Volume 392, April 26 – April 29, 1941

DIARY Book 392 April 26 - 29, 1941 - A - Book Page Agriculture Superimposing of one plan upon another at tremendous cost discussed by HMJr at 9:30 mesting - 4/28/41 392 62 a) HMJr tells Haas to watch; does not want Administration's agricultural program a failure American Viscose Corporation See War Conditions: Purchasing Mission - B - - Brown and Williamson Tobacco Corporation See War Conditions: Purchasing Mission Bulgaria See War Conditions Business Conditions Haas memorandum on situation for week ending April 26, 1941 163 - C - Canada See War Conditions China See Mar Conditions Coast Guard Vessel in POTOMAC class to be transferred to Havy as escort vessel for POTOMAC; CUYAHOGA to be returned to Coast Guard - 4/29/41.. 255 - D - - Denmark See War Conditions: Greenland -1 - Edwards, B. M. See Financing, Government: Defense Savings Bonds Export Control See War Conditions - I - Book Page Financing, Government Defense Savings Bonds: Edwards (B. N.) to confer with HMJr on future ways of helping program - 4/26/41 392 6 (See also Book 393, page 73) # O'Mahoney (Senator, Wyoming) asks to be consulted when sales organisation in Wyoming is set up - 4/28/41 207 Ludwig, Emil: Associates himself with sales to foreign-language groups - 4/29/41 231 Food See War Conditions: United Kingdom - G - Germany See War Conditions Greece See War Conditions: Bulgaria # # # Foreign Funds Control Greenland See War Conditions - I - Investment Bankers Association of America See War Conditions: Canada - I - Keaseby and Mattison See War Conditions: Purchasing Mission - L - Linen Thread Company See War Conditions: Purchasing Mission Liquor Houghteling report - 4/29/41 270 Ludwig, Rail See Financing, Government: Defense Savings Bonds - 0 - O'Mahoney, Joseph C. (Senator, Wyoming) See Financing, Government: Defense Savings Bonds - P - Book Page Peacock, Sir Edward See War Conditions: Purchasing Mission Price Control See War Conditions - R - - Revenue Revision Surtaxes' effect on those having tax-exempt securities - HMJr asks Sullivan to discuss with him - 4/28/41 392 190 - 8 - Shipping See War Conditions - T - - Taxation See Revenue Revision - U - - Unemployment Relief Work Projects Administration report for week ending April 16, 1941 - 4/28/41 177 United Kingdom See War Conditions: Military Planning; United Kingdom - V - War Conditions Airplanes: B-17 goes to 33,000 ft. and still has climb left; no similar performance ever made by British bomber - General Arnold's report from London - 4/26/41 5 Combat equipment - report showing comparative condition fit for use against modern air force - January 8 and 31, February 28, and March 31 - Lovett, Assistant Secretary of War (Air) report - 4/29/41 266 Curtise P-40 Fighter - performance report from London - 4/29/41 237 Shipments to British, January 11-March 29, by sea; February 1-April 19, by air: Kamarck report - 4/26/41 1 Shipments to United Kingdom and overseas commands - British Air Commission report - 4/28/41 125 - V - (Continued) Book Page Var Conditions (Continued) Bulgaria: Proclemation of state of war between Bulgaria, on the one hand, and Tugoslavia and Greece, on the other - State Department transmits copies - 4/29/41 392 256 Canada: War financing - proposal for floating third var loan sent to HMJr by Connely - President, Investment Bankers Association of America - 4/28/41 126 Budget introduced providing for heavy increases in direct taxation - 4/29/41 262 China: North China financial situation - resume³ of - 4/28/41 201 Exchange market resume' - 4/26/41, etc 40,175,249 Export Control: "Policy Board" proposed by Acheson; HMJr and Gaston oppose - 4/28/41 72 Exports of petroleum products, scrap iron, and scrap steel from United States to Japan, Russia, Spain, and Great Britain, week ending April 26, 1941 - 4/28/41 200 Foreign Funds Control: Greece: Freezing as of April 28, 1941. and State Department's reaction to HMJr's remarks on general freesing discussed by Acheson and HMJr - 4/28/41 181 a) Foley and Kuhn advise against any discussion with State Department - 4/30/41: See Book 393, page 19 b) Executive Order: Book 393, pages 253 and 254 Germany: Economic situation reported in American Embassy, Berlin, memorandum - 4/29/41 254 a) Shortages in petroleum, non-ferrous metals, ores, and rubber Greenland: Agreement between British and Danish relating to defense, etc. - copies transmitted to Hull - 4/26/41 19 Lend-Lease: See also Var Conditions: Purchasing Mission Draft of agreement as discussed in Berle's office to be circulated in Treasury - 4/28/41 es Military Planning: Reports from London transmitted by Halifax - 4/26/41, 4/28/41 41,196 Var Department bulletins: German front-line troops - physical training for - 4/28/41 211 Trends (tactical and technical) - Great Britain and Germany, February 16-March 15, 1941 - 4/29/41 310 Economic warfare - report from London - 4/29/41 325 - V - (Continued) Book Page War Conditions (Continued) Price Control: Meeting (April 14, 1941) agenda, minutes, etc. - 4/26/41 393 7 Meeting in Henderson's office - 4/29/41 252 a) Steel order being generally obeyed b) Coal prices discussed c) Farm commodities - support of market price for which increased supply is essential discussed d) Copper situation discussed Department of Justice memorandum formulating policy with regard to its relations with Office of Production Management, Office of Price Administration and Civilian Supply. etc. - 4/29/41: See Book 405, page 220 Purchasing Mission: See also War Conditions: Lend-Lease Peacock, Sir Edward: Reports to HMJr on disposal of direct investments in United States; Linen Thread Company, Keaseby and Mattison, American Viscose Corporation, Brown and Williamson, etc., discussed - 4/29/41 223 Vesting order sales - 4/29/41 251 Security Markets (High-Grade): Current Developments: Hass memorandum - 4/29/41 240 Shipping: Worse situation than with airplanes, Cox tells HMJr; Hopkins just "moving in" - 4/28/41 53 Salter's memorandum on merchant shipping problem and first draft of directive to Admiral Land sent to HMJr by Cox - 4/28/41 109 United Kingdom: Food: Broadcast by Queen/of England or Lady Reading, or by Mrs. FDR, Hull, and Knudsen for food for the undernourished women and children of England - 4/28/41 49 Work Projects Administration See Unemployment Relief - Y - Tugoslavia See War Conditions: Bulgaria 1 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE April 26, 1941 TO Secretary Morgenthau FROM A. M. Kamarck The attached tables were prepared in response to your reque st for a digest of airplane deliveries to the British. Should this information be put on a chart? 2 - 2 - Division of Monetary Research Airplane Shipments to the British (From January 11 to March 29 by sea; February 1 to April 19 by air) Table A - Shipments by Area To the United Kingdom Bombers 77 Reconnaissanoe bombers (Lockheeds) 90 Naval patrol bombers (All Consolidated PBY) 30 Pursuit o Total to United Kingdom 197 To the Middle East Bombers (All Martin 167) 91 Reconnaissance bombers 0 Naval patrol bombers o Pursuit (All Curtise P-40) 225 Total to Middle East 316 To the Far East Bombers 0 Reconnaissance bombers 0 Naval patrol bombers (All Consolidated PBY) 3 Pursuit (All Brewster F2 A-1) 82 Total to Far East 85 Totals Bombers 168 Reconnaissance bombers 90 Naval patrol bombers 33 Pursuit 307 Grand total 598 - 3 - Division of Monetary Research Table B - Total Shipments by Types Boeing B-17 3 Brewster Buffalo (F2 A-11 82 Consolidated Catalina (PBY) 33 Liberator (B-24) 3 Curtiss Tomahawk (P-40) 225 Douglas - Boston I (DB-7) 1 Boston II (DB-7A) 70 Total 71 Glenn Martin Maryland (Martin 167) 91 Lockheed - Hudson I (Model 214-40) 1 Hudson III (Model 414-56) 33 Hudson IV (Model 414-08) 18 Hudson V (Model 414-13) 35 Electra 1 3 Total 90 Grand Total - All Types 598 4 - 4 - Division of Monetary Research Table C - Plane Deliveries to the British by Weeks Reconnais- Naval Week sance Patrol Ended Bombers Bombers Bombers Pursuit Total Feb. 8 + 17 5 3 - 25 Feb. 15 * 33 9 - 100 142 Feb. 22 * 30 5 - 27 62 Mar. 1* 5 2 5 25 37 Mar. 8 # 13 3 3 10 29 Mar. 15 # 15 12 4 - 31 Mar. 22 # 5 12 2 22 41 Mar. 29 . 12 13 3 18 46 Apr. 5 # 15 6 7 73 101 Apr. 12 + 14 9 2 27 52 Apr. 19 4 9 14 4 5 32 168 90 33 307 598 4b The date given is that for shipments by air. Shipments by water start three weeks earlier. That is, the statement reporting the shipment of planes by air for the week ending March 29 would report the shipment of planes by water for the week ending March 8. 5 April 26, 1941 Major Smith telephoned that the following is the radiogram received from London, from General Arnold: "Our superchargers received a big boost throughout all air organizations when B-17 went to 33,000 feet with full load and still had climb left. No such performance has ever been made by a British bomber." Major Smith added that they have no report of a service trip over Germany, but have sent a cable to see if there has been a combat flight under service con- ditions and to ask for a full report. N.M.Chauncey THE SOUTH GAROLINA NATIONAL BANK CENTRAL OFFICE COLUMBIA,S.C. VEHICLES B.M. EDWARDS April 26, 1941 PRESIDENT Honorable Henry Morganthau, Jr., Secretary of the Treasury, Washington, D. C. Dear Mr. Morganthau: When I went to Washington some six or seven weeks ago, you asked me to devote about five days per week until May 1, to help out in the program for the sale of defense securities and to contact the banks in this and other matters. I presume that Mr. Bell and Mr. Graves have kept you somewhat informed as to the work that I have been doing. At the request of Mr. Graves, I came here on Thursday to assist in setting up the organization in South Carolina, and I also made a talk to a bankers' group in Columbia on Thursday afternoon. I am leaving today for Concord, N. C., where I will make & talk to a group of North Carolina bankers, and from there I will go on to Hot Springs, Va. to attend the annual meeting of the Executive Council of the American Bankers Association; they have insisted that I should stay there until Tuesday night, but anyway I expect to be in Washington on Wednesday and Thursday of next week. Sometime during the day Wednesday or Thursday, I should like very much to have a short talk with you as to what I can do further in your program. I am of the opinion that we have the banking end of the program in fairly good condition. With my sincere regards and best wishes, I am Very truly yours, B. M. Edwards. BME:mtb 7 4090 MEMORANDUM April 26, 1941 To: PRICE ADMINISTRATION COMMITTEE From: David Ginsburg, Secretary Heroto annexed are the following documents: 1. Minutes of the meeting of April 14, 1941. 2. Agenda and minutes of the meeting of April 22. 3. Article on the concontration of industry from the London Economist, March 8, 1941. 4. Letter of April 21 to the farm machinery com- panies. Copies of the agonda for the meoting Tuesday, April 29, will be sont to you on the procoding Monday. 8 4044 CONFIDENTIAL Regraded Uclass SUMMARY OF STENOGRAPHIC TRANSCHIPT OF MEETING OF PRICE ADMINISTRATION COMMITTEE April 14, 1941 11:00 a,m, Chairman: Mr. Henderson Present: Secretary Morgenthau, Secretary Jones, Secretary Vickard, Messrs. Knudsen, Hillman, Ayres, Rider, White, Goodloe, Clayton, Ginsburg 1, Organization Mr. Henderson pointed out that the committee was created by the Executive Order (of April 11, 1941) setting up the Office of Price Administration and Civilian Supply, and that it reestablished in B. general way the Price Fixing Committee of the Var Industries Board, which vas found very useful in the last emergency. He in- dicated that the Chairman of the Securities and Exchange Commission would also be appointed a member of the committee. Mr. Henderson requested the head of each department or agency represented on the committee to name an alternate who would serve full time as nearly as possible, but at lesst half time. The alternates are to work closely with OPACS so that their principals may be kept informed concerning proposed actions of the Administrator, In addition, he indicated the desirability of continuing to tap the technical assistance available in the various agencies for special studies from time to time. Mr. Henderson stated that though he must accept responsi- bility for the decisions of the Office, he would not wish to take a step which might cut across the functions assigned to other agencies or make an important decision without the knowledge available to him through members of the committee, or without fully informing the members of the committee. He therefore proposed to advise the COD- mittee of all proposed actions of any importance unless there were some compelling reason to the contrary. Be indicated that at least 80 far as these preliminary matters were concerned, he was not ask- ing for the assent or approval of any nember of the committee, but he did wish to avail himself at least of their tentative views, So far as the future vas concerned, he proposed to advise the committee beforehand of matters to be considered at committee meetings, and on such matters opinions might be solicited, Until such time, how- ever, Mr. Henderson felt that it would be unfair to request any nem- ber of the committee to express a final opinion, 9 4044 -2- 2. Iron and Steel Pointing out that the U. S. Steel Corporation had esti- mated that the proposed 10-cent per hour increase in wages, to- gether with the estimated increases in the cost of goods and ser- vices which they buy in the open market, and assuming about B 5 percent increase in the tax rate, would reduce their return on invested capital to about 5½ percent (instead of about 75 percent in 1940). Mr. Henderson proposed that a ceiling be established in- mediately on steel prices as they existed before the wage increase vas granted, with a statement that when second quarter reports were available, prices would be reconsidered, Mr. Henderson stated that his staff had made a reexamina- tion of U. S. Steel estimates and had come to the conclusion that the contemplated increases in wages and other costs would in all likelihood still give the Corporation about a 7 percent return on invested capital, The estimates include a dollar increase in wages for coal, The discrepancy between the U. S, Steel's estimate of 5/8 percent and OPACS's estimate of 7 percent return is partially ex- plained because the Corporation's estimate was based on operations at 94 percent of capacity, whereas present operations are practically at 100. Mr. Henderson pointed out that if, on its own estimates, U. S. Steel's return for 1941 were to be 5% percent, the smaller non- integrated companies would have a atill smaller return. The problem of the marginal operator, ne well as the whole problem of price, therefore should be reexamined shortly after the close of the second quarter; individual cases of extreme hardship would be considered immediately. Mr. Henderson stressed the importance of forestalling any idea that wage increases could be negotiated and automatically trans- lated into increased prices. Since Mr. Olds of U. S. Steel felt that when the news of the wage increase was released, some statement should be made concerning prices, Mr. Henderson stated that in his view it was desirable to set a ceiling immediately. After stating the facts at some length and after some pre- liminary discussion, Mr. Henderson requested the views of each member of the committee. No dissent was expressed although Mr, Knudsen in- dicated that, if possible, it might be desirable to take final action now rather than to postpone the evil day. 3. Coal Mr. Henderson then set forth his proposal to lift the maxi- mus prices which were set on coal as of March 28 just as soon as there is a settlement with the northern operators, which have about 50 percent of capacity. Secretaries Wickard, Morgenthau and Jones felt that they were not sufficiently informed to express an opinion. No dissent vas voiced, however. 10 4044 - 3 - 4. Automobilos Mr. Henderson called attention to the generally recog- nized necessity for eventually curtailing automobile production because of the use of necessary materials, etc. Among the pro- posals already advanced were (1) increasing the price of automo- biles as a means of curbing sales and (2) the shortening of terms by the finance companies which would narrow the field of potential purchasers. Mr. Henderson stated that unless the consumer credit approach. were a very elaborate scheme reaching every one who loans money it would not work and further that it is not the idoal con- trol method. No proposal was made concerning automobile prices. However, Mr. Henderson said that an understanding with the Automo- bile Manufacturers Association that models would not be changed slightly as a basis for price changes would probably suffice to avoid indirect increases without announcements of actual price dollar increases. Secrotary Morgenthau added that the problem of control over consumer credit raisos the whole question of pools of capital, the Treasury position, and the financing program of the Treasury and thorefore should be thoroughly discussed before action is takon. - Tho meeting adjourned with the undorstanding that the committee is to moot woekly on Tuesday at 11 a.m. Either the principal or the alternate may attend. Mr. Honderson appointed Mr. David Ginsburg AS secretary to the committee. 11 4090 April 22, 1941 AGENDA PRICE ADMINISTRATION COMMITTEE Meeting No. 2 2000 Massachusotts Avenue - 1. Stonographic transcripts will be taken at each moeting and tho transcripts sunmarized so as to constituto ninutes of each moeting. Copios will be sont to each momber of the committee and to his alternate. The ninutes of the first meeting will be circulated this wook. 2. Reaction to issuance of Stool Price Schedule. 3. Problems arising under coal froozing order. 4. Automobilos. 5. Lottor to manufacturers of farn machinory. 6. Proposed action with refernce to textilos. 7. Necessity for inport of zinc concentratos. 12 4090 CONFICENTIAL SUMMARY OF STENOGRAPHIC TRANSCRIPT OF MEETING OF PRICE ADMINISTRATION COMMITTEE April 22, 1941 11:00 a.m. Chairman: Mr. Henderson Present: Messrae March, Ryder, Richer, Pike, 0'Connell, Exckiel, Clayton, Lubin, Plumme., Ginsburg 1. Reaction to issuance of steel price schedule Mr. Henderson reported that, although U. S. Steel did not accept the prospective steel order with any pleasure, Mr. Olda had made technical suggestions regarding the form of the schedule; that the industry generally had accepted the schedule; and that in Mr. Henderson's judgment it would be obeyed. Some small operators have already indicated a desire to be consulted when adjustments are to be made. 2. Coal freezing order Mr. Henderson reported that, pending the translation of additional wage costs into the official minimum prices set by the Bituminous Coal Division, OPACS had pormitted operators in Northern Michigan and in some parts of Illinois, who had reopened under retro- active wage agreements, to soll newly minod coal at the maximum prices with side agreements in the nature of an escalator clause providing for additional payments not to exceed increased costs when the strike was finally settled. Retail prices have bean effec- tively maintained, with the assistance of State and local councils. 3. Automobiles Following the discussion of the automobile problem at the committee's meeting on April 14, Mr. Knudsen's conference with tho industry resulted in an announcement that production would be cur- tailed 20 percont. The companies are submitting briefs to Mr. Knudson concerning the probable effect of the reduction. Mr. Hon- derson announced that ho expects to have his staff uso these briefs for whatever help they may be in preparing for a conference on automobile prices, Messrs. Esokiel And Lubin ratiod a quostion whether the proposed reduction in automobile production would release additional facilities and labor, as well as raw materials, or whether this would moroly mean that the automobile concerns would be operating on A shorter week without rolensing any additional facilities or labor for defense production. This matter WRS gonorally discussed and Mr. Hondorson indicated that BO far no ho wha awaro the procise mennor in which the reduction would bo effected had not yot boon dotormined. 13 4090 2 Ho called attention to P.B. article on the concentration of industry in the London Economist, March 8, 1941 (copy attached), concerning the difficulty in England of getting concentration of orders in tho most officient plants, working full time, and utiliz- ing facilities thus roleased for other purposes, and to the simi- larity of our experience. 4. Farm machinery Mr. Henderson reported that, since International Harvester last wook granted & wage incroaso end a price incroase WAB throatened, a letter had beon sent on April 21 to tho farm machinery companies asking them not to raise their pricos (copy attnched). 5. Zinc concontrates Mr. Henderson read a letter which he proposed to send to the Federal Loan Administrator stressing the need for an additional supply of zinc concentrates. He proposed to recommend that zine concentrates be declared a strategic and critical material so that the Metals Reserve Company might be empowered to build up 8. stock pile. No objection was voiced to sending the letter, although Mr. Clayton indicated problems night arise regarding the availability of an adequate supply of bottoms. 6. Textiles Mr. Henderson called attention to increasing evidence of speculation in textiles and a. growing shortage in view of increased demands. He indicated that, if the textile situation could not be kept in bounds by other means, a price schedule would be established. Various methods of control were discussed-establishing priorities, use of the Australian wool stock pile in case prices go above a certain lovel-but no decision was reached. The meeting adjourned at 12:45 p.m. to meet Tuesday, April 29. THE ECONOMIST Vol. CXL MARCH 8, 1941 Na 5089 CONTENTS LEADING ARTICLES THE WORLD OVERSEAS COMPANY NOTES Concentration of Industry MOT Unrest in the Netherlands 807 200 Currency War in China son Courtaulds' Preliminary 014 sulvation by Shipe Visity's African Colonies Anti-Infiation Policy in Jugoslavis 306 Electricity Supply 314 ano DOE German Europe 300 The Barker Group 814 Wine and Children Two Off Reports 015 Volted Sending Report BID NOTES OF THE WEEK THE BUSINESS WORLD THE STOCK EXCRANGES RID The Hod of Bulgaria aos LEADING ARTICLE CAPITAL Issues are While Home Burne aon The Stock Exchange la War GROSTER COMMENTS ato 816 Tock Labour aos Stiort Sight an Clyde 904 FINANCE AND BANKING The Fast African Front BOS Back to Abundance INDUSTRY AND TRADE an Settement in China 204 The Dollar Cost of War an Cottom Industry's Problems BIR Land Tw 204 Revent Treasury BILL Applications BIX Him to Shipping Costs 017 Protecting Members' Meals nos Chlorse Exchange Presentions ats Income from Shipping Services BIT aos Dearer Mail Transfers Dir Smith A New Salvage Campaign BIT Placetom Africa nos 018 Documentary Filma for the Report The Safety of the Union Repotriating South African Capital 012 Trade BIT War Claims Delay aue India's Sterling Reserves 310 Milk Production Costa AIT Musches for the Mum 300 Retall Sales in January ain INVESTMENT NOTES TM Price War 300 COMMODITY AND INDUSTRY Name aia Logaltics son Retionalisation by Decree nin Selection Recession ats The Statistical Mack-Out ano Cautious Reinvestment COMPANY MEETINGS A10 are Sharter Notes 000 Broker and Client 914 CURRENT STATISTICS ⑉ Concentration of Industry T HE announcement made on Tuesday by the Presi- The object is defined as being to concentrate pro- dent of the Board of Trade promises to be the duction in B reduced number of factories working beginning, not before its time, of a real advance in full-time. These factories should be able to produce the mobilisation for war of all the economic and in- the output required for Government orders, the dustrial resources of the country. Ever since the greatest practicable export trade and the minimum beginning of the war a growing list of industries needs of OUR population, while at the same time pre- manufacturing for the domestic consumer have been serving the goodwill of the factories closed down." progressively restricted in their scale of operations. The Government will facilitate this concentration The necessity for such a restriction may have arisen by granting to groups of undertakings which fulál from a variety of causes shortage of imported raw the necessary conditions special help to safeguard materials has been one of the most pervasive. But their requirements of labour and of raw materials," whatever may have been the original occasion, the but they cannot contemplate the use of public purpose that restriction of consumption goods indus- funds to provide compensation." This can be made to serve in a war economy is to The method of achieving concentration is, in the release for fighting and for munition-making the first place, to be by negotiations between the Board largest possible volume of resources of man-power, of Trade and M representatives of employers and materials. factory space and industrial plant. If this workers in the industries concerned to assist in is the purpose, then it is obviously better served if this task the existing Export Council is to be enlarged the vestigial output left to an industry is concentrated and re-named the Industrial and Export Council : its n. the smallest possible number of factories than if a executive members, who have had experience of imple proportionate cut is imposed on every pro- negotiating with industries for the formation of duree. If every firm in reduced to a quota of, say, Export Groups, will 00 doubt bear the brunt of the as OF 25%, then every factory is still partly cm- work. There was, however, a sting in the tail of ployed, every flem has to have at least its minimum This declaration of adherence to the voluntary prin- reserve stock of materials, every machine is retained ciple the Government accept ultimate responsi- 111 partial use and the greater part of the labour bility for seeing that the necessary measure of con- part-time. force remains sttached to the industry though on centration is achieved; and, where firms are either unwilling or unable to meet the situation by their The necessity for IL measure of induced-and, if own efforts, the Government will be prepared in the necessary, campelled-conentration of production in last resort to impose the reorganisation which circum- restricted industries is no novelty to readers of The Economist. It has now been recognised by the stances require.' The absorption into the was effort of the resources of man-power net free will, of course, Government. Mr. Lyttelton's proposale refer mainly- remain the responsibility of the Ministry of Labour. at this stage entirely-to the group of industries sub- The conversion of plant and buildings should be jeet to the Limitation of Supplies Orders and to the facilitated by the concentration in the hands of the rationing of raw materials. These industries-hosiery. Board of Trade of responsibility for co-ordinating bottery, the major textile industries, boots and shoes, and some others as the President said, " the the requirements of all Government Departments for factory and storage accommodation. As for the re- main sources of factory-trained labour for munitions. storation of the status quo after the war, a recont Regraded Uclassified 298 THE ECONOMIST March 8, 1941 of factories closed down and labour transferred will tion from being put forward. It would be Com much to be kept and the Departments concerned will take expect that the effects of the previous limitation and all measures open to them to assist their speedy the new concentration will always be riguity distin- responing." guished. Where similar ideas have been put into prace For this NOT policy in general there cannot be any- tice or have reached the stage of detailed diseasion thing but unqualitied, if somewhat impatient, welcome. as, for example, in enal and cutton 11 has usually 11 should have been made elear from the inception of been formal necessary to include . donceur for those the policy of limiting supplies that concentration of who are to be temporarily excluded, and the Board of production was e necessary corollary. The hour is now Trade may well find that countenameing arrangements su late that the task must be accomplished very of the surt may be the price it has to pay for speedy quickly the weapon of compulsion cannot be kept in agreement, II so, e warning must be entered from the reserve for very long. The President of the Board of outset. The financing of compensation to the excluded Trade and the members of his Industrial and Export out of the proceeds of a levy le be added to the price Council must steel their hearts to treat delay on the charged to the consumer is an expedient that is in- same footing as recalcitrance. Industries must be told defensible in principle and pernicious in practice. It is that time is of the essence of their contraction. a capricious and arbitrary form of regressive Laxation. It is unquestionably appropriate that industries Where extra money has to be found for the payment should be given an opportunity of making their own of compensation and it cannot be taken out of the arrangements for concentration before any question of profits of those who remain in business, it should come compulsion arises. But the community has a concern from the Exchequer. To insist on this principle will, not merely with the fact of concentration but also with incidentally, ensure that compensation in paid only the methods by which it is brought about. Circum- where there is gendine necessity for it. stances should nut be allowed to force the weaker firms Another set of questions arises out of the effect in an industry to accept concentration on the terms of that the new policy, and its post-war corollaries, will the strunger. Even apart from these questions of equity have on the future organization of industry. The within the industry, there are points of general prine war has already very powerfully reinforced the pre- eiple that arise. For example, in the majority of cases viously existing tendency towards the combine- " would be better for the community if concentration tion of industries. For negotiating with the Govern- took the form of a temporary pool of financial interests, ment about output quotas or ruw material alloca- IIF even a holding company, rather than that the tions, for forming export groups, and now for des majority of firms should, for the duration, lose not vising concentration schemes all these purposes merely their physical participation in the trade but industries have been encouraged and compelled to doir financial interest as well. It la to be hoped that regard themselves more and more as centrally the negotiators will be provided with a code of prin- directed and co-ordinated units. The Trode Associa- ciples to be followed wherever possible. This is not 6. tion is already the governing body of the industry matter that can be pursued quite haphazard. and now it bids fair to be the producing organism Coupled with this general welcome, however, there as well. All this was in greater or less degree in- will naturally be questionings on a number of the evitable in time of wer, and it would be churlish details and the implications of such a drastic policy. for anyone who has advocated the mobilisation of A whole series of problems revolves round the question industry lo covil at it. But for pracetime purposes of compensation. There is very considerable risk of real the wholesale pooling. co-ordination and cartelication OF induced confusion on this issue and it is important of industry have severe and obvious disadvantages. hi get the various elements of the problem clear. 