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SPRECISION TRADE MARK MICROSTATI MICROFILM INDEX TO BOOK 839 OF DIARY Book Page -AAcheson, Dean 839 119 HMJr thanks for cooperation - 4/21/45 Aiken, Senator George D. (Vermont) 17 Post-War Planning: Bretton foods 9 Alien Property Custodian: to be returned to Treasury under Foreign Funds Control - discussed in group meeting 4/20/45 -B- DIARY Book 839 April 20-24, 1945 Barry, Congressman William (New York) Post-War Planning: Bretton Woods 100 f., 231 Baruch, Bernard 149 f. 105 2,108,149f Post-War Planning: Bretton Woods 217 rt. Germany Reparations Bennett, Sterndale (United Kingdom Foreign office) 336 ff. China Burgess, Randolph 225 f. Business Conditions 194 ff. Post-Nar Planning: Bretton Woods Hans IDEIDO on situation, week ending 4/21/45 - 4/23/45 -C- Chase national Bank 239 f. Foreign Funds Control Chicago Hereld-American Robert Vanderpoel, financial editor, thanked for editorial of 4/17 praising HIJr's financing of war 0 0 133 f. Book Page c (continued) F (continued) Book Page Financing, Government (continued) T.V. Soon(asks Truman for aore gold exports to China 9:30 group discussion 4/20/45 Resume by Coe of recent developments in anticipation of discussions with Soong 4/20/45 Chinese Government misuse of U.S. financial help; Chinese impose on U.S. in charges for Army expenses: hold up tin exports to U.S. b) O.K. Yui, Minister of Finance, writes MAT 4/3/45 asking U.S. Cooperation (sent with Adler) reply 4/20/45 Sale of $200 million U.S. dollar savings certificates and bonds in Chine -- Coe nelso 4/21/45 a) Sold without consulting U.S. Treasury, probably to benefit top Chinese officials; Coe shows evidence. Coe to see Patterson (War) and Clayton (State), to get plan for Japan's defeat and opinion on China's request for gold - 4/21/45 a) Coe's report 4/23/45 on conference with Patterson, Collado for Clayton) and General Cinstead: Military plan calls for 20-30% of supplies for U.S. Army from China. In spite of abuses, war Dept. wants trucks and textiles sent to China: State wants SUS50 million in gold sent to China. finant talks to Sterndale Bennett in London to possible help to stem Chinese inflation - Winent cable 4/24/45 Correspondence Mrs. Forbush's nail report 4/20/45 639 ff. 7th War Bond Drive (continued) Letter to radio advertisers, advertising agehoies, red 10 networks and stations 4/20/45 Hass Demo: Government Security Market and 40 ricing of 7th War Loan Issues" 4/21/45 Treasury Letter on behind-the-scenes news to RO to all 48 chairmen: HMJr to group 4/24/45 Roosevelt, Franklin D., Condolence Eisenhower, General Dwight D. Post-War Planning: Germany Foreign Funds Control 139 ff. Chase National Bank case - discussion 4/24/45 Could, Florence: Resune of case and connection with Banque Charles (gloaking German assets) by Coe and Schnidt 4/20/45 Tuck, .. Finckney: License granted for purchase of house near Geneva, Switzerland 4/20/45 Iwo Jime poster to be presented to President Truman a) Marines who carried flag come to Treasury to be presented to Truman 4/20/45 37 See Post-We Planning: Germany 336 r. 76 Gold cache with 3196 million discovered in salt mines D.W. Bell memo to HIJr 4/20/45 Destruction in German cities described to HMJr by McCloy HMJ tella group 4/21/45 Could, Florence 56 105 48 31 f. Grafton, Sanuel Post-Mar Planning: Germany 105, 250 II. Hartnan, Joel S. 25 ff. Hull, Congressman Werlin (Wisconsin) 102 1 7th War Bond Drive 48 Germany 120 ff. -I Independent Bankers Association S.E. Flacek, President of Country Bank Division, wants appointment with HAJr - Luxford memo 4/24/45 16 India 19 75 Roosevelt, Franklin D., Condolences Tax exempt securities owned by Government: HIT asks a) Bell-HMT conference 4/21/45 239 ff. -G- 189 ff. Financing, Government 4/20/45 244 108, 115, 118 Post-Yer Planning: Bretton foods Bell about replacing with 7th War Loan Long 23's 135 ff. 47 Foreign Funds Control Dailey, Donald A. 839 33 FEA can't give india more funds 335 9 China M (continued) Book Page 0 Monnet, Jean Discouraged after FDR's death: wants HMJr to come to France in May to boost sorule t Japan Winant talks to Sterndale Bennett in London re "peace feelers' from Japan - finant cable 4/24/45 839 336 f. -KKirk, A. (0.00 Ambessador to italy) Roosevelt, Franklin D., Condolences Book Page 639 107 Morgenthau, Henry, Jr. New York Times mazazine article by - written by Heary Murphy enthusiastically approved by four 4/20/45 V-E Day broadcast draft OK'd by HWJ 4/24/45 12 306 334 Nathan, Robert R. HMJY congratulates on appointment as Deputy Director for Reconversion - 4/21/45 Leffingwell, H.C. Roosevelt, Franklin D., Condolences 28 f. Lend-Lease 131 Netherlands Lend-Lease 152 New York Times article for Netherlands Lend-Lease agreement, like Belgian, given Dutch by State Department 4/20/45 Coe memo 4/21/45 ... $242 million schedule, exclucing long-lasting articles 12 152 -P- a) b) or Holland proper, not East indies Patman, Congressman Wright -2- Describes grief in Europe following FOR's death 105, 247 ff., 333 107 HDT tells McCloy of FDR's trust in him: tells Treasury group of his cooperative attitude 4/21/45 107 Mexico Military Reports 4/20/45 4/21/45 4/22/45 4/23/45 4/24/45 220 Philippines State Department cable 4/23/45 re political and economic workings of liberation 211 r. Post-Mar Planning 9 Government wants to re-establish stabilization losp ending in June 1945 - White in group meeting 4/20/45 Perkins, Frances (Secretary of Labor) HAJr conversation re Mrs. Morganthau 4/24/45 Bretton Woods GO 184 f. 187 222 344 Small Business - Pepper Comulttee: Coe to work on suggestions on how small businessman can get more export business White peno 4/20/45 **** a) HMJr to read own statement instead of White 4/20 b) Text of HMJ statement 2 Post-Mar Planning: Germany Pepper Committee on Small Business Post-War Planning: Bretton Woods 2 McCloy, John J. (Assistant Secretary of War] 16 r. Post-War Planning: Brotton Woods 14 f. 58-68 TRADE MARK - P (continued) Book Page P (continued) Post-War Planning (continued) Germany (cont inued Post-War Planning (continued) Bretton Woods (continued) Congressman Wright Patnan asks HMJr to see Fred Florence, president of a Texas bank HMJ1 to compliment Senator Alken (Vermont) on Senate speech Truman decides not to appear now in news reel Connelly nemo to HMJ r 4/20/45 Group meeting 4/21/45 a) Hannegan tells HMJ Congresaman Barry New York) will vote for Bretton Woods b) Congressman Hull (Wisconsin) will vote for it - Crowley tells HMJr e) Luxford and O'Connell are talking to Wolcott. who is trying to work out compromise with bankers. HATT says he will see bankers Coe memo: suggested changes in revised drafts of 839 16 f. 55 ing 100 r. 102 postpone vote till after British elections: 149 f. compromise. Luxford to handle Bretton foods 153 ff. in his Treasury submits its changes, HAIr tell group mtg. 4/24/45 Feltus memo 4/24/45 giving proposed public relations program Peace" with outline of Morgenthau plan Group meeting 4/21/45: a) MeCloy conversations with Generals Eisenhower and Bedell Smith in Germany reported to group 231 d) Depazification vs. economic efficiency discussed e) Setting up courts to review accused Nazia rank 308 75 105 since returni ne from Europe Summary of Baruch-HMJr conversation 4/21: British undecided whether to build up Germany against Russia. Baruch vitally interested in German future. Byrnes for strong Germany, Baruch says 104Jr asks Truman to discuss economic future of Germany on HMTr' is return from Florida,4/21/45 C 145 ff. discussed Redrafted e Fowler naks that FEA points be considered in rewriting of March 23 document Keeting of Treasury group 4/24/45 to discuss finance and to send to Germany: A.H. Williams, president of Charton School of Business (University of Pennsylvania) auggested 193 213 f. 318 317 247-300 250 ff. 256 ff. 265 267 ff. 273 ff. 279 ff. 287 293 ff. 297 ff. 301 ff. DuBois memo 4/24/45 on weak VO. strong Germany in Baruch attitude toward Germany right, HMJ. tells staff: stronger for decentralization discussed f) Inflation control discussed by 104Jr b) New version of paragraph e) Clause banning disorimination because of Germany Samuel Grafton booklet "Let Germany Earn the b) Discussion on deletion of permission to postpone arrest of Nazia 225 r. Congressman Barry tells Americans United deleme- tion he will vote for Bretton Woods group Meeting held 4/24/45 on revision of 1067. Present: D.W. Boll Glesser, Coe, HIJr (Treasury) McCloy, Hilldring, Major Gross (War): Clayton, Despres, Riddleberger (State) Crowley, Fowler (FEA): Downey (Navy), Lieut. Bankroft. a) HMIr asks whether the directive shouldn't be sent directly to Eisenhower to take up with Allied Control Council, Instead of first being submitted by Winent to European Advisory Council Burgess should submit his recommendations before 4/24/45 Revised 1067 - text a) Changes proposed by Treasury 102 839 192 OK Baruch-1347r conversation 4/21/45: Baruch would absence March 23 directive 4/21/45 attend meeting re March 23 directive - IDSF Clayton asks HAJT 4/23/45 whether Crowley can Clayton-HMJ: conversation 4/23/45 reported by HMTr: McCloy, Clayton and HAJT to meet 4/24/45 on 1067 revision a) Clayton-Hillr conversation 4/24/45 re meet- 17 next apparently not keep on Bretton Woods White memo 4/21/45 giving his views on proposed Book Page re Russis 105 r., 108 149 f. 144 McCloy-HMJr conversation re Germany summarized 330 333 PRECISION MICROFILM TRADE MARK ROLL P (continued) Book Page P (continued) Procurement Division Peble weekly report, week ending 3/24/45 Post-Var Planning (continued) Reparations HMTr tells Stettinius he prefers consultation with Clayton instead of Grow 4/20/45 Progress of discussions with State discussed in group meeting 4/20/45 Frank Walker going abroad in charge of preparations, Clayton tells HUGT 4/24/45 Baruch-IDGJ conversation 4/24/45 Salter to head British delegation, President tells Lubin - Treasury group meeting 4/24/45 Puleston, Captain W.D. (USN) Roosevelt, Franklin D., Condolences 839 3 weeks White meno on his part in conference: proposed formation of Economic and Social Council 4/21/45 proved by Executive Committee on Economic 212 ff. 232 110 r. 161 f. 163 ff. 1) "Social and Economic Objectives of General Internation Organization* Reparations See Post-Nar Plannings Reparations Roosevelt, Franklin D.: Condolences 4/20/45 Genevieve Tabuis (Pour La Victoire Captain T.D. Puleston USN'T Hartman, Joel S. R.C. Leffinwell Donald A. Dailey (Rochester, N.Y. Postmaster) A. Kirk (U.S. Ambanandor to Italy) Memorial services in St. Paul's described by MeCloy: Churchill weeps 21 f. 23 f. 25 ff. 28 f. 31 f. 334 107 Grief in France general. Ross, Charles 2) "Outline of Proposed Relationships between International Trade Organization and General International Organization" Surplus Property Transfer to Conserce Department completed 4/20/45 23 f. 214 a) Memos sent by State Department 4/16/45 apForeign Policy: 839 73 ff. 11 San Francisco Conference White tells HMJr 4/21/45 he wants to stay 2 or 3 Book Page Congratulated by HMJr on appointment ss press secretary to President Truman 4/21/45 130 -S- 17 a) HATT commends Pehle of Budget 315 4/20/46 r) HMJr farewell letter to Surplus Property employees 4/24/45 Pehle weekly report - week ending 3/24/45 Snyder, John W. 69 313 71 II. 128 Soong, T.V. China Stettinius still engry about FDR's withdrawal of March 10 directive, HMJr thinks - 4/20/45 HMJr aska Frank Coe 4/21/45 to get plan from State and War Departments on how to defent Japan See also Post-Mar Planning: Germany Press Relations Fussell somo 4/20/45 suggesting press "aeminara" on bookground material OUT congratulates as Federal Loan Administrator 4/20/45 35 5 ff.,140 f. State Department Taxation Blough meno on planned off-the-record talks with executives and newspaper editors - 4/21/45 44 f. 44 T. e) C.S. Bell to serve as adviser in transfer - HATT memo Smith, arold Tost-Mar Planning: Surplus Property transfer 52 Surplus Property See Fost-War Planning: Surplus Property 3 b White SAYS publicity unsatisfactory c Surplus Property news letter recounting transfer d Obstructive attitude of Harold Smith, Director 108 Book Page Book Page to (continued) War Refugee Board (continued) I Tabuls, Genevieve: 839 21 r. General (continued) - Cables: Trobe 4/20/45 re Red Cross food parcels Trobe asks 4/20/45 for search service for Central Committee of Folish Jews in Warsaw Armour 4/20/45 re unused quote numbers Trobe 4/20/45 re sailing of British steamer from Lisbon for Tangier Leavitt to Trobe re budgets Schwartz 4/21/45 re funds for Italian operations Roosevelt, Franklin D., Condolences Tax Enforcement o'Connell memo 4/20/45 to HMJr: districts to interchange weekly reports; situation at Atlanta OK a) HW says reports aren't good; asks O'Connell to "put the heat on." Suggests check on farm- 70 112 r. ers for income tax payment Linder report 4/21/45 to Lesvitt on operations in Belgium, Greece, and Poland Tax-exempt Securities Truman, President Harry S. Treasury Department, duties of, reviewed in memo for President Memo re withholding of President's income tax sent Prunan 4/21/45 Krook article in New York Times praising Trunan's first week Leavitt's relations with various U.S. relief Trobe 4/23/45 re Saly Mayer and Vand Hatzala approprintion Sehwartz 4/24/45 re funds Resnik 4/24/45 re JDC rollef work in liberated Bologne (Italy) Reanik 4/24/45 re movements of personnel in Mediterranean area 175 186 0 306 V-E Day - HAIr broadcast for Vinson, Fred Blough unable to reach Vinson about taxes na HIJr 96 97 98 178 180 f. 207 agencies 4 T. 4 Activities to be discussed by Truman and EUJ reviewed by Treasury group 4/20/45 95 Trobe 4/23/45: Saly Mayer requests information re See Financing, Government Treasury Department 839 94 Balkana omblea Schwartz 4/21/45 re funds for Yugoalav relief Troutman 4/21/45 re relief supplies for Sofin Schwartz 4/24/45 re funds for Greece 339 341 342 177 183 343 Sweden 5,000 Danish and norwegian Jews arrive in Sweden 4/18/45 from German concentration camps, due to Bernadotte negotiations (President Swedia 174 212A 151 Red Cross) - Hodel IDEMO 4/21/45 a) WRB parcela in Goteburg exhausted Cables: promised - Blough meno 4/21/45 Johnson 4/21/45 re finances and March operations See Book 837, P. 173. 176 Norway in World Jewish Congress aska Storch whether food supplies can be sent to liberated at Bergen Belsen ERB 4/24 to U.S. Legation in Stockholm re dis- War Refugee Board General O'Dwyer report for period 3/26/45 - 4/7/45 of absence 9 days to Los Angeles with O'Dwyer a) Settled by Pehle 4/24/45 Hodel-Pehle-EDIT: conference 4/21/45 on Model leave Cables: Harrison cable 4/20/45 re Armonian detainees in 124 ff. 243 338 Switzerland 69 Jewish refugees from Czechoslovekia arrive in Switzerland 4/19/45 - Model memo 4/21/45 151 Cables: 91 MeClelland 4/20 re evacuation of Jewish Bergen Belsen refugees from Switzerland to North Africa Germany Enerson Intergovernmental Committee) 4/20/45 re British Government's approval of his proposals of 2/16/45 on Spain and Portugal appearance of Reoul Wallenberg, Gwediah attache in Budapest, Hungary 84 II. 209 92 WRB 4/23/45 to Bern for American Christian Con- aittee TO relief to individuals 93 208 PRECISION TRADE MARK MICROSTATA REG. U.S. PAT.OFF MICROFILM ROLL NO Fill of Book Page - If (continued) 4/20/45 C War Refugee Board (continued) Turkey cables: Packer 4/23/45 from Ankara re departure of SS. .Drottingholm from Istanbul 4/21/45 Dan Bell 839 210 Secretary Morgenthau Washington Post HMJ thanks Eurone Meyer (publisher) for editorials on Bretton foods and 7th Mar Loan - 4/21/45 127 I wish that between now and Saturday you would Williams, A.H. (President Tharton School, Univ. of Pa.) Post-War Planning: Germany Winant, John G. (U.S. Ambuasador to United Kingdom China, Japan 301 talk to me about how many tax exempts the government owns. 336 f. I an thinking about selling some more of them, and replacing them in the Seventh War Loan with the long 2-1/2s. Please Volcott, Congressmus Jesse F. (Banking and Currency Committee Post-War Planning: Bretton Goods 102 be sure to talk to to about it. RECISION TRADE MARK MICROFILM MICROSTAT Assistant Secretary of the Treasury Date April 20 19 45 TO: Secretary Morgenthau This 18 to remind you that you told Senator Pepper, in reply to his request, that the Treasury would be glad to work on suggestions as to how the small businessman could get more export business. I've asked Coe to take care of this. H.D.W. Mr. White Room 3434 ROLL NO. RECISION MADE MARK MICROFILM MICROSTAT April 20, 1945 C I told Stettinius after Cabinet that I wanted to talk to him and be asked me what I had on my mind. I told him that I felt things weren't going very well on reparations, and that I felt that Grew Just represented the old line tradition inwas the State said Department. that he would I told have him that Clayton fine,heso Clayton come over to see me I have the feeling that Stettinius is the kind of man who carries grudges a long ways. He still hasn't gotten over that cable that was sent while he was in England telling him not to take up financial matters, and I think what is burning him up now is that after the President signed that March 10th memorandum it had to be withdrawn and replaced with a new one. 4 5 C -2- C April 20, 1945 The main thing I asked you people to come in so early for is because I an seeing President Truman at nine-thirty. 8:45 s.m. I an seeing him on this thing (indicating). If you can't hear no, Harry, why don't you bring your chair up? GROUP VR. WRITE: I haven't seen the final document, but I an a little of the opinion, Mr. Secretary, that a much shorter one is appropriate, because it looks a little too much 0.2 though we are trying to impress him with all the Treasury activities. And I thought If a shorter one could Present: Mr. D. W. Bell Mr. O'Connell Mr. White Mr. Gaulb Mr. Blouch Mr. Pehle be used, which should include just the problems you would like to take up with him, I think it would be a little Mr. Luxford more appropriate and a little more effective. Mr. Eass Mr. DuBois MR. C. S. BELL: Dan has seen the short one. Mr. C. S. Bell Mr. Fussell H.M.JR: Let no just PO over this, because he may ask Mr. Coe some questions. Tax stuff--that I understand is perfect, Mr. Feltus isn't it? Mr. Bartelt Mrs. Klotz C H.M.JR: Did you get your memo. MR. C. S. BELL: Yes. There is a very silort one with a bit of planour in it which omita Customs, Secret Service, and makes no mention of some of the financing operations. If you wanted to TO a little further there is a second set that brings in those other activities. I think possibly you will like the shorter form, and we can get it on three pages. H.M.JR: Good morning, everybody. Mrs. Horrenthau is better; otherwise I wouldn't be here. that was the word they used? They thought she had a spasn instead of another attack. All indications last night, electro- cardiograph, blood pressure, and all seaned to Indicate a spasm, and there was no damage to the tissue otherwise. Those things usually show up within twenty-four hours, so I thought I would code up for forty-eight hours and then go back again. I 18. BLOUGH Sure. H.M.JR: Law enforcement, I understand. China--Soong-- MR. WITH: 1 want to talk to you about that; it is important. H.M.JR: Do you want an appointment? NR. WHITE: On that? Soong has seen him, and I would very much like to see you before nine-thirty. H.M.JR: Shall I give him an appointment for tomorrow morning? JR. WRITE: You decide that after I talk to you. I don't think so, but I want to talk to you in some detail about it. H.N.JR: Is that so? MR. WHITE: It wouldn't take long, five or ten minutes. 7 -3- -4C MR. WHITE: I don't think you will be in a position ( to discuss it intelligently with the President. If, H.M.JR: Well, what about gold? I mean, he will ask me and say, What about it? after Soong has discussed it with him--1 don't think the President will be satisfied with just & no answer. I don't know, but I think you will have to go into it in 151. WHITE: Chinese rold-- more detail, and I believe--wouldn't you agree, Frank-- that it is the most important thing that is likely to President Truman will any, "Shall we or shall we not let them have gold? come up? MR. COE: Yes, I think another thing, though--they say they are going to do all these things in China. They will only do It if we pay them gold. They'11 cut the Army to three and one-half million if we pay them gold. MR. WHITE: I want to talk to you today. H.M.JR: for dear fellow, I have from now until nine-fifteen. L.M.JR: They'11 cut the Army? IR. WHITE: It will only take five minutes; It is immortant. MR. WRITE: The own Army. H.M.JH: what is the answer? H.M.JR: why should they out them down? MR. WHITE: No. H.M.JR The answer is no. C Mr. COE: To save on the budget and have better troops, and so forth. The Generalissimo says he will do that If NO pay them more gold. c MR. GITTE: No will need five minutes to discuss it. MR. LUXFORD: From what I have heard, I agree with Harry. This is one of the most important things. MR. L.B. BELL: These items, Mr. Secretary, that you kant to point out to the President are something you want to discuss with him very carefully in the future and H.M.JH: Try two minutes. Go abend. MR. WHITE: Hell, Soon is here. and Leon Menderson is here primarily to ret 10 much gold as possible. The story that they have appears to be a very defensible one that they are roing to re-establish, order reforms in China, but that is not the real reason in either Soon aind or the Generalissimo's mind. I don't know what is in Henderson's mind. He now is adviser to the Chinese before he takes any action on them. MR. WHITE: That is right. MR. D.W. BELL: And that he ought to get a complete Government at a very fancy salary. story because Soong has already seen him. H.M.JR: How mach? H.M.JH: That is a good point. HR. WHITE: I don't know how much, but name your own MR. WHITE: That is the point. Not only has Soong seen him, but Leon Henderson Is seeing everybody in town, The Secretary of War, Navy, Commerce, Nelson, and Crowley. figure, and you won't be far from it. And the political ramifications are the nost important things, Mr. Secretary, 1 think, that are on the docket. I.E.JR: Yes, but 1 am roing over the paper and-- H.M.JR: He hasn't seen Mrs. Klotz or me. 0 MICROSTAT MICROFILM ROLL NO. 9 8 0 C WHITE: The same thing there--they are all here the now. They MR. have just arrived with a group to give us factual data. MR. WHITE: He wants to. H.M.JR: was Pleven here? Has. KLOTE: Thank you, Harry. WRITE: Pleven is coming this neek, and here he with is MR. but their Treasury man came JR. PABLE: He is earning his salary. the going answers to see to you, the questions that we had asked him before the negotiations. H.M.JK: Well, where does that leave Tom Corcoran? H.M.J.H. Did he bring any cognac with him? MR. WHITE: I wouldn't be surprised but we will hear from him, too. MR. WE: He brought Monnet instead. H.M.JRI well, I think Dan Bell made a good suggestion. MR. D.M. BELL: This is a stimulant. In other words, I should handle these as a sort of red flag-- H.M.JR: Jean-- MR. D.N. BELL: This is an agenda that you want to discuss with him. H.M.JK: Have you got a copy with you? I will take the short one. WHITE: There is a BASS of discussions on to that, the and that MR. is something else you will want to talk President about later. 0 H.M.JR: I see. MR. C.S. BELL: Yes. MR. WRITE: And if you want to go down the list there-- MR. WHITE: That would be particularly true about the British, for example. H.M.JRI That is what I an doing. Mexico. H.M.JRI what about the British coming inf WHITE: Mexico, you will remember, wanted June, to re- and MR. their stabilization loan which ends in with then (Mr. C. S. Bell leaves the conference temporarily) establish that is, too, something you may want to take up later. MR. WHITE: I think you can give him . brief statement of how you left it with the British authorities and that H.M.JR: India. they are coming here right after V-6 Day to discuss financial assistance with you. That is another thing you will want to talk to hlm about. WHITE: Indian silver. H.M.JR: Enemy assets. H.M.JR: I think that is the best approach. I only asked for fifteen minutes. There is one more development on Indian silver. Mr. WE: FEA is running out of money and can't give then France-- enough to hold then over. what about having the Alien Property Custodian like 0 back H.M.JK: in the Treasury, in with Foreign Funds? would you to have it? MICROSTAT TRADE MARK MICROFILM ROLL NO 11 to I C MR. COE: I think the answer is no. H.M. JR: You don't know. MR. LUXFORD: They were a sickly green. MR. PEHLE: I doubt whether Treasury would want it. I doubt it. H.M.JR: After we were up an hour I had hyman eating pickle. 1R. LUXFORD: You just not rid of one of those dirty jobs, Mr. Secretary. MR. PERLE: Unless the Treasury is awfully free to handle the thing, there will be all kinds of complications like Colonel Johnson of the General Dyestuffs Corporation and you ought to be awful free to snuff all that out. you are, I think it would be pretty bad at this moment. (Discussion off the record.) Mr. COE: The rest of the German stuff is going comparatively well. Unless H.M.JR: That is the interpretation of 1067, but the reparations is lousy, huh? H.M.JR: How are the directives coming along on the MR. COE: State's opinion-according to the latest word, they are trying to bring Clayton back. peace plans? MR. WHITE: Well. there may be a serious development with regard to reparations, and you not 0 nemo, didn't you! C (Secretary holds a telephone conversation with MR. DuBOIS: There was a meeting Monday at which Clayton completely changed his position on the whole : thing. He showed his true colors all right. Colonel Adams. MR. WHITE: I am getting in touch with McCloy to H.M. JR: Just to break the tension a minute, I took settle what's going to be a major issue. He has just two doctors down from New York, one a famous heart cone back. these specialist and the other the family doctor, so when we know got up about ten thousand feet I said, "You know, I don't whether you want oxygen or not. So Doctor Levy takes his pulse, and Doctor Hynan quickly takes his, and I said, "who is going to do Morgenthau? (Lauchter) Each one grabbed his own pulse, you know, so quick, and as a matter of fact, nice. as you TO up,your pulse speeds up. But they were very If you had seen Hyman, you would have thought so. H.M.J All right, that is a very good memo, Charles. I compliment you. MR. C.S. BELL: Dan has been over it. You are in agreement with it, aren't you, Dan? MR. D.W. BELL: Yes, for the purpose you are going to use it. It is not very complete as a report, but as an agenda, it is perfect. H.M.JK: Non, I would like to say this. (Signs memo VR. FELTUS: The only doctor I ever saw ans completely green-skinned. H.M.JR: He walked in the plane, and I said, Meet Mr. to the President, dated April 20, 1945.) Feltus. 'Not the Mr. Feltus, he said. "I have been looking after your wife for weeks. She is a very nice lady." Luxford is the cruelest person you ever saw. If you had seen him laugh at Feltus and Bernstein. They not paler and paler. Where is Fussell? MR. FUSSELL: Here. 0 -10- 7-1 13 H.M.JR: It's a good job. He has taken sone of the material from some of the speeches I made on the trip to Los Angeles, and incorporated a lot of the stuff I used 12 C before. It is put together beautifully. C Mr. WHITE: Was that Henry Murphy? H.M.JR: This memo that you sent me--this article for the New York Times of its kind is the best thing that VR. HAAS: Yes. has ever been given me by far. MR. WHITE: Try him on the next speech. I don't think he has had much chance to do any of your speeches, MR. FUSSELL: Mr. Murphy did it. has he, George? H.M.JR: It is superb. Well, I want to see it. Did MR. HAAS: Henry is not looking for any-- he do that entirely himself? His D.W. BELL: Leave him alone. MR. HAAS: lie had the first draft written by somebody his staff, and 1 went over it and made some changes, so it was primarily his. H.M.JR: He said, "Do I have to turn the clock back on ten years, but It is--1 mean, get a thing like that that' is well put together--I recognise speeches I made in Los H.M.JR: It's a superb job. I have two little Angeles and-- suggestions. I never like to speak of soldiers as "our boys. I put in "our men, and 1 put in one other MR. HAAS: The AF of L speech. word, "good," and under my name if they would put--say H.M.JH: But the may it's put together, it's a beautiful job. Now, let ne just talk to my sister-In-law 0 a minute. donated to the New York Times. I am planning to go back there tomorrow afternoon. MRS. KLOTZ: They know that. Joan is down there now. You will be interested, and I haven't told you this--just to digress--that Joan did MR. WHITE: They mon't use that phrase. paper for graduation about the embargo of England and France arainst Spain during the Revolution, and she got H.M.JR: Why not? the first A Vassar had given in two or three years. I talked to her history teacher, and he said it was worth an M.A.. and she ment to the original debate in the Parliament and all that for her source. They have that at Vassar. It is very interesting. MR. D.W.BELL: They certainly wouldn't leave that in there. MR. WHITE: There must be some other phrase that will meet the same purpose. 1R. WRITE: Is she looking for a job? MN. FELTUS: They have their own formula. I don't know what it is, but they are not going to use it. H.M.Jas No, she' continue school in the fall. MIL WHITE: She's going to continue in history? H.M.JR: Fussell, see what you can do. Does that H.M.JH: No, physicians and surgeons course, but I thought I would bring it down anyway. I thought you would be appear on the 13th? MR. GAMBLE: In the magazine section of the week of O the 13th. a this article by henry Morgenthau Jr.. and ! would like to have it "donated to the New York Times. I don't want to say I don't want any compensation. Just say C 0 F-4 F-3 15 14 - 12 - - 11 I C MR. O'CONNELL: They start on time with Rayburn. interested in reading it. It's interesting. It is in I don't quite agree with you on that, Harry. the Vassar Library, They have the original debate that took place in the French Parliament. MRS. KLOTZ: I didn't get that. MR. WHITE: They have a good library at Vassar. MR. O*CONNELL: I don't quite agree with Harry. I don't think there will be the 'difficulty with Harry H.M.JH: In the ten minutes we have left--I find President Truman runs on time--are you all set? reading your statement this morning that Clayton got into the other day reading Stettinius' statement, because MR. GAMBLE: I'll double check before we go. everyone knows when it was decided Harry would read your H.M.JR: Where are those two men? there. The fact that you are temporarily in town for a day doesn't make it necessary for you to go in there this morning if you want to go somewhere else. statement it was because you not in a position to be MR. GAMBLE: They are due here now. 1 will see if they are here. (Mr. Gamble leaves conference temporarily.) H.M.JH: I'll come up the minute 1 get through over there. I will go from Hrs. Acosevelt to Speaker Kayburn's (The Secretary holds a telephone conversation with Mrs. Josten.) MR. WHITE: Mr. Secretary, I am supposed to go up to the Senator Pepper Committee to read your statement. Now, room and from there to Senator Pepper. MR. WHITE: I'll tell Senstor Pepper that you have just arrived and that you want to appear, and that you 0 might be . little late. that was all right, you weren't here, but with your being here, I think that wouldn't take much of your time or C H.M.Jh: I spuld like White, Luxford, and Bernstein to go much out of you if you go up and read your own statement. We can postpone it until eleven o'clock if necessary, with no. fuss they have made about postponing their time for you, MR. WHITE: Unfortunately, Luxford and Bernstein ought to be at the hearing of the banking and Currency because if they hear you are in town and after all the and then to have me go up to read it, I kind of think it Committee. would be-- H.M.JK: well-- H.M.JR: Can you go with me from one to the other? MR. WHITE: If you could get through about half past MR. WHITE: Yes. ten-- H.M.JK: That's sufficient. H.M.JH: I hoped to join you fellows at the Speaker's MR. WHITE: Thank you. this morning. H.M.JRI You're welcome. MR. O'CONNELL: Ten-thirty. MR. WHITE: Hearings on Banking and Currency are H.M.JK: If I have fifteen minutes with Mrs. Loosevelt, I think I can go up there. They never start on time. still on. I was on yesterday morning and yesterday afternoon. This morning O'Neal and several others are going on. 0 0 F-6 F-5 14 - 13 - 16 17 C C MR. LUXFORD: Fred Florence. (Mr. Gamble reenters conference.) H.M.JR: I know him. H.M.JR: where are your boys? VR. LUXFORD: He thinks he has an idea on Bretton Woods that may be able to swing the bankers, and he would like to talk to you Tuesday or wednesday of next Ma. GAMBLE: They are all here. The third one caue yesterday from Imo Jima. The Indian is here,and they have added him to the party. neck, if that's possible. H.M.JR: Wednesday would be all right, at three H.M.JR: Have you got the picture? o'clock. MR. GAMBLE: The picture is here. Do you want to MR. WHITE: Could you call Senator Aiken? He has see it? made a wonderful speech about Bretton Woods and is making another tonight. He's a Republican from Vermont. (Mr. Gamble leaves the conference temporarily.) would that get in touchbecause with him, you can handle H.M.JR: Sure. MR. WHITE: If you are going to see Kr. McCloy, I MR. WHITE: Compliment him on the speech he made on the Floor of the Senate. problem with him better than we can outside, and if you can get an understanding with him In your discussions-- C (Mr. Gamble reenters the conference and shows the H.M.JR: when you go back dictate a little memo and give it to Mrs. Klots. MR. WHITE: I'd do it before he speaks tonight. C Secretary the poster for the Seventh war Loan.) H.M.JR: who framed it? H.E.JR: I'll do it. MR. GAMBLE: we framed it. It's more likely to be put up in the White House if it is franed. Where does Surplus Property stand now? H.M.JK: Well, why don't I try to see if I can get Mr. PEHLE: The Executive Order is on the President's Mr. McCloy over here tomorrow morning? desk, isn't it, Charles? MR. C.S. BELL: It was since last night. We followed MR. WHITE: Fine, and give us a few minutes either later this afternoon or tomorrow morning. H.N.JRI what else? it up,and at five o'clock it was still in the basket. MR. PEHLE: The whole thing has gone much more smoothly than we hoped. MR. LUXFORD: Mr. Secretary, Wright Patman stopped us yesterday and asked whether or not you would be willing to see Fred Florence, who is President of the second biggest bank in Southwest Texas. H.M.JH: I want to say in front of the nine-thirty H.M.JR: Who? 0 C who are present that I have been delighted at what John Pehle has done. He has done better or as well as anybody else could have done. It's wholly up to him whether he wants to stay or not, but I hope he will come staff back to me, and 1 want to say it in front of the nine- 13 F-8 F-7 -1615 C C MR. C.S. BELL: Harry, they didn't get the press release out at the white House. It was difficult to do a whole lot with it. thirty group. MR. PEHLE: + an going to. Thank you, Mr. Secretary. I talked to Mr. wallace yesterday and he asked the to come MR. WHITE: AS long as it is going to be done sometime in the future-- over, and I said I wouldn't. I sent you a memo on that, but as far as that is concerned, I think the shift will S.M.JR: Would you people like to meet these three fellows and see what they look like? be made pretty well. MR. WHITE: Mr. Secretary, I don't believe the publicity is satisfactory. That's my own impression. 1 think It should be made clear in the papers that this was done at your request and initiation. There (Pfc. Gagnon, Pfc. Hayes, and P.M. 2/c Bradley enter the conference.) H.M.JR: I thought you people would like to meet the gentlemen around Treasury, good or bad, were some passing remarks. H.M.J.: AS we say up in Minnesota, "A 'yob' has been done. It mon't be done for . couple of days. and 1 think if we could start over and go right out this elevator, we could all go GOLD together. MR. PEHLE: On the whole it is pretty good 80 far, and they should improve the publicity. Go out that door and I will join you,and no will all go over and see the President. HR. C.S. BELL: Some of it is very good, this one c C (Pfc. Gagnon, Pfc. Hayes, and P.M. 2/c Bradley leave the conference.) in particular, (indicating clippings). H.M.JR Yes, but I think-- H.M.JH: Is this & public hearing of Truman's? MR. WHITE: Yes. MR. WHITE: before today, I didn't think the job was satisfactory. RS. KLOTE: Pepper, you mean. H.N.JH: In a sense It is much better to have nothing that you know of than to have them say-- H.M.JH: Oh, yes. MR. LUXFORD: They are likely to have & lot of guest Senators on it, too. Any Senator that wants to come in MR. PEHLE: The talk was that "allace got something, but there was very little talk that the Treasury is being and be a guest can do so. stripped. I S&W none of that, Harry. H.M.JH: Feltus, supposing you go up and take Mrs. Klotz with you and be up there at eleven o'clock. MR. WHITE: No, I didn't either. MR. PERLE: I think we were lucky, myself. MR. WHITE: Where do we see you next? H.M.JR: Lucky MR. PEHLE: I know the work that was done I did some myself. But, nevertheless, it could have gone wrong. O 0 PRECISION TRADE MARK MICROSTAT MICROFILM ROLL NO. F-0 20 17 ( H.M.JR: I'll meet you at Kayburn's office as near ten-thirty as I can. Mr. WHITE: They particularly want you to speak yourself. H.M.J.: You will have to have my speech. MR. WHITE: we'll have it. C 0 MICROFILM ROLL NO. April 30, 1945. by dear Natana Taboutor It was nont tital of you to write with se much faciliar - Leernian of the death of President 10 10, as you any, . transity for Ameries and for the verta, and Prs. Heagenthen and I also preciate your understanding of our personal loss. Thank you also for year word of - part for the program and principles which our great President complified. I have received the - of "Pear 1a Violatre* which you vers on reed no to send - and thank you for 11. 1 also appreciate what you said of - own service to the Addition tention. with removed approciation of your letter, Sincerely, (Signed) H. Morgentheu, Jr. Nedane Depenteve and Publisher, Pirostos Pour 1a Victoire, 535 First Avenue, New York 17. New Took. GEF/dbe PRECISION TRADE MARK MICROFILM MICROSTAT ROLL NO TOUS LEE SAMEDIA 10 CIT - 14.55 MOIS U.M pour la VICTOIRE A DIRECTEURS HE HOTHIER REDACTEUR IN CHEF MICHEL POSER) JOURNAL FRANÇAIS D'AMÉRIQUE 111 FIFTH AVENUE NEW YORK I PHONE MURRAY HILL 1.4208-59 April 17, 1945 The Honorable Heary Morgenthan, Jr. Secretary of the Treasury Washington, D. C. Dear Mr. Morgentham, I tried to et in touch with you and Mrs. Korgenthau since the death of President Roosevelt because knew how inmengurable is your sorrow and I syself WILE in such destair that I felt that my only possibility of consolation and hope for the future could come from seeing you who have been one of the great builders of the Roosevelt New Deal for America and for the world. These few words are to tell you how deeply I have been thicking of you and Mrs. Morgenthea; and aleo that, although I feel great despair. consider is my duty and the duty toward IV life-lone work to continue more than ever before to defend and support the wonderful world policy of the President both here in my paper *Pour la Victaire* and in the two Paris papers, "A"Aurore" and ****** et Jour of which I have been foreign correspondent since the liberation of France, A my of hope came to me this morning when I san is the Times that it RISE belie ed you would accept to continue working for all of us throughout the world, as you have been doing. I an coing to pray that this is 80. Please convey to Mrs. Morgenthan my kindest thoughts and believe THE to be, dear Mr. Margenthan, Faithfully, Seventure Towns Genevieve Taboula Director and Publisher RECISION TRADE MARK MICROSTATE MICROFILM ROLL NO. April 20, 1945. ity dear Certain Pulestens Thank you for your vare expression of sympality in the death of President leasevall. I accrediate your apasida with se reach understanding of - our close association 14th his during these difficult var years. It has intend been an instrume parted on which to look beat. 1 approciate year having written no. and your expression of symptom Sincerely, (Digital H. Morgenthau, in Captain v. D. Puleeton, U.S.N. (ins.). 3634 Telmont lead, S.V., Weshington a. 7. 0. GEF/dbe PRECISION TRADE MICROSTAT MICROFILM MARK ROLL NO. 25 April 20. 1945. CAPT w D PULESTON U.S.N.(Ret.) 2434 RELMONT ROAD N.W. WASHINGTON . . . . . . . C 17 April, 1945 Dear Mr. Northens Thank yes for year letter of personal Dear Mr. Morganthaus My year in the Treasury Department sympathy in the death of the President, and revealed to as your deep devotion and loyalty to our late President and Commander-in-Chief I know better than sost for sending . any of your son's letter. I can what personal less his death is to you. In the depth well this your pride is his service to the fact that your of found your satisfaction grief, you loyal pleasure services and helped his country. His expression of devotion to the can recall with sombre pro- his to carry the incense burdens of his great office, especially in 1939 and 1940, when you assisted his in that most difficult of undertaking, giving prompt assistance to Great Britain, netery of President lessevelt is infeed . fine one. Sincerely, w Sincerely, Duleston (Signed) H. Morgenthau, Jr. The Honorable Henry Morgenthan, Jr., Department of the Treasury, Fifteenth Street and Pennsylvania Avenue, Washington, D.C. Mr. Jost 3. 33-16 157th Street, Finahing, Lone Island, New Teste. GEF/dbe PRECISION TRADE MARK MICROSTAT MICROFILM ROLL NO. 33.16 1577 STREET 26 FLUSHING LONG ISLAND 0 my Dear Im morganthaw when you are your dear, dear friend mrs. Roosevier, I though San as a copy of the letter from our added may bring a tiny my of comfort at 17 he volunteered out of Harvard university to join the army an air Force and was Radio Operator a search mission for a lost plane a on the attantic accase when cut in announced the President's passing Mrs. Hartman and I send our deepeat sympathy to you and yours in your great personal loss sincerely, gost J. Hartman april in 1945 0 Dear Dad, 36 I'm sorry I miss^ed you at Easie's today - I wanted very much to speak to you. The President' death brought to an and the career April 20, 1945. nan, the like of which we'll probably never see in this generation or century again. As I hear and see all the tributes being paid him. I just wonder whether the American people are as willing to do justice to a man's work as they claim they are. The irony of having to die to be appreeisted will never be fittingly explained to no. a of Dear Mr. Leffingvell: During the last campaign I thought many times about then that Sunday in 1941 when the Jape hit us. Iwondered if the American people would remember how they felt on that I know 1 thanked God that at least one man had had1944 day. the foresight to prepare us 0.0 much as he had. When came - people forgot and not until now na he lay dead. was his real greatness realized and extelled. Thank you very much for your letter of April 18. What you said of the President's death is indeed true. The loss is a terrific one to the country, and those of us who vere personally acquainted with him experienced . shattering blow. It is good of you to say what you do of my own work as Secretary, and to express such confidence in the I only hope and pray that in these past few days the supplications of nation and a world were board over that "last barrier and he at last could hear our thanks and know the real, the deeper feeling we all had for him. The wonderful things that he did for us as a nation and therefore 3 both approach the subject on which you disagree is a frank and objective manner. indirectly the entire world, can never be forgotten. We're fighting now for the things he worked for most - peace and security No man in the service of his country has given more than Franklin Roosevelt his life was the last contribution he could possibly have given. We must now prove to him and our cons ciences that we are worthy - worthy to have had such a man as be work for our futures. I've grown up under the tutelage of the times certainly his enlightened policies have had their effect on no and will in the future do much to mold my thoughts Needless to say countless others of the young people today will be influenced in the name way. future. I also appreciate your connent on the interview with Harry D. White, and I an glad you felt that you could Ve have been very wash concerned by Mrs. Morgenthem's illness, but I as glad to say that she has improved considerably is the last day or two. I feel that she is in TOTT good hands, but of course as anxious for her to to reach the point where she may return home for her con- valescence. with thanks again for your letter, and certified personal regards, Sincerely, (Signed) H. Morgenthaw Jr. Let's hope we are worthy of his faith in US. Love, Arthur 4 45 Mr. R. c. Leffingvell, 33 Wall Street, New York 8, New York. MICROFILM MICROSTATI 2. the reception for the opening of the Seventh War Loan effort, of Mrs. Morgenthau's illness; 23 # Vere York 8 April 18, 1945 LEFFINGWELL Dear Mr. Secretary: President Hoosevelt's death has been a great shock to all of un. His loss is irreparable. I felt his death deeply myself. I had known him . long time and had not only high admiration but sincere affection for him. I know what his death must cean to you his close friend and 1 send you my heartfelt sympathy. I have been greatly relieved and greatly relieved to hear from Assistant Secretary White that she is better. I did enjoy our talk with Mr. White very such. He is persuasive and interesting, and his knowledge and understanding of the problem are profound I wish I could any I agree with him. Though I cannot say that, I was much impressed by him comprehension of the problem and by him full and frank discussion of it. with very high regard, I am. my dear Mr. Secretary Oto read is the papers that you are to continue as Secretary of the Treasury. Your administration has been very successful. You have carried the appalling load of war finance manfully and well. The job is being well done. I was distressed to hear, at 1 Faithfully yours The Honorable The Secretary of the Treasury Washington, D. C. OFFICE OF THE POSTMASTER ROCHESTER 3. NEW YORK : Apr. 18 DONALD DAILEY 19 45 April so, 1945. Non. Henry Morgenthau, Jr., Secretary of the Treasury Dear in Tailey Washington, D. C. 16 use more of you to vette - as you ity dear Mr. Secretary ass I know how keenly you must feel over of of association which 1 years. the passing of President Roosevelt as one - cause - of April have the less and 10, online enjoyed in extending expressing the death during the your of close your the President grantly past own great be This are, as yes any, - . terrific personal who has been so closely associated with Mev. and 11 is as even more timele less to the country. Your word of companity to roch him during the past several years as you appreciated. have. His death must fill your heart with Sincerely, 0 sorrow and I sympathise with you. I feel it has been . privilege for me (Signed) H. Morgenthau, Jr. to have known the President as long as I had and to know I was one of the great No. Result A. Dailey, Feetmenter, army of citizens in this country whom he Jochecter 3. Yes Toot. considered a friend. We will all miss his . lot. It is too bad he couldn't have lived . few more years to ... the fruits of his labors. Sincerely yours, GEF/Abe DAD,LAR 0 tonce eather Donald A. Dailey PRECISION MICROSTAT TRADE MARK NO. U.S.PAT. OR MICROFILM ROLL NO April 20, 1945 April 20, 1945 To All Radio Advertisers, Advertising Agencies, Radio Networks and Radio Stations: In the Seventh War Loan we will need your cooperation more than over before with . 7 billion dollar quote for individuals, 4 billions in Series E bonie alone, the Treasury 1. undertaking the greatest financing operation in history. The next few months will be cruelal to the whole American var effort. The good news from Europe may breed denrerous overconfidence in our people and encourage . spirit of let-down and relaxation. Such a reaction would imperil such that has been accomplished in the past, and leave us in no position to deal with the tremendous problems of the present and the future. It is vitally important, therefore, that the Seventh War Loan be given all possible support. It is the cost significant way in which Americans on the homefront can express their determination to ann the war through to ultimate victory. The generosity of advertisers, their sgenoies and broadcasters in allocating redio advertising time to previous var loan drives encourages us to hope that you will go all-out for a Hightier 7th Sincerely, To All Radio Advertisers, Advertising Agencies, Radie Networks ant Radio Stations: in the !eventh Ver Loan ve will need your cooperation more than ever before with . 