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Volume 445, September 26 – September 28, 1941
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Volume 445, September 26 – September 28, 1941
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Henry Morgenthau, Jr. Papers
Diaries of Henry Morgenthau, Jr.
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DIARY
Book 445
September 26 - 28, 1941
Regraded Unclassified
- & -
Book Page
Agriculture
Cotton and Wheat: FDR asks Wickard why Government
should not sell some of stocks on hand 6.5 soon
as parity is reached - 9/26/41
445
38
- B - -
Barth, Alan
"Editorial Opinion of Foreign Affairs: Facing the
Issue" - 9/26/41
80
- C -
China
See War Conditions
Correspondence
Mre. Forbush's resume' - 9/26/41
56
Cotton
See Agriculture
- D -
Defense Savings Bonds
See Financing, Government
- ? -
Financing, Government
Defense Savings Bonds:
Progress report - 9/26/41
60
Field Organization News Letter, No. 19 - -
9/27/41
123
France
See War Conditions
- G -
Gold
See War Conditions: U.S.S.R.
- I -
Italy
See War Conditions
- P -
Prentice Hall
Possible unfair practices as reported by Congress
for Industrial Organizations official discussed
at 9:30 meeting - 9/26/41
19
Regraded Unclassified
- T -
Book Page
Tyler, Royall
See War Conditions: France
- U-
U.S.S.R.
See War Conditions
United Kingdom
See War Conditions
- W -
War Conditions
Airplanes:
Employment as of July 1941 - Haas report -
9/26/41
445
39
Shipments to the British, by air and sea -
Kamarck report - 9/26/41
48
China:
Hall Patch-Fox joint statement - 9/26/41
97,101
Exchange market resume' - 9/26/41, 9/28/41
109,174
France:
Tyler, Royall: Reports to HMJr on 10 weeks'
trip - 9/26/41
54
(See also Book 448, page 30 - 10/4/41)
Italy:
Government expenditures - confidential report
sent from American Embassy, Rome - 9/28/41
202
Lend-Lease:
Purchases - weekly report - 9/26/41
88
Military Planning:
Reports from London transmitted by Campbell -
9/26/41, 9/28/41
110,175
War Department bulletin:
Tanke in Combat - June 5, 1940 - 9/26/41
113
U.S.S.R.:
Purchases (possibly $25- to $30 million through
December 31) and ways of paying for them
discussed by HMJr and Hopkins - 9/26/41
21
a) Discussion at Cabinet of Russian gold
situation - 9/26/41
28
b) Cable to Harriman "bringing him up to
date" - 9/27/41
30
c) San Francisco Mint report on gold
delivered on September 18 for account
of State Bank of U.S.S.R., Moscow -
9/26/41
34
1) See letter to Russian Embasey -
10/1/41: Book 447, page 41
Wheat
See Agriculture
Regraded Unclassified
1
TREASURY DEPARTMENT
FOR RELEASE, MORNING NEWSPAPERS,
Friday, September 26, 1941.
The Secretary of the Treasury, by this public notice, invites
tenders for $100,000,000, or thereabouts, of 91-day Treasury bills, to
be issued on a discount basis under competitive bidding. The bills of
this series will be dated October 1, 1941, and will mature December 31
1941, when the fact amount will be payable without interest. They wil
be issued in bearer form only, and in denominations of $1,000, $5,000,
$10,000, $100,000, $500,000, and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up
to the closing hour, two o'clock p. m., Eastern Standard time, Monday,
September 29, 1941. Tenders will not be received at the Treasury
Department, Washington. Each tender must be for an even multiple of
$1,000, and the price offered must be expressed on the basis of 100,
with not more than three decimals, e. E., 99.925. Fractions may not
be used. It is urged that tenders be made on the printed forms and
forwarded in the special envelopes which will be supplied by Federal
Reserve Banks or Branches on application therefor.
Tenders will be received without deposit from incorporated banks
and trust companies and from responsible and recognized dealers in
investment securities. Tenders from others must be accompanied by
payment of 10 percent of the face amount of Treasury bills applied for
unless the tenders are accompanied by an express guaranty of payment
by an incorporated bank or trust company.
27-72
Regraded Unclassified
- 2 -
2
Immediately after the closing hour, tenders will be opened at the
Federal Reserve Banks and Branches, following which public announcement
will be made by the Secretary of the Treasury of the amount and price
range of accepted bids. Those submitting tenders will be advised of
the acceptance or rejection thereof. The Secretary of the Treasury
expressly reserves the right to accept or reject any or all tenders,
in whole or in part, and his action in any such respect shall be final.
Payment of accepted tenders at the prices offered must be made or com-
pleted at the Federal Reserve Bank in cash or other immediately avail-
able funds on October 1, 1941.
The income derived from Treasury bills, whether interest or gain
from the sale or other disposition of the bills, shall not have any
exemption, as such, and loss from the sale or other disposition of
Treasury bills shall not have any special treatment, as such, under
Federal tax Acts now or hereafter enacted. The bills shall be subject
to estate, inheritance, gift, or other excise taxes, whether Federal
or State, but shall be exempt from all taxation now or hereafter imposed
on the principal or interest thereof by any State, or any of the
possessions of the United States, or by any local taxing authority.
For purposes of taxation the amount of discount at which Treasury
bills are originally sold by the United States shall be considered
to be interest. Under Sections 42 and 117 (a) (1) of the Internal
Revenue Code, as amended by Section 115 of the Revenue Act of 1941,
3
- 3 -
the amount of discount at which bills issued hereunder are sold
shall not be considered to accrue until such bills shall be sold,
redeemed or otherwise disposed of, and such bills are excluded from
consideration as capital assets. Accordingly, the owner of Treasury
bills (other than life insurance companies) issued hereunder need
include in his income tax return only the difference between the price
paid for such bills, whether on original issue or on subsequent
purchase, and the amount actually received either upon sale or
redemption at maturity during the taxable year for which the return
is made, as ordinary gain or loss.
Treasury Department Circular No. 418, as amended, and this notice,
prescribe the terms of the Treasury bills and govern the conditions
of their issue. Copies of the circular may be obtained from any
Federal Reserve Bank or Branch.
-000-
Regraded Unclassified
4
September 26, 1941
10:05 a.m.
GROUP MEETING
Present:
Mr. Graves
Miss Chauncey
Mr. Bell
Mr. Morris
Mr. Gaston
Mr. Thompson
Mr. Haas
Mr. Schwarz
Mr. Foley
Mr. White
Mr. Kuhn
Mr. Odegard
H.M.Jr:
I signed the joint recommendation of Gaston,
Johnson and Thompson.
Thompson:
Yes, I got it back.
H.V.Jr:
I am glad you people had a change of heart.
Ganton:
I wouldn't say it was a change of heart.
H.M.Jr:
How would you describe it?
Gaston:
A change of tectics. It has gone over for
preparation of charges.
H.M.Jr:
Norman?
Thompson:
I have nothing.
Bell:
I have got the Federal Reserve people in
my office at ten fifteen, and I would rather
Regraded Unclassified
5
- 2 -
not keep them waiting too long.
H.M.Jr:
No. Well, unburden yourself.
Pell:
O.K. Here is the draft of a press release
that you give out on the thirtieth from
Merle Cochran.
H.M.Jr:
Where is the stuff on Chester Barnard?
Schi arz:
It is in the group here. there is also
one in the Herald Tribune. I have 8 - if
you want to take it now, I would like
approval on one of Dave Morris.
H.M.Jr:
It is all right with me.
Schwarzr
He has already seen it.
H.M.Jr:
And this is --
Bell:
Just A quoted part - the indented part is
all you need to read. I will clear with
White and give it to whick.
(Mr. Graves entered the conference).
H.M.Jr:
It is all right.
Pell:
These meetings that were held in New York,
you asked Mr. Foley and me as to what is
being done about further meetings. That
was just an experiment, I take it, and with
good results we will lay plans to do it
other places.
Foley:
Well, they aren't through, Mr. Secretary,
there is a meeting in New York City
tonight.
H.M.Jr:
Yes, but there are forty-eight states,
Regraded Unclassified
6
- 3 -
Foley:
That is right, and I have been waiting
until these boys got back to hear from them
first-hand the suggestions that they have
for adopting a similar program for the
rest of the country, and I think you can
do your program next week, Mr. Secretary,
after we have had 8. chance to talk to our
people.
H.M.Jr:
I don't see what you have got to wait 50
long for.
Well, you know it is a success. You have all
seen Merillat's report, haven't you?
Foley:
Yes, I saw it this morning after I read your
memorandum. I got B. copy of it.
H.M.Jr:
Sure. Well, let's go places, come on,
come on. We have got forty-eight states
to go. Let's get moving.
Foley:
Well, I will give you 8. program --
H.M.Jr:
Let's step up the tempo. To show you what
has happened, you see, 8 morning newspaperman
by the name of Ferdinand Kuhn was here at
seven fifteen this morning. When that happens
we are going places. (Laughter). He WBS
shaken out of his complacency. Herbert knows
what that means, don't you, Herbert?
Gaston:
Yes.
H.M.Jr:
When an editorial writer gets here at seven
fifteen in the morning, that is something.
Bell:
Have you changed the hours?
H.M.Jr:
Let's get going, gentlemen.
Bell:
Well, I do think we ought to have B. report
from those people.
Regraded Unclassified
7
- 4 -
Foley:
Merillat went to two meetings, Mr. Secretary.
After all, these fellows are the ones who
conducted the meetings and I want to talk
to them.
H.M.Jr:
But you have got forty-eight states. Get
the other Federal Reserves going.
Foley:
That is right.
Bell:
You sent me in this article that calls
attention to the differences between the
Treasury expenditure figures for national
defense and the OPM. Well, of course there
is quite a discrepancy because they put in
many things that we don't have in our state-
ment as national defense, and also they cover
& fourteen months period, beginning back
July 1, and our daily statement is on our
fiscal year basis. They also include
checks issued and of course ours is on a
cash basis. Now, they include the expendi-
tures made by RFC as Metal Reserves and the
other defense corporations. They are not,
strictly speaking, national defense expendi-
tures until the Army and Navy buys those goods
from those corporations. Up to that time,
they are an investment of the RFC and its
subsidiaries, and are shown in another
place on our expenditure statement, so
that there is bound to be 8 wide discrepancy,
and I would hate to see ours changed just
to make a big figure, and that is what it is
done for.
H.M.Jr:
Would you make a note? Send for 8 representa-
tive of Standard Statistics, who writes that,
and sit down and have 8. talk with him.
Will you do that, Dan?
Bell:
Yes.
Regraded Unclassified
8
- 5 -
H.M.Jr:
Anything else, Dan?
Bell:
One more. You mentioned yesterday evening
in our conference - a conference about
depositaries, you remember you said that you
didn't know where the money was being put
and 80 forth, and you would like to know a
little more about it. I wonder if you would
like to have 8 complete report on the depos-
itaries. It would be quite long, but it
might be interesting. I just have a tenta-
tive one this morning on what we have done
in the last few months, and I thought it
might be interesting if you had a full report
on the thing.
H.M.Jr:
I would like to.
Bell:
giving the types and how we have
handled the national defense situation,
as well as the bases that have been estab-
lished in the Atlantic. It would be very
interesting.
H.M.Jr:
Yes.
Bell:
Be glad to do that.
H.M.Jr:
Anything else, sir?
Bell:
That is all.
H.M.Jr:
You may be excused, sir.
Bell:
May I have White and Haas as they finish?
H.M.Jr:
I will finish them off. They will trickle
in.
Bell:
All right, thank you.
(Mr. Bell left the conference).
Regraded Unclassified
9
- 6 -
H.M.Jr:
Well, Harry, you are not going to be able
to stay in there long because I want you
to sit with me with the Russians at ten
thirty and Bewley at eleven, so you are not
going to have much chance in there. There
is not much use your going in there, so I
will take care of Haas and I will take care
of Morris. He can go in.
White:
Could I ask my man to go in there?
H.M.Jr:
Sure, go ahead.
Now, George, I am using those figures on
national defense and all those in my speech.
Haas:
Well, we ought to give it another check to
see just how it is stated.
H.M.Jr:
All right, be sure it is O.K. God help you
if it is wrong.
Haas:
The most important ones I got from Dr.
Lubin and he will have to be the final
authority.
H.M.Jr:
Well, what about the Department of Labor?
Don't you give them a check?
Haas:
Oh, those are direct Labor and if they
are - they are their official figures.
H.M.Jr:
Well, just as long as you can --
Haas:
Attach them to something?
H.M.Jr:
No, that is not the spirit. I want them
right.
Haas:
Oh. Well, I don't think I can go back of
their statistical staff on that.
- 7 -
10
H.M.Jr:
Well, can anybody attack me on it, George,
that is the point.
Haas:
I think they can on the direct Labor because
they are still in the process of making
them up.
H.M.Jr:
You think they can attack me?
Haas:
Yes, I could do it myself right now.
H.M.Jr:
You can attack me on it?
Haas:
No, I could, so somebody else could.
H.M.Jr:
How could you attack me?
Haas:
Because the figure is not complete.
H.M.Jr:
What is lacking?
Heas:
That three million figure of direct Labor,
because they are - they have got eighteen
industries included and there are probably
more than that.
H.M.Jr:
You think I shouldn't use the figure?
Haas:
I would be inclined not to use those, but
I like the other figure better.
H.M.Jr:
Which figure?
Haas:
The figure that Lubin said, thirty per cent
of the output of the factories and mines are
now going to defense. Twenty per cent of
all durable goods and ten per cent of the
non-durable goods. That gives the magnitude
of the job and it gives the public some pic-
ture of what you have to do in the way of
taxes and selling Defense Bonds.
H.M.Jr:
But you are afraid of the three million figure?
Regraded Unclassified
- 8 -
11
White:
May I have a suggestion, Mr. Secretary?
H.M.Jr:
Just one second.
Haas:
I am, a little. I don't think it is big
enough. You have to say this is only direct
Labor and you have got to explain it, you see,
H.M.Jr:
O.K., Harry.
White:
I thought that I would tell the Bureau of
Labor Statistics that you want a statement
from them and then I would quote from them.
Then they can't attack you. They might
attack the Bureau of Labor Statistics, but
all you are doing is quoting the agency of
the Government which should and is supposed to
know more about it than any other individual
or agency. In other words, if he makes it 8
quotation, it takes the heat off.
Haas:
Well, that is what I said at first, but
Harry, don't you think these other figures
are better?
White:
I think he can use both.
H.M.Jr:
If I could use the three million figure, I
would like to use it.
Haas:
Oh, you could use it. It is that much or
more, and I would tie it up so you are pro-
tected.
H.M.Jr:
Isn't Hendricks the head of that?
Haas:
Yes.
H.M.Jr:
Well, call him up and just tell him what I
am going to use. Will you do that?
Haas:
I will be glad to.
White:
You could get 8 little written note from him.
H.M.Jr:
Well, we are all in the same family, whether they
attack me, it doesn't make much difference. But
just be sure.
Haas:
Probably nobody will attack you.
H.M.Jr:
Morris, do you want to go in that meeting?
12
- 9 -
Morris:
All right, sir.
H.M.Jr:
Anything you want?
Morris:
No, sir.
H.M.Jr:
I think that is a meeting with the Federal
Reserve in there, so I think you could go
into that.
(Mr. Morris and Mr. Haas left the conference.)
H.M.Jr:
Now, Norman, how about you?
Thompson:
I have nothing.
H.M.Jr:
Harold? I hear it was so ethical on the juke
boxes that even Mr. Kuhn is accused of approv-
ing.
Graves:
That is right.
H.M.Jr:
Isn't that wonderful. (Laughter)
Graves:
We have that matter in hand, I think, in
cooperation with the manufacturers and dis-
tributors of the records, and our friend,
Mr. Small, 80 that they all seem to feel
that within & matter of weeks we can sub-
stantially cover the three hundred thousand--
H.M.Jr:
Wonderful.
Graves:
boxes that there are. We have got, I
understand it, to sell this to about ten
thousand proprietors of these boxes in the
different communities. These people think
that under the plan which we agreed to yes-
terday they could pretty shortly cover the
ground on that scale.
H.M.Jr:
Anything else?
Regraded Unclassified
13
- 10 -
Graves:
Well, perhaps now is not the time for me to
report to you about it, but you doubtless
would like a report from me about this matter
that you left with Iseby at lunch yesterday?
H.M.Jr:
Yes.
Graves:
Now?
H.M.Jr:
No.
Graves:
I am ready to tell you.
H.M.Jr:
Unless by my saying no, it holds you up.
Graves:
Not at all. We are going ahead on the con-
clusions we reached yesterday. I can tell
you in two sentences what we are proposing
to do. He is going to call on the union
leaders in his state to select qualified
people from their organizations to be trans-
ferred to--
H.M.Jr:
White will be interested. Say it so White
can hear it.
Graves:
Mr. Iseby, our state chairman in Michigan,
is going to call on the union leaders in
Michigan to recommend to him men qualified
to go around to visit the various plants
and talk to groups of men and interest them
in this Defense Savings Bond program. He
thinks in terms of perhaps six such men,
if he can find that many that are qualified.
They will, of course, be assembled for train-
ing which Iseby himself will give them.
The only difficulty that I can see about it
is the possibility that there may be ob-
jections on the part of the Civil Service
Commission to our employing such men, they
not being experts under the standards of the
Civil Service Commission.
Regraded Unclassified
14
- 11 -
His plan is to employ them for whatever time
might be necessary. It might be thirty days
and it might be sixty days, more or less,
and we had planned first to approach the
Civil Service Commission to find out--
Thompson:
I don't think there would be any trouble on
8 thirty- or sixty-day appointment.
White:
With this suggestion just to throw in the mill,
I think you would get better results if the
union would pay the wages of those men 88
their contribution toward defense, and 1
think you could get them to do that, and the
men that they would select would avoid all
this trouble and then they would come before
these groups, not as Treasury men who were
hired to sell them something, but as union
men who are explaining to them why it is in
all their interests to do certain things.
I think the unions could finance those men
and would be delighted to do it and save all
that problem and get better results.
Graves:
That matter was thoroughly discussed at our
meeting yesterday.
White:
Oh!
Graves:
Mr. Iseby is aware of that point.
White:
I am sorry.
Graves:
And so is our Mr. Hyatt who is the union labor
man in our own staff, and we all agreed that
was preferable provided the unions are in a
position to do it, but Mr. Iseby and Mr.
Hyatt thought there would be some unions
which would not be in a position to do that,
and that unless all were in a position to do
it, it would be better for none to be asked
to do it.
Regraded Unclassified
15
- 12 -
White:
Well, I think you could get some of the
larger unions who would be able to take care
of not only their own needs but would lend
their men and finance them to take care of
some of the lower unions. You ought to get
some of the CIO or AF of L, from some of
their large funds above, to take care of
such cases. You can appeal to them on the
grounds of patriotism and self-interest,
and I think you can get them to spend money.
That is the first opportunity they will have
ever had for them to spend money for speakers
who are not used for the sole purpose of
organizing a union, and I think they might
like the opportunity to show that they are
cooperating with the Government effort.
Graves:
Well, Harry is perfectly right. I agree
thoroughly with everything that he has said,
but I was told, as I say, by Mr. Iseby and
by Mr. Hyatt that we would run into diffi-
culty if we induce certain unions to make
men available at their expense for this
purpose while others decline or are unable
to do it, so we would have to pay some and
let others come in as volunteers.
H.M.Jr:
O.K. All right. Does that clear that up?
Graves:
Well, with that ambiguity remaining, yes.
H.M.Jr:
Well, you are on the march?
Graves:
That is right.
H.M.Jr:
All right, anything else?
Graves:
Nothing else.
H.M.Jr:
Fine.
Graves:
That won't wait.
Regraded Unclassified
16
- 13 -
H.M.Jr:
Fine.
Harry?
White:
I read your speech last night that you are
going to make in Chicago. I think it is
very good. There are some half dozen places
that I don't think I will have any diffi-
culty getting together with Kuhn on to
change. I am troubled about one thing, which
I wonder whether you would give a little
thought to. One of their important points
of interest when you appear to them is going
to be the six percent profit. It has re-
ceived so much publicity. You are coming
down a week later. They are either going to
expect to hear something from you about it
or if there is 8. question - I don't know
whether there is - if there is no question
period, they won't ask you, but I am wonder-
ing whether if you could get a paragraph in
there on the subject which will satisfy
their curiosity and yet treat it now a
little more carefully because there are
certain very fundamental problems which
are raised there.
H.M.Jr:
I don't want to do it, Harry, for reasons--
White:
All right. Then there won't be any oppor-
tunity in which you have to take a position
on that?
H.M.Jr:
I am not going to do it now. Until the
boys have had plenty of time to work on it,
the technicians, I don't want to say anything
more about it. If you will read my testi-
mony, my verbatim report from yesterday's
press conference, which the Washington Post
prints in full this morning, I think you will
be interested, but I am not going to touch
on it until--
Regraded Unclassified
17
- 14 -
White:
Well, I merely wanted to point out that
there are a lot of people interested in it
and if they would rather have you have a
prepared paragraph than have you take any
position--
H.M.Jr:
We haven't got time.
White:
You will avoid the subject completely?
H.M.Jr:
That is right.
Kuhn:
Except for B. phrase about taking the profits
out of war.
White:
Yes, I saw that.
H.M.Jr:
But I am not going to talk about six percent.
White:
That is all right. I was afraid on that.
H.M.Jr:
I want to wait now until Roy Blough does a
job. Did you want to say something, Ed?
Foley:
Well, I was going to say something, but I
think it has been taken care of now. I
was going to say that if you were going to
say anything at all, I think you ought to
say something like you said at your press
conference yesterday, as I saw it reported
in the paper last night
H.M.Jr:
Well, the Post had a--
Foley:
which related it to jarringpeople out
of their complacency and making them under-
stand that everybody, all groups, have to
make sacrifices and not relate it so much
to sopping up the surplus for anti-inflationary
reasons.
H.M.Jr:
Well, I think when you see the speech, you
Regraded Unclassified
18
- 15 -
will all be satisfied,
White:
I think that is different, Ed.
Foley:
Is that what you had in mind?
White:
Yes, I just wondered about anything more he
would say on the subject.
H.M.Jr:
Well, it isn't in the speech, the six percent.
White:
Yes. I have before me a reply to the request
from the vice president of the various agencies
as to what they do and how do they participate
in economic defense. It is a four or five
page - which indicates our activities. It
has been cleared with Mr. Gaston and with
the legal office and with Customs, with
Johnson.
Gaston:
I haven't seen it.
White:
With Johnson, the legal division, I presume,
took care of it. Then I will clear it with
Gaston. But there are two points I want to
raise here that need your comment, and either
you can give a quick reply or save it for
later study, because it is already late.
H.M.Jr:
We will have to save it. I can't do it today.
I am just absolutely choked. Unless you have
got something important, I have got to move,
Harry, I have pot the Russians outside.
White:
The other things can all wait until Monday.
H.M.Jr:
They will have to, unless you need B. yes or
no now.
Schwarz:
I have nothing.
h.M.Jr:
Ed?
Regraded Unclassified
- 16 -
19
Foley:
Here is a letter to the Congressman.
H.M.Jr:
Thank you.
What does she want?
Foley:
She is complaining about unfair labor prac-
tices. She is the secretary of the CIO
workers in that factory, and she wants you
to breach a contract with the Prentice Hall
for the tax services that the Government is
buying because of unfair practices, and we
are telling them there is no legal authority
to do it, but you are asking the people to
determine whether or not there are violations
of the Federal Labor Laws before the contract
is entered into the next time, and you are
asking her to send you a copy of the findings
and determinations of the National Labor
Relations Board when the matter comes up
for consideration. I don't think it binds
you in anything. You are just being courteous.
Thompson:
I wonder whether you need write it at all now.
I acknowledged the letter.
H.M.Jr:
That letter is all right.
Foley:
I don't think it commits us to anything.
Thompson:
I sent you yesterday a notice from this same
person saying the strike was ended.
Foley:
Oh, really?
H.M.Jr:
Talk it over with Ed and the two of you decide
whether the letter should go.
Foley:
The American Bar Association meeting is in
Indianapolis, and I am down for a talk on
Foreign Funds on Monday and on the President's
war powers on Tuesday, which is a continuation
20
- 17 -
of what I did up at Saranac Lake.
Now, should I arrange to have somebody else
do it or is it all right for me to be away
Monday and Tuesday?
H.M.Jr:
It is all right. I didn't know about it. I
knew John was going, but I didn't know that
you were going.
Foley:
I didn't know John was going.
Schwarz:
The one on the President's powers, & good
one ought to be made.
H.M.Jr:
It is all right, sure. Anything else?
Foley:
No.
H.M.Jr:
Herbert?
Gaston:
I have got to correct myself again about the
Krasin. There are no final arrangements made
to pay for her, but she is not being held up
because she probably won't get here until the
latter part of October, if then.
H.M.Jr:
My plans are, the reason we are all balled up,
we had Cabinet at eleven-thirty this morning,
and I have got to go to Hall Roosevelt's
funeral this afternoon, and then right after
that I am leaving, but I will be back either
Sunday night or Monday morning.
Regraded Unclassified
21
September 26, 1941
10:56 a.m.
HMJr:
Hello.
Harry
Hopkins:
Hello.
HMJr:
Harry?
H:
Yeah.
HMJr:
How are you?
H:
Fine.
HMJr:
Harry, you most likely know about the President
calling me the other night.
H:
Yes.
HMJr:
Most likely you were there.
H:
That's right.
HMJr:
Now, Harry, I've twice seen the Russians
H:
Yeah.
HMJr:
and they just left this minute
H:
Uh huh.
HMJr:
and just 80 we understand each other,
they said you sent over Mr. Hazard to them.
H:
Uh huh.
HMJr:
to tell them that they could expect a lot
of buying
H:
Uh huh.
HMJr:
Well, now, had you anything new in mind about
how they are going to pay for it?
H:
No.
HMJr:
What?
Regraded Unclassified
22
- 2 -
H:
Not a thing.
HMJr:
Not & thing.
H:
But here's the amount, it looks like.....
HMJr:
Yeah.
H:
.....it looks like between twenty-five and
thirty million a month to January first,
you see?
HMJr:
Well, that isn't what this fellow asked for
just now.
H:
Well, I know what they're asking for. They're
asking for tremendous sums of money and they're
going to need it.
HMJr:
Yeah.
H:
But they don't have to have it tomorrow, because
they can't - as a matter of fact, the more I see
this - it ien't going to be like the Lend-Lease
and the British ordering planee. It's going to
be our selling them certain numbers of planes
and tanks and 80 forth coming off our production
lines, so they don't place large orders in ad-
vance except for, well, a lot of odds and ends
like brass strip - things like that. But the
big expensive items will be cash on the barrel-
head.
HMJr:
Yeah.
H:
Unless we set up and until we set up some kind
of a technique to get them some real money.
HMJr:
Well, here's the thing, Harry, the President
and you are going to have to make up your mind
about. Does the President want me simply to chip
out some gold or does he want me to look after
their dollar requirements the way I do for the
British Empire and China? See?
H:
Uh huh.
Regraded Unclassified
23
- 3 -
HMJr:
And
H:
Well, that obviously, Henry, you're not going
to handle their dollar requirements up to,
let's say, a billion dollars, are you.
HMJr:
Not out of the Treasury, but I can certainly
be the focal point, if that's what the President
wants.
H:
Yeah.
HMJr:
I mean.....
H:
But in the meantime, the President's position
about the permanent thing 18 pretty much this,
that he's trying to get them cash now 60 that
they can work here from week to week on the
things that are available.
HMJr:
Yeah.
H:
There probably wouldn't be anything else available
anyhow. That he's stalling a little to make up
his mind and watching public opinion about how
he's going to handle the major problem of when
we get into four or five hundred tanks a month
and airplanes a month, which each one you have
to multiply by fifty or a hundred thousand dollars
apiece - whether to use the RFC to loan them the
money or to use the Lend-Lease machinery. Now,
I wish that could be decided now.
HMJr:
Yeah.
H:
The President thinks that apparently that he
can't handle it now on the Hill. There's going
to be an amendment to our bill put in prohibiting
the use of any of this money for Russia.
HMJr:
Yeah.
H:
And the President's going to work awfully hard
to get that defeated, and the more publicity
he can get about that, the better. And that
would, in the President's mind, indicate Cong-
ressional intent, you see?
Regraded Unclassified
24
- 4
HMJr:
Yeah.
H:
Not to exclude Russia.
HMJr:
Yeah.
H:
Which would give him a handle.
HMJr:
Yeah.
H:
And he let Stettinius say down there that we
do not want Russia excluded.
HMJr:
Yeah.
H:
Now Jones, on the other hand, has got his RFC
bill, as I understand it, in such shape that a
similar resolution 18 going to be introduced,
prohibiting him from loaning; and Jones 16 sure
he can defeat that. Bo in either case, we'd
have Congressional intent, and presumably at
that point the President would decide how to
handle it.
