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Volume 505, March 6 – March 8, 1942
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Volume 505, March 6 – March 8, 1942
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Henry Morgenthau, Jr. Papers
Diaries of Henry Morgenthau, Jr.
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DIARY
Book 505
March 6 - 8, 1942
- & -
Book Page
Airplanee Shipments to British Forces - Kamarck report - 3/6/42.
505
198
Alcohol, Industrial
Destruction of bootleg mash and possible conversion
to industrial alcohol discussed by Attorney General
at Cabinet meeting - 3/7/42
244
a) Sullivan memorandum - 3/9/42: See Book 506, page 35
(See also Book 508, page 315 - 3/17/42)
- B -
Barth. Alan
Editorial Opinion on the War: Discouragement - 3/6/42..
187
Budget, Bureau of
Priority classification for Internal Revenue, Public
Debt, Research and Statistics, Office of General
Counsel, and certain units of Procurement protested -
3/6/42
155
- C -
China
Loan:
Conference of Treasury group to discuss Soong's
suggestions on draft Agreement - 3/6/42.
90
Conference of Treasury group, State Department
representatives, and A. M. Fox to discuss Soong's
suggestions on draft Agreement - 3/7/42
242
a) Proposed letter to Soong - 2/7/42
245
Welles (State Department) urges retention of Article II -
3/9/42: Book 506, page 138
a) Bell memorandum: Book 506, page 140
b) HMJr-Welles conversation: Book 506, page 162
c) Conference; present: HMJr, Viner, Bell, White,
Bernstein, and Southard: Book 506,
pages 168 and 217
1) Draft of reply to Welles: Book 506, page 176
2) Letter to Welles: Book 506, page 212
3) Soong letter after message from Kung:
Book 506, page 214
4) Conference of Treasury group - 3/12/42:
Book 507, page 139
5) Revised Article II given Soong in
New York - 3/19/42: Book 509, page 110
a) Chiang Kai-shek's reaction:
Book 509, page 112
1) Conference of Treasury and State
to discuss: Book 509. page 113
Regraded Unclassified
- 0 - - (Continued)
Book Page
China (Continued)
Loan (Continued):
Meeting in White's office to discuss State Department's
suggestion of exchange of letters - 3/20/42:
See Book 509, page 268
Welles reports on Soong's acquiescence - 3/21/42:
Book 510, pages 1 and 4
Soong's assurance of information concerning use of
funds: Book 510, page 3
Conference in Bell's office; present: representatives
of Treasury and State, and T. V. Soong, Kan Lee, and
A. M. Fox: Book 510, page 13
Joint statement - 3/21/42: Book 510, page 17
HMJr's letter of appreciation to Kung - - 3/23/42:
Book 510, page 184
Soong adds "through Minister of Finance" to letter -
3/24/42: Book 510, page 260
Agreement - copy to FDR: Book 510, page 262
Chronology of loan proposal: Book 510, page 264
Kung's letters to FDR and HMr - - 3/25/42:
Book 510, page 304
Chinese reaction to loan - 4/1/42: Book 512, page 130
Commemorative Stamps
See Engraving and Printing, Bureau of
Correspondence
Mrs. Forbush's resume' - 3/6/42
505 167
Cuba
See Latin America
- D -
Debt, Public
See Financing, Government: Public Debt
Defense Savings Bonds
See Financing, Government
Disney, Walt
Misgivings concerning "propaganda" films reported to
Kuhn - 3/6/42
126
- E -
Engraving and Printing, Bureau of
Stamps, Commemorative: HMJr-Hall correspondence
concerning possible economy in - 3/6/42
123
Exchange Market
Resumes 3/6-7/42
226,286
Exports
To Russia, Free China, Burma, and other blocked countries,
during 8-day period ending February 28, 1942 - White
report - 3/6/42
202
- F -
Book Page
Financing, Government
Public Debt: HMJr's statement before House Ways and
Means Committee on statutory debt limitation
($65 billion to $125 billion) - 3/6/42
505
96
a) Doughton reports passage: 367-0 - 3/10/42:
See Book 506, page 237
b) HMJr-Doughton congratulatory correspondence -
3/13/42: Book 507, page 227
c) HMJr's statement before Senate Committee
on Finance - 3/13/42: Book 507, page 229
d) Bill is signed - 3/30/42: Book 511, page 97
Defense Savings Bonds:
Payroll Savings Plan:
Report on operations in 50 large Companies - Haas
memorandum - 3/6/42
128
Hopkins told of status of Payroll Deduction Plan
for Federal employees - 3/7/42
249
Progress report - 3/6/42
137
Daily changes in stock of Series E Savings Bonds -
3/6/42.
147
Agents - number qualified to issue Series E Savings
Bonds: Report, January 10 to date - 3/7/42
253
- G -
Germany
See Military Reports
- H -
Honduras
See Latin America
- I -
India
See Silver
Industrial Alcohol
See Alcohol, Industrial
- L -
Latin America
Cuba:
$55 million Export-Import Bank loan and establishment
of Central Bank - mission coming to discuss - 3/6/42..
207
Currency: Engraving and printing of certain amount by
United States Bureau of Engraving and Printing -
correspondence concerning - - 3/7/42
269
Regraded Unclassified
- L - - (Continued)
Book Page
Latin America (Continued)
Honduras: Mission to discuss loan - White memorandum - -
3/6/42
505 208
(See also Book 507, page 199 - 3/12/42)
Peru: Manufacture of coins Treasury letter to
State Department - 3/6/42
209
Lend-Lease
U.S.S.R.: Official Purchasing Commission established
in United States - 3/7/42
263
- M -
Military Reports
Coordinator of Information reports on German propaganda
and strategy - 3/6/42
228,231,235
Kamarck summary - 3/6/42
238
German rubber situation - report on - 3/7/42.
287
- 0 -
Office of Civilian Defense
Protection of persons and property from bombing attacks,
an Act to provide: Regulations - 3/6/42
116
Office of Facts and Figures
Speech Clearance: MacLeish-HMJr correspondence -
3/7/42
259
- P -
Peru
See Latin America
Public Debt
See Financing, Government
- R -
Revenue Revision
Publicity on early filing of income tax returns
a) Washington Post cartoon - 3/6/42
113
- S -
Silver
India: Changing situation discussed in White
memorandum - 3/7/42
273
(See also Book 506, page 15 - - 3/9/42)
Stamps, Commemorative
See Engraving and Printing, Bureau of
Regraded Unclassified
- S - (Continued)
Book Page
Statements by HMJr
Before House Ways and Means Committee, on statutory
debt limitation ($65 billion to $125 billion) -
3/6/42
505
96
Before Senate Finance Committee, on statutory debt
limitation ($65 billion to $125 billion) -
3/13/42: See Book 507, page 229
- T - -
Taxation
See Revenue Revision
Treasury Department
For priority classification, see Budget, Bureau of
- U -
U.S.S.R.
Official Purchasing Commission established in
United States - 3/7/42
263
Regraded Unclassified
+
TREASURY DEPARTMENT
FOR RELEASE, MORNING NEWSPAPERS,
Washington
Friday, March 6, 1942.
The Secretary of the Treasury, by this public notice,
invites tendere for $150,000,000, or thereabouts, of 91-day
Treasury bills, to be issued on a discount basis under competitive
bidding. The bills of this series will be dated March 11, 1942,
and will mature June 10, 1942, when the face amount will be payable
without interest. They will be issued in bearer form only, and
in denominations of $1,000, $5,000, $10,000, $100,000, $500,000,
and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and
Branches up to the closing hour, two c'clock P. m., Eastern War
time, Monday, March 9, 1942. Tenders will not be received at
the Treasury Department, Washington. Each tender must be for
an even multiple of $1,000, and the price offered must be expressed
on the basis of 100, with not more than three decimals, e. E.,
99.925. Fractions may not be used. It 16 urged that tenders be
made on the printed forms and forwarded in the special envelopes
which will be supplied by Federal Reserve Banks or Branches on
application therefor.
Tenders will be received without deposit from incorporated
banks and trust companies and from responsible and recognized
dealers in investment securities. Tenders from othere must be
accompanied by payment of 10 percent of the face amount of Treasury
bills applied for, unless the tenders are accompanied by an exprese
guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened
at the Federal Reserve Banks and Branches, following which public
announcement will be made by the Secretary of the Treasury of the
amount and price range of accepted bide. Those submitting tenders
will be advised of the acceptance or rejection thereof. The
Secretary of the Treasury expressly reserves the right to accept
or reject any or all tenders, in whole or in part, and his action
in any such respect shall be final. Payment of accepted tenders
at the prices offered must be made or completed at the Federal
Reserve Bank in cash or other immediately available funds on
March 11, 1942.
30-58
Regraded Unclassified
2
The income derived from Treasury bills, whether interest
or gain from the sale or other disposition of the bills, shall
not have any exemption, as such, and loss from the sale or other
disposition of Treasury bills shall not have any special treat-
ment, as such, under Federal tax Acts now or hereafter enacted.
The bills shall be subject to estate, inheritance, gift, or other
exclee taxes, whether Federal or State, but shall be exempt from
all taxation now or hereafter imposed on the principal or interes
thereof by any State, or any of the possessions of the United
States, or by any local taxing authority. For purposes of taxa-
tion the amount of discount at which Treasury bills are originall
sold by the United States shall be considered to be interest.
Under Sections 42 and 117 (a) (1) of the Internal Revenue Code,
as amended by Section 115 of the Revenue Act of 1941, the amount
of discount at which bills issued hereunder are sold shall not
be considered to accrue until such bills shall be sold, redeemed,
or otherwise disposed of, and such bills are excluded from con-
sideration as capital assets. Accordingly, the owner of Treasury
bills (other than life insurance companies) issued hereunder
need include in his income tax return only the difference between
the price paid for such bille, whether on original issue or on
subsequent purchase, and the amount actually received either upon
sale or redemption at maturity during the taxable year for which
the return is made, as ordinary gain or loss.
Treasury Department Circular No. 418, as amended, and this
notice, prescribe the terms of the Treasury bills and govern the
conditions of their issue. Copies of the circular may be obtaine
from any Federal Reserve Bank or Branch.
-000-
2
Secretary is taking copy of ltr to
Nelson to Cabinet today
3
March 6, 1942
My dear Mr. Nelson:
I am informed by Mr. Clifton E. Mack that
AB of the close of business March 5th, we do not
have allocations for the following Russian Pro-
tocol items in the tonnages specified in order to
meet April 1st delivery requirements:
Tool Steel
1489 Tone
Steel Wire
37798 "
Steel Billets (Shell Steel)
38000
"
Steel Alloy Tubes
1165 "
Stainless Steel Wire
108 "
Cold Rolled Steel Strips
19408
If
Hot Rolled Steel
32000 If
Please let me know what you are going to do
about it.
It goes without saying that the closer it rets
to the lst of April without our receiving these allo-
cations, the more difficult it will be for us to com-
ply with the President's wishes.
Yours sincerely,
(SIGNED) HENRY MORGENTHAU JR.
Mr. Donald M. Nelson,
Chairman, Var Production Board,
Washington, D. C.
Regraded Unclassified
2
March 6, 1942
Dear Mr. Stettinius:
I am sending you herewith a copy of
my letter to Mr. Donald Nelson of today's
date.
Any help you can give us will be
appreciated.
Yours sincerely,
Mr. E. R. Stettinius, Jr.,
Lend-Lease Administration,
515 22nd Street,
Washington, D. C.
Regraded Unclassified
5
March 6, 1942
11:58 a.m.
HMJr:
Hello.
Donald
Neleon:
Hello.
HMJr:
Good morning.
N:
Good morning, sir.
HMJr:
I saw you in the movies last night, and I
want to congratulate you on your performance.
N:
Well, I've never seen myself in the movies.
HMJr:
Well, they showed a lot of pictures, and when
you came on - it was at RKO Kieth's - you got
the only applause of the evening.
N:
(Laughs)
HMJr:
And you were exceptionally good.
N:
Well, thank you. I appreciate that, sir.
HMJr:
You were exceptionally good. Don, I thought
I would tell you this; and unless you ask me
not to, I was going to raise this question of
our not having the allocations on these various
things for the Russians, at Cabinet, 80 the
President would know about it, see.
N:
Yes.
HMJr:
And - because he's - well, I don't want to,
80 to speak, put him on notice that we're not
getting the stuff and then if he wants to put
on extra heat and 80 forth and 80 on, that's
up to him.
N:
Well, Mr. Secretary, I don't know how anybody
can put on any extra heat. I mean, there
isn't & man in God's world can put on extra
heat. If - we're doing everything possible.
Bill Batt ie more interested in this than you
or I are, because he made the agreement, and
he's the man who 18 doing it; he's the man who
Regraded Unclassified
6
- 2 -
has the full authority on this.
HMJr:
But, look, there's thirty-seven thousand tone
of steel wire, thirty-eight thousand tone of
shell steel
N:
Yes, sir, and we didn't get the specifications
for it until February sixteenth.
HMJr:
and thirty-two thousand tons of hot rolled
steel
N:
Which we didn't get specifications for until
February sixteenth.
HMJr:
Well.....
N:
The alloy steel we didn't get specifications
for until February twenty-third.
HMJr:
Well.....
N:
Now, you can't pull stuff out of the hat. The
Russians had all that time to do it. I'm not
critical, but I mean, it just can't be done.
HMJr:
Well, don't you think the President ought to
know.
N:
Why certainly, but all I can tell him 1e that
everything in God's world - there isn't another
thing that anybody can do.
HMJr:
Well, then, let us at least . the Commander in
Chief, he should have the information.
N:
It's perfectly all right with me, sir. I have
no feeling about it whatsoever.
HMJr:
And - - I didn't want to bring it up without,
you know, telling you.
N:
He can fire B111 Batt and he can fire me and
hire somebody else, but you can't do any more.
HMJr:
Well, he can fire me - make it unanimous.
N:
Bo that.....
Regraded Unclassified
7
- 3 -
HMJr:
I say he can make it unanimous.
N:
That's all that can be done.
HMJr:
But - well, we've got one little piece of it,
and all I ever do is, when I'm not carrying
out my end of a contract, I like to let him
know.
N:
Well, that's perfectly all right, sir. I mean
HMJr:
And then if he knows, then he can never say to
me, "Well, if I'd only known, I could have done
BO and BO and 80."
N:
All right. If there's anything else that can
be done, then the only thing to do 1s to get
somebody else to do it.
HMJr:
Well, now, you don't mean that.
N:
Why, I mean it. I mean - honestly, Mr. Secretary.
Now I've had five letters from you. I get Mack
to come over, I get everybody come over here and
say you're excited because we're not doing it.
Well, my God, if there 1en't anything more can
be done.
HMJr:
Yes.
N:
I want to assure you of that. I got another
letter this morning.
HMJr:
Yeah.
N:
I replied. I showed you just the facts. We
couldn't get the specifications.
HMJr:
Yeah.
N:
You can't produce anything without a specification.
You know that 8.8 well as I. You know that you
can't do it without a specification, and we
couldn't get the specifications. Nobody would
give them to us.
HMJr:
Well
Regraded Unclassified
8
- 4 -
N:
Now, you can't produce & thing like alloy
steel, where there's some five thousand
specifications, without knowing what it 18
somebody wants.
HMJr:
Well, then, the President should know that
if the blame is with the Russians, then let's
get word to Stalin that they can't get it.
N:
We've got it now, but we got it on February
sixteenth, and you can't pull it out of B. hat
after you get it.
HMJr:
No.
N:
Now, I can assure you, that nothing more,
Mr. Secretary. It's perfectly all right. I
have no feeling about it. All I can say to
him 18 what I've been saying to you.
HMJr:
Yeah.
N:
I can say no more.
HMJr:
Yeah. Well, would you rather I didn't write
you any letters?
N:
No, no. I'm glad to have you write me letters.
That 1sn't the point, sir. But I'm just saying -
I want you to write me letters anytime, anywhere.
HMJr:
Have you seen the letters that I get from
Stettinius putting the heat on me?
N:
Well, we get letters from him, too.
HMJr:
Yeah.
N:
But - heat 16 fine, but it doesn't produce it
unless you know what you're going to put in
the heat.
HMJr:
Well, the other day, for instance, last week
they needed two thousand tone - I think it
was tin for tinplate - to fill up a load on
the West Coast. I think it was tinplate. And
Mack says they went to a mill and took the two
Regraded Unclassified
9
- 5 -
thousand tons, belonged to Great Britain, put
it on a special train and sent it out to the
West Coast. Now, maybe the President would
want to take some of our own steel and give it
to the Russians.
N:
Well, it just isn't there. I mean, you can
take it, but we've got to make it.
HMJr:
Yeah.
N:
You can only take the raw materials and ship
it to them.
HMJr:
Yeah.
N:
Now, it's just a question, and I'm getting up
the anewer to your letter again, sir, showing
you just what the situation 1s.
HMJr:
Yeah.
N:
But I want to assure you that there's nobody
here that doesn't realize the importance of
it.
HMJr:
Well, I appreciate that.
N:
And the man who's doing it is Bill Batt, who
made the agreement, and who's certainly much
more anxious to do it than even the President
18.
HMJr:
Yeah. Well, I'm glad that you're excited about
it.
N:
Well, I have been excited about it, sir.
HMJr:
Good.
N:
And we're not just sitting on it. We're very
much excited about it and want to get it done.
HMJr:
Well, Don, don't leave me with the feeling, you
know, we talked about it - - "Well, if he doesn't,
he can fire us," and that. I mean, I like to
call you up, and you know, not have that - I
Regraded Unclassified
10
- 6 -
don't want to get on that basis with you.
N:
No. Well, I didn't mean that, Mr. Secretary,
but what I meant.....
HMJr:
I mean, I don't want - I'd hate to feel - but
then if you make me feel like that, then.....
N:
Well, it wasn't your calling me up. It was
your saying that maybe he could do something
about it.
HMJr:
Oh.
N:
And not your calling me.
HMJr:
Because I'd like to feel that I can call you,
I oan write you, and
N:
You, sir, can call and write at any.....
HMJr:
Because if you're going to - let's be frank -
object to it, why I just won't do it any more,
that's all.
N:
Well, I don't object to it, Mr. Secretary. The
thing that struck me at the moment, and it just
struck me, and I'm always going to be with you
exactly as I feel.
HMJr:
What did get your goat?
N:
When you said the President would do something
about it. Well, now, sir, what can he do
more than we're doing?
HMJr:
Oh. Well
N:
Now if that is an indication that you feel that
we're not doing all we can do; and I want to
assure you that ien't true.
HMJr:
Would you rather I didn't bring it up at Cabinet?
N:
No. I'd rather you brought it up, eir. I think
it's all right.
Regraded Unclassified
11
- 7 -
HMJr:
Okay.
N:
All right.
HMJr:
Thank you.
N:
Good-bye.
Regraded Unclassified
12
March 6, 1942
12:16 p.m.
HMJr:
Hello.
Operator:
Mr. Mack.
HMJr:
Hello.
Clifton
Mack:
Hello.
HMJr:
Mack.
M:
Yes, sir.
HMJr:
I was just talking to Mr. Donald Nelson.
M:
Yes.
HMJr:
And he's getting a little excited. I guese
I'm - about the pressure I'm putting on him.
M:
(Laughs)
HMJr:
Which is all right.
M:
Yes.
HMJr:
Now, he made certain statements which I wanted
to check, because I'm bringing it up - this
stuff, this list that you gave me, he said the
trouble is they didn't got the specifications
until February sixteenth.
M:
Yes.
HMJr:
Do you mean on all this stuff, steel wire,
steel billets, steel alloy, stainless steel,
strips, and hot rolled - they didn't get the
specifications until February sixteenth?
Mi
On a good part of it, that's right.
HMJr:
Well, do you know which - could you look it
up and then call back Miss Chauncey 80 she
could insert the figuree?
M:
I'll be glad to.
Regraded Unclassified
13
- 2 -
HMJr:
Now, for instance, let's take steel wire.
There's thirty-seven thousand tone.
M:
Yes.
HMJr:
Maybe they got the specifications on some of
it and some of it they didn't.
M:
That's right. And that applies to some of
the other items, too, that they got speci-
fications on some on one date, and some more
on another date and BO on.
HMJr:
Well, could you get that to me before two
o'clock?
M:
Surely.
HMJr:
I mean - and - but keep it in the same order,
you see.
M:
oh, yes.
HMJr:
Because I think Donald Nelson just doesn't know
what he's talking about.
M:
Well, very good, and I'll be glad to do that.
HMJr:
Because he's blaming the Russians for all of
this.
M:
Yes.
HMJr:
But take this list that you've got, in the same
order, and break it down as to when - how many
dates are there. The Russians first give us the
specifications, is that the first move?
M:
Well, the first date 18 that they give the order
to the Lend-Lease.
HMJr:
Yes,
M:
And then the Lend-Lease cleare it to the War
Production Board.
HMJr:
Yeah.
M:
And that's the first date that Nelson has it.
Regraded Unclassified
14
- 3 -
HMJr:
The first - he - Nelson has what?
M:
The date that he gets the requisition from
the Lend-Lease organization.
HMJr:
Well, take, for instance, the big item - steel
wire.
M:
Yes.
HMJr:
Can you break that down 8.6 to when Lend-Lease
got it?
M:
I think so. I think 80. I think we can show
the date that it went to War Production Board,
in any event, because they send the - Lend-
Lease sends the requisitionsto War Production
Board at the same time that they send them to
us.
HMJr:
Well, that'll be good enough.
M:
Yes.
HMJr:
That would be good enough.
M:
All right then. And I'll get that on each
one of the items and in the order that they're
shown.
HMJr:
Yeah.
M:
And broken down according to dates and amounts.
HMJr:
Yeah.
M:
All right.
HMJr:
And get it over here before - by a quarter of
two.
M:
Very good.
HMJr:
Please. If possible.
M:
Yes.
HMJr:
I say, if possible, by 8. quarter of two.
Regraded Unclassified
15
- 4 -
M:
All right, we'll do that. We'll get busy
on it right away.
HMJr:
Thank you.
M:
All right.
Regraded Unclassified
March B, 1942
Fd Foley
Secretary Morgenthau
I want reassurance from you that by Monday we
will be able to get into General Aniline and Dye+
I don't went to hear on Monday that because one
or both of the men whom McConnell wants to assist
him are not ready to do so things again have to
be postponed. Please get in touch with Bob
McConnell and make sure that come Hell or high
water, he is ready to step into General Aniline
and Dye on Monday! I cannot delay this matter any
longer or accept any more excuses from anybody.
Explain that to McConnell. First it was Summer
Pike and we delayed on his account, and now I want
to make sure that McConnell is ready to step in
on Monday. As I say, I don't want any excuses
from him. Please let me know during the day.
I think it would be wise if you would talk
over with Ferdinand Kuhn the question of preparing
B. statement to be given out to the press explaining
just what our part is going to be on the West Coast,
emphasizing the fact that we are using the Federal
Reserve Bank of San Francisco as our fiscal agent.
I would like to see & draft of the statement.
Regraded Unclassified
17
March 6, 1942
12:20 p.m.
HMJr:
Can you report any progress?
Edward
Foley:
Well, I got your memorandum, and what I'm
doing is getting up a timetable and 8. schedule
for you, showing just what is the best we
think we can do and when we can do it.
HMJr:
Yeah, but I don't want to hear on Monday be-
cause McConnell can't get either of these
two men it's postponed again for a week.
F:
Well, I - I mean, we can't permit that,
and
HMJr:
Because you were 80 rash to say you'd do all
three by Monday, you know.
F:
Well, that's
HMJr:
I'll hold you to the General Aniline, anyway.
F:
Well
HMJr:
But you know I don't want to come in Monday
and then they
F:
Well, I realize that, Mr. Secretary, and I was
disappointed, too, when I couldn't have McConnell
here today and get this decided as to whether
these other fellows are coming in with us; and
I pushed him pretty hard. I called him - I
talked with him at his home just before you
called me last night.
HMJr:
Yeah.
F:
And he said, "Ed, I got out of bed to come up
there today, and I've got to give my throat a
rest and I've got to get over this cold; be-
cause if I go into this thing the first of next
week, it's going to take a lot out of me and
I've got to give it all my time and I want to
get over this cold."
HMJr:
Yeah. That's all very nice, but when I come in
Regraded Unclassified
18
- 2 -
Monday - have you talked to him today?
F:
No, I haven't talked with him since I talked
with him last night.
HMJr:
Well, what - but when we come in Monday, I
don t want any alibi
F:
Right.
HMJr:
:'''' that he can't go on it, because if he
1en t going to be able to go ahead, no matter -
irrespective - then let's look for somebody
else today, Ed.
F:
Yeah.
HMJr:
I don't want to wait until Monday. I can't
do it now. God damn it, I've told the President
we're going to do it, now we've got to do it.
F:
Yeah.
HMJr:
And you told me we would be ready.
F:
Right.
HMJr:
Now, if McConnell isn't ready - irrespective of
anything else - to step in there Monday, then
let's drop him and get somebody else.
F:
All right.
HMJr:
Now, I mean, I want to know from you from him
is he ready to go to work on this thing Monday,
with no if's or conditions.
F:
All right.
HMJr:
No alibis.
F:
All right. I'll call him.
HMJr:
Because I simply can't wait until Monday, and
then have to wait another week.
F:
Right.
Regraded Unclassified
19
- 3 -
HMJr:
Now, I've had this thing - I've had this - I've
gone to all this great effort to get this
authority, now, by God, let's exercise it.
F:
Right.
HMJr:
And the thing that I'm worried about, McConnell
will step in here and say, "Well, I can't get
these two men, 80 I can't do it."
F:
Well
HMJr:
I want to know
F:
Well, I think we've got a job to do on Monday
to get for him the help he wants.
HMJr:
No, but the point that I want you to call him
up on the phone and say 18, "Look, the Secretary
wants to know are you ready, unconditionally,
to take off your coat on Monday and go to work
and 688 us through on this."
F:
Right.
HMJr:
Unconditionally.
F:
All right.
HMJr:
See?
F:
Right.
HMJr:
"Because if you're not ready to do it, then
he'll have to look somewhere else."
F:
Yeah. Okay.
HMJr:
Now that gives you two days to turn around in,
Ed. I'm doing something for you.
F:
All right. I'll do it.
HMJr:
What?
F:
I'll call him right away.
Regraded Unclassified
20
- 4
HMJr:
Well, ien't it taking time by the forelocks?
F:
Well, I think that - yes, if we can find some-
body else; but I think McConnell will do this,
and I think that we can convince these other
fellows that they've got to help him do it, and
that's what he wants us to do on Monday morning.
HMJr:
Well - but if we can't, then we're stuck again.
F:
Well, and then - then we've got to get other
people to help him.
HMJr:
No. Well, then let him say unconditionally
that he'll go ahead unconditionally and if we
don't get those, we
F:
We got other people.
HMJr:
That's all right.
F:
Well, I think he'll do that.
HMJr:
But I want him to say unconditionally that
he'll personally go ahead, and if it's not
those two, it'll be some other two.
F:
All right. I'll talk to him right away.
HMJr:
But we've got to get that in hand.
F:
Well, I know that.
HMJr:
Now, the other thing - well, I think what I'm
telling you is helping - I mean, to - if he
says, "Well, I can't do it unless those two
and no other two," then we know we're sunk.
F:
Yeah. Well, I don't think he'll say that.
HMJr:
Well, if he won't. Now, the other thing - did
McCloy say Stimson would write me a letter?
F:
Yes. And he told me last night that the letter
had been drafted.
HMJr:
Well, I haven't got it.
Regraded Unclassified
21
- 5 -
F:
Well, it's probably in the mill.
HMJr:
What?
F:
It's probably in the mill. I'll check up on
that right away.
HMJr:
You check up on that.
F:
Okay.
HMJr:
Got anything else?
F:
No. No.
HMJr:
And did you say the Polish fellow, what's his
name, is going to go out tomorrow?
F:
Szymczak, that's right. He's going out on the
plane in the morning.
HMJr:
Okay.
F:
All right, sir.
HMJr:
Thank you.
F:
Good-bye.
Regraded Unclassified
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
DATE March 6, 1942
10
Secretary Morgenthau
FROM
E. H. Foley, Jr.
I have just finished talking to Robert McConnell
at Middleburg, Virginia. He tells me that I may say to you
that he feels committed on General Aniline & Film unless
you have changed your mind. From his preliminary talks
with Robert Wilson, George Moffat and Dr. Weidline, all of
whom will be in my office at 11:00 o'clock on Monday, he
feels reasonably sure that at least two of the three will
agree to serve on the board of directors. He also said
when he comes up on Monday he will be prepared to go on to
New York with Joe O'Connell at the conclusion of the meet-
ing.
As soon 8.5 we have agreed on 8 board of directors,
Judge Mack will be advised and told to call a meeting of
the old board at the earliest possible moment. It may be
that & quorum of the board cannot be gotten together before
Wednesday as some of the members live 8.5 far away as Cleveland
and Chicago. However, the meeting will be held as soon 8.8
possible, resignations will be accepted, the new board in-
stalled, and Robert McConnell made president in place of
Judge Mack.
From 8. strictly legal standpoint, there might be
some advantage in accomplishing this program at a stock-
holders" rather than board of directors' meeting but such
a meeting would require ten days' notice under the Delaware
law and since we don't own all of the stock, the statutory
requirement could not be waived. It is contemplated that
the action to be taken at the board meeting next week will
be ratified at a stockholders' meeting as soon as such B.
meeting can be called legally.
9.107h.
Regraded Unclassified
O:
23
Miss Chauncey --
3-9-42
This was noted by Mr. Foley
nd is returned for your file.
s
MR. FOLEY
Regraded Unclassified
TREASURY DEPARTMENT
20mg 24
INTER OFFICE COMMUNICATION
DATE March 6, 1942
TO
Secretary Morgenthau
FROM Gerard Swope
I am in receipt this morning of & letter
from Mr. Charles Belknap which states as follows:
16
"The more I think of Carter for that job
the better I think ne will be, and I am of the
opinion that the Government will make B. mistake if it
does not take him.
"Quite naturally he wants to assist in this
situation and still has before him the question of
accepting the commission as a Captain in the United
States Naval Reserve.
ef.
Regraded Unclassified
25
WAR DEPARTMENT
WASHINGTON
March 6, 1942
My dear Mr. Secretary:
Mr. McCloy telle me that your Department has been
very prompt to offer its assistance in connection with some
of the problems that are involved in the evacuation of Japanese
and others from the West Coast areas. I have been concerned
about the preservation of property values of the Japanese as
it directly affects the success of the proposed movement. In
this connection I have learned of the suggestion made by you
for the use of the Federal Reserve Banks and your personnel in
connection with arrangements to assist the evacuess in the dis-
possl of their property, and > am my glad " accept
much help.
I understand that the President is considering A
proposed Executive Order which will designate a general admin-
istrator of some of the problems of resettlement which are
involved in the evacuation. I do not understand that this
order should interfere in any way with arrangemente you have
in mind, but, at least, pending the execution of such an order
and the establishment of any other arrangements, I would very
much appreciate it if you could assist us in carrying out
Executive Order (No.9066) along the lines of the memorandus
entitled "Suggested Program for the Federal Reserve Bank of
San Francisco and other Public Agencies to deal with property
of evacuess from Pacific Coast Military Areas," which I believe
was prepared in your Department.
Faithfully yours,
Secretary of War
The Honorable
The Secretary of the Treasury
Regraded Unclassified
26
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
Secretary Morgenthau
March 6, 1942
TO
FROM
Mr. Foley
The plans for handling the West Coast situation
are proceeding as follows:
1. Assistent Secretary McCloy is taking the
following people with him in his plane leaving
at 6 a.m., tomorrow morning from Bolling Field:
John Pehle,
Ansel Luxford of the General Counsel's office,
Erwin May, head of the Foreign Funds
Investigative Unit,
Ward Stewart, Pehle's administrative assistant,
Governor Szymczak of the Federal Reserve System.
