Full text of Diaries of Henry Morgenthau, Jr. : Volume 839 : Part 2

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as an alternative to what I have just read. 'You will

permit the German authorities to use the means at their

H.M.JF Well, If it is agreeable to Mr. McCloy, I
would like to jam this thing through so we could clean it

disposal to prevent inflation. If, in your judgment the

problem of inflation in Germany is at any time assuming such
as will clearly endanger the the
shall immediately report

up not later than Friday.

MR. CLAYTON: When are you going, Jack?

in to Government, making
as
deem and
Preventative and restrictive inflation shall not constitute

MR. McCLOY: Tonight. I an taking the ten o'clock
plane.

proportions occupation, detail you may you your appropriate, requesting such objectives such recommendations instructions. developments of

grounds for the importation of supplies or rehabilitation
of the German economy, nor shall they constitute grounds

I will read this and talk to my people and General

for limiting removal, destruction, or curtailment of productive facilities in fullfilment 01 the program for geparations, demilitarization, and industrial disarmament.

Hilldring about it and see where we fit. I will raise the
points that occur to me, and they can carry on. I can, of

course, have telephone conversations back and forth for
the rest of the week, and maybe I will be back. The idea
is to go out and case back, and Jimmy Dunn thought we had
better go out right anay because of the conversations they
are going to have on trusteeships immediately.

It seens to me, Mr. Secretary that the proposal of
Treasury on that very vital subject of inflation in
the post-war Germany is pretty loosely drewn. It doesn't give
sufficient power, authority and Instruction to the commander
there to take measures on his own promptly and vigorously

H.M.JR: Don't you think we could clean this thing up

between now and Friday?

to prevent inflation, and I think we will all agree that

(

runaway inflation is very likely development In Germany
and that if it should develop into anything like the degree
to which it did after the First World War that it would It be
a very, very serious matter for the occupying forces.

MR.here-McCLOY: It is highly desirable, yes. The important
question
MR. CLAYTON: The can read paragraph thirty-eight in
here. just n minute, and this possesses the main point of difference

would greatly upset the economy and make the problem of

occupation and maintenance of a minimum standard of living
a very much more difficult one, it seens to me.

Paragraph thirty-eight says, "With due regard to paragraph 4 a, the Control Council should adopt such policies
as are clearly necessary to prevent or restrain inflation
of a character or dimension which would definitely endanger
accomplishment of the objectives of the occupation. The
Control Council, in particular, should direct and empower
German authorities to maintain or establish controls over
prices and wages and to take the fiscal and financial measures
necessary to this end. Pending agreement in the Control
Council you will assure that such measures BE you consider
necessary are taken in your own zone. Prevention of restraint of
inflation shall not constitute an additional ground for the

(

importation of supplies, nor shall it constitute ar additional
ground for limiting removal, destruction or curtailment of
productive facilities in fulfillment of the program for repars.
tion, demilitarization and industrial disarmament.
Now that is what the sajority of the working
agreed upon, and the Treasury has suggested the following group

H.M.JR: May I speak on that? I haven't had much time
with these men because I only got in late last night, but
let's make it perfectly clear that the Treasury doesn't want
to see inflation in Germany.

MR. CLAYTON: I NO sure of that.

H.M.JR: But it doesn't want to be held responsible for

it in case there is. That is the point, isn't its
MR. COE: That is right.

H.M.J And in discussing this & number of times with
President Roosevelt, he WAS very clear on it, and the point
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was that the responsibility should be the German's and not
ours, or to put it in the language of General Eisenhower
when I discussed it with them last August, let then stem
in their own juice. The point we want to make is that
the American Army should not be held responsible for infla.
tion if it should happen.

country are A, increase of supplies, B. over-all and
detailed controls extending into the life of the country
to make them very, very short supplies, and C, balance
the acute monetary--the excessive monetary demands which

there are. Be don't think the Army will be able to do it.
We think it is going to happen, anyway, and it is going to
give us all a black eye when it happens, especially If we
don' t start out with the deliberate language that It is
your problem. "You have got to do it. We recognize that
It is a big one, but it is up to the German people to regulate
this thing.

MR. CLAYTON: It is very difficult for ae to conceive
how they could be. I would think that everybody would understand that if you do get very serious inflation in Germany
after this war in spite of all the vigorous measures that
might be taken by the Army to prevent it, that it would be

the result, not of what the Army did or didn't do, but it

MR. CLAYTON: Yes, but the consequences of what happens

would be the result of the BER, and it would be a natural

make it our problem, and we have got to--ii you let runaway
inflation take hold of German economy to the extent that
farmers will not produce in the markets or in the towns for
currency, you are going to have a breakdown of the food

consequence of the unsound measures on which the war KB S

run.

H.M.JR: Well, I didn't-C

supply.

MR. COE: I think we can go beyond and say that there

MR. COE: Car you prevent that any way?

is going to be inflation in Germany. You can' have conditions which Mr. McCley said, all transportation upset and
everything wrecked, without having inflation, since even in

MR. CLAYTON: I don't know, but it certainly is encumbent
upon us to do everything in our power to do something about it.

friendly you have the full the

some sort
government
of cooperation
the
people and countries
where of people
which they of

MN. COE: We think on specific objectives of the occupation that our Commander in Chief out there has adequate powers
to do or take any steps which are necessary, but BE don't
want to have this extra objective which is . very vague one.

obey and which is trying to carry it out, ac have not been
able to prevent under similar conditions, inflation. i.e
are very reluctant to see any words put in which will suggest
that when this thing develops and the Army takes various steps,
that
it has
produced
it, that
it is responsible for not doing
it or not
taking
the correct
steps.

MR. DESPRES: May I say a word on that? In the paragraph

as we have it drafted now, It only talks about inflation of

the character and dimension which would definitely endanger
accomplishment of the objectives of the occupation. Now,
I would say that this is not an extra objective, and we

In the case of Italy the Army and ourselves had a
great deal of dead cats thrown at them on the question of
the exchange rate. It was said quite spuriously but generally
that the reason you had inflation in Italy was the exchange

indicate the end of the paragraph, for example, in this
matter of importation of supplies, Don import any supplies;
don't regard this as an extra objective in addition to
your other objectives, and we are not talking about inflation
In general as something to be avoided. "In addition to
achieving the other objectives of your occupation, though,
we say, Inflation is only of concern to you insofar as it
bears on the fulfillment of the objectives of the occupation."

rate. Inflation is a very vague term. If it means anything
it means rising prices in terus of

on the
financial
side,
acute
economic
chaos.

Now, under those circumstances, about the only remedies
that be as monetary people have ever been able to case up

(

with in any country that are satisfactory, including this

1

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Now, it might be argued that without anything on

inflation all this power that we give in peragraph thirtyeight is already implicit in the directive. I think essentially that if the directive were silent on this point that

the commander would still have the power, and the only reason
why we have this paragraph in here is because of the oppos-

ing view that it lan't already implicit. In other words,
if the Treasury believed that all this WAS already implicit
in the directive, then I think we all would believe that
it isn't designed to add anything additional. It is designed
to state explicitly what we believe is alreday there.
H.M.JR: Well, could I just say this, that I haven't

had enough time to study this, and I would like to have
about five minutes with Mr. Clayton and Mr. Bell and Mr.
McCloy just on our relations with the White house on this.
If I could have that and then we continue this tomorrow
morning, is that all right?
MR. FORLER: Is this conversation relating solely to

the question of inflation, or is it question of policy?

3

H.K.JR: You mean this thing?

MR. FORLER: Yes, that that you are going to talk about
relating to the White House.
H.M.JR: Over-all.

MR. FOWLER: I say that for this reason--

H.M.JR: No, no, not the inflation. I would like to

find out from these gentlemen just how we are going to
inform the President of what we are doing.

MR. FORLER: I wanted to ask you that for this reason:
In your absence & letter, perhaps, has case to you, copy of
8 letter from Mr. Crowley to Mr. Stettinius acknowledging
the receipt of the March 23 memo initialed by the President.
H.M.JR: I understand.
(

MR. FOLWER: And we were not consulted on that. We
think that document is in many ways a very excellent document,

and on most points there is no disposition to quarrel or
question it, but me think in its treatment of the subject
of economics and industry which is our principal concern
as a result of . letter to Mr. Crowley of September 29
from the President, that the document is not affirmative
enough that it is rather negative in character, and con-

fines itself to the surgestion that it is the job of the

Commander-in-Chief or It is our policy to eliminate the
industrial
WILD potential of the initial type, to prevent
its redevelopment.
I hope in your considerations of what matters will be
taken up with the White House you will refer to that letter
and to the attachment to it which tries to state points be
have in mind on that one point.
GEN. HILLDRING: Kr. Foxler, isn't that criticism
that you make inherent in the whole document? It states

the policy that will be followed in the initial post-defeat
period, and that is all we are trying to do in this one.
MR. FOWLER: And in that initial post-defeat period

it is only on the point I am discussing: I don't think

there is enough emphasis on the affirmative responsibility

of
thisare
particular
If you
going tosubject.
discuss--I am only throwing that out.
MR. McCLOY: Did me get & copy of that?