Now, in the meantime, the Army have agreed to
give up some things immediately - some things
that are very important.
HMJr:
Yeah.
H:
To do that now, legally, it requires cash.
HMJr:
Yeah.
H:
My judgment is that it's about twenty-five
million dollars a month for the next three
months. Jones has promised them a hundred
million dollars to buy a hundred million dollars
worth of stuff.
HMJr:
Yeah.
H:
Legally, he can advance that money whenever he
wants to, you see? I've told Jones that this
thing is going to cost at least twenty-five
million a month, and it doesn't do any good
Regraded Unclassified
25
- 5 -
to dole this out to the tune of ten million a
month.
HMJr:
Yeah.
H:
Now, at the moment, our interest 18, I think,
to have in their hands, twenty-five or thirty
million dollars cash every thirty days until
such time as the President decides how he's
really going to handle this in a big way.
HMJr:
Yeah.
H:
Now that's the situation.
HMJr:
Yeah.
H:
Now whether that could be handled entirely
by Jones' hundred million or whether - if the
Russians will sell some gold - even a modest
amount BO that they'll have some cash during
the next few months from that source - your
judgment about that 18 better than mine.
HMJr:
Well, if that's what they
H:
If Jones would advance, oh, say fifty million
dollars, see, right away, that would - every-
thing that's for sale to those fellows could
be sold to them for that amount of money.
HMJr:
Well, why doesn't he?
H:
Well, I don't know. I want to talk to you -
Just keep talking to you about it, and
HMJr:
Well, I'm going to bring it up in Cabinet at
eleven-thirty and report this conversation
H:
Good.
HMJr:
and then - and the fact that all they
get out of Jones is ten million dollars
H:
Yeah. They got a promise of a hundred.
26
- 6 -
HMJr:
and they got a promise of ten million
more on October first
H:
Yeah.
HMJr:
and all of that will be used up. The
two tens, on or before October tenth.
H:
oh, it will be - Henry, if
HMJr:
On or before October tenth.
H:
if they'll buy - if they'll buy this
afternoon
HMJr:
Yeah.
H:
what's available
HMJr:
Yeah.
H:
it will all be used up at five o'clock
this afternoon.
HMJr:
Now, I told them that I'm prepared to buy any
reasonable amount of gold for future delivery.
H:
Yeah.
HMJr:
And if they should get this cable off - they
haven't done it yet elthough I told them to
do it yesterday
H:
Yeah.
HMJr:
Now they - the Charge was here and the head
of Amtorg.
H:
Yeah.
HMJr:
They've gone and they're going to cable their
government and they 11 be back here just as
soon as they get an answer.
H:
Yeah.
Regraded Unclassified
- 7 -
27
HMJr:
And if they'll sell me that, I'll buy it and
that would help to whatever amount they're
willing to sell.
H:
Uh huh. All right. Well, you.....
HMJr:
And I'm going to tell it to the President and
then he can go after Jones or not, as he sees
fit.
H:
Yeah. Of course, the thing that 16 in the bag
today - after all, you may get an unfavorable -
they may get an unfavorable wire about the gold.
HMJr:
That's right.
H:
The thing that is definite this afternoon is
Jones' hundred million.
HMJr:
Yeah.
H:
And it could legally be done.
HMJr:
Well, then - and the stuff that's here?
H:
Yeah, the stuff's here immediately.
HMJr:
Well, if I was the President I'd tell him to
go ahead and buy it and make Jones give it
to them.
H:
Yeah. All right, old boy. Now you've got -
have I told you everything?
HMJr:
You told me everything.
H:
All right, Henry.
HMJr:
Thank you.
H:
Good-bye.
Return to
Mr. m Hugh
28
September 26, 1941
I brought up at Cabinet this Russian gold question,
and made my report. The President said, "Oh, I under-
stand from Harry Hopkins they could buy $50,000,000
of goods which is for sale, but," he added facetiously,
"I don't know whether we can get Jesse to give them
any more money."
Then the President asked me whether I had passed
this along to Harriman, and I said, "No." He said, "You
better send a. cable to Harriman through Hopkins."
I am asking Harry White to draft a cable for me,
giving the financial situation of Russia as told to us
today by the man in charge at the Russian Embassy, and
also in regard to what we propose to do about the
$22,000,000 of commitments, and fact that Jones will
give them another $10,000,000 on the first of October.
I would like that prepared as soon as possible.
Regraded Unclassified
10/6/41
29
Copy furnished Mr. Welles when he called
on the Secretary today.
Regraded Unclassified
Treasury Department
Division of Monetary Research
9/27/41
Date
19
To:
Mrs. Zehugh
30
From: L. Shanahan
Original letter and original of
cablegram forwarded to Mr. Hopkins
by Secret Service messenger, Sept. 26,
1941, at 4:50 p.m., from Mr. White's office
This morning Krs. Carr advised that
Kr. Hopkins' secretary sent word
the "telegram went out yesterday
afternoon".
Copy of letter and copy of cablegram
also went to the Secretary of State
by same mossenger.
Regraded Unclassified
31
September 26, 1941
Dear Harry:
The President asked me to pre-
pare a cable to Averill Harriman
in order to bring him up to date
on my conversations with the Russians.
I am inclosing the cable herewith.
I would appreciate it if you would
send this as soon as possible.
Yours sincerely,
/s/ Henry
Mr. Harry Hopkins,
The White House.
Copy to: The Secretary of State.
Regraded Unclassified
September 26, 1941
CARLETIAN
American Enhasey
For 1. Averill Harriman from Secretary of Treasury
For your information the Secretary this morning received
Mr. Gromylee of the Soviet Embassy and Mr. Lunashev of the Astory
Trading Corporation at their request. Mr. Gromyko explained to
Secretary Morgenthan that the 810 million which his overnment
had received from Jesse Jones as the first install-ent of the
150 million advance would be used up before the end of the month
in payments for goods purchased and cash advances for poods ordered.
Vr. Gromyko stated that Jones had promised to advance a second 10-
stallment of 310 million on October 1 which Dr. Grongito understood
vas to last until the next monthly installment to be made on
November 1st. Mr. Grongko explained to Secretary Morgenthau that
the $10 million they would receive would not be nearly enough to
cover their needs. Mr. Greeyke said they sould need about 612 π11-
lion up to October 10 and substantially more than that during the
remainder of the month. Mr. Morgenthau asked his callers how much
more they expected to need during October. They replied that they
could not know. definitely 20 it depended upon the amount of goods
they would be able to order and purchase but they guessed they
might need from $100 to $250 million more during October. The BYEE
would be so large they said because they were required to nake such
large cash advances with the placing of orders.
Secretary Morgenthan repeated to the what he had told the day
before to Mr. Chuvakhin of the Soviet inhassy. Secretary Morgenthau
stated that it was the President's desire to nee that the Soviet
Government would have the dollars it needed to meet current needs
until longer range plans were completed. Secretary Morgenthau told
them that in accordance with the President's desire the Treasury sas
prepared to purchase from the Soviet Government a reasonable mount
of gold for future delivery. The cash on the purchases was to be
rade available 13 needed and the gold was to be delivered within 90
or 120 days or EYEC longer if necessary. Secretary Morgenthau asked
b. Gramyko to transmit that aessage to his government and ascertain
bow much gold the Sovies Government wished to sell to the Treasury
during October on the basis indicated.
940m
Regraded Unclassified
0
o
P
33
Y
TREASURY DEPARTMENT
United States Mint Service
San Francisco, Celif.
September 26, 1941
Secretary of the Treasury,
Treasury Department,
Wushington, D.C.
Attention E. Merle Cochran
Dear Sir:
I an enclosing copy of a letter that I have
today handed to the Federal Reserve Bank with check;
also six copies of memorandum form 42-R.
Hoping you will find everything to order, and
assuring you that I an glad of the opportunity of
serving you at any time, I DE
Respectfully,
/=/ P. J. Haggerty
Superintendent
Copy:mew 9/29/41
Regraded Unclassified
C
o
P
34
Y
THEASURY DEPARTMENT
United States Mint Service
San Francisco, Calif.
September 26, 1941
Federal Reserve Bank,
San Francisco, Calif.
Gentlemen:
There was on September 18, 1941 delivered
to the United States Mint, San Francisco, 161,472.20
ounces of gold which arrived in San Francisco on the
SS "Menjinsky" for the account of the State Bank of
the U.S.S.R., Moscow. We were instructed by tele-
gram from D. W. Bell, Acting Secretary of the Treasury
(copy of which is attached) to instruct the Federal
Reserve Bank of San Francisco to transfer by tele-
gram to the Federal Reserve Bank of New York, for
credit of the Secretary of the Treasury Special Account,
and to include in the telegram the number of
fine ounces
161,448,886
dollar value
$5,650,711.01
Mint charges
$161.50
net amount
$5,650,549.51
for which latter amount we are delivering you our check.
The amount of one-fourth one one per-cent
(1/4%) handling charge is $14,126.78.
Respectfully,
h/w
Superintendent
Copy:mew 9/29/41
UNITED STATES MINT
BULLION DEPOSIT - MEMO REPORT
SAN FRANCISCO, CAL
Mini Form 428
& 4244 des
sept. 18, 1941
Memos Required 6
Silver Price FINE Guiz)
SOURCE DATA
Date
by Depositor
or Class
portor FEDERAL RESERVE BANK OF SAN FRANCISCO
Other Data
Handling Chip. to be computed
RUSSIA
State
KCCT: 9-DEHAL RESERVE BANK OF NEW YORK
but not charged.
County
Ca. FORETARY OF THE TREASURY, SPECIAL ACCOUNT.
M.T. CHG. ON TCT T.
35
Mine
Description
Assay
WEIGHTS
ASSAY CERTIFICATE
Number
Before Melt
Retining
After Melt
PINE OUNCES
M
of Deposit
FINENESS
Ouncea
Due
chg.-cis,
GOLD
Ounces
SILVER
Dec
Gold
Silver
BUXES
Base
/
per nz,
Ounces
Dec
Dunces
Dec
X 104
5162
7618.09
7320.76
999.9
(000,1)
7320.027
30 5-B
5163
7503.62
7600.34
999.8
(000.2)
7598.819
10
9-12
5164
7514.77
7673.20
999.9
(000.1)
"572.432
30 13-16
5165
7560.31
7538.28
999-9
(000 1)
7537.526
30 17-20
5166
7738.70
7709.78
999.9
(000.1)
7709.009
30 2-24
5167
7590.76
7629.38
999.9
(000.1)
7628.617
30 25-28
5168
7544.50
7849.69
999.9
(000.)
7848.505
30 29-32
5169
7412.70
7449.45
999.9
(000.1)
7444.705
30 33-36
5170
7511.95
7613.52
999.9
(000 1)
7612-758
30 37-40
51.72
7577.44
7576.83
999.9
(000.1)
7576.072
30 41-43
5172
56L7.82
5649.03
999 9
(000.1)
5648.465
ABLE BY CHECK
161,472.20
NOTE 161 THIS 466 REPORT IS FOR THE INFORMATION
Total
Total
EFT AS NOTED
OF THE DEPOSITOR AND 15 OF NO OTHER VALUE
161,448,886
VALUES
CHARGES
GOLD
SILVER
Handling Charge 314,126.70
Melting
Belining
Hundling
Total
& 5,650.711.01
$
$161.50
$
$
a
$
but not deducted,
Bara
$5,650,549.51
Cash
Check
NET VALUE
Regraded Unclassified
TTED. STATES MINT
BULLION DEPOSIT - MEMO REPORT
AN FRANCISCO, CAL
Mini Form (2R
Memos Required
Silver Price
SOURCE DATA
if
and RESERVE Date BANK 09 3AN PRANCISCO Depositor
= of 256 handling
Class
FINE
GOLD
e
ACCT: FEDERAL RESERVE BANK OF Non YORK
Other Data
chg. computed but not charged
State
RUSSI..
CH: SECRETARY OF THE TREASURY, SPECIAL ACCOUNT
County
MLT.CHG.ON TOT. WI.
Mine
36
Jal.
Description
Assay
WEIGHTS
ASSAY CERTIFICATE
of Deposit
Number
Before Melt
After Malt
Refining
FINENESS
PINE OUNCES
D
d'
Ounces
Dec
chg-cta.
Ounces
GOLD
BUXES
Dec
Gold
Silver
SILVER
Base
per oz.
Ounces
Dec
Qunces
Dec
29
1-4
5151
7846.73
7535.08
999-9
(000.)
7534.326
29
5-8
5152
7585.92
7385.21
999.9
(000.1)
7384.471
29
9-12
5153
7856.14
7608.21
999.9
(000.1)
7607.449
29
13-16
5154
7785.96
7714.71
999.9
(000.)
7713.938
2)
17-20
3155
7618.99
7570.85
999-9
(000.1)
)
7570.092
29
21-24
5156
7531.10
7678.67
999.8
(000.2)
7677.134
29
25-28
5157
7578.27
7959.74
999,9
(000.1)
7958.944
29
29-32
3158
7584.47
7790.96
999-9
(000.)
7790.200
29
33-36
5159
7467.33
7315.01
999.9
(000.1)
7314.278
29
37-40
5160
7550.18
7613.83
999,9
(000.1)
7613.068
29
41-62
5161
3846.45
3688.02
999.9
(000.1)
3687.651
SLE BY CHECK
NOTE: THIS REPORT IS FOR THE INFORMATION
Total 951.551
Total
X AS NOTED
OF THE DEPOSITOR AND is OF NO OTHER VALUE.
VALUES
C H A R G El S
GOLD
SILVER
Melting
Refining
Handling
Total
$
$
$
$
$
in
M
Bora
$
Cash
Check
NET VALUE
Regraded Unclassified
37
FEDERAL RESERVE BANK
OF NEW YORK
September 26. 1941.
Sir:
Attention: Mr. E. Merle Cochran
We have today received the following tested telegram dated
September 26, 1941 from the Federal Reserve Bank of Sen Francisco:
"VE CREDIT YOU 85,650,549.51 FOR THE CREDIT or
TO SECRETARY OF THE TREASURY SPECIAL ACCOUNT
covering 161,448.886 FINE OUNCES GOLD OF DOLLAH
VALUE OF $5,650,711.01 QUARTER OF ONE PER CENT
HANDLING CHARGE $14,126.78 MINT CHARGES $161.50.
THIS GOLD ARRIVED IN SANFRANCISCO ou $ S
MENJINSKY on SEPTEMBER 18, 1941 CONSIGNED BY
STATE BANK OF THE USSR MOSCOW. MINT REPORTS ARE
BEING FORWARDED BY MAIL. THIS DEPOSIT NAME BY
THE U. S. MINT SANTRANCISCO"
In accordance with the above telegram and pursuant to our tole-
phone conversation of today we have credited the Secretary of the
Treasury, Special Account on our books $5,650,549.51 and have made the
appropriate entries in the transcript of the Secretary of the Treasury,
Special Account to reflect the 1/4 of one per cent charge of $14,126.78
AG E handling charge on gold.
Respectfully,
/=/ D, J. Cameron,
D. J. Cameron,
Manager, Foreign Desartment.
The Honorable,
The Secretary of the Treasury.
Treasury Department,
Washington, D. C.
Snc.
Copy:wee:3-29-41
Regraded Unclassified
38
September 26, 1941
At lunch today, Claude Wickard showed me B copy
of the memorandum from the President which put it up
to Claude as to why either he or the President
shouldn't come out and say that as soon as cotton
or wheat reached parity, the government should sell
some of its stocks on hand. I was both surprised and
pleased to read the President's memo.
Claude also showed me E. 3-page memorandum in
which he told the President this wasn't the right
time to do it. He asked me what I thought about it.
I told him that my first criticism was his saying
this was not the right time because there never would
be & right time. I told him that I hoped the President
would say something now.
Regraded Unclassified
STRICTLY CONFIDENTIAL
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
39
DATE September 26,1941
TO
Secretary Morgenthau
FROM
Mr. Haas
Subject: Employment in the Aviation Manufacturing Industry.
1. Employment in the aviation manufacturing industry
stood at 260,000 in July 1941, the latest month for which
data are available. This is the highest figure ever reached,
and represente an increase of more than 50 percent since the
beginning of this year, and of 125 percent since & year ago.
The July 1941 figure excludes employment in the Ford and
Buick engine plants, estimated at 3,000 workers.
2. The average monthly increase in employment has been
growing larger. The increase in July of this year was 17,410
and in the preceding month, 18,100. In the corresponding
months of 1940, however, the increases averaged only 10,800.
3. All of the major manufacturing plants contributed
to the recent increases in employment. For the first seven
months of 1941, Lockheed Aircraft Corporation reported an
increase of over 11,000 employees. During the same period,
Douglas Aircraft Company, Inc., added almost 10,000 factory
workers to its pay roll, and the Glenn L. Martin Company re-
ported an increase of 7,000. Thus, three companies accounted
for increases aggregating 28,000 out of a total increase of
92,000 for the entire industry during this period.
4. The attached chart shows total employment in the
industry, and in selected companies, since January 1937. The
actual figures plotted in the chart are given in the attached
tables.
Attachments
Regraded Unclassified
STRICTLY CONFIDENTIAL
Employment in Aviation Manufacturing Industry
(Airplanes and Airplane Engines)
40
1937-1941
:
:
:
:
:
: 1937
:
1938
11
1939
:
1940
:
1941
:
:
:
:
:
Airplanes
Jan.
22,100
23,700
25,251
58,000
138,900
Feb.
60,500
149,700
Mar.
24,100
24,200
27,875
64,500
155,800
Apr.
67,000
167,048
May
73,000
175,371
June
25,200
22,800
35,973
80,000
190,200
July
90,000
204,724
Aug.
97,448
Sept.
23,400
22,050
41,425
105,362
Oct.
115,241
Nov.
123,492
Dec.
23,800
24,450
52,800
131,200
Airolane Engines
Jan.
5,500
6,500
6,989
13,900
38,550
Feb.
15,800
40,468
Mar.
6,000
6,600
7,825
17,300
42,869
Apr.
18,600
44,849
May
20,800
48,546
June
6,600
6,900
8,727
22,900
51,816
July
25,400
54,702
Aug.
27,019
Sept.
6,400
6,772
9,289
28,981
Oct.
32,633
Nov.
34,199
Dec.
6,600
6,847
12,600
36,045
Total Industry
:
Airplanes
and
Airplane
Engines
Jan.
27,600
30,200
32,240
71,900
177,450
Feb.
76,300
190,168
Mar.
30,100
30,800
35,700
81,800
198,669
Apr.
85,600
211,897
May
93,800
223,917
June
31,800
29,700
44,700
102,900
242,016
July
115,400
259,426
Aug.
124,467
Sept.
29,800
28,822
50,714
134,343
Oct.
147,874
Nov.
157,691
Dec.
30,400
31,297
65,400
167,245
Office of the Secretary of the Treasury,
Division of Research and Statistics.
September 26, 1941.
Source: Bureau of Labor Statistics.
Regraded Unclassified
STRICTLY CONFIDENTIAL
Employment of Selected Aircraft Manufacturing Corporations
1937-1941
41
:
:
:
:
:
:
1937
:
1938
:
1939
:
1940
:
1941
:
:
:
:
:
Bell Aircraft Corp.
Jan.
615
222
654
859
4,309
Feb.
865
5,043
Mar.
850
290
912
896
5,754
Apr.
840
6,540
May
873
7,036
June
508
440
1,410
1,192
7,738
July
1,480
7,743
Aug.
1,963
Sept.
718
235
703
2,413
Oct.
3,355
Nov.
3,597
Dec.
213
606
799
3,865
Boeing Aircraft Co. - Seattle
Jan.
1,834
1,493
2,380
5,137
6,939
Feb.
4,942
8,104
Mar.
1,726
1,700
2,749
4,759
7,960
Apr.
4,198
7,740
May
5,190
7,739
June
1,249
1,736
2,989
5,882
7,920
July
6,571
8,720
Aug.
6,926
Sept.
1,109
1,798
3,985
6,940
Oct.
6,391
Nov.
5,351
Dec.
1,380
2,285
4,749
5,657
Consolidated Aircraft Corp.
Jan.
3,169
2,540
968
2,837
13,135
Feb.
3,477
14,097
Mar.
3,246
2,518
819
3,807
14,251
Apr.
4,349
13,886
May
5,040
13,547
June
3,099
2,104
832
5,821
14,007
July
6,743
15,238
Aug.
7,836
Sept.
2,617
989
1,408
9,289
Oct.
11,018
Nov.
12,355
Dec.
2,580
981
2,540
12,118
Regraded Unclassified
STRICTLY CONFIDENTIAL
Employment of Belected Aircraft Manufacturing Corporations
1937-1941
(continued)
42
:
:
:
:
:
:
1937
:
1938
: 1939
:
1940
:
1941
:
:
:
:
:
Ourtiss-Wright Corp. -- Buffalo
Jan.
1,241
2,211
3,802
4,380
8,273
Feb.
4,744
8,902
Mar.
1,500
2,347
2,939
5,016
9,607
Apr.
5,213
9,946
May
5,698
10,537
June
1,933
2,310
2,848
6,314
11,431
July
6,531
13,191
Aug.
6,597
Sept.
2,202
2,736
1,562
6,824
Oct.
7,682
Nov.
7,889
Dec.
2,007
3,491
3,447
8,010
Douglas Aircraft Oo., Ino.
Jan.
5,591
6,328
4,334
11,952
17,054
Feb.
12,077
18,057
Mar.
5,961
6,173
4,177
13,119
19,313
Apr.
14,033
21,502
May
14,656
22,678
June
6,653
4,672
5,445
14,957
25,019
July
14,662
25,940
Aug.
14,898
Sept.
5,532
4,028
6,318
14,219
Oct.
14,158
Nov.
14,726
Dec.
6,771
4,110
10,362
16,120
Lockheed Aircraft Corp.
Jan.
910
1,577
2,305
5,157
11,544
Feb.
4,768
12,031
Mar.
1,094
1,594
3,509
4,362
13,028
Apr.
4,400
14,829
May
5,016
15,418
June
1,338
1,797
5,699
5,591
19,640
July
6,599
22,000
Aug.
7,296
Sept.
1,383
1,997
5,324
7,582
Oct.
8,517
Nov.
10,056
Dec.
1,428
2,123
5,156
10,904
Regraded Unclassified
STRICTLY CONFIDENTIAL
Employment of Selected Aircraft Manufacturing Corporations
1937-1941
(continued)
43
:
:
:
:
:
:
1937
:
1938
:
1939
:
1940
:
1941
:
:
:
:
:
Glenn L. Martin Co.
Jan.
1,364
1,814
2,905
10,984
14,039
Feb.
9,407
13,771
Mar.
1,716
1,892
4,092
9,133
13,216
Apr.
9,010
15,482
May
9,357
16,180
June
2,044
2,134
6,029
9,133
18,313
July
9,513
21,082
Aug.
11,200
Sept.
2,032
2,341
10,070
10,019
Oct.
11,414
Nov.
12,871
Dec.
1,818
2,777
11,174
13,829
North American Aviation, Inc.
Jan.
829
1,713
2,223
4,049
7,767
Feb.
4,324
8,247
Mar.
889
1,935
2,457
4,154
8,736
Apr.
4,371
9,590
May
4,336
9,803
June
841
2,400
3,125
4,782
9,770
July
4,918
9,693
Aug.
4,916
Sept.
1,272
2,685
2,992
5,111
Oct.
5,828
Nov.
6,064
Dec.
566
2,530
3,795
6,867
United Aircraft Corp.
(excluding Pratt & Whitney)
Jan.
2,350
2,245
1,826
2,757
7,011
Feb.
3,051
7,652
Mar.
2,444
2,168
1,766
3,468
7,418
Apr.
3,735
7,492
May
3,912
7,718
June
2,497
1,972
1,952
4,282
7,974
July
4,823
7,963
Aug.
5,016
Sept.
2,439
1,880
2,123
5,445
Oct.
6,010
Nov.
6,105
Dec.
2,338
1,774
2,588
6,401
Regraded Unclassified
STRICTLY CONFIDENTIAL
Employment of Selected Airoraft Manufacturing Corporations
1937-1941
(continued)
44
:
:
:
:
:
1937
--
1938
:
1939
:
1940
--
1941
:
:
:
:
:
Vultee Aircraft, Inc.
Jan.
364
742
4,057
Feb.
938
4,325
Mar.
440
959
4,544
Apr.
1,008
5,096
May
1,334
5,022
June
560
533
2,127
4,955
July
2,618
4,864
Aug.
2,857
Sept.
430
288
3,531
Oct.
3,652
Nov.
3,733
Deo.
334
662
3,851
Office of the Secretary of the Treasury,
Division of Research and Statistics.
September 26, 1941
Source: Bureau of Labor Statistics.
Regraded Unclassified
STRICTLY CONFIDENTIAL
Employment of Selected Airplane Engine Corporations
1937-1941
45
:
:
:
:
:
:
1937
:
1938
:
1939
:
1940
:
1941
:
:
:
:
:
Allison Engineering Co.
Jan.
218
262
454
1,114
6,422
Feb.
1,261
6,720
Mar.
229
297
466
1,610
7,012
Apr.
1,958
7,114
May
2,766
7,670
June
238
339
558
3,254
8,133
July
3,917
8,420
Aug.
4,595
Sept.
238
382
642
5,282
Oct.
6,280
Nov.
6,295
Dec.
266
439
901
6,394
Continental Motors Corp.
(Airplane Engine Division)
Jan.
151
153
134
288
953
Feb.
344
1,057
Mar.
153
152
138
358
1,063
Apr.
368
1,186
May
378
1,235
June
162
144
171
388
1,245
July
398
1,230
Aug.
382
Sept.
135
146
203
567
Oct.
732
Nov.
855
Dec.
152
142
243
875
Lycoming Division of Aviation Manufacturing Corp.
Jan.
849
729
519
581
1,607
Feb.
638
1,661
Mar.
889
704
521
657
1,645
Apr.
711
1,695
May
765
1,717
June
901
549
573
819
1,729
July
873
1,706
Aug.
970
Sept.
756
51.4
644
1,080
Oct.
1,459
Nov.
1,320
Deo.
762
506
689
1,576
Regraded Unclassified
STRICTLY CONFIDENTIAL
Employment of Selected Airplane Engine Corporations
1937-1941
46
(continued)
:
:
:
:
:
:
1937
:
1938
:
1939
:
1940
:
1941
:
:
:
:
:
Pratt & Whitney Aircraft
Jan.
1,931
2,567
2,264
5,642
12,287
Feb.
6,549
13,483
Mar.
2,119
2,489
2,659
7,158
14,286
Apr.
7,541
14,865
May
7,765
15,824
June
2,384
2,555
3,066
8,504
16,633
July
9,121
17,524
Aug.
9,449
Sept.
2,471
2,384
3,394
9,406
Oct.
9,794
Nov.
10,377
Dec.
2,618
2,227
5,022
11,228
Wright Aeronautical Corp.
Jan.
2,254
2,607
3,398
5,411
12,847
Feb.
6,081
13,136
Mar.
2,515
2,705
3,771
6,537
13,415
Apr.
6,984
13,849
May
7,882
14,241
June
2,800
2,930
3,997
8,682
14,643
July
9,491
15,150
Aug.
10,151
Sept.
2,690
3,184
4,026
10,726
Oct.
11,240
Nov.
11,864
Dec.
2,608
3,374
5,141
12,408
Office of the Secretary of the Treasury,
Division of Research and Statistics.
September 26, 1941.
Source: Bureau of Labor Statistics.
Regraded Unclassified
EMPLOYMENT IN AVIATION MANUFACTURING INDUSTRY
Factory Wage Earners
1941
STRICTLY CONFIDE TIAL
EMPLOYEES
Thousands
EMPLOYEES
Thousands
Total Industry (Airchaft and Engineed
200
280
240
240
200
100
140
160
120
120
80
80
40
40
o
J
E
3
-
.
N
-
5
E
J.
.
.
,
#
-
-
1
-
J
=
M
J
,
-
4
a
M
of
&
N
o
1937
1938
1989
(940
1941
Selected Aircraft Manufacturing Companies
Salected Airplane Engine Companies
EMPLOYEES
EMPLOYEES
EMPLOYEES
INSURANCE
The Aircraft Ce
Throsends
Dran L Martin
a
Thousands
Wright Carp:
MS
72.5
20.0
(1)
200
IFS
100
17.5
15.0
ITA
15-0
12.5
- - -
10.0
100
75
100
15
so
13
:-
as
:
:
a
1987
1938
1989
1940
1991
as
15
#
Prett and Whitney Acrents
1117
-
1942
1941
IFS
15.0
.
Consolidated Airmaft Corp
HIT
1939
1940
1941
are
(A D
R.S
Bowing Aircraft Co.:
100
es
24.8
15
00.00
IPS
10
1.5
15.0
2.5
"
113
e
13
10.0
H37
1938
----
1943
THE
N.
