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June 3, 1943


330 American Bank Building
Portland, Oregon

L'r. II• S. Eccles, Chairman
Federal Reserve Board
Washington, I>. C.
Deer L'arriner:
A recent announcer'ent by Secretary Morgenthau that hereafter
a single organization will be responsible for the Treasury's
financing program, has been a source of great satisfaction to those
people who have worked so religiously in the war savings program.
I noted particularly that the newspaper announcenent credits
this as a victory for you. Newspaper stories said that you are
of the opinion that sales to the public and sales to banks should
be handled separately. I have not been connected v/ith the treasury
program very long, but I am very strongly of the opinion that such
a separation is most desirable. I feel quite strongly that it is
essential for us to sop up an increasing proportion of buying power
from the general public and it has seemed obvious to me that the
inclusion of bank subscriptions and short tern issues merely confuses
the issue in the minds of the public.
We had a very successful sale to the public during the
drive and it occurs to me that you ray be interested in seeing a
copy of the report I made to the Treasury Department after the drive
I was drafted into this job rather against my own wishes, but now
that I am in it I feel quite strongly its importance and hope that
in our small way we in Oregon can contribute something to the fight
against inflation.
I would welcome very much any suggestions you have as to how
I can do a better job here.
With kindest regards, I am
Sincerely yours,


David Eccles
State Administrator


" ' •

; 9-i




The V«'ar Savings Staff took the position that during the Second »ar
Loan distribution would be of greater importance than sheer volume,
this in mind our phase of the campaign, later joined in by the Victor,' Fund
Committee, was designed to step up .sale of oeries E bonds and to reach
wage earners, salaried persons and small business enterorises as well as
professional people and farmers. It was our completion that a few trained
persons could, without benefit of campaign atmosphere, divert the lar
reservoirs of capital in government securities.
The "victory Fund Conriittee recruited a group of solicitors-, largely
from securities houses and insurance firms, to nake calls on individual
investors. It wns determined to leave the natter of promotion and smaller
investors largely in the hands of the bar Savings Staff.
Every business firn, every lodge and civic organization and every
grange in the state was contacted by letter in which was outlined a plan for
a campaign within their own firm or organization for the purchase of specific
fighting equipment* ±t was explained that this extra buying was over and above
payroll savings* Every fin or organization was aske •. to pledge itself
to buy specific equipment and to report sales and the achievement of the goal.
At the same time, the payroll savings division prepared to take advantage wherever possible of making permanent gains through increased interest
generated by these campaigns. Material on payroll savings as well as on
the campaigns was supplied all solicitors calling upon business heads
and other potential larger investors. This was to enable then to answer
questions and to increase interest in campaigns, fortunately, most of
the solicitors had worked previously in the original payroll savings campaign in 1942 and so were able to be very helpful.
The entire pro ;rarr was backed up by an advertising campaign made
possible through cooperation of newspapers and business firms, especially
retail establisliments. The volume of newspaper space devoted to display
advertising far exceeded our expectations. Special events end stunts, such
as a moc1: a m y invasion of Portland, v.ere carried on continuously throughout
the state. One small city closed every business for a day and every
citizen participated in the drive.
In view of the fact that we had very few large subscriptions available to us, we believe our final result was very satisfactory. Wo had
splendid cooperation from the entire state and believe we achieved the
widest possible distribution of the securities. Cooperation between the
two organizations was excellent and there was no friction.

My own criticisn of the conduct of the campaign stems largely fron
lfck of time and inadequate planning and preparation. _jtrTls ou r frank^
opinion, p.or^over, that no purpose was served by planing the dr4j£e,jjyftd>er
direction of the Federal Reserve Bank, 1 & t matter of fact, this
created a great deal of confusion and it was apparent to us that the
Federal Reserve had neither the personnel nor the experience to conduct a
drive of this character. In many instances we would have been better off
had we had no direction fron this source whatsoever.


