do you think you should be there or not?
Mc:

I don't think it's necessary. I would just as soon,
but I think you can do a good bit. I think that Clayton
has an idea that there is an irreconciable difference.

I think he has the idea in mind that what you are
advocating is fundamentally an elimination of all
German industry, and he thinks that is fundamentally
antagonistic to the position that he as business man
or sensible man if he were running it would follow.
But I think that he doesn't really understand your
position,
and I think it would be very helpful if
you talked to him.

64

63
4-A

3-A

O

0

HM Jr:

HM Jr:

Well, the only reason I hesitated was because you

sort of drilled it into ne that you didn't want it

Mc:

to seem that War and Treasury aren't

Mc:

Uh huh.

HM Jr:

I'll talk to him and

Mc:

But on this basis, can't we really get together and
have a uniform policy? I believe we are pretty
close to it, and I would like to do It so that we can
clear away the underbrush which he thinks is pretty
much impossible now. He think's there is an unsolvable

EM Jr:

Yes, well I think I can be helpful.

Mo:

Yes, I think you could be helpful in that, and I think
Let me ask you - how was your assistant?

Mc:

Well, he WAS all right?

HM Jr:

Did he open his mouth?

Mc:

Practically not at all. He didn't say hardly 8 word.

HM Jr:
Mc:

I think he did. I think they were on the table.

EM Jr:

But you don't know whether he referred to them?

Mc:

No, he didn't speak of then at all. And I think

Mc:

No, the new one - the new one.

HM Jr:

Yes.

that issue, and I don't think It is in the right form.

And I think he was right on that, too.

the whole idea was to have a new set-up & new
thing, and to see if the State Department, with
the guidance he gave this morning, couldn't come
back with a relatively short document which would
state the case. I would rather gather that the
President is trying to take the view that was
more towards control than you would go, but not
fundamentally . but a long way off from the tone
that the State Department was taking.

Well, I don't think that we are apart at all because
the control that you people explained to me would take
place when General Eisencower wont there - you would

have to have . telegraph system (?).
Mo:

Yes, that's right.

HM Jr:

But that's 6 long way from saying how many grans of

food and what price and all the reat of the stuff.

I mean it is one thing to have communications and a
railroad, and it is something else to have an OPA.
Mo:

Now he talked again about the rationing, and he said,
"Well, now, are you sure that you are going to need
rationing?

He stuck up and said, "Well, all I think this does,
Mr. President, is to state the issue between the State

and the Treasury Department, and I don't think you ought
to be asked to approve something which is fundamentally

0

HM Jr:

And when it was attempted to get the President to
approve that particular paper
March 10th?

Mc:

0

Well

HM Jr:

Well, that was good. I wonder If the President had my

Mc:

it is primarily between you and him on that.

HM Jr:

No, he hadn't seen it before. He didn't even glance
at it at the meeting because as soon us he san how
it was stated, he immediately caught that up so as to
protect the President.
papers with him.

issue.

HM Jr:

Hedn't he seen it before?

HM Jr:
0

Who said that?

1B

66

65

S-A

O

No:

100Jrs
Mc:

The President. He said, "Are you sure you're going
to need rationing?" Well, Clayton said, "I think
you are with the limitation of the food that you are
going to have. So he said, Well, why not let
nature take its course on that, and see whether we
do need to have rationing. Maybe me do, but let

VEP again.
No:

Mc:

And he said, *Mind you - I don't want to tear down
anything. And then one interesting thing - he took
the phrase that was in one of the papers I think
it was March 10th he took "the elimination of German
industry' and he said, "I don't want you to eliminate
German industry - not at all. He said, "I want you
to change the character of it, but I don't want you

true.
Mo:

HXJr:

Hot

HXJr:

mines and doing all those things. I don't want
to destroy industry. I want to have German industry
maintained to the fullest extent necessary to maintain
the Germans so that are don't have the burden of taking

Mc:

"I think that means 8 very substantial degree of
preservation of the German people industry, but
I an very leery of their exports."
That's the President?

That's the President - yes. He said that If we can
only get then to a point where they really do the
things for themselves and we try to eliminate the

HOJF:

Do you mind that?

HMJr:
Ho:

he thought we have to feel our way and get experts

HMJr:

Well, that's & little bit different than he ever talked
before, but the main thing that John tried to tell him
at lunch two days ago about the Henderson plan

0

run the thing. You supervise, etc. but nothing else.

No, not at all, and I'm BOXIOUS to 826 what his
Impression of the conversation was as related to

Right.

And to goe if he went AWAY with an idea that was
different from =ine - fundamentally different from
nine.

over there to see what the answer to that really is.

Well, we didn't speak of Henderson - the whole idea was
to control them as little as you can. Let the Germans

see it -11 his I want to with him, and get

in on the working of the paper through Oliyton.
Right. With the idea of coming to an agreement
which we can all - on which MT can all proceed.

sine.

war potential they have, then he would be happy.

Mc:

He has, there is no question about that
I'm going to cell Clayton nox, tell his : want to

No:

No:

He said it was a difficult thing to do, but he said
HM Jr:

Well, that's what I told Grew, and : told Grew to
see the President and get it confirmed and he

And do you sind if I th11 Clayton that I've had
a taik with you -No, no, not at all.

HMJ:

care of them.

Mc:

He told then expressly that he wanted it rewritten.
ine.

to eliminate it. I'm not for throwing salt into the

HM Jr:

Yes, yes.

But now that the President has told them that was

situation come to that conclusion.

Well, he hasn't changed . bit. He hasn't changed.

Well, I'm over 80 migh obliged. That gives so
the picture and I'm VAT happy because I ves in
the vory enbarreening position, you ent. with
John saying that the President agreed with him,
and with a) saying they wanted March 10th done

the man who is on the ground there who sees the

HM Jr:

That's the story.

Well, John, 11 = sound milly to any thank you

30

67

2B

68

O
0

HMJr:(cont) because when I's treated squarely it is so
unusual that : have to any thank you.
Mo:

HMJr:

No:

HMJr:
Mc:

101Jr:
Mc:

HMJr:

Well, 1: has happened to rarely in Washington, 80
that when # mm treate the my I'm accustomed to
be treated in private life, it is something unimum
and I 10 any thank you.

No:

Well, I's very - you don't need to may that. I hope
that I always -- that M+ always Well, -

What time to you -

No:

I leave my office -- I leave home at 6:30.
I'll be here tomorrow morning at the office at
querter to nine.

Mc:

I'11 come right to your office. It won't take
ten sinutee.

Well --- to a pleasant supprine.

HMJr:

A quarter to nine tosorrow morning.

I think x will CODE out of this thing otl right.

Mc:

Fine. Thank you very such. Goodbye.

Now, by the MAY, there's another thing that I don't
want to talk about over the phone that case up

10WJ:

What angle is that?

No:

on, what - = part in the thing.

HNJr:

on.

D

The President made FORE cracks during the time--

during the conversation there that shook no a
good 6tt. as to what role he wanted 13/5 to ay

in this business. There's an exful lot of background in that and I wanted to talk to you about
It before the Ests too far down the line on it.
Well, I'm leaving tarn Daturday night. Anytime between now and Saturday night that you want to make

it.
Mo:

What are you -- are you busy tonight?

HMJ:

I'm going to that White House Correspondent's --

Net

oh, yes.

HMJ:

Do you want to neet as at the office?
Support I --

HKJr:

KMJrs

To are right about the dann thing and there is
to such intrigue around here that the only way to
to = thing+-

to talk to you which you Got . chance.

HIGH

It would only take ten minutes or to to talk to

you about it.

Oh, for goodness makes.

there - F personal affair but : == very anxious

No:

htJri(cont) you us.
Mo:

I could start early in the morning. I could pick

O

RECISION

MICROSTATA REG.U.S.PAT.OFF MICROFILM

TRADE MARK

ROLL NO.

March 22 1945
3:25 P.M.
70

1

Mr. Joseph
Grew:

Grew speaking.

HMJr:

Yes.

G:

0:

MW

That paper will be reacy Very shortly nov :
have OTHER to the station to seet the
visitors coming from Canada, but 10 you wish
will Clayton can taxe the per around to you

Q:

Well, here! the thing. Magoin to #### the -I'me
got Dr.
Sunrez. the Mexicon Finance Hinis ster
at
four.
Hello?

0:

HMJ
0:

HKJr
G:
(

HMJ:
0:

G:

HIGH
0:

HKJrs

Yell why not?

0:

Well, ( laucheld Aceen's 2005 enough about
that tell. : @@@@@@@ the President and ---

for his to Interpret hisself, don't you think

Yes,

TO.

HR

Then I's due 01 the White House at 9:30.

That's right. Yes, sir.

G:

5 g'olock?

know. cell take the paper over to

wrong espharis on something or ther dan't

you which will prilect the view expressed today

Yes.
HKJrl

At your office%
Yes.

All right.
Past would be -

I'll age in and 17 don't American to the
controry, hell be there At
At 5 then.

HMJ:

0:

HMJr:
0:

Yep.
3:

HIGH:

HOJr
1

I said what the President mis it for the to

And 1: Mr. Clayton couts be him et 5.

You've got it that fres?
0:

Pardon?

International himself. I sean, if Olayton or
tried to Procest weat the unit MY might gut the

HOUSE
G:

Well, yea. I don't know has such be will be
free to tail GTOP what the President said,

HOPE

G:

HKJr:

Will 204 tell his that?

but ---

within the ext half-hour. Would you care to

have him do 117
HMJ:

Yes.

Yes. It's 2 trief SSSIT. : home man #111 like
15 I thing you will.

I' like Mr. Charton to give - the become
of was pappeard today.

0:

HMJP

Yeah.

Act I think Well,well.
leave 1: to Claytes 202 at. We Set along
very

All right
Good LIBY : Hr. Clayton
I'll SEA his to be there at 5 o'clock.
Jose tall in : 0254 2702 with the offer
Yes.

Sington and I understand each other very well

All right. Fine. : hong that will be helpful
All right. By:

March 22. 1945
3:29 P. M.

-271

0

Mr. Willies
Olayton:

How are you?

HMJr:

I'm all right. How are you?

0:

Fine.

HMJr:

Grew just phoned me -- you sound = mile Avery.

C:

There's something wrong with this chone. Just a

HMJr:

Well, I don't think - let's make a start anyway.

C:

0. K.

HMJr:

HMJr:

to the Blair House.

HMJr:

I can hear you now.

HNJr:

0:

Can you hear as better?

C:

Yeah, but Est some --- I hear you now.

0:

Yes.

HMJr:

Can you hear ne?

C:

Oh, fine.

HMJr:

He said you would come over at five.

oh, five? It wouldn't suit you mooner, Mr.

C:

Secretary?
HMJr:

Well, my trouble is that I've got to be over
at the White House at 4:30. Dr. Suarez is
Oh, see.

HMJr:

But --

All right. Well, I can, --- if I could run over

0:

there in about 2 minutes -- be there in about five
or 10 minutes, : don't think it will take U.S. long.

HMJF:
0:

That multe as.

Well, I tell you, I'll be there by 20 minutes, or
st the very lates:- a quarter to four. - a: your
office.

MXGr:
0

C:

Yeah.

And I don't think it will take more than 10 sinutes.

Oh.

Some Russian friends that we want to show a little

attention to. Guess 11 would be a little diffi-

cult.
HXJr:

Well, by all GORDE taxe care of the Russians.

(taught) That's what we are trying to do. ( laughs)
But I could come over almost any other time tomorrow. But I'll be there at about a quarter to
four or fl Tittle before.

C:

HMJr:
Ct

EMJr:

coming it four.

C:

What have you got on for lunch tomorrow?

I's very sorry, I've invited n lot of fellows

C:

minute.

HMJr:

: was going to call you up before Grow called ne
and nek you 1: you didn't vant to have lunch with
net tomorrow on this subject. I know ve wont get
through in ten minutes.

I'll look forward...
And we'll talk about it then.
I'll look forward to seeing you, and I told Mr.
Ores that I's rure that you end I could got along
#11 right.

C:

: think no.

0:

In it agreemble to you if I have Harry White present?
Oh, certainly.

HMJr:

It 107

HMJr:

C:

By all means.

HMJr:

Thank you.

C:

Bye.

72

-2-

March 22. 1945

4:06 P. X.

73

0
HMJr:

C

HNJr:
Miss

Mr. Clayton.

Hello.

I see. Yell, now, he has this State, War, Navy

W1

Warner:

Yes, air.

HMJr:

Mine Werner.

V:

Yee, sir.

HMJr:

This --- Will Olayton 10 here.

W:

Yes.

meeting at 10:30.
HMJr:

what's that an?

V:

Well, that's the senting they have every Friday
at 10:30

HMJr:
W:

HMJr:

And be has been kind enough to bring over

W:

Yes.

HMJr:

On Germeny.

W:

HKJr:

the document that VA are all interested in.

Yes.

Yes.

W:

HMJr:

And he'r ready to cancel all of him appointments
tomorrow morning, and devote tomorrow morning

to this.

Wt

EMJ:

HMJr:

W1

at those things anyway.

Tell his Mr. Clayson wante to get this thing through.
Yeah.

W:

HKJrl

He wants to it down with us. We're going to sit

here. See?

Yes, air.

V:

EXJr:

And was are giving to start at 9:30 tomorrow morning.

Yes, air. I understand.

VI

HMJr:

Nevy. Representative of the Secretary. It will
be the Under-Secretary oh, let's 40 something --- the never do anything
be back until about 5 o'clock.

Yes,

And I's going to nex Xr. McCloy and General Hildring
to do the same thing. Hello?

State, Year . and -

Well, I'll tell his and I'll call you. He von't

W1

Now Mr. Clayton is very anxious to get this thing
cleaned un.

But with that exception I can start AT 9:30
and work right through the morning - 20 can

HMJr:

And now I tell you - I could do it a little bit

differently Mr. McCloy wanted to talk to as per-

ronally, you see?

Yeah, -I hear you. I'm Just greeping.

Yes, sir.

HNJr:

Well, you GRSP, and onite another breath.

Vell, all right.

HMJr:

Ha he got a car?

V:

Nov when I talked to Mr. Mc01oz about mention him

V:

HMJr:

Yee, air.

W:

at quarter of nine, I forgot that I had or acpoint-

: could be - 17 be would pick ne un at Wyoming

to keep.

2029 Connecticut.

ment from nine to nine-thirty tomorrow that I have
W:

Yes.

EXJr:

Out of the Treasury.

V:

Yes.

and Connecticut ( What's the DATE of the apartment?)

W:

All right.

74

March 22, 1945
4:57 P.M.

76

75

O

C

MMJP:

Harry
HMJr:

W1

White

At 20 minutes of nine. Then be can have the
talk on the personal matter that be wants to
talk --

W:

HKJr:

W:

HMJr:

You boys will have something for no in the

On the vay down.

Well, velve just finished talking about it. I
thought MA yould prepare a one page or two page

-On the way down. and could come to ay office.

document and in addition to that, ve are roing
to tax to continue to work an the document that

All right.

to started to work with ---- until set finish
that.

And start right in with Mr. Clayton and General
Hildring.

MMJ:

All right.
And then I'll have to exques myself for . half
an hour.

W:

Yeah. But, EME shiz, we'll be all right.

100Jm

Yesh. O.E. What?

Yes air.

V:

But Mr. Olayton will be have and No are goin to
start in, and you had better have your boss here
and General Hildring, otherwise you say lose out.

All right. Now, can : call you back about five
O'clook?

HMJr:

They are working on 1: now.

W:

HMJr:

W:

HMJr:
W:

HMJr:

o
HIGH

got 15 ninetes on the CBS breadcast Saturday
night at a FOOD hour, quarter of 11 to 11.