Aircraft Carp.
il
11
1937
1938
101
1940
1941
as
15.00
Curtis-Wright Card
El
- - - -
IF &
as
:
15.0
ICA
5
⑉
1938
1935
1948
1941
17,5
Y,5
15.2
Engineering a
100
10
12%
13
23
13.5
5.0
e
73
1437
1438
1131
IRRO
TEAT
19,6
25
Marth Americar évalue, be
11
7.5
5
14
1937
1938
1939
1340
1941
NO
14
United docraft Carp.
5
Recharg - - missay
HIT
non
1119
1940
1447
=
2.5
TA
Lecoming Division of
Artation Manufacturing Carp
5.0
e
11
an
1938
1939
1840
(14)
a.e
2,5
Beil dirensft Carp
16
7.5
P
2
1937
1938
1011
1945
Her
INDI
out
1981
1948
-
so
s.c
13
Vultas Antaft Corp
Mature
I 1 1
2.5
7.5
LE
a
a
9
1931
1936
1937
1942
The
1937
1948
HH
1948
(94)
....
INS Regraded Unclassified
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
M
48
DATESeptember 26,1941
2
Secretary Morgenthau
FROM
Mr. Kamarck
Subject: Airplane Deliveries to the British
Summary
1. A total of 52 planes shipped is reported in the
latest statement received, 30 to the United Kingdom, 12
to the Far East (to New Zealand) / and 10 to the Middle
East.
2, The 12 Lockheed Hudsons delivered during this
period to New Zealand represent the first shipment of
planee to the British Pacific forces since the middle of
June.
3. In the past 33 weeks, the British have received
2,003 planes from the United States or an average of 61
planes & week, The total was divided in the following
manner:
To the United Kingdom
53 percent
M
. Middle East
36
If
"
-
Far East
11
-
Regraded Unclassified
49
Division of Monetary
- 2 -
Research
Airplane Shipments to the British
(From February 1 to September 20 by air
January 11 to August 30 by sea)
Table do - Shipments by Area
Total
Latest
Reported
Week
To Date
To the United Kingdom
T.1 :ht and medium bombers
23
880
Heavy bombers
0
43
Naval patrol bombers
0
73
Pursuit
7
64
Total to United Kingdom
30
1,060
To the iddle East
Light and medium bombers
10
200
Pursuit
0
516
Total to Widdle East
10
716
To the Par East
Light and medium bombers
12
18
Naval patrol bombers
0
9
Pursuit
0
145
Trainers
0
55
Total to Far East
12
227
Totals
Light and medium bombers
45
1,098
lleavy bombers
0
43
l'aval patrol bombers
0
82
Pursuit
7
725
Trainers
o
55
Grand Total
52
2,003
Regraded Unclassified
- 3 -
Division of Monetary
50
Research
Table B. - Shipments by Types
Total
Latest
Reported
Week
To Date
Bell Airacobra (P-39)
7
55
Boeing B-17
0
21
Brewster Buffalo
0
145
Consolidated Catalina
0
82
Liberator
0
22
Curtiss Tomahawk
0
516
Douglas Boston I
0
1
Boston II
0
72
Boston III
19
232
Glenn Martin Maryland
0
150
Grumman Martlet II
0
9
Lockheed Hudson I
0
1
Hudson III
26 *
229
Hudson IV
0
18
Hudson V
0
344
North American Harvard II
0
55
United Chesapeake
0
51
Grand Total-All Types
52
2,003
* One overdue at destination.
- 4 -
Division of Monetary
Research
51
Table C. - Plane Deliveries to the British by Weeks
Light
Naval
Week
and Medium
Heavy
Patrol
Ended
Bombers
Bombers
Bombers
Pursuit
Trainers
Total
Feb.8*
22
-
3
-
-
25
Feb.15*
39
-
-
100
-
139
Feb.22*
35
-
-
27
-
62
Mar.1*
7
-
5
25
-
37
Mar.8*
16
-
3
10
#
29
Mar.15*
26
1
4
-
-
31
Mar.22*
17
-
2
22
-
41
Mar.29*
25
-
3
18
-
46
Apr.5*
21
-
7
73
-
101
Apr.12*
21
2
2
27
-
52
Apr.19*
20
NW
3
4
5
-
32
Apr.26*
23
2
3
-
28
56
May 30
61
1
2
15
27
106
May 10#
36
1
8
10
-
55
May 17*
61
13
7
19
-
100
May 25*
30
10
-
25
-
65
June 1*
28
5
5
21
-
59
June 8#
37
2
c
7
-
-
46
June 15*
26
1
4
20
-
51
June 22#
28
-
4
52
-
84
June 29*
45
-
1
50
-
96
July 6*
19
-
3
20
-
42
July 13*
34
-
3
48
-
85
July 20th
41
-
1
32
-
74
July 27*
45
-
-
24
-
69
Aug.3#
45
-
-
11
-
56
Aug.10#
53
1
-
15
-
69
Aug.17*
49
-
-
12
-
61
Aug.24*
36
1
-
11
-
48
Aug.30*
44
-
-
5
-
49
Sept.6*
29
-
1
4
-
34
Sept.13*
34
-
-
17
-
51
Sept.20*
45
-
-
7
I
52
1,098
43
82
725
55
2,003
# The date given is 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 September 20 would report the
shipment of planes by water for the week ending August 30.
Regraded Unclassified
TREASURY DEPARTMENT
52
INTER OFFICE COMMUNICATION
DATE Sept. 26, 1941
TO
Secretary Morgenthau
FROM
Mr. Haas M.
During my discussion with Dr. Lubin concerning defense
employment figures, he mentioned that he prepares each week a
memorandum which he calls "The Economic Picture" and which 1s
given only to the President. The memorandum, he said, frequently
contains statistics not generally available.
Dr. Lubin asked me to check with you to see if you
would be interested in the memorandum. If so, he will be glad to
send over a copy for your use.
yes. Told Haas office E17
Regraded Unclassified
53
September 26, 1941
Mr. Archibald Macheish, Librarian
Library of Congress
Washington, D. c.
Dear Archibald:
the plan for plecing the Papero* is the
Library of Congress, which you discussed with Mr. Guer,
make with My approval. 4a I understand 16, all father's
papers, and all My papere up to 1933, will @ to the Library
of Congress. All 4 papers and documents einee 1933 will
be photostated or transcribed, the originals will thes go
to the President's Mbrary and the copies, is idention]
order. will be placed with the other "Norgenthau Papers'
se that the Library of Congress file will be complete.
It is also my understanding that you will place at
Mr. Geer's disposal one reom is the Library of Congress
Annex, where those materials will be progressively propared
for the Document Division. The Hand of the Document Division
and Mr. Gaer can work out the details of this procedure.
I - grateful to you for the interest and trouble
you are taking in this matter.
Sincerely yours,
(Signed) 1. Morgenthau, Jr.
Joich
File MM.Channecy
Regraded Unclassified
REPER
m
RT/dh
Ne
51
THE FOREIGN SERVICE
OF THE
UNITED STATES OF AMERICA
Hotel Richemond, Geneva
IMPARTMENT el em
AMERICAN CONSULATE
Geneva, Switzerland, September 26, 1941
PERSONAL
Dear Mr. Secretary,
I have just spent ten weeks in France. It
occurs to me that you and the Secretary of State
might be interested in hearing how I was struck by
what I saw there, and I have written some notes,
which are going forward to you by the same valise
that takes this. I am not showing these notes to
anyone except the United States Consul here, by
whose courtesy I am having them typed. For obvious
reasons (my wife lives in France and I want to con-
tinue to go there) I should prefer that they should
be regarded 6.8 strictly confidential.
It did not seem to me that the financial situa-
tion in France, in present circumstances, 18 worth
wasting time over. About the only point of importance
18 that, as far as I can ascertain, the stories repeated
in the English and American press about France having
agreed to pay costs of German occupation in gold or
convertible exchange are at least premature.
Please remember me very kindly to Mrs. Morgenthan
and to your sona, and believe me, with kind personal
regards,
Sincerely yours,
Royalt Ther
The Honorable
Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D.C.
Regraded Unclassified
55
IRVING BERLIN
September 26, 1941
Hon. Henry Morgantheau, Jr.,
Secretary of the Treasury,
Washington, D. C.
Dear Mr. Morgantheau:
Your nice letter of September 22nd
was forwarded to me here. Please accept my
grateful thanks for it.
I need not tell you how pleased I
am about "Any Bonds Today?". The reaction to
it is much better than I ever hoped for, and
your staff deserves an awful lot of credit for
the way they handled it. Quite frankly, no
publisher could have done anywhere near as good
a job.
It makes me very happy to know that
the song has been of some help to your Defense
Bond program.
Thanking you again for that very
nice letter, I am,
Most sincerely,
Regraded Unclassified
56
September 26, 1941.
Dear Jabs:
1 appreciate your telegraphing - your reaction
to the newspaper reports of 4 recent statement
before the Ways and Rease Committee. It secure to B6
that you might like to 000 a verbatin account of Ky
press conference on the subject as printed today in
the Washington Post.
with cordial regards,
Sincerely,
(Signed) Henry
Dr. Jacob Viner,
6584 Removed Avenue,
Chicago, Illinois.
Enclesure.
GRF/dbs
Regraded Unclassified
57
September 26, 1941.
Dear Jake:
I approciate your telegraphing no your reaction
to the newspaper reports of my recent statement
before the Ways and Means Committee. It occurs to no
that you night like to ... a verbatin account of my
press conference on the subject as printed today is
the Washington Post.
with cordial regards,
Sincerely,
(Signed) Henry
Dr. Jacob Viner,
5554 Kenweed Avenue,
Chicage, Illinois.
Enclesure.
GMF/dbs
Regraded Unclassified
58
September 26, 1941.
Dear Jake:
I approciate your telegraphing no your reaction
to the nevepaper reports of my resent statement
before the Vays and Means Committee. It occurs to -
that you night like to ... a verbatin account of my
press conference on the subject as printed today in
the Washington Post.
with cordial regards,
Sincerely,
(Signed) Henry
Dr. Jacob Viner,
5854 Kenwood Avenue,
Chicago, Illinois.
Enclesure.
GEF/dbs
Regraded Unclassified
Treasury Department
7l X
TELEGRAPH OFFICE
59
45w
wc43 FO 24
1941 SEP 25 PM 735
CHICAGO ILL SEP 25 1941 545P
SECY OF TRSY
WASHNDC
REPORT OF YOUR PROPOSAL FOR SIX PERCENT CEILING ON PROFITS VERY
DISTURBING HOPE YOU WILL NOT COMMIT YOURSELF FURTHER WITHOUT
CAREFUL AND CAUTIOUS CONSIDERATION
JACOB VINER
735p
Regraded Unclassified
September 26, 1941
60
To:
Mr. Harold N. Graves
Subject:
PROGRESS REPORT FROM DEFENSE SAVINGS STAFF
SALE OF BONDS
Actual cash receipts from the sale of E, F and G Bonds
from September 1st through September 23rd were $173,727,000, which
is a decrease of 14.7 per cent over the same period in August.
Sales from August lst through August 23rd were $211,206,000. Sales
from July lst through July 23rd were $250,123,000.
DIRECT MAIL
In 16 days the industrial mailing to 397,531
associations, corporations, etc. has produced $1,571,150 in
direct orders for F and G Bonds at a cost of $4,500. Reprints
of the Secretary's Boston speech mailed six days ago have brought
orders of $92,097 to date.
FIELD FORCE
Charles H. Roloson, Jr. of Baltimore has been
appointed Maryland State Chairman, and J. Francis McDermott,
Regraded Unclassified
- 2 -
61
Nebraska State Chairman. There are only four States for which
leadership has still to be found: Delaware, Kentucky, Louisiana,
New Hampshire, North Dakota and South Dakota. The status of
State organizations as of this date is shown by the attached map.
PRESS
A wire to 200 principal daily newspapers suggesting
editorial comment on Retailers-fer-Defense week preduced 57
editorials according to a partial survey. Usage of advance
material on Retailers-for-Defense week by papers which have mailed
in copies is shown in the scrap book herewith. See full page on
the Canton, Ohio demonstration in the current issue of LIFE.
Second scrap book indicates some results of distribution of
Minute Man art material.
Direct reports by newspapers on use of the Defense Bond Quiz
show 49,582 quizzes printed to date.
Carrier boys of the Philadelphia Evening Bulletin actually
sold 100,300 Defense Savings Stamps in the first week of a campaign
among Bulletin subscribers.
Regraded Unclassified
- 3 -
62
RADIO
Song "I Am A Military Man, Now" is scheduled for
next week's "Millious for Defense" program. One hundred Navy
songs have been referred for inclusion in future programs of
"For America We Sing". In cooperation with the War Department,
a special transcription of "Arms For the Love of America" with
Aray introduction and closing announcement has been sent to all
stations. Transcription of "Ballad of the Leatherneck Corps" with
Treasury Department introduction and Defense Savings closing was
sent to all stations.
Announcements have been arranged for all broadcasts of World
Series games. One-minute dramatized announcements for October
have gone to all stations, with report stubs and return envelopes.
Also completed and distributed: Women's and Farm program announce-
ments for October, Women's Club scripts, and special announce-
ments for football broadcasts.
Advance schedule already shows eight network commercial
programs per day promoting the Defense Savings Program.
Regraded Unclassified
63
RETAILER ACTIVITIES
A poster "Let's Be Thankful for America" is in
preparation for distribution to a million stores as part of the
Thanksgiving Stamp sales program.
The Christmas retail program getting under way urges stores
to promote the sale of Bonds and Stamps generally and as gifts;
pay bonuses in Bonds and Stamps; install payroll allotment plans.
ANY BONDS TODAY?
In the near future 1,020,000 copies of "Any Bonds Today"
will have been distributed. The average song hit sells about
400,000 copies, Steps are being taken to place the song in the
number one position on the country's 275,000 juke boxes.
TREASURY HOUSES
In New York $22,672.35 Stamps were sold, and 4,781
albums were started in 19 days. In Boston $34,264.80 Stamps were
sold and 3,922 albums were started in 18 days.
AMERICA PREFERRED
Due to increasing number of requests from State Adminis-
trators 200 additional prints of the film have been o rdered.
Regraded Unclassified
RANDAWNALLY
LOOSE LEAF OUTLINE MAP
GE UNITED STATES
COPYRIGHT 11 MANE COMPANY EMILADO
Regraded nclassified
n°
MAIN
ml
NEW
we
-
VANTORIA
i is
1 1
own
required
ALABAMA
C
ELLINOIS
11
INVERSOTA
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ROSTH DAWOTA
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SOUTH DAEDTA
NEBRASKA
OKLAHOMA
WState and Local: Chamitters organized
State Committee organized
administrators and for -hairmen appointed
last started
KEY
WYOMING
MORTANA
IITAN
- - -
/
$
REWICE
5
/
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FIRE 2
OB 10'
SAL
HER
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H.HERE HER HERE HERE
SECURITY
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-
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HERE
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------
-
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TAXI
SECURITY
THE
RBUY
THE
UNITED
4
HERE
SAVINGS
BUY
BUY
E
YOUR
TRIPY
HERE
SECURITY
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SAVE FOR
HERE
SECURITY
the
-
HERI
BUY
THE
HER
III
-
BUY
SBU
-
UY
STAMPS
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s - - a to DEFENSE
BUY
RE
HERE
NORTH OF AND the DEFENSE STAMPS, just DECLAMIN CANTON'S STAMP HELPS TAX M
M
RETAIL STORES
A
Hell
HE U.S. TREASURY
is DEFENSE STAMPS
Rust
Regraded Unclassified
66
EMORANDUM FOR THE SECRETARY.
September 26, 1941.
At of Friday morning, September 26th, comments on the Boeton
speech are diminishing, and those on the 6% statement are greatly
in the majority. For this reason, the former are now grouped in
the general ebstract, especially 0.0 copies of this speech were sent
with Defense Bond letters, end, therefore, many replies deal with
both subjects.
However, comments on the 6% statement have been grouped in e
wyperate abstract, and this will be done until they also diminish.
In general, the mail of the past week has followed the usual
lines. There are e number of abusive communications, and curiously,
this week the signed onee have outnumbered the anonymous ones. This
applies both to letters abusive of the President and the Administra-
tion in general, and those attacking the Secretary.
Anti-British letters outnumber Anti-Russia by 4 to 3.
There WAB only one letter attacking Lindbergh's recent utternncer
and one praising them.
There were the usual letters attacking the sttitude of labor,
the Government's policy in regard to farmers, etc.
There vere fewer latters dealing with texetion to the exclusion
of any other subject. À great many communications, however, mention
11 Ln connection with the purchase of Defense Bonds.
GaForbush
Regraded Unclassified
67
General Comments
Henry Pardon, President, Owensboro Taxpayer's League, Owensboro, Ey.
The Housing Authority in Owensboro, Ky., bee B. permit from the F.H.A.
in Washington to construct 125 houses in Owensboro, and we don't need
the houses, BG we have over 500 empty houses and apartments, and the
population 10 about thirty thousand. Oweneboro got no defense Industries,
\herefore many families moved to other cities such ne Louisville,
Avaneville, etc.
Anonymous postal card from Newark, N, J. After reading your wonderful
eulogy of Russia and the Russians, I wee wondering whether the millions
of dollars you are giving that country is in payment for the wonderful
work performed in 1903 in Eishineff?
The Third Assistant Postmaster General writes urging reply to his
letter deted August 18th. This was in regard to a refund request by
the German Railroads Information Office, the Riggs National Bank having
refused to accept 8 check for the refund since it WAB not made payable
to them, although it vas drawn in accordance with Treasury instructions.
New York Postmaster ie anxioue to clear this matter un during the current
quarter end requests Treasury instructions.
is Smith, Pittsburgh, Pa. Via radio we learn that you gave Russie 10
million dollars. You know what us real Americans think of this, BE
loe American Legion of N. Y. State voted against any kind of aid to
the Rede, but despite all this opposition your office end the Adminis-
tration do otherwise. We don't like this - which will be shown by ue
voters in all elections following.
N. 3. Atiam, Philadelphia, Pe. "A very emall percentage of the money
which Congress appropriated for national defense has been spent# -- end
what has been put in defense work has been held up by encless strikes.
That, in truth, should be mentioned BE one of the b1g reasons for the
cisemble showing in help for England. We citizens know it.
Sussell Hartranft, South Orange, N. T. It has come to my attention
from several sources that I believe reliable and have no reason to
doubt, that bank examiners have been insisting that banks dispose of
their Railroad Bonds, except those that are legs. This being true,
say I indulge your kindness and inquire why, after cerrying them all
through the grief of the recent depression years, they are now instruc-
ted to dispose of them at A time when the outlook end earnings are
About as bright and in many cases the brightest in their history?
Regraded Unclassified
68
- 2 -
Alfred M. Stebbins, Elmburst, Long Island, I. T. Your. speech on the
prevention of inflation and the release of Government owned stocks
to prevent further price rises vas indeed good news to the little man
who is paying the bill. May I point out, however, that the Depart-
ment of Agriculture is still trying to force prices higher.
Albert Gailord Hart, Iowa State College, Ames, Iowa, From your recent
speech in Boston, and from your testimony before the Senate Finance
Comittee, I gather the heartening impression that the Treasury is at
last ready to exercise real leadership in combatting inflation. As
you recognize, the king-pin of anti-inflation messures must be taxation
to drain off spending power; and in fairness, taxes for this purpose
must be primarily income taxes. The purpose of this letter is to urge
upon you the necessity of setting up 8. system for collecting income
taxes at the source wherever possible. The argument for doing so is
essentially very simple. (Detailed letter and plan referred to Mr.
Sullivan.)
Anna May Mason, Secretary, Finance Dept., Willoughby House Settlement,
Brooklyn, N. Y. I read your address delivered before the Advertising
Club of Boston last week with great interest. We are particularly in-
terested in this Settlement in doing our part in the defense program.
I therefore would like to ask you the following pertinent questions.
What percentage of his or her income do you think the following should
contribute towards defense saving stamps or bonds? (Lists various in-
comes, $1,200 to $2,500, with and without dependents.)
Ethel H. Tompkins, San Anselmo, Calif. On Sept. 9th in your talk to
the Advertising Club of Boston you said, "We must deal with inflation
at once". You called upon laborere and farmers to curb their desires
for higher wages. Appealing to laborers to cease their demande for
higher wages will have no more effect than the President's frequent
appeals to labor to stop strikes. I am 100% for the President's
foreign policy, though I think be is far too slow in taking decisive
action, and by his hesitation has missed many opportunities to give
Hitler & blow. ... There have been many fine speeches made on all
these subjects by members of the President's Cabinet and men high in
the Administration, but no action follows, and strikes, inflation and
extravagance continues. :- * I hope Chester Rowell is mistaken and
that you do intend to do something and prevent inflation.
Sidney Flumenthal, New York City. It was By intention, immediately
on the delivery of your address before the Advertising Group in Boston
last Thursday night, to write you how admirable I considered it, and
how deserving of wide general support its sound recommendations are,
not only due to the quanities of agricultural products and other hold-
ings impounded by the Government overhanging the market as & constant
element of insecurity in the price level, but unless at the present
time ve dispose of them, the Government will lose the opportunity at
another time to re-enact a similar step.
Regraded Unclassified
3 -
69
Maurice 1. Vasen, Building & Loan Association, Quincy, Ill. The
writer has been particularly interested in your recent address rel-
ative to the suggested ideas concerning the prevention of inflation.
One point I recall particularly was with respect to increasing the
amount of savings and the purchase of defense bonds. The idea 00-
curred to me that if the support of the Unions could be secured,
those in defense industries could be paid part in cash and part in
bonds in the nature of the present defense bonds being issued, and
instead of having the B mature in ten years, to nature in perhaps
three, four and five years.
Thomas N. Hall, New Orleans, La. If ve are to have inflation, it is
most likely to come from the high cost of labor rather than the high
cost of cotton. In spite of all the coddling shown labor for years,
their answer has been B vicious lot of strikes simed at the defense
program. Have you heard of any farmers making such threats?
Rudolph V. Tollert, International Stewards' end Caterers' Association,
N. Y. C. Your interest and understanding of the problem concerning
the threat of inflation is a source of inspiration to the International
Stevards' and Caterers' Association. Present market increases have
drastically affected the gigantic task before us, that of purchasing
food as well as catering to the appetite of America and if we can be
of any assistance whatsoever in the fulfillment of your program, you
will find the entire membership at your service.
Alfred E. Hamill, Chicago, Ill., writes with sarcasm: May I call your
attention to an apparently typographical error in the reprint of your
speech? You are printed as saying, "I can give you only this pledge -
that this administration will do everything humanly possible to prevent
inflation." It appears to me that the word "prevent" has improperly
taken the place of the word "encourage", as the Administration's con-
sistent policy has been to increase the cost of commodities end of
labor. It is therefore probable that the pamphlet should be corrected
as I have indicated.
"John Doe", (Member of the Middle Clase). Boston, Mass. You neglected
to state in your speech in Boston that responsibility for the present
danger of inflation reste upon a Government that for years has been
recklessly wasting billions of dollars.
Albert M. Fulton, Westfield, N. J. I like your position in advocating
sales of reserve whest and cotton to keep prices within reasonable
bounde. You show a business scumen which few members of the Administre-
tion possess. The present Administration is counting this year on
large increases in taxes to meet defense coste, and it is likely to be
disappointed, for who pay most of the taxes? The big corporations and
wealthy individuals. Big business is the life-blood of the nation;
its production constitutes the greater part of the nation's wealth;
it given employment to most of the population, and it pays most of
the nation's taxes.
Regraded Unclassified
70
4. Andrew Schnelder, Pittsburgh, PR. Your announcement in the morning
paper, that you had advanced $10,000,000 to Russia, did not mention
the unpaid $50,000,000 of 1919 which this same Russia has not paid to
United States Citizens. (Tells of his bond holdings and encloses
copies of letters from State Department, etc., in regard to them.)
These letters say the loan was for Russie's var of 1918, that nothing
could be done immediately after the WAT, and that something would be
done later. Nothing was done for twenty-five years, and now this
enmo Runsia is given $10,000,000 of which I am again - part victim,
Carl J. Baird, Columbus, Ohio. I noticed R. statement attributed to
you to the effect that the Russian Government had been very prompt
in meeting their obligations to this country. Would respectfully
call your attention to the fact that during the World War, I along
with A great number of Americans, subscribed to an issue of bonds
issued by the Russien Government. So fer as I know, there has never
been any payment on these bonds. I was under the impression that
under the Johnson Act no Government could arrange any future loans in
this country that was in arrears on pest debts. Would appreciate
very much 8. statement from your office as to the policy of the Trea-
sury in respect to the collecting of these bonds, or whether I should
consider them na worthless, under the circumstances.
Andrew N. Hildebrand, South Bend, Ind. This speech shows amozing
stupidity All to what inflation 18. Booms and depressions are coused
by the inflation and deflation of credit, not by the infletion and
defletion of money. Money and credit are not synonymous terms.
N. G. Fisher, Minneapolis, Minn. Newapapers of recent issue nuote
you RS opposed to further increase in price of farm products. As B.
farmer who was forced to leave my farm on account of inability to
exist on A farmer's meager income, may I present to you e few FACTS,
not statistical figures, in relation to farm income. (Tells of own
experiences.) for farmers' income would suggest you consult Auditor
of Minnesota office records to ascertain the great number of farms
that were accuired only through years of hard labor, reverted, in the
last year or two, to the State for unpaid taxes. This should be
evidence enough to convince the most skeptical that the farmers'
income is far too small.
An anonymous letter from New York City. I have just read un article
about inflation and calling for "mental toughness". Yes I indeed, it
requirer consideration for us poor people who gave our confidence with
our dollars believing in you and the U. S. Government to pay us back
Ln full, I for one will not dare to invest in any mcre bonds, either
the "Baby Bonds or Defense". I only regret having invested R8 much
⑉8 [ did. (Lists foods on which prices have risen, etc.)
Regraded Unclassified
- 5 -
71
Robert B. Aitcheson, New York City. I was very gratified to read
your speech of last week, wherein you outlined so clearly the dangers
of inflation which is now, not & possibility, but an actual fact.
Whether our legislators in Washington are fully alive to this,
whether they think they can arrest it at 8. time chosen by them or not,
I don't know. I have purchased Defense Bonds and I was planning on
continuing to do 80, Now, I'm not so sure for in buying a fixed
obligation, it is apparently certain that were I to change these
into money at some later date, that money would buy less. Perhaps
it would be better to use the money I would save now for purchases
of necessities that can be leid acide till needed. Perhaps this may
be called hoarding, but if so, then the bee and the equirrel Are
hoarders, but were they not, there'd be none in existence. We cannot
have our cake and eat it too, hence my applause for your speech, but
just as one rose doesn't make summer, neither does one speech get the
point over, You should repeat the speech or part of it, or the simple
sense of it over and over again.
S. Messer, Vice President, Quaker State 011 Refining Corp., 011 City, Pa.
I have read your seven-point program and I as in hearty sympathy with
it. I hope the country at large will be 80 impressed with this program
that e determined effort will be made to not only put some, but all of
it, in action.
Clen Robertson, Nashville, Tenn. I want to express my very profound
admiration for the stand you have taken on inflation and our crop
reserves. In my opinion your brand of courage and patriotism is badly
needed, and I hope it gaine more and more of the recognition which it
deserves.
George G. DeVitt, New Haven, Conn. From your speech I understand
that you advocate such principles as to saving money. increased taxes,
less spending and increased regulation. Although I am not an authority
on this matter, I would like to present a few diesenting opinions;
first, it 18, in my belief, that by augmenting the burden of taxes, which
are mounting daily, the common laborer and the business can must demand
more for his labor and also more for his product. If such a case be
true, the valuation of whatever the circumstance may be exceedingly high.
J. P. Johnston, Chicago, Ill. I read that you "hope we may extend the
social security program". As a salesman working strictly on commission
basis, and representing more than one firm, the Social Security laws do
not permit of my enjoying this security. In other words, you are sup-
posed to be your own boes, which is not true, as you are subject to the
same dictates from any individual firm as you would be if you represented
only one. If you represent only one concern, then you are eligible for
Social Security. I bring this to your attention in behalf of all of us,
who gladly would pay our stipend, and if this were clarified, am sure
the firms ve represent would gladly want to pay their share.
i
- 6 -
72
C. C. Gosney, Clarksburg, W. Va. Laws protect everyone but the sales-
man. He 1e supposed to be an executive or manager of his territory.
Then you eay we have to make more sacrifices and do without more.
Give me a Job paying my old salary of $3,000 8. year and I will be a
happy man supporting a family of four. Now understand, I AS not writing
you to criticise you but after your Boaton speech, I could not resist
saying something. Lots of good luck.
