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Volume 474, December 17 – December 18, 1941
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Volume 474, December 17 – December 18, 1941
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Henry Morgenthau, Jr. Papers
Diaries of Henry Morgenthau, Jr.
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DIARY
Book 474
December 17 and 18, 1941
- A -
Book Page
Appointments end Resignations
Loab, John: HMJr and Mack discuss possible connection
with Procurement Division - 12/18/41
474
139,143
- B -
Bank of America
See Transamerica
British Purchasing Mission
Vesting order sales - 12/17/41
44,45
Federal Reserve Bank of New York statement showing
dollar disbursements, week ending December 10, 1941..
222
- D -
Defense, National
Appropriations to various departments involved, status
of contracts, and actual disbursements: Resume'
of requests for information contained in Hass
memorandum - 12/17/41
35
Defense Savings Bonds
See Financing, Government
- 3- 3 -
Exchange Market
Resumes - - 12/17-18/41
56,311
- 8 -
Financing, Government
Defense Sevings Bonds:
Delay in shipments discussed by HMJr and Broughton
(Public Debt) - 12/18/41
120
a) Conference: present: HMJr, Bell, Broughton,
Hall, Graves, Haas, and Kilby: Book 475,
page 39 - 12/19/41
Women's Program: Radio announcements - 12/18/41
181
Comparative statement of sales during first 15
business days, October, November, and December, 1941.
214
Foreign Funds Control
Report from inception, April 1940, sent to FDR, Justice,
State, Budget, etc. - 12/18/41
98
- G -
Germany
See Oil
Gold
French stocks at Martinique verified - cable from
American Consul, Martinique - 12/17/41.
50
Regraded Unclassified
- H - -
Book Page
Hawaii
Bonds or other public securities purchase by HAJr
discussed in Foley memorandum - 12/18/41
474
145
- J -
Japan
See 011
- L -
Loeb, John
See Appointments and Resignations
- M -
Military Reports
Reports from London transmitted by Halifax -
12/17-18/41
58,312
"The War This Week" December 11-18, 1941 -
Coordinator of Information report
316
Morgenthau, Henry, Jr.
Hawaiian bonds or other public securities -
purchase by HMJr discussed in Foley memorandum -
12/18/41
145
- o -
Oil
Japanese and German Oil Situation: Full report,
with charts, by White - 12/18/41
238
- T -
Transamerica
Walston and Company, brokerage firm, San Francisco,
California: Manipulation of Transamerica stock
reported to Treasury and by Treasury to Securities
and Exchange Commission - 12/17/41
40
- U-
-
U.S.S.R.
Lend-Lease Shipments: Allocation of ports - 12/18/41.
155
- W -
Walston and Company
See Transamerica
Regraded Unclassified
1
READING COPY
OF
SECRETARY'S SPEECH
TO THE DEFENSE SAVINGS ORGANIZATION, CHICAGO
December 17,1942
2
This nation of ours has had a shock, but
it is wiser and stronger for having had 1t.
Every one of us must be conscious today of a
clearer vision and a deeper understanding than
we had two weeks ago. The bombs on Pearl Harbor
have destroyed much more than what the censors
would call "military objectives". They have
ripped our complacency to shreds. They have
blasted the old comfortable belief that the wide
oceans could save us from harm. They have
blown away the notion that brutality and deceit
and murder in another part of the world could
never touch us in ours.
Regraded Unclassified
- 2 -
3
We now know, or ought to know, that this
whole world struggle 1s our war, just as much
as it was to the people of Chungking or Warsaw
in 1939, or to the people of Rotterdam or
London in 1940, or to the people of Athens and
Moscow in 1941. We now know, or ought to know,
that there can be no half way method of
fighting an attempt to dominate the entire
earth. We now know, or ought to know, that
this total war will require total effort on
our part, with everything we have and everything
we are, w1th all our resources pledged to
final and decisive victory.
Regraded Unclassified
4
- 3 -
We in this room, the men and women who
direct the Defense Savings Organization in the
48 States, have been working hard for many
months to mobilize our financial resources in
the form of the people's savings. But we have,
I think, done more than that.
Since the very inception of the Defense
Savings program, it has been one- of our major
objectives to give the American people a sense
of their own direct and inescapable involvement
in this great battle for our way of life. We
have tried to make them realize that they were
not isolated and could not be isolated from a
struggle that would shape the future of
everyone on this planet.
Unclassified
- 4 -
5
We have tried to give the American people a
greater pride in their own country and a greater
awareness of the dangers that face them. We
have tried to give every man, woman and child
in this country a sense of direct participation
in its defense, a feeling that there is something
for everyone to do in a great effort from which
everyone will benefit in the end.
Looking back over the past eight months,
I think we can all be proud of what has been
accomplished. I believe in all sincerity that
the devoted work of the Defense Savings staff and
all our thousands of volunteer workers throughout
the country has helped greatly to crystallize
American opinion.
- 5 -
6
I believe that the response to the bombs at
Pearl Harbor was deep and wide and immediate
partly because of our groundwork in the Defense
Savings program.
We have given to millions a new sense of
being partners of their Government, of having
a direct share in America and in American
freedoms. To me, it is an achievement of far
greater proportions than the raising of the
more than 2 billion dollars which have rolled
into the Treasury since the Defense Bonds first
went on sale in May.
Regraded Unclassified
7
- 6 -
Now that we have cleared the decks for
action, it is up to us to follow through, and
that is the main purpose of my being here with
you today. We must follow through, not only in
terms of a few million individuals or a couple
of billion dollars, but by a determined effort
to reach every individual in this country.
For total wars are peoples' wars; and in this
total war that has spread around the globe, the
battlefront now reaches into every factory and
every home.
There is no exemption for any group
or any section. The Nazis and the Japanese
make no exceptions in their conquests.
- 7 -
8
The bombs that fell at Pearl Harbor were aimed
straight at every one of us, and whatever the
Nazis may attempt in the Atlantic will be aimed
at every one of us. We are all in this war
together.
Pause
Not all of us can pilot a bombing plane
or fire a gun from the deck of a battleship.
Those of us who are too old or too young to
get into uniform will be asked to work longer
hours and pay heavier taxes and do without many
of our accustomed comforts; but in this Defense
Savings effort we are not even being asked to
give our money. We are just being asked to lend
our money to the Government, to invest our
savings for victory.
- 8 -
9
That, it seems to me, 18 a call to which
everyone will want to respond. We will want
to do it to the very limit of our ability. We,
the people, want to show that we are ready and
eager to be of some service to our country.
It has given me real encouragement to be
told that you of the Defense Savings Organization
have been discussing detailed plans for
intensifying and widening our effort, and that
you have shown so much enthusiasm in these
meetings. Our problem, as you all know, is one
of financing the enormously expanding cost of
the war while avoiding the immense and dangerous
evils of inflation.
- 9 -
10
I have said right here in Chicago, in a talk
to the American Bankers Association, that we are
in reality fighting two wars -- one, the great
struggle on all the continents and all the oceans,
and the other the war against an insidious enemy
here at home. That enemy is inflation. It creeps
up on us as stealthily as a thief in the dark.
As the President has said, inflation is a form of
taxation that takes no account of the ability to
pay and strikes directly at the American standard
of life. Our job, therefore, is a double one,
and in this renewed effort to which we of the
Defense Savings staff must now dedicate ourselves,
we must make sure that we deal effectively with
both enemies.
- 10 -
11
For that reason, it seems to me, our major
effort now must be directed particularly at those
in all walks of life who receive regular pay from
wages and salaries. Inflation feeds on current
income, rather than on the money that now rests
in the vaults of savings banks. It may seem
heartless to speak of excess spending on the part
of millions of people in the middle and low
income groups; but in wartime, in the face of a
limited and dwindling supply of civilian goods,
there is such a thing. In wartime, excess
spending means the buying of any commodity that
we can safely do without.
- 11 -
12
Therefore, the most effective course for us, as
we have known from the very beginning, has been
to enlist current income and to divert excess
spending, to persuade our people to set aside a
part of their pay every pay day in Defense Bonds
and Stamps.
Pause
Let's now make every pay day Bond Day. And
when I speak of regular investment every pay day,
I am speaking not only of the millions of factory
workers, not only of the teachers and accountants,
the clerks and civic employees who live on
regular salaries, but also of farmers who are
earning solid incomes for the first time in many
years and who will be the first to suffer if we
allow inflation to get out of hand.
- 12 -
13
All these are the people we must reach,
with a determined effort that will have an impact
in Berlin and Rome and Tokyo, an effort that will
give new heart and courage to the free peoples
who are fighting on our side everywhere.
Pause I have been asked many times whether we have
a goal, a quota for the United States. I have
always avoided answering with a money figure because
I have been much more interested, firstly, in
reaching vast numbers of individuals, and secondly,
in absorbing current income rather than accumulated
savings in the banks. But I will tell you now
what my goal is, what our goal shall be and must be.
14
- 13 - -
It is to reach quickly, within the next few
months, every single recipient of regular current
income in the United States, and to have every
one of these 35 million people setting aside some
part of their pay regularly within the shortest
possible time. And when I say "some part of their
pay," I am not thinking merely of a token
contribution. I mean a real investment, the very
limit that each person can afford without actually
taking food and other necessities from himself and
his family.
- 14 -
15
When this meeting ends, I hope that this
organization will set to work in every State
and every community, throughout this great front
line of freedom that is the United States, with
the same devotion and determination that is now
being shown by the men in our fighting forces.
I have complete confidence in the ability of
this great group to reach the goal I have set for
you today. We have been more than fortunate in
the men and women who have rallied to our help
since the first of May in all parts of the country.
- 15 -
16
It has been a truly thrilling experience for me
as Secretary of the Treasury to see the superb
cooperation we have had from labor and industry,
from Republicans and Democrats, from foreign-born
and American-born, from all the assorted groups
and nationalities of which this united American
people is composed.
I am genuinely glad to see all our State
leaders assembled here in one room, and to thank
them and their volunteer helpers on behalf of
their Government for the work they have already
done.
Regraded Unclassified
- 16 -
17
Now that the greater and more insistent
call has come, we are ready to meet it. Our
organization has been set up, our people are hard
at work, our country knows what Defense Bonds are
and what they do. It is up to each and every one
of us to do our part.
Our fighting men in the Philippines and
Iceland, in Hawaii and Wake and Midway, in all
the posts of danger on all the seven seas, are
looking to us to supply them with the planes and
guns they need. The whole country is looking to
us, right here in this room, to raise billions
of dollars to win this war -- and let none of our
enemies make any mistake about it, we are going
to win it.
- 17 -
18
Our allies in all continents, who have been
fighting our battle with our common enemy for
long, hard years, are looking to us, and also
the oppressed peoples in the conquered lands who
are now living in darkness -- they, too, are
looking to us to sweep that darkness away.
It 18 by far the greatest test and the
grandest opportunity that has ever come to our
country. We in this room must prove ourselves
worthy of that challenge. The words that Winston
Churchill addressed to his own people a year ago
can now be applied to ours: let us so bear
ourselves that if these United States should last
for a thousand years, men will still say, "This
was their finest hour."
-000-
Regraded Unclassified
19
December 17, 1941.
MEMORANDUM FOR THE SECRETARY'S FILES:
Miss Chauncey informed Mr. White that the Secretary
telephoned her this morning, instructing Mr. White to forward
to London by cable the speech he was making today in Chicago.
The material was sent to Mr. Dietrich for transmittal
on December 17th, at four o'clock. Mr. Dietrich said he would
see that the cable went forward immediately.
H.D.W.
Regraded Unclassified
20
TELEGRAM BENT
PII
PLAIN
December 17, 1491
AMENDA33Y,
LONDON. (ENGLAND)
5920, seventeenth.
FOR CASADAY FROM THE SECRETARY OF THE TREASURY.
Text of Secretary Morgenthau's speech before
first national meeting of Defense Savings Organization
in Chicago December 17, 1941:
QUOTE This nation of ours has had B. shock, but
it is wiser and stronger for having had it. Every
one of us mist be conscious today of a clearer
vision and 2 deeper understanding than WE had two
weeks ago. The bombs on Pearl Harbor have destroyed
much more than what the censors would call 'militery
objectives'. They have rinned our complacency to
shreds. They have blasted the old comfortable belief
that the wide octans could SOVE us from horn. They
have With awe. the notion that brutality and Ascrit
and murde~ in enother port of the world.could never
touch us in ours.
WE now know, or ought to know, that this whole
world struggle is our war, just no much as it was to
the DEODLE
Regraded Unclassified
21
-2-/5920, DECEMBER 17, to London, (England)
the people of Chungking or Warsaw in 1939, or to
the people of Rotterdam or London in 1940, or to
the prople of Athens and Moscow in 1941. WE now
know, or ought to know, that there can bE no half
way method of fighting an attempt to dominate the
entire earth. WE how know, or ought to know, that
this total war will require total effort on our
part, with Everything WE have and everything WE are,
with all our resources pledged to finel and decisive
victory.
WE in this room, the men and women who direct
the DEfense Savings Organization in the 48 3tates,
have been working hard for many months to mobilize
our financial resources in the form of the prople's
anvings. But WE have, I think, done more than that.
3ince the very inception of the Defense Savings
program, it has been one of our major objectives to
give the American people & SENSE of their own direct
end inscapable involvement in this great battle for
our way of life. WE have tried to make them realize
that they were not isolated and could not be isolated
from n struggle that would shape the future of EVEryone
on this planet.
Regraded Unclassified
22
- 3-/5920, December 17, to London, (England)
on this planet. WE have tried to give the American
neodle n greater pride in their own country and
& greater awareness of the dangers that face them.
WE have tried to give EVEry man, woman and child
in this country 8 JENSE of direct participation
in its defense, D feeling that there is something
for everyone to do in n great effort from which
Everyone will benefit in the end.
Looking back over the past eight nonths, I thin:-
WE can all bE nroud of what has been accomolished. I
believe in all sincerity that the devoted work of
the Defense 3avings staff and all our thousands of
volunteer workers throughout the country has helped
greatly to crystallize American opinion. I believe
that the regronse to the bombs nt Pearl Harbor was
deep and wide and immediate portly because of our
ground work in the DEfense Savings program.
WE have given tn millions n new sense of being
partners of their Government, of having a direct share
in America and in American freedoms. To ME, it is
on achievement of far greater proportions than the
raising of the more than 2 billion dollars which have
rolled into the Treasury since the Defense Bonds first
went n 301E
Regraded Unclassified
23
-4-#5920, December 17, to Bondon, (England)
went on sale in May.
Now that WE have cleared the decks for action,
it 1s up to us to follow through, and that is
the main purpose of my being here with you today.
WE must follow through, not only in terms of a
few million individuals or a couple of billion
dollars, but by El determined effort to reach
every individual in this country. For total
wars are peoples' wars; and in this total war that
has surend around the globe, the battlefront now
reaches every factory and EVEry home.
There is no Exemption for any group or any
section. The Nazis and the Japanese make no EXCEPT-
ions in their conquests. The bombs that fell at
Pearl Harbor were nimed straight at EVEry one of us,
and whatever the Nazis may ttempt in the Atlantic
will be aimed at EVERY one of us. NE are all in this
war together.
Not all of us can pilot a bombing plane or fire
a gun from the deck of a battleship. Those of us
who are too old or too young to get into uniform will
be asked to work longer hours and pay heavier taxes
and do without many of our accustomed comforts; but
in this DEfEnsE
Regraded Unclassified
24
-5-#5920, December 17, to London (England).
in this Defense Savings effort WE are not EVEN
being asked to give our money. WE are just being asked
to lend our money to the Government, to invest our
savings for victory. That, it SEEMS to ME, is a
call to which EVERYONE will wrnt to respond. WE
will want to do it to the very limit of our ability.
WE, the people, want to show that WE are ready and
Eager to bE of some service to our country.
It has given DE real Encouragenent to be told
that you of the Defense Savings Organization have
been discussing detailed plans for intensifying
and widening our effort, and that you have shown
so much enthusiesm in these mestings. Our problem,
as you all know, is one of financing the anormously
expanding cost of the war while avoiding the immense
and dangerous Evils of inflation. I have said right
here in Chicago, in a talk to the American Bankers
Association, that WE CTE in reality fighting two
wars--one, the great struggle on all the continents
and all the oceans, and the other the war against
an insidious eneny here at home. That Enemy is
inflation. It creeps up on us as stealthily as &
theif in the dark. As the President has said,
inflation is
Regraded Unclassified
25
-6-#5920, December 17, to London (England).
inflation is a form of taxation that takes no account
of the ability to pay and S trikes directly at the
American standard of life. Our job, therefore, is
a double one, and in this renewed effort to which
WE of the DEfense 3avings staff must now dedicate
ourselves, we must make sure that WE deal Effectively
with both ENEMIES.
For that reason, it SEEMS to me, our major
effort now must bE directed particularly at those
in all walks of life who receive regular pay from
wages and solories. Inflation feeds on current
income, rather than on the money that now rests
in the vaults of savings banks. It may seem heart-
less to speak of EXCESS spending on the part of
millions of people in the middle end low income
groups; but in wartime, in the face of a limited
and dwindling sundly of civilian goods, there is
such B. thing. In wartime, EXCESO spending means the
buying of any commodity that WE can safely do without.
Therefore, the most Effective course for us, as WE have
known from the very beginning, has been to Enlist
current income and to divert EXCESS spending,
to persunde our people to get aside a part of their
pay EVEry
Regraded Unclassified
26
-7-H6920, December 17, to London (England).
pay every pay day in Defense Bonds and 3tamps.
Let's now make EVEry day Bond Day. And when
I speak of regular investment Every pay day, I am
speaking not only of the millions of factory workers,
not only of the teachers and accountants, the clerks
and civic Employees who live on regular salaries,
but also of the farmers who are Earning solid incomes
for the first time in many years and who will bE
the first to suffer 1f WE Rllow inflation to get
out of band.
All these AVE the people WE must reach, with a
determined effort that will have an impact in Berlin
and ROME and Tokyo, an effort that will give new
heart and courage to the free peoples who are
fighting on our side eyerywhere.
I have been asked many times whether WE have
a goal, a quota for the United States, I have always
avoided answering with a money figure because I have
been much more interested, firstly, in reaching
vast numbers of individuals, and, secondly, in
absorbing current income rather than accumulated
savings in the banks. But I will tell you now what
my goal 10, what our goal shall bE and must bE.
It is to
Regraded Unclassified
27
-8-#5920, December 17, to London (England).
It 18 to reach quickly, within the next few months,
every single recipient of regular current income
in the United States, and to have every one of these
35 million people setting naide some part of their
pay regularly within the shortest possible time.
And when I soy 'some part of their pay,' I an not
thinking merely of C. token contribution. I MEan
n real investment, the very limit that Each person
can afford without notually taking food and other
necessities from himself and his family.
Then this meeting Ends, I hope that this
organization will set to work in every 3tate and
every community, throughout this grent front line
of freedom that 1a the United States, with the
30ME devotion and determine tion that 13 now being
shown by the men in our fighting forces.
I have complete confidence in the ability of
this grent group to reach the 3001 I have SET for
you today. WE have been more then fortunate in the
men and women who leve rallied to our help since the
first of May in all parts of the country. It has been
a truly thrilling EXPERIENCE for me 03 3ecretary of
the Trensury
Regraded Unclassified
28
-9-15920, DECEMBER 17, to London (England)
the Treasury to BEE the superb cooperation WE have
had from labor and industry, from Republicans and
Democrats, from forsign-born and Americon-born,
from all the assorted groups and nationalities of
which this united American people is composed.
I an genuinely glnd to SEE all of our 3tate
leaders assembled here in one room, and to thank
them and their volunteer helpers on behalf of
their Government for the work they have already
done.
Now that the grenter and MORE insistent call
hns or IE, WE are ready to neet it. Ovr organization
has been set uo, our people are hard at work, our
country lonows what Defense Bonds are and what they
do. It is up to each and every one of us to do our
part.
Our fighting men in the Philippines and Iceland,
in Hawaii and Wake and Midway, in all the posts of
danger on all the 3EVEn DECS, are looking to us to
supply them with the planes and guns they need.
The whole country 13 looking to us, right here in
this room, to reise billions of dollars to win this
war -- and let none of our Enemies make any nistake
about it,
Regraded Unclassified
29
-10-#5920, December 17, to London (England).
about it, WE are going to win it. Our allies in all
continents, who have been fighting our battle with
our comon Enery for long, hard years, Are looking to
us, and also the oppressed peoples in the conquired
lands who are now living in darkness --they, too, Are
looking to us to SWEED that darkness away.
It is by far the greatest test and the grandest
opportunity that has ever CODE to our country. TE
in this room must prove ourselves worthy of that
challenge. The words that Winston Churchill addressed
to his own people C. year ago can now bE applied to
ours: let us ac bear ourselves that if these United
States should last for C. thousand years, nen will
still say, 'This WC.S their finest hour'. END QUOTE.
Flecas show to the Ambassador and others interested.
HULL
(FL)
FD:FL:ME
Regraded Unclassified
30
CONGRESS OF THE UNITED STATES
JOINT COMMITTEE ON REDUCTION OF
NONESSENTIAL FEDERAL EXPENDITURES
There will be a meeting of the Joint Committee in
Room
House Ways and Mean s Com.
on Wednesday, Dec.17,
In Capitol
at 10:00 s.m.
To
DWBICE
HARRY FLOOD BYRD,
attended
Chairman.
[
are 68008
Regraded Unclassified
31
TREASURY DEPARTMENT
WASHINGTON
December 17, 1941.
MEMORANIUM ON MEETING OF THE JOINT
COMMITTEE ON REDUCTION OF NON-DEFENSE EXPENDITURES
meeting was called for 10:00 A. H., Wednesday, December 17,
in the House Ways and Means Committee Room in the Capitol. There were
present
Senators:
Treasury:
Byrd
Under Secretary Bell
McKellar
Mr. Heffelfinger
LaFollette
Budget Bureau:
Eye
Mr. Lawton
Congresament
General Accounting Office:
Doughton
Mr. Tyler
Oullen
Mr. Barger
Treadway
Cannon
Congressman Cannon left the meeting before it got under way
but returned for a short time before the Committee adjourned.
Senator Byrd explained that he had telephoned to the Secretary
of Agriculture yesterday asking whether he would appear before the Com-
mittee today to give his views concerning the suggestion contained in
Senator Nye's motion, made just before edjournment on Tuesday, AS to
what the Secretary of Agriculture would recommend if the appropriations
for his Department were cut $300 - $400 - $500 - $600 million or
$1,000,000,000 during the next fiscal year. Shortly before the
Committee convened Senator Byrd wes notified by the Office of the
Secretary of Agriculture that the Secretary had to appear before the
House Committee on Agriculture and would be unable to appear before the
Joint Committee today.
Senator Byrd read from a memorandum furnished by the Bureau
of the Budget in connection with public works. He understood the
memorandum related to a list of non-defense public works projects
although subsequently during a discussion it appeared that the list
contained all classes of public works, including those which might
be considered necessary from the standpoint of national defense.
Regraded Unclassified
- 2
32
After a short discussion of certain items appearing in the list Senator
Byrd requested Mr. Lawton of the Budget Bureau to submit at the next
meeting of the Committee on Thursday morning a. list of public works
projects which are not necessary from the standpoint of national
defense, showing the amounts appropriated for such projects in 1942.
It appeared from the statement which Senator Byrd was reading that
$1,315,000,000 will be required to complete projects already authorized
under the present program and that apparently it was estimated that
$650,000,000 would be needed to carry on such projects during 1943.
Congressman Treadway inquired whether reclamation projects
were classified as defense projects and Mr. Lawton replied that all
reclamation projects involving the generation of power were included in
the category of defense projects. Mr. Lawton pointed out that the
Budget Bureau recently submitted supplemental estimates to accelerate
construction on projects of this character. Mr. Lawton also pointed
out that in consideration of the 1943 Budget the Budget Bureau VSA
requiring all new or expanded public works projects to be justified
in the light of their need from the standpoint of national defense
and that appropriations for projects not in this category but already
under way were being held to the minimum for the next year.
There was a general discussion among the Committee members
with respect to the appropriations for the Farm program under the
Department of Agriculture. Senator Byrd read from & list which
itemized various appropriations under the Department of Agriculture
totaling $1,244,000,000 in all. The Committee members asked the views
of Congressman Cannon with respect to his recommendations for reductions
in agricultural expenditures. Congressman Cannon pointed out certain
agricultural appropriations, such as for the acquisition of forest
lands, forest roads and trails, crop insurance, farm tenancy, land
utiligation, etc., which, in his opinion, could be out. He reiterated,
however, his views that no cuts should be made in the appropriations
for parity payments and for soil conservation.
Congressman Doughton Was in general agreement with Congressman
Cannon's views, but asked whether in view of the fact that the soil COD-
servation appropriations made during the past years had improved soil
conditions of the farms, whether there could not be some cut in the
$500,000,000 appropriation for this purpose since there were being
general cuts recommended in other lines of activity. Congressman
Cannon said that the $500,000,000 appropriated for this program vas
the minimum necessary for this purpose.
Senator McKellar stated that he vas in agreement that there
should be no cut in the farm appropriations which were of direct
benefit to the farmer in supporting prices for farm products, but that
Regraded Unclassified
- 3 -
33
other Department of Agriculture activities which have been added from
time to time were of no substantial benefit to the farmers and should
be cut. This point of view seemed to be generally agreed to by
members of the Committee. It was pointed out that the farm appro-
priations, aside from those for parity payments and soil conservation,
amounted to about $500,000,000.
Congressman Doughton suggested that a subcommittee be
appointed to prepare a report embodying the tentative items which
the Committee had already agreed upon. There was no objection to
this suggestion although Congressman Cannon stated it would be
understood nothing would be given out until the entire Committee had
an opportunity to review it.
It vas decided that the Secretary of Agriculture would be
asked to appear before the Committee tomorrow, Thursday, December 18,
at 10:00 4. Mo Thereupon the Committee adjourned at about 11:15 4. M.
wit
34
Estimated Defense Expenditures Compared with
Estimated National Income, Calendar years 1941-43
(In December 1941 Prices)
: Estimated
: Estimated
: Defense expenditures
Calendar year
: defense
: national
:
as percent of
: expenditures : income : national income
(In billions of dollars)
(Percent)
1941
15
92
17
1942
45
105-110
41-43
1943
65
120-125
52-54
Office of the Secretary of the Treasury,
December 17, 1941
Division of Research and Statistics.
Source: Office of Production Management,
Bureau of Research end Statistics.
Regraded Unclassified
TREASURY DEPARTMENT
35
INTER OFFICE COMMUNICATION
DATE Dec. 17, 1941.
Kins Chaungoy
TO
FROM
Nr. Rass
Dit November 3, 1041, the Secretary asked that we give him as soon
: a nossible charts which vould show the eppropriations available under the
Refense Program. how much of the empropriations were now under contract,
and Sav much noney had actually been disbursed under the empopriations.
Tip indicated that he vished to have each Defense appropriation considered
sportately.
After invecti petion the frund that the only place the data were
available was in the Denartments themselves. Accordingly, letters were
prepared for the Secretary's signature and sent to the Secretary of Mar and
the Socretary of linv, on November 5, and to the Chairman of the Meritime
Commission on Hovember 10, assing for the following information for each
Andropriation act and contract authorization Act, emproved since January 1,
1240, providing for their departments and defense aid purchases of ecuin-
ment for national defense:
(1) Mame of Act
(2) Date approved
(7) Amount anoropriated or authorized for mirchases of military
ecuipment (and excluding nevrolls, subsistence, travel, etc.)
(L) Value of contracts let to date
(=) Disbursements made to date
(C) Deliveries received to date. oxpressed 1$ e percentage of the
total value of contracts let.
It hamened that in the case of the Lond-Lease appropriation, the
enterial NPO readily available. À sermle chart WRS therefore prevared,
covering that actirentiation, end URS submitted to the Secretary on "ovember 7.
The Secretary nsked that additional contes be impediately prepared RO that
they could he shown to the other departments as being the time of thing he
MI looking for,
The Secretary instructed Mr. D. 9. Tell and myself to see Secretary
end give his A cony of the Lease-Lend chart. Cn November 7, Mr. Yell
and : celled on Secretary Stimson (Assistant Secretary Lovett was with him)
and Kr. 3ell explained the chart. Secretary Stimson examined the chart and
indicated considerable interest in it. On November 8, nt the Secretary's
instructions. I SAV Secretary Knox end handed him PL coof of the chart, end
be vos particularly interested in the items of ship renair, etc. shown on
the chart. Re later thanked the Secretary, by letter, for the chart And
sekel that he be given copies of other charte 58 they were prepared.
Regraded Unclassified
36
Miss Chauncey -2-
The Secretary also asked that copies of the Lend-Lesse chart
be given to Mr. Stettinius and Dr. Lubin. On November 10 I personally
delivered a copy of the chart to Mr. Stettinius who was very pleased
to receive it, and on the same day telephoned Dr. Lubin who said he
should appreciate having the chart. Accordingly I sent a copy of the
chart to Dr. Lubin at the White House by special messenger.
The Lend-Lease chart WELD later revised to include the figures
to November 1, 1941, and copy of the revised chart was given to the
Secretary on November 26.
The data on the Army Air Corps appropriations were secured and
presented in chart form to the Secretary on November 24. At the Secretary's
recuest Assistant Secretary Lovett was handed a copy of the chart on the
same day, and on December 5 the Secretary signed a letter to the Secretary
of Var enclosing a copy of the chart.
The data on the Navy Department appropriations were secured and
presented in chart form to the Secretary on December 3. The Secretary
signed letters to Secretary Knox on December 4 and to Admiral Stark,
Assistant Secretary Forrestal, and Colonel Donovan on December 5 enclosing
copies of the chart.
The data on the Maritime Commission appropriations were secured
and presented in chart form to the Secretary on December 5, and the same
day the Secretary signed a letter to Admiral Land enclosing a copy of
the chart.
On December 5 the Secretary signed a letter to the Director of
the Budget enclosing a copy of each of the charts (Lend-Lease, Army Air
Corps, Navy, and Maritime Commission).
To date the necessary information has not as yet been secured
from the War Department (other than the Army Air Corps). The Secretary
addressed a letter to Secretary Stimson on December 3. asking when the
information might be expected, and Secretary Stimson replied on December
10 stating that the information would be furnished us as soon ne it could
be compiled.
The Secretary has by letter asked the various departments concerned
to furnish us with this information on a monthly basis hereafter, and charts
will be prepared in this Division accordingly.
Regraded Unclassified
37
December 18, 1941.
MEMORANDUM FOR THE SECRETARY'S FILES
Conference in Mr. White's Office
December 17, 1941
3:00 P. M.
Present: Mr. White
Mr. Winant, State Department
Mr. Winant called at his request. Mr. Winant told Mr. White
that he was writing up the Lend-Lesse arrangements with Norway
and was seeking some economic information with respect to the
Norwegian capacity to pay after the war, Some of the items in
the Lend-Lease arrangement called for repayment to the United
States in dollars, and Mr. Winant wanted an opinion of the cir-
cumstances in which Norway would be likely to find itself after
the war from a balance of payments point of view. Mr. White
described what he thought the Norwegian balance of payments
situation would likely be. He suggested that it would be very
helpful to Norway if the period of repayment would be long-term
rather than short-term, 80 as to enable Norway to adjust its
balance of payments, in the event any substantial cash payments
were called for, without loss of too much gold. Mr. White ven-
tured the opinion that we would probably be eager to help
Norway get on its feet economically after the war and therefore
the smaller the burden that could be imposed on her during the
earlier years, the more quickly could she resume economic
health. Mr. White told Mr. Winant that if he felt he wanted
more information on the subject, we would be glad to send him
a memorandum on it.
Regraded Unclassified
38
full
Washington, D.C., December 17, 1941.
To
All Collectors of Customs
220-T. Please refer to Circular Telegram 214-T dated
December 12, 1941. All aircraft not exceeding 600 horsepower
may be considered training-type aircraft. Accordingly, you
may permit the exportation of all aircraft not exceeding
600 horsepower, and spare parts and accessories for such
aircraft, without regard to Circular Telegram 210-T dated
December 9, 1941, provided export licenses, where necessary,
are presented. In cases of doubt whether aircraft described
in specific shipments should be considered training-type,
you should obtain a decision from the Department of State.
Kerr - Chief, Office of Export Control
Regraded Unclassified
full
39
Washington, D.C., December 17, 1941.
To
All Collectors of Customs
221-T. You are hereby authorised to permit the exportation
of aircraft, aircraft parts, accessories, or equipment,
without regard to Circular Telegram 210-T dated December 9,
1941, provided export licenses issued on or after December 15,
are presented with each shipment,
Kerr - Chief, Office of Export Control
40
December 17, 1941.
Dear Mr. Chairman:
I am enclosing an unsigned
letter which I have received in regard
to sales of Transamerica stock by the
brokerage firm of Walston & Company.
Very truly yours,
(Signed) E. Norgenthau, MR
Secretary of the Treasury.
Hon. Edward C. Eicher, Chairman,
Securities and Exchange Commission,
Washington, D. C.
Enclosure
EHF:gmb 12/16/41
9.47h.
By Meesenger
Regraded Unclassified
December B, 1941
San Francisco, California
Henry Morgenthau Jr.
ameretary of the Treasury
11 Thirtieth Street
Washington, D. C.
Dear Mr. Morgenthau:
I am indeed sorry that I did not write this letter to
you long before this, bear of personal harm and economic
destruction by the Pacific Coast's most powerful and
sinister organization has prevented it until now. I hope
that the facts, which I shall relate will enable the Federal
Government to prosecute and convict those guilty of criminal
action.
For many years I had been a loyal, unsuspecting and
gullible, employee of the dishonorable stock brokerage firm
called, Walston & Company, 265 Montgomery Street, San Fran-
cisco. This brokerage firm, after an investigation in 1939
by the Securities and Exchange Commission, mg suspended for
one month, during Aurust 1941, from the New York and San
Francisco Stock Exchanges.
During the hearings of S. E. C. against the brokerage
firm of Walston & Company it was established by evidence and
fact that 90% of the firm's canital was provided in a most
circuitous and suspicious manner by the powerful A, P.
Giannini and family.
The S. E. C., unfortunately, lacked the evidence to es-
tablish that Mr. Vernon C, Walston, and his brokerage firm
manipulated the price of Transamerica Corporation stock and
urged the unsuspecting selesmen of Walston & Company to un-
load on the clients of Walston & Company at ton prices, said
Transamerica stock in April 1937.
Had the Securities and Exchange Commission investigators,
examined the records of walston & Company, especially for the
month of April 1937, they would have discovered that Mr. Vernon
C. Walston and his firm were selling Transamerica stock which
belonged to A. P. Giannini, L. M. Giannini, Clarence Cuneo,
and the Pacific Coast Mortgage, and the Associated Distribu-
tors, (both Giannini diabolical subsidiaries) to the clients
of Walston & Company at the top of the market.
Mr. Vernon C. Walston in April 1937, on orders from
A. P. Giannini, L. M. Giannini, and the Pacific Coast Mortgage
Regraded Unclassified
(2)
Company, which has a permanent representative within the firm
of Walston and Company; called into said Walston's office the
salesmen of the firm. Mr. Walston told each selesman, private-
1v and individually, to go out and sell all the Transamerica
stock possible, that the stock which was then selling at $16
per share would within thirty to sixty days be put up to $25
per share by the 'insiders', The salesmen, believing the
advice of their employer, Mr. Walston, sold thousands of
shares of Transamerica during April 1937 to their clients,
Each salesman urged his clients to buy Transamerica stock at
$16 to $17 per shere because, Mr. Welston and Mr. Giannini
promised it would be $25 per share in thirty to sixty days.
As rapidly as clients of the salesmen of Walston & Company
would buy Transamerica Stock, A. P. Giannini, L. M. Giannini,
Clarence Cuneo, and the Pacific Coast Mortgage Company would
sell it either through walston & Company or through other San
Francisco brokers. AS much Transamerica stock was sold to
clients of Walston & Company as could be unloaded by the
Giannini interests without causing undue suspicion. of course
with the insiders unloading, Transamerica collansed in price
as soon BS the buying DOWGT of the clients of walston & Company
W88 setureted. The records of walston & Company will show
that this subsidiary of the Gianninis' made its biggest
profit in brokerage commissions in April 1937 of any month
in this institution's history,
If the investigators of the Securities and Exchange Com-
mission would examine the records of Walston & Company for the
month of April 1937; if they would ouestion the clients of
walston & Company, who were urged to buy Transamerica stock
in April 1937; if they would examine the buy and sell side of
every Transamerica transaction in April 1937, they would prove
beyond any doubt that Mr. Vernon C. Walston, and his firm, are
the brokerage front of the Giennini family end interests; that
by criminal violation of brokerage trust, said Walston urged
his salesmen to urge their clients to purchase Transamerica
stock; in order that the Gianninis' and the Pacific Coest
Mortgage could unloud at a handsome profit their holdings of
Transamerice.
If the Securities & Exchange Commission would place the
salesmen of alston & Company on the stand, these facts
would be revealed, If the clients of walston & Company were
given the opportunity to testify, they would declare that
they purchased Transamerica stock at the insistence of said
salesmen.
The chief executive of the Pacific Coast Mortgage main-
tains his headouerters in the private offices of the broker-
age firm of Walston & Company. No employee of walston & Com-
pany is ellowed to question the right of the Pacific Coast
Mortgage executive's access to all the secret end private
records of the brokerage firm of Welston & Company.
Regraded Unclassified
(3)
If the Federal Government is sincerely desirous or re-
wing a most dangerous financial malignant growth on the
Pacific Coast here is the opportunity. It is the avowed am-
bition of A. P. Giannini and L. M. Giannini; heads of the
Bank of America, and their insufferable subsidiaries, the
Transemerica Corporation, The Capital Company, the California
Landa Company, the Pacific Coast Mortgage Company, the broker-
age firm of Walston & Company, and many others, to eventually
have complete control over the financial, economic, and even
the political life of the entire Pacific Coast. It is their
ambition to control all economic and financial life in the
Nest, and to crush all opposition through their tremendous
financial power. It is their desire to have B. Giannini Fin-
ancial Empire second to none in the United States. It is
with this purpose that the Gianninis have established so many
subsidiaries throughout the Pacific Coast.
As a result of the Federal Government's recent attack on
the Bank of Americe, which was settled; and the pending trial
on Transamerics Corporation, this Giannini ambition is now
biding its time. However, as soon as the present Roosevelt
Administration is no longer in office, nothing will stop the
Gianninis from becoming the country's leading Financial Dic-
tators with complete economic and financial control over the
entire West Coast.
I trust and hope the Securities and Exchange Commission
and the Federal Authorities will efficiently and completely
prosecute the criminal actions of the brokerage firm of
Walston and Company, V. C, walston, A. P. Giannini, and all
others associated with this most dengerous and neferious
organization.
Sincerely yours,
an American Citizen who
Dru"S for the elimination
of both World and Domestic
sources of evil.
Regraded Unclassified
Visa Chauncey
TREASURY DEPARTMENT
44
INTER-OFFICE COMMUNICATION
DATE
December 17, 1941
TO
Secretary Morgenthau
FROM Mr. Districh
STRICTLY CONFIDENTIAL
Official neles of British-owned dollar securities under the vesting order
practive February 19, 1940:
No. of Shares $ Proceeds of Nominal Value $ Proceeds of
Sold
Shares Sold
of Bonds Sold
Bonds Sold
3
Nil
Nil
5,500
3,860
y11
Nil
Nil
Nil
17
Nil
Nil
Nil
Nil
Nil
Nil
11
Nil
Nil
12
N11
Nil
Vil
511
13
Nil
Nil
Nil
Nil
N11
Nil
5,500
3,860
les from
Feb.22,1940 to
Dec. 6,1941
9,847,580-1/2
281,856,881
45,604,516
37,433,788
Stles from
Feb.22,1940 to
Dec.13.1941
9,847,580-1/2
281,856,881
45,610,016
37,437,648
A
Regraded Unclassified
- Chaunsey
TREASURY DEPARTMENT
45
INTER-OFFICE COMMUNICATION
DATE December 17, 1941
Secretary Morgenthau
TO
FROM
Mr. Dietrich
STRICTLY CONFIDENTIAL
Official sales of British-owned dollar securities under the vesting order
effective February 19, 1940:
$ Proceeds of
$ Proceeds of
Shares Sold
Bonds Sold
Total
Dec. 8
Nil
3,860
3,860
9
Nil
Nil
Nil
10
Nil
Nil
Nil
11
Nil
Nil
Nil
12
Nil
Nil
NS1
13
Nil
Nil
Nil
Nil
3,860
3,860
Sales from
Feb.22,1940 to
Dec. 6,1941
281,856,881
37,433,788
319,290,669
Seles from
Feb.22,1940 to
Dec.12,1941
281,856,881
37,437,648
319,294,529
319,294,529
$ proceeds of non-vested securities sold
Dec. 1, 1941 - Dec. 6, 1941
200,000
$ proceeds of non-vested securities sold
Sept. 1, 1939 - Nov. 29, 1941
239,100,000
$ proceeds of non-vested securities sold
Sept. 1, 1939 - Dec. 6, 1941
239,300,000
239,300,000
GRAND TOTAL
558,594,529
9 Units sold from Aug. 18, 1941 - Dec. 13, 1941 for
$
42
11 Shares Stock Dividend sold Aug. 18, 1941 - Dec. 13, 1941 for
$
123
50 Rights sold on Dec. 12, 1941 for
$
68
55,772 Rights sold from July 24, 1941 - Dec. 6, 1941 for
$102,853
55,822 Rights sold from July 24, 1941 - Dec.13, 1941 for
$102,921
A
Regraded Unclassified
ENCLOSURES
46
COPY No.
(For Bowd only)
MILITARY INTELLIGENCE DIVISION W. D. G. S.
MILITARY ATTACHÉ REPORT
CANADA
(Constry reported on)
Subject Who's the - Donald Gordon
(Detal descriptive Usle)
I. G. No. 5990
From M. A. Ottawa, Can. Report No. 929
Date December 17, 1941
Source and degree of reliability:
The artime Prices and Trade Board
SUMMART.-Bere enter exreful summary of report, containing substance succinetly stated; include
important facts, names, places, dates, etc.
Summary: A brief biographical sketch of
Doneld Gordon, Deputy Governor of the Bank of Canada
and Chairman of the Wartime Prices and Trade Board,
charged with the task of controlling prices for the
Dominion.
Distribution by originator
Routing space below for use in M. 1. D. The section indicating the distribution will place & check mark in
the lower part of the recipiente' box in CBSP one copy only in to & to him, or will Indicate the number of copies
in case more than one should be sent, The message center of the Intelligence Branch will draw A circle around
the box of the recipient to which the particular enpy is to go.
one
0-1
0-4
04
WPD
unt
Blass
Cream,
Time.
P.B.I.
A.W.C.
O.&G.
Ind. Call
Export
E. a.
Control
X
X
A. C.ota.
Chief II
MA be.
FL Bec,
Rev. Dec.
Trans.
on
650
Inf.
Coord.
Del.
Coord.
C-3
Bre,
Code
/
OPM
AM.
of Inf.
2
Dir.
X
All
BE
CR
as
**
we
FM
LA
Onl,
Diane.
Faid
ASW
USW
ASWA
Pm.
X
X
x
CHIRPS OF ARMS AND SERVICES
Inf.
Car.
PA
CAO
AO
AAP
Big.
Armil
Ord.
QM
CWB
Med.
be.
Fin.
Attaché at
CG Phil.
CG Put.
oa Haw.
Enclosures:
Regraded Unclassified
47
On December 1, 1941, Donald Gordon, Deputy
Governor of the lank of Canada neatmed the job of
price control and became Cheirwan of The Wortime Prices
and Trade Board.
The new Chairman of this important Government
agency is 40 years old. He was born in Olduelórum, a
village near Aberdeen, Scotland, and cane to Canada when
he was 13 with other members of his family and settled
in Toronto. His schooling consisted of attendance at
the Manning Avenue Public School in Toronto and some
study st night school. At the age of 15 Donald Cordon
went to work as a junior clerk at the Bank of Nova
Sootia. Within ten years, at 26, he was assistant chief
soccuntant. At the ace of 29 he was assistant menager
of the bank's min office in Toronto and at 34 Mr. Gordon
was appointed rirst secretary of the newly formed Bank
of Canada, the Doninion's central bank in Ottews. Whan
only 37 Mr. Gordon was Made Deputy Governor of the neak
of Canada and as such because the right hand ann of
Graham Towers, the bank's governor.
Then the war broke out in September, 1939, and
Canada had to set up 8 Foreign knobange Control Board to
conserve foreign money and preserve the nation's inter-
national balance, Messre. Towers and Gordon gave an
excellent account of themselves.
Mr. Gordon is 6 hard worker and nas made
considerable progress in his present assignment. de
appears to have the faculty of surrounding himself with
the right nen to assist him in the inportant task of
prioe control for Canada.
Mr. Gordon 1s one of the hardest working To
in the Dominion and has little leisure but last year
be 010 accept the presidency of the Ottawa Canadian Club.
