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PRECISION MICROFILM TRADE MARK May 1, 1945 TOP SECRET TOP SECRET A May 1, 1945 84 o b. The Plan should aid in strengthening 1. It WES agreed at the Yelts Conference that Germany must pay and developing on a sound basis the industries and trade in kind for the losses caused by her to the Allied Nations in the course of the war. The primary purpose of the Reparation of the devestated non-enemy countries of Europe and of Commission should be the formulation of a general program other United Nations, and in raising the living standards of these countries. for the exection of substantial reparation and the establishimplemented. 2. The reparation burden should be distributed ineofer AB practicable 60 as to impose equality of saori- 2. It 16 and has been fundamental United States policy that fice upon, and result in an equal general standard of Germany's war potential be destroyed, and its resurgence as living for the German populations of each of the zones under the control of the respective occupying actions. ment of the policies under which this program 18 to be for as possible be prevented, by removal or destruction of S. This Government opposes any reperations plan German plants, equipment and other property. based upon the assumption that the United States or any While cooperating with the other powers in implementing o other country will finance any reconstruction in Germany the basic purposes of the Talta Agreement, the U. 5. representative will bear in mind that whatever plan is formulated by or reperation by Germany. e. The Reperation Plan should not maintain or foster the Reparation Commission (hereinafter referred to as the Reparation Plan) should be in conformity with the economic and dependence of other countries upon the German economy. security objectives of this country with respect to Germany. & The Reperations Plan should not be of such a nature as to promote or require the building up of The position of the United States on the verious issued involved in this respect 10 summerized in the following paragraphs. German economic capacity. 3. In determining the size and character of reperation and E. To the maximum extent possible, reparations should be taken from the national wealth of Germany existing at the allocation thereof among the various claimant nations the following principles are advocated by this Government: A. The Reparations Plan should assist in the elimination of industrial capacity in Germany considered to be dangerous to the security of the United Nations. the time of collapse, with primary emphasis upon the renoval of industrial machinery, equipment and plants, particularly the shipbuilding, metallurgical, machine tool producing 0 TOP SECRET TOP SECRET May 1, 1945 TOP SECRET May 1, 1945 TOP SECRET 85 86 O o (2) Primarily in the form of raw materials and natural resources, and to the smallest extent possible in the form of producing, electrical machinery, and chemical industries (including all industries producing oil and oil products, synthetic nitrogen and synthetic rubber),exchange shipe, rolling assets foreign stock, patents, copyrights, and German investments abroad. including manufactured products. A 1. (Insert peragraph on Labor Services) Capacity for the production of component parts that enter into the production of the industries noted above should 1. The removal of plants and equipment shall take also be eligible for removal. (This Government favors the inclusion of Gernan ocean-going merchant tonnage in place regardless of the fact that they are owned in whole or in part, directly or indirectly, by United Nations the shipping pool until the end of the ver against Japah, nationals. Where plants or equipment which are owned in and negotiations with other governments are in progress whole or in part by a United Nation national are to be so on this subject.) 8 removed arrangements shall be made, if practicable and b. To the extent that for political reasons it may 0 desired by the government of such national, for the owner become necessary in the negotiations to agree that reparetions be collected in the form of deliveries of goods from to retain his interest in such plant and equipment after removal. If not practicable or 80 desired, Germany shall furnish to the government of such national adequate reparetion to cover the interest of such national. current production over a period of years, such goods should be of such a nature and in such amounts as not to require the maintenance of the German var potential or the continued dependence of other countries on Gerasny after k. It will be inevitable that the German standard of living will be adversely affected by the carrying out of reparations censo. Accordingly, recurring reparations, the Reparations Plan. However, the reperation exections should be held within such limits as to leave the German over a period of years, should be: (1) As small as possible in relation to the people with sufficient means to provide a minimum subsis- reparations to be paid in the for of tence standard of living without sustained outside relief; but under no condition should this limitation operate industrial plants and equipment; and (2) Primarily to 0 TOP SECRET TOP SECRET SECRET May 1, 1945 TOP SECRET 87 88 to require the retention in Germany of means to support ceek agreement with other countries in which German assets basic living standards on a higher level than that existing in any one of the neighboring United National are located designed to eliminate continued Gersan control 1. The Reperations Plan should not put the United States in a position where it will have to assume respon- 8. The United States will expect to assert a claim for repara- sibility for sustained relief to the German people. 4. To the extent necessary to pay for such minimum German imports principles of the Yelta Protocol in order to preserve its rights to its proper share of payment for losses caused to it as may be determined to be essential, recipient countries should by Germany in the course of the war. Pending the furnishing be required to pay so for AC practicable for German exports, of a more exact claim at a later date the United States representative shall reserve the right to claim delivery of reparetions in a total amount of billions of dollars. The of such assets and prevent their eventual return to Germane. tions before the Reparation Commission in accordance with the except renovals of existing plant and equipment. Importe for which payment will be sought shall include supplies imported by $ May 1, 1945 0 United States will desire to receive as much 08 feasible of the occupying forces for displaced persons and Gornan civilians. 5. Without the approval of an appropriate Allied body there its share of reparations in the form of German, investmentsanstracting abroad. shall be no re-export to third countries of goods received on 6. In order to prevent the treatment as war booty or as rein- 9. As an interis progrem pending the formulation of more definitive arrangements, this Government would favor form- bursement for occupation costs of exports from Germany which lation of an immediate program by the Reparations Commission should properly be considered as reparations deliveries, agree- along the following lines: reparation account. A. During the initial period following the ool- ment should be sought on the scope of war booty end reimbursement scope of restitution in relation to reparation. lapse of Germany each of the four occupying powers Great Britain, Russia, France and the United States - 7. The governments participating in the Reparation Commission may remove from its zone of occupation in Gerwany will retain control over the disposition of Germen property located within their respective borders. These nations will plants, equipments and materials (including current output) of such a nature and not in excess of such for occupation costs. Agreement should also be sought on the 0 amounts seek TOP SECRET TOP SECRET TOP SECRET May 1, 1945 TOP SECRET May 1, 1945 90 89 o and the Control Council should keep appropriate Allied agencies currently informed. amounts as may be determined by the Reparations Commission. o. During this initial period any one of the four oooupying powers could allow, if it so desired, any other United Nation entitled to reparations in the form of removals from It shall be our policy to press for inclusion in such an initial removel schedule the categories of plant, equipment and materials described in paragraphs 30, 31 and 32 of the *Directive to the Commander in Chief of the United States Forces of Occupation Regarding the Military Govern- Germany to take out of its zone plants, equipment and materials of such a nature and not in excess of such amounts as may be ment of Germany and in paragraph 3 E. above. determined by the Reparations Commission. Such removals world be subject to the policy and conditions specified b. The decision BE to whether or not the renoval of in sub-paragraphs (a) and (b) above. particular plants, equipment or materials out of a zone in 1. Records should be kept of all deliveries made on Germany is consistent with the purposes of occupation would reparations account under such interis arrangements and be made by the commender of such zone, subject to the folC lowing conditions: 1 There would be constant consultation between such deliveries should be made without prejudice to the final 0 allocation of reparation shares. The Reparation Commission should determine the principles for valuation of such deliveries. zone commandere. 11 In making a decision as to removal the zone commander would be responsible for carrying 10. The Reparation Plan should include provision for the early out any relevant agreed policies which may be formulated from time to time by the Control of such governments as have suffered devistation or substantial Council. damage. This agency, after detailed study of Germany's capacity establishment of a reperation agency including representatives 111 The Control Council would have an opportunity to consider any particular removal and could to pay and examination of claims to reparation by the various claimant nations, shall develop a long term plan for the delivery of reparations. This plan shall set forth a description of the reportions to be delivered and their physical allocation to veto it. iv Regular reports should be made to the Control Council of transfers for reparation account and TOP SECRET the 0 TOP SECRET May 1, 1945 TOP SECRET 91 May 1, 1945 TOP SECRET 92 -2O 0 -10- the various claimant nations. It shall contain a time schedule indicating the rate at which deliveries are to be made to the The long term plan referred to above should not be approved by the U.S.representative on the Reperation Commission or Agency several governments over a stated period of years. The repars- until it has been submitted to and approved by the United States tion agency should be given continuing responsibility for drawing Government. up at regular intervals detailed schedules of the amounts and kinds of reparations items to be delivered and should have The Control Council should advise the Reparation Agency (or Commission) from time to time as deliveries are made. The authority to determine the ellocation of specific items among Reparation Agency (or Commission) should keep a record of all claimant governments. such deliveries, and should place appropriate values on the In lieu of the establishment of the reparations agency respective amounts delivered. referred to above the Reparations Plan may provide that the Reparations Commission, appropriately expanded by the addition of representatives of other claiment governments, may be continued in existence and utilized for the same purpose. The occupation authorities should be responsible for the execution of the plan within Germany. In the execution of the plan, the Control Council should have the authority to withhold from transfer as reparations specific items the renoval of which in its judgment would reduce the available economic means below the minimum required to seat the other obligations of the ocoupation. [After review by the Control Council and in the absence of agreement, the zone commander if he believes that the retention of any specific item within his zone 18 essential to the purposes of the occupation, may with the specific consent of his government withhold the removal of such item. C TOT SECRET The 0 TOP SECRET PRECISION TRADE MARK MICROSTATI MICROFILM ROLL NO. B TOP SECRET TOP BECRET 94 TOP SECRET COPY NO. 65 93 ENCLOBURE IP000 1/2 3 May 1945 THE JOINT CHIEFS OF STAFF WASHINGTON 25, D.C. Pages 38 to 39. Incl. 2 Kay 1945. INFORMAL POLICY COMMITTEE ON GERMANY KELORANDUN FOR THE SECRETARY OF WAR: SECRETARY OF THE NAVY: DIRECTIVE TO CO1MANDER-IN-CHIEF OF U.S. FORCES OF OCCUPATION REGARDING THE MILITARY GOVERNMENT OF GERMANY subject: Directive to Commander in Chief of U.S. Forces of Occupation regarding the military government of Germany. Reference: B. IPCOG 1 Note by the Secretaries The Joint Chiefs of Staff recommend that the secretary of The comments of the Joint Chiefe of Staff on the ilim War and the secretary of the Navy inform the Secretary of State tary implications of the "Directive to Commander-in-Chief, as follows: U. 8. Forces of Occupation regarding the Military Government "The Joint Chiefe of Staff have considered the military of Germany (IPCOG 1) forwarded to the Secretaries of Mar and implications of the proposed directive to the Commander in the Navy through SWNCC, are circulated for consideration by Chief, U.b. Forces of Occupation, regarding the military government of Germany contained in IPCOG 1, and with the follow the Committee. ing amendments see no objections from the military point of view: CHARLES W. McCARTHY a. Delete the period at the end of the 1 ast contence, ALVIN F. RICHARDSON paragraph 30, and add the following: '...except that, in your discretion, you may permit the production of aynthetic RAYMOND E. OOX Secretaria rubber and oil, aluminum and magnesium, to the minimum extent necessary to meet the purposes stated in paragraphs 4 and 5 of the directive. b. Delete the word 'excluding' in line 2, subparaQ o graph a. paragraph 32, and insert the word 'including' in lieu thereof. also insert the words 'synthetic rubber and oil' after the word 'vehiclee' in line 4. o. Delete the period and add the following words to the last sentence of paragraph 32: 'as soon as you have I-000 1/2 IPCOG 1/2 TOP SECRET 38 Enclosure 95 TOP SECRET had an opportunity to review and determine production necessary for the purposes stated in paragraphs 4 and 5 of this directive." For the Joint Chiefe of Staff: (Sgd) WILLIAM D. LEAHY Fleet Admiral, U.S. Navy, Chief of Staff to the Commander in Chief of the Army and Havy. IPOOG 1/2 - 39 - Enclosure C MAKE 97 96 b. The standard of living and conditions of employment DRAFT STATEMENT OF LABOR REPARATION should confuse to - standards. e. Countries using complement labor should report periodically to the Separation Demmission - Agency It was agreed at Talta that reparation in kind is to be - the living and working conditions of such workers and the #### made of their services. exacted from Germany, partly through the * of derean labor". 5. Apart from persons deserving of parlishment as defined above, In vegetiations - labor reparation with the other powers is the German labor for reparation should be recruited only ea a Reportion Commission, the United States representative will be valuatary basis for work outside Germany. guided by the following principles 1. The United states will not accept reparation in the for a of laber services. 2. This government is strongly of the visa that Geneano other than those deserving of panishment should not be called upon to perform compuleary laber service outside Germany. 3. Compulsory later service should be required only from individuals definitely determined by appropriate process to be war originals, members of the Destage, the S.S., the Sicherhaltedienst der S.S., leaders of the S.A., or leading colleberaters, supporters of and participants in the Mail party - administration. 4. the following conditions should be accepted by all parties with regard to compulsory labor services a. Except for persons individually tried for specific arinos, and convicted and sentenced to lifetime punishment, the period of empulsory labor service should be Limited to a definite span of years. 6. Payment for wages and maintenance for both compulery and valuatary labor utilized for reparation shall be barns by Germany. The value of the services of both types of laber shall be included as reparation. -2- May 3, 1945 10:59 A. M. 99 98 Operator: Mr. Connelly. HMJr: Hello. DWr:(cont.) C: Mr. Matthew Connelly: Hello, Mr. Secretary. HMJr: How are you? HMJ- How are you this morning? C: HMJr: 0. K. 01 Fine. C: HMJr: HMJr: Two things - I see on the ticker - that the President is seeing Winthrop Aldrich with General Fiening. C: HMJr: That's right. I thought I might draw your attention to the fact that we are in the midst of a suit against Winthrop Aldrich and the Chase Bank in New York. C: HMJr: C: HMJr: Yes. principal opponents to Bretton Woods. D. K. Well, nothing will be discussed on either HMJr: Well, also, I wouldn't throw them any favors. one of those I can sessure you. Oh, no, no, well, thin in on this var fund thing, you know. HMJr: 0: HMJr: 0 HMJr: I see. Well, then I thought the President might not know these things. I'11 call it to his attention before he goes in. Thank you. The other thing is - yesterday I left with the President a proposed article, one of two which I'm proposing to print -- give the papers after V-E Day. They are two articles on the no-called Morgenthau Plan. He said he'd take them home with him I'11 check on that. But you night - if you would check. And he was going to give as -- if he approved I asked whether he wouldn' give = some indication - something I could use in connection with the release to show that President Truman had approved it. I gathered that he was going to take it home last night. Well, he probably did. I haven't had a chance to talk with him, but I'll check on that for you. And explain -- I vant you to just take a minute theee two articles - the book 1. coming subsequently and I explained and asked his advice, that I give it to all the Press Associations, that 18, after V-E Day. The first one in completed and the second one 1. not yet, but it is almost completed. Right, air. He has the first one. There's been so much controversy that if and when I give it out, I want if I could.to make it have something in the hands to show that President Trumar - that this had his approval, you see? C: HMJr: The other thing is - he is one of the two or three C: C: C: Yes. For having, we claimed, not lived up to Treasury's rules on freezing enemy assets, We're in the middle of that suit, see? the one, the other one isn't finished. And I don't know whether he got to it last night or not. C: Yeah. Well, we'll check on that for you. Thank you very such. Thank you, Mr. Secretary. 101 May 3. 1945 4:27 P. k. No. I must admit, Mr. Secretary, there are some people around here who feel the other way. I, R: 100 EMJr: Kr. Nate very such to my disnay. Robertson: HMJr: I are. How are you? HMJr: HMJr: I'm - pretty good describes ac. (Laughs) HKJr: R: HMJr: with a weak on the pretty. (Laughs) Well, that's mutual. Look, they evidently are thinking of putting a san by the nase of Eberstadt into an important position to go to Germany, and I vat asked about him. know you people have got a lot of stuff on him. Eberetedt - he used to be over there with Don Nelson. HMJr: I Yeah, yeah, Ferdinand Eberstadt? R: HMJr: R: HMJr: R: Ahuh. R: HMJr: Could you dig out some stuff and get it over to the tonight or tomorrow morning? Yeah, I'll see what I can do, Mr. Secretary. We don't keep the files here. I really would have - I'll see whether I can.... R: HMJr: Well, all you've got to tell me -- whether you think for a top position to go in and rule Germany whether you boys over there think he is any good OF not. Well, we certainly don't. R: HMJr: You don't? R: No. HMJ: Well, I don't--- that's enough. R: Hie record down here was nothing to brag about. HMJr: That's enough. overboard. fit in very well over there. I don't think 80. 0. K, Nate, I'm glad you're back, come in and see my any time. Well, thank you very much, Mr. Secretary. I've been planning to drop around and see how you were. That's right. 0 But as long as I've been asked, I didn't want to go Well I'm sure you wouldn : on that because his position down there he played with the Army around very closely, you know. It ves a cuestion down there of whether the Army vas going to run the show or whether the civilians were going to run it. That isn't the type of mind, I should think, that would R: (Laughs) R: The only trouble is it's like taking a dipper of water out of the ocean. That's right. R: Oh, I's pretty good. How are you? R: as you know... HKJr: Do that. 0. K. Thank you. May 3, 1945 4:32 P.M. 103 102 Operater: Mr. Clayton is in a meeting with Mr. Grew. I have His secretary, Miss Hannah. Hello. INDUCRANDUM FOR THE FILES Operator: Go ahead. HMJr: Miss Hanneh: Hello, HMJr: This 10 Xr. Morgenthau speaking. H: Yes, air. HMJr: Mr. Clayton asked my advice about a Mr. Eberetedt. H: Yes, sir. HXJr: H: Tell him to 60 alow on that until be has # chance to talk to me about it tomorrow. A11 right, air, I will. HWJr: If you please. H: I will HMJr: H: Meeting in the Secretary's office, Hello. Thank you. Yes, air. May 3, 1965, 3:30 P.M. Present: Secretary Morgenthau, Arbanaador Braden, U.S. Ambassador to Argentina, Measure Coe and Hoffman Subject: Argentina The Secretary told Anbasgador Braden that be had been wanting for sone time to send a group of Treasury men to Argentina. He said that not we had been looking all over the world for Nami money and that we had found very much and be thought we night find nome in Argentina. He told the Anbanaador that he has taken up this matter with the State Department and that the State Department had given his a list of names of people in Arcentina who are available to do the job. The Secretary said that on only the Treasury as a result of highly he did not complicated think any question of these people which could do the job because it is a the work of Foreign Funds Control, has the necessary experience and personnel. The Secretary emphasised that 11 the Treasury group should go to Argentina they would work under the Ambanaador is close collaboration with him and with his staff. He referred to the mission sent by President Roosevelt to Switzerland and paid that we had succeeded as result of that mission, in which Mr. Schuidt of the Treasury had played a major role, in getting the Swiss to take a HMJr: May 3, 1945 number of stops to cooperate in our efforts to sooke out Kasi scony. At this point the Ambasasdor said that be was interested in knowing the kinds of measures which Argentina ought to take and at the Secretary's suggestion I outlined triefly the major steps which the Swiss had taken and suggested that Argentina, being an ally, ought to go even further than a neutral country. The Secretary suggested that the Antaussador permit Mr. Schmidt and perhaps one or two others to call on him before his departure and disCUSS with his for an hour or so what the problem is and what kind of steps would be necessary to carry out an effective program in Argentina. The Anbassador said that he would be glad to talk with the Treasury pen and asked if it would be possible for him to have an outline of the type of program we would like to see put in effect. The Secretary asked that EPRECISION TRADE MARE MICROSTATI MICROFILM BOLL NO. 104 -2such an outline for the Ambessador be prepared. Ha asked how long Ambansador Braden would be in Washington and Mr. Braden said be expected leave the 15th for Argentina and that be would be in Washington only until next Sunday. The Secretary said that Coe, Schmidt or I would get in touch with him. Ambassador Braden said that be could be reached to through Mr. Barren of the Division of Latin American Affairs at the State Department. PPRECISION MICROFILM TRADE MARK ROLL NO. 106 105 May 3, 1945 such an outline for the Antaasador be prepared. He asked how long Ashassador Handen would be in Washington and Mr. traden said he expected to leave the 15th for Argentina and that be would be in Washington only until next Sunday. The Secretary said that Coe, Schmidt or I would get in touch with him. Aahassador Braden said that be could be reached through Mr. Warren of the Division of Latin American Affairs at the MEMORANDUM you THE FILES Meeting in the Secretary's office, State Department. May 3, 1945, 3:30 P.M. Presents Secretary Morgenthau, Ambassador Braden, U.S. Michael L. Hoffman we told Ambassador to Argentina, Messre. Coe and Hoffman Subject: Argentina The Secretary told Ambassador Braden that be had been wanting that for be some had time been to looking send group all thought over of Treasury the we world night man for find to Nasi Argentina. some acony in Argentina. and He that said we He had not found the Ambassador very such that and be has taken up this matter with the State Department and that the State Department had given his list of names of people that in Argentina who are available to do the job. The Secretary said 11 is a he did not think any of these people could de the job because of complicated question on which only the Treasury as result and highly the work of Foreign Funds Control, has the necessary experience personnel. 1 The Secretary emphasised that if the Treasury group should go to they would work under the Assessador to close collaboration Argentina his staff. He referred to the sission sent by President with him and to with Switzerland and said that we had succeeded as a result of Roosevelt that mission, in which Mr. Schmidt of the Treasury had played major in role, in getting the Swiss to take a number of steps to Ambassador cooperate said efforts to smoke out Nasi money. At this point the which Argentina our be was interested in knowing the kinds of measures the that to take and at the Secretary 's suggestion I outlined briefly major ought steps which the Swice had taken and suggested that Argentina, being an ally, ought to go even further than a neutral country. The Secretary suggested that the Ambassador permit Mr. Schmidt and die- and or two others to call on him before his departure perhaps one or so what the problem is and what kind of cuss with his for an hour to out an effective program in Argentina. the said stepsAmbassador would be necessary that be carry would behis glad to talk with theoutline Treasury men have of The for to type an Millier 5/3/45 copied 5/8/45 and of program asked if we it would would like be possible to see put in effect. The Secretary asked that RECISION MICROSTATA TRADE MARK MICROFILM BOLL NO. 108 4.n 107 May 3, 1945 Francisco thed through Stamesing TELECOMMUNICATION TO: General Mark Clark Headquarters in Italy I send you my heartfelt congratulations on bringing to a brilliant conclusion the toughest assignment of them all. Accept my personal good wishes. My dear Mr. President: I just want to tell you how delighted I was to learn of the retrenchments you have made in Federal expenditures. This move on your part will have a most beneficial anti-inflationary effect, and will alsoWar be Loan helpful to us in our coming Seventh Drive. Sincerely yours, Henry Morgenthau, Jr. - H. Morganthills Ja. The President, The White House. no HEGIaja 5/15/45 - Checked with Mr. Leroy - Mr. Feltus N 9 spoken to the Secretary about this. PRECISION MICROSTAT SO. U.S.PAT. OFF MICROFILM ROLL NO TREASURY DEPARTMENT INTERLOFFICE COMMUNICATION Date May 3, 1945 Secretary Morgenthau FROM Randolph Feltus The attached is the sort of thing to which I referred in my recent semo- randum urging an early announcement of Treasury's compromise position. Also, I think our having given the Impression of being week and uncertain 18 damazing to Harry White's reputation. R.J THE WALL STREET JOURNAL MAY 3 1945 the monetary these men will fund, Business Bulletin stage would complaints A Special Background Report tratemity's remove about the TRECK MAKERA urge Army contracts for their products 421 mc eurolue investors in their Sande be madethat banking On Trends in-industry cut problem the and Finance Contracts Be goods from Army BOOBY TRAPS of PRODUCTION produce taken Neither GROUP goods AND will Brow machimery plans Chr Motion will Amer- of result of of that from Warner will unions and rulings that will Elma Code share The M.P.P.D.A with only restroise certain number piris but administers advertising theorre service, trade Prop RETAILERN hint labor problems. Hills registrations SAIN yesterday show to refuse Hair best his BRIEFS Customers 2 Splegel Inc., ATT urged their company's PND lenger New the sald York Fran wald paying They stay's time the and for NATURAL reumon about $100 EPRECISION TRADE MARK MICROSTAT MICROFILM ROLL NO. TREASURY DEPARTMENT INTER OFFICE COMMUNICATION Date May 3, 1945 TO FROM Secretary Morgenthan Handolnh Feltus I thought the attached night M anuse you. Rt PRECISION TRADE MARK MICROSTAT REG.U.S.PAT.OR MICROFILM ROLL NO NEW YORK Herald - Tribune MAY 1 1945 Wall Street Comment Region Foods A member of the House Rep. Most Active Stocks resentatives visiting here Committee Committee day, predicted - on Banking that bere the and yester- - House Cur- STREET - the PROCE within would Section !** conclude days." Woods hearing legisla are the no tion guess will class vata" rete" vote" the reported and be out ventured Treas- - might except added May that an fune the outcome - of except skeptics any the virepoint - of - the with with "fund." that an ever women) creaminationsand these 2 the baged country with letters emanating from from from women's other the occapitation offications - clubs elube civil pired society for and ance of the made made by plan by revalu entatives filtre Treasury and State Dreart Currency place the - Police Following PASSAGY manage by by the the supported by eight underwritten House the the Senate Benkin and = and Insurance circles MAY will re Currency - Committee will begin its the facilities the = Urman work Present indications seets seem to facilities recurres whose stand. 0 - has - be that its bearine - and deliber delibers Ins has been rulped by Allied Allied - - Nazi very heavy in Code = may - lengthr length in factwas fact pounding. pounding and than time prove government consumins obligation expected generally. obligations obligate The new Stockholm concern already been Swedish Reinsurence with British insurance grow for obe ef the first consequences of recipreeal arrangements Directly has the estab that addition source ef profits the Perman Card field collabor been th the LICENSE - indirectly Indirectly - Shik should this = should also Juhman of a DEY Swedlish re-in- able restress for companies in the the surance company called Aegultas United States It is tell here FOREIGN ECONOMIC AIMINISTRATION COPT ( office of the Administrator Washington 25, D.C. 13 Textiles and Trucks for China - 2 May 3, 1945 MEMORANIUM In the Inter-Agency Committee we are studying the entire textile field, both at home and in France and other liberated countries. No hope to come up with a world balance sheet next week which will show us where we stand and what our various alternatives To: The Honorable Henry B. Morgenthau The Secretary of Treasury Honorable William L. Clayton Assistant Secretary of State are. The terrible shortage that we face throughout the world on food and Tax materials makes it imperative that we try to allocate our contribution on an equitable basis. with BANY of these representatives here in this country for the San Francisco conference, undoubtedly after adjournment they will visit Washington and each will make his appeal for his OWTE country. General Itrehom Somervell, Commanding General Army Service Forces It is necessary that we try to do these things in an organised From: Leo T. Crowley, Administrator because of the lack of centralised control prohibiting them Subject: Textiles and Trucks for China directly concerned with supply responsibility. I have reviewed with Mr. Scheuer and Mr. Willauer the request from China for 176,000,000 yards of cotton textiles and 4,000 trucks. We are is sympathy with the plight of Chima and Mr. Willauer has been working on the question of textiles and trucks for than, However, one thing that must be kept in mind is that in allocating these critical materials and food supplies, as Administrator of the Foreign Economic Administration which has charge of liberated areas plus lend-lease for our fighting ailies, I must try to distribute these supplies with as such justice as possible. Mr. Willauer advises as in the attached memorandum what it would mean if we are to meet this request. When it comes to meeting the requirements out of allocations for lend-lease in liberated areas or by reducing our civilian consumption as distinguished from a cut in our military requirements, I an informed that General Gomervell is very sympathetic with the Chinese desande but is unwilling to out back military requirements to meet it, and that all be is prepared to de is to give his moral support to civilian out backs. The Inter-Agency Committee of which I an Chairman, in studying the overall picture, plans to look into the military's stated requirements, and perhaps the best solution will be to split the Chinese need fifty-fifty between military and civilian supply. I do not see how it is possible for us to give a definite commitment to Dr. T. V. Soong or a recommendation to the President as early as Tuesday morning. way for the benefit of our own government. In the past many of these foreign missions have caused considerable confusion from going around and opening doors of other department not I an setting this thought before you because I know that with all the problem that face us, unless we do handle them in the regular way, we may get ourselves involved in come twents we cannot possibly meet. ( my 3, 1966 To: From: Subject: ST. Leo T. Crowley, soministrator. whiting Hillauer, streator FAP SAFE 6 Special Sranah. Inpact of Chicoea Testiles and Trusk Sequirements ea other U. J. PROTEIN. TEXTILED Chinese requirement for taxtilon for 1046 La 170,000,000 yards. The Textiles represent one Art or the three point anti-infinition program and the 1. M Ansy Thentre Commander has ternel the Action tafiation prograe NO A vital military need. The need to combat inflation is imediate and, accordingly, the textiles must be deliver&u not later than the beginning of the spring curver and there JUST be no interruption in deliveries. Vigarous attempte are being made to obtain textiles from presilism and LAXIONAL production, but all who have examined the problem AIR that very few if any textiles will be obtained from that source in time for delivery in China during calender 1946. Therefore, while it is escential to obtain these off-shore Sextiles 60 that the anti-inflation program will continue in 1946, they cannot With counted on to solve our present problem. Accord Angly, 19 is consluted that the antiro 176,000,000 yards must DOSS out of D. 3. Production during the seeond and third quarters of calendar 1940. T In order to properly evaluate the impact or Chinese requirements on C. D. production, I DATE compared the requirement with estimated production figures La the second and third quarters. To date, total allocational to China are 6,200,000 yards under lend- lease requieTriona to DOIN out of first and sesond quarter's pro- duction. There is attached Table "A" knowing a transportation budget agross the Hump by air with the textiles, quarterly deficits of stocks of textiles In eight, and production requirements to balance off the deficits. The outstanding fact stora by this table is that there is needed from D. b. Production to Tatah up with the required deliveries in China from second quarter 59,800,000 yards and Crea Inpuct of Chinese Textiles And truck Requirements as other U. S. Program - 2 TIXTILE (den't) think partir 76,003,000 yents. This gives A total production requirement from NOW through September 30, 1045 of 161,800,000 yards. There fill also Attached Table ⑈⑈ allowing the Impact of 101,800,000 year requirement GE other requiring production in the sucond and taird parter. Outstanding figures to be noted are that the requirement would represent 40% of available civilian production For exjort. 2010 of presenting for the E. U. military require MOTE AND K $ the evillable production for C. 7. sirtline réquirements for clothings fortwner and,hetamheld which is the category Lette Which the Chinere requirement would out. The FAgures used in properling this study are from the April 4 report ne the settbu taxtile outlouk prepared by the Textile of the AAC BLE be fustic - and 9 of UAS report. BOTH The requirement vas stated by the Shinore AS 82,000 Soins. De ariginal estimites 10,000 yards per tan were used AL & figure. time giving rise to s requirement at 220,000,000 yards and this figure is on resert with various Later investigation of Chineso specification shored Shat this proper conversion WAS alcaer to 1,000 yards per toa, Uhu giving the number Figure or 176,000,000 yords. Shipping Line to India And delivery from India to think at least nontha from delivery time of goods in the Accordingly, asuego queener V 6. production aust be on for thind quarter Chineas anti-inflationary works third quarter U. A. Production for fourth quarter Chinasej and fourth quarter U. - production will only be useful in 1940. TRUCKS Chineso requirement is for 4,000 socitional trusks to be delivered La China during the calender year 1946. Delivery In 1046 is only possible out of srooks manufactured in the first quarters of the year, bassuse IS takes as least three senths for the prooess et shipment, passably Lt India and transportation over the stilwell Highway late China. IS is cenerally agreed that the only suitable types of trucks for China NPW frex the category known AS "light-bacy" AND this type Ispact of Chinese Textiles and Truck requirements GO other U. 0. regnise - : THUCKS (con't) IS of truck,ourrently being furnished to China under their regular program Co Chindac are currently receiving deliveries of thate regular program of 10,000 trucks. the entire 10,000 trushe are scheduled to be In 1045, 11 is estimated this only 10.000 of Chees can pose Ibly usSer think during the ANIMAL year 1945. These 10,000 trusks slone will Set early will the anticipated noods for autzo movement withIn China and It is for this FOLLOW Sha S the 4,000 extra trucks are required. It should also be noted at this point that a surious tire affortage for the 10,000 trusks will be fasted unless ollocations AN mirkelly Inarmant. It is folt that this problem of tira be treated AR being of equal importance with the Affitional require- want of 4,000 trucks. 2. Lie - True production gragram for 144 Levels) Table "K" above TO C. production of light heary snake for quarters AND the present allocutions of Plainest agailer, This DAIS points to not about Moos adisadules APP the Collowing = The yearly production 10 315,200 or this Amount. approximately 500,000 or 100g 18 subeduded as Hilltary production. A audiesantis! portion of this is For military land-lease, principally to YOURS and by Approximately 10, 000* which Top civilian and affilian Lund Inoze. OF this. about 1000 are Tur Okios (Laje ALL the nuckar AL US 10,000 Unuse will actually be manufactured in 1045 - the other 3,005 aving been manufactured 1944). 31,000 of the 50,000 are reserved for the office of Defense Transportation for NET atrilian use AND only about 0,000 vuhfelos for the kho2a your 678 reserved for liberstal ATOMA Add for other Tent-loans southful. Approximately L's summissatura It protested 1H the tirat three quarture of 1045 which in USA paris! vitally Impartant to Mix 5. The possibility n. mivilian ANY Atranos to 41weck alviling great A tarrific procedural problem. to to the presting M to aivilian allonation of truats So sate first 54 sameCeaturera and usure about 30 care prise to production. 622 of the first and sepport quarter and TAIC of She Ahra quarter have been Ship This test Start CSF been Expart of Chinese !ortilos and Truck Requirements on other U. 6. Program - 4 THE (Con't) nade. shipping schedules set 59. alas In Forther words, sivilian allocations are difficult matter to dos1 with because they KPO Not manulas as S pool. Lasuning these procedural problem ONS The supportfully oversome. there AND the following further estricultime It must 10 that ATI first quarter atvillar trucks 82% wither white ne in some MATUREY good beyond The 4500 situation probably exists (or will exist before action is takan) as to about N half of the record quarter production. B. on these saturations, there 14 thus . castmin symilability of light heavy trusks AA follows (1) Thorn are 18,000 trucks scheduled for divillan use and expert. representing total of one half of this quarter ant A11 of the third queter. of shie 10,000. alamit 6,000 see Already entre to whink, lasting n.amiliable HOL MUER with of only 13,000 spucks. IC regulariest of 4,000 were villag from this seuros, it would be . SEC est in ather aivilian consitients WILDS, cortoonly. would be very surious, requirities of diversion Cremi villary illpestiva IS to Salievad DON'T military License requirements miss of second and third quarter predention am about to THE out SSAD and 11 is western atnot THE the MTV Teel SAAS . out Lank assuration to 4,000 HIA ton 474 Chevrolete, starting in AMOUNT, GALL be ends. and Oat-figures now In properation DAY allow . eut haek to 4 ton trusign which BPS 3070 desirable. official Firumes submitted to the crewley to date on AS overn11 rehimle TASTA whom only About a 75 out bank is the third quarter ADD tubes In the second parter. The assuation La. severover, occupliested becture the La surrently claiming for Increase in and parta to service 14 extating floot and 11 the bean that this requi rement wight Ave n Gas result or no not MAR at H21, jawlysto of the productING Name Sir hair of the KOROUS quector and for the thin quarter 4500 Shir Following: Approximately 111,000 total of High heavy Sploke The Chinese requirement of 6,000 spull be rads by less than 4 elet beak LC the out 1602 was roal and not vitiated by spure parts Increase. PRECISION TRADE MARK MICROFILM MICROSTAT ROLL NO Incest of chicago Textiles and Trusk Requirements OIL other II. 8. Program B THE (Con't) This 4 10 obviously MEAL'S loss canading their the 83 out required If the trusts are to POLIC from sivilian souroes. Attachementa Table "A" I Table " TABTH Definite In dell- D.T.Production equirement to nest Deficita in 1945 Air Transport apang very in for textiles 68 offic insted by I Leny. 7,000 9,000 40,000,000 16,000,000 78,000,000 6,200,000 yards D Fourth 5.000 0 Third In Fight Tards Tuns Second quarter 40,000,000 yda 49,600,000 72,000,000 101,000,000 yda. 21,000 105,000,000 HOTE NOTE: China deliveries. China. ARFORD Deap available 19,000,000 yards 72,000,000 yarda T 101,000,000 yards In order to actually take Any deliveries The extra thousand taxa and 1,000,000 yards during second quarter In China, first required for the total 22,000 time AGE quarter R.O. production would be needed. 