Bart Andress, Chairman, Executive Committee, The Central Good Neighbor
Committee, N.Y.C. At the request of Mr. McCracken of your Department,
we are addressing envelopee to a selected number of key people, to send
copies of your recent address on the dangers of inflation. While order-
ing this job done, I have read the address myself, having previously
seen only excerpts from it in the newspapers. Having read it through,
I em all the more happy to cooperate at lesst in some small way in its
distribution. If I may, I should like to congratulate you upon the
directness and simplicity of your presentation of B. subject which so
often is complicated by technicalities. This address brings the subject
straight into the average kitchen and living room where it needs to be
considered, and where Defense Bonds and Stamps must be understood as one
means of preventing inflation.
Cecil J. Medwedeff, Baltimore, Maryland. I received your letter of
September 20th, and I have heard your radio speech. There is no question
at all that you are right in what you say. However, there is no way to
stop inflation unless you stop first inflation of labor. Every time labor
gets higher, and still higher pay, the dollar 18 worth less, and if this
is not inflation, what 1e it?
Bugene X. Quigs, President, Richmond Baking Co., Bichmond, Ind. I have
recently read your comments with regard to the necessity of controlling
prices end preventing inflation. I have thought several times of writ-
ing you and expressing my complete agreement with your views and also
by appreciation for the courage you have shown in making these statements
publicly. Today, I an in receipt of a letter from the Collector of
Internal Revenue in Indianapolis, who is also the State Administrator,
Defense Saving Staff. In this letter it is urged, and properly so, that
we interest our employees in the purchase of Defense Savings Bonde. Ae
I read the letter my thinking was quiteconfused 09 to whether or not I
should urge our employees to invest their money in this type of an 1n-
vestment when the spectre of inflation is hanging over all of us.
So I sincerely truet that you will exert every effort possible to stay
the advancing prices that are coming along every day now in commodities,
in goods, wages, rents, etc. Anything I might do to help secure proper
Governmental control over prices, wages and rents, I shall be glad to do.
Regraded Unclassified
- 7 -
73
Comments on Bonds
J. Henry Thorpe, Treas., Cooley, Inc., Aristocrat Fabrice, Pavtucket,
R. I. I am pleased to give you, below, a copy of notices that will
be posted in our two mills tomorrow morning. I think possibly you
may be interested: "The Directors of Cooley Incorporated of Pawtuckst,
R. I., have voted to give to all of their employees A bonus of 10%
figured on their base pay of 40 hours per week and dating from the
beginning of their fiscal year October 1, 1940 to September 30, 1941.
All those will share in this bonus who are at present in the employ of
the company regardless of the time that they began to serve. This
bonus will be paid 50% in cash and 50% in Government Bonds or Defense
Stamps, prior to December 1st. The thought of the Directors in making
partial payment of this bonus in Bonds is to encourage their employees,
not only to build up & savings account, but also to have a share in
the National Defense Program8.
Alfred I. Warren, President, Consolidated Appraisel Co., New York City.
In looking over your defense bond circular, I an prompted to inquire
why an apparent deliberate withholding of necessary information regard-
ing the status of these securities appears in this circular. Why not
show 6. table of recemption values and not keep patriotic citizens in the
dark as to what they are actually getting for their money? This actu-
ally savors of the kind of deal one would have, in years past, expected
to get in Wall Street.
Harry 1. Gilbert, Combustion Engineer, Bridgeport, Conn. Replying to
your letter of September 16th on the subject of buying U. S. Savings
Bonds. Like millions of fellow Americans who say nothing but keep on
doing, myself and wife do regularly invest in these saving certificates
all ve can afford and ve shall continue to do so to the exclusion of all
other investments other than in our house and home. Our home is under
F.E.A. mortgage now going into its fourth year, and our faith is in our
Government entirely. Our desire has been to purchase income tax certi-
ficates but ve cannot subscribe to the plan that requires an application
to be filed. Not that it would be a burden to us to file the application
but we feel that the plan is incorrect and that as it stands, there is
no advantage as compared with the straight purchase of saving bonds.
If you want to see people invest in a large way, make it easy as possible
and remove the formality.
Alvin Gerlack, Attorney at Law, San Francisco, Calif. As a result of my
Army service in the first World Var, I lost the complete sight of my
right eye. I Am now drawing Government compensation for the loss of the
sight of this eye, which compensation was recently increased. By making
some personal sacrifices I find I will probably be able to get along
vithout the use of this money and believe that, it being the "spirit of
the times", we should all make sacrifices in the present emergency. I
have decided, therefore, to purchase Savings Defense Bonds and should
appreciate your advising ne as to the most advisable type of Government
Bonds in which to invest.
Regraded Unclassified
"John Citizen", Texas. (Copy of letter sent to the President.) In your
fireside chat will you please tell us - about 90% of the American people
WEY VS SHOULD BUY BONDS? WHY WE SHOULD JOIN THE ARMY? WHY WE SHOULD
PAY HIGH DEFENSE TAXES? WHY VE SHOULD WHOOP YOU UP? when ve apply for
a job from our own Government we are referred to a labor union secretary
who telle us we cannot work for our Government unless we join a labor
union, pay a large fee for joining, and then continue to pay a large
tribute to this labor union as long 88 ve work for our Government1
Monte J. Gouldman, Kenchester Welfare League, N. Y, C. Sometime ngo
you were good enough to send 100 copies of the song "Any Bonds To-Day
for distribution within our League. At our Open Meeting held last
night, we were able to obtain pledges among our membership of over
three hundred, of 100% in either bonds or stamps.
Peul J. Lichtenstein, (Clothing Store), Grand Mount, Iowa. I have
before me four cigarettes - the last I as going to smoke. After that
when 1 have the urge to smoke, I'll 80 and buy 19+ worth of War Savings
Stamps.
8. I, Fisher, President, The Farmers & Merchants Bank, Spencer, N. Y,
Why may the Post Offices frank returns on Defense Bonds sales while
banks must pay their own postage? Isn't that class differentiation?
Val Beach, Manhasset, Long Island. By neglecting to enlist Wall Street
dealers in Defense Bond campaign, the Government has not only alienated
these salesmen but has failed to take account of the average man's
point of view. The latter has lost considerable faith because of the
way his money has been treated. He remembers he used to get 4% from
Sevings Banks, and feels the Government responsible for cut in interest
rates, poor stock market, etc.
Theodore Gould, President, Baltimore Stock Exchange. I em the owner
of " number of U. S. Savings Bonds and of Defense Savings Bonds, "nd am
a firm believer that every American should own these securities, both
from the standpoint of the country's welfare and his own best interests.
Selieves, however, investment bankers and securities salesmen of the
country have not been sroused to interest. These zen are 80 patriotic
P S others and will volunteer expert service. However, Mr. Gould believes
they are entitled to compensation just as companies making tanks and
=irplanes or other defense workers ATO paid for their skill. Be Rug-
(ests cooperation with National Association of Security Dealers 83
recognized agency ready and willing to do the Job.
David Repport, Astoria, Long Ieland. I would like to know why the
Astoria Fost Office, ne well no several Astoria Banks, have no Defense
Stamps. After my wife etood in A long line for - half hour, ehe wes
told et the Post Office that they do not keep them. Is that the way
to encourage citizens to aid the Defense program?
Regraded Unclassified
- 9 -
75
Thomas P. Wallace, Chairman, The Farmers & Mechanics Savings Bank,
Minneapolis, Minn. I have been a purchaser from time to time of
Savings Bonds and the old Baby Bonds. In most of these I names a
beneficiary to whom they would be payable in case of my death upon
the belief that this beneficiary could be changed at my option, and
8 renewal bond with the original issuance date issued. Upon inquiry
1 find that this is not so and that my only option is to cash the
bond or allow it to stand as it was originally issued. The Federal
Reserve Bank in Minneapolis said this vas to discourage discontinu-
ance of these bonds and to encourage their retention until naturity.
This did not sound reasonable to me and it will result in By having
to cash several of these bonds owing to changes. In each case if I
could have changed the beneficiary I would have allowed the bond to
remain in force until its original maturity. The regulation BE it
now stands encourages holders of bonde to cash their bonds instead
of holding them and therefore defents its purpose.
Wilma K. McFarland, Editor, Child Life, Chicago, Ill. I am the Editor
of Child Life, a national magazine for children. The magazine is read
by at least one-half million children, by many teachers who use it for
supplementary purposes in their schools, by librarians, and by most of
the parents. We have been very enger to help the Government in spread-
ing information about the National Defense Stamps and Bonds. During
your absence I have been in touch with two members of your staff who
seen to have sent me all of the material on hand for publicity purposes.
In that material I do not find one sentence that carries a message to
children. There are general suggestions to teachers and I have used
these in my teachers' supplement, but I had saved one of my November
cover pages to devote to the National Defense Stamps. And for over
six weeks I have been attempting to get some sort of material from
your staff that would be directed to children and would tell them
simply and clearly what your plan is for their cooperation. Last
week I telegraphed your office again calling their attention to my
need and have received no reply. Because you are a very busy nan I
do not want to bother you, but I do honestly feel that a message in
Child Life, particularly one signed by you, would be of value. But if
it cannot bear your signature, there must be something in your files
addressed to the youth of the country which we could at least quote.
Don Delaney, Company "0", Camp Bowie, Texas. I have talked to quite
a few of the enlisted non in my regiment and find that many of them
would welcome the opportunity of buying Defense Bonds and Stamps if
they were available through Post Exchanges. Usually a Post is located
80 far from town that & soldier cannot readily get in to a bank or
Post Office in the hours which he has free from his duties. By the
time he does have a chance to get into the city, be finde that his
money has dwindled away 80 be just spends what is left.
Regraded Unclassified
- 10 -
76
R. H. Telfer, Jr., The Insurance Examiner, Chicago, Ill. You are
in there every day pitching for the sale of Defense Bonds, but we
honestly don't believe the mogule of our big life insurance companies
are giving you anything but lip service. Ve have an idea that will
test the sincerity of the boys that bose some 35 billions of dollars
of assets. Às you probably know, there are 3 or more billions of
dollars of life insurance tied up in policy loans on which rate of
interest is either 51 or 6 per cent per annum. These loans put
policy-holdere right behind the eight ball since they must pay name
premium 0.0 always. Why not lift these policy loans with Defense Bonds
through our Federal Loan Agency? (Outlines system of repayment.)
Michael T. Kelleher, U. 5. Postal Clerk, Kanesa City, Mo. I have
been buying Government Bonds for the past 5 years. I couldn't find
a better place to invest my money, and figured that my money was unfer
with the U. S. Government than the banks. I have been told by many
people that it is not a good investment on account of the way the
Government did with the Liberty Bonds in the World War. I presume
that there are many people have the same ides sbout these Defense Bonds,
and are afraid to put their money in them. I will leave my money with
Uncle Sam any day, and feel that my money 1s doing some good for the
National Defense Program, and will cash them in when they nature in 10
years. Therefore, I wish that the American Citizens would forget about
the last World War and the Liberty Bonds, and protect our country by
buying as many Defense Bonds as they possibly can.
Peter H. McCarthy, Dubuque, Iowa. I read your article from Pontiac,
Mich., that you felt called upon to praise the workmen for the Defense
Bonds they took, 80 you said. Well, isn't that very nicel The defense
workers get the highest weges they ever received, come of them getting
the outrageous vages of $80 to $100 per week, while the rest of us are
sweating our brow and paying every cent of tax possible to neet the
taxes that pays these excrbitant wages to the workers. And then you feel
called upon to issue 8. special vote of thanks to these defense workers
for buying a defense bond or two. Well I want to say that your talk to
ne seems just 100% "Pure Bunk". I was on the Liberty Loan drives in the
last war and when ve got to the plant that had war orders we thought we
would clean up on ordere and ve got less in the plants with war ordere
than in any other. I guess the rest of us don't count, only Union men.
Mrs. George Jungels, Chicago, Ill. In your Pledge and Speech, as
printed in your "Ples for Defense Bonds" you say, "The present Adminis-
tration is doing everything possible to prevent inflation". Let be nek
you, is being the tool and fool for the hostile Soviet invasion in the
U.S.A., and also compelling the American citizens to war with our hostile
invadere to justify the Soviet invasion of other helpless countries in
Europe and elsewhere, called doing everything to prevent inflation? Are
we to be the victims of Soviet programs because of the beit inflation?
Regraded Unclassified
- 11 -
77
R. U. Zeidler, Conference Claimante' Funds, Inc., Baldwin City, Kan.
I have yours of Sept. 19th, in reply to nome United States Savings
Bonds which I purchased a short time ago. I will say that I expect
to buy more bonds as time goes by, and I as able to accumulate a. few
savings. It has always been my principal to support the Government
in every way possible. In the same envelope also came the speech and
the pledge by yourself that vas made to the public over the radio a
short time ago. I have carefully studied this speech and I heartily
agree with you in many instances. I hope that the President and our
Representatives and Senators will do everything in their power to
avert an inflation, (Citee food prices, farmers' problems, Union
demands, etc.)
John J. Morris, Jr., Morris Hardware Co., Lake Wales, Fla. Replying
to your letter of September 17th will say that this Le one of several
such letters I have received lately, only this is the first time you
have given me credit for buying any bonds at all. (Tells of purchases,
family service to Government, etc.)
Charles S. Adelman, The Real Zotate Advertiser, Chicago, III. Regard-
ing your letter dated September 17th, my I call your attention to the
esteemed Tribune's front page broadcast of the Associated Fress report
on Senator Clark's lates prediction. If half bis statement 18 true,
what becomes of the redemption value of our Sevings Bonds) Bow could
they be paid, principal or interest? Will they have to go the way of
Government securities in other countries, where such paper was burned,
while other equities retained some value? I have done by share in the
past, but many doubts and whispers are passing through this territory
Dov. If they can be answered, I think such action 16 imporative.
1. L. Florance, Washington, D. 0. I appreciate the purpose of your
letter of September 16th, thanking me for buying U. 5. Savings Bonds,
but the suggestion that I start to buy thee periodically seened to be
unfortunate in view of the fact that for several years I bought them
regularly under our company's payroll deduction plan, and only last
month discontinued my purchases due to the necessity of accumulating
the means of meeting 1941 income taxes.
Benjamin 1. Bills, Chicago, Ill., marks the following paragraph in the
form letter sent out by the Secretary under date of Sept. 17th. --
"Now, c.o never before, I believe that all of us are ready to demonstrate,
in concrete form, our partnership with the Government - A partnership,
as the President said, which is entered into to safeguard and perpetuate
all those precious freedoms which the founders of our Republic gave us
as our heritage", and adds his own comment as follows: "I know of no
freedom which you are anfeguarding - - and of no freedom which you 67V
not invading".
- 12 -
78
V. W. Cloud, Baltimore, Md. I have yours of the 20th instant, per-
sonally acknowledging my recent purchase of United States Savings
Bonds. Since the above-mentioned purchase I have bought additional
of the same bonds being an American, a patriot and last, but not
least, a Democrat. You men of the Treasury are doing a fine job,
keep it up. I write from over fifty years of past banking and present
business experiences. Many problems ahead, but they will be solved,
not by the mass minds but by men of your courage and intelligence.
John J. Wagner, Cedar Rapids, Iowa. I have your general circular of
Sept. 18th. I am in thorough accord with your program of regular
purchase of Defense Bonds, and I an making such regular purchases
through a local bank.
James Calhoun, Denver, Colorado. On September 8th I wrote your De-
partment protesting over the length of time I have been caused to wait
to cesh Baby Bonds, and the levying of a charge of 291 for the privi-
lege of cashing them. You know all the literature the Treasury has
issued to promote the sale of these bonds, none that has come to my
attention has left any other impression than that these bonds could be
cashed at any Post Office on presentation, and without one penny of
cost. In this case I have either been taken advantage of or the Treasury
Publicity Dept. has been guilty of neglect. I might add that the local
Postmaster has refused to do anything to expedite the cause because, as
he said, he got no commission for taking care of such matters. I have
never received a reply to my letter of September 8th, and am taking this
method of protesting this neglect also. I would like some assurance
that in the future, when I wish to cash bonds, that I will not be com-
pelled to wait for ten days to two weeks, and that I am not going to be
charged for that privilege, even though the charge goes under some other
name.
Anonymous - As a buyer of Defense Bonds I am beginning to wonder if I em
really buying something that will be of any value in ten years at the way
I notice the agents of the Government are wasting and spending money here
in Des Moines in building this defense plant. I think it is time some of
you people in Washington did something besides ask people to buy bonds.
America is going to be so heavily mortgaged and for what???? What foreign
country would do the same for America?
Regraded Unclassified
Published for
CONTACT
Lend To Defend
Employees
Your Right
by Employees
To Be Free
The Newspaper of Canadian Industries Limited
Volume X
MONTREAL, QUE.
SEPTEMBER 26. 1911
Number 0
IN MEMORIAM - THE RIGHT HONOURABLE ARTHUR B. PURVIS
the wine of personal Inca which we all
S
nd of the Hame and outitiely donth of um
Present The Right Honourable Arthur 11.
that in difficult (in in to Tired words
to injure HIIT suppow. The Dies sustatural
by Hir Empire and nut Completely Is donet propose
phlo has (1) madivine flit- we recember the guard
ho. suffered his hi- family tu whom WP extend sthere
sympothy
11 is almoi Dont lus givint emergy the
expiring tradership seul los sam group of
and wrighty responsibilities without warning
have united nt n moment when his abditive were
never mini argently pended. or ide thing WP ean be
evelain. Ho would love taid us all but il single
duty In due nill rank- and hr - HIT alloted
Inske in the of the pumpose which
united IP all and in which las has serificial los fife
of Victory not Process
11 - with surrowful hearts that we mid his name
to the Company Roll of Homon of three who have
died un motivo in the execution of Class dury.
PUBLIC TRIBUTES
Time
Reaserelt.
Tie
Lord
McGowan,
die
L.
Tue
BORN: 3111 MARCH, 1890-DIED 14th AUGUST. 1941
e-T-L
PRESIDENT
the
CANADIAN INDUSTRIES LIMITED
Roll of Honour
fil
January,
1925
August,
DIRECTOR-G ERAL
BRITISH PURCHASING COMMISSI
IN THE UNITED STATES
7th Movember, 1939
1941
CHAIRM
BRITISH SUPPLY COUNCIL
RTH AMERICA
14th January, 1941-14
1941
Dram
Love
and
Chi
Oill
Regraded Unclassified
CONTACT
SEPTEMBER Be
SEPTT
1941
CONTACT
For Two
Page Three
ARTHUR B. PURVIS-A SHORT BIOGRAPHY
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CONTACT
SEPTEMENT INI
SEPTEMBER 1941
CONTACT
Page Five
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Regraded Unclassifie
CONTACT
SEPTEMBER lse
SEPTEMBER 1941
CONTACT
Page Serve
OUR CHEMICAL DIGEST
OVERSEAS
STATE
Sgf W.H. HINDLE SAFE DRIVING
ON ACTIVE
NEW OFFICE AND LAB AT HAMILTON
R.C. CASUALTY
SERVICE
TM
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THE NEWSPAPER OF
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LANADIAN INDUSTRIES LIMITED
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The
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124
The
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Ind.
-
INCOME TAX
likes
C-I.L
the
the
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INSTALMENT FORM
with
-
nal
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:
IT'S YOUR RESPONSIBILITY
if
uned
Tax
-
be
I
-
the
SAYS EVE
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-
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The
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marrily
-
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1
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YEAR AWARDS
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1
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and
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the
L.
the
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CLOSES SEPT. 30
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will
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Regraded Unclassified
CONTACT
- -
-
CONTACT
CONTACT
-
CONTACT
NEWS and NOTES of WORKS and WORKERS
FUTM -
service PIRS or AND Phone
RW - PLANT
-
-
Sparts Rews
TOROWER SAUS
COPY as
- if -
I
1
MOR
MARKEY -
-
If SALABRY
NEW TORONRO
- our
MARILTON
I
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tall)
MEDIAN
am
WINDSOR
SHAWNINGAN
Il
-
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HGMA
NEW a as
ADM TAIM
NOTE
E
-
TIME - MB time
WEST TOWNTO
- Salety - - jaile
MALIFAX
with - -
# TAEM -
TORONTO
I
CORNWALL
Regraded Unclassified
CONTACT
SEPTEMBER TME
Page Twelve
night
SHAWINIGAN RECEIVES
C-fil. Prie
/
the
fact
the
1
Births, Marriages and Deaths
new been
/
HIGHEST SAFETY AWARD
leyal and
way employer
An
The
Payment
Mr.
will
Me
Beart
Albert
Shaw-
required
Wurks,
C.I.L Prize Presented To Employees Of Consolidated
Brained,
:
Angel
a
Insure
-
the
Antionatic
Gomato
Works For Their Historic Accomplishment On June 2
of serve will
supported
.
less
an employer
in
Decimber
1007,
the
Central
1. D. Arting Works
Address
from
-
Name Mine Tesime Non
Showing
Manager, wer claiman of ledh the
Brannent
+
pality
Committee
=
Mar
Paid
paint Department, Mr. Host Les
Committed
Wuths
reviewed
the
and
evening
corrective
Company
Tv
Mi
mil
Third
:
suscried
the
Montreal
August
performance of Amiden Prevision
The premitation of prime, which in-
clarrol that the
-
11,
d
en
25.
31,
Primo
activities and moricaled (bil im
clouled Was Summer Certificate and
employed
al
falue
Current Phone: of
provided was estitial The method
special commentation pm ⑉ every
The
Wale
www.
-
$
appealing adving/ted manufability - the
mustimal
-
employee, will made by Winthrop
the problemo
lie wide department, "Fabrikuid"
(mained, former and
and
Min
Works
-
married
tu
Min
Terms
treatly
-
the
low Imp weighted (i) de Augene
VPIN
Mr.
munter al percebic when
pire a. Director no C-14- The nut-d-
Guvernment
The
Puruh Andust ML
10 per cent of the total require
timen visitina accompanying Mr.
and
Mahri B Bidere
Indy - - in (m) with the
imment were 24, Gardler Action
with
lia
-
Purchase Department Hoad Office,
review with programs. Un lan-
Commal Missert, Celtitione Products
and
D.M.I.
harmed in Paymanter Limit-
T W. death, representing the
test
E
MRTS 31, 197s, . major arrident -
Community Daruld
suffired Tml that Juie the silety
Management Committee: E Mac-
I
to
Two and Mia 21. The
"Hat
DO
vell
Twells
-
of England, un August 3.
- far less The an
Kimm, Manager of 1bc Urganic
Me
the
livé
impiring of application
Chemicals Director, L G. MeNsh,
matrianding
las
Raw
Aning Manager, "Cellopherut" Divis
hass address Mar whole
then
of the proper remedy eld the going
Complidated Wisha, -
was mingly marked -
min, R. Past-Rayment, Viest Visa
hearted of the - -
named le Mis Kattlen Prior of
Mander, hy
President's Office. il IL Cumplo,
willine aloe &
- To Mr and Mrs Cireshi
Smith August a
Virgin - sugar the . disthlet,
Manager of the Industrial Relation
markine and - -
the of the CHE Prior which as
Ruth Mr formati
with - June 2 with live
Department: K J. Half, Swirty Sex-
bath Hind Office ml Office del
signature-Jahn of the
jainte at Suled Works
Worston Winder Warks, was
of 1,225 days without a Inst-Linit
Industrial Relations Depart-
of the (RM) Time
injury
vent, and C, P. c
missure of the United la the -
memi la Min Benefitio Thilwert
of the Company this In date
MARRIAGES
buy 26
Employee of the
Editor of Contact
persode and ayén-
A guthering of emm ano persons,
have named and - and
sum Evelyn Smith, Ae
eubm plants of C-I-I. and the all
induffing employees, their relatives
evim under unliness) paras -
AMBRAPLY Clarmes Anternit ul
visited Devertment, Hand Office,
plant gathered in The munimipal well-
and friends, attended the alternoon
ditami suill have les . ETM -
the - ave, Am
vali married to Mr. Juhn Arder M
Nation for improve the individual
obile 44 audienes of
bus, verder - difficult -
- Theman, Invoice -
Mustimal in August in
must 1,300 people participated in
conditions il - 9. mailines
- in Mar
and prestell M the C-I-I. Price
achievement and working time -
- August in
Because el the willing mouin, the
lbe evening -
Burwart of the
In bis npming requires Mr. Cm-
your to tente could la
street startment, Fatrikind
C-M. Prive never lurns bem -
Bow Nie Baril, -
Wirks 18 carried 51 Min Agnes
previodary, minshere of resplayer'
THE reviewed the part salety allain-
upo with pardicable pnin, mail
el Mr. Brainent
-
Work,
we
Anden - Minites su August 10.
families, the Alkall Werks employer
mental of the Works, anying that too
la. the signes
murial to Mi Im of
representative of val Industries and
III years the employees last less
changes Valin - September L
General W Bapit Rm Yes The
Min Marjarie West
organisation were present.
locking to eart to the day when they
demi, R. Parent-Baywand,
Organ Chemicale Division, Revil
in Fresch, estendat importations
Have
Date
of
fie
surried to Mr. las Went
department
lumbert - September
WELL DONE
if Infull of the Company Manur
Wark, summel to Min Ellan
ment
of August :
During the the Mary
DEATHS
werebe pin sount wire
Callum Sentin
B. a e I.
- Paint and Yorries
in extended ta:
Ellin: fining in A Your
representative, - natried NA
The family of The 16
F. Besting, Soil Hoyald, K. IV)
No. M of Montrest
And/or B Privis, Pre-
Into and ML With
e
of Oriedian Industries lim-
to presenting the
- Villed les all surplare
Material smoll ou E Deviden
Came Cangill of the
- - TO Engismil IIII
review il 4- Weder Frank are
provide -
Adght If
the Central
Water, - - ha M/m B. Mind
- of lab
Committee, T. W swith referred
Herse
Mar liet that the - -
Company on Wurks, whome -
Cume Miss
Drink) del - August 1.
Insted representative di values
- Completed Works, var
el - - -
to All Time Lanchell nie
intelves -
that the Wirks wait -
August IT
(rend of Belond
the rand EVen grant
With win the fatally tumel IIII
that the resunt
December simi Daviden, Charte
August N.
le an investive - el Compute
fain Write, -- personal is Mier
phone Harmal mentine -
Roth der - -
Mine E 1L. Cimili, Live
of the 1 parel to
Ameunt
Department, Had
D.LL employee in operative und
Office, Mon father divil on August
provide ⑉ the aue - name
Me D. Danne
22.
A handebake and e word of sungratuiation were piveu by Winttinip Beauerd
which has the
DIE Relation Heut
to sub enlige - they jussed Intere him 10 their revent. C-I-I. med
to
revel
Office widner of (be law Mr. II W
Done M n Childs, New West-
⑉ cerried la Mr. -
- Works. cluse will dies all
Christopher 14 Mintred - August 15
August =
C-I-L NO-ACCIDENT RECORD PLAN
Drive Lame Duchame,
Kigs
Bbserimen Departidated Works,
RELATIVE PURITION OF EACH were ARTE in ORDERIME
Commidated Works, was
above later died - Júne 17
AS AT - ALREST PHI
parmed in Mas Angrie Thight of En
von
NOTE Te - - - - Welly - mil
- date all
Thereatives and
and de - part - al - - yla - -
friends of Please Hamilin
Unit - --
-
6 Dennell,
Na W. diad in the Ussistion
2
2
MILK
Nedival Hand
Classional Regins - September IA
4
- to Mr. 1. Boybo el Main
o . remit el Tume
- -
4.
Mean N.
en -
a
#
Remix and Triede
- -
/
Hertor Invid
% W H REALY for
DL NAME
/
- Sthen Works, -- informal
of Wonton Weste, who was
I
-
-
- Delard Phone:
- in Mr VA.
"
- Bollo August 16
MI - -
J
M Lind, thereings
RAUP -
L
Hulen Drate,
- Works - deter
we done IT
B
=
- Wish - - le
- - -
Vie is - Matters MR Avent
um if
No.
-
Min
-
Credit
-
III - Nevice, August
-
Visitor hgh
-
Maine our department Works,
I
- an Farm - in Angul Constry 1%
le
Mine
Vulley
Xulai Miller - breaker depart-
mir.
und
M
I
August T2
-
PAILI
may
nal to the Instruction Wark Memi TM - of
TERMS
Twin to
2
el Time Terms
Wark
min and im Vague H
Review Anna Hanter Organic
Warms
Y.
W
(Ins)
(iftem
Pain
and
in
Miami
Im
Title
el
Transito TL 11.
Washin
Willing
address
FOR VICTORY
STOP ACCIDENT
Regraded Unclassified
TREASURY DEPARTMENT
80
INTER OFFICE COMMUNICATION
DATE
TO
Ferdinand Kuhn, Jr.
September 26, 1941
FROM
Alan Barth
EDITORIAL OPINION
ON FOREIGN AFFAIRS:
FACING THE ISSUE
Mandate
The newspapers want B. final showdown on foreign policy.