11 is The mechabism that has been built up in wartime obvious that an industry which has had its output com- for restricting production might be used in peace pulsorily reduced to, say, 25 per cent. of its pracetime time for the same purpose. though in a very different output has suffered severe financial damage, and it context. The latest development in the Government's might well claim that since the necessity for the restric- industrial policy makes it more than ever imperative tim arises out of the community's actiums and cannot that the distinction between the requirements of (n any way be blamed upon the restricted industry. it peace and war should be clearly drown, that the -hould receive public assistance in the same way as growth of monopoly and cartelisation should be very the worlded, the widows and the orphans of the war, carefully watched. and that the Government and the But this financial damage, and the resultant claim for public between them should devote a gival deal of compensation, emerge from the restriction of output, thought. before It is too late, lo the problem of post- which is already in force, The new policy announced war (mlustrial organization. by Mr Lyttelton this week does not restrict output any This necessity in enhanced rather than diminished further E il merely concentrates the existing restricted by the Imme of the Government's proposals for A: mitput. There is no reason. in the typical case, for storing the status que. There is to in 0 register of supposing that the amount of profit accruing to the displaced firms and the Government are to take all undustry 65 a while will be smaller when production is measures open to them to assist in the responsing ementrated than when it is scattered. On the con- of these firms. These assurances are only reasonable, trury. in the majority of cases it will be larger. There Hut what may they be taken to mean after the war? By therefore, in general. no very strong case for com- May it not be enotended that newermers in on In- protection orising out of the policy of concentration, dustry must be kept at bay until every last rese of though there may he a case arising out of the previous the firms that existed in the industry in 1030 has Instation. What is necessary, of course. is to are that been restored to production and even to profitable the profit made out of the concentrated output shall production The industries will certainly maintain la equitably distributed among the different consti- such # claim and will try In enforce it by every tuent streets of the industry. Industries will have all device open to their Trade Associations : they will apportunity of making their own arrongements for certainly invoke the assistance of the law, and unless this, hut in the typical case the nucleus factory (or public opinion is much colightened on the issues factories) charn to remain in production will, in effect. at stake than it has shown itself to be in recout the Dailing not for its own account but as agents for years, the post-war Thould of Trade will The whole industry. Technical difficulties and commer- nothing more natural Than to establish a de into cial complications (of which the existence of trands monopoly for the pro-war firms in there industries and trade morks are not the least) will necessitate just as tight as the de Incio which many Vortations from this theme in different industrics, but other industries have already survested in estate the primiple is elear enough. Factories that are elosed lishing. The Vista of restriction, of monupady profite viewo can expect to receive a share in the profits of of the discurragement of enterporac and the Three that day open # they should hot ordinarily of inefliciers time opened age 14 frightening 15 the to Ferrive compensation. extreme, " may for true that them 1. nothing that This will not, however, present claims for competies- can The done about " now unders it is invistence upits Regraded Uclassified 16 March 8, 1941 THE ECONOMIST 299 a rigid time-limit for the exercise of these special or postponement of plans that are already sufficiently post-war favours. But extreme care will be needed mild and tardy. On the contrary, the next need is immediately the war is over to ensure that those who to extend a policy which is now proposed for a rela- have had the honour of being mobilised for the com- tively small group of productive industries to the long munity's service do not exercise over the economic list of other non-essential trades. As in every other life of this country & dominance as restrictive and department of the Government's mobilisation plans, damaging as that exerted over the political life of the large service trades are still ignored. Distribution, other democracies by the " veterans of their wars. for example, is much the largest reservoir of labour None of these questionings, however, should detract which, though it may not be " factory-trained," could from the merits of a very substantial advance in the nevertheless quickly be put to munitions work. The technique of industrial mobilisation. They should not, next task for the Board of Trade is to devise a plan for example, be held to justify any watering-down for the concentration of retail trade. 17 CFFICE FOR MERGENCY MANAGEMENT Office of Price Administration and Civilian Supply For Agen release PM 301 Tuesday, April 22, 1941 Manufacturers of farm implements were requested yesterday not to increase farm machinery prices at this time, in P. letter sent out by Leon Henderson. Administrator, Office of Price Administration and Civilian Supply. Voluntary cooperation was asked in the hope "that other steps may be avoided." The letter is being sent to several hundred manufacturers of farm machinery. Mr. Henderson pointed out that in announcing the steel price schedule of last week he had stressed "the wide range of finished products into which steel enters as a raw material and the importance of maintaining stable prices in these finished products.' Among the products Mr. Henderson had in mind at that time were farm machinery and equipment because of their importance as a factor in the cost of farm production and their relation to prices of domestic supplies of food and fiber. The letter read in part: "Recently wage increases have been announced in certain parts of the industry. Moreover, I am aware that certain other cost elements have ad- vanced. But with assured prices of the major raw material and a favorable demand in the industry generally, I foel justified in requesting that there be no increase in farm machinery prices at this time. I also request that there be no alteration in your cash discounts, trade discounts, volume dis- counts, carry allowances, methods of quoting prices, credit practices or other trade or price policies which would have the effect of increasing net manufacturer's prices of individual items. Where prices of equipment have not yet been quoted for this year, I request that you adhore to the price schedules which were last in effect. I am asking your voluntary cooperation in the hope, which I am sure we both share, that other steps say be avoided in this industry." Regraded Uclassified 18 -2- PM 301 Text of letter to farm equipment manufacturers follows: Gentlemen: As you know this Office has recently taken steps to maintain steel prices at the levels which prevailed during the first quarter of this year. In announcing the Steel Price Schedule, I drew attention to the wide range of finished products into which steel enters as a raw material and the importance of maintaining stable prices in these finished products. One of the products which I had especially in mind was farm machinery and equipment. The prices of these products are an important factor in the cost of farm production. As such they are related to the prices of our entire domestic supplies of food and fiber. Should labor supplies become scarce in certain agricultural areas as a result of the defense program farm machinery will become even more important in the farm economy. Recently wage increases have been announced in certain parts of the industry. Moreover, I Am aware that certain other cost elements have ad- vanced. But with assured prices of the major raw material and a favorable demand in the industry generally, I feel justified in requesting that there be no increase in farm machinery prices at this time. I also request that there be no alteration in your cash discounts, trade discounts, volume dis- counts, carry allowances, methods of quoting prices, credit practices or other trade or price policies which would have the effect of increasing net manufacturer's prices of individual items. Where prices of equipment have not yet been quoted for this year, I request that you adhere to the price schedules which were last in effect. I am asking your voluntary cooperation in the hope, which I em sure we both share, that other steps may be avoided in this industry. If carrying out this request imposes undue hardships on your company in some particular, I will entertain a plea for its modification, and at any time I will be glad to meet with representatives of your industry to discuss questions raised by this request. Yours very truly, Leon Henderson Administrator Regraded Uclassified 18 -2- PM 301 Text of letter to farm equipment manufacturers follows: Gentlemen: As you know this Office has recently taken steps to maintain steel prices at the levels which prevailed during the first quarter of this year. In announcing the Steel Price Schedule, I drew attention to the wide range of finished products into which steel enters as a rav material and the importance of maintaining stable prices in these finished products. One of the products which I had especially in mind was farm machinery and equipment. The prices of these products are an important factor in the cost of farm production. An such they are related to the prices of our entire domestic supplies of food and fiber. Should labor supplies become scarce in certain agricultural areas as a result of the defense program farm machinery will become even more important in the farm economy. Recently wage increases have been announced in certain parts of the industry. Moreover, I Am aware that certain other cost elements have ad- vanced. But with assured prices of the major raw material and a favorable demand in the industry generally, I feel justified in requesting that there be no increase in farm machinery prices at this time. I also request that there be no alteration in your cash discounts, trade discounts, volume dis- counts, carry allowances, methods of quoting prices, credit practices or other trade or price policies which would have the effect of increasing net manufacturer's prices of individual items. Where prices of equipment have not yet been quoted for this year, I request that you adhere to the price schedules which were last in effect. I am asking your voluntary cooperation in the hope, which I am sure we both share, that other steps may be avoided in this industry. If carrying out this request imposes undue hardships on your company in some particular, I will entertain a plea for its modification, and at any time I will be glad to meet with representatives of your industry to discuss questions raised by this request. Yours very truly, Leon Henderson Administrator 19 April 26, 1941. the Monorable the Secretary of State. Sir: for the Secretary receipt is askamledged with thanks of your letter of April 25, 1941, enclosing to photostatic copies of (1) a note dated April 7, 1941 addressed by you to the Minister of Demark, the Nonorable Benerik 40 relating to the defense of Greenland, (2) the Mainter's reply thereto dated April 9, 1941, end (9) the Baglish and Dunish tests of the Agreement Relating to the Befores of Greenland, signal by the Maister of Dennerk and you on April % 1941. Very truly yours, (Signed) Herbert E. Gaston of I Assistant Secretary of the Treasury. - too Has 5. Cháras I 1 Miya - OFFICIAL COMMUNICA Title TO THE SECRETARY or STATE WASHINGTON, e. E. DEPARTMENT OF STATE WASHINGTON n reply refer to April 85. 1941 u My dear Mr. Secretary: I enclose for the information of the United States Coast Guard two photostatic copies of (1) a note dated April 7, 1941 addressed by me to the Minister of Denmark, the Honorable Henrik de Kauffmann, relating to the defense of Greenland, (2) the Minister's reply thereto dated April 9, 1941, and (3) the English and Danish texts of the Agreement Relating to the Defense of Greenland signed by the Minister of Denmark and me on April 9, 1941. Sincerely yours, Enclosures: Condue Jfull As noted above. The Honorable Henry Morgenthau, Jr., Secretary of the Treasury. Regraded Uclassified 21 ROYAL DANISH LEGATION WASHINGTON,D.C. April 9, 1941. Sir: I have received your note of the seventh instant concerning the defense of Greenland together with a draft of a proposed agreement regarding the same subject. It is with appreciation that I note your renewed assurance that, although the present circumstances prevent r36 the Government in Denmark for the time being from exercising its powers in respect of Greenland, your Government fully 9 oly recognizes the Sovereignty of the Kingdom of Denmark over in the island. At the same time I wish to convey to you my feelings of gratitude for the expression of friendly concern of your Government and its earnest hope for the complete and speedy liberation of Denmark. I share your view that the proposed agreement, arrived at after an open and friendly exchange of views, is, under the singularly unusual circumstances, the best measure to assure both Greenland's present safety and the The Honorable Cordell Hull, Secretary of State, DEPARTMENT OF STATE, Washington D.C. 859B. 7962/54 Regraded A Uclassified 22 future of the island under Danish Sovereignty. Furthermore, I am of the opinion that the terms of the agreement protect, as far as possible, the interests of the native population of Greenland whose welfare tre- ditionally has been the paramount aim of Denmark's policy in Greenland. I, therefore, shall accept and sign the agreement as proposed, acting on behalf of His Majesty, the King of Denmark, in His capacity of Sovereign over Greenland, whose authorities in Greenland have concurred herein. I avail myself of this opportunity to renew to you, Mr. Secretary of State, the assurances of my highest consideration. (2 carbon copies) Regraded Uclassified 23 Aptil 96 SINE sin I have the hmar to refer to - informal - tiems which you have had with officers of the Department of State during which the consern of the Government of the United States was expressed one the effect of recent military developments, particularly affecting Greenland, upon the mintenance of the pease and security of the United States and the rest of the American Continent. 8598.7962/53 C You are also aware of the interest of the devers- ment of the United States in maintaining unimpaired the safety of Greenland and the severeigaty of Demark ever that island. My Government has continuensly had in mind the desire expressed by the United Greenland Councils at their meeting at Gedhava as May 3, 1040 that PS/WA The Namerable Hearik de Kauffrun, Minister of Demark. 204 23 Agril " SINE Birt I have the honor to refer to the informal tiems which you have had with officers of the Department of State during which the ecusern of the Covernment of the United States was expressed over the effect of recent military developments, particularly affecting Greenland, upon the mintenance of the peace and security of the United States and the rest of the American Continent. 8598.7962/53 C You are also aware of the interest of the Gevera- ment of the United States in maintaining unimpaired the safety of Greenland and the severeignty of Demmark ever that island. My Government has continuensly had in mind the desire expressed by the United Greenland Councils at their meeting at Gedhava an May 3, 1940 that PS/WA The Henerable Henrik de Kauffmann, Maister of Demark. 204 24 that the - of the United States of America would embime to hald is mind the expend position of the Dunish flag in Greenland at of the mative Greenland and Demish pepulation of the island. My Government has talen note of the musual sites- tien in which Greenland now finds itself. The Kingdom of Demark is at present under compation by a foreign army. The Government of the United States has condemned that invasion as a violation of Denish severeign rights, and has repeatedly expressed its friendly concern and its net earnest hope for the complete and speedy libera- tien of Demark. Although the Government of the United States fully recognises the severeignty of the Kingdom of Demark over Greenland, it is unhappily clear that the Government in Demark is not in a position to exer- eise severeign power over Greenland no long as the present military occupation continues. Greenland is within the area embrased by the Nouroe 204 Regraded Uclassified 25 + Restrine and m the Act of Havena, with visits you are familier, and its defense against attack by a - American power is plainly essembial to the presention of the pease and security of the American continent, and of the traditional policies of this Gerermunt respect= ing the Testern Hemisphare. propred I E 1 * for the adoquate defense of Groenland consistent with the obligations of the Waited States under the Act of Navora signed - Day 20, 1940. In doing DO 10 is enimated by sentiments of the completest friendliness for Demark, and believes that by taking these stops 10 is sufagurding the overtual re-estchlishment of the nermal relationship between Greenland and the Kingdom of Domark, I have the honor to emolose & draft of the proposed agreement relating to the defense of Greenland, which I believe ambodies the ideas agreed upon in the course of my variews conversations. Accopt 204 204 Regraded Uclassified 26 + Accept, sir, the removed asswanses of my highest consideration. Cordell Bul) 1 Enclosure: Draft of Agreement. : the 4 and Its OR marret c A-B:AAB:AA no JDH 204 AGREEMENT RELATING TO THE DEFENSE OF GREENLAND OVERENSKOMST OM GRONLANDS FORSVAR 2 WHEREAS: EFTERSOM: ONE. After the invasion ET. Efter at fremmede mili- and occupation of Denmark on tere Styrker var trangt ind 1 OE April 9, 1940 by foreign havde besat Danmark den 9' April military forces, the United 1940, vedtog de samlede grøn- Greenland Councils at their landske Landsraad paa deres Møde meeting at Godhavn on May 3, ved Godhavn den 3' Maj 1940 paa 1940 adopted in the name of det grønlandske Folks Vegne en the people of Greenland a Resolution, højtidelig gentagende resolution reiterating their deres Troskabsløfte til Kong oath of allegiance to King Christian X af Danmark, og udtal- Christian X of Denmark and te det Haab, at de Amerikanske expressing the hope that, for Forenede Staters Regering, saa- as long as Greenland remains længe Grønland er afskaaret fra out off from the mother ooun- Moderlandet, vedvarende vil try, the Government of the erindre den udsatte Stilling, United States of America will hvori det danske Flag 1 Gronland, continue to hold in mind the den grønlandske og den danske exposed position of the Befolkning 1 Gronland og den dér Danish flag in Greenland, of herskende Retsorden befinder sig; the native Greenland and Danish population, and of established public order; and TWO. The Governments of TO. Alle amerikanske all of the American Republics Republikers Regeringer har er- have agreed that the status klæret sig enige 1, at de, AGREEMENT RELATING TO THE OVERENSKOMST OM DEFENSE OF GREENLAND GRONLANDS FORSVAR WHEREAS: EFTERSOM: ONE. After the invasion ET. Efter at fremmede mil1- and occupation of Denmark on twre Styrker var trængt ind 1 og April 9, 1940 by foreign havde besat Danmark den 9' April military forces, the United 1940, vedtog de samlede grøn- Greenland Councils at their landske Landsraad paa deres Møde meeting at Godhavn on May 3, ved Godhavn den 3' Maj 1940 paa 1940 adopted in the name of det grønlandske Folks Vegne en the people of Greenland a Resolution, højtidelig gentagende resolution reiterating their deres Troskabsløfte til Kong oath of allegiance to King Christian X af Danmark, og udtal- Christian X of Denmark and te det Haab, at de Amerikanske expressing the hope that, for Forenede Staters Regering, saa- as long as Greenland remains længe Grenland er afskaaret fra out off from the mother coun- Moderlandet, vedvarende vil try, the Government of the erindre den udsatte Stilling, United States of America will hvori det danske Flag 1 Gronland, continue to hold in mind the den grønlandske og den danske exposed position of the Befolkning 1 Gronland og den dér Danish flag in Greenland, of herskende Retsorden befinder sig; the native Greenland and Danish population, and of established public order; and TWO. The Governments of TO. Alle amerikanske all of the American Republics Republikers Regeringer har er- have agreed that the status klæret sig enige 1, at de, 28 of regions in the Western europmiske Magter tilhørende, 1 Hemisphere belonging to Euro- den vestlige Hemisfære belig- pean powers is a subject of gende Omraaders Status er et deep conoern to the American Spørgsmaal af alvorlig Betyd- Nations, and that the course ning for de amerikanske Natio- of military events in Europe ner, og at Udviklingen af de and the changes resulting militere Begivenheder 1 Europa from them say create the 06 deraf følgende Forandringer grave danger that European vil kunne medføre den alvorlige territorial possessione in Fare, at de europmiske territo- America may be converted into riale Besiddelser 1 Amerika strategic centers of aggres- forvandles til strategiske sion against nations of the Udgangspunkter for Angreb 1mod American Continent; and det amerikanske Kontinents Nationer; THREE. Defense of TRE. Grønlands Forsvar Greenland against attack by imod Angreb fra Ikke-ameri- a non-American power is 08- kanske Magters Side er af af- sential to the preservation gørende Vigtighed for Bevarel- of the peace and security sen af det amerikanske Konti- of the American Continent nents Fred og Sikkerhed og er and is a subject of vital et Anliggende af vital Betyd- concern to the United States ning saavel for Amerikas For- of America and also to the enede Stater som for Konge- Kingdom of Denmark; and riget Danmark; FOUR. Although the FIRE. Uanset at Danmarks sovereignty of Denmark over Suvermnitet over Gronland er Greenland is fully recog- fuldtud anerkendt, forhindrer de nized, the present nuværende Forhold for Tiden 29 RE a result of the present eufopmiske Krig er Fare for, at European war there is danger Grønland kan forvandles til et that Greenland may be converted Udgangspunkt for Angreb imod det into a point of aggression amerikanske Kontinents Nationer, against nations of the American og under Hensyntagen til de For- Continent, the Government of pligtelser, som paahviler de the United States of America, Amerikanske Forenede Staters Re- having in mind its obligations gering ifølge "The Act of Habana", under the Act of Habana signed underskrevet 30' Juli 1940, paa- on July 30, 1940, accepts the tager de Amerikanske Forenede responsibility of assisting Staters Regering sig Ansvaret for Greenland in the maintenance at yde Gronland Bistand til Opret- of its present status. holdelse af dets nuværende Status. ARTICLE II ARTIKEL II It is agreed that the Der er opnaset Enighed om, Government of the United at Amerikas Forenede Staters Rege- States of America shall have ring skal have Ret til at anlægge, the right to construct, main- opretholde og operere saadanne tain and operate such landing Landingspladser, Anlæg for Hydro- fields, seaplane facilities planer, Radiostationer og metereo- and radio and meteorological logiske Installationer, som maatte installations as say be neces- vere nødvendige for Opnaaelse af sary for the accomplishment of de 1 Artikel I angivne Formaal. the purposes set forth in Article I. ARTICLE III ARTIKEL III The grants of the rights De 1 Artikel II indrommede specified in Article II shall Rettigheder skal ogsaa omfatte Regraded Uclassified 30 circumstances for the time Regeringen 1 Danmark 1 at udøve being prevent the Government sin Myndighed; in Denmark from exercising its powers in respect of Greenland. THEREFORE, HVORFOR: The undersigned, to wit: De undertegnede, nemlig Cordell Hull, Secretary of Cordell Hull, de Amerikanske State of the United States of Forenede Staters Statssekreter, America, acting on behalf of handlende paa de Amerikanske the Government of the United Forenede Staters Regerings States of America, and Vegne, og Henrik Kauffmann, Hans Henrik de Kauffmann, Envoy Majestat Kongen af Danmarks Extraordinary and Minister overordentlige Gesandt og befuld- Plenipotentiary of His Majesty megtigede Minister 1 Washington, the King of Denmark at Wash- handlende paa Hans Majestet ington, acting on behalf of Kongen af Danmarks Vegne 1 Dennes His Majesty the King of Egenskab af Suveran over Grenland, Denmark in His capacity as og med Indforstaaelse af Dennes sovereign of Greenland, whose Myndigheder 1 Granland, er blevet authorities in Greenland have enige om følgende: concurred herein, have agreed AB follows: ARTICLE I ARTIKEL I The Government of the De Amerikanske Forenede United States of America reit- Staters Regering bekrafter paany, crates its recognition of and at den anerkender og respekterer respect for the sovereignty of Kongeriget Danmarks Suvermnitet the Kingdom of Denmark over over Gronland. I Erkendelse af, Oreenland. Recognizing that at der som Følge af den nuverende Regraded Uclassified 30 circumstances for the time Regeringen 1 Danmark 1 at udove being prevent the Government sin Myndighed; in Denmark from exercising its powers in respect of Greenland. THEREFORE, HVORFOR: The undersigned, to wit: De undertegnede, nemlig Cordell Hull, Secretary of Cordell Hull, de Amerikanske State of the United States of Forenede Staters Statssekretar, America, acting on behalf of handlende paa de Amerikanske the Government of the United Forenede Staters Regerings States of America, and Vegne, og Henrik Kauffmann, Hans Henrik de Kauffmann, Envoy Majestat Kongen af Danmarks Extraordinary and Minister overordentlige Gesandt og befuld- Plenipotentiary of His Majesty megtigede Minister i Washington, the King of Denmark at Wash- handlende paa Hans Majestat ington, acting on behalf of Kongen af Danmarks Vegne 1 Dennes His Majesty the King of Egenskab af Suveren over Grenland, Denmark in His capacity as og med Indforstaaelse af Dennes sovereign of Greenland, whose Myndigheder 1 Granland, er blevet authorities in Greenland have enige om følgende: concurred herein, have agreed 88 follows: ARTICLE I ARTIKEL I The Government of the De Amerikanske Forenede United States of America reit- Staters Regering bekrafter paany, erates its recognition of and at den anerkender og respekterer respect for the sovereignty of Kongeriget Danmarks Suveranitet the Kingdom of Denmark over over Granland. I Erkendelse af, Greenland. Recognizing that at der som Følge af den nuverende Regraded Uclassified 3 / also include the right to im- Ret til at forbedre og uddybe prove and deepen harbors and Havne og Ankerpladser og Anlab anchorages and the approaches dertil, til at installere Naviga- thereto, to install aids to tions-Hjalpemidler for Sejlads og navigation by air and by water, Luftfart og til at bygge Veje, and to construct roads, com- Kommunikationsanleg, Befmstninger, munication services, fortifi- Værksteder og Depoter, Boliger for cations, repair and storage Personnel, og 1 al Almindelighed facilities, and housing for Ret til at traffe en hvilkensom- personnel, and generally, the helst Foranstaltning, som er nød- right to do any and all things vendig til Sikring af en effektiv necessary to insure the effi- Drift, Opretholdelse og Beskyt- cient operation, maintenance telse af saadanne Forsvarsanlmg, and protection of such defense som maatte blive etablerede. facilities as may be estab- lished. ARTICLE IV ARTIKEL IV The landing fields, sea- De Landingspladser, Anlmg plane, harbor and other defense for Hydroplaner, Havne- og andre facilities that may be con- Forsvarsanlæg, som de Amerikanske structed and operated by the Forenede Staters Regering mastte Government of the United States anlægge og operere 1 Henhold til of America under Articles II and Artiklerne II og III, vil, for III will be made available to Formaal, der staar 1 Forbindelse the airplanes and vessels of all med det fælles Forsvar af den the American Nations for pur- vestlige Hemisfære, blive stillet poses connected with the common t11 Disposition for alle aneri- defense of the Western Hemi- kanske Nationers Flyvemaskiner sphere. og Skibe. ARTICLE V ARTICLL 7 I: 18 agreed that the Der er options Government of the United States at de Amerikanske Forenede Sta- of America shall have the right ters Regering, for det Tidsrum to lease for such period of nerverende Overenskomst maatte time as this Agreement may be være 1 Kraft, skal have Ret t11 in force such areas of land and at leje saadanne Land- og So- water as may be necessary for Omraader, son maatte vare nød- the construction, operation and vendige for Anlag, Drift og Be- protection of the defense facil- skyttelse af de 1 Artiklerne II ities specified in Articles II og III opregnede Forsvarsanleg. and III. In locating the afore- Ved Valget af de ovennavnte said defense areas, the fullest Forsvarsomraaders Beliggenhed consideration consistent with skal der tages det videst mulige military necessity shall be Hensyn, forenelig med militar given to the welfare, health Nødvendighed, til Grønlands ind- and economic needs of the na- fødte Befolknings Velfard, Sund- tive population of Greenland. hed og økonomiske Erhvervsinter- It 1s agreed, however, that esser. Man er imidlertid blevet since the paramount ebjective enige om, at eftersom det til- sought 16 the early attainment strabte Hovedformaal er den snar- of an adequate defense estab- lige Tilvejebringelse af fyldest- lishment in Greenland, the gørende Forsvarsanlæg i Gronland, utilization of any area deemed skal Benyttelsen af et hvilket- by the Government of the United somhelst Omraade, som de Ameri- States of America to be needed kanske Forenede Staters Regering for this purpose shall not be maatte anse for n dvendigt til delayed pending the reaching of dette Formaal, 1kke udsettes, an agreement upon the precise indtil man er blevet enige on Regraded Uclassified 38 terms of a formal lease. A de- Lejemaalets nøjagtige Betingelser. scription of such areas, by En Beskrivelse af de paagældende metes and bounds, and a state- Omraaders nøjagtige Afgransning ment of the purpose for which og en Erklering OR det Formaal, they are needed shall in each for hvilket de er nødvendige, case be communicated to the skal, saa snart som gørligt, i Danish authorities in Greenland hvert enkelt Tilfmlde meddeles as soon as practicable, and the de danske Myndigheder 1 Granland, negotiation of a formal lease og Forhandlinger om et formelt shall be undertaken within & Lejemaal skal finde Sted inden reasonable period of time rimelig Tid derefter. thereafter. ARTICLE VI ARTIKEL VI The Kingdom of Denmark Kongeriget Danmark bevarer retains sovereignty over the Suvermniteten over de 1 de fore- defense areas mentioned in the gaaende Artikler nevnte Forsvars- preceding articles. So long as omraader. Saalange denne Over- this Agreement shall'remain in enskomst forbliver 1 Kraft, skal force, the Government of the de Amerikanske Forenede Staters United States of America shall Regering have udelukkende Juris- have exclusive jurisdiction over diktion over et hvilketsomhelst any such defense area in Green- saadant Forsvarsomraade 1 Granland land and over military and og over de Amerikanske Forenede civilian personnel of the United Staters militære 08 civile Per- States, and