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CISION TRADE MARK MICROSTAT MICROFILM BOLL NO April 6, 1945 10:43 A. M. A Mr. Dan Bell: Hello. HMJr: Hello, Dan? B: Good morning. HMJr: How are you? B: Pretty good. I'm very sorry to hear about Mrs. Morgenthau. How is she? HMJr: Fine. B: DIARY Book 835 Well, she had a good night. HMJr: And she's improving. B: Well, that's good news. HMJr: Yeah. It looks now as though I might be able to get away Sunday. April 6-10, 1945 B: Get away Sunday night? HMJr: Yesh. B: HMJr: B: HMJr: I see. Well, that will be fine. Will she be able to travel tool Oh, she won't be able to travel. She won't be able to travel. Well, I'll come up to that engagement on Tuesday in New York. B: I see. HMJr: I can hardly hear you. B: I say, you'll be up here to keep the engagement on Tuesday? HMJr: o Yeah. B: All right. Now there's quite a group here. HMJr: Well, just if there is anything important. I didn't want to call one after the other. B: I want to tell you that I saw Fred Geble in New out for your engagement at the Astor. York and he said that it was practically a sellHMJr: C B Well, I think so, too. B: HMJr: Talk a little louder, Dan. B: Iout.say he said that there was practically a sell- HMJr: Good. before we've got to do any horse-trading, let's do it in the Senate. Well, that might be. One thing I'm worried about this whole picture is that it will be termed horseof the Treasury position because At the Astor. I don't know whether that is dinner made my or luncheon. HMJr: Dinner. B: Dinner, hub? HMJr: At the Waldorf. B: Luncheon at the Waldorf? HMJr No. I thought the Gehle thing was at the Waldorf. B: Oh, well, anyhow, he said that there was practically a sell-out. There's over 1900 tickets. HMJr: Good heavens! B: HMJr Yeah. I haven't anything. I could report on the New York about it. trip. I don't know whether you want to hear I'd like --- I told Luxford to write the the part he took part in, see? B: there trading was that or one-weakening remark yesterday in conference with Aldrich oh, something about going along with the Treasury and permitting then to save their face. I said, *Well, Just wait a minute. I said, words. HMJr: B: HMJr: had and send it down to me today. B: HMJr: B: HMJr: All right. They'11 come down together. But ay own feeling is this - I think we should move very slowly on what we agreed to. All right. If White has anything he wante to write on it, but my own feeling as much as I've done now that we know ... we've got the votes in the Banking and Currency Do we know that? HMJr: Yeah. HMJr: I'll do that. Then I'll have the whole picture. Well, I'll read Luxford's letter, and I'll read your letter and if anyone else wants to write any comments they can write me today. B: Yes. And then if you would write the the part that you is "The Treasury doesn't have to save its face, this a satter of cooperating with everybody concerned, and certainly we are not up here to save the Treasury's face. And he said, Well, maybe I used the wrong B: HMJr: should talk about. I think that it would strengthen House without any our through hand the enormously the amendment. Senate if we got it Than if B: B: And this 1a my horse-back opinion that you people The papers all differed. No. Joe O'Connell tells me we definitely have the votes. Baldwin of Baltimore is going to vote. told that to the chairman. He B: I see. HMJr: We've got the votes. B: Well, I'd move slowly. Burgess is going to see some of his people today,mean 1 think Charlie Spencer, I don't sean Aldrich, Len Hemingway andAldrich two or three others. - -2- -5D If my plans go through, I'll be in Washington on HMJr: Monday. You see, Burgess made me a promise once that he didn't HMJr: keep. Well, Burgess 18 all right on this when he talks to us alone, but it seems to me that he softpedals it when he talks to somebody that 18 strongly opposed to it. Well, suppose you write me in great detail what B: HMJr: Monday, yeah. Harry, Harry, B: Mr. Harry White: Hello. HMJr: Hello, Harry. Hello. We are all glad to hear that Mrs. Morgenthau is better this morning. W: happened. All right, we'll do that. B: HMJr: B: But it's understood up there, 18 it, that nobody is to agree to anything until the bose puts his She's better. HMJr: It was in the paper that she was taken sick. W: O.K. on 117 HMJr: Oh, that's right. We told them that we had to V: Other than in Leonard Lyonat Yeah. bring back to you any recommendations that we might want to make, and that these were nerely informal and off-the-record disquasions. Everybody understands that. HMJr: Well As a matter of fact, Burgess is in the same position because he's talking for a group too. B: HMJr: B: HMJr: Well my own inclination is to get it through the House w1 thout any amendment. It was? HMJr: Yes. V: HMJr: No, no others as far as I know. W: HMJr: HMJr: But I'11 talk to you about it when I gey back. I'll W: B: Yes, plenty. Do you want to talk to anybody here? HMJr: Only if they've got something important to talk to No one has a thing. B: HMJr: HMJr: HMJr: HMJr: meetings on Germany are going forward and they'v are B: agrees with us a 100% (Talks aside) Harry and Coe both are here and they Put Harry on. All right. Harry wants to know if you are going to be here Monday tool Talk up, Harry. The long meetings lot of opposition, but they some had getting little particularly closer together. spoke to FEAaboys wereIvery difficult, of the the Henderson line completely. One of He them following there. I spoke to Cox at some length. over was W: Who knows what is going on on this question of reparations and then this revised 10671 Who' both are familiar. Do you want to talk to thea? Well, do. The meetings on the. familiar with that? B: I know where they got that too. You dot I don't. W: me about. Just Leonard Lyone. Yeah. of course, somebody picked it up today. W: Ahuh. have plenty of time when I get back. What did the other papers say? HMJr: Humph. E -7-6HMJr: And he said that he would see that his boys get in line. W: In there anything else that you want? W: HMJr: Yeah. HMJr: But his boys haven't gotten in line. I spoke to his again about it, and he said he would see them again, but I gather maybe the one that we have to talk to 1 Crowley. I'm seeing Cox again this morning and I'll W W: HMJr: see, but in the meantime they are continuing to work.. Yes. HMJr: and we are beginning tomorrow on the reparations. W: HMJr: Is that the first time they are going to meet , On reparations, yes. W: HMJr: with Hilldring? Yes, Clayton couldn't have any time before that he had to go to Chicago and so on. That was the first W: moment he had. HMJr: Yeah. And two other things - Mrs. Klots just mentioned that she W: spoke to you about Judge Rosenman's request and about the possibility of getting Treasury people over ther to make an investigation. HMJr: Yeah. Well, we are drafting a proposal up here for your W: consideration whenever you come, Monday or Tuesday, we aren't taking any other action. HMJr: That'11 all come under General Clay now. I see but it is a separate matter than what General Clay raised with you which -- it's a separate matter and you'll both want to consider them together imagine, but there is no need to answer General Clay W: until you come back. HMJr: W: I can't answer him because I don't know how. Yes, well, neither do we. In any case we're not doing anything. No. thanks. All right. Anybody else you want to talk tot I just want Fitzgerald, please. Mr. Fitzgerald. W: HMJr: Yes. Hello. Operator: Hello. HMJr: Mr. Fitzgerald, please. 2 O readily accept it. He was particularly pleased with the provisions requiring the Council, the Governor and the Executive Directors to report to Congress within not more than two years on the operations of 1 TREASURY DEPARTMENT WASHINGTON 25 the Bank and Fund; whether or not they should be merged; and to make recommendations with respect to any other changes that might need to be made. April 6, 1945 Dr. Burgess then told Mr. Aldrich the various points that had been discussed and the suggested amendments to the bill which would take care of those TO THE SECRETARY: In addition to the conferences held in New York, referred to in Mr. Luxford's memorandum, Dr. Burgess and I conferred with Mr. Winthrop Aldrich, President of the Chase National Bank, Thursday morning for about one hour and fifteen minutes on the same subject discussed with the points. Mr. Aldrich said that it still did not settle the main questions BB to what to do with the British and the trade restrictions. We told him that these were separate questions and could not be included in any bill on Bretton Woods. They would have to be handled at different conferences. other representatives of the banking institutions. Dr Burgess explained that he and I both had been a little worried about the apparent rift between the Treasury and the bankers and we had discussed the matter of getting the two together on some com- promise basis, short, of course, of another world conference on these agreements. He went into his previous conferences with Mr. Luxford and Mr. Bernstein and his subsequent conferences with these two gentlemen and myself and Mr. Sproul, Mr. Williams, Mr. Fraser and Mr. Potter and himself. He said that after pointing out what was desirable in connection with the Mr. Aldrich then raised a few other questions about the need for the Fund and its questionable soundness, and the charge that the bankers had been 0 took two answer three most thesedid and expressed opinion on or tooccasions thatof he not feelhisnearly so strongly as Mr. Aldrich had expressed himself. I made it quite clear to him that all I was trying to do in New York was to get the bankers and the Treasury together on Bretton Woods along the linee that Mr. Burgess had outlined, and told him that the bankers and the Treasury had cooperated over the last several years, and particularly had cooperated in financing the war and I thought that some of the problems with which we will be confronted in the post-war period will be as difficult, if not more difficult, than the war financing problems which made it bankers program, he was asazed at what Mr. Luxford and Mr. Bernstein were able to do by amending the present bill to meet the objections of the bankers. He thought they had gone a long way and that while he would still prefer not to have the Fund at all but only the Bank at this time, he felt that a great many of his objections had been removed. that the Treasury and the bankers continue vitally to cooperate. necessary I said that the bankers would no doubt hold approximately one-third of the debt, which virtually made us partners, and it was necessary for us to get along He also told Mr. Aldrich that Mr. Potter and Mr. Fraser both said that the memorandum that these boys had drafted, if adopted, would eliminate many of their fears and so far as they were concerned they would be willing to accept it. Dr. Burgess then asked me what attitude Mr. Sloan Colt had taken in the conference which I had had with him the previous afternoon. I told then that Mr. Colt was most enthusiastic about the memorandum and said he felt that he could speculators in foreign exchange. Dr. Burgess under- together. Mr Aldrich said he thought we should get along, 0 but he found it rather difficult to get along with the Treasury. He said the Treasury was now bringing suit against his bank which in his opinion was not at 4 3 - the Attorney General had told him that he was compelled to move forward because of a call from Secretary all justified. He thought the Secretary, having Morgenthau. supervision over the national banks owed him the duty when he found something wrong administration of Foreign Funds Control, to call the head of that bank to Wash ington and discuss those failings I also told him that the report on the Chase branch in Paris was not yet ready for the Secretary but I hoped that it would be within the course of the next week or ten days, at which time we will determine whether it could be made available to the before filing suit. Certainly the Treasury does not think that the Chase National Bank wants any person in its employ who would violate Federal regulations and he would be the first to fire such an employee bank. He said he did not see why it took so long. They are just as anxious to get the thing cleared up as we are and if anybody in the Chase Bank did anything wrong they want to get rid of him. if he found that he was guilty. He said he had not the the investigated the charges made by Foreign Funds Control and he does not think there justification This isis any borne out by thewhatfact ever that he for did thehe charges. fire individuals and with further fact that intends to fightinvolved the suit all the power at his command. Also, the Treasury sent examiners to Paris, France, to exmine the Chase Bank branch there. They sade their examination and brought the data back to this country after having files for B number of months. He has & furnished kept asked the repeatedly to be with the by the Treasury in itsChase investigation offacts thisbranch found There WAR another matter to which he referred, involving trading in German marks, and helping out the Gernan-Japanese factions,with which I am not 0 refuses to furnish him any information. heitdoes notwant theopinion of He but made the Treasury clear that the examine rs, but he would like to have the factual data. He has no information concerning the branch or its operations during the occupation other than what was brought back by none individual concerning one of his managers, whom he fired as soon RB he found out what he had done. As to whether other employees involved are guilty he does not know. He seemed very bitter against the Treasury because of it to that, but every time we started to discuss the matter of Bretton Woods, he would return to the manner in which he had been treated by the Treasury. Finally, just about the time the conference broke up, he said that aside from all this discussion it was a good thing for the Treasury and the bankers to get together. He busy in the Chase Bank suit. case thought did not feel that the bankers had to that I told him that I did not think that that could He paid he knew differently, that in this case Becretary of the Treasury early in 1941, saying that he worried about it, did like it and would like to get the Treasury B views as to whether he should stop it or allow it to continue. He said he had a letter from the Secretary over the Secretary's signature, thanking him for calling the matter to his attention and saying he would be advised if the Treasury wanted his to take any action in the matter. I told Kr. Aldrich it seemed to me that these were CRBES between his and the Treasury and should not in any way influence Bretton Woods, that what we were discussing now was a matter between the Treasury and the American Bankers group and I would like to confine these two instances. He also said that thin a day or two after the ABA report case out, the Secretary of the Treasury called up the Attorney General to get possibly be any more than a routine check-up by the General Counsel's office of a case pending in the Department of Justice, that this WAR being done about every month on our cases over there. was not at all familiar. He said on this case he wrote the they had made their and by standing compromise, pat he 0 they would get what they recommended, but if it was a matter of permitting the Treasury to save its face he was willing to help out in this situation. 6 5I told him that it was not a question of TREASURY DEPARTMENT INTER OFFICE COMMUNICATION saving anybody's face and particularly the Treasury's face. We did not think we were in a position where we had to save our face but I personally thought it WAB a good thing to get the bankers and the Treasury Secretary Morgenthau together. If the bankers do not think that is S. George Little necessary, then we will go on our way, but certainly no one should enter this with the idea that they have to save the Treasury's face. Western Newspaper Union has sent ne the attached proofs of the article they are running on Bretton Woods which is scheduled to appear April 12. He seemed to apologize for the remark. saying that it WALE an unfortunate expression. I told him I agreed that it was unfortunate. But anyway, he said he would take the document which Dr. Burgess had handed him, read it over and discuss it further in the next day or two with Dr. Burgess and the group that he WRB calling together for that purpose. He One set-up is for tabloid newspapers and the other one is for standard size 8-column publications. This article will most likely appear in about 3500 saw no reason why we should not proceed AB we had done and if it forms a basis for getting together he O 2At DATEApril 6, 1945 weekly papers instead of 2500, which was mentioned in would be glad to cooperate. The conference ended on that basis. our original report. O ruB O C Bretton Woods Conference Laid Groundwork For a Stable International Monetary System U. S. Postwar Exports Depend on Soundness Of Foreign Finances By WALTER A. SHEAD WHU HAR Comments Stripped of all technical ver- blage the proposals agreed upon by 44 United Nations at the Bretton Woods conference and which are considered an essential part of the world peace plan to be approved at San Francisco April 25, are designed toLate up an International term fund with working capital was accided by 44 nations in gold and member currencies totaling 1.5 be Bas dollars of which the United States is subscribe 1.75 billiess and foreign This Fund expected elabilite Jall of R. U. vide tree and (center) with Canada - L-Organise International bank for development with . subscribed of bill the of member chairman and many that of States is farsish LIFE / late get Banne M delegation Rossian for Steps est from the groups world price of wheat modify in terms of Home of dollars which the Datted conference Woods the of reciprocal trade agreements - will Purpose of the bank primarily to Bretten Woods disturbed the Committee for Exp principal headed by Part president countries. facilitate Solative of foreign lease arivate capital markets by providing International Brettee the is Secretary Internal . During trade barriers is favor of currencies is Stude the made busi and to the So capital learns direct specific pro) monetary further power short develop and claim. regular that Why guards? American and in the epidemic Under debtors .. setting of Bretton fund these abroad then and point the and both that vestors the of any that one the 44 member the extent by the objective of guarantee the ample before the is was disrupted by so-called barter multiple is volume well Great Need fee Rebebiling France Italy Norway. Paland Finland area of Russia, the intended strictions and - under practice. value team greater and exchange rates that Amer- war. their facilities possible required preliver inter export foreign intended cap for get country have tre mendously enlarged productive in dustrial plant Our agricultural pro confirm The likely provided Chance for the for freedom would be their They to pen have been waste by the trate Fund The large sections of England China much of India and Burma. plus Asia nations of Germany and meaningless unless these other cost triss accorded an equal measure of N There critician almed at efficiency After our ette some they the the war fiscal experts here declare that never before has this nation - freedom to their own durtion has reached new ME of Pointing the leadership United States has maintained during repled such key position or had bank are such apportunity - take over world in the economic at ment. Why the need for these safeguarda? Following World War 1 does American investors look beating and the late 1930s were caught is as epidemic of dafaults by foreign debtors Under the Bretton Woods be maintain stable relationships that countries some in importers are not permitted to our by the objective of this guarantee tries of which Germany was ample before the war. foreign trade bank the pointed also United States Is other fund the bank of there is program pleasing same system agreement trate their currenties and many years will them to rebuild their tries. They will Hal to get the only alternative system been bloe set practice. regarded These value rates - that Ameri by such team business may have the greaters freedom in would likely - letended to be provided and conflict would groups bloc lead politically Eventual is the postwax The Chance for Leaderably breathese is the other reastries for freedom of besiness would be Pointing to the leadership the United has maintained during our In enlarged mendously Our dustrial plan. experts the that declare here this dection has reached efficiency After the name policy will employment and full our agricultural and industrial Itles. To realize of Treasury the outlets for products factory governate ready American dustrial the bank are Under fund tary bank vestors for tries gold change per cest of times of distines. during action country dupers Last team Bratton the the designed best minds the world. of of C of war. their productive control fund the economiata sound all Axis nations of Germany pan have been laid exteb text must many new restrictions have because of military neces remove the the moneys to multiple currencies or barter retarments and during the belended the extent, upon the fund for the was disrupted by use of area of Restic. the Balkan large sections England China only that out considerable Fisland much of India and Burma open members are dollars required to buy goods that be France, Italy. Norway, Paland and and of ( own economic well being Great Need for Rebullding bank the organization vestors themselves not even any one country. but upon all the " member countries Obvious loans is to encourage substantial volume of private international vestment which is essential point- closely related both in in instance fund shreed normality member countries For monetary conditions of guaranteed .. to principal and national leans. would not fall setting that the and proposals these foreign loans would be investigated by the back and then terest by the foreign government and the bank Risks then of inter- that have not of c ects reconstruction and develop by o R SION capital lease direct to member nations for specific pre) TRADE MARK Lert England famel ***** monetary authority, who Brittan group of delegates. currency has been devale indiction . result of the with Japan British bank concerned about Chinese Beandal stability. - only .. part of the world monetary situation but because of the extensive British business Interests la China, Special Feat. No. 7-4514 Bretton Woods Conference Laid Groundwork For a Stable International Monetary System U.S. Postwar Exports Depend Upon Soundness of Foreign Finances WALTER SHEAD With Full Employment, People Will Buy More Farm Products In Peace Than in War, Sec. of Agriculture Wickard Predicts Tabloid 4514 Page DRY MAT PATTERN RECISION TRADE MARK MM MICROSTAT 12 -2- MEMORANDUM FOR THE SECRETARY. April 6, 1945 Mail Report April 6, 1945. With no new subjects to spur it on, mail fell short of the summit it reached last week. Receipts dropped off evenly along all lines, and very few of the letters that were received offered material for the week's abstract. Much of the miscellaneous mail concerned international affairs such as the Bretton Woods Proposals, peace terms, and postwar plans. Among the last, there continued to be both approval and disapproval of the so-called Morgenthau plan. There WB.S still quit a bit of interest in the Treasury's drive against tax evaders. but most of the March showed small increase over those received in communications on this subject were anonymous and merely named individuals or businesses that should be investigated. Several of these unsigned letters, and a for signed ones as well, urged the calling in of large bills, to curb blackmarketing and tax evasion. Outstanding in other tax mail were the protests against tax exemption for co-operatives, which, it was said in a number of well-written letters, could be a source of substantial Federal revenue. The Seventh Drive was again the most popular bond topic. Further replies to the form telegram of March 13, and to the banking institution letter of March 20 continued to give assurances of cooperation, as did the responses to the more recent letter sent by the War Finance Division on March 26. Several writers submitted poems or slogans for use on the Iwo Jime poster to be used in the coming drive, and others suggested new types of bonds that might be offered. Two additional Industries wired that they had already exceeded their quotas for the Seventh. The general reduction in mail this week also brought a decline in the number of complaints about delays in receiving bonds, interest, etc., and only half a dozen bonds were forwarded to this office for redemption. C Memorandum for the Secretary. Although mail receipts from the White House during February, the total of 220 letters was still quite low, particularly in comparison with preceding years in which receipts for March have usually ranged from 500 to 700. Fifty of the 220 communications were acknowledged in the Correspondence Division, and the others were re-routed or filed. 14 - 0 General Comments M/Sgt. Herman Antis, Italy. Please accept the enclosed United States Postal Money Order for $2.00 as & gift to the United States from an overseas soldier are for sale. We wish to take this opportunity to commend you in behalf of our Association on the manner in which you are carrying on the sale of surplus properties. We think you are doing an excellent job and are glad to help our members and subscribers by listing the properties for sale in the magazine. who appreciates more and more each day what a great, just country he left behind. Harry C. Westover, Collector of Internal Revenue Los Angeles, California. During the past several months we have been receiving letters over your signature relative to matters concerning employees of the Treasury Department. I want you to know that these letters are greatly appreciated by our personnel, and we are all cognizant of the fact that you are concerned with our welfare I know you are interested in any program which will build up the morale of those in this service, and your letters are certainly accomplishing their purpose. One of the things which we have had to C contend with during the past few years has been the inequitable differences between the salaries paid to members of the Internal Revenue Department and those paid to employees of war industries. We have lost many of our best employees because they were offered greater opportunities In private industry, and anything that can be done to increase the financial reward of our employees will, I am quite sure, work to the betterment of the Department. Our personnel is very much interested in the Bill introduced by Senator Downey, and we trust that before many months this Bill may be enacted into law. We all look forward with anticipation to your letters. Roy A. Gould, President, Timber Operators Association, Mayfield, Washington. We have been advised that our publication, The Timber Operator, has been brought to your attention and that you are pleased with the manner In which we are advertising surplus war properties that Nicholas Bela, Executive Secretary, National Origins Council of America, Los Angeles, California. At the membership meeting of our Council, held on March 26, 1945, a resolution was unanimously passed by the representatives to support the Bretton Woods Agreements as is. I have been authorized by a vote at the meeting to extend to you the organization's full backing, and to congratulate you on your great work of outstanding statesmanship. We request that you send us material on the Bretton Woods Agreements In adequate quantity to educate our approximately 90 member organizations. Charles W. Davis, Detroit, Michigan. I am enclosing Disability Compensation check for $50.00 "Payable the Treasurer of the United States for War Effort* I am pleased to return this check to be used for War Effort, and will continue to do so whenever possible. to 3- 16 C Unfavorable Comments on Bonds Lester G. Saeman, Attorney, National Surety Corporation, New York City. On December 1, 1944, the messenger of Lewis C. Nelson, Commerce Building, St. Louis, Missouri. My brother, Lieut. James M. Nelson III, U. S. Coast Guard, is at the present time and has been for approximately the past nine months, on active duty in the Southwest Pacific. During his absence I have been taking care of his business and other affairs for him and have in my possession a Power of Attorney, properly the Security Bank, Louisville, Kentucky, enroute to the clearing house Was held up. Among the items taken WILS a number of Series "E" War Bonds as per executed and acknowledged by his Commanding Officer. Today I attempted to present for redemption to the"E" Federal Reserve Bank of St. Louis one $50.00 Series War Savings Bond, registered in my brother's name. I presented to the Federal Reserve Bank the original executed copy of the above-mentioned Power of Attorney I WILD told that this Power of Attorney could not be honored and that no Power of Attorney whatever, regardless of how drawn, would be recognized by the Treasury Department for the redemption of War Savings Bonds. I was told in order to redeem the $50.00 bond it would be necessary that I mil Form PD 1522 to my brother in the Southwest Pacific for his signature. I have used the above-mentioned Power of Attorney many times in the past few months to sell shares of stock owned by my brother, to withdraw funds from his bank accounts and to transact various business in his name. I desire to protest strongly against the perfectly ridiculous regulation of the Treasury Department that will not allow a perfectly valid Power of Attorney, executed by man fighting for his country overseas, to be used to redeem obligations of the United States of America. If the Transfer Agent of a large company will recognize this Power of Attorney, if a bank will recognize it, if first class legal talent declares the it is in all ways valid and binding, it is beyond the powers of human conception the Treasury Department refuses to recognize it as why My brother has been for the past several years, such. and still is, purchasing & $50.00 Series "E" War Savings out of his salary every month. Unless this perfectly Bond ridiculous regulation is changed I will be forced to write him and advise him as a matter of sound business not to buy any more U. S. War Bonds. C 0 list attached to this letter. These bonds were cashed by the Security Bank for the amounts shown on the attached list. Each bond has a rubber stamp notation on its face that the bond was paid. On the same day the robbery occurred the Security Bank wrote the Treasury Department, Division of Loans & Currency, Merchandise Mart, Chicago, Illinois, advising them of the theft and ordering payment stopped on the list of Series "g" Bonds attached to that letter. On December 12 1944, wrote the Treasury Department at Chicago, In which I requested payment stopped on the bonds and the proper procedure for the Security Pank to recover its money. No answer was received from the Chicago office in response to my letter of December 12 nor the Security Bank letter of December 1, 1944. I wrote our National Surety Corporation of fice at Chicago to make & personal call on Mr. A. E. Wilson at your Chicago office. was told that the matter was given attention and in February I received a letter from our Chicago office advising that the matter was being referred to Washington for decision, and that I would hear from some one within the next two or three weeks. Since then I have heard nothing from anybody. William A. Weaver, President, The Arabol Manufacturing Company, New York City. This acknowledges your circular letter of March 26th announcing that the Seventh War Loan Drive will take place shortly. We wish to assure you that this company and its employees will again do its share in helping to make this Drive a success. However, there is one thing I would like to point out to you which might have some bearing on the sales to our enployees -- during the past two years the Board of Directors of this company authorized the payment of a two weeks' Christmas bonus to this company's employees. We suggested payment to the employees of one week in cash and the other week's bonus to be used by the company 18 -6-5Favorable Comments on Taxation C on behalf of the employees to purchase for them U. S. War Savings Bonds, which we agreed to hold until Herman Steinbruch, Radio Advertising Manager, VARIETY, after the War and the Salary Stabilization Unit of the Treasury Department denied our application for the second week's bonus. If this had been approved it would have resulted in the purchase of possibly $8,000 U. S. War Savings Bonds each year. We did not write letters this year pertaining to the 1944 Christmas bonus but we contacted the Treasury Department, again making the proposal that the second week's Christmas bonus be given in U. S. War Savings Bonds, and we were again rejected. I am just bringing this to your attention at this time so that you can see that our employees do not feel so kindly toward subscriptions to War Bonds when they are denied the privilege of receiving extra funds to purchase them. Howard J. Chidley, D.D., Winchester, Massachusetts. I received your recent communication about the coming Liberty Loan Drive. If this is a trial balloon to test the sentiment of the churches, used by the New Deal to further its interests, I being will say in no uncertain terms that while I an heartily in favor of giving every support to the Armed Forces, I am not In favor of having the church used as a government agency, especially in a country where the church and state are separate. Rather than have my church used in this way, I would die on its doorstep, fighting for its liberty. The New Deal has laid Its hand on judiciary, industry, radio, newspaper, education, and what-not. C 1 New York City. In my opinion there is a perfectly legitimate way for the Government to handle the "royalty" matter recently precipitated by Petrillo and Lewis. Until such time as legislation is enacted, outlawing royalty assessments by labor unions, the Treasury Department can and should enforce collection of taxes based on income from such royalties. Form #990, currently used by organizations exempt from tax provides a suitable space under Item 6 (Page 2) titled Gross Receipts from Business Activities", for listing such income. Since revenue resulting from royalty payments, irrespective of the source, and regardless of the purpose for which used, is clearly Income, It should be reported as "income from royalties". While the onforcement of such tax collection might be tantamount to admitting the legality of royalty assessments by labor unions, the position of the Treasury Department is clearly defined and might serve B.B a warning. PRECISION MICROFILM TRADE MARK ROLL NO. 19 20 ( Unfavorable Comments on Taxation Claude R. Bossler Johnstown, Pennsylvania. I an one of United States Steel Corporation's Poor Pensioners. They are supposed to be paying me $148.00 & month, but they deduct $13.00 a mont as a withholding tax William H. White, Jr., Clark Hall, University of Virginia, Charlottesville, Virginia. I recently read w] th considerable interest that the Bureau of Internal Revenue I have to pay on that little pension. With the cost of everything my wife and I eat and wear going up in price, that $135. .00 a month doesn't go very far. There should and must be some relief for the little pensioners who must live on a small fixed income which continues to shrink. was making a study of the so-called cooperatives. I happen to be a director of a company engaged in highly competitive business and among its competitors are many so-called "farmers' co-ops". The corporation, a which I referred to. in 1944 will pay to the United States upwards of one million dollars In taxes, whereas its cooperative competitors will pay nothing. The disadvantage to which the taxpaying corporation is subjected Mrs. Henry A. Gozan, Carolina Beach, North Carolina. Around the middle of February I received a statement from the Collector of Internal Revenue, Brooklyn, New York, of an indebtedness of $27.13. This was supposed to cover that part of my husband's 1943 income tax, payment of which I WILS permitted to postpone until March 15, 1945. I immediately wrote them that since my husband had entered the Army in August 1942, and our income since that time has always been below the taxable minimum, I could not understand the charge and requested a clarification. Although I had received no reply as the deadline date approached, I decided to pay It anyway, just to be on the safe side. On March 10, I sent a check, at the same time repeating my request for an explanation. Subsequently, my husband. who is oversees, wrote me that he had reviewed the matter last year and found that he had no further indebtedness and filed accordingly. Therefore, my payment was erroneous. Although It is close to 3 months is perfectly obvious. Let me give you another illustration. I happen to know of an Individual carrying on a very successful business largely on borrowed money. His business la so successful that he is in a high tax bracket. with the result that after paying taxes he has so little net income remaining that he is unable to reduce his bank obligation appreciably. He now contemplates turning his business into a "co-op in which he will $ still retain a very large interest. The result, of course, is self-evident -- no Federal or State income tax to pay, so the bank loans may be promptly paid off. Undoubtedly an amendment to the income tax law to include "co-ops will meet the opposition of the "farm block": but after all, why should not these "co-opa" of many types, which compete with legitimate taxpaying corporations, bear their share of the expenses of Govern- ment. If fairness is the basis, then, of course, there is only one answer. They should be taxed precisely like since made by original inquiry, I still have received no reply. I think you can well understand that with BY husband in service, I have difficulty enough just the corporations. making ends meet and can ill afford to make any unwarranted cash outlays. I therefore appeal to you in the hope that you may be able to arouse my local office, at least to the point of acknowledging receipt of my communications and trust that a refund will be made 0.0 soon as possible. 