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MICROFILM TRADE MASE 179 176 O 3/23/45 3/23/45 Mr. Fussell Mr. Luxford Secretary Morgenthau Secretary Morgenthau I read with great surprise in today's New York I was surprised to see in this morning's paper come that some Treasury spokesman had given out quite a story Times that the Federal Reserve let they has outus about with that an Advisory Committee. Did know the as12:00 soon aswhen a deadline you are on law enforcement, and I just wondered who it was, and I would like to know all the circumstances connected in advance? Please give me a memo on it and I want with it, please. I want to know whether it had your approval or whether somebody shot his mouth off. some memo just of today. possible If which not there, means this comes to your office please see that some one else answers it this morning. u 1/13/45. 0 0 0 180 March 23, 1945 a Luncheon Meeting in Secretary's Dining Room 12:45, March 23, 1945 Present: Secretary Morgonthau Mr. Suarez, Finance Minister of Mexico Mr. Monteros First Secretary of the Mexican Eubosay Mr. White The Maxicon Anbassador had raised the question the day before of . renewal of the stabilisation loan which was expiring on June 30, 1945. Mr. Suarez had also inquired about what Secretary Morgenthan's attitude would be with respect to the ownership of the Pan American Trust Company of New York by the Bank of Mexico. Secretary Morgenthau had replied: live se a day to think it over and this he would have a reply at lunch the following day, since he was not going to be in tom next week and the Minister was leaving in a day or two. $ At luncheon the Secretary agreed to renew the stabilization arrangement. However, he thought it would be preferable to renew it for only one year in view of the Brotton Woods legislation. with respect to the ownership of the Pan American Trust Company by the Bank of lexico the Secretary showed Mr. Suarez and the others a copy of . memorandum which had been prepared for him by Mr. Coe indicating the undestrability of ownership by a foreign central bank of . bank in the United States. The Secretary asked Mr. Swares whether it was very important to them. Mr. Suares said that it was not and the Secretary replied that in his judgement it night be preferable in that event not to continue ownership of the bank by the Bank of Mexico. However, be suggested that the Mexican Enbascy discuss the matter with Mr. D. Bell who handles matters relating to domestic banks. It was so arranged. Mr. Suarez also mentioned that there was a possibility of holding 4 conference probably in Medico City to carry out the provisions of the Bretton Woods Agreements, calling for further examination of the silver question. However, he indicated that plann were very tostative AS yet. N TRADE MARK MICR NOT TO BE RE-TRANSMITTER COPY NO. 4 177 SECRET OPTEL No. 93 Information received up to 10 a.m., 22nd March, 1945. NAVAL NORTHERN WATERS. Convoy of 24 ships has arrived Russian 1. ports. A sloop (5 officers and 55 ratings survivors) and one ship in the convoy was sunk, while another ship was torpedoed in approaches Murmansk. Several attacks on U-boats were carried out by escorts. HOME WATERS. 21st/22nd (night). E-boats active off Lowestoft where constal convoy unsuccessfully attacked. 2. ENEMY ATTACKS ON SHIPPING. In convoy off Murmansk a 7210 3. ton U.S. ship sunk and a 7176 ton U.S. ship torpedoed by U-beat. 21st. A 7176 ton U.S. ship in up channel convey torpedoed by Uboat and beached off Plymouth and a 7194 ton U.S. ship in down channel convoy sunk by U-boat S.W. of the Lizard. MILITARY WESTERN FRONT. Southern Sector: Now confirmed that U.S. arrour has reached Noustadt, Norms and Mains. 7th and 3rd U.S. Armies made contact Homburg area and eliminated enemy pocket west of town. Mopping up of enemy rennants surrounded in pocket south of Moselle "almost complete. Central Sector: Remagen bridgehead now stretches from 2 miles north Andenach to River Sieg (opposite Bonn) which has been reached on wide front. 4. EASTERN FRONT. Russian forces now reported within 10 miles N.W. West and S.W. of Danzig. A.R WESTERN FRONT. 20th. Additional results received from SHAEF (Air) state further 1516 aircraft (8 missing) operated whole front destroying or damaging 2036 road and rail vehicles, and 94 in:omotives while inflicting casualties on enemy aircraft on ground 50,9,113. 20th/21st (night). 659 aircraft despatched (13 missing) crapping 1650 tons oil plants Heide and Bohlen with good results while minor targets included Berlin, sea mining and other missions. 21st, 466 Bomber Command escorted bombers (5 missing) dropped 1384 tons in good weather on railway contros and bridges Rheine, Munster and Bremen. while 637 tons also dropped on oil refinery at latter town. 1403 escorted U.S. heavy bombers (9 bombers and 21 fighters outstanding) dropped 2904 tens on 11 airfields N.W. Germany, AFV works at Plauen and other targets with good results, while inflicting enemy casualties 12,1,1 in combat and 46.0.40 on ground. SHAEF (Air) boubers 642 (8 missing) dropped 1026 tons on communications Northern and Central Sectors while 2140 fighters (11 sissing) operated same sectors destroying or damaging 163 AFV's, 68 locomotives, 3078 road and rail vehicles and inflicting enemy 10.1.5. 20 escerted Mosquitoes (4 Mesquitoes and 2 Asstangs missing) successfully attacked Gestape Headquarters Copennagon. MEDITERRANEAN. 19th/20th (night). 73 heavy bombers (1 classing) dropped 224 tons railway centre Bruck (Austria) 20th. 780 heavy bombers (4 missing) dropped 1177 tons on no railway centres Austria, 243 tons on two oil refineries and 142 ins on other targets while 213 medium bembers (3 missing) and fighter bombers and fighters 1011 (8 missing) attacked communications nd other targets North Italy with good results. STAM. 19th, 87 Liberators (2 missing) dropped 222 tons 6. on railway yards and bridges area Jumbhorn (south Sian). HOME SECURITY (Up to 7 a.m. 22nd) 9. destroyed. 10. (night). FLYING BOMBS. 21st/22nd. (night) Three plotted and all 22nd. So far one plotted and shot down. ROCKETS. 21st. Three incidents reported. 21st/22nd 11 incidents reported. 182 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE Mar 23, 1945 TO Secretary Morgenthau FROM Mr. Coe Ownership of Pan American Trust (New York) by Bank of Mexico The Bank of Mexico, without consulting the New York Federal, has purchased controlling stock ownership of the Pan-American Trust Company, a deposit bank operating in New York City The Bank of Mexico may offer some of the stock for sale to other Latin American central banks This ownership is almost without precedent. It might lead to difficult problems in the relations of the Pan-American Trust and the Bank of Mexico with the state and federal banking authorities. For example the Bank of Mexico might be regarded as a holding company affiliate and become subject to examination and reporting Furthermore, the supervising authorities are charged with the duty of examining the business of the local bank and passing upon the use and disposition of its resources Treasury Department Division of Monstary Research 181 Date March 24, 194510 To: and the competence of its management. It would not be pleasant for the Federal or the New York of the Bank of Mexico with respect to the operation and management of the Pan-American Trust Company. For this reason, the Federal Reserve Board has requested the State Department to make representations to the Mexican Government to have the transaction undone. The State Department has instructed Ambassador Messersmith to do this after a letter is delivered to the Bank of Mexico from the New York Federal suggesting a discussion of the question. In our opinion. it would be preferable to terminate the present arrangement or to convert the Pan-American Trust Company into an agency of the Bank of Mexico not accepting local deposits. lr. D. W. Dell authorities to have to take a critical attitude on the policies Secretary korgenthau 1st Jr. Duares read this menoranics and asked Lr. Suarez other this satter was very important. Deares realied that it was not and the Secretary said in that event be HIS of the opinion 11 would be preferable to return the Pan Aperican Trust to private hands and suggested that the Mexican Enbaasy get in touch with you before they take a final decision. H.D.T. housing mr. Bell MR. WHITE Branch 2058 Room 214-1/2 Q Sec. refer this D. Bill March 23, 1945 3:50 P.M. HMJr: 184 183 Hello. Operator: Mr. Grow. HMJ Hello. o HMJr: Well, it certainly didn't come from here. 0: No. HMJr: You clear it with McCloy, will your I'll clear it with McCloy in any case. And when its through ----- could I have a 0: Joseph Grewt Mello, Xr. Secretary. HMJr: Speaking. HMJr: photostat of the whole business? That proposed insertion did not come from the 0: State Department. HMJr: oh. Now : dan't know who it came from unless it was Colonel Boattiger into eat In an our conference G: HMJr: I don't think it fits, do you? HMJrt I'v just showed it to my Accistants have and they 0: I'll send it to you. G: 0 HMJ: with all the rest of it. 0: Well. I --- you ORD see your OVE Judgment The HMJr: President anid out it in and it 1. of right with 0 HNJr: 0: All right. I coan - the thing --We'll talk it over and ### have ve feel about it, if that's agreeable to you - either way. 106Jr: It's agreeable either MAY. 0: All right, good. that's fine, thank you. HMJr: Hello? G: Just wanted you to know that it didn't come from us. All right. I think it has been a pretty succeesful I'm wondering whether I ought to sign this paper for the State Department, or whether it is not necessary to have signature on it. Well, I think it would be nice. It would be appropriate wouldn't it? I think it would, too. All right, I'll put my name on it too, then. HMJr: I think 0.0 Acting Secretary, : think you should sign it. G: HMJr: 0: 0 oh, very, very. 0: me. 0: Right. day on the whole, don't you? HNJr: It doesn't do any harm, but it is so out of plane HWJrt Yes, G: any O.K. G: A photostat of the whole thing? HMJ: HMJ: yeaterGay. He night have ment it in. I don't know who =Ice would have, but I don't know who did it. Well, this naturally con- G: 0: All right, good, I will do it. Thank you. All right. Goodbye. MICROFILM TRADE March 21. 1945 .. HMJr: Hello. Operatort McCloy. HMJr: Hello. Mr. John 186 185 3:56 P.M. Mc: Yes. HMJr: And he setd it did not come from State. Mc: Yes. 106Jr: It 410 not come from Treasury. Must have been F.E.A. McCloy: Hello. Mo: FRJr: Well, the President signed it. HMJr: (Laughs) Mc: Ch, good. Mc: I don't know but what it VISE then. HMJr: No, how would they know. Somebody had n copy HMJr: He changed one word which I can't remember - hich VBB unimportant. I 010 got into a little argument with the Under Scoretary, He soid it VBS his understanding that all four area of this thing. that Mc: commanders BRO to the unanimous. HOJF: Yes. HMJr: I said if that were to nobody had ever mentioned it to SP. Mc: Yes. HWJ: The Precident said he had never heart it. Mo: He did. Mc: That wee - I don't know that 1: *** over HMJr: "The following paragraph should be inserted to precede the paragraph consencing 'Controle may Mc: written down anywhere, but I got the 14em VBE the general 1dea, at Yelth -- Ahuh. be imposed upon Derman economy. No: Yeah. HEJr: Now that 1. at the top of Page 2. Mc: Yes. Ont your thing there? that that No. the President paid he had never heart any such thing. Mo: Yeah, yeah. HWJr: He anic if you waited for them to be unsnimous, they No: No, I got -- Bob's got it. RMJ: That Mo: Bob Patterion's got it. H isn't here. This is the thing that it easy. HjJr: No: Yeah. would never agree. HKJr: This is the thing with the nex insert. No: Yeah. No: Yeah, HMJr: And then after he had signed the whole thing - HMJr: Mc: Yes, Met Grace Tully brought in 2 memorandum - have you heart about 117 HMJr: 0 Mc: No. Well, Grew will be phoning you. Let of read it to you. "Germany's ruthless warfare and fematical Mazi resistance. Yeah. ....have destroyed German economy and have made MICROSTATI MICROFILM -3- 187 MMJr:(cont) suffering and check inevitable. oh, yes, I know this. Xo: RMJr: "The Certane cannot responsibility for what Mc: Yeah, I got -- I know where that came fres. they hav brought upon themselves. 188 HMJ My boys don't think it will do any here. Not It won't do F hit of harm. I think it will do good. HMJr: Mo: That's not F.E.A. HXJr: Where? MMJr: O.K. H signed it, 410 hel H. signed it. Mr: Yeah. A11 right, now. who is E>Ing to tak- care Mc: of the photostate? That VPE not F.Z.A. Mo: MMJr: Mc: Ch, they wouldn't - statebody had # copy. No. I'll tell you what -- how that YOU. John Boettiger called me up about 31.15 hour age haf THE and he said. "Have you any objection the in- clusion of such c language this if the President vents to out it in?" said "Ho, I I noked Crew. Mo: Ahuh. Well, that's best. That's that. 106J That's that. No: wouldn't have BOY objection if the President wanted to put it in.' Yesh. Xo: He 0109 MMJr: Yesh, It's wrote in. Oh. Mc: He spots what in't It's the thought that well, the Mess 1: on you MMTr: I think it's sort of pretty good -- pretty good propagance. HWJr: No: not on UP 10 1: doesn't go well. HMJr: Well its 11 right with our boys. I told that The President thought 11 vas O.K. M. Aney where : cand from. Mo: HMJ: Mc: MMJr: Net Yes there 207 section sada of March 10th? Or 510 15 my anything about 1: at #11? 10Wr: Do you think 1: strangthens 117 Xc: of course I ver breathle but if he onlive up maybe you our my O.E. The President has already approved it. Well? HDJ: And 10 Grave cells you up, I kind of was noncommittel - Yooh. That's where it case from. But it kind of scared of . little bit. (Laughs) I 'snow the anever . it -- It VET put us to me AR moisething the President VAL wither in favor of yould I mind 117 I guess 1: originated in John Boetticer' brain. Mo: THIN Mc: This March 10th. on he dtd. Yesh. Vell, that's all right. MMJr: 11. write that in. Net He 010, and who's --- 11 anybody bring that up$ 106J Listen, I'll be plain -- you cen't (laughs). Mo: D.K. (Laughs) Oh. TOW-= That's all right. Mo: I wouldn't --- I wouldn't - but please. I get you. I get you. TRADE MARK MICROSTAT MICROFILM -6- 189 I'm not telling --- but you could guess. It's already written in HMJrt Mc: It's already in. Don't you like 112 I think that's fine. HMJr: No: HMJr: I think that clears up the last vestige. Xc: HMJr: It's in in his DMD handwriting, and in his 0.000 can and ink Yeah. C.K. Well, - Net HMJr: 3. just wanted to know who the Artika on and 1 DAIC on He's very happy. It's IT very FOOD job. Good program great thing, and the Treasury should be eyes credit for it. Mo: HMJr: Well, we got Good cooperation. O.K. No: HIJ: C What? Mo: HWJr: No: HKJr: I'm happier time I've been since March 10th. That VIE quit a netback. That WELL like -- that vas tix that Argano bulge. Yeah. Junt exactly. Yell, March 10th. Ye's got to liquidate them. ...bea been superceded. The President siked 20 how to spell : and I dict's know, and I thought while he was thinking about it, as eight not spity it in. O Mo: (Laughs) O.K. HKJr: Well, you wanted that in, cidn't you? Mo: Oh, sure. I think 1: is clears? that HRT -- much clearer. HKJr: Well, : 014 it to help you out. Mc: O. K. Thank you very such. HMJr: Goodbye. 190 March 23, 1945 4:04 P.M. -2- 191 & Operator: Mr. Clayton. HMJr: Hello. Mr. Will Clayton: Hello, Mr. Secretary. HMJr: Will, it's all in the bag. O HMJr: (cont) this just couldn't be pasted on. Perhaps so. C: HWJ It's on White House stationery. I sec. C: So Joe told me. 0: HMJr: I'm very happy. HMJr: on, I'm very happy about it. He told as about C: C: a memorandum though that somebody sent over there. HMJr: HKJr: Yeah. 0: C: It didn't come from us. I wonder where it case from. HMJ No, well, it didn't come from us. C: HMJr: HMJr: It didn't. But I'm perfectly -- I had time to read it -- I'm C: perfectly happy to have it in. HMJ: You are? C: HMJr: And I'm afraid if we leave it out somebody might say well, the President said to put it in -- and then it casts a doubt. HMJr: C: HMJr: HMJr: I any it may cast a doubt on the whole document. HMJr: That's right. Let's not have that happen. As long as the President --- I wasn't in the room when he said yes, I came back - but as long as he said yes, put it in, I would, otherwise there might C: HMJr: That's right. I think you are absolutely right. Now is it going to be rewritten, or did he just write that word 'approved* in? Well if it has this new paragraph, it will have to be rewritten, DMJ: C: won't 117 Well, he signed the last thing. I don't see why That's right -- Goes at the bottom of Page 1, NO you can just paste it on there. This could be stapled on the thing. Either that way 2 or you could put it as 1A, and set it in between but I expect the best way to do 11 is staple it on. But what I'm fearful 16 that somebody might raise the question and propen the whole thing All over again. HMJr: 0 Right. Well, BOX, you're going to have it photostated. C: C: HMJr: Because it goes at the botton of Page 1. that. be a doubt on the whole document. C: Why can't that just be parted on? of course, that suite as fine. I agree with you fully -- let's not run any rick of C: oh, sure. It's not going to do any harm. We might as well put it in particularly under the circumstances. C: 192 I haven't got the document Grew's got it. I asked him to have it -- I think you had better follow thruFine. I'11 do that right away. Because see would all like copies If you don't mind sending three over here -- four, four, fourcopies. All right I'll attend to it right away. I'd appreciate it. All right. Thank you. I enjoyed working with you, and this 1s one of the most important meetings that I've ever participated in. 193 copies to Coe + 194 White C: Well, I think you are right, and : enjoyed working with you. I find that when you and I git together DEPARTMENT OF STATE on these tough ones, VI can generally iron them 3/26/45. WASHINGTON out. ENJr: March 23, 1945 Yep. Bye. I hose you will have A good rest on your trip. I think I will now. SECRET C: (Laughs) Good. My dear Mr. Secretary: HMJr: Eye. C: Eye. C: HMJr: As I knew you desired to receive as soon as possible copies of the 'Summary of the United States Initial Post Defeat Policy Relating to Germany', I had the "Summary" and the two covering memoranda of March 23, 1945 for the President photostated immediately and an enclosing four copies of each of these documents. Sincerely yours, Signature Acting Secretary Enclosures: Four photostatic copies. The Henorable Henry Morgenthau, Jr., Secretary of the Treasury. PROVICTORY PRECISION TRADE MARK MICROSTATI MICROFILM 195 DEPARTMENT OF STATE BEGREE Secret THE WHITE HOUSE WASHINGTON WASHINGTON 0 March 23, 1945 March 23, 1945, MEMORANDUM FOR THE PRESIDENT: KEMORANDUM FOR THE PRESIDENT The attached paper I an attaching for your approval a semorandum dealing with American policy for the treatment of Germany. It is my belief, and that of the others who attended yesterday's meeting with you, that it represents your views as brought out in our conversation. This memorandum was prepared jointly and has the approval of the State, Treasury and Var Departments. Creath Enclosure 6. entitled 'Summary of United States Initial Post Defeat Policy Relating to Germany", dated March 22, 1945, 18 approved and supercedes a memorandum entitled Draft Directive for Treatment of Germany dated March 10, 1945, approval of which is hereby withdrawn. IM PRECISION TRADE MARK MICROSTAT MICROFILM ROLL NO 198 197 23 March 1945 -2- Secret 0 Geranny's ruthless warfare and fanatical Nasi resistance The following 12 . suncery of t.s. solley releting_to have destroyed Geruan economy and made chaoe and suffering inevis- Germany In the initial post-defest period. As suc : will to able. The Gertiana canno: escape responsibility for what they have introduced into the European Advisery Commission, and to brought upon themselves. used 83 the basis for directives to be Issued to the v.s. Controls any be imposed upon the Geroan economy only as may CommandIn, General in jersary. be necessary (a) to carry out programs of industrial disarmanent and desilitarization, reparations, and of relief for liberated areas The authority of the Control Council to formulate policy as prescribed by appropriate higher authority and (b) to assure the with respect :- satters effecting interest as 00 shall in production and uminGenance of goods and services required to meet paramount, SLO : reed policiva shall be carried out in each the needs of the occurying forces and displaced persons in Geruany, one cesential to prevent starvation or such disease or civil unreat 2020 by the case communities. In the absence of such street $ RD MONIC enlanger the occurying forces. No action shall be taken, policies, and in matters exclusively affecting his - zone, the zone commander will exercise his authority in accordance with directives received from his own government. The administration of affairs in should to directed 1 in execution of the reparations program or otherwise, which would tend to support cosic living standards in Germany on a higher level that existing in any one of the neighboring United Nations. be desentralized, except that to the minimum extent required for All vecnosite and financial international transactions, including 2 10104 and importe, shall be controlled with the aim of preventing Geranny free developing a war potential and of achieving the other objectives named herein. The first charge on all approved exports carrying out too purposes set forth herein, the Control Council for Penerations or otherwise small be & sun necessary to pay for toward the decentralicatio of the political structure and the development of local resionability. The German economy shall also say peralt OF establish central control of (a) essential national public services such un railrouds, communications and power; (b) finance LLO foreign affairs, and (c) production and distribution of essential condition. There shall be equitable distribution of such consodities between the several zones. no extension of credit to Germany or Germans by any for ⑆ person or Government shall be permitted, except that the Control Council any in special emergencies grant such persiention. Encurrent reportions should not, by their form or amount, require the revabilitation or development of German heavy industry and TRADE MARK MICROSTAT Secret 199 should not foster the dependence of other countries upon the German economy. In the imposition and maintenance of economic controls, German authorities will to the fullent extent practicable be ordered to proclain and assume administration of such controls. Thus it should be brought house to the German people that this responsibility for the administration of such controls and for any breakdowns in those controls, will rest with themselves and their own authorities. The fast party and its affiliated and supervised organizations and all Mazi public institutions shall be dissolved and their revival prevented. Fast and militariatic activity or propaganda 0 in any form small be prevented. There shall be established a coordinated system of control over Jersan education designed completely to eliminate Mast and militariet doctrines and to make possible the development of democratic ideas. azi laws which provide the beats of the itler repine or which establish discriminations on (rounds of race, cread or molitien1 opinion, be abolished. All sembers of the azi party NILC have been more than noticel Sortici ants in its activities, and all other persons hostile to Allted nurseres will be re loved fre. public office and from positions of reavonsibility in private enterwrise. -4- Secret 200 War criminals and those who have participated in planning or carrying out Nazi enter rises involving or resulting in atrocities of ast crimes, shall be arreston, mount to trial nd punlabed. Nazl les ers and Influential Nami supporters and any that : cancerous to the occupation or its a Sectives, shall be arrested sau Interned. in suitable program for the restitution of property looted by Germana small be carried out prouptly. The German upsed forces, including the General Staff, and all para-millitary organizations, shall be rouptly cenabilized and disbanded in such to casher as permanently to prevent their revival or rear anization. The German EAT potential shall be destroyed. An part of the pro ran to attain this objective, all implements of war and all specialized facilities for the production of studments shall be seized or destroyed. The maintenance and production of all aircraft and implements of sar shall be prevented. OK+M PAPER ording show office smith T. grew Indully Harry 2 white Henry 14.France batters VH Fred Hinding COE William L. Clayton March 23, 1945 4:41 P.M. 202 201 G:(cont) representatives. I think this is the best way HMJr: Hello. we have of inspiring this payroll savings plan. You see, we are doing our work in the variou Mr. Gehles This is Fred Gehle. it puts self-management -- nazes self-management HMJr: Good Afternoon. 01 How are you today? HHJr: Fine. a: You've got no steamed up HMJr: Yes. directions now, but this ties it all together and avare.. HMJr: ... that this 18 the most important thing they have to 0: do. HMJr: and this 1. what I've done. 0: HMJr: I's arranging a dinner. We're putting forward this big dinner of cure oh the opening of the Big Drive, and making it . pay-roll savings 0: 0: HMJr: Yesh. And I vent to send out some telegrace tonight, inviting about 1800 of our big business men, our top business leaders to # dinner at the Waldorf on April 9. HMJr: Yes. 0: And I wondered if you could 20ml over and speak at our dinner. HMJr: don't know that I'll be here, Kr. dable. I couldn't promise. I tell you, Ted Gemble will What? It would put your blessing on our work. Well, I appreciate the compliment. and I'11 be telking with Ted in # fax minutes. Fine. 0: dinner. HMJr: Yeah. d: HMJr: 0 0: I think he's in town. Fine. Then I'll wist till I hear from you and Ted. You'll hear one way or the other by tomorrow noon. Fins. Mr. Secretary, That's plenty of time. Then I can get the viree out followed with letters. I've already engaged the Wallorf. We've not the room, and I know we can make it a great success. RMJr: 0: I be here in about 5 sinutes. Well, I sporsolate your thinking of me. Well, I --- I appreciate --- I appreciate that you've got no coing on this thing, and I vent to take a great success of it. This in one way of making a start. 01 0: HMJr: 0: Yes. And I'll telk to him. HMJr: Fine. 0: But you were telking about your business leaders. aren't there going to be any labor people there? Y.e. I'm going to bring - the whole thing is payroll and I's going to bring the labor Tenders, the business leaders, and the workers - the people who work in this thing for it - who are our Treasury HKJr: G: HMJr: 01 If you don't mind my using your delicatescen story. (Laughs). No. you can do anything with of you like if you promise to come over on the 9th. You know, I used it. What's that? I used 1: -- that delicatement story. Did you? -3HMJr: 203 It was in the Times. o HMJr: No. 0: RMJr: It was in the Times today. I'll have to -- I haven't and A chance to read 0: my paper, I've been no bury. HMJr: when it gets to delicatesses people buying bonds and speculating it's time to on11 n halt. (Laughs) Well, I'll have to tell by delicatesmen 0: ran that he has become famous. HMJr: 0: HMJr: You show 1: to him. I'll do that. What I did tell them and they didn't put it in - that he WRA # good 4=licetenden non, but he shouldn't speculate. (Laughs). Very good, indeed. 