7 billion dollar quote for individuals, 4 billions in Series Lense alone, the Treasury 1. undertaking the greatest financing operation in history. The next few months will be cruels1 to the hole American var effort. The good news from Europe say breed dangereus overconfidence in our people and annourage . spirit of let-down and relaxation. such . reaction would importion such that has been economiched in the past, and leave us in no position to deal with the tremenious problems of the present and the future. It is vitally important, therefore, that the Seventh Yet Loan be iven all cossible support. It is the cost significant way in which Americans on the homefront can PROFESS their determination to see the war through to ultimate victory. The generosity of advertisers, their agencies and brondenators in ellecting relio advertising time to previous war loan drives encourages us to hope that you will o all-out for a Mightier 7th! Sincerely, /=/ Heary Morgenthis, Jr. /n/ Henry Morgenthan, Jr. Typed 4/19/45 Hingering Typed 4/19/45 Illiagering TRADE MARK MICROFILM MICROSTAT 25 April 20, 1945. Dear Mr. hayders vest the It vas with reach pleasure that I learned of your amountment - Federal Loan Administrator 1 PRECISION President's and to shall our I association home to choice to congretulate see as for you you this soon Bake yes important and upon - look the being duties office. forward of the post. If there is any way is which my office - be of service to you, I hope you will not hesitate to call - us. with certial regards and best vishes, Sincerely, (Signed) Honorable John W. Synder. Federal Loan Administrator, Washington, 3.0. : GEF/dbe H. ROLL NO PRECISION TRADE MARK MICROFILM MICROSTAT The New York Times. APR 20 1945 FEDERAL LOAN HEAD SNYDER APPOINTED LOAN AGENCY HEAD Truman Names an Old Friend St. Louis Banker-Nominee Praised by Jesse Jones By LEWS WOOD President of W. First as Bayder National Federal Mine C PRECISION TRADE MARK MICROFILM MICROSTATA ROLL NO LEGATION OF THE 25 UNITED STATES OF AMERICA Cairo, Egypt, April 3, 1945 APR 2 0 1945 AIR MAIL My dear Mr. Minister: PERSONAL I an writing in response to your letter of April 3, 1945, concerning your proposed purchase of a house near Geneva, Switzerland. Representatives in New York of Foreign Funds Control have consulted with Mr. Alexis Coudart concerning the matter, and I an happy to inform you that the necessary Treasury license was issued to Coudert Brothers on April 19, 1945. Many thanks for your kind wishes, and may I extend my regards to you and Mrs. Tuck. Sincerely yours, Dear Mr. Secretary: I an writing in the hope that you will be kind enough to assist my wife and myself in connection with matter which is of great personal interest to us a both. We are at present negotiating for the purchase of a house near Geneva, Switzerland and the matter is in the hands of my wife's lawyer who is Alexis Coudert, 2 Rector Street, New York City, The house in question is the property of a certain Baron Emeric de Pflugl, a former well known Austrian diplomat who was for years associated with the later, after the of signed Nations from and hisservice who Anschluss, League country's and became a re- naturalized Swiss citizen. He now resides in America with his wife who is American born. Baron de Pflugl, for reasons which Mr. Coudert can explain. desires . partial payment for the property to be made in Swiss francs it us to for a the fore necessary for apply and license is fromwill there. Treasury for that purpose. Mr. Coudert (Signed H. Morgenthau, Ja. Secretary of the Treasury Henorable S. Pinkney Tuck, The American Minister, Cairo, Egypt. shortly apply for license. in he has not already done so by the time this letter reaches you. He will explain at the same time why a payment in Swiss francs is necessary and can also furnish the Treasury with pertinent details it may require with regard to theany proposed transaction. We would be most grateful If you would give favorable consideration to our application for a Treasury license as the acquisition of the Geneva property The Honorable Henry Morgenthau, Jr., Secretary of Treasury, Washington, D. c. CPSeits:mbw 4-19-45 CISION TRADE MARK MICROSTAT REG U.S.PAT.OR MICROFILM BOLL NO 12" AIR MAIL -2- property means a great deal to us both. I had spent many happy years there when my father was still alive and Katherine, whose father was . Swiss citizen, is as anxious as I an to have . home in Switzerland after my retirement from the Service. We so often look back on those peaceful days of 1938 spent at Antibes when we came to know you and your family. I hope that all goes well with your sons. My older boy is a Corporal in the Marines. we were fortunate to have been able to leave Germany a year ago after a long period of internment and we are now greatly enjoying our stay in Egypt. I may have told you that my father lived in this country for twenty-six years when be was the American representative in the Mixed Courts. Please convey our kindest regards to Mrs. Morgenthau. Anything that you feel you can do to help us in connection with our application for a Treasury license would be deeply appreciated. Yours sincerely in mm 3. Pinkney FORM American Minister, Cairo, Egypt. luck PRECISION MICROFILM TRADE MARK ROLL NO 41 TREASURY DEPARTMENT -2- INTER OFFICE COMMUNICATION DATE April 20,1945 TO FROM Secretary Morgenthau (For information) Mr. Coe FC Subject: China In connection with discussions which you may have with Dr T. V Soong, you may be interested in the following sunmary of Treasury recent experience Chinesa Government The record clearly dicates that the Chinese Government not only tries to get as much 8.8 possible from us whether Justifiable or not, but continue to misuse the financial assistance which has been given. Moreover there is considerable evidence that top officials of the Chinese Government have enriched themselves from funds granted to China under the 8500 million financial aid agreement. Gold sales in China. The matter in which the Chinese h ve shown the greatest interest and concern in their dealings with the Treasury in recent months is the export of as mu told as possible to China. They would like to withdraw $180 million of the $240 $500 million million which remains on the books the Treasury under financial aid agreesent toofcurchase gold to the be exported for sale to China in addition to the million of gold which has already been purchased end exported. This gold is being sold inexcusably low prices to speculators and hoarders. Koreover it has provided the Government with an easy way to avoid taking effective measures to retard inflation Instead, the Government sells precious national assets which could be put to excellent use in the post-ver reconstruction of China. U. S. Army expenditures in China. The U. S. Army pays its own way - and at exorbitant prices - for everything it obtains in China except food and lodging of U S. troops Nevertheless the Chinese not only make UB ray heavy taxes but so repeatedly try to get us to pay for things which are solely for their benefit or for which they have promised to Day. In the current negotiations for the settlement of Army in China during the last quarter of 1944 the Chinese figure of the amount of S. Army excenditures for which the Chinese ought to be resburned is about 33 percent more than the U. S. Army figure. The Chinese follow the practice of padding the bill, terms although of we have always been most generous to them. Thus in prices in the United States, the approximately $375 million which has already been paid to the Chinese Government for Army expenditu services. in China obtained no more can than $175 condifference The be and sidered million of an goods American contribution to China in compensation for the burden placed on the Chinese economy by the presence and activities of American troops. Sale by Chinese Government of $200 million of U. S. dollar lavings certificates nd bonds. One of the useg which the Chinese have made of the funds under the $500 million financial aid agreement was advenced of $100 million of U. S. dollar savings certificates the issue of U. S dollar bonds The certificates and and $100 million much lower rates than prevailed in the black bonds sold at certificates andtobonds ob-of market were and the purchasers of these one-fifth tained U. S. do llare at anywhere from one-half these certi- what they should have paid for then. At present their ficates and bonds can be sold for more than 15 times original purchase price. Under the guis of an anti-inflationary reasure the Government has permitted hoarders, apeculators "militaristsFor andexample "insiders' to reap illicit fortunes in foreign from the information available to us, exchange Is little doubt that persons and organizations intizately there with Dr T.V. Soong and Dr. Kung have purconnected millions of dollars of these certificates and bonds. chased the notorious underworld gangster leader, has Tu Yueh-seng, purchasers while DF. Wei Tao-ming, been among Ambasa the largest United hasWe purchased present dorStates, to the havemore done than $100,000 of these U. 3. dollar securities best to control the use of the proceeds of these secuour rities through the Treasury's Foreign Funds Control administration. Expenditure of $60 million on bank notes. Chinese are now requesting that we permit the with- The million of the $240 million which still remaine drawn of $60 Treasury under the $500 million financial on the books of the for the anufacture of bank notes. aid agreement to be used from the Chinese, these bank According toreceived information useless are in small denominations which are practically distin- notes in the present inflationary situe tion. They are only portrait shed by the fact that they will have on them the Generalissizo instead of the traditional portrait of Dr. the Sun Yet-sen. The Chinese, of course, have other funds ith of which to pay for the manufacture of such bank notes. -4C Chinese hold up tin exports to United States China has been providing the United States with tin, a such needed strategic commodity. At the request of the Chinere, the Treasury has allowed payment for the tin to be made in gold. The Chinese, however, have argued that this gold must be sent to China in order to maintain tin production and tin exports to the United States have been allowed to decline. Nevertheless, the Bank of China admits that it has in China stockpiles of tin which it is keeping as collateral against an intra-governmental loan made to the Chinese tin procurement agency, the National Resources Commission. Thus, the Chinese could be exporting more tin to the United States if they 80 desired. Requested $16 million Export-Import Bank loan. The Export-Import Bank has been requested to grant a $16 Government million loan has to anearly private Chinese cal firm. The Chinese deposits of billion chez securities, and credit ts on the books of the Treasury which could be used to finance incorts from the United States of the kind for which an Export-Import Bank loan is being requested. Moreover, it is admitted that the roceeds of the Export-Import Bank loan could hardly be used until after the war. Nevertheless the Chinese Government does all possible to encourage the Export-Inport Bank to grant immediately this $16 million credit. $75 million lend-lease trucking project. Arrangements are now being carried through for the lendleasing of a large number of trucks to China. Koreover, the lend-lease funds will be used to pay the salarics of American personnel who will train Chinese personnel to take over the driving and maintenance of the trucks. The cost of this project is about $75 million. In addition, the Chinese attempted to get the United States to pay U. S. dollars for the Chinese national currency which will be needed to pay the salarie a of Chinese employed in driving these Chinese trucks and to construct and maintain garages and repair shops for these Chinese trucks. These local currency needs which the Chinese can meet merely by printing more bank notes might have cost us up to $20 or $30 million. The Chinese undertook to meet these local currency needs only after we took a firm position against providing U. S. dollars for such purposes. S. Government I $1 Import of textiles into China. The Chinese have asked the Treasury to support its request for large scale imports of textiles, arguing that they have will be used for anti-inflationary purposes The Chinese been told repeatedly of the very tight position of textiles in the United States. Moreover, they know the urgent need to conserve transport facilities into China, whether over the "hump" or on the newly opened Burna road. It is afe to say that, 08 in the case of gold sales, the anti-inflationary effects of the sale of such textiles would be very small if Moreover, the Chinese Government has done very little, anything, to encourage domestic textile production. Thus, while one-third of the cotton spindles in Free China have corcensed operations because of a shortage of rew cotton resulting from erroneous government policy End inefficient and rupt administration large amounts of raw cotton are being saugi led out of Free Chine into occupied China, Fur thermore, large quantities of cotton textiles in Free China are being hoarded, while the Government fails to take effective antihoarding measures. $ PRECISION TRADE MARK MICROFILM MICROSTAT ROLL NO. -2- TREASURY DEPARTMENT INTER OFFICE COMMUNICATION C the know" at that time. In place of this, Mr. Smith's people DATE April 20, 1945 TO Secretary Morgenthau FROM Charles S. Bell were sent out 8.3 though on an "under-cover" job. Mr. Scott of Budget called our Mr. Parsons in Procurement to inquire of him what he knew of the matter, and the Department's Budget RE: HAROLD SMITH AND THE SURPLUS PROPERTY TRANSFER Mr. Smith's participation in this transaction is an excellent illustration of why the Budget has gone down in the estimation of certain members of Congress and high Government officials. As per your instructions, after making the early negotiaC tions with the agency heads primarily concerned with this transfer, I called Director Smith in the afternoon on Tuesday, April 17, and failing to reach him, left a very complete story with his secretary and a request that he call me for further details. (At this time it was indefinite that the entire Procurement Division would go over to Commerce or remain in Treasury, and the whole matter was being handled along very confidential lines.) Not only did Mr. Smith himself fail to call me, but what is more, no member of the Budget staff made any effort to keep abreast of the deal or get accurate information from me or John Pehle, the only two nen in Treasury actually "in Officer, Schoeneman, was approached by Mr. Broadbent of Budget along similar lines. They made no effort to contact this office. I learned later from Mr. Gladieux, Secretary Wallace's assistant, that Mr. Smith talked with Secretary sallace and urged him not to go through with the transfer. I strongly suspect that Mr. Smith's objections came, for the most part, from the fact that he has other ideas as to the location of the Procurement Division proper and had been given to understand that the Procurement Division would move with Surplus Property. 15 RECISION MARK MICROFILM MICROSTAT APR 20 1945 Dear Mr. Minister: 1 wish to thank you for your letter of April 3rd and for the personal message and regards you were kind enough to send through Mr. Adler. AR you know. the cause of Sino-Aserican friendship has ever been clone to my heart, and I as happy to find myself in full agreement with you on the need for maintaining close financial and economic cooperation and for strengthening the traditional ties bethat ve shall continue to do all ve can to tween our two countries. Please rest assured attain both these objectives. Sincerely yours. (Signed) H Morgentnau, 28. Honorable O. K. Yui, Minister of Finance, Chungking, China. SA/efa 4/18/45 April 3rd, 1945. Ky dear Er. Normathan, I nvail my/elf of the opportunity of Mr. Adder's return to Washington to extend to you my greetings and deep approoistion of the conperation that you hive kindly given us. AS total Allied victory in drawing near, our task has even proved to be more difficult and the need for closer collaboretion betteen the United States and Chinn has become more urgent than ever. It in - sincere with $ that the traditional friendship between our countries be further solidified through closer coononic cooperation and I trust - ann rely on your good officer toward its attainment. Yours sincerely, O. K. Yui Kinister of Finance Honorable Henry Korgantheu, Jr., Secretary of the Treasury. United States Government, C Washington, D.C. -2- 18 TREASURY DEPARTMENT o OFFICE COMMUNICATION the ever gave any Important information to Allied intelligence or disclosed her relations with the Germans. DATE April 20. 1945 TO FROM 5) Her recent claims that she participated in the Secretary Morgentian Banque Charles to save Mr. Could from deportation is in direct variance with the explanation which she gave to the Freak Coe and Orvis A. Schmidt O.S.S. in October 1944 to the effect that her only interest FOR YOUR INFORMATION in the Banque was to create 4 refuge for American money during the WAP. As you know in January we designated Florance Could a Special Blocked National on the basis of her participation, with certain Corman and French interests, in the establishment of the Dangue Charles for the purpose of cloaking collaborationist and Gerean assets. F.C. We thought you would be interested in the following secret incelligence information concer ing Mrs. Could which was recently received from our Encounty at Paris, and which confirms our suspicions of Mrs. Gould's colleboration with the Hazis: C 1) Her participation in the Banque Charles was an outgrowth of her any close and confessed relations during the occupation with notorious French collaborators and with Gereans (including the Gestapo), of whose official connections she was fully suare. 2) There is evidence that the Germans regended her as an informer to the Gestapo. 3) Ludwig Vogel, engineer of the Fooke=hulf Aircraft Company, now held as a prisoner in Paris, took Florence Could to Germany on several occasions under in false name and with- out identification papers. She WILL permitted to visit an airopnit factory at Friedrichshn.em. 4) Mrs. could claims that she had social relations with Germans in order to obtain their protection Agginst being sent to a concentration crup because of her services to Allied Intelligence. According to her 01921 admission, however, she was not in contnot with Allied Intelligence services until December 1943, where most of her relations with the German began before that date. Koreover, there is no evidence that 0 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATEAPT. 20, 1945 Secretary Morgenthau TO Mr. White FROM My wife informs me: The Bible (Job 31:35) contains this statement: "Oh, that I had one to hear co. Lo, here 18 my signature. Let the Almighty answer me. And that I had that indictment which mine adversary hath written." A footnote in our version of the Bible refers to the fact that the word "indictment" probably means "book". Mrs. White believes that the interpretation of the above phrase 16 something like the follow$ ing: People know 1 (Job) have been righteous and 1f my enemies who are claiming the contrary had written a book containing their unfair criticisms I (Job) could display that book and their unfair criticisms so that the people would know how unjust those criticisms were -- or something like that. I believe that must have been the phrase to which the President referred. Though it doesn't seem to fit well, I suspect it's what the President had in mind. PRECISION TRADE MARK MICROSTATE MICROFILM BOLL NO. TREASURY DEPARTMENT 52 INTER OFFICE COMMUNICATION 0 DATE April 20. 1945 TO Secretary Morgenthau FROM 3. 3. Tuesell Subject: Prega sminars Recently the Foreign Funds Centrol people held a half-hour press 51 TO: conference dealing with a press release which had been put out for use Mys. Klots the following day. The discussion was nearly all unbackground material rather than as spot neve, but is attructed a number of correspondents This BABO does NOT require any immediate attention. who do not normally visit the Treasury and held their attention. Novemer, 11 might interest the Secretary at some early This led no to believe that there is a field for seminar type con- date, when be eight have time hands, either while on hisorFlorida. flying. is forevose, oz subjects which of current interest, or approaching the news Now would it be to put 11 as "any time* a material. in his package or how do you handle stage, but 520 not yet ready for spot nows treatment. I nanvassed several Treasury people, including White, Masa and Lynch, things of this natural 34 fussell and also . few reporters, and found then enthusiastic for the idea. I also found some Treasury people, outside of those donling with such sub- jeets, also said they would appreciate as opportunity to hear background explanations of such subjects as Bretton Woods, taxes, etc. Mass said his shop would be able to put on immediately a discussion of Government borrowing -- substantially the sune alida illustrated Mr. Fussell lecture baine given Seventh Nar Lean groups - subject to Ted Camble's approval. White said he believal sane discussions of taxes and of the postsur European economic situation could be arranged - the latter probably broken down into a number of discussions. 0 -2- 53 0 Max Mall of AP (incidentally the sartest of the reporters covering the Treasury) was anthusiastic over the idea and suggested such subjects, rather more complex and less immediately nowsworthy, as a detailed explanation of the Daily Statement, methods by which public debt was calou lated, etc. I think the advantages to the Treasury would be two: 1. Botter press relations. 2. Better informed reporters and consequently better reporting. : do not imagine that all the reporters would actually be as keen about the idea as Hall, sto is out to got himself all the education he can, whereever he is working. That they would be stirred, by competition, to pay note attention, and whatever they learned would be all to the good. 0 The conferences would have to be planned aurefully, to svoid impinging upon spot news fields. It would be my idea to make them all background asfaire, 1ecture-discussiome followed by a question and answer period. It would probably follow that some questions on policy matters, relating to the subject discussed in the seminar, would greet you at the next press conference, but you would be ready for it and the broadening of the field of questions at your press conference would also be sivantageous, it seens to no. Now as to how the subject night be brouched: I suggest that at your next press conference you night say that the idea of sesinars, on newsworthy subjects, or subjects that will soon be in the nows, has been suggested to you, and that you would like to see what the re0 porters think about it. If there 10 a favorable response from those present you night suggest that they contact no with their suggestions as to subjects they would like covered. Then ** could put one of the seminars on almost 54 -2- 53 O 0 San Hall of AP (incidentally the soartest of the reporters covering immediately (Friday at 11 a.m. probably will be the best time) and judge the Treasury) was enthusiantic over the idea and suggested such subjects, from the result whether it is worth continuing. rather more complex and less immediately nowsworthy, as . detailed ex= planation of the Daily Statement, methods by which public debt was caleulated, etc. I think the advantages to the Treasury would be two: 1. Totter press relations. 2. Better informed reporters and consequently better reporting. I do not imagine that all the reporters would actually be as keen about the idea as Mall, who is out to get himself all the education he can, whereever he is working. But they would be stirred, by competition, to 747 2016 attention. and whatever they learned would be all to the good. 0 The conferences would have to be planned arefully, to avoid impinging upon spot news fields. It would be my idec to make then all background of fairs, lacture-discussions followed by = question and unswer period. It would probably follow that some questions on policy matters, relating to the subject discussed in the seminar, would greet you at the next press conference, but you would be ready for it and the broadening of the field of questions at your press conference would also be advantageous, it a to no. Now as to how the subject night be brouched: I suggest that at your next press conference you night say that the idea of seximars, on newsworthy subjects, or subjects that will soon be in the news, has been suggested to you, and that you would like to 000 what the re() porters think about it. If there is . favorable response from those present you night suggest that they contact no with their suggestions as to subjects they would like covered. Then we could put one of the seminars on almost -3- Q enfores to THE WHITE HOUSE WASHINGTON 4/01/95. April 20, 1945. MEMORANDOM FOR THE SECRETARY OF THE TREASURY: After consultation with the President's Secretary in charge of press rela- tions, it in felt that the President should not at this time appear in news reels to advocate the Bretton Woods proposal or any other single or individuel legislative proposal, especially when such proposal 18 before the Congress for action. We do wish to be helpful. We know you are familiar with the statement the President made attohis press conferthefirst Bretton Woods It 18 a ence proposals. with regard suggested that if silent motion picture of the President 1. at his this made a part of your proposed film and you would use the sense of the President's be question statements might press solved. conference An off-stage voice could be used for sound when the President's picture 1e on the screen, and in this way it would be possible for you to include the President's endorsement as part of the motion picture Paramount is to produce for you. MATTHEW J. CONNELLY Secretary to the President. 57 4/20/45 Secretary's statement before Senator Pepper's Committee on Small business. Subject: bretton Woods. UNDER SECRETARY OF THE TREASURY WASHINGTON 58 April 20. 1945 Statement of Secretary Morgenthau TOP SECRET Prosperity for this country 18 essentially a problem TO THE SECRETARY: I just received a report through the War Department of an inventory of the currency and gold discovered in the salt mine at Merkers, There was a small amount of Norwegian kroner, French france, Belgian france, lire, kuna (Croat) and koruny (Czech). There were also 2,760,000,00 reichmarks. There are about .000 bage (at about 81 pounde per bag) of gold coin and 4,100 bage (at 55 pounde per bag) of gold bullion. Considering the gold coin on a straight bullion basis, the total value is about 8196 million. of finding markets to match the miraculous producing power of our factories and farms. We can keep our people gainfully employed at high wages If we can find buyers for the food and fibers, for the cars and refrigerators, that we can produce. Our primary dependence must always be on the home sur market. We have in this country the greatest concentration of consuming power in all the world. The 135 million American people buy most of the world's production of automobiles, refrigerators, and radios. These are the goods typical of American production. These are the goods that are symbolic of the high American standard of living. But we must not overlook the importance of foreign TOP SECRET markets. During the 1920's, one-tenth of our agricultural and industrial output was sold abroad. Our exports declined drastically from 1929 to 1932. And even after recovery had gone quite far, our exports in 1938 were only half what they had been ten years earlier. Our exports may seen to be only a small part of our -3- -2- apples, 11 percent of our wheat, 11 percent of our lard, total production. They are, nevertheless, vital. They and 11 percent of our hope. mean a good deal in factory payrolls and farm income. It is clear enough what these exports of industrial They mean the difference between prosperity and depres- and farm products mean to business and labor and to sion for both agriculture and industry. agriculture throughout the country. When we think in terms of particular industries and Your interest in an expansion of foreign trade for of particular farm products we can see what foreign markets small business coincides with one of the principal objec- really mean to business, to labor, and to agriculture. tives of the program drawn up at the Bratton Woods Con- I cite examples from only a few industries. In 1938, ference last summer, and now pending before this Congress. our exports accounted for 27 percent of our production of All of the 44 nations participating in that con- aircraft and parts, 22 percent of our office machinery and ference recognized that a large volume of foreign trade appliances, 18 percent of our printing and book-binding 18 essential to the realization of the United Nations' machinery, 17 percent of our farm machinery and appliances, hopes for a prosperous and peaceful world. We in this 15 percent of our pharmaceuticals, 14 percent of our in- country have a special stake in this program since we, dustrial machinery, 14 percent of our automobiles and more than most countries, must carry on a large volume trucks, 12 percent of our radio equipment, and 11 percent of trade abroad in order to assure full utilization of of our refined oil products. our manpower and productive facilities at home. It is no less true that export markets are essential In order to achieve these overall objectives--in- to our agriculture. In 1938, our exports accounted for creased world trade and capacity production at home--we 30 percent of our production of tobacco, 28 percent of 0 our cotton, 19 percent of our rice, 13 percent of our 0 must set in motion the machinery to restore to the devastated countries their producing and consuming -5- -4- C ness firms should be able to sell abroad as well as at power and to further the development of greater production home, particularly If some of the uncertainties can be and greater consumption in the more backward areas of the removed from international currency transactions. world, inhabited by perhaps half the world's population. But let me repeat, the best market for all types of We must provide an environment of stable and orderly ex- small business has always been, and will continue to be, change practices--free from the currency warfare and the our own domestic market. In a prosperous America, every restrictions of the 1930's--in which international trade year should witness a new crop of promising small entre- can flourish. preneurs, and those already established should have ample In considering the significance of foreign trade to opportunity to expand. small business, it will be helpful to divide the subject C I will not attempt to go into the details and into two broad segments. mechanics of the Bretton Woods proposals at this time. There are industries that will participate only in- These Agreements are now being considered by the House directly in an expension of foreign trade. In this group Committee and will soon be considered by the Senate are the majority of the service industries, such as Committee on Banking and Currency. The important thing laundries, dry cleaners, garages, repair shops, hotels, for UE to consider at this time is the significance of and retail outlets of every description. Their well- the Bretton Woods proposals to American foreign trade being is linked to foreign trade to the extent that an in general and to small business in particular. expanding foreign trade is indispensable to an expand- The Bretton Woods proposals, by stabilizing rates ing American economy. of exchange, by maintaining freedom in exchange trans- Then, there are industries engaged in manufacturing, transportation and commerce where small business can share directly in the increased trade. Our small busi- I actions, by preventing competitive depreciation of foreign currencies, and encouraging the revival of TRADE MARK MICROSTATI MICROFILM ROLL E4 -7- 68 of currencies in terms of one another were subject to con- C stant yet unpredictable change. Unless the trader had the private international investment, will go a long way-- means and the ability to hedge, his normal business profits indeed, farther than we have ever gone before--toward might be wiped out overnight by fluctuations in exchange creating an environment in which small business will not rates. only prosper, but will help to preserve our democratic The Bretton Woods proposals, when adopted, will pro- institutions. vide all of the essential elements of stability. They In the past, small business has not played 8 will require all countries to define their currencies in prominent role in this country's foreign trade, and that for two principal reasons. First, the small businessman has not been conscious of the importance of finding terms of gold, and to maintain their exchange values stable within one percent of that parity. They will 0 also hasten the removal of all artifical barriers markets abroad. The cost of maintaining a sales force 1 against the making of payments across international for the export market has been too burdensome for the boundary lines, and encourage a revival and an expansion small business man. It 18 necessary to find better and of private international investment for reconstruction more economical ways of selling abroad the products of and development purposes. small business. once stability of exchange rates is achieved, The small businessman has always been confronted American investments abroad will have as their counter- with the discouraging complexities of fluctuating ex- part an immediate and direct foreign demand for change rates. He does not as a rule understand the American goods. Many of these demands, could be filled workings of the foreign market, nor is he able to employ specialists who do. In general, a successful foreign trader has had to be something of a dealer in foreign O currencies. This has been necessary because the values by little business--indeed, must be, if a big increase 1 in business is to come our way. -8- C -9- As I have said, inadequate marketing facilities of course, this doesn't mean that small business 18 have been one factor in reducing the small businessmen's entirely out of the export market. Some firms have share in our foreign trade. A large corporation pro- foreign customers who buy directly from them. Export ducing automobiles or electrical equipment has an export houses in this country are on the look-out for department in this country; it has sales agents abroad; specialties they can sell abroad. And in some cases, and it may have a financial department equipped to handle a group of small business firms cooperate in forming credit and exchange problems. Such a corporation 18 con- an export company to handle jointly their various scious of the fact that the sale of $20 million or $100 products. This practice, in my opinion, should be million of its output to foreign buyers means the difC encouraged. ference between profits and losses in its annual state- But the fact remains that small business does not ment of earnings. And it is willing to spend the money export enough. Partly this is because our aggregate to get these sales. foreign trade has been so small. And very largely it The small businessman is not in so fortunate posi- is because present export marketing facilities are not tion. Perhaps he could sell $100,000 worth of his suited to the needs of small business. This is a products abroad. But he can't afford to set up an export problem to which your committee will want to give department. He couldn't possibly keep agents abroad to serious consideration. look for foreign orders. He hasn't the facilities for While 1 have been primarily concerned in this dis- granting credit to the customers that come to him. And cussion with the question of export markets, I want to he can't overcome the handicap of restrictions and make clear my view that our imports are an equally fluctuations of foreign currencies. 0 important part of the foreign trade problem. Imports PRECISION MICROSTAT MICROFILM ROLL NO. 11 10 The Bretton Woods program will provide the necessary are necessary to provide raw materials for our industries, setting for 8 large expansion in our foreign trade. fertilizers for our farms, consumer goods for the public. Small business should share in these new foreign markets. Without imports, production would be handicapped and our Your committee will want to explore ways of bringing standard of living would be lowered. small producers and foreign buyers together. We must not forget that imports are part of the business of being paid for our exports. when countries stop buying our exports, it is because they haven't enough dollar exchange. When we import from them, they get the means to pay for our goods. That is why I C believe that to secure the greatest benefit from foreign markets, the level of international trade must be raised throughout the world. If I have gone a little beyond the topic that you expected me to cover, it is because 1 am convinced that the future welfare of the United States is intimately associated w1 th the survival and the expansion of small business. When hostilities cease and war production tapers off, we must find markets for our greatly increased productive power, we must keep up employment. 0 Little business, in my opinion, is one of the most promising areas for an expansion in post war employment. PRECISION TRADE MARK MICROFILM MICROSTATA ROLL NO April 20, 1945. Charles Bell Secretary Morgenthau I want you to participate in making the decisions affecting the transfer of the surplus property program to Commerce. You know what Cliff Mack will need in order to run his shop efficiently, and you also know what sort of commitment we have made to Secretary Wallace. I want to protect Mack's program, but at the same time give Wallace an active organization. You can serve as something of an arbitrator on questions arising among John Pehle, Cliff Mack, and the Commerce people. Keep me advised on the personnel and administrative angles. Damp TREASURY DEPARTMENT TREASURY DEPARTMENT AA INTER OFFICE COMMUNICATION INTER OFFICE COMMUNICATION 0 DATE Date APR 20 1945 TO Secretary Morgenthau 71 TO Secretary Morgenthau April 20, 1945 FROM J. W. Pehle FROM O'Connell Regarding your memorandum of today on the current The following 1s a summary of significant developments in the Surplus Property and Procurement offices for the week tax drive: ending March 24, 1945: 1. The Commissioner and I agree that your surrestion for the interchange of weekly reports between the Surplus Property: various districts is a splendid one and it will be placed into effect at once. 2. As to the April 10 rebort from Sanders, Acting Special Agent in Charge, Atlanta District, which impressed you unfavorably, our investigation reveals that this unfavorable impression probably arone from artless expression rather than from spiritless effort or lack of cooperation on Mr. Sanders? part. Mr. Sanders in acting in the place of Mr. Palmer, who is the regular Special Agent in Charge at Atlanta. Mr. Palmer is of such outstanding ability, and his district under his direction reflects such splendid record, that he WILD detailed to assist Mr. Wool? in the direction of the entire drive and the coordination of the activities of the various districts. Since the April 10 report, Mr. Palmer has visited the Atlanto district, surveyed activities there, and assisted Mr. Sanders in establishinc the procedure for intensive conduct of the drive. Mr. Palmer reports that Mr. Sanders is keenly interested in the drive and is satisfactorily organising his dis- trict. I believe a reading of the April 16 report of Mr. Sanders will not reflect the same spirit which impressed you in the earlier report of April 10. Mr. Palmer will return from itlanta tomorrow, at which tine we can get further information. We continued to work with the Surplus Property Board in drafting regulations and forms to be issued by the Board to implement the priorities to Federal, state and local governments envisioned by the Surplus Property Act. Work is continuing also within our own organization to develop rograms,procedures and relationships that will facilitate operations under the Board's proposed regulations. Instructions were prepared for the regional offices with respect to the new synchronized spot sales method for the disposal of construction machinery and farm equipment, which will be put into operation on a nation-wide basis on April 19. This plan 1s designed to maintain a constant flow of surplus farm and construction machinery and equipment to the public through normal trade channels and combines the most desirable features of the formal bid and auction sales methods. The plan has the approval of the Surplus Property Board. The Army Air Forces have indicated that they will request that we sell 44,000 yards or nylon cloth, heretofore declared surplus by the Army, to certain firms for use in the manufacture of carburetors for Air Forces. We have formally requested the Food and Drug Administra- Oction to cooperate with us in the examination and classification of surplus pharmaceuticals and medicinals, and similar property, -3- -2- 73 72 in order to facilitate their orderly disposal. The Attorney General approved, under Section 20 of the Surplus Property Act, our proposed sale of approximately 23,400,000 Carlisle first-aid dressings. The sale WBS thereupon consummated, the total proceeds thereof exceeding $220,000. Effective liaison with the Department of Justice has been established and conferences are being held frequently in order that we may become acquainted with the Anti-Trust 0 C We have submitted to the Surplus Property Board the question whether disposal agencies should accept from the War Department surplus reverse Lend-Lease materials in view of an arrangement between the United States and the supplying nation, whereby the proceeds of the sale of such property are to turned over to the supplying nation. be Acts. Notwithstanding our formal submission of the matter, the Board has not, as yet, expressed its views with respect to export policy, but in the meantime, work is going forward within our organization in order that we may have a better understanding of the issues involved. The Army has declared as surplus 12,000 additional blitz cans. Approximately 11,000 yards of canvas duck and 1900 mattresses were transferred to the Maritime Commission. A sales program for cut film and photographic paper is being formulated. Arrangements are being made for our Boston and Denver regional offices to consult with representatives of farm cooperatives to ascertain their needs for farm equipment. Total purchases for the week amounted to $26,889,524.02, including $26,300,000 for Lend-Lease (schedule attached) and $589,524.02 for regular purchases. Work is continuing or the development of a procedure for the selection of an advertising agency. Progress is being made in the preparation of a publicity guide to be issued to the regional offices in order to secure some uniformity in publicity practices and procedures. A survey has been made of surplus X-ray equipment on hand. It appears that only comparatively small amounts of such equipment have as yet been declared and that the demands of insti- tutes having priorities under the Act will leave no such equipment for commercial sales. The Office of Scientific Research and Development indicates that it will soon declare a large number of scientific instruments to us and to the Defense Plant Corporation, which they would like to see sold to educational institutions, hospitals and similar organizations. Although the bulk of this material will be declared to the Defense Plant Corporation, the office of Scientific Research and Development is of the view that both groups of property should be sold together and we indicated our willingness to cooperate with the Defense Plant Corporation in the development of a program for the sale of such property. Procurement: 0 Unusual requisitions for the week included 14-250 KW turbo generators with controlling switchgear for Russia: 4,441,800 yards of sheeting for Algeria, Morocco and Tunisia and 20 cranes with swinging boom and spare parts for France. Unusual purchases for the week included 67,200 pounds of aluminum covered paper for Russia; 55 Anti-typhus units for UNBRA and 194,964,348 pounds of GRS synthetic rubber for the United Kingdom and Russia. Total Lend-Lease carloadings for the week amounted to 3,595 cars. The Price Adjustment Board disposed of five 1942, two 1943 and one 1944 cases, recovering excessive profits in the amount of $165,000. Work is continuing in the preparation for the hearings on (The Potomac Electric Power Company's proposed allocations of rate reduction. The Federal Works Agency, the Department of -4- LEND-LEASE Justice and this office, have agreed upon the strategy to be TREASURY DEPARTMENT, PROCUREMENT DIVISION followed. STATEMENT OF ALLOCATIONS, OBLIGATIONS (PURCHASES) AND DELIVERIES TO FOREIGN GOVERNMENTS AT U. S. PORTS At the request of the Bureau of the Mint the Procurement AS OF MARCH 24, 1945 American Nickeloid Company contract for the manufacture of war one-cent pieces. The Company has asked that the settle- ment include an allowance for anticipated profits. If an agreement is reached, the General Accounting Office will be consulted before actual payment is made. Total U.K. Russia China Allocations $6020.4 $2628.1 $2457.4 $172.9 (6014.3) (2628.0) (2457.4) (172.9) Requisitions not S 115.5 $ 26.0 $ 23.6 $ .4 ( 115.1) ( 22.5) ( 42.4) ( .5) Administration: Cleared by W.P.D. The Toledo Medical Depot is expected to be transferred from the War Department to Treasury on or about April 15, but not later than may 1. Requisitions The overall personnel situation is beginning to show an O improvement. We are working with the Bureau of Accounts and the Gen- oral Accounting Office on plans to simplify certain accounting forms and procedures with a view toward reducing our operating costs. Plans for the transfer of the state of North Carolina from the Washington region to the Atlanta region have been completed. in Purchase obligations (Purchases) Deliveries to Foreign Governments at U. S. S 140.0 $ 26.7 S 19.0 S 1.1 ( 167.7) ( 19.4) ( 27.3) ( 1.6) $4784.2 $2100.7 $2113.5 $105.2 (4757.9) (2094.5) (2099.3) (105.1) $3707.2 $1882.9 $1591.6 S 30.4 (3085.5) (1631.1) (1366.3) ( 26.4) $18.6 $743.4 (18.6) (737.4) S 65.5 49.7) $ 93.2 - (119.4) - $17.4 $447.4 (17.3) (441.7) $202.3 - 61.7) Ports* Deliveries to foreign governments at U. S. Ports do not include the tonnage that is either in storage, "in-transit" storage, or in the port area for which actual receipts have not been received from the foreign governments. Note: Figures in parentheses are those shown on report of March 17, 1945. 0 Intrante Administrative Miscellaneous & Undistributed Expenses - (In Millions of Dollars) - Division is participating in negotiations looking forward to the settlement of claims arising from the termination of the - C 74 PRECISION TRADE MARK MICROSTAT REG. U.S. PAT. OFF MICROFILM ROLL NO. 4/20/45 75 LET GERMANY EARN THE PEACE Including an eutline THE MORGENTHAU PLAN comment by SAMUEL GRAFTON 75 FOREWORD One again at in Abraham Lincoln's day. the time approaches when , " necessary for that government of the people, for the people, and by the dictane peace terms be those who have tried, unsuccessfully, to . to "perish from the earth." The phrase, government of the people States . basic much It is for the people, who constitute the government of the United States, to my whether Germany shall here had or NET peace We will My . with ONE HORE we will My . by our accordes by our discussion with our fellow CRIBITA This our declaimed will by the new important, not will over have the opportunity to main A WIN decision will delay. if OCE PROVE another with time As one will surely shorten the with between the possible close of World War II and the opening of World War III. poships, eyes, provide the cause for World War It to contidue indestitutely Because only an Hiformêd people can make wise decisions, the New York Post is presenting in this book several plans which have been Maggested for formulating the peace with Germany The most commission official plan for dealing with Germany was amounced 00 September 24, 1941, by Henry Morgentbau Secretary of the Treasury of the United States Briefly, this plan proposed that Germany to WHAT KIND OF PEACE SHALL WE convened into prodominantly agricultural country by internationalizing the Ruhr, bear of her heavy industry. and distributing to other nations, as MAKE WITH separations the machinery of her was plants This plan has been seragely attacked and " warnily defended actual ing to the point of new on two base questions (1) is this plan likely or workship to prevent the apid economic rehabilitation of Europe generally, GERMANY? and (2) will the slower rate of economic rehabilitation which this plan would being to the area - known a Germany, help or hinder the recordstation of Europe Quite naturally the author and No supporters believe the negative side of both of these quotities by Samuel Graften Mr. Samuel Guiton, author. and commentation has pre second in IND separate series of column articles the and interesting and thought provoking plan offered by any unoficial SOURCE except, perhaps, the equally controversal Vanuarant plan Mr. Grafton's news have been gaining net-wider reception in Dirope and Aus. . well at in this country, because of the simplicate of the course of action be proposes He suggests that the mod useful attitude toward the German is one of letting them and years or filly years to this does nite disturbs in any way. the basic soundness of the idea: because in the meantime, the United Nations will be in control under activities term New York Post has recommended very serious consideration for both the Grafton plan and the Morgenthau plan In IDENT form each can be - Nets been Signature of Mr. Service Graham GIVEN of - NEW YORK POST Copyright 1947 by New York Post and Grafton accept full responsibility for their UW1 future in the working out of peace plan or action of peace plans acceptable to us Whether is takes the Ger social (namework of the other This book originally appeared in certai form in the back RECISION ROLL TRADE MARK 75 CONTENTS FOREWORD INSIDE FRONT COVER SECTION 1. "What Kind of Peace Shall We Make with Germany? PAGE 5 SECTION 2. "What Shall We Do With Germans?" PAGE 13 SECTION 3. "The Margenthan Plan". by Sylvia F. Parter PAGE 27 SECTION 4. "New York Post Morgenthau Plan Editorial PAGE 35 BIOGRAPHICAL Sketch of Samuel Graften INSIDE BACK COVER C MARK MICROSTAT MICROFILM 75 What Kind of Peace Shall We Make With Germany? CHAPTER ONE We're Fresh Out of Peace Treaties There is actually no reason why we should sign peace creaty with Germany for ten fifteen or even twenty years after the defeat of Hitler Most of the legal and constitutional difficulties burring prompt use of we sents if RECISION was to American me substitute If that then force the Germany the ides of best was prevent to should make long future violate armistice - German this any for that of of aggression the really armistics ends formal simply provisions, not peace evaporate te end it milk tary force could promptly be brought into play against her No new dec laration of was would be needed It will be the same was Let's Let the War Go On Let the was as legal concept, simply go on indefinitely in the form of an armistice In would be war which there was no shooting and that will after all be pleasantes than the last peace which was often inter rupted by the sound of forearms There - reason why every war must promptly be followed by formal peace creaty That merely in assump tion which we have all accepted and swallowed without much examination A peace treaty is an extermely valuable document to defeated nation It sets up in business again We gave Germany peace treaty out of hand, last time; she promptly proceeded to spic upon the bent all her energies to suite violation of it This time let make her use her might and guile for generation merely to obtain for herself what she so despised on the previous occasion Make Germany Work for Peace Is effect, let us make Germany. 100 like every other nation on earth, work for peace Before the long armistice were over. Germany would have come to value place formal peace as deeply as any nation has ever valued it. and once she had obtained that long-delayed and precious legal instru ment, she would cherish with wholly new appreciation of is beauties What Kind of Peace Shall We Make With Germany? The long armistice would be self enforcing to considerable measure CHAPTER TWO for any German who violated in terms and thereby further postponed the of peace, would drew upon himself the attention of the Don't Call It Peace entire German nation No here be this time but marplet, who prolongs the WAE. To German queries as to when we propose to make final peace. our answer might well be Take your time pal No hurry Make somewhat The best defenar against future German aggression is simply to continue better Genmany, and we shall see what we shall see I confess that I relish the present war. after the shooting ends to continue it in the form of an indefinite annistice, without concern as to whether it lasts ten, fifeen or . contain touch of diabelism well as of democracy in whene of things which would place upon Germany the burden of solving the German even twenty years. The Long Armistice A long ammistice, in place of formal peace treaty, would profoundly alter the dynamics of the relationship between Germany and the rest of the world. There could be no German revisionist movement because there would be nothing to revise; Germany could heedly beg for peace treaty. and drounce a at the same time Instead of Germany trying to see how for she could go without provoking . declaration of war, we would have Germany trying to discover what the must do to end the war Meanwhile the Allies would remain in truth, Allies, for Germany's unconditional surrender would merely mean the end of shooting not the end of the war. The war would continue in the form of as amistics That point of fact, is what actually happened last time, only we did DOE know is was an armistice This time we would know, and we would realistically call it that. This was would end only when Germany had at last evolved which was it to make peace, and could be trusted to make peace And can it really end before that day? It seems fairly clear that we must throw out of our current thinking the perspective of . formal and final peace treaty with the Gennas nation: discussion of such treaty is like discussion of marriage contract with boy who has still to be been, to go to school, and to grow up Shooting Stops, but War Goes On The concept of permanent armistics merely parts into legal form what has been the actual fact of the relationship between Germany and the rest of the world for the last thirty years For nine of those thirty years or almost third of the period, Germany has been engaged in active shooting war with most of the rest of the world For six additional years, 1933 to 1999. she has manifested . malignant and unconcedent hostility toward other nations For diftern of these thirty years, therefore, the relationship between Germany and the world has been and of war or incipient war The proposal for permanent armistice is proposal that we stop calling such state of affairs peace and that we call it what The thought is that the best we have to offer Germany is as armistice, until new Germany arises with which the world can safely conclude . formal peace The answer to the threat that Germany may immediately begin to plan new war is that we will not let her out of this one The shooting stops, but the was Under such an arrangement Germany would not be indined to make little experiments in hostility. see how for the could go without provok ing declaration of war. for the existing declarations of war would remain in effect. and German violations would be put down as routine by Allied field commanders 7 problem 75 What Kind of Peace Shall We Make With Germany? The Permanent Armistice The purpose of this procedure would be to allow time for the emer- CHAPTER THREE gence of Germany which shall be thoroughly sick of war, and anxiously desirous of stable place When such Germany does arise. the signing of . Let Us Wait for the Facts formal peace treaty with her will then be only reduction to writing of . satisfactory state of affairs already achieved; instead of the expression of . plous hope The time for formal peace treaty would arrive naturally, in due course, and when it came, the creaty itself would be mese formality, rather than an hyderical pricei, whipping together of gadgets and incantation Germany has patiently taught the world that its normal relationship is of the The policy of permanent armistice would be a sign that we have learned and accept it It can be an amiable The proposal for long armistics with Germany. rather than . peace treaty, an armistice of even ten, fifteen or twenty years duration, would allow for certain wholesome flexibility in the world' relationship with Germany We could make an initial attempt to set sound economic base for the German nation; if that failed we could revise the plan or adopt another without the besildered evful feeling that the secred terms of sacred treaty had had been failure if Germany proves amiable But the continued existence of . formal state of was would leach Germany that peace - be worked for: No More Midnight Inspirations that Germany cannot hope, continually and automatically, to receive peace, each time, as reward for having waged war ment, and in of the facts, to all problems But once the formal The great question in German politics will then be how to get out of the war, how to transform the long armistice into peace; and it will be . salutary change to compel Germans to debate the question of how to make . peace, rather than how to break one We may then legitimately hope that the new heroes of German politics will be mm who will come forward with plans for general reconciliation with the world It will be seen that this approach is profoundly democratic, in that it actually leaves the question of Germany future to the Germans And who will say that generation of formal declared war with real peace at its end will not be wholesomes for than our previous experience with genera tion of false peace, and war at its end? treaty is written, it becomes our only basket, and all our Age are in it: . develops mystic value of and have to defend a even after we have lost considence in it A treaty the basic law of the land but it it a form of law not subject to amendment except by such hysterical processes as led to the grudging Dawes and Young plan revisions of last time The policy of AD indefinite armistics would give the world time to make several tries at the economic re-establishment of Germany when finally condition of stability had been reached the writing of treaty would be merely the making of . transcription from reality Whatever plan had proved practical would become the basic plan of the final, formal The policy of Through War to Peace The wont of formal peace treaty is that it attempts without experi- long several alternate "peace plan, if necessary and committing outselves priori, and forever, of same servous and haggard conference Call Is an Armistice We have been frightening ourselves for years with our own talk about the borrid danger of "losing the peace" but made most of these difficulties for ourselves, by setting up the doctrine that we must have . formal treaty at the outset that have only one chance to make good peace, one throw of the dict But cannot 'lose the 75 What Kind of Peace Shall We Make With Germany? peace if we continue the war. in the Icen of an arnistics of unlimited CHAPTER FOUR duration The policy of long armistice would keep us, here in America, on our to maintain the peace; it would not have the effect of lalling us into that long sleep into which formal peace creaties have way of waiting our Peace First, and Then the Treaty unimaginative and idealistic republic I use the word "idealistic" in in wont meaning of course to express our wonderful faith in formalities and gudgets and is the surface appearances of things A formal peace treaty would be the isolationists one-way ticket out of Europe, not the beginning of . chapter of international collaboration but the end of one We do tell ourselves that, even after the peace treaty, we shall have to watch Germany closely. we shall have to keep her from building munitions of war we shall have to supervise her international conduct and condencies This necessity for close supervision these dark stigmata of suspicion and distrust, are not the characteristics of peace, they are the characteristics of - armistice Let us call it an armistice We shall be more likely to do what we should if we call things what they are Let U. Wait for the Facts The policy of long armistics with Germany, an armistice of decades if necessary rather than formal peace treaty. would compel both sides to approach the postwar problem with heightened sense of realism There are certainly men in Germany today who are only waiting for the peace treaty to be written, to that they can make political livings for themselves forever after by denouncing a We do not know the names of this new cast of characters but that they will appear is certain; give them . formal final peace treaty, and you give them cheers, criters of revisionism and denunciation The Next German Hero Thus though the shooting stops, the was continues, and as against Surely we know enough about the easy demagogy of revisionist politics to be certain that the first Genthese who denounces the new totally, the junkerdom's restless passion for planning the next war. le us oppose democratic stubborness in refusing to terminate this one If DEW Hitler morning after it is written will become national here To present the Germans with blank instead to offer them only the should appear in Germany, be could be handled as routine by Allied field barren nothingness of . permanent armistice an empty space which they must 611 in with their own ideas, if they have any, is the only procedure which can compel the Germans to come to grips with the ultimate question of their relationship with the world Venailles made it rather 100 easy for the sinister figures in German without need for a special blessing by Senator Burton