From K.A.Ottawa, Dan. Report No. 929 December 17. 1941
John 9. Gullst
Lt. Col,, Air Corpo
!lilitary Attache
Regraded Unclassified
48
COORDINATOR OF INFORMATION
WASHINGTON, D.C.
December 17, 1941
The Honoruble,
The Secretary of the Treasury
Washington, D. C.
Dear Henry:
Thank you very much for your letter
of the 15th, enclosing a memorandum of data
and suggestions on steps that might be taken
in connection with Eire.
Sincerely,
William J. Bill Donovan
C
TREASURY DEPARTMENT
49
0
Telegraph Office
P+
Y
San Francisco, California
December 17, 1941
Mr. D. W. Bell
I have today delivered to the Federal Reserve
Bank of San Francisco check for $6,813,442.13 for
credit of Secretary's special accounts
Haggerty
Superintendent
Copy:bj:12-18-41
50
The information requested on page 2 of the attached dispatch will
be obtained from the Federal Reserve Bank of New York by Mr. Dietrich.
M
0
P
I
51
DEPARTMENT OF STATE
Washington
In reply refer to
December 17. 1941
FD 851.515/150
The Secretary of State presents his compliments to the
Honorable the Secretary of the Treasury and encloses a copy of despatch
no. 136, dated December 5. 1941, from the American Consulate, Martinique,
French West Indies, concerning the verification of the presence of French
gold at Martinique.
The Secretary of State requests the advice of the Treasury Department
as to the reply to be made to the despatch under reference.
Enclosure:
From Consulate, Martinique,
no. 136, December 5. 1941.
eh:copy
12-18-41
Regraded Unclassified
Partinime, P.W.I.,
52
December 5. 1941.
In ousdrublicate; all copies via Inval Petrol Plane December 6 to San Juan,
thence Paneir. One copy "Tor Division of Commercial Affairs".
Verification of Presence of French Gold
at Martinique.
I have the bonor to report the receipt yesterday of a. British
Intelligence report from Trinidad that the gold stored here had been secretly
removed on November 12th to Precheur, the farthest point attainable by the
pisotal road north of Fort-de-Frence, end there transferred to B. French
nevel vensel.
It WAR coopible for me to orrange a visit a few hours later to the vaults
in Fort Dessix where, on e. height rising abruptly 450 feet above the city,
the gold was transferred last year from the cruiser Emile Bertin. 1 went in
company with Admiral Robert's Chief of Staff, Captain Benech, and the Bank of
France official, Mr. de Katow, who has remained in personal charge of the
gold ever since it left Brost in June of 1940. The structure in which the
gold we placed (see enclosed sketch) is near the main entrance to the Fort,
and B squad of negro soldiers was on guard at each of three points along the
short distance to the vaults, all under the commend of a white officer.
There are four vaulte, of which the first containe several hundred cases
of Hotchkies ammunition. In the other three, I saw several stacks of boxes
numbered up to eporoximately 8,000, which Hr. de Katow said had been made
here and the contents of 4,000 sacks of gold coin transferred thereto, each
seok containing 62-1 kilograms. Another large stack of boxes, Kr. de Katow
said, numbered 1,000 and contained gold coin that had been brought from Brest
BQ necked. The locally-made boxes were duplicates of those made in France,
the external dimensions being approximately 0.0 follows: Length 12 or 13 inches,
width 9 or 10 inches, depth 7 or S inches. The material VAS about en inch
thick, thus allowing B net capacity of between 500 and 750 cubic inches. Zach
box was heevily nailed und bound with a steel strip about one-half inch wide.
Admiral Robert, Captain Benech and Mr. de Katow have assured me from time
to time that all of the gold brought here on the Imile Bertin WAS still here.
The latter two now told ne that every one of the approximately 9,000 boxes
contained gold coin weighing 31-1/4 kilograme. The contents of each of the
boxes 1 lifted undoubtedly weighed that much; whether they, or any of the others,
actually contained gold, I do not know since the circumstances were not pro-
pitious for 2. request that any be opened for my inspection. In other words,
my inspection Ve.0 equivalent to that of Rear-Admirel Greenslade in November of
1940. He end I are the only officiale other than French who have ever boen
permitted to enter the vaults.
It is probable that French gold brought to the United States arrived
there packed in & manner identical with that stored here. thus providing an
entry means of checking verious aspects of the latter in the light of by оbлот-
vations yesterday. Accordingly, it would be appreciated If the Department
would ascertain and inform me
Regraded Unclassified
- 2 -
53
1. Whether the gold in the United States is in the
form of coin, the form in which I an told the
Bank of France keeps its reserve.
2. The exact capacity in cubic inches of the
standard container in which the gold arrived, and
& description thereof.
3. The exact weight of the gold in each box.
4. & description of the menner in which the gold
contents were packed.
The specific gravity of pure gold is such as to cause 31-1/4 kilograme
of it to occupy a space of about 100 cubic inches. The resulting implications
in this case are (1) that each box at Fort Desaix could contain several times
the amount of gold coin said to be therein, (2) that most of the space in
each box may be devoted to packing material, or (3) that the boxes may contain
a material other than gold. The information requested above is intended to
clarify these points, but equally helpful would be the comments of experts in
the Federal Reserve who are experienced in the handling of French gold.
Às far as the British Intelligence report is concerned, it reached ne
owing to my efforts to concentrate at this point all information regerding the
French West Indies and French Guiana circulating outside those possessions,
for evaluation and reference to the Department whenever justified. The
British Intelligence officer in St. Lucia pays Martinique negro fishermen
to bring him information, and much of it now returns to me from either
St. Lucis or Trinidad. It has been uniformly unreliable, and at times 90
imaginative BO to lead to the belief that the negroes have manufactured it
for sale to the Britich.
In this case, it is true that a French navel vessel, the auxiliary
cruiser Barfleur, WE.S in the vicinity of Precheur on November 12th. It is
highly improbable, however, that 350 tons of gold, or any substantial part
of it, could have been transported there and loaded on the vessel without
some inkling of it reaching this office through the contacts established in
view of an attempt of precisely this nature.
Respectfully yours,
Marcel E. Malige
American Consul
Enclosure:
Sketch of Ft. Desaix and
À true copy of
vicinity (single copy).
the signed orig.
863.4
MENtals
ch:copy 12-18-41
Regraded Unclassified
C
0
P
Y
54
DEPARTMENT OF STATE
Washington
In reply refer to
December 17, 1941
FD
The Secretary of State presents his compliments to
the Honorable the Secretary of the Treasury and encloses
copies of the paraphrase of telegram No. 2064, dated
December 16, 1941, from the American Embassy, Rio de Janeiro,
Brazil, concerning the situation of Axis banks.
Enclosure:
From Embassy, Rio de Janeiro,
No. 2064, December 16, 1941.
eh:copy 12-17-41
C
o
P
Y
55
PARAPHRASE OF TELEGRAM RECEIVED
FROM: American Embassy, Rio de Janeiro, Brazil.
DATE:
December 16, 1941, 4 p.m.
NO. : 2064.
The Axis bank situation is becoming very serious
here. Withdrawals for general expenses are authorized
by the Bank of Brazil. New deposits are of little
account.
Applications of Italian, Japanese and German
Embassies for withdrawal of funds exceeding the estimated
normal requirements continue to be rejected by the Bank of
Brazil.
CAFFERY
eh:copy 12-17-41
TREASURY DEPARTMENT
56
INTER-OFFICE COMMUNICATION
DATE December 17. 1941
TO
Secretary Morgenthau
FROM Kr. Dietrich
CONFIDENTIAL
Registered sterling transactions of the reporting banks were as follows:
Sold to commercial concerns
£68,000
Purchased from commercial concerns
£21,000
Open market sterling remained at 4.03-3/4. There were no reported trans-
actions.
The Canadian dollar moved off to a closing discount of 12-5/8%, as against
12-1/45 yesterday and 11-3/4% a week ago.
The Cuban peso WEB offered at a premium of 1/4%, representing the best rate
in many years.
The Venezuelan bolivar improved 30 points to close at .2700.
In Rew York, closing quotations for the foreign currencies listed below
were as follows:
Argentine peso (free)
.2390
Brazilian milreis (free)
.0516
Colombian peso
.5775
Mexican peso
.2065
Uruguayan peso (free)
.5310
There were no purchases or sales of gold effected by us with foreign
countries today,
The Treasury was advised that, on December 10. the Government of the U. S. S. B.
deposited about $6,800,000 in gold at the San Francisco Kint for account of the
Secretary of the Treasury. This gold was shipped from Russia to San Francieco on
the SS "Transbalt". It will be applied against our gold purchase agreement of
October 10 with the Russian Government.
The State Department forwarded B. cable to us reporting that the Bank of New
South Vales, Sydney, shipped $165,000 in gold from Australia to the American Trust
Company, San Prencisco, for sale to the San Prancisco Mint.
In London. spot and forward silver were again fixed at 23-1/24, equivalent
to 42.67#.
Regraded Unclassified
57
-2-
The Treasury's purchase price for foreign silver was unchanged at 35#.
Handy and Harman's settlement price for foreign silver was also unchanged at
35-1/8#.
We made no purchases of silver today.
confidential
A
58
BRITISH EMBASSY,
WASHINGTON.
PERSONAL AND
Secret
December 17, 1941.
Dear Mr. Secretary,
I enclose herein for your
personal and secret informa-
tion copies of the latest re-
ports received from London on
the military situation.
Believe me,
Dear Mr. Secretary,
Very sincerely yours,
Halifax
le Honourable
Henry Morgenthau, Jr.,
United States Treasury,
Washington, D.C.
Copy No.
59
BRITISH DOST SECRET
(U.S. SECRET)
OPTEL No. 38
Following Le supplementary resume of operational events covering
the period 4th to 11th December, 1941.
(1) NAVAL
Our submarines, operating egainst the Axia ses supply route to
AFRICA, made a mmber of successful attacks on shipping. Light navel forces con-
tinued to support our military operations in LIBYA, Operations in far eastern
waters since the outbreak of was with JAPAN have been fully recorded in the daily
summaries. The German eain unita in the BALTIC nere engaged in intensive exer-
cises during the week,
Submarines, There mas B. concentration or U-boats in the GIB-
RALTAR area throughout the week and B. smaller number were working in the North-
Restern approaches, but otherwise there was little activity either in the North or
South Atlantic, 15 or 16 U-boats are believed to be operating in the MEDITERRANEAN,
Our shipping casualties were light, apart from 2 probably 3 ships terpedoed in cone
voy west of IRELAND, all were due to mines, Shipping losses for November amounted
to 100,491 tons, 88,003 tons being British, This total 10 nearly 100,000 lower
than the previous month, and, except for March, 1940, represents the smallost
monthly total since the beginning of the war,
Drade. During the week ending 10th December, 978 ships were con-
voyed. Importe into the United Kingdom from ships in convey for the week ending
6th December were 973,000 tonn, including 276,705 tons of oil imports, Energy
mine-laying by E-boats and aircraft took place off the east coast, 49 mines were
accounted for during the period,
(II) MILITARY
LIBYA. The British forces have now regained the tactical int-
tiative, Except for small parties at HALFATA and BARDIA, who must sooner OF
later surrender, the enemy forces are now concentrated Test of the line GAZAIA-
BIR HAKEIM, fighting a rearguard action in the hope of being able to stand on e
defensive line further Nest, The object of the remante of the 3 enemy ermoured
divisions, nho are now probably grouped as one formation, must be to retain ow-
ficient mobility and striking power to inflict casualties as they withdraw, The
task of the British forces is to maintain such pressure on the retreating enemy
that he canoot reorganise sufficiently to right effectively.
Regraded Unclassified
- 2 -
60
RISSIA. The German General Staff having decided to try to
stabilise their Russian front, the danger which threatened l'05000 1a probably
removed at least till the Spring. The German troops are on the defensive along
most of the line and are even under euch pressure in Botte sectore that the with
drawal of divisions to refit may not be easy, In the southern sector, it 10 of
particular importance for the Germano to resume their advance, but weks and pos-
sibly months night now elapse before they recapture ROSTOV with corresponding
postponement of their time-table for CAUCASIA, Finally, the air situation 10 en-
couraging, for it appears that the Russian Mr Force at present holde superiority
on the most of the front, particularly in the 1105007 sector.
JAPAN. It appeare probable that the primary Japanese objectives
are SINGAPORE and the PHILIPPINES, Operations against HONG KONG and the Pacific
Islanda are subsiduary to these principal aims, the threat to BURMA and BORNEO
being intended to develop subsequently. At HONG KONG, our troops have now acted
on their standing orders to evacuate the Hainland then attacked in overwhelming
strength, Their retirement has been successful in DO far as they have fought off
energy attempts to interfore with its orderly execution, Guarilla activity by the
Chinese may develop later in the rear of the Japanese attacking force. In MALAYA,
our naval and air losses have compelled our land forces to face 6. situation which
had not been contemplated, in as much as they must now bear the brunt of an attack
by Japanese forces enjoying sea and air superiority, enabling them to reinforce
with little British interference, The demolition of railway bridges, sto., which
our troops are effecting as they retire should impede the onemy's advance, Pur-
ther north, the occupation of SIAM gives the anomy an important base for opera-
tions against either MALAYA or BURMA, and even against our non communications in
the BAY OF BENGAL, The Japanese have some ten divisions already in MALAYA, STAM
and Southern INDO-CHINA, and a further 12 or Bo, including most of the seven in
JAPAN, might be made available imadiately or at short notico for other operations.
The limiting factor, however, would be shipping and air support.
WESTERN PACIFIC. The phosphate plants in OCEAN and NAURU Islands
have been demolished according to previously prepared plans.
BURLIA. The sacond flight of an Indian infantry brigede has left
INDIA for RANGOON,
HUNGARY. The mmber of Hungarian troops on the Russian frost
has been reduced to about 30,000.
ROMANTA. The Rumanian contingent in RUSSIA, though being reduced,
still amounts to the equivalent of about two divisions in action in the CRIMEA.
Regraded Unclassified
- 3 -
61
YUGOSIAVIA. The Serbian Patriots, Under Colonel Mihailovich,
are being harried in the mountains, but are still capable of causing the Germane
considerable trouble.
BUIGARTA. There are nomo indications of the beginning of German
groop concentrations in BUIGARIA.
(III) AIR OPERATIONS
UNITED KINGDOM. Operations Fore severely restricted by bad
weather, bomber command only being able to carry cut their programme on one
night, Several successful attacks were made on enemy shipping, it le estimated
that 37,000 tone were sunk or damaged by our aircraft. The G.A.F. activity was
negligible.
CENTRAL MEDITFRRANTAN. A total of nearly 40 tons of H.E. and
Incendiaries were dropped on NAPIES in the course of two attacks,
LIBYA. Day night bombers and hurricane bombers directed heavy
attacks chiefly against enemy ermoured vehicles, N.T. and aerodromes, Naval air-
craft joined in by bombing HARDIA dooks and Wellingtone raided TRIPOLI, Our
fighters patrolled the battle area and accounted for several dive bombers. They
also herassed the enemy and took heavy toll of his mechanical vehicles in lon-
flying attacks. The Axis air forces kept up a high scale of operations with their
dive bombers and single engined fighters.
FAR EAST. Oring to heavy enemy attacks by superior forces, THE
were obliged to evacuate the aerodromes in Northern MALAYA after loving some of
our fighters destroyed on the ground. PENANG has been bombed several times with
fairly heavy casualties among the civilian Asiatic population.
RUSSIA. Intensive operations by the Russian Air Force in con-
Junction with their recont counter-attacks provide further evidence of the present
German weakness in fighters, due to withdrawal of units for refit or employment
elsewhere. The service ability of German aircraft has probably been reduced by
the intense cold to A greater extent than those of the Russian Air Force whose
ground staffs are more fumiliar with such conditions and whose aerodromes have not
been within the battle zone,
(IV) EXTRACTS FROM PHOTOGRAPHIC AND INTELLIGENCE REPORTS ON RESULTS OF R.A.E.
AIR ATTACKS ON ENTMY TERRITORY IN FIR OPE
NAPIES. Cosumlties and damage on 27th/28th November were the
heaviest 80 far, Photographecin September and October show severe damage to rail-
way sidings at the central junction and confirm reports that a munition train was
destroyed causing widesproad damage from explosion and blast. One part of the er-
senal has been badly damaged, two large cisterns wrooked et an oil refinery and 6.
large gas bolder destroyed at the gas works,
Regraded Unclassified
Copy No, 11
BRITISH LDST SECRET
62
(U.S. SECRET)
No. 37
Information received up to 7 an, 16th December, 1941.
(I) NAVAL
MEDITERRANEAN. A 6,000 ton Italian merchant vessel is beached
near CAPE METHONI (South West GREECE) after being terpedoed by & British submarine,
There are about 150 eurvivors from the British ordiser sunk off ALEXANDRIA,
CHINA- A Dutch submarine sank one enemy merchant ship on the 12th
and one oiler on the 19th off KOTA BHARU,
(II) MILITARY
LIBYA. 14th, Our troops attacked all along the line and by 11
a,m, had foroed B. gap in energy centre. By 2,30 p.m. enemy were still holding posi-
tion to East of GAZAIA BAY and astride main road, and also further to South astride
TRIGH EL AED, In afternoon, enemy counter attacked in latter area employing 21
tanks, Attack continued until the evening but energy failed to press attack home,
Three enemy tanks destroyed.
MATAYA. 15th. In South KEDAH, enemy resumed his attack at dawn
and succeeded in isolating our left brigade, Touch has not yet been restored in
spite of counter attack, Our foroes operating in the KROH area have been rein-
forced by B. fulther two battalions and are at present holding their ground without
difficulty. Enemy's min objective appeare to be to penetrate between our two
forces in this area, Ho 18 pressing home his attacks with fanatical courage in
spite of very heavy losses,
KELANDAN. No change.
BURNA, A mall reconnaissance patrol, operating in the area of
MESOD (170 miles East of RANGOON), was fired on by Siamese Gendarmes,
HOMG KONG. The withdrewal from the mainland to the island was oct
pleted by morning 23th December, The three 60 coast defense guns on STONECUTTERS
Island have been destroyed by us and the garrison evacuated, Heavy and accurate
Japanese artillery fire continues against our defences in the Northern part of the
Island, The Japanase are concentrating ferry craft on the KOWLOON side, and it is
thought they may conn attempt a direct assault on the island,
RUSSIA. The Russian forces are continuing their counter offensive.
They have osptured REFREMOV (North West of YELETS) and are advancing on CREL.
(III) ATR OPERATIONS
15th/16th, 47 aircraft despatched to BREST 17, OSTEND 25, BOR
mining 5g One benber is missing,
Regraded Unclassified
63
- 2 -
LIBYA. 13th/14th. 15 Wellingtons bombed DERNA tom and aerodrome,
Hts were made on the barracks, on a mechanical transport depot and on a concentra-
tion of vehicles. Two large fires were started,
14th, Our fighters attacked a convoy of 40 South bound lorries on
the EL AGHEIIA - BENGHAZI road, inflicting heavy casualties on troops, destroying
two lorries and damaging 35, during the day, our fighters shot down four enemy
aircraft. Ne lost four fighters,
14th/15th. 10 Wellingtons dropped 16 tons of bombs on BENGHAZI
Harboth, all of which fell in the target area.
(IV) ENEMY ACTIVITY
15th/16th. 37 aircraft operated against the United Kingdom of
which ten made landfall,
MALTA. 14th/15th. Eight aircraft raided the Island. Slight
damage was caused to civilian property.
MALAYA. 15th, IPOHTOWN in PERAK STATE was bombed by 20 enemy air-
craft. The aerodrome and a petrol dump hit.
(v) AIRCRAFT CASUALTIES IN OPERATIONS OVER AND FROM THE BRITISH ISLES
British - 1 bomber missing.
(VI) HOME SECURITY
15th p.m. 20 shells fell in the DOVER area, causing some damage
to houses and slight damage to military property. One fatal service casualty and
several people injured.
Regraded Unclassified
RESTRICTED
64
0-2/2657-220; No. 572 M.I.D., W.D. 11:00 December 17, 1941
SITUATION REPORT
I. Pacific Theater.
Philippines: American forces had situation well in hand
yesterday. There were no new developments. Small Japanese forces at
Aparri, Vigan and Legaspi still under attack. Hostile ships off the
coast under air attack. Hawaii: Submarines reported off Oahu but no
attacks made. Laui Island was shelled by a submarine on the 15th with
no apparent damage. No further activity has been reported. Wake
Island: Japanese submarine reported at Wake. The island received
hostile air raid last night and at noon the 16th. Results unknown.
Johnston Island: Two hostile ships raided Johnston after sunset yester-
day. Lalaya: Heavy fighting continued in Kedah area in northwestern
Malaya, according to the press, with Japanese making slight advances.
Hong Kong: Confused reports. Apparently the island is still under
heavy Japanese attacks. West Coast: No further reports of hostile
activities have been received.
II, Eastern Theater.
There is no change in the situation at Leningrad. The Finns
report Russian activity along the Svir river, especially at Osta (near
Lake Onega).
The Germans are continuing their withdrawal from the salients
north and south of Noscow. The Russians claim the capture of Kalinin
(north of Moscow) and Volovo (north of Yefremov).
III. Western Theater.
Air: British Air Ministry announced that the R.A.E. last
night attacked the German naval be se at Wilhelmshaven, Bremen and other
cities in northwestern Germany. Further attacks were made on Ostend,
Dunkirk and Brest.
According to the German Righ Command, German planes
bombed British ports of Plymouth and Dover last night and damaged A.
supply ship in British coastal waters.
IV. Middle Eastern Theater.
Air:
The Italian High Command admitted R.A.F. attacks at
Brindisi, Italy, and at Catonia on the Island of Sicily,
Ground: Bad weatle I has hampered British operations in the
Gazala area. Axis rear guards are still holding with apparent difficulty.
RESTRICTED
Regraded Unclassified
65
December 18, 1941
9:45 a.m.
GROUP MEETING
Present:
Mr. Paul
Mr. Blough
Mr. Thompson
Mr. Buffington
Mr. Sullivan
Mr. Haas
Mr. Morris
Mr. Gaston
Mr. Kuhn
Mr. White
Mr. Schwarz
Mr. Foley
Mrs. Klotz
H.M.Jr:
Good morning, everybody. What have you got?
Gaston:
I have nothing.
H.M.Jr:
You haven't got a thing?
Gaston:
I have nothing this morning.
H.M.Jr:
They gave me this, Herbert, and I think - I
don't know whether you have a copy, but --
Gaston:
I have & copy, yes. I think that is the same
one they handed me yesterday.
H.E.Jr:
Ed?
Gaston:
I am sorry, there is just this one thing that
Campbell asked you to see from Hongkong. It is
just what you would expect as to the situation
Regraded Unclassified
GG
- 2 -
there, from what you already know from
dispatches.
A...Jr:
Harold Graves ran a wonderful show out there
in Chicago and it really was inspirational
and done on a very high plane. They really
went to town.
millivant
When is Harold coming back, Mr. Secretary?
M.S.Jr:
Not until tomorrow, maybe. Not before
tomorrow. It really was good.
Edward?
Foley:
The legislation, the omnibus legislation, is
completed except for the President's signature.
We have been working with Ben on an Executive
Order. Leo was up in New York all day
yesterday. We are having a lot of difficulty.
I don't think we are ever going to be able to
settle it satisfactorily without bringing it
back to you.
H.M.Jr:
That is all right.
Foley:
Well --
H.M.Jr:
We will have another luncheon. Isn't Leo
being good?
Foley:
Well, Leo backed off the formula we talked
about at lunch. He wants it to be more specific
and give him the things in the order rather
than give it to the Committee and allow the
Committee to decide.
4.8.Jr:
Wants to do it in the order?
Foley:
Yes.
H.T.Jr:
Well, keep fighting and when you need help, don't
let it get too far, let me know and we will
Regraded Unclassified
67
- 3 -
have another luncheon. You are not discouraged,
are you? I warned you.
Foley:
I know.
H.M.Jr:
How long have you been around Washington? You
ought to know that.
Foley:
And Ben is looking for a way - Ben wants to
run.
H.M.Jr:
Why?
Foley:
Well, he doesn't want to get in the middle.
H.M.Jr:
Well, anyway, it is --
Foley:
Apparently Jimmie Byrnes is going to have an
awful lot to do with the final disposition
of this.
H.M.Jr:
Jimmie Byrnes?
Foley:
Yes. I understand that he is going to take
some kind of & leave of absence from the Court
and help the President on the reorganization
powers of this omnibus bill. You see, this
gives the President complete power now to switch
anything from one department to another and
reorganize the defense agencies and reshuffle
the whole works; the story is that he is going
to devote his time to that and both Byrnes and
Oscar, who are working together - they worked
together on the legislation seem to think that
this all ought to be in one place, and the
place for it would be over here.
H.M.Jr:
Does Byrnes think that?
Foley:
That is what Oscar says.
H.M.Jr:
Well, don't let's take up too much time now.
Foley:
Yes. I think we had better talk about it &
68
- 4 -
little later on.
H.M.Jr:
Yes, let me know.
Foley:
You asked for & report on Mowrer. The account
should have been blocked when he went abroad.
H.M.Jr:
Yes.
Foley:
Well, all Americans, American citizens, when
they go abroad, have their accounts blocked
so they can only get five hundred dollars a
month remittances. The thing automatically
becomes unblocked when they come back into the
country. The Chicago bank didn't release
Mowrer's account when he came back and it
wasn't until Ferdie brought it to our attention
that Bernie took it up with the bank out
there and got it released.
H.M.Jr:
Are you sure that all these correspondents
who return, that their accounts are unblocked?
Foley:
Automatically unblocked when they come back.
H.M.Jr:
How does it work automatically? What is the
automatic? How do you know when they come back?
Foley:
When they come back?
H.M.Jr:
Yes.
Foley:
Well, when they get back in the country, as
soon as we find out that they are back in the
country their funds are released.
H.M.Jr:
How do you find out?
Foley:
Well, they should let us know.
H.M.Jr:
Well, that isn't automatic.
Foley:
Well, as soon as we know they are back --
Regraded Unclassified
69
- 5 -
H.M.Jr:
You had better take a look at it. It doesn't
sound very automatic with me. If you had
some arrangement when they came in through
Customs to notify you of the list, that would
be automatic, as the people return, Ed.
Foley:
Yes.
H.M.Jr:
That would be automatic. Will you take a look
at it?
Foley:
Yes.
H.M.Jr:
Anything else?
Foley:
I haven't been able to get Dr. Kline on the
telephone as yet. Mrs. Klotz said you wanted
an opinion about purchasing --
H.M.Jr:
That is personal.
Foley:
All right.
H.M.Jr:
You can tell me about it afterward. Go ahead,
John.
Sullivan:
There is a new development in the --
H.M.Jr:
I think I will send Ed out on the next
convention. My God, he seems low. I will
send you out to the next convention, Ed. Cheer
up. I spent two nights on the train and my
chin is up.
Sullivan:
There is some feeling on the Hill now that the
effective date of the use tax might be postponed
from February first until July first. That
would give us & chance to work out some other
things. It is a pretty bad situation. I don't
know whether it can be done or not, but I just
wanted to let you know we are working on it.
I don't think we should say anything to the press
at all.
Regraded Unclassified
70
- 6 -
H.M.Jr:
I send them to you and I will keep sending
them there.
Sullivan:
That is fine. I took up that matter with
Congressman Somers that he has been calling
you about. That is all taken care of. I
think George and I should see you sometime
before the luncheon.
H.M.Jr:
What luncheon?
Sullivan:
This noon.
H.M.Jr:
Oh. Well, if we have time after this meeting.
Sullivan:
O.K.
H.M.Jr:
Randolph?
Paul:
I have just a report that I am here, that is all.
H.M.Jr:
You and Lafayette. (Laughter)
Paul:
We will put it his way. We will say I am with
you.
H.M.Jr:
You all know the story they told about Jesse
Straus?
Paul:
No, I don't.
H.M.Jr:
Let's see if I have got this thing straight.
Oh yes, when he arrived as Ambassador to
France, he said, "Galeries Lafayette, I am
here, and the Frenchman answered, "Merci
beaucoup." (Laughter)
Klotz:
That is marvelous.
H.M.Jr:
Had you heard that, Ferdie?
Kuhn:
Yes.
H.M.Jr:
Is that about correct?
71
- 7 -
Kuhn:
He was very proud of that hims elf.
White:
Is it a true story?
Kuhn:
He told it on himself. He never seemed
embarrassed.
H.M.Jr:
I gave last night, just before I went to bed
at nine o'elock - I gave Ferdinand some ideas
for his speech in New York December 28 or 29.
When is it?
Schwarz:
Twenty-eighth.
H.M.Jr:
And I told him to talk to both Paul and
Sullivan about it. I thought I might give them
the basis of the philosophy for the next tax
bill without going into any details.
Paul:
It is all right. They are already after my
philosophy in the Wall Street Journal this
morning. (Laughter)
H.M.Jr:
No, the basis of how the Treasury feels.
Paul:
We will have a talk with him.
H.M.Jr:
Talk with Kuhn. I mean, giving them first
the Shoup stuff. Here is the situation we
are facing. This is what Mr. Shoup says and
this is what we have got to do. That doesn't
mean we are going to go into community
property or any of the other things. Based
on the information which Shoup has given us,
this is the situation we are facing, and what
can we do about it? Here are some of the
things we can do, you see, preparing the
public before I go on the Hill.
Paul:
It is a good idea.
H.M.Jr:
John is against it already.
Regraded Unclassified
72
- 8 -
Sullivan:
Not yet. (Laughter)
Gaston:
Only in principle.
H.M.Jr:
Did you hear that?
Klotz:
That is wonderful.
Sullivan:
I think I see a compromise coming, Herbert.
Morris:
I don't know that there is anything to be done
about it, but I think it is something that
probably ought to be kept in mind and maybe in
making statements little phrases might come
out, but the president of one of the Detroit
banks came in to see me Tuesday and I also
heard the same thing in New York yesterday,
that not only a lot of not too well educated
people, but a lot of people who ought to
know better, have been misconstruing the
reports on frozen funds and nationals of other
countries and even excess reserves, and
interpreting them all that the Government is
thinking of clamping down regulations on
how American citizens can draw on their own
checking and savings accounts, and they are
really worrying about it in large measures
and taking out cash.
H.M.Jr:
Wasn't that the thing that Dan Bell answered
to the Comptroller up in Massachusetts?
Schwarz:
That is right.
Kuhn:
That telegram of Dan's was published.
White:
You mean that they are hoarding?
Morris:
Yes, starting in to and starting in to worry
very much that they are not going to be allowed
to have their own accounts and run them in their
own way.
Regraded Unclassified
73
- 9 -
White:
In 50 far as they do that, the economic
effects are probably beneficial. I don't
think it is significant, in any case. I think
I would ignore it. It will pass over.
Sullivan:
I don't agree with Harry on that, Mr.
Secretary. I think this is very definitely
Nazi propaganda, because a week ago this
morning the story started on the Hill, and
by noontime it was all over up there that
the Treasury had absolutely drafted plans to
freeze every dollar that was invested in
Defense Bonds and Stamps and all the provisions
for redemption were going to be repealed
and that we absolutely had it all drafted.
White:
What follows from that? Supposing they do
think that for 8. while?
Sullivan:
That isn't going to help your sale of Stamps
and Bonds, Harry.
White:
I should think they would want to put their
money in - it wouldn't affect them wanting to
put their money in Stamps and Bonds. It might
affect them wanting to keep cash in the banks,
but I should think that if anything, if they
had to run out of cash, they would run in to
Stamps and Bonds. I think you could make 8.
case that would help the sale of Stamps and
Bonds.
Sullivan:
Now I think you are arguing to the fact that
we should give more publicity to the fact that
Bonds could be redeemed any time.
White:
Well, we will argue it out if you are going
to do anything. If you are not going to do
anything, it is all right.
H.M.Jr:
Take a look at Bell's telegram. They asked me
to say something about it at Chicago yesterday
and I refused to. It was one man. We had a
Regraded Unclassified
- 10 -
74
good press conference, top fellows, and not
a one of the press fellows asked me.
Ferdie, can you remember what the fellows
said was the definition of an economist in
Washington?
Kuhn:
They said, "When you fellows in Washington get
into trouble, you hire an economist either
to find a solution or an alibi."
White:
Or get you into more trouble. (Laughter)
Kuhn:
No, he just said, "to find you a solution
or an alibi."
White:
Both ways keep you out of jail.
H.M.Jr:
Anyway, talk to Bell about it; look up the
telegram, will you? And did Bell tell you
you are to handle Mr. Eccles for him this
morning, you and George Haas?
Morris:
He told me I was to try to.
H.M.Jr:
You have got the assignment?
Morris:
Yes.
H.M.Jr:
That makes it impossible for you to go on
that inspection trip. I am sorry.
Morris:
All right.
H.M.Jr:
I was going to take you along.
Morris:
Thank you. Just in commenting on what was
said, I don't know about this speech, but I
think that all these tax programs are going
to have a good deal of effect on the bond
market from now on and I think that whatever we
do on that, we want to think about it on our
Government bond market and Government financing,
ee
75
- 11 -
because I think they are thinking about that
a great deal, tying them in together.
H.M.Jr:
O.K.
Morris:
That is all.
H.M.Jr:
You and George Haas are going to take care
of Eccles?
Morris:
Do what we can.
H.M.Jr:
George, I had just nicely got to sleep when
I got on the train --
Haas:
I hated to send that one.
H.M.Jr:
And they woke me up with a telegram, but
thank you for your efficiency.
Haas:
I thought it would get there before you -- I
mean, early.
H.M.Jr:
I understand those figures come in around
noon, don't they?
Haas:
Well, I had that right after I came back
from lunch.
H.M.Jr:
Well, as soon as they come in today will
you shoot them up, please?
Haas:
Yes, sir.
H.M.Jr:
Ferdie?
Kuhn:
I have nothing.
76
- 12 -
Haas:
I have a few things I think you can
dispose of very quickly if you want to do
it now.
H.M.Jr:
All right. Don't forget Roy Blough when
you are talking about my speech, too. Is
Carl Shoup in town?
Blough:
He is here today.
H.M.Jr:
Today, there you are. Before these fellows
get immersed in details, Ferdie, tackle
them, will you?
Paul:
We are already immersed.
H.M.Jr:
Immersed or --
Paul:
Submersed.
Klotz:
Submersed.
Haas:
This letter from Knox --
H.M.Jr:
Well, I will --
77
- 13 -
Haas:
Here is the beginning of that job you asked
us to do, expenses, you know.
H.M.Jr:
I will get at that a little later today.
You hang on to it.
Haas:
Here is something that might interest you.
These things are forty-seven percent. Here
is the one on those other issues. This is
the old series from forty to fifty percent.
The average of those years is thirty-three.
And this thing, do you want us to continue
that?
H.M.Jr:
You are doing it every two weeks aren't you?
Haas:
Yes.
H.M.Jr:
Yes, please.
Haas:
And the hearings up on the Hill, the appro-
priations, Keefe is going to ask you about
this legislation for Federal Reserve to further
increase requirements. He asked me.
H.M.Jr:
Well, Norman, see that they have an answer
for me, will you? I will see you, George.
Haas:
O.K.
H.M.Jr:
Chick?
Schwarz:
Dan would like to tell the press conference
that the next three issues of Treasury bills
will mature during income tax week in March
in order to level off the money market. If
you would like, I can give you a memo.
H.M.Jr:
I will let him do that tonight. Let him
tell them. Let him tell that to the boys
tonight.
Regraded Unclassified
78
- 14 -
Schwarz:
O.K.
H.M.Jr:
Anything else.
Schwarz:
That is all.
H.M.Jr:
Harry?
White:
U. S. S. R. is sending another seven million
dollars worth of gold yesterday, so it brings
down, I think, their sum due to something
in the neighborhood of seventeen million
dollars.
H.M.Jr:
After we get the seven, how much will it be?
White:
After we get the seven, I think it will be
seventeen. I don't know.
H.M.Jr:
We won't say anything until it is in the bank.
White:
Oh, you don't say anything until it arrives?
H.M.Jr:
No.
White:
I see.
H.M.Jr:
I don't say anything until it is in the bank.
It might get torpedoed.
White:
They deposit it at the San Francisco mint.
H.M.Jr:
It is already?
White:
That is what the notice says. I will check
on it if you want to use it in the press
conference.
H.M.Jr:
I won't use it. Give it to me for Monday.
White:
You might be mildly interested in the fact
that the Cuban peso is stronger than it has
ever been. I will give you an opportunity
Regraded Unclassified
79
- 15 -
to check that with our visit down there.
H.M.Jr:
What other country has a weak currency?
White:
I haven't been to the other countries. It
won't mean anything. (Laughter)
Canada is, incidentally, getting weaker, but
I haven't been there.
Sullivan:
Next spring, Harry.
White:
Here is some interesting information I think
you would be interested in and the fact that
we get it is & little disturbing. If we get
it, I think a lot of people get it.
There is increasing talk for the use of
silver, about the necessity of using silver,
now that other metals are getting scarce.
OPM is getting interested in it. I would
merely like you to know that there are two
things that are going forward. One is the
substitution of silver for nickel in the
five-cent pieces, and we have had a number
of meetings, and we will be already to pre-
sent a definite program on it this week.
Secondly, we are investigating the possi-
bility of substituting silver for copper in
many uses because of the fact that they are
not granting priorities in copper. We are
working with OPM on it. If there seems to
be any kind of a feasible program, we would
want to consider the possibilities of lend-
ing silver or something of that character
but we are following it in case it comes to
your ears.
H.M.Jr:
I don't want to - let's get the legislation
changed so we can sell it.
White:
That would be one of the alternatives, but
80
- 16 -
there are many disadvantages to doing that,
and it probably would be very difficult to
get legislation to sell silver at a much
lower price than what you paid for it, but
we will go into all the angles.
H.M.Jr:
I wouldn't lend it to them unless I first
tried to get the authority to sell it.
White:
You would prefer to sell it?
H.M.Jr:
I would like to get all the silver legislation
struck off the books, all of it.
White:
Well, the best time would be now.
H.M.Jr:
That is right.
White:
All right, we will have some meetings and
prepare something if you are willing to go
that far.
H.M.Jr:
I would like all silver legislation struck
off the books so we can sell or do anything
and stop buying.
White:
The best time is now.
H.M.Jr:
Right.
White:
All right, we will have something. There
have been some discussions going on between
Canada and the United States with respect to
the liberalization of traveling and tourists
as between the two countries. It has some
political ramifications and it does affect
their balance of payments. They have asked
our opinion. We have studied it, and we
don't think it would affect their balance
of payments sufficiently to justify their
not going forward.
H.M.Jr:
You mean people travel here or ours in Canada?
81
- 17 -
White:
It is both. Mostly theirs traveling here,
but it is both. On the border there are a
great many cases. I don't know whether the
war has altered our attitude politically on
it. That remains to be seen. The question
I would like to raise with you is that in
the event it does adversely affect them by
some ten or fifteen or twenty million dollars
& year, can we tell them that the Treasury
stands ready to cooperate and see if we can
help their exchange problem in any way that
is appropriate?
H.M.Jr:
Oh, I would be in favor of letting the people
go back and forth.
White:
The Canadians claim that they would like to,
too, but it might cost them as much as twenty
or thirty million a year.
H.M.Jr:
Wait a minute, boy. You said ten or fifteen.
White:
I said that is what the Canadians think. We
think it will be less, but in the event that
they are right--
H.M.Jr:
Why not let them say, "We will try it up to
ten million dollars worth."
White:
Try it for a time.
H.M.Jr:
A million dollars a month. They should ration
it for 8. million dollars 8. month.
White:
Well, the advantage is to liberalize it, and
if they have to ration it, it won't help
very much, but what we can do, following that
suggestion, is, let's try a few months of
liberalization and see what happens. It can't
be very - - but if it is much, can we tell
them that the Treasury will do their best
to see that they--
Regraded Unclassified
82
- 18 -
H.M.Jr:
Well, tell them if it goes above & million
dollars a month, I would be--
White:
Reluctant?
H.M.Jr:
... concerned.
White:
All right. That is all.
Gaston:
One of the things that would help them most
would be the abrogation of that forty-eight
hour rule on the hundred dollar exemption.
White:
I will go into that with you.
H.M.Jr:
Is that all, Harry?
White:
One other item of mild curiosity. We got
word from the English Secret Service that
the Duke of Windsor has violated our exchange
provisions. I am going to take it up with
Ed. Before, I gather, Ed will do anything
on the committee, it will come to you.
H.M.Jr:
Is that as a result of my inquiry?
White:
I don't think so, but it may have - that is,
there is no direct connection except that he
might have knownthat you inquired and they
thought if you are interested, they might
tell you that. I don't know.
H.M.Jr:
You know, I did inquire.
White:
Well, you inquired from another angle, but
this is - doesn't relate to the particular
inquiry which you made. It relates to some
other transaction. They are maintaining a
chateau in France, and they are using - it
isn't as bad as - if the violation proves to
be accurate, then it would not be nearly as
bad a violation as would have been involved
Regraded Unclassified
83
- 19 -
in the transaction such as you inquired
about.
H.M.Jr:
I see. All right.
Thompson:
I wonder if you will have an opportunity to
go over this statement for tomorrow?
H.M.Jr:
No. I have got it here. I will take time.
Thompson:
The moving picture for today is "Back in the
Saddle.'
M.M.Jrz
Good.
Thompson:
These boys who were down south for quite 8.
while haven't seen any movies, 80 anything
is current with them. They are very happy.
H.M.Jr:
Our movie man is coming back today, what is
his name?
Thompson:
I couldn't get any news reels, SO I thought--
H.M.Jr:
Duffus. I told Duffus to see that they get
news reels and cartoons. He said he would
see that they got them.
Thompson:
We couldn't get them, so I thought when he
got back he could get them.
H.M.Jr:
They haven't seen any movies - no movies on
Sundays, to give the operator a day off.
Thompson:
That is right. The boys tell me downstairs
that the Treasury is giving them such a good
show and treating them so nicely that all the
boys in Fort Meyer want to be put on Treasury.
H.V.Jr:
All I can say is, if it is a criterion of the
conditions under which they live, if that is
so good, then the other places they must
live are terrible, because the little that
Regraded Unclassified
84
- 20 -
we have done, the little Mrs. Bell has
done, all of that is little enough.
Thompson:
They have wrecked the Maintenance Department.
They have taken over the whole business.
We have got ninety-two men in here now, two
medical officers and four commissioned of-
ficers.
H.M.Jr:
There is too much paper storing in the hallways,
Norman.
Thompson:
I have to take all of that out of the rooms,
and I haven't found a place to put it yet.
H.M.Jr:
You have got to find a place.
Thompson:
Yes, I realize.
H.M.Jr:
What is in the basement of the Treasury Annex?
Thompson:
Practically everything we have moved out of
this building. It is worse than this.
H.M.Jr:
Clean up those alleyways.
Thompson:
We are working on it.
H.M.Jr:
Clean up the alleyways even if you have to -
what is in the Treasury garage?
Thompson:
I don't know that we could do much down there.
H.M.Jr:
The White House has a garage.
Thompson:
Yes. There is nothing we could do over there,
but we will get this cleaned up.
H.M.Jr:
Well, couldn't you give orders to get that
stuff out of those hallways today? Will you
try?
Regraded Unclassified
85
- 21 -
Thompson:
They have also made a kitchen out of the
bunkers down here for a hundred and fifty
men that are detailed all over town, the
Capitol and various other buildings.
Klotz:
They have just moved in.
H.M.Jr:
They like us.
Thompson:
The Fort Meyer boys still get their meals
from Fort Meyer, but this contingent takes
care of the machine gunners all around.
H.M.Jr:
Haven't they got some place that they could
move that paper and all those odds and ends?
Thompson:
I will find some place for it.
H.M.Jr:
Well, there must - neither of these garages?
Thompson:
No, I don't think we could do that. We will
get rid of all material that we don't have
to use currently, but the material that we
have to use currently we will have to have
somewhere to keep it, but we will go right
to it.
H.M.Jr:
Will you do that, please?
Thompson:
Yes.
H.M.Jr:
Right.
White:
I have a suggestion, Mr. Secretary. I don't
know how many are down there, but if there
are enough down there, there are certainly
enough men in the Treasury who have been
teaching in college who could very easily
give a few courses, an hour a day, if those
men wanted to attend. It wouldn't interfere
much with our time, and they have got nothing
to do but hang around downstairs when they
Regraded Unclassified
86
- 22 -
are off duty, no place to go. I think we
might establish a precedent and make it
very worth while. Let them enroll in the
courses. If you like, I can find out a
little more about it and see what is avail-
able and see what kind of men are there, if
you think it has any possibilities.
H.M.Jr:
What would you teach them?
White:
Anything they want to learn. I think we have
got men who can teach them.
H.M.Jr:
But there is no place to congregate when you
go down there.
White:
Isn't there one room that they have?
H.M.Jr:
No, they just lie on their cots. There is
no place down there.
White:
Of course you could make a little lecture
room out of your moving picture place if
it doesn't interfere with something else.
I don't know. Well, it is an idea.
Thompson:
Right now the officers are giving the men
time off, at least four hours a day.