0 O PRECISION MICROFILM TRADE MARK BOLL NO Hoffman my 22 SECRET March 29, 1945. MEMORANDUM FOR THE PRESIDENT Subject: Proposed Lend-Lease Arrangements Office Memorandum UNITED STATES GOVERNMENT w C with Belgium and the Netherlands April 6, 1945. SECRET TO FROM Mr. Hoffman, Treasury Department Mr. Fetter, LP, State Department SUBJECT in In accordance with your request our phone conversation an enclosing a copy of the memorandum presented to the President on March 29, or proposed lend-lease arrangements with Belgium and the Netherlands. no you know. this was approved by the President. We have been discussing lend-lesse and reciprocal lend-lease with representatives of Belgium and the Netherlands Having signed the 3-0 agreement with France, we feel that political considerations make it agreements Netherlands. Insimilar each lines casewith thegold desirable Belgium and to the have on and dollar position, the future balance of payments, and the volume of reciprocal aid would be taken into account. of We have worked out a Belgian-Luxembourg proposal a relatively smaller amount than the French agree- sent. The proposal intemplates $325 million for the remainder of the calendar year and follows in general the pattern of the recent French agreement, with no item for transfer of title to ocean shipping. We are also examining proposale for the Netherlands. In each case the nature. extent and duration of lendlease will be determined by the contribution which such aid will make to the prosecution of the war and we shell provide for periodic review of the program in the light of the changing war situation. Consideration is also being given to an arrangement with Norway. If you approve, we shall immediately move forward with the representative of Belgium and the Netherlands and possibly Norway looking towards early conclusion of such arrangements. We do not intend to conclude any of these agreementa until Congress has approved the extension of the Lend-Lease Act. Enclosure. Acting Secretary of State Secretary of the Treasury Foreign Economic Administrator PRECISION TRADE MARK MICROFILM MICROSTATA ROLL NO 23 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE April 6, 1945 TO Secretary Morgenthau (For information FROM Hr. Coe FC This is an important erticle on what the Ruhr industrialists may be trying to co. O PRECISION TRADE MARK MICROSTAT MICROFILM REG.U.S.PAT.OFF - RHENISH INDUSTRY BACKS SEPARAT Seek Manufacturers Properties, Disolaiming Any Nazi Connection BAYMOND ROLL NO 26 25 EXECUTIVE OFFICE OF THE PRESIDENT EXECUTIVE OFFICE OF THE PRESIDENT WAR REFUGEE BOARD WAR REFUGEE BOARD INTER-OFFICE COMMUNICATION INTER-OFFICE COMMUNICATION DATE DATE April 6, 1945 APR 6 1945 10 Secretary Korgenthau TO FROM Willies O'Dayer Secretary Korgentheu Miss Hodel Fax your information I as sure you will be interested TO know that we have Just ande arrangements with the War Department for the sale to the War Refugee Board of 206,000 parcels of this Government' present reserve of orisoner of ver pmokages now in Switzerland, on condition that the parcela be repackaged before shipment by the Wer Refugee Board into Germany. We are nov working out the details of the transfer and repackaging. 0 We are very pleased over this because it not assuree us of an adequate supply of food to be shipped by truck from Switzerland. During the past two weeks, we have thoroughly exclored the problem of obtaining food from sources in the United States and it 18 clear that, even under the best circumstances, it would take any sonths before packages could be prepared for shipment to Europe. 0 General O'Dwyer has asked ne to advise you that he called Mr. McClelland on the telephone this morning to get the Intent report on our progress from Switzerland. Five trucks are leaving Switzerland Monday, April 9th for Lubeck in the northern part of Germany, carrying 80 tone of parcels and fuel. Four more trucks are leaving Switzerland April 12th for the Dacheu caupe which are near Munich. 30,000 Var Refugee Board parcels will go forward by railroad from Switzerland to an International Red Cross depot near Ravensburg, Germany. With this movement under way, it is contemplated that the 80,000 War Refugee Board parcels still in Switzerland will be cleared out of Switzerland within the next two weeks. This clearly points un the need for the orisoner of war parcel which General O'Dwyer reported to you yesterday had been arranged for with the War Department. Mr. McClelland was delighted with this news and he will work out at once all the details of repackaging in Switzerland. Kr. Katzki has arrived in Switzerland from Paris and will stay in Geneva for the next week to work closely with the International Red Cross on the details of this program. With respect to evacuating refugees to Switzerland, reported that it is expected that a McCielland truck convoy will arrive in Switzerland very shortly bringing 300 women, children and aged people. He stated that the Gernana had not yet finally agreed to the use of our trucks for evacuating refugees to Switzerland. Jacme Hodel C 0 27 INCOMING DEPARTMENT OF RECETELEGRAM STATE DIVISION OF 28 CENTRAL SERVICES TELEGRAPH SECTION -2- #1988, April 6, 11 a.m., from Bern. DIVISION Bern DD3-747 Distributor of true Dated April 6, 1945. arrangement. (SECRET in Rec'd. 12:35 p.m. reading only by fith tires and ditarl oil procured for ICRC by board's efforts committee hopes make at least four trucks available also next week for our 00/ LIAISON Scorctary of State program. Since it 10 quite possible that only areas of Washington Munich and to cost and northeast thereof will be US URGENT accessible in future it is planned to direct relief 1988, April 6, 11 a.m. shipments by truck mainly to these regions taking FOR O'DWYER OF WRB FROM MOCLELLAND. EXTENTION in camps of Dachau, Landsberg Amlech, Flossenburg Arrangements with ICRC for securing trucks to transport URB food parcels into Germany for civil detainees are shaping up as follows: Six and Mamthausen near Linz, including emergency relief to evacuated deportees on roads. These 0 shipments would be apart from any that might go Renault trucks will be available for loading morning to Lucbeek area. April 9 and should depart on April 10. ICRC's Division of Special Assistance still hopes and them to Berlin - Luebeck - Hamburg area to relieve Recent news from Germany indicates that al- most all internal telephone and telegraph comunications art disrupted no that individual camp rapidly worsening condition of detainees in con- comanders are progressively more isolated. Little or no centralized 33 control, therefore, appears centration camps of Oranimburg, Ravenabrucck and Hamburg Ncurngamnc. If it proves impossible to exist which may tend to preclude any general to dippatch trucks this area they will be sent last minute Extermination of large group civil Hunich region and cast. detainees. Prospects are good getting four to six more Renaults moving by April 13. These French trucks, athough new, all TEO quired light overhauling, painting with ICRC insignia, et cetera, which has delayed their USE. With tires ICRC reported this afternoon that truck convoy carrying 300 French women and small children, 0 presusably civil detainees, is expected to arrive 29 30 3. #1988, April 6, 11 a.m., from Bern. arrive Kreuzlingen tomorrow. Exact area or camp from which these persons ME-749 Barn This telegram must be perspirated before being Dated April 6, 1945 communicated to anyone other than . Government Agency. (RESTRICTED) come is still unknown. Herbert Katzki arrived this afternoon, April Heald 1:32 p.m. Secretary of State 5 from Paris and will actively work with me on Washington these WRB programs. 1996, April 6, 2 p.m. All further significant developments in situation will be reported to Board. AMERICAN INTERESTS GERMANY. Department's 1061, March 14, 1127, March 19. HARRISON JT MiCielland will endeavor include in Philippoville convoys all six civilians this far certified as for travel (Fround, certain and Being Hassenberg, Rechal Fuldauer and two children). In event three remaining sick civilians, Berthold maller (Haitian), Jacob Levy (Honduran) and Redelph Freedman (alleged American) are physically able undertake journey before two refugee groups leave Stiteerland, Legation assumes Department would be agreeable their transfer to Philippeville. HARRISON JMB C 32 31 April 6. 11 - free Dora #1968 Bays C Recent save free Gereray Indicates that almost all internal telephone and telegraph 0 Dated April 6, 1945. catters are disrupted .. that individual camp commandere are progresively sere iselated Little or as centralized as central, therefore. spoears Rec'd. 12:38 P.A. to exist which may tend to preclude any general last simule extermination of large group civil Secretary of State detainess, Washington ICRO reported this afternaon that truck canvery carrying 300 French women and small children, US INGEST presumably civil detainers, is expected to 1988. April 6. 11 .. arrive Kreuelingen Direct area or CANS free which these persons Arrangements with ICEC for occuring trucks to transport VRS feed parcels into Germany for case 1. still unknews. Resuult tranks will be available for leading meraine April , and should depart en April 10. ICNC's Division of Special Assistance still hopes send 5 free Paris and will actively work with as .. civil detainess are shanise up as follows: Six then to Perlis Lasback Hamburg area to relieve rapidly versening condition of detainess in contration campe of Oraniemburg. Revensbruch Herbert Kataki arrived this afternoon, April these VRD programs. A11 further significant developments is situation will be reported to Board. and Hamburg If 11 proves impossible C to dispatch trucks this area they will be sent Munich region and east. Prespects are good getting four to six are Resuults noving by April 13. These French tracks, although new all re quired light everhauling. neisting with ICRC is signia. at cetera, which has delayed their use. With tires and diesel oil precured for ICRC by Heart's efforts committee hopes make at least four trucks available also next week for our press Since 11 is quite pessible that only areas of Kunich and to east and northeast thereof will be accessible is future " is pleaned to direct relief shipments by S neck mainly to these regions taking is CANDR of Dachas, Landesberg Aalech Flessenburg and Manthouses Beer Line, including emergency relief to evacuated depertees es reads. These shipments would be start free any that eight go to Luebeck area. MARRISON JT PRECISION TRADE MARK MICROSTAT MICROFILM 33 Born Dated April 6. 1948 Rec'd 6:35 P.S. Secretary of State Vashington US 2009, April 6. . P.S. FOR O'INTER OF WRS FROM Immediately fellowing your telephone call I contacted ICRO regarding possible need for repacking 206,000 Address POW parcels where release to ICRO for WR program is Germany yes have just obtained. ICRC states that under present conditions of C distribution is Germany it will definitely ast (repeat not) be necessary to repack these parcels. They can be used as they are with exception of possible blacking out of markings, changing labelling. at cetera, all of which can be dene leadly. These parcels will, therefore. be almost immediately available for our VRB relief shipments. KARRISON as 35 34 0 CAHLE TO AMERICAN LEGATION, BERN, FOR MOCILLAND, PROU WAR REFUGEE BOARD Please deliver the following message to Mrs. Hara Klee, c/o Pelico CAHLA TO AMERICAN EUHASSY, HOUS, FROM WAR REPUBER BOARD Deneva, 1 Rue do Ithone, from Dr. Abrahan Silberschein of World Jewish Congress: Please deliver the following message to Joseph Schwarts, Rose, from H. A. Leavits of American Jewish Joing Distribution Consittee QUOTE PLEASE PROCURE DOCUMENTS SKIJA SARA SALLHEIMS BORN APRIL 16, 1884 HAUPSTRASSE 8 INDE KLISABETH MANDEL DECEMBER 14, 1930 DELISTEN STEPHANIE CHCILIE AND JUNE 17, 1933 DRESDEN THERESIMISTADT LOUIS JACOB JUNE 12, 1895 KVA JACOB NEW SIKING AUOUST 6, 1912 MBRLIN ANNALIESE JACONT SUPPORT 14, 1934 ERLIN SEORCE QUOTE PRETERICH WHITE APPLIED POST OVERSEAS BORN AND SEPTEMBER 25. 1861 LUBLINTZ GENTRUDE KAIGE NES KAUPHANN - TORK JANUARY 25, 1900, EDUCATED RAISED EUROPE DECEMBER 22, 1877 WISSHADKS STOP ASK MY UNMARRIED EXPLOYED AS RESOUTIVE DIRECTOR AMOUTCAN STATEDINIAN IF SUE HAS NEWS SKINA SARA SALLNETN STOP ADVISE LOUISE MANN HAVE SHEN HUSBAND WILLING TO APPLY FOR VISA STOP INQUIRE KLSS FISHI ADLISHIL ABOUT ANNA FISCHER NOCK JENTSH CONTRESS CHICAGO OFFICE FAST FEV% THARS STOP ALTHOUGH LACKING SOCIAL SERVICE EXPERIENCE inc FAS COMMUNITY ORGANIZATION EXPERIENCE AND IS ATURE INTELLIGENT PERSON ADVISE SOONEST WHETHER in SHOULD KNOADE HIM UNQUOTS TAUSSIO ATTRESSING STOP FIOND.TRASPASSPORTS FAMILY ASK ATTORNEY HEYWAND STOP TROPP SUBJITTED TO SISTICINIAN STOP ASX KLARA CAPO LIMERATED THORESIENSTADT ABOUT PAUL FAMILY. UNQUOTE THIS IS WEA HER CARLE NO. 480 4:15 P.M. April 6, 1945 4:15 Pall. April 6, 1945 37 36 C CABLE TO AMERICAN LEGATION, STOCKHOLD, FOR OLSEN, FROM WAT REFUGES BOARD CABLE TO AUGHICAS LEGATION, SEEN, FOR HOCLELLAND, PROU THE TAX REFUGES HOARD Please deliver the following cassage to Frita Hollander, Fostbox Please deliver the following cessage to Saly Mayer, St. Call, from % A. Leaviss of American Jewish Joint Distribution Committee CHOTS JOHN FLATORY, UNIONGITY NEWJERSEY, IMPORTANT FRIEND OUR ORGANIZATION RECEIVED REGIENT APPEAL HELP HIS NEPHER, MARCEL GORIG, DEAK VIRGENCE UTCA 17, HODAFIST 4. 102 AUTHORIZE YOU GIVE NECESSANT 7306, Stockholm, from yourt Grossnan of world Jewish Congress: QUOTE RECARDING FOODPARCELS HORDENHELSEN PLEASE OUT NAMES SORIETTE VA TIJN, MELINA UNQUOTE ASSISTANCE. PLEASE IMPORT us expected UNQUOTE his 15 an STOCKHOLM CARLE NO. 348 THIS is again CANCE NO. 489 4115 p.m. April 6. 1945 4.15 Palla April 6, 1945 39 38 CABLE TO AMERICAN ENHASSY, MOSCOW. FROM THE WAR REFUTER BOARD Please deliver the following measage to Keil Sonnerstein, Aurahan Bersan, central Committee for Folish Jown, c/o Jewish Antifascist Committee, 100 c ow from Arieh Tartakover, Chain Pinkelstain, World Jewish Congress: CHOTS HATT LEARNED FROM PRESS ABOUT YOUR ACTUATIVE AND WONDAL IST NO COMMUNICATION FROM YOU UNTIL NOW AFAITING YOUTH SUGESTIONS AND COOPERATI N PLEASE INFORM ABOUT YOUR MEEDS, PLEASE COMPILE AND DESPATO us LIST JENTSI SYNVIVORS CONTAINING NAMES ACRE PARENTAIZE PREVIOUS PRESSIGNT ADDRESS AND IF POSSIBLE NAMES ADDRESSES RELATIVES AMERICA on ELSEMHOUSE OUR DIVISION FOR DISPLACED PRESCTS SUCCERDED IN ACCUMULATING OVER 100,000 NAMES JENTISH NOW SCATTIHED ALL one WORLD OF WISOM HALF APE POLISH JENS REPUBLES IN CARLE TO AMERICAN DIRASST. LISBON, FROM THE WAT REPUGEE BOARD Please deliver the following cassage to Harold Trobe from V. A. Leavitt of American Jewish Joint Distribution Committee QUOTE ADVISE SCHNANTZ HIS IMPRESSION SECONDOUS AND NB STILL MUST LORGE LARGER REDUCTIONS MONTHLY BUTCHER'S ISSPECIALLY DURING SUITED MONTHS. MARCH APRIL BUDGETS WORK APPROVED BASIS HIS REDUCED RECOMMENDATIONS DESPITE FEELING SOME CONTINUMICK THIS BASIS VAT ASCESSITATE SHARPLY DECREASED NUDGESTS MONTHS. MARCH BUDGET SWITZERLAND $900,000 INCLUDED $100,000 CARRIED OV R FROM 1944 REFUND PURCHASES TURKEY, SOVIET RUSSIA. JENS ARE KACHE TO LEARN ABOUT FATE OF HIVES CHILDREN PARKINS CABLE CRESTING. UNQUOTE THIS IS YOUR LISHON CAHLE MO. 165 4:15 P.T. April 6, 1945 4:15 P.M. April 6, 1945 41 40 O CARLE TO AMERICAN ROVE, PROW THE WAR REFUGEE BOARD CARLE TO AMERICAN LOCATION, STOCKMOLA you OLSEN, FROM YEAR REFUNES BOARD Please deliver the following measage to Hilel Storch, Postbox 7306, Please deliver the following message to Dr. Schmarts from 11. A. Lesvitt of American Jewish Joint Distribution Committee: QUOTE MAX PRODUCES RECONSTIORING PREPARION ACCEPT OVERSEAS to YOU ISH APPLY POST OURVALIDATION PASSPORTCONTINUING TRUST. ASSIGN IN DAILYKIM EFFORTS RECRUITING PERSONAL RAVE THREE on FOUT INVEDTATIO PROSPECTS. WILL KOUP YOU ADVISED AWAITING YOUR TEEPLY RK VITEIES Stockholn, from krish Partakower of World Jewish Congress: LOOTS integust improve us THAT FOR JERS FROM FRANCE AND REGARDLESS or THERE NATIONALITY THE GERMAN AUTHORITIES PAYS ADREST THAT IRC DELEGATES CAN VISIT CAMPS AND DISTRIBUTE FOODSTOTY CLOTHING INDICINES TO THIS BUT CLOSS DELUGATE WILL ALSO RECEIVED LISTS or NAMES PERSONS INTAINED CONCENTRATION CAYPS. CONSIDER THIS SITUATION IMPORTANT FOR YOU ACTION. UNLOOTE ASSIGMENT. UNQUOTE THIS IS TOTAL STOCKHOT NO. 347 4:15 P.M. April 6, 1945 4:15 P.M. April 6, 1945 ION TRADE MARK NOT TO BE RE-TRANSMITTED COPY NO. 4 42 SECRET OPTEL No. 110 Information received up to 10 a.m., 6th April, 1945 MILITARY WESTERN FRONT. 1. Southern Sector: French troops have entered Karlsruhe while further north clearance of Aschaffenburg and Lohr now completed by troops 7th U.S. Army, elements of which have also crossed River Main at points ten miles S.E. and two miles N.N of Wursburg. Central Sector: On 3rd U.S. Army front two parallel armoured thrusts with infantry clearing most of intervening area, have captured Suhl and Hotha, while further north Mulhausen has been surrounded and armour pushed ten miles beyond this town. Operations by 1st and 9th U.S. Armies to compress Ruhr pooket from south, east and north, made some progress against strong resistance while to N.E. this area armour of latter Army advanced to within two miles Hamelin. Northern Sector: British Airborne troops and Armour have cleared Minden and closed up to River Weser on 15 mile front north of that town in which stretch river has been crossed at two places. while further west armour has advanced 25 miles to within four miles Diephols. North of Rheine gains of 5 miles made against strong resistance and Hengelo cleared, while still further west troops of 4th Canadian Armoured Division have captured Almelo and on extreme left flank stiff opposition being encountered in area Arnhem. EASTERN FRONT. 2. Northern Sector German remnants on coast north Gdynia now mopped up. Central Sector: Russians made further progress in Polish Silesia and Slovakia. Southern Sector: Advances made east and south of Vianna while road to Linz cut to west of forner town. Further advances also made across Hungarian and Yugoslav border. 3. ITALY. 4. BUBKA. On 8th Army front British Commando troops captured several small islands in Lake Comacchio. On 5th Army front attack launched by U.S. forces made progress towards Massa. Coastal Sector: Our forward troops now two miles from Taungup. AIR C WESTERN FRONT. 4th/5th (night). Bomber Command des- 5. patched 1173 (18 missing 615 against two synthetic oil plants Merseburg (1958 tons). 328 synthetic oil plant Harburg (1017 tons) 35 Berlin, 31 Magdeburg, 30 seamining and 134 other missions. Halifaxes probably sank one 4000 ton ship off the Skaw and damaged one 2500 ton ship off Larvik. 5th. 1035 U.S. escorted heavy bombers (21 missing or outstanding) attacked Ordnance Depots Ingolstadt (354 tons Grafenwohr (371 tons) and Furth (141 tons) Rail centres Nurnberg (805 tons). Bayrouth (257 tons), Plauen (348 tons) and other targets (279 tons). SHAEF (Air) medium bombers 145 attacked supplies in Southern Battle area while 1853 fighters and fighter bombers (13 missing) operated whole front destroying 92 locomotives, 658 M.T. and 455 railway vehicles and at same time inflicting enemy aircraft casualties 17 in combat and 97 destroyed on ground. Coastal Command Mosquitoes attacked convoy 51 miles E.S.E. Allborg when 6 ships averaging 1500 tons each left sinking and seventh on fire. 6. MEDITERRANEAN. 3rd/4th, Heavy bombers dropped 159 tons railway centre Novska (60 miles S.E. Zagreb). 4th, 944 tactical sircraft attacked communications and other targets North Italy while fighters destroyed 25 1000motives on railway Munich-Linz. 2 44 TREASURY DEPARTMENT WASHINGTON April 7, 1945 m Land-O-Lakes notive in behalf of Bretton foods. Holman is now lobbyist for the Milk Producers Association. We have contacted him and will have his over here the early part of next weak, at which time he will lunch risk Harry Witte. 15m is a vigorous lobbyLat and will be a worthwile Dear in Secretary: addition to our camp if in can got him. There is a 50-50 chance. This is the represe you adidas Date . for related up cm the 3. the following organizations have endorsed Bretton Goods I - joing to distate it and reas for . train, 20 11. Committee on International Trade, New York, . Y. and The Tuxas Cotton Loray will sign it for 20. Association, Waco, Texas. life are going to nee that these resolutions are inserted in the Congressional Report. 1. 10 have complated with the Hollywood Dang- 4. is have been working os S. Glay William, President of the aratic Counti Sec for a half-here radio program ori Leating on the feat Coaat at 7 - Sustam Tax Man, OTHER this lue Natwork. Asmolda Tobacco Company. William is now in a receptive frame of ind and will have lunch oarly next woold with White. From there we will fan out in the tobacco industry. the first 20 sinutes will be = transfination of world accuraty with 4 east including Walter lette Davis and Olivia da Cavilland, The Last 9 rdinatos all be even to un for a speeds on retto foods eden all the incortance of Cresson 5. will Harga called together 24 of the top people in the novie a job and industry in New York last Washmaday night. White Goods in the world security picture miss Jusa Surt ones in vent docator learns to sales that speech. Harry milto unit that to shon. Health aplandid selling Harry they are ready went to up & and to work. talked you will Issued methor or not in should to appropriate and how. (I tidak it to best to have the timat conservativo speaker on title Tragas. the is being vary thoody next will not sale Table or Allow.) 2. The and will in 4 corporate untition out Sandays The uniness and Distustry for rettos Officer have bost openal in the Happevelt Hotel in Love 2016. sufficiant funds have been provided for 0000 name. Louis 11.1% who was to come in har% an not state, - cigare divorted to Stand York to serve as Executive director of uses (291) A property DAR drains 42 Mich is accellent. its are with saying to increase an the Inviting Consultion, and will peral out 1,000 tolegraut ast lates than . resid from today to invite a select list of 125.3 to join. It Lm probable Was Vairlass, President of the . Steal Corporation, will serve as delivere. I have talka to Tairloss about cretion Moods and - is favorable. - dora to Dose Orleans to seet its assi vest to clinah the deal. Qtopes MISS I an colleving - on this Monday and Tuesday and will get these people active In a number of ways. hope to get all of them into the Business C Banta Committee and to have than entertain members of Congress at a reception in Washington, at which time they will - with the help of none of the stare - tell the Congressment how and why they are for lirettos Woods. There are many other ways in which they can be helpful. 6. 1 have followed up with the small basiness contacts add at Harry NaverLoke moeting last week. One specific thing has grown out of this already. The House Scall Business Committee is holding field hearings in cleveland, 31. Louis and Chicago. At our request, they are going to have outstanding small business people from those committee testify on the importance of retton Goods to mall business. Than, the relation of the legislation to the problems of that group will be highHigh in pablicity anameing from those commities and not from Washington Those hearings are being held in St. Louis and Chicago beApril 24 and 27. are expected to parking in the Laviting Consittee 42% Charles 7. 4s have arranged with Americans United to call together the work= in heads of various organizations who have expressed favorable reaction Busst of Stowning Lives, and others. particular, toward the Louse Committee. Lacford and I will discuss 3. Wilmon of General Electric, 2111 Crocker, President of 124 Greeker National Unit in San Transince, Mr. Ballis of General Mills, The first official not of the Consittee will be Allypaid ads in State York and challenges You will resell year suggestion was - as Nolam, famerly for to reston goods - with a view to coordinating their efforts and, in strategy with then on Todnesday afternoon of next veak. ( 45 -3 0 8. As 4 result of a neeting Demotain and I bad with @0040 fifty members of the Advertising Consisted on Public Affairs in (Few York, that consittee has prepared copy for a very fine paspilate on Stretton Woods, and is working on a number of other items which they will wake available to any organization wishing professionally prepared material. 9. 20 you logon, 1 cancelled your appearance on Mary Margaret radio program next Twenday. This does not preclude your going on at sousa later date, as they are most cooperative. 10. We have arranged for # number of speakers on retton Woods at meetings in various cities. 11. The fictions2 broadcasting Company is divarting its program, Up Averica® to a debate on Crotton Goods on Sunday, April 15 at a - 6:30 Pall. Class Pepper will debate Senator Tafl. so are giving Papper scull proutice next ruck. 22. I an avelostas the first International Latex is which is appear- And in as between yestering, April 6 and next Thursday, April 22. 13. It say interest you to know that the Denocratic National Committee reports that they have prontaus from Congreadown Baldwin and carry that that will not approve linetton Mooda in the Committee or on the Floor. This is a result of considerable prospero brought to bear in a number of ways. 14. I thought you would like to know that the title of Frank Cervasi's article on Gretton foods in Collier's magazine - to appear about 5 or 6 weeks handa - will be "Bretton 30018 or World Mar 1117" Tide will be the leading article and will be listed on the gover of the magazine. Sincerely yours, Sandal II Bherry 2. Leroy Honorable New Morganthau, Jr. Hotel Shortson Pleas, Daytona Mouch, Florida Zaclosure. Preventing Future Wars BRETTON WOODS New that the Allied armier are sweeping through to plan the political machinery for preventing agree sion Germany now that the war is Europe is being wom and victory in the Pacific is assured is is time to prepare for peace. For victory alone is not enough we learned after the last war. Not only must the war be won, but the peace must be built it must be built And that is why, at Bretton Woods we joined in planning the machinery for expanding world trade, for amuring prosperity, jobs, and security for all peoples. The Bretton Woods agreement calls for two things. solidly, built to endure. It calls for . World Bank through which the United After the last war, we fell down badly on the job of building the peace. We did not work out effective Nations undertake to guarantee approved private loans for economic reconstruction, and to make direct political machinery to call . halt to political aggree sion And we did not construct economic machinery loans when circumstances require it. And it calls for . Monetary Stabilization Fund to stabilize the nations' to create . would basis for world prosperity. Because we lacked the machinery for joint economic action, each nation of the world was forced to strive blindly for itself. World commerce was soon poisoned with national jealousies and national sharp-practice The marts of trade were transformed into arenan of currencies in their relations one with another, and to provide for the orderly adjustment of those relations through joint action. The two Bretton Woods proposals are of vital im portance. They lay the foundation for world trade and world prosperity. More than this, they testify to economic warfare. the determination of the United Nations to work and The deterioration of world economic relations the collapee of foreign investment, the wifish manipu- lation of national currencies, and the disintegration of international trade into primitive barter these things did not by themselves bring on the second live and do business together in peace no less resolutely than they have fought together in war. It will do this country and the world little good If America turns its back on political isolationism only to continue in the path of economic isolationism Po- World War. But they did set the stage for it. And this was only the first stage. Economic conflict political aggression war, in all its stragery and destruction these followed inevitably one upon litical collaboration political friendship between ne tions cannot long endure if in their economic relations which determine the work. wealth, and happiness of mankind-nations act on the principle of dog eat dog. the other. That is why we business corporation submit that Our Second Chance it is in the interest of every man, woman and child in of lasting peace. Weall know there will not be third That is why we have joined the other United Nations - this country, and in the interest of world peace and security. that Congress ratify the Bretton Woods propoeals without delay. Presented AS A PUBLIC SERVICE by PLAYTEX PARK INTERNATIONAL LATEX CORPORATION * Today we have . second chance to build a structure DOVER, DELAWARE PAID ADM VERTISEMENT BUT MORE WAR BONDS I head TREASURY DEPARTMENT WASHINGTON April 7. 1945 TO: Secretary Morgenthau FROM: = 1. Fussell Subject: Bar Loan Promotion Material After consultation with Mr. Geable, Mr. Lane and others in War Finance, I is moving in an exploratory way to get certain data which I believe will be useful in promoting the Seventh War Loan. 1. A series of specific questions deeling with Okinews and Two Jim operations has been drews up is Mar Finance. These questions are all or virtually all directed to the Navy. I have accordingly taken the liberty of drifting . proposed letter from you to Secretary Forrestal, to go with the questions, if you approve. (A copy of the list of questions is also enclosed for your convenience.) 