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THE SECRETARY OF THE TREASURY WASH INGTON April 22, 1942 Dear Marriner: I am sending you herewith a copy of a very interesting letter which I have received from Sir Frederick Phillips on how they are financing the war in England through the volunteer system. Sincerely yours, Honorable Marriner S. Eccles, Chairman, Federal Reserve Board, Washingt on, D•C• PERSONAL The Yvillard Hotel Washington, D.C. April 18, 1942 Dear Mr. Secretary, I passed on to the Chancellor of the Exchequer your enquiry about special campaigns for raising funds in the United Kingdom, and he has now asked me to give you the following message. The Y f r Ships Y/eek campaign was organized by <a the National Savings Committee and its Scottish and Ulster counterparts. These central committees are responsible under the Treasury for the conduct of the Y*ar Savings Campaign and operate through a network of approximately 1470 voluntary local committees covering the whole of Great Britain and Northern Ireland. Veil over 95% of these committees organized a local week during the period of the campaign. The series is not quite finished, but to date it has raised $26 million pounds. The similar War Weapons Week series in 1940-1941 raised 460 million pounds. The appeal is confined solely to subscribers to Viar Loans as the Treasury has avoided making any official appeal for gifts to the Exchequer on the ground that this form of patriotism should be left to individual initiative. The series has, however, stimulated a considerable number of gifts and loans free of interest. The fundamental idea of the Week was to link an appeal for subscriptions to V/ar Loans Kith the Royal Navy by "adoption" of H;M. ships by the communities holding the week. Each community chose as a target for its week the cost of ouilding a particular class of vessel and a vessel of this class was then allocated to it by name. The week was marked by service and civil defence pageantry centering round this name and special centers for sale of securites were set up throughout the district. If the target figure was reached (as it was in practically every case) the community then "adopted" its warship and a suitable exchange of courtesies and trophies was arranged to mark the occasion. As regards large and institutional investors it may be that some money which would normally only be made availabe to the Government on short ter:: loan through the banks (a type of loan which did not count in the Warship V*eek total) has been diverted to dated loans and has to this extent eased our problem of post war finance, but such diversions should not be exaggerated. The main effect of the week has been to impress upon the general public most forcibly the enormous cost The Honourable Henry Morgenthau, Jr. Secretary of the Treasury Washington, D.C. - 2of the war and the consequent necessity for the reduction of civilian consumption to • v absolute minimum and for lending the resulting savings to tne State. The results of the War Weapons Week series show that we can hope for a further general increase in the level of personal savings. One further result of the Veek has been to strengthen the machinery of voluntary local Savings Committees, to introduce nev, blood into them and generally to r.ct as a tonic to the War Savings Campaign, Yours sincerely, c C C I May 6, Dear Henry: Thank you for your note of April 22 enclosing the interesting letter fro» Sir Frederiok Phillips. Considering the scope and weight of the British income tax coupled with oonpulsory savings, it is reaarkable that so fine a response has been obtained tr&m this supplemental appeal to the public. Sincerely yours. Honorable Henry Morgenthau, Jr., Secretary of the treasury, Washington, D* C, T:b