their families, as sonnel og deres Familier, saavel- well as over all other persons som over alle andre Personer within such areas except Denish indenfor saadanne Omraader, und- citizens and native Greenlanders, tagen danske Statsborgere og ind- it being understood, however, fedte Granlendere, idet det dog or that the Government of the underforstaset, at de Amerikanske 34 United States may turn over to Forenede Staters Regering kan the Danieh authorities in Green- overlevere en hvilkensomhelst land for trial and punishment Person, som begaar en Forseelse any person committing an offense indenfor et Forsvarsomraade, til within a defense area, if the de danske Myndigheder 1 Gronland Government of the United States til Paadømmelse og Afstraffelse, shall decide not to exercise saafremt de Amerikanske Forenede jurisdiction in such case. The Staters Regering beslutter sig Danish authorities in Greenland til 1kke at udove Jurisdiktion will take adequate measures to 1 det paagældende Tilfælde. De insure the prosecution and pun- danske Myndigheder 1 Gronland vil ishment in case of conviction træffe passende Forholdsregler of all Danish citizens, native til at sikre Retsforfølgning, og Greenlanders, and other persons Afstraffelse 1 Tilfælde af Dom- who say be turned over to them fældelse, af alle danske Stats- by the authorities of the United borgere, indfødte Granlændere og States, for offenses committed andre Personer, som maatte blive within the said defense areas. overleveret til dem af de Ameri- kanske Forenede Staters Myndig- heder for Forseelser, begaaet in- denfor de navnte Forsvarsomraader. ARTICLE VII ARTIKEL VII It is agreed that the Gor- Der er opnaaet Enighed om, ernment of the United States of at de Amerikanske Forenede Staters America shall have the right to Regering, til udelukkende Anven- establish and maintain postal delse for de Amerikanske Forenede facilities and commissary stores Staters militære og civile Per- to be used solely by military sonnel og deres Familier, som op- and civilian personnel of the holder sig 1 Gronland 1 Forbindel- 35- United States, and their fam- se med de grønlandske Forsvarsan- ilies, maintained in Greenland leg, skel have Ret til at oprette in connection with the Greenland og opretholde Postbessrgelse og defense establishment. If re- Intendantur-Udsalgssteder. Ban- quested by the Danish author- fremt de danske Myndigheder 1 ities in Greenland, arrange- Grenland maatte anmode derom, skal ments will be made to enable der traffes Foranstaltninger til, persons other than those men- at ogsaa andre end de forannevnte tioned to purchase necessary Personer kan købe nødvendige For- supplies at such commissary syninger 1 de Intendantur-Udsalgs- stores as may be established. steder, som maatte blive oprettede. ARTICLE VIII ARTIKEL VIII All materials, supplies Alt Materiel, Forraad 0g and equipment for the construc- Udstyr til Anlag, Benyttelse of tion, use and operation of the Drift af Forsvarsanlaggene 0g til defense establishment and for Amerikas Forenede Staters milits- the personal needs of military re og civile Personnel og deres and civilian personnel of the Familiers personlige Bahev skal United States, and their fam- tillades indført 1 Granlend fri ilies, shall be permitted entry for Told, Akcise eller entre is- into Greenland free of customs gifter, og nevnte Personnel og duties, excise taxes, or other deres Familier skal ligeledes charges, and the said personnel, vare fritaget for enhver Form and their families, shall also for Beskatning, Paaligninger be exempt from all forms of 08 andre Udskrivninger foretaget taxation, assessments or other af de danske Myndigheder 1 Gran- levies by the Danish author- land. ities in Greenland. ARTICLE IX ARTINEL IX 36 The Government of the De Amerikanske Forenede United States of America will Staters Regering vil respektere respect all legitimate inter- alle legitime Interesser 1 Grøn- ests in Greenland as well as land, saavelsom alle Love, Regu- all the laws, regulations and lativer og Sedvaner med liensyn customs pertaining to the na- til den indfødte Befolkning og tive population and the in- til Administrationen 1 Grenland. ternal administration of Green- Under Uddvelsen af Rettigheder, land. In exercising the rights hidrørende fra nærværende Over- derived from this Agreement the enskomst, vil Amerikas Forenede Government of the United States Staters Regering velvilligt will give sympathetic considera- overveje enhver Forestilling, tion to all representations made som de danske Myndigheder 1 by the Danish authorities in Gronland maatte gøre med Hensyn Greenland with respect to the til Gronlands Beboeres Velfard. welfare of the inhabitants of Greenland. ARTICLE X ARTIKEL X This Agreement shall remain Nerverende Overenskomst in force until it is agreed that skal forblive 1 Kraft, indtil the present dangers to the peace der er Enighed om, at de nuveren- and security of the American de Farer for det amerikenske Continent have passed. At that Kontinents Fred og Sikkerhed er time the modification or termina- ophort. Til den Tid vil Over- tion of the Agreement will be the enskomstens Andring eller Opher subject of consultation between blive Genstand for Konfcrence the Government of the United mellem de Amerikanske Forenede States of America and the Staters Regering 08 Danmarks 37 Government of Denmark. After Regering. Enhver af Parterne due consultation has taken place, skal have Ret til, efter at each party shall have the right passende Konference har fundet to give the other party notice of Sted, at tilkendegive den anden its intention to terminate the Part sin Hensigt om at bringe Agreement, and it is hereby Overenskomsten til Ophør, og agreed, that at the expiration det er herved aftalt, at den of twelve months after such no- skal ophere at vare 1 Kraft ved tice shall have been received by Udløbet af 12 Maaneder efter, either party from the other this at den paageldende Tilkendegi- Agreement shall cease to be in velse er blevet modtaget af en force. af Parterne fra den anden. Signed at Washington in du- Underskrevet 1 Washington plicate, in the English and 1 to Eksemplarer 1 det engelske Danish languages, both texts og danske Sprog, saaledes at having equal force, this ninth begge Tekster har samme Gyldig- day of April, nineteen hundred hed, den niende Dag af April, and forty-one. Nitten Hundrede og En og Fyrre. Consultuel Secretary of State of the United States of America Kuris heri ffinam Envoy Extraordinary and Minister Plenipotentiary of His Majesty the King of Denmark at Washington Regraded Uclassified 38 C 0 P T PARAPHRASE OF TELEGRAM RECEIVED FROM: American Embassy, (Paris) Viehy. DATE: April 26, 1941, 4 p.m. NO. : 491. THIS TELEGRAM IS FROM MATTHEWS FOR THE TREASURY. The German officials have since the 24th of the month been making an investigation of the foreign secu- rities and the French issues which contain an exchange guarantee clause held by the Guaranty Trust branch at Paris for customers' account. Incidentallyw most of the foreign securities of the bank no longer remain in the occupied territory. In accordance with instruc- tions which the Germans gave the banks in the occupied territory, lists of such holdings had already been given to the Germans. It would seen, however, that the Germans wish to "verify" the exactness of such statisties. It is the understanding of the Guaranty Trust branch here that other banks at Paris are being paid similar visits. However, no request for the delivery of such securities has been made by the German authorities. LEAHI 10 EA:MSG Copy:bj 39 P THE SECRETARY OF THE NAVY WASHINGTON April 26, 1941 My dear Henry: Thank you for your note of April 23rd, enclosing the material on Estimates of Canada's Available Surplus Capacity for the Production of Munitions and Other Supplies. I am glad to have this data and will study it carefully. Yours sincerely, 18/ Frank Knox Hon. Henry Morgenthau, Jr., The Secretary of the Treasury. 40 TREASURY DEPARTMENT Micry INTER-OFFICE COMMUNICATION DATE April 26, 1941 TO Secretary Morgenthau FROM Mr. Cochran CONFIDENTIAL Registered sterling transactions of the reporting banks were as follows: Sold to commercial concerns £14,000 Purchased from commercial concerns & 2,000 Open market sterling was quoted at 4.03. and there were no reported trans- actions. In New York, closing quotations for the foreign currencies listed below were as follows: Canadian dollar 11-3/4% discount Swiss franc .2321 Swedish krona .2384 Reichsmark .4005 Lira .0505 Argentine peso (free) .2355 Brazilian milrois (free) .0505 Mexican peso .2066 Cuban peso 4% discount In Shanghai, the yuan was unchanged at 5-3/164. A cable advice received from Shanghai this morning indicated that the market in that center had learned of the signing of the United States-Chinese stabilization agreement. Sterling in Shanghai vas also unchanged at 3.90-1/2. There were no gold transactions consummated by us today. No new gold engagements were reported. N.M.P. 41 BRITISH EMBASSY, WASHINGTON, D.C. PERSONAL AND SECRET April 26th, 1941 Dear Mr. Secretary, I enclose herein for your personal and secret information 8 copy of the latest report received from London on the military situa- tion. Believe me, Dear Mr. Secretary, Very sincerely yours, The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 42 TELEGRAM RECEIVED FROM LONDON PATED APRIL Mr. 1941 NAVAL. PLYMOUTH, Devemport reided by 80 sireraft third successive night, Purther damage in dockyard no navel casualties. H.M.S. Lewse out of action few weeks. : two trawlers attacked by sircraft off East Coast on 22nd, one slightly damaged, Greyhound slightly damaged; two Nerchant ships sunk at Mezes Tobruk during frequent sir attacks between 18th and 22nd. s. Result of bowberdment of Tripoli Plat; two Merchant ships sunk fear est a fire extensive damage to harbour facilities and military objectives. We suffered no casualties. On the 21st ⑉ J.1007 was shot down. One Dornier 26 forced to land - the water badly demaged. on 22nd Pulmare met 3 Juniers 86, 1 shot down, 1 probably creshed, 1 damaged, s Between 19th and $2nd enemy reided Malta three successive nights. Bone damage to deckyards travier and lighter. By day 4 enemy aircraft were shot down and $ probably. 8. At Pireous enemy aircraft sank Greek destroy- or Hydra and damaged Pears and hospital ship. off Lineelought hospital ship Hesperes was mak and off Magare another hospital ship was damged, s Three enemy air attacks 60 But Coast ecoveys a the MM VOID unsuccessful. % MIAL AIR FORCE Daylight stud. inclectrie power station In enemy compled territory me and memorous attacks 8a enemy shipping off the Dateh Coan's carried est by Regraded Uclassified 43 " - will benhere. s Right of 65 benbere meat to attack enemy battle cruisers at Prest. All returned safely. : send. 15 Purricance intercepted 60 enemy beabers with 84 fighters ever Tobruk and destroyed 1 beyber and 3 fighters. 200 GERMAN AIR FORCE. Night of 23rd/24th, or about 110 enemy aircraft operating approximately 88 attacked Plymouth too a house before midnight. 11. Deckysrd Maits was again benked by 40 easay circraft might of 22nd/23rd. Damage to sevel property elights RESTRICTED 44 resephrase of Code Received at the the Department April x, 1941 changling, filed April 25 and 26. Price of rise shot up past 48 hours and little for sale at from 40 to 60 leeal dollars higher for with of x permis than prices last week. sales in Changes confined to Mark - and rice higher than have. Poor unp partially responsible. Good rain wight to some extent ready situation. Informed foreign circles believe condition due largely to holding of stoole by Land- $ 18 details your I I 1 I 1 Lorda force release of visa in storage and Lower prices to prevent loan- ing national your of resistance and prevent ansouragement to defentist elements, particularly in view of the situation in Europs. situation still will in hand though - minor risting has taken place. Practically no rise 8 market up to instade 26th. BARRETT Distribution Describery of - State Department Secretary of Treasury Under Secretary of M Assistemb Chief of staff, 0-2 Mar Plans Division office of nevel Intelligence RESTRICTED Regraded Uclassified RESTRICTED 45 I you I I I 1 3 at 7011, April 26, iss. Media, filed April 26. I s 1 I I I s 1 ties, has asked Jayman shipping lines to help in consulting German Nationals from the Philippine Islands, and this request has been passed on to Manila office of Kolmani Kisen Kadaha. I Distribution Secretary of - State Department I y I Importer r a Assistant chief of staff, 0-2 Mar Plans Division office of Neval Intelligence RESTRICTED Regraded Uclassified 46 SECRET authority A. C. of 8, 0-2 Paraphrase of Code Cablegram Date 28 apr Chak Received at the Mr Department Initials at 07:39, April x, 1941 Cairo, Filed April 24, 1941. 1. Axis ships continue to unload at Bengasi and Tripoli. 2. German planes are making use of bases in Sicily, Bulgaria and Northern Greece and bringing heavy concentrations to bear on British troops and lines of sea communication. It is the opinion of this office that the evacuation of troops will be impossible. 3. German air forces in Libya similarly consentrate their attacks on Tobruk and commissions by sea. Tobruk is isolated. 4. Claminartin planes are operating efficiently 16 hours a day in the desart area on both scouting and boarding missions with a normal altitude of 10,000 to 18,000 feet. 5. One fighter and one bombardment squadron, much under strength, have arrived in Caire from Greece. 6. Twenty-sight ships in convey have arrived bearing 25,000 treeps, 50 infantry tanks with tank landing lighters and other material and supplies. The facilities for debarkation are inadequate. Severty-five ships are new lined up awaiting their turn. Frequantly 5 days are necessary for valoading togo from transports. Secretary of SECRET Treasury FELLERS. Distributions Secretary of Mr State Department Assistant Chief of Staff, 0-2 Your Plans Division Office of Naval Intelligence Under Secretary of Mr Air Corps CONFIDENTIAL 47 Pursphrase of Code Cablegram Received at the War Department at 08:44, April 27, 1941 London, filed April 27, 1941. 1. British Air Activity over the Continent. 4. Daylight, April 26. Only ner misses were reported in enstimed attacks en Axis shipping off the Norwagism coast and the Notherlands. Fighter patrols completed four missions OVER Occupied France. b. Night of April 25-26. Heavy forces of British bombers attacked Kiel. Smaller attacks took place over Berlin, Rotterdam, Reden and Premerhaven. No reports of damage have been received. The Coastal Command attacked Ijexiden and Arest. Three missions were performed by fighter patrols over Occupied France. 2. German Air Activity over Britain. & Night of April 26-27. Operations on a moderate seale took place over Idverpool Bay, Partemouth-Selsey area and Lineelnshire-Nast Anglis area. Do Daylight, April 26. There ware mall raids over Kent. 3. German Lesses ever Britain. Daylight, April 26. One German plane was shot down in the prosess of British fighter controls over Compled France. 4. British Air Activity, Middle East Theater. Daylight, April 26. Motor transport mer Bardin, an airfield at Durna and the tom of Bengari were attacked w British air forces based in Kgyt. CONFIDENTIAL Regraded Uclassified CONFIDENTIAL 48 5. German Air Activity, & Libya. Daylight, April 26. Sollum and Marcis Maturah vere targets of German boulding. be Malta. Daylight, April 26. Valleia and Lugua harbers a the Island of Malta were very severely bombed by maders of perschute nines. The raids vere consentrated en harbors and airfields. 6. A large mumber of Axis motor vehicles as well as a field battery was destroyed by the British in the Tobrak and Sollm areas. Axis air operations, however, are on the increase and six British armored vehicles have been damaged. 7. Up to 11:00, April 27, the War Office had received for reports as to the situation in Greece due to the breakfown of communi- cations. It has now been reported, however, that German motorcycle and light tank units entered Athens early this morning. Large forees of parachate troops landed in the visinity of the Carinth Canal the morning of April 26. British troops continue to withdraw toward evacuation parts under intense serial bombardment ementanted an roads, troops and shipping. The exast situation as regards British forces this morning is not mom. 5 Distributions Secretary of Mar State Department Secretary of Treasury Under Secretary of Yer Assistant Chief of Staff, 0-2 la Plans Division Office of Neval Intelligence Mr Corps Assistent Chief of Staff, 0-3 CONFIDENTIAL Regraded Uclassified CONFIDENTIAL Persphrase of Code Cablegram Received at the Wer Department at 11:30, April 27, 1941 London, filed April 27, 1941. In reference to your inquiry of April 26 in regards to B-17 beaters, you are advised that se embat missions have born given these planes up to the present, X Distribution: Secretary of War State Department Secretary of freasury Under Secretary of The Assistant Chief of Staff, G-2 War Plans Division Office of Naval Intelligence Air Gerps Ansistant Chief of Staff, 0-3 CONFIDENTIAL 50 April 28, 1941 9:30 a.m. GROUP MEETING Present: Mr. Schwarz Mr. Sullivan Mr. Thompson Mr. Graves Mr. Foley Mr. Cochran Mr. Bell Mr. Gaston Mr. Haas Mrs. Klotz H.M.Jr: I hope everybody had a nice week-end. I did. I didn't call up anybody. I hope this week is easier on all of us, particularly me. Before getting down to the routine, I came to a decision over the week-end; first as a result of my own statement on the saving of the money, and second, on Mrs. Morgenthau visiting the NYA with Betty Lindley of Manassas; and she and I visited the CCC up in the park. Now, I asked the Bureau of the Budget a month or six weeks ago to make a field investigation, and I got nothing, didn't I, Dan? Well, I an going to make my own now, and what I want is that - there are two things that I want. I want to find out in view of the situation, 51 - 2 - NYA, CCC, WPA, Studebaker's Bureau of Education and the United States Employment Service - I mean, what are they doing in the light of the present situation which is wasteful from 8 standpoint of money; and incidentally, could I have for my records when I asked the Director of the Budget to have this done? Bell: Maybe I can get it. H.M.Jr: Yes. And then what should be done in the light of - well, Stacy May says we need six million additional men for this calendar year, and if we are going to be the arsenal of Democracy, we have got to quit sitting around and knitting and gossiping about it and complaining about it and not doing anything about it. I mean, it is just . - the people over at OPM just have no more conception of what the problem is than - my boys have far more idea. With this in mind, I am going to ask Harry White to detach himself for a week or two and go out in the field with a car and take as many people along with him as he can, and give me the kind of a report that I want. I am doing it for a number of reasons, particularly - one of them is that I think it will be wonderful for Harry. Two, I have got confidence in him. I think he ought to get out in the fresh air. And three, nobody can criticize the so-called - - what goes by the misnomer of left wingers in the report. I would like anybody to give him any ideas or cooperation, but the main thing I want - now, for instance, we went out to this camp. There are two camps within a few miles. There are two camps within a few miles. The one where we went had & hundred and fifty-six boys. 52 - 3 - It will house two hundred. One thing Mrs. Morgenthau said, Harry, the thing that NYA fools you, they say they have ten supervisors, but they don't tell you how many are from WPA, how many from Education. There was one supervisor for every ten boys. They had twenty-five or thirty-five supervisors out there at the NYA. In other words, they will say, "Oh yes, NYA furnishes us 80 many supervisors," but they won't tell you how many teachers they have got there for groups, you see. When you add that to the cost per boy, it runs the thing up very, very high. I mean, they make -- Bell: CCC or NYA? H.M.Jr: I am talking of NYA. CCC for a hundred and fifty-six boys had about ten; but NYA averaged one supervisor to each ten boys, which seems terribly high. Bell: That has been the policy right from the beginning. At first they had one overseer to each eight boys. In other words, they put them in sort of military groups, squads of eight. H.M.Jr: But look what they pay these people. Bell: That is right. It costs about eleven hundred per man to run the CCC. That is the reason for it. H.M.Jr: What about NYA? Bell: I don't know what it costs. H.M.Jr: Well, there is something wrong. 53 - 4 - The CCC was a well run place. The boys were nice boys. They are liable to stay two years, which I think is one year too long; and when they are through, they are heavy, they may have put on twelve or fifteen pounds. But certainly, the camps I have visited, they have got nothing to help them - to help this country be the arsenal for Democracy; and if we are six million men short, where are we going to get them from? They are not going to get them out of the CCC or nya. A few out of the NYA, but darned few. Gaston: Was this a camp, NYA? H.M.Jr: This was a CCC camp. Gaston: Does the NYA have camps? H.M.Jr: Yes, resident camps. They are supposed to take care of four hundred out at Manassas. I am going to do this thing openly. I am going to write a letter to these people, in- cluding the Director of the Budget. I am not going to do it - I am going to do it openly, Dan. Then when the reports come in, you and I will study them. But I have got to make good on this million dollar business, and I am going to try to help the President make good on making this an arsenal for Democracy instead of just sitting here twiddling my thumbs. I talked to Oscar Cox last night, and he said that Hopkins has just been getting into the shipping thing, and he says, "If you think the plane thing is bad, wait until I come over and tell you about the shipping thing. The plane thing is wonderful compared to the shipping situation." He says it is the most God awful mess you ever saw. 54 - 5 - We have just got to quit fooling around, you know. This fellow Hitler, he just brings in these men from these conquered countries all over, and he has taken thirty thousand trained airplane mechanics out of Italy, thirty thousand, and put them in the airplane factories of Germany and the airplane factories of Italy are just repair factories. Read the editorial in today's Washington Herald. It is clever and it is devastating, but there is a certain amount of truth in it, and it compares it - Lindbergh to Rhett Butler, who said to the South, "You can't win. You just haven't the strength to win." And he said it ended up with the burning of Atlanta after three hours. And he says the way the situation is today, we are no better than the South was then, by comparison with Germany. He says, now if we are going to do something about it, let's quit shouting and get busy. Schwarz: You will note Lindbergh has resigned from the Air Corps. It is just on the ticker now. H.M.Jr: He did? That is my contribution, and I have sat around for five or six weeks wating for the Bureau of the Budget to do something, and I wanted to get this National Economy League - I couldn't do that because I found that Professor Lutz - George Heas called him a dirty name. I can't repeat what he called him, but I can't have Professor Lutz down here; 80 I am going to have Professor White instead. But Lutz is the man who is doing the work for the National Economy League, and I said last week I wouldn't be bothered. So anybody that has any ideas, give them to me and give them to Harry, and we are going to put him in & 55 - 6 - car, and I think I am going to send him to the State of Michigan and we will see what they are doing out there. But I am going to do it openly. By that, I don't mean in the papers, but openly. Mr. Thompson? Thompson: I have nothing. H.M.Jr: Mr. Bell? Bell: I have the savings bond regulations for you. H.M.Jr: Right. Bell: Twenty-six pages. H.M.Jr: Did you get through my thing? Bell: Testimony? H.M.Jr: Yes. Bell: I did, but it is still around. I didn't get it out Saturday. This is that depositary bond. I don't know if you are going to have lunch with the President or not. H.M.Jr: I don't either. I hope 80. Bell: Shall I bring it in? H.M.Jr: Yes, stay behind at this meeting. Are you ready? Bell: I thought if you were going over it I would stay. If you are not, there is no use in me taking your time. 56 - 7 - H.M.Jr: Righto. What else? Bell: Nothing. H.M.Jr: Harold? Graves: You asked me to bring out this morning the matter of the Treasury issuing tax certificates, security to be bought at 8. discount in con- venient denominations, cumulative by the respective taxpayer, to the installment dates March 15, June 15, September 15, and December 15. I, myself, feel that there is need for that kind of security from two points of view. First, a great many people who might otherwise have invested in savings bonds, I think, are going to withhold investments because of the belief that they have - that they will need their money for taxes. The second reason is that I am afraid a lot of people whose taxes - income taxes are going to be high next year, are not going to antici- pate that, and we may have a practical difficulty in tax collections. I believe we can go some distance toward meeting that second point if we have a con- venient and well publicized security that people can buy for the particular purpose of paying their taxes with it. The Defense Savings Bonds are a bad security for that purpose. They are ten or twelve year bonds, and redemption is a matter of considerable formality and considerable diffi- culty. I believe we ought to give serious consideration to the issuance of that form 5? - 8 - of security. I would say further that that has been dis- cussed a lot around here. Mr. Sullivan mentioned it to me and Mr. Bell's people have studied it, and I think we would be prepared pretty quickly to -- H.M.Jr: Well, Mr. Bell is in charge of that; and if you will take it up and study it with him and let me know, I would appreciate it. Bell: We have done some thinking about it. We can issue 8. certificate of indebtedness, either with a coupon attached or on a discount basis. H.M.Jr: If and when you are ready to bring it up, I will be glad to talk to you about it. Foley: Would that mature at the time the taxes are payable? Bell: We have had it on our list of things to discuss. Foley: Or would you offer it in payment of taxes? Graves: It is my idea that it would mature on the tax dates, March 15. Foley: Yes. I think that is all right. I think if you pay your taxes with it, there might be some question as to its advisability. I mean, if it becomes due on the dates when you pay your taxes and you converted it into 58 - 9 - cash and then you draw your check against the cash to pay your taxes, I think it will be all right; but if you pay your taxes with the certificate, I think there might be some question. Bell: They have done that many times. We have & provision in the law whereby the Secretary can designate -- Foley: I am questioning it as & matter of policy. Bell: We have done that many times, where we have designated that Treasury notes may be turned in for taxes. H.M.Jr: If you will study that, I will talk it over with you later. Foley: Some of the states and municipalities got in trouble on that, whether obligations could be bought under par to be used for paying taxes. Bell: That was the very purpose of it. H.M.Jr: I am not going off half-cocked. I think if you would study it. Bell: I think it is a good thing. I really think that people are not going to save their money and they are going to be surprised when they look at this tax bill in March. H.M.Jr: Incidentally, one of the reasons I sort of got around to having Harry White do this, Mrs. Morgenthau reminded me what I did in Conservation. 