2. More than . half million American homes have received telegrans that members of their families have been wounded in action. It seens to no that the care being given these wounded non, the retraining of those who are permanently disabled and the benefits that are provided for discharged veterans generally provideo one of the most appealing thesea for purchase of Nor Bonds. I think probably the best way to present it is to show what happace to some individual G. I. Joe from the time he is wounded. It might be presented in . major speech by you or in a radio dranstination or otherwise. Immediately I as just moving to get together what material is already available. If this proves insufficient, letters to the Secretary of Mar, Secretary of the Navy and/or the Veterana Administror may be indicated. I an not suggesting this action yet. May I include my hopes for the speedy recovery of Mrs. Morgentheu? MICROFILM MICROSTATI PRECISION APR 11 1945 APR 11 1945 Dear Jim Dear Jim: A you know, the Two Jim operation is providing us the these for the Seventh Bar Loan Drive, and of course A. you know, the Iwe Time operation is providing us the these for the Seventh Ver Loss Drive, and of course your Okimin operation is providing the immediate spot name your Okinews operation is providing the immediate spot news from the Puelfie, and very heartenine news indeed. from the Facific, and very heartening news indeed. I would like very such to present, during the Drive, as many feets as possible, relating to the cost of these and any other current operations, with . view toward show. inc the people just why their dollars are needed by the Government, and how Tax Bond dollars are being spect. The For Finance Division has (mited a series of seecifie questions, which I as enclosine. one group of questions dealing with Oklness and the other with Iwe Jime. I would appreciate whatever data you and give us. in answers to or I realize that two very I would like THE much to present, curine the Drive, US may feets as possible, relating to the cost of those and and other current operations, with view toward showing the people just why their dollars are needed by the Government, was how Tap fland dollars are being spent. The for Finance Division has (mited a series of specific questions, which am enclosing. one group of questiona dealing with Okinown and the other with INO Jime. , would appreciate whatever date you one give us, either in specific namers to these particular questions, or athenise. realise that two very different feetors are to may of current are involved in many of these questions - one the current excenditure, the other the capital Investment represented in shipe and the training of no. And of course the after cost of committee and veterans' benefits are also involved. For this reason do not west to be arbitrary in saking that every question be reserved estacorically. But the more specific and current the information 10, the mere help 11 either otherwise. involved specific these these questions -- particular different one questions, the factors expenditure, the other the capital investment represented in whipe and the training of - And of course the after cost of annualties and veterans' benefits are also involved. For this reneal t do not west to be arbitrary in asking that every question be answered categorically. But the more specific and current the information 1s. the more hels it will to in selling For Bonds. will be in selling For Bonds. Sincerely Sincerely (stemed) Sents (Signed) Easty Hanorable James Forrestal Secretary of Navy Washington, D. c. James Forestal Secretary of Mary Tuestington, D. C. LICENSE L/7/L5 4/7/45 PRECISION MICROFILM MICROSTATE ROLL NO. 51 APP 1945 APP 11 1945 Dear Jins our Jint is you know, the Ive Jine operation is providing us the these for the Seventh Tar Loun Drive, and of course As you know, the Ivo Jimm operation is providing us the these for the Seventh Tax Loan Drive, and of course your Okingon operation is providing the Insodiate spot name from the Pacific, and VIET hairtening news Indead. your Okinues operation La providing the Invodinte spot from the /notfic, and very haurtening news indeal. I would like very much to project, during the Drive, GS may facts as possible, relating to the GOOS or these and any other current operations, with view toward showInc the people just why their dollars are addition by the I would like very such to present, during the Drive, us many fasts as possible, relating to the cost of these and any other current operations, with view toward showlag the people just why their dollars are needed by the Government, and has Tax Total dollars are beine spect. Government, and how Tax Send dollars are being spent. The Fax Flanne Division has drafted a series of apecific questions, which : an enclosing. one group of ques- The But Finance Division has crifted a series of ape- cific questions, which as scaloning, one group of ques- tions dealing with and the other with Imp Jine. tions dealing with Okinewa and the other with Iwe Jine. I youth appreciate whatever case you our give us, I would appreciate whatever date you can give us. the is specific adidas to these particular questions, or otherwise. I realize that two very different fuctors either is specific annuars to thene particular esections, OF otherwise, I realize that two very different factors are involved to ma of those vestional - one the current mediture, the other the capital investment represented is miss and the training of - And of course the after are involved in anny of these questions - one the current expenditure, the other the canital Investment represented cost of committee and voterana' benefits are also involved. For this FOLLOW I do not sast to be arbitary in making cost of annualties and voterana" benefits are also involved. For this receive I 00 not want to be arbitary in making Met over cusation be compres estagorically. But the specific and current the Information is, the more hel 11 will to is selling Far Bonds. in ahipa and the training of sm. And of course the after more that - question be enswered entegorieally. But the more anoeifie and current the Information 10, the more help 11 will to in selling Far Bonds. Sincerely Sincerely, (Signed) Henry (Signed) Henry James Forrestal Honorable James Forestal Secretary of Navy Teshington, D. C. Secretary of Navy Washington, D. C. C UNITED 4/7/L5 0 KBF1WN LMILS PRECISION TRADE MARK MICROSTATA MICROFILM ROLL OKINAMA INVASION 3 Assembling of shipe for the Okinews Invesion started months ago. 1. Rehearsals for *L-Day* (Investor Day) took place at bases thousands APR 11 1945 of miles apart and thousand of siles from the Ryukyus. Now much 414 these so-called *rehearsnis" cost? Nine-meeper fleet cleared 2,500 square miles of ocean off the 2. Dear Jim west coast of Okinewa. (Note: According to reports, not a transport As you know, the Iwo Jim operation is providing us the these for the Seventh there Loan Drive, and of course your Okinews operation is providing the imediate apot name from the Pacific, and very hourtening news indeed, or cargo ship was hit by nines on "L-Day1") Cost of this nine-sweeping operation? I would like THEY much to present, during the Drive, as many facts as possible, relating to the cost of those and any other current operations, with view toward showInc the people just why their dollars are needed by the The Kerane Islands were captured on March 26th where heavy artil- 3. lery was emplaced to support the rain landing on Okinews. Coat of Government, and how For Bond dollars are being apart. taking the Karanna? The Sup Finance Division has crufted a series of specific questions, which I an enclosing. one group of questions dealing with Okinews and the other with Iwo Jine. Softening-up of Okinews's air and naval strongpoints started on 4. I would appreciate whatever date you our give us. March 23rd. Correspondents report *1500 tons of 16-inch shells were either in specific answers to these particular customs, or otherwise. I realise that two very different factors fired into gun explacements and industrial area virtually wiping out expenditure, the other the capital Investment represented the town of Ninstogs" on March 26th. How much did it cost to wipe out cost of essualties and veterans' benefits are also involved. Elistoga? How much to neutreline Okinewal are involved to may of these questions - one the current is ahise and the training of mm. And of course the after For this reason I do not went to be arbitary in asking that every question be enswered outegorically. But the more speet and current the information 10, the more help 11 will be is selling Tar Boods. A fleet of 1400 veesels, from battleships to leading ships, went 5. close to shore to aid in establishing the benahhead on "L-Day." Cost Sincerely, of maintaining this fleet for one day? Cost of building this fleet? (Signed) 6. Menorable James Forrestal vital part in solving supply and repair problems. "Service Squadron 10" Secretary of Marry Teshington, D. C. C SERVING 4/7/L5 (a) Mobile Naval base - Navy's "secret weapon" - is playing , INC JIMA INVASION -2comprises several hundred ships of all types -- ammunition, repair, 1. The Iwo Jim invasion gave the "Mighty Seventh* floating dryclocks, oilers, water tankers, hospital and barrocke shipe. for Loan Drive its these. The total cost of this in- Amount of investment representing in this armada? vusion would be very useful to us. Also the tounage of the verious supplies used - ammunition, fuel, food, (b) Reports say 50 per cent more fuel is being consumed at median1 supplies, etc. Okinawa than in any other single previous operation by the U. 3. Navy. More than 600,000,000 gallons of fuel oil were required to get the amphibious force to objective. Cost of fuel oily Differential in cost compared with sine quantity for use in Atlantic? 2. The wounded from Imo were transported almost 7000 miles by 800 and air to Alee Neval Hospital Pearl Harbor. How much did it cost per san for transportation? (a) Planes will use gasoline to the capacity of 16,666 trucks and trailers. Cost of cas? (a) The task force ships were loaded with the equivalent of 1500 freight ears of ammunition - 2600 tons of food. Reports bring this tomage down to community level - "food would provide the entire populations of Vermost and Wyoming with 3 seals a day for 15 days, and medical supplies enough to provide 60 days of treatment for population of Columbus, Ohio. More than 1200 pints of whole blood were flown to fleet units." Total coat of supplying the tast force? Cost of components -ammunition, food, medical supplies? How much did it cost to fly the 1200 pints of blood from U. 3. port to objective? How much did is cost to transport supplies to Service Squadron 10" from United States? Next stop towards home, San Francisco, about 2300 miles. Cost to transport wounded ass from Pearl Marber to San Francisco MICROFILM 57 -2April 7. 1945 C 4. Imbin presented his document, which is attached, and read the document through pointing out those provisions with which there wan disagreement between himself and State. These provi- relateto the considerations governing the period of time sions and the amount of recurring reparations. Lubin said that he OF 10sting a REPARATIONS favored a long period of time with small annual amounts whereas State favored a short period of time with larger amounts. 1. There was D meeting today in Clayton's office nt State at 3:30 D.D. to discuss the Instructions to be given the United States representative on the leperations Commission. Those attending the meeting included: and Lathringer. Yes - Generals Hilldring and Draper. Havy Francis Downey. FEA - Jaces Perkins. Treasury - mite, Glasser and Du3ois. White House - Inadore Lubin. ( Clayton opened the meeting by asking whether anybody had a document to present. Lubin sale that he had doeument which he had been working on with the State Department, specifically the names of Mason and mentioning Hebetween said this there document seemed to be general Durre. agreement him and State on with such exceptions no he would indicate. 3. Clayton then suggested that the should first be read through in Its entirety and that tie should then read the by paragraph for comments and suggestions. cold he White, memorandum at this paragraph point, that thought it night be this n. road idea If, instead of trying to reach an agreement at Meeting on this document. which many of those present had not yet seen, the representatives of the various agencies takeamenias. the respective their should it document with Ing is n brief summary of the major points of discussion. Clayton, Mathews, Memon, Dupre State 2. 6. Clayton then proceeded to read the document through paragraph by paragraph and comments were sade on each paragraph. The follow- them and PO over in Another meeting could then be arranged to consider the document. Clayton said that be thought it would be useful if we could comment on the document at this meeting and have another meeting to finally consider the document. It was generally agreed that this procedure would be followed: with the understanding that no agency was making any final consitment at this time. 6. There was considerable discussion concerning the meaning of the following sentence in paragraph 71 () "The peoples in the devastated countries of Europe shell be even priority over the Germans in the determination of the standard of living, notal thstanding the effect of such priority on the standard of living in Germany." It and finally agreed that in the place of this sentence wethe would statement upon been had substitute the principle which agreed in of United States policy on Germany enproved by the President on March 28, namely that no action should be taken to support basic living standards in Gerasny on n higher level than that existing in any one of the neighboring United Nations. 7. Treasury objected to the following sentence In paragraph 7: *Sneelfie arohasis should be given to the controls Lanosed on the posulations of these zones so as to insure, so for as possible, that the burden of bearing the cost of reparations through taxes and other devices shell be distributed annual the various groups in the population in accordance with their ability to pay. After considerable it was finally agreed that this centence should be left out of the Reparations document although Clastos rade It clear that State felt that It would be necessary to Institute some form of rationing. He argued that if we were going to keen the living standard of the German people at a low level and not higher than that of any of the neighboring countries, it use necessary for us to see to It that part of the German -3- C population were not eating well mille at the same time another part of the Gorman population was practically starving. The issue was reserved for consideration in connection with the economic directive. C desolte the fact that, as was pointed out, such a provision had been contained in the Reperations Protocol. 10. It 12.5 agreed that Lubin would redraw the document in the light of the comments made at the meeting and would circulate the document to the various agencies for consideration at the next meeting. The next meeting - arranged for Tuesday, April 10, at 3:30 Pelle in Clayton's office. 8. There was considerable discussion of paragraph 12 of the document presented by Lubin, which provided that this Government favors as long " reparations period BE possible with ansual recurrent payments as small an possible. Treasury supported this position strongly while State, particularly Unoon and Dapro, opposed this position. .Mason nade the specific point that who undesirable to have reperations extend over a long period of time Insancol as it would be nonessary to icaes occupation troops In Germany in order to collect such reperations; that e did not want to keep United States Groops in Germany for 25 or 30 years; and that it would be politically undesirable to withdraw United States troops from Geruary while Russian troops still remained in Germany. Treasury pointed out why It WAS desirable to have reparations in as small annual amounts an possible instach as by so doing we would avoid the desendence of the recipients of reportions on Germany and could ivoid rebuilding the German economy. Treasury also pointed out that If reparations were collected in mall amounts annually this would not require maintenance of troops in Germany to collect such reparable one; and that in connection with the question of the maintenance of troops in Germany there were other considerations for more important than reperations which would deteralas the length of time during which such troops were kept in Germany. Clayton finally suggested that ges Josish E. DuBois, Jr. Attachment. no definite statement be cade is to the length of time or relative accounts of recurring proparations and that no merely Announce a statement of principle to the effect that recurring reportions should be fixed so == to svoid the dependence of the recipients an the German economy and to the to avoid the building 10 of the German economy. 9. With respect to paragraph 15, which provided that to the maximus extent possible reparations should be taken frea the national mealth of Geruany existing at the time of collepse and which specifically included "shares of industrial, transport, shipping, and other enterprises in Germany", Treasury suggested the elimination of this quoted portion of such paragraph. Treasury pointed out that this would permit the Uni ted Nations to take ownership of German factories instead of removing such factories from Germany and stressed the danger of such a procedure. There was general agreement that this quoted provision should be deleted, 59 -4- 58 0 ( 60 61 TOP SECKET SECENT I -21. It was agreed at the Talta Conference that Germany west pay in kind for 5. (c) It is the policy of this Government that the reparation the lesses caused by her to the Allied Nations in the course of the war. The burden shall be distributed insofer as possible as to impose equality of primary purpose of the Reparation Commission should be the formulation of & sacrifice upon the populations of each of the sones under the control of the general program for the exaction of reparation and the establishment of the respective occupying nations. policies under which program is to be implemented. 6. 2. The principal interest of the United States is to assure that the (d) This Government adheres to the principle exunciated in the Talta Declaration of February 12 to the effect that reparations program shall not jeopardise the economic and security objectives "It is not our purpose to destroy the people of Germany, of this country with respect to Germany. The position of the United States but only when Nasism and militarian have been extirpated will $ on the various issued involved may be susstrised as follows: there be hope for & decent life for Demans, and a place for (a) This Government favors . reparation program which would esult 3. them in the comity of nations.* in the elimination of industrial capacity in Germany considered to be Accordingly, the reparation exections imposed upon the German dangerous to the security of the United Nations. 4. (b) This Government favors a reparations policy which should aid in strengthening and developing industries in the devastated countries of Europe, including assistance to the liberated countries and other United Nations to expand their foreign trade. They should also be fixed and people should be such as to leave them with enough means to provide . low subsistence standard of living for her population without outside relief. 7. (e) The peoples in the devestated countries of Europe shall be given priority over the Germans in the determination of the standard of living, notwithstanding the effect of such priority on the standard of living distributed so as to increase, as much as possible, the living standards of in The level of the general standard of living should be the same these and other countries. TOP SECURT TOP SECRET 62 TOP SECRET -3for the German people in each of the sones under the control of the Allied armies of occupation. Specific emphasis should be given to the controls / 63 -4they are located. Such requisitioned goods and services shall not be considered as reparations. All goods exported free Germany shall be considered as reparations. imposed on the populations of these sones so as to insure, so far as possible, (3) In order to avoid the dependence of the recipients of 12. that the burden of bearing the cost of reparations through taxes and other reparations on the German economy for their economic existence, this Govern= devices shall be distributed among the various groups in the population in ment favors as long & reparations period as possible, with annual, recurrent accordance with their ability to pay. payments as small as possible. These annual payments should be so arranged as (f) This Government opposes any policy of reparations which will 8. to taper off toward the latter part of the reparations period. C put the United States in . position where it will have to assume the sua13. tained responsibilities for relief to the German people. (k) The United States reserves to itself the right to claim reparations from Germany to the extent of billions of dollars. (g) Payment for such minisus German imports as may be determined 9. The United States will not wish to receive its share of reportions in the to be essential shall receive priority over reparations. This Government form of labor services. It desires that labor supplied by Germany to meet opposes any reparations policy based upon the assumption that the United the claims of other countries for reparations shall be recruited primarily States will finance any reconstruction in Germany. from Nest groups, officers of the Wehrnacht, the Gestage, 53 organisations (h) It is to the interest of the United States to see that the 10. and those elements of the population who have cooperated in financing and payment of the costs of the occupation of Germany shall receive priority over building up the Hazi machine. reparations. 0 11. (1) In requisitioning goods and services, priority shall be -- given to the needs of the occupying forces, irrespective of the zone in which 14. (1) The governments participating in the Separations Commission will retain control over the disposition of German property located within 64 -5- 65 TOP SECHET TOP SECTION their respective borders. These nations will seek agreement with other in paragraph 15(a), recurring reparations, over a period of years, should be countries in which German assets are located designed to eliminate continued 1. As small as possible in relation to the reparations to German control, or the eventual return to Germann, of these assets. be paid in the form of industrial plants and equipment. 15. To bring about the realisation of these policies, you should undertake 11. Primarily in the form of natural resources, such as to secure an agreement in Mos cow on a program embodying the following ooal, metallic ores, timber and potaah, and not in specific objectives. the form of manufactured products. (a) To the maximum extent possible, reparations should be 16. It is recommended that one of the first tasks of the Reparations ComC taken from the national wealth of Germany existing at the time of collapse, mission shall be the establishment of the necessary machinery for the including the removal of industrial machinery, equipment and plants, allocation of such comodities and equipment for renoval from Germany as particularly the shipbuilding, metallurgical, electrical and chemical are not essential to the maintenance of the armed forces or to the conditions industries (including all industries producing oil and oil products, synthetic stated in paragraph 6 above. Immediate provision should be made also for nitrogen and synthetic rubber), ships, rolling stock, German investment abroad, the allocation of German holdings in neutral countries. shares of industrial, transport, shipping and other enterprises in Germany. Records should be kept of all deliveries made on reparations account (b) To the extent that reparations are collected in the form under such interis arrangements and such deliveries should be made without of deliveries of goods OVER a period of years, such goods should be of such prejudice to the final allocation of reparation shares. a nature and in such amounts as not to require the maintenance of the German war potential or the continued dependence of other countries on Germany after reparations cease. Accordingly, after the removal of such item specified TOP SECRET 0 TOP SECRET 66 TREASURY DEPARTMENT (2) Washington ASSISTANT SECRETARY April 7, 1945 FOR THE SECROSTARY: an Under Secretary or General Clay ASKS for/un Assistant Sicretary. I don't see how it is possible to comply with his wishes. It socar to no that the best arrangement would be to have Colonel Bernstein taken out of uni form and back into the Treasury as an Assistant to the Secretary, and assigned to the position General clay has in mind. I don't know whether the Army would be agreeable to such . step, but certainly if what they are looking for is a ran who could do the job, Colonel Hernatein, in my judgement, is the bent one available. A second suggestion, which might be acceptable to the Army, is Handolph Paul. AT former General Counsel of the Treasury and an expert on tax matters, he would be aa qualified as many of the nanes which the Arro has suggested from time to time. The could, of course, provide him with competent technical assistants. The only qualified persons in the Creasury who would be available are Harold Classer or Bill Taylor for the position which General Clay has in mind. General Clay might not regard then AS having sufficient prestige but in by judgment either one could do a better job than persons the AFRIC has suggested in the past. HOW 68 TREASURY DEPARTMENT C ROBERT E.McCONNELL ............... WASHINGTON 25 AKA/YONN The Plains, Vs. April 7. 1945 April 7, 1945 Middleburg, Va. 160 Henry Morgenthsu Jr., Secretary of the Treasury To: Sheridar Please Hotal Secretary Morgenthau Datone beach, Florida From: J. W. Pohle Dear Mr. Secretary: I an very DOFT to haur from Pitz this morning that Kra. Morgenthai is 11 and I sincerely hore she will have ND early recovery. The following is 0 summary report of several investigations currently conducted by the Procurement Yeatorde 1 NEW Knior Genaral Gle in weshington just before he took off for Europe. He has divided his control Division. The present procedure is to refer matters requiring investigation to Mr. Irey's office, accom- group into three divisional Military, Political, end Economic. Ench ermy officer will have . civilian fr = industry is -Item nate on deputy. I - anclosing the tantativo orgenigation Brik. Genaral William Desper Divisions Economic the for obser will be chief. Clay sakad as to not a Draper's deputy in Germany, or no onior of the Hear Kehelon in Washington. In any event be maked to to help immediatel, in securing the rapor 0 staff for the Economic Division. I think Clay hopes I will tions that office will be in at position to undertake investigations affecting the Procurement Division. This go to Germany for A year or so 0.0 Civilian Deputy of the Soonomic Division. 1s agreeable to Mr. caston, Charles Bell and Elmer Irey. 1 - enxious to est your judgement not edvi in the matter before meking on commitments. I also felt you might have and suggestions as to procedure. While neither Drepar said as much, I gether that the For Department is disappointed in the progress to date (or the promises for the future) that F. b. A. is showing on this job. It is possible that interpretation of broad policy state. ments will be left to the judgement of this Arm, Group and therefore it is important that the mon in the top coaitions Eugene Puhl An investigation into the sale of surplus commodities by the Procurement Division's Chicago Regional Office resulted in the suspension of Eugene Puhl, a salesman employed by that office. It appears that Puhl effected sales of various surplus items, particularly automobiles, to persons upon forged requisitions purporting to be issued by officials of townships in the vicinity of Chicago. The funds have ability, judgement. and daterm nation tomaize n thorough job if it this time. 1 shall be with Drapon most of next week it the Sr. for the purchase of these items were furnished by Puhl and Department and hope to by able to 200 you soon. his associates who resold the property at a profit. In some instances, the officials collaborated with Puhl by Sincerel/ journ, Minnell REM NEW Encl. 1 panied with all available information, and recommending the course which the investigation should take. It 18 contemplated that when personnel 1s recruited to staff the recently created Office of Complaints and Investiga- 0 issuing requisitions in the name of the township and converting the property to their own purposes. Excluding the factor of collusion by Procurement Division employees, this 70 -2case presented the problem of checking the authenticity of requisitions for surplus property by Government agencies -3Sparks E. Bonnett or persons entitled to a priority thereto, and establishing a procedure to assure delivery to the proper authority. This This individual recently resigned at our request has been done. as Deputy Regional Director of the San Francisco Regional Charles H. Kerr were chaotic. Subsequently we were informed that he had accepted a fee in procuring the award to a Los Angeles Office, when we ascertained that conditions in this office firm of certain oil filters offered for sale by the San The investigation herein raisen the question of the propriety of a Procurement Division employee acquiring surplus property from the individual who had purchased it from this Department. In this case, Mr. Kerr, a price analyst then employed by the Fort Worth Regional office, purchased two tractors at a slight increase in price from the original purchaser of these machines which had been sold as surplus by the Fort Worth Regional Office. Kerr Francisco Regional Office. Gilbert R. Endicott This investigation resulted in the suspension of a marketing specialist employed by the Denver Regional office for his failure to satisfactorily explain over $2,000 of bank deposits received from unidentified sources within a five months' period. Mr. Endicott refused to submit to further interrogation after certain statements he made in connection with these deposits were found to be false. The investigation is continuing and the suspension by this Department forestalled the employee's transfer to another resold the machines at a substantial profit. It appears that the purchaser from this Department was the high bidder at a "spot sale. However, the purchase by our employee under these circumstances is highly suspicious in that he was charged with pricing the equipment and his purchase at a slight mark-up savors of collusion. This investigation 1s still under way. Government agency. Sale of Surplus Property Pursuant to Certificates of Necessity Issued by Another Agency. The above cases indicate the necessity of constant vigilance to anticipate a certain degree of misconduct by personnel in the Department. TO minimize this problem the Procurement Division has promulgated certain standards of deportment to be observed by employees in the conduct of Government business. One of the functions of the office of Complaints and Investigations is to keep our house clean so that the public will have confidence in dealing with the The Kansas City Regional Office recently sold certain items of surplus machinery to a dealer who presented a certificate of necessity issued by the Smaller War Plants Corporation. Investigation disclosed that the dealer, instead of putting the machinery to essential use as had been represented, is selling this equipment to the general public at a very substantial profit. We are investigating our pricing procedure in this case and particularly since one of our officials apparently purchased a car from the same dealer to which Procurement had sold such car. C Department. PRECISION MICROFILM TRADE MARK ROLL NO 72 TREASURY DEPARTMENT 71 INTER OFFICE COMMUNICATION O DATE April in 1945 -4Secretary Horgenthau (For action) TO A typical illustration of fraud and criminality by purchasers of surplus property WAS uncovered by the invos- Subject: Entry of National City Bank people into Philippines. and : suggested that you telephone Secretary Stottinius tigation in the Panco case. The officials of Panco falsely represented to department stores, trade associations and others that they were designated by the Treasury Department 1. 11 Indicate to him that you would appreciate having the State Department refuse to grant passports to private banker@ to 60 to Manila until such time as General NacApthur has given permission for Tressury personnel to 100 forward. as exclusive agents to sell various items of surplus; that they had posted a bond with the Department to insure performance on their part; and that they had consumiated numerous sales in that capacity. They published and cir- of 267, State and Treasury Departments and the Joint Chiefa the 1== of 2. Staff now have under 0004 ideration the question City mediate departure for the Philippines of six National Bank people in order to re-establish in Kanila a branch indi- of the National Gity Bank. General NacArthur has already and eated illingmead to allow the Incediate entry into Manile cularized among their prospective victims price lists of various commodities which were in fact plagiarized from Army catalogues. When the Panco representatives discovered that they were under investigation they attempted to avade questioning by Mr. Irey's agents and It is now believed that their activities in the field of surplus property of the National City Bond people (Sin. Le Isuna of one queried to the Joint Chief: of Staff on the is now being 12c have received indications that 11 the Theater 0 others. grants 1720 necessary military permits, the State Department Consancer will grant passports to these people which would have collapsed. C Mr. Coe FC FROM paralt their immediate departure for Knile. 1000. No have DOOR informed informally by the War Department the that : General RecArthur Issu refused to live permission for immediate departure of Treasury personnel to the Phill are FLOS draftin 0 strong peply to be sent to General +0 will which will clearly indicate the which created for the Wheater Consunder 11 private banks are De to roopen prior to the re-establishment of Foreign of allowed office. General LiceArthur will be informed Duala Control complex Treasury regulations which have to be the many and revive banking business 10 reauned. enforced 02 soon U:10 watte. with the Philippine Commonwealth have discussedthey eiree on the need for the immediate FOR No of and authorIties opening of our Foreign Funds Control office in Kanila. 1. There is no urgent need for the peopening of private banks time vince the Commonweal th Governie at is making at this benifing facilities available by the establishment temporary of a banking division in the Consonwealth Treasury. 0 0 74 -273 PARAPTHASE OF TELEORAL RECEIVED In addition, Henderson 18 recommending more efficient FROM: , AMERICAN E.BASSY, CHUNGKING TO: Secretary of State, Washington check on government receipts and expenditures for which purpose DATED: April 7. 