0: KMJr: 0: HMJr: All right. Well, all right. Now 10 the 9th isn't available to you, tell so. if you will, what day you with -you could make it. Bromuse it seans a lot to us to have you --- what I would like to any is, that you are going to have - that you would like this opportunity to meet these New York busineen leaders to discuss the forthooming Loan. I'm saying this is so vital that I vent you to come. Aren't you worried that I may get too rough with thea? 01 HMJr: 0: No. That is exactly what I want you to do. I see. I want you to do that, because you've got to help me do a job. 0: Right. Now its # job that we can do. I'm convinced that MA can do this, but what I want 1. the inspiration of you coming and telling that you've not to help Fred Gehle. 0 HMW: G: (Laughs) HMJr: Thank you very such. 0: Goodbye. HMJr: Yeah. I didn't mention your name, but I just said Right. Bye. 206 L 205 March 23, 1945 4:45 p.m. -2on reparations, why, I think that all the buffeting I have that this out and we withdraw it and change it was & taken since Quebec will be repaid many times. But the fact they have got completely thing very got satisfactory them to GROUP Present: Mr. D. W. Bell Mr. Gaston Mr. White thing. The whole thing is unbelievable, I mean, when people are working against us behind the scenes and everything else. We have got a good tough document with decentralization responsibility on the Germans. Mr. 0 Connell MR. GASTON: Yes. Mr. Blough Mr. Hass Mr. Peble E.M., JR: Let them stew in their own juice. Mr. C. S. Bell Mr. Luxford Mr. DuBois Mr. Coe Mr. Fussell Mr. Bartelt Mrs. Klotz H.M.JR: This isn't working, this is just a meeting to tell you how pleased I am with what has happened. MR. GASTON: Good. E.V.JR I don't know how many of you know, but very much in the room here, a directive was gotten out on the 10th of March which was completely at cross-purposes from everything that I stood for and I thought the President stood for with regard to Germany, and Mr. Stimson said he was tired and he wasn't going to do any more about the matter, so it fell entirely upon no. To make 8 long story short, we got the President to recall March 10, and he wholly accepted the one which was done here last night with White Glasser, and DuBois working on it, and this morning with will Clayton and people here with me, Coe, will Clayton and Matthews, and General Hilldring and McCloy, and the President accepted it, and I think that it is the first step. It is a directive to General Eisenhower; it's the first step toward a kind of peace which I think will last. There was enough talk about reparations, and if we get Treasury policy accepted MR. GASTON: Heinitialled this and agreed to recall the other one, did he? H.M.JR: Yes, but he said this supersedes the other. And now, what I started to say is, I would have had Dan Bell and Gaston in, but they kept it down themselves, I mean, to bringing one each. T brought two people in, and I aidn't think that you would mind. I asked Coe to report to you what happened, but I thought four Treasury people would be too many. 1 had two besides myself, while each of the others only had one besides himself. MR. GASTON: May we read that document sometime? H.M. JR: I told Coe to give you a full report. MR. GASTON: We haven't seen the document, and I would like very much to see it. H.M.JR will you make it available? MR. COE: Yes. H.M.JR: I told him to give you everything. I guess he just hasn't had time. MR. COE: I showed the document to Mr. Bell, but I didn't have it when I saw Mr. Gaston. MR. D. W. BELL: I SAN it. 208 207 O MRS. KLOTZ: I don't know how pleasant this is, but you wanted that cleared today. (Hands Secretary letter H.M.JR: will you do that? from Mr. Grew, dated March 21, 1945.) MR. COE: Yes. H.M.JR: I don't know what to do. I think the Under Secretary and three Assistant Secretaries had better stay behind, and I will ask them about this. H.M.JR: He had instructions to show you everything. I guess it was just circumstances. MR. COE: No, I was trying to arrange to see Nessrs. Bell and Gaston at the same time, and I dropped in to see Herbert ahead of time and talked to him. What else have I got? MRS. KLOTZ: You have got that thing that is folded. H.M.JF Well, you will get it. H.M.JR: You bring that to me tomorrow. You can't do this sort of thing begInning at twenty minutes of nine and all the motions that go into it and do anything else. MR. GASTON: Yes. Have you got anything that-- H.M.JR: But my instructions to Coe were-- MR. C. S. PELL: Everything I have will keep. MR. GASTON: It is entirely all right; I would just like to see it. H.M.JR: It is fully understood you were to get a full report, both of you. Isn't that right, Frank? MR. COE: That is right. H.M.JR But I wanted you to know what I as doing. I an bushed, and I am not particularly--Joe started to throw cold water, and I said, "Did you ever have a big Sunday dinner and did you take an aspirin afterwards? He said he would wait & couple of hours. So I want to enjoy my day. If anybody has anything pleasant--sa & matter of fact, if you have ever been to Pompeli--they have what they call a vomitory, a receptical outside. MR. WHITE: It is an old Kasan custon after 8 good banquet so they could eat all over again. MR. LUXFORD: You don't have a hangover, either. H.M.JR: I have been to Pompeli; I recommend it. Now, has anybody got anything pleasant? I an almost afraid of White. H.K. JR: I as here tomorrow and have no outside appoint- 1 ments. I an here all day. Any exceptions or-MR. C. S. BELL: I have one draft deferment. H.M.JR: Let's have it. I think it is . great day for the Treasury that we have been able to win out on this thing. See? And I, not to sound too starry-eyed, think it is going to be a great thing for our grandchildren, too. MR. C. S. RELL: This is typical of the type of cases you have been approving right along. (Secretary signs draft deferment request for Mr. James F. McMenamin, Jr.) MR. C. S. BELL: You might want to sign Bill Sherwood's letter promoting him from eight to nine thousand. (Secretary signs letter addressed to Kr. William T. Sherwood, dated March 23, 1945.) MR. C. S. BELL: I think that is warranted. O.K., sir. 210 209 -6- O MR. D. W. BELL: I think you just initial the Executive Order, don't you? H.M.JR: Dan? H.M. I am supposed to; that is what they have told me for the last eleven years. (Initials Executive Order MR. D. W. BELL: I have a call for the one and one-half percent Home Owners Loan bond that has to be out by April 1, and & letter to the Board. amending Executive Order No. 8553 of September 6, 1940.) Did you see the other one, Herbert, the March 10 one? H.K.JR: I read Sylvia Porter's weekly letter saying we were going to do this. MR. GASTON: No, I haven't seen it. MR. D. W. RELL: You did? H.M.JR: Show him the March 10 one, too. I wanted Bell and Mr. Gaston to have the whole story, please. H.M.JR: Yes, I read her letter and know what is going to happen. (Signs letter to Mr. JJ Francis Moore, dated call him MR. COE: Yes. March 23, 1945.) H.M.JR: Mr. White? MR. D. W. BELL: She didn't ask as about it; I don't know now she got it. H.M.JR: That is the call. (Signs memo entitled "Call MR. WHITE: There are two men we are hoping you will up.thank One him is Beardsley Ruml. You first. ought call on up and for that CED report Hetowas the telephone withme for at least three hours. $ for Redemption of One and One-half Percent Series K Bonds.") H.M.JR: I should thank him for that? She got up to leave, and left little note behind just to let me KOOK that she knows, "I hope you have a good vacation, Mr. Secretary." (Laughter) VR. WHITE: No, thank him for the objectives, his careful study of the situation and his constructive MR. D. W. BELL: She keeps track of you. recommendation. H.M.J She knew everything but the place. NR. LUXFORD: Thank him for the testimony he is going to give us. (Laughter) MR. D. W. BELL: This is an Executive Order which transfers Seaboard Airline securities to Judge Vinson, and MR. GASTON: Now you understand. he has agreed to it, or has agreed to--that Is . letter to MR. LUXFORD: We might 88 well get to the point here. him that you wanted. H.M.JR: He sounds like a horse. (Secretary signs letter to Judge Vinson to be dated March 24, 1945.) MR. WHITE: Then, Bill Green is sore, and we would like you to call him up because he said we don't need his help if we have CIO's help. He thinks you called up MR. D. W. BELL: And there is a letter to the President. Attached to it is the Executive Order. (Secretary signs letter to the President, to be dated March 24, 1945.) 0 211 -7- C 212 -8- O Murray and asked him to make the statement. But in any MR. WHITE: This is nothing new,but Senator Wagner case, we need their statement. I know you don't like to do this, but if you could give him a ring, it would help us. We are having a little difficulty there. is sensitive that he hasn't been asked by us to speak on the radio, but we said we had a spot for him and he said, "Why are you letting me know so late?' We said, "We just got that spot. . Feitus said the real reason is that he is not a good speaker on the radio, so I H.M.JR: Have you used Lawrence Houghteling on this? told him. MR. WHITE: No. MR. LUXFORD: Radio halitosis. MR. LUXFORD: He has been working on AF of L for & long time. E.M.JR: Did you hear what he said, "Radio halitosis?" MR. WHITE: On this? (Laughter) MR. LUXFORD: On Bretton Woods. MR. WHITE: He said, "You seem to find plenty of spots for Secretary Morgenthau. H.M.JR: Oh, Green personally? I said, "That is different. Besides," I said, "We MR. LUXFORD: Some of the men that work under Green. 8 He told me about his problems. MR. WHITE: Nobody but you can talk to Bill Green and get any help in this situation, Mr. Secretary. Those are the two calls. H.M. JR: Whenever White is overtired, he treats me with applesauce, and that's an indication that he is overtired. I would much rather have him fresh and sparkling and then I don't get the applesauce, but I'll call him. Now, do you want me to send some clippings up, too? MR. LUXFORD: Sure, sure, the clippings. (Laughter) H.M. JR: Is there anything else, Harry? MR. WHITE: No, that's all. H.M.JR: No clippings? MR. LUXFORD: It wouldn't hurt to send them, you might as well. have the Secretary got a wonderful was going spot out in there, San Francisco. but would We you don't be glad know if $ to go?" H.M.JR: I won't call lagner; he is always hurt. MRS. KLOTZ: He is an old maid. MR. WHITE: I won't tell you the reply, but we are very eager to have somebody important go there. We can't turn them down, and we are urging Joe to go out before the Bar Association: the Chief Justice out there will be present. Joe can fly both ways, I hope. That is on the 10th or 12th. Letting him go will be very good. H.M.JR: I think you will find that Joe would go. MR. O'CONNELL: I will be glad to go. I only heard about it an hour or two ago, but it is a group of lawyers, the Bar Association people out there, and I could speak on Bretton Woods. H.M. JR: I think it would be fine. MR. O'CONNELL: I would like to go. 214 213 -9- 10 - 0 H.M.JF That is right. H.M.JR: All right. MR. LUXFORD: Americans United will take care of that. MR. WHITE: We can give him a couple more, maybe, on the way over and back. H.M.JR: They are very volatile; don't pay any attention to them. Tomorrow, they think, will be good. You just do what I asked you to. MR. O'CONNELL: Stop off at Kansas City and-H.M.JR: Luxford? Anything else? MR. LUXFORD: I have nothing, sir. MR. FUSSELL: No. MR. BARTELT: Er. Secretary, I am happy to report that the Postmaster General has instituted pay roll savings in first and second-class post offices. H.M.JR: No clippings. MR. LUXFORD: Not so far. MR. D. W. FELL: After four years. H.M. JR: No parings? DuBois? MR. WHITE: Did you see the slogan in one of the editorials, "Business is for Bretton Woods because Bretton Woods is for Business"? Did you see that one? MR. GASTON: Postmaster Cohan in Kinneapolis told me they just got their orders to put it in there after he had : been working for it so many years. C H.M.JR: Coe? H.M.JR: I have heard it; I don't know where it is. MR. COE: The French and British were in yesterday and wanted you to know that they have signed a complete financial agreement clearing up all previous ones. They have given us copies that we are analyzing. MR. WHITE: In one of the newspapers. H.K. JR: Also, what is the thing, "Eventually why not now?' That is Pillsbury. H.M.JR: Talking on that, the thing you sent me, Hass is very interesting, and I think that if Fussell would pass it on, maybe, to F-L, all this criticism-not FEA, but Karvin MR. WHITE: I remember that. H.M. JR: Isn't that it? Jones-- MR. GASTON: General Mills, Washburn Crosby. MR. HAAS: That is where I got it. S.M.JR: DuBois? H.M.JR: Then never mind, but we gave one hundred million tons of meat to the Mussian Army. The Russian Army said they couldn't stage their offensive unless they could get the meat. They got the meat, and then the offensive came afterwards; MR. DuBOIS: I have nothing. H.M.JR: Fussell, you have gotten all straightened and with all these people beefing in this country, I think it out; you just carry out my order. I told them that-- MR. FUSSELL: We won't send out Minnesota, is that right, Mr. Secretary? would be helpful if-- O March 23, 1945 5:06 P. 4. 215 216 0 11 - 0 HMJr: MR. WHITE: To should have given them two hundred Mr. Beardsley million tons and they would have been in Berlin. Rum Hello. H.M.JR: All right, Eddie, that is all for you? Frank, that's all for you? John Peble? EMJr: R: HMJr: MR. PEHLE: You remember, you approved-- Henry Morgenthau, Jr. How are you? Fine, thank you. I Just wented to tell you how delighted I MAE with the CED report. H.M.JR The put all that stuff in the report that R: you more a great any and Olrich was a SOR? HWJ MR. PEHLE: That is part of Olrich's publicity staff. R: H.M.JH: You won't get any Munsingwear. HKJr: VR. PEALE: I know it. You r emember, you agreed to the establishment of R: a regional office in Philadelphia. Last week we got . joint letter from Guffey and Myers ardently recommending their man for the job. The guy looks rather weak on paper, anyhow. We have worked out here with Charlie and Herbert to move the Boston man, Tompkins, to Philadelphia, and move here from Nack's to run Boston. Guffey HMJr: because-- R: HXJr: R1 These boys want Hannegan's help, and Hannegan wants us all to go to the Jefferson Day Dinner, and here he wants this. You had better look at that (hands letter to Mr. Gaston). Yell, I'm delighted. And, I know how hard you worked for it, and I Just want to 1st you know that I personally aporecist what you have done. Well, : capit hear you, Mr. Secretary, very well. Can you hear net I's over the Federal Reserve Line. Maybe you'v got rosebody there. I' through switchboard in H.M.JR: Go ahead. This is right on that subject, a protest from Hennegan (indicating letter from Mr. Hannegan dated March 21, 1945). I think that it 18 the first constructive thing the Federal Reserve. on paper so I don't think we will be--Brien McMahon was all excited Ch, Its delighted. That's very nice. that have come out from . business group. We have more of it coming to you. a and man Myers won't like that, shop but up it is strong enough Hello. Can you hear =7 Yes. %ell, I wanted you to know this that that job VSB Very definitely . group job. EMJr: A what? R: A group job. FMJr: A group Job R: (Secretary holds a telephone conversation with Yes, there were about five of us that worked very hard on it. No particular person, I think, did the whole thing. Beardsley Rum1.) HMJr: Well, I hear differently. I hear that you -- I's not trying to throw b pun -- but threw your weight around. F-1 218 217 Well, what I 410 - I sort of strabbled the R: HMJr: -120 Yeah. MR. PERLE: we are all together on it; I just want : collected the material, etc. But it WELE = Tory R: you to know. (incere, VIFT earnest 365 by about CAVA follows. the others All along beautifully, HMJr: H.M.J.: Say, we want help from Hannegan and he wants us to take tickets for the Jefferson Day Dinner on April 13th. Well. T just wanted to 1st you have that tots been nest helpful, and : hope you prople will it up. Ye got -- the GASTON That's a middle plug. You know, Helph Flanders STAS chairsen : the this- R: I.M.JR: And no want him to get us two votes. I don't know what they are worth. mitten. HWJ.: Va gat -- R: Have you tolked to Relph MINJ: I haven't yet. MR. GASTON: I have written to hannegan and these Senators. lie can't make those rerional director jobs local patronage jobs. Se can't do it. 11. PEALE: I think it takes--I.r. Secretary, the Treasury has to be pretty tough on this because there is word around, as Berbert says, that Procurement is a patronage thing and it is roing to be hard enough to keep it clean as it is. If we once weaken on that, we are lost. I think he YOUI appreciate with such . cell from you, and I think he would = Very stac to Holp purh R: 1: *long. **11, I'll onli Relps Flanders tomorrow R: He var chairsna of the committee. HMJ: I know. R: D H.M.JR: Vavbe we can get # good effect on the Hill if we made it patronage. And 1: you 5.01 you cause is that, : think it kool by greatly = tries. I'1' coll his :- the morning. R: Thank you, sim. **Jr: Ever to with obliged. R: Goodbye. MR. PELLE: Then you better put somebody else in charge. H.M.JH: Well, you know how to play the game. LUXFORD: How did you get that good publicity? (Laughter) line WHITE: That was only a ninor job. H.M.JH: Don't you get high hat with me young fellow; anybody can get that in under Olrich and yourself. RES. KLOT%: They are mean, John. 0 F-3 Y-2 219 14 13- O 0 E.M.JR: I haven't seen any memos. I have been fighting the battle of post-mar peace. MR. FEBLE: We also got a kick out of Brien Mellahon. We put Mr. Fox in because Mr. Fox has lived in Greenwich since last August, and me should have talked to Mr. Mallahon. MR. BLOUGH: Well, the only thing that worries me is that Taft and Vandemberg here so very nice. That, I think, is the cause or real alarm. H.M.JR: The fellows in the bleachers are with no. H.N.JRI You better not say that. They will come right after you. Get them for Bretton Woods. You have to be very careful with this around. MRS. KLOTZ: Do se have to answer that letter acknowledging its H.M.JRI Could I answer that tomorrow before I leave, Green in out of town and 1 said to try to reach him saying that Mr. Penle doesn't play in politics but he would be glad to take care of Joe Guffey? But boys, you tomorrow. better answer It tomorrow. BLOUGH: in were very well received. It was keet entirely confidential, but we were very well received. As said, I an just " blt disturbed that Vandenberg and Taft seemed pleased. It is probably the last report they will be pleased at, but It happens on this one me agreed 100 CASTON: It is for your signature, isn't it? MR. PKELE: It will be all over tonorrow If the press release goes out. H.M.JRI George, 1 am going to take another look at finances tomorrow, and you better have another look at the one and one-half percent ones, too. MR. HAAS: lie look at them each day. with them. 0 H.M.Ju Is everything else all right? MR. FLORGE: Everything else is pretty much under control, yes. H.M.JH: This idea of selling them about par-- 41. O'CONNELL: You not n letter the other day from Senator Pepper Invitine you to testify before the Sub- MR. HAAS: It is better now that the parket has gone Committee of which be is Chairman. He asked the to speak to you by Saturday, or else. H.M.JH: I make a little sneech on no free riding (Kr. O'Connell hands Secretary letter from Senator Pepper to the Secretary dated March 22, 1945.) up. and up roes the market. MR. HAAS: Five or nix thirty-seconds. H.M. Jh: Koy, henry Wallace think rou are wonderful. MR. BLOUGH: I hope he will keep on thinking so. H.M.JR: What happened to our recommendations on Tuesday? 10. BLOUGH: Oh, you oidn't see my memo? ( 220 This is only Friday. I'm going over all arpointments tonorrow. I have liar bonds, Bretton woods, and you make . note lirs. %lots. USS. KIOTE: Let me take it. 100 0* Unless you are particularly anxious to testify, I have written a letter to which Harry and Laxford have spreed saying that you mould like to testify, but you can't, and surresting that Harry White or somebody else mould to Interested in testifying. 9-4 F-5 222 - 16 221 15 C E.M.JR: That could be very helpful. MR. CONNELL: That is a good Committee to appear before, but If you don't want to go,White can go. E.M.JR: Thank you. They are asking me to talk on the Seventh war Loan about what I am cold to do,and I an so worried that Luxford may worry about ny pushing Congressmen around that I have to be very careful. All right? MR. 0*COFFEED I have nothing else. H.M.J.R. Nov that we have 6 real story Ir the one on law enforcement the have to make good. (Laughter) H.M.TH: Why can't the ret those, Herbert--feed that out to the press, just as result of the story--whip It up? MR. GASTOM This story you speak about--the story itself gets some results. We can needle them again after awhile. MR. O'CONNELL: I would walt . little while. Give us a few days. h.M.JH: The air last night was just crowded with this stuff. Sould you mind tenorrow--I may not agree with these people--I may want to -I've some of this to the newsparer men tomorrow If I can get there before Elmer Trey does. 10. CASTON: I 9.23 not so sure. MR. D.W. RELL: There were a lot of inquiries today at the Federal Reserve Bank about exchanging high denomination bills to lover denomination tills. Really$ 101. D.N. FELL: Yes, 0 lot of them. Les sound is a little sorried about it and said he would watch it for 3 couple of days and let me know. e found one man in unstate Net York sho--1 don't know just hot be put it-indicated that he found a million dollars worth of old certificates his holdings and EAS sort o: surprised that he had them. H.M.JRI AS a result of that? 10h. D.N. BELL: he began to look them over,and another fellow case in with four hundred thousand dollars In bills to # New Jersey bank and wanted to know If they could exchange them, and they immediately not in touch with the Federal and seld they could exchange them but they would have to take his name. Another TUND and sold he had fifty one thousand dollar bills, I think, and wanted to know if they would exchange them. They said, "Yes, but you will have to give us your name and address, and he said, "I'll be bank this afternoon. Whether he cane back, I don't know. 15. WHITE: If they in and exchange those bills, I don't think there is any benefit unless you get their names. Can't you -et their names? the D.N. HELL: we are getting their names. Mr. GASTON: it is all, set up. We do get their names. MR. WHITE: They will be turned over to the Income Tax Bureau. UK. D.W. PELL: I MIT going to call sone of the other Federal reserve Banks and see if they can't do the same thing. be have 1 reporting system in New York.When someone deposits a large amount of currency they get his name. VR. WHITE: I notice you have a lot of good old books here--valuable reading. H.M. Now we are up to you, Mr. Caston. MR. CASTON: I don't believe there is anything to report, sir. 2-7 F-6 224 223 17 - 18 O 0 H.M. JR: I don't know whether I reported about my trip out West, but I want you to know Mr. Gaston has three of the finest grandchildren I have ever seen. I have a granddaughter, but he has three boys. They are something! 1R. GASTON: Now you are really getting down to matters of importance. H.M.JR: Well, anyway, it's a big thing for all of us. Let's get serious for 8 minute. I have never been under such pressure in my life to give way on principles, and I didn't, and the fact that we have a good team, they just can't break the team. 40 stand for something worthwhile. It's one of the few rewards you get. After all, We were really fighting for something important in the conference here this morning. It was one of the most important conferences that I have ever participated in, and it is very encouraging that are had the President to back us up. That's the thing. They tried to get him to C change, and they couldn' t--the State Department crowd. Sooner or later the President just has to clean his house, I mean, the vicious croad over there, and people for cartels, for appeasement, and for building up Europe, for doing business with these people--and it is just a vicious crowd. MR. LUXFORD: Hear! Hear! H.M. JR: And they are for Herbert Hoover, and Herbert Hoover got us in this mess, and they are Fascists at heart. The Argentine thing is a mess. Here NO are more or less telling them, We will take care of you if you stop buying your food from the Argentine, and take the food away from the British. It's just a vicious crowd, and sooner or later they have to be rooted out. It was that crowd which fought us with no rules. It's terribly hard, and if when these periods are on, if I am ever short with any of you, well, you will just have to be a little charitable, because you can't be fighting a thing like this will all your soul and mind and body, and at the same time always be one hundred percent pleasant. I try to be, but I don't know whether I have the habit, but anyway, it has been worth-while, and I think now we are on our way. lie have won out on our fight on crimes, I think, Joe, and criminals. Don't you think so? MR. DuBOIS: I don't know. H.M.JR: This thing--this document I think sets the tone. I think we are on our way on peparations, and while we crook are we not get always there invited uninvited. to all So, the I moetings, just want by to hook say I or am happy and I like my official family. 225 March 23, 1945 5:15 p.m. 226 O SAN FRANCISCO CONFERENCE -2admitting Treasury but they won't admit it on the Cabinet level. The nominal head of the Treasury Delegation is to be Assistant Secretary or Under Secretary. That's what they are saying, and he can take people with him. Present: Mr. D. W. Bell Mr. Gaston Mr. White Mr. Bartelt H.M.JR: This starts April 25th. I suppose they Mrs. Klots go out before then. MR. WHITE: It is an important conference, one of the most important world conferences. H.M.JR: Harry, you may not know it, but you are Assistant Secretary. MR. GASTON: Either Dan or Harry should go, I should think, with some technical people. MR. WHITE: I am sware of the fact. It weighs 0 very heavily on my mind. MR. BELL: Harry has been attending the conferences. H.M.JRI This is & letter from Mr. Grew. (Referring to letter from Mr. Grew, as Acting Secretary of State, to Secretary, dated March 21, 1945.) It says, Consideration is now being given to the selection of technical advisers to the Delegation of the San Francisco conference. In this connection I should appreciate it if you will be so good as to nominate at your earliest convenience an official of your Department, within the range of Assistant Secretary or Under Secretary, for consideration as a technical adviser. Sincerely yours-- MR. WHITE: It's international affairs, I should think. Now, I am just stumped. They want everybody but me, and I as frankly stumped. I would like to have some suggestions. MRS. KLOTE: How do you know they don't want you? H.M.JR: It is very obvious, but I couldn't go anyway. I want to point out that it said, ..selection of a technical adviser to the Delegation, and closes "Assistant Secretary or Under Secretary for consideraup, tion as a technical adviser. In other words, they want a technical adviser. MR. GASTON: They want 8 Treasury staff. They are 0 0 H.M.JR: Can you go, Harry? MR. WHITE: I can go and come, depending on what technical staff will stay there. 