K Wheeler Contractives, if, under these pressures, Germany emerges in . comparatively short time which can be trusted to keep the peace, we can shorten these perspectives But let - wait, this time for the facts Though that should take twenty years, . would not be 100 long Let - move into the house of peace when the house is built and tested: in - not, as last time make magper's new for outselves among the bluepeints politics they did not have to try to solve Germany's problems, in was enough to be against Versailles, and to shoct in the streets those Germans who had found themselves compelled to sign A Winter Among the Commas We must proceed this time under . schedule of operations which makes the formal peace totaly remote objective, to be achieved only after Germany shall have thrust forward men and movements is to make . treaty so that when treaty-time finally comes, the entire German nation will be eager for it. and so that the unknown German statesmin of the future 10 75 What Kind of Peace Shall We Make With Germany? who finally succeeds in establishing . treaty relationship with the rest of the world will be the true German national hero, one for whom the Ger- mans will build statues and after whom they will name starts We have our own supply of Congressional demagogues, 100, who have long promised themselves . party when the peace treaty is presented to them . wonderful winter of revelry smid the commas and semicolons There are Americans, 200 who will find it pleasantes and easier to base their careers on attacking . document rather than on solving the problems of the real world The policy of . more-or less permanent armistice, instead during which we CAN actually try out our peace plans for Germany rather than risk WHAT everything on writing one plan in advance like . prophecy. will enforce . SHALL WE higher realism upon such men Peace First, and Then the Treaty We can thus gain experience in living with successive German gov emptime and movements, and, when, finally, . condition of stability has been attained that will be the peace It will only be necessary to write down on paper what has been proved in practice The policy of the long armistice would permit us to avoid unchair philosophizing . peion reasoning and also, meaningless harshness toward the conquered; it would enable us to draw . line between punishment and reconstruction handling each sep stately. and avoiding the messed and agicated tangle of the two which DO WITH GERMANS? by Samuel Graften customarily makes up peace treaty. Let us not, this time, cry "Peace" Peace!" until we know we have peace This time let there be peace first, and then the treaty, rather than the treaty int, and then the war 13 12 RECISION MICROFILM TRADE MARK 75 What Shall We Do With Germans? CHAPTER ONE The Final Battle of The War It sects to me we are going to rus into serious trouble if we on war to rid the world of exis us until the the motive Somersen What "trials" A spirit will after keep of the revenge? going But revenge job done? leaders (as great and Maugham depend small once brilliantly pointed out) is to anachronism in western life The Just for revenge is no longe respectable emotion among our writers haven's dared use ins motive in fiction or drama for decades The last great revenge play was Hamlet, and it took Hamley five acts to make up his mind and then be bungled it Must We Have Triale? Louis Niger's book, What to Do With Germany, proposes trials of axis leaders and axis criminals; and yet the most persuasive section of this fine book that which shows how completely we failed go through with our proposed trials after the last was Mr Nizer system judges this time even on for the to lide into legalistic about the of These are arguments about the form of things We they draws axis We be the line at of war executed have courts leaders tendency out and depending hand, " trials condition the of 5,000 arguments the be armistice outlines top sound Nazis more legal He asks scholar, eficient "trials" that must not forget the content of out problem more important than the form The content of our problem that we must break the political power of the axis leaders and sublenders forever Make It War Aim Our problem s not to try them, not to judge them but to smash them; to smath them " condition of our own survival now and after the war The very concept of trial shows that we suspend judgment Or, if we do non suspend judgment we are insincese in talking of trials for trist is a suspension of judgement 1 do not ware to ane the leading elements in *** 0 75 What Shall We Do With Germans? countries tried as criminals; : want to see them destroyed a enemies Their destruction, political or physical (eicher will do). should not be CHAPTER TWO . separate, post was issue; it should be encompassed as an act of war, as part of the war, as . condition of bringing the was to an end I don't know whether we are entitled to sit in judgment on our fellow How To Lose In The Last Round creatures or and but do know we are entitled to fight our mortal enemies The permanent exile, or imprisonment of at least 100,000 members of the leading ciacles in Germany. and equivalent numbers in Japan and Italy, should be one of our was sims, an unchangeable was aim, not subject 00 trial This would be clean and honest act of war. in line with the morality of war. which is the destruction of the enemy by force If we set up system of courts to try axis was leaders great and small, these leaders will, of course, become prisoners immediately the armistice begins They will be subject to the mercies of these courts But they will also be entitled to the protection of these courts Oddly enough therefore the first administrative result of any system of "trials" for exis leaders will be to SAVE their lives Our courts, however constituted will have to insist that their dignity and orderly routine be The War's Last Battle This would seem to me far more honest than to try to invent courts, and to write statutes after the offenses complained of In line with this view, I do not care whether Hitler is considered . criminal or not know be is . military objective These exiles should be ordered as . simple act of military government the removal of dangerous persons A guard should be set up over them, wherever they are M No doubt many Poles for instance, would be will- ing to establish such uniformed guard as so honorary life-time service We should dismantle the fascist political apparatus as unemotionally and as automatically a we propose to dismantle the fascist armies and war respected Revolution against fascists will become concempt of court The Day Will Pass There is no way out of this dilemma if we insist upon "trials" for the one hundred thousand or so leading members of the Nazi apparatus Our soldiers, storming into Germany for the destruction of fascium, will find thrust upon them the final ironic function of becoming . police squad to protect the fasciat leaders from harm We know that moments of deep popular excitement when the politi cal imaginations of men ACE really stirred when they are really ready to make fundamental changes, ACC rate and brief perhaps day in century plants There seems to - no room or need for trial procedure in any of A system of "trials" for exis leaders will make revolution illegal on the these areas only day on which in could possibly happen The moment will pass. The cold routine of ordinary Mondays and Thursdays will succeed The passage of year will SAVE half of the one hundred thousand leading Nazis from Perhaps the Germans themselves, knowing this to be one of our was aims might oblige as by rising and disposing of the 100,000 before we arrived Well and good, those Germans who did our work would show themselves to be on our side But this job must be done, either as in act of revolution or an act of war, as part of the war. as that which gives meaning to the war This will be is effect, the final battle of the war, and we cannot punishment the passage of two years will save almost all of them The very essence of the "trial" plan is its postponement of the critical decision: and every criminal lawyer knows the mormous value of postpanement separate it from the was without losing it There Is a Compromise The only possible compromise therefore, between our own desire for order, and the desire of the plain people of Europe to be rid of their fascists, 17 16 0 75 What Shall We Do With Germans? is the immediate and permanent exile of 100,000 members of the leading circles Germany one of out war aims; an NC of war. part of the condition for beinging the was to an end. In may be asked why suggest instant and automatic exile, instead of trial and potential death sentences That is because am not impressed by our ravings and funnings I do not believe we ever shall. or even can methodically kill 100,000 human beings in time of peace ask that we stick to the possible and do it. rather than reach for the impossible and fail ask that or dismantle fascian systematically by socially tolerable and socially permissible means rather than give ounselves the luxury of dreaming up all memor of horrid, violent ends for fascism only to come out of our own emotional stew purged and ready to let in pass without really doing anything An Inseparable Part of the War , know that the fascists of Germany will be much more horrified by . proposal for cool and arthodical exile, as . condition of the armistice, than by all the Headthing demands for "trials, "justice," the gallows, etc The military governor of an occupied ares is entitled summarily to remove dangerous persons from regional under his control and who will say the trial is necessary to establish that known fascist functionary is dangerous person A mere act of identification will suffice I also suggest that time will pass for U. 100 while it passes for the people of Europe - the spectacular "trials" of the fascists are assited There will be demands here for in end to occupation for bringing the boys back home Time will sharpen our desire to get out of the mess by any means at all, preferably an easy one We can avoid this danger only by making the destruction of the fascist system the final battle of the wat an inseparable part of the war CHAPTER THREE Only History Can Teach The Germans If were asked to become . teacher in the German schools after the war, would insist on using "Mein Kamef as textbook would make the little Germans is my class memorize the entire volume page by page. I know they would hate me as foreign teacher imposed upon them by force, and to would try to make them hate "Mein Kampf, too would make them sick of it. as well as of me I exaggerate I spoof, yet this seems to me of least as practical as any other scheme for "educating the Germans I have come across Who are the golden minds among in screne poised with all problems solved ready to do the educating Shall we tell the Germany how capital and labor ought to deal with each other) But we are still in the process of solving that one for ourselves We haven't found an answer for home use yes, let alone for export No Answers for Export We are still in great frightful tage with each other over so old an American problem as re-federal relationships yet many of - do not doubt that we ARE quite ready to go across and tell the Germann how to live What shall we teach the Germane about "democracy" Shall we teach them to believe is collective bargaining and the closed shop? But our own minds are not VIS on these and ent can imagine the Congressional uproar that would follow any attempt to indoctrinate Germany Shall we teach the Germany that every men and woman ought to be allowed to vote, or that there should be system of poll-taxes? Either choice will lead to frantic argument back here at home The German pupils will litera while their American teachers quarrel Let's Stick to the Possible Once again I at that in our approach to the Germans, we stick to the possible, and realize it rather than reach for the impossible and fail 19 0 75 What Shall We Do With Germans? A of life does not start in the schools schools merely reflect CHAPTER FOUR of life already exists We Americans are not democratic have democratic schools we have democratic schools because The "Hard" Way or The "Soft" democratic Schools sum up the answers which society has reached But society must first reach the answers, of and by itset. Let us start with the question of whether we are at war with the German We are already putting the Germans through one important educational experience is beating them We are already teaching them great lesson the lesson of the failure of fascium That is truly how society learns I people or only with their leaders The question answers itself. We are at was with whomever is at war with US Thus if limtle German jungfree is suggest that is our approach to the German people, we build od this begin- stuffing machinegun belts for Hitler, we are at war with her, eyes if she is sing suggest that we address the German people in the following terms Germans! We ADT going to exile many thousands of your leaders We only 17, ever if she is as cute as apple pie and ever if the has DEVEL had are going to occupy Germany We ATE going to dissolve your state; you are political idea in her life I go further There may be German worker, polishing artillery shells not to have army. savy. munitions factories or foreign policy. As for the who secretly hates fascism: who in his heart of hearts loves democracy and ml we my this 00 you pays every night for Hitler's downfall. Are we at was with him? The answer is obviously yes This is not . Chekhow was We are not interested They Must Solve U. We do not love you, we do DOB hate you. You are caught in certain historical predicament Very well, then, get out of it, as best you can It is not our problem It is your problem Try to solve your problem We promise you nothing Run your schools as you please If you pick unsuitable teachers very well, you will pay the penalty the occupation will be prolenged "It is your problem we CASSOC solve in for you we do not intend to try Your past mistakes have placed you in predicament, out of which it so happens, you CHI emerge only by convincing us and persuading us that you can be trusted You are not our problem for we intend to make ourselves safe against you whatever happens But we are your problem You must solve us. "Very well then solve us It is you who must - the hard ques tions, not we le is matter of indifference to us whether you succeed in answering them. or not It is up to you whether you care to face the ulti- rates at last and whether you care to think your way through your in people's secret thoughts, but in the work of their hands If their hands help Hicler they are our enemies, though their hearts be breaking Shall We Be Soft or Hard? Now, it has been suggested that . "soft" attitude toward the Germans may encourage them to make . revolution that it, if we promise to feed them after the war to let them nm their own affairs if we guarantee their independence they may be stirred to an uprising This is the "beit" theory, which holds that revolutions are obtained the way mice are trapped with bit of cheese Actually, the "wit" attitude only relieves the pressure on the German people If we are going to be amiable anyway. after our victory, then the Germans may safely continue to brood about life and polish artillery shells Oddly enough the mechanical adoption of "hard" attitude has much the same effect. If conditions are going to be intolerable after the war, if we are going to kill, sterilize partition, enc. then again there is no reason for the Germans to act If the matter is out of their hands, then is is our of their hands, and that . that predicament." Let the Germane Solve It All our specific plans therefore from partitioning Germany to teach 0 75 What Shall We Do With Germans? CHAPTER FIVE ing in the German schools, an little silly, because they relieve the German people of the necessity of making choice If it doesn't matter what they Not "Hard" Not "Soft," But Democratic do then it doesn't matter what they do and there is no need for them to do anything Our planning hard, soft and medium rare, merely cashions the Getmans against reality and encourages them in their inertness We are forever "filling in the future for the Germans We beenk our heads over such Our attitude toward the Gentans should not be that we propose to selve their problems but that we have no solutions and intend to leave them unsolved qualitions Are three any good Germans? Are the Germans sick people) This may seem heartless but it is also honest For in actual fact we Are they incurable? Can they be e-decated? Who shall teach in their have no solutions We have solution only for our own problem, which is schools?" to smath the fascie power Our solution of our own problem will sects No Way to Teach But it is the Germans who must be made to break their brads over these questions It is precisely by attaining against these problems by sarily leave all manner of loose ends dangling Where shall Germany sell her goods? Who shall num whatever governing functions we leave to the Germans? Who shall teach in the German schools) It stems like formless and uncomfortable future for Germany. . is prickly with questions struggling with them that the Germans will re-educate themselves if at But we are not in the tying-up-loose-er business we are in the all We cannot reform the Germans by answering these questions for them any more than we can teach child algebta by doing in problems for it So our fine - is solving the German problem is to make the German smole fascism business Let us say frankly that we know the answer only to our own problem which is to make ourselves safe people face . to give them sense of the blankness of their own futures reality facing ultimate responsibility for their own futures; this should be to convince them that their futures are not "filled in.' but empty, beyond the merest police surveillance that if they want something more than that our attitude our only attitude toward them For there is no educational they had better. in their loneliness and faced by our indifference go to them to 611 in for themselves the empty spaces of the unknown future that To leave the Germans thus naked on the side of the moon, facing process we could devise for them which would be half an rich as to compel work on the problem paper before them What should our 'attitude be toward the mass of the German people If we HE up complicated plan for the Germans complete down to It should be that we have be attitude If they want - to distinguish good Germane from had Germans, they had better and some way of establishing the distinction themselves democratic indoctrination in the kindergartens, then we give the Germans something to fight we give them it effect rallying point we give them slogans The new German leaders will then not have to have plans of their over it will be enough to be against our plan. For this and other reasons I would give the Germans no plan at all, beyond the metest police surveil- lance would give them round ripe nothing and bid them fill in Perhaps, under these challenging pressures it will occur to them that they had better convince or that there are two kinds of Germans, "good' and "bed." If so it their problem to make us believe that to is not up to - to disentangle one kind of German from another in is up-to the Germana 22 O 75 What Shall We Do With Germans? to disentangle themselves, possibly by making . revolution before the ends not the United Nations job - solve all German problems: it is up the Germans to solve the United Nations problem Let us say the war ends, and they have made no revolution Very well, CHAPTER SIX The Danger of The Unfinished War we continue our same challenging attitude (It 000 of its merits that it is equally serviceable for war or peace.) We occupy Germany, concentrating on our military safety That is our problem and we will solve it. The Ger- During war we think of the top German fascists - deadly ecenties who must be destroyed What reason if any. exists for changing this attitude mens will have shown certain incapacity by not removing their OWN top fascial leadership We accept this German demonstration of incapacity We diseive German state organs, and we police the German nation the moment peace arrives? No. not the German nation for it is no longer nation we police the German land If the Germans nation, it happ then to invest one What about foreign trade? What about schools? If these questions pinch, le the Germans meet. let them talk, let them sit in their rooms and stare at reality, let them make offers It is not up to us to specify the side of the postage stamps in Utopia It is for the Germany to grapple with the Must we. on that day, stop thinking of German fascists as deadly enemies to be destroyed and begin to think of them only as criminals to be tried? On perhaps not even as criminals but only as indicted men, presumed innocent until proven guilty? The only difference the coming of the semistice should make is that it ought to give US the right to substitute methods of peace for methods of was in carrying out our policy. But our policy must remain the same, the destruction of the fascist power future, if they wast future Should they choose to play silly games, to flaunt nationalist flags, P they did last time we shall take appropriate No Solution Short of Exile measures to prove to them that exercises are not solving their problem We do net know whether the Germans can find solutions But let us be honest We de not know whether we can find them, either If our attitude forces the Germany to realize the meaningfulness of their actions or BOS action now and after the wat, we shall have made . contribution we shall without trial of say. the 100,000 top Nazi functionaries That alone can have forced the Germane back into community of mm seeking their way policy should be continuing policy, equally valid for war and peace The It will be - that this approach is neither "hard" nor "soft." In is perfoundly democratic, in the sense that it conorder that what people do is important that their decisions and actions really matter We avoid the absurd postulate that we know the answers That is why see no solution short of the instant and automatic exile, be the logical edimination of the wat to be carried out as the final battle of the WAT The great danger is that we may and 00 make the sharp differentiation between the period of wat and the period of peace Our high political chief difference between was and peace should be the difference is methods used for carrying out our policy. Naturally, methods change when the armistice arrives. but policy itself need not change and should not change Why Let It Become Another War? It will be strange and wavering conduct on out part to fight desperate was for the purpose of destroying fascism, and then the moment we win the war change over to another purpose entirely, that of putting fascists on trial for horrible condemnable, but sill only collateral offenses called strocities But the most strocious fascists have probably committed no physical strocities to R o $ TRADE MARK MICROFILM T RECISION 75 What Shall We Do With Germans? How then shall we handle Julium Streicher publishes of the infamour and pornographic "Der Stuermer." which has poisoned the mind of . generation Under the blearily legalistic "trial" system the went we could probably do to Streiches would be to deny him second class mailing privileges The proposal that we stage "trials," no matter how well meaning is proposal that we shall not do what we are at was to do the moment . becomes possible do it Let - keep our sights up. This DOE war about attocities though atrocities have been committed during the war. not war about the Hague Conventions though the Hague Conventions have been violated It war about fascism If the coming of the armistice changes our pur pose then it will not be an amistice, bu subtle and concealed defeat They Will See the Trains Leave Let - keep our sights up: It is our job to dismantle the Nazi Party unemotionally and methodically as we propose to dismantle Nazi arms factories THE MORGENTHAU PLAN This our task, by methods of was x long as the German prefer war, by methods of peace when they tire of fighting The task remains through war and peace We are liberators not judges We are liberators not school teachers for the children of Germany We are liberators and unless we liberate, unless we physically remove the fascist bureaucracy to place of exile all our schemes for democratic schools and democratic erolley can and democratic perridge for the new Germany will be window drewing to hide failure But it we do remove the fascist bureaucracy without trial, on mero these subordinate more not seem so hand then German does not work will that children manageable identification that It fascium then will all nearly They problems actually instantly teach have become learned the lesson before they come to school They will have seen the trains leave carrying the fascists and fascism to the border and oblivion 26 by Sylvia F. Parter 75 The Morgenthau Plan CHAPTER ONE Why They Fight The Morgenthau Plan Powerful forces both in the U $ and Britain are inspiring the opposition to the 10-called Morgentheu plan for reducing postwar Germany to a predominantly agricultural nation- for the simple reason that they ware : strong industrial Germany to offset the "threat" of strong industrial Russia And although these groups in both countries are making as intense effort to ridicule the proposal and have aboved aside grotesque and impracticable, informed Washington sources revealed today that the Treasury's scheme "will very much alive workend has not been repudiated by the President as was reported this PAN The Men Against It On the contrary there's . good chance that at least the main outlines of the Morgenthau plan will form the basis of our official policy toward Germany The may behind the for garbied leaks on the Treasury's proposal and the suspiciously sudden storm of opposition which followed reaches deep into the paths of power politics In's not just question of an inter cabinet argument on the best method to make sure Germany will be unable to wage another was in 15 or 23 years Involved are the groups here and in England who few Runia Once this key point international politics is recognized the pre mature disclosure of the Treasury plan, which imperilled - position, and violence the the criticians explained of The misleading stories about the Moegenthas plan published to date have almost obliterated the fundamental issue involved This as authoritative sources put it, is one of viewpoint (1) Shall we restore Germany to fell industrial strength as soon as possible that there shall be balance of power in Europe and try to cut the risk of was by maintaining controls over strategic industries) (2) Or shall we turn Germany the direction of in agricultural economy and make another German was extremely difficult if not impossible? MIcRo$ TRADE MARK MICROFILM ROLL NO 75 The Morgenthan Plan The dominant groups in British government and industrial circles favor the first CHAPTER TWO viewpoint Rassis stand has not been disclosed officially, but reported she definitely will high any plan for rebuilding Germany on the same industrial Rebuild Europe Without a Strong Heich basis Here the split involves the Treasury Dept on one side and subordinate groups the War Dept and State Dept on the other No matter how rigid we make ONE industrial inspection of Germany in the first postwas era, all sense warns that 10.15 cr years, Secretary Hull believed much more favorable to the Morgen than plan than his subordinates led by James Dunn. subordinates led by Foreign Minister Eden our bitterness will die down and the initial Allied controls will be chipped away-which is basic reason for Secretary Morgenthes's insistence that Germany' industrial might be slashed to a minimum from the beginning The no-called Morgenthau plan starts out with the one fundamental Facts About the Morgenthau Plan objective directing Germany's economy after the was that she never Churchill s aid to lean somewh more toward the scheme than his theraton world peace warmaking ind astries Then long range inspection systems outside controls tion tariff barriers and creation of a customs union The north and south won't Other schemes for dealing with Germany also may have that as prime goal but they aim too maintaining the balance of power in Europe and would divided and barriers (2) All armament industries and potential was essential plants would be eliminated and stripped Machinery from heavy industry factories would at creating powerful Germany offset the "theret powerful Rossia, This the plans worked out by subordinate the War and State removed and given to devastated nations Depts. stress the need for returning Germany to strong industrial position (3) There would cash stations, therefore (4) The Ruhe Valley would be internationalized and operated by three-power commission The Ruhr coal mines would be shut down as joor possible Basic Differences temporarily (1) Imports of capital into Germany would be controlled and mitted only for the purpose of developing agriculture or light civilian able be Thus, the proposals emphasize the need for turning Germany into . predominas als apticultura nation, for permanently eliminating potential (1) Germans would divided into two major parts, the north and the south and each would function separate unit." The south would be tied with Austria and be made self officient whole through elimina be will again Here for the fee time, are accurate details of the Treasury's proposal . per Although this may be over simplification it highlights fundemental difference industries viewpoint And Treasury experts see the argument the Morgenthau approach (6) The Sear, major industrial area would go to France Party of rather than the other the realistic one "The idea that we can maintain (7) The big German estable would cut into small farms controls indeantely over developing industrial state naive, 005 Silmia East Prussia would Poland authority This is the long-range economic policy remarked The danger of another was will not be in the next 10 years when we may have strong controls will come after that, when we have helped rebuild Germany and when, - the natural COUCH of things, our inspection system will be less complete Reich Importance "Myth" One of the hurshest criticisms of the Morgentheu plan has been that it would undermine the economy not only of Germany but also of all Europe 11 RECISION O 75 The Morgenthan Plan because of the Continent's dependence on an industrialized Germany for CHAPTER THREE supplies and for purchasing power. This informed Washington sources said today. "is . myth which has been carefully nutured by the Nazis. The dismemberment of Germany's heavy industrial plant and its trans for to nearby lands devastated by the Nazie admittedly would lower the Wouldn't Uproot 30 Million Germans The persistent report that the Treasury's plan for turning postwar standard of living in Germany but at the same time, . would help raise the standards of other countries Germany into . predominantly agricultural nation would necessitable the Belgium, Holland France, Poland Caechaslovakia for instance, would benefit tremendously from the receipt of new industries The machinery and factories would give employment to millions would swell payrolls deportation or emigration of 10,000,000 Germany in plain, downeight poppycock and there's not . line in the so-called Morgenthau plan that even suggests this revolutionary move No informed source gives this "scare number" the slightest credence . and create desperately needed buying power Instead of going to Germany for industrial supplies these nations check disclosed today It originated out of the first, garbled leaks on the Morgenthau per would find them within their own borders posals And its constant repetition by presurrably responsible columniats is imperilling the whole public debite on what to do with Germany after Not a Needed Market the war. As for Germany as an essential buying market, that too cannot be Here's the true story on that nymer and on the German unemployment backed up by fact In 1938, for example when Germany was buying large amounts of goods from other Europein nations to prepare for war, the was not of vital importance to any country situation after the war. Only , per cent of the United Kingdom's exports, only 7 per cent of France's sales were to Germany Not one country - more than 15 per back to 1870 cent of its exports to this nation To be even more malistic about it, Germany won't have much money to buy goods after this war, unless we turn right around and hand it over her. A Higher European Standard For . while at lease the Treasury's plan foresees . lower standard of living for the Germans but they would not starve by any means Germany During the early, were conferences on the Morgenthau plan, one of Secretary Stimoo's off hand comments was that it would turn the clock At that time, be continued Germany's population was roughly 40,000, 000 compared with in estimated 70,000,000 after this war And what would happen, he asked to "the extra 30,000,000 His question was answered in detail by Treasury experts, who pointed out that Germany even now was virtually self-sufficient in most foods, that the would be more 10 when her population concentrated on agriculture, and that, therefore there would be se need for largescale emigration Stimson is said to have accepted the answer But out of his first remark grew an unerly baseless number. even now is . great agricultural country, virtually self-sufficient in dairy products, meat, grain, etc. be What's more, Treasury officials - nothing wrong with . lower stand and for the Germans They asked for it," was the comment of one source. Simultaneously, though, the proposal sims at . more industrially balanced Continent What's more an examination of the facts indicates unemployment will substantially smaller than advocates of . "soft peace" say. For instance, 8,000,000 to 9,000,000 foreign workers now in the Reich will return to their homelands as soon as possible by the war's end if is estimated that 5,000,000 to 6,000,000 Germans will have been killed or seriously wounded Another 1,000,000 to 3,000,000 German prisoners of the Ressians probably will be kept in Russia to help Soviet cities The accounts for from 14,000,000 to 18,000,000 Germans And in addition, millions will find jobs rebuilding their homes "Of course, Germany will have an unemployment problem during the 33 32 TRADE MARK 75 The Morgenthan Plan initial transition period." informed sources state "for millions will be demobilized will be released from asmament plants But the major point that as agricultural Germany can support New York Post Editorial on its population The Morgenthau Plan Closing of Mines Another oft repeaced criticism of the Morgenthau plan involves closing September 27. 1944 of the Ruht mines for while This as said, in unnecessarily hard and would deprive Europe essential supplies Again experts him the purpose of this objection "to throw smoke screen the mines area's closed temperatily, the Allies will forced to Let's Hear More One excellent test of any plan for setting the German question is whether it is likely to pervent the German from starting another was as ask Germans back to operate them an obviously dangerous concession At supplies athocities here APT amount that England rushing to the support this suggestion least for Britain mines on ment the demand and this move would help her salve her ove employment but the result shocking to some people The cry that Morgenthes wants Many other criticisms seen to fade away under serious scratiny. For . "hand" peace has gone up Some people - to believe the . "well" problem they world That's shocking admission of weakness among the Allies which is any one Is brief. the Secretary proposes this that Germany be converted into Another shout has good up over the "value of German industrial fact this Actually, what Morgenthan urges is neither "hard" peace is the vengeful sense, not "soft" peace in forgiving one but realistic peace But that wouldn't be hard The important things are the machines, which can relocated easily The buildings area's essential backed from peace would straighter out the Germans instance, greatothercry has been about the dificulty of "moving indus trial plants not recover Secretary Morgenthau has worked out plan with that test in mind . R E CISION way As shows urticle the argument that industrial Ger essential Escape's economy just baseless No sensible person even attempts that the Morgenthau plan be accepted 100 per case The Treasury itself recognizes compromise or such major points - the division Germany into northern and southern regionswilland on such miner points as the temporary closing of the Ruhr necessary predominantly agricultural country by interna actionalizing the Ruhe, heart of her heavy industry, distributing as separations to the countries the has looted the machinery of Germany's was plants and giving Silesia and East Prussia Poland Morgenthau convinced that Germany remains in industrial nation after the war she will rebuild her heavy industry, now in the process of destruction and be ready for was in another bee or twenty years It Makes Sense The entire scheme and its background have been distorted by the pre mature leak and those who fear the program are using this to their own But if the forced to work out her destiny as largely agricultural nation, Morgenthas reasons it would take her two three generations to prepare again for wer-ever if Allied commissions and annual of occupa tion are withdrawn much sooner than we hope they will be Secretaries Hull and Stimson who with Morgenthau are members of But basic issue remains just this What shall we do with Germany to make sure that never again will be able to threaten world peace? special Cabinet committee appointed by the President to work out plans for postwar Germany, are reported be opposed Morgenthau's plan We think the plan makes good deal of sense, and we are particularly 54 () PRECISION TRADE MARK MICROSTATI 75 The Morgenthau Plan Samuel Grafton Title NEW pleased that it smoking our Hull and Seimson Perhaps if there enough debate Morgenthau's properals, all government officials charged with planning Germany's postwar existence will take the public isto their confidence SAMUEL GRAFTON - his start in the newsuper business in the We earnestly hope that Morgenthau's plan causing the State Dept to reconsider the wisdom of policies in respect to France, Spain and Italy and also the quality of - appl especially that of Robert Murphy political adviser General Eisenhower Germany It seems obvious that any German plan finally adopted will depend upon the men carrying out policy on the some A Bad History Hull s aid to favor stem measures for Germany but not Morgenthan's particular set of measures However, the State Dept. now constituted may prove incapable of carrying out sound German policy. What can we reasonably expect from the department view of in "onge" policy with Gaulle "soft" policy with Franco, its compro mises with Bedoglio and the House Savoy We like the Morgrethau plan because recognizes that the Germans cannot be trusted run heavy industry They have twice made their anseral to world war We believe the Allies should adopt this idea basic principle and make all other plases of German wettlement. politi cal, territorial etc.to it. Also we think that the grandchildren of Nan soldiers would not want conquer the world the value of peace were once made clear the place where many first sale newspapermes end writing editurials From there or was but kep towards becoming that national one-that the conductor of the coloros known a I'd Rather the Right in his newspaper colores which originaled in the New York Post whither the had been bought from Philadelphia editorial writer, Mr Grafton has sooned - many firsts that becomes imposible to give . detailed for in the short space available He was, for example, - of the first and most committees of the cal amounts is inside that the Government place an enburge - the sale of acray ime and see to Japan AS told, be wrote more than seventy separate columns as this subject pelor to Pearl Harbor. His famous line, The Ansteral of Democracy is The Filling Station of Fascium, was - of the classics of that campaign. He was among the list I not the first American west, leuse the phrase Second From The phese was coined in the beginning of his campaign to gst America do something specific toward getting under way with the was to Democracy Here again he come with phesio the west winging Germans Samuel Grafton has proposed plan consistent with Moegen than's under which the German would learn cherish peace across the country, " Policies Were Planes Democracy Would TR Grafton has urged that we sign treaty with Germany granting her instead long anmistice After the had proved to the world the building blas under which the United States and other government of the world her future peacefully and democratically, the would be restored to the opened their borders - temporary havens to homeless refugees, giving family nations through formal peace treaty Let's protect ourselves against Germany and then make has show us that trust her H was the first to conceive the idea of Free Ports los Relagina the them an opportunity for breathing spell from the terrera of war In addition his work KE columns for the New York Post and the add other ownspapers throughout the country, Mr. Grahom his found THE to write two natural books "All Our For Domectacy, and "As American Diary He has also done great deal of work radio on mentator and has lectured and traveled from COAN to O 0 MEMORANDUM FOR THE SECRETARY. $ April 20, 1945. Memorandum for the Secretary. April 20, 1945. Mail Report questions about German currency, the defaulted bonds of several countries, and control of foreign funds. The death of President Roosevelt overshadowed There were a few suggestions regarding disposal of the Nazi gold hoard, but this had about disappeared from the mail by the end of the week. everything else in the mail received during the past week. Communications took every form from printed cards to cablegrams, and offered many suggestions, but all with the same objective -- to honor fittingly a great man. Letters came in every mail urging that the Seventh Drive be a memorial to him, and many asked that his picture be used on one or more denominations of the "g" Series to be offered during the Drive. Special bonds for school children, with his picture, were also suggested, and there was continuing recommendation for bonds of smaller denominations than any yet issued -- these to be especially commemorative of President Roosevelt's interest In "the little man". 0 C There was a great deal of pressure for coins or paper currency, varying from a Roosevelt 5g piece to a $25 bill. The most popular, however, was the idea that a dime be minted with the head of Roosevelt on one side and a symbol of Warm Springs on the other. More ambitious plans included trust funds, shrines, and even international unions. Aside from these, there were many letters from persons who said nothing about specific memorials, but simply expressed their heartfelt grief over the passing of the President. Tax mail, though slightly increased, brought in new comments or Ideas, and the rest of the bond mail was along the same lines as that we have received earlier. There were a few scattered suggestions following the lead of a radio commentator that the Seventh Drive be dedicated to Mr. Truman as an expression of confidence and support. Military successes in Europe brought an increased number of no - 1 C General Comments Michael Stern, Kelso, Washington. According to reports in the Press and on the radio, U. S. Army troops have taken as a prize of war. German gold reserve funds of approximately $100,000,000. I herewith announce my claims on this taken treasure, the amount of which I reserve the right to specify later on. I have lived all not life in Berlin, Germany, as a citizen of Austris. When the Nazia conquered Austria in 1938, I was forcibly deprived of my Austrian citizenship and robbed. Now as an American citizen I as sure that legal and moral considerations will make American legislators see the justice and righteousness of my claim. I herewith urge the Honorable Secretary of the Treasury to consider my claim as a first step to become reimbursed for my losses out of this captured German treasure. C. K. Wynne, Export Managers Club of Chicago, Chicago, Illinois. The members of our Club, by referendum, have voted over 12 to 1 in favor of the Bretton Woods Agreements, involving participation by the United States in both the International Monetary Fund and the International Bank for Reconstruction and Development. I thought you would be interested in learning of this action on the part of our Club, especially in view of the fact that It isthat based on aBoard vote of membership, of our of the Directors, as has a number of been and not the simply case by organizations who have opposed the Bretton Woods proposals. Richard Rucier, Philadelphia, Pennsylvania. I would like to congratulate you on the wonderful job you are doing as head of the Treasury Department. I am only fourteen but I still appreciate the job you are doing. Keep up your good work. Joseph W. Walter, Atlantic City, N. J. I an just a teen-aged boy In the Atlantic City Public Schools, and I would like to know if it would be possible to have our former President Roosevelt's picture put on a new American bill of about eight dollars. think we should, in remembrance of our beloved former President. If it is possible, 1 would like to know If you would send me one of the first off the Press, and I would send you the money for it right away. TRADE MARK MICROSTATINUS.PAT.OF MICROFILM ROLL NO -4- -30 C Favorable Comments on Bonds George Burns and Gracie Allen, Hollywood, California. (Telegram) We respectfully suggest that the Seventh War Loan be designated the Franklin D. Roosevelt Memorial War Loan. Max Goldberg, Chicago, III. (Telegram) May I suggest that you consider very carefully the possibility of designating one of the series of the 7th War Loan to be known as "Franklin D. Roosevelt Memorial Bond to bear no interest, or very little interest due in ten or twenty years. I believe the citizens will I honor our past President by their subscription to ten billion dollars of Roosevelt Memorial Bonds as a mark of esteem and admiration for our beloved Chief who gave his health and life so that our nation can survive. If you agree with me, I would like the privilege of being the first one to subscribe $2,000 toward the Roosevelt Memorial Bond in recognition of my two sons in service, one who is in France and the other in Iron. Joseph Costs, Bronx, N. Y. In this the hour of a Nation stricken numb with grief at the untimely passing of our beloved President, it has occurred to me that there must be millions of people throughout these U. S., humble, everyday people like myself, who, although their hearts are filled with sorrow will not be able to find an outlet to express their grief. These people are asking of the man in the street, "Want can we do? Who will show us how to prove our loyalty and devotion to the man who now lies sleeping his last sleep? . What better way could NO find than to dedicate the 7th War Loan Drive to his memory, make it the Franklin Delano Roosevelt Memorial Drive. Thus we will serve notice to the world at large that in Death as well as in Life, the ideals for which he strived will live on and be brought to a swift and complete realization. Wm. Gintel, Mamaroneck N. Y. As we Americans bow our heads in mourning for the loss of our great leader, we should also remember that it is our duty to carry out his policy of a United America for complete victory. It is in his memory that I suggest we set aside one day during the 7th War Bond Drive as F.D.R. Day and call upon all Americans to support what our great leader so willingly gave his last full measure of strength. Mrs. Dolly Hill Brown, Wichita Falls, Texas. I am one of the million common people that have lost a friend in the death of our President, Franklin D. Roosevelt. Would it be out of line to ask if a day or week be set aside to honor the President by buying more bonds to show our faith in the country he loved and died for? Henry J. Faber, New York City. The 7th War Loan Drive is the first chance the American people have to give the new and honorable President Truman a vote of confidence. If we expect that President Truman is to become the great leader of democracy our late President Roosevelt has so deservedly been credited with, and If he is to grow to be the symbol of freedom for the world, If he is expected to speak for the American people at future conferences, he must get an overwhelming endorsement by the public. To my opinion, this can be displayed best by the average American by lending more money to the Government than in previous War Loan Drives. 81 PRECISION TRADE MARK MICROSTAT MICROFILM ROLL NO. -6Unfavorable Comments on Bonds Mrs. John F. Coulon, Johnny Coulon Products Co., Chicago, Illinois. . Would it be possible to have Wesley A. Taylor, Santa Ans, California. Twice in recent months when I have tried to buy some U. S. Treasury 2 1/2% bonds I have been informed that they were not available, and that I would have to defer my purchase until the next bond drive. I am the 7th Loan changed to "Franklin Delano Roosevelt Loan in tribute to the greatest man the world has ever know? I have been so saddened by the passing of our beloved President that I thought we could do nothing that would please him more than to buy more bonds, so when I am selling them now ask them to blazes forth in huge type, and every radio blares forth admonitions to "buy war Bonds I should be confronted with this situation where I must either let my funds lie idle for a time or else buy some type of bond which is not my preference. If there is any good valid reason for this situation, I would be pleased to know what It may be. I buy in tribute to the late President Roosevelt. sold two $500 Bonds to a little man today who felt wondering why when every newspaper and magazine this same way. I Mrs. Edward C. Fray, Philadelphia, Pennsylvania. I'm writing to you to see If you can give me any information regarding two twenty-five dollar War Bonds purchased by my son who was killed in France on October 7, 1944. I've written several letters to the New York address, but I have received no answer whatsoever. will you please see that I get & definite answer to this letter? O ROLL NO. 2" EXECUTIVE OFFICE OF THE PRESIDENT Report of the War Refugee Board for the period from March 26 to April 7, 1945 WAR REFUGEE BOARD C WASHINGTON 25 D.C. SITUATION IN GERMAN-CONTROLLED TERRITORY OFFICE OF THE EXECUTIVE DIRECTOR APR 20 1945 internees in Germany and German-occupied areas is very precarious. Camp populations are being shifted from one area to another, on foot and over long distances, and since thousands of persons are unable to endure the rigors of these forced marches, the number of deaths is increasing. It is feared that, as the Germans areThe faced with mounting difficulties they will cease all attempts to feed internees who are not useful in their war effort. rapidity of recent military devel opments has the paradoxical effect of rendering problematical the fullest execution of our My dear Mr. Secretary: I am pleased to send you herewith a copy of the report of the War Refugee Board for the period from March 26 to April 7. 1945. Very truly yours, $ William O'Dwyer Executive Director The Honorable, The Secretary of the Treasury. Enclosure. From late reports, it seems clear that the situation of civilian feeding and evacuation programs and at the same time redoubling the importance of measures to bring relief to detainees who otherwise may not receive even the minimum quantities of food necessary to sustain their lives. While news reports from Germany indicate that almost all internal telephone and telegraph comminications are disrupted, so that any general last-minute extermination of large groups of civil detainees may be precluded by lack of centralized 88 control, it is feared that the Nazi program for the extermination of these people may nevertheless be carried out not only by the Nazi hierarchy but by organized or roving bands of terrorists and by individual Geruans. The Board presented this situation to the Department of State with a strong recommendation that serious and immediate consideration be given to the issuance by this Government of a new warning directed to all groups and individuals in Germany and stating that this Government considers such acts as death caused by starvation and neglect the same as murder in cold blood and punishable as war orines. Turkish-German Exchange - Reports of Exchangees As a result of a recently effected Turkish-German exchange, more than 130 Sephardic Jews claiming Turkish nationalit left Lisbon on March 29 en route to Istanbul as a part of a group of 700 Turkish citizens. It was reported that these refugees, all of whom are without documentation, were released from Bergen Belsen and that there were included in the group 32 women recently transferred from Ravensbruck, 2 from Auschwitz, and 5 from Theresienstadt. PRECISION TRADE MARK MICROFILM MICROSTATA ROLL NO -2- I cooperation of the American and British Legations with regard to blookade aspects of replacement, A quantity of Diesel oil was released from Swiss commercial sources for the use of the International Red Cross. Late reports from Representative McClelland outline plane According to information furnished by the refugees, large numbers of internees have been transferred from camps in Poland and there were said to be between 45,000 and 50,000 persons interned at Bergen Belsen and approximately 50,000 at Ravenabrack. of Intercross for parcel distributions In view of the rapidly or the latter 000 are Jews, for the most part Hungarian. worsening condition of detainees in the concentration camp# of Oranienburg, Ravenabrock and Ranburg-Neuengane and in view of the inminent possibility that the Berlin-Labeckmay available The group of 155 goanish Sephardica deported from Athens were reported to be still at Bergen Belsen but were expected to leave soon for Switzerland. Although there are apparently no basic changes since the last reliable reports, conditions in the campa were said to be terrible, and all of the refugees urged that food be sent to the craps. Hanburg area where no trucks are presently to the soon be out off. first efforts are being directed dispatch of supplies and means of transport to this region. Five trucks were scheduled to leave Switzerland on April and for Labeck to unload supplies at Berzen Beleen en route then work out of Labeck distributing to concentrations of RELIEF AND EVACUATION PROJECTS detainees at Ravensbrack and Hambur Neuenganne Board parcels Operations from Switzerland shipped from Goteborg. Intercross is checking on the number of Board parcels already at Labeck and it hopes to be able about Representatives Mann, McClelland, and Ketzki met in Paris to discuss with military authorities certain phases of transportation problems incident to the sending of relief parcels to civilian detainees in Germany and German-held territory and the renoval of such detainees to safety in Switzerland a result of these discussions, a number of truck tires and tubes to distribute all of such parcels in this area within three weeks time. A shipment of some ten tone of relief goods for the women' concentration camp at Ravensbrack is be carried by a small convoy of wood-burning trucks which to to n Swiss commercial concern and which are expected belong to leave soon for Dennark to repatriate Swies citizens there. As I were obtained and arrangements were made for weekly deliveries of gasoline. Representative Katzki is now in Switzerland assisting McClelland in working out the details of the program. Prior to his departure for Paris, Representative McClelland reported from Bern that several large trucks obtained on rental basis in Switzerland were to be available soon to transport relief supplies to civil detainees in the Buchenwald and Vienna areas. A smaller number of trucks, obtained commercially by a private organization with Representative McClelland's assistance, were expected to leave shortly with relief supplies for internees in Bargen Belsen.for(It Theresienstadt was later reported that instead these trucks left on March available tires with that indicated was It Belaen. Bergen more trucks could be rented in Switzerland, and there were prospects of obtaining additional vehicles from other sources. - Probably the greater part of relief shipments by truck will be made to the Muni region and areas east and northeast of that point which it 10 felt may be accessible for a longer be period than campe in the northern areas. Deliveries will made to camps of Dachau, Landaberg-an-Lech, Flossenburg, and thausen near Line, as well AS emergency relief distributions evacuated deportees on the roads. Four trucks with a to 200 kilograme each are scheduled to leave on capacity 12 or of 13 for Dachau, where they will retain to distribute April a number smaller camoe this area parcels to largeof within a few daysinthe balance of edministered from Dechau. in Switzerland of 29 approximately 50 000beBoard parcels rail remaining to the new Intercroes depot shipped are at Ravensburg, expected between the Swies border and Munich. The to Division of Special Assistance of the International Red Cross to receive eleven more trucks, which will be used to is soon these parcels on as rapidly as possible from the depot In addition to truck transportation one railway car carrying 1.170 Board parcel and other relief @UDD) Lies destined for Theresienstadt and two care carrying 1,900 Board parcel as well as other relief materials for the Vienna area were move to accessible camp# near Munich and to the east and northeast. scheduled to go forward about March 24. After his return to Bern, Representative McClelland informed us that Swiss trucks were being equipped with the and tubes which had been secured but that the only the tires trucks available in Switzerland for this purpose were of $ type that burn Diesel oil instead of gasoline. with the by Operations from Sweden Representative McClelland was informed by the International that two railroad care containing 5 400 Board parcels 1 Red each Cross left Goteborg on March 16 for the women's concentration 2" -50 camp at Ravenabrack and that two other cars carrying 4,800 REPORTS ON SURVIVING JEWS Board parcels each left for the Hamburg- -Neuenganne concentra- tion CAME on March 17. We were advised by our Legation in Stookholm that the Intercroes delegate at Gotebore has reported shipments of Board parcels totaling 28 800 to Hamburg-Neuengamme and 12,800 to Ravenebrack Representative Olsen has been authorized to make available to the Swedish Red Cross or the Swediah Y. M. C. A. 40,000 of the parcela remaining at Goteborg for delivery to internees at Bergen According to reports of representatives of a private organization the present Jewish population of Budapeat is estimated at approximately 150,000 and thousands are refrom deportation labor, and concentration camps. appearing still in hiding in Bratislava who are There are 2,000 Jaws Red Cross representative; being aided by the International About the food situation there 16 anid to be fairly good. is Belsen. 