176,000,000 yards requirement eaght to be relatively simple to obtain from stanapor- all of these textiles have been distributed. However, It will be possi- LE the are available. This yardage only represents a carrying capacity of ona C-40 air transport plane for 9 months. ble to arrange for PAPPY over of spoond quarter air transport spaze tation pains of view Fir the textiles This is havever ImpossIble GA practically into China to the credit of third quarter and, accordingly, sauced quarter The production is people! to fill up the allocated append and third quarter apace. TABLE "A" TRADE MARK MICROSTATA REG. U.S. PAT. OFF. MICROFILM ROLL NO. Persentage of production Programs represented by Tardace available for various chineso Requirement for Six Montha out of aegond and third quarter Program neaths 170-1 Chinese Requirement dueting basta. Production. 60 civilian export 402,000,000 jda 1,800,000,000 JUPTO . PRECISION 12)C 101,800,000 yanda U.S. nivi- 9 1,000,000,000 Ilan J TABLE PRECISION TRADE MARK MICROFILM MICROSTAT ROLL NO An 154,932 B 23.03 MERIZA AME MAIL Total 1111171 71.066 00.700 146,046 75,047 72.00 165, K 7,053 6.274 15,049 1.005 10.110 11.464 T US DOCT TIA terder 800 Were for Identited Araba Imail doing Create CamelesTer Total Comment 1 issa Total 04 - 30 2 11.000 11.000 0.00 10-504 SAMPLE THE and market RPRECISION MICROSTATA MICROFILM MARK ROLL NO. from Feltus on World-Telegram story which alleged that the Dr y Worker used the Treasury to raise funds 122 -2cancelled, stating that an important conference had come up. We then gave the Daily Worker the names of seven persons in the New York area who were qualified. They chose Dr. Newcomer, invited her, and she accepted. 121 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION Date May 3,1945 The Daily Worker made the mistake of running an editorial which said that a Treasury official Secretary Morgenthau Randolph Feltus TO FROM would be "main speaker' at their conference, which would open a drive for funds. two Woltman of the World Telegram called Luxford tells me that you have asked for a report on the World-Telegram story which alleges that the Daily Worker used the Treasury to raise Treasury on seeing this. He was referred to me. I was out. When his representative called later, I told him the whole story. funds. Here 18 the story: O The Daily Worker wrote to you asking for a speaker on Bretton Woods for a conference on world security. I raised the question of the advisability of complying, but Harry White said he felt that we should handle it in our routine We also called the Daily Worker and asked for a correction of their error. They promised to comply. We also raised the question of the fundraising nature of the meeting, and they denied that funds would be collected at the meeting, or that way and should not discriminate against any group. He had taken a similar position when, earlier, I had questioned the wisdom of providing a speaker for the Union for Democratic Action. In both cases, I felt that a polite brush-off would save us a backfire. However, I had to agree that the non-discrimination practice was sound and I did not protest loudly. the speaker was being used as bait for this purpose. Woltman's article quoted me accurately, but not completely. In my opinion, Treasury did not suffer in this Our policy had been to supply a speaker to any group requesting one on the theory that we wanted instance. the story of Bretton Woods told accurately. Our procedure was to provide non-Treasury speakers whenever possible. We either asked the speaker to take the assignment, or gave the organization a list of qualified speakers and suggested that they make a direct approach. In this instance, we first suggested Mr. Bunce of the Federal Reserve Board. He accepted, and later We then called Dr. Newcomer to tell her that she was not speaking in the name of the Treasury. She said that she know that, but intended to speak whether the World-Telegram liked it or not. She said she would make it clear in her speech that she represented only herself. 0 Rt PPRECISION - TRADE MARK 123 25 May 3. 1945. Dear Table It year with the greatest pleasure that I learned that President Truss had sent your name to the Senate for confirmation as Postmenter General. I want to congratulate you - receiving this appointment, and I know that the duties of the nost will be well handled during year period of service. be If hesitate helpful there to is to you, any all way - I by hope no. which and that - you office look will forward - not to our association is the Cabinet tartar the days to - with certifical regards and best wishes, Sincerely, (Signed) H. Morgenthav, Ja. Innovable Robert 3. Mannagan, Hayflover Hotel, vashington, D. C. GEF/dbs 124 x BU CUSTOMS WA MISS MEITZLER CA ASST SECRETARY HARRY D WHITE CALLING FROM SAN FRANCISCO WITH MESSAGE FOR THE HONORABLE MENRY MORGENTHAU, JR SECRETARY OF THE TREASURY WASHINGTON, D C QUOTE I THINK THE MATERIAL SENT READS VERY WELL AND HOPE TO SEE IT IN PRINT VERY SOON. A FEW COMMENTS FOLLOW WHICH YOU MAY WANT TO READ. 1. AFTER A SECOND READING, : DO NOT FEEL THAT THE TREATMENT OF THE CARTELS OBSCURES THE IMPORTANCE OF THE PROPOSAL TO ELIMINATE HEAVY INDUSTRY IN GERMANY. ON THE CONTRARY, I THINK THAT THE ILLUSTRATIONS AND DISCUSSIONS SERVE TO STRENGTHEN THE ARGUMENT FOR ELIMINATION OF HEAVY INDUSTRY. POSSIBLY A PARAGRAPH OR TWO MIGHT BE HELPFUL. POINTING OUT THE VIRTUAL IMPOSSIBILITY OF PREVENTING LATER DEVELOPMENT OF INTERNATIONAL CARTELS IF GERMANY IS PERMITTED TO HAVE HEAVY INDUSTFXX INDUSTRIES. THE POSSESSION OF HEAVY INDUSTRY IN ITSELF IS DANGEROUS, BUT THE COMBINATION OF HEAVY INDUSTRY AND WIDESPREAD INTERNATIONAL CARTELS PRESENTS AN EVEN GREATER DANGER. HENCE, THE INCLUSION OF THE DISCUSSION OF CARTELS IN THE SAME CHAPTER WITH INDUSTRY SEEMS TO ME TO LIGHTEN THE ARGUMENT FOR DE=INDUSTRIALI- ZATION UNLESS SPACE PREVENTS, 1 THINK IT WOULD BE A MISTAKE TO CONTRACT THE TREATMENT OF CARTELS. 2. THERE IS MUCH NEEDED A FEW PARAGRAPHS EXPLAINING WHY THE ELIMINATION OF HEAVY INDUSTRY IN GERMANY NOW WI LL PREVENT GERMANY FROM RE-ESTABLISHING, TEN OR FIFTEEN YEARS FROM NOW, A MORE MODERN HEAVY INDUSTRY. A BRIEF DISCUSSION IS NEEDED OF THE CONTROLS IN GERMANY AND OVER GERMAN CAPITAL IMPORTS THAT SHOULD BE CONTINUED AS LONG AS POSSIBLE TO PREVENT A RECREATION OF GERMAN INDUSTRY. ALSO A PARAGRAPH OR so MIGHT WELL BE SPENT ON THE NEED FOR CURTAILING AS MUCH AS POSSIBLE RESEARCH AND THE DEVELOPMENT OF PILOT PLANTS. ETCADMITEDLY A VERY DIFFICULT CONTROL TO EFFECTIVELY CARRY OUT. 3. SOME MODIFICATION 16 NEEDED OF THE PARAGRAPHS DEALING WITH THE AMOUNT OF EUROPE-S NEEDS SUPPLIED BY GERMANY. AS NOW WRITTEN, THERE SEEMS TO BE SOME INCONSISTENCY IN THE CLAIM THAT GERMANY THROUGH CARTELS AND SUBSIDIZED EXPORTS DOMINATED EUROPEAN INDUSTRY, UHEREAS IN THE FOLLOWING PARAGRAPHS -- SEE PAGE 4 FF -- THE POINT is MADE THAT GERMANY SUPPLIED A RELATIVELY SMALL PROPORTION OF EUROPE-S NEEDS. THAT APPARENT PARADOX CAN PROBABLY BE EXPLAINED BY EMPHASIZING THAT IT WAS CERTAIN KEY INDUSTRIES THE DEVELOPMENT OF WHICH WAS STRANGLED IN EUROPE BY GERMANY WHILE GERMANY-S EXPORTS TO EUROPE CONSTITUTED A RELATIVELY SMALL PROOXX PROPORTION OF THE AGGREGATE OF EUROPE-S IMPORTS. 4. ON PAGE 15 THE FIGURE OF $775 MILLION WORTH OF EXPORTS OF IRON, STEEL, METALLURGICAL, CHEMICAL AND ELECTRICAL EQUIPMENT IS TO. THAT SEEMS LIKE A LOT. OF EXPORTS FOR THOSE FEW LATER DEVELOPMENT OF INTERNATIONAL CARTELS IF GERMANY IS PERMITTED TO c HAVE HEAVY INDUSTFXX INDUSTRIES. THE POSSESSION OF HEAVY INDUSTRY IN ITSELF IS DANGEROUS, BUT THE COMBINATION OF HEAVY INDUSTRY AND WIDESPREAD INTERNATIONAL CARTELS PRESENTS AN EVEN CREATER DANGER. HENCE. THE INCLUSION OF THE DISCUSSION OF CARTELS IN THE SAMP CHAPTER WITH INDUSTRY SEEMS TO HE TO LIGHTEN THE ARGUMENT FOR DE-INDUSTRIALI- ZATION UNLESS SPACE PREVENTS, I THINK IT WOULD BE A MISTAKE TO CONTRACT THE TREATMENT OF CARTELS. 2. THERE IS MUCH NEEDED A FEW PARAGRAPHS EXPLAINING WHY THE ELIMINATION OF HEAVY INDUSTRY IN GERMANY NOW WI LL PREVENT GERMANY FROM RE-ESTABLISHING, TEN OR FIFTEEN YEARS FROM NOW, A MORE MODERN HEAVY INDUSTRY. A BRIEF DISCUSSION IS NEEDED OF THE CONTROLS IN GERMANY AND OVER GERMAN CAPITAL IMPORTS THAT SHOULD BE CONTINUED AS LONG AS POSSIBLE TO PREVENT A RECREATION OF GERMAN INDUSTRY. ALSO A PARAGRAPH OR so MIGHT WELL BE SPENT ON THE NEED FOR CURTAILING AS MUCH AS POSSIBLE RESEARCH AND THE DEVELOPMENT OF PILOT PLANTS. ETCADMITEDLY A VERY DIFFICULT CONTROL TO EFFECTIVELY CARRY OUT. 3. SOME MODIFICATION IS NEEDED OF THE PARAGRAPHS DEALING WITH THE AMOUNT OF EUROPE-S NEEDS SUPPLIED BY GERMANY. AS NOW WRITTEN, THERE SEEMS TO BE SOME INCONSISTENCY IN THE CLAIM THAT GERMANY THROUGH CARTELS AND SUBSIDIZED EXPORTS DOMINATED EUROPEAN INDUSTRY, WHEREAS IN THE FOLLOWING PARAGRAPHS -- SEE PAGE 4 FF -- THE POINT IS MADE THAT GERMANY SUPPLIED A RELATIVELY SMALL PROPORTION OF EUROPE-S NEEDS. THAT APPARENT PARADOX CAN PROBABLY BE EXPLAINED BY EMPHASIZING THAT IT WAS CERTAIN KEY INDUSTRIES THE DEVELOPMENT OF WHICH WAS STRANGLED IN EUROPE BY GERMANY WHILE GERMANY-S EXPORTS TO EUROPE CONSTITUTED A RELATIVELY SMALL PROOXX PROPORTION OF THE AGGREGATE OF EUROPE-S IMPORTS. 4. ON PAGE 15 THE FIGURE OF $775 MILLION WORTH OF EXPORTS OF IRON, STEEL, METALLURGICAL, CHEMICAL AND ELECTRICAL EQUIPMENT IS REFERRED TO. THAT SEEMS LIKE A LOT OF EXPORTS FOR THOSE FEW COMMODITIES. THE AMOUNT WILL BE SEEN IN BETTER PERSPECTIVE IF RELATED IN PERCENTAGE TERMS TO THE TOTAL CONSUMPTION OUTSIDE OF GERMANY OF THOSE PRODUCTS. THE FOUR PERCENT FIGURE IN THE FIRST PARAGRAPH OF PAGE 16 IS NOT THE SIGNIFICANT FIGURE IN THE CONTEXT IN WHICH IT IS USED, INASHUCH AS IT REFERS TO TOTAL U. S. EXPORTS AND NOT TO THE EXPORTS OF THE COMMODITIES REFERRED TO IN THE PREVIOUS PARAGRAPH. ON PAGE 16, ALSO, I WONDER WHETHER THE PURCHASES OF RAV MATERIALS AND stNI-MANUFACTURES THAT GERMANY MADE IN 1937 IS THE SIGNIFICANT FIGURE TO USE. IT SEEMS TO ME THAT THE FIGURE THAT SHOULD BE USED, IF ANY, IS GERMANY-S TOTAL IMPORTS FROM EUROPE BECAUSE IT WAS HER TOTAL IMPORTS THAT SUPPLIED FOREIGN EXCHANGE TO OTHER EUROPEAN COUNTRIES WITH WHJXX WHICH THEY PAID FOR DESIRED IMPORTS. THE COMPARISON FOR ILLUSTRATIVE PURPOSES WITH THE IMPORTS OF THE AUTOMOBILE INDUSTRY DOES NOT STRIKE ME AS RELEVENT OR EFFECTIVE. 5. IT SEEMS TO ME IT WOULD BE VERY HELPFUL IF THERE OX COULD BE INCLUDED A COUPLE OF PARAGRAPHS EMPHASIZING THE POINT THAT GERMANY WITH A POWERFUL INDUSTRY WILL HAVE A GREAT CXX DEAL MORE BARGAINING POVER IN THE DIPLOMATIC AND ECONOMIC MANEUVERING THAN SHE WOULD WITHOUT HEAVY INDUSTRY. THE IMPORTANCE OF THIS LIES IN THE FACT THAT GERMANY IS CERTAIN TO USE WHATEVER BARGAINING POWERS SHE WILL HAVE TO SERVE HER OWN TRADITIONAL ENDS RATHER THAN THOSE OF PEACE. 6. ON RE-READING, I FEEL MORE STRONGLY THAT A COUPLE OF PARAGRAPHS ARE NEEDED SOMEWHERE IN THE ARTICLE POINTING OUT THAT IT IS POSSIBLE FOR THE BXX GERMAN PEOPLE TO ATTAIN A REASONABLY FAIR STANDARD OF LIVING IN THE FUTURE WITHOUT POSSESSION OF HEAVY INDUSTRIES, OR. WHAT WOULD BE BETTER IF THERE IS TO BE MORE THAN ONE INSTALMENT, A PROMINENT REFERENCE TO THE FACT THAT THE NEXT INSTALMENT WILL SHOW NOW GERMANY CAN THRIVE WITHOUT HEAVY INDUSTRY. UNQUOTE END OR CA WILL ELIVER MSC BY SPECIAL MESENGER END PM THANKS END HDW EMBM -2- TREASURY DEPARTMENT 125 INTER OFFICE COMMUNICATION DATE May 3, 1945 126 Contract Authorisations Total contract authorisations Applied to construction of shipe and 16,926.7 facilities to March 31, 1945 TO 12,067.2 4,859.5 Deduct: Mr. Bell Reserve for continuent ship construction and reconversion nn FROM Martin Moore 550.0 Reserve for rehabilitation of facilities the 594.5 4,265.0 Amount proposed for reseal I visited the Budget Bureas and discussed the situation with respect to the outs in estimates and appropriations, just announced in the press, with Mr. Vining, Mr. Schemb and Mr. H. Stone. The Budget Bureau, na indicated above, recommended rescissions of appropriation balances amounting to $3,100,000,000 and repeal of contract authority The recommended reduction with respect to the United States Maritime dicated of that $4,265,000,000. the total savings Although under the the White Maritime House press Commission release would in- be Commission involves quit substantial outs inCommission appropriations and contract handled excess of $7,000,000,000. the Budget Bureau representatives pointed out the Budget pursuant to Section 303 of the Second Deficiency Appropriation Act, 1944, Approved June 28, 1944. This section reads as follows: due to the manner in which the Maritime Commission operates under its authorisations currently available to that and by is "The President shall direct the Bureau of the Budget to maintain . continuous study of appropriations and contract authorisa. tions granted for the national defense, ear agencies, and the prosecution of the present wars for the purpose of submitting for the consideration of Congress, when the state of the ware make such action possible. list showing the condition of the to - that that figure overstat Les the savings involved. In other words, contract authority, 11 would be misleading to add the impounded appropriation balances to the amount representing reteal of contract authority in attempting to arrive at the total funds involved in this reduction. Actually, the over- all reduction amounts to $4,265,000,000 of which $3,100,000,000 in appropriation balances and $1,165,000,000 is cancellation of unused contract authority, The Varitime Commission, unlike any other Government agency, reduces its outstanding contract authorization by the amount of obligations incurred and not by appropriations made to liquidate such contract balances of each of such appropriations and contract authorismtions together with his recommendations for the repeal of such authorizations. of those Funds or portions thereof an are deemed no longer PO- The budget estimate of cash expenditures for the Maritime Commission quired for the purposes for which they were granted." in $1,700,000,000 for the fiscal year 1946 and the Budget Bureau believes The following shows a breakdown of appropriations and contract authorisations available to the Maritime Commission. (In Millions) Appropriated Funda 5,562.7 2,242.5 3,320.2 Unexpended balance. March 31, 1945 Deduct unliquidated obligations, March 31,1945 Unobligated balance, March 31, 1945 Add: that any reduction in that estimate will be very small. The Maritime Commission will complete all ship construction now in progress. Production of completed vessels will drop free about 100 ships A month at present to about 20 per month next January, Some of the other reductions just announced effect funds presently available to the agencies involved but represent decreases in 1946 estimates now before the Congress. The agencies involved and the amount of recommended decreases in estimates are as follows: Estimated receipts from other Government Departments, April 1.1945 to June 30.1946 400.0 Amount of Decrease (In millions. 26.2 Other receipts, Aeril 1,1945 to June 30,1946 3,746.4 Office of Civilian Defense (Completely Eliminated) Deduct: Administrative and operating expenses, April 1,1945 to June 30, 1946 Reserve for contingent ship construction and reconversion Reserve for rehabilitation of facilities Office of Defense Transportation Office of Mar Information 51.9 Ear Man over Commission Far Production Board 550.0 the 646.4 3,100.0 Amount proposed for repeal in Office of Censorship Petroleum Administration for War de 3.3 12.1 10.4 8.9 4.8 .3 127 Amount of Decrease (In millions) Federal Security Agency: Office of Education. - Education and Training of Defenae Workers Social Security Board, Public Assistance Grants Office of Scientific Research and Development 43.7 1 15.0 13.2 82.1 Total Decreases in 1946 estimates (net) 1 Increase. The Navy Department is not affected in these reductions now being reconsended. The Navy appropriation bill has passed the House. The Far Department's 1946 estimates have been in a state of continuous revision and have not yet been submitted to the Budget Sureau. It is not believed, however, that there will be recommended any reductions of funds now available as the Congress will probably again follow the procedure of reappropriating prior year unobligated balances. Any reductions will probably be reflected in estimates of new appropriations for 1946. There is a possibility of these being recommended some more rescissions of appropriation balances between now and June 30. 1945, under Section 303, somewhere in the neighborhood of $100,000,000 for various war agencies. However, this has not yet reached the stage of discussion with the President. # PRECISION TRADE MARK MICROSTATI MICROFILM ROLL NO. 128 129 5/7/45 ASSISTANT SECRETARY OF THE TREASURY 5/3/45 Mr. D. W. Bell Secretary Morgenthau To Secretary Morgenthan From N.E.O. Please speak to me about Army and Navy appropriations. When Mr. Bell was in New York during your absehce . few vesics ago I had occasion to inquire as to the precedence of Assistant Secretaries in view of the appointment of Mr. Bartelt as Fiscal Assistant Secretary. Paul McDonald aboved me an order signed by you in 1943 and apparently still valid which sakes the Fiscal Assistant Secretary next in line to the Under Secretary to act in the Secretary's absence. ms 130 United States Senate MEDICAL COMMITTEE INVESTIBATING THE NATIONAL DEFENDE PROGRAM May 3, 1945 My deer Mr. Secretary: It is very pleasing to have your letter of the 28th incident to the transfer of your surplus property a.ctivities to the Department of Conserce. The centigents you have expressed are deeply appreciated and you any be very sure that the cooperation which has been extended by you end your staff has been nost helpful to this Committee and its staff sembers in its constructive efforts to facilitate the surplus property progress. Very truly yours, Sammead JAS. M. HEAD Chairman Honorable Henry Morgenthau, Jr. Secretary of the Treasury Tashington 25, D. C. 0 131 Dinited States Senate MEDIA COMMITTEE INVESTIGATING THE NATIONAL DEFENDE PROGRAM May 3, 1945 My dear Mr. Secretary It is very pleasing to have your letter of the 28th incident to the transfer of your surplus property .. tivities to the Department of Commerce. The sentiments you have expressed are deeply appreciated and you say be very sure that the cooperation which has been extended by you and your staff has been most helpful to this Committee and its staff members is its constructive efforts to facilitate the surplus property program. Very truly yours, JAB. N. MEAD Chairman Honorable Heary Morgenthau, Jr. Secretary of the Treasury Washington 25, D.C. PRECISION TRADE MARK MICROSTAT MICROFILM ROLL NO. 132 May 3, 1945. Memorandum TO: Secretary Morgenthau FROM: Mr. Gaston I an attaching a proposed amendment to the regula- tions relating to the practice of attorneys and agents before the Treasury Department which has my approval and that of the General Counsel's office. It is opposed by Mr. Hanna, the Chairman of the Committee on Practice, and by Professor Yatema, a member of that Committee, but supported in principle by Mr. Cairns, the third member. The present regulations require & person who is author- the ized to practice before the Treasury Department to give up his right to practice before the Department if he enters employ of the Treasury Department. If he should later leave Treasury employment he cannot regain the right to practice before the Department without taking and passing the examination unless he is a member of the bar or is certified public accountant. Persons licensed to practice before the Treasury Department who enter the employ of other Departments of the Government relinquish their rights C time are able only for the they in Government employ and are and to exercise them again after they go back into private activity. This is a discrimination which seems to me to the General Counsel's office to be without sound basis, although it is defended by Mr. Hanna and Mr. Yntema in the attached papers. In view of this difference of opinion I as submitting the question to you, although I am quite clear that the revised regulation ought to be signed. 0 PRECISION TRADE MARK MICROFILM MICROSTAT ROLL NO 133 TITLE 31 - MONEY AND FINANCE TREASURY UNTITLE A - OFFICE OF THE ESCRITARY PART 10 - REGULATIONS RELATING TO THE PRACTICE OF ATTORNITE AND AGENTS Subdivision (x) of Section 10.2 is hereby amended to read as follows: *(x) IMA to request same to be stricken MRS assessing employment with the United States. It shall be the duty of every enrolled person who because . judge of any court of record or an officer or employee (1) of the United States, (2) of any corporation owned sholly by the United States, (3) of the District of Columbia, or (4) of any State or subdivision thereof whose duties disclose facts or information applicable to Federal tax matters, to request the Committee on Enrollment and Disbarement to place his name on the inective list of Treasury Department practitioners during the period of such Any person who on becoming an officer or employee of the Treasury Department requested that his name be stricken (res the roll and surrendered his enrollment card to the Committee for cancellation and whose employment with the Department has been or shall be terminated in good standing shall be entitled upon his written request to have his name restored to the roll and his enrollment card returned to his. (Signed) H. Morgenthau, Jr. Secretary of the Treasury 134 FEDERAL RESERVE BANK of NEW YORK May 3, 1945 CONFIDENTIAL Dear Mr. Secretary: Attention: Mr. H. D. White I An enclosing our compilation for the week ended April 25, 1945, analyzing dollar payments and receipts in official British, French, Canadian, and Australian accounts at the Federal Reserve Bank of New York. Very truly yours, H. L. Sanford, Assistant Vice President. The Honorable Henry Morgenthau, Jr.. Secretary of the Treasury, Washington 25, D. C. Enclosures 2 135 TREASURY DEPARTMENT OFFICE OF THE SECRETARY May 4, 1945 CONFIDENTIAL Received this date from the Federal Reserve Bank of New York, for the confidential information of the Secretary of the Treasury, compilation for the week ended April 25, 1945, aboving dollar disbursements out of the British Empire and French accounts at the Federal Reserve Bank of New York and the means by which these expenditures were financed. Strictly (In Millions of Dollars) Reports and Analysis Division Confidential Week Ended April 25. 1945 ANALYSIS OF CANADIAN AND AUSTRALIAN ACCOUNTS - 525.8 Fourth 723.6 FLESH 849.3 1.0 306.4 504.7 4277 20.9 38.7 460.4 246.2 3.4 123.9 525.5 462.0 566.3 198.6 2.7 723.6 958.8 47.1 170.4 848.3 958.5 38.3 61.4 1944 February Jarch 10.0 3.9 DebitsCredit 36.1 30.0 1.2 62.9 17.2 4.9 18.3 9.0 95.0 5.0 16.7 55.5 57.4 741.3 235.2 197.0 155.1 49.81.112.2 41.91 200.4 859.0 283.3 298.6 253.0 45.6 287.7 1.2 ....... 7.2 7.3 J-F << 1.0 BE THE 41.6 17.20 29-4 M (04) 56.5 - - () Sales 27.3 22.2 50.3 31.3 62.2 23.5 AN 27.4 200.4 287.7 0.4 10.9 A-2 1975 DI 91.6 2.9 - 1945 $2.2 Debits 31.2 () or Dear (-) Other 107.2 : MA AR 1.6 DE October 34.4 101.7 Gold 10. 88.5 360.0 T 24-7 September 32.4 50.4 0.1 Credits Total It Third 0.3 A/G A/C - 450.4 Sales Other - Second 16.6 For French For Own Gold British Total of - 323.0 Total Credit Docr. (-) Other Net Iner. Proceeds to official (*) or of Others Debite Net Incr British.A/C - First w Transfers from official . War Years (a) Total Debite Transfers in PERIOD Official British CREDITS D.E. FOR DITS Proceeds to COMMONWEAL TH DMIN OF MIN DATA and Australian Government) GROUND (and Canadian Government) OF HANK 27.4 5.6 5.6 18 21.6 X 3% April SHOP August Wook Ended April 11,1945 14.5 4.2 17.0 6.9 1.0 0.6 09 +0.2 0.1. 0.1 DF 0.4 0.6 0.2 0.1 0.2 *0.1 THE APPLE THIS Average Wookly expenditures for 6.2 million. First year of war 8.9 million. 10.1 million. Second year of MILF Third year of VAP Fourth year of war 13.9 million. 16.1 million. Pirth your of war Sixth your of us 1.0 126.6 (through April 25. 1945) 7.8 million. (a) For monthly breakdoma 500 tabulations prior tos April 23, 1941; October 8, 1941; October 14. 1942: September 29, 1943; September 6, 1944. (b) Reflects changes in all dollar holdings payable on demand or naturing in one year. (c) Includes & 3.2 million deposited by War Supplies, Ltd. and 4.5 million received from New York accounts of Gawaftan chartered banks. (d) Reflects net change on all dollar holdings payable on deeard or maturing in one year . April 4, 1945 10.4 10. and also includes $10.0 million transferred from official French Account in this carket. MICROFILM ROLL NO Strictly ASALTSIS OF DRIVISH AND FRENCH ACCOUNTS (In Hillions of Dollars) BANK OF ENGLAND (BRITISH (DOVERYMENT) Other Total Crudita 1,828.3 1,356.1 2,189.8 1,193.7 21.8 Pirst 1,793.3 05.6 20.9 Debits 1,166.7 Second 2,203.0 1.235.6 1,792.2 3.6 402.4 904.8 7.1 223.1 1,361.5 764.0 312.7 170.4 280.9 1,072.3 1,197.7 300.4 61.4 835.9 1,369.6 151.0 19.9 Third Fourth Fifth Gold - official surge BANK OF FRANCE (CAISSE CERTIFICATE (h) Process of Transfers (org)cial) office. Net food Other Credits (a) 32.0 W 416.2 274.0 16.7 705.4 5.9 0.5 - Expendi- Confidential 57.4 1,276.8 155.1 916.7 253.0 1,116.6 1.0 55.5 or Doer.( Total in Funds Debit (d). (e) Net Incr. (*) Total Credits or Dear. (-) in Funda (d) (o) 35.05.0 13.2 38.9 0.8 30.1 125.9 18.5 4.4 14.7 308.3 10.3 1.0 9. 56% 6.5 50.2 27.4 6.2 21.2 171.9 (n 1,095.310 299.0 - War Years (2) Total Debita CREDIT Transfire to April 25, 1945 + DETITE Dov's PERIOD Book Ended . MICROSTAT PRECISION 1944 November December 7.4 74. 56.5 54% . - 5.9 & 30 BOW 80.7 99.5 - 50. 1273 I.O 1.0 - 59.7 94.5 - mater - September 73.2 47 1.6 1945 FORM March 148.9 99.2 18.9 31.5 54.3 are CA New SL.2 94.2 12.7 April 2.2 1.9 Any June July August Week Ended 16.0 4.7 April 11, 1945 April 18, 1945 April 25, 1945 21. 8.8 IVE 5.0 R. 6.2 9.6 1.2 - 9.0 A - 15.8 1.1 6.9 7.8 Average Bookly Expenditure Since outbreak of War France Srulland England England through June 19 1941 10. 6 million through June 19,1940) 227.6 million through June 20.1940 to March 12. 1941 554.9 million since March 12, 1941 21.7 million 8.0 6.5 13.2 24.9 8.0 236 O. 0.3 20.3 0.1 20.0 O.F 0.2 1.8 6.300-287 ON 0.1 O.3 - April 4. 1945 See attached sheet for footnotes, Reports and Analysis Division (a) Includes forofaccount of Dritish Ministry of Supply Menion, British Supply Doors, Aristry of Supply Timber Control,payments and Ministry Shipping. (b) Estimated figures based on transform from the New York Agency of the Bank of Montreal, which apparently represent the proceeds of afficial British sales of American securities, including those effected through direct negotiation. In addition to the official selling, substantial liquidation or accurities for private British account occurred, particularly during the early southn of the war, althouch the receipt of the proceeds at this Bank cannot be identified with any accuracy. Accounting to data supplied by the British Treasury and released by Decretary Morgenthau, total official and private Uritiah liquidation of our securities through December, 1940 anounted to $334 million. (e) Includes about $85 million received during October, 1939 from the accounte of Critish authorised bank with New York banks, prosumably reflecting the requisitioning of privas dollar balances. ouer large transfers from ruch accounts ginco October, 1939 apparently receipts. See (k) represent Below. current sequivitions of proceeds of exporte free the interling area and other accruing dollar (d) fleeta not change in all dollar holdings payable on donand or naturine in GENT your. (o) For linsaldown by types of debite and credito DOB tabulations prior to Munch 30, 1943. (n) Adjusted to © fininate the effect of #20 million paid out on June 26, 1940 AND returned the following day. (e) "For monthly breakdom SOO prior to Acril 23, 1941 October October 14, 19421 September 29, 194.3g September 6, 1944. (h) Transactions for Account of Caissa Central A La France Included for first Line in work ended Ducembur 6, 1944. (1) Includes exports. S 4.7 million apparently representing current htal accumulated dollar pinoccoids of sterling area services and morehandise 2" D (a) Includes payments for account of British Ministry of Supply itlesion, Dritish Supply Board, Ministry of Supply Timber Control, and Ministry of Shipping. (b) Estimated figures based on transform from the Now York Agency of the Bank of Montroal, which apparently represent the proceeds of official British sales of American securities, including those effected through direct negotiation, In addition to the official selling, substantial liquidation of securition for private British account occurred, particularly during the early months of the war, although the receipt of the proceeds at this Bank earnet be identifies with any accuracy. According to data supplied by the British Treasury and released to Secretary Margenthau, total official and private Dritish liquidation of our securition through December, 1940 amounted to 8334 million. (e) Includes about 585 million received during October, 1939 from the accounte of British authorized banks with New York Thanks, presunably reflecting the requisitioning of privato dollar balances. Other large transfers from such accounts since October, 1939 apparently represent current acquisitions of proceeds of exporte from the sterling área and other accruing dollar receipts. See (k) below. (d) Reflects not change in all dollar holdings payable OTH- demand or naturing in one year. (e) For breakdown by types of dobits and credito DOG tabulations prior to March 10, 1943. (n) Asjusted to olindnate the effect of 20 million paid out on June 26, 1940 and returned the following.day. (g) For monthly breakdom see tabulations prior to April 23, 1941: October e, 1941; October 14, 1942: September 29, 1943; September 6, 1944. (h) Transactions for account of Caissa Central do TA-Frence included for first time in MOOK ended December 6, 1944. (1) Includes 14.7 million apparently representing cirruit and accumulated dollar proceeds of sterling APID services and morehandise exports. PRECISION TRADE MARK MICROSTAT) MICROFILM ROLL NO 139 May 14 - Checked with Coe and he is meeting with Col. Towson this afternoon and will report to the Secretary on the eeting. - 141 w-671 PLAIN May 3, 1945 Paris Mr. Coe Dated May 3, 1945 Secretary Morgenthau Rec'd 3:03 p.m., 5th Secretary of State Just what have you in mind for Col. Towaon? I understood you to say that you were thinking of sending him to the Philippines. understand he would like to go to South America. Washington 1 Ambassador Braden is coming in to tell me what he wants from us and as you know 1 sugges ted sometime age that we send some people to Argentina to check Into enemy funds. Would Col. Towson be useful in this field? 2304, Third. FOR MOSES LEAVITT AMERICAN JOINT DISTRIBUTION COMMITTEE FROM JOBERH SCHMARTZ. "Apply for license transfer immediately five million Belgian france to Alfred Goldechmidt Brussels for constructive loans. Approximately eight hundred interness Yesterbork were liberated and at suggestion military we authorised Dutch comittee distribute ten thousand dollars as pocket money for urgent immediate needs. Transfer being arranged from Selgium through cooperation SHAKY and Belgian authorities. Please remit immediately to Belgian consittee ten thousand dollars in reimbursement. Alfred Ooldschmidt should be advised of all appropriations as 6000 as authorised order permit his borrow from banks when necessary basis your authorisation. CAFFEET EDA 143 142 DSH-77 Steekhols This telegram must be paraphrased before being Dated May 3, 1945 communicated to anyone other than a Government PLAIN OBN-557 Rec'd 11:59 D.N. Agency. (RESTRICTED) Lisbon Dated May 3, 1945 Rec'd 10.24 a.m., 5th. Secretary of State Washington 1667, May 3, 8 p.m. Secretary of State, Report below received April 30 from Amoross repre- Washington. sentative, Whisler who visited Halmo in order to Invests- 572, Third WORK from Revensbrach Concentration Camp with small number of man from Neuengammen and other concentration campa released and evacuated to Sweden via Denmark gate condition of 7,000 refugees, majority of whom are WRB 407 JDC 235 FOR LEAVITY FROM THORT Resnik advises be requested military permission for Brook and Rice enter Italy. Jacob Trobe en route through intervention of Count Bernadotte, head of Swedish Red Cross expedition (Legation's 14121, April 17, 2 p.m.). Refugees were transported from campa by trucks, buses and ambulances to Copenhagen and with help of Danish led Cross placed on ferries. Paris from Cairo for assignment. Plaut arrived of total 7,000 refugees, an additional 15,000 of which are expected dependent on Swedish Red Paris. Cross ability to continue transportation, is as follows, BARUCH WF 2,000 Dwedish Germans or German Seedes; 1,000 Poles, - and womans 800 French womens 20 British, 29 Butch wooding 59 Belgiana 7 women claiming American citisenships remainder Danish and Norwegian - and women. Following are claimants to American citizenship Mrs. Summer W. Jackson, last address 11 Avenue Fooh, Paris (16), wife of Dr. Summer W. Jackson who was head of Acerican Hospital, Paris. Mrs. Max M. Dixon, last address, 1 - de General, Largesu, Paris, sister of Frank M. Dixon, former governor of Alabama. lite. Cabrial Powell Trits, last addresses, 22 Rue Riffault, Partiers, France and 33 Rue Madam, Paris (6). Mrs. Klate Raguaya (aged 22) last lived in Home but cannot remember street address; has two brothers in American May. Page 3 #1667. May 3. 8 p.m., from Stockhols Page 2- /1667, May 3, a P.M., from Stockhola Mrs. Oliver who was in hospital and could not be Three, Danish Red Cross vehicles are now using the Swedish fine plus the Red Gross. Mrs. Anna Bolyoe, last address 108 atalys, Budapeat. the Swedish flag. interviewed for further information. Foregoing women extremely nervous and underweight but responding to care and treatment. Mrs. Oliver and Mrs. Jackson are hospitalised for exhaustion and draining ears and ulcerated sores repectively. Temporary clothing issued by Swedes to replace their filthy rags which were burned and their ONDERS given necessary baths and disinfected. None of refugees possessed identity cards or papers for establishing citizenship claim. Appropriate action this purpose undertaken by American Consul, Malmo. Citizenship of 4 WORKS appears doubtful. Necessary Four. It is expected that the Gereans will also use Five. German military care, when air attack seems instinent, often intermingle with Red Cross convays to seek protection. In one case three such vehicles were singled out and destroyed by sharp shooting Allied pilote without 8 Mas Berthe Madalaine Da Mont, last address Barlin where she had lived for several years. 145 Two. Danish patriots have advised Allied persons of this fact. 144 damage to Red Cross vehicles. Six. The attacks between faberts and Vistar now appear to have takes place at night. Thus the planes could have been unsure of their targets and the persons under attack could not have Identified the planes. The foregoing apperently provides considerable justi- fication for Allied pilots to suspect these conveys of being actually Germane is information to contact Delatives, friends through Accreas channels and to secure funds obtained. Small articles of confort such as cigarettes, toilet articles, candy and cakes as well as fifty Swedish crowns were distributed 9 women immediately with additional articles to be shipped from Stockhola to supplement basic requirements of clothing and food donated by Seedes. Swedish Aray Captain attached to expedition is returnint to Fadborg and has promised to obtain evidence free competent military observers and prepare report to be filed with Swedish Legation, Copenhages free thence to be forwarded to the American Minister, Bookhola Following details concerning life at cos- Staff of Clinna Commission of Swedish Government in charge of refugees is being assisted by hundreds of volunteers from various organizations in city of Halmo, All schoble are closed and are being turned into temporary hospitals in order to supplement overcrowded hospitals. Refugees given three seals daily with special diets provided for sick and undernourished. Volunteers act orderline to aid nurses and doctors and extra supplies are being sent from all over Sweden. Smades are kindly and sympathetic and have done excellent job of organisation. Malmo is serving as quarantine and receiving center. then patients are strong enough they will be moved to other as campa. firmed by reports of American, British French and Polish refugees. Roll was called at three o'clock every morning and the women were compelled to stand for two hours is all weather. Clothing consisted of only this dress without underwear. Breakfast consisted of coffee; lunch and dinner were soup. One kilo of bread was elletted for eight persons per day. Working day twelve hours duration consisted either of building roads, digging ditches, construction work or making condensors is Siemens factory. Concerning alleged attacks by Illied aircraft, reports have been contradictory and no military personnel or refugees witnessing such have arrived. (Reference Legation's 1559, April 26, 6 p.m.) Following facts are corroborated by many persons. One. German vehicles transporting troops and supplies have been using both the Red Cross and the Danish flag for protection. Medical care redimentary, practically no medicines available. No sanitary measures were taken. AS certain periods to relieve overcrowded hospital, patients were arbitratily selected without regard for their condition and were taken out to be shot, gassed or cremated. Their ashes vare used for fertilisers. Punishments ranged free suspension of bread rations, standing on German village - PLAIN 147 146 Born Page 4 #1667. May 3. . P.S. free Stockhola Dated May 3. 1945 street corners to be jeared at by civilians, to head shavings, tratings and solitary confinement. According Rec'd 1:52 ... 4th to refugees, only persons in best physical condition released from Havensbruck. Does ore state average patient coming to then was at half her normal weight. Devidently those retaining in worse condition than evacuees. Secretary of State, Report being forwarded by peach. Washington International lied Cross ships MAGDALEYA and LILLID 2599, Third, MATTHIKSSES left Luebeck April 30 with 1,000 a refugees WES FROM HOULILLAND. who will be unleaded at Malmo. Please deliver fellevian from Stermbuch to Vand JOHNSON DJ Mahatsale Emergency NTC. VKB "Ashkemasy cables resistance received but distribution prevented by Avenbach until year specific instructions are received. Flush rabbie and students are financially completely exhausted." 630 KAMRISON VKG 149 PLAIN 148 O Lisbea Dated May 3, 1948 Rec'4 9:53 P.S. PLAIN Lisben Secretary of State Dated May 3. 1945 Washington Rec'd 9:49 p.a. 960, Third Secretary of State VRR 406 JDC 234 FOR LEAVITY FROM THOME Washington Further our 229. 959. Third Fareda paid British General peunde storling 6783. - 405 JUC 233 FOR LEAVITT FROM THORK Please remit $25,000. If Treasury license obtainable Janeboon arrived Athess April twenty-sixth: permitting payment is escules free here would need Geldetein arrived Rame April thirtieth. escudee 576,888. BARUCE BARUCE O VTD WTD Leader Dated May 3. 1945 150 5I Steckhols Rec'd 6:30 P.M. Dated May 3. 1945 Secretary of State Washington Rec'd 9:42 p.a. U.S. USGENT Secretary of State, 4475 May 3, 5 p.a. FOR O'INTER FROM NAME Washington Reference VRS Nee. 56 and 57. 1669. May 3. 9 p.m. Pelish group here advises that total of $400,000 remitted to them by United States laber groups of which FOR DEPARTMENT AND VRS. 450,000 was sent to Paland November 1944. Found storling equivalent of balance less charges for conversion free dellare into pounds is es deposit is banks is Lenden. Included is above mentioned figure are two remittances of $75,000 one of which was sent directly to Pelish group informed that approximately 3000 wears have new arrived bank to be tyrned ever to Feles only after I have approved. is Syedan free the concentration case at Revensbruck, and 10 under their central but other is held by Leader Pelish trustees here have asked about possibility of using funds for relief of Pelish displaced persons is Allied could not (repeat not) be dear under terms of presently outstanding license. They have advised me that their suggestion has been made to group is United States supplying funds and that such is presently being considered by letter. Supplementing our 1547. Amell 36. 8 n.s., we are of which number about 1200 are invoices. We are also informed that approximately 3000 additional years free have reached Denmark and are expected is Sweden by this week and, Approximately fifty Nervegian Jews free . concentre- Instauch as the Felish groups is Leader de not appear to have any effective means of transferring the funds is question to Paland for relief purposes, and since funds cannot new be used for purposes originally intended, the board may care to ask the dener groups to request the ties camp is Nervey arrived today. JOHNSON trustees of Pelish relief frants to return the above mentioned balances to the United States. After such funds have been received is the United States consideration could be given to further disposition or use for relief purposes is Palant at . exbeequent date. As the beard is aware free ag previous reports I continually urged trustees to use funds is question until 11 became apparent that they were unable to de so. Delay is obtaining information was due to absence free Lender of person meet familier with - made of above-mentioned funds. Please consult dener croups and advise urgently what disposition 10 to be made of the funds since 1 intend to leave for Bara shortly. WKB VINANT LMS 152 PARAPHRASE OF TELEGRAN SENT Secretary of State, Washington FROM: American Lendes TO: May 3. 1945 DATED: NUMBER: 3491 SECRET The felleving is for the Antesander: This Government is ready to contribute . total of $1,800,000 at this time toward the 1945 operational and administrative expenses of the Inter governmental Committee on Refugees and you are authorised to .. inform the IGC. One thousand sise hundred and forty four pounds of this total amount comprises the contribution of the U. s. Government toward the 1945 IGC administrative expenses and the remainder comprises the extribution of this Government toward the Committee's operational expenses at present. You are authorised to inform the Committee that we herewith approve the total administrative expenses for 1945 of the Committee - namely, 14,000 pounds (of which 1944 pounds is the share of this country. Tea are referred to Zabasay's message No. 8362 dated October 5. 1944. In addition, yes are authorised to inferse the Committee that Committee's operational expenses for this year - to $3,000,000 are approved by this Government, plus such unspect balance of operational funds for last year .. are still available to the Committee's 1948 operational expenses, pending further advice. with reference to your No. 20343 dated January 12, 1945, and your A-159 of February 17. 