Volume 449, October 8 – October 9, 1941

DIARY Book 449 October 8 and 9, 1941 Regraded Unclassified - - Book Page Austria See War Conditions - B - Baruch, Bernard See Revenue Revision - C - China See War Conditions Coast Guard Explosive or inflammable material, etc.: Anchorage and movement of vessels, etc. - amendment to rules and regulations - 10/9/41 449 224,234 Coudenhove-Kalergi, Count R. N. (President, Pan-Buropa See War Conditions: Austria Union) - D - Defense Savings Bonds See Financing, Government - = - Economic Defense Board See War Conditions - 7 - Financing, Government Sproul and Rouse discuss rates with HMJr on the 2-3/8% and the 21% - 10/8/41 13,33 Conference; present: HMJr, Eccles, Draper, Piser, McKee, Goldenweiser, Jones, Murphy, Morris, and Hadley - 10/8/41 20 a) Federal Reserve and financial community close together in advice b) '67--'72: 2% is decision HMJr tells Eccles 39 c) '67--'72: 25% # # II II Jones 41 d) Haas suggestions on financing 42,43 e) Discount Corporation, Devine, etc,, suggestions. 44-47 f) Morris, Murphy, etc., suggestions 48-52 Regraded Unclassified - 1- (Continued) Book Page Financing, Government (Continued) Announcement of $1,200,000,000, or thereabouts, of 22% Treasury bonds of 1967-72 - 10/9/41 449 179 a) Establishing line of credit, purchase of bonds which are held only three or four days, discussed by Graham, First National Bank of Baltimore 195 b) Reaction discussed by Eccles, Rouse, and Sproul - 10/9/41 251,256,315 c) Allotment basis announced - 12% - 10/15/41: See Book 451, page 3 1) Discussion by HMJr, Kilby, Bell, Morris, Stewart, and Sproul: Book 451, page 4 d) Allotment figures - 10/22/41: Book 453, page 193 Defense Savings Bonds: Comparative statement of sales for first six business days, August, September, October - 10/8/41 101 Conference of staff with HMJr - 10/9/41 259 a) Status of state organizations 308 b) Treasury paper showing Minute Man - samples of 309,310 c) "Virginia banks go over top" 311 d) Picture of HMJr addressing Teamsters' Union, Detroit 314 - H - Houston, David See Revenue Revision - I - Inflation See War Conditions: Price Control - J - Japan See War Conditions - M - McAdoo, William Gibbs See Revenue Revision Regraded Unclassified - IN - Book Page Neutrality Act See War Conditions - P - Price Control See War Conditions - R - Revenue Revision Excess Profits Tax: Baruch-McAdoo-Houston statements on "taking the profit out of war" - 10/8/41 449 76 Manufacturers' Excise Taxes: Henderson asks that cost to consumer be not increased by more than amount of tax - 10/9/41 221 - T - Taxation See Revenue Revision Treasury Department See War Conditions: Economic Defense Board - V - War Conditions Austria: Government in exile to be discussed by Count R. N. Coudenhove-Kalergi and HMJr at request of HMSr - 10/8/41 147 a) Donovan asked by HMJr to see Coudenhove-Kalergi - 10/13/41: See Book 450, page 195 China: "British-American economic mission headed by Sir Otto Niemeyer and Merle Cochran" - announcement worries Currie - 10/8/41 153 Stabilization Board unfavorable reaction to Treasury's plan reported by Fox - - 10/8/41 155 Stabilization Board reports on applications which have been approved, rejected, etc. - 10/9/41 345,346 Economic Defense Board: Functions administered by Treasury - - White memorandum 10/8/41 88 Exchange market resume' - 10/8-9/41 151,343 - I - Book Page Neutrality Act See War Conditions - P - Price Control See War Conditions - R - Revenue Revision Excess Profits Tax: Baruch-McAdoo-Houston statements on "taking the profit out of war" - 10/8/41 449 76 Manufacturers' Excise Taxes: Henderson aske that cost to consumer be not increased by more than amount of tax - 10/9/41 221 - T - Taxation See Revenue Revision Treasury Department See War Conditions: Economic Defense Board - W - War Conditions Austria: Government in exile to be discussed by Count R. N. Coudenhove-Kalergi and HMJr at request of HMSr - 10/8/41 147 a) Donovan asked by HMJr to see Coudenhove-Kalergi - 10/13/41: See Book 450, page 195 China: "British-American economic mission headed by Sir Otto Niemeyer and Merle Cochran" - announcement worries Currie - 10/8/41 153 Stabilization Board unfavorable reaction to Treasury's plan reported by Fox - 10/8/41 155 Stabilization Board reports on applications which have been approved, rejected, etc. - 10/9/41 345,346 Economic Defense Board: Functions administered by Treasury - White memorandum - 10/8/41 88 Exchange market resume' - 10/8-9/41 151,343 Regraded Unclassified - V - (Continued) Book Page War Conditions (Continued) Foreign Funds Control: Educating banks discussed at 9:30 meeting - 10/9/41 449 188 (See also Book 450, page 22 - 10/10/41) Inflation: Price Control Committee: Minutes of meeting held October 2 - 10/8/41 104 a) Discussion of 1) Zinc situation 104 2) Waste paper 108 3) Anthracite coal price schedule revoked 112 4) Raw cane sugars - supplementary price schedules 113 5) Iron and steel scrap - amendments to bring parity among consumers, 115,133 6) Douglas fir "peeler" logs, etc,- price schedule amendment 116 7) Raw silk and silk waste - extension of price schedule 125 8) Paperboard - new price schedule. 128 9) Brass mill scrap - changes in price schedule 133 10) Rayon grey goods - amendment to price schedule 135 11) "Spot" raw cotton - price schedule 138 12) Wood alcohol - uniform price ceiling 143 13) Cotton grey goods - amendment to price schedule 146 Japan: Exchange of citizens discussed at 9:30 meeting - 10/9/41 186 Military Planning: Reports from London transmitted by Halifax - 10/8/41, 10/9/41 154,353 War Department bulletin: German assault artillery and 75-mm. tank weapon - 10/8/41 169 Neutrality Act: Revision: FDR's message to Congress - 10/9/41 339 Purchasing Mission: Federal Reserve Bank of New York statement showing dollar disbursements, week ending October 1, 1941 335 UUnclassified 1 October 8, 1941 8:25 a.m. HMJr: Hello. Harry Hopkins: Hello. HMJr: Good morning, Harry. H: Hello, Henry. HMJr: Have you had your breakfast? H: No, sir. HMJr: Well, I knew you were an early riser. H: I got up - woke up about six o'clock and went back to sleep. HMJr: Did they wake you just now? H: Oh, no. I've been awake. HMJr: I told them not to call you. H: Oh, no. My God, I'm awake. HMJr: Harry, I spoke to the President last night and told him most of what I'm going to tell you, because I'm kind of excited. I had the Russians at the house last night B quarter past nine. H: Yeah. HMJr: And I talked to this Charge like a Dutch uncle. H: Uh huh. HMJr: And I told him about the English and all that. And I said, "Now, let's put that to one side." And I said, "Now Mr. Hopkins tells me that he's got fifty million dollars worth of good, Regraded Unclassified 2 - 2 - up-to-the-minute stuff for you." H: Oh. HMJr: I sald, "I haven't seen it, I don't know; but his word's good with me." H: Uh huh. HMJr: And I said, "Never in the history of Russia for the next ten years, will fifty million dollars do you as much good as it will in the next three weeks." H: Yeah. HMJr: Now I said, "If you'll simply tell me, 'Mr. Morgenthau, some time during the next six months we'll deliver fifty million dollars worth of gold here, I'll give you a check in five minutes." H: Yeah. HMJr: See? H: Yeah. HMJr: And I just pounded it into him. H: Yeah. HMJr: And he kept saying, "Well," he said, "General Spaulding has only told us about eleven million dollars worth of goods, and we don't know anything about the fifty." H: Uh huh. HMJr: So I said, "Well, Mr. Hopkins says there's fifty and if he says there's fifty, that's good enough for me. Hello. H: Yeah. HMJr: So what I was thinking was this: evidently, Regraded Unclassified 3 - 3 - they may be holding back, thinking they're going to get it for nothing, not knowing that there is fifty million dollars worth of stuff there. H: Oh, I don't think that's true. HMJr: Well, do you think that they know that there's fifty million dollars? H: Well, I think they know that there's much more than that in this short time. I've tried to - how could he possibly say that. We've made a commitment to give him a hundred planes, and he said, "times a hundred and twenty thousand dollars apiece." That's twelve million right there. HMJr: Uh huh. H: And something over a hundred odd tanks at about thirty thousand apiece. That's just tanks and planes. HMJr: He mentioned tanks and planes coming up to eleven million dollars worth. I wasn't going to argue because I didn't know anything about it. H: Yeah. HMJr: But I think H: I don't think he's going to give you the money. Did he say he'd sent the cable? HMJr: He said he sent the cable ten days ago and he said he would send another urgent one last night. H: He hasn't followed it up, huh? HMJr: No. H: Yeah. Well - listen, we'll get the stuff if he'll get the money. Regraded Unclassified 3 - 3 - they may be holding back, thinking they're going to get it for nothing, not knowing that there is fifty million dollars worth of stuff there. H: oh, I don't think that's true. HMJr: Well, do you think that they know that there's fifty million dollars? H: Well, I think they know that there's much more than that in this short time. I've tried to - how could he possibly Bay that. We've made a commitment to give him a hundred planes, and he said, "times a hundred and twenty thousand dollars apiece." That's twelve million right there. HMJr: Uh huh. H: And something over a hundred odd tanks at about thirty thousand apiece. That's just tanks and planes. HMJr: He mentioned tanks and planes coming up to eleven million dollars worth. I wasn't going to argue because I didn't know anything about it. H: Yeah. HMJr: But I think H: I don't think he's going to give you the money. Did he say he'd sent the cable? HMJr: He said he sent the cable ten days ago and he said he would send another urgent one last night. H: He hasn't followed it up, huh? HMJr: No. H: Yeah. Well - listen, we'll get the stuff if he'll get the money. Regraded Unclassified 4 - 4 - HMJr: You mean you'll make good on your end if he produces the dollars. H: Oh, yes. HMJr: What? H: Yes. HMJr: You can? H: Why certainly. HMJr: Good. H: We're in a terrible fix here, Henry. HMJr: Well, I think that there's a good chance they'll come through with the fifty. H: You do? HMJr: Yeah. H: Grand. HMJr: Yeah. Well, the six months thing seemed to hit them right. H: Yeah. HMJr: After all, what the hell? If they do or don't. if they're still going six months I'll get it and if they're not H: That's right. HMJr: I'd kiss that and a lot more goodbye. H: Yeah. HMJr: Isn't that right? H: Absolutely. Absolutely. So this whole thing Regraded Unclassified 5 - 5 - 18 really - if we could - if what we could do - and especially, it isn't only what we can get over there, it's the conviction that Stalin gets that we mean business on the long pull, too. HMJr: Yeah. H: That's another thing, that we really are going to town and really going to help them. HMJr: Yeah. Well, Harry, I talked to that fellow last night like a Dutch uncle. H: Uh huh. HMJr: And I had him with the perspiration breaking out all over him. H: Uh huh. I'll bet you did. HMJr: And - 80 I think in a day or two he'll be letting us know. Then the rest will be up to you. H: That's right. HMJr: Okay? H: I'll go after it. Fine, Henry. I'm pleased the way this thing has gotten along. HMJr: What? H: I'm pleased. I think we'll get something out of this. Old Jess didn't say anything yester- day, but we might nick him for a little more some way some how. HMJr: You might. H: Yesh. HMJr: Well, I don't know how he arrives at the fifty million; but if I said he could do fifty, why can't he do a hundred? Regraded Unclassified - 6 - 6 H: Yeah, that's right. HMJr: What? H: That's right. HMJr: And - well, let's keep in touch. H: All right, Henry, old boy. I thought that was a very useful conference. I think if it did nothing it would get Hull acquainted with all the detail of it HMJr: Yes. H: which I'm sure he absorbed there yester- day. HMJr: The President seemed quite happy about it. H: I know it. HMJr: You see, I was all pepped up and I wanted to H: He's depressed about a number of things. HMJr: Is he? H: Yeah. A lot of things have gone wrong in the last day or two. HMJr: Well, I'm sorry. H: Gone to hell. HMJr: The Neutrality thing? H: Oh, yes. The Senate 18 wishy-washy and seem to lack all understanding of what the hell is going on in the world. HMJr: Uh huh. H: And one or two other things have gone bad. HMJr: Well, when I talked to him last night..... Regraded Unclassified 7 - 7 - H: He's feeling better now. HMJr: it was a little after ten, he was feeling very cheerful. H: I left him about nine. HMJr: Yeah. H: Yeah. Well, that's fine, Henry. HMJr: But, you keep pushing. H: All right, old boy. HMJr: Take care of yourself. H: I will, Henry. Good-bye. HMJr: Good-bye. Regraded Unclassified 8 TREASURY DEPARTMENT FOR RELEASE, MORNING NEWSPAPERS, Washington Wednesday, October 8, 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 15, 1941, and will mature January 14, 1942, when the face amount will be payable without interest. They will 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, Friday, October 10, 1941. Tenders will not be received at the Treasury Department, Washington. Each tender must be for en even multiple of $1,000, and the price offered must be expressed on the basis of 100, with not more than three decimals, e. :., 99.925. Fractions may not be used. It is urged that tenders be made on the printed forms and forwarded in the special envolopes which will be supplied by Federal Reserve Banks or Branches on application therefor. 27-90 Regraded Unclassified 9 - 2 - 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 in- corporated bank or trust company. 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 completed at the Federal Reserve Bank in cash or other immediately available funds on October 15, 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 Regraded Unclassified 10 - 3 - 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 dis- count 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, 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 other- wise 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 emount actually received either upon sale or redemption at maturity during the taxable year for which the return is made, as ordinary gain or loss, Regraded Unclassified 11 - 4 - 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 cir- cular may be obtained from any Federal Reserve Bank or Branch. -o0o- 12 October 8, 1941 9:50 a.m. HMJr: Hello. Allan Sproul: Good morning, Mr. Secretary. HMJr: Good morning. Allan, would be ready in a little while to tell me - oh, in about a half an hour I'll call you back S: Yeah. HMJr: if we do two and three eighths, where would you put it; and if we do two and B. half, where would you put it. S: Yes, I will be. HMJr: Will you - I'll be calling you back in about a half an hour. : All right, we'll be ready for you. HMJr: Will you do that? 8: Right. HMJr: Thank you. S: All right. Regraded Unclassified 13 October 8, 1941 10:30 a.m. HMJr: Hello. Operator: Sproul and Rouse. Allan Sproul: Hello. HMJr: Hello. Robert Rouse: Hello. HMJr: Have you got me a couple of rates? S: Yes. Mr. Rouse has developed a couple of rates on the two and three eighths. We figure it as a '61-'63. HMJr: Just B. moment, I'm writing it down. Just B. minute. Sixty - what did you say? S: Sixty-one - sixty-three. HMJr: Sixty-one - sixty-three. Yeah. S: And we figure that would probably sell on a - from a two-thirty to a two twenty-five basis. HMJr: Which points as what - a hundred and one? S: And that the premium would probably range from one and seven thirty-seconds- to two points. HMJr: Wait a minute. Would do from what? A hundred and one? S: From & hundred and one seven to a hundred and two. HMJr: I see. S: The price. HMJr: I Bee. Now, on the two and a half? Regraded Unclassified 14 2 S: On the two and a half we would put it sixty-six seventy-one. HMJr: Sixty-six. Sixty-six..... S: Seventy-one. HMJr: Yeah. And..... S: We figure that would sell somewhere between a two-forty and a two thirty-five basis, and the price would range on our estimate from a hundred and one twenty-eight to a hundred and two and twenty-six thirty-seconds. HMJr: A hundred and two what? S: A hundred and two and twenty-six thirty-seconds. HMJr: I Bee. Well, I asked Piser what..... S: Beginning with those two, Mr. Secretary. HMJr: What's that? S: You take in the first case, the two and three eighths might start out closer to the two and a quarter basis - around a hundred and one and a half or a hundred and one and five-eighths; whereas the two and a half might start out a little lower, on the lower range in price; that 1s, nearer the two forty basis than the two forty-five - the two thirty-five. HMJr: Well..... S: In other words, the two and a half should sell a little higher in price but not a great deal. HMJr: Well, let me ask you this - BO much for the pricing. Hello. 8: Yes. HMJr: Give me the market gossip now. S: The market gossip? Regraded Unclassified 15 - 3 - HMJr: Yeah. S: Well, in general, it 18 that they don't want it two and three eighths. They would like it two and a half. Mr. Rouse can give it to you in more detail than that. HMJr: All right, let's have it. R: Well, that's just the substance of it. It's reported to me that large investors are rather vehement about it. They dislike the two and three eighths very much. HMJr: They do? R: And HMJr: What do you call - identify large investors. R: Well, the insurance companies, the large banks that buy them - like the issue got from Mr. Knight, which was a large bank who could buy anything, and he definitely didn't like the two and three eighths. HMJr: Yeah. R: And we went to the station together last night after we left your office, and he seemed to feel fairly strongly about it. We get the same thing from the dealers here. They - all the reports - that list that we gave you yester- day afternoon indicated - were strongly opposed to two and three eighths coupon - thought it was shaving a rate and chiseling and it wouldn't make a good start; and the thing to do was to give the market really what it wanted. HMJr: Anybody want the two and three eighthe? R: Haven't found anyone yet except yourself. HMJr: I'm lonesome, huh? R: (Laughs) Yeah. Regraded Unclassified 16 - 4 - HMJr: All alone. Well, let me put it to you - 80 much for you fellows and the rest down there. Supposing I decided I wanted to do it two and three eighths. Would it go? R: Yes, I think it would go; but it would go reluctantly. It wouldn't go with any punch and I think you ought to have punch in this issue. HMJr: Which issue do you people think would stand up the best under adversity? R: Under what? HMJr: Under a. bad time. R: I think the two and a half would stand up best under bad times. It would appeal more to the people who hold without BO much regard for day-to-day or week-to-week developments. HMJr: Of course, if it goes up to a hundred and three, that's kind of rich, ain't it? R: Yes it 18, but I think that would be a temporary situation, and I think it would be a cushion worth having at this time. HMJr: You think the two and & half would get off to a slower start as far as price goes? R: Yes, we do. But it would do better, I think, over a period. HMJr: Anybody favor what Devine wants to offer it - at a hundred and one? S: Well, we had thought about that and we don't think that that would be 80 good. HMJr: You don't think 80? Allan, how worried would you be if I did a two and three eighthe? S: Well, I would be pretty worried - not from the standpoint of this issue's going, but from the Regraded Unclassified 17 - 5 - standpoint of your whole program and getting it off on the right foot here at a point where it seems to me it's taking on volume and velocity and it's going to have to move along with real pace now. HMJr: Why, nobody's talking about the high price of bonds. Nobody worries about that? S: Well, I'm not. HMJr: You're not? Well, this two and a half issue will put up the prices still higher. S: I don't think it will. I think you'll have a very substantial issue here and more coming out; and my idea is that if it goes up that high, it will shade off again and that you'll probably have rates stabilized here or even going up a little over a period of months. HMJr: But what I can't get 1s what's 80 sacred about two and a half. 8: Well, it's the figure at which the investors - on which they have fashioned as the one at which they can make a living and really do business; and they've come down from three to two and a half and you might say they could go down still further; but I think they're getting close to realities now and the two and a half 18 the rate that 18 about rock bottom for them to do business on. HMJr: Let me ask you something else. Now we had in McKnight from Detroit, and he's talking about his McLucas. S: What? HMJr: McLucas. S: Yeah. HMJr: About his deposits falling off and that that's true out in Kansas City. How are deposits in Regraded Unclassified 18 - 6 - your area? S: Well, deposits here have been going up, but we have a very large volume of inter- bank deposits here in New York City, which may be drawn down when this increase in reserve requirements goes into effect, and that will in turn affect the money market situation here. HMJr: Are you S: And the rise in our deposits has been flattening out recently. There is that to be said about our deposits. Since the last three months, they've been flattening out. HMJr: Any of your members worried about reserve requirements between now and the first of the month? S: No, I don't think they are. HMJr: Anybody say they're going to be under water? S: No, I don't think BO. HMJr: Well, Mr. Knight, of Chicago, thinks they're going to be under water. S: Well, I think he has an idea, but he exaggerates the figures with respect to his idea. I think his idea that we haven't seen the full effects of that yet 1s all right; but I think his figures take the most gloomy possible view and beyond what I think is likely or possible. HMJr: Well, I'm meeting with the boys at eleven. As soon 8.6 it's over, I'll give you a ring. 8: Fine. HMJr: I've never seen you quite BO determined as you are on this two and 8 half, huh? S: That's right. Regraded Unclassified 19 - 7 - HMJr: Well, I hate to have to be popular. S: (Laughs) Why you've been getting more and more popular the last few weeks. With these speeches you've been making, you ought to be used to it. HMJr: Well, I did read..... S: What? HMJr: I read a few hundred editorials on the six per cent statement. S: (Laughs) R: (Laughs) S: Well, I wasn't counting that one. That wasn't a speech. HMJr: I see. I see. Well, you stand by and some time between now and twelve or sooner you'll hear from me. S: All right, fine. HMJr: Thank you. S: Good-bye. Regraded Unclassified 20 October 8, 1941 11 a.m. RE FINANCING Present: Mr. Eccles Mr. Draper Mr. Piser Mr. McKee Mr. Goldenweiser Mr. Jones Mr. Murphy Mr. Morris Mr. Hadley H.M.Jr: Well, have you fellows got your pencils down to a fine point? Eccles: No, we have left that up to you. H.M.Jr: I can report this. 1 never saw the financial community and the Federal Reserve System so close together. They all want 8. two and a half long. They even get a little mean about it, some of the fellows. Eccles: I am glad to hear that. McKee: There is good reason to be suspicious when you get - find yourself in that position. (Discussion off the record). H.M.Jr: Where were we? Eccles: We were waiting to find out where the Treasury is. We know where the Federal and the financial community is. Now we are trying to find out where the Treasury is. Regraded Unclassified 21 - 2 - H.M.Jr: Jesse has run out on me. Jones: I am two and three-eights. McKee: That is three quarters you are sticking up, there. H.M.Jr: Wait a minute. Jones: I am still two and three-eighths, in spite of my respect for the opinion of the Fed- eral Reserve and all my bankers who want two and a half. Eccles: I think you are just horse trading here. Jones: No, I am not. McKee: Mr. Secretary, you are financing at pretty near the top of the market, aren't you? How far are you from the top, a couple of thirty-seconds? Hadley: Not very far. About a quarter of a point from the all-time high. McKee: I think that is something you have got to keep in mind. I think you have got to keep in mind also an adjustment of reserves that may temper your subscriptions to some extent by the banks, between now and the first of November. How much that will discount your subscriptions, I don't know. H.M.Jr: Well now, from that I don't - I don't get what - from there you go where? McKee: Well, I think under the circumstances you have got to think of whether you can take the market advantage of the price of money at this time, with these things ahead of you. Regraded Unclassified 22 - 3 - H.M.Jr: I still don't get you. What would you have me do? McKee: Well, your three eighths rate is taking advantage of the top of the market. Now, is that what you want to do with the things ahead of you that may put your bond below par? H.M.Jr: Well, why am I not doing exactly the same thing on a two and & half 25 - 30 year bond? McKee: Well, I don't think so. I think there is a lot of psychology in the rate of the bond that is awfully hard to appraise. H.M.Jr: You don't think I am taking advantage on that? Draper: I don't think you are, Mr. Secretary. McKee: No, I don't think you are. Draper: Psychologically. It may be -- McKee: Because as I said yesterday, I think you have put out patterns of rates in your series of bonds, and I think a pattern rate of two and B. half on a long term market issue falls very well in line with what you have done in the past, and which you can have as open issues for the future. Eccles: A two and a half rate is needed, and I think that we have got a little bit more to consider when you get down to this lower rate structure than whether it is an eighth or costs the Government a little more. I think you do have a question of a - what does it take to - after all, a minimum to support 8. credit system, and we want a rate that Regraded Unclassified 23 - 4 - appears to be a fair rate in the investment market, because you want to get the support and the confidence of a market and the feeling that they have been treated fairly. You want to encourage - be able to talk about saving instead of spending. This particular issue, we want it to go, 80 far as it is possible, to put it in the hands of the investors that are primarily interested in the rate, much more so than in the maturity, and I think that when you get to twenty years or more, whether it is twenty, or twenty- five, or thirty, it doesn't have the same effect as the maturity does on a shorter issue. You haven't issued any long securities under a two and 8. half rate, and unless we want to establish & rate less than two and a half for a long term financing, which I think would be rather a dangerous thing to undertake, that we shouldn't at this time establish & rate below the two and a half, because it seems to me that that is going to tend to put & ceiling. on the rate. Otherwise, the bonds may drop below par if a higher rate is later given for 8. long term issue. H.M.Jr: Well Marriner, I think the insurance companies would buy the two and three-eights just - not quite as readily, but they will buy them. Eccles: A lot of other investors, too. I think they would because of necessity. H.M.Jr: The thing that bothers me is - I didn't mean to interrupt you. I never in my life have seen such complete opinion that everybody wants a two and a half, and it is just a question of whether I want to fly in the face of that at this time, that is all. I mean, just what is good sense, because I have got to go back to these fellows again and again- Regraded Unclassified 24 - 5 - I can do a two and three-eights, but just -- Focles: I think you can temporarily, but -- H.M.Jrz And just where I want to - you know, I have never seen the fellows 80 determined that this is what they want. Eccles: There is & lot of good argument for it. Jones: May I make a statement? H.M.Jr: I wish you would. That is what you are here for. Jones: This is not a statement by an expert on monetary affairs, or finance, or anything like that, but we go along and hunch the rates up. We are just keeping step with the farm people, the labor people, and industry. Everybody wants to get a little of it while it is going. I think it is a mistake. It is all right, it is not a big mistake. The difference between two and three-eighths and two and a half isn't much. But we just keep in step with everybody else. H.M.Jr: If we do what, Jesse? Jones: If you raise the price, if you get your rates up. Eccles: You just keep it where it is, Jesse. The rates have never been below that. McKee: The last bond he put out was two and a half. Jones: You are raising the current rates. Regraded Unclassified 25 - 6 - H.M.Jr: No, lowering them. Eccles: No, this financing would be an all-time low. Jones: As I understand, you have got a bond selling at two thirteen, something like. What is that, fifteen years? Hadley: Fifteen year bond. Jones: I think it is better for the country -- H.M.Jr: We would be lowering them, Jesse. Jones: I thought if you would go about eighteen or nineteen years, and hunch it up to two and three-eighths, which is a quarter above the current market. That is what it amounts to. H.M.Jr: You are sticking to the two and three- eighths? Jones: Yes. McKee: Wishing for a shorter maturity. Jones: And justifying it with a little shorter term. I don't think it makes any difference whe- ther we make the bond eighteen years or twenty-five years. That is the only question in my mind. Regraded Unclassified 26 - 7 - H.M.Jr: Well, as far as going along, we are not. I mean, if we stay at the two and a half, we are not doing what the farmers or the other fellows are doing, we are holding the rate where it is. But if we do two and three eighths, we are going in theopposite direction of prices generally. Jones: I got the impression that we were going above the market when we-- M.M.Jr: No. What they are accusing me of if I do a two and three eighths, they say I am driving too hard a bargain because I am forcing the thing down further. They think at this time we ought to level off. That is their objec- tion, Jesse. Eccles: If we had a deflationary situation, I agree with you. 11,M.Jr: I just wonder if Jesse still thinks the same. On the two and a half we are leveling off. The last issue was two and a half, but this time we will be going out fifteen years further. Now, to do two and three eighths would be driving the rates down 8. little bit, and that is what everybody is kicking about. Marriner says he doesn't think people can live on less then two and a half. That is his argument. Now, I would like to hear yours, Jones: My idea, if I were doing it, I think I would take B. - hunch the time up somewhere between fifteen and twenty years and take a two and three eighths rate. It might have a little salutary effect. I don't know whether it would or not. The thing that I am living with every day prompts this thought. I haven't found anybody in industry and finance who wasn't ready to get his part while it is going Regraded Unclassified 27 - 8 - just the same as labor and the farmer. That is the point that distresses me. We complain of the - of the labor fellows, we complain of the farmers, and we step right in and do the same thing. Eccles: But, Jesse, do you expect the investor to be willing to put his money into a security - that is what we want him to do, rather than spend it, see, at a longer term and a lower yield when the money that he gets in interest from that bond will buy less and less? In other words, a two and three eighths - two and three eighths dollars per hundred will buy less today than two and three eighths dollars per hundred would have six months ago. So that what you have got to do, you can't expect to get lower rates on capital when prices are going up and expect at the same time to induce the investor to put his money in a long-term commitment. You may do it today and get this over with, but it is my opinion that if you do a bond of this sort is likely to cause you trouble later because you will have to go back and pay them two and a half, and when you do this issue may cause trouble and I - that is what I am thinking of. I don't - not that you can't put this issue out today, but I think within a six months' period maybe or a year you may well find that if you try to get this rate on the long issue below two and a half, it is below what every- body thinksis fair, and I just think it would be making a psychological mistake. Jones: My thought to justify the rate was to make it just a little bit shorter time, to justify the rate. H.M.Jr: Well, they have pretty well agreed that if we did a two and three eighths, I think it would Regraded Unclassified 28 - 9 - be somewhere between - our boys say seventeen to twenty-two years. Piser says '60-'65. New York says '61-'63. I mean, there is that much - well, that could be reconciled. Is the Board altogether on this? Eccles: A hundred percent. We have been for two or three weeks. As a matter of fact, the full meeting of the Open Market Committee was here Saturday and all of the bank presidents were here. We at that time discussed the whole general problem of monetary and finan- cial policy; and, although there has been no statement as to just how much you might need, yet it was generally recognized there would be some financing very shortly and it was pretty unanimously agreed on this general view that to go below two and a half on a long issue would be somewhat of a mistake. Draper: I don't see, Mr. Secretary, how you could pos- sibly justify 8. lower rate in an inflationary period. For the Government to take that attitude in the time of inflationary danger, it seems to me, would be very hazardous to do. Eccles: How about you, Dr. Goldenweiser? You haven't said anything on this. Goldenweiser: I feel very strongly, Mr. Secretary. Usually I have no strong opinions on the precise rate because I feel that those things are market problems, but in this case I feel this way, that in either case you are meeting the market. It is a question of maturity. I mean, you are not going to go out and do some- thing. You are not going to pay the people any more than the market price in either case. In one case you are going to pay them the market price on the shorter maturity and in another case you are going to pay them the market price on the long maturity so that it isn't Regraded Unclassified 29 - 10 - a question, Mr. Jones, of taking advantage of the situation. It is a question of meeting the market situation in either case. Now, the reason I feel very strongly that the two and a half percent bond would be a better bond is because it fits into your - into a pattern of savings situation that you have established. You have got your savings bonds on that rate. That is the investment rate today, and you want to appeal to investors. You don't want to appeal particularly to the money market, which is the banks, and I think that it does - the people don't know the details of the maturities except a few people. They are mostly the ones that you have talked to because they are market-wise people, but the people over the country don't know those details and don't know the exact yields, but they do know that the rate on savings bonds is two and a half. We have been accustomed now to think that if we want to save and give the money to the Government for safe keeping, it is 8 two and a half rate. This will be very definitely a depar- ture from it, and I think it would be, in my opinion, rather a grave psychological mis- take. Jones: You think the two and a half rate is the right rate? Goldenweiser: That is the way I feel, Mr. Secretary. H.M.Jr: Well, I think what I will do, I will take a walk around the park by myself-- McKee: I have got a hat out here, let's have some paper. H.M.Jr: No. I will give you all a ring between now and noon. I appreciate your trouble. Regraded Unclassified 30 - 11 - Jones: It is the business of these gentlemen to study these matters and it is not mine particularly. I have a good deal of respect for the Doctor. That is his life, is study- ing these matters. That doesn't mean I haven't got any respect for these other gentlemen, Marriner particularly. (Laughter) Eccles: John, you and I. Regraded Unclassified 31 October 8, 1941 12:00 M. RE FINANCING Present: Mr. Morris Mr. Haas Mr. Murphy Mr. Hadley Mrs. Klotz Mr. Bell Haas: I have got another idea. H.M.Jr: Too late. What is your idea? Haas: You are never sure of anything these days. If you take the three eighths and go wrong, you haven't got a friend in the world except Dave and myself, and we don't go wrong. Bell: Jesse. H.M.Jr: Jesse has changed three times. Haas: Yes, he changed. If you should go wrong with the two and a half - I think it looks pretty good either way, as far as going. You have got 8. lot of friends. But if anything happens to the two and three eighths you haven't got any. H.M.Jr: What is the answer? Haas: If I were the Secretary of the Treasury, I think I would do the two and a half, in view of this. H.M.Jr: What is the new idea? Haas: Well, I was two and three eights. H.M.Jr: Oh. Well, does anybody else want to get on board? Regraded Unclassified 32 - 2 - Bell: That is the way I feel about it. Hadley: I have heard that there are a lot of bank orders already for two and a half and they might be cancelled if it was two and three eighths. They have already got them on the books. H.M.Jr: Anybody want to get on board? Murphy: I have been sitting there. Morris: I said two and a half before I came in here. Bell: I haven't changed any. (The Secretary held a telephone conversation with Mr. Sproul and Mr. Rouse, as follows): Regraded Unclassified 33 October 8, 1941 12:05 p.m. HMJr: Hello. Robert Rouse: Hello. Allan Sproul: Hello. HMJr: How do you - I hear you fellows are switching. S: Well, that's misinformation. HMJr: You're on the loudspeaker and they're laughing here. S: (Laughs) R: (Laughs) HMJr: I hear you're slipping towards two and a quarter. S: Someone has been taking our name in vain. HMJr: Well, I took a walk around the circle, and the stars say two and a half. S: Good for you. HMJr: No, it's the stars. S: What? HMJr: It's the stars. Stars. S: (Laughs) HMJr: Two and a half. S: Well, that sounds fine to me. HMJr: Now, the only other thing 18, our boys here would like to make it sixty-six seventy - 34 - 2 - wait a minute, no - thirty-one thirty-six. B: Yes. HMJr: I'm all mixed up. I'm looking at too many things here. Sixty-seven seventy-two. S: That's all right. HMJr: Is that all right? S: That's all right, yeah. HMJr: That won't change it any? S: No, I don't think that will change it much and it may make it look just a little better on price, although I don't think it'll have much effect. HMJr: Well, I'm going to do the thing. I want to go out the window if twenty-seven seventy-two doesn't look - got any doubts about that? S: No, I haven't. I think sixty-seven seventy-two 18 all right, and I have no doubts of it as compared with sixty-six seventy-one. HMJr: The other thing - the twenty-five thirty, I'm afraid it's over a hundred and three. S: Well, it might; although I don't think so. When you get out in that area, it's pretty difficult to tell just where the price 18 going to fall; and as I say, I think the sixty-seven seventy-two 16 all right. HMJr: How about Rouse? R: I agree whole-heartedly. HMJr: On sixty-seven seventy-two? R: Yes, sir. HMJr: Well, now just wait a minute. Maybe I've got somebody here that doesn't agree. R: (Laughs) Regraded Unclassified 35 - 3 - (Following conversation takes place at 12:00 meeting on Financing.) Bell: It 18 all right. Hadley: It is 'all right. The rates are two and a quarter to two and a half points. HMJr: You can't go by those. Hadley: It's an indicator, though. It is over two and a quarter points. Murphy: Okay. Haas: I think it is all right. We had attempted to price it liberally. Bell: It is liberal. HMJr: You mean sixty-seven seventy-two is liberal? Haas: I think it 1s. HMJr: Are you sure now, George? Haas: Yes, I will ride on that. HMJr: You ought to come out with something new. Haas: It is new to me. HMJr: On the sixty-seven seventy-two you are all right? Haas: Yes. Morris: I think it is liberal. I would like to do the seventy-one seventy-six if they want a Savings Bond at two and a half. I would rather go seventy-one seventy-six, the way they are all feeling, and give them a Savings Bond. Bell: Oh, you're feeling too good now. It is all right. It is liberal. It is going over two points. Regraded Unclassified 36 - 4 - HMJr: All right. Hello. S: Yeah. HMJr: My boys say that's liberal - sixty-seven seventy-two. 8: Well, I think you're around an area where rate is more important than a year or two on the maturity 80 they may be right, but I wouldn't begin to take thebloom off of it by saving any more, I don't believe. HMJr: No, oh no. But is sixty-seven seventy-two - 1s there any bloom off on that? S: No, I think that's all right. I don't think..... HMJr: Well by golly, this thing's got to go well because you fellows and the financing community are getting what they asked for. 9: They certainly are; and if it doesn't go well, why we're out the window together. HMJr: I'll say you are. S: (Laughs) R: (Laughs) HMJr: And Dan says you can take the Board with you. 8: Well, I don't know whether we want to do that. HMJr: You want your own parachute, huh? 8: (Laughs.) HMJr: Well, all right. Well, thanks anyway. It's been quite a mental struggle, but I'll go along and I'm doing it cheerfully. S: Well, I think you're coming out the right place. Regraded Unclassified 37 - 5 - HMJr: I hope 80. Well, cheerio. S: Thank you. R: All right. S: Good-bye. Regraded Unclassified 38 - 3 - Bell: Do you want to put any of that - do anything for the small fellow on this one? H.M.Jr: No, he has got the bank. I mean, he has got all of our savings bonds. The small fellow is out the window too. No, he has got the - we have got all the Defense Savings Bonds for him. When do you want me to sign? Bell: I will try and be ready before lunch. H.M.Jr: Well, I. postponed my lunch until 1:15. Morris, what I would like you to do, two things. I would like Bell to let you see what he does from now on and stay right with you, see? I think it would be very good if you went up to New York and sat at the trading desk for the next two days, just sit up there. Morris: At the Federal? H.M.Jr: At the Federal. Get that and be back here Monday. But I think you (Bell) might tell them he will be up there tomorrow. Bell: O.K. H.M.Jr: Let him sit right at the trading desk for two days to get that experience. You never had that? Morris: No, sir. H.M.Jr: I think you ought to have it. I would like you to sit with Bell the next hour and a quarter and find out how he has already written a circular. Have you got it written? Bell: Oh, we had it all but the rate and the date. (The Secretary held a telephone conversation with Mr. Eccles, as follows): Regraded Unclassified 39 October 8, 1941 12:09 p.m. HMJr: Hello. Operator: Mr. Eccles. HMJr: Hello. Marriner Eccles: Hello. HMJr: Marriner E: Yes, Henry. HMJr: after the walk I decided two and a half. Sixty-seven seventy-two. E: Sixty what? HMJr: Sixty-seven seventy-two. E: Well, I want to congratulate you. I'm delighted. HMJr: Yeah. E: I don't often feel 80 strongly about a thing, but I think this is a crucial period and it 18 awfully important not to make a mistake. HMJr: I don't want to make any mistakes. E: I know you don't, and I feel that you've got the unanimous - as far as I know, you've got the unanimous support, I know, of all the Board's staff and the Board and all the Federal Reserve Banks. And if you've made a mistake, by gosh, we're - every darn one - with you. HMJr: That's right. E: So you have got that, one hundred per cent. The other program - nobody felt happy about it. HMJr: Okay, Marriner. E: All right, thanks. HMJr: Thank you. Regraded Unclassified 40 - 4 H.M.Jr: I am weakening. There is something phoney about this. I think somebody has been preparing the market for two weeks. The Fed let it slip. They said they had been working on this for two weeks. Bell: Sure, they admitted that they had this in view for two weeks. H.M.Jr: They let it slip. They have been working on this for two or three weeks. It would make a monkey out of them. It would increase the excess reserves and lower the rate. It would be terrible. Bell: I don't quite look at it that way. Lowering of the rate of two and three-eighths, to me, wouldn't be lowering the rate. H.M.Jr: I don't want to, at this time, have the financial community think I am taking advantage of them. Bell: No, I don't think you could afford to have them. H.M.Jr: They might think I am at two and three eights. This itch in the right palm means money, doesn't it? Klotz: Shaking hands. H.M.Jr: Well, on your way, boys, get busy. Regraded Unclassified 41 October 8, 1941 12:07 p.m. HMJr: Hello. Operator: Secretary Jones. HMJr: Jesse Jesse Jones: Yes, Henry. HMJr: I decided on a two and a half, sixty-seven seventy-two. J: That's twenty-five..... HMJr: Twenty-six, thirty-one. J: Twenty-six, thirty-one. HMJr: Yes. J: Well, that'll please them all; and it can't be much of a mistake, if it 1s - I don't think it 1s. HMJr: Well, at least it ought to - it's going to please them, anyway. J: It's going to please everybody that's been giving you advice, isn't it? HMJr: That's right. J: That's good. HMJr: That's right. J: Thanks. HMJr: Thank you. Regraded Unclassified instruct by Dr Haa 10-8-41 42 Suggestion with Respect to the Financing It is suggested that offering a 2-1/2 percent bond at a premium would have certain advantages over offering either a 2-1/2 percent or B. 2-3/8 percent bond At par: (1) A 2-1/2 percent bond offered at 101 would have a maturity approximately 5 years less than such & bond if offered at par. This would go & long way toward meeting your point that a 2-1/2 per- cent coupon would break too much new ground in maturity. A 2-1/2 percent bond at par, at 101, and at 101-1/2 respectively would fall about as follows: : Premium : : Gross Net : : At par: 1967-72 2-4/32 2-4/32 At 101: 1962-67 3-5/32 2-5/32 At 101-1/2: 1959-64 3-17/32 2-1/32 (2) It would give the market the 2-1/2 percent coupon that it seems to be clamoring for. (3) In the event of a eubsequent period of market weakness an issue 80 offered would have a cushion equal to the premium. A decline below the offer- ing price would not have as bad a psychological effect as & decline below par. It is emphasized that this suggestion 1s based upon the supposition that the reluctance of the market to pay a premium 1s less than its reluctance to accept a 2-3/8 per- cent coupon. This supposition would have to be thoroughly checked with the market, therefore, if the suggestion is to be given consideration. Regraded Unclassified hubmetted by Ar Hear, 10-8-41 43 Estimated Yield Bases and Probable Premiums of New Issues of Treasury Securities (Based on Closing Bid Prices October 7, 1941) : : Estimated : : Probable premiums Maturity : Coupon : yield : basis : : Gross : --- : Net : (Percent) September 15, 1953-58 12 - 17 years 2-1/4 2.07 1-29/32 1-29/32 September 15, 1958-63 17 - 22 years 2-3/8 2.24 1-29/32 1-29/32 September 15, 1959-64 18 - 23 years 2-1/2 2.26 3-17/32 2- 1/32 (Offered at 101-1/2) September 15, 1962-67 21 - 26 years 2-1/2 2.31 3- 5/32 2- 5/32 (Offered at 101) September 15, 1967-72 26 - 31 years 2-1/2 2.39 2- 4/32 2- 4/32 (Offered at Par) Regraded Unclassified 44 Oct 7, want Band beyind 60-65 Discount Corh in #850 farm michael cach 2½ 70-75 A 101%-22 #400 50-522% 23/8 -58-60-101.24 und not popular will be sticky but he says me can dont one issue 65-70 2 12 10-8-41 Regraded Unclassified 45 Denne 68-71 - 2½ = 103 sell it at 101 fremium. 