V. want Sension, and we thought of trying
Senator Birton in 11 of his attitude the
other day. Do you think that is safe or

I just vented to -- (Laughe) -- you see I's talking
the grandfather -- very positive.
(laughs) Are you going to be to stern all your life?

ought to stick to - do you have any Feelings one
vey or the other.

FolJri

Yes, I believe that too.

HMJr:

She can do no wrong.

W:

That's good.

HMJr:

She and Martha.

W:

MMJr:

Thank you.

Well, I've got this memorandum from Luxford. Se's
FO worring about the Houre. I'd the to get none
Republican on the House side.

W:

A11 right, good enough. I'll cell you back about
five o'clock.

Anytime they car send 1: - un to midnight.
O.Z By the way. just --- what advice have you

noti Velve - 15 atnut on the CBS --- Ye

V:

Yes, I understand

With everybody but the grandchild

Vall 11 they can zet it up to the house tonight
I'd 11kg to are it.
I'll speak to them.

Wt

I'll be here because we are going to do business
tomorrow.

If you don't mind by moking a suggestion. You
SAV the tone I took with his, seet

W:

V:

HMJr:

Yes Sir.
morning.

W:

HMJr:

Herry?

HKJr:

On the House side?

I'd try to get Jense Woloctt.

1:

Oh, he won't --- I know be von't done out and any -

HWJ:

Yell, I'd et) his - I mean, : got this medorandum
from Lusford.

PRECISION

MICROSTATI

TRADE

MICROFILM

ROLL NO.

77

March 22 1945 78
5:00 P. M.

o

V:

Well, I mean it vill So enterronsing 10 X noxed
Moloott because I know he is 201mg to tell
us be hasn't nace his mind = yet. We micht trr
Camble Birth I know that MA one thist thoma follows.

D

However, I'll tall it OVAT You think 11 ought to

Operator:

Go ahead.

HMJP

Yee,

be somebody from the House.

T think it is with and important to have fomebody
from t/s House.

W:

HOUR:

Ted

A11 right. Vell, ve'11 talk it over.

Gemble:

Hello, Mr. Secretary,

HMJr:

Mello, Ted.

O.E.
31

HMJ:
0:

MMW
0:

HMJr:
0:

I read the conference.
Yeah.

You maked me to call you after I'd read it.
That's right.

: think it served . good
Good. Go sheed.

I don't know whether you talked to Mr. Bell or

not.
HMJ:
0:

No.

After the ticker cass out. there has been . little
rice in the 25 market.

HKJr:
0:

I heard that
Yes. Nov PLF I told you m11 along, VA didn't need
to be cushed on it. or 41/mit need to pash you or
it. but + thin) nometime in the next ten days, ve
would need to have some in orm tion on it. I've

made come checks to see what our problems would DO.

eince I read the conference -- your press conference-because I've had the time to --

ENJ
G:

HMJ:

Look -Yes.

Supporing when I 5*: rendy to 60 home you ride

home with ac.
0:

0

All right, air.

PRECISION

TRADE MARK

MICROFILM

MICROSTATI

BOLL NO.

79

0

HMJr:
G:

HMJr:
G:

0

will you so that
I'll be standing by.
Thank you.
O. K.

80

MAn 22 1945

MAR 22 1945

Dear Mr. Crosby:
Dear Mr. Mallugh:

I've just heard a recording which you made

of the new War Bond song. "Buy, Buy Bonds."

I want you to know how enthusiastic I an
about the song and about your rendition of it.
It is the best War Bond song I have heard in
long. long time; and I know, with your talent
back of 11, the song will get a deserved recon-

a

mendation.

This is to thank you for all your past
Net Bond efforts and to hope that you will

Only yesterday I had the pleasure of hearing
your new War Bond song. Buy. Buy Bonds, written
in collaboration with Mr. Adamson.
I want you to know that I enjoyed it immonsely
and that we in the Treasury are enthusiastic about
it. I hope we shall be hearing it a good many
times in the eoming months ahead.

Sincerely,

continue those efforts for the War Loan coming
up in a few weeks.

(Signer H. Morgenthau, Jr.

Sincerely,

(Signed) H Morgenthala, Jr.

Kr. Jimmy KeHugh

631 North Sierra Drive

Beverly Hills, California
Mr. Bing Grosby

10500 Camarillo Boulevard

Hollywood, California

DL: Jd

DL: 1d

air thail

82

MAN 22 1945

Dear Mr. Adamsons

I have just written a little note to your

collaborator Mr. Mallugh, on your new War Bond

song. "Buy, Buy Bonds. I heard it yesterday
as recorded by Bing Grosby.

I'm delighted to be able to tell you that

everyone in the Treasury who has heard it Joins

with ne in agreeing that it is the best Var

Bond song we have heard for a long, long time.
know that your song will be heard on many
programs on behalf of War Bonds, and I AR sure
We

that 11 will contribute to the success of our

War Bond effort.

Sincerely,
(Signed)

Mr. Harold Adamson

Crescent Bay Drive

Laguna, California

DL: 3d

H.

Morgenthau,

in

PRECISION

TRADE MARK

MICROSTAT

MICROFILM ROLL NO.

84

TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
C

DATE

Secretary Morgenthan

TO

Mr. Luxford

FROM

For Action

"SEC. 175.8 Indicia for domestic liquor botties.
There shall be blown legibly either in the bottom or
in the body of each liquor bottle the permit number
of the manufacturer, the year of manuf acture (which
shall be indicated by the last two numerals), and

a

March 22, 1945

symbol and number assigned by the Commissioner to

You wanted me to speak to Dave Karr about Drew Pearson's

broadcast last Sunday night relating to liquor bottles.
Before I speak to Karr 1 think you should consider the
following points relating to our Regulations which are troubling
me:

1. Commissioner Nunan's memorandum points out
that we modified our Regulations on August 31, 1943,

so as to permit the delivery of liquor bottles for
reuse to the bottler or importer entitled to package
spirits in such bottles. doubt whether that amendment leads to very practical results so far as ordinary
consumers of liquor are involved. You and I, for
instance, will put up with the inconvenience of
returning beer bottles to the liquor dealer that
sells us beer. I doubt very much ether we would
put up with returning the bottles to the brewery but
this is in effect what the Treasury Regulations, as
amended, require, for they require delivery to a
bottler or importer. In my opinion, we have inserted
a technical provision in the Regulations through whi e
certain large consumers of liquor such as hotels and
bars might return the bottles to the distillery but I
don't think the Regulation means a thing so far as the
ordinary consumer of liquors is concerned. Therefore,
I think that a substantial part of Drew Pearson's

objection is still valid.

2. Even assuming the merit of the technical
exception which we made in our Regulations in August

of 1943, I think there is a second serious practical
objection to saying that Treasury Regulations are not
interfering. I call your attention to Section 175.8
of the Regulations whi provides as follows:

represent the name of the bottler procuring the same,
and there shall be blown legibly on the shoulder of each
such bottle the words Federal Law Forbids Sale or

Reuse of This Bottle . #. (Underscoring added).

The important point in this Regulation is that our
Regulations still require that each bottle bear the words
"Federal Law Forbida Sale or Reuse of this Bottle.
Accordingly, even though we may have technically modified
our Regulations to permit the return of bottles under very

onerous conditions, the fact remains that we still require
the bottle itself to bear words in effect saying it is
against the law to sell or reuse the bottle. I dare say
there may be one person out of a thousand that knows
anything about the technical amendment of our Regulations,

but we all know that the bottle itself bears the statement
that the Federal Law forbids its sale or reuse. Accordingly,
I feel that if there is any merit in Drew Pearson's

original criticism, that criticism is still valid as

long as Treasury Regulations require an inscription of
that character on all liquor bottles.

I will be glad to point out to Dave Karr what Commissioner
Nunan states regarding the regulations, but I do think in all
fairness and to protect you, I ought to also inform him of the
limitations of the action are have taken. Personally, I think had

it would be better if we were to tell Karr that while we

taken certain measures before Pearson's broadcast, we are
recanvassing the matter to #00 whether we may not want to take
further steps.
May I have your views on this?

PRECISION

-

TRADE MARK

86

TREASURY DEPARTMENT

TREASURY DEPARTMENT
(

INTER OFFICE COMMUNICATION

INTER OFFICE COMMUNICATION

DATE
DATE

March 22, 1945

March 22, 1945

FROM

TO Secretary Morgenthau

Secretary Morgenthau

FROM Mr. O'Connell

Mr. Luxford
For Your Information

Chairman Spence spoke to no this morning and
said he was concerned about what would happen If the
Committee were to vote on the Bretton Woods proposals
today.

He said that in his opinion the Republicans
were going to line up unanimously against the Fund
and that the Democrats were going to lose Baidwin
and Barry from their side. Re said if this occurred
the measure would be defeated by a 14 to 13 vote.
He strongly urged that effective steps be taken
at once to force Balswin and Barry into line. He said
it was the responsibility of the Democratic Party to

keep its members in line and he wanted us to know
something ought to be done.

I spoke to Joe O'Connell about it and he said
he would speak to Hannegan.

Representative Hoffman of Michigan, in an extension of
remarks in the Congressional Record yesterday (pages 26152616), referred to a letter which he had received from
Mr. Fussell with which was enclosed material from Detroit
newspapers and others commenting on your Detroit Economic
Club address on Bretton Woods.
Representative Hoffman said that the principal purpose
of Bretton Woods is to make the American taxpayers pay for
benefits which will be enjoyed by foreign nations and the

people of foreign nations. He said that in order to corral
the votes of the Detroit industrialists and of the workers
in Detroit, "Henry baits his hook with the juicy promise
that Detroit, if Bretton Woods is adopted, will get an order

million automobiles in the immediate post-war period
for
and that hundreds of thousands of jobs will be created.
He asserted that you might far better have been appealing
for a return to work for the production of war materials,
and added: "But his mind apparently was not on the main,
the vital issue; he was thinking of the future welfare of
a

TO

those who are not Americans.

Bretton Woods should stand or fall on its merits, Representative Hoffman said, and there is no excuse for a member of the President's Cabinet traveling around the country
spending tax money in propaganda. He added that you should

learn what other high administrative officials are learning
and today acknowledge, that it is necessary to keep
sound, secure foundation under the American people, under
American industry, and that cannot be done 17 the material
for that foundation is shipped abroad, given away.

88

87

MAR 22 1945

The Hein York Times
Times quare
My dear Mr. DeLaoy:
March 22, 1945.

Dear Mr. Secretary:

Thank you for your letter of

March 20th. lie have row the report of
the CLD with interest in this office and
have bad in type for several days an 001torial which has been squeezed out by the

I was happy to see that you
Inserted in the Congressional Record for
March 13 the excellent pamphlet prepared
by the Congress of Industrial Organisations
on the Bretton Woods proposals.

This pamphlet, together with the
report which Mr. Hurray sent to Congressman
Spence and Senator Wagner last week, will
go a long way to show labor the stake it
has in the Bretton Woods proposals.

war nova but which ** hope to be sole to

Sincerely yours,

use soon.

with all best personal wishes.
(Signed) H. Morgenthau, Jr.

Sincerely yours,

Secretary of the Treasury

Characters

Honorable Hugh DeLacy

House of Representatives
Mr. Henry Morgenthes, Jr.,
The Secretary of the Treasury,
Washington, b. c.

RB:00 3/15/45

PRECISION

TRADE MARK

MICROSTATA

NO. U.S. PAT. OFR

MICROFILM

89

MAR 22 1945

Dear Governor Saymozaki

Thank you for sending me a copy
of the speech you made on March 20 before

the Illinois Manufacturers Association.

I am very grateful to you for
the fine work you have been doing in
helping to put Bretton Woods across.
Sincerely yours,
(Signed) H Morgenthew Jr.

Honorable M. S. Saymozak

Board of Governors
Federal Reserve System
Washington, D. C.

RB:ee 3/21/45

MICROSTAT

MICROFILM

)

Last August while in London I had opportunity to study the
plans for reconstruction and postuar economIc stability of some of
MONETARY AND CREDIT

the government's in exile--particularly Belgium, The problem is

Intered Into At

immense, and its solution, or lack of solution, will affect US. It

BRETTON 10005

is an international problem.
The American people want to know, and rightly so, what our
Government is planning for the postwar era.

200

As you know, plans are well advanced for the establishment

by

of a food avid agricultural organization of the United Nations. The

H. S. SZYACZAK

meeting at Yalta has cleared the path between Dumberton Oaks and San
Member, Board of Governors
Federal Reserve System,
Washington, D. C.

Francisco, And as the President total the country, on March first of
this year after his return from Yalta, work is progressing on proposals
to strengthen the Trade Agreements Act of 1934. to secure international

agreement for the reduction of trade barriers, to control cartéls and
to provide for the orderly marketing of world surpluses of certain
commodities. Within the past few weeks considerable progress has been
made AT the Mexico City Conference in dealing cooperatively with problens of this hemisphere.

Delivored before

During much of the period between the Pirat and Second World

Illinois Manufacturers Association,
Chicago, Illinois

Wars, one of the greatest obstacles to the orderly exchange of goods

March 20, 1945 - 6:30 P.M.

and services between countries WAS the uncertainty and difficulty which
surrounded payment for these goods and services. The conference held

at Bretton Woods last summer--which I had the privilege of attending-agreed on for-reaching proposals designed to remove this obstacle and
FOR RELEASE IN HORKING HERSPAPLES OF

MEDICAL HANCH 21, 1945

4

enabling legislation is now before our Congress

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What were the conditions in the two degades between the wars?

with the outbreak of the First World War, most countries
refused to permits the export of gold and their bahka ceased to PAY

Peace after the Pirst World Bar was precarious and chaotic In the
political field, many countries experienced revolutions and counterrevolutions, or at the least frequent changes of government. In the
economic field, much industrial plant had to be rebuilt to serve the
needs of peace instead of MLT, and overworked form land had to be
reconditioned. People who had gone without through the WILF years
sorumbled for the neager available supplies of consumer goods. Prices

shot up and we experiment all over the world A postwor inflation.
International exchange WILD out of joint. Commercial contacts, broken

by the vor, were difficult to restore. Exchange could not be found to
buy the imports needed for reconstruction and to put national economics
back into working order. Monetary disorders spread throughout the

world. Those who could, shifted their funds about looking for &
"sound" currency-one that had sone stability.
It is generally known that before 1914 the value of most
currencies had been expressed in terms of so many grains of cold.
Since gold WB.S a commodity accepted the world ever, this WILS an easy

means of comparing the relative values of different currencies. For
example, the French frane me fixed by law at about one one-hundredth

of an ounce of gold. The English pound storling VS L fixed by law at
about one-quarter of an ounce of gold. Therefore, by simple orithmetic, one pound storling WAS the BIRDH as 25 franos or one frane VS.S one

twenty-fifth of A pound. Because of this fact, international trade
could effect the exchange in goods based on & known relation between
our renoies of various countries.

out gold to individuals. The gold standard WAS abandoned. After
the war, however, every effort WILD bent to return to the gold standard. But it WILD not always possible and in 'scne cases it Was not

desirable to return to the old values for the various monetary units.
England, however, did; ob strong was the desire to return to what
was considered to be normal relations that, in 1925, a pound was declared to be worth an much in terms of gold 44 it had been before

the mar. But this was too high Value for the pound, and it proved
a great strain to maintain that value. Unfortunately, there was no
international machinery under the gold standard under which the rates

could be altored." There mas no flexibility. There WIS rigidity. A
change in the par Values of currencies HOS a major operation which had

its repercussions on the economic nerve structure of world trade. On
the other hand, Franco did not return to the old value for the franc.
The impact of the war and reconstruction upon the Fnench ecopony had
11 fted commodity prices and made goods much moro exponsive in France.

