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GhiuaK vicr-^i^r

General
The ^resent note presents c e r t a i n observations on, r a t h e r than a

comprehensive analysis o f , what American p o l i c y should be i n the e v e r t of a
t o t a l . German v i c t o r y i n t h e near f u t u r e ,

'3y t o t a l v i c t o r y i s neant the

d e s t r u c t i o n or e l i m i n a t i o n o f l l l i e d r e s i s t a n c e on the
n e r t few week© or months*

e s t e r o f r o n t i n the

The c o n t i n u a t i o n o f r e s i s t a n c e i n t h e p e r i p h e r y

o f '.vestern Europe >r i n t h e f a r f l u n g t e r r i t o r i e s of the French and B r i t i s h
Empire* w i l l probably have l i t t l e i n f l u e n c e on t h e f i n a l outcome.

The e l i m i -

n a t i o n o r t h e conquest o f the nerve centers o f t>ese empires w i l l s e r i o u s l y
h i n d e r e f f e c t i v e r e s i s t a n c e ] f u r t h e r , the w i l l t o r e s i s t a n c e w i l l be more
than weakened by the absence o f a strong r a l l y i n g f o r c e or neneleua.

?he

l a t t e r cannot or w i l l not be found i n t h i s c o u n t r y , and w i l l c e r t a i n l y not
be provided by t h e A l l i e d n a v i e s , even i f they should remain i n t a c t *
2*

Tobable •.•erman i-'eace
American p o l i c y w i l l depend i n the l a s t a n a l y s i s on the d e t a i l s o f

t h e peace t o be l o o s e d by Germany*

Though these d e t a i l s r e n a i n a • y s t e r y ,

the bread terms o f a Clemen peace s*y be sursdeed on the basis o f the paut
d e c l a r a t i o n s ml

a c t i o n s o f GerMn leaders*

I f t h e Treaty o f

'uenster o f

1940 i s t o reverse the course of t h i n g s determined i n the sane c i t y by t h e
Treaty o f

e a t p h a l i a o f 1648, then the Holy Hasan 'Empire w i l l be r e s u s c i -

t a t e d w i t h Adolf H i t l e r donning t h e robes o f the Holy Roman Emperor*

In

consonance w i t h the speed brought about by t h e l a s t t h r e e c e n t u r i e s , the
successor t o the Holy Empire w i l l a l s o have under h i s sway a t l e a e t the
B r i t i s h I s l e s , the Near an 1 Mi l l i e

a s t , and A f r i c a .

The l e ^ a l f o r r o f tl-se Oernan c r e a t i o n w i l l be, a t most, of secondary
importance.



hether t h e French are granted a l a r g e lei^ree o f autonon^, o r

-aw* ether Joachim von Ribbantrop w i l l be able to r e s i s t the t e s t a t i o n of s i t t i n g
i n Buckingham Palace, w i l l not a l t e r the essential objectives o f the 3en»an
leaders*

The s u s c e p t i b i l i t i e s and aims or t h e ti*3*S*U* ma;, be r e e l e c t e d f o r

a w h i l e , a n ! the services of the f a i t h f u l partner, Signer M u s s o l i n i , w i l l be
exceedingly valuable*
in

His airforce can be used to b o t t l e up the A l l i e d f l e e t

he Mediterranean, h i s colonies can rerve as an e x c e l l e n t springboard f o r

"morning up* resistance i n the Mediterranean, the > 5 Idlo 3 a s t , and A f r i c a ,
1
and ' l i s navy, t o gether w i t h that of o t h e r European powers, w i l l constitute
ar. important element f o r such "pacification" or domination as iai?ht be considered i r -e i i a t e l y worthwhile or digestible*

In the Immediate f u t u r e ,

there-

f o r e , the Jeraano-Italian creation w i l l probably comprise, a : t e r making
allowances f o r Soviet demands an- s u s c e p t i b i l i t i e s , p r a c t i c a l l y the whole
o f Europe amd A f r i c a , and such p a r t s of the Middle East as t h e U*3*S*ft* i e
not w i l l i n g t o f i g h t f o r *