59 - 10 - Through Herbert Gaston, we got a friend of his and his wife, who just went around as Mr. and Mrs. Jones and stayed a night at every camp in the Adirondacks. Do you remember? White: My wife can't go. H.M.Jr: Well, I am just bringing that up. Gaston: Well, we will get somebody to go with you, Harry. (Laughter) White: Thanks, Herbert. Foley: He said Mr. and Mrs. Jones. H.M.Jr: You are very naughty. Harry, you and I under- stand each other. Bell: I think there is an inside agreement here. H.M.Jr: Seriously, it is interesting just how these things keep coming back to you. We did do this. Whatever happened to that man? Gaston: He is still up there in the Conservation Department, doing the same thing, inspector of camps. Foley: No future in it, is there? (Laughter) Gaston: I should say Harry is good, though. H.M.Jr: Well, anyway -- 60 - 11 - White: Thanks for the compliment. H.M.Jr: What? Now to get back to foreign funds, gold and so on. Harry? White: The Interamerican Bank is going to be resuscitated and the committee hearings are going to be held either this week or next week. H.M.Jr: And so what? White: Merely keeping you informed as to - I don't know whether they will want anybody from the Treasury to help them. They said they would, but I think Bernstein knows more about it than anybody in Washington. He did most of the work in drafting the legislation on it. H.M.Jr: Have you heard anything about it? Bell: I haven't been in on it at all. H.M.Jr: Don't you want to get in on it? Bell: I can. H.M.Jr: I wish you would. Bell: If I can find time. H.M.Jr: Well -- Bell: But I don't know a thing about it. I will if you want me to. H.M.Jr: I would like you to. Regraded Uclassified 61 - 12 - White: I think on Agriculture if you haven't got some- body doing something, I think it would be help- ful to 800 what kind of a case can be built up to support your position on Agriculture, merely for your own information. H.M.Jr: Well, George. That is up to George. Haas: I looked over your testimony, and I think it goes through all right. H.M.Jr: Yes, but keep working on it. White: Because I think the Senate is going to -- H.M.Jr: Well, George, if you want some friendly help, why not get on the telephone to Bill Myers and ask him to come down and spend a day or two. See? Haas: Yes, sir. H.M.Jr: Ask for Bill Myers to come down. Bell: I was a little worried about your statement that the agricultural income hasn't gone up any more than the benefit payments, and it looked to me as though that line represented about three and a half to four billion dollars, and we have paid out a billion and a half in that year. That statement worried me a little. I don't know whether George corrected it or not or looked it over to see whether it should be corrected. Haas: You started out this way. The Secretary had this chart and had the payment to Agriculture and agricultural income. You start out with the Secretary's statement that there is no correla- tion between these payments and agricultural in- come. If that statement is true, or substantially true, thenwhat followed was all right, and I put the table in the testimony, and there is no corre- 62 - 13 - lation. You can't figure out any correlation at all. But the point is, the Department of Agriculture probably won't argue that there was either. They would say it is short over there, and it is money, and it transfers that income to the agricultural class. At the same time, the statements you made were - can be substantiated, and I put figures in to substanti- ate it. H.M.Jr: I would like to see them again, because the chart was in such a reduced form that it was very hard to follow it, but the fact remains, I was impressed with my own statement that if the agricultural income is six billion dollars or eight billion dollars today and you come to the Treasury and add a billion dollars and as & result the farmers only get nine, with all of the county agents and all of the overhead, it would be much better just to give a straight check out of the Treasury. Now, the thing that I have always said, and I have told this to Wallace, we started back in '33 with one plan. It didn't work. He left that plan, which may have cost two or three hundred millions, and added another one that cost two or three hundred millions. He has got five plans super- imposed. Every timehis plan failed, he added another one until he has got it up to about 8 billion and a quarter. I told him that once. If you - you did that for me once, I think. Haas: That is right, and the Budget Bureau made & long study of the whole thing. H.M.Jr: If you will go into history, I think you will find there are about five or six plans. Every time one has been a failure. Here we are today - I don't know, eight or ten million bales of cotton on our hands. Leon Henderson talked to me about cotton mills making excessive profits. And we have this huge supply of cotton on hand. The Regraded Uclassified 63 - 14 - one thing that I missed in my statement, which I forgot to say, "And, gentlemen, don't forget, under the Lend-Lease, Agriculture is going to get four or five hundred million dollars addi- tional for food." I forgot about it. I don't know of anybody better, because he is critical, but he would do it on a fair basis, if you could get Bill Myers down here. Haas: All right. As I say, they will put up an argu- ment it is justifiable. But that doesn't say your statements are. White: But the senators in the committee, there is no doubt in my mind they are going to ask a lot of specific and pushing questions, and I think that the best kind of a defense that can be made ahead of time will make it & lot easier. H.M.Jr: I agree, and I think, George, you ought to con- centrate on it, and go up against some of these agricultural fellows. What is the answer? Haas: I have lived with it. I know what the answer is. H.M.Jr: I don't want to find myself being in a position that the Administration's Agricultural program has been a failure. Haas: That is what worries me a bit. H.M.Jr: And I think that the thing I have got to say is, "Well, we were working under conditions where the seven seas were free, and now they are not free, and the whole thing should be re-examined. We are also working on a basis of a ninety billion dollar income instead of fifty or sixty." White: And you will remember that one of the big argu- ments Wallace always used about helping Agricul- Regraded Uclassified 64 - 15 - ture out was that the only way that Agriculture will be helped out would be by raising the level of industrial income, because that would increase the demand for industrial products. That was their justification for the support of the WPA program and 8. lot of others, so that that could be a very effective argument to be used now. H.M.Jr: Look up some of Wallace's statements, and I could quote him. Anything else, George? When are you going to have something for me on tanks? Haas: I have just got the material, and I am trying to put it up into -- H.M.Jr: When can I see it? Haas: I think I will have a completed chart tomorrow morning for you. H.M.Jr: Can't I show something if the President has me for lunch? You have got that one chart for me on tanks. Haas: Oh, yes. H.M.Jr: I can ask him if that is what he wants. Haas: All right. The other is going to be a lot better. We have got all the detail you suggested after looking at it, but I can have that. H.M.Jr: Can't you do one in ink? Haas: Well, it is a type of thing that doesn't look very well unless it is completely dressed up. H.M.Jr: Well, you have got from now until ten o'clock. Haas: I know, but -- 65 - 16 - H.M.Jr: Not long enough? Haas: No. I can get this, Mr. Secretary, by one o'clock. I can have that chart that you saw, plus 8. table which will support the chart and with the details, show the date of appropriation, the contract date -- H.M.Jr: Yes. Haas: Yes, sir. And the firms which are the manufac- turers and the type of tanks each firm has. H.M.Jr: Yes, have you got that? Haas: Yes, sir. H.M.Jr: That is all I want, isn't it? Haas: Well, I was trying to get this table to a chart where you could see the whole thing graphically. H.M.Jr: Let me have what you have, because I am going down to the Aberdeen proving grounds tomorrow morning with Mr. McCloy. Haas: All right. I will get it. And I will continue to work on the other. I think you will like it, but I couldn't possibly get it finished. H.M.Jp: Come in at 8. quarter of twelve, will you, George? Haas: Yes, sir. H.M.Jr: And don't forget now, either you or I are going to have to testify on Agriculture before the Senate. One of us does. Cochran: Is that appointment for Sir Edward Peacock still holding for tomorrow afternoon? 66 - 17 - H.M.Jr: Yes, three o'clock. I will be back. He may have to wait & little bit, but I am sure he waited for the Duchess of Windsor, too. (Laughter.) Cochran: Phillips reminded me Friday that he wants to see you as early as he can. H.M.Jr: Well, I have got to do a little home work on that. Shall we give him three o'clock Wednes- day? Cochran: All right, sir. H.M.Jr: I want to sit down with you and Bell and White on that before he comes in, please. Cochran: All right, sir. The Yugoslav Minister here is trying to get the eleven and a quarter million dollars in New York transferred down to Rio. His colleague there isn't cooperating very fully yet. That is all. H.M.Jr: What else? Cochran: Nothing. Sullivan: Do you recall we discussed the request of Chair- man Vinson of the House Naval Affairs for four auditors and four stenographers on defense con- tracts? H.M.Jr: Yes. Sullivan: I sent that letter around to Mr. Foley's shop, and their opinion is we cannot legally do it. H.M.Jr: All right. 67 - 18 - Sullivan: And we will 80 report. H.M.Jr: Are they getting tough in Foley's shop? Sullivan: What do you mean, "getting?" (Laughter.) There was & chap came around from the Canadian Legation Saturday. They were about to put in a new tax proposal up there which will change the rates toward American citizens on dividends and will require 8. change in the Treaty we have with them on taxes; and I asked him if he would sub- mit the Canadian tax proposal, and he has done that very, very hush hush. He says there isn't even a member of the Cabinet up there that knows the proposals that are going in tomorrow. You might like to look at them. H.M.Jr: Well, there is no difference between their Cabinet and ours. Sullivan: That is right. (Laughter.) Bell: These are being presented, are they not, to the legislature tomorrow? Sullivan: Yes, these go to Parliament tomorrow, and it makes our picture look an awful lot better. H.M.Jr: Good. Sullivan: You had a letter from Congressman Sauthoff of New York complaining about my failure to see him on the very thing Harold Graves was talking about. I have had several conversations with him on the phone. I was to have seen him last Monday, but I was testifying instead. I tried 68 - 19 - to get him Saturday, and his office didn't answer my call until this morning. I am going to talk to him today. H.M.Jr: Will you prepare an answer for my signature? Sullivan: Yes, I will, sir. H.M.Jr: I would like to get it off today. Sullivan: I will, but I thought I should see him before you wrote the letter. H.M.Jr: Right. Sullivan: The public hearings are starting at ten, and they wanted me there when they - I don't think I will have to be there all day. H.M.Jr: All right, good luck. Sullivan: May I be excused? H.M.Jr: Yes. Foley: Berle just called about the Greek freeze order. They want to issue it now, and we are already. H.M.Jr: Ask him if he read Kintner and Alsop yesterday. Foley: He also wants a meeting at three o'clock this afternoon of the juniors on the quid pro quo Executive Order before you and Hull get in it. I thought I might call Oscar and take him along to represent Hopkins' point of view on this. H.M.Jr: Good. Foley: I have that letter of Eccles' on the holding company legislation, and I am making a memorandum to you and 8. brief reply. Regraded Uclassified 69 - 20 - H.M.Jr: Good. I sent that all around. Did you ever see a more beautiful job of crawling? Bell: No. H.M.Jr: He ought to have no skin on his belly. (Laughter.) Foley: He didn't leave much skin on Ransom, either. H.M.Jr: That is new. It is original. Foley: The legislation to requisition foreign ships that you asked about is progressing all right. It looks as though they will get some House action by the end of this week. H.M.Jr: Who is handling that? Foley: It is being handled for the Administration by Maritime. H.M.Jr: That is what I understood. Foley: And it has been handled by Bland, who is Chair- man of the Marine and Fisheries Committee in the House. It will go to Bailey's committee in the Senate. H.M.Jr: Yes. Foley: And our bill to negotiate contracts is coming up for a hearing on Thursday, and that is going to -- 70 - 21 - H.M.Jr: This is that thing that I referred to you You might show it to Harry afterward. Foley: I don't know whether you know Isadore Kresel or not. He was the attorney for the Bank of the U.S. H.M.Jr: Yes. Didn't he go to jail? Foley: Yes. He wants to come down and help the Administration. (Laughter) H.M.Jr: Isn't he a little previous? Foley: He says he had 8. lot of experience with German property during the last war and as soon as we take it over, he wants to have something to do with it again. H.M.Jr: Well, you tell him - what do I say, "Thank you, Izzy"? Foley: Why, thanks, and he will be given all the consideration he deserves. H.M.Jr: Is that all? Foley: That is all. Gaston: I have a little note (April 25) here about Sumner Welles and Magruder. I talked to Welles, and Welles talked to the President and the outcome is that Magruder can do whatever he wants to do. As long as he wants to stay at his present job, he can stay, 80 71 - 22 - we are not to do anything about it at all. H.M.Jr: Wonderful. The funny thing about that, that is the only appointment that I can remember that the President asked me to appoint & Collector of Internal Revenue after I had recommended he should not be, and I will never forget, we were there at one of those birthday parties or something and Mac had a couple of drinks in him, and Mac says, "Henry, this is the worst appointment the President has ever made from the standpoint of ethics, but the damn best one he has ever made from the standpoint of politics." I have always remembered that. And now here we are, they are trying to get the poor fellow out, Magruder. Klotz: Who is trying to get him out? H.M.Jr: Eddie Flynn. He has made a good Collector. I want to say that. Gaston: Yes, he is all right. You asked me to look into this matter of ship building facilities in Brazil. H.M.Jr: Yes. Gaston: I have got a little memorandum for you here. (April 23). The substance of it is that there is one yard in Brazil which has three ways on which they could build up to a 450-foot ship on each way, but they are working on con- tracts for the British. They are building six trawlers, that is two on & way. If they are to build steel ships, they have got to import the - all the machinery and the hull plates, and the Maritime Commission doesn't think it is any good. 72 - 23 - H.M.Jr: Anything else? Gaston: Yes. Here is a memorandum by Maxwell (April 22). Largely as 8. result of the conversation I had with Dean Acheson, he is proposing to set up an actual policy board to consist of himself, Dean Acheson, Shea, Wayne Taylor, B. man from OPM, one of his assistants and myself as - on export control policy. He has been hold- ing these so-called policy meetings. He will have 20 or 30 people there. They don't decide questions of policy at all. They merely rubber stamp what Maxwell has previ- ously decided. H.M.Jr: Well, if you don't mind, Herbert, I don't want the Treasury to have anything to do with it. Gaston: Sumner Welles' idea is that it ought to be set up by the President. That is, you don't want us to participate in any policy deci- sions on exports? H.M.Jr: No. It is the same thing as this question about that deciding on amortization and taxes. I said, "I won't be & member of 8. party of four. I will take it all or nothing." Gaston: I think the export control policy is an Administration matter. I think it is some- thing that ought not to be decided by an Army officer. The generalpolicies are really a matter of policy decision. H.M.Jr: Herbert, I remember the whole fight. We wanted to do it in the Treasury. At that time we were young and ambitious. That was a month or two ago, Now we are just 8. bunch of old men. (Laughter) That is editorially speaking and applies to me. If the President 73 - 24 - wants me to do it, the Treasury to do it exclusively, we will take it. I said, "I don't want it. I wouldn't lift a little finger or cross the street to do it." Gaston: I think it would be a mistake for any one department to attempt to handle it. H.M.Jr: If you don't mind, I wish you would write 8. letter for my signature to Mr. Maxwell saying we know nothing of it. Do you agree? Gaston: I am not sure I agree with your general idea. I don't think it is a one department matter at all. H.M.Jr: But I don't want to work with Maxwell. Gaston: Well, he is a difficult man to work with. Foley: I think that is right. I think we have to be kind of careful, though, Mr. Secretary, or the whole thing is going to end up over there because he is building up this large organization and he is reaching out for segments of power, and he is being aided and abetted by Welles. White: He is much more apt to do that if he has a committee representing the various depart- ments. Gaston: I see no reason why that should be so. If you have got a majority of the departments on the committee, it shouldn't. Foley: But he doesn't pay any attention to them, does he? That is Harry's point. He con- sults and it looks as though they are partic- ipating. Gaston: Under the present set-up. He has got it 80 74 - 25 - set up that it falls that way. He may be trying to work a new scheme to make it fall the same way, but it is possible to make something else out of it. White: What authority does this committee have? Gaston: No authority except from Maxwell, that is right. The point is just this. I talked it over with the State Department people and what they propose is that whatever committee is to be set up should be set up, not by Maxwell under his powers, but by the President, and of course I checked with them on that. H.M.Jr: Well, what I would like to do, I can't - do you or don't you agree with me that the proposal that the Treasury be a committee of which Maxwell will be chairman, I gather, that we say no. Gaston: Set up under his authority? Yes. H.M.Jr: Will you write 8 letter. Gaston: Yes. I still think there ought to be an inter-departmental committee on the thing set up by the President. H.M.Jr: Well, making the one step doesn't preclude the other. All right? Gaston: No. Foley: No, and the other step, we tentatively agreed to go along with a long time ago when they wanted a policy committee. H.M.Jr: Well, I might change. I reserve that right. Gaston: This matter of recruiting and taking on the 75 - 26 - reserve officers for the Coast Guard-- H.M.Jr: I saw in the paper, Herbert, that a request had gone up for the appropriation. I thought we decided it wouldn't. There was 8. little article in the paper. Gaston: That is B. different thing. This is B. request for authority to take in men. H.M.Jr: What did I see in the paper that something had gone up on the Hill? Gaston: I think that is & request for an appropria- tion for paying the reserve officers. H.M.Jr: Isn't that-- Gaston: This is a proposal here-- H.M.Jr: Calling up 18 hundred men, wasn't it, 16 or 18 hundred men, that you asked me about? Gaston: That is right, and this is authorizing - this is a proposed order to authorize the commandant to order those 18 hundred men to duty, which we can't do without authority from the President. H.M.Jr: What was the thing I saw in the paper? Gaston: This is an estimate of money to pay the 18 hundred if and when we get authority to take them in. H.M.Jr: Aren't you beating the gun on that? Gaston: I don't think 80. You won't be able to take them in until you get the money. H.M.Jr: But didn't we decide we wouldn't do anything on that, that it would have an effect on the Navy? 76 - 27 - Gaston: I am sorry if I misunderstood you. We decided We wouldn't do anything on this Executive Order to take the men into the service now. H.M.Jr: forced. But if you had the money, my hand would be Gaston: Oh, no, we wouldn't have to take anybody in until we wanted it. H.M.Jr: What are you proposing now? Gaston: I would like the power to take the men in regardless of whether we need them or not because we will need them for harbor patrol work, the men and the boats. H.M.Jr: O.K. Always try me on Monday morning. Gaston: That is a good idea. H.M.Jr: What else? Gaston: That is all. H.M.Jr: Could I just read you all a letter? I think I told you all about my experience just a week ago today about this thing with MacKenzie King. I thought this was a rather nice letter, a very generous letter. "Dear Mr. Morgenthau: This line is just to express to you anew my very warm appreciation of your many kind- nesses and good offices toward myself in the course of my recent visit to the United States. I shall never be able to express what I feel I owe to the permission you accorded me, on 77 - 28 - your twenty-fifth wedding anniversary, to discuss public matters as well as those of personal interest. I was naturally disappointed at not having the pleasure to which I had been looking forward of seeing you again before return- ing to Canada, and the possibility also of greeting Mrs. Morgenthau and the young people. To tell the truth, however, I felt, even before I reached Virginia, that "my ain folk" would never understand what had happened to their Prime Minister, were the press to record, even for two successive days, the fact that I was enjoying the delights of Southern breezes on the seashore at a time when London was in flames, and British forces were retreating from Greece. When I found that I might have the pleasure of seeing the President at Hyde Park on Sunday instead of returning to Washington for Monday, I gave up all further thought of a visit to Warm Springs with the President even if that should materialize later on. When I found the latter was possible, my one and only concern was that of the engagement you had been kind enough to let me make with you for Monday, at which time we were to see the President together. I felt, however, that both you and the President were so com- pletely understanding in all matters that no difficulty or embarrassment would arise on that score. As matters have turned out, I think that, in every respect, matters could not have been better arranged than they ap- parently were by some invisible hand. I did appreciate more than I can say your cordial acceptance of the wording of the state- ment I read to you over the 'phone. I had sought, in the drafting of it, to express only 78 - 29 - what I felt were the conclusions which you and I had virtually reached on Thursday." Then he goes on and gives his best regards and 80 on. But I thought that was a beautiful letter. It is interesting how the man felt about the times. If I went out and said MacKenzie King and I did it in my office Wednesday, everybody would say, That is Morgenthau's version of it." But this is MacKenzie King's version of it. I think I will take it over and show it to the Presi- dent. Now, on your request, I don't know whether the President is going away tonight or not. Schwarz: They have abandoned the Warm Springs plan on account of John Lewis' fight. H.M.Jr: I don't have to put up what you asked? Schwarz: No, it is too much of an imposition. H.M.Jr: I don't want to ask him to have a preview. Schwarz: I just raised the point 80 we wouldn't be disappointed. H.M.Jr: Will he be here Wednesday? Schwarz: Yes, sir. H.M.Jr: O.K. 79 April 28, 1941 My dear Mr. President: At lunch today you asked me to write you a nemo- randum of the conversation that we had. I asked you what you thought of the idea of having the Queen of England or Lady Reading make a broadcast to the American people for food for the undernourished women and children of England. You made a counter-suggestion; namely, that the broad- cast be made in the United States by Mrs. Franklin D. Roose- velt making an appeal for food for the women and children of England; Mr. Bull making a ten-minute talk on democracy in general and the saving of English democracy particularly, and Mr. Knudsen talking ten minutes on the need of food for the munitions workers of England. My own thought is that it is too much to expect the English people to fight on empty stomachs, and that condition is not very far off. It is my belief that we must transfer 8. great number of our ships at once to the English flag for the transportation of food, and a broadcast of the kind that you and I discussed would help mold public opinion. Yours sincerely, /5/ Henry The President, The White House. Regraded Uclassified 80 April 28, 1941 3:55 p.m. H.M.Jr: Hello, Operator: Major Smith. Major Smith: Yes, Mr. Secretary. How are you? H.M.Jr: How are you? S: Fine, thank you, sir. H.M.Jr: Major, you know George Haas of my office and I have been wrestling with these statistics for the President, you know. 8: Yes, sir. H.M.Jr: Now, I thought I had something wonderful. We finally got the M-3, so-called light tank, 15-ton tank S: Yes, sir. H.M.Jr: Well, we finally found that they made 43 tanks up to April 15th 80 the President said that was fine but, he says, have they got guns, have they got ammunition. He said, I don't count a tank a tank until it is ready to go into battle. Now, how in the hell are we going to get that? I don't think we can get that out of Colonel Leonard Ayres. 8: Well, we are working up statistics of that sort. When Mr. Baruch was down here last he sent for me and thought that data like that - that is, a chart which would show tank production and which also had lines on it showing the contributing items and particularly the sore spots, as for example ammunition or guns, all showing the same picture would be desirable. We're working a thing like that out now, or trying to. H.M.Jr: Well, what the President told me was that he told Mr. Baruch he wanted the kind of chart that I give him on finances. 81 - 2 - Yes. S: H.M.Jr: I don't know whether Mr. Baruch repeated that or not. S: I don't know, sir. He showed me - he gave me a little drawing of something ...... H.M.Jr: Well, that's what the President gave him, 80 we're both working on the same thing. 8: Well, as soon as we get a pilot model, let me show it to you and see if that's what you want or what you think you might want. H.M.Jr: Well, can you do it on the M-3 light tank? S: Yes, I'm quite sure we can. H.M.Jr: Because there 16 less on that one - they've made 43 of them. S: I have Colonel Ayres and Brooks both working on it in the hope that one or the other of them will produce something that would be satisfactory. H.M.Jr: Who is Brooks? S: Brooks is our own statistician - the General Staff. Ayres is down in the H.M.Jr: Well, how long is it going to take? 8: Well, I don't know, Mr. Morgenthau but I'll go down and tickle them up again and see if I can get an estimate. H.M.Jr: Well, I've got this figure - it has taken me one week to get it - that as of April 15th they took delivery of 43 tanks and that the schedule called for - the accumulated schedule - 192. S: It oughtn't to take you more than ten minutes to get that figure. Regraded Uclassified 82 - 3 - H.M.Jr: Well, it took us one week from Ayres. S: It did? H.M.Jr: Yes. S: Well, he's an odd chap. My contacts with him are limited. Our own statistical branch of the General Staff has data similar to that. We don't duplicate it but it doesn't take us quite that long. H.M.Jr: Well, maybe that's a little unfair, maybe it only took three days. S: Well, that's bad enough, Mr. Secretary. H.M.Jr: But, my God, Major, here we are fussing around and the President said he asked Mr. Baruch this six weeks ago and he was unable to get it out of O.P.M. 8: I see. H.M.Jr: Re said he asked him the same question six weeks ago. See what you can do. 8: I will indeed. H.M.Jr: I'm out tomorrow with McCloy. See if tomorrow afternoon you can't maybe have something for me. S: Well, I'll do the best I can, Mr. Secretary. That's a little bit out of our bailiwick but we'll ...... H.M.Jr: No, now wait a minute. You're contacting General Watson and me and we're both doing it for the President. S: That's right, sir. Of course I have to deal through the Undersecretary but I don't mind that if I know that you want it. H.M.Jr: I want it and you can use my name. 8: Yes, sir, I shall. 83 4 H.M.Jr: For whatever it's worth. 8: I shall, sir. H.M.Jr: O.K. 8: Now, then, one more thing while you're on the phone, sir. We got & cable from England. The B-17's have not yet been in actual combat flight. The data which I gave you from General Arnold was based on a flight all right but not a combat flight. H.M.Jr: Well, it was Sir Henry Self who told me that the machine had gone over Europe and dropped a load of bombs. S: Is that so, sir? H.M.Jr: That's where I got it. 8: Well, if so, they have either refused to officially release it to us for we have no - we got a confirmation by cable this morning. H.M.Jr: Well, he may not have it right. 8: I 880, sir. Arnold's data was on H.M.Jr: I saw that. That mentioned the what-do-you- call-it - that pumps the air into the engine. 8: The is that supercharger - how high they had been - 33,000. H.M.Jr: That's right. Well, on this other thing, you see, I'm interested - just to repeat - for two things. One for the President and for myself on my estimate on how much money I've got to raise. Now it depends upon how fast this thing goes, you know, and I estimated only $12 billion for national defense for the coming year and of course O.P.M. has a much higher figure and I'm going to stick to that until I'm proven wrong. 8: Yes. Well, I'll get after them and 800 if I can't expedite this thing a little bit, sir. 84 - 5 - H.M.Jr: All right. S: I'll try to get you at least a pilot model here when you get back. H.M.Jr: Well - (laughs) - that's my trouble - & pilot. S: If I were a statistician I think, as a matter of fact, I could draw one up myself. I know about what is wanted, I believe. H.M.Jr: And the other thing, 80 that you keep track of me, on the 7th of May Mr. Lovett is going to bring in some of the latest planes somewhere ...... 8: I was in his office when you called, and we were just talking about it, sir. He hopes possibly to persuade you to go with him also to Langley, which is only about & 35 or 40 minute trip. H.M.Jr: Well, now, when you do that remember this that General Watson has never been and for two years he said he and I would make the trip together. S: Well, would he like to go with you? H.M.Jr: I don't know. We can find out. 8: Well, I'll tell him, sir, and if he would of course we'd love to have him. H.M.Jr: For two years he has said he'd go. 8: All right, sir. I'll tell him. H.M.Jr: He's never been to Langley. I'll go; I'm saving ....... 8: We want you to go and ...... H.M.Jr: Well, I'll go. 8: All right, sir. Well, I'll mention the faot that you're going and ask him - that's on May 7th, isn't it, Mr. Secretary. 85 - 6 - H.M.Jr: That's right. S: All right, sir. Thank you very much. H.M.: Good-bye. 86 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATEAPRIL 28, 1941. TO Secretary Morgenthau FROM Mr. Foley Re: Lease-Lend Agreement. There was a meeting in Berle's office attended by Berle, Acheson and Pasvolsky and by Foley, Cox and Bernstein. Berle said they had been studying the draft of the agreement which we sent to them. He said that State tried to get up a draft of the agreement which would look less as though we were going to require the British to make specific repayments for what we had given them, but would require the British to sit down immediately with this Government and work out understandings in 8. number of fields, some to take effect immediately and some to take effect after the war. Berle said their draft also would be in the nature of the answer of democracy to the Axis by helping create a structure of liberal international economic relationships. Berle then distributed copies of the State Department draft, which we read over and discussed in some detail. Tie pointed out the possibility that the agreement might be subjected to criticism in that the United States did not seem to be getting enough as a quid pro quo, and that con- sequently the Administration might have greater difficulties in getting further appropriations from Congress. We also discussed the possibility of the two Governments being able to consider at this time a program of international economic relationships to exist after the war. Pasvolsky felt that there were a number of economic and trade problems which could be the subject of immediate and effective negotiations between the two Governments. We also noted that many of the provisions of the State Department draft followed the Treasury draft. I told Berle that I would circulate in the Treasury the draft prepared by the State Department, and that after the Treasury had studied the matter I would communicate with him to arrange & further meeting. E.M.7h 87 April 28, 1941 WHEREAS, His Majesty's Government in the United Kingdom (hereinafter called "the United Kingdom") has requested from the Government of the United States of America (hereinafter called "the United States") certain aid pursuant to the Act of Congress of the United States of March 11, 1941 (Public No. 11, 77th Congress, herein- after called "the Act") for the defense of the United Kingdom; and WHEREAS, the United States is giving and proposes to continue to give assistance to the United Kingdom under the Act, by transferring defense articles and by rendering services, which shall be listed and valued in schedules appropriately identified; NOW, THEREFORE, the undersigned, duly authorized to that effect, have agreed as follows: 88 ARTICLE 1 (1) The present agreement deals with the method of settlement of the accounts resulting from the transfer of defense articles and services by the United States to the United Kingdom described in the Preamble hereto. (2) In this connection, the United States and the United Kingdom declare that they consider themselves, and any and all other countries willing to join therein, as being engaged in a cooperative undertaking to establish the bases of a just and durable world peace and to set up a structure of liberal international economic relationships essential to the maintenance of such peace, to a condition of order under law in inter- national relations and to economic progress for all nations. (3) Hence, such arrangements for the liquidation of obligations arising out of the granting of assistance under the Act by the United States to the United Kingdom as are provided for in this Agreement, as well as such arrangements in this respect as shall eventually be agreed upon, shall, to the extent practicable and mutually beneficial, be regarded as elements in this undertaking. 89 ARTICLE 2 The United Kingdom agrees that, should circum- stances arise in which the United States shall have need in its own defense for defense articles and defense information which the United Kingdom shall be in a position to supply, the United Kingdom will make available to the United States such defense articles or defense information under arrangements analogous to those expressed in this Agreement. 