That is, It took for more franca than before the with to buy the sumo
quantity of godds. By the sune token, it took more france to buy a
pound storling; the exchange value of the franc fell. Then in 1926,
the franc was stabilised at approximately 125 france to the pound in
stead of 25, as before the war. There WILD no possibility of returning
to the old parity, and France WGB realistic in not endoavoring to do

so. But 6 flight of capital had proceded French stabilization and the
return now afterwards aggravated the difficultion of other countries,
especially England.

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It appeared neoestary to impose restrictions upon purchases

You ORD imagine, If you de not recall, how difficult it NIB
to carry on international commercial and financial business under these
changing and uncertain conditions. There WAS basic uncertainty in

velves--in pricep--in exchange. Those conditions were needloosly
protracted becouse each country operated on its own. There WILD no

comprohensive plan for collaboration and cooperative action to restore
a functioning international monetary system. Small loans were made

to sone countries to help then stabilize their currencies; but this
assistance MAS sporadio and uncoordinated. Each oase was treated

separately. Toward the end of the 20's it WAS vainly inagined that

normaloy had been restored. But the difficulties in the international
field were even worse in the 30's than in the proceding decade.
As conditions in the 20's had sottled down there had begun

to be a considerable volume of international investment. Part of this
was in long-term loans on which the interest and amortization charges
made & heavy call upon the borrower's foreign exchange resources. Much

of it represented short-tem lending, partly in the form of deposits in
foreign banks and the purchase of spoculative securities, partly the
financing of trade. Large quantitios of goods were imported by the
debtor countries on credit. In many onses, borrowing for exceeded the
especity of the country to repay, especially since the funds borrowed
wore not used to enlarge the productive resources of the country. In
time some countries had to pay more for the goods and services they

bought, plus not crodit charges, than they received from their OWT
goods and services abrond--that in, their balance of payments WILE
said to be "unfavorable".

and sales of foreign exchange and upon international trade because the
ability of many countries to maintain their purchases abroad had a ong

to depend an their ability to borrow abroad. Few were able to do 80+
At the end of 1935, virtually all intergovernmental debts--save that
of Pinland--and 30 per cmt of private bord issues were in default.
At the end of the 20's, the volume of funds available for foreign
investment began to dwindle; and finally, as confidence wgakened,
short-term funds began to be withdrewm. Debtor countries could not

meet these drains except by shipping gold or using available foreign
exchange. Obviously, there is Elimit to this process. There was no
machinery for International cooperative action to deal with such a
situation. Each country felt that It'mes "on its own and bastened
to clamp on exchange and trade restrictions. Some hoped to stimulate

their exports by making it cheeper for other countries to buy their
goods. They did this by reducing the price of their currency. They
depreciated. At the same time/they tried to reduce-their importe The
result WILE B geheral falling off in world trade. Exporting countries
began to suffer from declining production and increasing unemployment.
Countries whose economics were goared to . high Level of importe could

not find the exchange to pay for their importe. As a result the value
of international trade in 1934 WBC only about one-half BE great as it
had been in 1929.

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began systematic study more than three years ago. After many confer-

All this added up to the world-wide depression of the 30's

ences and discussions, preliminary, highly tentative proposals for an

which is still fresh in our memories. At that time I was here in

international nonetary institution were presented to the public in

Chicago and well do I remember our situation, for 1 was then City

April 1943. A draft for an International Stabilization Fund was pub-

Comptroller. The banks were closed. Tax collection was held up by

lished by the United States Treasury and A draft for an International

a reappraical of real estate. And when we began again to collect

Clearing Union HBS published by Great Britain. Both proposals were

taxes the depression NBS upon us and property holders were unable

put forward to encourage all interested parties to contribute to

to pay taxes. People were out of work. Each blamed the other for

the solution of the extremely complex problems involved. Both pro-

the difficulties. Back of the domestic depression WILS a world

posals were sidely studied, compared, dobated and discussed, orally

economic situation.

and in writing, by individuals, and in small and large groups, here

To keep things noving even on a low level, countries began

and abroad. As a result of the wide area of agreement that'was found

to make agreements with others on the basis of "I'll buy more from

to exist, s Joint Statement of Experts was published in April 1944

you If you will buy more from no. Trade HILLS forced into bilateral

Further discussion culminated first in G preliminary neeting of Popre-

channels. Countries no longer bought in the most advantageous mar-

sentatives of many nations in Atlantic city in June and finally in the

ket. They bought wherever they could make A deal through the mase

July Conference at Bretten Woods. The Brotton Mooda Agreements, espo

of regulations and restrictions which hanpered international exchanges.

cially the Fund proposal, are designed to aid in achieving reasonable

There is no need to describe here the devices-"some of them ingenipue

stability in the international monetary sphere in order to make possible

and all of them intricate-wwich word invested in this deedly game of

& revivel and expansion of world trade or A multilatoral basis. They

economic war. We know now that It was almost as destructive to DA-

are a step-and & long step-min the right direction.

tional and international well-boing 6.0 had been the actual hostilities
of the First World Gar. And it laid the basis for the Second World War.
I have taken this nuoli time to rogall to you the handicaps

Admittedly the Bretton Woods Agreements are not a panages

for all the ille of the world. Unless the major industrial countries,
especially the United States, succeed in maintaining reasonable eta-

which confronted international trade after the last WAR because some

bility of employment at high levels there will be very little chance

people appoar to have forgotten them, or at least their memory has

of evoiding the measures of economic verfare employed in the 30's. In

dinned. But those who were alert to the dangers of a repotition of

effect, these were measures to "export unemployment". By importing as

these conditions after thia war have devoted time and energy to senk-

little as possible and exporting AS much as possible, each country

ing a way to avoid such B recurrence If possible. Interested individuals

TRADE MARK

MICROSTAT

that A project is productive and that the borrowing aduntry has A
hoped to keep its own people working. There is reason to believe that

reasonable prospect or repaying the loan, the Bank will 500 to 15 that

the major countries now are determined by damastic honsures to pretint

the loan is forthdoming on reasonable terms. This does not imply the

wide fluetuations in employment. Economic stability and full employ-

elimination of právate investment but it is unlikely that enough pri-

ment in the United States are certainly an accepted aim and purpose.

vate capital will be lent to countries in need of reconstruction or

But these should be reenforced by K healthy condition of international

development without some encouragement, capacially immediately after

trado. The accoptance of the Brotton Woods Agreements will contribute

the war whom conditions will be unoertain. The Bank will operate for

in & substantial measure to the ability of countries to maintain enploy-

the most part either by guaranteeing lonna made by private investors

ment at high levels without resorting to attempts to "export unemploy-

or by making lonna with funds bor rowed from private investors.

ment" to other countries.

The bonefits of the International Bank will be many. It will

If we are to have & healthy world trade, we need reasonable

help members to schierr stable economics. It will distribute the risks

stability in foreign exchange rates, and adequate credit distributed

of international lending Although WO may furnish nost of the Ioons

where it will do the nost good in rebuilding and developing national

which the Bank guarantous, this country's stare in meeting the risks

economics. The Bretton Woods Agreements are technical documents, the

involved will be only #3 billion AS 6 consequence of its subsoription

product of the experts of July nations, but they can be sunned up simply.

to the Bank. If international Idana are made through the Bank, the

w

They spell out cooperation in the monetary and oredit fields, and give

dangers of imporialistic lending will be avoided. International super-

detailed ways in which this cooperation oan bo achieved. The Agree=

vision of foreign lown will nake it difficult for foreign loans to be

ments provide for the establishment of two international institutionas

used 0.8 an instrument of political policy. The conditions which SUP-

an International Monetary Fund, and an International Bank for Seeon-

round the issues of debentures by the Bank insure that they will be a

struction and Development.

prime investment accurity since the total of the Bank's louns and

The Bank proposal is relatively simple. No serious differof opinion aroec in the negotiation of the Bank agreement, which

guarantees_boy not exceed the amount of its capital, purplus, and 70⑉
BOFFOR. Only one-fifth of the $9.1 billion subsoribad by member govern-

MA reselved widospread support and approval. The Bank follows & woll-

ments pan be used directly for making loans. The rust will remain in

known pattern. Its job is to investigate projects for the reconstruc-

the form of unpaid subscriptions n.a A guarantee fund to meet any losses

tion of war-torn aross, and for the development of backward lands for
which long-term international loans are needed. When 11 1 antisfied

that the Bank may inour

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The International Monetary Pund Agrement deals with G more

difficult problem than does the Bank. Mider differences of opinion had
to be reconciled before the nagotiations were concluded. Changes will
have to be mide in it from experience. There is provision for unendment
and there is room through interpretation for adjustment to conditions GD
they arise. It sins to prevent G repetition of the chaos who ch followed
the lost war and of the destructive monetary practices of the 30's, both

of which I have reviewed. It substitutes cooperative international decisions and international action for the state of affairs we had in the
past whom each country made its own decisions and acted alone in what

it thought were its arm interestn.
Under the Fund agreement each member ostablishes the gold

value of its currency by agreement dith the Fund. Gold is still the
most widely acceptable noans of international payment. But this in not
a return to the old gold stundard. Although each country undertaken to
maintain the established value of its currency at plr, there is naces-

The Agreement also eliminates special exchange rates for perticular types of transactions. Germany WAS the country which developed

this device most nilly. In the years before the war there were all
sorts of roichmarks, representing the receipts from different kinds of
business with Germany. The non-Cornan owner could not dispose of thoso

freely since the use of each type was limited to a particular purpose
such AS to pay tourist expenses in Germany, to buy certain types of

goods, and so on, and the value of each kind in terms of other ourremoies varied greatly. In this way Germany arbitrarily made it cheapor
or more expensive to buy particular German goods or to sell particular
commodition to Germany, and manipulated this device to obtain a competi-

tive advantage in international trade.
The requirement that the Fund approve necessary changes

(after the are 10%) will also mean greater stability of exchange rates
in the 'Yong run. Not only will unnecessary changes be eliminated, but
necesdary changes can be made in 6D orderly way before the #1 tuation is
completely out of hand.

arily provision for altering the parity If it becomes evident that this
value in too high or too low (because of changed conditions in the
country's international position). The Fund will approve only changes
that are really necessary, and objoct to those which are not. This

neans that no country dill be able to sell its currency cheaply-that
is, to depreciate Starnoney in order to secure a competitive advantage

for its exports. We have learned that if this is done, other countries
are not likely to stand by idly but will join in the scranble with
disastrous consequences for all.

If French production costa (wages and other items) for instance,
happen to riso much above production costs in England, French producers

will gradually lose their foreign markets--both in England and in other
countrion--to Dritish producers, French producers will lose oven in
their domestic market, as their high cost goods are being increasingly
displaced by lower cost goods imported from Britain, If the basic maladjustment in the cost structure is not the result or G temporary condition,
but reflects a fundamental and lasting change, French production will
eventually decrease, unemployment will rise and monetary reserved will

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be drained by the deficit in the balance of payments. The French our-

V

13

o
Under the Agrement also, all nembers promise to eliminate

Pcney will tend to fall in value, speculators will rush to buy foreign

restrictions on foreign exchange transactions as soon AS possible.

exchange and, in many caaca. the resulting monetary depreciation of

or course, during the WST, each country must keep striot supervision

the French frane will be grunter than what NO B really celled for to

over its international transactions. I an not speaking of var-time

correct the initial codt maindjustments. If an appropriate change is

controls but of the sort of regulations in effect before the war.

medo in the value of the surrency relative to the curricelve of other

Many countries at that time had less foreign exchange than they needed.

countries before this train of circumstancos 19 sut in notion, much

That moant that importers in those countries wore rationed as to the

confusion and distress will be avoided and the necessary adjustment can

amount of foreign exchange they could use, and exporters were required

be an orderly one.

to turn over their receipts to some governmental agency which par-

Duropean currency history between the taro ware illustrates

this problem in the clearett possible way. As Leaid before, in 1925,
England went back on the gold standard at the prover gold/perity, while
continental countries depreciated their currency to 4 considerable exc
tent. The resulting cost disperition between England and other coch-

celled than out. This arrangement, as we have seen, interfered with
normal trade, which was shifted into particular channels, and often
led to the domination of the economy of one cointry by another for
political ends.
The OREG of Germany and Hungary Illustrates what happened.

tries resulted in a severs and protracted economic depression in Great

In properation for WAT. Germany Was anxious to acquire large atooks

Britain until the devaluation of the pound in 1931. As the pound de-

of goods, and VILE willing to pay well for them in German marks The

clined further and further in the following years production costs in

Hungarian Government had subsidized farm output in order to avoid the

Europe increased in terms of storling and, in turn, became completely

bankruptcy of its farmers when agripultural prices in world markets

out of line with British costs. The attempts of the gold blook coun-

dropped, and the prices of Bingarian wheat and neat wore much higher

tries to maintain the parity of their currencies in the food of such

than Germany would have had to pay alsowhere. But Germany could not buy

hon ty international cost disparities led to intense depression and
unemployment and proved futile in the end. Belgium WIS the first coun-

try to how to the inevitable. Her relatively prompt decision permitted
her to limit the devaluation of the Belgian franc to only 26 per cent.
France meanwhile resisted to the last, with the result that the devalue.
tion, when it game, depreciated the French from by about 60 por cent
as compared with the Belgian 28 per cent.

elsewhere because it did not have the dollars or the pounds or the
pesos to do DO. An agreement WAS signed between Hungary and Germany

whereby Germany agreed to take Hungarian goods at the high Hungarian

prices, and sell to Hungary German goods--also at high prices. The
transactions were balanced against one another in A "olearing account".

RECISION

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In

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Each country tried to prevent an unantisfied debt from piling up in

recovery, at best, can be only gradual. On the other hand, unless

the clearing account. Under this arrangement both Hungary and

& concerted effort is made 85 idon as possible to eliminate mach

AT

Germany were paying more than they should have for the goods which

practices, there is Crays danger that many countries will fall back

each imported from the other. Hungary lost its other markets because

on then to balance their intornational transactions After this WIL.

of its high prices and had to concentrate on the German market.

They must have An alternative which will make such action unnecessary.

Germany began to diotate trade torms to Hungery, to tell

However earnestly the number countrice my desiro to live

it what sort of goods it must produce if Germany work to take then

up to their agreements SE for AD exchange rates and exchange restric-

Then Germany want to war. the Hungarian economy MISS firmly tied to

tions are concerned, it will not be easy for them to do NO. To help

that of Germany and thus Hungary inevitably becane a partner of the

then, G Pund of elmost 39 billion is to be catablished, nade up of

Axis.

gold and the currencies of all the countries which are members. This
This is the sort of thing WE do not want to have happen

Fund will be used to assist member countries food with temporary

again. Under the Pund Agreement, numbers undurtake to abandon such

balance of payment difficultion sush as night follow AL bad prop or G

bilateral clearing arrangements and discriminatory currency proctices

loss of A harket for n short period. Should the deficit prove to be

08 give exporters special preniums If they ship goods to countries the

more this temporary, the Fund will continue to Give the number assist-

currencica of which are particularly desired. This commitment applies

ance only If It takes sdequet stupa to correct the situation.

to the abandomment of restrictions ON foreign exchange transactions

I have skotched briefly the nechnnian of the Fund, and Andi-

on current account, that is those erising out of shipments of goods,

gated the aina which it is hoped It will achieve. Doubtions, you have

tourists expinditures, imigrant remittances, and the rendering of

all heard and read critician of this plan, and I should like to

services. Members are permitted to control capital transactions such

mintion the min point around which this oritidian centers. During
the last twelve or thirteen days I have been attending and closely follow-

as money sont for deposit in foreign bank or for use in stock mrkct
operations. Ren. investment our be uncouraged and the spoculative

THE

Inc the hearings on the Brotton Woods proposals in the Banking and

moviment of funds limited: this will contribute substantially to

Currency Committee of our House of Representatives and feel that the

intermetional spectory stability.

quest for information concentrates mainly on this point.