H.M.JR: I haven't seen it, but I have in sind that
this committee muit on the President--and certainly Mr.
Crowley would be among those present, and he could express
his own views, as could somebody from the Navy, but I did
want a few minutes with these gentlemen.

R. CLAYTON: Mr. Secretary, before use break up I
would like to explain to Mr. Fowler that that March 23
meeting me had here, as you recall, was primarily for the
purpose of trying to compromise certain different points
of view that State and Treasury had on the document. It
followed a meeting that was held with the President the
previous day in which McCloy and I participated.
H.M.JR: And in which I did not.

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H.M. JR: But you didn't protest the March 10 document.
MR. CLAYTON: You did not, and be case to you early
the next day, I think, and set down and went over the matter.
Mr. McCloy was present because he WAS present st the
interview with the President in which we went over the
March 10 document. And in the meeting TO had here on the
23rd,Mr. Fowler, the Navy also was not present.

MR. McCLOY: They accepted the one of March 10.

H.M.JR: Well, sure, you like the March 10 one.
MR. FORLER: Those sections which pertain to--

H.V.JH: I didn't like the March 10 one, and I took
it upon myself to protest, and 80--

MR. FOLLER: : understand.

MR. CLAYTON: It was largely a matter between Treasury and
State, and Mr. McCloy came in and helped us out because he
was present et the time we discussed the March 10 document
with the President. be understood what the President's
point of view BBD and helped us.

MR. FORLER: Le tried to make it clear in the letter;
and if we didn't, I hope you understand there is no concern,
except that we hoped that this committee in ite deliberations
in connection with this 1067, with the reparations document,
and any other document that may case up, would take into

MR. CLAYTON: I think, Mr. Secretary, what Mr. Fowler

has in mind is just this one particular point about the
deindustrialization of Germany. I think that is the only
point he has in mind.

MR. FORLER: Ye have taken it upon ourselves, if you
please, air, to suggest that some points in your March 23
document which we protest and hope can be taken care of

in the deliberations on the directive pursuant thereto--

:

H.M.JK: Can't they be taken care off

account the pointe which me would have urged bed we been

present at that time, and those points are specifically
spelled out in this letter.
H.N.JR: Let's call . spade a spade. Nr. Crowley
didn't do anything about the March 10 document. I was the
only person that did. he didn't file any protest about it.

NR. FORLER: They are taken into account here in substantial measure, but if you are going to write any new

document, we had hoped that those points would be taken
into consideration.

H.K.JH: Do these documents on my desk here contain

the points which you don't feel were sufficiently taken care

Now, you are protesting about the 23rd.

of in the document of the 23rd?

MR. FORLER: The protest is in the letter.

MR. F OWLER: With one or two minor exceptions, which
we will discuss.

H.M.JR: You didn't protest about the March 10
document; you took it BE It REE.

H.M.JRI Kr. Crowley, 8 $ for as I an concerned, will
have emple time. If me go to the White House in 8 body, he
certainly will be among those present all right.

VR. FORLER: The document on the points me had in

mind uss, we thought, a more satisfactory document.

KR. FORLER: Fine, thank you.

E.L.JR: Which one?
MR. FORLER: March 10th document on this point of
economics and industry.

1

-2-

)

April 24, 1945
4:20 p.m.
GERMANY-FINANCE

Present: Mr. D. W. Bell
Mr. C. S. Bell

Bob McConnell was here and wanted me to help him get

Chester Davis to head the agriculture thing in Germany.
I didn't think I could get him, but I gave him the name
of Milton Aisenhower, Administrative Assistant over at
the Department of Agriculture.

Mr. Luxford

MR. PEHLE: Dean of Kansas State College.

Mr. DuBois
Mr. Pehle

Mile LUXFORD: He's President now.

Mr. Coe

Mrs. Klotz

H.M. JR: Milton Eisenhower.

MR. D.W. BELL: He's on this list. He's better for
(Discussion off the record)
for.

H.M.JR: Now, somebody tell are what this meeting is

that.

H.M.JK: What about Williams? He's a good man.
MR. PEHLE: Wasn't he President of the Wharton School
of Finance and Commerce?

MR. D.W. BELL: You said you were going to talk about

finance and Germany.

list.

MR. C.S. BELL: There's & copy--it's the most current

good man but he doesn't present any name that you want

here. He's not very well known.

H.M. Jilg I am not interested in this.
MR. C.S. BELL: Then It's the one you have.

MR. PEHLE: That's the list.
MRS. KLOTZ: I have the original here.

H.M.JR: I think you were supposed to give it to me.
That what 1 have been stalling for.
MRS. KLOTZ: Thanks for helping me out.
for.

MR. D.W. BELL: I think possibly A. H. Williams is
the best on this list. Jesse Tapp down there is & very

H.M. JR: I knew there was something 1 was waiting

Well, Chester Davis called this morning. He is
leaving town and he suggested A. H. Williams. Incidentally,

MR. PEHLE: I like Saymozak.

H.M.JR: Dan, why don't you, to save me a little

time, call up A. H. Williams, and if he is interested,
have him come to see me Friday morning? How's that?
MR. D.W. BELL: Fine.

H.M.JR Joe wants to know where he stands on Russia.
MR. D.W. BELL: He wants to know where he stands on
Bretton Woods.

H.M.JK: I am right, am I not?
MR. DuBOIS: No, I don't know much about Williams
From what 1 have heard, I wouldn't have thought he would
be very good.

-3H.M.JR: Let's find out. We'll give him the works.
MIL COE: What happened to the Flanders suggestion?
H.M.JR: Who?

MR. COE: Flanders.

H.M.JR: He's & nuts and bolts man. They want a man
who knows Government procedure.

MR. LIXXFORD: Eisenhower is a good man.

H.M. JR: but I gave him to McConnell.
MR. PEHLE: Yes, but take him back.
MR. LUXFORD: He's a good Government man.

(

MIL PEHLE: And the Eisenhower name would help out
6 great deal.

MR. LUXFORD: You would have a powerful ally in Milton
Eisenhower.

MR. PEHLE: If you can get him.

H.M.JH: Well, I can't blatantly double cross ace
(Discussion off the record)

MR. D.W. BELL: I'll talk to Williams first thing in
the morning.

H.M.JH: You don't want to have anything to do with
this on Germany, do you? You haven't changed have you?

MR. PEHLE: No, sir, I have not.

H.M.JR: If you did, I would send you in a minute.

MR PEHLE: I would not like to go, Mr. Secretary.
Thank you very much.

-4.
(Discussion off the record)
MR. D.S. BELL: If williams doesn't accept, would
you consider a sex York wall Street Banker?

H.M.JH: Those are fighting words, Mr. Bell. No.

PRECISION

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(Approved by Secretary

April 24. 1945

April 24. 1945)

4:43 P. M.

3

,

Secretary Morgenthau on VE Day

Operator: Go ahead.
Mr. John
McCloy:

Hello.

HMJr:

Hello, John.

M:

This 1a a day for which the great architect of victory -- our late and
beloved Commander-in-Chief, Franklin Delano Roosevelt -- lived and died.

It is also . day on which to look to the Pusific,and report the words

I Just talked to to Stattinium...

HMJr:

Yesh.

M:

And he said although it vse important to get out

of our = leader:
"Our demand has been, and it remains -- unconditional
suppender.

there, the felt this thing probably vie - 1.3-

portant.
and
get the thing done and to COMA out
the and of
thetoweek.
HMJr:

Oh, wonderful.

M:

so that's settled. Me said don't bother to cell
him
bother to have Clayton 12 you call him.
Thatcon't
that.....

MMr

Every American can help celebrate the victory over Germany by buying more
far Bonds.

You our objective is Japan. And though V2 Day may still be for off,
every bood bought during the Seventh Mar Loan will bring the final victory
nearer.

Oh, I wasn't going to call him.

X:

Yeah.

HMJr:

I don't do that.

loan. Mar expenditures during March were the gratest for any month of this

M:

Yeah, well 1...

war. There is WTT indication that there will be . high level of expendi-

I had no intention of calling him.

ture for many months. Millions of net must be transferred to the Pacific

Yes, all right. Well, I'll tell Clayton not to

thester New equipment and increased quantities of supplies must be shipped

EMJr:

Yesh.

across the world's widest ocean. And our national obligation to the non wounded

Mr

But I figure it's decided now - it's all settled.

HMJr:

Right.

(

HMJr:
Mr

Victory over Germany has not leasened the Government's need for this

call him. Clayton said he van going to call him.

M:

HMJr:
X:

HMJr:

(

M:

HMJr:

in battle or otherwise disabled, and to those discharged when their services
are so longer required, is constantly mounting.

: feel confident that the American people, inspired by victory over the

And I'll see you tonight.

Mazin, and recognizing the seriousness of the struggle still aheed is the

That's good. Well, I'm delighted. I really think.

Pacific, will make the Seventh War Loss Drive an outstanding success.