1945, you are also requested to inform the Committee this Government authorizes the ICC to spend I've hundred thousand pounds is Periugal and Spain, sixty sine thousand results is Belgium and three hundred and fifty thousand pounds in France during the current year. As .... as we are informed by the Cemmittee with regard to means of payment, the total amount of $1,500,000 will be paid. The following is for year information only. The contribution referred to above will make 11 possible for the Committee to as ahead for the present with operations previously pleased, 11 is anticipated The Department is new considering the inclusion of as estimate of the further contributions of the U. S. Government to the Cemmittee for the period to June 30, 1945 (based upon the talks Mr. Harrison has had with fir Herbert Emergen in this Bennection) is the 1946 deficiency bill to be presented to Congress shortly. VIB:GLV: Paraphrese: DC/L:GPM 5-9-45 GRIN (Acting) s DPRECISION TRADE MARK MICROSTAT) MICROFILM ROLL NO 154 5/14 -- 00 given to Mr. Coe for Col. McCarthy May 4, 1945 9:00 S.S. REPARATIONS Present: Mr. D. it. Bell Lieutenant Bancroft Colonel Brownell Mr. Bard Mr. Cox Colonel Chandler Mr. Clayton Mr. Coe Mr. DuBois Mr. Downey Mr. Desprea Mr. Fowler Mr. Glasser General Hilldring Mr. Lovett Mr. Lubin Mr. Luthringer Colonel McCarthy Mr. Pauley Commander Richardson Mr. Riddleberger 153 10. CLAYTON: Nov, inasmuch as we have previously to read document from beginning to end, I should now like this read it and pause at each paragraph so that If anyone has anything to suggest about a paragraph they do so. Otherwise, we'll pass on. (heading) "1. It was agreed at the Yalta Conference her to Germany must pay in kind for the losses caused by that Allied Nations in the course of the war. The primary the of the Reparation Commission should be the formulation purpose general program for the exaction of substantial reparation of and a the establishment of the policies under which this program is to be implemented. it is and has been fundamental United States policy Germany's "2. WBT potential be destroyed, and its resurgence of that as far as possible be prevented, by removal or destruction German plants, equipment and other property. While cooperating with the other powers in implementing basic purposes of the Yalta Agreement, the U.S. represents- the the tive will bear in mind that whatever plan is formulated by Reparation Commission (hereinafter referred to as the ReparaPlan) should be in conformity with the economic and security tion objectives of this country with respect to Germany. The position of the United States on the various issues involved in this respect is summarized in the following paragraphs. H.M.JR: I have to leave at eleven o' clock. HIL CLAYTON: Mr. Secretary, I suggest we pick up the reparations document first and go over that new draft which Includes the changes agreed upon yesterday and see if we can reach an agreement on that and get It out of the way. I believe - can get through the whole business by then. H.M.JH: 1 don't think it's fair for Mr. Fowler to change his position. I couldn't find him. MR. FORLER: I like to be a novable target, Mr. Secretary. You don't like to shoot birds on the ground 1 know. H.M.JR: I do if I'm hungry. "3. In determining the size and character of reparation accordance with points a and b of paragraph 2 of the Reparation in Protocol and the allocation thereof among the various claimant nations the following principles are advocated by this Government: "n. The Reparation Plan should assist in the elimination of Industrial capacity in Germany considered to be dangerous to the security of the United Nations. "b. The Reparation Plan should aid in strengthening developing on a sound basis the industries and trade of the devastated non-ememy countries of Europe and of and 156 155 other United Nations, and in raising the living standards of these countries. "c. The reparation burden should be distributed so far as practicable 80 as to impose equality of sacrifice upon, and result in an equal general standard of living for the Gernan populations of each of the zones under the control of the respective occupying nations. in "d. This Government opposes any reparation plan based upon the assumption that the United States or any other country will finance any reconstruction in Germany or reparation by Germany. "e. The Reparation Plan should not maintain or foster dependence of other countries upon the German economy. "f. The Reparation Plan should not be of such a nature as to promote or require the building up of German economic capacity. "c. To the maximum extent possible, reparations should be taken from the national wealth of Germany existing at the time of collanse, with primary emphasis upon the reavval of industrial machinery equipment and plants, particularly the shipbuilding, etallurgical, chemical industries (including all industries producing oil and oil products, synthetic nitrogen and synthetic rubber), ships, rolling stock, patents, copyrights, and machine tool producing electrical machinery, and German foreign exchange assets including investments abroad. Capacity for the production of component parts that enter into the production of the industries noted above should also be eligible for removal. Reparation in kind should not include arms, ammunition, and implements of war. (This Government favors the inclusion of German ocean-going merchant tonnage in the shipping pool until the and of the ear against Japan and its division on some fair basis thereafter, and the negotiations with other governments are in progress on this subject.) "h. To the extent that for political reasons that reparations be collected in the form of deliveries it may become necessary in the negotiations to agree of goods from current production over a period of years, such goods should be of such a nature and in such amounts as not to require the maintenance of the German war potential or the continued dependence of other countries on Germany after reparations cease. Accordingly, recurring reparations, over a period of years, should be: "(1) AS small as possible in relation to the reparations to be paid in the form of industrial plants and equipment; and "(2) Primarily in the form of ran materials and natural resources, and to the smallest extent possible In the form of manufactured products. "1. The removal of plants and equipment shall take place regardless of the fact that they are owned in whole or in part, directly or indirectly, by United National nationals. where plants or equipment which are owned in whole or in part by & United Nation national are to be so removed arrangements shall be made, if practicable and desired by the government of such national, for the owner to retain his interest in such plant and equipment after removal. If not practicable or so desired, Germany shall furnish to the government of such national adequate reparation to cover the interest of such national. "j. It will be inevitable that the German standard of living will be adversely affected by the carrying out of the Reparation Plan. However, the reparation exactions should be held within such limits as to leave the German people with sufficient means to provide a minimum subsistence standard of living without sustained outside relief; but under no condition should this limitation operate to require the retention in Germany of means to support basic living standards on a higher level than that existing in any one of the neighboring United Nations. ( 157 158 -5"k. The separation Plan should not put the United States in n position where it will have to assume responsibility for sustained relief to the German people. MR. BELL: Does labor come under one or two under hi labor. MR. CLAYTON: Oh, we have a separate document on MR. BELL: It doesn't come in? 10t. LUBIN: First & and b of the heparation Plan which deals with moving of plants. No. BELL: Recurring reparations over a period "a. Compulsory labor service should be required only from war criminals and individuals definitely determined by appropriate process to be members of the Gestapo, the S.S., the Sicherheitadienst der S.S., leaders of the S. A., or leading collaborators, supporters of and participants In the Nazi party or administration. "c. Agreement should be sought along the following lines with regard to compulsory labor services: "(1) Except for persons tried for specific crimes, and convicted and sentenced to lifetime punishment, the period of compulsory labor service should be limited to a definite span of years. should be one and two. MR. LUBIN: THE are still talking about a and b, moving of plants and so on. MR. CLAYTON: Yes. (Reading) "4. It was agreed at Yalta that peparation in kind is to be exacted from Germany, partly through the use of Gernan labor'. In negotiations on labor peparation with the other powers in the separation Commission, the United States representative will be guided by the following principles: "a. The United States will not accept reparation in the form of labor services. "b. Both compulsory and voluntary labor services furnished as reparation should be used only for reconstruction and repair of war damage, and not for current production operations. "(2) The standard of living and conditions of employment should conform to humane standards. "(3) The Reparation Commission or Agency should periodically survey the living and working conditions of compulsory workers and the uses made of their services. "f. Apart from persons deserving of punishment as defined above, German labor for reparations should be recruited only on a voluntary basis. "g. The net value of the services of both types of labor shall be included as reparations. MR. LIBIN: In view of the fact that me are talking about labor services outside of Germany only here, because our Army will have the right to compel any German within Germany to do such, shouldn't we.at this point say, "Both compulsory and voluntary labor services furnished as reparation should be used outside of Germany only for reconstruction! MR. CLAYTON: I am glad you raised that point. This Government is strongly of the view that persons other than those specified in a below as deserving of punishment should not be called upon to perform compulsory labor service outside Germany. MR. LIBBIN: We haven't used the words "outside of Germany. 160 159 -8MR. CLAYTON: Yes, 1 think that's right. If there is no objection we will insert it. MR. LUBIN: After "used" put the words "outside of Germany." MR. CLAYTON: Since you have raised the point about that, I would like to raise one and just question whether we would want to restrict the use of voluntary labor only to reconstruction and repair of damage. Certainly I think we should compulsory labor, but we want to restrict-do we want to restrict the use of voluntary labor so far as that? MR. LUBIN: Insofar as this labor in used only as reparations, you want to protect yourself against some country getting free labor to manufacture things to export. MR. LOVETT: I think that would be an important point. MR. LUBIN: Voluntary labor can still go into Russia or France if our Army will let it go and work for the French first under conditions like any other Frenchman, but if this labor is going to be used as reparations we ought to restrict It. MR. CLAYTON: Suppose the French need German labor to work in their coal mines which they might very well do? MR. LUBIN: They want seventy thousand of them. MR. CLAYTON: If they get voluntary labor--I mean in either case, voluntary or compulsory, this would prohibit their use. H.M.JR: What do you mean by voluntary labor? MR. CLAYTON: A man goes by his own free will because the terms or conditions are attractive to him. MR. LUBIN: The French will raise that point. They do want labor for their coal mines. IR. CLAYTON: I think this is a little too restrictive. MR. LUBIN: On the other hand, you want some restriction to prohibit the use of reparations labor in making things that might enter world markets in competition with free labor. MR. FOWLER: If you insert the word "primarily" for "only" to read, "primarily for reconstruction, repair, and war damage," and then get some time element in there on the current production so that it would permit their use for current production of an item like coal for a couple of years where there is a real critical shortage involved, but wouldn't allow it to become a part of a production cycle over a long period of time in the typical manufactured goods, I think that would do it. MR. LUBIN: What if you out this, "provided, however, that the Reparation Commission shall permit the use of such labor under special circumstances as for current production operations? MR. LOVETT: Can't we say "not for current production items for export purposes?" MR. CLAYTON: Say, "not for current production in export industries. MR. LOVETT: The industry might make stuff. MR. DESPRES: For export. MR. PAULEY: This is very hard to interpret which of the labor is used for domestic and which is used for foreign. COL. BROWNELL: Wouldn't you be covered if you permitted this labor to be used in addition to the purposes stated, for the purposes of preventing starvation and relieving stress? MR. FORLER: If you say, "except for coal and food," you will pretty nearly have it. COL. BROWNELL: That would be about the same as preventing starvation and disease. 162 10 MR. FOWLER: If you said "emergency fuel and food," that would cover it. You might not want to really restrict it to domestic consumption because the whole fuel and food COL. CHANDLER: For recurring reparations. MR. LOVETT: That wouldn't do it because they might make a practice of it. MR. CLAYTON: what about "except for fuel and food?" MR. FOWLER: That would pretty nearly do it. MR. CLAYTON: not for current production operations except for fuel and food. H.M.JR: What about clothing? MR. CLAYTON: That's the thing that goes right into the world market. That's highly competitive textiles. 0 MR. DUBOIS: Suppose you just said "primarily for reconstruction and primarily-MR. LOVETT: You drop the protection which we ought to have against slave labor produced items in the world market, and American labor unions would react rather sharply to that. MR. FOWLER: The labor unions in all of these liberated areas after the last war raised a lot of Cain about this type of thing and it is anticipated that they will again if the labor is brought in for current production. MR. LOVETT: They certainly would here, I should think, If we had unemployment here and slave labor were building factories, and so forth abroad. GEN. HILLDRING: They will prove that is being done anyway, because if they use this labor on the farm and put the form worker in the factory, we are up against the same situation in the next few years is going to be in an artificial market anyway. MR. DESPRES: The case is very much stronger with respect to compulsory labor than with respect to voluntary labor because in the case of voluntary labor one may safely assume, I think, that If any such labor is used by private employers in, say France, that if the Germans are required to pay the wage of such labor, the French private employer will have to pay the French Government instead of paying the workers. Now, the French trade unions, and so forth, have an interest in not having a supply of imported labor, That drives down wares in France, so I think that from the standpoint of the private employer in France this isn't going to be 8 dumping proposition at all. I don't think they will be given a chance to get the labor on such very attractive terms as to make it & treat. In the case of compulsory labor It's different because they may not get payed ped (Mr. Bard enters the conference.) MR. LOVETT: There is a very thin line between compulsory and voluntary labor. I don't think we ought to kid ourselves a bit. When a fellow says you get no ration card, you work or else, the query is is that conpulsory or voluntary? Mr. CLAYTON: I think that's right. "Both compulsory and voluntary labor services should be used outside of Germany only for reconstruction and repair of mar damage, and not for current operations, except for emergency fuel and food. Is that all right? HR. LUBIN: I don't know why you want the word "emergency," because you may want these fellows to work for the French to produce fuel or food. H.M.JR: I think the wording is too restrictive. thing. MR. PAULEY: Say "for emergency fuel and food for domestic consumption. 164 163 - 11 - 0 12 "9. The United States will expect to assert a claim MR. DIBIN: Do you want to have the word "and" before "not?" the CLAYTON: Then it would read, "Both consulary and voluntary labor services furnished as peparation should be used outside of Germany for reconstruction and repair of war damage, and not for current production operations, except for fuel and food. (Reading) "5. The first charge on all approved or of existing plant and equipment) a exports for reparation otherwise shall (other be than sun renovals necessary to pay for approved imports. Accordingly, to the extent for reparations before the Reparation Commission in accordance with the principles of the Yalta Protocol in order to preserve its rights to its proper share of payment for losses caused to it by Germany in the course of the war. Pending the furnishing of a more exact claim at a later date the United States representative shall reserve the right to claim delivery of reparations in a total amount to be determined. The United to desire receivefeasible as muchofasitsshare ofreparations Statesinwill the form of foreign exchange assets in- cluding German investments abroad. MR. LUBIN: That is changed from the copy we had yesterday. Yesterday there was a blank there in the sums. necessary to pay for such minimum German imports as may MN. DESPRES: I thought that blank was unlikely to be determined to be essential, recipient countries should be required to pay for German exports, except removals of existing plant and equipment. Imports for which payment will be sought shall include supplies Innorted by the occupying forces for displaced persons and German civilians. paper. "6. Without the approval of an appropriate Allied body there shall be no re-export to third countries of that is (Reading) goods received on reparation account. "Y In order to prevent the treatment SS war booty or as reimbursement for occupation costs of exports from Germany which should properly be considered as reparations deliveries, agreement should be sought on the scope of war booty and reimbursement for occupation costs. Agreement should also be sought or the scope of restitution in relation to reparation. "8. The governments participating in the Reparation Commission will retain control over the disposition of German property located within their respective borders. These nations will seek agreement with other countries in which German assets are located designed to eliminate continued German control of such assets and prevent their eventual return to Germans. be filled in today and that it looked more like 8 finished document to institute these words. Mr. FOWLER: It couldn't be a supplement to this MR. CLAYTON: If there is no objection, we'll leave "10. As an interim program, pending the formulation of more definitive arrangements, this Government would favor formulation of an immediate program by the Reparation Commission along the following lines: "a. During the initial period following the collanse of Germany each of the four occupying powers-Great Britain, Hussia, France and the United States-may remove from itsandzone of occupation in Germany output) plants, of equipment such . nature materials (including and not in excess of current such amounts as may be determined by the Reparation Commission. It shall be our policy to press for inclusion in such an initial removal schedule the categories of plant, equipment and materials (excluding ocean-going merchant tonnage) described in paragraphs and32 of Directive the 30, 31 to the Commander in Chief of the United States Forces of Occupation regarding the Military Government of Germany' and In paragraph 3 g above. 166 165 13 - MR. BARD: will the Reparation Commission be sitting at the time they take over? MR. LUBIN: lie'll be there. MR. BAND: You mean you will be performing at the time that they go into these areas? (Mr. Coe enters the conference.) MR. LUBIN: Oh, I thought you meant the Control Council. MR. HARD: No, the Reparation Commission. How long will It be before they begin--before they can do anything? MR. CLAYTON: The point you are raising is there is bound to be n considerable period before the Reparation Commission will be in a position to institute even this interim program. I think we all recognize that. In the meantine there will be nothing done, I take it, about reparations. Mr. DESPRES: This might come up this morning, the reply on guidance on Just this point for the present period. MR. CLAYTON: That's coming up later. Shall we leave it then, Halph MR. HARD: Yes. MR. CLAYTON: (Reading) "b. The decision as to whether or not the renoval of particular plants, equipment or materials out of a sone in Germany is consistent with the purposes of occupation would be made by the commander of such zone, subject to the following conditions: "(1) There would be constant consultation between zone commanders. "(2) In making a decision as to removal the zone commander would be responsible for carrying out any relevant agreed policies which may be formulated from time to time by the Control Council. 14 - "(3) The Control vouncil would have an opportunity to consider any particular renoval and could veto it. "(4) Regular reports should be made to the Control Council of transfers for reparation account and the Control Council should keep appropriate Allied agencies currently informed. "c. During this initial period any one of the four occupying powers could allow, if it so desired, any other United Nation entitled to reparations in the form or removals from Germany to take out of its zone plants, equipment and materials of such a nature and not in excess of such amounts as may be determined by the Reparation Commission. Such removals would be subject to the policy and conditions specified in sub-paragraphs a and b above. "d. Records should be kent of all deliveries made on reparations account under such interim arrangements and such deliveries should be made without prejudice to the final allocation of reparation shares. The Reparation Commission should determine the principles for valuation of such deliveries. "11. The Reparation Plan should include provision for the early establishment of a reparation agency including representatives of such governments as have suffered devastation or substantial danage. This agency, after detailed study of Germany's capacity to pay and examination of claims to reparation by the various claimant nations, shall develop a the plan longset term for delivery shall forthplan a description of of thereparations. reparations This to be delivered and their physical allocation to the various claimant nations. It shall contain a time schedule indicating the rate at which deliveries are to be nade to the several governments over a stated period of years. The reparation agency should be given continuing responsi- bility for drawing up at regular intervals detailed schedules of the amounts and kinds of reparations items to be delivered and should have authority to determine the allocation of specific Items among claimant governments. 167 168 - 16 "In lieu of the establishment of the reparations agency referred to above the Reparation Plan may provide that the Reparation Commission, appropriately expanded by the addition of representatives of other claimant governments, may be continued in existence and utilized for the same purpose. "The occupation authorities should be responsible for the execution of the plan within Germany. In the execution of the plan, the Control Council should have the authority to withhold from transfer as reportions specific items the renoval of which in its judgement would reduce the available economic means below the minimum required to meet the other obligations of the occupation. After review by the Control Council and in the absence of agreement, the zone commander if be believes that any specific item should be retained within his zone may with the specific determination of his government that such Item is essential for the purpose of the occupation withhold the removal of such item. 12. DESPRES: I believe it's clear but I think we have to read it through to screen it from that standpoint. LOVETT: That part that says, "After review by the Control Council and in the absence of agreement, the sone commander If he believes that any specIfic item should be retained within his zone may with the specific determina- tion of his government that such item is essential for the purposes of the occupation withhold the renoval of such item." why not say, and while awaiting such determination? That would button it up, ...and while swaiting such determination. MR. CLAYTON: If there is no objection-10t. BELL: Where would you put that? 18. FORLER: Just at the end. "The long term plan referred to above should not be approved by the U.S. representative on the Reparation Commission or Agency until it has been submitted to and MR. CLAYTON: After "item." approved by the United States Government. MR. CLAYTON: After "occupation." "The Control Council should advise the heparation Agency (or commission) from time to time 8.8 deliveries are made. The Reparation Agency (or Commission) should keep 8 record of all such deliveries, and should place appropriate values on the respective amounts delivered. MR. LOVETT: The principle is clear; I assume that the fellow on the spot over there can withhold action pending the receipt of the answer to his inquiry from his government. That's the matter we discussed in connection-- MR. POWLER: If that isn't clear we ought to definitely make It clear. R. CLAYTON: It's clear, isn't it? NH. DuROIS: I don't think that does it. GEN. HILLDRING: I think it's better without it. Mr. LUTHRINGER: Wouldn't any other interpretation make this meaningless? MR. LOVETT: As long as there is no misunderstanding. MR. FORLER: You can say with complete assurance that it does. MR. LOVETT: Because the corresponding item in the directive to the CNC does cover it rather specifically. KR. CLATTON: The minutes here will show there is complete agreement. 170 169 0 17 MR. LUBIN: Would it be better to say, ....all types " MR. LOVETT: of plants, rather Would that be better?than that pending decision--" MR. CLAYTON: That's the third from the last. all types of industries? MR. CLAYTON: I wonder if it would because that almost takes it back to the individual plant. The "industry" is a broad classification, including all types of industries producing. MR. DUBOIS: ...the commander may withhold pending determination. 10t. LOVETT: That would, I think, remove any doubt. MR. PAULEY: That's my suggestion. MR. DUBOIS: Add in parenthesis "the commander may of course withhold pending determination--the commander may of course withhold such item pending determination. MR. CLAYTON: If there is no objection, we will do that. including all types of industries producing rubber. oil and oil products, synthetic nitrogen and synthetic MR. PAULEY: May I suggest a clarification on page two, paragraph Ex in the seventh line. It says, (including all industries producing oil and oil products-- insert the words all types of Industries producing oil and oil products-- making it a type of industry rather than total Industries. Naturally we'll have to leave some production of oil for minimum civilian requirements. MR. LOVETT: What page? May PAULEY: Page 2, paragraph C, line 7. MR. DESPRES: That was really directed to the synthetic products anyway, wasn't its MR. FORLER: I think it would be better to leave it as is and put the mord synthetic in. MR. CLAYTON: producing synthetic oil and oil products, synthetic nitrogen and synthetic rubber. MR. PAULEY: But the word "oil" here might refer to total production rather than all types, whereas it is really the type of products you are talking about. HK CLAYTON: That's right, not every plant. Mile PAILEY: It's every type of plant. MR. DuBOIS: That is the real reason for the change? 0 MR. PAULEY: As it now reads It says, "including all industries. You are speaking of up here on the removal of-MR. LUBIN: It may be certain branches of the chemical industry for instance, that produce certain basis materials for synthetic oil. Limit Take Benzol synthetic ore. it to-- which is used to make MR. DuBOIS: This makes it narrower. MR. LUBIN: ...to that part of the industry that makes the Benzol rather than the industry as a whole. MR. PAULEY: My point was that as it now reads it might be construed that you would remove all oil products of of there. the only reference to it, theany onlykind placeout where the oil It's is used. MR. LUBIN: I think we want that subject to minimum civilian requirements. MR. FOWLER: Not necessarily. We want that subject to the type of check that has been provided in the last paragraph30.and as being discussed in connection with paragraph 172 171 19 MR. DESPRES: Well, so far as the whole enumeration of industries in subparagraph E is concerned, these are designed, as I understand it, only to indicate the kinds of industrial equipment subject to removal. HR. FOWLER: That's right. MR. DESPRES: ..and not the amounts, and the paragraph on standard of living that comes later is a qualification or imposes a limitation on the amounts of removals. MR. FOLLER: Also the language at some other point which says that these removals shall be of such types and such amounts as the Reparation Commission may determine. MR. PAULEY: It's unimportant. I think me all understand the same thing. MR. CLAYTON: Suppose, Mr. Pauley, instead of putting it that WAY we say, "...all industries producing synthetic oil and oil products? MR. PAULEY: Petroleum refineries as well as-MR. CLAYTON: You may want to move refineries. across. 10k. LUBIN: Move them to the border and just ship Mr. CLAYTON: You mean the third from the last paragraph? MR. LUBIN: Yes. MR. CLAYTON: We added this: "The zone commander may, of course, withhold the removal of such item pending such determination." MR. DOWNEY: Mr. Secretary, a very small point on the last page where we talk about certain removals being capable of being prohibited if in the judgment of the Control Council the results would be to produce economic means below the minimum required to meet other obligations. I think 'obligations is a bad word because we don't want to admit any obligation toward the Germans. I would make it "purposes" or something of that kind. MR. CLAYTON: I think that's a good suggestion. If there is no objection, we substitute "purposes" for "obligations." That's on page nine. MR. DOWNEY: The second sentence. MR. CLAYTON: The sixth line from the top on page nine, substitute "purposes" for "obligations." Are there any other suggestions? MR. GLASSER On page two, Mr. Clayton. We suggest MR. DESPRES: It doesn't mean you would remove all adding the words directly or indirectly after 'finance on the third line. MR. PAULEY: That's the reason 1 suggested the any other country will finance directly or indirectly-If there is no objection me'll insert that, "directly or indirectly. refineries, it means refinery equipment--it would be the type of equipment that could be included in amounts to be determined in the light of the general principles. word type", but it's unimportant. I think we all understand it. HR. CLAYTON: I think it's pretty well understood. MR. LUBIN: How did we finally agree to word the last sentence on page nine? MR. CLAYTON: Let's see, then it would read, ...or MR. LITERINGER: Where was that? MR. CLAYTON: That's on the second page in paragraph a, the third line where it says country mill finance, and we'll insert "directly or indirectly. PECISON TRADE MICROFILM MARK ROLL NO 174 173 21 -22 0 MR. CLAYTON: We'll have to have a covering memo as we had with the other document. H.M.JR: The principals should sign It between now and MR. DOWNEY: Mr. Secretary, could you give us the final form of the end of the first paragraph on page nine? MR. CLAYTON: "The zone commander may, of course, withhold the removal of such items pending such determination." Are there any other suggestions? H.M.JR: I think it's a wonderful document, and I think everybody should be congratulated. two o'clock. MR. FOWLER: Why can't we do it right now, run it off and do it right now? go over aeno MR. CLAYTON: I suggest this: I would like to show it to Mr. Grew, and I suggest that perhaps Mr. kiddleberger to the StateIn Department and this writecan the covering off as as bedidbefore. the meantime be run is and then we can get Mr. Grew to sign it and bring it back here and we can all sign it. I would think that he ought to be able to do that in an hour, Jimmy, because it would just be a short memo. Can you do that? MR. CLAYTON: If there are no further remarks we will congratulate ourselves and call it a finished document. Mr. Fauley, is it all right with you. MR. PAULEY: Entirely. MR. RIDDLESERGER: Is there anything of substance in the memo? MR. CLAYTON: It's a transmission of the Reparations Memo to the President for his approval and for use in instructing the United States representative on the Reportion Commission. Is that right, Mr. Pauley? H.M. JR: I hope President Truman will accept it. MR. LOVETT: There is the point Mr. Pauley was going to confer with Justice Jackson on. MR. PAULEY: You can handle that any way you want to. MR. CLAYTON: I an asking if you think that would be the proper form? MR. PAULEY: Yes. MR. PAULEY: I am waiting for the completed document. MR. LOVETT: So we can approve it. MR. CLAYTON: Subject to Mr. Pauley's seeing Justice Jackson--we will run this off in the form in which It now is. It is your idea to try to give it to the President this afternoon? H.M.JR: Yes. H.M.JH: Say it again. MR. CLAYTON: A memo transmitting to the President the judgment of this committee as to the principles and policies that should govern the United States representstive on the Reparation Commission in Moscow. we are submitting the document to the President for his approval and for his use in instructing the representative. 175 176 -24- - 23 H.M. JR: I want to put at the same time somewhere in the corner--Mr. Lubin is writing out a draft which he is going to get Mr. Grew to sign. MR. BELL: Go in my office. (Mr. Riddleberger leaves the conference.) H.M.JR: I'll be back in three minutes. (The Secretary leaves the conference temporarily.) VR. CLAYTON: Now, we have the draft of the memo that was agreed on yesterday by the working group that has to do with the suggestions made by the Joint Chiefs of Staff and which, it is believed, is a memo that will be satisfactory to the Joint Chiefs of Staff. H.M. JR: Okay, we'll take it. (Indicating Attachment a) MR. CLAYTON: Fine. Does everybody approve of it? How about you, Mr. Pauley? MR. PAULEY: Yes. MR. CLAYTON: Everybody approves of it. All right. GEN. HILLDRING: I am sure 1 can sell this to the Joint Chiefs of Staff. I'll try to get the word back today. MR. LOVETT: We have been called back to an important meeting with the Secretary and of course we want to refer this in final form to him. He has not seen it. H.M.JR He hasn't seen the reparations document? MR. LOVETT: He hasn't seen the reparations agreement yet as presently changed. H.M.JR: Has he seen the Revised 1067? GEN. BILLDRING: That's agreeable to the Secretary. I am sure I can sell this to the Secretary. H.M.JR: It's all right with me. I don't want to waste any time. MR. CLAYTON We'll have the draft meno in a few minutes. MR. RIDDLEBERGER It's being typed now. MR. LOVETT: What meno? MR. CLAYTON: A meno to the President about sending the Reparation Document to him. H.N.JH: Well, we'll wait. GEN. HILLDKING: Do you want to talk about this in respect to reparations? The JCS has a cable from Eisenhower. I have a copy of it here. MR. DESPRES: I have a lot of background material. Do you want to review it? GEN. HILLDRING: You go ahead; you have the papers. MR. DESPRES: At the end of January and beginning of February I sent two cables to the Combined Chiefs indicating their present policies with respect to exports from Germany and asking for guidance of the Combined Chiefs. H.M.J. January? to cables MR. DESPRES: That ERS in January--at the end of January. The second cable nas--sell, both of them were dated January 31st. For a variety of reasons no answer has yet gone out. There is a draft reply here now which it might be appropriate read, but before reading it, since it refers to the from SHAEF, I ought to review the main points in the incoming cables. 178 177 0 26 25 They indicated that their present policy was to authorize the export from Germany of comodities required for the military needs of the Allied forces including doing about moving coal into France, for instance, and utilizing surplus food stocks he finds near the border to help Belgium and Holland, and things of that nature. Now there is an attempt in that to get him to go be prejudicial to military operations. They then pointed out that more far-reaching claims had been put forward by the French. Incidentally the Belgians had also applied beyond what he is doing with language and I am sure, I said to CCAC yesterday afternoon, that this is completely futile effort, that Eisenhower has said and he means it, that he is not going to make up any reparations decisions unless we set somebody up on pressure along the same lines, and the telegram procosed that an advisory body be established to advise SHAEP of the allocation of goods that we declared surplus that they considered surplus. The second telegram indicated that in minor cases they were returning to liberated countries goods to which the liberated countries claimed title or right even though political level to make the decisions. He is not going to say to France, 'Okay, take this out, or, "Take the box cars back to France, or, You may have a dozen locomotives. He is not going to make those decisions, so I think the present proposal that has been whipped up by the Foreign Office in the State Department won't change the existing situation at all. I can assure you that It won't. the goods did not fall within this category of military MR. COE: General, isn't-- need. Now, that's a general summary, I think, of the incoming cables. The proposed answer-GEN. HILLDRING: There is one other--let me state It little more simply, Mr. Despres. What he really says, I it. is with respect to his disease and for his is a unrest as understand responsibility Army he using facilities on Germany to satisfy them to the extent he needs to. With as to the French and Belgians and Dutch his door with other knocking respect on questions about doing and unbolting some of these facilities andunlocking other things that they now want to do behind these armies, he says, "I'll not pass on those and if you want no to pass on them, set up some interin reparations--Anglo-Amer) I ( as a such commodities as they considered essential to the basic economy of the liberated areas, the absence of which would H.M.JR: Just a second, this is quite new to me. have a suggestion to make very much in the room here. take it that General Eisenhower wants some help. Is that right? GEN. HILLDRING: Yes sir. That's not it. He says "If you want to satisfy the French claims for immediate reparations, you have got to set up somebody on an interim basis that will decide these questions before the Reparation Commission takes over, because I'll not make the decisions myself. H.M.JR: Let me make this suggestion. Now, I can see General Eisenhower's problem. Now, from the conversation that Mr. Coe had with Mr. Playfair representing the reparations outfit to decide these questions. I don't want to and will not decide them.' British the British may not be ready for a month I think the real question here is whether or not you want to set up an interim commission. Now that's a British and pending that, why wouldn't it be a good idea to send Mr. Pauley and his group right in there to advise General Eisenhower pending the time that the Reparation Committee suggestion which I understand our State Department is opposed to. So the cable that is before the CCAC now doesn't answer that question, so there isn't much point to sending back this cable unless you cover that point, unless you want to tell Eisenhower not to do the things he is now or six weeks Treasury, to have a Reparation Commission meet in Moscow, is ready to meet In Moscow? 