1,600 Jews in Zagreb, where the situation in general food described as fairly good, with stocks of olothing and Greece available, are also being assisted. There remain in 8,500 Jews, approximately 10% of the pre-war Jewish According to the report of a private organization representative who recently returned to London from Sweden, a Swediah Red Cross official has succeeded in obtaining from the Germans approval for the establishment near Weimar of a special camp for Danish and Norwegian civilian internees to be under the protection and administration ofGermans the Swedish The suggestion was made that the Cross. Red similar establishment the for proposal with some of that country. or this number, 4,500 are in Athens, population including some 1,500 Salonika Jews. SPANISH REPUBLICAN REFUGEES be of recently learned from our Enbassy in Lisbon that the a approached camps for Jews, and it was indicated that the Swedish Government and the Swedish Red Cross are willing to cooperate in We situation of Spanish Republican refugees in have Portugal been supporting has become more precarious. Private agencies arrest by Portuguese such plan. police these refugees and deportation in hiding to to imprisonment prevent their and possible execution of a Bpain. In recent weeks however, the hiding places arrest EVACUATIONS FROM SWITZERLAND I number in of them have been of discovered resulting in the danger of many them and in increasing Recent information from military authorities indicated that the earliest possible date for moving the two groups of and imprisonment In a anble to Ambassador Winant and Mr. Harrito the others. Board called the attention of the Intergovernmental this Bergen Belsen and Theresienstadt refugees from Switzerland to UNREA camps was April 15. According to a late cable from son the the nlight of these refugees and strongly Consittee to that the IOC take over the maintenance of Paris, however, it is planned to effect the evacuation of these refugees to Philippeville and southern Italy in two groups and April 30 has been set as the preliminary target date for the first half. Arrangements for their transports tion from the Swiss border will be made by military authorities, who are now arranging feeding and shelter accomoda tions for the refugees while in France. The United Nations Relief and Rehabilitation Administration has suggested that its Versaillee mission offer military authorities supplementary medical and welfare personnel for the care of the refugees en route. recommended of its over-all program on the Iberian Peninsula group as a and part that it arrange for the speedy evacuation of the refugees in question to places of safety. INTERGOVERNING COMMITTEE reported by Mr. Harrison, Representative that of this It was on the Intergovernment Committee as # and Government between the French authorities result the Assistant of discussions Director of the IGC. the Committee Affairs has that been the the French Ministry of Foreign signed A report from Bern informed us that six of the exchangees from Bergen Belaen who had to be hospitalized in Switzerland in have now recovered sufficiently to be able to travel and Representative McClelland will endeavor to include then advised by having ratified the Convention of French Government, February 10, 1938, concerning the status at Geneva on from Germany and having decided to adhere refugees coming protocol extending the provisions the to the additional from Austria, wishes ofthe the convoy of refugees to go to Philippeville. It is contemplated that the remaining three exchangees who were 111 will also be transferred to Philippeville if they are physically Convention to refugees coming officially within able to undertake the journey when the refugees leave Switzer- Intergovernmental framework of its Committee general to sandate assume the protection The French of the coming from Jermany and Austria. accepts land. 0 refugees Foreign office further stated that If the Connittee 2" 6- for and C the official mission, the French Government is prepared to take measures by decree to enable the Committee's representative in France to exercise the same powers ASinwere Francethe the been League Austrian protection the High legal refugees of Commissioner Nansen and political refugees. formerly protection Mr. conferred with Harrison of respect Gernan upon has to authorized by this Government to vote favorably on acceptance of the proposals of the French Government at the meeting of the Executive Connittee called for April 11 to consider the French Government's invitation. In view of the urgent need for funds to proceed with a number of action programs now in readiness, end asthat a to recommendation avoid IGC this andGovernment 1945 earlier reconsendations for this purpose were submitted to the Bureau of the Budget Mr. Harrison was informed of this notion and advised that every effort 18 being made to secure consideration and final action before the Executive Committee meeting scheduled for April 11. conformity result administrative further of Mr. with delay Harrison's operational commitments, strong expenditures contribute appropriate to in : William ODozer William O'Dwyer Executive Director PPRECISION TRADE MARK MES-1637 1070-1749 Barn London Distribution of true reading only by special arrangement. (SECRET #) PLAIN Dated April 20, 1945 Dated April 20, 1945 Itec'd 5:57 p.m. Rec'd 2:05 p.m. Secretary of State, Secretary of State teachington. Washington 2315, April 20, a p.m. 4054, Twentieth FOR YOUR PROM ECCLELIAID Regarding possible relief to urmaniana in Germany ICRC has now informed us that (Department's 1350 IRR's LEAL April 5) committee possesses no utilisable information whatever concerning Arnerian refugees of POIS in Germany. FOLLOWING LESSAGE FROM EMERSON COMETTIC ON REPUBLICS LONDON FOR EARL HARILISON AMERICAN REPRESENTATIVE INTERO VERIMENTAL COMMITTEE OF REFUGENS Message begins. is have now received approval of British Government to proposals relating to Spain and There are apparently Arueniana among Russian POIS but their number and location are unknown since Germand have never as general rule supplied ICHC with date on Soviet POINS. There are similarly doubtless Arsanian forced lacorers deported from Soviet Union to Jenuar occupied regions but any information concerning their or whereavouts are also lacking. TORO has never, as you know, undertaken relief programs for forced workers in Germany. Portugal contained in my memorandum of the 16th February 1945. No conditions are attached to the approval but hope is expressed first that we should try to persuade the Spanish and Portaguese Governments to contribute to the cost infolved and second having regard to high cost of living in Spain and difficult currency problem in Portugal. High priority should be given in due course to renoval and resettlement of the refugees in the Iberian Peninsular. No shall be grateful if you can expedite approval of Government of United States. Any analy Armentan civil detained who happens to be Message ends. in concentration camp accessible to our - deliveries MINANT will benefit from them exactly as do insates of others nationalities. RR HARRISON JIS SPRECISION TRADE MARK MICROSTAT) MICROFILM ROLL NO. 84 Barn EX-1588 PLAIN This telegram must be paraphrased before being Dated April 20, 1945 communicated to anyone Rec'd 11:10 p.m. other than Government Lisben Dated April 20. 1945 Agency. (UNTRICTED) Rec'd 10:25 P.S. Secretary of State, Washington. Secretary of State, 2299, April 20, 3 p.m. Washington WILL FROM MOCLELLAND Department's 1205, NEB'S 476, March 24. 834, Twentieth Plans are shaping up satisfactorily now for VK 389 JDC 221 FOR LEAVITY FROM TRONS. evacuation special groups of Jewish refugees from Bargen Helsen and the Resienstadt from Switserland to UNICIAL reception campa in North Africa and perhaps Italy. Dries authorities are making all preliminary preparation including formation of conveys, supplying railroad care, medical personnel, etc. and move is being courdinated with SHARK 0-4, G-5 and UNICILLA with whom this question was thoroughly discussed in Paris at end of March. Teur 166. Gottfarb insists stockpiles owned by American Red Cross under supervision of Mr. Khrenhelt of International Red Cress who probably tesk ever stock. piles formally. Congress nereals were Keacher and turned ever after Congress aggitiations is America and 10cal Congress paid nothing. Certain quantities clothing is First group of approximately 1100 personal is schedules leave Geneva on or about May 2 for Marseille. Second group of similar sise should depart aid-day. Geteborg's free part belenging to American Red Cross. It may be necessary and third, Suggest New York negotiaties with American Red Gress if these special groups are being evacuated with exception of Dutch nationals. They are mainly Sungarians, we could borrey feed and elething until Joint can get later. Refugees of all nationalities represent within Runardans, Caeche, Tugoslavs, Poles and forner Germane material to Sweden. from the Resignstadt. BARUCH will keep you informed of progress this movement. 13 MATURISON KDA PLAIN Lisben 0 Dated April 20, 1945 Rec's 10:12 D.R. Hadrid RS-1836 This telegram must be paraphrased before being Secretary of State communicated to anyone other than a Government Washington Date April 20, 1945 Itec'd 9:14 p.m. Agency. (RESTRICTED) 833, Twentieth WEB 390, JDC 222. FOR LEAVITY FROM THORE BYCHOWSKI Secretary of State Association Pelish Jews in Syndan received cable Hashington dated Nescow tweIfth. Necessary help for saved is 835, April 20, noon laber Came elething. shees, feed, teels for tailers. yollowing non-preference quota numbers alloted for theemakers, joiners, keymakers. Send - lists persons as Sweden, Xingland, Central Committee of Felish Jeve, Fareav. Seereka 31. Dr. Kail Bennerstein Gettfash attempted contact issuezatein several times but never refugee children for month of March 1945 returned unused. Figures represent 25% of block alloted Department's inclusive. Derman 4642-4791 Polish 1794-1831; Belgian 262-269; received reply. Perhaps you should consider authoristing Gattfarh give Bycheveki meney establish search service for us. Please advise. Netherlands 503-522, Caechoslovakia 589-603; French 529-5481 Mangarian 348,385. AMMOUR BARUCE JT JUS RECISION TRADE MARK ROLL NO MICROSTATA REG. U.S. PAT. OFF MICROFILM MS-1659 Lisbon reading only by special Dated April 20, 1945 Distribution of true arrangement. (SECRET #) Rec'd 3 p.m. Secretary of State, Teachington. 835, April 20, 11 a.m. FOR LEAVITT FROM THORE. Anticipate British stealer will take within few days 253 Tangier's certificate holders. (This is mt 388 JDC 220). $120 average cost passage. Regarding method payment, instructions will follow. BARUCH us PRECISION MICROSTATA REG.U.S.PAT.ORF MICROFILM ROLL NO. CARLA TO ASPICAN GRASSY, LESSON, PRO F TAX HOARD Please deliver the following message to Birole Trobe from M. A. Leavitt, Merican Jewish Joint Distribution Committee: URITE FOR SOMANTS AWAITING RECOMMENDATIO NS SAT AD EST. out THOUGHTS ART 1. SLIMINATE POLAND HALF souths BUDGET VIIN SUBSTANTIAL MALANCE AVAILABLE WHICH WILL TALK SATISAL BONTHS SCHAUGT 4. LIMINATY SUSTRATION YEST BALANCE LAST THA WHICH MOOPARLY CARTELLARD AND 200,000 PROVIDED THIS YEAR ON UNLESSANDING HILL PROJECTS All ARISS 3. YOUTH SUGGESTION RESUCTION PALKAN ATHROPRIATICKS section PURCHASES VIDE as REGULAR MONTHLY SOTESLAN TO: TEST COUNTRYSES ADDISS WEAT - POSSIBLE 53135 102/ITTAICES 1201 3800.000 APPROVED APRIL as - 53132 7050 TO ARSOUN ARCHASES PLEASE AUTHOR RESIDENCE POSSESS THE IMPORTANT a ALL POSSIBILITIES SA INGS CURRENT ADOUTS. YOR YOU' INPORTATION MADE INITIAL GRANT REPUCKES VANILA 110,000. unjusts THIS IS DATE LIGHT CAUTE no. 175 4:40 Datte Airil 20. 1945 PRECISION MARK MICROST NOT TO BE RETRANSMITTED COPY NO. SECRET OPTEL NO. 126 Information received up to 10 A.M. 20th April, 1945. NAVAL Mediterranean. 16th/17th (Night). Coastal forces sank two. possibly three, ships in convoy in Gulf of Venice, while Yugoslav coastal craft and an N.T.B. sank an F-Lighter and probably an E-boat same area. MTB 697 mined and sunk south of Fiume. 1. 2. Anti-Submarine Operations. 19th. U.S. Destroyer made promising attack on U-boat S.E. Halifax. Aircraft attacked 4 U-boats and an Escort vessel in the Skagerrak when two probably sunk and a third and the Escort vessel damaged. MILITARY 3. Western Front. (Southern "ector): 1st French Army and 7th U.S. Army continued make progress with latter capturing Ansback and now engaged clearing Nuremberg where heavy fighting taking place. (Central Sector): Patrols of 3rd U.S. Army have crossed Czeck front- 1er East of Hof. 1st U.S. Army has partially cleared Leipzig and also mopped up area between this city and River Mulde. Considerable Germar forces have also been cut off in Hartz mountains by junction 1st and 9th U.S. Armies near Bernsburg. (Northern Sector): U.K. arnour reported on River Elbe at Lauenburg and within 5 miles Harburg while further vest 1st Canadian Corps report southern edge of Zuider Zee between Kampen and Harderwijk clear of enemy. 4. Eastern Front. (Central Sector) Germans report three days violent fighting East Berlin, admitting fighting now taking place 20 miles west of Oder, while further south they report Russian spear= heads as having reached River Spree between Cottbus and Bautzen. Russians describe these operations as reconnaissinces in force which during last three days have developed into battles sining at the capture and widening of bridgeheads over Oder and Sniese. They state bridgehead over Oder. west of Kustrin widened while another made to south over Noisse, S.E. of Cottbus. (Southern Sector): Further advances made in areas S.S. (Bruno?) and North Vienna. 5. Italy On 8th Army Sector U.K. formations have advanced 4 mile while East of Bologna British troops have advanced 1 to 2 miles against determined resistance. On 5th Army sector advances of up to along West shore Lake Conacchio and not mopping up Porto Maggiore 4 miles made on 16 mile front S.W. Bologna. 6. Burna. (Central Sector): Villages of Singu, Chauk and Sale on Irrawaddy occupied without opposition and much equipment taken. S.E. of this armoured column advancing westwards from Taungdwingyi now within 3 miles of Irrawaddy while further East another aroured column had advanced 12 miles south Shwemyo. AIR 7. Western Front: 19th Bonber Command Lancasters 47 bombed through cloud railway transformer station at Munich (189 tons) while further escorted Lancasters 33 dropped 204 tons (including six 12,000 pounds) on three batteries Heligoland when some direct hits or near nisses obtained. U.S. escorted heavy bombers 589 (outstanding bombers 5 and fighters 5) dropped 1359 tons visually on five railway targets in area Leiprig/Prague/Dresden, inflicting enemy casualties 18:015 11 combat. SHAEF (Air) - Medium bombers 475 dropped 681 tons on thre railway centres Southern Germany and 105 tons on Dunkirk, while 1847 fighters and fighter bonbers (missing 10) operated all sectors destro ing 500 M.T. and inflicting enemy casualties 17:0:5 in combat and 81:8:66 on ground. Halifaxes attacked shipping in Skagerrak and Kattegat when hits obtained on two 3,500 ton ships. 3. Mediterranean. 17th/18th (Night). Liberators dropped 137 tons on communications Porto Maggiore. 18th. Escorted U.S. heavy bombers 473 dropped 974 tons on targets Bologna area. Bombers 371 attacked railway bridges Austria and supported both armies while fighters and fighter bombers 1133 (missing 11) operated battle areas. & CPRECISTON TRADE MARK -2- April 21, 1945 4:05 D.M. (Dr. O'Connell and Mr. Luxford enter the conference.) H.M.JR: Hanneran and in today, and in the talk he had with Barry, Barry told him he would positively vote for Bretton Goods. GROUP Present: Mr. D. . Bell Mr. Bartelt 12. WITE: Did he any how recent that talk was? Hr. White Vr. Ganble Mr. Hans Mr. blough Mr. Pehle H.M.JR: No. but I couldn't quite understand-you can find out Monday. e talked some and Joe Numan talked some. Mr. C. S. Bell N.H.JH: I will see Joe Numan. Mr. DuBois Mr. Coe Mr. Fussell Mrs. Klotz And there is a man that sounded like Lauchlin, who is lawyer. 13. LUXFORD: President of a bank in New York. KR. D. it. BELL: That is the starm the President approved before he died, and after he died they decided to out this in quotations and out his more on it. That will be on sale wednesday (indicating). MR. C. S. BELL: I thought you might want to see theto flag showing the number of servicement that have cone wer and those we have lost. No are roing to hasp it un in the reception room. All the boys have seen It outside. We will keep that un and just change this figure. H.M.JR: I see. That is a lot. I have about twenty= five minutes. one. MR. O'CONNELL: 1 am not sure that he is the same H.M.JR: He represents some bankers, but he said that between him and Joe Nunan Barry unequivocally promised to vote for Brotton Woods. MR. O*CONNELL: Good. (Secretary leaves the conference tennorarily.) H.M.JR: That Was Fred Smith. there is Fussell? Gentlemen, what 1 would like to say is this: Where is White? I told Smith anything he wanted in doing this article about me to you would be glad to cooperate. Draw Krs. Klots' attention that. VR. WHITE: Right here. H.M.JR: Let's start on Bretton Goods. This man Hannegan was in here today, and he tells ne that in the talk he had with Barry and-- Yell, anyway, get in touch with Joe Nunan, will you? MR. O'CONNELL: Yes. -4 -3C H.M.JR: And not the story straight. But Hannegan he had & private talk with this fellow, and between said the two of them it was understood that It TOLD a deal that he would vote for Bretton Noods. Mr. O'CONNELL: Yes. H.M.JH: 1 don't know any more, but there ass some kind of a deal. 13. O'CORKELL: O.K. H.M.JR: But no if's, and's and but's. Now, 1 called Crowley to follow up on what he had done about Congressun man Hull because 1 hadn't heard from him. and this in the answer. He is out of town, but Crowley had already smoken with Congressman Hull about some amendments. Mr. Dull will 70 alone. The Congressman seems reasonably friendly about the matter. according to Crowley, so 1 think somebody should call on Congressnet Hull. C 12. (*CONTELL: All right. E.M.JR: I will be away not more than Monday or Tuesday at the nost. And 0.0 I understand it for the we time and it was pretty nearly the first point in your memo, Larry, that is, the Council. we didn't discuss anything in detail, but the over-all Council, the CED proposal, and that is about all. that WBS the other, Luxford? MR. LUXFORD: That is all he mentioned. MR. O*CONVELL: Our understanding is we will talk to Welcott arain when he has a document from the bankers. we are riving hin nothing. K.I.J.: You are civing him nothing. and I haven't arreed to anything. VR. O'CONNELL: Oh. yes. H.N.JR: Let's understand We keet the bankers--if the bankers want to talk with Colcott and Nolcott wants to make . deal. then I CBC find out what it is and we can to to Spence and talk it over with him. MR. D. 7. BELL: That is all right with no. H.M.JR: But 1 want to be enchatic. being there will be no talks with the bankers. Do 12. LUXFORD: what olcott is seeking ultimately to do is get something he can procose that everybody will MR. WHITE: But Mr. *Conneil and Mr. Luxford had . conversation with-- H.M.JH: All right, but I haven't agreed to anything yet. Nothing for the bankers, see? You know, he is our main banker fellow, Mr. Banker Luxford. He sits there, and understand that? R. O'CONNELL: Colcott-MR. WHITE: this afternoon. agree to. be will be Wearing 0 vest and susts soon. 13. LUXFORD: Don't I look like one? JR. O'CCNNELL: is Just came from there. H.M.JR: Shall we associate with him? (Laughter) E.M.JR: Lot's have the facts. MR. LUXFORD: Well, anyway, the main proponent now-- MR. O'CONNELL: Mr. Wolcott is getting from Burgess a written statement of the bankers' position, at which time are going to talk amin to Holcott, not with the bankers. we in outlined what he understood the bankers' position was, JR. D. 7. BELL: I think going through Wolcott is all right. 1 don't think we ought to be discourteous to the bankers. After all, we have been discussing the matter 105 -6H.M.JR: Now, White, I am going to have to read your stuff on the plane, see? with them, and some place alone the line I think we ourht to sit down with them. MR. WITE: All right. Yes, but when the time cones it, to see. sit down--I have H.M.JR: reached the point that I want to do 13. D. N. BELL: That is right. (Mrs. Klotz enters the conference.) 12. WHITE: The boys have come back with the latest copy of the reparations thing and it is much better than we had hoped for, so we won't be in any difficulty on that. this H.M.JH: Luxford, But in the no meantime talks, just while so I we an understand away fine. and each H.M.JR: So such happened today that 1 don't know how is other. roing And on, 1 think the thing is coming alon I can net it all over, but I had 8 very good talk with McCloy and what 1 are saying here is to stay in the While white 10 gone we could have--Joe is here and Luxford is here. here, if you please, and that goes for ne as well as room the rest of you. I don't want to have some of these people tell you, you know, about so and so--one of your men told me, and 1 said, No, I hope to hear about it tonight. MR. WHITE: 1 sent you a meno. H.M.JH: I read it. Luxford will try to net into White's shoes. C MR. WHITE: You are looking at the right guy. (Laughter) H.M.JR: And General Eisenhower and General Bedell IR. LUXFORD: I will try, but 1 won't steal them, Smith were entirely satisfied with the nemo of the 23rd, see. And for three nights he talked to them and told Harry. them just what had happened. and he was there one week H.M.JR: But the relationship has been all right. MR. WHITE: If you don't, it is because they are too advance of General Clay. lie had a little trouble celling in Clay because some of the other boys thought that was a VR. O'CONNELL: There will be no trouble. to say the picture Clay. he paints of Germany quarter. finishyou even Needless is worse than read about in the and 1 a job they night want, but he did sell then didn't NT conversation, although we had an hour small. disormanization. The cities in out H.M.JR: Is that all right? many decayed teeth. He said there was Doolittle to do any more, there were no strategic for complete like General so papers Germany nothing as stand to a MR. O' CONNELL: Perfectly. targets just use the planes to andthe slave lator from the front to homes, prisoners transport and same with theleft, Belgians. That istheir what French H.M.JR: There is a perfectly happy relationship now. They also asseed to around here. people un forward so MR. O'CONNELL: Fine. 1 get along fine with Luxford. Russian Doolittle made liberated is doing when a keep General juncture the was they could shove them across the Russian line into the hands of the Hussians and not have this terrific group traveling first back and then forward,and save on Luxford? (Laughter) Anybody who Goods isn't from happy the H.M.JR: representation on the Hill on Bretton on the Treasury, speak up. 0 the food. which makes sense. Baruch unsumbellevably good. TRADE MICROSTAT MARK C He net with the Var Cabinet. and they maked him about the German thing, where did he stand on the Morrenthau Plan, and he practically told them Morrenthau was a missy, and on his return he ass much streamer for the decentrolisati of Germany than when he left. And in the POOUS I mentioned that Clayton had 5 chance of heart after President Roosevelt's death, and he said, "I will cut his heart out if he doesn't after I net through with him. He ither is right on this behave himself, and he won't be able to stay around Weshington German thing or he will leave town. 18. PERLE: Is this McCley or Baruch? Baruch. He said, "I will cut his heart out. That is all have not to live for now is to see that Germany is deindustrialized and that it's done the right way, and I non' let anybody net in my way. and I think he meant it. he not so emotional he had tears in his eyes. I have never heard It can talk as strongly no he did. And he is roins to rive me stuff next week when he cones down. He told President Truman that he is very much bothered that the are so slow in moving. For heaven's sake, make un your mind what you are roing to do." he said. "There is no plan around here. NO. WATTE: Has he discussed his views with the President since his return? H.M.JH: Yes, he had a long talk with him. MR. WHITE: You don't know whether he not any favorable response? H.M. I couldn't tell, but he said he asked Stettinius to leave the room so he could talk frankly to the President. (Laughter) He had certain things he wanted to tell the President very confidentially so he asked Stettinius to leave the room. He told me that, and 1 don't like to think he is kidding no, but he certainly went way out of his way to convince ne he wants to do everything to be helpful. Ee said the Anglish still haven't made up their ROLL NO. mind on account of the fear of Russis, which is more important, to build Germany un or not the business they might get by deindustrialization. He said England still hasn't crossed that bridre. which makes sense from what we know. He wants to talk to no about that. lie said, "They still haven't made un their minis. He said, I painted a beautiful picture of recovery and I saw the labor unions, and so forth, and so on," and he has the whole story about the sterling debt. Somebody suggested they cancel it. He said Beaverbrook struck the table and said, "The British will never PO back on their debt. Not more than once in a century: The talk w1 th ecloy was good, and the talk wi th Hannegan this morning was very rood. The talk with Baruch was good. Konnet's only WORRY was, could I see Pleven? lie gets in Klotz. Sunday of Light, and he La roine to net in contact with Mrs. I told him that if he were only going to be here Monday after- noon, I didn't think it would be worth his while, and If it had anything to do with the war effort, I would come back. Ee said it had nothing to do with the arr effort and it could walt. He rave the an Invitation to come to Paris in May to talk to the French. He thought that it would be very good for their morale to carry on the Roosevelt--or whatever you call it--line of thought. He said it would be very lovely. lie didn't want Pleven to invite me unless I would say yes or no in advance, and I said it would not be convenient, but I would talk it over without coming to an understanding in advance, and he laughed. Le is very discouraged, very downin-the-mouth. lie said eurone is absolutely downeast over President Roosevelt's death. McCloy attended the service at St. Paul's and he said that Churchill broke down and cried like a baby. He said the Kinn and there, too. He said that he walked down the streets France the people would just stop him and talk to him about President Roosevelt. They think over there It is Just unbellevable. They are sorrowful all over Europe and feel they have lost their greatest friend. Be said the services st St. Paul's were something he will never forget, and 1 think that lieCloy feels it very deeply, WAS able to tell him that just shortly before the President died he had said that since in and he had--the President had set McCloy right on France that he, DeGaulle, and the President had great confidence in McCioy, and he felt McCley had been very loyal to the President. And naturally that pleased McCloy. McCloy wants to work with us, and he wants to not this thing cleaned up. I didn't get much in about Clay because we didn't have time. MARK MICROSTATI MICROFILM F-1 ROLL NO F-2 10 C the whole problem is, and is a very much stronger man than when we went over, and his brain today was absolutely Mr. DuBOIS: are you going to net rid of Pleven on crystal clear, no fuddy duddy business today. It's very encouraging. 1 didn't get down to Admiral Leahy. this German things I don't know where he stands. H.M.JR: 1 did, and with Patterson. I have been fairly accurate. It's Patterson--shere is Frank Coei Now listen, Frank. Vh yes, I told Dear Acheson I couldn't see him today because I have seen nothing tut fellow travelers on their MRS. KLOTE: Baruch wouldn't miss anything. H.M.JR: He was clear today. Now, I am just trying to rive you fellows a little accounting. My advice to Mr. John Pehle is that on the first of May you take a couple of neezs vacation. Get the stuff out of your system. Get a little health. You never had a chance to recover from your brother and everything. You have had a bad time. You have done a swell job, so get a little rest, 4 little sunshine, and cone back and me'll work the hell out of you! way to San Francisco. when you go over there what you want from the war and State Departments is a clan to defeat Japan. Now, when General aedemeyer was here--] got it from Leahy at lunch today--he gave the WHP Department a plan on how many Divisions they want; so they had Wedemeyer while he was here work that out, according to Admiral Leahy. when you go over there what I want from the War Department and the State Department, is plan to defeat Japan, see, and then after that we will do it the way we did my bootleg story--give then e half a MH. PERLE: Thank you very much. I'll do it, too. H.M.JRI I mould do that. thousand dollars now and give then the other half then they make good. Mr. COE: There is just one part on that, John Carter Vincent, whom 1 was going with, is in San Francisco. H.M.JH: Get somebody else, and HP. sell can call up the Acting Secretary of State and say ve rant to get started on this thing,sa President Trunan has asked to please have something on China on his desk. 0 MIL PERLE: Thank you. H.M.JR: There is one fellow over there, an economist you have. ze This is economic. There's will Clayton. He has been designated-I*11 do it myself. MR. PEALE: Silvermaster. H.M.JR: I have heard good things about him, and no may vant him over here. MR. PERLE: He is needed over there, too. I am sorry if I an talking emphatically, but I as fighting time. H.M. Well, as Joan said, "Morgenthau first." So, MR. WHITE: Does Lenhy have any views on the subject, Mr. Secretary? H.M.JR: No, but I got this feeling which is very important, and I will get more of it--1 got the feeling from Baruch that he realizes the importance of being friendly with kussis. I seeing Baruch next week. talk to Frank Coe about it. I have a special assignment in mind for him anyway, so don't give hin a job until he comes here. I have a special assignment in mind for him. plan. H.M.Jh: Now, I'll have to read that stuff on the an feel he is right on Germany and Massia and feels what I He made a better impression than he has ever made. MR. WHITE: There is nothing important, nothing that can' wait. 109 F-4 - 12 F-3 110 MR. WHITE: That really is first, but I thought I 11 would put it second so it wouldn't sound so bad. Things are going along very smoothly here on anything I have, together with Bretton Woods. H.M.JHI I just thought 1 would give you people a report. I'll be back--If the teletype system is working-- H.M.Jhs I an listening. I want to leave so I can see Mrs. Korgenthau tonight. He said if I got there by ten--the most I'll be gone is Monday and Tuesday. I wrote a letter to President Truman saying that I would like on my return to talk to him about the in. hafTE: And so, If you cel--when you want me 1 can come back within s day. I can fly back, and 1 an just hoping that you non' want me for some time. economic future of Germany. Do you have anything, Charles? H.M.Ja: For how long, huh? How long? 104. C.S. BELL: I can hold up everything until MR. WHITE: Oh, I don't know, two or three weeks. Wednesday. H.N.Jh You're crazy. He's crazy. I thought you said three days. H.M.JH: Do that. who has something they want me to sign. His. KLOTE: I do. HR. WHITE: Three days? 0 MR. LUXFORD: It's neeks instead of days. H.M.JK: John, will you help me again . little bit a t) this refugee business? MR. PEHLE: Yes, I'll watch that. H.M.JRI Miss Hodel is outside. She's coming in now. Do you mind staying? Mr. PERLE: Not in the least. I'd be delighted to. H.M.JRI Harry, how long are you going to be gone? MR. WHITE: Just as long as I possibly can. (Laughter) Mrs. KLOTE: That's being honest. That's wonderfult Mr. WHITE: Between the telegraph system and telephone and ticker system, I are not hoping too much, but 1 as going to stay as long as I can for several reasons, Mr. Secretary. I can make very good use of the time there. I as interested on.There areimportant somethings going in what is going on that do affect us, and I'll enjoy being there. MR. D.N. BELL: You should have put that first. H.M.JR: Well, I'll be very honest, Harry. Don't misunderstand me. If it's " question of my doing your work, I an not going to do it. MR. WHITE: I understand that and I hoped you wouldn't. It's a question of my doing it or Mr. Coe or Mr. Luxford or Mr. O'Connell. I wouldn't like you to do it. I mean, if they are doing satisfactorily, and 1 an sure they are-- H.M.JR: If it's going satisfactorily but if it means an I going to pick it up and do it-RN WHITE: I know you will let me stay as long as Itocan, and when you feel you want me back, I'll be glad come. H.M. That's fair enough, and I'll give you all the time I can. I don't know why you want to stay so long. PRECISION MICROSTAT TRADE MARK MICROFILM F-5 13 14 C HR. WHITE: I am not running that conference. I am more or less an observer. H.M.JR A meekly bulletin. MR. WHITE: And there are a number of--sell, never The reports seren't too good, do you agree? A.M.JU: well, we understand. of it. Mis. O*CONNELL: I sent you an answer. We are doing that right away. The Commissioner and-- H.M.Jh: 1 know. mind. Who WHITE: I mon't waste all of my time, just some H.M.F.: I know, you never do. How, Ted? WIL CAMBLE: I have nothing that can't wait. H.M.JH: what else is there? I want to break the story soon on some of that law enforcement stuff. MR. O* CONNELL: Well-- N.R. O' CONSELL: Yes, but it's hard to-- H.M.JR: There's gold in them ther hills, though, and you know it's two or three neeks since I asked them to check on farmers. You know he told the while you were gone that they went out on an R.F.D. route and found one-third of the farmers were not paying any income tax, and I haven't had any more reports. VR. O'CONNELL I didn't even get that--two-thirds? H.M.JH: In the one route they found one-third of the farmers were not paying any income tax. KR. O GONNEIL: I didn't know that. H.M.Jh: Put some heat on. all. H.M.JH: Start in South Dakota or somewhere. This His D* CONNELL: We'll do all T.C can. fellow-- H.M.JK: Those reports weren't too good. I read them MR. O'CONNELL: bushfield, that's where you should have started. You started in New York. MR. O*CONNELL: They'11 get better. H.M.JR: well-- H.M.JR: You may need some new blood there. MR. O'CONNELL: It was a Republican neighborhood. MR. O*CONNELL: That's pretty hard. New blood is hard to find. H.M.JR: What about a blood transfusion or something? Those reports weren't too hot. MR. O'CONNELL: They were studies. H.M.JRI Did you get my suggestion? 113 H.M.JR: I picked a Republican neighborhood. MR. WHITE: we couldn't get Mr. Green. When you come back you'll have to get him. He is too much of & prima donns. H.M.JR: Harry, don't misunderstand what I said. I an glad you are going. I wish you a good trip and I don't mean a pleasure trip either. RECISION TRADE MARK MICROSTATI REG.U.S.PAT.OFF MICROFILM ROLL NO. April 21. 1945 2:53 P.M. - 15 HMJr: Mr. Robert MR. WHITE: I sant to make it as much a pleasure trip as 1 can. That's one reason I am going. H.M.JR: And If I go to France in May--it's too bad Joe never wrote up the report on London. (Laughter) Patterson: Hello. HMJr: Bob? P: Yes, sir, HMJr: McCloy - in the first place, may I thank you for all the things you have done to make Elinor 11. WHITE: He has from now to May to do it. comfortable R.M.Jan Good bye, Harry. I haven't done half enough. P: Mr. COE: can you take any more reading matter? These are what I promised on China. E.M.JR: what we want is a plan from War. 1 cien't get Clayton. 5%rr P: HMJr: MR. COE: I'll get him. I'll take care of it. H.M.JR: Where are Fehle and Vias hodel? Hello, Well, what you have done I'- most grateful for. Yes. Glad to do it. Thank you, Bob. McCloy just called me and Mr. Stimson anid you'd like to --- have you handle this Japanese -- Chinese thing. A11 right. No told not McCloy told no. P: HMJr: Now what time Monday could Frank Coe - you know Frenk Coat P: HMJr: Yes. .... come over and sorts bring you un to date on 1.7 P: Any time Monday. A good time would be eleven o' clock. HMJrs He'11 come over nt 11 o' clock Monday. P: I'll be gind to see him. MMJr: Thank you. Then we can sort of get started. P: Then ve oan talk about it when you return. HMJr: That's right. P: Thank you, Henry. HMJr: Thank you. P: Good bye. -2April 21. 1945 2:57 P. M. 117 HMJr: HMJr: Mr. Stimson wants Bob Patterson to handle this thing with China, see? C: Mr. Coe: oh, he does? MMJr: HMJr: Yeah. 0: Yeah. Yell, I think-- you go over there Monday and see Patterson with John Carter Vincent. Yes. and bring him up to date, and talk about it. All right. We'll have the first session with Pe1 Monday morning. C: HMJr: Well, that's good. He in . good one. Yeah, I sicked him. You are to go over there at 11 'clock Monday morning and see him. C: HMJr: C: HMJr: Go over and see him at 11 Monday. Yeah. All right. And my suggestion 1. that you take John Carter Vincent with you. C: HMJr: C: And talk over the situation. And talk it over with Patterson. All right, I'11 do that. HMJr: Now, I don't know whether you vant to see this fellow Pat before that or not. C: I think perhape - no. : think we can't very well. HMJr: You think you can't. C: Well we could early Monday morning. HKJr: C: Why couldn't you see him early Monday morning? All right. He hasn't rung. How did you leave him? An I supposed to not in touch with him? HMJr: 0: HMJr C: Well, I would in view of the thing the way it --All right, all right. Now what are you coming back? Tuesday or Wednesday. Tuesday - well, I was asking because you wanted to have the preliminaries over by the time you got back. () HMJr: Right. 0: Thank you. MICROFILM MICROSTATE PRECISION ROLL NO April 21, 1945 3:50 P.M. 119 O I'd like to talk to you. HMJr:(cont.) Hello. A: FMJr: Fine I'd love to do it, Henry. Operator: Mr. Bill will not be at his office any more this afternoon. Would you like for de to call his HMJr: Well, I know what President Truman wants me to Operator: MNJr: Yes. At All right. I have Mr. Acheson. All right. HMJr: Operator: Go ahead. HMJr: Hello. Dean? Mr. Dear Acheson: Yes, Henry. HMJr: I've been thinking of you but all of these follow travelers on their way to San Francisco... Yes. A: HMJr: Fellow-trevelers. Did you get that's A: (Laughs) I do. They are not fellow-travelers of HMJr: Well, they're not of sind, but they have been dropping in, and I'm leaving this afternoon to 50 to one Elinor. Yes. A: HMJr: HMJr: You'11 be her?? HMJr: A: HMJr: oh, I'11 be here. Ed told me that he had . talk with you after the Cabinet Yeah. and worked out with you that will van going to handle certain things directly with you, and I think that will speed things up. ..... Well, I hope 80. but I'd just like to have - oh, as one friend to the other off the government payroll affairs' things bothers no like hell. And, you'11 be interested -- Mr. Hannegan was in and assured THE very confidentially that Berry has promised him that he will vote for Bretton Woods. Ch. well, that's very good. A: HMJr: Definitely. No if, and, or but-- A: Yes. EMJr: So that's good. Yes. HMJr: Dean, again I can't tall you how such I appreciate --at Ombinet again I brought up the solendic cooperation that you have been giving us - yesterday. Well, that's very kind of you. Ed told ne that you A: HKJr: meal together, and I'11 be bock Tueeday or Wednesday. I shall be delighted to do 11. A: HMJr: When I come back I'll net you if ve can't have 8 A: I'm delighted to hear that. But what we are going to do on some of these foreign Yes. A: A: mine because I'm going to stay here. do here. I'm all right. He has been very re- assuring as for BE I'm concerned. residence? A: had said that, and I appreciate it very much. will I feel it and I wanted President Truman to know it. When I know I'm coning back, I'11 have the office get in touch with you. Fine. I will be at your disposal whenever you want to see me. HMJr: A: FMJr: Thank you 80 much. All right, Henry. Give our love to Elinor. I'll do that. Thank you. MICROFILM MICROSTATE PRECISION ROLL NO. -2April 21, 1945 The two and one-half, '57-'72--that market has been very strong since we announced that the banks could not buy anything in the Seventh War Loan excent the one and 4:00 p.m. one-half's, so we rave then authority to sell five million, and they have not ten million on each account to sell FINANCING various tax-exempt issues. Present: Mr. D. if. Bell MR. BELL: ie have twenty-two billion dollars in Government securities in the various trust accounts. There are about thirt of them in number, and seventeen billion of that is in special and non-marketable overations, two percent special, and four billion six are in marketable securities, and there 1s about a billion three--these are the five accounts, and there are about twenty-five others 1 didn't tick un because they are miscellaneous business, one billion two hundred and sixty-eight million in taxexempt issues in these three accounts, and those two, think, are the only ones that are ought to consider. I H.M.JR: These two? MR. BELL: Yes, because me have the Government life Insurance fund a special rate of three and one-half percent with the understanding they would not sell marketable securities. N.H.JR: Just these two? MR. BELL: Yes, those two, and we have that such in marketable securities on the taxable issue. Here is what we have done, sold one hundred and fiftyone million dollars in securities since January 1 from those two accounts. it have sold ninety-one million of taxable and sixty million tax-exeart, which is pretty good, and the market today, In fact for the week, has been kind of dead. This is what they have not, an authorization to sell five million each in Federal deposits and savings and two percent bonds '52-'54 taxable, and that cleans up those (20. H.M.JR: Let's tell then this next week that If the market is at all strong I would like them to sell for postal savings twenty Million each. MR. BELL: Twenty million each! They CALD push that. They CAD do that just as the market rets good. I.M.JK: Next week If there is any opportunity. This 1 will give the HIRL. (Hands reporter "Pending Authorization," copy attached.) = Anything else? JR. BELL: Here is socethiar to TO to the President with his withholding taxes. (Hands Secretary "Memorandum to the President, copy attached.) H.M.J.: lie ought to sign it and send It back. (S1 ms meno.) All right? MR. BELL: Yes. C PRECISION TRADE MARK MICROSTAT MMG.U.S.PAT.OFF MICROFILM ROLL NO. FENDING AUTHORIZATIONS Issues 2% Treasury Bonds of 1952-54 2-1/2% Treasury Bonds of 1967-72 Various tax-exempt issues. O Postal Service Fed. Dep.Ins. Corp. $5,000,000 $5,000,000 5,000,000 5,000,000 10,000,000 10,000,000 $20,000,000 $20,000,000 to TO PRESIDENT There is transmitted herewith for your signature Form was Revised, Employee's Withholding Exemption Certifi- ente. which should be filed in accordance with the provisions of the Individual Income Tax Act of 1944 It would be amoreisted if you will return the certificate to - when 11 to everlated so that appropriate action may be taken is connection with the segment of your salary. The President's salary to sale monthly on the Last day of each month by check of the Transiter of the United States, based - a certificate of settlement leased by the General Accounting office. JAWoodsen/se 4/20/45 XYarteIt:hbv 4/21/45 -2MISS BOOKL: Ne have reservations to to by air Sunday April 21, 1948 night, but yesterday after he had gotten clearance from you for my absence for six days, he decided that he didn't want to risk the chance of going out there at the last minute, and he decided that he would rather use the train reservations which he had. and he wants to have a period to rest un and work this thing out with ite. Going by train a few days in advance would mean 1 will be from the office nine working days. I have a reservation by plane 4:35 T.M. WAR REFUNEE BOARD Present: lr. Peble liss Hodel Mrs. Elote back. H.M. The point la this: 1 as tied un doing other ..... Hello, Hiso Bodel. Talk fast, will you people's work. It is nothing personal, but I as not roing to do It any more. the telegrached as asking If he could take you for a week, and I said yes. Now he wants you to please. on why you want to TO, and why the General wants you to no? no for two weeks, and If something should harmen down here, VISS MODEL: Be wants me to TO because the meetings are being held by the United Jewish Helfare Fund of Los Angeles, which supports the JDC and the Palestine Anneal Unit of the refuree service. The JDC people in less York are anxious for the General to to because they feel his presence there, and a sneech from him telling for the first time some of the work of the war Refuree Board and what the will enable then to paise about two million dollars. did JDC They have . larre member of Tours there who are interested in this work and particularl the work of the JDC. the JDC meople in New York and the General, too. seen to feel that in this informal TOUP that will be meeting before the large meetines questions will be raised on the work that has been done in the past, and the General is very unsure of himself with respect to that. That's with be wants me, because he says I an the only one around here that knows about all those things. 1 know in detail what the JOC has been doing. H.N.J Oh. MISS RODAL: In the last few days he has been protty involved in political stuff that in roine on in New York, and he wants to take the time to actually forget everything in New York and really work on this thing and do n good job for them. ( .M.JR: why can't you to by air? you don't know what, both you and O'Dayer are away. I an tired, too, but it doesn't make sense, Miss Model. I mean, don't see way the two of you--you not mriority three, don't you? 1 MISS HOURI: , have melority three coming back, but he not somebody in New York to make reservations roing out for Sunday night. and we checked on it and it is marked "no priority, and he and nervous. Holder You can not " criority. Charles Bell will net you one. NR. KLOTE: T think, from what Miss nodel has told me, that he doesn't want to TO by air. Le in afraid-- VISS ROOEL: Yesterday afternoon he not nervous about roin at zuen . late date. 13. PERLE: Be could not rounded LISS LOOKL: They are building this un so big. ...... then? MISS EOUEL: Say 1 and 2, one night in Los Angeles to . larme Toup, and one might in Hollywood. TRADE MARK MICROSTAT MICROFILM ROLL NO 126 -3- t H.M.JR: You are starting Sunday? MISS HODEL: Tuesday night, if we go by train, and next Sunday night if we go by plane. 13. Pall: se'll settle it, Mr. Secretary. You for er about it. H.M.JHI You decide. It doean't make sense to me. Do you want to run the thing two weeks while she is gone? You are leaving on a vacation May 1st. I really shouldn't be bothered about this. To make . two-day speech he takes Miss Model out of here for two weeks. 10. PEALE: 40 can work that out. MISS HODEL: I don't think you should. H.M.JH: It's your responsibility. H.M.JR: You settle it. MISS RODEL: Five thousand Jews, Danish and Norwerian JONE have just been released into Sweden. And and . result of negotiations IT th Count Bernadotte, sixtrenine Jewish refurees arrived In Switzerland from Czechonlovakin, and MR. PEHLE: We will settle it. H.M.J.H If, while they are gone, something comes up I an not going to do it, and they come back and cry on ay shoulder. I'll do It anyway, and 1 don't think it's fair to me. It's just dama nonsense. all of the War refuree food parcels stocked in have mone into Germany. ... I fill THEY emphatic today because I feel that-- this has nothing to io with you. T know you are not look- MISS HODEL: I didn't make the request of you, Mr. Secretary. I realize-- H.M.JR: It's dams nonsense, because If somethin breaks and goes wrong--I told John to TO away the first of May--I'll be here and I an going to have to do it, and 1 am not going to do it. This man doesn't mean anything in forward to it. Anythine I say in no was refers to you, 1 but I realize YOU are workIn for this san and you are In a mosition there you have to try to please him. low, John is Assistant to the Secretar of the Treasury and I have delected the authority to him. It won't be your decision, but John is 0 touch may, and he doesn't care. to me. It's dams nonsense. 1 think it's the most childish thing I ever heard of. MR. PEHLE: Leave it to me, I'll settle it. H.M.JR: In order that the fellow can rest--you are the only person left. When is this speech? MISS HODEL: May 1st and 2nd. H.M.JH: It's the craziest thing I have ever heard of. he's childish. Unless Pehle overrules me, and he has that privilege, you go by air. You have ample time to et priorities 3 and Charles Bell can get them out of the white House. It's ridiculous. 19. POLLE: I'll take care of it. .J.: It is in no WAY directed at you, but suppose something breaks, what do I do: I'm carrying the ball. have enourh to do. I PRECISION PRECISION TRADE MARK MICROFILM MICROSTAT ROLL NO. APR 21 1945 begine My dear Mr. Meyer: There were two reasons why this morning's issue of The Washington Post appealed to ae especially One was the editorial on the Seventh War Loan. The other was the editorial on Bretton Boods. Both editorials are well written. In each case, the writer knew his subject. And the result, in both cases, will be very helpful. for of inI appreciate very such the recognition by sta- attained hope In which war finance bility, The telligent an Post era aust that way be peaceful monetary, development. the and If problem general the world of economic And is to the is presented is in line with the active support The Post has given the Treasury in past Far Loan grives. Please accept my thanks for The Post in the case of both editorials. And will you be so kind as to pass along to the writers -- or writer -- of the two editorials, ay appreciation? Sincerely, EARTY Mr. Eugene Meyer Editor and Publisher C The Washington Post Washington, D. C. ElFive 4-21-45 PRECISION MICROFILM MICROSTAT TRADE MARK April 21, 1945 ROLL NO. Wednesday, May 16, New York City: Evening meeting with Te: Executive Institute Incorporated, at which perhaps 100 high-ranking corporation officials will be present. An off-the-record discussion. demorandum FOR THE SECRETARY Friday, May 18. Buffalo Chamber of Commerce: On- From: Mr. Blough the-record speech at luncheon meeting. There will probably be 400 or more present at this (No action required, but would like you to read) meeting. Mr. In harmony with a policy approved by you and Geston, I have participated in a number of offwith individuals and groups postwor taxation as on ject conferences of and planning I to the-record continue the thissub practice. In the discussions, FO into the ways we are endeavoring to develop postwar tax program. I also inlignte the problems faced and neck to get factual inform ion and ooinione bearing on them. My impression 10 that these conferences have been successful and uneful from our point of view. The following additional conferences are scheduled: Wednesday, April 25, New York City: Interviews with financial and other editore of the Times, Hereld-Tribune, and the Wall Street Journal. Thursday, April 26, New York City: Luncheon meeting with the New York University Men in Finance. An off-the-record talk and discussion. Thursday, May 10, Cincinnati, Ohio: Luncheon with representative businessmen and community leaders. An off-the-rcord discussion. As you will observe only the Buffalo meeting involves on on-the-record talk. Mr. Gaston and both felt that it was very desirable to accept this invitation. I hope to discuss the subject matter of this talk with you at your early convenience. Roy Blough RECISION MARK MICROFILM MICROSTAT BOLL NO. to imply 1. 