Well, I agree, yes.

That success will any Well done" to our non in Europe. It will give our

Imonth
thinkold.
ve are subject to oriticism because it 1s a
I agree. We'11 get it out of the way.
Thank you.

non in the Puelific the tools of victory. It will serve - notice upon the
0

Japanese war lords that their days are numbered. It will provide the best
possible anti-inflation insurance.

me

ac.

TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION

DATE April 24,
1945

It will bespeal the Aurreum determination to data . 200 - the 20%

TO

done and clear the way for the more welcome
FROM

Secretary Morgenthau
Randolph Feltus

Subject: Outline of Public Relations Program on Bretton Woods
The Bretton Woods public relations program from

this point forward will be a continuation and repetition of many of the projects already started or accomplished, plus certain new projects.
1. We will continue to serve as a catalytic agent
for all kinds of organizations -- business, industrial,
civic, labor, religious, educational, trade and peace.

Copies to:

Some one hundred of these organizations have already
gone on record in favor of Bretton Woods. We will con-

New. Nota
Centle

tinue to stimulate them to further activity in putting

pressure on members of the House and Senate.

a. We have in process a digest of all stateand individuals. This will be circulated to

ments made in favor of Bretton Woods by groups
members of Congress by one or more outside
organizations.

b. Mr. Dierkes, of our staff has called on
The executive heads of more than 40 trade
associations headquartered in New York and
Washington. He has about 15 more to reach.

A typical result: The American Federation of
Retailers (an amalgam of a large number of

retail trade associations) will circularize

its 1,800,000 outlets, urging expressions to

Congress in support of Bretton Woods. The
Aeronautical Chamber of Commerce will similarly
circularize its members. The American Council
)

-2-

-34. Motion Pictures

of Importers and the Seattle Chamber of
Commerce will adopt resolutions and send
them to both Congressional committees.

Two specific projects are under way in this field.

2. Radio

a. Paramount has agreed to produce a short on
Bretton Woods and we have been working with
that crew.

We will continue to stimulate special radio programs on Bretton Woods, although most of the debate

type of programs have been used and it will be difficult
to revive their interest in this subject unless some

b. The Screen Cartoonists' Guild in Hollywood
18 considering a request from me to produce an
animated cartoon on Bretton Foods.

new angle of controversy develops.

8. We will continue to prepare special spot

announcements for distribution to commentators under the auspices of outside organizations.

b. We will arrange luncheons for commentstors such as those at which you were host.
The opening of the Senate Hearings will provide sufficient news angles to justify
repetition of these luncheons.

C

C. Specifically, the Hollywood dramatized
program on which you will appear, is scheduled
for April 30.
d. An example of our radio work 18 our
arrangement with the Blue Network in Chicago
for 4 spots on the National Home and Garden
Hour. We have scheduled Ed O'Neill of the
Farm Bureau as one speaker on this series.
3. Press
We will continue to work with key people among reporters and columnists and I hope we will be able to
schedule the Senate Hearings with more attention to the
news value.

We will prepare more special features for the
Foreign Language Press.

5. Congressional Record

We will continue to have placed in the Congressional Record the distillate of all favorable comments.
6. Speeches

We are continuing our program of filling requests
for speakers on a list of Treasury and non-Treasury persons.

a. We have completed and have in preparation a
number of speeches for interested Senators and
Representatives to use in floor debate. These
should be parcelled out by Joe O'Connell at the
proper time.

7. Collier's Magazine Article
This single item is so important that it requires
special mention. The lead story in the Collier's issue
to appear on the streets May 27th 18 an article entitled
"Bretton Woods Or World War III" by Frank Gervasi.

Gervasi wrote this article at my request and it has been
accepted by the editors of the magazine. It 18 enthusiastically favorable to Bretton Woods and pleads the case
adequately. Reprints of this article can be used in
many ways and the promotion department of Collier's will
cooperate by supplying reprints.

-48. International Latex Advertisements
The second International Latex ad 1s currently
appearing in 85 newspapers this week. The third ad

will be held for the Senate fight. It will contain
direct quotes from President Roosevelt's message to

Congress on Bretton Woods and from President Truman's

remarks at his first Press Conference.
9. San Francisco Conference

Harry White will watch the San Francisco Con-

ference and 1f it seems advisable, I will go out there
to see that mention of Bretton Woods 18 worked into
press and radio comments and speeches by prominent
persons.

10. Lobbying

We will continue to lobby individual Congressmen
and Senators and to help arrange conferences for the
technical experts here.

(

11. The Business and Industry Committee for
Bretton Woods, Inc.

This 18 probably the most important single project we have undertaken. This organization now has
offices in the Hotel Roosevelt in New York with Louis
P. Birk as Executive Director. Birk, who was my assistant two years ago, will conduct a promotional campaign
in behalf of Bretton Woods, using techniques that we
as a government agency cannot use. The death of President Roosevelt held up completion of this committee
set-up, because business people were waiting to see which
way Truman would go. Now that it 16 definite where he
stands, the committee 18 going ahead. Mr. Bristol of
Bristol-Myers Incorporated; Emmett McCormack of MooreMcCormack Steamship Lines and one or two others will

sign invitational telegrams which will go out this week

(

to 1,000 business men.

This is a sketchy memorandum on our plans and

does not go into any of the details. There are B

number of projects under each heading which I have
not discussed.

TRADE MARK

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APR 24 1945

To Employees of the Treasury Department
Engaged in Surplus Disposal.

It was with sincere reluctance that I reached the
decision ferred from to have the the Office of Surplus Property

trans-

Treasury Department. I want every
employee associated with the program to know that
greatly appreciate the splendid work that has been
performed, and that an indeed sorry to see so many
excellent workers move from the Department.

I

PRECISION

My decision to relinquish this task came only
after careful consideration of all the factors involved.
The initial location of the surplus program in the
Treasury resulted largely from the fact that for years
We had carried on a central purchasing service. It

soon became apparent that the two activities were not
necessarily related, and it seemed to me that the selling
job, with Its ultimate effect on commerce and industry
was not a proper one for the Treasury. The transfer of
organization
to the Department
of Commerce represents
athe
logical
organizational
improvement.

I am confident that all of you also are transferring

with the program will serve Secretary Wallace and the
Department of Commerce with the same faithful diligence
Good
luck.rendered to the Treasury Department and to me.
that you
Sincerely,
(Signed) Merry Worgenthes, Jr.

CSB:JWPinhg

4-24-45
-

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TREASURY DEPARTMENT

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PRECISION

INTER OFFICE COMMUNICATION
DATE

TO

FROM

Secretary Morgenthau

April 24, 1945

J. V. Pehle

For your information, I think you will be interested
in the marked portions of the attached issue of Vincent

Callahan's Surplus War Property Newsletter.

Enclosure

ROLL NO

315
WAYHE

CALLAMAN Registered Manager

VINCENT GALLAMAN

SURPLUS WAR PROPERTY NEWSLETTER

USED PHOTOFILM TO BE SOLD Program for the sale of several million

officials
feet of outdated serial panchromatic film has
launched
by Treasury.
Treasury
work.
thisbeen
which

made

the

long-awaited

Private Weekly Washington Information Service on

announcement

said they hoped by the program to alleviate to some extent the present market

Disposal of U.S. Surplus War Goods and Properties

shortage.

Telephone

Although the date as indicated by the manufacturers for the development of the film has passed. test of a "fair sample* according to U. S. Bureau of Standards specifications shown substantial percentage has a fog
density less than 0.20. and should therefore be unable for ordinary cos-

Letter No. 50, Washington, D. C., April 21. 1945.

mercial or ameteur purposes.

Dear Sir:

Since the major portion of the film is in rolls 9% inches wide. and

150 to 200 feet long. the film must be split, spooled and packaged.
by

Terms of Treasury offer - The film will be offered for sale to any
person, fire or corporation who owns or can secure by contract, lease. or

of

Beginning Tuesday. May 1. surplus consumer goods will be disposed
the Department of Commerce instead of the Treasury Department.
Switch was made this week because President Truman, Fred Vinson,

Kobilisation Chief, and the Surplus Property Board believed that the De-

War

op-

partment of Commerce was the logical Government agency to handle this
eration. Change was initiated by Secretary Morgenthau, who never felt

11

otherwise, use of the necessary equipment to test the film and convert
purchaser
into neatour or commercial since in satisfactory fashion.
requires is general that the processor test the film and return such portion

that the job properly belonged to Treasury. Secretary Wallace agreed to
take over Them. by Executive Order, the President transferred the Office

equitable and expeditious distribution. Appropriate markings are required

Property Board designated Commerce as disposal agency for consumer goods

A proposed contract drewn to be submitted to any prospect Ive

of Surplus Property of Treasury to Commerce. Simultaneously the Surplus

as appears unsatisfactory. The purchaser also must agree to make a fair.