1 would very much like to go, and how long I could stay there could be determined upon what is happening here, but I would take & couple of people with me and leave them there. I could fly back. H.M.JR: I think you are the person to go, but I delegated you to look after Bretton Woods for mo. MR. WHITE: I think I can do both. Bretton Woods is going along all right, and this is and can be a terribly Important conference, because this is in effect a peace conference, and there are & lot of economic matters coming up, a lot of international matters coming up, and there are & lot of things I would like to do for Bretton Woods there because that will be before the final Bretton Woods action here, and it would be an excellent opportunity to round up a lot of the various Nations and get them straightened out on Bretton Woods again. I think it would be very useful to us, and I would like to take, and I am sure they will permit me to take, a couple of people with me, and the staff would carry on and play a role In various parts of the thing. RPRECISION MARK MICROSTAT 228 227 O -3. 0 -4- I think we can play a very helpful role there as we have in the past, by merely bringing good people there and helping them solve problems that are before the H.M.JR: Twenty, twenty-nine. conference. MR. GASTON: Connecticut. H.M.JR: I agree with you. My only doubt is your physical limits. H.M.JR: Thank you all. MR. WHITE: Well, I would enjoy going there. H.M.. JR: You would? MR. WHITE: Yes, I would. H.M.. JR: Well, it is technical and it is your field. I don't think there is any question about it. Supposing you prepare an answer for my signature, and I think I will include in that that I an designating Mr. White, but he would like to take several assistants wit th him. 0 t MR. WHITE: That would work much better that way. MR. GASTON: I think they mean that. (The Secretary hands Mr. Grew's letter to Mr. White.) MR. WHITE: The Treasury in England is playing a very important role in this. H.M.JR: Okay. I hope some day your--what, you go to San Francisco, Joe DuBois goes to Moscow, and 1 go to Connecticut and Wyoming Avenue? Good night! MR. WHITE: We have a conference fixed up for you, but you don't know it. H.M.JR: Don't send me to the house of political refuge on the banks of the Chungking River. MR. GASTON: Is your address now Connecticut and Wyoming Avenue? TRADE ROLL NO MARK 230 -2- 229 March 23, 1945 additional food supplies. It was explained that Mr. O'Connor was very sympathetic to the suggestion but that his staff had presented many obstacles. General O'Dwyer also stated that a sesorandum on this matter had been sent, at the suggestion of Boettiger. Secretary Morgentheu stated that he would be glad to give the General any assistance might be needed in this matter. General O'Dwyer then raised the satter which be had disounned with Secretary Morgenthau the week before, namely, his short vacation or resigning. The Secretary the matterPresident with the who stated had taking that he R had discussed requested that General O'Dwyer plan to stay on as Executive Director on a month to month basis. General O'Dwyer stated that this was satisfactory to him. MEMORANDUM FOR THE SECRETARY'S FILES: David Niles, to Mrs. that General O'Dwyer and Xine Hodel net with Secretary Norgenthau March 22 at 5:30 p.m. With respect to the Board's program in Switzerland and the General's proposed trip to Switzerland, General O'Dwyer explained that for reasons of health it would be impossiole for him to SAKE the trip at this time. However, he informed the Secretary that Mr. Katzki had left for London that day en route to Paris; that James Mann, the Board' representstive in London, had been ordered to Paris; and that Mr. beMcClelland with whom he talked on the telephone the day fore, was also en route to Paris. The War Department has made appropriate arrangements for all three War Refugee Board Hourse Hodel representatives to discuss with 0-4 in Paris the details in- volved in the Board's acquiring transportation equipment from United States army stocks. C General O'Dwyer explained that in addition to our efforts to obtain aray equipment, Mr. McClelland 16 continuing his efforts to obtain local equipment in Switzerland and Mr. Currie, with whom General O'Dwyer conferred the day before, has agreed to approach the Swiss Minister in Washington on the question of making Swiss Government trucks available to that the Red Cross Currie will Kr. stated It for War Refugee Board work. VAN do this in connection with his promise to obtain 50,000 tons of coal for the Swiss. The General then explained that if trucks got moving, it conceivable that the stock of Wer Refugee Board parcela Switzerland may be exhausted shortly and that efforts must therefore be made to obtain additional food supplies in Switzerland. It was explained that the War Refugee Board now has in is 65,000 packages in Switzerland and 222,000 in Goteberg, Sweden, and Lubeck, Germany. Since the Board program to evacuate de- tainees to Switzerland depends upon the delivery of food into occupied territory, it is desirable that we have adequate supplies in Switzerland 80 that the program, once under way. will not have to stop because of insufficient food supplies. For this reason, General O'Dwyer exclained that he had diecussed with Basil O'Connor the possibility of having some of the large stock of orisoner of war packages now in Switzerland allocated to the War Refugee Board, if and when we night need 0 231 232 March 23, 1945 ASSISTANT SECRETARY OF THE TREASURY 0 my dear m President: My dear Mr. President: Since you are going away for . time and events are moving fast, I should like your permission before you go to get some facts on the German economy ready for publication in book form when Germany falls. The people of this country are going to need information of this nature If they are to understand our policy. With your approval, I want to get to work on this at once. It will take several months to get the material ready. I hope you will have a good rest at Warn Springs. Since ym are going away in a time and executs are mining part, of ohmeld like your before you 80 to get enne parts m The German economy In Austination ready in book from for I when Germany falls. With warnest regards, Sincerely yours, The health of this eventing are going to need information this nature 1 They are of understand in Julia with you affirmal 1. The President, The White House. PRECISION TRADE MARK MICROSTAT MICROFILM ROLL NO O ases .88 doral like want Z get to work in () This at once It will take senial months a get the .all tast of material ready 5am mult it TOI cases saley 078 HOT 40012 doluntaries THOT will hinods ,Jun1 anivas 978 number add no stoal agon 295 of os NOT stoled gods (TO) food at colfablides 10) thear .Hffs? quarter 9 who you will hour a and sen - at warm bean of salou STA VITAMOD ald to algong and? of are gard 11 mutan whit 10 meltimotal golfog two banda Shings as show of Tax of Jam 1 THOY dill 195 of adiann Issavan mia III if somo to airt Inland not with warmat regards, mail to tast boo3 a avail film mor aqud 1 Faithfully difficill WITHOUT ad? star td O PRECISION TRADE MARE MICROFILM MICROSTATE ROLL 233 0 My dear Mr. President: Since you are going away, I would like to suggest that it would be wise if I were to get the facts on the from the Desk of from the Desk of German economy ready in book form for publication when Germany falls. The people of this country are going 0 to need this knowledge in order to understand our policy. ween in Pres With your approval, I will get this material ready. It 234 MRS FRANKLIN D ROOSEVELT Since 7th are going will take several months. : Hoping that you will have a good rest at Warn Springs and with best regards, I remain Yours sincerely, away I would who to suggest To wise if Irve the get the facts in Semmary economy ricdy in hole form for publication when the germany here fales The 235 MRS FRANKLIN D. ROOSEVELT all To and this kindedge in udu to understand our folicies with your this officer Imaterial will get allready can It estabe several month Hoting you law a things 236 Capies to Bill+ THE WHITE HOUSE white WASHINGTON March 23, 1945 MEMORANDUM FOR THE SECRETARY OF TREASURY I - enclosing for your information a photostatic copy of . letter which I have sent to the Secretary of State in regard to the supervision by the State Department of the activities of civilian economic representatives in foreign countries of all civilian agencies of the government. I would appreciate your cooperating with the Secretary of State in working out the arrangements in detail. Enclosure: 70% Letter to the Secretary of State my 3/26/45 answer necessary PRECISION TRADE MARK MICROFILM MICROSTAT ROLL NO 237 THE WHITE HOUSE WASHINGTON March 20, 1945 My dear Mr. Secretary: Much good work has already been done to assure that the economic personnel of the various government agencies who are stationed abroad work together at a team, but I should like to see this trend carried further. Effective foreign operation denanda centralisation in each country of responsibility for the activities of all of our civilian economic represent tatives. I realize that it is not often feasible for the chief of mission to take upon himself personally the task of supervising the activities of the economic personnel within his area, and that, in number of cases, the chiefs of mission have delegated their authority in such matters to principal economic offi- I care. I would like to see the application of this principle extended to the end that the activities abroad of economic personnel of all civilian agencies be supervised in each country by an economic counsellor or, where appropriate, an economic minister of course on the payroll of the Department of State. I shall give you all necessary assistance in the realisation of this goal which is of great importance in the effective conduct of our foreign economic relations. Very sincerely yours, Marunt The Honorable Edward R. Stattinius, Jr. Secretary of State a 239 238 23 March 1945 The following is a summary of U.S. policy relating to Germany in the initial post-defeat period. As such it will be introduced into the European Advisory Commission, and will be used as the basis for directives to be issued to the U.S. Commanding General in Germany. 0 Controls may be imposed upon the German economy only as may be necessary (a) to carry out programs of industrial disarnament and demilitarization, reparations, and of relief for liberated areas as prescribed by appropriate higher authority and (b) to assure theproduction and maintenance of goods and services required to meet the needs of the occupying forces and displaced The authority of the Control Council to formulate policy with respect to matters affecting Germany as A whole shall be paramount, and its agreed policies shall be carried out in each sone by the zone commander. In the absence of such agreed persons in Germany, and essential to prevent starvation or such disease or civil unrest as would endanger the occupying forces. No action shall be taken, in execution of the reparations program or otherwise, which would tend to support basic living standards in Germany on a higher level than that existing in any one of policies, and in matters exclusively affecting his own sons, the sone commander will exercise his authority in accordance with the neighboring United Nations. All economic and financial directives received from his own government. international transactions, including exports and imports, shall The administration of affairs in Germany should be directed toward the decentralization of the political structure and the development of local responsibility. The Ornan economy shall also be decentralised, except that to the minimum extent required for be controlled with the sim of preventing Germany from developing a war potential and of achieving the other objectives named herein. The first charge on all exports for reparations or otherwise shall be a sun necessary to pay for imports. No extension of credit carrying out the purposes set forth herein, the Control Council to Germany or Germans by any foreign person or Government shall may permit or establish central control of (a) essential be permitted, except that the Control Council may in special national public services such as railrouds, communications and emergencies grant such permission. Recurrent reparations should power; (b) finance and foreign affairs, and (e) production and not, by their form or amount, require the rehabilitation or distribution of essential commodities. There shall be equitable development of German heavy industry and should not foster the distribution of such commodities between the several zones. dependence of other countries upon the Gernan economy. 241 240 .4- 0 0 War criminals and those who have participated in planning In the imposition and maintenance of economic controls, or carrying out Nazi enterprises involving or resulting in strocities or WGF crimes, shall be arrested, brought to trial German authorities will to the fullest extent practicable be ordered to proclaim and assume administration of such controls. and punished. Nami leaders and influential Nasi supporters and any Thus it should be brought home to the German people that the responsibility for the administration of such controls and for other persons dangerous to the occupation or its objectives, shall any breakdowns in those controls, will rest with themselves and their own authorities. be arrested and interned. A suitable program for the restitution of property looted by Germans shall be carried out promptly. The Nazi party and its affiliated and supervised organizations The German arned forces, including the General Staff, and and all Nasi public institutions shall be dissolved and their all para-military organizations, shall be promptly demobilized revival prevented. Nasi and militaristic activity or propaganda 0 in any form shall be prevented. There shall be established a coordinated system of control over German education designed completely to eliminate Nami and and disbanded in such a manner as perumently to prevent their revival or reorganization. The German war potential shall be destroyed. As part of militarist doctrines and to make possible the development of the program to attain this objective, all implements of war democratic ideas. and all specialized facilities for the production of arnaments Nami laws which provide the basis of the Hitler regine a which establish discriminations on grounds of race, creed or political opinion, shall be abolished. All members of the Nagi party who have been more than nominal participants in its activities, and all other persons hostile to Allied purposes will be removed from public office and from positions of responsil bility in private enterprise. shall be seized or destroyed. The maintenance and production of all aircraft and implements of war shall be prevented. RECISION TRADE MARE MICROSTATA MICROFILM ROLL NO. 242 Office Treasury of the Under Department Secretary Date: 3/23 for The Sinceraly From: Hurry up job. of you wont mon detail more time is necessary. in last than Treasury had some some troubles asm this one. DWB 244 243 THE UNDER SECRETARY or THE TREASURY 0 WASHINGTON PEACE COMMISSION COTOBER, 1918 MAR 23 06 A joint memorandum dated October 24, 1918, addressed to the Secretary, initialed by Mr. R. C. Leffingwell, Mr. Albert Bathbone, TO THE SECURITARY Mr. Albert Stranes and Mr. George O. May, referred to a nemorandum Reference is made to your nemorandum of March 18th concerning addressed to the President suggesting the appointment of a represen- the question of reparations - who handled it during the last WAT tative of the Treasury at the Peace Conference. The joint memorandus and what part did the Treasury play is 11. stated - In view of the financial contacts between the United States and *It is clear that a permanent peace and the future foreign governments during and after the First World War which grow of this country are both a on the wisdom with which the problems bases of the fiscal out of our loans to foreign governments, the Treasury had an important are laid down that this with by one who enjoys the intimate con- role during the WAT and at the Peace Conference. prosperity are dependent therefore belligerents solved essential and which the phase for is of the policies financial the large future. negotiations manner of It the is A summary of the principal operations of the Treasury in this President who possesses fidence should be ofanddealt the unquestioned standing among his colleagues and among the represente field is as follows: INTER-ALLIED COUNCIL - JULY, 1917 The Secretary of the Treasury submitted to the President on July 10, 1917. his proposal in the form of a letter which he intended writing to each of the governments concerned providing for the prompt creation of an Inter-Allied Council on War Purchases and Finance to tives of the other nations." 0 Apparently as an outgrowth of these internal Treasury discussions Secretary McAdoo addressed . letter to President Wilson on October 26, 1918, calling his attention to some of the financial phases of the Peace problem and the importance of insuring adequate presentation of the views of the United States on these questions at the Peace sit in London or Paris for the purpose of determining their respective Conference. This letter was distated by Mr. Albert Rathbone and needs and priorities is the markets of the United States and of making initialed by Russell c. Leffingwell, a copy of which is attached. recommendations to the Secretary of the Treasury as to the amount of loans that shall be sade from time to time by the United States. This Council was eventually created and Mr. Grosby, who was then an Assistant Secretary of the Treasury, was appointed by the Secretary of the Is this connection, the following statements were contained is a cable from Secretary McAdoo to Mr. Oroshy is Leadon, dated December 5. 1918: "First: Convinced that peace conference will deal of the President Treasury as Special Finance Commissioner in Europe and in that capacity acted as President of the Council. be determined by past loans or the date of our with questions or fourteen future will points conferees their and that maturity. regarding no This is apparent as Treasury has not been given official 246 245 -4- -3- While the President was attending the Peace Conference in Paris *representation at the conference and ay opinion has not been asked about these financial questions as undoubtedly Secretary Glass became the new Secretary of the Treasury. President pected to discuss such questions. Wilson cabled Secretary Glass on December 23, 1918, statings would have been the case if American representatives OF "It will be very serviceable to have someone *Seconds All questions regarding (a) the amount which the United States shall loan Allied Governments within the limits approved by the President and (b) is whom you have the utmost confidence sent over here to represent you in these important matters. the form of the obligations and the date of their maturity so far as not fixed by statute are matters In response to this cable Secretary Glass recommended Mr. Norman E. which Congress has delegated to the Secretary of the Treasury and they must be determined by him. These questions should not, even if technically possible do sc. be settled at the peace table. The peace conference will certainly not wish to interfere with Davis (then representing the Treasury in Europe). The President to notified Mr. Davis "That you hold yourself is readiness to supply such general economic and financial advice as may wish from time to time during the Peace Conference. authorities expressly delegated by Congress. *Third: is Treasury is not to be officially represented at Peace Conference you will appreciate that 11 must not be unofficially represented there. *Yourths Secretary of the Treasury is prepared whenever the Allied Governments desire, to discuss with then in Washington and to determine all questions regarding conversion and saturities of our foreign debt. Congress has delegated to his settlement of these questions and all discussions is regard to these matters should be confined to Washington. *Fifth: I an convinced that time is rapidly approaching if indeed is has not already been reached when all financial discussions should be conducted is Washington by the Secretary of the Treasury and there fore think satters should be shaped looking to as early a discontinuance of the Inter-Ally Finance Council and the return home of your organisation as can be accom- plished with dignity and a due regard to the feelings of the Allied Governments. I the I the "Sixth: If you should deem it desirable to visit Washington in the immediate future to discuss the entire situation before terminating the existence of your I should entirely approve doing new Secretary of such discussion of a In addition the President designated Mr. Davis to represent the United States is connection with the Armistice discussion at Spa. 0 At about the same time Secretary Glass cabled President Vilson regarding a more complete Treasury representation is Europe and asked his approval of a Treasury Commission composed of Mr. Albert Streuse as Chairman and Mr. Norman H. Davis and Mr. T. V. Lamons. The President approved. While they were working for the President they were available to express the Treasury viewpoint on all financial (and apparently economic) satters which aross at the Peace Conference. In the files of our activities during this period ve find a letter addressed to Assistant Secretary of the Treasury Bathbone by Norman E. Davis from Paris on February 26, 1919. enclosing a confidential bulletin issued by the American Commission to negotiate peace, which Mr. Davis thought would be of interest to Mr. Rathbone. This organisation Treasury relative so. leave While to and importance your however to judgment the appreciate such decision visit the advantage and as of of to your your the to presence is Europe during the next few weeks." bulletin contained a section of notes on work of the Commission on Reparation of Damages, February 15 to 21, 1919. Copies of these notes are attached. 247 -5- C 248 0 & bulletin issued by the American Commission to Negotiate Peace -6of the mission, acted as the United States representative on the on February 14, 1919 outlined the membership of the commissions of committee on organisation of the Reparations Commission. Upon the the Conference. These commissions and the American members of the organisation of the Commission he participated is its deliberations more important ones are as follows: as the unofficial representative of the United States, being succeeded League of Nations President Wilson by Roland v. Boyden early in April, 1920. Non. Edvard M. House THE BRUSSELS CONFERENCE - MAY, 1920 Responsibility for the War and its Authorisation The Council of the Lengue of Nations in February, 1920 passed . Non. Robert Laneing Mr. James Brown Scott resolution to "convene an International Conference with . view to Reparation of Danages Mr. Bernard N. Barach Mr. Norman E. Davis studying the financial crisis and to look for the seans of readying Mr. Vance McCornick is and of mitigating the dangerous consequences arising from it." This conference was to be held in trussels at the and of May, 1920. International Labor Legislation International Control of Ports, Waterways and Railways Economic Drafting Commission Mr. Bernard K. Baruch Financial Drafting Commission Mr. Albert Straues Mission to Poland Study of Greek Territorial Claims Study of Bumanian Territorial Claims Control for Teacher. FINANCIAL REPRESENTATIVES IN EUROPE 1919-1920 In January, 1919. Norman H. Davis was appointed by the President 0 The United States was invited to be represented at the conference but the State Department replied as follows: "This Government would not ... its way to appoint as official delegation, but the Secretary of the Treas- any will be glad to designate one or more unofficial representatives to attend the conference. the conference Vas postponed fres time to time but was finally set for September, 1920. Roland v. Boyden, the unofficial representative of the United States on the Reparations Commission, was designated as the unofficial representative of the Treasury at the conference. Finance Commissioner, representing the Secretary of the Treasury in COST OF AMERICAN AEMT OF OCCUPATION IN GERMANY - 1923 Europe and acting as financial adviser to the American peace mission until July, 1919. Early is that year Albert Stresse and Thomas v. Lamont were designated as special representatives of the Secretary and were associated with Mr. Davis as financial advisers to the peace mission. Is the following fall Albert Rathbone, then Assistant Secretary, acted on behalf of the Secretary of the Treasury as financial adviser associated with the peace mission, and after the return In 1923 Mr. Elliott Valsworth, an Assistant Secretary of the Treasury, went to Paris to confer with representatives of the Governments of Great Britain, France, Italy and Belgium concerning the reimbursement of the cost of the American Aray of Occupation is 250 0 249 -7- October 26. 1918. the Rhineland. As a result of this conference Mr. Vadeworth signed an agreement (May 25. 