4750- 51-53n54 2% If 23/8 62-65 61-64 Infefeld Shrings BK 1/d n 24-57-59 = 47 Mr. Knight Contributal Regraded Unclassified 10-8-41 48 23/8 D.Hang 1961-66 Regraded Unclassified 49 21/2 -1967-72 H.C. mush Regraded Unclassified sent 15 2 3/8958-63 ICHOES 51 23/8-61961-63 2 3/8-s ip 1961-63 mAtadley 6) 611/ 26-31 Regraded Unclassified 52 2½% 69-71 DuB Regraded Unclassified 53 TREASURY DEPARTMENT INTER-OFFICE COMMUNICATION DATE October 8, 1941 TO Secretary Morgenthau FROM W. H. Hadley Through Rouse 61-63 Mr. Piser estimates that a 2-3/8% would be about September 1960-65 with a conservative price of 101-1/4, possibly running to 101-3/4. 1017-102 66-71 On a 2-1/2% issue, he says a September 1966-71 possibly would sell at 101-1/2 but nearer to 103-3/8. 101.28 102.26 I Regraded Unclassified 54 October 8, 1941. Dear Bandolph: Thank you for your very pleasant letter of October 4th. I as delighted to know that you liked the address, and that you felt the steesphere of the meeting was a sympathetic one. I also vas deeply interested in reading the confidential report of the resolutions committee which, as you say, coincided very closely with the thoughts that I presented in the Chicago address. Thank you also for your word about the airplane misadventure last Friday. It was an exciting experience and one that I would just as soon not repeat. With cordial regards, Sincerely, (Signed) Henry Dr. V. Randelph Burgess, Vice Chairman of the Board, The National City Bank of Nev York, 55 Wall Street, New York, New York. GEF/dbs I've to n.m Channey Regraded Unclassified 55 The National City Bank of New York ESTABLISHED 1818 New York October 4, 1941. OFFICE OF THE VICE CHAIRMAN or THE BOARD Dear Henry: You might like to have a full copy of the report of the resolutions committee which was read after your hiress on Thursday morning. It seems to me to fit your address like & glove. Let me say egain how pleased I WBS with your address end with the whole occesion, which I think brought the Treasury and the bankers closer together at this critical time when 8 sympsthetic understanding is BO essential. Sincerely yours, Randogh Hon. Henry Morgenthou, Jr., Secretary of the Treasury, Washington, D. C. ARB.H believe agood deal alarmed ax the place adventure. Can't afford to have you laid up Regraded Unclassified 56 10-1-41 Final Draft CONFIDENTIAL REPORT OF RESOLUTIONS COMMITTEE The situation of this country probably is more oriti- cal than most people realize. Our defense 18 less advanced than headlines of huge spending lead us to think. The shift of the Nazi legions toward the East and the stubborn Russian resistance have fostered a false sense of security. Increased employment, high wages, and huge production of goods for our satisfaction lull us almost irresistibly into an equally false sense of national well-being. The United States today faces two major taske. The first is to speed up the defense effort, to turn out ships and planes and tanks and guns more rapidly. This means concentrating more on defense and less on luxuries and comforts. The second task 18 to avoid unbalancing our economic machinery by this vast defense activity and spending. The Treasury warns that inflation threatens now. Inflation means later depression. These dangers can be avoided, but only by persistent, intelligent, and united effort. To both of these tasks the bankers of the United States pledge their full support. Regraded Unclassified 57 -2- BANK LENDING POLICIES Bankers are aiding the Defense Program by loans for the erection of defense plants, and for the purchase of raw materials and the payment of wages in the defense industries. Such loans have reached huge sums and continue to mount. This Association recognizes the important assistance that may be rendered by sound credit in stimulating the increased production of "Food and Feed for Defense". Bankers will work with the farmers of this country to attain the higher production required. We reaffirm the position that in agricultural credit, 8.8 in other fields, government lending agencies should supplement and not supplant the banks. Banks are observing both the letter and the spirit of the new regulations for controlling instalment credit. This is a time for liberal lending for defense and for conservative lending for all other purposes. This 16 a time when in their own interest, people generally should be paying their debts instead of borrowing more. This particularly 18 a time for bankers to keep their own houses in order and to avoid credit expansion for excessive inventory accumulation or for other speculative purposes. This objective can be attained best through our voluntary cooperation rather than by government regulation. Regraded Unclassified 58 -3- SMALL BUSINESS & DEFENSE No man knows better the problem of the small business man then does his banker. Small business has a vital role in defense. Bankers have aided and will continue to aid in speed- ing expansion of the defense program through subcontracts to small business and the "bits and pieces" plan. Regraded Unclassified 59 -4- DEFENSE SAVINGS BONDS Bankers endorse the effort of the government to borrow directly from its citizens through the sale of lefense savings bonds, stamps, and tax anticipation notes. This is a sound step in resisting inflationary credit expansion. Banks are cooperating vigorously in the sale of these obligations as a public service and without profit. In their own self interest we urge all citizens to buy all three issues. Regraded Unclassified 60 -5- TAXATION Members of this Association commend the policy of the Federal Government in seeking to meet a large proportion of the cost of the defense effort through taxation. This 18 sound public policy. It 18 necessary, however, that in determining types and methods of taxation the burden should be distributed equitably over the whole population. Unless those who receive increased wages and profits from defense pay proportionate taxes, their spending will be inflationary. Unless all of the people share knowingly in paying Federal taxes, spending will become politically unoontrollable. Representation without taxation may be as vicious as taxation without representation. Equally is it necessary that the power of taxation must not be used to destroy enterprise, which is the only source both of taxes and of the unparalleled standard of living of this country. While & heavy burden of taxes may be necessary, each tax must be scrutinized to make sure that it does not destroy either enterprise itself or the incentive for enterprise. Regraded Unclassified 61 -6- PRICE CONTROL A policy of controlling inflation must include direct control not only over prices, but also over the cost elements which are the cause of prices. Such controls must be equit- able. No pressure groups should be allowed to obtain unfair advantage over other citizens in a less favorable position to exert political pressure. We believe all of our people are prepared to cooperate in proposals which are fair and just to all, but we believe that complete cooperation 18 dependent upon the fairness and justice of the program adopted. There must be no exception; there must be equality of sacrifice. Regraded Unclassified 62 -7- NON-DEFENSE SPENDING This Association heartily approves the creation by the Congress of a Joint Committee to investigate Federal expenditures and to recommend the reduction of non-essential spending at this time of emergency. When men in the service, taxpayers, businessmen, and others are being asked for sacri- fices, the agencies of Government themselves must demonsrate their willingness to sacrifice non-essential activities for the Defense Program. Regraded Unclassified 63 -8- GUIDING PRINCIPLES These times call for the old-fashioned virtues of working and saving. The bankers here assembled pledge them- selves, each in his own community, to work toward these ends. We are everlastingly grateful for the privilego of living in a democracy which Holds fast to the principles of liberty and justice for all. We have unbounded faith in the resources and capacity of this country for meeting to the fullest its obligations in this trying hour. We have endur- ing confidence in the ability of the American people to pre- serve at any cost the rights and privileges which they enjoy in this free Republic. We pledge our full support to effective policies and programs of our government to defend and preserve democracy and democratic institutions. Regraded Unclassified 64 -2- APPRECIATION AND ACKNOWLEDGMENTS The American Bankers Association wholeheartedly appreciates the loyal and faithful service of its retiring President, P. D. Houston. Always mindful of the responsibility of the office he has performed his duties with courage, justice, and deliberation. His accomplishments as our President long will be remembered. To B. Murray Peyton who retires as Treasurer, we acknowl- edge a debt of gratitude for his assiduous attention to duties as well as his wise counsel. The Association congratulates and reaffirms its confi- dence in the members of the staff who during the last year have discharged their duties successfully and loyally. Many individual bankers and committeemen during the year have given of their time and effort to the activities of the Association, and to them we express our gratitude. To those speakers who have addressed the convention and the special meetings during this session we give our thanks and appreciation for the messages they have given. To the Chicago banks, members of the American Bankers Association who have been hosts to the delegates and gueste at this Convention, we express our appreciation for their untiring efforts in making this visit to their city a most pleasant and enjoyable one. To the hotels, the press, and the citizens of the city of Chicago we also express our thanks for their cordiality and friendliness in making this convention a success. Regraded Unclassified 65 October 8, 1941 Dear Mr. Edwards: Thank you for your letter of October 4th, and for the clipping from the American Banker. I was interested to see how the editor of this magazine handled the general reaction to my appearance there. In this connection, I want also to thank you for your part in arranging ay trip. I very such enjoyed it and feal that it was well worthwhile to have appeared before this association. I have been glad to hear a mumber of favorable reactions to what I said there. With cordial personal regards, Sincerely, (Signed) H. Morgenthau, Jr. Mr. B. 1. Edwards, Assistant to the Secretary of the Treasury, 711 - 12th Street, N. No, Washington, D. C. GiF tro Regraded Unclassified 66 TREASURY DEPARTMENT WASHINGTON Columbia, S. C. October 4, 1941 Honorable Henry Morgenthau, Jr. Secretary of the Treasury Washington, D. C. Dear Mr. Morgenthau: I am enclosing a clipping from the American Banker of October 3 commenting on the address which you delivered before the American Bankers Association in convention in Chicago, as I think it probably will be of interest to you. With kindest regards, I am Very truly yours, B. M. Edwards, Assistant to the Secretary of the Treasury BME:mtb encl the n ) ) ) ( ) X Regraded Unclassified October 5, 1941 THE AMERICAN BANKER Morgenthau Speech At A. B. A. Meet Gets Much Applause From Delegates Who Overflowed Ballroom To Hear Him banker, "I suppose what is must im- Banker Reaction portant was the conciliatory and friendly Banker Reaction To What He Favorable attitudo expressed by the Secretary all Said Was Generally Highly What did the bank audience think of through his speech. That showe that Favorable. the Secretary's remarks? Here are few what bankers are doing is getting some after-the-speech comments: recognition in Washington." Chicago, III., Oct. 2. Two "I for one am glad that the require- "Sure his ideas are sound, but con he thousand six hundred and sixty- ment for collateral on the 'E' Defense put them not What I mean is, are the one chairs were crowded into the Bonds is being dispensed with. That was policy-makers and pressure groups ready Grand Ballroom of the Stevens just a nuisance. Lots- more country Hotel (ordinary capacity 2,400) for sound thinking of that sort in Wash- banks will now qualify as agents and this morning, but the crowd that help the Treasury." (Heard many ington." turned out to hear the address of times). "Why didn't be say something to - Secretary of the Treasury Henry "What the Secretary said was unques- plain his suggestion a few days ago Morgenthau, Jr., before the clos- tionably sound and I am for it all the that corporation profits should be Timited ing business session of the Ameri- way, I am going back to my little coun- to 65 for the duration of the defense can Bankers Association over- try town and redouble my efforte to push emergency!" flowed into the standing room the Defense Bond sales." "Delighted with every word of what available and crowded about the Likes His Views doors. On Inflation the Secretary said. I hope bis counsel The stenographie reports of the Secre- "What impressed me is his very win- will prevail on non-defense spending and =prech will report an interruption cere apprehension of the dangers and anti-infletionary measures." n° "applause" right in the midst of the bardships of inflation. And that next "I was glad that be came right out epech A ᵒ well NY 4 fullence invasure of year's tax bill is going to be something applaxice at the end, and the banker 1-0- and called * spude a spude on farm even heavier than the one we are pre- action to what he anid was generally action and wage increases.' What Ser- paring to pay right now." highly favorable. "Did you notice where the Servetary relary Morgenthau had said was to re- Appland His Stand On said bankers had been 'real partners' of peat his statement made at Boston that Non-Defense Spending the Government? Well, did you ever t was "sheer folly' for the furmer 10 The applace which interrupted his hear the story about Sum. Well, Sam seek higher prices, for labor leaders to maidress came when the Secretary said: was awful blue when he came home one seek continual new increases in was "I base already suggested, not once. but night, and his wife aiked what's op. or for landlords, business men, bankers repossedly, that the Government cut 'Didn't I tell you,' said Sam, 'they were or any group to exploit the present emer- down immudiately un non-defense 0.Mm talking about making me a partner geney." penditure, not mig as mont financial where I work. Well, they did it.' May- "The Secretary la undoubtedly sincere publicy but as sound anti-infinationary be wo'd ought In stay a creditor and not and has the courage of his convictions, practice." play partners." and I hope that he gets as much ap- Spoutaneously, the applace curled From a banker's wife: "The idea of plause 61 Washington as he got here." Actorn the hell. largest hotel ballroom in giving Defense Bonds for Christmes Following the Secretary's speech, he America. and exploded, and continued gifts sounds vory good. And for gifts and Senator Connally were honor guesta A. H. A. President Houston had by rice of all kind. I am going down to a of A. B. A. President P. D. Houston at and Henal for Its subsidence. Then See- State women's club meeting nest week a private Juneheon, attended by a score ndary Morgenthan went on: "Since you and I am going to urgo them to advo- of Chicago banking heads and A. B. A. like that statement BA) much, I shall be cate cutting out useless gifts for bridge leaders and past presidents. very happy to repeat it." mid as be did prizes and the like. and give Defense may sirero www strußer emaller wave of bandelapping. and laughter. Stamps and Bonds. I like his Idea on more payroll-subscription Defense Bond savings accounts. But I still think that the Treasury is not really going to get anywhere with its so-called popular sav- has appeals until it gives us quotas to work on:" What do I think," from a big city Regraded Unclassified 68 October 8, 1941 12:11 p.m. HMJr: Hello. Cordell Hull: Hello, Henry. HMJr: Good morning, Cordell. H: What did you develop? HMJr: Well, after I saw the English I had the Russians come to the house at half past nine. H: What kind of 8. man have they got here? HMJr: Well, he seems like a very decent fellow. He has a little trouble understanding English, but a quiet, nice man. H: Yes. HMJr: And I told them that I didn't think that their gold would ever be as useful to them in the next three weeks - be more useful to them in the next three weeks than it would any time in the next ten years. H: Yes. HMJr: And that I was ready to buy their gold against up to as long 3.9 six months' delivery, if necessary. H: Yes. HMJr: And that Hopkins said he had fifty million dollars worth of guns and planes. H: Yes. HMJr: And I couldn't understand why they dien't take it. H: Yes. HMJr: Why do they want to hoard their gold? Regraded Unclassified 69 - 2 - H: Yes. HMJr: Well, I put as much steam into it as I could. H: Yes. HMJr: So the man told me this - I can't pronounce his name. H: Oh, you're not expected to. HMJr: So he said, "Well, nobody's ever told us before that there was fifty million dollars worth of material that we could have." H: Yeah, I see. HMJr: So he said, "That's something quite new." H: Yes. HMJr: So he said he'd get a cable off last night, and was telling them that I was ready to advance them fifty million dollars against delivery of gold up to six months. R: Yes. That's good. HMJr: Now H: That ought to help out the situation. HMJr: It ought to. Then I called up Harry this morning and I said, "Now, can you make good on it?' H: Yes. HMJr: Harry Hopkins. He said, "Yes, I can." H: Well, that's very important. HMJr: So I should think if they were going to do it, we ought to hear by Friday. H: Well, that's very interesting. I shall listen for the telephone to ring Friday. Regraded Unclassified as 20 - 3 - HMJr: Thank you. H: Yeah. Thank you. 71 October 8, 1941 2:45 p.m. HMJr: Hello. Operator: Mr. Odlum. HMJr: Hello. Floyd Odlum: Hello. HMJr: Hello, Mr. Odlum. 0: Yes. HMJr: This is Henry Morgenthau. 0: Yes. HMJr: You wrote me a letter a few days ago which I've delayed in answering because I've been pricing an issue. You know what that means. 0: Yes. HMJr: I have with me now Chester Barnard - I don't know whether you know him. 0: No, I do not. HMJr: Well, he's President of the Bell Telephone of New Jersey. And he is helping me on this Procurement matter. 0: Yes. HMJr: Now, I'd like the two of you to get together. I got another letter from you yesterday. O: That's right. HMJr: And I'm going to ask him to call you. 0: Good. HMJr: And I'm sure between the two of you you can work out something that will be all right. Regraded Unclassified 72 - 2 - 0: Well, that's excellent. That's just exactly what I wanted; because I know that in the Treasury Procurement, there are many ways, because they're not in the difficult stuff like Ordnance where we can help over this emergency by spreading the work around a little bit more than in most purchases. HMJr: Well, I want you to know I'm in entire sympathy with what you're trying to do; and the more you can spread it, the more I like it. 0: Swell. HMJr: So I'm going to - - I'll have Mr. Barnard call you and add any suggestions. 0: Thank you so much. I appreciate your calling. HMJr: Thank you. 0: Good-bye. 73 October 8, 1941 2:50 p.m. HMJr: Hello. Operator: Mr. Barnard. HMJr: Hello. Operator: Go ahead. HMJr: Hello. Chester Barnard: Yes, sir. HMJr: Mr. Morgenthau. B: Yes, sir. HMJr: I just got another communication which is on the way into your office from Floyd Odlum. B: Yes. HMJr: And I called him up and said that I was referring the matter to you and the one that came in last week. I haven't got that yet. I mean the one that Harold Graves has. B: Yes. He says I looked at it in your office at the Monday morning meeting, and I put it back on your desk. HMJr: On my desk? B: Yes. And they're trying to get it from Mrs. Klotz. She's been tied up. HMJr: Well, I'll have to go through my papers. Perhaps if it's on my desk, you'll have it within a minute. B: All right, sir. HMJr: Would you call up Floyd Odlum for me. B: Yes. 74 - 2 - HMJr: I just got through talking to him - and arrange to see him? B: I will. HMJr: And find out Just what he wants - - if we can do it - because when it comes to giving business to the little fellow, why I try to reciprocate and I'm sure you are, too. B: Yes. All right, sir. I'll do that. HMJr: Thank you. 75 MEMORANDUM October R, 1941. TO: The Secretary FROM: Ir. Sullivan Senator George phoned at 4:35 p.m. to advise me that today he had talked with the President about the Social Security program. The Senator got the impression that the President had made some com- mitments and felt obliged to send some sort of message to the Rill. However, the President said such a message would be general in nature, would not be sent for three or four weeks, and the leaders of the Senate Tinance and House Ways and Means Committees would have an opportunity to talk with the President before the message was sent. The President told Senator George that it was his idea that the Committee could do some preliminary investigating through the fall and winter and not really go to work on this problem until next year. The President also stated that be understood there was to be plenty of other work to keep these two committees busy in the mean- time and that he had no intention of sidetracking this work with the Social Security program. JLS Regraded Unclassified TREASURY DEPARTMENT INTER-OFFICE COMMUNICATION 76 DATE TO Secretary Morgenthau October 8, 1941. FROM Joseph J. O'Connell, Jr. Attached is & compilation of statements made by Bernard M. Baruch, William G. McAdoo and David Houston concerning taking the profit out of war. As you can see, McAdoo, who had very little to say on the subject, advocated an 80 per cent war profits tax to be administered in conjunction with an excess profits tax. The war profits tax was to be based on average earnings, and the excess profits tax to be based on invested capital. He did not apparently favor a 100 per cent excess profits tax. Houston's only public statement was one proposing a repeal of the war time excess profits tax. Baruch has spoken often but it is not entirely clear what he would favor. In common with most who say anything publicly on the subject he wants to "take the profit out of war", but just how he would do it is not 80 clear. He-feels that freezing prices as of a date prior to the war period is the most effective single method of preventing inflation and high profits, but that excess profits taxation, as well as other devices, would also be helpful. He states that excess profits taxes, standing alone, have no effect whatever to check inflation. However, he is referring to m80 per cent excess profits tax and his arguments fall completely to the ground if we assume that the excess profits tax would be 100 per cent. In general, it can be said that he would advocate a high excess profits tax as an adjunct to direct control of all prices. Jayer JOConness go 77 STATEMENTS by BERNARD M. BARUCH, WM. G. McADOO, AND DAVID HOUSTON concerning TAKING THE PROFIT OUT OF WAR Bernard M. Baruch It does not appear that Bernard M. Baruch made any public statements concerning war profiteering during the period that he was serving as a member, and later as chairman, of the War Industries Board. Since the close of the First World War, however, Mr. Baruch has, on many occasions, dealt with the problem of "Taking the Profit Out of War". In an article with that title, written in 1926 for the Atlantic Monthly, Mr. Baruch said: "In the war emergency it early became evident to those who were charged with the responsibility of mobilizing the resources that there was 8. just sentiment among the people against profiteering. Profiteering might be willful and profit-making might be involuntary; but, whatever its form, there was a just determination it should cease. So it became necessary to fix prices where the supply was limited. "Wherever the Government created a shortage by its demands, prices were fixed, Regraded Unclassified . 2 - 78 not only for the Army, Navy, and the Allies, but for the civilian population as well. *** "If we were to start, in the event of another war, at the place where we were industrielly when the World War ended, the President, acting through an agency similar to the War Industries Board, would have the right to fix prices of all things as of a date previous to the declaration of war when there was 8. fair peace-time relationship among the various activities of the nation. It would be illegal to buy, sell, serve, or rent at any other than these prices. Brakes would be applied to every agency of inflation before the hurtful process started. *** "Money would be controlled and directed like any other resource. "Taking the profit out of war' is not synonymous with 'conscrip- tion of wealth,' as it is sometimes regarded. The latter is a theoretical project, prohibited by our Constitution, contrary to the spirit of our social and political institutions, and im- possible in practice. Taking the profit out of war is an orderly and scientific development of the economics and conduct of modern war, necessary to the effective mobilization of national resources and indispensable to equal- izing the burdens of war among the armed and civilian population. Born of experience and proved by practice, it removes some of the most destructive concomitants of modern war--the confusion and waste incident to wartime infla- tion." (1926) 137 Atl. Monthly 23, 24-27. Mr. Baruch reiterated his plan for 8 ceiling over all prices during war-time in 8 memorandum presented to the Regraded Unclassified 79 - 3 - Joint Congressional and Cabinet Commission on Industrial Mobilization in 1931. He suggested the enactment of a statute which would give to the President, after 8. declara- tion of war by the Congress or during the existence of an emergency due to imminence of war, the power to select a date prior to the existence of the emergency when abnormal disturbances in the general structure of market prices were at 8. minimum, and to proclaim that thereafter no one should pay 8. price higher than the price charged on the date selected. Baruch, American Industries in the War (1941), 458. In conjunction with such a price control statute Mr. Baruch advocated an excess profits tax. He explained the need for such a tax in these words: "We always have low-cost producers and high-cost producers. War requires all pro- ducers. This presents the most difficult aspect of the problem: 'If we raise the prices sufficiently high to pay 8. reasonable profit to the high- cost producer, we will thereby create in- ordinately high profits to the low-cost producers.' "There are only two alternatives--create B. system of bonuses to the latter class or limit, by an excess profits tax, the return on invested capital to the former class. After exhaustive study during the war the former method was considered impracticable and the latter was adopted.***" Regraded Unclassified 4 80 However, it wes also Mr. Baruch's position that: "Excess profits taxes--standing alone-- have no effect whatever to check inflation. Their only effect is to increase it. Thus 20 per cent of $500,000 profit is $100,000 and 20 per cent of $1,000,000 profit is $200,000. One way to increase $500,000 profit to $1,000,000 profit without increased risk or effort is to double price. For this reason there is more incentive to increase prices-- and therefore profits--under an 80 per cent excess profits tax than there is without it. Indeed, the main result of such a system is to induce rapid price increase to absorb the tax.*** "Consider for example the simple case of 8 company capitalized for $1,000,000, selling $1,000,000 worth of goods annually, making 20 per cent gross profit or $200,000 on its turn- over, and having $100,000 of expenses of administration and selling, leaving B. net profit of $100,000 or 10 per cent on both its normal turnover and its capital. Suppose, also, that 10 per cent of its costs of manufacture or $800,000 are fixed overhead charges--de- preciation, maintenance, supervision, taxes, etc. Then its costs for material and direct labor are $720,000 for every million dollars' worth of goods it sells. Now suppose that war comes and we need the full capacity of that plant. We give it orders for $4,000,000 worth of goods to be delivered in a single year. It has no in- creased selling and general administrative ex- pense because the demand is so great that no such effort is required. Neither do the fixed overhead elements of its manufacturing costs increase greatly--say only to $90,000. What happens to the profits of that plant? Its material and direct labor costs on its $4,000,000 sales are $2,880,000. To this it must add $90,000 for fixed overhead charges in its factory and $100,000 for general and administrative ex- pense, making 8. total cost for goods sold of Regraded Unclassified - 5 - 81 $3,070,000. Its net profit is therefore $930,000 or 930 per cent of its normal profits in peace. It is making nearly 100 per cent on its invest- ment and its net profit on turnover has increased from 10 per cent to 23 per cent. Even if we assess a tax of 80 per cent on the $830,000 of excess over peace profit, that plant will still be making $260,000 or 260 per cent of its normal profits. "I want you particularly to note that this example considers no increase in price whatever. "I recall vividly that, during the war, even after we had, by price fixing, compelled a reduc- tion of 35 per cent from the peak index figure of iron and steel, and even after the 80 per cent excess profits tax was in effect, some high-minded and public-spirited steel men came to me express- ing apprehension over the enormous profits they were making under our restrictive system operat- ing at its best. The reason they were making such profits in spite of all we could do is made clear by the example I have given you. If to the enormous increase in profits shown by that example we add the profits due to B. runaway market, the figures of profit become even more astonishing." In refuting statements that high prices stimulate pro- duction, Mr. Baruch said: "The suggestion that we can entice extraordinary effort by & bait of huge profits, later to be magicked away--is hardly appropriate now because the whole of industry is on notice that we shall have an excess profits tax in any war--it is 8. recognized incident of war operations everywhere. "Finally I concur fully in Mr. Baker's answer to that suggestion (p. 135): 'I do not think prices were ever fixed high as a means of increasing pro- duction. I think it was not necessary to stimu- late anybody to produce in America.' Regraded Unclassified - 6 - 82 "There are reasons supporting Mr. Baker's view which stand entirely apart from the stimulation of patriotism--which, in itself, is sufficient: Our modern production plant is highly mechanized. Me- chanical mass production brings low costs, but only when the machines are operating close to capacity. *** when they [the machines] are speeded, the results in reduced cost per unit of production are sometimes almost fabulous. It is this economic circumstance which insures us against any faltering of production, and the ex- pedient of increasing prices (with the excess profits tax to offset profiteering) is wholly un- necessary to increase production. "While the excess profits tax is an in- dispensable concomitant to proper industrial mobilization, the points I have tried to demonstrate and now emphasize by repetition are: "(a) Even with a fixed price structure and a high excess profits tax there will be huge war profits. "(b) It is both futile and unnecessary to try to stimulate production by high prices-- relying on an excess profits tax to recapture these profits. "(c) The excess profits tax--standing alone-- as a means for equalizing the burdens of war and eliminating the profits of war is fatally defective because it aggravates infla- tion and therefore fails to protect us against the most destructive phenomenon of modern war." Baruch, American Industry in the War (1941) 415-417. In 1935, Mr. Baruch appeared before the House Committee on Military Affairs and again advocated the enactment of a Regraded Unclassified - 7 - 83 statute providing for 8. general over-all price ceiling in time of war. He proposed to limit profits by keeping prices at a peace-time level by freezing prices as of & certain day, subject to such adjustments as a Price Fixing Committee might find necessary to make. House Committee Hearings, 74th Cong., 1st Sess. (1935) vol. 696, Part II, p. 3. In the same year Mr. Baruch testified before the Senate Munitions Investigating Committee. He stated in part: "* # # The cold fact remains that ours is an economy activated by profits. There is no proof that it will run on psychology and there is much that it will not. Certainly we should not select an hour when the enemy is at the gates to find out whether it will or not." Senate Munitions Investigating Committee, Hearings on the Munitions Industry, 74th Cong., 1st Sess. (1935), part 23, p. 6633. During his recent appearance before the House Committee on Banking and Currency during hearings on the Price Control Bill, Mr. Baruch once again took the position that war pro- fiteering could best be eliminated by the over-all price ceiling administered in conjunction with an excess profits tax. He added: "# # # but I must emphasize that no tax program alone can recapture all excessive profits. Profits must also be controlled at their source which is rising, runaway prices. House Committee Regraded Unclassified - 8 - 84 on Banking and Currency, Hearings on H.R. 5479 (Price Control Bill), 77th Cong., 1st Sess. (1941), p. 743. William G. McAdoo It appears that the only statements made by William G. McAdoo concerning the taking of profit out of war are relative to the enactment of the excess profits tax. In November, 1917, Mr. McAdoo, taking the position that the main purpose of the excess profits tax should be to increase the Government's revenue, stated: "The first aim of the Treasury Department will be to accomplish 8. collection of the full amount of revenue desired by Congress in fram- ing the tax law to prosecute the war. New York Times, November 14, 1917, 10:1. In August, 1918, Mr. McAdoo advocated the adoption of an 80 per cent war profits tax to be administered in con- junction with the excess profits tax. The war profits tax was to be on all profits in excess of the normal profit before the war, while the excess profits tax was imposed on all profits over and above a given return on capital. Concerning the war profits tax, Mr. McAdoo stated: "The adoption of an 80 per cent. war profits tax should render unnecessary, and I believe un- desirable, any increase in the existing excess Regraded Unclassified - 9 - 85 profits tax rate. It is my strong conviction that the taxation of genuine war profits would reach real war profiteering, and that it is at the same time a thoroughly justifiable measure on economic grounds, as well as 8. certain and indispensable producer of a large part of the required revenue. "The patriotic producers of America should be content if one-fifth of their war profits are secured to them # " #!' New York Times, August 8, 1918, 17:2; see also, New York Times, August 15, 1918, 1:1, and August 20, 1918, 6:3. David Houston In the only statement which Mr. Houston appears to have made concerning this subject, he urged the repeal of the excess profits tax. He said: "The reasons for the repeal of the excess- profits tax should be convincing even to those who, on grounds of theory or general political philosophy, are in favor of taxes of this nature. The tax does not attain in practice the theoretical end at which it aims. It discriminates against conservatively financed corporations and in favor of those whose capitalization is exaggerated: in- deed, many overcapitalized corporations escape with unduly small contributions. It is exceed- ingly complex in its application and difficult of administration, despite the fact that it is limited to one class of business concerns--corporations. Moreover, it is rapidly losing its productivity. The invested capital of the average corporation, earning profits high enough to subject it to the excess-profits tax, is now estimated to be in- creasing at the approximate rate of 12 percent a year, while the income of the average corporation is almost certainly declining at B.S great 8 rate. Regraded Unclassified - 10 - 86 Both movements cut into the productivity of the tax. If the present changes in capital and income continue for sometime in the future, as now seems probable, large reduction may be expected in the yield of the excess-profits tax. For the present fiscal year the profits tax, with collection of back taxes, is estimated to yield about $1,250,000,000, and for the fiscal year 1922 about $800,000,000 as against an estimated yield for the fiscal year 1920 of slightly over $2,000,000,000." Hearing before a Subcommittee of the Committee on Finance, United States Senate, 74th Cong., 2d Sess. on H.R. 5529 (an Act to prevent profiteering in time of war). Subcommittee of the Senate Committee on Finance, Hearings on H.R. 5529 (Bill to prevent war-time profiteering), 74th Cong., 2d Sess. (1935), P. 89. Treasury Department Division of Monetary Research 87 Date October 7, 1941 19 To: Secretary Morgenthau At the meeting of the Economic Defense Board on August 27th, the Vice President asked the Treasury Department to prepare, for the use of the staff to be assembled by the Economic Defense Board, a memorandum on the economic defense functions administered by the Treasury Department. The appended memorandum lists the various functions administered by the Treasury Department which relate to the problems of economic defense. MR. WHITE Branch 2058 - 2141 Regraded Unclassified B8 October 8, 1941 Confidential MEMORANDUM POR THE VICE PRESIDENT Subject: Boonomic Defense Functions Administered by the Treasury. In response to your request of August 27 for a assorandum an the economic defense functions administered by the Treasury Depart- ment, we give below a brief description of those economic defense activities in which the Treasury Department participates. 