There are no hidden notives behind the shift, no polities are involved

on film packages and notices included with the film to advise the public

of its nature.
Discussions between Treasury and the Office of Price Administration

and

$

are now going forward, and it is sentatively indicated that a retail price
will be set lower than the price for newly manufactured file. with

to those who have followed the surplus disposal picture it was no sur-

prise, though you say hear stories about log-rolling that preceded it.
Now as to the practical effect on buyers of consumer goods

as

will stinue to do business with the SORE (Tressury) people

regular trade discounts.

heretofore. at the some addresses. and under the 2000 regulations.

Products Division Treasury Department, Procurement Division. Washing-

beans only that another Government department has taken hold. Right nowWash-

able OF obtainable for proper handling of the film.

ington it is generally thought that nothing of importance may happen

is too early to say whether Wallace will make any major changes. In

ton, 25, D.C. All letters of inquiry should state facilities avail-

for months. You will receive ample official notice if and when you need

change your present procedure.

Protest by Association - Treasury's announcement came after a pro-

test lodged by the Master Photo-Finishers A Dealers Association direct-

ing attention of U. 5. officials to what was described as out-dated.
deteriorated military film *about to be thrown back on the public.
was demanded that the film be sold to the original annufacturers as
scrap. to be salvaged and completely reprocessed. -0-

HEARINGS ON MACHINE TOOLS - Senate Small Business Committee has set

dates for hearings or disposal of surplus anchine tools for April 25.
26 and 27. when this whole subject will be aired, especially the stake

of small concerns in redistribution. -0-

Cordially,

Vincent? Callahan
175

.

AT

YEAR

OR

AT

141

FOR

EACH
PRIMATELY

SUBSCRIBER

Real story of What Happened - Early as last November Secretary MorIt

genthau asked the President to assign consumer surplus to some other agency.

He renewed his request early this work with President Truman, after talking
with Wallace

Surplus Property Board shared the belief disposal of consumer goods
belonged in Commerce. In fact the Board made an informal approach along
this line in December when Jesse Jones was Commerce Secretary.

Washingto on officials felt that Commerce was the right place for this

activity. because of the Department . close relationship to the industrial
and commercial life of the country through its business advisory council
and its contact with small business.
Immediately after the transfer was announced, John W. Pohle, assistnot to the Segretary, who has been in charge of surplus disposal for

Treasury since late last Fall, talked with Secretary Wallace, who uness
him to join the Department of Commerce and continue to handle surplus.
But Peble, a career man in the Treasury Department prefers to remain at

Editor.

ONLY

WITH
THE SURPLUS BOARD WAT
- WHOLE or PART NOR " REDISTRIBUTED IN ANY MARNER OR FORM

SIX

11

This is AD administrative switch, and as far as you are affected,

Anyone interested should communicate in writing with Chief, General

his present post in charge of Treasury's Procurement Division.
Copyright 1945 Vincent , Caliches and A.M. California Washington D c

to

TRADE MARK

MICROSTATA MICROFILM

However, Peble will not move out of the surplus post immediately.

ROLL

GILLETTE STATES BOARD POLICIES - In the first public statement by a

C

member, policies of the Surplus Property Board were declared this week
by Chairmen Guy M. Gillette
Here are some of the questions about how the Board is operating as

He will remain in command until the transfer to Commerce can be effected,

and the selling staff gets operatin under the new auspices.
It is believed that with the exception of Pehle all key Treasury offs-

cleared up by Gillette in speech (and answers to inquiries) at . meeting

cinle. together with the several thousand other executives and employes
in Washingto and the field, will shift to Commerce. Treasury has a smooth*

Glutting of markets by large quantities of surplus goods and consequent hara to the national economy is *most serious situation facing
this country. but to the questio whether these products can be SHARRAS

running organization which Wallace wants to take over intact. -a

TREASURY MARCH SALES $6,023,573 Treasury's Office of Surplus Prop-

orty last month disposed of goods which cost the U. S. $15,823,093 for
16,023,573. February sales brought in $7,156,372.

Gillette returned a categorical no. *The American people wouldn't permit
it." he said. Problem is how surplus can be channelled out with the most
national benefit and the least threat to legitimate business.
Board is issuing regulations designed to effect an orderly disposal

Treasury handled in March 114 transactions which involved more than
$5. .000 each. and 7,886 transac ions at less than that amount of money.

of the large disposals, read building and farm machinery ande a total
of 31 sales for $294.22 These were small lots of pavers. spreaders,

of current surplus. It has heard and will hear the views of all parts of

the business community: is proceeding as rapidly as possible with an "is-

pumps, compressors. rollers tractors, mixers, plows. scrapers, bulldomers,

mense and anbelievably complex problem.'

etc., running free one item to the biggest lot of 27. Nine lets of tractors

The Surplus Property Board has the power to run this surplus property

show in a coordinated singleminded manner. It does not sell any
property, but supervises the Federal agencies that do sell. Aim is to
bring about clear, uniform and consistent surplus disposal by exercising
as unmistakable overall control. Gillette pointed out the Board had been

ranging from one to seven were sold separately.

Principal Surplus Disposals Record of March Treasury sales over
follows. Purchasers' names will be supplied by NEWSLETTER on request.
Automotive Vehicles (29)
Auto Parts

Helmets, Safety (150,000)

39,250

11,300

Lining, Wool 19,747 yds.)

14,359

Mattresses (8,053)
18,923

Nuts, Elastic Step

6,275
12,634
14,477
5,774
6,159

(42,125 ovt.)
Paper. Waste, Nise.

10,606
7,695
37,867

$18,458

Bags, Burles Sisal
(304,500)

Bedsteads, Bunk, Wood (1,931)

Bits. Rock Drill (154,725)
Blankets, Rubber (6,894)
Belts, Carriage
Boxes, Wooden ARR. (30,798)

Bussers, Electric (22,355)

7,153

Cans (2,969)

8,315

Caps, Nurses (36,044)

Carts, Dish (201)
Carts, Hand (2,594)
Cargo Carriers

Clocks, Wall (1,042)

7,569

7,025
39,260
30,157
12,504

Cloth, Fiberglass
(8.601 yds.)

13,582

Construction Equip. (7 lets) 74,921
Crates, Amaunition

7.000

gal.)

Filters, Felt (11,701 yds.
Frooks, Butcher (2,349)

Gloves, Kid (3,766 pr.
Hammers, Pile (4)

Harness (5 lots. 10,790
Horses Mules (489)

22,645

Pots. Cook. Pass (9,040)

6,625

Road Building Machry.
(31 lots)
Rock Crushers (2)

6,005
190,400
14,250
9,350
99,940
12,286
5,355
5,272
5,050
57,081
30,892

hampered administratively to date by lack of funds.
Experience has not shown that the Surplus Property Act is incapable
of

at this stage with attempts to change the act. Wo aren't going propose
amendments_new. We are impressed with the practical importance of getting

surplus property into hands that need and can use it."

Setting up of single disposal agency is not contemplated. It would

take months. and would be a physical impossibility because of obtaining
the immense personnel required.

294,227
17,854
17,399

Sinks, Service (1,099)

10,286

Stockinette (18,415)

5,524

Stools, Wood (2,190)
Stoppers, Cork (62,200 bags)

6,898

Big Job Still Lies Ahead - *Surplus property disposal is just getting

started," Gillette said, *in amount. in policy and in the Surplus Property
Act's broad purpose to make surpluses a positive aid to strong peacetime
American economy of private enterprise.

He stated that inventories of property which the armed services

5.909

have declared to the Board to be surplus to their needs are rapidly approach-

Tape. Surfacing (604,900
yds.

Targets (71,399)

ing one and one-half billion dollars original cost. This is but a drop

11,023

in the bucket compared to what will be turned over to the Board for disposal

16,819

It is increasingly indicated that victory will bring with it big Jump

5,830

in surplus." The Chairman emphasized that the Board would track down any

Trailers, Dual Wheel Pole
(31)

Tractors (30 in 9 lets)
Trays (1,281)
Trucks, Cargo (21)

Trucks. Dump Stake (8
Trucks, Tractors (15)

Tubs, Foot. Plastic (35,838)
Winches (1,119)
X-Ray Units (18)

being administered. "I believe that it is.*) The Board must establish

foundations with the statute it has. *We_must not diffuse our energies

6,860

Sauce Pans (13,700)

Trailers (11)

Diethyloene, Glyeel (8,805
Dressings (20,700,000)
Dressings (1,500,000)
Dressings (499,532)
Drums, Steel (185,373)

Plates, China (258,526)

Refrigerators, Ice (98)

the Commerce and Industry Association of New York

of

(

PRECISION

allegations of unfair practices. and correct bad methods.

6,200

One urgent problem to which Gillette admitted the Board had not yet
found an answer was that of priorities for veterans under the law. -0*Congress

69.008
7,686
24,438
5,561

has told us to help them, be said, *but didn't tell us how."