H.M.Jr:
What they need, they are going out on the
ellipse and playing football, which is what
they want.
White:
The two aren't mutually exclusive. Well,
think about it. They play football part of
the time, and they do nothing the rest of the
time.
H.M.Jr:
When I speak to this lieutenant - what is his
name?
Thompson:
Lieutenant Beebe.
Regraded Unclassified
87
- 23 -
H.M.Jr:
Beebe, I will ask him.
Sullivan:
I meant to tell you, sir, that Monday the
President of Amtorg came in and - on a very
difficult tax problem for the corporation
and presented a letter to you, and I am
having an acknowledgment prepared.
H.M.Jr:
Well, let Harry White see it, my Minister of
Foreign Affairs.
Sullivan:
I called Harry about it.
White:
I will wear tails when you call on me.
Sullivan:
I have already called you. I called you
Monday afternoon, and you didn't have your
tails on then.
White:
You didn't give me enough notice.
H.M.Jr:
Like all Ministers of Foreign Affairs, he
has his hours.
White:
I have one other thing.
H.M.Jr:
You stay and let everybody--
White:
We have men in Hawaii and the Philippines.
Is it your thought that you want them to be
treated just as the other Government employees
or should we try to use whatever influence
we can to get them back here.
H.M.Jr:
Oh, do whatever we can to get them back. If
you treat them like the rest of the Govern-
ment employees, God help them.
Regraded Unclassified
88
December 18, 1941
10:27 a.m.
General
Watson:
This bullet-proof and shatter-proof car.....
HMJr:
Yeah.
W:
they have to buy a car that costs a whole
lot more than seven hundred dollars.
HMJr:
Yeah.
W:
Now, I can get twelve thousand for you, I think,
from the Army, if they'd be reimbursed.
HMJr:
Yes.
W:
Is that all right?
HMJr:
Well, here's the point, Pa. I think that we've
got a lot of expenses, you see?
W:
Yeah.
HMJr:
And I sent over last night - I was in Chicago,
Bell did - asking the President - I don't know
whether it was for three hundred thousand or
five hundred thousand - I forget what it was -
to take care of all of this work that we're
doing around here, see?
W:
Good.
HMJr:
What?
W:
Yeah, and then you can get that car there.
HMJr:
And they might Just as well add that to the car
and - because
W:
Well, good. Then I won't do anything from the
Army side then until you tell me.
HMJr:
Well, I've asked what I've asked for, because
I'm afraid by sending it to the President the
automatic way, he just may lose sight of it;
but all of - hello.
W:
Yes.
Regraded Unclassified
89
- 2 -
HMJr:
But all of this work I'm doing around here,
I've been doing it on the cuff.
W:
Yeah.
HMJr:
And he's got to take care of me and give me
this money out of his own fund. Now, if he
wants me to be reimbursed from Congress, I
can do that later on; but I think the easiest
thing would be to just to add that car to that
list.
W:
Well, will you do that?
HMJr:
I'll do that.
W:
It's twelve thousand dollars. One is a new
car, and the other is to make over into that.
HMJr:
I'll tell him to add that to the list.
W:
Good, then I'll forget it from the Army side,
then.
HMJr:
Until I Bee.....
W:
Right, until you tell me.
HMJr:
Yeah.
W:
All right. Now here's just one other thing.
HMJr:
Yes.
W:
I told the President about that, but he said
that there had been 80 many people who asked
to be included in that, that he'd rather keep
it as it 18.
HMJr:
Well, I told you - you explained to him I
wasn't
W:
I told him that you wanted to know - that's
all you wanted to know.
HMJr:
Yeah. If that's the way he feels, that's all
right.
Regraded Unclassified
90
- 3 -
W:
Yeah. That's what he said. He said he thought
he had waived - turned down so many people that
he'd better cling to just the distribution as 1s.
HMJr:
That's all right. What else?
W:
That's all I've got on my mind.
HMJr:
And - okay.
W:
All right.
HMJr:
Thank you.
W:
Good-bye.
HMJr:
Thank you.
91
December 18, 1941
11:00 a.m.
HMJr:
Hello.
Operator:
Mr. Crowley's extension 18 busy, and Mr.
Welles is calling you.
HMJr:
All right, I'll talk to him. Hello.
Sumner
Welles:
Yes.
HMJr:
Sumner?
W:
Good morning, Henry.
HMJr:
Good morning.
W:
I wanted to let you know that I have this
morning two messages from the Brazilian
Government.
HMJr:
Yes.
W:
The first is that they have already told the
Condor people that they can no longer fly in
Brazil...
HMJr:
Good.
W:
.....and the second that they're informing
Lufti that they must put an end to their flying
in Brazil.
HMJr:
Oh, wonderful.
W:
That means that this ship that will now be
leaving - I think on the twenty-third - from
Brazil for Italy will be the last one; but
you know we've already sent a message to the
Brazilian Government urging them to prevent
the ship from leaving and let us have it.
HMJr:
Even the one on the twenty-third.
W:
Yes.
HMJr:
That's - you mean, that's an airplane.
Regraded Unclassified
92
- 2 -
W:
Yes, yes. So it may be that they will do
that and let us have that airplane; but in
the event that they don't do it and let it
go, I think that'll unquestionably be the
last one.
HMJr:
Oh, well, that's fine; I'm delighted.
W:
All right, Henry.
HMJr:
Thank you Bo much.
W:
Not at all. Good-bye.
1
CONFIDENTIAL
00 - Mr. Foley
93
December 18, 1941
11:03 a.m.
Leo
Crowley:
Hello, Mr. Secretary.
HMJr:
The reason I tried to get through in a hurry
is because I've got to go out with some Army
people.
C:
Yeah.
HMJr:
I just wanted to say this to you, Ed tells me
that the thing doesn't seem to be going 80 well.
C:
Yeah.
HMJr:
And - are you alone?
C:
Yeah.
HMJr:
If, in this trying to straighten this thing out,
I'd like to have you feel that I would be
delighted if you would join the Treasury. See?
Hello.
C:
Yeah.
HMJr:
I'd like to have you have that in the back of
your mind.
C:
Fine. You know.
HMJr:
I mean, I'm just suggesting that in case you
might say, "Well, here I am; I agree with the
Treasury and should be there, but I'm over in
Justice."
C:
That's right. It's very embarrassing for me
right now, because I could work this thing out
with Ed Foley in fifteen minutes.
HMJr:
Yeah.
C:
Now, the only thing I've got to do - Francis
Biddle has got to either let me work this thing
out my own way with you fellows, or I don't
want to get into the thing at all. You know
what I mean.
94
- 2 -
HMJr:
Well, I simply feel this way. The President
hasn't talked to me, but he'd like you to do
it.
C:
Yeah.
HMJr:
I'd like to see you do it. If you can't work it
out, I want you to know in the back of your mind
that if it's agreeable to the President and to
you, I'd like to have you over with us.
C:
Fine. I'll do it any way that you want me to
do it, because I feel this way here now would
destroy an organization that's already built up,
and would only bring about a lot of chaos.
HMJr:
That's right.
C:
And I told Ed that I'm convinced that if we had
no Executive Order at all, that we could work it
out by cooperation without disturbing anyone.
HMJr:
I know you could.
C:
And I'm going to tell the President that myself.
HMJr:
But you might get to a point where it's impossible
and the solution might be to have you come with
us.
C:
Fine. I'll do anything you want me to.
HMJr:
Well.....
C:
And I appreciate it, too; I want you to know
that.
HMJr:
Well, I'm not - I mean, I'm only offering that
as a final out for you; and after all, there are
a lot of organizations in Washington which aren't
clicking.
C:
That's right.
HMJr:
.....but the Foley-Pehle organization 18.
C:
That's right.
Regraded Unclassified
95
- 3 -
HMJr:
And they're doing a beautiful job.
C:
Well, I appreciate that, and I'm sure we can
work it out.
HMJr:
Well.....
C:
And I want you to know that I appreciate that
attitude.
HMJr:
Fine.
C:
Thanks.
HMJr:
Thank you.
96
December 18, 1941
MEMORANDUM FOR THE FILES:
There was A meeting in the Attorney General's office
attended by Messre. Biddle, Crowley, E. E. Foley, Jr., Ben Cohen,
howman Townsend, John Pehle, and Bernard Bernstein, to discuss
the method of administering foreign property control including
the work of the Alien Property Custodian. The Attorney General
stated that there were four points to be agreed on:
1. When a business enterprise was vested in the United
States, it would be handled by the Alien Property Custodian.
2. The administration of foreign funds would remain in
the Treasury.
3. Who would decide when property would be vested in the
Alien Property Custodian.
4. Who would run business enterprises if it were determined
to put people in to supervise them before vesting the property in
the United States.
The Attorney General, Crowley, and Townsend indicated that
the Alien Property Custodian should have the right to determine when
property should be vested in him. The Treasury people pointed out
that this would mean that the Alien Property Custodian would have it
in its power to limit the jurisdiction of the Foreign Funds Control
by determining to vest the property in itself; that the alternative
suggested by the Treasury was that the Interdepartmental Committee,
which had been functioning in the past, should continue to function
with the Alien Property Custodian being the representative of the
Attorney General; and that the committee should decide when the
functioning of the Foreign Funds Control should cease and vesting
in the Alien Property Custodian should take place.
Mr. Cohen felt that either approach to the problem did not
look in the direction of the most efficient administration of the
control over foreign property; that under either proposal the
Regraded Unclassified
97
- 2 -
property would be regulated for a considerable period of time by
the Treasury Department who might have its investigators and other
supervisory forces in a business concern and that then when the
property was vested, the Treasury personnel would be withdrawn and
the Alien Property Custodian personnel would be put in. kr. Cohen
felt that this was not only inefficient but would result in the
injection of considerations foreign to the determination of the
single issue as to the desirability of vesting from the Government's
point of view. Mr. Cohen felt strongly the whole job should be done
by & single organization under the head of a Director of Foreign
Property Control. Mr. Crowley said that if the matter were to be
done over again, he agreed with Mr. Cohen's way of handling but that
in view of the circumstances & compromise ought to be worked out,
Mr. Crowley apparently did not feel that the Alien Property
Custodian had to be in the business enterprises prior to vesting and
he expressly said, referring to the experience of bank examinations
by the national bank examiner and the FDIC, that he would be entirely
satisfied to rely upon the investigative and supervisory staffs of
the Treasury, provided that the Treasury would make available to the
Alien Property Custodian their reports and that the Alien Property
Custodian could make special investigations in the individual cases
that he thought appropriate.
Mr. Foley made it perfectly clear that there would not be
the slightest intention on the part of the Interdepartmental Committee
to deprive the Alien Property Custodian of any of the enterprises that
ought to be vested in him and gave assurances that 80 long 6.8 he were
on the Interdepartmental Committee the Alien Property Custodian would
have more work than he could handle. There was also a. discussion of
the possibility of an exchange of letters between Secretary Morgenthau
and the Attorney General outlining how the foreign property would be
handled and thue make it unnecessary to include it in the Order.
Mr. Cohen thought that whatever policy was agreed on, words could be
found to include it in the Order without having to exchange letters.
It was finally decided to draft two Orders, one containing a
provision whereby the committee would decide when business enterprises
would vest in the Alien Property Custodian and the other providing that
the Alien Property Custodian could overrule the committee and could
vest the business enterprise in himself despite the objections of the
committee.
98
DEC 18 1941
Memorandum for the President
It has been my policy not to trouble you with
the problems that arise in the Foreign Funds Control
but to resolve such problems within the Department
and through the Interdepartmental Policy Committee
with the other governmental agencies concerned. Con-
sequently, you may not be familiar with the administration
and policies of the Control and its effectiveness in
its wide field of operation.
Since I felt that you might like to have at
this time a brief outline as to what is being done in
this important area of economic warfare, I am trans-
mitting herewith a memorandum with respect to the
Foreign Funds Control.
H. Morgenthan, Jr.
EHFJr/JWP/fm
Rewritten 12/16'41
By Secret Service 3:45
Regraded Unclassified
5
99
DEC 18 1941
lear Francis:
I thought you might be
interested in the attached report
which I have submitted to the President
today on the administration of Foreign
Funds Control from its inception in
April, 1940 down to the present time.
Cordially yours,
(Signed) Henry
The Honorable
The Attorney General
Washington, D. C.
EHF:mp 12/18/41
By Measeoger Simmone 3:45
n.m.c.
Regraded Unclassified
100
DEC 18 1941
Dear Deans
I thought you might be
interested in the attached report
which I have submitted to the President
today on the administration of Foreign
Funds Control from its inception in
April, 1940 down to the present time.
Cordially yours,
(Signed) Henry
Honorable Dean G. Acheson
Assistant Secretary of State.
Enclosure.
EHF:mp 12/18/41
By Messenger Veach 3:45 45
n.m.c.
Regraded Unclassified
101
DEC 18 1941
Dear Harry:
I thought you might be
Interested in the attached report
which I have submitted to the President
today on the administration of Foreign
Funds Control from its inception in
April, 1940 down to the present time.
Cordially yours,
(Signed) Henry
The Honorable Harry L. Hopkins
The White House.
Enclosure.
EHF:mp 12/18/41
By Messenger Veach 3:45
n.m.c.
Regraded Unclassified
102
DEC 18 1941
Dear Harold:
I thought you might be
interested in the attached report
which I have submitted to the President
today on the administration of Foreign
Funds Control from its inception in
April, 1940 down to the present time.
Cordially yours,
(Signed) 1. Morgenthan, 12.
Honorable Harold D. Smith
Director, Bureau of the Budget
State Department Building
Washington, D. C.
Enclosure.
By Messenger Veach 3:45
n.m.c.
Regraded Unclassified
103
DEC 18 1940
Dear Wayne:
I thought you might be
interested in the attached report
which I have submitted to the President
today on the administration of Foreign
Funds Control from its inception in
April, 1940 down to the present time.
Cordially yours,
(Signed) H. Morgenthan, in.
Honorable Wayne Coy
Room 230
Department of State Building
Washington, D. C.
Enclosure.
By Messenger Veach 3:45
EHF:mp 12/18/41
n.m.c.
Regraded Unclassified
104
DEC 18 1941
Dear Leo:
I thought you night be
interested in the attached report
which I have submitted to the Fresident
today on the administration of Foreign
Funds. Control from its inception in
April, 1940 down to the present time.
Cordially yours,
m
Honorable Lee T. Crowley
Chairman, Federal Deposit Insurance Corp.
National Press Building
Washington, D. C.
Inclosure.
EHF:mp 12/18/41
By Messenger Simmons 3:45
n.m.c.
Regraded Unclassified
105
December 18, 1941.
Dear Henry'
I thought you might be interested
in the attached report which I have
subjitted to the President today on the
administration of Foreign Funds Control
from its inception in April, 1940 down
to the present time.
Cordially yours,
(Signed) Henry
The Vice President
The United States Senate.
EHF:mp 12/18/41
By Messenger
Simmons 3:45
n.m.c.
Regraded Unclassified
106
MEMORANDUM FOR THE PRESIDENT
THE ADMINISTRATION OF FOREIGN FUNDS CONTROL:
APRIL 1940 TO DECEMBER 1941.
1. Inception and rapid extension of the Control.
The Foreign Funds Control program was initiated in April 1940
by freezing the assets in this country of Denmark and Norway when
Germany invaded these two neutral countries, As other countries
were invaded or dominated by the Axis, the Control was successively
extended during the summer and fall of 1940 to the assets of the
Netherlands, Belgium, France, and the Baltic and Balkan states.
In June 1941, the Control was extended to Germany and Italy and to
the rest of continental Europe. Shortly thereafter Japan and
China were also frozen. At present the Control covers over
$7,000,000,000 of assets and the transactions of 33 countries,
including all of continental Europe (except Turkey), and China
and Japan, and their nationals. The frozen assets in this
country consist not only of bank deposits, gold and securities,
but also B. great number of business enterprises as well as
merchandise, patents and other forms of property. The Control
affects all financial, commercial and trade transactions in which
the 33 countries or their nationals have an interest, whether such
transactions are purely domestic transactions or transactions in
foreign exchange or foreign trade.
Regraded Unclassified
107
- 2 -
2. Purposes and shift in emphasis.
The original purposes of the Foreign Funds Control were primarily
to prevent the assets of the invaded countries from falling into the
hands of the invaders, and to protect American institutions from
possible adverse claims arising out of the invasion. As the Inter-
national crisis deepened there was a distinct shift in the emphasis
of the Control from a role of benevolent protection to one of active
economic warfare.
The inability of the Axis to use the dollar assets of the
countries covered by the Control and to acquire other dollar assets
has greatly impaired the ability of the Axis powers to finance propa-
ganda, sabotage and other subversive activities in the United States
and other areas of strategic importance to this country. The Control
has prevented the Axis countries and their satellites from using the
American dollar, and American banking and financial facilities for
commercial and other activities in the United States and other parts
of the world. Through the Control, we are taking appropriate steps
to nullify or eliminate vicious and undesirable influences in busi-
ness enterprises in this country owned and dominated by the Axis.
The Control safeguards the interests of American creditors of blocked
countries by preventing those concerns which are able to negotiate
special doals with the Axis from recoiving preforential payments at
the expense of other American creditors.
108
- 3 -
The Control has not boon confined to tho regulation of banking
and finencial transactions. It also is an instrument for control-
ling all exports and imports botwoon tho Unitod States and a large
portion of the world. For oxamplo, the Control vas instrumontal
in effocting a comploto stoppage of all trado, import as voll 08
export, with Japan.
3. Oporation of the Control.
The offoctive conduct of modern oconomic verfare requires a
highly floxible organization, and a trained, compotent, and imagina-
tivo staff capablo of rapid adjustmont to constantly changing
problems. During the course of the past twonty months tho Treasury
Dopartment has built up such on organization which is now offoc-
tivoly operating on c. nationwido scalo. Tho Control is contorod in
and dirocted from Washington, yot it has succooded in dologating
to its fiold offices, tho twolvo Fodoral Rosorvo Banks, mcjor seg-
monts of the task. Since oconomic marfaro is ossontially tho of-
foctivo application of financial controls which can be appliod only
through tho banking systom, tho Tronsury solocted tho Fedoral
Rosorvo Banks to act as its fiold offices in administoring tho
Control. Through tho Fodoral Rosorve Banks tho Tronsury is ablo
over night to roach the banks of tho country and to put into offect
nov regulations as repidly changing conditions domand. Thoro has
boon ostablishod at oach of tho Fodoral Resorvo Banks c. compotent
staff familier with tho intricato problems facod by the Control,
109
- 4
experienced in tho handling of complex financial oporations, and in
constant communication with tho financial institutions of its
district, In tho Fodoral Reservo Bank of Now York this stoff
consists of approximatoly 500 persons, whoreas in soveral of tho
other Fodoral Roservo Banks a relatively small group of porsons
has boon ablo to handlo the daily oporations of the Control,
In addition to tho fiold officos maintained in the Fodoral
Reservo Banks, Foreign Funds Control maintains personnol in Hovaii
and in the Philippino Islands, aiding in the administration of tho
froozing control in thoso croas. Foreign Funds Control has clso
roprosontativos in Latin Amorica doaling with Proclaimed List
problems.
Tho Control, in dooling with its mony incroasing problems, has
whon occasion domanded boon ablo to call upon tho personnol and
facilitics of other agencios of tho Treasury Department, including
Customs, National Bank Examinors, Coast Guard, Socrot Service and
Intornal Rovonuo.
4. Organization of tho Control,
Foroign Funds Control is organized along tho following linos:
(a) Interdopartmontal Committec.
Tho basic policios followed in tho operation of tho Control
have boon formulated by an Intordopartmental Committoo,
consisting of E. H. Foloy, Jr., reprosonting the Trocsury Do-
pertmont, as chairmen; Doan Achoson, roprosonting tho State
110
- 5 -
Department; and Francis Shea, representing the Department of
Justice. This committee meets periodically to consider the
basic problems confronting the Control and the more important
applications for licenses.
(b) Administrative section.
Mr. John V. Pohle, Assistant to the Secretary of the
Treasury, is charged with directing the administration in the
Foreign Funds Control. Approximately 650 persons are employed
in the office of the Control in Washington on work of an admin-
istrative character. The administrative staff is divided into
major sections, each of which specializes in handling problems
relating to different types of transactions, such as Securities,
Business Enterprises, Foreign Trade and the Proclaimed List,
Trusts and Estates, Foreign Banks, and Remittances,
(c) Legal section.
Forty lawyers in a special section of the General Counsol's
Office handle the legal aspocts of Foreign Funds work, draft
documents, analyze the legal implications in applications, and
actively participate in the policy determination.
(d) Economic section.
The Division of Monctory Research maintains a special 800-
tion of trained economists, who make studies of the many and
complex economic problems confronting the Control for use in
making policy decisions.
111
- 6 -
(e) Investigative soction.
An investigative staff with several field offices is headed
by Mr. Ervin May, formor Treasury attache in Berlin, This
section employs & large staff of competent investigators fami-
liar with financial problems, who investigate attempted viola-
tions and evasions of the freezing control.
5. Integration with the work of other governmental agencies.
The primary medium through which the basic problems of the
Control have been brought to the attention of the Departments of
State and Justice has been the Interdepartmental Committee. The
State Department hrs been more concerned with and has participated
flore actively in the solution of the problems confronting the
Treasury Department in its administration of the Control, Through
cooperation be twoon the State and Treasury Departments, the Control
has been used in an effective way to implement this Government's
foreign policy, as in the CRBO of Japan.
Other examples of the effective linison established between
the Foreign Funds Control and other government agencies are:
(a) Strategic material problems have been resolved in
consultation with the appropriate defense agencies. The Con-
trol has been able to uncover and direct into defense uses
millions of dollars worth of highly strategic matorials,
machine tools, and other materials.
112
- 7 -
(b) Cases involving the fueling, chartering, or sale of
ships are cleared with Merchant Ship Control, the Moritime
Commission, and the State and Havy Departments.
(c) Proclaimed List problems are handled by a subcom-
mittee consisting of representatives of the Treasury, the
State Department, and the Economic Defense Board.
(d) Securities problems have been worked out with the SEC.
(c) Valuable information obtained through censorship
has been received by the Control for some time from the British
and Dominion Governments. Confidential information is exchanged
with the VBI, the Office of Naval Intelligence, the Army
Intelligence, and other governmental intelligence offices.
6. Major Areas of Operation.
The for-reaching character of the Control can best be seen by
considering some of the major types of transactions which can be
effected only under freczing control licenses. The Control, in
addition to licensing foreign exchange transactions and a wide
variety of other payments and remittances, has exercised control in
such significant areas of economic activity as:
(a) Business Enterprises.
Approximately 2,500 business onterprises in the United
States have been operating under licenses issued by the Control.
These enterprises engage in all forms of business activity,
113
- 8 -
from long-established Axis-owned chemical nonufacturing plants
to the newly established American diamond industry. We have
closod dorn 4 number of Axis firms whose activities have beon
dangerous to the national interosts and whose operation was
not important to the national or local economy. Treasury
representatives have been placed in over 50 business onter-
prises which had strong Axis connections and whose continued
operation vas considered essential.
All firms operating under license have been required to
file with the Control affidevits providing detailed informa-
tion as to organization, officers and directors, capital
structure, relationships with other companies, the nature of
its operations and principal customers. These firms are r.lso
required to file periodic reports which provide significant
information with respect to their operations. As c. result of
the operations of the Control in this field, the Treasury now
has in its files organized information with respect to the
structure, activities, and background of the numerous Axis-
orned or dominated concerns, as well AS concerns controlled
by nationals of other blocked countries.
(b) Foreign banks end insurances companies,
As each new country WAS frozen, many foreign banking
agencies and insurance companies were brought under the Control.
Such enterprises were pormitted to operate under the careful
114
- 9 -
supervision of Treasury representatives pleaed in such insti-
tutions who inspocted all transactions to assure that the
restrictions of the Control were boing strictly observed.
The Treasury has obtained the full cooperation of state bank-
ing and insurance departments in administering this phase of
tho Control.
(c) Securities.
Security accounts of nationals were blocked, and pur-
chases and sales of securities for such accounts could be
effected only under liconse. Debt service and sinking fund
operations of blocked countries have been controlled through
a licensing system, In order to prevent the disposal of
looted securities in this market by the Axis countries, the
Foreign Funds Control early in 1940 prohibited the importa-
tion into the United States of securities from any foreign
country except under license. Imported securities are held
by the Federal Reserve Banks until satisfactory evidence as
to origin and ownership is forthcoming.
(d) Foreign Trade.
The Control is one of the most importent measures adopted
by this Government affecting the United States import and ex-
port trade with foreign countries. Not only is trade with all
blocked countries subject to the Control, but trade with much
of the rest of the world is affected by it. For example, the
115
- 10 -
blacklisting of Axis end Axis-dominated firms in Latin America
by the Proclaimed List is designed to promote hoalthy homispheric
trade and to eliminato the undesirable activities and influence
of these Axis firms in Lotin America.
(e) Proclaimed List,
When the Proclaimed List WCS issued, the Control assumed
a major part of the administrativo work involved. Ropreson-
tativos of tho State and Trensury Departments have recently
visited the Caribbean countries whore Proclaimed List problems,
particularly those rolating to coffee, required immodiate
action. Also, at the present time, a group of Treasury and
Stato Department personnel is touring South America, consult-
ing with and advising diplomatic missions on Proclaimed List
problems.
(f) Consus of Foreign Property.
To further the purposes of the froozing control and to
assure more offective administration, the Treasury has ro-
cently takan e complete end comprehonsivo consus of all
foreign-owned property in the Unitod States, irrespective of
whether tho owner of such property has boon blocked under the
froozing control. This consus nakes r.vailable for the first
timo precise date ns to tho identity of the foreign interests,
and the nature and location of tho property.
116
- 11 -
The wealth of information thus obtained will be of
inestimable value to numerous governmontal departments and
agencios, not only in doaling with problems of the immodiate
present but also in formulating long-range programs for the
future.
7. Tochnique of large-scale operation.
In view of the wide arens of economic activity which are sub-
ject to the Control, it has been necessary rapidly to develop nethods
of operation which would allow transactions not contrary to our
national interost to be effected with n. ninimum of interference.
This has been accomolished largely through the use of general li-
censos. These general licenses permit well-defined types of trans-
actions to be effected without individual licenses, provided thoy
are consumented strictly in the mannor and within the limits stipu-
lated in such licenses. Whon neoded, theso genoral licenses require
reports which are used to polico the activities conducted under the
licenses, to insure compliance with the terms theroof, and as a
basis for restricting or brondening the scopo of the license.
Under the 75 general licenses which have been issued, millions of
transactions have been effected without the necessity of individual
applications boing filed and individual licenses issued. The ro-
viewing staff of the Control has thus been able to concentrate upon
the more difficult typos of transactions for which specific licenses
117
- 12 -
are required, and has been able expeditiously to net upon over
350,000 specific applications. More than 80 percent of these
applications are nov being handled directly by the Federal Reserve
Banks in the field,
8. Special comment on Axis and Axis-controlled business
enterprisos.
In the twenty year period between 1919 and 1939, German interests
have succeeded in organizing within the U nited Stntos another
industrial and commercial network centered in the chemical field,
but oxtending also to the electrical and hoavy goods industries,
forcign commerce, and financing. It is unnecessary to point out
that these business enterprises constitute a base of operations
to carry out Axis plans to control production, to hold markets
in this homisphere, to support fifth-column movements, and to wold
our post-ner economy to Axis plans.
One of the primary reasons for freezing Axis assets WCB to
combat this situction. The problem with which ne are now faced,
is more difficult although somewhat similar to the problem faced
by us in 1917. The background today is vastly different from that
which cristed in 1917.
For almost fifteen yours the Axis business interests have been
taking comprehensive stops to insulate themselves against an alien
property custodianship with its scizure of logal title As a
rosult of their efforts only = negligible portion of Axis-influcnced
proporty in this country would pass into the hands of c. custodian
where powers are limited to the scizure of "eneny" title. The
118
13 .
"title" concept employed in creating the office of Alien Proporty
Custodian in the first World Mar is now outmoded, The title to
some ot the most dangerous of the Axis-influenced onterprises 1a
Swiss, Dutch, or Panamanian, Other enterprises are 100 percent
American, so far as title is concerned.
Under the broad definition of the word "national" the froezing
ordor has brought under foreign funds control all those organizations
which are actually Amorican and other noutral "fronts" for Axis
activities. Many of those concorns are related to the Axis powers
only through contractual tios, patont licensing agreements and the
like. In somo casos the tios are informal, based largely on
personal fealty or family relationships. The floxible procedure of
foreign funds control, developed over the past twenty months, makes
it possible to doal effectively with this type of situation.
By intensifying our controls over those business ontorprises,
within the franowork of tho foroign funds control licensing proco-
duro, NO can, in most cases, safeguard our national intorosts more
offectively than could be dono undor the soizuro tochnique.
9. The rocord of tho Control. Tho Department has more than
$7,000,000,000 of frozon asscta under its surveillance at the
present time. Only by contrast with the $500,000,000 of assots
administered by the Alion Proporty Custodian during the last world
1783° is it possible to gain somo conception of tho magnitudo of tho
task tho Treasury has boon doing during the last twenty months.
119
- 14 -
Mo) e than 350,000 applications have boon handled by the Control
and in addition literally millions of other transactions have boen
offected only on terms proscribed by genoral liconses, In spito of
the highly restrictivo character of the Control and its ruthless
adheronce to the principals of outright oconomic warfaro, not one
docision or rulin: of the Control has boon so much as challengod
in the courts.
All of this has been possible only as a rosult of the confi-
dence shown by tho public in genoral and the banking and business
community in particular in the reasonablencess and intogrity of
the Control. This confidence has recently boon re-affirmod in a
most striking manner when both Housos of the Congress unanimously
approved H.R. 6233 which greatly expands the powers of the Prosident
over this forcign property. Throughout the consideration of the
bill both in the committoes and on the floor of the House and on
the floor of the Sonato there vas not one word of criticism lovoled
at the manner in which the Control has been administered.
Regraded Unclassified
Office of the Attorney General
December 18, 1941
The horable
The Secretary of the Treasury.
Ity dear Mr. Secretary:
The President has asked me to coordinate the requests
for war legislation so that the bills most urgently needed by
the various agencies can be enacted into law in the shortest
possible time.
À working committee of Mr. Edward Kemp of the Bureau of
the Budget, Mr. Oscar Cox of the Office for Emergency Management,
and Mr. N. A. Townsend of the Department of Justice has been set
up to handle these matters. Will you therefore, as soon as
possible, transmit to Mr. Townsend drafts of all legislation
which you consider necessary at this time in the interest of the
fective prosecution of the war.
The Committee will then take steps, in consultation with
agency, to get these requests promptly before the Congress.
Very sincerely yours,
trancistries
Attorney General.
Regraded Unclassified
119-B
C
0
P
int med-
Y
My dear Mr. Attorney General:
I have your letter of December 18 about the
coordination of recuests for war legislation by the
verious agencies.
You will remember when you were over here for
luncheon last Saturday you told me about the wer
legislation committee and I suggested that this
Department be represented on the committee by
Stenhen Sningarn of our Degal division. At that time
you indicated your approval of this suggestion.
I still think we could be of real service to
your committee, and I know that it would be extremely
valuable from our standpoint to be in close touch with
its work. Under the circumstances, I hove you oan add
Soingarn to the committee.
Sincerely yours,
Secretary of the Treasury.
The Honorable,
The Attorney General of the United States.
SJS:EHF: mm 12/20/41
Regraded Unclassified
119-c
C
not
0
P
Y
used_
My dear Mr. Attorney General:
I have your letter of December 18 about
the coordination of requests for war legisla-
tion by the various agencies. I think it's a
first-rate idea, and you can rely on our complete
cooperation with yourself and the committee which
has been set up to handle these matters.
You will remember that when we had luncheon
together Saturday you told me about the war
legislation committee and I suggested that this
Department be represented on the committee by
Stephen Spingarn of our legal division. You
indicated your approval of this suggestion.
I
think it would be mutually most helpful if we
were represented. The Treasury is an over-all
service agency for the entire Government, and
our constant need for legislation will be
Regraded Unclassified
119-D
- 2 -
accentuated by the war. I think we could be of
real service to your committee, and I know that
it would be extremely valuable from our stand-
point to be in close touch with its work. Under
the circumstances, I hope you can add Spingarn
to the committee.
Sincerely yours,
Secretary of the Treasury.
The Honorable,
The Attorney General of the United States.
SJS:mfw
12/18/41
Regraded Unclassified
120
December 18, 1941
12:20 p.m.
HMJr:
Broughton, how are you?
Mr. Broughton: I'm pretty busy.
HMJr:
Yes. Well, now, listen, Broughton, I want to
know where we are short of Defense Savings
Bonds in the twelve Federal Reserve Districts.
B:
Yes, sir.
HMJr:
Now, where is there 8. shortage?
B:
Well, the shortage 18 general. They're asking
for stock. (talks aside) Let me have those
figures.
HMJr:
What? What's that?
B:
The requisitions from the banks - there's a
general shortage everywhere. This is divided
in all the banks.
HMJr:
Well, they say - they tell me - Hall telle me
there's all kinds in stock here.
B:
Mr. Secretary, the shortage 18 in the 25's and
50's, and they're being shipped out proportionately
to the banks and to the Post Office Department,
and the Bureau delivers.
HMJr:
Well, 18 the Post Office delivering them?
B:
Oh, to their postmasters, surely.
HMJr:
Yeah, but how about the banks?
B:
The Fed Banks get them out to the agents just
the minute they get them.
HMJr:
Well, how rapidly are you shipping them out?
B:
How what?
HMJr:
How rapidly are you shipping them out?
Regraded Unclassified
121
- 2 -
B:
(Talks aside) How many are you shipping today?
Two hundred and seventy-three thousand bonds
are being shipped today.
HMJr:
And where are they going?
B:
They're going to the twelve banks and the Post
Office. The Post Office is getting fifty thousand.
HMJr:
I see. Now, does that take care of all the
calls?
B:
Oh, no, no. We've got requisitions in hand.
After we make these shipments today, we'll still
owe several hundred thousand bonds, that 18, that
they've asked for.
HMJr:
Well, I tell you what I want you to do.
B:
Yes, sir.
HMJr:
See that it's given to Mrs. Klotz and marked
urgent. I want to know how many you're shipping
out today.....
B:
Yes, sir.
HMJr:
to what districts
B:
Yes, sir.
HMJr:
.....what the denominations are
B:
Yes, sir.
HMJr:
.....and what the requisitions are you have
left on hand.
B:
Yes, sir.
HMJr:
Now, why don't you fill all the requisitions?
B:
Well, we haven't got the bonds. You Bee, the
Bureau is delivering. They've speeded up.
HMJr:
Did you say that when you ship the two hundred
122
- 3 -
and seventy odd thousand there'll be no bonds
left in Washington?
B:
oh, we'll have some 100's, 500's, and 1,000's.
We won't have any 25's and 50's tonight.
HMJr:
Well, will you say that in your memo?
B:
Surely. I'll give you the whole picture,
Mr. Secretary.
HMJr:
I want to know - - I mean.....
B:
Yes, sir; what's that?
HMJr:
I want to know what stock - after you ship out
this - what you've got left in Washington.
B:
Yes, sir.
HMJr:
What have you got left in Washington.
B:
Yes, sir.
HMJr:
And what are the demands on you.
B:
I will - give you the whole picture.
HMJr:
And what can you expect to get, say, tomorrow,
from Hall off the presses.
B:
Yes. All right. I'll give you the whole picture.
HMJr:
Let me go through it again.
B:
Yes, sir.
HMJr:
You ship out 80 many bonds today.
B:
So many - yes.
HMJr:
Hello.
B:
Yes. Shipped today.
HMJr:
You've got 80 many requisitions unfilled.
B:
Yes.
- 4 -
123
HMJr:
See?
B:
Yes.
HMJr:
And - now how you're going to fill those.
B:
Yes, sir.
HMJr:
In other words, how many can Hall give you
tomorrow, and the next day.
B:
Yes.
HMJr:
And I want that each day from now on.
S:
All right, sir, Mr. Secretary; you shall
have it.
HMJr:
But get it up early - sometime early this after-
noon and put it in Mrs. Klotz' hands and mark
it "urgent" and say to give it to me.
B:
I'll do it, and you'll have - every morning
you'll have a similar study.
HMJr:
Right.
124
December 18, 1941
12:29 p.m.
HMJr:
Hello.
Secy. to
Sen. Walsh: Yes, sir.
HMJr:
This is Mr. Morgenthau speaking.
S:
Yes, Mr. Morgenthau.
HMJr:
I don't know if you know it, but I've been trying
all morning to reach the Senator.
S:
Yes, sir; I have transmitted that message to
him.
HMJr:
Well, 1s he.
8:
He's been in committee meeting, sir, but I
expect to see him in the next very few minutes.
HMJr:
Well, you tell him that I'll come any place
to talk to him after lunch if he'll just give
me five minutes.
S:
All right, sir. I'll get that message to him
and I'll call you back.
HMJr:
Any place between two and three that he'll tell
me he'll be, I'll be.
S:
All right, sir. I'll get that message to him
and I'll call you back.
HMJr:
Because he said he would call me this morning.
S:
Yes, sir.
HMJr:
And - any place between two and three o'clock
that he says he'll be, I'll come to see him.
S:
All right, Mr. Morgenthau.
HMJr:
And I'm very anxious to see him.
S:
Yes, sir.
HMJr:
Thank you.
S:
Good-bye.
125
December 18, 1941
1:03 p.m.
HMJr:
I want an order in the Treasury, all important
papers at night should be locked in safes - none
should be left in the desks.
Norman
Thompson:
That's right.
HMJr:
Get it?
T:
Yeah.
HMJr:
And by direction of the Secretary.
T:
Yeah.
HMJr:
Spread that throughout the Treasury.
T:
All right, sir.
HMJr:
No important - all important papers should be
locked up at night.
T:
That's the rule, but it's just as well to re-
issue it.
HMJr:
Get it out another one.
T:
Yeah, I'll get it right out.
HMJr:
Thank you, Norman.
T:
Okay, sir.
126
December 18, 1941
4:38 p.m.
James
Landis:
Hello.
HMJr:
Hello, Jim.
L:
How are you, Mr. Secretary?
HMJr:
Fine. Jim, I've just been up to see Senator
Walsh.....
L:
Uh huh.
HMJr:
.....and I found him very much softened, but
he asked to have until tomorrow noon, and -
of course, there was nothing else that I could
say but yes.
L:
Yeah.
HMJr:
He said, "Why don't you bring Dean Landis down
without asking for a Senatorial confirmation?"
I said, "I wouldn't do that." Hello - because
I wouldn't ask you to do that, you see?
L:
Yeah.
HMJr:
I think you'd be stultifying yourself. Hello.
L:
Yes.
HMJr:
I mean, as long.....
L:
I think you're right on that.
HMJr:
As long as I've raised - as crazy as I am to have
you, I wouldn't ask you to do that as long as
I've raised the issue.
L:
Well, thank you.
HMJr:
And he 18 to let me know between now and two o'clock
tomorrow.
L:
Uh huh.
127
- 2 -
Now, I haven't even asked you whether you wanted
HMJr:
to come because I thought I'd first be able to
say to you, "I can get you confirmed."
Yeah.
L:
HMJr:
Then I'd ask you.
L:
(Laughs)
HMJr:
So - - I know about Mrs. Roosevelt.
L:
Yeah.
HMJr:
And 80 if you would give the Senator and me until
sometime after Cabinet tomorrow, I'll give you
another ring.
L:
Sure.
HMJr:
But for the first time, I felt I'd impressed him.
L:
Uh huh. He's beginning to think like - think less
politics now, is he?
HMJr:
That's what he said.
L:
Uh huh.
HMJr:
That's what he said.
L:
He's going to have a hard row to hoe up here now.
HMJr:
Pardon?
L:
He's going to have a hard row to hoe up here now.
HMJr:
Yes. You mean politically.
L:
Yeah.
HMJr:
Well, I - - of course, I don't understand the man.
I'm not going to say he's going to say yes or no,
but he certainly let me go out of the room feeling
that I had reason to hope that he would say yes.
L:
Yeah.
Regraded Unclassified
128
- 3 -
But you agree with me, don't you, that to come
HMJr:
down under those circumstances would be & mistake?
Yes, I quite agree with you.
L:
HMJr:
I wouldn't ask it.
L:
Well, I appreciate that.
HMJr:
It's too big a sacrifice to ask a man to come
down and have him feel that the Senate of the
United States at war wouldn't confirm him.
L:
Yeah, I think you're dead right, and I appreciate
your attitude.
HMJr:
Well, Jim, I'll call you up after Cabinet tomorrow.
L:
All right.
HMJr:
Can I reach you through the same number?
L:
Exactly.
HMJr:
Right.
L:
I'm on 24-hour service on this one.
HMJr:
Oh, yes.
L:
(Laughs)
HMJr:
All right, Jim.
L:
Good-bye.
HMJr:
Thank you.
Regraded Unclassified
129
December 18, 1941
4:44 p.m.
HMJr:
The President has agreed to see me tomorrow
morning at his bedside at nine-thirty.
General
Fleming:
Yes, sir.
HMJr:
I wonder if it would be agreeable to you to
send your man over here at nine o'clock -
what's his name?
F:
Reynolds?
HMJr:
Reynolds, and let him explain the thing to
me once more.
F:
All right, sir.
HMJr:
And I'll try to sell it to the President when
I see him at his bedside.
F:
Okay.
HMJr:
Is that all right?
F:
Yes. One of the people over there in his office
telephoned Reynolds and said to do nothing over
there until we heard from him. Of course, we
weren't doing much of anything except maybe
getting ready to take some borings.
HMJr:
Well, I'm going to try to sell it to the President
when I'm with him alone. I think it's one of
those things that I've got to try to do alone.
F:
You'd like to have Reynolds at your office at
nine?
HMJr:
Nine - with the plans.
F:
Yes, sir.
HMJr:
And he'll have fifteen minutes to explain it
to me before I go over to see the President.
I mean, I don't want to bother you.
F:
All right, sir.
Regraded Unclassified
130
- 2 -
HMJr:
But if Reynolds is here and explains it to
me, and then I'll tell him, if I may, that
this is something - - that this building is
something that you recommend for that type
of building.
F:
Yes, sir.
HMJr:
Is that right?
F:
That's right. I'm absolutely in favor of it,
and I.....
HMJr:
I mean, it's whether the President wants it;
that's up to the President. But if he wants
the building, this is the kind of building
that you recommend?
F:
Yes. It's much better to go above ground than
under ground.
HMJr:
Is that all right to say that?
F:
Yes, sir.
HMJr:
Thank you 80 much.
131
December 18, 1941
5:23 p.m.
HMJr:
Hello. Harry?
Harry
Hopkins:
Hello, Henry.
HMJr:
How are you.
H:
Fine.
HMJr:
Harry, I want your help if you believe in what
I'm going to say. You would know, and I've been
told, that Churchill lives in a separate building,
in London.
H:
Yes.
HMJr:
Is that correct?
H:
Yes. He does not live at 10 Downing Street.
HMJr:
But I mean, they built a building for him or
something?
H:
No, he lives in a big, fireproof office building.
HMJr:
Well, did they build it for him?
H:
No, but they have a building. They're building
a new - a great new shelter
HMJr:
A new shelter.
H:
which is Just being built for the whole
Government, which is really a honey - a great,
big, enormous thing where they're going to have
the war rooms and all the maps, where the War
Office will be, where the War Cabinet will have
its place, and which 1s to be the place where
the Government will really go under severe air
raid.
HMJr:
Well, now, I've got the duplicate which General
Fleming has designed with the help of the
engineers, and by stupidity I sent word to the
President through Watson that he had this, you
see? At the first blush, the President said no.
Regraded Unclassified
132
- 2 -
Now, I'm coming over there at nine-thirty
tomorrow morning with the plans of this
building
H:
Yeah.
HMJr:
..... to do just what you're talking about.....
H:
Yeah.
HMJr:
.....
to be built across the way from the State
Department.
H:
Uh huh.
HMJr:
And we can build a tunnel from the White House
to this building. It would be 420 feet long,
and it's five stories, and it's got either ten
or twelve feet on the roof, of concrete.
H:
Yeah.
HMJr:
And they say it's been done - designed - - with
the help of Army Engineers who returned from
England.
H:
Yeah.
HMJr:
Now, it would take six months to build it.
H:
Yeah.
HMJr:
And I think the President should let us go ahead
and build it.
H:
So do I.
HMJr:
See?
H:
Sure.
HMJr:
And.....
H:
You can't have the seat of Government moved under
severe bombing. That's what the British decided,
and I'm damned sure that's what we should decide,
you see?
Regraded Unclassified
133
- 3 -
HMJr:
Well, Harry, if you agree with me, would you
put your - stick your oar in and
H:
You bet I will.
HMJr:
Because all I can say 18, this is what the Army
and General Fleming and his engineers say 18 the
last word.
H:
You bet I will.
HMJr:
And we can have the ground in a week.....
H:
And there are plenty of things the building can
be used for
HMJr:
Oh, yes.
H:
during the day and night anyhow.