I t i s u n l i k e l y that the combination w i l l venture

further u n t i l the reorganisation of the above-mentioned areas has bean
achieved*
Judging by t h e speed of tlx? movement of t h e Gensan forces and t h e
comparatively amall m a t e r i a l laaage i n f l i c t e d on I n d u s t r i a l plant and ccrasuni c a t i o n e , i t wo I d appear t h a t the reorganization of the w a r - t o r n areas aid
oi the r e 3 t of the t e r r i t o r i e s acquired w i l l be r e l a t i v e l y easy and quick*
I n other words, p r a c t i c a l l y the whole oi the i n d u s t r i a l , cotnsercial, and ran/
material wealth o f the r e g i e s from Narvik i n the Arctic Circle to the Cape
of Good Hope w i l l remain i n t a c t and w i l l serve? such rarposes as the new mast e r s may agree upon*

I t i s u n l i k e l y t h a t t h e Jerraano-Italian combination w i l l

wish t o l e a d t h a t easy and peaceful l i f e wiich t h e y have so scorned*

Besides,

i f the new order i s t o a c i i i e v c , as iroisised, the mastery o f t h e governing
"races" f o r



f,

at l e a s t a thousand y e a r s " , i t w i l l be necessary t c prevent i n

-5any and ever

for® the possible r e v o l t of the conquered an1 t o s t r i k e devious-

l y or d i r e c t l y at enemies outside tiie newly formed " i m p e r i a " .
i s e s s e n t i a l to u n i f y t h e whole area economically.
have a t h r e e f o l d objectives

For t l d s

it

This u n i f i c a t i o n would

(1) g i v i n g the conquerors c o m i c t e c o n t r o l o f the

e s s e n t i a l means e f production! (2) assuring an armed strength which w i l l keep
the conquered under perpetual subjection, render the c a r t e r s impervious t o
attack fro?, the o u t s i d e , an] provide them w i t h the means t o extern t h e i r sway,
d i r e c t l y or i n d i r e c t l y , to other areasj and (3) y i e l d i n g the highest standard
o f l i v i n g f o r the "masters 1 .

The h i g h l y c e n t r a l i z e d systems i n force i n

Germany and I t a l y are i d e a l l y s u i t e d f o r these purposes*

?*iey are l i k e l y t o

be applied wi t h the greatest v i g o r and immediately f o r a monster armament
pro rami such a >rogram together w i t h p u b l i c works w i l l have the advantage
of reabsorbing the demobilised men o f the conquered nations.

Further, these

systems permit many forms o f pressure on r e c a l c i t r a n t s or opponents outside
the p o l i t i c a l j u r i s d i c t i o n of the systems* and narrj subtle ways of i n f i l t r a t i o n i n the a f f a i r s of o t h e r s ,

Tie economic bargaining powers o f a u n i f i e d

and c e n t r a l i s e d Europe and I f r i c a are enormous, and the temptation to use
their w c r l 2 be toe great even f o r those not i n c l i n e d to ambition or adventure,
rhe dangers confronting the United states a r e , t h e r e f o r e , not d i r e c t .
Few, Colonel Iindberg 1 s pronouncements notwithstanding, have a t t r i b u t e d to the
Nazis the -wild scheme of an immediate invasion of t h i s country by f l y i n g or
s a i l i r . r armadas.

The subjugation of t h i s country to the aims and desires of

the Kasi—Fascist combination w i l l f i r s t be attempted by the isethods o f pressure and d i s i n t e gration applied t o A u s t r i a

and Czecho-Slovalda.

I t i s only

i f these do not succeed, an! a t a much l a t e r stage t h a t actual invas'on maybe t r i e d .

Further, i f t h i s country does net p r o f i t by the lessons of recent

years, there i s l i t t l e reason to suppose t h a t these devious a n l less expensive



-4-

r.etbods v r i l l not be successful*
Arericsn p o l i c y should ;>ave a twofold o b j e c t i v e , the prevention
of i n f i l t r a t i o n and d i s i n t e g r a t i o n t'.rough economic p r e s e n t s and propaganda,
an-! the b u i l d i n g up of an armed strength s u f f i c i e n t at least to disccura c
opes of a successful invasion.

Heedless t o sav, the a c t i o n c a l l e d f o r w i l l

be stupendous but c e r t a i n l y not outside the capacities o f t h i s country,

ac-

t i o n w i l l also have to be imatdisfaej i t would have t o assure the f i r s t object i v e almost at once and achieve the second w i t h i n eighteen months or two years.
The

a s i - ascist conquerors w i l l continue t h e i r f e v e r i s h a c t i v i t y ; there i s

nothing i n t h e i r past a c t i o n s or pronouncements t o j u s t i f y t h e hope t h a t they
w i l l not t r y t o b r i n g down the l a s t stronghold oi

(,

pluto~democracy H whi ch

has been t h e i r avowed opponent and eneray f o r years an-i which, by i t s continued
exi stence, shews up the shortcomings of t h e i r can reglaes*

The re; percussions

o f the acts of the Chamberlains, Simons, iloares, Txmnets and r a l a d i e r s
should be a suprens warning against baljf measures and against being l u l l e d .
1 nto a f a l s e sense of s e c u r i t y by the f a i r wor Is and promises, i n f a c t , by
the whole ba-; of t r i c k s of t h e Nazi- as c i s t c o n j u r o r s .
S.