180 179 O 28 - 27 ( GEN. HILLDRING: If Mr. Pauley and Dr. Lubin, or one MR. LOVETT: Send them to SHAEF to act as advisors of them, or a representative of them, sitting with an on this? to Englishman, sitting near SHAEF would communicate them Eisenhower, he would execute them. That's what the British would survest and Eisenhower has no objection to H.M.JR: Send Mr. Pauley and his group right in there to work with General Eisenhower pending a time that they it nor does the ar Department if it's agreeable to our will go to Moscow. They will get a lot of good experience. Government. It's a Government matter and Eisenhower has no objection to executing the decisions of such & group, but he doesn't want to make the decisions. Now, I'm just-- 1R. PAULEY: I think that it should either be us or a counterpart of our organization. Now that everybody is so beautifully agreed on all this there is no reason =hy we can't depart at any time. MR. LOVETT: It's a full-time Government matter, really. GEN. HILLDRING: Yes. H.M.JR: But if your opposite number wasn't there in Moscow, you might be doing more good there working with General Eisenhower pending--an the fact that you are there might hurry the English up to appoint somebody. MR. LUBIN: On the other hand there is the other alternative. With Eden and Molotov here we night get an agreement whereby they will agree that up to a certain volune they would not bject to the United States and Britain saying to France, "You can take certain things out of the se areas which would be credited to reparations when the job is done. H.M.JR: Well, for whatever it's worth, I am throwing it at you, Mr. Pauley. MR. PAULEY: Thank you, Mr. Secretary. MR. BARD: It would give you a lot of information and experience. H.M.JR: You would get a lot of first-hand information. GEN. HILLDRING: The only thing is Ike doesn't want to make these decisions. MR. CLAYTON: That seens to be the point that General Eisenhower--I just wondered if the matter would be resolved by having an advisor only to General Eisenhower. As I understand it, he doesn't want to make the decisions. He wants some good advice. MR. LUBIN: It really involves the Russians as well because they have a claim to some of that stuff in Germany. C MR. PAULEY: Te would have to consult the Passions in this regard. H.M.JR: It's a reverse way of doing it. It normally roos to Moscow, but if General Eisenhower is calling for assistance, I am just throwing it out as a suggestion. I think you have got to give something to General Eisenhower. MR. PAULEY: It's w personal opinion there are better places to meet than Koscow anyhow. I can't see that that Is the ideal location for this to be performed, but we are still commited. It might be that while Molotov is here that our State Department could do something about that in bringing him around. It seens to me this whole meeting should bring about some action, and we could at that time handle the temporary problem as well as the permanent problem. I am only advocating that. I can't assert inself because we are already agreed and committed to meet in Moscow. But 1 would suggest that the State Department start negotiations along that line at this time. 182 30 29 Mr. PAULEY: Is there any one here that has any objection to that course? H.M.JR: Just state it again. MR. LOVETT: He has no problem. GEN. HILLDRING: He probably has no problem. Mr. LOVETT: He has no problem whatsoever. They take everything they can. MR. DESPRES: Eisenhower will take what is surplus, but he doesn't want to say the French will have it or the Belgians. MR. PAULEY: That we change the reparations meeting, or attempt to chance it with the agreement of the Russian Government, from Hoscow to a place nearer the scene of be in order that the current on action that would satisfactory problems to General reparations Eisenhower might be handled concurrently with the permanent problems. H.M.JR: Only if it is agreeable to the Russians. we don't want to do anything to alight them. MR. PAULEY: Do you think, Mr. Clayton, it would be MR. CLAYTON: The proposal-- more desirable to set this thing up at the scene of action 30 that the temporary problems can be settled along with the permament problemsi MR. CLAYTON: I don't think there is any argument about It. I think that's very obvious, but the next question is to get the decision made at Yalta changed, which I don't think would be so easy, because obviously it gives the Russians considerable advantage to have it in Moscow where their representatives can confer daily with their I'm be Government. afraid that it would very difficult to alter that decision but I think-- Mit. PAULEY: But with the President's consent, and as the consensus of this meeting, are you agreeable to starting negotiations with the Russian Government on this? MR. CLAYTON: I would certainly recommend it If it net the approval of this committee and the approval of the President. I would recommend to the Secretary of State that we do that. MR. PAULEY: Fine. MR. CLAYTON: I think there are very concrete reasons why that change should be made particularly at this time and for these quick decisions which have to be made. 10k. PAULEY: The proposal goes to the point of recommending to the State Department that they undertake negotiations with the Russian Government to bring this about. MR. LOVETT: I doubt whether you will get away with that. MR. PAULEY: I doubt it, too. MR. LOVETT: In the process of trying it you might jeopardise this interim position you He night who in order to answer General lke's which problem. is take the one is responsible through SHAEF, the British and American Governments. The Russians don' face that problem and have 5 feeling that you would be more apt to get agreement if you could distinguish the current problem from the permanent reparations problem. Therefore, I would suggest an amendment to your program under which we propose to set up an emergency group in Germany to deal with these current problems in attempting to distinguish them from the long process of the Reparation Commission. I MR. BELL: Don't you imagine the commander of the Russian zone will have the same problem? H.M.JRI And not raise the other. I agree with you. PRECISION MICROSTATI TRADE MARK MICROFILM ROLL NO 183 184 31 32 MR. PAULEY: of course we can't ignore the Russians on the temporary thing. "Mr. Edwin Pauley and Mr. Isadore Lubin participated the formulation of this statement and have approved it. in MR. LOVETT: That's right. MR. BARD: They are ignoring us on the temporary H.M.JR: It's all right with me. thing. MR. PAULEY: There is no question in my mind on that. VR. CLAYTON: This is just on plain paper. It's a meno that Mr. Grew will sign in accordance with the MR. LOVETT: If you are able to set up the interim thing, you might have a normal basis for transferring. MR. LUBIN: The difference between our action and Russian actions is this: They are taking things Ike for form we used before and each member of the committee would sign at the bottom. I was thinking that-MR. PAULEY: So for as a minor change there, 1 would say in By case I would prefer the word "recommend It" the themselves. The are not taking for ourselves. Dutch What wants to know is do the British or French or or 0 rather than "approved it. It's up to the President to approve it. Belgians get it? In other words, we are making decisions the as to who gets it. and we may find ourselves having French BORO at us because we gave it to the Belgians and they go to the Russians and say, "What the hell. So the Russians have it easiest according to the job are MR. CLAYTON: I think that's all right. "Kr. Edwin Pauley and Mr. Isadore Lubin recomend it. have. 13. LUBIN: Recommend approval. MR. CLAYTON: May I interrupt this discussion to present this memo because Mr. Lovett has to TO in we a few minutes and so does General Hilldring, and before adjourn I think we should try to agree on this memo. MR. PAULEY: Recommend it to him for his approval. MR. CLAYTON: "And recommend that you approve it." The memo as drafted reads as follows:* May 4. 1945, It's a nemo to the President. "The Informal Policy Memo to the President. The Informal Policy Committee on Germany which has had under consideration a question of this Government's policy in respect of German reparations submits for your approval instructions which have been the drafted to guide the United States representative on Reparation Commission which will shortly convene in Committee on Germany, which has had under consideration the question of this Government's policy in respect of German retarations submits for your approval the instructions which have been drafted to muide the United States representative on the Reparation Commission which will shortly convene in Moscow. Moscow. These instructions have been drawn up to conform to the the decisions of the Crimes Conference and both to of the United States for the treatment of MR. LUBIN: "We submit it for approval." Germany general policy as embodied in the Draft Directive now also writing your approval. 0 185 - 33 MR. BELL: In other words you concur. MR. LUBIN: We recommend it's approval. MR. PAULEY: Put in the word "recommend." MR. LOVETT: Well, now, before signing any such thing we would have to refer it to the Secretary of War. MR. CLAYTON: Then I think we would have to meet again. H.M.JR: Mr. Grew will bring it to Cabinet. If you give it to me, I'11 sign it and give it back to him. MR. CLAYTON: That will cover your signature. MR. BARD: I'll be there, too, so I can sign it. MR. CLAYTON: That will cover your signature, and if you are going away, then we can--if we do all agree upon It--deliver It to the President in your absence. H.M.JR: That's right. MR. CLAYTON: Fine. MR. LUBIN: Gentlemen, I can't tell you how much I appreciate in the position 1 an in the patience you have all shown, and I have never been at a committee meeting where so much patience was shown by the Chairman particularly. MR. CLAYTON: That's something that doesn't cost anything. MR. PAULEY: I want to express my sincere appreciation. MR. CLAYTON: Thank you very much, all of you. MICROFILM RECISION ROLL NO. 186 TOP SECRET ZOP SHORKY ATTACHMENT A ANGLOSURN DRAFT - TO THE AMORICART a RAN AND BE OF THE RAVY The Joint Chief's of Staff received that the Secretary of For and the Secretary of the Navy inform the Secretary of State - follows. "In Joint Chiefs of Staff have resessidered the military implications of the proposed directive to the Communitar-in-Chief, U.S. Forces of Compation regarding the military government of Germany contained is DPOO 1. The Joint Chiefs of Staff perceive as objections to the directive from . military point of view provided the following - are rade in lieu of these combaland in the letter dated May 2, 1945. a. Delete the period at the - of the last sentence, paragraph 30 and add the following: ...except that, in your disoration, you my permit the production of symbotic rubber and oil, chairman and registration, to the alaimum extent accessary to not the parposes stated is personapha . and 5 of the directive pending action by the Joint Chief's of staff upon sush recommunication for postpossment as you my make'. be Delete the period and add the following words to the last contence of paragraph S. 'as seen as you have had an opportunity to review and determine production accessary for the purposes stated in para- graphs 4 and 5 of this directive'. a. After the - "services" is paragraph Ste, 1 the words 90015 "(excluding Assistable . specified is paragraphs 30 and as unless measures to facilitate production are specifically approved by your Government through the Joint Chief's of staff)". Also delete the words "reparation, for your foress - subject to the previsions of paragraph 21 of this directive, for t the Genesa people" - substitute the wands "required car the purposes out- lined is personalize 4 and a of this directive." TOP SECRET MICROFILM TRADE MARK ROLL NO TOP SECRET 188 187 TOP SECRET ENCLOSURE COPY NO. TOP SECRET 87 1. It was agreed at the Yalta Conference that Germany must IPOOG 2 pay in kind for the losses caused by her to the Allied National 3 May 1945 in the course of the war. The primary purpose of the Reparstion Commission should be the formulation of a general program Pages 1 to 9. Incl. for the exaction of substantial reparation and the establish- INFORMAT POLICY COMPITTEE ON GERMANY ment of the policies under which this program 10 to be impleINSTRUCTIONS FOR UNITED STATES REPRESENTATIVE mented. ON THE REPARATION COMMISSION 2. It is and has been fundamental United States policy that Note by the Secretaries Germany's var potential be destroyed, and its resurgence as far 8.6 possible be prevented, by removal or destruction of The enclosure, a study on the above subject, revised as directed at the IPCOG meeting on 3 May 1945, is circulated for final approval by the Informal Policy Committee on Germany. German plants, equipment and other property. While cooperating 10th the other powers in implementing the basic purposes of the Yalta Agreement, the U.S. representa- tive will bear in mind that whatever plan is formulated by the CHARLES W. McCARTHY Reparation Commission (hereinafter refer ed to as the Repara- ALVIN F. RICHARDSON tion Plan) should be in conformity with the economic and security RAYMOND E. COX objectives of this country with respect to Germany. The position of the United States on the various issues involved in Secretariat this respect is summarized in the following paragraphs. 3. In determining the size and character of reparation in accordance with points a and b of paragraph 2 of the Reparation Protocol and the allocation thereof among the various claimant nations the following principles are advocated by this Govern0 ment: a. The Reparation Plan should accist in the elimination of industrial capacity in Germany considered to be dangeroue to the security of the United National b. The Reparation Plan should aid in strengthening and developing on a sound basis the industries and trade of the IPOOG 2 TOP SECRET IPCOG 2 -1- Enclosure 190 TOP SECRET 189 TOP SECRET German ocean-going merchant tonnage in the shipping pool devastated non-enemy countries of Europe and of other until the end of the war against Japan and its division on some fair basis thereafter, and negotiations with other United National and in raising the living standards of th se countries. governments are in progress on this subject.) h. To the extent that for political reasons 15 may become 8. The reparation burden should be distributed in so far 0.8 practicable so as to impose equality of escrifice necessary in the negotiations to agree that reparations be collected in the form of deliveries of goods from current upon, and result in an equal general standard of living for the German populations of each of the zonee under the production over n period of years, such goods should be of such a nature and in such amounts as not to require the control of the respective occupying nations. d. This Government opposes any reparation plan based maintenance of the German war potential or the continued upon the assumption that "the United States or any other director influential dependence of other countries on Germany after reparations country will finance any reconstruction in Germany or coase. Accordingly, recurring reparations, over a period reparation by Germany. of years, should be: e. The Reparation Plan should not maintain or foster dependence of other countries upon the German economy. E. The Reparation Plan should not be of such a nature as 0 (1) AO small as possible in relation to the reparations to be paid in the form of industrial plants and equipment; and to promote or require the building up of German economic capacity. resources, and to the emallest extent possible in the g. To the maximum extent possible, reparations should be taken fronths national wealth of Germany existing at the form of manufactured products. time of collapse, with primary emphasis upon the removal of industrial nachinery, equipment and plants, particular- 1. The renoval of plants and equipment shall take place regardloss of the fact that they are owned in whole or in part, directly or indirectly, by United National nationale. ly the shipbuilding, metallurgical machine tool producing, electrical machinery, and chemical industries (including tiger all industries producing oil and oil products, synthetic Where plants or equipment which are owned in whole or in nitrogen and synthetic rubber), ships, rolling stock, the government of such national, for the owner to retain his interest in such plant and equipment after renoval. If patents, copyrights, and German foreign exchange assets C (2) Primarily in the form of raw materials and natural including investments abroad. Capacity for the production of component parts that enter into the production of the industries noted above should also be eligible for removal. Reparation in kind should not include arms, ammunition, and implements of war. (This Government favors the inclusion of Enclosure IP000 2 part by a United Nation national are to be 60 removed arrangements shall be made, if practicable and desired by not practicable or so desired, Germany shall furnish to the government of such national adequate reparation to cover the interest of such national. 2. It will be inevitable that the Gorman standard of living will be adversely affected by the carrying out of the IPOOG 2 -3- Enclosure TRADE MICROFILM MARK ROLL NO. 19 TOP SECRET 192 Reparation Plan. However, the reparation exactions should be held within such limits 3.8 to leave the German people 0 TOP SECRET the Nazi party or administration. with sufficient means to provide a minimum subsitonoo ston- e. Agreement should be sought along the following lineo dard of living without sustained outside relief; but under no condition should this limitation operate to require the with regard to compulsory labor service: (1) Except for persons tried for specific crimes, retention in Germany of means to support bosic living ston- and convicted and sentenced to lifetine punishment, dards on a higher level than that existing in any one of the period of conculsory labor service should be limited the neighboring United Nations. to a definite span of years. k. The Reparation Plan should not put the United States in a position where it will have to assume responsibility for oustained relief to the German people. (2) The standard of living and conditions of employment should conform to humane standards. (3) The Reparation Commission or Agency should periodically survey the living and working conditions of compulsory workers and the uses made of their services. 4. It was agreed at Yalta that reparation in kind is to be exacted from Germany, partly through the "use of German labor'. O In negotiations on labor reparation with the other povers in the Reparation Commission, the United States represent tive will be guided by the following principles: a. The United States will not accept reparation in the form of labor services. above, German labor for reparations should be recruited only on a voluntary basis. g. The net value of the services of both types of labor shall be included 0.0 reparations b. Both compulsory and voluntary labor services furouts nished BLB reparation should be used only for reconstruc- 5. The first charge on all approved exports for reparation or otherwise (other than removals of existing plant and equipnent) shall be a sun necessary to pay for approved importe. and tion and repair of var damage, not for current production operations, whips for fuel and food Accordingly, to the extent necessary to pay for such minimum g. This Government is strongly of the view that persons other than those specified in a below no deserving of O punishment should not be called upon to perform compulsory labor service outside Germany. 4. Compulsory labor service should be required only from var criminals and individuals definitely determined by appropriate process to be members of the Gestapo, the B.S., I. Apart from persons deserving of punishment as defined German imports AC may be determined to be essential, recipient countrice should be required to pay for Garnan exports, except renovals of existing plant and equipment. Importe for which O payment will be sought shall include supplies imported by the occupying forces for displaced persons and German civilians. 6. Without the approval of an appropriate Allied body there the Sicherheitodienst der S.S., lenders of the S.A., or shall be no re-export to third countries of goods received on leading collaborators, supporters of and participants in reparation account. IP000 2 --- Enclosure IP000 2 Enclosure PRECISION TRADE MARK MICROSTAT MICROFILM ROLL NO 194 193 D TO SECRET TOP SECRET 7. In order to prevent the treatment as war booty or no reimbursement for occupation costs of exports from Germany which should properly be considered as reparations deliveries, agroom ment should be sought on the scope of war booty and reinbursoment for occupation costs. Agreement should also be sought on the soope of restitution in relation to reparation. 8. The governments participating in the Reparation Commission will retain control over the disposition of German property located within their respective borders. These nations will zone of occupation in Germany plante, equipment and materials (including current output) of such a nature and not inexcess of such amounts an may be determined by the Reparation Commission. It shall be our policy to press for inclusion in such an initial removal schedule the categories of plant, equipment and materials (excluding oceangoing merchant tonnage) described in paragrache 30, 31 and 32 of the "Directive to the Connander in Chief of the United States Forces of Occupation Regarding the Military Government of Germany" and in paragraph 3 g above. b. The decision 0.0 to whether or not the removal of seck agreement with other countries in which German assets are C / located designed to eliminate continued German control of such particular plants, equipment or materials out of a zone in assets and prevent their eventual return to Germans. Germany 10 consistent with the purposes of occupation would 9. The United States will expect to assert a claim for reparations before the Reparation Commission in accordance with the principles of the Yalta Protocol in order to preserve its be made by the commander of such zone, subject to the following conditions: (1) There would be constant consultation between zone commanders. rights to its proper share of payment for losses caused to it by Germany in the course of the war. Pending the furnishing of a more exact claim at a later date the United States representstive shall reserve the right to claim delivery of reporations in a total amount to be determined. The United States will deair to receive as much as fessible of its share of reparations in (2) In making a decision as to removal the zone 001mander would be responsible for carrying out any relov nt agreed policies which may be formulated from time to time by the Control Council. (3) The Control Council would have an opportunity to consider any particular renoval and could vote it. the form of foreign exchange assets including German invest- (4) Regular reports should be made to the Control nento abroad. Council of transfers for reparation account and the 10. As an interin program, pending the formulation of more Control Council should keep appropriate Allied agencies definitive arrangements, this Government would favor formulation of an immediate program by the Reparation Commission along the following lines: B. During the initial period following the collapee of Germany each of the four occupying powers-Great Britain, Russia, France and the United States-DE} remove from its IPCOG 2 -6- Enclosure currently informed. e. During this initial period any one of the four occupying powers could allow, 11 it 80 desired, any other United Nation entitled to reparations in the form of renovals from Germany to take out of its zone plants, equipment and IPCOG 2 Enclosure 196 TOP SECRET 195 The occupation authorities should be responsible for the TOP SECRET C execution of the plan within Germany. In the execution of the materials of such a nature and not in excess of such plan, the Control Council should have the authority to withhold amounts as may be determined by the Reparation Commission. from transfer 8.6 reparations specific items the removal of which Such removals would be subject to the policy and conditions in its judgment would reduce the available economic neans below specified in sub-paragraphs A and b above. the minimum required to meet the other obligations of the ocou- d. Records should be kept of all deliveries code on pation. After review by the Control Council and in the aboonce reparations account under such interin arrangements and of agreement, the zone commander if he believes that any apeci- such deliveries should be made without prejudice to the final allocation of reparation shares. The Reparation Commission should determine the principles for valuation of such deliveries. O 11. The Reparation Plan should include provision for the C fic item should be retained within his zone my with the specific determination of his government that such item is essential for the purposes of the occupation withhold the removal of such item. The C. may The long torn plan referred to above should not be early establishment of a reparation agency including repre- approved by the U.S. representative on the Reportion Commission sentatives of such governments as have suffered devastation or agency until it has been submitted to and approved by the United States Government. or substantial damage. This agency, after detailed study of Germany's capsoity to pay and examination of clains to reparttion by the various claimant nations, shall develop a long torn plan for the delivery of reparations. This plan shall act forth a description of the reparations to be delivered and their physical allocation to the various claimant nations. It shall contain a time schedule indicating the rate at which deliverics The Control Council should advise the Reperation Agency (or Commission) from time to tine 0.0 deliveries are made. The Reportion Agency (or Commission) should keep a record of all such deliveries, and should place appropriate values on the respective amounts delivered. are to be made to the adveral governments over a stated period of years. The reparation agency should be given continuing res- ponsibility for drawing up at regular intervals detailed schedulee of the amounts and kinds of reparations items to be deliver0 O ed and should have authority to determine the allocation of specific items among claimant governments. In liou of the establishment of the reparations agency roforred to above the Reparation Plan may provide that the Reparttion Commission, appropriately expanded by the addition of representatives of other claimant governments,may be continued in existence and utilized for the same purpose. IPOOG 2 Enclosure IPCOG 2 -9- Enclosure -2- May 4. 1945 198 9100 A.M. 197 Hello. HMJr: General Greenbaust Good morning. 0: What's the news? HMJr: Everything down in Florida continues all right. 0: Well, that's good. HMJr: Eddie, will Clayton noked me about Eberstadt for some 0: He's the kind of A fellow that you would be orazy about working with on account of his ability and HMJr: Yeah. G: You would not see eye to eye with him within a million siles on his social, economic or what other things. HMJr: they come secondary with him, you know the type of fellow I mean. HMJr: Yenh. Have you any opinion about him? all odds. He was my favorite with them all. HMJr: G: In that right. Perfectly marvelous in ability and drive, energy etc. Completely ruthless in not giving 0 dean for criticism and handles his public relations measureably by just ignoring it. He doesn't care what anybody says. HMJr: HMJr: 0: bouneed out by Nelson, etc. HMJr: All the New Dealers around town are against his. G: No, most, not all. HMJr: Not all.(Lnughe) 0: No, some of then - the ones that worked closely with HMJr: Down there until either Sunday or Monday night. 0: I ace. HMJr: 0: But when I come back I definitely want to get together with you. Well, XA may be away next week. You've been hearing from Bob and Henry. him.. No, no. Hello? Yesh. admires ability and know what . tremendous G: Oh, well, that's more important. When, Henry? This afternoon late. How long are you going to be gone? 0: HMJr: HMJr: I'd love to but I'm going to Florida to 800 Ellie. Yeah. So he got the very bac reputation for having been G: Well, thank you, Eddie. What about supper tonight or something? G: HWJr: HMJr: I know. He certainly is not . Fascist or all these things they talk about, not within one million siles--he's a million per cent out for - oh, winning the var and all that type of stuff - a great, able fellow, I think. 0: Yeah. He's the ablest nan we've had down here by G: I see. Not that he in . reactionary or anything, but he's - G: important position, I think in connection with going to Germany. HMJ I see. Hello, Henry. HMJr: G: HMJr: contribution he did towards abolishing that idiotic priority system and putting in this controlled materials plan and things like that. 0: taken time to come through these days. MICROSTATA MICROFILM RECISION BOLL NO. May 4. 1945 -3- 10:47 M. 200 199 0 EXJr: 0: HWJ: G: That's right. HMJr: Hello. Well, give my best to Ellie. I home things go well. Operator: Mr. Connelly, Thank you. HWr: All right. Hello. 0. K. Mr. Matthew Connelly: Hello, Mr. Secretary. HMJr: How are you? Fine, sir. How are you today? C: HKJrs C: Good. Mr. Connelly, I'm calling up in regard to find out whether the President has had time to look at my article. He took it home with him, sir. I believe he has read it, but he hasn't told =0 anything about it yet. HKJr: C: HNJr: C: HMJr: 0: I... I told him about your mesange yesterday. I see. Well, when you get time and he's not too rushed, If you could let de know. I'm going down again after Cabinet today to see my wife in Florida. Oh, see. You know she's 111 there. Well, I'm sure we'll have something for you before then. HMJr: C: HMJr: And If you could I would appreciate it very such. We will, air. Thank you. 201 May 4, 1945 4:00 p.m. 202 -2- 0 H.M.JR: What? MR. COE: A very good proportion, to be more con- servative. GROUP Present: Mr. D. W. Bell Mr. Gaston Mr. Blough Mr. Coe Mr. DuBois Mr. Fussell Mr. Charles Bell Mr. O'Connell Mrs. Klots H.M.JR: Is this the whole staff? MR. O'CONNELL: Mr. Gaston is on his way. C MR. D. W. BELL: Luxford is on the Hill. H.M.JR: I just wanted to take three minutes to simply say that this week with the help of some very able assistants we concluded a directive to the Reparations Commission which is to go to Moscow. Last week we concluded a directive to General Eisenhower that took about all the strength we had. The Combined Chiefs of Staff have accepted the directive to Eisenhower. The President hasn't yet, but he said he would. On reparations, Mr. Grew accepted it, Navy accepted it, and I accepted it. We don't know about Stinson, but unless he is going to let his own people down, he will accept it. If both of these go into effect and they ever see daylight, that means just about ninety-nine percent of the Morgenthau Plan. Is that about right, boys? MR. COE: A good proportion. MR. DuBOIS: As we interpret it, it certainly is. H.M.JR: Yes. And so I feel that the Treasury has made its contribution toward world peace. It has been a very interesting, a very hard week, but I just thought I'd let you know what I was doing. Now, I an going to leave in a very few minutes to go down to see Rrs. Morgenthau who is getting along all right and is making steady progress. I have made arrangements with Admiral Leahy to inform Mrs. Klotz if I should come back any sooner. Otherwise, I think I'll be back Sunday night. night? MR. D.W.BELL: Otherwise you will be back Sunday H.M.JR: If I don't hear, I'll be back Sunday night. MR. GASTON: Day after tomorrow, you mean. H.M.JR: Yes. Unless somebody has # omething--Charlie Bell amuses ne. I'll tell you what to do, Charlie. I'll simply say yes to all of them, and you go ahead. MR. CHARLES BELL: They are all things you are ap+ proving regularly. It would relieve you of the whole batch. H.M.JR: Let me just say this. Any business which I haven't cleared, you clear between now and Sunday night, and I'll back you up. We will start with a olean slate Monday morning. MR. CHARLES BELL: Fine! 203 204 0 C H.M.JR: I'll back you up. That goes for all H.M.JR: That is all I have. It has been a good week. I have had some able assistance. of you. MR. CHARLES BELL: That's fine. MR. D.W.BELL: You asked me about Eberstadt. Is that his name? H.M. So, let's start a new deal Monday morning. H.M.JR: Yes. MR. O'CONNELL: Tomorrow ought to be & big day. MR. D.W.BELL: He won't accept, so you won't have to worry about him. MR. CHARLES BELL: We'll clean up everything. H.M.JR: Everything. Don't let anything lap over MRS. KLOTZ: Don't you have to call them back? until next week. H.M.JR: No, I just said, "Go slow." MR. GASTON: On some things it is not possible to forge your signature adequately. MRS. KLOTZ: You said, "Until I call you again." H.M.JR: Well, you fellows can all sign as Acting it, willH.M.JR: he? I an not going to call up. He won't take Secratary, can't you? 0 MR. O'CONNELL: Yes. MR. D.W.BELL: No. Bob McConnell called me a while ago and said he was out of the picture. MR. GASTON: It isn't always exactly the same thing. H.M.JR: All I said was, I sent word to Clayton to hold up until I had a chance to talk to him. H.M.JR: Don't bring me anything Monday unless it originates Monday. MR. D.W.BELL: He said he is out. MR. CHARLES BELL: Yes. H.M.JR: All right? MRS. KLOTZ: Not on deferments! MR. D.W.BELL: Yes. MR. CHARLES BELL: Oh, yes. H.M.JR: Good afternoon, gentlemen. H.M.JR: Everything! MR. CHARLES BELL: Bureau of Printing and Engraving. MR. week end. MRS. KLOTZ: That always worries me. (Laughter) (Mr. Gaston, Mr. Blough, Mr. Coe, Mr. DuBois, Mr. Pussell, Mr. O'Connell leave the conference.) MR. D.W.BELL: He will call up tomorrow and say, "What did you approve? MRS. KLOTZ: He will say, "What did you do that for?" GASTON: Good evening. I hope you have a pleasant MR. D.W.BELL: Could I get your signature on O 205 206 -5- 0 This one hits it. Three times he said to the President, "What am I going to do in Agriculture on V-E Day? Three times! The President said, "I'll make a proclamation on that day. All I am asking you is to a little citation? This is the Boston concern. (Secretary signs citation to Forbes Lithograph Manufacturing Company dated Mary 4, 1945.) back me up.' And still the dumb cluck didn't get it. MR. D.W.BELL: I take it you don't want to know any more about budget figures? MR. CHARLES BELL: It's so drawn out. It will be hardly identified. H.M.JR: I would like to have them. H.M.JR: He said there won't be any. This is much MR. CHARLES BELL: Could w get your signature on nearer. one letter to go with our pay checks, and I must have it before Monday? And that, sir, you may want to know MR. CHARLES BELL: I understand it suits you? about. H.M.JR: Yes. It is good. H.M.JR: No, I don't want to know about it. MR. CHARLES BELL: That is the way we make things MRS. KLOTZ: I think you better. perfect. MR. CHARLES BELL: I think he wants to know about it. O H.M.JR What is it? MR. CHARLES BELL: It is three paragraphs to go to ninety thousand people. I have an alternative, if you don't like that. H.M.JR: I don't like it. MR. CHARLES BELL: The alternative is the next attachment. H.M.JR: This? H.M.JR: Charlie, I expect you to be right the first time. MR. CHARLES BELL: You told me if I didn't make a mistake, one in the morning and one in the afternoon, I wasn't doing anything. (Mr. Charles Bell leaves conference.) MR.D.W.BELL: I got that letter requesting three people to go over and take a look at that gold and put it in bags, and we'll have those three people by Monday or Tuesday. I assume it is all right to go ahead. I told the War Department we will be prepared to go Tuesday or Thursday. MR. CHARLES BELL: On the bottom, yes. H.M.JR: (Reading) This is much better. Okay. (Secretary signs letter to employees concerning V-E Day, dated May 4, 1945.) stuff? H.M.JR: We'll go Tuesday? Where do you get the we MR. D.W.BELL: I'm speaking of the Treasury. H.M.JR: Yes. MR. D.W.BELL: This is that budget thing that you 208 207 -7- -80 KR. D.W.BELL: They had an editorial this morning and ripped him up and down on his views. The read it, but no couldn't see that we could do anything about it. wanted. The papers announced that there was a seven billion dollar cut. Well, there is really & four billion, He said we didn't like it, but we weren't going to object. So I wouldn't say anything about it. I'd let It go. two hundred sixty-five million dollar out of which three billion, one hundred million dollars is appropriations, and the rest is contract authorization. The whole four billion contract authorization, which is what it was originally, is now three billion dollars of appropriations, which have been made to cover those contract authorizations, and the whole thing is lumped, see? It doesn't--none of that affects the 1946 budget. Now, the only thing that affects the 1946 budget is about eighty-two million, the same figure as in the budget for expenditures one billion seven hundred million dollars for the Maritime Commission which went in in January, and they expect to expand that much. H.M.JR: No, no. MR. D.W. BELL: Now, sometime along the line if you want to help save some money, I think maybe the place to save it is in the Navy, because Harold Smith told no at the meeting the other day that they had information that the Japanese fleet was virtually destroyed and there wasn't any sense in spending all this money on the Navy, particularly for large battleships, forty-five thousand tons. But the Navy is going ahead full blast and expects to have a new Navy when this war is over. H.M.JR: Let's get at that when I get back. MR. D.W.BELL: There is the place we can save some money. H.M.JR: Have a look at Harold Smith's article. MR. BELL: I read it before it went out. It is terrible, but we couldn't do anything about it, just let it go. Did you see the Wall Street Journal? H.M.JR: No. 0 -2- May 4 1945 4:18 P. R. 209 o H: General Hilldring: Mr. Secretary, this is Hilldring. HMJr: General, I just wondered what happened to the request I made to you about Colonel Bernstein? to Clay. HMJr: Ht Well, air, we sint a cable out on him. H: And if that's agreeable to you, it obviously is I'm more than pleased to leave it that way. And then I will desist on the acouting expedition you out me on the other afternoon for the time being too. Did you? HMJr: That's agreeable to me. Yee, air, and ve didn't accredit it to you, air. H: All right, Mr. Secretary. (Laughe) Well, that's good. HKJr: That's agreeable to me. Now, I have -- von there anything else on that, sirt H: A11 right, air. HMJr: No. HKJr: I thank you. H: We have another anble on it subject you noked me H: A11 right, thank you, air. (WJrt H: HMJr: H: about the other day If you'11 give me . minute to get my glazees, I'll read it to you. HMJr: Yes, sir. Just a minute. H: (Pauee) Y 75515 . that vas the one It says, . Re in which we relayed . request I received from you through Danny Bell. "Please advise Secretary of Treasury that present planning stage does not make appointment of Chief Financial advisor immediately urgent as help needed principally after the 00- H: -- me under Clay orational thinks period this gets is to way. from Clay-- In other in words which HMJr: Olay thinks that Bernie is doing all that any human being could now do. That's what he anys, Mr. Secretary. Well 5.6 far an I'm concerned if the Army was agreemble, I'd like to leave Bernin 0.0 Number one. (Laughs) Well, it certainly is abn rent from this H: cable which has just arrived - a few minutes REOthat Clay-feels that way at the moment HMJr H: HMJr: Fine. Mr. Secretary. Fine. HMJr: Good night. H: Good bye. 210 TRADE MICROSTATI MICROFILM ROLL NO. SPECIAL TREASURY DEPARTMENT 211 212 INTER OFFICE COMMUNICATION DATE May 4, 1945 May 4, 1945 TO FROM Mr. Coe Secretary Morgenthau will Clayton told me this morning that the State Department had written to President Trunan protesting vigorously against appointing a political Commissioner of Reparations outside the State Department, and that President Truman had handed this matter over to Pauley to negotiate with State. Later Pauley told me in strict confidence about the same thing, and that he had told the State Department to go hell. will you please read the attached documents and return then to me? April 24, 1945 Strictly confidential 213 214 REPORT ON CONVESSATIONS WITH BRITISH OFFICIALS MARCIL 1945 Notes on conversation at lunchean with two less Ronella Audi in Perpase. by Louchlin Currie I set forth the thesis that Britain's apprrant desire to form Introduction leatern European loc was estrangine the sore liberal elements in America who were Dritsin's test frients, and constitutes . potential dancer to the future pence of the world by tending to bring about . realiment of opposing powers in) also AS an indication of 8 Land of faith in . world peace organization. Love and Bone1 cented there such . policy but also Insteated that the would favor such A policy. I WILD authorized by President iloosevelt to stop over in London en route to or from /witserland for the purpose of familiarising myself with British official thinking on some emerging economic and financial surrend that such . grouning up necessary to eistile WritaIn to problems. After discussing the matter with Ambassador Minunt I arranged discharge its obligations to the world organization and that such on alliance would ca directed agriest Germany I income that there VAS with the help of Dr. Perrose for . sories of interviews is the period no need to four Germany AS an Independent Aggressor but only 04 an ally of one of oppailine block and 0-0 in Inciter of dismits free the tenth to the sixteenth of March. the United Nations. Last then within to the position of anying that the Low Countries on France HERE united to indian by verious cultural ties and by and large hol the - values. I realied that so long is this were cultural relations, there una nothing to fear I be conversations with the following peoples Anthony Edem, Richard Law, Speals Figel of the Foreign Officer Kugnes, Endy, Whaley but when these Lecture military had defensive, It - another after. Mead then thought I whis Inconsistent because - win! this to of the Treasury: Need of the Far Cabinet Sperstarist; Stone of the do what ** head done no are doing in the American I readily remitted the inconsistency let 101 that two wrongs don's mike A rich n there Central / officer Leisching of the Board of Trade; Schaster, setting up 11 new bloc of it kind. Member of Perlinement, representing City views: Durbin, a leading Labor THE A difference between continuation of . hundred-year solicy and I the the only world confiscrition that - really had to TITTE economist, and secretary to Major Attlee; Clark, of 12m Kinistry of about in future - that between the western nitions n Issals nd that, to prevent this happening ritain bed 5 peoplish interest in Production. responsibility It - highly vulnerall militarily to the type of or In general I van interested in ascertaining view on Britain's that would to raped in the future no had more at stake in mikin 3 world peace organization function the eithir the U.S.S.R. or the U.S.A. Minint concurred and MI that the cancer of such on Alliance would economic situation with particular reference to her balance of only to abristed by complete frinkness a the complete knowledge and approbation of Easile. payments. On the political adde I had one discussions on the mooted Northert European alilence and on the treatment of Germany. I WAR 1+1 1th the Impression that there care strong elesents both In the Conservative party and In the Fordin office that here skeptical as to the effectiveness of the world peace organization and would favor fornation of . Lestern European Loc united on Ideolories1 Dritain's Post-liur Economic Position 1. Employment. I can away with a strong feeling that despite grounds AS = defense against possible encroschment by Runsis. . certain amount of official penalmiss those who are most actively studying this problem and are in n position to influence policy are relatively optimistic over the post-mar outlook. There was no fear of O CONPIPBNIIAL . 216 -2- 1 payments would be add on the large Indian and Egyptian balances. Keynes indicate that vidle they were still increasing these balances the available winpower be employed in directions most beneficial they were reluctant to raise the subject of settlement. However, to the national Interest. There appears to be little concern about he expected that the British Government's policy in tids astter would the demand for British exports. There is, however, BOGE society be formulate by the end of the year. Keynes believed that equilibrium last the pull of donestic requirements my leave insufficient resources in the British balance of payments could be attained in three years to meet this demand. Some thought in being Iven to the various ways after the defect or Germany. In reserve the possibility of Britain achieving equilibrium with- prevent absorption of too such Dispoter for the actiofaction of out somietance from America or the International Monetary Fund or domestic demands. There said general Ensent to my suggestion that, Bank is dependent upon (a) the cuickness with which exports can be whereas our problem would be to build up sufficient consultation to built MD, (b) the length of the Japanese lar and (c) the mignitude of absorb our productive capacity, England's problem with be to hold Britain's contribution in that (d) the magnituie of lend-lease in down consumption so as to permit the requisite degree of capital form- this period. tion for domentie and foreign purposes. 