1945. APR 21 1945 Dear Bebs It is with sleasure that 1 nov write to Dear Charley: concentuated you unon your repointment as Density My heartiest congratulations! But the President, and the newspaper men and women, and the radio and movie people, who serve as contacts between the White House and the public, are the ones who really deserve to be congratulated, as you move into your new post. It is always a matter of personal gratification for ne to see a friend of long standing Director for 1 know the office of that office will be ably administered under your direction. and 1 and you best vishes as you this - your nev daties. with certifical personal regards, get the recognition he Sesserves. And when that recognition means for you an opportunity to serve in a new and breader field -- and keeps you in Washington besides -- I could not ask for Sincerely, (Signed) H. Morgenthau, Jr. more. Meanwhile I hope you have a pleasant time in San Francisco. I know you will do a good job on your last newspaper assignment for the time being -- and thereafter in whatever assign- Mr. labort 3. Methon, Dentity Director for Inconversion, office of Veg lebilientime - Inconvervies, D. O. ments may be given you. Sincerely, Jr. (stement) Mr. Charles G. Ross 117 Kennedy Drive Chevy Chase, Maryland KBF:VW 4-21-45 4.02 Henry EPiche TRADE MARK MICROFILM MICROSTATE IMMEDIATE RELEASE ROLL NO. APRIL 17, 1945 Fred M. Vinson, Director of War Mobilisation and Reconversion, today announced the appointment of Robert R. Nathan as Deputy Director for Reconversion Mr. Nathan was forcerly Chairman of the Mar Production Board's Planning Committee. 10g left the Mar Production Board in 1943 to enter the army as a private, and subsequently received a medical discharge. C O PRECISION ADE MARK MICROSTATA MICROFILM ROLL NO. APr 21 1945 Dear Mr. Vanderpoel: Your column of April 17 is one of the best of your many splendid contributions. I say this, not merely because of the compliments you pay ae. which I greatly appreciate, but because you have stated so clearly and succinctly the purpose of the Treasury both in war financing and in satters of general policy. That, it seens to ne, is a type of interpretative reporting that is desirable at all times. It is of particular importance now, with the Seventh ar Loan about to be launched. it is but your The public deserves to know not only WAT is being cone in the reala of public finance, and HOW being done, also MUY. And evident purpose has always been to give this Information. I thank you for the kindly references to us. and even acre for the effect that your column will have in furthering good relations between the Treasury and the public at large. Sincerely, (Signed) H. Morgenthav, Jr. Mr. Robert P. Vanderpoel Financial Editor Chicago Erald-American 326 West Madison Street Chicago, Illinois EBF:VW 4-21-45 ROBERT P.VANDERPOEL - CHEFAMN HICROSTAT ROLL NO NG.U.S.PAT.OFF MICROFILM FINANCE Tip to Truman. Eye MorgenthauPtecord By Robert P. Vanderpock Financial Editor The "hatchet boys" already have been busy. They have been operating on the President's cabinet with great gusto. This member and that is so go, but quick and so forth Undoubtedly there will be changes. It is only natural that there should be. But most of the "inside dope" that WC have had thus far represents either wishful thinking or guessing effort to beat the game. For example, we of the poison pen brigadeMor- from Washington Friend of Roosevel Henry the World War I exceeds received fair Fair, 85 Pct. Admit No One Has Lost 136 Secretary Morgenthau - 2 TREASURY DEPARTMENT compares the restricted Sixth War Loan INTER OFFICE COMMUNICATION 2-1/2's of 1966-71 with the unrestricted 2-1/2's of 1967-72, which were issued be- DATE April 21, 1945 fore Pearl Harbor: Secretary Vorgenthau TO FROM April 2 Mr. Has Subject The Government Security Market and the Pricing of the Seventh War Loan Issues In response to your request, this memorandum has been prepared to compare the estimated premiums on the Seventh War Loan issues now and at the time the maturi ties were Change 2-1/2's of 1966-71 101.09 100.31 -.10 2-1/2's of 1967-72 102.13 103.19 +1.06 by the fact that, with the elimination of the 2 percent bond from the Seventh War Loan basket, banks have sought to buy the during this period, and the second section takes up the effect of the market changes on the pricing of the Seventh War Loan securities. unrestricted 2-1/2 percent issues before the supply in the market runs out. The re- stricted issues, on the other hand, will I. Market Movements Since Your Announcement again be available in unlimited amounts in 0 the Seventh War Loan. II. The Pricing of the Seventh War Loan Issues At the time you placed maturities on the new issues (April 2), we estimated their approximate premiums, based on the then market, as follows: 12/32 1-1/2's of 12/15/50 2-1/4's of 6/15/59-62 19/32 2-1/2's of 6/15/67-72 16/32 (2 percent) area have advanced on the average about 15/32; and these issues are now selling at all-time highs. (3) Prices of the long-term restricted 2-1/2's, Since that time the outstanding issues most closely approximating the ones to be issued in the Seventh War Loan have changed in price as follows: on the other hand, have declined on the average about 7/32 since the close on April 2. (4) Prices of the unrestricted 2-1/2's have moved up sharply in contrast to the movement of the restricted bonds. This is 11lustrated in the following table which April 20 Note: Decimals are thirty-seconds This sharp difference is presumably caused announced. The first section analyzes market movements of the Maturities of the Seventh for Loan Issues Since your announcement, after the close on April 2. of the as turities of the marketable issues to be offered during the Seventh War Loan, the price behavior of Govern= ment securities has been mixed. Movements, classified by maturity areas, fall into four well-defined groups: (1) Prices of bonds in the short-term area -about three years -- have risen only slightly (about 2/32). (2) Prices of bonds in the intermediate-tera : C 0 2" C Secretary Morgenthau - 3 1-1/2 percent area: 21a of 9/15/50-52 Secretary Morgenthau - 4 2-1/2 Percent Issue. The out tanding issue most closely resembling the 2-172 Feent bond to be issued in the Seventh War Loan declined 10/32. About 4/32 of this decline can be explained, however, by the interest "run-off" characteristic of 2-1/2 percent restricted issues, which was allowed for in the original pricing. Our estimate of the theoretical premium on the new 2-1/2 percent issue, based on the market April 2, was 16/32. on the basis of the market yesterday, we would reduce this estimate to about 10/32. +13/32 2-1/4 percent area: 2-1/4's of 9/15/56-59 +18/32 2-1/2's of 6/15/62-67 -2/32 2-1/2 percent area: 2-1/2's of 3/15/66-73 -10/32 Summary. The following table compares the estimated 1-1/2 Percent Issue. The first of the issues listed above -- which most closely approximates the 1-1/2 percent bond to be issued in the Seventh War Loan -- has risen 13/32 since April 2. If our estimate of the premium on the new issue were to be increased correspondingly, it high would be 25/32, based on yesterday's market. Such prospective premium will put quite a strain on the polioing mechanism and it will be desirable to watch develop- premi USA on the Seventh War Loan issues. based on yesterday's market, with those of based on the market immediately preceding the announcement maturities: Estimated Premiums April 20 a ments closely. C 2-1/4 Percent Issue. The 2-1/4 percent bond to be offered in the Seventh War Loan falls between the two middle issues in the preceding list. It should be noted that the restriction on the outstanding issue which rose 18/32 has less than 18 months still to run: while the restriction on the outstanding issue which fell 2/32 still has about seven years to run. The new issue will also be restricted for about seven years, and it appears a reasonable supposition, therefore, that its behavior, if it had been outstanding, would have more closely approximated that of the outstanding issue with the longer restriction. The would, therefore, retain substantially unchanged our original estimate of the premium on the new issue (19/32). This, of course, is a theoretical premium which any partly be *eaten up" by market adjustments as the WAT loan effective date approaches. This issue, and the 2-1/21s, will be available in unlimited supply, ac it will be difficult to maintain a large premium; whereas the 1-1/2's should hold a good sized premium because of the small amount of the issue and the potential large bank demand after the drive. 1-1/2's of 12/15/50 2-1/41 of 6/15/59-62 2-1/2's of 6/15/67-72 12/32 25/32 19/32 10/32 TREASURY DEPARTMENT 140 INTER OFFICE COMMUNICATION for payment to the Bank of China, New York Agency. As might be DATE April 21, 1945 TO Secretary Morgenthau FROM Mr. Coe YC expected it has been found that most of the leading political figures in China have not purchased certificates in their own names or, at least, have not purchased certificates in their own names which have been presented for payment. It was found, however, that a small group of purchasers accounted for the great bulk of the total purchased and that among the largest purchasers are organizations and individuals intimately connected with some Subject: Purchases of $200 Million of Chinese U. S. Dollar Savings Certificates and Bonds of China's leading political figures. 4. An analysis of $43 million of certificates which have 1. In March, 1942, without prior consultation with the U. S. Treasury, The Chinese announced the sale of $200 million of U. S. dollar savings certificates and bonds by the Chinese Government been presented for payment reveals that 86 individuals or organizations or less than 2 percent of the total purchasers accounted for about $28 million or about 70 percent of the total. These 86 persons and organizations each purchased $100,000 or more of the certificates. at official rates. During the period of time during which these issues were sold the prevailing market rates were from two to five times the official rates. At present these certificates and bonde can be sold for more than 15 times their original purchase price. 5. Because of the difficulties involved in the identification of Chinese names it has not yet been possible to identify all of the principal purchasers in terms of whom they actually represent. There is attached hereto however, a list of prin- The Treasury has always suspected that top Chinese Government officers were among the principal beneficiaries of these issues, particularly as a result of the manner in which they were sold. "hus, of the $100 million of certificates a total of $50 million was sold between April 1942 and June 1943. During the last few days of July, however the equivalent of $50 million were sold of which about $30 million were purchased in Chungking in the last three days of sale. cipal purchasers who have been identified with comments indicating the individual whom they probably represent. It will be noted that organizations or persons intimately connected with Dr. T V. Soong purchased $4.4 million of the certificates; K. P. Chen, $4.1 million, and H. H. Kung, $1.4 million. Moreover the Ambassador to the United States. Dr. Wei Tao-ming had purchased about $134,000 K. C. Li about $189,000, and the Minister of Food, Hsu Kan, $124,000. Organizations controlled by Tu Yueh-seng. the notorious underworld gangeter leader had purchased more than $400,000 of these certificates and organizations and individuals intimately connected with Lung Yung, Governor of Yunnan Province and one of the leading militarists of China, had purchased nearly $370,000 of these certificates. 2. The history of the sale of the $100 million of 10 year bonds was, if anything even more spectacular and more suspicious. Thus, between April 1942 and October 18, 1943 only about $11 million or about 1/9 of the bond issue was sold. On October 12, however, a leak took place that the government was about to close its sale of these bonds and by October 15 three days later the government had sold out the remainder of the $100 million issue. Both Adler and Friedman were informed by Anbassador Gause that he, Ambassador Gauss, had it from a highly reliable source that Madame Chiang Kai-shek and Madame Kung had between them what purchased $50 million of these bonds. This storyinjibes with of ve know about the sale of most of the issue a period three days. 3. In the case of the short-term certificates, we have more exact and detailed evidence than in the case of the bonds since about 1/2 of the $100 million have already been presented : AEPRECISION TRADE MARK C Purchasers Purchasers Bank of China Bang How Comments Amount & 642,053 257,697 Chung Yuan Paper Ma. Controlled by T. V. Soong Consercial Bank of China Central Trust Company Chis-ngau and link between the two interists. Dah this Cotton Spinning Bank of Communication 115,006 India office 1,289,841 204,428 Representative of Matheson in Controlled by Teang Chien-bui, C. Tsang's 103,022 Controlled by K. 7. Hu, Saechuan Corp. Heainan Railway & Co. 126,778 Government concern. Brantan Rad lway Co. 128,778 Government concern. Eung, Rosanond 151,443 Dr. H. H. Dung's eldest daughter. Funding Bank 103,022 Controlled by Governor Lung Yung. Lee Dong Quan 262,498 and friendly to K, P. Chen. 11, K. c. 188,779 President of Wah Chang Trading Company. Controlled by E. 2. Ha, leading Stechman Mas 1. T. 264,984 General Manager of Fukien Bank in Kunnings Nanyang From. Tobacco 171,017 113,530 chuan Industrial Corp., formerly subsidiary Assistant Vanager of Central Trust, manager of Tangtae Trading Corporation, a business confidant of the Kung family. 104,258 A trading subsidiary of Shanghai Consercial Bank controlled by K. P. Chen, the most this Hain Cenent 4 Co. Perhape Chang Nai-chi, President of Shang= of Shanghai Commercial Bank. Changhai Chira Automotive Co. 561,472 109,296 Controlled by Dr. H. 11. Kung 295,427 Controlled by Dr. H. H. Kung Foh Sing Flour 1111 154,533 451,411 177,121 Chira. Private bank owned by T. V. Soong, actively managed by his brother T.A.Soong. Insurance done unually with overseas Chin 11. Convercial Bank is controlled by K. P. Chen. Chekiang Industrial Controlled by To Tueb-seng - faced leader of Shanghai underworld, confidant of noney-saking concern of all K. P. interests chiefly deals in salt and other commidities. Dah Yeb Trading Co. Bank of Canton, San Chao, G. H. 309,066 Government concern Generalissimo. (Subsidiary of Shanehai Consert al Bank): leading stockholder, Commercial Press. confident of both K. P. Chen and Chang Controlled by Dr. 11. H. Kung Chang, N. C. 0 309,067 Chairman of Board, China Assurance Corp. Controlled by T. V. Soong Central Bank of China Comments Amount Vice-President, Universal Trading Corp. Bank of Chima, Burma Agency 107,081 Francisco 142 -2- 2:pess purchasers of U. S. doller RAVIDLE Meater Controlling interest in the hands of IS ling, brother financially linked with K.P. Chen. D who is closely associated with Chang Fai-agau capitalist. China Development 690,220 A holding company controlled by T. V. Soong China Insurance Co. 349,911 Chica Products Trade 200,221 Controlled by 7. L. Soong China Sugar Refining 154,518 A gubsidiary of the Bank of China which is controlled by T. v. Soong. Citu Hain Chan Bank 149,371 The leading bank of Saedhuan landlords and financiers known as Yang brothers to A subsidiary of the Bank of China which is controlled by T. V. Soong. foreigners. Changhai Commercial Bank General manager of Pah-Yeh Trading Corp. and one of K. P. Chen's chief lieutenants. one of Gen. Lung Yung's chief lieutenants. 1,088,193 Controlled by T. 7. Soong. K. P. Chen's bank. Shasi Cotton Spinning 103,022 Controlled by Tu Yumb-seng, Shanghai underworld leader. Sun Patrick 103,804 Son of Dr. Sun Fo, Pres. of Legislative Yuan. -3Purchasers Sung Sing Cotton 111 $ 697,915 Controlled by Teang Chien-huni, C. Trang's brother, financially tied up with T.P.Chen. Soong, T. A. 228,105 One of the Snong brothers, who is clonest Teang, C. 963,890 K. P. Chen's confidential secretary and one Tung, C. L. 123,627 Vice Chairman of Foreign Trade Commission, Universal Trading 1,332,103 April 21, 1945 Committee Amount to 7. V. Soong. of his most trusted lieutenants in the U.S. close to Hau Kan, Minister of Food. 2 dear ar. President: 1 as leaving this afternoon to a few with is Daytona. On return would opporto talk 1 you spend tunity as days with appreciate about wife at the an future economic treatment of Germany. government concern. Yours sincerely, Wei Taceting 133,929 Ashassador to the United States. Yangtae Trading Corp. 334,823 Controlled by Kung family Yu Foong Cotton will 126,785 Subsidiary of Bank of China controlled Yu Ya Ching 103,022 You Hwa Coemercial 175,130 Dr. Kung's private bank ine President, Yu lbva Cotton Spinning 370,880 A subsidiary of Bank of Ordina which is las inite LOUSE. (Signed) Beart Morgenthas, 2 by T. V. Soong. Former President of Shanghai Chamber of Commerce, close friend of Generalissimo C controlled by T. V. Soong. 2 145 0 TREASURY DEPARTMENT 0 INTER OFFICE COMMUNICATION DATE April 1, IME In no event small any differentiation be made between or special consideration be accorded to persons arrested, either un to manner of arrest or conditions of detention, Loon the basis of Secretary urgene for information) TO FROM wealth or political, diplomatic, industrial, or T. DOE FY other rank or position. HDM devised spafis of the colltical, esamelic, an financial 2. Economic Directive directives on Dermany have been completed. The basic point of difference between Treasury and the other agencies In the economic directive concerns the question of the imposition of controls on the Cersan economy. State and other agencies are sent upon requiring our military forces to exercise widespread controls over the German economy. de c 1310 10000000 - seletial #016 objectionable povisive to is the revised directives, out there recain several providions vice 1 feel to the 10 00.001 10 the Sington Committee. THERE provisions SPN the following: have taken the position that this is completely inconsistent with the President's Directive and that In general the administration and responsibility for such controls should be left 1. Political The last to sentence of Paragraph 0 (arrent of sale and others) GOM 2650 LE follows: 1: i the light of condit out valor 310 encounter in you relieve test certain persons within these categorics should not on subjected immediately to this treatment, you SCORIO Report our . shops the AGC 2000 enotions to the Joint Miefs of staff. Relieve 11 desireste, MAY postoons arrest 01 tause CILEGO have reporter. The weerecorec sentence inserted at Line request of the and seens quits objectionalo to US. This provision would certification persons additional within tiue calegorica receiped to to it spreated to realin at large pencils determination as Whether the cesseVo special consiceration. allow provision our casil DC abozed to protect profiled therefore, persocalities in the colitical and Injustrial lice of C, urge that the sentence in question be celeice. Coreover, in GROW to ensure that soccial FAVOR is not granted to persons like APROA and von Paper, 10 of Line addition of the following non sintence at the end Paragraph : to the Germans themselves. $ For example, the State Department insists upon a provision which would result in the immediate imposition by the Cousander vent of widespread 'inflation. controls economy order to ...e on one this position and areinsuggesting alternative provisions which WOULD nake clear (1) that controls of wages, prices, etc., are only to be imposed in exceptional over the German pre- circuittances, and (4) that the question of control of inflation in the initial period is to be left entirely to the Germans with the specification that if inflation assumes such proportions as to endang or the objectives of occupation, the Commander is to report that fact to Washington with his recommendations for action. Our position regarding control of inflation is based on the following: (1) It will be an inconsible task for the Aray to control inflation in Germany and it would be A distinct disservice to the Army to impose upon it a responsibility which it cannot successfully discharge without reconstructing the German economy. 147 : C --(2) There in no evidence that price chance will seriously interfere with the objectives of Military occupation, such an reparations, etc. Accordingly, Le should urge that the words "or for other purposes be deleted from Paragraph 7(a), and that German external assets be held exclusively for peparation or restitution. (3) The German people have a greater interest in pre- venting inflation than be do; Line alone can tackle the job, and it should be left entirely to them. If TO to control inflation is German it will become the patriotic to duty of Germans to subotage our efforts. 3. Financial Directive (a) Paragraph 6(o) of this directive also is an inflation control device union is objectionable for the PERSONS incipated above. This paragraph taken the military Commander responsi le for assuri 10 reconstruction of the Corran tax and fiscal system. ae propure that this paragraph be deleted from the directive. (b) Paragraph 7(a) provides for the seizure of all German external assets. Under the provision as it now stands, these assets are to 00 4200 for peparation, restitution, "or for other purposes. State Department, over our objection, insisted upon the Inclusion of the words *01 for other purposes" O with a view to assuring that German external assets are used as partial payment for supplies which they any se will inevitably have to send into Germany. It is our position that this sup005 00 financial advantage is completely Illusory. The United States already has claims against Germany for war costs, etc., which far exceed any amount 100 can possibly obtain as reparations out of Cereany's external assets. Accordingly, it is herely self-deception to suggest that there is any financial pain in using Certain resources which are alrendy ours by virtue of existing claims to DAY for LOOKS to be delivered to Germany during the control period. ....preover, the application of German assets to this purpose say well serve to Increase the ultimate financial loss of this Government, since the fact that se suparently would be receiving partial payment for good furnished would be used as an argument for giving the Germann additional goods. It would be such better to make clear to Congress that if 110 furnish goods to Germany We are doing so entirely at our expense. 0 ( A April 21, 1945 12:30 p.m. visit from baruch and 9 report waich be is going to give the President. asked whether 1 could see it, and be didn't any yes or no. ae's convinced that there should be a group of State. Treasury I D. 4. paruca case to see ae at 12:30. ne told me that be net with the war Cabinet, and that they asked him now be stooo on the worgentrau Plan, and be said the aorgenthau Plan ARE all right, but be was much tougher har, save and red to handle reparations and staller questions. we was talking about San rosennan for other secretary of this group. said That is all right, but I are kind of surprised that can wants us to open up the German coal mines. AND as said, "les, they have to. said, tean korgentnau. no told as of the argument as DBC with Churchill and the others about de-inquairializing Germany. According to non acout getting It from england paruch, Churchill la still doubtful and the thing that is worrying them is aussia. they can't make up their minds whether they want a strong Germany to oppose Russis, or whether they don't. are saic we used the argument with then he said, "I know that is Life any you feel, out. Henry, you' arong on that.' the said, The engilan can't do it because the even have to get coal from Germany, well, I'm still not convincea that that is right, but went along with him on San business you'll get. And, of course. that was the argument hosenman because 1 think that they could do a lot worse. 1 gather that is want he is pusning. amongst the english Cacinet members on reparations, but DRPUCH Lave them 8 great sales talk on now England could recover at the expense of Germany. ne seemed very sincere, baruch sale further that be tried to encourage England and the english people looking forward after V-E Day and give them more confidence in themselves. 1 again say that be certainly seemed to be friendly to me, and 1 suppose the that if you de-incustrialize vermany - look at all the used. and to the ceat of if memory. told then about It after cuebec. gather also that there is great muddle and this time his mind as clear. I really believe the man reason is that this time 4t feels that he and 1 are on the same track. LE said to ne, " don't see now you can go ahead al th creitor woods watil the reparations question is settled. out as masn't near as positive accout It as the as before that since /resident noosevelt's death that Clayton had turned . somersaul for the worse on reparations. And the old man got fire In his eyes and said that If Clayton doesn't because nImself, he'a going to cut his heart out and drive him out o: washington. went to england. we alc any tale - be that the anglish aere worried about the election coming us immediately after V-E Day, that bretton woods might be harmful to them. So be questioned me very closely as to now long pretton woods would take to 1855, and said at least another 30 days in the house. and then maybe two or three months in the Senate. the said, "Oh, that all right, that's all right. ne said the critish election would be out of the way. In other words, before be left be wanted to postpone wretten HOODS until the reparations question was settled and now he's willing to postpone pretton woods until the english election is over. 1 can't help but cose to the conclusion that be can't be very strong for bretton goods, although be salo be ass. me's always looking for some excuse to postpone it. And the idea that ae should postjone it in order to wait until the election in Great critain Is over is just damn nonsense to me. a evidently On. yes, + means what be saja. it claimed that be wants to devote all of his time to solving this German question. told him that if boys had told ne we also told BE that Jimmy Dyrnes was for a strong vermany andthe thatscenes. as was one of the real advocates working for It bening TREASURY DEPARTMENT EXECUTIVE OFFICE OF THE PRESIDENT $ AR REFUGEE BOARD INTER OFFICE COMMUNICATION Date April 21 INTER-OFFICE COMMUNICATION 1945 DATE APR 21 1945 FROM Secretary Morgenthau Miss Hodel The following information has just been received 1. 5,000 Danish and Norwegian Jews arrived in Sweden April 18th from Germany. Their release from German concentration campa is the result of special negotiations conducted by Count Bernadotte, President of the Swedish Red Cross. C 3. Mr. Coe FC For your information Re: Dutch lend-lease agreement. in cables from Stockholm and Bern: 2. Secretary Morgenthau TO 69 Jewish refugees arrived in Switzerland April 19th. They case mainly from Bratislava. The stock of Ver Refugee Board parcels in Goteburg has been exhausted with the shipment on April 16th of 140,000 parcels to Lubeck Hodel On April 20 the State Department handed to the Dutch 8 proposed lend-lease agreement under section 3(o) of the Lendlease Act. This agreement and the accoupanying papers were practically identical to the lend-lease agreement signed by the Delgians this week. is in the Belgian agreement, the Lutch agreement contains only one schedule. This schedule totals $242,000,000, and does not contain articles having a long production cycle and a long life. It will be understood that such items will not be iven to the Dutch under Section 3(c) but if procured in the United States mist be paid for in cash or through other means of financin. The schedule applies only to Metropolitan etherlance. In a craft letter from the Secretary of State to the Metherlands Aubessador, accompanying the agreements, reference is made to the fact that the agreements conteaplate reciprocal aid from the Metherlands East indies but that no straight lens-lease is included at the present time for the Betherlands East Indien. At our request, the letter WILE toned down so that it could not sound like an Invitation to the Dutch to request a lend-lease program for the Betherianos East Indies immediately after the signing of this agreement. it in assumed that if the nerotiations do not result in any substantial departures from the Belgian battern, the Treasury should not object to the signature of the agreement. MICROFILM TREASURY DEPARTMENT 157 TREASURY DEPARTMENT 154 0 C INTER OFFICE COMMUNICATION INTER OFFICE COMMUNICATION DATE Apr. 21, 1945 TO FROM DATE TO Secretary Morgenthau FROM Mr. White April 21, 1945 Secretary Morgenthau Jr. White 1 are appending below the changes in the bill which in to judgment we could accept without significant harm to the While I not gone, I TOULS suggest that you look to r. Luxford to substitute for be in the functioning of the Fund and Bank and without significant responsibility of following through on Bretton Woods matters. Sir. Feltus has charge of the public relations aspects of retton Woods, r. Bernstein of technical Repeats of speecing, selection and preparation of witnesses and effect on the chances of adoption of the Agreement by other countries. drafting of tecinical letters. etc. r. Connell Under Part 1 I 521 including those items which we can takes care of arrangements on the 111. very readily accept. Unier Part II I an including those That's how we have been operating and I think that each of then understands what are is responsi= 0 bilities. suggested changes which 1 think we ought to accept reluctantly Jr. O'Connell and L.F. Luxford are seeing Mr. Wolcott this afternoon (I arranged meeting) to find out what happened at the conference which and only If essential to get Welcott's support. Wolcott had with Burgess. cepted which involve mondments to the Agreement itself. It is understood, of course, that no changes will be ac- I 0.13 appending to remorenate which Aves my All the changes are those that would be incorporated only detailed views on the proposed compromise. in our own legislation and will not modify any of the provisions in the Articlea of Agreement. Part I 1. i new section is to be added, entitled "STABILIZATION LOANS BY THE RATE": (this La the substance of recommendations by the CED) "Sec. 18. If the management of the Bank does not interpret Its powers under the Articlea of Agreement U.S. authorizing the Bank to make or 0 156 0 general policies established by the Council. Except as otherwise provided in section 5 of this Act, the Council is hereby authorized, through the governor and executive director to give or refuse the approval, consent, or agreement of the United States whenever, under the Articles of Agreement of the Fund or the Bank, such approval, consent or agreement of the United States is required before any act may be done by the Fund or the Bank, respectively. No governor or executive director representing the United States shall, without prior consultation with the Council, vote in favor of any waiver of conditions under Article V. section 4 or in favor of any Leclaration of the United States dollar as A scarce currency under Article VII, section 3. of the Articles of Agreement of the Fund.' -2guarantee loans for programs of economic and monetary reconstruction which may include long-term stabilizetion loans, the governor and executive director of the Pank appointed by the United States are hereby directed to propose and support an amendment to the Articles of Agreement the consultation for the purposewith of explicitly thorizing Bank, after the Fund, to make or guarantee such loans. The Council is hereby authorized and directed to accept such emendment on behalf of the United States. 2. Section 0 is assended to read as follows: "ORTAINING AND FURNISHING INFORMATION* O "Sec. 9. So long as the United States is a member of the Fund, the President may require at any time, in the manner and under the penalties provided in Section 5(b) of the Trading with the enemy Act (U.S.C., title 50, App. Sec. 5), as seended, the furnishing of any dats that may be requested by the Fund under Article 8, Section 5. of the Articles of Agreement of the Fund." Part 11 The suggesto ranges below in my judgment are not neces- cary and they will, to acon extent, take a little more dif- 0 fieult the adoption of the Agreements of other countries, particularly Britain. However, I don't think their inclusion would be is decisive factor in Britain's decision or in the 3. Section 4 is assended to read as follows: "International NONEWARDS AID FINANCIAL decisions of any other countries, and if It is doing to be : COUNCIL AND REPORTS significant help in winning Wolcott's support, I would not "Sec. 4. (a) There is hereby established the International Konstary and Financial Council (hereinafter referred to NO the Council), consisting of the Secretary of the Tressury 12 Chairman, the Seoretary object to their inclusion. The sentences are somewhat changed from those originally indicated in Mr. Luxford's of State, the of Commerce, the Chairman of Governors Secretary the Board of of the Federal Reserve System and the Foreign Economic Administrator. The Council shall act under the general direction of the President and in accordance with such policies as the Congress may prescribe from time to time. (b) The United States governor and executive director of the Fund and Bank and their alternates shall keep the Council fully informed of their activition and shall act in a manner consistent with draft, but the changes are in my mind important and I feel It would be unwise to accept the wording in Lexford's original draft where It differs from the wording indicated below. I have already discussed these changes with Luxford, Bernstein, : and Brenner. -4- C 157 1. Add to Section 4: the resources of the Fund are used only to promote exchange stability, to maintain orderly exchange arrangements, and to avoid competitive exchange depreciation; to 800 that the Fund is kept informed of the necessary corrective measures that are being taken by members (1) To exercise their full powers and influence to secure coordinated policies on the part of the Fund and the Bank and the highest degree of cooperation and collaboration at overy point between their respective managements in carrying out the purposes of the Fund that use the resources of the Fund; to limit the use and Bank. of the resources of the Fund to meeting seasonal, cyclical and emergency needs for foreign exchange for current stabilization purposes. (11) To exercise their full powers and influence to see that the Fund is used only where It can appropriately be used for current stabilization operations and that the Bank is used only where It can appropriately be used for reconstruction and development projects and for program of economic and monetary reconstruction which may include long-term stabilization loans. and orderly exchange arrangements; to encourage the Fund to communicate its views to members on economic and monetary conditions and developments which would tend to disturb stable and orderly exchange arrangements; to eliminate as soon na conditions permit all forma of restrictive and discriminatory currency arrangements among members; and to facilitate and encourage in other ways the elimination of discriminatory trade arran ements that hamper world trade and other forme of economic warfare that disturb harmonious international economic relations. : (vi) To exercise their full powers and influence to see that when a general scarcity of a currency is developing the report issued by the Fund shall set forth fully the causes of the scarcity and shall contain recommendations designed to bring it to an end; to see that the report recognizes fully the common responsibility o: the countries whose holdings of the currency are scarce and of the country whose currency is scarce, and that the recommendations are made not only to the country whose currency is scarce but to the country whose holdings of the currency are scarce; to see that proupt corrective measures are taken so that the scarcity of any currency can be terminated as soon .. possible, that the limitations on the trans= actions in a scarce currency are no more restrictive than is necessary and that they are relaxed and removed no rapidly no conditions pormit; and to see that the right of members whose currency is scarce to make representations on the administration of restrictions on exchange transactions in 0 scarce currency is fully safeguarded. manner that imporile the financial Integrity of either institution; to see that the Fund does not undertake or (vii) To transmit to the President and the Congress quarterly report on the work of the Council, the operations and policies of the Fund and the Bank, and the action of the United States governor and executive director and their alternates. of the Fund's resources on a scale prejudicial to the two years after the establishment of the Fund and Bank continue exchange transactions with any member while its basic economic conditions are such as would lead to use Fund to sustain an untenable exchange rate. a (iv) To exercise their full powers and influence to assure the constructive use of the resources of the Fund and the Bank and to 000 that they are not used in 0 158 (v) To exercise their full powers and Influence to prevent the use of the Fund and the Bank, for relief or for Indebtedness arising out of the war; to see that *Sec. 4 (c) The Council and the United States Governor and their alternates are directed: (111) To exercise their full powers and Influence to develop the basic economic conditions essential to sound prosperity to growing and balanced international trade and to the establishment and maintenance of stable -5- 1 (viii) To transmit to the Congress not later than a special report on the operations and policies of the 159 C -6Fund and the Bank, the extent to which they have achieved the purposes for which they are established, recommendations as to how the Fund and the Bank say be made more effective, and recommendations on any other necessary or desirable changes in the Articles of Agreement for the Fund and the Bank or in this Act. be supplied through the newly created U. S. Committee which is being recommended which would do what we had originally in mind, namely, make is also directed to coordinate the activities of all one of the members of the executive committee of the Fund a departments and agencies of the United States relating to international monetary and financial matters to the and that they guarantee such lorns. The Council is hereby authorised and directed to accept such emendment on behalf of the United States. nonvoting member of the Bank executive committee and vice versa. If that isn't satisfactory, I would not feel too strongly 2. And the following section: about having one governor appointed to not on both Fund and "WITHDRAWAL" Bank board of governors, though I think that, too, would not "Sec. 14. The United States Government expressly C given that the acceptance of membership in the Fund and Bank shell not be deemed in any may to morally or legally bind the United States to continue such membership If (a) in the opinion of the Government of the United States the policies of either the Fund or Bank are not in accord with the letter OF the apirit of the respective Articles of Agreement or the provisions of this Act or (b) if for any other reason the Government of the United States determines It to be in the interest of the United States to withdraw." - a little troubled about the section on withdrawal. It acens to indicate that the United States is not entering this agreement either with confidence or wholeheartedly. However, I do not have any strong objections to it.] I feel rather strongly that it would be a mistake to have one executive director appointed for both Bank and Fund. If more coordination between the Bank and Fund is needed, It can through an amendment which can be later submitted to the governments after the Fund operates, (a) The Council, with the approval of the President, reserves the right to lthdram from either the Fund or the Bank, or both, at any time in accordance with the provisions of Article IV, section 1 of the Articles of Agreement of the Fund and Article II, section 1 of the Articles of Agreement of the Bank. Notice is hereby -7- O be wise move. 0 160 TRADE MICROFILM MARK TREASURY DEPARTMENT -2- INTER OFFICE COMMUNICATION DATE TO FROM Secretary Morgenthau April al, 1945 If anything of significance comes up which requires decision, shell, of course, get in touch with you be- fore any decision is made. Mr. White While at the Conference I will try to learn bether The Item on the agenda of the San /rancisco Conference of especial interest to the Treasury is "Arrangements for International Economic and Social Cooperation". there are any unnecessary obstacles to the quick considerstion by other foreign governments of the Bretton Woods proposals, in the event Congress adopta the proposals. It la proposed to set up under the General Assembly an Economic and Social Council which shell have for itc purpose "the creation of conditions of stability and well being which Bow much I will be able to contribute with respect to the matters desIt with at the Conference depends upon the extent to which the Secretary of State or other members of The organization should facilitate solutions of International International economic matters. the .S. delegation will want I advice, and also on the extent to which the Conference will 20 into details of are necessary for peaceful and free relations among national economic, social and other humanItarian problems and promote respect for human rights and fundamental freedoms." (A copy of some of the provisions in appended.) There are, I believe, seven Advisers to Secretary Stettialus to deal with this aspect of the conference: His Dominan of Johns Hopkins, John Foster Dulles, Charles Taft of State Department. Sr. Erannan, Assistant Secretary of Agriculture, Good Cox, HIP. Waring of Commerce and myself. There are . number of provisions under this general heading, which include the structure and framework of the organization, Its functions and powers, and relationships to International economic bodies such as the Interactional Monetary zund and International bank for Reconstruction and Development. C How for the Conference will 20 toward working out all the details is uncertain. Some of the countries regard the organization, function and powers of the Economic and Social Council to be at least S.D Important as any of the other aspects of the Conference, but 1 think the deaire of the U.S. delegation will be to postpone consideration of many of the details. Besides the relationship of the Economic and Social Council to the Bretton Woods proposals, the Treasury should have, I believe, a keen Interest In the organization and powers of the Council as they relate to a lot of other economic matters touched upon In the preliminary provisions. C PRECISION TRADE MARK - MICROSTAT White 1 DEPARTMENT OF STATE WASHINGTON In reply refer to April 16. 1945 A-C Department of State CONFIDENTIAL BUREAU 40 ENCLOSURE TO The Secretary of State presents his compliments to the Honorable the Secretary of the Treasury and transmite here- Letter drafted 4/7/45 ADDRESSED TO with for his information copies of two documents approved by The Honorable the Secretary the Executive Committee on Economic Foreign Policy for con- of the Treasury sideration of the United States Delegation to the United Nations Conference on International Organization. These docECEFF D-58/45 D-59/45 agents are (1) *Social and Economic Objectives of the General International Organization* (D-58/45) and (2) *Outline of Proposed Relationships between the International Trade Organization and the General International Organization* (D-59/45). Copies of these documents have been transmitted to the United States Delegation. Enclosures: ICEN? D-58/45 ICEN? D-59/45 RESTRICTION in PRECISION TRADE MARK MICROFILM MICROSTATE ROLL NO 165 CONFIDEN E2 CONFIDENTIAL ECEFF D-58/45 CONFIDENTIAL April 4. 1945 SOCI AND OBJECTIVES OF THE GENERAL INTERFATIONAL ORGANIZATION EXECUTIVE COMMITTEE on ECONOMIC FOREIGN POLICY Committoo on Spocialized International Economic Organizations Chapter IX of the Dumbarton Oaka Proposals provideo in part as follows: "Chapter IX Arrangements for International Economic and Social Cooperation "Section A. Purpose and Relationships. 1. With a view to the erestion of conditions of stability and well-being which are necessary for peaceful and friendly relations among nations the OrganizaSOCIAL AND ECCUONTC OBJECTIVES OF THE GENERAL INTERNATIONAL ORGANIZATION (As approved by the Executive Committee at its mooting on April 4. 1945) tion should facilitate solutions of international economic social and other humanitarian problems and pronote respect for human rights and fundamental freedoms. Responsibility for the discharge of this function should be vested in the General Assembly and. under the authority of the General Assembly, in an Economic and Social Council." It is the view of the Committee on Soccialized International Reonomic Organizations that the foregoing provisions should be elaborated in the Charter of the General International Organization so as to indicate more fully the objectives in the economic and social fields in respect of which it would be advantageous from the viewpoint of the United States to obtain ide international agreement The Consittee surfests that consideration be ivon to a statement of objectives alone the following lines: 1/ Section A. 1/ These objectives should be set forth in the Cherter wherever may be most appropriate. The opening phrases of the following statement might be placed amone the general objectives of the Organization which would presunably appear in Chapter T of the Charter The specific objectives listed in the economic and hunne welfare fields. however might well appear in the same Chapter of the Charter which deals with the establishment of the Economic and social Council. In order that these objectives may be readily acceated by the other governments no effort should be node to express then in any reator detail. CONFIDENTIAL 167 -3 -2- C for the control of opium and other dangerous drugs and for the provention of traffic in womon and childron: Section A. Purpose and Relationships. 1. 1.1th a view to the creation of conditions of economic stability and social well-being which are necessary for peaceful and friendly relations among nations, the Organization shall promote the adoption, by all nations, of appropriate measures for the fullest and most effective development and enhancement of the human and material resources of the world, including and for the onrichment of the cultural ondownont of all notions by incressing their opportunition for scientific, aducational, and other intellectual achievement. measures 2. The Organization, soting in cooporation with A. In the Economic Field for the maintenance of high levels of employment and real incomo in egriculture, industry, and other pursuits and the achievement, under conditions spocialized intornation organizations, shall facilitate solutions of economic, social and other humanitarian problems in accordance with the foregoing objectivos. T 01 atization shall, where appropriate, initiato negotiations among the nations concerned for the creation of any specialized coonomic, social, or other organization or agoney for the accomplishment of those objectivos. of progressive economic development, of improved labor standards, working conditions, and social security; distribution of essential chomodition; for the expension of the production, exchange and consumption of goods and services, the elimination of all foras of discriminatory treatment in internstional commerce and the reduction of tariffs and other trade barriers; for the development of orderly and stable exchange relations and the expension of productivo international investment; for the development and maintenance of communications and of transportation and the preservation of freedom therein; B. In the Field of Human Welfare for the promotion of respect for human rights and fundamental froodoma; for the protection and improvement of health. including nutritional standards; and for the promotion of wolfare standards for men, womon, and children; for 0 ( for the development of productive resources throughout the world, the conservation of natural resources and the orderly 3. The responsibility of the Organization for the discharge of the functions sot forth in this Section shall be Vested in the General Assembly and, under the authority of the General Assembly, in the Economic and Social Council. PRECISION TRADE MARK MICROFILM MICROSTAT BOLL NO CONFIDENTIAL CONFIDENTIAL SCEFE D-59/45 CONETDEITIAL OUTLINE OF PROPOSED RELATIONSHIPS BETWEEN April 4, 1945 THE TRADE ORGANIZATION AND GENERAL INTERNATIONAL ORGANIZATION 62 EXECUTIVE COISTITTEE or ECONOMIC FOREIGN POLICY T Committee on Soccialized International General Franowork Governing the Establishment of Relationships Economic Organizations Chaptors I. II. V. and TX of the Dumbarton Onica Proposals contain provisions regarding the responsibilities of the proposed Gonora) International Organization in the economic and social field. 1. It is provided that the General Assombly and under the authority of the General Assembly the Economic OUTLINE OF PROPOSED RELATIONSHIPS BETWEEN VOR TRADE ORGANIZATION AND (As approved by the Executive Committee at its meeting on April 4. 1945) 1 1 and Social Council would facilitate solutions of intornational economic and social problems with a view to the creation of conditions of stability and well-boing. This longusse inclies that the GIO and more specifically the General Assembly would be responsible for the formulation of policies or programs for national and internotional action designed to promote the fullest and most offective use of the world's economic resources and to achieve and maintain hish and stablo lavol of employment. Khon the Charter is drawn it may be desirable to uso this more specific langungo rather than the Innaungo of the present proposal. 2. The Proposols anito it oloar a) that the General Assembly of the General International Organization octin, through the Economic and Social Council, La to coordinate the activities of specialized international economic and social organizations. which would have responsibilities as defined in their respective statutos: b) that such coordination is to be achieved through advice and consultation (not instruction): and c) that 0 PRECISION TRADE MICROFILM MICROSTAT MARK ROLL NO b) The ITO should transmit to the Economic and Social Council the agenda and documentation for c) that the specific means of establishing channels of advice and consultation between the GIO and the specialized organizations 1a to be loft conferences and sting of the ITO, and should afford the Council c reasonable opportunity to commont thoroon. to future agreements to be concluded botwoon the GIO and each specialized organization. o) The ITO should transmit to the General reports. rocommondstions, resolutions and droft conventions of the ITO. and the Assumbly or Council should be froo to commont thoroon. d) The ITO should b. entitled to make recommondotions to the General Asscably nd the Economic and Social Council. The General Assombly and the Economic and Sociol Council should be entitled to pake recom- mondations to the ITO with regard to its activities or policica in the light of the functions or powers of other specialized organizations or in the light of tially similar It will be obvious from what follows that unloan all of the important oconomic agencies are brought into hormonious and close rolations with the GID the whole framework or coordination would bo seriously impaired. the economic principlos and objectivos of the GIO. Such reconsendations any include (1) proposols for the undertaking by the ITO of new activities dooling II with subjects falling within its constitutional C Rociproon] relations botween the GIO and the ITO The agreement botsoon the GIO and the TTO should mike provision for the following rolationships: Representation Representatives of the _economic and Social 1 torna of reference: and (2) proposels for joint collaboration by the ITO and other socialized organizations on subjects of joint concorn and methods for giving effect to such collaboration. Procedure for resolving conflicts of jurisdiction or policy The ITO should be authorized to roise with the on General Assorbly or the Economic and Social Council Council of the OIO should bo untitled to participate, without vote, in the deliborations of the Conference of the ITO and in other than cloud possions of the Exocutivo Board of the ITO. Representativos of the ITO should be entitled to participate. ithout vote, in the deliborations of the Central Assombly of the 010 and in other than closed sessions of the Economic any question involving conflict botwoon the policion and activities of the ITC and thomo of other specialized organization 1/ or of the GIO itsolf. The General Assembly and the Leonomic and Social Council should be authorized to review, on the initiative of the ITO, or on the initictive of any other specialized organization or on thoir own initistivo, any conflict botwoon the policios or activities of the ITO and those of other saccinlized organizations or of the GIO and Social Council. Information Agenda, Reports and Recommendations itsolf, and to make rocommundations to the specialized organizations concerned. If such roconncndotions do a) The ITO should keep the Economic and Social not result in resolving the conflict, the General Council fully informed regarding the activities of the ITO. The Economic and Social Council should koop the ITO fully informed regarding the activities of Associbly should, if necessary and after houring the organizations the GIO which are of concorn to the ITO. ( all Assombly and to the Economic and Social Council The foregoing points provide the general torms of reference for working out a drift agreement to establish rolationships between the GIO and the proposed International Trade Organization The main purposo of such on agreement would be to place the GIO in n position to harmonize the activition of the ITO with those of th. OIO and or other mojor 80001 lizod agencios. It in assumed that the agreements to be concluded botwoon the GIO nd such other agencies will, in so for as appropriate. be subston- b) The Eo IT is assumed that before referring any such conflict the GIO the specialized organizations concerned would have mode efforts to sottle the matter through their linison arrangements with coch other. PRECISION TRADE MARK MICROSTAT REG.U.S.PAT.ORF MICROFILM BOLL NO as -5-4- 1 authority in cortain circumstances to make recommonda. tions directly to governments. The Dumbarton Ocks Pro- organizations concerned, make recommond tions posals are not clonz on this point. While cortain provisions sucm to imply General authority to make recommondations to governments 1 under other provisions donling specifionly with the coordination of speciolized organizations the Council would appear to be restricted to tho unking of directly to governments. Administrativo anttors The ITO should cooporate with the GIO in work. out such arrangements na may bo found practicable intorfor ing the catablishment of uniform personnel practices, procedures and standards of componsation for changes of staff and for the standardization and recommundations to the appeinlized organizations 2/. The Economic nd Social Council should clearly be cappwared to moke rccommondations concorning the work of spocialized organizations to the General Assombly, and thom rooommendations should be available to governments. To donl with questions not adocutely comprehended within the jurisdiction of any single anocialized organization or where time doos not permit prior consideration by the General Assembly the Economic and Social Council should be ompowered to anko its rucomma ndations directly to governments. Tt in bolieved that in the Chorter of the controlization of administrativo services, including the collection and proporation of statistics. III Budgetary Roviow by the 010 GIO this mottor should be clarified. Specifically, it Under the Dumborton Oaks Proposals, the Economic and Council would bo empowered "to examino the adminis- Social trativo budgets of specialized organizations or agencion with view to making recommendations to the organizations or agencion concerned. This clause could serve noverni purposes. In the 1 first place while its edcouncy to sottlo jurisdictional GIO GD developud by the General Assombly. Proposals, the agreement botwoon the GIC and the ITO Council may "acks recommends tions, on its own initictive, disputes is open to dobato, it doos roonforce the other tochniques for coordination not forth in this momorendum. In the second place, it will provide 0 useful stimulus to sound uniform accounting and administrativo practices Fext, it will give on opportunity for bringing together at a control place the total of onch country' prospoctive budgotary assomments. Finally, it will elv platform for making clonr the necessity for universal financial support of essential organizations. Since those points are not spolled out in the 1/ Point 1(b). Section c. Chapter IX, provides that the with resourt to economic and social attors." 