-1 an American Vslfay
A fev? of the broad measures f o r achieving the twofold objective

of American p o l i c y are noted b r i e f l y below,

i'hey cor ;rise d i p l o m a t i c , f i n a n -

c i a l , and economic measures*
A.

diplomatic
1,

The purchase, lease, or a c q u i s i t i o n by other means of the

Anglo- rench Islands d o t t i n g the A t l a n t i c and P a c i f i c Oceans
from Cape Verdi Islands to Hawaii.

The importance o f these

islands f o r the naval and a i r defense o f t h i s hemisphere and the
necessity f o r t h e i r immediate f o r t i f i c a t i o n i s e v i d e n t .



To

-5avcid t h e i r f a l l i n g under the j u r i s d i c t i o n of other hands, these
islands should be acquired p r i o r to Use d i c t a t i o n of pimce.

rheir

a c q u i s i t i o n might become w r y urgent i n the event o f the A l l i e d
f l e e t beine handed ever t c the Conquerors i n r e t u r n Tor peace c r
Tor the s a l v a t i o n from a i r borabardrsent of the open c i t i e s of England
and France.

The d e t a i l e d means o f acquiring them are outside the

scope o f t h i s notej claims o f the United States on trie A l l i e d count r i e s and nationals might serve a t l e a s t as p a r t i a l settlement.

If

d i f f i c u l t i e s ever p r i c e s should a r i s e , f o r c i b l e seizure of those
i s l a n d s nearest the hemisphere might be j u s t i f i e d .

Fhe leasing

o f s t r a t e g i c points i n l a t i n A * oica, both f o r reasons of
m

lofense

an ! as a r oans of rendering f i n a n c i a l and economic assistance t o
the s i s t e r r e p u b l i c s , also ieserves serious a t t e n t i o n .
2.

rne conclusion of a f a r reaching agreement w i t h the Japanese

concerning P a c i f i c possessions, economic and m i l i t a r y r a s t e r s .
This ahovld be ione even i f i t meant the cession o f the East Indies
a n l P h i l i p p i n e s t o the Japanese.

I f necessary, such a t r a n s a c t i o n

s i g h t not be too great a p r i c e t o pay f o r covering the P a c i f i c
f l a n k of t h i s hemisphere, m i releasing the American f l e e t f o r
service i n the A t l a n t i c *

I'he c o n f l i c t of ierroan, I t a l i a n and

Soviet i n t e r e s t s -with those of the- Japanejse i n t h i s area, probably
assures a more or less n a t u r a l a l l i a n c e between the tpro countries at
t h i s t u r n o f w o r l d events*

Though t h e Japanese might become inde-

pendent i n oetrolcum supplies by acquiring the Fast Indies* they
w i l l s t i l l r e q u i r e the raw materials and I n d u s t r i a l products i i t ^ r t e d
from t h i e beni sphere.

M i

f a c t o r , together w i t h a Japanese desire

t o steer away Tram dependence cm supplies found i n areas under




* asi-Fasci at c o n t r o l and the f a c t t h a t th":s hemisphere o f f e r s an
easier an

more l u c r a t i v e mar ret f o r Japanese s i l k and panufactured

products, wo; I d assure to the United s t a t e s the r e g u l a r d e l i v e r y of
such e s s e n t i a l raw m a t e r i a l s of the P a c i f i c as t i n and rubber.
(Kequirements .in the former would be considerably reduced by the
purchase e i t h e e n t i r e B o l i v i a n output which normally roes t o

T

ngland.)

I t r i g h t also be r e c a l l e d t h a t the Japanese economic and s o c i a l regime,
despite the inroads

ade by the m i l i t a r y , i s e s s e n t i a l l y p l u t o c r a t i c

atH, hence, n a t u r a l l y h o s t i l e
5.