2. Balance of Payments. I found the name degree of optimism, The goal on Laport is not A pre-trur figure but rather statever volume 1a necessary to permit reconstruction and to provide for higher though even lega secknowledged, with reference to Britain's foreign nutritt na1 standards than prevailed before the WEF. I believe that balance of payments. Here I mile an effort to get some inflection theze standards here been worked out and that If they could be secured on the proposed settlement of the large volume of sterling indebtedness, 2008 11:ht would be thrown upon British objectives in the fields of After talks with both Sady sal Keynes, I - that while no donestic food production and imports. It 12 felt that while food produc- one formule would apply to all sterling Indebtedness, the overall tion would not attain the levels reached during the var it would reasin settlement would be such as not to burden Britain unduly. Both see Higher than before the sur. used the word "token" is connection with the requyrent. Kaynes I did not have an opportunity to a any data on British cost-price maggesta that a more "generous" settlement would be in order for relationships with American costs at the present rate of exchange. balances which represent monetary reserves of other banking systems, However, the economists with whom I talket all seemed to feel that the and for balances of colonial areas for which Britain nota In 4 trustee present rate would be very antisfactory to Britain. Satisfaction was capacity. On the other hand, I received the impression that very small 0 1 widespread or chronic unemployment. father, there 10 concern that in which the government night, without exerting too direct entrol, 0 215 ORIELIIAL 218 217 0 also expresse! with the improvement in industrial and agricultural efficiency that has gone on through the mr. 3. General views on trade policy have been fully reported by the Enbussy. I found general acceptance of our broad position in favor of a return to freer world traile on a miltilateral bagis. lowever, most of the people with whom I taliced adapted . exutious attitude. They felt that the British consitment to remove exchange restrictions must be conditioned upon . full recovery of equilibrise in the balance of payments; that the principle of imperial preference must recain, although further reduction in the preference might be expected; and that NO have proimbly not given sufficient weight to the strength of protectionist continunt in Europe and in economically undeveloped countries. Keynes renewed his objection to the generalisation of all server reductions through the most-Pavered nation clause. Se thought that the better any to proceed weals be for the British Empire and the United States, together with whatever countries night cars to join, to form IL sort of customs union within which reduced rates would previol This would constitute an inducemost for other countries to join but not be too severe . penalty if they elected to remain outside. Be REF strongly in favor of the promulgation of . broad statement of principles to apply to world Secretary Morgenthas making a consitteent that the dollar pool of the sterling area sould be used only for financial considerations and not to push British exports at the expense of existing American exports. This letter has never been released. I reise the question of the advisability of releasing this commitment and Keynes, on behalf of the british Treasury, said that he had no objection in principle but this the particular letter referred to the lend-lease negotiations and that . new document would be more suitable. He suggeste I get in touch with Mr. Brand on this mitter on my return to Washington. 5. Crefits to Britain. Sir George schuster suggeste that it would be to Britain's Interest to borrow frim us for the purpose of re-lonning abroad, which would enable Britain to participate in longtime foreign capital developments and place her in . position to secure repeat orders. Keynes, on the other have, vas outposed to borrowing under any conditions. 6. Cartels. I found little Interest or concern over the cartel problem. In feet Keyne stated that such firms as Imperial Chemicals had worked to increase voluse at lower cost sal that the most backward industries were those in which they had haireds of small and independ- ant operators, BE in the textile and mining fields. 7. Conlaining. While the Conservative Party is opposed to the of coal aines, most of the people with whom , talked trade and the setting up of an International trade organization. 4. Use of Dollar Pool. At Sim tise of the Phone II lend-locue negotiations last year I persuades Keynen to write . letter to thought that 11 would be inevitable. The catagonism between the minera and the opirators La each as to take Impossible the investant of the 220 -7- -6- C 219 : to the United States. He thought that the Labor Party's research hundreds of millions of pounds necessary to bring about the and thinking had been weakest on the international edonomic side requisite technical improvements in this industry. and admittel that the proposal for state purchases of incorto had not been thought through. 8. Leni-Lease cottlements. I received the impression that Treatment of Germany the British would welcome an early lend-lease settlement that would Keynes - very exereised over the decision to exact reportions wipe out the bulk of the obligation and would leave those Items having . peace-time utility to be negotiated separately. However, from Germany. 11th the current destruction in Germany and the pro- they feel that any lead in this matter must be left to the United posed stripping of industrial equipment he YBLS fearful that the out- States. cone eight be . situation in which the United State and Iritain fours themselves forced to put goods into Germany while the Pussiana The Position of Ecocomists in the British Government vore taking goods out. Ha thought thit exports fr n Germany for the In recent years the mell group of professional British coon- purpose of paying for necessary import should come abead of repara- omists has attained a very Influential and probably permanent place in the British Government. In general they have burled their o tions. Since, in his view, it - not fensible to contemplate the doctrinal differences and are protected by the security, prestice imposition of sufficiently rigid and long-continued controls to permit and anonymity of the British Civil Service. It is propose to the rebuilding of Germany for the purpose of getting increased continue the For Secretarist as . permisest recretariat to the reportions, we should plan to stay to Garmany only sufficiently Cabinet, with James Hand as Secretary. long to 60 what had to be done to sar criminals and the stripping The Labor Party and the United States of Cerman plant, and them get out, any, in two years' time. On the Sore interesting points sere brought out to 3 discussion with Separations Commission, the British members any be expected to take Durbin, or influential economist in the Labor Party. He said the position that goods mutable for export to pay for imports of that the Labor Party generally l'elt anne hostility toward 11 in the food, etc., should name ahand of reparations, and this will probably United States. He cited the mixed reaction here to the Beverldge become an issue with the Russians. plan and thought that the Labor Party's program of nationalisation The Septem Daronesa Alliance of mines, railroads, and utilities would encounter a critical resetion in the United States. He expressed the hope that some particular attention night be paid to Major Attlee during his visits One of the leading controversial, though uninroover, issues in British government circles centers around the advisability of Britain 221 taking the land in forming a defensive alliance with Scandinavia, I the Low Countries, and Frence. Proponents of such an alliance include Richard Law and Ronald Nigel of the Foreign Office. I MAD, however, sasure by Eden that this 165 not the present policy of the British Government and that he personally is apposed to it. This ostensibly directal against Germany it would actually be directed schimat the Soviet. The matter is likely to become A party issue in Britain as the proposal derives its strongest support from the Conservative Party and is cost strongly appoared by the Labor Party. Although there are exceptions, most of the influential people in the Labor Party feel that the fornation of such an alliance would indicate . lack of feith in the proposed world organization, would invite retalistory action and would mark . continuance of the balance of power concept. Propon- ests of the alliance feel that Britain cannot estrust its safety to the world organization until it has bees proved and that the alliance would place Britain in . position "where 1: could better fulfill its military obligation to the world organization." TRADE MARK MICROSTATE MICROFILM - BOLL HO 222 - PRECISION toMr.the 5/21/45 spoken Secretary. Feltus has Copy referred to is being O 1 to Secretary today. PRECISION TRADE MAI MICROSTAT MICROFILM ROLL NO TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE May 4, 1945 Secretary Morgenthau Randolph Feltus Mr. Gaston asked me to report to you on the "peaphlet of the month" proof Reynal & Hitchcock. The attached clipping from the Hereld Tribune tells the story. pt. 224 YORK Herald - Tribune MAY 1945 said the pamphiets will he P.A. C. Booklet Heralds Drive On Congress Bretton Woods Report 1. First of Monthly Series timed the meet the debates on legis letter before Congress Pumphies rangementHitcheack with subsidiary the of they the publishers made public out princi labor through the National Citi- use Political Action Committ repected each issue will be millions with 250.000 mis PAR the on Current Legislation Woods is an the mystery" first twenty DADE I The Political Action Comm the Congress of Industrial or gaturations turning its Congress The first Congress pamphiest supporting worldne Woods was pamphiet The Other IDentrated the baby amid its Made blocks paper entitled Bre The temphies taxes "If ** banish war painti we must war. And that what distributed for CA values The couples the firstalso pamphiet - Street non members of kept informed records green Bretten other Bidness Hilman national chair man reported that the deal with the world - ference the world trade and race in corressed relations Authority development and "other current mail seen create kind credit union for them help Nations United the East would the world's different motive and help themselves in times of their needs suggests that the dembers STATES union meetings as com quality charges meetings cus the water write letter to total papers and write letter Secuality animal approval part SURPLUS PROPERTY BOARD capy to225 WASHINGTON 15. D.C. Charles May 4, 1945 Honorable Henry Morganthau, Jr. The Secretary of the Treasury Washington, D. C. My dear Secretary: The Surplus Property Board has directed se to acknowledge receipt of your courteous letter of April 28 and to thank you and those of your organisation who have worked so painstakingly and helpfully in aiding the Surplus Property Board and its predecessor in the handling of & very difficult administrative job. with the expression of the Board's best wishes and my own personal high regards, I - Sincerely yours, auy 41. Gillette Chairman GMG-sb Bell RECISION TRADE MARK MICROSTAT MICROFILM ROLL NO 4, NaziGoldCache 200 Tons. Twice First Estimate Tooth Fillings Among Loot Found in Reich As Allies Study Home and Foreign Assets Col. Berndinn Former Treasury Counsel 1. Traring German fort By Carl Love May 237 36 May 4, 1945. My dear Lert Kaymeet It was most Has of you to write - just after yes had attented the mearial services for the greatly belowed and respected President the - . our to the vas Inconclusive that you any of his personal character and the be is the stirring events of I sympathetic appreciate past part years response year played tribute of great to English deal Mis emory. to friends no. eat The and - printed sted nave in program this of Me country, passing of the special I very and service deeply to have held appresi- at the your College. Sincerely, (Signed) Heary Morgenthesis, Jr. Please pardon detated letter Lest Kaynes, Hard College, Cashridge, Regient. GET/Abe MICROFILM MICROSTATI ROLL NO. 228 KING'S COLLEGE CAMBRIDGE 0 Apriles 1960 Dearn Secretary coming or this morning for the M and t the Project celebrated - the cheps 7 7 our colleye he on vehalf 7 this University at Tan and County, 1 feel words t is 5 y 3 his her fried as count 10 may year. Not taik, smin a death of phen victoria hs this w-5 been so and move 9 . no 7 Tiges and colours with himi menory, 6 the pay 4 - inter pilot JAM of sho had know a but 7th s we one live in Everywhere - great concourar, moning hge in combing this many has sought his many It appricted with the calding 7 Evt your mindy keyns 229 KING'S COLLEGE CHAPEL OUR FATHER, which art in heaven, Hallowed be thy Name Thy kingdom come. Thy will be done. in earth as is is in heaven. Give us this day our daily bread And forgive - our trespasses, As will forgive them that trespass against us. And lead us not into temptation; But deliver us from evil. Amen * IN MEMORIAM THE souls of the righteous are in the hands of God. They are in peace. FRANKLIN DELANO ROOSEVELT The righteous live for evermore Their reward also is with the Lord. PRESIDENT OF THE UNITED STATES Into thy hands, o Lord, we commend their spirits For thou hast redeemed them, o Lord, theu God of truth OF AMERICA O Lord, hear our prayer. And let our cry come unto thee , Then shall follow three Collects 30 JANUARY 1882 THE GRACE 11 APRIL 1945 , After the Grace will be rung. the people standing CHORALE GOD liveth still! Soul, why takest thought of ill? God is good and God's compassion Never turns from earth away. His protecting hand will fashion Right from wrong health from decay. Though we see not how. from sorrow, Blessing shapes He for the morrow So. my soul, reck nought of ill. Back God is living, living still! God liveth still! Soul, why fearest cught of al? Though thy cross be sore appressing, To thy God direct thy way. He will pour on thee His blessing To thy feet be staff and stay. For his truth endureth ever, His compassion faileth never So, my soul, reck nought of ill. God is living. living still! Saturday, 21 April 1945 10.30 A.M. 230 ORDER OF SERVICE said unto me, Write: for these weeds are true and faithful And he Before the Service there shall be played the National Anthem of the United States of America THE SENTENCES said unto me. It is done. am Alpha and Omega, the beginning and the end. will give unto him that athins of the fountain of the wwter of life freely. He that overcometh shall inherit all things; and will be his God, and he shall be my 600 I AM the Resurrection and the Life with the Lord he that believeth in me. though be were dead yet shall be live: and whoseever . JOHN XL as 26. liveth and believeth in me shall never die He bath showed thee, O man, what is good; and what doth the Lord require of thee, but to do justly, and to love mercy, and to walk humbly with thy God? MICAH v. & BE thou faithful unto death, and will give thee crown of life REY. 10 HYMN THY KINGDOM come on bended knee The passing ages pray; And faithful souls have vearned to see On earth that kingdom's day But the slow watches of the night Not less to God belong And for the everlasting right The silent stars are strong. ANTHEM or PSALMS Walford Davis o SAVIOUR of the world who by thy Cross and precious Blood hast redeemed us Save us and help us. we humbly beseech thee, O Lord PEACH cxxi followed by Requirem instead of Gloria Partil I HEARD voice from heaven, saying unto me. Write, From hence forth blessed are the dead which die in the Lord: even so saith the Spirit: for they rest from their labours THE LESSON Revelation - in And la already on the hills The fags of dawn appear; Gird up your loins, ye prophet souls, Proclaim the day is near: The day in whose clear-shining light All wrong shall stand revealed When justice shall be throned in might And every hurt be healed: When knowledge hand in hand with peace, Shall walk the earth abroad:The day of perfect righteousness The promised day of God. AND saw new heaven and new earth: for the first heaven and the first earth were passed away; and there was no more sea And I John saw the holy city, new Jerusalem coming down from God out of heaven, prepared as bride adorned for her husband And heard great voice out of heaven saying. Behold the tabernacle of God with men, and be will dwell with them, and they shall be his people, and God himself shall be with them, and be their God. And God shall wipe away all tears from their eyes: and there shall be no more death. neither BORROW, nor crying. neither shall there be any more pain: for the former things are passed away. And he that sat upon the throne said, Behold make all things new And he , Then shall the Bishop of Ely speak to the people THE PRAYERS THE LORD be with you And with thy spirit. Let pray. Lord, have mercy upon us Christ, have mercy upon ME Lord, have mercy upon us , PRECISION TRADE MARK MICROFILM MICROSTAT ROLL NO TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE MY 4, 1045 TO Secretary Vorcester Bell of to TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE 5/4/45 Secretary Morgenthau TO FROM E. B. Fussell in line with your surrection that the human Issues should be accented whenever possible in any material presented by the Treasury, Vr. Siler of Mr. Shueffer's shop has prepared the attached material for possible use as an address or otherwise, in connection with 7th far Loan promotion. It seems to ne to be an excellent niece of work and If not available for use BE an address, the same idea might be used in & radio dramatization. or otherwise. The basic fact Is that we are using American dollars to save American lives - an argument on this bacis cright to Impress great many people - especially since nearly 600,000 service a men have been rounded already and 10,000,000 or more nen are facing this risk. They all have families interested In the sort of care they night receive. The only serious question that is raised in my mind by this piece Is the fact that the subject loses his hand. I think it night be more effective and beneficial If he saved his hand an a result of early surgical attention, plasma, pen- 1cillin, etc. REON TRADE MARK MICROSTAT MICROFILM ROLL NO 235 234 0 his buddies saved his helmet with the two holes in it - one Private Jimmy Jones of the United States Army landed in in, one out. Jimmy doesn't remember about the helmet; he San Francisco from Okinawa yesterday. Fortunately or un- remembers only that be wondered . bit dissily what had hit fortunately, be landed almost in one piece; almost, because him, and that his right hand went up to his head -- as would there was only a stump where Jimmy's right hand used to be. yours or mine under the same circumstances -- to see whether The stump wasn't the only reason for the Purple Heart blood was flowing. ribbon that Jimmy was wearing the bandage around his head Yes, there was blood, all right. hid . slit in his scalp that only by thousandths of an inch was not a slit in his skull. Jimmy, it was plain to see, had Jimmy ought to have taken his hand back down after finding the blood there. But he didn't, for a steel chunk shared in both the give and the take of the Okinews fighting. from . Japanese mortar shall picked that moment to separate Things obviously got hot out there in the vicinity of his Jimmy from his right hand for Private Jones' entire duration. Okinews fox hole. But when San Francisco saw him yesterday, our hero still smiled. You remember Private Jones, I as sure. He was your boy, your next door neighbor's boy, the boy down the street. Not so many years ago he was delivering your morning paper. It was Jinay who headed his high school class on graduation day. I want to tell you all about Jimmy tonight. Multiply him Jimmy doesn't remember any more about the disappearance of his hand than he does about his helmet. He remembers only that things went very black about then, and that when he awakened, man of the Medical Corps were there in the fox hole beside him, giving him first aid. First aid usually is more heroism, more cold courage, than anything else. It was that in the case of Private Jones, there by unnumbered thousands, (nearly 600,000 service men have at the front on Okinewa. There wasn't much expense involved, already been wounded) and you have . very important reason reckoning expense in terms of dollars and cents It took only why the Seventh War Loan must not, cannot fail. For Jimmy is . bandage about Jimmy's head, a tourniquet about his stump of a symbol of some of the most important fighting that our a right arm, . sprinkle of sulfa, a shot of morphine -- "fighting dollars" have yet to do. Jimmy had his finger on the trigger of a hot-barreled Garand when a Jap bullet left that slit in his scalp. He hopes "You'll be all right, buddy," Jimmy was assured by the Medical Corpsmen. MICROFILM C It was this same Jimmy, you understand, who landed in San Francisco yesterday; the same Jimmy that all of you remember so well as one of the bright boys of your neighborhood a very for years ago. There on Okinawa they had rolled him onto a litter and carried him back to the battalion aid station as soon as a little of the heat was gone from the Japanese machine gun and mortar fire. The battalion aid station had doctors who swiftly completed such energency surgery as the condition of Private Jones called for. A pint of blood fresh from the home front was poured into Jimmy's veine BB one of their ministrations. There would be more if Jimmy needed it, but he probably wouldn't because first aid had reached him quickly. They tied a tag to Jimmy before sending him on back to the collecting and clearing station. The tag gave Jimmy's name, serial number and outfit, and described briefly the wounds and treatment he had received. "You'll be all right, son," Jimmy was told by the surgeon who worked on him. And Jimmy needed the assurance; he was a badly shaken Private Jones by then. There weren't many formalities at the collecting and clearing station which was Jimmy's next stop. A collecting and clearing station isn't for formalities: it's to see that the right disposition is made of casualties -- and soon. 237 236 ( -3- ROLL NO A quick record of the receipt of Private Jones from the battalion aid station was made, and Jimmy, now beginning to feel less of . casualty and more of a Jones, was marked up for space on . plane about to leave for a rear area general hospital. Private Jones was to hear no more of machine gun, mortar, Garand, besooks and artillery fire after that day. The general hospitals to which the Jimmy Joneses go are well removed from combat zones. And at Jimmy's general hospital, still far out in the Pacific, the medical staff was not long in deciding that Private Jones -- the Jimmy Jones of old minus one hand, one wrist and . alice of scalp -- need see no more service in the hot spots of this war. And so they brought Jimmy -- your boy, your next door neighbor's boy, the boy down the street -- on to San Francisco yesterday; brought him standing up and in fair state of repair to a great debarkation hospital there; brought him in new clothes that had replaced his battle germents, and in spirits plainly reflected by the smile that be wore. Home from the front, this soldier -- to stay. But you wouldn't want as to leave Private Jones there in the San Francisco debarkation hospital, I'm sure. Let's see if we can get him back to his own doorstep. SPRECISION TRADE MARK MICROSTAT MICROFILM ROLL NO 239 238 -5- O ( Jimmy will not stay at the debarkation hospital long: long enough only to let medical specialists determine the precise treatment that should lead, in his case, to complete recovery. fairly satisfactorily, Jimmy will find himself slipping easily back into civilian ways of life as the Army prepares to release him from further military duties. Day after day the Jimmy's partially empty right sleeve is a badge that permits recuperating Private Jones is more and more on his own: the specialists to decide without delay where he should go. That is to say, you are booked by the debarkation hospital for further treatment at an amputation center if your right are that's part of his reconditioning for the day when he again is to be Private Citizen Jones of the U.S.A. rather than Private Jones of the U.S. Army. isn't all there. The center will provide the most acceptable C A report recommending that Private Jones be honorably substitute possible. Nerve surgery, chest surgery, eye surgery, ear surgery, discharged will be laid on the desk of the Convalescent Center's commanding officer some bright morning. They will plastic surgery -- these and many more forms of treatment, surgical or medical or both, are essential for one Jimmy Jones or another. The Joneses are treated at centers where close the Army record of Private Jimmy Jones soon afterward. 0 in it, will be off to the old neighborhood in the best town on earth, where you knew him so well before all the hell and economy has been the Army's last thought as it provided everything that medicine and surgery might need in repairing the destruction wrought by battles. Are there many of these centers? Yes, there are many. fury of this war began. Yes, they'11 close the Army record of Private Jones. Mustering-out-pay will go to him along with his final orders. But his record will remain wide open for the American people. America didn't want the records of all the Jimmy Joneses It takes many of them to provide comfort and hope for the future to all the Jimmy Joneses that Okinawa and other war fronts send their way. There will be one more stop -- a convalescent center And Jimmy, still wishing he had that helmet with the two holes -- to be closed just because they were leaving the Army. So we enacted the G.I. Bill of Rights. Under that bill's wise for Jimmy in his trek from Okinawa back to his own home town. provisions, Jimmy may resume his interrupted education at his At the convalescent center, his mechanical right hand working favorite college, if he so desires. Or he may have vocational 241 240 -80 Franklin Delano Roosevelt named them "fighting dollars" training designed especially for a man whose right are is somewhat on the phony side. There's a loan guarantee waiting for him to help him purchase a home or a farm or establish . small business, if he wants it. And regardless of the provisions of the Bill of Rights, . check will go to him from as he opened the first of our war loan drives, two and a half anguished years ago. In that first war loan drive and the five which have followed it, investments of the American people in the cause of . free world have amounted to a hundred and nine and a half billion dollars. his Government every month to compensate him in part for having left his right hand there beside the Okinews fox hole. As for Jimmy, and how be feels about it all -- "I'm fine," Jimmy will tell you. ##### Now, in the Seventh War Loan, America is called upon to subscribe fourteen billion more fighting dollars that liberty and decency and equality again shall prevail among men - and that Private Jimmy Jones, from Yourtown by way of Okinawa, may receive the care that a grateful nation so plainly owes him. C Germany is in ashes and Hitler is clay, but off to the west there yet is fighting to do. Nimits and MacArthur and the men and the ships they command will finish that fighting in good time -- but many more Jimmy Joneses will be backtracking through aid stations and collecting stations and general hospitals and debarkation hospitals and treatment centers before our victory is complete. And even then the task of our fighting dollars will be far from ended. Our responsibilities -- the responsibilities of our fighting dollars -- to Jimmy Jones and all of his Purple Heart buddies cannot but retmain heavy through long arches of time. 000 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE Way the 1945 TO FROM Secretary orgenthau Leases. Gos and SchwIdt (For Action) FC As you know to have learned that General KeeArthur := now willing to have G Treasury stuff FLOVG forward to the Philippines, although US HAVE not yet received word of this formally. We plan to zen: six JOC Ic to start with unler the leadership of Alk, Chief Counsel of Forefin Funds Control, who will remain lon enough to establish the office and will be TO Inded by a pormanent chilof WHO has not 50t been selected. The staff will Include Dyer or the General Counsel's office. Blake, NoCroa and Lauric of Forei a Punda Control, and a representative O the Division of Monetary Research. It is anticipated that the bull of the work In the early period will be Foreis Panda Control but = feel that the office should be established 0.0 IL general .Peasury office capable of assuming broader 260 onsibilities an the situation may septant. As In the COOD of other Treasury field offices, it will report to and receive directions from Harry Mite ILD Assistant Sepretary. If you agree TO will procced as indicated. SecretaryM of the treasury Approvad Free ll lot tter to Ws. Green thanking . for his testimony on 243 244 etton Woods W. c-cts MAY 4 1945 May 4, 1945. My dear Mr. Secretary: Dear Mr. Green: I want to thank you for your splendid testimony before the House Banking and Currency Committee on the Bretton Woods Agreements. Your support of the proposals is extremely valuable and I know that the Committee was very much impressed with your statement. Sincerely yours, It has come to the attention of this department that various groups OF committees under the sponsorship of the State Department, such as the "Special Committee on Communications, are engaged in formlating plans concerning postwar international communi- cations matters, which include preparation for partiel- pation in international communications conferences. The Treasury Department, while not at present operating communication facilities in the International field, anticipates renewed activity in that respect upon the return of the Coast Guard to the department at the conclusion of the war, and is inter- ested present formulation of the in its postwar activities be conducted. accordance in the withthe In which accordingly policies will has addition, Treasury Department participated traditionally in the formulation of Signed H. Morgenthau, Jr. national communication policy and international as well as domestic communication studies and discussions. It is therefore requested that this department be permitted to designate . representative on the Special Mr. William Green, President American Federation of Labor Committee on Communications and such other committees as the State Department may consider appropriate. Sincerely yours, Washington, D. C. Signed H. Morgenthau, Jr. The Honorable The Secretary of State HEG/mah RB:00 4/30/45 PRECISION ADE MARK MICROSTATT MICROFILM ROLL NO. 245 - 4 1945 My dear Mr. President: with reference to your letter of May 2, I - making arrangements for the elesent listens between the Treasury and Mr. Pauley and his staff, and one of - assistants is on Mr. Panley's staff. You may be assured that Mr. Pauley will obtain any information which he may desire. Faithfully yours, (Signed) H. Morgentheu, Jr. The President, The White House. 5/4/45 246 THE WHITE HOUSE WASHINGTON The Honorable The Secretary of the Treasury fly Guar Hr. Secretary: As you no doubt stready know, 1 have appointed Ur. Cowin = Pouley an Use United States Representative on the Allied Reportions Commission with Use reak of Ambression. 1 au particularly decirous of having the activities of Mr. Pouley and his staff thoroughly coordinated with those of other Federal agencies which are concerned with our laternational economic relations. In order that there any be unity of national policy, I should appreciate 1: if you would arreage for close licison with the Separations Commission so that it any be currently informed of any contemplated transactions of . financial or other character with any of the Allied Nations. Each information will be assential in guiding our Reportion Representative in his nogotiations with other Allied powers. Very cordinally, RECISION MICROFILM MICROSTAT ROLL NO 247 May 4, 1945. My dear Mr. Secretary: I have learned that by interdepartmental agreement an Air Coordinating Committee has been created which includes representatives of the Departments of State, War, Navy and Commerce and that the functions of this Committee will be to coordinate the activities of Government departments and agencies interested in the field of aviation. Among the subjects listed for the attention of this Committee I have noted that of operating rights in United States territory for foreign commercial and military aircraft. The Treasury Department, in view of its responsibilities with respect to foreign commerce, travel and finance, is very directly interested in this subject, as well as in some other phases of aviation. As an instance, the United States Coast Guard operated before the war a fleet of airplanes for life-saving purposes as well as for observation flights connected with assuring safety of life at sea. It is a matter of settled policy that the Coast Guard will again operate as an agency of the Treasury Department after the war. The Coast Guard is also greatly Interested in the matter of aviation telecomunication. It would therefore seen to be appropriate that the Treasury Department be represented on the interdepartmental Air Coordinating Committee. If you agree I should appreciate your taking such steps as are necessary that I may appoint a Treasury representative on the Committee. Sincerely, (Signed) H. Morgentheu, Jr. The Honorable The Secretary of State HEG/mah TAT CHARDING PROMETICATION OF ATT UNITED 1. there 14 steadily taurusing number of subject: pertaining to aviation which CALL for consultation and coordinated action by the departments and Indica at the Federal Government that ATB charged with reposibilities In the aviation field. In order to facilitate and proupte these objectives the undersigned believe It demirable to create, and hereby errate, AIS Air Coordinating Committee which shall consist of representatives, hereinafter designated, of the State, Mar, Navy and Commerce Departamita. 2. The functions of the Air Coordinating Committee will be to examine aviation problems and developments affecting more than are departaint or arecey, to coordinate the activities of the Government departamia and agencies Interested in this field, and to recommend integrated policies for and action by the departamts represented an the Committee, or to the President or any other Government agency charged with responsibility In the Field, all In accordance with and subject to the provisions of any present or future applicable Federal statutes. 3. The Cosalties will tale the foregoing action on any matters relating to International or dcaestic aviation and affecting more than one departam t or agency, which may be rubmitted to It by the President or by any member of the Committee as behalf of his respective department, or by any other Government departamt or agency. The following subjects are suggested for early attention by the Committee: In the International Field (1) International repersting rights for American commoncial and military aircraft. (2) Operating rights in thisted States territory for foreign commercial and military aircraft. (3) Rights to air teres and airways facilities, and construction, operation and saintenance thereof. (4) Foreign probleas of the Air Transport Command and Navul Air Transport Service. (5) Assistance to be accorded to foreign governmental and foreign airlines in the form of aviation training, technical advice, Aeronautical equipment, airport construction, et cetera. (6) Entahlishment and operation of navigational aids abroad for the benefit of United States commercial and military aircraft. (7) Instructions to be issued from time to time to the United States representative on the Interial Council of the Provisional International Civil Aviation Organization. In the Dogestic Field (1) Designation and operation of Federal airways. (2) Federal assistance to states and municipalities in estab- listment of airports and facilities. (3) Safety regulations. (4) Sea reh and reacue. (5) Communications. (6) Civil pilot training. (7) Aviation education. 4. After the Committee has unanimously recommended policy for or action by any departamt or agency or any subject submitted to the Committee, steps should be taken prosptly to carry out such recommdation. The Committee may request special or periodic reports from any department represented on the Committee with respect to action taken in accordance with the Committee's recommendation, and is charged with the responsibility of following each such matter closely so as to be in A position to assist in the completion of the objective or to make further 5. The Secretary of State, the Secretary of War, the Secretary of the Navy and the Secretary of Conserce will each designate a representative of their several departments to serve on the Committee, with the right in each such representative of appointing an alternate to act in his absence. The following representatives are hereby respectively designated by the undersigned until further notice: -2- Mr. William L. Clayton, Assistant Secretary of State; Mr. Robert A. Lovett, Assistant Secretary of Kar for Air: Mr. Arteun L. Dates, Austrant Secretary of the NAVY for Air Mr. WORLD A. K. burden, Assistant Secretary of Commerce. Kr. William L. Clayton shall act as Chairman of the Committee. 61 Committee Hall LAVO IN secretariat, which shall be Idexted at the building oceuptes by the Departamt of Commerce. Mr. Thmoders ⑈. Wright, Administrator of Civil Aeronautics, shill MILLE further notice be the Committee's Executive Secretary. de shall he annisted by a full-time working secretary and at least one competent and experienced representative of each departamt represented on the Cocal tiee. The Committee in authorized to call upon any of the departments represented on the Committee for any technical advice and assistance an may from Liue to time be required. 7. The Consittee shell invite the Chairman of the Civil Antinautics hard, or in his above ATI alternate designated by that Board, to atland each getting of the Counittee AS an observer with Lise privilege or participating to the discussions, but not as a sester of the Committee. 6. The Consittee shall held regular meetings GD specified dates not lera often than once every two weeks, and shall also hold special meetings from time to time as It my determine. It shall determine its ONE procedure. 8. the representatives 00 the Cosastine from the State Departamt, the Far Department and the Bury Department shall maintain close liaison with the representatives of their respective departamts on the State-Ref-lary CoorifasMing Committee, in ender that the State-Far-Havy Coordinating Committee will be currently informed as to the matters nicer consideration by and the decisions of the Air Coordinating Cas- sittee, and vice YESOR. Specific subjects my be referred by the State-Bar-Sary Constinating Committee to the Air Coordinating Conxittee, and vice verse, either for appropriate disposition or for special report. 107 iTem Canalties way appoint personal or MI See consilizes for the purpose of and reporting m and subject or class of subjects. The Committee any also request reports from, or otherwise utilize, any present interSepartmental committees which deal with subjects within its Jurisdiction and which have been constituted by the departments represented 00 11. If in the opinion of the J or Committee any such other committeen should to aboorbed by the Committee, or be reconstituted G.S. michaelment of the Cownittee, N report to that effect will be submitted to each of the undersigned. 11. Appropriate notice shall be given to key personnel of the of their GO departments represented on theSuch Committee of the will organization and to bring the Comuittee. personnel be directed functions to the attention of respective representatives the the Committee jurie- matters which in the opinion of such personnel fall within diction of the Committee, and can beat be handled through the Committee's sachtnery. 12. The above-designated members of the Committee are directed to hold their initial moeting at the earliest practical data and to complete the organization of their secretariat with a sintava of delay, Acting Secretary of State Therey L Uinson Secretary of War January forestal Secretary of the Navy Hawallace Secretary of Gommerce Y PRECISION MICROFILM DE MARK BOLL NO. 252 253 Secretary saw gave copy M. Paring Secretary Morgenthau - For Information Secretary Morgenthau - For Information Mr. Coe FC SUBJECT Conversations of the U.S. Treasury Representative Mr. Coe SUBJECT Conversations of the U.S. Treasury Representative in London with Mr. Playfair of the U.K. Treasury. in London with Mr. Playfair of the U.K. Treasury. Reparations Reparations 1. Mr. Playfair stated that be thought the British Government differed from the U. 8. with regard to the purposes for which the Reparations Commission in Moscow had been established. He stated that the British Delegation "was only prepared to go to MOBCOW and work out a program". after which, most if not all. of the original delegation would be replaced. Mr. Playfair stated that 10 understood that the American Delegi tion WAY prepared to go to MOBCOW and "camp indefinitely". ( 2. Mr. Playfair stated that the British Delegation had not yet been selected but that it would be headed by someone with the rank of Minister. The British Treasury would be represented on the delegation by Mr. Playfair or Sir David Valey. 3. Upon questioning. Mr. Playfair at ted that the Russians were not plenned by the delay in naming the British Delegation "but they were in no position to complain". Mr. Playfair recribed the delay in naming n delegation to the fact that the Prime Minister had not yet clarified his 1. Mr. Playfair stated that he thought the British Government differed from the U. S. with regard to the purposes for which the Reparations Commission in Moscow had been established. He stated that the British Delegation "was only prepared to go to Moscow and work out a program", after which, most If not all, of the original delegation would be replaced. Mr. Playfair stated that he understood that the American Delegation was prepared to go to Moscow and "camp indefinitely" 2. Mr. Playfair stated that the British Delegation had not yet been selected but that it would be headed by someone with the rank of Minister. The British Treasury would be represented on the delegation by Mr. Playfair or Sir David Waley. 