19,162
32,254

quired to accompany the regulation has delayed the Surplus Property Board

8,560
6,138
-a-

PRIORITY REGULATION DELAYED - Preparation and printing of the forms re0

in issuing instructions to disposal agencies on priorities for Federal,

State and Local governments. Official publication of this basic regulation is expected in the next few days. -0-

April 18, 1945
POLITICAL DIRECTIVE

TOP SECRET

Treasury proposes Line following:
DIRECTIVE TO OF U.S. FORCES OF OCCUPATION

1. Delete from the last sub-paragraph of paragraph a
the senteice reacing:

"If you believe it cesirable, trup in ostpose the

arrest of those whose canas you as Ve reported.

2. 100 the following new sentence at the of paragraph 0:
'in no event small any differestiction be since
between or special considerail on 00 accorded to
persons arrestec, either as to cassion of arrest
or conditions of detention, 1003 the bunis of

wealth or collitical, ciplantic, insurance, or
other Park or position."

3. .peacury Agreen with the to paragraph 7(a)

3

proposed by Mar Department which reace 52 follows:

"In your zone on will assure tit all
units of the Jersan area forces, including
para-eilitary OF mainstions, are dissolved as
such 4.00 that Lain personnel are prouptly sise
aread this controlled in accordance with policies
and procedures set forth in the Instruction of

unconditional Suppencer OF in other directives
which any DO 185000 to 2011. Prior to their final

disposition outwill arrest and hol all cilltory

personnel who are incitate under the provisions of
repa .

THE MERITARY GOVERNMENT OF DESIGNANT

1. The Purpose and Scope of this Directives
This directive resoinds 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 additionalism of military government in the none or zones assigned to the United States for purposes of

occuration and administration. It outlines the basic policies which will
guide you in those two capacities after the termination of the combined
command of the Supreme Commander, Allied Expeditionary Force. Supplemental

directives will be issued to you by the Joint Chiefa of Staff as may be
required.

AS a member of the Control Council you will urge the adoption by the

other occurying powers of the principles and policies set forth in this
directive and, pending Control Council agreement, you will follow then in

your zone. It in anticipated that substantially similar directives will
be issued to the Commanders in Chief of the U.K.,USSN and French forces
of occupation.
PART I

General and Political

2. The Basis of Military Government

serious

2"

1.

April 18, 1945
TOP SECRET

april 24.im

DIRECTIVE TO OF U.S. FORCES OF OCCUPATION
REGARDING THE MIDEARY GOVERNMENT OF DESCRIBED

POLITICAL DIRECTIVE

1. The curpose and Scope of this Directives

Treasury proposes the following:

1. Delete from the last sub-paragraph of paragraph a

the sentence reacing:

"if you believe it desirable, you - postpose the

Consanding General of the United States forces of occupation in Germany.
As such you will serve as United States member of the Control Council

appeal of those whose cases you have reporter.

and will also be responsible for the administration of military govern=

2. 400 the following new sentence at the one of paragraph o:

ment in the some or zones assigned to the United States for purposes of

"In no event shall any differentiation be HACE

occuration and administration. It outlines the basic policies which will

between or special considerallow be LOGOP dell to

persons appeated, either as to samer of arreat
or conditions of detention, timen the banis of

guide you in those two ospacities after the termination of the combined

other pack or position."

directives will be issued to you by the Joint Chiefs of Staff as may be

health or political, biglomatic, industrial, or

:

This directive resoinds JCS 1067 and is issued to you as

3. Treacury Agrees with the maintment to caragraph 7(a)
proposed by Department which peace 51 follows:

In your sone you will assure that all
units of the Les an areas forces, including
a-military or animations, are dissolved 52
such - that their erson.co are promptly dis-

comind of the Suprene Commander, Allied Expeditionary Force. Supplemental

required.

AS a member of the Control Council you will urge the adoption by the

other occurrying powers of the principles and policies set forth in this
directive and, pending Control Council agreement, you will follow then in

or 16G are controlled in accordance with solicies

your sone. It is anticipated that substantially similar directives will

Unconditional Suprencer or in other directives

be issued to the Commanders in Chief of the U.K.,USSR and French forces

and net forth in Lie Instructed of

which may DO issued you. Prior to tair fical
disposition you will arrest and hol all Military
to

personnel who are included under the provisions of

of occuration.
PART

General and Political
2. The Basis of Military Government

a. The rights, power and status of the military government in
Germany are based upon the unconditional surrender or total defeat of
Germany. the Text of the Instrument of Unconditional Surrender is at

Appendix "As" You will assure that the policiesmit forth in that
Instrument are carried out in your sone of occupation even though the
defeat of Germany is not followed by a formal signing of the Instrument.

b. Subject

PRECISION

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320
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b. Subject to the provisions of paragraph 3 below, you are, by

the German economic structure shall also be decentralized. The Control

judicial authority in the areas occupied by forces under your command.

Council say, however, to the minimum extent required for the fulfillment

This authority will be broadly construed and includes authority to take

of purposes set forth herein, permit centralized administration or estab-

all measurea deemed by you necessary, appropriate or desirable in relation

lish central control of (a) essential national public services such as

to military exinencies and the objectives of a firm military government.

railroads, communications and power, (b) finance and foreign affairs, and

C. You will issue a proclamition continuing in force such
proclamations, orders and instructions as may have heretofore been issued

(e) production and distribution of essential commodities.
d. The Control Council should adopt procedures to effectuate,

by Allied Commanders in your zone, subject to such changes as you may

and you will facilitate in your none, the equitable distribution of essen-

determine. Authorisations of action by the Suprese Coxminder, Allied

usa comodities between the zones. In the absence of a conflicting

Expeditionary Force, may be considered as applicable to you unless

policy of the Control Council, you may deal directly with one or more

inconsistent with this or later directives.

zone Commanders on matters of special concern to such nones.

(

3. The Control Council and Lones of Occupation:

a. The four acting jointly, will constitute

e. Fending the formulation in the Control Council of uniform
policies and procedures with respect to inter-sonal travel and movement

the Control Council in Germany which will be the supreme organ of control

at civilians, no civilians shall be permitted to leave or enter your sone

over Germany in accordance with the agreement on Control Machinery in

without your authority, and no Germans within your some shall be permitted

Germany at Appendix "B." For purposes of administration of military
government, Germany has been divided into four zones of occuration. The
agreed protocols on zones are at Appendix "C."

to leave Cermany except for specific purposes approved by you.

f. The =ilitary government personnel in each sone, including
those doaling with regional and local branches of the departments of any

b. The authority of the Control Council to formalate policy
and procedures and administrative relationships with respect to matters
affecting Germany as D whole will be paramount throughout Germany. You

s

autonoug in regional, local and municipal agencies of German administration.

virtue of your position, clothed with suprene legialative, executive, and

central German administrative machinery, shall be selected by authority
of the Commander of that zone except that limison officers say be furnished
by the Communiers of the other three nones. The respective Commanders-in-

will carry out and support in your the policies Agreed upon in the

Chief shall have exclusive jurisdiction throughout the whole of Germany

Control Corneil. In the absence of each agreed policion you will act in

over the members of the arved forces under their command and over the

accordance with this and other directives of the Joint Chiefa of staff.
C. The administration of affairs in Gerwang shall be directed
towards the decentralisation of the political and administrative structure
and the development of local responsibility. To this and you will encourage
autonosy

civilians who accompany them.

it The Control Council should be responsible for facilitating
the severance of all governmental and administrative connections between
Austria and Germany and the elimination of German economic influences in

Austria. Every assistance should be given to the Allied Administration in
Austria in its efforts to effectuate these purposes.

-2-

4.

MICROFILM

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322
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321
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:

and assure the production and mistenance of goods and services required
to prevent starvation or such disease and unrest as would endanger those

4. Basic Objectives of Military Government in Gerwany

forces. No notion will be taken in execution of the reparations program

2. It should be brought home to the Gervans that Germany's

or otherwise which would tend to support basic living conditions in Germany

ruthless varfare and the fanatical Nasi resistance have destroyed the

or in year 4000 on K higher level than that existing is any one of the

German economy and made chaos and suffering inevitable and that the

neighboring United Nations.

Germans cannot escape responsibility for what they have brought upon

to In the inposition and maintanance of such controls as may

themselves.

be prescribed by you or the Control Council, Gerran authorities will to
b. Demony will nos be occupied for the purpose of liberation

but as a defeated enercy nation. Your aim is not oppression but to occupy

the follost extent practicable be ordered to proclaim and addition
tration of each controls. Thus it should by brought home to the German people

Gersang for the parpose of realising certain important Allied objectives.

that the responsibility for the Admistration of such controls

In the conduct of your occupation and administration you should be just

and for any breakdowns in those controls will rest with themselves and

but fim and aloof. You will strongly discourage fraternisation with
the German officials and population.

German authorition.