1. Functions Administered Mainly by the Treasury 1. Foreign Funds Control administered in accordance with poli- cies determined by State, Justice and Treasury Departments. The policies governing the administration of foreign funds are designed to: a. Prevent Axis countries, and countries dominated by the Axis, from using thair dollar assets or influence to draw upon our resources to maintain their war effort, to strengthen their sconomic position, and to exclude this country and other friendly countries from full access to vital materials. b. Prevent Axis countries, and countries dominated by the Axis, from using the world's strongest medium of inter- national exchange - the American dollar - and to prevent their use of our banking and financial facilities for commarce or other activity in the United States or any other part of the world. Time, in danying the And the right to settle balances in dollars, you injure or destroy its competitive position in markets where the demand for dollars is strong. c. Prevent the physical movement in the import or export of goods between the United States and any Axis area or Axis firs both by direct control through Customs and by control over all the financial transactions incident to any such movement of goods. Thus, a complete control has been placed on every aspect of trade and commerce between Japan and the United States and between persons Regraded Unclassified 89 - 2 - whose Mill appear on The Proclaimed List of Certain Blocked Nationals and the United States. d. Prevent the we of dollar assets by Axis countries to finance propaganda, sabotage and other subversive activities in the United States and other areas of strategia importance to the United States. 8. Prevent aggreen countries from sequiring the many billions of property in the United States belonging to inveded areas and from otherwise utilising such property. Instead the dollar assets of occupied over trice are hold is trust for their rightful owners. At the - time, the rights of American claimants to these assets are protected by preventing the dissipation of these assets. f. Prevent Axis countries from sequiring legal title to property in occupied countries by purchasing such property from American owners with looted funds. Pre- vent Axis powers from liquidating in our markets securities and other assets looted and otherwise # quired in invaded areas. g. Prevent the sale of American-owned property in European countries for payment out of blooked funds. If such transactions were permitted, the funds that should be hald for the benefit of all American claimants on an equable basis would be dissipated. It would also be possible to accord preferential treatment to American claimants in 4. manner advantageous to Axis interests. h. Minimise or eliminate the liabilities and responsi- bilities of American banks and other business instite- tions against the assertion of conflicting claims to proparty arising out of the invasion and other revolutionary change in the political and economic life of foreign countries. 1. Prevent American firms from entering into, or executing, contrasts or other arrangements with Acis firms where such contracts or arrangements interfere with or prejudice defense production or curtail the competitive position of American firms against Axis firms in neutral markets or otherwise prejudice the national defense. Regraded Unclassified 90 - 3 - J. Control undesirable banking and business conserns in the United States which are influenced or end W Axis or other unfriendly interests. Through the medium of attaching confilions to the licensing of their banking and business operations, the Treasury 602 mullify or eliminate there influences and them these concerns in- to IMPO natisfactory chamels. Am exemple of this is the current effort to eliminate the German influence in Starling Products and at the - time utiline the Starling Products, to take my the Latin-Amarican drug market from German interests. This control over busi- mass interests also includes control of patents and licensing and pooling arrangments of an undesirable nature. k. Regulate the trade and financial transactions with neutral countries and stipulate conditions with respect thereto which would insure that such trade would not benefit the Axis, etc. 1. Regulate all transactions in the exchange of the Axis and compled countries in so far as they involve this market, thus protesting American holders of such I a. Provide the government with & complete and comprehensive contrus of every type of property within the United States in which any foreign country w its nationals have any type of interest, including presise data as to the identity of the foreign interest, nature and location of the proparty. a. Obtain sentiming reports from and about individuals and butiness conserns with a view to being constantly informed as to their activities, whether in an economic or financial field or in the field of propaganda or subversive activities. Some of the information thus obtained will be of assistance to other agencies such M FBI in the earrying out of their functions and through this chancel an agency such as FBI may be able to ebtain desired information without revealing its I 0. Fertify the economic and financial position of friendly countries by correlating or exchange and trade control with theirs in order to prevent evasions and strengthen Regraded Unclassified 91 - 4 - Regraded Unclassif their operations in fields where they are impotent, and by extending to them technical assistance and guidance where Time, we ean provide China with com- trol over all trade and financial transactions with the United States even including control over occupied China and international settlements. These operations can be effected by this country alom or in conjunction with other friendly countries. 2. Office of Merchant Ship Control The office of Marchant Ship Control exercises centrol over the novement of ressels from parts in the United States or subject to the jurisdiction of the United States. No departure by any vessel on voyages on which clearances by 4 oustoms officer is required can take place unless authorised by the Secretary of the Treasury. The Office of Merchant Ship Control is a part of the Coast Quard and was established in June, 1940, under the powers granted to the Secretary through the preelemation of a national emergency by the President. 3. Other Powers Over Shipping The Secretary of the Treasury is authorised in the national emergency, subject to the approval of the President, to mine rules and regulations governing the enchorage and movement of any vessel in the territorial waters of the United States. If necessary in the Secretary's opinion to cesure a vessel from damage or to prevent damage to any har- bor or waters of the United States, be say take possession and control of such vessel. (Under this power, the German, Italian and Denish ships were reised by the Coast Guard.) 4. Additional Powers over Importe The Treasury has a number of commercial policy powers which it can use to influence the trade of other countries with the United States. In its Customs administration of the entry of commedities into the United States possibili- ties of action against "Azile" goods and "Axis" fives present themselves. The Treasury 10 empowered to impose counter- vailing daties on dutiable foreign goods which receive bounties in namufasture or in export to the United States. It has powers also to take corrective stage against foreign duaping or discriminatory practices. All of these powers can be used all weapons in sociendo defense. 92 - 5 - B. geonomic Defense Functions in Whose Administration the Treasury Participates 1. Preelaimed list of Certain Blocked Nationals. Under the Proelamation of July 17, 1941, the Secretary of the Treasury participates in the issuance of and addi- tions and deletions to the Proslaimed List of Blocked Mationals. A representative of the Treasury Department participates in passing on name to be added to w deleted from such list. Pursuant to the Proclemation all persons whose - appear on such list become subject to the freesing orders as though they were nationals of Germany or Italy and my engage in transactions only purmuant to license issued by the Secretary of the Treasury under the freesing orders. This Department, in conjunction with the Department of State, is also studying additional measures to remove listed persons from all positions of influence in the social, economic and political life of their respective communities. 2. Certifications as to who my Dispose of the Property of Foreign States and Foreign Central Banks Pursuant to the provisions of the Act of April 7, 1941, smending the Federal Reserve Act, this Department assists the Department of State in connection with the certification as to who may dispose of property belonging to foreign states and foreign central banks. Thus Dutch, Belgian and Norwagian government and central bank funds in the United States my be utilised by the friendly governments and officers of central banks to further their were effort without regard to instrue- tiens, etc. coming from the occupied area. 3. Purchases of Strategic and Critical Materials The Treasury purchases strategic and critical materials through the medium of the Treasury's Procurement Division at the direction of the Secretary of War and the Secretary of the Havy. The specifications of the materials purchased are prepared by the Procurement Division and approved by the Secretary of War and the Secretary of the Havy. Regraded Unclassified - 6 - 93 At times, this purchasing also has the effect of - clusive buying. For example, the Producement Division took over a large quantity of Turkish ahrome ore which the British had occured to keep from Ournary but which they could not use themselves. The Provident Mvisica, also, doss & large part of the purchasing under the Land-Lease appropriations. 4. Control over Traffic in Arms The Secretary of the Treasury is & musber of the National Munitions Control Board which expervises and - trols the naminature of, and international traffic is, an, ammunition, and implements of var. The Department of State administers the licensing system. The Treasury's Coast Chard and Customs Service scoperate in controlling the international traffie in and 5. Expert Control the Treasury's Coast Quard and Customs Service enforce the licensing system for exports of the State Department and Export Control. 6. Expert-Impert Bank The Treasury is represented on the Board of Trastees. 7. Control over Importe The You York Federal Recerve Bank certifies to the Treasury (in proctice in consultation with the Treasury) the exchange rate of each country to be used for customs valuation. When countries have multiple exchange rates this function gives considerable scope for decisions which my affect trade adversely # favorably. 8. Policing of American Waters The Coast Guard is the Federal police charged with enforcing Federal lows upon the water. It has the responsi- bility for enfereing all Federal laws in the navigable vaters of the United States, on the high neas, and on board any vossel subject to the jurisdiction of the United States. EM and mah 9/29/41 Regraded Unclassified 94 October 8, 1941. Dear Mr. Causey: You have been very good indeed in making sug- gestions is regard to the matter about which I consulted you during the latter part of September. I know that you will be pleased so hear that Mr. Buffington is coming with us -- in fact, be 10 already in Washington and getting acquainted with the Treasury. He expects to try the work for a couple of months, and I feel sure that the connection will work out very well indeed. with thanks again for your help in this matter, and all good vishes, Sincerely, (Signed) 1. Morgenthau, 39. Mr. James H. Causey, Cosmos Club, Madison Place and X Street, N.V., Washington, D. c. GEF/dbs Regraded Unclassified COSMOS CLUB WASHINGTON, D.C. Pep 29 95 Da me Morganthan as I think further about Buffington of chicap. the none Я think hill do c, fine joh. I hope you in see him before you finally deside Resides - he's ane of the unit alert financial men Я know - and absolutely loyal- open. minded and independent fundy James A. Causey C3 mad A. COSMOS CLUB WASHINGTON, D.C. Jushay my. approx 7/23/41 96 8 Mr - among the loyal one were Pame(2) this of this res Cyrono Eaton of Otis res. Clended There's Harland allen of Cheir (ha dalle so.) ,Nornestment Connects X who holped - redependent - ef yaid care to let forth the requirement of the job x the paid 7 a person - (don to Y the an inv. banker ), I'll I'll be glad to To Hand Lame time en the matter in a discrect lung & tee if I cant make Lame, happened Thith forteful affreciation Z your Compidence Junish James H.Gansey COSMOS CLUB monday 97 WASHINGTON. D.C. Mr. monpanthan many thanks for your fraccism note! Here: another suggestion:- :- you know him but he:- very modest y objective, they. in been talking brith Benjami Deckhart, the economic of the Chase mat. B. He seans most intelligent Thout. Than a high regard for you the I an whing from very objective reports to the back an South Emerica, what we ought to do reom 1 a the post was period - a moded a realisted point of min. you have already talked to in casually but I believe the caned be a valuable accessional consent & helper. - a had this man - young. who hate facts first x lits' the chip free where they will Math personal regards funds James Hansey TREASURY DEPARTMENT 98 INTER OFFICE COMMUNICATION DATE October 8, 1941 Secretary's files TO FROM Mr. Kuhn At the group meeting on October 6th the Secretary said that it would be all right to use his signature on telegrams to these officials, and that he did not need to see the list. Each such telegram will be approved by me before it is sent. 7.K. Att: 2 Regraded Unclassified TREASURY DEPARTMENT 99 WASHINGTON DEFENSE SAVINGS STAFF October 3, 1941 MEMORANDUM TO: Mr. Kuhn Gil FROM: Mr. Gilchrest The Secretary requested that in the future whenever we planned to broadcast any material of advantage to the Army, Navy and Marine Corps, we inform them by telegram of the occasion. Attached herewith a list of the Army, Navy, and Marine Corps people we believe should be sent wires. What additions would you and the Secretary care to make in this list. And another question. Don't you think these wires should be signed with Mr. Morgenthau's name. There would be no necessity of bothering the Secretary with this unless you think we should. Please let me know what decision is made. Regraded Unclassified 100 Army Navy The Honorable, The Honorable, Henry L. Stimson, Frank Knox, Secretary of War. Secretary of the Navy. Robert P. Patterson, The Honorable, Under Secretary of War. James V. Forrestal, Under Secretary of the Navy. Gen. George C. Marshall, Chief of Staff. The Honorable, Ralph A. Bard, Brig. Gen. F. H. Osborne, Assistant Secretary of the Navy. Chief of Morale Branch, War Department. The Honorable, Artemus L. Gates, Brig. Gen. A. D. Surles, Assistant Secretary of the Navy. Director, Bureau of Public Relations, War Department. Admiral Harold R. Stark, Chief of Naval Operations, Maj. Gen. Allen W. Gullion, Navy Department. The Judge Advocate General, War Department, Maj. Gen. Thomas Holcomb, Commandant of the Marine Corps. Maj. Gen. Edmund B. Gregory, The Quartermaster General, Adm. A. J. Hepburn, War Department, Director of Public Relations. Rear Admiral Chester W. Mimits, Chief of the Buresu of Navigation. Lt. Com. H. 0'Flaherty, Navy Department. Maj. Geo. T. Vander Hoff, Marine Corps. Gen. Robert Denig, Marine Corps. Regraded Unclassified 101 CONFIDENTIAL UNITED STATES SAVINGS BONDS Comparative Statement of Sales During First Six Business Days of August, September, and October, 1941 (August 1-7, September 1-8, October 1-7) On Basis of Issue Price (Amounts in thousands of dollars) 2 I Amount of Increase : Percentage of Increase : Sales : or Decrease (-) I or Decrease (-) Item : # : : October : September - October $ September I October : September : August 2 over : over : over I over : : 2 $ September : August # September I August Series 1. Post Offices $11,396 $11,487 $11,450 of 91 $ 37 - 0.85 - 0.3% Series 1. Banks 18,162 17.722 21,194 460 - 3,472 2.6 - 16.4 Series 1- Total 29,578 29,209 32,644 369 - 3.435 1.3 - 10.5 Series 1- Banks 5,846 4,803 6,516 1,043 - 1,713 21.7 - 26.3 Series G - Banks 37,517 34,846 47,502 2,671 - 12,656 7.7 - 26.6 Total $72,941 $68,857 $86,661 $ 4,084 -$17,804 5.95 - 20.56 Office of the Secretary of the Treasury, Division of Research and Statistics. October 8, 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 nearest thousand and will not necessarily add to totals. 101 Regraded Unclas 102 CONFIDENTIAL 101 UNITED STATES SAVINGS BONDS Daily Sales - October 1941 On Basis of Issue Price (In thousands of dollars) Post Office Bend Sales Bank Bond Sales All Bond Sales Date Series 1 Series I Series I Series G Total Series 1 Series 1 Series 6 Total October 1941 1 $ 1,450 $ 3,029 $ 1,286 $ 5,271 $ 12,587 $ 4,479 $ 1,286 $ 8,271 $ 14,036 2 1,870 2,786 867 4,324 7.977 4,656 867 4,324 9,847 3 2,150 3.299 1,065 6,323 10,687 5,449 1,065 6,323 12,837 4 1,270 1,696 612 6,400 8,707 2,966 612 6,400 9,978 6 3,449 4,778 1,444 9,286 15,508 8,226 1,444 9,286 18,956 7 1,207 2,595 572 2,913 6,080 3,802 572 2,913 7,257 Total $ 11,396 $ 18,182 $ 5,846 $ 37,517 $ 61,545 $ 29,578 $ 5,846 $ 37.517 $ 72,941 Office of the Secretary of the Treasury, Division of Research and Statistics. October 8, 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 nearest thousand and will not necessarily add to totals. 202 Regraded Unclass 3373-A 103 October 8, 1941 MEMORANDUM To: Members of Price Administration Committee From: R. K. Thompson, Secretary There are attached hereto the following: 1. Minutes of meeting held on October 2, 1941. 2. Price Schedule No. 29. 3. Price Schedule No. 30. 4, Revocation of Price Schedule No. 27. 5, Supplement to Price Schedule No. 16. 6. Amendment to Price Schedule No. 4. 7. Amendment to Price Schedule No. 13. 8. Price Schedule No. 31. 9. Reissue of Price Schedule No. 1. 10. Amendment of Price Schedule No. 4. 11. Extension of Price Schedule No. 14. 12. Price Schedule No. 32. 13. Amendment to Frice Schedule No. 12. 14. Price Schedule No. 23. 15. Price Schedule No. 33. 16. Price Schedule No. 34, 17, Amendment to Price Schedule No. 11. Regraded Unclassified 3373-A 104 CONFIDENTIAL SUMMARY OF STENOGRAPHIC TRANSCRIPT OF MEETING OF PRICE ADMINISTRATION COMMITTEE October 2, 1941 11:20 a.m. PRESENT: Mr. Henderson, Chairman, Miss Elliott, Messrs. Lubin, Ryder, Ayres, Nelson, O'Connell, Barnes, Whitcomb, Shields, Bean, Goodloe, Greenwood, Hosmer, Hamm, Ginsburg, Harris, Wallace, Summer, Bruce, Thompson. 1. Zinc Situation Reference was made to the discussion of the sinc situation had at the meeting of the Committee on September 10, and Mr. Henderson stated that, while we are further along on the crises in zinc, we are not much further along on a clear idea of the action to be taken. He added that what brings the matter to a hend is that the Eagle-Picher Company was planning to grant a vivge increase tomorrow but had now postponed it over the weekend. He said it is an increase which they can absorb from their current rate of production by curtailing the operation of their high cost or marginal mines and if that is done two things will force a question on the other mines as to the wage increase: first, the situntion at the Eagle-Picher Company, and, second, the prospect of their employees being drawn off by an $8.00 a day wage rate that has been fixed for the new defense industries that have been located in that territory. These other companies are not able to meet the wage increase and to take care of the depletion out of the current income. Regraded Unclassified 3373-A 105 Mr. Home indicated there are two phases of the problem: that the initial problem is the labor problem, and that even with an answer to that problem, we still have a problem of price policy as to which of certain alternatives we should follow in achieving the objective. There ensued a lengthy discussion of the question whether, as a result of the wage differential between $8.00 & day, now being received by defense workers in the Tri-State area, and $5.50 a day, now being received by workers in zinc mines, there is a drawing off of labor from the sinc mines to the defense plants, and as to the responsibility of the Office of Price Administration, the Labor Division of the Office of Pro- duction Management, and the War Department in this situation, but no definite recommendations regarding action to be taken were offered. Mr. Wallace then read to the meeting certain figures compiled by him in connection with the purchase of all of the tri-state consen- trates by the Government at $55.00 B. ton and its sale at $48.00 a ton, and the resulting savings that would accrue by pursuing that line of policy rather than paying the increased price just on Government purchases. This procedure was discussed at length but no action was taken. 2. Relation between price administration and the administration of con- sumer rationing, if and when that becomes necessary to regularize markets when maximum prices have been established. Reference was then made to the item above listed which had been suggested for discussion by Dr. Ezekiel, and Mr. Henderson suggested that discussion of this item be deferred until a subsequent meeting at which Miss Elliott, Mr. Weiner and Mr. Nelson will all be in attendance. Regraded Unclassified 3373-A 106 3. Participation by Interstate Commerce Commission in meetings of the Price Administration Committee. Mr. Henderson stated that the Interstate Commerce Commission had been invited to participate in meetings of the Price Administration Com- mittee, and that Mr. Hosmer WAS present today representing that organization. The meeting thereupon adjourned at 12:30 p.m. Regraded Unclassified 10? foundry or by-producs blast furnace colice, alone or in conjunction with any other material, or by was of any commis- sion, service, transportation, or other charge, or discount, premium, or other privilege, or by tying agreement or other trade understanding, or otherwise." I 1345.4 Records and reports. Every PART 1348-Coss person making purchases or sales of by- PRICE SCHEDULE NO. 11-ST-PRONUCT 2008- product foundry or by-product blast fur- SET AND ST-FRODUCT BLASS FORMACY nace coke after October 1, 1941, shall keep for Inspection by the Office of Price come Administration for 6 period of not less By-product foundry and by-product than one year, complete and securate blast furnace coke are important els- records of (a) each such purchase or sale, ments In the manufacture of from and showing the date thereof, the name and steel. Maximum prices have been estab- address of the buyer or the seller, the lished for pig Iron and iron and steel price paid or received, and the quantity scrap, other important elements of Iron of each kind or grade purchased or sold, and steel costs. and (b) the quantity (1) on hand, and Prices of by-product foundry and by- (2) on order, as of the close of each cal- product blast furnace coke are DOW from endar month. $1.00 to $1.25 per too higher than & Persons affected by this Schedule shall year ago, A further upward movement submit such reports to the Office of Price of coke prices would exert pressure upon Administration as # may from time to the prices of Iron and steel. The stabl- time require." Iteation of present coke prices is Impor- 1345.5 Enforcement. In the event tant in the prevention of inflation. of refusal or failure to abide by the price After full investigation and confer- limitations, record requirements, or other ences with representatives of the coke in- provisions of this Schedule, or in the dustry, It has been determined that the event of any evasion or attempt to evade establishment of maximum prices for by- the price limitations or other provisions product foundry and blast furnace coke of this Schedule, the Office of Price Ad- is essential and is in the Interest of no- ministration will make every effort to tional defense and the public welfare. assure (a) that the Congress and the Accordingly, under the authority public are fully Informed thereof, and vested in me by Executive Order 6734," (b) that the powers of the Government It is hereby directed that: are fully exerted in order to protect the I 1345.1 Mazimum prices for by-prod- public interest and Interests of those per- uct foundry and by-product blast 11/- sons who comply with this Bchedule. nace coke. On and after October 1. 1941, Persons who have evidence of any offer, regardless of the terms of any contract receipt, demand or payment of prices of sale or purchase. or other commitment. higher than the maximum prices, or of no person shall sell, offer to sell, deliver any evasion or effort to evade the pro- or transfer, by-product foundry or by- visions hereof, or of speculation. or ma- product blast furnace coke, and no person nipulation of prices of by-product foundry shall buy, offer to buy, or accept delivery or by-product blast furnace coke, or of of by-product foundry or by-product the hoarding or accumulating of unnec- blast furnace coke at prices higher than essary inventories thereof, are urged to the maximum prices set forth in Ap- communicate with the Office of Price pendices A and B, incorporated herein Administration.* M I I 1345.9 and 1345.10 respectively.* 1345.6 Modification of the schedule. Persona complaining of hardship or in- "II 4545.1 to 1345 10, inclusive, Insued pur- equity to the operation of this Schedule suant to the authority contained to Exec- usive Order 0736. may apply to the Office of Price Adminis- tration for approval of any modification 1345.2 Less than mazimum prices. thereof or exception therefrom.* Lower prices than those set forth in Ap- I 1345.7 Definition. When used in pendices A and B may be charged. de- this Schedule, the term "person" means manded, paid or offered." an individual, partnership. association, 1345.3 Evasion. The price limits- corporation or other business entity.* tions set forth la this Schedule shall not 1345.8 Effective date of the schedule. be evaded either by direct or Indirect This Schedule shall become effective methods in connection with a purchase, October 1, 1941.* sale delivery or transfer of by-product 1345.9 Appendiz 4, Mazimum prices for by-product foundry coke per net for FR. 1917. (2,000 lbt)-(a) General provision. The maximum delivered price for by-product foundry coke shall be the price P. O. B. cars at the governing oven plant, plus rail transportation and switching charges from that OVED plant to the place of de- livery. The term "governing oven plant" means that oven plant, the price at which, together with transportation Regraded Unclassified charges. results in the lowest price at the or the price provided in this exception place of delivery, (8). whichever La lower, except when ex- 8. 6. D. oven plant in 0072 ceptions (1), (2), (3) or (4) are appli- Location of oven plant: (per MI ton) uable the prices provided la such excep- $8.50 Alabama tions may be charged. Chicago, Illinois 11.50 Ashland, Kentucky 10.00 When the railroad freight rate for by- Detroit, Michigan 11.76 product foundry coke from Swedeland. 12.18 Kearny, New Jersey Buffato, New York 11.78 Pennsylvania to the place of delivery, in 10.00 cluding switching charges. is: Tranton, Onio Painesville, Ohio 11.25 10.00 The elezimum price Portsmauth Ohio Prescre rate per net the per net for Mall be Bric, Pennsylvania 11.76 11.76 80.66 and less Philadelphia. Pennsylvania '$12.38 $0.69 to 80.96 inclusive Chattatiogs, Tennesses 9.00 12-10 Pairmont, West Virginia 10 00 $0.07 to $1.05 Inclusive 12:45 12.25 81.07 to 82.26 Inclusive Wisconston 12.70 @2.25 to #2.50 inclusive 39.90 (b) Exceptions-(1) New England $2.51 to 0285 Inclusive 12.33 BFEG The maximum delivered price in 63.80 and over P10.35 the states of Connecticut, Rhode Island, Delivered Massachusetts, New Heinpshire, Ver- *F. o. b. oven plant, except that on deliv- eries to be made to the Cumberland Valley mont, Maine, and in the adjoining areas and Central Pennsylvania, the price shall he of New York State which have customar- $10.00 per net ton, Γ. o. b. oven plant ily been Included within the New England (6) Delivery other than by rellroad. shipping area, shall be $13.75 per net ton, When delivery is by means other than less 10.15 per net ton discount for cash railroad, the maximum delivered price ten days. shall be the price as computed in this (2) The maximum delivered prices Appendix but adjusted to provide the CU)- willin the following switching districts tomary differential or charge in effect on are: September 18, 1941, for such means of insured delivery.* Disirint prime I 1345.10 Appendix B, m a If m M the chicago. Blinom @12.25 at LOUIE, Mo. & Eart an Louis III, 12.02 prices for by-product blast furnace coke Indianagelie Indiona 12.00 per net ton (2,000 lbs.) The maximum Terre House Indians 12.00 price 1. o, b. oven plant on by-product Detroit. Michigan 13.25 auttalo, biew York 12.50 blast furnace coke which may be charged Chematt. Onle 11:75 by any person at each oven plant, shall Ohio 12:30 be 80.75 per net ton above the weighted Die Pennsylvania 13 95 12:38 average price f. o. b. oven plant of such Philadriphia Pennsylvania BY Pout and Minnespotis Minnemota. 14.00 coke delivered by such person from each oven plant during the first quarter of ($) Exception für certain existing 10- 1941: Provided, That this Appendix B Internships Whenever shipment is mude shall not apply to sales or shipments from an oven plant other than the gov- made after the fasuence of this Schedule eming oven plant and the seller eus- at less than $6,00 per net ton f.o. b. oven tomorily during the atx months preceding September 15, 1941, has received from - plant, The weighted average price purchaser a price in excess of the maxi- means the average of the pricess for which mum delivered price otherwise estali- such coke WILL sold during such period lished by this Schedule, such higher price weighted by the tons of such coke sold at may continue to be charged much pur- each price. choser. Each person using this excep- Every person who produces and solls con (3) shall Bir with the Office of Price by-product furnace coke shall file prices Administration, on or before September at which such coke was delivered. und 27. 1941. a list of purchasers to whom the quantity délivered at each price dur- this exception (3) applies and all prices Ing the first quarter of 1941. Such infor- received from such customer during such mation shall be filed with the Office of period. Sales or shipments to customers Price Administration. Washington, D. C. may noi be made under the exception on d) before September 27. 1941.* (3) after October 1. 1941, without the Issued this 18th day of September 1941. filing of such not of purchasers and LEON HENDERSON, prices Administrator, (4) Shipments to West Chart. On shipments to the states of California, 18. R. Doc 41-7007) Filed. September 14h 1941: Creson and Washington, the governing 6:26 P. m.j oven plant may be Chieage, Illinois: Provided, That, when stupment la from the oved plants listed in paragraph (a) of this Appendix, the maximum delivered price may not exceed the P. D, B. oven plant price at such oven planta plus immaportation charges. (6) Shipments from Swedeland, Penn- sylvania. Whenever shipment is from Bwetteland, Pennsylvania, the maximum delivered price shall be the price pro- vided In paragraph (a) of this Apperialia OFFICE FOR EMERGENCY MANAGEMENT Office of Price Administration For Saturday A.M.'s 108 September 20, 1941 PM 1194 Actine to stabilize a seriously disturbed price situation, Leon Henderson, ad- ministrator, Office of Price Administration, today fixed maximum prices for all graies of waste paper sold in the area east of the Rocky Mountains. The maximum prices, set forth in Price Schedule No. 30, become effective Octo- ber 1. 1941, and were determined upon after an exhaustive investigation and after numerous conferences with representatives of all branches of the trade. They are in line with the prices prevailing on June 16, 1941, The prices established in the schedule, Mr. Henderson emphasized, are the maxi- man prices that consuming mills can pay their shippers at point of shipment. Prices to be paid by wholesalers, brokers and dealers should be below these naximum prices, Mr. Benderson explained that maximum prices are not being established in the aren west of the Rocky Mountaine because investigation has shown that at the present time no inflationary price rise in threatened in that area. Since the effective date of the schedule is October 1, ámple time is being given for the completion of existing contracts and the liquidation of inventory. For this reason, no provision was included to permit completion of contracts after October 1 at prices higher then those set forth in the schedule. The defense effort has placed an increasing burden upon the country's waste paper supply-a burden made greater because the war has shut off the channels of trnde through which word pulp was imported. Waste paper is a basic raw material in the manufacture of containers for many types of civilian goods and war materials. It is anticipated that the supply situation will be relieved shorthly by the national waste paper conservation program and by the usual seasonal pick-up in col- lections during the fall months. For several months, CPA has attempted, through individual voluntary price agree ments, to prevent unwarranted price increases. These voluntary agreements will con- tinue in force until the effective date of the schedule. "The responsible declers and mills have evidenced an admirable willingness to cooperate," Mr. Henderson said. "This patriotic segment of the industry, however, has been unable to keep prices within those established by the agreements because of the large numbers of operators who have put high prices before national welfare, and have therefore attempted in every way and by every subterfuge to circumvent the price agreements." The maximum prices per short ton established for all grades of waste paper f.o.b. point of shipment to mill, whether loaded on car, truck or other means of conveyance, Regraded Unclassified - 2 - PM 1194 are as follows: No. 1 Mixed Paper $13.00 Super-Mixed Paper 14.00 No. 1 Baled News 15.00 Overissue News 17.00 Old Corrugated Containers 16.00 Old Kraft Corrugated Containers 27.00 New Corrugated Cuttings 18.00 Box Board Cuttings 14.50 White Blank News 33.00 Extra Manilas 37.00 New Mahila Envelope Cuttings 54.00 - No. 1 Hard White Shavings 50.00 1 Hard White Envelope Cuttings 60.00 1 No. 1 Soft White Shavings 43.00 I Fly Leaf Shavings 33.50 e No. 1 Heavy Books and Magazines 31.50 Mixed Books 20.50 o Overissue Magazines 33.50 M No. 1 Mixed or Colored Ledger 38.50 o No. 1.White Bedger 42.50 II No. 1 Assorted Kraft (old Kraft) 30.00 a New 100% Kraft Cuttings 52.00 New 100% Kraft Corrugated Cuttings 49.00 2 The highest qualities of the above-listed grades are defined in the schedule, C copy of which is attached. 1 The maximum prices take into account the baling and other costs borne by the waste paper producer, and no differentials or service charges may be added, Lower 1 prices than those set forth in the schedule may be charged, demanded, paid or B. +2 offered. P. While the schedule purports to cover all grades of waste paper sold east of M f Rocky Mountains, Mr. Henderson explained that in the event any claim is made that I grade has been omitted, OPA would accept an affidavit setting forth all relative data concerning the alleged omission from the person or persons making such a clais A The omission, if any, would be corrected if investigation showed that such action was justified. et o: Text of the schedule is attached. W: or W to 1, 7 & El 01 P Regraded Unclassified TITLE 32 - NATIONAL DEFENSE PM 1134 CHAPTER II - OFFICE OF PRICE ADMINISTRATION 109 Part 1347 - Paper and Paper Products Price Schedule No. 30 - Waste Paper Sold East of the Rocky Mountains The Office of Price Administration, being charged with the maintenance of price stability and the prevention of undue price rises and economic dialocations, has de- termined after an exhaustive investigation and after numerous conferences with repre sentatives of all branches of the trade, that the establishment of maximum prices for wastepaper is essential in order to accomplish these purposes and is in the interest of national defense and national welfare, and that the maximum prices set forth herein are fair and reasonable. The defense effort has placed an increasing burden upon the wastepaper supply since it is a basic raw material in the manufacture of containers for food and manu- factured products. Additional demands upon the wastepaper supply are made by manu- facturers of almost all types of paper, the channels of trade through which wood pulp was imported having been shut off by the war, Inflationary price rises threat- en, and immediate action to prevent disastrous price spiraling is essential. For several months this Office has attempted to prevent unwarranted price in- creases through the medium of individual voluntary price agreements. The more re- sponsible dealers and mille have evidenced B willingness to cooperate. This segment of the industry has been unable to keep prices within those established by the Agre ments, however, because of certain operators who have put high prices before nation al welfare, and have attempted to circumvent the price agreements. This schedule is at present limited to sales and purchases of wastepaper Enet of the Rocky Mountains, since no inflationary price increases threaten the West Coast area, Accordingly, under the authority vested in me by Executive Order No. 8734, it is hereby directed that; 1347.1. Maximum Prices for Waste Paper. On and after October 1, 1941, regard- less of the terms of any contract of sale or purchase or other commitment, in the area last of the Rocky Mountains no person shall sell, offer to sell, deliver or transfer any grade of waste paper, and no person shall buy, offer to buy, or accept delivery of any grade of waste paper at prices higher then the maximum prices set forth in Appendix A hereof, incorporated herein ae Section 1347.10,' Sections 1347.1 to 1347.10, inclusive, issued pursuant to the authority contained in Executive Order No. 6734. 1347.2 Loss than Maximum Prices - Lower prices than those set forth in Append: may, however, be charged, demanded, paid or offered." 1347.3 Evasion - The price limitations set forth in this Schedule shall not be evaded by direct or indirect methods in connection with a purchase, sale, delivery, or transfer of waste paper, alone or in conjunction with any other material, or by way of any commission, service, transportation or other charge, or discount, premium vise,' or other privilege, or by tying-agreement or other trade understanding, or other- 1347.4 Records - Every person making purchases or sales aggregating ton short tone or more of any or all grades of waste paper in any one month shall keep for inspection by the Office of Price Administration for 8. period of not less than one year, complete and accurate records of each purchase or sale of waste paper made during such month and each month thereafter, showing the date thereof, the name of the buyer or of the seller, the prices paid or received, and the quantity and grade or grades 80 purchased or mold, Such records shall amt forth separately the f.o.b. point of shipment price and the transportation charge.' Regraded Unclassified - 2 PM 1194 1347.5 Affirmation of Compliance - All persons who are required by Section 1347.4 to keep records, shall transmit, on or before November 10, 1941, and on or before the tenth day of each month thereafter, an affirmation of compliance on Form 130:1 containing a sworn statement that during the month for which the record is kept all purchases and sales were made at prices in compliance with this Schedule or with any exception or modification thereof. Copies of Form 130:1 can be procured from the Office of Price Administration or, provided no change is made in the style and content of it and that it is reproduced on 8" I 104" peper, may be prepared by persons required to submit affirmation of compliance hercunder. 1347.63 Enforcement - In the event of refusal or failure to abide by the price limitations, record requirements, or other provisions contained in this Schec- ule, the Office of Price Administration will make every effort to assure (a) that the Congress and the public are fully informed thereof, (b) that the powers of Government, both state and federal, are fully exerted in order to protect the public Interest and the interests of those persons who comply with this Schedule, (c) that full advantage will be taken of the cooperation of the various political subdivis- ions of state, county, and local governments through calling to the attention of the proper authorities failures to comply with this Schedule which may be regarded as grounds for the revocation of licenses and permits; and (a) that the procure- ment services of the Government are requested to refrain from selling to or purchas- ing from those persons who fail to comply with this Schedule. Persons who have evidence of the offer, receipt, demand or payment of prices higher than the naxi- mum prices, or of any ovasion or effort to evade the provisions hereof, or of spect- lation or manipulation of prices of any or all of the grades of waste paper or of the hoarding or accumulation of unnecessary inventories thereof, are urged and re- quested to communicate with the Office of Price Administration. 1347.7 Modification of the Price Schedule - Persons complaining of hardship or inequity in the operation of this Schedule may apply to the Office of Price ,dministration for approval of any modification thereof or exception therefron. 