3. Upon questioning, Mr. Playfair stated that the Russians were not pleased by the delay in naming the British Delegation "but they were in no position to complain". Mr. Playfair ascribed the delay in naming a delegation to the fact that the Prime Minister had not yet clarified his ideas "concerning what the reparation program should be". Playfair estimated that it would probably be a month or six weeks before the delegation was named and ready to leave. ideas "concerning what the receration program should be". Playfair estimated that it would probably be a month or six weeks before the delegation was named and ready to leave. SG:hab 5/4/45 ( SG:hah 5/4/45 RECISION TRADE MAR MICROSTATI MICROFILM ROLL NO. 254 25 MAY 1945 My dear Mr. Secretary: This is to admoniedge receipt of your letter of April 25, 1945, in which - enclosed a document of the Insertive Committee - Economic Foreign Policy recommending the policy which this Government should pursue with respect to German participation in international cartels and combines. Very truly yours, (Signad) H. Morgenthau, Jr. The Monorable The Secretary of State PRECISION TRADE MARK MICROSTAT NG.U.S.PAT.OFF MICROFILM ROLL NO DEPARTMENT OF STATE WASHINGTON In freely refer to April 25, 1945 A-C SECURITY The Secretary of State presents Lis complimente to the Honorable the Secretary of the Treasury and transmits herewith n document with respect to the policy of this Government toward Service participation in international cartels. The document, which HRE by the Executive Comittee on Reconomic Zoreim Poliey and in which the Secretary of State concure, has been transultted to Winant in London for is gaidance in discussions with members of the European Advisory Countitee. Inclosure: KOEST 2-41/45 POLLICTORY RECISION TRADE MARK MICROSTAT REG. U. . PAT. OFF MICROFILM ROLL NO SECRET 60 ECEFT 0-61/45 SECRET April 6, 1945 EXECUTIVE COLDETER ON ECONOMIC FOR.IO POLICY Conmittee on Private Monopolies and Cartels U.S. POLICY TOWARD GERDEN PARTICIPATION AA CASHIER ARE (As deproved by the Executive Connittee or Economic Foreign Policy at its mooting on April 03 1945.) ECEFP D-61/45 SECRET April 6, 1945 EXECUTIVE CONSIDTEE ON ECONOMIC OREIGN POLICY Committee on Private Monopolies and Carteln U.S. POLICY TOYARD GERMAN PARTICIPATION m INTERNATIONAL CARTELLS ABP SUIDARY I. Problem The purpose of thin paper in to formulate a basic United States position, for discussions with Allied governments, on the policies and the measures to be adopted by the control Allied control authority operating in Germany with respect to German participation in international cartels, and combines. The reconmendations made below pertain primarily to the period during which the Allied control authority operates in Germany, although it in recognized that some of the measures my be initiated by the various governments before the control authority is established or my be continued by other after that authority in abolinned The recommendations are also concerned fun4amentally with cartel and combine participation rather than general trade relations, and with action by the central authority rather than by the United Nations. However, since the mensures to be taken are clouely related to German foreign trade in general and can be mode more effective if accompanied by certain cooperative actions by the several United Nations, several supplementary reconmendetions have been included, II. Assumptions It in assumed: A. That a central Allied control authority will be established in Germany, with full powers to control or otherwise dispose of Gerson interests or participation in International contracts, combines or trade. B. not thin central Allied control authority will take measures to identify and control all German foreign holdings in neutral and ex-enemy countries. C. That I C. That any long-run policies developed will be directed toward preventing the reestablishment of German participation in international cartels or combines, and will, therefore, be consistent with the recommendations of this paper. III. Recommendations A. Cartel and Combine Recommendations. The central Allied control authority shoulds 1. Terminate promptly all German participation in international cartels or other restrictive contracts or arrangements and forbid the negotiation or new agreements. TO effect such termination, such techniques 68 may be available and uneful may be employed, including, without limitation, stoppage of performance, repudiation, emictment or legislation prohibiting performance and making performance 11- legal, and 20 forth. 2. Require registration of all international cartel agreements in effect in Germany at any time and for any period after January 1. 1933. 3. Require registration by all German firm of their foreign submitterios, affiliates, substantial foreign assets, and contracts evidencin. substantial community of interest eits foreign persons. and or foreim companies with which they are Joined by Interlocking officers or directors. The Foristration should coll for current information as well as such historical Infor- motion as the control control muthority may deoire. 4. Organize InmedIntely In Germany IN systematic collection, soarch and analyain or Information relating to German participation in international curtein and COMbines. 5. take available data collected under autperographs 2 and 3 hereinabove and other pertinent Infor- nation on industrial organization to United lotions covernnents. B. Supplementary Recommendations. In reconnition of the close interroction OF restrictive and "normil" Germinn foreign business relationships or holdings, and the donnequent necessity or tokinr supplementary stem with respect to to all German international trade relationships or foreign holdings in order to effectuate a policy of terminating German participation in international cartels, combines or other restrictive arrangements, It la also recon- menied: 1. That the central Allied control authority: (a) Plan to control closely all important German foreign trade relationships, even though not immediately identifiable as restrictive, with G view to preventing the reentablishment of restrictive arrangements: (b) Conduct or control all puniness conmunloctions between Germany and foreign countries; 2. That the United Nations, through appropriate machinery . follow a policy, in controlling or disposing of Certain property in neutral or ex-eneny countries, di- rected to the avoidance of private monopolies and combines. 3. That the United National seek apreement on 8 policy of controlling or disposing of German property within their borders directed to the avoidance of private monopolies and combines. IV. Comments A. The recomondations mide above apply to restrictive contracts and arrangements including those which concern patents and licensed under patents. Special problems relating to the disposition or Gerean-omed patents under licenses to patents abroad or patents granted by the Gernan government or licenses thereunder should be discussed in a neparate memorandum. B. When licenses under 2 foreign-owned German patent or contractual rights to use foreign-owned property in Germany are terminated pursuant to the in Section III It 10 anticipated that throuch compulsory licensing. requisitioning, or otherwise the central Allied control authority will be able to make such licenses or property available for use. Other problems peculiar to foreign-owned property situated within Germany have not been considered In the above recommendations. It is belioved PRECISION TRADE MARK MICROSTAT REG.U.S.PAI. OFF MICROFILM ⑉4⑉ believed that certain of these problems may also require separate treatment. C. On the basis of studies now in progress recommen- dations will be mide-with respect to the acquisition and dissenimation of German technical and industrial Int orantion, whether or not protected by patents. Theae recommenGations will be designed to further the widest and most equitable distribution and use of such information. Hence, no recommendation on the subject his been made above. D. problem of domestic cartels ban not withmemorandum. The German since it in believed beendealt In this that treatment or thin topic 1= best postponed positing approval of the present document. Attachment: ECEFP D-61/45 U.S. POLICY TOWARD GERMAN PARTICIPATION III INTEREATICIAL CARTELS AND COMBINES I. PROBLEM AND PURPOSE OF THE PAPER German participation in international cartels and combines provided an important source of the economic power which code German aggression in this war possible. Any future German effort at reviving aggression and making a third attempt at world domination would very likely again seek to use international cartel and combine relationships. Therefore the effective disarmanent or Germany and effective measures to prevent future aggression by Germany require that German participation In international carteln and combines be promptly and thoroughly terminated and that any future attempt to reestablish such relationships should be prevented. The purpose of this paper is to formulate n basic United States policy on the measures to be adopted with respect to German participation in international carteln and combines. The Allied authorities occupying Germany will have full power to control or otherwise dispose of German interests or participation in International contracts, combines or trade. In drawing this paper it was assumed that such authority would be vested by the Allied governmenta in a central Allied control authority in Germany. The principles would be equally applicable, however, if all or part or the authority for donline with thono problems were veated in the heada or the proposed deparate zones of occupation, or were delegated by the central authority to one of its orians. The recommendationa are directed to the United States representatives on the agency having jurisdiction. Certain or the measures recommended herein require to nome extent extraterritorinl application, and accordingly the full effectuation of these measures may require diplomatic support. Sone of the required measures, moreover. would be most effective 10 accompanied by certain cooperative actions of the several United Nations. Proposals for such cooperative actions are covered in supplementary recommendations. The recommendations made below pertain primarily to the period during which the Allied authorities maintain control of Germany. It in recognized that it may be possible to perpetuate anti-cartel and anti-combine measures after the relinquishment or administrative control, While particular -2- thile particular consideration was given to various policies and neasures which might be employed after the relinquishment of Allied occupation, it vas judged that Lt would not be wine to recommond specific policies ard techniques for the post-occupation period at this tinc. It WORD felt strongly that the policy of terminating Gernan participation in international cartels and combines should be adopted as n permanent policy, but It La considered that the exact implementation or this policy for the long run post-occupation period may be best formulated in the light of other plann for permanent Corman disarmament, internal developments in Germany, and proposals for cooperative international action to eliminate or restrict all cartels. The thorough implementstion of the anti-cartel policy during the period of occupation should not in any way bo limited by anticipations that long range policies will qualify the basic objectivo on parmently eliminating Cermun participation in international cartein and combines. The reconnendotiona herein are also concerned primarily with cartel and coubine participation rather than with Garmin foreign trade and business relations in general. 8'.00, however, the measures to be takon are closely related to the general German foreign trude problem, supplementary roconmendutiona relating to foreign trade and communications are included. Several matters closely related to German participation in international cartels and combines have not boun considered in the present paper. (1) The problem or German domestic cortela and combines FOO believed to be best postponed pending approval or the present document. (2) The special problems relating to the disposition of Gerain-owned paturts or Licenses to patents abroad, and to patents granted by the Derma lovernment or licenses thereunder should be the subject or sejurate study. (3) Problems relating to the acquisition and dissomination of-German technical and Industrial information are being studied by thin Subcounitted. The Subcormittoo 111 attempt to formulate proposals to further the distribution of puch information in the widost and most caultable number. (4) Certain other special cartel and combing problems raised by ownership on property in Curminy by foruign nationale should also be the subject of a separate memorandum. II. CARTELS A. Objectives The general alam of U.S. policy should be: 1. To turninate all German participation in international cartel agreements; 2. To prevent PPRECISION TRADE MARK MICROSTAT HGG.U.S.PAT.OR MICROFILM ROLL NO 2. To prevent the racstablishmont of German relations with intornational cartels. B. Recommondations 1. The control Allied control authority should terminate promptly all German participation in international cartels or other restrictive contracts or arrangements and forbid the negotiation of now agreements. To effect such termination, such techniques 00 - may available and useful may be employed, including, without limitation. stoppage of porforaango. repudiation enactment of locislation prohibiting performance, and making performance illegal, and BD forth The for prompt tormination contemplatos that It will bo effectuated by some form of central order of the military government authorities or by some equally prompt procedure. Measures which would involve individual examination of particular cartels and cartel agreements in advance of such an order would necessarily involve long delays inconnintent with the ob dective of prompt action. Any such delay would be likely to crosto doubt in the minds of both German and foreign participants in Gorman cortel arrangements oz to the policy really intended to no followed, and would tend only to nake effectuation of the recommendations contained herein more difficult to achieve. The manner and form of corrying out those rocorusondations should be desiened to emphasize the thorouchnuss and finality of the tormination of German cartel participation. The Subcommittee's recommendation that the authorities administering the policy reconsinted haroin have a choico or Iona) toohniquea for effectusting thin policy should not be construed to qualify in any way the basic recommendation for prompt and thorough tormination of Gorman participation in certain and similar arrangements. The criterion in choosing available 1dral techniques should effectIvenums and promptnonn in carrying out the basic rocormondation. other quostions such D.D the financial gain be or losa from the use lugal technique en opposed to another should be subordinated to the basic recommendation. Cartel contracts should be dufined broadly enough to include the following classon of agreements: S. Agrocmenta betwoon two or mor. sollers or botwoon two or mor buyers which provide for. or have the effect of fixing prices or terms of solo, dividine A or allocating markuto or fields, assigning quotas or controlling production, capacity, onlon, purchases, exporto or importe; b. Agreements -4- D. Agreements between a buyer and one or more sellers or between a seller and one or more buyora which 60 boyond simple purchese and sale transactions OZ geney agreements and which noo omplish any of the foreiging results; O. Agreements pertaining to patents which 60 beyond simple grants of exclusive or non-exclusive righto and which accomplish any of the foregoing results; and d. Any other agreements, without limitation, which cono within the scope of the Cartell Vorordnung of 2 November 1923, as amonded, and the Marktaufsicht Vorordnung of 20 Octobor 1942. 1 Agreements falling within the Boopo of this definition and in which both Gurman and other nationals participate would be subject to the racommondation above. Moosures to effect the prompt termination of Corman participation in international cartela or other restrictive contracts or should be all inclusive in character. The control authoritics should not roly upon the legal hypotheain that the war terminated all contractual relationships between nationals or countrion at war with uncl. other. It is possible that the legal status or such contractual relationships may be construod in somo courts and in BORO countrion to bo that of suspension rather than that of termination; it may oven be found in BOBO instances that performance continued despite the war or that the contracts or arrangements nade specific provision for reinstatement after hostilities, Positivo action in U orefore required to torminato 01 oontractual arrangements another or not suspended or torminated by the WILE or WALT measures or various bolligerents. It is recognized that the extent or the juriodiction of the Allied control authorition over contractual relation. ships having an international character in not easy to define 17" Under Vorordrung uber Auskunft,Milcht or I3 July 1923 (RCBI.. I 723/24) all business firms in Germiny wore obligated to furnish the Kinister of Economics such information an he might demand. This right has been utilized to secure a wide collection of information concerning cartel agreements. This registration of information has been further extended under the Gorann price control laws which require the approval of the Price Commission for any cartel agreements concerning prices or torms or sale. Such agreemonth are therefore occussarily registered. -5- define. Koreover, it is possible that the courts of SOCC countries will chollenge the legality of termination by the Allied control authorities and will attempt seizure of the property of German participants to compensate nonGerman participants who sue for breach of contract. Although this possibility in recognized, it must be faced na an incident of the recommended termination of contracts. In any event, full implementation of the anticartel recomsendations made herein will require measures through diploantic channels 00 well CD through the control authorities in Germany. The possibility that termination may involve consequent financial disadvantages should in no way deloy or otherwise impede the basic objective of prompt and thorough termination of German participation in international cartels. It in the opinion or the Subconmittee that no substantial hindrance to the production or trade of Germany during the control period will result from the termination of German participation in international cartel agreements. Upon the collapse or Germany, private trade between Germany and other countries in likely to be forbidden; it will, in any case, be at D standstill. At a later time, It may be resumed but only under strict control to further the purposes of the United Nations rather than tilone of private commercial interests. The Subcomittee in aware of only one possible adverse effect upon German output. Licenses under foreign-owned German patents or contractual rights to une foreign-owned property in Germany which are held by Germans under restrictive cartel agreements with foreignors would be terminated pursuant to the above reoorutendation. It is anticipated, however, that through compulsory licensing, requisitioning, or otherwise, the central Allied control authority will DO able to moke such licenses or property available for continued use in Germany. In order to ensure the zost widespread recognition of the termination of German participation in international cartel contracts, and in order to minimize possible adverse consequences or such action both within and outside of Germany, the Subcomsittee's recommundation provides for the utmost flexibility in the selection of techniques for the accomplishment of its purpose. The Subconmittee considers that It is properly the Chak of the authorities administering the policy to select the most effective moons. Whitever procedure or procedures are adopted, however, should be consistent with a prompt effectuntion of the general policy of terminating Gorman participation In international cortels and combines. 2. The central =61 2. The central Allied control authority should require the registration of all international certel agreements in effect in Germany at any time and for any period after 1 January 1933. Severe penalties should bo established for non-compliance. Information obtained from this register should be made available to n11 interested United Unitions governments. Comment Compulsory registration of international cartel agreements would establish at a single source n comprehensive collection of data from which could be derived an accurate picture of Germen international cortel rela- tions both before and during the war. This information will be Involuable to the authorities charged with preventing the rouatoblinhment of such relations during end after occupation. C. Supplementary Recommendations The Subcommittoo recornizes that there in n glose connection between restrictivo cartel arrengements and ordinary German transactions and consunications with foreign nationals nn firms. The nood for control of German foreign trade and communications, of course. transcends the objective of terminating cartel or combine relations. Supplementary steps in Mim aren pro, however. necessary in order to effectuate the policy expressed in the recommunntlon of Phrograph II, B, 1. 1. The centrol Allied control authority should plan to control closely all important Guraca foreign trade relations, uvon though not immediately identifiable ILS restrictivo, with's vice to preventing the recetcblishment of restrictive certal arrencomento. Comment It apposro likely that German foreign trade for somo time after the beginning of military occupation BILL be conducted by direct nugotiation butteen the Allied authorition in Germany CBG foreign governments. It in possible, howevor, that two resumption of privoto trade. under cuitable governmontal controls, will be purmitted before the end or the Alliod control period. It should bo ono or the objectives of such control to prevent the restablishment or restrictivo cartol arrongements. The -daptation of forolan trudo controle to this purpose will requiro onreful study. Pho -7- The most obvious control tochnique, on export-import license systum, in insufficient in that it permits judgmont only on applications for export or import effirmtively ande. It in, therefore, unablo to toko account of the failures of cortain types of applications to appoar boccuso of the operation of certal agreements which prohibit or limit exports of curtain products or exports to cortain marketa. The extent to which German forcian trade should bo affirmatively directed by a public agency undor Allied control should, therefore, be explored. 2. The control Allied control authority should conduct or control all business communications between Germany and foreign countries and all communioations between German companies or representatives thereof and representativos or foreign companies in Cornsny. Conment This measure in countly necessary for the accomplish- nent or the anti-cartel objectives of this suction and the anti-combine objectives or Section III. An soon OR hostilition coase, It may be expected that German participants in international cartols and the foreign cartal partners of these firms will GOVO to reestablish their pre-imr connections. Similarly Gorgan firms with foreign assets, submidiarion or affiliatos, or Joined in communities of interest with foreien firma will attempt to rocatablish their connections and controls abroad. Failure to prevent such activity will not only Joopardize the success of the anti-cortol and anti-combinc programs here put forward, but my also enable German firms to effect concenled transform of foreign property to cartel partners or other affiliated interests abroad in order to frustrate soizure, and to obtain foreign patont rights on German warting Inventions by entoring applications in the nages of foruien namoeln ton willing to got 00 cloaks. Hilltary government should, therefore, conduct or control all relevant business communications, and should admonish all foreign nationals, no matter what thoir official or somi-official status, who are permitted to enter Germany during the Alliod control period, that international business communications may be mide only through official channels. III. COMBINES A. Background and Objectives German economic ponetration of other countries through participation in combines having international intereste han been -8- has been used by Germany in the same way SS its participa- tion in cartels, to prepare for war. politically and economically. Continued German participation in such combines involves the same dangers to future security 0.8 continued cartel participation. Therefore, Allied occupation policies in Germany should be directed just an decisively toward thorough and permanent rupture of Gernan interests in international combines. However, no specific recommendation is made here for the effectuation of this policy because it is believed that stops will be taken to marshal all German-owned foreign property and apply it to such purposes BB the United Nations may deen appropriate. Such a program would effectively dostroy Gernan interests in international combines. Depending upon the direction which such a general program takes, special nonsuron may be necessary to prevent future German participation in international combines. Supplementary recomaondationa may be found necessary st B later date to meet this problem. In keeping with this country's general policy against international combinen and monopolies, the disposition or German interests in international combinos should be managed with a view to avoiding measures which would strengthen non-Gernan private monopolies or combines. B. Recommendations 1. The central Alliod control authority in Germany should require registration by all Gercan firms of their foreign subsidiarios, affiliates, substantial foreign assets, and contracts evidencina subscontial community of interest with foreisn persons, and of foreign companis with which they are joined by interlooking officers or directors. The registration should call for current information AD well BD such historical information 0.8 the central control authority may desire. Information obtained from this register should be made available to all interested United Nationa governments, Comments The adoption of a general policy of marshalling German foreign assets and applying them to such purposes an the United Nations may deen appropriate would necessarily involve the compilation of detailed information about Gorman foreign holdings. Thus, Law No. 53, prepared for issuance by SHAEF prior to German defeat or surronder (see Handbook for Military Government in Germany), provides for filing detailed information as to foreign exchange assets and liabilities. liabilities. However, the special problem of detecting and uprooting German international combine relationships may require information from German business establishments which would be in sone respects more detailed than inform- tion likely to be assembled solely with n view to marshalline foreign exchange assets. The foregoing reconmendation in intended to comprehend the types of information which would be peculiarly desirable for denling with combine problems, including information indicating German influence exercised over foreign property and companies by means other than ownership. This information should be integrated with the information assembled for the general foreign assets survey. C. Supplementary Recommondations The basic interests of the United Nations in dealing with the foreign aspects of the German economy will be, primarily, to root out German economic interests and connections in foreign countries 0.8 a measure of security, and, secondarily, to make German foreign assets fully available for such use or disposition 0.8 the Uni ted Nations may deen appropriate. However, it is also of substantial importance to the United States to carry out these measures in such a way as best to support its own policy against private monopolies and combines. In this connection the Subcommittee makes the following supplementary recommendations: 1. That the United Nations, through appropriate machinery, follow a policy in controlling or disposing of German property in neutral or ex-enemy countries, directed to the avoidance of private nonopolies and combines. 2. That the United National seek agreement on a policy of controlling or disposing of German property within their own borders directed to the avoidance of private monopolies and combines. Consent The avoidance of private monopolies and combines in the disposition of former German property in any given industry my be furthered by sale to interests independent of existing corporations or combines exercising substantial influence in that industry, by salo to governments for public operation, by taking broadly available rights under patents and trade-marks (through non-exclusive licensing, dedication to the public, or other appropriate means). The United States should preon for the adoption of such policies by any agency established to control or dispose of -10- dispose of German property in neutral and ex-eneny countries. This country should likewise seek to secure the agreement of other members of the United Nations to the adoption of such policies within their own borders. IV. PRESERVATION AND ANALYSIS OF RECORDS AND FILES Recommendationa calling for the registration of certain information concerning German participation in international cartels and combines are offered above in paragraphs II, B, 2 and III. B. 1. Additional information will, however, be required to supplement and clarify the data registered. This additional information will also be required for the preparation of lonr-run plana for the control of German foreign business dealings. A. Recommendation 1. The central Allied control authority in Germany should organize inmediately a systematic collection, search and analysis of information relating to Gernan participation in international cartels and combines. Pertinent information so gained should be made available to interested United Nations Governments. Comment In the preparation of long-run plans for the control or German foreign business relations, all evidence which becomen available in Germany bearing on the plans, methods, and results of German economic restrictioniam should be fully explored. The first stop in this direction has already been taken in the preparation of a military government decree establishing severe penalties for the destruction, mutilation, sequestration, or deceptive alteration of books, correspondence, records of any business enterprise, association, institute, concern, or governmental control agency, no matter to what topic such records relate -whether technology, ordinary commercial intercourse, political activity, internal administration, or other legal, technical or economic transaction or relationship Equally vital are a speedy file search, reproduction of inportant documents, and summarization of evidence by an appropriately trained staff of lawyers and economists, versed in German industrial history and organization. TRADE MARX MICROFILM MICROSTATA ROLL NO cI 272 271 0 May 4, 1945 The following is . letter from T. Maxwell Anderson, an employee of Treasury's Foreign Funds Control, who was recently released from . Jap prison camp in the Philippines after three years' imprisoment The unreality of developments of the past day and a half is great that still keep asking myself whether it has really so happened. You'll get the official story in the newspapers, so I'll just indicate where I fit late the picture. First the situation in camp was critical. He'd been on . Fellow Employees: misimum diet for 5 months and for the last two days. wo'd been issued only . pound klin can of unhusked rice. This we were It is with a sense of gratitude and sincere appreciation heaking by hand. The Japa had turned over enough addi tional palay, as it is called, for two more days. After that well that I thank each of you for your cooperation in the Treasury the boys had to come in, that's all. I had enough reserve rice for about two a weeks, but many interness had no reserves at all. effort to help win the war. Because of this past support, I know that I can continue to count on you. or course the boys were close. No could hear the attack on Manila and after that the firing was drawing nearer. But how I as asking each of you to remain on the job after V-E Day, strong the Jape were between the boys and us. we had no way of knowing. Fortunately, we didn't realise the precariousness of and assist in reaching total victory. V-E Day must not inter our position insemuch as we hadn't heard of the Jap treatment of civilians is Manila. He were just waiting almost from day to day for the arrival of the American forces. rupt the important work that the Treasury Department is doing in the war effort. It is your patriotic duty to ... this war . PRECISION to . finish, and victory in Europe is by no means the and of the struggle. The nation needs you and the Treasury Department needs you. Stay on the job as your contribution to a speedy and successful conclusion of the war. Sincerely, (Signed) H. Morgenthau, Jr. Yesterday (Wes it yesterday It ..... as if it were just dress or something which happened in - former life) morning our monitor called us at 6.45 for roll call. I had just gotten up when - heard many planes coming over. We rushed out to see nine heavy planes which suddenly dropped parachutists. In few minutes bullets were outting through the barracks over our heads. In half an hour the Americans and the guerillas controlled the camp and after another half hour or . little longer I was on an amphibious tank on my way up Logune de Bay. The American army and its equipment are beyond description. We'd been seeing nothing but the run-down Jap a may dressed is raga and armed only with bolt-action rifles. and suddenly here we were in the hands of handsome, well-fed, husky, well-mannered, informal and supremely efficient boys whose clothing and equip- ment are thrilling to behold. I spent all yesterday just looking at the amphibious tanks, the automatic rifles, the jeeps and the trucks and just shaking my head. But the best equipment alone would not be enough. I wish you could ... the boys doing this job. Their morale and coopers. tion are striking. Our rescue was perfectly timed and the follows who accomplished it seemed se quiet and polite and helpful. Bay I'm proud to be an American! 274 -2- 273 TREASURY DEPARTMENT ( INTER OFFICE COMMUNICATION DATE May 4. 1945 C Following a complaint that under existing disposal procedures purchasers of surplus commodities have no assurance of price stability, consideration is being given to methods Secretary Korgenthau TO FROM J. W. Pehle The following is a summary of significant developments in the Surplue Property and Procurement Offices for the week ending March 31, 1945: Surplus Property: Total disposals for the month of March amounted to $6,023,573 and the inventory balance as of March 31 totaled $86,143,991 reported Cost. by which we may undertake in our sales programs to stabilize prices at which surplue goods are sold. Discussions were held with representatives of the Office of Price Administration concerning surplus property pricing problems. The interdepartmental Advisory Committee on Procurement met with members of our staff to discuss problems in connection with the disposal of surplus property to Federal agencies. Representatives of the Educational Buyers Association discussed with us problems in connection with the acquisition of surplus property by educational institutions. A press conference was held for the purpose of explaining our method of selection of an advertising agency. of Army shoes were sold to relief organizations in this country for shipment to Belgium and Italy. Arrangements The Surplus Property Board submitted its final draft of a regulation designating disposal agencies for classes of property and for territories and possessions. It contained certain new provisions which would assign to Treasury major disposal functions in Havaii, Puerto Rico, the Virgin Islands, Alaska, other island possessions, and probably the Philippines. A letter was prepared to the Board suggesting that the Department of Interior WAS the logical agency to handle most disposal functions in the territories and possessions and that in any event this Department did not desire to handle the disposition of property in the territories and possessions except for such classes as it disposed of within the continental United States. sold to the original manufacturers. The proposed program for the disposition of outdated The Surplus Property Board submitted its latest draft of a regulation for *Priorities of Government Agencies and State Governments". There are certain sections as to which Arrangements were completed for the sale to the Army Medical Corps and the Quartermaster Corps of 46,000 steel folding beds, 46,000 new cotton-filled nattresses, 9.000 and fracture beds, 9.000 new innerspring gattresses, new 9,000 new canvas folding cots, which were declared to us the Office of Civilian Defense. Approximately 700,000 by electric fuses vere transferred to the Navy and 50,000 pairs ( are being made to sell 100,000 pocket-type compasses to the Boy Scouts of America and the remaining 500,000 will be panchromatic aerial film has been approved by the Department which of Justice. A form of contract is being prepared provides for testing to assure that the film will be satisfactory for civilian use. subject to the return to the Government of film failing upon text, and contains various provisions to assure that the film will be given expeditious, wide and equitable distribution in order to an alleviate the serious current shortage in civilian supply and to protect the public against misrepresentation on the part of sellers. the interpretation is not entirely clear and a letter is being drafted for the transmission to the Board calling their attention to the doubts which have been raised. Procurement: Total purchases for the week amounted to $14,685,526.88. including $14,300,000 for Lend-Lease (schedule attached and $385,526.98 for regular purchases. ( 275 276 -3- Carloadings of Lend-Lease materials totaled 4,668 care. Unusual requisitions for the week included 8,471,000 yards of denim, flannel, chambray and print-cloth for France, 50,000 metric tons of crushed rock salt for Belgium, 4,271,270 pounds of rags for France, 263 engine lever vall clocks for the United Kingdom and 799.704 pairs of shoes for civilian use by UNRRA for distribution in liberated areas. Unusual purchases for the week included 200 tons of Butcher's Wrapping Paper for Ruesia, and 70,000 vials of aerus to be used to combat hog cholera in Greece. The annual meeting of the National Conservation Program will be held on April 20. and plans are being made for discussions. The shortage of paper will be one of the major topica at this conference. ADMINISTRATION: The study to develop the comparable efficiency of the Procurement Division and Public Buildings Administration teletype facilities was completed. It developed that considerable savings can be effected by utilizing the PBA facilities and the regional offices will be advised accordingly. The statistical report of Lend-Lease Operations for February 1945 WAS completed. This report covers a comparison of the average dollar cost of contracts placed per month to administrative expense, and includes statistics of the number of requisitions received, contracts placed, care shipped, inspection and expediting reports prepared, invoices received and vouchers scheduled for payment. There were 120 volunteers for blood donations at the Red Cross Center for the month of March, an increase of 25% over the 90 volunteers for February. As a result of negotiations with the Foreign Economic Administration and the War Production Board. clearances will be obtainable for the first quarter on all materials required by the Philippine Government for official purposes with the exception of typewriters on which no deliveries will be made during the first quarter for the reason that the Government allotment had been taken up prior to the request having been made to the War Production Board. ( MICROFILM MICROSTAT ROLL NO. LKND-LEASE TREASURY DEPARTMENT. PROCUREMENT DIVISION STATEMENT OF ALLOCATIONS. OBLIGATIONS (PURCHASES) AND DELIVERIES TO FOREIGN GOVERNMENTS AT U. S. PORTS AS OF MARCH 31. 1945 (In Millions of Dollars) Administrative $2457.4 $172.9 $5936.4 $2583.1 Expenses $18.6 (6020.4) (2628.1) (2457.4) (172.9) 31.6 11.1 $ a $ I 23.6) .4) $2121.5 $105.2 $704.4 (743.4) 93.2) 46.3 65.5) $17.5 $4798.5 $2102.6 (4784.2) (2100.7) (2113.5) (105.2) $1886.6 $ 30.4 $3732.8 $1613.4 ( 30.4) - (3707.2) (1882.9) (1591.6) Undistributed $112.6 - Governments at U. S. 1.1) 19.0) $ Deliveries to Foreign 26.0) 1.9 I (Purchases) $ Obligations 115.5) ( Cleared by W.P.B. $ 108.4 19.4 $ Requisitions not 140.0) 26.7) 19.4 ( in Purchase 26.3 3 Requisitions 160.2 (18.6) - China - Russia - U. K. - Allocations Total Miscellaneous & ( PRECISION (17.4) $451.7 (447.4) $202.4 (202.3) Portso *Deliveries to foreign governments st U. S. Ports do not include the tomage 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 24, 1945. o MICROFILM TRADE MARK BOLL NO 278 279 MEMORANDUM FOR THE SECRETARY Explanation of Difference May 4, 1945. Mail Report The difference of $84,000,000 in the The tremendous events of the past week. both abroad and at home, were not strongly linked to Treasury matters, and, therefore, the week's mail was low both in numbers and in quotable material. Mest of the correspondence was official in character, with few letters from the public at large, and most of these routine. Allocations figure in due to adjustments in the figures for the United Kingdom and Miscellaneous and Undistributed column. In promotional ideas about the Seventh Drive, the Iwo Jim picture continued to be of main interest. Re-designs of the picture for special purposes, and poems and slogans to be used with it were a part of each day's mail. There were several cordial replies to form letters, and one more report of an Industry that has already exceeded its quota. Many of the routine inquiries about bonds concern problems of inheritance, and it is now not unusual to receive a request for a full list of securities owned by a deceased member of a family. There continue to be complaints about Government unwillingness to recognize the usual form of Power of Attorney. A number of wives have found it impossible to reach their soldier husband with the form supplied by the Government, and find they cannot cash bonds or salary checks with the implements drawn up by banks or lawyers for this purpose. Complaints about delays in receiving bonds were low -- only 9 being received. A Tax mail was very light, and there were only 20-odd suggestions for memorializing President Roosevelt. For the first time, these suggestions favored currency rather than some recognition through bonds. There was very little mention of Bretton Woods, and nothing on the California conference. 0 280 General Comments -2 Memorandum for the Secretary. May 4, 1945. Only donations swung upward this week. There were 9 in all, ranging from $1.50 to $6,000.00. One envelop contained $286.00 in bills, with no identification of the sender. Since the death of President Roosevelt, White House mail has dropped off noticeably. During the month of April, only 184 pieces of mil were forwarded, and more than half of these came before April 14. of these 164 pieces, 132 were re-routed, the remainder being handled in this Division. Mrs. Derrel B. Slagle, Dumas, Texas. As a last resort I am writing you. Enclosed you will find my Power of Attorney which was not honored by the United States Government. I do not know why. Instead, they sent a special form for Government checks only. This I sent on to my husband immediately, but he has never received it. I had to make a note for the amount of the check and the bank is holding the check as security. It was either make the note or move into I know not what with my three babies. Now the bank wants the money and, of course, I can't pay it unless the check is cashed. My husband is overseas and I have even tried to get another form to send him, but that too seems impossible. Sorry to write such a sob story but I hope you will help out. The reason, of course, that my husband gave me a Power of Attorney in the first place was so I could act, when necessary, in his place. 