This plane will arrive in Los Angeles Saturday even-
ing and, unless McCloy wants the Treasury group to
stay in Los Angeles on Sunday, the Treasury group
will go on by plane Saturday night to San Francisco
to begin immediate discussions with the Federal Re-
serve Bank.
2. The Treasury is sending six additional men
by planes leaving tonight and tomorrow morning for
San Francisco. The personhel to be included in this
group are shown on the attached list.
3. We had originally planned to send several
more men but the San Francisco Federal has indicated
that it believes it can do the job without such men.
Accordingly, we are going to look the situation over
before sending further personnel.
4. A press release is being prepared which will
be issued at San Francisco after consultation with
the San Francisco Federal and military authorities.
5. By Monday morning, the program will be well
under way.
9.10.7L.
Regraded Unclassified
27
TREASURY PERSONNEL GOING TO SAN FRANCISCO
BY CHARTERED PLANE
Foreign Funds Control
Judson Jones
D. H. Blake (speaks Japanese fluently)
Robert Evans
General Counsel's Office
Neil Naiden
Albert I. Edelman
Monetary Research
James E. Wood
28
FROM:
MR. SCHWARZ'S OFFICE
TO:
The Secretary
Foreign Funds is asking to borrow
Mr. Shaeffer of my office to help
on the mission to the west coast
in connection with the alien
evacuees. I am willing to let
him go along if you approve
because he has been following the
subject closely and would contribute
more to the success of the mission
than others. That would make
Mr. Rivers next in command and
acting in charge during lunch time
and while I might be at White House
press conferences. Does that meet
with yourapproval?
3/6
TO:
March 6, 1942.
Secretary Morgenthau
I have talked to Foley,
Pehle and Schwarz and we have
agreed that it is not desirable
to send any press relations man
with Pehle.
prr.
FROM: MR. GASTON
Regraded Unclassified
30
March 6, 1942
1:13 p.m.
HMJr:
Clif.
Clifton
Mack:
Yes, sir.
HMJr:
Do you know what the shipping situation is
for the Russians. Hopkins told me that there
were boats waiting in ports for some of this
steel. Do you know whether that's true or
not?
M:
Yes, I think it is. Just about a week ago
they, after a shortage for a long time, they
were able to get together eleven boats
HMJr:
Yes.
M:
.....which are now in Philadelphia loading.
HMJr:
Yes.
M:
And there are two out on the West Coast.
HMJr:
Yes.
M:
So that we sent out word to all of our field
offices to expedite the shipment to try to
advance shipping to do everything possible
to
HMJr:
But the boats are there, actually there?
M:
Yes.
HMJr:
What was that you took the other day, you said
it was two thousand tone of tinplate?
M:
Well, there were two thousand tone of copper.
HMJr:
Copper.
M:
That had been - that was to be supplied by the
British.
HMJr:
Oh.
M:
And the British weren't able to meet the
Regraded Unclassified
31
- 2 -
requirement for this month, 80 that we're
supplying it.
HMJr:
Yes. But.....
M:
And then there was also some tinplate.
HMJr:
Yes.
M:
There's fourteen hundred and fifty or sixty
cases of tinplate that we from the frozen
stocks
HMJr:
Oh, yeah.
M:
that is being made available to the
Russians.
HMJr:
Right, Okay. I haven't seen Miss Chauncey.
I don't t know whether you've been able to give
her that stuff or not.
M:
Well, it's being written up right now. John
Loeb and Lind are working on it, and it's just
about - it'll be ready in just & few minutes.
HMJr:
Then you'll get it over.
M:
And we'll get it over immediately.
HMJr:
Oh, 1s Loeb working on that?
M:
Yes.
HMJr:
Good. Is this his stuff?
M:
This is the work he does, yes.
HMJr:
Good.
M:
All right, sir.
HMJr:
Thank you.
M:
Good-bye.
Regraded Unclassified
32
TREASURY DEPARTMENT
PROCUREMENT DIVISION
OFFICE OF THE DIRECTOR
WASHINGTON
March 6, 1942
MEMORANDUM TO THE SECRETARY:
As requested I am supplementing my memorandum of yes-
terday's date with the information you wish relative to the
indicated deficiencies of Protocol requirements as of April
lst, showing the requisitions received and total allocations
for delivery by April 1st. The information furnished as to
allocations was obtained from Mr. Schucker of the steel group
of W. P. B.
Material - Tool Steel
Protocol Requirement to April lat
3000 Tons
Requisitions
Date
Total Allocated For
Received
Amount
Received
Delivery by April 1st
R-222
611
Tons Dec. 19, 1941
1511 Tons
R-223
390
If
Dec. 19, 1941
R-1022
27
If
Feb. 4th
R-1403
386
R
Feb. 18th
R-1415
1148.1
=
Feb. 21st
There is a deficiency in allocation of 1051 tons, and
in requisitions received of 438 tons - Total deficiency
1489 tons.
Material - Steel Wire
Protocol Requirement to April lat
42000 Tons
Requisitions
Date
Total Allocated For
Received
Amount
Received
Delivery by April lst
R-224
355.1
Tons
Dec. 23, 1941
4202
FORDEFENSE
R-225
55
If
Dec. 23, 1941
R-226
90
#
Dec. 27, 1941
BUY
R-227
190
"
Dec. 23, 1941
UNITED
STATES
R-228
200
e
SAVINGS
Dec. 23, 1941
BOXDS
AMESTAMPS
Regraded Unclassified
- 2 -
33
Requisitions
Date
Total Allocated For
Received
Amount
Received
Delivery by April 1st
R-229
200
Tons Dec. 23, 1941
R-230
150
"
Dec. 23, 1941
R-231
2000
-
Dec. 23, 1941
R-941
700
#
Feb. 2nd
R-942
200
#
Feb. 2nd
R-232
7.5
"
Dec. 23, 1941
R-233
40
W
Dec. 23, 1941
R-452
990
.
Dec. 27, 1941
R-468
455
W
Dec. 27, 1941
R-469
344.3
"
Dec. 27, 1941
R-510
27.5
"
Jan. 2nd
R-527
99.53
If
Jan. 3rd
R-943
200
"
Feb. 2nd
R-944
200
If
Feb. 2nd
R-945
200
"
Feb. 2nd
R-1023
43
If
Feb. 4th
R-1018
200
If
Feb. 4th
R-1024
60
"
Feb. 4th
R-1025
200
W
Feb. 4th
R-1086
3.3
"
Feb. 4th
R-1032
90
#
Feb. 7th
R-1084
127
"
Feb. 7th
R-1089
35
12
Feb. 7th
R-1090
36.5
-
Feb. 7th
R-1091
200
"
Feb. 7th
R-1092
30
"
Feb. 7th
R-1093
25
If
Feb. 7th
R-1384
30
"
Feb. 17th
R-1385
10
"
Feb. 17th
R-1463
10000
#
Feb. 24th
R-1464
10000
-
Feb. 24th
R-1591
120
If
Mar. 3rd
R-1592
400
If
March 3rd
R-1598
2550
If
March 3rd
R-1640
640
WI
March 4th
Require 37,798 tons March allocation to meet April 1st
Protocol requirement. Allocation deficiency 31503 tons. Re-
quisition deficiency, 6295 tons.
Material - Steel Billets (Shell Steel) Protocol Requirement
to April 1st - 48,000 Tons
R-528
16000 Tons Jan. 3rd
10,000 Tons
R-1379
56000
If
Feb. 12th
Require 38000 tons March allocation to meet April 1st
Protocol requirement.
34
- 3 -
Material - Steel Alloy Tubes
Protocol Requirement to
April lat - 1200 Tons
Requisitions
Date
Total Allocated For
Received
Amount
Received
Delivery by April 1st
R-1016
60
Tons
Feb. 3rd
R-1017
70
Feb. 3rd
35 Tons
There is a deficiency in allocation of 95 Tons and in
requisitions received of 1070 Tons. Total deficiency-1165
Material - Stainless Steel Wire Protocol Requirement to
April 1st - 120 Tons
R-234
12
Tons
Dec. 27, 1941
12 Tons
R-928
5
"
Jan. 27th
R-940
5
If
Feb. 2nd
There is 8. deficiency in allocation of 10 tons and a
deficiency in requisitions of 98 tons. Total deficiency,
108 Tons.
Material - Cold Rolled Steel Strips
Protocol Requirement
to April lst-48000 Tons
R-179
400
Tons
Dec. 14, 1941
28592 Tons
R-180
330
If
Dec. 14, 1941
R-181
75
W
Dec. 17, 1941
R-664
27.5
Jan. 16th
R-665
1.6
#
Jan. 16th
R-1026
845
If
Feb. 4th
R-1027
1630
"
Feb. 4th
R-1028
300
#
Feb. 4th
R-1029
12002
Feb. 4th
R-609
3465
Feb. 4th
R-1031
75
Feb. 4th
R-608
2000
II
Feb. 4th
R-1053
400
W
Feb. 5th
R-1055
660
"
Feb. 5th
R-1085
50
Feb. 7th
R-1372
10065
If
Feb. 12th
R-1371
15000
Feb. 12th
R-1382
200
If
Feb. 17th
R-1383
200
a
Feb. 17th
R-1387
16.8
"
Feb. 17th
R-1402
89
-
Feb. 18th
R-1407
75
-
Feb. 18th
Regraded Unclassified
- 4 -
35
Requisitions
Date
Total Allocated for
Received
Amount
Received
Delivery by April 1st
R-1465
375 Tons Feb. 24th
R-1483
6000
#
Feb. 27th
Require 19408 Tons March allocation to meet April 1st
Protocol requirement.
Material - Hot Rolled Steel
Protocol Requirement to
April 1st - 42000 Tons
R-1061
6000 Tons Feb. 6th
10000 Tons
R-1088
200
#
Feb. 7th
R-1390
400
W
Feb. 18th
R-1399
26000
Feb. 18th
R-1400
24000
Feb. 18th
Require 32000 Tons March allocation to meet April 1st
Protocol requirement.
According to our records the Russians have not submitted
requisitions to cover the entire Protocol requirements to
April 1st in the case of Tool Steel, Steel Alloy Tubes and
Stainless Steel Wire, likewise Steel Wire.
Director of Procurement
your Clifton' Chisa E. Mack
Regraded Unclassified
36
WAR PRODUCTION BOARD
WASHINGTON, D. C.
OFFICE OF
DONALD M. NELSON
CHAIRMAN
March 6, 1942
Dear Kr. Secretary:
With reference to your letters of February 19, and March 4 and 6
and mine of February 28, concerning our commitments under the Moscow Protocol,
L enclose the following two documents:
(1) Report of our Iron and Steel Branch covering our total
iron and steel commitments--441,180 tons under the
Protocol and 593,534 tons in addition thereto.
(2) Tabulation covering the eleven items other than steel
covered in your letter of February 19.
de should bear in mind, when comparing commitments with what can be
nade available by April 1, that many requisitions called for unusual specifi-
cablons necessitating either subsequent adaptation to American standards or
mavoidable deferments of delivery. There have also been very considerable
delays on the part of the Russians in submitting requisitions. For example,
un to the middle of January We had received requisitions for only about 60,000
Lons of steel, which since then have been increased to a total of over 1,000,000
Loris. The latter figure is more than twice the Protocol commitments.
It is for the above reasons that our report on steel shows an expected
deficit on April 1 of approximately 100,000 tons below the Protocol commitment.
Udspite this, however, present schedules call for e production of 342,619 tons
by May 1, which compares with our Protocol obligation by then of 343,140 tons.
niess results are being achieved, even though most of the items involved require
20 to 60 days in the manufacturing process alone.
Although your letters did not include all items (other than implements
15 war) covered by the Protocol, we have also been preparing reports on chemicals,
cibles, leather and industrial equipment which will be forwarded to you shortly
ad will complete the tussian picture.
Sincerely yours,
4th "Ulson
Donald M. Nelson
FOR (onorable
I hope you
The IE Decrotary of the Treasury read the first when 7 rays
Regraded Unclassified
37
REPORT ON
POSITION OF RUSSIAN LEND-LEASE STEEL PROGRAM
AS OF MARCH 4, 1942
Paul F. Schucker
Iron and Steel Branch
War Production Board
27188
38
INDEX
Page
Letter of Transmittal
2
Commitments
3
Specifications.
4
Classification of Requisitions
6
Allocations Made through March 4, 1942,
7
Expected Production
9
Armor Plate
12
Hard Alloy and Outting Tools
13
High Speed Steel
15
Tool Steel
17
Calibrated Steel
20
Hot Rolled Steel
22
Steel Billets Or. - S1. - Mn
23
Cold Rolled Strip
25
Cold Rolled Sheets
26
Tin Plate
27
Steel Wire
29
Wire Rope
31
Alloy Tubes
33
Stainless Steel Wire
34
Barbed Wire
35
Ball Bearing Wire and Bars
37
Die Blocks
39
Chrome Alloy Wire
40
Drill Pipe and Line Pipe.
41
011 Well Casing and Tubing
42
Aircraft Steels
43
Pressure Tubes
44
Terne Plant
45
Rails and Accessories
46
Railroad Car Arles
47
39
27188
WAR PRODUCTION BOARD
WASHINGTON, D. c.
Mcrch 5, 1942
Mr. C. E. Adams, Chief
Iron and Steol Branch
War Production Board
Washington, D. C.
Dear Mr. Adoms:
There is transmitted herewith a report on the "Position
of Russian Lend-Lease Steel Program as of March 4, 1942". This
report has been written in response to numerous inquiries which
we have received from sources both within and without the Iron
and Steel Branch. In the preparation of the report, the point
of brevity has been kept in mind but despite this, the report
1a rather long. This was unavoidable if a complete picture of
each of the many aspects of the Russian steel program was to be
presented.
The report shows that, while the Russian steel program
was over three months late in really getting under way because
of delay in the receipt from the U. S. S. R. of requisitions or
specifications, these began to arrive in great volume shortly
after the middle of January with the result that production of
steel for the U. S. S, R. will reach a high level in March.
In the preparation of this report, I have had the valuable
assistance of each of the men in the Iron and Steel Branch concerned
with the individual steel products in the program. Each of these men
concurs in the toxt regarding his particular product.
Should there be any further information needed regarding
any part of the report, I shall be glad to endeavor to obtain it
for you.
Yours very truly,
PalF.Schucker
Paul F. Schucker
Iron and Steel Branch
-3-
40
27188
REPORT ON
POSITION OF RUSSIAN LEND-LEASE STEEL PROGRAM
AS OF MARCH 4, 1942.
Commitments
Under the terms of the Moscow Protocol, the United States committed
itself to supply Russia with stipulated amounts of various steel products
monthly for the nine months' period from October 1, 1941 through June 30,
1942. By December 31, 1941, three months after the beginning of the Protocol
period, the Russians had filed requisitions totaling but a little more than
one months' commitment. As it was impossible to order steel without knowing
the details of what was wanted and, as it takes from 20 to 60 days to manu-
facture and ship steel products after they are ordered, the deficit under the
Protocol commitments was increasing very rapidly.
Mr. W. L. Batt, Director of the Materials Division, therefore, prepared
a report, dated January 8, 1942, on the "Condition of the Soviet A1d Program
as Provided in the Protocol Agreement." This report reaffirmed the Protocol
commitments in general and stated that the full deliveries called for could
still be furnished to the U.S.S.R. by June 30, 1942, provided three important
qualifications were fulfilled. These were that
a. Requisitions for the full amounts should be received by January
20, 1942.
b. Sizes and specifications should be conformable to American
standards.
C. Sizos and specifications should be sproad over the full range
of Amorican production in proportion to the respective production
capacities for the various.mizes and specifications.
27188
-4-
41
As a rosult of Mr. Batt's report, requisitions or advance specifi-
cations were presented in great volume during the period January 19 to
22, inclusive and by January 23 a total of 751,200 gross tone, or two-
thirds more than the full Protocol commitment, had been received by the
Iron and Stool Branch. This total has increased since to 1,034,714 gross tons
by the continued receipt of additional advance specifications. Unfortunately,
tho greator part of this tonnage consisted of sizes and spocifications which
did not meet the qualifications set out in Mr. Batt's report. Sizes and
specifications wore not conformable to American standards, nor were theywide-
ly spread over tho full range of Amorican production, Consequently, serious
questions aroso 0.8 to the rigidity of the Protocol commitments. Dospite
this, every effort has been mado by the Iron and Stool Branch to furnish the
stool dosired by tho U.S.S.R. as expeditiously as possible.
Specifications
From the beginning of the Russian stool program, the Iron and Steel
Bracch's attätude was that stool produced for the Russians (as woll stool
produced for the British, Chinoso and Dutch) should conform to American
standards for two principal roasons: First - to maintain American stool
production at as high n lovel as possible land, Second - sinco shipping
limitations or changed circumstances abroad might roquire somo revision of
actual shipmonts from timo tottime, it should bo possible to divert matorial
schoduled for Russian dolivery to Amorican, British or other usors and vico
vorsa.
Requisitions coming to tho Iron and Stool Branch from the Offico of
Lond-Loaso Administration in November and Docember, in practically ovory case,
had to bo changed in many of the dotails of sizos, chomical analyses and
physical proporties. Thoso changoe wore discussed with the Russian repre-
sentatives and their agreement thereto was obtained. It was necessary in
80 many cases to have the formal requisitions, already cleared by OLLA,
Regraded Unclassified
27188
-5-
42
rewritten that the Russians were asked in December to present advance specifi-
cations first to the Iron and Steel Branch for approval or change. Since that
time, formal requisitions are presented to OLLA for approval and forwarded
to the Iron and Steel Branch for allocation only after the advance specifi-
cations have been cleared.
Many of the questions which arise from the advance specifications aa
presented are of a highly technical nature. It has often been necessary to
call steel company metallurgists in to the WPB for consultation on Russian
specifications with the Iron and Steel Branch's metallurgists and product
mon. In many cases, the Russian representatives must communicate with
Moscow for authority to accept the modifications suggested. For these
reasons there have been considerable delays prior to the allocating of
steel products for the U.S.S.R. and even after allocation, specification
problems have delayed the placing of contracts. All this could be avoided,
and steel products could be supplied to the U.S.S.R. much faster, if the
Russians would present specifications which conform to American standards.
Another source of delay has been the tendency of the U.S.S.R. to
ask for only the highest grade of each product rather than the standard
commercial grade of large seale production used for the same purposes in
this country. This tendency has been discussed with the Russian representa-
tives who have stated that it is bocause in the U.S.S.R. it is believed that
the United States can make unlimited amounts of the vory best materials and
that Moscow cannot undorstand that there can be any difficulty of procurement.
For instance, the original Russian request for tin plate vas for
1-A Charooal grado, primes only, with a 3.00 1b. coating per base box,
whereas practically all tin plato used domestically and all shipped under
Lend-Lease to the British was 1.25 and 1.50 lb, coatings, primes and seconds.
Regraded Unclassified
27188
-6-
43
The bulk of the alloys asked for by the U.S.S.R. specified more chrome,
vanadium, nickol, etc. than 18 found in steels used for similar purposes
here. The vires requested were most always in the finer sizes and of
specialty grade. The shell steol required the most difficult heat treat-
ment. The wire ropes wore almost all in fine aircraft sizes. These factors
will all be discussed in more dotail later herein. Neodless to say, each
of those and similar matters trae been viewed by the Iron and Steel Branch
in the light of a sincere dosire to help the U.S.S.R.
Classification of Requisitions
Due to the vagueness of the terms used in the Protocol to design-
ate the various catogories of steel products, differences of opinion have
arison as to which Protocol category certain of the requisitions should
be placed under. The Iron and Steel Branch has classified oach requisition
and advance specification under the catagory in which the product called
for by the requisition or advance specification falls according to com-
mercial practice in this country. In many cases, the product 1e not classi-
fiable under any of the Protocol categorios but this has not meant that
the Iron and Steel Branch has not endoavorod to arrange for its production
for the U.S.S.R. with B.B. much vigor as for a product which is clearly
covered by the Protocol. In each such caso proper authority has boon
obtained. When roquests for material not covered by tho Protocol are re-
colved by the Iron and Steel Branch, thoy are cloared without delay - first,
with Mr. W. L. Batt, Chairman of the W. P. N. Requirements Committoe and -
socond, with tho Office of Lend-Lease Administration before allocation.
In order that no misundorstandings may arise in the future and
BO that future commitments can be appraised intolligontly, it is proposed
to ask for futuro Russian stool programs to be stated in classifications
which are clearly understandable. With this in view, the Iron and Stoel
Branch 18 proparing a tablo of stool classifications for transmittal to the
Russians.
Regraded Unclassified
27188
-7-
44
Allocations Made Through March 4, 1942
The position of the Russian Lend-Lease steel program on March 4,
1942 is shown in the table on Page 8. The Protocol commitments shown
therein are in metric tons of 2,204 1bs. each, the unit used in the Protocol.
Requisitions allocated and advance specifications on hand but not yet
cleared or allocated are in gross tons of 2,240 lbs. each, the customary
unit for steel exports. In this report, no distinction 1e made between
these two kinds of tons, although if the Protocol commitments were con-
verted to gross tons they would be 1.6% lower.
As shown in the table, requisitions totaling 540,576 tons, or
more than the full nine months' Protocol commitment of 441,180 tons have
already been allocated. In addition there are 494,138 tons of advance
specifications on hand which will be cleared to the fullest extent possible
and allocated 0.8 quickly as possible. Where there are commitment balances
not yet allocated, an examination of the figures will show whether the
reason 1s because specifications for sufficient tonngges have not been
presented or because advance specifications for sufficient tonnages have
not yet been conformed to American standards. The status of the advance
specifications on hand for each product category 1s discussed later herein
under the individual product heading.
Regraded Unclassified
POSITION OF RUSSIAN LEND-LEASE STEEL PROGRAM
ON MARCH 4, 1942
45
IN GROSS TONS (a)
Moscow Protocol
Protocol Commitment(a)
Requisitions
Balance of
Advance
Classification
Allocated
Commitment
Per
9 Months
Specifications
thru
Not Yet
Item
Material
Month
thru June 142
on
11ar.4,'42
Allocated
Hand
( ) excess
25
Armor Plate
1,000
9,000
10,000
(1,000)
-
26
Hard Alloys & Cutting Tools
(b)
(b)
400
(b)
High Speed Steel
100
2,460(b)
28
900
900
f
870
29
Tool Steel
500
4,500
1,405
3,095
30
(o)
21,498
Cal ibrated Steel
(e)
5,865
(a)
89,720
31
Hot Rolled Steel
7,000
63,000
76,200
(13,200)
-
32
Steel Billets
8,000
72,000
16,000
56,000
56,000
33
Cold Rolled Strip
8,000
72,000
56,069
15,931
8,130
34
Cold Rolled Sheete
8,000
72,000
59,160
12,840
-
35
Tin Plate
4,000
36,000
36,000
-
-
36
Steel Wire
7,000
63,000
26,713
36,287
19,253
37
Wire Rope
1,200
10,800
1,000
9,800
9,565
38
Alloy Tubes
200
1,800
610
1,190
2,714
39
Stainless Steel Wire
20
180
22
158
590
41
Barbed Wire (& Staples)
1,000
36,000
40,170
(4,170)
-
Items Not Covered by Protocol
A
Ball Bearing Wire & Bare
-
#
500
(500)
10,500
B
Die Blocks
-
-
1,160
(1,150)
-
C
Chrome Alloy Wire
#
-
410
(410)
822
D
Drill Pipe & Line Pipe
.
-
55,500
(55,600)
54,600
E
011 Well Casing & Tubing
.
-
58,500
(58,500)
87,400
F
Aircraft Steels
-
-
-
-
81,055
G
Pressure Tubes
-
-
2,000
(2,000)
8,937
H
Terne Plate
.
-
2,000
(2 000)
-
I
Rails & Accessories
,
-
90,000
(90,000)
-
J
Railroad Car Axles
#
1
-
40,000
X
Miscellaneous
-
-
2
(2)
134
Totals
49,020
441,180
540,576
(93,131)
494,138
Notes,
(a) Protocol commitments are in motric tons of 2204 lbs. each. In this table no distinction La made between gross tons
(of 2240 lbs. each) and metric tons.
(b) The Protocol commitment is $100,000 worth per month, or $900,000 total. Specifications presented to the Iron and
Steel Branch and classified under this category are for material estimated to cost about $2,500,000. Substential
additional requisitions under this category have been filed with the W.P.B. Tools Branch.
(o) Protocol contains no commitment for "Calibrated Steel". U.S.S.R. has asked for 13,000 tons per month.
27188
-9-
46
Expected Production
The expocted production of Russien Lond-Loase stool allooated
through March 4, 1942, 1e shown in the tablo on Page 11. Production
to the ond of Fobruary was, of course, very low in comparison with the
Protocol commitment, amounting to only about 62,600 tone total. The
roason for this, ne stated proviously, in bocause requisitions and
spocifications word not recoived in sufficient volumo to pormit of
24 higher production. Tho total amount of roquisitions and specifica-
tione received by the Iron and Steol Branch up to December 31, 1941,
vas only about 63,000 tone. Thus, it would soom that practically tho
full amount of motorial requisitioned to the ond of 1941 vas producod
by the end of Fobruary, 1942.
As stated proviously, spocifications covering almost 700,000
gross tons word received by tho Iron and Stool Branch botwoon January
19 and January 23. Allocations for production went forward from that
time at a grontly accolerated rato with the rosult that production in
March 1a expected to bc about 125,000 tons, Thus, tho total doficit
ce of April 1, 1942, is expocted to be only about 106,000 tone and
this will be mado up by the ond of April,
Total production to Juno 30, 1942, of roquisitions allocated
through March 4, 1942, is expocted to total about 500,000 tons, or
more than the full nine months' Protocol commitment. In some of the
Protocol categories, there still remains unellocated commitment bal-
ancea either because of receipt of insufficient specifications or be-
cause sufficient specifications have not yet been cleared and allo-
cated. These deficits in total are more then made up by expected pro-
duction of requisitions not covered by the Protocol but already
allocated,
Regraded Unclassified
27188
47
-10-
Figures are given for production rather than for shipments
because in several instances in the past, shipmente have been held up
by the Army for military or ocean shipping reasons, and it is possible
that such partial embargoes on shipping may again be necessary in the
future.
Regraded Unclassified
18
EXPECTED PRODUCTION OF RUSSIAN LEND-LEASE HTMEL
ALLOCATED THROUGH MARCH 4, 1942
IN GROBS TONS(a)
MONOUR Protocol
Expected Production based on Allocations
Classification
Protocol Commitment
Expected Production beeed ap
through March 4, 1942
for
Allocations through March 4,1042
Tital
Deficit
Total to
5 months to
Production to
Item
Matorial
November December January February March
48 of
April 1,1942
April 1,1942(a)
Apr.1,1942
April
May
June
June 38,1042
25
Armor Plate
-
-
-
400
4,600
5,000
1,000
26
Hard Alloys &
1,000
3,400
1,600
-
10,000
Outting Tools
-
200
200
(b)
(b)
200
-
400
-
-
-
-
28
High Speed Steel
-
-
-
-
280
300
560
600
20
320
-
-
900
20
Tool Steel
-
-
-
200
620
820
1,000
2,190
565
-
-
2,400
30
Calibrated Steel
-
-
-
2,000
2,000
4,000
(o)
(4,000)
1,865
-
-
5,066
31
Hot Rolled Steel
-
-
-
-
19,075
18,075
$2,000
23,925
24,075
14,050
10,000
66,200
22
Steel Billets
-
-
-
2,000
9,000
10,000
$2,000
38,000
6,000
-
-
16,000
25
Cold Holled Strip
-
,
(
0,360
10,980
19,230
48,000
25,770
16,140
12,340
4,369
66,069
34
Celd Holled Sheete
-
1
200
6,000
12,000
18,200
49,000
29,800
25,000
16,980
-
69,160
55
Zin Plate
.
200
3,600
15,000
4,000
24,000
24,000
.
4,000
4,000
4,000
25,000
36
Steel Wire
-
,
F
500
7,000
7,500
42,000
34,600
11,700
7,513
-
25,715
57
Wire Rope
-
-
I
-
-
-
7,200
7,300
500
500
-
1,000
36
Alloy Tubes
-
-
1,200
1,200
200
310
-
610
1
*
-
-
30
Stainless Steel Wire
-
1
-
12
10
22
130
UB
-
-
-
22
4L
Barbed Wire(t Staples)
6,446(d) 11,000
400
2,600
4,000
25,945
$4,000
(1,945)
4,900
4,700
4,525
40,170
Items Not Covered by Protocol
A
Bull Bearing Wire à Bara
-
-
-
250
250
600
-
(500)
-
I
-
500
3
Die Blocks
-
-
e
1
500
500
-
(300)
300
300
250
1,160
e
Chrune Alloy Wire
-
-
60
60
-
(00)
60
80
so
290
-
-
D
Drill Pips à Line Pipe
-
-
-
-
18,500
18,500
-
(18,600)
16,600
18,500
-
50,000
M
011 Well Casing 1 Tubing
-
-
-
-
19,500
19,500
-
(10,600)
19,500
10,500
-
50,500
r
Aircraft Steels
-
-
-
!
-
-
-
-
-
-
-
-
0
Pressure Tubee
-
-
*
-
-
-
-
-
1,000
1,000
-
2 000
I
Terne Plate
-
F
-
1,000
310
1,560
-
(1,850)
aso
300
-
2,000
[
Rulla t Accessories
-
-
14,000
14,000
-
(14,000)
10,300
15,100
16,100
40,500
I
-
,
Bailroad Car Azles
-
-
-
-
-
-
-
-
-
.
-
-
(
Miscellaneous
-
-
=
-
-
1
(2)
-
-
-
2
-
Totals
2,445(a) 11,200
4,402
40,692 125,166
187,504
294,130
106,616
164,815
115,758
42,584
500,966
Notway
(a) Protocol commitments are In metrio tons of 2204 lbs. each. In this table no distinction LA made Detween gross tume (of BEAD lbs. each) and metric topils
(b) The Protocol comitrient is for $100,000 worth per months The 400 tona allocated by On Iron and Steel -ranch are estimated to ucat $270,000.
Substantial additional requisitions under this category have been filed with the W.F.B. Tecl- Branch.
(c) Protocol contains no commitment for "Calibrated Steel". U.S.S.R. has asked for 13,000 tone per month.
(a) Including 4,000 hone purchased by U.S.B.B. für cash in Catober 1841.
Regraded Inclassified
27188
49
- 12 -
Item 25 - Armor Plate
Tons
Moacow Protocol Commitment
- monthly
1,000
- 9 months to 6/30/42
9,000
Allocated through March 4, 1942
-
* 10,000
Balance of Commitment
1,000 excess
Specifications not yet cleared
or not yet allocated
-
0
*See Text
Specifications for Russian Armor Plate have been under discussion
by the Iron and Steel Branch, the Army, the Navy, the producers and the
Russian representatives since October 1941. An agreement on the specifi-
cations to be furnished was finally reached in January 1942,
A requisition calling for 9,000 gross tons was received by the WPB
Iron and Steel Branch on January 30, end immediately allocated for purchase
by the Treasury Department, Procurement Division, Subsequently, it was
decided to have the procurement handled by the Army. It is expected that
5,000 gross tone of armor plate will be produced for Ruesia by March 31
and another 5,000 tons in the six weoks thereafter,
Regraded Unclassified
27188
50
- 13 -
Item 26 - Hard Alloys and Cutting Tools
Tona
Dollars
Moscow Protocol Commitment
- Monthly
$100,000
- 9 Months to 6/30/42
900,000
Allocated through March 4, 1942
-
400
270,000
Balance of Commitment
-
(See Text)
Specifications in Iron and Steel Branch
not yet cleared or not yet allocated -
2,450 $2,500,000
The Protocol commitment for this item 18 not stated in tona but as
$100,000 worth per month, or a total of $900,000.