2/ Under points 1(c) and 1(d). Section C. Chapter IX, the Council is to coordinato the specialized organizations should anko thom clour in such a way as to facilitate the advisory function of the GIO. IV through rocommondations to such organizations, and to examine the budgets of specialized organizations with viow to making recommendations to the specialized organizations. 2/ The agreement betwoon the GIO and the ITC outlined clacwhere in this paper would contain an agroad limitation on the authority of the Economic and Social Council to make Pocommondationa directly to governments regarding the rosoa Possible Elaboration of Dumborton Oaks Proposols If the Economic and Social Council is to discharge C should be ando clcor that the Economic and Social Council ould bc empowered to make recommendation not only to the General Assembly nd to the speciolized orgenizations but also to governmento of member statos of the GIO 3/ It should be understood that such rocommundntione to governments should bu limited to recomundationa which cro clearly in hirmony with the brood policios of the effectively its functions of coordinating the cativition of specialized organizations, it will nood to have authority 0 lution of conflicts butwoon specialized organisations. It limitation in the Charter of the GIO itsolf. would not be appropriate, however. to provide for such a April 21, 1945 KINGRANDUM FOR THE SECRETARY Froa: Mr. Blough (For your information: no action required) After receiving your sesorandum of April 16 regarding your talk with Fred Vinson, I tried to reach his by telephone but have not succeeded thus for. I have talked with his assistant, Mr. Pritchard, WHO informs ne that Judge Vinson received the copy of your memorandum to the President on tax develop- ments. It may be that further information at this time on the subject has a low priority for Mr. Vinson, considering his other duties. Royf Blough 176 Truman 622-45 16-147 Stockholm reading only by special Dated April n, 1945 Distribution of true arrangement. (SECRET W) Rec'd 4:45 p.m. FEDORANDUM TO THX PRESIDENT: Secretary of State, There is trensmitted harewith for your signature Washington. form W-4 Revised, Encloyee's withholding Exemption Certificate, 1490, April 21, 5 p.m. which should be filed in accordance with the provisions of THIS IS OUR NUMBER 136 FOR MAR REFUCES BOARD IN the Individual Income Tax Act of 1944. REPLY TO ITEM 354 (Department's 694, April 10, 2 p.m.) It would be appreciated if you will return the Problem of finance has been discussed with local Managian labor group. They receive last $50,000 install- certificate to no when it 10 completed so that appropriate Dent from the United States in March and these funds action may be taken in connection with the payment of your will probably be insufficient to carry then through April salary. seven 5,000 kroner of $96,500 transferred to nim free 2018 confidential funds in Ankers. However except for operations. GLEEN promised to make available to group each additional funds as Clean say make available from The President's salary is paid monthly on the last day based upon . certificate of settlement issued by the General Accounting office. I of each month by check of the Treasurer of the United States, his special funds, local group will lack funds for May operations and still owe Clean 850,000 previously loaned then. Transal and Grander have supplied report covering March operations in Norway, translations of which are being forwarded by pouch. During March 1, 135 parcels were sent into Norway through licensing channels, containint approximately 15,000 kilogram of food, 3,310 kilogram of clothing and 300 paire of shoes. About 9,000 kilo- grand of food and clothing were sent in through underground channels, as well as other supplies contributed by Swedish organisations. During March approximately 1,100 Forwagiana were brought to Seeded through escape facilities financed in part for American labor relief. JOHNSON 1008 PLAIN PLAIN 177 178 Name 3.- Dated April 21, 1945 Dated April 21. 1945 Rec'd 9:16 a.m. Secretary of State Secretary of State Washington Washington 1020, April 21. 11 A.R. TO LEAVING FROM JOSSIE SCHVARTE NO. 26. 1019, April 21, 11 S.S. You apprepriated for Tugewlavia the - of $10,000 TO HOSSE CRAVITY FROM JOSKPH SCEVARTS NO. 35. - Is the light of present developments and after full for the first carter which apprepriation was exceeded by actual expenditure from here by $5,000, Well receiment discussion with Resaik recement appropriation $50,000 therefore for Tugeslavis for secent monthly for nerthern Italy for three seath period begin- quarter-525,000 which will make total exemptiture for sing May 1st. This represents the same rate of expendi- six months period $35,000. Funts are being used to ture that we maintained in liberated Italy during early provide urgent relief necessities in the form of feed per months operation. Important you bear is mind that under ) cels and financial assistance, Ve continuing our efforts agreement UNERA will not be operating is the forward obtain permission for JDC representative proceed Tugeslavia military areas and while we hope receive seas help for at which time arre precise budgetary requirements and displaced persons the major responsibility at lease is information will be made available, early phase will fall unes us. Reply urgently to Lisbes, KIRK KINK as KR 180 PLAIN Lendes Name Dated April 21. 1945 Dated April 21. 1948 Rec'd 4:35 P.S. Reg'd 9:20 a.a. Secretary of State. Washington. Secretary of State 4096, April 21. 6 P.A. Washington FOR VKD FROM NAME. 1000, April 21. 11 a.a. Please deliver . paraphress of the felleving message from Hareld Lister to X. A. Leavits of the American Joint TO MOSES LEAVITY FROM JOSEPH SCHWARTS NO. 26, Distribution Committee. Tea appropriated for Tugeolavia the - of $10,000 (MESSAGE REGINS) Reference Belgion Afforts being made here collect elethian by private organizations. for the first quarter which appropriation was exceeded Small stocks on hand which should be shipped to our General appeal not permitted by actual expenditure free here by $5,000. Would recea used from met. committee Purchases shortly. impossible except by govern- meat therefore appropriation for Tugeslavia for second free assumite as longer required for air reid precautions. quarter $15,000 which will make total expenditure for side appreviate grant of $280.00 first six months 1948 six months period $25,000. Funds are being used to provide urgent relief accessities is the form of feed parcale and financial assistance. We continuing our efforts obtain permission for JDC representative proceed Tugeolavia at which time arro precise buigetary requirements and information will be made available 100 has cabled Harrison ungine again prompt action your which British have approved. , Grance. Every assurance free Mente Fiere that ICA will participate extent equivalent $100,000 lease Kassa which however, subject approval British Treasury and formal action ICA Council. Liabilis press agency treasuit by next days or weeks lists survivore Bialystock, Leav. Lublin, cost 760 of which believe one-half have 35,000 cable After pounds, Arrangiar months to here negetiation through arranged for reimbursement approximately car Gredas, account. by Pelish Government for purpose KIRK Accordingly. I have $400,000 originally which intended stapent $200,000 $200,000 and yes is due couree will arrange transmission. RR maining your side hence contact Counseler Regesinski, Felies Cansulate, New York. who in few days should have received cabled instructions free his government here to relatures you. Please advise when yes have received to make $100,000 available to Pelish includes Faherer and Resour since I Committee have sereed which provided Februartsbark whole for assistance Palish Jove outside Paland $400,000 received by us and provided Felish Government 181 182 1 #2 PLAIN 4096, April 31. 1945, free Lenden Name makes available $200,000 or $300,000 additional for Rescue Committee program which will be subject to approval Pelish Dated April 21. 1945 Government and agesIf and provided money not be used to relieve Pelish Government or JDC of such old as they new Rec'd 9:16 a.s. rendering. (MEDICADE ENDS) Secretary of State WINANT Washington JT 1019, April 21, 11 a.s. TO MORES LEAVITY FROM JOSEPH SCHVANTS NO. 25. In the light of present developments and after full discussion with Resails recessent appropriation $50,000 monthly for northers Italy for three month period beginsing May 1st. This represents the same rate of expendi- ture that we maintained in liberated Italy during early meaths operation. Important you bear is mind that under agreement UNITAL will not be operating in the forward military areas and while we hope receive some help for displaced person the major responsibility at lease is early phase will fall upen us. Reply urgently to Lisbea, KINK KR PRECISION TRADE MARK MICROSTAT MICROFILM ROLL NO. 283 Sofia via away ASB-56 This telegram must be purposesed before being condicated to anyone other than Government Dated April 21, 1945 Rec'd 2.50 P.S. Agency. (RESTRICTED) Secretary of State, Washington 215, April 21, noon. I have received the following telegram from Troutman Istanbuls "The Joint Distribution Committee would like to for- ward in care of your mission substantial of - relief supplies for distribution by its committee in Sofia. - this meet with your concurrence?" a Have replied "I believe that supplies should be consigned to Dr. aside Marcus address Tear Sincon 100 SoCia. The Mission is prepared to assist his in whatever way possible. If Department has other views please instruct. BARNES - -2COPY No. 185 184 4 NOT TO RETRANSMITTED On fifth Army Front U.S. Troops have pusho forward against deerchaing Posistance and now some four miles short or highway nine "ost of Casolocchio while on lost con at further gains made South of CustoInuovo and 3. B. Jarzana. O.T.F. SECRET Purmo. Control Soctor. Our forces captured Kague on Irroundiy against alight opposition while further east 6. OPTAL No. 127 our troops have by-passed ryinmana and are now operating in arona 9 mile S.E. and 12 milos -outh this town. Information redeived up to 10 A.M. 21st April 1945. AIR. NeveL 7. 1. Baltic. To LUTZOW bonbod at Swindomunde on 16th noir observed by recommissance to be down by the storn and probably a round. Bember Support and other targots. 20th 3. Bombor Command Lonenstors 93 (missin one) borbed oil donot aggonaburg (345 tons). 0.3. cacorted horve Some rs 503 (missing one) droppol 1743 one visually on 11 rail torgota in orlin and Rugensburg CFC a with mostly good results Home waters. 20th/21st. Cno of H.L. Frights annie at least four explosive motorboats in gholdt approaches 2. when five prieonors ente taken. SH..2P (Air) Modium Bomboro 560 dropped alio tons with MILITARY Mostern Front. Southorn Soctor. Cr 13th and 15th First French Army continued its stondy progress in Black Forcet area South of Strnaburg while East of Providentadt it advanced 15 nilos over-runnin number of places including 1 good results on pailung contor and supply dopota whole fightore and fightor bembors 2264 (missing 17) oporated Northorn and Control soctors destroying some 1,200 rail and road vehicl and inflicting onomy casunition 3.10:16 in combnt and 88.0.111 on ground. 20th/21st. dambar Command dcapstahod sirgraft 117 Tubingon where bridge over Rivor Socker intect. (outstanding ono, including 81 Borlin. Hello by Right Corna of Seventh U.S. Army now throw tons on- tons railing brings Shttenb FS (25 1ca N.B. innabruck) where both bridges pirticlly distreyed, 318 toos on rnilway vinduct over This ndvango Easvarda continuod for further 15 milos, togothor with Southward thrust of 20 miloa from direction of circle Stuttgart. On 19th Nurumber talton by Seventh U.S. Army and armoured olomonta pushed 15 miles S.M. in direction Rogonsburg. Control Soctor. Third U.S. arry made gains up to 15 miles on wido front botwoon Bayrouth and Plauso. Further North First U.S. Army took Leipzig on 19th and on aamo day cleared "allo After heavy housa to house fighting. Considere able where resistance also collegeing. boin upacmy Hortzattraked ocket also on 19th in divisional strength, supported by some 25 tanks, half tracks and solf-propolled guns, in area N.M. penotrating amo 15 miles towards Klotzo before boing brought under control. Northern Soctor. Second Arty troops have cleared South bank while of alboother from South Lausebur Westwards to suburba Harbur progress - in clussion troops out numburs - of *Poston autobalin. south of latter town resistance stiff and progress slow while further .ost cnomy also .sisting strongly against our alvances on Oldenburg and Endon where aceo henvy counter attacks encountered. Other arons. The Rhur rocket now complotely eliminated na also Gorman resistance on North a du Dironic Nature. 4. Bestorn Front. Central Soctor. Garuana admit Russian advances to ut thin four los Puratonwaldo (s.b. Borlin, Further South Russiana roport capture cortain places ncross Spree S. of Cottbus while Gormana state Russion foress now 15 milos Host this LONG. Southorn Soctor. Further advances un to 2. miles made North of Vienna. 5. Wostorn Front. 19th/20th. Bombor Commond despitched mirgraft 190 (without loss) 79 Borlin, 35 ittstock and 80 Italy. Lighth army Sector .. Argents British troops now app oaching bridge one milo N.S. Nolinalla while to Nost, Indian and H.W Zonland troops have advanced ".E. and Enst of Budrio while still further Most Polish forcus have mained one milo against dotormined resistance Tost of Modicina. 19th "unvy bombora 619 dropped 572 Avisio, 163 ons on railway contros Rosechoim andoperated 113 tona bnttl on Alagenfurt inct onl aircraft 127 (missing 91 r ns. 9. 10th Libertors 27 (missing one) successfully hitnekud dooks longkok. MICROFILM MICROSTAT ROLL NO The New York Times. APR 22 1945 NEW PRESIDENT EASES WASHINGTON TENSIONS although he Francisco Secretary This His Firmness, Vigor, Quick Decisions And Drive for Bipartisan Unity Lift the Capital's Spirits PRESS LIKES HIS FRANKNESS By ARTHUR KROCK ASHINGTON April the end of the first week in office President accomplished these important things shown vigor, promptness of decision con with difficult problems the are new to him achieve the highest possible degree of hipartiman unity with Congress loyalty to policies that Franklin D. Roosevelt and White House atmosphere has good and of MARK to TRADE the cheer press and time . they asswered their questions samistakable has answers were for the revision delegates His Task 180 -2Copy No. Constal Comsand Halifazes attacked shipping Skagorrak whom direct hits obtained on two 3 500 ton NOT TO BL RETRANS)ITTED shipp whi in loft on fire, while osquitoos 45 (11) thout loss) returning from shipping reconnisanned off Norway destoryed 9 out of 10 aircraft encountered over worth Son. O.T.P. STORT 21st/22nd (fight). Bombor Command aircraft despitched: 150 (missing 21 109 Kiol, 20 Sea Wining and 32 domber Support and other targota. OPSTI To. 128 Information received up to 10 A.M. 22nd April, 1945. NAVAL Anti-au/marine Operations. 1. 21st. Promising attack made on U-boat off North coast Ireland by 6th oscort group. Liberator attacked surfaced U-boat off the Skaw with unobserved results. MILITARY. Meditorrancan 6. 19th/20th (night) Liberators dropped 220 tons in 01080 support Eighth Army. 20th U.S. oscorted heavy Bombora 711 (missing 7) dropped 1639 tons railwer tergeta Brannor routo, South Austrin and rond bridges PO Valley wails tactical aircraft 1/34 (missing 13) operated against Failway targota Innabruck Area, communicati ona Forth Italy and gave support battle Areas. S.E.A.C. 7. Bombors and Fighters 170 attacked acmunications and Army support targota Control and Southern Burna. 19th. Wastern Front. 2. inflicting enemy casualtion 6:1:2 in corbat and 56:0:32 on ground. Southern Sector: First French Army continued advance Last of Rhing and South and latest reports state spearheads miles from Swiss border, while Stuttgart now completely encircle: Central Sector: Third U.S. army troops crossed Czech. border noar Asch. First .S. Arro has also cleared Loiozig and area between this town and Halle while to North Domany has been entered and Harz pooket reduced by half. Troops of Einth U.S. Army advance 10 miles down left bank of Rivor >lbe from itten berge. Northorn Sector. Troops of Second British arms meeting fierco resis tance South assbur and 3. 3. dresse. cleared Other AT as: Both sides Gironie Natuary now of enerly and F.S. taken this operation number 10,000. 3. Eastern Front Central Sector Russiana now within 15 nilos of centre Borlin from NEW and East while further South they he o advanced 25 niles lost Cottbus and to with 15 miles of Opesion from N.E. Italy 4. eight Army Sector: On right U.E. divis ons made substantial gains to Peach area 6 miles South correra phore stubborn German resistance boing oncountered. On left good roSTOPE also made by Indian, New Zonland and Polish troops North or highway 9, with latter reaching contro of Bologne at 0600 hrs. 21st and 2 hours Inter linking up withw.3. trocpa who had entered city from S.V. Fifth Army soctor: U.S. and South African troops maão good headway neat Bolonn where they have crossed highway 9 at many points and have londing elements as for North as San Giovenni. (15 miles H.N. Bologna./ AIR 5. Joster Pront; 20th. SHASP (Air): additional reports state further aircraft 630 (missing 1) operated Southern Sector inflicting enemy casualtios 70:0:102 on ground. 21st. U.S. bacorted heavy bombers 329 (outstanding Bombers 4. Fighters 6) attacked, using Pathfinder technique, railway contro Runich (260 tons), Ingolated (4.44 tons, and airfield Landaborg (16 tons). SHAEF (Air) modium bombers 115 dropped 203 tons railway centre Attnang-Puchoism (S.W. Linz) with excellont results, while Fighters and Fighter bombers 1230 (missing 7) operated all sectors destroying 290 M.T. and 48 100 cmotivos and = ( TREASURY DEPARTMENT 189 -2- 0 INTER OFFICE COMMUNICATION ase, General Olestead said that the Generalissimo had told them that be intended to cut the number of troops be pays from DATE April 23, 1945 their present figure to about 3-1/2 million, but that the Generalissimo had not indicated to the Army that he expected more gold from us or any other favors. General Olmstead said that the Army and the Chinese were concerned about on economic collapse in China. If that occurred Secretary Morgenthau TO FROM Mr. Coe FC did not know how Subject: Conference with Judge Patterson on China an General they Olestead thought they that could get anti-inflation their local program supplies. in selected areas might be successful the areas to be the ones tlat the U.S. Army is to get supplies from. By questions, Judge Patterson got the General to indicate that the Army was minly concerned with the trucks and the textiles which the A= you instructed I called on Judge Patterson on Monday, takin with me Jr. Collage of the State Department, who will Clay said would not for him. Judge Patterson called in General Olastead who is in charge of supplies for General Medemeyer and came back in the T. V. Soon party. O 190 Chinese were asking, and that the decision on the gold was something for Secretary Glorgenthau to make. Background Political Situation 1 tole Judge Patterson that the Chinese were requesting |Pently increased shipments of gold, that you had spoken with the President who naked you to COPPY the ball, and that on and replied you would take our action in consultation with War and State, I gave the background of the loan, to uses the Chinese cad made of it. our own sense of responsibility and said that before you decided you wanted to know what Mr. Collado brought out that the Department of State might be concerned about the political repercussions, if the Chinese failed to pay the gold which they had promised on the certificates which they are now Issuing. (It would take SUSSO million more gold to meet these obligations). 0 General Inflation the militar planned or China. Judge latterson and General Olmstead both recognized that the inflation could not be stopped by any of the measures under discussion, and that it was only a question of pelliative Military Plans Judge Patterson said the military lane were still unsettled. General Olestend said, however, that all the militar plane for the next period required us to get from Chinese sources a considerable proportion -- I judged about 20 to 30 percent of the supplies needed for military operations. This would be the case, until a landin as made and a corricor out from the DOB to Free China. The cutting of this corridor night take anywhere from 12 to 18 months. The military were Interested in the area around their lines of communications, that is, corruption. Abuses I stated that, spart from other issues, the Treasury was largely the Kumming area in Southern China and the route from there to Chungking. The General said they REG a program for equipping 36 to 30 Chinese divisions. The Chinese had been giving very good cooperation, according to the General. Judge Patterson said Yes, but they GO an awful lot of lying sometimes. In response to # question from O concerned about the manner in which the loan had been used and the restricted number of individuals who had benefited. General Olmstead gave a good example: ae said that three Chinese and three Americans had conferred for hours and finally agreed on the recent increase in the gold price from SCN20,000 to SCN35,000 per ounce. The agreed effective date was 48 hours from that time. The next day was a holiday. However, during the second day the demand for cold was out of all proportion to an recent purchases and n. big business was done. One of the principal purchasers was Jesnette Kung. 192 -3. O April 23 1945 3:30 p.m. Next Meeting with Generals Olmstead and Somervell. Conclusion General Olmstead will try to get more gold sent there, on the grounds that it will somewhat ease the inflation. Unless awayed by his subordinates, Judge Patterson will be inclined to leave the atter up to you, because he thinks you ought to decide whether a carticular financial technique will be helpful. Collago of the State Department will probably srgue This latter that the figure "arrears" is probably -- US50 what million Soong -- hopes should to get. be sent. Conversation with Clayton At 3:30 on Monday, Clayton called me and said that be wanted advice. Leo is to WBS sore that be been left that the march Directive on and be is. will 28 Clayton tomorrow. thought out of and Leo Crowley Crowley thought Germany, meet had that him Leo Clayton. would it be all right with ne and blamed said sure. - Judge Patterson thought that you would be calling or seeing him on Wednesday about this. Meanwhile, he will talk TREASURY DEPARTMENT April 23, 1945 8:15 a.m. INTER OFFICE COMMUNICATION 1 Conversation with Clayton DATE April 23, 1945 I called up will Clayton tuis morning and told aim that everything BBS all right. and I'd be home at midnight. I wanted him to the through on the reparations question and revise 1067. in the reparations Subject: I don't think that Let do that. 1 don't know what WILE in the memorandum to the President. things have been going, and stettinium asked me If work agreeable for directly with him economic matters and 1 did not have to 6° through Grew and work with OPEN on political matters. Stettinius hadn't said a word to him. And as well, as said something to Dear on Acheson. don't suppose that was too tactful, but I can't understand - otettinius tells it to Acheson. At least be must have told Acheson part of my conversation and didn't tell Clayton. Clayton aaya he has been on the hill the last five or six days on this heciprocal irade thing, and the is having a hell of a time. ne #ounded very harassed. Anyway we'll get off on that Tuesday morning. " then on 1067 said, "Let's get it through while delloy is still here. And be said he would arrange for meeting at 10:30 tomorrow morning, and he agreed that it was important to get it through. I said, Did Stettinium tell you tost 1 Lave not been satisfied with the way O Outbacks: Sharp outbacks in certain types of aircraft last week served to focus renewed interest on reconversion problems. According to the Army Air Forces, the outback in aircraft production during the remainder of the year will amount to 15 percent on a weight basis. Effects of the outback on the Ford Willow Run plant and on important subcontractore at Detroit are seen in the renoval of the Detroit area from the No. 1 "acute labor shortage* classification Reconversion; Following earlier approval of machine tool orders further steps were taken by the MPB last week to facilitate reconversion of the automobile industry to civilian production, including authorization of substantial expenditures for plant readjustments and rehabilitation of tools and equipment. recent survey by the NICB discloses that earlier business fears A Lubin, and I said that 1 knew that Lubin masn't to go, and the resident is going to send somebody else. But C The Business Situation Week ending April 21, 1945 Summary because be had . memorandus from the President about to Mr. Haha FROM be Dad just read and be thought it has going to be all right. me didn't think there was so much of . hurry as SecretarsAlargenthau TO ne said be hao a document which he had with him which was CONFIDENTIAL over the difficulties involved in cancellation of var contracts in general has been replaced by a confident attitude. Steel operations: Steel ingot production in March rose to the third highest monthly level on record, following the unusually severe operating conditions excerienced earlier in the winter. Steel operations in April have been hampered by unauthorized coal strikes, which ourtailed scheduled output last week to 91.9 percent of capacity. Preliminary reports indicate that coal output improved last week, and steel operations during the current week are scheduled at 93.2 percent of capacity Consodity prices: The all-commodity wholesale price index in the week ended April 14 rose 0.4 percent to a new vartime peak, 40.7 percent above the pre-war August 1939 level. The BLS index of basic commodity prices showed little change last week, with moderate declines in corn, wheat and steers offsetting a further advance in cotton prices. Stock prices: Stock prices last week advanced to a new high for the year, although trading declined considerably after Monday when transactions on the New York Exchange reached the highest level since June 16, 1944. Industrial stook prices in London have advanced to a new var time high and now stand above the highest levels attained in 1929 and 1936. PRECISION MICROFILM MICROSTAT TRADE MARK ROLL NO -2In order to hold down lay-offs at the Murray Corporation, Outbacks in var orders increase the WHO has authorized the Corporation to change the work week at its main plant from a 48-hour week to 8 40-hour week. This in said to be the first time such action has been taken in a major Detroit var plant since the automotive industry converted Inpending reconversion problems growing out of outbacks in war orders and lessening military needs inFollowing Europe continue recent to feature current business discussions. indications of & Blackening in shipbuilding, important outbacks in aircraft production were revealed last week. The to war production. output of B-17 Fortrenses and B-24 Liberator bombers, among Procedure for handling outback announcements being studied others, 18 to be out sharply in coming months. In this connection, both the Lookheed Aircraft Corporation and the Douglas Aircraft Company believe that their voluntary quit rate Some of the announcements of outbroke in aircraft production last week Yere made by individual manufacturers, and and other factors will be sufficient to enable them to operate without any actual lay-offe of employees. the WPB chairman subsequently expressed with the handling of the matter. In addition to apparent fears over the adverse effects on var workers, Mr. Krug took exception to In the case of the Ford Willow Run plant, however, more serious repercussions are likely. The Army Air Forcee have announced plans to terminate production of Liberator bombers this plant not later than August. and the opinion in expressed that the plant probably will not be used inmanufacturers other war work after themselves, aircraft the addition date. that outbacks. the affected subcontractors will great number Douglas Aircraft and Lookheed Aircraft are reported to have notified more than 3,000 subcontractors and materials suppliers of the reductions. He alleged exaggerated reports of outbacks in VAT outbacks production. in military ennouncements stated that in the future, procurement will be made on a national basis from Washington and that . committee is now considering the procedure to be followed. Recent estimates of outbacks in var production after V-E Day have shown considerable variation, but on the whole have tended foreshadow sharper outbacks in actual production than earlier anticipated. of at to In of be by to D According to the Aray Air Forces, the outback in aircraft production during the remainder of the year will amount to such 15 percent on a weight basis. Production of some planes, 0.0 the B-29 Superfortress and others, will be continued in increased quantities, and it 10 indicated that Navy plane procurement will not decline until the decisive stage in the war against Japan has been passed. Employment slackening in Detroit area The recent outback in aircraft production appears to have contributed importantly to a noticeable easing in the manpower situation in the Detroit region. The War Manpover Commission announced last week that the Detroit area was being transferred at once from a No. 1 *acute labor shortage* classification to a No. 2 clasnificction. In addition to the sharp outback at the Ford Willow Run plant, the Brigge Manufacturing Company, the Rudson Motor Car Company, and the Murray Corporation have begun to lay off employees due to aircraft outbacks. Further authorization granted for automotive reconversion Following earlier approval of the placement of orders for 850 millions worth of machine tools and equipment the WPB last week approved applications of various automobile manufacturers to spend approximately $35 millions for plant readjustments and about 840 millions for rehabilitation of tools and equipment needed for civilian car production. An AA-3 priority rating has been granted automobile manufacturers for obtaining itaschine tools was reported Moreover civilian production. renume needed last week that the VPB 10 preparing an order which will permit producers of . broad list of consumer durable goods to place priority-rated orders for machine tools needed for peacetime to production. Business fears over contract terminations diminishing Another encouraging development of the past week, in connection with the post-war outlook. was the revelation of results of a survey by the NICE regarding the difficulties of var contract cancellations. A survey of 150 executives revealed that, in contrast to earlier fears that cancellation of var contracts would result in staggering inventory losses, a -5companies to operate successfully. Moreover, it is asserted that with the return to peacetime conditions the companies products business executives in general are now confident that such will not be the case. More than half of the companies that have experienced terminations state that they have had no difficultiee of any kind. An overwhelming majority of the companies reported that at least 75 percent of their inventories are proteated against losses under existing termination practices. It remains to be seen, of course, whether the 150 executives polled adequately reflect the experience of business as a whole. particularly small business. In this connection the following remarks of one executive regarding the position of small manufacturers in of interest: higher-priced will receive the benefits longer which they have manufactured during the war, and which have of no served as an offsetting factor against losses in other lines. Construction awards higher in March After running at a very low level throughout 1944 and the early part of this year, total construction contract awards as reported by the F. W.Dodge Corporation improved noticeably in March. Total awards during the month were the highest since August 1943, and were 67 percent above the March 1944 level. 'At present many small manufacturers are riding along with large bank balances and do not have the faintest conception of the problems that will face then when termination comes (See Chart 2.) They are not set up to handle terminations properly; they fail to realize how rapidly situations will change at that time: and they do not understand that most of their working capital, 17 not all of it, is going to be tied up in inventory which they are not prepared to convert into cash." Steel operatore hampered by unauthorized coal strikes Following the production looned suffered in the early part February due to severe weather conditions, steel ingot production rose sharply in March, and attained the third highest monthly output on record. Nevertheless output van still 1 percent below year-earlier levels. (See Chart of Steel operatic in April have been hampered by a shortage of aoking ooal arisis from unauthorized strikes in the ooal mines As a result of this situation, operations last week were scheduled at only 91.9 percent of capacity. However, preliminary reports indicate an improvement in coal output last week, and steel operations during the current week are scheduled at 93.2 percent of capacity. (Refer to Chart 1.) Although price ceilings on some basic steel products were raised in January, steel producers contend that further upward revisions are necessary. During the past week, 40 non-integrated steel producers, representing about one-fourth of the wage earners in the industry petitioned the OPA for "immediate, equitable and serious prevent further order adequate price adjustments in to financial losses to a great many of the companies. They contended that products which will be manufactured under peacetime conditions will not, at current prices, enable most of the = Examination of the detailed figures, however, reveals that the increase was very largely due to a sharp increase in Government-owned nonresidential projects. Two large powder plants in Indiana were by for the most important items in the month's awards. Residential construction awards, as night be expected in view of building restrictions and materials shortages, continue at very low levels. with avards in March 24 percent below the corresponding month last year and 55 percent below March 1942. Divergent commodity price trends Moderate price declines for steers, corn. and wheat offeet a further advance in cotton last week, causing the BLS basic commodity index to continue within the narrow range of the previous 5 veets. (See Chart 3. The grain futures markets turned down somewhat, following their sharp advances of the previous two weeks. Barley futures on Friday declined 5 cente a bushel, the permissible limit, influenced by reports of enlarged imports of Canadian oats, which are likely to reduce the feeding demand for barley. Cotton futures. on the other hand, reached new high levels with the May delivery at the highest level of any month since the 1927-26 season. Higher prices for agricultural products out the BLS all-commodity index noticeably higher in the week ended April 14. raising it 0.4 percent to a new wartime peak 40.7 percent above PRECISION MARK MICROSTATA MICROFILM ROLL NO. Action taken to increase neat supplies A program to increase the production of neate and to improve their distribution, particularly to metropolitan centers, has been announced by the Director of Economic Stabilization The 10-point plan involves an increase in subsidiee of possibly $27,000,000 a year, and the addition of 500 agents to the OPA staff for more effective notion against the black market. the pre-war August 1939 level. (Refer to Chart 3.) The rice VAB led by or increase of 3.9 percent for fresh fruits and vegetables. Potatoes were sharely higher, and substantial increases occurred in prices of apples and lemons at Chicago. The all-commodity index 18 now 1.6 percent higher than at the name date last year. Major details of the program include (1) cancellation of a scheduled reduction in the general ceiling and subsidies on live cattle, to encourage feeding together with an inorence in the subsidy spread between the higher and the lower grades of oattle, insure promote of grades; (2) a special subsidy to against lossesthe to production slaughterers who can prove that they Car shortage reduces mills' whent supplies to better A serious shortage of available whent in all major milling areas, due to the shortage of freight care, VBS reported to the Var Food Administration last week by n committee of grain nen representing the Lower Lakes milling area. According to this committee grain receipts at the for markete of Minneapolis Kansas City and Buffalo are running At about 40 percent of operated profitably in the 1938-41 period: (3) restriction on farm elaughter for sale: (4) a limitation on elaughter in plants not Federal under inspection: daily milling requirements while mill stocks available to fill the gap amounted on April to the equivalent of only 18 days full running time. Millers expect an extrene pinch to be felt $ shortly after May 1. The shortage of flour receipts in eastern markets has begun to effect the consumer according to press reports. The Northwestern Miller mentions that grocers in New York City have begun to limit sales to 5 pounds per customer, and in some communities to 2 pounds. To help relieve the shortage of freight care in the whent regions, the Association of American Railroads has ordered a moderate increase in the number of empty boxoars delivered daily to Chiengo and other middle-Western gatewaye. Furthermore, a permit eystem for moving all graine and grain products in western railroad territory is expected to be nut into effect shortly, diotated by the need for noving large quantities of wheat and flour required for feeding the liberated areas of Europe. The proposed plan would be under the direction of industry committees to be net uo in the major markets. While milling groups in Minneanolis and Kansan City oppose the plan contending that the permit system would do little to solve the basic problem, the ODT reportedly has indicated that the only alternative would be a priority system for movement of army flour and wheat. Army purchases of flour have recently been accelerated, according to trade reports. Estimates in the trade of Army needs during the coming months range from 25 to 33 percent of total mill production, and mills are pessimistic about their ability to meet both civilian and Government requirements in view of the transportation bottleneck. (5) increases in maximum prices for Army on beef There will be no increase, however, in general ceiling prices meats. Stock prices rise to new high Stock prices advanced sharply at the beginning of last veek on the largest trading volume since June 16, 1944. Further moderate advences to new high levels for 1945 occurred on Tuesday Friday end Wednesday, (See Chart but trading 4.) Moderately activity declining declined steadily price tendencies through which developed after aid-week were supplanted by renewed firnness on Saturday At the close of the week the Dow-Jones average of stocks was 3 percent above week-earlier levels. Publication of short interest figures during the week revealed that as of April 1 the short interest on the New York Exchange vas 159,000 shares below the total of 1,520,000 shares reported as of March 15. Nevertheless the short interest WILE still three times as large 0.8 at the time of our entry into the war. The rise in stock prices in the United States continues to rise industrial stock prices London. In fact, at the end of last week the London Financial Times industrial stock average stood at the highest level attained since compilation of the average was begun. Last week's closing average be accompanied of 145.4 140.2. by & 1 in at compared with the 1936 high of 143.5 and the 1929 high of Recent publication of 1944 average earnings of stocks comprising the Dow-Jones industrial stock average revealed that average earnings last year aboved a gain of 3.4 percent over the PRECISION MICROFILM TRADE ROLL NO -61 1943 level. In comparison, the prices of stocks included in the average aboved a gain at 6.3 percent 1944 thus which narrowing between prices in and earnings had Chart 5.) It no a in recent months, stands about 20 of average. Assuming that earnings thus for in 1945 no developed industrial somewhat result of the since stocks the disparity 1939. rise now (See points the will Dow-Jones above be noted have the average 1944 shown that great change, this would indicite that the relationship of prices to earnings is now fairly close to that which prevailed on the average before the war. PRECISION TRADE MARK MICROSTATE MICROFILM ROLL NO. Chart Chart 1 203 TOTAL CONSTRUCTION CONTRACT AWARDS (37 States F W Dodge Corp) STEEL INGOT PRODUCTION 1 DOLLARS PERCENT Millions DOLLARS Millions PERCENT 943 Percent of Capacity 1000 1000 100 1942 100 800 800 9441 90 600 90 1945 600 1940 1940 80 400 400 80 200 TO 200 70 1944 1945 o o III 60 FEB JAN MAN APR MAY JUNE AUG JULY SEPT OCT NOV DEC 60 FEB MAR APR MAY JUNE MAY AUG SEPT OCT NOV DEC JAN NET TONS Millions RESIDENTIAL CONSTRUCTION CONTRACTS AWARDED NET TOMS Millions 1943 Tonnage DOLLARS Millions DOLLARS William 1942 200 200 7 1944, 1940 7 150 150 1945 6 100 6 100 5 1944 50 5 50 1940 4 1945 o JAN FEB MAR APR MAY AND JULY AUG SEPT OCT NOV DEC o 4 3 ( - - DEC 3 FEB MAR APR MAY JUNE ART AUG SEPT OCT NOV - JAN -/- Office - been Therapy Source Item C-532-A - The Services 0.554 Chart 4 205 STOCK PRICES. DOW-JONES AVERAGES Daily 944 WHOLESALE COMMODITY PRICES DOLLARS 1945 1944 1945 30 Industrial Stocks PERCENT PERCENT 160 1926 .100 WEEKLY 107 155 107 150 106 106 145 05 140 28 Basic Commodities B.L. S 105 54 20 Reiloods 104 104 so 103 889 Commodities BLS 03 102 102 42 101 30 IS Utilities 101 28 100 100 JAN MAR JULY MAY 1944 --- Office the the Treatment SEPT NOV JAN MAY MAR 24 1945 24 24 P.156.5 SHARES Volume of Trading 1945 MICROFILM MICROSTATA 0 STOCK PRICES AND EARNINGS 30 Industrials Comprising Dow-Jones Average DOLLARS DOLLARS Per Share Per Share (Prices) de aralage) 190 13 180 170 11 160 Earnings 10 150 9 140 8 130 7 120 6 Prices 110 5 100 90 3 80 1934 1935 1936 2 TRADE MARK 12 PRECISION 1937 1938 1939 1940 1941 1942 1943 1944 1945 Source Dew - - Warrans' Office Secretary Treasury P-286 PRECISION TRADE MARK MICROFILM MICROSTATI LPR-626 BOLL PLAIN Lisbon Dated April 23, 1945 Rec'd 10,20 p.m. Secretary of State, Washington. 859, Twenty-third HOUR 392 JDC 224 FOR LEAVITY FROM TROBE. layer received request from Rabid Joel Teitelbaum Darich for assistance his program of aid to children many of whom allegedly living in nonjewish homes. Saly advises be prepared assist but wishes know whether Federation Canulatan Jews Nassau Street with whom Teitelbaur associated is organization with which you ready cooperate. Also requests information relative your relations American Hangarian Relief Incorporated whose work Switzerland headed by Francois Monty and with which Saly favorably impressed thus far. Please advise. BARUCH 1001 PRECISION TRADE MARK MICROSTATA MICROFILM BOLL NO 209 208 CARDE TO AMERICAN LOCATION, BEAN, you 250 WAS HOARD Please deliver the following cassage to Dr. wolf Freudenberg, 41 CASLE TO AMERICAN LIGATION STOCKHOLD FCB CLSSH, FROM THE WAR REFUGES ROAD Please deliver the following message to Hilel Storch, Postbox 7306, Stockholm from Furt drossman of World Jewish Congress Avenue de Changel, Geneva, from Island Stor Robinson of American Ciristian COOTS ACCORDING TO UNIT TELESSAPHIC AGENCY APRIL 16 CAUP Consittee for Ibal'agoes, Inc.: LINGATION ANCLOUS TEAMS NOSTHER YOU ARLS SEND FOOD SIPPLING TO THE LIMIRATED PERSONS THERE. UNQUOT% HOUSE AX. 19. STOP QUOTE SECOND REJUIST I PROTESTANT SPISCOPAL CHURCH FROM TOOPHAT CANNOT ASSIST INDIVIDUALS. wait is DONE TO: FOR ALL PROTESTANT CHUNCH GROUPS. THIS IS WITH STOCKHOLD NO. 361 THIS is are NAME CARDS NO. 507 4:30 Falls April 23, 1945 4:30 Pello April 23, 1945 PRECISION TRADE MARK MICROSTAT MICROFILM ROLL NO 210 Ankara via Any JP-686 This telegram mat be paraphrased before being communicated to anyone other than Government Dated April 23, 1945 Rec'd 9:10 a.m., 24th Agency. (RESTRICTED) Secretary of State Washington. 552, April 23, 7 p.m. FOR DEPARTMENT AND WAR REFUCE BOARD REENES 520 The SS departed Istanbul April 21. According to Bredish Legation here she carried following persons in addition to crew, 311 Germane from Turkey 50 Dermane taken aboard at Port Said 1 Spaniard, 2 Partuguese - 51 Street - Swedes. Istanbul newspaper VATAN April 21 repor's ship carried following cargo loaded in Istanbul (in tons): 1200 chrone 900 reisins 200 enery, 500 Masalnuta, 60 peachatones, 50 liquorice, 2 cigarettes, 60 casings. PACKED KDA PRECISION MICROFILM MICROSTATI TRADE MARK ROLL NO 211 PARAPHERES OF TELEOHAN RECEIVED 0 212 American Consulate General, Manila FILCES: (3008) army 10 securing in additional 200 to 30 ,army officers TO: Sebretary of State, Washington DATED: April 23, 1945 April 24, 1945) NUMBER 134 DECEIST A cable is boint sent to thronades and Oanona by Secretary Confesor, with the approvel of TOAU, or which an approximate summary is given as follows: The greator part of Leyte and Santa Ana district of Manila has been turned over to the Commonwealth by PCAU, and it will turn ovur other districts gradually finishing by the first of July probably. On the first of September will take over procurement and the recainder ( of commodities procured by the arry will, except those needed asy. Evidently the Government plans the handling of the distribution of imported goods until private trade has been restablished and on the distribution of domestic goods, to intograte with procurement. In vieit of tandencies in the past tocard government operation and control of transportation trade,et cetera, the trenc toward government operation is disturbing. In order to assist in the roestablishment of civilian economy under whatever supervision necessary, an association of promo truate and bus operators has requested arry aid in securing 500 trucks, either new or used, with repair facilities. The army 1a in favor of cooperation with the CommonrosIth Government but no could profer to 300 transportation reostablished that way. ( for military purposes, bo turned over to the Commonwealth STEINTORF The aray has secured and 12 shipping trucks for delivery to the Commonwealth Government, in order to most the transpor- tation problem. Arrangements have been made with FEA for handling the procurement program, it is understood. In order to permit taking over the procurement program by So tember 1st these should be expedited. It 10 urged that there be reserved for civilian goods five ships, totaling about 35,000 tons, and of Philippine registry. Ton liberty ships are needed or about 100,000 tons additional chipping. 200 trucks are on route already and for the use of the Commonwealth for 4-25-45 PRECISION TRADE MARK MICROSTAT MICROFILM BOLL NO. 212 A 00-421 PLAIN Liston Dated April 23, 1945 Rec'd 12:03 p.m. Secretary of State, Washington. 858, Twentythird 3313 391 and JDC 223 FOR LEAVITY FROM TROES Saly Mayer upset by Taadhatahalah appropriation, feels this constitutes opening second joint office Switserland and expresses lack of confidence in him. Believe important you cable Saly regarding this. BARUCH - -2- April 24 1945 8:58 A. M. 214 O Yeah, let's have him.(Laughs) By all means. Now, B.S understand it - what you are principally interested in taking un this morning, is the political, military and economic directives C: Xr. Will Olayton: Hello. HMJr: Henry talking. oh, good morning, Henry. C1 HKJr: Good morning. C: what's the news from Mrs. Morgenthau HMJr: Well, the was definitely better yesterday. C: HMJr: C: HMJr: Well, that's fine. Definitely. I'm to glad to know it. Henry, I got a phone call yesterday, or my secretary 11 from the Navy. HMJr: going to be a small meeting.. HKJr: ...00 he wouldn't bring so any people with him. HMJrt The's coming? HMJr: C: HMJr: 0: HMJ C: Mr. Downey, I guers, will be the man. He usually come to the meetings here for the Nevy. Who in he? An attorney : suppose. He vas selected by the Navy to represent them when Dy Gaten couldn't come, and Dv never did come except That's what I'd like. Now have you got n moment? C: Yes. HMJr: Yes. HMJr: Well, can you tell as what's happening? Well, I guess you know that Frank Valker is going to be appointed some kind of extraordinary Ambasandor, and is going there in charge of this thing. Lubin is going as his assistant. C: HMJr: C: C HMJr: Beg pardon? Let's have (Laughs) Oh. .... and as a Minister, I think, of some kind. HMJr: Yesh. But Frank Walker is going in charge? C: Yes. HMJr: Well, I knew that Lubin was going. You know, I told you that Lubin wee going. The President told 38 in a secondary capacity. C: C: that's happening? You meid something about having ote from the President on reparations business. 01 doesn't have anything to say. Let's have him. (Laughs) Well, if ve have any time left over. Yeah, well, but we'll start on the other. That's -- oh, definitely. Yell, I'll bring the whole business, and ve'11 work on the colition1 military and economic thing first, and then 10 ve have any time left over we'll MMJr: down in his place. don't know I guest he 10 -he in very quiet, very nice fellow - he generally HMJr: That's right. And not no much the peparation question. get on the other. Yeah. C: C: C: Yes. They hedn't heart about tt, no I thought I had better ask down there. and told him that it van C: HMJr: Yesh. saying that they had heard there was going to be a meeting in your office. C: under the March 23rd memorandum. HMJr: Yes. But I didn't know who was the No. I man. TRADE MARK 216 0 HMJr: Yes, well C: HMJr HMJr: I'm - I'm - I may be talking out of school. C: HMJr: C: MMJr: C: Well, look, look, old man, HMJr: I's sure you.. C1 .... things are moving to fast. You remember, I think when I told you -bout Lubin, that was neve HMJr: to you. C: HMJr: C: C: Neve to me,yes. (Laughe) HMJr: And If ve... It's moving to fast that we can't keep each other C: informed. MMJr: If we give and take n little bit, I one promise you - by now you ought to know the C: HMJr: C: HMJr: C: Absolutely, I know that. But that is . surprise. I haven't any idea on where he stands on that anttor. I haven't either. I haven't the least idea, but he called me up yesterday about it, and : sent him over last night to his apartment a any of what had been drafted up until now. There' not - I don't believe there's thorough agreement on 15 yet but practically agreement on it. I just sent him that and told him it was in the rough. Yesh. **** and told him it was just a preliminary draft, and hadn't yet been agreed up. I sent 1: to him that he could take a Look at it and see just what no ve were thinking. HMJr: C: Yesh, that : right. C: Does this interest Frank? Well, if se have # meeting on reparations, I sean another meeting, would we invit him to come to 1 7 Well, I must ank him whether he want to show himself in that annacity before he gets appointed or not. It would be largely a matter for him, I guess, to decide. Yeah. Yell, that' ====== gee. You just never know where these fellows stand on these subjects. Yhat? That's right. Well, don't xorry, it von't get out of here. No. I'm sure of that. But, then I'll be looking forward to seeing you. Fine. I'11 be there at 10:30. And you'll invite the Nevy? Yes, Downey is boming for the Navy and Leo with Forder 12 coming for FEA. 10Wr Right. Thank you. 0: Thank you, ir. PRECISION TRADE MICROFILM MICROSTATI MARK BOLL NO April 24, 1945 9:26 A. M. 218 C Operator: Go ahead. HMJrs Hello. 3: HMJr: Well, yeah, that's what : seen. I can't tell you, but I know he has picked somebody to go. Mr. Bernard Baruch: Yes, Henry? 3: Yeah, well, he's got a different san. HMJr: How are you, Berniet HMJr: Yeah. B: Yeah, well, has he picked him? HMJr: Yeah. B: What? B: HMJr: Yes, Henry, : don't hear you very well. I'm talking as loud as I can. B: Well, where are you, Henry HMJr: I'm in the Treasury in Yashington. HMJr: Yes, he has. How did you find your wife? 3: That? B: HMJ Well, when I got down there Sunday not to good, HMJr: I understand he has. better. B: Sant Well, that's fine. When : left her last night. the with quite cheerful. oh, you only left last night? HMJr: No. I any, I understand he has sicked somebody. but yesterday the sicked up and the vast A little B: C HMJr: B: HMJr: Well, he told or he was going to --- he told ne he vns going to make the change. I told you that. B: HWJr: Yes. B: B: HMJr: B: Well, that's HMJr Are you in New York? 3: Yes. HMJr: Are you doning down? Well, I don't --- as for as I know he harn't moved on that either. B: HMJr: 31 3: MMJ: B: HMJr: Well I's waiting a call from the President. He said he like to see ne about Wednesday or thereafter. And I told him to give as n any in advance. Well, things are moving kind of feet down here. Are they sending us that thing? I don't know about that, but they are moving fant on this reparations business. Well, he's going to move - he's got to move also on the policy committee. you feel more hoseful? Definitely. Definitely. Well, that's fine, Henry. That's good neve. Yesh. HMJr: Yell, he's got to -- he told - he VAN going to. Yeah. of course, help got to get this San Francisco thing straightened out. He told me when he got that out of the way he was going to send for me. Well, I want to be --- the purpose of my call 18 to you - one that things seen to be moving, I don : know whether in a good direction or in a bad direction. B: I's sure he's going to tell se about it. I's sur- prised he doesn t talk to as about the man he nominated. April 24, 1945 -3- 1:06 P. M. 220 2. HMJr: B1 When you come, I sure went to see you. HMJr: Hello. I don't hear you, Heary Operators Go ahead. HMJr: Hello. . C HMJri I vest to be sure and see you when you come. B: Yell, of 2005 BE I's notified to name I'll telegrach Secretary you. Parkins: Hello, Henry. MMJr: Fair enough. HMJr: Yes. 3: without taking in the Treatur other things And they cannot take their colley or in anything P: This is Frances Ferkins. HMJr: Hello, Frances. HMJr: Yeah. I just wanted to be sure about Elinor. P: It would be too abourd, Henry. B: HMJr B: HMJr: Well, I got back late last night, and the is Hello? P: Pretty well? Yesh, well, DOY list You Issue that - I cash I'll HMJr: Yes. She's still got several difficult weeks Well then -- : mean they'11 find the British Treasury and that 11 find Keynes OVAP there as big as life. HMJr: butt in at the right time. And, 10 : my 05 agsett. : think that I've more than B: Listen you're got - the idea about . thoroughly HMJr: held up the American and. pretty well. shead ofther. Dear, dear. 2: HMJr: = I'm not discouraged, but last week the had another eetback. controlled Germany are going to win now surely. Ye can' 1020 on that one. P: oh, dear. Where shall : send her fl letter? I say, I've - I think I've 0020 than held up at own MMr Welch Hoesital, P: Welch Hospital.. end. Yes, =ir. 3: HMJr: I don't know whit you heart over there when you YATH in England.. oh, oh, it VAT good. 3: ENJr: but I heven's anda them any Christmas presente. I'll be in touch with you -- I's going to 570 : 3: told you fros the beginning that : going to keep in touch with you HYJr: B: HMJr: A11 right, I'll.... P: HWJ: She'd love to hear from you. F: Vell, I think about her a great deal. HMJr: Well, 20 do I. P: All right. As soon as I hear anything I'll Let you know. When I'm called down, I'li let you know right away. I'11 Alegraph you right away. Daytons Beach, Florida. It's cretty hard on her. I mean, this thing coming when it did. Because for her it is a bad emotional period HMJr: Oh, yes, well, it came -- couldn't have come worse. 