They believe that the Neutrality Law affords an appropriate
issue for such B. showdown.
Repeal or modification of the Neutrality Law is generally
regarded as a determining factor in America's relation to the war.
Isolationists insist, of course, that repeal would constitute
the final step toward American participation; interventionists
argue that it would bring this country neither more nor less
near to full belligerency, but would serve merely to make the
influence of the United States more effective. Both want the
issue referred to Congress -- the former because they hope it
can be defeated there, the latter because they feel that the
legislative branch of the Government should share the burden of
so weighty B. decision.
The Cleveland Plain Dealer -- to cite a strong inter-
(
ventionist example -- reasons: "Because the issues now before
Regraded Unclassifier
- 2 -
81
the country are of the greatest importance to the success of the
defense program, because it is imperative that the nation present
& united front in everything it does from this time forth, the
President owes it to the nation and to himself to proceed in &
manner that will recognize fully his powers and responsibility in
matters of foreign affairs, but will also take cognizance of the
co-ordinate authority of the Congress."
The prevailing judgment of the press is that the Neutrality
Law has wholly failed in its purpose and has become an embarrass-
ment. The fact that the Robin Moor and the Greer were attacked
in zones outside of those defined as belligerent under the Neutral-
ity Law is commonly cited as proof that self-denial afforded no
protection for American shipping. Some commentators argue that
we have engaged in 8. discreditable subterfuge by sending American
vessels into dangerous waters under the flag of Panama. Most of
them agree that the failure to arm merchant ships, when we have
already promised them naval protection, is 8 fatuous quibble.
No clear preference has emerged in the press as between
modification of the Neutrality Law and outright repeal. The
common feeling appears to be that it doesn't make much difference,
so long as the inhibiting features of the act are excised. The
important thing, in the view of 8. great majority of editorial
writers, is that the President obtain an unmistakable mandate for
Regraded Unclassifie
- 3 -
82
the full and effective prosecution of his foreign policy.
Aid to Russia
"The Russian news is going badly," observes The New York
Post with rather refreshing candor. "It is too late in the day
for us to comfort ourselves with the old cliches about Hitler's
'lengthening line of communications,' or even to hug the famous
Russian winter to our breasts for cold comfort. Hitler's line
extends from Norway to Athens, and is still seemingly firm; and
we are not going to defeat him with winter and rough weather."
This sort of thinking is in marked contrast to the general
run of Pollyanna platitudes which have filled most editorial com-
ments on the subject. It has been common to dismiss Nazi ter-
ritorial gains as meaningless, to discount reports of Russian
casualties with reiterations that the bulk of the Red Army is
still intact.
The reverses of the past week in the Ukraine have partially
shaken this complacency. Editorial writers are now coming to
realize that the opportunity offered by the creation of an eastern
front may be B. fleeting one. The stubbornness and courage of
Soviet resistance have, in considerable measure, diminished the
objections to sending American aid directly to Russia itself.
Some newspapers, however, still balk at such close associa-
tion with Communism. The New York Times is representative of e.
Regraded Unclassified
- 4 -
83
group which, while it insists that Russian resistance must be
maintained in the interest of the United States, feels that any
assistance should be sent via the British. "Stalin's record of
treachery cannot be simply forgotten," says The Times, and adds
the caution that "in a war on land, victory for the panzer divi-
sions could mean that the help America sent to Russia would ac-
tually fall into Hitler's hands."
But a majority of commentators are less squeamish. Even
80 conservative an organ 8.8 The Los Angeles Times urges greater
speed in giving the Russians a helping hand: "The naming of the
American war mission to Russia, headed by W. Averell Harriman,
is pretty belated
...
the delay in naming it might have had
serious effects on Russian morale."
In general, the press may be counted upon to support the
Administration in resisting any prohibition against aid to Russia
under the new Lend-Lease appropriation. "Such action," remarks
The Baltimore Sun, "would be inconsistent with everything we have
done to aid the British up to now. By such measures we have said
that our naval help and our material resources are available to
those who fight Hitler in the west. But if we were to vote
against aid to Russia, we should, in effect, be inviting Hitler
to make himself strong against the Soviets and in the Near East
80 that he can turn next year and fight more effectively against
those we have promised to help in the West."
Regraded Unclassified
TREASURY DEPARTMENT
84
INTER OFFICE COMMUNICATION
DATE
Ferdinand Kuhn, Jr.
September 26, 1941
TO
FROM
Herbert Merillat
PRESS COMMENT:
PROFITS, PRICES,
AND WAGES
Secretary Morgenthau's proposal to limit corporation
profits to 6 per cent on invested capital stole the show from
his other recommendations to the House Banking and Currency Com-
mittee. It captured the headlines and produced & quick, and
negative, reaction in editorial writers. The remainder of the
Secretary's anti-inflation program, when mentioned at all, has
generally been approved, except for the failure to recommend
restrictions on wages.
Profit-Limitation Proposal
The press has seemed uncertain whether or not to take the
profit-ceiling proposal seriously. Some papers have denounced
it in the harshest terms possible; some have adopted a sweetly
reasonable attitude -- "Of course we need to take the profit out
of war, but is this the wise way?" etc.; other papers, agreeing
with most of what the Secretary said, have reproved him, as a
friend gone wrong, for bringing up the profit-limit plan. There
is B. surprising amount of comment falling into the category of
Regraded Unclassified
2 . 1
85
mild disapproval. No paper, however, has supported the proposal
in the form outlined by the Secretary.
The following catalogue of objections to the profit-
limitation proposal is found, in whole or in part, in most edi-
torials on the subject:
(1) The plan would unfairly penalize businesses of & type
which do not need large amounts of capital.
(2) It would hit small and young corporations hardest.
(3) It would be disastrous for cyclical industries, "feast
and famine" businesses which must accumulate reserves
in good times to tide them over bad times.
(4) It would discourage risky investments, particularly in
defense industries whose periods of prosperity are short
and uncertain.
(5) It would penalize conservatively capitalized and inef-
ficiently managed companies.
(6) It would tax "normal" profits as well as profits due
to the defense program.
The more violent denunciators have compared the proposed
profit-ceiling to similar measures in Germany and assailed it
as & step toward Nazism. The Philadelphia Record, the only
liberal paper which has commented 80 far, attacked the proposal
in the most violent terms.
Wage-Control
In line with the press demand for control of wages along
with control of commodity prices, the Secretary has been crit-
icized for failure to recommend a ceiling on wages. The
Regraded Unclassified
- 3 -
86
omission was regarded as especially unjustifiable because of
the recommendation to limit business profits. Where is the
justice, it has been asked, in putting B. ceiling on profits if
there is to be no ceiling on wages? The omission is said to
vitiate the Secretary's program for restrictions on all, sac-
rifices by all, in order to prevent inflation. The Secretary
and the Administration are accused of playing politics, crack-
ing down on business and coddling labor.
The remainder of the Secretary's program has been generally
endorsed: curbs on farm prices, controls of credit, heavy taxes,
curtailment of non-defense expenditures, and encouragement of
defense-bond sales.
Baruch V. Henderson
Between Mr. Henderson's selective price-fixing and Mr.
Baruch's over-all price freezing, the press gives the decision
to the Baruch plan. These are the arguments cited most fre-
quently in favor of the Baruch plan:
(1) Control of a relatively small number of selected com-
modity prices will result in hardships which could be
avoided if the prices of all commodities were controlled.
(2) It is impracticable to try to keep all prices in line by
controlling only a few basic commodity prices.
(3) The Henderson plan omits control of wages and is not
sufficiently restrictive of farm prices.
(4) Mr. Baruch's "voice of experience" should be heeded.
Regraded Unclassified
- 4 -
87
Mr. Henderson is accused of avoiding over-all price
control out of fear of antagonizing politically powerful farm
and labor groups.
The press has become resigned, however, to seeing a price-
control bill on the Henderson model adopted by Congress.
Political pressures, it has concluded, will prevent the passage
of a bill which would effectively limit price advances.
Regraded Unclassified
TREASURY DEPARTMENT
88
PROCUREMENT DIVISION
OFFICE of THE DIRECTOR
WASHINGTON
September 26, 1041
Ind 314 TO THE SECRETARY:
weekly Report - Lease-Lend Purchases
(9/19 - 9/26/41)
Remisitions
Estimated Cost
Classed be G.F
210,184,446.76
Amalting clearance by O.P.
12,440,015.18
Pending Requisitions
$ 222,604,463.94
LAGE Isitions for metals and textiles,
Lora contracts will be made for term perious
illonations required from O.P.
112,048,322.97
Se visitions for Spot Purchases
110,555,140.97
Purchases to 0/10/41 140,480,961.80
Purchases 0/18 to 3/28/41
7,842,616.40
Total to 9/26/41
¥ 156,421,568.70
were nelà tefore the nouse Appropriation Committee
exteria afternoon relative to the cuaret requirements 01 $502,075,000
is tover ritis and Chinese ourchases IF to Fabruary 80, 1340.
settiled normation has 68.2 requested : the :00 Ittee which
prepared.
3
5.
Lirector of his at
Regraded Unclassified
10/3/181-
are
VIONER
SOURC
strel
JO.
Vehic
Doncrete
is
republic Steel corp.
If
Garoon Carourizin
54,261.01
steal
DA-TPS-1362 Alan 001 teel Co.
If
Ingots
SHOUTE.
92,400.00
DA-TOB-1383 Armeo International Corp.
11
Slabs, Ingots
790001.
296,541.00
DA-7PS-1304 John A. Roebling Sons, Co.
If
Wire Rope
252+.
17,547.50
DA-115-643 /isconsin Steel Co.
If
-84,960.00
(Adj. Deduct)
DA-TPS-201-9 Copperweld Steel Co.
If
Hi. Chr. Steel
77GT.
38,533.60
9A-TPS-1380 Reystone Steel & ./ire Co.
"
Reinforcing Bars
150GT.
10,483.00
DA-TPS-1397 Crucible Steel Co. of America
=
Tunesten hot die steel 6.60GT.
12,384.25
DA-1PS-1404 Colorado Fuel & Iron Co.
=
Rails
7100GT.
423,586.00
DA-YPS-1405 Alpha Portland Cement Co.
"
Cement
11925b1s.
2,503.20
04-178-1407
recible Steel Co. of America
If
Steel
5.5360T.
2,241.00
04-113-1418 Withlehem Steel Ex ort Corp.
"
Re ls & Splice Ears
7500 CT.
339,362.80
DA-725-1418 Follansbee Steel Corp.
"
Electrical Sheets
11,200#
755.86
DA-TPS-1420 Ármco International Corp.
"
Stainless Steel
26.8926T.
36,918.65
DA-TPS-1444 Ureat Lakes Steel Corp.
it
Prnel Sheets
950T.
7,640.64
II
DA-TPS-1454 Dethlehem Steel Export Corp.
wheels end Axles
4,045Pcs.
566,084.50
11
0A-VPS-1455 U.S. Steel Export Co.
Wheels and Axles
4,045.0s.
89
500,964.50
Regraded Unclassified
in
number
NOT
1.000
MA
DA-TES-1403 Sandvik Steel Inc.
V.T.
Jandsaw Steel
,500$
V 1,482.00
02-TPS-1151 Prior Chemical Cor.
If
Ammon Bichromate
1120#
246.40
DA-TPS-1809 American-LaPrance-Foamite Core If
Fire-Extinguishers 100
17,731.60
DA-TPS-1152 The Don Chemical Co.
II
Carbon B1 Sulphide
451.65
Calcuim Chloride Solide Etc.
DA-TPS-1310 The General Fire Truck Corp.
If
Fire Extinguishers 200
1,726.00
DA-TPS-1104 R. G. Le Tourneau Inc.
If
Scrapers, lavon
7
18,920.30
DA-TPS-1173 Harrisburg Steel Corp.
"
Cylinder, Mitrogan 2,000
19,120.00
DA-TPS-1105 U.S. Rubber Co.
"
Jointing Material
1,290.00
DA-IPS-1339 Ford Motor Co.
=
Bearings
32,000
3,412.00
DA-TPS-1342 General Motor Sale Corp.
"
Bearings
40,000
28,800.00
DA-TPS-1340 Bower Roller Bearin Co.
If
Bearings
43,856.78
DA-1PS-1341 Aetna Ball Bearing lif. Co.
11
Bearings
13,250.00
DA-TPS-1281 Detroit Sulphite Pulp Paper Co. "
Easy Bleaching Sulphite 1,000T
59,720.00
DA-TPS-1251 A. G. Le Yourneau, Inc.
"
Spare Parts
22,838.40
=
DA-TPS-1262 River Raisin Paper Co.
Boxes Fiber
50%
6,750.00
H
DA-TP3-1174 Ingersoll Rand Co.
Devices Hand Threaders
5,415.00
Hand
10
D
DA-TPS-1356 The Gorrin ton Co.
Bearings
2,538.57
90
If
DA-TPS-1074 Consento Cherical Co.
Vanáduino Catalyst 7040Liters
23,956.00
Regraded Unclassified
CONTRACT
118QU1S1-
NUMBER
CONTRACTOR'S NAME
TIONER
colmodity
QUANTITY
TOTAL VALUE
DA-TPS-1146
Colgate-Palmolive-Peet Co.
U.S.
Glycerine
32,500#
$ 4,623.12
DA-TPS-1349
Chesapeake-Camp Corp.
=
Kraft Pulp
500ST..
30,000.00
DA-TPS-1348
West virginia Pulp and Paper Co. "
Kraft Pulp
2,000T
120,000.00
DA-TPS-1346
Hollingsworth and Whitney Co.
#
Kraft Pulp
800T
48,000.00
DA-TPS-1167
Eastman Kodak Co.
If
Sod. Carbinate Mono;
Sod. Sulphite etc.
239.57
DA-TPS-1210
Harrisburg Steel Corp.
If
Cylinders Nitrogen
1000
9,560.00
DA-TPS-1345
Hummel Ross Fibre Corp.
If
Kraft Pulp
800T
48,000.00
DA-TPS-1231
Bay City Shovels Inc.
If
Soare Parts for Excavator
8,388.74
DA-TPS-1325
The Firestone Tire & Rubber Co.
If
Tires and Tubes
1,000
40,190.00
DA-TPS-1179
The Goodyear Tire & Rubber Co.
If
Tires and Tubes
500
6,580.00
U.S. Rubber Export Co.
"
DA-TPS-1180
Tires and Tubes
1,000
36,830.00
DA-TPS-1082
E.Z.Du Pont Nemorus & Co.
If
Thermoflox
22,400#
13,104.00
DA-TPS-1176
Ralph B. Carter Co.
"
Pumping Sets
200
40,700.00
"
DA-TPS-1354
R. Leach Mchy Co.
Bearings
982.20
DA-TPS-1366
The Timken Roller Bearing Co.
"
Bearings
21,935.00
Ford Motor Co.
If
DA-TPS-1365
Bearings
60,022.00
Leilig Brothers Co.
"
DA-TPS-1358
Cloth Wire,
50 rolls
750.00
91
DA-TPS-1043
Cateroillar Tractor Co.
"
Tractors
11
Regraded Uncla
CONTRACT
REQUISI-
NUMBER
CONTRACTOR'S NAME
TIONER
COMMODITY
QUANTITY
TOTAL VALUE
DA-TPS-718
The Mughes, Keenan Co.
U.K.
Dumpers
45
$ 149,206.45
DA-TPS-786
International Pulp Co.
"
Asbestine
560ST.
8,120.00
DA-TPS-1295
Lapp Insulator Co., Inc.
If
Insulators
81,535.00
DA-TPS-1228
The Terrington Co.
If
Bearings
33,750.00
DA-TPS-1214
The Fafnir Bearing Co.
"
Bearings
40,146.60
DA-TPS-1213
Bearing Co. of America
If
Bearings
9,112.50
DA-TPS-1211
Bearings
If
Bearings
1,860.00
DA-TPS-1233
General Motors Sales Corp.
"
Bearings
1,112,282.50
DA-TPS-1232
S.E.F. Industries, Inc.
"
Bearings
45,875.00
DA-TPS-1230
H oover Ball & Bearing Co.
"
Bearings
1,980.00
DA-TPS-1229
Bower Roller Bearing Co.
"
Bearings
188,130.00
DA-TPS-1209
Ahlberg Bearings Co.
"
Bearings
306,300.00
DA-TPS-1355
The Timken Roller Bearing Co. "
Bearings
1,326.00
DA-TPS-1149
E. I. du Pont de Nemours & Co. If
Potassium Cyanide
1,155.00
DA-TPS-1129
Woodings-Verona Tool Works
If
Chisels
1,240.00
DA-TPS-1181
The Noble & Westbrook Mfg. Co. "
Marking Machines
3,264.00
DA-TPS-1252 Verson Allsteel Press Co.
If
Brake, Press
3,215.00
9
Regraded nc
DA-TPS-1403 General Motors Sales Corp.
If
Bearings, Ball
356,000
394,000.00
DA-TPS-1399 Bower Roller Bearing Co.
If
Bearings, Roller
76,729.85
DA-TPS-1398 The Timken Roller Bearing Co.
#
Bearings, Roller
135,790.00
DA-TPS-1411
SKF Industries, Inc.
If
Cages, Bearing
15,000
1,500.00
DA-TPS-1410
The Abbott Ball Co.
If
Balls, Bearing
240
403.20
DA-TPS-1353 George F. Pettinos
If
Compound Binding
126 lbs.
7.56
DA-TPS-1417 General Motors Sales Corp.
"
Balls & Rollers
121,488.0005
CONTRAC
ILQUISI-
NUMBER
CONTRACTOR'S NAME
TIONER
COMMODITY
QUANTITY
TOTAL VALUE
DA-TPS-1347 Union Bag & Paper Corp.
U.K.
Kraft Pulp
2,000 T
120,000.00
DA-TPS-1330
Shell Oil Co.Inc.
China
Special Propeller Oil
1,470#
102.90
DA-TPS-657
(Cancelled) Mc Cabe & Sheeran Mchy.Corp. U.K.
- 40,000.00
DA-TPS-886
(Cancelled)
Mc Cabe & Sheeran Mchy. Corp.
"
- 5,150.00
DA-TPS-1169
E.C. Atkins & Co.
China
Blades, Hacksaw
84,729.97
DA-TPS-1170
Henry Disston & Sons Inc.
"
Saws, Band
30,560.83
DA-TPS-1376
If
Gulf Oil Corp.
Paraffin
1,000#
76.50
DA-TPS-1332 Standard Oil Co. of N.J.
II
Lubricating Oil
736,500 gals.
320,377.50
DA-TPS-1331
18
Sterns, Inc.
Special Propeller Oil 12,600#
1,455.02
DA-TPS-1329
Socony-Vacuum Oil Co. Inc.
"
Blade lubricant, Reduction Gear Oil,etc
1,678.05
R. M. Hollingshead Corp.
"
DA-TPS-1333
Rocker Arm Grease, Spark Plug Grease, etc 2,512.50
DA-TPS-1421 U.S. Steel Export Co.
U.K.
Rails and Splice Bars
21,704 GT
1,006,452.55
DA-TPS-1120
(Adj.Ded.)
Bethlehem Steel Export Corp.
If
- 1,310.84
DA-TPS-1122
(Adj.Add.)
Russell Burdall & Ward Bolt
& Nut Co.
1,310.84
Total Purchases 9/19 to 9/26/41
$
7,940,618.40
Regraded Unclassifie
95
THE BRITISH SUPPLY COUNCIL IN NORTH AMERICA
COPY
Box Gao
Benjamin Franklin Station
Washington, D, 0,
September 26, 1941
Kr. Frank Dietrich
United States Treasury
Washington, D. C.
Dear Mr. Districh:
I have heard further from London regarding the text of the
announcement about Niemeyer and Cochran. They accept the form of
words suggested here except that they wish to add e few words at
the end,
The note to be issued by London will read:
"At the request of His Majesty's Government and on
invitation of the Chinese Government Sir Otto Niemeyer
has undertaken E financial and economic mission to China,
Sir Otto has recently been in Washington consulting with
American officials. Kr. E. Merle Cochran, Foreign Service
Officer and Technical Assistant to the Secretary of the
Treasury of the United States is travelling to Chine with
him. Sir Otto Niemeyer will be accompanied end assisted
by M. James Baxter, Financial Adviser to the Governor of
Burma who has lent his services for this purpose."
Yours sincerely,
(Signed) T. I. Bewley
1. E. Bewley
I now hear they are issuing tomorrow 27th. I have told 3ell
by phone.
Cony:1an19/27/41
Regraded Unclassified
0
o
VALANTRY WAIVER
?
UNITED STATES COAST OTARD
96
T
RASHINGTON
120221
as September, 1041.
From:
Spagest, Shanghai, China.
To I
Secretary of the Treasury.
-
Hall Fatch and I have agreed ea joint statement
regarding your "Manila" plan and London's telegram of
September 15th. Resease of cable congestion here state-
most is being forwarded to you and Phillips via London.
I - postponing the trip to Chungking for a for days.
(Signed)
Rd
CEOLINE CEO LIE
Coll
TV
Regraded Unclassified
e
o
?
I
97
TREASURY DEPARTMENT
United Platon Geast -
SHORDY
Vashington
16 September, 1941.
From: Ohine.
to 1 tecretary of the Treasury.
Message free Mr. Noz.
Hall Patch has belatedly informed M that there would be a -
day's delay in maps from London be Weshington, and therefore I
as sending 197 joint statement La sections as fast as possible.
JOINT STATEMENT OF HALL PASSE AND FOX
1. Ve have discussed the sentents of the telegram from Leader
of September 15th regarding plan for leard and agency, 1.0., Rechange
Control Comission. We are of the opinion that " DOOD as - agree-
next is reached between Washington and london stops should be taken to
communicate with the Chimase Devermment to prevent their taking any ill
sensidered seasures.
2. Clarification of the position of the heard: It is apparent
that there is Anger of a wlash between the beard and the commission.
This question vas disensed at the insugeral meeting of the commission
bus was not reselved. the commission enrol & cooperative attivate
toward the board, but the situation is pressrions as the beard has 48-
- and is discharging daties which have boen fersally assomed as
belenging be the comission.
3. H. 1. Easy intends apparantly to adhers to the terms of the
apressate and must of Letters of April 25th, all the latter has
gives vide powers to the semission which be entrols.
$20227
Regraded Unclassified
98
9a detailed plan for the working of the commission was
in final form de the appeared for the fiver meeting. The
- is being translated, and a further telegram will fellow
should the plan differ is any important respect from the texts al-
ready tolegraphed.
5. There have been almost daily years releases about the
commission and the wide powere assigned to it, bas since 198 Image-
ral meeting, the comission has taken as stops to par into effect
my 160mg publicly assessed and the allocation of enshange has less
left to the heard.
6. E. 1. Ewag and the commission expressed antisfaction
with the board's operations and particularly with the steps tabes
towards closing the black market at Shanghat, but the heard contrate
its operations on infference and at say time notion may be taken
by the commission or Ministry of Please to cripple it. It is
urgest, therefore, to clarify the situation.
7. the beard has found 16 feacible to operate free Hong-
long, even though - delay is Imposed upon norchants is Shanghai.
Changicing has tasitly asquired is this agreement which 10 desir-
able to continue if present smienble Agreement with Banghai beat-
are is to be mistained. The present agreement is working fairly
well, but branches of the heard is other and less important contros
my be 200000577. with the clarification of the functions of the
board and provision for Inseming foreign exchange being credited
to the leard, there are resemble changes of continued
operation of procest arrangements. It is at least with a langer
trial.
520219
+
Regraded Unclassified
99
#.
9a electry the position there are the following alter-
activest
& that British and American maters be added be the
standing condition of the comission.
1. setting - of 6 joses policy condities copital
is conversations with Fez as Smile to serve se & lisk
between the comission and the beard.
9.
the first alternative would directly associath foreign
with as organisation whose political emploxion circus -
corn to all Chinese numbers of the board and is which there are
may missinable elemants. Fee feels these considerations rale ast
this alternative. On the other hand. Hall Fatch thinks the second
alternative will entail a less of face which Inc will " far to
avoid. If foreed upon his, be my will stultify usp action by the
policy condition through his centrol of the comission, to which
the policy consittee would be substituated. In us? caso, 16 will
be impossible for the foreign members to avoid - consention
with the comission, however undestruble that my no. is Hall
Patch's view my solution which empites the active apposition of
less vill - Ze feels the second alternative weld
emite this opposition bet that with skillful handling lang sight
accept the first. Yes does not share this view and thinks every
offert shvuld be unerted to codere the joint policy consittee
and believes that Imp weld be villing to accept 10 as the -
meeting link between the large commission and the beard. Purther-
2020 For feels the feet that America and British tresuries
- 3 -
Regraded Unclassified
100
wall be villing so cooperate with the policy committee es freesing
miters of the consittee as instituted bet reald otherwise cooperate
with the heard and not the commission would be a. poverful faster is
inducing the Chinese Deverment to accept the sommittee. No also
believes that in the atmosphere prevailing new this joint policy
comilies sould most certainly formalise exchange operations of
the beard and reggest other stops which would be more acceptable
coming from 11 than if they were forced upon the Chinese Deversment
W United States and United Kingdom treasuries directly. Whichever
solution 10 adopted, present operations of the beard should be 119-
sred by come formal authority at - early date (See last
of paragraph 6 above).
vaa
5.21
9/26/41
Regraded Unclassified
TELASURY DEPARTMENT
101
United States Count Duesd
Washington
SECRAT
Press
Spagent, China.
fe I
Postetary of the treasury,
(Continuation of message of September 260h, joint
statement of Hall Fatch and Fax)
10. There to urgeney for conclising exchange from exports and
remittances. the beard 10 spending its funds, but there is as replea-
ishment. Assurances have been given that exchange assering tree 12a
perte and remittances wall be turned ever to the heard, but this has
not been dase. 1. 1. limg's Meas new com to be as fellows:
4. - Such funds should be hold is M expense account to the
board's credit.
2. - That before exhaustion of the beard's present funds, the
three governments to concert as to replemishment, Chima's centri-
baties to be that under 4.
This is a deplarable 1dea, and early stops to canalise is payments for
the board's credit are advisable.
11. de - Exports. - Ve agree that control over export procests
can saly be made effective through the cooperation of American ml
British authorities.
D. - Remittances. - Fex, after his viest se Manile and cob-
versations with Mulder of 1.1.1. exchange centrol, believes that this
tax best be dese w having foreign archange consulted 14 the Central
Bank of China for the credit of the heard through various collecting
- the counterpart is rept being más available W the beard to
Regraded Unclassified
102
the Central Bank of Usins for distribution to the named agencies to
chine of collecting books. this would place a great responsibility
is the hundo of the Control Bank of China, - be United is epite of
the resegnized of that bank, is would micriche tide with
If its personnel 10 strengthened. Hall Fatch considers this plan
places tes mash pover is the hands of the Central Bank of Order and
that the machinery would be too emberies. No vould profer - a
reagement w which the collecting beater could realt to my of the
Licensed of authorized basics is China for the credit of the heard,
de would supply the counterpart in fupi for distribution.
12. The tolegram under reference maggets that foreign -
ready be held "otther in the - of the agreedy or better 00121 is
that of the heard." After reviewing the constitution and personnel
of the comission, 19 - meet under to have foreign currency
sanalieed there. the reggestion to canalies them with the bear.
directly would clearly shew 8 lask of confidence to the Chinese -
emergent and night be resented.
13. Centrol of importe into Shanghel. Many of the difficul-
ties feeed by the heard with respect to thought operations aries
from the and for export and import centrol. It to clean
4, There are large stocks of commedities is thoughal
2. with retuced speculative apportunities to other fields,
there will be increased speculation is comundities, and that apart
the the reduction cansed w shipping difficulties, etc., 10 to
-
- 2 -
Regraded Unclassified
103
desirable to hold down Emporte late Shanghal. lov this cas be
accomplished raised a difficult question to which further stady
noeds to be given.
XED OF JOINT STATEMENT
PUX
100.206 I
SECRET
3
BELEINED
Regraded Unclassified
Shanghai, China.
104
September 25, 1941.
For Secretary of the Treasury)
Shanghai trade returns show import surplus for eight months current
year Amounts to over sixty million U. S. dollare or monthly average
geven one half million, This indicates the demand likely to be made
on Stabilization Board. Shanghai total foreign trade in August showed
decline of four million sixty two thousand U. S. dollars or approximately
twelve nine half percent, Decline due to drop of over four million or
aboroximately twenty percent in imports set off to some extent by rain
in emarts of three hundred forty thousand or three one half percent.
Increases in imports were mainly from Siam and French Indochine, There
we drastic drop in goods sent to Kwangtuans lensed territory which fell
from sixteen million in July to two million in August thie to closure of
trans Siberian Railway was most of goods destined for Germany, This
loss, however, more than balanced by increase of fifteen millions in
exports to Netherlands Indies and increase to Hongkong of thirteen million.