1347.8 Definitions - When used in this Schedule, or any modifications or er- options thereto, the term (a) "Porson" includes an individual, partnership, association, corporation, or other business entity. (b) "Wastopaper" includes all kinds, and grades and types of wanto- aper. (c) "Consumer" means 3. parchaser, for its own consumption, of vaste- per, i.e. paper nill, paperhoard mill, roofing mill, etc. (a) "Producer" means any person who produces, collects, sorts, packs, fors for sale, sells, or exchanges any wastepaper. 1347.9 Effective Date - This Schedule shall become effective on October 1, 1941.* 1347.10 Appendix A MAXIMUM PRICES FOR WASTE PAPER All prices given below are per short ton, f.o.b. point of shipment GRADES MAXIMUM PRICES No. 1 Mixed Paper $13.00 Super-Mixed Paper 4 14.00 No. 1 Baled News 5 15.00 Overissue News 6 17.00 Old Corrugated Containers 7/ 16.50 Old Kraft Corrugated Containers 27.00 New Corrugated Cuttings 9 18.00 Regraded Unclassified 110 as PM 1194 Box Board Cuttings 10/ 14.60 White Blank Here 11 33.00 Extra Manilas 12/ 37.00 New Manila Envelope Custings 13/ 54.00 No. 1 Hard White Shavings 14/ 50.00 Hard White Envelope Cuttings 15/ 60.00 No. 1 Soft White Shovings 16 43.00 Fly Leave Shavings w 33.50 No. 1 Heavy Books and Magazines 18/ 31.50 Mixed Books 19/ 20.50 Overissue Magazines 20/ 33.50 No. 1 Mixed Ledger (Colored Ledger) 21/ 38.50 No, 1 White Ledger 22/ 42.50 No. 1 Assorted Kraft (Old Eraft) 23/ 30.00 New 100% Kraft Cuttings 24/ 52.00 New 100% Kraft Corrugated Cuttings 25/ 49.00 All prices established by this Schedule shall be for wante paper loaded on freight care, trucke or other means of conveyance at the point of shipment. The point of shipment is the point from which the waste paper is to be shipped to the consumer. All prices Listed represent the maximum prices for the respective grades of waste paper, the highest qualities of which ate definedin.the footnotes below. Other qualities of waste peter of the grades defined must be sold at or below the maximum prices established. The prices established in this Schedule ere the maximum prices to be charged paid, and no differentials or service charges are to be added. In the event that hardship will be inflicted OA any Derson by virtue of the removal of differentials that were in effect prior to January 1, 1941. application for exception should be made in accordance with Section 1347,7 hereof. 3/1 "No, 1 Mixed Paper" shall consist of clean dry waste paper, free from objection able papers and foreign materials; and packed in large machine compressed bales weighing 650 pounds or more, 4/ "Super-Mixed Paper" shall consist of No. 1 mixed paper which has been screened and dusted, and is composed of hard, bright stock. The process of screening and dusting shall be performed mechanically by A "tumbler" or similar device. Must be packed in large machine compressed bales weighing 650 pounds or more. 5/ "No. 1 Baled News" shall consiet of clean, dry, sorted and repacked newspapers free from foreign materials. objectionable end mixed papers and packed in large machine compressed bales weighing 650 pounds or more. 6/ "Overissue News" shall consist of all-white. large size, over-run newspapers from a newspaper office (not over 60 days old) and may be packed in securely tied bundles, small or large bales. 71 "Old Currugated Containers" shall consist of used corrugated or solid fibre col tainers free from foreign materials, mixed and objectionable papers and packed in large machine compressed bales weighing 650 pounds or more, e/ "Old Kraft Corrugated Containers" shall consist of used containers of 90% to 100% kraft content, clean and dry, free from foreign materials, objectionable and mixed paper and packed in large machine compressed bales weighing 650 pounds or more. If kraft content is less then 90%, the packing shall be designated "Old Corrugated Containers". Regraded Unclassified - 4 - PM 1194 "New Corrugated Cuttings" shall consist of new corrugated cuttings of Jute and kreft from & corrugating plant, or solid fibre or corrugating container converting plent, and shall be free from foreign materials, mixed and objectionable papers, May be packed in small or large bales, 10/ "Boxboard Outtings" shall consist of clean, dry cuttings from paperboard convert ing plants or other users of paperbuard, free from objectionable and mixed papers and foreign materials, packed in large machine compressed bales weighing 650 pounds or more. 11/ "White Blank News" shall consist of clean, dry, and white news cuttings or sheets, free from mixed and objectionable papers and foreign materials, and packed in large machine compressed bales weighing 650 pounds or more. 12/ "Extra Manilas" shall consist of clean, dry, unprinted manila paper of uniform natural manila color, free from yellow news blanks, paper towels, canary colored blanks, goldenred and bogus stock, as well as mixed and objectionable papers end foreign materials, and packed in large machine compressed bales weighing 650 pounds or more. 13/ "Nev Manila Envelope Cuttings" shall consist of clean, dry, new manila cutting or sheets from envelope factories, free from printed stock of any kind, mixed or objectionable papers and foreign materials, and may be packed in small or large bales. 14/ "No. 1 Hard White Shavings" shall consist of clean, dry, bond or writing paper shavings, free from colors and tints, parchment end groundwood, and from mixed or objectionable papers and foreign materials. Must be packed in large machine compressed bales veighing 650 pounds or more, 15/ "Hard White Envelope Cuttings" shall consist of clean, dry, bond or writing pener shavings, free from all colors and tints, parchment and groundwood and from mixed or objectionable papers and foreign materials. May be packed in small or large bales or in securely tied packages. 16/ "No. 1 Soft White Shavings" shall consist of clean, dry, unprinted, all-white brokeroor chavince, free from all colors and tints, parchment, and groundwood as WORL 16 mixed and objectionable papers, and foreign materials, and containing not moze than 20% coated white paper stock. Must be packed in large machine com- pressed bales weighing 650 pounds or more. 17/ "My Leaf Shavings" shall consist of the trim of books containing some printed material, free from groundwood, mixed and objectionable papers end foreign materials Mast be packed in large machine compressed bales weighing 650 pounds or more. 1A/ "No. l' Eeavy Books and Magazines" shall consist of dry, clean books and magaries occuping not over 2 percent growndrood papers and 2 percent packing outthrew (including outside Vropara, camping vires and twine), entirely free from shaving and Unimpled stock, heavily-Liked, desply-colored, gilt, aluminum and varnished COTER stock, lithographed, parahment, groundwood, rotogravure and cover papers, as well es mixed end objectionable papers and foreign materials. Must be packed in large machine compressed bales weighing 650 pounds or more. 12/ "Mixed Books" shall consist of dry. clean books and magazines containing not over 25 percent total outthrow, including kraft, groundwood and outside packing. and shall be free from mixed and objectionable papers and foreign materials. May be packed in small or large bales, Regraded Unclassified - 5 - rM 1194 111 20/ "Overissue Magazines" shall consist of clean, dry. fresh, overrun and misprint unsold magazines and books. May be packed in small or large bales or securely tied packages. 21/ "No. 1 Mixed Ledger (Colored Ledger)" shall consist of white and light-colored ledger and writing waste containing not more than 2 percent groundwood papers and 2 percent packing outthrow, free from mixed and objectionable papers, and foreign na- terials. Must be packed in large machine compressed baled weighing 650 pounds or more. 22/ "No. 1 White Ledger" shall consist of white ledger and writing wante containing not more than 2 percent groundwood papers and 2 percent packing outthrow, free from mixed and objectionable papers and foreign materials, Most be packed in large machine compressed bales weighing 650 pounds or more, 23/ "No. 1 Assorted Kraft (old Kraft)" shall consist of brown kraft waste free from corrugated waste of any kind, mixed and objectionable papers and foreign materials, Must be packed in large machine compressed balesweighing 650 pounds or more. 24) "New 100% Kraft Cuttings" shall consist of 100 percent kreft trimmings, cutting or shavings from strictly new kraft paper stock, and must be free of fibre papers, screening pulp and colored paper of any kind, objectionable and mired papers and foreign materials. May be packed in small or large bales. 25/ "New 100% Kraft Corrugated Cuttings" shall consist of cuttings, trimmings or shavings from new 100 percent kraft corrugated stock, and must be free of fibre papers, screening pulp, and colored paper of any kind, objectionable and mixed pape and foreign materials. Must be packed in small or large bales. When used in these definitions: "Objectionable papers" include carbon, waxed, parafined, oil-treated, greased, glazed, parchment, asphalt, tar, wall, friction board, book-covers, cloth-bound, heavy cores, tympan, pressboard, used billboard stock, paper-wrapped excelsior, felt furniture pads, paper twine, uncut printers' rolls, and paper strings: and "Foreign materials" include every non-paper substance that cannot be manufact- ured into paper, including, but in no web limiting the generality of the above: cellophane, rags, rubbers, strings, vulcanized fibre, metals, and rubbish of all kinds." Issued this 18th day of September, 1941. (Sed )Leon Henderson Leon Henderson Administrator CERTIFIED TO BE A TRUE COPY OF THE ORIGINAL (Sed) John E. Ramm John E, Hemm, Deputy Administrator Regraded Unclassified 112 OFFICE FOR EMERGENCY MANAGEMENT OFFICE 03' PRICE administration For Immediate Release September 20, 1941 PM 1201 Text of the formal order rovoking the anthracite coal price schedule follows: Part 1340 - Fuel Price Schedule No. 27 - Anthracite Order of Rovocation A Price Schedule fixing maximum prices for anthracite coal f.c.b. mine vas issued September 11, 1941, because the necessary date to justify a pro- posed ircrease to take effect on September 15, 1941, had not boen presented to the Cffice of Price Administration. The information previously withheld has now been submitted. Accordingly, under the authority vested in me by Executive Order 8734, It is directed that: 1340.71 to 1340.79. inclusive, Price Schedule No. 27, is hereby revoked. Issued this 18th day of September, 1941. This order of revocation is effective September 18, 1941. (SEd.) Leon Henderson Leon Ecnderson Administrator Certified to be a True Copy of the Original (Sgi.) John 3, Earn, John 2. Enter, Deputy desinistrator Regraded Unclassified OFFICE FOR EMERGENCY MANAGEMENT 113 Office of Price Administration For Release A.M. September 20, 1941 PM 1202 Permission to liquidate futures contracts vas today granted to persons who established their long or short positions prior to August 14, 1941, the date on which the raw sugar price schedule became effective, in & supplement to the schedule issued by Leon Henderson, administrator, Office of Price Administration. This action also validates liquidation of such contracts which has already occurred. One of the effects of this supplement will be to enable such holders of September futures contracts to make or take delivery of actual sugar without violating the schedule. The exception also applies to contracts for other delivery months entered into prior to August 14. This will give holders of futures contracts the same opportunity to deliver or take sugar at prices above the ceiling price, where their position was established before the effective date of the schedule, that was extended to persons who entered into forward delivery contracts for actual sugar prior to the effective date of the schedule. Regraded Unclassified 114 PM 1202 TITLE 32 - NATIONAL DEFENSE CHAPTER XI - OFFICE OF PRICE ADMINISTRATION Part 1334 - Sugar Supplement to Price Schedule No. 16 - Raw Cane Sugars 1334.11 Provision for liquidation of futures positions established prior to August 14, 1941. Liquidation of a position or positions, long or short, established prior to August 14, 1941, in No. 3 contract on the New York Coffee and Sugar Exchange, Inc., which has been or which shall be made, is hereby excepted from the operation of the provisions of Price Schodule No. 16. (Executive Order No. 8734) Issued this 19th day of September, 1941 Leon Henderson Administrator Certified to be a true copy of the original John E. Hamm Deputy Administrator Regraded Unclassified OFFICE FOR EMERGENCY MANAGEMENT 115 OFFICE OF PRICE ALMINISTRATION For Tuesday AM's PM 1216 September 23, 1941 Amondments to bring about a parity among consumers who purchase iron and steel scrap in the Cincinnati market and to create an incentive for the sale of scrap rail and re-rolling rail by mines and logging roads have been medo to the iron and steel scrap schedule, the Office of Price Administration announced today. The first change provides B. shipping point price within the Cincinnati basing point of 80 cents a ton below the basing point price for all grades of scrap excepting six casting grades. This revision WAB made because of the creat variation in switching charges within the Cincinnati basing point. It does not detract from the advantages obtained by local steel mills from the previous amendment establishing Cincinnati as B. basing point, but does remove certain inequalities that resulted to those consumers with plants outside the basing point who have historically purchased scrap in the Cincinnati market, The other revision provides an attractive price at which mines and logging camps can sell scrap rail and rails for re-rolling. It is stipulated that the maximum shipping point prices for this type of scrap shall be the ceiling prices set in the schedule, (which apply specifically to scrap of railroad origin), "except that the maximum shipping point price need in no case be less than $13.50 per gross ton for scrap rail and $15.00 per gross ton for rails for re-rolling." In addition, the formalities generally required from railroads upon the sale of scrap rail or re-rolling rail are eliminated when the seller is a mine or logging road, Text of the amendments is attached. 117 TITLE 32 - NATIONAL DEFENSE PM 1231 CHAPTER XI - OFFICE OF PRICE ADMINISTRATION Part 1312 - Lumber and Lumber Products Amendment to Price Schedule No. 13 - Douglas Fir Peeler Loga and Douglas Fir Plywood $1312.2 of Price Schedule No. 13 is hereby amended to read as follows: 1312.2 Karimum Prices Established for Douglas Fir Peeler Logs. From September 24, 1941 until October 24, 1941. regardless of the terms of any contract of sale or purchase or other commitment, no sale or delivery, or offer of sale or delivery, of Douglas fir peeler logs shall be made to manufacturers of Douglas fir plywood at a price in excess of that received by the seller for a sale or delivery of Douglas fir peeler loga of the samo grade and quality from January 1, 1941 to August 1, 1941 inclusive. In the event that no sale or delivery of the same grade or quality was made by such seller during such period, the naximum price shall be the market price for the same grade and quality in the district on August 1, 1941. In the event that a. manufacturer of plywood has paid a certain price, within this ceiling, to one of his 10g suppliers, nothing berein shall prevent such manufacturer end any other log supplier from consummating a sale between them of logs of the same grade and qualityvin the same district at this price. The word "district" shall mean the die- drict EB commonly recognized on August 1, 1941.* *Issued pursuant to the authority contained in Executive Order No. 8734. Issued this 24th day of September, 1941. Effective September 24, 1941, Leon Henderson Administrator CERTIFIED TO BE A TRUE COPY OF The ORIGINAL John E. Hamm, Deputy Administrator Regraded Unclassified 118 2009 ell am go ACTD givel coosequence al expanded the ns- # activity induced by for all has nen therely in past are program the demand the is - - Acetta mild is esamiled in of material. or by was of any commission. Schedule may apply to Live Ciffice of Price service, transportation. or other charge, Administration for approval of any modi- candfacture of & JATER number and products such as rayon yarn, or discount, premium, or other privilege, fication thereof or exception therefrom.* is varaishes and plastics, transparent wrapping white ma- or by tying-agreement or other trade un- 1335.200 Definitions. When used in derstanding. or otherwise." this Schedule, the term: The prices of all scotale solvente 1335.204 Records and reports. Every (a) "Person" means An individual, MMV primarily upon the price of person making any purchase or mie of partnership, association, corporation, or acette acid in quantities of 3,000 pounda other business eality, grid. production of acetic acid NO- OF more shall keep for inspection by the (b) "Acetic seld" means the various for the talk of acetic acid (00- Office of Price Administration for a pe- grades of acetic acid listed to Appendix A by this country. Most of the re- riod of not less than one year. complete hereof.* add. commonly referred to M "Dat- and accurate records of each such pur- anlic sold", is produced by wood chase or sale, showing the date thereof. 1 1335.209 Effective date of the sched- at . out often in excess of the name and address of the buyer or the ule. This Schedule shall become effec- of anthetic production. The seller, the prices paid or received. and We September 29, 1041.* or (not of synthelle glacial acetic the speeifications and quantity includ- 1535.210 Appendir A, maximum the chard quarter of 1941 was ap- Ing the sise of the containers, of the prices for acetic acid-(a) Acetic neld 25 higher than in the Mc- acetic seid purchased or sold. in tank cara. The following masimum carier. A further increase to 6% Persons affected by this Schedule shall prices are estabilabed for glacial acetic all per pound has recently been an- submit such reports to the Office of Price seld (09.5% or over). and for weaker (or the fourth quarter. The Administration as it may. from time to scette acid of commercial grade in terms il or price of natural acette acid in time, require.* of 100% acid content: I 1335.205 Afirmations of compliance. Per hus- of 100% acid content has increased dred pounda (sorné months from 5 cents to 1½ on OF before October 10, 1941, and on or delivered M DI pound and higher. Pricess of before the 10th day of each month there- Wood origin 97.25 mades of acetic acid generally re- after, every person who, during the pre- Other origin 4.26 or tank car prices for synthetic coding calendar month, has made any Freight in EXCORD of ou cente per hundred and natural Acetic seld in terms sale of acetic acid to quantities of 3,000 pounds 047 DE charged to buyer. 100% acid content and have increased pounda or more, whether for immediate (b) Acelic ucid in containers, carload spondingly or future delivery, shall submit to the lots. (1) The following maximum prices The Office of Price Administration has Office of Price Administration, on effir- f. o. D. producers' shipping points, are aforred with producers of both eye- mation of compliance on Form 131.1 established for concentrations of tech active and and natural Acetic acid. containing a sworn statement that during nical and pure acetic acid. of any origin reasons have been ad- such month all such sales were made at for earload quantities, In barrels or and for increasing the prices of syn- prices in compliance with this Schedule drums: de aotic acid and natural acetic acid or with any exception or modification Per Paid 64 centa and 7½ cents per thereof. Copies of Form 131.1 can be Ausdred and respectively for tank cars. In- procured from the Office of Price Ad- Technical:* pounds 28 percent $3.10 (D) such prices would, therefore, ministration, or, provided that no change os persent 8.18 inflationary in character. Such In- La made in the atyle and content of the 70 percent 0.19 (Nonary movements in the prices of Form and that It is reproduced on es percent 8.9 B , 10%" paper, they may be prepared B4 percent 7.30 No chemicals would tend to weaken the Glacial 0.45 Ornan effort by causing dislocations, by persons required to submit affirma- Pure:³ to spiraling and profisering. tions of complience hereunder.* 30 percent L21 Accordingly, under the authority vested I 1235.200 Inforcement. In the 36 percent 4.61 so percent 7.17 - by Executive Order No. 8734, it event of refusal or failure to abide by the 80 persont 8.70 berefity directed that: price limitations, report requirements, or United States Pharmacopoela 10.95 other provisions of this Schedule, or In Chemically Pure 19.50 # 1338 201 Mazimum prices for acetto the event of any evasion or attempt to Specifically designated percentage include vd, On and after September 29, 1941, evade the price limitations or other pro- all approximations thereof. of the terms of any contract of visions of this Schedule, the Office of (2) Maximum prices, for carload or purchase, or other commitment, Price Administration will make every BOTHOO AND will, offer to sell, deliver quantities, in carboya and cases, are do- transfer write acid in quantities of effort to assure (a) that the Congress termined by adding . differential of so 00 DOUNTS or more, and no person and the public are fully informed thereof, cents per hundred lbs, to the maximum will buy, offer to Duy, OF accept delivery (b) that the powers of the Government prices established in subparagraph (1) of scount acid in quantities of 3,000 are fully exerted in order to protect the Mmds or more from any person, at public interest and the interests of those this paragraph (b). persons who comply with this Schedule. (e) Acetic acid in containers. less toos Neber than the maximum prices and (e) that the procurement services of curload lots. Mazimum prices, for lesse forth in Appeodix A, Incorporated as $ 1338.210 - the Government are requested to refrain then carleed quantities. in the containers from purchasing acetic acid from those listed below. are determined for adding 711 1990.201 to include, Issued the suthority envisibed in Enecu- persons who fail to conform to this the following differentials le the mad- Control No 4 1917. Schedule. Persons who have evidence mum prices established in subvarsarem of the offer, receipt, demand or payment Les than maximum prices. I of paragraph (b) hereof. of prices higher than the maximum than Unite set forth in Ap- Per hundred THEIR A may the charged, demanded, prices, or of any evasion or offort to evade pounds - offered. the provisions hereof, of of speculation. Por Barvets or resume. - as cente or manipulation of prices of acetic acid Fur Cartioys and cases, Inse cartinal TO oriste Mins - forth in This Schedule shall Existion. The price Tim- or of the hoarding or accumulating of - whecher by direct or Indi- unnecerary inventories thereof, are Issued this 24th day of September 1041. restaude in connection with a our- unred la communicate with the Office of Mind, make delivery, or transfer. of ncetic Price Administration.* Administrator or in connection with a purchase 1335,207 Modification of the sched- nice. Persons complaining of hardship IF n. Due 41-7135: Fued. September 24, 1941, Millery or transfer, of any other or inequity in the operation of this 11.00 a. m.) Regraded Unclassified OFFICE FOR EMERGENCY MANAGEMENT 119 OFFICE OF PRICE ADMINISTRATION you Imediate Release September 25, 1941 PM 1234 A reissue of Price Schedule No. 1, second-hand machine tools, 1s being made because supplies have become exhausted, the Office of Price Administration announced today. Originally promulgated on February 17, 1941, when Leon Henderson, now OPA Administrator, was head of the Price Stabilization Division of the National Defense Advisory Commission, the pioneer price schedule corrected profiteering in second-hand machine tools. This had grown to serious proportions under stimulus of heavy demand for our own defense program and for shipment to England. "Cases have been brought to the attention of the Price Stabilization Division where machine tools are being priced at twice the original cost when purchased thirty or more years ago," said the announcement accompanying the original sche- dule. Speculative activity subsided with the issuance of the ceiling and orderly trading at reasonable price levels has prevailed ever since. Reissue of the schedule takes the form of an amendment which substitutes the name "Office of Price Administration" for the title "Price Stabilization Division" throughout. A definition of rebuilt and guaranteed used machine tools has been added in line with previous interpretations of the schedule. A supplement issued May 7. 1941, designating March 1, 1941, as the base date for computing prices of second-hand machine tools, is incorporated in the body of the amended schedule. One other minor change is made in the text for purposes of clarity. Regraded Unclassified TITLE 32 - NATIONAL DEFENSE PM1234 CHAPTER XI - OFFICE OF PRICE AIMINISTRATION 120 Part 1301 - MACHINE TOOLS PRICE SCHEDULE NO, 1 e Second-Hand Machine Tools Price Schedule No. 1 - Second-Hand Machine Tools issued February 17, 1941 is amended to read as follows: WHEREAS, the Office of Price Administration is charged with functions related to the maintenance of price stability and the prevention of undue price rises and price dislocations: and WHEREAS, in the second-hand machine tool trade, prices have risen in such fashion and to such extent since May, 1940, B.G compared with other basic commodities, and in particular as compared with new machine tools, as to result in price instability and dislocations injurious to the national defense: and WHEREAS, such price increases are not justified but represent, on the part of a few, the result of speculative activity, and withholding of sales and offers to sell in the prospect of further unwarranted price increases, amounting to profiteering and hoarding: and WHEREAS, the absence of any maximun price standards make it difficult and in some cases impossible for the trade voluntarily to cooperate with the Government in maintaining price stability and in preventing excessive and specula- tive price increases; and WHERDAS, the establishment of such standards by the Government 1s neces- eary to facilitate such cooperation, and to prevent the kind of price policy which leads to a weakening of the defense effort through disastrous inflation, undue burdens upon the Government, economic dislocations, price spiraling, and profiteer- Anc. and the octablishment of such standards is otherwise necessary in the public interest and in the interest of national defense; and WHEREAS, on the basis of information secured by independent investiga- tion by this Office and by the Office of Production Management and information furnished through the cooperation of the trade, I find that the maximum prices net forth in Appendix A, incorporated herein as section 1301.7, constitute reason- able limitations on prices for second-hand machine tools. NOW, THEREFORE, IN ORDER mo FACILITATE COOPERATION WITH THE GOVERNMENT IN MAINTAINING PRICE STABILITY AND IN preventing EXCESSIVE AND SPECULA- TIVE PRICE INCREASES INJURIOUS TO THE DEFENSE PROGRAM AND TO THE PUBLIC INTEREST AND WELFARE, IT IS. DIRECTED THAT: 1301.1 Maximum Prices for Second-Hand Machine Tools. On and after March 1, 1941. prices for second-hand machine tools. ex- clusive of extras, shall not exceed the prices set forth in Appendix A, incorpor- sted berein as Section 1301.7 of this Schedule. No person shall sell, offer to sell, deliver or transfer, and no person shall buy, offer to buy, or accept deliv- ery of second-haild machine tools at prices higher than those set forth in Appendix A. Lower prices may, however, be charged, demanded, paid, or offered. Regraded Unclassified PK 1234 The price limitation set forth in Appendix 1 shall not be craded by additional or extra charges for repair or reconditioning, commissions, or otherwise." *1301.1 to 1301.7, inclusive, issued pursuant to the authority contained in Executive Order No. 8734. 1301.2 Records and Reports. Zach dealer in second-hand machine tools shall file with the Office of Price Administration & report on each floor-type second-hand machine tool in his stock or purchased through him as agent, and & report on each second-hand machine tool sold or otherwise disposed of, by him or through him as agent. (a) All reports on second-hand machine tools met be más on Form 100:1, copies of which may be had upon request to this Office. Form 100:1 may be reproduced by the dealer, of printed on the reverse side of regular stock sheets, provided that no change is made in the style and content of the report and that the report 18 on 8g by 11 inch paper. (b) Dealers shall file reports, not later than March 25, 1941, for each second-hand machine tool in stock as of March 15, 1941. & report for each second-hand machine tool added to stock after March 15, 1941, shall be filed not more than one week after the machine tool 10 purchased or otherwise acquired. Failure to object to an offering price as disclosed by - report does not constitute approval of the price by this Office. (c) Reports for each second-hand machine tool sold or otherwise dis- posed of by or through & dealer after March 15, 1941, shall be filed by the dealer within one week after the transaction. Every report of sale or other disposition shall state the name and address of the purchaser. This information need be noted under item 17, Remarks, on only one of the sales reports. Requests for copies of invoices may be made by this Office at any time. (d) When a second-hand machine tool is sold or otherwise disposed of within one week after acquisition and before the report of inventory or addition has been filed, such report of inventory or addition shall not be required. In such case, however, the report of sale or other disposition shall note that no previous report on the machine tool has been filed. (e) For the purpose of reporting sales, the receipt of AD order shall be reported as a sale, (If the order is later canceled, this Office is to be ad- vised forthwith and the machine tool reported as added to inventory.) (f) When & machine tool is disposed of by lease, or otherwise than by sale, a full statement of the transaction shall be made on the report. (g) Inasmuch as prices, including commissions. my not exceed the coiling prices, all offering or sale prices quoted in the report shall include commissions to be charged, or which have been charged, respectively. (h) Where a deal er has acted as purchasing agent, he shall make a re- port on the second-hand machine tool as if it had been purchased and immediately sold by him (see clause (a) above). and shall report the amount paid by the pur- chaser, including any commission paid to him as purchasing agent. (1) Dealers shall assign a separate inventory number to each second- hand machine tool handled by them and shall use this number in making reports Regraded Unclassified - 3 - PM 1234 121 hereunder. If & machine tool is held in joint ownership, the inventory report shall be made by the denl er who has possession of the machine tool, or if none of the owners has possession of 1t, by the dealer in whose name the mechine tool VAR purchased. When the machine tool is sold, the dealer in whom name the sale is made shall report the sale, referring to the inventory number previously assigned to the machine tool. (j) All reporte shall be filed in duplicate, and signed by the dealer or by an officer of the dealer. (k) Complete records shall be preserved by dealers on all second-hand machine tools purchased, sold, or otherwise handled or dealt in after March 15, 1941. (1) Subject to the provisions of section 1301.5 below, all information filed or received nursuant to this Price Schedule No. 1 shall be treated as con- fidential, except that it may be transmitted to any other agency or department of the Government. (m) Extras may be defined as supplementary equipment furnished by the manufacturer at an added cost. Second-hand extras are subject to the same maximum price percentage that is applicable to the basic second-hand machine tool to which the extras are adned. All extras must be separately listed as required in Form 100:1.* 1301.3 Definitiors. When used in this Schedule: (a) The term "person" includes an individual, corporation, association, partnership, or other business entity; (b) The term "dealer" means B. person in the business of buying and selling second-hand machine tools as a principal or in the business of buying or selling such tools as an agent or broker: (c) The term "machine tool" includes all machines for the cutting, abrading, shaping, forming, and joining of metals; (d) The term "second-hand" refers to machine toole which have previous- ly been used or purchased for use; (e) The term "stock", referring to second-hand machine tools, includes tools which are owned by the dealer in question, or on which he has obtained an option, or for which he has secured a selling agency. (f) The term "rebuilt and guaranteed" applies only to 8. machine tool which (1) has been rebuilt or is in equivalent condition to 8. rebuilt machine tool and is invoiced as such (a rebuilt machine is one in which worn or missing parts have been replaced or reworked, and which has been tested under power 80 as to prove that it has a substantially equivalent performance to that of the machine when new); (2) has been tested under power so as to prove that it has & substantial- is equivalent performance to that of the machine when new; and (3) carries & bind+ 3 guaranty of satisfectory performance for 8. period of not less than 30 days ron date of shipment." 1301.4 Modification of the Schedule. Persons complaining of hardship or inequity in the operation of Unclassified PM 1234 Schedule may apply to the Office of Price Administration for approval of any modification thereof. 1301.5 Enforcement of the Schedule. In the event of refusal or failure to abide by the price limitations or other provisions contained in this Schedule, this Office will make every effort to assure (a) that the Congress and the public are fully informed of the instances of such profiteering or noncooperation; and (b) that the powers of the Government are fully exerted in order to protect the public interest in the maintenance of fair prices. Persons who have evidence of the demand or receipt of prices above the limitations set forth, or of speculation, manipulation of prices or hoarding are urged to communicate with the Office of Price Administration giving as complete description of the particular machine tools as may be practicable.' 1301.6 Effective Date of the Schedule. This Schedule shall become effective immediately. Regraded Unclassified PM 1234 APPENDIX A 122 Section 1301.7 MAXIMUM PRICES FOR SECOND-HAND MACHINE TOOLS (Exclusive of Extras) Maximum price Classification by - in terms of Der- centage of the March 1, 1941 Date of Manufacture Condition price of equivalent new machine tool 1. Jan. 1, 1936, and after (a) Rebuilt and guaranteed 95% (b) Others 75% 2, Jan. 1, 1930, to Dec. 31, (a) Rebuilt and guaranteed 90% 1935 (b) Others 70% 3. Jan. 1, 1920, to Dec. 31, (a) Rebuilt and guaranteed 80% 1929. (b) Others 60% 4. Before Jan. 1, 1920 (a) Rebuilt and guaranteed 70% (b) Others 50% Explanatory Information 1. The date of menufacture can be determined from the serial number stamped on the machine by the manufacturer. 2, As used above, the term "rebuilt and guaranteed" applies only to a machine tool which (1) has been rebuilt or is in equivalent condition to a rebuilt machine tool and is invoiced as such (a rebuilt machine is one in which worn or missing parts have been replaced or reworked, and which has been tested under power so as to prove that it has a substantially equivalent performance to that of the machine when new); (2) has been tested under power so as to prove that it has a substantially equivalent performance to that of the machine when new; and (3) carried B. binding guaranty of satisfactory performance for a period of not less than 30 days from date of shipment. 3, Machine tools formerly equipped with a cone drive are often now manu- factured with a geared head. In such cases determine the price of an equivalent new machine tool by deducting 20 percent from the March 1, 1941 price of the new geared-head machine tool. Issued this 17th day of February, 1941 Amended this 24th day of September, 1941 Leon Henderson Administrator Regraded Unclassified WAT NY a for 230189 wind - your If 276 0.00 to 9347203 see if doing to 20 Mill and vis 200 200 Cod net DER 2 42 insure (5) has Instructions Brief (b) :.00 sea of ,OSED of 100% is ** (e) 201 900 less (a) the 00 ,OSSI of too 24 (d) 18592 for institute both (a) 3881 of .200 076100 à fr and (a) interested Mark falses must mil 03 did to brab A and 7d entribe ade de outlives - of sin instructions b/w two 600 ,ovöda been et the Maiden - of of et Rd Hinder 2005 Agd (t) Sool asive drive AT BYD of exitions 4) /inure AS BL Das Load ontions indept dusa all Holds be TO aboutiges med one strid addente TO a end #1 teds OFFICE 62 de 08 nawa an DO this Deliby Deceed agest 855 (2) stree and ent 30 death d. them are to 50% of A and 52 call 889 productative to anthabe - Delairs (E) bria para 16 8286 most eyeb or dell net 30 Astima - von 00030 020 ordys exch a titly Active stort & TX# to 00179 add BORRO Home at (Band business 4 now We add 98 - odd must d'ashurg OK nd Loop sea ,1000 be sab 0216 1093 le the ave kis don't Regraded Unclassified OFFICE FOR ENERGENCY MAHAGEMENT 123 OFFICE OF PRICE ADMINISTRATION For Immediate Balease PM 1241 September 26, 1941 An experimental program designed to bring about quick delivery to steel mills and foundries of iron and steel NORTH scattered throughout areas of the United States remote from consuming centers was announced today by Leon Henderson, administrator, Office of Price Administration. Trade estimates of the quantities of "remote scrap" in Florida and the eight Western States effected by the program range from 500,000 to 2,500,000 tons. It is considered highly important to bring as much of this tonnege as possible to consum- ing points before winter weather conditions in the west make its collection diffi- cult. To accomplish its objective, the program allows considerably higher shipping point prices for "remote scrap" and permits consumers to pay greater transportation charges to bring "remote scrap" to their plants. Both of these measures are embodied in an amendment to the iron and steel scrap schedule. This amendment will expire on December 31, 1941. Specifically, the amendment sets a maximum shipping point price of $12.00 B ton for No. 2 heavy melting scrap in Florida and all states west of the Mississippi River, excepting California, Oregon and Washington. Price differentials above and below $13.00 for other grades of scrap will be those already established for St. Louis. The new shipping point prices are considerably higher than those set in the present schedule for scrap from the nine states. However, except for a few isolated cases, existing shipping point prices in other States west of the Mississippi are not affected. A separate section defines as "remote scrap" all kinds and grades of scrap, other than railroad scrap, having a shipping point and point of origin within the States of Florida, Oklahoma, Texas, Arizona, New Mexico, Nevada, Wyoming, Idaho, and Montana. It is stipulated that the maximum price of any grade of "remote scrap" delivered to the plant of a consumer may be $5.00 a ton above the top delivered price which he has heretofore been permitted to pay. By allowing steel milla and foundries to pay larger transportation costs, the amendment makes it possible for distant consuming plants to bring in "remote scrap" from the nine States affected. Heretofore, the maximum delivered price of scrap from these States has been the shipping point price fixed in the schedule, plus transportation costs to the nearest consuming plant, plus a further $1.00 a ton. This extra $1.00 allowance enables mills and foundries to "reach out" for scrop 'as may otherwise lie slightly beyond their "delivered price" zone. By increasing the extra allowance to $5.00 in the case of "remote scrap", OPA permits consuming plants to absorb $4.00 a ton more in transportation costs than the highest such charge allowed heretofore. Regraded Unclassified 2 PM 1241 In special situations, according to the amendment, consumers may pay even more than the $5.00 extra freight allowance, provided they apply for and obtain permissio to do BO in advance from the Office of Price Administration. Lengthy discussions with the Office of Production Management, the scrap trade, and steel mills and foundries preceded the decision of OPA to conduct the present test. Representatives of the scrap trade have long contended that a large tonnage of "remote scrap" would be brought into consuming channels were shipping point and delivered prices made sufficiently attractive. Ewo factors were considered in defining "remote scrap" areas. First, areas from which scrap is not now flowing to consuming points in sufficient volume and, second, areas in which more scrap accumulates than can be absorbed by nearby steel mills and foundries. California, Colorado, Oregon, Utah and Washington were excluded because each has & number of consuming mills within its borders. All deliveries against contracts made under the amendment must be completed by December 31, 1941. Purchasers of Premote scrap" are required to file, under oath, B. detailed report of each transaction within 10 days after purchase. Further, con- sumers are obliged to file with OPA certified copies of their bills of lading in- mediately upon delivery of any "remote scrap." Nothing in the amendment affects shipping point prices or delivered prices east of the Mitsissippi River, excepting in Southern Florida. Sellers in certain of the Western States net included in the "remote scrap" areas still will be able to dis- pass of their scrap in nearby markets within existing ceiling prices. Text of the amendment is attached. Regraded Unclassified TITLE 32 - IONAL PM 1241 CHAPTER XI CYFICE OF 28103 ADMISISTRATION 124 Part 1304 - Iron and Steel Screp Amendment of Price Schedule No. 4 - Iron and Steel Scrap 1304,16 Appandix , MAXIMUM PRIORS FOR their SCRAP OTHER THAN RAIL ROAD SCRAP, of Price Schedule No. 4 18 hereby amended: 1. By adding after Subparagraph, 3 in Section (b) of Paragraph II thereof the following Subparagraph 4t #4. In the State of Morida And in all states west of the Mississippi River. excepting Washington, Oregon, and California, whenever the Shipping Point Price of No. 2 Heavy Melting Steel Scrap, &B computed above falls below $12.00 per gross ton at any Shipping Point, the maximum Shipping Point Price thereof at such point shall be $12.00, and the maximum Ship- ping Point Prices for other grades of scrap at such point shall be com- puted by applying the price differentials established in Paragraph I hereof for St. Louis, Missouri." 