Mr. Arnold Grunigan, Executive Manager for the Twelfth -^strict War
Finance Committee, had a poorly concealed contempt for the Series E
bond at the outset and at our meeting with him in San Francisco he made
it plain that in his opinion this was "no woolworth affair". The result was
that far too few Series E order books were provided and it was necessary
to reprint late in the campaign. He seened to be under the impression
that Series Es are sold exclusively in v25 denominations. The successful
sale of Series E bonds to the workingman and the general public cannot, in
my opinion, be accomplished in the same spirit as prevails in the sale of
securities to regular investors.
It is my Judgment that a drive of this character should be addressed
to the general public exclusively. It should not include short time
issues or tax notes nor should banks and very large corporate investors
be included in the drive. Banks can be reached successfully by a snail
committee of bankers and the same can be said for insurance firms and other
similar heavy regular purchasers of government issues. Ho campaign ii>
needed to reach the relatively few very large individual investors since
they justify individual attention throughout the year.
The regular programs of the Vvar Savings Staff, payroll savings,
agricultural commodity check deductions, etc. can be made increasingly
effective and occasional special drives will tend to step up participation
and reach an increasing area of the general public. The inclusion of the
bank subscriptions and the short time paper tends only to destroy the
will of the small man to dig deep. My only serious difference with the Victory
Fund men related to their releases of pictures showing the county treasurer
or some large corporation official handing over a check for a million
dollars. I felt that this hurt our efforts to convince the wage earner
that the job was his.
One possible result of including bank subscriptions is illustrated by
an incident here. One bank subscribed for '.120,000,000 7/8 per cent
certificates, knowing they would get only a fraction of this figure.
Nevertheless, this subscription was bruited around town and we were put to
some trouble to defeat a growing rumor that the drive was oversubscribed
a few days after it opened. It was days before this was accomplished.


I am convinced that the integration of these two organizations for
the short period of a drive is ill-advised. I believe we need onlv one
Treasury financing organization; whether that be the 7<ar Savings ^taff or
ictory Fund is less important than the success of the effort, were it
to be the War Savinr.s Staff, however, there would need only be added a
deputy to handle corporate buyers and larger issues.
I would say that banks, insurance companies and other similar buyers
should be handled regularly by a bank committee. I repeat, no campaign
of the nature just concluded, is necessary to reach such groups.
Executives of the two organizations net and rather than integrate
entirely determined to divide the work and then to create e sort of
executive committee for policy forming purposes. Generally speaking the
Victory Fund Committee was to organize solicitation and reporting while
the War Savings Staff was to form plans for reaching that part of the
public not susceptible to individual contact by solicitors. An independent
publicity and promotion committee was set up with members of the V«ar
Finance Committee ex-officio members. In smaller communities this division
was less apparent as the chairmen of both committees work closely together
directing the entire effort.
It is significant to note that in snail corrrmnitiea bankers' interest
centered heavily on Series E bonds,
Solicitation was a more important factor upstate than in Portland.
About 200 salesmen called on larger accounts in Portland. In other counties
the solicitation included smaller buyers and in at least one county every
precinct was organized and I believe it is safe to say that every one in
the county was personally contacted. State directive personal consisted
of the regular War Savings and Victory Fund executives plus the chairman
and subcommittee chairman of the publicity committee plus about a half dozen
men borrowed for the drive to sake sales reports, nan headquarters and to
do contact vsork with upstate counties.
but it
in the

have no record of the number of volunteer workers but believe the
would reach nearly 3,000. This varied widely as between counties
is certain that a very large number of persons participated actively