1923) on behalf of the United States whereby Dear Mr. President: the United States would receive its total Army cost in twelve equal In my letter of this morning I called to your attention yearly instalments, the first to be paid on or before December 31, the financial questions which it is anticipated will form the sub1923. ject of discussions almost immediately between the United States It is not clear from our files whether this was considered a Treasury and the representatives of the French and British Govern- a State or Treasury matter, but being financial in character, neats. These discussions cannot but lead to further questions being Treasury representative was chosen to carry on the negotiations. raised which will have a bearing on peace negotiations. I feel I should draw your attention to some of the financial phases of the peace problem and the importance of insuring DUB 8 adequate presentation of the - of the United States on these questions at the Peace Conference. As settlements at the Peace Conference may involve sup- plying France with gold or foreign credits, the use of the German aercentile fleet and other matters that will have a vital bearing on the questions indicated is my previous letter to you of this date : do not anticipate that any final settlement of these questions ona be effected until the Peace Conference. I do think, however, that it may be possible at the discussions about to take place to establish some general principles for dealing with these matters and in any event such discussions will go far to clarify the situa tion. 252 251 0 C be required without impairing financial resources beyond the safety point. The financial questions referred to in ay letter of this (3) Those arising regarding reconstruction, involving morning are sure is some form or other to crop out about the peace table is spite of any tentative arrangements made before that time. consideration of the extent to which neutral countries There are other questions of finance that must then be determined, should be required to participate is the reconstruc- in many of which our country is vitally concerned and is all of which tion of devastated areas by the supply of materials, we are at least indirectly interested. A permanent and satisfactory the wealth and financial resources of sugh neutral peace one scareely be realized if the financial conditions are not countries, and the methods of financing the actual such as to permit the various nationalities to prosper materially and work of reconstruction in the devastated areas. (4) Those arising regarding the use and disposition of to reap the rewards of industry and fregality. requestered property in the various belligerent countries. Among the other financial questions that will no doubt receive consideration at a Peace Conference are It is reported that the Alien Property Custodian holds 0 a large amount of property, and delicate and import= (1) Those arising from territorial readjustments, involving 0 considerations of war and pre-mar debt, character and ant financial questions may be involved in the disposi- purposes of past borrowing. relative wealth and resources tion of this and similar funds held is other countries. of different territorial areas. currency and banking. (5) Those arising from demands that will no doubt be presented by some of the associated governments in regard to restoring (2) Those arising from reparation, involving consideration of war expenditures, extent to which they have . permanent gold reserves, involving a consideration of the present residual value, extent of damage by the eneay, both in and pre-war gold and currency situation of the belliger- the ordinary course of var and is violation of inter- est countries. (6) Those arising is respect of the var indebtedness of gov national law, including seizures of money and securities, destruction at ... as well as on land, payments exacted ernaents inter as. It may be anticipated that questions in occupied territory for legitimate purposes or for of a general readjustment of this debt will be raised by spoilation, and also a study of the sources of wealth the nations which have been both borrowers and lenders and financial limitations of nationalities so as to 4 determine the amount of any payments that can safely Q and with which the United States, as one of the principal 254 -5- 253 0 -4tical information and studies which are necessary if the Commission is to be fully equipped for its work will readily suggest itself to leading nations. is preeminently concerned from a you, and I recommend that the Treasury, working in close cooperation financial standpoint. Such questions would involve with the inquiry being conducted under Colonel House, should be charged studies from the financial standpoist concerning the with the preparation of the financial information necessary to equip international trade and finance during the pre-var the Peace Commission to deal effectively with the financial phases of period of the countries concerned, their earnings and the peace negotiations. I have every reason to believe that such as expenditures on account of shipping. capital investment, arrangement would be welcomed by those is charge of the inquiry. internal and external debt, and other data required to form a judgment as to the ability of the debtor nations Cordially yours, to pay interest on their indebtedness and to amortize (Signed) Vs. G. MoAdoo the principal. From the standpoint of our own finance cial safety the importance of holding the obligations O of the foreign governments which ve have acquired : think must be apparent in any consideration of the questions The President, The White House. I have presented, and I cannot too strongly deprecate the suggestion that ve should cancel the indebtedness of the Allied Governments which we hold, which is being made by various individuals who are not charged with any responsibility and who are necessarily ignorant of the complicated problems involved. I as not attempting to state all of the financial questions which may arise at the Peace Conference, nor to go into then in detail. AR: JJ Those mentioned will serve to indicate the importance of the financial problems to the United States and the desirability - if not the a O city of the Treasury's being represented on any Peace Commission that may be constituted. The magnitude of the task of preparing the statis- 256 255 -2- 0 A third point was brought ous, by the Powers which had THE CONCISSION ON REPARATION OF DAMAGES adopted arulation conventions with the Central Powers other than Notes on Work of Commission. February 15th to 21st, 1919. Germany, visi that as these conventions took effect before the armistice with Germany and were unlimited as to the right of reparation, The Commission continued its discussion of the fundamental the position of the Powers could not be regarded as prejudiced. principles on which reparation is to be based. The Belgian Delaga The American position was reasserted to be limited tot (1) tion, while maintaining its position as to the rightfulness of complete reparation, including cost of var, has for practical considerations damage resulting from violations of international law and (2) damage supported the American position, on the ground that it would not be done to civilian lives and property. The American representative nais- possible to include all war costs of all the Allied and Associate tained that the November agreement constituted . contract by which the Powers without prejudicing the particular claims of Belgium, which were Allied and Associate Powers had expressed . limit to their freedom of justified. 11 was asserted, on account of the violation of Belgium's action, and held that the armistice could not be considered otherwise than as as instrument intended to guarantee that the Allied and Associ- neutrality. 3 In regard to Berbia, N. Protitch held that a #0-called ate Powers would be in a position to enforce ultimate terms of peace, reparation which are Serbia a physical reparation but left her these terms amounting to no more than . practical application of the burdened with a huge debt to the Allies would fall very short of real principles embodied is the previous agreement with Germany. As to the reparation. peculiar position of the Powers which adopted the armistice convention The position of Great Britain was that of asserting that with Austria, Bulgaria and Turkey, the American representative held Belgium's right to claim var costs based on the necessity of self-defense that while they were technically free, it was the understanding that placed upon her, should be equally enjoyed by the Powers that case to the spirit and purpose of President Wilson's fourteen points and subse- her rescue. quent addresses would be adhered to. The French Delegation proposed to end the discussion by a The position of France was set forth by M. Klots, whose main argument was that the agreement with Gerway on which the armistice vote on the following propositions (1) The right of reparation of was based could not have been intended to limit the claims for repara- the Allied and Associate Powers is all-inclusive (integral): (2) The tion, inasmach as at the meetings of November 2nd and 4th, at which enery must make good all coasage, as order of priority being preserved the agreement for the cessation of hostilities was reached. article XIX of the Armistice Convention was also drafted, in which the right to put in further claims was expressly reserved. . for certain claims. The American Delegation proposed that the first RECISION TRADE MARK MC 257 -3of these propositions be submitted to the Suprese Var Council. This proposal was unanimously adopted. The two Sub-Committees. the First having to do with the valuation of damages, and the Second with the capacity of the enery to make reparation, are at work trying to gome to definite conclusions. O 259 258 -2- DEPARTMENT OF STATE This the fifth of the State Department programs, is about the enemy countries. Assistant Secretary of State Archibald MacLeish has with him Assistant Beoretary James C. Dunn, who is in charge of European, Near MARCH 23, 1945 FOR THE PRESS No. 258 Eastern and Far Eastern Affairs, and Ambassador Robert Murphy, Political Adviser to General Eisenhower. And CONFIDENTIAL now FUTURE RELEASE NOTE DATE a MACLEISH: This 10 Archibald MacLeish. I want to quote paragraph or two from a letter sent in by a man who lives on Monroe Street in Memphis, Tennessee. It will explain our purpose in being here tonight far more In eloquently than I can. Our rrespondent saye: yesterday paper I read that the outfit with which I served in World War I, and which spent a year 'occupying Luxenbourg, has just taken Trier again. To me things like this are certain proof that a do-nothing policy has CONFIDENTIAL RELEASE FOR PUBLICATION AT 7:00 E.W.T., SATURDAY MARCH 1945. PREVIOUSLY gotten us novhere, and fast. PUBLISHED QUOTED FROM OR USED IN ANY WAY. "My personal policy is boiled down to thist Will it be necessary for the 5th Division to occupy Trier for the third time?" The following is the fifth of a series of seven broad- casts over the National Broadcasting Company entitled "Build- That's a fair question. It's up to us -- to you ing the Peace*. The subject of this fifth broadcast 10 What About the Enemy Countries? who are listening, and to those of us who are charged with responsibility for the formulation of our foreign policy - to make sure that the Fifth Division won't have to occupy Trier a third time. 0 PARTICIPANTS MR. ARCHIBALD MACLEISH MR. ROBERT MURPHY - Assistant Secretary of Now, what about Germany Such influential newspapers as the New York Times, the Philadelphia Inquirer, the Washington Post and the Christian Science Monitor State Assistant Secretary of have asserted that it is time for the people of the State - MR. JAMES C. DUNN - o United States and the United Nations to be more fully informed about our intentions with regard to Germany. Ve hope to make our position on this question clear. United States Political Adviser on German Affairs, And this is a most appropriate time to do it, with SHAEF MR. KENNEDY LUDLAN Allied armies advancing rapidly into Germany from the East and from the West. I have here with no two men who are directly concerned with our policy toward a defented Germany Ambassador Robert Murphy has just come from the European theater of war. and 10 about to return to his duties as Political Adviser to SHAEF 5-H-A-E-F -- Suprene Headquarters of the Allied Expeditionary Forces. Is that right, Mr. Murphy? Announcer for NBC WHAT ABOUT THE ENEMY COUNTRIES? VOICE #1: How are we going to deal with the Nazi var criminals? MURPHY: That's right, Mr. MacLeish. I might add that the State Department is working hand and glove with the Army in these matters. That's why I'm assigned to SHAEF. VOICE #2: How can we re-educate the German people, who have been getting nothing but Nazi propaganda for no long? VOICE #3: What about our unconditional surrender policy ANNOUNCER: Tough questions. But we must find the answers if ve don't vant to DATE the way for World Var III ... For authoritative information regarding our foreign policy, NBC's University of the Air calls upon officials of the Department of State, in seven broadcasts on the problems of Building the Peace. These programs are part of a C 0 larger series on Our Foreign Policy, for listeners in this country, and through the facilities of the Armed Forces Radio Service, for our service men and women overseas, wherever they are stationed. This, MACLEISH There's one question, Mr. Murphy, which has been the subject of much discussion here at home in recent months our demand for unconditional surrender. The public opinion polls show that an overwhelming majority of Americans support this demand. But there are some who argue that this policy forces the Ge reans to fight on, making victory more expensive for us. What do you think of that argument? MURPHY: That's pure eye-wash. If we offered the Germans any sort of compromise -- which ve have no intention of They doing - it would be taken as a sign of veakness. wouldn't believe us anyhow; the Nazi propagandists have drilled into their minds too long the idea that Wilson's 14 points 261 260 0 14 points were just a ruse to get Germany to surrender in 1918. This time the Germans will not be able to claim that they were duped into laying down their arms. They are nov witnessing the thing they understand best superior force of arms. o for following vicious leadership. MACLEISH: Another question we frequently get 1st What about the var criminale? Will they get away this time? One lady writes from Portland, Oregon: "I on very much concerned over your failure to advocate punishment of varwill -and guilty MACLEISH: We have made it abundantly clear, too, in our broadcasts to Germany and in the report on the Crimen leaders of Germany surely Japan you not favor them going unpunished so that history may again repeat itself. I am not vengeful but surely we must punish by death all those instigators or accomplices concerned in the proven atrocities.' Another correspondent in New Orleans writes: "One of my sons ves killed and Conference that "it is not our purpose to destroy the people of Germany, but only when Nazien and Militarism have been extirpated will there be hope for a decent life for Germane". rest will one vas wounded in this ver Never while Hitler. Himmler, and their gang walk the world free men." Those are typical of many letters to the I MURPHY: And judging from the increasing number of German soldiers who are surrendering, Yr. KacLeish, and the large numbers of German civilians who are disobeying their lenders' demende that they evacuate the western areas -- the German people understand us on this point. They know that ve mean to destroy German militarism and Nazism, and they respect UB for it. The German people Department. Nov, one writer has stated that after the last war, a list of 896 war criminals was compiled by the Allies the and MACLEISH: That's the way it looks from Supreme Headquarters in Europe; how does it look from the desk of the Assistant Secretary of State in charge of European Affeire? Mr. Dunn, you have your own views on the unconditional surrender policy. o to the Germans. By clever bargaining, DUNN: That's out of the question, Mr. MacLeigh. We are fully determined to punish the war criminals this time. There is complete agreement among the Allied Nations that all of them will be apprehended and will be *brought to just and swift punishment", to quote the Yelta declaration. O DUNN: Yes. I think it's more than n military problem. We've got to realize that while our primary military objective is the defeat and unconditional surrender of the German forces it 10 just as necessary for US to require the MACLEISH: How do you define a war criminal? Let's start right at the top. Hitler will, of course, be considered war criminal. unconditional surrender of the German Government. This 18 essential if the necessary steps are to be taken to prevent a resurgence of the militarism which has caused this ver and the previous were started by Germany. Anything short of a realization by the German people that out their whole apparatus for making war is to be stamped a DUNN: Yes, unquestionably. MACLEISH: The fact that he 18 chief of state 1e no reason for excluding him? Some writere have expressed the fear that some such legalistic reasoning will stand in the way of would only give rise to another wave of militaristic planning. Remember, last time we had an armistice instead of unconditional surrender. MACLEISH: Here's a letter from n corporal in the European Thentre of Yer, who also has ideas on this subject: was very angry when I read (about the talk of negotiated peace. I have seen enough of the German soldier to form the definite conclusion that a negotiated pence will not end this war to any soldier's satisfaction. It would only give Germany time to build up again, and that would bring on a conflict that will be much worse than the one we have now. Our only salvation 18 to get en unconditionel surrender, whereby we can completely disers Germany and destroy her militaristic form of government want to become a civilian just as much as the other fellow. But when I do become a civilian, justice being done. "I o submitted Germen Government reduced the list to 45. Only 12 were actually brought to trial, however, and only 6 were convicted, with light sentences. Can such a miscarriage of justice occur again, Mr. Dunn? are very tired of var. I want to stay a civilian. I don't want to be called up agrin in five years, which is what will happen if we give the Germans a negotiated peace. That was a corporal in the Army who spent 80 days in combat before he was wounded. He vrote from an Army hospital overseas. MURPHY: I know he speaks for our men over there. He speake for us, too. Fortunately, this will soon become a dead issue anyhow. Germany's choice now is between unconditional surrender, and pulverization and 10 they choose pulverization, they will have only themselves to blame for DUNN: Hitler and Himmler and the others will be judged on the basis of the note which they have committed or have caused to be committed. Hitler is directly responsible for the enslavement of the Jews and foreign workers; he is responsible for the 0000 murder of Jews, Polen and c others; for such crimes P.S pillage extortion and arson; and for numerous other common crimes. He must be held responsible for then as an individual. There is no question in the world but that he is responsible, with others. for the initiation of policies which resulted in ell of those acts. MACLEISH: How far down the line would this go, Mr. Dunn? Yot about the Gestapo? It's supposed to be a voluntary organization which nobody 16 forced to join; should its members therefore be held responsible for the organization's crimes? DUNN: We think that members of the Gestapo who have carried out criminal acts must be punished. All persons, whether members of any such organization or not, who have committed 263 262 -6- -5C 0 MACLEISH: Mr. Murphy, does all this scuare with the plans being developed at Allied Headquarters? DUNN: Well, Mr. MacLoish, whether he would natually be punish as war criminal would presumably depend on whether he committed specific criminal note or caused then to be committed. But he would certainly be among those to be dealt with. There will inevitably be a lot of borderline ORBOS for which A yardstick will have to be constructed. don' t want any of the war criminals to get away. MURPHY: I think Jimmy Dunn has expressed our views very well MACLEISH: You have certainly made our position on war criminal committed any of the acts which are considered crimes against humanity will be considered var criminals. Ye are interested first of all in justice being done, not 1 technicalities. We clear enough, Mr. Dunn. Some people seen to think we're just going to eit behind dust legal volumes and let the In deeling with the part of Germany our American troops have occupied so far, we have apprehended any known war criminals who have been left behind. Our military authorities have dismissed Nazia from responsible positions as quickly 0.0 they could be identified and replaced, regardless of whether or not there were any specific charges against them. As American forces oulprite get away. DUNN: They' mistaken, Mr. MacLeigh. They' re dead wrong. MACLEISH: There have been some press reports that Nazi polition leaders and business men have their plans all laid for escape, or have already escaped, to certain neutral countrics. Is that true, Mr. Dunn? progress and larger areas fall to their juriediction, this becomes a major responsibility After all, in Germany at last reports there were some six million mean bere of the Nazi Party and two million of them held DUNN: Our representatives in the neutral countrice have been on the alert for prominent Nazie coming in, but there has been no sign of it so far. major or minor offices. MACLEISH: Nov let's examine that other legalietic argument which has been cited as a possible loophol for var criminals the argument that if an individual 10 morel carrying out orders from above in committing strocities, he's not personally responsible. will that argument be O DUNN: We have had assurances from most of the neutral countries given any weight, Mr. Dunn? Some commentators have that they would refuse admittance to any Axis war criminal, and would deport them If they came in illegally. We are expressed the fear that the people who actually committe the atrocities would plead innocent on this ground. not entirely antified on this as yet. But we will take every necessary step to prevent the criminals from escaping DUNN: I think we should look at the not itself, Mr. XacLeish We are determined to punish the individual for the note which that individual has smitted. We will make only MURPHY: Our military have instructions to round them up before they CAD get away, and we will not quickly when we occupy one stipulation that there must be a fair trial in Germany. every case. MACLEISH: Mr. Murphy, you have seen the work of the United Nations War Crimes Commission in London. There is a pre- MACLEISH: How about atrocities committed by Germans against Germens, for example, in the CASE of German Jowa? "111 valent idea in this country that it is supposed to not up the machinery for catching the WAR criminals and bringing then to trial. the perpetrators of such crimes be punished? DUNN: Yes. ve expect to go the whole way on this. Under Secretary Grey node that clear a for weeks ago in one of his press conferences. He soid that ve proposed to bring the Axis leaders and their henchmen who have comm. tted var crimes end strccities to justice, regard-less of who the vioting vere. That applies to crimos Germans against Jews, and against the people of every MURPHY: The present War Crimes Commission was not up at the suggestion of the British. It sits in London and includes representatives of 15 of the United Nations, incl uding the United States and Grent Britain but not su yet the Soviet Union. Under its terms of reference the Connission makes of recommendations to the coveral Governmental looking to uni- occupied country. MACLEISH: An accountant up in Newark who wrote in asking us to discuss this whole question ns it applies "not only to soldiers but also others who have helped Hitler to get his pover brings up this question: Will Nazi industrialists be included in the definition of war oriminals? I don't mean no a group. But take a case like this, and there will be quite fev like it. I'm sure: A German Industrialist bee supported Hitler from the outset. has helped finance his rise to power, supported the Ho rearmament of Germany sold erms to the Hazi Government at profit, used forced labor from the occupied countries in his plant, and supported the Nazi cause and cooperated with the Nazi Government in every way. Would that man be classed as a war criminal? MACLEISH: Can you summarize the steps that have been taken to prevent the escape of war criminals? DUNN: Well, formity in the definition of wer orines. It also identiO fies and lists war criminals. It is A Commission for pre- liminary study and has not been given executive powers. Then, Allied forces arrest and detain war criminals as they advance into Germany. The military of course have considerable data regarding war orines Those charged with crimes and atrocitie committed in liberated areas are to be turned over to the justice of those countrice. DUNN: The American Government stands solidly for the apprehen- sion and swift punishment of German war oriminals and is actively cooperating its allies to the end that none may escape retribution. MACLEISH: The 265 264 -8- 0 MACLEISH: The Soviet Union, according to the Dress reports over here. deals with the war criminals she captures swiftly and drastically. But Mr. Murphy pointed out moment agao that she 10 not represented on the War Crimes Commission. Does this mean there is a difference of policy between the Ruesians and ourselves, Mr. Dunn? DUNN: No. There is no difference of policy. There is complete agreement among the three big powers on this general issue. MAOLEISH: Mr. Murchy, there have been criticisms of our ocou- pation policy as regards the use of Fasciet of ficials locally, I have seen allegations that Fascist officials have been left in local office in Italy, and recently a New York newspace said that four Nazia were left in official oitions at Amohen, Is that true? If it is how do you reconcile that with the tough policy you have both been outlining? religion is established. When all this 10 done, and matters are running more or less smoothly, our occupation forces get on to other things. McCLEISH: You might mention some of the "other things* MURPHY: All Nazi newspapers are closed down immediately, of course: but as the press 10 essential. newspapers are gradually allowed to resume publication under close super- vision, at ter sifting out the Nazia on the staff. Licens- ing boards will be established to supervise this whole process. MACLEISH There has been a great deal said and printed over here, as you probably know, about the necessity for encouraging democratic tendencies, euch as may exist in Germany, to provide a basis for popular government in the "If future. One newspaper columnist put it in this way: we treat the whole nation Be Nazie, they will react 98 Nazis. If we differentiate, we will discover differences. MURPHY: On the contrary, in Anchen we have systematically removed not only Nazi party members but others known to be & possible, no I BAIC a moment ago. Complete freedom of hostile to the Allies, When we reconstitut the administration, few Nazie were swittingly left in of fice, but I was assured just bef ore I left BRASF that they had been removed. or course, you' got to consider this: it sometimes takes our combat commanders a little time to and out who the Mazie are. And for military purposes, it is necessary to keep the utilities and important factories running. MACLEISH: We all understand that military needs must be met first, But are such temporary measures discontinued as soon as they can be? MURPHY: Yes, absolutely. They are purely temporary. Our policy is definite and unequivocal. Ve intend to have no truck with the Nazia, or with people known to hold Pan-German theories, for that matter. The two usually go hand in hand MACLEISH: Pan-Germanien-- by that I understand you to mean the theory that it is Germany's destiny to expand to take in Germane everywhere in the world and oreate a German superstate--Pan-Germaniem 16 classed with Nazion as a dangeroue doctrine, then? MURPHY: It 18 one of the basic Nazi theories. In a way it is even more dangerous than Nazion, in that it goes back such farther, and has inspired German aggression time and time again. MACLEISH: Can you give us A quick fill-in on the