2. By striking out, at the end of Paragraph III, the words, "to the consumer's plant.", and inserting in place thereof the following worder "to the COD- sumer's plant, except as providedin:Paregraph VI horein." 3, Paragraph VI is amended to read as follows: "51. REMOTE SCRAP (a) Definitions. When used in this Paragraph: 1. Remote Scrap means all the kinds and grades of iron and steel scrap referred to in Appendix A and having a Shipping Point and B. point of origin within the States of Montana, Idaho, Wyoming, Nevada, Arisona, New Mexico, Texas, Oklahoma, or Florida. 2. The Shipping Point of Remote Scrap is the point from which Remote Scrap is to be shipped, whether to consumer, dealer, broker or other person or persons. (b) Maximum Shipping Point Price of Remote Scrap. The maximum Shipping Point Price of Remote Sorap shall be $12.00 for No. a Heavy Melting Steel Scrap and, for other grades of scrap, the maximum Shipping Point Price shall be computed by applying to the price of $12.00 for No. 2 Heavy Melting Steel Screp the trice differentials established in Para- graph I hereof for St. Louis. (c) Maximum Delivered Price of Remote Scran. The maximum price of Remote Scrap delivered to 8. consumer wherever located shall be the Shipping Point Price plus actual transportation charges from the Shipping Point to the consumer's plant as provided in Paragraph III above, except that, whenever necessary to absorb transportation charges, the maximum delivered price may exceed the raximum delivered price set forth in Paragraph III above by a maximum of $4.00. Thus the maximum delivered price for Remote Scrap shall be $5.00 above the prices set forth in Paragraph I above, for the Basing Point nearest, in terms of established transportation charges, to the consumer's plant. The consumer, however may not exceed the maximum delivered price provided in Paragraph III Regraded Unclassified - 2 PM 1241 above unless he conforms to the reporting requirements of Subparagraph 1. below. 1. No sales or purchases of Remote Scrap may be completed under the provisions of this paragraph unless the consumer of such scrap shall file, with the Office of Price Administration, Washington, D. C., (1) within 10 days following the purchase thereof, a fully detailed statement under oath setting forth the name and address of the seller, the point of shipment of the scrap, the grade, quantity and price at Shipping Point, delivery price, the name of the carrier, and the transportation charges from the Shipping Point to the consumer's plant, and (11) immediately upor delivery of such scrap, certified copies of all bills of lading covering the shipment of such scrap from the remota area to the consumer's plant. Only reports of purchases and bills of lading involving delivery of not loss than one car of scrap need be filed. 2. Where Remote Scrap cannot be delivered to the consumer within the maximum delivered prices of Remote Scrap established in Subperagraph (c) hereof, a consumer may apply to the Office of Price Administration, Washington, D. O., for permission to Absorb the additional transportation charges necessary to secure such scrap. Applications by consumers must be fully detailed, including an affidavit setting forth the point of shipment of the scrap, the grade, quantity and price at Shipping Point, proposed delivery prices, the name of the carrier, and the transportation charges from the Shipping Point to the consumer's plant. The application should be accompanied by an affidavit from the consumer setting forth its need for, and its willingness to accept, such scrap at the price quoted. Only applications for purchases which would involve actual de- livery of not less than one car of scrap per month from one Shipping Point to one consumer destination will be considered. The approval of the Office of Price Administration shall be obtained before consumers may absorb the additional transportation charge necessary to secure such scrap. (d) Termination of Remote Scrap Provisions. The provisions of Sub- paragraph 4 of Paragraph II and this Paragraph VI shall become incperative and terminated on and after December 31, 1941, Deliveries under contracts entered into pursuant to these provisions shall be completed on or before Docember 31, 1941." These amendments shall become effective on September 26, 1941. (Executive Order No. 8734) Issued this 25th day of September, 1941, Leon Henderson Administrator CERTIFIED TO BE A TRUE COPY OF THE ORIGINAL John E. Hamp, Deputy Administrator Regraded Unclassified OFFICE FOR EMERGENCY MANAGEMENT OFFICE OF PRICE ADMINISTRATION 125 For Wednesday AMV PM 1279 October 1, 1941 Extension of Price Schedule No. 14 - raw silk and silk waste - to bring under ceiling prices all types of raw silk now known to be in the United States was announced today by Leon Henderson, administrator, Office of Price Adminis- tration. The original schedule, issued August 2, 1941, covered the principal grades and established maximums at quotations that prevailed on July 21, 1941, before developments in the Far East sent prices soaring. On July 26, 1941, domestic silk stocks were frozen by order of the Division of Priorities, Office of Production Management, which followed this action by undertaking an inventory of silk holdings. Recently completed, the inventory disclosed that there were comparatively small amounts of numerous types and grades of raw eilk not covered by the original OPA price schedule. These are now included in a comprehensive amendment. Ceiling prices set for the newly added types and grades are based upon the prices already established for the leading types. Except for China silk, now broken down into grades, deniers and colors, no change has been made in the prices of these basic types. The maximums will apply to all sales of silk, including sales of silk now or hereafter released from OPM's freezing order and to all transfers of silk ordered by OPM to manufacturers holding defense contracts. It was announced that OPA does not contemplate making any provision for completion of existing contracts At prices above those established in the schedule, Regraded Unclassified SWS sorrie SOTTASTOJUINIA to EUITED ast X3 Iter responsible 708 : salad 10 - SIN zon NETO WAY - at .08 20223 TO national undats 167 12 our st avonx Volt ALLO out 20 18017 Ifa become satitio the with Yes with about V valied because N° support rabers Instruction X bereives DRI .S from beaund WATER and are as with 00 anottatory 38 equipien 12g CHE subject take nat the odd 52 optative add E N 916 LINGE ,88 do of deline at notife to state 10 38 TX Inst Desclosis bodeington legistro valo of the MOIC to IN Sea may to - of Void - still 470 off use and 4th SALUTY have 19287 India liver 759 992 200 Reging sollet Me an address TOT beard +10 TOTE 523 AZ above AMO HAT to 058 0102205 atat away % 8th is ISIA: services winder for of Theys IN nd: release dia of ben 18410 stiment north 20 x/ more gooding 00 NEO Rd TOT DM Dr coub 180 zure Bénauloans any 01 w 2 William waire to auttaize to noticiques Regraded Unclassified TITLE 32 - - NATIONAL DEFENSE CHAPTER XI - OFFICE OF PRICE ADMINISTRATION PM 1279 Part 1338 - Silk and Silk Products Section 1338.8 of Price Schedule No. 14 - Raw Silk and Silk Waste - 1s hereby amended to read as follows: Section 1338.8. APPENDIX A, MAXIMUM PRICES FOR RAW SILK AND SILK WASTE. Table I Prices Per Pound, lx Seller's Warehouse Type Grade M D C B A AA AAA Spée Spe- Spe- Spe Percentage cial cial cial gial ANA AAA AAA MA Evenness 73 78 81 83 85 87 90 92 93 94 95 Denier Japan, 9-11 $ 4.31 4.33 4.35 4.37 4.40 4.43 4.49 4.58 4.68 4.78 4.88 White, Ivory, 10-12 4.21 4.23 4.25 4.27 4.30 4.33 4.39 4.48 4.58 4.68 4.78 and Cream 11-13 4.06 4,08 4,10 4.12 4.15 4.18 4.24 4.33 4.43 4.53 4.63 12-14 3.11 3.13 3.15 3.17 3.20 3.23 3.29 3.38 3.48 3.58 3.68 13-15 and 14-16 3.06 3.08 3.10 3.12 3.15 3.18 3.24 3.33 3.43 3.53 3.63 15-17 to 18-20 inc. 3.04 3.06 3.08 3.10 3.13 3.16 3.22 3.31 3.41 3.51 3.61 20-22 to 30-32 inc. 3:00 3.02 3.04 3.07 3.10 3.15 3.20 3.29 3.39 3.49 3.59 40-44,41-43 and 42-44 3.00 3.02 3.04 3.07 3.10 3.30 3.35 3.44 3.54 3.64 3.74 60-66, 60-80, 62-64 and 83-85 3.00 3.02 3.04 3.07 3.10 3.15 3.20 3.29 3.39 3.49 3.59 Japan, Yellow; 20-22 to 30-32, inc. 2.95 2.97 2.99 3.02 3.05 3.10 3.15 3.24 3.34 3.44 3.54 Italian and Yellow and Persian White 1:40-444 2.95 2.97 2.99 3.02 3.05 3.25 3.30 3.39 3.49 3.59 3.69 1 Any Japan silk of undesignated grade, (1.0., percentage eveness) shall sell at a price not exceeding 10 cents per pound below the Grade 3. 73 per cent evenness, price for its denier, 126 Regraded Unclassified Table II PM 1279 Prices Per Pound, Ex Seller's Warehouse Grade G F E D C B A AA AAA Special Special Special Special Type Percentage AAA AAA AAA AAA Evenness 63 68 73 78 81 83 85 87 90 92 93 94 95 Denier China, White and cream, 1 9-11 $4.15 4.25 4.31 4.38 4.43 4.50 4.60 4.70 4.80 4.90 5.00 5.10 5.20 Re-Reeled 10-12 4.05 4.15 4.21 4.28 4.33 4.40 4.50 4.60 4.70 4.80 4.90 5.00 5.10 11-13 3.90 4.00 4.06 4.13 4.18 4.25 4.35 4.45 4.55 4.65 4.75 4.85 4.95 12-14 2.95 3.05 3.11 3.18 3.23 3.30 3.40 3.50 3.60 3.70 3.80 3.90 4.00 13-15 to 18-20 inc. 2.90 3.00 3.06 3.13 3.18 3.25 3.35 3.45 3.55 3.65 3.75 3.85 3.95 20-22 to 30-32 inc. 2.80 2.90 2.95 2.97 2.99 3.07 3.15 3.22 3.35 3.45 3.55 3.65 3.75 40-44. 41-43 and 42-44 2.80 2.90 2.95 2.97 2.99 3.07 3.15 3.37 3.50 3.60 3.70 3.80 3.90 China, Yellow 13-15 to 18-20 2.80 2.90 3.96 3.03 3.08 3.15 3.25 3.35 3.45 3.55 3.65 3.75 3.85 inc. Re-Reeled 20-22 to 30-32 inc. 2.73 2.83 2.88 2.90 2.92 3.00 3.08 3.15 3.28 3.38 3.48 3.58 3.68 Any Ohina silk of undesignated grade (1.e., percentage evenness) shall sell at a price not exceeding 75 cents per pound below the Grade G. 63 per cent evenness, price for its denier. The prices set forth are for re-reeled China silk. Ordinary reeled China silk shall sell at prices not exceeding 5 cente per pound bolow the prices for re-reeled China silk for equivalent colors, deniers, and qualities. Regraded Unclassified - 4 - PM 1279 Table III 127 Prices Per Pound, Ex Seller's Warehouse DOUPIONS, WHITE and YELLOW CANTON SILK Denier Maximum Price Denier Maximum Price 40-60 $ 2.00 14-16 $ 2.55 60-80 1,95 20-22 2.40 70-90 1,90 White Pearl 100-120 1,85 chop grade 2.70 100-150 1.85 TUSSAH SILK 200-250 2.00 Maximum Price TSATLEE SILK Ordinary $ 1.60 Bleached Maximum Price 1.70 Extra $ 2.40 Double extra 2.55 Table IV Imported Silk Waste Maximum Price Canton Open Waste $0.64 per lb., ex seller's warehouse China Long Waste .92 per lb., ex seller's warehouse Pierced Cocoons .85 per 1b., ex seller's warehouse Peignees 1.85 per lb., in bond, Warehouse, Port of New York, Table V Domestic Silk Waste Maximum Price Winders waste (untwisted) untinted $0.90 per lb., F.O.B. Shipping Point Tinted .85 per lb., F.O.B. Shipping Point Tram Waste (1-5 turns per inch) .80 per lb., F.O.B. Shipping Point Crepe or Grenadine waste (6 or more turns per inch) .22 per 1b., F.O.B. Shipping Point Cut skeins .95 per lb., F.O.B. Shipping Point (Executive Order No. 8734) Effective September 30, 1941. Issued this 30th day of September, 1941. Leon Henderson Certified to be a true Administrator Bapy of the original. Regraded Unclassified OFFICE FOR EMERGENCY MANAGEMENT 128 OFFICE OF PRICE ADMINISTRATION Imadiate release itaber 1, 1941 PM 1283 Ceiling prices for all grados of paperboard sold Zast of the Rocky Mountains, corresponding to those that have prevailed for several months under voluntary agree- cente with leading producers, are established in Price Schedule No. 32 announced today by Leon Henderson, administrator, office of Price Administration. The new schedule goes into effect on October 1, expiration date of the voluntary agreements and effective date of OPA's recent schedule of ceiling prices on waste- segur, principal raw material for the manufacture of paperboard. As stated in a preliminary announcement, maximum delivered prices for the three "25" Grades are the same as those specified in the voluntary agreements, that is, 45.00 a ton for chipboard, $60.00 a ton for single manila lined board and $75.00 ton for white patent costed news board. Differentials, up and down, in line with no expiring agreements, are established for the other types, depending upon weight, Tade and quality. All types of paperboard used in the manufacture of set-up paper boxes, folding :artons and shipping containers ere covered. Top prices for the shipping container TAGOO Dr. stated in dollars per 1,000 square feet, rather than in dollars per ton ero the grades used in set-up paper boxes and folding cartons. Paperboard is in greet demand for cartons and boxes to package defense mate- rials, food products end innumerable articles of consumer goods. Issuance of the present schedule climaxes = series of attemots by OPA to avert .nflationary price trends in this basic commodity by voluntary greements with paper. board ranufacturers and the wastepoper trade. On June 12, 1941, leading producers of paperboard agreed individually with OPA (then OPACS) to rezimun prices of $42.50 for chio board, $57.50 per ton for single senila lines board and $72.50 a ton for white patent costed news board, with appro- printo differentials for other grades. This acreement took into account wastepaper prices as of Way 29, 1941. Prices of instepapor rose rapidly thereafter and bal increased from $3.00 to $4.00 R to: on June 18, 1941, when they were stabilized by individual agreements between OPA and members of the trade. Because of thes higher prices for wastepaper, the voluntary agreements with the paperhoard manufacturers were revised upward by $2.50 per ton on August 4 and at the Fage time were extended to October 1, 1941, to correspond with a similar ex- tension of the Agreements on wastepaper prices. Desrite these attempts to stabilize both paperboard and wastepaper prices through voluntary action, the situation continued unsettled. There developed in rtain quarter of the wastevaper trade mothods designed to circument the maximum prices and in some instances, supplies were divorted or withheld from consuming allo that refused to violate their agreements with OPA. As a result, the distri- oution of wastepaper stocks became unbalanced and воде paperboard plants were forcef so duit down. Regraded Unclassified 129 - 2 - PM 1283 On September 4, Mr. Henderson announced that it no longer was practicable continue the attempt at voluntary control of wastepaper prices and that all of the to aore important grades would be brought under a ceiling as of October 1 at the levels that prevailed on June 16. This announcement was followed on September 23 by a statement that formal ceiling action on paperboard prices W&B impending. The differentials established in the schedule are those which are familier to :he trade. A maximum base price is set for a given classification and to that base are added or subtracted amounts consistent with the quantity of all types included in the classification. For example, to the maximum base price of $45.00 per ton for plain chip board may be added not more than $5.00 per ton for sales of from one to three tons: $2.50 for more than three tons, but less than 10 tons; with the base price of $45.00 applying to sales of 10 tons or over. In the case of white vat lined board, which is included with chip board in the "set-up boxboard" classification, the maximum base price is $45.00 a ton, plus $20.00 for orders of three tons or less; or plus $17.50 for orders of over three, but less than 10 tons; or plus $15.00 for orders of 10 tons or over. Thus, in effect, there are three ceiling prices ($65.00, $62.50 and $60.00) for white vat lined boxboard. This same system prevails throughout the schedule, although in some cases minimum deductions from the base price are provided for. In addition, there are differentials allowed for varying thicknesses and for special operations in all of the grades. Under e special exception, the additional charges for quantities less than 10 tons are eliminated if the buyer orders sizes in proper quantities and dimensions to fill the width of the paper making machine. All of the ceiling prices are the maximume that may be charged for the re- spective grades and tonnages delivered to the consumer. OPA has no present intention of establishing maximum prices for board sold wes of the Rockies, Mr. Henderson said, since the voluntary agreements with West Coast manufacturers do not expire until December 31, 1941, and have been operating satis- factorily. Regraded Unclassified TITLE 33 - NATIONAL DEFENSE CHAPTER XI - OFFICE OF PRICE ADMINISTRATION 130 Part 1347 - Paper and Papor Products PM 1283 Price schedule No. 32 - Paperboard Sold East of the Rocky Mountains The Office of Price Administration, being charged with the maintonance of price stability and the prevention of unduo price risse, has determined that the establishment of caximun prices for paperboard is essential in order to accomplish these purposes and is in the interest of national defense and national welfare, ané that the caximun prices set forth herein are fair and reasonable. The determin- ation of these prices comes after exhaustive investigations and numerous conferen- COB with representatives of all branches of the paperboard trade. Paperboard, and the boxes and containers nanufactured therefron, have become essential to the prosecution of the defense effort. The Office of Price Administ- tration, through voluntary agreements and the establishment of price schedules for wastepaper and other connodities, has been exerting its efforts to prevent undue price rises in those raw materials which go to make up paperboard. The price rises which are threatening in the paperboard industry are, therefore, unwarranted, Because'of the countless uses for paperboard, the effect of an inflationary price would be to create a dangerous price spiral and, therefore, inmediate action is necessary. Accordingly, under the authority vested in me by Executive Order No. 8734, it is hereby directed that: 1347.51 Maximum Prices for Paperboard. On and after October 1, 1941, regard- Less of the terms of any contract of sale or purchase or other connitment, in the area East of the Rocky Mountains, no person shall sell, offer to sell, deliver or transfer any grade of paperboard, and no person shall buy, offer to buy, or accept delivery of any grade of paperboard at prices higher than the maximum prices set forth in appendicesA andB hersof, incorporated herein as Sections 1347.61 and 1347.62, respectively." * Sections 1347.51 to 1347.62, inclusive, issued pursuant to the authority contained in Executive Order No. 8734. 1347.52 Less than Maximum Prices. Lower prices than those set forth in Appen- dices A and B may, however, be charged, demanded, paid, or offered." 1347.53 Evasion. The price limitations est forth in this Schedule shall not be evaded by direct or indirect methods in connection with a purchase, sale, deli- very, or transfer of paperboard, alone or in conjunction with any other material, or by way of any commission, service, transportation or other charge, or discount, premium or other privilege, or by tying-agreement or other trade understanding, or otherwise." 1347.54 Records. Every person making purchases or sales aggregating ten tons or more of any or all grades of paperboard in any one month shall keep for insp- ection by the Office of Price Administration, for B. period of not less than one year, complete and accurate records of each purchase or sale of paperboard made during such month and each month thereafter showing the date thereof, the name of the buyer or of the seller, the prices paid or received, the quantity and grade or Tades 80 purchased or sold," 1347.55 Reports. Every producer of any or all grades of paperboard shall, in addition to keeping records as required above, submit such reports as the Office of Price Administration may from time to time require.* Regraded Unclassified 2 PM 1283 1347.56 Affirmation of Compliance. All persons who are required by Section 1347.54 to keep records. shall transmit, on or before November 10, 1941, and 9 or before the tenth day of each month thereafter, an affirmation of compliance on Form 132:1 containing A sworn statement that during the month for which the record is kept all purchases and sales were made at prices in compliance with this Schedole or with any exception 03' modification thereof. Copies of Form 132: 1 can be P.M. cured from the Office of Price Administration or, provided DO 10t" change is made In the style and content of it and that it is reproduced on 8" by paper, may be pre- pared by persons required to submit affirmation of compliance hereunder, 1347.57 Enforcement. In the event of refusal or failure to abide by the price limitations, record or report requirements, or other provisions contained in this Schedule, the Office of Price Administration will make every effort to assure (a) that the Congress and the public are fully informed thereof, (b) that the powers of the Government, both State and Federal, are fully exerted in order to protect the public interest and the interests of. those persons who comply with this Schedule, (c) that full advantage will be taken of the cooperation of the various political sub- divisions of state, county, and local governments through calling to the attention of the proper authorities failures to comply with this Schedule which pay be regarde as grounds for the revocation of licenses and permits; and (a) that the procurement services of the Government are requested to refrain from selling to or purchasing from those persons who fail to comply with this Schedule, Persons who have evidence of the offer, receipt, demand or payment of prices higher than the maximum prices, or of any evasion or effort to evade the provisions hereof, or of speculation or manipulation of prices of any or all of the grades of paperboard or of the hoarding or accumulation of unnecessary inventories thereof, are urged and requested to CODE municate with the Office of Price Administration. 1347.58 Modification of the Price Schedule, Persons complaining of hardship or inequity in the operation of this Schedule may apply to the Office of Price Administration for approval of any modification thereof or exception therefrom, Such applications must include all relevant facts in detail and must be verified by the individual making the application or by na officer or partner of the business entity making the application. 1347.59 Definitions. When used in this Schedule, or any modifications or exceptions thereto, the term (a) "Person" means an individual, partnership, association, corpora- tion, or other business entity. (b) "Paperboard" means all kinds, grades, types, calipers, colors, and patterns of paperboard. (c) "Producer" means any person who manufactures from any raw ner terial any type, grade or calipor of paperboard for any use whatsoever. (d) "Gage list" means those liste set forth in United States Depart mont of Commerce Simplified Practice Recommendation R44-36 entitled "Box Board Thicknesses," 1347.60 Effective Date. This Schedule shall become effective on October 1, 1941. - 3- PM 1283 131 1347.61 Appendix A Maximum Prices for Paperloard Used in the Manufac- ture of Folding Paper Boxes and Set-up Cartons. (a) Set-up Boxboards (No. 1 Gage List - Reg. 50's to 90's, incl. See Section (d) for other thicknesses 1/) Maximum Base Price Per Ton Maximum Differentials Apply- (2000 16c.) ing to the Maximum Base Price 2/ 1 - 3 Over 3 10 Tons Tone Less 10 or Over Plain Chip $ 45.00 + 3/ 5.00 1 2.50 + Base News Vat Lined Chip 45.00 1 6.50 1 4.00 1 1.50 Filled News 45.00 + 8.00 + 5.50 + 3.00 Solid News 1/ 45.00 + 10.00 + 7.50 1 5.00 White Vat Lined 45.00 + 20.00 + 17.50 + 15.00 Mounting Board 45.00 + 8.00 + 5.50 + 3.00 Tube & Can Stock 45.00 + 7.50 + 5.00 + 2.50 (b) Folding Boards (No. 2 Gage List - Reg. 50's and 90's, incl. See Section (a) for other thicknesses) Maximum Base Price Per Ton Meximum Differentials Apply- (2000 1bs.) ing to the Maximum Base Price 2/ 1 - 3 Over 3 10 Tons Tons Less 10 or Over Single Manila Lined, Jute-Mist Gray, Tan, Green Lined & Suit Box $ 60.00 + 31 5.00 + 2.50 + Base Bleached Manila Lined 60.00 + 7.50 + 5.00 + 2.50 Semi-bonding & Creasing Chip 60.00 - 7.50 - 10.00 - 12.50 Full Bending Chip 60.00 - 5.00 - 7.50 - 10.00 Regraded Unclassified 4 PM 1283 (c) White Patent Coated News (No. 6 Gage List) Maximum Base Price Per Ton Maximum Differentials Apply- (2000 1bs.) ing to the Maximum Base Price 1 - 3 Over 3 10 Tons Tons Less 10 or Over # 1 Single White .020 and heavier $ 75.00 5.00 + 2.50 + Basè + 1 Single White .018 75.00 + 7.50 + 5.00 + 2.50 # 1 Single White .016 75.00 + 10,00 + 7.50 + 5.00 + 1 Single White .015 75,00 + 12.50 + 10.00 + 7.50 # 1 Single White .014 75.00 + 15.00 + 12.50 + 10,00 + 1 Double White .020 and heavier 75.00 + 27.50 + 25.00 + 22.50 + 1 Double White .018 75.00 + 32.50 30.00 + 27,50 # 1 Double White .016 75.00 + 37.50 + 35,00 + 32.50 # 1 Double White .015 75.00 + 40.00 + 37.50 + 35.00 + 1 Double White .014 75.00 42.50 + 40.00 + 37.50 (a) Additional Differentials Applying to All Grades Regular 35's to 39's 3/ + 5.00 Regular 40's to 49's + 2,50 Regular 91's to 100's + 2.50 Regular 101's to 120's + 5.00 Silicating (Per Side) + 2.50 Pasting 35's to 15's + 7.50 Pasting 14's to 1/2" Thick + 12.50 Trimming (Per Side) + 1.00 Gloss Ink + 2.50 (e) All of the above maximum prices are for the respective grades and tonnages delivered to the consumer. Billing may be f.o.b. point of ship- ment with freight allowed to point of destination. 1/ Except No, 3 Gage List 2/ Exception to Quantity Differentials - Where a single buyer places a single or multiple order for paperboard of a single grade, thick- ness, type, and color, and where the sizes ordered and quantities - 5 - 132 PM 1283 demanded are such AS to fill the trim of the seller's paper making machine and where the only cutting involved can be done by the slitter and chopper knives FB the paperboard leaves the machine, the combined weight of such orders made simultansously shall be used as the basis for the application of the quantity differential set forth herein. A If + If sign before a figure establishes it as the maximum amount that may be added to the base price in the sale or purchase of the kind end grade of paperboard in whose column the figure appears. Smaller amounts may be added. A # - " sign before 8. figure establishwa it as the minimum amount that must be subtracted from the base price in the sale or purchase of the kind and grade of paperboard in whose column the figure appears. Larger amounts may be subtracted. Additional differentials applying to White Patent Coated News only: Manila Back Non-Bender + $10.00 Manila Back Bender $15.00 1347.62 Appendix B. Maximum Prices for Pererboard Used in the Man- ufacture of Corrugated and Solid Fibre Boxes (a) Container Liners Price Per M Sq. Ft. .016 42 lb. Fourdrinier Kraft $ 1.25 .016 47 lb. Fourdrinier Kraft 1.41 .016 49 lb. Fourdrinier Kreft 1.47 .016 50 lb. Fourdrinier Kraft 1.50 .016 52 lb. Fourdrinier Kraft 1.56 .016 52 lb. - 150 lb. Test Cylinder Kraft 1.69 .016 56 - 59 lb. - 100 1b. Test Natural Cylinder Kraft 1.82 .016 56 - 58 1b. - 100 lb. Test Filled Cylinder Kraft 1.82 .016 52 1b. - 100 1b. Test Yellow Fourdrinier Kraft 1.76 .016 56 lb. - 125 1b. Test Yellow Cylinder Kraft 1.89 .016 56 lb. Chipboard 1.26 .016 64 lb. Jute 1.92 (b) Liners Heavier than .016 .030 100, 1b. Jute 3.00 .030 110 lb. Jute 3.30 .030 96 lb. Cylinder Kraft 3.12 .030 96 lb. Yellow Cylinder Kraft 3.24 .030 90 lb. Fourdrinier Kraft 2.70 .030 104 lb. - 250 lb. Test Cylinder Kraft 3.38 .035 110 lb. High Test Cylinder Kraft 3.85 Regraded Unclassified - 6 - PM 1283 (c) Liners Lighter than .016 Price Per M Sq. Ft. .012 33 lb. Kraft .99 .012 38 lb. Kraft 1.14 .012 48 lb. - 50 lb. Jute 1.50 .010 30 1b. - 32 lb. Kraft 1.04 (d) Corrugating Grades .009 32 lb. Strawboard .96 .009 26 lb. Fourdrinier Kraft .78 .009 26 lb. Chestnut .78 .009 26 1b. Pinewood .78 .009 26 lb. Chip .62 .009 25 - 30 1b. "Bogus" Corrugating Material .90 .009 26 lb. Canadian (Sulphite & Ground Wood) .78 (e) All Kraft, Jute, and Chip prices are based on their repsective natural colors except where specific provision is made otherwise in the above schedule, (f) For grades of Chipboard not found in this Appendix, a price per thousand square feet not in excess of $45.00 per ton may be charged. For grades of all other types of paperboard not found in this Appendix, a price per thous- and square feet not in excess of $60.00 per ton may be charged. In the event that special circumstances are present, application should be made to the Office of Price Administration for a modification or exception to the Schedule in accordance with Section 1347.58 hereof. (g) All of the above maximum prices are for the respective grades and ton- nages delivered to the consumer. Billing may be f.o.b. point of shipment with freight allowed to point of destination. Issued this 30th day of September, 1941. LEON HENDERSON Leon Henderson Administrator CERTIFIED TO BE A TRUE COPY OF THE ORIGINAL JOHN E. HAMM John E. Hamm, Deputy Administrator Unclassified 133 OFFICE FOR EMERGENCY MANAGEMENT 6 For Immediate Release, Oct. 2, 1941 Office of Price Administration PM 1290 Several minor changes in Price Schedule No. 12 covering brass mill scrap were issued today by Leon Henderson, Administrator, Office of Price Administration. Brass mill scrap includes scrap which is a by-product of the fabrication of zaterials produced by brass mills. Amendments to the schedule, which was originally issued, on July 21, 1941, include: (1) Addition of P. new category designated as "Copper" with the following nexious prices for lesc than 15,000 pound lots: heavy scrap, 10-1/4 per pound; rod ends, 10-1/4¢ per pound; and rod turnings, 9-1/24 per pound. Premiums of 5/80 per pound may be paid on shipments of 15,000 pounds or more at one time and of 1 cent on shipments of 40,000 pounds or more. This type of material is currently covered in price schedule No 20 on "Copper Scrap" but is to be removed from that schedule shortly. (2) Addition of 8, new category designated as "Nickel Silver" with the follow- ing maximum prices for less than 15,000 nound lots: Nickel Silver Heavy Scrap Rod Ends Turnings 5% nickel 9-1/44 94 4-5/89 10% nickel 10-1/84 9-7/86 5-1/16# 15% nickel 10-7/8 10-5/8# 5-7/16 Nickel silver scrap was formerly covered by price schedule No. 8 on "Nickel Scrap". The change was made because most nickel silver is produced by brass mills. Cubro-nickel, which is produced in large quantities by other than brass mills. re- rains in the nickel scrap schedule. (3) The definition of "brass will scrap" has been changed BO as to conform substantially with the OPM priority order covering copper and copper alloy scrap. (4) The enforcement section has been modified 80 as to take account of possible cooperation by state, county. and local governments in seeking enforce- sent through revocation of licenses and permits. This section also states "that 200 procurement services of, the Government are requested to refrain from solling to or purchasing from those persons who fail to comply with the schedule." ****** Regraded Unclassified Regraded Unclassified F SIZE Name Fund 10000 - RD PAID (9) = 10 THANK SUITA Card This AND where RSW PRIVARY - superija 20 The 1 ( Fift TO - OF United 1901 NC ⑆ 10.000 - OD book 2014 12,75 - - 10 pl LETT - my: ST D 1009 - - - oz vot - 10-21-17 Dec benefit was 200 441125 OUR 9.00 William zen Jyan Name burry Tapes presas (2) - V - 94 **** 290 AT of ATE PRESINGTON VIA ET (1) ANY ROSED physician IT y 02 are of - DE ID no, IS payer RIJI ROLAR 1436 more to 2M TI30 OUICE KG ENVOLVED TITLE 32 - NATIONAL DEFENSE PM 1290 CHAPTER II - OFFICE OF PRICE ADMINISTRATION 134 Part 1309 - Copper and Copper Alloys Arendment to Price Schedule No. 12 - Brass Mill Scrap Price Schedule No. 12, Brass Mill Scrap, is hereby emended by substituting the words "Office of Price Administration" for the words "Office of Price Administration and Civilian Supply" wherever they appear in the Schedule and by amending Sections 1309,15, 1309.18, and 1309.19 to read as follows: 1309.15 Enforcement. In the event of refusal or failure to abide by the price limitations, record requirements, or other provisions contained in this Schedule, the Office of Price Administration will make every effort to assure (a) that the Congress and the public are fully informed thereof, (b) that the powers of Government, both state and federal, are fully exerted in order to pro- tect the public interest and the interests of those persons who comply with this Schedule, (c) that full advantage will be taken of the cooperation of the various political subdivisions of state, county, and local governments through calling to the attention of the proper authorities failures to comply with this Schedule which Day be regarded as grounds for the revocation of licenses and permits; and (d) that the procurement services of the Government are requested to refrain from selling to or purchasing from those persons who fail to comply with this Schedule, Persons who have evidence of the offer, receipt, demand or payment of prices higher than the maximum prices, or of any evasion or effort to evade the provie sions thereof, or of speculation or manipulation of prices of any or all of the grades of brass mill scrap or of the hoarding or accumulation of unnecessary inventories thereof, are urged and requested to communicate with the Office of Price Administration. (Executive Order 8734) 1309.18 Definitions. When used in this Schedule, the term (a) "person" includes an individual, partnership, association, corporation, or other business entity. (b) "brass mill scrap" means the kinds and grades of non-ferrous scrap materials which are a by-product of the fabrication of materials produced by brass mills. (Executive Order 8734) 1309.19 - Appendix A - Maximum Prices. Maximum prices herein set forth are for the principal kinds or grades of brass mill scrap. All other kinds or grades of brass mill scrap which are not specified, except cupro-nickel alloy scrap, should be sold at the normal differentials from such principal kinds or grades. Cupro-nickel alloy scrap shall be sold in accordance with the provisions of Price Schedule No. 8 which establishes nazimun pricee for scrap and secondary. materials containing nickel, The maximum prices are established for scrap which is clean, dry and free from foreign materials and which meets generally accepted mazimum standards in the trade, Scrap which fails to meet such standards should be sold at normal differentials below the established maximum prices. Maximum Prices Kind or Grade of Scrap (per pound, f.o.b. point of shipment) Heavy Scrap Rod Ends Turnings Brass Commercial Bronze containing 95% or more copper 9-1/24 9-1/44 8-3/4# containing minimum of 90% up to 95% copper 9-3/84 3-1/81 8-5/80 Regraded Unclassified - 2 - PM 1290 Maximum Prices Kind or Grade of Scrap (per pound, f.o.b. point of shipment) Heavy Scrap Rod Ends Turnings Red Brass containing minimum of 80% copper 9-1/84 8-7/84 8-3/8# Best Quality Brass containing minimum of 71% up to 80% copper 8-3/40 8-1/24 Rod Turnings Yellow Brass 8-5/84 8-3/84 7-7/8¢ Copper 10-1/44 10-1/44 9-1/2# Nickel Silver Turnings 5% nickel 9-1/44 $6 4-5/84 10% nickel 10-1/84 9-7/84 5-1/16 15% nickel 10-7/84 10-5/8 5-7/16 Quantity Differentials Premiums on shipments of: 15,000 pounds or more at one time 5/84 per pound 40,000 pounds or more at one time 14 per pound The maximum prices set forth above apply on shipments in lots of less than 15,000 pounds, However, as indicated above, on shi pments in lots of 15,000 pounds at one time, a maximum of 5/8¢ per pound may be added to such prices. On ship- ments in lots of 40,000 pounds or more at one time, a caximun of 1¢ per pound may be added to such prices, A lot of 15,000 pounds for the purposes of this Schedule, may be made up of any kind or grade of heavy scrap, or of any kind or grade of turnings and rod ends, but heavy scrap may not be mixed with either turnings or rod ends or both, to nake up a lot of 15,000 pounds. A lot of 40,000 pounds or more for the purposes of this Schedule, may be made up of any kind or grade of brass nill scrap. If delivery is nade by truck, a shipment in lots of 15,000 pounds or 40,000 pounds or more as the case may be, will be considered to have been made "at one time", for the purposes of this Schedule, if such lot is delivered to the buyer within two days after the first shipment of the lot is Bo delivered. (Executive Order 8734) These amendments shall become effective October 3, 1941. Issued this 1st day of October, 1941. LEON HENDERSON ADMINISTRATOR CERTIFIED TO BE A TRUE COPY OF THE ORIGINAL JOHN E. HAMM DEPUTY ADMINISTRATOR Regraded Unclassified 135 OFFICE FOR IMERGENCY MANAGEMENT OFFICE OF PRICE ADMINISTRATION for Immediate Release October 3, 1941 PM 1298 Amendment of the rayon grey goods price schedule to modify a regulation which right impose a hardship on the originators of new weaves of cloth was announced today by the Office of Price Administration, Until now, the schedule required that sales contracts contain full details of the construction of each fabric sold, whether or not covered by maximum prices. As amended, this requirement will apply only to the fabrics specifically named in the schedule. Disclosure to buyers of the make-up of new cloths in sales contracts, accord- ing to manufacturers, provided an easy means for competitors to obtain information that would pormit imitation, Thus the originators would be deprived of style advantage. The amended regulations still require manufacturers to keep full records of the production, prices and constructions of all fabrics included in the schedule, as well as to report similar information to OPA each month on fabrics not under the ceiling, if made in quantities exceeding 25,000 yards a month, These reports, it is stipulated, must be filed even though the fabrics were not sold "in the grey", or unfinished state, but were further processed by the manufacturer, Aa a result of numerous inquiries, Mr. Henderson itemised the schedule's re- porting requirements in the following clarifying statement to the trade: 1. Weavers will keep full records of all transactions, of all production, and of the details of manufacture of every fabric produced. 2, Weavers will submit to OPA, on forms provided for that purpose, reports showing the volume of production and full details of menufacture ofevery fabric not under the ceiling, if it has been produced in quantities greater than 25,000 yards monthly. The highest prices at which such goods are sold during the month covered are to be included in the form, These prices are to cover sales both for impodiate end for future delivery. Reports will be due from all producers, how- ever, whether the goods are sold in the greige or not. Where such fabrics are not sold in the grey state, this should be indicated on the report forms instead of listing the highest selling prices, 3, Invoices on all shipments of rayon grey goods must carry a style number or symbol which identifies the fabric in such a way that it refers to the weaver's records of the details of its manufacture. Sales contracts on fabrice covered by the ceiling must carry full details of manufacture. **** Regraded Unclassified Regraded Unclassified RAS 07 112 2 mustja 02, Apo of evine - 1999 CHAME 22 :1 ACTOP 150 :- - AD 174 - 2019 Sm, OR ⑈ our 431 of used can 4 42200 / ex Payment 0-77 THE EXM ASSE valjet 071 more OR 15 126 of not Applicable 199 2054 70 05 VEGIN or toop expires WIN IV pour - RTY (of 1972 DD you EASY egy port - : N DI N 100/7 SPA9 ese (1) OWNE evyes 145 Use JN INSURE 47 effer Circy de on STATE of engra 22° #1 H (if 7:00 - Corraps IEVO 20,000 $100 Myse R 02g 01/08/15 0045 to 4177 00 orr DD LOCAT positives 102 sure kabogira XL EN R A 1" 422 20 TI as 477 F <00 SIGNATURE you & Department provided di pre now DECREASED A 15 NURE an 48799 DATE spouts 12% Adv IX Vega 10 excergers 291000 serve D 4A/T 22 $ 10 CET RPF Datess as 052 w 200 street ***** - es DUE 2009 EJF9 RS 20 Amount SD -TAX (02 20 ⑆6 197 - KI divi IF ewrow AND NIT WHITE carry to IP Employee 000 01 06/12/2020 of 200210 Days* 82 DOS COASING / V related IDS offections notes trde Instruct , Date ERONS 02 age CERTON of 32100 02074 zubese If personal ou age 5 Did anough N ojogy (AUS of 0.778 122,00 Boogs inno separate 20 SIX - AUTOR 2° year See 5070000 M 7328 CERICE D3 sexe 08.2703 XDX 402 TITLE 32 - NATIONAL DEFENSE PM 1298 CHAPTER II - OFFICE OF PRICE ADMINISTRATION 136 PART 1337 - RAYON <=> Price Schedule No. 23 - Payon Grey Goods -, is hereby amended by substituting the words "Office of Price Administration" for the words "Office of Price Administration and Civilian Supply" wherever they appear in the Schedule and by amending Sections 1337.14, 1337.15 and 1337.16 thereof to read as follows: 1337.14. Records. (a) Every person making purchases or sales of rayon grey goods after August 25, 1941, whether or not of the constructions enumerated in Appendix A hereef, shall keep for inspection by the Office of Price Administration for & period of not less than 1 year: (i) complete and accurate records of each each purchase or sale, showing the date thereof, the name and address of the buyer or seller, the price paid or received and the quantity in yards of each construction purchased or sold; and (11) copies of each contract of sale and invoice oz similar document containing the details required in Section 1337.15 hereof, (b) Every manufacturer of rayon grey goods shall keep for inspection by the Office of Price Administration for a period of not less than 1 year CODE plete and accurate records setting forth: (i) & full description of each con- struction of rayon grey goods whether or not of the constructions enumerated in Appendix 4, manufactured or sold, including (1) the width, specifying whether in or off the loom, (2) the cloth count, i.e., the number of ends and picks per inch, specifying whether in or off the loon, and (3) a full description of the yarn both in the warp and in the filling, specifying in each case the denier and number of filanents, the process by which nade, the twist or combination, if any, and, if a blend, the percentages of each type of yarn so blonded; and (ii) the quantity in yards of each construction of rayon grey goods, whether or not of the constructions enunerated in Appendix A, produced during each calendar month. Regraded Unclassified PM 1298 2. (Executive Order No. 8734.) 