The Russian representatives have indicated that such material as
Chrome Iron Strip is to be classified under this heading. A number of
other advance specifications have been presented for corrosion resisting
steel alloye, rounds, sheets and plates, containing a similar high chromium
content, as well 8.0 substantial percentages of other scarce alloying elements,
such aa tungsten, venadium, and nickel. These specifications do not belong
under any of the other Protocol items and are, therefore, classified by the
Iron and Steel Branch under Item 26. The total of specifications 80 classi-
fied are for material estimated to be worth about $2,500,000.
In addition, the Ruesiens have filed with the Office of Lend-Lease
Administration, under Item 26 of the Protocol, requisitions for 3,566,300
high speed drills of high tungsten content and 65,000 turning tool tips.
These are being handled by the Toole Branch of WPB.
Regraded Unclassified
27188
51
- 14 -
The advance Russian specifications presented to the Iron and Steel
Branch, in general, are BO far away from American standards that it has
been necessary to offer the Russians suitable substitutes. This is par-
ticularly true because of our critical situation in chrome, nickel, van-
adium and other alloy elements and the consequent severe restrictions placed
on American users. The Russian representatives have been hesitant to accept
the substitutes offered and negotiations are continuing.
The estimated A-1 rated armament requirements of chrome are about 30%
higher than the 150,000 tons available in the United States in 1942. The
estimated A-1 rated armament demand for nickel 18 about 15,000,000 lbs. per
month, as against an estimated supply of about 13,500,000 lbs. The estimated
A-1 rated armamont domand for vanadium 1e about double the expected available
supply,
Regraded Unclassified
27188
52
- 15 -
Item 28 - High Speed Steel
Tons
Moscow Protocol Commitment
- Monthly
100
- 9 Months to
6/30/42
900
Allocated through March 4, 1942
-
900
Balance of Commitment
-
o
Specifications not yet cleared
or not yet allocated
-
870
Early in December the Iron and Steel Branch received two requisi-
tions covering 1,000 net tons, or 900 gross tons, of high speed tool
steel. The matter of specifications and tolerances called for in the
requisitions vas discussed with the Russian representatives and upon
their agreement to take standard run of the mill sizes and American stan-
dard tolerances, the requisitions were immediately allocated for production
in January, February and March. Subsequent to the date of allocation, the
Ruesian representatives changed their minds with regard to sizes and toler-
ances and a prolonged period of negotiation regarding these matters ensued.
This BO delayed the placing of contracts that it was possible to obtain &
production of only about 40 tons in January and 240 tone in February. The
balance of the 900 tona 1a expected to be produced in the months of March
and April, thus completing the full Protocol commitment by the end of April.
These delivories are extraordinarily large when it is considered that this
amount of tool stool 18 the highest ever ordered from American industry at
any one time.
Advance specifications for an additional 870 gross tons of high speed
steel have been received. Even though this amount ia entirely over the
Regraded Unclassified
27188
53
- 16 -
Protocol commitment, it is plannod to allocate it for production in the
second quarter of 1942. Under Genoral Preference Order M-14, it 1e stated
that only 25% of any order of tool stool can be in tho grade in which the
relationship of the production of tungsten, chromium, and vanadium is 18-4-1
and the other 75% must be 6-6-2. The Russian specifications do not indicate
which of the sizos requested are to be of 18-4-1 and which of 6.02. This
information waa requested in January. Ae soon as it 18 received, the allo-
cation will bo mado.
The U. S. production of high speed tool steel 18 only about 5,000
tons per month. Practicelly all of this production 1e going to the Army,
Navy, Russian, British, machine tool and other A-1 rated uses.
Regraded Unclassified
27188
54
- 17 -
Itom 29 - Tool Steel
Tona
Moscow Protocol Commitment
- monthly
500
- 9 months to 6/30/42
4,500
Allocated through March 4, 1942
,
1,405
Balanco of Commitment
-
3,095
Specifications not yet cleared
21,498
or not yot allocated
-
For the purposo of discussing the status of the Russian Tool Stoel
program, the above figuros of roquisitions allocated and advance specifica-
tions not yot cleared are itomized as followe:
Allocated
Not yot Cleared
Alloy Tool Steel
720 Tone
2,288 Tons
Hollow Drill
300
"
500
=
High Carbon, High Chromium
222 n
1,739
"
Cold Drawn Plain Carbon
0 1/
16,950
"
Hot Rolled Plain Carbon
160 11
0
"
Drill Rod
3
if
21
"
1,405 Tons
21,498 Tons
The Alloy Tool Steel specifications requested by the Russians
do not conform to American standarde and considerable difficulty 1a being
exporienced in gotting Russian agrooment to specifications which American
mills can produce. If this agrooment 1e obtained in the near futuro, the
2,288 tons not yet cleared can be allocated for delivery in equal monthly
amounts by Juno 30, 1942.
The 800 tons of Bollow Drill Stool was requested by the Ruesians
under the Protocol catogory Itom 31, Hot Rollod Stoel. This stool 16 clec-
tric furnaco quality and mado by the samo facilitios and with the samo
practicos as High Carbon Tool Stool, Cortainly, this high-cost spocialty
should not be requisitioned undor a category for which the monthly quota 18
Regraded Unclassified
27188
55
- 18 -
7,000 tons. Tho 300 tons alroady allocated will bo produced by the end of
March, and it ie planned to allocate the remaining 500 tons for production
in April and May.
Tho 1,961 tons of High Carbon, High Chromium steel containe 12%
chromium, a proportion which 1s excessive considering the prosent chromium
scarcity. The Russian reprosontatives have boon asked repeatedly to ascer-
tain the use to which this matorial will be put BO that suitable low-alloy
grade stool substitutos may be offored. The only reply to date 18 that
this die steel 10 used indiscriminately and no attempt 18 made to fit var-
1ous other grades to the special performance desired, In order to be help-
ful, the Iron and Steel Branch has already allocated 222 tone which will be
ready for shipment in April.
The 16,950 tons of Cold Drawn High Carbon Tool Steel was requested
by the Russians under the Protocol category Item 30 - Calibrated Steel. In
this category they have requested a quota of 13,000 tons monthly. Calibrated
Steel, 1f considered as B. product with a large monthly quota, should be taken
to mean cold drawn Bessemer steel screw stock of which the Russians have re-
quested 95,585 gross tons under Item 30, but this 16,950 tons of Tool Steel
does not belong in the samo category, The specifications call for such a
diffucult annealing treatment that the country's annealing facilities, could
only furnish it over B. long period of time. The total of 16,950 tons has
been requested in only two sizes and the quantity per size seems, therefore,
to be too large to be for tools alone. The Ruesiane have been asked to ascer-
tain the proposed uses of this steel. If it 18 for bullet core or bearings,
suitable stoole of leas difficult menufacture can be supplied. If it ie for
tools alono, plain carbon hot rolled atool can be supplied; for tool-making
purposes, the stool need not be cold drawn. To date, the Iron and Steel
Branch has not been informed of the usos.
Regraded Unclassified
27188
56
- 19 -
Tho 160 tons of Hot Rollod Plain Carbon Tool Stool was only allocated
on January 7, 1942, and has alroady beon completoly producod. This is indi-
cative of the spood with which Hot Rollod Tool Steel can be produced as
against the much longer procoss to produco the Cold Drawn Tool Steol discussed
above.
Regraded Unclassified
27188
57
- 20 -
Item 30 - Calibrated Steel
Tons
Moscow Protocol Commitment
- monthly
- 9 months to 6/30/42
*
Allocated through March 4, 1942
-
5,865
Balance of Commitment
-
*
Specifications not yet cleared
or not yot allocated
-
89,720
#
The Protocol contains no commitment for Calibratod Steel.
The U. S. S. R. has asked for 13,000 tons per month.
The torm, "Calibratod Steel", is not used in this country, and when
the Iron and Stoel Branch was asked to comment on the available supply, it
was unablo to do so pending the receipt of detailed specifications. Requi-
sitions presented by the Russians under this classification up to December
31, 1941, wore for 5,865 tons of cold drawn Bessemer steel screw stock.
This is a product manufactured on 8. fairly largo acale in the United States
and, in view of the large monthly quote asked for by the U. S. S. R. under
this item for which thore is no Protocol commitment, the Iron and Stoel
Branch classifies under this heading material similar to Bossemer grado
scrow stock. 89,720 gross tone of the advance specifications not yet allo-
catod have been so classified.
With prectically no exceptions, the Ruesian requests have beon for bare
with diamotors in millimeter sizes. To provent the necessity of having new
drawing dios mado by the die-making industry, which 1a already heavily over-
loaded, tho Russiana have been saked to change from millimotor diamotors to
the noarest fractional inch diamoters. This could not be done without con-
sont from the U. S. 8. R. which has not yet been received.
Regraded Unclassified
27188
58
- 21 -
The Army and Navy sholl steel programa aro for tremendous quantities
of armor piercing and explosive type steels all of which must be cold drawn.
Because of this, the cold drawn bar mills of this country have been placed
under complete allocation by the Iron and Stool Branch. As soon as the sizes
of the material requested by the Ruesians are cleared it will be possible to
allocate this material for production at the rato of about 15,000 gross tons
per month.
Regraded Unclassified
27188
22 I I
59
Item 31 - Hot Rolled Steel
Tone
Moncow Protocol Commitment
- Monthly
7,000
- 9 months to 6/30/42
63,000
Allocated through March 4, 1942 -
76,200
Balance of Commitment
-
13,200 excess
Specifications not yet cleared
or not yet allocated
-
0
No requisitions which could be classified under Item 31-
Hot Rolled Steel, were presented to the Iron and Steel Branch before
January 19, Since that time, a total of 76,200 gross tons of hot
rolled sheets and plates has been requested. All of these requests
have been cleared and the requisitions have been allocated. As the
shortest delivery period obtainable for material of this kind 1a about
thirty days, it was impossible to arrange for deliveries in February.
It is expected that 18,075 tons will be produced in March, 24,075
in April, 14,050 in May, and 10,000 each in June and July. Of the
76,200 gross tons, one requisition of 50,000 gross tons of plates and
sheets was requested by the Russians at the rate of 10,000 tone per
month beginning in March, and it is because of this that 10,000 tons
per month are scheduled in June and July rather than earlier.
Attention is called to the fact that the total amount
allocated to date is 13,200 tons greater than the Protocol commitment.
Deliveries against these allocations will aggregate 66,200 tons by
June 30 as against the Protocol commitment of 63,000 tone.
Regraded Unclassified
27188
- 23 -
60
Item 32 - Steel Billetg(Chrome-Silicon-Manganese)
Tone
Moscow Protocol Commitment
- monthly
8,000
- 9 months to 6/30/42
72,000
Allocated through March 4, 1942 -
16,000
Balance of Commitment
-
56,000
Specifications not yet cleared
or not yet allocated
-
56,000
On December 31, 1941, the Iron and Steel Branch received B.
requisition for 16,000 gross tons of chrome-milicon-manganese shell steel
billets and this tonnage were allocated the same day. The rigid Russian
specifications called for electric furnace steel and very difficult heat
treating or annealing. When production was started in January, diffi-
culties were encountered requiring a consultation at the mill with
Russian metallurgists. These difficulties were not overcome until
sometime in February with the result that it was possible to ship only
about 2,000 tons in that month. The mill capacity is insufficient to
make up the deficiency except at the rate of about 8,000 tone per month
80 that deliveries are expected to be 8,000 tone in March and 6,000 tone
in April.
An additional requisition for 66,000 tons of shell eteel billets,
calling for the name difficult specifications as the first, was received
by the Iron and Steel Branch on February 24, 1942. Due to the existing
heavy load on the country's electric furnace capacity and annealing
capacity, negotiations were initiated with the Russian representatives
to gain their acceptance of a. substitute made from open hearth steel
with less difficult heat treating, such as 10 in common use by our own
Army and Navy. To this the Russians have finally agreed.
Regraded Unclassified
27188
- 24 -
61
In order to allocate such a large tonnage of shell steel billets
in such a way that the full amount can be delivered by June 30,1942,
it has been found necessary to call a meeting of representatives of
the various shell steel producers. This meeting will be on March 10,
and it is expected that the 56,000 tons will be allocated immediately
thereafter.
Regraded Unclassified
27188
- 25 -
62
Item 33 - Cold Rolled Strip
Tons
Moscow Protocol Commitment
- monthly
8,000
- 9 months to 6/30/42
72,000
Allocated through March 4, 1942 -
56,069
Balance of Commitment
-
21,931
Specifications not yet cleared
or not yet allocated
-
8,130
Up to the end of 1941, requests received by the Iron and Steel
Branch for Cold Rolled Strip amounted to only 3,170 grose tons. During
January additional advance specifications totalling 61,029 gross tona
were received. These advance specifications were not widely spread over
the full American production range of sizes and specifications. Speci-
fications for 40,000 tons called for metallic belt link strip and
cartridge clip stock in only three sizes with very high carbon content
and an annealing treatment taking at least three times as long as the
ordinary strip annealing process. Consequently, the time required for
the manufacture of this strip is about six weeks. Furthermore, some of
the details in the specifications were not ordinarily produced in this
country and were practically impossible to meet. It was, therefore,
necessary to call in a group of metallurgists from the oold rolled strip
producing companies to revise the specifications in cooperation with the
Russian representatives.
Allocation of 52,899 gross tone were made in February for pro-
duction over the balance of the Protocol period, beginning as soon an
possible. The 8,130 tons balance of the specifications not yet allocated
are being cleared and will be allocated shortly.
Regraded Unclassified
27188
- 26 -
63
Item 34 - Cold Rolled Sheets
Tons
Moscow Protocol Commitment
- monthly
8,000
- 9 months to 6/30/42
72,000
Allocated through March 4, 1942 -
59,160
Balance of Commitment
-
12,840
Specifications not yet cleared
or not yet allocated
-
0
Up to January 18, 1942, the Iron and Steel Branch had re-
ceived requeste from the Russian representatives for only 4600 tone
of Cold Rolled Sheets. This 4600 tone was allocated on December 19,
1941. During the period, January 19 to January 22, the Russians
filed advance specifications for 54,560 additional tone of Cold Rolled
Sheets. These advance specifications were all cleared by January 26,
but formal requisitions were not received by the Iron and Steel Branch
until February 4. During the next week, arrangements were made for the
supplying of the entire 54,560 tons, and allocations were made on
February 12 for delivery in March, April, and May, As the manufacturing
process for Cold Rolled Sheets takes practically four weeks, substantial
deliveries of this product could not reasonably be expected until April.
Nevertheless, due to pressure on the producers from the Iron and Steel
Branch, it is expected the production in March on Russian orders will
be about 12,000 tons, and production in April would be at least doubled
this amount.
Allocations have not yet equalled the full Protocol commit-
ment because sufficient requests have not yet been received.
Regraded Unclassified
27188
- 27 -
64
Item 35 - Tin Plate
Tone
Moscow Protocol Commitment
- monthly
4,000
- 9 months to 6/30/42
36,000
Allocated through March 4, 1942 -
36,000
Balance of Commitment
0
Specifications not yet cleared
or not yet allocated
-
o
A requisition for Tin Plate was received by the Iron and Steel
Branch on October 15, 1941. This requisition called for 1-A Charcoal
grade plate which is an extremely heavy coating of tin (3.00 lbs per bage
box) and which is produced in very limited quantities in this country.
Furthermore, the requisition called for primes only, whereas it is uni-
versal practice to accept primes and seconds, After considerable nego-
tiations the Russians agreed, on November 8, to accept tin plate with a
coating of 1.50 lbs. per base box, the heaviest commercial coating, and
both primes and seconds. A new requisition for 20,000 gross tons WELB filed
with the Office of Lend-Lease Administration on November 12. Allocation
orders were prepared on November 22, even though the Iron and Steel Branch
did not actually receive the approved requisition from OLLA until Novem-
ber 27. The allocation called for production in December, January and
February. Shipment of 20,000 tons by February 28, 1942 would bring tin
plate right up to the schedule of the Moscow Protocol.
Several changes in sizes were then made by the Russian represen-
tatives with the result that contracts could not be placed until well into
December. Thus, shipments in December were small. Production of
Regraded Unclassified
27188
- 28 -
65
approximately 8,000 tons in January and 12,000 tons in February was
arranged by the Iron and Steel Branch. A short embargo was placed on
shipments by the Army late in January with the result that shipments for
the month were considerably bolow production. This embargo was removed
early in February and total tin plate shipments by the end of February
were the full amount of 20,000 gross tons.
In January, a requisition was filed for 16,000 gross tons, the
balance of the Protocol commitment. Shortly after its receipt the
Tin Plate Order 16-21-c was issued, effective as of February 11, restricting
the coating of tin plate to a maximum of 1.25 lbs. per base box, with the
exception of tin plate for a specified list of uses, estimated to require
no more than 570 of the total output. As a result of & plea by the
Russian representatives, it was decided to exempt from this order the
balance of the first 20,000 gross tone for Euseia and allow its coating
to continue at 1.50 1bs. per base box. The 16,000 gross tone for ship-
ment from March through June, it was decided, should be 1.25 lbs. coating
except for a possible 5% which could be 1.50 lbs. After this decision,
the 16,000 gross tone was allocated by the Iron and Steel Branch for
delivery at the rate of 4,000 gross tons per month beginning in March.
Regraded Unclassified
27188
- 29 -
66
Item 36 - Steel Wire
Tons
Moscow Protocol Commitment
- monthly
7,000
- 9 months to 6/30/42
63,000
Allocated through March 4, 1942 -
26,713
Balance of Commitment
-
36,287
Specifications not yet cleared
or not yet allocated
-
19,253
The Moscow Protocol commitment for Steel Wire 1a 7,000
tons por month. It is obvious from this large quota that the
American negotiators had in mind only commercial wires of large
scale production.
A breakdown of the 26,713 gross tons already allocated
and of the 19,253 gross tone of specifications not yet cleared
by types of wire is as follows:
Wire Classification
Type
Requisitions
Specifications
Allocated
on Hand
Spring Wire
669
4,558
High Tensile Wire
208
2,943
Galvanized Wire
22,044
1,700
Cold Drawn Wire
2,031
1,195
High Resistance Wire
89
166
Music Wire
0
1,795
Card Wire
197
195
Solder Wiro
10
o
Rope Wire
B86
3,012
Tinned Wire
200
o
Piano Wire
349
0
High Carbon Wire
0
52
Low Carbon Wire
o
850
Other Steel Wire
30
147
Welding Wire
0
2,640
26,713
19,253
As shown above, only half of the tonnage requested to date
Regraded Unclassified
27188
8 I #
67
has been of what can be considered commercial wires of large scale
production.
The larger proportion of the specifications are for
specialty vires, most of which are high tensile and of small gauge
and are in direct competition with ballon barrage cable, aircraft
cable, Signal Corps field strand and assault wire. Furthermore,
a great many of the specifications are not in line with American
standards, and considerable negotiations with the Russian Representa-
tives are required to bring these specifications in conformity with
American standards. This is being done as rapidly as possible. Some
of the specifications on hand, after clearance, will require the de-
velopment of new sources of manufacture before assurance can be given
that they can be supplied by June 30. 197 tons of Card Wire, for
instance, have already been allocated for the Russians for production
by June 30, 1942, and this together with A-1 rated requirements will
take up the country's full production which is probably not much more
than 60 tons per month. It will definitely not be possible to obtain
the additional 195 tona requested until after June 30, 1942.
Regraded Unclassified
27188
68
-31-
Item 37 - Wire Rope
Tons
Moscow Protocol Commitment
- monthly
1,200
-9 months to 6/30/42
10,800
Allocated through March 4, 1942 -
1,000
Balance of Commitment
-
9,800
Specifications not yet cleared
or not yet allocated
9,565
About January 20 the Iron and Steel Branch received its
first advance specifications for Wire Rope for the U. S. 8, R. The
initial group of specifications amounted to about 4,000 gross tons.
Since then, additional specifications have been received from time to
time, the present total being 10,565 gross tons.
The specifications na presented, with very few exceptions,
call for the smaller sizes of rope of the most complicated types of
construction. The specifications stated the sizes of ropes in cir-
cumferences whereas American ropes are made to diameter sizes. Much of
the rope requested calls for galvanizing, whereas, due to the scarcity
of zinc in this country and a shortage of galvanizing capacity in the
mills, ungalvanized rope 1e being used here wherever possible. In
practically every case, the Russian specifications call for premium
types of construction, many of which involve two and three stranding
operations. In general, the number of wires per rope specified wore
higher than the number of the wires in rope boing made for the same use
by the Army, Navy, and Air Corps.
Each specification has been reviewed by a group of en-
gineors from the wire rope industry and the standard American construc-
tion for the same uso, as nearly as it could be determined, vas offered
Regraded Unclassified
27188
-32-
69
to the Russian representatives as substitutes for the ropes which
they have specified. Before the Russian representatives can accept
the substitutes offered, it has beon necessary to socure authority to
do 80 from the U. 8. 8. R. Many of the suggested substitutos have
already been accepted and others are boing accepted almost daily,
The 10,565 gross tons of rope requested are almost en-
tirely for military applications, and consequently represented direct
competition with similar rope being constructed for our own Army, Navy,
and Air Corps whose orders are occupying almost the full production
capacities of the country. To arrange for the production of the heavy
tonnages for the U. S. S. R., it has been necessary to hold several
conferences with the wire rope industry in order that the production
of rope for Russia could be correlated with that for American ermament
use. 1,000 tons of rope for the U. S. S. R. have already been allocated,
and it is expected that within 8. comparatively few days, a very much
larger tonnage can be allocated for production before June 30, 1942.
The total production of Wire Rope for the U. S. S. R. that can be se-
cured by June 30, 1942 cannot be estimated until it 1a known to what
extent the American standard specifications will be accepted.
Regraded Unclassified
27188
70
+33-
Item 38 - Alloy Tubes
Tons
Moscow Protocol Commitment
- monthly
200
- 9 months to 6/30/42
1800
Allocated through March 4, 1942 -
610
Balance of Commitment
-
1190
Specifications not yet cleared
or not yet allocated
-
2714
There have been presented to the Iron and Steel Branch
advance specifications covering 3324 tons of Alloy Tubes, or almost
twice the full Protocol commitment. All of these advance specifica-
tions were received since January 20. In general, the sizes were not
in conformance to American standards and it has been necessary to ob-
tain the Russian agreement to size changes. These have been forth-
coming for 610 tono which have been allocated.
Furthermore, a substantial part of the tubes requested con-
tain excessive amounts of chrome nickel and other alloy metals, the sup-
ply of which is severely restricted in this country. Such tubes now
manufactured in this country for American use have had the percentages
of these alloy metals reduced materially. Similar lower alloy content
substitutes have been offered to the Russian representatives but accept-
ance has not yet been received pending receipt of consent from the
U. S. S. R. If the substitutes suggested by the Iron and Steel Branch
are accepted in the near future, it will be possible to allocate suffi-
cient tonnage to meet the balance of the commitment, which is about
3
1200 tons, for dolivery before June 30, 1942.
Regraded Unclassified
27188
-34-
71
Item 39 - Stainless Steel Wire
Tons
Moscow Protocol Commitment
- monthly
20
- 9 months to 6/30/42
1.80
Allocated through March 4, 1942 -
22
Balance of Conmitment
-
158
Specifications not yet cleared
or not yet allocated
-
590
-
As shown above, the Russians are requesting 432 tons
more Stainless Steel Wire than the Protocol commitment. Due to the
tightness of the chrome situation in this country, it 1s becoming
increasingly difficult to place orders for Stainless Wire. However,
it is expected that additional tonnage will be allocated in the near
future.
Regraded Unclassified
27188
-35-
72
Item 41 - Barbed Wire (and Staples)
Tone
Moecow Protocol Commitment
- monthly
4,000
- 9 months to 6/30/42
36,000
Allocated through March 4, 1942 -
* 40,170
Balance of Commitment
-
4,170 excess
Specifications not yet cleared
or not yet allocated
-
0
*Including cash purchase of 4,000 tone in October.
In October 1941, the Iron and Steel Brench arranged for a di-
rect cash purchase by Amtorg Trading Corporation of 4,000 gross tons of
Barbed Wire for October delivery and this delivery was filled.
In October also, it was decided by the Lend-Lease authori-
ties to secure en additional 4,000 tona of barbed wire for October de-
livery and the Iron and Steel Branch helped to arrange for the addition-
el tonnage. In doing Bo, 1,445 tons of Barbed Wire were diverted from
the British and subsequently there was filed a Russian Lend-Lease re-
quisition for this amount.
On November 27, the Iron and Steel Branch received a requisi-
tion for 12,000 gross tons of Berbed Wire, representing the Procotol com-
mitment for November, December and January. This was immediately allo-
cated for delivery in December and January. Due to pressure on the pro-
ducers by the Iron and Steel Branch, deliveries of the full 12,000 tons
were almost completed by the end of December.
On December 31 and January 16, requisitions for 2,725 gross
tons of staples were alloosted for production in amounts per month pro-
portioned to the deliveries of the barbed wire. After the first amounts
of staples were manufactured to the Russian specifications, it was
Regraded Unclassified
27188
-36-
73
found that they could not be driven. Production has therefore been
suspended while the Russian representatives await authority from Moscow
to accept changed specifications.
Allocations for the 20,000 gross tone of barbed wire romain-
ing under the Protocol commitment were made in January for production
at the rate of 4,000 tons per month from February to June, inclusive.
Regraded Unclassified
27183
-37-
74
A - Ball Bearing Wire and Bare
The Russians filed a requisition December 14, 1941, for 500 tone
of Ball Bearing Wire which they classified under Item 36, Steel Wire.
While this item definitely did not come under the category of Steel Wire,
nor in fact under any of the other categories in the Proctocol, in order
to be of as much assistance to Russia as possible, it was allocated for
delivery in January, February and March, 75 tons were produced in Jan-
uary and approximately 200 tons in February. Production of the full 500
tona, it 1s expected, will be completed by March 31. This large demand
for Ball Bearing Wire over B. period of little more than three months has
seriously curtailed the amount of such Ball Bearing Wire going to the
Army, Navy, and A-1 rated machine tool uses.
Advance specifications for an additional 750 gross tons of Ball
Bearing Wire have been presented by the Russians. It will be possible
to allocate these for production, beginning in April, at the rate of about
100 tone per month. Allocation Orders are now being prepared.
In addition, advance specifications have been presented for B. total
of 9,750 gross tons of Ball Bearing Bars. These the Ruesians classified
under Protocol Item 30, "Calibrated Steel", under which item the Russians
have requested a monthly quote of 13,000 tons. Because of the size of
this requested monthly quota, "Calibrated Steel" could obviously be con-
sidered to mean only commercial products of large scale production and
not high premium specialties such as Ball Bearing Bars. The specifica-
tions 0.8 presented for Ball Bearing Bare call for them to be all cold
drawn. Aa the total monthly production of cold drawn Ball
Regraded Unclassified
27188
75
-38-
Bearing Bars 1a only about 3,000 tons, and as the entire output now 1a
going to the Army, Navy, and high A-1 rated machine tool uses, it vill
be possible to supply to Russia only about 150 tons of cold drawn
Ball Bearing Bers per month, beginning in April, without seriously cur-
tailing the amount going to American armament uses of prime importance.
If the Russians will take hot rolled Ball Bearing Bars, en additional
400 tons per month can be supplied beginning in April. To date, the
Russian representatives have not agreed to accept hot rolled bars and
no allocations of Ball Bearing Bars have yet been made.
Regraded Unclassified
27188
76
-39-
B - Die Blocks
On January 19, 1942, the Russians requisitioned 1,150 gross
tons of chrome-nickel molybdenum Die Blocks. Despite the fact that
Die Blocks do not full under any of the categories of the Moscow Pro-
tocol, the Iron and Steol Branch has allocated these Die Blocks for
production in March, April, May and June.
Regraded Unclassified
27168
-40-
77
C - Chromo Alloy Wire
Requisitions totaling 410 gross tons of Chromo Alloy Wiro were
filod by the Russians about January 20, 1942, under the Protocol catogory
Itom 36, Stool Wiro, As Itom 36 was intended to covor only commorcial
grados of wiro, it cannot be considered to cover chromium alloy wiros
which soll for about $200 per ton. Evon though there was no catogory in
the Protocol undor which Chromo Alloy Wire might be roquisitioned, the
Iron and Stool Branch has allocated thoso roquisitions totaling 410 tons
for dolivory at the rato of about Bo tone por month in March, April and
May, and 50 tons por month thoreafter.
In addition, advanco spocifications have boon filod for 822 gross
tons moro of Chromo Alloy Wiro. Of this amount, it will probably be
possible to got no more than 300 tons boforo Juno 30, 1942, and alloca-
tions of this amount are now boing propared.
Regraded Unclassified
27188
-41-
78
D - Drill Pipo and Lino Pipo
The lattor part of January, the Iron and Stool Branch received
requests from the Russian roprosontativos for a total of 110,000 gross
tona of Drill Pipo and Line Pipo to be supplied in equal quantitics
over a six months' poriod beginning as soon as possible. The pipo ro-
quostod VOB to bo all soamless.
As the load on the soamlose pipo mills of the United Statos
for the Army and Navy bombsholl program is vory largo, it was nocessary
to study tho situation carofully. It wee finally agrood to furnish tho
U. S. S. R, with 3,500 grose tons of Drill Pipe per month for three
months beginning in March, and 15,000 gross tons of Lino Pipe per month
for three months beginning in March. One-half of the Line Pipo is to be
electric weld rather than seamless. Thus, the total of Drill Pipo and Lino
Pipe to be furnished in the months of March, April, and May will be 18,500
tone per month, or the supply rate requested by the Russians.
Before the three months' delivery period is over, the Iron and
Steel Branch will review the then existing supply-demand situation to
dotormine the amounts of pipe which can be furnished in the succeeding
three months' period. It 18 not possible under oxisting circumstances
to mako firm commitments for this material for more than three months
ahead.
Regraded Unclassified
-42-
27188
79
E - Oil Well Casing and Tubing
Tho Russian representatives presented requests for a total
of 145,900 gross tons of 011 Well Casing and Tubing in the latter part
of January, asking that it be supplied in equal quantities ovor a six
months' poriod beginning as soon as possible. The requesta word for
all scamless pipe.
It was necessary to study the situation of the country's
pipo mills carefully in view of the heavy load on them for the Army
and Navy bombshell program. It was finally agreed to furnish the
U, B. S. R. with 13,500 gross tons of Oil Woll Casing per month for
three months beginning in March. One-half of this casing is to be
electric wold. This is the supply rate requested by the Russians.
It was also agreed to supply 011 Well Tubing at the rate
of 6,000 gross tons per month for throe months beginning in March
against their request which totaled 63,000 gross tons.
Bofore the throo months' dolivery poriod expires, the Iron
and Steel Branch will review the then existing supply-domand situation
to determine the amounts of tubing which can be furnished in the next
succoeding throo months' period. Undor oxisting circumstances, it 18
not possible to meko firm commitmonts for this material for more than
throo months ahoad.
Regraded Unclassified
27188
-43-
F - Aircraft Stools
80
About January 20 the Russians submitted advance specifications to the Iron and
Stool Branch covering 81,055 gross tons of Aircraft Stools. Those call for stoole
of various shapos and approximately thirty different grados, Tho tonnagos as to
soctions requested aro:
Cold Drawn Bars
2,135 Gross Tons
Hot Rollod Baro
30,550
"
0
Round Cornored Squaros
48,370
11
R
TOTAL
81,055 Gross Tons
A vory largo part of tho spocifications call for stools containing high porcon-
tagos of nickol, chromo, and other alloy motals. The total contained alloye amount
to about 2,508 gross tone of nickol, 1,356 gross tons of chrome, 38 gross tone of
vanadium, 509 gross tons of tungston, 90 gross tons of aluminum, and 102 grosa tone
of molybdonum.