90 ARTICLE 3 (1) Defense articles which shall have been trans- ferred to the United Kingdom pursuant to the Act, in so far as they shall not have been destroyed or otherwise rendered incapable of effective use, shall be returned to the United States upon request of the President of the United States; and any obligation resting upon the United Kingdom by reason of the original transfer of such articles to the United Kingdom shall be deemed to be satisfied upon their return. Request for the return of such articles shall not be made until the President shall have determined that the present emergency is ended. (2) In the event that the United Kingdom finds it desirable to retain some of the defense articles described above and to provide, in lieu of their return to the United States, other forms of compensation, the President of the United States will give sympathetic considera- tion to any proposals to this effect that may be put forward by the United Kingdom. 91 ARTICLE 4 The manner of liquidating the obligations on the part of the United Kingdom arising out of the transfer to it of such defense articles as shall have been destroyed or otherwise rendered incapable of effective use, or arising out of the rendering of services, or arising out of any other transfers not provided for in Article 3 above, shall be determined by agreement between the two Governments in conjunction with and in the light of other agreements and arrangements concluded between the two Governments in pursuance of the objectives stated in Article 1 above, including those set forth in the Annex to this Agreement. 92 ARTICLE 5 The United States and the United Kingdom shall periodically review the status of the accounts arising under this Agreement, and the President may from time to time determine any credits to be given to the United Kingdom by reason of any consideration or benefit which the President determines shall have been received by the United States from the United Kingdom. 93 ARTICLE 6 The United Kingdom agrees that it will not, without the consent of the President, transfer title to or possession of any defense article or defense informa- tion, transferred to the United Kingdom hereunder or permit its use by anyone not an officer, employee, or agent of the United Kingdom. 94. ARTICLE 7 If, as & result of the transfer to the United Kingdom of any defense article or defense information, it is necessary for the United Kingdom to take any action or make any payment in order fully to protect, pursuant to the Act, any of the rights of any citizen of the United States who has patent rights in and to any such defense article or information, the United Kingdom will do so, when so requested by the President. 95 ARTICLE 8 The President may exercise any power or authority conferred on him hereunder through such officer or agency as he shall direct for that purpose. The terms "defense article" and "defense information" as used in this Agreement shall have the same meaning as defined in the Act. 96 ARTICLE 9 The parties to this Agreement, and the officials signing this Agreement on their behalf, each for itself, himself, or themselves, represent and agree that the execution and delivery of this Agreement have in all respects been duly authorized, and that all acts, condi- tions, and legal formalities which should have been performed and completed prior to the making of this Agreement have been performed and completed as required by, and in conformity with, respectively, the laws of the United States and the United Kingdom. 97 Signed in Washington in duplicate this day of , 1941. ON BEHALF OF THE UNITED STATES OF AMERICA (1171) ON BEHALF OF HIS MAJESTY'S GOVERNMENT IN THE UNITED KINGDOM (Title) 98 ANNEX In order to facilitate and promote the attainment of the objectives stated in Article 1 and referred to in Article 4 of this Agreement, the two Governments agree as follows: a. To enter immediately into negotiations for the formulation of an effective cooperative program for post-war economic reconstruction, looking especially towards the establishment of such commercial and financial policies, arrangements, and mechanisms as will permit the freest practicable, mitually beneficial interchange of goods and services among the populations of the parties to this Agreement and among all nations willing to cooperate in this respect; b. To enter immediately into negotiations looking toward a mutually satisfactory revision of the existing trade agreement between them. In connection with these negotiations, the United States undertakes to enter into similar negotiations with Australia, New Zealand, South Africa and Canada, which negotiations the United Kingdom undertakes to facilitate in every appropriate way. C, To cooperate with each other in improving trade relations between each of them and third countries in 80 far Regraded Uclassified 99 ANNEX page 2 far as difficulties exist for one of them in such third countries by reason of clearing, compensation, payment or similar agreements or arrangements entered into by the other. d. To cooperate with each other and with other nations in the negotiation of fair and equitable inter- national commodity agreements or arrangements with respect to products of which either or both the United States and the British Commonwealth of Nations have surplus or other economic problems. e. To cooperate with each other and with other nations toward the creation of conditions under which access to raw materials on terms of equality shall be open to all nations for the general welfare. f. To cooperate with each other in the relief of distress or want arising out of the present war as soon as, and in such areas as, it becomes practicable to initiate active measures for such relief. g. To examine forthwith, with the view to making mutually acceptable adjustments, whatever questions of a territorial nature may exist between them, especially from the viewpoint of strengthening and improving the national defense position of each of them. Regraded Uclassified 100 April m, 1941. to: Quear Gez From Secretary Thank you for year of April 26th, sending 6 engy of ⑉ you propared and submitted be forry Repkins. 1 particularly like the letter to the mohine tool people. I read this very attentively ml think 19 to splemid. (Initialed) H.M.Jr. / By Messenger 1/29-9"am 101 April se, 1941. 901 Geear Cox From decretary Norgrathsm Thank you for your of April 20th, sending 6 one of - you propared and oubmitted to Marry Registro. I particularly 11ke the letter to the makine teal people. I rest this very attentively and think so is sylendid. (Initialed) H.M.Jr. 0 / By Monumeer 102 April 20, 1942. to: Osear Goz From Secretary Thank you for year of April 20th, sending & orgy of - you propared and submitted to they Repkins. I particularly like the letter to the mehice tool people. I read this very attentively ml this 10 is sylendid. (Initialed) H.M.Jr. / By Manager Regraded Uclassified 103 15.00 April 26, 1941 To: Secretary Morgenthan Prom: Oscar Cox For your confidential information: 1) The financial agreement, if it is going to be a statesman- like document, will take a good bit of time to work out, After checking with Ed Foley, I thought it wise to send the annexed memorandum to Harry Hopkins. 2) The first draft of the letter on machine tools is intended to be the first of & series of public steps hitting at var- ious central phases of the production problem. ose Attachment Can ^ - 7 245 / Screel 104 April 25, 1941 Tos Mr. Harry Hopirins Prom: Oscar Cox Subjects Master Agreement with the United Kingdom. On June 9, 1941, the President will be required to file his first report to Congress on the operations under the Land- Lease Act. In this report he may want to make some reference to the benefit or benefits received for the defense articles transferred to Britain. For this perpose, it may be desirable to have the master agreement with the British worked out, If you think it vise you my want to suggest to the Pres- ident that the Secretary of the Treasury proceed to clear the draft of the agreement with Hall, Jackson and Harold Smith and then start negotiations with Sir Frederick Phillips. I think the Treasury should de this rather than the State Department 80 that the financial agreement will not take 08 my of the aspects of a treaty, requiring retification by a two-thirds Senate vote. cary OSC:aja Regraded Uclassified 105 MEMORANDUM April 25, 1941. to: Mr. Barry Depicine Prom: Oscar Cox Subject: Machine Teels. 1. Annexed is & first try at the proposed letter on mashine tools for the President's signature. 2. lines labor and Army and Havy - likely to be invelved is this affert, I thought that it might be visar to address the letter to all four of the members of O.P.M. - Endoen, Hillness, Stinson and Insur - rather then to just Kanden aleas. 2. I should think that this letter night be nost without prior consultation with the addressees, without putting cayone on a limb, If you think there is adequato time, it weld unquestionably be better to have the ed- dreamsee 2eek it over within a stated shert deadline before sending 18 one Cot 0601djb Regraded Uclassified 106 Dear Sire: to nake the defense progres - faster and faster, n need more and more makine toole as quickly as possible. I know that you and the aschine tool designers, workers and manufacturers have already done & magnificant job in expending our mobine tool capacity manyfold. But that is not enough, The genius of our people can and should do acre-and do it right may. We met imediately step-sp the production of or maskins teals in every conseivable my. We met at - directly expend our asokins tool plants. No met at - get the - stry people to - these expended plants. No met get number- terers and werkers alike-se they will de with spirit-to extend themselves to the limit to de the job. No must get those who we the machine tesls to use them as much and as effectively # pos- sible. The met get these who nake meekins teels to wet mere shifts, to better utilise three skifts to get a nations of - dustivity, to consentrate a tesls for defense and to take every 107 - 2 - other stop is this direction which Immess ingensity can - caive. The met also them into high (MP these other - afastarers and workers spread throughout the land who sex at will mis machine tools for our defence, but the are only partially or not at all engaged in doing so. This applies to both small and large manufacturers. They should be brought into the defense effort directly or by farsing work out to them. All of the automobile manufacturers have already set an example by voluntarily reducing their civilian output, and one has already comitted itself net to put out a 1943 model. In this my sm, mechines and materials will be made available for the assufasture of mashine teels. No must have mere of this in all fields. All of M, particularly the amafacturers who have direct orders for mackine teals, must take the responsibility for busting out and putting to full work all of these plants of every sise which have the trained personnel and the equipment to min anchine tools or any part of the By a united and driving effert, our people can and will de a unsurpassable job in producing the machines and equipment Regraded Uclassified 108 - 3 - of defense with the states speed, It is year chosen task to stimulate and charmel every imaginable phase of this effect into its speediest and mest fruitful overse. In doing as I as sure that you will have the full and urgent support of all of w-tho public, labor, intustry and the Government-to make strong the defense of this land sooner rather than later. Very truly yours, William 8. Kundren, Sidney Willmen, Heary L. Stinson, Frank Insx, Numbers, of the Office of Preduction linagement. 0SC:aja 4/25/41 109 MEMORANDUM April 28, 1941. To: Secretary Morgenthau From: Oscar Cox Subject: Merchant Shipping. For your confidential information: 1) A copy of Salter's memorandum on the merchant shipping problem; and 2) A first draft of a directive to Admiral Land. ose 110 THE SHIPPING PROBLEM I 1. Two things are Decessury: (a) to out-build losses as early M possible in 1942, (b) to bridge the interval. 2. Since the collapes of Western Europe last summer, losses have been at the average rate of 5 million gross teas, Every poo- sible effort to improve protection is, of course, needed but the energr's attack is also increasing in strength. It would be imprudent to count on a lower average rate of losses, British building, in the United Kingdom and elsewhere in the British Expire (Canada and Hong Kong), is at the rate of 1-1/4-1-1/2 million gross tons. In view of naval building and repairs, this figure will probably not be exceeded and my be seriously N° deced if there is heavy bearding in the shipyards. U.S.A. building 10 the only other source. To meet the deficiency at the present rate of loss, 3-1/2 to 3-3/4 million gross tons a year would be required OVER to match current losses at present rate but before the full incrican production can reach its peak, tennage will have been further depleted. A margin 10, therefore, needed to make up arrears spart from some is- surance against & possible increase in the rata of loss. It is important, therefore, that imerican production should be increased so 4a to reach the rate of 4 millice gross tone (or 6 million tous deadweight) as serly as possible in 1942. This was the rate programed in 1917 and attained in 1918-19. The speed with which production can be expanded is no less important Regraded Uclassified 111 - 2 - than the scale ultimately aimed at, The most energetic action is, therefore, needed at once. It must be remembered, of course, that now production has to cover all purposes, replacement of vessels that have to be scrapped through old age. On the present plans American output will amount to 800,000 goto in 1941 and about 3-1/4 million in 1942. 3. If TO assume provisionally that from the latter part of 1942 combined building can be brought up to equal the current losses, there remains the question of how the interval is to be bridged. The shipping required for this purpose my be best judged from a brief summary of the present shipping and import position of Great Britain, In what follows, (A) ordinary ships and cargo and (B) tankers carrying oil will be considered separately. 4. 4. (EXCLUDING TANKERS AND on). British ocean-going tormage, including what has been added to the British flag by capture, requisition and par- chase, now amounts to 13 million date In addition, 90 have on charter 3 million gets of allied and neutral ships in ver service. of this total of 16 million tons, 4 million tom are used by the Havy and Army (for armed merchant cruisers, troop Regraded Uclassified 112 - 3 - carriers, etc.), about 1-3/4 million tons are under repair and about 2-1/4 million tons are employed in maintaining Empire supplies. This leaves about 8 willion tons available for importing into Great Britain. 5. The imports which 19 can secure with this tonnage are reduced (a) by the need to bring from more distant sources what 10 imported in peace-time from Europe; (b) by the delays neces- sarily involved in the convoy system, and (c) by losses of cargoes afloat and ashore. After allowing for every economy we can make in ships under our own control (such as diverting from Australasia to the Atlantic), to estimate that, on the assumption that the present rate of loss continues, U.K. imports (excluding oil) will this year not exceed 30 million tons. How serious this position is say be judged from the following facts: Our imports (excluding oil) averaged for the three years immediately before the war 56 million tons. The corresponding imports in the worst year of the last war (1917) were 34 million tons (and our population was then less than it is now by 10%). In the first year of this war to imported 43-1/2 million tone and our plans were made on the basis of 40 millions being a minimum below which real food difficulty and some impairment of our war effort through short- age of rew materials would be involved. Regraded Uclassified 113 - 4 - No were a few months ago compelled to cut down our programmes on the basis of a prospective total import of 35 million tons, of which food was to take 15, and raw materials and munitions 20. This would have involved a severe hardship and shortage of some materials needed for manufacture of munitions, but on that figure - might perhaps have just pulled through. In any further reduction below a total of 35, food cannot bear an equal proportion of any cut and the main result must be to deplete stocks and stint supplies of the raw materials wanted for munitions manufacture. 6. B. TANKERS AND OIL. h have (not counting fleet auxiliaries in attendance on the floot and thus not available for replenishing stocks) 3 million gets of British ocean tankers and 1-1/4 million gots of allied and neutral tankers. In spite of severe rationing of petrol, we need to import all forms of oil into Great Britain and to transport about 17 million tome for bunkers and fleet supplies abroad and for the civilian needs of the Dominions. No estimated a few weeks ago that we should be short by about 350,000 goto even if future losses were from now on bal- anced by replacement. Since then the situation has worsened. Stocks of petrol in the U.K. have fallen to a dangerous level and are still falling. In the first 10 days of this month 9 tankers (representing some 75,000 got, or 100,000 tons deadweight) have been lost and others damaged. Regraded Uclassified 114 - 5 - 7. to thus reach the question, "How such additional tonnage is needed during the next 12 to 15 months to prevent the danger of a serious impairment of the war effort (through shortage of either food or raw materials or an enforced reduction of silitary action in the Middle East, stc.)? The need an addi- tional importation of 7 to 10 million tons beyond what we can ensure by our own tonnage. The must assume that the Middle East will absorb in total rather more tonnage than it does now and we cannot prudently allow for any net reduction in the rate of loss. No must also bear in mind that any tonnage brought into our service will come in gradually and will not be actually importing for the whole of the forthcoming year. Taking these factors into account, it seems clear that - really need an increase of the tonnage engaged in importing or in carrying military stores of between 3 and 4 million gross tons coming into service rapidly enough to make them at least equivalent in carrying power to 2 million tons gross or 3 million tons dead- weight immediately added and continuously employed. 8. It will naturally be asked whether some contribution cannot be made to the above tonnage requirements by some re-rosteing of British or Allied tonnage. As far as British tonnage is concerned, however, every possible effort has been, and is being, made, under the com- polling pressure of our imports shortage, to secure the maximum 115 - 6 - importing use of our shipping by withdrawal from foreign trade and diversion from distant sources (@.g., Australasia) to the Atlantic. The above estimate of our prospective imports (and, therefore, of the extent of the deficit) allows for the effect of these diversions. A detailed analysis has been made of the employment of all the British ships and was recently given to Mr. Hopkins in London. This shows that there is only about 600,000 tons deadweight or 400,000 gross tons physically suitable for ocean work. These ships are, however, engaged in essential work. They could be drawn into importing work if replaced, but not otherwise. Any further diversion would not, therefore, reduce the amount of extra tonnage required. But it would enable some part of this tonnage to be taken in the form of the allocation of shipping to work in safe areas. As regards Allied ships, a certain amount of Norwegian, Greek and Dutch tonnage has been left outside of direct var service in order to carn dollars required to meet existing obligations and essential current necessities. Most, but not all, of this tonnage, is however, engaged in important work for which provision must be made in some way. Allowing for this, it is possible that something like 400,000 gots of further Allied tomage could be gradually brought into war service, if the Allied Governments could be Regraded Uclassified 116 - 7 - furnished with the dollar exchange now earned by their work, This might take the form of Lease-Lend purchase or chartering by the U. S. Government with allocation to war service. 9. Taking the requirement, as explained in paragraph 7, as say 3-1/2 million gete spread over the next year until June, 1942, it remains to consider from what source this wight be met. They consist of (a) tonnage not under the U.S.A. flag, which wight be obtained with the aid of the U.S.A. Government and (B) U.S.A. flag tonnage. The former category (A) includes Danish ships, German and Italian ships in U.S.A. porte; a few Jugoslav ships; the Allied tonnage referred to in paragraph 8. is more remote possibilities are the French ships, perhaps scae of the enemy ships in Latin American ports which the Governments concerned night seise if the U.S.G. gave a lead (a few of which might perhaps come into our service); possibly also & few of the "Pansmanian" ships might be secured by the U.S.A. Taking into account political considerations and the serious damage to most of the enery shipping, it would be improvident to hope for more than & total of 3/4 million Boto from all the above sources, and much of this will come into service very late, The second category, (B) - American "flag tonnage" includes both existing ships and DEF ships which will be pro- duesd between now and June 1942. Regraded Uclassified 117 - 8 - The existing American mercantile marine (excluding Great Lakes tonnage) consists of about 6-1/2 million gross tons. Much of this, of course, in unsuitable and the great part of the remainder cannot be spared from the work in which it is now engaged and to which it.is being diverted for U.S.A. defense needs. À great deal of "inter-coastal" work (1.0., from Pacific to Atlantic via Panama) could be transferred to rail, and some of the "domestic" work could be similarly transferred or restricted. Conceivably 1 million gots could be obtained from these two sources. In addition, passenger vessels (which would release some of our good cargo carriers from troop carrying), tankers, and other tonnage might yield another 1/4 million goto New production between now and the end of June, 1942, is planned to reach about 2-2/4 million tons. Some of this will be required to replace ships scrapped through old age. But most old ships could be kept going & year or two longer. Con- ceivably, 1-1/2 million get. could be allocated from new production. 10, The above withdrawals, if they were all possible, would - on the assumption of the present rate of loss about meet our deficit on essential needs (with allowance for time lag in entry on service) until the middle of June, 1942, or a little later. Regraded Uclassified 118 - y - by that time, American production might be 00 expanded that, - added to British production, future current losses might be compounded. The problem, therefore, though urgent and difficult, is not insoluble. Several conclusions, however, energe clearly, 1. Immediate shipping assistance on & large scale is india- pensable and the date at which ships are forthcoming is as important as their number. For the vital year shead, & ship supplied tomorrow is worth two ships in six months. it. The adequacy of the action described above, as regards both production and interia assistance from existing ships, depends upon the future rate of losses. The eneay's strength on attack, by both U-bost and air, is increasing. It is uncertain whether One protective forces can keep the rate of loss down to even the present high figure in spite of their own increase in strength. It is obviously better to date a ship than to build one in replacement. Anything that is possible to assist in protection is, therefore, doubly valuable. iii. Increase of production (0.5., by using the resources of the Great Lakes) is highly desirable if possible, in order to ensure some margin against the uncertainty of further production, and to hasten the date at which equilibrium between losses and replacement will be reached. Acceleration in the work is in any case required, and to secure results OTER in 1942 the action is required now. Regraded Uclassified 119 - 10 - Every week's avoidable delay involves serious loss in essential supplies. 17. For every form of assistance the mest urgent and drastic action will be required by the American administration responsible (the Maritime Commission), and intricate co-ordination with the British supply organization. This will throw a heavy strain on the personnel of the Commission, and it is highly desirable that officers and appropriate subordinates shall have sufficient authority and sufficient time to carry through the work involved, in daily collaberation with the members of the British Shipping Mission, by the decisions of policy taken from time to time by the President. Here, as in the office of production, any delays through inadequacy of the administrative arrangements, might be fatal. Regraded Uclassified 120 THE WHITE HOUSE WASHINGTON My dear Admiral Land: Speed is an urgent necessity in the carrying out of our merchant shipping program. Ships and more ships are in- mediately required to bring from the American republics and other parts of the world strategic and critical materials for the manufacture and operation of airplanes, guns, and tanks, and for the building up of our stock piles. Ships are needed to carry the materials to build our newly acquired military, naval, and air bases. Ships are required to transport the material aid which we are giving to China. Ships, in an ever- increasing number and at a rapidly accelerated rate, are neces- sary, if we are effectively to aid Britain, under the Lend-Lease Act, to replenish her losses. I, therefore, direct you to ake every necessary and appropriate step immediately to: (1) Obtain maximum productivity in the existing shipyards by getting as close as possible to continuous operation-twenty-four hours a day, seven days a week- by getting increased the number of employees who work overtime and the amount of overtime they work and by Regraded Uclassified 121 - 2 - any other practicable means that will speed up the building of our cargo ships and oil tankers. (2) Speed up the building of the additional ship- building ways for which I allotted funds to the Maritime Com- mission, on April 14, 1941, out of the Defense Aid Appropri- ation Act. (3) Proceed as fast as possible with the construction of the other new shipbuilding facilities which are now in progress. (4) Start at once to construct the additional ways which are necessary to give us by May 1, 1942 or sooner a yearly productive capacity for merchant ships of at least 4,200,000 gross tons. (5) Commence immediately to train or otherwise to ob- tain the skilled and other workers necessary to carry out this program. (6) Hasten to repair the immobilised foreign flagships in our ports which were damaged by the sabotage of their crews. (7) Work out, and report to me as soon as possible, pending the passage of the legislation which is now before Con- gress, the ways in which the immobilized ships in our ports can best be used in the defense of the United States. 122 - 3 - (8) In collaboration with the Secretary of State and the appropriate representatives of the other American repub- lics in the Western Hemisphere, consult on the ways in which the immobilised foreign ships in this Hemisphere can best be utilised in the defense of the Western Hemisphere. (9) Make at once a survey of our inter-coastal and domestic shipping and report to me on what changes or the re- lease of what ships for other shipping are necessary to further our defense. (10) Work out with the Secretary of the Navy and the Secretary of the Interior, as expeditiously as possible, the ways by which American tankers can best be utilized in the in- terests of our defense. (11) Re-survey the cargoes carried by our Merchant Fleet, and in the light of the Maritime Commission's priority powers advise me, after consultation with the appropriate departments and agencies of the Government, what steps should be taken in the interests of our national defense. (12) Otherwise move ahead as fast as humanly possible the program for the most effective expansion and utilisation of our Regraded Uclassified 123 - 4 - Merchant Fleet in the interests of our defense and the defense of those nations whose defense is vital to ours. Very truly yours, Hon. Emory S. Land, Chairman, United States Maritime Commission. 