HMJr:
And I was under the impression - I didn't know
just what they had, but this would be to take
care of the whole Government.
H:
That's what they've got. They handle - - it's for
the - all the important Cabinet Ministers, the
Secretary of War, and the chief of the Army.....
HMJr:
That's right.
H:
and they have all the wires and telegraphs
running in there from all over.
HMJr:
Well, this would be that sort of thing.
H:
Yeah.
HMJr:
And we have the property just across the street
from the State Department.
H:
Yeah, I know that. That's a fine property.
HMJr:
What?
H:
I think it's & grand idea.
HMJr:
Yeah. Well, then will you help me?
134
- 4 -
Yeah. You bit I will, Henry. You bet I will.
H:
HMJr:
Thank you.
You bet I will.
H:
HMJr:
Hello.
H:
Yeah.
HMJr:
Do you want to laugh?
H:
Yeah.
HMJr:
I was trying to get Watson. Watson said, "Where's
my office?" After telling me - I said, "We're going
to use you as bait and stick you out on the front
lawn."
H:
(Laughs) All right.
HMJr:
Okay?
H:
Yeah. All right. Good-bye, Henry.
135
December 18, 1941
5:56 p.m.
Operator: Go ahead.
Marriner
Eccles:
Hello.
AMJr:
Marriner.
61
Oh, yes, Henry.
HMJr:
They said you wanted to talk to me.
E:
Yes, I did. We didn't get to see Glass.
HMJr:
Oh.
in
Now, you remember on that legislation that we
talked the other day with you?
HMJr:
Yeah.
E:
Now, that Omnibue bill that we were talking
about tying it to, as you know, passed.
HMJr:
Passed, yes.
E:
And it's too late to get on that. Now, in talking
to Cox, who's handling this thing, he saye they're
getting up another Omnibus bill that ought to be
ready in the course of - well, a week or two
HMJr:
Yeah.
E:
and I was wondering if it wouldn't be a good
thing for us to try to clear that with Glass, if
we could, tomorrow.
HMJr:
I can't do it tomorrow.
E:
You can't?
HMJr:
I've got that committee meeting, I'm up there in
the morning.
E:
Oh, you're on the Byrd Committee?
Regraded Unclassified
136
- 2 -
HMJr:
And he wasn't there - when I - I was going to
talk to him, and - but if he's there tomorrow,
I'll talk to him.
E:
Yeah.
HMJr:
I'm there all morning, and Cabinet in the after-
noon.
E:
Yeah, you're pretty well tied.
HMJr:
So I think that.....
E:
Well, I don't imagine this Omnibus bill will go up
for a week or two - I mean, it's something that.....
HMJr:
I want to help, but I just can't do it tomorrow.
E:
Yes. Yes. Well, then either I'll try to see
him or I'll let the thing ride for a little while.
HMJr:
I'll be glad to join you next week.
E:
Yeah. Well, I won't be here.
HMJr:
Well, then, maybe you'd better do it tomorrow.
E:
You think maybe I'd better do it tomorrow. And
I can say to Glass this, then, if I get to see
him - can I say to him that the Treasury is
favorable to this?
HMJr:
Yes, a hundred per cent.
E:
Yeah, well, I'll tell him that. Now, one other
thing - - that Industrial Loan set-up.....
HMJr:
Yeah.
E:
.....did you get a chance to read that?
HMJr:
No, Marriner, I haven't.
E:
Uh huh. Well, Dave's handling that, ien't he?
HMJr:
Yes, he 1s.
E:
Dave Morris.
137
- 3 -
HMJr:
Yes.
E:
So I'll just work with Dave on it.
HMJr:
If you don't mind.
E:
Fine. I read your speech.
HMJr:
Did you?
E:
.....in Chicago. It was - I thought it was
very effective. It was short, and hit some
very good points of it.
HMJr:
Thank you, Marriner.
E:
Did you feel satisfied with the meeting?
HMJr:
Oh, it was a wonderful meeting.
E:
Uh huh.
HMJr:
Young out there did himself handsomely for us.
E:
He did?
HMJr:
Oh, he was swell.
E:
Well, I'm glad to hear that. Did the other fellows
from the banks do all right?
HMJr:
Everybody couldn't be finer.
E:
Uh huh.
HMJr:
Everybody was swell.
E:
Well, I hope that we won't have to - that they'll
get 80 damned much financing from that source we
won't have to do anything about the market for
a little while.
HMJr:
You never know.
E:
I'm sorry we didn't get over there; but after having
a discussion this morning, I felt that it would
just be taking up some of your time unnecessarily
Regraded Unclassified
138
- 4 -
for us to all come in there and chew the
fat.
HMJr:
Well, thank you, Marriner.
E:
Okay.
HMJr:
Good-bye.
E:
Good-bye.
139
December 18, 1941
6:05 p.m.
Clifton
Mack:
He recommended a fellow by the name of Paul Lynn.....
HMJr:
Yeah.
M:
.....who is associated with John Loeb, that is, in
the same company.
HMJr:
Yeah, I read your memorandum.
M:
Well, now, Paul Lynn couldn't come with me; but he
recommended this fellow John Loeb very strongly.
HMJr:
Yeah.
M:
Now, I talked with John Loeb yesterday.
HMJr:
Yeah.
M:
Vandick went into considerable detail, and I was
back in the office only a few minutes, 80 I talked
to him very briefly.
HMJr:
Yeah.
M:
But he looks very good to me.
HMJr:
Well, has he ever done anything other than sell stocks
and bonds?
M:
Well, yes, he did. He had several years with the
American Metal.
HMJr:
Yeah.
M:
And the primary thing is this, that he seems to have
some very good contacts, and this expediting trouble-
shooting job seems to be more a matter of getting
things done, you know and having a general knowledge
of the commodities involved.
HMJr:
Well, let me make just this suggestion, see.
M:
Yes.
HMJr:
Because - you see, he's related to me. I don't know
whether you know that or not.
140
- 2 -
M:
No, I don't. I know that he gave your name in the
application.
HMJr:
Yeah. Take him on for three months.
M:
Yes.
HMJr:
Have you already taken him on?
M:
No, no. No, it's wide open.
-
HMJr:
Oh. Take him on for three months.
M:
Yes.
HMJr:
And tell him at the end of three months if he's made
good, all right.
M:
I see.
HMJr:
See?
M:
Very good. Now he told me that there's a strong
likelihood that he'll get a commission in the Army
and Navy.
HMJr:
Yeah.
M:
He doesn't know, but he's trying to get one.
HMJr:
Well, if he wants to go in the Army or Navy, I
wouldn't fool around with him.
M:
Yes.
HMJr:
Because for the first three months he won't be worth
a damn.
M:
Well, that's possible. He seems to think that it's
hopeless, however, because of difficulties he's had -
he said he's been trying for two or three years to
get a commission.
HMJr:
Well, I would tell him, number one, if he wants to
come down just to sit here until he can get in the
Army or Navy, we don't want him.
M:
Right.
141
- 3 -
HMJr:
See?
M:
All right.
HMJr:
But - he won't be worth a damn the first three
months.
M:
That's it.
HMJr:
Then - but, you no sooner break him in, then he
leaves.
M:
That's right.
HMJr:
On the other hand, I wouldn't tie up my hands -
I wouldn't tie your hands for over three months.
M:
All right, fine.
HMJr:
In other words, you want an option on him a hundred
per cent. If, at the end of three months, he likes
the work and you like him, all right; but certainly
if he's. going to spend all of the time looking for
8. commission, I wouldn't fool with him.
M:
Yes. Well, I think that - as he put it, he said,
"For two years, I've been trying to get into the
Army or Navy."
HMJr:
I know, but he better make up his mind whether he
wante a civilian job in civilian clothes or whether
he wants a civilian job in Army clothes.
M:
Well, very good. Very good, and.
HMJr:
Do you think my advice 18 good?
M:
I think it's very good.
HMJr:
See?
M:
And I think this thought of getting in the Army
and Navy is sort of wishful thinking on his part.
HMJr:
Well, I'd have it out with him, and simply say,
"Look, Mr. Loeb, if you want to come down and try
it for three months, we'll take you on and try you.
Regraded Unclassified
142
- 4 -
But we want you now, on your word of honor, that
you want to come and etay with us if you make good,
for the duration; and we don't want you here and
then use us as a springboard to get into the Army
or Navy."
M:
Well, I think that's very good.
HMJr:
What?
M:
I think that's very good, yes, sir.
HMJr:
Because he won't be worth a damn for the first three
months.
M:
Well, that's true. That's true.
HMJr:
And you take the time to break him in, and then he
says, "Look what I've done in Procurement," uses that
as a reference, and then gets a job over in Ordnance.
M:
Yes. Well, that's very true; and, of course, we
don't want that.
HMJr:
All right.
M:
I told him yesterday; I said, "Well, now, what are
you going to do?" And he said, "Well, I think I can
be of better use to you here." I think it ought to
be definitely straightened out with him.
HMJr:
Well, let him make up his mind.
M:
All right, fine; I'll do that.
HMJr:
Okay.
M:
Yes, sir.
HMJr:
Thank you.
M:
All right.
143
TREASURY DEPARTMENT
PROCUREMENT DIVISION
yrs of THE DIRECTOR
WASHINGTON
December 18, 1941
3202WTARY:
In re: John L. Loeb
Statements are being made of industrial specialists
chemicals, steel and lumber and in each case
astablished by you is bein complied with.
the case of the non-ferrous nan, however, I talked
:8 "OU sur rested. Be recommended Peul Linz but it
in 179.8 not available for appointment. The day be-
Lins telephoned me advising that Carl Loeb's brother
in veshington and recommended nim highly for the po-
irrediter on non-ferrous metals.
r. John Loeb was interviewed and appears to be quali-
position. de is agreeable to appointment at 55,600
Trero any selary from his present firm, Carl V. Loeb,
Company, Investment Brokers, in which he is 8 "eneral
is willing to revise his status with the concern from
service gertner to that of & limited partner in order to
or policy, Re would, however, leave his financial
The business.
18 Tim joes not Leve any defense contracts and lie
there is no likelihood of having any. lie is also &
Come Cable Corporation and the Pennsylvania Cen-
And offered to terminate his directorship with the
oration.
-0 100 approve of this appointment?
Clifton :. Mack
Director of Procurement
Regraded Unclassified
144
TREASURY DEPARTMENT
PROCUREMENT DIVISION
39°CE of THE DIRECTOR
WASHINGTON
December 18, 1941
TO THE SECRETARY:
Supplementing my memorandum to you of
Septymber 19th, relative to procurement studies
initiated July 1st with the recording of all non-
military urchases by Federal amencies, the re-
sults thus far indicate prospective savings of 8F-
proximately $2,500,000. The studies include va-
rious paper and miscellaneous items, household and
office furnishings, passenger automobiles and tele-
phone surveys. The information recorded since July
1st is now being used to make concurrent studies of
heavy equipment, electrical supplies and chemicals.
The savings are due to various reasons,
primarily lower costs through consolidated purchas-
1nc, simplification of specifications to broaden com-
geiltion or reduced expenses through direct handling.
Clifton T. Mack
Director of Procurement
Regraded Unclassified
TREASURY DEPARTMENT
145
INTER OFFICE COMMUNICATION
DATE
DEC 18 1941
Secretary orgenthau
TO
FROM E. B. Foley, Jr.
You have requested my advice on the question whether
the rederal statutes prohibit the purchase by you of
bonds or other public securities of the Territory of
awaii.
It is my opinion that, as & strict legal proposition,
the statutes of the United States do not forbid the
Secretary of the Treasury from purchasing obligations
of the Territory of Hawaii, but probably the spirit and
purpose of section 243 of Rev. Stat. of 1873 (U.S.C.
title 5, sec. 243) are such as to make the purchase by
you of such bonds of doubtful propriety.
At the outset, we may set aside as irrelevant sec-
tion 103 of the Criminal Code, 35 Stat. 1107 (U.S.C.
title 18, sec. 192). That statute forbids the Secretary
of the Treasury, among others, to "carry on any trade or
business in the funds or debts of the United States, or
of any State". I do not understand that you have any
Regraded Unclassified
- 2 -
146
intention of carrying on any business in the obligations
of the Territory of Hawaii. I assume, on the contrary,
that your intention is to purchase the Territorial ob-
ligations merely as an investment.
Section 243 of Rev. Stat. of 1873 provides, so far
as relevant:
"No person appointed to the office of
Secretary of the Treasury * * # shall directly
or indirectly * * # be concerned in the pur-
chase or disposal of any public securities of
any State, or of the United States * # *."
There is no question that if you purchase bonds as an
investment you are "concerned in the purchase" of such
bonds. My predecessor, Herman Oliphant, so advised
Undersecretary Magill in an opinion dated March 11, 1938.
The next inquiry is whether bonds or public securities
of the Territory of Hawaii are "public securities of any
State" within the meaning of that phrase as used in section
243. I have been unable to discover any published opin-
ions or decisions on that question.
The word "state"
!/
The statutory history seems silent on the matter.
See (1929) 36 Op. Atty. Gen. 12, 16. The broad statements
with respect to the purpose of the statute in Ex parte
Curtis, (1882) 106 U.S. 371, 373, and (1847) 4 Op. Atty.
Gen. 555, are not helpful.
147
- 3 -
ES used in other laws of the United States has sometimes
been interpreted to include territories, and sometimes
not to include territories. No good purpose would be
served by collecting the numerous cases. See, however,
Inlbott V. Silver Bow County, (1891) 139 U.S. 438, 444;
Alaske V. Troy, (1922) 258 U.S. 101, 111.
.here the word "State" is used in the Constitution,
it generally does not include EL territory. Alaska V.
Tray, supra. Section 243 of Rev. Stet. of 1873 is de-
rived from section 8 of the Act of September 2, 1789,
1 stat. 07. That is the same statute which established
the Department of the Treasury. It was enacted by the
irst Congress. wineteen members of the First Congress
had been delegates to the Constitutional Convention.
de strong argument can be made that when the First Congress
used the word "State", they intended to refer to the same
entities which are generally covered by the word "State"
when it is used in the Constitution. That proposition
becomes even more probable when it is considered that
the only Territory of the United States which existed
on September 2, 1789, was the "Territory of the United
Regraded Unclassified
148
- 4 -
States Northwest of the River Ohio". There is no
indication that that Territory had any authority to
issue bonds or other publio securities. It is, there-
fore, extremely doubtful that the First Congress intended
the prohibition against the purchase of securities of
States to extend to the purchase of the securities of
territories. Whether the First Congress would have in-
cluded territorial securities within State securities
had the problem been before them does not seem relevant
to an inquiry with respect to what they actually did.
1 recognize, of course, that the enactment of section
243 of Rev. Stat. of 1873 operated to repeal the orig-
inal provision in the 1789 Act. Section 5596 of Rev.
Stat. of 1873. It is settled, however, that in inter-
preting the Revised Statutes, recourse may be had to
the original statutes when there exists an ambiguity.
United States V. Bowen, (1879) 100 U.S. 508, 513.
On the other hand, there are broad general state-
ments in the cases such as the following:
*
#
while the word State is often
used in contradistinction to Territory, yet
in its general public sense, and as sometimes
149
- 5 -
used in the statutes and the proceedings
al the government, it has the larger mean-
ing of any separate political community,
including therein the District of Columbia
and the Territories, as well as those po-
litical communities known ES States of the
nion.. 0" (Talbott V. Silver Bow County,
(1891) 139 U.S. 438, 444.)
de # We think, ES & practical matter,
a territory must be considered in the same
category 88 a state, * »". (Inter-Island
team cv. Co. V. Territory of hawaii,
(C.O.A. 9th, 1938) 96 F. (2d) 412, 418-417.)
ovever, section 243 is highly penal. It should, there-
Tore, "be taken strictly, and not extended by construc-
tion". (1873) 14 JD. Atty. Gen. 352; see also r. Oliphant's
opinion to undersecretary agill, dated arch 11, 1938.
equise of the requirement of strict construction, as
well GS for the reasons set forth above, I do not be-
lieve that such broad statements necessitate B. construc-
tion of the ords "public securities of any State" in
section 243 which would prohibit you from purchasing bonds
or other public securities of the Territory of Hawaii
28 being the nurchase of the securities of e "State".
A second question arises, however. Would the pur-
chase of securities of the Territory of hawaii be e
Regraded Unclassified
150
- 6 -
purchase of the public securities of the United States?
Technically, it is doubtful that the securities issued
by the Territory of Hawaii are public securities of the
United States. Formerly, the securities of that Terri-
tory could be issued only with the approval of the
President of the United States (U.S.C. title 48, sec.
562). Subsequently, however, various securities could
be issued without such approval (U.S.C., Sup. V, title
48, sec. 562a et seq.). The securities of the Territory
of Hawaii are issued "on behalf of the Territory". The
securities are not legally guaranteed by the United
2/
States, whatever may be the moral obligation of the
United States with respect thereto. Under those cir-
cumstances it would seem that technically public securi-
ties of the Territory of Hawaii are not public securities
of the United States. See, in that connection, (1878)
16 Op. Atty. Gen. 173, 176-177 (concerning certain District
of Columbia bonds); Opinion of Acting General Counsel
2/
The public debt of the Republic of Hawaii was, of
course, assumed by the United States. (U.S.C. title 48,
sec. 499)
151
- 7 -
Harlan, dated October 9, 1935, addressed to the Chief
of the Division of Bookkeeping and Warrants. Added to
those considerations are the propositions that, as
shown above, section 243 must be strictly construed and
that the First Congress probably did not have territo-
rial securities in mind.
On the other hand, in (1903) 25 Op. Atty. Gen. 98,
the Attorney General ruled on a situation involving cer-
tain Philippine Island bonds. It was pointed out that
the bonds were issued under provisions of an Act of
Congress and that, while the bonds were not legally
guaranteed by the United States, there was a moral ob-
ligation of the United States in connection therewith.
The precise question involved was whether the
Treasurer of the United States, in the absence of ex-
press statutory authority, could receive the principal
and interest of the bonds from the Philippine Government
and distribute such principal and interest to the hold-
ers of securities. Section 243, of course, places the
same restrictions upon the Treasurer of the United
States that it places upon you. The Attorney General
Regraded Unclassified
152
- 8 -
said (at page 99):
"Section 243, Revised Statutes, forbids
the Secretary of the Treasury, the Treasurer,
and the Register, among other officers, to
be concerned or interested directly or indi-
rectly in the purchase or disposal of public
securities of the United States or of any
State. The obvious purpose of that law, as
shown throughout the section, is to prohibit
personal interest in such bond issues and
certain other affairs and business, and pri-
vate emolument or gain in the transaction of
any business in the Treasury Department.
Necessarily no such interest or emolument
is contemplated in the present case; but
while the spirit and purpose of that stat-
ute would control the exercise of the funo-
tions now invoked, it does not prohibit them. # #"
I gather from the last sentence in that quotation that
the Attorney General believed that the spirit and pur-
pose of section 243 should guide the Treasurer of the
United States in connection with the proposed procedure.
That would seem to indicate that the Attorney General
was of the view that the spirit and purpose of the stat-
ute was applicable to the Philippine bonds.
I recognize that the opinion in (1903) 25 Op. Atty.
Gen. 98 is by no means a square holding on the instant
problem, but it is submitted that the position taken
therein with respect to the application of the spirit
Regraded Unclassified
153
- 9 -
and purpose of section 243 is such as to make the
purchase by you of bonds of the Territory of Hawaii
of doubtful propriety.
I am further inclined to that conclusion by the
fact that the Supreme Court has held that the obliga-
tions of a municipal corporation of a territory are
not subject to tax by a State of the Union because such
territorial municipal corporations are instrumentali-
ties and agencies of the Federal Government. Farmers
and Mechanics Savings Bank of Minneapolis V. Minnesota,
(1914) 232 U.S. 516. If municipal corporations of 8.
territory are agencies and instrumentalities of the
Federal Government, the territories themselves are cer-
tainly agencies and instrumentalities of the United
States. In fact, in the course of its opinion in the
Farmers Bank case, the Court adopted the view that ter-
ritories are merely political subdivisions of the outly-
ing dominions of the United States and that territories
have much the same relation to the United States that a
county has to a state. It would seem to follow that
bonds of a territory are bonds of an agency or instrumentality
154
- 10 -
of the United States. Although, as a strictly legal
proposition, they may not be securities of the United
States within the meaning of section 243, I should hesi-
tate to advise you that the spirit and purpose of sec-
tion 243 does not prohibit the purchase of obligations
of an agency or instrumentality of the United States
which bears as close B. relation to the Federal Govern-
ment 8.8 E territory noes.
9.w.7h
Regraded Unclassified
155
Treasury Department
Division of Monetary Research
Date December 18,
1941
To:
Secretary Morgenthau
From: Mr. White
You may be interested in the allocation
of ports for shipments of Lend-Lease goods to
the U.S.S.R. As currently contemplated, the
following ports will be used:
Boston (to Archangel) tanks, crated planes,
sluminum, duraluminum,
chemicals, barbed wire
and miscellaneous products.
New York (to Baerah): trucks, bombers, leather,
shoes, and clothing.
West Coast Ports:
machinery, and all metals
except aluminum. (These
shipments will be routed
to Boston and New York
until the Pacific area
has cleared.)
Gulf Coast Ports (to Archangel): petroleum
products.
1
Regraded Unclassified
TREASURY DEPARTMENT
156
INTER OFFICE COMMUNICATION
DATE December 18, 1941
Secretary Morgenthau
TO
FROM Mr. Foley
A meeting of the Committee of Alternates of the Foreign-
Trade Zones Board was held today in the Department of Commerce
building. The Secretary of Commerce was represented by South
[rimble, Jr., the Secretary of War by Lieutenant Colonel Robert E.
Coughlin, and Robert Chambers attended as your alternate.
The meeting considered a request of the City of New
York for permission to postpone for one year the erection of a
large utility building in the foreign-trade zone at Staten Island,
New York. Colonel Coughlin pointed out that, due to the loca-
tion and facilities of the zone, there is a strong possibility
that the army or navy might take over all or part of it for
war purposes at some indeterminate date during the war. He
indicated that the large open space back of the piers in the zone
would probably be of greater use for war purposes without the
utility building on it.
In view of the present war-time conditions, the com-
mittee agreed that the request of the City of New York for delay
in erecting the building should be granted.
9.147h
Regraded Unclassified
157
CONGRESS OF THE UNITED STATES
JOINT COMMITTEE ON REDUCTION OF
NONESSENTIAL FEDERAL EXPENDITURES
There will be a meeting of the Joint Committee in
Room House Ways and Means Com. on Thursday, Dec. 18,
in the Capitol.
at 10:00 a.m.
To
DWBELL
HARRY FLOOD BYRD,
attended
Chairman.
GPO 60008
Regraded Unclassified
158
TREASURY DEPARTMENT
OFFICE OF THE UNDER SECRETARY
To The Secretary
attached is a
memo on Today's
meeting of the Byrd
Committee.
There - also
attached a deaft
of profosed refort.
, his will be consedered
by the Committee at
its meeting tomorrow DWB
Under Secretary.
1718 19
4.1 GOVERNMENT PRINTING omm 15400
Regraded Unclassified
159
TREASURY DEPARTMENT
WASHINGTON
December 18, 1941.
MEMORANTUM ON MEETING OF THE JOINT
COMMITTEE ON REDUCTION 08 NON-DEFENSE EXPENDITURES
A meeting was called at 10:00 A.M., Thursday, December 18, in
the House Ways and Means Committee Room in the Capitol. There were
present
Senatore:
Treasury]
Byrd
Under Secretary Bell
McKellar
Mr. Heffelfinger
Nye
Budget Bureau:
LaFollette
Mr. Lawton
Corpresement
General Accounting Office:
Doughton
Mr. Tyler
Oullen
Mr. Barger
Treadway
Department of Agriculture!
Woodrum
Secretary Wickard
Mr. Jump
Mr. Bledsoe
Congressman Cannon arrived at the meeting after it vas wall
under way and stayed for about 45 mimtes, after which he left to
attend a meeting of the Appropriation Committee.
Senator Byrd opened the meeting and explained that Secretary
Vichard VES present in order to comment upon the motion made by Senator
Eye on Tuesday to ask the Secretary of Agriculture to submit a report as
to what he can do if $300 - $400 - $500 - $600 millions are cut from his
appropriations for the next fincal year.
Secretary Wickard explained that he had not had much time to
consider the question since he was advised of it only two days ago and
had been very busy yesterday testifying before other committees of the
Congress. Ee said, however, that if any substantial cute in these
emounts were made from the appropriations for Agriculture, he would
have to begin by cutting down on parity payments which now amount to
$212,000,000 and other payments going to the farmers, such G.S the
noil conservation payments amounting to about $500,000,000 and cut
other items under the Agricultural program commensurate with the
amount of reduction involved. He then stated that he desired to
Regraded Unclassified
160
N . #
explain what would be the effect of outs in parity payments and pointed
out that it 1s his duty to carry out the policy already decided by
Congress to give farmers parity prices. Secretary Vickard explained
that parity prices VES only one part of the Perm program and the
various parts of the program were interrelated. He explained that the
program for loans upon farm products vas supplemented by parity payments
and by payments made to farmers for soil conservation prices and that
without the loan program much greater amounts would be needed under
parity paymente to support farm prices.
Senator McKellar saked that if parity payments were reduced
would prices which farmers receive for their products be reduced.
Secretary Wickard replied that the farmer gets returns from two sources
for his products. First, from the sale of the products in the market,
and second, from payments made by the Government, and that each of these
factors are interdependent upon the other. He said there could be no
support of farm prices without the loan program and no loan program
without some form of benefit payment. He illustrated his statements
with a reference to the action recently taken with respect to giving
parity prices to farmers on whost. He said the farmers could sell
their wheat at the present market and that this price plus the amount
of the present payments to farmers would give them a parity return.
He said the price of wheat on the market would not be at its present
figure without the present loan program which has taken over 500,000,000
bushels of wheat off the market.
Senator McKellar stated he thought there was general agreement
in the Committee that there could be no change in the parity or soil
conservation programs, but that there were other items in the Department
of Agriculture which undoubtedly could be cut. He referred to the large
mimber of agents maintained in the various counties under the Agricul-
tural Adjustment program in addition to the regular county agents.
Secretary Wickard stated he desired to make & further comment
with respect to corne He said we had the greatest supply of feed on
record, some 3,200,000,000 bushels of corn including the present crop.
He said the Commodity Credit Corporation owned about 170,000,000 bushele
of wheat and had 350,000,000 bushels under loan. He also said that the
Commodity Credit Corporation either owned or had loans on close to
4 to 5 hundred million bushels of corn. He pointed out that the price
of corn controls prices of milk, eggs and hogs and that the Department's
present policy vas to sell stocks of corn and other commodities owned
in order to stabilize prices and keep them from getting out of control.
He said this vas considered very important because of the effect of
prices of these commodities on the general level of cost of living.
Senator Byrd asked how the Department could justify its policy
Regraded Unclassified
161
- 3 -
of selling commodities to prevent the prices of these products reaching
parity and Congressman Doughton stated that it seemed as if the De-
partment's policy had both held up prices and held down prices and he
could not see how the Secretary's statement could be reconciled to the
great increase which has occurred in the cost of living.
Secretary Wickard explained that there had been an increase
in the cost of living since 1939, but that the farmer had been faced
with the loss of his export market no that there vas no source for the
sale of his products. He said the Department of Agriculture had
started a year ago to encourage an expanded production program in
hogs, milk and "66" for war purposes and under its program had more or
less undertaken to assure the farmers that their feed costs would not
be subject to great increases. He said the increase in the cost of
feed is reflected in the increase of milk, egga and hoge, things
which enter into the regular household requirements and that by
keeping feed prices down, this had a tendency to level off the
increase in the cost of living.
Senator Byrd asked whether Agriculture encouraged or favored
prices at less than parity and Secretary Wickard replied "Tes, so AB
to control the increase in the cost of living."
Congressman Woodrum observed that any action taken with
respect to parity or soil conservation payments would require &
change in basic legislation.
Secretary Wickard pointed out that cotton is up to 94 to
97 per cent of parity, tobacco is above parity, and that the price
of corn vas important because it stabilized feed prices which, in
turn, exerted an effect on the price of milk, eggs and pork.
Regraded Unclassified
162
Congressman Treadway suggested that the Committee lay
aside for the moment consideration of the parity and soil conserve-
tion payments and consider other items under Agriculture that might
08 subject to reduction. Secretary Wickard said that he could only
give a general statement because the Department of Agriculture was
then in the midst of discussing with the Bureau of the Budget the
amount of sppropriations to be allowed for the next fiscal year end
that he thought any details with respect to these items should be
obtained from the Bureau of the Budget. Congressman Treadway said
the Committee only desired the Secretary's comments with respect to
the merit of such items and suggested that Senetor Byrd read off
some of the items the Committee hAd in mind.
Senator Byrd referred to the Bureau of Animal Industry
which spends about $16,000,000. Secretary Wickerd explained that
with the sugmented production program, this Bureau was now carry-
ing an increased load in its meat inspection work. He also said
he had been alarmed at a suggestion which had been made to reduce
the appropriation for foot and mouth disease control. He said an
outbreak of foot and mouth disease in this country would be very
serious to the meat industry because our cattle had been free from
this disease for BO long they had not been able to build up &
resistence to it such B.G. the cattle in the Argentine had done.
Senator Byrd referred to the Forest Service, which spends
nearly $22,000,000. of which about $3,000,000 1s for the acquisition
of land. Secretary Wickard explained that at present great destruction
is going on in the forests because of the increased cutting for timber
neede. He pointed out that savings here might be penny-wise and pound-
foolish because of the hasard of fire losses.
Senator Byrd referred to the appropriation for forest roads
and trails and Senator McKeller thought that at least one-half of
this should be postponed. It appeared from the general discussion
that the amount appropriated for this purpose did not include any
new construction but was mostly for maintenance work. Mr. Jump
pointed out that receipts from the sale of timber from Federal forests
are increasing very considerably and it is necessary to maintain the
roade in order to get out such timber.
Senstor Byrd asked whether it VAE necessary to continue the
Agricultural Marketing Service and Secretary Wickard said they were
constantly getting appeals from State agencies for additional money
for this work.
Senator Byrd asked whether there was any possibility of
reducing the 100,000 committeemen throughout the country who are
Regraded Unclassified
163
5
being maintained at An annuel cost of $95,000,000 which is deducted
from payments made to farmers. It appears that the $95,000,000
figure did not represent the cost of operating these particular
agente a.e it appears only $44,000,000 of county expenses are deduct-
ible from payments made to farmers and there is 8. limitation of
expenditures from appropriated funds of 1% in Washington and 2%
in the field, amounting in all to about $15,000,000.
Secretary Wickard in reply to B. cuestion explained the
job of these county agents. Re said it was their job to see that
the right kind of production is obtained from the 6,000,000 farmers
in the country. He said there 10 & shortage in farm machinery,
labor and fertilizer and it was important that there be no waste
in these scarce materials by using them in connection with the
production of products which are now in abundance and that they
should be conserved and devoted to the production of things ve need.
There was a general discussion as to why this work could not be done
by the present organization of county agents and Secretary Wickard
pointed out the county agents could not do this work without greatly
expanding their present organization. He thought the county agents
couldn't do the work any cheaper and that since the fermers elected
the present agents they are more apt to cooperate with them. Secre-
tary Wickard pointed out that his Department had changed over from
a peace-time policy to a war-time policy without asking for any
increased money for new activities or for additional work imposed
by the war emergency.
Congressmen Cennon asked Secretary Wickerd which appropri-
stions go directly to support farm prices and the Secretary replied
that in addition to the loan program, parity payments and soil con-
servation payments, the appropriation expended by the Surplus Marketing Ad-
mistration for the purchase of perishable products including the
relief stamp plan also should come in this category. Congreseman
Cannon inquired whether if the Agriculture Department turned loose
its control and kept its hands off the market, neither buying nor
selling commodities, whether prices of farm products would go up.
Secretary Wickard said that if the Government kept its surpluses
off the market prices of some products would undoubtedly rise.
Senator Eye incuired as to the cost of the crop insurance
program. Mr. Jump replied that the cost of administering insurance
on wheat amounted to about $5-1/2 million and that cothen had recently
been added. This will bring the ennual cost up to about $5 million
for administration. He said the system had been in operation for too
short 8. time to enable the Department to forecest any loss that might
be sustained but that they had 8. $20 million capital fund available
to absorb losses. Senator Nye asked whether crop insurance played
Regraded Unclassified
164
- 6 -
say part in stabilizing farm prices. Secretary Wickard replied that
it had some effect in stabilising the income of individual fermers
but that he did not think it could be considered as having any stabi-
lising effect upon prices as a whole. He said the Agricultural Depart-
ment had not been able to work out a basie BO that premiums collected
will take care of indemnities and that private companies would have
gone broke insuring on the basis that the Government has used. Es
also said that studies were now being made with the cooperation of
private experts to devise a premium basis to make the system more
self-supporting.
Congressman Doughton referred to the problem which his Com-
attes, the Ways and Means Committee, is facing in formulating a new
program to increase taxes. He said that the reaction they get from
the citizens to increased tax burdens is very great and that there
ought to be some reduction in Government expenditures.
Secretary Wickard said that everybody thinks of agriculture
as being non-essential and that he thought farmers should be given
the same consideration as other classes of people.
Senator Byrd asked how could the program involving the dis-
posal of surplus products be reconciled when we are spending about
$1,000,000,000 for agricultural products under the Lease-Lend program.
Mr. Jump pointed out that $130,000,000 of the disposal program vas
used for activities under the stamp plan. Senator McKellar asked
why it WE necessary for the Agriculture Department to carry a relief
program involved in the stamp plan when WPA and other agencies were
supposed to take care of this problem. Secretary Wickard said that
these activities are interrelated with the program to maintain prices
of farm products. Senator LaFollette pointed out that expenditures
under the Lease-Lend program are not made for all agricultural products
but only certain basic products and that other products need support
at times.
Senator Bye addressed Secretary Wickard and said he desired
to explain the basis of his motion as B. result of which the Secretary
you
vas appearing before the Committee. Senator Nye stated that his
motion grew out of a. suggestion made by the Secretary of the Treasury
twents
who had indicated that large sums could be out from the agricultural
appropriation. Senator Nye said sums which had been mentioned by
Meked
the Committee in its discussion of the matter had seemed so
fantastic that he was moved to make his motion so that the Secretary
DUB
of Agriculture could have an opportunity to present his views upon
the metter. Secretary Wickard said that he appreciated the opportunity
which the Committee had given him to appear before it.
Congressmen Treadway referred to a problem which one of his
New England constituents had brought to his attention. It appears
Regraded Unclassified
165
- 7 -
that this constituent has B large dairy herd but cannot get sufficient
help to operate his farm. He stated that it appeared that he would
have to dispose of his herd. Secretary Wickard explained that this
was a very serious problem and one that had been giving him a great
deal of concern. He said that the shortage in farm labor was developing
in various sections and that the farmer could not compete with industry.
Senator McKellar referred to B. statement which he had seen
which indicated that Agriculture Vas spending $11,000,000 for publicity.
Mr. Jump explained that the statement referred to by Senator McKellar was
subject to misinterpretation because of the looseness of the term
"publicity". He said that the Committee was being furnished a breakdown
of the figures referred to and that the real figure which might be
treated as expenditures by the Department of Agriculture for publicity
vas only about $2,000,000.
Senstor McKeller asked whether there could be any cuta in
the Rural Electrification Administration program. Secretary Wickard
said he thought this program had to be cut because there was no way
of getting copper wire although he did not like to see it cut.
Congressmen Doughton suggested that B committee of from
three to five be appointed to go over the agricultural appropriations
end report to the Committee where $300 - $400 million could be cut
from these appropriations. There was some general discussion that
no fixed amount should be set but that the Chairman and Congressman
Cannon could get together end determine the largest amount it would
be feasible to cut from the agricultural appropriations and report
back to the Committee tomorrow morning.
Congressman Treadway asked whether the Committee's report
is to be made before the close of the present session. Senator Byrd
replied that he hoped to make a report before the session closes,
and that B tentative report would be available for the Committee's
consideration at the meeting on Friday. Congressman Treadway asked
whether the Joint Committee intended to hold sessions next week and
Senator Byrd replied that no meetings would be held. He said the
tentative report would only deal with reductions in the major items
of expenditures which the Committee has been considering since it
started to function.
The Committee adjourned at 12:15 p.m. and will meet again
Friday morning at 10 a.m.
with
Regraded Unclassified
Draft report
LEGISLATIVE AUTHORITY
166
This committee VAB established pursuant to Title 6 of the Revenue
Act of 1941, approved September 20, 1941, which directed it "to make a full
and complete study and investigation of all expenditures of the Federal
Government, with B. view to recommending the elimination or reduction of
all such expenditures deemed by the committee to be non-essential, and to
report to the President and to the Congress the results of its study, to-
gether with its recommendations, at the enrliest practicable date."
PROCEDURE
Op August 28, 1941, the Committee on Finance of the Senste requested
the Director of the Budget to prepare and submit to it detailed recommends-
tions for reducing non-easential Federal expenditures by the amounts of 1
billion, 1 1/2 billion, and 2 billion annually. This committee received
8. copy of that report and has obtained other date from the Bureau of the
Budget. It has heard also testimony by the Secretary of the Treasury and
various officials of the government regarding the possibility of specific
savings in existing departments and agencies. It has received suggestions
of economies from civic agencies, taxpayers' clubs, and private citizens.
The committee has collected, in addition, evidence from its own sources end
have devoted considerable time to a survey of the problems, and on the basis
of this information has prepared its report.
THE PRESENT REPORT
Directed to report to the President and to the Congress "at the
varliest possible date," the committee considers 1t highly desirable to
present & preliminary report now, The agencies of government and the members
of Congress should have st the earliest practicable time the benefit of the
conclusions thus for reached by the committee, as the budget for the fiscal
year beginning July 1, 1942, will shortly be submitted to the Congress, and
no possible economy should be deferred.
Before the var, economy in non-essential spending vae important. Now
it is vital, Apparently we are faced with B. long war. There is no room for
Regraded Unclassified
167
frills or non-essentials is & government stripped for action. Our united
purpose is to produce sufficient areament and trained personnel to win
this var. Nothing can be permitted to interfere with this objective.
to American people are being naked to pay crushing taxes, to make great
sacrifice, and to endure hardships. The government should set the example.
The Department of the United States Treasury is facing the treasndous
task of financing the war. We must decrease its difficulties; not increase
thes. & dollar saved in non-essentials is worth at least two dollars of
now money, whether in taxes or in borrowing. All non-essential spending
must yield to the needs of our defense program.
Strenuous efforts are being made to prevent serious price inflation.
to continue, without urgent necessity, consumer subsidies created during
depression years will pour fuel on a disastrous inflation fire.
The committee agrees with Secretary Morgenthau that reduction of
non-essential spending will contribute largely to prevention of uncon-
trolled inflation, disastrous to our economic system.
We shall have to draw on our reserve savings and accumulated wealth,
as well as manpover to finance a long war. In addition to equipping
our own srmed forces and establishing at home our own defenses, ve have
undertaken to furnish military supplies of every description to all
nations fighting menaces which threaten us. We must continue this without
stint. It is a colossal obligation.
Our democratic way of life depends upon our system of free business
enterprise. If crushing taxation and indebtedness are allowed to impair
or destroy that system, there is likely to result some form of State
socialism destructive of the fundamental principles upon which were founded
our nation and its institutions.
THE FEDERAL DEBT
Vo start this war with a direct Federal indebtedness appreaching 60
billion dollars, and with a possible indirect indebtedness of 28 billion
dollars in guaranteed obligations of government corporations.
The ultimate cost of the war is today unprodictable, but to date
Regraded Unclassified
168
10 have appropriated and authorized 75 billion dollars for national defense.
This is only the beginning. Every dollar nov added to the public debt,
without imperative need for our defense, diminishes the financial capacity
of America to meet the problems of the post-war period. Naturally,
obstacles to recovery of foreign trade are inherent in debt of great
proportions. Higher the taxes, higher the cost of production.
In this titanic world struggle with totalitarian forces, democracies
mit not only conquer; they must preserve their democratic system. That
means the preservation of solvent government. National solvency -
difficult in this emergency and BO essential to the preservation of the
democratic system - is of no necessary concern to totalitarian governments.
Necessary expenditure of billions for national defense has changed
abruptly the reasons and advisability for agencies, services, functions
and expenditures under study.
Expenditure of defense funds soon vill be so large as to obviate
much of the necessity for spending in relief and other items for which
the committee recommends elimination or reduction.
The year 1942, as judged by the national income, will be the most
prosperous year in America's history. The 1942 estimate of national income
is 105 billions, much the largest in our history. This compares to the
national income of 83 billions in 1929, and is proof in itself that much
of the relief expenditures in so-called depression years can now be
eliminated. Public works and other projects require diversion of vital
manpower and materials from defense to non-defense projects, if such
projects are continued during the present emergency.
The Federal Government alone must pay the cost of national defense.
For years the Federal Government has been carrying a heavy load of state
and local responsibilities. The committee believes in this emergency the
states and localities should reassune responsibilities historically theirs,
thus in the period of crisis relieving the Federal Government of at least
a substantial part of the financial burden. Today 34 states have surpluses.
FUTURE PROGRAM
la general, the field of its investigation will be as follows:
(a) It vill continue to examine all expenditures of the Federal Government,
Regraded Unclassified
169
to determine whether further curtailment or elimination of these expenditures
10 advisable, in the light of defense needs, increasing industrial production
and employment, and other factors.
(b) It will specifically examine further the activities of the so-called
regular departments and agencies of the Federal Government, to determine
whether such departments and agencies are exceeding their legislative
authority, whether functions they perform are essential under existing
conditions, whether duplications and corresponding functions can be
consolidated, and the extent to which retraction can be substituted for
expansion.
(e) It vill scrutinize the government-owned corporations, to determine
whether present loan policies are advisable in view of changed conditions,
whether loans are being made efficiently, with proper regard to security,
repayment, and other terms, and whether salaries and expanses of such
corporations are reasonable.
(d) It vill examine purchasing, classification, salaries, transportation,
publicity and other items of expense and practice in both defense and non-
defense, to determine whether they are being administered in an sconomical
manner.
(c) It vill review all permanent agencies in an effort to determine the of-
ficiency of their administration and the advisability of more effective controls.
RECOMMENDATIONS
1.
The committee recommends that no new adventures or commitments in
public works or costly government programs be undertaken during the period
of the energency, except those imperatively necessary to national defense.
The committee cautions against the futility of retrenching in existing
non-essential spending and subsequently appropriating for programs or projects
that could be deferred until after the emergency.
2.
The committee recommends that the Civilian Conservation Corps, the
National Youth Administration and the national defense activities of the
Office of Mucation be abolished, effective as soon as practicable, and
not later then July 1, 1942, and that there be established facilities for
training persons for work in defense occupations; this activity to be
Regraded Unclassified
170
limited strictly to national defense wrk and confined to those certified by
the Secretary of War and the Secretary of Navy as necessary for that purpose;
also that there be merged in the new program any part of such necessary
defense training nov carried on under the Work Projects Administration
which shall be certified by the Secretary of Vur or the Secretary of Havy
" necessary to national defense; and further that all amounts held in
reserve by direction of the Bureau of the Budget (now 147 million dollars
for these agencies) from amounts previously appropriated to such agencies
be rescinded and be covered into the Treasury.
3.
The committee recommends that there be appropriated to the Work
Projects Administration not more than the sum of $50,000,000 per month
for three months beginning July 1, 1942.
The committee believes that due to the constantly increasing defense
expenditures Work Projects Administration appropriations should be a
quarterly basis after July 1, 1942, and steadily reduced as employment increases.
4.
The committee recommends that every possible retrenchment be made
in the administrative costs of the civil departments. There has not been
sufficient time for the committee to investigate fully administrative costs
of the civil departments. This will be done M promptly as possible.
The Budget Bureau report before this committee estimates that under
a plan to reduce Federal non-defense spending 1 1/2 billion, the propor-
tionate reduction in regular appropriations to civil departments and
agencies would be $150,000,000. This would reduce total appropriations
from $880,000,000 this year to $730,000,000.
The committee recommends elimination of all of any appropriation
to civil departments and agencies which may be used directly or indirectly
for employment of persons who may be engaged directly or indirectly as
publicity agents.
The cost of publicity activities in the civil departments and
agencies is estimated by the Budget Bureau to be
Pending further investigation which might lead to additional retrench-
ment, the committee recommends that the figure set forth in the Budget
Burean's billion and a half reduction category be made the objective.
5.
The committee recommends that during the emergency one half of the
Federal highway authorizations and appropriations be deferred, at a saving
of $64,500,000. Under existing commitments, this deferment, although
snacted now, would not apply until 1943.
The committee believes all appropriations and authorizations for
Regraded Unclassified
171
all public works, including Federal dams, flood control, reclamation
projects and public buildings, not directly essential to national defense
should be deferred until after the emergency.
Such appropriations and authorisations, including highway funds,
These items should be carefully reviewed
total
immediately.
6.
The committee recommends that all funds impounded by the Bureau of
the Budget and held in reserve from previous appropriations be covered
back into the Treasury when such reserves are established.