U.S.A. still remains largest importer into Shanghai although her share
has fallen to twenty percent as against thirty five last year. Importe
from Grest Britain have declined forty two percent compared with January
August eriod last year, Imports from Germany increased eighty six
percent and amounted to twenty million customs dollars, however, this
coming to end, Twenty five percent Shan-he1 exports so far this year
have gone to U.S.A. fifteen percent to Hongkong ten gercent to Kwangtung
leased territory. Last year percentages were thirty two fifteen and two
238 half respectively.
Regraded Unclassified
COPY
(CONFIDENTIAL)
PARAPHRASE
105
A telegram (no. 67) of September 26 from the offi-
cer in charge of the American Embassy at Nanking reads
substantially as follows:
There are few sources of information in regard to
revenues of Japanese-sponsored regimes and these sources
are difficult of access. The best information available,
however, is to the following effect:
It is said that during the year 1940 the total
monthly revenue collections averaged $25,000,000 (Chinese
currency) and the expenditures about $20,000,000. How-
ever it is reported that recently the.collections and
expenditures increased to something like $40,000,000 and
$36,000,000, respectively.
It 10 said that the monthly income from the Chinese
Maritime Customs allocated by the Japanese to the regime
In Nanking amounts to about $22,000,000 at the present
time - an increase of about $1,000,000 compared to that
of August 1940.
Although in August 1940 the consolidated tax amounted
to only $7,000,000 that tax is now said to be bringing
in about $10,000.000 B. month.
The actual collections of "special" tax (moetly on
opium) are not known. It seems that this tax 18 "farmed
out", presumably to Japanese interests, as it 1s reported
the
Regraded Unclassified
CONFIDENTIAL
106
the income is fixed at military yen 1,500,000 a month,
The amount of income tax received remains negligible
although it is now reported that this tax is being col-
lected from interest on stocke and savings accounts and
business profite besides those on Government salaries
which were collected in 1940.
Although there is no increase in tax rates officials
in Nanking claim that the same is true in Chungking.
Partly at least as a result of the increased tax burden,
the cost of living in the past three months has gone up
almost 20 per cent.
It is reported that the percentages of collections
are: tax receipts and land revenue, 55: salt tax, 6:
consolidated tax, 25; other taxes, 14. It 1s reported
that percentages of disbursements are: military expenses,
35: enterprises - most of which consist of reconstruc-
tion - 15: subsidies, 15: domestic expenses for opers-
tion of the Government, 11; administrative operations
of the customs, 10; finance, 5: education, 5: grants for
Sino-Japanese societies for students in Japan, and other
cultural work, 4.
The British Consul states that on September 23. dur-
ing the course of an interview, he was informed by &
member of the Ministry of Industry that arrangements with
the
Regraded Unclassified
CONFIDENTIAL
107
the Japanese were almost completed providing for full
control by the Nanking regime of taxation on and the
trade in tea and egg products with partial control over
eilk and possibly rice.
Civic or other improvements observed in Nanking do
not reflect the seemingly improved condition of the
Nanking regime as indicated by the above reports. All
of the revenue made available to the regime in Nanking
remains in Nanking by grace of the Japanese subject to
a contimed compliance with Japanese demands and may
be shut off whenever the Japanese aee fit.
It is difficult to learn whether contributions made
by the Japanese Government to the regime in Nanking
are greater than the Chinese subsidies in Nanking toward
occupation expenses. However, it seems likely that the
Japanese contributions are greater and that profite
going to Japan from Nanking do not accrue to the Japanese
Government, but increase the wealth of individuals and
firms connected with the armed forces of Japan. There is
reason to believe, however, that 8. portion of the
yen 300,000,000 credit from the Japanese Government in
Nanking, announced in June, 18 being used to expand the
Chinese military establishment at Nanking.
Regraded Unclassified
No. 1819
108
Lima, September 26, 1941.
Subject: Two hundred sixty-three Kilograms of Gold Imported
from Japan.
CONFIDENTIAL
The Honorable
The Secretary of State,
Washington.
Sir:
I have the honor to inform the Department that the Japanese
steamship Noto Maru on September 22 disembarked in Callao seven
boxes containing two hundred sixty-three kilograms of gold in bars
consigned to Yoshio Cobayashi, Lima.
This matter was discussed with the Minister for Finance and
Commerce who explained the gold is for purchases of cotton and wool
which the Japanese desire to obtain in Peru. According to the
Minister, the Peruvian government was not disposed to accept yen
exchange which the Japanese offered. It was mentioned the Japanese
also had proposed barter transactions in which textiles, toys, and
other Japanese goods would be exchanged for cotton and wool.
Respectfully yours,
For the Ambassador
Julian Greenup,
Commercial Attache.
51
JG/tp
A true copy of
the signed orig.
tp
eh:copy
10-7-41
Regraded Unclassified
TREASURY DEPARTMENT
109
INTER-OFFICE COMMUNICATION
Chaunces
DATE September 26, 1941
TO
Secrepary Morgenthau
FOI
FROM Mr. Dietrich
confidential
Registered sterling transactions of the reporting banks were as followe:
Sold to commercial concerns
£130,000
Purchased from commercial concerne & 8,000
Open market sterling was quoted at 4.03-1/2, The only reported transaction
consisted of £2,000 purchased from a commercial concern.
The Argentine free peso again experienced as moderate decline. The closing
rate was .2355. as against .2358 yesterday.
The Venesuelan bolivar moved off to a final quotation of .2685. It will be
recalled that, earlier in the week, the boliver dropped from -2755 to .2735.
In New York, closing quotations for the foreign currencies listed below were
as follows:
Canadian dollar
11-1/8% discount
Brazilian milreis (free)
.0505
Colombian peso
.5775
Mexican peso
.2070
Uruguayan peso (free)
.4400
Cuban peso
3/8% discount
There were no purchases or sales of gold effected by us with foreign countries
today.
No new gold engagements were reported.
In London. spot and forward silver were unchanged at 23-1/24 and 23-7/16d
respectively. The U.S. equivalents were 42.67# and 42.550.
The Treasury's purchase price for foreign silver was unchanged at 350. Handy
and Sarman's settlement price for foreign silver Vas also unchanged at 34-3/40.
We made no purchases of silver today.
D
Regraded Unclassified
110
BRITISH EMBASSY,
WASHINGTON, D.C.
Personal AND
secret
September 26, 1941.
Tear Mr. Secretary,
I enclose herein for your
personal and secret information
a copy of the latest report re-
ceived from London on the military
situation.
Believe me,
Dear Mr. Secretary,
Very sincerely yours,
R. I.Campbell
be Honourable
'olonel F. Knox,
Secretary of the Navy,
Havy Department,
Washington, D.C.
Regraded Unclassified
111
TELEGRAM RECEIVED FROM LONDON LATED
SEPTEMBER 24, 1941.
U/E p.m./21 set on fire /aleatine schooner
on passage from Deirut to Maifa; crow landed et
Type.
Purther attacks L convoy at 2235/23 re-
sulted In British ship of 3,753 toma being surace
Air attacks o: enghast herbour continue
almost every night and right of 21/22 hits on
ships nt Italian mole observed.
About thirty enemy aircraft operated
postly In Bristol Channel aron night of 25/24th.
Regraded Unclassified
RESTRICTED
112
G-2/2657-220; No. 503 M.I.D., W.D. 11:00 A.E., September 26, 1941
SITUATION REPORT
I. Eastern Theater.
Ground: Both German and Russian reports indicate heavy
fighting around Leningrad.
East of Kiev, the mopping up of Russian forces
continues. The German official communique asserts that the number
of prisoners captured in this area has reached 492,000.
In the Crimea, German attacks are reported against
the Isthmus of Perekop.
Odessa continues to offer strong resistance to the
besiegers.
Air: It is reported that the Germans are using parachute
troops in the battle of the Crimea Peninsula.
II. Western Theater.
Air: German claims of having set fire to a large merchant
ship in the Thames estuary constituted the only report of action re-
ceived from this area.
III. Middle Eastern Theater.
No information received.
RESTRICTED
Regraded Unclassified
RESTRICTED
113
MILITARY INTELLIGENCE DIVISION
TENTATIVE LESSONS BULLETIN
WAR DEPARTMENT
No. 163
Washington, September 26, 1941
0-2/2657-235
NOTICE
The information contained in this series of bulletins
will be restricted to items from official sources which are
reasonably confirmed. The lessons necessarily are tentative
and in no sense mature studies.
This document is being given an approved distribution
and no additional copies are available in the Military Intel-
ligence Division. For provisions governing its reproduction,
806 Letter TAG 350,05 (9-19-40) M-B-M.
TANKS IN COMBAT - JUNE 5, 1940
SOURCE
This bulletin 1a based upon the report of en American offi-
cial observer in Berlin. The report, dated May 10, 1941, contained
a trenslation of one of a series of articles published in Deutsche
Allgemeine Zeitung, a Berlin daily newspeper.
The articles, which were written by A German tank commander,
are believed to have been approved by the Germen General Staff before
publication.
Intended propagandistic effects should not be overlooked.
CONTENTS
1, INTRODUCTION
2. BREAKING THROUGH THE WEYGAND LINE
3. COMMENTS OF OBSERVER
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TANKS IN COMBAT - JUNE 5, 1940
1. INTRODUCTION
This bulletin deals primarily with the action of & tank company
in a panzer division which participated in the attack, on June 5, 1940,
against the Weygand Line south of the Sontme River, about 20 miles weet
of St. Quentin. It contains information on the general formation of &
tank regiment in this attack, the missions assigned to the tank assault
echelons, and the difficulties encountered by subordinate tank units
and individual tanks during the attack. It also illustrates the rather
long distance at which the tank assault echelons operated ahead of the
foot troops, and the resulting difficulties which were encountered by
the foot troops and the tank supply and maintenance elements. While
it io true that the foot troops oventually regained contact with the
tanks, the possibilities of a strong hostile counterattack during the
interim should be considered.
The following sketch should be used in connection with the action
described in part 2 of this bulletin:
Moislains
Feuillers
Clery
Somme
Assevillerso
Belloy
Estree
Roman Road
Ablaincourts
Pressdire
Chaulnes
N
Hallo
Hattencourt
0
5
10
15
20 Em.
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8, BREAKING THROUGH THE WEYGAND LINE
"During the night of June 4, our regiment marched via Moislains,
over the temporary picneer bridge between Clery and Feuilleres - five
miles west of Peronne - to its position of readiness, east of the
Fuuilleres-Assevillers road. Our company arrived at its designated
area in the regimental position at 3 A.M., just before daylight of the
Sth. The lowland along the Somme was behind us; in front of us
stretched the crest of a emooth ridge, the far, or southern, slope of
which WAB under hostile observation. As soon at we reached the cover
of this ridge, we established local security. Then We refueled And ato
breakfast.
"At 4:30 &.M. the captain, in B. low voice, gave his last-cinute
instructions: 'In the regiment's attack against the Weygand position,
the 2d Battalion will constitute the leading echelon; the lot Battalion
will be the second echelon. The 4th Company will be the foremost unit
of our battalion, which 16 to attack the railroad installations in the
emall town of Chaulnes, the initial battalion objective.
"Careful preparations had been made for thie attack. Heavy
artillery had been placed in position, and the terrain had been ro-
connoitered by the company commanders during the preceding days of rest.
Exactly at 4:45 A.M., the initial barrage of the Gorman batteries broke
loose against the enemy lines. Mizzle flashes flared up behind us as
far as we could see, end the thundering shots shook the air for a
quarter of an hour and inspired us with confidence during the last few
minutes before the attack.
"At 5 A.M., June 5, 1940, just as the sun WAS rising, the tanks
lined up for attack. The villages within the zone of attack were
passed by on right and left. We pushed through our foremost foot ele-
cents at Assevillers, approximately 4,000 yards from the tank company's
position of readiness, and soon were in contact with the enemy, At
Selloy we encountered machine gun and rifle fire, but our tanks
continued their rapid advance, firing upon the edge of the village na
they moved around it without deviating from the direction of attack.
Travelling across country, we pushed on to the Roman Road which ran
across our direction of attack. As soon as we had crossed the two road-
side ditches and the broad asphalt highway, we arrived at Eatree, on
the enemy's main battle line.
"Bstree itself had been transformed into a small fortress; anti-
tank guns had been so placed that they could fire through small holes
in the valls of the buildings. Hostile infantry WAB concealed in clever]
*Chanlnes was approximately six miles from the German front line nt that
time.
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116
camouflaged positions and miniature urmor-covered bunkers. This re-
sistance was temporarily overcome by the 2d Battalion, which was leading
the advance, but once the tanks had passed, the resistance vas renewed,
and the infantry following could make little progress against the heavy
fire. From that point on ve found that every village and every small
woods had been transformed into strong nests of resistance, from which
we faced fire from antitank guns.
"As the tanks approached the decisive battle zone, we heard
through our earphones the captain's voice, repeatedly warning us of
the enemy artillery positions.
"On the horizon, four or five kilometers ahoad of us, we
suddenly saw innumerable miszle blasts from hostile artillery; the lead-
ing echelon was immediately enveloped in shell burste. But the advance
continued without slowing up, the leading schelon shifting to the left
to avoid this artillery fire. The let Battalion, moving in a south-
westerly direction, pushed past Ablaincourt and Pressoir.
"A nighty battle scene was presented. In front of us, the ad-
vancing 24 Dattalion overran the enemy artillery, some of whose guns
were firing directly at our tanks. & few crews abandoned their pieces
when they realised how repidly the foremost tanks in our battalion were
advancing towards them. In the foreground, and on the flanks of our
advancing tanks, trajectories of tracer projectiles from German tanks
and French antitank guns crossed each other. In my company, three
tanks were hit by French 25-mm. antitank projectiles, but there were no
losses,
"The decisive encounter between our advancing tanke and the
directly opposing field or heavy artillory, soon ended, and we in the
4th Company found that we were in the foremost company of the loading
echelon. We put several artillery pieces and antitank guns out of action
at the stubbornly defended edge of Chaulnes, and we then moved around
the western limits of town to the railroad station south of it.
"The tracks in the railroad yard were quite an obstacle. In
crossing them, the assault formation of the company became 80 disor-
ganized that it could not be reformed until we had arrived at the ridge
south of Hallu, where we took up B. covering position towards the south,
300 yards north of Hattencourt.
"Thus, by noon we had already passed our objective; but artillery
and antitank guns in Hattencourt were firing at us in the 4th Company
and at the battelion staff in front of us. Acting upon orders, we
moved about 100 yards towards the rear. During this move the battalion
adjutant's tank fell into a tank trap about four meters deep, and the
battalion commander's tank bellied down at the edge of the same hole.
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Inasmich AS salvage work was hindered by well-aimed rifle fire from
Esttencourt, heavy tanks were utilized in the efforts to dreg out the
trapped tanks. At the name time two other heavy tanke from the 4th
Company drove towards Rattencourt and swept the edge of the village
with machine gun fire. One tank pushed on into the village and brought
down several enemy riflemen before it encountered B. barricade and had
to turn back. In the meantime, the other tank, while observing the edge
of the village, was damaged slightly by a 25-mm. antitank projectile
which struck its turret. Since a third heavy tank was needed for the
salvage work at the hole, and as the tank which had been driven into
the village had a damaged gear, the platoon commander's tank eventually
assisted, and finally the two trapped tanks were pulled out of the hole.
"Meanwhile, the Commander of the Battalion Light Platoon had
discovered the hostile sharpshooter who was hindering the salvage work.
The latter was operating through an opening in the roof of one of the
village houses. His fire vas silenced by one round from the platoon
commender's tank weapon.
"Our company advanced farther south and southwest. In the
evening we received heavy fire from French artillery on our front and
on our flanks, the latter not yet having been rolled up by our deep
tank thrust to the south.
"At 10:30 P.M., our company, less two of its heavy tanks, was
withdrawn to protect Hallu. Those two heavy tanks continued to cover
towards the south until 2 P.M. the next day, taking 6. few prisoners
an they went.
"Since the foot infantry WELD unable to reach the tanks, the
combat echelon remained cut off from all connection to the rear during
the night, and urgently needed supplies could not be brought to the
forward elements. It WAS essential that we have transportation in
order that we might bring up several hundred shelle and several thousand
rounds of machine gun emminition, and might carry back the battalion
wounded,
"The experiences of Corporals Sch, and R., commander and driver
respectively of a machine gan tank, give B. vivid picture of the events
which later occurred, After crossing the Roman Road and entering the
enemy's main battle position, those two NCO's furnished protection for
another machine gun tank that had lost its track when it had been
rammed by a heavy tank. While the repair work was being completed under
hostile fire, Corporal Sch.'s tank put two enemy machine eun neets out
of action, thus assisting the riflemen to cross the Roman Road. After
the track had been repaired, Corporal Sch. started across the battle-
field in an effort to catch up with hie company. Near Ablaincourt his
tank was put out of action by a hit from a 25-mm. antitank gun. As his
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radiator had been pierced, it was only with the greatest difficulty that
he drove to cover in a sunken road, There he found several wounded tank
crewmen who were also taking advantage of the cover, Corporal Sch.'s is
crew set up & machine gun for protection against the enery. By this
time, our tanks were far shead and our riflemen far to the rear. A
disabled German tank, burning nearby, made a large smoke cloud, under
cover of which the two NCO's moved their machine gun & few meters for-
ward in order to get a better field of fire, But the wind changed and
cleared the smoke away from in front of them. As this enabled the
enemy to observe them and to keep them under fire for several minutes,
they decided to come out in the open and to summon the French to
surrender. The latter retreated into the village, from which point they
began to find the range to the sunken road with their antitank guns and
machine guns. At this dangerous moment the tank crew, and the wounded
in the sunken road, were relieved from their predicament by the arrival
of German tanks from the rear.
"The company headquarters group, with its open cross-country
car and several motorcycles, vas to follow the combat platoons half an
hour after the assmult had began, An account of the activities of this
group illustrates the cooperation that existed between the tanks about
and the infantry following.
"After passing through Belloy, this group, also, encountered
heavy fire from machine guns and antitank guns, and from the enemy
artillery barrage, 200 meters deep, which still fell in this area, The
company headquarters took cover for an hour; then its men jumped into
their vehicles and drove toward the rear, despite the machine gun fire
which followed them in rapid bursto, & few hours later they decided
to venture another dash up to the Roman Road. But this too failed, for
although it was already afternoon, the enemy machine gun fire was still
so heavy that the open cross-country car, in spite of increased speed,
had to turn back again. Upon its return to Clery, the group met the
combat train that had meanwhile arrived from the rear. Not until the
next day were these two groups able to move up to the front; not until
9 A.M., at the southern exit of Hallu, were the rations handed out.
"Sergeant-Major Kn. gives the following report on the command
of the company combat train and maintenance squad:
'When the combat platoons left the position of readiness to
begin the attack, I followed after them with two side-car motor-
cycles until I had almost reached Estree. There I was stopped by
enemy infantry fire. My next bound took me up to the Roman Road
where the combat platoons had halted, Since hostile fire made it
impossible to cross that road, I decided to drive back to my supply
vehicles and guide them into Estree. As I had driven forward
across country, I had some difficulty in finding their camouflaged
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position, but at after much running to and fro, I finally
discovered it. I detwhed my company section from the regimental
maintenance company and led it to Estree on a route which had been
reconnoitered previously. Following our arrival there, I deployed
my vehicles and triew so resume contact with the combat platoons,
which, meanwhile, had advanced far ahead. In front of me, I saw
only the vacent battlefield which VAE still covered by French fire.
'Returning wounded reported that one of our tenke had broken
down about two kilometers ahead, the machine gun tank of Corporals
Sch, and M.. I tried to advance on foot, but the enemy fire stopped
me, Then 1 attempted to drive around the village of Entree and
continue forward, About 1,000 yards from our combat platoons, I
W&B met by such heavy artillery fire that I found further advance
impossible. Between shell bursts, I led my repair group back about
1,500 yarde to & point boyond the hostile fire. Leaving the vehicles
behind, I tried a third time alone on By motorcycle - to establish
contact with the combat platoons. In the meantine, Estree had been
taken by our riflemen; the heights beyond it, however, were still
subjected to effective hostile infantry and artillery fire. I
turned back again, but this time I drove to the division command
post to obtain information about the leading echelons - radio con-
tact with them was unsatisfactory. At the command post I learned
that the tanks were already 15 miles shead and that it WAE impossible
for them to make further headway.
'Shortly after this, word came back that the regiment was
surrounded and was in great need of ammunition, fuel, and spare
parts. The hour for bringing up the combat trains was still un-
announced. I left B. messenger behind at the division command post,
and then made contact with the regimental maintenance company. The
only thing left for us was to wait for the order to bring up supplies
this order did not come until after midnight.
'The situation on our right and left was unknown. Just before
arriving at Chaulnes we saw disabled German tanks on both sides of
the road, We drove through Chaulnee at daybreak, and AB the
battalion combat train included trucks which carried ammunition,
fuel, food, tools, and spare parts, we were able to move cross-
country and to deliver the needed supplies to the combat platoons. 18
3. COMMENTS OF OBSERVER
a. In the described employment of tanks against B. prepared position
such as the Weygand Line, it will be noted that prior reconnaissences
vere made by tank unit commanders down to company commanders. This is
in contrast to German procedure after the breakthrough of the Dyle
position, northwest of Namur, on May 15, 1940, where one tank company
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commander, during the movement of his unit towards the front line, used
his attached Battalion Light Platoon to locate suitable tank routes
across railroad tracks, through obstacles, and over difficult terrain.
There may be several reasons for the more detailed reconnais-
sance which was made prior to the attack on June 5, 1940, against the
Weygand Line. Undoubtedly there was more time available, since it 18
stated that reconnaissance in the Chaulnes area was accomplished dur-
ing the preceding days of rest, That the Germans thought advisable
this utilization of the rest period, should be remembered. In addition,
the nature of the hostile defenses, the terrain, the distances involved,
the dispositions of friendly troops, the plan of attack, and other
considerations may have demanded B. detailed reconnaissence in that
section. Lastly, it is probable that the experiences resulting from
their attack against the Dyle defenses without thorough prior tank
reconnaissance proved to the Germans that such reconnaissance is necess
sary to ensure success.
b. The German artillery preparation, just preceding the tank attack
against the Weygand Line in the Chaulnes area, began at 5:45 A.N.,
Fifteen minutes later, the tanks formed to depart from their position
of readiness for the attack.
c. It will be observed that the German position of readiness was
approximately 4,000 yards behind their front line; Chaulnes, the tank
battalion's initial objective, was approximately 6 miles, or 10,500
yards, beyond their front line.
d. According to the picture presented in the above account, the
German tanks passed to the right and left of the towns in their zone,
or route, of attack, firing with their weapons into the edges of the
villages AE they moved around them.
It is stated that the tanks did not change their direction of
attack when passing villages, and that they advanced cross-country in
places, No mention of unit boundaries is nade, It in believed that
German tank units are assigned objectives and general directions or
routes thereto, utilizing terrain to the best advantage, rather than
boundaries or zones of action within which they are to operate.
e. The description of the combat between the two German tank
battalions and the hostile artillery indicates the advantages resulting
from the employment of an overwhelming mass of tanks against such
targets.
*See Tentative Lessons Bulletin, No. 147. G-2.
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f. It appears that after the battalion had passed its initial ob-
jective at Chaulnes, the battalion staff of the 4th company - the lead-
ing company - received fire from artillery and antitank guns in
Hattencourt. This indicates that the battalion commander and certain
members of his staff must have accompanied his unit, and at times led
it in the attack. It should also be noted that the tanks of the bat-
talion commander and his adjutant both were immobilized in the same
tenk obstacle.
E. The account reveals that two heavy tanks, although they were
under small-arme fire, assisted in towing to solid ground the immobi-
lised tanks of the battalion commander and his adjutant. It should also
be observed that tanks, partially disabled on the battlefield, moved to
cover where repairs were initiated or completed. When no foot troops
were present, friendly tanks - in one case the Battalion Light Platoon -
attempted to neutralise the hostile fire which was hampering the repair
work,
h. The experiences nerrated by the NCO in charge of the company
combat train indicates the difficulties involved in supplying a rapidly
advancing tank unit in combat. Intelligence, initiative, energy, and
endurance are some of the qualities that should characterize officers
and NOO's charged with the supply of such units.
This same NOO, with certain assistants riding in two side-car
motorcycles, followed the assmiting units AS closely as hostile small
arms fire permitted. Apparently acting on his own initiative, he
tried to keep his vehicles as far forward as possible.
It should also be noted that he apparently was in charge of
the movements of the company maintenance group, which remained with,
or in the vicinity of, the regimental maintenance company until the
NCO led it forward in an effort to reach the assault platoons.
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September 27. 1941
Memorandum for the Secretary's Filee
Mr. Bewley requested an interview with the Secretary to
transmit an inquiry he had received from his Government. He
called on September 26. Mr, White was present.
Mr. Bewley informed the Secretary that his Government
had been told by the Russians that Mr. Jesse Jones had stated
to the Russians that they could not employ any of the dollars
which Mr. Jones was making available to the Russians to pay
for goods obtained from the British. Mr. Bewley stated that
the arrangements which his Government had made with the Russians
was that 40 percent of the export excess (excluding armamente)
sent to Russia was to be paid for in gold. In view of the
statement which the Russians reported Mr. Jones had mads, his
Government had requested Mr. Bewley to ascertain the views of
Secretary Morgenthau as to the propriety of their receiving
payment in gold from the Russians as the arrangemente called
for.
The Secretary said that he would transmit the inquiry
and the memorandum which Mr. Bewley left outlining their
arrangemente with the Russians, to the President, and would
let Mr. Bewley know the President's decision 88 Boon AB it ⑉88
received by Secretary Morgenthau.
Regraded Unclassified
FORDEFENSE
BUY
FIELD ORGANIZATION News Letter
ENITED
STATES
MATHES
BREENER SAVINGS STAKE
Supplier
TREASURY DEPARTMENT. WASHINGTON "
September 27, 1941
Number 19.
TO THE FIELD STAFF:
This issue of the NEWS LETTER is devoted entirely to 1 description
I the way in which the Defense Bond Pay Roll Allotment Plan was pro-
Fennaylvania, suitted to employees of the Wetropolitan Edison Company of Reading,
This highly successful presentation her alreedy been refurred to
in the NEWS LETTER ( August 23, Number 14) but at that time the charts
which are pictured in this issue wore not available, Mr. E. J. Ingran,
note business manager for the Company has now mnde available to us not
only the charts but also R. resume of the talk which thuse charts served to
{llistrate.
The way in which an allotment plan is presented will have a great
Hill to do with the onthusiasm with which it is received. n well thought
net and well illustrated talk, such 15 ar. Ingred's, will undoubtodly
mip to secure a favorable reception for an allotment plan; although, of
evense, no one talk will be untirely suitable for all occasions and all
Members of the Field Staff will surely find of great interest this
fail resume of a highly successful pay roll alletment presentation,
How successful it. was may be indicated by the fact that within one month
liter the plan was presented, over 80% of the nore then 2,000 employees
if the Metropolitan Edioon Company had enrolled.
We and indood indebted to Mr. Ingram and to the Metropolitan Edison
Copy for the privilege of bringing this presentation to all mumbers
CD the Field Stnff.
Sincerely yours,
GALE F. JOHNSTON
Field Diroctor, Defense Savings Staff
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124
PRESENTING A DEFENSE BOND PAY ROLL ALLOTMENT PLAN
By E. J. Ingram
New Business Manager
Metropolitan Edison Company
Fineword
Even though E systematic savings plan of pay roll allotments for U. S.
Defense Savings Bonds is the thing, it still must be sold to the key
organization and to the rank and file personnel of any company which has
agrood w the installation of such a plan. A mere statement of the avail-
anality of an allotment plan will not rosult in high percentage enrollment.
A pamphlet embodying the essential funtures of the allotment plan -
it is to be operated, is highly desirable. But necessarily such a booklet
is an informative and factual rather than 1 promotional piece of litersture.
Therefore, in addition to any such booklet, there should be a dramatized
presentation to arouso interest in, explain and "sell" the Defense Savings
idea.
Science tells us that 87% of all impressions notivating us, are
received through our eyes. By designing charts or posters to supplement
en oral presentation, the Audience's attention is focused on the matter in
hand, and its imagination in stirred by the pictorial presentation. Then
too, a talk based on carefully prepared charts ossures that -11 important
points are developed in an orderly sequence, building up to 1. climax
resulting in positive favorable action.
"Setting the Stage"
During the period while those expected at the meeting are casembling,
the stago should be set for what is to fullow. The posters, which should
proviously have been placed in a prominent position on an casel and covered,
with, for instance, n. filtured gold cloth, should be spotlightod. This
simple little setting arcuses curiosity.
The Company Plan Book should NOT be passed DUE st this time.
During this puriod such recordings as the following should be played:
"Arma for the Love of America"; "He's My Unclu"; "Oht They're making 1,0 All
Over in the Army"; and other popular numbers. (Note: Do NOT play "Any Bonds
Today" at this time.)