It is not expected, of course, that the whole body of rigu-

lotions over transactions shill be done anny with at
onee. Only confusion old result. The patient in very sick, end

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17 16

Another automntic_control 10 the obligation of all member
It has been argued in some quarters that foreign countries

countries to repurchase their own currencies from the Fund with gold

will abuse their privilege of drawing on the Pund and that the Fund's

or foreign exchange. This obligation is BO frazed as to require

resources will be wasted, The position taken by the critics is that

countries adequately supplied with cold and foreign exchange reserves

in order to insure that numbers take advantage of the time during

to draw on them at the same rate that they draw on the Pund. and it

which they 674 drawing on the Fund to correct the unbalance in their

also requiree (with qualifications) countries which are gaining gold

international position, aid should be Given only after special invoice

and foreign exchange to use half of the amounts GRined to reduce

signation and agrement as to the conditions under which the funds

their drafts on the Pund.

are to be used. This view misinterprets the very espence and purpose

The disoretionary controls are evin more important than the

of the Fund.

automatio controls. The Fund can postpone the beginning of its 0XC

A whole series of automatic and discretionary controls in

change operations until it is antisfied that most numbers are in
MY

specifically designed to prevent undue use of the Fund by any member

sufficiently stable condition to warrant use of the Fund's POROUPOOR.

country and to ensure wise use of the Pund's resources.

Purthernors, oneu it has commeed general exchange operations it can

Take, for example, the important autonatic controls. Definite

postpone transnets one with any individual country which is not in G

limits are established on the amount of foreign exchange a member may

position to make appropriate USO of the Fund's assistance.

obtain from the Pund in any single year or as a naximum over a period

Onee the Fund has begun operations with any number, however,

of years unloss special permission is given to exceed those limits.

that number oan proceed with the sesurance that 11 can gone to the

Secondly, member countries must pay a small service charge on all

Fund and receive help in neuting payments due for foreign goods and

foreign exchange purchased from the Pund. In addition, An annual

services without delay. This feature or the Pund proposal lies at
J

FRECISION

charge in Levied on a member country using the Pund. This charge in

the very core of the whole agreement. It ASSUPES the availability of

oreans, the larger the use of the Fund's resources, and the longur the

exchange, Since members can confidently expect assistance from the Fund,

period over which the resources AFC used by 5 number country. Thus,

they will be able to under take to maintain stable exchange rates and to

constant pressure is put on a number country to reduce its drawing on

eliminate restrictions on foreign exchange transactions. In many cases

the Fund,

the fact that assistance is forthooming without delay will prevent
temporary disturbances from having serious repercussions on the interO

national position of other countries. If a drop in any single country's

MICROSTAT

18

exports leads to defensive defictionary measures and restrictions on

imports, that country's exchange difficultive will spread to other
countries and 6 vioious circle of restrictions on trade and deflation
will ensue.

Should the difficultion of to number country provu to be more
than temporary, the Pund_has a very important disoretionary power to
ensure that the country does take advantage of the time during which

it is drawing on the Fund to put its house in order and correct its
position. The Fund ORD stop & member from drawing on the Pund If it

is not using its resources in accordance with the purposes of the
Fund. The purposce as stated in the Agreement make It quite eloar

that the Fund is to be used to help countrice nect temporary deficits
and to give them time to correct more deep-austed maladjustmohte
-

It is evident to me that the period during which the Fund

and the Bank APC nooded most is the immediate postuar period before

individual countries begin to impose now and additional restrictions
on foreign exchange and foreign trade. Prompt establishment of the
Pund and the Bank would also din member countries confidence which

they must have to place their ogononic houses in order with the load
possible delay.

It therefore 800ma to no that with the knowledge we have
of the problems of the 1920'a and the 1930's wo have agreed at Bretton
Woods with competent representatives at other countries on sound economic

principles to help solve these problems and the solution of these problens is in our interest. Therefore the International Monetary Fund and
the International Bank for Reconstruction and Development should, after
due and proper consideration, be approved by our Congress.

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110

TREASURY DEPARTMENT
Treasury Department

INTER OFFICE COMMUNICATION

Division of Monetary Research
109

DATE March 22, 1945

Date March 22, 1965 19
To: Secretary Morgenthau (For information)

TO

From: Mr. Coe =c

FROM

Secretary Morgenthan (For information)
Mr. Goe FC

Subject: Financial Situation in Free China

Subject: Financial situation in Free China
In connection with OUR discussions
on gold shipments to China and U. S. Army
expenditures, you mas be intereated in
glancing at the attached memorandum giving
a brief summary of the present financial
situation in China.

1. The inflation in Free China is now experiencing a new spurt
indicating that unlimited sales of gold and other palliative
measures. such ALD changes in the tax ayster and personnel

shifts in the Miniatry of Finance. are not able to effect
materially the current situation.

(a) Prices in China are now rising more sharply than in
provious years and there is no sign of their levelling
off. The rate of increase is now as high as 50% per

month in some areas 6.00 more than 25% per month in most.

$

(b) Note circulation In February 1015 amounted to about
CH8226 billion 0.0 compared with CR386 billion in
February 19th, and is increasing at a rate of about
10% per month.

o

(c) U. S. dollars are now selling in the open market at
around CH3560 per USSI 40 conpared with a rate of
about CHS200 a year ago. Gold is selling in the

blank market at OH846.000 per ounce OF the equivalent

of 0382,300 per ounce at the official rate of exchange,
while the Government's official selling price is only
01820.000 per ounce. The value of the Chinese national

dollar in terms of the black market price for gold 1:
about C10,200 per USS1.

2. Central Government excenditures are now reraging about
08635 billion per month as compared with an average monthly
excenditure in 1944 of about CH815 billion. Revenue from
taxes 15% of amount total to expenditures only about while CHSE receipts billion per from month gold or sales about

amount to about CRST billion per month oz about 20% of total
expenditures. The remaining deficit of more than CHS20 billion per month is financed by note issue.

3. U. 5. Army expenditures are in the neighborhood of CHILL billion per month or about 10 of total Central Government
expenditures.

112
111

TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION

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DATE

March 22, 1945
TO

FROM

production of reparation goods or for any other
purpose, the effect being largely the same insofar as
war potential is concerned.

Secretary Morgenthau
Mr. DuBois

"But if, on the other hand, we want to provide

fertile economic and political noil for the possible
growth of secaretist or partition sentiment within

You will be interested in the following excerpt
from a speech by Representative Gore before the House

Germany, then this proposed step, though admittedly
excedient for the moment, would defeat the purpose.
Should this possibility be thrown overboard before we
even get started? If so, for what? Another Germany
as the economic pulsation of Europe?*

on March 19, dealing with his personal observations of
the operations of military government in Germany:
"I think it is of utmost importance that our
every move, not only from the hour of Germany's surrender,
but in the making of plans right now, should be taken
with these primary facts as our guide. There will be
times when It will be easier, less costly, and more
expedient to improvise.
"For specific example, there is now under
discussion 6 proposal for a centralized economic
administration of the Whole GOPEAN nation. This proposal

geo
0

is contrary to 811 of our planning until recently, and
arises, at least in part I believe, out of desires for

reparations. Undeniably, the German railroad system can
be operated more efficiently with a centralized administration at Berlin; the integrated Gernan electrical generation
and transmission system can be more efficiently administered
by highly centralized methods; the internal waterways
system can be more easily controlled by one central

authority. After all, that is the way the Mazis have

been doing it. There is no doubt but that Germany can
produce more goods for reparation with a centralized
economic administration of the nation as B whole. But
what price reparations? By that one move we would eliminate
any opportunity for the growth of a separatist movement.

"If our aim is to rebuild a strong centralized
Germany, as quite a few influential citizens of more than
one country advocate, then a highly centralized economic
administration of the whole German economy would appear

to be & logical step in that direction. If our aim is to

restore and rebuild German productive capacity, then it
would seen logical to so manage her economics as to increase

0

PRECISION

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ROLL NO.

114

OFFICE OF STRATEGIC SERVICES
WASHINGTON.D.C.

113

SECRET

19 March 1945

ARCH 22, 1945

Dear Bill:

Thank you for your letter of
March 19th, enclosing & copy of the
Foris intelligence weeks ao. 20, and
for your letter of HAPCL 20th, with
which you enclosed R copy of the study
Gursan owen During the al and After"

Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Treasury Department
Dear Henry:

I shall read these reports with interest.

I an enclosing a copy of one of our Research and

Yours sincerely,

Analysis Branch reports, entitled Paris Intelligence Weekly

No. 20. which I think you will find interesting.

States Expiry

This memorandum deals with (1) political regrouping in France: (2) Luneray, & rich Norman farming community:
(3) the contact of the French Government with both the Ausjor General william de Donovan,

trian underground resistance and the anti-Nazi Austrians in

Director, Office of Strategic Services,
washington, ...C.

France: and (4) conditions in Belgium during January.
Sincerely yours,

William J. Donovan
Director

Enclosure

SECRET
confidential

115

OFFICE OF STRATEGIC SERVICES

116

CONFIDENTIAL

MARCH 22, 1945

WASHINGTON D.C.

20 March 1945

71

2 Dear Lieut. rutzeil:
This will acknowledge receipt

of your letter of arch enclosing
& copy of raciotelephone #288,

Honorable Henry Lorgenthau, Jr.

from cerae. Thank you for sending this

Secretary of the Treasury
Treasury Department Building

to se.

15th & Pennsylvania Avenue
Washington, D. C.

loure sincerely,

Dear Henry:

(Signed) H. Morpenthesi, Jr.

I 011 attaching copy of . study on
"German Women uring the änr and After" which

I believe you will find of interest. This Was
prepared by our Research and Analysis Brench.

Lieut. A. J. rutzell,

Acting Executive officer,
Office of Strategic services,
Mashington, ....

Sincerely yours,

Bill

William J. Donovan
director

request report in white
CONFIDENTIAL

Garalyn

PRECISION

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117

RESTRICTED
OFFICE OF STRATEGIC SERVICES

0

WASHINGTON D.C.

22 March 1945

Honorable Henry Morgenthau, Jr.

The Secretary of the Treasury
Treasury Department
Washington, D. C.

My dear Mr. Morgenthau:

The attached radiotelephone message #289

dated 21 March 1945 was received last night from our
representative in Berne.

It is forwarded as being of possible interest
C

to you.

Sincerely,

Ruted
*PutzeX Jr.

Lt. (jg), USNR
Acting Executive Officer

Attachment

RESTRICTED

PRECISION

MICROSTAT

MICROFILM

G. U.S.PAT.OFF

118

OFFICE OF STRATEGIC SERVICES
OFFICIAL DISPATCH

DATE

21 Darola 1945

FROM

Dorns

209
IIID

PRIORITY
ROUTINE

DEFERMED

TO

DIRECTOR OFFICE OF STRATEGIC SERVICES

DISTRIBUTION
O'FOR INFORMATION

(FOR ACTION)

RESTRICTED - --

RECEIVED IN PLAIN TEXT

RESTAN
A Corman businossmn, who has just arrived from Derlin, givos
following picturo of the Russian bobavior

the 100 the
in The
Russiane
the inGermans
cooupiedin
German
terriEast.
are treating
the occupied
ritory on the whole very fairly The Russian policy is to let the

the
territory
which
condition
working,
loaving It
It in found and any ying that It must produce the same quantities 08 before.

occupied

CO

on

in

in

Lator,
a workers is
not
up in each plant to 600 which
exocutives should
rid
of.
those
whose
be

got

or

those

to

be

discharged

ocn-

duot this otherwise all richt are rivor G pension. and those Those conduct
was hostile are shot. The Russians recornise the value of engineering par
They are following alon line. They are phooting the Nazia but
are being good to the workers, engineers, and those whom they nood. the
German people sro cooporating with the Hunsians in the occupied area up
to cortain point. They fool upro acour: than under the Masis. The large
vatatos are bein divided up and Given to the formers. with notice, Lawever, that the farmers Day have to join . Kussian cooperative.
The Germens fool that the Mussiana are takin success of their
occupation, and there is . roving fooling that they will cake a greater
SUCCESS
than the Enclish and Aper loans will of theira. For one thing,
Russiana
the
never
bonied
workers'

querters,

and

the

Germany

feel

that

them get out of the

German they committed oivilians less but wilful instead destruction assist The to Russiana do not districts strafe fleeing the

Russians are about to capture. The Geruan bus inessoan making the foregoing

comment fools that the Americans, with their stand-off policy towards the
ordinary German on the one hand, and with the likelihood that they will
not shoot many Masis, on the other, will probably blunder in their OCOUpation nothed

RESTR

RECISION

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119

25

MAR 22 1945

Dear Mr. Roakefellers

This will asknowledge your letter of
March 15, 1945. The Treasury is indeed sorry
that Mr. white could not personally attend
the Mexico City Conference, but - are very

glad to lears that the participation of Mr. Ness

a
and Mr. Methovits in the work of the Conference
WAR helpful.

Please accept ay personal congratulations

for the # of the Conference and the
constructive contribution is has made to the
problem of world peace.
Sincerely yours,

(Signed) H. Morgenthau, in

Mr. Nelson A. Hocksfeller,
Assistant Secretary of State,
Washington 25, D.C.

50sers 3/21/45

SECRETARY OF STATE
WASHINGTOM

March 15, 1945

Dear Mr. Secretary

We were very sorry indeed that Harry
White could not be with us at the meeting in
Mexico City, for under your direction during
the past years be has been one of the leaders
in developing the inter-American system.
However, you vere very ably represented by
ar. Nean and Mr. Moskovits, both of whom made

an important contribution to the deliberations.
I think the final results of the
Conference were very gratifying and will
result in carrying us one step further down
the world.
road towards the peace and security of
the
With warm personal regards,
Sincerely,

letter
Nelson A. Rockefeller
The Honorable

The Secretary of the Treasury
Washington, D. C.

121

TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION

AM
DATE 3/22/45

Secretary Morgenthau (For your information.)

TO

Mr. Coe

FROM

FC

The financial representative of the London Poles
inquired again about printing Polish currency in this
country for the Government in exile.
After clearing with the State Department, Mr.
Zoltowski was told that in view of the pending forma-

tion of a new Polish Government and because of the
that no arrangement should be made now for the printing
of this currency.
Mr. Zoltowski replied that he personally was glad
of the decision and he would not press the matter; but
he would inform his government of this decision.

tight situation on printing facilities it was our view

CO:

Mr. D. W. Bell
Mr. H. D. White

RECISION

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ROLL NO

123
122

0
MAR 2 6 1945

MAR 2 2 1945

by dear Mr. Charge d'Affaires

This is in further reply to your communication of
February 2, 1945, relative to the United States Army expenditures

My dear Mr. Secretary:

in Belgium.

This is to acknowledge receipt of the communication

Under date of March 12, 1945, the Secretary of Far vised - that there would be some delay before definitive figures
relating to those expenditures can be provided, because the initial
reports are just beginning to (low back to the ar Department the

from your Department of March 10, 1945 (PMA), relating to

a draft note prepared by the National Bank of Belgium

first certification covering the period ending December 31, 1964,
and the second certification covering the period ending March 31,

the to

concerning Belgian frosen assets in the United States.