1337.15. Details Required in Contract of Sale and Invoice. (a) Every seller of rayon grey goods of the constructions enumerated in Appendix A shall, with respect to each sale thereof, deliver to the purchaser a con- tract of sale which shall contain, in addition to the terms thereof, B full description of each construction of rayon grey goods sold, including (1) the width, specifying whether in or off the loon, (11) the cloth count, 1.0,, the number of ends and picks per inch, specifying whether in or off the loon, and (111) a full description of the yarn both in the warp and in the filling, specifying in each case the denier and number of filaments, the process by which nade, the twist or combination, if any, and, if A blend, the percent- ages of each type of yarn SQ blended. (b) With each delivery of rayon grey goods, whether or not of the constructions enunernted in Appendix A, there shall be transmitted to the pur chaser an invoice or similar document which shall contain n. style number or symbol sufficient to identify in the nanufacturer's records maintained pur- suant to Section 1337.14 hereof, the details of each construction SO delivered, (Executive Order No. 8734.) 1337.16. Reports. On or before October 10, 1941, and on or before the 10th day of each month thereafter, every manufacturer of rayon grey goods shall submit to the Office of Price Administration a report on Form 123:1 setting forth in the detail required by the Form all the constructions of ray? grey goods, other than the constructions enumerated in Appendix A, nanufacture by such person in quantities in excess of 25,000 yards por month, and the highest prices at which each such construction was sold, both for innediate 5% future dolivery, if suld during such month. Such reports shall be submitted even although the raym grey goods 80 manufactured were not sold in the grey state but were further processed by the nanufacturer thereof. Copies of Form 123:1 can be procured from the Office of Price Administration. F.. - 06 137 3. (Executive Order No. 8734.) This anendment shall become offective October 3, 1941. Issued this 2nd day of October, 1941 Certified to be a true copy of the original Leon Handerson, Administrator John E. Hann, Deputy Administrator Regraded Inclassified PM 10% THE Describe Option Sing (ASTE .0% 10/10 oviduosal) Review is Contract of Sure 122 20 redetoo ovitoolio eccess Claim att CIVY of the Jr. LARI добозов to vas has alid Street - with 20 reling We the NW vumo and B of of is się 5 mode & wish Us we shy 00 Wheel 15 vale - in off 192 Local ***** V my 13 wes class to of st Six 12 and 19 *** - 1 <<0 if wis system LE - at IN, - Mrs the M 8 A I A Regraded Unclassified OFFICE FOR REBE OFFICE OF PRICE AT For Saturday AM's October 4, 1941 Ceiling prices directly keyed to the mar tablished for the full renge of ordinary Comm terial for all of the more common grades of e issued today by Leon Henderson, administrator This is the first formal ceiling in the recently announced formula for automatic adju grey goods whenever the market price of raw c fied number of points. The formula is also being worked out for and the types of cotton grey goode now covere the numerous other constructions of cotton el goods schedule. Combed yarn undergoes an add a higher quality product than carded yarn. In gearing maximum prices for carded yar cente a pound for raw cotton was used. This 10 "spot" markets on July 19, 1941, when the for combed yarn and grey goods. Using the 15 carded yarn schedule sets maximum prices rang the various numbers in single ply and from 39 plies. c Adjustments of one-half cent 8 pound abo provided for all numbers of yarn, single or P occurs in the price of raw cotton as measured middling grade on the 10 "spot" markets for t Using 20's, & leading number, for purpos as follows: "Spot" Haw Cotton (Cents Per Lb.) 14,21 - 14.65 14.66 - 15.09 15.10 - 15,54 15.55 - 15.98 15.99 - 16,43 (case) 16.44 - 16.87 16.88 - 17.32 17.33 - 17.76 17.77 - 18,21 18.22 - 18,65 Regraded Unclassified ENCY MANAGEMENT 138 AIMINISTRATION PM 1307 arket price of "spot" raw cotton are 08- umercial carded cotton yarns, base ma- cotton fabrics, in a new price schedule of of the Office of Price Administration cotton goods field incorporating OPA's justments in maximum prices of yard and cotton declines or advances by a speci- or application to combed cotton yarn red by price ceilings, as well as for cloth to be added shortly to the grey dditional step in manufacturing and is am to cotton prices, a base of 15.99 B was the average price for cotton on B prevailing ceilings were established 15. 99-dent cotton price as a base, the aging from 35 to 55 cents & pound for 39 to 60 cents for numbers of two or mor bove and below these "base prices" are plied, whenever a change of 443 points ed by the average closing price of 15/16 the previous day. 0888 of illastration, the formula works Ceiling Prices (Cents Per Lb.) 20's (Single) 20's (Plied) 35 40 36) 40} 37 41 37th 41g 38 (base) 42 (base) 38 ≥ 42) 39 43 391 431 40 44 40g 443 Regraded Unclassified PM 1307 Since the average closing price of "spot" cotton on October a was 17.01 cents 8. pound, or 102 points above the 15,99 cent "base", the maximum prices for 20's of October 3 were 39 cents for eingles and 43 cente for plied, or one cent B pound above the "base prices". It is stipulated that carded yarn ceiling prices automatically established by application of the formula shall not change until the day after "spot" cotton closing prices show a 444-point fluctuation. The maximum "base prices" set for carded yarn are 3 cente a pound below the corresponding numbers of combed yarn. However, more cotton is wasted in the pro- duction of combed yarn. Hence, the revised schedule for that type, now being pro- pared, will provide for upward and downward revisions of maximum combed yarn price on changes of something less than 44h points in raw cotton prices. The first announcement that ceiling prices would be set for carded cotton Jun said that this would be done by amending the combed cotton yarn schedule, rather then by issuing a separate schedule, Subsequent adoption of the new price formula however, made this impractical. Formally, carded yern, excepting certain special gradem, sella below equivale counts of combeá yarn. Since the latter product has been subject to a schedule of nazimum prices this normal differential has narrowed considerably and in some in- stances has disappeared. The result has been disturbing both to sellers and users of carded yarns. The new schedule, which was drawn up after consultation with a committee o: carded yam spinners drawn from the Cotton Cextile Adivsory Panel, establishes 8 differential between combed and carded yarn prices reflecting an appropriate re- lationship. At the same time, through use of the new formula, yarn trading will not be disturbed by changes in cotton prices. Both combed and carded cotton yarns are produced from raw, clean cotton and, up to a certain point, are made by the same manufacturing process. In the final stages, however, combed yarn Le put through an additional process which removes the short cotton fibres, leaving only the longer fibres. This results in & stronger yarn of fine quality, suitable for weaving of fine broadcloths, lawns, di- mities, etc., and for use in the production of higher grade net goods. Combed yan also is used by women's hosiery mills and by lace, knitting and thread manufacture Carded yarn finds a much wider variety of uses, such 88 in the weaving of pris cloths and sheetings and in the manufacture of carpets and rugs, twine, wire in- sulation men's socks, and underwear, Yarn "numbers" indicate the diameter of the yarn, with the coarser diameters represented by low numbers and the finer counts by high numbers. As the name is- plice, "single" refers to yarn of a single strand, while "pliod" is yarn of tvo or more strands, Like the combed yarn schedule, the new carded yarn weiling applies only to yarn for sale and not to the yarns produced for use within the manufacturer's one plant. Sales for export are exempted from the schedule, 139 +3- PM 1307 It is provided that once a contract has been made in conformity with the schedule it shall be completed at the stipulated price, irrespective of any changes in the ceilings that may occar because of fluctuations in raw cotton between the date of the contract and the date of delivery. Deliveries under contracts made before the carded yarn ceiling becomes effective are to be carried out at prices correlated in the schedule to the "spot" cotton price on the day before the contract was entered into. The schedule covers only carded yarn of ordinary commercial quality. About 10% of the total production of carded yarn is made up of certain special types. These yarns, the schedule indicates, should sell at the customary differential below or above the prices set for ordinary commercial grades. Conferences to fix specific differentials for special yarns will be held shortly with yarn manufacturers, It is pointed out that, under the established policy of OPA, deliveries of such yarn, once the differentials have been fixed, will not be permitted at higher than ceiling prices, regardless of commitments to the contrary. Regraded Unclassified est 22 1229 vote XS provided other 66 Debiter a Vas no 00 ind 1/1/Past tax prince Zip n2 abon good and 8 atto And of # 18 to off Is ed Unda #2 notton vez nt to 20200 THE redd out at 21 to the atab ned orid 20 inter one will the Ang ankleb a off smoked chen. Tobacco subseviled new off off et essing to two beferes ad of 018 08.12.2019 Web value Butter SIDE anoted knb out Bo actua netres Manger, et it is troMA Vehicles Visatino to essay behavio the of - Intooqe states to gu start to behief. 20: fasted odd to add da Line edd: 80163 oned? ashars like tractico 20% don seeing add evode TO volid from would be NOT for corded settes bford ed I/W Laborga tot officega at the office subai mit tuo Dediction as SIZ state bett med over! dis 202 area thara to solueviled 490 30 Valing at administration 20 withs and with to es the Like 10% de address La WC OF been to of CAN letters VA and 10 of is aptil 24 & NAME Given MARY Ste Langue TImes Any in 4d at mode - NAME noth me. N your THE the New by: ased student, AZ TAX 16 smile G to one celting even ICA the Regraded Unclassified PM 1307 140 TITLE 32 - NATIONAL DEFENSE CHAPTER II - OFFICE or PRICE Part 1307 - Bar Materials for Cotton Textiles Price Schedule No. 35 Carded Cotton Tarás From August 1940 to May 1951 the prides of cotton yarns and cotton textiles were marked by an inflationary riss. To check this advance, the Office of Price Administration issued a schedule of maximum prices for combed yarns in May 1941, and a schedule for six leading types of cotton grey goods in June 1941. It VBS the air of the Office of Price Administration in taking these measures to bring about an appropriate adjustment of prices for related products in the cotton tex- tile field to those set forth in the schedules for combed yarn and cotton grey goods. Carded yarne, however, which normally sell for several cents less per pound than combed yarne are nov commanding prices as high, and in some instances higher, than the coiling prices astablished for combed yarns. This dialocation in the price structure of the textile industry is injurious to national defense and to the civilian economy. Accordingly, under the authority vested in me by Executive Order No. 8734, it is hereby directed that: 1307.51 Maximm Prices for Carded Ootton Tarn. (a) On and after the applicable ceiling date (as set forth in Appendix 4, incorporated herein as Section 1307.60), except as provided in Section 1307.51 (b) hereof, no person shall sell, offer to sell, deliver, or transfer carded cotton yarn for commercial use, and no person shall buy, offer to buy, or accept delivery of carded cotton yarn for commercial use, at prices higher than the maximum prices set forth in Appendix 1. (b) The maximum prices established by this Schedule are not applicable to sales, offers to sell, deliveries, or transfers of carded cotton yarn which in to be exported outside the territory of the United States, its territories or posses- sions, regardless of whether such export is to be effected through & middlemen; provided, however, that carded cotton yarn sold or delivered for such export shall not subsequently be sold or delivered for use within the United States. its terri- tories or possessions, at & price higher than the applicable maximum established by this Schedule. *Sections 1307.51 to 1307.60 issued pursuant to the authority contained in Executive Order No. 8734. 1307.52 Less Than Maximum Prices. Lower prices than those set forth in Ap- pendix & may be charged, demanded, paid, or offered. 1307.53 Evasion. The price limitations set forth in this Schedule shall not be evaded whether by direct or indirect methods in connection with n purchase, sale, delivery, or transfer of carded cotton yarn, alone or in conjunction with any other material, or by way of any commission, service, transportation, or other charge, or discount, premium, or other privilege, or by tying-agreement or other trade understanding or otherwise. 1307.54 Records and Reports. Every person making purchases or sales of carded cotton yarn for commercial use after October 5, 1941, shall keep for in- spection by the Office of Price Administration for & period of not less than one year. complete and accurate records of (a) each such purchase or sale, showing Regraded Unclassified PM 1307 - 2 - the date thereof, the name and address of the buyer or the seller, the price paid or received, the quantity in pounds, and the specifications of the carded cotton , yarn sold or purchased, and (b) the quantity of carded cotton yern (1) on hand, and (2) on order, as of the close of each calendar month. Persons affected by this Schedule shall submit such reports to the Office of Price Administration as it may, from time to time, require. 1307.55 Affirmations of Compliance. On or before November 10, 1941, and on or before the 10th day of each month thereafter, every person who during the pre- ceding calendar month has purchased or sold, whether for immediate or future do- livery, or delivered or accepted delivery of carded cotton yarn for commercial use, shall submit to the Office of Price Administration an affirmation of compliance on Form 133:1, containing a sworn statement that during such month all such purchases, sales, or deliveries were made at prices in compliance with this Schedule or with any exception therato or modification thereof. Copies of Form 133:1 can be procured from the Office of Price Administration, or, provided that no change is made in the style and content of the Form and that it is reproduced on 8x10-1/2" paper, they may be prepared by persons required to submit affirmations of compliance hereunder.' 1307.56 Enforcement. In the event of refusal or failure to abide by the price limitations, record requirements, or other provisions of this Schedule, or in the event of any evasion or attempt to evade the price limitations or other pro- visions of this Schedule, the Office of Price Administration will make every effort to assure (a) that the Congress and the public are fully informed thereof, and (b) that the powers of the Government are fully exerted in order to protect the public interest and the interests of those persons who comply with this Schedule. Persons who have evidence of the offer, receipt, demand, or payment of prices higher than the maximum prices, or of any evasion or effort to evade the provisions hereof, or of speculation, or manipulation of prices of carded cotton yarn, or of the hoarding or accumulating of unnecessary inventories thereof, are urged to communicate with the Office of Price Administration. 1307.57 Modification of the Schedule. Persons complaining of hardship or inequity in the operation of this Schedule may apply to the Office of Price Admin- istration for approval of any modification thereof or exception therefrom. 1307.58 Definitions. When used in this Schedule, the term (a) "person" means an individual, partnership. association, corporation, or other business entity; (b) "carded cotton yarn" means carded cotton yarn of the specifications for which maximum prices are established in Appendix A: (c) "for commercial use" means for any use or purpose except use by an in- dividual buyer at retail for home or private consumption; (d) "ceiling date" means the date, as specified in Appendix A, on which this Schedule becomes effective with respect to any given yarn. 1307.59 Effective Date of the Schedule. This Schedule shall become effecti.) October 6, 1941. Regraded Unclassified - 3 - PM 1307 1307.60 Appendix A. Marimum Prices for Carded Cotton Yarn. 141 (a) - Terms of Sale The maximum prices set forth in this Appendix are prices for carded cotton yarn with freight prepaid to the purchaser's place of business, except that an extra charge may be made to the extent that the cost of transportation exceeds one cent per pound. The prices are gross prices before discounts of any nature are deducted and they include all commissions. (b) - Determination of Meximum Price The maximum price for any offer to buy or sell, sale or contract of sale, de- livery or transfer of carded cotton yarn shall be determined from Paragraph (c) in the following manner: (1) Offer to Buy or Sell - By the cotton spot price of the business day immediately preceding that on which the offer was made except that, if the offering price is not otherwise specified, an offer to buy or sell at the maximum price ap- plicable on the day the contract of sale 10 to be made shall not be a violation of the Schedule. (2) Sale or Contract of Sale - By the cotton spot price of the business day immediately preceding the day on which the sale or contract of sale is made, re- gardless of the maximum price applicable to the offer pursuant to which such sale or contract is made. (3) Delivery or Transfer - By the cotton spot price of the business day in- Rediately preceding that on which the sale or contract of sale is made, regardless of any change in the cotton spot price subsequent thereto. 1/ The term "cotton spot price" when used herein, means the average, published daily by the United States Department of Agriculture, Agricultural Marketing Service, of the price quotations for middling 15/16-inch cotton on ten desig- nated spot markets. 2/ This method of determining the maximum price shall be used in connection with deliveries and transfers pursuant to sales or contracts of sale made before, as well as on or after, the applicable ceiling date. Regraded Unclassified (c) - TABLE OF MAXIMUM PRICES PM 1507 6 Group A - The following maximum prices are for white carded yarns of all twists from knitting to warp twist, put up on regular-sized cones or tubes or in ckeins. Carded yerns of twiste outside the above range: yarns in put-ups other than the above; yarns with tensile specifications which cannot be mot with cotton used for ordinary commercial quality combed yarne of the game counts; yarns with special constructions; yarns which have regularly sold at a premium because they are specially inspected; and yarns of grades lower than ordinary commercial quality white yarn should not sell for more than these meximum prices, appropriately increased or decreased by the normal trade differentials. This schedule is to be supplemented by a list of fixed differentials for yarns in these classes, to which all subsequent deliveries of such yarns will be subject, regardless of the terms of any contract of sale in cxistence at the date of issuance of such supplement. COTTON SPOT PRICES - CENTS PER POUND Yera 14.21 14.66 15.10 15.55 15.99 16.44 16.88 17.33 17.77 18.22 18.66 19.11 19.55 to to to to to to to to to to to to to Number 14.65 15.09 15.54 15.98 16.43 16.87 17.32 17.76 18.21 18.65 19.10 19.54 19.99 CENTS PER POUND Single 8s, 33 33.5 34 34.5 35 35.5 36 36.5 37 37.5 38 38.5 39 10s 33.5 34 34.5 35 35.5 36 36.5 37 37.5 38 38.5 39 39.5 12s 34 34.5 35 35.5 36 36.5 37 37.5 38 38.5 39 39.5 40 14s 34.5 35- 35.5 36 36.5 37 37.5 38 38.5 39 39.5 40 40.5 16s 35 35-5 36 36.5 37 37.5 38 38.5 39 39.5 40 40.5 41 18e 35.5 36 36.5 37 37-5 38 38.5 39 39.5 40 40.5 41 41.5 20a 36 36.5 37 37-5 38 38.5 39 39.5 40 40.5 41 41.5 42 24e 37 37.5 38 38.5 39 39.5 40 40.5 41 41.5 42 42.5 43 26a 38 38.5 39 39.5 40 40.5 41 41.5 42 42.5 43 43.5 44 30e 40 40.5 41 41.5 42 42.5 43 43.5 44 44.5 45 45.5 46 36s 43 43.5 44 44.5 45 45.5 46 46.5 47 47.5 48 48.5 49 38s 44 44.5 45 45.5 46 46.5 47 47.5 48 48.5 49 49.5 50 40B 45 45.5 46 46.5 47 47.5 48 48.5 49 49.5 50 50.5 51 50a 53 53.5 54 54.5 55 55.5 56 56.5 57 57.5 58 58.5 59 Plied 8a 37 37-5 38 38.5 39 39.5 40 40.5 41 41.5 42 42.5 43 10s 37.5 38 38.5 39 39.5 40 40.5 41 41.5 42 42.5 43 43.5 12a 38 36.5 39 39-5 40 40.5 42 41.5 42 42.5 43 148 40.5 42 43.5 44 38.5 39 39-5 40 41 41.5 42.5 43 43.5 44 16e 39 39.5 40 40.5 41 41.5 42 42.5 44.5 43 43.5 44 18B 39.5 40 40.5 42 44.5 41 41.5 42.5 43 45 43.5 44 44.5 45 45.5 Regraded Unclassified PM COTTON SPOT PRICES - CENTS PER FOUND cont. Yarn 14.21 14.66 15.10 15.55 15.99 16.44 16.88 17.33 17.77 18.22 18.66 to to 19.11 to to 19.55 to to to to to to 14.65 to Number to 15.09 15.54 to 15.98 16.43 16.87 17.32 17.76 18.21 18.65 19.10 19.54 19.99 CENTS PER POUND Plied 20s 40 40.5 41 41.5 42 42.5 43 43.5 44 44.5 45 45.5 46 24s 41 41.5 42 42.5 43 43.5 44 44.5 45 45.5 46 26s 42 46.5 47 42.5 43 43.5 44 44.5 45 45.5 46 46.5 47 47.5 48 30s 44 44.5 45 45.5 46 46.5 47 47.5 48 48.5 49 48 49.5 36s 48.5 50 49 49.5 50 50.5 51 51.5 52 52.5 49 53 53.5 54 38s 49.5 50 50.5 51 51.5 52 52.5 53 53.5 54 40s 54.5 55 50 50.5 51 51.5 52 52.5 53 53.5 54 54.5 55 55.5 56 50e 58 58.5 59 59.5 60 60.5 61 61.5 62 62.5 63 63.5 64 (a) - Ceiling Date The maximum prices established herein become effective, with respect to yarn of the types listed in Paragraph (c), Group A, on October 6, 1941, which shall constitute the ceiling date for that Group. Issued this 3rd day of October, 1941. /8/ Leon Henderson Leon Henderson Administrator Certified to be a true copy of the original. John E. Hamm Deputy Administrator 142 Regraded Unclassified F 822 my 200 to pm P LAIR 09, for 11.00 2018 3:4 gas % OFFORE Turi" - AVT ACTO MPUT - 210 OVAN LOS ryse service 12 as 124 this - (o) cares Y' our ave was 8175 NW (9) - CHAR 200 POID 2012 NOT 23 90% PI we N 25'c $4.00 00 70% 25'2 LS 28%2 a EYE 202 you wet THE masts to FT 15'T are now 20% 2 RJ 25 25% = A a 199 of pl 72°C pro DO 00% 27 21'2 a 25'. 02 300 ET STXT I/E per F1 the I'D 24 150 per 16°C D/1* FS 55% Pic will to 18's M T972 pl st 55% PI ,HR 75% pd TXP ID IN re ME: Regraded Unclassifie At no AT° Pd. 37744 PVP THE 5TH mer per 75517 8 159 = ID STATE 10:07 N°C 13'10 PR 70 60 20 N FORM TT.11 U.S school PAINTS terro OFFICE POR emergency MANAGEMENT 143 Office of Price Administration for Institute Setober 4, 1941 PM 1308 Methanol made from woods commonly as wood alcohol, & basic industrial chemical that has advanced sharply is prices while markets for synthetic methanol have held firm st work lover levels, is brought under a uniform celling at 60 cents 8 gallon. delivered Bast of the Mississippi, in a price schedule announced today by Lean Ecnderson. West of the Mississippi & maximum price of 63 cents is eet. This is the fourth price schedule issued by OPA in the chemical field, the other covering formaldehyde, a derivative of methanol: ethyl alcohol, and acetic acid. Mr. Renderson said that maxlarum prices would be imposed on other industrial chemicals in the near future. In previous years, prices of wood alcohol have been largely governed by the price of synthetic methanol, which is competitive for most uses. However, with de- und greatly stimulated by the defense program, wood alcohol markets recently have bécome disordered. Prices quoted publicly Juring the third quarter showed advances of 29% or more end large sales have been made at prices far above any published figure. The usual differentials for grades, quantity purchases, freight zones, etc., have been widely ignored. Speculation has made its appearance and there are indica- dons that excess inventories have been accumulated. In contrast to the inflationary situation in wood alcohol, synthetic methanol prices have hold steady at 30 cents & gallon during the first three quarters of 1941 and the largest producer has announced a reduction of two cents a gallon for the fourth quarter, This producer and the three other companies responsible for virtuall; the entire United States output of synthetic methanol have agreed with the Office of IPA. Price Administration not to raise prices without at least 30 days' advance notice to Under these circumstances it is not considered necessary to establish maximum prices for synthetic methanol at this time, but it is obvious that 8. price ceiling for wood alcohol ie essential. The new schedule, which covers all transactions in containers of 50 gallons or tore, sets e. maximum price of 60 cents a. gallon, delivered in tank car lots, for the four principal grades of wood alcohol sold East of the Mississippi River. West of th. Vississippi 3 cents & gallon may be added to the base ceiling price. tainers, the schedule allows the addition of 6 cents & gallon. In the case of less- When sales in any territory are made in carload quantities in drums or other con- then-carload sales in drums or other containere 16 cents may be added. The four grades named in the schedule are: Denaturing. Pure, 95% and 97% The Sworn statements of compliance with the maximum prices are required by the schedule. percentage designations shall include all a. proximations thereof, it is stipulated. Methyl alcohol (methanol) is an essential industrial chemical used as an anti- snamels, and numerous other products. treeze and in the manufacture of formaldahyde, denatured alcohol, paints, varnishes, Regraded Unclassified PM 1308 It is produced synthetically from hydrogen and carbon gases and by a wood type scattered is made among by a four large large number chemical of concerns. companies, while production of the wood type is distillation process which also recovers acetic acid and charcoal. The synthetic bland is Borr work show nont above Teaching Output for the current year is estimated at about 54,000,000 gallons, of produced is used as a denaturant for ethyl alcohol. The synthetic product is only about 10% will be of wood origin. Approximately one-half of all wood alcohol which used for this purpose. E tranning not instructor their name NO to Are of state R Ye 00/10 90 - W/ date 151 at (2) of eating direct will N - chese fax Date: If - well Twice 11 NO RIMV 0.001 the 15 interns VAME Incl and hage to - - =l - or 1 THAT and Invacio BEN not - Indiciduals states - - instr AND while Beneep DIE - - 2.5 this cast MAINE 0000 Titure visities ->1 Teams tal 99A male in - 078 are - cord and authorized 1 3 Indian withholds Miss as ⑉⑇1 - treatment of % endistry NEW wdd mile - OF 26 Stol XI 12 only blvd où :- odigin Insured w United TC efficients Month - be 10/17/ et - le today lond 1120 - care. " - of THE new 10 hed of of Admit e/o X Not moto older 26 Incodence 2 96 HolDs To 110 1519 VSA - - - - using 8 10 sating more de 7- no will W Not from in mine news W at bells of 200 online - when Tip - of delivery indom #) de the chaldrent TOP of of 402 the W - - 1. add rells will are Smite U this e) and XII for - Tip with at Secon all determ -: respective 0 110 Halls - - return w/o off Ye , first will Wines 9 of Insonia absistMent to add as - HAVE Regraded Unclassified TITLE 22 - NATIONAL DEFENSE 144 CHAPTER II - OFFICE OF PRICE LIMINISTRATION PART 1335 - CHEMICALS 78 1308 Price Schedule No. 34 - Wood Alcohol Methyl alcohol is an escential chemical which is used as an anti-freese and in the manufacture of formaldshyde, denatured alcohol, paints, varnishes, enemels and many other products. Nost methyl alcohol is produced synthetically. The The mainder, herein referred to as "wood alcohol", is produced by the distillation of wood. As & result of conditions engendered by the national defense program, the de- mend for methyl alcohol has increased sharply, causing a. ahortage of supply. & steep rise in the prices of the various grades of wood alcohol has occurred, The price of the denaturing grade, representing approximately one-half of the wood alcohol production, increased from 45 cents per gallon for tank car quantities in the second quarter of 1941 to 60 cents per gallon in the third quarter. Substantial transactions have taken place at even higher prices. Such a price movement threatens to create an unsound market in wood alcohol and also to dialocate the market for synthetic methyl alcohol. Producers of the latter product have refrain- ed from increasing its price. The largest producer, in fact, has announced 8 price reduction in recent weeks, It is therefore unnecessary at this time to 16- tablish maximum prices for synthetic methyl alcohol. After investigation and conferences with representatives of the methyl alcohol industry, the Office of Price Administration has found that, under existing con- ditions, there is no justifiable reason for prices of wood alcohol in excess of 60 cents per gallon for tank car quantities. Further increases in price would, there- fore, be inflationary. Accordingly. under the authority vested in me by Executive Order 8734, it is hereby directed that: 1335:251 Maximum Pricee for Wood Alcohol. On and after October 10, 1941, 10- gardless of the terms of any contract of sale or purchase, or other commitment, no person shall sell, offer to sell, deliver or transfer, wood alcohol in containers of 50 gallons or more, end no person shall buy, offer to buy, or accept delivery of wood alcohol in containers of 50 gallons or more, at prices higher than the maximum prices set forth in Appendix 4, incorporated herein as Section 1335,259* 1335,252 Less than Maximum Prices. Lower prices than those set forth in Appendix A may be charged, demanded, paid or offered.* 1335.253 Evasion. The price limitations set forth in this Schedule shall not be evaded whether by direct or indirect methods in connection with a purchase, sale, delivery, or transfer of wood alcohol, alone or in conjunction with any other mater- ial, or by way of any commission, service, transportation, or other charge, or dis- count, premium, or other privilege, or by tying-agreement or other trade understand- ing, or by alteration of formula or grades of wood alcohol, or otherwise." 1335,254 Records and Reports. Every person making purchases or sales of wood alcohol in containers of 50 gallons or more after October 10, 1941 shall keep for inspection by the Office of Price Administration for a period of not less than one year, complete and accurate records of each such purchase or sale, showing the date thereof, the name and address of the buyer or the seller, the price paid or Regraded Unclassified one 624 was or 277 the is OFF WITH 150 2024 soq assume of my as Programs - we VITW A (76 are 92 106 10 PORTAG VI, 197 THE 40 My TO of BU DAYTOR as DUES w THE CAD 146 1212'506 3067493 - - - 41 REW PL May of X og v2 11, AGOS of 15' 16 N & 2020 conseques 1184704° X - 11 96 every' net will users IL 22 Approver DC 25,00 02 MPIS as 20 NO NA Prix n A 11) пергоды P conveype *769 en America' 37/4" barso me OW AREW 00/ photograph 1 25 00 available boys 02 - 1232'32" for Joseph 15.00 (Pline 10% UNIT 14. AVENUE THE 10149 " pervice 92 april in of an " DOLO #: most De - 11 30 Driver ** 004 no because PAY 08:46 PO 05 THEMA or Name: NET! you or t= DATE of your or 800 3 KVLT 02 08 94785 of PERFECT 105 give 00 zon 9:4 Des WASHINGTON 10001 4VH EW as pl M not with for 402 May City, - 20 DATE: REVIEW P 20 CUL 461500 X 45° 042740 of 64740 25 141 per WITHING brrown got alson (2) 2015 so 74 EXP RAY 20 02- en THE we JVANUNG JE 4b (4% w, ⑆ parent Month 1 20 camige ou average (if mag 95 $100 to just 7:48 purjects byear #: MG 3447 NAME: 250 Rocoup unages of JBP & 80 00210 206 - E 474 STATE thise of program ezega' - 0000 proposed 17 00019 7-02 for MA nom 7a 50mg - FL 417065 10 150 number of 220g ejecus - IPA may agreepy 92% current P MAR 1 to to 0% congration 22 FPF payment mays F24 100 1005. person go we proce Fe broaming 22 as or (Pe X ejocpor' burned ⑈ WE deving was 18 brogrees 2' 70 we DESCRIPTIONS 09601445 20 greg - K/ (6) in 32700 19* R - AM 1700305 Are The - EXP TX8 CHILDRE XI - CARICE OL Till STATE as 145 PM 1306 received, and the specifications and quantity, Including the size of the containers, of the wood alcohol purchased or sold. Persons affected by this Schedule shall submit such reports to the Office of Price Administration AS it may, from time to time, require." 1335.255 Affirmations of Compliance. On or before November 10, 1941, and on or before the 10th day of each month thereafter, every person who, during the pre- ceding calendar month, has sold wood alcohol in containers of 50 gallons or more, whether for immediate or future/delivery, shall submit to the Office of Price Ad- ministration an affirmation of compliance on Form 134:1, containing a sworn state- ment that during each month all such sales were made at prices in compliance with this Schedule or with any exception or modification thereof. Copies of Form 134:1 can be procured from the Office of Price Administration, or, provided that no change is made in the style and content of the Form and that it 10 reproduced on 8 I 10}" paper, they may be prepared by persons required to submit affirmations of compliance hersunder.* 1335,256 Inforcement. In 42a event of refusal or failure to abide by the price limitations, report requirements, or other provisions of this Schedule, or in the event of any evasion or attent to drado the price limitations or other pro- visions of this Schedule, the Office of Irice Administration will make every effort to assure (a) that the Congress and SAN public are fully informed thereof, (b) that the powers of the Government are nary exerted in order to protect the public interest and the interests of those persons who comply with this Schedule, and (c) that the procurement services of the (overnment are requested to refrain from pur- chasing wood alcohol from those persons who fail to comply with this Schedule, Per- Bons who have evidence of the offer, receipt, demand or payment of prices higher than the maximum prices, or of any evasion or effort to evade the provisions hereof, or of speculation, or manipulation of prices of wood alcohol, or of the hoarding or accumulating of unnecessary inventories thereof, are urged to communicate with the Office of Price Administration.' 1335,257 Modification of the Schedule. Persons complaining of hardship or inequity in the operation of this Schedule may apply to the Office of Price Administration for approval of any modification thereof or exception therefrom." 1335,258 Definitions. When used in this Schedule, the term (a) "person" means an individual, partnership. association, corpora- tion, or other business entity; (b) "wood alcohol" means the various grades of methyl alcohol of wood origin listed in Appendix A hereof." *Sections 1335.251 to 1335,259, inclusive, issued pursuant to authority contained in Executive Order No. 8734. Regraded Unclassified PM 1308 1335,259 APPENDIX MAXIMUM PRICES FOR WOOD ALCOHOL The following maximum prices are established for wood alcohol: I. Tank Cars Fest of the Mississippi River Denaturing Grade 60 cents per gallon, delivered Pure Methyl Alcohol 60 cents per gallon, delivered 95% Methyl Alcohol** 60 cents per gallon, delivered 97% Methyl Alcohol** 60 centa per gallon, delivered West of the Mississippi River Maximum prices for tank car quantities in territory west of the Mississippi River are determined by adding 3 cents per gallon to the maximum prices established above for tank cars in territory east of the Mississippi River. II. Drums and other containers, Carload Quantities Maximum prices for drume and other containers, in carload quantities, in territory east or west of the Mississippi River, are determined by adding 6 cents per gallon to the maximum prices established for tank care in the respective terri- tory by Paragraph I of this Appendix. III, Drums and other containers. Less than Carload Quantities. Maximum prices for drums and other containers, in less than carload quantities in territory east or west of the Mississippi River, are determined by adding 16 cents per gallon to the maximum price established for tank cars in the respective territory by paragraph I of this Appendix. Issued this 2nd day of October, 1941. Leon Henderson Administrator CERTIFIED TO KE A TRUE COPY OF THE ORIGINAL John R, Hamm, Deputy Administrator ** Specifically designated percentages include all approximations thereof. 146 TITLE 32 - NATIONAL DEFENSE PM 1313 CHAPTER XI - OFFICE OF PRICE ADMINISTRATION Part 1316 - Cotton Textiles Amendment to Price Schedule No. 11 - Cotton Gray Goods Section 1316.7 (a) (2) is hereby amended in part, as follows: 1316.7 Schedule of Maximum Prices (a) Marimum Prices for Cotton Grav Goods (2) Group II. 2/ Type of Cloth Price per yard, f.o.b. seller's point of shipment Combed Lawns 36" - 76x72 9-3/44 36" - 68x80 10-3/4c 40" - 68x56 96 40" - 72x68 10¢ 40" - 76x72 10-1/44 40" - 86x80 11-1/4# 40" - 96x92 12-7/84 40" - 96x100 13-1/2# 4/ 40" - 106x112 16-3/84 45" - 76x72 11-7/8# 45" - 88x80 12-7/8$ 4/ For combed lawns of the construction 40" 96x100 which most United States Marine Corps specifications for Rubberized Poncho (adopted May 10, 1938, corrected to December 30, 1940), a premium of 3/44 per yard may be charged. (Executive Order No. 8734, 8875, 6 F.R. 1917, 4483) Effective October 4th, 1941. Issued this 4th day of October, 1941. (Sgd.) Leon Henderson Leon Henderson Administrator CERTIFIED TO BE A TRUE COPY OF THE ORIGINAL (Sgd.) John E. Hamm John E. Hamm, Deputy Administrator Regraded Unclassified OFFICE FOR EMERGENCY MANAGEMENT OFFICE OF PRICE ADMINISTRATION For Sunday AM's October 5, 1941 PM 1313 The high quality demanded by the United States Marine Corps in cotton cloth used in making rubberized ponchos for troops is recognized in an amendment to the cotton grey goods price schedule announced today by Leon Henderson, administrator, Office of Price Administration. The schedule has been amended so that a premium of 3/4-cent a yard may be added to the ceiling price of 13-> cents a yard for 40-inch combed lawn, 96 X 100, meeting the specifications for Marine Corps poncho material. The premium is intended to cover the higher costs involved in making this grade of goods. Marine Corps requirements call for high-tensile strength and complete absence of imperfections. ****** Regraded Unclassified 147 October 5, 1941. Dear Pai 1 have year letter about Count R. I. Coudenhove-Kalergi and shall be glad to ⑉ his again. I have put dewn as appointment for 3100 p.m., Monday, October 13th, and If be will be is Veshington then, I shall be able to talk with his. Unless I hear to the centrary, I shall consider this a definite engagement. Affectionately, (Signed) Henry Mr. Heary Norgesthan, 1133 Fifth Avenue, Bev York, New York. GEF/dbs Regraded Unclassified >10/6 Nmc 148 Kulunto monday 3 pm. 149 glod a see HENRY MORGENTHAU again 1138 FIFTH AVENUE NEW YORK CITY ask 7ni September 19, 1941 ty dear Henry: Count Coudenhove Kalergi called on me today and explained to me that he wrote a let- ter to the President of which I enclose you a copy. He feels that it would be very useful and important if right now, "A Government in Exile" were established for Austria in the United States. He says, in his opinion, it is very essential to do so before the war is decided. He thinks that the United States should withdraw their de facto recognition of Austrian annexation. He would ap- preciate it highly if you would give him the pri- vilege of calling on you in Washington. He says the moment you will let him know that you will see him on a fixed date, he will go up there. You probably will remember meeting him. He is the gentleman who is at the head of the Pan European movement. (His mother was a Japan- ese). I have seen quite a little of him, and find in extremely intelligent and energetic. With best love, Yours Pa 150 New York, September 1st, 1941 to the prosident of the United States publin D. Appsevelt, nite license, NT President, Pooply Improgred b. the high was rinciples of your Atlantic Charter, T venture :- not it to you and to /rime-Mister inston Churchill crunter on 2:00 Vice of instries Tnde- gurdenou del the 11ght of these 12020 principles. withdrawal of the de raoto recognition of merina and the reco nition of this ns- tion's independence by the the great Democracies would to alled by the entire world DF a first practical abo - the execution of your Atlontic 16 on be ready to consider the angrestions of is I would take the Initiative toward the constitution of a National Council for Amotria, to strieve 1- closest contact with the overments of the Democracios the final liberation and otten 0° Austries- Respectively yours, Count R.K. Coudenhove-Palergi, President of the Fan miropa Union. Regraded Unclassified TREASURY DEPARTMENT 151 INTER-OFFICE COMMUNICATION DATE October E, 1941. TO Secretary Morgenthau CONFIDENTIAL FROM Mr. Dietrich Registered sterling transections of the reporting banks were ne follows: Sold to commercial concerns £ 64,000 Purchased from commercial concerns £178,000 of the latter amount. £150,000 were bought from the Singer Seving Techine Company. Crien ourset sterling held steady at 4.03-1/2. The only reported transaction horsisted of £2,000 sold to a commercial concern. The Uruguayan free peso again improved 1/2# to close et .4600. One of the Rew York banks expressed the belief that the current strength in the Uruguayan peso time been due nainly to a small transfer of funds from Argentina to Uruguay. In cer York, closing cuotations for the foreign currencies listed below were 12 followst Cenadian dollar 11-3/8 discount Argentine peeo (free) .2345 Brarilian milreis (free) .0505 Colombian peso .5775 Mexican peso .2070 Veneguelan boliver .5775 Cuban peso 1/16% discount here were no gold transactions consummated by us today. The Federal Reserve Bank of Bev York reported that the Bank of Conade shimed 65,337,000 in gold from Canada to the Federal for account of the wovernment of Consda, for sale to the New York Assay Office. In Lonion, spot and forward silver were again fixed at 23-1/21 and 23-7/16d rementively. The U.S. equivalente were 42.67# end 42.55% The Treasury's purchase price for foreign silver was unchanged at 35¢. Eandy and Earman's settlement price for foreign silver was also unchanged at 34-3/46 tale no silver purchases today. Regraded Unclassified 152 - 2 - The report of October 1, received from the Federal Reserve Bank of New York, giving foreign exchange positions of banks and bankers in its district, revealed that the total position of all countries vas short the equivalent of $5,077,000, an increase of $592,000 in the short position since September 24. Net changes were AB follows: Short Position Short Position Change in Country September 24 October 1 Short Position* Ingland** $ 272,000 (Long) $ 70,000 (Long) + $202,000 Europe 2,615,000 2,553,000 - 62,000 Canada 162,000 (Long) 20,000 (Long) + 142,000 Latin America 46,000 (Long) 65,000 + 111,000 Japan 310,000 340,000 + 30,000 Other ABLA 2,093,000 2,279,000 + 166,000 All others 53.000 (Long) 70,000 (Long) - 17,000 Total $4,485,000 $5,077,000 + $592,000 *Plus sign (+) indicates increase in short position, or decrease in long position. Kinus sign(-) indicates decrease in short position, or increase in long position. **Dombined position in registered and open market sterling. D confidential Regraded Unclassified 153 THE WHITE HOUSE WASHINGTON PERSONAL October 8, 1941 Dear Mr. Secretary: I am afraid, as you will notice from the attached clipping from yesterday's Times, that the very thing I feared has happened. Yours sincerely, of Lauchlin Currie Honorable Henry Morgenthau, Jr., Secretary of the Treasury, Washington, D. C. Regraded Unclassified New York Times October 7. 