The musical introduction should be so timed that the following two pieces
my be played in the order listed, and the meeting then brought to order
impediately thereafter: (1) "Wrap Your Dreams in the Red, White and Blue";
- (a) All (Kata Soith year).
The (Pecker should be introduced by the Company's local ranking LOID
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125
Presentation
"Kate just did a grand job on that song 'We're All
Americans', didn't she? It does something to mo, just as I know
it does to you - I'm glad I'm an American! - Aren't we alli -
That song gives you a 'lift', a feeling of hope in this war crazy
world, a swelling of pride - Wo're All Americans!
"America - what is America? - It's the greatest democracy,
the greatest nation of still free people in the world - and we're
resolved to keep it that way.
"Our country has brought forth many great men - one of the
greatest among them buing Abraham Lincoln - a simple, plain man,
a real, heart warming, typical American. Lincoln made one of
the greatest addresses of all times - his Gettysburg Address.
We all know it - learned it in school - foreign-born seeking to
gain the coveted honor of Amorican citizonship learn it by
heart. Its passages are probably quoted, and oft times in
reverence, more often than any other utterances in history".
(Remove cloth, showing Poster #1)
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120
CZECKO
FRANCE
SLOVAKIA
NETHERLAND
BELGIUM
ONVINE
POLAND
NORWAY
GREECE
VUGOSLAVIA
that THIS Nation
shall not perish
from the earth
Lineoln:Critysburg Addres
ADVERTMENT painting INFO -
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122
"Lincoln in dedicating as hallowed ground the battlefield at
Gettysburg said in his plea for the unity of our nation - 'That
these dead shall not have died in vain, that this nation ...
shall not perish from the earth'. That utterance had significance
then, and far greater significance today, as we read the European
war communiques, mindful of France, Belgium, The Netherlands,
Poland, Norway, Greece, the Balkans - fallen nations - felled at
the point of a gun by aggressor powers.
"Who knows but what when this is all over those nations or
some of them may have perished from the earth. So Lincoln's
words, prayerful then, must today become our firm resolve - that
this Nation shall not perish from the earth."
"A tremendous war - an all-out war is being waged in Europe,
Every nation of the world is affected, directly and indirectly.
America is affected, vitally 80. There is no need to relate the
piled up facts. The destroyer swap for hemisphere bases - the
Lease-Lend Bill - the Iceland occupation - the Roosevelt Churchill
meeting - the Greer incident - and many, many others."
(See latest newspapers for timely references.)
(Remove Poster 111, showing Poster #2.)
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YOUR
*
*
M
*
*
*
*
AMERICA
Regraded Unclassified
129
"All these things add up to one all important conclusion -
self evident - your country, your America faces an emergency,
an unlimited emergency, an emergency that is, without a doubt,
the gravest in our history."
*
*
"In time of dire national peril, the free people of a free
country have always rallied round. So today, as the situation
becomes more tense, more critical, more and more people are ask-
ing: 'What can I do to help?' Well let's see what you and I and
every red blooded American can do, right now.
"You've all heard of 'M' day - Mobilization Day. This has
been written up many times in the popular periodicals - the
plans for the mobilization of the resources and of the man power
of our country as, if, and when we should declare war on any
foreign power or they upon us - the plano which show where you
and I and all of us fit in. Our country is not at war
Yet. we face an emergency - we are to be the Arsenal for
Democracy - we must perfect our own all-out defense. So at
peace, ngr still has tremendous bearing on our lives."
(Remove Poster #2, showing Poster #3.)
-
Regraded Unclassified
130
Materials
M
Money
8
M. 5. GOVERNMENT PRINTING OFFICE I -------------------------
Regraded Unclassified
131
"M stands for Men - the nen who have volunteered and who have
been inducted into the armed services of our land. Think of the
tresendous sacrifices that they have been called upon to make -
parted from their funilies, their friends, their former way of
living, their jobs - dome to be away for two and a half years - maybe
longer, for the duration - -
"M stands too for Materials - the priority materials required
for the fabrication of armament items, planes, ships, guns, tanks,
etc. Here again great sacrifices will have to be made. Consumer
durable goods have boen curtailed and will undoubtedly have to be
curtailed nuch further. Many of us will have to go without some
of the new things we'd like, care, refrigerators, stoves, furniture,
silk stockings, otc., etc. The list is long and will grow longer
daily. Mary hardships will be worked upon individuals, even upon
whole communities, through the closing of sone plants due to in-
ability to secure priority raw matorials for normal production.
It will not be and it cannot be 'Business AS usual' as well as
Defense.
"Then M stands for Money, the closing of our triangle, the
necessary baso upon which the whole of our offorts of nen and
materials must stand to assure and to point to a glorious success."
"Our present day world crisis did not develop over night.
It has been forming and fostoring for years. Our country's offi-
cials saw it coming years ago and started to prepare for it then,
but a democracy at peace and with the rost of the world at peace,
was hard to arouso,
"Our Government is one of the people. Yet one of the great-
est problems of our Goverment is to get its people to take an
active, intelligent, informed interest in it.
"Foreseeing an inpending crisis and in an endeavor to over-
como the apathy of the American public, the U. S. Treasury, on
March 1, 1935, placed 'Baby Bonds' on salo. Such an issue would
provide part of the necessary funds for deficit operations during
a period of economic depression but more importantly, such an issue
would provide many small investors sound investments at an attrac-
tive rate of interest; and by extending the ownership of Government
socurities, bring more people to take an active interest in their
government, its problems and its operations."
(Resove Postor #3, showing Postor #4)
Regraded Unclassified
132
*
Mar. 1,1935-Oct.31,1940
U.S. BABY
SAVINGS
BONDS
4.435,520,550
*
Maturity Value
10
8. c. DEFERRMENT PRINTING arrict # SHIP - 400072
Regraded Unclassified
133
"Let's see what resulted. During the period of August 1,
1935 to October 31, 1940, the American public purchased almost
four and one half billions of dollars, maturity value, of these
U. S. Baby Savings Bonds, without fanfare or high pressure promo-
tion. Such a result was outstanding. But world events moved
rapidly. The concepts and conclusions formulated one day were
outmoded the next; the situation became more and more acute; the
economic picture changed rapidly."
#
#
#
*
"We began to hear of and to feel the beginning of price
inflation and of the necessity of guarding against it. Prices
began to rise. The dread spiral of price inflation must be
curbed, but how?"
(Remove Poster #4, showing Poster #5.)
DIVERAMENT rejeries
11 -
Regraded Unclass fiec
134
*
*
INFLATION
RENTS
AUTOS STATE APPLIANCES
CLOTHING
FOOD
TAXES
SAVINGS
EARTH
135
"Our gigantic defense program has put more and more money
into circulation, thus creating more and more demand for a
decreasing available supply of durable goods. Government and
private economists have studied the situation and their unani-
mous finding is that price inflation can best be controlled by
increased taxes and increased savings."
*
*
*
*
*
"Believing implicitly in the soundness of and absolute
necessity for a large scale national savings plan, the Govern-
ment, through the U. S. Treasury, launched a new program."
(Remove Poster #5, showing Poster #6.)
u. a. GOVERNMENT PRINTING affice
- 13 -
Regraded Unclassified
136
FOR DEFENSE
BUY
UNITED
STATES
SAVINGS
BONDS
14
U.S. GOVERNMENT PRINTING OFFICE t - o 400578
137
"U. S. Dofense Savings Bonda - heard of them? Sure you have,
who hasn't These Defenso Bonds are receiving the grontest, the
biggest, the most spoctacular, the most genuinely enthusiastic
presentation of anything over offered the Amorican public - whole-
heartedly backed, endorsed and promoted by thousands of Americans,
mon and women. "Minute-Men", giving of thoir time and talents, all
on a gratis basis, instilled by patriotiam, by love of country.
"You are all aware of the trenondous amount of radio publicity
which these Defense Bonds have received since the Bonda wore placed
on sale. But you probably did not realize that all of this public-
ity has cost the Trensury Department nothing. All of it has been
contributed to this cause by the radio stations and networks, com-
mercial sponsurs and scores of store of the entertainment world.
"The Treasury Hour, Millions for Defense' is only the most
spectacular of these contributions. Practically all companios
which uso radio nutwork time to advertise their products have cun-
sistently, since the Defense Savings Program bugan, contributed
part of that tine to boost the sole of Defense Bonds, Practically
every radio station in the country has broadcast five spot announce-
ments about the Bonds every day since the first of May.
"Banks are contributing their services by handling bond soles
without commission or cost to either the Government or the investor.
"Large national advertisers and many local business fina are
using their billboard, newspaper and other advertising spaco to
keep the objectives of the Defense Savings Program constantly before
the public.
"It is safe to any that never in the history of the country
have su many individuals and agencies joined together to advertise
a single product."
"
*
"These Defense Bunds were made available May 1, 1941."
(Remove Poster #6, showing Poster #7.)
. DIFERRENT regative enco
- 15 -
Regraded Unclassifie
138
May 1, 1941 to
June 21, 1941
$624,020,00
of Defense Savings Bonds
plus
$5,677,000
of Defense Stamps
16
M. 8. GOVERNMENT PRINTING OFFICE I (94) - 400472
Regraded Unclassified
139
"Up until June 21, 1941 over $624,000,000 in Bonds and
$5,677,000 in Defense Stamps were purchased. It is moving fast -
this poster is now out-of-date. By August lst over one billion
dollars worth of Defense Bonds had been purchased proving their
unusual appeal and the patriotic response of our countrymen.
The program is going forward by leaps and bounds. You ain't
seen nothin' yet!"
(The most up-to-date figures available should of course be used in
making a presentation.)
*
*
*
"We've been speaking about Defense Bonds. I wonder if
everyone is really familiar with all their details."
(Remove Poster #7, showing Postor #8.)
M. 8. servicest painties OFFICE
- 17 -
Regraded Unclassified
140
United States
DEFENSE
BONDS
(SERIES E)
1. Security
2. Units
3. Interest
4. Redeemable
18
M. #. GENERNMENT PRINTING OFFICE 1 - - 0
Regraded Unclassified
141
"Defense Bonds, Series E. are for the average investor. No
more than $5,000, maturity value, can be purchased by une individ-
ual in any one calondar year."
(Here describe the following features of E Bonds: (1) Security, (2) Units,
(3) Interest, (4) Redeemable feature. Be suro to exhibit an actual bond.)
*
*
#
*
The facts about these E Bonds are being carried to every
American. Your country wants every American enrolled as a con-
sistent investor. How many of these bonds are sold is a con-
sideration secondary to 100% participation for all the reasons
previously enumorated plus the hope that the purchase of these
bonds will band us all even closer together - 130,000,000 strong.
Romember the story of the sticks which were easily broken separate-
ly but which when bundled together were unbreakable."
(Remove Poster #8, showing Poster #9.)
1. s. PRINTING ortige 19 -
Regraded Unclassified
142
Please
*
vs.
MUST!
*
20
#. 1. GOVERNMENT PRINTING OFFICE : - - 0-
143
"This program and its attendant features, is a 'Please'
program - not a 'Must' program, yet from day to day you see by
the papers that some people feel it may have to be a must program,
if we are to survive as a nation.
"William Green, President of the American Federation of
Labor, in July, urged Congress to authorise a mandatory savings
system for defense workers. John Maynard Keynes, the famous
English economist, recommended forced savings for Great Britain
at the outbreak of the war and his plan or a modification of it
has since been adopted there. Various American economists and
government officials have advocated adoption of some form of
compulsory thrift. But the Defense Savings Program of the Treas-
ury Department is on a strictly voluntary basis.
"An awakened America will, I'm sure, put it over on a
'Please' basis, and if we realize the necessity we'll gladly go
all-out on defense savings."
# # # #
(Remove Poster #9, showing Poster #10.)
0.2 a a GOVERNMENT PRONTING errice
- 21 -
Regraded Unclassified
144
une
I.S. BEFENSE SAVINGS ⑉
VOLUNTARY
EMPLOYEE
SAVINGS PLAN
22
1.1. GOVERNMENT PRINTING OFFICE
Regraded Unclassified
145
"Believing that each of you would welcome a ready means by
which you could set saide, regularly, & portion of your earnings
to meet your future personal needs, and believing that each
individual would welcome an opportunity to do his part in the
Defense Program, to feel a sense of personal participation in
our country's united effort, your Company has developed a
Defense Savings Plan for all employees.
"Through this plan the Company will make available facili-
ties for the convenient purchase of U.S. Defense Savings Bonds,
Series E, by means of voluntary pay roll allotments. The Plan
is explained in the pamphlet shown here which will be given to
you in just a moment."
"This Program, this Plan, is bigger than this Company or
our group of Companies - it's National - it's All American."
(Remove Poster #10, showing Poster #11.)
- 23
Regraded Unclassified
146
*
Armour GENERAL MOTORS
Bethlehem Steel
*
Boeing U.S.RUBBER
MILLIONS OF
AmericanWorkers
Enrolling!
A.T.&T. RAILWAYS AMERICAN
Federal Reserve Banks
ESSO
24
LL PRINTING office 4 -- o 408572
Regraded Unclassified
147
"HeΓe are a few of the many companies in which employees are
buying Defense Bonds through pay roll allotment: American Teleph
and Telegraph; U. 8. Rubber; Chrysler and General Motors; General
Electric; Bethlehem Steel; Allis-Chalmers; Boeing & Douglas
Aircraft; International Harvester; Armour and Swift Packing; R. C.
A.; Standard Oil of New Jersey, Shell, Phillips, Tidewater and many
other oil companies; Metropolitan, New York, Prudential, and many
other insurance companies; Pennsylvenia and New York Central railway
systems and every other eajor railroad as well as a majority of the
'Short Lines.'
"In addition to these nationally known concerns thousands of
local firms - public utilities, banks, factories, breweries,
stores and other businesses - have made it possible for their
employees to save systematically for Defense Bonds through an
allotment plan.
"Voluntary pay roll allotment for Defense Savings has been
endorsed by leaders of the A. F, of L., C. I. O., and railway
brotherhoods and by international labor unions, state federations
of labor and local labor unions."
(Refer at this point to endorsements of the Defense Savings Program
by State and local labor leaders and by labor organizations with
which members of the audience may be affiliated.)
"The Treasury Department's Defense Savings Staff is giving
special attention to allotment plans and is doing all that it
can to foster and encourage their adoption. All over the country,
special committees of volunteer workers - Defense Savings Committees
- are helping to set up these plans and to secure a large percent-
age of enrollment and participation.
"This is the age of the 'Blitz,' Well the Defense Saving
Pay Roll Allotment Plan is 'Blitzing' too."
*
*
#
(Remove Poster #11, showing Poster #12.)
as NOVERNMENT
- 25 -
Regraded Unclassifie
148
SAVE!
FOR
1. FINANCIAL SECURITY
2. EDUCATION
3. HOME
4. FUTURE OBLIGATIONS
5. RETIREMENT
6. FUTURE REINVESTMENTS
26
11 GOVERNMENT PRINTING OFFICE E
149
"So far the appeal made to you has been an appeal to your
patriotism. Yet there is another side, a self evident one.
Save: save for yourself and yours. We were all taught thrift
and saving at our Mother's knee, in school, all through life.
"Saving is one of the sterling attributes of Americans as
evidenced by many facts, for example, the fact that Americans
own more life insurance, which is saving, than all of the rest
of the world together.
"Certainly we should save - for lots of reasons. Here
are a few:
"Save For:-
1. Financial security
2. Education of growing children
3. Home (to retire present mortgage or to purchase
a new home later)
4. Future obligations (to buy a new car, furniture,
vacations, etc.)
5. Retirement
6. Future roinvostment"
#
#
*
*
(Remove Poster #12, showing Poster #13.)
** GOVERNMENT PRINTING effice
- 27 -
Regraded Unclassified
150
Features of
U.S. Defense Savings Bonds-Series
Payroll Allotment Authorization Form
Changes in Payroll Allotment Authorization
Funds Held in Trust
Purchase of Bonds
Receipt of Bonds
Assignment
Responsibility
Termination of Plan
28
S.S. GOVERNMENT PRINTING affice I se - 400572
Regraded Unclassified
151
"All of which leads up to the allotment plan which is new
to be available to us."
(Here describe the particular plan being offered in detail, explaining
the reasons for various features, especially those about which there
might be some misunderstanding.)
"Questions may be asked later and we'll either have or will
get you the answers."
+
#
-
(Remove Poster #13, showing Poster #14.)
- 29 -
Regraded Unclassified
152
Government
Brochures
4
<<<
/
i
/
1
1,
/
Becamen
I
Il
1
1
/
1
1
/
-
HH
di
I
1
a
/
A
30
U.S. GOVERNMENT PRINTINE OFFICE I -
153
"Your government, through the Defense Savings Staff of the
Treasury Department has made certain literature available for
distribution to you. These pamphlets and folders explain the
Bonds in detail, tell why you and every other American should
subscribe, and give other pertinent details,"
(Here distribute to each person present an envelope prepared in advance
containing information about the Company's plan, a Pay Roll Allotment
Authorization card, and appropriate Government brochures.)
*
*
*
#
"I have told you of the contributions made to this Defense
Bond program by actors, actrasses, radio artists and others.
Song writers have done their part too. Irving Berlin has captured
the appeal of and the necessity of this endeavor and put it to
music in a grand piece. May I play it for you?"
(Play "Any Bonds Today".)
#
(When song starts, remove Poster #14, showing Poster #15, without comment.)
.
é
GOVERNMENT
31"-
Regraded Unclassified
154
WILL
32
#. 8. GOVERNMENT PRINTING arrict 1 - e 400577
155
(When record is finished:)
"Practically every other appeal that is made to you is to
give - Community Chest, give! - Salvation Army, givel - Red
Cross, givel This relief and that relief, give! - worthy
causes all, but this time for yourself, your safety, your
democratic way of living, your country and the all-out defense
of it - Give? NO! - LEND and lend till it hurta. You'll
get back more than you lend - more in money as well as in
security.
"Your Uncle Sam asks WILL YOU?"
(Question and answer period follows.)
Note:
The next issue of the
NEWS LETTER will contain the
usual reports from the field, etc.
-33-
Regraded Unclassified
15
CONFIDENTIAL
UNITED STATES SAVINGS BONDS
Comparative Statement of Sales During
First Twenty-Two Business Days of July, August, and September, 1941
(July 1-26, August 1-26, Sentember 1-25)
On Basis of Issue Price
(Amounts in thousands of dollars)
:
:
Amount of Increase
: Percentage of Increase
Sales
:
:
or Decrease (-)
:
or Decrease (-)
Item
:
:
:
: September :
August
: September :
August
: Sectember
:
August
:
July
:
over
:
over
:
over
:
over
:
:
:
a
August
:
July
:
August
:
July
Series E - Post Offices
$ 33,880
$ 35,322
$ 43,296
-$ 1,442
-$ 7,974
- 4.1%
- 18.4%
Series E - Banks
59,931
66,155
81,189
- 6,224
- 15.034
- 9.4
- 18.5
Series E - Total
93,812
101,478
124,485
- 7,666
- 23,007
- 7.6
- 18.5
Series F - Banks
15,663
17,474
21,467
- 1,F11
- 3,993
- 10,4
- 18.6
Series G - Banks
94,642
109,836
137,543
- 15,195
- 27.707
- 13.8
- 20.1
Total
$204,116
$228,787
$283,495
-$24,671
-$54,708
- 10.8%
- 19.3%
Office of the Secretary of the Treasury, Division of Research and Statistics.
September 27, 1941.
Source: All figures are deposits with the Trensurer of the United States on account of proceeds of
sales of United States Savings Bonds.
Note: Figures have been rounded to nearest thousand and will not necessarily ndd to totale.
Regraded Unclassit
WITED STATES SAVINGS
Daily Sales - September 1941
On 3nnis of Insue Price
(In thousands of dollars)
Post Office
Bank Bond Sales
All Bond Sales
Date
Bond Sales
Series È
Series E
Series F
Series G
Total
Series E
Series F
Series G
Total
September 1941
2
$ 3,021
$ 3.385
$ 1,182
$ 5,510
$ 10,077
$ 6,406
$ 1,182
$ 5,510
8 13,098
3
972
1,933
585
5.790
8,308
2,905
585
5.790
9,280
L
1,365
2,540
645
4,846
8,032
3,906
645
4,846
9,397
5
1,852
3,689
1,162
10,486
15,336
5,540
1,162
10,486
17,188
6
1,419
3,144
707
4,666
8,516
4,562
707
4,666
9.935
to
2,858
3,032
521
3,549
7,102
5,890
521
3.549
9,960
9
973
2,013
528
1,532
4,073
2,987
528
1,532
5,046
10
1,479
2,883
975
4,984
8,841
4,362
975
4,984
10,320
11
1,422
2,657
484
3,168
6,309
4,079
484
3,168
7,731
12
1,312
3,004
436
2,536
5,975
4,316
436
2,536
7,287
13
988
1,997
498
3.493
5,988
2,965
498
3,493
6,976
15
2,312
2,384
797
4,898
8,079
4,695
797
4,698
10,390
16
843
2,198
470
2,807
5,474
3,040
470
2,807
6,317
17
1,225
2,902
536
3,018
6,455
4,127
536
3,018
7,680
18
1,458
2,593
568
3,862
7,024
4,051
568
3,862
8,481
19
1,555
3,169
794
4,148
8,111
4,724
794
4,148
9.666
20
1,085
1,742
466
2,228
4,436
2,528
465
2,228
5,522
22
2,396
3,435
927
5,394
9.757
5,832
927
5.394
12,153
23
1,149
2,132
607
3,412
6,152
3,281
607
3,412
7,300
24
1,277
2,727
758
4,139
7,654
4,004
788
4,139
8,931
25
1,415
2,730
957
4,872
8,559
4,145
957
4,872
9,974
26
1,506
3,643
1,030
5,306
9,978
5,149
1,030
5,306
11,454
Total
$ 33,880
$ 59,931
$ 15,663
$ 94,641
$170,236
$ 93,812
$ 15,663
$ 94,641
$204,116
Office of the Secretary of the Treasury, Division of Research and Statistics.
September 27. 1941.
Source: All figures are deposits with the Treasurer of the United States on account of proceeds of sales of
United States Savings Bonds.
Note: Figures have been rounded to nearget thousand and will not necessarily add to totala.
Regraded Unclassifi
C
0
P
Y
158
FEDERAL RESERVE BANK
OF NEW YORK
September 27, 1941.
Sir:
Attention: Mr. E. Merle Cochran.
We enclose for your files a decode of cable No.
1 sent to us by the Stabilication Board of China in our
private code through the Treasury Department and received
by us from your Office on September 23, 1941. Also on-
closed is a copy of a cable dated September 25. received
from the Stabilisation Board of China, Hong Kong. quoting
the above mentioned coded sesange and advising that it had
been sent to us through the United States Treasury on Sep-
tember 20.
On September 25, 1941, with the approval of the
Treasury Department, we dispatched our cable No. 1 to the
Stabilization Board of China, Chungking, answering the
Board's cable No. 1. A copy of our cable reply in enclosed.
Respectfully,
/s/ D. J. Cameron,
D. J. Cameron,
Menager, Foreign Department.
The Honorable,
The Secretary of the Treasury,
Weshington, D. C.
Ence.
Copy:wec:9-29-41
Regraded Unclassified
159
COPY
INCOMING CABLEGRAM
Received thru Mr. Cochran's Office of the
Treasury Department September 23, 1941
Federal Reserve Bank of New York
New York
No. 1
Please confirm procedure establishing
Stabilization Board is now complete enabling Board
to draw funds.
Stabilization Board of China
Fox
Regraded Unclassified
160
COPY
INCOMING CABLEGRAM
September 25, 1941
Hongkong, September 25, 1941.
Federal Reserve Bank of New York
New York
On September 20th sent you through US Treasury
following message
"Number 1
Please confirm procedure establishing Stabilization
Board is now complete enabling Board to draw funds
Stabilization Board of China."
Bank of China has been advancing funds to Board and
we are anxious to return amount 80 advanced Cable whether
Boards account is available.
CHACTINGCHI, Secretary
Stabilization Board of China
Hongkong Bank Building, Hongkong
Regraded Unclassifie
161
COPY
OUTGOING CABLEGRAM
September 25, 1941
Stabilization Board of China
Chungking
No. 1
FOR FOX
Your No. 1. We as fiscal agent of the United
States are now authorized to act in accordance with the
Agreement of April 1 and are therefore prepared to accept
and act upon any cablegram or radiogram which we receive
as provided in paragraph 6 of the Agreement. Please ad-
vise by cable place of operations of Board both for in-
structions which may be given to us and messages which may
be sent by us and mailing address of Board to which state-
ments, advices and other written communications should be
sent.
Federal Reserve Bank of New York
Copy:wec:9-29-41
Regraded Unclassified
162
September 87. 1941
Filse
Hr. Dictrich
Mr. Dell informed - today that be had been advised W Mr. Dowley that the
pross release as sir Otto Niemayer - going to be made oa September 27.
appeared is the New York Place as item to that effect.
Mr. Bell said that be had arranged se have our press release released -
September 27 also.
Dilay-9/27/41
Regraded Unclassified
163
TELEGRAM SENT
DES
GRAY
September 27, 1941
2 p.m.
AMEMBASSY,
CHUNGKING (CHIMA) VIA HAVAL RADIO.
INFO: MERICAN CONSUL, HONG KONG
LIVERIOAN CONSUL, SHANGE.I (CHINA).
ANEMBASSY, PEIPING (CHINA).
231.
H. Merle Cochran, Foreign Service Officer on
detail at the Treasury Department as Technical Assist-
ont to the Secretary of the Treasury, is procesding
by clipper E aving San Francisco September 28 to Hong
Kong and China on official business for the Treasury
Department. HE is scheduled to arrive at Hong Kong
October 7 in company with Sir Otto Nismeyer of the Bank
of England. After a sojourn in Hong Kong he will visit
Chungking and Shanghai. HE becrs a diplomatic passport
designating him E.S. QUOTE Foreign Service Officer on
Special Mission UNQUOTE :
The Department requests that the Embassy and the
Consulates General at Hong Kong and Shanghai afford
Mr. Cochran all appropriate facilities. Please in-
form Fox.
Sent to Chungling. Repented to Hong Kong,
Shanghai and Priping.
HULL
FE:G.:MHP I PD
(DA)
Regraded Unclassified
THRASURY -
164
I
United States Comet Heard
Washington
110239
n September, 1941
Type:
China.
9a I
torretary of the Treasury.
1.
I have learned from a musber of reliable that H. 1. Easy
is is a stronger position Mir the is the early part of the year; is last
that be has over been.
2. I - reliably informed that Ching Kai-shak is of the opinion that
M Le receiving the present aid free the United States not because of 1. Y.
Boomg, but because of the fighting spirit that Chiang Kat-shek hinself has
shown.
3.
I understand that I. a. Keng is willing to strengthen the personnel
and procedure of the Gentral lest of China. Could & thoroughly reliable and
competent person who knows Federal Reserve presedure and organisation be
assigned to or kired n Ohim for a beinf period to movist is reorganising
the Central Bank of China, If 1 find in Changicing that 8. I. Kung is really
interested in strengthening the Gentral Bank? Inquiry will some through
regular channels.
4.
I have just been informed from reliable sources that the most likely
person to be appointed beed of the Ninistry of Trade is Ching Ching Aa, new
Minister of Communications, and not K. 0, Idea incleated in an air-mail letter
to Ceshran. Okiang's appointment will SETS the foreign trade commission
and will be better for the Universal frading Corporation.
5. Deth Southard and Compbell have been theoughly cooporative, best
their facilities for ording and deceiling are very limited. Base very garbled
Manager have been accepted and the point has been reached where I hositite
le send meanges. Something must be done at - to correct the situation.
I recoment that case person be immediately unde available to Southard by the
treasury to work os the cables. I - dismesing Compbell's office via
Sishelson.
(Signed) FOX
Copy:Ime
Regraded Unclassified
0
THEASURY DEPARTMENT
165
1
VUITAD STATES COAST QUARD
WASHINGTON
......
17 September, 1541.
Trum)
Syagent, thanghat, Ohion.
to I
Secretary of the Treasury.
the Chinese board members left Hongkong Saturday, 70-
turning Vednesday. a Member the 16th they attended a meeting of
the Exchange Centrol Commission and - impressed by favorable
steeephere and attivate to the board. They report Chinag Kai-shale,
1. a. Emg. and Chenghing efficial circles are highly satisfied with
the word's operations and developments with respect to restricting
the Shanghai blask market. Willingsons was manifested to have the
beard continue its exchange operations sad have the Exchange Comtrol
Commission function is the background. Said T. c. Kee beard will be
is the front line of fire and the commission in the rear. 1 under-
stand discussion at the meeting centered 42 the conflist between the
functions to the heard and the commission and the insvitability
of a clask unloss the situation is elarified. For the present 10 vas
to let matters drift.