283 282 -3- -2Marion Tanner, Morristown, New Jersey. With the Seventh War Loan Drive about to be launched there is much talk about the instability of U. S. Government Bonds. One woman in our plant says that she has in her possession Liberty Bonds issued in the last war ( Unfavorable Comments on Bonds G. C. Gridley, Lake County Mortgage & Realty Company, and that they are of no value. Can this be true? Libertyville, Illinois. In December of last year, the writer who was co-chairman of the Sixth War Loan Drive addressed you requesting a statement with which to answer expressed apprehension on the part of several people that U. S. Government Bonds might be frozen by a moratorium or that some other restrictive conditions might be imposed upon the holders thereof. The replies made to my inquiry were not decisive nor conclusive. The volume of matter contained in the replies, in fact, would tend to increase rather than decrease the doubts of one who is not confident in the absolute sincerity and validity of Mrs. Clarence I. Hendrickson, Bethesda, Maryland. (Sends clipping of local department store advertisement of hat for $57.50 and gloves, $38.50.) The enclosed is a particularly flagrant example of a type of these days. Since the beginning of the War we will be made. extra one. We have patiently retrenched our expenditures in every part of our lives in order to make those purchases possible. # To one to whom the expenditure of $38.50 for a suit or an overcoat means most careful planning, it seems grossly unfair that as completely absurd and perishable items as the pictured gloves are not only available but available tax free. ... I must also raise the question of the actual seriousness of the paper shortage if cardboard and tissue are available for the transportation of such ridiculous things. I ask your continued The first time I tried, the book was refused because each individual stamp wasn't glued in. The second time the book was refused because there was too much people to cash in their bonds. have bought War Bonds, and each Drive have bought our the Government's obligations. The Seventh War Loan Milton Rubin, Bronx, New York. I purchased $18.75 on the payroll savings plan in 25g stamps from my place of employment. Today I tried to get them exchanged for an $18.75 Bond at the Morris Heights Post Office Branch of the New York Post Office. cash value in the future? This talk is influencing advertisement which is being continuously ?launted Drive will shortly be at hand. I should appreciate it if you could give me a simple, flat statement to the effect that no changes, restrictions nor deviations from the terms of our Government's obligations @ Will the bonds issued in World War I be redeemed at glue on the stamps. As a result, 1 am stuck with $18.75 worth of 25g Stamps that the Post Office Department refused to redeem. How can I get my $18.75 back, or can I take it off my 1945 income tax as a loan? effort to have luxury taxes increased and increased drastically to the and that the war costs may be more equitably distributed. MICROSTATA MICROFILM 284 -4Unfavorable Comments on Taxation George C. Hessel, New York City. When your Department prints forms for the 1945 Federal income tax, would be possible for you to distribute a sheet listing it be or do not paid. 150 of the most common items on which Federal about income taxes have to paid have to be At present there is & great deal of confusion even among the so-called experts. When making up the 1944 Federal income tax return, was told by one of your tax inspectors in New York City that the $5.00 paid for auto use tax stamp cannot be deducted from income. On the other hand the National Manufacturers Association issues a booklet in which it stated the $5.00 auto use tax stamp can be deducted. One of your - that the rental of the safe deposit boxes inspectorsindividuals hired told by solely for the storage of stocks, bonds and life insurance policies (not used in connection with a business), and the tax paid on the rental, cannot deducted. be The National City Bank of ( PRECISION New York told no that you cannot deduct the rental of the box, but you can deduct the tax paid on the rental. When at the Custom House in New York, second district, last December, looking for information, I day went to three different inspectors for enlightenOne inspector frankly told me he did not know two gave me divergent opinions. ment. the answer, the other What is a man, trying to make a correct return, going to do under such circumstances? one MICROSTATIMULM PRECISION MICROFILM ROLL NO 286 285 ALM-153 This telegram must be paraphrased before being Dated May 4, 1945 communicated to anyone LO-322 This telegram sust be paraphrased before being communicated to anyone other than Government other than Government Dated May 4, 1945 Agency. (RESTRICTED) Hea'd 11 a.m. Rec'd 6.16 p.m. agency. (MESTRICTED) Secretary of State Washington Secretary of State, Washington. 1145, May 4, noon 1150, May 4, 1 p.m. FOR LEAVIT? PROW MELVIN DOLISTEIN 30 FOR INTERNATIONAL RESCUE AND RELIEF COMMITTEE Beenik now Kilan reports situation is hand. THROUGH WAR REDUCED BOARD FROM MATTSOFTI. Your telegram received. Remittance 85,000 just Feedingjcenters established Milan, Turin, Genos. Regards. arrived. Received sixty pairs shoes but no clothing. Two letters mailed subject Lithanian refugees one at beginning one at and of March. Maria Spinelli affirms that her daughter-in-law deposite 20,000 lire monthly to be paid to her. Please investigate and report promptly. KIRK as Home KIRK RR RPRECISION TRADE MARK MICROSTATI MICROFILM ROLL NO. 288 287 CARLY TO AUTORICAN KNRASSY, LISBON, FROM YAR REFUGER BOARD ( CABLIC TO DRASSY, LISBON, FROM WAT REPUCK BOARD Please deliver the following costage to Harold Trobe from Please deliver the following message to Harold Trobe from M. A. Leavitt of American Jewish Joint Instribution Committee M. As Leavitt of American Jewash Joint Distribution Committee QUOTE ADMINISTRATION construct APPROVED MAY HUDGEST IN THOUSANDS All FOLLOWS note CUP IMPLOYMENT FORNERLY DIRECTOR POUNTATION POLAND LEARN JURIX LAST KNOWN ADDRESS WARSAW. RELATIVES HERE LOCATE ATHLE DAUGHTER EMPLOYEE SOUTH AMERICA 40 PORTUGAL 35 SPAIN 62 GREGORY OF CARE LICENSE IR. HIGH LIPOVER AND ANXTOUS 501 HIS JOINT LESZNO OFS WARSAW LIJA 50 1 LAST ADDRESS EPASON PODOOZS 29 AND SISTER= INTAIT STILLA SCHONTAL CARE KITSKIT RELIGIOUS EDUCATIONAL 30 85 UNQUOTE 50 ITALY 30 AFRICA THIS 15 WRIT LISSE CARLI NO. 180 12 1/5 PARISOL SERVICE TERRAN 100 SELTABLEAND 800 HOLLAND 12 PLIS GRANT 70 NOVIFIED ITALY so TUNCHIAVIA SECOND QUARTER 15 ALSO AGREENS INDICATE ADDITIONAL 100,000 PRODUCE LOAN FUND AND APPROVAD $15,000 DROTTINGHOLD REFUNISH TUREST ASTS PASSWARS RECO VERIATIONS APPLYING LICENSEN LATTER TWO STOP AVAILING BANKING InStructions HEPORE APPLYING LICENSES HOLLAND AND TUDOSLAVIA STOP PENDING FURTHER DISCUSSION ITTE SCIENTE NATE NOT ADK ANT GRANTS FOR REGIGATION POLAND AND FRANCE. UNQUOTE THIS IS THE LISBOR CARDE NO. 179 10:15 a.m. may 1945 10.15 B.B. May 1945 RECISION TRADE MARK MICROSTAT MICROFILM ROLL 290 289 C CABLE TO AMERICAN CONSULATE, ISTANDUL, FROM THE WAR REFUGES BOARD CARIE TO AMERICAN LISBOS, PROCE THE WA TUSPUCION HOARD Please deliver the following cossage to Professor Dr. do Justow, Please deliver the following message to Harold Trooe from M. A. Insvitt of American Jenish Joint distribution Committee: International Rescue and Relief Committee, Tetanbul Kadikoy, mahardar QUOTE out 166 RETRAT ADVISS 10 POSSIBILITY Caddeni 121, Intanbul, from Shabe Strungley of International Rescue SHOURING CLATHON or FOOD PROD AMERICAN REDOROSS STOCKS and Relief Committee, 103 Park Avenue, New York 17, New York. SIGNATURE NO SUPPLIES TURNED TO CONTROLS 97 AUGUSTAN HEDCROSS BUT TEAM ROAD PARCHIZ ingut TO 88 REMITQUOTE 7 CABLE APPOINTING BLACK TREASURER AND TRO THROUGH SHEDISH THICA OR HEDCROSS you INTURING CONCENTRATION CAMPS. UNQUOTE TRANSMITTING PODS HIS NAME TOULD FACULITATE MATTERS you CONGETTES STOP REGINNING MAT WILL TRANSMIT THUMTE INSURANCE DOLLARS MONTHLY STOP KETRA 18 FOR INTAGIATION UNQUOTE THIS IS THE LISHON CABLE NO. 182 ( C 10.15 a.fl. May 4, 1945 5,00 Pall. May 4, 1945 RECISION TRADE MAR MICROSTATI MICROFILM ROLL NO. 291 292 CAHLE TO AMERICAN ARRASST. LISBON. FROM THE WAR REFERENCE BOARD CARLE TO AUTOCAN SHARST. LISBON, FROM THE WAR REQUIRED BOARD Please deliver the following message to Parold Trobe from M. A. Please deliver the following message to Harale Trobe from 11. A. Leavits of American Jewish Joint Distribution Committees Leaviss of American Jewish Joint Instruction Committees SHOTX JOILL REQUEST AID FOR work DONGRO CONSISTANT YOUR SIGNATION MONIFY INCHOISE CHILDREN HOLIEVE SSPARATE ACTION in SPECIAL DROUPS INTAILISM SEARCH SERVICE STOCKGROEN IF YOU PHOPOS INQUIRIES HERATH CHILDRENE SHOULD HOT 100 ANCOURAGED. NATURALLY IDE INTRODUCTION THAT ALL CHILDREN His REMOVIED PROM STAT STOCKHOIA you RETAT FROM AUGUSTA CENTIAL TO LOCATION XT CARD INDICE SUCH SERVICE BEHE PROFESSION BYCURRAN GOTTAND. WOULD THE PREPARIED SEND SUCH INQUIRIES DIRSCTLY TO SYSTEM UNTIL HORE DIRECT CHAMPIS AVAILABLE. UNCOUTE HONOUS AND PLACED UNITED JOHISH AUSPICES AND COPE THAT MAYNE WILL WORK on WITH LOCAL SWISS CON- MUNITY FOR SUCH PROGRAM. OTHERWISE NK FACED WITH OF HAVING ETHIT SPECIAL GROUP CESTROUS SUITING UP SPECIAL Homas POR CHILDREN THIS IS VIII LISBOR GAHLR NO. 183 AND RECEISTING our AID RECARDING AMERICAN THIS HER ORGANIZATION FOR NONSHITARIAN PURPOSES ALTHOUGH tp. IN TOUCH WITH THIS ADENCY to MAYK NO FORMAL CONNECTION WITH THE AND FOR TIME BEING BUDGEST THAT inc DO NOT UNDERSTAND COOMINATIVE INSURED WILL DESP YOU ADVISED AS THEIRPROVE DEVELOPS. Unquote THIS IS WITH LISBON CARLS no. 181 10,15 Belie May 1945 10:15 Balla to 1945 294 Bera 293 PARAPHRASE OF TELEGRAM RECEIVED From: American Entessy, Ankara via Army To: Secretary of State, Washington Dated: May 4, 1945 1 Number: 606 Dated May 4. 1945 . Rec'd 7:08 p.m. Secretary of State SSCHST Washington AMOUNT Reference Department 's 146, February 25, 1944; 405, April 91 and Habanay's 519, April 15. 2630. May 4. neen No special arrangements will be made for entrance of FOR WR3 FROM MCCLELLAND the non-Turkah refugees ex SS DROTTNINGHOLA into Palestine, but individuals eligible under the quota schene will be permitted to enter in proper order, according to the British Legation's 2468, April 27. Enbasay. A fourth convey consisting of 13 POV trucks reached I have received information from a responsible official of the Foreign office that the matter of requesting the Government of the United States to make arrangements for removal of these Switsorient - April 30 caming free Hauthausen bringing refugees to another place is being considered. This official about 300 persons meetly French veses. Centry crossed earlier with regard to Jewish refugees who night be permitted to enter Turkey and assume he was referring to the assurances authorised in Department's 146, although since be was not duty in Ankara he did not handle the question personally at that Swies berter at Martinebruck is logadine region and its passengers are at present is Dues. There are reported instructions to the Turkish Unbasay in Washington to take the matter up 10 th the Government of the United States with the idea in and of determining whether such assurances were applicable difficult, 10 persons died en reste. made reference to assurances which be declared had been given time. This official stated that he was contemplating despatching to be few JeWish wearn among then. Trip was long and This will undebbtedly be last group out of to these refugees in respect. My suggestion was that - should have an additional discussion on the matter before be did so in order that he might supply - precise data regarding nations of origin, numbers involved, and the like. Be promises Kenthouses although there are still 7 trucks of this to do this. coavey which originally consisted of 20 which have not I suggest that assurances night be limited to refugees who may not be eligible to enter Palestine under the quota scheme, with reference to the problem of renewing the assurances which were authorised in Department's 146 and particularly those cited in the Department's 405 paragraph three, to the effect that the yet turned up. HARRISON WRB will put forth all efforts to move all refugees of this group from Turkey to other places, provided such action becomes desirable. Provided WRB and the Department agree, unless it be preferred that the matter be taken care of with the Turkish Unbassy in Washington, I might so indicate here. I should be grateful to receive instructions defining the term desirable, in this connection. with regard to whether removal of refugees from Turkey is desirable, is this to be determined by the Turkiah Government or the IRB? The viswpoint of Turkey that their stay in Turkey is not desirable 10 already known. PACKER VKB RECISION TRADE MARK MICROSTAT MSD.U.S.PAT.OFF MICROFILM ROLL NO 296 295 CARLS TO AUTHORIZAN ENRASSY, PASIS, FROM THE WAR REFUCILX BOARD CAHL TO WINANT, LONDON, FCB MANN FREEM WAR REFUCKA BOARD Please deliver the following message to Joseph Selwarts from M. A. Leavits of American Jewish Joint Distribution Committees Reference your No. 4423 of May 2, 1945. offer of assistance to McClelland gratefully accepted. JUOTE STRONGLY UNITED YOU MAKE NO COMITMENTS REGARDING JACORSON PENDING OZ DISCESSION EATTER YERK. You are authorised to transfer ITEM confidential funds to UNQUOTE Switserland. Suggest in possible you take then with you. Please inform us of amount transforred. THIS IS WILH LONDON CARLE NO. n O O 10,15 B.B. May 1945 10.15 Bells May 4, 1945 ( RECISION MICROSTAT MICROFILM ROLL NO. 298 297 CABLE TO AMERICAN LEGATION, BERN, FOR VOCIELLAND, FROM WAR REPUOKE BOARD CABLE TO AMERICAN CONSULATE GENERAL, JERUSALEM, FROM TAR REFUCEK BOARD Please deliver the following message to Saly Mayer, St. Call, from M. A. Leavitt of American Jewish Joint Distribution Committee Please deliver the following message to Charles Passman from M. A. QUOTE PLEASE INVESTIGATE SITUATION AND EXTEND AID TO HONTA Leavitt of American Jowish Joint Distribution Committee RAPPAPORT LES AVANTS, OF RELEASED INTERNESS AND SEND US REPORT QUOTE PLEASE ADVISE JANINA FALINSKA NARSAW PRACIA ULICA STANISLANONSYA 81 APARTMENT 15 100 FAMILY IN ENTORN RECEIVED MESSACES ATK ALL WILL WHITING, PLEASE ASK SCHOOLSTEIN COMMITTEE ASSIST HRP 10TH CLOTHING. ALSO THIS IS WRB HIGHS CABLE NO. 517 SEND FORD PACKAGE STANDARD 43, $21.20, INCLUDED LIST #63. UNQUOTE ( 10.15 A.M. May 1945 10:15 a.l. May by 1945 ( PRECISION TRADE MARK MICROFILM MICROSTATA ROLL NO. 299 ( CARLE TO AMERICAN LEGATION, NON, FOR HOCLELLAND . FROM THE HAR REFURES BOARD Please deliver the following message to Isaac Sternbuch from Rabbia Totler and Jalmanowitz of Vead Hebatsala Bergency Committee QUOTE DO UTMOST SKIT FOOD AND VEDICAL SUPPLIES TO LIBIRATED CAMPS STOP ATTICIPI PROCURE SAIES OF LIVING AND IMPORM IMORTILATELY UNQUOTE THIS IS WES CARLIS NO. 518 10:15 A.S. May 1945 C UNITED KINGDOM TREASURY DELEGATION HOKARD RENJAMIN FRANKLIN STATION WARNINGTON, D.C. REFERENCE 5th May 1945. 4-A Dear Coe, With reference to my letter of 19th April I write to give you the figures of our gold and doller balances AS at the 31st March 1945. These were AS follows: 1,790 Gold less gold liabilities 352 1,438 Net gold Official dollar balances less dollar liabilities Net dollars Net gold and dollars 481 165 316 1,754 The increase in the final net figure of $17 million over the corresponding figure for the previous month may be explained by the fact, to which I referred in my Inst letter, that dollar receipts from U.S. troops in the U.K. have shown n considerable increase in recent weeks Yours sincerely, R.H.Brand. Mr Frank Coe. Director of Monetary Research, Room 3430, U.S.Treasury Washington, D.C. TREASURY DEPARTMENT 301 INTER OFFICE COMMUNICATION DATE May 5, 1945 Secretary Morgenthau FROM Mr. E. M. Bernstein has This pamphlet includes the charts that were used before the House Committee on Banking and Currency. The brief text with the charts weaves the pictures into a story. PRECISION TRADE MARK MICROFILM MICROSTAT Charts Relating to THE BRETTON WOODS PROPOSALS The danger that restrictive and discriminatory currency practices will be resumed and intensified after the war makes International monetary cooperation essential UNITED STATES TREASURY APRIL 30, 1945 REPRESENTATIVES of forty-four United Nations met at Bretton Woods, New Hampshire, last summer to consider means for dealing with post-war international monetary and financial probJems. Out of this conference come proposals for an International Fund and on International Bank now being considered by the United States Congress and by other governments all over the world The charts included in this booklet help to explain the organisation and operation of the proposed Fund and Bank They also call attention to the distorting forces of the inter-war period that make necessary a cooperative approach to the solution of international monetary and economic problems. These charts were designed originally by members of the Treas- ury staff to aid in the presentation of the Bretton Woods proposals to the Congressional Committees on Banking and Currency. The demand for copies has been so great that a limited printing in reduced dimensions appeared desirable HENRY MORGENTHAU, JR. Secretary of the Treasury. Depreciation o of Seven Sel As Percentage PCT. Chart I.-Depreciation of Currencies At the and of the first World War, nearly all leading currencies except the dollar were depreciated in terma of gold. During the 1920's, a number of coun- tries succeeded in returning their currencies to the 1914 gold parity. These included Canada, England Argentina, and Japan. Italy and France stabilized their currencies at a level much below their pre-war parity. In stabilizing currencies in the 1920's it was pretty much a matter of each country for itself. In some cases there were stabilization loans But countries did not agree to consult in establishing the parities of their currencies nor to cooperate in maintaining them. As a consequence, some currencies, such as the British pound, were overvalued, and others, such as the French franc, were undervalued Nearly a decade was needed to bring about 100 Japan 80 general currency stabilization But the period of stabilization hardly lasted more than a year or two When the depression began, some countries immedi- Argentina. 60 ately felt the effect of shrinking export markets and declining raw materials prices. Because there was no means of assuring orderly exchange arrangements through international cooperation there fol- 40 lowed a decade marked by competitive currency 20 Italy France depreciation and widespread exchange restrictions 0 1914 20 25 30 1 Depreciation of the Currencies of Seven Selected Countries As Percentages of 1914 Gold Values PCT. PCT. 100 Canada 100 Japan As a consequence, some currencies, such as ish pound, were overvalued and others, such French franc, were undervalued U.S. 80 80 Argentina. to 60 of dy all currency 9 decade stabilization was needed But the bring period about U.K. 60 zation hardly lasted more than a year or two 40 the depression began, some countries immedi- elt the effect of shrinking export markets and was 40 Italy arrange- 20 ing ans raw of assuring materials orderly prices. exchange Because there through international cooperation there fol. France 20 a decade marked by competitive currency o ciation and widespread exchange restrictions O 1914 20 25 '30 35 40 MICROFILM COUNTRIES ON THE GOLD STA Number of Countries 40 Chart II.-Countries on the Gold Standard tion, each country acting by itself in returning to gold. In 1922, only 8 countries were on the gold standard By 1928, 44 countries were on gold. When the pressure began in 1929, 5 countries When most countries went off the gold standard, they depreciated their currencies In some cases, this morely corrected an overvaluation In other land and the rest of the British Empire, most of Europe and Latin America, and Japan, went off abroad In some cases, funds received for exports the gold standard The United States went off gold and as income from investments were blocked in 1933 and with it the remaining Latin American When pressures on exchanges develop. individual countries are helpless to prevent monetary disorders doned gold. In 1931, 20 countries including Eng. Republics. In 1936, France and the so-called gold bloc finally went off gold. By 1938, only 8 countries were on gold, and most of these were countries using the dollar as currency. institute 30 cases, there was deliberate undervaluation that is competitive depreciation to gain advantages in the export markets Other countries imposed exchange controls which limited the use of their currencies in buying import goods and in making other payments Australia and four Latin American Republics aban- 35 and restrictions When the Fund is established 25 20 15 10 Going these same problems will be dealt with coopera tively. on Gold 5 The period of the 1920's was one of slow stabiliza. Standard '22 23 '24 25 26 27 28 29 30 31 32 ? 2 MICROFILM PRECISION 1921-1938 Number Countries 35 35 the off gold In currencies. standard, some In an there overvaluation. deliberate undervaluation. was to depreciation, Other which goods import In limited some income gain countries use the and cases, in their making funds from investments on of other in received the 25 25 20 in 20 payments for 15 exports 15 were blocked. develop. individual exchanges pressures to are prevent monetary disorders helpless is established. When the Fund will be dealt with coopera- problems off Gold Standard exchange currencies other Going 30 that is advantages imposed 30 cases, 10 Going 5 on Gold standard 37 25 26 PRECISION TRADE MARK MICROSTATI MICROFILM ROLL The Increase Of Clearing Agreement Number of Agreements / to 5 SITUATION IN 1932 6 to 10 111020 SITUA Chart III.-Bilateral - Clearing Agreements One significant development of the inter-war period was the widespread use of bilateral clearing agreements Under such an agreement a country's exports are paid for only as it imports commodities from the other country. It may be forced to take whatever imports it can get in order to assure full settlement with its own exporters. In 1932 only a few countries had bilateral clear- ing agreements Most of them felt that to secure payment from Germany for their exports or for their investments they had to make clearing arrangements But the use of this device by Germany to expand her Germany had 36 bilateral clearing agreements, Italy had 28. Greece 28, Turkey 23, and other countries had varying numbers Bilateral clearing agreements restrict world trade and force trade into uneconomic channels They permit strong countries to exploit the smaller coun- tries with which they trade The experience of the 1930's showed how bilateral clearing agreements could be used as on instrument of economic warfare Under the Fund, discriminatory currency practices have to be removed progressively. Specifically, after the period of post-war transition, countries may not exports forced it on all of Europe and even on some impose restrictions on payments for exports, income countries in the Western Hemisphere By 1938, from investments and other current transactions 1938 RECISION TRADE MARK MICROSTAT REG. U.S. PAT. OFF. MICROFILM ROLL NO. The Increase Of Clearing Agreements In Europe Number of Agreements 1 to 5 6 to 10 SITUATION IN 1932 over 20 11to 20 SITUATION IN 1938 had 36 bilateral clearing agreements, 28. Greece 28, Turkey 23, and other had varying numbers. al clearing agreements restrict world trade $ trade into uneconomic channels. They rong countries to exploit the smaller coun- which they trade The experience of the owed how bilateral clearing agreements used as an instrument of economic warfare the Fund, discriminatory currency practices le removed progressively. Specifically, after d of post-war transition, countries may not restrictions on payments for exports, income estments, and other current transactions *Includes payment agreements 140 January 1930 World Trade and Exchange Index of De Selected C the U.S. Do Chart IV.-World Trade and Exchange Depreciation The restrictive and discriminatory practices that spread use of competitive exchange depreciation, came to be widely used during the great depression multiple currency devices and other types of currency intensified the effects of the depression in reducing discrimination, and bilateral clearing agreements, exchange controls, and other restrictive exchange measures Unless these practices are eliminated, the volume of world trade will continue at a stagna. the volume of world trade. The total of exports and imports for all countries, which reached more than $65 billion in 1929, fell to $26 billion in 1932 Even when recovery began, and production in nearly all countries had reached a higher level than in the 1920's world trade was still for below the previous levels Only once in the 1930's and that was in 1937, did if go beyond $50 billion and for the greater part of the 1930's was $45 billion or loss An important factor in the failure of world trade to recover to the levels of the 1920's WOR the wide- $ Billions (World Trade) Excha 60 tion level and the United States and other countries will lose the great advantages of expanding international trade 50 The Fund is intended to help remove these restrictive and discriminatory practices as soon as possible Some countries may have to continue wartime con- 40 World Trade trole until they reestablish their normal trade relations. But the Fund can require countries to remove any control that in its opinion is no longer neces- 30 sary. 20 1921 23 25 27 29 31 33 "U.K., France, Canada, Argentina and RECISION TRADE MARK MICROSTAT MICROFILM S.U.S.PAT.ORR ROLL NO. World Trade and Exchange Depreciation Index of Depreciation of 5* Selected Currencies against the U.S. Dollar. 1926 100 PCT. (Exch Depr.) preciation spread use of competitive exchange depreciation, multiple currency devices and other types of currency discrimination and bilateral clearing agreements, 110 $ Billions (World Trade) Exchange Depreciation exchange controls, and other restrictive exchange measures Unless these practices are eliminated 60 the volume of world trade will continue at a stagnation level and the United States and other countries will lose the great advantages of expanding inter- 90 50 national trade. The Fund is intended to help remove these restrictive and discriminatory practices as soon OR possible. Some countries may have to continue wartime controle until they reestablish their normal trade rela. tions. But the Fund can require countries to remove 100 World Trade 80 40 70 30 any control that in its opinion is no longer neces- 60 sary. 20 1921 '23 '25 27 29 31 33 U.K. France. Canada, Argentina and Japan 35 37. 39 U.S. Exports and Ex Chart V.-United States Exports and Exchange Depreciation exports, fell to on exceptionally low level. From more than $5 billion in 1928 and 1929, our exports fell to only $1,500 million in 1932 This represents a reduction of more than 70 percent in the dollar value of our exports. The world-wide depression was one important factor in the reduction of our export trade. The other great cause was the competitive depreciation of currencies abroad, the use of multiple currency devices, and the imposition of exchange controls and clearing agreements which cut us out of markets where we had customarily traded In many instances these devices were specifically intended to interfere with our trade. 5 With the adjustment in the foreign exchange value of the dollar, and with the world-wide recovery in business our exports again rose. But even in the best year, in 1937, our exports were only slightly 4 U.S. Exports more than $3 billion. The restrictive and discriminatory currency prac- 3 tices of the 1930's had a stifling effect on world trade, and especially on the foreign trade of the United States. We do not want to use these devices The 2 Fund will help prevent their use by other countries. I With the general decline of world trade, the foreign trade of the United States, and particularly its $ Billions (U.S. Exports) 1921 23 25 27 29 3 "U.K., France, Canada An U.S. Exports and Exchange Depreciation Index of Depreciation of 5* Selected Currencies against the U.S. Dollar. 1926 . 100 PCT. (Exch Depr.) Exchange Depreciation 110 $ Billions (U.S. Exports) Exchange Depreciation where we had customarily traded. In many instances, these devices were specifically intended to interfere with our trade With the adjustment in the foreign exchange value of the dollar, and with the world-wide recovery in business, our exports again rose But even in the best year, in 1937, our exports were only slightly 90 4 U.S. Exports more than $3 billion The restrictive and discriminatory currency prac- 80 3 tices of the 1930's had a stifling effect on world trade, 70 and especially on the foreign trade of the United 2 60 I States. We do not want to use these devices The Fund will help prevent their use by other countries 100 5 1921 '23 '25 '27 29 31 33 UK. France Canada, Argentina and Japan 35 37 39 PERCENTAGE OF WORLD 1 Belgium Japan Exports +1 Imports Neth Chart VI.-Percentage Change in Share of World Trade World trade fell from more than $65 billion in 1929 to only $26 billion in 1932 All countries were affected, particularly those that did not make extensive use of competitive exchange depreciation and restrictive and discriminatory currency arrangements Of the great trading countries, the United States had the largest absolute and proportionate reduc. tion in foreign trade. Its share of world exports in 1934, after recovery from depression had begun, was 26 percent less than its 1928 Canada had the +0% Share Decreased. 1928 to 1934 cent +3% France It is worth noting that the share of both Italy and +1% Japan in world exports was larger in 1934 than in -7% 1928-Italy by 4 percent, Japan by 25 percent. +13% German -3% Obviously, countries cannot always retain the U.K. some proportion of world trade But changes in the distribution of world trade among countries ductive efficiency and not to restrictive controls +13% +4% Italy second largest proportionate reduction of exports Its share fell by 14 percent from 1928 to 1934 The United Kingdom experienced a reduction of 3 per- should be responsive to the development of pro- +8%) -14% +10% Canada -71% -26% -30% U.S. RECISION TRADE MARK MICROSTAT REG.U.S.PAT.ORF MICROFILM ROLL NO. PERCENTAGE CHANGE IN SHARE OF WORLD TRADE, 1928 to 1934 X +31% Belgium +23% +25% Japan Exports Imports +17% +8% Neth rade Share +4% Italy gest proportionate reduction of exports Increased 1928 to 1934 +0% Share III by 14 percent from 1928 to 1934. The adom experienced a reduction of 3 per- +3% Decreased. 1928 to 1934 France +13% +1% th noting that the share of both Italy and world exports was larger in 1934 than in v by 4 percent Japan by 25 percent Germany -7% -3% U.K. ly, countries cannot always retain the portion of world trade. But changes in aution of world trade among countries responsive to the development of prosciency and not to restrictive controls +13% -14% +10% Canada -71% -26% U.S. -30% FL- U.S. Production and Export of Wheat Cotton Annual Average 1925-28 and 193 (MILLIONS OF DOLLARS) Exports WHEAT 1925-28 239 2% 1931-34 489 Chart VII-United States Production and Export of Wheat, Cotton, Tobacco. and Lard The effect of reduced exports from this country was felt in both industry and agriculture. Many of our heavy industries, such as the automobile and machinery industries, found their exports reduced by as much as 80 or 90 percent The agricultural crops that depended largely on foreign markets were especially hard hit. While 21 percent of the wheat crop worth $1,100 million was exported on the average in each year from 1925 to 1928, only 8 percent of a much smaller output worth less than $500 million, was exported annually from the years 1931 to 1934 *COTTON 58% 1925-28 The proportion of the cotton crop exported in the years 1931 to 1934 was about the some as in the years 1925 to 1928 The great decline came after 1931-34 59% 1934, and this was in part the result of bilateral clearing agreements which were used by Germany and Japan to secure cotton from other sources than 344 247 TOBACCO 1925-28 the United States 40% Our tobacco exports, which were 40 percent of 1931-34 total production from 1925 to 1928, fell to 34 percent of the total from 1931 to 1934 Our lard exports, which were 32 percent of total production, fell to 22 percent of the total from 1931 to 1934 55 159 (34%) 319 103 LARD 1925-28 NY 1931-34 36 14% 153 586 T U.S. Production and Export of Wheat. Cotton. Tobacco and Lard Annual Average 1925-28 and 1931-34 (MILLIONS OF DOLLARS) Production Exports 239 WHEAT 1925-28 2%% L130 1931-34 489 rt of Wheat, Cotton, Tobacco. and and 816 COTTON 14% 1925-28 proportion of the cotton crop exported in the 1931 to 1934 was about the same as in the L410 1931-34 1925 to 1928 The great decline came after 59% and this was in part the result of bilateral ng agreements which were used by Germany apan to secure cotton from other sources than 344 TOBACCO 1925-28 nited States tobacco exports, which were 40 percent of 40% 1931-34 3 production from 1925 to 1928, fell to 34 percent total from 1931 to 1934 r lard exports, which were 32 percent of total ction, fell to 22 percent of the total from 1931 247 99 159 55 (34%) 300 103 *LARD 1925-28 -319 NY 14. 1931-34 36 (24%) 153 586 U.S. Farm Prices and Excho Ind So the PCT Chart VIII.-Farm Prices and Exchange Depreciation One significant effect of exchange depreciation in the 1930's was reduced prices of form products American form products that are sold abroad must lars are reduced, smaller quantities of our form products will be exported The decline in form prices during the 1930's was compete with the form products from other countries When other exporting countries depreciate their cur- of course affected by exchange depreciation The rencies, American form products become more expen- covery in business crop control, and the revision of sive in the world markets and their continued export is possible only if dollar prices are reduced This is also true to some extent when exchange depreciation takes place in the countries importing agricultural products Unless prices in terms of dol- exchange rates Exc 100 rise in form prices after 1933 resulted partly from re- The Fund, by providing for stable and orderly exchange arrangements, will help to remove one important factor that has in the past contributed to instability in the prices of our export crops. 80 Farm Prices 60 40 1921 23 25 27 29 31 8 U.K. France, Canada Argantina a 3 RECISION TRADE MARK MICROFILM MICROSTAT ROLL NO. U.S. Farm Prices and Exchange Depreciation Index of Depreciation of 5* Selected Currencies against the U.S. Dollar. PCT. 1926-100 120 PCT. Depreciation Exchange Depreciation lars are reduced, smaller quantities of our form products will be exported 100 100 The decline in form prices during the 1930's was of course affected by exchange depreciation The rise in form prices after 1933 resulted partly from recovery in business crop control and the revision of 80 80 Farm Prices exchange rates The Fund, by providing for stable and orderly exchange arrangements, will help to remove one 60 60 important factor that has in the past contributed to instability in the prices of our export crops. 40 40 1921 23 25 27 29 31 33 "U.K.France Canada, Argentino and Japan 35 37 39 M-IDS U.S. National Income an 1921 t $ Billions Chart IX.-United States National Income and Exports This decline in national income was intensified to a considerable extent by the sharp decline in our exports. From more than $5 billion in 1929 our exports tell to a little more than $1% billion in 1932 A decline in exports not only means unemployment in the export industries but a reduced demand by workers and formers for all the products of American industry and agriculture Even after recovery set in, exports did not expand as fast as the national income. The log in exports is one of the reasons why full recovery was not achieved until after the outbreak of war. One of the purposes of the Fund is to provide as environment of stability and order in the exchanges which will facilitate the expansion and growth of international trade We can be sure that if world trade expanda, our exports and imports will both increase The effect will be felt in expanded em- Exports 80 National Income 60 40 ployment and greater consumption in this country. 1 The great decline in national income which took place from 1929 to 1932 was primarily a reflection of the severe depression of business in this country and the accompanying fall in prices and wages. (Not Income) 20 1921 23 25 27 29 31 33 *S Kuznets estimates 1919-29 Dept. of Comm RECISION TRADE MARK MICROFILM MICROSTAT ROLL NO. U.S. National Income and Trade 1921 to 1938 III $ Billions (U.S. Exp.) 5 $ Billions (Not Income) Exports Exports 4 m after recovery set in, exports did not expand a as the national income The lag in exports is 80 the reasons why full recovery was not achieved after the outbreak of war. le of the purposes of the Fund is to provide an onment of stability and order in the exchanges National Income's 3 60 a will facilitate the expansion and growth of 2 national trade We can be sure that if world expands, our exports and imports will both 40 ase The effect will be felt in expanded em20 1921 23 25 27 '29 31 33 35 *s Kurnets estimates 1919-29. Dept. of Comm. 1930-38 37 39 I ment and greater consumption in this country UNITED STATES TRADE BY COUNT MILLIONS OF DOLLARS 509 Canada << 536 U.K 202 165 France VIIII 7 26 Germany SS Chart X.-U. S. Trade by Countries, 1937 throughout the world. In 1937, about 16 percent of our exports went to the United Kingdom and about 15 percent to Canada The rest was distributed over many countries in amounts ranging up to nearly $300 million Similarly, our imports are even more widely distributed with the largest amount coming 94 77 strictive practices 8 The greatest trade of the United States is with Canada and England- the great industrial coun- tries with high standards of living. Our trade countries will benefit from prompt reconstruction in devastated the fact that exports to and imports from any one country are seldom if over in balance, exchange countries and from the productive development of other areas of the world. The Bank for Reconstruction and Development is intended to facilitate eco stability is of special importance to the United States nomic reconstruction and development 70 Neth arrangements and similar discriminatory and re- from Canada and large amounts from many other Because our trade is so extensive, and in view of 95 Belgium To achieve exchange stability will require the coop eration of all countries engaged in foreign trade. It will also require the elimination of bilateral clearing Italy Mexico U.S.Exp MAY 109 60 94 Arg 139 92 Cuba 146 69 Brazil 289 Japan O 10 U.S.Imp 21 The foreign trade of the United States extends 204 50 China 04 UNITED STATES TRADE BY COUNTRIES. 1937 MILLIONS OF DOLLARS 509 Canada 536 U.K 202 155 France 76 126 Germany ies, 1937 9 & 95 at of at 15 over oarly more ning then Belgium To achieve exchange stability will require the coop eration of all countries engaged in foreign trade. It will also require the elimination of bilateral clearing 75 94 Neth arrangements and similar discriminatory and re 11/33 77 8 ends strictive practices. The greatest trade of the United States is with Canada and England-the great industrial coun- Italy U.S. Exports 48 U.S. Imports 109 Mexico tries with high standards of living. Our trade 60 94 Arg 39 will benefit from prompt reconstruction in devostated 92 one ange tea countries and from the productive development of other areas of the world. The Bank for Reconstruction and Development is intended to facilitate eco- Cuba O 148 69 Brazil a w of nomic reconstruction and development 289 Japan O 204 50 China 04 TRADE MARK CROSTATO - INTERNATIONAL MONETARY FUND-ORGANIZATION BOARD OF GOVERNORS Powers Reserved to Board Cooperation with other Organization The Board of Governors will consist of 44 members and other meetings may be called as needed Certain of the powers of the Fund are reserved to the Board and may not be delegated, including arrange- ments for cooperation with the International Bank the Dumbarton Oaks council, and other international organizations The head office of the Fund will be in the United States. Agencies or branch offices may be estab lished in other countries At the head office, the above Voting in the Board of Governors will be based pri- Executive Directors will be constantly available to marily on subscriptions The United States has 28 percent of the votes, the British Commonwealth 25 percent, the Soviet Union 12 percent The Executive Directors cost the votes of the countries that elected the officers and staff, and committees appointed by the Executive Directors. 11 distribution in income them. country Each Governor Meets Decide appeals agreement Head Office in US EXECUTIVE DIRECTORS lics, and five by all other countries The two appoint an executive director, unless they have already done so under the provision referred to values change tive directors will be selected by the American Repub- direct the business of the Fund Day-to-day opera- tions will be carried on by the Managing Director, , Approve revision quetes Provision is made for at least 12 Executive Directors. The United States, United Kingdom U.S.S.R. China, and France will each name one Two execu- countries whose currencies have been used by the Fund in the largest amounts will for this reason each Membersh 44 Members Require member withdrew Chart XI.