In view of the critical situation with regard to alloy metals in this country,
negotiations were immodiately begun with Russian representatives and have been con-
tinued to the present time with the view of amending the specifications to reduce
the amounta of alloy metals required. The Russian representatives were also reques-
tod to ascertain the цвев to which:the various materials are to be put BO that auit-
able substitutes of open hearth melt steel could be offered in place of electric fur-
nace melt steel wherever such substitutes are in use for similar applications in thie
country,
The Russian representatives have maintained that it will be impossible for them
to accept substitute specifications for these important aircraft uses without a pre-
liminary period of experimentation. For this reason, it has been decided to allocate
immodiately 3,000 tons of these materials for production in March, 10,000 tone for
production in April and 10,000 tone for production in May in accordance with the
Russian specifications with the understanding that after June 1, 1942, the Russians
-111 be supplied with aircraft stoels at the rate of 10,000 tons per month of ex-
actly the same specifications as are then used by our own Army and Navy. This agree-
mont has been approved by Mr. W. L. Batt, Chairman of the W.P.B. Requirements Com-
alttoe.
Regraded Unclassified
27188
81
-44--
G - Pressure Tubes
About January 20 the Russians sent advance specifications
for 10,937 gross tone of Pressure Tubes of various kinds to the Iron
and Steel Branch. These specifications were not in complete form; in
many casos there wore no lengths indicated. These lengths and other
missing details have beon requested from the Russian representatives,
To date, this information has been received on the total of 2,000
gross tons which has been allocated for delivery in April and May.
An soon as the missing information is received on the other specifica-
tions, it will be possible to allocate them for delivery before June 30,
provided the information is received in the near future.
Regraded Unclassified
27188
-45-
82
H - Terne Plate
Requisitions for Terne Plate totaling 2,000 tons have been
received by the Iron and Steel Branch. These have been allocated
for dolivery in February, March, April, and May. Thore are no ad-
vanco specifications for Terne Plate on hand.
Regraded Unclassified
27188
83
-46-
I- Raile and Accessories
About Fobruary 10 the Iron and Steel Branch received a
request from the Russian ropresentativos for 60,000 gross tons
of 100 lbs. por yard rails to be supplied at the rate of 10,000
gross tone per month beginning in March. Accossorios - joint
bars, tio platos, track spikes, traok bolts, rail angles, and
spring washers requested total another 20,200 gross tons, and
900 turnouts and switch stands requested total 11,000 tons.
Whilo tho Russian requests wore for American standard
rails and accessorios, it was nocessary to design the turnouts,
frogs and switches, to fit as closely as possible to the Russian
requirements. Engineers from the frog and ewitch industry wore
called to Washington to make those dosigns and drawings in
cooporation with Russian engineers. Soveral questions aross
with regard to cortain of the other accessories which required
answers from Moscow. Novertheless, the full details havo been
arranged and the rails and accessories allocated for production
in accordance with the delivery period requested by the U. S. S. R.
Regraded Unclassified
271.88
84
-47-
J - - Railroad Car Axles
On February 26, the Iron and Steol Brench recoived a request
from Amtorg Trading Corporation for 40,000 gross tons (44,800 not
tons) of railroad car axles, delivery to be started in March at the
rate of 10,000 gross tons por month.
The 1942 American railway requirements of car axlos for
maintonance and new equipment for the year 18 223,602 net tons. This
figuro was sot at a meeting of the Spocial Purchasing Committoe of the
Purchases and Stores Division -- A. A. R. hold in Washington lato in
January at tho request of Diroctor Joseph B. Eastman of the Office
of Dofonse Transportation.
Allocations already mado for British Lond-Loase are ostimated
to be botween 2,000 and 3,000 not tone of exles.
The annual maximum producing capacity of the country 1s:
U. 8. Steel Corporation
110,000 Net Tons
Standard Forgings Company
54,000
"
"
Bothlehom Stool Corporation
42,000
"
"
J. R. Johnson Company
3,600
"
If
Total
209,600 Not Tona
As shown above, the prosent demand on our axlo-making capacity
is over 270,000 not tone or 28% in excose of tho producing capacity.
Amtorg's letter stated that the axles thoy want are to be rough
turned and from the rough designs submitted with tho letter, it appears
that the exlos would have to be rough turnod all ovor.
It is Amorican practice to rough turn the journals and wheel
Regraded Unclassified
27188
85
-48-
scats only in the caso of freight car axlos. The axlos the Russians
request will requiro re-tooling on the part of Amorican manufacturors.
Deliverios could begin to the Russians only after such re-tooling, and
it will be necossary to submit drawings to tho axle manufacturors bo-
foro tho timo for ro-tooling could bo dotormined. Thus, delivories in
March are impossible.
A decision has not yot boon reachod as to what amount of car
axlos can bo furnished to the U. S. S. R.
Regraded Unclassified
86
CONDITIONS OF THE SOVIET AID PROGRAM WITH RESPECT TO
CERTAIN SELECTED MATERIALS PRESENTED IN THE
PROCUREMENT DIVISION REPORT OF
FERRUARY 18, 1942
War Production Board - March 4, 1942
COMMITMENTS
TOTAL
AVAILABLE
TOTAL
TITOUGH
AMOUNTS
FOR SHIPMENT
MATERIAL
PROTOCOL
MARCH 31,
HFQUISI-
THROUGH MARCH
REMARKS
COVNTMENTS
1942
TIONED
31, 1942
Quime
2,550 tons allocated for March shipment diverted to
1] Injot
18,000 tone
12,000 tons
16,000 tons
9,450 tone
production of duraluminum at specific request of USSR.
Repult will be completion of total doraluminum comit-
ii) Cariluminus
4,500 tons
3,000 tuns
5,296 tons
3,411 tone
ments by Vay 1. Ingot deficiences will be chde up dur-
193 recond quarter 1942.
Soviet representatives advised January n, 1942 that bal-
Apracives
$2,700,000
$1,100,000
$2,700,000
$866,483.47
once of approximately $900,000 due March 31 would be
(approx.)
mide available for shipment if requisitions placed imme-
diately. Requisitions not received by MPB until middle
February. Cleared with A-1-a rating February 23 for
approximately $2,000,000. Deliveries not expected to
-tart with April 1,
Mickal
1,200 tons
1,200 tom
1,200 bon/i
1,200 tone
Total 1200 tone allocated for delivery during last quar-
ter 1941.
Welybdenum
2,700 tone
1,800 bene
2,700 tons
2,700 tone
Total nine morth's commitment authorized for delivery by
April 1.
Ciled Cartridge Bracs
15,000 tons
30,000 tons
45,000 tons
36,380 tons
line Electrolytic
6,750 tons
4,500 tono
6,750 tons
6,750 tone
1875 tona allocation being made for March to rem
total nine month's comitment,
Topper Goods (Tubing &
350 tons over the Protocol authorised for delivery by
Other Items)
2,700 tous
1,000 tons
3,050 tone
2,000 tona
June 30. Difficulties have been encountered in meeting
demands for exceptionally fine-malled tubing, Never-
theless, it is expected that at least 2,000 tona will
be available for shipment by April 1,
Although there were delays in issuing allocations for
Terro Silicon
2,700 tona
1,800 Name
2,700 tont
1,800 tone
first quarter 1912, suppliers have given assurance
1800 tone will be available for chipment through
Murch 31.
Ferro Chromise
1,100 COMP
1,200 tone
1,P00 tona
1,200 tone
Ditto, for 1200 tons,
Lohrone With
180 tone
120 tone
380 lona
110 tone
Includes to tone purchased under private Antorg con-
tracts for delivery subsequent to October 1, 194°,
und therefore charged to the account of the Protonol.
"raphitizet Klectrodes
3,600 Lone
2,400 tons
3,900 tons
887.9 tone
Schedule of doliveries prepared for completion of
3900 tons, 300 tona over Protocol, in December 19h8.
Seviet representatives understand production problems
in supplying lorge sizes requested and are therefore
agreeable to this schedule. Deliveries reduced Feb-
ruen" and March to repay British 289 tons diverted to
USSR in December 1941. Original schedule revised to
accelerate deliveries third quarter 1912.
Parine Cable
900 km.
600 km.
900 los.
175 kr.
At specific request Procurement Division, /d prefer-
ence rating assigned to order for 175 los. Impossible
to fulfill commitments to April 1 on schedule ne
quisitions for balance just received in WPB.
Regraded Unclassified
87
Stacy May will come to the Secretary's
Office at 10:00 tomorrow morning with
the latest production figures. I have
asked Mr. Fitzgerald to put it on the
calendar and tell the Secretary.
Mrs. McHugh
88
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE March 6, 1942
TO
Mrs. Klotz
FROM
Secretary Morgenthau
Please call up Donald Nelson and ask him to
arrange to have Stacy May come to my office
Saturday morning at 10:00 to show me the latest
production figures. Mr. Nelson knows about this,
and has promised it to me for weeks. If Stacy
May hasn't got all of the figures, I would like
to see what he has got. Please put him down for
one hour.
Regraded Unclassified
89
March 6, 1942
'EMORANDUM FOR THE SECRETARY'S FILES
Conference in Mr. White's Office
March 6, 1942
12:30
Present: Mr. Gromyko, Embassy of U.S.S.R.
Mr. White
Mr. Ullmann
M. White asked Mr. Gromyko how much gold has been shipped from
the Soviet Union in the past two months (1) to the United States
against advances, (2) to the United States for sale for British
account, (3) to the British outside the United States. Mr. Gromyko
replied that he had no information on this subject, but offered to
request his Government for the information. He stated that he would
inform the Treasury when a reply to his request is received.
Regraded Unclassified
90
March 6, 1942
sum 70° THE SECRETARY'S FILES
Conference in Mr. Bell's Office
March 6, 1942
4:00 P.N.
Present: Mr, D. W. Bell,
Mr. White,
Dr. Viner,
Mr. B. Bornstein,
Mr. Southard,
Mr. Friedman.
A meeting was held in Mr. Bell's office to discuss the reply
received from Dr. Soong on our draft Agreement. It was agreed that the
Chinese suggestions should be accepted and that the sending of a letter
from the Secretary, acknowledging the receipt of the letter from Dr.
Soons, would constitute a confirmation of the commitment contained in
the letter from Dr. Soong to keep the Secretary informed.
The implications of accepting the Chinese modifications were
explored. It was agreed that (1) the Chinese could ask for the transfer
to their account of the entire amount at one time or in any fractions;
(2) that the Chinese would not have to consult with the Treasury with
regard to uses; (3) that there would be only a weak basis for making
any objections or criticisms, and (4) that there was some possibility
that much or all of the $500 million might be lost by a sudden change
in the political situation in China. The opinion of Mr. Lattimore re-
garding the possibility of the overthrow of the Generalissimo in case
of Japanese capture of Assam was given.
The question of how far the British would be prepared to dve
sindlar terms to the Chinese was discussed. The point was made that the
British, through Mr. Bewley, has said that they wished to draft a document
which would approach as much as possible the American document.
It wes felt that the opinion of the State Department was necessary
on the matter and it was decided to have a meeting with the State Depart-
nent at 10:15 the following morning.
Regraded Unclassified
91
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
DATE March 6, 1942
TO
Secretary Morgenthau
FROM
E. H. Foley, Jr.
In view of some of our recent
conversations, I think the attached memo-
randum of 8 conference which we had re-
cently with Thurman Arnold you will find
to be interesting reading.
Of especial interest will be
the information contained in paragraphs
one and five.
9.107h
Attachment
Regraded Unclassified
92
February 23, 1942,
MEMORANDUM FOR THE FILES:
Re: Patent Situation
Conference at the Department of Justice, held on
Saturday, February 21, 1942.
Presenti Mr. Arnold, Assistant Attorney General in
charge of the Anti-Trust Division;
Messrs. Bernatein, Sherbondy and Lawler,
of the Treasury Department.
(We were later joined by Mr. Joe Borkin, of the Anti-
Trust Division, Mr. Ed Hodges of the Anti-Trust
Division, and, for & few moments, by Mr. Hugh Cox of
the Anti-Trust Division.)
Many matters were discussed, in no rigid order. No attempt
is made in this memorandum to reproduce the order of discussion, but
an attempt is made merely to make EL record of the principal subjects
of discussion and the views expressed.
(1) The General Electric Company. Mr. Arriold pointed out
that the General Electric Company is engaged in several cartels with
I, G. Farbenindustrie exerting control over patents. The most in-
portant of these is a cartel to control the production of tungsten
carbide. Mr. Arnold delivered to Mr. Bernstein several memoranda, -
some of which have B. bearing on this matter. Mr. Arnold also pointed
out that General Electric has some interest in the artificial rubber
situation in that they managed to delay delivery of samples to the
B. F. Goodrich Rubber Company by I. G. Farbenindustrie.
Illustrative of General Electric's method of doing
business, Mr. Arnold read a memorandum from the engineering depart-
ment of the company to the top executives concerning the efforts of
the engineering department to develop flash light bulbe which would
have only one-third of the life of the present bulbs and various
efforts made by the engineering department to coerce the battery
manufacturers into accepting delivery of this inferior product which
Regraded Unclassified
93
. 2
it was estimated would increase the volume of lamp business by 60%.
Mr. Arnold pointed out that the Anti-Trust Division is at present
engaged in trying the case against General Electric Company and that
Mr. Swope and Mr. Young avoided indictment by tie vote of the Grand
Jury,
(2) The Standard 011 Company of New Jersey cooperated with
I. G. Farbenindustrie to make available to I. G. Farbenindustrie and
the German Government artificial rubber patents for the manufacture
of both "Buna" and "Butyl" while withholding the same patents from
American developers. Mr. Arnold pointed out that the consequence of
this was that the Americans had developed no "know-how" in the manu-
facture of these products. Mr. Arnold pointed out further that
companies such as Standard 011, on being confronted with evidence of
such actions, males no attempt to defend the conduct and are eager and
willing to sign consent decrees in order to give licenses to American
samifacturers but that they invariably point out that they cannot give
consent for their German partners, and Mr. Arnold hopes that the
Treasury Department will take over at this point and give the consent
for the German partners.
(3) Mr. Arnold pointed out that the situation is practically
the same with reference to magnesium production. The patents there are
owned by a corporation which is owned 50% by the Aluminum Corporation
of America and 50% by I. o, Farbenindustrie. In both of these cases
the Anti-Trust Division is at present discussing consent decrees and
would like to have the Treasury Department send a representative to sit
in on these discussions with authority to bind the Treasury Department.
Mr. Arnold then pointed out that he had advised Mr. Rowe
that, in his opinion, it was very fortunate that the Treasury Department
had obtained the power from the President, since the bulk of the work in
the Department of Justice is falling upon the Anti-Trust Division which is
undermanned, and that since the Treasury Department now has the power the
Anti-Trust Division can utilize the personnel of the Treasury Department.
Mr. Bernstein asked if the best solution would not be to vest either the
patents or the corporation holding the patents on behalf of the Germans,
in the Secretary of the Treasury. Mr. Arnold replied that to his mind
this was the ideal solution. Mr. Bernstein then raised the problem that
if the Secretary of the Treasury gave royalty free licenses he would be
giving away property belonging to the Germans, and if the policy should
subsequently be determined that property should be returned to the Germans
the Secretary's position would not be a strong one. Mr. Arnold replied
that it is the theory of the Anti-Trust Division, based on an inference
Regraded Unclassified
94
from the Morton salt case, that until the holder of patents has explated
his offense against the public in restraining competition he 18 not
entitled to royalties, so that the Secretary of the Treasury would not
be giving away any property of the German owner but would be giving away
at most the German owner's right and power to litigate the validity of
this position. Mr. Arnold pointed out that the American corporations
involved have so far not been willing to challenge this position by
litigation, and to him that seemed an adequate answer to any charge that
the Secretary of the Treasury would be giving away property belonging to
the Germans. Mr. Bernstein felt that that explanation was rather legal-
intic, and that a better explanation would probably be that this was
property of Germany and we were at war with Germany. If we found a
supply of munitions on the New York docks we would have no hesitancy in
vesting those munitions in the Secretary of the Treasury and then giving
them back to the Germans by shooting the munitions at the Germans. It
seemed to him that this was a parallel case. Mr. Arnold reiterated his
legal argument and pointed out that it might be desirable to have the
Secretary of the Treasury challenge one of these consent decrees and
bring the matter to the Supreme Court, at which time the Anti-Trust Division
could argue its theory and the Treasury Department could argue its theory
and the matter could finally be settled. Mr. Arnold reiterated his re-
quest that someone from the Treasury Department, or possibly two men from
the Treasury Department, be assigned to sit with his people in the Justice
Department and work on these patent problems. He pointed out that the
magnesium case and the rubber case were both in the final stages of
negotiation.
(4) Mr. Arnold next suggested that it would be highly desir-
able to have an exchange of letters between the Attorney General and the
Secretary of the Treasury establishing a policy. Mr. Arnold pointed out
that this technique had been employed with various other agencies of the
Government, notably the Office of Price Administration and the Interstate
Commerce Commission. Mr. Bernstein suggested that consideration of that
matter be deferred for a few weeks to see how the actual working arrange-
ment would operate.
(5) Mr. Borkin then stated that most of the chemical companies
in the United States are holding patents on behalf of I. G. Farbenindustrie
in order to avoid the alien property custodianship and that some of these
arrangements go back as far as 1931. Mr. Borkin mentioned specifically
that the Monsanto Chemical Company was holding approximately 180 patents
for I. G. Farbenindustrie in this way. Mr. Bernstein stated we were
quite interested to learn this.
Regraded Unclassified
95
(6) Mr. Arnold next stated that all he needed actually was
information from the Treasury Department as to what cartel arrangements
were in existence. He could then work the problem out by means of 1n-
dictment and consent decree, although he feels that it would be far
preferable to work it out by means of vesting the German interest in
the Secretary of the Treasury and then utilizing the consent decree
with the Secretary of the Treasury standing in the place of the German
defendant. Mr. Arnold asked what information the Treasury Department
had available on such agreements. Mr. Bernstein explained to Mr. Arnold
that all such agreements and contracts were required to be reported on
Form TFR-300 and that by means of the mechanical devices the reports
could be sorted rather repidly. Mr. Arnold expressed surprise that
there was such a census, pointing out that he has had great difficulty
in obtaining information since, if the company is obdurate, his only
solution is a Grand Jury investigation. Mr. Bernstein pointed out that
a complete set of the census is on file with the Claims Division of the
Department of Justice.
(7) Mr. Borkin next discussed the Patent Committee set up by
the President, pointing out that, in his opinion, there is only one
individual on the Committee who is reliable. Mr. Borkin pointed out
that the labor representative on the Committee is Mr. McGrady of RCA;
the industrial representative 16 Mr. Owen D. Young of General Electric;
and the scientific representative is Mr. Kettering of General Motors,
the public is represented by a law professor who taught Mr. Coe, Com-
missioner of Patents, many years ago. The other member, Mr. Chester
Davis, is a person in whom Mr. Borkin has great confidence. Mr. Arnold
concurred vigorously with Mr. Borkin's sentiments concerning this
Committee, pointing out that it was probably the worst group which could
have been assembled within the United States for this purpose. Mr. Cox
took no part in the discussion.
Mr. Hodges reported that the magnesium case and the
rubber case are in the last stages of negotiation, but that he felt it
would not be desirable to bring a Treasury representative into the
negotiations at this time since it might alarm the attorneys for the
companies and create confusion.
J.John Lawlur
noted
BB
Regraded Unclassified
96
STATEMENT OF SECRETARY MORGENTHAU BEFORE
THE COMMITTEE ON WAYS AND MEANS OF THE
HOUSE OF REPRESENTATIVES
MARCH 6, 1942
I am appearing before you today in support
of H. R. 6691 which raises the limitation on the
power of the Treasury to issue public debt
obligations under the Second Liberty Bond Act,
as amended, from $65 billion to $125 billion,
and provides greater flexibility to enable the
Treasury to conduct its war financing operations.
On previous occasions I have stated that I favored
this periodic review by the Congress of the
situation with respect to the public debt. I
think it serves a. useful purpose. It brings to
the attention of the Congress and the public the
condition of the public treasury.
Regraded Unclassified
97
- 2 -
It is urgent that this bill be promptly
enacted. The balance of our borrowing authority
at the end of February, 1942, WAS about
$1,400,000,000. By the end of March it is
anticipated that the borrowing authority will be
insufficient to cover the debt issues that will
be required during the month of April.
In January, 1941, I appeared before your
Committee in support of a. bill to increase the
total borrowing authority from $49 billion to
$65 billion. It appeared at that time that a
limitation of $65 billion would be sufficient to
enable the Treasury to finance the estimated
deficit in the Budget until the end of the present
fiscal year and provide some margin.
Regraded Unclassified
98
- 3 -
But we could not foresee then that we would be
engaged in a war that would require our all-out
effort. Our defense program at that time amounted
to approximately $28-1/2 billion in appropriations,
contract authorizations, and recommendations, The
war program now exceeds $140 billion, exclusive
of commitments by governmental corporations.
The 1943 Budget submitted to the Congress
early in January indicates that the deficit for
the current fiscal year ending next June 30 will
amount to $18,600,000,000 and, in addition, that
the Treasury will be required to advance to
governmental corporations approximately $3 billion
to finance their activities. On the basis of these
estimates the public debt on June 30, 1942, will
amount to $70,600,000,000.
Regraded Unclassified
99
- 4 -
The estimated deficit in the fiscal year
beginning July 1, 1942, after taking into
consideration contemplated additional budgetary
revenues of $7 billion from new tax legislation,
will amount to $35,400,000,000. We will also be
required to raise $4,400,000,000 for governmental
corporations. The estimated increase in the
public debt for the fiscal year beginning July 1,
1942, based on these estimates, will thus be
$39,800,000,000 and leave us with a public debt
on June 30, 1943, of $110,400,000,000.
While these figures are huge in amount, they
are made necessary by the great task to which the
Congress and the American people have dedicated
themselves, namely, the task of winning this war.
Regraded Unclassified
100
- 5 -
Whatever the cost may be we are ready to face it.
We are strong enough to bear it, and we know that
it will be worth it in the end. As I have
suggested before, our production of overwhelming
quantities of war materials, an effort that makes
this debt necessary, should frighten no one but
our enemies.
The bill before you proposes certain changes
in the authority of the Treasury to conduct its
financing operations in addition to the increase
in the debt limitation. Briefly, these are 8.8
follows:
1. The Secretary of the Treasury would be
authorized to issue Treasury marketable securities
on a discount basis or on a. combination
interest-bearing and discount basis.
Regraded Unclassified
101
- 6 -
At the present time we have authority to issue
regular marketable securities on a discount basis
-
only if the maturity date is not more than one
"
year after their date of issuance. We also have
authority to issue Savinge Bonds on 8 discount
basis. But this additional authority would give
the Treasury more flexibility and permit it to
design its issues to conform more closely to the
investment requirements of particular classes of
purchasers.
2. The Secretary of the Treasury would be
authorized to accept in his discretion obligations
of the United States which are redeemable upon
demand in payment of any taxes imposed by the United
States.
Regraded Unclassified
102
- 7 -
This, in effect, can now be accomplished by the
holder of such obligations turning them in to the
Treasury and getting the cash and then using the
cash to pay taxes. The new authority would
simplify the procedure and would make it more
convenient to the taxpayer.
3. The Secretary would be authorized to offer
any new Treasury obligations in exchange for
outstanding obligations of any agency or
instrumentality of the United States which are
guaranteed by the United States as to both principal
and interest. The Treasury has taken over all
the financing of the various governmental agencies
which formerly issued marketable guaranteed
obligations and now provides them with funds by
purchasing their securities.
Regraded Unclassified
103
- 8 -
We are also in process of refunding the
outstanding guaranteed obligations of these
agencies into Treasury securities, but in
view of the language of the various statutes
under which guaranteed securities are issued,
it is now necessary to refund them indirectly
by purchasing the guaranteed security and
selling the holder a Treasury security. This
proposed amendment would simplify these
operations and permit us to offer Treasury
securities directly to the holders of these
guaranteed obligations in exchange for such
obligations, in the same manner as Treasury
securities are now refunded.
Regraded Unclassified
104
- 9 -
4. A provision is included to clarify
the authority existing in Section 19 of the
Second Liberty Bond Act, which as originally
enacted in 1934, was intended to permit the
Treasury to buy any of its securities in the
market at or before maturity out of the
proceeds of any public debt securities
previously sold. The present language,
however, is ambiguous and might be interpreted
to mean that the authority may only be used,
in effect, for the exchange of one security
for another. This amendment would clarify
the language in that section.
Regraded Unclassified
105
- 10 -
5. The Postmaster General would be
authorized to transfer the liability for
outstanding Postal Savings Stamps to the
Treasury, and his authority to issue such
stamps would be terminated as of the date
when the Treasury makes Treasury Savings
Stamps available to the public under
section 22 of the Second Liberty Bond Act,
as amended. The Treasury will then assume
the liability for redeeming such outstanding
stamps and such stamps will become a public
debt obligation.
Regraded Unclassified
106
- 11 -
When we initiated our present Defense
Savings program last year we deemed it
advisable to utilize the facilities of the
Postal Savings System because it was already
issuing savings stamps and had the facilities
for immediately carrying out an expanded
program. The question is now often raised by
the purchaser of Postal Savings Stamps as to
whether the funds thus provided go into the
Treasury for the purpose of helping to pay
for the National Defense. Of course such funds
do come into the Treasury and they are available
for that purpose, but it is sometimes a little
difficult for the purchaser to understand.
Regraded Unclassified
- 12 -
107
In view of the fact that the Defense Savings
program is carried on in the Treasury, I
believe that it would clarify the whole
program if we could eliminate Postal Savings
Stamps and issue instead Treasury Savings
Stamps. These new stamps would also be sold
through Post Offices as well as other agencies.
The Postmaster General concurs in this
proposed change.
6. A provision is included to remove
the tax-exemption privileges on income from
shares of stock issued by Federal agencies and
instrumentalities which were inadvertently
omitted from a similar provision in the
Public Debt Act of 1941.
Regraded Unclassified
- 13 -
108
This would put these shares of stock on the
same basis as obligations issued by the
United States and by its agencies as provided
in the Act enacted last year.
With this enlarged borrowing program
before us it is necessary more than ever that
the Treasury exert every effort to obtain its
funds from the current income of the people.
We have, therefore, materially expanded our
campaign to sell Defense Savings Bonds. Since
last May first, when the present Defense
Savings Bond program was inaugurated, we have
received approximately $4,300,000,000 in cash
through the sale of these securities,
Regraded Unclassified
- 14 -
109
Up to December first, just prior to the
attack on Pearl Harbor, the sale of these
securities averaged about $300 million a
month. In the month of December we sold
$500 million, in the month of January over
a billion dollars, and in the month of
February approximately $700 million. The
American people are responding splendidly to
our efforts to place these securities in the
hands of the real investing public. Within
the past few months we have inaugurated a plan
for voluntary pay roll deductions to purchase
Savings Bonds. Many business institutions have
already adopted such plans and the number is
increasing each week.
Regraded Unclassified
110
- 15 -
At the present time nearly one-half of all
persons working in trade and industry have
this method for buying Savings Bonds available
to them. It is hoped that within the course
of the next few weeks practically all
businesses will have adopted these plans.
The Treasury has a tremendous program
ahead of it. No one appreciates the magnitude
of our problems better than those of us in the
Treasury. We are facing the facts squarely,
and we are working continuously in our endeavor
to finance the war program as much as possible
from current savings in order that our fiscal
operations may be a positive force in winning
the war and in preventing inflation.
Regraded Unclassified
111
MAR 6 1942
My dear Mr.
In going over the transcript of my toutinong
before your Condition en Tuesday, March 3. I find
that I insivertently mininformed the Committee on
one point.
Is response to questions 1 stated that the
suggested range of rates for withholding individual
income tex at the source vas 1 to 10 persent of the
tax. the correct server vas rather 1 to 10 persent
of the income subject be tax.
I il witing this letter to make sure that my
teching my not mislead the Committee in this
matter,
Sincerely yours,
(Signed) 1. Morgenthas, 12,
Searetary of the Treasury
Remarable Rebert L. Doughten,
Chaires, Vague and Heans Committee,
Times of Representatives,
Washington, De c.
By Monsenter
Lompon
25:dad
3/6/42
Regraded Unclassified
112
March 6, 1942
Mr. Schwarz
Secretary Morgenthau
1.
Please try to get the original drawing of the
cartoon in this morning's Washington Post.
Submitted 3/6/42-
Regraded Unclassified
113
C: FRIDAY. MARCH 6. 1942
Better Early Than On Time
THAT
alla
INCOME
NOW
MO
RGENTHAU
COAKLEY
Regraded Unclassified
114
March 6, 1942
Lt. Stephens
Secretary Morgenthau
Please put on my calendar that Colonel Greenbaum
is coming to have lunch with me next Tuesday.
done-
Regraded Unclassified
115
DAYLIGHT TANKER RUNS
A PLAN TO OPERATE TANKERS ALONG THE COASTS ONLY DURING DAYLIGHT
HOURS AND ANCHORE THEM IN SAFE PORTS DURING THE NIGHT IS BEING
CONSIDERED.
NOST OF THE TORPEDOINGS ALONG THE ATLANTIC COAST HAVE OCCURRED
AT MIGHT. THE DAYLIGHT SAILING PLAN IS SIMILAR TO ONE USED IN THE LAST
WAR.
3/6--2915A
-
Regraded Unclassified
116
EXECUTIVE ORDER
2203
9088
PRESCRIBING REGULATIONS
CONCERNING CIVILIAN DEFENSE
By virtue of the authority vested in me by the act
entitled "An Act to provide protection of persons and
property from bombing attacks in the United States, and
for other purposes", approved January 27, 1942, and as
President of the United Status and Vormander in Chief of
the Army and Navy, I hereby prescribe the following regu-
laaions concerning civilian defense:
1, Such funds as may be available to enable the
Director of Civilian Defence to carry out the provisione
of the aforementioned act of January 27, 1942, shall be
used only for acquiring facilities, equipment and supplies
necessary to provide for the adequate protection of persons
and property from bombing attacks, sabotage and other war
hazards in the United States, its territories and noases-
aions; for providing services necessary to facilitate ef-
fective use of all such facilities, equipment and supplies;
for defraying expenses of procurement (including research
and development), inspection, transportation, storage,
maintenance, protection, distribution, recovery and return
of facilities, equipment and supplies; and for accounting
and administration with respect to such facilities, equip-
ment and supplies, services and expenses.
Regraded Unclassified
117
- 2 -
2. The Director of Civilian Defense from time to
time within the limitations of such funds as may be avail-
able to the Office of Civilian Defense shall determine the
general types and respective quantities of equipment which
he shall deem necessary and desirable to be purchased. In
making such determinations, the Director shall be afforded
the advice and assistance of the War Department and may
make use of any other technical assistance, studies, re-
ports or information which may be available to him.
3. The Director of Civilian Defense shall notify the
Secretary of War, or such chiefs of services, bureaus or
divisions of the War Department as the Secretary may direct,
of each determination by the Director of the necessity of
and desirability for the purchase of equipment in accordance
with paragraph 2 of this order. The War Depertment shall
thereupon undertake all steps necessary for the procurement
as promptly as possible of equipment of the type and in the
quantity specified by the Director of Civilian Defense.