124 A23 MEMORANDUM FROM British Supply Council Mrs. Helen S. Klotz TO Compliments of Mr. E.N. Gray # 125- STATEMENT NO. 12 AIRCRAFT SHIPPED TO U. K. & OVERSEAS COMMANDS By Sea By Air during week during week ending ending ASSEMBLY April 5 April 26 DESTINATION POINT 1941 1941 1 I S. Africa Cape Town 10 - III U. K. U. K. - 2 U. K. via Gander U. K. 8 - New Zealand New Zealand 3 - ICAN II New Zealand New Zealand 28 - U. K. U. K. - 1 via Gander RD m U. K. U.K. - 1 via Gander U. K. U. K. - 2 via Bermuda F. E. F. E. - 1 via San Diego 49 7 Commission 941 126v April se, 1961. nor By. Gennely: Thank you for peur letter of April sub, which enclosed information received free ⑉ of the Canadian members of the Bankers Assecia- ties in regard to the fleating of their third was lean. I note that you have met copice of this information to others is this office est I approciate the courteey. I as also glad to have the Consdian postal stamp advertising the current bende. (Signed) 1. Morgenthau, 320 I b. Smott P. President, Investment Senteres Association of America, 400 Medicon Avenue, Bev Test, Sw Tests. Regraded Uclassified 127 INVESTMENT BANKERS ASSOCIATION OF AMERICA PRESIDENT SOVERNORS GOVERNORS MORTLAND CHMETT F. CONNELY DETROIT # VERNE MITCHELL - CLEVELAND BOSTON VICE PRESIDENTS J.LUOWIO HOSLE - AMORT GALVESTON BOSTON FREDERIC P.MULUNS PAUL H.DAVIS PITTSBURGH BALTIMORE CHICAGO T. EDWARD O'CONNELL - acree SPOKAME SAN FRANCISCO JOHN 5. FLEER CLEVELAND JOHN K. STARNWEATHER NEW YORK DONALD C'HELVENT LOS ANGELES - anower NEW YORK EDWARD H HILLIARD LOUISVILLE JOHN STUBBS BOSTON JAMES F.OUISS ST. LOUIS - SAN FRANCISCO CHICAGO JULIUS W. REINHOLDT, - ST. LOUIS EXECUTIVE SECRETARY a TREASURER HARVEY RONEY - LOS ANGELES CHICAGO ALDEN H.LITTLE CHICAGO J.FLEMING SETTLE COLLINS ATLANTA - NASHVILLE BURDICK SIMONS DEHVER NEW YORK FIELD SECRETARY EDUCATIONAL DIRECTOR EVERETT BEDRE F. SPAULDING CHICAGO NEW YORK ARTHUR G.OAVIS CHICAGO DAVID BILLMAN CHICAGO R.HCLEAN STEWART NEW - NEW YORK BOSTON WINTHROP E-BULLIVAN CHICAGO LEW YORK MUNICIPAL SECRETARY SECRETARY - LOWRY SWENEY COLUMBUS BALTIMORE DUDLEY C.SMITH CHICAGO ROBERT STEVENSON 3m CHICAGO ALBERT N. THAYER SENT - PHILAGELPHIA OKLAHOMA CITY JOHN W. WATLING - KOMMOLD DETROIT MINNEAPOLIS ASSISTANT SECRETARIES MAY N.WHIPPLE LOUDON CHICAGO UNCOLN MART A.LINCOLN CHICADO DOROTHY A.DUVAL CHICAGO JEAN C.WITTER SAN FRANCISCO - NEW HAVEN PEARSON WINSLOW - NEW YORK TORONTO ALEXANGER C.YARNALL MILEOD PHILADELPHIA JOHN M. YOUNG NEW YORK OFFICE or THE PRESIDENT BUHL BUILDING FROM DETROIT NEW YORK OFFICE 400 MADISON AVENUE April 24, 1941 NEW YORK CITY The Honorable Henry Morgenthau, Jr. Secretary of the Treasury Washington, D. C. My dear Mr. Secretary: I am enclosing some information that I have just received from one of our Canadian members regarding the third war loan which is now in the process of being "set up." I understand the amount is to be $600,000,000 and that the Minister of Finance of the Bank of Canada is working closely with the Canadian in- vestment bankers in making all preliminary arrangements for a campaign of a very broad nature. I am sending copies of this information to Mr. Bell, Mr. Graves, and Mr. Kuhn. Respectfully, AST Emmett F.) Connely President EFC:0 Enclosures P.S. I am enclosing an interesting Canadian stamp which car- ries a patriotic message along with it. Regraded Uclassified 127 INVESTMENT BANKERS ASSOCIATION OF AMERICA PRESIDENT GOVERNORS GOVERNORS PORTLAND CHNETT -CONNELY DETROIT 1 VERNE MITCHELL CLEVELAND BOSTON - VICE PRESIDENTS J.LUOWS HOBLE BALVESTOH BOSTON - FAUL H.DAVIE FREDERIC P.MULLING BALTWORE CHICAGO PITTSBURGH - MOVICE T-EDWARD O'CONNELL 1 SAN FRANCISCO JOHN s. FLEEN GLEVELAND SPORANE JOHN a STAREWEATHER NEW YORK DONALD C'NELVENT LOS ANDELES NEW YORK COWARD H.HILLIARD LOUISVILLE JOHN G.STUBSS BOSTON JAMES F-OUIDS ST. LOUIS - - SAM FRANCISCO JULIUS W.REINHOLDT,JA CHICAGO EXECUTIVE SECRETARY & TREASURER ST. LOUIS HARVEY RONEY - LOS ANGELES CHICAGO ALDEN H.LITTLE CHICAGO - cause J.FLEMING SETTLE ATLANTA NASHVILLE BURDICK SINONS and CARRET NEW YORK FIELD SECRETARY DENVER EDUCATIONAL DIRECTOR an EVERETT GEORGE SPAULDING CHICAGO NEW YORK ARTHUR DAVIS CHICAGO DAVID DILLMAN CHICAGO - A.SOMOON R.MeLEAN STEWART NEW YORK - HACKETT BOSTON WINTHROP c. E-SULLIVAN CHICAGO NEW YORK MUNICIPAL SECRETARY SECRETARY past - LOWRY SWENEY COLUMBUS BALTINORE DUDLEY C SMITH CHICAGO ROBERT STEVENSON an 1 CHICAGO ALBERT #. THAYER PHILADELPHIA - MONNELD DALAHOMA ciff JOHN W. MATLING DETROIT MINNEAPOLIS ASSISTANT SECRETARIES JAY N-WHIPPLE LOUDON CHICAGO LINCOLN MARY R.LINCOLM CHICAGO DOROTHY A DUVAL CHICAGO JEAN C.WITTER - S.MARTIN SAN FRANCISCO NEW HAVEN PEARSON WINSLOW - NEW YORK - TORONTO ALEXANDER C.YARNALL PHILADELPHIA JOHN M.YOUNG NEW YORK OFFICE OF THE PRESIDENT BUHL BUILDING FROM DETROIT NEW YORK OFFICE 400 MADISON AVENUE April 24, 1941 NEW YORK CITY The Honorable Henry Morgenthau, Jr. Secretary of the Treasury Washington, D. C. My dear Mr. Secretary: I am enclosing some information that I have just received from one of our Canadian members regarding the third war loan which is now in the process of being "set up." I understand the amount is to be $600,000,000 and that the Minister of Finance of the Bank of Canada is working closely with the Canadian in- vestment bankers in making all preliminary arrangements for a campaign of a very broad nature. I am sending copies of this information to Mr. Bell, Mr. Graves, and Mr. Kuhn. Respectfully, Ay Emmott P. Connely President EFC:0 Enclosures P.S. I am enclosing an interesting Canadian stamp which car- ries a patriotic message along with it. Regraded Uclassified COPY 128 WOOD, GUNDY & COMPANY Limited 36 King Street West Toronto April 21, 1941 B. F. Connely, Esq., 400 Madison Avenue, New York, N. Y. Dear Mr. Connely, I am in receipt of your letter of April 17th and hoped to write you before this date, but have been awaiting more detailed information in relation to your question. However, this has not yet come to hand and we are not certain just when it will be dealt with. The position along broad lines is that the Canadian dealers are being used by the Government to set up the organization for the canvassing of the country for the War Loan in June. I am enclosing a preliminary report that was prepared in connection with setting up the general plan, a preliminary personnel bulletin and also preliminary statistical figures to give you an idea of the approach to the problem. Broadly, the question of raising the loan 1a divided into two categories - first, the general canvass and, second, the special names committee canvass. The latter covers all prospective subscribers in two classifications - (a) $25,000 and over, and (b) $5,000 to $25,000, and it 1s generally thought the special names will account for about half of the total loan. Broadly speaking, as you will 800 from the personnel chart, the dealers and the members of their organiza- tions are used throughout to organize the intensive canvass of the country. The actually canvassing in the smaller amounts is to be handled by a group of canvassers that will be selected by this organization and will receive 1/2 of 1% commission. This 1/2 of 1% commission will be paid on all subscriptions of $1,000 to $5,000, and on the amounts from $5,000 to $24,000 a pool will be formed which is allocated to the various divisions from which the subscriptions originate and acts as an extra incentive to the canvasser who may have been given a very poor district. The mittee, of which, you will notice, Mr. Gundy is the Chairman, and amounts from $25,000 up are under the Dominion Special Names Com- Regraded Uclassified 129 3. F. Connely, Req., - 2 April 21, 1941 this canvass is conducted almost entirely by the partners and senior members of the various dealer organizations. In practice, the Government virtually takes over the entire personnel of the dealer organizations, and men- bers of these organizations work aa individual members of the var- jous committees, or as organizers, and not in their capacity as firms. The firms, in turn, take care of the remuneration of their own employees, but the basis of remunerating the firms, as such, is being worked out by the Government. This basis has not yet been finally set, but it will probably be based on the histori- cal record of the performance of the firms in placing Dominion Government bonds over the past several years. As you know, deal- ers in Canada have always received a. commission from the Govern- ment in placing new Government issues, and therefore the Govern- ment has a complete record of the placing power of each house. I am sorry that I cannot give you any further detail on the method of payment, for the reason that it has not yet been decided upon. However, it 18 generally thought that by the middle of May, when the preliminary work will be reaching a peak, practically the entire personnel of all dealer organizations will be absorbed and, in any case, by June lst, when the actual canvass begins, everyone will be working in some capacity. The campaign will run for three weeks from June 1st and, of course, our market will be practically closed from May lst. In fact, for the past two weeks, there has been very little business, as all senior people have been engaged in setting up the huge organization necessary to make an intensive canvass. I realize that this information does not cover your requirements in the detailed manner which you desire, but perhaps after you have had an opportunity of going over it in a preliminary way, other questions will arise, and if you will let me know, I will be glad to try and answer them. I should add that the Ontario organization set-up, which is attached, will, of course, be duplicated in every Province of Canada by the local dealers in the Provinces. Yours sincerely, (signed) Hubert 1. Lofft aL.D line 130 March 18th, 1941. REPORT 011 PROPOSED HAR FINANCING The Working Committee was requested by the Dominion Executive (1) to consider the suitability of the 1919 plan for the new Loan, and (2) if that plan was considered suitable, to outline a typical Provincial organization which might be used in each Province with such modification in each case as local conditions seemed to require. Your Committee has reviewed the 1919 plan and is of the opinion that with slight modification the plan is practic- able and suitable to be used for the new Loan. The Committee proceeded to set up a typical Provincial organization, but after the initial investigation of the problem the Committee came to the conclusion that it would be necessary first to outline the Dominion organization. Aecordingly memoranda are attached hereto outlining the functions of the Committees listed, to comprise the organization under the super- vision and control of the Dominion Executive. These memoranda outline first the duties of the Committee for the Dominion, and then those of a typical Provincial Committee. They cover the following departments: 1. Organization and Distribution--with chart of the 1919 plan. 2. Administration and Finance. 3. Special Names. 4. Publicity. It will be noted that no Banking Committee is shown, but this was regarded as a sub-committee of Administration and Finance. A memorandum is attached covering the duties of the banking sub-committee. The committee has given some thought to the general market on all securities during the campaign for the new Loan and migrests that the Dominion Executive should give consideration to the problem, end recommends that a special committes be appointed to deal with the subject and report to the Executive. Regraded Uclassified 131 2 The Committee considered it desirable that a system of objectives for each Province should be adopted as a stimulus to the sales effort. A memorandum is attached outlining the data that would be useful as a guide in fixing the objectives for the various Provinces of the Dominion. The Working Committee also considered that it would be of assistance to the Dominion Executive to have a time schedule drawn up for the Dominion organization and a rough draft is submitted herewith. At this stage of the effort this is neces- sarily sketchy and incomplete, but it does emphasize the necessity of establishing the form of the organization, the choosing of chairmen and vice-chairmen, 50 that the work may be proceeded with as promptly as possible. The Committee cannot emphasize too strongly the magnitude of the task confronting the whole organi- zation, and therefore urges that the initial steps to set it in motion be undertaken at the earliest possible moment. 132 March 18th, 1941. MEMORANDUM ORGANIZATION AND DISTRIBUTION This briof is predicated on the fact that the plan to be used for the forthcoming Loan follows the plan used in the 1919 Victory Loan. This Committee has been instructed to prepare the outline of the functions and duties of the organization and Distribut- ion Committee. In order to clarify what follows, we think it advisable to give a briof outline of the whole set-up, starting with the National Chairman and National Vice-Chairman, who in turn is the Chairmen of the National Executive Committee. There would then bo formed a National Committee composed of various prom- inent Canadians, and then a National Executive Committee which really constitutos the senior Working Committee. This National Exceutivo Committee would be sub-divided into the following Committoes: (1) Organization and Distribution (2) Special Names (3) Publicity (4) Administration and Finance (5) Banking The functions of the Committees on Publicity, Administration and Finance, and Special Names are being dealt with by separato groups and, therefore, we are confining our discussion solely to Organization and Distribution, The Dominion Organization and Distribution Committee would be composed of a Chairman, Vice-Chairman, Socretary, the nine Provincial Chairmon of the Sales Organization Committees and four other members. This Committee would be responsible for proparing details of retail sales, which would include general instructions re type of canvasser personnel; sales literature, that is to sey, literature which would be sont to organizers and convassors; close co-operation with Publicity Committee; remuner- Regraded Uclassified, 133 - 2 - ation to canvassors; to act as intermediary between the Provinc- 1al Chairmon-regarding sales idoas; time table; salos instruct- ions to divisional organizors; salos instructions to canvassors; instructions regarding industrial employees' canvass. The activo administration of the Organization and Distri- bution Committee, in our opinion, is more of a direct Provincial responsibility than a Dominion responsibility. Therefore, we are endoevouring to outline the actual set-up of a Provincial organization which would apply to all Provinces in Canada subject, of course, to nocessary changes to meet local conditions, This would be heeded by a Provincial Executive Committee con- sisting of & Chairman, Vico-Chairman, Sccretary, Chairmen of the various Provincial Committees, and B. group representing one from each of the following catogories: finance, industry, labour, clorgy, and the Provincial War Savings Committee. The Ontario Executivo Committee would appoint the following Committees: (1) Organization and Distribution (2) Special Names (3) Employees (4) Publicity (5) Administration and Finance The Provincial Organization and Distribution Committee would be headed by a Chairman, a Vice-Chairman, a Secretary and five other mombers, the function of the remaining members of the Committee being to act as a direct contact between the Chairman and the divisional organizers. The Province would be divided into soctions, known as "divisions", under the supervision of divisional organizers. Each division would in turn be divided geographically by counties in accordance to population, the exception to be in the case of large urban contres such as, in Ontario, Toronto, Ottawa, Hamilton Regraded Uclassified 134 - 3 - and London, which would be organized along the same lines as a division. Each county, reforred to as a "mit", to be or- ganized by eithor one or two bond men, depending on the size and population. The first duty of the unit organizer will be to nominate a Chairman. They together will appoint a Vice-Chairman and a paid Secretary and will select suitable premises for the Loan headquarters. An Honorary Chairman will be selected to head a Committee consisting of loading citizens in the com- munity. The organizer, Chairman and Vice-Chairman will then decido and set up local unit committees such as Publicity, Employees if required, a Womon's Committee, etc. The organizer, Chairman and Vico-Chairman, together with such mombers as they feel are required from the Honorary Com- mittee, will noxt appoint the necessary number of full timo paid canvassers to adequately cover the territory. The likely procedure will be that the "unit" will be sub- divided in the rural centres by townships and in the urban contros by political sub-divisions, commonly referred to as "wards". The duty of the canvassors will be to solicit subscript- ions to the Loan from investors. This will rosult in a house to house canvass. In other words, the responsibility of actually getting tho subscription rests with the canvasser, exclusive, of course, of exempted names. This follows in general the plan used in 1919, although this Committee has made several changes both in regards to the elimination of cortain committoes which wore felt are super- fluous and the addition of cortain committees which it was folt were necessary. Regraded Uclassified 135 March 18th, 1941. OBJECTIVES 1. Dominion Executive will come to agroement with Dominion Government as to amount of monoy to be asked for, 2. Dominion Executive will then divide this total between Special Namos and Genoral Canvass. 3. Spocial Names Committee will then sub-divido thoir subscription objective between Provinces. 4. Organization and Distribution Committee will sub-divide the general Canvass objective between provinces. 5. Provincial Committees will then allocate the Provincial objectivos to the various units. 6. As a guide to a fair allocation of Provincial object- ives wo suggest obtaining the following information: A. Objoctives by Provinces of 1917, 1918 and 1919 Victory Loans and rosults obtained. B. Rosults by Provinces of First and Second War Loans. C. Population figures, urban and rural. D. Incomo tax payments by Provinces. E. National income figures by Provinces. F.. Bank deposit figuros by Provinces if obtainable from Bankors' Association. 136 March 18th, 1941. DOMINION ADMINISTRATION AND FINANCE COMMUTTEE MEMORANDUM FOR DOMINION EXECUTIVE COMMITTEE Attached you will find a momorandum which wo suggest bo used as a guido in the creation and oporation of an organization serving the same rolo as the so-called Administration and Finance Committee of the 1919 Loan. Minute dotails have boon avoided in order to conform to the desire for brovity in outlino requested at this time. No special momorandum has boon prepared for Provincial Committoos on Administration and Finance as their dutios will follow vory closely those of the Dominion Com- mittoe. It is suggested, however, that the personnel of each Provincial Committoe be as follows: Chairman Vice-Chairman Treasurer Secretary Committee Mombers (ono of whom will bo a liaison link with tho Banking Sub- Committos) It is recommended that the soloction of members of tho Dominion and Provincial Committees on Administration and Financo be confined to"professionals", 1.0., those exporienced in organization, banking, deliveries, records, etc. 137 March 18th, 1941. MEMORAHDUM DOMINION ADMINISTRATION AND FINANCE COMMITTEE PERSONNEL Chairman - Mr. Arthur F. White Vico-Chairman - Tronsuror - Socretary - Committoe Members: (It is suggosted that Chairmen of Administration and Financo Provincial Committoos be members of the Dominion Committoo plus such other members as the Chairman may dosignato.) FUNCTIONS 1. Forms: (a) Proparation of all standard forms exclusive of thoso of puroly banking nature. (b) Issuo instructions to Provincos ro purchase and distribution of stationory, matorials and supplios, (c) Purchase and distribute supplics which may advantagoously be purchased in bulk. (d) Ordor such printed matter as may be requis- itioned by all committoes exclusive of the Publicity Committee. (It is suggested that in many cases printing should be done locally 08 por specimons submittod.) (e) Issuo a booklet of instructions covering the uso of all forms. 2, Administration: (a) Write to Provincial Chairmon asking then to procoed immodiately with the acquisition and equipment of Provincial hoadquarters. When possible, cover general requirements in this regard by porsonal convorsations. Ask Pro- vincial Chairman for an estimate of his financial re uiromonts to cover initial or- ganization, pending proparation and approval of Provincial budgets. (b) Establish uniform mothods of keeping all records throughout the whole of Canada. Advise all committoos as to what records are required Regraded Uclassified 138 - 2 - (c) Rocoivo and tabulato all roturns from Prov- incial Committoos, (1) Progross roports - basod on timo schodule (2) Daily salos roports Establish a system of vigorously checking whon reports aro dolinquent (d) Propare reports summarizing all Provincial roturns for the use of the Dominion Executive Committee. 3. Finance: (a) Establish a comprehensivo system of book- koeping and auditing. Issue general instruct- ions as to the methods to be followed, par- ticularly so that receipts and exponditures shall- be made to conform with the system adopted by the Forms Division of this Committee. (b)Receive, exomino and amend, when necessary, provincial budgets. When provincial budgets conform with this Committoc's idoas then a budget for the Dominion as a whole will be prepared based on those provincial budgets plus Dominion headquarters' requirements. (c) Issue instructions as to the authorization and supervision of expenses in detail. (d) Provide a system for the remuneration of canvassers. (o) At the closs of the Loan submit a final audited statement to the Executive Committee oummarizing all receipts and expenditures in adequate detail. Regraded Uclassified 139 MEMORANDUM March 18th, 1941. BANKING COMMITTEE The Banking Committee, in accordance with the view of the general committes to adopt the 1919 plan for the new issue, has given consideration to its position in the general organization. Briefly, its members feel that the banking procedure set up in 1919 is applicable with slight modification where changed conditions require it, and regard the duties of the Banking Committee in the general organization to be the following: (1) To arrange the procedure to be followed by the branches in dealing with the Bank of Canada. (2) To arrange the procedure to be followed by the branches in handling applications from subscribers, receiving payment therefor and making deliveries; to devise a standard system of records for branch banks and to set up the procedure to be followed in advising the local Committee of the total of subscriptions received by the branches direct from subscribers. The Committee intends to draft two general letters of instructions to branch managers--one setting out a standard system of bookkeeping and records for branches, and the other a general letter of instructions to branch managers dealing with various matters in connection with the new Loan on which they should be informed. Before this can be done, however, certain points must be determined by the Bank of Canada and the Dominion Executive. These are listed below: Bank of Canada: 1. Will defintive bonds be available at the branch banks at the commencement of the campaign for delivery to sub- scribers who pay in full? If no, at what date during the campaign will bonds be supplied to branches? This has been discussed with the Secretary of the Bank, who promises an answer within the next day or two. Regraded Uclassified 140 - 2 - 2, Will the branch banks be expected to register bonds as to principal? This also has been discussed with the Secretary, who promises an answer within a week. If this work 16 done by the banks full instructions as to forms of registra- tion will be required from the Bank of Canada, 5. How will applications for fully registered bonds be handled? This was also discussed and it was considered that the 1919 procedure would apply subject to such variation as may be necessary due to the present position of the Bank of Canada as fiscal agents for the Government as compared with the Department of Finance in 1919. 4. If the official terms of payment for the Loan permit payment by instalments as in 1919, how will these be handled? A simple system of records was discussed with the Secretary, on which his decision is to be given later. Dominion Executive Committee: 1. Will the franking privilege be granted on letters dealing with the new Loan between the banks, the Bank of Canada and the official committees? This was granted in 1919. 2, Will bonds be issued at a flat price free of accrued interest during the campaign? In the opinion of your Committee this was most desirable for the satisfaction of subscribers and for smooth working of the deliveries. 3. Will the subscriber be given the option of paying in full at the outset for his subscription or of making an initial payment on account and spreading the balance by instalments over B. period and at intervals fixed by the prospectus. In 1919 the instalments were at monthly intervals extending over four months. Seven days of 141 - 3 - grace without interest were permitted subscribers on instalments. In 1919 there were two instalment plans as follows: (a) at the official terms, which subscriptions the banks handled for account of the Government. (b) More generous instalment terms (nine months) were granted to subscribers for amounts up to $500. These were handled by the subscriber making an agreement with the Bank (the so-called card form) in which he paid 10% in cash and agreed to pay the balance in nine monthly pay- ments of 10% each. The bonds for such subscri- ptions were paid for and taken up by the banks, who delivered the relative bonds to the subscriber when he completed his payments. The possible effects of this plan on the War Savings scheme is a factor to which the Executive Committee should give most careful considera- tion. The Committee should be informed as to the Executivo's decision on these points. As well, the Committee believes that for the smooth working of the Loan they should have an opportunity of scrutinizing the application form bofore it is finalized, and of passing on any instructions issued by the general organization to local committees, canvassers or others which affect the banks. They should ba asked also to co-oporate with the Bank of Canada and the Business Committee in the drafting and preparation of the forms which the banks will have to use in the handling of the Loan, advising total subscriptions, particulars of registration, instalment payments, etc. Regraded Uclassified 142 MEMORANDUM DOMINION SPECIAL NAMES COMMITTEE The Dominion Special Names Committee should at least have as members ex-officio the chairmen end/or vice- chairmen of the various Provincial Special Names Committees. Its duties will be: 1. To set the national special names objective. 2. To allocate the pro-rate amount of the Dominion objective to the various Provincial committees. 3. To determine what method will be followed in allocating the subscriptions of national corporations. 4. To determine whether similar action will have to be taken in connection with the allocation of subscriptions of any individuals. (It is suggested that subscriptions be credited to the district in which they are received). 5. To prepare 8. formula for the Provincial Com- mittees outlining the bases on which they be- lieve names should be selected for the special list by the Provincial committees. (It 18 suggested that any corporation or indivi- dual which in the opinion of the provincial committee can buy 25,000 or more should be placed on the special names list). 6. To organize, supervise and assist with the work of the provincial committees. 7. To set up an organization to cover the American market when, as and if, the Dominion Executive Loan Committee can arrange for the issue to be offered in the United States, or, failing this, should make arrangements for the coverage of United States investors by offering them blocks of issues outstanding prior to the outbreak of Regraded Uclassified 143 - 2 - war, where such purchases by Americans would free funds in Canada for the purchase of ad- ditional blocks of the new issue by Canadians. Close liaison should be maintained between this committee and the various provincial special names committees whero American branch plants or subsidiary Canadian companies are concerned. 144 PROVINCIAL SPECIAL NAMES COMMITTEES 1. Provincial Special Names Committees should consist of: Chairman Vice-Cheirman Secretary all of whom may be professionale. The Chairmen should ex- officio be a member of the Dominion Special Names Committee. The Provincial Committee should consist of at least one professional member if possible from sach provincial division, and such other members as may be deemed advisable. 2. There should also be an executive committee. 3. Each divisional special names representative on the provincial committee shall in turn create a divisional special names committee for his division, including prominent citizens in his area. 4. The provincial committee shall prepare a list of names to be covered by the various district committees. The names on this list would be compiled in accordance with the formula prescribed by the national committee. The provincial committee would also have power to add names to such list, or delete names from the list. 5. The provincial committee should allot the objectives for the various divisions. 6. The provincial committee will co-operate with the divisional chairmen in each section in selecting the necessary personnel for the canvassing of the names in his district, 7. The provincial committee shall as early 88 possible sub- mit to the district organizers a tentative list of special names in the district. The divisional organizer will be responsible, in co-operation with his county organizers and committees, for the careful revision and expansion of this list. As soon 85 possible this revised list should be returned to the provincial chairman for final approval, after which it shall become the Regraded Uclassified 145 - 2 - final special subscription list for the district. It is suggested that in the preparation of the list of names and their follow up a suitable card system shall be used. 8. The divisional special names committees should report daily to the provincial special names committee all orders received. The provincial committee would in turn report daily to the national committee. 9. We cannot emphasize too much the necessity for the immediate compilation of the special names list and quotas. This work will require an immense amount of work and should be proceeded with forthwith by the Provincial Special Names Chairman aided by representatives of each district working on the list in his district. 146 MEMORANDUM PUBLICITY COMMITTEE COMPOSITION: (a) Chairman (b) Two Vice-Chairmon. One in charge of French Section. (c) Press lieison member (d) Advertising liaison member (e) Radio liaison member (f) Motion Picture liaison member EXECUTIVE (g) Public speakers liaison member (h) Service Forces lieison member (1) Representatives of the Department of ( Propaganda and Information Competent Secretariat ( (j) Add A. L. Cawthorn-Page to Committee. ADVISORY The Chairmen of Provincial committees on Publicity. The Dominion Chairman will have power to add to his Committee. DUTIES The duties of the Dominion Publicity Committee are sketched in broad lines hereunder. (a) Selection of an appropriate title and slogan for the loan. (b) Investigation of publicity media, their relative importance and suitability. (c) Preparation of the publicity budget (special care required here). (d) Time-table co-ordination of publicity, and budgetary control of expenditure. (e) Co-operation with the various Government publicity agencies. (This is considered of vital importance and will require a scrupulous attention) (f) The making of arrangements for the distribution of publicity through the Provincial Publicity Committees. (8) The approval and distribution of circulars. (h) And such other duties as the Executive Committee may delegate. Responsibility for publicity in their territories should rest with the respective Provincial Publicity Committees, which should be organized on roughly similar lines to those of the Dominion Publicity Committee. The following essential points should, however, be carefully noted: Regraded Uclassified 147 - 2 - (a) The chairman of each Provincial Publicity Committee should be a member of the Provincial Committee and, if possible, sit on the Executive. (b) A special member of the committee should be given the responsibility of making all arrangements for public speakers. (c) Another member of the Committee should have the responsibility of press lisison work. In large cities this would require a full- time employee. DUTIES OF THE PROV- INCIAL PUBLICITY COMMITTEES: These duties are outlined below: (a) Carrying out the publicity campaigns decided upon by the Dominion Committee. (b) Making reports on local requirements to the Dominion Committee. (c) Submitting suggestions to the Dominion Committee. (d) Arranging for the distribution of all publicity material through the divisional district and county organizations. In the more important counties there should be a full-time secretary in charge of the supply and distribution of publicity material. There should be created county publicity committees. 