5. Denast fications

(

C. The principal Allied objective is to prevent Gerany from
ever again becoming a threat to the peace of the world. issential steps
in the accomplishment of this objective are the elimination of Jazian
and militarism in all their forms, the immediate apprehension of war

criminals for punishment, the industrial disarmiment and desilitarization
of Germany, with continuing control over Germany's capaci Ly to moice war,

and the preparation for an eventual reconstruction of German political

a. A Preclamation distolining the Mast Party, its formations,
affiliated associations and supervised organizations, and all Mast public
!nutifutions with very set up as instruments of Party domination, not
Irohibiting their revival in any form, should be promilated by the
Control Council. You will assure the prompt effectuation of that policy
in your 2020 and will lake every effort Lo prevent the reconstic sold as of
any such organization in underground diaguised or socret form. Desponsi=

life on a desocratic basis.

bility for continuing desirable non-political social services of diseoved

d. Other Allied objectives are to enforce the programs or repara-

tions and restitution, to provide relief for the benefit of countries

Party organizations my be transferred by this Control Counteil to appropriate
central againies and by you to appropriate local agencies.

devastated by Hazi aggression, and to ensure that princiers of var and

D. The laws purporting to establish the political structure of

displaced persons of the United Nations are cared for and repatriated.

National Scefalium and the tests of the Miller recime and all laws, deeroom

5. Economic Controls:

a. As a member of the Control Council and as sone consander, you
will be guided by the principle that controls upon Use Gersan economy may
be imposed to the extent that $000 controls may be necessary to sonieve
the objectives enumerated in paragraph is above and also as they may be

and regulations which establish discriminations - grounds of race,
nationality, oreel or political opinions should by abragated by the Control
Council. You will reader them imoperative in your some.
C. All members of the Hazi party who have been more than normal

participants in its activities, all active supporters of Mazion or militarian

essential to protect the safety and meet the needs of the occupying forces

and all other persons hostils to Allied purposes will be removed and acce

and

eluded free public office and from positions of importance in quani=public

(

324
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TOP SECRET

and private enterprises such as (1) civic, georgia and labor organiza=

(1) The Central German Government and its subdivisions,

tions, (2) corporations and other organizations in which the German

German diltary organizations, organizations engaged in military

government or subdivisions have . rejor (financial interest, (s) industry.

research, and such other governmental againist as may be deemed

contence, agriculture, and finance, (4) education, and (0) the press,

advisables

(2) The Nasi Party, its formations, affiliated associations

publishing hances and other Agencies dissociating LIVE and propaganda.

Persons are to be treated as more than normal parisolpanta in Party

and supervised organizational

activities and LL active supporters of Sasian or when they

(3) All police organizations, including security and
political polices

have (1) held office or otherwise been active at any level from loon1

(0) Import economic organizations and industrial establish=

to national in the Party and its autordinate organizations, K in organisa=

times which further alliteristic doctrines, (2) authorised or participated

sents including those controlled by the Mazi harty or its

affiratively 12 any Hagi crimes, racial permecutions or discriminations,

personnels

(1) Institutes and special turesus devoting thomselves to

(3) been avoired believers is Terian or racial and militaristic creeds,
)

I

or (4) voluntarily given substantial word) or material support or political

recial, political, militaristic or similar research or propaganda.

resistance of - land to the Taxi Party or Test officials and londors.

7. Demilitarization

No such personal shall be retained in any of the entegories ac employment

as In your some you will state that the Certain arned forces,

listed above because of additionative necessity, convenience or expeditory.
C. Property, real and personal, owned or controlled by the

Including para-cilitary organizations are promptly demobilized and disbanded
in accordance with policies and procedures set forth in the Instrument of

Fast party, its formations, effilisted ecanciations and expervised

Unconsitional Surrender or in other directives which may he issued to you.

organizations, and by all person subject to arrest under the pervisions

Prior to dishandment you will arrest and hold all military personnel who

of poragraph 0. and form within your 2000, will So taken under your

KPR included under the provisions of paragraph 3.

control pending . decision by the Control Council or Mghar mithority as

to The Control Council should proclaim and in your zone you

will effectuate, the total dissolution of all military and paramilitary

to its eventual disposition.

6. All archives, monuments and - of Fast inception, or

organizations, including the General Staff, the German officers Corps,

which are devoted to the porpotation of Defined adlitarian, will to taken

the Resurve Corps and uditary academies, together with all associations

under your control and their propertion hold pending decision as to their

dieb right serve to keep alive the military tradition in Germany.

(

0. You will seizo or destroy all arms, ammunition and implements

disposition by the Control Council.

f. Yes will take speciAl efforts to preserve from destruction
and take under your control records, plans, books, documents, papers,

files, and scientific, industrial and other information and data belonging

of WILL and stop the production thereof.

1. Yes will take proper staps to destroy the Derman war potential,
an set forth elsemhore in this directive.
5.

to or controlled to the followings
(1)

7-

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326
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government has a major financial interest; (e) industry,

B. Suspected The Criminals and Security Arrester

commerce, agriculture, and finance; (d) educations (e) the

to You will search out, arrest, and held, pending receipt by

judiciary; and (r) the press,publishing houses and other

you of further instructions as to their disposition, Adolf Mitler, his

agencies disseminating news and propaganda. It my generally

chief Hazi associates, other was criminals and all persons who have

be assumed in the absence of evidence to the contrary that

participated in planning or carrying out Sazi enterprises involving or

any persons holding such positions are Maais or Nasi ayapa-

resulting in streetties or orines.

thisers;

b. All persons who, 10 permitted to remin at large would

(9) All judges, prosecutors and officials of the People's

endanger the accomplishment of your objectives will also be arrested and

Court (Volk@gerichtshof), Special Courts (Sondergerichte) and

held in custody. The following is . pertial list of the categories of

other extreordinary courts crestal by the Nuzi regine;

persons to be urrested in order to carry out this policys

(10) Any national of any of the United Nations or

(1) officials of the The Party and its formations,

associated states who is believed to have committed offenses

affiliated associations, and supervised organizations, dum
)

3

to and including Local Group Leaders (Ortegruppenleiter)

(11) Any other person whose name or designation appears

and officials of equivalent rasia

on lists to be submitted to you or whose name my be notified

(2) All members of the political police, including the
Gestapo AND Sionerheit@dienet der S.S.

to you separately.

If in the light of conditions which you encounter in Germany you believe

(5) The officers and non-connisationed officers of the
Waffee S.S. and all numbers of the other branches of the 0.8.1

(4) All General staff Corps officers
(6) Officials of the police holding . rank, or equivalent
positions of authority, above that of Lieutenents

that certain persons within these categories should not be subjected
Involintely to this treatment, you should report your reasons and recoa-

consistions to the Joint Chiefs of Staff. If you door it decirable, you may
postpone the arrest of those whose cases you have reported

9. Politions Activities:

(c) officers of the 34 holding consissioned Panks

a. No political activities of any kind shall be countenanced

(7) The leading officials of all ministries and other
high political official down to and including urban and rural
buergenneister and officials of equivalent reck, us those
$

against his national law in support of the German WAT effort;

persons who have hold similar positions, either civil or

unless authorized by you. You will ensure that your military government
does not because committed to any political group.

b. You will prohibit the propagation in any form of Nasi,
militaristic or pen-German doctrines.

silitary, in the administration of countries oneupied by Germanya
(a) Namia and Times sympsthizers holding important and They

c. No German parades, military or political, civilian or sports,
shall be permitted by you.

positions in (a) National and Cau civic and economic organismtions: (b) corporations and other around sations is which the
government

d.

-9-

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ROLL NO.

328

EX
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TOP SECKET

12. Police:

1

d. To the extent that military interests are not prejudiced and

with the exception of the Belchakriminalpolisei (oriminal Police)

subject to the provisions of the three preceding subporagraphs and of

all elements of the Sicherheitspolisei (Security Police), e.g.,

paragraph 10, freedom of speech, press and religious worship will be per-

Geheimeataatapolizei (Geotapo), and the Sicherheitadienat der S.S.

mitted. Consistent with military necessity, all religious institutiona

will be abolished. Criminal and ordinary police will be purged of Masi

will be respected.

personnel and utilized under the control and supervision of the military

10. Public Relations and Control of Public Information:

government.

As a member of the Control Council, you will endesvor to obtain

13. Political Primoners

agreement for uniform or coorlisted policies with respect to (a) control

Subject to military security and the interests of the individuals

of public information - media is Germany, (b) accrediting of foreign

concerned, you will release all persons found within your some who have

correspondents, (c) press censorship, and (c) Issuance of official DORE

been detained or placed in custody on grounds of race, nationality,

comuniques dealing with Control Council matters. U. 5. policies in

areas or political opinions and treat thes as displaced persons. You

these matters will be sent to you separately and you will be guided by

:

these in your negotiations on the Control Council.

(

offenses about which there may be substantial suspicion of racial, religious

11. Geraun Courte:

or political persecution, and in which sentences of imprisonment have not

a. All extinordinary courts, including the

been fully served by persons imprisoned within your zone.