4. In conrection with the procurement of items of
equipment for the Office of Civilian Defense the War Depart-
ment shall undertake all necessary research, development and
standardization of such equipment; shall contract for the pur-
chase of such equipment; shall conduct all necessary inspec-
tions during and upon completion of manufacture or assembly;
and shall sec that all equipment conforms to specifications
prior to acceptance.
5. The War Department shall keep the Director of
Civilian Defense informed of specific items of equipment
Regraded Unclassified
- 3 -
118
being procured and of the approximate or probable dates
for delivery thereof, and the Director of Civilian De-
fense shall furnish to the War Department timely instruc-
tions as to the place or places at which such equipment
shall be delivered to the Office of Civilian Defense or
upon its order, The War Department shall make all neces-
sary and appropriate arrangements for the shipment of
such equipment to the place or places so designated and
shall be responsible for such equipment until delivery at
such place or places. Thereafter the Office of Civilian
Defense shall. be responsible for such equipment, including
its storage, maintenance, protection, issue and distribu-
tion,
6. There shall be made available to the War Depart-
ment, from time to time, within the limitations of such
funds as may be available to the Office of Civilian Defense,
sufficient funds to cover all proper expenses incurred by
the War Department in pursuance of this order, including
costs of research, development, procurement, inspection,
transportation, and furnishing of facilities and services.
The War Department shall have authority to pay all such
expenses out of the funds so made available to it. The
War Department shall keep the Office of Civilian Defense
informed from time to timo of all expenditures made from,
and obligations incurred against, the funds so made avail-
able to it.
7. In addition to facilities, equipment and sup-
plies provided for the Office of Civilian Defense through
the War Department as hereinbefore authorized, the Director
Regraded Unclassified
4 -
119
of Civilian Defense may accept equipment or supplies trans-
ferred from any other department or agency of the Federal
Government in conformity with applicable law, and may ac-
cept donations of, or may borrow or lease facilities equip-
ment or supplies from, states, municipalities or other polit-
ical subdivisions, or from private individuals or corporations.
The Office of Civilian Defense shall maintain at all times
full and accurate records of all property received by it
and of the disposition thereof. The Director of Civilian
Defense shall make adequate arrangements for the storage,
maintenance and protection of all equipment, facilities and
supplies of the Office of Civilian Defense in its possession.
8. Within the limitations of such funds es may be
available to the Office of Civilian Defense, the Director
may arrange with other public or private agencies for such
research or development work, in addition to that of the
War Department in connection with the procurement of equip-
ment, as he may deem advisable in order better to provide
for the adequate protection of persons and property from
bombing attacks, sabotage or other war hazards.
9. The Director of Civilian Defense shall make avail-
able the facilities, supplies, and services of the Office of
Civilian Defense in such localities in the United States, its
territories and possessions as he shall determine to be in
need of, but unable to provide, adequate protection of persons
and property from bombing attacks, sabotage or other war haz-
ards. The Director shall have full discretionary authority
from time to time (a) to define localities on the basis of
Regraded Unclassified
120
- 5 -
existing political subdivisions or on cuch other bases as
he may deem appropriate in view of areas of population density,
the location of vital war activities, or other factors giving
rise to particular risks from bombing attacks, cabotage or
other war hazards, (b) to allocate, under such priorities as
he may establish facilities, supplies and services to or among
loculities in need of, but unable to provide, adequate protec-
tion of persons and property from bombing ettacks, sabotage
OF other vor hazards, and (c) to recall any "acilities or sup-
plies, or discontinue any services ДО allocated to any locality.
In allocating facilities, supplies or services to any particu-
lar locality the Director may rely upon certificates of duly
constituted civil authorities of any state, territory, munici-
pality or other political subdivision comprising or situated
within such locality, setting forth the porticular facilities,
supplios or services which such state, territory, municipality
or other political subdivision is unable to provide for the
protection of persons and property from combing attacks, sabo-
trgo, or other wer hazards.
10. All equipment, facilities and supplies which shall
at any time be provided by the Director of Civilian Defense
for any locality shall bd St the disposition of the United
States Government, :nd the United States Government shall re-
toin in full its rights in such property BD awar, 180290 or
borrower, as the case may be. To such extent to may be practi-
cable, all such property shall be clearly and distinctly marked
LA the property of, or property under the control of, the United
Regraded Unclassified
- 6 -
121
States Government, Office of Civilian Defense. It shall be
the duty of the Director of Civilian Defense to report to
the Attorney General for appropriate prosecution under the
applicable provisions of the Federal Criminal Code any theft,
unlawful use, injury to or depredation committed against any
such property.
11. The equipment, facilities and supplies of, or under
the control of, the Office of Civilian Defense shall be made
available in any locality only by loan to duly constituted
civil authorities of any state, territory, municipality or
other political subdivision comprising or situated within such
locality, and any such authority may distribute the same to
responsible and qualified individuals or organizations, in
accordance with regulations issued by the Director of Civilian
Defense; provided that 1t. shall be a condition of all such
loans that the civil authority to which each loan is made
shall give assurance to the Director that the property loaned
shall be adequately protected and maintained, that it shall
not be used otherwise than for the protection of persons or
property from bombing attacks, sabotage or other war hazards
or for training or instruction incidental to such use, and
that such property unless lost, destroyed or consumed in the
course of such uso shall be returned to the United States
Government at any time upon order of, or pursuant to rules or
regulations prescribed by, the Director of Civilian Defense.
12. The Director of Civilian Defense may prescribe in-
signia, arn bands and other distinctive articles which may be
worn by persons engaged in civilian defense activities and
Regraded Unclassified
122
- 7 -
may establish rules and regulations for the wearing there-
of. The wearing of any such insignia, arm band or other
distinctive article otherwise than in accordance with such
rules or regulations by any person having knowledge there-
of shall subject such person to the penalties provided in
section 2 of the act of January 27, 1942,
13. The Director of Civilian Defense may make and
issue such rules, regulations and orders, may prescribe
and adopt such forms, and may make and enter into such
agreements, leases and arrangements, not inconsistent with
the act of January 27, 1942, the terms of any appropriations
thereunder, and the regulations prescribed in this order,
as he may deem necessary or desirable to carry out the pur-
poses of such act. The Director may exercise any of the
powers or duties conferred upon him by this order or by the
act of January 27, 1942, through any responsible person in
the employ of the Office of Civilian Defense that he may
designate.
14. All purchases and contracts for supplies or ser-
vices made pursuant to this order shall be exempt from the
requirements of section 3709 of the Revised Statutes to the
extent permitted by law.
FRANKLIN D. ROOSEVELT
THE WHITE HOUSE
March G, 1942
Regraded Unclassified
read YEARS
123
- INTERATMENT
- - - and
MAR 6 1947
TREASURY DEPARTMENT
BUREAU OF ENGRAVING AND PRINTING
OFFICE OF THE DIRECTOR
MEMORANDUM
March T.the 6, 1942.
Security
ask
For Mr. Swope:
13
On December 16, 1941, the Secretary addressed
a memorandum to me asking whether any commemorative
postage stamps were scheduled for the next six months.
The Secretary was advised that the Post Office Depart-
ment had none under consideration at that time,
Yesterday the Post Office Department asked
this bureau to prepare designs for three stamps to
replace the current three so-called "defense stamps".
The defense stamps now on issue are of ordinary size.
The new ones under consideration are to be of special
delivery size. The tentative design calls for the
Eagle with his wings arranged in the form of a "V",
with the words "Win this war". As further consideration
is given the designs, it is possible there may be
radical changes from those we are now working upon.
Prossee
POWDEFENSE
BUY
VIPES
AMPRES
-
every
Regraded Unclassified
124
December 16, 1941
Mr. Hall
Secretary Morgenthau
Please let me know today how many commemorative
stamps you have scheduled for the next six months. It
seems to me that one of the ways we can economise is
to cut down the number of commemorative stamps.
Are you equipped with job printing machinery
to do some of the work for the Defense Savings Group?
Could you get in any additional machinery to do some of
the work as their load increases? It seems to me that
the machinery would pay for itself very quickly through
the use of it on 8. 24-hour basis.
Regraded Unclassified
125
December 16, 1941.
For Secretary Morgenthaus
This memorandum answers yours of today.
The Post Office Department reports that there are DO
commemorative stampa scheduled for the next siz months. Several
requeste have been received at the Department asking for the iseu-
ance of a stamp to commemorate the Statehood of Kentucky on June 1,
1942. These requests have not yet been presented to the Postmaster
General.
The provisions of Title 44, of the Federal Code, Section 111,
is 46 follows:
"All printing, binding, and blenk-book work
for congress, the Executive office, the judiciery,
and every executive department, independent office,
and satablishment of the Government shall be done
at the Government Printing Office, except such
cases of work as shall be deemed by the Joint Com-
mittes on Printing to be urgent or necessary to have
done elsewhere than in the District of Columbia
for the exclusive use of any field service outside
the said District."
Owing to the foregoing Law the Bureeu of Engraving and Print-
ing hus installed only sufficient job-printing machinery to meet the
needs of the security printing required by the Department and other
Agencies.
I as inclined to believe that it would be extremely difficult
to get immediate delivery on any additional equipment in the event the
buresu is authorized to take over Defense Sevings printing.
Notwithetanding legal restrictions this buresu has been siding
the Defense Savings group from time to time, end will continue to do no
AB long 00 the emergency lasts.
L. 1. Hall
AWH/ole.
Regraded Unclassified
126
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE March 6, 1942
10
Secretary Morgenthau
FROM Mr. Kuhn
Wallace Deuel telephoned me from Los Angeles this
afternoon to give me some background about Disney which
he did not want to put in B. letter. He wanted me to
know these things before Disney's arrival here for the
Tuesday meeting, He says Disney is troubled on a number
of counts, and he may not be willing to go through with
the project we have outlined.
1. Disney is fearful of becoming labeled as a
propagandist in the public mind, with consequent damage
to his reputation as B. whimsical, non-political artist.
He is bothered by a few abusive letters he has had about
the New Spirit, charging him with various political,
racial, end other affiliations. Apparently he also remem-
bers Lowell Mellett's question at the Secretary's house,
"Aren't you afraid that you will hurt your reputation by
this sort of thing."
2. He is uneasy about the financial aspect of these
proposed films, B.B. a result of the trouble over the New
Spirit in Congress. It is apparent that this episode has
disheartened and troubled him in spite of the additional
publicity his picture received.
3. he is troubled about the sale and distribution
of the proposed film series on the ground that exhibitors
may not want to show propaganda films.
4. He is uneasy at the prospect of 8 number of other
government agencies joining the Treasury in the sponsorship
of these films with the possible result that the films
themselves may become mere compromises to suit all tastes.
The Rookefeller organization, for example, objects that
the proposed film of the Nazi child is too serious in treat-
ment and also makes the Nazis seem too nice.
Those who are working most directly on the new films
with Disney are enthusiastic about the proposed series; this
includes Mr. Deuel, who regards it as the most important
Regraded Unclassified
127
- 2 -
work he has done since his return from Berlin, and Mr. Grant,
the story writer, who came to Washington on Mr. Disney's
last two visits. Neither Mr. Grant nor Mr. Deuel will be
with him next week. In addition, George Gallup, the public
opinion analyst, is highly enthusiastic about the pictures
and their probable effect. He believes that the American
public wants just this kind of thing and that exhibitors
will be delighted to show the pictures.
Mr. Deuel said he did not want to exaggerate Mr. Disney's
mental reservations, but thought we should be warned privately
before Disney arrived. Naturally, he does not want anyone
to know that he tipped us off in this way.
7 K.
Regraded Unclassified
TREASURY DEPARTMENT
128
INTER OFFICE COMMUNICATION
DATE March 6, 1942.
TO
Secretary Vorgenthau
FROM
No, Have
Subject:
Operation of Payroll Savings Plane in 50 Large
Companies.
1. I am attaching to this memorandum the table on
we operation of payroll savings plane in large companies
that was discussed in your office this morning. The
inkle provides information on the operation of payroll
revings plane in the 50 largest companies reporting to
the Treasury for December 1941 and January 1942. The
takie is in two parts -- Part I ranks the companies in
the order of the number of persons employed on January 31;
and Part II ranks the companies in the order of the percent
of amployee participation in January.
2. The 50 companies listed in the table employed
roximately 1,580,000 persons. In December, 21 percent
of these persons were participating in the payroll savings
-lan. By the end of January, the carticipation had grown
to =7 percent. Deductions permitted by the employees of
these companies amounted to 3.5 percent of their aggregate
wares in December, and to approximately 5.0 percent of
their aggregate wages in Jenuary.
3. If the 50 companies are ranked in the order of
The number of employees -- Part I of the table -- it
1) parent that in companies of similar size there 1s
110 consistency in percent of participation. There are
large companies with a large participation -- General
Rectric, 85 percent, for example -- and large companies
with a small participation -- Bethlehem Steel, 23 percent.
A similar variation 1s found among smaller companies.
Commonwealth Edison with 10,000 employees has a 54 percent
marloyee participation, while Armstrong Cork, a company
0: the same size, reports only 3 percent of its employees
rticipating. For the country a.6 a whole it appears
and the situation 16 very spotty.
Regraded Unclassified
129
Фесгетагу Morgenthau - 2
4. Part II of the table ranks the companies in
the order of the percent of employee porticipation.
The companies at the head of the list vary in size and
DIE in different lines of business, but they have one
characteristic in common; that 16, a large percentage
of their employees are located in a few plants or live
In an area of limited extent. It is possible to reach
8 large proportion of these employees quickly, therefore,
and the company can make a 000 showing early in the
pro rem. The characteristic in common of most of the
companies at the bottom of the list, on the other hand,
is that they are spread out in their operations. Of
the 15 bottom companies, 12 are large railroads and it
is patent that it will take a lon time to reach all
the employees of such widespreed organizations.
Regraded Unclassified
130
Operation of Payroll Savings Plans in the Fifty Largest Companies
Reporting for December 1941 and January 1942
Part I. Companies Are Ranked in Order of Number of Persons Employed on January 31, 1942
:
:
Number of
Percent of Employees
Percent of Aggregate
Name of Company
:
Employees
Participating
Pay of Perticipating
Employees Deducted
:
January 31
:
Deo.
Jan.
Dec,
1
:
Jan,
:
General Motors Corp.
237,276
22
27
6
6
Bethlenem Steel Corp.
189,647
19
23
6
General Electric Co.
125,600
82
65
1
Chrysler Corp.
64,906
13
25
I
Western Electric do.
62,585
13
24
5
Baltimore & Ohio R. R.
54,218
11
11
IV
Southern Railway System
41,686
5
7
Sevi York Telephone Co.
39,719
21
47
5
Penific Telephone & Telegraph Co.
37,850
11
15
6
Illinois Central System
35,260
4
5
4
United Aircraft Corp.
33,000
70
68
3
Sould Aircraft Co.
32,400
CTY
22
5
Louisville &- Nashville R. R. Do.
31,733
16
20
1
Chicago, Lilwaukee, St. Paul & Pacific R. R.
30,770
4
17
4
Illinois Bell Telephone Co.
29,451
13
21
7
Southwestern Bell Telephone Co.
28,204
17
23
Cheeepeeke & Ohio Reilway Co.
28,037
2
4
pur
4
Southern Bell Telephone & Telegraph Co.
26,261
7
13
di
Chicago & Northwestern Line
26,100
11
Dev York, New Haven & Hartford R. R. Co,
23,459
4
16
NW
2
Morfolk & mostern Railway Co.
21,178
4
7
Great Northern Railway
21,061
3
9
Rook Island Lines
21,000
4
10
Public Service Corp. of New Jersey
20,386
27
39
New Shiland Telephone & Telegraph Co.
20,319
26
26
dell Telephone Co. of Pennsylvania
19,469
12
22
6
Airline Railway Co.
17,108
4
8
4
Atlantic Const Line R. R. Co.
16,537
2
3
It
American Telephone & Telegraph Co.
16,413
11
15
5
Chicago Surface Lines
15,600
56
70
2
Hoston & Maine Railrond
14,577
6
15
3
Lionigan Bell Telephone Do.
13,702
11
17
7
liverside & Dan River Cotton Kills
13,500
22
21
Knw Jersey Bell Telephone Co.
13,050
18
25
Traveler's Ins. Co. &: Branches
11,620
14
15
0:10 Boll Telephone Co.
11,568
to
12
Rev York, Chicago, & St. Louis Railway Co.
11,528
4
15
Z
Lenden Valley Railroad Co.
11,143
6
9
2
Yollow Truck & Coach KIB. Co.
10,941
18
21
in, J. Reynolds Tobacco Co.
10,766
42
46
with
3
4 5 7 5 6 4 6 3 5 5 3 5 5 3 4. 5 6 9 7 2 4 3 2 5 2 7 7 I 6 o 10-L MA 3 minimum 3 5
Northwestern Bell Telephone Co.
10,390
12
28
VD
Amatron Cork Co.
10,367
1
3
2
Commonwealth Edison Co.
10,220
33
54
Naozah Railway Co.
10,094
14
24
Legnolia Petroleum Co.
9,426
24
35
VIVO
Missourt-Kaneas-Texan R, R. Co.
8,586
11
20
Serve è Pacific Railway Co.
8,582
12
14
FVI
Strum Zellerbach Corp.
7,662
4
10
6
Denver & Rio Grande Western Ry.
7,701
12
12
2
Aetna Life Ins. Co.
7,692
9
11
2
Office of the Secretary of the Treasury, Division of Research and Statistics.
March 5, 1942
Loss than 0.5 percent.
Data not available.
Regraded Unclassified
131
Operation of Payroll Savings Plans in the Fifty Largest Companies
Reporting for December 1941 and January 1942
Part II. Companies Are Ranked in Order of Percent of Employee Participation in January 1942
:
Percent of Employees
:
: Number of
Percent of Aggregate
Name of Company
: Employees
Participating
Pay of Participating
:
Employees Deducted
:
January 31
:
Dec.
:
:
Jan.
Dec.
:
Jan,
:
:
Deneral Electric Co.
125,600
82
85
1
OALOR o Surface Lines
15,600
56
70
TO
United Aircraft Corp.
33,000
70
66
3
Commom/calth Edison Co.
10,220
33
54
1
Test You. Telephone 00.
39,719
21
47
5
de J. Reynolis Tobacco Co.
10,766
42
46
3
Fublic Service Corp. of New Jersey
20,386
27
39
3
Petrolaum Co.
9,426
24
35
Northwestern Bell Telephone Do.
10,390
12
28
Jenerol lotore Corp.
237,276
22
27
6
- England Telophone & Telegraph Co.
20,319
26
26
2
Carysier Corp.
64,906
13
25
1
Com Jersey Bell Telephone Co,
13,050
18
25
5
lestern Electric Do.
62,565
13
24
Which Co.
10,094
14
24
3
Steel Corp.
189,647
19
23
D
mouthwestern 3ell Telephone Co.
28,204
17
23
Boeths Aircraft Co.
32,400
9
22
Bull Telephone Company of Pennsylvenia
19,469
12
22
Illinois Bell Telephone Co.
29,451
13
21
7
Rivorside to Dan River Cotton Hills
13,500
22
21
2
Yellow Truck & Coach Nfg. Co.
10,941
18
21
Louisville 6 Neshville Railroad Co.
31,733
16
20
R. R. Co.
6,586
11
20
Citcus, Ilwaukee, St. Paul Be Pacific R. R,
30,770
4
17
?
bioking Sell Telephone Co.
13,702
11
17
7
X York, Dew Haven & Hartford R. R. Co.
23,459
4
16
2
Pruific Telephone & Telegraph Co.
37,850
11
15
b
American Telephone & Telegraph Co.
16,413
11
15
6
looton & Maine R. R.
14,577
6
15
3
Treveler's Ins. Co. & Branches
11,820
14
15
3
I'm York, Chicago, & St. Louis Railway Co.
11,528
4
15
4
Texas & Pacific Railway Co.
8,582
12
14
4
Southern Bell Telephone & Telegraph Co.
26,261
7
13
6
Onlo Bell Telephone Do.
11,568
8
12
7
Deliver & Rio Grande Western Ry.
7,701
12
12
2
Galtimore & Ohio Ry.
54,218
11
11
2
Chinago & Northwestern Line
26,100
7
11
W
Aetna Life Ins. Co.
7,692
9
11
2
non mmm 1 6 2 5 ? 7 B 2 4 4 4 3 4 minorinal 4 3 9
Rook Ialand Lines
21,000
4
10
3
from Zellerbach Corp.
7,662
4
10
6
Great Northern Railway
21,061
3
9
5
Leater Valley Railroad Co.
11,143
o
9
2
Senboard Airline Ry. Co.
17,108
4
10
4
Southern Anilway System
41,686
5
7
3
Morfolk L Western Ry. Co.
21,178
4
7
3
Illinois Central System
35,260
"
5
4
Cheonpenke & Ohio Railway Co.
28,037
2
4
4
Atlantic Coant Line R. R. Co.
16,537
2
4
Cork Co.
10,367
1
2
Office of the Secretary of the Treasury, Division of Research and Statistics.
March 5. 1942
1
Less than 0.5 percent.
not
Data not available.
Analysis of Exposure to Payroll Bavings Plane
February 28, 1942
Total number
Number exposed
Percent
in the
to payroll
of total
country
savings plane
(estimated)
exposed
Part A - Summary by Number of Orgenizations Exposed
I. Business organizations
(1) Large railroads
158
167
95
(2) Other firms with 500 employees or more
5,078
7,277
70
(3) Other firms with 100 to 499 employees
11,123
26,971
41
(4) Subtotal - large firms
16,359
34,415
45
(5) Firms with less then 100 employees
20,090
(6) Total business organizations
36,449
IT. Governmental organizations
#
III. Grand total
36,449
Part B - Summary ty Number of Employees Exposed
I, Buoiness organizations
(1) Large railroads
1,273,260
(2) Other firms with 500 employees or more
13,094,067
(3) Other firms *1th 100 to 499 employees,
2,461,709
(4) Subtotal - large firms
16,829,036
(5) Firms with less then 100 employees
544,168
(6) Total business organizations
17,373,204
30,400,000
57
II, Governmental orgenizations
(1) Federal Government
1,700,000
(2) State and local governments
380,904
2,700,000
33
(3) Total governmental organizatione
4,400,000
TTI. Grand total
18,254,108
34,800,000
52
March 6, 1942
Office of the Secretary of the Treasury,
Division of Research and Statistics,
1/ Excludes agricultural employees, military personnel, employees on WPA or NYA or CCC projects,
proprietors, firm members, self-emoloyed, cesual vorkers and persons in domestic service.
Date not available.
Regraded Unclassified
133
Firms Employing 100 to 499 Persons Participating in Payroll Savings Plans
(As reported by the Defense Savings Staff's State Administrators)
:
Number of firms with payroll
Total
Percent of total having payroll
:
savings plans
:
number
:
savings plans
State
:
Jan. 10
Feb. 21
:
Feb. 28
:
of firms
:
Jen. 10
Feb. 21
--
Feb. 26
:
:
:
:
(estimated)
1
Alabama
17
89
95
285
6
31
33
Arizona
15
31
35
58
26
53
60
Arkanses
22
33
33
142
15
23
23
Northern Delifornia
160
411
420
489
33
34
86
Southern California
495
654
668
1,171
42
56
57
Colorado
64
101
105
195
32
51
53
Connecticut
100
238
246
622
16
38
40
Delevare
0
o
0"
84
0
o
o
District of Columbia
8
20
26
152
5
13
17
Florion
48
97
104
139
35
70
75
Georgia
56
91
94
589
10
15
16
Idaho
19
26
26
50
38
52
52
Illinois
48
724
825
2,252
2
32
37
Indiana
0
295
310
586
o
50
53
IOWA
4
76
92
271
1
28
34
114
272
272
272
42
100
100
Kentucky
75
98
102
312
24
31
33
0
77
97
384
o
20
25
Louisiann
Nytop
3
40
42
198
2
20
21
Maryland
32
86
99
405
8
21
24
53
531
544
1,523
3
35
36
Michigan
137
515
528
1,022
13
50
52
Missesota
181
743
351
399
45
66
88
Mississippi
30
47
49
143
21
33
34
Missouri
o
276
342
664
o
42
52
56
90
Montana
22
35
35
39
90
Nebraska
61
70
123
E
6
50
57
Nevado
no
14
14
24
33
58
58
liere Hompshire
7
60
66
145
5
41
46
line Jersey
171
265
273
669
20
30
31
Sex Mexico
12
30
31
35
34
86
89
Sev York
505
1,349
1,484
4,239
12
32
35
499
6
28
30
North Carolina
29
141
149
North Dekote
1
7
7
29
14
24
24
Cuto
0
547
675
1,739
0
31
39
Eklehoma
29
133
136
345
8
39
39
Crogon
21
95
164
317
7
30
52
713
1,307
1,393
2,032
35
64
69
State Island
40
117
124
224
22
50
55
13
40
56
174
7
28
32
South Corolina
douth Dakota
5
15
16
10
26
79
84
Connessee
0
57
79
448
o
13
18
TAXOE
74
167
175
1,375
5
12
13
teah
13
19
25
111
12
17
23
Vermont
30
47
48
03
47
75
76
Virginia
31
127
146
332
9
35
43
Wookington
71
148
181
466
17
36
45
17
nest Virginia
0
34
47
272
a
13
0
192
207
680
C
25
30
eleconsin
1
14
14
14
7
100
100
o
2
:
2
D
100
100
Aleaka
Mailroads
46
49
49
52
85
94
94
Total
3,541
10,249
11,172
27,023
13
38
41
March 6, 1942
Office of the Secretary of the Treasury, Division of Research and Statistics.
-
Data are for February 21, Inseauch as no February 28 regort Yes received.
Regraded Unclassified
134
Firms Employing 500 Persone or More Perticipating in Payroll Savings Plans
(As reported by the Defense Savings Staff's State Administratora)
:
Number of firms -ith payroll
:
Total
:
Percent of total having payroll
savings plane
:
number
savings plane
State
:
Jan, 10
Feb. 21
Feb. 28
of firms
:
1
(estimated)
Jan. 10
Feb. 21
Feb. 25
:
Alabama
9
38
42
76
12
50
55
Arizona
15
19
19
19
79
100
100
&
16
16
15
33
89
89
Northern California
114
142
143
196
58
72
73
Southern Colifornia
123
157
156
165
75
95
96
Coloraco
22
23
23
32
69
72
72
Connecticut
97
139
142
185
52
75
77
Delewore
2
2
*
26
7
7
I
District or Columbia
12
24
24
52
23
46
46
Florida
18
29
31
66
27
44
47
Georgia
35
50
51
143
24
35
36
Idaho
ou
9
o
10
80
90
90
Illinois
277
376
384
634
44
60
61
Todtana
41
97
109
180
23
54
61
1048
9
37
37
53
17
70
70
Kenste
16
31
32
32
50
97
100
Kentucky
19
36
37
70
27
51
53
Louisigne
o
18
24
85
0
21
28
Maine
42
52
54
54
78
96
100
Maryland
40
98
99
154
26
64
64
41
250
256
370
11
68
69
Michigan
305
319
320
333
92
96
96
Minnecote
57
101
101
105
83
96
96
Mississippi
12
15
15
28
LE
54
54
Missouri
0
130
136
136
0
96
100
Nontena
4
5
MY
5
60
100
100
Nebraska
28
32
34
41
68
78
53
Nevade
1
5
5
5
60
100
100
Nove Haspahire
17
27
27
27
65
100
100
See Jereey
185
220
224
238
78
92
94
Sev Hexico
5
6
6
6
83
100
100
New York
435
767
799
1,250
32
57
59
North Cerolina
49
102
103
168
29
61
61
North Dekota
o
1
[
1
0
100
100
Ohio
285
419
444
557
51
75
60
Oklahome
22
37
38
62
35
60
61
Oregon
51
62
69
69
74
90
100
Pennsylvania
336
500
521
625
54
80
63
Rhoóe Inland
58
72
73
90
64
50
81
South Cerolina
27
55
60
9€
28
57
63
South Dakota
7
4
4
4
75
100
100
Tennessee
4
18
22
106
4
17
21
Texas
36
51
51
187
19
27
27
Utah
8
9
10
14
57
64
71
Versont
10
12
12
13
77
92
92
Virginia
41
77
30
95
43
81
84
44
51
53
86
51
59
62
Weehington
West Virginia
2
28
54
67
el
42
51
wisconsin
84
134
135
137
61
98
99
wyoming
o
1
1
1
0
100
100
Alaska
o
3
3°
3
o
100
100
Reilroade
98
105
109
115
85
91
95
Total
3,185
5,013
5,187
7,392
43
68
70
March 6, 1942
Office of the Secretary of the Treasury, Division of Research end Statistice.
# Date are for February 21, insemuch ae no February 28 report MBB received.
Regraded Unclassified
135
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE March 6, 1942
to
Secretary Morgenthau
FROM Gerard Swope
with reference to what you said yesterday,
possibly you sew the attached article in this
morning a New York Times in regard to the payroll
deductions for bonds, which are even somewhat
greater than at the rate that we mentioned.
I think you will also note with interest
the high average wage of the workers, and especially
the profit sharing among the workers, which amounted
to over $4,700,000. This profit sharing plan for
workers was initiated and approved by the stockholders
early in 1934.
G.S.
Regraded Unclassified
136
FRIDAY, MARCH 6, 1942.
FINAN
Average Pay of 109,000 Workers
At General Electric, $2,346 in '41
Total Earnings $257,364,000,
Against $153,497,000 Year
Before, C. E. Wilson Says
-$4,704,866 for Bonases
The average annual earnings of
employee of the General Electric
Company last year were $2,346, or
$45.11 a week, Charles E. Wilson,
president of the company, an-
A
hounced yesterday. They were the
highest in the history of the com-
pany and compared with $2,011, or
$38.67 weekly, paid in 1940.
The average number of workers
employed by General Electr a in
1941 was 109,689. compared with
76,314 in 1940, and total earnings
of employes amounted to $257,364.-
com against $153,497,000 A year
r, an increase of 68 per cent.
Charles E. Wilson
There were 122,840 employee on
the company's payroll at the end of
1941, not including workers in Af-
to about 82,000 eligible employee.
filluted companies or the 2,800 who
Profit-sharing payments for the -
were in military service at the
last half of 1940 were made to 68,-
close of the year.
000 employes.
Mr. Wilson also announced that
General Electric, one of the first
the total amount which will be re-
companies to adopt n. payroll de-
coived by employee under the enny-
duction plan for the purchase of
pany's general profit-ebaring plan
United States Savings Bonds, bas
for 1941 is $1,704,866. compared
AM of Feb. 1. last, appresionately
with $1,636,208 for 1940. Payment
100,000 employee who had pur-
the first half of the year under
chased, or authorized deductions
me plan WTLR made in August. and
for purchase, these bonds with
same time nêxt week the balance
B. mathrity value of nearly
of 1941 profit sharings will be paid
$23,600,000.
Regraded Unclassified
137
March 6, 1942
TO: HAROLD N. GRAVES
J
SUBJECT: PROGRESS REPORT FROM DEFENSE SAVINGS STAFF
SALE OF BONDS
Actual cash receipts from the sale of E, F and
G Bonds for the first three business days of March totaled
$1,733,000, a decrease of 44.1 percent from sales during the
corresponding three days for February. Receipts from the
sale of all Bonda for the first three business days of February
ere $146,223,000, while for the first three business days of
January sales were $69,900,000.
SERIES E BONDS
Sales of Series E Bonds for the first three business
days of March were $45,340,000, B. decrease of 39.9 percent from
sales during the first three business days of February. Receipts
from sale of Series E Bonds for the first three business days
of January were $43,764,000.
Ew/3/9
Regraded Unclassified
138
-2-
SPECIAL
Arrangements were started to change all promotion
material, radio, press, advertising, literature, etc., to
conform with the projected change of name to War Savings
Bonds and Stamps.