way the AMG that 18, the Allied Military Government program operates in occupied German territory? I assume there's nothing secret about it, since General Eieenhower himself has broadcast it to Germany. I imagine you had a hand in that, as political adviser to General Eisenhower. MURPHY: Well, the first step of the Allied forces on noving affiliated into 8 new place 16 to dissolve all Nazi and organizations. Our forces revoke all Nazi laws which discriminate against recial minorities and anti-Nazis generally, They also get rid of the Nazie in all official posts as seen possible as Do you agree with that, Mr. Murphy? MURPHY: Well, Mr. MacLeigh, I don't think we should be too optimistic about the early discovery of many "democratic" Germane. After a dozen years of Nazi rule, there's not much left to build on. But we are trying. We are encour Aging the trade unions to organize again. Eventually, I believe, we should make it possible for some of the workers in the mines and factories to participate in their management. MACLEISH: That would be a forward-looking policy by anybody's book. But how about political organizationa? MURPHY: Our only move 80 far 18 to outlew all Nazi political organizations Eventually we expect to see the political parties which were dissolved by the Nazie stage R comeback. But that would be presature now because of the military situation. It will have to be done gradually. Local self-government will have to come first. MACLEISH: We started out to talk about the military government. But some of these plans you mention are long-range plans. They obviously won be put into effect until the war is over. Are these techniques and objectives to be carried over, then? MURPHY: Yes, the day-to-day experience we are getting now will be the basis for the policy JO will develop when we march into a defeated Germany to occupy the American Zone. The Army 10 already training several hundred officers in England and France - the United States Group Control Council to take charge in our occupation zone. They will work with the Allied Control Commission which will be not up in Germany. MACLEISH: You are political adviser to that group, as well as to SHAEF, I understand. MURPHY: That's right. MACLEISH: When PRECISION TRADE MAKE MICROFILM MICROSTAT ROLL NO. 267 266 -9- MACLEISH: When the Germany Army is beaten, Mr. Murphy, do you expect the Nazie to organize underground resistance? Some writers have gone 80 far as to predict that they will break up into guerrilla bands and take to the hills. MURPHY It's impossible to tell at this stage just what will happen. We do expect to have a good deal of trouble with the Germane even fter they surrender. The fanatical Nazie will probably give us trouble for some time. MACLEISH: When the occupation comes, it will of course be shared among the four occupying powers. Now, to what extent have detailed plane been drawn up for that, Mr. Dunn? DUNN: Well, there has been an understanding Among the nations as to the general location of the occupation zones. And there has been agreement on the type of central control machinery which will govern Germany -- the Allied Control Council. MACLEISH: Do you think that very large American forces will have to be used over a long period of time, or will we be Able to depend on the European nations around Germany to do the policing? The public opinion polls show that most of us are willing to have American troops stationed in enemy territory for some time after the war. But one Colorado newspaper has remarked, The policing of Germany 10 a job for which sufficient European forces exist and which will be better done if those forces are used. What about that, Bob? MURPHY: of course, when the collapee or surrender of Germany takes place, there will be very large America forces in Germany. The size of the Americ army remaining in Germany thereafter, for the purpose of carrying out our responsibilities no to German diearmament and control. would depend on two things. One 10 the time we will need effectively to carry out our part of the job; the other is the necessity for the use of as many American troops as possible in the Far Eastern war. MACLEISH: How long do you think Germany will probably have to be occupied? There have been some published guesses that it will take a million men 10 to 20 years to occupy and clean up Germany. Would you care to make a guess of your own? o -10- DUNN: It's absolutely impossible to make any predictions as to actual time periods in connection with occupation. One thing is certain: it will be necessary to keep Germany under control for A great many years in order to insure that the doesn't rebuild her arnament and start up her militaristic activities all over again. As to how long it will be necessary for those controls to be imposed and maintained by a large military force, and after that how the controls would be continued in the form of polioto say long ing, it 10 absolutely impossible at this time. But It will depend on how much trouble the Germans give us. after the tapering off of military control, it will still be necessary to control manufacturing, and in fact the whole economy. MACLEISH: And what would that require? A corps of civilian observers? MACLEISH: Then there is the question about the division of Germany into three or four parts. Several writers have suggested that, Jimmy. DUNN: The answer to that will depend on the final decision of the United Neti as to the most effective neene of preventing Germany from again becoming . war-making nation. That' the prime consideration MURPHY: It's not impossible, of course, that there may be . movement inside Germany to divide the country. If such tendency occurs and the Allies find it to be in the interest of long term securi ty and the future peace, they MAY encourage and approve such A development. This question naturally is of the longer range variety. It should be answered in accordance with what seems to us to be our best interests, and the best interests of Europe 88 a whole. MACLEISH: A woman out in Wisconsin has written to nok: Will the Austrians be treated differently from the Germane proper? Jimmy will the fact that Germany annexed Austria by threat of violence influence our treatment of the Austriane? DUNN: Yes. But whatever type of system or control 18 put into effect, we must not get the idea that that is the solution: t is going to require continued vigilance on the part of this country and the world to see that Germany does not again rearm. No matter what system we adopt, we ve got to be on the alert to prevent a new growth of German militar1sm. Don' t you think so, Bob? MURPHY You right. We should be wary of putting our entire confidence in any particular plan of control, as such. We should always bear in mind the importance of Allied unity in dealing with the German problem, and the importance of vigilance in maintaining whatever system of control the Allies put into effect. That system must be sufficient to reach into the economy of Germany for the purpose of preventing military production and rearnament. But, whatever system of control 10 adopted the most important element 16 that there should be back of it informed American public opinion and . continuing interest by our people in this problem. MACLEISH: Do DUNN: The Governments of the three big powers made a declaration at Moscow in 1943 in favor of the re-establishment of the independence of Austria. They also added that the action taken by the Austriane themselves in liberating Austria would be taken into Account, in determining the status Austria would have after the war. We have reminded the Austriana of that again recently. MACLEISH Suppose the Austrians want to continue Anschluss that 18. union with Germany - for economic reasons. Would the policy you mention rule that out? DUNN: I should think Anachluss would be definitely ruled out, Archie. Austria would not be combined with Germany in any way. within the foreseeable future, at any rate. MACLEISH: There has been some controversy, as you gentlenen know, over just how Germany should be controlled economically. The alleged proposal that most of Germany's industry be destroyed and Germany be reduced to en Agricultural country has SPRECISION TRADE MICROFILM MARK ROLL NO. 269 268 -12- -11- identify a school toacher as A member of the Negi Party or to determine what affiliation he or the might have had with Nazi organizations, such as the Store Trooper or the HITLER JUGEND. This will require oareful and patient screening over a considerable period of time. has been the biggest storm denter. Most of the press. and public opinion generally, has opposed it. But a great all majority of the public favors stripping Germany of industry she might conceivably use for war purposes. DUNN: There's no doubt that will be done. The Yalta Declaration saye. 'It 16 our inflexible purpose. to eliminate or control all German industry that could be used for military MACLEISH: The main problem is other German re-education should be left to the Germans themselves or whether Allied supervision will be necessary. production. MACLEISH: Some commentators over here have pointed out entirely that in MURPHY: I believe that unquestionably the Allies must supervise this delicate operation. DUNN: Under the Orimen Conference decision, the matter of re- MACLEISH: According to one public opinion poll, two-thirds of Americans favor some sort of allied supervision over German education after the war. view of war damage, German industry will be almost destroyed. In view of this, what about reparations? parations from Germany was left to a commission to meet Burcau in Moscow. Isador Lubin, who has long been head of Labor, the 10 DUNN: I should thing we would certainly want to keep an eye on the reeducation process. That will be essential if we ever expect to see a democratic Germany emerge from the occupa- of Labor Statistics in the U. S. Department of to be the American delegate to the Commission. tion period. But to bring that about - we'11 have to find MACLEISH: Now we come to one of the toughest questions the Germane. we have or train Germans to do the main job. A recent opinion survey aboved that Americans believe, won't be by majority of more than two to one, that there to , of the right kind of Germand within Germany about o 'enough reeducate the people along democratic lines. How c got to denl with post-war In the Pacific there 10 such more fighting still to be done. But, Jimmy, you might at least touch on our policy toward that, Jimmy? Are MR going to be able to reeducato the Germane? MACLEISH: Now, gentlemen, we have spent virtually A11 of our time on Germany, which 18 appropriate enough, sincenear we' vo future. very the in Germany a to deal with - that 10, the reeducation of = Japan. DUNN: I would any that this 10 one of the most important problemp we have before us, because control and elimination of the war-makingthe power of Germany won' beGermany ufficient tofor all inrebirth of a militaristic DUNN: Well, Archie. our plans are much less advanced where Japan is concerned. We have to take first things first. Then, too, very little can be said about long-range plane for sure that field will time.against I thinkbroad this problem, 10 veryone in the Japan, for military reasons. The Japanese propagandists would distort anything we might say. to be ven very careful study by exporte make have education. A program of recducation which would It MACLEISH: of course, some things are A matter of record. Our stand on unconditional surrender applies to Japan 18 well Germany of the a peace-loving nation must be instituted. seens two most important espects of the long range ns Germany. to treatment me that of Germany are the reeducation of the Germane and the reestablishment of the rights of labor. DUNN: Yes. We'11 have no more truck with the Japanese militarista than with the Nazic. Ag for back as December 1943, MACLEISH: A radio forun I heard recently came to within the Germany; conclusion the Cairo Declaration made it clear that 'the three Allies will continue to persevere in the serious and prolonged operations necessary to procure the unconditional surrender of Japan. President Roosevelt, Prime Minister Churchill that reform of education should come from inter- that such reform should be made " part of an but national program of cooperation, through an international of education. In the light of your experience, should 80 and Generalissimo Chiang Kai-shek said that. office far, Bob, do you have any ideas on how reeducation proceed? MACLEISH And the same United Nations lenders also announced at Cairo that Japan will be stripped of every bit of terri- 0 MURPHY: Well, to begin books with, must Archic, be eliminated all Nazi in teachers, the early teach- period ings, and text Schools will be closed temporarily until have of necessary control. adjustments of faculties and text books been effected. pendence "in due course* which presumably means as soon as they are in a position to govern themselves. What can you add to that, Jinny? MACLEISH: Will there be enough Germans who are democratic and anti-Nazi to fill the teaching Joba? who MURPHY: That 10 a tough question. In the Archen school area. teachers it was only a small percentage of the of the found that members of the Nazi Party Some remained were not offered their services to the Military local Germane authorities, who proposing to carry out a program Government of education adapted to liberal ideas, were found always to be of to exceedingly doubtful origin. It will not be eney identify tory she has taken by force of arms. since she started on the warpath back in the 1890 8. Formoon and Manchuria will be restored to China, and the Koreane will get their inde- DUNN: Well, as Under Secretary Grew has and "There can be no peace anywhere in the world until the Japanese, as well as the Nazi enemy 10 laid low. If the registance on Iwo Jime is any criterion, e've still got a big job on our hands to defent Japan on her home islands and on the mainland. Once Japan 10 beaten, she will of course be completely demilitarized, like Germany. MACLEISH: One -14- MACLEISH One question that our correspondents show a lot of interest in 1s: What 18 our policy toward the Japanese C 271 270 -13- VOICE #11 How 18 the Good Neighbor Policy related to the Monroe 0 Doctrine? Emperor? VOICE #2: What 18 this Economic Charter for the Americas that came out of the Mexico City Conference DUNN: Mr. Grew has told the Senate Committee on Foreign Rela- tions that no one is in a position to determine the postwar position of the Japanese Emperor at this stage of the game. would like to say this - certainly neither the State VOICE #3: What about Argentina? Department nor Mr. Grew is defending the Emperor's posi- ANNOUNCER: This program came to you from Washington, D. c. tion. This is the National Broadcasting Company. MACLEISH: What this all seems to oome down to 10 the conclusion that our plans for the treatment of Japan, like the end of the Japanese war itself, are still in the future. So far as Germany is concerned, however, we seem to be able to make some pretty precise statements. I would sum them up in this way. First, we are definitely committed to the policy of unconditions surrender. We believe that Nagian can only really be destroyed and the war really won on that basis We believe the great DA jority of the Americ people feel the BADE way. Secondly, itonly is not our purpose who the gangs but of to destroy the people Germany have nie-go verned, mis-managed, and nisled then. That means that we propose to punish -- and really to punish the guilty war leaders and their tools and agents. Third, our whole policy for the occupation of Germany is policy aimed at stamping out Nazi controls at every point. We don' know how long it will be necessary to occupy Germany in order to undo the evil work which has been done there. but we propose to stay with the job until it 10 finished. 0 We believe, however that something more than the destruction of the physical power of Germany to make war will be required. We feel that the German people must themselves change their point of view about their relation to the rest of the world. This we think 10 one of the toughest probleme with which we are faced. It 18 tough because it is part of the larger problem of the future reintegration of the German people into the community of mankind. ANNOUNCER: That was Archibald MacLeigh, Assistant Secretary of State in charge of Public and Cultural Relations. With him were Assistant Secretary Janee C. Dunn, who is in charge of European, Near Eastern, and Far Eastern Affairs, and Ambasandor Robert Murphy, Political Adviser to General Eisenhower. This WILLS the fifth of seven programs on the probleme of Building the Peace, featuring top officials of the Department of State. Copies of this broadcast or e by writing of all seven to the State Department Department of State, programs Washington may obtained 25, D. C. These programs are part of a larger series on Our Foreign Policy, arranged by NBC' University of the Air. Starting Next week at this same time you will hear . discussion of America's Good Neighbore in Latin America, Archibald Macleish will be back. With him will be Assistant Secretary of State Nelson Rockefeller, who is in charge of American Republic Affairs. Mr. Rockefelle recently returned from the Inter-American Conference on the Problems of War and Pence at Mexico City, AB did Mr. Avra Warren, Director of the Office of American Republica, who will also be on the program, and our Ambassador to Cuba, Spruille Braden, who will speak from Havana. They will answer such questions as these: VOICE #1: How 0 $ on April 14, NBC will present members of the Senate Foreign Relations Committee, after which the Series will be moved to San Francisco for the opening of the United Nations Conference on April 25. 272 273 0 HAPCL 23, 1945 March 23, 1945 by dear Mr. President: FROM: 1 thought you would be inter- 10: eated in some of the editorials which SECRETARY MORGENTHAU Mr. white Mr. Luxford have been appearing recently in favor From an unimpeachable source in Ohio, I have of bretton Woods. been informed that Senator Burton, of Ohio, is favorable to bretton Woods. Yours sincerely, (Signed) H Morgentheu, Jr. The President, The white house. ( Messenger Kinard Senaral #:30 am 275 274 TREASURY DEPARTMENT aarch 23, 1945 WAR FINANCE COMMITTEE FOR OHIO STATE HEADQUARTERS UNION COMMERCE BUILDING GLEVELAND OHIO Dear Phil: March 19, 1945 Many thanks for your note about Senator ourton. it is most encouraging. Sincerely yours, Dear Henrys (signed) contr Through . reliable source in Washington, that 2 I am not at liberty to quote, I have been informed that Senator Burton, of Ohio, is favorable to Bret- I ton Woods. This is for your personal information. Sincerely yours, Mr. Philip J. Trounstine, Phil 536 Union Connerce building, Cleveland, 14, Ohic. Phil J. Trounstine The Honorable Henry Morgenthau, Jr. Secretary of the Treasury Washington, D. C. NT/eb PRECISION TRADE MARK MICROSTAT MICROFILM ROLL NO 276 March 23, 1945 My dear Senator: I have read with great interest the speech you made in New York on February 18, which Senator Pepper had printed in the Congressional Record of March 8. You made a most convincing statement of the reasons why we must have machinery to prevent economic as well as military aggression. Your reference to the Bretton Woods proposals was particularly pleasing to no since my impression of the American Bankers Association report is quite similar to yours. We enjoyed very much having you with us last week when the (11 short was produced. With personal regards, I - Sincerely yours, (Signed) H. Morgenthau, Jr. Honorable Wayne L. Morse United States Senate PRECISION MICROSTATE MICROFILM ENDIX A1167 International Security EXTENSION OF REMARKS HON. CLAUDE PEPPER PRECISION TRADE MARE MICROSTAT MICROFILM ENDIX A1167 International Security EXTENSION OF REMARKS HON. CLAUDE PEPPER SEXATE OF THE UNITED STATES PRECISION ADE MARK MICROSTATI MICROFILM ROLL NO. 278 3/23/45 0 Mr. Luxford Secretary Morgenthau was pleased to see in the New York leaving Times that the I Wagner was credited with saying on White Senator House that Bretton Woods would pass same RECISION TRADE MARK MICROFILM MICROSTAT ROLL NO. NEW YORK HERALD TRIBUNE - March 23, 1945 279 Florida 11Philadelphia Bankers Back Bretton Woods See Chance for U. S. to Leads Fraser Criticizes Stabilization Fund Plan 11Philadelphia (Confirmed from page one Isaac Trust 4 the Company Philadelphia Savings Boberts Pind Archie D Swift the A the Associated Preta National National Bank PHILADELPHIA March 22. memorahous Lee. the Westers recommending Society authorisation of the Bretter agreements setting ve Market International monetary fund and as International bank for recon- struction and development was forwarded Congress today by the heads of eleven of Philadel phin's major banks Logan Provident the Medico Bank and Trust and Evan Handolph of National Bank Other high lights of the mm The bankers who signed as to dividuals rather than the heads with of their Institutions MADE the BeetWoods too mont give proposals reasonable "in our rates tate other promise avoiding the major financial FORM committed after the last war. supects problems will larget) upon mutual understand and We believe the agreements willingness by by first to carn out the vide fair basis for effective financial collaboration among the chairs United Nations counterpart social collective security in the political the memorandum - the ungen for mutual used The memerandum was signed by William Palton Kurta of the Pennsylvania Company for Insur- ance - Lives and Granting An. multies David . Williams, the Corn Rachana National Bank Neward Losh chairman Trademark's National Bank - E One of the Confinance page 22. colores detreas was have clearly United States now has portanity leadership exert more united and world Even though might the SPECIAL Florida TREASURY DEPARTMENT 281 280 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION INTER OFFICE COMMUNICATION DATE DATE 3/24/45 March 23, 1945. TO Mr. Fuseell FROM Secretary Morgenthau Mr. Luxford Secretary Morgenthau You inquired about the Board of Governors coming out for an advisory committee in their Bretton Woods report. Mrs. Morgenthau says that yesterday's Tribune had & story on the front page about the Philadelphia bankers Governor Saymozak has been checking with me frequently regarding the timing of the Federal Reserve report. Although we have discussed this on and off over the last two or three weeks, he never mentioned to me that they were incorporating the recommendation for an advisory committee (although, of course, we always knew that they had not given up this idea and that Eccles would probably include It in his oral testimony when he testified). coming out for Bretton Woods. I would like to have that clipping this morning. sliffing attached In any event, Elliott Thurston, Assistant to Eccien, cailed me Tuesday morning and said that they were about ready to release their report. Yesterday morning when I went to the Hill, Congressman Spence called me aside and showed me the Board's report and inquired whether it was okay with us if he inserted it in the Record. I told him that I did not know its contents, and knowing only that it was favorable, I would appreciate it if he would give us until noon to check it. He called my attention to the Board's recommendation for an advisory council and said that in his opinion the proposal would not narm us. I called Mr. White's office at once and advised them of the Board's action recommending an advisory committee and requested that as advise me before noon as to whether be wanted to do anything about it. Later in the morning he called me and both of us agreed that there was nothing we could do about the Board's recommendation and that we would not object to the report being introduced by Spence and I advised Spence accordingly. 0 I 283 TREASURY DEPARTMENT 282 INTER OFFICE COMMUNICATION 0 -2- DATE March 23, 1945 TO I don't think that the Board's recommendation for an advisory council at this time is prejudicial. There is a FROM Secretary Morgenthau Mr. Luxford strong sentiment for a council of this character and Jesse Wolcott has told me several times this might be one of the For your information points on which we could compromise Republican pressure. Miss Dorothy Lewis of the Woman's Division of the National Association of Broadcasters, thought you would be interested in the material that her group is using on the United Nations and also in the attached map showing the location of their various outlets. I told her that I would return the map to her when you had had an opportunity to examine it. Attach. 285 TREASURY DEPARTMENT -2- 0 C WASHINGTON March 23, 1945 Secretary Morgenthau TO: FROM: E. B. Pussell Subject: Newspaper reports on income tax investigations The United Press story on income tax investigations is made up from these sources, stated chronologically 1. The Secretary's statements at his press conference, which opened the subject. 2. Supplementary material given the reporters by Irving Parlmeter relations staff, who had accompanied Mr. Trey to Florida, for the of seeing that attention be of the press purpose Mr. Perimeter Florida papers. should was contacted given the by investi- the rethe gation by imediately following the press conference. Material provided the statement that $50,000 porters by him included had been collected other is delinquent taxes (principally fur, jewelry, cabaret and excise taxes) and statements attributed to "an agent" that one vacationist had lost $40,000 in an evening and that $10,000 had changed hands on a single roll of the dice. Material provided by Mr. Perimeter was substantially what had been printed previously in Florida. 3. A general discussion with Mr. Irey, after approval by Mr. Coffeit Public Relations. Mr. Trey confirmed that the investigations would be carried on is "all big pleasure and spending centers." The of mention of Philadelphia, Chicago, San Francisco and Seattle as such cities originated with the reporter (Mr. Gregory). A liberal amount of imaginative writing on the part of the re- 4. e.g., "the biggest drive of its kind is the nation's history" porter, "overshadowing the prohibition are campaign which trapped A1 Capone. Some supplementary material. The "Federal fiscal authority 5. the Treasury Department' who estimated the Government was being chested not is of 3 to 5 billions by big tax synders was Marriner Eccles who some such off the record estimate in a recent press conference. and made references to free spending and luxury living at Miami, etc., PERJICTORY The "you would never know there was a WIT on* probably came from Look Magazine. The Associated Press story, as carried is the Herald Tribune, it. much milder and I do not see how any exception can be taken to Incidentally, the A. P. desk because much interested after the U. P. version broke and asked the A. P. mm to expand his 400 word story to 800 words. He added considerable verbatin material from the press conference and then the A. P. expanded its coverage further by carryis ing story under Kieni dateline. Peculiarly, when the story broke in Miami two or three weeks ago, at the time Mr. Trey was there. is 414n't get out of that circuit (Florida-Georgia territory). But the mention at the press conference made it a national story. And the fact that it was brought up at the press conference. is turn, was probably due to the fact that Mr. Irey and several others were coming out of the Secretary' . office just as the reporters were going in for the press conference. Mr. Irey's Miami trip was referred to by Mike Flynn and the other reporters heard the reference. Mr. Irey, incidentally, .... no barn in the stories and thinks they may accomplish good, though be agreed that the United Press story was overwritten I do not see that any blame is attached to anyone in the Treasury. So far as the United Press MAD is concerned, he aboved more enter- prise than good judgment and did too such imaginative writing. I have had . friendly talk with him, along this line - that the custodian of the nation's money and only inei- and Treasury dentally is a police primarily agency, that the exaggerations that could be condoned on a police run aren't exectly appropriate when applied to the Treasury. I an convinced that be is not an intentional trouble maker. 