;o Nasl-Fascist conceptions.

the s e t t i n g up o f a juperconfederation of the nations of t h i s

hemisphere f o r -urpoaes of f o r e i g n p o l i c y sad defence,

This cannot

be s u c c e s s f u l l y achieved unless acec . . anied by f i n a n c i a l and economic
aeasures which w i l l prevent the i n f i l t r a t i o n o f non-American d i s r u p t i n g forces\

these are mentioned below.

The means of f i n a n c i a l ,

economic, and other pressure a t the d i s p o s a l of the United s t a t e s
are v a r y s u b s t a n t i a l , and should not be spared I n achieving t h i s
I f n o t , the device of " d i v i d e and rule 1 1 which was so success-

object.

f u l l y a p p l i e d t o Europe might a l s o become a r e a l i t y i n t h i s hemisphere.
• i n a - . c l a l and
.
1.

.gonosd? i..easureg

I n order t o l&plemsnt the p o l i t i c a l o b j e c t i v e s o u t l i n e d above

i t i s necessary to reor *aniae the system o f the f o r e i g n tra^Je o f t h i s
hemisphere*
i n viisrw:

This r e o r g a n i s a t i o n should be e f f e c t e d w i t h three aims

(a) the p r e v e n t i o n of economic pressure and i n f i l t r a t i o n

i n t h i s hemisphere by the f a s i - F a a e i s t combination!

(b) t h e "•reserva-

t i o n of a s u b s t a n t i a l p a r t o f United States f o r e i g n t r a d e ! and (c)
the geographic r e d i s t r i b u t i o n or the a l t e r a t i o n i n the composition
of the f o r e i g n trade of t h i s hemisphere when t h i s i s c a l l e d f o r by
 reason


o f f o r e i g n p o l i c y or m i l i t a r y and defence s t r a t e g y .

These aims cars be attained e f f e c t i v e l y only by t h o c r e a t i o n of
trad-:

corporations f o r c e n t r a l i s i n g and c o n t r o l l i n g the f o r e i g n trade

of t h i s hemisphere.
or separately*

Exports and imports cc I d be handled stefltanecmsly

As regards exports, one ?nay envisage two corporations*

The f i r s t , which won I d be a l l - A s s r i c a n , would deal e x c l u s i v e l y w i t h those
products i n which the component >arts o f t h i s hemisphere are competitive,
e . ? . | wheat, c o t t o n , copper, sugar, petroleum products.

Exp r t quotas

cculd be determined on the basis o f oast export surpluses! the cor poration
wc I d dispose of the combined export surplus as i t s m f i t and would
remunerate the various aersibc i on the basis of an average, or some other
agreed form o f , or ice obtained >n the e n t i r e export*

fbe © r p o r a t l on

would have t o be a close c a r t e l , an " not a l o o i e club o f tracers*
The second corporation might- be- s o l e l y a United States organisation*
Phis weul- d e a l i n such products o f t h i s heiaisphere as the United States
imports, e * $ * , n i c k e l , t i n , c o f f e e , cocoa, copra, and o i l seeds,

hen

U* S* t o t a l iimports are equal t o or i n excess o f the export surplus of
the hemisphere, then the corporation could bay the e n t i r e annual p roduet i e n ar.i s e l l i t to manufacturers i n the United States.

Such would be

the ease, f o r example, w i t h B o l i v i a n t i n and 3 r a s i l i a n and Ecuadoran cocoa.
If,

the coher hand, the output of the hemisphere i s i n excess of U* S#

requirements, e . g . , cof ee, a problem a r i s e s w i t h respect

the disposal

of the excess* fhe coroora i i c n could, i n exchange f o r an option on the
e n t i r e o u t p u t , l i m i t production on som agreed basis*

The disposal of

the excess might involve l o s s , but such l o s s would be very small compared
w i t h expenditure on a f l e e t s u f f i c i e n t t o p r o t e c t every nook and corner
o f the South American A t l a n t i c seaboard, and the advantages obtained i n
preserving antJ extending



!

* S. exports t c various

a r t 3 of the American

herd sphere3.
The c o n t r o l of lm;>orts coul
Ths

also be t t ted w i t h these c o r p o r a t i o n s .

roblems here would & ; a i n be t w o f o l d ,

The f i r s t would c o n s i s t o f

l i i r . i t i n : im o r t s f r o : the outside t o those products w i c h are not a v a i l a b l e , a t a l l or i n s u f f i c i e n t amount, .in the hemisphere, or which cannot
be 'compensated'1 by i n t o r-heu&sphere t r -.de.

The second problem would

c o n s i s t i n o b t a i n i n g iff >orts from ssarkets which are economically and
p o l i t i c a l l y the best customers of the hemisphere.