I am reliably informed that I. a. Xung 10 receptive w
the alteration in the éneres setting up the heard. Be has approved
all the stops recomended w the beard before 10 takes action regard-
ing the black market is Heagkons. As your " approved w the board,
2 shall - you the plan involving:
......
Regraded Unclassified
......
166
1. Instructions to the Chinago Deverament, instructions
that all their yerchases in Rengleous must be consileed through the
Ministry of Finance.
s. Prevision of foreign exchange facilities for the flow
of legitimate trade from the coast to the interier.
3. Provision of funds by the beard to withdraw existing
tagel notes in Heaghang.
4. Asking the Heagkong government to cooporate is
(A) Limiting import sad export of fapi notes
(B) Prohibited free market operations in fapi notes
is Hong Kong
(e) Moving that cover for fapi is obtained from
Chinese government banks at official rate only
(D) Prossing fapi deposits is Hong Beng to be released
either for use is interier or is exchange for Hang Kong dollars
for legitimate requirements.
I have just received neve that & black market is devel-
oping is Tientsis, which will be mush harder to centrol, and that
the black market in Shanghai 10 fed w unlicement Chinese backs.
= plan to leave Monday for Chungking with Adder and Hewlett. I. I.
mg has been urging of return and Chen this " highly destrable
and syperture. I reseived your 199 of September 15th, which is the
first leng-mailed information from Washington regarding the plan
developed two weeks age. Since returning from Manila, I have 001-
laborated closely with Hall Patch, who showed at a report to his
government as the Exchange Centrol Commission meeting. and too
Regraded Unclassified
+
167
reports - staes matters. 1 must understand your INfertant to
the lask of reyarts. 2 have recently seet you (2) the agreement
with Shanghai bankeres (a) plan of organization - and comments
with respect to the Aschange Centrol Commission: and (3) ABOVORS
to questions 1. s, and é of your 205.
Pres all observations, the eystem - is operation Le
working quite well. Please meter though the Exchange Control
Commission is - eager to esoperate with the board, the latter
is still at the mm of the comission. The position with respect
to Shanghai compretal and savings bank and other leading Chinese
private basks is will fell a generally-lissused
status should be greated then. Chinag Eni-shek and N. E. Thang feel
ve have to tighten up es Shanghai. The same reservations as 0.70
now expressed w the British regarding the Central Bank were 02-
plicitly volsed W as is Manila, and you folt its personnel sould
be strengthened. Hall Faish has just received London's resetion
to the "Monila" plas. Be and I are discussing 14 at the first
opportunity and shall sable of comments. I should prefer not
asking further recommendations - the plan will - had a
change to discuss fully with Hall Pateh, K. P. Chen, and 8. H. Imp.
Before leaving for throughing, 1 shall check the eables and periow
the problems confronting 18 and comprete the questions requiring
ensvers.
Nicholesm to cooporating splentidly. Be has gives
his cooporation and reports from the Shanghai consulate, and with
Regraded Unclassified
+
168
the heard office is - net at all certate Aarona and Afria
not be replaced. 1 shall cable you regarding Sames and Asteress
as com as 1 have carversed the situation further, Anren's reply to
my request for the list of persons interviewed end the the basis for
his recommendation after too 40y's is Shanghai against proposed mai-
fisation of general licenses 10, 00, and 41, gives definite proof that
his recommendation vas sais on isadequate investigation and data.
Southard, always helpful, now tells - the report n
Shanghai regarding your 206 hold up another day. Sis staff is 1997-
worked, si his ora urgent messages are also hold 4
(Signed) FOX
......
TENICE OE THE
18:12Eb 3 W 5-8
21
-
Regraded Unclassified
o
169
I I
WITH them GOAST STATE
-
$ #
From: Spages, and
9a # Computery of the treasury.
the following this tree the hendquarters of Ching Kad-
St me comminated is & control letter to the heard w L 1. Imp
è % I a affile of 1 a à I
pross Company, - Net Ma, has hom assigned. by the Mindstry of
Ver of Japan to collect information en Dine-Amerisan and 8120-371-
that stabilization funds and to find out searet seasures of entral
between Great Britain, United States, and Ohina following
the freesing of Chinese and Jagamese assets by the United States and
the United Einglen."
Hung Ped Ma 10 the underin - for Per Kia Veng,
Chinces mager of the leaguess office. About two weeks 40, I
called Nicholesm to investigate - story about the Amt-
can Represe of Shanghai. Its reputation is not of the best. as
manager of the Banghai Wansh recently admitted is at interview
with Aarone that 100 sperations prior to the freesing vire
elmest entirely speculative.
(Signed) FOX
chiosyy
9-89-41
Regraded Unclassified
0
......
0
,
I
WESASURY IRPARTMENT
170
United States Deset Guard
Washington
September 27. 1941.
From:
Apagent, Emanghai, China.
Tes
despetary of the freasury.
the marest courses of seal the Banght are Entima
Administration, Mangay, and Inits. the Shoughas Power Company has
& long-standing contract with Kailan. 20 to important that these
deliveries should sentime, otherwise the power company would be
paralymed. Purther, they are the meet comminical shippers. Iniles
seal 10 payable in V. s. dollars or sterling, which maset nov be
dose under freesing procedures, as as general lisense covere ship-
maste from other China ports to Shanghai, and storling is not smil-
able for payments watside the sterling INS. 1 recommed you -
therise imadiately payment in dellarate Kailan for deliveries
to the Shanghai Power Company. fall Patch le requesting the United
Kingdom treasury for authority to pay sterling.
(Signed) FOX
Copy:dag:9-29-41
Regraded Unclassified
I
171
DES
GRAY
Buenos Aires
Dated September 27. 1941
Bec'd 7:45 p.s.
Secretary of State,
Weshington.
1047. September 27, 3 p.m.
Yesterday the Executive Power sent to the Chamber of Deputive
M. nessage drafted et EL Cabinet meeting called by the Acting President
the dey before. The message refers to the length of time verious
vitally important bills have been in Chamber committees and embr-
cimen the "peremptory urgency" of the passage of Inve regarding the
$110,000,000 loans, the sequisition of B merchant novy, military
purchases, financing of the crops, the budget, end the public works
plan, end especially repeats the Government's request formisted
through the Minister of Finance September 24 for a retification of the
lorns, mying that the matter affects not only the economy of the
country but its national dignity. The message declares that without
the resources provided by the loans, not only will the economic de-
fenee of the country be made extremely difficult through the effect
on agriculture, the prime resource of the nation's economy, but also
the plans for invorvement of the military defense will be interfered
with. The message continues:
"Velid couses cannot be invokei for persisting in the refusal
to grant the means most necessary to the general development of the
nation. Political motives do not puthorize the adoption of such en
sttitude, most esvecially when it is based exclusively on zeze
conjectures or impressione and when euch conduct in sustained only
by the will of P very small numerical majority of one of the Houses
of the legislative branch. The welfare of the Argestine people,
of the workers in the fields and in the cities, munt not suffer the
consequences of grudgee or political Siscutes foreign to its elemental
necessities of subsistence. Questions between carties or differences
of opinion should not be sijusted At the cost of the security of
lobor and the prestige of the Argentine people."
With the above statement the Government brings the matter
Emergy into the open and tactfully recognizes the redicels' 70-
-ition with regard to electoral guarantees in Fuenos Aires Province,
charging them with placing party interests above the national welfere.
The Chember decided to reserve action on the meanage pending
future study end in permanent session proceeded to devote the rest of
yesterday's session to a debnte on the 1942 budget.
An aditorial In LA RAZON, referring to the refuse} of the Charber
by averove the luans, states that this attitude in lasentable, and that
Regraded Unclassified
172
- 2 -
the redical majority will be held responsible before the country.
LA PRENSA criticizes the Government for introducing important bille
in the closing days of Congress and asking for collaboretion of
Congress without allowing time to study the bills and expecting
their approvel without debate.
ARMOUR
HSM
eh:copy
10-1-41
Regraded Unclassified
D
D
P
173
Y
THE
GRAY
Borlin
Dated September 27, 1941
Rec'd 12:45 Dellie
Secretary of State,
Washington.
3608, September 27, 10 D.S.
Weasures to combat the bullish trend of German
stock markets which has existed with certain interruptions
ever since the first months of the war, and has been
particularly marked in recent months, have finally been
announced. Numerous warnings had been issued against ex-
cessive stock quotations but these had only temporery
effectiveness and last week it became known that action
was finally to be taken. This resulted in a decline in
stock quotations all during last week followed by Bcee
recovery the beginning of this week up to Thursday when
many quotations again declined.
The measures amounced by the Reich Economics Minister
are: One, consus of all shares listed on German bourses
which have been purchased since the beginning of the WBT
but shares sold before a certain date (not yet fixed) need
not be reported. Regulations concerning the placing
(einsatz) of the securities listed my be made later.
Business is to be encouraged to invest its funds to &
greater extent than heretofore in Treasury paper: two,
banks will no longer be permitted to grant credit for the
purchase of shares listed on the market: in cases where such
credits are at present running they must be reported to the
Reich office for the surervision of banking unless they are
liquidated by October 31. Three, shares listed on the bourse
are to be sold only on the bourse to facilitate official
supervision of transactions. Business circles exnect that
further etems may be taken later.
MORRIS.
HSIP
Copy:b) :10-1-41
Regraded Unclassified
TREASURY department
174
INTER-OFFICE COMMUNICATION
DATE September 27. 1941
Secretary Morgenthau
TO
FROM Mr. Dietrich
confidential
Registered sterling transactions of the reporting banks were as follows:
Sold to commercial concerns
£10,000
Purchased from commercial concerns £ 4,000
Open market sterling held steady at 4.03-1/2, and there were no reported
transactions.
In New York, closing quotations for the foreign currencies listed below were
as follows:
Canadian dollar
11% discount
Argentine peso (free)
.2359
Brasilian milreis (free)
.0505
Colombian peso
.5775
Mexican peso
.2070
Venesuelan bolivar
.2680
Uruguayan peso (free)
.4400
Cuban peso
3/8% discount
There were no gold transactions consummated by us today.
The Federal Reserve Bank of New York reported that the Bank of Canada
shipped $3,081,000 in gold from Canada to the Federal for account of the Government
of Canada, for sale to the New York Assay Office.
AD
Regraded Unclassified
175
BRITISH EMBASSY,
WASHINGTON, D.C.
September 27th,1941.
Personal
and Secret.
Dear Mr. Secretary,
I enclose herein for your
personal and secret information a copy
of the latest report from London on
the military situation.
Believe me,
Dear Mr. Secretary,
Very sincerely yours,
R. R.I.Campbell
be Honourable
Henry Morgenthau, Jr.,
United States Treasury,
Washington, D. C.
176
TELEGRAM RECEIVED FRO 2 LONDON
DATED SEPTE FR 85th,1941
Between September 7th and september
14th, His Majesty's Submarine torpedoed merchant
vessel of 1500 tons; believed sunk. Damaged
probably sunk by Sunfire, large schooner in area
of
b shore batteries. Torpedoed merchant
vessel later seen to be on fire. H1: with one
torpedo minelayer Crotone class which was laying
mines off Benghasi. Attacked 5000 ton merchant
veasel north of Benghasi; result under ain.
P.M. September 24th, enemy Toastal
batteries fired six rounds into sea west of Dovers
convoy in vioinity suffered no damage.
Prench launch with cargo of petrol
Djibuti to Obok has is en intercepted and taken in
prise.
Royal Air Force yesterday probably
dropped two bombe on after part of tanker estimated
6000 tons of Gulf of Normy.
Night of September 22nd/24th, off
Kerkensh island swordfish and Wellington believed
another merchant vessel estimated 8,000
tons and da age small ship.
September 24th/20th no o Censive
operations weather unauitable.
orning September 23rd thirteen enemy
aircraft dropped mines at Tobruk.
Libya September 22nd/23rd. Six
Wellingtons attacked Benghamt barb r hits saar. on
DAROS of central and cathedral coles seven tons
bombe dropped at Tripoli (i) varracks an b ildings
lat t. september 23rd/24th subpoing in Tripoli
Regraded Unclassified
177
&
(L) harbour attacked 13 tone of bombs dropped.
One ellington missing September 24th 2 Blenheims
(one missing) attacked mechanical transport on
Misurata Sirte road destroying one potrol tanker
and damaging thirty other vehicles.
Regraded Unclassifie
178
Sunday, September 28.
Mr. Kuhn discussed this draft, at the
Farm, with the Secretary. Mrs. Morgenthau
also present.
179
Draft of Secretary Morgenthau's Speech
to the American Bankers Association at Chicago,
October 2, 1941
Three weeks ago I said that we were in the early stages
of & serious price inflation, and that we must deal with the
danger at once. I said then, and I should like to repeat it
at the very start of this talk today, that if we do not check
the spiral of rising prices, and check it now, the conse-
quences will haunt us and our children for years to come.
I outlined then a twin program for fighting inflation,
on the one hand by reducing excess purchasing power in the
hands of the public, and on the other hand by increasing the
supply of goods, like farm products, which do not compete
with the over-riding needs of our national defense effort.
D-B
Regraded Unclassified
180
4-
then, an
as
stly
I have
ever
heer
form
for
former thissek high
8 for his
crops th
or
1
der
seek
inual
new inew or in ages,
landlo my busi unen,
banke
up to exploit
sent el gency
the under
iding and
sups
130 million
in-fi ting he evil of
y means in our power.
peal has brought an overwhelmingly favorable
respond
I have never known anything like it since I
came 100.
Treasury eight years
6
The continued
advance in the prices of many staples in recent weeks
may mean that some peóple still doubt the Administration's
unity of purpose in checking inflation. Yet you have
D-B
Regraded Unclassified
181
- 3 -
seen the joint statement issued last week by the Federal
Reserve System and the Treasury, dealing with the raising of
bank reserve requirements to the limit of the law, and pledg-
ing full cooperation with the Office of Price Administration
and the new Supply and Priorities Allocations Board. That
joint statement was a reminder of the fact that the Govern-
ment already has powerful weapons of control in its hands,
and that if it needs more power it will ask Congress for
whatever it needs, in the fight against rising prices and
falling living standards. The Administration is just as
determined to beat down the forces of inflationary evil as
it is to defeat, at whatever cost, the forces of military
conquest that are running rampant across the earth.
There is no need to tell this audience of bankers of
the need of common effort, on the part of every group and
D-B
Regraded Unclassified
182
- 4
every individual in the community, if inflation is to be
averted. You have shown abundantly in the past year that
you are conscious of your duties and your responsibilities
to the country. You have given magnificent help, and given
it unselfishly and cheerfully, in the selling of Defense
Savings Bonds and Stamps. You have given further help in
the sale of tax anticipation notes which enable every tax-
payer to meet next year's heavy tax bill more easily. You
have cooperated willingly with the Treasury's control of
foreign funds, although I know that it interferes with the
free handling of your business affairs and subjects you to
many complicated regulations and questionnaires.
In all these and other ways you have been such real
partners of the government that I am very glad to be with
you this morning, to thank you personally for all that you
have done.
D-B
Regraded Unclassified
5 -
183
But the most important task of American bankers lies
ahead, in the critical months to come, and it is a broader
and bigger task than any you have yet been called upon to
perform. That is the task of doing everything in your power,
not only as bankers but as influential and respected leaders
in your communities, to fight this evil of inflation wher-
ever it rears its head.
Many of you will remember, from your own experience,
that inflation is just as damaging to bankers as to farmers,
wage earners or businessmen. We had a price inflation 25
years ago, and while there were sins of commission in those
days which we have not repeated and will not repeat, the
present course of prices is following the old pattern with
remarkable precision.
D-B
Regraded Unclassified
184
- 8 -
We know now that the great increase in bank loans and
investments from 1916 to 1920, an increase from 17.4 to
36.4 billion dollars in five years, and the resulting increase
in deposits, from 14.9 to 30.5 billion dollars in the same
five years, made possible the great increase in prices which
brought such hardship to American consumers and such disastrous
after-effects to American farmers.
We know now that the inflation of a quarter-century ago,
with all of its injustices and dislocations, could have been
avoided if the Government of those days had acted more promptly,
if it had taxed more heavily and borrowed more widely from genuine
savings.
When the inevitable collapse came, no fewer than 2,910
banks with 790 million dollars of deposits were compelled to
suspend operations in the five-year period from 1921 to 1925.
D-B
Regraded Unclassified
185
- 7 -
Humpty Dumpty had climbed to the top of a very high wall,
and many years of effort were needed to pick up the pieces.
It is our job at the Treasury, and yours as custodians
of the people's money, to make sure that any present-day
descendants of Humpty Dumpty shall not go climbing up that
wall of expanded credit and higher prices again.
D-B
Regraded Unclassified
- 8 -
186
That is why my first plea to you as bankers is that you
scrutinize closely your own lists of applications for loans.
Those lists contain within them much of the ammunition of
inflation. You have in your hands, therefore, one of the
most effective weapons for checking inflation at its source.
You are sure to find, on looking over your lists, many appli-
cations for money for non-defense projects that would involve
competition for steel or copper or lumber or any of the
thousand and one materials now needed so desperately for our
defense effort. If you can postpone all such unnecessary loans
until a later day, without waiting for the priorities to become
broader, you will be doing a real and lasting service to your
country.
I hope that in the not too distant future the priority
system will become so effective that the supply of all raw
materials for all purposes will be under full control in the
D-B
Regraded Unclassified
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187
interests of national defense. That should mean that
must
materials that een be used for defense purposes will not go
into any unnecessary civilian projects. But until that day
comes, I hope that you will constitute yourselves the sentinels
of the nation, in your own bank and your own community, in
guarding against any private encroachment upon the stock of
resources needed for the national effort.
Another essential service which you can perform is, quite
simply, to teach the people of your communities the facts about
inflation and defense financing, and about the situation in
which this country stands.
You see in your daily work men and women from many walks
of life. You are in a key position to advise them. And your
advice carries as much weight as that of 8. family doctor to
his patient or & lawyer to his client. I know that in these
serious times you will give the right kind of advice, and that
D-B
Regraded Unclassified
- 10 -
188
your influence collectively and individually will be joined
with that of your Government in its efforts to keep inflation
in check.
I think there is & real need of convincing the average
citizen, right now, that he will have to accept far heavier
burdens of taxation. There is a real need of preparing him
to make greater savings in his daily life to ensure the long-
run survival and improvement of his standard of living. Above
all, there is a real need of persuading him that this war
cannot be won quickly or cheaply or easily.
It will require all-out effort on our part to tip the
scales in this war. It will require every ounce of strength
that our giant industrial system can give. It will demand
sweat and sacrifice on the part of producers, workers, managers
and consumers alike. And it will mean the greatest public
expenditure that has ever been pumped into the arteries
D-B
Regraded Unclassified
11
189
of our economic system.
Defense expenditures have now risen slowly to a billion
and a quarter dollars a month. They will soon be a billion
and a half, but even then they will be utterly inadequate
compared to the need. Perhaps "inadequate" is too mild and
charitable & word. We are trying to make ourselves the arsenal
of democracy by devoting only 20 percent of our factory and
mining output to defense, only 30 percent of our output of
durable goods, only 10 percent of our output of non-durable
goods, and only 16 percent of our national income. That,
surely, is very far from total defense or all-out effort.
The magnitude of the job we have set out to do has not
yet been driven home to the American people. At present prices
the cost of the total defense program as now planned will be
more than 50 billion dollars. This is 10 billion dollars
D-B
Regraded Unclassified
- 12 -
190
more than the original value of all building construction
in the United States during the last twenty years. It is
more than the total original value of all passenger automobile s
now in use plus the total investment in American railroads.
To telescope this vast construction or production job
within, not twenty years or ten years, but within two, three,
or four years, is bound to affect profoundly every aspect of
our economic and social life. It is not 80 much the size of
the undertaking 8.8 the limited time at our command which causes
our economic system to heave and strain.
The problem was complicated at the start by the reluctance
of some crucial industries to expand their production facilities
to meet unprecedented defense plus civilian needs. Through
fear of what might happen after the emergency they held back
from measures necessary to meet the emergency. But there has
D-B
Regraded Unclassified
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191
I think, been a heartening shift in attitude in recent months.
The problem is now being viewed in its proper dimensions, and
we are on the road to an expansion of production which will
confound those of narrow vision and little faith who cried:
"It can't be done".
The capacity of America to produce over the long pull
is almost limitless. There is no reason whatever for us to
be discouraged over the size of the job ahead. We Americans
can do any job that we set ourselves to do.
Under the impact of our comparatively modest defense
expenditures up to now, our national income has increased by
ten billion dollars in a year, and we are feeling all the
preliminary symptoms of a serious price inflation. What will
the inflationary forces be six months from now, when we shall
be spending much faster and when the supplies of materials
D-B
Regraded Unclassifie
- 14 -
192
for civilian use will be ller than they are today? Where
will prices be then, if we do not act courageously to check
them now?
It is imperative that we set aside a great part of that
national income, and especially the increase in the national
income, if we are to arm ourselves in time and also put an
effective brake upon inflation.
One indispensable method of paying for defense without
inflation is "all-out" taxation, a method that has not yet
been tried in spite of the huge tax bill just signed by the
President. With the help of the new act our tax structure
will yield almost fourteen billion dollars in revenue, but
in my opinion it still contains many inequalities and many
omissions which will have to be corrected next year.
It does not even make a start toward ending the exemption
of state and municipal securities from Federal taxation. It
D-B
Regraded Unclassified
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193
does not deal fairly or adequately with the rich profits of
huge corporations which now escape excess profits taxation
merely because they have earned those rich profits steadily
year after year. It enables many wealthy taxpayers to escape
their fair share of contribution by preserving the separate
return for husband and wife. It does not bear down hard
enough on durable goods for consumer use which cause competi-
tion with the defense industries for raw materials.
In raising $3,500,000,000 in additional revenue, Congress
has made a good start with the Revenue Act of 1941. But the
next tax bill will have to be a genuinely "all-out" bill,
a. genuine levy upon all in accordance with their ability to
pay, if it is to raise the necessary revenue, place the necessary
check upon inflation, and take the profit out of war.
I have spoken of taxation as the first essential method
of fighting inflation. The second indispensable method of
D-B
Regraded Unclassified
194
- 16 -
drawing off excess consumer purchases 18 by borrowing as much
as possible from the genuine savings of individuals throughout
the country. We could always go to the banks for the bulk
of our financing; I have said repeatedly that this would the
easy way. We shall have to come to you for funds and I know
I can count on your wholehearted cooperation. The way to
proceed now, however, is to finance our needs 86 long as
possible without adding unnecessarily to bank deposits, to
borrow instead from small investors, and thus to reduce the
inflationary pressure of our swiftly rising national income.
The Defense Savings Program has now been in progress for
five months. It has yielded us a billion and a half dollars
from two and one-half million individual investors. The
result so far is certainly not below our expectations, but
certainly it falls far short of our needs just es it falls
D-B
Regraded Unclassified
195
- 17 -
short especially in that it has only begun to reach workers'
payrolls. Every one of the great national labor organizations
has given its endorsement to systematic saving, and voluntary
payroll allotment plans are now in operation in more than
factories employing million workers. Our strong-
est efforts must now be made in our great industrial centers,
and must be directed at the good sense and patriotism of the
workers themselves.
I can find no merit in the old Liberty Loan method of
fixing money quotas for communities, trades, labor unions,
school classes or individuals in this Defense Savings Program.
I can see no value, either in terms of economics or of morale,
in high-pressuring people to take money out of bank savings
accounts or out of life insurance. But I do see 8 great
benefit, financial and moral, in persuading spenders to
D-B
Regraded Unclassified
- 18
196
set aside, systematically, week after week, a part of their
current income for their own good and their country's good.
The time for free-and easy spending is past. It is time for
all of us to realize that the party's over now,
D-B
Regraded Unclassified
197
18
The kind of spending that the Treasury is most anxious
to divert into Defense Savings Bonds is the spending produced
by pay increases and bonuses. I should like to offer as
8. suggestion, for example, that every Christmas bonus in
the United States be paid in Defense Savings Bonds or Stamps
this year. The banks of America can start the fashion so
that it will sweep the country. The total amount of such
bonuses may be small, but there could be no finer example to
the public, no more striking reminder of the spirit of these
times, no better safeguard for the days of economic strain
that are sure to follow the war.
We at the Treasury believe that the voluntary Defense
Savings Program has already awakened a greater sense of pride
in America and & greater sense of participation in the
national effort. We shall continue along that road of
D-B
Regraded Unclassified
198
20 -
voluntary cooperation and I am perfectly confident that we
shall reach vast numbers who are willing and eager to put
their savings to work for their country.
In this effort the Treasury will continue to depend
greatly upon the bankers of America, not only as its agents
in selling Defense Bonds but also as missionaries in
spreading the gospel of savings. There are no commissions
for bankers in this work, and you have asked for none.
(
But
there also should be no unnecessary burdens or inconveniences
to you in performing this work of national service
I am
happy to announce to you this morning that it will no longer
be necessary for you to put up collateral for the series E
bonds which you may keep in stock for customers. I hope that
this will relieve the banks, especially the small banks, of
D-B
Regraded Unclassified
199
.
21 -
a real burden, and I hope that you will not hesitate to
tell us at the Treasury of any similar burdens which you
feel may be hampering you in the sale of these bonds.
Wider savings and heavier taxes will not, of course,
be enough in themselves to cope with the inflation that now
confronts us. I have already suggested an extension of
the social security program as a possible method of
absorbing several billion dollars of next year's national
income and thus building a further reserve for the future.
I have already suggested, not once but repeatedly, that
the Government cut down immediately on non-defense expendi-
ture, not only as sound financial policy but as sound anti-
inflationary practice. The price control bill is about
to be reported to Congress, and it may be a stronger and
D-B
Regraded Unclassified
200
- 22 -
sounder bill than when it was first introduced.
The combination of emergency taxes, priorities, savings
and price-control will cause some inconvenience, some hard-
ship, some sacrifice. Of course it will. We are now
engaged in a world struggle that will call for all our
energies and all the qualities that have made America great.
As a result of that effort we are compelled to fight another
enemy, the enemy of inflation, on the home front. How can
we hope to win unless we first throw onto the rubbish heap
all ideas of business as usual, pleasures as usual and
comforts as usual? In my opinion complacency is our major
source of weakness today in building our defenses, for it
saps our will and clouds our minds, and blinds us to the
stupendous size of the job that confronts us.
D-B
Regraded Unclassified
- 23 -
201
I know that we can conquer inflation on the home
front if we act now, just as I know that we can ensure the
defeat of foreign tyranny if we rouse ourselves in time.
Most Americans, I think, are beginning to see that they
have a personal stake in the fight against inflation, just
as most of them began long ago to see their individual
stake in the destruction of the Axis war machine, I am
confident about the outcome on both fronts, because I have
deep faith in the common sense of the American people. I
believe that if the people are shown the light, they will
see. I believe that if the people are shown the way, they
will respond.
D-B
Regraded Unclassified
202
PARAPHRASE OF TELEGRAM RECEIVED
FROM: American Embassy, Rome, Italy
DATE: September 28, 1941, noon
NO.: 1003
Obviously, it is impossible to verify the following
confidential report which was secured by a U.S. newspaper
correspondent. The source from which this correspondent
obtained this information is considered to be generally
reliable,
The expenditures of the Italian Government are now
running at the rate of 12 billion lire each month. The
revenues of the Italian Government are almost three billion.
The result of this is a deficit each month of nime billion.
deficit for the
This deficit of nine billion 1s comparable with the/fiscal
year of 1940-41, which 18 officially admitted as being
6,5 billion. The total expenditures, at this rate, for
the year 1941 of 144 billion would exceed by fifteen percent
last year's total estimated national income of 125 billion.
The estimated public debt of 275 billion would be increased
by an additional thirty-nine percent.
Even against such figures-or those which are admitted
for the year 1940-41--progress of the present nine-year
treasury bond flotation for financing of the war seems to
be medicore. This is indicated by reports which appear in
the press which say that subscriptions in the first six days
totaled only 9.9 billion lire even though one billion lire
above
Regraded Unclassified
203
-2-
above the results for the corresponding period (that 18,
six days) of the February issue. Employers, incidentAlly--
as a new device to swell subseriptions--have been ordered
to invest in national securities eighty percent of the
reserveswhich are legally required to be set up for the
reimbursement of those employees who have been dismissed.
Also of interest is the fast that concurrently with
the nov bonds which were offered, the security markets-
following the precipitous rise early in September--suffered
a sharp reversal. The shares price index dropped sixty-nine
points or thirty-nine percent during the period September
12-22; the sharp decline was attributed to insistent runers
of the impending of further measures which would affeet
security tramsactions-acoording to the authoritative
commercial daily, IL SOLE.
PHILLIPS
EAIPAK
865,51/1103
Regraded Unclassified