1945 will be available on or before June 15, 1945. thereafter,

In accordance with your request the receipt of this

time lag
necessarywill
accesslish
fomalthan
notification
notmore
to thethan
Treasury
Department
be not less
sixty, and
seventy-five days. The tabulated date, on the basis of which certifination will hereafter be nade, will be available for the inapec-

draft note as well as its contents will be kept con-

tion of your officials at any time after the dates of certification

mentioned above.

fidential.
B

Very truly yours,

In view of the previous Treasury request for certification
which would pormit imediate part payment, the Secretary of Year recover

We be to your the

pends that . part payment on account, not in excess of $1,000,000, be

(Signed) H. Morgenthes, in

effected once without reference to any specific period of time.

shall, at therefore, clad receive instructions as to

method and place of payment of this Initial - of $1,000,000.
Sincerely yours,

The Henorable

Signed H Morgenthau, Jr.

The Secretary of State

Baron Serve de Gruben,

Solgian Charge d'Affaires, a.
1715 2nd Street, H. Wes
Washington, Do G.

MFstah 3-10-45

Retail exis

L

MICROFILM

MICROSTAT

TRADE MARE

DE

TMENT OF STATE
9131

WASHINGTON

CONFIDENTIAL
CONFIDENTIAL

reply refer to

THA

NOTE FOR THE EMBADSY OF BELGIUM IN WASHINGTON

Street 10. 1005

Upon receipt of oable No. 322 dated October 8 and

-

of the report of September 26, cerial No. 854, concerning
the lifting of the American Treasury's controls on frozen
assets in the United States, there communications were

The Acting Secretary of State presents his complidents to the Honorable the Secretary of the Treasury of
and encloses herewith two copies of translation
a draft note prepared by the National Bank of Belgium
for transmission to the Belgion Embancy in Ynshington,
concerning Belgian frozen monets in the United States
which KOO received from the American Embassy nt Brunnela.
The enclosures referred to in the dreft note vere not
included in the transmission from Brunsele, The Enbaary
states that the National Bank intended to submit the

-

examined thoroughly by the National Bank of Belgium and
by the Belgion-Luxenbourg Exchange Institute which gave

special consideration, in its organization, to the require-

draft to the Kinistry of Finance end the Ministry of

ments of the American Treasury.

Foreign Affairs before forwarding 10 to Washington,

At the same time, the procedure adopted to ensure the

It in recueated that the fact or the receipt of
the draft note ne well BB itn contente be kent confi-

release of Belgian ansets in Great Britain ver perfected.
This question is similar to the one under consideration
in the United States.

dentisl.

The problem was, furthermore, the subject of many

Enclosure:

Translation of A droft

exchanges of views with the Embancy of the United States

note prepared by the
National Bank of Belgium.

in Brussels which followed the establishment and organization of the Belgian-Luxembourg Exchange Institute very
closely.

We are accured of the complete support of this

Embassy for the carrying into effect of the measures of
application which shall be described further on.
It would be desirable, in order to encure A certaba

agrictor

uniformity, that similar, If not identical rulee, should
GL

be applied to the unfreering operations carried out in
the United Staten and in England, innemuch BD parallel
negotiations are being pursued with France and Switzerland and will soon be begun with Canada, Portugal and

the various c ountries of the sterling area.
The

ON

TRADE MARK

MICROSTAT

NO. U.S.PAT.ORF MICROFILM

ROLL NO

-2-

by "transfer" one whould understand here the trans-

fera of Belgian francis to foreign currencies or vice-

The *Orrie-Schmidt - Baron de Gruben* memorandus,

dated July 8, the note sent to Schmidt on 9/14/1944 and

verse, BE well AS transaire into Felgian france from the

the report No. 854, dated September 26, were used na
basis for the organization of the Belgian-Luxembourg

Belgian frinc account adidas Belgian national to the Fel-

gian freno account of A foreign national or vice-verse.

Exchange Institute and for the practical application
propoenle which follow and which would be desirable for

Exchange Institute hav entrusted its routine management

the Embasey in Washington to negotiate with the United

to the National Bank which represent the Institute over

States Treasury.

itn own signature (in particular, that of Mr.
error of the National Bank and President of the Institute,

I. EXPOSE OF THE EXISTING ORGANIZATION

Hereunder, for more clarity, 10 n description of the
Belgian organization in the way of exchange control.
A. Belgian-Luxembourg Exchange Institute.
(Noniteur Belge No. 31 of October 7, 1944, page 406,
end No. 92 of December 7, 1944 age 1310 and No. 65 of
November 10, 1944, page 861) - enclosures 1, 2 and 3.

Am the law permits m to do, the Belgian-Luxesbourg

end that of Mr. H. Aneinux, Director of the Bank and Net-

ber of the Council of the Institute, KR well A.S the signsturer or the officials of the Foreign Service of the National
Bank of Belgium). (See enclosure 4, decision of the Inetitute ARA enclosure 5. copy or the agreement Reached between

the Institute and the Bank).

It is the function of the Institute to define the

The Council of the Institute determines the exchange

policy of exchange control. For this purpose, it ennots
all the necessary regulations. Its powers are very exten-

control policy, within the frauevors of the monetary policy
and in articular of the exchange policy Isic down by the

sive. In the performence of its mission duties, it will

National Bank; the Bank, on the other hand, ensurer the

take into account not only Belgium's ove economic inter-

execution of the decisions of the Institute and applies

eats but will also see to it that enemy nationals take

the regulations dravn un by the letter.

no cart or have any interest in the transactions,

By virtue of on agreement reached between the Belgian

especially RF regards operations with neutral countries.
This also applies to Belgian nationale who may

And Luxenbourg Governments (enclonure e) there in only one

exchange control for the whole Lelgian-Luxembourg cononic

represent enemy interests either directly or indirectly.
For this purpose, A special section of "trade with

Union no the decisions of the institute are applicable

the enemy' VBS created in the Foreign Service of the
National Bank. This section's duties include everything

ernment has taken the necessary mensurer for this rur-

concerning eneay interests. It is consulted before A
transaction of n commercial or financial nature entailing A transfer, contemplated with & foreign country,
receives the approval of the Institute.

throughout the Unions! territory. The Grand-inchy GovJone.

The Institute, through the National Bank, controls

11 transactions with foreign countries, whether they are
of R commercial nature or of A urely financial nature.
In the

By

PRECISION

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ROLL

2"

In the cafe of operations relating to international
trude, the Institute operates through delegates of the
D-DA to the FIORITIER Consittee (enelosures 7.8.9 and

b. Lestolation relating to exchange control.
The control is based on the intererts which institute

it, . (enciocure 12: Number No. 51 or
Peteben 7. 1944, 100 408) which deteruines the general

10).

For the operation of . nature the control
in errrico out either by MORRA of ener 1 regulations kind of *general license* issued in articular for the

triffic in bona noter belonging to frontier or
bostsen, for the issue of checks to tr vellere, for the

rine1 SE In in order 1.7 the gent (enclosure 13: honitrue No. 31 of october 7. 1944, the e which defines
ITA LOTE 4 : Election or LICEN rincisler.

1. in by the decree-16. re-

rericing the derigration of 2014 A FREEDA abroad (enclosure

transfer of food nid, etc. or by the nce of year

14: intell ur in. 21 or October 7. 1944, type 401).

or individual licenser.
It 1. planned to irsue general licences either for

legislation 16 singularly by the bligation

oper-tions relating to ecific currency - for expirele:

of the institute to cerve 16 A sedius for ontaining_the
free dianosal of arrete <broad.

the Congolene frone - or, for overatione relating to

specific article - for exporte whart twoorte - or for
operations concluded by precific firm.
In this Last once, the insurance of A general

would Le rubject to the furnishing of eriodic statements
FOO to , right of inspection in the not of the correcrondence and . counts.

Finally, individual licensee are ancerasry for -11
operations chich do not cons under the general licenses.
For the time being, only Individual llerenes onn be
issued for transfers of canital.

with respect, in particular, to the relations between
the Colony of the Congo and the belgian-luxembourg conomic nion, AD agreement is being negotiated. The ex-minetion of the text of the drift agreement (enclosure 11)

enables one to realize that, although the control recains
indecendent in the Colony, It will neverthelee be under
the supervision of the netitute in order to ensure unity
in the exchange control I olley.

it be pinter cut that consilence with this

To reply. D LOW other Lung, to uertion resented
t.y re-ort in 154 of Testember 8 the c change control
no Line crelamition of senetr apply only to residents on
Leiving or Tuxembourg territory.

.el: Lane residing Abroad re got subject to the
- 181'0 control.

is nisle are rubject to the control established in
1:40 in the Colony. The central reading in force.
mis whole cystes in cleanly in operation but >111
Liner 1r. soupe only se LEALN ctionr with foreign countries

LEC which 1r LOV the re only on A very limited
re:le.

For urnorer of information enclosure 1a gives the

Mara of the org-nigation or the Tobange Institute
no of the its tional Bank desartments entructed with the

multeration of this control.
Mechanica

PRECISION

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ROLL NO

-7-

C. Mechanies of the
The release of Be

of Helgian namete in England

under the control of the Institute (National bank) nd
from being used without the prior "greement of the latter.

assets in England is the

rocedure time been adopted according to which:

result of the Agreemez

keen His Mejesty's Government

in the United Kingdom

the selgian Government, relat-

ing to property in the

ed Kingdom belonging to persons

resident in Belgium
In application

ure 16)

phreedent, the Belgion Office

1) Belgian national requert the institute (Nation'1 bank)
in writing to release their spete in reland;

of The Institute **nk):
n) verifier tive spreez nt Untieen the request for
release nd the decl'r tion ande in Accliention of the

of Management and Liquidation TEE accointed by the Govern-

decree of October 6 (Soniteur, rge 401, EOO enclonure 14);

uent P.P hgent responsible for indiceting the Helgien nanets

b) KAR certsJa that the . plic-at resent every

which can be the subject of A release.

the from the voint of view of trade with the enemy:

De Jure, the belgian Office of Management and Liquids-

tion has become the *custodian' of this property, de Tito,

e) verifier the rovers of the erson entitled to rerree-nt
level perrons and verifier the signature of legal Terron

it contents itnelf with giving instructions to the board

FF vell MY of civil (sign-ture -ut Continction:

of Trade, Soplieh *custodian' which einsly trensmite them

d) placer any condition vilch it ary cera advinable IF on
the release IT the repet. Tair c indition ary consint in

to the depositories.

Fy virtue of the instructions which It her received,
the Helvien Office of Management nd Liquidation reta

requiring the transfer of the neret to Lelgisn bane
F proved by the institute in shich the erson in quertion

only upon the mernission cnd et the re.ueet of the Del-

will have AD account in foreign currency of chick the

pian-Luxenbourg change Institute (National Bank) which
issues the nermits for release.

equivalent value =broed will not be in n1. Direct potrention but in that of the 50 roved Dank which viver n

in the English system, the accete of the BADE natural

such urester guarantee froa
the -int of view of control
under
"A the removed banks are/strict supervision.

OF Juristic person reasin fromen until the Institute authoriren their release; this relense 10 never partial, it effects

3) If it authorizes the release, the 'nstitute transulta

all the necto as the owner of t es 1e sucposed to remain

the request to the elpian office of Management "na 101cotion with the instruct IFF required by the are

*technical enemy" until the Institute announces that he

no longer hna this status. after which time the english
authorities relense all his
4 casets.
This does not prevent the acaete thue released, of
which the Institute has been able to verify the nature
through the information at the disposal of the Belgian
office of Management and Liquidation, from remaining
under

4) he belyian office the authori- tion to
the aust.ru of True which transalty it to the devorityry
of the APRELP sho in turn releccen them;

c) .he Helgian frice 10 informed of the merition nd

interes the institute (National which, in turn,
inform the cuner of the arnets.
The

RECISION

TRADE MARE

MICROFILM

MICROSTAT

ROLL NO

12"

-9-

They are subject to A severe accounting nd statis-

The ascet release in ngland are free to bo used

tical control facilitated by the existence of the Banking

for ny ergaent in storking IN well JLP for any urclase

Comuission (decree No. 185 of 7/9/19:5, enclosure 18), the

of uerehendise even forewwort.

permanent arenence of F reviewer who reports to the Bank-

: trearfora-tion there resets into 0 foreign
currency other then that rr ne 1n subject to the
. present of the Bank of and 1F norrible in

ing Commission and the periodic communication to the
National Bank of the recounting documente, provided for

by the legislation on the rubject of exchange control.
Furthernore, the Institute requiree special eriodic

enction only through prior transfer to the recount of
the Litt no1 B-DX which carrier ut the over tion itself

statements, the correctness of which 11 here verified on

IF 1: it adviable from the economic >int of view

the not by its own inspectors working in connection with

no -1 thin the of the economic voliev of the

the Demertment of Inspection of Bank Statements* of the

Government, of its own monstory paties -ni of the rolley
of the Council of the zo ange institute.
by virtue of the agnet y agreement between Great

National Bank and the revievere of the Brnking Commission.
Approval CAN be granted to thome brnke which appear

on the lict drawn us by the Banking Complerium which have

britin net the con ante nion

denonited the security required by the deoree of August 31,

(enclosure 17) the transfer of ounds sterling into Bel-

1935 (enclosure 19: banko the Bruef of which are followed

1st fr ner 1⑈ 1whyr in err years by

by AD seterisk) and ory the dues for the benefit of the
Institute (enclosure 20)
The list of anoroved banks 10 nit dreve um IF gort

It it to the ACCOUNT of Live stione! Lenk or of . bank
reproved by the schenge - stitute.

-

of t..eu have not yet noked to be approved. This list

sprov Sanks are thome which the >change Inati-

will be communicated to the Laberry AP ann ne it will

tate athorizer to engige In foreign exchange operations.
They SPO authorized in . rticular to : we P era-nent
cash :-ner in foreign currencier and to saintoin
on unt" -bro d.
proved L'ALS are authorized to dies ore of their
.

reet? in foreign currencies only for iperett AF, which,

in t e r their customer. ID in their NB name if
It 10 n question of operation reinting to their ove
ctivity, are covered by general or individual leenses

have been completed.

E. Controt with the labreey of the nited L-ten in trussels.
Everything that precedes, including the c intents of

"

the enclosuree, has been brought to the attention of the
Embrday of the United States in urussels and hap bren

the subject of several e/c.,Anger of vieve with the Fineneial Attache in Brussels (Hr. J-ner T. a shert) and 1th
reurerentatives of the United States Trensury who arme

or are erformed within the free of regulations

from London especially for this urope (-erere Aeron

enectra by the Institute.

end Patterson, assistants to Kr. S. Taylor).
They

A note

.

RECISION

MICROSTAT

TRADE MARK

NO U.S.PAT.OFF

MICROFILM

ROLI NO

-11-

In all ORBOR in which the transaction VBS not ordered

-10-

A note was tra sitted to Xr. J. Swihart (enclosure

directly by the belgirn Government or by the National Bank

12) notting forth, particular, the mensures taken by

of elgium 11 1. cermitted only by authorization of the

the Institute (National Bank) to prevant the enemy from
taking-any part or having any interest in the tranano-

Eyeh/nee institute(in A necessary OABO through its rep-

tions.

resentative in the United States) who quat certify in
riting that the tvo requirements listed above under A

The term 'ensay' 1s aeant here in the general zenee;
it CAN include certain "blocked nationale" with whom Sel-

nd b have been complied with.

glum in not At war (Bulgorians, Hungarisms, Rumanians, for

intervention of the Exchange Institute (National Bank)

example) but it 16 obvious that it can not be applied without disortaination to all the neutrols with whom 1/2 aust

for ench operation and rinks hampering considerably

trede without delay such AF the Swedish, the Swian, the

glum and the United Staten in being renumed, many payments
will be ande.