148 (2) (Preliminary Personnel Bulletin) DOMINION WAR LOAN ORGANIZATION 1941, Dominion for Loan Headquarters - 240 Wellington Street, Ottawa. Day Telephone 2-6494 Night Telephone 5-5560 EXECUTIVE COMMITTEE: Chairman - G. W. Spinney Montreal Secretary - G. E. Phipps Toranto. H. E. Cochran Toronto John Knox Timmins A. J. Nesbitt Montreal I. W, Killem Montreal A. F. White Toronto John A. Rowland Toronto J. H. Gundy Toronto Ralph D. Baker Winnipeg C. H. Branchaud Montreal W. I. Macdougall Halifax C. E. Gravel Montreal B. H. Tanner Calgary H. R. Tudhope Toronto W. M. Houston Regina E. A. Macnutt Montreal F. J. Brennan Saint John A. N. Mitchell Toronto H. M. E. Evens Edmonton D. I. McLeod Toronto G. Lyall Fraser Vancouver H. T. Jaffray Toronto 1. H. V. Dunbar Charlottetown Arthur Cross Montreal ORGANIZATION AND DISTRIBUTION Chairman - H. E. Cochran Vice-Chairman - L. G. Mills Secretary - B. H. Mason John Knox A. S. Torrey W. T. K. Collier C. P, Fell Chairmen of Provincial Organization and Dis- tribution Committees. ADMINISTRATION AND FINANCE: Chairman - A. F. White Vice-Chairman - S. B. Hammond Secretary J. S. Bolton - Vice-Chairman of Provincial AdmInistration and - C. E. Jolly Finance Committees. BANKING COMMITTEE: Chairman - H. T. Jaffray J. S. Bolton T. H. Atkinson T. F. B. Walker H. J. Coon and the General Managers of the chartered banks SPECIAL NAMES: Chairmen - J. H. Gundy Secretary - R. A. Daly PUBLICITY: Chairman I D. J McLeod Secretary # D. B. Ding'n H. N. Bawden i. C. Howard Court Elliots Punl Laroque Harold Fry Ex-Officio A. D. Cobban (Chairman, Ontario Publicity Committee) - 7. D. Chapman S. McNichols ( Chairmen, Quebec Publicity Comittee). A. Carl C. Hall (Western Liaison Representative) C. Leslie Peters (Maritime Liaison Representative). Regraded Uclassified 149 (4) April 4th,1941 ONTARIO ORGANIZATION PERSONNEL BLUE LETIN DOMINION HAR LOAN ORGANIZATION 1941 OUTLRIO HEADQUARTERS. - 48 King Street West, Toronto, Telephone - Waverly 7021 ONTARIO EXECUTIVE COMMITTEE: L. 3. Arscott Chairman Canadian Bank of Commerce 25 King Street West, Toronto Ma.6751 H. & Tudhope Vice-Chairman A. E. Ames & Co. Ltd 520 Bay Street, Toronto Wa.5611 1. 1. G. Backett Secretary Mills, Spence & Co. Ltd., 25 King Street West, Toronto 21.1541 ATHISTRATION & FINANCE COMMITTEE C. E. libba Chairman A. E. Ames & Co., Ltd., 520 Bay Street, Toronto Wa,3611 V. 1. Vance Vice-Chairman A. E. Axee & Co. Ltd. 320 Bay Street, Toronto Wa.5611 E. Gordon Wills Treasurer Wills, Rickle & Co., 25 King Street West, Toronto Ma.4561 1, 1. McKinnon Secretary W. L. McKinnon & Co., 205 McKinnon Building, Toronto E1,4429 C. 7. Fleeing Dominion Securities Corpn. Ltd. INPUITERS' COMMITTEE 15 King Street West, Toronto Wa,3681 1. has Fraser Joint Chairman Dominion Securities Corpn. Ltd. 15 King Street West, Toronto Wa.5681 :. F. M. Stowart Joint Chairman J. ?. M. Stewart & Co. Ltd., Royal Bank Building, Toronto E1.8553 d. G. Roberts Vice-Chairman Dominion Securities Corpn. Ltd., 15 King Street West, Toronto Wa.3681 :, D. Wood Secretary A. E. Ames & Co. Ltd., 320 Bay Street, Toronto Wa.5611 L, J. Holmes Thomson & McKinnon 25 King Street West, Toronto Ad.8581 D. D. Maclood Aird, Maclood & Co., 405 Royal Bank Building, Toronto Ad.9481 in Macrao Macree & Co., 80 King Street, Rest, Toronto E1.3374 J, S. Dickson Dickson, Jolliffe & Co. 80 King Street West, Toronto Ad.7451 ORGANIZATION & DISTRIBUTION COMMITTEE N. P. Scott Chairman Wood, Gundy & Co. Ltd., 36 King Street West, Toronto E1.4521 1. H. Ratcliffe Vice-Chairman McLood, Young, Weir & Co. Ltd., Metropolitan Building, Toronto K1.0161 J, G. Singer Vice-Chairman Royal Securities Corpo. Ltd. 350 Bay Street, Toronto Ad.1704 1, M. Ramay Secretary Harris, RAMARY & Co. Ltd., 255 Bay Street, Toronto £1.4106 %, L. McKinnon Chairman of the Sub-Committee on Time Schedules, Objectives, B. L. McKinnon & Co., Standard Forms & Bulletins. 205 McKinnon Building, Toronto £1.4429 PUBLICITY COMMITTEE A. D, Cobban Chairman hood, Gundy & Co. Ltd., 56 King Street West, Toronto E1.4521 J. 4, Walker Vice-Chairnan Dominion Securities Corpo. Ltd., 15 King Street West, Toronto Ma,5681 1. P, Walwyn Secretary R. A. Daly & Co. Ltd., BO King Street West, Toronto 51,4441 4. Barrison Gilmour Neabitt, Thomson & Co. Ltd., se King Street West, Toronto 31.6146 SPECIAL NAMES COMMITTEE é - Iomag watteen McLeod, Young, Reir & Co. Ltd., Metropolitan Building, Toronto K1.0161 E, F. Couinlock Vice-Chricalin Roll, Gouinlock & Co, Ltd., 25 King Street West, Toronto E1.2256 J. P. Crysdale Secretary Gairdner & Co. Ltd., 520 Bay Street, Toronto E1,2501 Regraded Uclassified 150 PERSONNEL TORONTO ORGANIZATION April 3rd,1941 DOMINION WAR LOAN ORGANIZATION - 1947, TORCETO EXECUTIVE COMMITTEE TORONTO HEADQUARTERS - 244-246 BAT STREET, TORONTO. Address Telephone 1. G. Beker 3 - Moore Corp. Ltd. Joint Chairmen AD. 2381 J. I. Mitchell - Dominion Securities Corp. L. M. Pringle Joint WA. 5681 Vice-Chairsen - Dominion Securities Corp. WA. 3881 E. D. Leening - A. E. Ames & Co. Ltd. 4. E. Secretary WA. 5611 - - C. H. Durgess & Co. K. 6471 ADMINISTRATION & FINANCE 1. 8. McRee Chairman - Duncanson, White & Co. NA, 5401 7. 1. Inderson Vice-Chairman - 4. 2. Amen & Co. Ltd. WA. 3611 ORGANIZATION & DISTRIBUTION E. 8. Houseer Chairman - H. B. Houseer & Co. n. 7195 Trevor 7. Moore Vice-Chairman - McLeod, Young, Weir & Co. Ltd. n. 0161 S. B. Heath Secretary - R. A. Daly & Co. Ltd. E. 4441 DIVISION A 1. L. Anderson Chairman - Dyment, Anderson & Co. AD. 8105 L. 7. Webster Vice-Chairman - Beatty, Webster & Co. WA. 4577 0. L. Jemison Vice-Chairman - Playfair & Co. AD. 6001 DIVISION #2 As Fairclough Chairman - Fairclough & Co. AD. 6191 1. Hunter Vice-Chnirman - Collier, Norris & Handerson NA. 2984 1. N. Bryson Vice-Chairman - R.N. Bryson & Co. WA. 1688 DIVISION 13. 1. G. Malcolm Chairman - A. E. Ames & Go, Ltd. WA. 5611 8, P. Spragge Vice-Chairman - A. E. Amos & Co. Ltd. NA. 8611 F. 0. Brans Vice-Chairman - McLeod, Young, Weir & Co. Ltd. KL. 0161 DIVISION is 4. Beairsto Chairman - R. A. Daly Co. Ltd. EL. 4441 Separar Trent Vice-Chairman - Hambly, Peaker & Trent KL. 5293 Doug. Huycke Vice-Chairman - J, S. Bache & Co. WA. 4871 DIVISION #5 J. R. Meggeson Chairman - J. H. Meggason & Co. E. 6448 Geo. Rose Vice-Chairman - Goulding, Rose & Co. NA. 8687 Geo. Meech Vice-Chairman - Aird, Macleod & Co. AD, 9481 DIVISION #5 S.B. Denton Chairman - Cochran, Murray & Co. AD. 9161 1, Travise Vice-Chairman - Travise, Scholfield & Co. ma. BO98 F. J. Phalen Vice-Chairman - H. B. Housser & Co. n. 7195 DIVISION 87 P. 4. Esener Chairman Midland Securities Corp. AD. 1585 C. c, Deaks Vice-Chrirman - Fraser, Dingman & Co. n. 5125 SPECIAL NAMES COMMITTEE form Orquhart - 1. c. Orqubart & Co. AD. 6026 Chairman 1, 4. McCausland Secretary - Wood, Gundy & Co. Ltd. EL. 4321 4 Mirray Vice-Chairasn - Cochran, Marray & Co. AD. 9161 UNITED SPECIAL NAMES EXECUTIVE COMMITTEE I, Candy - wood, Gundy & Co, Ltd. n. 4822 2, Loung - McLeod, Young, Weir a Co. Ltd. EL. 0162 V. Gouinlock - Bell Gouinlock & Co. Ltd. EL. 2256 Gairdner - Gairdner & Co. KL. 2501 J. Milner - Mills, Spance & Co. Ltd. KL. 1841 c, Harris - Harris, Bansay & Co. Ltd. EL. 4106 Regraded Uclassified 151 HAR LOAD ORGANIZATION (6) PROVINCE OF ONTARIO ORGANIZATION AND DISTRIBUTION COMPANY 1. P. Scott. Chairman Rood, Gundy & Co. Ltd., 56 King Street Mest, Toronto, Vice-Obairuan n. 4321 1. 2. Ratcliffe McLood, Young, Moir & Co. us. Netropolitan Building, Toronto Vice-Chairwan n. 0161 J.0. Singer Royal Securities Corps. Ltd. 550 Bay Street, Toronto M. 7106 1. K. Rassay Secretary Barris, Ramsy à Co. 1Ad. 255 Bay Street, Toronto El. 41.06 1. L. McKinnon Chairman, Committee on Time Schedules, Objectives, 8. L. McKinnon & Co. Standard Forms & Bulletins 205 McKinnon Building, Toronto n. 4429 livision Name of Address of Telephone Divisional Organiser Divisional Organizer Number I J. B. Ridley A.E. Amos & Co. Ltd., 320 Bay Street, Toronto Ma. 5611 2 R. N. Lealie Royal Securities Corpn. Ltd., 1 Main Street East, Bumilton,Ont 2-2429 5 4. G. A. Spence Mills, Spence & Co. Ltd. 25 King Street West, Toronto Ki. 1341 4 If. J. McLelland Wood, Gendy & Co. Ltd., 56 King Street Rost, Toronto n. 4521 4 L. P. Chalmers W. C. Pitfield & Co. Ltd., 80 King Street, West, Toronto M. 6144 5 D. B. Waldon Midiand Securities Ltd. Metcalfe Huron and Erie Mdg. London, Ont, 4500 5 H. S. Backus McZeod, Young, Weir & Co. Ltd., Metropolitan Building, Toronto El. 0161 a T. P.. Harrison Harrison & Co. Ltd., 66 King Street West, Toronto M. 1891 7 S. A. Hugbes Dominion Securities Corpa. Ltd., 15 King Street, Most, Toronto h. 8662 8 0. A. Dohorty Gairdner & Co. Ltd., 520 Bay Street, Toronto n. 2501 9 J, L. Graham J. L. Grabam & Co. Ltd., 25 King Street West, Toronto M. 4411 10 A. R. Booths Bell, Gouinlock & Co, Ltd., 25 King Street Heat, Toronto n. 2256 11 c. H. Burgess c, E. Durgoso & Co. Ltd., 255 Bay Street, Toronto Kl. 6471 11 8. L. McGinnis c. H. Burgens & Co. Ltd., 255 Bay Street, Toronto n. 8471 11 C. G. Beatty Beatty, Mobetor & Co. Ltd., 217 Bay Street, Toronto M. 4577 12 J. 8. Brown Milnor, Ross & Co., 550 Bay Street, Toronto M. 1701 18 N. D. Young Dominion Securities Corpn. Ltd. Walper House, Kitchener, Ont. 7-7004 14 1. T. Bartlett Bartlott, Cayley & Co. Ltd., 520 Bey Street, Toronto Ms. 6051 15 J. D. Highes A. E. Ames è Co. Ltd., 52 New Bank of Toronto Hidge, Matcalfs London, Cnt. 7019 18 1. N. Willar Bankers Bond Co. Ltd., 67 Yonge Street, Toronto M. 6267 29 c. L. McCutcheon Wood, Gundy & Co. Ltd., 86 King Street West, Toronto n. 4321 is D. M. Roberts McLeod, Yours, Weir a Co. Ltd., Matropolitan Duilding, Toronto n. 0161 The Torouto Organisation to dirtinet and separate from the Ontario Organisation. 1 I. N. Pringle Dominion Securities Corpe. Ltd. 15 King Street Nost, Toronto In. 8681 & I. D. Lawsing & & Ames & Do. IAd., ERO BAT Street, Toronto a. 5611 Regraded Uclassified 152 far Loan 1941. Ontario Organization & Distribution Committee. April 9tb, 1941, PLAN OF DUTIES AND FUNCTIONS OF DIVISIONAL ORGANIZERS for the purpose of organisation, Ontario, outside the City of Toronto, has been divided into 17 divisions of which four cities comprise four units, the balance covering counties and other sub- divisions. This is outlined in the plan of organization. A chart showing the Divisional Organizers position in Ontario plan is attached and indicates, in a general say, his position insofar as the Provincial set-up is concerned and his responsibility insofar 68 his units go. GENERAL DUTIES: Speaking generally, the duties of a Divisional Organizer are to act - (1) As General Supervisor working through the Unit Organizers, of all activities within his division. (2) To advise, and assist if necessary, in the setting up of Unit Organizations. (3) As the lisison between the Ontario Standing Committees and the Units comprising his division. It should be borne in mind that it is not in the interest of best results to restrict the authority of the Unit Organizers and their local executive. Only when faults appear in the organization which require correction should the divisional organizer take direct action. HEADQUARTERS: The Divisional Organizers, outside the cities, will have no specific headquarters as such, but my use the headquarters of any unit in his division and for the purpose of mailing etc., have his forwarding address attached to the headquarters of one unit. The question of headquarters etc., for City Organizations will be more specifically dealt with under "City Divisions." ORGANIZATION: Each Divisional Organiser will have associated with him an Organizer and Assistant Organizer in-each unit comprising his division. In some cases it is necessary to have Joint Organizers and/or two Assistant Organisers. The Divisional Organiser 1s 6 mumber, ex officio, of the Ontario Organization Committee and 1s also a member, ex officio, of every Committee in his territory. The duties of the Divisional Organizers, up to the date of the Organizers Conference, are to be largely concerned with being fully conversant with the geographical and other aspects of his units, straightening out any question of boundaries, etc., having full discussions with each organizer in his division, in order that each organiser and Ms assistant my fully acquaint them- selves, in e. general way, with their duties, when they go out in the territory. This will be more, specifically dealt with at the Organisers Conference and by means of nemoranda given to the organizers at that time. Regraded Uclassified 153 Plan of Dutiee and Functions of Divisional Organizers. ORGANIZATION - Cont'd. In addition, and porhaps the most important duty to be per- formed by the Divisional Organizer in the early stages, 18 that of going over with the organizera in each unit, the list of Special Names handed them by the Special Names Committee for the purpose of aliminating, as for on it can be done short of actual checking in the territory, all those perties who should not be on this list, also mking any possible additions. SUFERVISION: The Divisional Organizers will be responsible for obtaining supe for each individual unit in his division, together with statis- tical information with regard to breakdown of assessments and popu- lotion in each Unit. He should also hand each Unit Organizer a list of the banks in his territory, their location and the name of the manager. After the general Organisers Conference has been held and prior to the organizers leaving for their territory, it is essential that the Divisional Organizer hold 4. seating with his organizers to discuss with them a schedule na to the initiation of their work in their territory and his presence with them in the early stages. This is particularly important in the light of the Unit Organiser's first duty when be reaches the territory, numaly the work incidental to the seloction of 4. chairman, and to a lesner extent, the chaireen of his committees. It is essential, when a Unit Organizer makes his first investigation, that be communicate with the Divisional Organizer and check with him, either in person, or otherwise, as to his choice of chairman, before having this recomendation passed on to the Provincial Organization Committee. As the appointment of the Unit Chairman in a vital factor in the campaign, too much stress cannot be placed on the care with which these chairmen are chosen. He will also act in on advisory any with the Unit Organizers in the breakdown of their unit team objective into canvarsing district objectives. It is anticipated that the canvassers conference will take place around the fourth week in May, prior to the start of the campaign, and here again the Divisional Organiser should be in con- stant consultation with his organizers BE to the methods of procedure and the necessary steps to be taken to arrange for a full canvassers conference. This canvassers conference should take place in esch unit and in such a may that the Divisional Organizer my be present and intimately supervise each of these conferences, Once the Unit Committees have been appointed, it in desirable that the Divisional Organiser sit in, as often as convenient, on the meetings of his Unit Executive Committees. The Divisional Organizer should (amiliarize himself with the time schedule, and should see that Unit Organizers complete their Organization on time. CAMPAIGN: During the campaign the Divisional Organizer will make it a point to be in frequent touch with his units to iron out any diffi- culties that any develop, to see that the various committees are functioning and particularly to ame that the Special Names are getting every possible attention. Regraded Uclassified 154 - 3 - Plan of Duties and Functions of Divisional Organizers. CITY DIVISIONS: When supervising one unit such as a large city, the Divisional Organiser will combine the function of Divisional and Unit Organizer. The set-up of these city organizations is the same as in the unit, except on & much larger scale. REPORTS, etc. The Divisional Organiser will receive copies of all correspondence including reports which are sent out to Unit Headquarters in his division from Ontario Headquarters and the various committees. He will also receive copies of all correspondence in- cluding daily reports, etc., between the Unit Headquarters and Provincial and Committee Headquarters. The Divisional Organizer should weekly advise the Secretary of the Ontario Organization and Distribution Committee at 48 King Street West, Toronto, and also each Unit in his Territory his proposed itinerary, giving his mailing address so that his mail may be forwarded to reach him where he will be from time to time. JGS/VG Regraded Uclassified 155 (6) LAP Lean 1941. April ONTARIO ORGANIZATION AND DISTRIBUTION COMMITTEE (Prelininary) UNIT ORGANIZERS THE PLAN OF ORGANIZATIO The plan of organization for the 1941 Victory Loan had 110 origin in the Victory Loan campaigns of 1617, 1818 and 1918, It has been modified and streamlined to meet present-day conditions. It is felt that & similar method of appeal to that which brought forth an overwhelming response twenty years ago can be counted on to produce a similar result now, provided the whole sales organization is cerefully trained in its duties in advance of the campaign and 1a enthusiastic 08 to the outcome. It must be recognised at the outset that this campaign 10 to be an "all out effort". Every corporation and individual financially onpable of buying bonds has to be interviewed and sold to the full extent of buying capacity. The campaign in each province will be in charge of an Executive Committee which will be responsible for the policy to be followed. This Committee will appoint such other Provincial committees 85 are necessary, details of which are designated elasshere. Each province will be divided into a number of divisions for or- ganisation purposes. Each division will be comprised of either ono large city or of several units, the latter coinciding with counties or parts of counties or districts, Each division will be under the direction of a Divisional Organizer who will have sasociated with his one or sore organi- zera for each unit in his division. ORGANIZATION: Unit organisers shall be members BE officio of every committee in their respective territories. The first duty of a Unit Organizer upon reaching his territory vill be to select a Unit Chairman, The selection of Non proper Unit Chairman is the most important task confronting the Unit Or- geniser. The selection of the proper man who will give his tine and energy to this campaign and will obtain the co-operation of the leading citizens in that unit is vital to the succese of the campaign. The selection of the Unit Chairman shall be discussed by the Unit Organizer with his Divisional Organizer and when they have agreed the Orgunizer will promptly pass on the name of the prospective chairmen, by telephone or telegraph, to the Organization and Distribution Committee at Provincial beadquarters in order that the necessary invitation to act AB Chairmen my be sent by the Minister of Finance. As soon as this invitation has been despatched the Organizer will be advised and after sufficient time has elepsed for the invitation to reach the proposed Chairesn the Organizor will be at liberty to interview kim. In order that the Organiser may make the wisest selection possible, It 1a suggested that be first consult privately with two or three prominent local men who, by virtue of their positions, would not be eligible for Chairman thomselves. Bank managers who have been located in the community for BODO time should be of valumble assistance. After the Chairman has nocepted the invitation from the Minister of Finance, the Organiser, in collaboration with him, should decide on one or more Vice-Chairgen and the invitation to act as Vice-Chairmen should be issued by the Chairman and Organizer. The presence of other important towns or cities in the unit, in addition to the headquarters town or city, Will have a great bearing on the number of vice-chairmen considered necessary. The Chairman, Vico-Chairman and Organizer should than proceed to appoint a Secretary. The Secretary will be expected, under the immediate direction and control of the Organizer and Chairman, to devote his full time to the proper discharge of his duties. The Secretary may be 5 salaried employee. It is most essential that the Secretary throughly understands the necessity of keeping proper records and 10 careful and accurate in their preparetion. In e number of unit centres Unit Organizers will find that there will be no necessity for the employment of a. paid secretary. In some asse there are local dealers, whose are OR the Bank of Canada list, Dess services my be utilized for this or other purposes. In other cases Regraded Uclassified 156 € Unit Organizers, The Plan of Organisation, (Prelimissry) shore brench offices of stock brokers are located, such personnel, above It is sutisfactory, should be used In preference to the employment of paid intrained assistants, Where such local dealers and branch offices are Located the Unit Organizer will be furnished with their names and addresses. Unit Organizere will be furnished Wthe names and addresses of the Tar Savings personnel in their units. Kar Savings chairmen are being ed- vised by their Dominion Executive that they my expect A call from War Loan Organizers on or about May 1st, and they will be prepared to extend full CO- operation. It is believed that much valuable assistance, particularly with reference to Employee canvass my be obtained from the local Nor Savings Com- gittees and in many cases Her Savings Chaireen and Committee sembere will un- doubtedly be utilized for Chairmen and Executive Comittee members by the Dar Loan Organization. Unit Organizers have received & bullotin summarizing & letter sent by the Read Offices of the Chartered Banks to their branch managers. It will be noted from a careful perusel of this bulletin that the Branch Managers have been requested to assist district organizers in every possible way, and they will be able to give valuable assistance to the organiser on all matters pertaining to local information concerning his territory. The Branch Bank Monagers should be contacted at the carliectpossible moment, READQUARTERS: In the case of a County organization, the logical place for the County headquarters in usually the County town. Imadistely following the appointment of the Chairman, steps should be taken to secure headquarters nod in this connection the Chairman should be able to give valuable assis- Lance. Too much emphasis cannot be placed on the importance of securing suitcble quarters. It is essential that adequate space, centrally located and on the ground floor, if possible, be secured. It should be understood definitely that the organisation will have the use of the premises until June 30th. It may very well be possible to secure desirable premises free of charge, but it should be remembered that the requisites outlined above are the first consideration. In DOGG cases 1t, will be necessary to alter prenises obtained free and restore them to their original condition before leaving. STAFF AND FIXTURES: No time should be lost in securing the necessary hondquarters staff. At least one compotent, paid stenographer should be engaged 10- mediately. A day or two prior to the opening of the campaign, one, two, or possibly three, additional stonographers any be needed. Prompt steps should be taken to secure adequate telephone service. During the actual compaign it will, in all probability, be possible to secure voluntary assist- ance from bankers and others, especially in the evenings, for such purposes as checking applications, stc. If it is impossible to obtain adequate assistance locally, Provincial headquarters will be glad to assist. NOTE: No Contracts should be entered into or expenses incurred without the Organizer first studying carefully regulations issued by the Provincial administration and Finance Committee, under whose jurisdiction fall such active as rentals, staff, expenses, etc. COMMITTEES Executive Committee The Unit Procutive Committee about none1st of the Choirman, Vice- Chairesn, Divisional Organizer, Unit Organizer and Secretary. In addition, the Chairman of each of the standing comittoos called for in the general plan should be 4 member of this Committee. The Unit will be divided into convacsing districts ILB amplained later in the memorandum and a local chairman should be appointed for each canvassing district. Such local chairsm should also be members of the Unit Executive Committee, although in actual practice they would probably attend only one or two of the early organisation swetings. Such chairmen, however, will be invaluable in asinteining local contacts throughout the territory end 4 membership on the Executive Consittoe will give than the necessary contact with head- quarters. Main the Unit embraces a reasonably large city it will undoubted- ly be desirable also to include some of the most prominent citizens, or city and county officials. Regraded Uclassified 157 3 (a) Orde Organizers, The Plen of Organization, Honorary Committee An Honorary Committee my be formed, If Seal advisable, by the loos) executive. In actual practice It in unlikely to be required except in large cities. It should be borne in rdnd that there are many opportunities for service on the various active Committees and an active working group of citizens 1a infinitely more decirable than names on en Honordry Counittee. In large centres where it Le decided to have such 4. Committee, this Committee should consist of representatives of the clargy, unicipal corporation, insurence companies, canufacturers, labour organi- artions, the professions, froternal societies, service clube, etc. Publicity Committee & Publicity Committee shall be set up in each Unit headquarters, which Committee shall act under the direction of the Unit Executive and the Provincial Publicity Committee. The Organizer and Chairman will receive from Provincial headquarters suggestions 05 to the setting up of this Committee. In addition to the Publicity Committee located at headquarters, consisting of people resident in the haedquarters city or town, there should be Publicity Committee pen in each conveasing district who my be the same pen representing their die- triots on the Executive. It should be the duty of one of the members of the Reciquarters Publicity Connittee to keep constantly in touch with the maters of the Publicity Committee in such of the canvasing districts and to rolay to them for distribution publicity matter supplied by Provincial handquarters. Hare there are two Unit Organizers allotted to & Unit, it in suggested tast the Assistant Organizer make Publicity his special charge. Administration and Finance Conmittee. In wost Units it would seou that the Organiser and Secretary will be able to porform the functions usually performed by the Administration end Finance Committee necessary in the larger centres. If it is decmed advisable to set up such a Committee, the Committee should be & very small one and should consist of e Chairman (preferably the Unit Organizer) a Secretary, and not aore than two other unabers one of whom should probably be B. local banker. The Secretary of this Comittee should be the General Secretary of the Unit Com- mittee. The duties of this Committee, if set up, will be to clear with the Provincial Administration and Finance Committee on all matters pertaining to budgets, the expenditures of moneys and the keeping of records and reports. Unler the supervision of this Committee would be the handling and filing of the applications received during the compaign itself and the compilation of daily reports to headquarters Special Names Committee Instructions covering special names will code from the Provincial Special Names Committee. Generally speaking, special names will consist of those corporations or individuals oppable of purchasing $25,000. por value or aore, A bulletin from the Special Names Committee, showing the type of organi- action which they desire and the methol of coverage of the names with which the organizers have been furnished by the Special Names Committee 10 enclosed. One of the most important duties of the Unit Organizer in to check carefully the List of Special Name which will be furnished by the Provincial Special Somes Committee with a view to the removal from ruch list of any names which, in the opinion of the local chairman, Executive Committee and organizers, should not be DD such list and also to arrange with the Provincial Special Names Committee for the addition of such names as may have been onitted from the Provincial Special Names list and which properly belong there. No commissions will be jedd on subscriptions obtained from nesses on the Special Names list. Employees Committee (Eoployees Convess Relation to War Savings) pared covering & the organization and plan of procedure to be adopted by the Em- bulletin from the Provincial Employees Committee is being vre- playses Committee. This will be handed to Unit Organizers at the Conference 411 20, In your work on the Employees Connittee the question of the 10- litionship between the Victory Loan and Var Savings 1a bound to come up- War Loan has agreed that the payroll deduction 10 the vehicle of Mar Savings. Generally, payroll deductions will be left to War Savings and War Loan will only institute payroll deductions when the mingement ao requests. The Bar Sevings Comsittee has agreed not to stimulate or expand its Var Savings plan Maring the period May 10th to June 24th. Har Savings Committees will continue Wair contacts with employers and employees to the extat of conserving porti- cigations and amounts of subscriptions 66 of May 10th,1941. Regraded Uclassified 158 Unit Organizers, (0) The Plan of Organisation. (Prelininary) Sales Committee (including the canvnesing District Chairm) plus additional Den with the The Unit Sales Comittee should consist of the Unit Executive, addest possible sequaintence throughout the unit area, It will have to be divided into local sub-committees, bended by the local chairmen La each CAD- mesing district. The size of each sub-coimittes will depend on the poyulation of the individual convessing district which each sub-committee will DECTS. The daties of this committee in conjunction with the executive, will be to assist the organizer in the selection of cauvessers. This Committee will allocate territory to the individual carvassers and will provide then with 6. complete list of the prospects in their territory. The local sub-committees of the Sales Conmittee should also prepare a list of the better prospects in their local convassing districts, to be comprised of individuals or corporations who should be able to purchase from $6,000. to $24,000. They should arrange that such list receive special cenvessing attention if necessary 80 that the best possible results my be achieved. The commissions from calos to Dámas on this list would, of course, be credited to the convassers. Mombero of this committee should also be at Beadquarters of the various canvassing districts for sufficient time each day or evening to scrutinise carefully each appli- cation sent in by the canvessors with a. view to determining whether or not each application 10 for e satisfactory amount. They should also review re- ports sent in by the canvacters on those who have not subscribed to decide what further action my be taken. This Committee should also co-operate with the organizer in seeing that all convessors work to capacity during the cap- paign and воде of their number should be available to render assistance in the event of any individual canvesser or team not producing estiafactory re- sults. Women's Committee If deemed desirable E Wonsn's Committee my be formed to 00- operate in stimulating interest in the compaign, Transportation Committee The Organizer my find it advantrgeous to anticipato the needo of hinself, the executive and speckors in respect to transportation, particu- larly automobile transportation, within the bonds of his territory. If doemed advisable he my desire to have & small consittee specially charged with the responsibility of providing such transportation if necessary. CANVASSING DISTRICT AND CANVASSIRS: Canvassing districts should be as nearly 58 possible identical with township, village, or torm boundaries. The solicity of the regular subscriptions will be done by trass to be appointed by the Local Executive, The best nember of each teas will be put in charge and called "Captain" and these ten will be responsible to besdquarters for the record of their teas. As the campaign will cover three wooks, there will be only eighteen working days. Inch canvainer must devote his entire time to the canvase and, there- fore, ha should be able to 866 nine or more possible subscribers per day. It should be particularly noted that in towns and cities a great deal of the canvess 07 have to be donc in the