7.
The government, more and more, is relying upon the more than 30
Federal corporatione for financing both defense and non-defense operations.
None of the funds thus used, amounting to many billions of dollars, are
now subject to the usual budgetary and andit control, nor has Congress
control over disbursement of funds through these corporations, except in
blanket authorizations. Revolving funds derived from collection of loans
made by these corporations return to their credit. They are subject only
to control by the corporations themselves outside of any Congressional
jurisdiction.
The committee recommends legislation to coordinate the activities
of these agencies and to establish an improved control of their operations
by Congress. The obligations of these government corporations constitute
an indirect Federal debt to the extent that they gre guaranteed by the
Federal Government and that they are not not by the institutions themselves.
Regraded Unclassified
>
senator (byrd Report 172
from hn. 5.w.Bell
12/18/41
173
LEGISLATIVE AUTHORITY
Tida Comittee HAW established pursuant to Title 6 of the loverue Act. of
1941. approved `eptember 20, 1941 (See Appendix No. A) which directed it to "maice
I fail and complete study and investigation of all expenditures of the Federal
Dovernment, with a view to recommending the elimination or reduction of all much
aquaditures doesed by the Committee to be non-essential, and to report to the
Frealdent and DO the Congress the results of its study, together with its
recomendations, at the earliest practicable date."
PROCEDURE
The Condittee has had the benefit of the testimony of the Secretary of
Live Treasury, a member of the Comdttee, the Secretary of Agriculture, and
varlous other officials of the Government regarding the possibility of
specific savings in existing departments and agencies. It has also had before
16 for study the report of the Director of the Bureau of the Budget, also a.
seaber of the Committee, submitted in response to the request of August 28,
1961, from the Committee on Finance of the Senate, as well an other data
submitted by the Sudget Bureau directly to this Committee. The Committee has
also received suggestions of economies from civic agencies, taxpayers' clube,
and private citizens. It has collected, in addition, evidence from its own
sources and it has devoted considerable time to a survey of the problems.
file report is made on the basis of all the information thus collected.
INITIAL REPORT
Directed to report to the President and to the Congress "at the earliest
possible Jazs," the Committee considere it highly desirable to present a
preliminary report now. The Committee emphasises that this report is only its
first, and that other departments, agencies, funds, programs, and items will
be exasined by the Committee and treated in subsequent reports. Subjects con-
sidered in this report largely are limited to those established originally as
depression issures.
The Committee believes that in view of the improved economic situation and
the vital nes was conditions the agencies of Government and the subers of Congress
should have at the earliest practicable time the benefit of conclusions thus
Inr reached by the Comittee, and any possible sconomies which can now be
effected should not be deferred.
Regraded Unclassified
- 2 -
174
Beford the war economy in non-essential spending - important. Now it is vital.
7 is no room for non-essentials in a government stripped for action. Our united
purpose is to produce sufficient ament and trained personnel to win this war.
retains can be permitted to interfere with this objective. The American people
are baing asked to pay actremoly burdensoms taxes which will become greater; they
5 being asked to make great secrifice and endure hardships. The government should
pet the example.
The United States ?reasury Department 10 facing the transandous task of financing
the ear. de must decrease its difficulties, not increase them. All non-essential
spending not yiald to the needs of our defense program.
strenwous offorts are being made for prevention of serious price inflation. To
continue consumer subsidies created during depression years without urgent necessity
dill pour fuel on = disastrous inflation fire.
The Comittee believes that a substantial reduction in non-essential spending
could be of material aid in helping to hold down inflationary price increases.
o shall have to draw on all our resources and accumulated wealth, as well
as surpower to fight a lon war. In addition to equipping our own armed forces and
establishing at home our own defense, we have undertaken to furnish military supplier
of very description to all nations fighting the forees of aggression. We must
continue this without stint. But it is a colossal obligation.
Our democratic way of life depends upon our system of free business enterprise.
If crushing taxation and indobtedness are allowed to impair or destroy that system,
them is likely to result some form of State socialism destructive of fundamental
principles upon which were founded our nation and its institutions.
FEDERAL DEBT
started this war with a direct Federal indebtedness of about 55 billion
dollars.
The ultimate cost of the war 10 unpredictable today, but to date - have
appropriated and authorized 75 billion dollars for national defense. This is only
the beginning. Every dollar now added to the public debt without imperative defense
need nales it more difficult for America to neet post-mar period problems.
Regraded Unclassified
175
+
In this titande world struggle with totalitarian forces, democracion mut net
only conquer] they must preserve their democratic system. That mass the preser-
Regraded Unclassified
vation of solvent government. National solvensy-difficult in this emergency end
go essential to the preservation of the dececratio system-La of no necessary con-
our to totalitarian governments.
Secessary expenditure of billions for national defense has changed shruptly the
reasons and advisability for continuing certain agencies, services and functions of
government.
Amounts excended for defense soon will be 80 large as to obviate much of the
necessity for spending in relief and other items for which the Committee recoments
elizination or reduction.
Judged by national income, estimated at more than 100 billion dollars, 1942
will be the most presperous year in American history. This may be compared with
the national income of approximately 60 billion dollars in 1929. (See appendix 1.
That is DOG reason to believe that much of the rolief expenditure continued from
the so-called depression years now can be eliminated. Continuation of public works
and some other types of projects during the NAF emergency require diversion of vital
hanpower and materials from defense to non-defense projects.
The Federal Government alone must pay the cost of national defense, For years
the Federal Government has been carrying I heavy load of state and local responsi-
bilities, The Committee believes that during this emergency the states and localitie
should reasours where necessary responsibilities historically theirs.
THE FUTURE PROGRAM
In general, the Committee will continue its investigation as follows:
1. Examination of all Federal expenditures will be continued to determine whether
further curtailment of elimination of these expenditures 10 advisable, in the light
of defense needs, increasing industrial production and employment, and other factors.
1, It will examine further and in detail the activities of the no-called depart=
sents and agencies of the Federal Deveropment to determine whether all functions
performed by departments and agencies are essential under existing conditions, whether
duplications and corresponding functions can be consolidated, and the extent to which
contraction can be substituted for expansion.
176
1, IN will scrutinise government-ed corporations to determine whether present
- policies are advisable in view of changed conditions, whether loes are being
- efficiently, with proper regard to security, repayment and other terms, and
- salarios and expenses of cush corporations are reasonable.
4. It will oxside purchasing, classification, malaries, publicity
of other flow of expense and practice In both defense and non-defense categories to
determine whether they are being administered in REL economical -
" It will review all permant agencies in an effort to determine the necessity and
the afficiency of their addrdistration and the advisability of nors effective controls.
The Committee's views on these subjects and possibly others will be embodied
in advent reports.
RECOMPENDATIONS
1. avanues
The Consittee recorremends Limt no now adventures OF conditionts in public working
or costly government programs be undertaken during the period of the was manymay,
except Liose imporatively necessary to national defense,
the Consittos osutions against the futility of retrenching In existing non-
assential spending and subsequently appropriating for programs or projects that
could by deferred until after the everymay,
2. CIVILIAN CONSENVATION CORPS, NATESAL YOUTH ADMINISTRATION
OFFICE OF DUCATION, NORKS PROJECTS ADMINISTRATION.
The Counittos recomends that the Civilian Conservation Corps, the National
Touth <dministration and the national defense activities of the Office of Scuostion be
abolished, effective as soon as possible and not later then July 1, 1942, and that
there be outablished in - suitable agency facilities for training persons for wrk
in decemes occupations; this activity to be limited strictly to national defense work
and confined to those fields and to numbers to be certified by the Secretary of w
ad the Secretary of the Havy os necessary for that purpose; also that there be
nerged In this new program any necessary part of defense training now under the works
or
Projects dainistration as shall be certified Lgr the Secretary of the - the Secretary
e the Dary as necessary to national dafense) and further that all partions of
availably appropriated Funds for these agencies now held in reserve by direction
e the Burvey of the Budget (totaling 232 million) be covered into the Treasury,
les Appendix No. C
)
DE PROJUCTS
The Condittee Presente that there be appropriated to the ask Projects
hindstrution not ware than the - of $50,000,000 per month for three amths
Regraded Inclassifie
+
177
registed July 1, 1942. Any week - being carried - by the net Projects 160
sinistration for resourt of national defense are July 1, 1942, should be carried
on - the direction of the lar and Herry Departments and the - here -
medical for the look Projects Administration reduced accordingly.
the Committee believes that with defense expenditures constantly increasing,
wrk Projects duinistration appropriations should be on A quarterly bazie beginning
july 1, 1942, and that ne employment increases the quarterly appropriations should
be reduced necordingly. (See Appendix No. R____.)
4. CIVIL DEPARTMENTS
The Condittee recommends that every possible retrenchment be anda in the ad-
ministrative costs of the Civil Departments and agencies. There has not been
ffielem time for the Conmittee to investigate fully administrative costs of
civil department. This will be done se prosptly as possible,
The Budget Bureau report before this Consistee estimates that under a plan to
reduce Federal non-defense spending 1 1/2 Willion dollars, the allotted reduction in
regular appropriations to civil departments and agencies would be $100,000,000. This
would reduce total appropriations from 2530,000,000 to $730,000,000. (See Appendix
&
.)
The Committee recomends elimination of all of any appropriation to civil de-
partnents and agencies which my be used directly or indirectly for employment of
persons who my be engaged directly or indirectly as publicity agents.
The cost of publicity activities in the civil departmente and agencies is
estimated by the Bureeu of the Budget to be at loast $30,000,000.
5. AGRICU).TURE
The comdttes considered in detail expenditures by the Department of
Apriculture, mont the regular departments, because of the large programs and
far-resching activities established within and transferred to that department
during the depression period. Insod upon its study of asterial furnished by
the Secretary of Agriculture the Bureau of the Budget and its agricultural
examiners, and by department officials who work with the program end
activities, the Consittee recommendes
(a) Elisination of all land purchases by the Department of Agriculture
during the period of the
Regraded Unclassified
178
+
(b) neview of administrative essta of the Department of Agriculture and elini-
makes of all unnecessary overhead, and especially the wages and overhead insident to
- employment of nearly 100,000 MA counditiones.
(e) Reduction of $100,000,000 in the apprepriation for Experiation and Domestic
Communition of Agricultural Commodities program.
(4) That rates and preduce of the Federal Crop Insurance Corporation be más
estemrily aound in a namer to carry Losses and that the corporation be sade self-
supporting.
(+) Abolition of the Fara Tenant program with an administrative annual cook of
17,122,570 and authorisation to borrow $50,000,000.
(f) Abelition of the Farm Security Administration with $70,500,000 in direct
appropriation and authority to barrow $120,000,000; its national defense activities,
so the extent that they are necessary, to be transferred to some asro suitable agenty."
(g) Deferment of Rural Electrification expansion to the extent that 11 conflicts
with national defense priorities on materials.
(See Appendix E. 1-2-3 .)
6. FEDERAL HIGHWAYS AND PUBLIC WORKS.
The Committee recomends that during the emergency one half of the Federal
highway appropriations and authorisations be deferred, at a saving of $64,000,000.
The Committee believes all appropriations and authorisations for all public
works, including Federal dama, flood control, reclasation projects and public build-
ings not directly essential to national defense should be deferred until after the
margency.
Such appropriations and authorizations, including highway funds, total appread-
sately 100 million dollars. These items should be earefully reviewed immediately.
7. UNSERVES IMPOUMUED.
The Committee recominia that all funds impounded w the Duress of the Budget
from previous appropriations and hold in resurve now be covered tack into the Treasury#
The Committee recommeds that legislation be essated which would authorise the
Director of the Burseu of the Badget to net up reserve out of any future appropria-
Yes, at each time and in wash counts M the Director my determine.
(See Appendix
Regraded Unclassified
179
8. CORPORATIONS,
the Government, MOTO and HOTS, 1s relying upon the 30 odd Federal
corporations for financing both defense and non-defense operations.
Practically none of the funds thus used, mounting to may billion dollars,
are now subject to the usual budgetary and audit control, nor has Congress
entrol over disbursement of funds through these corporations, except in
blanket authorizations. Revolving funds derived from collections on loans
made by these corporations return to their credit. They are subject only to
control by the corporations themselves outside of any Congressional juris-
diction.
base corporations alroady have authorization to obligate the credit
of the Government to the oxt.ent. of approximately 28 billion dollars. These
obligations constitute en indirect Federal debt to the extent that they are
guaranteed by the Federal dovernment and that they are not net by the
institutions themselves.
The Comdittee recomends coordination of those corporate activities;
legislation subjecting the corporations at least to practicable budgetary
and audit control; and that Congress assume tangible and direct control over
their revolving funds by mans of its constitutional appropriating eachiner.
(See Appendix H
-)
Regraded Unclassified
- 0 -
180
TATULAL
If the specific recommendations by the Condition - adopted, the 1963 -
petations will be lose than the 1962 appropriations w the following
civillen Corpo abalished
6 366,980,000
reasonal Touth Additionation abolished (non-defunse)
91,767,000
will projecto additiotration (present appropriation
2075, 00,000 for quartety apro-
printion including defense activities to first three mate
of - (loon) your of $50,000,000 monthly and further
reduction 00 Improves due to defense expediture
should - of least for the your
400,000,000
Defor all land purchases
3,000,000
brings in overhand expenses of department as indicated
50,000,000
indestion in appropriation for Deportation and Donantão
Consumption of gricoltural Commodities
100,000,000
Tum tenants programs abolished (cash)
7,122,000
.
-
If (loss authoristion onnoellation)
50,000,000
country abolished (eash)
70,500,000
.
=
(loan authorization emoolintion)
120,000,000
while and Hospital
TO half deformant in poblic roads
64,000,000
the Public ats:
Public buildings to non-defence
43,266
Department of Intertor
26,727
hivers and Barboro end Flood Control
27,035
CAR DAVIDED
3 1,122,075,000
OF 10/21 NOTIVITIES
170,000,000
1,301,075,000
Tobable sevings in reduction of civil department administrative
coste as substitud by Director of Dudget
100.000.000
1,401,075,000
in addition, if funds imported w the Director of the Dadget upo comped
the the Treasury by legislative action there would to imetiate covinge
of
8.
Regraded Unclassified
181
TREASURY DEPARTMENT
WASHINGTON
DEFENSE SAVINGS STAFF
December 18, 1941
The Secretary of the Treasury,
Treasury Department,
Washington, D. C.
Dear Sir:
virst may 1 commend you on behalf of the Treasury Department
for the splendid and speedy way in which you cooperated with our
telegraphod request of last week, The hundreds of telegrams which
reached DU the first week after the declaration of war made it clear-
er than ever before that the women's radio program can do a tremen-
dous job - AND ARE DOING IT.
Enclosed you will find new announcements - W-75 to W-88, for
use an often 39 possible. As soon as additional copy can be print-
ed it will be sent to you at once.
Also enclosed you will find a return postcard, requiring no
postage. These are being substituted for the forms which you have
received weekly heretofore. Your cooperation in sending these cards
in each month will be greatly appreciated, so that the fine work of
women's radio programs may receive full recognition in our reports
to the Secretary.
in your total number of announcements indicated on these cards,
will you be good enough to include ANY mention made of Defense Bonds
and Stamps on your broadcasts. It has come to my attention that
Dany programs have been preparing interview material and special copy
which has not been included on the old forms - for the reason that
they deviated from the printed announcements, de want, however, to
keap a complete record of the number of mentions made in our benalf,
and alncerely hope that the postcard will serve this purpose.
Once again, the sincerest thanks of the Treasury Department for
your generous contributions to this vital campaign during these times
of world orisis.
Sincerely,
ORDEFENSE
BUY
vames
Mayorie thriggs
STATES
Wince
Marjorie L. Springs,
Chief, Women's Programs,
Enclosures.
Radio Section.
Regraded Unclassified
Treasury Department
Defense Savings Staff
WOMEN'S PROGRAM
Announcement
W-75
WAR COPY!
The bombs of our enemies, with one blow, accomplished the task
of strengthening our national spirit and bringing about the unity
of the people with our Government and our President.
The
Treasury Department has a plain and important message to bring
to all the people.
It is this-WE CAN ALL HELP TO WIN
THIS WAR! The one sure way we can help-the one way to
put whatever strength we have into this fight-is to lend our
money to Uncle Sam by buying Defense Bonds and Stamps, buying
as many as we possibly can.
The Government needs your
money.
Every dollar will go at once to build the antiair-
craft guns, the bombers and the battleships that will wipe out the
Axis terror.
Get Defense Bonds and Stamps at your bank,
post office, or savings and loan association today and every pay day
herenfter.
Buy Defense Stamps from your retail dealers
and ask your newspaper carrier boy to deliver some stamps to your
REDUCENCE
house every week.
Make your dollars heap destruction on
BUY
-
the Axis terrorists.
thin
(The Treasury Department urgently requests you to use this
announcement as many times as possible)
Regraded Unclassified
100
183
Treasury Department
Defense Savings Staff
WOMEN'S PROGRAM
Announcement
W-76
WAR COPY!
If you want to see the sun set quickly on the Land of the Rising
Sun, there is one thing all of you can do-buy United States De-
fense Bonds and Stamps-buy as many as you can, as often as you
can.
Go to your post office, bank, or savings and loan asso-
ciation and buy them today and every pay day hereafter.
Get Defense Stamps from your newspaper carrier boy and from
your retail dealer.
Your purchases of Defense Bonds and
Stamps will insure for America a victorious finish to this war.
WIENSE
BUY
United
(The Treasury Department urgently requests you to use this
announcement as many times as possible)
Regraded Unclassified
184
Treasury Department
Defense Savings Staff
WOMEN'S PROGRAM
Announcement
W-77
WAR COPY!
Adolf Hitler has said "two worlds are in conflict and one must
break asunder."
Americans, I ask you
which world
shall break? Ours? Or Hitler's? Pour out your dollars in
reply. Pour them out in a steady never-ending stream that fills
the war chest of our Nation and keeps it flowing over. Put every
dollar you can into Defense Bonds
sold by any bank, post
office, or savings and loan association.
Put every possible
dime into Defense Stamps
sold by retail merchants and even
by newspaper carrier boys. Buy a Bond now and every pay day
hereafter. Make your regular Bond buying answer Adolf
Hitler's boast.
REDENSE
BUY
-
TRADES
SAFENCE
have
I
(The Treasury Department urgently requests you to use this
announcement as many times as possible)
Regraded Unclassified
LOU
185
Treasury Department
Defense Savings Staff
WOMEN'S PROGRAM
Announcement
W-78
WAR COPY!
What is America? It's the house you live in. It's the place
where you work at your job. It's the little plot of ground where
your grandparents lie in everlasting sleep. It's the school where
your children learn to be citizens of the future. This is the
America that Hitler would destroy. It's what you have to defend.
Only a constant flow of dollars can keep America's War Chest
filled. Pledge yourself to put every possible dollar into Defense
Bonds now. Every pay day, buy more and keep buying! Get
Defense Bonds and Stamps at your bank, post office, or savings and
loan association.
Buy Defense Stamps from your newspa-
per carrier boy or your retail dealer.
Buy as many as you
can, as often as you can.
WITH
BUY
-
-
(The Treasury Department urgently requests you to use this
announcement as many times as possible)
Regraded Unclassified
186
Treasury Department
Defense Savings Staff
WOMEN'S PROGRAM
Announcement
W-79
WAR COPY!
Every man, woman, and child is a partner in the most tre-
mendous undertaking of our American history. We must share
together the bad news and the good news
the defeat and the
victory
the changing "fortunes of the War." Among the
items of good news include word that you and every other patriotic
American is buying Defense Bonds as never before. Join the
lines in banks, post offices, and savings and loan associations.
Buy Defense Bonds repeatedly and to the utmost of your ability.
And remember to get Defense Stamps from your news-
paper carrier boy and your retail dealer.
REDEFENSE
BUY
ENTTER
statis
(The Treasury Department urgently requests you to use this
announcement as many times as possible)
Regraded Unclassified
187
187
Treasury Department
Defense Savings Staff
WOMEN'S PROGRAM
Announcement
W-80
WAR COPY!
Enemy planes bombing our air fields in the Pacific roar "Wake
Up, Americans! You have a job to do
a big job!" Well, we
had better wake up for if we'd roll the Grand Coulee and Boulder
Dam and the TVA all into one
it would be just a morning's
work compared to the job ahead of us. That job takes men
and material
and money, and the money must come from
you
money put into United States Defense Bonds
put
in every week, every pay day, repeatedly and steadily. No one
man built Boulder Dam
but many, working together.
Do your part to build the Defense of America
with United
States Defense Bonds.
Buy them from your bank, post
office, or savings and loan association.
Get Defense Stamps
from your retailer and from your newspaper carrier boy. Buy as
many as you can, as often as you can.
LIVING
BUY
I
Patty
(The Treasury Department urgently requests you to use this
announcement as many times as possible)
Regraded Unclassified
188
Treasury Department
Defense Savings Staff
WOMEN'S PROGRAM
Announcement
W-81
WAR COPY!
You heard your Commander-in-Chief declare that "The lives of
our soldiers and sailors
the whole future of this Nation
depends upon the manner that each and every one of us fulfills his
obligation to this country." How about you? How do you fulfill
your obligation to America? Measure your answer in Defense
Bonds and in the Bonds you are determined to buy next pay day
and every pay day. Even now, you can make a start
by
saving dimes. Your newspaper carrier boy or your retail dealer
will sell you 10-cent Defense Stamps but don't stop at Stamps.
Fulfill your obligation to America with dollars.
Dol-
lars put into United States Defense Bonds at any bank, savings
and loan association, or post office.
Get Defense Stamps
from your newspaper carrier boy and your retail dealer.
REFERENCE
BUY
states
I
(The Treasury Department urgently requests you to use this
announcement as many times as possible)
Regraded Unclassified
189
Treasury Department
Defense Savings Staff
WOMEN'S PROGRAM
Announcement
W-82
WAR COPY!
You heard your Commander-in-Chief declare that "This Gov-
ernment puts its trust in the stamina of the American people."
At his praise you felt a lift of pride, didn't you? Well, how's
your stamina, measured in dollars? Have you bought United
States Defense Bonds? Have you bought all of them you possibly
can? Answer that question with action. Go
quickly
to
your bank, post office, or savings and loan association, and deserve
the trust your Government puts in you. Plan to buy Defense
Bonds or Stamps repeatedly and steadily.
Your newspaper
carrier boy and your retail dealer will sell you Defense Stamps.
REDEFINE
BUY
-
INVINCE
/
(The Treasury Department urgently requests you to use this
announcement as many times as possible)
Regraded Unclassified
130
190
Treasury Department
Defense Savings Staff
WOMEN'S PROGRAM
Announcement
W-83
WAR COPY!
Recruiting is up. Men stand in line anxious to volunteer. All
former records are dwarfed.
Over-shadowed by total en-
listment five times higher than the peak figures of the World War.
If you can't enlist, what are you going to do? Your answer is:
Go to any bank, post office, or savings and loan association and buy
United States Defense Bonds
eighteen dollars and seventy-
five cents apiece. And plan to keep on buying regularly, every
pay day, for the duration. Moreover, buy Defense Stamps.
Patriotic retail merchants and even newspaper carrier boys sell
them. Join up! Here's a way you can enlist time and again, day
after day, repeatedly and steadily.
REDEPENSE
BUY
EXTEN
mm
(The Treasury Department urgently requests you to use this
announcement as many times as possible)
Regraded Unclassified
191
Treasury Department
Defense Savings Staff
WOMEN'S PROGRAM
Announcement
W-84
WAR COPY!
This will be a long war. It will be a hard war. Production must
be doubled and quadrupled. You heard these words and you
agreed gladly. Agreed? How? With your heart and mind
but how about your pocketbook? What have you done to help
double, let alone quadruple, output of our mines and factories, so
that soldiers and sailors may be supplied with weapons. How
many dollars have you put into United States Defense Bonds?
Double it! How many times have you bought them? Quadruple
it! Make your Bond buying a regular program. Buy as many
Bonds as you can, as often as you can, at your bank, post office, or
savings and loan association.
Get Defense Stamps from
your newspaper carrier boy and your retail dealer.
BUY
Marga
(The Treasury Department urgently requests you to use this
announcement as many times as possible)
Regraded Unclassified
194
Treasury Department
Defense Savings Staff
WOMEN'S PROGRAM
Announcement
W-85
WAR COPY!
As you sat by your radio what were your thoughts when you
heard these words: "The United States does not consider it a
sacrifice to do what one can, to give one's best to our Nation when
the Nation is fighting for its existence." Just contemplate for a
moment, what an Axis victory could mean and you realize you
haven't begun to approach sacrifices. Are you even satisfied with
the way you have been buying Defense Bonds? Hurry. Go on
record. Buy, buy quickly. Put every dime and dollar you can
spare into these Bonds and for the Defense of America.
...
Get
Defense Bonds and Stamps at your bank, post office, or savings
and loan association.
Buy Defense Stamps from your news-
paper carrier boy and your retail dealer.
REPRESENSE
BUY
/
france
/lings
(The Treasury Department urgently requests you to use this
announcement as many times as possible)
Regraded Unclassified
193
Treasury Department
Defense Savings Staff
WOMEN'S PROGRAM
Announcement
W-86
WAR COPY!
You agreed completely with the following words when you
heard them being broadcast: "It's not a sacrifice to go without
many things to which we are accustomed if the National Defense
calls for doing without them. It's a privilege." Well, don't you
think it is also a privilege to "go without" voluntarily so you can
buy United States Defense Bonds? Examine your budget
check every expenditure. See how much you can put by for
Defense Bonds. Ask your banker, or at your post office, or sav-
ings and loan association about the different amounts you can buy.
Get Defense Stamps from your newspaper carrier boy and
your retailer regularly. Set yourself a quota
then beat it.
Join your country in all-out Defense against the Axis.
REDEFINSE
BUY
-
(The Treasury Department urgently requests you to use this
announcement as many times as possible)
Regraded Unclassified
194
Treasury Department
Defense Savings Staff
WOMEN'S PROGRAM
Announcement
W-87
WAR COPY!
It's bad news to the Axis when sales of United States Defense
Bonds take a jump. Keep the total growing. Buy Defense
Bonds
or Stamps
repeatedly
every pay day
and as many as you can. The men in our Army and Navy feel
good when they hear that United States Defense Bonds are mak-
ing new sales records. Help them to keep up their chins by
keeping up your purchases of Defense Bonds at your bank, post
office, or savings and loan association.
Buy Defense Stamps
as often as you can from your newspaper carrier boy and your
retail dealer.
RECEIVE
BUY
(The Treasury Department urgently requests you to use this
announcement as many times as possible)
Regraded Unclassified
195
Treasury Department
Defense Savings Staff
WOMEN'S PROGRAM
Announcement
W-88
WAR COPY!
It's good news in Washington every time the sales of Defense
Bonds take a jump. Help to push them up. Purchase as many
Defense Bonds
or Stamps
as you possibly can
and buy them as often as you can at your bank, post office, or
savings and loan association.
Get Defense Stamps from
your retail dealer and your newspaper carrier boy.
BUY
1
prince
Nones
/
(The Treasury Department urgently requests you to use this
announcement as many times as possible)
Regraded Unclassified
U. 8. SAVINGS BONDS, SERIES I - TYPE A
STOCK ACCOUNT OF LOANS AND CURRENCY VAULT
Report for December 18, 1941
Total
$25
$50
$100
$500
$1,000
pieces
On hand c.o.b. Dec. 17.
....
13,928
18,997
182,981
62,663
154,846
433,415
Received from Bureau Dec. 18.
92,000
92,000
Total
105,928
18,997
182,981
62,663
154,846
525,415
Shipments
96,150
1,275
80,755
17,504
26,625
222,309
On hand c.o.b. Dec. 18.
9,778
17,722
102,226
45,159
128,221
303,106
NOTE:
Above figures on basis of latest available information
at 1:30 P.M. December 18, 1941.
Information as to estimates of the Bureau of Engraving and Printing concerning deliveries to be made
Dec. 19, 20, and 21, will not be available until later today and will be included in report to be sub-
mitted on morning of Dec. 19.
WER
Regraded Unclassified
U. 8. SAVINGS BONDS, SERIES B, TIPE A
REQUISITION ACCOUNT OF ISSUING AGESTS
Report for December 18, 1941
Total
$25
$50
$100
$500
$1,000
Pieces
Due on requisitions c.o.b. Dec. 17
Federal Reserve Banks
365,000
261,000
261,000
52,000
66,000
1,005,000
P.O. Department
756,000
305,000
295,000
35,000
35,000
1,426,000
Others
700
150
450
50
65
1,415
Total
1,121,700
566,150
556,450
87,050
101,065
2,432,415
Requisitions received Dec. 18
Federal Reserve Banks
5,000
5,000
P.O. Department
Others
3,450
2,125
3,305
454
560
9,894
Total
3.450
2,125
3,305
5,454
560
14,894
Shipments Dec. 18
Federal Reserve Banks
44,000
57,000
12,000
21,000
134,000
P.O. Department
50,000
20,000
5,000
5,000
80,000
Others
2,150
1,275
3,755
504
625
8,309
Total
96,150
1,275
80,755
17,504
26,625
222,309
Le on requisitions c.o.b. Dec. 18
Federal Reserve Banks
321,000
261,000
204,000
45,000
45,000
876,000
P.O. Department
706,000
305,000
275,000
30,000
30,000
1,346,000
Others
2,000
1,000
3,000
Total
1,029,000
567,000
479,000
75,000
75.000
2,225,000
Note: Above figures on basis of latest available information at 1:30 P.M. December 18, 1941.
MRL/s
December 18, 1941.
Mr
Regraded Unclassit
198
U. S. SAVINGS BONDS, SERIES B - TYPE A
STOCK ACCOUNT OF LOANS AND CURRENCY VAULT
Report for December 18, 1941
$25
$50
$100
$500
$1,000
Total
pieces
On hand c.o.b. Dec. 17
....
13,928
18,997
182,981
62,663
154,846
433,415
Received from Bureau Dec. 18
92,000
92,000
Total
105,928
18,997
182,981
62,663
154,846
525,415
Shipments
96,275
9,275
80,855
17,514
261665
230,584
On hand c.o.b. Dec. 18
....
9,653
9,722
102,126
45,149
128,151
294,831
Estimated deliveries to be received from Bureau of Engraving and Printing:
Friday. Dec. 19
120,000
120,000
...
Saturday, Dec. 20
150,000
50,000
200,000
Sunday, Dec. 21
175,000
75,000
250,000
BMT:
hear
Regraded Unclas
U. 5. SAVINGS BONDS, SERIES E. TIPE A
REQUISITION ACCOUNT OF ISSUING AGENTS
Report for December 18, 1941
$25
$50
$100
$500
$1,000
Total
Pieces
Due on requisitions c.o.b. Dec. 17
Federal Reserve Banks
365,000
261,000
261,000
52,000
66,000
1,005,000
P. 0. Department
756,000
305,000
295,000
35,000
35,000
1,426,000
Others
700
150
450
50
65
1,415
Total
1,121,700
566,150
556,450
87,050
101,065
2,432,415
Requisitions received Dec. 18
Federal Reserve Banks
5,000
5,000
P. 0. Department
Others
4,490
2,185
3,960
491
621
11,747
Total
4,490
2,185
3,960
5,491
621
16,747
Shipments Dec. 18
Federal Reserve Banks
44,000
8,000
57,000
12,000
21,000
142,000
P. O. Department
50,000
20,000
5,000
5,000
80,000
Others
2,150
1,275
3,755
504
625
8,309
Total
96,150
9,275
80.755
17,504
26,625
230,309
Due on requisitions c.o.b. Dec. 18
Federal Feserve Banks
321,000
253,000
204,000
45,000
45,000
868,000
P. O. Department
706,000
305,000
275.000
30,000
30,000
1,346,000
Others
3,040
1,060
655
37
61
4,853
Total
1,030,040
559,060
479,655
75,037
75,061
2,218,853
December 18, 1941
MRL/s
Regraded Unclassified
200
U. S. SAVINGS BONDS, SERIES 3, TIPE A
REQUISITION ACCOUNT OF THE FEDERAL RESERVE BANK OF BOSTON
Report of December 18, 1941
$25
$50
$100
$500
$1,000
Total Pcs.
Dub on requisitions C. 0. B. Dec. 17.
25,000
...
10,000
5,000
5,000
45,000
Requisitions Received Dec. 18
...
...
....
...
Total
25,000
...
10,000
5,000
5,000
45,000
Shipped Dec. 18
3,000
...
...
5,000
5,000
13,000
Due on requisitions C. 0. B. Dec. 18.
22,000
...
10,000
...
...
32,000
201
UNITED STATES SAVINGS BONDS, SERIES 1, TIPE A
REQUISITION ACCOUNT OF beit HEARYE BANK OF XEV YORK
REPORT OF DECEMBER 18, 1941
$25
$50
$100
$500
$1,000
Total Pes.
Due - requisitions 0.0.B. December 17
....
115,000
80,000
115,000
40,000
50,000
400,000
Requisitions received December 18
...
...
...
...
...
...
Total
115,000
50,000
115,000
40,000
50,000
400,000
Shipped December 18
5,000
8,000
...
5,000
10,000
28,000
Due on requisitions 0.0.B. December 18
....
110,000
72,000
115,000
35,000
40,000
372,000
Regraded Unclass
202
U. 8, SAVINGS BONDS. SERIES B. TIPE A
REQUISITION ACCOUNT OF THE FEDERAL RESERVE DANK or PHILADELPHIA
Report of December 18. 1941
$25
$50
$100
$500
$1,000
Total Pieces
Due on requisitions C.O.B. Dec. 17..
5,000
10,000
...
...
5,000
20,000
Requisitions received Dec. 18
...
Total
5,000
10,000
...
...
5,000
20,000
Skiypet Dec. 18
2,000
...
...
...
5,000
7,000
be on requisitions C.O.B. Dec. 18..
3,000
10,000
...
...
...
13,000
Regraded Unclass
U. S. SAVINGS BONDS, SERIES I, TYPE A
REQUISITION ACCOUNT OF THE FEDERAL RESERVE BANK OF CLEVELAND
Report of December 18, 1941
$25
$50
$100
$500
$1,000
Total Pcs.
Due on requisitions 0. 0. B. Dec. 17
40,000
20,000
...
...
...
60,000
Requisitions Received Dec. 18
...
Total
40,000
20,000
...
...
...
60,000
Shipped Dec. 18
5,000
...
5,000
Due on requisitions C. 0. B. Dec. 18
35,000
20,000
...
55,000
Regraded Unclassified
204
U. S. SAVINGS BONDS, SERIES B, TIPE A
REQUISITION ACCOUNT OF THE FEDERAL RESERVE BANK OF RICHMOND
Report of December 18, 1941
$25
$50
$100
$500
$1,000
Total Pes.
Due on requisitions 0.0.B. Dec. 17.. 10,000
...
...
...
...
10,000
Requisitions received Dec. 18
...
...
...
...
...
...
Total
10,000
...
...
...
...
10,000
Shipped Dec. 18
2,000
...
...
...
...
2,000
Due on requisitions C.O.B. Dec. 18.. 8,000
...
...
...
...
8,000
Regraded Uncla
205
U. 8, SAVINGS BONDS, SERIES 1, TYPE A
REQUISITION ACCOUNT OF THE FEDERAL RESERVE BANK OF RICHMOND, BALTIMORE BRANCH
Report of December 18. 1941
$25
$50
$100
$500
$1,000
Total Pieces
Due on requisitionsC.O.B. Dec. 17
13,000
8,000
3,000
...
...
24,000
Requisitions received Dec. 18
...
...
...
...
...
...
Total
13,000
5,000
3,000
...
...
24,000
Shipped Dec. 18
1,000
...
3,000
...
...
4,000
Due on requisitionsC.O.B. Dec. 18...
12,000
8,000
...
...
...
20,000
Regraded Unclas
206
U. S. SAVINGS BONDS, SERIES 1- TYPE &
REQUISITION ACCOUNT OF THE FEDERAL RESERVE BANK OF ATLANTA, INV ORLEANS BRANCH
Report of December 18, 1941
Total
$25
$50
$100
$500
$1,000
pieces
Due on requisitions c.o.b. Dec. 17. .
15,000
5,000
4,000
....
.....
24,000
Requisitions received Dec. 18
....
.....
....
.....
......
Total.
15,000
5,000
4,000
....
.....
24,000
Shipped Dec. 18
2,000
4,000
....
.....
6,000
Due on requisitions c.o.b. Dec. 18 .
13,000
5,000
.....
....
.....
18,000
Regraded Unclas
207
U. 8. SAVINGS BONDS, SERIES 1 - TYPE &
REQUISITION ACCOUNT OF THE FEDERAL RESERVE BANK OF ATLANTA
Report of December 18, 1941
$25
$50
$100
$500
$1,000
Total
pleces
Due on requisitions c.o.b. Dec. 17. .
10,000
10,000
10,000
....
30,000
Requisitions received Des. 18
....
......
Total.
10,000
10,000
10,000
....
30,000
Shipped Des. 18
2,000
5,000
....
.....
7,000
Due 42 requisitions c.o.b. Des. 18. .
8,000
10,000
5,000
....
.....
23,000
Regraded Unclassifi
208
UNITED STATES SAVINGS BONDS, SERIES 1, TIPE A
REQUISITION ACCOUNT OF 15 PAID MM ESTRY BANK OF CHICAGO
REPORT OF DECEMBER 18, 1941
$25
$50
$100
$500
$1,000
Total Pos.
Due on requisitions C.O.B. December 17
....
15,000
15,000
10,000
...
...
40,000
Requisitions received December 18
...
...
...
5,000
...
5,000
Total
15,000
15,000
10,000
5,000
...
45,000
Shipped December 18
5,000
...
10,000
...
...
15,000
Due en requisitions C.O.B. December 18
10,000
15,000
...
5,000
...
30,000
Regraded Unclas
209
U. S. SAVINGS BONDS, SERIES 1, TIPS A
REQUISITION ACCOUNT OF THE FEDERAL RESERVE BANK OF ST. LOUIS
Report of December 18, 1941
$25
$50
$100
$500
$1,000
Total Pos.
Due on requisitions 0.0.B. Dec. 17..
11,000
13,000
9,000
...
...
33,000
Requisitions received Dec. 18.
...
...
...
...
...
...
Total
11,000
13,000
9,000
...
...
33,000
Shipped Dec. 18
2,000
...
5,000
...
...
7,000
Due on requisitions 0.0.B. Dec. 18..
9,000
13,000
4,000
...
...
26,000
Regraded Unclassifie
U. S. SAVINGS BONDS, SERIES E, TYPE A
REQUISITION ACCOUNT OF MINNEAPOLIS
Report of December 18, 1941
Total
$25
$50
$100
$500
$1,000
Pieces
Due on requisitions c.o.b. Dec. 17
20,000
15,000
15,000
50,000
Requisitions received Dec. 18
Total
20,000
15,000
15,000
.....
50,000
Shipped Dec. 18
5,000
5,000
10,000
Due on requisitions c.o.b. Dec. 18
15,000
15,000
10,000
40,000
Regraded Unclass
UNITED STATES SAVINGS BONDS, SERIES 1, TYPE A
QUISTTION ACCOUNT OF THE FRIERAL RESERVE BANK OF KANSAS CITY
Report of December 18, 1941
$25
$50
$100
$500
$1,000
Total Pos.
Due on requisitions O.O.B. December 17
....
9,000
10,000
10,000
2,000
1,000
32,000
Requisitions received December 18
...
...
...
...
...
...
Total
9,000
10,000
10,000
2,000
1,000
32,000
Shipped December 18
2,000
...
5,000
2,000
1,000
10,000
Due on requisitions C.O.B. December 18
....
7,000
10,000
5,000
...
...
22,000
Regraded Unclassified
212
U. 8. SAVINGS BONDS, SERIES 1- TYPE &
REQUISITION ACCOUNT OF THE TORAL RESERVE BANK OF DALLAS
Report of December 18, 1941
$25
$50
$100
$500
$1,000
Total
pieces
I
Due on requisitions c.o.b. Dec. 17. . 32,000
25,000
25,000
....
52,000
Requisitions received Dec. 18
....
......
Total.
32,000
25,000
25,000
....
52,000
Shipped Des.18.
3,000
10,000
13,000
Due on requisitions c.o.b. Dec. 18. . 29,000
25,000
15,000
69,000
Regraded Unclassifi
UNITED STATES SAVINGS BONDS, SERIES 1, TIPE A
REQUISITION ACCOUNT OF THE RESERVE BANK OF SAN FRANCISCO
Report of December 18, 1941
$25
$50
$100
$500
$1,000
Total Pos.
Due on requisitions O.O.B. December 17
....
45,000
50,000
50,000
5,000
5,000
155,000
Requisitions received December 18
...
...
...
...
...
...
Total
45,000
50,000
50,000
5,000
5,000
155,000
Shipped December 18
5,000
...
10,000
...
...
15,000
Due on requisitions C.O.B. December 18
40,000
50,000
40,000
5,000
5,000
140,000
Regraded Unclassi
UNITED STATES SAVINGS BONDS
Comparative Statement of Sales During
First Fifteen Business Days of December, November and October, 1941
(October 1-17, November 1-19, December 1-17)
On Basis of Issue Price
(Amounts in thousands of dollars)
:
:
Amount of Increase
:
Percentage of Increase
:
Sales
:
or Decrease (-)
:
or Decrease (-)
Item
:
:
:
:
December
:
November
:
December
:
November
: December
:
November
:
October
I
over
:
over
:
over
:
over
:
:
:
:
November
:
October
:
November
:
October
Series I - Post Offices
$ 38,815
$ 25,055
$ 23,826
$13,760
$ 1,229
54.9%
5.2%
Series I - Banks
72,761
46,025
45,683
26,736
342
58.1
-7
Series 1- - Total
111,577
71,080
69,509
40,497
1,571
57.0
2.3
Series 1- - Banks
12,519
11,858
12,959
661
- 1,101
5.6
- 8.5
Series G - Banks
74,340
72,484
72,011
1,856
473
2.6
.7
Total
$198,435
$155,421
$154,479
$43,014
$ 942
27.7%
.6%
Office of the Secretary of the Treasury, Division of Research and Statistics.
December 18, 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.
Regraded Unclassified
CONFIDE
UNITED STATES SAVINGS BONDS
Daily Sales - December 1941
On Basis of Issue Price
(In thousands of dollars)
Post Office
Bond Sales
Bank Bond Sales
All Bond Sales
Date
Series If
Series 1
Series 7
Series G
Total
Series I
Series 7
Series G
Total
December 1941
1
$ 2,976
$ 3,904
* 1,333
$ 7,220
$ 12,458
$ 6,850
$ 1,333
$ 7,220
$ 15,434
2
1,229
2,592
623
5,750
8,964
3,821
623
5.750
10,193
3
1,510
2,734
870
5,289
8,893
4,244
870
5,289
20,403
&
2,411
4,036
726
7,530
12,292
6,447
726
7.530
14,703
no
2,015
4,805
1,152
12,357
18,314
6,820
1,152
12.357
20,329
1,001
2,293
656
2,776
5,725
3,294
656
2.776
6,726
6
3,282
4.764
1,011
3,810
9,585
5,046
1,011
3,810
12,866
9
1,828
3.877
601
4,996
9,475
5,706
601
4,996
11,304
10
1,651
3,566
491
2,612
6,668
5,217
491
2,612
8,320
11
1,909
4,763
719
3,423
8,905
6,672
719
3,423
10,814
12
2,773
5,012
658
3.768
9,437
7.785
658
3,768
12,211
13
2,767
5,030
584
2,120
7.734
7.798
584
2,120
10,501
15
7,185
11,679
1,022
4,462
17,162
18,864
1,022
4,462
24,347
16
2,113
3,956
893
1,901
6,750
6,069
893
1,901
8,863
17
4,164
9,750
1,180
6,327
17,257
13,914
1,180
6,327
21,421
Total
$ 38,815
$ 72,761
$ 12,519
$ 74,340
$159,620
$111,577
$ 12,519
$ 74,340
$198,435
Office of the Secretary of the Treasury, Division of Research and Statistics.
December 18, 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.
Regraded Uncla
216
December 18, 1941.
Memorandum for the President:
Mr. Knoke, of the Federal Reserve Bank of
New York, telephoned from New York at 3:30 p.m.
today to say that the Guaranty Trust Company
had just informed him that they had received 8.
cable from the Lisbao 0 Azores Bank at Lisbon
requesting the Guaranty Trust Company to cancel
at once any commercial credits outstanding where
possible.
(This might indicate the bank at Lisbon
has some advance information as to possible
invasion or that they may fear its imminence.)
HDW/dr1
12/18/41
Regraded Unclassified
217
December 18, 1941
My deer Mr. Secretary:
I an enclosing for your information a copy of
a nenerandus for the President.
Sincerely yours,
(Dgd) Hmorgenthood,
Secretary of the Treasury
The Honorable
the
the Secretary
Washington, D. c.
Enclosure
Regraded Unclassified
218
December 18, 1941
My dear Mr. Secretary:
I - enclosing for your information a copy of
a memorandam for the President.
Sincerely yours,
Agd Hmogenthings.