(People's Court) and the Sandorgarights (Special Courts), and all courts

14. Educations

and tribunals of the Masi Party and of its funations, affiliated as-

a. All educational institutions within your zone except those

pociations and supervised organization will be abolished immediately.

previously re-established by Allied authority will be closed. The closure

b. All ordinary criminal, civil and administrative courts,

of Mast educational institutions such as Adolf Hitler Schulen, Napolee

except thope previously re-established by order of the military government,

and Ordensburgen, and of Mazi organizations within other educational

will be closes. After the elimination of all Nazi features and personnel

institutiona will be permanent.

you will permit those which are to exercise jurindiction within the

b. A coordinated system of control OTHER German education and an

boundaries of your sone to resume operations under such regulations,

effirmative program of reorientation will be established designed

supervision and control as you my consider appropriate. Courte which

completely to eliminate Saal and militariatic doctrines and to encourage

are to exarcise jurisdiction over territory extending beyond the

(

(

should make provision for the review of convictions of alleged criminal

boundaries of your cons will be reopened only with the express authori-

the development of democratic ideas.

c. You will permit the reopening of elementary (Volkanshulan),

sation of the Control Council and under its regulation, supervision and

middle (Mittelschulan) and vocational (Derufanchulen) schools at the

control. The power to review and yet/ decisions of German courts shall

earliest possible date after Mast personnel has been eliminated and text-

be included within the power of supervision and control.
12.

books and curricula have been provided which are free of Nami and militariatic
doctrine. The Control Council should devise program looking toward
the

11 10

TOP SECRET

A

TREASURY DEPARTMENT

the reopening of secondary schools, universities and other institutions

INTER OFFICE COMMUNICATION

of higher learning. After Nami features and personnel have been eliminated

DATE

and pending the formulation of much program by the Control Council, you

April 24, 1945

my formulate and put into effect an interim program within your zone and
TO

is any case my permit the reopening of such institutions and departments
FROM

which offer training which you consider immediately essential or useful

Secretary Morgenthau

is DaBois

in the administration of military government and the purposes of the

It is clear to no, as 1 believe It is to you, that

the real notive of post of Chose THE opposio a weak Germany

occupation.

is not any setual Hisagreement on the question of whether

= strong is essential to e strong Europe or

d. It is not intended that the military government will

whether 30 Hillon Germano will starve If Germany is

meak. As told 112 in Losion, and ns T understand
Bruch told yes, the forees In ritain which argue for

intervene in questions concerning demoninational control of Cermus

schools, or in religious instruction is German schools, except innofar
I

a atreas Germany are againsted by the idea that strong
Germany is nonestart an n billwark again st Russin. This

as my be necessary to insure that religious instruction and adminis-

ative is the Analianting thought in the sinds of
those forces In this Government whi are desirous of
building in Germany Even persons within the State

tration of such schools conform to such Allied regulations as are or my

Desertment such as Despress and Inthringan confirm this

be established pertaining to purging of personnel and curricula.

fact.

)

15. Arta and Archivogy

The fact that the Messigns must know that there are

poserful orces within Great and this country who
220 again desirous of using Germany signinat Hummin is
reconsible, in - opiation, or need of the difficulties

Subject to the provisions of peragraph 6 above, you will make

all reasonable efforts to preserve historical archives, massums, libraries

which to EPG excountering with Pussis today. 4 careful
reading of Stalin's #1000 on the Polich resty (attached)

nd works of art.

is call liberty on this point.

This in not c question of one's attitude towards
Immin In sent. as Despres of State out 10. If we
really unnt . Jossion ioninated Europe the best course
of setton to follow world be that which is beire followed
by there who, in their stupidity think that they can

main la Generaly off against I think It can
life shown that the only result of policy will be
that will 000 to I that e not only doulnates,
10.00 than the otherwise would, the eastern
countri but also, before the gets through. Germany
herself and possibly most of the western European
country 18. If in =ant to play at this Time, Pussia
cinnot help but sis. It's not Spousia I's sorried about -

0

12

It' of five-year old boy.

321
-

There is only one WAY in IV opinion, for which
one can donl with an insure such U.S this and that is to

bring it out In the open and lay it on the table. In
doing so, one does not have to present It in such B. way
that one is regarded as being "Red". In fact, quite to
the contrary I bell ITC I could write an article in

which I could mather comineIngly show that Succia will
have more Influence in Europe IS TO try to follow these
tacties than she would have If we tried to play the
card fair.
Quite spart from the question as to whether or not

you wish to Assuss this Lesio publicly, I sould like to
su gost, for your consideration, presenting =
dealing with the subject to President If can for his
reaction.

PRECISION

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Stalin's Speech on the Polish Treaty

333
April 24, 1945
Conversation with McCloy

Accloy said as spent three evenings with kisenhower
and as was then reparing then for the coming of General Clay.
After all, ne sale, conquerors had eaten red meat and they
are not too easy to deal with - they don't want to go back
and be . colonel somewhere in a wooden barracks in America If
they can live in a castle or the anine and keep thelr present
Park. Newloy seema to feel the loss of resident Roosevelt
very keenly and sincerely. as says the cities in Germany
remind aim of so many decajed teeth. ae said that the
destruction is uncellevable the said twore were no more targets
left for Jimmy Doolittle, # C the suggested we carry back some
of the slave labor of France and Beigium to their homes with
high fighting pianes. me anya 48 thinks we will have to
apologize someon for breaden's combing, that we did sone
unnecessary bombing there - some indiscriminate bombing he
called it.

RECISION

TRADE

MARK

MICROSTAT

REG. U.S.PAT. OFF.

MICROFILM

ROLL NO

Rome, April 24, 1945.
Personal

My dear Mr. Secretary,

I was very glad to receive the letter which

Dr. Tasce brought me and need not assure you that
he bes already proved all the qualities which you
accredited to him. You know that my emphasis has
always been on Finance and Economy und as I myself

as 80 disnelly ignorant on both subjects, it is
more than anliation to be able to rely on experts,
especially cooperative ones.
I know how deeply you must feel the death of
the President. The world is much poorer through
his loss to us and . great force has left the world.
If only we can meet the responsibility which he has
charged us with.

with cordial regards, believe no,

Yours faithfully,

a Kich
The Honorable

Henry Morgenthau, Jr.,

Secretary of the Treasury,
Washington.

TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE

April 24, 1945
TO

FROM

Secretary Morgenthan
Mr. Luxford
For Action

Ben DuBois, Secretary of Independent Bankers

Association, wired 130 that E. 6. Placek would like
an appointment to see you about May 1. Placek is
President of a bank in Wahoo, Nebraska and is President
of the Country Bank Division of the Independent Bankers
Association. 1 told JuBois 1 would raise it with you
when you returned from Florida.

,

I have no doubt but what he will want to discuss
with you the competition Production Credit Association,
etc., are giving the country banker. You will recall
he wrote
metoabout
and at your suggestion I turned the
matter
over
D. W.it Bell.

Placek a strong supporter of ours on Bretton

Woods
and
he would really appreciate it if you
could see
himI know
a few minutes.

Cc: Mr. D. W. Bell

N

MICROFILM

MICROSTATI

TRADE MARK

BOLL

337

Bennett remorked that the Foreign office is

320

RELEASED April 26, 1946

)

PARAPERASE CF RECEIVED

becoming sore and more concerned over the probless of inflation in
China and he stated that 11 bac been ep roached by T. V. Boong. at

(

FROM:

ARSHIGAN DEBASSY, LONDON

TO:

Secretary of State, Washington

DATED:

April 24, 1945

NUMBER:

4179

the name time as Boong approached the Government of US, for

oid in furnishing consider goods to China, in an effort to stea
inflation there. In an: very that it can the Foreign office
is anxious to help and it has lately instructed the British supply

SECRET

people in Nashington to consult with their American opposite
numbers to 600 what can be done alorgthis line. They are

This morning we had an opportunity to give Sterndale
Fernett informally comments on the denuciation of the Nuseo-

not optimistic according to Sterndale Bennett. Scantity of

Japanese Neutrality Pact and on the Japanese Cabinet change.
Bennett conourred that the new Japanese Cabinet

consumer goods needed and recurated by Soong is so great that with

could not be regarded as a *peece embinet' but he did not

at least a year to get the goods to China and this would be too late

altogether conour with the reasons given by the Department of State.
It is felt by him that the people of Japan have not yet experienced
enough of the var to put that in the frame of mind where they would

the current eapely and transportation conditions it would take

I

0 date. But Bennett etated that he hopes nothing will be done
to discourage soon end the American and British technicians work
out some form of temporary relief at least.

be willing to accept = husilitting pecon; not even the better informed

C

VINANT.

Japanese people. Bennets suggest that any possible peace feelers

will be in the nature of 1 "try-on" to discover 17 there is any
possibility 01 a comproning pence. lie feels that the var must be
brought much closer and that there must be core surfained and
intensified air attacks before unconditional surrender will be
adoppted by even the intelligent Japaneec people.
No information of any sort is had by the Foreign
office concerning Koreans being treined and equipped by the For
Eastern Red Army nor coes 11 have any data with regard to possible

Soviet proparations for establishing in Korea a government under
Keseian influence.

(

Bennett remarked

DC/L:MLG

4-27-45

RADE MARK

MICROFILM

MICROSTAT

BOLL NO.