287 TREASURY DEPARTMENT 286 INTER OFFICE COMMUNICATION Date 3/23/45 Mr. O'Connell TO Secretary Morgenthau March 23, 1945 FROM Joseph J. O'Connell, Jr. Secretary Morgenthau I do not believe there was any unreasonable delay in handling the names Elmer Irey sent up from Miami. remember In the report you gave me from Elmer Irey, If up I correctly he said he sent a lot of It of course, necessary to check the on the 28th of February When I was in Non names names the a time. In the names were to received I got the impression from McQuillan that he had York, records out was, in to the Bureau field, here which before took sending little the the Miami names. Why did it take so terribly just Mr. sent to on of the names went agents long the time Irey sent them up until were let in the field? Please intoit and distributed from havelook they March any McQuillan and event, all were which him to the special forwarded 6th of me a report not later than Saturday morning. 0 camell repeated tisting in the field on either the 6th or 7th. 0 Help289 288 0 3/23/45 March 23,1945. Commissioner Nunan Secretary Morgenthau Confidential I wish you would have 8 confidential talk with : FROM Mr Nanes Mr.Houghteling who expressed a desire to study the matter his opinion. Ha further giving saidweek he he thought would the let know thebefore early part of next whether suggestion would be beneficial or not. As soon as be does in and I would only he by the unions file- Secretary Morgenthau Pursuant to your pero of this morning I had a conference with Lawrence Houghteling over at War Bonds who looks after labor unions, and ask him what be would think of our taking it up with some of the unions in New York in the stores and let them spread the word around that there is a giving information. I have great confidence talk to him about It today before and he could you howPlease to approach do it if the reward approved you Lawrence go for up,tell it. Houghteling, unions if he agrees that it would be a good thing. I know that all the stores in New York are organized TO: I will advise you as to his conclusion. 0 as 291 Residentted 3/23/45 230 -20 $ October 1943 present statutory setup dating back many years. Such a program of consolidation, while highly desirable, would result only after a long TO: The Secretary FROM: Mr. Gaston There have been a number of factors responsible for considerable period of legislative adjustment. The second approach would be to strengthen, expand, and more clearly define the authori ty and functions of the Chief Coordinator of the Treasury enforcement change in our enforcement activity in recent years. These changes, agencies to an extent contemplating full executive and administrative many of which have occurred since you created the Office of the control over all enforcement facilities. In weighing the practical Chief Coordinator April 9. 1942, arise from: Repeal of the 18th aspect of these two possibilities it seens clear that for immediate amendment and the effect of this repeal on the Alcohol Tax Unit; action the second program should be pursued, bearing in mind that at changing conditions in Customs resulting from war activity; creation the opportune time in the future the necessary legislative changes of Foreign Funds freezing and policing of financial transactions of should be proposed to the Congress and their enactment urged. the enemy and Nationals; greater protection of the President arising Though lacking in a specific enumeration of powers, the instruments out of hazardous trips made by him and an accompanying sharp decline of authority under which the Chief Coordinator is now operating appear in counterfeiting; illicit use of parcotics at Military campa; and, broad enough to embrace many functions not heretofore undertaken. fraud possibilities inherent in complicated and technical changes in Under the terms of my memorandum of May 9, 1942, which bears your our income tax sources. These changes emphasize the need for a more effective and coordinated control of our enforcement activities, which I should like to recommend for your consideration and approval at this time. approval, the Chief Coordinator may request all enforcement agencies to submit important case investigations for his review and in the light of his authority to "Perform such other duties" he might direct any alterations or improvements in the handling of cases that The further coordination of the Treasury Department law enforcement activities can be greatly improved along two possible approaches. On appear to him necessary in the discharge of Treasury responsibilities. In the course of advising individual agency heads on matters the one hand, it is logical that all Treasury enforcement activities of policy, organization and personnel, he is clearly authorized to should be centralized in one organizational unit. This would involve recommend policy changes, procedural improvement and personnel changes in appropriation legislation and organic statutes, but would standards. Likewise, be may exercise final authority on proposed eliminate expensive duplication and overlapping of effort under the PRECISION TRADE MARK 293 292 C -4- 0 -3separately or specially as may seen appropriate in the personnel changes involving administrative positions. No qualifi- judgment of the Chief Coordinator. cation is placed on this authority as delineated in the May 9th 2. Recruitment of all investigative personnel. memorandum. However, there is actually divided responsibility and authority and it is believed that a specific enumeration of the 3. Training, including orientation of new recruits and refresher instruction for all enforcement offices. activities and authority would make for more effective coordination 4. Uniform classification of investigative personnel and better understanding between the Chief Coordinator and the heads based upon the Classification Act of 1923, and review of the enforcement agency services. of recommendations for promotion or change of assignment. Under the heading "Such Other Duties in the Interest of Coordination" the Chief Coordinator appears to be given blanket license for initiating and administering programs of coordination 5. Disciplinary action, including separations affecting investigative personnel. 6. Assignment of personnel between the several investigative in the entire area of Treasury law enforcement. Ideally, a police agencies in whatever manner deemed appropriate by the force operating within one Federal agency should function as a Chief Coordinator, and authority to call upon enforce- closely knit, integrated organization regardless of the fact that ment agency heads for the detail of personnel as may many separate statutes and regulations fall under its jurisdiction. be required. While local administration in matters in which the individual agency 7. Assignment of office space for field offices where such specializes can well be left to separate administrative heads, it action will facilitate closer coordination of Treasury is important to recognize that centralization of certain management and control functions would lead to more effective coordination. enforcement activities, including authority to consolidate, establish or abolish field offices. The Treasury program of coordination might be vastly improved by 8. Authorization of the use of joint telephonic, stenographic placing in the Chief Coordinator's immediate office responsibility and other service facilities, including the coordinated and final authority for the following administrative functions: use of automobiles wherever feasible. 1. Exercise of executive supervision over all investigations with unqualified authority to conduct any investigation TRADE MARK MICROSTAT MICRFM ROLL NO. 295 294 -5- -6- 0 C 9. Executive supervision over all organizational and procedural changes proposed for Treasury enforcement money should be a secondary consideration when planning or imple- agencies. menting a coordinated program of enforcement work. 10. Review and approval or disapproval of budget estimates covering investigative personnel and other services. Doubtless any move to reinforce the coordination program will raise major questions of policy concerning agency specialization and control of appropriated funds. For example, the Bureaus of Customs and Internal Revenue may argue in the case of Customs Agency Service and the Intelligence Unit that'the activities of these agencies are so closely bound to the broader function of tax collecting that they cannot satisfactorily relinquish control of any phase of administration Likewise, it may be urged that the lack of control over appropriated funds renders the Coordinator impotent to exercise a beneficial control over the separate enforcement bodies. As arguments against coordination, these contentions have little validity. The common denominator of all enforcement agencies is the fact that their singularly outstanding job is the prevention and suppression of criminal violations of statutes. For this reason enforcement offices have more in common wi th other enforcement offices than with their parent organizational body. They are all a part of one policing force which is presently broken into separate C organizational units. By the same token, the source of operating It may well be argued that the autonomous nature of the several separate units dissipates the strength of the Treasury Department's law enforcement activities. Few, if any other, Federal agencies operate with investigative staffs divided 80 completely as ours. While specialization any be a consideration, it seems significant that the Federal Bureau of Investigation handles investigations arising under an extremely wide variety of statutes. The same is true of the Inspection Service of the Post Office Department. The Treasury Department is hardly willing to admit a lack of versatility on the part of its investigative agents. In point of fact, many investigative activities now performed by Treasury offices cause them to work jointly with other Treasury enforcement agencies. For example, it is not COMMON for a Customs agent to initiate a case which is later turned over to a Narcotics man. In a broader sense, it should be recognized that even the Bureau of Internal Revenue does not, with its enforcement agencies, undertake all investigations incident to protecting the Internal Revenue as evidenced by the fact that the sections dealing with narcotics are administered by the Bureau of Narcotics. Thus, enforcement lines cannot be said to parallel major organizational demarcations. 297 -8- 296 0 progress with little change except that the general policy and t It is a matter of common knowledge that at various times the work loads of enforcement agencies are, for one reason or another, subject to wide fluctuation. Even a cursory examination of the Alcohol Tax Unit's activity over the past eight or twelve months would probably show that the volume of business has declined faster than the Unit's payroll would indicate. with the rationing of sugar and the declaration as critical of copper, etc., the enforcement work of the Alcohol Tax Unit dropped. Though much of the alack was taken up by an increase in permissive work, it is a fair comment to surmise that some offices of this Unit were and are overstaffed. Likewise, it would be interesting to know what effect the war has had on the enforcement activities of the Bureau of Narcotics. An intelligent program of coordination would level off the high's and low's between agencies, providing ample staffs for those with a heavy volume of work and reassigning employees not fully utilized. There appears to be no other way to effectively handle this problem than through a central coordinator's office with full authority and responsil bility. The fear that may be expressed by individual agencies that they will, by the expansion of the Coordinator's Office, give up their freedom of action in their own fields, is unwarranted. They will, in fact, relinquish no authority which will tend to damage ( their respective services. The major portion of their work will method of operation shall at all times be subject to the guidance of the Chief Coordinator and further it should be his privilege to reave completely from any enforcement unit any case which in his judgment warrants special handling that can only be achieved by vesting executive control at the level of the Coordinator's office. No attempt is being made to direct the Bureau of Narcotics or the Secret Service Division or the Alcohol Tax Unit in the manner in which they may elect to pursue their respective responsibilities under law, but rather an effort is being made to provide then with a consistently high caliber of investigative personnel, and to bind them together for the mutual aid and support of each other, based upon the broader interests of the Treasury Department as a whole. 3/23/45 298 6. TREASURY SPECIAL PROBLEMS. A. HOURLY AND PER DIEM RATES FOR SOME b. CLASSIFIED RATES FOR OTHERS 1. RECOMMENDS SUPPORT OF SENATE BILL 505, PROVIDING FOR 1.15% BASIC INCREASE FOR SALARIED FEDERAL EMPLOYEES UNDER THE CLASSIFICATION ACT OF 1923. D 2. NEED FOR ADJUSTMENT OF BASK SALARIES. 299 PAINTERS EXAMPLE 7. TELEPHONE INEQUITIES CONGRESS PAYS THEIR OPERATORS $1800 BASE. WE PAY $1440. a. NO SUBSTANTIAL CHANGE FOR OVER 20 YEARS b. RISE IN COST OF LIVING SINCE 1939---30% 0. CIVIL SERVICE REPORT SHOWD THAT DURING THE YEAR 1944, 61% OF THE FEDERAL WORKERS CHANGED JOBS OR LEFT THE GOVERNMENT SERVICE. RESULTS IN COSTLY RECRUITING PROGRAMS 8. TWO BILLS PENDING. JACKSON BILL IN HOUSE DOESN'T GIVE A BASE INCREASE DOWNEY BILL IN SENATE GIVES 10% INCREASE IN ALL BASE RATES UNDER THE CLASSIFICATION ACT. EXPENSIVE TRAINING AND RE-TRAINING TIME, AND LOWES EFFICIENCY AND MORALE. d. OVERTIME PAY IS NOT A SUBSTITUTE FOR A BASE 9. WE KANT TO GET THE ADMINISTRATION OFF THE FENCE AND ON THE RECORD IN FAVOR OF A BASE INCREASE AT THIS TIME. PAY ADJUSTMENT e. PRESIDENT'S 1946 BUDGET MESSAGE CALLED FOR "PERMANENT OVERTIME" LEGISLATION AND , "PROMPT REXXAMINATION OF BASE RATES". 10. DURING ECONOMY PERIOD SALARIES WENT DOWN 18% IT IS CONSISTENT TO BRING THEM UP NOW IN ACCORDANCE WITH THE LITTLE STEEL FORMULA TO RECOGNIZE THE HIGHER COST OF LIVING. 3. CIVIL SERVICE AND THE BUREAU OF THE BUDGET HAVE NOT SUPPORTED THE BASE INCREASE LEGISLATION BE- CAUSE OF OBJECTIONS RAISED BY THE STABILIZATION DIRECTOR. BUT, THE 10% INCREASE RECOMBENDED IS IN LINE WITH THE WAR LABOR BOARD'S "LITTLE STEEL" FORMULA AND IN HARMONY WITH THE NATIONAL STABIL- IZATION POLICY AS ANNOUNCED WHICH PERMITS A "COST OF LIVING* ADJUSTMENT NONE HAS BEEN RECEIVED BY THE SALARIED FEDERAL WORKER. a. GOVERNMENT WORKERS ON PER DIEM AND HOURLY RATES SET BY WAGE BOARDS HAVE HAD BASE INCREASES UNDER WAR LABOR BOARD STANDARDS. b. THE INEQUITIES WITHIN THE GOVERNMENT STRIKE HARDEST OIL THE LOWER PAID PEOPLE. 4. ALSO, THE 10% INCREASE WOULD MAKE THE GOVERNMENT'S TREATMENT OF ITS OWN WORKERS CONSISTENT WITH THAT GIVEN INDUSTRIAL EMPLOYEES. 5. NO SIGNIFICANT PAY INCREASE FOR SALARIED FEDERAL EMPLOYEES IN 20 YEARS, EXCEPT THE INADEQUATE OVERTIME ACT. 21.69 INCREASE FOR 20% MORE HOURS. 0 PRECISION MICROFILM TRADE MARK ROLL NO. 301 TREASURY DEPARTMENT : INTER OFFICE COMMUNICATION DATE March 20, 1945 TO Secretary Morgenthay FROM Charles S. Bell 04 Subject: Pay Adjustment for Salaried Employees TREASURY DEPARTMENT C INTER OFFICE COMMUNICATION During the course of the war it has become increasingly apparent that the "white collar" Federal worker has had to bear an unequal share of the economic burden. Basic pay rates for salaried employees have remained virtually unchanged, not only during the war, but for many years prior to the present conflict. After more than three years of war, the War Overtime Pay Act of 1943 represents the only relief that salaried workers have been given. As you know, this Act does not establish true overtime pay, and in even the most favorable instance the employee receives only a 21.0% increase in return for 20% more DATE March 22, 1945. TO Secretary Morgenthau Charles S. Bell Herewith is proposal mentioned to you by Dan on pay adjustments. I have also cleared this with Mr. Gaston, who is solidly in back of it. If you do decide to take it up at Cabinet. you might wish to check with Fred Vinson and William L. Davis on their stand. 2 working hours. This failure to establish true overtime rates or to adjust the base rates is inconsistent with the Federal treatment of outside industrial workers. The Overtime Act now in force for salaried employees can by no means be regarded an adjustment to compensate for the increased cost of living which today is reported by the Labor Department to be 30% above the level of mid-1939. This increase in the cost of living has, of course, worked the heaviest hardships on the lower salaried workers and has become more acute as the war progressed and lower cost goods disappeared from the markets. A particularly troublesone problem has arisen from the fact that there are many employees on the Federal rolls who are paid on hourly or per diem rates set and adjusted to prevailing industrial standards by wage boards. Generally, these workers have had basic wage increases under the terms of the "Little Steel" formula. In our own Department, employees of the Bureau of the Mint and the Bureau of Engraving and Printing have received wage adjustments under the War Labor Board's policy. ( PRECISION TRADE MARK MICROSTAT -2This limited use of industrial standards has aggravated the already bad situation where we have within the Treasury both skilled and unskilled workmen doing identical work for alarmingly different rates of pay. For example, salaried, classified painters on the force of the Superintenden of Treasury Buildings receive $1860 per annum, plus overtime, or a gross of $2260 per annum, while painters on & daily rate in the Bureau of Engraving and Printing earn approximately $4000 per year. In these circumstances, it is extremely difficult to maintain a competent working force under the Superintendent of Buildings. C Further, union craftsmen, such as Plate Printers, have been able to exert the necessary pressure to secure pay increases to compensate for the higher cost of living. In some measure the union-backed, organized "white collar' workers outside the Federal Government have likewise been able to gain pay adjustments. Telephone operators in commercial establishments have recently received pay increases and those Government activities not subject to the Classification Act have likewise raised the salary of these workers. Yet, there is nothing we can do to remedy these inequalities for our operators under prevailing Civil Service rulings. Thus, of all the nation's workers, the salaried Federal employee is compelled to suffer proportionately the greatest financial hardship. The President recognized these inequities in his message to Congress accompanying the 1946 Budget, stating in part, recommend a prompt reexamination of Federal salary rates with a view to making adjustments consistent with the national ROLL NO. -3I To me, the objection that we would be setting a poor example is very weak for the reason pointed out before namely, the salaried employees in the Federal service have not received the benefit of the permissible 15% increase under the War Labor Board's "Little Steel" formula. Actually, the present position of administration leaders does not seen to be compatible with the President's statement asking for fair treatment of all Federal workers. Two bills aimed at remedying this situation are now pending in Congress. H. R. 2497, introduced by Representative Jackson is based on the recommendations of the U.S. Civil Service Commission and provides for significant amendments to the Classification Act of 1923, but it fails to cover the basic increase point. The Senate Bill, S. 595 introduced by Senator Downey Is a companion measure except that it carries a section calling for a 15% increase in the base rates established under the Classification Act. Admittedly, not all of the inequalities in the pay system of the Federal Government can be remedied by either piece of legislation, but from our own experience in the Treasury Department, I am convinced that the Downey Bill, if it becomes law. will result in alleviating many of the existing diffi- culties. There are benefits attaching to Civil Service status which are not enjoyed by workers under the per diem or hourly rates and, even though a 15% increase for the salaried people may not completely close the gap in terms of wages, It Is believed that it will so narrow it as to avoid much of the trouble we are now experiencing. I have learned from the Bureau of the Budget that neither the Civil Service Commission nor the President's Administrative Assistant on Personnel, Mr. McReynolds, recommended increasing It seems particularly important that the Administration support in Congress that legislation which will most nearly achieve the result apparently desired by the President, as indicated in his Budget message. It appears that the Bureau of the Budget and the Civil Service Commission placed too much emphasis on the stabilization factor when they fail to support a basic pay adjustment. The 15% set up in the Downey basic rates because of what seems to be the none-too-well founded psychological objections raised by the Stabilization Director. policy and does no more than offer the Federal employee treatment approximating that given the industrial worker. stabilization policy. Except for this statement, no adminis- tration spokesman has gone on record with affirmative support for an adjustment in the basic rates of salaried employees. Bill is quite clearly In line with the over-all stabilization 303 MICROFILM ROLL NO 305 THE SECRETARY OF THE TREASURY -4 WASHINGTON that the administration should not remain silent head Feeling of basic increases, I am urging that you, as on the point Department, employing approximately 95,000 people, of a large the chief fiscal officer of the Federal Government, of MEMORANDUM FOR THE PRESIDENT and place as before the President a memorandum along the stand lines on the attached, which recommends & strong affirmative Senate Bill 595. In your Budget message to Congress for 1946 you called attention to the many inequities existing In pay rates received by Federal workers. You recommended that Congress enact permanent overtime legislation, and that base salary rates be immediately reexamined with the view toward making adjustments compatible with the national to compensate We now year war stabilization living. are policy in the fourth for of the higher and, cost in the of light of the Federal Government's treatment of commercial workers, it seems obvious that the time for base rate increases for salaried Federal workers is long overdue. Early in this session of Congress bills were intro- duced in the House and in the Senate designed to remedy the situation described in your message. The House bill, introduced by Representative Jackson, is based on the recommendations of the Civil Service Commission, concurred in by the Bureau of the Budget, and does not include any provision for the adjustment of base rates. The Senate bill, introduced by Senator Downey, is a companion measure except that it also calls for A 15% increase in the pay rates established by the Classification Act of 1923, as amended. and a It is my understanding that the Civil Service Commission, and the Bureau of the Budget, did not sponsor, supported, base pay increase it for to the be reason thathave thenot Stabilization Director considered psycho- logically inadvisable from the public relations point of view. This objection was raised despite the fact that a 15% upward adjustment in base rates is clearly compatible with the "Little Steel" formula. ( 307 306 -2MAR 1945 From my experience with a large agency employing nearly 95,000 people, I am convinced that It is a false economy for the Executive Branch to fail to support legislation calling for an immediate adjustment in base pay rates. We have lost and are continuing to lose the serv- ices of many trained and experienced people because they cannot meet the higher costs of living under a wage pattern that has remained virtually unchanged for over twenty years. Expensive recruiting and training programs are but one of the unfortunate results of this shortsighted policy. Of all the workers in the country today perhaps no other single group has had to bear so large a share of the financial burden of this war as have the salaried Civil Service employees. It seems significant to note that during the depression years, as an economy measure, salaried employees received a temporary reduction in base pay, amounting in total to 15% Thus, there was established a precedent for moving wages downward. By the same token, an upward adjustment can be supported today in the light of the higher price level of cost of living commodities. It is with a view toward promoting the objectives of good government, and decent treatment of Federal employees, that Y an urging that the Administration go on record at once as favoring the provisions of Senate Bill 595 calling for a 15% adjustment in base rates. Faithfully yours, To All U.S.D.A. Motion Picture Depositories: As part of the expanded visual aids program to sell Far Bonds to the American people you recently received supply of 1600 prints of the Farm War Bond motion picture treiler entitled "Your Future Security.' This film was for the Treasury as contribution to an "all out" can- produced by the Unit ted States Department of Agriculture peign to sell far Bonds to farmers. To will appreciate your cooperation in giving this film as wide distribution as possible. No doubt you already know many of the reasons why farmers should put every possible dollar into Var Bonds. First of all, farmers America victory, needs the will money have to help big win Far the Bond war. investment Then, after to assure them of funds for better farming and better living. These are bonds to win the war and secure the peace. This is the first strictly fare Bar Bond film. It has been produced in response to . demand from agricultural areas for picture that would feature the special reasons for fare buying. Shown at every rural meeting where most motion pictures are used, this trailer should make effective sales appeal. It will back up the splendid work