1945 he hopes to accure edvisors from America. Henderson seems NUMBER: 585 confident that T. V. Soons will strongly back his recommendations with the GeneraliseImo and will back more effective delegation ( SECRET of economic vowers than exists now. It 1s thought by us that Henderson's visit has already served a very useful purpose On the twenty fifth of March Leop Henderson arrived. He 18 returning to the United States with T. V. Soong and will probably have the opportunity to talk with Anbasandor Hurley at Cario. Leon Henerson appears in very short time to havenumerous acquired and and that his ability, energy and evident sincerity of purpose gomorehensive and accurate picture of situation here and of/varied Kearney, Adler facets (facter) facing him. He is considering recommending to the recommendations are sound and nerit our backing. Generalissimo, as a result of his survey. that there be established in the Chinese Government a powerful committee or secretariat on the lines of the British Jar Cabinet secretariat or our OEM to guide have favorably impressed all Chinese authorities encountered here. The foregoing repeated to Cairo together with our 533 of the twenty ninth of March, 0 AICH and coordinate proper activities of various Government agencies such as Food Ministry and Communications Ministry (in connection with transport control). This organization, as foreseen, DC/L:KLG would have an American of a stature similar to Henderson's as chief 4-13-45 advisor and competent American advisors for such fields as price control, taxes, governmental budget and 80 forth. In connection with price control, ve believe Henderson understands thoroughly that there is lacking here, among other things, both the governmental administrative machinery for operation of such control and A-1 officiale, merchants and the public, the will to make such controls work. The planned efforts of Henderson in this a O direction may therefore be limited to some essential commodities as suggested in meno summarized in our 533 of the twenty ninth of In addition March. of Chinese VPB and Joyner conour that his 76 75 -2- CABLE TO WINANT FOR MANN, LONDON, FROM THE WAR REFUGES BOARD For your information following is text of cable Fo. 2045 dated April 7. received free McClelland: vent after next total arreed being 20. They will be operated by ensoline released to ICRC by SHAZF for V33 process first tank carload of which is already on route "Additional to Ingention's 1988, April 6 regarding ICHC's Division of Special Assistance's plan for truck- from Marmeille to Geneva. in relief to civil detainees in Germany. *Our thirty tires and tubes have arrived and first advance of Diesel oil (Legation's 1981, April 5) will be *Five Renault trucks instead of six now scheduled leave Switzerland April 9 for Lusback carrying 16 tons relief goods and gamoline. This convey if feasible will offload supplies at Bergen Belsen en route, ICHC plans have these trucks remain and work out of Luebeck distributing WHB parcels, shipped over from Gatebore, to concentrations of detainees at Ravenabruch and made to ICKC today. Herbert Kntaki in now in Geneva acceleration arrancements with ICRC to take at least four care trucks available for MICH shipments on basis tiree and oil. Hamburg-Netsengame. ICRC is now checking with Gatebore -ICID informs se that in addition to above mentioned trucks small convey of five wood burning Swiss trucks belonrine to commercial transport concern of Breendli in on number of VKB parcels already at Luebeck all of which Basel will leave Switzerland next work in effort to get committee hopes be able distribute area in question within coming three weeks through to Denmark to repatriate Swiss citizens there. Braendli has agreed transport ten tons of relief goods to vomen's concentration CARD of Havenabruch for ICRC. "Present street of Luebeck Hanburn area in antivated by ICRC fear that this region may #000 be out off and by fact that no tracks are at present available in that tone for civil detained relief, Committee is accordingly 1 anxious send in more relief and means of transport to distribute 11 before 11 1# too late. "The four rueles which Stermbuch was fortunately able to rent (Legation' 1740, March 23) left Switserland on March 29 with ICRC assistance but headed for Theresien. stedt rather than Bergen Belmen BE previously reported." -Four more Renaulte with capacity of 3200 kilor each echeduled depart April 12 or 13 for Dechase They will also remain this area to distribute parcels to large number THIS 10 V12 LOSTON CARLS ID, 66 smaller campe administered from Danhan, ICHC further counts as being able this within next tes days by rail to new ICRC debot at Revensube between Swiss borter and Munica, balance of an roximately 50,000 was parcels remaining is Switzerland, Plan 1. then to acre these parcels on by trucks as rapidly as possible to accessible cares near Munich and to east and northeast thereof mortioned ay 1988, This trucking will be done with 11 more kenaulta which ICHO's DEA 10 due to receive 11:30 A.S. April 12, 1945 78 PLAIN Leader NG-1242 Distribution of true reading only by special arrangement. (SECURIT)W) Stockhola Dated April 7. 1948 Dated April 7, 1945 Rec'd 4:30 P.A. bec'd 2.45 p.m. Secretary of State Secretary of State, Washington Washington. 3575, seventh 1298, April 7, 2 P.R. FROM KARL G. HARRISON Report has been received from Evensen and Transal covering their operationsLin Norway during February. Through regular licensing facilities 675 packages were sent into Norrey containing about 10,000 k.g. foodstuffs, 2230 k.g. of clothing and 350 pairs of shoes. Approxinately 28,000 k.g. of foodstuffs were sent in through underground facilities, as well as shconsiderable amount of clothing, footwear and other material. This is our 133 WRB. In addition the group sent in through the underground about 2 tons of clothing and other supplies for certain Swedish organizations. Apr proxinately 1100 Sorwagians were brought to safety in Sweden during February through underground routes Department's 2576, April 3. 1945. The director of the intergovernmental committee on refurees earnestly requests approval of France and Belgium projects (Manager's airmail despatch No. 20343. January 12) already reved by British Government, and also Spain and Pertual projects (Meansy' sigges A-159 of February 17). I have studied these projects carefully is conference with 100 staff and receased they be approved without further delay. Funds carried ever free 1944 practically sufficient to finance all four proposals. Hust be approved by 100 executive financed in partics American labor relief. committee after British and American approval so further delay will greatly handicap effectiveness of action. Due to lack of funds aparations were necessarily ourtailed during this period. April 11. date of executive committee meetine. Would be most helmful If approval could be received by VINANT Johnson VTD in 10am Chauncey (for the Sec'y), Cohn, DaHois, Caston, Hodel, Butchison, McCornack, O'Dayer, Files 80 79 Ankare -3- #473, April 7. S.P.S., free Askare Dated April 7. 1945 Reg'd 11:43 P.M. Secretary of State, Washington. PRIORITY 473, April 7. P.O. Prior to the receipt today of Department's reference cable 1 had discussed with Tereia Office, the British Tebasay and the Syedish Legation the question of the 134 Jewish percent - board the BROTTRINGHOLM which 10 expected is Tetanbul es Monday. (REDIPTION 393, April a and Lenden's 19. March 28) Just prior to his departure en April 5 for the San Francisco Conference as . member of the Turk delegation, Actine Secretary General Bekin informed - these individuals were embarked on the BROTTRINGSOLM without prior notification to or the consent of the Turk Government that far If any of them have any claim to Turkish nationality: that the Turk Government would probably net (repeat not) permit them to disembark free the BROTTHINGHOLM even for . temperary stay is Estambul; was informed by Sumor that the Turk Government is pre- pared to permit the persons is question to enter Turkey in transit If the British Government will undertake to permit then to enter Palestine. The British Ambasseder informa - this afternoon that he informed Sumer during their conversation last night that be would telegraph to Leader (he has since done se) requesting instructions as to whether the British Government is willing to let these individuals enter Palestime under the quota scheme. Peterson states .... of the persons are German Jeve, some of other nationalities. No states further be cabled to Lender - Mays age on this subject and the reply be received did not ancourage his to believe these personal will be admitted to Palestine, 1 gather he feels reply free Leader may not be forth casing immediately. is view of foregoing Department may desire to discuss this phase of the matter with the British Government, had discussed this subject with Secretary of the British Sabasay at the time London's 19 case received and Hearned the cable referred to above by the British Abbensador had been east to Lessee The Secretary premised I would be informed when reply was received. Testerday the Swedish Minister informed - that If the Turkish authorities declined to permit these persons to disembark is Turkey all repeat all) Tarkish and it night and then all back to Sweden free Turkey nationals es board the sight be prevented Arkin that I thought any such action on the part of the free disembarking and takes back to Syedes along with on the return veyage of the BROTTHINGHOLM. I informed Turk Government eight have an unfortunate effect par- the 134 Jewish persons concerned. ticularly at this time. upon Turk-American relations is view of the publicity is the United States press that Repeated to Lender as 29. would be sure to attend any such action its part. In conversation yesterday with the Foreign Office official who has this matter immediately is charge 450, April a) I reiterated to his the point of view expressed to Sykia which be sald he shared, H. stated the Turk Government had not yet destited what position 11 would take with respect to permitting these persons to last at Istembel. I - the above mentioned patat of view last evening to the ressab Ashessader before he see the Action Tereign Minister with when he discussed this matter. The Foreign Office efficial last referred to above informs - this afternoon the Britten Ashassador PACKER JM ( MPRECISON - MARK 81 82 Bern -2 * #2045, April 7. 6 P.S., from Barn Dated April 7. 1948 Our thirty tires and tubes have arrived and first advance of Diesel oil (Legation's 1981. April a) will be made to ICRO today. Kerbert Katski is now Rec'd. 10:10 P.S. Secretary of State Washington 2045, April 7. 6 P.S. O'INTER or WRB FROM WOOLKLAND Additional to Legation's 1988, April a regarding ICKC'. Division of Special Assistance's plan for is Geneva accelerating arrangements with ICRO to make at least four are tracks available for VK shipments on basis tires and oil. ICNO informs se that is addition to above-mentioned trucks . small convey of five wood burning Suiss trucks belonging to commercial transport concern of Breandit is Basel will leave Switserland next week is effort to get through to Denmark to repatriate Swiss citisens there, Braendli has agreed transport tes tens of relief goods to woman's concentration tracking relief to civil detainess is Germany. CRED of Revenubreak for ICRO, Five Resuult tracks instead of six new scheduled leave Witsorland April 9 for Luebeek carrying 16 tens relief goods and gaseline. This convey If fessible will offlead supplies at Barges Belsen an route. able to rest (Legation's 1740. March as) left Suiteen ICRO plans have these tracks remain and work out of Lunbeck distributing VEB percels, shipped ever free The fourth tracks which Sterabue h was fortunately land on March 29 with ICRC assistance but headed for the Resienstadt rather than Bergen Balaes as previously reported. Getaberg, to concentrations of detainess at Revensbroack HARRISON and Kemburg-Femangame. ICRC is saw checking with Getaborg . number of WRB parcels already at lasbeck all of which cermittee hopes be able distribute area is question within caming three weeks, Present street of Luebeck Hasburg area is antivated by ICNO fear that this region may .... be out off and by fact that no trucks are at present available is that sone for civil detainee relief. Committee is accordingly anxieus send in more relief and means of transport to distribute 11 before 11 is too late. Four sere Renemits with capacity of $200 kiles each scheduled depart April 12 or 13 for Dechas They will also resain this area to distribute parcels to large member smaller camps administered free Dachas, ICRC further counte on being able ship within next ten days by rail to new ICRO donet at Revensube between Swiss border and Humich, balance of aproxinotely 50,000 VKB parcels remaining is Switserland, Plan is then to move these percels on by tracks as rapidly as possible to accessible campa near Munich and to east and northeast therent mentioned is my 1988, This trucking will be done with 11 are Resuults which ICRC'. DGA is due to receive week after next total agreed being 20. They will be operated by gaseline released to ICRO by SHAKF for WRB pregrans first tank earleed of which is already enroute from Mareeille to Genera. IDA MICROFILM TRADE MARK 83 84 0 NOT TO BE RE-TRANSMITTED COPY NO SECRET heads. every effort to liminate. To Fest this area U.K. and Canadian OPTEL NO.111 Armour made good progress on wide front with patrols reaching Sulingen, Moppen, Dalen and Deventer. Except in Veser bridgehead and along River Ijssel Enemy resistance light and scattered. Information received up to 10.a.m.7th April, 1945. 6. Eastern Front. NAVAL Northern Sector. Further reduction of Germans encircled S.E. Danzig while to North Germans report their forces as having disengaged and crossed to split of land North of Gdynia. Southern Sector. Considerable advances made Carpathian 1. Home Waters, 6th/7th (night) E-boats approaching the coast off and driven off by a British frigate and damaged Yarmouth MTB' when were one engaged E-boat badly and one MTB caught fire Zone where over thirty localities taken. Further South, but and sank. Thereafter other MTB's intercepted retiring E-boats sinking one and taking seven prisoners while our losses one North of Danube, River Morava reached on forty mile front N.E. of Bratislava, while south of Danube advance of 25 miles made Eastward from Bratislava and capture of place two miles South MTB sunk and another seriously damaged but taken in tow. Vienna reported. Still further South fifty places S.W. Lake 2. Mediterranean Craft Northern Soctor. Second British Army secured bridge- Across River Vener, North of Minden which Enomy making Balaton and on Yugoslav Territory have been taken. In Adriatic, Yugoslav Partisans supported by Coastal and LOC captured Pag Island (off Zara) and Karlobag AIR. (North Zara). 7. Yestern Front 3. Enemy Attacks on shipping. 6th, U.S. Escorted Heavy bombors 646 (outstanding bombers 9. fighters 5) dropped 1409 tons through cloud railway centres Leipzig, Hallo and Gera. SHAEF (Air). Medium bombers dropped 201 tons on three railway yards Central Battle Area, Ammunition dump Southern area and strongpoints Test coast of France, while fighters and fighter bombers 864(missing 9) operated whole front destroying or damaging 600 road and rail vehicles while also inflicting Enomy air casualties 13:0:13. 6th.A in convoy torpedoed and sunk by U-boat off isle or light when one fatal casualty suffered and 265 survivors rescued. U.S.Tenker (8537), torpedoed by U-boat off Cape Cod but taken in tow. 4. Anti-Submarine operations. Channel. 5th. U-boat probably mined and sunk in St.George's 8. Mediterrenean 6th Norwegian MTB 715 torpedoed large U-boat when on surface off Bergen. Promising attack also made off Cape Wrath by Liberator. U-boat also sunk(four officers and fourteen 4th/5th (night). Liberators 75 (missing 2) made concentrated attack railway centre Bescia (194 tons). ratings taken prisoner) off Isle of Wight by a British destroyer and a Canadian frigate after torpedoing a merchant vessel. MILITARY. 5. Yestern Front. Southern Sector. Units of Seventh U.S. Army advanced miles in area North Vurzburg where Bruchenau and $ Hamme twenty Iburg have been reached while despite Enemy counter attacks more ground gained in and South of Turzburg. Central Sector. Third U.S.Army Armour pressing First on Gotha and Yubhausen while Cassel now occupied. beyond continues attack Enemy Ruhr pocket from East and South U.S. Army where steady gains made while other elements in Yeser conjunction with those of Ninth U.S.Army now closing up to River have between Cassel and Minden. Armour of this latter Army secured Homelin in which area several small bridgeheads across River Veser have been established. 0 5th Escorted Heavy bombers, 504 (missing 1) dropped 876 tons on three railway targets, airfield and shipyards in North Italy and also 272 tons on railway bridge Yugoslavia. Tactical aircraft 1446(missing 8) attacked communications and other targets South Germany, Austria. Yugoslavia and North Italy with good results while inflicting Enemy air casualties 20:0:16. ( L 83 84 0 NOT TO BE RE-TRANSMITTED COPY NO. -2- 4 Northern Soctor. Second British Army secured bridge- SECRET heads. Across River Weser, North of Kinden which Enony making every effort to eliminate. To Fest this area U.K. and Canadian Armour made good progress on wide front with patrols reaching Sulingen. Mappen, Dalen and Deventer. Except in Veser bridgehead and along River Ijssel Enemy resistance light and scattered. 6. Eastern Front. Northern Sector. Further reduction of Germans encircled S.E. Danzig while to North Germans report their forces as having disengaged and crossed to split of land North of Odynia. OPTEL NO.111 Information received up to 10.a.m.7th April, 1945. NAVAL 1. Home Waters. 6th/7th (night). E-boats approaching the coast off Yarmouth were engaged and driven off by a British frigate and Southern Sector. Considerable advances made Carpathian Zone where over thirty localities taken. Further South, but MTB's when one E-boat badly damaged and one NTB caught fire and sank. Thereafter other MTB's intercepted retiring E-boats sinking one and taking seven prisoners while our losses one North of Denube, River Morava reached on forty mile front N.E. of Bratisleve, while south of Danube advance of 25 miles made Eastward from Bratislava and capture of place two miles South Lake MTB sunk and another seriously damaged but taken in tow. Vienna reported. Still further South fifty places S.W. 2. Mediterranean Balaton and on Yugoslav Territory have been taken. In Adriatic, Yugoslav Partisans supported by Coastal Craft and LOG captured Pag Island (off Zara) and Karlobag ( AIR. (North Zara). 7. Yestern Front 6th. U.S. Escorted Heavy bombers 646 (outstanding bombers 9. fighters 5) dropped 1409 tons through cloud railway centres Leipzig, Halle and Gera. SHAEF (Air). Medium bombers dropped 201 tons on three railway yards Central Bettle Area. Ammunition dump Southern area and strongpoints West coast of France. while fighters and fighter bombors 864(missin 9) operated whole front destroying or damaging 600 road and rail vehicles while also inflicting Enemy air casualties 13:0:13. 3. Enemy Attacks on shipping. 6th.A convoy torpedoed and sunk by off isle of "ight when one fatal casualty suffered and U-boat 265 survivors rescued. U.S.Tanker (8537), torpedoed by U-boat off Cape Cod but taken in tow. 4. Anti-Submarine operations. 5th. U-boat probably mined and sunk in St.George's Channel. 6th Norwegian MTB 715 torpedoed large U-boat when surface off Bergen. Promising attack also made off Cape Wrath on by Liberator. U-boat also sunk(four officers and fourteen 8. Moditerranean and a Canadian frigate after torpedoing a merchant vessel. 5th Escorted Heavy bombers. 504 (missing 1) dropped 876 tons on three railway targets, airfield and shipyards in Nort Italy, and also 272 tons on railway bridge Yugoslavia. Tactical aircraft 1446(missing 8) attacked communications and other targets South Germany, Austria, Yugoslavia and North Italy with good results while inflicting Enemy air casualties 4th/5th (night). Liberators 25 (missing 2) made concentrated attack railway centre Bescia (194 tons). ratings taken prisoner) off Isle of Wight by a British destroyer MILITARY. 5. Eestern Front, C Southern Sector, Units of Seventh U.S. Army advanced I 20:0:16. area North Vurzburg where Bruchenau and Hanne twenty iburg miles have in been reached while despite Enemy counter attacks more ground gained in and South of Turzburg. Central Sector. Third U.S.Army Armour occupied. pressing First on beyond Gotha and Mulhausen while Cassel now from East and U.S. Army continues attack Enemy Ruhr pocket elements in conjunction South where steady gains made while other to River Veser of Ninth U.S.Army now closing up with those Minden. Armour of this latter Army have between secured Hamelin Cassel and in which area several small bridgeheads across Rivor Teser have been established. 0 BOLL NO NOT TO BE RE-TRANSMITTED COPY NO. of SECRET C OPTEL No. 112 Information received up to 10 a.m., 8th April, 1945. 86 NAVAL 1. HOME WATERS. 7th/8th. Five E-boats operated off Ostend and preliminary reports state two sunk by our patrols. 2. coaster and one junk in Mergui Archipelago and also shelled radar station Great Cooo Island (N. Andamans). 3. PARAPERATE . TELEGRAN EAST INDIES. Four of H.M. Destroyers recently sank one ENEMY ATTACK ON SHIPPING. 7th. A 7176 top U.S. merchant vessel in inward Atlantic convoy torpedoed off Anglesey but towed into port. MILITARY WESTERN FRONT. Southern Sector: During last two days 2nd French Corps made general advance of eight to fifteen miles during which Ettlingen has been cleared. Armour of 7th U.S. Army reached River Main Se Wursburg, while to north of town is now approaching Schweinfurt. Central Sector: 1st and 9th U.S. Armies have closed to River Weser between Cassel and Minden, while armour of latter has established large bridgehead east of Hamelin. Northern Sector: Armour of 2nd British Army attacking N.E. now 18 miles S.S.E. Bremen, while bridgehead over River Weser north of Minden being consolidated. FROM lessless Coughing TO: Secretary of State, Washington DATED April a, 1945 main 893 4. ( 5. Tebasay's No. - dated April , is reference able. treasury Attache Mise, with Dr. Beeng and Tarky, left for Washington yesterday, April 7. Treasury should be informed. ATTENTION EASTERN FRONT. Southern Sector: Further progress made N.E. Bratislava, while to south of Danube Klosterneuburg (N. Vienna) captured and street fighting reported in southern parts Vienna it- self. 6. ITALY. Adriatic Sector: 8th Army troops made slight progress south Lake Comacchio, In west Coastal Sector U.S. troops of 5th Army made small gains and beat off counter attacks immediately east of Massa. BURMA. Central Sector: Both sides regrouping after battle of Mandalay Plain, while our leading division supported by armour continues advance south Meiktila and is now 10 miles from 7. Pyawbwe. AIR 8. C C WESTERN FRONT. 7th. 1257 escorted U.S. heavy bombers (22 bombers 6 fighters outstanding) dropped 3074 tons visually on targets north and east Hamburg among which six airfields (1200 tons) four railway centres including Neumunster and Schwerin (541 tons), two explosive works (716 tons. an ordnance depot and two oil storage depots (617 tons) while at same time inflicting enemy casualties 104.19.28 in combat. SHAEF (Air) medium bombers 237 dropped 364 tons railway centres Northeim ndGottingen with good results while 1944 fighters and fighter bombers (7 missing) operated northern and central sectors destroying 40 AFT' $ and 270 M.T. in Central Sector alone and also inflicting enemy air casualties 13.3, in combat and 47,2, 84 on ground, Coastal Command Beaufighters 21 attacked shipping off Vadheim (Sogne Fiord) when two ships of 2000 and 3500 tons and escort vessel left on fire. 9. MEDITERRANEAN. 6th. 387 U.S. heavy bombers dropped 841 tons railway yards, bridges and other targets North Italy. 1032 tactical aircraft attacked communications, supplies and close support targets North Italy and Yugoslavia. 10. BURNA. 5th. Heavy bombers attacked supply dumps Rangoon (134 tons) while 231 tactical aircraft attacked other targets. I DO/LAYR 4/9/48 88 FOR THE processary's your 87 and War Departments in his discussion with them the previ us afternoon. 0 in said that he had checked his recollection of what the President had said with it. col. John Bottiger, who had been present at the conference, and that Hr. cettiger agreed with the following swarry ( April 9, 1945 Conference on the Treatment of Germany of the President's views: Secretar Korn genthan's office March 23, 1945 1. There should le provision for central administration for same of 9:00 A. the national public services. 2. The State Department's drast directive of March 10 should be Present: Vor the Treasury Deport- - Secretary Morgenthau PART ttem. Mr. White next in Coe 3. Aside from reparations, German industries and the Geman economy For the State Department - Mr. Clayton should be left intact for German use. The President definitely did not Mr. Matthews must to *alininite" General heart industries. For the Mar Department Lr. liceloy General Hillering 4. Attempts should be code to decentralise the political structure. There should be as ruch locastralization no possible in the sphere of economic activity. At the Secretary's request, the discussion started . few since before the arrival of the Secretary and Mr. leCley. 20th Clayton stated F. MeCloy asked -r. Clayton whether this was a correct inter- that he WAS in favor of having the TOUR noral the document which be and protation of what the President had said and it Glayton stated that it was. It == agreed to the ship that the would review J.T. Siciloy's above to the Pressure the day before (attachment A) to the Precident for approval. Mr. White distributed copies of . his properted docu- one-plige in order to see have will St carried out the points wedch the mont, prepared in the Treasury (attachment ). General Hillerine assignanced that be car that r LeCloy and a document, coming of would be available AS DOOD == HR. Melley (attachment 0). President wished of mased. which In subsequent discission the following rearcs WOTE attributed to the insident at the section of the preceding daymbainly by 10% 0 Document ( SicCloy. His Clayton asked whether the policy recommended lo the Treatury in 2 A - Inconsistent nince the contence stated that #aupervision and veto over* were to le aintained but that we "should would morning The President was quoted as having said that be had ede a mistake responsibility for the functioning of the Internal economy ...." at Queline and that be bland this on Chirohill. The President and told that the Language erely allowed that the time of overvieling while TOUS to be exercised was not one which would make Us 205 mulble for every had drefted it, for it used the work *pastoral" which the President said Mr. White said The did not think that there was MC Internationaly but the SPAID Unit they could tell by peeding the that Churchill he work never have thought of using in this connection. detail of the eeono is functioning of Germany. in Clayton declared that he thought what Me bad to assume that responsiMility. r. White Loonemic Controls stated that he thought that the President definitely did not want as to assume that responsibility The President === said to have been year dulices about the need for these controla in equided Commany. The idad of controls be would be inclined to use would e conditions of say three Gerrans to a who would be told that they an to do than and thus or see that thus and Mr. Clayton further effected to the language of the Treasury (000= meat which stated that consider activities should in administered and apainted 049 a decentrolized busic. Mr. Con pointed out that this MAIL than was done. If these things were not carried out the should be shot. "subject to tix decisions 12 12m Central which could accept The President VILLING said to have used rationing as . good example of a COD- any Ameticone or parts of funct ons, if 1. Ocural It ecessary to conduct these functions centrally, Mr. Matthews cald that the State trol which be thought the illies should not incose on Demony or try to Department rin. He thought this should be NO to the Germans. agreed with 2 B of the Treasury document About the distribution of do- centralising the political structure. Standard of Mates The President's Pleasaing Mr. lieClay said that the War Department draft had been marked out on the leals of what the President told the representatives of the State O The President thought that we should not be responsible for maintain= ing a minimum standard of living in Germany. E thought that of course we should food the Gervan people to prevent them from starving and be -4- -3 89 thought that starvation ought to be the line at witch our positive in- had taken yesterday. The President bound to object to were policiou, : if given . real opportunity to pass 1.00 them. tervention began. The President again mentioned soup itchens for feed= ing the German people. Homever, Nr. Endloy said that the President had not objected to the words *Lisease And unrest The Secretary felt sure that now this group could quickly work out an agreed policy. in and enjoyed working on this satter with Mr. lieCley. They had worked together in complete frankness, each losera where the Industry other stood, and be appreciated what Vr. McCley had done in recent days within the Heits of the instructions given his by Secretary Stimbon. The President said that he did not held extremist view on this sub- No and Mr. Clayton had worked closely together on the French lend=lease matter and descrite difficulties had cone through to anagreement, which he (Socretary Vergenthas had had no occasion to remet. joot. No had cent oped metically that le would let the Germans retain such industries as acidne tools and Locomotive annincture. So long as the Genean used their industries for their own Internal needs, he had in objection to shelp having a mubata that iniuntry. The President anid he therefore (15.0 not believe in such Usings as ruining the nines and President: al Directive otherw DO destroying German indestry (Coupare, however Secretary's Authority of the Control Council moord of telephone conversation the preceding day r. LeCloy, in with the latter had said that the President thought that something The paragraph drifted by the list Department was accepted, with only could be done to contract German industry but that It would take empert rinor changes. planting and handling.) Decentralization Administration The Bar Department Gruit of this paragraph 300.1 convided with minor The President was guoted 00 anying that he was open minded on the changes after a discussion. Ur. Clayton and in Matthews said that they question of what atters had to be handled centrally, I'e thanks that certainly sgreed on the question of political decentralization Mr. McCley pointed out that the present draft followed the President in enchasing decentralization by permitting central control of the national public tids and 1443 other questions could not to settled in detail almed of time; that we led to get into the country first and take a look and see what *** possible and impossible. 0 C Specialary Morgenthma's Jenezia part of the discussion both before and after in leCloy spoke: The ratters which this group led been eslaid to deal with were 4000 his life the Secretary as only two objectives: first, to help win the war, and the second to help make lasting place. He considered the future treatment of General so crucial for peace that be THE willing to say that this conference = one of the rest important in witch lie had ever participated. If he and not = evaluated the subject, le would not have raised 92 ations concerning the State Department's druft directive of March 10. For the moment he saw the document last succ in Mr. Statis nine office, he her never doubted that 4 serious intake sup being made. 16 had anid then that the policies t ervin contained were bad and that the YEAR sure that they were centrary to the President's views. line hoped that there would not be any hurt feelings as 4 result of the acti na which be had taken, but in the circuistances he had felt that there THIS nothing he could do except tell the President exactly what he thought. He was sorry that Lin. Stimson had considered that he aught to \eep out of the field for Germany. this had count that he (Secretary These sentences vere accepted at crafted except that industrial disamment MRS inserted as category along with demilitarisati n the soot important witch would help to sale the peace. At this time in policy services. Controls Secretary for rgenthes rade the following rearis in the first general 90 Morgenthan) had had to fight this atter by Maself. 15c hoped he would be excused if be said that to felt very glad about the actions which the President where controls would be certified. Living Standards The language TELL subctantially that proposed by the War Department. International Transactions The list Department had reposed that exports and imports should be controlled with the aim of taking Germany self-contained. At the suggestion of Water and Coe this was changed to that all Aconomic and fi- nancial transactions of an international character sould is controlled with the sin of preventing Germany from developing a war patential and for other litary occupation objectives. At Sr. White's unding a sentence wis also inserted prohibiting the extension of credit to Certificaty by any foreigners. letars. McCloy and Clayton wished the Contro "emeil to IT tain an evergency power on tids Letter and the final sentence was so worded. -6- 92 91 specific language. However, Art McCloy, supported by Mr. Clayton, urged 0 that this paragraph west as far as c old be done in line with the President's direction of the preceding day. Thereupon the Secretary paid that although Imparations 1 he filt this was the key problem, he also felt that the President was so After discussion of the solut ruised by -T. Coe, it was agreed to firmly consitted to a program of reducing the size of Deman heavy industry add a sentence providing that requrrent reparations should not by theirand form or amount require the mishilitation I German heavy Industry that the President was certain to issue more detailed instructions at a later time. The Secretary said that since he ad not been present at the should not foster the decendence of other countries upon Germany. conference referred to, e aid not wish to urge the adoption of language watch Resers. MeCloy and Da ton thought went beyond or was contrary to what the President had maid. Mr. Clayton made the point that . first charge on all exports which were necessary for reparations or at arriso should be a sin adilicient to day for Imports. The thought WILD that the proceeds of excepts should be divorted to pay for imports in order to revent al traation arising where Planation Document all this countries nightto language got that other certain countries finance the importe and certain as reparations. considerable Mr. Con Argaed volume of imports which were alleged sanctioning as to be necessary in order to pay for exactions. Somever, the consensus will that it would not to to construed. External Assets restatution and other war claims. its Claytes of first stried against clear that it provided that as enuliscation and because the President had had nary but later agreed was Secretary said that unless it MBA embarrassing to the Department of State be thought that the heading of the present document should reartly say that the March 10 directive === withdrum. Jr. Clayton said that be believed that this would be clearly understood, since if the the external assets PSTC to be held for Legitimate claims of the United ations their was no election. 