1941 154 Chungking Is Encouraged CHUNGKING, China, Oct. 6 UP -Commenting today on visits of United States, British and Nether- lands Indies representatives, For eign Minister Quo Tai-chi said "they indicate increasing conpera- tion in various fielda among the A. B. C. D. [American, British, Chinese and Dutch] powers, and China is gratified." Dr. Henry F. Grady, President Ronsevalt's special Far Eastern aconomic representative, and J. G. Mulder, trade envoy from the Netherlands Indies, already have arrived in China, and Brig. Gen. John Magrader, head of & military lease-lend mission, 1a scheduled to arrive tomorrow from Hong Kong. Mr. Quo also announced arrange- ments to receive A, Britleh-Ameri- can economic mission headed by Sir Otto E. Memeyer and Merio Cochran. Regraded Unclassified 155 PARAPHRASE OF TELEGRAM RECEIVED FROM: American Consulate General, Hong Kong. Via N.R. DATE: October 8, 1941, 5 p.m. NO.: 403 THE FOLLOWING IS STRICTLY CONFIDENTIAL. FOR THE SECRETARY OF THE TREASURY FROM FOX, I consur that all of the nembers of the Board react unfavorably to the Department's (1) plan. The feeling of the Chinese members of the Board is especially strong, particularly with regard to the relegation of the central bank and the broadening of the other cooperating banks' powers. The Chinese members regard this plan as a reversal of the policy and position taken by the United States and, as such, is considered to be a serious matter. Their post- tion is briefly summarized as follows: 1. It is usually considered as an unfriendly net to freese the assets of a foreign country. In the present instant, the freesing of assets of a foreign country has been employed as a friendly gesture to aid China. The new plan would millify the benefits of freesing to China. 8. Certain foreign institutions are granted general license status in license Mo. 59. some of these foreign institutions are not really considered as banks. However, Chinese commercial banks of recognized standing are not included in this group. 3. Under the Regraded Unclassified 156 3. Under the now plan, all "seeperating" banks are extended the special powers which are granted to the Government of China and 198 Central Bank in License No. 60. The Central Bank may not be equipped to moor the full responsibility which Le imposed on 11 in Canton. Nowever, before the Central Bank has been tested, similar powers would be granted to a large musber of institutions which have not been tested. 4. There 10 recentment among the Chinese due to point 2 (above) which vould be heightened by point 3. they feel that 12 was a stop to strengthen the foreign banks at the Chincee banks' expense. 5. The granting of the case status as that of the Central Bank of China w other banks would constitute 4 show of distruct M will as a lack of confidence by the United States. This action would be taken as an admission to the world that a misteks had been nade by the United States. Action of this type would cause the Government of China "to loss face". The Chinese Government would also be placed in a situation which would be most use bearable. 6. Tentemount so putting the Board into the Banking business, the now plan 10 imprestical and places part of the functions of the Central Bank in the Board. In effect, the Heard would become the banker's bank. The Board would no doubt be called upon to do may of these Regraded Unclassified 157 those things which are ordinarily done by a central 1 Hall-Patch hesitated to express his opinion until after the arrival and discussion of the matter with Cochran and Bioneyer. Neverer, confidentially, Hall-Patch stated that the 'plea was bound to cause difficulties and appeared to be ill-considered". Furthermore, Hall-Fatch stated that a few esage in the plan were apparent, such as the following: (1) The now plan would man as unfreesing of all of the balances of the Chinese. (a) The plan is a radical change from the procedure of July 36. Considerable confusion would be the result of any attempt to put 12 into operation. (3) By the virtual elimination of general license No. 60, the plan would arouse strong opposition in Chungking. (4) Technically, Hall-Patch thought that the plan, should 11 be put into effect, would create a big dollar drain on the resources of the Board which are located in Homs Keng. The statement vas Mall-Patch, with regard THE to the Banque the (1) Tientsin branch had 10 positively had record, and (2) at the present time the bank is controlled free Brussels." This is the and of the usesage. The foregoing is a a paraphrase of the original mossage. Mail SOUTHARD Regraded Unclassified 158 ? Y FEDERAL reserve BANK OF ITSW YORK October 8, 1941. Sir: Attention: Mr. Frank Dietrich. We enclose for your files a copy of cable No. 3 dated October 8, 1941, received by us from the Stabilization Board of China, Hong Zong and a copy of our cable No. 2 to the Stabilization Board of China. Hong Kong. Respectfully, (Signed) D. J. Cameron D. J. Cameron. Manager, Foreign Department. The Honorable, The Secretary of the Treasury, Washington, D. C. Enc. Regraded Unclassified 159 COPY CUTGOING CARLEGRAM October 8, 1941 The Stabilization Board of China Hongkong No. 2 We have appropriated cigher "ZARIG" to have the following meaning "United States Dollar-Chinese Yuan Stabil- ination Fund of China. Special Account" STOP Your number 3. Payment made by debit of United States Dollar-Chinese Yuan Stabilization Fund of China, Special Account. In your future instructions please specify this account. FEDERAL RESERVE BANK OF NEW YORK Regraded Unclassified 160 COPY INCOMING CABLEGRAM October 8, 1941 Hongkong, October 8, 1941 Federal Reserve Bank of New York New York No. 3 Charge our account and pay National City Bank of the City of New York U.S. dollars 1,150,000 for account of National City Bank of the City of New York Shanghai branch office. Stabilization Board of China COPY:1c:8/9/41 Regraded Unclassified 161 CABLE To: Federal Reserve Bank of I. Y. From: Stabilization Board of China Hong Kong Date: October 8, 1941 #3. Charge our account and pay National City Bank of the City of New York U. S. Dollars 1,150,000 for account of National City Bank of the City of New York, Shanghai Branch Office. (Signed) Stabilization Board of China TEST OK (Rec'd. by phone from Fed.Res.Bk. of N.Y., 11:30 am, Oct.8/41-ek) NOTE: Cable states "Charge our account" and signed stabilization Board of China, whereas the $20,000,000 is held in the account entitled "U. S. Dollar-Chinese Yuan Stabilization Fund of China, Special Account." (init.) P.D. Regraded Unclassified 162 October s, 1941 TO: Mr. livesey, State Department FROM: V. 7. Cee SUBJECT: Cable to Winset will you please transmit the attached cable for Secretary Morgenthau. Original to State by special messenger 10/8/41 from Mr. Coe's office. VFC:iea 10/8/41 Regraded Unclassified 163 COPY October s, 1941 AMERICAN EMBASSY LONDON FOR AMBASSADOR WINANT FROM THE SECRETARY OF THE TREASURY Referring to your 4348 of September 17 Treasury is informed by Cex of Lend Lease that the Land Lease Administration is setting up machinery in Washington for dealing with difficult cases on experts Initialled by the Secretary (MMJ) Orig. sent to State 10/8/41 VFCTion 10/8/41 Regraded Unclassified 164 BRITISH EMBASSY, WASHINGTON, D.C. PERSONAL October 8th, 1941. AND SECRET Dear Mr. Secretary, I enclose herein for your personal and secret information copies of the latest reports received from London on the military situation. Believe me, Dear Mr. Secretary, Very sincerely yours, Halifax Honourable enry Horgenthau, Jr., nited States Treasury, Isshington, D. C. Regraded Unclassified 165 TALMORAN FROM LONDON DATED OCTOBER 6th, 1941. Reference tolegram of October 5th. Seven Swordfish attacked convoy of six ships northeast or Tripoli (L); one ship estimated 9,000 tons, one ship estimated 6,000 tons left in staking condition, one estimated 8,000 tons possibly danaged. Delieved one of the former sunk, reconnais- sance next day showing one ship missing eenvoy. 2. M.M. Submarine sank torpedo boat GENERALI class northwest of Messina on September 27th. Another of X.M. Submarines hit with inrpedo modium size morehant ship in convoy escorted by destroyers north bound 4 allow west of " (words outtted) " Time night 1st/ 2nd Detober, result unobserved. 3. Reference telegram of September 30th; lubmarins torpedoed tanker LIRI which not into CHOTONE: sank 3050 ton ship off ORTONA; also sank by ganfire pilot cutter, shore batteries compelled her withdrawal. 4. U.S. Subcarino an September 26th torpedoed 5,000 ton transport In the Aegean. DD September 28th, torpodoed large escorted morchant ship; result unobserved. On September 27th she also sank by canfire CAIQUE full of Italian soldiers. 5. At Tobruk on October 3rd 16, Travlor sunk by bomba during air raid. tanker THERED 5856 tona mined and runk Sues Cannl - October 5th. Canal probably recensed October Sthe 6. RATWAGTRI (R.I.N.) captured fully laden that off Serborn on October 5th on passage Madagasear to Djibuti. / Regraded Unclassified 166 - 7. Royal Air Force. October 5th. Few fighter sweeps over northern France. 8. Libya 3rd/4th. Bombers again attacked harbours of Benghasi and Bardia and petrol dump near latter. 9. Geman Air Force. 5th/6th. Few energy aircraft operating. 10. Cyprus. 3rd/4th. Enemy aircraft attacked again; no damage or casualties reported. 11. Russie, Finno-German forces have taken Petrosavodsk. German thrust developing north of Smolensk, -lloseow railway and southeast from Dniepropetrovsk bridge- head. Regraded Unclassified 167 TELSIBAM FROM DATED 1041 Near Firtunes Sunsian submine smok merchant vessel 5000 tons on October Sed and torpedoed motor torpedo boat and morehant vassel on October other 2. On September 20th British submarine top- pedoed 6000 ton transport in Gulf of Athens, on September 28th, large escorted merchant vessel in the same vicinity. One hit obtained in each case results unobserved owing to counter attacks. She also sank by gunfire off Milo on September 27th CAIQUE carrying Italian troops. 3. Wight of October 4th/5th small British merchant vessel with Dauxite from Georgetown to Trinidad sank owing to Internal explosions when cast of Trinidad. Sabotage suspected all Grew saved. 4. During air attack over Suez Canal on October 5th/6th British nedium morchant vessel vas sunk at snohor southern end Gulf of Sues. 5. Royal Mr Force, October 6th. Hurrisanes of which one missing damaged two armed trewlers off Ostend and probably sank third. 0. Libra. October 4th/5th. Wellingtons attacked Benghasi harbour; fire and explosion seen on one ship. Officers quarters at Benina aerodrose hit and fires started near power station at Baree and stores dump near Bardis. 7. October 5th/6th. Fifteen tons of bombs dropped on Tripoli (L) setting fire to large oil tanker and scoring hits or near misses on two merchant vessels. Regraded Unclassified 168 - 2 - B. German Air Force. Octol 6th/7th. Few enemy aircraft operated. 9. Libra. October 46h/5th. Tobruk bombed for eight hours by about 50 aircraft. 10. Malta October 4th/Sth. Two aircraft dropped bombs causing few civiliancasualties and slight damage to property. 11. Smolensk Sector: No definite news. Fighting continues southwest of Kharkov. Cormans progressing towards the Sea of Anor. Regraded Unclassified 169 CONFIDENTIAL MILITARY INTELLIGENCE DIVISION TENTATIVE LESSONS BULLETIN WAR DEPARTMENT No. 165 Washington, October 8, 1941 G-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 leasons 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, see Letter TAG 350,05 (9-19-40) M-3-11, GERMAN ASSAULT ARTILLERY AND 75-MM, TANK WEAPON SOURCE The section on RESPULT artillery is based woon notes com- piled by a British official source and submitted on August 15, 1941, by AT. American official observer in London, The notes on the test firing of the 75-mm, tank weapon are based woon E report submitted by en American official observer in Cairo on June 24, 1941. It is hoped that this bulletin will serve to supplement, and Dring more up-to-date, the information contained in T.L.B. No 119, CONTENTS 1, ASSAULT ARTILLERY 3. 75-MM. GUN IN GERMAN 19K. IV TANK CONFIDENTIAL - : I Regraded Unclassified 170 CONFIDENTIAL GERMAN ASSAULT ARTILLERY AND 75-12, TANK WEAPON 1. ASSAULT ARTILLERY a. Introduction In recent campeigns, Germen entitank guns end infantry artillery werdons have appeared on self-propelled mounts, In each case the mounting has been improvised from an existing type of mase-produced tank. It is evident in some cases that the older types of tanks such ns the Mk. I - which exist in large numbers - end possibly the 10c. II are being converted into artillery asseult weapons. For the most gart, regorts concerning the guns mentioned herein have been substantinted by instographic evidence. b. 75-mm, Infentry Support Gun This zun is mounted on a Tk, III tenk chassis from which the turret nes been ompletely recoved. The gun is mounted in the well of the tank, and screens of armor-plating protect the crew from at least three sides. The height of the gun from the ground seens to be about four feet. The overall height of the vehicle is about five feet, which gives it pr exceptionally well-streanlined appearance, Its mobility and armor-plating are no doubt designed to allow it to move up to the forward line in an attack, The gun has the same performance ES the 75-cm. piece which is mounted on the NK, IV trnk and probably has a naximim range of 9000 yards. The built-up superstructure for the pro- tection of the crew is entirely welded, but there ie no accurate indi- cation of the thickness of the armor. Since the ardor basis of the 120, III hull is 30-mm., however, this superstructure may Plso be of that thickness. The ammunition is carried in an armored trailer, which is towed by an ermored tractor. The latter is semi-trocked, has a very long bonnet, B. low driving compartment, and B. streemlined tail: its over-Il height is about four feet. Amminition eppears to be carried in the tail of the tractor AS well R6 in the trailer. c. 105-mm, Assault Gun It has been established from photographic evidence that a 105-mm. assent gun is in existence. It is not known whether the mount is the cane as that of the 75-cm, gun, but this type of equipment must cer- tainly be expected to spnear in certain formations, such as the heavy armored division, No detnils of the can are known, but it may well be IDENTIAL 2 Regraded Unclassified 171 CONFIDENTIAL an adaption of the 105-mm, gun-howitzer - the light field howitzer of 1918 - which has a considerably greater range than either the 75-mm. or the 150-mm. infantry gun and which is suitable for firing either armor- piercing or H.E. ammunition. d. 150-mm. Assault Gun Photographs of the 150-mm, assault gun show it mounted on the hull of B. Vk.I, light tank. The superstructure of the tank has been entirely removed and has been replaced by & high box-like shield with 8 slightly sloping front, This shield gives protection to the crew from three sides. It appears that the crew stand behind the gun on B. platform which is built on the hull of the tank, It may be, therefore, that amminition is carried in the well of the tank. The range of this gun 18 6000 yards, and the weight of the projectile is 80 pounds. 8, 25-mm, Self-Propelled Antitenk Gun Reorganizations have made large numbers of Mk.II, 9-ton tanks available for conversion, and recent information suggests that one of the uses to which they have been put is that of providing light, mobile, antitank equipments. It is probable that the Germans captured or took over from the French more than 3000 Hotchkies 25-mm, antitank guns, and it is believed that at least 2000 Mk.II tanks may be in existence, al- though it does not follow, of course, that they are all being converted into mobile antitenk guns, It Le not known whether the turret of the tank has been removed or whether the gun has been mounted in the existing turret in place of the 20-mm. heavy machine gun. Their mobility and armored protection, however, would give definite advantages over the ordinary entitank battery. The cheracteristics of this self-propelled weapon would be as follows: Weight: 9 tons - approximately Armor thickness: 20-m. Maximum road speed: 24 miles per hour Cross-country speed: 16 miles per hour Spanning capacity: 4 feet 11 inches Fording depth: 2 feet 6 inches Muzzle velocity: 3000 foot seconds Weight of armor- 11,3 ounces piercing shot: Penetration: 1.91 inches at normal at 400 yards 1,22 inches at 22 degrees at 400 yards 1. 47-mm. Self-Propelled Antitenk Gun Recent reports point to the existence of tank destroyers con- sisting of a 47-mm. antitank gun mounted on & self-propelled carriage and CONFIDENTIAL - 3 - Regraded Unclassified 172 CONFIDENTIAL protected by armor. No details of the equipment ere as yet definitely known, but the carriage is probably a converted Mk.I or Mk.III tank. The gun employed may be either the Skoda 47-mm,, the French 47-mm, anti- tank gun, or the new German 50-mm, entitank gun' - TJV, No details of the latter are available yet, but the specifications of the two former are as follows: Skoda 47-mm, French 47-m, Muzsle velocity: 3000 foot seconds 2800 foot seconds Approximate weight of projectile: 3.75 pounds 3.80 pounde Penetration: Unknown, but 2,36 inches at 30° estimated as com- at 650 yards parable to the 3,15 inches at 10° French model. at 200 yards g. Comments of Official Observer Information available at present indicates that the weapons listed above have definitely been mounted on self-propelled carriages converted from tank chassis and that these guns are included in the light armored divisions, the heavy armored divisions, and possibly in the motorized infentry divisions. It may well be, of course, that a specially designed self-propelled mount is under consideration by the Germans, and that the present improvisation has been affected in the interests of production speed. Equipment as a whole is thus given a very good cross-country performance and an ability to negotiate ob- stacles and ground which is unsuitable for wheeled vehicles. In addi- tion, the crew Are given protection at least against small arms fire and possibly agrinst even heavier weapons and H.E. projectile splinters as well, This support artillery 1s thus geared up to the armored brigade with respect to speed, mobility. and to a certain extent, pro- tection of personnel. Base of concealment has, of course, suffered, but to compensate for this, the equipment has been very thoroughly streamlined and the frontal target 18 very low. The Germans have always felt that speed will compensate for drawbacks such 86 this. The equip- ment has been seen and reported on in the Balkan and Middle Zast can- paigns. 2. 75-MM, GUN IN GERMAN MK, TANE Test firing with the 75-mm, gun of a German Mk, IV tank was responsible for the data that follows, The target consisted of the open front of a British A-10 cruiser tank with two pieces of 5/8 inch *This gun is now known to be the Skoda. Observer's Note. CONFIDENTIAL - 4 - Regraded Unclassified 173 CONFIDENTIAL armor placed in front of it. a. Range at Maximum Elevations The maximum elevation of the gun is about 22°. Two rounds were fired, and the maximum range was determined to be about 9000 yards. b. Renge of 6000 Yards Due to the mirage on the desert, it was impossible to lay accurately on a small target at 6000 yards. Large targets or areas, however, could be successfully engeged at this range. One round each of H.3. and armor-piercing tracer amminition was fired. The H.E. appeared to be the more accurate. The tracer of the armor-piercing projectile was plainly visible for the entire trajectory. c. Range of 1500 Yards Twelve rounds of H.B. and two rounds of armor-piercing tracer ammunition were fired at 1500 yards without registering B direct hit. Several near misses were observed, the nearest being within three feet. Had the target been as large as a complete tank, direct hits could have been registered. Fragments from the near misses scarred the armor to a depth of approximately one-sighth of an inch. d. Range of 1000 Yards Six rounds of H.E. were fired at 1000 yards: only one direct hit was registered. The fuze setting of the projectile was instantaneous. The direct hit dented the outer armor plate to a depth of about one inch, causing a little flaking on the inside. Fragments from the near misses scarred the armor to a depth of about one-fourth of an inch. e, Range of 500 Yards The same target was engaged and ten rounds of H.Z. and two rounds of armor-piercing tracer were fired at 500 yards. Two direct hits with each were registered. The H.E., with instantaneous fuze setting, penetrated the first thickness of armor and split the plate from six to eight inches in all directions from the point of impact. The second thickness was dented to a depth of about en inch and B. half with two cracks about four inches long extending out from the point of impact. The inside flaked considerably. The H.E., with the fuze set at .15 second delay, completely shattered both plates, breaking the outer one into eight large pieces and many smaller ones and the inner plate into five large pieces and several smaller ones. CONFIDENTIAL - 5 - 174 CONFIDENTIAL The armor-piercing rounds cleanly penetrated both thicknesses of outer plate. One round struck the edge of the armor plate of the main turret and chipped a small piece off. The other round passed through both thicknesses of five eighths inch outer plate and into the main turret through the gun opening, breaking up on the back wall of the main turret but causing no damage to the armored plate of the turret. f. Comments of Official Observer Fragmentation of the H.E. was excellent. The largest pieces found were two and one-half by one and one-half inches. Fragments were picked up a hundred yards from the point of impact. In hard, fine, gravel soil, craters were small, varying from 18 inches to 28 inches in diameter and from six to eight inches in depth. The craters contained no fragments. The gun is smooth in action and easy to fire, although both the gunner and loader are very cramped for space. An elevating and traversing mechanism other than the power traverse allows for fine ad- justments for laying. CONFIDENTIAL - 6 - i 175 RESTRICTED 0-2/2657-220; No. 513 M.I.D., W.D. 11:00 A.M., October 8, 1941 SITUATION REPORT I. Eastern Theater. Ground: Desperate fighting is in progress along the whole central front. German High Command reports the encirclement of several Russian armies in the vicinity of Vyazma, west of Moscow. A German armored force having captured Orel, con- tinued its advance to the northeast as far as Mtzensk. Germans claim that the armored force moving south- east, east of Melitopol, reached the Sea of ABOV and captured the towns of Mariupol and Berdyansk. Air: German sources reported raids in the Moscow and Lenin- grad areas, and on the arms factory at Rostov, gateway to the oil re- gions of the Caucasus. This is the first report of a raid on Rostov and is not confirmed from any other source. II. Western Theater. Air: The R.A.F. was grounded by bad weather last night. German activity was probably limited, with small damage in southwest- ern England and south Wales, the only results. III. Middle Eastern Theater. Air: The Axis claims strong activity and heavy damage from attacks on the Suez Canal area. British planes bombed Tripoli, while Axis aircraft operated over Malta. RESTRICTED Regraded Unclassified CONFIDENTIAL 176 Paraphrase of Code Cablegram Received at the Var Department at 10:04, October 9, 1941 GAIRO, filed 20:11, October 6, 1941. (Lient. Colonel Fellers continues his susnary of the relationship between air and nevel power). 1. There appears to be DO sound legie in the netting up of a separate air are in the United States arred forces. In the future this country will face IN accressor who will attack through the mediums of sen, sir and lead, ned to successfully repulse this forms our OWD defenses must be coordinated under n su - rese high command. In peace or in VAP, the training of our Air Force should be periodically essigned to , theiter commander in the Havy OF the Army. 2. Neference M.A. Cairo Report Be. 1997. the conclusions drava therein are that the healeyhere of the American onr net - IA cir-tight protection with a reasonably yowerful novel fores supported by adequate eir cover. This was che laenon that the Brittsh Mediterrensen Fattle Fleet learned la Kythere Straits last May. 1.11. + D. 10/8/41. Distributions Chief of Steff Chief of the /ray Alp Jestion Var Plans Mviston ffice of Noval Intelligence (3) Record Section Intelligence Breach Secretary of Treasury Air Corps (3) Section File Collection Segting C\ 311 ve ConsiDents Regraded Unclassified 177 Puraphrase of Code Cablegram Received at the War Department CONFIDENTIAL at 2:11 Palling October e, 1941. London, filed: 4:40 p.m., October s, 1941. No. 637 1. British Air Activity over the Continent. a. October 7, 130 fighter aircraft were active as follows: 19 on special missions) 72 protecting shipping, and 39 on interception patrols. All R.A.F. activity we limited by bad flying weather. 2. German Air Activity over Britain. 4. October 6, day. 10 recommaissance aircraft and 5 long range bombers. October 6, night. 20 long range bombers. b. October 7. day. Small scale coean reconnaissance along East Coast. October 7, night. Limited activity against southwest coast shipping. While on interception patrol over the Devonshire Die- trict, 1 Beaufighter was allowed to approach within 400 yards of a He-111. The deliberate action of the He-111 was then to climb and drop 6 cannisters, approximately one foot in length, which were at- tached by nearly one yard of wire to a parachite. No apparent st- tempt was made to take cover in the clouds. 3. Aircraft Losses Reported. a. British losses. October 81 No R.A.F. casualties reported in Western Theater. October 6, No losses were sustained by the R.A.F. when Germans attacked the R.A.F. at their Murmansk airfield. October 6, 2 pilots of Hurricans fighters were lost in an engage- ment with Me-109's in the Sidi Casr area. b. Aris losses. October 6. 2 of the attacking Ju-88's and CONFIDENTIAL Regraded Unclassified 178 CONFIDENTIAL 1 Me-109 were shot down, probably six more Ju-88's were crippled and 3 Ju-88's forced to turn back by Nurricanes protecting an R.A.F. air- droms near Mursansk, October 6, day: 1 Mo-1.09 shot down and 1 prob- ably destroyed in the 3141 Oner area. 4. British Air Activity, Other Theaters. a. Middle Eastern Theater. October 5-6. Eight. A supply train at Bardia was bombed by 6 Wellingtons. 6 Wellingtons attacked Benghagi. October 6, day. In the Sidi Omar area, 14 Me-109's were intercepted by 12 Tomahawks, Comiso Airfield was basbed by 9 Purricanes. October 6- 7, night. High Explosive bambe totaling 12 tons were released by 8 Hurricanes over Tripoli Harbor. Apparently one 10,000 ton ship was damaged. 5. Axis Air Activity, Other Theaters. a. Western Theater. October 6. Airfield at Murmansk, North Russia, was attacked and bombed by 14 bombers and 6 fighters with little resultant destruction. b. Middle Best. October 5. The Sues canal was attacked by Axis planes. The Tobruk district was bombed by anti-personnel bambs, Lee I. 3. #4, 9.45A, 10/9/41 Distribution: Chief of the Army Air Forces State Department (2) War Plans Division Office of Maval Intelligence (2) G. H. Q. Record Section Intelligence Branch Secretary of Treasury Section File Collection Section B.K. 0-3 A.C. B& ME CONFIDENTIAL N.E. Regraded Unclassified 179 TREASURY DEPARTMENT Washington FOR RELEASE, MORNING NEWSPAPERS, Press Service Thursday, October 9, 1941. No. 27-91 10/8/41 Secretary of the Treasury Morgenthau today offered for cash subscription, through the Federal Reserve Banks, at par and accrued interest, $1,200,000,000, or thereabouts, of 2-1/2 rercent Incosury Bonds of 1967-72, and at the same time announced pro- vision for refunding the 1-1/4 percent Treasury Notes of Series C-1941, maturing December 15, 1941, through offering to the holders of such maturing notes the privilege of exchanging them for additional amounts of the Treasury bonds now offered for cash subscription. the exchanges to be made per for par, with interost adjustments 90 of October 20, 1941. An additional smount of $100,000,000, or thereabouts, of the bonds may be sold to Government Investment Accounts during the noxt month. The Trensury Bonds of 1967-72 now offered for cash sub- scription and in exchange for the notes due December 15, 1941, will be dated October 20, 1941, and will boar interest from that data at the rate of 2-1/2 purcent per annum, neyable semiennually on March 15 and September 15. The first counon due March 15, 1942, will be for 8 fractional period. The bonds will mature September 15, 1972, but may be redeemed, st the option of the Regraded Unclassified 180 - 2 - United States, on and after September 15, 1967. They will be issued in two forms: bearer bonds with interest counons attached, and bonds registered both as to principal and interest. Both forms will be issued in the denominations of $50, $100, $500, $1,000, $5,000, $10,000 and $100,000. Pursuant to the provisions of the Public Debt Act of 1941, interest upon the bonds now offered shall not have any exemption, as such, under Federal Tax Acts now or hereafter enacted. Other- wise the securities will be accorded the same exemptions from taxation as are accorded other issues of Treasury bonds now outstanding. These provisions are specifically set forth in the official circular released today. Subscriptions will be received at the Federal Reserve Banks end Branches, end at the Treasury Department, Washington. Bank- ing institutions generally may submit subscriptions for account of customers, but only the Federal Reserve Banks and the Treasury Department are authorized to act as official agencies. Cash subscriptions for the bonds from banks and trust companies for their own account will be received without deposit but will be restricted in each case to on amount not exceeding one-half of the combined capital end surplus of the subscribing bank or trust company. Cash subscriptions from all others must be Regraded Unclassified 181 - 3 - accompanied by payment of 10 percent of the amount of bonds applied for. Exchange subscriptions should be accompanied by & like face amount of 1-1/4 percent Treasury Notes of Series C-1941, due for payment on December 15, 1941, with final counon due December 15, 1941, attached, and following the accentance of the notes, accrued interest from June 15 to October 20, 1941, about $4.34 per $1,000 face amount, will be peid the owners of the surrendered notes. The right is reserved to close the books as to any or all subscriptions or classes of subscriptions at any time without notice. Subject to the reservations set forth in the official circular, all exchange subscriptions will be allotted in full. The basis of allotment of cash subscriptions will be publicly ennounced, and payment for any bonds allotted must be made or completed on or before October 20, 1941, or on leter allotment. There are now outstanding $204,425,400 of 1-1/4 percent Treasury Notes of Series C-1941, maturing December 15, 1941. The present offering affords to holders of the maturing notes an opportunity to exchange them for other interest-bearing obligations of the United States. Any notes not SO exchanged at this time will be paid in cash following their presentation on end after December 15, 1941. The text of the official circular follows: Regraded Unclassified 182 UNITED STATES OF AMERICA 2-1/2 PERCENT TREASURY-BONDS OF 1967-72 Dated and bearing interest from October 20, 1941 Due September 15, 1972 REDERMABLE AT THE OPTION OF THE UNITED STATES AT PAR AND ACCRUED INTEREST ON AND AFTER SEPTEMBER 15, 1967 Interest payable March 15 and September 15 TREASURY DEPARTMENT, 1941 Office of the Secretary, Department Circular No. 670 Washington, October 9, 1941. - Fiscal Service Bureau of the Public Debt I. OFFERING OF BONDS 1. The Secretary of the Treasury, pursuant to the authority of the Second Liberty Bond Act, as amended, invites subscriptions, at par and accrued interest, from the people of the United States for 2-1/2 percent bonds of the United States, designated Treasury Bonds of 1967-72. The amount of the public offering is $1,200,000,000, or thereabouts, with the right reserved to the Secretary of the Treasury to increase the offering by an amount sufficient to accept all sub- scriptions for which Treasury Notes of Series C-1941, maturing December 15, 1941, are tendered in payment and accepted. In addition to the amount offered for pub- lic subscription, $100,000,000, or thereabouts, of those bonds may be allotted to Government investment accounts against cash payment. II, DESCRIPTION OF BONDS 1. The bonds will be dated October 20, 1941, and will bear interest from that date at the rate of 2-1/2 percent per annum, payable on a semiannual basis on March 15 and September 15 in each year until the principal amount becomes payable. They will mature September 15, 1972, but may be redeemed at the option of the United States on and after September 15, 1967, in whole or in part, at Regraded Unclassified 183 - 2 par and accrued interest, on any interest day or days, on 4 months' notice of redemption given in such manner as the Secretary of the Treasury shall prescribe. In case of partial redemption the bonds to be redeemed will be determined by such method as may be prescribed by the Secretary of the Treasury. From the date of redemption designated 15 any such notice, interest on the bonds called for redemption shall cease, 2. The income derived from the bonds shall be subject to all Federal taxes, now or hereafter imposed, The bonds 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 tax- ing authority. 3. The bonds will be acceptable to secure deposits of public moneys, but will not bear the circulation privilege and will not be entitled to any privilege of conversion, 4. Bearer bonds with interest coupons attached, and bonds registered as to principal and interest, will be issued in denominations of $50, $100, $500, $1,000, $5,000, $10,000 and $100,000. Provision will be mde for the interchange of bonds of different denominations and of coupon and registered bends, and for the trans- fer of registered bonds, under rules and regulations prescribed by the Secretary of the Treasury, 5. The bonds will be subject to the general regulations of the Treasury Department, now or hereafter prescribed, governing United States bonds. III. SUBSCRIPTION AND ALLOTMENT 1, Subscriptions will be received at the Federal Reserve Banks and Branches and at the Treasury Department, Washington. Subscribers must agree not to sell or otherwise dispose of their subscriptions, or of the securities which may be 184 - - allotted thereon, prior to the closing of the subscription books. Banking in- stitutions generally may submit subscriptions for account of customers, but only the Federal Reserve Banks and the Treasury Department are authorized to act as official agencies, Others than banking institutions will not be permitted to enter subscriptions except for their own account, Cash subscriptions from banks and trust companies for their own account will be received without deposit but will be restricted in each case to an amount not exceeding one-half of the com- bined capital and surplus of the subscribing bank or trust company. Cash sub- scriptions from all others must be accompanied by payment of 10 percent of the amount of bonds applied for. 2. The Secretary of the Treasury reserves the right to reject any sub- scription, in whole or in part, to allot less than the amount of tonds applied for, and to close the books as to any or all subscriptions at any time without notice: and any action he may take in these respects shall be final. Subject to these reservations, subscriptions in payment of which Treasury Notes of Series C-1941 are tendered will be allotted in full. Allotment notices will be sent out promptly upon allotment, and the basis of the allotment will be publicly announced. IV. PAYMENT 1. Payment at par and accrued interest, if any, for bonds allotted on cash subscriptions hereunder must be made or completed on or before October 20, 1941, or on later allotment. In every case where payment 1s not so completed, the pay- ment with application up to 10 percent of the amount of bonds applied for shall, upon declaration mede by the Secretary of the Treasury in his discretion, be for- feited to the United States. Any qualified depositary will be permitted tc make payment by credit for bonds allotted to it for itself and its customers up to any amount for which it shall be qualified in excess of existing deposits. when Regraded Unclassified 185 - 4 - so notified by the Federal Reserve Bank of its district. Treasury Notes of Series C-1941, maturing December 15, 1941. with coupon dated December 15, 1941, attached. will be accepted at par in payment for any bonds subscribed for and allotted, and should accompany the subscription. Accruad interest from June 15. 1941 to October 20, 1941, ($4.33743 per $1,000). will be paid following acceptance of the notes. V. GENERAL PROVISIONS 1. As fiscal agents of the United States, Federal Reserve Banks are authorized and requested to receive subscriptions, to make allotments on the basis and up to the amounts indicated by the Secretary of the Treasury to the Federal Reserve Banks of the respective districts, to issue allotment notices, to receive payment for bonds allotted, to make delivery of bonds on full-paid subscriptions allotted, and they may issue interim receipts pending delivery of the definitive bonds. 