that is being done by farm Mar Bond solicitors in every Yer Loan. Both the Treasury and the Department of Agriculture wish to thank you for your cooperation in distributing this film. Sincerely, (Signad) WPsmb capital thank 309 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION TREASURY DEPARTMENT Date INTER OFFICE COMMUNICATION Date TO Secretary Morgenthau March 23, 1945 TO Secretary Morgenthau FROM Joseph J. O'Connell, Jr. FROM Joseph J. O*Connell, Jr. March 23, 1945 For your information For your information It is just barely possible that Secretary Ickes, in his capacity as Petroleun Administrator, may speak to you today about a recent decision of the Circuit Court of Appeals involving the treatment for tax purposes of intangible drilling expenses in the oil business. For years we have had a regulation which interprets the law as permitting persons drilling for oil either to spread the expenses over a period of years or to treat them as current expenses. The other day, out of a clear sky, the Circuit Court of Appeals held that our regulation is invalid, and that such treatment is too favorable to taxpayers in the oil business. The Court held that the proper way to handle such situations is to require the company to spread the expenses over a period of years, thereby eliminating 8 double deduction. Needless to say, the oil industry is up in arms. Considering the lush treatment given them through percentage depletion, it would seem to no that anything which tends to subject a little more of their income to tax is net gain from our point of view. However, Mr. Ickes may feel differently and would, I suspect, take the view that any treatment of oil companies less favorable than the type they have been accustomed to will practically lose us the war. The purpose of this memorandum Is merely to acquaint you with the general situation. You will be interested to know that the Bureau of Internal Revenue has ruled that amounts paid for goods in excess of established O.P.A. ceiling prices may not be included as a part of the cost of goods sold for income tax purposes. The announcement of such a policy will, we hope, be helpful as a deterrent to black market operations by wholesalers, retailers, and other mercantile establishments. PRECISION TRADE MARK MICROFILM MICROSTAT ROLL NO 311 310 MAR 23 1945 MAR 2 1945 My dear Mr. Secretary: Further reference is made to your letter of March 3, 1944 (symbols FMA 702.0641/129) referring to correspondonce between your Department and the American Embassy in London in regard to the advisability of proposing negotiations looking to a tax convention between the United States and the United Kingdom, and to letter dated March 31, 1944, from this Department in reply to your letter of March 3, 1944. In the letter of March 31, 1944, this Department designated its representatives to participate in the suggested meeting in England looking to the adoption of such convention. As you are already sware such discussions took place in England beginning In April 1944, were temporarily suspended in July, and were reaumed at Washington in November of last year. As a result of such discussions, there has been developed the text of a proposed income tax convention between the two countries. Such text, framed in collaboration with representatives of your Department and those of the British Inland Revenue Service and of the British Embassy at Washington, has been carefully considered by and found acceptable to this Department and is transmitted herewi th with the recommendation that it be approved. In the event that further correspondence relative to this matter is necessary, please refer to CC:LAR:PJM:A- My dear Mr. Secretary Further reference in made to your letter of March 3, 1944 (symbols THA 702.0641/189). referring to correspondence between your Department and the American Embassy in Lendes in regard to the advisability of proposing negotiations looking to tax convention between the United States and the United Kington, and to letter dated March 31, 1944, from this Department is reply to your letter of March 5, 1944. In the letter of March 31, 1944, this Department designated 100 representatives to participate in the suggested meeting is England looking to the eloption of such contration. As you are already aware, and discussions took place is England beginning is April 1944, were temporarily expended is July, and were a at Washington is November of last year. As . result of such discussions, there has been developed the test of . proposed income tax convention between the two countries. Such test. franed is collaboration with representatives of your Depart- most and these of the British Island Revenue Service and of the British Rabasay at Washington, has been carefully considered by and found acceptable to this Department and is transmitted herewith with the -ties that " be approved. In the event that further correspondence relative to this after is accessary, please refer to Very truly yours, 289342-4. Very truly yours, (Signed) H. Morgenthau, Ja Acting Secretary of the - (Signed) H. Morgenthau, Ja The Hosorable The Secretary of State Washington, D. O. The Honorable The Secretary of State Washington, D.C. Enclosure Enclosure File to o 'Connell MARK 313 312 0 MEMORANDUM FOR THE SECRETARY. Memorandum for the Secretary. March 23, 1945. Mail Report weeks. The ratio of favorable comment to unfavorable is about 3 to 1, but there is still very little real this office. A fow copies of wires or letters to discussion of the program in the letters addressed to From the correspondence viewpoint, the Seventh Drive was formally opened this week. In addition to the usual run of romotional suggestions, there were 100 replies by mail to the telegram sent on March 13 to the presidents of companies employing more than 1,000 persons. One record for the Seventh Drive has already been set. in that only one of the 100 replies objected to the expense of a telegram for that sort of message. Two or three executives spoke of the necessity for reducing quotas assigned their companies, but all in all the replies had one theme, cooperation and success. This week there were fewer songs for use in the Seventh, but slogans and other ideas continued to arrive in numbers each day. One firm, a shipyard, wired that it had already exceeded its quota for the Drive. For the third consecutive week there were an even dozen complaints from families of service men whose bonds had not been received. Series E Bonds sent to this office for redemption rose to 22, more than half of them bearing Kentucky postmarks. Tax mail continued to be light and rather passive. Non and then a business firm expressed uneasiness about the proposed capital gains tax, and also a few individuals opposed the suggestion that interest on Government securities be treated as capital gains. Although only 2 or 3 writers asked for 1943 refunds, this problem is now taking on new dimensions, for there were several pleas for return of 1944 overpayments. Correspondence about the Bretton Woods proposals followed exactly the same lines it has in preceding March 23, 1945. Congressmen were sent for Treasury Department Informa- tion and these were all favorable. C 314 0 General Comments -2that our Government is so well prepared to educate mittee and inform the people on these vital topics. Comefficient and I very much appreciate your prompt and My response to our request for Herbert Barry, Barry, Wainwright, Thacher & Symmers, atten- 72 Wall Street, New York City. May I call your tion to a matter that may seem of little importance, but which is highly important to an individual citizen, As can assure you that it will be to a matter of have fact,literature I believegood we sufficient now use. material we put and and the handling of which does not impress me as reflect- matter Women's Lawyers Guild, but also for the Committees of of the annuity or pension for Mr. Warrington Dewson, formerly employed in the American Embassy in Paris. which Bar andmatter. the Chicago Bar Association the are Associatio studying this ments and this was paid through the Embassy up to time we entered the war. He has lived for years at 2 Rue de la Paroisse, Versailles, and has survived the conditions of the war and the occupation by the Germans. W. Colorado. Lewis Abbott, Colorado College, Colorado not only for the Committee of the National ing credit on the Treasury Department. It is the Upon his retirement, on account of ill health, he becan entitled to an annuit payable in monthly install- the He is, however, in frail health and needs this pension, the payment of which is due him. . Such information as have would indicate that the amount in arrears is something between $2,500 and $3,000. have repeatedly asked for action to relieve this situation.* I appreciate that it might involve some time to ascertain the exact amount of arrears due him, but I shall invoke good of fices to secure the prompt resumption of the this I feel that there is need and desire Springs, inform community for a series of talks to educate in national the public on the plans for the Bank for and Fund, Settlements, the Conference. International Monetary Interof the Brettonand Woods and College is considering sponsoring a program Colorado on 0 related monetary issues. and would like these these If the Treasury Department Is providing to know the State subjects, in a manner similar to the speakers on Department on the Dumbarton Oaks program of My feeling is that, at least in this part Agreement. your monthly payments as they now become due. Formerly they country there Is a deep ignorance in regard of the significance out of the two plans. Some of our local to the bankers are of sympathy with the position taken other channel, for example, the Paris office of the American in Banker's Association and would be interested by the were transmitted through the Embassy and that could still be done, although I should be glad to have some Guaranty Trust Company of New York, which has done such & speaker as I have suggested. business with and for Mr. Dawson. A. on doing C. Rowe, San Francisco, California. Congratulations Mrs. William R. Barbour, New York City. Thank you for very prompt reply to my request for data on the Bretton your Woods Conference. have begun my study of the pamphlets, which I find clear and of use to even & lay person. Provus, Attorney at Law, Chicago, Illinois. which I have Ruth received the generous amount of literature just sent me on the Bretton Woods Conference, at my reyou quest. It is most gratifying and reassuring to know can a fine job1with one agree of the with toughest of undertake. certainly jobs aman the Senate passing on the Bretton Woods your position would prior to the United Nations Conference. Believe Conference this stand have a decided on the delegates to our for a real lastingeffect peace. 315 316 317 -3- -4- 0 attached Wynn Burton, Harlingen, Texas. The copy of my letter of February 14 to Mr. Harry P. Hornby, Collector of Customs, District 23, Laredo, Texas, is self-explanstory. Mr. Hornby has not yet had the courtesy to reply to it. (Re: importation of liquor from Mexloo.) It is obvious that either the Customs Office at Brownsville or the one at Hidalgo has misinterpreted the law. It is my opinion that the misinterpretation was at Hidalgo, and that it was decision on the particular quirk of the law in question. But even if it is right and I am wrong, am sure that I am entitled to a decision from someone with more authority and less bias than Mr. Hyde. And since my taxes, if wife's taxes, and my mother's taxes are helping to pay the salaries of these Inspectors, I thoroughly resent the flagrant discourtesy and disregard of the rights of citizens that they have demonstrated, and that the Collector of Customs for District 23 has shown by ignoring my letter written to him more than a month ago. made deliberately in order to save the personnel there the work of filling out a few declaration forms. I want you to know these two additional facts In any that case, would not have brought up if the Collector of Customs had had the courtesy to reply to my letter. My mother went into and returned from Mexico at Mrs. A. J. McGuire, Executive Secretary, Minnesota United Nations Committee, St. Paul, Minnesota. May I express my great pleasure in your talk at the Nicollet Hotel in Minneapolis recently. We have received many favorable comments on that meeting. will Hidalgo with friends of hers, and not with my wifegentleand me. She is 70 years old and is in every may a woman. Her only purchases in Mexico were & couple of trinkets with a total value of five or six dollars. It was her first trip across the border, and she declare had the mistaken idea that it was not necessary to anything except liquor, so she told the Customs Inspector that she had nothing to declare. Before her friends could correct her, the Inspector looked in her purse and saw the trinkets there. She was allowed to bring in $100.00 worth, and in view of that, it should have been apparent that she was not attemptany snuggling, I suppose the Inspector would have been ing within his Fights in assessing a penalty for a false declaration; but instead, he proceeded to bawl her out and tell her that it was just such liars as she was that made his job a hard one. His principal concern about what he preferred to consider a dellberate falsehood was that it caused him a little extra work. I do not know that the Inspector referred to above was Mr. Chester Hyde, but it sounds like him. In my conversation with him, I was particularly careful not to make any statement that was not entirely truthful, and although it WILD pretty difficult to do It, I managed to control my temper. Mr. Hyde adopted a generally C abusive attitude toward my wife and me, and accused us of being liars and cheats. It is my opinion that the Hidalgo Customs Office is in error in its 0 it be possible to get 6 copy of your speech? ... I am sending you herewith a letter which is going to the total membership of the Minnesota United Nations Committee on behalf of the Bretton Woods Agreement. We have had many discussion on this and are receiving requests from all over the state for speakers on the subject. Dr. John P. Marble, The Franklin Institute, Philadelphia, Pennsylvania. It gives me great pleasure to enclose U. S. Government pay check In the amount of $167.88 as a further contribution. I only regret that I have not been financially able to return all pay checks received for war work. but I have had to hold some back due to the necessity of paying income tax on the full amount of my salary, regardless of the fact that the greater portion is returned to the U. S. Government before I receive any benefit from it. I hope that in the course of the future I will be able to pay out of I private income the amounts so withhold at this time. ( 319 318 -6- -5- dollars. # . I cannot think of American money being debased as it is in this enterprise ithout wanting Ernest L. Owen, Publisher, The Post-Standard, Syracuse, New York. T am very appreciative of your fine letter of March 15th commending us for our editorial in The Post-Standard of February 14th. I fully agree with you that the public will support the Bretton Woods Agreement if It is fully informed. The public in this area has shown keen interest in this subject and we expect to further elaborate on it in future editorials. to kick the dickens out of somebody. The average private. after be has made his allotments, paid his Insurance and bought a haircut at the P.X., if he has P.X., will have certainly not more than ten or twelve dollars left. That's about five hundred france. *There is a way to fix it and fix it fast. If you will find some way to pay us all in American ourrency, real American Greenback Bills, not gold seal currency of red dot or pink smear or anything else than just exactly the Ind we get at home, the American soldier will help break the black market and take care of himself very well, thank you. I do not know & man in the A. E. F. who does not feel that his country is cheating him and that be is being robbed of his pay. Mrs. G. J. Martin, R.D. 2, Doylestown, Pennsylvania. If I were criminally inclined, I should make it my business never to miss a single column of Mr. Walter Winchell's. There, under the heading of general news, is disseminated such items of information as the recent one to the effect that immediately after the war our currency will be issued under a new design, thus invalidating hoards of cash now being piled up by black marketeers and their fellow travelers. This is not the first such tidbit to in Mr. Winehell's colum, as the Secret Service must appear be only too well aware. As a columist he is entitled to Inform his readers of his opinions, but thoughtful people re- member his abrupt and never fully explained discharge from the Navy in the present War, and I, for one, am inclined to wonder whether his own resentment over this has made him ignore entirely the self-imposed censorship that causes other writers to suppress information when it could be used only to the country's detriment. Can nothing be done to stop the mn? Senator Guy Cordon forwards the following excerpt from a letter addressed to him by a member of the Arned Forces in Europe: "The big thing that really troubles the forces is the fact that, as you well know, the American dollar here is worth less than twenty cents at the rate of exchange. I have heard all of the many arguments about it, but it is a senseless picture. saw & small comb in a window the other day marked 175 francs. Just a little, ordinary pocket comb of the twenty-five cent variety -- 175 francs. That, my dear comrade. is four 0 PRECISION MICROSTAT TRADE MARK MICROFILM BOLL NO. 321 320 3 Favorable Comments on Bonds Mrs. Mae N. Christensen, Route 2, Leola, South Dekota. Accept my thanks and appreciatic for issuing a dupli- cate bond. If I find the one I lost, will immediately return this one to you. Fred W. Buck, Co-chairman, St. Louis County War Finance Butler Committee, Duluth, Minnesota. (Telegram) Walter Shipbuilders, Incorporated, Riverside Yards, Duluth, has reported that at 4:00 P.M., March 16, its employees had subscribed in cash and payroll deductions $537,199 against . Seventh Loan quota of $525,000 The employees of this firm, in exceeding their quota so early, have again established an enviable record among industrial firms in the country. We respectfully suggest & national recognition for this excellent accomplishment. It is our hope that Butler Yard Duluth may be the first industrial plant to have met its Seventh Loan Quota. ... George W. Kleiser, San Francisco, California. On behalf of Foster and Kleiser Company, its various branch managers and other personnel who have been active in the various Treasury War Loan Bond Drives, I wish to who express If appreciation of the very fine telegrams sent by you to the members of our organization as well as to myself. I an confident that the citations will be greatly appreciated and highly prized by those receive them. It is a pleasure to be of assistance to you in accomplishing the important job of financing the war. You may count on our continued cooperation and support. James T. Shea, Attorney and Counselor at Law, Glasgow, Montans. Today, we enjoyed the happy experience of cashing two United States Savings Bonds of the maturity value of $500 each, both purchased in March 1935. I may be in error, but 1 believe we are among the first in this community to so cash in any of said bonds and immediately convert then into War Savings Bonds, for with the proceeds we purchased one $1,000 maturity value War Savings Bond added & little cash and purchased an additional $500 maturity value War Savings Bond. We were proud to hav been able to do that. 323 322 -9- 10 1 Unfavorable Comments on Bonds We have in our possession a bond which is apparently worthless because the local Federal Reserve Bank of San Francisco refuses to re-issue it to the beneficiary unless and until the beneficiary produces future. R. Grinnell, President, Grinnell Corporation, Providence, Rhode Island. This morning I received your telegram of March 14th soliciting the aid of this company in furthering the sale of the "E" Bonds, and 8.8 usual you may count upon our cooperation. But, may I ask why It is necessary for your office to send a 119 word night letter on a subject which is several weeks in the future? Presumably you have sent this same night letter to thousands of other firms when a letter would have been equally effective. Such a waste of the taxpayers' money, coupled with the congestion of the already overloaded wires of the country does not tend to inspire enthusiasm a certified copy of the certificate of death of the owner, which the beneficiary refuses to do as a matter of principle believing that the Treasury Department should not require the owner of a bond to go to the expense of procuring said certificate. Inssmuch as the Social Security Board has paid in full all claims resulting from the death of the owner, it would appear that satisfactory proof of death is matter of record with the Federal Government. Particular attention is invited to the fact that enforcement of arbitrary and unnecessary regulations in the handling of these securities detract considerably from their value as an investment. It is generally believed that the War Bonds in the collection of still further funds. This is cer- tainly a horrible example of Government waste and in- efficiency. If you have any explanation of the necessity for these telegrams I should be glad to be informed of it. C John Johnson, Duluth, Minnesota. Your 7th War Loan sure will be a flop, understand, unless the butcher shops get some meat. No meat here Saturday. No chickens eggs scarce. What in hell does Roosevelt mean by starving the bond buyers of the United States to help out those at foreigners, the British and Russians? Charity begins home. No food, no bonds -- take your choice! P. A. Williams, San Francisco, California. ... It has come to our attention that upon occasion when bonds were presented for redemption before maturity the certifying officer at a local bank refused to certify then upon the basis that the date of issue and the date shown in the issuing agent's stamp differed by more than 30 days. As there have been numerous cases where delay in issuance has been brought about by congestion in bond issuing agencies, particularly those of the War Department, and the bonds when finally issued bear an effective issue date some months prior to the date of actual issue, it appears that action should be taken to correct such action In the 0 are an investment of integrity and simplicity and that at no time will the owner find it necessary to become involved in red tape. If your subordinate agencies do not exercise some discretion in the application of the regulations, the volume of sale will be affected adversely. Senator H. M.Kilgore - West Virginia. Mrs. Erma Hundley of Graydon, West Virginia, informs me that she received a check in the amount of ten dollars, payable to her son. This boy was killed in action and the money was the amount he had set aside to purchase War Bonds. Inasmuch as it was not sufficient to buy a bond, the Office of the Fiscal War Bond Division, 366 West Adama Street, Chicago, Illinois, sent theTreasury money to Hundley. She, to the forMrs. payment. It was that she returned in turn, sent to her it stating would have to informs make affidavit that she was his mother. This she was done more than two months ago. I shall appreci- me ate your advising me what is holding up this check and indicating when she may expect to receive her money." - TRADE MARK 325 324 11 Russell A. Robinson, Attorney, Fremont, Nebraska. Since I to unable to contact people and urge them to purchase bonds, without being a complete hypocrite. I wish to advise you, Sir, as Secretary of the Treasury, that while the overwhelming body of union men are loyal and sincere, there are many leaders. and some unlon men. who are not sincere or patriotic, and whose jurisdictional strikes, and similar squabbles, seriously Interfere with the war effort. In the face of repeated and cumulative instances of this kind the President has never, in any way, directly criticized a leader or union: on the other hand, he has actually praised one whose mortality lies on percent, them by referring etc. ... son, to Ky them as less than one-tenth of Leyte, sent there by 1-. Roosevelt, did not "strike", but he is not supported in his effort and his death by you who condone the consistent and injurious strikes by certain leaders and union groups. ... You know, it you are honest, that every soldier has the same right to "refuse" as does any striker. I shall continue to purchase bonds as have in the past, but I shall have no part whatsoever in helping in any future "bond drive' unt11 this hypocritical Administration changes its tactics and makes a sincere effort to "lead" the Country in a genuine and unpolitical campaign in support of the war. 12 - Favorable Comments on Taxation the the Joseph S. Alford, Nahant, Massachusetts. I wish to thank you and other members of the Treasury Depart- I have fondly hoped years in the income tax forms clarified, and especially that the calculations be a ment year 1944. Instructions for the simplification in for income would reduced tax that be for the to minimum. All these high hopes have been realized in the tax form I completed in ten minutes tonight. I feel that the jot you and your associates have done reflects credit on the Treasury Department. 326 327 0 - 13 - AMBASSADE DE BELGIQUE Washington, March 23, 1945. Unfavorable Comments on Taxation Karl M. Davis, President, The Salina Supply Company Salina, Kansas. As a small businessman and an American Citizen, I am glad of the opportunity to pay all the taxes necessary to prosecute the successful conclusion of the war and for ordinary expenses to run the inportant and necessary branches of the Government. the other hand, with the increasing of the useless bureaus and office holders throughout the United States, it is becoming quite a problem for the ordinary business- My dear Secretary, On I have just arrived in Washington and would be man. . As President of this Company and wher of about 40% of the stock, let me say, first, that the earnings of the Corporation are taxed to such a point any that their net earnings left are very small. Then, very happy to pay you a visit and chat with you for a few minutes. dividend paid out plus earnings are taxed again, and I do not intend to discuss business at this there is not much left. Just at this time am having to borrow money to pay the income tax due tomorrow. stage, but it would be a pleasure for me to renew The double taxation feature is a vicious thing and against which it is almost impossible now to start, build and expand a small Corporation. These vicious taxes should be adjusted and reduced, not only for the present generation, but for the future, because if they arent, we will become a nation of easants in the near future and by winning the war, we will have lost our birthright and our Country, unless some steps are taken to safeguard the small ordinary American o our acquaintance, interrupted since the and of the Bretton Woods Conference. I am leaving for Canada, but will be back Tuesday evening and would then be at your disposal at any time. businessman. Sincerely yours, Gutty The Honorable Henry Morgenthau, Secretary of the Treasury, Washington. ( 329 SECRET 328 TREASURY DEPARTMENT MONORANDUM FOR THE FILES INTER OFFICE COMMUNICATION DATE Subject: Conversation in Switzerland with Mr. leXittrick, President of the Bank for International Settle- March 23, 1945 ments. Secretary Norgenthau Orvis A. Schmidt Mr. MeKittrick called to see Mr. Currie while we were in Switzerland during the recent negotiations and upon learning that I, & representative of the Treasury Department, was & member of the delegation, asked to talk with me. I thought you would be interested in the It USD clear that Mr. WeKittrick WAS fully sware of the nanner in which he and the BIS are regarded by the Treasury Department. He expressed the hope, however, that If persons In the Treasury Department understood the real role that he and the BIS had played, this attitude night attached nomorandum of V conversation with 1c- Kittrick in Switzerland. I was surprised that 6 voluntary recital intended as a defense of the BIS could be such ILD indietment of that Institution. change. 