10. Liceley folt that the subject not important C peace Withdrawal of March 10 Pomenut Ur. Witte and Mr. Coe vision to have language inserted stating that all of Germany's external ussets were to be paised and held for reparations, this The Socretary suggested that because the document was important for presented docurests to him on this subject with the signature of only one person upon them, be thought that the sen in the PODE should all sign the completed draft, which was to to to the White Marian This was done. a the exports strued cons future enough to be inserted in Lide directive. Lr. White and Mr. Doc also urged that Canpiace providing that all future seguleitions of foreign exchange assets during the costs 1 eriod should be reserved for runerations and restitution. The language of this proposal has thought to be technically unacceptable or too restricted to be inpurted In this document. Secretary Morgentlan, in Claytes and Mr. VeCley stated that they were agr ed in principle about taking emay General 'a external assets using them for 10⑉ parations and estitution. and not allowing ber to accumulate any during the control period. It than thought that the best place to carry cut this intent would be in a later financi a directive. unly The paragraph on this letter, which placed the (or the administration and ficiency of controls on the German people, HIS accepted practically an written. Denasification and the Har Criminals There perographs were accepted with only one change williah was other 0 President approved. its later as would COULDE it to supersede the preceding document. The Secretary replied that be was afraid there would be Mr. White approved Sr. KeClay and Deneme Hildring mother ever one in the Any would under stand that this document superseded the March 10 directive. Lr. MeCloy paid that they would on the points which were covered. ir. White asied Wether it would be clear In the Amy that USE dreament took If contance over and cause the revision of any other document contrary to 11. in thought at the Any practice was always specifically to enumormts what regulations were Precinced byall subsequent about right Hilloring said that Mr. White General regulations. grecific all the Arro propedite lut tist ruch materiation 10.5 lega only when IS could be experimed. No throught that in the present Instance there THE to stang you wold not emperate them. Secretary Pargent an returned to is point saying that is there was no objection he thought that it should be ade clear that the March 10 directive was opperteded. There had been a lot of a scussion about that directive and soun recols right have noon it With would at 000 the repent one. Ur. Clayton replied thit they would be clad to do it if necessary but thought It r. White anked whether the March 10 directive had been sent to in Winent. Fr. Clayton thought it had not. Mr. Matthews said It had but did not think it. Winant have 10, adres se textual. The War Department draft had stated that "all other undesizable persona would be recoved from oblic office, etc. Tots was changed FOR that a 4 lorg than said that Winant might not under= to *all other persons heat le to allied purposes* after PT. Cla; ten and stant that the old document was now outerseded. Mr. Matthews said that 1. winant would be informed almost within the hour that the President Secretary Morganthan had ruised points about this. signed St. than Haz intential Secretary Morgentime desired a such stronger paragraph than the one drufted by the as Department. line White and F. Coe suggested certain -6- -7- 93 O 94 concluded, the Secretary stated List he now felt good for the first time in a west. He had been very disturbed about the March 10 document. He In response to still another statement by the Decretary in Enter of specific language about rescinding the March 10 directive, 20r. Clayton C pointed out that since F. Stettinium have signed the Sarch 10 document, he and No. lattews would be healtant to recommend the Insertion of language requested to ir. Vorgestins, unless they checked with To understood that they that caid Stettinius. Secretary Vorgentlau the hegitase to ngree to withdraw A doomment which had been algoned to their ohief, before they had any chance to (all with hair cidef. he would not press Ma request. Process for Clearness Mr. lieCley naid that the manted the President's approval of this document to the afternoon 11 possible. If it was Approved he intended stirtly to By with 11 to Securral adquarters and discuss it there and later with the military and if pleastic officials of this overweet In London. Geer tary Elergent - said that the 162000 had been shocked to learn that it and been approved up and down the line, and be Icrow that Art. Stettinius had not had an opportunity to study it. the President it, and it was clear that the document be felt what had been disticted this corning was in econous Liprovement and that way serious Histakes and both corrected. D Secretary thanked the ten resent for the fine way in which they ad worked and said he hoped that these agreements on policy would serve to mooth the viole additionative problems of detling with Dumany. Mr. Edcling said that the Anny HALL with letter estimate of now and that the present dominent was one upder which they could really work. Mr. Clayton and in Matthews said that they too were fully astislied with the present document, and believed that it represented the views of their Department. said he eld be recent, is T. Open invited his to be. It was agreed that the Decretarion of State and Trunsary and the Secretary of as or his representative would see the President liter adidas. Properation of Directive Secretary Morge them, HP. Clarten and ir. dellog agreed that #:00 the accepting of this document, JOB 1067 (revieed) and Sta agenticos, their other directives would have to be revised. The care three agreed that the policy of cooperation which ad bets followed in the directing of this document would Le followed in the drafting of scieldiary documents and that representatives of the three Agencies, with ozitable additions, to sit around the table. insurations In the course of the discussion, Mr. Clayton sentioned can forences had been had th Fr. Lahin about reparations. secretary said that the Treasury too had confureed within The Secretary suggested, and 1 HBA grood by T. Master, that these vuries discussions of reperations would at to lela separately in the cuture but that the agencies concerned would mil com together. Permonnel for Gerwany During the meeting, Fr. 1/0Clog stated that # 360 waking to get Deposit Incius Clay for the top job in Gensaro and that was hopeful that liv. Tyrnes would release his. Ha also paid that Deniral Draper waited Less Douglas for a top resition there but Ust Fr. Paulas acceptance partly deceded upon to - to is the head an. KWO the document was signed and after discussion of procedure had been recestered was. it. Claston interjected to say that he had never been the document done after jaifnet in the afternoon. 19. Clayten sugarted that Mentary Morgenthem iresent is to the President. The General dealised, but Assistary's Concluding Squarks not until the day e was called to the White House. The Secretary cold that to present it to the President WILL F. and to suggested that it le C had - not been presented to the President as the important state paper it FCahah Clayton KYMORANDOM OR CONTROL or GERMANY X 1. Degree of responsiblity for the functioning of the German The German economy is expected to yield . substantial amount of reparations in capital equipment, current output and laber services. The German economy must provide . minimum living standard for the German people to prevent disease and warrat, and must contribute to the saintenance of the occupying forces and the care of millions of displaced persons. A large part of Germany's productive wealth has doubtless been destroyed and millions of Germans will be homeless. Transportation facilities and public utilities will be seriously disrupted and impaired. Since the Basis have occupied the key positions is the Germa economy and since such persons will either flas or be taken into oustody, it will be necessary to find expetent German personnel to take their places. Such reorganisation as this will involve will be the responsibility of the occupying nations. It is contemplated that Germans will continue to administer the German economy but under a close supervision of the authorities of the compring nations similar to the supervision that . Board of Directors would exercise over the administration of . corporation. 2. Degree of mentralized enatral is German. The political Government of Gerwany should be decentralised to the highest possible degree. Centralised control by the compring nations of certain economic functions such as the public services, transportation, communications, postal service, banking, etc. will be essential to efficient operation. All economic activities of . nature not requiring national direction should be distated and operated on . decentralised basis. B UNITED STATES VIEIS on THE TREATMENT OF GINNANT 97 86 SUCHET Decentralization and Controls 23 March 1945 (1) It is recognized that the Control Council my find it necessary and desirable: (a) To use centralized instrumentalitics in Germany to carry out those functions of public services (trens= portation, communications, etc.) which it is essential to conduct centrally for the accomplishment of the purposes of military occupation. The following is a summary of U.S. policy relating to Germany in the initial post-defeat period. is 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. @@@@@@@@@@ (b) To take such measures with respect to the administration of the German internal economy no may be necessary to prevent starvation and epidemic which night endanger the security of the occupying forces and the accomplishment of its purposes. (c) Dependent upo the decisions reached by the Reportions Commission in to take measures with respect to the German Internal economy as may be necessary to collect reportions. C (2) Subject to decisions on the above by the Control Council: (a) lie should maintain supervision and voto power but should avoid assumity responsibility for the functioning of the internal German economy and its economic controls and should Leave the problem of the maintenance and rehabil= itation of the German economy in German hands. (b) The political st.ructure of Germany should be decentralized to the highest possible degree and economic activities should be administered and operated on n decentralized basis. To this end, local, municipal and regional organs should be strengthened to the extent possible. German Industry (s) We should ain st the saximum possible contraction of Gorman heavy industry through the program of reportion renovals and otherwise. These measures should lesve Industry for Germany's domestic needs, but in the program of reparations and restitution the needs of liberated areas shall take precedence over the needs of Germany. reportions should be in such form and amounts as not to require the =sistenance or development of German heavy industry, and BS not to make other countries dependent upon Germany after reparations cease. The authority of the Control Council to formulate policy with respect to satters affecting Germany as a whole will be paramount, and its agreed policies will be carried out in each gone by the none cornander. In the absoree of such agrood policies, and in masters exclusively affecting his can some, the more comander will exureise his authority in accordance with directives received from his own government. The administration of affairs in Germany should be directed toward the depentrulization of the political structure and the revival of leesl asseculity. The German economy shall also be decentralised. Homever, to the minimum extent required for carrying out the purposes sat forth herein the Control Council may pormit or establish central centrol of (a) essential national public arvices such as railroads, communications and power, (b) finance and foreign affairs, and (c) production and distribution of essential commodities. There shall be equitable distribution of such comodition betweet the several Controls may be imposed upon the Geruary economy only as may be necessary (a) to carry out program of demilitarization, reportions, and external relief AS prescribed by appropriate higher authority and (b) to assure the production and maintenance of goods and services required to noot the needs of the occupying forces and displaced persona in Gerwany. and essential to prevent starvation or such disease or civil unrest as world endanger the 99 98 o -2- TOP SECURITY TOP SECRET -3- occurrying forces. No action shall be taken, in execution of the reportions program or otherwise, which would tend to support basic living atamiarda in shall be arrested, brought to trial and punished. Nami leaders and Germany on a higher level than those existing in any neighboring United influential Nami supporters and any other persons dangerous so the Nation. German exports and importe shall be controlled with the air of occupation or its objectivis, shall be arrested and interned. A suitable program for the restitution of property looted by Germans making Gerraro self contained. shall be carried out proptly. I'll the imposition and maintenance of economic controls, German authori= The a man armed forces, including the General Staff, and all pera- ties will to the fillest extent practicable be ordered to proclaim and assume administration of such controls. Thus 11 will be brought home to military organizations, shall be proxyly demobilized and disbanded in such the Cernan people that the responsibility for the administration of stick 4 namer as pormanently to prevent their revival or reorganisation. The Cirman nar potential shall be destroyed. To this and all implements controls and for any breakdowns in those controls, will rest with themselves of NET and all specialized facilities for the production of armanents shall and their USD actiorities. be seised or destroyed. The maintenance and production of all aircraft and The Sasi party and its affiliated and supervised organizations and all 0 implements of war shall be prevented. last public institutions shall be dissolved and their revival prevented. ami and militaristic activity or propaganda in any form shall be prohibited. There shall be established a coordinited system of control over German education designed completely to eliminate Mast and dilitarist doetrines and to make possible the development of democratic ideas. Nasi laws which provide who basis of the Hitler regine and which establish discriminations ce crousis, race, creed and political opinion, shall be abolished. All nmmers of the Nasi party who have bre more than nominal parti- cipants in its activities, and all other undesirable persons, will be recoved from public office and from positions in responsibility in private enterprise. for criminals and those who have participated in planning or carrying out last enterprises involving or resulting 1: struction or ser crimes, 0 TRADE MARK S MICROFILM no 17 TOP SECURIT TOP SECRE 30 March 1945 101 DIRECTIVE TO COMMANDER-D CHIEF OF U.S. PORCES OF OCCUPATION D-JARDING THE VILWARE OF SERVICE 1. The purpose and Scope of this Directive: This directive rescinds JCB 1067 and is issued to you as TREASURY DEPARTMENT 100 ( Commanding General of the United States forces of occupation in Germany. INTER OFFICE COMMUNICATION As such you will serve as United States member of the Centrol Council DATE April 9, 1945 TO FROM Secretary Morgenthau and will also be responsible for the administration of military govern- In/matin ment in the sone or sones assigned to the United States for purposes Mr. Coe FC of occupation and administration. It outlines the basic policies which will guide you in those two capacities after the termination of These are the two documents to take the place of 1067 which have so far been agreed to by the Drafting Committee. Part I is the combined command of the Supreme Commander, Allied Expeditionary the general directive and Part II is the financial directive. yet. Force. It is anticipated that substantially similar directives will Part III, the economic directive, is not agreed in any form be issued to the Commandere-in-Chief of the U.E., U.S.S.R., and French forces of occupation. Supplemental directives will be issued to you by the Joint Chiefs of Staff as say be required. PART 3 2. The Basis of Military Government a. The rights, power and status of the military government in Germany are based upon the unconditional surrender or total defeat of Germany. The Text of the Instrument of Unconditional Surrender is at Appendix "A". You will assure that the policies set forth in that Instrument are carried out in your some of occupation even though the defeat of Germany is not followed by a formal signing of the Instrument, I b. Subject to the provisions of paragraph 3 below, you are, by virtue of your position, clothed with supreme legislative, executive, and judicial authority is the areas occupied by forces under your command. This authority will be broadly construed and includes authority to take all measures deemed by you necessary, appropriate or desirable in relation to military exigencies and the objectives of a firm military government. TOP SECRET PRECISION MICROSTATI SECRET MICROFILM TOP SECRET C. You will issue a proclamatic continuing in force such TOP SECKET 0 TOP SEC commodities between the screen. In the absence of a conflicting policy 102 of the Control Council, you may deal directly with one or more sone proclam tions, orders and instructions as may have heretofore been Commanders on matters of special concern to such somes. issued by Allied Commanders in your sone, subject to such changes as e. Pending the formulation in the Control Council of uniform you may determine. Authorisations of action by the Supreme Commander, policies and procedures with respect to inter-sonal travel and movement Allied Expeditionary Force, may be considered as applicable to you of civilians, no civilians shall be permitted to leave or enter your unless inconsistent with this - later directives. 2004 without your authority. 3. The Control Council and Zones of Occupation: f. The military government personnel in each sone, including a. The four Comandere-in-Chief, acting jointly, will constitute those dealing with regional and local branches of the departments of the the Control Council in Germany which will be the suprese organ of control central German administrative machinery, shall be selected by authority over Germany in accordance with the agreement on Control Machinery in of the Commander of that some except that lisison officers may be furnished Germany at Appendix *B* For purposes of administration of military by the Commanders of the other three somes. The respective Commandere-in- government, Germany has been divided into four sones of occupation. The Chief shall have exclusive jurisdiction throughout the whole of Germany agreed protocols on sones are at Appendix "O". over the members of the armed forces under their command and over the b. The authority of the Control Council to formulate policy civilians who accompany then. and procedures and administrative relationships with respect to atters E. The Control Council will be responsible for facilitating affecting Germany as a whole will be paramount throughout Germany. You the severance of all governmental and administrative connections between will carry out and support in your sone the policies agreed upon in the Austria and Germany and the elimination of German economic influences Control Council. In the absence of such agreed policies you will act in Austria, You will give every assistance to the Allied Administration in accordance with this and other directives of the Joint Chiefs of in Austria in its efforte to effectuate these purposes. Staff. 4. Basic Objectives of Military Government in Germany c. The administration of affairs in Germany shall be directed a. It should be brought home to the Germana that Germany's towards the decentralisation of the political and administrative structure ruthless warfare and the fanatical Nast resistance have destroyed the and the devel apment of local responsibility. To this and you will encourage German economy and made chaos and suffering inevitable and that the Germana automony is regional, local and municipal agencies of Gerven administration. cannot eacape responsibility for what they have brought upon themselves. The German economic structure shall also be decentralised. The Control Council may, however, to the minimum extent required for the fulfillment of purposes net forth herein, permit centralized administration or establish central control of (a) essential national public services such AS railroads, communications and power, (b) finance and foreign affairs, and (e) production and distribution of essential commodities. d. The Control Council will adopt procedures to effectuate, and you will facilitate in your some, the equitable distribution of essential 2- TOP SECRET b. Germany will not be occupied for the purpose of liberation C but as a defeated enemy nation. Your aim is not oppression but to occupy Germany for the purpose of realising certain important Allied objectives. In the conduct of your occupation and administration you should be just but firm and aloof. You will strongly discourage fraternisation with the German officials and population. C. The principal Allied objective is to prevent Germany from ever again becoming a threat to the peace of the world. Resential -3- 103 RECISION ROLL NO. TOP SECRET C TOP SEC TOP SECRET prohibiting their revival in any form, will be promulgated by the Control Nasian and militarian in all their forms, the immediate apprehensis of Council. You will assure the proupt effectuation of that policy in your war criminals for punishment, and the industrial disarmament and de- sone and will make every effort to prevent the reconstitution of any such militarisation of Germany, with continuing control over Germany's capacity organisation in underground, diaguised or secret form. Responsibility to make war. for continuing desirable non-political social services of such Party d. Other Allied objectives are to enforce the programs of organisations as are dissolved say be transferred by the Control Council to appropriate central agencies and by you to appropriate local agencies. reparations and restitution, to provide relief for the benefit of countries b. The laws purporting to establish the political structure of devestated by Nast aggression, and to ensure that prisoners of war and National Socialism and the basis of the Mitler regine and all national displaced persons of the United Nations are cared for and repatriated. 5. Economic Controls: laws, decrees and regulations which establish discriminations on grounds of race, nationality, creed or political opinions will be abrogated by a. Controls upon the Germany economy say be imposed centrally the Control Council and rendered inoperative by you in your sone. by the Centrol Council, or regionally or locally by you, only to the extent that such controls may be necessary to achieve the objectives 0 0. All members of the Nasi party who have been more than nominal emunerated in paragraph b above and only as they may be essential to participants in its activities, all active supporters of Nazies or protect the safety and meet the needs of the occupying forces and assure militarism and all other persons hostile to Allied purposes will be the production and maintenance of goods and services required to prevent removed and excluded from public office and from positions of importance starvation or such disease and unreat as would endanger those forces. in quani-public and private enterprises such as (1) civic, economic No action will be taken in execution of the reparations program or and labor organizations, (2) corporations and other organisations in otherwise which would tend to support basic living conditions in Germany which the German government or subdivisions have a major financial interest, or in your sone on a higher level than that existing in any one of the (3) industry, commerce, agriculture, and finance, (4) education, and (5) neighboring United Nations. the press, publishing houses and other agencies disseminating news and b. In the imposition and maintenance of such controls as may propaganda. Personal are to be treated as more than nominal participants be prescribed by you or the Control Council, German authorities will in Party activities and as active supporters of Nasism or militarian to the fullest extent practicable be ordered to proclaim and assume when they have (1) held office or otherwise been active at any level administration of such controls. Thus it should be brought home to the from local to national in the Party and its subordinate organizations, German people that the responsibility for the administration of such or in organisations which further militaristic doctrines, (2) authorised controls and for any breakdowns in those controls will rest with thes- or participated affirmatively in any Nast crimes, recial persecutions or selves and German authorities. discriminations, (3) been arowed believers in Nasian or racial and militaristic creeds, or (4) voluntarily given substantial moral or 6. Densolfication: a. A Proclamation dissolving the Nast Party, its formations, material support or political Assistance of any kind to the Nasi Party affiliated associations and supervised organizations, and all Nasi public or Nami officials and leaders. No such personal shall be retained in institutions which were set up as instruments of Party domination, and any of the categories of employment listed above because of adminis- -4- trative necessity, convenience or expediency. - 0 TOP SECRE 105 steps in the accomplishment of this objective are the elimination of TOP SECRET TOP SECRET PRECISION MICROSTATA TRADE MARK MICROFILM ROLL NO TOP SEC 107 TOP SECREE d. Property, real and personal, owned or controlled by the organisations, including the General staff, the German officers Corps, the Reserve Corps and military academies, together with all associations Maxi party, its formations, affiliated associations and supervised which might serve to keep alive the military tradition is Germany. organizations, and by suspected war criminals and leaders of the Mast de You will seise or destroy all arms, ammunition and hierarchy, and found within your some will be taken under year control implements of war and step the production thereof. pending a decision by the Centrol Council or higher authority as to its d. You will take preper steps to destroy the German war peter- eventual disposition. tial, as set forth is Part II hereof. . All archives, monuments and museum of Nasi inception, 8. Suspected War Criminals and Security Arrests, or which are devoted to the perpetuation of German militarism, will be a. You will search out, arrest, and hold, pending receipt by taken under your control and their properties held pending decision as to you of further instructions as to their disposition, Adolf Hitler, his their disposition by the Centrol Council. chief Nasi associates, other war criminals and all persons who have f. You will make special efforts to preserve from destruction participated is planning or carrying out Nesi enterprises involving or and take under your control records, plans, books, documents, papers, resulting in strocities or war crimes. files, and scientific, industrial and other information and data belonging o to or controlled by the following - (1) The central German Government and its subdivisions, organizations, organizations engaged is military research, and such other governmental agencies as may be deemed advisable (2) The Nasi Party, its formations, affiliated associations and supervised organizations (8) All police organisations. including security and political police, (4) Important economic organisations and industrial establishments including those controlled by the Nasi Party or its personnel; (6) Institutes and special bureaus devoting themselves to racial, political, militaristic or similar research or propaganda. 7. Demilitarisations a. In your 1004 you will assure that the Gerean armed forces, including para-military organisations are promptly demobilised and disbanded is accordance with policies and procedures set forth is the Instrument of Unconditional Surrender or other directives which may be issued to you. b. The Control Ceuncil will proclaim and in your 1008 you will effectuate the total dissolution of all military and para-military 1 b. All persons who, if permitted to remain at large would endanger the accomplishment of your objectives will also be arrested and held in oustody. The following is . partial list of the categories of persons to be arreated is order to carry out this policys (1) officials of the Maxi Party and its formations, affiliated associations, and supervised organisations, down to and including Local Group Leaders (Ortagruppenleiter) and officials of equivalent rank; (2) All members of the political police, including the Destape and Bicherheitadienst der S.S. (8) The officers and non-commissioned officers of the Waffen S.S. and all members of the other branches of the 3.5.1 (4) All General Staff Corps officers) (6) officials of the police holding a rank, or equivalent positions of authority, above that of Lieutenant (6) officers of the SA holding commissioned rank (1) The leading officials of all ministries and other high political officials down to and including urban and rural PRECISION MICROSTATE MICROFILM TOP SECRET burgermeister and officials of equivalent rank, and those persons who have held similar positions, either civil or military. is the administration of countries occupied by BOLL NO TOP.SECRF Tos 0. No German parades, military or political, civilian sports, shall be permitted by you. d. Subject to the provisions of the three preceding subparagraphs and of paragraph 10 to the extent that military interests Germany: (8) Masis and Nasi sympathizers holding important and key positions in (a) National and Gau civic and economic organizations; (b) corporations and other organizations is which the government has . sajer financial interest; (a) industry, commerce, agriculture, and finance) (d) education; (a) the judiciary: and (c) the press publishing houses and other agencies disseminating news and propaganda. It may generally be assumed in the absence of evidence to the contrary that any persons holding such positions are Nasia or Nesi sympathisers (9) All judges, prosecutors and officials of the People's Court (Volkagerichtshof), Special Courts (Sendergerichte) and other extraordinary courts created by the Hasi regise (10) Any national of any of the United National or associated states who is believed to have committed offenses against his national law in support of the German war effort, (11) Any other person'whose name or designation appears lists to be submitted to you or whose CARE may be notified to you separately. If is the light of conditions which you encounter in Germany you believe that certain persons within these categories should not be subjected immediately to this treatment, you should report your reasons and recommendations to the Joint Chiefs of Staff. 9. Political Activities: . Initially you will not permit pelitical activities of any kind, and you will sesure that your military government does not become committed to any political group. b. You will prehibit the propagation is any form of Nasi and militaristic dectrines. are not prejudiced, freedom of speech and press, and of religious worship, will be permitted. Consistent with military necessity, all religious institutions will be respected. 10. Public Relations and Centrol of Public Information: As a member of the Centrol Council, you will endeavor to obtain agreement on a quadripartite basis for uniform or opordinated policies with respect to (a) central of public information media is Germany, (b) accrediting of foreign correspondents, (a) press censorship, and (d) issuance of official news communiques dealin with Control Council matters of Germany as a whele. U. S. policies in these matters will be sent to you separately and you will be guided by these in your negotiations on the Centrol Council. 11. German Courts, a. All extraordinary courts, including the Velkagerichtshof (People's Court) and the Sendergerichte (Special Courts), and all courts and tribunals of the Maxi Party and of its formations, affiliated associations and supervised organizations will be abolished immediately. b. All ordinary criminal, civil and administrative courts, except those previously re-established by order of the military govern- ment, will be closed. After the elimination of all Nasi elements you will permit those which are to exercise juriediction within the boundaries of your tone to resume operations under such regulation, supervision and central as you may consider appropriate. Courts which are to exercise jurisdiction over territory extending beyond the boundaries of your some will be reepend only with the express authorization of the Control Ceuncil and under its regulation, supervision and centrol. The power to review and vote decisions of German courts shall be included within the power of supervision and centrol. 