2. The Secretary of the Treasury may at any time, or from time to time, prescribe supplemental cr amendatory rules and regulations governing the offer- ing, which will be communicated promptly to the Federal Reserve Banks. HENRY MORGENTHAU. JR., Secretary of the Treasury. Regraded Unclassified 186 October 9, 1941 9:15 a.m. GROUP MEETING Present: Mr. Blough Mr. Thompson Mr. Johnson Mr. Waesche Mr. Buffington Mr. Graves Mr. Kuhn Mr. Foley Mr. Schwarz Mr. Odegard Mr. Sullivan Mr. Haas Mr. White Mr. Bell E.M.Jr: When I had this meeting at 8:15 I told them to call Ed Foley first and George Haas second. I wonder what happened to Chester Barnard? Blough: He went to a conference in Atlantic City today. H.M.Jr: What is that? Blough: I don't know the nature of it but that is what his secretary said when I checked with her this morning. H.M.Jr: Ed? Foley: Dean called up yesterday and said that Mr. Hull had made arrangements or wanted to make arrange- ments with the Japanese so that three Japanese Regraded Unclassified 137 - 2 - owned boats could come in to bring over some two or three thousand American citizens from Japan and take back from here an equal number of Japanese born residents to Japan. And they wanted to make sure that if they came in the vessels would not be libelled, and they had made arrangements with the Department of Justice so that the Department of Justice would go in to court and make representations to the Federal judge in the event that libels were filed that the vessels were owned by the Japanese Govern- ment, and therefore were not subject to private law suits. They wanted to find out whether or not we would grant the necessary oredit so that they could make purchases of bunker supplies and ship stores and other things 80 they could get out. There is no question here about cargoes. It is merely bringing people over and taking people back. H.M.Jr: Send back two Japanese for every U. S. citizen? Foley: I think it is going to be on a per capita switch, but I told them that if that was what Mr. Hull wanted we would carry out our end of the bargain and see that clearances were granted and that frozen funds were made available so that the ships' stores can be purchased. We have a letter from the Secretary of State saying that the Panamanian Government is going to revoke the charter of all ships under Panamanian registry that are armed and the Maritime Commission now has seven vessels under Panamanian registry with arms on them, and they are taking the arms off. The State Department doesn't want us to let any Panamanian ships out that are armed until the arms have been removed. H.M.Jr: That is Waesche. Regraded Unclassified 188 - 3 - Foley: Yes, and Customs. H.M.Jr: Now, Ed, I thought at ten o'clock tomorrow you could come in with Pehle and with Kuhn and anybody else that you want on this program for publicizing educational - Foreign Funds. It is an educational job and I would like Peter Odegard to sit in on it, please. You might educate him beforehand. Foley: Ferdie and I have had B. talk in line with our discussion on Monday. H.M.Jr: But with Peter? Foley: I haven't talked with Peter. We talked about getting somebody under Ferdie. H.M.Jr: But you have got & whole program. Foley: That is right, the balance of that will have to be worked out. H.M.Jr: But I will give you half an hour tomorrow morning. Foley: All right. H.M.Jr: Dan, you ought to be in on that. It is dealing with the banks. Bell: All right. Ten o'clock? H.M.Jr: Ten o'clock and if B.M. Edward is here, he ought to be in on it. Graves: I think he will be here. H.M.Jr: Inasmuch as we are asking the banks to educate, I think you (Buffington) might sit in and listen, you see. Here is something quite new and we are trying to do a teaching job with the banks on how to handle all these regulations of Foreign Funds. You might get ideas. So I think at ten Regraded Unclassified 189 - 4 - tomorrow, and also I would like you to sit in on the eleven o'clock meeting on the Defense Savings Bonds program. Buffington: Today or tomorrow? H.M.Jr: Today. Eleven today and ten tomorrow. Foley: Here is a little thing that Leon would like to have you -- H.M.Jr: Is B. M. Edward going to be here? Foley: Harold said he thought he would be. H.M.Jr: Will somebody deliver B. M. Edward here tomorrow at ten o'clock? Graves: Yes. Foley: That is something Leon would like to have you give him a boost on at your press conference this afternoon, if you could. H.M.Jr: Read it out loud, please. Foley: All right. Leon has issued an appeal to all manufacturers that the new excise taxes, once they become effective, not be included in the base upon which the mark up is made more than once. In other words, if it is a ten dollar excise tax and the article costs a hundred dollars, once the wholesaler sells it to the retailer and then the retailer sells it again before it goes to the consumer, that the ten dollars not be included two or three times in the base upon which the mark up is made. H.M.Jr: He is right, but I can't do that ad lib. It is too important and I wish you would turn it over to Kuhn and the first time I have a chance to say something formally, you see, Ferdie. I Regraded Unclassified 190 - 5 - am not going to - I don't know enough about it, Ferdie. Who is it, Joe O'Connell brings that up? Foley: Yes. H.M.Jr: Ferdie, talk with Joe O'Connell and look into it more, but I don't want to just do it offhand. Foley: Here is a personal thing. This is a letter to Cornell in regard to that note. He wants to wind up that company. I suggest that you take it because you are going to be better off. He will give you his note for five thousand, with interest. What you are getting is a personal obligation and you have nothing now but a writing as to a corporation which has virtually no assets. He wants to dissolve the corporation and assume the liability personally and I should say that that was a generous act on his part. I think you will be better off. Klotz: It seems too generous. H.M.Jr: If I ever get that five thousand we will throw a party. Klotz: It is in the record. Foley: I think he is trying to act like a gentleman. That is all the way through that file. This letter addressed to Fly on an amendment to the Communications Act of 1934 was sent back to me with a notation that you wanted to talk to me about it. H.M.Jr: I don't know a damn thing about it, Ed. I mean, somebody drops this on my desk without any explanation. What is it all about? Foley: Well, this -- Regraded Unclassified 191 - 6 - H.M.Jr: I mean, I can't read all that stuff. Foley: Well, briefly the bill would authorize the President in time of war or when war is imminent to close or requisition or take over all types of communication facilities, assign preferences and priorities to all types of communications, permit radio communications upon any frequency and on any matter, and so forth. H.M.Jr: Well, why do I get in on it? Foley: Well, we are in on it because of Coast Guard. H.M.Jr: Has the Admirel seen it? Foley: Yes, it has been initialed by Gaston -- H.M.Jr: What am I saying, it is all right? Foley: We are saying it is all right except a provision in there that says if there is war, then the President has to have these functions administered either by the Secretary of War or the Secretary of the Navy. We say it is unduly restrictive and the President's hands shouldn't be tied, but he should be able to assign these duties to any department that he wants to. H.M.Jr: I bet you Waesche never saw it. Bell: May I see it, because I have been handling it with the Navy and I would like to see it. Foley: This isn't censorship. This is not that matter; this is a matter of just tightening up the controls over the communications. H.M.Jr: Have you ever seen it, Waesche? Waesche: No, sir, I haven't seen it. Regraded Unclassified 192 - 7 - H.M.Jr: Let Waesche take 8. look at it because it may leave Coast Guard out in the middle of the ocean. Foley: Gaston initialed it. H.M.Jr: Did he? Foley: Yes. H.M.Jr: Get it back to me tomorrow, Waesche. Waesche: Very good. H.M.Jr: What else? Foley: That is all. H.M.Jr: I have never been through three harder days than on this financing. The interesting thing is, the New York Tribune amazingly - the notice only went out last night - has a swell editorial on our financing and the New York Times on the financial page writes, well, we are just going to the banks, and so forth and so on. Just the old tripe. The New York Tribune, somebody there had some brains. Schwarz: They are far ahead. They are stepping out. H.M.Jr: The thing only went out yesterday and they have already got an editorial on the thing and they are comparing it to the World War. The Treasury has different kinds of securities for different people and that this is the way to do it, and 80 on. Bell: Nick Gregory came in and talked to me last night. I assume he fed that to the editorial staff. H.M.Jr: It was a nice job. They put it all over the Times. Regraded Unclassified 193 - 8 - Bell: Rights are selling for - I don't know if they are selling yet, but they are being quoted around at over a hundred and three. H.M.Jr: Was it you or Rouse told me they were going to have a meeting to try to sell some of the Fed's rights today? Bell: Rouse was trying last night to get in touch with the Executive Committee to get authority to sell some of the rights in case they thought it was necessary instead of exchanging them. I would say that this price would justify the sale. H.M.Jr: The only thing I am sorry for on that issue, I should have paid that two hundred million issue off in cash. I should have paid it off because here is a two hundred million issue controlling a billion and a half issue. Bell: Well, that is very unfortunate, but I think it would also be unfortunate for you to announce that policy within two months of the maturity date. H.M.Jr: Well now, go after that United States Housing, Dan, you see. Bell: United States Housing? H.M.Jr: Yes, that next issue. Bell: I think we might let the word drop that we may pay off the Commodity Credit because we have got enough cash to pay off half of it, anyhow. H.M.Jr: Which comes first? Bell: The Commodity Credit comes November fifteenth, I think. H.M.Jr: Well, I want B. meeting next week. I don't want Regraded Unclassified 194 - 900 to do it today. I want a meeting next week. I want Walter Stewart here. I will have it whatever day he can be here. Now, did you look up that - was it in the circular about banks lending to people who want to buy this? Bell: Yes. You may recall that we wrote a letter to all the banks on May 27, 1936, about our financing. H.M.Jr: Now Dan, don't do that to me 80 early in the morning. Bell: That was quite a letter and got a lot of publicity. I thought maybe you read it. We told the banks that they would greatly assist us in this program if they would cooperate by avoid- ing making loans, unsecured loans or loans without collateral and asked them to put into their certificate, when they submitted sub- scriptions for customers, that they were made in good faith to meet the customers' legitimate requirements and that the bank had no beneficial interest whatever in those securities. Now, that has been done since '36, but I take it what happened - from Mr. Graham, a man whom he knows has a line of credit in his bank and he merely walks in and says, "I want a hundred thousand dollar credit, and then he puts in a subscription of a hundred thousand dollars. He doesn't have to tell the bank what he wants the hundred thousand for. H.M.Jr: Well, Dan, will you, for me, get out word to the people who do the controlling of this thing -- Bell: Yes, I will do that. H.M.Jr: There are people, aren't there? Bell: Federal Reserve banks police these subscriptions. Regraded Unclassified 195 - 10 - H.M.Jr: Will you get out word this morning, I want them about. to look for the kind of cases Mr. Graham spoke Bell: I will do it right afterward. H.M.Jr: This man Graham, he is one of the smartest fellows. He is president of the First National of Baltimore, isn't he? Bell: I don't know. H.M.Jr: And he comes in and he says the department store there will come in to him and say, "We have got a line of credit for a million dollars, and he will say, "Yes," and they will say, "Put us down for a million dollars worth of bonds." They keep it for three or four days and make two points, make twenty thousand dollars and sell it out. As long as he is as frank as that, I think we ought to see how many other people do it. Will you do it, Dan? Bell: Yes, sir. H.M.Jr: That is definitely your responsibility. Haas: Wouldn't it be better, Mr. Secretary, to tighten it up on the next issue, for this reason, that the people that are buying this and putting their subscriptions in expect the usual thing of ten 196 - 11 - percent or something, and if it is tightened up too much and they get fifteen or twenty, it will --- H.M.Jr: There are not many cases like that. No, I want very definitely to go out this time. I mean, this is on the policing. Haas: Yes. H.M.Jr: This is on the policing. Somebody, according to Graham, has been just a little smarter than our own people and Mr. Graham was kind enough to tell us. It may be just peculiar to Baltimore, because Graham's reason for telling us was, this looks like & good issue, and if he tells on some of his customers, maybe he will get a little more of the issue himself. Maybe that is unkind, but -- (Laughter). Bell: It is not peculiar to Baltimore, Mr. Secretary. We run into it every once in a while. We ran into & situation in a little town in Iowa. I don't suppose there are over a thousand people in it. This cashier of this National Bank went around the community to four or five little towns and got the names of individuals and put in subscriptions. Regraded Unclassified 197 - 12 - H.M.Jr: Did he take them off the tombstones? Bell: Probably Put in subscriptions to even the RFC issues which were three quarters of one per cent and one percent. We turned that over to a bank examiner and he went out and discussed it with the bank officials, and they said of course it is wrong, and they stopped that. H.M.Jr: Well, I would also take & look at Baltimore, particularly. Bell: In connection with paying off some of these maturing issues in cash, I am going to a meeting of the directors of the Federal Farm Mortgage Corporation this afternoon and we are going to discuss refunding of the two issues callable in January and March, aggregating three hundred and forty million. I would like also to discuss at that time the possibility of paying off those issues in cash. H.M.Jr: I wish you would. Bell: Farm Credit has fifteen million dollars in the Production Credit Corporations, and twenty-eight million dollars in the Federal Land Banks, which they would like to invest in this issue. I would like to give the Production Credit Corporations, because they are wholly owned, ten million dollars of this hundred million. That leaves them still -- H.M.Jr: Dan, when you come to a hundred million, come in with a list and we will go over our customers. Bell: Well, I have got it. Regraded Unclassified 198 - 13 - H.M.Jr: Well, not now, I don't want it. Bell: Wait a minute, until I tell you. H.M.Jr: All right. Bell: If they can't get this allotment, of course they want to subscribe, and I don't think they ought to do both. I would like for the Federal Land Banks, because we don't own all the stock, to subscribe, and we will not give them any allotment, but I would like to promise the Production Credit Corporations - well, say at least half of their cash and that will keep them out of the subscription list. H.M.Jr: How much do they have? Bell: They have fifteen million dollars. H.M.Jr: I don't know what the whole list is. Bell: I have the whole list, and I have a recom- mendation on the side. H.M.Jr: You rush me 80. Bell: You don't have to agree to all of that at this time. H.M.Jr: Are you going to a meeting this afternoon, is that the point? Bell: No, they have put in their subscription today because we close tonight. This is our cash on the trust accounts. I want to clear twenty. H.M.Jr: Postal Savings? Bell: Thirty, twenty, and twenty. 199 - 14 - H.M.Jr: Let's see, that is -- Bell: It is a hundred million. H.M.Jr: It doesn't leave anything, does it? Bell: It leaves six million seven. That is a reserve to take up other -- H.M.Jr: How much? Bell: Six million seven. H.M.Jr: And you want to give these fellows ten? Bell: Yes. H.M.Jr: Would you settle for seven and a half? Bell: I will, and that willleave about ten million here as a reserve. H.M.Jr: Seven and a half. Bell: I will settle for that. H.M.Jr: Anything else? Bell: Yes, I think so. I have a copy of the proposed press release of the State Depart- ment on this Mexican settlement. I think it is all right. I think it has been over - you (White) have been over it in August. They sent it over late in August. White: Oh, are they using the same one? Bell: I think so. It has just two paragraphs on our end of it. I was a little surprised to read that this isn't really a definite settlement. What they do is agree to set up a commission, and within a certain time, Regraded Unclassified 200 - 15 - and then those commissioners have four months, I think, to agree upon property values and then if they can't agree upon that, it comes back to the Governments to settle diplomatically, and then if the Governmentscan't settle it, the nine million dollars is returned to Mexico upon demand of the Mexican Government. H.M.Jr: This is the State Department? Bell: Yes. I don't know 88 we have anything to do with it, but I would think they would sew up the nine million dollars definitely. That is the amount that the Mexican Govern- ment agrees to pay the day the agreement is signed, to be held by the United States 'until an agreement is arrived at on the value of the claims. They give a certain time, and if that time elapses and nothing is done, Mexico can demand the nine million back. H.M.Jr: There is nothing we can do? Bell: No, I just kind of hate to let go the forty million that we have when they have a right to get the nine back. H.M.Jr: Have you seen it, Harry? White: I haven't seen that part of it. The two paragraphs that related to our participation we did work over, but I haven't seen the rest of it. Bell: Those are all right. H.M.Jr: Well, read the two that affect me. Bell: "The Treasury Department has entered into an agreement for monetary and financial cooperation with the Mexican Government and Regraded Unclassified 201 - 16 - the Bank of Mexico, which will provide, among other things, for the purchase of Mexican pesos with United States dollars. The U.S. dollars thus acquired by the Mexican authorities will greatly assist them in stabilizing the exchange value of the peso in terms of the dollar for the mutual benefit and advantage of the two countries. The Treasury Department has also indicated its willingness to purchase newly mined Mexican silver directly from the Mexican Government on a basis similar to that under which such purchases were made prior to 1938." This assumes that we will have our own press statement, also. H.M.Jr: Did you (White) know - you most likely did, but I didn't - that the industrial usage of silver in the United States is up to eighty million ounces? White: I did not know. H.M.Jr: Well, it is. I was told that. Eighty million ounces, and largely through solder- ing. White: I did not know that. H.M.Jr: I was amazed. White: It is 8. great increase. H.M.Jr: They said it was just doubled. Eighty million ounces, at that rate. White: Well, that may mean - then we will have to buy very little silver. They will just offer a cent. more and they will buy it. Regraded Unclassified 202 - 17- H.M.Jr: good. Check my source, because the source is very Bell: Handy and Harmon are worried about this Mex- ican silver agreement. If you agree to take all the Mexican silver, that leaves none of the Mexican silver for the - for commercial purposes. H.M.Jr: Well, that is why I am saying there is eighty million owners. White: All they have to do is offer another cent. H.M.Jr: They pay an eighth more. White: An eighth or a cent more and they can get all the silver they want, provided you don't meet the price, and there has been no such policy of upping the price. H.M.Jr: If they are worried, I will drop the price. Bell: That is what they are afraid of, that every time the market goes up an eighth you will raise the price an eighth. H.M.Jr: Don't worry, if I do anything, I will drop it. I am serious. I have just been waiting for a time to drop the damn price. White: You don't have to drop it, Mr. Secretary, we just don't raise it. They can get all the silver they want. All they have to do is bid for it. H.M.Jr: I know. I want to drop it. Bell: hat is all. H.M.Jr: I heard a story which is delicious on Washington Regraded Unclassified 203 - 18 - and some of the new agencies. I have got to tell it. Robert Sherwood, the playwright, is at present with Colonel Donovan. He talks very slowly. He went to see Jimmy Walker, who talks very fast. Robert Sherwood says, "Jimmy, I would like you to come down and be my assistant. I am over with Colonel Donovan." So Jimmy says, "What do you want me to do, what do you want me to do?" "Well," he says, "Jinny, if you will come down and work for me, maybe you can find out what T am supposed to do." (Laughter). Bell: I wonder if anything I said brought on that story? H.M.Jrs No. I have had it. Mrs. Morgenthau heard it at the White House the other night when I wasn't there, and I thought it was a wonderful story. They had a man over there who was lent to them by the State Department. He is vice- president of the Cannon Mills, in charge of sales. Re has been there for six months, working over there in Civilian Defense, working hard, Cosgrove, I think his name is. He is a very fine type of fellow. Yesterday he was told, "Very sorry, but the policy has changed. We don't need you. Good afternoon." Six months he has been there. He gave up his business and every- thing else. "Senator George telephoned to advise me that today he had talked with the President about Social Security program. The Senator got the impression --" this of course is extra confidential -- "The Senator got the impression that the President made some Regraded Unclassified 204 - 19 - commi tments and felt obliged to send some sort of message to the Hill. However, the President said such a message would be general in nature, and would not be sent for three or four weeks. And the leaders of the Senate Finance, House Ways and Means, would have an opportunity to talk with the President before the message was sent. The President told Senator George it was his idea the Committee would do some preliminary investigations for the fall and winter, and not really go to work on this problem until next year. The President also stated he understood there would be plenty of other work to keep these Committees busy in the meantime. He had no intention of side- tracking this work with the Social Security program." So that gives you plenty of time. What happened to Arthur Altmeyer, did he go out to Seattle or not? Blough: He stayed. He would like to go this evening. If that is the situation there is no reason why he should stay any longer. Bell: Except thathe can't make very much of a speech. Blough: There is not much reason why he should go. H.M.Jr: I wouldn't tell him this. I told Sullivan - I mean, I don't want them to think that we are doing anything. Just tell them - it isn't up to us to tell them. Blough: Oh, of course not. In the light of that, what are your wishes about the proposed message? H.M.Jr: He is working on it. Regraded Unclassified 205 - 20 - (The Secretary held a telephone conver- sation with Walter Stewart). H.M.Jr: He saya he thinks in November the Adminis- trative Amendments -- Blough: It would please us very much if we didn't have to start until November. H.M.Jr: He says November just now. Blough: Might thing? I say another word on the Social Security H.M.Jr: Sure. I will finish you up. Blough: I wish we could clean this message up, 80 far as the Treasury is concerned, for two reasons: one is so that Altmeyer would have no reason to feel that we were holding things up, and another is to get it out of the way. There is quite an important meet- ing in St. Paul next week of the National Tax Association. H.M.Jr: You can have what is left of me after my three thirty appointment with Irving Fisher. (Laughter). Blough: All right, sir. H.M.Jr: Oh, let's do it tomorrow morning. Ten thirty tomorrow, Social Security. Blough: All right. H.M.Jr: Ten thirty. Anybody else that is interested is invited. I told Chester Barnard to get in touch with you yesterday. Did he? Blough: He was in touch with me, yes. Be went over some of the material. He will be back also tomorrow morning. Regraded Unclassified 206 - 21 - H.M.Jr: So then, ten thirty. I am doing it to wait for him. Blough: All right, fine. H.M.Jr: All right? Blough: Suits me. H.M.Jr: Ferdie, you be here too. Kuhn: All right. H.M.Jr: Now, Customs. Johnson: We are working with Secret Service, and made a rather interesting seizure at Buffalo last Saturday. A man coming in from Canada had almost twenty-four pounds of gold bars worth ten thousand dollars in a specially made vest. We have the man and his accomplice and the gold. It looks like a regular opera- tion that has been stopped. H.M.Jr: A U.S. citizen or a Canadian? Johnson: His citizenship isn't disclosed in the record. He is coming from Canada. One of them lived in Buffalo and the other in New York City. White: Where did the gold originate, do you know? Johnson: In Canada, and probably stolen from the mine. High graded gold, they called it. H.M.Jr: That is interesting. Anything else? Johnson: We have these two matters that Ed Foley mentioned well in hand on the getting the reports in on the armament on Panamanian ships, and preparing for the three Japanese boats. Regraded Unclassified 207 - 22 - H.M.Jr: It frightens me. Waesche? God, have you got all those things? Waesche: I have two sets of amendments to the regula- tions, Mr. Secretary. There are two places to sign there. H.M.Jr: Your regulations? Waesche: One of them is an amendment to the reserve regulations, and the other is an amendment to the anchorage regulations. The reserve regulations must go to the Navy. H.M.Jr: Anchorage regulations? Waesche: Yes. H.M.Jr: Did you ever get the War Department out of the harbors? Waesche: Yes, we got that completely fixed up. These regulations have some bearing on that. H.M.Jr: They still control part of the -- Waesche: Well, they don't issue any regulations without coming through us, and we are working very well with them, and there is a clear under- standing. I also have that information about the tree tops. Do you want that now? H.M.Jr: Stay behind. Ferdie? Kuhn: Nothing. H.M.Jr: George? Haas: 1 have just this report. October is still leading by a nose. 208 - 23 - H.M.Jr: George, keep me posted each week now particularly will you? on the cost of living. Give me a Monday report, Haas: All right, I will do that. H.M.Jr: That is a pretty good-sized nose, George, six per cent. Haas: I was just looking at the E Bond. That is the E, F, and G. Waesche: That is all. H.M.Jr: I would say that was leading by Harold Graves' nose. (Laughter). Klotz: That is very unkind. H.M.Jr: No, it is a small nose. If it was about twenty per cent, it would be mine. That is what I meant. Peter? I have got to tell the story on Peter. I called him up Sunday and he said, "I see you had an accident, but you got a swell press." (Laughter) Klotz: That sounds more like you. White: Do you think it is worth trying again? Bell: You see how Peter's mind works. He is in that business. H.M.Jr: All right, Peter? Odegard: That is all. H.M.Jr: Chick? Schwarz: You may be interested. Ernest Lindley was called up to New York because the editor of 209 - 24 - News Week Magazine has been appointed editor of the new morning paper in Chicago. They are having a meeting there. He a sked if he could renew the request next week. H.M.Jr: Yes. It is too bad that he didn't come in, because I was going to have him see the fellow from Detroit today. Schwarz: It would have been a good meeting. H.M.Jr: Yes. Schwarz: That is all. H.M.Jr: Harry? White: Do you want to see that memo before it goes to Hull, Hopkins, and 80 forth? H.M.Jr: That wasn't the answer to - I asked you Monday. White: No, we are talking about two different things now. I was saving that unpleasant thing for the last. H.M.Jr: Which memo? White: The arrangement which was agreed upon. H.M.Jr: The memo on our conversation? White: - At the conference yesterday. H.M.Jr: No, I will just sign it. White: You want to sign it? H.M.Jr: That is all. I will sign it. White: I see. I had a discussion with the Mexicans -- H.M.Jr: What about my question, Harry? 210 - 25 - White: I have three things which are not so nice. May I leave them for the end? That is one of them. H.M.Jr: Do they get worse as you go along? White: I hope not, because the last one is going to be tomorrow. - I am going to ask you to go to New York H.M.Jr: I accept. White: I mean, I am going to ask you if I may go. H.M.Jr: Oh, all right. White: I spoke to the Mexicans yesterday about two matters, one of which they mentioned, and the other they hadn't. They question of repurchase of their bonds from the British. We have a memo on it, and We are ready to take it up at the next stage, however you want to handle it. I don't know how long Suarez is going to be here, but-- H.M.Jr: Come in at three forty-five today, will you, Harry? White: On that? H.M.Jr: On that or anything else that you have got. White: There is just one other thing I would like to raise here. H.M.Jr: All right. White: First, in answer to the request which you just spoke of that you thought I was answering, about sending that stuff on Monday. We were about ten days behind because the number of countries we are doing are growing. We have about twenty-five persons now, owing to your 211 - 26 - regulations that people on that fund be examined by Secret Service first. It is impossible to get people in a hurry. It takes several weeks or a month. We have borrowed four or five persons, and I thought it would be much nicer if in the first notice that you send these people we would cover the last week rather than be two or three weeks behind, so they have been working day and night, and it should be ready today. I have a perfect alibi on that. H.M.Jr: Says you. White: Yes. You would say so too if you knew all the details. I can give you more details if you don't agree already. H.M.Jr: What is the matter with the memorandum I asked you to send on Monday? White: That is it. H.M.Jr: Why not send the one you sent me? White: That is two weeks old, and we are supposed to give them twenty-four hour service. H.M.Jr: Harry, you know me. What did you do, forget about it? White: No, I didn't. (Laughter) Klotz: He is innocent. White: I deserve credit for the way I went about the thing. I think I was using good judgment. But they will be ready today. H.M.Jr: You arent influenced by the fact that you don't want the Department of Commerce to catch on to what you are doing? 212 - 27 - White: No, I was going to include in the letter which I would call to your attention that we are doing it with their cooperation. Otherwise there will just be & wide-open fight on the matter very quickly. H.M.Jr: Are you satisfied on your explanation? White: Well, as I say, if you understood exactly what we were doing you would compliment me, so if you don't wish to compliment me it is because I haven't made myself clear. (Laughter) H.M.Jr: this. There are no compliments coming your way on White: All right, I will give up on that. This next one is not particularly my baby, but it raises a question I think maybe the whole staff ought to hear. We have got this Mone- tary Commission going down to Cuba. Before he left, he said he wanted a stenographic assistant. He said to go down there and see if he couldn't find any and confer with the Ambassador. He cabled back saying none available and the Ambassador suggested we send somebody here. He asked for his secre- tary who is a very competent person. Mr. Norman Thompson, when I informed him, very rightly told me there was a Treasury principle or rule not to send women out of the country. Now, I think that is unfair discrimination. Thompson: Or in the country, with their bosses. It is just 8-⑉ H.M.Jr: Send women where? Thompson: Out on junkets. Newspapers sometimes get hold 213 - 28 - of it. White: Southard has his mother with him. (Laughter) It wasn't a good start. Well, Southard, who is in charge, has his mother with him and the other two men have their wives with them, and they are paying their own way, and there is no reason, on the merits of the particular case, why the girl can't go, and I think it is unfair to women. That may be the only chance any of them ever get for going out of the country, and I don't think that they ought to be discriminated against. (Laughter) I would like to have you reconsider that. H.M.Jr: I would have to look at the girl first. White: I don't think that would disturb you either. (Laughter) She is mature. Klotz: I think I will leave the room. Thompson: Well, I just told Harry the general policy had been not to let girls go out because there is danger of some newspaper talk. H.M.Jr: What is the reason for the girl going? White: They must have 8. confidential stenog pher down there in preparing these reports for us. They really do need one. They have a man to send whom they have looked up, but I think it is un- fair. Thompson: The only thing, there has been criticism in the past. H.M.Jr: Well, when Mr. Hull went down to South America, they had three or four girls go along. White: And two of them were blonds, I remember. This girl-- Regraded Unclassified 214 - 29 - H.M.Jr: Now, Harry, let's be serious a minute. Thompson: I didn't know at the time that he mentioned it. He just said he wanted to send this girl down, and I said the policy was not to do that. H.M.Jr: Being serious, are you sending the girl, be- cause they really need her or because you think she ought to have a trip? White: They really need a person. It will be a question of sending this girl or a man. I think in general the girls are all disappointed - when she first heard about it, she was quite excited, and I think the recognition that none of them can ever go on a trip if an oppor- tunity occurs is a unfortunate thing. They are low income groups, and they may never get a chance. H.M.Jr: I am being serious. Question number one. Do they need a stenographer? White: Yes. H.M.Jr: All right. Then I will leave it to you to select a competent stenographer. I don't care what the sex is. White: He has asked for his secretary. H.M.Jr: That is up to you. The responsibility is yours. Thompson: I see no particular objection to it. H.M.Jr: It is Harry's responsibility, that is all. You are selecting the people, aren't you, Harry? Foley: Sure. White: Well, I am willing to accept the responsibility if-- Regraded Unclassified 215 - 30 - H.M.Jr: Why should I pick the stenographer? White: I don't expect you to, but I would like you to reconsider a ruling which prevents any female stenographer from going down. H.M.Jr: Well, I have told you now. It is settled. White: That is all right. Then 1 will share the responsibility with Norman, and we will pick the girl to go. Thompson: I think it is all right. I just raised the question because-- H.N.Jr: I never put such 8 ruling into effect. Thompson: No. Foley: I never heard of the rule, and I know it hasn't been observed in my division, (Laughter) Cairns has taken Mrs. Poole up to New York two or three times to work on a speech or something of that character. H.W.Jr: Well, a couple of years ago, when we were working on something, Harry, and you brought your secretary up to New York. When we were working up to the farm, you remember that time? White: Yes. R.M.Jr: I never knew of this ruling. Thompson: Well, it is not a written rule. It has been an unwritten law around here that we wouldn't do that. There is just always the potential danger of some scandal-monger putting some- thing in the papers to stir up trouble, and say she is on a junket with her boss. We have tried to avoid that. I don't think there is Regraded Unclassified 216 - 31 - one chance in B. thousand of that happening in this case. I see no objection to it. H.M.Jr: Well, again, if White says that they need a stenographer, I will leave it to him to pick & competent person. I don't care what the sex is. White: All right. Norman said it was-- H.M.Jr: Is that right, Mrs. Klotz? Klotz: Oh, definitely. White: I asked Norman, and he said it was all right for me to bring this up here. H.M.Jr: Is that settled? White: Yes. Sorry to take so much time over & small matter, but it is important. That is all. H.M.Jr: Harold? Graves: You asked me-- H.M.Jr: That is the first time I ever heard of it. Graves: You asked me last week to have a memorandum prepared to OPM about this alcohol-molasses transaction that Senator Herring mentioned. H.M.Jr: Yes. Graves: I have had that memorandum since Monday and have talked to Mr. Mack about it. We both feel that it should not go. H.M.Jr: O.K. Out. Graves: That is all I have. Regraded Unclassified 217 - 32 - H.M.Jr: If that is your decision, all right. Graves: I might say that I believe Mr. Foley is interested in some aspect of it. Foley: They referred a call to me because you had shut off your calls. He asked me to look into it. H.M.Jr: Who did? Foley: Herring. I called him back and told him that legally we couldn't do anything but sign the contract, and he said that is all right. H.M.Jr: That isn't, of course, what I am interested in. Foley: Well, this is on the conversion of molasses into alcohol. H.M.Jr: This is - no-- Graves: A change in specifications that permitted the company that Senator Herring was interested in to bid. H.M.Jr: And they didn't get the business, but I wanted to ask OPM why did they change the specifica- tions. But you don't think I ought to send it? Graves: No, for this reason, if you would like me to give you the reason. H.M.Jr: Yes. Graves: The form in which the specifications were finally advertised, Mr. Mack and I both feel, were the proper form and not withstanding it was asked by Herring. That required that the British, as I understand it, furnish from their stocks the molasses to be converted. Regraded Unclassified 218 - 33 - H.M.Jr: That is right. Graves: And Mr. Mack feels as & matter of principle they should have been asked to furnish their molasses lasses. for conversion and not use our mo- H.M.Jr: Well, it was a lucky break for OPM that the company that Herring was interested in was high. But I was just having a little fun, but you don't want me to have it. Foley: They have got to work out an over-all policy in so far as these small businesses are con- cerned, Mr. Secretary. H.M.Jr: That has nothing to do with this. Graves: But it happens to be involved. Foley: Because of the dislocation of labor and be- cause of the control that they have estab- lished in 80 far as molasses supply is con- cerned and other commodities they have got to - Floyd Odlum has got to work out & policy that the rest of us can follow. H.M.Jr: Well, Floyd Odlum is now in touch with Chester Barnard, and I put Chester Barnard on that. Foley: I told that to Herring, and he said, That is perfectly all right, and I am satisfied." Graves: That is all I have. H.M.Jr: Have you anything? Buffington: No, sir. H.M.Jr: Are you getting along all right? Buffington: Yes, sir. I have something in the course of Regraded Unclassified 219 - 34 - preparation, but I would like to discuss several matters with Mr. Haas' department and Mr. Foley's department before reporting on it. H.M.Jr: And then before you bring it to me, I would like you to show it to Kuhn and Odegard. Buffington: All right. H.M.Jr: Norman? Thompson: As you probably know, the Bundles For Britain, Inc., are putting on a three-ring circus, all- star, three-ring circus. They want permission to sell tickets through the Treasury. It is against the regulations. I didn't know whether you wanted to let them. H.M.Jr: No. Thompson: We have the Red Cross and Community Chest drives. H.M.Jr: That is enough. Thompson: As you probably know, John Pehle's organiza- tion have decentralized certain of their licensing work and it is handled by the Federal Reserve Bank in New York, and that has increased the volume of telephoning there, and he wants two additional - John Pehle wants two additional private lines to New York. He is also putting in a teletype. The tele- type will-- H.M.Jr: I told him teletype. Let him have one tele- type and one telephone. Thompson: That was what I was going to recommend. I have checked the figures, and there is full justi- fication for one telephone. H.M.Jr: One telephone and one teletype and then come Regraded Unclassified 220 - 35 - back and see me. Incidentally, Ed, I would like a report once a week now on that Pehle are behind. organization, how many applicationsthey Foley: They will be current in two weeks. H.M.Jr- They had better. Foley: We are down below five thousand now, and we have come from eight thousand on Monday down below five today. We will be current in two weeks. Thompson: Miss Chauncey said you wanted this. H.M.Jr: Yes, what about that? Thompson: Well, in the Treasury the Coast Guard follows the Navy in having secret and confidential, strictly and so on, but outside of the Coast Guard we use the term "confidential" for things of that nature. I would just tell him that. I don't know of any reports we can give him. H.M.Jr: It is the dumbest thing I ever saw. I would love to write him a sarcastic letter. I am getting so sick and tired of these new agencies. You and Waesche fix it up. I mean, it is just the most asinine performance. What business is it of theirs what we use? I mean, some of these people, they just make me sick. It is the stupidest thing I ever say. Fix it up with Admiral Waesche. It is just asinine. They bother you and pester you and so forth. Thompson: Yes. H.M.Jr: Anything else? Thompson: That is all. TREASURY DEPARTMENT 231 INTER OFFICE COMMUNICATION DATE ctober 9, 1941 TO Secretary's files FROM Mr. Kuhn At his staff meeting this morning, Secretary Morgenthau said that he did not wish to discuss this matter at a press conference, as it was too important and complicated for such informal handling. He did say that he was willing to refer to it in some formal statement such 88 8. speech, and he asked me to take the memo for Mr. Foley. I have since been told that Mr. Henderson hoped for some help from the Secretary immediately and that any mention of this in a speech would be too late to be of any use, Regraded Unclassified TREASURY DEPARTMENT 222 INTER-OFFICE COMMUNICATION DATE OCT 9 1941 TO Secretary Morgenthau FROM E. H. Foley, Jr. On October 1, 1941, the day on which the new Federal manufacturers' excise taxes became effective, Leon Henderson issued an appeal to all manufacturers, whole- salers and retailers, urging that the cost to the consumer of articles subject to such taxes be not increased by more than the amount of the tax. He pointed out that if the wholesaler, and in turn the retailer, includes the amount of the excise tax in the base upon which he computes his "marked-up" (the mark-up is ordinarily a percentage of the base price) the result will be 8. pyramiding process which will mean that the cost to the ultimate con- sumer will be enhanced by an amount substantially in excess of the new taxes imposed. Henderson's efforts have met with 8. favorable response among some groups of retailers and others, but there is a recalcitrant group, which may or may not be a minority, which is not sympathetic with the suggestion made and may ignore it. Their representatives are coming to Washington to discuss the matter with Mr. Henderson on Thursday and he has asked whether you could see your way clear to give a public expression of accord with his view &s to the treatment of these excise taxes. Should you wish to do so, it could be done at your next press conference by means of an answer to & simple question addressed to you inquiring as to whether you are generally in accord with the suggestion contained in Mr. Henderson's press release of October 1, 1941 relative to manufacturers' excise taxes. A copy of his press release is attached. EN7L. Regraded Unclassified OFFICE FOR EMERGENCY MANAGEMENT 223 Office of Price Administration Release F. X, Popers, PM 1284 Wednesday, Oct. 1, 1941 Manufacturers, wholesalers and retailers dealing in articles subject to the gew Federal manufacturers' oxcise taxes were asked today by Leon Henderson, Administrator, Office of Frice Administration, to exert their utmost efforts to prevent price increases to ultimate consumers exceeding the actual amount of the additional taxes. Excise texes of 10% will apply today for the first time to such articles as electric, gas and nil appliances, including flat irons, fens, stoves, mixers and vacuum cleaners; to a large list of rutber products, excluding foot-wear, and to electric light bulbs, Ab applied to articles that have carried excise taxes previously - such articles AS outomobilie, tires, tubes, radios, end household refrigerators - the new rete will to couble or nearly double the old one. "The increased prices mid by consumers as the result of the new levies should in no case reflect more than the natual dollar amount of the manufacturers' total excise tax," Mr. Henderson stated. "Thia policy should te applied to CREOS where excise taxes are continued nt.1 increased DA veli - alere taxes are now being levied for the first time. "Pyromiding of thesa taxen must be carefully guarded against. Where a manufacturer sells en article for $100 end passes on the 10% excise tax it results in & price of $110 to the wholesaler, Should the Intter compute his regular oark-up price on the $110 price, instead of on the $100 base, the price to the retailer will be mised by more then the amount of the tax. If the retailer in turn calculates his mork-up, on this total. the final cost of the article to the ultimate consuner will be raised considerably in excess of the notual excise tax, "Properly figured, the tax should be left out of all mark-up calculations, The threat to the general price structure if "Pyramiding of the new tax is remorted to by distributors of merchandise is réal and inngerous, I an sure Next American business men will tike steps to Avert this threat." Regraded Unclassified