For p o l i t i c s

reasons,

as w e l l as f o r the pnr ose of o b t a i n i n g the best terms of interchange,
import i n

an-i e x p o r t ! n ; should be handled f o r t h e hemisphere: aa a whole*

The above proposal does not preclude the c o n t i n u a i i n o f such trade
as I s

)Oss'ble w i t h areas under Nasi-! ase s t dOirlnac on.

But i t

is

e s s e n t i a l t o observe a t l e a s t f o u r c r i t e r i a i n the conduct o f t h i s trade t
(a) the trade o f t h e e n t i r e hemisphere should be handled as a wholej
(b) the m i l i t a r y and econoadc requirements o f t h i s hemisphere w i l l have
t o be taken f u l l y i n t o account i n deciding the type and amount o f products
t o be exported} (c) i n order t o e f f e c t a s h i f t o f l a b o r and resources
may f r o r c e r t a i n overabundant

aroHxcts, a ^ r e p r e s s i v e c u r t a i l m e n t o f

t h e i r ex:>ort should be foreseen; an! (d) the import requirements of
f r i e n d l y areas i n the h a d Tic or slsew ere should be attended t o f i r s t .
' t r t h e r , the i n c l u s i o n , f o r example,
sehens envisaged f o r the

f A u s t r a l i a and New Zealand i

*®erlean hse^isnherc i s not a t a l l excluded.

the
Such

i n d - s i >n wo , I d deoend <m the tenriS c f the a preeiaent -with the Japanese,
an t the degree t o which i t i s a d v i s a b l e , b o t h econc x i e e l l y snd i r d l i t a r i l y ,
t e spread out t h a t




far.

-Dt*

The working i f th© corporations would bee-owe loss d i f f i c u l t i f

action

were taken t o render the various >arta o f the hemisphere less comet i t i v e
and more eorr-Xiznentary.

"-.is coclr? be jest done by

• ••* investment

which would encoura^e a s h i f t of labor an; resources away from the product i o n o f abundant staples such as wheat, c o t t o n , src^ar, and c o f f e e .
5.

Fhe susoension o f gold purchases,

Lf . f r i c a f a l l s under the sway of

the Nazi-Fascist combination, there i s no reason l e f t f o r the continuation
of U. 3« subsidies t o South A f r i c a n and other nines*

F a i r words fine!

prosdses about a r e s t o r a t i o n of the gold standard would be v a i n ,

fhere

i s no p o s s i b i l i t y of the I . 3. being able to dispose of even a f r a c t i o n
of i t s

j o l d s t o c k ; i t can only add t o i t *

.'tith U. S» trade under the

c o n t r o l of the corporations irent onel above, the usual considerations
regarding the e f f e c t s of an appreciated d o l l a r no I o n ler apply.

Hold

under earmark s h o u l i be consiiered as f o r e i g n gold 3 i t can e i t h e r be
returned t o t h e owners or kept f o r tliam i n s t o r a -c #
The general nsaintenance of ^ o l d wrchaaes i n order t o a s s i s t the
gold producing areas of t h i s heed sphere i s not j u s t i f i e d e i t h e r .

The

t o t a l g o l • output of t h e hemisphere i n 1933 amounted to 401 m i l l i o n d o l l a r s , or about SO per cent oi the w o r l d o u t p u t .

Production i n the

?

• 3.

an ) Canada amounted t o 14.. and 185 t s l l l i o n d o l l a r s , w h i l e she value of
the production of the r e s t of the hemisphere isas only 34 m i l l i o n s .

If

it

i s considered advisable t o acquire t h i s g o l d , i t shoul> be done by other
ireans than Treasury purchase.

The l a t i n American output probably does

not amount t o acre than 100 m i l l i o n d o l l a r s .

I t i s d o u b t f u l whet'scr the

Canadian production should be sn. s i d i s c d , except as a temporary measure*
~anartian resr -rces and labor co I d be s h i f t e d to other uses w i t ;
greater b e n e f i t t o the hemisphere as a whole.




far

-10-

/.

rhe i-rpounding of a l l f o r e i g n assets other than those belonging t o

the countries of t h i s hemisphere*
not rendering an

This needs t o be done w i t h a view t o

help to the eneogr and t o preserving American resources

and e f f o r t f o r t h e rearmament program an I f o r the reorganisation of t h e
hemisphere.
abroad.