12. Police With the exception of the Reichakriminalpolisei (Criminal Police) all elements of the Beicherheitspolises (Security Police), ..... (Gestape) and the Sicherheitadienst der S.S. BULL IOP SECD TOP SECRE 0 111 will be abolished. Criminal and ordinary police will be gurged of East religious instruction in German schools, except insefar as may be necessary persennel and utilized under the control and supervision of the military government. to issure that religious instruction and administration of such schools conform to such Allied regulations as are or may be established pertaining 15. Political Prisomere: Subject to military security and the interests of the individuals concerned, you will release all persons found within your some who have been detained or placed in custody on grounds of race, nationality, creed to purging of personnel and curricula. 15. Arts and Archives: Subject to the provisions of paragraph 5 above, you will make all reasonable efforts to preserve historical archives, missume, or political episions and treat them as displaced persons. You should make libraries and works of art. provision for the review of convictions of alleged oriminal offenses about which there say be substantial suspicion of racial, religious or political persecution, and in which sentences of imprisoment have not been fully served by persons imprisoned within your same. 14. Education a. All educational institutions within your except those C previously re-established by Allied authority will be cleaned. The cleaure TOP SECRET of Nazi educational institutions such as Adolf Hitler Schulen, Napolas and Ordensburgen, and of Nexi organizations within other educational Institutions will be permanent. b. A ocordinated system of control over German education and an affirmative program of reorientation will be established designed completely to eliminate Nasi and militaristic destrines and to encourage the development of democratic ideas. 0. You will permit the reopening of elementary schools at the earliest possible date after Nasi personnel has been eliminated and testbooks and currieula have been provided which are free of Nasi and militaristic doctrine. The Centrol Council may devise programs looking toward the reepening of as condary schools, universities and other institutions of higher learning. Pending the formulation of such policies by the Centrol Council, you may formulate an interis program within your sone and is any case may permit the reepening of such institutions and departments which offer training which you consider immediately essential or useful is the administration of military government and the purposes of the occupation. d. It is not intended that the military government will intervene is questions concerning denominational control of German schools, or is 10 11 PRECISION MICROFILM MICROSTAT TRADE MARK ROLL NO. 3/6/42 o 0 112 113 PART II -2- FINANCIAL DIRECTIVE (REVISED IN LIGHT OF PRESIDENTIAL POLICY STATEMENT) a. To permit or require the Reichabank, the Rentenbank or any other 1. You will make full application in the financial field of the principles stated electhore in this Directive. You will endeavor with- bank or agency to issue bank notes and currency which will be in the franework of paragraphs 3c and 5 of Part I, to have the Control legal tender; without each authorisation no German governmental Council adopt uniform financial policies, to carry out the purposes of or private bank or agency will be permitted to issue bank notes the occupation. or currency. b. To require the Gervan authorities to make available Heichmark 2. You will regulate and control currency circulation within your sone in accordance with the following provisions, and subject to any currency or credits free of cost and in amounts sufficient agreed policies of the Control Council, to meet All the expenses of the forces of occupation, including the cost of Allied Military Government and including to the ** a. United States forces and other Allied forces within your tent that compensation is made therefor, the cost of such sone will use Allied Military parks and Keichemark currency C private property as may be requisitioned, seised, or otherwise or coins in their possession. Allied Military marks and 1 Reichanark currency and coin now in circulation in Germany acquired, by Allied authorities for reparations or restitution will be legal tender without distinction and will be inter- purposes. C. To prohibit, or to prescribe regulations regarding, transfer changeable at the rate of 1 Allied Military park for sark. Heichakredi tkassenscheine and other German military or other dealings in private or public securities or real estate currency will not be legal tender in Germany. or other property. d. To close banks, but only for & period long enough for you to in- b. You will receive separate instructions relative to the currency which you will use in the event that for any reason adequate troduce satisfactory control, to resove Nazi and other undesirable supplies of Allied Military marks and Beichanarice are not personnel, and to issue instructions for the determination of available, or if the use of such currency is found undesirable. accounts to be blocked under sub-paragraph 6d below. e. To close stock exchanges, insurance companies, and similar C. You will not announce or establish in your sone, until receipt financial institutions for such periods as you dees appropriate. of further instructions, any general rate of exchange between f. To establish a general or limited noratorium or moratoria only the Reichanark on the one hand and the U.S. dollar and other our- rencies on the other. However, a rate of exchange to be used exclusively for pay of troops and military accounting purposes in your time will be communicated separately to you. - to the extent clearly necessary to carry out the objectives of Allied Military Government. lie Resumption of partial or complete service on the internal public 3. Subject to any agreed policies of the Control Council, you are debt at the earliest feasible date is deemed desirable. You will endeavor authorised to take the following steps and to put into effect such further to secure agreement in the Control Council as to the time and manner of financial measures as you may deen necessary to accomplish the purposes such resumption. your occupation: 5. You shall take no steps designed to maintain, strengthen or operate the Garcan financial structure accept insofar as may be necessary for the RECISION TRADE MARK MICROSTATI MICROFILM BOLL NO. 115 114 of Allied Military Government. d. You will impound or block all gold, silver, currencies, purposes specified in this Directive. securities, accounts is financial institutions, credits, 6. Subject to any agreed policies of the Control Council, valuable papers, and all other assets falling within the a. You will prohibits following categories (1) the payment of all military pensions, or other (1) Property owned or controlled directly or indirectly, is emolumenta or benefits, except compensation for whole or in part, by any of the following: physical disability limiting the recipient's ability (a) The German Reich, or any of the Lander, Gaue or to work, at rates which are no higher than the lowest provinces, any Kreis, Municipality or other similar of those for comparable physical disability arising local subdivisions or any agency or instrumentality from non-silitary causes. of any of then including all utilities, undertakings, (2) the payment of all public or private pensions or other emoluments or benefits granted or conferred C (1) by reason of membership in or services to the former Nasi party, its formations, affiliated associations or supervised organizations, (11) to any person who has been renoved from an office or position in accordance with paragraph o of part 1 or paragraph 10 of this part, and (111) to any person arrested and detained in accordance with paragraph 8 of part 1 during the term of his arrest, or permantly, in case of his subsequent conviction. b. You will take each action as may be necessary to insure that all laws and practices relating to taxation or other fields I public corporations or monopolies under the control 0 of any of the above (b) Governments, nationals or residents of other nations, including those of territories occupied by them, at 1 September 1939, (e) The Nazi Party, its formations, affiliated associations and supervised organisations, its officials, leading members and supporters (d) All organizations, clube or other associations prohibited or dissolved by military governments (a) Absentee owner's of non-German nationality including United Nations and neutral governments, and Germana outside of Germany's (f) Any institution dedicated to public worship, charity, of finance, which discriminate for or against any persons be- education or the arts and sciences which has been used cause of race, nationality, creed or political opinion, will by the Nazi Party to further its interests or to be amended, suspended, or abrogated to the extent necessary to cleak its activities eliminate such discrimination. c. The German authorities will be held responsible for taking such measures in the field of taxtion and other fields of public finance including such restoration of the tax system and maintenance of tax revenues at the highest practicable level as will further the accomplishment of the objectives (g) Persons placed under detention or other types of oustody by you, and all other persons specified by military government by inclusion in lists or otherwises and PRECISION MICROFILM TRADE MARK ROLL NO. O 116 117 B -5receipt of further instructions, authorize any outlay of German (2) Property which has been the subject of transfer under duress or wrongful note of confiscation, disposition or spolistion, foreign exchange assets upon imports, including those from neutral whether pursuant to legislation or by procedure purporting countries, and will not authorise payment in Germany's foreign to follow forme of law or otherwise; exchange for any other purposes, except where clearly and urgently needed to further the agreed objectives of the Allied Military (3) Works of set or cultural material of value or importance, Government. You will establish effective controls with respect regardless of the ownership thereof. You will take such action as will insure that any impounded or blocked to all foreign exchange transactions, to effectuate the policies assets will be dealt with only as permitted under licenses or other of this Directive, including: instructions which you may issue, In the case particularly of property (1) Transactions as to property between persons inside Germany and personal outside Germany's blocked under 1 a above, you will proceed to adopt licensing measures (2) Transactions involving obligations owed by or to because which while maintaining such property under surveillance would permit: due from any person in Germany to any person outside its use in consonance with this Directive. C C 7. All foreign exchange transactions, including those arising out of Germany and (8) Transactiona involving the importation into or exporte- exports and imports, shell be controlled with the sis of preventing Gereany tion from Germany of any foreign exchange asset or other from developing a war potential and of achieving the other objectives set form of property. forth in this Directive. 0. No extension of credit to Germany or Germans by any foreign person (a) To effectuate these purposes, you will, is addition to other measures stated in this Directive, reduce to the possession or Government shall be permitted except that the Control Council may is and control of a special agency established by you, within special energencies grant permission for such extensions of credit. your command, all German (public and private) foreign exchange 2. It is not anticipated that you will make credits available to assots of every kind and description located within or outside the Heichsbank or any other bank, or to any public or private institution. Cermany for disposition as reparation or restitution or for other If, in year opinion, such action becomes essential, you may take such purposes as determined by appropriate authority. As U.S. member emergency actions as you may deen proper, but in any event, you will report on the Control Council you will endeavor to have similar agencies the fross to the Control Council. for the same purpose ostablished in the other somes of occupation I 10. In addition to the provisions of paragraph . of Part I of the and to have them merged as BOOD as practicable in one agency for basic directive, you will eliminate other undesirable personnel and in- the entire occupied territory fluences from the Heich distory of Finance and from all public and private (b) Subject to any agreed policies of the Control Council, you will prohibit, except as you may permit by regulation or license, all dealings in gold, silver, foreign exchange, and all foreign change transactions of any kind. You will not, however, until financial Institutions, agencies and organizations. 11. Too will maintain auch accounts and records as may be necessary to reflect the financial operations of the military government in your some PRECISION TRADE MARK MICROSTAT MICROFILM BOLL NO. O -7and you will provide the Control Council with such information as it may require, including information in connection with the use of currency by your forces, any governmental settlements, occupation coats, and other expenditures arising out of operations or activities involving participation of your forces. 118 120 SECRET TREASURY DEPARTMENT Memorendum of a meeting in theoffice of Lord Keynes, British Treasury, whitehall, March 7, 1945. INTER OFFICE COMMUNICATION DATE April Present:- U. K. Representatives TO Secretary Morgenthau (for information) Loro Maynerd Keynes, Treasury Department Sir Wilfred Eady, Treesury Department 10". P. 5. Harmer, Treasury Department Mr. Coe Subject: Rosensan-Keynes Conversations U. S. Representatives Lord Keynes stated during these conversations that: Judge Sesuel 1. Rosensan, White House Mr. D. M. Phelps, State Department 1. The British do not intend to use 3 (c) of the Lend-Lense Act to obtain post-war credits. Keyner has BUGgested that further conversations be held in Washington this summer or after hostilities in Europe are over to discuss financial arrangement which shall supersede lend lease. In this connection Keynes said that the post-vai situation would call for a "brain wave" similar to the one the President had had in 1940 when lend lense was evolved. C 12. 4. n. Taylor, Treasury Department The meeting with Lord Keynes neo been arrenzed at the suggestion of MT. Hermer in order that the Judge stent have an opportunity of exchanging views with Lord Keynes of the British Treasury. Judge Rosenmen explained briefly the purposes of his mission stating that be had osen requested by the President to proceed to Europe and examine the situation in respect to re- 2. Keynes asserted that Britain would need financial assistance during the post-war period: that Britain's 108965 guirements for civilian supplies in the liberated areas. as B. result of the VOI were of the same magnitude 8.0 the reparations that Russia had requested should be placed upon The President had also requested that the Juding should discuss with the representatives of the liberated areas the problems relating to their needs for financial assistance in paying for civilian supplies and in rehabilitation and reconstruction in the post-war years. The Judge stated that it would be helpful in this regard if we could optain from the British Treasury any information they might care to make available in respect to Great Britain's financial programming for Phase 3 that 18, whatever financial assistance Great Britain might intend to make available to the liberated areas together with P statement of the financial assistance that Great Britain herself might require in the period Germany at the Yalta Conference In view of Britain's heavy burden of international indebtedness Britain VILE not in a position to consider long-tors credits to any other country. following termination of hostilities in the Pacific. 0 It was the Judge's hope that we might be able to discuss these matters in B strictly general and informal way -and off the record. Lord Koynes said that be did not think the present 121 122 o O zone -- stockpiles or land-lease origin in the UK, goods in the pipeline, goods manufactured but not yet shipped, was timely for A discussion of the financial aspects of these problems. He stated that in the Phase 2 goods in process of manufacture, goods for which contracts had been negotiated in the U.S. out which hed not yet been menutactured. Lord Keynes felt that the question of food and or civilian supplies of lend-lesse origin were particulerly significant and would have to be dealt with on some basis that would be mutually satisfactory to the American and British authorities. Lord Keynes stated that at the present time lend-lesse aid to Great Britain W85 running somewhere in the neighborhood of 86 billion e year. He negotiations that ned been conducted in Washington in November of 1944 that the President had informed him that he did not think questions of post-war financial commitments should be discussed during the midst of R military campaign. Lord Keynes stated that the Britien were very much interested at the present time 10 the question of the renewal of the Lend-Lesse Act by Constate and also in the question of the Congressional appropriation that would be voted for lend-lease. Lord Keynes stated that the British Treasury did not have an BETROO finencial policy beyond Phase 2. the matter ned not been conversed within the British Treasury although estimeted that the total vol. of commodities in the pipeline might approximate Sk billion at any one time and that If the stocks of goods in the UK of lend-leese origin were added it would neesurably increase the values involved. individual officiale had been giving the letter serious consideration. 118 said that he would be happy to offer some of his observations in respect to the financial problems of the post-war period providing Judge Rosensan understood clearly that these were merely in the nature of personal constants and not to be given any publicity 0 Besides the problems of the twilight zone Lord Keynes noted that there were anny imponderables in the present situation which would have to be taken into account. Amongst these ne noted the following: or circulation. sir Wilfred lady confirmed that the Treesury did not have an agreed policy and adidad that he thought IT might be helpful If Lord Keynes were to offer some of his personal observations in respect to these matters. Lord Kaynes stressed that the British did not think that land-lease would crove to be 8 satisfactory arrangement during Phase 3. in this connection he montioned that the British did not intend to pursus a policy similar to that of Frence of netra Section 30 of of the Lend-Lesse Act 98 8 vehicle for the obtaining post-war credits. Lord Keynes stated that it 10.8 his view that lend-least and reciprocal nic should come to an end with the conclusion of hostilities against Japen. Lord Keynes observed, however, that it 70.8 obvious that land-lease could not be terminated the day hostili- he ties ceased. There would be en interim period which referred to as a twilight zone during which lend-leas and reciprocel eid would have to be continued and during which a great many problems would arise, some of which Sir would be of a very complex and difficult nature. Wilfred Eady distinguished the following categories of goods which would have to be dealt with in this twilight 1. The rate of conversion or British industry from wer preduction to consumption and export requirements. 2. The necessity of transferring great numbers of men end equipment to the Pecific theater of NOT upon the conclusion of hostilities in Europe. 3. The rate at which the repetriation and demobili- zation OZ troops took place with consequent augmentation of one labor force. 4. the war. The amount of the sterling balances at the and of 5. The nature of the negotiations terminating lend- lease and reciprocal aid arrengements. Lord Keynee stated It 85 his view that there would be no great volume of labor available for use in Britain upon the termination or nostilities in Europe. Sir Wilfred Redy stressed that the Prime Minister had indicated what WBS to 124 123 0 for the export trade, true paving the way for Britain's return to a position of economic and supply importance in the affairs of the world. Questioned by Judge Rosenmen OF to met the nature of the "brain weve" should be, Lord Keynes indicated that no aid not think it desirable to say anything additional about this subject et the present time. be felt that the problem wes primerily one for the Americans to consider and felt that the suggestions should C heppen when no informed the President that the British were going "to TO all out" in the Pacific ser. it SES unlikely that the precent restrictions on civilian consumption, rationing and price control would be appreciably nodified in the period immediately subsequent to the conclusion of the European mr. COMP from them. The proposed arrangement in order to be acceptable to the American people would have to be one that WED obviously American by origin and temperament. Lord Keynes stated that tin considered the problems concerning the termination of land-lease and reciprocal aid arrangements and the question of what type or finenciel assistance W9B to supersede lend-lerse so important that he unived that further conversations and consultations about these letters should be held in Weshington in the Lord Keynes wes asked if Britain would attempt to make use of the borrowing facilities creeted by the International Fund or the International Ben, and If consideration had been dven to the cuestion of borrowing on the commercial markets of the world. Lord Keynes early summor or this year or shortly efter the and of hostilities in Europe. Lord Keynes seid that upon the termination of hostilities with Jecen there would be . need for some new arrengement for American financial assistance. stated that in respect to these international finencial He organizations Great Britein would DO P contributor rather than E borrower. He stated that the Fund WES being set O up with the primery objective of stabilizing international exchange races and that the countries of the worzo other than the U.S. no U.K would be the grestest claimants on the Fund. The funds placed at the Bank's disposal would OR primarily for the development of the resources of the backward pross of the world. Clearly Britain did reiterated that the British were unmilling that lend- lease should oe continued. 118 thought It 285 absolutely essential, however, that there should be no reversion to the ordinery type of conservial loan. Va melo that he and informed the President when DA had spokan to tim in not rell within this category. Lord Keynes felt that ( November 1944 that anst WHE needed WHE for the President thousan some of the other countries or the world might wish to borrow on the capital markets of the world he did not see now this would offer any effective solution to the capital naeds of Great Britain in the post-war period. to have E "brain weve" out or which would come sone naw financial arrennment which would be successful in placing world economy in e position to function in P manner gatisfactory to both the British and American Governments. He stated that the President and such 8 brain REVO in 1940 when be davised lend-lease na the instrument of making funds EDD 20008 available to the countries natively enceped in fighting the mer. Lend-19880 nec successfully lifted the question or financial end economic essistance out of the levels of commercialism end BRO developed en o effective aschine that was e righting weapon in Itself. The present callao for 8 new "brain weve" which would to neither lend-lease nor commercial credits. There could be no question out that Britain yould need financial assistance in the post-war period and financial assistance of a type that would allow her to buy needed rew materials from the markets of the world end reconvert her industry Loro Kaynes ONE asked it it WBR the British intention to resume her position BE an International creditor through renting loane to other nations in the post-wer period. Lord Keynes remerced that it would be an essen- tial adjunct in the finance of British exports to other O nations that Britain should wake short term commercial credit arrangements which would be in keeping with the type of goods involved. Thus certain types of exports or varying life expectancy would be financed under flexible but besically short term credit arrangements. However, for the time-being Britain would not be in a 126 -7- 125 0 that Britain was the only United Nation which would emerice from the wer with a heavy burden of international indebtedness. The other United Nations might have large internal debts but they had not contracted obligations C position to make loans as such to other nations. Britain would be 0 borrower herself and It would tend to impose too grant P strain upon British facilities to the world at large. Britain was in the position of a to expect nor to undertake financing of 9 long-term character in respect to other crees of the world. desperate creditor who had to find a remedy by one means or another and, ano, in the event that satisfactory arrangements could not be effected, would obviously Bettle upon other alternatives no metter how bed they Lord Keyner took this opportunity to comment on the Bretton Goods financial proposals. He said that British Treasury officials are following closely the might be. course of the Bretton Woods legislation before Congress Lord Keynes stated that Great Britain's international indebtedness through sterling balances as a result of the war was currently about $12 billion. This indebtadness would increase with each month the and were hopeful about the situation. He said that unfortunately in the U.K. there was a great deel or vocal opposition to the Bretton Woods Monetary Agreements. This opposition was induced in large part by 8 feeling that neither the Fund nor the Benk offered an effective solution to England's post-war economic end financial war lasted and its ultimate level st this time could not be detarminod. He said that the British did not look formers to any considersole alleviation in the rate of increase of their external debt BE 8 result of the tarmination of hostilities in Europe for the British were insistent that they were going to use their men and equipment for cerrying the war to Japan. Futhermore, even men the hostilities in the Pecific cessed this problems. He said that England had thrown everything she bad into the war without reservation. gland was now destitute and without resources. Meny Englismen were unable to understand what measures could be taken to correct this situation and, hence, tended to fell back upon e theory of imperial trade and preference and bilaterel arrangements with other nations. Such views had found expression in debates in the House of Parlie- did not necessarily mean that an automatic stop would occur in the rowth of Britain's International indebtedness. He stated that, including Canada but excluding the U.S., Great Britain was spending for troop pay and corvices to their armed forces in verious parts of the world over A billion P year. This expenditure would continue until the members or the armed forces were browtht home and demobilized. HA was not senguine over the repidity over which either the men could be trans- ment. In order to elley a greet deal of this criticism and feeling, Sir John Anderson ned held the third of a series of meetings with important members of parliarent yesterday afternoon. At these meetings Sir John Anderson had explained cerefully and clearly the purposes and necessity for both the und and the Hank and the part that Great Britsin would play in these organizations. The opposition of these Perlimentary representatives to Bretton Woods had lossened pupreciably as e result of these talks with the Chancellor of the Exchequer but there ned been no lessening in the concern that these Parliamentary representatives expressed esto what #88 going to happen to Britain in the post-wer period. The present sentiment in England in revor of tariffs, imperial preference end bilateral arrencements did not stem from belief in these things 85 such but ( rather from the inability of people to think their way clearly through the innumerable problems that would confront England in the post-war years. He asserted port or demobilization take place. He said that he thought probably Canada could be excluded from this picture because Caneds her offered mutual assistance to the U.K. In that event, the annual rate of increase for pay of troops end other only services would be in 0X0051 01 $3 billion. growing out of these remarks 0 Loro Keynes said that on had suggested during the November discussions in ashinston that upon the coming of peace probably there should be a recenvessing of the question of the burden of war costs and e redistribution and reallocation of these costs. Asked If he would care -8. 127 : to comment further upon this subject Lord Keynes etated 128 under such circumstances. Nor could His Majesty's opposition urge an extensive relaxation of the controls without assuming 0 responsibility of interfering with Britain's war effort in the Fer East. Lord Keynes also seid that or course it would be necessary following VR day to turn over such production facilities 85 might becore aveilable, through 8 cutting back In war production, for the export trade. Britain lived by exports and it must return to the commercial markets of the world 85 rapidly 0.8 possible. He said that for as long 8 period 8.6 could be foreseen at this time the problem in relation to exports would be one or an inability to produce 85 that the only additional recerk that he sould care to make in this regard was that some Allies and depend- enclos hed tended to take the view tist this was "our" that 16, Britain's wr. it would be necessary to 10canvass this situation and nee what could be done about It. At this point Sir Wilfred may said that President Roosevelt usd also referred to this potentiality in speaking of n nocessity of security coorifica for all" Sir Wilfred Endy remarked that, or course, it would not be possible to bring A bout equel secrifica for all but that certainly greater Justice could be done to some. much 85 the nations of the world could consume. The years Immediately following upon victory in Europe would be 0085 of gancral scarcity or goods throughout the world. At this point in the discussion Lord Kaynes 358 raked IT ne would care to estimate the overell indebtedness that Britain ned incurred BB 8 result of war. Lord Keynes replied that the only thing that he could ESY WBE that Britain's losses B.B n result of the sur were of the same maniture BE the reperations that Puests red re- He stated that the goal that the British were striving for in the export market NOB to increase exports five times over their present physical volume. quested should 08 pieced upon Germany at the Yelte Conference. The Russions had summerted n progrem of re- Lord Keynes neked Jud e Rosenmen is he mes going to interest himself in the question or UNERA. Judge Rosenmen perations that in Its immunities was sta Prink. replied that he wes naturally interested in the question or UNREA to the extent that it would effect supply operations in the liberated areas. Lord Keynes stated empostionlly his view that UNERA had failed in its mission. For over e year the nations of the world have been lookin to UNERA to help them in the relief of the destitute and the provision of medical supplies for the weak and Lord Keyner stated that one of the most Important factors in discussing Britain's post-war economic and (in- snetal position WES the national political situation. Ha seid that for F long time the Government had been telling the people that an election would be held within a for manks or months or the termination or nostilities in Europe. Lord Keynes was Inclined to on extremely sceptical of oftner this vision or the Tizelihood of en election being hold within the Bistad period. He paid that, in view of the bariends that the Pacific FET would place upon the production recilities of rest Britain for a continued flow of FBT asterials and In view of continuing sanpower shortaias EE a result of the trans= forence of troope to the Pecific theater, it would be necessary to continue in force, and without essential modification, the present controls restricting civilian consumption to the bare essentials in food, clothing, and the scentities of life. Such restrictions would certainly be resented by the British people and he doubted is the Government would dare to O to the country -9- disabled. To date UNREA her done nothing except engage in 9 nost or excuses that could be adjudged BE nothing other than "clibi's" for its own inefficiencies. He felt that the ineffectiveness of UNRRA derived largely from two things. The first of these WES the failure of the U.S. end the U.K. (he mentioned in this connection Deen Acheson and Richard Law by name) the largest con- tributors to UNHURA to insist that their point or view should be adopted at the Atlantic city Convention at which the charter and the terms of reference of UNERA : were agreed to. He said that BB a result of this failure, the claimant nations who really were contributing nothing to UNRHA had been mole to put over their own point of view. He said that it WBR extremely ridiculous that such ex-enamy countries 0.6 Itely, Bulgaria, Rumania ( : 11 - 129 130 () of sovereignty. Judie Rosensan also called attention to the fact that the Allied Military Authorities had refused - 10 C to allow UNERA to commence operations in the liberated areas during the military period -- the military period and Hungary should have been excluded from UNERA was generally understood to be six months from the date or active military operations in any ATHS. operations. He said that he could understand the reason for the exclusion of Germany from UNREA operations inesmuch as It might be necessary to treat Lord Keynes stated that, in any event, the British did not feel that they could contribute more to UNERA than hed already been earmarked. He pointed out that Germany 8.5 S separate case. The second reason for the ineffectiveness of UNIVAL was the complete incompetence of the present administration and its inability to come to grips with practical problems. He spoice of IRREA BE "the outstanding international failure of the wer period". Because of UNERA'S attitudes and policies larue British territories in the Far East, such 85 Burne, inleys, Honi Kong and Borneo which had been under Japenese occupation for three years or more would require extensive everyoney and relier shipments or foods, medi- the nations of the world had cons to think of UNERA 05 cines, clothing and other vitelly essential materials. Lord Keynes estimated that the total of these supplies would DR in the neighborhood or 5 billion dollars. Sir Wilfred Eady agreed with this estimate. a policing organization -- one which would limit their procurement of materials through screening rather than an ^reanization which would sid them in relier and TAhabilitation. Both Lord Koynne and Sir diffred Eady thought that there WELE still en o portunity of taking UNREA an effective international organization. UNREA was the natural body which should have control of the O Wm. H. Taylor equitable distribution of civilian supplies to the claimant nations in the post-war period and of Beeing to it that some nations did not obtain civilian supplies at the expense of others. However, such 3 progress could be successfully instituted only under . new and more effective administration. Judge Rosenman s old that though UNREA might be justly criticized for some shortcoming nonetheless no felt that nome of the remarks that had been trade should be more properly directed st the egreements reached DY the United Nations in the mastinks of the General Assembly of UNRA at Atlantic City and Montreal. He called attention to the fact that UNREA was expressly prohibited from providing relief end rehabilitation supplies to exenemy countries. This provision had been modified at the Montreal Conference to the extent of ellowing UNERA to spend 560 million for operations in Italy. Judie Posensan. further pointed out that UNIHA was also prohibited from carrying on activities in any national area without the express consent of the Government of that area and that ( most governments had come to look upon the request of UNHEA to be allowed to supervise the distribution of goods of UNREAL origin as an infringement of the principle O DEPARTMENT INCOMING OF TELEGRAM 131 TREASURY DEPARTMENT C DIVISION OF CENTRAL SERVICES TELEGRAPH SECTION STATE INTER OFFICE COMMUNICATION DATE TO Secretary Morgenthnu FROM Mr. Coe Washington. 