Portuguese and even the Spaniards.

This system 1. very restrictive, it requires the

transactions at A time when AB direct trade between Bel-

The situation 10 different from the one which pre-

All precautions are theen no that onyuehts made to
the residents of these countries onn in no way benefit

vailed before the iberation of the countries of Western

the enemy or persons nonearing on Lise black lists, but

Europe when, due to cerifice traffic difficultier, Sweden
had ;rectionlly no trade with the United States and and
only financial settlements to BAKE.

it goes without saying that normal commercial relations
must be nade possible.

Furtherwore, Sweden 1s A neutral country which trades

II. RELEASE OF BELGIAN AND HUXEMBOURG ASSETO IN THE

with the enemy. Belgium is AD allied country which is right-

UNITED STATES

A. Une of the General License No. 49 (Swedish system).

ing agrinet Germay end has AS such interest AB the United

Treasury, consists in authorizing the disposal of neseta

"taten in opposing any form of direct or indirect sid to
the eneay. One must not forget in this connection that

insofer set

-11 perst! ne are control led by the belgian- uxembourg

a) the transaction in not performed by or for or on
the instructions of a national of A *blocked country*

change Institute which exercises strict eurorvision
resording trade with the en my.
It seens difficult, however, due to the Trensury's

other than Belgium;

b) that the transaction does not affect property in
which 'A blocked country or national thereof" other than
Belgium or a Belgian has, or has_had, any interest since
May 10, 1940.

In all

insistent policy since the beginning of the VSP to try
to erounde it to Acopt A policy which does not follow
the princi len on which it D-nee its action.

o

This method, which is advocated by the United States

A error

.
TRADE MARK

MICROSTAT

MG.U.S.PAT.OFF

MICROFILM
36

12-13-

A practical proposal, Initing into Account, on the
one hand, the policien apopted by the United Staten

b) Ageate other then these belonging to approved
banks.

Trensury and inscired on the other hind by the belgian

organization, would cinciet in eethblishing P different
system for sesets belon free to on reproved bank nd
creto belonging to other errons.

n) Assets of PARKE
At the request of the Felgion-luvenbourn exchange

institute transmitted in A necentary and by on enoro-

printe representative reciding in the United States, the
Treasury yould issue to P.O approved bank A years 11.

conen covering all existing and future secets of this bonk.

These nasetr would be subject to the eyeten of
the "gener"1 license No. 49°; however, this license would

be committed by . provision by virtue of which the Treasury would authorize, without prior agreement and without
interference from the Selgion-Luxembourg Exchange Institute,

#11 transfers of necets (accets in Account or titlen) to
the Account of the National Bank of Belgium or to the
account of an approved Belgian bank - in an American
bank.

Other nots of disposal and in particular transfere

This general license would seruit:
MOTHY 1) to freely and #11 payments dthin the United

in favor of residente or non-recognized banks would be

States in fever of resident, another reco.nired Belgian

No. 40th

bank or the National BARK of Belgium;

This system would give all gueranteen, an the assets

2) to freely receive any payment under by a . resident
or by another recognized Helgian bank or by the National
DAEK of Helgium;

31 to ankr any payment oz goods to be exported to
BelgIum or the Colony:

held by the approved Belgian banks would automatically fall,

by virtue of the Belgian organization, under the very strict
control of the Belgian-Luxembourg Exchange Institute (National Bank).

B. Sublifications of the principals

4) to negotiate on the Aperican arrael any security
included in the annets of the Bank (state funds, theres,
Cebentures, etc.) under the ende conditions A.P an Juerloan resident;

subject to the regulations enacted by "general license

The United States Tressury in particularly concerned

about the quolifications of the principals.
a) Natural normome:

c

FRECISION

By transmitting the first disposal order on the

5) to export these anae securities to.uclgium.

accounts of A natural person, the Exchange Institute

Due to the VOT! strict control of the emproved banks,

(National Benk) will thus certify that this verson 10
"politically irreproachable*. It will transmit, on the

the Exchange Institute and ear late power ven the sseets
et their disnomal and therefore the nited Ethter Treveury receiver every guarantee, esuect 1y FP regards tride

other hand, the sample signature of this person, authentionted by the burgounster of the commune of him residence

with the enemy

and certified by the Institute.

b) Annate

Une

PRECISION

TRACE MARK

MICROSTAT NG.U.S.PAT.ORF MICROFILM

ROLL NO

-10-14-

Furthersors, the rick, sensitive bared by the

One cunt nood the authentication procedure by the

Treasury of seeing instructi nr givenguy tersons who

United States Consulate which would result in excensive

are not *politically irreproachable* who are not

extences and uselena complication. The Signature of the

entitled to recrement the equentes Etch they were

Institute will be authentiented by the,Belgian authorities

qualified to bind on any 10, 1940, would be revolded.

and transmitted to the American authorities through the
Belgian Embanny in the United States.

C.

If thin rocedume And there riceisler seet with

b) Legal personal

the supports of the United tater Treasury It would be

The procedure will be the and However, the Insti-

adviseble to net 47 "Ithou delny the orgenization which

tute will attach on attectation that such or such A per-

would remit their application.

non In qualified, in the eyee of Belgian lev, to bind the

An for of the belgion- uxecboun change Institute
is concerned. its services are organized and are able
to gonrate under the condit one decerbed above. .he
details of the relations between the Institute nd the

company. On the occasion of insuing this attentation, the
Institut will cake sure, by production of the charters,
the eppendices to the Honiteur, certified copies of the
deliberations of the Boards, according to the current

procedure on the subject, of the identity nd qualifications of the persons empowered to disnose of the assets
of company.

Treasury would remain to be externined.

After careful study, it BEEDA that the tent solution would be to re remept the Institute 'n schingto
or Sex York by . delegate who, on the one here. would

The United States Treasury should ACCEPT OF suffi-

elent proof in this reepect the attentation furnished by
the Institute under the signatures binding the letter.
In the two CEROE considered under n) and b) ne many

attentations would be furnished PO there are depositary
etmbliehmente interested in the anne operation and one
or several necarate Attentations for the Archives of the

Treasury and of the Institute's delegate in the United
States.

centralize ⑉11 correspondence gent to or received from

the Institute no or the other none would unintein erunnert and direct cintoct bit the United States Treesary, the Peteral Reserve or New for% and the CO OfIt banks.

H1. function would be to nee to the execution or the

trensfer order . proved by the Certifule. to obtain the
necessary licenses nn to the DAY difficulties of
application which any Frice.

e would, furthersore, furnish the Institute with
For each operation which requires its intervention,
the Institute would certify that the two requirements provided for by the "general license No. 49" and listed above,
are connlied with.

information regarding my questing which n ght be of

Inerent to it nc in articular regarding the policy
of the Treasury with respect to c ntrol of foreign
ports.

de sould

Furthermore,

RECISION

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MICROSTAT

MGUSFALOO
2"

-17-16-

The negotiations with the Treasury must therefore

He would also report to the Institute any abusea

rino bear on Luxembourg sesete and aust be carried out

which he might note in the use of the reruits issued by
the latter and would ankel any suggestion which he night
deem advisable with A viek to asking the transfer nechan-

in agreement with the Minister of the Grand Duchy of
Luxeabourg who will receive the necessary instructions
from his Government for this purpose.

1 0m aore flexible.

E. delgion Congo.

Nothing 1e changed in the system at present in

for each transfer request, the Institute would send

to its delegate, the A Proprinte rile contrining All the
necess ry paners.

The delegate would enter into direct contact with
the appropriate authorities and would see to the proont
issuance of the license requested.
He would inform the Institute regarding the execution of the transfers requested.
The procedure would be similar *autetie autendie*

to the one described above with refnect to the relations
between the Institute and the Belgian Office of Kanagesent and Liquidation, for the release of Belgian nanets
in Great Britain.
D. Grand Dualiy of Luxembourg.

An Belgium and the Grand Duchy have unified their
exchange control, AD the Belgian-Luzembourg : change

Institute is the only one to exercise this control and
BP the exchange reserve is being used in the compon

rest of the tvo countries which foru IND econovic
the procedure donted for the relenne of Felshould AIRO be A lied to Luxembourn

urg bonks will annear on the 11st of banks
ntitute - and w1 1 be treated like the
SR in all reenects - specially AR

regards the control exercised by the institute.
The

force with reenect to the esects of the nationals of
the Colony.

The Bank of Belgian Congo continue to exercise its
control over foreign exchange operations concerning the
Colony and no negotiations are necessary in this respect.
Brunseln, Jenuary 16, 1945.

RECISION

TRADE MARK MICROSTAT MICROFILM

ROLL NO.

142

MAR 22 1945

My dear Mr. Secretary:

I - informed by Assistant Secretary
McCley that in accordance with a conference

held at your suggestion in his frice on
March recommendation has been forwarded
to the 9304 Chiefs of Staff favorable to
the proposal which I made in my letter to
you on March 5th.

I wish to express IF appreciation for
your prompt and full cooperation in this
matter.

sincerely yours,
(Signed H. Morgenthau, Jr.

The Honorable

Henry L. Stimson,
Secretary of War.

ISF/efa 3/20/45

WAR DEPARTMENT
WASHINGTON, D.C.

MAR

the Contrabile

The Dearester at the Treasury
Dour 15% Gorretary:

This C to 60 If resulpt er Lister of
Part the plantac and ⑆ 6254

First 5 1945 relative to and Reliever Department's FOR

United States Government's consent STATES
Art the Philippine Inlanis.

it year letter concerns a of Case and I BILLS

cont they's conference be DO Care) 9, of

3:00 Failing in the office of - by

of ar, AS which representatives THE and 11 LG

Many x Interior and Foreign Locatedo
di uptain.

27 the above couse with our approval, Hill drea 50
and from 2012 office 602 20 property 503

FIFE

TIME

Hinny h Unison

RECISION

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ROLL NO.

144

MAR 22 1945

Dear Mr. MeCloy:

I - glad to receive your letter of

March 14, 1945 inf orming 10 that the proposal
which I made in my letter to Mr. Stimson of
March 5th has been forwarded with favorable

reconsentation to the Joint Chiefs of staff.

My men who attended the meeting held in

your office on March 9th informed - of your
complete support for my proposal, I nood
not say how such I appreciate your full 00operation in this matter.
Sincerely yours,
Signed H. Morgentheu, Jr.

Honorable John J. NoCloy,

Assistant Secretary of War,
War Department.

ISF/efa 3/20/45

WAR DEPARTMENT

OFFICE OF THE ASSISTANT SECRETARY
WASHINGTON, D.C.

14 March 1945

The Donorable

The Secretary of Treasury

Joan Vr. Secretary

Tata will supplement Secretary Stinson's letter to you of
March P. 1945. In accordance with A conference held in my office

on Tarch 9. your letter of larch 5, has been forwarded to the Joint
Chief's of Staff with a reconsendation favorable to your proposal.
2

Sincerely yours,

JOHN : McOLCY

Assistant Secretary of TAX

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146

TREASURY DEPARTMENT

In this connection, the Swiss Government also declared in

writing that It will forevent the concealment, disposing of or
dissipation of assets of persons falling under the various blockin decrees issued by the Swiss Government In the past or which it
will apast in the future or the execution of transactions for or

INTER OFFICE COMMUNICATION

DATE March 22, 1945
TO

147

Secretary Morgenthau

on behalf of such persons designed to clude or evade such con-

trole as are now in effect in Switzerland or hereafter established."

Orvis 4. Schuidt

3. Swiss Black Markets in Dollars and Other Foreign
Currencies HAVE Been eliminated.

Report on Recont Mission to Switzerland

The Swiss, by deoree of March 3, 1946, have prohibited the

importation, exportation, and all trading within Switzerland in
the currency of any foreign country. This measure stops all black
market dealings In dollars, sterling, francs, etc. and prevents
Germans from continuing to sell in Switzerland currencies they

You will recall that late in January you servitted to to

accoupany r. Currio to Switserland as . member of the American
delegation which was to participate, along with delegations from
the British and Frese. Governments, in certain econouic negotistions. Because of Treasury representation on the Mission, J.
Currie decided to make the implementation by Smitherland of Rosolution VI of Brotton Woods one of the main objectives of the

have taken from occupied countries.
4. Swims Stopped Purchasing Gold from Germany for Ordinary

Financial Operations.

negotiations. You will recall that in Resolution VI, forty-four
C

nations meeting at Bretton Woods called upon the overements of
neutral countries to take the steps necessary to prevent our
enemies from hiding their funds or disposing of looted property
in neutral countries.

The Suimo Government has agreed to cease purchasing any more
gold from Germany except to provide funds for German diplomatic
expendes in Switzerland, care of German prisoners of war, and pay-

ments to the American Red Cross. is a result of this step, pay-

I am pleased to be able to report that the following results

sents made by Germann to persons in Switzerland, including payments

1. Switnerland Froze all German Assets.

of old.

to stand-still creditors, will cease, since the Germans were ac-

were achieved:

quiring Swims france with which to make such payments by the sale

In this connection you will be interested to learn that Mr.

On February 16, 1945, the Swims Federal Government issued a

decree freezing all assets in Switzerland of Certions and persons
in German-occupies territory.

Weber, President of the Swims National Bank, made the observation

Significantly, Borlin, immediately after the issuance of this
decree recalled home the economic mission which it had sent to
negotiate with the Swiss.

fectively killing the Bank for International Settlements. He ex-

to De that ne supposed RO did not realize it, but by forcing the

Swiss Government to 00638 purchasing gold from Germany we were ef-

plained that the chief asset of the BIS was 4 claim against Germany
and that the only way in which this claim was being liquidated was
by the use of Cerman gold.

2. Switzerland Agreed to Take Other Freezing Action.

5. Swiss Commitment to Palce a Census of Foreign Assets
Cassellates 50185 Banking Secrecy.

The Swiss Government agreed to tighten certain already exist-

ent freezing controls and, upon the receipt of instructions from
us, to freeze the assets of Japan, Finland, Humanis, and Bulgaris.

The Swiss Government agreed to take a census of all assets

held in or through Switzerland by nationals of all countries non

The freezing of Finland, Bulgaria, and Russenia was postponed in

order that as eight first clear such action with the Russians,
Inasuuch as the Russian Government did not participate in the

C

negotiations. It was decided by us to postpone the freezing of
Japan for reasons which I will be glad to explain orally.

0

PRECISION

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-4-

148

-3-

I think you will elso be interested to know that the power
of the Treasury Department is feared and respected in Switzerland
not only within the Government but also in Swiss financial circles.
In this connection, Minister Stueld number-two man in the Swiss
Foreign Office who is very influential in Switzerland and played
an important behind-the-scenes role in the negotiations, asked
me specially to convey to you his best regards and his expression
of highest estees.

or heremiter subject to Swiss freezing decrees. Phin teams a
census of the assets of all European countries other then Streden,
Spain. Portugal, and Tarkey In sgreeing to take this census
the Suiss recognize that for the first time in Swins history all
banks, lawyers, holding companies, etc., will be forced to disclose to the Saint Government the names of the true owners of
assets below held through Switzerland. This consittent was
obtained with great difficulty and only because the Aparlean

I an preparing = more detailed report on the entire negotiations, not only with the Sairs but also with the British and the
French, which I shall forward to you in the near future.

delegation WAS

6. Foundation Laid for Securias Sales Cooperation in PostMar Allied Control of vernal axternal Assets.
The Swiss Government is no comitted not to release German

blocked assets without first consulting the nostear illied

Military Coverament of Jerseny. This result EAF schieved for
pressing the Suice to 5.200 not to relax any of Its freezing controls without consulting the government of the blocked country.
In addition to Its importance in the Gerzan program, the conditment

will be very helpful to the postmar financial program of the 11berated countries.