328
)

CARLA TO AMERICAN LEGATION, STOCKHOLD YO MINISTRY JOHNSON AND OLDEN
FOR DEPARTMENT AND ZA REFUNDS BOARD

PLEASE invoice SUBDISH novizion SUT THAT or THE DISAPPEARANCE OF

PAOUL and IS HELI IN HIGH HAGARD HERVA FOR HTS COURAGEOUS

AND WR IN NUMBER WAS received HY THIS GOVERNMENT WITH
SPIRAT CONCIRES AND SOKE DISTRESS HIS MISSION HAS OF SPECIAL INTREST
TO THIS AND DESCRIPTION ARXINTY IS FSLT HERE FOR HOS SAFETT
AND MASSY MOSCOW HAS REQUESTED TO LEND FULLEST SIPPORT to SMEDISH
LEGATION 88 KIND ABSTSTANCE OR SOUINT GOTERNIGHT IN ASCEPTATION HIS
on DATE WE TILL GREATLY APPRECIATIO RICT INT EXPT INFORMED

OF ANY 147 180% THE CONCERNING HIM.

THIS 15 2814 CARLE O. 362

5.00 D.M.

April 24, 1945
(

PRECISION

PRECISION

MICROSTATMU.O

TRADE MARK

MICROFILM

ROLL NO

JI-797

PLAIN

PLAIN

WS-391

trussels

Puris

Dated April 24, 1945

Dated April 24, 1945

liec'd 2,21 p.m.

Rec'd 7:02 p.m.
Secretary of State,

Secretary of State,

Washington.

Washington.

55%, Twenty-fourth
2070, Twenty-fourth
Reference Department's 221, March 26.

FOR WAR REPUBLIC BOARD FOR MOSES LEAVITY AMERICAN
JOINT DISTRIBUTION COMMITTEE PRO JOSEPH SCHNANTE.

Please deliver following message from World Jewish

*Please resit immediately to committee Brussels

Congress russels to Arich Tartakower World Jewish Congress

$602.000 representing unpaid balance appropriation first
four souths plus fourmillion Belgian france representing

New York,

for May. Have just spoken Bargolis

tids is sinimm required

in order assure
her
onthatthis
basis to
time prior your approval.

has returned
from visit
Jews in

who have appropriation make three advises months and proceed continuation monthly Laura for for program May next but

administrative $12,000

committees and one time

Laura Holland liberated. authorised no Margolis commitments and reports just 7,000 beyond Territory three budget days' already for

up of at least one
to synagogues and schools

"Information regarding Jewish deportees from Salonika

not confirmed, Representative board constituted association
with Congress has bean voted. April budget abort. Are

awaiting letter froe Dr. and funds in order
to carry on."

essential relief to set up and necessary repairs setting She recommends children's grant $70,000. Hearthile, home,

will advise soonest regarding transmission.

SANTA

suggest you apply license".
100

CAFFEET

RB

PRECISION

TRADE

MARK MICROSTAT MICROFILM ROLL NO.

342
JUIC

341
I

PLAIN

SS-665
Rose

ALIM-680

This telegram must be
paraphrased before being
communicated to anyone

other than a Government

Rone

Dated April 24, 1945

Dated April 24, 1945

Rec'd 8:35 a.m.

Rec'd 7:43 a.m.

Agency. (RESTRICTED)

Secretary of State,
Secretary of State

teshin ton

Washington

1036, April 24, 10 a.m.
1037, April 24, 10 a.m.
TO MOSES LEAVITY FROM RECIBEN RESNIK 27.
TO MOSES LEAVITT JDC FROM NUMBER RESNIK 28.

Pursuant to discussions with Schmarts an requesting
Beanik entered Sologna today Monday, April 23

only two days after literated. JDC first voluntary

permission for Rice to proceed Rose and for Trobe who

now in Intanbul to proceed Rone. Latter will be reas-

agency to enter. Emergency relief being granted.
signed after necessary arrangements made to Tugorlavia

Further details follow.

for temporary period. Brooks permission is previously
KIRK

informed already granted. Jacobson leaving for Athens
JUB

April 23 will be poined later by Any Zahl member of our
Form office.
KIRK

HR

PRECISION

TRADE MARK

MICROSTATA MICROFILM

ROLL NO.

343
PLAIN

Paris

Dated April 24, 1948

Rec'd 8:20 a.s., 25th
Secretary of State,
Washington.

2069. Twenty-fourth
FOR WAR REQUIRE BOARD

FOR MOSES LEAVITY AMERICAN JOINT DISTRIBUTION
COMMITTEN FROM JOSEPH SCHVANTZ

Apprepristion $100,000 for lean fund Greece totally
inadequate meet essential requirements of pregram. We

have been advised that for time being British Government
not permitting transfer funds free England to Greene
therefore/suggest you underwrite full amount $200,000

leaving 11 te se to negatiate for participation British
Jewish Agencies".
CAFFERT

WFS

ISION

TRADE

SECRET
NOT TO BE LE TRANSLITTED

OPTEL No 131

Information received in London up to 10 A.L. 24th April
1. NAVAL

East Indies During recent patrol a British Subparine
destroyed seven landing craft and thirteen
small craft in STRAIT OF LALACCA.

Anti-Submarine Operations: 22nd U-Boat reported sunk by

Russian destroyer NORTH KOLA INLET.

Enemy Attacks on Shipping: 22nd: Norwogian Lorchant ship
torpedood by U-Boat N.M. KOLA INLET but reached port in tow.

23rd. A Lerchant Ship in convoy torpedoed or mined off North

CORMALL while a Normogian merchant Ship in Most Bound convoy
nined or torpedood off RALSGATE.
2. LILITARY

Westorn Front

Southern Sector: Troops of First French
Army captured NURELBERG on LHI E, north BASL

while further to N.E. also exploited along nathern shore LAKE
CONSTANCE and still further north thrust to reach SAULAU (30 siles
S.E. ULL). Third U.S. Army swinging south captured ALBERG and red:

a further advance which nor throatons while to north

WEIDLN confirmed taken and DESSAU reported cleared.

Northern Sector: Fourth Canadian Armoured Division repulsed

C

heavy counter attack against their gridgehcad over KUSYEN CANAL,
S. OLDENBURG.

Eastern Front Central Sectors To N.E. BERLIN advance made
to CRENIENBING which takon, while on northern
castorn and southern flanks BERLIN suburbs captured while to south

PAIRPURT reported taken. Soutr of this COTTEUS and LUCKEN ALDE

token and thrust from south entering outskirts BERLIN while further

progress also tade N.E. DRESDEN and advance to ELBE made N.W. this
town.

Southern Sector: TROPPAU (20 siles S.W. RATIOOR) captured
while on front south of BRNO and north of VIENNA further progress
reported.

Italy Eighth Arry Sector: On right heavy fighting continued

with choc) still retaining FERRARA but British AFEOUP
his by-passed town tc rest and reached liver PO while further west
nock of salient between Eifht and Fifth arep closed with only isclated
ennants oneny remaining in pockets.
Fifth Artiy Sector: on right U.S. troops covered eighteen
1108 to reach rivor PO which reported already crossed by two repison
while further vest U.S. Armour which yesterday reported area LODENA

and seized town and prossed on to Livor PO sono 25 niles to N.W. on NO
MOST coast. U.S. troops also pado further progress againstlight
esistance.

Burna Central Sector: YENANGYAUNG (the IRRA ADDY oil port)

captured and the Japancs garrison withdrawing to vest
bank of rivor but abandoning such compont while further vest TOUNOCO

captured

on 1ANDALAY-EANGOON hailway taken and PYIN.ANA cleared of onery pook

which last reported resisting souther part of town.

3. 415 OPERATIONS

Western Front

23rd. Weather restricted operations. SHAEF (A1:
medium bomber 108. Gropped 40 tons on ZEVEN

NE of BREMEN) and 148 tons on strongpoints in townarca, while fighter:
and fighter bombers 1521 (12 missing) operated all sectors destroying

350 1.f. and inflicting enemy air casualtics 7:1:2 in coubat and
58:0:37 on ground. Transport aircraft 923 carried 2192 tons supplies
to continont and evacuated over 9,000 ex-prisoners of var. Coastal

Consand Halifaxos and Boufighters attacked shipping off Norway when

hits obtaired on 3,000 ton ship which loft on fire and listing and als.

on 2,000 ton ship. 23rd. (Night) Bombor despatched aircraft
208, (without loss):- 60 KIEL, 38 RENDSBUNG(west KIEL), 32 TRAVEMLUND

(SE KIEL) and 78 Bomber support and other targets.
Meditorrancan 22nd Bad weather rostrictodoperations but fight

attacked cogninications pontoon LAKE DARL
PADUA area while other aircraft 23,sissing)
attacked

bridges FEXRAHA area and enemy troops Potaring across River PO, when
souc 700 SEAC L.T. 21st. and Liberators 300 horse drawn 39 dropped vehicles. 101 destroyed tons on dumps TONNOOO.

s