PLEDGE CAMPAIGN
Start of the Pledge Campaign has been scheduled
definitely for Massachusetts on Monday, March 30; Indiane on
Sunday, April 12; and in Pennsylvania, Friday , April 17. Other
state campaign starting dates are tentative.
In Indiana, April 12 will be known as "Bond Sunday."
All of the state's 3,910 polling places vill be opened from 12
noon to 10 P. M., and the Pledge Campaign ill be conducted on
en election basis. Approximately 85,000 volunteer orkers,
including precinct officers of both political parties, represent-
stives of the American Legion, the Defense Savings Staff, and
other groups, will make a determined effort "to get out the vote"
for the Pledge Campaign. Through cooperation of the telephone
company, all telephone users on "Bond Sunday" and the day before
ill be reminded of their patriotic duty to visit their election
precincts and make their pledges. Transportation to the polls
is also being arranged.
Secretary of Agriculture Wickard has issued e memorandum
for chairmen and members of the State and County Agriculture
Regraded Unclassified
139
-3-
PLEDGE CAMPAIGN (Continued)
Department War Boards for guidance in cooperation with the
Defense Savings Staff in the Pledge Campaign. (Copy attached)
PAYROLL SAVINGS
The War Department is advising proper authorities of
B decision of the Comptroller General of the United States,
(3-23888, dated February 20, 1942) prescribing the procedure
to be followed by contractors working for the Government on a
cost-plus-a-fixed fee basis covering installation of Payroll
Savings Plan.
A group of Senators were pictured signing up for
Payroll Savings at the Capitol. The ceremony nas filmed by
Paramount and Pathe Newsreels for distribution to theatres week
of March 6, and still pictures were serviced by Acme Newspictures,
Inc., and Harris and Ewing. (Photograph attached.)
newsreels
The newsreel crews of the Defense Savings Staff made
shots of local residents in the following cities this week:
Santa Fe, N. M.; Denver, Colo.; Spokane, Wash.; Waterloo
end Sioux City, Iowa; and in the Tri-Cities, Devenport, Iowa,
and Rock Island and Moline, Ill.
Regraded Unclassified
4
140
NEWSREELS (Continued)
Universal Newsreel carried 8 sequence on the launching
of the American Federation of Labor billion dollar campaign at
the Minute Man statue in Concord, Mass. (Newsreel release sheet
sttached.)
SPECIAL ACTIVITIES
Edward G. Robinson made additional appearances at
factories and shipyards in the New York City area urging adoption
of the Payroll Savings Plan.
Dinah Shore and Sergeant York are scheduled to appear as
guest stars at B. Defense Bond Rally in Nashville, Tenn., on Thursday,
Merch 12. Gene Tierney is set for 8 similar rally in Des Moines,
Towa, on Monday, March 9.
Sabu, the "elephant boy," made appearances this week
before groups of newspaper carrier Defense Stemp selesmen in
Hartford, Bridgeport and New Haven, Conn., and in Providence, R. I.
Six thousand Washingtonians attended the first in B
series of community sings to be held throughout the nation, starring
Lucy Monroe. Guest stars at the Washington sing at Riverside Stedium
included Walter Pidgeon, Irving Berlin and Barry Wood. Music was
by the Army, Navy and Marine Bends. (Detailed information attached.)
PRESS
Western Newspaper Union, feature syndicate which services
the majority of the eleven thousand weekly newspapers, agreed, ES
the result of a conference with Defense Savings Steff representatives,
to extend their cooperation in promoting Bond and Stamp sales.
Regraded Unclassified
PRESS (Continued)
-5-
141
In their ready-print service to weekly newspapers,
estern Newspaper Union will use our feature, "What You Buy With
Defense Bonds." Syndicate officials estimate this should assure
its publication in approximately 5,000 newspapers.
The same syndicate plans to use feature stories on the
Defense Savings Program, plus use, on a continuing basis, of such
material as our one-column boxes, fillers and photographs.
Officials of the Book-of-the-Month Club report they will
adopt the suggestion to imprint the Minute Man on the jackets of their
milications. This means that several hundred thousand books, shipped
each month to their subscribers, will bear the Treasury Department's
appeal.
The American Federation of Musicians has sent suggested
Defense Bond messages to all members for use by band leaders and
combers in making announcements. (Copy attached.)
COLLEGE PRESS
Amherst College has adopted B. "Stamp-a-Week" sales campaign.
In its first week more than $300 worth of Stamps were purchased by
the 850 students. To lend impetus to the campaign, a special Defense
Savings Week, featuring a theatrical on Thursday night, March 5; a
Victory Ball on Friday, March 6; and a glee club concert and basket-
bell game on Saturday, March 7, were scheduled. Defense Savings
Stanos were sold at each event. Music from the dance was broadcest
along 1th a Defense Savings announcement, over the Mutual Broadcesting
System network.
Attached is the first publicity mailing of a Defense Bond
campaign to be directed to the 620 college newspapers of the country.
This special campaign, which 16 being handled by Leonard Herris, will
be E continuing effort.
Regraded Unclassified
-6-
142
MAGAZINES
Attached to this report are two scrapbooks carrying
sample Defense Bond publicity which has appeared in leading
magasines.
Photoplay Magazine for April carries an editorial
based on the theme: "Carol Lombard died for Defense Bonds, the
least you cen do is buy one." The same issue publishes e photo-
graph of Dorothy Lamour selling Bonds.
A full page of photographs of Miss Lamour selling
Bonds in various cities, appears in the April issue of Movie
Stars Parade Magazine.
Radio Mirror Magazine in its May issue reprints the
complete Baby Snooks radio script which was performed by Fannie
Brice on the Treasury Hour in December.
FARM PUBLICATIONS
Twenty-eight of the 45 farm publications which have
Audit Bureau of Circulation ratings have signified willingness
through their representatives to cooperate fully in Bond and Stamp
promotion. Specific requests for material were received from
editors. Arrangements are being made to service them cartoons,
feature stories, editorial fillers, and news releases.
Regraded Unclassified
- 7 -
143
FARM PUBLICATIONS (Continued)
As a result of personal contact with editors and
representatives of ferm publications, 28 papers end periodicals,
with 5. circulation of 8,000,000, out of a total circulation of
15,000,000 in this field, (ABC rating) promise wholehearted
cooperation ith the Bond and Stamp campaign.
COMIC PUBLICATIONS
Publishers of comic magazines, after a meeting with
Defense Savings representatives in New York, decided to adopt
the following program to promote interest in the Defense Savings
Program among their readers:
(1) To devote whole comic adventures stories based
on the theme of purchases of Bonds and Stamps.
(2) To publish an open letter, addressed to the
boys and girls of America by Secretary Morgenthau, in all issues
of their publications.
(3) To print cuts of the Minute Man and to mention
Bonds and Stamps &8 often 8.8 possible in all of their issues.
(4) To conduct a contest for the best cartoon strip
dealing with Bonds and Stamps, with the winning sketch to be
published in a future issue of "Our America".
LABOR PRESS
A spot survey of Labor Press publicity results and
sample clippings are attached.
Regraded Unclassified
-8-
144
LABOR PRESS ADVERTISING
Results to date show 120 labor pepers are publishing the
second Labor Press advertisement on Payroll Savings. These publica-
tions have en approximate circulation of 2,000,000 readers among
union members.
BUSINESS PUBLICATIONS
A total of 641 business publications report using our
Payroll Savings Advertisement No. 2. These publications have an
approximate combined circulation of 4,725,018. Our advertising
release No. 3, proof attached, is now being mailed for appearance
in March and April issues.
There is attached a letter from The Chilton Company
referring to Business Publications Ad No. 3. The Chilton Company
is publisher of Iron Age, Commercial Car Journal, Department Store
Economist and eight other leading business papers having B total
circulation of 200,000 business executives.
COMPANY MAGAZINES
More than 850 company magazines now report using one or
more of our releases in each issue. These publications reach in
excess of 9,000,000 readers. Sample attachments from General Motors
Folks, circulation 350,000, and the Michigan Bell, show how company
magazines are utilizing our material for back and front covers.
VINDOW POSTERS
Jumbo window posters to be used by 8,500 Chevrolet
dealers nationally have been issued by the sales department of the
Chevrolet Division of General Motors. (Sample attached.)
Regraded Unclassified
-9-
145
DIRECT MAIL
Sale of Defense Savings Bonds through the medium
of direct mail totaled $24,436,878 as of March 4. This is
an increase since February 26 of $544,205.
NEWSPAPER CARRIER SALES
As of March 5, a total of 824 newspapers report that
their carrier boys have sold a total of 147,522,829 ten-cent
Defense Savings Stamps or their equivalent in Bonds or Stamps
of higher denominations. This figure represents an increase
of 12,638,564 ten-cent Stamps sold since the report of February
27.
RADIO
To date, 703 radio stations have requested and are
using the transcribed fifteen-minute Defense Savings Radio
Program, "The Treasury Star Parade," on a three times weekly basis.
A total of 828 stations throughout the nation now
broadcast the appeals of Minute Men speakers. Locally, in
Washington, 105 Minute Man programs were broadcast during February.
In Chicago, 300 Defense Savings announcements weekly -- one, two and
five minutes in length -- are scheduled for broadcasting.
In all, 395 radio stations, of which 300 have 100 percent
membership, are now subscribed to the Payroll Savings Plan.
Regraded Unclassified
-10-
146
RADIO (Continued)
Broadcasts designed especially for women listeners
include 910 appeals by women "Minute Men"; Defense Savings
Announcements on 54 sponsored programs including messages on
their own programs by Else Maxwell, Dorothy Kilgallen, Helen
Hiett and Ilke Chase; 4,142 announcements to women broadcast
over 100 stations during January.
Special Pledge Campaign radio announcements, varying
in uppeal, were prepared for all states about to start campaigns.
Incomplete January returns show 89 foreign language
stations used 8,413 announcements and 59 farm stations used 1,065
announcements on Bonds and Stamps.
The special radio listener pledge programs, introduced
in Boston through cooperation of Hotels Statler and Western Union,
are now being extended to Buffalo, N. Y., Pittsburgh, Pa., and
shortly will be started in Cleveland, Ohio, New York City, and
in other cities where there are Hotels Statler.
Sponsors devoting their station-break ennouncements to
Defense Bond promotion over 200 radio stations daily on the hour,
are now supplementing their printed advertisements with Defense
Bond and Stamp appeals. (Samples attached)
NEW YORK STATE MEETING
More than 1,000 volunteer orkers of the Defense Sevings
Staff of New York State held a successful "Dutch Treat" dinner
meeting at the Waldorf-Astoria Hotel on Friday, March 6. Governor
Lehman peid tribute to the ork of the volunteers. (New York Times
and Herald-Tribune accounts of the meeting attached.)
Regraded Unclassified
Daily changes in the stock of Series E savings bonds on hand
(In thousands of pieces)
: Number of : Number of pieces : Stock on hand :
IBM
:pieces sold :
manufactured
:
at close of
:
deliveries
: this day
:
this day
day
:
this day
Feb. 23
214
800
21,905
-
24
55
800
22,650
1,600
25
104
800
23,346
700
26
158
800
23,988
375
27
240
800
24,548
660
28
162
none-closed
24,386
I
Mar. 1
none-closed
none-closed
24,386
-
2
304
500
24,582
1
3
160
500
24,922
625
4
171
500
25,251
I
5
200
500
25,551
625
Office of the Secretary of the Treasury,
March 6, 1942
Division of Research and Statistics.
1/ Includes stock in hands of (1) Federal Reserve Banks and branches, (2) Post
offices, (3) Federal Reserve Bank issuing agents, and (4) Treasury vaults
in Washington.
Regraded Unclassified
UNITED STATES SAVINGS BONDS
Comparative Statement of Sales During
First Four Business Days of March, February and January 1942
(March 1-5, February 1-5, January 1-5)
On Basis of Issue Price
(Amounts in thousande of dollars)
:
:
Amount of Increase
Sales
: Percentage of Increase
:
:
or Decrease (-)
:
or Decrease (-)
Item
:
:
I
:
March
: February
1
March
: February
:
March
: February
:
January
I
over
:
over
:
over
:
over
1
=
:
:
February
:
January
:
February
:
January
Series 1. Post Offices
$ 16,049
$ 21,156
$ 22,926
5,107
1,770
- 24.1%
- 7.7%
Series 1. Banks
43,608
74,724
57,246
- 31,116
17,478
- 41.6
30.5
Series 1. Total
59,657
95.880
80,171
- 36,223
15,709
- 37.8
19.6
Series 7 - Banks
8,010
15,288
8,539
- 7.278
6,749
- 47.6
79.0
Series G - Banks
41,933
72,468
34,541
- 30,535
37,927
- 42.1
109,8
Total
$109,600
$183,636
$123,252
-$74,036
$60,384
- 40.3%
49.06
Office of the Secretary of the Treasury. Division of Research and Statistics.
March 6, 1942.
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 totale.
Regraded
Unclassified
UNITED STATES SAVINGS BONDS
Daily Sales - March, 1942
On Basis of Issue Price
(In thousands of dollars)
Post Office
Bank Bond Sales
All Bond Sales
Bond Sales
Date
Series I
Series I
Series 1
Series G
Total
Series I
Series I
Series G
Total
March 1942
2
$ 5,811
$ 15,868
$ 2,043
$ 8,726
$ 26,636
$ 21,678
$ 2,043
$ 5,726
$ 32,447
3
2,975
8.459
1,629
8,780
18,868
11,434
1,629
8,780
21,843
4
3.395
8,833
2,658
12,558
24,048
12,228
2,658
12,558
27,443
5
3,869
10,448
1,680
11,870
23,998
14,317
1,680
11,870
27,867
Total
$ 16,049
$ 43,608
$ 8,010
$ 41,933
$ 93,551
$ 59,657
$ 8,010
$ 41,933
$109,600
Office of the Secretary of the Treasury, Division of Research and Statistics.
March 6. 1942.
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
150
WILLIAM B. MURRAY
March 6th, 1942
My dear Mr. Secretary -
I am very happy to have your letter
of March 2nd.
I am up and around but scarcely
steady on my feet. However, in a
week or two I expect to be all right,
at which time I hope to go to Washington
for a day or two.
Sincerely,
The Hon. Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D.C.
Regraded Unclassified
151
March 2, 1942
Dear Mr. Murray:
Thanks and congratulations to
you for the very fine new Treasury
programs which you have been directing.
The record of the Statue of Liberty
play is one of the finest radio programs
I have ever heard.
All of us here marvel at your
ability to do such a grand job from
a sick bed. I understand you will be
up and around soon. When that time
comes, won't you come down to Washington
50 that I ma, talk to you and thank you
personally?
Sincerely,
(Signed) 1. Margenthaw, in
Mr. William Murray,
333 East 57th Street,
New York, New York.
n.m. C.
FK/cgk
Capies in Hompon
Regraded Unclassified
152
STANDARD FORM No. MA
TREASURY DEPARTMENT
APPROVED BY THE PREMDENT
MARCH 10, 1926
WASHINGTON
TELEGRAM
CHARGE TREASURY DEPARTMENT, APPROPRIATION FOR
OFFICIAL BUSINESS-GOVERNMENT RATES
Official
(The appropriation from which payable must be stated (in above lime)
. - - were
2=14:17
MARCH 6 1942
DV COTE
FINANCIAL SECRETARY
FISHER LOCAL 596
PONTIAC MICHIGAN
VERY GLAD TO SEE YOUR COMMITTEE MONDAY MARCH NINTH AT TWO
THIRTY
HENRY MORGENTHAU JR
Regraded Unclassified
153
March 6, 1942.
Draft of Cable to D. V. COTE, FINANCIAL SECRETARY,
FISHER LOCAL 596
Doubt very much whether Treasury can be of any
assistance in the matter referred to in your telegram
of March 4. However, will be glad to see your Com-
mittee on Monday, March 6 at 2:30 P. M. and will do
whatever I can.
Regraded Unclassified
154
Y
T
E
E
G
1942 MAR 5 AM A 15
R
A
F
H
W4 58 NL 2 EXTRA
T
PONTIAC MICH MARCH 4 1942
R
E
HENRY MORGANTHEAU JUNIOR
À
SEC OF UNITED STATES TREASURY
S
U
WASHINGTON DC
-
Y
OUR LOCAL IS SENDING COMMISSION OF THREE TO WASHINGTON TO
E
L
INVESTIGTE POSSIBILITY OF DEFENSE ORDERS FOR FISHERBODY
E
G
EMPLOYMENT HERE IN PONTIAC FOUR HUNDRED OUT OF APPROXIMATELY
FIVE THOUSAND EMPLOYEES WORKING NOW. WOULD APPRECIATE YOUR
COOPERATION IN ASSISTING OUR COMMITTEE WHEN IN WASHINGTON.
H
COULD YOU WIRE US APPOINTMENT DATE THIS WEEK END WITH OUR
COMMISSION IN WASHINGTON
T
R
D V COTE FIN SEC FISHER LOCAL 596 UAWCIO.
E
596
A
S
S10A MARCH 5 1942
U
R
Y
T.
E
Regraded Unclassified
153
MAR
6
The Director,
Bureau of the Budget.
Sir:
Reference in made to Bureau of the Budget Circular
No. 388, dated February 26, 1942, establishing the
priority classification of the several departments and
agencies with respect to transfers of employees under
the provisions of Executive Order No. J007 of Febru-
ary 20, 1942.
Only six activities of the Treasury Department
have been accorded preferred classification, as follows:
Class 1. - Procurement Division (lend-lease activities);
Class 2. - Scoret Service; Class 3. - Office of the
Secretary (general administration only), Foreign Funda
Control; Class 4. - Bureau of Customs, Bureau of
Narcotics.
with the exception of the Defense Savings Staff,
which was not included in Budget Circular No. 333, the
remaining activities of the Treasury Department have
been allocated to Class 5, which classification is
tantamount, under the terms of the Executive Order, to
declaring that such activities are relatively unimportant
to the war program. The Treasury activities which have
thus been denied a preferred classification include the
Bureau of Internal Revenue, the Bureau of the Public
Debt, the Division of Research and Statistics, the Office
of the General Counsel, and certain units of the Procura-
ment Division engaged respectively in the purchase of
strategic and critical unterials and the procurement of
supplies for the American P.ed Cross. with respect to the
Defense Savings Staff, which is engaged in promoting the
sale of Defense Savings Bonda and Stamps, no classifica-
tion has been designated.
Regraded Unclassified
1SE
2 -
Although the functions and purposes of these
activities have been outlined upon previous occasion to
the Bureau of the Budget, and while the relationship of
such activities to the war program should be obvious, I
an enclosing copies of memoranda which briefly describe
their functions and point out the importance thereof as
related to the was effort.
In failing to classify the Dureau of Internal
Revenue, the Bureau of the Public Debt, and the Defense
Savings Staff as performing important functions related
to the war effort, account has not been taken of the
fact that the financing of the war is a function
comparatively as essential as that performed by any
other unit of the Government, including the ANY and the
Navy. To cannot successfully conduct 500 @a. unless we
are ablo, either through the collection in tave 02
through the sale of bonds, to obtain 5110 funds with
to equip and maintain our Edroos. the
tions of the Office of the General Counsel and the
Division of Research and Statistics, as you will observe
from the accompanying menoranda, are likewise directly
related to the was effort. The justification for re-
vising the classification of the Procurement Division,
with respect to units engaged in the purchase of stratogic
and critical materials and the procurement of 7.6.2 Cross
supplies, will be apparent.
For the reasons set forth above, I cannot wise too
strongly your reconsideration of the priority clussifica-
tion established for those activities under Budget
Circular No. 386. If such classification should Le per-
mittod to stand, those important activities would in all
likelihood be deprived of the services of many of their
trained employees, definitely hampering the Government's
financing operations and otherwise impairing the
Treasury's participation in the war effort.
Very truly yours,
R
Mossimg?
homes 12
(Enclosures)
crs/m
Regraded Unclassified
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
BAR 1942
to
The Secretary
FROM Mr. Foley
Re: General Counsel Office comments on new Budget Bureau
priority ratings with respect to personnel transfers
The Office of the General Counsel, together with the bulk
of the rest of the Treasury, has been placed in class 5, the
lowest class OEI the priority rating list announced by the Budget
Bureau call February 26. This relative rating of our work in its
relation to the war effort, in my opinion, reveals a complete
misunderstanding of the importance of the work from the war stand-
point. As you know, the General Counsel AS the chief law officer
of the Treasury exercises general supervision over all personnel
and activities of the Legal Division, and coordinates all the
legal work of the Department. The immediate General Counsel's
office, which is the subject of this memorandum, consists of about
80 lawyers and 100 other persons. These report to me through
5 Assistants General Counsel, excluding the Bureau of Internal
Revenue, which I will mention later. All of the legal work of
the Department flows through these men to me, and 6. good deal
of it originates with them and their immediate staffs. An eval-2
untion of the relative importence of their work to the WEI effort
can best be appraised by 8. statement of their assignments.
(1) One Assistant General Counsel 1s in charge
of the legal work relating to the so-called freesing
and foreign proporty control, es well 88 verious other
monetary matters. At least 95 percent of his time
and that of his staff, and e very substantial percent-
age of my own time, is devoted to the problems related
to freezing and foreign property control. The Treasury
now has about $7,000,000,000 worth of foreign aspete
under this control, which represents economic warfare
in its purest sense. I note in this connection that
the Board of Feonomic Warfare is in class 2. All
the important policy decisions on this freesing And
foreign property work are mede by the General Counsel's
office, end the General Counsel signe 68 Acting Seare-
tery the documents and papers relating to it.
Regraded Unclassified
-2-
(2) Another Assistant General Counsel handles
Treasury legislation. At present, virtually all Treas-
ury legislation is war legislation. Thus this office
participated since Pearl Harbor in the drafting of
the sweeping First end Second War Powers Bills, appeared
before the Congressional committees in connection there-
with, and generally helped handle the bills all the way
through Congress. Among its other assignments, this
office also does all the legal work of Secret Service,
which it 18 noted has been placed in class 2 on the
Budget list, and supervises all the legal work of the
Procurement Division, the lease-lend activities of
which have been placed in class 1 on the list. This
office also acts BE legal advisor to the Coordinated
Treasury Enforcement Services, represents the Treasury
OD the law committee of the Defense Communications
Board, and is represented on and does the legal work
of the Treasury Committee which considers charges of
subversive activities against Treasury officers. The
above represents at least 90 percent of the work of this
office.
(3) Another Assistant General Counsel is in charge
of the legal work relating to the public debt end financ-
ing (including defense bond legal work), benking, the
Bureau of Accounts, and the Treasurer's office. In
view of the fact that the Treasury is going to have
to borrow about $3,000,000,000 a month during the next
fiscal year, it 18 apparent that the legal problems which
are arising and will arise are of a totally imprece-
dented size and complexity, and are directly related
to the war effort.
(4) Another Assistant General Counsel 1a in charge
of the legal opinion work for the whole Department,
which at present involves opinions principally on var-
related subjects, and is also in charge of the legal
work of Customs end Narcotics. It is noted that the
Bureau of Custome and the Bureau of Narcotics are both
placed in class 4 on the list. This Assistent General
Counsel devotes a large part of his time to problems
of international law end foreign relations involving
the State Department, and also to war censorship prob-
lema.
Regraded Unclassified
(5) The remaining Assistant General Counsel works
on special problems, almost All of which denl with wer
problems. These include the legal aspects of general
economic problems before the Department, end of verious
lease-lend problems other than the procurement sapects.
He is the Department's rejresentative on the Treasury-
British Committee, end on the Price Control Committee
of D.P.A.
Aside from the foregoing, 1 may Bay that E considerable
number of vital defense and wer projects of major importance
have been handled in whole or in part by this office, sometimes
at the direction of the President. For example, the Treasury
legal staff played the principal part in the drafting of the
Lease-Lend Act end the solution of the various legal problems
incident to ite enactment and to the insuguration of the lease-
lend program.
For the purposes of this memorandum, I em assuming that the
priority rating list places legal division attorneys, and other
personnel who work outside the immediate General Counsel's office
in one or another of the various bureaus, in the Bame classi-
fication AS the administrative personnel of the sime burean,
since the only listing of legal personnel, 88 such, is under the
besding "Office of General Counsel" in class 5. I em willing
to let legal personnel in the verlous bureaus (such 88 those in
the Bureau of Internal Revenue) share whatever classification
the administrative personnel of the same bureau may receive,
although an examination of the listing of the various Treasury
bureaus indicates to me that many of them are reted mich lower
than the war quality of their work justifies.
So for t.6 the immediate General Counsel's office is con-
2 reting represents 8 serious mistake, and I believe that definite the
cerried, however, I feel satisfied that anything less than a class
consideration should be given to placing us in class 1. If
situation were not 60 grave, I would find e certain farcial aspect
in the fact that the Alley Dwelling Authority, the Bureau of
name only B few examples, are all in n position under the present
Agricultural Economics, and the Census and Patent offices, to
reting list procedure to take vitally needed Treasury lawyers
out of this office without any power on our part to prevent them.
17oley)-
dgs
Regraded Unclassified
TREASURY DEPARTMENT
WASHINGTON
OFFICE
- - INTERNAL REVENUE
March 3, 1942.
TO
Memorandum for THE SECRETARY:
The recent priority classification placing the Bureau
of Internal Revenue in Class 5 furnishes ample reason for
serious apprehension AS to its probable effect upon the
prompt collection of the revenues necessary to finance the
war effort. As the revenue-collection arm of the Govern-
ment the Bureau of Internal Revenue's relationship is a
direct and vital one and any reduction in the quality or
strength of its personnel is bound to reflect in a lower
degree of operating efficiency which in turn will ultimate-
ly and inevitably result in 8. decrease and delay in tax
collections. Yet, aside from the actual armed forces of
the United States in time of war, the next function of
Government in order of practical importance, namely, raising
of money to meet the expenditures of the Nation, is placed
by this order in the fifth and least important class.
The Bureau of Internal Revenue is now administering
69 types of miscellaneous and excise taxes; the estate and
gift tax; and income and excess-profits taxes. The Bureau
of Internal Revenue is also responsible for collecting
social security taxes and the alcohol tax. Experience has
demonstrated that many taxpayers will not report and pay
the correct tax unless it is generally known that tax
returns are carefully examined by capable personnel. A
trained, experienced, competent personnel is as essential
in collecting the internal revenue as that required in the
operation of an airplane, a tank or a battleship.
In addition to the all-important function of the col-
lestion of taxes it is to be observed that some of the
Regraded Unclassified
-2-
Mr. W. N. Thompson.
Memorandum.
Internal revenue taxes are in force not only for the
purpose of raising revenue but in the interest of the
public welfare. I em referring particularly to the taxes
imposed on the production and sale of liquor, tobacco
and narcotics and also the employment taxes. Unless these
laws are enforced efficiently and properly it is a reason-
able presumption that the illegal output and consumption
of products generally considered detrimental to the public
welfare will increase. Prompt assessment and collection
of employment taxes, particularly during the present era
of substantial wages, is absolutely necessery.
The backbone of the Bureau of Internal Revenue is its
skilled technical personnel which includes trained account-
ants, lawyers and engineers. It is also to be observed
that the clerical force of the Bureau above Grade 4 is also
doing a highly specialized type of work. At this time the
Bureau of Internal Revenue confronted with the constantly
growing demand on the time of its skilled personnel is in no
condition to match the terms of the offers that may be made
by agencies having preferred priority classification. As
a matter of fact, the Bureau of Internal Revenue is, experi-
encing great difficulty in obtaining the personnel necessary
to administer the new taxes provided for under the Revenue
Act of 1941. At this point it is pertinent to note that
in the collection of taxes the Bureau of Internal Revenue
is expected and called upon by all types of taxpayers to
furnish assistance in making their returns to the Government.
In fact, at this very moment the Bureau is being criticized
on its failure to furnish more comprehensive service to
taxpayers in connection with the filing of 1941 income tax
returns.
It is to be observed that so far as the departmental
forces in Washington are concerned, the Bureau of Internal
Revenue is practically decentralized. For example, the
Bureau has 23,028 employees in the field and 4,510 employees
in Washington. It is to be emphasized that the Bureau's
principal function in Washington is one of service and super-
vision over its field employees and again it is in no position
to withstand raids from agencies in more favorable classes
which are in a position to make very attractive offers to our
more skilled employees. While the consent of the employee
is necessary, it is probable that many of them will want to
transfer particularly in view of the fact that their jobs
in this Bureau will be open for them when the war emergency
10 over.
Regraded Unclassified
-3-
1. N. Thompson.
Memorandum.
It 18 now generally known that further tax levies
to be enacted which would entail further enlargement
responsibility on the part of the Bureau of Internal
avenue. It is respectfully urged that the Bureau of
Internal Revenue has been erroneously classified in view
of its great responsibility in connection with the war
effort. It is urged that this matter of improper classi-
fication be immediately presented to the Director of the
Budget for reconsideration.
In the event it is proposed to take unfavorable ac-
tion respecting this request for reclassification, the
undersigned would appreciate being afforded the opportunity
to appear before the Bureau of the Budget.
naman Commiss1 oner
Regraded Unclassified
TREASURY DEPARTMENT
PROCUREMENT DIVISION
write OF THE SINGTOR
WASHINGTON
March 2. 1942.
Memorandum for SECRETARY MORGENTHAU=
In response to your inquiry by telephone, priority rating
in Cless A-1 for personnel required in the Strategic and Critical
Materials and the Red Cross (Refugee Relief) Activities of the Pro-
curement Division, US recommended by memorandim of this office
dated February 27, 1942, WES requested because of the importance
which attaches to the recruitment of competent personnel without
delay 58 needs for employees develop in these vital activities,
More particularly, it is pointed out that the procurement
of the special commodities in the strategic and critical material
field involves elements which are of special national importance.
In this program it is not possible to anticipate precisely the num-
ber or character of employees who will be needed but when the need
is disclosed for more help the peculiar urgency of the work makes
it imperative that every facility be made available to effect the
prompt selection end appointment of people with the necessary quali-
fications. The rapid changes in the commodity market and the in-
creased scarcity in the employee market, coupled with the need for
punctual handling of current work, make it vital that employees
found to be necessary to negotiate the special contracts and to
handle the warehousing and commodity rotation function of this pro-
gram be put to work within the shortest possible time.
The same general conditions apply with reference to the
Red Cross (Refugee Relief) work. The clothing, medicinal, surgical
and other supplies which must be provided for Refugee Relief pur-
poses must be kept available and distributed as the fluctuating
demanda arise. As the changing conditions incident to the war in-
crease the calls for supplies, or change the character of the dis-
tribution, or otherwise make more people necessary to do this work,
it is of the utmost importance that qualified people be recruited
and assigned immediately.
It is believed that the exacting character of these two
functions warrant placing the personnel necessary for conducting
the activities in Class A-1 as recommended by memorandum of Febru-
any 27, 1942.
Mack,
Virector of Procurement.
Regraded Unclassified
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE March 5. 1942
TO
Secretary Morgenthau
FROM
Mr. Raas
Reference is made to the priority classification of Executive
Departments and agencies issued by the Bureau of the Budget, under
Tracutive Order No. 9067, February 20, 1942.
I wish to appeal the placing of the Division of Research
and Statistics in Class 5. the lowest priority classification listed.
and to ask that the Division be included in Class 3. This request
Le made because most of the Division's work consists of assignments
given by the Secretary end other Treasury officials in connection
with the rrising of funds to finance the war.
The financing of the war certainly must be regarded as
second in importance only to war production and military operations.
Purthermore, if the financing 10 not properly handled it can result
in serious interference with war production. The volume of funds
which must be rained, either by laxation or by borrowing, represents
such e large proportion of the national income that these funds
can not be diverted from their customary chennele without far-reaching
effects upon the functioning of the country's economic organization.