Secretary of the Treasury
The Honorable
The Secretary of state,
Washington, Do Co
Enclosure
HOW sub
30/08/19
Regraded Unclassified
219
December 18, 1941
My desr Mr. Secretary:
I - enclosing for your information a copy of
a assorandes for the President.
Sincerely yours,
(Aga) H. margenthangs.
Secretary of the Treasury
The Honorable
The Secretary of War,
Washington, D. C.
Enclosure
01/11
12/18/41
Regraded Unclassified
220
Ltr to Secy Stimson sent to him at 3000 Cathedral Avenue.
"
Secy Knox
11
If
If
11
Wardman Park hotel.
"
If
"
Secy Hull
"
11
500-G, Wardman Park hotel.
Taken by Mr. Slye, of Secret Service, at 6:15 p. m.
Regraded Unclassified
C
0
P
221
T
FEDERAL RESERVE BANK
OF NEW YORK
December 18, 1941.
Sir:
Attention: Kr. Frank Dietrich
We have today received the following tested telegram
dated December 17, 1941 from the Federal Reserve Bank of San
Irancisco:
"CREDITING TODAY 6,813,442.13 REPRESENTING
MINT SETTLEMENT ON 194,675.341 FILE OZ.
GOLD DELIVERED TO MIND DECEMBER 10 EX. S.S.
"TRANSBALT", FOR CREDIT 03 SECRETARY OF
TREASURY, SPECIAL ACCOUNT. DOLLAR VALUE
$6,813,636.93 MILT CHARGES 194.80. AMOUNT
OF 1/4 PERCENT HANDLING CHARGE HOT DEDUCTED
$17,034.09. (STATE BANK OF U.S.S.R., MOSCOW)"
In accordance with the above telegram and pursuant to
our telephone conversation of today, we have credited the
Secretary of the Treasury, Special Account on our books
$6,813,442.13. and have made the appropriate entries in the
transcript of the Secretary of the Treasury Special Account to
reflect the 1/4 of one per cent charge of $17,034.09 as 8. handling
charge on gold.
Respectfully,
(Signed) D. J. Cameron
D. J. Cameron,
Manager, Foreign Department.
The Bonorable,
The Secretary of the Treasury,
Weshington, D. C.
Copy:1c:12/19/41
Regraded Unclassified
For Miss Chauncey
222
FEDERAL RESERVE BANK
OF NEW YORK
December 18, 1941
CONFIDEMTIAL
Dear Mr. Secretary: Attention: Mr. Harry D. White
I am enclosing our compilation for the
week ended December 10, 1941, showing dollar dis-
bursements out of the British Empire and French
accounts at this bank and the means by which these
expenditures were financed.
Faithfully yours,
/s/ L. W. Knoke
L. W. Knoke.
Vice President.
The Honorable Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D. C.
Enclosure
Copy:vw:12-19-41
Regraded Unclassified
95.36
900.2
518-6
e 10-1
LA
946
900,2
2
03-0
1,792.2
1,393.7
THE
782.1
+ 13.2
No
w
8,8
-
6.8
- 30,1
1
160.9
105.9
35.0
176.2
20.2
2,0
154.1
+ 35.3
0.3
-
E
0.5
-
0.5
+ 0.2
29
109,0
77.3
31.7
150.9
0.8
-
150,1
+ 41.9
013
-
0,3
0.3
-
0.3
-
3
156.1
111.6
44.5
134.6
[
1.0
133.6
AL 21,5
16,1
E
16.1
0.4
-
F
0,4
. 15.7
D:
Nov. 19
29.6
20.1
9.5
25,3
25,3
- 4.3
15.1
-
-
-
-
15.1
-
-
- 15.1
26
20.6
14.2
6.6
9.1
-
1.0
8.1
- 11.5
-
I
-
0,1
,
0.1
+ 0.1
Inc. 3
39.2
32.1
7.1
67.6
I
1
67.6
+ 28,4
0,2
I
0,2
0.1
-
0.1
- 0,1
10
29.5
26.6
4.9
8,0
-
D
-
8.0(f)
- 21.5
0.2
1
0,2
0.1
-
0,1
- 0,1
Transfers fors from British Purchasing Complation to
Bank of Canada for French Account
Registed (through Jane 19,1940) 27.6 million
Wook ended December 10, 1941
-
million
England
(since
Im
19,1940)
42.5 million
Comulation tree July 6, 1940
162.7
million
to
1
tabulations prior to April 23, 1941.
latime
prior to October 4, 1941.
(See ettached thest for other
Regraded Unclassified
I
NO LAS ALP unis - Revi, MaSetry at
(a)
Instructions
9a
Issued
-
3
9
proposts to the official milling, liquidition of muties to private Protish - - tisularly during
3rd
Americans
maille,
$
I
E
early months of the - although the receipt of the proceds at this Bank - to 100ml the with any accuracy, Assording
to data supplied by the British Treasury and released by Secretary Norgesthm, total official and private British liquidation
of our securities through December, 1940 mounted to $334 million.
(a) Includes about $85 million received during October, 1939 from the assounts of British authorised banks with New York banks,
presumably reflecting the requisitioning of private dollar balames. Other large transfers free such accounts since Detober,
1939 apparently represent the acquisition of preseeds of exports from the sterling are and other currently socruing dollar
receipts.
(d) Includes payments for account of French Air Commission and Frensh Purchasing Commission,
(o) Adjusted to eliminate the effect of $20 million paid out on June 25, 1940 and returned the following day.
(f) Includes about $2.5 million representing the proceeds of wool exports to U. S.
Re radedUnclassified
Inted December 10, 1941
Total
Total
for
Free
Other
Total
I
order
A/C
Credite
Salee
A/C
Credits
Owbite
L/C
Debite
Gredits
Sales
Credits
is
1/40)*
323.0
16.6
306.4
504.7
412.7
20.9
38.7
32.4
+161.7
31.2
3.9
27.3
36.1
30.0
6.1
+ 4.9
477.2
16.6
460.6
707.4
534.8
20,9
110.7
41.0
+230,2
57.9
14.5
43.4
62.4
20.1
12.3
+ 6.5
40.6
-
460.4
462.0
246.2
3-4
123.9
88,5
+ 1,6
72.2
16.2
59.5
81.2
68.9
18.3
+ 9.0
23.1
-
23.1
52.2
21,2
-
-
31.0
+ 29.1
10.7
0.5
10,2
2,8
2.1
0.7
- 2.9
.
--
.
37.4
-
37.4
19.7
11.9
7,8
- 17.7
8.2
5.5
2,7
-
8.0
5,9
2.1
+ 0.2
S2.8
0.1
52,7
32,5
19.3
-
13.2
- 20.3
10.3
6.9
3.4
-
11.6
9,0
2,6
+ 13
I
Nov. 19
12.2
12.7
3.2
2.1
-
-
1.1
-9.5
3.5
3.5
I
-
0.7
0.7
- 2.8
26
8.7
8.2
9.9
3.7
-
-
6,2
+1.2
2.6
2.5
0.1
-
0.5
en
0.5
An 2.1
Dec. 3
14.6
-
14.4
8.8
6.7
-
-
2.1
- 5.6
2.0
0.9
1.1
3.7
3.4
0.3
+ 1.7
10
3.9
3.9
4.8
2.8
-
1
2,0
+ 0,9
0,1
-
0,1
-
0.6
-
0.6
+ 0.5
Y
December 10, 1941
7.6
million
mothly breaktom - understion prior to April 23, 1941.
treatment nee mabilations prior to October 8, 1941.
Re radedUnclassified
226
FEDERAL RESERVE BANK
CF NEW YORK
December 18, 1941.
Str: Attention: Mr. Frank Districh.
We enclose a copy of e. cable received today
from the Central Bank of China requesting an extension,
for six months, of the arrangement for the purpose of
supplying the Republic of China with dollar exchange
as outlined in our letter of July 14, 1937, as amended.
Please advise us of your wishes regarding
the request of the Central Bank of China for a further
renewal of the arrangement.
Respectfully,
(Signed) D. J. Cameron
D. J. Cameron,
Manager, Foreign Department.
The Honorable,
To Secretary of the Treasury,
Washington, D. C.
Enc.
Copy:1c:12/23/41
Regraded Unclassified
C
0
P
227
I
INCOMING CABLEGRAM
December 18, 1941
Chungking, December 17, 1941
Federal Reserve Bank of New York
New York
No. 20
Referring to 1937 agreement between you and -
us we wish to extend for further six months Please
consult Treasury and advise
The Central Bank of China
Copy:1c:12/23/41
Regraded Unclassified
0
o
Y
228
DEPARTMENT OF STATE
Machington
December 18, 1941
In reply refor to
77 110.51 Frozen Credits
The Secretary of State presents his compliments to
the Honorable the Secretary of the Treasury and transmite
herewith paraphrases of certain circular telegrams to
all diplomatic and consular establishments in the American
regublics concerning measures adopted to control the
financial and economic activities of Japanese in the Western
Hemisphere. The parauhrases are as follows: December 7.
1941, December 7. 1941, 7 p.m., and December 3, 1941, 6 p.m.
The Secretary of State also transmits herewith para-
phrases of certain telegrame with reference to the Depart-
ment's circular telegram of December 8, 1941 to all
diplomatic and consular establishments in the American
republics. These are as follows:
Number
From
Date
280
Managua
12-11-41
515
Quito
12-9-11
Inclosures:
As stated.
Cony:hnd:12/19/41
Regraded Unclassified
C
0
P
I
229
PARAPHRASE OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
All Diplomatic and Consular Establishments in
the American Republics.
DATED:
December 8, 1941, 6 p.m.
NUMBER:
Circular
Department's circular telegram to All Missions in
the American Republics, December 7. 1941, 7 p.m.
Reference is made to circular telegram of December 7.
7 p.m., in which you were requested to get in touch
immediately with the appropriate authorities of the govern-
ment to which you are accredited in connection with
Japanese economic activities in the Western Hemisphere.
You are requested immediately to call the attention of
the appropriate authorities in the government to which
you are accredited to the measures which have been taken
by this Government affecting Japanese economic activities
in this country. These measures prohibit all financial,
business and trade transactions in which Japan or her
nationals have any interest.
In conformity with inter-American declarations of
solidarity in the event that the peace, security or
territorial integrity of any American Republic is
Regraded Unclassified
230
-2-
threatened, particularly of Resolution XV adopted by
the Second Meeting of Ministers of Foreign Affairs of
the American Republics, you are requested to state that
it is presumed that the Government to which you are
accredited will be disposed to adopt immediately, neces-
sary financial and economic measures to curb Japanese
economic activities in the Western Hemisphere.
You should point out that because financial tran-
sactions such as the withdrawal of funds from banks,
et cetera, can be effectuated at a moment's notice, it
is absolutely essential that the steps taken in this
direction be taken without delay.
For your information and for the guidance of the
appropriate local authorities there follows a more
detailed statement of the measures taken by this Govern-
ment affecting Japanese economic activities in this
country.
(1) All licenses issued under the United States
Freezing Control relating to transactions by
or on behalf or for the benefit of Japan or
any national thereof have been revoked. The
effect of this action is to place an immediate
and complete stoppage upon all financial and
business dealings, as well as trade transactions,
in which Japan or her nationals have any interest.
Regraded Unclassified
231
-3-
Among other things, except as may be authorized
in appropriate cases in the future:
(a) No withdrawals whatsoever are allowed
from any account in any banking
institution if Japan or any national
of Japan has any interest in such
account.
(b) No withdrawals whatsoever are allowed
from any safe deposit box by Japan or
any national of Japan, and access is
not allowed to any safe deposit box in
the contents of which Japan or any
national thereof has any interest.
(c) No remittances in any amounts whatsoever
may be made to Japan or any national
of Japan, wheresoever located.
(d) No trade transaction with any part of
the world in which Japan or any
national of Japan has any interest may
be effected.
(e) No Japanese national may engage in any
business activities in the United States.
(2) Government representatives have been placed in
all Japanese banking and business enterprises and
they have been instructed for the time being to
Regraded Unclassified
232
prevent any access by any person to the
premises of such enterprises and to prevent any
person from having access to or altering,
destroying, or removing any books, files, records
or other property of such enterprises.
(3) Under Export Control Act, all outstanding export
licenses for all commodities destined to Japan,
its possessions, Manchukuo, occupied China,
French Indo China and Thailand have been revoked.
All export licenses for all goods for all
destinations to consignees of Japanese nationality
have been revoked and goods already at sea in
that category are to be put in the custody of
United States missions at destinations.
Although it must be left to the discretion of each
Chief of Mission for the presentation of the Department's
views it is hoped the controls of the type outlined will
be readily adopted by all the governments. The defense
of the United States and of each of the other American
Republics, it is felt, will be in danger if the adoption
of these measures fail or is delayed.
Copy:1c:bj:12-19-41
Regraded Unclassified
C
0
?
Y
233
PARAPHRASE OF TELEGRAM SENT
FROM: Secretary of State, Washington
TO:
All Missions in Latin America
DATED: December 7. 1941
NUMBER: Circular
Additional instructions besides those contained in
Department's circular of December 7. 7 p.m., are as follows.
The following branches are to be advised before opening
business on December 8 that any transaction subsequent to
July 28, 1941, in which Japan or any national thereof has
had any interest, direct or indirect, without specific
license from appropriate authorities of this Government
will be unlawful: all branches of the W. R. Grace and
Company, American Express Company, J. Henry Schroeder,
National City Bank, Chase National Bank, First National Bank
of Boston which operate in the country to which you are
accredited and any other branches of United States banking
concerns therein. Also all other United States concerns
operating in the country to which you are accredited should
be advised not to engage in any such transaction without
specific license. You are instructed further to be on the
alert for any evidence of sabatoge.
Copy:hmd:12/19/41
Regraded Unclassified
C
0
P
Y
234
PARAPHRASE OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
All Missions in Latin America
DATED:
December 7. 1941, 7 p.m.
NUMBER: Circular
Please express to the appropriate officials this
Government's wish that the transfer of funds or gold
belonging to the Government of Japan or Japanese banks
will not be permitted by them with a view to the develop-
ment in this matter of a common policy.
Interpret this instruction broadly and report by
cable.
eh:copy
12-19-41
Regraded Unclassified
0
0
P
235
Y
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
AMLEGATION, MANAGUA
TO:
Secretary of State, Washington
DATED:
December 11, 1941, 5 p.m.
NO.:
280
Approval in principle of action suggested has been assured
according to the Minister of Foreign Affairs and the necessary
decree is being drawn up by the Minister of Hacienda.
eh:copy
12-19-41
Regraded Unclassified
C
o
P
Y
236
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
AMLEGATION, QUITO
TO:
Secretary of State, Washington
DATED:
December 9. 1941, 6 p.m.
NO.:
515
The pertinent portions of Department's circular
of December 8 were handed to the Foreign Minister with
an extra copy for the Foreign Minister. A translation
will be made tomorrow, and the latter hopes it will
contain suggestions that can be complied with. Will
report later.
ehicopy
12-19-41
Regraded Unclassified
C
237
o
P
Y
PARAPHRASE OF TELEGRAM RECEIVED
FROM: AMEMBASSY, PANAMA
TO : Secretary of State, Washington
DATED: December 18, 1941
NO. : 519
STRICTLY CONFIDENTIAL
With respect to Commerce's inquiry contained in its
letter of November 28, 1941 concerning Y. Amano and Company,
under Panamanian law all Japanese activities have been sus-
pended including those of the foregoing firm and all Japanese
nationals have been interned. All Japanese funds were frozen
by subsequent action. Further details by air mail despatch.
WILSON
Copy:bj:1-1-42
Regraded Unclassified
TREASURY DEPARTMENT
238
INTER OFFICE COMMUNICATION
DATE December 18,1941
Secretary Morgenthau
TO
FROM
Mr. White
Subject: Axie oil situstion
There are attached reports submitted to us by the
Standard 011 Company dealing with the oil situations in
Jermany and Japan. The memoranda have been examined and
compared to other information which we have, and some
comments summarizing our information are appended:
1. It appears, on the basis of the information,
that Jacan now nas supplies sufficient for 1 to 1 1/2 years
of war. There is virtually no disagreement among several
estimates on this matter. However, you will recall that the
Navy Department some time ago believed that Japanese supplies
are substantially larger.
2. The Standard 011 Company stressed its opinion that
should Japan get control over Borneo or the Nethorlands East
Indiea crude oil areas, it would be more important than ever
to bomb refineries in Japan, details of which are noted on
mays and tables submitted by the company.
3. Moet of our information, including data of the
Standard 011 Research staff, indicates that Germany will
reach an oil crisis by next summer. However, Mr. Sadler, of
the Standard 011 Company, believes the Germans will not suffer
a serious shortage of oil. As far B.S we know, he is the only
authority that takes this view.
4. I talked with Mr. Sadler yesterday and he tells me
that he 1a submitting the same material to the War and Navy
Departments.
Regraded Unclassified
TREASURY DEPARTMENT
239
INTER OFFICE COMMUNICATION
DATEDecember 18, 1941
TO Mr. White
FROM Mr. Ullmann
Subject: Notes on the Japanese Petroleum Situation
1. Adequacy of Japanese Supplies:
Various estimates place Japanese supplies (stocks and
production) as sufficient for between 1 and 1 1/2 years.
Several estimates are:
Standard 011:
1 - 1 1/2 years
Treasury:
1 year
British:
1 year
Socony-Vacuum:
1 year
2. Accumulated Stocks
The several estimates of Japanese stocks are:
Standard 011:
40 million barrels
Treasury:
35 million barrels
British:
(No recent estimate--but estimated
as 32 million barrels a year ago.)
Socony-Vacuum:
35-38 million barrels
3. Japanese Production
All estimates have placed Japanese production at about 4 million
barrels per year through 1940. Standard 011 thinks this can be
raised to 5 million barrels, by increasing synthetic production.
4. Wartime Consumption
Estimates of consumption in the past:
Standard 011 estimates: Total 1940: 37 - 42 million
barrels (15-20 million barrels
military and naval; 22 million
barrels civilian and industrial)
Treasury estimates:
Total 1940: 35 million barrels
Regraded Unclassified
240
Division of Monetary
- 2 -
Research
British estimates: No recent figures (but
estimated at 32-35 million
barrels a year ago).
Socony-Vacuum estimates: Total 1940: 35-40
million barrels.
The Standard 011 estimate of past consumption appears to
be the most closely studied. Standard 011 has not estimated
wartime military and naval demand, but believes that industrial
and civil use cannot be reduced below 15 million barrels. It
1s felt safe to assume that military and naval consumption, in
e major war, cannot be reduced below the 1940 minimum estimate --
15 million barrels.
It may be possible that Japan's wartime naval and aerial
notivity will not increase the military consumption of petroleum,
since land operations may be curtailed. Similarly, it is
possible that the military demand for petroleum will be substan-
tially increased -- say to 30 million barrels.
According to this, Japan's total annual consumption might
fall within the limits of from 30 million barrels to 45 million
carrela,
5.
The above estimates are based on Japan's not acquiring new
supplies in the Netherlands East Indies or Borneo.
Standard 011 has correctly pointed out that conquest of the
Netherlands East Indies would change the Japanese situation.
Although the Dutch could effectively destroy their refineries,
they could not destroy their wells and cipes in such a way 8.8 to
preclude Japanese use within B. short time.
It, therefore, more than ever appears that the most effective
any of taking full adventage of Japan's oil weakness would be to
boob the refineries in Japan -- since these refineries are essential
to Japan, whether she uses oil stocks or oil gained by conquest.
D.
There is sppended the Standard 011 memorandum, which includes
detailed tables and maps. This information probably should be made
svailable to the proper military and naval authorities, if it has
not already been furnished them.
Regraded Unclassified
TREASURY DEPARTMENT
241
INTER OFFICE COMMUNICATION
DATE December 18,1941
Mr. White
10
Mr. Ullmann
FROM
Bubject: German petroleum -- Standard 011 information
Mr. Sadler of the Standard 011 Company personally believes
1. that Germany will not suffer any serious shortage of petroleum
products for its military machines. He bases his opinion on the
fact that the Germans have increased some of their transportation
facilities and can make full use of the remaining output. However,
Mr. Sadler 1s in disagreement with the research staff of the
Standard 011 Company on this point.
On the basis of Standard Oil research information and data
from other sources, it would appear that Germany would reach an
oil crisis at some time during the early summer of 1942.
Standard agrees closely with other sources in estimates of
German stocks and production, but does not attempt to estimate
accurately German consumption. However, it allows for the
possibility of 8. daily military demand amounting to 200,000 barrels.
It estimates civilian and industrial consumption in German-Controlled
Europe at 208,000 barrels - or B. total possible demand of 408,000
barrels per day. Compared to this, other estimates of German total
consumption are:
Russian: 625,000 barrele per day (500,000
of which are for military purposes --
perhaps including war industries.)
Italian:
500,000 - 625,000 barrels per day
British: 420,000 barrels per day
The Russians perhaps are in the best position to estimate
German military consumption -- but may be somewhat over-optimistic.
However, if we use an estimate of total consumption of
500,000 barrels per day -- which is nearer the British and Standard
011 figure than it 1s to the Russian -- Germany would reach 8 crisis
in four months, assuming that its military campaign 18 maintained at
its recent tempo. Such an assumption would probably be over-
optimistic, however, since winter conditions should cause some
curtailment in German mechanized operations. It seems safe to believe
that the Germans will resume full-scale operations in the spring --
which would apparently bring an oil crisis by early summer.
Regraded Unclassified
242
Division of Monetary
- 2 -
Research
Standard 011 estimates that German stocks at the beginning
of 2. the Russian campaign were 46 million barrels. This is quite
close to the Russian estimate of 7 million tons (about 50 million
barrels).
The Russians estimate that German production amounts to
sround 3. 350,000 barrels per day. This 18 somewhat higher than the
Standard 011 estimate, which places German production at around
325,000 barrels per day in the first part of 1942.
4.
On synthetic production, Standard Oil estimates are close
to the Russian estimates. Standard 011's 1s approximately 2.8
million barrels & month, while the Russians say about 2.4 million
barrele per month.
5.
The Standard 011 memorandum includes some detailed maps,
tables and photographs which might be quite useful for the Allied
war effort. Mr. Sadler says that this material has all been
furnished to the Navy and perhaps to the Army. It would probably
be worthwhile to check with the Army and make this material
svailable to it if it has not already seen the information.
Regraded Unclassified
213
STANDARD OIL COMPANY
INCORRORATED in
30 ROCKEFELLER PLAZA
RGOM 2001
WOLKM
NEW YORK December 13, 1941
CONFIDENTIAL
IN BATTY write,
ameletant to the Secretary of the Treasury.
Treatury Department,
Dedington, D. C.
Cest Ke. White:
: went over the memoranda prepared by our Statistical and Analytical
Department with respect to the German and Japanese supply situations last
rights
with respect to the report or Continental Europe, I do not see in-
studed the Polish production which probably amounts to 9,000 or 10,000
tarrels daily, and has importance for its high wax content, which CAD be
hydrogenated by the Germans to make excellent lubricating oil, which in
they to be their greatest handicap.
The assumption that civilian and industrial demand in all the occupied
scuntries will amount to 25% of normal demand, seems to me to be on the
its side. our experience in France was that consumption, under war condi-
closs, while operating against the Germans, for all purcoses, was only 65%
of peace time demand,
I note another assumption is that the Germane are using some 100 octane
careline. I have seen many reports of analyses of gasoline from German
planee shot iown and have heard of no octane above the 86/88 range. The
Termane life solid injection, and, consequently, get high motor output, although
the wich an octane, undoubtedlytheir consumption of fuel 1e substantially
tellet than in the 100 octane motors.
Tou will appreciate, AS our gentlemen have pointed out, that the assumptions
OF clearly such. I think the figures of crude oil supplies are quite accurate
its the desumptions are no more than studied guessee, with which the writer Is
= entirely in accord, as above noted.
Sincerely Elsawn yours
SADLER
Regraded Unclassified
244
CONTINENTAL EUROPE, EXCLUDING RUSSIA,
SPAIN AND PORTUGAL
Prior to the invasion of Russia by Germeny it was not possible
for Cennany to take full advantage of all Roumanion potential produc
as shipments to Germany were limited by barge capacity ap the Danube and
existing rail recilities. Since that time these fecilities have been
supported by recently installed pipelines end the Russian campaign created
a deciand for all Roumanian surplus that could not be moved to Cermany
because of transport limitations. With the refinery and hydrogenation
curecity svailable to Germany it is possible to convert available crudes
and coul into the proportion of products dictated by requirements. Thus
it is believed thet with possible minor exceptions, complete flexibility
exists in regard to petroleum supplies to Germany both NB regards
transportation* and product requirements so that the estimated supplies
from all sources REY be added together and considered 48 available against
total requirements,
The attached memorandum of July 11th (exhibit #1) was prepared et
the beginning of the German-Russien war in en attempt to forecast supplies
available to Gormany and shows the detail of the various supply sources.
Similar estimates have been prepared to show indicated supplies from the
sure sources for the first six months of 1942, the comperison being 9.8
follows:
Last 6 months 1941 First 6 months 1942
Supplies
B/D
B/D
Total crude oil production
171,000
194,000
Natural gesoline, benzol, etc.
21,000
21,000
Synthetic oil from coal
88,000
110,000
Totals
280,000
325,000
The increase in crude oil production is the assumed potential increase
in production from Roumnnie, For the last six months of 1941 this wes estimated
at 113,000 P/D. The best producing advice is that while it might be possi ble
by intensive drilling to increase Roumanian production temporarily to 88 much
to 150,000 B/D, this could not be maintained over any appreciable period,
Accordingly, Roumarion production has been estimated to increase from 112,000
to 135,000 B/D for the first siz months of 1942.
Synthetic oil production from coal and coal derivatives in based on
All estimated everage production during the first six months of next year et
the rato of 110,000 B/D, compared with un estimated production rate at the
tecinning of the year of slightly under 100,000 B/D. The basis upon which
It 1a possible that supplies to Itely are subject to greater transport
difficulties because of limited railroad facilities and the competition
of other urgent freight.
Regraded Unclassified
- 2 -
245
Exhibit #4
these entimates are made 1s covered in the attuched report /cl the
International Catalytic 011 Processes Corporation, covering liquid
ruel supplies to Conticental Europe, which contains detailed data as
to location and capacity of all known synthetic processing facilities
available to Germany.
The above estimates of supply in every case are believed to
represent maximum quantities, and it should be emphasized that no
allevence is made for aerial destruction, some of which has doubtless
occurred.
It is believed that the above Cigires on supplies are fairly
am, and in fact represent maximum quentities. On the domand side,
however, very little data are available, BD that estimates of iemend
are at best but considered guesses. The assumptions upon which these
estime tes are made are clearly set out, 80 that the effect of any
changes in these assumptions can be interpreted. Any recent estimates
of stocke are subject to error, since such ostimates involve demand
considerations.
The stocks as of July 1st of this year in the area under
consideration at the beginning of the Russian campaign are estimated
et approximately 46,000,000 barrols. It is 6100 estimated that, of
these stocks, approximately 15,000,000 burrele represent an irreducible
cinimum, thus leaving 31,000,000 barrels svailable for consumption.
& the demand side, for purposes of comparison, the normal
pencetime consumption in the areas under consideration, when excluding
foreign trade fuel oil bunkers, was 518,000 B/D. It is apparent that
total Germen consumption must currently be considerably ow this
figure, as otherwise available stocks would have been exhausted before
now. An estimate has been made in the attached report of the minimum to
which civilian and war industry requirements might be reduced, which
corresponds to 25% of normal demand in the occupied countries, end 50%
in Germany and Italy. On this besis, civilien and war industry requirements
would be equivalent to 208,000 B/D or 40% of the normal peacetime consumption
of the entire area, Subtructing this figure from the amount available
during the last six months of 1941, it is apparent that 72,000 B/D would
be available for military requirements from current production in the
last six months of this year, and 117,000 B/D would correspondingly be
available during the first six months of next year. The figures are
submitted on this basis so that those best qualified to estimate military
requirements can arrive et somo conclusion 28 to how long the above
estimated stock quantity would last, For example, if military requirements
over and above the reduced civilier end war industry requirements were
estimated at 200,000 B/D since the start of the Russian campaign, stocks
would be reduced to the minimum irreducible figure of 15,000,000 barrels
within nine months, starting July 1st, 1941 or by April 1st, 1942.
Similarly, 1f total military requirements were 150,000 B/D, stocks would
not be reduced to the minimum within twenty-three months efter July 1,1941,
or about June 1, 1943.
Regraded Unclassified
- 3 -
246
Estimated lubricating oil supplies available to Germany are
covered by Exhibit 20, 2, with supporting statement, and also information
code the loostion and capacity of the plants upon which these astimates
are based. Here opuin no allowance 13 nade for destruction of producing
Incilities. On the other hand, the estimates of supply contain no
for the reclaining of used oils which is doubtless
2014F carried out to 1 large extent, It 18 not believed that the limits-
deve on lubriceting oil supplies are any greater the on other petroleum
supplies.
Recarding aviation gusoline it is believed that with the
Mexibility ufforded by existing refinery facilities, in combination with
it should be possible to divert sufficient potential motor
(ssoline to meet aviation gusoline requirements, Such data ns are available
indicate the bulk of supplice available to Germany are of the 87-91 octane
(rude whough 20110 100 cotice engoline 1£ Veing used. The lower octane
quality of Garan eviation supplies is to some extent cffset by their use
of 11quid fuel injection engines.
In comperison with the Gerrum situation, supplies to Runsia ere
hore emple, as before the outbreak of the war, Ruse IL was second only to
the United States in crude oil production, with en estimated daily
production during 1940 of 630,000 R/D. Total refining capacity 12
extimated at 670,000 B/D. Detailed figures of crude oil production by
principal areas end individual refinery capacities are shown in attached
Extibit No. 3. Little data are available on Russian capacity for production
of lubri catine oils and evistion gasoline. It is thus aggement that, if
- German invasion can be avoided of the Ressian of producing regions,
Sursin possesses a distinct superiority over Cerumy in regard to oil
supplies.
December 12, 1941
Regraded Unclassified
EXHIBIT I
247
MEMORANDUM
July 11, 1941
OIL SUPPLIES AVAILABLE TO GERMANY
Heretofore estimates of supplies of crude and products have
been limited to the area in Western Europe controlled or occupied by
the Germans, considering that supplies from Rumania were limited by the
mount which could be moved by barge or rail into this territory. With
the conquest of Greece and Crote end the commencement of hostilities bee
tween Germany and Russia, Germany should now be able to use, in areas
tributary to Rumanie, en: airpluses of Rumanien production and stocks
remaining over the emount which can be transported into Germeny. New
estimates, therefore, have been prepared covering German-controlled
Europe 88 B. whole; ir other words, all of Continental Europe, excluding
Russia, Spain end Portugal but including Italy. No attempt has been
made to segregate between crude and separate petroleum products, B.8 it
is believed that with the relatively high grevity crudes available, when
considering the flexibility afforded by both the available refineries
end hydrogenation plants, Germany will be able to control distribution
of products made to meet their requirements, al though this may be limited
in specific areas by transportation facilities.
It should be emphasized that, as before, no attempt has been
mode to ollow for damages to facilities and stocks resulting from air
raids. Ourrent conditions have greatly increased the potentislities in
this direction. The attached detailed maximum estimates, and possible
minimums, may be summarized as follows:
Bbla. 42's
Last Half of 1941
SUPPLIES
Minimum
Maximum
Crude Oil Production
27,180,000
31,305,000
Natural Gaseline, Benzol, etc.
3,300,000
3,910,000
Synthetic Oil
13,000,000
16,090,000
Total Domestic Supplies
43,480,000
51,305,000
Monthly Average
7,247,000
8,551,000
Average Minimum & Maximum (Monthly Average) 7,899,000
The minimum and maximum estimates indicate the range within which
it is thought the probable picture for the remainder of 1941 will fall.
The meximum e stimate of crude oil production includes Rumanie at 112,000 B/D
and Germany end annexed territory at 41,000 B/D, which estimates have been
checked with the Producing people. The gures for natural gasoline, benzol
end alcohol are 28% and 15% lower, respectively, than the estimated
equivalent 1939 supplies, on the assumption that part of the benzol and
248
- 2 -
alcohol supplies have been diverted from motor fuel use to industrial
use. Recent studies have indicated that German production of synthetic
oil for the remainder of this year may reach en averege of 87,000 B/D.
Imports from Russie, previously estimated at approximately 20,000 B/D,
have, of course, been excluded,
It is felt that the above estimates of supplies, before
consideration of any loss through destruction, are fairly reliable, but
any estimates of available stocks or rate of consumption, are of course
speculetive. Due to restriction of civilian consumption, it is quite
possible that to date Germany has actually added to stocks. After
allowing for possible additional drafts on storage, principally in
unoccupied France and Italy during the first six months of 1941, car best
guess 18 that, as of July 1st of this year, stocks in Continental Europe,
as above defined, were about 46,000,000 barrels. Normal pre-war demand
throughput the same area, excluding foreign trade fuel oil bunkers, was
approximately 189,000,000 barrels B. year, or 15,700,000 barrels a month.
If present demend were at this figure, when considering the above average
production rate, stocks would be exhausted in four months, after allowing
for irreducible minimum stocks of 15,000,000 barrels. In view of civilien
rationing, however, it 18 probable that total consumption in the area
including civilian, industrial and military, is at B. much lower average
rate then this figure, It is estimated that if civilien and war industry
requirements were reduced to a minimum of 25% of normal demand in the
occupied countries, and 50% in Germany and Italy, these requirements would
total 38,000,000 barrels for the last half of 1941, which is 40% of the
overall average normal consumption. Using this estimate of civilian and
industrial demend and the average of the maximum and minimum production
estimates, 51,000 B/D would be available for military consumption without
drawing on stocks. Considering 15,000,000 barrels as en irreducible
stock minimum it would be possible to support a military requirement of
100,000 B/D for 21 months or a 200,000 B/D requirement for 7 months before
stocks would be lowered to the minimum.
Others dealing with this question are doubtless better qualified
to estimate military quantities. Obvioualy the duration and intensity
of the present conflict between Germany and Russia will be the most importanj
factor, While Germany is occupied with Ruosia, aerial destruction of
facilities in Rumania and in Western Europe may be more effective in
reducing supplies.
Regraded Unclassified
249
CONTINENTAL EUROPE, EXCLUDING RUSSIA, SPAIN & PORTUGAL
ESTIMATED DOMESTIC SUPPLIES - CRUDE & PRODUCTS
LAST HALF OF 1941
Barrels 42's
Cruie 011
Natural Gesoline
Total
Production
Benzol & Alcohol
Synthe till o 011
Domestic
Supplies
Country
Minimum
Maximim
Minimum
Maximum
Minimum
Maximum
Minimum
Maximum
Albania
1,000,000
1,100,000
-
-
-
-
1,000,000
1,100,000
Belgium
-
-
75,000
75,000
-
-
75,000
75,000
Bulgaria
-
-
-
-
-
-
-
-
Denmark
-
-
-
-
-
-
-
-
Finland
-
-
5,000
5,000
-
-
5,000
5,000
France
-
-
500,000
500,000
90,000
90,000
590,000
590,000
Germany
5,890,000
7,500,000
1,495,000
2,000,000
12,910,000
16,000,000
20,295,000
25,500,000
Greece
-
-
-
-
-
-
-
-
Hungary
1,750,000
2,015,000
75,000
80,000
-
-
1,825,000
2,095,000
Italy
40,000
40,000
25,000
25,000
-
-
65,000
65,000
Netherlands
-
-
35,000
35,000
-
-
35,000
35,000
Norway
-
-
-
-
-
-
-
-
Rumanie
18,500,000
20,650,000
1,000,000
1,100,000
-
-
19,5001000
21,750,000
Sweden
-
-
75,000
75,000
-
-
75,000
75,000
Switzerland
-
-
15,000
15,000
-
-
15,000
15,000
Yugoslavia
-
-
-
-
-
-
-
-
Totals
27,180,000
31,305,000
3,300,000
3,910,000
13,000,000
16,090,000
43,480,000
51,305,000
Daily Average
147,717
170,135
17,935
21,250
70,652
87,446
256,304
278,831
July 11, 1941
Regraded Unclassifi
!lovember 27, 1941
250
EXHIBIT 2
ESTIMATED LUBRICATING OIL SUPPLIES
Scotipental Europe, Excluding Russia, Spain and Portugal
Estimates of lubricating oil supplies in Cermany and occupied
doe the years 1940 and 1941 are shown in the attached table. It will be
smed West total sup lies are estimated for 1940 at 3,535,000 barrels end 1941
burrels. For purposes of comparison the normal poucetime demand
1:00 LIMS is approximately 5,000,000 barrels.
According to a recent survey, Germany's probable production of
ofi from hydro end synthesis processes will increase to about
1,310,000 carrels in 1941. This probability, LB well as the progressive en-
of to area under cerman control and assumed higher quantities of
crusse evallable for refining, suggested the desirability of attempting
:- astimate the 1941 situation. this was done in the attached tabulation. The
D!! which the estimates are based Rill be given in some detail in
order to judre their tenability.
"argany and Annexed Areus
Cerrany's major crude oil producing area lies in the Province of
Denovar and includes such fielda 35 Mienhagen, Wistz, Obers, Reitbrook, Rodeweld
al jicklingen. with the exception of the Reitbrook and Rodewald fields, which
LTY of the naphthene=base low cold teat type, the cručes produced in this
wither province of Garmany are largely of the intermsdiate-base type, similar
3 the 1d-Continent crudes of the United States which have potential lube yields
of 60, or ΓoΓa. A survey was made of the estimated production and quality of the
crudes by fields from the standpoint of lubricating oil production,
metts into consideration the location and rated capacity of the solvent extrac-
tion and solvent dewaxing plants .nown to have been installed in Germany and the
cinexed areas. The study indicated that refinery output of lubricating oils in
HE night be 2,400,000 barrels, representing e yield of 16% on runs of 13,000,000
credit of damestic crude, plus yields of 150,000 barrels and 210,000 barrels from
Deported Rumanian end Sungarian crude, respectively. Rumania exported 1,577,000
currela of crude to Germany in 1940 from which it was assumed that 160,000 barrels
<< Lubricating oil was produced. Although Rusander petroleus skipments to Germany
La 1941 are expected to increase materially over 1940, it was assumed that the
juantity of crude might remain about the same. Fungurian crude production this
should exceed domestic requirements by about 1,500,000 barrela and It was
custured that this quantity will be handled in Germen plants, yielding 145 of Tube
Pli.
et ceters output was estimated at 1,750,000 barrels.
Importa represent assumed r ceipts from Russie.
Stocks of lubricating oil on December 01, 1935 were astimated to
1 4,000,00 berdels or 45° of the gro-war demand,
Regraded Unclassified
- 2 .
251
Balance Continental Europe, Excluding Russia, Spain and Portugal
All of these estimates are based on the assumption that Germany
sequired effective control of the entire area as of July 1, 1940, It was
assumed that the quantities which were produced, imported, and consumed by
these countries in the first half of 1940 were practically in balance, leaving
stocks on hand June 30th of about 3,000,000 bardels or 55% of the prewwar demand,
Refinery output of 500,000 barrels for the second half of 1940 was
based on actual figures for Rumania, amounting to 275,000 barrels, estimated
production in Hungary, and from remaining crude stocks in France and other
occupied countries. However, production during the entire year 1941 was
estimated at only 600,000 barrels on the assumption that crude stocks in the
occupied countries were exhausted by the end of 1940.
In preparing these estimates no allowance whatever has been made
for the effect of air raid damage upon productive capacity; neither has allowance
been made for supplies obtained from reclaiming used lubricating oils,
Tables are also attached showing the detail of production data on
which these estimates are based and information as to location and capacity of
the various sources of supply.
Regraded Unclassified
252
ESTIMATED LUBRICATION OIL SUPPLIES
43'6
1940
1941
to Lanexed treas
of:bary Output
2,060,000
2,440,000
et cotera Output
675,000
1,750,000
Buarta
300,000
100,000
Total Supply
5,035,000
4,290,000
Salance Continent Europe
Lust 6 Mos.
excluding Russia, Spain & Portugal
1940
Refinery Output
500,000
600,000
Tydeo., et cetera output
-
-
-
-
Total Supply
500,000
600,000
Continantal surone
excluding Russia, Spain & Portugal
1940*
2,580,000
3,040,000
at catera output
675,000
1,750,000
300,000
100,000
Total Supply
3,533,000
4,890,000
Including only the second half of 1940 for countries other than Germany end
annexed areas,
12/27/41
Regraded Unclassified
253
TABLE I
DATA ON INSTALLED CAPACITY IN CONTINENTAL HIROPS
OF
SOLVENT EXTRACTION AND SOLVENT DEWAKING PLANTS
Charge Capatity
Selvent
Selvent
Intraction
Dewarding
GIRMANT
Goverk Ilverath (Nerag)
-
Misburg
1,700 Purfural
1,200 Kotone
Vintershall A.G.
Durcheats
500 Phenol
930 Propare
Destache Vacum 011
Brensa
1,000 Due Sol
525 Kotono
Rhenania (Shall)
Humburg
1,500/1.750 302-Bannel
1,200 Ketone
Braunkohlen Bensin
Deahlem
3,700 Propase
Total
5,000/5,250 B/D
7.555 B/D
ITALY
Aguila
- Triesto
1,000 Dec Sol
300/450 50,-Densof
011 Company SAI
Exples
750 Due Sel
525 Kelone
Agails
Trieste
700 90₂ only
Total
2,450 B/D
825/975 B/D
FRANCE
S.F. de P.
- Port Jerume
3.500 Phonel
1,000 M.
Raff. de La Tac. 011 Co.
Port Jereme
750 Due Sel
500 Ketone
S.R. de R. de P.
Courchelettes
450 902-Bensol
2. de P. du Nord
Deakirk
500 Ketone
Total
4,700 m/D
2,000 B/D
ROUMANIA
Vacum 011 Co. SADE
- Branov
100 Purfural
100 Zetons
POLAND
Tessue 011 Co.
- Osechovies
350 Chlorex
Regraded Unclassified
254
TABLE II
NON-SOLVENT EXTRACTED LUBRICATING OIL CAPACITY - GERMAN PLANTS
Conventional
Lubricating Oils Manufactured
Devering
Feed Stock
Refinery
Againment
Grades
Teas/Yr.
German Crude
Deateshe Tesum 011, Brenen
Yes
All kinds
5,000 .
Caseleine Dollbergen
Yes
Spindle, engine, cylinder, azie oils
18,000
DPAG, Harbarg
Tes
Same as above, plus turbine a transfermer oils
37,000
Brang (Waiterhall), Salsbergen No
Spindle, engine, azle sils
6,000
Schriedler, Heaturg
Be
Spindle, axle, steam sylinder
12,000
Others
6,900
Total on German Orade
87,900
Imported Stocks:
Mezisan Cruño These Refinery
No
Lube distillate
5,000
Toypod Tene- (Shell, Monhein
No
Spindle, engine, cylinder, arle oils
$5,000
suelan
(Shell, Harburg
No
Spindle, engine, cylinder, azie oils
102,900
Orade
(Gasoleine Imerich
No
Spindle, engine, cylinder, azle eils
13,000
Bussian Solar Schriedler, Kamburg
No
White, transfermer, turbine eils
7,000
(Schliemann, Harburg
No
White oils and spindles
11,000
Total on Imported Steeks
223,900
. Represents difference between total reported especity of 26,000 tons/yr. and estimated production of
selvent-treated lube oils of 15,000 tens/yr.
Regraded Unclassi
255
TABLE III
POTENTIAL LUBE OIL PRODUCTION FROM INDIGNANOUS CRUDES
Crude 011 Production
Estimated Lubo Production
Estimate for 1940
Yield Bbls/Tr. Tons/Ir. Quality
Bble(42's)
Field
2,300,000
24.0
550,000
78,500
Extr.te High 4.
leahagen
icklinger
250,000
300,000
18.0
55,000
7,800
Lev Grade
lets
100,000
15.0
15,000
2,200
Extr.te Righ que.
berg
desss-Celheim
45,000
clone
75,000
3,500,000
24.0
lestbrook
$40,000
120,000
L.C.T. oils
todewald
250,000
24.0
60,000
8,500
L.C.T. oils
ther Hanover
50,000
side
220,000
den
100,000
ther Areas
-
old Germany
7,190,000
1,520,000
217,000
netria
2,380,000
140,000
20,000
L.C.T. oils 7
sechoslovakia
500,000*
24.0
120,000
17,000
L.C.T. oils 7
erman Poland (Jaslow)
1,200,000
lluace Lerraine
(Pschlebroun
160,000
15,0
24,000
3,500
Total Greater Germany
11,430,000
1,804,000
257,500
rance
220,000
lbania
1,460,000
italy
80,000
bungary
1,950,000
14.0
270,000
39,000
Extr.te High Qui
cumenia
42,740,000
Total
57,$80,000
2,074,000
296,500
. Increased from 120,000 bble. to allow for either new fields or deeper
production from existing fields.
Regraded Unclassified
Exhibit 3.