excoing. There should be at locat one subscriber to every five of the population so that, at a couga estimate, there should be one canvasser for about each eight Immired of population. In the judgment of the Executive 16 any, however, be necessary to enlarge or de- crasse this number according to local conditions. It is of vital importance that great care abould be taken in selecting canvassors as the approach to the public is through the canvessors. Sub-agents who noted during the First and Second War Loans, provided their records were good, should prove excellent. Experienced insurance agents will mike very desirable convensers and the Insurance compenios have assured the Provincial Mar Loan Committee of their Mll co-operation in this respect, The Insurance companies are forming e Committee in the zore important centres to deal with this aatter of the release d' agents for the purpose of the War Loan. the Dates of the mmbers of this Committee will be furnished to the various organizate and it is suggected that these an should be unde moters of the local general anles committee. % approach should be mde to insurance agents to act as canvessers until further advice is received from the above insurance Committes. Care must be taken to secure not only sen who are workers but - the have confidence of the residents of their district. Regraded Uclassified 159 (e) Unit Organizers, The Plan of Organisation, (Prellainery) CANVASSING DISTRICTS AND CANVASSIRS (Continuet) Á special bulletin dealing with commissions to convessers and ito distribution will be issued by the Dominion Organization and Distribution Committee. without exception, convassers must confine their solicitation to the territory officially allotted to them. Subscriptions originating in other territories cannot be accepted, but must be forwarded immidiately to the territory of origin. Convensers are forbidden to solicit subscriptions, either by mil or word of mouth, in the United States of America. Such solicitation, aside from other considerations, is illegal. It will be noted from the time schedule that the fourth week in May has boan reserved for canvassers' conferences at which the canveneers my become thoroughly instructed in their duties, prior to the opening of the campaign. The Divisional Organizer will be in consultation with the Cult Organizers in his territory and in consultation with them will plan - unit canvassers' conferences 80 that he my be present and supervise such conferences. Each canvasser will be required to sign a contract stating the conditions under which be will work during the campaign. (See official "controot letter"). "hen this contract is signed each canvesser will be supplied with B. credential card which will be his authority for soliciting miscriptions. This card is to be accepted by the canvasser on the dis- Unit understanding that it is to be used only for the purpose of and during this compaign. During the campaign the canvasser will be expected to devote his entire tico to E. complete curries of the territory allotted to him. Be will complete and hand in to headquarters application forms covering all applications received. Be will also report briefly all cases of refusal to subscribe, or cases where be does not consider the amount subscribed sufficient. BRANCH BANK SUBSCRIPTIONS: Some subscriptions vill be ande directly through branch banks and not through cunvessors. h plan of allocating such subscriptions to the proper canvassing districts is now being formulated by the chartered banks and the Dominion ar Loan Executive Comittee. Each branch bank manager will receive full details of this plan from Head Office. A special bullotin will also be sent to each unit organizer from the Provincial Executive Committee explaining fully such plan when it has been finalized. In general, it 1a expected that the plan will be along the following lines - The unit organizer will provide each branch bank in his territory with a list of the canvassing districts and their boundaries and the branch banks will then advise the unit Redquarters daily of the subscriptions which they have received that day and the canvessing districts to which such subscriptions should be allotted. Where branch banks have received permission from their subscriber, they will reveal ids name, In other cases they will advise only the amount of the subscription received and state the convessing district to which it is to be allotted. Branch banks will report only to the unit houdquarters in which they are 100 cated, but they will also receive certain subscriptions which must be credited to other units, and it will be the duty of the unit organizer to advise the proper unit headquarters of such subscriptions. OBJECTIVES: Team objectives will be not for each unit by the Provincial Discutivo Comittee. The Unit Organizer, assisted by his Executive Committee and the Divisional Organiser, will, in turn, sub-divide such unit tea objectives into canvassing district objectives. h Special Name Objective will also be set for each unit by the Ontario Special Names Committee. here E unit has two or more important tome or cities it my be desirable to divide such Special Name objective, but in the cases of unite which contain only One large centre of population, it would sees that there should only be divide. one unit Special Name objective and that 18 vill not be dasirable to sub- Regraded Uclassified 160 - 6 - Unit Organizers, (6) The Plan of Organization. (Preliminary) REPORTS: As the Divisional Organizer will be constantly travelling from one unit headquarters to another in his territory, all reports and corres- pondence for Unit Organizers will be sent out from Provincial headquarters direct to unit headquarters. Additional copies of all correspondence and reports will be sent by the Ontario headquarters to the Divisional Organiser as well so he will, at all times have full information. In turn the Unit Organisors will correspond direct with Provincial and Committee headquarters, sending a copy of all correspondence to the Divisional Organiser. The same procedure is to be followed in the case of all reports sent by Unit Headquarters to Provincial headquarters during the campaign. This system will result in quick communication be- tween the Unit and Provincial headquarters and the additional copy sent to the Divisional Organizer will also keep him fully informed at all times of matters transpiring in his division. In closing we would like to draw the attention of the Unit organizer to the fact that the local Chairman, the Executive Committee, and the various subsidiary Committees will consist of prominent local people who are doing a voluntary job for patriotic motives. To be successful the Organizer must enlist and retain the help of everybody in his district capable of aiding in the success of the loan. This will require the utmost tact and diplomacy and without it no unit organization can be successful. NOTE: These instructions deal primarily with the organisation of your Unit for sales distribution purposes. Instructions as to records and returns are being issued separately under the authority of the Dominion Administration and Finance Committee. 161 (6) (Preliminary). - 7 - CONTENTS OF FOLDER FOR UNIT ORGANIZERS 1. Copy of instructions prepared by Organization and Distribution Committee. 2. Copy of instructions prepared by Special Names Committee. 5. Copy of instructions prepared by Publicity Committee. 4. Copy of instructions prepared by Employees Committee. 5. Copy of instructions prepared by Administration & Finance Committee. 6. Copy of instructions to Secretaries. 7. All standard forms including unit chart. 8. Unit objective. - (a) teams, (b) Special Names. 9. Personnel of the local War Savings Committee. 10. List of any Bank of Canada approved dealers in the unit, plus list of branch offices, if any, in the unit and their personnel. NOTE: We have asked the Divisional Organizers to obtain for their Unit Organizers and for themselves, the following informations 1. Map of each unit. 2. Population and assessment figures, by townships, villages, torms and cities for each unit. 5. List of Municipal officials and Federal and Provincial members for each unit. 4. Bank branches and managers thereof in each unit. STANDARD FORM ( FOR UNITS OF THE PROVINCE OF ORTARIO WAR LOAN ORGANIZATION 1941. Name of Unit Ontario Executive Committee "Special "Administration "Organization & "Publicity" "Employees" Nomes" and Finance" Distribution" Committee Committee Committee Committee Committee Divisional Organiser Organisers and Executive Committee and Citizens Committee Unit Unit "Special "Administration Unit Unit Unit Unit Names" & Finance" "Sales" "Publicity" "Employees" "Transportation" Committee Committee Committee Committee Committee Committee Organizers will receive six copies of the above nodel chart at the Organisers' Conference on April 23rd,1941. Un the back of this form each Organizer should draw in triplicate a chart of the organization he proposed to have in his unit. On May 12,1941, be should send one copy to his 162 Divisional Organizen one to the Secretary of the Onterio Yer Loan Organization 1941, 48 King Street West, Toronto. He should keep one popy at Local How Innester Regraded Uclassifie 163 TREASURY DEPARTMENT INTER-OFFICE COMMUNICATION CONFIDENTIAL DATEApril 28, 1941 TO FROM Mr. Haas Secretary CA. Morgenthau Subject: The Business Situation, Week ending April 26, 1941 Summary (1) Business activity has shown some further decline from last month's record levels as & result of the coal strike. Threats of serious interruption to industrial opera- tions due to lack of coal are becoming widespread. No less than 35 plants working on defense orders are reported to have only 2 to 4 days' supply of coal. (2) Despite the increase in freight car orders since last summer, freight cars owned by the railroads on April 1 were actually a trifle under the number a year earlier. Serv- iceable cars had increased by 54,000 units, due to the reduc- tion of bad order cars. However, further substantial new car orders appear necessary to avert a shortage at the Bea- sonal peak in the fall. (3) Steel operations have continued to decline as a result of the coal strike. Production of pig iron by Carnegie- Illinois, the country's largest steel producer, 1s reported to be down 20 percent. At the same time, new steel orders have continued to be received by mille in heavy volume, with the U. 8, Steel Corporation's orders spurting sharply to a new high in the week ended April 17. (4) National income payments in March increased only elightly more than seasonally, reaching an annual rate of $80.3 billions as compared with $79.8 billions in February. Farm income increased in March by about the usual seasonal amount. Factory payrolls, however, were 3.2 percent higher than in February, and no less than 31.3 percent higher than March 1940. (5) Commodity price indexes showed virtually no change last week, while individual commodity prices, for the most part, held very steady. Regraded Uclassified 164 - 2 - Business activity slowed by coal strike Largely as a result of the coal strike, business activity has shown some further deoline from the record levels attained last month. Thus by the week ended April 19, the New York Times index of business activity had declined to 118.6 from the record high of 124.3 at the end of March and an average of 122.6 for the month. (See Chart 1, top section.) Due to the strike in the Appalachian soft coal area, pro- duction of bituminous coal during the week mentioned was esti- mated at less than 12 percent of capacity and was 81 percent below the corresponding week in 1940. (Refer to Chart 1, middle section.) Although at first the effects of the strike were largely confined to the actual producers and transporters of coal, the steel industry soon began to ourtail operations due to lack of coke. By the end of last week no less than 35 plants working on defense orders, 8.6 well as at least one important railroad, the Southern Railroad, were confronted with an imminent curtailment of operations due to & lack of coal. Near the end of the week, it was reported that the country's soft coal stocks had been out down to two weeks' supply. Freight carloadings continue to run substantially below March levels due to the heavy drop in loadings of coal, which by the middle of April were running only about one-fifth as large as at the end of March, During the week ended April 19, a moderate upturn occurred in total carloadings but this was almost entirely due to 8. sharp rise in ore shipments, which were nearly 5 times as large as in the corresponding week of 1940. (Refer to Chart 1, lower section.) Coal strike will add later burden to railroads The distortion in the normal pattern of carloadings caused by the coal strike 1a unfortunate in that it will add to the burden of the railroads in ensuing months, when other demands on equipment normally increase. Moreover, despite the sub- stantial ordering of new equipment during the past year, freight cars of all kinds owned by the railroads on April 1 of this year were actually 1,000 less than the 1,645,000 owned on the same date in 1940. However, serviceable cars have increased by 54,000 units due to the reduction in bad order cars as 8. result of the stepping up in repair programs. On the other hand, further additions to equipment by merely repairing bad order cars are likely to be limited since the remaining number of bad order care amounts to only 6.3 percent of the total, as compared with 14 percent at the end of July 1939, before the more active repair program began. On the other hand, 42,000 new freight care were on order on April 1 as compared with Regraded Uclassified 165 3 - 21,000 a year earlier. However, unless etill further substan- tial new car orders are placed and the oars are built before the coming fall seasonal peak in traffic 18 reached, car shortages appear likely to develop. Ford resumption boosts automobile output After falling below year-earlier levels for two weeks, automobile production last week gained over 8,000 units and again rose moderately above comparable 1940 output. (Refer to Chart 1, middle section.) The recovery in production was due to resumption of work at the Ford plants after the recent strike, although full soale operations still have not been achieved. Trade sources anticipate a further gain in produc- tion this week and steady large scale production for the remainder of the spring, although these expectations may be upset by threatened labor troubles at the General Motors plants. The formula for effecting the 20 percent cut in produc- tion of 1942 model cars has not yet been decided upon but briefs containing suggestions were to be submitted by the automobile companies by the beginning of this week. Some sources believe that the ourtailment on 1942 model output will go beyond 20 percent, due to defense demands for alloy steels and steel itself. In this connection, it is pointed out that when Director Knudsen announced the cut he referred to it as an "initial 20 percent reduction." Meanwhile automobile sales continue at an unusually fast pace. After attaining record levels in March, Ward's Reports indicate that a new high for any 10-day period was probably established in the first 10 days in April. The total for the month, however, may be held down somewhat be- cause of the tie-up in Ford operations in the early part of the month. Steel production out by coal strike The seriousness of the effects of the coal strike on the steel industry was emphasized by OPM officials near the end of last week, when it was stated that continuation of the strike would out steel operation to 85 percent of capacity this week. Even if the miners go back to work at onoe, some further decline from recent levels is expected due to the loss in pig iron production and the time required to get blast furnaces and coke ovens into full activity. The effect on the defense program is particularly serious in view of the shortage of coke, pig iron, and steel capacity even at Baximum output. 166 4 By the end of last week it wae reported that the Carnegie-Illinois Steel Corporation, the country's largest producer, had reduced pig iron production by 20 percent, and that the remaining 80 percent would be closed down by May 15 unless coal shipments were resumed. At the same time, bee- hive coke production in the week ended April 12 was down to only 7,000 tons from 137,000 tons in the week ended March 29, A6 a result of the coal strike, steel operations last week were scheduled at 96.0 percent of capacity 88 compared with 98.3 percent in the previous week. During the current week, e further decline will carry the scheduled rate of operations down to 94.3 percent of capacity. (Refer to Chart 1, lower section.) New orders for steel show increase In the face of declining production, new orders for steel continue to pour into mills in heavy volume. Latest weekly order figures of the U. 8. Steel Corporation show a sharp in- crease to 8. new high at no less than 195 percent of capacity. One trade source reports that orders in the important Pittsburgh district 80 far this month have been running 5 to 15 percent ahead of last month. Although some steel company executives have vigorously criticized the recent order freezing steel prices at first quarter levels, and some small companies have filed complaints with the Office of Price Administration asking for relief, the Chairman of the Board of the National Steel Corporation indicated last week that he favored the freezing of steel prices until all the facts relative to increased coste could be established. These facts, it was stated, should be avail- able by the middle of July when operating results for the second quarter become available. According to the Iron Age, the recent price-freesing or- der has brought export business in steel to an almost complete standstill. It is asserted that since most recent sales to countries other than those coming under the Lease-Lend Act have been made at prices above the domestic level, the effect of the order is to reduce export prices. The stand of the Office of Price Administration on this matter has not as yet been entirely clarified. The movement of iron ore down the Great Lakes has got off to an unusually good start, following the opening of the Soo Canal at the earliest date in history. It 18 reported Regraded Uclassified 167 - 5 - that the first shipment of Lake Superior ore to reach Warren, Ohio, was converted to strip steel for British defense orders within 10 days of leaving the mine in northern Michigan. The Coast Guard cutter Tahoma, according to the Iron Age, con- tributed by breaking ice for the ship carrying the ore. Factory payrolls steeply higher An increase of 3.2 percent in the index of factory pay- rolls 1s reported for March as compared with February. The following table shows how considerable has been the increase in the pay of factory workers in the year ending March as compared with other related series: Percent March 1940 March 1941 increase Factory payrolls 99.8 131.0 31.3 (BLS, 1923-25 = 100, unadjusted) National income payments 72,545 80,259 10.6 (Commerce, annual basis, millions of dollars) Factory employment 104.4 119.9 14.8 (BLS, 1923-25 = 100, unadjusted) Non-agricultural employment 34,852 37,218 6.8 (BLS, thousands) The greater relative increase in factory payrolls than in national income shows that factory workers have been 66- curing an increasing share of the national income. Factory employment has also increased relatively more than non- agricultural employment as a whole. The fact that factory payrolls have increased more than twice as much as factory employment indicates that a part of the gain in factory pay- rolls has been due to increased rates of pay and increased hours worked. Retail sales rising more rapidly than incomes Data on retail sales appear to indicate that consumers have been increasing their purchases more rapidly than their incomes have increased, perhaps in anticipation of higher 168 prices. Retail sales of General Motors care and trucks during the first quarter of this year, for example, were 45 per cent higher than in the first quarter of 1940, although total salaries and wages were only 14 per cent higher and factory payrolls were 27 per cent higher. The same tendenoy is shown by department store sales. (See Chart 2.) The adjusted index of department store sales in March was 9.6 percent higher than the average for 1940, 86 compared with a rise of 8.0 percent in national income (dotted line on chart) with which normally they are rather closely correlated. National income payments in March advanced to an annual rate of $80.3 billions, 86 compared with $79.8 billions for February. This represents a continuation of the upward movement which began in May 1940. Rural retail sales rise with farm income Farm income in March (including Government payments) rose by about the usual seasonal amount, which contrasts with a contra-seasonal decline in that month last year. (See Chart 3.) While farm income in January and February had been at the same level as last year, rural retail sales (lower section of chart) have been running consistently higher than last year. This may indicate a. tendency toward anticipatory buying, 8.8 in the base of other retail sales indexes men- tioned above. New orders index somewhat lower According to press reports, leading textile mills are sold up and have for some weeks withdrawn from the market. The reduced volume of business 18 partly the result of in- ability to accept orders but partly, according to some com- mentators, of a lull in buying. Hence it is not surprising that the textile component of our new orders index declined to a relatively low level in the week ended April 19. (See Chart 4.) The steel component, on the contrary, registered a striking advance on the basis of U. S. Steel orders. In view of the already high level of unfilled orders and the current decline in output, prospective delivery dates must be ad- vanoing considerably. The total excluding steel and textiles declined notice- ably while the total index fell off somewhat. Regraded Uclassified 169 - 7 - Commodity prices hesitate Commodity price indexes showed little change last week (see Chart 5, upper section) and fluctuations in individual commodity prices were very few. (See Chart 5, lower section.) For the week ended April 19, the BLS all-commodity index in- creased only 0.1 to 83.0. Security prices held remarkably steady in the face of adverse war news and publicity on new tax proposals. SELECTED BUSINESS INDICES BUSINESS ACTIVITY PER CENT Seasonally Adjusted Eat. Normal . 100 130 4/ 120 40 110 39 100 90 N y Times 80 JAN. MAR. MAY JULY SEPT. NOV. BITUMINOUS COAL PRODUCTION AUTOMOBILE PRODUCTION SHORT TONE CARS MILLIONS THOUSANDS U.S. and Canada 2.4 150 '4/ 2.0 125 'All '39 40 1.5 100 40 1.2 75 39 D 50 4 25 Bit, Coal Comm. Ward's Eet. o o JAN. MAR. MAY JULY SEPT. NOV. JAN. MAR. MAY JULY SEPT. NOV. FREIGHT CAR LOADINGS STEEL INGOT PRODUCTION CARE PER THOUSANDS Total CENT Per Cent of Capacity 900 40 100 41 800 '40 W 80 700 39 de. 60 600 40 500 Am By. Assn. Amer / and #: Inst. 400 20 JAN. MAR. MAY JULY SEPT. NOV. JAN MAR. MAY JULY SEPT. NOV 170 Office of the Secretary of the Treasury C-387 Divisles of Research and Statistics Regraded Uclass Chart 1 171 DEPARTMENT STORE SALES AND NATIONAL INCOME PAYMENTS Chart 2 1932 1934 1936 1938 1940 1937 1938 1939 1940 1941 DOLLARS PER DOLLARS PER BILLIONS CENT BILLIONS (SALES) CENT (INCOME) (INCOME) (SALES) Annual Monthly (ADJUSTED) 90 110 85 105 80 100 80 100 70 90 75 95 INCOME PAYMENTS INCOME PAYMENTS 60 80 70 90 DEPARTMENT STORE SALES (1923 - 25 = 100) 50 70 65 85 DEPARTMENT STORE SALES (1923 - 25 = 100) 8 60 60 80 30 50 55 75 20 1932 1934 40 50 70 1936 1938 1940 1937 1938 1939 1940 1941 . SEASONALLY ADJUSTED MONTHLY FIGURES, MULTIPLIED BY 12 Office of the Secretary of the Treasury - el Research and Statistics c 380 FARM INCOME AND RURAL SALES OF GENERAL MERCHANDISE JM. FED. MAR. APR, MAY JUNE JULY AUS. SEPT. ocT. DOLLARS NOV. DEC. MILLIONS DOLLARS Fare Income MILLIONS INCL. RENTAL AND BENEFIT PAYMENTS 1200 1200 1100 1100 1000 1000 900 900 800 800 1941 700 700 1940 1939 600 600 1938 500 500 400 400 JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. ocT. NOV. DEC. PER Rural Sales of PER CENT General Merchandise # CENT 1929 - '31 = 100 UNADJ. 220 220 200 200 180 180 160 160 140 140 1941 1940' 120 120 1939 100 100 1938, 80 80 60 JAB. FEB. MAR. APR. MAY JURE JULY AUG. SEPT. ocT. 60 É DEC. . DEPT. of COMMERCE INDEX OF DOLLAR SALES of SENERAL MERCHANDISE IN MALL TOWNS AND RURAL AREAS 172 Office of the Secretary of the Treasury Civision of Reserch and Statistics C - 273 - B Regraded Uclass INDEXES OF NEW ORDERS Combined Index of New Orders and Selected Component 173 1939 1940 1941 . D d , M M A a o . D J , . # Chart 4 CONFIDENTIAL CADENTAGE POINTS 220 220 210 210 Total (combined Index) 1036 . 100 200 200 190 190 180 180 170 170 150 160 150 150 140 140 130 130 120 120 110 110 100 100 90 w 90 80 Total escluding Steel and Textiles 80 70 70 8 60 50 50 40 40 Steel Orders 30 30 a 20 10 Textile Orders 10 0 0 A 6. 0 . D J = & = A $ o - . J F - A . di A 5 o . . 1939 1940 1941 Page - - el - Transary / 1 1 I 1-8-0 174 MOVEMENT OF BASIC COMMODITY PRICES Chart 5 Domestic and Imported AUGUST 1939 - 100 PER PER PER PER CENT Weekly Average CENT CENT Daily CENT 145 145 140 140 140 140 // Imported 130 Commodities 130 // Imported 135 135 Commodities 130 130 120 120 125 125 17 Domestic 110 Commodities 110 120 17 Domestic 120 Commodities 100 100 J F M A M J J A S o N D J F M A M J 115 115 I e 15 22 I 9 IS 22 29 5 of e 26 3 ID 17 24 as 1940 1941 FEB. MAR. APR. MAY 1941 Percentage Change for Individual Commodities, August 1940 Low to April 18 and to April 25, 1941 PER Tollow 1214% PER CENT 17 Domestic Commodities CENT II Imported Commodities +100 +100 Burlop 842X +80 +80 Cottonseed Oil 71.8% Cocoo 743X Lard 60.4% Shellee 690X Print Cloth 48.6% *60 Hoge 35.0% +60 Wheat 34.3% Barley 27.1% Nides 487X Butter 24.5% Wool 46.6X +40 Lead 232X Coffee 46.4% +40 Roain 185% Steel Screp.dom. 167% Flaxseed 329X Zine 151% Sugar 268X +20 Cotton 15.0% +20 Rubber208X Steers 138% Copper IIBX Silk 9.8% Com B5X 0 Steel Screp. exp. &2% Tin sex o Aug Low April8 Apr:25 Aug. Low Apr. 18 Apr.25 - # - Inc, el N I 1. f I P-199-20 175 TREASURY DEPARTMENT Most INTER OFFICE COMMUNICATION DATE April 28, 1941 TO Secretary Morgenthau FROM Mr. Cochran CONFIDENTIAL Registered sterling transactions of the reporting banks were as follows: Sold to commercial concerns £35,000 Purchased from commercial concerns £27,000 Open market sterling was first quoted at 4.03. Late in the afternoon, it moved to 4.03-1/4 and closed at that level. Transactions of the reporting banks were as follows: Sold to commercial concerns k 7,000 Purchased from commercial concerns £ 4,000 In New York, closing quotations for the foreign currencies listed below were as follows: Canadian dollar 11-5/8% discount Swiss franc .2321 Swedish krona .2384 Reichamark .4005 Lira .0505 Argentine peso (free) .2350 Brazilian milreis (free) .0505 Mexican peso .2066 Cuban peso 4% discount In Shanghai, the yuan was again quoted at 5-3/16, and sterling was unchanged at 3.90-1/2. According to a cable sent from Shanghai three days ago, reports were sirculating in that center to the effect that the four Chungking-controlled banks hich closed on April 17 would reopen today. To sold the following amounts of gold to the banks indicated, to be added to heir carnarked accounts: $4,491,000 to the Central Bank of the Argentine Republic. 997,000 to the Central Bank of the Uruguayan Republic. $5,488,000 Total No new gold engagements were reported. 176 -2- To were informed that the Bombay gold price for April 26 was equivalent to $34.62, or 414 lower than the quotation of April 19. Silver was equivalent to 44.62#, off 5/16¢. It was reported that the decline in the metal prices was due in part to the political troubles in Bombay. In London, the price for both spot and forward silver was again 23-1/24, equivalent to 42.674. The Treasury's purchase price for foreign silver was unchanged at 35#. Handy and Harman's settlement price for foreign silver was also unchanged at 34-3/44. We made two purchases of silver totaling 175,000 ounces under the Silver Purchase Let, both of which consisted of new production from foreign countries, for forward delivery. We also purchased 50,000 ounces of silver from the Bank of Canada, representing the first silver bought from that source in April under our regular monthly agreement to purchase up to 1,200,000 ounces. Juin CONFIDENTIAL 177 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE April 28, 1941 TO Secretary Morgenthau FROM Mr. Haas AA According to the attached tables and chart, Work Projects Administration employment declined 27,000 to 1,607,000 persons, during the week ended April 16, 1941. Attachmonts 178 WORK PROJECTS ADMINISTRATION Number of Workers Employed - Weekly United States Week ending Number of Workers 1940-41 (In thousands) October 2 1,747 October 9 1,763 October 16 1,768 October 23 1,776 October 30 1,779 November 6 1,783 November 13 1,786 November 20 1,807 November 27 1,822 December 4 1,832 December 11 1,855 December 18 1,872 December 25 1,878 January 1 1,880 January OR 1,887 January 15 1,894 January 22 1,895 January 29 1,895 February 5 1,892 February 12 1,893 February 19 1,885 February 26 1,867 March 5 1,806 March 12 1,764 March 19 1,736 March 26 1,708 April 2 1,662 April 9 1,634 April 16 1,607 Source: Work Projects Administration 179 WORK PROJECTS ADMINISTRATION Number of Workers Employed - Monthly United States Number of Workers 1938 (In thousands) July 3,053 August 3,171 September 3,228 October 3,346 November 3,287 December 3,094 1939 January 2,986 February 3,043 March 2,980 April 2,751 May 2,600 June 2,551 July 2,200 August 1,842 September 1,790 October 1,902 November 2,024 December 2,152 1940 January 2,266 February 2,324 March 2,288 April 2,092 May 1,926 June 1,665 July 1,701 August 1,691 September 1,704 October 1,779 November 1,821 December 1,878 1941 January 1,895 February 1,867 March 1,708 Source: Work Projects Administration Monthly figures are weekly figures for the latest week of the month. They include certified and noncertified workers. 179 WORK PROJECTS ADMINISTRATION Number of Workers Employed - Monthly United States Number of Workers 1938 (In thousands) July 3,053 August 3,171 September 3,228 October 3,346 November 3,287 December 3,094 1939 January 2,986 February 3,043 March 2,980 April 2 ,751 May 2,600 June 2,551 July 2,200 August 1,842 September 1,790 October 1,902 November 2,024 December 2,152 1940 January 2,266 February 2,324 March 2,288 April 2,092 May 1,926 June 1,665 July 1,701 August 1,691 September 1,704 October 1,779 November 1,821 December 1,878 1941 January 1,895 February 1,867 March 1,708 Source: Work Projects Administration Monthly figures are weekly figures for the latest week of the month. They include certified and noncertified workers. Regraded Uclassified 180 WORK PROJECTS ADNINISTRATION Number of Workers Employed United States Monthly W.P.A. Employment Wookly W.P.A. Employment 1935 1936 1937 1938 1939 1940 1541 É 1940 1941 1942 MAR. MAY JULY NOV, mês MAY ALL 1/27 BOY, WILLIONS MILLIONS MILLIONS THE or or or of workças main WORKERS WORKERS 2.7 2.7 2.6 2.6 1.) 3.2 2.5 2.5 2.4 2.4 2,8 2,8 2.3 2.3 2.2 2.2 1.4 2.4 2.1 2.1 2.0 2.0 1,9 2.0 2.0 1.9 1.5 1.8 1.7 1.6 1.7 1.5 1.6 1.6 1.5 1.5 1.2 1-2 1.4 1.4 1.3 1.3 a .8 1.2 1.2 1.1 M 1.0 A it 1,0 .9 .9 .8 un and 0 e .e JAN. MAR. MAY JULY SEPT. NOV. JAN. MR. MY JULY SEPT. NOV. JM. me. M / . M $ . - #. M - a . , M M J . . J # 1935 1936 1937 1940 1941 142 1940 1941 1942 1938 1939 SOURCE MORK PROJECTS ADMINISTRATION Z - 221 - C - of be Sentary of the Treasury - of - and - Regraded Uclassified