221 No. P: HMJr: She'r been there three weeks, and I'm afraid that she will be there at least a minimum of another three weeke. P: If the can aske " little progress every day HMJr: Well, she is in it good humor. F: Thist's good. HWJ She's in good humor. P: That's fine. HMJr: Thank you. P: .... giving her oxygen? EMJr: Pardon? HMJr: Are they still giving her oxygen? She'r still in on oxygen tent. P: Yes. HMJr: Yes. P: P: This is shut is n great comfort. HOW Yes. P: It gives her great comfort. HMJr: Yes. F: Fine. HMJr: Well, thank you.. P: : think of you too. HKJr: Thank you, Frances. RECISION MICROFILM MARK ROLL NO. NOT TO BE RETRANSMITTED COPY NO. SECRET OPTEL NO. 129 Information received up to 10 A.M. 23rd April, 1945 NAVAL Anti-Submarine Operations. 22nd/23rd (night). Liberator made promising attack on U-boat in Kattegat. Enetty attack on Shipping, 22nd. In home bound convoy from Antworp 120 merchant ship (7176) mined off Flushing but reached port while a Russian merchant ship (1603) torpedoed and sunk off Kola Inlet. 1. 2. MILITARY Western Front. Southern Sector: First French Army broke 3. through enemy defences East of Black Forest and armour has now reach- od Swiss frontier to West of Constance and is moving Eastuards along Northern shore of lake. Further North troops of 7th U.S. Army have also broken through enemy defences and 1 arnoured colunn has reached River Donube in area Ulm while Second thrusting Southwards from Crailsheim has seized bridge across Danube at Dillikgen. Central Sector: Troops of 3rd U.S. Army made gains up to 20 niles on 40 nile front while unconfirmed report states Weiden taken. Troops of 1st U.S. Army engaged in bitter house to house fighting in Demony, Northern Foctor: Reported that armour of 9th U.S. Army has linked up with British airborne troops 10 miles North Salzwodel. Eastern Front. In Borlin area Russians claim 16 of North Eastern suburbs taken while further South they stated advances made East and North East Dresden with forner reaching to 15 niles from Dresden and latter to within 30 miles Wittenberg (15 miles East 4. Dessau). Southern Sector: In area North Vienna only slight progress reported due Test of Breclav. Italy. Eighth Army Sector: On right U.K. troops engaged in 5. hard and fluid fighting South of Po at approaches Forrare and Bondeno while on left Indian, New Zealand and Polish forces maintaining pressure on Eastern flank of German salient between 5th and 8th Army. South African troops under command 5th Army on left flank this salient U.S. have narrowed neck to some 18 miles. Fifth Army Sector: arnour heading North now 26 miles N. N.W. Bologna while further West Modern entered. P.W. on whole front from beginning offensive to present date estimated 25,000. Burns. Central Sector: Our troops advancing from the East have reached Irrouaddy 10 siles South Mague. Further East 1 of our arnoured colunns reported striking South not within 1 nile Toungoo having captured airfields this area. 6. AIB Western Front. 21st/22nd (night). Bomber Command aircraft attacked Kiel (136 Eons) with good results. 22nd. Bad weather restricted operations. Bomber Command aircraft 204 (missing 2) attacked targets Bremen (965 tons) mainly through cloud. SHAEF (A Fighters and Fighter Dombers 650 (missing 3) operated battle areas Constal Connand aircraft obtained hits on one 4,000 ton ship and on 7,000 ton tanker in Skaggerak and Kattegat while 2 vessels left but ing off Norwegian coast. 22nd/23rd (night). Bomber Command desprice nd aircraft 150 (without loss): 40 Berlin, 11 Kiel, 99 Bonber support Moditerranean. 20th/21st (night). Liberators 56 attacked railway bridge Verona-Parona railway (152 tons) obtaining direct hit 21st. Escorted heavy bonbers 243 (missing fighters 1), dropped 566 tons railway targets North Italy and South Austria with good results while Lightnings 150 successfully attacked similar targets. Medium 7. 8. and Fighter Bombers and Fighters 753 (missing 6) attacked communicat Loan North Italy and South Austria also giving support to ground forces. = 223 224 , NR. BLOUGE Ky reports have been pretty brief. April 24, 1945 9:30 a.m. N.V.JR: All right, but I fill just telling you. I don't know what is roing on in taxes, but If timebody rante something, it is up to me to see you fellows, and to will settle it on time, ce but please, no more reports. GROUP have noked for them. Sol Adler have me ten pages on Chins, Present: Mr. D. 7. Bell Mr. Bartelt Mr. Gamble lr. C. S. Bell Vr. o' Connell Mr. Blouch Mr. Luxford Mr. Pehle Mr. Fussell Kr. Bernstein Mr. DuBois Mr. Coe Urs. Klof: but don't rent to see thee are more. I will be glad to see Sel, but I don't vent air reports. VR. LUSFORD: Joe tays that It why be didn't tend you that report on angland. (Laughter) U.S. KLOWS Don't bring that up. H.N.JK: That *** one for iv grandchildren. They were Interested. lifter ell, 6 child tast can take create juice out of 5 cup when the is four meeks old wants to know what de In the stainer of '44. So I Just went you--this teletype thing is wonderful. I think or going to install one right here, and when you write ne things you will have to condense them. H.M.JR: Good morning everybody. Let me just tell you people something. I have learned something through this teletype business, and from now on I an not going to read the volumInous reports which you all have been sending me about China, Germany, and Releium and this and that sort of thing. What happens is you fellows send ne these danned reports about that high (indicatine) and when I get through, so what! You take a thing like this revision of 1067 signed by the President on the 23rd of March and then I begin to get excited about It Sunday and I call a meeting, and ac will TO somewhere, see? Now, before I meet wi these fellows at ten-thirty, I want to be brought up to date. Through stuff you have sent me I an pretty well up to date, but I will try to cush the important thingsthrough. But there in no sense in sending me all this voluminous stuff because I am not going to read it. It is a waste of paper and a waste of my time, and it doesn't accounlish anything, but then we ret something like that or any one of these important things--if you have something on taxes, come and see me, and then have in writing what you want, and we will sit down and go over it. Where is Luxford? I learned more about what he did-river would have gotten 6 report from Luxford if I hadn't been dont there. I never could have known what he did Saturday unless I read about it in Drem Pearson's column. (Laughter) Anyway, I = color to try to be more helpful on the important things and not fritter my time any will th all this spinnch. And the job Charles Bell did for the Prerident Precident Trusan, those tro pages--that VET Food for se and good for hic. I here asked for ED appointment to see him Thursday, and If there it anything you sent the to foll his, let's have it. Let it clear through you. Non, Gauble net me at the airport last night, and he started to tell se about pay ell deductions. I said, "President Truman doesn't know anything about pay roll deduc- tions, so let's have report. Where do ke stend?* PRECISION TRADE MARK MICROFILM ROLL NO. 225 C 226 VR. O'CONNELL: It night have been spelled out better. So, anythy that is the may I feel this morning. I have turned over . new leaf, and I will net started in . minute with you, Coe. They are bringing the Favy in here st ten-thirty. B.N.JK On Saturday e talked--I didn't know that after you prepared the you wouldn't give then to him. NR. O'CONTELL You told us that in no uncertain terms 101. COT: They have been In or all things. Saturday. H.M.JK will Clayton--it is good. You see, they bring in this revision of 1067 for the Army. You want to know P.I. : is going on. The Savy will be here. Tell, what - proposing to do in to et casebody may assistant to work exclusively for as and read all of this stuif, cut out some of it, analyze it, and bring it to my attention. That is an administrative responsibility. H.M.JRI Well, that sort of disturbed me, so I thought I would make it perfectly plain. MR. LUXFORD: Tell, you use the teletype. H.M.JR: It is wonderful. Se are going to put one right in the office here. New, I rent , telepras on tain business of the bankers, see, and : feel very, very strongly that be should noke ERS. KLOTZ: It is not 8 bad ides. Mr. Bur ent put down what no wants before the put GORD Witt 1.1.JR: Tell, does anybody want to desur about we want. 0 .4. 3 incisting that Burgest file his first and Re will have a I look at it? MR. LUXFORD : think that is contexplated, Fr. Secretary. MR. LUAFORD: No. Did you ree Judge Vinson's memo? H.M.Jh: Not in your telegros. H.N.JR: Yes, BE 6 result of which I have invited Bell, Luxford, O'Connell, Vinson, and Dean Acheson to have lunch MR. LURFORD: I think no. with be Friday to discuss it. I am delighted that Vinson it taking an Interest. H.M.JR: 10. you out It In. You said that Wolcott asked us to subsit cure, and LT. supress would submit his. VR. LUXFORD: lie 10 taking 8 real interest. No. C'OGINGLI: The lest persgraph indicates to are waiting until Sr. Holcott gets the document from ir. Burgess and ives that to us, and in the meantine we'll be H.M.JR: And I would say ou wrote a very honest report, as usual, and I gathered you didn't satisfy Vinson. putting COWN changes. SR. LUXFORD: That is right. MR. LUXFORD: We left it with the understanding that Koleott would Let us Know en be had received the text of the bankers' changes, and in the meantime me will prepare . draft of the changes we APC prepared to make on the paris of compromise. We feel that when me go over our changes the should confine our concessions-- S.M.JR: But that is-- N.J.JH: So we will 20 over it, but you two men--if it in agreeable with Fell, you make it perfectly clear to Molcott that Kr. Burgess has to put the thing down first. That goes back to Vinson's original suggestion, making Burgese say what he mants. D 228 227 -6- -5. H.K.JR: So you and Joe look that thing over, and you don't have to refer it back to me amain. Is that agreeable 101. LUXFORD: How about seeles on that? to you, John? MR. HELL: Samezak tried to not information yesterday, VR. PEALE: Entirely. and I didn't feel free to talk to him. H.M.JR: Shall I have Eccles for lunch Friday, too? MR. C. S. BELL: Schnidt would like to designate Michael Hoffman Acting Director of Foreign Funds during his 13. LUXFORD: Somebody has to keen him informed. absence in Germany. H.H.JK: How about that? H.M.JH: Tell them outside that Eccles in to be Invited for lunch Friday, too. (To reporter) 13. PERLE: Very rood. Is there anybody else in town? H.M.JH: All right. Now, I promised Mr. Coe he could brief no. but 1 will give you neorle--have you something you want to clear, Now unit a minute. While you are on that. here is a letter from Dan Bell on the different people to head un the financial section. I would like to talk to you people Charles? o MR. C. S. BELL: Yes, I thought you ourht to know that there have been half a dozen meonle selected to ° to Germany. I have their names: Schalet Feroland, Hollander Drease, Hoss, Elameman, Rehuneik and Korsan Devis. In this the investigating corpsy MR. C. S. HELL: No. this is the ;roup--I think they telephoned when you here cown routh and authorized this 58 the first contingent. about that. 2 18. D. N. HELL: Chester Davis, isn't it? H.M.JR: Yes, Chester Davis. Let's have a meeting at four-fifteen this afternoon, Mrs. Klotz. Now. who is to no to Germany to head the finance section--German finance. Now, I want Dan Bell and Charles Bell and John Pehle, Coe, and you two fellows, Luxford and DuBois. H.M.JR: This is the investigating-- MR. LUXFORD: Four-thirty? JR. D. 1. HELL: The Schmidt group. MR. c. S. BELL: All of these people are out of Forei m Funds. They are canvercial specialists. E.F.JR: Now that John Pehle is again . free net I vent to put his and you on . little counittee to pass on this roup, see, and I understand Echaidt is to clear It. Is he? ... Four-fifteen. You are not interested, are you? 11. O'CONNELL: No. H.M.JR: who are you representing, E. V. Bernstein? MR. BERNSTEIN: Mr. Fitzgerald asked me to represent white. I don't know who he did, though. 11. C. S. BELL: Yes. 230 -8- 229 -7. MR. COE: A couple, yes. H.M.JR: Good, fine. It is enough to have you here representing yourself. H.H.JK: Are they working? MR. COE: Yes. MR. BERNSTEIN: Thank you. MR. C. S. FILL: I would like to expand Ted Wilson's authority on personnel matters. They are shooting up to US scores of fenfolds, and he can take that over now. E.M.R: You are entirely welcome. 18. PEHLE: Is there a list on that pronosal on finance? (Secretary signs letter to Kr. Ted Wilson, dated March 5, 1946.) H.M.JR: Yes, lrs. Klotz can circulate It between now and four-fifteen. H.M.. JR: That will take it off your shoulders. 13. D. 4. BELL: I will give you = copy. MR. C. S. ELL: Yes. MR. C. S. BELL: No would like to promote Norman less. He is with Mr. Coe. I don't know whether be has spoken to Here is Mrs. Doyle's report after eighteen months. You night want to read that et scale time. you about that. C MR. C. S. BELL: Ne would like to promote him to eight thousand. That is in l'ne with other assistant Directors in Monetary Research. He is an Assistant Director and is paid less. H.M.JR: He goes to San Francisco; T get nothing out of it; and you promote him. JR. LUXFORD: Mr. Secretary, he has been doing abrilliant 0 H.W.JRI If it is important, : will read it. If it isn't important, I non't read it. MR. C. 5. HELL: Preston Delano did E swell job on the Red Cross contributions, and I will fix up 8 little letter if you rent to sim it. H.R.JR: O.K. CH. C. S. HELL: Now TO are or deferments. job on Bretton Woods. Dean Acheson called me while you were away to say that he had done n wonderful job with his on the West Coast. H.M.JR: On the Test Coast? VR. LUXFORD: You see, he went out there with acheson to sell Bretton Woods. H.M.JR: Is he under you? 13. COE: Yes. H.M.JR: Has this noliey of upgrading and getting more people got any new people? H.Y JR: Don't give me any more bookbinders. WR. C. S. FELL: This is the group; I have been saving them up. H.K.JR: I will give you some time on that, three- fifteen tomorrow. WR. C. S. BELL: Fine. That is all for no. H.M.JR: Daniel? 231 D H.M.JR: Wonderful. H.M.JH: Whom did you meet with, just each other Luxford? MR. DuBOIS: There 205 5 large group, and, incidentally, you may have gotten rid of Lovett, cut you didn't ret rid 117. LUXFORD: Supplementary to what you said on of his Colonel Busanell, who is doing most of the BOFK, and Barry, a delegation of Americans United went to see him yesterday, and he told then without any qualifications he was moing to support and vote for Bretton goods and HBS roing to make that public. in being very difficult. We finally did get 8 tentative agreement subject to reservations by Sr or 6 very good document. It this document could be pushed through before JeCloy leaves T think we can get it accepted. If ze have to unit until KeCley leaves, there may be difficulty. H.N.JR: Congressman Barry. H.N.JH: Well, will Clayton nented to know what *** on thin morning, and I told him we would concentrate on 1067, and 11 10 had any time left over we would TO on to 10t. O'CONVELL: B-s-p-r-7. 10. LUXFORD: And he also Indicated that the Committee reportions, but T think I told you people that there *** by and large--all of them were roing to vote for it. D JR: Well, whatever the deal Lannegan made, it M.K.Jh: Did I tell you. ment with him as soon 8.5 I get out of here. lie wann't in KR. Du BOIS: Yes. yesterday. The President SEE Lubin yesterday and he called me over and talked 0.5 though be were still going to head the group up, and the President told his Salter In going to heed the British end and also save him . few more points, but certainly-- H.M.JR: There was he yesterday? 1R. O'CONNELL: In New York. no case in late yesterday afternoon. H.M.JR: Tell him that English week ends are out during H.N.JH: Didn't he tell him? Did you tell him? the war. VR. DuBOIS: of course I cign's tell him, but he didn't tell ne either, and he certainly talked BE thouch-of course, be say have told him, but he didn't tell me, and he certainly VR. O'CONNELL: His son was ill; he had n particular reason. talked 15 though be 185 still heading the group up, MOS going to be the administrator. H.M.JR: He had better still have n look into his week ends. E.M.JR: Joseph? roing to be DATE selected to head peparations. FR. Du POTS: Yes. MR. O*CONNELL: I haven't seen Nunan; I have an annoint- 13. LUXFORD: That is all 1 have. 232 MR. DuBOIS: Glasser and I net for about eight hours yesterday, including us to about twelve o'clock last night on reparations, end-- MR. D. 3. BELL: I have nothing important. is O.K. 10 H.M.JR: That part is through. He buttons his coller 0 in the back. I KNOE who the man is. ( 233 234 1 Now, what I tub going to try to do is see if I can get clearance tocorrow so the can get At him. 1 don't know where the hell tain san stands, either. I SUC worried. Leave it to se for the next day or two. H.N.JH: 1 didn't tell them anything. Crowley is bringing one man. Well, who RES here on the original 1067, you and T? in COE: And Gianser. MR. Du ROIS: This fellow Salter--I don't know him, but I rather from Frank end Earold be 1: . pretty bad choice, and it 1e epperently on attempt by the British to satotare .Jh: Glesser? No, he didn't attend the meeting in this room. it. 13. COE: Probably White. H.N.JR: Tell, be is an important fellow. E.F.J.: White. Are you coming, Dan? in. DuBOIS: lie bet got to name, but 1 /ather-- RR. D. % BELL: Yes, I an casing. I = an observer. R.E.JR: He is start. H.K.JR: Let's leave it to Frank. Can you handle it? MR. COE: he is getting very old. MR. COE: Yes, sir. H.M.JS: his wife is something. Oh, boy: C ACH COF: Keybo the will 20. B.K.JRI Well, I hope not. She is what is known as RD original cave-aweller in Teshington froz the social angle-every rich. She couldn't understand when I flem have why I couldn't take his and fly his to the Berkshires enroute. She is socething. Teil, let's see. I think before todsy or tomorrow I hope to have my hands untied to I can contact this ner MAD. VR. TuBOIS: The only question on this other, K. Secretary, 200 Chambers told = MeCloy THE leaving tonight. H.N.J.: Yes. Let's see how this meeting FORE this worning. the is castes Frank, besides you and no. MR. COE: It depends on what you told the other departments on how many there will be. 12 H.M.JH: Do you need any support? D W. COT: Support would be good, but I d en't think to. No, you should have # relatively small number. H.M.JR: Do you need technical support? MR. COF: No. T think ve are all right. H.N.JSt Let's see where BO come. If the cet into reparations, I will send for you. Joe. But I don't think you can drive it today, because I know that Clayton knows, and I don't think he is going to push it. VR. DuBOIS: If you can't get that, Mr. Secretary, If you get ReCley to sign just one document--and that WAS that memo that I cave to harry, and T think he showed It you--Just interpreting the first paregraph in this March 23 directive, it will get us over a lot of hurdles. H.K.JR: Let's see how much time we have. This new man got a copy of the document on reperations. Cleyton sent It to him. He said he thought it WB D pretty good, and I take it it was what you sent to ae. to RON TRADE MARK -14- 236 13 3 MR. GAMBLE: I won't be here this afternoon. I don't think you ought to send out any press release on a memorial bond. MR. DuBOIS: Yes, that document has not been changed in substance. night. H.M.JR: Aren't you roine to be here? H.N.JR: Clayton sent it to this nan to read last Nit. CAMBLE: What about Judge Campbell? Do you know him well enough to let him come in alone? MR. DuBOIS: Right. H.M.JR: Jud me Campbell? He's an ols pal of nine. He was District Attorney on the-- H.M.JR: 1 want to get clearance to TO to work on this fellow. MR. GAMBLE: On Iroe. MR. DuBOIS: It doesn't sound very good. H.M.JH: On Annenberg. He and I are old friends. H.M.JR: What? 13. LUXFORD: Did he write the gold decision? 12. DuBOIS: It doesn't sound very FOOD. H.W. He and I are very good friends. He's swell. H.M.JR: I don't know, I an just besildered. Be may be wonderful, or he may be terrible. lie is important. MR. RERNSTEIN: I don't have anything. H.M.JR: what did Mr. White do yesterday? MR. BERNSTEIN: I think he probably and still flying. H.M.JR: that did E. 1. do? MR. HERNSTEIN: I just tore around the day waiting for it to end. H.M.JR: Maiting for Dan? (Laughter) MR. PEELE: Waiting for it to end. H.M.JR: Is there anything you want to tell ne? MR. BERNSTEIN: No, sir. ( JR. GAMBLE: Mr. Bell has a press release on the Roosevelt memorial. R.M.JR: I will do that this afternoon. flying WR. GAMBLE: It's okay for him to come in alone. I was to New York at five o'clock, but I MR. DuBOIS: He is for It very hard. H.M. Jil: E. 1.7 H.M.JR: 1 know him well enough. o think I MR. COE: Desnite any premonitions are may have had, Lubin has worked out very well on policy. 1 N. GAMBLE: He is here doing some work for us. ought to take an earlier train on account of the weather. On the Memorial Bond release, Mr. Secretary, we have had several hundred letters. No have answered them all. No have sent the policy to the State Committees. H.M.JR: Listen, I appoint you and Dan as a Committee to settle it immediately after this. VR. D.V. BELL: We are getting all kinds of letters. H.M.JR: You and Dan settle it. what about this business of asking a recording and all that? who are you going to deputize on that man Do you want 120 to make a recording? MR. GAMBLE: All I want to know is what day is convenient, Friday or Saturday? It will take an hour. H.M.JH: An hour? MR. GAMBLE: It will probably take a half or three-quarters of an hour. e'll do it here--bring the newsreels here. F-3 F-2 237 16 238 - 15 1 H.M. TH: Joan and I don't know how many of you have seen the coca cola machine where you put in five cents and a cup of COOR cola .ice cold cones out. There is H.M.JR: Are you familiar with that? MR. MISSELL: Yes. one in the hospital and we play it all day long. VRS KLOTE: It's not exclusive with coca cola--all soft MR. GAMBLE: he has had all of that. The only part I an concerned about is the newsreel shot. drinks. H.M.JR: It's a newareel shot? H.M.JR: It's awfully good. Are there many of those machines around? Mr. GAMBLE: Yes. That's one of three pieces. MR. GAMBLE: Thousands. H.M.JR: Well, let's say nine o'clock Friday morning. N.M.JR Are there any in Gamble's theaters? Mr. GAMBLE: Friday morning at nine o'clock. MR. GAMEL Yes. H.M.JR: Fussell, you pick up the pieces. MR. C.S. BELL: 140 had one in the Treasury. I MR. GAMBLE: He has prepared 9 statement. he has don't know if it is still here or not. been carrying the ball. We did some work on the statement, but he has carried the ball. H.M.JR: Eddie? H.M.JR: When V-E Day comes It's all out in the field over the dead body of O.I. Ted is putting 4 MR. PARTELT: I have nothing, Mr. Secretary. All right. Frank, you will have your day three weeks in advance, ahead of everybody else. lie doesn't want it known, though. in court as soon as these people get out. MR LUXFORD: Three weeks in advance of what, Mr. Kh. COE: There are two or three other things besides Secretary? the German thing. H.M.JR: Talk fast. H.M.JR: OWI. HR. COE: Patterson is expecting a call from you on MR. LUXFORD: I see. the China business. MR. GAMBLE: One minor thing. woodruff is giving a birthday party today for Al Steele. I thought you would like to send a wire. H.M.JR: Is he? Mr. COE: Evidently you told him you would be in H.M.JR: Tell him I wish him luck in his candidacy for walter George for my job. touch with him. H.M.Jh: Is he ready to go to town? MR. GAMBLE: Se've got the right guy. Q C 7-5 240 18 17 MR. O'CONNELL: Schachner. H.M.JR: From SEC? VR. COE: He will support us, but his general is on the other side in line with your new policy. I would like to talk to you about that separately. We MR. O*CONNELL: This is Bruno Schachner. he has been with the D. A.'s office many years. have a proposition un-- h.M.Jk: Is he any good? H.M.JR: Can't you do It afterwards? These men will be out of here in four or five minutes. You will have twenty-five minutes. You can do a lot of talking His LUXFORD: He tried all of our cases and has done a good job for us. in that time. MR. O* CONNELL:Cahill, who of course is on the other MR. COE: Yes. side,1 trying to do a good job, and is doing . very effective job. They are not discussing the Does that three forty-five date still stand that are all the Ted is running out on? (Laughter) the case the particularly. Theyintelling merita good work Chase Bank has done helping to win theofwar and selling bonds. Ee hasn't talked much about whether H.M.JR: Yes. they did violate regulations or not. There is one meak spot in our case-we knew it was there--and that is one R. FUSSELL: Sometime before the Thursday press conference I would like a few minutes to talk over what we are going to say at the Thursday press conference on this black market income tax stuff. of our key witnesses is a Chase Bank employee who admittedly was cognizant of the fact they were violating controls and he testified he informed his superiors of the fact. He testified both ways in the trial. H.M.JR: Have you not anything juicy? H.M.JH: Is he the fellow that was in Spain? VR. FUSSELL: Not juicy, but we have is plan of H.M.JR: will fifteen minutes be enouch? 101 0* CONVELL: You are thinking of Barr. This is a subordinate employee, a lower down fellow, and he testified under direct examination and under pressure that he had known of the fact that they were violating MR. FUSSELL: Yes. the examination, controls, I he informed, told superiors, and in cross presentation that will provide enough interest for them to write about. and his an he took it all back again 1 from when Cahill went to work on him. As far as the jury H.M.JR Fifteen minutes before press. point question of creditability and is their concerned, of we'll view get the to the jury, think, and KR. FUSSELL: Could Mr. O'Connell come in? having a good man on our side, I think, very readily pointed out the pressures that would innell him to equivocate a little bit since he still works for the Chase Bank, and it's pretty difficult for him to H.M.JR: Sure. Are you golar to win the Chase case? MR. O*CONNELL: I think so. It's a close case. H.M.JR: How is the fellow trying it? MR. O'CONNELL: He's doing all right. not sort of jump from limb to limb, so to speak. He testified before the Grand Jury that he had informed 0 F-7 241 242 C 10 R.M.JR: I skipped you. All right. his superiors, and that was the basis on which he was forced under direct examination to adhere to that story and on cross-examination he reversed. He is a pretty Vis. PEHLE: I have nothing. H.M.JH: 1 sent you and Charlie a little nemo. Have poor witness. you got it already? It would be nice if I got out a statement to the employees. H.J.JR: Isn't the testimony given before a Grand Jury made available to the trial? MR. PEALE: Did you like the statement we wrote1 100. O*CONNELL: The testimony before the Grand Jury H.M.JH: I like the one Wallace got out. WB.D ande available to us, and it was based on that that We were able to, in S direct examination, force him to say what he said before the Grand Jury, but on crossexamination by Cahill he weakened quite 5 bit. MR. PEHLE: We wrote it for him. H.M.JR: Why not one for the old man? The fellow-I am pushing him out. I ought to go ahead of Wallace. H.M.JR: The whole case doesn't han on that, does it? C MR. PARLE: I think a statement would be good. There is one disturbing element. 18. O'CONNELL: No, but one of the important witnesses as far as notice to responsible officials of Chase Like Joan said, "In all these discussions who comes first I said, "Morgenthau. is concerned-- is quite important. ie won't be throuch until--1 think our case will be in today or tomorrow, but It will be probably a week from today, or more, before the Mr. PERLE: Some of the old Treasury employees who ke case is all in. The Judge is Joine a rood job. Rifkind, thought would certainly want to stay in the Treasury have shown a great desire to get out. . youn? fellow who used to be Warner's Secretary, I - told, is doing very well. H.M.JR: Get out of Procurement and do what? H.M.JR: Oh, yes, he's the (eilon that is 80 interested in housing. Whan't he with Nathan Straus for a while? 15. PEALE: In other words, where there were people in the border-line area that were any good, even though they had as much as ten years in the Treasury, they wanted VR. O'CONNELL: He use with Warner at the time the housing legislation came UT. to go. 18. D. BELL: Keyserline is the Housin boy. Maybe It's too much. H.M. 1 know Rifkind. MR. PEELE: Too much? VR. O'CONNELL: Rifkind succeeded Keynerling as Wagner's H.M.JR: Maybe ten years in the Treasury is too much. secretary. MRS. KLOTZ: Ten years of Procurement. 1 244 22 243 0 I an honing are may net a good deal of support for this very limited DPORTAN which the Joint Committee in pronosing. It other words, the Joint Committee would propose something a rood deal less than a lot of folks would like, and are are horino to get good sunport from MR. D.M. BELL: Too much Procurement. the outside for the limited Proffes. Things, so far, are oul satisfactory. N.M.JR: Everything else is all right. that did Fine. you do about Viss Model? MR. PEBLE: She's taking the plane and so is O'Dayer. Pussell, in talking with Gamble last night, in the future when things of importance hannen, take this sort of thing--he has forty-eight chairmen and every one of them have Public Relations sen. when something important happens I want a bulletin to info out to Gemble's meonle on behind the scenes news in the Treasury, 00 these fellows know how to evalunte it, see? H.M.JR: Two weeks to make a two-day speech. 10. PEELE: Yes, I know. I think the real difficulty, Mr. Secretary, HIS that they were roing to write the speech on the train. or course, I know that's not an approved practice, but-H.M.JR: Anyway, you settled about the plane. You're my boy. All right. 10. BLOUGH: Well, we spent yesterday in conversation al th Stam all day on various tax batters. is have n report now crepared for the Joint Committee. The issue isn't in print yet, and use expect the Joint Course ttee will to over will It about the end of this week. Ky 2000 in that they take it almost as 1s, although they might make minor changes. They will probably release it. T don't know why. but I would think they will probably release it either Saturday of this week or early next seek, probably the latter. MR. FUSSELL: You mean tax patters? ......... Anything real important. Gamble should desi mate fonebody over there so they PO out. These fellowe in the field are interested in everything the Treasury does. Everything the Treasury does affectsbon sales, or bad, and these fellows that are out in the field, th Chairmen and their Public Relations men--take this question of the off-the-record press conference 1 had about whether I would stay or resign. A thing like that should have one to his State Chairmen, see? Also, we not rid of Surplus Property should m to his ceople. That's the best contact as have. Now, that thing may be enlarged into a sort of Treasury bulletin. It might 70 to aixty-five Collectors of Internal --Presidential annointees. I I think at that time you should follow immediately, same day, practically the sase hour, with a press statement indicating your approval and the part the Treasury has had in this 80 as to ride richt alone on the same publicity. Vr. Fussell and I have been talkinabout it, and If you approve, are will work un something. think every Presidential ampointee in the Treasury ought to net a bulletin like that, not every week, only when something happens which needs intercretation. I think it would be very useful. These Collectors are out in the field and they don't know. They are all interested. the Hannegan cald three bankers came to him, and each H.M.JRI I approve. one said, Is Korrenthau roing to resign? Hannern said, Why are you interested? They said, 'I want to know If he lift. BLOUGH: There la something to be issued. You rood have seen from BY short semo that I 533 askin n MAY little off-the-record talks and interviews and I am any spending touorrow and Thursday in Item York. I an seeing the editorial meople tomorrow and will be having off-therecord conferences with business people Thursday. does, because the bond market 1a roine to hell. C ( 1-11 -2423 246 205 ( I think what we need is just a typewritten pare when something happens here that is of importance 20 that these people in the field know that they have become part of the Treasury family, see? Do you approve, Fussell? field. MR. FUSSELL: A house organ for the higher-ups in the H.M.JK: A letter ought to go out in the future, from time to time, then something happens. we are going to take you behind the scenes in the Treasury and give you . little talk for background purposes,"and explain what background is. H.M.JR: That's right. MR. FUSSELL: You may find that are may be criticized for using the an Finance organization for-- B.M.JR: Let Gamble worry about that. Do you want it, Ted? MR. GAMBLE: Yes, I know how we can handle that. MR. LUXFORD: That includes Customs. ( MR. CANCLE: It ought to go before it's announced, too. H.M.J.R. Every responsible Treasury man in the field, and all Presidential appointees, see. But net these Mr. FUSSELL: Mr. Secretary, in connection with what way just said, if that tax release comes out at a convenient time during the day, during the week, do you think a background press conference would be a desirable thing following the release? H.B.Jk: Yes, you work it out; make a recommendation. Roy, I'll be the front and Roy will do the talking. Mr. BLOUGH: Good. R.M.JR: Non, I cleared you and cleared you. How about you? fellows me have never used, and It streads the word. Ma. O*001NELL: I have nothing. 12. LIKEFORD: Just theIr circle of sequaintances-cover the country. H.M.JRI All right. H.M.JR: Throw A pebble in the pool and look at the circle of ripples that to out. There's . mood idea, straight from Daytons. 1R. FUSSELL: I t h ink it's a rood idea, Mr. Secretary, in connection with what-H.M.J.: I don't want it every week, Just when something important come: un. You take this thing he's roin to do. Everybody in the United States, every businessman wants to know how this tax thing is roing to O. Let's net this thing out. Get your mailing list ready, and I think a preliminary letter ought to TO out over not aimature explaining what this is. (Discussion continued off the record) 248 Carbon copy sent-to Col. McCarthy by Mr. Coe 5/7 -2- 1 I would suggest to you, if it meets your approval, that we take the political and military documents first. April 24, 1945 10:30 a.m. (Mr. D. W. Bell enters the conference.) MR. CLAYTON: And that I ead it through first and then 1067 REVISED take it paragraph by paragraph, and comments can be made on the suggestions as me go through it. Present: Mr. D. it. Bell Mr. Crowley (Lt. Bancroft enters the conference.) Mr. McCloy Gen. Hilldring MR. CLAYTON: I think the may get a better idea of the Mr. Clayton Mr. Glasser complete story If I read it all first and then we take it paragraph by paragraph, so that any comments or suggestions probably won't be accepted until we go over it from beginning to end. Mr. Coe Mr. Fowler Mr. Downey Major Gross H.M.JR: You read through the whole thing without any Mr. Desores comments. Mr. Riddleberger Lt. Bancroft C MR. CLAYTON: If it meets with your approval-- H.M.JR: Let's start. H.M.JR: you on the Hill.We'll give you the same courtesy they give MR. CLAYTON: Shall we go ahead? MR. CLAYTON: I d on't know whether that is too good. H.M.JR: If you please. H.M.JR: We will do it better. MR. CLAYTON: Mr. Secretary, the working committee has produced two or three documents. They have one on (Mr. Clayton reads "Directive to Commender-in-Chief of U. S. Forces of Occupation Regarding the Military Government of Germany, draft No. 1.) the military and political directive on which I think almost complete agreement has been had. There may be one or two little matters. MR. CLAYTON: (Rereading dreft) "This directive MR. DESPRES: That's right. rescinds JCS 1067 and is issued to you as Commanding General of the United States forces of occupation in Germany, As such you will serve as United States member of the Control Council and will also be responsible for the administration of military government in the sone or zones assigned to the United States for purposes of occupation and administration VR. CLAYTON: And there is one on financing which I don't believe you have fully agreed upon. MR. DESPRES: No, an haven't the last one. It outlines the basic policies which will guide you in those MR. CLAYTON: And there is one on economics which I think we are pretty nearly in agreement on; there are only two or three minor matters. two capacities after the termination of the combined command 0 of the Suprene Commander, Allied Expeditionary Force. PRECISION TRADE MARK MICROSTATA MICROFILM BOLL NO -4- 9 a to accomplish in the whole of Germany, so while he is Supplemental directives will be issued to you by the Joint Chiefs of Staff as may be required. going to apply it in his zone prior to the agreement in the Control Council, he is going to try also to sell this policy to his three associates in the Control Council. H.M.JR: But it isn't up to the State Department, or Winant, or the European Advisory Council. It is up to MR. CROWLEY: I monder this, if they couldn't--all the men here know, Will, where there is a difference of opinion. That is only the general directive, and if we could get down into the meet of the thing where there is some difference of viewpoint, I think we would save time, if that is agreeable. Eisenhower to take It up with his three men. GEN. HILLDRING: At the moment It is the business of Kr. Winant to sell these policies If we can get then over there in time in the EAC to his associates on a diplomatic level. However, once the Control Council is set up, it is my view that you can't have this done in two places, and starting at that moment Mr. Finant or the EAC is going to step aside, and thereafter this selling job is going to be MR. COE: I think that would save time all right. MR. CLAYTON: It would save & lot of time, and it would get to the points where there has been-I H.M.JR Could I just ask you this? At this stage think it is an excellent suggestion. It isn't quite clear done by Eisenhower in the Control Council. to no. An you people know, I have had to be anay. "Directive H.M.JR: Well, now, let's take a little time on that to Commander-in-Chief of U. S. Forces of Occupation Regarding C 50 the Military Government of Germany. Do I take it that this is a directive to General Eisenhower? and see if there is general agreement, because I think that is terribly important, I mean, where the thing goes from cil. : here as to what happens to the European Advisory that is that? GEN. HILLDRING: That is right, sir. H.M.JH: And that he will be Commander-in-Chief of the Mil. CLAYYON: The General stated it as we understand it. forces of occupation? Is that right? H.M.JR: May I be 8 little frank amongst ourselves? Well I can guess. I an not asking for confirmation or denial. be matter of several weeks, I take it, before this GEN. HILLDRING: Yes, sir. H.M.JR: What I don't understand is this: We go ahead with this. Let's say we will come to an agreement, and then Council It will will a be set up, I mean, in Berlin. And doesn't it kind of cross the thing up--I am using a polite word-to send it first to Winant, who will mess around with the what do we do about the other three commanders? European Advisory Council and may do a good job? On the GEN. HILLDRING: He is going to try to sell these to the other three to the greatest extent he can. other hand, he may not be successful, and it goes to General E1 senhower and the water has been muddied. If Eisenhower is going to carry the ball, why muddy the water with the European Advisory Council and only have two or three weeks to fuss with this thing? H.M. And that is General Eisenhower's responsibility? GEN. HILLDRING: Eisenhower is two people. he is our representative in the Control Council in Berlin, and he is in command of the U. S. zone. This is the U. S. policy both with respect to zone and with respect to what we want ( MR. RIDDLEBERGER: I would like to raise the point that we haven't told Ambassador Finant yet that we will necessarily introduce this directive into the EAC for negotiations. No have reserved the right to do it if we consider it desirable, but we don't have to do it. 252 -6- 1 -5- Now, if the first introduction of the matter is by him with the generals representing the other Governments, why, I would feel sure they would have to then take it up with their Governments. So wouldn't it be better for us H.M.JR I would just like to raise the point that wouldn't it muddy the water? If General Eisenhower were told this or that was agreed upon or rejected by the European Advisory Council, wouldn' it make It more difficult to start right off and present it to them? for him to act, rather than if he got the thing fresh and H.M.JR: Do you mind if I argue a little with you? clean and he could go to town on It? MR. CLAYTON: No, sir. MR. RIDDLEBERGER: Under our present arrangements the point of contact with the Soviet Government on questions H.M. JR: I told this European Advisory Council--and I don't think the history has been a very glorious one--but I think that there is a good reason for It from Ambassador Winant's standpoint--he has really never had a directive. so I think there is a good reason why he hasn't been able affecting Germany is the European Advisory Commission pending the establishment of the Control Council. We have been ur ging upon the Russian Government the high desirability of establishing as quickly as possible the Control Council for Germany and have requested the Russian Government on no less than three occasions to speed sending their personnel to London for the nucleus groups, but so far they haven't sent them. Consequently our negotiating basis is London for to function, because from the top down be has never been told what the policy is. Now, supposing he gets this thing at the end of the week. Suppose we get it to him by the and of the week and he begins to work. He isn't going to get anywhere for the moment. H.M.JR: I am not satisfied, if you don't mind. months. I would think he ought to get it in any case for his own guidance at once. General, wouldn't you think so, regardless of what we night do about the European Advisory C MR. RIDDLEBERGER: Yes, I am merely explaining what the situation is, that is all. Committee? H.M.JR: I need the explanation, but if you don't mind GEN. HILLDRING: This is & little along the line I have been thinking. I would agree with Secretary Morgenthau wholeheartedly. If the day after Eisenhower got this document he were ready to begin negotiating with the other generals, or if he were going to be in a position to begin such negotia- little time. I think it is terribly important. of what my I have taking seen a & little bit they have been able and not been able to do, and if it is a matter of weeks, I would like to raise the point in consideration whether it might not be wise to dive this document to General Eisenhower so he could be studying it, because he is going to have to deal with the Russians, anyway. de isn't going to deal with the diplomats, but he will deal with the Russian Generals. tions within a short period of time--I don't know, Mr. Secretary, how long it is going to be before the Russians saye ak., we will let the Control Council begin functioning. think if we knew that we would be in a better position to answer your And if he could start fresh, without the thing being a little question. messed up in London--I wonder if his hand wouldn't be turned. MR. CLAYTON: Mr. Secretary, I think there is this point that we have had to consider in connection with that, and that is that If General Eisenhower takes this up with the Soviet, British, and French generals, it will come to then entirely fresh and new, and I an sure that it will be a matter they would have to take up then with their Governments, you see, because this is something that General isenhower's Government has formulated for him, you see? H.M.JR: I am willing to pass it if I can raise it again when Mr. McCloy comes. How will that be? GEN. HILLDRING: Fine. 1 MR. CLAYTON: All right, sir, fine. I think it is a good idea. PRECISION ROLL NO. TRADE MARK -8- D 254 -7H.M.JR: We are on a subject that needs your assis- H.M. I still would like to raise it when Mr. McCloy comes. Do you want to say anything, Mr. Crowley's MR. CROWLEY: Just this: There would be no harm in Eisenhower using this immediately for the area we are going to occupy. MR. CLAYTON: That is what I thought. MR. CROWLEY: If we don't use it for the area he is going to occupy, there may be long delay before you get an agreement from the Russians. H.M.J I an wholly in accord with you, but if this is thrown in the European Advisory Council, It is going to make It much more difficult for Eisenhower to function. 1 MR. CROWLEY: I wasn't disagreeing with that. What I meant was while you are waiting to get an agreement with the Russians Eisenhower should use It in the area. H.M. JR: At once? MR. CROWLEY: At once. H.M. Absolutely. GEN. HILLDRING: At once--wo would send it to him at once no matter whether he was negotiating or not. H.M.JR: You know what I have in my mind, and I should think you would be in agreement th me. GEN. HILLDRING: Mr. Secretary, I am sorry I can't say anything about the EAC, except this is the thing that haunts Eisenhower, and as his local agent, I an supposed to bespeak his worries. What disturbs him more than anything else is the fact that he is about to enter into a participation in the Government in the whole of Germany without any agreed plan. (Mr. McCloy enters the conference.) tance. May I state it? Is it all right? JR. CLAYTON: Yes, air. H.M.JR: Mr. Clayton just read this document, which I think by and large is an excellent one, and I congratulate the people who prepared it. In the first paragraph I raised this thing, and General Hilldring said he needs a little help, that If this document, when we agree on it this week, is sent to the European Advisory Commission and they fuss around with this thing and maddy the water 80 that when General Eisenhower gets instructions we are agreed on this--I raised the point whether the European Advisory Commission shouldn't be by-passed and it should go to General Eisenhower for his responsibility to take it up with his opposite numbers, the three generals representing the three countries with which they do business so that it is only a matter of weeks and they won't get anywhere. They will just fuss around over there In London, the European Advisory Com- mission, and make it more difficult for him to function. That is the way. Isn't that about the point? Mr. CLAYTON: Yes. MR. McCLOY: Well, as a practical matter, If we handle this the same way as 1067, this will go out as the American instructions to General Eisenhower, who will put it into effect in the Control Commission actively. I don't mean the Control Commission, I mean the Advisory Commission, EAC. So I don't see why are couldn't follow the same practice that we followed with 1067. We know from experience that for one reason or another the EAC hasn't been able to function expeditiously on these things. I don't believe they are ever going to get around to this document before we move to the Control Council level, anyway, but rather than bypass them and perhaps cause repercussions by doing so, would think we would avoid any difficulty by simply following the same procedure me followed with 1067. MR. CLAYTON: Which would be to send this direct to General Eisenhower at once for his guidance in his zone and also send it to the EAC for consideration by the representatives PRECISION MICROSTATA TRADE MARK MICROFILM ROLL NO. 256 255 0 of the four powers gathered there to see if they could adopt it for the guidance of the-- 10 them. MR. McCLOY: We will get in more trouble by by-passing H.M.JR: All right, you are the doctor. MR. McCLOY: That is exactly what Eisenhower intended to do with 1067, and that is what he is going to do until he gets a new 1067. said. H.M. JR: I am not satisfied yet 88 to what the machinery is the State Department has in mind to terminate EAC. here? MR. CLAYTON: Te read the document through, as we MR. McCLOY: You read all this while I have been coming MR. CLAYTON: The political and military-- MR. RIDDLEBERGER: We have no machinery in mind yet, Mr. Secretary. I don't know exactly when we can terminate it. Under the Moscow protocol there are surrender terms and their implementation. However, governments can refer to it any other questions they so desire. To date, they MR. McCLOY: Yes. MR. CLAYTON: And that includes paragraph fifteen. It was read that way so we could save time and could go immediately to those points where there was any difference and just dis- haven't done it. But if the British, for example, were to come in with a proposal that EAC take up this and that question, technically, they can do it under the Moscow protocol. cuss those points. Now, the first one is with reference to paragraph eight of this document, which is the criminal one. C H.M.JR: Mr. McCloy, would you be worried if this goes to Eisenhower and EAC that it would make it more difficult The Treasury proposes the following change. They would delete from the last sub-paragraph of paragraph eight the sentence which reads, "If you deem it desirable, you may postpone the arrest of those cases you have reported. So it will be understood, I will read the whole paragraph. "If in 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. for Eisenhower? MR. McCLOY: No, I don't think they are going to get around to it. think. MR. RIDDLEBERGER: They will never get to it, I don't MR. McCLOY: I wouldn't worry about it, and I wouldn't take the other alternative of deliberately by-passing them, because they would be provoked. Now, the Treasury proposes that the next sentence be deleted, "If you deem it desirable, you may postpone the arrest of those whose cases you have reported. H.M. JR: You are not bothered? MR. McCLOY: General, do you agree? GEN. HILLDRING: I agree. That is what I was trying to say when you came in. H.M. JR: God, I do work hard for the Army, but I don't C get anywhere. 0 GEN. HILLDRING: May I speak on that point? I think that that is the Mar Department's suggestion, that sentence, and I want to say first that the lar Department doesn't object at all to the philosophy enunciated above in the paragraph, and I am sure that no soldier will object to gathering these fellows up and throwing them in the hoosegow IMAGE MARK 258 11 C as rapidly as they can get their hands on them. I want to call your attention to the fact that some day--we are already getting a larger number of prisoners of NET--SS many, perhaps, as we can handle as prisoners of war. Certainly there will come & time when with five or six million soldiers of various kinds in uniform we will arrive at & point where it will be impossible with the means at hand to treat then as prisoners of war. There will be too many. It will take the whole aray of occupation to keep these troops packed together. It is inescapable that before now and the hour of total defeat Eisenhower will have to hold together wi th his own organization souse of the military units. GEN. HILLDRING: Turning the underground loose in is a delicate issue we have not yet faced. We have Germany to hold this German Army together, and we can't do it by treating the German Army as we do, the few together hundred thousand prisoners of war that we have gathered in this country. We can't treat eight or ten million Germans as prisoners of war. We have to use the organization, the German Army to do it. Now, there is one point that is going to 08-H.M.JR: That doesn't say that there. GEN. HILLDRING: What does it say, Mr. Secretary? (Mr. Bell leaves the conference.) GEN. HILLDRING: If he doesn't, he is going to precipitate a problem for himself which both administratively C -12D and otherwise will be highly objectionable. I think we will all agree that we don't want the German Army to demobilize itself. We want to demobilize it in accordance with our purposes, and at the same time as decided by us. Now, if we tell Eisenhomer to lock up all of the SS officers which they have of all SS divisions as soon as he gets hold of one of those SS divisions, he has under the terms of this document got to immediately arrest all the officers in the division, so he has remaining ten thousand enlisted men that he has no way of controlling. And we say the SS officers should be arrested, you see. H.M.JR: Well, I mean there are a lot of words here that would be an out for anybody to let out the whole business. GEN. HILLDRING: Well, sir, I-H.M. JR: If you are talking about demobilization, you have said is quite different than what this paragraph what says here; there are & lot of measel words. They could do anything. GEN. HILLDRING: They can't do anything without immediately notifying us, Mr. Secretary. entirely in the field of demobilization people. of the German Army MR. McCLOY: And you have got to be perfectly realistic about this thing. There is an enormous category of people here estimated from two to three million that you have got arrest. You will have displaced persons coming out by to the tens of thousands. There are problems in Europe that nobody has any conception of until you are there, and the idea of imposing on General Eisenhower the rigid restrictions that he has got to take care of three million more people matter what his problems are is just improper from the making it impossible for Eisenhower to demobilize the German no standpoint of administration. You have given him the let tone, But we think in that instance if we say to Eisenhower rather than turn these SS enlisted men loose on the world around Germany at will, it is better to leave that division in charge of some of its officers until he has time to put them under the control of other And it is almost that we have put this reservation in. Otherwise, we are Army as we want it demobilized. I want to call your attention to the fact that the future underground of Germany is today manned--comstituted in the arnedforces of Germany. (Mr. Bell enters the conference.) the type of people he must arrest. He isn't going to the whole kit and kaboodle out. He sees the problem. 