256
RUSSIA
Crude 011 Production
(Bbls. 42's Daily)
Year
1940
Baku
440,000
Grozny
45,000
Maikop
60,000
Emba
16,000
Ishembaevo, etc. (Ural Region)
44,000
Middle Asia
3,500
Neftedag (Turkmenia)
9,500
Volga Region
6,000
Sub-total
634,000
Russian Poland
6,000
Total
630,000
December 18, 1941.
Regraded Unclassified
ROSSIA
RUSSIA
Refineries
Refineries
Barrols 42's Daily
Borrels 42's Deily
Jenuary I, 1930
January 1,1936
Jenuary 1, 1959
Jenuary 1, 1938
January 1, 1939
January 1,1940
Trust
Location
Crude
Cracking
Crude
Cracking
Crude
Cracking
Crude
Crecking
Belor
Crude
224,000
9,240
Crecking
Crude
last
224,000
9,840
Cranking
280,000
23,240
269,990
22,400
Betum
55,720
$90,990
17,360
32,800
511,990
59,500
17,360
57,100
66,150
17,360
66,150
17,350
173,040
66,150
Gromy
17,560
transft
36,960
161,140
56,960
66,150
17,360
161,140
43,960
159,790
43,960
139,790
treatft
Tuapee
31,500
50,960
6,720
51,500
159,790
6,720
50,960
32,200
6,720
52,200
6,720
Makhach-Eala
3,640
38,200
6,720
32,200
Cromeft
3,640
6,720
-
-
3,640
-
8,800
-
2,800
-
Kresnador
11,900
20,300
-
Mineft
-
11,900
-
11,900
-
21,000
-
21,000
-
Yaroelavl
21,000
,
(Constantinovaky)
3,500
1,890
3,500
1,890
3,500
1,890
3,500
1,890
3,500
1,890
Nijni-Novgorod
10,500
bleasit (Varinski)
3,500
1,890
-
3,500
-
3,500
-
3,500
-
3,500
-
Orak
5,500
-
bookft
I
I
-
-
11,900
4,200
11,900
4,200
11,900
4,200
Sarator
7,000
88,000
4,800
(sotral Trust
-
-
21,000
-
28,000
-
28,000
-
35,000
-
Central Trust
Mondow
42,000
-
-
-
-
-
-
-
-
-
4,200
-
Central Trust
Odesss
6,400
I
,
-
-
-
-
-
-
-
5,250
-
5,250
Entral Trust
Eherson
-
-
-
-
-
-
-
-
-
5,250
-
Berdiansk
5,250
Trust
-
-
-
-
-
-
!
.
-
5,250
-
Georgia
4R0
5,850
Inmaft
-
480
-
420
,
420
-
420
-
450
-
Testoment
Garodki
525
-
5.25
-
585
-
525
.
525
-
500
-
for last Truel
Haberovak
-
3,500
-
3,500
4,200
3,500
4,800
3,500
4,200
3,500
4,200
3,500
issuen
Ishimbeevo
,
-
-
.
10,500
-
10,500
-
10,500
-
10,500
-
Minet
Ufa
-
-
-
-
-
-
-
-
11,200
3,500
11,800
5,500
insurent
Neftedag
-
2,800
-
2,800
4,800
2,800
4,200
8,800
4,200
2,800
7,000
2,800
Asia
Forgans Valley
-
-
-
-
-
-
-
-
1
-
*
2,800
4
TOTAL
SIA
507,745
65,470
429,525
99,470
585,775
151,670
570,675
130,830
602,875
178,080
670,075
194,180
.
Includes E few old refineries. some of which - recently been modernised.
Regraded Unclassified
EXHIBIT 4.
258
INTERNATIONAL CATALYTIC OIL PROCESSES CORPORATION
REPORT
ON
LIQUID FUEL SUPPLIES OF CONTINENTAL EUROPE
Date: May 21, 1941
Regraded Unclassified
259
TABLE OF CONTENTS
Page
1, Introduction
1
2. Summary
2
3. crude oil Supplies
3
4. Benzol and Toluol
5
5. Hydrogenstion
7
6, Hydrocarbon Synthesis Process
(Fischer-Tropsch Process)
8
7, Syntheses from Gaseous Hydrocarbons
9
B. Tetracthyl Lead (T.E.L.)
12
9. Storage.
13
TABLES
I. Summery of Liquid Fuels Production
2
II. Crude 011 Production in Europe
3
III. Refinery Capacity of Continental Europe.
6
IV. Distribution of Products from Petroleum.
5
V. Benzol Production in Continental Europe.
6
VI- Products from Hydrogenation.
7
VII. Proration of Rated Gasoline Production
of Hydro Plants
8
VIII. Products Produced by Hydrocarbon
Synthesis Process.
a
IX. Preferred Proration of Products from
Hydrocarbon Synthesis Process
9
X. Summary of Production by Hydrocarbon
Synthesis Process
9
XI, Non-Selective Polymerization Plants
10
XII. Potential Alkylate or Butane Production.
11
XIII. Alternate Distribution of Potential
Alkylate
12
XIV. T.Z.L. Plants in Continental Europe
12
Regraded Unclassified
260
APPENDICES
I. Abbreviations and Conversion Factors
14
II. Hydrogenation Plants
15-17
8. Maps showing locations of
synthetic plants
18
b. Plan and Views of B. Coal Hydrogen-
ation Plant - Lievin, France
19
C. Map of the Area around Leuna Works
showing Brown Coal Mines and
Leuna Plant
20
d. Map showing location of the I.G.
Works - Ludwigshafen and Oppau
...
21
e. Ground Plan of Italian Hydrogenation
Plant
22
f. Photograph of Leuna-Merseburg -
a large hydrogenation and nitrogen
fixation plant
23
III. Synthetic Hydrocarbon Synthesis Plants
(Pischer-Tropsch).
24-25
IV. Status of Polymerization Plants - Europe
As of About January 1, 1940
26-27
261
1.
1. INTRODUCTION
At estimate 18 presented of the production of liquid
fuels in Continental Europe with E. breakdown into the most 1m-
portant products: aviation gasoline, motor gasoline, light
diesel [tel and heavy fuel. Allied products, lubricating oils,
bonzol and tolucl are also estimated,
The distribution of liquid fusls among the various
cotegories 19 flexible and CALL be varied considerably to meet
The figures herein presented are predicated on the
product cualities the are believed to prevail and are AS
follows:
Wistion Canoline
Aviation gasoline quality is that specified just prior
01 the wer although the Luftwafte is reported to use somewhat
Inforior quality. The base fuel is a saturated product of boil-
the range 50 -185° C., with an A.S.T.N. Octune Number (O.N.) of
72-74 which is increeand to 87 0.11. with tetraethyl lead (T.E.L.)-
Tue main source of aviation fuel is Indicated to be the hydro-
genation plants supplymented by anall production from selected
Roumenier crude oils and possibly benzol.
Notor Gesoline
Notor gasoline supplies and quality are believed to
be secrificed for the production of aviation gssoline, on the
are hand, and a satisfactory fuel for high speed diesels, on
the other It is takon to be a 56-68 O.K. product and composed
largely of cracked gasoline.
Light Messl Fuel
There is a relatively large demand for light diesel
Tuol for the operation of trucks, buses and other heavy land
equipment, Especially important are the fuels for submarines
MSS & considerable number of long range bonbers end transport
planee that are powered by diesels. The light diesel fuel cor-
responde roughly to 11,mt gas oil which occurs in amount from
23-50% 00 -/10 available crude cila and is niso produced in
United Diounts in the various synthetic phanes
Regraded Unclassified
262
2.
Heavy Fuel
Heavy fuel includes the heavy diesel and Bunker fuels
required in marine service and stationary diesel engine plants.
Lubricating 011s
Europe produced only inferior grades of lubricating
oils prior to the war, but extensive research work in Germany
has supplemented this supply with high-grade synthetic products
which are made from waxes and/or cracked gases, Other raw
materials for synthesizing high-grade lubricants are fish oils
and vegetable oils. The amount of synthetic lubricants is very
uncertain for the reason that the raw materials are otherwise
required for edible fats, synthetic rubber or premium aviation
fuel. A separate section of this report deals with these raw
materials for these alternate consumptions.
Benzol and Toluol
Benzol and Toluol are major raw materials for munitions
production and are by-products of steel production. Toluol is
the essential for munitions and in Germany large quantities of
benzol are converted to toluol by alkylation with methanol.
Benzol is also a good blending agent for aviation fuels. Only
a limited anount of benzol may be added to aviation gasoline
because of the freezing point. In normal times large quantities
of benzol are used in motor gasoline.
2. SUMMARY
The various products are estimated to be produced in
the following amounts.
TABLE I
B/D"
T/Yr.*
Aviation Gasoline (87 O.N.)
50,000
2,125,000
Motor Gasoline
68,000
2,900,000
Light Diesel Fuel
96,000
4,343,000
Beavy Puel
30,000
1,700,000
Lubricating 011s and/or Waxes
13,000
640,000
Bensol and Toluol
17,000
835,000
Liquefiable Gases
34,000
1,100,000
TOTAL
308,000
13,643,000
#
B/D - Sarrels (42 gallons) per day.
T/Yr. - Metric Tons per year.
For conversion factor aee Appendix I.
Regraded Unclassified
263
3.
Succeeding sections discuss the various sources of these
materials.
3. CRUDE OIL SUPPLIES
The petroleum supplies of Continental Europe (and
outside of U.S.S.R.) are estimated at 1939 production of
55,000,000 barrels/year (B/Yr.) (7,500,000 metric tons) dis-
tributed as indicated in Table II. These crudes are predominantly
of the mixed base paraffinic type that produce both low grade
gasoline and lubricating oils but a good grade of diesel oil.
There is a small production in Roumania of aviation gasoline
of 74 O.N. which is increased to 87 O.N. with T.E.L.
TABLE II
CRUDE OIL PRODUCTION IN EUROPE
T/Yr.
1939
1940
Germany (including Poland,
Austria and Czechoslovakia)
1,045,000
1,114,000
France
67,000
67,000
Hungary
147,000
275,000
Italy (including Albania)
143,000
188,000
Roumania
6,357,000
5,920,000
TOTAL
7,759,000
7,564,000
The refineries in Continental Europe have a rated
capacity in excess of that required to refine this crude. Muoh
of this equipment was obsolete but there are rumors to the ef-
fect that considerable new construction has been installed just
Regraded Unclassified
264
4.
TABLE III
REFINERY CAPACITY OF CONTINENTAL EUROPE
No. of
Daily Crude
Daily Cracking
Refineries
Capacity - B/D
Capacity - B/D#
Belgium
7
12,175
2,300
Denmark
1
500
-
France
19
151,500
72,900
Germany
47
68,770
7,920
Hungary
7
11,670
350
Italy
10
57,300
28,600
Netherlands
1
15,000
12,500
Norway
1
1,200
-
Poland
19
23,050
2,300
Roumania
48
224,200
49,200
Yugoslavia
3
4,800
-
163
570,165
176,070
« Conversion Factor: Barrels/day X 50 = metric tons/year.
Source: 011 & Gas Journal, 12/26/40, P. 56.
265
5.
prior to and during the war. The distribution of products
produced from this crude oil is estimated to be as follows:
TABLE IV
B/D
T/Yr.
Aviation Gasoline (74 O.N.)
3,000
125,000
Motor Gasoline (66-68 O.N.)
55,000
2,350,000
Light Diesel Fuel
60,000
3,000,000
Heavy Fuel
30,000
1,700,000
Lubricating Oils
3,000
160,000
TOTAL
151,000
7,335,000
4. BENZOL AND TOLUOL
Benzol and Toluol are by-products from the production
of metallurgical coke which is so essential for steel production.
Toluol is a basic raw material for explosives and is produced to
the amount of 12-20% of the benzol production. When toluol
shortages exist, the German chemical industry has made it from
benzol by alkylation with methanol. Consequently, any fraction
of benzol production may be diverted to explosives, the re-
mainder being consumed in aviation or motor fuel. Benzol has
been widely used as a blending agent in aviation fuel, but the
amount cannot exceed about 12% of the fuel without potential
trouble from the benzol freezing out at flying temperatures.
The indicated production of benzol is at least equal
to the largest production in each country prior to the war and
is of the order of 835,000 tons which may be broken down into
700,000 tons of benzol and 135,000 tons of toluol.
Along with benzol production, there is about seven
times as much coal tar (5,000,000 T/Yr.) which yields many raw
materials for the chemical industry and more than adequate supply
of tar for raw material for hydrogenation plants. Considerable
coal tar may be worked up by distillation for road tar and heavy
diesel fuel but such production is not included in this estimate.
Regraded Unclassified
266.
TABLE V
BENZOL PRODUCTION
Best Yearly Production*
Germany
540,000
(1938)
France
78,000
(1931)
Belgium
41,000
(1935)
Holland
27,200
(1935)
Czechoslovakia
33,000
(1937)
Poland
23,700
(1935)
Austria
7,044
(1934)
Italy
13,253
(1937)
Denmark
683
(1936-37)
Yugoslavia
69,793
(1933)
Hungary
1,881
(1936)
TOTAL
835,554
" Metric Tons.
267
7.
5. HYDROGENATION
The major supply of aviation fuels is produced in the
hydrogenation plants, of which there are seventeen. Hydro
aviation gasoline is & stable, saturated product of about
74-76 O.N., reaching 87 O.N. with T.E.L. The hydro plants are
quite flexible in that they can produce aviation gasoline, motor
gasoline, diesel oil and light lubricating oils, The two main
sources of raw material are bituminous coal and brown coal or
lignite. The major production comes from the tars produced by
the distillation of the raw materials although some of the hydro
plants are designed to treat the coal directly without prior
distillation. There is a consumption of energy in operating
these plants equivalent to about three tons of coal per ton of
gasoline produced. This and the demand for large quantities of
fresh cooling water restrict the location of these plants to
coal regions that are also close to rivers with adequate fresh
water supply. The hydro plants and their locations are shown
in Appendix II. The indicated production in hydrogenation plants
is as follows:
TABLE VI
Products from Hydrogenation
Lubricating
Gasoline
Diesel Oil
Oils
German Plants
Bituminous Coal and
Bituminous Coal Tar
1,195,000
235,000
-
Brown Coal and
Brown Coal Tar
1,370,000
540,000
170,000
Italian Plants
Albanian Crude 011
250,000
-
-
French Plants
Bituminous Coal
20,000
-
I
TOTAL
2,835,000
775,000
170,000
Regraded Unclassified
268
8.
The aforementioned figures represent the rated capac-
ities of these plants, and gesoline refers to motor quality.
In the final estimate the rated production of hydro gasoline
has been redistributed to allow for maximum aviation gasoline
production as follows:
TABLE VII
Proration of Rated Gasoline Production of Hydro Plants
T/Yr.
Aviation Gasoline (80%)
2,268,000
Diesel Fuel
(10%)
283,000
Liquefiable Gases (10%)
284,000
TOTAL 2,835,000
In addition to the above-rated capacity of the hydro-
genation plants, there 1s a large production of liquefiable
gases that has been widely used as omnibus and truck fuel. This
material may be processed to produce either premium aviation
fuel, synthetic lubricants or synthetic rubber, but no inform-
ation is available on such syntheses. The liquefiable gases are
discussed in more detail in section 7.
6. HYDROCARBON SYNTHESIS PROCESS (FISCHER-TROPSCH PROCESS)
Hydrocarbon Synthesis Process, often called the
Flscher-Tropsch Process, has been built up very rapidly in
Germany. It is in the nature of a scavenger process and produces
synthetic petroleum from almost any source of combustible carbon.
The raw materials most widely used are coke, coke oven gas and
lignite coal. The product distribution 18 AS follows:
TABLE VIII
Propane and Butanes
B%
Gasoline
60%
Diesel 011s
22%
Waxes
10%
Regraded Unclassified
269
9.
The gasoline is of very low octane number and must
be cracked or reformed to produce a satisfactory motor fuel.
The propane and butane fractions, together with the liquefiable
gases from cracking, may be converted to aviation gasoline by
selective polymerization or alkylation. Alternately these
liquefiable gases and/or the wax production may be used for the
synthesis of lubricating oils. Probably the most favorable
distribution of products is attained with the combination of
cracking and polymerization processes to produce:
TABLE IX
Polymer Gasoline
13%
Cracked Gasoline
34%
Diesel Fuel
33%
Lubricating 011s
20%
While most of the plants are operated in combination with crack-
ing to produce maximum yield of gasoline, the total product is
indicated to be as follows:
TABLE X
B/D
T/Yr.
Motor Gasoline
13,000
550,000
Light Diesel Fuel
6,000
285,000
Lubricating 011s and/or Wax
3,000
155,000
TOTAL
22,000
990,000
7. SYNTHESES FROM GASEOUS HYDROCARBONS
There is associated with gasoline production by any
method a substantial production of liquefiable gases - propane
and butanes with their corresponding olefins. In the production
of aviation gasoline or in the reforming (cracking) of naphthas
to improve octane number, the yield of liquefiable gases is
substantially increased. These condensable gases are not
Regraded Unclassified
270
10.
Included in the rated capacity of synthetic plants though they
have been widely used for heavy motor transport fuel, replacing
either light diesel fuel or motor gasoline, In the last few
yours there have been developed processes for converting these
liquefiable gases to more useful products. These are:
1 - Non-Selective Polymorization which converts the
olefines (propylene and butylenes) to 82-84 O.N.
motor gasoline with about 80% yield. There are
five known plants for this process.
TABLE XI
Charging
Capacity - B/D
Roumania
Creditul Minier, Brazi
250
Germany
Krupp, A.G., Essen, Ruhr
(Hydrocarbon Synthesis)
530
Ruhrbenzin, A.G., Holten, Ruhr
(Hydrocarbon Synthesis)
900
Deurag, Misburg near Hanover
490
France
Compagnie Francaise de Raf.,
Provence
1,380
TOTAL
3,550
2 - Selective Polymerization
This process converts isobutylene and some butylene
to a polymer which is hydrogenated to iso-octanes.
This product 1a a premium aviation gasoline of
94-96 O.N. but the yield 1a substantially lower
than Non-selective Polymer Process. The non-
selective polymer plents are readily converted to
the selective process. There was one plant con-
structed at Pernis, Holland for the hydrogenation
of selected polymers to iso-octanes but this plant
probably has been either destroyed or moved to
another location. The rated capacity of this plant
was 1,000 B/D charging capacity.
Regraded Unclassified
271
3 - Alkylation is the most recently developed process
for converting condensable gases to aviation gas-
olins. This process produces a stable saturated
gasoline of 92-94 O.N. without hydrogenation. The
olefins react with isobutane to form peraffin
hydrocarbons with yields of about 160% on the ole-
fins. The process as now operated does not use
propylene because the product from reacting propylene
and isobutane is of lower octane number than re-
quired for premium aviation fuels. The butanes and
Outylenes only are used, The liquefied gases from
hydrogenation contain excess isobutane and no olefins,
This requiren a dehydrogenation process for about
half of the butanes from hydrogenation to effect
alkylation.
4 - The gaseous olefins may also be polymerized by
another process to produce either lubricating oils
or 0 synthetic rubber.
Since these processes may play an important part in the production
of materials that are deficient in Europe, the raw materials for
these processes have been estimated as "Potential Alkylate".
This figure includes an estimate of the liquefiable olefins from
esfining petroleum and from the Hydrocarbon Synthesis Process,
and the butanes produced by hydrogenation.
TABLE XII
"potential Alkylate"
T/Yr.
Prom:
Petroleum Refining
225,000
Hydrocarbon Synthesis and Cracking
133,000
Hydrogenation
750,000
TOTAL
1,108,000
Regraded Unclassified
272 12.
- effective disposition of these condensable gases must in-
Code e factor of conversion and may be estimated 88 follows:
TABLE XIII
Conversion
Material Replaced
X :
T/Yr.
sloht Blesel Fuel or Motor Gasoline
100
1,108,000
Aviation Casoline
75
830,000
Dibricating oila
67.5
750,000
synthetle Rubber
57,5
750,000
There would be B large investment required to tuild plants for
the production of aviation gasoline from condensable gases and
it is reasonable to assume that these plants will be built only
1= response to urgent need. The polymer plants are the cheapest
to build in conjunction with crecking operations and these may
be greatly expanded.
B. TETRAETHYL LEAD (T.S.L.)
Tetracthyl lead is indispensable for sviation gasoline
a-d may ba widely used in motor gasolines It is reported that
current German sviation gasoline contains 0.4% (Wts) of T-E-L-
(7 e.c./gallon) which might correspond to a consumption of
10,000 tons per year.
There were three plants in Europe prior to the WELL' for
the renufacture of T.C.L.
TABLE XIV
Country
Location
Germany
Gapel (Between Brandenburg & Rathenow)
France
Paimboeuf (Between St. Nazaire & Nantes)
Italy
Bussi (Near Pescara)
Regraded Unclassified
273
13.
9. STORAGE
The normal storage at petroleum refineries is about
three months' supply of raw materials and two-three months' sup-
ply of finished and semi-finished products. As early as 1935
the German Government requested the industry to provide a year's
storage of products. It is believed that this storage was not
generally attained and it is doubtful if storage exceeds six
months' supply, except for the most deficient products such as
premium lubricants.
It is believed that very large supplies of aviation
lubricating oils were stored just prior to the present war.
Lubricating oils are believed to be recovered after use in
aviation and automotive equipment with about 60% recovery and
at somewhat lower quality levels.
274
14.
APPENDIX I
Abbreviations
B/D - Barrels per day. One barrel 1s 159 liters,
42 U.S. gallons or 35 Imperial gallons.
T/Yr. - Metric tons (2,204 lbs.) per year.
T.E.L. - Tetraethyl Lead
O.N. - Octane Number
c.c./gal. - Cubic centimeter per U.S. gallon.
Conversion Factors
To convert B/D to T/Yr., multiply by 58 times the density
of the liquid.
For:
Aviation Gasoline multiply by 42.0 (58 X 0.715)
Motor Gasoline
19
If
42.6
Light Diesel Fuel
11
" 49.2
Heavy Fuel
=
" 57.3
Lubricating Oils
11
11 52.7
Butanes
ff
If 32.5
APPENDIX 11
SYNTHETIC OIL PLANTS - EUROPE
Hydrogenation Process
Capacity
Sito and Company
Raw Material
T/yr.
Remarks
RUHR
1. Gelsonkirchen - Solsenborg Benzin
Coal
300,000
Casoline.
A.C. (Vereinigte Stahlwerke-Thyssen)
(Bituminous)
2. Bottrop-Welhoim - (Stinnes Muhl-
Coal Extract
100,000
Casoline only.
heimer Bergwerks A.G.)
and Croosote
3. Scholven-Recklingshausen
Coal
400,000
Gasoline - rapid expansion.
Hydrierworke Scholven A.C.-Hibernia
(Bituminous)
4. Wesseling-Köln - Union Rheinische
Coal
200,000
Casoline,
Braunkohlen Kraftstoff A.O.
MIDDLE GERMANY
5, Leuns-Merseburg - I.G. Farben
Lignite and
500,000
Gasoline only.
Lignite Tar
6. Leipzig-Boenlen-Rotha - Brabag I
Lignite Tar
200,000
Gasoline only.
7. Magdeburg-Rothensee - Brabag II
Lignite Tar
200,000
Gasoline only.
B. Schwarzheide or Offleben-Voelpke -
Lignite Tar
150,000
Gasoline or Lube 011 or Gas
CL7
Brabag III
011 and Wax with small
amount of gasoline.
9. Rehmadorf-Zeita - Brabag IV
Lignite Tar
150,000
Gasoline or Lube 011 or Gas
011 and Wax with small
amount of gasoline.
Regraded Unclassifie
Capacity
Site and Company
Raw Material
T/Yr.
Remarks
IDDLE GERMANY - Continued
10. Wintershall-Geiseltal-Merseberg -
Lignite Tar
80,000
Gasoline.
Mines de Geiseltal (Mitteldeutsche
Treibstoff und Oelwerke)
ASTERN GERMANY
11. P81itz-Stettin - Hydro A.G. (I.G.,
Coal or Tar
530,000
200,000 tons Aviation Gasoline
Deutsche Gasolin, Länderbank,
95,000 tons Motor Gasoline
Delbruck Schickler)
235,000 tons Diesel oil
12. Brüx - Sudetenländische Bergbau A.G.
Lignite Tar
600,000
Gas 011 - little Gasoline.
(May not be complete by
December 1941.)
13. Bleichhammer - Oberschlesische
Tar
100,000
Hydrierwerke (I.G.)
TALY
14. Bari
Albanian
125,000
Gasoline.
Crude
15. Leghorn
Crude
125,000
Gasoline.
276
16.
Regraded Uncla
Capacity
Site and Company
Raw Material
T/Yr.
Remarks
FRANCE
16. Bethune
Tar
10,000
Gasoline.
17. Lievin
Tar
10,000
Gasoline.
TOTAL
3,780,000
17.
277
Regraded Unclas
Deck
break
Dattem
Hames
pulle
725
Reading
Wat:
trop
Waste)
Pelien
Gladbock
Brom
Dinsisten
Must
theirpo
7
handled
£
23
57
8
6
Consn
Most
Castrol
Kemde
Client
2
Постор
/
Drine
Thirch
235
united
Kemp/
WEE
Esman
KCH
DORTMD.
derha
Maring
When
jume
Insural
1
1
files
Health
logkers
Mörs
Signature
Assein
Nnea mards
Buparich
224
CHUM
dertied
940rde
Viuva
a
233
-
Autom
HOME
10gh.
leter
Frönden-
work
trop
22610
lists
834
Steele
officing
soving
-
Righter
Kalden
57,Then
Modes
Witten
Chirde
Shiep
MUNIUM.
288
General
Brock
Sallings
has
Medrodg
han
-
226
a
Mennen
Huis
Trans
4
2
19
and
25A
b
den
income
=
Ergate
MI
Summem
dendring-
788
die
236
40
17
sem
Tetrwig
222
255
233
Symptom
are
16
Beckup
Herter.
hair
PAYMENT
Velbert
TORIL
HAGEN-
Jaorichn
Lank
schold
Devich
31
Officer
was
Union
5
Pischain
Latum
lonis
8
Grine
Herigne
Wasting
Which
distrumps
worth
helde
M.Hamg/
Hehenllabig
1800
Retingen
51
-
328
Date
10
Gerghbo
54
8
37
their
Torde
Evingneg
derive
which will
Bode
Musser
WUPRER-
Dahl
withing!
-
Schiefbanc
rich
-
Schwolm
-
weres
229
-
nn
7+
7
Añona
?
S
bin
10
APP
Oahle
A
Neueers
Metimann
India
Hulscheld
-
Attend
12
2
Oa
Komchen
DUSSELDF
Mardobi
S
Scholled
will
452
$
1
heydt
OR
Graf-
Commer
54
Diahn
Hass
/ain
MAO
8
Hilden
REMSCHEID
Redeysis
Brugger
illdenscheld
schrt
udemm
Grüne
Platten.
$
deniche
-
Benrath
8
15
Haleer
54
-
Alarwag
S
4%
Hufnghws
Lenhing
Delrath
Detailed
OLINGEN
237
à
/
/
Lorks
00
Increase
-
Hgt
3
2
-
-
b
-
nisa
D
Born
12
larned
no
Muckeregn
Volime
MI
knote
9
*Wassertune
E
Nonentrop
Receipt
3
10
Fisan
Sirapo Dormal
elchion
=
237
Elempe
Garlen
8
filigery
Cominn
Wibper
Klüppelbg
5
lamghing
Allendurh
fürfor
Check
-51
Dohr
Sraitien
Opis
-
180msahl
4
Worringen
tommais
Sunghas
Marian
Margan
Roggendjo
54
Hynta
Disternohi
7-PT
278
behn
kenn
e
e =
B
5
Gimbam
!
KIN
Merks
Surgen
Indi 4°)
without
Siommain
DD
MSOF
Scheicen
59
Official
-
ML
Lenien
Siecha
-
Pvtr
Pulhm Leverkusen
Herwing
Karseiky
oct,
-
12
Spriliz
Gummers-brk
they
Splite
55
Welschee
Do Geveno
Dan-
,
make
Memscheld
sched
EAMA
Aubem
Lindler
ledbch
E
Drais
Maryhm
O'Harken
Brauwit
Englis
(rath
Derechteg
ngn
WM
1
45
2
distrate
/
Allenben
is
Qualish
55
DATE
5
Nne
KOW
Brink
lenstig
tooper
31
alogie
Diaringhtn
256ml
Geningen
I
dorrea
Meridi
-
E
6
-
Forght
Wishi
e
Wanden
Singf
Sivereth
Disbender
of
Clums
nung*
home
Obereient
lair
Marc
the
31
U
Naver
56
Marimpare
38
use
$
19th
50
Parto
Dem
*wildbg
20
perk
lossalh
Hunto
Wani.
34
Much
japan
È
(1)
lisitnm
Barkhan
Non
Surip
15
(mm/dd/yyyy)
- Anstrage
No.
8a
teld
et
Gold
1
Wahn
Dept)
schold
has,
GymnicAD
water Mains
sivek
Waldbre
f
Trep/
to
M
13
9-bc
ren
265
Beirdi
Restering
Sevienpez
Morsbach
1
Spich
the
E
hello
left
not
10
L
MP
Regraded Unclassified
Jachenich
5
MM
libler
levelh
náme
56
256
Miniesi
Volparhin
1F
Oradhs?
55
without
17
J/N
require
schold
nm
Mariand
surre
Roybech
16
Wisson
work
37
Nell-
%
Nieder
diriner
feid
Eirchen
a
ward
51
Rusp
Vision
Marchen
Balchend
59
Gaise
Titad
Heid
e
Hamin
wind
Reimain
MP
With
Reman
licen
-
Due
Breitsmela
dicamism
Gebhard
à
10
Bunk
any
Keene
hairt
Biendy
NIDULE GERMANY
Schnering
AMBURO
MR
11
LEMBERS:
VINI
K
45,
Regraded Unclassified
18-b
279
1.6
11
in
if
10
1/2"
17
I'M
Le
if
to
-
will
E
B
7
10
5
Regraded Unclassified
that
THA
5
SIDES
Preilires
Product
Maktows
§
G
/
Tealife
Villa
5-1
22
Programal
HOHEMIA
(GERMAN VIIIT)
M
harlshed
GERMANY
-
Southweatern Part
Commons, by ca D. "
HASPFULL
&
-
Five
%
main-
K.
-
- et street . - -
Farth
also - - -
I
11-:
280
Kallas
-
IC
=
XX
Glainics
BOHEM
1
(GERMAN main)
M
dister
1
Regraded Unclassified
21 is m . 22
M
24
Item of - 20
18-d
a
A
P
R
o
2S1
CONCIERGE
I
[PORTER]
SURERUA
2
(offices)
GAZOMETRE
3
(GASHOLDER)
SERVICES GEHERAUX
4
CORNERAL SERVICES)
CHRUFFERIE
5
(BOILER HOUSE)
BRINS DOUCHES
6
(BATHS AND SHOWERS)
PREPARATION LT POMPAGE DES PRODUITS
7
(PREPARATION AND PUMPING OF PASTE)
HYDROGENATION
8
(STALLS)
REFRIGERANT
9
(COOLERS)
STOCKAGE MUILES
10
(STORAGE OF OILS)
STOCKAGE PRODUITS BRUTS
II
(STORAGE OF naw PRODUCTS)
FRACTIONNEMENT
12
(DISTILLATION)
RAFFINAGE
13
(REFINING)
STOCKAGE ESSENCES
14
(STORAGE OF FINISHED PRODUCTS)
EXPEDITION DES ESSENCES
44
(TRANSPORT OF FIRISHED)
19-a
(PRODUCTS)
282
12
10
ARRIVER ou CHARBON
(ARRIVAL OF COAL)
9
7
8
5
4
2
3
&
ENTRÉE DE L'USINE
(INTRANCE TO THE PLANT)
3
ARRIVEE DEL' HYDROGINE
(RRRIVEL OF HYDROGEN)
FIG.3
(PRACTICALLY INDENTICAL WITH MEM. CIV. PAGE 747)
PLAN OF THE LIEVIN PLANT
(HANDED TO "CI")
1/2000
Regraded Unclassified
COAL INTAKE, PASTE PRODUCTION
HYBROLLS 111
BOILLA *OUTH
-
WORKMENT BATHO
STATE (REACTION VESSEL!!)
STORAGE OF ChL5 IMUDICE
INSTALLATION FUR THE
AND HEAVY?)
DERIFICATION or CYCLE
STORAGE OF CRUDE PRODUCTS
gas
MAINTENANCE BUILDING
DISTILLATION
EDVAL ROOM
REFINING
UP NONE
FINISHED GASOLINE
STORAGE AND DISPATCH
Yes generale de Pusine de Lievia
FIG 5a.
5C IND 37 P 165 AND MEM CIV P 754
BIRDS EYE. VIEW OF THE LIEVIN PLANT
STACKS OF
PIPE STILLS
PUMP HOUSE
REVIEWANCE BUILDING
OFFICES
of CAGDE PRODUCTS
GAS PURIFICATION
-i 03 WORLD)
BICYCLE STANDS
PORTERS LODGE
GASOMETER
that
NAGE AND
GENERAL SERVICE BUILDING
9-11
283
(WORKSHOP)
DILLATION
BOILER HOUSE
- INTAKE PASTE PRODUCTION
WORKMENS BATHS AND SHOWERS
RESERVE PARTS CATALYST STOCK
Fie - - Von de Pasime de Line
FIG 6a
SC IND 37 P 78
ANOTHER BIRDS EYE VIEW
STACKS JF
PIPE STILLS
COAL INTAKE PASTING
REFINING
APENANCE
DISTILLATION
FINISHED GASOLINE
STORAGE AND
DISPATCH
di CRUDE
- provide de de Lesia
FIG 7a.
SC IND 38 P 163
GENERAL VIEW OF LIEVIN PLANT
Regraded Unclassified
Regraded Unclassified
Laumplan doe - Menshurg - and der -
OR
182
21
285
Neckarau
Attrip
Debetit
$
Fineine
Brohn
benefits
Karach
.
.
Dender
Geländaberte der Forks Ladwigshajen and Oppen and due Limburgerhe/as bei Mutterstado
Limburgerhol
Forks der I.G. Ferbeninduaria in Ludmigsha/en a. Rh. M. Oppen
Von großem Erfolg begleitet waren such die Forschungen suf photographischem
Gebiete. Von Ersengnissen, die besondere Bedeutung erlangt haben, seien genennt:
Photographische Entwickler (Metol, Rodinal usw.), optische Sensibilisatoren (Pina-
obrom new.), lichtho/freie Trockenplasten (Isolarplatten), Desensibilisatoren (Pheno-
safranin, Pinakryptol Grün und Gelb), Filme und Kino-Filme (Agla, Berlin!.
Auch das Gebiet der Kunstseide wurde eingehend bearbeitet, wobei verschiedene
Verfahren sur Herstellung derselben erschlossen werden konnten.
Die deutachen Teerfarbenfahriken standen bis sum Anfang dieses Jahrhunderts
mitainander in allerschärfstem Wettbewerb. Infolge der Fülle und Größe der su be-
395
26
Ground Plan
Regraded Unclassified
B
Gesamtansicht des Ammoniakwerkes Merseburg (Leunmerke)
Regraded Unclassified
APPENDIX III
SYNTHETIC OIL PLANTS - EUROPE
Placher-Tropsch Process
Capacity
site and Company
Raw Material
T/Yr.
Remarks
RUHR
D. Oberhausen-Holter - Ruhrbenzin A.G.
Coke or Coke
70,000
See foot-note.
Oven Gas
b. Homberg/Moers-Moerbeck -
"
70,000
Gasoline only.
Rheinpreussen
C. Rauxel-Castrop - Gowerkschaft
"
80,000
Gasoline only.
Viktor (Wintershall, Kloeckner)
d. Kamen-Essen - Chemische Werke
it
50,000
Gasoline and Wax.
Essener Steinkohle A.G.
0, Wanne-Eickel - Krupp TrelbstofIwarke
11
100,000
Gasoline only. Large ex-
G.m.b.H. (Krupp)
pansion under way.
f. Dortmund - Hoesch Benzin G.m.b.H.
"
50,000
Gasoline and Wax.
(Vereinigte Stahlwerks, Hoesch-
Koln-Neuesson A.G.)
B. Sterkrade-Bottrop, near Oberhausen
H
50,000
h. Easen - Krupp Treibstoffwerk G.m.b.H.
"
100,000
Large expansion under way.
(Krupp)
1. Dortmund - Hoesch Benzin G.m.b,H. II
If
50,000
Gasoline.
Regraded Unclassified
Capacity
Site and Company
Raw Material
T/Yr.
Remarks
MIDDLE GERMANY
J - Seftenburg-Ruhland - Brabag
Lignite
200,000
See foot-note.
k. Lutzkendorf-Mücheln-Krumpa -
Coke or Coke
100,000
See foot-note. Large 6X-
Mitteldeutsche Treibstoff u.
Oven Gas
pansion under way.
Oelwerke A.G. (Wintershall)
EASTERN GERMANY
1. Gleiwitz-Deschowitz - Schaff-
#
50,000
Gasoline and Wax.
gottsch'sche Benzin G.m.b.H.
SAAR
m. Lintfort-Camperbusch - Benzin-
If
20,000
Gasoline.
fabrik A.B.C. (de Wendel)
FRANCE
n. Courrieres, S. A. Kuhlman
Coke
30,000
Mostly gas oil, some gasoline.
TOTAL
1,020,000
Foot-note:
30% - Lube 011
15% - Gasoline
50% - Gas 011
25.
5% - Wax
289
290
26.
APPENDIX IV
STATUS OF POLYMERIZATION PLANTS - EUROPE
AS OF ABOUT JANUARY 1, 1940
1 - Compagnie Francaise de Raf., Provence
Type
- One Non-selective Polymerization Unit also
designed for selective operation.
Contractor - Arthur G. McKee & Company
Status
- Believed operating - completion date unknown.
Capacity - 1380 barrels/stream day liquid charge.
2 - Compagnie Francaise de Raf., Normandie
Type
- One Non-selective Polymerization Unit also
designed for selective operation.
Contractor - The Lummus Company
Status
- This unit was never built as all materials
had not been shipped prior to invasion of
France. A low pressure Hydrogenation Unit
was also designed for this refinery to
handle both the material from the Normandie
and Provence units. However, this unit was
never built.
Capacity -
3 - Deurag, Misburg bei Hanover, Germany
Type
- One Non-selective Polymerization Unit.
Contractor - None.
Status
- Believed operating although completion date
unknown.
Capacity - 490 barrels/stream day liquid charge.
4 - Krupp, A.G., Essen, Germany
Type
- One Non-selective Polymerization Unit.
Contractor - None.
Status
- Operating.
Capacity - 530 barrels/stream day liquid charge.
291
27.
5 - Ruhrbenzin, A.G., Holten, Germany
Type
- One Non-selective Polymerization Unit.
Contractor - None.
Status
- Operating.
Capacity - 900 barrels/stream day liquid charge.
6 - Bataafsche, Pernis
Type
- One Selective Polymerization Unit, to-
gether with a Hydrogenation Unit for
conversion to 1so-octanes.
Contractor -
Status
- Believed Operating.
Capacity - 1,000 barrels/stream day liquid charge.
292
STANDARD OIL COMPANY
(Incumpunered in
DO ROCREFELLER PLAZA
ROOM EGGT
SADLEN
NEW YORK December 13, 1941
CONFIDENTIAL
Y. Bry White,
Assistant to the Secretary of the Treasury.
Treasury Department.
Mashipston, D. C.
int Kr. Thite:
I have gone over the memoranda sent you yesterday covering oil
in Japan, Aria end Coeania: and, in this connection, also con-
tim that the figures given on crude cil production in the verious areas
177 argbably quite dependable.
I notice in the memorandum that Japaness refineries are said to pro-
= everoximately L1% of the product requirements. My information of n
year or two Ago was that the Japanese market was supplied 73% in the form
of trude and 27% in the form of products, so that I would have used D. sub-
Misnit-Tly higher figure for the capacity of Japanese refineries.
This gatter 1s important because the most vulnerable part of the oil
from A sabotage or bombing standpoint, is the manufacturing plants.
or course, in some cases, transportation is difficult or terresible, as is
"OF the CHAS in Japan, but the utilization of crude stocks depends on 7-
financies and they are particularly vulnerable.
On Page 3 of the memorandum the importe into Japan are listed for an
*leven year period. Up to 1932 it is evident that little storage was being
accumulated. Taking, therefore, the eight years subsequent to 1932, the
import= total 280 million barrels, or at the rate of 35 million berrela a
years, If consumption had been held down to 20 million barrels a year from
1932 on, accumulation would have been possible at the rate of 15 million
barrele 1 year, or 120 million barrels. Undoubtedly, local consumption was
there than 20 million barrels a year but it would neem obvious from en
anlysis of these figures, that aggregate accumulation could have been greater
than 40 million barrels.
Vv own reaction to the statement on Page 4 that the estimated minimum
civilina and industrial requirement would be 1,250,000 barrels of month, is
that,under severe restriction, this minimum could :e lower.
You will appreciate, of course, that in the analysis given, consumption
! Igures are merely assumed; end ay own personal opinion 18 perhaps even less
*>rthy of consideration than those in the memorandum. I only give them as the
strult of our obnervations in veriour Buronean countries on which we have had
during the course of the present war,
MS.MVV
Sincerely your
E. J. SADLER
Regraded Unclassified
293
1-J
JAPAN, ASIA AND OCEANIA
The attached exhibite (1) and (2) are mape of Asia and
Oceania which, together with Tables 1 to 8 inclusive, show the
principal producing and refinery centres and districte within Japan
itself and in the areas where petroleum supplies might be made avail-
able to Japan by conquest, or which might serve as sources of supply
to anti-Axis forces. The estimated proven reserves of crude oil
and present, daily production are indicated by principal areas.
Refinery locations are shown, together with daily refining capacities.
As the result of a nationalistic policy over the last ten
years Japan has built up her refining industry, so that her refineries
producedapproximately 41% of her total petroleum product require-
ments of approximately 110,000 B/D, prior to the outbreak of war
with this country. Her own crude production, including the produc-
tion from the Japanese portion of Sakhalin Island, is only capable
of supplying 9% of her total product requirements when processed
in refineries in Japan, leaving these refineries primarily dependent
upon imported crude. These crude oil imports have in the past come
primarily from California, and refined products primarily from re-
fineries in the Netherlands East Indies.
If Japan were successful in invading the N.E.I. it is pro-
bable that the refinery capacity there of 177,750 B/D could be 80
effectively destroyed by retreating forces that it would take
18 months to 2 years to replace it even with available steel produc-
tive facilities, and probably longer when considering Japan's in-
dustrial position. Crude production and pipeline facilities, of B.
present capacity of 161,000 B/D, even though sabotaged, could be
brought back into operation in a much shorter time, even though new
wells had to be drilled, so that crude oil could thue be made avail-
able to supply the Japanese refineries. In this case, the most
effective interference would be serial attack of the Japanese re-
fineries themselves. (In this connection it should be pointed out
that 14,800 B/D of the heavy crude from the Tarakan field in Nether-
lands Borneo is of such & nature that it can be used without refin-
ing for navy bunker and heavy diesel fuel.) Substantially the same
considerations apply to the refinery capacity in India and Burma
of 37,950 B/D, and crude producing capacity of 28,500 B/D.
It will be noted that the crude producing and refinery
capacity in the Persian Gulf of 257,500 B/D is substantially greater
than Japan's requirements, and is BO much further removed from
Japan that it may be considered, together with California, as B.
source of supply for operations against the Axis.
Regraded Unclassified
294
2-J
Estimate of Japanese Supplies under Blockade Conditions
The following table represente an estimate of petroleum
supplies (crude oil and finished products) to Japan and Manchukuo
in 1940, together with an estimate of supplies which would be avail-
able if all imports were cut off with the exception of production
from Sakhalin Island.
Barrels 42's
Estimated
Barrels Annually
1940
Minimum
Maximum
Supplies
Crude 011 Production
2,317,000
2,250,000
2,500,000
Natural Gasoline
300,000
300,000
325,000
Synthetic Oil from Coal
1,000,000
2,000,000
3,000,000
Alcohol
500,000
300,000
500,000
Total Domestic Supplies
4,117,000
4,850,000
6,325,000
Imports
37,319,000
1,000,000*
4,000,000*
Total Supplies
41,326,000
5,850,000
10,325,000
Monthly Average
3,453,000
487,500
560,400
Average of minimum and
maximum supplies -
barrels per month
673,950
-
Imports under conditions of complete blockade are assumed to come
only from Sakhalin Island. The minimum figure corresponds to produc-
tion from only the Japanese portion of the island; the maximum figure
assumes that Japan would control the Russian portion of the island
in addition,
It is apparent from the above that Japan has been largely dependent upon
imports, only approximately 10% of her total requirements in 1940
being from domestic sources.
Estimate of Minimum Civilian and Industrial Consumption Requirements
Estimates of Japanese consumption are subject to consider-
able error due to lack of adequate data on military and naval COD-
sumption, which in 1940 is estimated at 15 - 20,000,000 barrels.