In Portland solicitors were recruited by the Victory Fund Committee
from banks, insurance agencies, investment houses and civic organizations.
upstate somewhat the sane pattern was followed but recruitment was by the
co-chairman. Two meetings were held in Portland for training purposes and
meetings were staged in more important upstate cities to which were invited
workers from adjacent counties. It is not possible to say that any special

group or field was most effective. People in all walks of life did splendid
work, usually in direct ratio to the kind of leadership displayed by the
chairmen in the individual counties. Few meetings were held for workers
in Portland due to difficulties in getting attendance. In smaller communities it was customary to hold periodic meetings during the drive. This
was a continuation of the practice of many >»ar Savings chairmen, of holding
weekly meetings throughout the year. Those were sinply enlarged and expanded,
Executives of the Victory Fund personally handled most large prospects
such as institutions, the State of Oregon and large coprorations. One
exception was the fraternal insurance group and labor organizations which
were handled by this organization, due to previous close relationships.
Publicity was organized under Mr* W l t e r R. Kay, a member of our
comr.ittee, borrowed from Portland General Electric Company. His committee
was divided into groups including display space, newspaper publicity,
raHio, billboards, window display, retail participation, theatres and
special events. Speakers were provided by a special '**ar Savings Staff
committee already existing.
The campaign was preceded by locally produced radio shows on two
Portland stations on April 11. Radio throughout the state kept the drive
plugged throughout the month with several special shows provided. Commercial programs locally produced used drive material frequently and in
sore cases were dovoted exclusively to the drive.
On April 12 police cars in Portland cruised throughout the day
broadcasting Second Loan shorts over their loudspeakers, ^very telephone
subscriber was called during the first week of the drive.
A mock invasion of Portland was staged by contingents of the army and
Coast Guard and we regard this as being highly successful, especially in
view of our campaigns to buy military equipment.
Other special events
such as rallies throughout the state, raffles, auctions and war bond
previews were staged. Victory centers were active daily in leading cities.
The military equipment campaigns were limited to employees of business
f i r s and members of organizations plus the firm itself and this work was
carried on by one of our deputies, largely through personal contact, letter
and newspaper publicity.


The total of employee and corporate money pledged and reported in
these campaigns exceeded $20,000,000 . By way of illustration, employees
of one industry pledged $4,600,000, more than double regular payroll savings
Another industry bought two subchasers, or one million, 60 per cent of
which was in addition to payroll savings.
It was decided that the general advertising theme would be built
eround the fact that 813 billion is about £100 per person. Early advertising took the line "I need vlOO from you" showing a soldier on the
fighting front. This was carried with variations through the first week
and gradually changed with a view to getting HOre after the first bond
had been sold. The theme "Every idle dollar is a slacker dollar" was used
as well as variations of "Now dig until it hurts".
We had exceedingly fine cooperation from all parts of the state.
Retailers turned over a large portion of their space to the drive and many
non-advertisere took spree liberally. One large Portland store celebrated
its 86th anniversary sale by advertising nothing but war bonds for a solid
week. The thene was "This is the best buy we have offered in our 86 years"•
All advertisements furnished by Washington were sold. One town of 2,000
sold five full pages in addition to using contracted and regular space for
war bonds.
Apparently there was less success in selling outdoor boards but the
outdoor firms carried them on their own account even when they were not
Cur greatest weakness was in the field of poster material. That sent
here was wholly inadequate to our needs and we had to use our supply of
old posters to fill demands. Posters were supplied by San Francisco but
these came during the closing days of tho drive and were of little value.
One of the two supplied from that source was good but being one color
lacked appeal. 1'he other was highly juvenile in character and failed to
An excellent reporting system was set up by the Victory Fund in conjunction with the Federal Home Loan Bank who loaned two persons for the
compilation of reports. Unfortunately, it was not understood that the
number of subscriptions was to be required and I have no figures. I
believe some attenpt is now being nade to get this infornation but it will
be necessary to estimate the nuciber of Series E bonds sold.
We in Oregon are highly gratified as to the distribution. Series E
bonds constituted 28>a of total non-bank sales in Oregon, a much higher
percentage than had been anticipated. In Washington Series E were 18;^ of
the total while they were 12>* and 17,o respectively in Korthexrn and Southern
California. Wm believe our great effort in war plants and among employees