0 Kr. VeKittrick began by explaining to me the origin of the BIS and the role that It had played in the premar world. He pointed out that the Board of Directors consisted entirely of central bankers and be said that the BIS had be- useworld. his own "s sort of central year the BIS C central to a dinner in Easle and in other ways Attachment bankers come, to of bankers the words, Every club had this of invited the and and to the had served to bring together the central bankers fuse then into a little group of like-minded tien who understood and trusted one another. okittrick emphasized particularly the attitude of autual trust and confidence that had grown up among this group and the realization held by all of then of the importance to the group of faith in each other and of & conduct on the part of each that would warrant this faith pecardless of the condition of the world or of the constantly changing political relations between their respective countries. McHittrick stated that only by understanding this basic relationship could one understand how the FIS had been able to survive during this mar and to conduct its affairs in the canner In which he had arranged them. E.e then explained that at the outbreak of the war he had personally contacted all of the Board members of the BIS, which, of course, included representatives of countries on both sides in the war, MICROFILM I -2- ROLL NO 331 330 and had gotten from them a vote of confidence in himself and agreement that the BIS would be strictly neutral. The limited operations of the bank which were necessary consisted of collecting amounts owed by various debtor .countries and the distribution of earnings 02 its capital. These operations and any other necessary business were to continue by having the necessary papers prepared at Easle and then cleared by MeKittrick personally with each of the necessary officials of the bank. In this manner the back has continued to operate during the past five years, and MeXittrick emphasized that in no case had there been any disagreement with any of the operations curried on and he had never been under any duress or pressure from any of the belligerent countries which were members of the bank. McKittrick cited as an instance of the offectiveness of his own influence an attempt by the Germans to replace a Belgian member of the Board of Directors after the Gorman occupation of Belgium. MeKittrick stated that he refused to permit the change and, accordingly, the original manber continued to occupy the position. C McKittrick had some figures showing the amounts of payments made to the BIS during the course of the year as compared to the amounts distributed, and contended that the Gernans had paid, in Swiss france, more to the BIS than they had received from the BIS. (As I recall, the amount so paid Was 4,000,000 Swise france or about $1,000,000.) MeKittrick thus contended that the BIS had weakened the Swiss france position of the Cermans by depriving them of such foreign exchange. share the Hasi sympathies or Nazi point of view but who are so important to the Nazia and to the management of Germany's finances because of their technical ability that they continue to hold important positions. The existence of this little group is the keystone in the explanation of Germany's conduct with respect to the BIS. According to MoKittrick, there wore probably three factors influencing this little group in its conduct toward the BIS. The first was the influence arising from their membership in this "bankers' club and their implicit feeling of the importance of dealing squarely with other bankers. The second WGB the fact that this group had felt from the beginning that Germany would lose the war; that after defeat there would be a period of political, economic, and financial con- funion In Germany; and that by playing the game squarely they might in this period of confusion energe as 6 factor in shap- ing Germany' future destiny. Thirdly, in addition to the foregoing insiderations, this group understood that in order to rehabilitate and reconstruct Germany after defeat it would 0 Germany. I asked McKittrick whether he would name any of the people who compose the little group to which he constantly referred. The only person whom he named is 8 man named Puhl, who is one of the two too vice presidents of the Reichsbank. VeKittrick explained that although Funk had been made head of the Reichsbank, he knew nothing about financial matters and he had described and had continued to make payments to the BIS. I made the observation that they must have felt that, for one reason or other, such action was in their own interest. 10Kittrick's explanation was substantially as follows: In order is only the titular head. Under Funk are two top vice pres- idents, one of whom is a asi appointee who likewise understands nothing about the operations of the bank and only looks after to understand the conduct of the Germans toward the DIS, one rust first understand the strength of the confidence and trust that the central bankers had had in each other and the strength of their determination to play the game squarely. Secondly, one must realize that in the complicated Cornan financial netup certain men who have this central bankers' point of view are in very strategic positions and can influence the conduct of to Mc/ittrick, there is a little group in Germany who do not be necessary that be able to float loans. This little group of bankers felt that the role that they were playing would maintain their contacts and trust with other important banking elements so that they would be in & stronger position in the postwar period to negotiate loans for reconstruction of I asked KeKittrick why, in his opinion, the Germane had been willing to allow the BIS to be run in the manner which the Cerman Government with respect to these matters. According -3- 0 matters of interest to the Party. The real operating head of the bank is Puhl, the other vice president. Puhl was described by MeKittrick as & career banker who had been with the Reichsbank for some twenty years, who does not share the asi point of view, and who is the key person in explaining Germany's attitude toward the BIS. (I night also point out that in dis- o cussions with the Swiss National Bank concerning their purchase ( 333 332 0 of gold from Germany, the Swinn National Bank said that in order to be sure they were not obtaining looted old they had requested a member of the Reichabank, whom they regarded to be trustworthy, to certify that each parcel of gold which they purchased had not been looted. The person who had done this certifying was Puhl.) During the course of the conversation, I mentioned the gold which the Goreans had looted from occupied countries and, at one point, asked McKittrick directly whether he knew what had happened to the gold which the Belgians had had on deposit with the Bank of France and which had been taken by the Certains. MeXittrick replied that he knew where it was, that he would tell me, but that it was of extrene importance that word did not leak out. VeXittrick then explained that this gold was still held in the vaults of the Reichebank; that he was sure It would be there when the took Berlin; and that Puhl was holding it there for return to the Belgians after the war. 1c)Ittrick explained that the BIS had also received payments in gold from the Germans during the war and that when the mar U.S. over we would find all such gold carefully segregated and documented so that any of It which may have been looted could be readily identified. He said that when gold was offered to the BIS be had thought that it would be better to take the gold and hold it in this fashion rather than to refuse it and let the Germans keep It for other uses. McXittrick also cited BE an instance of the manner in which bankers had kept their word with the BIS, 0 trans= action in which & substantial amount of gold WES moved from northern Italy to Switzerland to PAY off Italy's debt to the BIS. According to Kokittrick, this gold had sometime earlier been pledged to PAY off the Italian debt to the BIS. At the time of the collanse of the Mussolini regine, the IS sent specially to Italy one of Its own zen, who in cooperation with the Italian Central Bank, succeeded in getting the gold to Switzer and, where it was used to DAY off the BIS and the Swimm National Bank. According to MeKittrick, this transfer had been made without the knowledge of the Cornens, who probably would have stopped it had they been able to do so. In closing, McKittrick volunteered to stower any other questions I night think of during the course of my stay in Switzerland and expressed the regret that he could not invite no to come to Easle and take a look at the books and records of that institution. Ea stated that as soon 0.8 the sar USE over, however, he intended to threw open the books and records to representatives of the United Nations, and he felt sure that they would appreciate and approve of the role that be and the HIS had played during the war. 335 Born Dated March 23. 1945 Rec'd 9:50 p.a. #1740 334 0 March 23. 6 P.M. from Bern -3- More trucks can be rented in Switzerland If tires can be obtained: and 1 shall, of course, discuss this possibility with SHAKE : understand that ANCROSS plans ship tires to Toules for Switserland on next boat. Could you Secretary of State, not square is . few - tires for ICIC...IDAI Washington MARRISON 1740, March 23, 4 D. as FOR VRS FROM NOGEKELLAND. Department's 1090, VID's 455 Marah 16. Afforts to secure trucks here and BOTH was parcels from Switserland in colleberation with IGRC's Division of Special Assistance (DSA) for massimilated persone are now meeting with small success, Six twelve-ton trucks are being rested from private concern ent will be available next week to transport relief supplies including was supplies to and . lease area exclusively for civil detainees. We were also able assist Stambach of Union Rabbie rest four trucks commercially which will leave next days for Bergea Jalaen with Jewish Faster bread and other relief supplies. Price such trucks 1. very high--- franc eighty per milemeter plus esser Insurance charges but we falt " worthwhile, As reported in Legation's 1687. Mardh a THCA has coded twelve wood bursing trucks now in Germany to ICHCD DSA. These trucks have not been located is confusion but they ought begin turn us next week. French Government has sent 100 new three-tos Reneult trucks to Geneva for IORC'. use. French are quite willing that eight or tas If not more be used exclusively for deliveries to their civil detainees if fuel can be made available French however, can send little or not fuel thems-Ives and present SHART deliveries are solely for shipments to POWS. On March as or 24 one railway car containing 1170 WRB parcels and other relief summites from Union Rabbia and J20 will go forward to Theresienstadt and two other care containing 4,900 WRB parcels plus JDC material will be shipped to Vienna area. We sincerely hope they will get through 337 336 Born Tetanbul Dated March 23. 1945 D Rec'd 9:30 D.D. Dated March 23. 1945 Rec'd 9:30 D.N. Secretary of State, Secretary of State, Washington Washington 1739. March 23, 5 D.R. 97. March 23. 4 D.M. FOR O'IVTER WRB FROM Please transmit the following paraphrased message Department's 998, 133's 430, March 9 and 1090 to Moses Leavits, Joint Distribution Committee. 270 WHB' 455. March 16. Medison Avenue, New York free Charles Passman Joint Distribution Committee Istanbul Henry thanks your telephone onll March 21. 1 repret that illness prevented my going to feris immodiately on "No. 4. Accounts for maintenance and transportation of refugees from Istanbul to the Byrian border for cover receipt your 998 but I was lold up with flu until March 20. Agency. It would be most holeful to have Kataki in Paris in first place actively to follow up nogotiations with SHARE months ending January 1945 have been completed with Jewish concerning allection trucks tires and fuel for ICRC According to bills total due 1. approximately $190,000 VRB relief and evacuation work in Germany and secondly to accelerate crecuntion from Switzerland of "Hungerian" group of 1672 refugees AS well AB some 700 stateless from the Resionstadt convey. Slowness with which this has been moving is beginning to have unfeverable reaction after deducting payment on account. While some items are still disputed 11 is not . question of accounting and I will have to settle the matter is Palestine. 0 $40,000 are urgently required by Jewish Agency to in dealines with Swiss. It is most important at this cover its outstanding obligations here. That amount therefore should be sent to Josenh Goldin or Arthur Fishreha. The balance of the account is to be paid is Palestine, critical time that at least few hundred of the refugees be moved on AS promptly as possible in view of conceivable arrival in Switzerland shortly of unknown numbers of now evacuces. Katalei could the Form most valuable service as WB limison man to hendle such matters now and in future March 27 1 - leaving for Palestine for . short visit, While there I shall try to settle the accounts for the with SHAEP in France APHQ in Caborta and UNRRX. transportation from Constance to Istanbul of refugees by sen. If : had comcone to do this outside work who could assist = in Switscrined for A week or two from time to time I could continue swinging the job at this and THOUTHAN REP without need of your sending A special VEB non to assist nc full time here. : shall discues this whole question with Kataki and would appreciate your opinion. Please wire no in Paris, HARRISON are Hiss Chauncey (for the Sec'y) Cohn, Dubois, Graton, Model, Wutcheon, McCormack O'Dayer. Files, ( o MICROFILM TRADE BOLL 338 339 o PLAIN c Lisbon PLAIN MS-813 Dated March 23, 1945 Lisbon Ree'd 11:15 D.S. Dated March 23, 1945 Roc'd 9:35 p.m. Secretary of State Washington Secretary of State, 634, Twenty-third Washington. V33 365 JDC 201 FOR LEAVITT FROM HAROLD THORE. Julius Huettner Jewish Refugee Committee Goteborg. advises 150 Turkish Jost ex-Detect-Solson Theresionstod ented aboard IROTTEINONOIN for Liverpool 648, Twunty-third WBB 366 JDC 203 FOR LEWITT FROM HAROLD TROBE for reportation Turkey. Have naked London obtain All possible information concerning this group and Saly advises credits placed Fildornan's disposal their destination since possible identical with groups 155 Sephardice deported from Athens and Salonique amount to Skiss frones ten and one-half million. He authorized Fildermen aid also countries bordering Rumania o to Borgen-Joleon in April 1944. Will keep you advised. 0 o GROCKER and finance Red Cross detachments and medical teams LMS pending arrival joint representative Bucharest. CROCKER RE Miss Chouncey (for the Sec'y) Cohn, Dulloie Onston, Eodel, Hutchison, NcCormack, O'Dwyer, Files, 15.00 Chauncey (for the Society), Cohn, DuBois, Caston, Hodel, Hutchison, NcCornack, O'Dayor, Files ( o 341 340 Bern Dated Karch 23, 1945 Rec'd 10:05 A.B. C Secretary of State, MS-019 PLAIN Washington tisbon 1735 March 23, a p.m. FOR WRB FROM NCCLELLAND TO ABRAHAH SILBERSCHEIN Dated March 23, 1945 WORLD JEWISH CONGRESS FROM HAMS KLEX Rec'd 9:30 p.fl., 24th No documents from Zolarnik obtained Have interviewed many people from Borgen Beloon and the Resicnated groupe as well AS from other CAMPS collecting Sceretary of State, documentation for reports, An in close contact with Mrs. Knrous concerning Lindenbrum Food parcels for Washington. SAMCE you indicated ordered through Stockholm. Contacted Morita Loth who 10 well regarding aid. Stricker Friedmans, Kolover, Kahn others left the Resienstedt for 649. Twenty-third unknown destinciion October 1944 presumbly for work CAMP# in Germany I. September October 1944 several thousands persons oblieed leave the Resienstedt RR 367 JDC 204 FOR LEAVITT FROM TROBE Magnes shipped five tone Easter brend fivo tons flour O grooce. o CROCKER Please contact joint matter legal defense young non Buchercat to take up this question with JDC representativo in Switzerland who has hitherto been uncooperative in this question. Yush1haum Tel-A-Fix asking for $200 demonited with you formerly for Anrous Gorston because now needs it CSP himself. Peul Atcitolbaum Hilfikon noke you contact her uncle Chorlce Gewirt, 7224 Blob nr4 Kway. New York for support hereoff and mother. Contact Dr. Alex Molemid. 243 ^iverside Drive New York City to mond hole for his mother-in-Inw Clare Caro recontly arrived here from the Remicestedt. Mrs. Need assious because no nows from her husband. Please cable concerning your Activition travel expressment with World Congress and approximate date your return, HARRISON UST kiss Chauncey (for the Sec'y) Cohn. Gaston, Hodel, Hutchison kconneck. O'Duyer, Files ( 10.00 Chauncey (for the Society), Cohn, DuBois, Gaston, Hodel, Hutchison, 10cornack, O'Dayer, Files O ( RECISION TRACE MARK MICROSTAT MICRM Born Dated March 25. 1948 Reg'd 10:05 a.s. IS-019 Secretary of State, PLAIN Lisbon Washington Dated March 23, 1945 1735 March 23. a P.S. Rec's 9:30 p.m., 24th FOR WRS FROM KOOL TO ABRAHAK SILBIRSORMIN WORLD JUNISH CONGRESS FROM KANS KLEX Secretary of State, No .decreases free Salamak obtained. Have free Mashington groups .. well as free other collecting for reports, As is close contact with 649, Twenty@third concerning Lindenbeus, Food Mrs. documentation Resienstadt viewed Narcus many people Barges Pelses and parcels camps the inter- for - 367 mo 200 FOR LEAVITY FROM TRORE Marita Friedmann, Leib regarding aid. Stricker, Magnee shipped five Lone Easter bread five tons flour unkneve destination October 1944 presumably for work campe is Germany. In September, October 1944 several thousands persons obliged leave the Resienstadt names you indicated ordered through Steckhola. Contacted who is well Korever, Kaha others left the Resiensted for Greece, Please contact joint matter legal defense young CROCKERS man Ducharest to take up this question with JDC representative Switserland who has hitherite been uncooperative is this isquestion. CSB Keehlbeus Tel-A-Viv asking for $200 deposited with you formerly for Marous Gerates because new needs " himself Paul Meitelbaum Hilfiken asks you contact her weele Charlee Devirt, 7324 Blab and Kwax. New York for support hereelf and mother. Contact Dr. Alex Melanid, 243 "iverside Drive New York City to send help for his mother-in-law Clare Care recently arrived here free free her the husband. Resienstadt Mrs. Keep angious because se save Please cable concerning your activities travel arrangement your return. with Yorld Congress and approximate date VS) HARRISON 343 345 344 WFD-202 0 Distribution of true reading only by special Born Dated March 23, 1945 arrangement. (SECRET W) Rec'd 12.21 p.m. JMD-457 Ankara This telegram must be paraphrased before being Dated March 23, 1945 other than . Government Rec'd 10:37 P.M. communicated to anyone Secretary of State, Washington. Agency. (UESTRICERD) US UNDENT 1738, March 23, 4 p.s. Secretary of State FOROUINTER OF WRB FROM MCCLELLAND Washington Department's 1148, WRB's 468, March 21. According your instructions I shall leave for 396, March 23, 1 p.m. FOR O'INTER OF no FROM PACKER Ankara No. 15 Central Bank has transferred $98,500 (repeat 396,500) which is balance of ori- Paris at sognest possible moment although with prevailing transportation difficulties I probably cannot reach there before March 25 or 26. I will contact Brigadier General Maurice Gillard ginal $160,000 (REDEPTED 311, March 15) through the Chase National Bank, New York to Iver c. Clean, of SHAKE 0-4 immediately on arrival. Cindly advise - care limbassy Paris appreximate United States Legation, Stockholn, Sweden. STEINHARDT date Estaki's arrival. HARRISON us - 346 347 PLAIN 0 Listing MS-03 PLAIN Dated March 23, 1948 Lisben Rec'd 11:18 P.A. Dated March 23, 1945 Secretary of State Rec'd 9:35 P.M. Washington Secretary of State, 634, Twenty-third Washington. wha 365 JDC 201 PO LEAVING FROM KAROLD TROES, 648, Twenty-third Julium Hustiner. Jewish Refugee Committee Jews as 366 JOC 203 FOR LEAVITY FROM HAROLD THOSE aboard BROTTEINGHOLA for Liverpecl for repetriation Have asked Theresionstedt Goteborg. advises eated Turkey 180 Turkish ex-Dergen-Helsen London obtain MAY - credits placed Pilderman's disposal amount to Swiss france ten and one-half million. all pos sible information concerning this group and - authorised Filderman aid also countries bardering Rumania their destination since possible is identical with ETONOS 185 Sephardies deported free Athese and Salemique to Bergen-Heleen in April 1944. Will keep you advised. and finance Red Cross detachments and medical team LNS pending arrival joint representative Bucharest, CROCKED RB PRECISION TRADE MARK MICROFILM MICROSTAT BOLL NO. Born Dated March 23, 1945 Rec'd 9:30 p.a. Secretary of State, Washington 1739. March 23, 5 P.S. you O'INTER WRB FICH Department's 998, de's 438, March 9 and 1090 WRB'. 455. March 16. Many thanks your telephone call March 21. I regret that illness prevented my going to Faris imandiately on receipt your 998 but : was laid - with flu until March 20. It would be and helmful to have Kataki is Puris in first place actively to follow - negotiations with SHARF concerning allecation trucks tires and fuel for ICNC KRS relief and evacuation work in Germany and secondly to accelerate evacuation from Switserland of "Fungerian" as as some 700 from group the of convey. 1672 refugees wellwhich stateless Resiensted Slowness with this has been moving is beginning to have unfavorable reaction is dealines with Deles, It is most important at this critical time that at least . fev hundred of the refugers be moved on .. promptly as possible in view of conceivable arrival is Switserland shortly of unknown numbers of new Katski could perform most valuable service as was lisison as to handle such mitters and and in future with THAN is France APHO in Casapta and URRAX If I had - to do this outside work who could assist as is Twitserland for week or two from time to time I could continue swinging the job at this and need of your sending . special WRB Man to assist -without full time here. : shall discuss this whole question with Katski and would attraciate your opinion. Please wire - in Faris, MARRISON V75 348 350 NOT TO BE RE-TRANSMITTED 349 COPY NO. if SECRET OPTEL No.94 Information received up to 10 e.m., 23rd March, 1945. 9. HOME SECURITY (Up to 7 a.m. 23rd) HOME WATERS. 22nd. Midget U-boat collided with MTB 394 off Great Yarmouth who opened fire causing abandonment of U-boat and cap- 1. 10. FLYING BOMBS. 22nd/23rd (night). Eleven plotted, of which area North Sea and were engaged by MTB' who drove them off. ture of 2 prisoners. 22nd/23rd (night) E-boats active in Southern nine destroyed. EAST INDIES. 24th Feb to 9th Mar. Two of H.M. Submarines operating together destroyed 6 coasters, 4 junks, 1 tug and submarine chaser, while another sank 8 junks. 11. ROCKETS. 21st. One additional incident reported for previous 24 hour period. 22nd, Four incidents reported. 22nd/23rd. Four incidents reported. 2. ENEMY ATTACKS ON SHIPPING. 22nd. A 6996 ton ship torpedoed 3. in convoy off Lands End. A 7247 ton Greek and 7176 ton U.S. ship sunk by nine or torpedo off Zeebrugge. MILITARY WESTERN FRONT. Southern Sector: Now confirmed that 7th and 3rd U.S. Armies joined up several places between Homberg and Neunkirchen. 3rd U.S. Army troops have entered Speyer and reached Ludwigshafen and hold west bank of Rhine between Worns and Bingen with 4. o exception small pocket Mainz. Central Sector: At north end of Remagen bridgehead River Sieg reported crossed. EASTERN FRONT. Northern Sector: Further slight gains made south Danzig but Germans claim to have prevented breakthrough to coast between this town and Gdynie. Central Sector: Advances made of some 25 miles S.W. Oppeln where Soustadt and other places captured. Southern Sector Further gains made north and N.3. Zvolen. 5. BURMA. Coastal Sector: Snall advances made from An bridgehead. Central Sector: 20th. in south end Nyangu bridgehead 230 Japanese killed when attacking our position area Seikpyu when our casualties 36 killed and 48 wounded. Further North southern and Myingyan occupied by our troops and rest of town in flames, In Mandalay area enemy garrison now split in small parties attempting escape southwards. Northern Sector: Our troops advancing S.W. longmit have reached point 7 miles S.E. Mogok. 6. of AIR 7. WESTERN FRONT. 21st/22nd (night). 530 Bomber Command air- craft (7 missing) despatched: 302 oil refinery and benzol plants C JAPAN. 18th/19th (night). 292 Super Fortresses (1 missing) attacked Urban Area Nagoya (1679 tons) causing heavy datange. NAVAL (1283 tons. at Bamburg and Bochum, 142 Berlin and 86 other operations with mainly good results. 22nd. 645 escorted Bomber Command aircraft (4 missing) attacked in clear weather enemy troops and supplies dropping total 1252 tons Dulmon, Dorsten and Bocholt while 566 tons dropped (including five 22,000 pounders) on railway bridges Bremen and Nienburg (where bridge destroyed) and also 1406 tons Hildesheim. 1293 escorted U.S. heavy hombers (5 bombers, 5 fighters outstanding) attacked visually 10 military camps and barracks in Dorster Essen du Seldorf area (1629 tons) and 5 airfields east Mannhein (1072) when 14.1.4 casualties inflicted in combat and 13.0.8 on ground. SHAEF (A1F) bonbers 1066 and L3 missing ) dropped 1486 tons on 27 communication centres north central sectors and 3 railway bridges southern sector while 3394 fighters and fighter bombers (8 missing) operated battle areas destroying or damaging 200 locemotives, 800 N.T. 2.000 rail vehicles inflicting 13.0. casualties in combat and 62,7,44 on ground. and 120 Fighter Connand Spitfires attacked railway movement Holland and also rooket target Hague area. 22nd/23rd (night). 163 Bomber Command aircraft (2 missing) despatched: Berlin 56, sea mining 29 and bomber support and other targets 78. MEDITERRANEAN. 20th/21st (night). Liberators dropped 170 tons B. railway centre Pragersko (south Maribor) 21st. 675 escorted 718 U.S. on heavy bonbers (3 missing) dropped total 1251 tons including 6 airfield Neuburg (45 miles N.W. Munich). Three oil refineries and railway targets Austria and Yugoslavia. 913 tactical aircraft (5 missing) attacked communications and other targets North Italy. 3