14 - 13 - He has got to have what he needs to give him the necessary flexibility to administer properly the most difficult problem anybody has been faced with since Calvary. MR. CLAYTON: There is a lot to be said for that, Mr. Secretary. You take, for example, you not only ask him to arrest all officials, Army, Government, and everybody who has Nazi leanings, but you say Nazis and Mazi sympathizers holding information and key positions in their commerce, agriculture, and finance. And with all these other organizations you are going to get there an enormous army that is going to have to be arrested and put under lock and key or taken care of, supervised in some way. It is going to be a terrific job, I think. H.M.JR: Look, couldn't this paragraph be rewritten along the lines General Hilldring says in connection with the demobilization of the Army? MR. McCLOY: No, that is only one part of it. H.M.JR: This thing is an out to give an officer in charge of A village not to arrest anybody. MR. COE: As a matter of fact, the Army doesn't seen to be included under this paragraph. GEN. HILLDRING: You have got all general staff corps officers, one hundred thousand officers. MR. GLASSER: The first sentence in B says-MR. McCLOY: Every one of then is to be arrested and they are the ones-GEN. HILLDRING: You take every officer in the SS. MR. RIDDLEBERGER: And non-commissioned officer. GEN. HILLDRING: And non-conmissioned officer. MR. COE: Isn't the arrest and incarceration and renoval from positions of influence of the SS a pretty and ( important problem there? 260 GEN. HILLDRING: Absolutely. The only thing is, they are going to arrest them. MR. McCLOY: We don't say we are not going to arrest them, but give the fellow with responsibility some freedom to act BE against putting in jail willy nilly two or three do it. You wouldn't do it in this country. hundred people. In & didministering a country you just can't MR. CLAYTON: This says on that that if in the light of conditions which you encounter in Germany you believe that certain persons within these categories should not be subjected immediately, you see, to this treatment, you should report, and so forth. GEN. HILLDRING: It is only the timing we are talking about. MR. COE: Do you have anything in mind besides soldiers? MR. McCLOY: Yes, yes. I went into the city of Frankfurt the other day, and the fellow in charge of the water system the only fellow left, was a Nazi, and they didn't know how the pipes led into the city in order to get at them to repair the place. They got hold of him and used him, and some correspondent came along. They didn't use him as an official that issued any orders, but just collared him and said, "Non, look, I want you to sit in this chair, and I want you to run this water business until we get it settled. Some correspondent came ong and said, "he is a Nazi, and there is news account of the thing. And a neek later the fellow--after he got the thing located, he cleared out and they sent him about his business, but that fellow did absolutely right. There were people dying for want of water in Frankfurt, displaced persons, our friends and our own prisoners as well as the Germans. of course, you have got to be practical about that. And at the end of a week or ten days he put in a fellow that didn't know anything about the water system, but they had the plan and could really operate on that, but he couldn't have arrested the Nazi immediately. 262 16 - : 15 H.M.JR: Are you through? Would you gentlemen take this paragraph and say, "Report your recommendations or reasons to the Supreme Commander, whatever it is?" I have in mind Eisenhower and the Joint Chiefs of Staff in this country. I en't that right? MR. McCLOY: That is right. H.M.JR: "Report your reason or recommendation to General Eisenhower, period, and then leave out the next position in industry, commerce, and finance in Germany before you had somebody else to put in his place, I think the wheels would all stop. I don't think you would be able to do anything. MR. McCLOY: You have got to give Eisenhower also the discretion before he determines that he can arrest three million people when he has got twelve million people. H.M.JR: All the things you are saying--1 don't think it is worded well. sentence. MR. McCLOY: What is wrong? MR. COE: You couldn't do that, because this is to him. This is a directive to Eisenhower. It may be to the Control Council. MR. CLAYTON: You see, Mr. Secretary, this is directive to General Eisenhower. MR. CROWLEY: I think what the Secretary of the Treasury has in mind is that you may be able to get around this by having this top committee review this thing after they get a chance to get in there. If Eisenhower goes in and carries out in general principle who this thing outlines, there is going to be no complaint. But if someone under Eisenhower GEN. HILLDRING: From the JCS to Eisenhower. ( MR. McCLOY: And he determines whether these fellows are to be arrested or not. If he says they shouldn't be arrested after considering conditio in the field brought to him, he is a man of political acumen, character, and integrity, and he will carry out policy. But if he in his Judgment feels he can't do his job properly if he he out and him discretion arrests the Joint all Chiefs these of people Staff willy you nilly, give points the it to to suspend the arrest until he gets further word from here, and that seems, with the job such as you are giving General Eisenhower, that if you don't give him that discretion, it is almost fantastic. I talked to General Eisenhower about this. This came from General Eisenhower, that telegram that I sent. GEN. HILLDRING: Yes. MR. CLAYTON: I think that if you take in industry, commerce, and finance, I think from what a good many of us know about Germany, that if you would go on the basis of going in there and immediately resting and incarcerating every Nezi or Nazi sympathizer holding an important or key starts to eliminate this fellow and that fellow and plays favorities, that is what I see you object to. You have to have complete confidence in the fellow that is going to run this job, because the authority is so vast, as I see it, that unless be is the type of person that is going to carry out and is in sympathy with your directives generally, you are in bad shape. And I think free our standpoint that we have got to be sure that the man is Eisenhower that takes care of our area, that we do 8 good job in our own area, because you never can get along with your fellow associates if we don' do a good job ourselves, and I would--if you can rework that language--but I would be satisfied If on that particular thing we reserve the right to review with the Chiefs of Staff if it is not being carried out, in other words, that we might know something about what his policy is on relieving these people, on deferring, or delaying their arrest as to how he is doing it and what type of person he is, and things like that after he has had chance to operate. GEN. HILLDRING: In that connection, the report from SHAEF that came in this week--the leading paragraph is paragraph from SHAEF which says, "The wisdom of the policy PRECISION TRADE MARK MICROSTATI MICROFILM ROLL NO 264 18 283 17 C of immediate and complete denaxification of Germany has been deconstrated or the ground; it is a wise provision, and we are pursuing it with all vigor." They weren't sure of this policy over there when we first gave it to them. They weren't sure it was administratively possible, but they have come now to support it as avidly es we did in our directive to Eisenhower in 551. I don't think we will have any difficulty with sincere and honest execution of this policy. H.N.. JR: Could something like this, carrying out what take it that this Is a sort I am not sure we can Mr. of standing Crowley said, committee. possibly--I get it Legitimetized by the President, but how would this be to frame this thing? Here we are, doing the best we can, State, Treasury, War, FEA, and Navy, and if General Einenhower should find that he needs to postpone carrying this out, he would refer this to the Joint Chiefs of Staff and the civilian committee for prompt advi the Joint Chiefs of Staff that consult MR. McCLOY: Say that this may be subject to change from time to time, and especially this discretion here in dealing with NOT criminals, and that just a note back and forth would take care of that. H.M. If there was a note of communication from this committee-- VR. KeCLOY: ...to the Joint Chiefs of Staff-- H.M.JR: saying this committee would like to be oon- sulted, that would be agreeable to me. MR. CLAYTON: Would this language do it? This is just . suggested change in the drafting, If in the light of conditions which you encounter in Germany you believe that it is not immediately feasible to subject certain persons within these categories to this treatment, you should report your reasons and recommendations to your Government through the Joint Chiefs of Staff. H.M.JR: That is an improvement. with us on that. MR. CLAYTON "If you believe it desirable, you may $ GEN. BILLDRING: Mr. Secretary, when we say the Joint Chiefs of Staff in this document, we are giving him the exigency of our Federal Government for whom he immedia tely works. When this question cases to the Joint Chiefs of Staff, they will immediately turn it over to the Interdepartmental Committee. They won't arrive at any-MR. CROWLEY: That is what you want. GEN. HILLDRING: They won't arrive at any decision on this thing. MR. McCLOY: That couldn't be in this directive. H.M.JR: Couldn't there be a note going to the Joint Chiefs of Staff saying, "In case this thing takes place, refer it to us immediately* MR. CROWLEY: I think you can go further then that. I think in your note, Jack, you can say-1.M.JR: That would satisfy me. postpone the arrest of those whose cases you have reported. it up. H.M. JR: "Pending hearing from them." Does that clear MR. McCLOY: that I and anxious to do, and what Eisenhower wants, is to have the right to hold up these arrests pending further determination from the Joint Chiefs of Staff. H.M.JR: This doesn't say that. MR. COE: Couldn't we say that at the and of this sentence, *Pending determination from the Joint Chiefs of Staff?" GEN. HILLDRING: That is the intention of the language. H.M.JR: Then let's say it. PRECISION TRADE MARK MICROSTATI MICROFILM BOLL NO. 265 285 20 D ( MR. CLAYTON: All right, put it right at the end, "Pending determination by the Joint Chiefs of Staff-MR. DESPRES: "...by your Government." MR. DOWNEY: I think we feel that conclusion is satisfactory, Mr. Secretary. H.M.JR: It is . tough crowd here. I have never worked with you fellows, but unless you talk louder, you will be overlooked. MR. McCLOY: "Pending a decision communicated to you MR. McCLOY: Louder and oftener. from the Joint Chiefs of Staff. NR. CLAYTON: "Pending H.M. JR: Is that all right with you? And then would somebody draft it? MR. BELL: Does that preclude him from taking any action if he subsequently says they should be arrested? MR. McCLOY: Then he would no longer think it WHB desirable. The basis is wiped out. H.M.JR: How does it read now? MR. CLAYTON: "If in the light of conditions while you encounter In Germany you believe that it la not immediately fensible to subject certain persons within these categories to this treatment, you should report your reasons and recommendations to your Government through the Joint Chiefs C of Staff. If you believe it desirable, you may postpone the H.M.JR: It is to go to the Joint Chiefs of Staff that this committee is to be consulted. MR. McCLOY: It doesn't do any harm to send communica- tions to the Chairman of this committee and the Joint Chiefs of Staff saying, "If this thing comes up, please consult us." They will consult us, anyway. H.M.JR: I would like very much to have the-GEN. HILLDRING: In the Interdepartmental Committee arrest of those whose cases you have reported, pending . decision communicated to you by the Joint Chiefs of Staff." all that the Chairman has to do is tell McCarthy to send MR. COE: I think we ought to esphasize that it is MR. CLAYTON: Be can send a letter then to the Bar Department--to Stimson--and ask if he would do that. to be through the JCS. H.M.JR: That? MR. McCLOY: That doesn't make . bit of difference. GEN. HILLDRING: No, because you can't get the Joint Chiefs of S.aff to make any political decision; they just don't do it. MR. VcCLOY: That isn't anything that should be in this paper artistically at least. It should be in a different one. 1 KR. CLAYTON: We have it here, and-- H.M.JR: Navy? In this crowd you have got to talk up if you want to be heard. such letter. it? H.N.JR: This is the Interdepartmental Committee, isn't MR. McCLOY: Just a bunch of guys named Joe as far 8.8 I all concerned that are meeting today, just the people interested in this. MR. CROWLEY: Just . bunch of fellows who got together. Isn't that it? MR. CLAYTON: The next question is that the Treasury asks that the following new sentence be added to the end of paragraph eight. Paragraph eight is the one we have just 268 -21- t 22 D written, and they ask the addition of this sentence, "In no event shall any differentiation be made between or special consideration be accorded to persons arrested Ither as to manner of arrest or conditions of detention upon the basis of wealth or political diplomatic, industrial, or other rank or position. MR. CROWLEY: In other words, they all go to the hoosegow together. H.K. JR: That would take care of Von Papen. MR. McCLOY: I wouldn't know about that. They had Von Papen in B vills. I didn't see him, but I heard they had him in a villa under guard. They didn't put him down in the common hoosegow. H.M.JR: Why not? MR. McCLOY: That was a determination they made; they 1 were trying to get some stuff out of him--some information. That WAS one reason. They thought they could probably get some information. H.M.JR: We thought this was democratic with . small D. MR. McCLOY: I think you are putting limitations on the manner of apprehension on the administrative officer in the field that is unnecessary. You may very well, for one reason or another, want to treat one prisoner differently from another. MR. DOWNEY: Doesn't the Geneva Convention have some bearing on that, General? GEN. HILLDRING: I don't think it has. I would think not. MR. RIDDLEHERGER: Or other rank or position--that is very broad. GEN. HILLDRING: Under the Geneva Convention, putting-- MR. McCLOY: Tie will have inspections. The prisons will be run under the military system, and we will have see normal routine inspections. They that I there no abuses of this sort of thing thatwill is done. mean,are you won't have any favoritis in running the prisons. There may be ime when you may want to put a fellow who has some scientific information or industrial information in 8 vills and give him some cigars. GEN. HILLDRING: I think there should be included in that, certainly this, "Except for intelligence purposes. MR. COE: That amendment would certainly not be out of spirit, out of the intention of this, because our intention is simply to have it done in . democratic may, which is the way the people would want it done, and we think that the tendency will be to discriminate--tuat was the basis in Italy--unless you say something to them. But if you say something to them, they won't discriminate, if you want to do it for intelligence purposes. MR. CROWLEY: You had in mind no discrimination unless there were justifiable circumstances, and intelligence may not be all of them. MR. McCLOY: You may have others. H.K.JR: That did they do in Italy? MR. COE: In Italy in general they started out with better treatment by rank. The British have that very marked in their thing all the way through on this defascist tification and denarification. Unless you go after these main problem people and treat then as you intend the generality to be treated, they will get special consideration, and the first thing you know, that will degenerate into leaving then in positions of importance. We could put an exception in there, Except for intelligence or other military purposes. MR. KcCLOY: how about diplomatic rank? H.M.JR: Why the hell should & diplomat be treated any differently? Take 6 fellow like Von Paper who is a vicious person-why should that nan get special treatment? He should 270 24 D H.M.JR: Why should a fellow like Von Paper get treated any differently? get especially harsh treatment, and not especially good treatment. Why should a diplomat be treated any differently from anybody else? I can't see it. MR. McCLOY: That is something for Eisenhower to determine. I think Von Papen--I have suffered at the hands of Von Papen, personally, and I know all about his wickedness, and I don want to be in the false position of arguing in favor of a high-class Nazi, but I as thinking about your trying to tell Aisenhower how he shall run the prisons. You have got here, number five, "Officials of the police holding a rank, or equivalent positions of authority, above that of Lieutenant. That is irrespective of whether he MR. CLAYTON: They treat ours differently. It is kind of a gentlemen's agreement. MR. CROWLEY: Fraternity, if you will. H.M.JR: It is time it is stopped, I think. These is vicious character or not. He gets arrested. It may people are outside the pale. I had three Treasury people In the Philippines, and two of them died. I couldn't get then any diplomatic status, and why diplomats should come out and Treasury people and others starve to death, I don't see it. I don't see why they should get any different very well be that Eisenhower would want to put that fellow in a protective custody status rather than an inner dungeon. H.M.JR: Let's come back to two. treatment than anybody else. MR. CROWLEY: Why couldn't you do this: "In no event MR. CLAYTON: I don't know but what you are right there, Mr. Secretary. 0 shall any differentiation be made or special consideration be accorded? If you here to change that around and use that same language and say that they shall not be given special consideration solely on account of the related factors that you mentioned, that would give him the right to use discretion, but wouldn't do it entirely because of H.M.JR It burned me up, but I couldn't get my Treasury people out. And two of these poor fellows died of starvation and maltrestment just because they were Treasury people and they weren't diplomats. those factors. MR. JAYTON: I am just speaking from the point of view of custom. It seems to me that there is a much broader principle involved than that, and that is that we should leave . high degree of decision to General Eisenhower, the nan who is in charge of the whole thing and who will have H.M.JR: That is all right. Let's get it down and see what it looks like. Do one thing at a time. In they to deal with conditions as he finds them, whic are KR. COE: I would propose, "With such exceptions as you may find necessary for intelligence or other purposes, probably you will insure that. going to be altogether different from what we, sitting here MR. CLAYTON: I would think that would be all right. washington they to be.me in all I think these change from today, day toanticipate day, and it will seens matters we ought to leave a good deal of discretion to him. Let him know what our general policies and principles are, and then let him carry then out with intelligent and vigor, which I think he will do. H.M. What about Von Papen? Didn't he once negotiate & little something over in this country? MR. McCLOY: He certainly did. I would like to get a crack at him. MR. McCLOY: It is all right. All I an talking about is giving him some leemay. MR. CLAYTON: Is that agreeable, Mr. Secretary? H.M.JR: I would like to hear it, please. 0 272 25 - - 25 - I MR. CLAYTON: I think it starts out--it would be better at the end, wouldn't it, Frank? MR. COE: Yes. MR. CLAYTON: Then it would read, "In no event shall any differentiation be made between or special consideration be accorded to persons arrested either as to manner of arrest or condition of detention upon the basis of wealth or political, diplomatic, industrial, or other rank or position, with such exceptions as in your discretion you may deem advisable for intelligence or other purposes. Is that all right? H.M.JR: It is O.K. with me. that-- MR. CLAYTON: If everybody is agreeable, then I think H.M.JH: That takes care of the diplomats. (Laughter) 1 MR. RIDDLE BERGER: I would like to rise in defense of the diplomats. As the only professional one here, I would like to say this, that in Germany--you may have had some left in the Philippines, but in Germany the Treasury people came out, and we stayed behind. I wented to make that point. I WBS engaged in taking care of the interests of the prisoners of WAI of our allies, the French and British in Berlin, and you very kindly lent us your assistance--th assistance of your personnel there until 1940, when you jerked then out from under me, just like that. (Laughter) H.M.JR: Where were we? MR. McCLOY: will was reading. H.M.JR: We accepted that. MR. McCLOY: We finished paragraph eight. MR. CLAYTON: That is all. H.M.JR: Is that all? C MR. McCLOY: I think it is a good document. H.M.JR: May I r efer you to page ten, Mr. Clayton, the top of page ten, "To the extent that military Interests are not prejudiced and subject to the provisions of the three preceding subperagraphs and of paragraph 10, freedom of speech press and religious worship will be permitted. You say, To the extent of military interests, and then "Consistent with military necessity, all religious institutions will be respected. MR. CIAYTON: I all sorry, but I have a different draft from yours. MR. McCLOY: What paragraph is that? MR. CLAYTON: Seven, or eight? H.M.JR: Nine, D. You first say, "To the extent that military interests are not prejudiced. I can understand that, and then you go on and say, "Consistent th military necessity, all religious institutions will be respected. I would like the soldier to describe to me what the military necessity is. MR. McCLOY: You wouldn't requisition it. That is what he is really getting at. You will do your best. H.M.JR: Above you say, "To the extent that military interests are not prejudiced. It the we MR. McCLOY: That isn't in relation to religious worship, but property--Catholic church property, and things of that kind. isget general with have the had Catholic everywhere we toprinciple dickering, particularly properties, or other church properties. In Italy it was Catholic, and we like to give the instructions to the field tist so far 65 they can be consistent with military necessity they don't interfere with that. MR. CLAYTON: Suppose we say, "All religious property," instead of "institutions"? Does that meet your point? 274 28 1 27 3 H.M.JR: I didn't understand what it aeant. MR. CLAYTON: They might have to requisition some property, you see. H.M.JR: I see. I EBC thinking of interference with religious observance. MR. McCLOY: That is taken care of in the first sentence. MR. RIDDLE BERGER: The reason this says institutions is because they may not always OWD the property. H.M.JR: I didn't know what the military necessity was in relation to worship. MR. McCLOY: No. NO don't intend-- MR. CLAYTON: There is just one question here that 3 bothers me 8 little, and that is closely related to the criminal one, eight; it comes in section six, denazification. "All members of the Nazi party who have been more than nominal participants in its activities, all active supporters of Nazian or militarism and all other persons hostile to Allied purposes will be removed and excluded from public office and from positions of importance in quasi-public and private enterprises such 6.8 (1) civic, economic and labor organizations, (2) corporations and other organizations in which the German government or subdivisions have a major financial interest, (3) industry, conserce, agriculture, and finance. lie have the same problem there, I think, wi th respect to an uninterrupted continuation of the economy of the country, the necessary economy of the country, the services, and so forth, that be had about putting these people in jail. If we remove them from these positions before you have somebody else to put in their places, you may seriously interrupt very essential services and facilities for production and transportation, and so forth. MR. CROWLEY: will, I would think that If you start off with the thought in mind that you are going to leave these fellows there, that the men and the people administering it--it is going to be easier for them to leave the people in Then take them out, and I think you would be better off to these and that gone spell it out as to your principle that you are going to remove people, the certainly ones--that aftertop theymay have be on and energetically removed after you have your jails and your courts and everything all cluttered up. When you get down to the second or third level, then you may use some discretion in leaving men in to do a particular thing, because you have to have that know- ledge, but if you try to spell this thing out now, emporize with it, I can see that you come out with this thing that those boys stay in there forever. I think you ought to spell out your principle, and later on, after you have collected together as many of these top people as you can, then if you want to review It in two, three, or four months, or something like that, you can review it. But unless you are positive that you are going to eliminate these follows, they will play footy-footy and be in there a year or ten years from today. They will tire you all out the way they will throw rocks in your machinery. H.M.JR: I think what you say is very wise. MR. ATTON: Well, you have to recognize this, I think, Mr. Secretary, that the men in important and key positions in all these activities are Nazia and Nazi sympathizers. Now, supposing you go in there and you have a list of them and you kick them all out at once, transportation, railroads, and Industries of all kinds before you have satisfactory people to put in their places, you are likely to effect serious interruption of the economy of the country which would react on our occupying forces and on the ability of the people to provide the minimum standard of living. H.M.JR: I would like to answer that if I may. I think if after each category you immediately put In a peragraph saying, "Exceptions would much rather use that exception which we argued about, being referred to the Chiefs of Staff-having it at the end than having it over all. MR. CLAYTON: So would I, if it is agreeable to you. MR. CROWLEY: That is right. 276 -301 29 you are going to have economic chaos in Germany. C MR. COE: That is mitigated by two facts. First, . lot of them will run. Second, when we do the fighting, we certainly disrupt it anyway through there. Now, I think with Mr. McCley that this thing is so deep-rooted that unless you do it--it WAS at his insistence, his advice, that we put In that last sentence, "No such person shall be retained because of administrative necessity, convenience, or expediency, because it is the overwhelming tendency to have the officials on the spot, to retain them for those purposes, and you have to go to the other direction to H.M.JR: Just have it once. MR. CROWLEY: You declare your whole policy and then put in the last paragraph making your exceptions. H.M.JR: If some of this doesn't work, you can refer it to the Chiefs of Staff and tell him why. MR. CROWLEY: That is right. MR. McCLOY: We are very much interested in this counteract that. particular thing. I would talk, I think, against that a little until I saw how this thing moved in Italy. I think this is 8 good paragraph as it is. We are going to have inefficiency in Germany There is no question about economic inefficiency as ait.result butgoing this Nazi There of this is policy, to be great policy is very deep-seated. we are situs- You have to take drastic and deep-seated methods to cut it out, and this will probably not interfere th the case to use man in tion Frankfurt where you that have got talking this about, the to get temporary the first train running, then put him in jail and then kick him out. I have seen it operate in Italy under language not qui the sane as this, but somember similar to this, and would rather hesitate to see any further loosening of this until we have been in the picture for a while and have dealt with this very deep-seated cancer that exists in Geruany. big services and these big industries if you take all the key people out, all the know-hom people-- throw them out before you have somebody to put in their places, I think VR. CLAYTON: That is what this in practice says. MR. CROWLEY: But administratively you have to do it as quickly as you can; I assume you are going to give the men the right of administering it. MR. McCLOY: It would not in practice preclude the Frankfurt case I gave. I said, "Of course, you can do that, but get the fellow out as soon as he has shown you where the faucet turns off. T MR. CLAYTON: I don't think, Jack, you give enough importance to the absolute necessity of management in these MR. CROBLEY: You wouldn't issue an executive order to O.K. this afternoon throwing all these people out. MR. CLAYTON: If this in practice-- H.M.JR: Well, I remove ay sissy attitude. MR. McCLOY: Well, in 8 sense we are talking against ourselves in that, because we are responsible for the administration where the military government exists, and would think we ought to arr on the other side in Germany because all our experience is that the thing is such more deep-seated than we had any comprehension of. MR. CLAYTON: I agree with that clause. MR. CROWLEY: The only thing I had in my mind is, while you are dealing with people, if you told a fellow he could sell the Willard Hotel for nine million dollars or negotiate for nine hundred thousand doilars inveriably he would make the deal that way and say it is the best he can get. Administratively we know that these fellows are going to have to go alow, that there isn't any reason to make It easier for them to go slow. And I think that your language there is all right; and if Eisenhower has the edministration of it, TRADE MARK MICROSTATA MICROFILM ROLL 278 32 : 31 C E month, and we would have caught hell in the her Department, and so would I. it is going to take him some time before he gets around to certain key places, but nevertheless he has a directive to do it as rapidly as he can. MR. McCLOY: That doesn't mean that you can't collar this fellow and say, "You tell me what to do. You can do that. Now, If we spell it out and make a lot of excuses for delaying it, he will be slower in getting it done. him H.M.JR: Do I understand this is acceptable to everybody in this room? MR. CLAYTON: 1 imagine he is the type of man who will out directives like this, which is in very precise GEN. HILLDRING: There is one point I would like to raise: The language in paragraph eight, Mr. Clayton, paragraph seven-A--that has been changed in our draft at my suggestion, and I just didn't get the wording. I would carry language, with a good deal of discretion. If he will, then if I think it is probably all right, but I do believe that this were executed 88 it reads you will have plenty of trouble in Germany. If it is satisfactory to the Army, it like to get it. is satisfactory to me. $ MR. McCLOY: Administratively we won't do as good 6 job with this by long odds, but you have got to break the chain somewhere. You have got to get somebody into a job quickly who is going to take the place of the Nazi sympathizer, and there is always a second-rate man around. No man, BE we all know, is indespensable, and you will find somebody down the line, a foreman who never did the thing before, but who will perhaps grow with the job. The tendency is so strong the other way that I would rather lean over this way. MR. RIDDLE BERCER I can give it to you, General, if you would like it. GEN. HILLDRING: We want to drop the idea of immediately disbanding. ( MR. McCLOY: The have never tackled the question of how rapidly we should disband the German Army. MR. IDDLEBERGER: "In your zone you will assure that the German armed forces, including para-military organizations are promptly demobilized and disbanded in accordance with policies and procedures set forth in the Instrument of Unconditional Surrender or in other directives which may be issued to you. Prior to disbandment you will arrest and hold all military personnel who are included under the provisions of paragraph 8. GEN. HILLDRING: I think I. G. Farben is a good example that. I thanked God at the time that the story came out that we had told Eisenhower to clean those fellows out, of and under that pressure when the Army went in there and SATE this large plant I think their instincts were to let it alone for the time; under their strict instructions they moved Farben out, but they told a few of them, "You 20 to your house and stay there. This is big shop you have turned to us, and we sent to talk to you, but they had cleaned over out and taken then out of the establishment. A newspaper GEN. HILLDRING: That is all right. MR. RIDDLEBERGER That is acceptable. man them got hold of I. G. Farben and he said, "I am adviser to Military Government officer. Well, fortunately he the out of office. He WES there to help and advise if they MR. McCLOY: There WB S this thought they had on the other side on paragraph eight, but I think it is probably taken care of when you throw out . dragnet and bring all these fellows in. You will get some that are not properly detained. That paragraph five, for example, says--Eisenhower was eeded his help and advice, but he was shut up in a house n around the corner where they could get at him if they wanted to know where the faucet was. But if you hadn't had that policy to get rid of those Nazis, they would have left that fellow in charge of that plant for a week or two, or 0 280 34 0 C 33 said, "How about setting up 8 court at which these fellows could make their applications and prove their non-Nazi aspect and character? In the interest of causon justice and decency we ought to hear their case, because this is a very rough form of justice we are applying here. It is a thumb rule that isn't in accord with our ordinary instincts." There never has been any decision as to how we handle them once we round them up. MR. CROWLEY: You wouldn't have any trouble in convicta man that was a Nazi leader or a man that was a high-up ing in the party. But supposing they went up and picked up I am inclined to think that there is something in the point, but I think that probably we have taken care of it fellow working on . farm or in a store. Would you throw him in a jug and keep him there indefini tely and say, "Someone told me that you are a Nazi? to the Joint Chiefs of Staff. Now, what do you think of that? MR. KcCLOY: No, no, it is all in paragraph eight. Everybody in paragraph eight they are the ones we are in the provision that enables his to make & recommendation that? MR. COE: I think so, yes. talking about. That said, "You will search out, arrest, and hold, pending receipt by you of further instructions to their disposition, Adolph Hitler, his chief Nazi MR. McCLOY: What do you, State Department, think bout as associates, other war criminals and all persons who have MR. DESPRES: As it now reads, I don't think-C it on the shoulders of the Army as to what happens next. MR. McCLOY: Has proposal WAS a court that would-- this is an arbi trary rule--not attempt to reach 8 rough approximation of justice to take care of individual cases. Let these people appear before a tribunal and take burden of proof of showing that they are all right. participated in planning or carrying out Nazi enterprises That Involving or resulting in atrocities or war crimes. is one section. MR. CROWLEY: That is all the cop does. H.M.JR: Then, "All persons who, if permitted to remain large would endanger the accomplishment of your objectives at will also be arrested and held in custody. The following be is a partial list of the categories of persons to arrested in order to carry out this polley. MR. CLAYTON: I think that is all right. MR. DILE BERGER You mean before you arrest them? MR. McCLOY: No, his idea was that this would be a means by which they got out of their durance. MR. CROWLEY: You would give then a chance at that? And then he goes down through eleven different categories, but they look on the surface 85 If they are bad actors, and there are lots of individuals in there that are not bad actors. GEN. HILLDRING: They are going to town, Mr. McCley. are going to do this town by town and send military and They police battalions and detachments of CIC into a town MR. McCLOY: There is no provision for that now; you just detain them. that up. Somebody might say, "This fellow who runs clean store was a so and so before the war, and the M.P.'s the corner will go down and grab him. He professes and says MR. CROWLEY: You arrest a fellow and convict him, and that would be the end of it. MR. RIDDLE BERGER: That has always been our problem in ( that section; we round these people up and we have just le ft U that they are wrong, but he goes into the Black Maria, and off be goes to camp, and there he is. MR. CROWLEY: And there is no way of getting him out? 281 282 36 0 35 out. GEN. HILLDRING: No, there is no way of getting him MR. McCLOY: We have compromised on two to three mil- lion people here. Now, I think it a good idea to have a court, a good sensible thing to do. MR. COE: The President's directive said, "Hold him for trial and punishment. GEN. HILLDRING: We haven't any war criminal decisions. MR. CROWLEY: But Jack, just as an administrative thing you are going to have to set up some macninery for trying smaller people to find out what they are guilty of. MR. McCLOY: I was in the town of Eschershausen the other day, and it brings up this question of the rural the up. MR. CLAYTON: May I suggest that we insert one paragraph here dealing with it just In broad outline and say that a subsequent directive will be formulated and issued to deal with it in detail. Would that be satisfactory? MR. McCLOY: Deal with the disposition? MR. CLAYTON: No, no, with the constitution of it, the work and the handling of it, and so on. H.K.JR: Sure. were yards, burgomaster. and they They had fighting burgonaster down the The road company . thousand con- mander was a lieutenant who had been desi gnated for civil affairs in this combet company, and he had the burgomaster in before him. There were four displaced persons, three Russians and one Dutchman, who were arguing and testifying in behalf of the burgomaster saying he was a good fellow and he was kindly and not a Nazi and was all right. Otherwise that burgonaster would have gone into the hoosegow with C the rest of the prisoners. That was just a thumb court. There was no regulation that provided for that. That is down to the ground. MR. McCLOY: It is contemplated that a court will be set up to permit application to-- H.M.JR get out. MR. FORLER: This is out of our bailiwick, since we are interested only in economic matters, but once having been a lawyer--don' we consider that 88 a matter of normal administration he would go ahead and constitute seal- judicial machinery so these people could come in with petitions? Are we here in this group at this stage of the gase going to do some- MR. CROWLEY: Down to a certain level you have war thing in this directive that micht tend to inhibit the establishment of a useful judicial process over this. MR. McCLOY: These are general arrests that bear no Wh. McCLOY: Well, may I put it this way: "Why do we in this group order them to arrest all these people? criminal courts, don't you? All you need is something in the Lower level. relation to war criminals. MR. CROWLEY: Justice court. MR. McCLOY: This is a sort of--tnis is an instrument for carrying out a general denazification policy more than anything else. You are arresting wi th a dragnet everybody who might be war criminals or might be antagonistic to the occupation. ( MR. CROWLEY: On that basis, if you carried that to the full extent you have to arrest half of Germany. MR. FOWLER: There is a reason for certain groups of people, and we assume that he is going to make some mistakes in doing a mass gathering up, but he is going to establish some kind of machinery to sift out the mistakes that have been made and rectify that situation. I don't see why he has to wait on us to, in effect, correct his mistakes. - 38 - 283 284 37 because before you can give them . trial, there is going to be quite million a cooling off period if you are going to have two or three of them. E.N. JR: We tell him in so many words to arrest every officer of a certain rank. If that is what we say, shouldn't we at this time tell him that he can set up ameliorating processes? MR. McCLOY: This is meant to catch the big shots, not the little fellows, but in attempting to catch the big fellows you have roughly defined those, and it is very rough rule. Paragraph five I have referred to. I have MR. FOWLER: that is more important here, it seems to me, although this is B purely political matter is that some political policy as to the ultimate disposition and treatment of these people who aren't in the definition of war personally experienced the injustice of peragraph seven. It says, The leading officials of all ministries and other category should be arrived at, and what is more important than the setting up of machinery without policy is the establishment of some policy, and then when you have a policy you would know better what kind of machinery you want. Maybe you might keep them cooled off for six months, generally keeping things pretty well under control. You might make different types of policy here, and it seems to me you have got # whole area-- high political officials GOWN to and including urban and rural buergermeister and officiale of equivalent rank. There are many rural buergermeisters in Germany today who are not Nazia at all. they have been left there because they were good administrators and haven't been touched. MR. COE: Any suggestion after the first sentence of B? D MR. McCLOY: The policy is stated here, isn't it? We aren't getting into the war criminal business at this time. We say, "All persons who, if permitted to remain at large would endanger the accomplishment of your objectives will also be arrested and held in custody. The following is partial list of the categories of persons to be arrested In order to carry out this policy: It may be that these categories we have listed may not fit that policy. MR. CROWLEY: Well, Jack, I think this is an excellent document. You talk of going in and having a democratic form of government in Germany. On the other hand, I don't think are the ones Into any of us feel that the very little people in Germany, with attacks few this exceptions, war or made brutal that ledon people, their and country it would seem to me that if we are going to be consistent with those little there should be something set up, Jack, to give those people, people And wouldn' put them little a trial. you In--take them away from their families and put them in jail and keep them there indefinitely without giving them some right of trial. You are going to have a cooling off period for them, as Joe says, without putting anything in the order, 0 MR. McCLOY: Eight-B. We say, "All persons who, if permitted to remain at large would endanger the accomplishment of your objectives will also be arrested and held in custody. And f think we should add something like this, "And tried or released through semi-judiciary machinery-through appropriate semi-judiciary machinery which you will establish. GEN. HILLDRING: That doesn't apply--war criminals are included in this? A. MR. McCLOY: No, war criminals are included in paragraph MR. BELL: I would like to make this suggestion at the end of eight, "If in the light of conditions which you encounter in Germany you determine through such inistrative judiciary machinery you set up that certain persons are within those categories --in other words, he sets up the machinery to determine whether they have been wrongly arrested, and makes a report to the Joint Chiefs of Staff based on that recommendation by the judicial machinery. 286 , MR CHOWLEY: Isn't that right? MR. McCLOY: It seems cumbersome. He would send the H.K.JK: If anybody should ask me, I don't know what they want to take the time to try them for. individual case to the Joint Chiefs of Staff. Then they wouldn't want to review that record. MR. BELL: For the records made in the case. MR. BELL: They would not. He has to have something to help him determine-- H. .Ja: You have got to satisfy the lawyers. MR. McCLOY: Yes. I think the point is we ought to send--I think your suggestion was a pretty good one to set up some mi-judicial body to determine whether or not these people that he has gotten through this dragnet do in fact prejudice or endanger the accomplishment of his objectives. If not, he should release them. Kis. McCLOY: We are going to try Hitler and the Gestapo and the SS troops and everybody who has participated in those organizations. This as the general thing will be sort of set aside with a prior reference for labor battalion work. That is about what it comes down to, execute the leaders. MR. CROWLEY: Jack, if you are going to take two or three million people and are going to give them trials and hold them, what are you going to do with them eventually? Are you going to keep them forever? What you are interested in in this thing here is at these fellows and I getting rid of them, and then getting going down here top to the level that you feel stops that Nazi control. You are not interested in some little fellow that might have belonged to the Nazi Party because someone sold him membership or thought he H.M.JR: well, Mr. Clayton had something there. : MR. CLAYTON: would this cover it, "All persons, who, if permitted to remain at large would endanger the accomplishment of your objectives?" would they also be arrested and "held in custody until trial by an appropriate i-judicial body to be established by you? It 18 practically the same thing as Frank suggested. would get & better job. You are interested in getting the million or million and a half leaders in the country that you are going to treat as war criminals. H.M.Jkz What do you say? MR. COE: I like that. MR. COE: Some you are going to put into labor battalions. MR. CLAYTON: Is that all right, Jack? MR. McCLOY: Probably what we have done is state that all war criminals and all who had participated in the enterprise of the general Nazi domination are to be arrested. That is the general language. Then we go on and say "Arrest all these people, and it is a pretty good thumb rule test of the important Nazi people, but there will be in those categories innocent men, not just little fellows. MR. CROWLEY: Your war criminals and even Hitler get trials. You are going to give Hitler a trial. Aren't you going to give the little fellow who drives a grocery wagon & trial? MR. McCLOY: I think so. The war criminal idea is that B.B we have got it now. MR. McCLOY: How does that cut across the war criminal regulations? Mr. CLAYTON: It doesn't do it at all, because this is in a category of persons who--you see, war criminals are & different category entirely. This is only for people that in he thinks are below the level in crime of war criminals, but I would think that they would be dangerous to be left at large. MR. COE: This is release from the dragnet. MR. CLAYTON: That is what it is. 287 42 - 41 288 C H.M.JR: Some of these boys may be just as bad or worse MR. McCLOY: Would you read it again? MR. CLAYTON: Just after "Held in custody," say, "Until trial by an appropriate semi-judicial body to be established by you. If that body finds dangerous fellows, they will keep them in custody: If he finds them not dangerous, he turns them loose. MR. McCLOY: I think it is all right. What do you think, General? GEN. HILLDRING: It sounds all right, sir. MR. McCLOY: How about the rural buergermeister? H.M.JR: Don't worry about that buergerseister. MR. McCLOY: he is the little fellow; he plows in the field. Why don't you leave the urban buergermeister in? H.M.JR: He may have a bunen of bodies he burned right around the corner. MR. McCLOY: That means you are going to arrest every little leader who is a farmer. H.M.JR: I don't want the farmers exempt from that. (Laughter) MR. McCLOY: If you arrest that little fellow, it just doesn't make any sense. H.M. I want to talk for myself. MR. McCLOY: Say urban buergerweister; that takes in provincial towns and places like Nordhausen and and-- H.M.JR: If you don't want to distinguish, say buergermeister and let it go at that. MR. CLAYTON: The last paragraph gives discretion on that. MR. McCLOY: Yes, but be has to report back to the Joint Chiefs of Staff and everything else on that. than anybody else. Living in the country doesn't purify then. Mr. CLAYTON: Just report the name back. MR. McCLOY: He has an out there, but it's on the ground that It doesn't turn out to be ridiculous. Ma. CLAYTON: It seems to the that in this paragraph eleven-- MR. McCLOY: You are talking about high officials in one place, and then you get down to the lowest type of public official. H.M.JR: He might be the most vicious. Mr. McCLOY: So might a citizen, but not per se, not by reason of his job. H.M.JK: Well, I didn't put it in, but I hate to begin to make an exception, because you get all the lawyers out, and all the diplomata out, and all the farmers out. MR. McCLOY: You talk about leading officials and rural buergermelsters. MR. CHURLEY: Henry, I have got to leave. MR. McCLOY: We haven't begun to fight yet. Mil. CHOWLEY: When are you going into finance and economics? H.M.JR: There is one thing. Mr. McCley intends to leave to take at up eleven while tonight, be Is here, and as the I one understand thing no it, would is that like question of inflation. Is that right? Mr. COE: Either economic or financial. MR. CROWLEY: The economics is pretty well agreed to, isn't it, Frank, except the inflationary thing? PRECISION MICROFILM TRADE MARK ROLL NO 230 0 43 MR. CROWLEY: I certainly agree with that, and I think you ought to make an analysis of what this thing covers so that he would know it. MR. COE: Yes. MR. CLAYTON: lie could take that up immediately, the MR. McCLOY: Dg is very such interested in this business and spoke to the Secretary of har about it, and he spoke economic part. MR. CROWLEY: I have got to meat with the Chiefs of to the Chiefs of Staff about it, too. H.M.JR: Well, let's see, do you want to meet again that somehow or other when we are in agreement among ourselves Staff at half past twelve, but Joe knows it. H.V.JR: I mean, I think we ought to be thinking we ought to ask for a chance to see him and give him a review of this. tomorrow morning? MR. CLAYTON: You have that food meeting tauorrow MR. CROWLEY: I think so, too. morning, Leo. H.M.JR: Nine o'clock tomorrow. MR. CROWLEY: Outside of the inflationary thing and the economic thing, are we all right? MR. CROWLEY: Fine. Excuse no. Good by. MR. FORLER: There is one paragraph we want to propose. H.M.JR: What time is your food meeting? (Mr. Crowley leaves the conference.) 0 MR. CLAYTON: I was just going to say that in this paragraph eleven under eight it now reads that among the categories and persons to be arrested, "Any other person whose name or designation appears on lists to be submitted to you or whose name may be notified to you separately." That raises in my mind right away on the lists to be sub- MR. CROWLEY: Tomorrow afternoon. MR. CLAYTON: We could meet in the morning, then. H.M.JR: What time? mitted by whous and-- MR. CLAYTON: The sooner, the better. MR. McCLOY: that we have in mind there is the Ear H.M.JR: Nine o'clock? Crimes Commission list. MR. CLAYTON: That suits me all right. MR. CLAYTON: I thought, Jack, if we just say, "Any other person whose name or designation appears on a list to be submitted to you by appropriate authorities or agencies, or whose name may be so notified to you separately. Is that all right? MR. CROWLEY: All right. H.M.JR: Just one split second. I don't know how much President Truman knows about what me are doing. I think tomorrom we ought to let him know about it. Loean't he MR. McCLOY: Yes, that is all right. I don't know that you want to have an agency. Really the only way he should want to review this? I think we ought to be thinking about it. I think he ought to see the March 23 directive. MR. CIA YTON: I think he should, too. get lists is through the Joint Chiefs of Staff. 0 292 45 46 0 MR. CLAYTON: Shall we say that? MR. COE: With . wide loophole. MR. McCLOY: Yes, that is what it really means. That is the only communication he gets. H.M.JR: Let's just see a minute. I an all right. There WAS one objection, which is the thing which kr. McCley raised. This is accepted now, with the rural buergermeister in? MR. CLAYTON: "To be submitted to you by the Joint Chiefs of Staff. MR. CLAYTON: Right. H.M.JR: Yes, and the Government can give it to the Joint Chiefs of Staff and It will go off to him. H.K.JR: What were the things-- MR. CLAYTON: "Or whose name may be so notified to you separately. MR. COE: I think the economic thing-MR. McCLOY: I an at considerable disadvantage with MR. McCLOY: Yes. the economic situation; I only got a copy of it last night late. I only got one; somebody in the Wer Department had MR. GLASSER: Is the channel always through the Joint Chiefs of Staff? it. I only read it through half way this morning. It flashed a number of questions in my sind that I think are of same importance. And I would like to give it . little GEN. HILLDRING: To Eisenhower, always, yes. more careful study. MR. GLASSER: How about the Reperations Commission in Moscow? Would that be the same channel? H.M.JR: You would like to let it go? MR. McCLOY: I would like to read it carefully and critically and make up my mind on it. There are 8 number GEN. HILLDRING: Until we establish some informal arrangement, it includes them. In other words, Eisenhower now is the employee of the Combined Chiefs of Staff. he of things that disturb me about it. and one of the chief ones I would like to throw on the desk right now is where this fits in with Reparations Commission. That is a big subject and a very important question of policy has to be works for them, and nobody else. H.M.JR Except when President Boosevelt told him what determined there. he wanted. MR. CIAYTON: I don't think there is such difficulty about that fitting in with this reparations document, but there is a very substantial difference in the working group regarding the matter of inflation and control of inflation. GEN. HILLDRING: He does that in the capacity of . soldier. MR. McCLOY: That is right. H.M.JR: Could I have a seventh-inning stretch for three minutes to see whether the Treasury Is still intact? Would you just stop for three minutes? 1 have got to see if my office Is still running. GEN. HILLDRING: He works exclusively for JCS and gets all of his orders from them. MR. CLAYTON: Now shall we take up any other documents? (Secretary leaves the conference temporarily.) MR. McCLOY: How about ay rural buergermeister? Have you talked him out or not? O MR. CLAYTON: Now, would you like to go to this inflation question? CERTIFICATE OF AUTHENTICLTY OPERATOR Schwaits DATE 1/20/47 ROLL NO 4 DEPT. TIME START 1120AM - TIME FINISH: 12 peate B SPECIAL FEATURE OF COPY: Deary Contifiam troil #3 Drail Book # 835 (from to265 mn ) # 1945 Deary Book " " # #837 affiliation 1945 19+5 1945 838 afr 17-18 , (Predey 839 to ply up 292 2024 ) $ Cont on next rall # 5 I hereby certify - follows 1. I am . microfilm operator employed be MICROPULM CORPORATION (Company Name and Address 2 I made accurate and complete reproductions of the records " submitted by for microlining on the date or dates above mentioned . 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