2978, March 22, 9 p.m. pound credit would probably be given to the Czeche increach as this WEB a pre-ver commitment. but a credit request from the Turkish Government hns been refused. No other European countries have approached the British for credits, according by a program of Government sponsored long-term credite this statement of credit policy by the U. K. Trensury cannot be accepted as the unaltered British post-war position. It clearly appears that the Britinh are deliberately holding back on revenling their post-wer financial plans with record to Europe until U. discussions on the financial arrangements which will supersede lend lense, are completed. The British are obviously waiting for the "brain wave" that Lord Keynes mentioned to Judge Rosenman before disclosing their lending plane. It is obvious that they do not wish to injure their claim to U. S. financial aid on the basic of their "debtor" position. Rec'd 11:59 p.m. Secretary of State, 1. The U. K. Treasury has informed the U. S. Treasury Representative in London that Britain's financial position will not permit her to extend credito to Europenn countries after the var. The U. K. Treasury stated that a 5 million 2. In view of the ineistence of the British financial Dated March 22, 1945 other than a Governmental agency. (SECRET 0) SUBJECT: British Post for Foreign Lending Policy community that Britain boleter her post-vnr export position London communicated to anyone al to the U. K. Treasury. It was conceded that exceptions to this credit policy night be made for political reasons, no in the case of the offer of a 30 million pound short term credit to the Russians. GEM-63 This telegram must be paraphrased before being FOR SECRETARY OF TREASURY FROM MANN Reference to your 1936, March 13. 0 One. Sir David Waley states that in general the United Kingdom because of United Kingdom external financial position will not be in a position to extend credits to European countries. The United Kingdom Treasury appreciates fully the need of the liberated countries of Europe for credits to obtain the imports necessary for restocking and reconstruction but feels that these countries "should look to credit_or nations like the United States and Canada for necessary loans and not to debtor nations like the United Kingdom.". Two. According to Waley it will be necesary in the financing of British exports to provide arrangements for short term commercial credits but the -2-#2978, March 22, 9 p.m., from London -3-#2978, March 22, 9 D.M., from London 133 emphasis will be on selling British exports for cash whenever possible. He did not elaborate on : the other European countries have approached the British for credits. what such arrangements would be put emphasized that while flexible enough to cover all types of goods the credits would be basically short term in nature. Three. Waley states that a credit of about 5,000,000 pounds will probably be given to Czecho- Six. with regard to France you are referred to the Anglo-French financial agreement which Waley states was made available to you in Washington on March 21, 1945. WINANT slovakia because of a pre-war commitment on the part of the United Kingdom when Czechoslovakia made its gold available to the United Kingdom. Four. Reference to Embassy's 1749, February 20 to the Department. British have still not received a reply to British proposal of short term credits in the neighborhood of 30,000 pounds. Waley mentioned that the proposal was made largely as a political gesture and suggested that it may prove necessary for political reasons to make exceptions in the case of other nations to the United Kingdom Treasury policy of not extending credits. Five. According to Waley the Turkish Government approached the British with a view to obtaining credits and was immediately advised by the British that they were not in a position to extend credits. None of the other WMB 134 135 TREASURY DEPARTMENT 136 April 9, 1945 0 INTER OFFICE COMMUNICATION DATE April D. 1945 Dear Lieut. rutzell: TO FROM 1 as writing to acknowledge Secretary Morgentbau (For Information receipt of your letter of April 6 11th Con FC Mender-France list finally resigned from the French cabinet. Fleven in taking STAT the Ministry of National Economy in addition to the Finance Ministry. The any after Ein resignation l'endop-France gave 0 statement to the 17025 In which be attacked the financial polley of Please and said that It FAR leading France into an Inflation which would wipe out the Fresel nicel class. Berne. still with radiotelephone which and Secretary was from message enclosed washington, Morgenthau #291 . copy but from is of soon as be returns to his desk 1 as shall bring your letter and its enclosure to his attention. Yours sincerely, It is expected that Fleves =111 be in this country for (Signed) H.S. Klots the San Francisco conference. a. J. Klots, rrivate Secretary. 0 Lieut. L. J. Putzell, Jr., Acting Executive Officer Office of strategic Services, Mashington, D. C. ( 137 RESTRICTED OFFICE OF STRATEGIC SERVICES WASHINGTON D.C. 6 April 1945 Honorable Henry Morgenthau, Jr. The Secretary of the Treasury Treasury Department Washington, D. C. My dear Mr. Morgenthau: I am forwarding, as being of possible interest to you, copy of radiotelephone message #291, dated 5 April 1945. It was received last night from our representative in Berne. Respectfully yours, Lt. (jg), USNR Acting Executive Officer Enclosure RESTRICTED TRADE MARK I c ROSTAT NO. U.S.PAT. ON MICROFILM ROLL NO 138 OFFICE OF STRATEGIC SERVICES OFFICIAL DISPATCH (091 DATE 5 April 1040 PRIORITY HBO FROM ROUTINE Herno DEFERRED TO DIRECTOR OFFICE OF STRATEGIC SERVICES DISTRIBUTION OFFICE INFORMATION AFOR ACTION RESTRICTED -- RECEIVED IN PLAIN TEXT RESTRICTED GERMANY According to reports received today from exonllont Hitler is still at or neez Berlin with Borman and his chief advisors. He is said to be endosvoring to reach 6 final decision, whether to make last atand with his troops at Herlin, or to leave for the German reIt coors fairly cleez to at the German lave atendoned as hopelean any organized defense in the west but are still opeful of will in off the Hussiana for # 0630 little tine longer It is cusior to Induce the Certan soldier to keep up a hopeless rist arminal tue Lumpians than it in eminst tie Americans and Tritish the 1000 score to be fairly provelent in German Ulat for the soldiers taken risoner by the Sussiana years of labor in Russis or Biber 10 no. be their fate. On the other hand, it is generally bolieved that, 10 one becomes prisoner of to Americans or Titish, tion, after brief period or ceptivity under comfortable conditions, there 18 4 prospect of ourl return to Germany 0 PRECISION Strange as it NGV soon, there is no conolusive evidence of general and violesale avacuation of cover resent bureaus from Derlin. Noat departments of the government still love their chief odministrative centers there as yet, but not vary much to do. Ea oh department has one or more places of retreat already chosen and with some personnel already shifted to these retreats, However, the movement away from Berlin by government personnel has been thrown into some confusion now by the rapid are name threatened advance of our forces inforthegovernment West, with departments the result that places as chosen being with safe refuges overrun by our forces. No general movement of government offices to the roduit has as yet been established, but a great many high Nani officials have apparently moved their familion More. RESTRICTED 140 139 Table 1 April 9, 1945 0 Increase in income tax attributable to application of formula for allocating bank exement between taxable MEMORANDUM FOR THE SECRETARY and tax-exeapt income -- selected banks, 1943 Fron: Mr. Blough Income tax Subject: Taxation and bank earnings, allocation of expenses between taxable and tax-exempt Bank income Assets After ap- Before ap- end of 1943 plication plication of formula of formula $3,689,894,466 $5,126,123 67,012,393 This memoranium is in response to your request of April 2 for examples illustrating the operation Percent increase attributable to formula Large of the formula for allocating bank expenses mentioned in my semorandum of March 24. Under this formule, I an allowance would first be made for special expenses accused to be associated with loans and special departments. The balance of expenses would then be in allocated between taxable and tax-exempt income the ratio of tax-exempt income to total income. Expenses allocated to tax-exempt income would be dis- 36.8 II 1,352,853,173 1,307,286 1,832,527 40.2 III 768,390,934 1,592,310 2,025,324 27.2 123,235,934 154,829 210,737 36.1 111,138,550 150,973 187,211 24.0 106,613,265 127,970 156,211 22.1 allowed for tax purposes. (For details of the formula sec appendix.) IV V VI Small VIII 5,294,487 1,322 5,261 296.0 4,422,226 1,723 3,626 110.4 exempt securities. Attachments Treasury Department Division of Tax Research 0 -- 6,932,975 IX Further study may reveal the necessity of refining the formula, which 14 based on somewhat arbitrary assumptions, to allow adequately for special expenses on loans as distinguished from investments. 3,468 VII 0 The formula has been applied on a preliminary basis to 3 large, 3 medium-sized, and small banks. The effect of its application on the 1943 income tax of these banks 10 summarized in Table 1. Further details of income for each bank are shown on the separate sheets attached. It has not been possible to determine accurately the effect of the formula on the excess-profits income of these banks, but it 16 probable that some of then would be made subject to excess-profite tax. It should be pointed out that the effects of the formula as shown in these examples may be substantially overstated. This 18 because the tax-exempt incose reported on the tax returns is not always adjusted to take account of premiums ordinarily paid for tax- Medium 0 April 9. 1945 142 141 0 C Application of formula for allocation of bank expenses between taxable and tax-exempt income Application of formula for allocation of bank excenses between taxable and tax-exempt income Bank II Bank I Assets, and of 1943 . $1,352,853,173 Assets, end of 1943 $3,689,894,466 1. Income, 1943 1. Income, 1943 Taxable Tax-exempt Total Taxable Tax-exempt $ 9,277,744 Total 13,847,245 $1,385,385 4,947,768 $6,333,153 $23,124,989 2. Income tax, 1943 2 2. Income tax, 1943 C a. a. of formula of formula c. Percent increase attributable to 7,012,393 0. Percent increese attributable to formula $1,307,286 b. After application 8 5,126,123 b. After application of formula Before application of formula Before application formula 1,832,527 40.2 . 36.8 * The effect of the formula may be substantially overstated, since it is not certain that adequate The effect of the formuls may be substantially overstated, since it 18 not certain that adequate allowance has been made for bond premium on tax-exempt securities in reporting income on the tax return. allowance has been made for bond premium on tax-exempt securities in reporting income on the tax return. 0 PPRECISION TRADE MARK MICROSTATRO BOLL NO 143 144 C 0 Application of formula for allocation of bank Application of formula for allocation of bank expenses between taxable and tax-exempt income Bank III expenses between taxable and tax-exempt income Assets, and of 1943 $768,390,934 Assets, end of 1943 - Bank IV $123,235,934 1. Income, 1943 Taxable Tax-exempt Total 1. Income, 1943 $2,529,985 4,996,734 Taxable $7,526,719 Tax-exempt Total 8329,116 479,716 8808,832 2. Income tax, 1943 a. Before application of formula b. After application of formula c. Percent increase attributable to formula 2. Income tax, 1943 $1,592,310 a. 2,025,324 Before application of formula $154,829 b. After application of formula 210,737 c. Percent increase attributable to 27.2 formula 36.1 . The effect of the formula may be substantially overstated, since it is not certain that adequate allowance has been made for bond premium on . tax-exempt securities in reporting income on the tax return. The effect of the formula may be substantially overstated, since it is not certain that adequate allowance has been made for bond premium on tax-exempt securities in reporting income on the tax return. . PRECISION TRADE MARK MICROFILM MICROSTAT ROLL NO 145 146 C Application of formula for allocation of bank Application of formula for allocation of bank expenses between taxable and tax-exempt income expenses between taxable and tax-exempt income Assets, and of 1943 . Bank VI $106,613,265 Ansets. end of 1943 - Bank V $111,138,550 1. Income, 1943 1. Income, 1943 Taxable Tax-exempt Total Taxable Tax-exempt $183,352 524,672 Total of formula C. Percent increase attributable to formula $409,286 2. Income tax, 1943 Before application a. a. Before application b. After application 141,755 $708,024 2. Income tax, 1943 of formula $267,531 $ of formula b. After application $150,973 of formula $127,970 156,211 O. Percent increase 187,211 attributable to formula 22.1 . 24.0 . . The effect of the formula may be substantially overstated, since it is not certain that adequate The effect of the formula may be substantially overstated, since 11 10 not certain that adequate allowance has been nade for bond premium on tax-exampt securities in reporting income on the tax return. allowance has been made for bond premium on tax-exempt securities in reporting income on the tax return, 0 . 148 147 Application of formula for allocation of bank Application of formula for allocation of bank expenses between taxable and tax-exempt income Assets, end of 1943 . Bank VII expenses between taxable and tax-exempt income Assets, end of 1943 . Bank VIII $5,294,487 $6,932,975 1. Income, 1943 1. Income, 1943 Taxable Tax-exempt Total Taxable 85,262 26,625 Tax-exempt Total $21,363 2. 2. Income tax, 1943 a. b. After application of formula Before application of formula $ 1,322 b. After application of formula 83,468 formula formula . The effect of the formula may be substantially overstated, since it is not certain that adequate . allowance has been made for bond premium on tax-exence securities in reporting income on the tax return. 5,261 0. Percent increase attributable to c. Percent increase attributable to o $61,199 bcome tax, 1943 a. Before application of formula 56,574 0 C $4,625 298.0 The effect of the formula may be substantially overstated. since it is not certain that adequate allowance has been made for bond premium on tax-exempt securities in reporting income on the tax return. PRECISION MICROFILM TRADE MARK ROLL NO 150 149 0 APPENDIX C Application of formula for allocation of bank Formula for allocation of bank expenses expenses between taxable and tax-exempt income between taxable and tax-exempt income 1. From total expenses (not including capital losses) deduct Assets and of 1943 - Bank IX a. All service, special department, capital 84,422,226 gains, and miscellaneous income (that 10, all income except earnings on loans and investments) plus 1. Income, 1943 Taxable Tax-exempt Total b. Special or differential expenses attrib- utable to income from loans in the amount of 30 percent of earnings on loans. $ 3,383 17,810 2. Allocate the balance of expenses /I - (1a . 1b)7 $21,193 to taxable and tax-exempt interest. 3. Disellow expenses as follows: 2. Income tax, 1943 8. $ Before application of formula b. After application of formula C. Percent increase attributable to formula 8. Expense allocable to wholly tax-exempt interest equal to the percentage of Item 2 which wholly tax-exempt interest 1/ bears to total earnings on loans and $1,723 investments. 1/ 3,626 b. Expense allocable to partially tax-exempt interest equal to the percentage of item 2 which partially tax-exempt interest 1/ bears to total earnings on loans and 110.4 investments. 1/ 4. Normal tax The disallowed expenses should be the total of items 38 and 3b. The allowed expenses should be the total expenses (before deduction of items 1s and 1b) less the The effect of the formula say be substantially overstated, since it is not certain that adequate disallowed expenses mentioned above. allowance has been made for bond premium on tax-exempt securities in reporting income on the tax return. 1/ 0 Grone interest minus amortizable bond presium. . 151 Appendix -2- 5. Surtax and declsred-value excess-profita tax 152 The dieallowed expenses should be item 3b. TREASURY DEPARTMENT The allowed expenses should be the total expenses INTER OFFICE COMMUNICATION before deduction of items la and 1b) less the dieallowed expenses mentioned above. DATE April 9. 1945 6. Excess-profits tax normal tax (total of items 3a and 3b) unless the bank elects to include tax-exempt securities in invested capital for excess-profits credit and 18 therefore required to include tax-exempt interest in excess-profite income. In that event, all expenses should be allowed for excess-profite tax. The allowed expenses should be the same as for normal tax (total expenses minus total of items 3a and 3b), unless the election mentioned above is exercised. TO FROM Secretary Morgenthau J. V. Pehle FOR YOUR INFORMATION The attached excerpt from the Congressional Record for April 5 indicates that Senator McKellar has now inserted into the Record the letter to him of April signed by Chairman Gillette concerning the Treasury Appropriation Bill. You will also note from the attached 2 The disallowed expenses should be the BEER as for clipping that Jerry Klutt= carried the story of this letter in his column on April 7. Attachments Jose PRECISION TRADE MARK MICROSTAT MICROFILM CONGRESSIONAL RECORD The Washington Post 153 APR 7-1945 Thursday, April 5. 1945 The Federal Diary By Jerry Klutter SURPLUS PROPERTY : O C 154 156 CONFIDENTIAL Lend-Leose Operations FORMIGN ADMINISTRATION Executive Report No.1 Washington, D. C. ALLOCATIONS, OBLIGATIONS AND EXPENDITURES April 9. 1945 LEND-LEASE FUNDS APPROPRIATED TO THE PRESIDENT Report or of Peb. 28, 1965 (Thousands of Deligra) MEMORANDER Adjusted To: From: Appropriation Category The Honorable Henry Morgenthau Berbert Willett Ordnance and Ordenance Stores Director of Research and Reports Office of General Counsel Aircraft and Area. Material Tasks and Other Vehicles Subject: Monthly Reports on Lend-Lesse Querations Watercraft Miss. Military Equipment Transmitted herevith are copies of Executive Reports Production Facilities on lend-lease operations as of February 28, 1945. Agric. and Indust. Commodities Servicing, Repair of Shipe, etc. Services and Expenses obligations Expenditures $1,467,306 $1,463,009 $1,381,776 $1,302,494 2,486,625 2,479,378 2,364,497 2,201,961 764,273 746,024 713,213 652,153 4,121,703 4,098,470 3,897,542 2,417,704 304,288 300,562 268,362 264,861 1,013,746 1,087,665 1,086,876 1,056,458 16,680,589 16,399,404 13,515,910 11,312,538 790,818 787,468 650,275 470,473 475,000 422,635 337,820 296,724 33,208 32,322 30,434 29,955 26,209,498 27,815,229 24,216,286 19,962,609 Administrative Expenses Total Procuring Agency Bar Department Cumulative to February 28, 1945 Allocations obligations Expenditures 5,414,949 5,234,772 4,909,416 Savy Department 4,315,566 3,398,879 3,104,497 Maritine Commission and Mar Shipping Main. 4,149,777 3,660,261 2,269,138 Treasury Department 6,016,032 4,865,477 4,119,913 Department of Agriculture 7,835,993 6,629,350 5,538,244 Other Total : Camulative to Fabrierz 28, 1945 Allocations Appropriations Foreign Econoule Administration office of General Counsel Division of Research and Reports April 1945 82,912 27,547 21,401 27,815,229 24,216,286 19,962,609 158 CONFIDENTIAL Lend-Lease Operations Executive Report No. 2 CONFIDENTIAL STATEMENT OF LEND-LEASE AID Report as of Fab. 28, 1945 Lend-Lease Operations Executive Report No. 3 (Thousands of Dollars type A14 Goods Transferred Camulative to Feb.28,1945 $33,813,526 Monta of Jan. 31, 1945 $32,407,334 LEND-LEASE GOODS TRANSFERRED Jan. 1945 Feb. 1945 $1,406,192 $997,106 Report as of Feb. 28, 1945 (Thousands of Deliera) 544,887 537,917 6,970 5,582 2,921,826 2,873,615 48,211 166,725 Production Facilities in U. s. 637,743 630,689 7,054 2,170 Ordenne (Excl. Ammunition) Miscellaneous Expenses 101,727 108,443 6,716 1,779 4,150,664 55,519 178,246 36,557,998 1,461,711 Servicing, Repair of Ships, etc. Rental of Ships, Perrying of Atterneft, etc. Total Services Total Goods and Services Cumulative to February 28, 1945 4,206,183 38,019,709 Cr. Br. Empire 1,175,352 Date on Goods Transferred include value of goods procured free land-lease appropriations to the President and to the Bar and Mary Departments. Type ALL Goods Treasforred Servicing, Sapair of Ships, etc. Jr. Empire 24,284,749 378,683 Rental of Shipe Ferrying of Aircraft, etc. 2,277,372 China U.S.S.R. 236,146 8,255,339 1,900 15,508 113,597 394,229 Other 1,037,292 Total Goods and Services 52,946 1,224 7,365 544,687 234,717 2,921,826 40,194 Total $40,411 Ammunition and Components 1,942,016 8,220 465,466 93,890 2,509,592 Aircraft 3,267,135 76,750 1,034,623 178,635 4,557,143 Aircraft Regions, Parts, etc. 1,846,981 24,739 322,418 59.77 2,253,917 Tanks and Parts 2,734,918 1,584 509,707 53,621 3,379,830 938,822 28,383 1,810,159 815,298 27,656 Materoraft and Parta 2,038,357 447 Foods 3,052,290 $1,232,497 329,243 257,388 3,425,435 3,273 1,432,003 58,786 4,546,352 Other Agric. Products 731,136 543 23,164 Machinery 726,343 13,042 1,080,794 18,404 1,836,583 403 755,246 33,813,526 Metals 1,190.44 13,776 683,329 54,615 1,942,164 Petrolean Products 1,630,399 2,872 80,476 13,385 1,727,132 Miscellaneous Materials 637,743 - Miscellaseous Expenses Other $298,659 Total 50,707 Production Facilities in U. 5. D.S.B.R. $14,690 Motor Vehicles and Parts Cumulative to February 28, 1945 China $878,797 and Manufactures 2,630,695 48,554 976,635 179,592 3,835,476 24,264,749 236,146 8,255,339 1,037,292 33,813,526 101,727 Total 38,089,709 Foreign Economic Administration General Counsel Foreign Seomonic Administration office of General Counsel Division of Research and Reports DEVISED of Research and Reports April 1945 April 1945 Y ( - IMAGE MARK 160 159 (5) The open market rate for United States currency rose PARAPHRASE OF TELEGRAM RECEIVED to as high as 750-780 in Chungking, due to the raising of price FROM: American Embassy, Chungking via Navy of gold and the consequent decrease in demand for six month gold TO: Secretary of State, Washington DATED April 9, 1945 deposits, but has steadied off to 700 since that tine. In running the rate is 610, the disparity being due to active demand for NUMBER 593 rupees for buying goods in India to be snuggled over the Ledo Road; SECRET rupees at 230 are at a premium over the United States dollar once The following message from Adler for the Secretary of the more. Now over 400 are savings certificates and the bond rate. Its Treasury is transmitted. February and March allotments have been sold out at 320 by the This message is relative economic situation in China. United Clearing Board. (1) During the month of March there was no evidence of any retarding of the rate of increase on prices. An increase of 33 1/3 % for wholesale prices in Chungking is indicated by one unofficial ATCHESON O index. (2) During March note issue CH dollars 246,864 million, which represents an increase over February of % while Chungking bank up clearings were almost 60%/at CN dollars 1300 billion. (3) The revenues, CH dollars were 8,000,000,000 during February;expenditures will exceed CH dollars 40,000,000,000 during March. (4) Sales of gold during March spot 21,000 ounces: 488,000 ounces total of six month deposits. The increase in official price of gold to CN dollars 35,000 per ounce effective 29th of March resulted in an increase of the price on the black market to CH dollars 58,000 by the and of the month. During the last week the demand for six month deposits has slackened off to 6,000 ounces daily but it is probable that soon it will pick up again. The short gold position of the Chinese Government is now one and . talf all lion ounces,approximately. (5) The open for 4-10-45 162 161 - #405, April 9. 1945, from Ankare PARAPHORE OF TELEGRAM SENT FROM: Secretary of State, Washington American Askare TO: DATED April 9, 1945 NUMBER: 405 the BROTTHINGHOLM. within the framework of the foregoing. in 0664 the refunees cannot be admitted to Palestine, the Mar Refugee Board is consulting UNREA to make provision for them at an UKBRA control case, The assurances given above should not be used in any way to SECURIT encourage refusal of admission of the group to Palestine by the British, which is the most desirable solution by far. Please refer to your cable of April 7. No. 473, which STETTINIUS as No. 29 was repeated to London. The American Fabasay is London has been asked by the Department and the Mar Refugee Board to emphasise with the Foreign office of Great Byitain the destrability of reloving Oayman nationals from Turkey from the standpoint of security. Further, the message states that 11 would be highly desirable that Jour who have been released from Germany for exchange not since such an eventmality would seriously entanger the success of exchanges later on. asida free almost certain hardship to the people concerned. You are authorised further, is this connection, to reason is your discretion, the assurances whic were contained is cable dated February as, 1944, from the Department, No. 146, and the following is particulars (a) Is maintaining refugees is Turkey, the Board is prepared to render full assistance. (a) The Board will make every effort to more refugees from from Turkey to other locations, should such action because desirable, If the Government of Turkey takes the steps accessory to facilitate the entry of . substantial number of refugees. If. as and when 11 because evident that the 134 refugees na the may not be admitted to FalesLine, the repitisioninboard such assurances Government shouldthe Govern- be made yourofdiscretion and to forthethe purposeofofTurkey indictant sent of Turkey to receive thes is Turkey pending arrangements for should the to some other place. The assurances which are their contained reneval is (a)inabove in your the discretion be of repeated Great Britain to Government of Turkey the event Government advises that the 134 refugees in question may be admitted to Faleetine when the quest permits. You are requested to do everything possible to secure the admission to Turkey of the 134 refugees aboard WRB:GLM J Paraphrased DC/L:LOW: AJ 4-18-45 164 arrangement. PARAPHERABE OF TELEGRAN RECEIVED (SECRET #) as URGENT FROM: American Legation, Stockhola AMERICATION TO: Secretary of State, Washington DATED: April 9, 1945 (Rec'd April 10th) NUMBER, 1326 BERN 1392 The following for MeClelland is 490. SECRET Reference your no. 1988 and our telephone conversation of April 6th. of war now on The following message for the Mar Refugee Board and for the Department is transmitted. Bar Department has agreed to sell Board 206,000 United States prisoner pareels Switserland, delivery by Intercross condition that these parcels are in repackaged before and that they will be delivered only to concentration camps. For Department has requested American Red Cross to earnark these 206,000 parcels for transfer to Bar Refugee Board under arrangesents being worked out between Mar Department and the Board. It is in response to message from the Department dated March 27, No. 563. Conversations have been actively pursued with the Japanese, the Russiane and the Seedes reference the release Board must know at once (repeat at once) whether you can obtain new containers in Switserland for repackaging. If so, can repackaging be done in sufficient time and in sufficient quantities to utilise all transportation facilities including trucks available for Board relief supplies. Board would be unable to arrange for delivery in Switzerland of containers shipped from United States for many weeks. In the mentine, is view of your no. 2009 of April 6, Board will bring to attention of Bar Department that Intercroes is of opinion that these parcels could be used as they are with exception of blacking out of markings, changing labels, etc. and transport of Fabbinical group from Shanghai, by Fabbia Jacobson and Helbe over . period of several months. At high levels the interest of the Government of Seeden - secured (a personal interest in the matter was taken by the Crown Prince) and there were promises made which are still in effect that the Rabbinical group would be given a collective Swedish visa and would be received in Sweden and supported there. STETTINIUS The position that release of the Rabbinical group would be (GHK) allowed has apparently been consistently taken by the Government WE 4/9/45 SWP of Japan. There has been no quid pro que so far as is knowng it is our understanding that the Japanese insist that, because living conditions and congestion of civilians is Shanghai are prectically unanageable, they would be glad to get rid of the Rabbinical group. Nevertheless, the Japanese have stated that HAS-1910 -2- This telegram must be paraphrased before being , communicated to anyone other than Government outside transportation facilities must be furnished, adding Ankara Dated April 9, 1945 Rec'd 8:30 p.n. Agency. (RESTRICTED) that they have no shipping between Shanghai and Vladivostak and Secretary of State, that rail transportation to the Fussian border from Shanghai (which is . weeks run) is equally impracticable in view of the Washington fact that the facilities are reserved for military purposes 487, April 9. 6 p.m. entirely. The official in the Ministry of Foreign Affairs The Fussians have expressed sympathy with the program but who is handling the after (REENING 473, April 7) has just have insisted that it is technically impossible for the Pursiana informed - the Turkish Government has decided to allow to furnish the transportation needed according to Jacobeon and the 134 Jewish persons on the DR THINGHOLM to land at Folbe, who state that no Russian vessels are running between Istember pending the "eventual determination of their Shanghai and Vladivostak which they call . prolonged run and fate". an extremely dangerous one. The Russiana state that the Sent to Department, repeated London as 31. , Sibertan railway is overloaded and that no promises of trans- PACKER portation would be based on realism, furthermore. JT There is no shipping belonging to the Swedes in the Shanghai area according to statement made by the Swedes. It is the belief of the Legation that the problem of moving the Rabbinical group from Shanghai has been examined into thoroughly and that it is . technical impossibility under conditions existing at present. For this reason we believe that nothing can be gained through additional efforts in that direction which would a retrace the identical steps which have already been taken and is addition it would .... likely that additional obstacles may be caused by the deterioration of Tusso-Japanese relations. JOHNSON DC/L.LON.MEE 4/11/45 15.00 Chauncey (for the Secry), Cohn, Dullain, Caston, Model, Matchison, MeCommack, O'Dayer, Files 166 PARAPERAES OF TELMORAK RECEIVED 108 167 AMERICAN LIMBON FROM: PLAIN TOP Secretary of State, Vashington Lisbon DATED: April 9. 1945 Dated April 9. 1948 NUMBER: 748 Reg'd 8:45 D.M., 10th Secretary of State SECRET The following massage WRB 377 is transmitted. Washington This message for Charles y free Sharp. Unitarian 430. 