These effects can be either helpful or hermful to the var program,
but in either case they will be of significant magnitude.
It is of great importance, for instance, that the inflation
which has characterized every previous major war effort of the
United Staten and most of those of other countries be avoided or
minimized. This 1s true, not only because of the unfortunate social
and economic consecuences of inflation, but also because of its
disruptive effects upon the var effort itself. It is generally
recognized that the problem of inflation can be successfully coped
with only when approached both from the fiscal stendpoint (1.0., that
of absorbing excess purchasing nower) and from that of direct controls.
Neither mode of approach to the problem in likely to be successful
unless supplemented by the other. Even in Germany, where direct
controls have teen molled with unperalleled severity nince the
beginning of the war, it has been found necessary to supplement
these controls by vigorous fiscal mensures. It would annear, therefore,
that the agencies charged with the study, formulation and application
of fiscal controls ought to be accorded a priority rating more in line
with that accorded agencias discharging similar functions in connection
with direct controls.
Regraded Unclassified
The pasi recents Selor -1ven to the Division n: Received - Statistics
are intimately concerned with the -ro%lem or VAT finance end of tie fiscal
control of inflation. In connection vith the "Iannin: and carryin but
of the Treasury's borrowin cherations, for examile, the Division's unric
includes such natters AS: analysis of kinds and sources of invest ont (un's
which micht be loaned to the United States for simples of way Sincere end
of the effects of borrowin from ench source upon the flow 0⑇ -urchasin
power and the deanné for consumers Coods: designing of now they of necu-
rities which might %e offered to meet the investment needs of various
classes of purchasers, vith special reference to the classes of securities
likely to ten the most desirable sources of funds; analysing eats on
prices and transactions in the market for overnnent securities and
of existing holdings of such recurities, in order to determine how the
market would be likely to receive new offerings of various maturities and
coupon rates, and what yould be the likely distribution of each pronosed
security; sucgesting on the basis of this analysis the alternative innues
which might be offered in each financing operation in order to anneal
to the appropriate classes of investors And Also meet the Treasury's
requirements; estimating the nrice nt which various issues should be
offered under existing market conditions; studying the emerience of
other governments In financing their war efforts.
Estimates of Federal revenues from the various sources provided under
existing laws are prepared by the Division for use in determining the "réab-
ury's cash position and the requirements to be met by borrowing, end for
inclusion in estimates of receipts for use in the Rudget of the United
States. In connection with new revenue legislation which is being for-
mulated or considered, estimates are made of the revenue which micht the be
expected from each tax proposal under varying provisions RS to rate and brise
and under varying assumntions na to future business activity, war conditions,
etc.
Competent handling of this work requires personnel with specialized
training and with experience in the specific problems of Treasury financing
and revenue estimating. Yet under the priority classification established
by the Bureau of the Budget, the Division would be at a major disadvantage
LA trying to maintain an adequately trained personnel. Some relief from
this situation annears essential if the Division 1e to discharge its
rusponsibilities in connection with war financing.
Regraded Unclassified
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
DATE Lard: 0, 1942
THE SECRETARY CF THE TREASURY
TO
FROM
THE COLLISSIONER OF THE PUBLIC DEBT
The priority classification recently issued by the Bureau of the
Budget placed the Bureau of the Public Debt in Class 5, the lowest class
established.
It apparently WELS not understood that the funds necessary to finance
the was program, over and above those received in taxes, are being obtained
through the sale of securities, and that this financing and the handling of
transactions in connection therewith are conducted by the Bureau of the Public
Debt. The success of the war effort is directly related to the effective
handling of the huge financing program in which we are engaged.
Since the Defense bond program started in MAY, 1941, this Bureau
has taken on about 1,800 additional employees. With the present volume of
business, we are already seriously handicapped by the lack of sufficient
trained personnel, particularly in supervisory positions, and we can ill
afford to lose any trained employees to other agencies.
The success of the war financing program depends very largely on
the faith of the people of the United States in their Government. The
accuracy of our records and the efficiency with which we conduct the mil-
lions of transactions with bond owners all over the country plays a large
part in the wholehearted desire of these people to buy more bonds. If we
were to lose any appreciable number of the seasoned, well-trained personnel
needed for the performance of these essential functions, this relationship
might easily be jeopardized.
I feel very strongly that the importance of this work, together
with the years of training which many phases of it require, entitles this
Bureau to placement near the top of the priority classification list, not
only to prevent the loss of people who cannot be spared, but also to on-
able us to obtain additional people with the qualifications necessary to
carry on the expanded program on the high level of efficiency it demands.
pm
Regraded Unclassified
167
BRANDUM FOR THE SECRETARY.
March 6, 1942.
The first part of the week was comparatively calm,
with the usual scettering of complaints on the subjects
of Bond deliveries, economy, taxation, etc.
With the Secretary's appearance on the Hill, how-
ever, the flood-gates were opened, and we have had almost
nothing but tax mail during the last two days. Needless
to say, protests far outnumber praise, but it has been
interesting to see that there are quite B. few thoughtful
letters approving the various points made in the Secretary's
statement. The proportion of protest to approval, however,
is 12 to 1, and even in these cases, the "i" sometimes
represents approval of one phase and disapproval of others.
A newspaper item has brought in a great many sugges-
tians for names for the new nickel. A particularly popular
one is "Vickel". Most of these are very far-fetched, end
one voice was raised to say, "Why don't we just call it
nickel?"
Bond mail was divided in about the same ratio of good
and bad. Complaints included slowness in acknowledging
ideas, and delays in receipt of the Bonds themselves.
There were two protests on what is said to be B. Treasury
circular, asking the recipients to fill out and send in
Stemp Books in order to purchase Defense Bonds for the
endowment funds of various fraternities. Curtis Bush,
Devenport, Iowa, a lawyer, asks the Secretary to take dis-
ciplinary action, and sends a copy of a letter to the
Defense Bond office, saying that his fraternity has E.
monthly publication and can raise its own funds, while the
Government should spend money on bombs and not on salaries
for efforts of this sort.
Unusual gifts continue, and a brlef memorandum and
list of these is attached at the end of the report.
Regraded Unclassified
168
- 2 -
Memorandum for the Secretary.
March 6, 1942.
During February we received 999 White House letters.
More than 1/10 of these dealt with complaints on liquor
sales around camps; drunken soldiers on trains, etc. The
corresponding month in 1940 brought us 376 letters from
the White House, and in 1941, 439. We fell below the peak
year, however, for in 1938 we received 1,098.
Regraded Unclassified
169
1 -
Comments on Texation
Miss Mary E. Spruance, Smyrna, Del. My net income is
something less than $2,000, so I am enclosing check for
$200 - 4% on $2,000; 6% surtax - $120 plus $80 equals
$200. I think this is as correct B8 the human mind can
calculate it. My: but I'll be glad to get this off my
mind.
Mrs. R. C. Rather, Inglewood, Calif. We are informed
each year when our taxes are due. We don't need to spend
$80,000 (additional) tax money for 8. movie to let us know.
That money is needed for guns and ammunition, not foolish-
ness, Quit throwing the taxpayers' money away.
Mary Young, Oak Park, n.. $80,000 for Donald Duck is an
imposition on the taxpayers, when we are "scrimping" to
pay taxes to finance the war. We can get along very well
without Donald Duck. Why not lower the tax rate, if taxes
are bringing in so much money that it isn't needed for the
war. Why don't you and Congress think of the welfare of
the nation for a change, and practice B, little economy?
Not a penny for Donald Duck!
Mrs. K. A. Wittfogel, N.Y.C. I was shocked to learn this
morning that the Treasury had decided not to fight for
its excess profits tax. The privileges allowed large cor-
norations today must fill the ranks of labor with disgust.
They must feel that they alone are being called upon to
make the sacrifices in this war. « * * If you want to retain
the confidence of the mass of the people, stick to your guns,
We would at least like to know which Congressmen and Senators
are looking to the pocket-books of the few for their support.
Frederick Ohrenschall, Baltimore, Md. It irritates me to
find one in your position considering the patriotism of the
American people at such a low ebb that they need to be
encouraged and amused by the antics of Donald Duck in order
Defense Bonds. + # It is my observation that things like
to pay their Government Income Tax, and purchase U. S.
in the overlapping and useless duplication of effort in
this, together with the awful waste of the taxpayers' money
Washington that Is retarding the full and continued coopera-
tion of the people, who are anxious to help win this war,
Regraded Unclassified
170
- 2 -
but object to their hard-earned money being wasted. If
you think I am wrong, get away from Washington some day
and mingle among and talk with the average American citi-
zen who works for B. living.
Miss Mary Linda Bradley, Ackworth Cottage, Ridgefield,
Conn. " * + Would it be possible to put income taxpayers
into "White", "Gray" and "Black" lists: For instance,
if E. person had correct returns over 8. period of 3 or 5
years, put that person on the "White" list. Persons
having been in voluntary or involuntary error once, could
60 on the "Gray" list, etc. In this way you would eliminate
much physical strain and 8. surtex on the time and patience
of the citizen, particularly the elderly, average kind,
without 8 staff of secretaries. In my own case, I have
twice been told that my tax installment was overdue, when
I had the cencelled checks in my possession! I had made
the mistake of paying my taxes some weeks in advance. + 4: 44
Then, late last year I received 8 summons somewhat obscure
to the layman - who has always had to struggle with arith-
metic - to Danbury to meet El Mr. Feinberg to explain loss
deductions claimed. I received the letter in California
the day after I was supposed to meet Mr. Feinberg. This
vague summons seemed to me unressonable on many counts, and
I wrote my reasons for feeling that way about it. A very
nice letter came from Mr. Feinberg and, as soon as I W&B
able, I accumulated the data desired, and sent it to him.
I was "exonerated"! ti II As I told Mr. Feinberg, nobody
has to send me B. bill for my taxes; I happen to wish to pay
them. Incidentally, Mr. Feinberg is apperently an honest,
capable human being. There are not too many of them employed
where they can do the most valuable service.
J. D. Tarober, Advertising, N.Y.C. Permit me to express
my admiration for the good sense the Treasury showed in
having prepared and released the Donald Duok movie on taxes
to beat the Axis. As one whose tax bill is in five figures,
I can speak with some feeling on the subject. 1 have always
been glad to pay my taxes, and gladder still after Donald's
exposition.
Regraded Unclassified
171
3
Mildred D. Wilson, Murfreesboro, Tenn. I am appealing
to you as I am in B. disturbing predicament. How am I
to pay my 1941 income tax when even a United States Govt.
Department declines to accept n. check from the Treasurer
of the United States as payment for the tax? Valuable
time from my employment was taken in an effort to pay
this tax. Internal Revenue officers in Knoxville informed
me that cash or the enclosed check couldn't be accepted.
I was referred to the Post Office to purchase a Money Order.
* # I went to three different officials of the Post Office,
only to be unsuccessful in having this check accepted.
Will. you accept the enclosed check for $69.48 as payment
for my 1941 income tax? If it would be too presumptuous
in asking you to arrange the direct payment of my income
tax to the amount of $59.07, kindly direct me how to da it.
Hurry S. Vincent, Consulting Engineer, East Harwich, Mass,
I should like to bring to your attention an in-
equality which you may or may not have considered. My wife
and I being beyond the working age, derive our income on-
tirely from investments. Such income is taxed by the
Commonwealth of Massachusetts at a rate of 6.78 per cent
in its entirety - no exemption or allowances of any sort.
The result is that this year the income tax which we pay
to the Commonwealth is 14 per cent greater than the Federal
tax. As you know, there are many of the States which have
no income tax. Other State taxes are relatively high so
that this year on a gross income of $4,226, we are paying
8. tax of $555.48, or over 13% of gross. * % " It would seem
therefore that adjustment should be made in the Federal tax
to compensate for the more drastic State tax. We all want
to and will do our share in this emergency, but we will feel
more like doing it if we are sure that no inequality exists.
A. B. Detwiler, Oaks. Pa. Last year I purchased two $100
tax saving notes. Yesterday I filed my income tax report
at Norristown, Pa., at the local Internal Revenue office.
There I was informed they could not accept the tax notes,
and suggested I send them to the Philadelphia Office by
registered mail. This I did at a cost of 57-cents. I am
wondering, since you urge the purchase of tax saving notes,
and they may be purchased locally, why they may not be ao-
cepted locally without the necessity for considerable extre
cost in forwarding.
Regraded Unclassified
- 4 -
172
liugo Sutor, N.Y.C. This morning I tendered your Tax
Anticipation Bonds, together with a bank check, 8.5 pay-
ment on my income tax at the Post Office on 149th St.
and Concourse. My payment was refused, the men at the
counter claiming no ruling has been made for accepting
Bonds at their branch. Yet they were accepting Money
Orders and checks, and I will bet they take cash. I am
incensed and hurt over this matter. This place is an
authorized agency for income tax purposes. Now I find
if I want to get anywhere with these Bonds, they must be
sent by Registered Mail. What I would like to know is,
what more kind of hocus-poous is the Government up to? 4)-
4)-
Oscar Lasse, N.Y.C. # # Most Americans spend what they
earn - and usually all they earn. Some have said that
our high spending habits have been responsible for our
high standard of living. That is debatable. I have felt
for some time that, such being the case, the best way to
collect income taxes would be through the medium of pay-
roll deductions, such as you propose, There is also this
advantage -- it will force people to more nearly live
within their particular income bracket. When 8 man is
paid $10,000 per year, for example, he and his family
consider that as the level for their standard of living.
However, if he has to pay out $2,000 for taxes, all would
be better off if they accepted the fact that he was really
an $8,000 man. I sincerely hope your proposal is accepted.
Leo E. Gronobois, Bronx, N.Y.C. It was no surprise today
to read in the newspapers that you plan to double the
income taxes of 1943. Since the advent of the "new deal"
the main objective has been to confiscate the earnings of
the working man, under one pretext or another. Has it
ever occurred to you since 1933 that throwing away of the
public money must end some time, a little foresight on
your part would be saving the public plenty today. +>
I am a working man, earning a weekly wage, but the way
the Government is handling business today, I won't be
paying income tax next year, and that goes for hundredo
of thousands in non-defense positions.
Regraded Unclassified
173
- 5
Samuel Elkind, Yonkers, N.Y. Although I fully agree
to higher income taxes to raise sufficient funds to
successfully carry on this war and bring same to e
happy American conclusion, I believe that some con-
sideration should be given to the future American man-
hood and womanhood. # * # Like myself, there must be
many others in the lower income brackets who are educat-
inc their children not only for their personal gains, but
for the general good which will come from their higher
capabilities. # # # In order to make possible this higher
education, would it be possible to include in the con-
templated tax law an exemption for the tuition paid to
the higher schools of learning? Is not the tuition which
we pay used for salaries and other expenses, and eventuelly
becomes taxable income by those receiving same? #
Vylace W. Burchard, DeKalh, n. I note in this evening's
paper that you are in favor of doubling the income tax.
I don't know just how you figure g. man of moderate means
is going to live. This year I had to pay an income tax
of $43.07, the second time in my life I have made money
enough to pay this tax. And this is because of the fact
that my wife worked last year. And to top it all off,
I have worked only 3 days a week since long before Christmas,
and during the last month, only 4 days in the entire month.
How can we live that way? Living costs are going out of
sight. Rent is raised. * es # I am in favor of doing all
we can to win this war, and only wish I could buy stamps
and bonds, but I don't think I can buy many on $16 per
week, which I get on social security. I work for The
American Steel and Wire Co., and unfortunately, we are not
getting orders, due, I think, to shortage of steel and zinc.
Belke Manufacturing Co., Chicago, 111. (Telegram) Thought
you would like to know immediate reaction of employees to
your new tax proposal working men state they will demand
their wages increased to such a figure that they will still
have left for themselves the same amount of money they are
now receiving, and then if rents and food go up, they still
want more. This means we have to raise our prices on Govt.
work proportionately. 42 45 4d The present proposal will only
hurt widows, old pensioners, people living from annuities,
and Government employees. You are not going to get anywhere
unless you freeze wages and cost of living.
Regraded Unclassified
174
e
E. E. Price, Merchandise Mart, Chicago, III. (Telegram)
In reference to your appearance before Ways and Means
Committee yesterday, if the press quotes you correctly,
please permit me to say there aren't but two inflations
In existence in this country. One is Union Labor, the
other ferm products. Why don't you stop them? Why tax
my wages to the last dime and permit them to collect
exorbitant prices? If you think business is good, please
refer to Dun and Bradstreet Report of sales throughout
the nation for week ending Feb. 28th, I am glad to pay
anything I have, even to my life, for my country, but T
resent being robbed for the benefit of Union Labor and
Farm Bloc in and out of public office. Plenty of money
can be had in this country to finance this war or any
other emergency, but not along the lines you suggest.
Wm. H. Eirchby, Brooklyn, N.Y. I wish to take consldered
exception to the sense of your statement as quoted in the
Press on Tuesday, to wit: "Wor is never cheap, but it is
& million times cheaper to win than to lose". There is B.
large and steadily growing body of public opinion in this
country which through cold rationalization is thoroughly
convinced that there is a "bearable" middle ground between
"victory" and "defeat". Your statement carries the
obviously mistaken inference that unless we should "win"
& "smashing victory", we shall become as "lost Souls in
Bell", The foundation of our tragic position was cemented
along purely ideological lines - We oun largely place the
blame for our involvement in war to the Administration's
painfully obvious meddlesomeness in championing the rights
of non-citizen Jews in Germany. The controlling pro-
Roosevelt block of alien-minded Jewish votes in New York
State, with its logical political ramifications, vouches
for the reasonableness of this assumption. By learning to
strictly mind our own business in the future, we can rapidly
demonstrate that American business is the affeir of Americans
and European business is the business of Europeans. Further,
we of the rational middle ground contend that a 250 billion
dollar "poor man's debt" will in all likellhood bring about
the total destruction of the so-called "free institutions"
we hear people speak of. We additionally contend that
withdrawal from distant spheres of action and the concen-
tration upon our own defonse, to a money limit of half the
alove, will place our nation in a position from where a fair
safe for the Jews and other so-called "persecuted" races)
pasce (unobstructed by Quixotic notions of making the world
based uoon full military preparedness should be readily
consummeted.
#
*
Regraded Unclassified
- 7 -
175
Favorable Comments on Speeches
Mrs. Norborne Berkeley, Pendleton, Oregon. For some
time I've thought I must write to you to express my very
deep appreciation of one of your speeches in which you
praise 50 highly the promptness with which my native
state of Oregon took up the various loans, etc. For an
Easterner, you seem to have such greet understanding of
the pioneers and what their brave adventuring meant to
this country -- the example of courage and fortitude
they set forth. ***
B. S. Miller, Miller Products Company (Mechanical Rubber
Goods), N.Y.C. Allow me to express my gratification and
pleasure in the fine speech you made before the Advertis-
ing Club in Baltimore on February 14th. It was the most
forceful and by far the finest publicity the voluntary
savings plan has received. To my mind, this is exactly
the expression the drive needs and will undoubtedly be of
factor in achieving 100% results. I trust that this is
but the first of 8. series of these talks. # #
John O. Sheridan, Pittsburgh, Pa. I was very much im-
pressed with your speeches and also your statement regard-
ing taxes - especially where you speak about 6% of invested
capital. I believe that corporations should be glad to
earn anything at all, rather than lose the war.
Regraded Unclassified
- 3 -
Unfavorable Comments on Speeches
Ammon L. Miller, Attorney-at-Law, Wilmette, m. I was
privileged to hear the splendid address you made before
a group of business men in Baltimore on the night of
Saturday, Feb. 14th, and was very much impressed by
your statement to the effect that the sale of Defense
Bonds has fallen far below expectations due to the com-
placency of our people. That B. state of complacency does
exist, there can be no doubt. However, to hold to the
Belief expressed in some quarters that the sole cause of
this complacency is an absolute confidence in victory
would prove 8. serious handicap to those charged with the
tremendous responsibility of financing our vast wer pro-
gram. My daily contacts with the "man on the street"
reveal that much of our complacency is due to B. suspicion
that our government as such, is not directing all of its
energies into those channels which contribute directly
and fully to winning the war. The criticism is freely
heard that altogether too many agencies and bureaus in
our government are using the war 8.5 a smoke-screen to
expand their activities to the point of usurping the rights
of states and individuals. These agencies and bureaus,
it is maintained, are concealing their purposes behind the
mantle of war in order to promote and make permanent functions
which are not now and cannot later make any contribution
whatsoever to our war effort. Let me say here that such
suspicions have been too frequently justified by # such news
as we occasionally do get from Washington.
Mrs. Madge B. Rhines, San Diego, Calif. In the New York
Times of Feb. 15th, is a half-page article of your speech
before the Advertising Club of Baltimore. In it you most
foreibly urge the American people to buy Bonds, even list-
ing the amount each earner should set aside for them from
his salary. It is splendidly written and I heartily agree
with most of it. But sometime ago & few concise lines were
published, signed by you, showing how millions could be
saved if Congress would out on nondefense spending. Although
I read several papers carefully, Ihave never seen that this
curtailment has been legislated. * ++ $ Thus I hope that
before you demand the $5 and $10 8. week earner to save for
ment of how you much, if any, has been cut from nondefense spending.
defense, cause to be published a clear and concise state-
Regraded Unclassified
177
- 9 -
Favorable Comments on Bonds
Mrs. Chas. Goldsmith, Washington, D. C. # # We are
using savings and even some security sales to cover all
we can do to help the Govt. We have bought bonds exten-
sively for the grandchildren and one great-granddaughter.
Now, I felt I wanted to buy for such institutions that
I have mentioned in my will, and these bonds purchased now
are in lieu of such bequests -- and I will so state it in
e codicil, 85 I do not want to change my will at the age
of 71 years. The enclosed letter indicates what I did for
the Community Chest, and the enclosed check for $500 is
for R. bond to be made out and sent to the Jewish Community
Center, 1529 16th Street, N.W. ++ * # I merely did this to
demonstrate the method I am pursuing, and if good, why
cannot a great deal of such propaganda be started, as BO
many wills have fortunes in bequests and might be diverted
in like manner. 4b + 45
Mrs. Lottie B. Pinkham, Gloucester, Mass. Please don't
waste Uncle Sam's paper by sending me and Mr. Pinkham B.
notice to buy Bonds and Stamps. We are both over 65 years.
We are living on less than $400 per year. 4k * 4h Don't fear,
every cent we can spare, we will give to our Government,
even if we did not get any interest. I have gone out wash-
Ing, ironing, scrubbing etc., just 80 I can do my little bit.
Any job you or the President can give me where I can earn
more than 20g per hour, I will take. 42 * *
Calvin M. Price, Mt. Morrison, Colorado. Dam-It-All,
Mr. Morgenthau, - why do they turn us World War No. 1
Veterans down? You know that those Japs have us old timers
really HOPPIN' MAD, and we're just itchin' to get a crack
at those SNEAK-PUNCHING SQUINTS that hit us below the belt.
" # 12 Now Mr. Morgenthau, this Jap situation has really got
under my skin, and believe me, I tell 'em right from the
HELL'S BELLS Brother - ONE DEFENSE STAMP and ONE DEFENSE BOND
shoulder, and when they start to complaining I just say --
what I mean is get into the Northwest and Northeast part of
isn't going to win this WAR ---- IT'S DIG BROTHER DIG, and
that old sock and go to the Southeast and Southwest bottoms
Regraded Unclassified
178
- 10 -
and make it an ALL OUT when you're buying these DEFENSE
STAMPS and BONDS, for each one is an avenging stroke against
the attack on Pearl Harbor. * # # Enclosed are some samples
of what I am sending out every month, and I try to make it
& thousand every month, if possible. The maxima, poems
and prose are sent out on 1¢ post cards all over the United
States. How about recording some of these and give me the
satisfaction of knowing that I'm still batting for Uncle
Sam. I only draw 8. $45 B. month pension, but I'm doing my
best to promote the sales of DEFENSE STAMPS and BONDS as
far 88 my means will permit.
45
Bernard Snodgrass, Columbus, Ohio.
I
em
B.
teacher
At the Ohio State School for Deaf, and we have some 42
boys and girls enrolled in our Senior High School Classes,
and I notice that we have collected some $60, with which to
buy Defense Stamps, from these deaf boys and girls, without
any inducement of any kind. However, I wonder if some such
term as "Junior Patriot" could not be popularized in our
schools, in which the Government could present B. "Junior
Patriot emblem or button to every boy or girl who filled
8 85 book of Defense Stamps.
Dr. Arthur G. Devis, Erie, Pennsylvania. * # I elready
possess $47,000 worth of Defense Bonds. Obviously, I have
these because I want a safe haven for money for my family.
I would now like to buy Bonds without interest, or with 1%
interest to bomb Berlin! I think a great many anti-Nazi
Americans may feel this way. $90 for a Bomb Berlin Bond
maturing in 10 years at $100.
W. P. Hanley, Trenton, Mo. So many people are under the
impression they are donating to the U.S.A. when they buy
bonds. I want to donate this slogan: "You don't donate,
you know, you accumulate dough, buying Defense Bonds".
I also have a good song entitled, Those Guys" -- you know,
those guys who talk too much and do nothing. I will donate
words and music if you will have it published. I have #
bought $2,500 in Defense Bonds and will buy more.
I
em
B. railroad worker.
Regraded Unclassified
179
- 11 -
Unfavorable Comments on Bonds
Mrs. L. I. Case, Annadale, N.J. I own at present $3,000
worth of U. S. Defense Bonds, Series E, and had intended
to increase my holdings after March lst, but this sug-
gestion, as published in the Herald Tribune by your
Donald Ducks of Georgia", Messrs. Lucas and Allen, stops
me from investing up to $5,000. (Clipping enclosed.) I
live in a small town and do not intend to have the entire
community informed by publication - probably posted in the
local Post Office - that I hold $5,000 worth of Defense
Bonds. I shall await your decision on the matter before
buying more.
Anonymous - Bad timing, bad timing, Mr. Secretary, on your
part! No time to compliment labor for buying B. few Bonds,
after all the strikes, etc.
Wm. S. Braddan, Pastor, Pastorium Berean Beptist Church,
Chicago, III. There is a great deal of talk in Chicago
about the Negroes' apathy in the purchasing of our Bonds
end Defense Savings Stamps. I have made my home here for
the past 40 years, and knowing Chicago as I do, I cannot
agree. They simply lack leadership in this matter. We have
here EL minority group of 250,000 Negroes, and over 500
Negro churches, but no all-out attempt has been made to
stress the urgency and necessity of the purchasing of Stamps
and Bonds for our victory. # # +4 The Berean Baptist Church
has already purchased a $5,000 Bond and is planning on
another soon. We must have B. man or group of men here in
Chicago, designated by you, to formulate B. plan to inspire
the Negroes to wake up and do their duty. I am certain you
will be greatly surprised at the response.
Thomas Wilson, Philadelphia, Pa. Fellow workers and myself
have been putting our savings in Defense Bonds as we heard
you suggest last Sunday. However, it has just come to our
attention that we will be forced to pay an income tax on
the small interest received. This is an outrage. We are
told to be patriotic and buy these Bonds, and then stabbed
and there should be A new issue of not Defense Bonds but
in the back by our Govt. " # # The public needs 8 brenk too,
Offense Bonds, and they should be tax free. We buy no more
Bonds until you make this correction.
Regraded Unclassified
180
- 12 -
LADY ESTHER, Chicago, Ill. We are in receipt of your
kind award to our company for radio promotion in behalf
of the National Defense Savings Program. In our opinion,
such awards are unnecessary. Why should anyone be granted
recognition for helping our country in time of need. Such
help should be taken for granted and not made special note
of. Paper is useful for wrapping bullets. Economize now!
John Butler, President, Local #121, Bessemer, Ala. Local 121
Mine Mill Smelter Workers Union representing Republic Steel
Ore Miners this area, protests company's penny-pinching
business as usual sabotage of effective payroll allotment
plan. We want to put aside money each payday for Bonds.
Company insists on unsatisfactory and miserly alternative
of placing Defense Stampa in pay envelope, which is inoon-
venient to danger of loss or damage of Stamps, etc. Worse
still, company refuses to put out one pay period a month,
thus reducing amount put aside in Defense Savings at least
50%. Respectfully ask your aid in foreing Republic Steel
to go as far as U. S. Steel and other corporations in ar-
ranging regular allotments for Bonds each payday. (Telegram)
Chester P. Garrett, San Francisco, Calif. Revised edition
of Hearst papers' four-week publicity campaign now in its
sixth week. Stop hiding behind a screen of fake patriotism.
This so-called buy & bomber campaign attempts to cover
energetic efforts to divide 8. nation against itself before
Pearl Harbor. Recent publicized implications are that
Treasury Dept. sponsors this particular drive, while mil-
lions of true patriots buy and work to sell Bonds without
personal reward or publicity. (Telegram)
Laura Matthews, Secretary, Jacksonville Woman's Club,
Jacksonville, N. C. The Jacksonville Woman's Club is ask-
ing your cooperation in improving circumstances in the local
Jacksonville Post Office. * * de Due to the rating of the
office, as we understand it, only a limited amount of
persons are trying to buy Stamps and Bonds but are unable
Defense Stamps and Bonds are available. Any number of
Stamps and Bonds, but due to inadequate facilities in the
adults, have expressed an interest in purchasing Defense
to get them. Many of the children in town, end also the
local Post Office, are prone to lose interest in them.
Regraded Unclassified
- 13 -
181
Our people are vitally moved by defense activities,
especially 28 this is 8 defense area, but our own local
Post Office is unable to supply us adequately. If no
larger amounts of Stamps and Bonds can be supplied to B
third class Post Office, We would suggest that every ef-
fort be made to change the rating of the office in order
to adequately serve our public.
Anonynous - We the people of this neighberhood are plead-
ing to you about EL man in this vicinity is 8.5 radical as
they come. We are asking you if there isn't a way that you
can make this man buy Defense Stamps or Bonds. Now this
man has an income of $356 B. month. He gets $151 compensa-
tion every month from U. S. Government, but he apsolutly
will not buy Stamps or Bonds. When approached about this
matter, he just gets mad and cusses everybody that says or
even mentions Bonds to him. At times I think that the folks
in this neighberhood will do him body harm, they get 80
riled up about it. And another thing that makes the folks
med is that he won't hire Americans to work for him, only
Japs, I am afraid that if he won't buy some Stamps or Bonds
soon, that the folks will take it on themselfs to make it
very warm for him. And at times he says some very harse
words about our Government that ain't worth repeating. + *
++
This man has about $8,000 laying in the bank - just laying
there, and he won't buy a thing. He has his money in The
California Bank at the corner of Sawtelle and Santa Monica
Blvd. Now you don't have to take our word for it, just ask
the Bank how much money he has - they will tell you. So we
are pleading to you to do something about this matter.
Everybody is doing there part, why can't him. This man's
name is Louie Powell, 11571 Iowa Ave., West Los Angeles, Calif.
H. R. Green, Palo Alto, Calif. Please let me know whether
any of the money we give for Defense Bonds is being used
to pay fan dancers or movie actors; or for such silly ob-
jects as "Donald Duok pictures" or "This is War" radio
programs. This last program seems to be for the purpose
of glorifying Roosevelt, of playing up his sickness and
loneliness, and in trying to tell us he is 8. much greater
man than Lincoln. It is not only silly, it is disgusting.
If I do not hear from you, I shall assume it is so, and
shall act accordingly, especially in buying, and cashing,
Defense Bonds.