accounts for t h e higher percentage of I bonds in t h i s s t a t e , -e b e l i e v e ,
moreover, t h a t with more preparation we could have increased E sales a t
l e a a t by $5,QOO,OGO during the d r i v e , mployeea of some firms signed up
for special deductions but due t o the tirae element only one deduction wtkM
nade before May 1. Two more deductions w i l l be nade in May.
We felt at the outset that our quota was too high in view of the fact
that it was based on bank deposits and in view of the fact that allocations
were not permitted. Many of the large businesses here are foreign and our
bank deposits reflect money on deposit for their account. Insurance
companies, railroads, oil companies, chain stores and many others wore of
no value to us, even though our quota was based on their deposits In this
state. v»e made intra-state allocations in the case of banks, the State
subscription and those outside firms actually buying here. On instruction
no solicitation of corporate branches was nade but in a few cases local
managers asked their home offices for money and got it. Standard Oil
bought one million here and Shell Oil $200,000. There were no others
this large to my present knowledge.
I think future quotas should be based
on a recognition of this condition or that allocations should be
permitted. I would prefer the former course.
On the other hand, we nade our quota and do not want to complain.
«»e think we can make future quotas no natter how figured.
As stated at the outset, I believe these corporate subscriptions are
less important than sales to the public and only tend to confuse the entire
drive. The two should, in my opinion be entirely separate. Local f i m s
could l:e solicited in a drive but the large national f i m s can best be
contacted at their hone office and this process roquires no drive of the
kind just conpleted. A drive should be what the public thinks it is and
vfhat we tried to nake here. *»e said nothing about the benks and I was
frankly embarrassed when it finally had to cone to light that we had
deceived the public about the #100 per capita, ^he public wants to know
what it is expected to do and will do it every time it is asked. I feel,
therefore, that vre should treat the public honestly and tell ther. what we
want fron them. We were guilty in the Second War Loan of deceit first by
including issues not applicable to the general public and secondly by
making the total appear larger by including banks, insurance coripanies and
other gigantic purchasers who buy regularly because they have no place else
to go with their noney. I felt repeatedly that we were flagrantly guilty
of intellectual dishonesty. If banks and others are not doing their duty
there arc neans of reaching them. tfut the general public and especially
the snail purchaser deserves better treatment than we gave hin with this sort
of hocus-pocus.
This is a rather fr^nk and lenthy statement but I assume that it is
what you want. I can say in all honesty that our entire organization is
very happy once a>;ain to be working under your personal direction.

David Yim Secies, Oregon t*ar Bond Administrator

June U , 1943.
Mr. David Eccles, State Administrator,
Treasury Department War Savings Staff,
330 American Bank Building,
Portland, Oregon.
This will acknowledge your letter of June 3, addressed to Chairman
Eccles, who is presently in Ogden and will not return here until June 21,
I note your comment that newspaper accounts respecting the recent
reorganization of the War Finance Committee interpreted the change as a
victory for Mr. Eccles. The only part of the Tr-asury announcement which
could be properly so interpreted is that relating to the segregation of
bank from non-bank financing. As to the balance of the reorganisation, there
i« more to it than is on the surface, and it may be that some time in the
future you will have a chance to discuss it in person with the Chairman* In
any event, the job remains one of reaching the greatest possible amount of
funds in the hands of the various classes of people, corporations and nonbanking institutions which have them.
I was interested to read your "Report On Second War Loan,* enclosed
with your letter, which reflects a thoughtful analysis of the recent campaign.
In one respect it does not agree with the Chairman's approach, since you believe that the drive should not be placed under the direction of the Federal
Reserve Bank. You state that in the recent drive "this created a great deal
of confusion and it was apparent to us that th« Federal Reserve had neither
the personnel nor the experience to condiict a drive of this character. In
many instances we would have been better off had we had no direction from thi«
source whatsoever."
Of course, experience has differed in different parts of the country.
From the information we have, in most sections the leadership of the Federal
Reserve Bank Presidents (the Banks as such did not come into the picture) was
most efficient, and their able leadership was acknowledged on all sides, even
by the State War Bond Administrator*. Very evidently you considered the
Twelfth District leadership inefficient.
Upon his return, I shall bring your letter and its enclosure to the
Chairman1 s attention, and it may be that he will wish to add to or amplify some
of the observations made above.
Sincerely yours,