751. Ninth Replying to year No. 263 there have been sent to the Inter- VRS 378 JDC 213 FOR LEAVITY FROM KAROLD THORE governmental Committee is Lender by way of the America Minist ter Gottfarb Stockholm cabled *Professor Threspreis is Lisbon all particulars regarding 180 Bryea cases and is addition lists have been sent to the Mexican Legation is Lisbon who forwarded them to Mexico to the Ministries of Interior and Foreign Affairs there, 75 single men hiding is Lisbon were received letter from . Gruenberg Refiel *Preseident des Wirtechafterates bei der Jundisches Section der Veterisendischem Front' asking for medical repair and artisan tools. Please advise your point of view and included is the liet and is addition as ethere imprisoned also best ways of help and to whos help should be directed 19 families 3 of these being imprisoned; the namesef so of the is case Syedish leve will send relief to Palgeria" We replied: *Gied hear Swedish Jerry idering aid Pulgaria and hope final decision will be affirmative. meet endangered cases can be cabled if Deceasary Advice should be furnished that their information is not correct daily - are deported either to death or to Laprison erat. We giving $50,000 monthly through representative committee headed by Maurice Marcus Sofia also joint representative I learned yesterday that friend of President Barries, Professor 011 Tarragut former chief Quadalajara division has new been deported free Spain and put in prison. No exiled after long deprisoment is Spain and was later terrisoned is Portugal where - gave his assistance. Deportation to Portuguse Devile Island Terrefal free which few return is being threatened to all 1 new Tetenbul availing visa enter Palgaria already sent 1000 medical supplies. Believe best all concerned to keep work centralised therefore urge Swedish Jerry aid through joint channels. If this principle accepted details from the Uniteriass, what effort has been made to secure direct regarding treasfer funds can be arranged later. As Insurring nature committee you mention will send all information soonest" Requesting information concerning large - are available is France for their cliente who are not committee free Maurice Marcus, politicals. Is this company If we are not able to receive help from Dryen, 10,000 Why is there se interest is Pertual If in danger as year letter indicates. Is is requested that you consult for runts Lee Parlia, Labor League Hunts Rights, American Federation of Labor and National CIO of Var Relief Committees. In this regard as approach is being made to the British by Marks, CROCKER DC/L.LOW: CVY 4/10/45 CHOCKER KIN PRECISION TRADE MARK MICROSTATI MICROFILM BOLL NO. 170 169 LPO-3977 Stookhols Distribution of true reading only by special ( PARAPHERASIS OF TELEGRAM SUN arrangement. (SECRET # Dated April 9. 1945 Rec'd 6:55 p.m. Secretary of State, Washington FROM Secretary of State, American Embassy, London TO: Washington. April 9, 1945 DATED 1328, April 9, 7 P.M. 2757 Following telegram has been sent to London 750g SECURIT U. s. In VIAM of fact that ar Refugee Boards recently See your March 28 cable No. 3186. War Refugee Board and made available to local Yorld Jewish Congress 40,000 knower food parcels (helf to Goteborg for 185 by IRC Department assume that you have discussed with the Foreign office delegate) for distribution to Jewish concentration campa in Dermany through the facilities of the Swedish Ankara's April 17 cable No. 29. Along these lines, you should 23, 8:30 P.S. has lost considerable of its impdiate stress the destrability from a security standpoint of removing Deman nationals and officials from Turbey as soon as possible, a view which the Foreign Office presunably shares. Also, it is believed by the Department to be very undestrable that any Jawa released from Germany for purpose of exchange be returned ultimately to Dermany as such . development, apart free almost certain hardship to persons Red Cross, the program referred to in your 270 of March urgency. Receive of extresely limited transportation facilities to Germany, local Jewish group is appreciative of the fact that it will be nost fortunate if 14/succeeds in delivering even these 40,000 packages. Local group is very arecious to obtain necessary funds to carry out its purchases for larger program, which supplies however simply will be stockpiled for immediate post war delivery. They are particularly excdous to purchase medical supplies at earliest opportunity since they report local supplies quite abort. Food also will to acquired locally, of products indigencous to Uweden. Clothing is antifipated to come from American sources. concerned, would probably imperil seriously pending negotiations looking toward the departure of Jown from Germany in exchanges, between this Government and the Derman Government. STATTINIUS Repeated to Department for NER as our 134. Shipments through commercial channel such as Mootbar were discontinued same time age and expect for limited parcels individually directed through parcel post channels rest of shipments are entirely under auspices of Swedish Red Cross. JOHNSON INS MICROSTATI MICROFILM 171 PLACE Decharest 0 Dated April 9, 1945 Secretary of State, Washington. 254, Firth Is reply to Department's 161 of March 28 Funanies law of December 18. 1944 repealing all anti-Jerish measures dees not (repeat not) specifically recture citisenship to Jove denationalised by Remains decree of January 20. 1938. The Justice Ministry since January has been drafting law restering citisenship to Jove denationalized under decree of 1938 to apply to Jove 0 at home and shreat. Latest available draft of this law being transmitted by peach. No (repeat no) Rementab law denationalised officeme of sthate German origin service is Careas army but individual cases of denationalization have been made under Rumentan law of 1939 regulation acquisities and less of Aumotes citisenship and es Council of Minister reporte General law es subject is being drafted by Justice Minister. BERRY VIG RECISION TRADE MARK MICROFILM BOLL NO. 173 172 -2( CABLE TO WINANT, LONDON, FOR MAY PROCE WILLIA O'DITER MAR REFUCES HCARD For your information, following 18 text of cable receive from leClelland vander date of April 6th: "Arragurements with ICRO for socuring trucks to transport it's food parcels into Dermany for civil detainess are shaping lap as follows: Six Renault tracks will be available for loacing morning April 9 and should depart on April 10. ICHO's Division of Special Assistance still to relief middy worsening conditi of detained in concentration campo of Oran- ienburg, lavensbruee and Hamburg If it proves impossible to dispatch trucks this area they will be sent twach region and east. "Prospects are good letting four to six more *Exact area of camp from which these persons come is still unknown. "Herbert Kataki arrived this afternoon, April 5 from Paris and will actively work with ne on these WELL programs. "All further significant developments in situation will be reported to Hard. For your further information, Hoard has agreed to purchase from The Department 206,000 United States primoser of the par- cels nor in Switserland for distribution by Intercross to refugees in German concentration campa. Details of transfer now being worked out between War Department and -card. Penaulta moving by April 13. "These French trucks, although new, all TO- quired light overhaaling, rainting with ICIC insignia, of cetera, witch has delayed their use. with tires and diesel oil procured for ICIC by Board's efforts countittee hopes naice at least four tracks available THIS IS - LONDON CAREX NO. 64 also next week for our program. *Since it is quite possible that only areas of Mutch and to east and northeast thereof will be accessible in future it is planted to direct relte: shipments by truck mainly to these regions taking in campa of Dachau, Landaberr Anlech, Flossenburg and Marthausen near Lins, including emergency relief to evacuated deportees on roads. Those shipments would be apart from any that might go to Lusbock area. "Recent DATE from Dermany indicates that almost all internal telephone and telegraph comunications are disrupted so that individual care commanders are progressively more isolated. Lattle of no centralised SS control, therefore, appears to exist which may tend to preclude any general last sinste extermination of large group of civil detainees. *ICHO reported this afternoon that truck convey carrying 300 French women and small children, presum- ably civil detainees, 10 expected to arrive groundigen Location, 1,15 P.B. April 9. 1945 PRECISION MADE MARK MICROSTAT MICROFILM 175 174 ( CARLE TO AMERICAN LISBON. FROM THE WAR REFUGES BOARD CABLE TO AMERICAN LEGATION, BERN, FOR MOCELELLAND. PROK WAR REFUGES BOARD Please deliver the following message to Hareld Trabe free Please deliver the following assenge to Nane Klee, 1 lue du Rhone, H. A. Leavitt of American Jewish Joint Distribution Committee: Genera, from Abrahan Silberecheim of World Jewish Congress) QUOTE EARLY LAST TEAR VS PAID AMERICAN RXDCROSS TASTESSUAND DOLLARS FOR MEDICANGESTS POLAND. SUPPLIES QUOTE PLEASE INFORM WEETHER YOU HAVE SECURITY PROTECTIVE DOCUMENTS FOR ABRAHAM, MARGARETHA, ARVOLD. MILLY DRUYF. ARRANGEDCEITS MADE REDCROSS REPRESENTA* MOSCOW FOR RECEIPT AND NOW TITA ERIVA ELLIOTO POL ANDREDCROSS SHIRK CENTRAL DISTRIBUTION THROUGH AND SUPERVISION JEWISH COMMITTEE WARSAW. ADVISE SALY MATER REQUESTING HIS COOPERATION FRANCIS JAMES REDCROSS REPRESENTATIVE THIS IS WRB BERN CABLE NO. 492 GENEVA FACILITATE SHIPMENT. UNQUOTE THIS IS WELF LISBON CABLE NO. 167 D 1:10 p.m. April 9. 1941 1:15 P.S. April 9, 1945 C 176 177 C CABLE TO AMERICAN CONSULATE, ISTANBUL, FROM THE WAR REFUGES BOARD 1 CARLE TO AMORICAN LEGATION BERN, FOR MOCLELLAND, FROM WAR REFUGEE BOARD Please deliver the following seasons to Professor Dr. A. Justow, Please deliver the following message to Gerband Riegner. 37 Qual International Rescue and Relief Committee, Istanbul, Kadikey, Mshurder Wilson, Geneva, from Kurt Grossman of World Jewish Congress Gaddees 121. Istanbul, Turkey from Sheba Strussky of International Rescue QUOTE CHIEFRANSI BENSION OUNIKL JERUBALEM REQUESTED HELP FOR 155 SALOMIKA JEWS SUBJECTS OF SPAIN IN LAZARK RESTINISTY LAURANCE KNO IS IS CONTACT WITH RICHARD LICHTHEIM IN POSSESSION THIS LIST WHICH YOU PLEASE SEOURX AND SANT TO STORCH TO SEND THESE PEOPLE FOODPARCELS DRAW SPECIAL ATTENTION CASE ORPHANS MAANINA SIG. AND HENRY BERGENBELSKN STOP INFORMED THAT 40 JEWS ARRIVED LATALT SWITZXRLAND FROM AUSTRIAN CAND PLEASE TRI FINE OUT WHETHER MOSKOVITE. KELEXA AND BOT ANONGST THASE. UNQUOTE and an 4 Heller Committee! COOTE PARTLY REPEATING OUR FIVE STOP WILL THOTHOUSAND MONTHLY * SUFFICIENT ACCORDING PRESENT KEKOS QUERT RESIDUTION NECESSITATES BY DESPERATE IN FRATCE AND ITALY STOP RECEIVED NEWS YOUR EXUKLIKNT WORK FROM KATEKI STOP AWAITING YOUR APPROVAL TO APPROACH FRANK BLACK TO JOIN TURKISE COMMITTEE STOP BRETHOLE SHOULD CONTACT KELVIN BLUM OUR WORK IN LENT TO UNREA ATHONS AND EXPLORE WITH BLUM POSSIBILITIES JOINS IRRO-UNIONA SUPPLEMENTARY PROJECT STOP CARLED BLUM LIKEWISK STOP NO FUNDS FOR WORK IX PALESTINA BUT WILL REFER CTLASEK TO OTHER ADDICIES HERE. UNQDOTE THIS IS VKR BIRS CABLE so. 491 THIS IS WRB 1 1:10 P.A. April 9. 1940 1:15 P.B. April 9. 1940 0 RECISION MARK MICROSTAT MICROFILM BOLL NO 179 178 CARLE TO AMERICAN LISBON. FROM WAR REFUGES BOARD D CASU TO AMERICAN ENRASST. LISHON, year TEX TEACH RECURES HCARD Please deliver the following message to Harold Trobe free Please deliver the following message to Harold Trobe from H. 4. Leavist of American Jewish Joint Distribution Committees 1/2 A. Leavitt of American Jewish Joint Distribution Committee QUOTE ADVIS LINING AND SCHWARTE INVOIQUOTE AFTER RECENT KEETING WITH KISSKLET WHO RETURNING MOSCOW WK HATE PRACED TESTATIVE CONCLUSION TO VOTE KISSELEV THAT WINNEVER DECISION REACEED BY HIS GOVERNGERT GRADL UALLY RESETTLING JEVISH COLONISTS CRIKEA WX PREPARED COOTS TOUR 367 GOTTER IMPORTATION REGARDING STOCKFILMS DISCUSS OTTE PARTICIPATION IN PROGRAM. DISPITE our GIVEN TO CONDRESS NOT FROM AMERICAN REDCROSS AND THIS RUDGETART PROBLEMS VE DESIRE SHOW OUR CONTINUED INTEREST. REALIZE WHESEVER SUCE PLANS SHOULD MATERIALIZE OUR PRESENT STEP MAY INVOLVE OUTLAT RETWEEN FIVE HUNDRED THOUSAND AND DESTINED 00 THROUGH SOUTH MEDCHOSS AND TICA, UNQUOTE OF ADDITICAN REDOROSE UNTERSTAND AMOUNT SMALL AND NOT ATAILABLE FOR SALE. 200,000 KILOS 2000 REPORTED REPEAS TO PARCELS OF WAR REFUGER BOARD WHICH ONE MILLION DOLLARS ANNUALLY OTHER PERIOD. WITHOUT INDECATING ANT FINAL DECISION OUR PART OULLITOD ASCER. TAIN WHETHER ICA FRIENDS WOULD BE PREPARED SHARE IN SUCK ENTERPRISE IN ITANT SUCE CRIMEAR PROGRAM MAY STANTUALLY EVOLVE. END INNERQUOTE UNQUOTE THIS ID WITH LISHON CABLE NO. 166 THIS IS VRB LISBON CARLE NO. 168 1:10 P.R. April 9. 1945 1:10 p.m. April 1945 1 PRECISION TRADE MARK MICROSTAT) MICROFILM ROLL 181 180 14 CARLI TO AMERICAN LECATION, STOCKHOLD FOR OLSIN, FROM TAR RESPONSED BOARD Please deliver the following message to lre. Kline Ottensen-Jeneen John Ericsonag 6, Stockhola, Sweden from Sheba Strungley of International CARLS TO AMERICAN SCHASSY, PRICE THE HAT RESUORS BOARD Reacue and Delief Committee, QUOTE UST DISCONTINUED TRANSVISSION OF FUNDS UNLESS IN RECEIVE REPORTS ON EXPANDITURES AND ACTIVITIES STOP CANNOT UNDERSTAND HIT HEACHSTEIN CANNOT SEND REGULAR MONTHLY LITTER AND STATEMENT STOP AWAITING YOUR CANDED REPLY. UNQUOTE Please deliver the following massage to Dr. schwarts from 1. A. Lesvill of American Jowish Joint Instribution Committee COOTS ALTHOUGH FOLLOWE NO UP WASHINGTON YOUR UNTY PURANTA HULGARIA OUTLOGE UNIVERSITA FOR THINDIATS PROCESSION. DIFFICULTY NOT ASHINATION BUT IN ALLIND COMMISSION. HOMEVER DOING UTMOST THIS END. UNQUOTE THIS III TITLE STOCKHOEM NO. 349 ( 1,10 p.M. April 9, 1945 1:10 p.m. "pril 9, 1945 0 PRECISION TRADE MARK MICROSTATIURLPO MICROFILM BOLL NO 183 162 CABLE TO AUTHASSADO WINANT AND STONE, FROM DEPARTMENT, FEA, AND WAR REPUBER HCARD ( CABLE TO HARRIMAN, MOSCOW. FROM DEPARTMENT AND WAR REFUCES Reference our 2070 March 17 and your 2965 March 22. BOARD Reference is nade to Stockholm's No. 14 of April 4 to you, repeated to the Department All No. 1251 of April 4. Department and Board would appreciate your giving all No part of the proposed expansion in our 2070 will originate from the United States, out rather all will be indigenous to Sweden The relations between this proposed expansion and the originally approved 100 topa foodstaffe is only this That proposal outlined represents an expansion of the originally approved program of foodstuffs and in that expansion medical supplies and clothing are proposed for inclusion. possible support to the (medish Legation in Noncow in its request to the Nassian Government for assistance in deter= Tt is our intention that the distribution would be handled and supervised by Lite Swediah YNGA, which, so for an cables from Sweden indicate, performed with respect to handling and supervision on the initially approved 100 tona mining the fate of tagul Tallenberg, Astache to the Swediah foodstuffs. However, we have no objection to participation either on the part Legation in Hadapent. Jewish Joint Distribution Committee here finance this expanded program, it is our intention that their representative in Stockholn shall be the spokesman for The NB Refugee Board had special interest in Wallen- of Swedecross or Intercrose Insamuch AS it has been proposed that the American private agency interests in Sweden. Your reference to commercial channels, that is, J. Nootcaar and A. 3. ankonpaniet, does not have our approval. father, berg's mission to Hungary because of his outstanding work in protecting Jown and other victims of I oppression it is proposed that food parcel distribution to internees in concentration CATPS in ecenty Europe continue to be controlled as in the past by private humanitarian organizations who have demonatrated ability to perform with respect to distribution. during the energy occupation of Bangary. . ( THIS IS WILL LONDON CANER NO. 6) 1:51 P.M. April 9, 1945 10.00 a.m. Arril 9, 1945 PRECISION NOT TO BE RE-TRANSMITTED MICR COPY NO. 184 SECRET OPTEL No. 113 Information received up to 10 a.m., 9th April, 1945. NAVAL ANTI-SUBMARINE OPERATIONS. 8th. Frigates of 4th Escort 1. Group made promising attack on U-boat S.W. of Ireland (R), while promising attack also made against second U-boat by frigates of 21st Escort Group in same area. MILITARY WESTERN FRONT. Southern Sector: 1st French Army made steady 2. progress in face stiff opposition Karlsruhe and Heilbronn areas while further north infantry of 7th U.S. Army has cleared Wurzburg while armour of same Army has struck east from Heilbronn and reached Crailsheim. Central Sectors 1st U.S. Army secured bridgehead over River 9th Weser north of Munden and late reports state Gottingen captured. U.S. Army advancing against Ruhr pocket from North is fighting in Essen and Dortmund, while armour of same Army striking east now within 8 miles Hanover. Northern Sector: Armoured columns of 2nd British Army crossed River Leine N.W. of Hanover and now 7 miles from Bremen. Further west 1st Canadian Army made good progress with elements 4th Canadian armoured division reaching Meppen and Zutphen being cleared by troops 3rd Canadian Infantry Division. On 7th/8th special air service troops dropped in advance this Army and have gained their first objective. EASTERN FRONT. Northern Sector: 8th. Assault on fortress 3. city of Konigaberg launched when troops advancing from N.W. and south linked up thus encircling considerable body of German troops defending city while at same time main station and port captured with 15,000 prisoners taken during day. Southern Sector: Further progress made N.Y. Bratislava where bridgeheads won over River Morava. South of Danube good progress also made N.W. and west Vienna while fighting continues in southern and western parts of city where arsenal and three main railway stations taken. Further south gains of 12 miles on 30 mile front made in area S.Y. Winer Neustadt. ITALY. In Adriatic sector troops of 8th Army made further 4. progress between Lake Comacchic and River Reno where 275 P.W. cap- tured. In Nest coast sector U.S. troops captured Montignose. BURMA. Central Sector: Further 10 mile advance made south 5. Meiktila and our troops now 7 miles S.W. Pyawbwe. AIR WESTERN FRONT. 7th. Further reports state additional 435 tactical aircraft 0 missing ) destroyed 49 enemy aircraft on ground and over 600 road and rail vehicles. 2th/8th, 209 Bomber Command aircraft despatched (1 missing): 187 against oil distillation plant Molbis (south Leipzig) and 22 6. bomber support, when weather clear and bombing concentrated. Same 8th. and 1 night 46 Stirlings dropped paratroops Assen-Meppel bombers (10 area. bombers heavy escorted U.S. 1184 fighter outstanding) dropped 1493 tons rail centres Central Germany, 464 tons on 3 airfields Suremberg area, 656 tons on 2 ordnance depots and 244 tons other targets, when all attacks except one made visually and reported successful with no enemy air opposition. SHAEF (Air). 801 medium bombers (9 missing) attacked conmunications and oil targets while 2073 fighters and fighter bombers 9 missing) operated Northern and Central sectors destroying or danaging 800 road and rail vehicles while inflicting enemy casualties 35.4.13 in combat and 60,3,74 on ground. Air transport sorties 983 flown. 2. MEDITERRANEAN. 2th. 668 U.S. heavy bombers despatched. but majority returned early due to weather, while remainder dropped 289 tons on 5 alternative railway targets. 629 tactical aircraft operated whole front cutting railway lines 53 places and destroying 7 oil cisterms. # April 10. 1945 184-A -2- 184B 9128 A. M. HMJr: B: Mr. Dan Bell: Good morning. HMJr: Can the people hear me? B: Yes, they can hear you. HMJr: And I'm making a record? Yes, air, you are making arecord so be careful what B: HMJr: What? B: And be careful what you say HMJr: B: HMJm B: 1. HMJr: (laughs) All right. It will be held against you. Well, now, Dan, I've got a flood of messages here before me, see? All right. And in reply to this request of the War Department to send some people over to run down German funds HMJF: HMJr: B: HMJr: B: HMJr: B: HMJr: B: I definitely do not want to send Harold Glasser. All right, I told Harry that this morning. I don't want to argue about it. All right, air. I want to suggest that Orvis Schmidt go. All right, we already have that under. consideration. Yeah, now I have, what I think is a brilliant suggestion for a san to head that section. I mean, whatever you call it, the Finance The Finance section. HMJr: Yeah. B: Be over all, eh? Yeah. I think he would do a bang-up job for us. Now I'11 wait and ass what the crowd thinks. Just a moment. (Talks aside) B: Harry and Coe think he would be good, but they don't think he would go. HMJr: I think be would go. I don't think anybody can refuse this. Well, I don't know why they think he won't go. Let's see. you got nother job in mind? B: HMJr: Nobody can refuse to go. Just a moment. (talks aside) Well, they still think B: he wouldn't go that they have other jobs in mind for him. HMJr: Other jobat talks aside) Oh, I thought you said. wait a minute. go. He's quite certain that he will not go. B: Well, Harry saye there are several reasons why he wouldn't Yes. B: All right. I would like to suggest Milo Perkins. Milo Perkins. B: you say. HMJr: Be over all. HMJ: B: HMJ B: HMJr: B: Well, let Milo Perkins decide that. All right. Hello? Yes, all right. And you people this morning get in touch with his and put it up to him. All right. HMJr: See? B: Yes, sir. HMJr: Do they agree that if he would go he would be a good nant -3- 184-C 184-D B: Yes, they all do. HMJr: What? Herbert doesn't. HMJr: Well, what On cartels. B: On cartels, yes. HMJr: Yell, we don't want a cartel man. B: No. HMJr: Well, talk it over amonget yourselves. , B: HMJr: Herbert doesn't think that he would be a good man, most of the others do. B: All right. HMJr: What's Herbert's objection? HMJr: Now, hello? B: And Luxford thinks he's a cartel man. HMJr: A cartel mant B: Yes. B: HMJr: B: HMJr: B: Milo Perkins? HMJr: Yee, he wrote an article on it. Personally I don't know him very well. I was never impressed when I was in the Budget and he was in the Agriculture, but then B: B: HMJr: I wouldn't hold that against him because HMJr: Well, am I not right that he more or less spearheaded this thing when we were trying to get Sweeden to stop sending ball-bearings and that stufft The t I don't know (aside) Was he? Lauch Currie B: was the head of that, they say - spearheaded. HMJr: B: HMJr: B: Well, wasn't Milo Perkins very activet He played a minor part. (Laughs) (Group laughter) (He was on the other side of the fence entirely) Well, then why do they think he is good? Wait a minute. (The head financial section, yeah, head of the financial section the Secretary is suggesting him for). Coe said we have no basis for believing that B: HMJr: B: Well, you had better find out. And, the only way you can find out is to send for him. Well, we can find out. Hellot Yes. DuBois says the one thing that he knows is the article he wrotein Harper's which is against him. Dan, I got this letter from Robert McConnell. Hello? Yes, I haven't seen it. Well, he wrote me asking ay advice, you see? on, yes. He did talk to me, however, about it. Now, what I'd like him to do is let him read draft which the boys sent down to as on reparations. Hello? this B: Yes. HMJr: And I want to know how McConnel feels about that. See? B: All right. RMJr: But If B: I get it. HMJr: B: he would agree with our views on Germany. HMJr: Yes. HMJr: B: HMJr: the reparations draft, see? And tell McConnel that if Mrs. Morgenthau continues well for another 24 hours, I will be coming up tonorrow. All right. And whether he would mind waiting until I got up there. I's sure he would. And that I then would like to sit down and talk to him. But if he will go along with us on that reparations draft, and that is good a thing as any to take anybody's temperature, let his read that -5B: (laughs) HMJr: And -6- 184-E HMJr: you know, riding in this morning with Mrs. Lehman I got an idea. I think that there would be some women in this country that we could send over there who have lost sons and feel the way Mrs. Lehman ... amonget them you can find some University woman, or some woman that would just tell some of these ap- using the wife of General McNair. Hellot Mrs. Lehman - she'd make even Joe DuBois pale. Yes. RMJr: B: HMJr: B: peasers where to get off. wish you could hear And they are using her. There must be other people like that because the mothers of America, you don't have to tell then about being tough on Germany. You mean in this over-all set up? I can't understand why they Yes. I just don't don bring some women in. I mean, take a women like Mrs. McNair. for instance. There are other women like that I don't know, for instance, who General Rose's wife is, who was shot there in Germany the other day. B: (Laughs) HMJr: Hello? B: Yeah. HMJr: B: where. What? What are you saying B: I say we might look at it. It hasn't been thought of apparently here HMJr: What? B: Come from out in the Middle West someplace, I don't HMJr: B: Denver. But I would think seriously of asking the Aray about the wives of nome of these Generale-- who they are, HMJr: how such education they have. Now you take Mrs. George Patton, she's wonderful We have used some of these women in War Bonds. There are so few people in the country who feel the way we do about Germany, I think we have got to get a couple of women on that plane to come in and sit in on these things. B: HMJr: B: HMJr: B: Do you suggest Mrs. George Patton HMJr: HMJr: Well, I was mentioning her because she was very good. Mrs. Mark Clark Mrs. Mark Clark has been Hello? she's been in the limelight. All right, we'11 take a look at it. They need the money and everything else. What? All right, we'11 take . look/at it and see if there are any available. B: B: I think nine Generals have died, and amongst their wives there might be one or two very good women. know. "MJr: She saw some German prisoners this morning working here, fat as hoge, working around the hospital, and the guard with his back turned smoking a cigarette. Well, it hasn't been thought of here, but we might look at it. HMJr: No, I don't know either. They come from out Vest some- B: thinking more of some widow of some General. Now there are nine Generals who have been killed, and of those hellot certainly does. We never think in terms of women. Now the Army the State Department, for instance, is B: I say I'm just mentioning some of these people. I'm B: Mr. Harry They'11 have some feelings on this thing. All right, sir. And, now, let as talk to Harry a minute. Harry White: Hello. HMJr: Harry? 184 -7Good morning, air. W: HMJr How are your W: Fine, thank you. HMJr: Good. I with the hope that Mrs. Morgenthau will HMJr: And with that in mind I would kind of just like to mark time on this Bretton Woods business until I can get to grip with you fellows. Well, that suite me, I don't know whether it suite the W: other men. HMJr: W: HMJr: W: 2 HMJr: HMJr: And. because I'd be influenced Well, you saw ay telegram. W. Yes. Exjr: Yeah. HMJr: Hello? Well, I know it suite Bell. Oh, it does, well, now it's o.k. Hello? All right. I talked to Bell last nite and the only thing he said he' feel happy if he could tell Ecclee what . going on. W1 HMJr: that too. HMJr: Are you fellows sure that And I told his because we've got the votes in the committee? W: Well, I think a recheck would be essential before that definite statement could be made. HMJr: Supposing that be done this week W: I think it could be done this week. HMJr: If it could be done today or tomorrow. W: HMJr: W: Well, that I don't know. I don't know how many there are, but we can find out. We can. Suppose you try and find out. Right. Yeah, I'm lietening. And, no. I'll know tomorrow morning. They want one more 24 hours, you see. W: Well, we can find out what we dan today. Would you suggest using Hannegan to find out, too, merely to bring him in the picture, or do you want us to work through Spence? HMJr: I would do it through Spence. W: What? HMJr: Through Spence. W: HMJ: Yeah, I think that myself, I think that he should do W: If we have the vote. I don't :-- by God, the way I feel, if we are going to do any compromising let's do it with our friends, like CED. W: be well enough, I hope to get back Wednesday nite. That's fine. W: 184-H 184-G W: HMJr: O.K. Yeah. I told Bell last night and he's agreed that just let Burgess 0001 his heels a little bit. Hello? Yes. The first thing you know another one of these fellows will shoot themselves. W: HMJr: W: HMJr: (Laughs) Yeah, I'm having. yeah, we are checking up on where all the boys are all the time. Yes. Now one other thing- this is for everybody. I want to ask Bell and you and Coe this question, "Where the hell 18 FEAT Why did they dump all this stuff in the Treasury . lap? Which stufft Well, there's this stuff of setting up these committees under General Clay. -10184-I W: Well, I don't know about it so I'll ask Coe. (Frank, did you hear what the Secretary said?) I'll put Frank Coe on the line, because I don't know what you refer to, Mr. Secretary. HMJr C: Well, I hear that Douglas saye that the way the policies are going that he won't have any industries to run. He is very disturbed. HMJr: Well, the funniest one I read was by I.M. Stone C: Yeah. All right. 184- J Mr. Frank Coat Hello. HMJr: Frank. C: HMJr: C1 HMJr: Yes. C: In this business, in all this stuff that General Hilldring HMJr: and General Clay are asking us to do after all, FEA is supposed to have a foreign economic section with about one hundred and twenty-five people in it studying Germany. Now General Clay and General Hilldring pay me the compliment of asking me to do this and to do that, but where the hell 18 Crowley and all of theat Well, this is in connection with the financial and propertysection of the Army. That is under Colonel Bernstein, and they frankly say they cannot get trained C: Now that isn't it. from the telephone conversation I've had with Bell, I don't see where FEA 18 doing anyWell, they are planning to --- they've got about eight, nine, or ten other economic sections of the Control C: Graney Howard. He's the Colonel who's been in charge in London. HMJr: C1 HMJr: Well 0: By the way, I just heard from State that Lew Douglas is going with General Clay. HMJr: C: HMJr: Bell knows all about it, he talked to Lew Douglas. He talked with his? Yes. Oh. He's the fellow - there was some story about the truck I forget - leave the trucks over there so that they can sell new trucks. Yeah, I think our boys --- I think Taylor and our people had some trouble with his section over there very definitely Now, here's another thing --- I wrote down two names, Milo Perkins, he may not be good, but you can check it. C1 HMJr: of work. HMJr: I also hear that Graney Howard of General Motors What Commission for Germany and they are planning to feed in civilian personnel into some of those sections. There' a ommittee meeting with Hilldring and the civilian agencies line up their people through that. Now the Army, as in the case of Italy, first doesn't want people, and then gradually as their men in the field scream they start asking for more help. But the other agencies are providing personnel but for different kinds What? HMJr: thing. O: (Laughs) Yes, that's all over. 1e going. financial men. HMJr: He asked. he said that when Leon Henderson was back, he said, "Morgenthau is having his way, . because everyplace he went in Germany he just saw chaos. Yes. The other san I would like to bring in as an advisor to the Treasury and get him into this picture somehow or other is President Conant. C: President Conant. HMJr: of Harvard. Hello? C: HMJr: Yes. I'd love to get him down here in some way so that while this thing at this end is in a formative period, that he would be there as an advisor to me. 12 - - 11 184. K C: C: HMJr C: HMJ C: HMJr: C: HMJr: C: HMJr: C: HMJr: C: HMJr: C: HMJr: Be here as an advisor to you. Personally, yep. Yeah. I wish the boys would think about it. We'll talk that over. There's no question where he stands. Hellot HMJr: C1 HMJr C: HMJr: C: HMJr: C: HMJr I haven't followed - I haven't followed him. Well, read his article in Life of two weeks ago. All right. Read his article. And he has a wonderful position in this country. That's right. Read his article of two weeks ago. We will get it and pass it around. Its the same as his speech . This speech was circulated about two months ago, but we could use somebody like that. Well, we will discuss it. C: HMJr: C: HMJr: C: We are about half way through the Economic directive over there, and we sent you last nite - did you get 1 77 a report on how those meetings are going. Wait a minute, I got everything here. Just a second, I don't think I HMJr: Is that it? That's it. I got that. That's the report up to date. Now you tell your friend White he sent as one on Belgium and Dutch lend-lease. Yes. I'm not going to worry about that until I get back. All right, then, we will just proceed as indicated Well, on the assumption that I will be back in a couple of days. Can that wait? Yes, air. What? C: Yes, sir. HMJr: Ian't that really --- are you doing that or is White doing it? C: HMJr: C: Well, I got too such is right, but it is all right. Wait a minute. C: reparations and That's right. HMJr: HMJr: Wait a minute, wait a minute -- I've got the one on Now, I've got that one. It says here, "As previously reported, the document - in a form acceptable to the Treasury is revised and ready for the Clayton Committee. Financial Directive C: Maybe you have too much down there. Well, in The reparations 18 going good. there. Now, how are you getting along over there with the State Department? C: HMJr: 184-L I'm doing that. White ought not to be doing it. No, he isn't. He's got all he can do on Bretton Woods. Well, did Clayton get in on any of thist Yes, Clayton has been in on this both on the Belgium and on the Dutch lend-lease, and he is having a change of heart. He said that Connally spoke to his very seriously - 13 - C:(Cont) about the 30 business and he is getting worried about it. Also, as you say notice this morning, Vendenburg 18 out asking the Administration for 184.M a full statement of what they intend to do financially around the world -- all their committments. HMJr: (laughs) C: HMJr: C: HMJr: C: HMJr: 8 No, all we get down here is the columnists. All right. All right. Now, if Mrs. Klotz goes back to her office, I'd like to talk to her. All right, goodbye. Bye. CERTIFICATE OF AUTHENTICITY ROLL NO 3 OPERATOR Schwent TIME START 945 mm DATE 1/30/47 DEPT. TIME FINISH 1115 peate B SPECIAL FEATURE OF COPY Diary Mar 23 1945 " 24.26 1945 Drany Book#831-2 , #832 #133 of 83+-1 at 1834.2 27.3 1945 apr 1-3 1945 6-10 . # 835 after after 4-5 1945 1945 (ppo 7 th 184M aprictions, conton next poll of thotstats Poor. writing gave gray anyally itle 2. : made accurate and complete reproductions of the records - admission by for microlining - the date or dates above messioned (Company Name and Address 1. The listed above is the roll number and the seconds which it contains 4 The if am portures have . each punched through the edge of the frame. they have been makes and roch retailer will appear attached 12 the beginning of this no. and will be presended by . certificate recided Centrar of Authensicing (Reader) if - pictures hole penches through de lower laft hand - of the frame, the picture . . deplicate and should be dassgarded , The if there are any significant feasures of the records microflement on this roll they will be described is my handwriting is the have above space labelled Special Feature 6. The said microlining -- performed persons - and in busformance with Contract Section Act of 1944 Secs . (b) and 19 (a) these and - to Regulation 11. Sees 8013.1 to 8015.9 inclusive made therevolle by the Director Comment - any attend - or additional regulations thereoo. P Name of Operator . I hereby certify - follows 1. I am . microble operator employed by MICROFILM CORPORATION