C

7. Switserland to Assist in Restoration of Looted Property.
The Swine Government neids a general commitment on its own

behalf and that of the Principality of Lichtensteln to prevent the
territory of Smitzerland and Lichteustein from being used "for the
disposal, concealment, or reception of assets which say have been
teken illerally or under dureas during the har" and that "every

facility will be lives to the onners to claim in
Switcarland and Liehtenstein their assets found there.

You will be interested to know that In return for the foregoing, we LETO nothing to the Seins.

T should like to emplasize that tain achievement EGG nade

possible only because L. Currie was willing to throw his full
weight behing this assect of the negotiations and to take the
position that sotion by the Swimm in this sphere was . sine our
non of any trade agreement between Switzerland and the Allied
countries represented.

149

Onio C
1

(

PRECISION

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MARK

ROLL

NO

EXECUTIVE OFFICE OF THE PRESIDENT
WAR REFUGEE BOARD

Report of the War Refugee Board
for the Week of March 5 to 10, 1945

WASHINGTON 25, D C

OFFICE the
EXECUTIVE DIRECTOR

MAR 22 1945

EVACUATION AND RELIEF OPERATIONS FROM SWITZERLAND

Plane developed in consultation with other government agencies
and international organizations are proceeding toward the
implementation of the broad program approved at the Board
meeting on February 20 for relief and rescue operations.
Representative McClelland has been authorized to obtain from
any possible sources the necessary transportation equipment
including trucking facilities, gnaoli tires, oil, etc.,
be made available to the International Red Cross to carry
relief to physically unfit unassimilated detainees in enemy
territory and to evacuate such detainees on return trips to
Switzerland. The possibility of also using other trucks,
available to Intercross in connection with the delivery
prisoner-of-war relief, for evacuation of such refugees on
return tripe from Germany is also be ing explored. A further
contribution to the program is the agreement of the United
Nations Relief and Rehabilitation Administration to make
food supplies available at the request of the War Refugee
Board to the International Red Cross for the maintenance in

to

My dear Mr. Secretary:

I an pleased to send you herewith a copy
of the report of the War Refugee Board for the week
of March 5 to 10, 1945.
Very truly yours,

Williah O'Dayer
Executive Director

The Honorable

The Secretary of the Treasury.

Enclosure

of

Switzerland of refugees who are evacuated from Germany and
who are in transit to UNRRA- controlled camps. Representative
Katzki, who recently returned from his assignment in Turkey,
18 expected to proceed to Switzerland shortly to assist
Representative MoClelland in the execution of this project.

According to a report from Representative McClelland it was
expected that the President of the International Red Cross
would meet this week with Jerman officials for conversations
and that discussions would include the question of relief to
all categories of Schutzhaeft ingo and prisoners of war and
clarification of the question of whether or not the permission
recently granted Intercross by the Germans for the entry of
as many trucks as Intercross wishes for prisoner-of-war relief
also includes trucks carrying relief to Schutzhaeftlinge.
We were notified by our Embassy in London that our proposal
for the shipment of an additional 300,000 three-kilogram
parcels of foodstuffs has been approved by the Relief Subconnittee for Blookade authorization provided the International
Red Cross will accept the responsibility for distribution of
such parcels and that these consignment do not prejudice
distribution
and transportation of parcels for prisoners of
war.

PRECISION

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REG. U.S.PAT.ORR

ROLL NO

153

-3Dollar Currency Held by Refugees
The Treasury Department and the Department of State have

considered with the Board the problem of the present currency
controls as they affect refugees who surrender United States
dollar currency upon their entry into Switzerland. In view
of and solely because of the humanitarian considerations
involved our Legation in Bern was formed that the Treasury
Department is prepared, until further notice, to countenance
the purchase by a designated Swiss bank, under specified
The
conditions, of amounts up to $100 per person per month.
Legation was requested to 80 inform the Swiss unless our
Embassy in London which has been advised of this decision
and requested to cable its comments or agreement to Bern,
feels that for any reason the proposed procedure 10 objection=
able in any way.

We were recently advised of a proposal which has been
submitted to the Dutch Government involving the evacuation
to Switzerland of 1,500 Dutch Jows now held in de rean camps
British
the
views
at
The
Theresienstadt and Bergen Belsen.
of

Governments

of

proposal

the

having
a

United States
certain aspects

been

cable

concerning

requested

was

sent

to

the

Embassy

in London informing it of this Government approval of the
continuation of the negot lations under the conditions and

provisions suggested by the Embassy and NEW.
CONDITIONS IN GERMAN CONCENTRATION CAMPS

In response to our recent inquiry as to whether Schutshaeftlinge
include persons actively engaged in labor in Germany Representative McClelland advised us that the best information
available indicates that most Schutshaeftlinge who are capable
of physical labor are employed by the Nazis at tasks of varying
importance to Germany' war effort, al though no statistics are
essential 'war
numbers
the
to
actually engaged
available
work" such AR the manufacture of munitions or war material.
It is known, however, that large numbers of Schutzhaeftlinge
literally have been made slaves for the performance of such
heavy physical labor as building roads, clearing debris, and
digging anti-tank ditches. At Ravensbrack, the women work at
reconditioning used clothing shipped from extermination camps
in Poland. Jewish deportees at Theresienstadt sew Germany
army uniforms and make heavy wooden cases for machinery etc.
that
who
from
evacuees
recently
camp
according to reports
arrived in Britzerland. Many Schutzhaeftlinge who were
evacuated by the Germans from campa in the east are now
inactive in terribly crowded assembly camps.
in

as

of

nationalities. McClelland reported that present plans of
Intercross are to deliver parcels, insofar as is practically

possible, only to those who are 111 and exhausted.

According to a report which reached us from a private source,
there are now a large number of prisoners of WAR at Theresienstadt.

EVACUATIONS FROM SWITZERLAND

Representative McClelland informed appropriate military
authorities that the refugees to be removed from Swiss

territory at this time include the entire group of 1,672

Hungarian Jewish evacuees from Bergen Belsen and all of the
group of 1,210 evacuees from Theresienstadt except some 440

Proposal for Evacuation of Dutah Jews

and

The categories of Sohutzhaeftlinge to whom International Red
Cross relief parcels may be sent comprise Jews of Various

who are of Dutch nationality and who it is indicated are to
remain temporarily in Switzerland pending the decision of
the Dutch Government with respect to their ultimate destina-

tion. In view of the readiness of the Swiss to furnish
trains to carry the refugees to a French port of enbarkation,
their renoval from Switzerland can take place as soon as
maritime transport is available.
In this connection, the United Nations Relief and Rehabilitation Administration furnished the Board with information
concerning available and potential facilities for the reception
and care of refugees and outlined suggestions for improving
notification and processing procedures.

REPORT FROM HUNGARY

Minister Johnson sent us a summary of a newspaper account of
Swedish rescue and relief activities in Hungary given by a
Hungarian Jow who recently escaped to Sweden. Tribute was
paid to Special Attache Wallenberg, whose urageous and

tireless efforts in behalf of Jews were vividly described.
Demonstrating the zeal and disregard of his own personal
safety which characterized Wallenberg's pursuit of these
activities, it was related that in one instance he defied

an armed patrol, which had entered an area where some 5,000
Jews were quartered in so-called Swedish houses to remove

some of them to labor campa, by informing them that they
were trespassing upon Swedish territory, that they could
not trespass further without first shooting him, and that

PRECISION

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SG.U.S.PAT.OH

MICROFILM

ROLL NO

154

a of

none of the inhabitants of the area should leave as long
as he lived. In another instance, when he was informed that

11 holding Swedish passports had been arrested by
loaded Vienna-bound labor train, he
the arrived at the and station after the train had departed and
followed it until it stopped at station just short
the German border, where he managed to remove the 11

persons.

William O'Dayer

Executive Director

1

156

war Ref Bd 155

.0
the mattern, 10 permission for delevates of ICRC to be

PARAPHHABE OF T.LEGRAK RECEIVED

American Logation, Bern

FROM:
TO:

Secretary of State, Washington

DATED:

March 22, 1945

NU. ER:

1727

stationed in all major crups for both *Schutzhneftlinge* (SH)

CONTROL

as

and POWS to supervise personally distributions of relief.
laid down one condition which was that such representatives of
ICHC not circulate particularly back and forth to Switzerland

CONFIDENTIAL

AM

but that they remain in these campe until the end of the war.
Since certain numbers of SH are being worked in War Industries,

US URGENT.

this restriction 18 presumably on the grounds of military

NoClelland sends the following for O'Duyer, WRB, and the

security.
Department.

On the 21st of March, Burckhardt of ICRC reported to no

I refer herewith to the Legation's telegrame of March 8

that the choice of appropriate delegates for these casp posts

and March 21. Non. 1481 and 1667 respectively.

was being actively pursued by the consittee, and they will be

It has unfortunately not been possible for ac to report

despatched as rapidly 8.8 possible into Germany.

sooner on results of recent discussions with German authorities
by ICRC President Burekhardt because of illness.
Burckhardt first met with Kaltenbrunner of 33 on March 12

There 16 willingness on the part of VG to Allow deliveries

of relief of all types by truck or other means of transport to
SH irrespective of nationality or race. It VBS recueated by as

,

C

in the Vorarlberg region between Swiss border and Innebruck. A

that Any such relief distribution should be conducted discreetly,

personal letter was sent by Himaler stating that he was prevented

especially any relief given to marching coluans along the roads,
in view of difficulties of food supply situation for the Germane

by military duties from being present and delegating to Knitenbrunner full power.
On March 13 conversations were continued in Kreuzlingen,

FD, and on March 14 with Berber Alone in Zurich. For some
months now Berber has been in Switzerland and appears to be one
of Hibbentrop's special contact nen.
The main concession obtained from 88, as Burckhardt explained
the

(

with respect to evacuation of SH, final detailed authorization covering specific persons whom ICRC will be permitted to
3

Switzerland, with Knitenbrunner plus Berber, Director of Foreign
Polition1 Institute of Foreign Ministry, and Windecke of German

themselves

evacuate has not been obtained from Berlin as yet, Although the

as agreed in principle to allow the exit of women, children,
elderly and 111 people irrespective of religion or PAGE. An
ansver

158
157
O
0

answer is expected by ICRC by the 26th or 27th of March.
It 1018 suggested bu Burnkhardt of ICRC that, in view of

danger of approaching front, innates of women's concentration
camp of Ravensbrueck be mong the first evacuated. This
camp is located on the min highway to Neustrelitz approxi ately
70 kilometers north of Borlin and contains at lenst 30,000
omen of principally Hungarian (Jewish), Polish, Norwegian,
Belgian, Czech, Dutch, French, Huesian and other nationalities,
and it 10 definitely one of the bad camps.
It was stated by the Germans that transportation fo any
such evacuations would not be supplied by them. Consequently,

it in planned by ICRC to utilize returning POW relief trucks,
although this will be a difficult and inadequate method of
effecting evacuation, especially persons who are 111.
The use by ICRC for exacuees of parcel ships returning
from Lueback c Goteborg was not favored by the Germana who

stated that these waters were thickly mined and that they did
not wish to be held responsible for sinking any ships londed
with evacuees.

The possibility of sending sanitary blocked train to
Ravenabrucck from Switzerland If and when final authorization
for the evacuation of this camp 10 given by the Germans, 10

still bein.; discussed with the Swiss authorities by ICRC,

under the present chnotic state of German railronds which are
being constantly boobed.

with respect to the question of evacuation of SH in
general an attempt was made by Kaltenbrunner to create the

impression that as had really been only an executive organ
throughout the past years of BAGS arrests and deportation of
civilians to Germany from occupied countries and as would be
willing to allow useless SH to leave Germany now that food

and housing situation was growing difficult within Germany.
It appears that Burckhardt of ICRC is working on some
special schene for evacuation of French SH who AT to be
exchanged for German civilians held by the French (I understand
mainly Baltic Germane taken in Alsace region by the French).

It is reported that French authorities are prepared to furnish
100 trucks to carry out this plan.
As soon ne information regarding identity of first groups
of SH whose evacuation will be permitted by the Germans is

obt ined from ICRC, I will report to WHB promptly.
In sunning up, Mar Refugee Board can contribute to this
double relief and evacuation program most effectively by (1)
outaining 8.6 many tires and trucks as possible, and (2) organizing and placing into operation mechanism for evacuatin from
Switzerland such BH groups the may ar ive here and who are non-

repatriable in Europe for the time being.

although the Swiss are both reluctant to release such
transport equipment and doubt that trin could get through
un or the

HARRISON

DC/L:IDB:AN

3-23-45

RECISION

MICROSTAT

MICROFILM

ROLL NO.

159
160
C

CARLS TO AMERICAN LEGATION, BERN, FOR MOCELLAND, FROM THE WAT RESUGE BOARD
CABLE TO AMERICAN LEGATION, HERN, FOR MOCLELLAND, FROM THE WAT REPUBER BOARD

Please deliver the following message to Saly Mayer, St. Gallen,
Please deliver the following message to Oerhard Riegner, 37 Qual
Switzerland, from M. A. Leavist of American Jews ah Joint Distribution Committee
dilson, Geneva, from Arieb Tartakower of World Jewish Congress:
QUOTE TOURS MARCH 8 HAVE APPROACHED DEPARTMENT OF HAS NO

CUOTE ADOLP) SCHAAP or PHILADEIPHIA HELOTHER OF DR. LOUIS SCHAAP.
LATTARS WITH JOHANIA SCHAAP AND MOTHER IDA SCHAAP RECENTLY ARRIVED

WAR BOARD CONCERNING THUCKS UOB THILTER DETAINED
CIVILIANS ALL EFFORTS ARE BEING HADE COMINICATING ALSO

HE CA SEED THE ASSISTANCI. PLEASE CARL as REPORT. UNQUOTE

PRO ANXIOUS LEARN ADDRESS CAMP so THAT

SYSTISH FORD CROSS. UNQUOTE

THIS 13 Mil MERIN CARLX 100. 474

THIS 15 WITH PERSON CARLS NO. 472

5:15 Bell.

March a 1945
5:15 P.S.
March 22, 1945

PRECISION

MICROSTAT

TRADE MARK

MICROFILM

BOLL NO

162
161
C

CARLY TO AMERICAN LEGATION DOUR FOR HOULYILLAND. FROM THE WAR REFUGES

CATIL TO AMERICAN MRUSSELS, FROM THE VAT REFUGES BOARD

BOARD

Please deliver the following message to Issa: Kabowitzki,
June Geucheret, Brussals, from Ariah Tartakover of World Jewish Congress

Please deliver the following to Gerhard Riegner. 37 Qual
Vilson. Geneva, from Arieh Tartakower of World Jewish Congress:

,

QUOTE AM IMPORTED THAT CONSIDERATION NISCOLOR OF JEHISH

DEPORTESS FROM SALONIKA WERE FUIND IN LIMITATION ART

OF PLEASE CARLY WITHER IMPORMATION OOR

REOT TRY SECURE LIST OF THOSE PERSONS AND IMPORMATION
ABOUT THEIR PRISIDED SITUATION.

QUOTE INFORMED THAT CERTAIN NATIONALS REING
REPATRIATED PACK GURRANT TO TRANSE PLYARE COM/USICATE INTER
BEDCROSS AND JARBLUM THY HAT? AS MANY JRVS INCLUDED AS POSSIBLE
CARES ASSILTS.

THIS IS WITH XX CARLE so. 470

5:15 T.S.
March 22. 1945
5:15 5.8.
March 22. 1945

$

PRECISION

MARK

MICROSTATI

MICROFILM

ROLL NO.