Civilian and industrial consumption in 1940 is estimated at 22,000,000
barrels, no that total consumption WBB probably around 40,000,000
barrela. Civilian and industrial consumption for the last several
Regraded Unclassified
295
3-J
years has been as follows:
1938 - - - - 27,700,000 barrels
1939
-
-
-
-
24,500,000
II
1940 - - - - 22,000,000
If
In 1939, the breakdown of civilian and industrial consumption by
products was as follows:
Gasoline
6,300,000 barrels
Kerosene
2,200,000
Industrial fuel & diesel oil
8,600,000
Bunker fuel and diesel oil
2,600,000
Lubricating oil and grease
3,000,000
Neutral and light oila
500,000
Wax, asphalt and miscellaneous
1,000,000
From a consideration of the possibilities of reduction of
these quantities, it is estimated that, under conditions of blockade
and severe restriction, the total civilian and industrial oil con-
sumption could be reduced to B. minimum of 15,000,000 barrels annually.
or a monthly requirement of 1,250,000 barrels.
Estimate of Petroleum Stocks in Japan
Japan's total uscable stocks of crude and products are
estimated at the outbreak of hostilities with this country to be
40,000,000 barrels. Japan has been building stocks over EL number of
years, as may be indicated from the following table showing imports
for the period 1930 - 1940.
Total
Barrels 42's
1930
16,304,000
1931
16,717,000
1932
20,925,000
1933
24,050,000
1934
27,359,000
1935
35,209,000
1936
33,482,000
1937
42,857,000
1938
43,640,000
1939
36,197,000
1940
37,319,000
10-Year Total 334,059,000
Includes Formosa and Chosen, and
Manchukuo, commencing July 1, 1932
Regraded Unclassified
296
The above stock figure was arrived at by starting with an estimate
of normal commercial stocks in 1930 prior to the invasion of Man-
churia, and determining the addition to stocks each year by a com-
parison of total known supplies with estimates of consumption. It
is recognized that other estimates of stocks in Japan have been con-
siderably higher (70 - 75,000,000 barrels, compared with the 40,000,000
figure) but it is difficult, on the basis of the data available to
see how more than 40,000,000 barrels could have been accumulated.
Higher estimates could only be justified on the basis of information
not available in making this study.
No data are available on the location of military stocks,
but Table 9 shows as of December 1938 the amount and location of
the then existing commercial stocks.
Comparison of Supplies, Requirements and Stocks
Before any consideration of military and naval requirements
it is apparent that estimated minimum civilian and industrial require-
ments of 1,250,000 barrels per month exceed current available supplies
under blockade conditions, of approximately 675,000 (using the average
of minimum and maximum supplies) by 575,000 barrels per month, to
be met by withdrawal from stocks. To this shortage must be added,
by those best qualified, an estimate of Japan's military and naval
requiremente under present conditions. For emample, if such military
and naval requirements were 1,500,000 barrels per month (18,000,000
barrels per year) the total shortage to be met by stock withdrawal
would be 2,075,000 barrels per month. Under these conditions, assum-
ing Japan were unable to receive imports other than from Sakhalin
Island, the estimated stocks of 40,000,000 barrels would be exhausted (40,00 2,0
in 19 months. If, for example, military and naval requirements were
2,500,000 barrels per month (30,000,000 barrels per year) the
40,000,000 barrel available stock would be exhausted within - (40,000,000 3,075,000 )
13 months. To the extent that stocks might be higher than
the 40,000,000 barrel figure estimated, they would last correspondingly
longer.
Lubricating Oil and Aviation Gasoline
Regarding lubricating oils, Japan's refinery capacity 10
estimated at 2,200,000 barrels per year. No data on stocks are avail-
able. but importe in 1939 were 390,000 barrels, and are estimated in
1940 at 1,100,000 barrels. While the quality of available lubricants
might suffer under blockade conditions, there would probably be no
shortage in comparison with other products.
Regraded Unclassified
297
5-J
The supply of high quality aviation gasoline (90 - 100 octane)
is doubtless limited, but there should be no serious limitations on
supplies of lower quality, of 87 octane and below. Stocks of tetra-
ethyl lead are unknown, but imports have undoubtedly exceeded the
demand.
Tanker Capacity
Japan has 56 tankers (including six whalers), totaling
approximately 485,000 gross tons. These have a total daily carrying
capacity on the basis of the normal run between the N.E.I., California
and Japan of about 36,000,000 barrels annually.
Regraded Unclassified
298
TABLES No. 1 - 9 Inclusive
Regraded Unclassified
TABLE No.1
299
BAHREIN ISLANDS
BAHREIN ISLANDS
Refineries
Refineries
Barrela 42's Daily
Barrela 42's Daily
Jenuary 1, 1955
Jenuary 1, 1956
January 1, 1937
January 1, 1958
January 2, 1939
January I, 1940
Company
Location
Crude
Crecking
crude
Cracking
Crude
Crecking
Crude
Crecking
crude
crecking
Crude
creaking
Celtfornia Texas Pet. Co.11d.
Bahrein Ialande
-
-
20,000
5,000
30,000
5,000
-
a 30,000
b 12,000
-
o 58,500
& 12,000
Total Bahrwin Islande
20,000
5,000
50,000
5,000
8. 30,000
b 12,000
-
o 32,500
-
8. 12,000
-
-
a Retimated
b World Pot., Feb,, 1939
e oil end Gas Journal 12/28/59
Regraded Unclassified
TABLE No.2
200
INDIA A
INDIA -
Befineries
Refineries
Barrels 4218 Daily
serrale 42% Daily
January 1, 1935
January 1 1936
January 1, 1937
January 1, 1958
January 1, 1959
Jenuary 1, 1940
Tompany
Location
Crude
Crecking
Crude
CT ching*
drude
Crecking
grude
Crecking
Crude
cracking
Crude
Crecking
Ruranh oil company
Syriam (Ronecon)
14,500
1,500
14,500
2,000
80,000
5,000
20,000
8,000
20,000
3,000
80,000
5,000
British Nurmah pet.co.ltd.
Thilawu
2,000
1,500
2,500
2,000
8,000
2,000
2,000
8,000
8,000
2,000
2,000
2,000
Dighoi
(India)
500
4,500
500
4,500
500
passes 011 co.
1,000
2,000
1,000
1,600
4,500
Allock 011 co.
Howalpindi (Indie)
2,000
R,000
-
2,000
-
8,000
2,500
-
-
-
Pantha
1,000
1,000
-
-
1,500
1,500
-
1,500
-
Indo-Nume pet. co.
F.
1,500
-
-
,
-
united Refineries, Led.
Thilwa (Reakmin)
500
-
000
,
-
-
-
.
Deikjoyi
2,000
K,000
1
3,000
3,000
$,000
-
-
Indo-Dures Fet,On.
-
-
3,000
-
200
-
Vananyaung
200
200
200
-
$00
200
-
-
Nath Singh ()11 Co.114.
-
-
450
400
1
Vinta 013 Co. (b)
Minhu
-
450
-
-
,
,
-
-
-
Companies
e 4,500
-
4,300
-
$8,000
5,000
88,000
6,600
53,200
5,500
33,650
5,500
33,550
5,500
TOTAL INDIA & BURMA
(b) prior to Jan.1,1937 tuta refinery caused by the
Tot.India 6,500
500
500
8,800
500
10,800
a Bellmeted
6,500
United Ref. Ltd.: und wus located at Thilowe
27,150
27,150
5,000
5,000
27,150
5,000
5,000
. Pot.Timee 3/28/36
fot.Burse $,700
THAN
IRAL
Refinerise
Barrels 42's Duily
Refineries
Barrala 42's Daily
Jamury 1. 1930
Jumiery 1, 1037
Tabuary 2, 1938
January 1, 1959
January 1, 1940
JURNARY is 1936
Crude
Crecking
crude
Crocking
Crude
Crecking
Crude
Crecking
Company
location
crude
crucking
crude
tracking
8,000
8,000
-
$,000
-
Eheniquin 011 Co.Ltd.
Khanaquin
18,000
1
-
1,000
,
1,000
-
1,000
-
true Petroleum Co.
Eirbox
-
1,000
-
3,000
-
3,000
*5,000
-
TOTAL
3,000
.
3,000
- Extimated
Regraded Unclassified
TABLE No3
201
JAPAN
enrols 42's Daily
Barrols 42's Daily
January 1. 1936
January 1, 1936
Jamary 1, 1937
January
1. 1930
January 1, 1939
Jamiary 1. 1940
Company
Locating
Crude
Crecking
Crude
Orude
Creding
Crude
Crecking
Drude
Crecking
Crude
Cracking
011 Charges
Tournet
6,000
2,000
6,000
2,000
6,000
3,500
6,000
4,000
6,000
1,200
6,000
1,200
"
il
(llesta (Dettart)
3,000
1
3,000
-
5,000
-
3,000
-
3,000
-
3,000
-
if
Rashiwozaki (Diigatal
3,000
1
3,000
-
5,000
,
3,000
-
3,000
-
5,000
-
.
"
il
Akite (Truch) takt
4,000
-
4,000
-
4,000
-
4,000
-
6,000
-
4,000
#
"
il
Garukewa (Bakaido)
400
-
400
-
400
-
400
-
400
-
400
1
-
il
Siorit (Talwar)
250
260
$50
1
-
250
-
250
250
-
-
-
-
#
0
Kudamatsu Yamaguchi)
4,000
2,000
4,000
2,000
4,000
8,000
4,000
2,500
4,000
800
4,000
600
.
.
Anagasaki
-
-
$,000
1,500
4,000
600
4,000
600
-
TATEL 011 Co,
20,650
4,000
20,650
4,000
80,680
5,500
24,550
6,000
$4,650
5,600
24,650
2,600
Cours
Tokyo
3,000
1,000
3,000
1,000
5,000
1,000
3,000
1,000
3,000
300
3,000
300
Yokohana
4,000
1,000
5,500
1,000
7,000
8,000
7,000
8,000
7,000
800
7,000
800
Onite
7,00
2,000
8,500
2,000
10,000
8,000
10,000
3,000
10,000
1.100
10,000
1,100
Seleive
Tokyo
500
500
500
-
-
-
500
-
500
,
500
-
,
=
500
-
500
500
-
-
500
-
500
-
500
-
,
.
Ald te
50
-
1,000
1,000
1,000
1
201al Acoid jekiva
-
1,000
-
1,000
,
1,050
-
I
through Exch.011 Co.
Oraks
1,000
1,000
1,000
-
1,000
-
2,000
-
,
-
+
1,000
-
"
-
120
120
180
-
Miltsu, Eliente
1
120
-
LEG
-
180
-
-
201 Karuem
1,120
-
1,120
1,180
I
-
1,120
,
1,180
-
1,180
-
Bareshin
Hakadari
700
700
700
-
-
700
-
700
-
700
-
-
#
300
500
500
-
500
-
500
-
500
,
Dilgars
-
-
AKITA
100
-
100
200
-
200
-
200
-
200
-
-
1,100
1,300
1,400
-
!
1,400
-
1,400
-
1,400
-
Intal Marushin
-
Mitrobishi .
(Tourus!)
4,000
1,500
4,000
1,500
4,000
1,500
6,000
1,500
4,000
500
5,500
1,200
Sayana
1,000
1,000
2,000
1,000
8,600*
1,000
3,100
1,000
-
5,100
400
3,200
400
Alkeina
Zewascki
500
-
730
1,000
-
.
1,500
1,500
2,000
600
8,000
500
500
noo
DOO
-
500
#
500
-
500
-
Pcho-dekiyu
Tokohema
!
1
Yokohama
200
-
200
BOO
-
200
1
500
-
500
-
-
Osaks
700
you
700
-
700
,
700
-
700
-
Toyo-Jexi
-
I
Siboo Safe
1,200
1,800
-
1,200
1,200
-
1,800
,
1,800
-
Tokuyama
-
I
Other Com
700
-
750
BOO
-
800
-
1,000
-
1,450
-
1
Choses
3,000
1,500
3,000
1,500
5,000
800
4,000
800
-
Gensen, Chosen
TOTAL 2AH
40,670
8,500
42,620
8,500
$6,170
12,500
56,170
16,500
54,170
5,900
57,270
6,500
Inc judes small plante
-- Figures DOW represent the potential production of cracked
at Funchase and
on Company owne 50% Interest.
gasoline wherees heretofore they represented the potential
Nilgate with 000 bble,
charge of crecking stock.
daily caparity.
Includes 200 barral plant at Milgate.
Regraded
TABLE No.4
302
MANCHUKING
MANCHUKUO
Reficeries
Refineries
Barrels dE's
Barrels 42's
January 1, 1935
January 1, 1956
January 1, 1957
Jamary 1, 1958
January 1, 1939
Junuary 1, 1940
crude
Cracking
Crude
;recking
Crude
Crecking
Crude
Crecking
Crude
Crucking
crude
crucking
Location
Company
-
-
INDIAN 3# viya Embuskihi Kaisha
8,000
-
5,000
-
2,240
-
4,000
600
Deferent
8,000
-
-
3,000*
-
8,240
-
4,000
600
-
TOTAL MANCHUXDO
-
-
+
-
-
5,000
1,000
5,000
1,000
4,000
200
S.K.R. Shale 012 Plant
Fushm
frigure now represents the potential production of cracked gesoline whereas
heretofore it represented the potential charge of cracking stock.
THE
Refineries
Befineries
Barrole 42's
marrels 42's
January 1, 1935
January 1, 1936
January 1, 1937
January 1, 1238
January 1, 1939
January 1, 1940
Location
cracking
crude
Cracking
Crude
Cracking
Crude
Crecking
Crude
Crocking
crude
Crecking
Crude
Company
160,000
10,000
155,000
10,000
800,000
35,000
225,000
55,000
285,000
55,000
englo-Iranian
Abaden
1,500
-
-
1,500
-
1,500
-
1,500
-
Kermansbah
-
-
10,000
186,800
10,000
801,500
$5,000
226,500
35,000
225,500
55,000
140,000
TOTAL IRAN
Regraded Unclassified
TABLE No.5
303
PALESTINE
Refineries
Barrels 42's Daily
Jamary 1, 1940
January 1, 1941
Company
Location
Crude
Cracking
Crude
Cracking
Consolidated Refineries, Ltd.
Haife
41,500
-
(Anglo-Irenian & Shell)
TOTAL PALESTINE
41,500
-
Regraded Unclassified
TABLE No.6
304
AUSTRALIA
AUSTRALIA
Refineries
Refineries
mis 42's Daily
Barrels 42's Daily
January 1, 1957
Jamary 1, 1938
January I, 1959
January 1, 1960
January 1, 1041
January 1, 1948
Location
Crude
Crecking
crude
Crecking
Crude
Companies
Cracking
Crude
Crecking
Crude
crecking
Crude
Creating
011 Ref.1td. -
Laverton
2,657
-
5,500
-
3,500
-
5,500
-
Clyde
2,300
-
-
tall co. of justralie, Ltd. (R.D.)
2,750
2,750
-
2,750
-
any & Treganowan
Newport
143
-
143
-
143
-
143
-
Newnes
500
-
300
-
300
-
300
-
vois Shale 011 Co.
5,600
-
6,695
-
6,695
-
6,693
-
mal justralia
ingle Tranian at Covernment each have a half interest in company.
Regraded Unclassified
TABLE No. 7
305
REDUCIANCE KANT INDIES
NETHERLANDS RAST INDIES
Infineries
Refineries
Daily-Barrels 42's
Daily-Barrwla 42's
Jamary LA
Jenuary 1, 1956
January 1. 1959
January 1, 1940
Jenuary F 1941
January 1, 1942
Companies
Losation
Crude
Crucking
Crude
creeking
Crude
Crecking
Crude
Crecking
Crude
Cracking
Crude
Cracking
pet. mij. (R.D.)
fjepoe
14,000
1,000
14,000
1,000
14,000
1,000
15,000
5,000
Wonskrow
5,000
o
3,000
0
2,000
0
2,000
0
Pladjoe
40,000
o
40,000
0
45,000
¥ 10,000
50,000
25,000
pankalan-Br.
16,000
o
16,000
o
21,000
0
23,000
0
Balik papen
55,000
10,000
35,000
10,000
35,000
10,000
41,250
18,432
- pet. MIJ.
Elentoeng
100
o
100
0
100
-
-
Total Royal patch
108,100
11,000
108,100
11,000
117,100
21,000
131,850
46,432
(standerd-Vacum)
gongei
Cerong
$46,000
$31,800
/ 46,000
/ 31,200
/ 46,000
1 31,800
/ 46,000
19,000
Esposan
# 500
o
# 500
o
/ 500
-
1 500
-
Notherlands K.Indies
154,600
42,200
154,600
42,200
163,600
$8,200
177,750
65,432
8.0.00.R.J. - 60% Interest
800.- 7ec. - 50% Interest.
e According to Standard Development Report.
*
Figures DOW represent the potential production of creaked wheress
heretofore they represented the potential charge of crecking stock.
BRITISH BOBRIBO
BRITISE BONKO
Refineries
Refineries
Daily-Barrels 48's
Daily-Barrals 42's
January 1, 1651
January 1950
January 1. 1959
January 1, 1940
January 1, 1941
January 1, 1942
Companies
Losation
Cruis
Cracking
Crude
Creoking
Crude
Crecking
Crude
Crecking
Crude
Crecking
Crude
Crecking
(R.D.)
15,000
o
15,000
0
80,000
-
STAL Barawak
15,000
o
15,000
o
20,000
-
Regraded Unclassified
TABLE c. 5
STIMATED PROTED CRIDE OIL M PRESCUVION
DG
Provid
Proved
Inde oil
Total
Da. Ave.
Grade oil
Total
Da. any.
Insurance
Production
Production
Security
Production
Troduction
1, 1941
Year 1940
Tear 1840
inc. 1, 1941
Twer 1940
Tear 1940
AM
ARITIAN BONNO
alwas (Formosa)
47,158,000
5,727,000
15,648
Shikkeko
$15,000
36,000
#5
Burwer
10,816,000
1,218,000
5,801
okraids (Yess)
TOTAL BUTHER nomeo
57,956,000
7,045,000
19,849
Ishikari
RET,000
42,000
LAB
Yufules
459,000
$5,000
60
Total
1,156,000
67,000
183
ESTIMATED BAST
brabiu-Akita District
Metherlands lormo
Amountal
15,000,000
.
-
Tabace
11,377,000
EST,000
1,795
Ballkyepen
116,000
18,000
4.1
Innal
5,815,000
506,000
no
Foelce Besajoe
134,000
-
.
249,000
14,000
58
Sembodja
7,557,000
1,311,000
5,002
Ogand
2,702,000
156,000
485
Banga Banga
35,069,000
6,698,000
15,560
4,557,000
263,000
719
Senterek & Others
119,000
65,000
178
2,835,000
152,000
418
Tarakas
21,385,000
1,433,000
14,844
Total Somes
89,301,000
12,582,000
34,815
594,000
40,000
109
Total Ative
$3,025,000
1,618,000
6,421
ANGELE Best Court
District
Arosbel
7,440,000
368,000
1,060
Highthiyums
1,192,000
59,000
Lee
Djeulso Bejou
155,000
1,000
3
152,000
0,000
$2
Page
2,590,000
12,000
54
Manobaichi
938,000
54,000
148
Furlaic
5,105,000
389,000
1,065
Wilties
3,810,000
$20,000
601
Peolos Famijang
10,285,000
667,000
4,369
Restov
34,030,000
5,757,000
11,01
Takeneoki
5,577,000
206,000
563
Talage Sadd
$31,000
11,000
2
696,000
40,000
100
Daret & Others
978,000
50,000
de
Total Milgate
10,234,000
557,000
1,631
Total 21/45 & Basi Const
38,608,000
7,664,000
50,449
TOTAL JAVAE
40,145,000
$,318,000
8,555
Central
Limit
17,000,000
-
-
Djembi
70,206,000
9,617,000
$5,276
WL GARMALIN
85,012,000
4,185,000
11,275
Behat
155,000
85,000
227
Benakat
26,694,000
3,681,000
10,057
Djirak
17,568,000
8,588,000
6,907
Dossig
8,193,000
679,000
5,408
Lamatang Complex
12,791,000
97,000
200
1 Will al
Lines
2,958,000
484,000
1,588
Loaboad Datos
$4,000
.
-
Dubliss
17,725,000
381,000
2,407
Markets
124,000
-
fahur
1,064,000
71,000
1M
Mangeendje
55,640,000
2,814,000
5,049
Total Punjab
19,299,000
952,000
2,601
Monate Inter
407,000
158,000
-
I
Most
1,000,000
Digboi
15,776,000
1,488,000
4,056
& & Palambang Complex
E,Y58,000
15,000
43
Total India
35,055,000
2,440,000
6,867
Runch
27,000
4,000
12
4788
Salo
1,847,000
26,000
71
Inlass
735,000
48,000
186
Bostan Boerowng
1,056,000
97,000
DOD
Soaben Djerigi
2,487,000
557,000
LAB
Hegys-Chank
87,532,000
4,757,000
13,997
South Felembang Complex
1,402,000
53,000
274
Mistu-Palanyos-
Suspal
$82,000
£2,000
so
Tothers
1,469,000
79,000
no
Talang
208,413,000
9,051,000
24,675
5,085,000
140,000
of
Talang Djimar
66,095,000
2,576,000
7,038
Tenangyanung
52,892,000
8,874,000
7,000
Tandjosing Losotar
739,000
145,000
301
Tenume-Pedaultyin
1,101,000
60,000
164
Total Falestang
412,027,000
22,654,000
61,895
Michris
74,000
1,000
3
Total Susatra
557,541,000
39,755,000
108,821
Total Puras
145,848,000
7,517,000
21,795
lave
TOTAL DOIA * BURMA
181,933,000
10,417,000
85,463
Contral Jara
Rape
5,000
-
.
Gliron
25,000
2,000
6
40,851,000
4,570,000
18,406
Laint-Kedjading
TOTAL ISLAND
E,397,000
544,000
940
525,088,000
7,505,000
21,601
Lossi
100,000
40,000
109
2,301,000
£15,000
1,580
Petak
10,000
10,000
27
Treatos)
5,000
2,000
5
Others
MARIA
75,000
24,000
$6
Total Central Java
Inw
45,206,000
5,500,000
15,221
800,201,000
0,363,000
14,658
last Java
who
270,000,000
-
-
18 Desses
TOTAL ARAIL
300,000
62,000
169
550,201,000
5,365,000
14,658
Djabakotta
2,058,000
606,000
1,107
Lidah Kowlan
105,000
28,000
TF
Wade
409,000
£3,000
178
Others
TOTAL EURALE
5,000
$75,000,000
-
-
Total Tast lurn
3,463,000
560,000
1,631
Tvial Jave
40,668,000
$,148,000
15,651
Cerum
ISAD
Seels
1,015,000
524,000
1,401
I
8,250,000,000
2,480,000
140,000
565
-
-
Total Cares
4,699,000,000
5,498,000
666,000
1,814
-
.
hert-Eal
Briberlants Sixe Guissa
1,084,509,000
41,947,000
114,800
X
5,000,000
-
$57,264,000
21,409,000
58,041
-
White 011 Springs
304,000,000
15,000,000
-
-
-
-
37,059,000
Trial Netherlands - Gulsee
30,000,000
-
1,340,000
2,681
-
TOTAL DAS
7,134,662,000
54,828,000
177,511
TOTAL INTERNATE indian
719,309,000
59,109,000
161,500
GRAND TOTAL 07 ABOVE ATTAS:
Proved Grude Insurance -
Total Freduction Your 1940 - 181,163,000
Daily America - 660,38T,
Regraded Unclassified
TABLE NO. 9
307
STORAGE CAPACITY -JAPAN - DECEMBER 1938
(in total barrels of 42 gals.)
SHELL
White 011
Black 011
Tsurumi
370,425
311,175
Taketoyo
82,500
21,600
Nonai
96,525
117,450
Node
210,375
221,400
Osaka
70,950
22,275
Saitozaki
149,325
131,625
Nugasaki
-
99,900
Bikoshimu
I
147,150
Korea
127,875
32,400
Formosa
35,000
17,550
Dairen
24,750
37,125
Bumpyo
-
85,725
Total Shell
1,165,725
1,245,375
OTHERS
White Oil
Black 011
Crude
Hokkaido
17,325
205,850
18,125
Sandai
305,250
178,538
549,550
Tokyo
1,969,275
1,821,150
6,915,050
Nagoya
5,775
294,300
-
Osake
407,550
1,015,175
3,654,725
Hakete
229,350
708,075
-
Chosen
364,650
134,325
1,304,275
Formosa
4,126
256,500
-
K.L.T.
1,210,275
127,575
315,575
Total Others
4,513,575
4,737,488
12,757,100
Total Including Shell
5,679,300
5,982,865
Black 011s
5,982,863
White 011s
5,679,300
TOTAL
24,419,263
Regraded Unclassified
308
EXHIBITS No. I and II
Regraded Unclassified
8
AMITA
/
KINDIT
BURMA
MAP OF
ASIA
Equal Area Projection
N.E. 140,000,000
Regraded Unclassified
1A/
BRUNDY
Lei
JAAWAK
MATRA
CERAM
N
-
/
5
M
1
5)
NURTHERN TERRITORY
MA OF
OCEANIA
NEW
OFF the umbert - Expired Am Projection
.
SCALE 17500000
MILDMETERS
800
IGGO
($))
A
§
MILES
550
Regraded Unclassified
TREASURY DEPARTMENT
311
INTER-OFFICE COMMUNICATION
DATE December 18, 1941
TO
FROM Mr. Dietrich
Registered sterling transactions CONFIDENTIAL of the reporting banks were BE follows:
Secretary Morgenthau
Sold to commercial concerns
£71,000
Purchased from commercial concerns
£16,000
Open market sterling closed at 4.03-3/4, and there were no reported
transactions.
The Canadian dollar closed at a discount of 13%. the widest discount
since last May, when the quotation was 13-1/6% Some of the liew York banke
attributed the current weakness in the Canadian dollar to selling of the pro-
ceeds of Canadian securities liquidated by American holders "for year-end
purposes".
In New York, closing quotations for the foreign currencies listed below
were as follows:
Argentine peso (free)
.2390
Brazilian milreis (free)
.0516
Colombian peso
.5775
Mexican peso
.2065
Uruguayan peso (free)
.5310
Venezuelan bollvar
.2725
Cuban peso
1/4% premium
The Federal Reserve Bank of New York purchased 117,000 Swedish kronor in
lew York at .2387. by order and for account of the Central Bank of the Uruguayan
Republic.
We sold $997,000 in gold to the Central Bank of Bolivia, which was added
to its earmarked account.
The Federal Reserve Bank of New York reported that the Sank of Canada
shipped $4,610,000 from Canada to the Federal for account of the Government of
Canada, for sale to the New York Assay Office.
In London, spot silver remained at 23-1/24, equivalent to 42.67% The
forward quotation advanced 1/16d to 23-9/16d, equivalent to 42.78/.
The Treasury's purchase price for foreign silver WES unchanged at 35/-
Handy and Harman's sottlement price for foreign silver WS S also unchanged at
35-1/84.
We made no purchases of silver today.
2
Regraded Unclassified
EN 312
BRITISH EMBASSY
WASHINGTON, D.C.
Personal and
18th December, 1941.
Secret
Dear Mr. Secretary,
I enclose herein for your personal
and secret information a copy of the latest
report received from London on the military
situation.
Believe me,
Dear Mr. Secretary,
Very sincerely yours,
Halifax
The Honourable
Henry Morgenthau, Jr.
United States Treasury,
Washington, D.C.
Copy No.
BRITISH HOST SECRET
313
(U.S. SECRET)
OFTEL No. 39
Information received up to 7 a. 17 December, 1941.
(I) NAVAL
Home Vaters - 16th, The PRINZ ZUGEN hás left dry dock and
is reported alongside the coaling jetty at BREST,
CHINA. - 15th, HONG KONG. Dps.of H.M. destroyers chelled
two river boats in KOVLOON BAY and hlew them up,
(II) UTLITARY
LIBYA. Our attack on the enemy line between GAZ/IA and the
TRIGH EL APD THE continued, and progress ma aude in the area East and South on
GAZAIA, The position here and in the South where other Indian troops had at-
tacked in the TRIGH EL ABD area, was considered satisfactory. Enemy casualties
were thought to have been heavy, In the montime an armoured force had worked
round the enemy's Southern flank and reached its objective at BIR HALEGH EL ALEBA
(nearly 40 miles Test of GAZAIA) where it engaged ten enemy tanks and sotte guns,
It la thought that prier to this action the enemy WELF unaware of this new throat
to his rear. During the 13th and 14th, New Zealand troops captured nearly 1,100
prisoners, and Polish troops 200, On 14th WE destroyed six enemy tanks and 300
tons of ammunition,
MALAYA. 16th December, KEDAH - Heavy fighting continues.
Our Porces at present on line of River EUDA, to North-Bast of PERIOD, but our
losses in non and equipment have been heavy, and a further withdrawal is likely
to be necessary. In KELANTAN, there man some patrol activity, but elsenhere
nothing to report. Air reconnaissance should a. large concentration of enemy
transports off KOTA BHARU and PATANI.
HONG KONE. 16th, Bombing and shelling on an increased scale
took place, Enemy's fire was accurate but apart from acce damage to ABERDEEN
Dock, military damage or casualties do not appear to have been severe. Public
norale is generally high and satisfaction at rejection of proposals for parley
widely expressed. One energy aircraft was shot down into the sea off LAITIAS
Island.
SARAHAX. Enemy troops have landed North of HIRI and there
are reports of Inndings at LUTONG (further to North). Ten large Japanese war-
stays, one tanker and one submarine have been reported off this area,
Regraded Unclassified
- 2 -
314
BURMA. No activity beyond an exchange of shots between one
of our patrols and a Thai post at MYWADI (a few miles North of !IESCD),
RUSSIA. The German withdrawal in the 110SCOV front 16 con-
tinuing. The Russian claim to have recaptured KALININ is considered to be
correct.
(III) AIR OPERATIONS
15th/16th. 20 tons of bombs were dropped at OSTEND and
bursts were seen in the dook area. At BREST 32 tons of bombswere dropped but
accurate observation of results was not possible owing to cloud. Eight R.A.A.F.
aircraft took part on these operations. 16th. A Beaufort hit a Flak ship off
the Dutoh Coast with & torpedo. Two Spitfires were shot down near CALAIS.
16th/17th. 173 aircraft despatched to - WILHELMSHAVEN 83; OSTEND 32, BREST 22,
Sea-mining, BREST 18, DUNKIRK 14, Leaflets (PARTS area) 40 One bomber is missing,
one came down in the sea and a third crashed but the crew is safe,
CENTRAL MEDTTERRANEAN. 15th/16th. 20 Vellingtons attacked
Naval shipping at TARANTO. Bombs fell in the target area but a smoke-screen
prevented detailed observation of results.
(IV) ENELY ACTIVITY
16th/17th. 41 aircraft operated against the U.K., of which
14 made landfall.
MALAYA. 15th. Enemy fighters carried out a low-flying at-
tack on the aerodrome at KUANTAN but no damage or casualties are reported. 16th.
Enemy air activity on a limited scale only.
Regraded Unclassified
315
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE December 26,1941
Secretary Morgenthau
TO
Mr. Kamarck
FROM
Subject: Summary of O.C.I. Weekly Bulletin, "Tne War This Week,
December 11-18, 1941".
(It 1s obvious from the contents that the writers of this
Bulletin have access to the information furnished to us by the
British Embassy, to Military and Naval Intelligence data, A8 well
AS reports secured from the foreign representatives of O.C.I.
itself.)
The most important information contained in the report that
18 had not received before follows:
1. General Sikorski (Polish Commander-in-Chief, now in
Russia) reports that:
(a) Germans still have superiority in tanks and have
plenty of fuel and munitions.
(b) The German prisoners, however, complain of the
food and their clothing is inadequate.
2. The French are sending substantial reinforcements to
French North Africa. There are supposed to be 30,000 soldiers,
Veterans of the Syrian campaign against the British, who are
now being sent to North Africa. Dakar was reinforced by 1,200
Sengalese from Cesablance. The French have nine submarines
in the harbor.
Regraded Unclassified
316
(
NUMBER 10
SECRET
COORDINATOR OF INFORMATION
THE WAR
THIS WEEK
December 11-18, 1941
PLEASE PRIOF
Printed for the Board of Analysts
Copy No. 31
mr. Morgenthan
Regraded Unclassified
DECEMBER 11-18, 1941
SECRET
THE WAR THIS WEEK
Boldly seizing the initiative, the Japanese have threatened
the balance of naval power in the western Pacific, have cut
vital lines of communication, and are steadily pressing an
offensive which, if it cannot be stopped, may well engulf
great parts of southeastern Asia. Simultaneously the
Russian Army has thrown the enemy back from the gates
of Moscow and delivered the capital in a dramatic counter-
offensive whose full significance cannot yet be measured.
In the western desert the British have renewed their drive
and are pushing the forces of the Axis back on Derna.
But preparation, rumor, and the logic of the situation sug-
gest that the Germans are planning an early counter-
thrust based on an occupation of North Africa.
War in the Pacific
The first 10 days of the new war in the Pacific have wit-
nessed a wide-ranging Japanese offensive. The Japanese
have inflicted severe losses on American air and naval
forces in Hawaii. They have disrupted aerial communica-
tions with the Far East via the Hawaii-Midway-Wake-
Guam-Philippine route. They have invaded the Philip-
pine Islands. They have occupied Thailand, and secured
the active cooperation of the Thai government. They have
invaded Burma and the Malay Peninsula. They have laid
siege to Hong Kong. They have destroyed two British
capital ships near Singapore.
The Allies on the Defensive
The immediate result of these events has been to place the
United States and its allies on the defensive, and a success-
ful continuation of this forward move would win the Jap-
anese certain new and notable advantages.
433260-41
1
Regraded Unclassified
SECRET
SECRET
where the Japanese have suffered severe losses, would
The occupation of Hong Kong and the Philippines,
1914. What Hitler himself described as the greatest offen-
only deprive the allies of valuable bases, but would not
sive of all time has been so convincingly blunted that the
line Japan an advantageous position for the protection of give its
British ambassador and his staff have already set out on
of communications through the South China Sea to
the uncomfortable trek from Kuibyshev back to the old
would enable Japan seriously to threnten the lines of
Singapore area. The domination of the latter region the
capital. Authoritative sources believe that the Russians
have now established air superiority along the entire front,
munications from the Far East to the Near and Middle com-
and notably in the Moscow area. The Russians have in
East, to Europe, and to the United States. At the
fact delivered against the German front by far the heaviest
least the result would be greatly to increase the difficulty very
blow yet struck against Nazi forces in the present World
over the Burma Road.
of relieving the Philippines and of delivering aid to China
War.
In the north the Soviets have captured Klin, Kalinin,
and Volkhov, and the Finns are now lamenting the fact
The Threat to China
that the ancient capital of the Tsars cannot now be
wrested from the Russians before the spring.
The occupation of Burma or Japanese domination of the
Even more serious developments may be in the making,
In the south the Soviet armies continue to press the
enemy westward from Taganrog, where the Germans have
sea routes to that country would block deliveries to China
lost an important advance air base. Military objectives
over the Burma Road. The spirit of resistance in China
to the east of Rostov can now be reached only by long-
would then be sapped, and those elements which seek a
range bombers. The timetable for the attack on Caucasía
compromise peace with Japan would be strengthened.
has been retarded by several weeks and perhaps com-
This development would come at a time when Japan
pletely disrupted. Berlin radio commentators are saying
without loss of face, offer China peace terms on the basis can,
less and less about the Russian war.
of partial withdrawal from her territory. A serious im-
pairment of the fighting power of China or the establish-
ment of a modus vivendi between China and Japan would
The Future of the Soviet Offensive
elsewhere. release important Japanese forces and material for use
It would be idle to speculate on how long the Russians
can maintain the tempo of the present drive. Foreign
Of critical importance in the entire Far Eastern situa-
opinion at Kuibyshev varies. Some observers believe
tion is Russian policy regarding the use of her Siberian
merely that the Nazis cannot resume the offensive until
military and naval establishments, but as yet no announce-
the winter is over. Others contend that the Germans will
ment has been made of any prospective action by Russia
find tenable winter positions only far to the west, and
against Japan.
hence that it is perfectly possible that Russian cavalry
and other units with great striking power-prepared for
The Delivery of Moscow
just this eventuality-may transform the withdrawal into
In the eleventh hour Moscow has been rescued from the
disaster. The harassing attacks by the Cossacks on the
maw of the invader, na Paris was rescued in September
retiring Germans already suggest the well-remembered
tactics of 1812.
2
3
Regraded Unclassified
SECRET
German Losses in Russia
SECRET
sequent 6 months of about 4,500 planes. Perhaps 10 to 15
The Nazis are explaining the reversal by the cold, the
percent of this equipment could be made serviceable by
Russians by heroism and bold generalship. Available evi-
repairs. The monthly rate of loss appears in fact to have
dence clearly indicates that the Germans have suffered
been less than the monthly production rate, which is esti-
severely, but their losses can readily be overstated. Gen-
mated currently at approximately 2,000 combat planes of
eral Sikorski, who is currently negotiating with Stalin
all types. Although data on losses of other types of equip-
behalf of the Polish Army in Russia, reports that the Nazia on
ment is lacking, military advice would indicate that re-
still enjoy superiority in tanks, that they have plenty of
placements can be made from existing stocks and current
fuel and munitions, but that prisoners complain of the
production.
food, and that their clothing is inadequate. In this con-
In conclusion, however, various increased strains on the
nection it should be emphasized that the Germany supply
German economy are noted in the Coordinator's report.
situation is basically weak with respect to all textile fibres,
And it is suggested that while the Germans need a period
and signs are mounting that this weakness has taken a
of respite from operations on the present scale, they also
sharp turn for the worse as & result of the unexpected pro-
need an accretion of new raw material stocks or resources
longation of the Russian campaign.
if these strains are not to become progressively more seri-
ous. This would point to military action designed to
acquire the maximum in raw materials and resources at
Nazi Casualties
the minimum cost in manpower, transport, and petroleum.
German losses in manpower and matériel during the
Russian campaign have just been the subject of an ex-
tended report by the Coordinator of Information. A
German Intentions
tentative estimate places German battle casualties to De-
cember 10 (in killed, wounded, and prisoners) at 1,500,000.
News of growing Russian superiority in the air has a
This estimate does not include losses due to other than
"sinister ring" for a BBC commentator, who interprets it
battle injuries, such as accidents, cold, and disease, and
as a sign that the Germans are shifting their air strength
to another theater. If the Russian front were to be stabi-
these also are likely to have been high, according to a
statement from the Office of the Surgeon General. Some
lized, and particularly if the Russians were to do the in-
confirmation of this view comes in a report that Paris hos-
comprehensible and accept a Nazi peace, MID believes
that the Germans might well launch a powerful attack
pitals frostbite. are jammed with German soldiers suffering from
against the British Middle East, driving through Turkey
toward the Persian Gulf and hoping to join bands with
the Japanese in the Indian Ocean area. On the other
Losses in Matériel
hand, it should be emphasized that Asiatic Turkey is &
mountainous and roadless plateau with winters of snow and
It is estimated that Germany had approximately 24,000
mud. There is good reason to believe that the Turkish
combat planes of all types at the outbreak of the Russian
army, if strengthened by lend-lease arms, would resist
war, and that she has suffered total losses during the sub-
stubbornly.
4
5
Regraded Unclassified
SECRET
SECRET
French North Africa Next?
On the other hand, an impressive and rapidly accumu-
In North Africa the situation is very different. Winter
lating array of evidence suggests that German action in
and early spring are good seasons for campaigning in much
Africa is in preparation and that it will have French mili-
of this area. Conquest of Morocco, Algeria, and Tunis
tary and naval cooperation in one form or another. Ger-
would be inexpensive, would result in the loss of Gibraltar
man pressure will probably soon oblige Vichy to modify
as a naval base, would confine the British Navy largely to
its relations with this country.
the eastern Mediterranean, and would provide ideal bases
from which to interrupt, if not to destroy, north-south
convoys which assemble at Freetown and Bathurst. Such
New Evidence of Collaboration
a conquest also would provide bases for a renewed assault
Elements of a German Panzer division are reported
Africa. to the east on Suez and for a drive southward into tropical
as having recently passed through Angoulême in the direc-
tion of Bordeaux. E-boats are reported at Chalons-sur-
Despite the steady British successes in Libya, it is be-
Saône waiting for higher water to move down the Rhone.
coming increasingly obvious that final victory in North
Spanish espionage is increasing in French North Africa,
Africa will depend on which of the two opponents can
and French authorities believe that the Spaniards are
assemble and maintain the greatest striking force in that
verifying military information for the Armistice Commis-
area. The British have it now. A Nazi occupation of
sion and are engaged as well in other subversive activities
French North Africa might promptly reverse the situation.
for the Germans.
At the same time the appearance of substantial French
Fresh "Resistance" at Vichy
reinforcements in North Africa can only mean that they
For the moment there are at Vichy mild signs of fresh
are being sent for purposes approved by the Germans.
resistance. Pétain has despatched a "very strong" note
More than 7,000 troops have recently debarked at Algiers,
of protest against the threatened renewal of Nazi exeen-
3,600 of these being part of a contingent of 30,000 which
tions of hostages. The Marshal brusquely pointed out that
is being transferred from Syria to Algeria by way of
collaboration is impossible under such conditions, and the
Marseille. Eighty-two railway cars and four Diesel loco-
German authorities refused to receive the note. Moreover,
motives were also recently landed at Algiers.
Pétain declares that if the Germans press the French for
Dakar is not being neglected. Nine French submarines
measures restricting the freedom of action of the Ameri-
are anchored in the harbor, and on December 12 four ships
can Embassy, he will not accept notification through the
were suddenly diverted from other runs to take 1,200
French delegation in Paris this time, but will insist on a
Senegalese troops from Casablanca to augment the already
written ultimatum from the German authorities (which
formidable garrison at Dakar.
would presumably serve to justify his position to both
French and Americans). Finally, the Minister of Foreign
Latin-American Reaction to the Japanese Attack
Affairs at Vichy has informed our Ambassador that
The Japanese attack on Pearl Harbor has intensified
France will remain neutral in the war between the United
the conflict between our friends and our foes in the Latin-
States and Japan.
American countries, according to a current situation re-
6
7
Regraded Unclassified
SECRET
port from the Latin-American section of the Coordinator's
office. In the Middle American region, which lies within
our sphere of special military and economic interests and
which includes Colombia and Venezuela, our friends seem
strong enough to assure us the continued support of their
governments. There is continuing danger, however, that
domestic fascist movements, such as Sinarquismo in Mex-
ico, may adversely affect our position.
Of the remaining Spanish-speaking countries of South
America, only two-Uruguay and Chile-have strongly
supported the United States. And even in Chile, the For-
eign Minister was able to obtain Government backing only
after we had made certain economic concessions which we
had refused to grant before the Japanese attack.
The Pearl Harbor attack definitely lowered our pres-
tige in South America and strengthened the position of
those elements which favor the Axis either on ideological
grounds or because they believe that it will win the war
in the end. In the countries on the west coast at least
the defeat has fortified existing doubts of our ability to
defend them against attack, and has enhanced their desire
for adequate assurances of support from the United
States.
8
U.S. PRINTING OFFICE. 1941
Regraded Unclassifie
RESTRICTED
317
0-2/2657-220; No. 578 M.I.D.,W.D. 11:00 A.L., December 18, 1941
SITUATION REPORT
I. Pacific Theater.
Philippines: No apparent enemy effort during yesterday. Sit-
uation around Aparri, Vigan and Legaspi remained inactive. British
Borneo: Japanese have landed parties north of Miri, in northwest
Bornes. Netherlands East Indies: Australian and Dutch troops occupied
Portuguese Timor 17th. Malaya: Heavy fighting continues in the Kedah
area. According to the press Japanese troops are threatening Penang.
In the Relantan sector, the press reports Japanese have suffered heavy
casualties in attacks on British positions. Hawaii: No further re-
ports of enemy activity have been received. Hong Kong: Serious
fighting continues with no clear picture of the situation. West Coast:
No further reports have been received.
II. Eastern Theater.
Ground: The situation at Leningrad continues unchanged.
The German withdrawal to a previously selected line
for winter stabilization continues along the general line: Kursk-
Moscow-Ralinin.
There is no information covering the Donets Basin.
Air: The German High Command announced that units of the
Finnish air force yesterday attacked the Lurmansk railway south of
Soroka and the railway station at Karna. Two trains, one a supply train,
were bombed.
III. Western Theater.
No further reports have been received.
IV. Middle Eastern Theater.
Ground: Axis rear guard in Gazala area has given way, Brit-
ish advance elements have reached Timimi-Mechili road. Direction of
withdrawal of Axis main body not clear at this time.
Air: According to the British Air Ministry, R.A.F. attacks
on Axis motorized columns in Libya are continuing. The German High
Command claims that German torpedo planes scored two hits on 8. British
beavy cruiser in the Mediterranean yesterday. The Italian High
Command admitted another R.A.F. attack on the Italian naval base at
Taranto.
RESTRICTED
Regraded Unclassified