A l l such assets should be held as cover f o r American claiias

I f r e p a t r i a t i o n i s t o be allowed i t should be l i m i t e d t o the

y i e l d of such investments and assets, and should take the forrc of p u r chases of c e r t a i n surplus American products, e . g « , cotton and tobacco,
l e s t t h i s procedure should be considered raah and u n e t h i c a l , i t rosy be
r e c a l l e d t h a t American investors i n Germany and I t a l y fare 1 far 1 worse, and
t h a t , from the n a t i o n a l point of view, trie Anarican counterpart t o these
f o r e i gn-held assets js mostly/ the gold a t Fort Knox.
5.

Heavy expenditures on r e a n a a e n t .

r e s e n t appropriations are hope-

l e s s l y Inadequate f o r purposes of b u i l d i n g up an e f f i c i e n t defence w i t h i n
the l i m i t e d t i r e a v a i l a b l e .
statement.

Two examples may be given i n support of tJiis

Present a i r c r a f t production i n lersiaay, England,

ranee, and

I t a l y , despite the imrraense d i f f i c i z l t i e s w i t h r e s e c t t o l a b o r , machinery,
and raw m a t e r i a l s , i s probably w e l l over the SO,000 planes a year which
President tooaenelt set up as a goal f o r t h i s e c v n t r y j and, according to
_ r.
a

ickenbaeker, even t h i s l i m i t e d out r.it cannot be achieved, under present

r e p r i a t i e n s and p l a n s , before the autusrn of 1 41.

Secondly, as f a r back

as August 1^39, termany alone had 500,000 men employed d i r e c t l y i n a i r c r a f t
production, and c a p i t a l investment i n the i n d u s t r y was a t l e a s t
can, or a miniiauzn of

603 per

3 billion.

These two examples, together w i t h the f o l l o w i n g f i g u r e s on the present
armed strength of t h i s country, are adequate i l l u s t r a t i o n s of the need for
heavy a p p r o p r i a t i o n s .



-11-

&BZ
2m

Battleships
Aircraft carriers
Heavy c r u i s e r s
Light c r a i s e r s
destroyers
SvbEoarines
Aircraft
' anpos/er—active
?iavy reserves
Marinas

15
5
18
17
219
95
2,163
145,400
55,035
25,000
&BBL

Aircraft
Manpower—active
National Guard
Reserves
Motor Vehicles
Tanks, e t c .

2,700
241,000
251,000
144,714
17,791
700 plus

A n t i - a i r c r a f t guns

400

A n t i - t a n k guns

744

There are only uwo methods f o r o b t a i n i n g the maximise e f f o r t from
private industryi

the temtan and I t a l i a n ir^thods of c o n t r o l and coercion,

or generous remuneration*

E i t h e r method - w i l l achieve the e s s e n t i a l aimst

the l a y i n g down of ner, p l a n t , the conversion or extension o f e x i s t i n g
p l a n t , and the drawing away o f sachins t o o l s and s k i l l e d labor from peacet o v-ar-fcirse occupations.

i r John Simon* s budgets bear testiiaooy t o the

d i s a s t e r s t h a t accosr>any par simony, and lack o f f o r e s i g h t and co\irage.
Germany1 s aggregate budget accounts f o r w e l l over h a l f o f i t s n a t i o n a l i n come j even p o v e r t y - s t r i c k e n I t a l y i s ievoting about h a l f o f i t s n a t i o n a l
income t o s a t i s f y i n g the ordinary and e x t r a o r d i n a r y needs of t h e S t a t e .
This country 1 s a ;re^ate budget i n 1933 accounted f o r about one-seventh o f
the t o t a l ineorae payaants t o i n d i v i d u a l s .




And only a s n a i l a ^ u n t o f t h i a

-12budget represented expenditure on defence as a a i n s t biie major p a r t l o r
•err,-any and I t a l y .

F u r t h e r , t h i s country has Inasnse resources o f mater-

i a l s , p l e n t y of excess i n d u s t r i a l capacity and i d l e l a b o r , and the i n t e r e s t
burden on the n a t i o n a l debt i s r e l a t i v e l y sisall.
therefore, for hesitation.

There i s no reason,

At the cost of a r e l a t i v e l y small increase

i n t h e i n t e r e s t charges on the n a t i o n a l debt, the economic patrimony o f
i n d i v i d u a l s and of the nation m y be kept i n t a c t , and, more i - p o r t a n t
s t i l l , the s p i r i t u a l and i n t e l l e c t u a l heritage of Western c i v i l i s a t i o n
w i l l be .^reserved*

Hay 22, 1940