163
164
CABLE 20 AMERICAN LEGATION, @70CKEDLH, FOR OLSEN TRON WAR REYOUR BOARD

Please deliver the following message to Hillel Storch, Postbox
7306, Stockhols, free Ariah Tartalover of World Jevish Congress:
JODER UNDERSTAND SVEDIES REDCHOSS APPROACHED 27 INTERREDOROSS

CONCERNING SENIING SVEDISH 3047 TO LIMINE FO2 EVACUATION

CIVILIANS IN HORTELIS PLEASE INGIDIATELY
VISI THEN GATER RESULTS.

O

CABLE TO AMERICAN LOGATION 3KRM, FOR WOOLELLAND, FROM THE WAR BOARD

Please deliver the following message to Gerhard Riegner 37 QUAL
Vileen, Centra, from Kurt 2. Grossmas of World Jewish Congress:

goods PLATT WITH NO. STIERED GOLDATER ETR. 52,

ZURICH, LILLI AND - FAMILY LAST KNOW
ADDRESS

THIS IS WE STOCKMOLK so. 337

THIS ID was 3238 so, 469

0:10 D.R.

Barch 22, 1945

5:15 p.m.

March 22, 1945

(

166

165

CARIS TO AND ICAN LOGATION, 3489 FOR HOCLELLAND, FROM WAR REJUCKE BOARD
GAYLE TO AMERICAN LOCATION MARK, FOR MOCLELLAND, FROM THE VAR ROUGES BOARD

Please deliver the following masage to Gerhard 37 quet

Please deliver the following message to Issac Sterabach from Rabbia

Vilaon, General from Eurs Grossous of World Jewish Congress)

Kutler and Telnesswits of Yead Habetzale Committees

QUOT% STRATE DO UTHOST HALP FOLLOWING PROF. DAVID CORES,
PORKER HEAD JEVISE COUNCIL HOLLAND AND FAMILY:

QUOTE SEND HOTE FOOD PARCELS TO AND OTHER CAMP'S
THROUGH INTERNATIONAL RED CROSS AND OTHAR SEASS, INTERNESS

18. RUE COURT FOUNDER IN HOLLAND AND FAMILY, LAST

STARTING FOR HUNGER IN ALL CARD'S USD STERT 277022 TO RESOUR
HORS PROPER CONTACT INTERNATIONAL 200 CROSS AID HOCKLIAND

KNOWN ADDRESS adidas SELECT: DATE GOBLER AND FAMILY, KOREAN SELSES.
CONQUOTE.

COMPLETING TRATIFORDATION AQUIPILITY AND PE&30 FOR THE USA OF

DOST TRUCKS RETURNING TO FOR EVACUATION INTERNATION
WORRIED A3011 DOC REPORT. EVERY EXPORT SHOULD 30 HATE TO STOP

EXTERNINATIONS AND TO STRAT NINTER COUNTER HATE YOU
ANY INVOICATION CONGERNING 500 CHILDRENS SUDAPEST WILD DOCEIVED

SPANISH TIMAS 203 TAYGIERS CONTACT intervational KED CROSS.

THIS IS on CABLE NO. 471

UNQUOTE

THIS IS W83 BERS CABLE TO. 473

O

6:13 D.M.

North 22, 1945
6:15 P.S.
March 22, 1940

PRECISION

TRADE MARK

MICROSTAT

ROLL NO

168
167

PLAIN

PLAIN

XX-55

Bern
Boyn

Dated March 32, 1945

Dated March 22. 1945
Rec'd 11:31 S.A.

Hec'd 9:25 .... 23rd
Secretary of State,

Secretary of State,

Washington

Washington.

1723, Twenty-second

1708, Twenty-second.

FOR VR3 FROM

FOR WRS FROM MOCLELLAND.

Please deliver fellewing message free Free Edembere

to Rebinses of Aprican Christian Cemmittee.

"Veluntary agencies Switzerland are now able through

intermediary of French Laboray at Jern to buy Twise

credits is France for relief work at rate of 3.75 Swiss
france per hundred French Ve transmitted free Swiss

Please deliver following message free Field to
Charles Jey Uniterism Service Committee, Beston.

*Regarding Pelish Mission agreement in principle

assured but Individual visas still avaited from Vareay,

Pedrichevaki has sent further telegram ungine quick action
and expects answer within two weeks, Meantime technical

700,000 needed by Teureille and Ginada for current refugee

preparations preceeding both here and in Paris,
Pedrichovaki and his advesors Paris consider Facial can
pesition delegation unimportant but Pelish advisers here

to transmit about $40,000 through our channe1 described

agree wisdom incisting non-leve Hissies BOY companed I've
delogations one representing JDC and one other represent.

and Swedish funds 300,000 French france for refugee

Chaplain but these funds insufficient precure monthly

expenditures. Suggest you request excentional permission

above. Our goods for France are shipped through Intercress
which submits shipments to United States Legation for
approval. We new need your contribution for refurees is
Shanchai as please add $1.000 to your monthly subsidy.

Kindly infers Richard Reseberg. 790 Hiverside Drive,

New York City, 32. Wrike and children all safe .. of

January 4th. Wrike was working is . hospital where

the wishes to remain. 23.85

in Universe under direction Dr. Resembluth representing

both. Have added our delegation canable non-dewish adminis.

treter new is change technical preparations Paris also non-Jowtah
shysician with medica-social experience in urban and rural

districts Palent. Have discussed transit problems with

Tureelav representatives France who promise all facilities
including Turealav wiess and transportation Bari Wareav
by plans, Lists of missing persons being prepared here

and Parts for research Peland questiment and taken supplies

HARRISON

X

being assemble here. Mission expects take about four
tone since all alvise must But arrive emply handed,
Urgently need additional funds, can you send about $5,000
more besides full personal equipment. Intend furnish
Uniserce delections with standard instrumentation
at

least one Feliclinic and several dental cabinets.
Principal task our delegation will be study situation needs
concerning neurishment especially infants and children

housing clething verkine and hygienic certifient merbidity
especially malmutrition epidemics tuberculosis also

pereibilities selfbeln providing cress section social and
health situation area investigated with recommendations

169

March 22, free Jers

.2-

170

None

#1708

Dated March 12. 1945

concerning relief action personnel organization. American etc.

future work MUST come largely free

Rec'd 10:30 a.m.

since here increasingly
you
medicines tonics surgical instruments

prepare Supplies pessibilities
ship
for directly
limited. Our initiative Can
elething
shees
blamkets.

old has resulted wide public

Secretary of State

through bread committee

Washington

and International organizations deeirine
including ayself secretary of BAW
dental for delegates beingfurnished
aid Belish Pelent and
coordinated
supplies
interest special including new
paid
byDwiee
Uniserce

768, March 22. 10 ..

for missing persons. Hapert of

TO NOSES LEAVITY JDC FROM JOSSO SCHVANTS.

sevepaper specially sentioned

designed abserb separat
section Hale in leading committee Haus not insugural Uniserce's actions committee meeting research but rele

10, Group of 900 refugees departing for Pelestine

new oserdination center and clearine house creation

reported to Wareav and expreval
serely of committee
.. which
remaine received one
status
our mission

relief grouns avaitiae dizarture

Hungary have already Dr.

free France with mission sound out pessibili-

fies send report Formerly

have deposited 12 million lire for which we shall pay
out $120,000 is Palestine Yare to Palestine is 14
pounds for third class passage with children between

Peland, first Fiber dees not and authorised Reference effect Regarding Befaunn sent Humarian was is for of

member of Hungerian National Liberation movement
Switserland, his wife is new member second Furich course

and will be later available for work Numbery.' 59.65
HARRISON

three and twelve paying half fare and under 3 gratis.
Refuree group has paid is 500,000 lire in cash for pay-

:

aent passages and another 500,000 will be probably collectWI

ed from relatives here. WILL furnish you all details ..
FOOD as available and will also advise where payment for

transport is to be made
KINK

WF

PRECISION TRADE MARK MICROSTAT MICROFILM BOLL NO.

171

CARLE 3 AMERICAN COUSULATE CHUMBRAL. FROM WAR REQUIRED BOARD

Please deliver the following costage to Joint Instrication Committee
Jerusalon from V. A. Leavitt of American Jewish Joint Distribution Committee
QUOTE PLEASE ASK INVESTIGATE SITUATION FAMILY LURA
JASIONONKA FOR HIALTSTOK 21. POLAND
AND EXTEND ALL POSSIBLE AID. CARLS us REPORT. UNQUOTE

C

5115 p.m.

March 22, 1945

MICROSTAT

TRADE MARK

REG. U.S.PAT.OFF

MICROFILM

ROLL NO.

73

172

PARAPHRASE or TELEGRAN RECEIVED

March 22. 1945

There is villing 00 the sert of TO to alley deliveries

American Legation, Born

FROM:

-2-

#1787

of

relief of all types by truck or other asage of transport to

SS

SE irrespective of nationality or race. is was requested by
that any such relief distribution should be conducted discreetly.

TO:

Secretary of State, Washington

DATED:

March 22, 1945

estencially any relief given to merchine column along the reads,

NUMBER:

1727

themselves.

is view of difficulties of food supply situation for the Gaymane

CONFIDENTIAL

With respect to evacuation of #g. final detailed authorise

tion envering specific persons when ICRO will be permitted to
evacuate has not been obtained from Herlis .. yet, although the

UD Urgent.

SS agreed is principle to allew the exit of women, children,
elderly and 111 people irrespective of religion or race. Ac

NeGielland sends the following for O'Dayer. VER. and the

ADDRESS is expected by IGRO by the 25th or 27th of March.

Department.

It was regrested by Durekhardt of ICRO that, in view of
danger of approaching front, innates of woman's concentration

I refer herewith to the Logation's telegrame of March 8
and March 21. Yes, 1481 and 1687 respectively.

CAND of Revensbrueck be amone the first evacuated. This

It has unfortunately not been possible for - to report

camp is located on the main highway to Segatrolite approximately
70 kilometere north of Berlin and contains at least 30,000

songer on results of recent déscussions with German authorities
by ICNO President Purckhardt, because of illness.
Purckhards first not with Kaltenbrunner of so on March 12
is

the Vererlberg region between Swiss border and Insabrock.

women of principally (Jewish). Polish, Horregian,

Belgian Coech, Putch, French, Hussian and other nationalities,

A

PRECISION

personal letter was sent by Himmler station that he was sperented

by military duties free being present and delegating to Kalten
breast fall power.

is 1. pleased by ICRC to Milise returning POW relief trucks,
effecting evecuation, especially persons who are 111.

months new Bayber has been in Switzerland and appears to be

The use by ICHC for of parcel ships returning

ne

stated that these waters were thickly sined and that they 416
with evacures.

The main concession obtained from 55, as Durckhards explained
(sa)

and JOWS to surrice personally distributions of relief. SS

laid down one condition which was that such repres entatives of

ICRO not circulate particularly back and forth to Switserland
but that they remain in these campa until the and of the war.

Since certain numbers of GH are being worked in War Industries,

this restriction is presumably on the grounds of military
security.

On the 21st of March, Burckhard$ of ICRC reported to as

that the choice of appropriate delection for these CARD rosts
was being actively pursued by the committee, and they will be
despatched as rapidly as possible into Germany.

from Luebeck to Gotabore was not f-vored by the Vermane who

not wich to be helf responsible for sinking any shipe leaded

of Ribbestrop' special contact NR.

the mitters, is permission for delegates of ICKC to be

It was stated by the Germans that transportation for any
such evacuations would not be supplied by them. Consequently,

although this will be difficult and inadequate method of

On March 13 conversations were continued is Kreuelingen,

Switserland, with Kaltenbrunner plus Berter, Director of Foreies
Political Institute of Foreign Ministry. and Windeeks of Garman
FD. and on March 14 with Bather alone in Burich, For sone

stationed is all major CARD# for both

and it 1. definitely one of the bad came

The possibility of sending sanitary blocked train to

Ravenabruack from Switserland If and when final authorisation

for the evacuation of this cann is dien by the Germana, is
still being discussed with the Dwice authorities by ICRO

althouch the Swies are both reluctest to release such
transport equipment and doubt that train could get through
under the present chectic state or German railroads which are
being constantly bombed,

with respect to the question of evacuation of all is
general an atteant vee sade by Keltenbrunner to create the
incression that 15 had really been only an executive organ
throughout the that years of BASS arrests and deportation of
civilians to Germany free occupied countries and as would be
willing to allow useless 50 to leave Germany now that food
and housing situation vas growing difficult within Germany

It appears that Purckherdt of ICRC is working on ....

special scheme for evecuation of French a who are to be

exchanged for German civilians held by the French (1 understand
mainly Blatic Germane

PRECISION

MARK

MICROFILM

MICROSTAT

ROLL NO

175
174

.3.

#1727
1

PARAPHORASE OF TELEGRAN RECEIVED

March 22. 1945

mainly Beltic Germane takes in Aleane region by the French)

It is reported
are prepered to furnish
100
trucks to that
carryFrench
out thisauthorities
plan.
As soon as information regarding identity of first groups

of - whose evacuation will be permitted by the Germane is
obtained from IGNC, 1 will report to WRIN promptly.

In running us, Mar Refure Board can contribute to this
deuble relief and evacuation program nost effectively by (1)

obtaining as many tires and trucks .. cessible, and (2) organis-

American London

FROM:

TO:

Secretary of State, Washington

DATED:

March 23, 1945 (Received March 23)
2965

CONFILENTIAL

The following massage wes sent to tockhole for the Legation
and and
Olean
No. 270 and is repeated to the Department for WR3,
TEA
the as
Department.

the and pl -sing into operation mechanism for evacuating free

Switserland such = groups who may arrive here and who are non-

repetriable is Surape for the time being.

HARRISON

DO/L:ID:
3-23-45

Cable March 17. No. 2070 free VRS. FEA and the Department
recommending an extension in percel program free Sweden for persons

detained is Barges Belown has been received by the Nebasay. It
is proposed to ship 200,000 kreaor worth of food, 300,000 kromor

medical supplies and 500,000 krenor clothing. It is not clear to
the (abassy how each of this will originate is the United States

and how such is Sweden but it is assumed that at least the feed

is an indicenous product of Tweden. Furthermore KSW and the Habrany

are not clear as to the relations 1.e. between this proposal and
request for 100 tens of feedstuffs which the British Logation re

forred to NEW (00 18T of March 4) and JBC application 7/992 for

15 tens of feedstuffs which the British legation also referred.

It is stated in the cable free the Department that the distri-

bution would be handled in the SADE way .. the existing scheme for

food percels. It is understood by the abosay free references eited

that the Department intends that the parcels would be sent es the

respensibility of .... reliable independent organization such ..

Swedieh led Cross or Intercress that receipts would be requested and
spet checked and that later shipments would depend on early late

being distributed satisfactorily Free information KIDW received

from British Logation (reporting to the Department is the Sabasay's
despatch of March 14. No. 21671. the Laboray understands that the
most customary method of forwarding parcels recently has been by

commercial channels 1. J Weetbear and A/S Bankempanies. It is
felt by both NEW and KND as indicated is the /aborry's despetch,
that some Independent organization such as Swedish Red Grees or

Intercreen should be prepared to take the responsibility for any
scheme to which approval is given. Logation's relief sub-e enmittee
is prepared to approve further shipments provided this condition
can be not and sens check on receipts can be note. Information
free the Department as to whether 11 censure in the opinies that

... reliable independent body should particinate and information

free Stockhelm regarding the total amount of further authorisations
sev requested would be appreciated by KWD before giving final approval.
WINANT