-International Monetary Fund: Organization and Management one from each country. The Board will meet annually . Met members :3 PRECISION Membership 12 to 14 Members Powers All Powers Agencies or Branch Officers delegated. Board of Governors Committees Chosen as table on Executive Directors Continuous session meets when business Managing Director serves - chairman of Directors Managing Director Officers and Staff Come RECISION TRADE MARK MICROSTAT REG. U.S. PAT. OFF MICROFILM ROLL NO. INTERNATIONAL MONETARY FUND-ORGANIZATION AND MANAGEMENT BOARD OF GOVERNORS Powers Reserved to Board I Admit NEW members Cooperation with other International 2 Approve revision quotes . Approve unform change per volues organizations, International Cooperate 4 Determine Organizations Income detributor Membership 44 Members from each country Each Governor votes or shown voting schedule Meets annually other meet Require member eithdrew , Decision liquidate Decide appeals agreement inization and Management Board Agencies OF Bronch Offices rovision is made for of least 12 Executive DirecThe United States United Kingdom, U.S.S.R. no, and France will each name one. Two execu- Head Office in US EXECUTIVE DIRECTORS directors will be selected by the American Repub Powers and five by all other countries The two Intries whose currencies have been used by the d in the largest amounts will for this reason each - the All Powers delegated.by Agencies or Board of Branch Offices Governors Membership 12 10 14 Members Chosen - table on Executive Directors Continuous session meets when business requires Managing Director serves os chairman of Executive Agencies Directors Branch Offices point an executive director, unless they have eady done to under the provision referred to Committees live. Committees Managing Director Officers and Staff Voting in the Board of Governors will be based pri- lectors cost the votes of the countries that elected Executive Directors Votes Each the following countries names Executive Director China France , Directors selected by American Republica on bosis of Directors selected by all the countries or been of . rily on subscriptions The United States has 28 cent of the votes, the British Commonwealth 25 cent the Soviet Union 12 percent The Executive included among the Executive Directors by countries whom aurancies have been reduced below the largest amounts - each entitled appoint . director TRADE MARK MICROSTAT MICROFILM NO INTERNATIONAL MONETARY FUND- Bill No change without Chart XII-International Monetary Fund: Resources The Fund will have resources of $8.8 billion, rep- resenting the subscription of 44 countries on the basis of their quotas A change in a quota may be made only by a four-fifths vote and with the consent of the country concerned The bill now pending provides that no change may be made in the quota of the United States without the authorization of Congress. Subscriptions to the Fund are to be paid in gold and in the currencies of members. Gold subscrip- tions will amount to about $1.8 billion, of which United States will subscribe $687.5 million and other countries about $1,100 million Currency subscrip- tions will amount to about $7 billion of which the United States will subscribe $2,062.5 million and other countries about $4,900 million Currency authorize- SUBSCRIPTIONS (Quotas) - 44 Member Countries-$8.8 Billions See - - Quotes tion holdings of the Fund are to be guaranteed against depreciation in terms of gold Gold Currencies of tories in the United States the four other countries $1.8 Bit Member Countries with appointed executive directors, and at other 1687 SMI despositories selected by the Fund Initially, at least 50 percent of the gold must be held in the United $112.5 M.I The Fund's gold assets will be held at gold deposi- $7.0 Bil. U.S Others 12.062.5 MII 4.937.5 MII States and 40 percent in England, France, the Soviet Union, and China GOLD DEPOSITORIES Currency holdings of the Fund will be kept in the central banks of depository countries The Fund's depository for dollars will be the Federal Reserve. Sold depositories in 40 RESERVE other countries Nonnegotiable, noninterest bearing notes payable Initially 40% gold on demand may be substituted for currency deposits positories held these de to the extent that the deposits are not immediately needed for the business of the Fund 10% 12 PRECISION Other gold depositories selected by the fund Gold volue o PRECISION MICROFILM TRADE MARK ROLL NO. INTERNATIONAL MONETARY FUND-RESOURCES Quotos Millions United States Delaw Bill provides No change U.S. quota without authorize SUBSCRIPTIONS (Quotas) - 44 Member Countries $8.8 Billions See table on Quotes vote required tion of Congress change quote No quote without member are to be guaranteed against of gold. Gold Currencies of SI.B Bil. Member Countries $7.0 Bil lets will be held at gold deposi- assets always constant 12.062.5 MR U.S. States, the four other countries Gold of Others 4937.5 MII rutive directors, and at other by the Fund. Initially at least Id must be held in the United bent in England France, the GOLD DEPOSITORIES ina of the Fund will be kept in the pository countries The Fund's will be the Federal Reserve 4 other countries Initially 40% of gold interest bearing notes payable positories FEDERALLY held these de- CURRENCY DEPOSITORIES RESERVE BANKS Gold depositories 50 principal office NATURAL 50% to gold BANKS Depository for U.S. dollars substituted for currency deposits held Fund to deposits are not immediately 10% Other gold deposi- less of the Fund. Bank tories selected by the fund - / CENTRAL BANKS FED RESERVE - Each Centrel BankisFunch depository for the Currency of that country held by Fund - member - of me s PRECISION MICROFILM TRADE MARK ROLL INTERNATIONAL MONETARY FUND-OPERATI Chart XIII-International Monetary Fund: Operations in Foreign Exchange Countries whose out-payments exceed their inpayments for international transactions must use reserves of foreign exchange to prevent depreciation of their currency. The method by which a country that does not purchase exchange from the Fund meets its obligations to another country is shown as Transaction 1. The country draws on its own reserves of gold and foreign exchange to meet its interna. tional obligations. These countries in turn must use one-half of their increase in gold or foreign exchange to repurchase their own currency from the Fund. Transaction 2-(a) shows G country using its own currency to purchase another currency from the Fund which is then used to make payments to the other country. Simultaneously, a country using the Fund must use its own reserves of gold and foreign its own currency from the Fund until the reduction in its reserves equals the increase in the Fund's hold- period, nor may the Fund's total holdings of a country's currency exceed that country's quota by 100 percent. BILL Own Own reserves gold reserves and foreign exchange and The Fund's holdings of gold will be increased when and when charges are paid in gold. The Fund's chart. The amount purchased by a country may transactions PURCHASE exchange from the Fund currencies are purchased from the Fund with gold holdings of gold will be decreased when the Fund not exceed 25 percent of its quota in any 12-month PAYMENTS exceed OUT-PAYMENTS national transactions but NOT ings of its currency, as shown in Transaction 2-(b) Some countries whose out-payments exceed their declared ineligible for the reasons shown on the Countries Exceed IN-PAYMENTS for inter- exchange in an equal amount. If it has not used its own reserves to that extent it must repurchase in-payments for international transactions will purchase the exchange they need from the Fund unless Countries whose OUT -PAYMENTS uses gold to purchase scarce currencies. The Funds' Must resurchase own our- One increase from Fund until reporthous reduction reserves equals own currency from increase Fund's holdings Fund of currency holdings will change from one currency to another when countries purchase foreign exchange with their own currency All of the Fund's holdings of currency will be guaranteed against exchange depreciation in terms GOLD AND CURRENCIES OF FUND of gold. GOLD Countries purchase current cies from the Fund with 13 gold and pay charges in Used by Fund purchase scorce currencies with gold CURRENCIES Countries purchase other currencies with their our currency Fund's RECISION TRADE MARK MICROSTAT MICROFILM RSG.U.S.PAT.ORK ROLL NO INTERNATIONAL MONETARY FUND-OPERATIONS IN FOREIGN EXCHANGE erations in Foreign Exchange transaction 2-(a) shows a country using its currency to purchase another currency from Fund which is then used to make payments to the Countries whose OUT-PAYMENTS Countries whose IN PAYMENTS exceed OUT-PAYMENTS for international transactions Exceed IN-PAYMENTS for interactional transactions but do NOT PURCHASE exchange from the Countries whose OUT-PAYMENTS exceed IN-PAYMENTS for interne- tional transactions and PURCHASE exchange from the Fund Fund or country. Simultaneously, a country using the d must use its own reserves of gold and foreign hange in an equal amount If it has not used own reserves to that extent, it must repurchase own currency from the Fund until the reduction in reserves equals the increase in the Fund's hold of its currency, as shown in Transaction 2-(b). Own reserves ...1 and foreign extrange reserves Own reserves gold and foreign exchange Mast declared ineligible - purchase currencies from the Fund for current needs and thus avoid exchange depreciation and exchange control 1 The Fund's holdings of gold will be increased when rencies are purchased from the Fund with gold a when charges are paid in gold The Fund's dings of gold will be decreased when the Fund gold to purchase scarce currencies The Funds' dings will change from one currency to another Must repurchase sen our Amount purchased with own rency from Fund until currency may not exceed reduction reserves equals 25% quote during year and own currency from ingrease Fund's holdings Fund's total holdings of a our Fund of currency rency may not exceed quarte One helf increase used reporthous by 100% The Fund may declare country ineligible to purchase exchange en countries purchase foreign exchange with for following recors III currency volve it own currency. Fund of the Fund's holdings of currency will be GOLD AND CURRENCIES OF FUND aranteed against exchange depreciation in terms capital Febru GOLD CURRENCIES S Failure Countries purchase current cies from the Fund with gold and pay charges in gold Used Fund purchase soorce currencies with gold purposes Countries purchase other currencies with their own currency Fund under this to par- MICROSTATA TRADE MARK MICROFILM ROLL N INTERNATIONAL MONETARY FUND-C Chart XIV.-International Monetary Fund: Charges The Fund will sell needed foreign exchange to a country in order to help it maintain stable and from the Fund with gold, a small handling charge orderly exchange rates and freedom in exchange transactions. The amount of foreign exchange a will be made country can buy from the Fund will be limited, and the country must fulfill conditions which assure the ings of currency in excess of a country's quota. These charges will increase with the duration and the amount of currency held. When the charges reach 4 percent, the Fund and the member must Fund that its resources are being used only for approved purposes. Furthermore, countries must use their own gold reserves in equal amount and they must repurchase their currency from the Fund when they increase their monetary reserves. To encourage a country to use its monetary reserves and to regard the Fund as a supplementary source of foreign exchange, a second line of reserves, the Fund will makes a heavy charge on the sale of foreign exchange for a country's currency. A All charges payable in pold If - When a member country buys foreign exchange member are less than half its quo in gold in some proportion Balance The Fund will levy additional charges on its hold consider means of reducing the Fund's holdings. If they fail to reach agreement the charge continues Foreign exchange purchased from Fund with Member's 2 Foreign exchange purchased from Fund with Gold 3. Additional ch Fund's holding its quota (over Currency to rise to 5 percent, at which time the Fund may impose any charges it deems appropriate Amount On foreign exchange acquired by a country in excess of the stated limits, the Fund may levy such charges and impose such terms and conditions as it quote quote* 0-25 deems appropriate All charges will be payable in gold unless a member purchasing currency from the Fund with its own currency must pay three-fourths percent of the country's gold reserve is less than half its quota. In amount purchased as a service charge. and partly in currency. such a case, charges will be paid partly in gold After 25-50 3/4% Small of Handling Amount Charge 50- 75 75-100 the 2 PRECISION -C 14 PRECISION TRADE MARK MICROSTAT MICROFILM ROLL NO INTERNATIONAL MONETARY FUND-CHARGES BY THE FUND d: Charges All charges payable in gold If monetary reserves of member are less than half its quota charges are payable When a member country buys foreign exchange in gold in some proportion Balance payable in currency from the Fund with gold, a small handling charge will be made The Fund will levy additional charges on its hold ings of currency in excess of a country's quota. purchased from Fund with Gold 3. Additional charges payable by 0 country on Fund's holdings of its currency in excess of its quota (average daily balance) must consider meens reducing Funds holdings Percent Amount On foreign exchange acquired by a country in excess of the stated limits the Fund may levy such 8th Year Year Year Year Year Year Year Year 1/4 I 214 214 25 15 75 -100 11/4 154 211 2 additional 314 316 WAIN 41/2 316 31/g 3 Charge 7th After On Amount 6th 2 of Small Handling quote of 5th 3 Mos 25 50 50 75 excess 4th 3 such a case, charges will be paid partly in gold and partly in currency 3/4% amounts 3rd I country's gold reserve is loss than half its quota. In 0-25 annum 2nd 2 charges and impose such terms and conditions as if deems appropriate per let 2 to rise to 5 percent, at which time the Fund may impose any charges it deems appropriate All charges will be payable in gold unless a Failing agreement on reaching 5% Fund may imposs such charges as a deems appropriate Al 4% Fund and country Currency amounts the terms *Provided - - - " of Fund WIN set 4/1 such 5 Foreign exchange 3 Fund with Member's 2. on consider means of reducing the Fund's holdings If they fail to reach agreement the charge continues Foreign exchange purchased from 3 These charges will increase with the duration and the amount of currency held When the charges reach 4 percent the Fund and the member must 414 5 PRECISION TRADE MARK MICROSTATA MICROFILM NO INTERNATIONAL MONETARY Chart XV-International Monetary Fund: Exchange Stability When the Fund is ready to begin operations, it will request members to communicate the par values of their currencies based on prevailing exchange rates. The Fund or the country may object within 90 days if either of them regards the par value based on the prevailing exchange rate as unsuitable If they fail to reach agreement, the country is regarded as having withdrawn from membership All currencies must be defined in terms of gold or political policies of the country If the par value of a currency is changed, the United States dollar be defined at its present gold its currency after the Fund has expressed its objec- Currencies must be kept stable within 1 percent tion, it becomes ineligible to use the resources of the Fund and may be required to withdraw from of parity. Furthermore, countries must undertake not to change the parity of their currencies except US DOLLAR Dollar defined in terms gold-159/g grains % fine Congressional Approval an requires us Dollar be de fined present gold content provider change por ity may proposed without Congress authorization Stability Currencies must be kept stable within 1% above and below party membership after consultation with the Fund. Provision is made for a uniform change in parity. This requires a majority vote, including the vote of A change in parity may be made only on the proposal of the country concerned A country shall not all countries with 10 percent or more of the total quotas. The bill now pending provides that a uni- propose a change in parity except to correct a determine suitable rate concur or object If a change in parity is necessary to correct a fundamental disequilibrium, the Fund cannot object because of the domestic social or lineness The bill before Congress requires that the content or Fund object within 90 days fundamental disequilibrium Minor changes aggregating 10 percent may be made after consultation with the Fund On all other changes the Fund may member must deliver additional currency to the Fund until the gold value of the Fund's holdings is restored If a member changes the par value of the United States dollar of the present weight and Par values of currencies based 60th day before Agreement bee Change parity may be mode only proacad member A member shall not propose change parity except to correct fundamental da. equilitrium form change in parities cannot be made without the authorization of Congress Uniform change party requires vote and countries - 15 per 10% more of aggregate quotes Bill provides no consent us without Congress authorisation must ditional RECISION TRADE MARK MICROSTAT REG. U.S. PAT. OFF MICROFILM ROLL NO INTERNATIONAL MONETARY FUND-EXCHANGE STABILITY Par values of currencies based on exchange rotes prevoiling on 60th day before Agreement becomes effective unless country or Fund object within 90 days which COM Fund and country exchange Stability undomental disequilibrium Minor changes aggreating 10 percent may be made after consultation with the Fund On all other changes the Fund may oncur or object If a change in parity in necessary correct a fundamental disequilibrium, the Fund annot object because of the domestic social or olitical policies of the country If the par value of a currency is changed the member must deliver additional currency to the fund until the gold value of the Fund's holdings a restored If a member changes the par value of determine suitable rate OTHER CURRENCIES U.S DOLLAR Currencies de- Currencies de. Dollar defined terms of sold-15% grains No fine fined terms of Dollar fined terms Countries which - enemy of gold occupied given longer period during which currencies may Congressional Approval be curces from Fund requires us Dollar be de under conditions prescribed fined present gold content by Fund 2.04 provides change per ity may proposed without Congress authorization Stability Changes in Currencies must be kept stable within 1% above and below parify is currency after the Fund has expressed its objec- Parity ion. it becomes ineligible to use the resources of be Fund and may be required to withdraw from membership Provision is made for a uniform change in parity This requires a majority vote, including the vote of all countries with 10 percent or more of the total quotas. The bill now pending provides that a uniform change in parities cannot be made without the authorization of Congress Changes aggregating 10% may be after consultation with the A member shall not propose Change parity may be made only propose member . change parify except to correct fundamental da. Fund Fund net not object equitrium may concur object On other changes the Fund to process change necessory the Fund shot not object because of domestic social political polcies the member If member changes the par value Uniform change sority requires majority vote and countries with 10% or more of asgregate quotos Bill provides no consent us without Congress authorisation If par value is changed member must deliver of ditional currency over the objection the Fund insligible Fund and may be required to withdrew from membership International Bank For Red ORGANIZATION A - BOARD OF Powers Reserved to Board I Compensation with Fund Chart XVI-International Bank for Reconstruction and Development: Organization and Management The Board of Governors will consist of 44 members, dent, the officers and staff, and by the loan com- Certain of the powers of the Bank are reserved to Executive Directors arrangements for cooperation with the International Monetary Fund, the Dumbarton Oaks security council, and other international organizations There will be an Advisory Council of seven or more representatives drawn from the fields of banking, commerce, industry. labor, and agriculture. The head office of the Bank will be in the United States Regional offices may be established in other countries, with regional councils representing these areas. At the head office, the Executive Directors will be constantly available for the business of the Bank and will exercise the powers delegated to them by the Board of Governors. The day-to-day 16 Admit new members decrease capital Agreement business of the Bank will be carried on by the Presi- one from each country. The Board will meet annually and other meetings may be called as needed the Board and may not be delegated including Security Council and other interestional mittee and other committees appointed by the Head Off Provision is made for 12 Executive Directors. The EXECUTIVE United States, United Kingdom, U.S.S. R. China, Powers and France each appoint one. Seven will be All Powers selected by the Governors of the other 39 countries on the basis of proportionate representation Voting in the Board of Governors will be based delegated by OFFICERS AND STAFF Board Loan PRES Committees Officers will have 32 percent of the votes, the British Com- monwealth a total of 25 percent, and the Soviet the votes of the countries that appoint or elect each serves areas of stock subscribed by his country. The United States them. Members Continuous Regional Councils primarily on the amount of subscription Each member will have 250 votes plus 1 vote for each share Union 12 percent The Executive Directors will cast Membership 5 Members VOTES International Bank For Red instruction And Development ORGANIZATION AND MANAGEMENT BOARD OF GOVERNORS L Cooperation with Fund Security Council and other international Powers Reserved to Board Admit members cooperation with other international organizations 7 or more representatives 44 Members from each country capital increase decreose Suspend number Decide appeals Agreement organizations construction and Development: Organization Advisory Council Membership Governor costs each shore - 250 Banking Commerce Industry Labor and Agriculture Meets annually and when schedule below) Meetings Annual other meet Bank requests which may called the Suspend operations Bank and the Executive Directors Distribute income business of the Bank will be carried on by the Presi- dent the officers and staff, and by the loan com- Head Office in U.S mittee and other committees appointed by the EXECUTIVE DIRECTORS Executive Directors An Powers United States United Kingdom U. S. S R., China, on the basis of proportionate representation Board of OFFICERS AND STAFF Governors representing press Loan primarily on the amount of subscription Each member will have 250 votes plus 1 vote for each share Committees of stock subscribed by his country. The United States will have 32 percent of the votes, the British Com- monwealth a total of 25 percent and the Soviet Union 12 percent The Executive Directors will cost the votes of the countries that appoint or elect them. each costs votes that elected him As number 4786 Continuous session meets when business requires Other Voting in the Board of Governors will be based VOTES OFFICERS AND President serves or cheirman of Executive Directors Regional Councils Regional Office Members elected by Governors of other 39 countries x selected by the Governors of the other 39 countries and France by and France each appoint one. Seven will be Membership 12 Members 2 Year Term Members exch appointed by us UK.USSR. Chies Powers Provision is made for 12 Executive Directors. The PRESIDENT Officers and Staff Committees Regional PRECISION MICROFILM TRADE ROLL NO International Bank For Rec RESOURCES Chart XVIL-International Bank for Reconstruction and Development: Resources and their Uses The authorized capital of the Bank will be $10 billion. Of this $9.1 billion is allocated for subscription by the 44 countries who participated in the Bretton Woods Conference The bill now pending provides that no change may be made in the subscription of The amount of the Bank's loans and guarantees may not exceed the unimpaired subscribed capital of the Bank plus its reserves and surplus From its operations the Bank will accumulate a special re- In addition, the Bank will accumulate a surplus nor may the American Governor vote for an in- from its undistributed earnings zation of Congress. Ten percent of the subscription to the Bank will be paid in Of the amount paid in. one-fifth will be in gold and the remaining four-fifth in currency. The $910 million paid in may be used for the purpose of making direct loans The Bank may call on addi- tional 10 percent of its capital if it requires the funds for its loan operations. The greater part of the subscribed capital will be kept or a surety fund which may be called to meet obligations on guarantees and securities of the Bank Subscriptions serve through commissions on guarantees and loans the United States without authorization of Congress crease of the capital in the Bank without the authori- AUTH SUBSC $ If the Bank should sustain losses on the securities it guarantees or on its direct loans it will meet these losses with its resources in this order: first, by draw- ing on its special reserves; second by using its surplus; third by calling on the surety fund and finally, if necessary, by using the paid-in capital which it holds Calls upon capital to meet losses of the Bank are payable in gold dollars or the currency needed to meet the obligations The paid-in capital may be converted into any currency needed to meet the obligations of the Bank Paid-in 17 PRECISION TRADE MARK MICROSTAT MG.U.S.PAT.ORK MICROFILM International Bank For Reconstruction And Development RESOURCES AND THEIR USE AUTHORIZED CAPITAL $10 Billions instructions and Development: Resources BANK'S Subscriptions OPERATIONS The amount of the Bank's loans and guarantees may not exceed the unimpaired subscribed capital of the Bank plus its reserves and surplus. From its Loans and Guarantees operations the Bank will accumulate a special re SUBSCRIBED CAPITAL serve through commissions on guarantees and loans $9.1 Billions In addition, the Bank will accumulate a surplus May not escand unimpoired and surplus from its undistributed earnings It the Bank should sustain losses on the securities it guarantees or on its direct loans it will meet these losses with its resources in this order: first, by draw- ing on its special reserves; second by using its surplus; third by calling on the surety fund and finally, if necessary by using the paid-in capital Calibble to meet obligations quar BOYBank which it holds Calls upon capital to meet losses of the Bank are payable in gold dollars or the currency needed to meet the obligations The paid-in - address able - cold - dollars. currency re- SURPLUS RESERVE Commissione Undistributed on Earnings end loons quired meet obligations 3 $ capital may be converted into any currency needed to meet the obligations of the Bank a SPECIAL SURETY FUND $7.280 MIL Caliable for Operations Paid-in $182 Currency Currency Can be used for loons out of capital Available meet lesses offer surety fund reserves and surplus have been used Available meet shart XVIII-International Bank for Loan Operations I When borrowing governments or borrowing cor- Reconstruction and Development: If the Bank guarantees the loan the securities will be sold to the investing public through the usual in- porations can obtain loans on reasonable terms vestment channels If the loan cannot be obtained from investors, the Bank will not concern itself with even with the Bank's guarantee, the Bank may make the loan In such cases, the loan will be raised the loan out of its paid-in capital or out of funds through the usual investment channels from the in- borrowed from investors. The funds borrowed from investors will be raised by selling the debentures of vesting public. If the loan is not otherwise obtainable on reason- the Bank to the public through the investment market Where the Bank makes direct loans, it may find it able terms, the Bank may guarantee or make the loan In the case of a corporation, or another bor- desirable at some later time to resell the securities to rower which is not itself the central government of a the public country, the Bank will require a guarantee of the government or the central bank before making or guaranteeing the loan All applications for loans or guarantees by the The Bank will assure itself that funds borrowed by governments or corporations are economically used the Bank The loan can only be approved if it is account to meet actual expenses for the approved countries will be in a position to service the loan, if priate, and if the loan is not otherwise obtainable in the market In exceptional cases, the Bank may also make long-term stabilization loans BORROWERS Borrowing Governments Corporations Borrowing If Joan otherwise able Dent may - able No or moke loan does investigates Loan (Must le for specific pro- 3. Terms project active 4.Loan loan When a direct loan is made by the Bank it will open an account and the borrower will draw on the the terms of the loan are reasonable and appro- Relationship Between Borrowers and Invest BANK LOAN COMMI II Bank must be investigated by a loan committee of for a specific productive project, if the borrowing International Bank For Re LOAN ( project. On guaranteed loans, the Bank will make arrangements to assure that the proceeds are used only for the purposes for which the loan was made. These arrangements to assure economical use of the funds are intended to safeguard the interests of the borrower and the investor SOURCES OF FU Paid-in Funds Capital INVESTMENT MARKET Bank Securities borrower may be public Debentures sold to public INVESTING PUBLIC RECISION TRADE MARK MICROFILM MICROSTAT ROLL NO. International Bank For Reconstruction And Development Reconstruction and Development: LOAN OPERATIONS II Use of Borrowed Funds If the Bank guarantees the loan, the securities will be sold to the investing public through the usual investment channels If the loan cannot be obtained even with the Bank's guarantee the Bank may make I Relationship Between Borrowers and Investing Public FUNDS BORROWERS Borrowing Borrowing Corporations Governments BORROWED the loan out of its paid-in capital or out of funds borrowed from investors. The funds borrowed from investors will be raised by selling the debentures of the Bank to the public through the investment market Where the Bank makes direct loans, it may find it wise / adminable reasonable terms investors Bank - Bonk may question Guarantee of Govt o Central Bank does hondle bee Bank noke or- BANK LOAN COMMITTEE the public Terms loos recess- (Must for specific pro- able and appropriate ductive project account to meet actual expenses for the approved market service least When a direct loan is made by the Bank it will open on account and the borrower will draw on the 4.Loom obtainable in , Borrower ad country Funds borrowed by Capital Bank from Investors the borrower and the investor. rever may drive on account meet actual expenses loan made Guaranteed by Bank Arrongements . ISSUER economical use of funds INVESTMENT MARKET These arrangements to assure economical use of the funds are intended to safeguard the interests of bor. sure that proceeds are used only for purposes for which SOURCES OF FUNDS Paid-in project On guaranteed loans, the Bank will make arrangements to assure that the proceeds are used only for the purposes for which the loan was made Bank will on rengements as- investigates Loon The Bank will assure itself that funds borrowed by governments or corporations are economically used LOANS LOANS desirable at some later time to resell the securities to II DIRECT GUARANTEED Bank Securities borrower maybe resold public Debentures sold to public Guaranteed securities sold to public Bank will impose conditions requiring expenditure of loos) particular member country INVESTING PUBLIC MPRECISION TRADE MARK MICROFLM MICROSTAT ROLL NO 304 25 MAY in closing, I wish again to assure you that - have given careful consideration to all aspects of this problem. Although I as leaving town today for few days I hope to see you again 1945 before your return to lelgium. Sincerely, in by dear Mr. Unit (Signed) H Morgenthese This is in reply to your letter of May 1, 1945 concerning advences of telgian france for the pay of nited States troops in to have one as thoroughly into the letter relating to felgian france advanced to the United states any as is possible at the present time. . a result of this -assidiation, the now indicented that we can pay an additional Government at this time, Mr. Camilla Cutt, 1725 22nd Street, 1. " Washington, D. C. for 18,500,000 Department to the has lelgian taking . This total of 113,500,000 paid on account of advances for troop pay. payment will to rade promptly in the usual ranner. : realize that a considerable discrepancy still results letween the elgian france advanced to the nited states Artify and the france for which we have sottled on account of troop however, that stope are and it is pay. recenty this on assure situation, you, anticipated that being within taken the to near future the total of advances will be reduced substantially. About June 15, as - have already indicated to you, the entire the situation Le due to be re-exandred by the lar Department on heals of nors complete and spoto-date information than is at present available. is that time the actual situation should be such clearer than it is now. it in view of our arrangements with other liberated countries, will be impossible for us to wake additional payments to situation is on concern with the advances for you and settlement for these advances, understand Bulgium until fully the your reviewed wide June discrepiney 15. and ie, - between of pointed course, out above, the are Department is taking stops to ready this aspect of the situation. It has, however, been difficult for us to understand your insistence us impliate payment for all france used for treep pay, when all that can to involved is payment followed by a partial repayment. Contrary to the impression which you have that the "reserve" allowed in the ar Department calculations for return to military channels of troop pay paid in local currency is a guess, this reserve is based on careful analysis of the expenditure pattern of our troops. 5/4/15 JASK MICROSTAT NO. U.S. PAT.OFF MICROFILM ROLL NO AMBASSADE DE BELGIQUE Washington, May lat,1945 0.6443-6 & D.6402-3 No.2609 January for dear Secretary, I hope I will be able to leave at the end of this week for Tel-ium, where I should go back na soon 18 possible. Before that, I would like very much to say good bye to you. I heard with great pleasure that l'saMergenthau's health WILD improving. I wired to you on Friday to congratulate you on your father's birthday, but the cable WILD returned to the as the regulations forbid - which I did not know - cables on these matters. Delieve no, my dear Secretary, Yours very sincerely, Gouth The Honorable Henry Secretari of the Treasury. MARK MICROSTAT REG. U.S. PAT. OF MICROFILM ROLL NO AMBASSADE DE BELGIQUE Washington, May lat, 1945 D.8443-6-1 G 8492-3 No.2677 ity deal Secretary: Friday afternoon, April 27th, I had G neeting with Cleasers.Daniel Bell, Frank Cox, General Richards and his assistant. Another meeting is scheduled to take place some time this week. But, although they all showed every possible courtesy and good will, I an afraid things did not advance much and I wonder whether they will advance more this stook, as the Army seena to want definite figures, whilst I want definite principles. One never known whether one is entirely right on a given question before having discussed it with the opposite parties and havin listened to their arguments. I listened with great attention to the arguments put forward by the Army and I am really convinced 1 entirely set every one of them. This is why I an writing you today. Our position is based on the letter sent on January 30, 1943 by our Ambassador in Washing ton to the Secretary of State, making it clear that we would provide in reverse lend-lease "supplies, materials, facilities and services for the United States forces, except for the pay and allowances of such forces, administrative expenses, and sudh-local purchases as its official establishments may make other than through the official establishments of the Government of Belgius." morable Henry Vorgenthau,Jr. Secretary of the Treasury, WASHINGTON,D.C. --2- There could be no doubt about the meaning of this sentence. All the Belgian notes used for the pay of the Army did not come under the reverse lend-lease provisions and had therefore to be paid in dollars or sterling. From the first day We agreed not to ask for the payment of the notes transforred to the arnies but not actually paid up by them, e.g. remaining with the Field Army cashiers, although they have been - on account of their importance - a heavy burden for us as they quite unduly increased our monetary circulation. 3ut from the first day too, our point WILS - and has never been contradicted until I cane to Washington last month that the suns actually paid up to the troops had to be reimbursed to U.S in dollars or sterling, it being understood: firstly, that a certain margin - 10 or 20 - could be left to cover the direct purchases made by the arnies: secondly, that this TBB purely & current account to be regularly adjusted and that the Belgian notes, when ultimately handed back to us, would be repaid to the United States Army in dollars. This is,in fact, the a reenent WO made with the Canadiana and the British. And the latter, having received substantially theCaase amount as your Army until larch 31st, agreed to make two first payments totalling 84 million dollars. So far, payments made by the United States army to us have amounted to only 5 million dollars. Thesetartling difference comes from the fact that the United States Army wants to make its payments according not to .... OSTAT MICROFILM ROLL NO -3the amount paid up to the troops, but to the amount that the troops are supposed to have actually spent. To 20, this does not seen lo rical at all. It is pure guessing and, I would add, useless uessing. If a part of the TAX the not been spent, it will eventually flow back to the Field Army cashiers and from them to us, and TO will repay it in dollars. This is clear and definite. Out we have to start from actually known figures and not from approximate estimates. And the only known figures are:1) The suns transferred to your Army. 2) The SUSA paid up to your'troops by your Army. I do not think this thenis in itself met with any opposition. The objections rained more objections of fact, not of principle. They are as follows: 1) This thesis could Lave been discussed at the beginning of the operations, but it should not be at this stage of the EAN. 2) It should be discussed all the less because if our point more admitted, the other liberated countries would want to take advantage of it, which would oblige the Army to entirely alter its accounting ayalen. I did not agree with either objections, and my reply was the following: 1) The operations in Belcium began in September We had transforred to STARF, before the liberation, more than five billion 'Panos (115 million dollars) for the tno armies. As soon as new demands more put forward, I repeatedly drow the attention MICROFILM MICROSTAT ROLL NO -4- of SHAEF on their quite abnormal volume and pointed out that the figures were extravagant. Despite all the replies to the contrary, events have conclusively proved that I WAS right. At the sane time, I unceasingly asked for accounts indicating the distribution and the use of the funds/Tor payments. Both were always promised for one or two months later, but every time the date WILD postposed. You certainly will & ree with mo that it would not be fair to make us bear any responsibility for the matter being discussed only now, as the raised the point from the very beginning of the operations and the delay comes exclusively from the Army. 2) whether other liberated nations would claim the same regime I 0.7 asking to be applied to us, I do not know; but I want to point out that our situation is quite different from theirs. For eographical and strategical reasons, the density of the troops located in Belgium has been much reater in proportion to the territory occupied than in any other liberated areas. The Battle of the Bulge still increased this difference. Belgium is the country which, proportionately, has by far transferred to the armies the greatest amount of national currency, and by far supplied the reatest volune in lend-lease. 3) This leads the to a third remark which Was made at our meeting, when it WIS suggested that THE should consider our position vis a via the nited States globally, ... from the angle not only of Belgian notes transferred but, too, of lend-lease received. Had I adopted this point of view, the only result would have been to make our case still much stronger, as the reverse OSTAT MICROFILM ROLL -5lend-lease we supplied considerably exceeds the lend-lease we received. is a matter of fact, on arch 31st, 1945 we had actually supplied to the United States Army reverse lend-lease goods and services to the amount of 77 million dollars ( to which should be added all the commitments entered into ), whilst we had received in lend-lesse 7 million dollars. The Agreement signed on April 17th,1943 brings the latter figure - as of arch 31st - to about 10 million dollars. or course, TO are not asking the nited States Army to change its accounting system. But accounting is one thing, provisional payments are something else. They have to be based on the only real figures to possess, and to be adjustedlater on either monthly or quarterly. I apologize for this lon letter, but I had two reasons for writing it: The first is to show you that none of the arguments raised against our point of view can stand discussion. The second - and I stressed it already in w previous letter - is that, 114 we not come to a fair agreement, I should fear the public opinion's reactions In my country. I an very man concerned about that point. The payments made by the Britinh and Canadians have been published in Belgium. I instructed my people in Brussels not to mention, ao far, the 5 million paid over here. I was afraid such publication would create hard feelings, and I would go to any lenth to prevent it. MICROSTAT MICROFILM -6- For the last eight months, I have lived in Belgium and I have seen how public opinion in a liberated country reacts. People having been shut off from the outer world and having stood under the strain of occupation for more than four years do not always essily understand certain thin S. It WAS hard, for instance, to explain in Belgium our lend-lease position and my lend-lease a greement. I nevertheless aid explain the position and took the yes consibility of al min the agreement, for I thought the AFFAR ement was a fair one. I could not say the same, in all sincerity, if the point I made at the meeting were not net. Believe me, my dear Secretary, Yours very sincerely, Goth 312 Bern Dated May 5. 1945 Barn KDW-763 This telegram must be persphrased before being communicated to anyone other than . Opvernment Dated May 5, 1945 Rea'd 5:41 p.a. Secretary of State, Rec'd 6:15 p.m. Washington Agency. (RESTRICTED) 2631, May 5. 9a. a. Secretary of State, VK3 FROM MOOLELLAND Washington Following from Sternbuch to Yead Hahstsals Sev York, 2643, May 5, 7 p.m. We have received following wire from Samule HRB FROM MOCLALLAND From Higgner to Nahum Goldmann, World Jewish Congress. "View capitulation Deman southern army, I call your attention to following people who were very active in anti-Jesish persecution Hangary and who according recent information had retreated to Salaburg region: (one) Tasalo Endre, (two) tassle Baid, (three) Oberetliautenant der Gendarmarie Lasale Ferency (four) attorney Medigreeny, (five) Peter Hain, (six) Gyorgy Glah, (seven) Fgrenny Rajnixx, (eight) Istvan Milotay, (nine) Perenos Tajta, (ten) Ference Kies, (eleven) Done Stojay, (twelve) Andor Jaross, (thirteen) Mahaly Kolosavari-Boreas, (fourteen) Gyorgy Tokace, secretary of Endre, (fifteen) LAJOS Dovenyi-Hapy, (sixteen) Anton Kander, Military authorities should be advised view treatment as war orininale." HARULISON JT Vice Shanghai support received specify yes Niveh expenditure unconditionally urging 12,000 france monthly* HARRISON JMS 313 314 PARAPERATE OF TELMORAM RECEIVED FROM: American Consulate General, Jerusales THE Secretary of State, Washington DATED: May 5. 1945 72 SECURIT Request 1. made by Judah Magne that . persphrase of the message given below be sent through the War Refugee Board to Baervald, Joint Distribution Committee, New York. Should the American Jewish Joint Distribution Committee so desire, : understand that the Allied Centrol Commission Patapeat will ask for information from the Government of Hangary which will be given to the Joint Distribution Committee as to what help the Jewish people of Judapeet may need. Our recommendation is that such . request should be made at once. PINKARTON DS/L: 5/7/45