Regraded Unclassified
182
- 14 -
"Seared Civilian" - North Hollywood, Calif. Analyze
the psychology of the inhabitents of California (Who were
admitted into the Union some time ago, I've heard), and
should be likely prospects for Bonds, if you could con-
vince us that the Big Shots in Washington give a snap
of their fingers for the consequences to California, if
the lethargy of the Washington Knoxes and Biddles continue.
as 9 * It may be a hilarious joke on our Local Defenders,
to Knox, that we couldn't hit the Air Marauders who flew
over Los Angeles. And it may be of small consequence,
that practically all the Enemy Alien Japs arrested for
signalling during this so-called KITE CHASE, were appre-
hended in so-called Enemy Restricted Districts. # # 42 My
advice to you is to awaken someone to the fact that the
Japs are in position to do MORE DAMAGE NOW, than you can
sell Bonds to repair in a thousand years. Please realize
that if 25,000 Japs landed unseen by parachutes at night,
they would never be distinguished from the local ones,
unless they wore uniforms. However, if that time comes,
the first expeditionary force of Japs that landed here
many years ago will no doubt don their uniforms too. # D. ++
Yours for survival of the Entire Union, (Signed) Scared Civilian.
Regraded Unclassified
15
183
General Comments on Present Emergency
Fred H. Smith, Attorney-st-Law, Rockford, m. " I be-
lieve that 6. great many farmers feel that they are now
getting prices which justify them in cooperating with your
Department without Soil Conservation or Parity payments,
and when the Government is under such B. heavy strain of
war, it seems wrong to be paying farmers on the basia that
it has been paying for the last few years. I was born and
raised on the farm, and the first money I saved in my
practice, I invested in a farm. * + * My Soil Conservation
and Parity payments last year amounted to a little over
$1,000, 80 I think you can understand that I have no selfish
motive in writing this letter. If the so-called "Farm
Blook", on account of election year, are determined to go
whead with this kind of 8. program, then it should be specl-
fied that all payments should be made in Defense Bonds in-
stead of cash.
John A. Ross, Detroit, Mich. I enjoyed reading the news
stories about your visit to Detroit. Your address, courtesy
end excellent common sense made 8. tremendous hit with our
people. I am sending you 8 paper-weight I hope you enjoy
using. Please do not bother to answer. I know how busy
you are.
Dr. Noble Younkin, Decatur, Ind. April 25, 1942, I will
have 8 $5,000 deposit check due which I offer to our Govt.
as an outright gift as an example to 5,000,000 other citi-
zens who can do likewise - no Bonds accepted in lieu of
same. October 28, 1942, I will have $2,500 due, which I
wish to offer as 8 gift to our Government AS an example
to 10,000,000 citizens who oan do likewise. The above con-
stitutes 40 years of saving. God in his great wisdom has
given us our beloved President and his official family.
# e 4) I crave no publicity - being an American citizen is
Of what use are Bonds and money if we fall? Wake up America:
enough. "United we stand - divided we fall". Sacrifice now.
&
# # Freely America made it possible that I could save,
and freely do I offer to repay.
Regraded Unclassified
184
- 16 -
E. L. Heavner, President, Local Union #2999, United Mine
Workers of America, Wendel, W. Va. Just a short time
Lgo we heard your radio address. You told in your ad-
dress how important all steel, iron, copper, or any other
scrap meddel was to national defence. Imediately after
your address Local Union #2999 organized 8. committee to
gether all scrap material around the mine in which we
work. Then we went to our mine supertendent and he was
100% with us in our move, and later we taken it up with
the mine owner who is Mr. G. E. Bailey. He bitterly
denied us of any scrap or junk of any kind. His reply
W&6 the Government had set a price on junk as nothing.
He said when the Government wanted it bad enough, they
would pay something for it. We understand that the Govern-
ment has of committee whos duty is to locate all scrap
material. We would be very glad if you would send a man
to the Wendel Coal Co., Wendel, W. Va., where he will
find tons of unused material. We will insure you as
organized labor our very best coperation.
Carl E. Rosenfeld, San Francisco, Calif. Three years
ago today, at Hamburg, Germany, the United States Consul
granted my family and me the visa which made it possible
for us to come to America and escape Nazi persecution.
No words and no expression can convey to you, Mr. Secretary,
the gratitude which we feel. We are buying Defense Stamps
to the limit of our ability, end on this anniversary which
means 80 much to us, we are sending you the attached token
(check for $5.00) merely to let you know that we are grate-
ful. We don't want any receipt. We don't even ask for an
acknowledgment. # # * My income is still far below the
point which calls for an income tax payment. Let the en-
closed check serve instead. I want to pay, I want to give.
I want to support everything which the American Flag stands
for.
Regraded Unclassified
- 17 -
18E
Gifts of various sorts continue to come in. They
range from checks to B. collection of sea-shells pasted up
in a patriotic design. Among the checks are a number for
amounts from $50 to $500, raised by organizations which
have held dances, or other cooperative fund-raising affairs.
Private individuals continue to send everything from a
dollar up: One gift for $1,000 was from & California woman
who said she could not do anything useful because of in-
experience and ill health, but could contribute this, in
addition a paying her income tax in full now.
The Mexican patriot whose letter was abstracted some
weeks ago sent in another check for $200.
It seemed to me that the pictures of unusual gifts
BS shown in "Life" for the past week, would probably stimulate
others. ( I also thought that some of the more amusing and
out-of-the-ordinary gifts might have been included, or these
mil ht be used some other time.) We have not, however, had
any great outpouring of further oddities, but a few letters,
etc., are listed below.
James J. Leon, Auctioneer, Bridgeport, Conn. On page 11
of the March 2nd edition of "Life" there is depicted
articles received by the government and turned over to the
"Donations to the United States for National Defense" fund.
It is suggested that some of these articles, if auctioned
at meetings of patriotic and other civic organizations,
would bring more than their intrinsic value. This sug-
gestion emerges from my experience in auotioning articles
donated to charitable organizations. I am the official
auctioneer of the Bankruptcy Court in Connecticut, and have
had many years of experience in this work and would be glad
to amplify this suggestion if you are interested.
Mrs. Chas. A. W. Handy, Clarksburg, W. Va. You will find
gold watch have been lost since 1927. I am glad I found the
$5 in gold in this funny little package. This coin and 8
package after all these years, but it is 8. crime if I would
throw the coin away and say nothing about it. I hope you
can use it, but what will happen to me now?????? If you call in
for all gold, you may have the watch. Please accept wait this
the free spirit I am sending it to you. I shall your
reply.
Regraded Unclassified
- I8 -
186
H. Silfverston, Stock and Dairy Farmer of Duluth, Minn.,
sent in a box marked, "Money for Defense", which contained
$57.50 in pennies.
M. Marquardt, Golconda, Ill. Enclosed find 3 coins, lot of
silver in this Drei Mark. (German coin) The half dollar
and dime were made in the year 1854, when the U. S. Navy
won a successful Naval engagement from Japan. Trusting
that these coins bring plenty to help defeat the Axis,
Very truly yours, M. Marquardt. P.S. I enjoy parting
with my cherished keepsakes to win this war.
Regraded Unclassified
187
For your information.
March 6, 1942.
To:
Archibald MacLeish
From: Alan Barth
EDITORIAL OPINION
ON THE WAR:
DISCOURAGEMENT
Pattern
The press has developed B. formils for recounting
the progress of the war in the Pacific. As the St. Louis
Post-Disnatch puts it, "The news from Java is uncomfortably
reminiscent of the announcements that have come in past
months and weeks from Crete, Borneo, Malaya and Singapore
Island."
=
Each contest for 8. new stronghold starts out with
editorial assurances that here, at last, a. resolute stand
will be made. The strategic importance of the position is
stressed. The preparations and the determined spirit of the
defenders are dramatized. When the assault occurs, early
headlines announce that the Japanese have been repulsed with
terrific losses. Then come wry admissions that landings
have been made. Hope is sustained, however, by tales of
individual heroism and by suggestions that allied reinforce-
ments may arrive. And at last comes the acknowledgment that
the enemy has secured air and naval dominance, that he has
Regraded Unclassified
- 2 -
188
!
overwhelming superiority in numbers and equipment, that key
defense points have been surrendered and that distance
forbids the sending of help to the defenders.
It would be difficult to devise a formula better
calculated to promote discouragement. The public is freshly
disarmed against each new misfortune. In the case of Java,
the unfortunate effects were compounded by advance press
notices that American troops had arrived and that the United
Nations were ready to match the Japanese on sea and in the air.
The quick loss of Java was feared by many commentators; it
seems to have been genuinely expected by no more than B. few.
This latest in the unbroken series of allied defeats
in the Pacific has brought in its train a disheartenment
deeper than that produced by the shock of Singapore. There
are few signs which can properly be interpreted as defeatism.
But there is a manifest feeling of frustration, a loss of
confidence in leadership.
On the part of those sharing the policy views of
the Administration, this frustration takes the form of demands
for new and younger blood in the posts of authority. The
swelling editorial chorus on this score is headed by Walter
Lippmann who refers to the Prosident's Cabinet as "markedly
over-age." Citing as models the youthfulness of governmental
Regraded Unclassified
- 3 -
189
chiefs in other crucial times, he asserts that "Mr. Roosevelt's
most urgent task is to renovate his administration by rejuve-
nating it."
It should be noted that this criticism is rarely
directed at the President himself. Confidence in his under-
standing of the war and of the basic strategy requisite for
victory continues on a high level. Only the handful of
nec-isolationists assail him personally -- and then, paradoxically,
on the ground that he disregards the counsel of the experienced
military experts around him.
Offense
Recognition that defensive warfare is going very
badly, in the Atlantic as well as in the Pacific, has intensified
editorial sagerness for the inauguration of offensive tactics.
"It is agonizing," says The New York Herald-Tribune, "to watch
a further phase of the fatal process whereby the United Nations
continue to stand on a far-flung defensive, watching their vital
but nowhere adequately held positions falling one by one under
concentrated attack, without launching the offensive stroke of
their own which would pin the enemy down; and the lay strategist
becomes almost frantic in his insistence upon the virtues of
the offensive "
Regraded Unclassified
- 4 -
190
In almost every section of the press there is ardent
enthusiasm for the "eagle" policy enunciated by President
Roosevelt and for Secretary Stimson's pledge that "We will
seize every opportunity for counterattack." The Chicago Daily
News calls this "the only kind of promise the people want from
their leaders today" and The Indianapolis Times goes so far as
to say: "When raiders appear off California, we should be
worrying about offensive Alaskan bases to attack Japan."
In the light of such prevailing views as these, the
reorganization of the army was greeted with general approval
as B. streamlining of operations for offensive action. The
step was criticized only 88 not going far enough; joint command
over land, sea and air forces is widely advocated.
Russia
There was a good deal of disappointment among
editorial writers over the Russian failure to announce sensa-
tional victories on the Red Army's anniversary. Lacking these,
the commentators have tended to discount the day-to-day claims
advanced in Soviet communicues. They see that strategic
positions, especially in the South, are still in German hands
and doubt that the anticipated Spring drive of the Nazis can
be arrested. Nevertheless, most of them now recognize that the
whole course of the European struggle hangs upon Russian
Regraded Unclassified
191
- 5 -
resistance and urge the utmost assistance from this country
and Great Britain. There are the beginnings of 8. renewed
clamor for an invasion effort by British and American troops,
either through Norway or Italy.
At the same time, speculation is growing over the
possibility of aid from Russia in the fight against Japan.
Frequent rumors that the Japanese will attack Siberia give
rise to hopes that the Russians will seize the initiative --
at least to the extent of granting bases for American bombers.
France
Press comment on the Riom trials illustrates the
total absence of American confidence in the Vichy Government.
Scarcely a commentator regards them as anything save a drum-
head procedure and 8. travesty on French justice.
The transfer of the Dunkerque to Toulon added to
editorial distrust of Vichy. "Does anyone think that once the
Dunkerque is ready for action her guns will be fired on our
side?" the Camden Courier asks scornfully. And there is equal
apprehension over Madagascar. Recognition of Free French
control over New Caledonia was generally endorsed, although
there was some disposition to deride the State Department's
legalistic justification of its step as diplomatic boondoggling.
Regraded Unclassified
- 5 -
192
In the main, the newspapers have ceased shouting "appeasement"
about our dealings with the French; they merely reiterate
somewhat wearily that we had better be on the alert for some
sudden stab in the back.
In this context, the British air raid on factories
around Paris was generally approved as one of the hard neces-
sities of war. There was sympathy for the French and, indeed,
& tendency in news stories to dramatize civilian suffering.
But the dominant feeling was one of satisfection that the
British had forced a showdown with Vichy -- and, above all,
that they had struck 8. roal blow at the enemy.
Regraded Unclassified
193
For your information
March 3, 1942
To
Ferdinand Kuhn, Jr.
From Joseph Melia
EDITORIAL COMMENT ON TAXES:
SO FAR, SO GOOD
The press agrees with the Treasury that total war requires
total taxation. Almost without exception, editorial writers
commend Secretary Morgenthau for aiming at such 8 realistically
high tax goal. And as reflected by their initial reaction to
his specific tax proposals, they find no cause to complain
over the recommendations to double personal income taxes and
drastically increase the taxes on corporate profits.
This agreement with the Treasury's tax policy, however,
is somewhat of the "yes--but" variety. While they do not call
for a trimming of the suggested new tax schedules, many news-
papers throughout the country angrily attack the Treasury for
refusing to broaden the tax base. They insist that the anti-
inflationary aspects of the new tax program will be endangered
unless a general levy on sales is imposed or exemptions lowered.
There is also widespread opposition to the Secretary's recom-
mendation to tax the income from state and municipal securities
end to make mandatory the filing of joint returns.
Regraded Unclassified
194
- 2 -
Yes--
As yet, editorial writers express no doubt that we can and
must increase taxes by nine billion dollars this year to check
inflation and help finance the war. Drastic levies on business
and personal incomes are recognized and accepted as inevitable,
and the increases recommended by the Treasury have not yet been
questioned except by the financial writers, who assure their
readers that Congress will not enact such increases into the law.
"No one can foresee exactly what effects a tax bill of this
severity will have upon the national income," says the New York
Times editorially. "But as an objective it must be approved,
(
however Dainful the tax rate it necessitates." Raymond Clapper
in his widely syndicated column declares, "A lot of high-priced
lawyers have been bired to come to Washington to ease down the
taxes for somebody. The best way to deal with all such arguments
will be to say 'no' without even listening." Even such an ultra-
conservative, anti-Administration newspaper as the St. Louis
Glote-Democrat is "ready and willing" to shoulder the burden.
"Amorica will pay the freight!" it exclaims, while the Scripps-
Howard chain editorializes: "The grim fact is that, although
the proposed new taxes may seem unbearably heavy, we'll still be
passing the major share of the burden on to future years--to year.
Regraded Unclassified
195
- 3 -
when those who come back from 'over there' will have to help pay.
In such times no civilian safe at home can rightly complain about
high taxes as such."
--But
While the press finds no fault with the proposed new tax
rates as such, it is widely argued that the Treasury's proposals
are based too much on the ability-to-pay tenet and too little on
restraint-of-inflation principles. "This means," says the Boston
Herald, "that millions of Americans, possibly half of our popula-
tion, will continue to pay no income taxes at all
...
This seems
neither fair nor wise, because it is in this lower income group,
( which spends virtually every cent it receives that the possibility
of inflationary buying will be greatest." Similarly, the Christian
Science Monitor argues: "Ey far the major volume of purchasing
power at this time is going out not to persons of wealth or of
medium means but is flowing out through defense employment to
millions of persons in the lower wage-earning levels. To impound
come of this purchasing power and prevent it from Lidding for
civilian goods in competition with the war effort is an object of
major importance, but it does not appear to figure very largely
yet in the Treasury plans."
These comments reflect the opinion of an important section
(
of the press. It is recognized that the new taxes as proposed by
Regraded Unclassified
4 -
196
the Treasury would go a long way toward drawing off excess
surchasine Dower. But to close the inflation gap further, many
nowsyapers demand that Congress dig deep into incomes at all
lovels. Some recommend lowered exemptions. The Christian Science
Monitor and the Washington Post advocate enforced savings.
By far the majority of the "but" commentators, however,
strongly urge a general levy on sales. Even such a good friend
of the Administration as columnist Ernest Lindley advocates a
salos tax, claiming the Treasury's tax proposals would be "only
mildly anti-inflationary at a time when the most severe methods
are needed to prevent a disastrous inflation."
Profits and Loopholes
Previously fearful that the Treasury would use the new
wartime taxes "as a cloak to advance dubious social experiments,"
the editorial pages, as yet, have found no reason to get excited
over the proposals to tax corporate profits. The Secretary is
widely complimented for what the Philadelphia Inquirer calls
"wisely restraining himself from renewing certain of his favorite
projects," such as making invested capital the exclusive lase for
excess profits taxes. The recommendation to abandon the capital
stock tax is also applauded. "Put less fortunate," says the
New York Herald Tritune, reflecting the attitude of most newspape 1,
"is Mr. Morgenthau's insistence on such pet ideas as the taxation
of income from state and municipal securities and mandatory joint
Regraded Unclassified
- 5 -
197
(
income-tax returns for husband and wife." (Editorial comment
is not yet available from the community-property states and
large oil-producing areas.)
Lator
The Treasury's tax proposals were made public too late for
the weekly labor press yet to take any editorial stand. But
Charles M. Kelley, a columnist widely syndicated in both the
CTO and AFL press, this week prominently features the statement
made by the Executive Secretary of the Railway Labor Executives
endorsing the Treasury's tax policy. The statement commends
Secretary Morgenthau for "the courage he displayed in maintaining
his stand" in opposing a sales tax or lowered exemptions.
(
Regraded Unclassified
198
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE March 6, 1942
TO
Secretary Morgenthau
Mr. Kamarck
FROM
Subject: Shipment of Planes to British Forces
1. In the week ending March 3, 1942, B.
total of 113 combat planes (no trainers) were
shipped to British forces.
2. Fewer trainers are being shipped in
1942 than in 1941. In 1941, trainers made up
almost 30 percent of the total shipments. In
1942, trainers consist of around 15 percent of
the total. On the other hand, the average
number of combat planes shipped has increased:
around 340 a month in 1942, compared to 275 8
month in 1941.
3. Another new plane type is mentioned
in this week's report: the Lockheed Venture.
The Ventura is a two-motor reconnaissance bomber
and will be used by the Coastal Command. Little
information 18 available on this plane 83 it is
& newly developed type: its prototype first
flew in 1941.
Regraded Unclassified
- 2 -
199
Table A - Shipments by Area
Week
Total Shipped Total Shipped
Ending
in 1942
since
March 3,1942
to date
Jan. 1, 1941
to the United Kingdom
L1ght and medium bombers
2
5
1,129
Heavy bombers
0
0
104
Naval patrol bombers
1
8
110
Purauit
70
291
602
Army Cooperation
0
21
52
Trainers
0
0
24
Total to the United Kingdom
73
325
2,021
to the Middle East
Light and medium bombers
3
99
429
Heavy bombers
0
0
5
Pursuit
0
149
997
Army Cooperation
6
12
12
Trainers
0
8
150
Total to the Middle East
9
268
1,593
to the Canadian Forces
Light and medium hombers
3
4
58
Naval patrol bombers
0
11
19
Pursuit
0
28
70
Trainers
0
125
1,299
Total to the Canadian Forces
3
168
1,446
To the British Pacific Forces
Light and medium bombers
18
35
130
Navel patrol bombers
o
o
27
Pursuit
10
10
178
Trainers
0
0
105
Total to Pacific Forces
28
45
440
To the Forces in Russia
Light and medium bombers
0
29
73
o
49
Pursuit
0
Total to Russian Forces
o
29
122
Total
Light and medium bombers
26
172
1,819
Heavy bombers
0
0
109
1
19
156
Naval patrol bombers
Bo
478
1,896
Pursuit
Army Cooperation
6
33
64
Trainers
0
133
1,578
113
835
5,622
Totals
Regraded Unclassified
- 2 -
200
Table B - Shipments by Types
Week
Total Shipped Total Shipped
Ending
in 1942
since
March 3,1942
to date
Jan, 1, 1941
Bell Miracobra
40
106
260
Boeing B-17
0
0
20
Boston III
o
13
52
Brewster Buffalo
0
0
168
Cessna T-50
0
86
634
Consolidated Catalina
1
19
156
Liberator
0
0
89
Curtise Kittyhawk
10
189
571
Tomahawk
o
0
593
Douglas Boston I and II
0
0
82
Boston III
0
16
455
Fairchild 24 R-9
6
24
46
Glenn Martin Baltimore
4
102
170
Maryland
0
0
150
Grumman Martlet II
0
5
46
Lockheed Hudson
18
37
856
"
Lightning
0
3
3
"
Ventura
4
4
4
North American Harvard II
0
47
944
Mustang
30
175
255
Pitesirn Autogiro
0
0
5
Vought Sikorsky Chesapeake
0
0
50
Vultee Stinson-049
0
9
13
Grand Total - All Types
113
835
5,622
Regraded Unclassified
Table C
107:
Plane Shipments to the British By Weeks
Week
Light and
Heavy
Naval
Army
Ended
medium
bombers
patrol
Pursuit
Coopera-
Trainers
Total
bombers
bombers
tion
Weekly Average
of shipments
in 1941
32
2
3
27
1
28
92
January 6, 1942
24
0
5
30
4
9
72
January 13, 1942
3
0
2
58
0
42
105
January 20, 1942
8
0
0
14
o
60
82
January 27, 1942
24
0
1
100
5
13
143
February 3, 1942
9
a
3
10
4
4
30
February 10, 1942
33
0
3
59
0
4
99
February 17, 1942
12
0
2
41
7
0
62
February 24, 1942
33
0
2
86
7
1
129
March 3, 1942
26
0
1
80
6
0
113
Total shipments
since January 1,
1941 to date
1,819
109
156
1,896
64
1,578
5,622
Regraded Unclassified
202
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE March 6,1942
TO
Secretary Morgenthau
FROM
Mr. White
Subject: Exports to Russia, Free China, Burme and other blocked
countries, as reported to the Treasury Department
during the 8-day period ending February 28, 1942.
1, Exports to Ruseia
Exports to Russia, 88 reported to the Treasury during the
e ght-day period ending February 28, 1942 amounted to more than
228,000,000. Landplanes accounted for nearly $12,000,000 of
this total. (See Appendix C.)
2. Exports to Free China and Burma
Exports to Free China during the period under review amounted
to approximately $2,900,000. Landplanes accounted for more than
(
75% of the total. (See Appendix D.)
No exports to Burma were reported during the period under
review.
3. Exports to France
No exports to Occupied France were reported during the period
under review. Exports to Unocoupied France amounted to $26,000.
4. Exports to other blocked countries
Exporte to other blocked countries are given in Appendix A.
Regraded Unclassified
203
STRICTLY CONFIDENTIAL
SUMMARY OF UNITED STATES
NOT FOR PUBLICATION
DOMESTIC EXPORTS TO SELECTED COUNTRI
AS REPORTED TO THE TREASURY DEPARTMENT
FROM EXPORT DECLARATIONS RECEIVED
DURING THE PERIOD INDICATED 1/
July 28, 1941 to Fabruary 28, 1942
(In thousands of dollars)
July 28
to
Period orded
Period ended
Total
Feb, 10
February 20
February 28
Domestic Exports
$121,472
$ 26,174
$ 28,063
$ 175,709
Free China
41,982
4,853
2,921
49,756
Burna
2/
10,499
583
I
11,082
Granne 3/
6
1
T
6
Occupied France
2
-
a
2
( counter France
of
2
26
28
Spain
2,637
2
146
2,785
Sritzerland
6,818
115
183
7,116
Sweden
13,280
569
5/
13,849
Portugal
5,697
5/8
80
6,325
French North Africa
6,283
1
-
6,283
Treasury Department, Division of Monetary Research
March 5, 1942.
1/ Many of the export declarations are received with a lag of several days or more.
Therefore this compilation does not accurately represent the actual chipment of
a particular week. The longer the period covered, the closer will these figures
come to Department of Commerce revised figures.
11 From September 11, 1941 to date - It is presumed that a large percentage of
naterial listed here, consigned to Hurma, is destimed for Free Chima.
1/ Includes both Occupied and Unoccupied France through week ending October 4, 1941.
Occupied and Unoccupied France separated thereafter.
Includes Morocco, Algeria and Dinisis.
5/ LASS then $500.
Regraded Unclassified
APPENDIX B
204
Exports from the U. S. to Free China, Burma and
U.S.S.R. as reported to the Treasury Department
July 28, 1941 - February 28, 1942
(Thousands of Dollars)
Exports to
Exports to
Exports to
Free China
Burma 31
U.S.S.R.
July 28 - Aug.
2
395
4,523
Aug. 4 - Aug.
9
-
551
AVE. 11 - Aug. 16
309
986
AUG. 1. - Aug. 23
2
2,735
AUE- 25 - Aug. 30
1
1,023
Sent. 2 - Sept. 6
204
4,280
dept. IC - Sept. 13
2,281
5,217
Sept.15 - Sept. 20
3,822
752
Sept.22 - Sept. 27
110
449
2,333
sect.29 - Oct.
4
1,225
684
323
Cot. 6 - Oct. 11
5,312
1,157
6,845
Cct. 13 - Oct. 18
5
35
1,924
Cot. 20 - Oct. 25
269
403
5,623
002. 27 - Nov.
1
4,772
58
4,484
Nov. 3 - Nov.
8
1,672
342
4,552
Nov. 10 - Nov. 15
2,851
88
2,677
NOV. 17 - Nov. 22
1,228
1,021
3,581
Nov. 24 - Nov. 29
3,239
1,364
2,436
C. 1 - Dec.
6
791
64
3,609
bec. 8 - Dec. 13
2,337
18
12,040
Dec. 15 - Dec. 20
111
8
4,580
Dec. 22 - Dec. 27
1
196
1,829
Dec. 29 - Jan.
3
35
2
3,993
Jan. 5 - Jan. 10
91
1,073
8,247
Jon. 12 - Jan. 17
1,695
447
5,874
Jen, 19 - Jan. 24
-
-
3,885
Jan. 26 - Jan. 31
6,938
923
9,608
Feb. 1 - Feb. 10
4,889
1,054
13,315
Feb. 10 - Feb.
20
4,853
583
26,174
Feb, 20 - Feb.
28
5/
2,921
-
28,119
Total
52,359
9,969
176,118
1. These figures are in part teren from copies of shipping manifests.
2, Figures for export to Free China during these wee.8 include exports
to Rangoon which are presumed to be destined for Free China.
1, It is presumed that 8. large percentage of exports to Burma are
destined for Free China.
4. Beginning with February 1 figures will be given for 10-day period
instead of week except where otherwise indicated.
2. 5-day meriod.
persury Decartment, Division of Vonetary Research
March 7, 1942
Regraded Unclassified
205
APPENDIX 0
rincipal Exports from U. S. to U.S.S.R.
AS reported to the Treas ry Department
during the eight-day period ending
February 26, 1942
(Thousands of Dollars)
TOTAL EXPORTS
2 28,119
Principal Items:
Landplanes (combere)
11,698
Military tanks (light)
1,711
Motor trucks and chassis
1,465
Military tanks (medium)
1,180
Brass and bronze plates and sheete
1,141
Pork, canned
871
Military tank parts and accessories
821
Explosive shells and projectiles
692
Wool cloth
674
milling machines
592
Aircraft parts and accessories, n.e.s.
566
Light reconnaissance cars
469
Landplanes (pursuit, interceptor and fighter)
450
Iso-pentane (blending agent)
419
Marine engines
362
Sole leather
340
Whest flour
262
Trinitro toluene (T.N.T.)
208
Relief supplies - hospital
206
Cooper wire (insulated)
205
Leather boots and shoes
201
Engine parte and accessories
176
Machine guns, sub-machine guine or parts
171
159
Other ammunition
154
Tin plate
254
Vacuum tubes
151
Relief supplies - clothing
143
Lathee
141
Toluene
128
Metallic containers (drums)
the sury Department, Division of Monetary Research
Merch E, 1942
Regraded Unclassified
206
APPENDIX D
Principal Exports from U.S. to Free China
AB reported to the Treasury Department
during the eight-day period ending
February 28, 1942
(Thousands of Dollars)
TOTAL EXPORTS
$ 2,921
Principal Items:
Landplanes (pursuit, interceptor, and fighter)
2,340
Refined copper
286
Printed matter (bank notes)
247
Landplanes (partial shipment)
47
Treasury. Department, Division of Monetary Research
March 6,1942
Regraded Unclassified
207
Treasury Department
Division of Monetary Besearch
Date March 6, 1942 19
To:
Secretary Morgenthau
From:
Mr. White
Subject: Cube
We now have a copy of the Cuban decree
appointing Finance Minister Garcia Montes
and Minister of the Presidency Lopez
Castro members of a mission to discuss
in Washington the 855 million Export-
Import Bank loan and the proposed Central
Bank.
As I suggested before, Finance
Minister Garcia Montes would no doubt
appreciate the opportunity of B. brief
conference with you. I shall of course
continue to discuss with him the progress
made on the proposed Central Bank.
MR. WHITE
\
Branch 2058 - Room 214
Regraded Unclassified
TREASURY DEPARTMENT
208
INTER OFFICE COMMUNICATION
DATE March 6, 1948
TO
Secretary Morgenthau
FROM
Hr. White
Subject:
Mission to Honduras
1. The Honduran Government has requested A loan from the
U. S. Government for several nurposes, including the
astablishment of B. national bank of issue which would
also serve as 8 mortgage bank.
2. This Honduran problem 18 likely to be very similar to
that of Cube, on which our Technical Mission has been
working.
3. The State Department has told the Hondurans that no
credit to aid in the establishment of a national bank
could be extended until proper studies had been made
and that, therefore, a emall mission would probably
be sent to Honduras. The Honduran Minister was delighted
with this proposal.
The State Department has informally told me it WAB
hoped the Treasury Department might be willing to
undertake such 8. mission. This 18 not a good time to
spare staff for such a purpose but the State Department
feels that this 1s the only way to handle the Honduran
matter.
4. I understand Mr. Welles is writing you to request your
cooperation. We could, if necessary, send a small
mission to Hondures for a short time, for which we
would be responsible but which might include a. man from
the Farm Credit Administration and one from the Federal
Reserve Board.
Regraded Unclassified
&
TREASURY DEPARTMENT
WASHINGTON
March 6, 1942,
The Bonorable,
The Secretary or State,
Washington, D. C.
My dear Mr. Secretary:
I have the honor to acknowledge the receipt of your letter
of February 19, 1942, (File RA). and the enclosure referred to there-
in, relative to the manufacture of coins for the Peruvien Government.
The matter has been submitted to the Director of the Mint
and an estimate of the cost of manufacturing the coins of the new alloy
1a being prepared and will be transmitted to you at en early date. I
state at this time, however, that the facilities of the Mint will be
available for this coinage.
Two questions arise in connection with your request, the
answers to which I do not believe fall under the jurisdiction of this
Department, namely, the procurement of the metale for the coinage, end
the menufacture of pert of the order in the Royal Mint in London.
Enclosed, for your information, ie a copy of a letter
addressed to Mr. Don Juan Chavez, D., Commercial Counsellor, Pervvian
Embassy, Fashington, D. C., from the Central Reserve Bank of Peru, which
use delivered to the Director of the Mint by Mr. Chavez. Also, there is
quoted below an excerpt from a letter to the Director of the Mint from
Vr. Dudley Coleman, retired Superintendent of the Melting and Refining
Department, United States Mint, Philadelphie, Pennsylvania, who has re-
cently been in Peru at the request of the Peruvien Government for the
purpose of lending technical advice in connection with re-opening the
Mint there:
****]
believe the Peru Mint officials were satis-
fied with By afforts and report. ... The pressing problem
et their Mint DOW is to find and receive about 20 tons of
electrolytic copper - if you can assist them in this effort,
how they would rejoice, resume active ooinage and appreciate
more than ever the real meaning of the Good Neighbor Pollcy."
Regraded Unclassified
The Honorable,
The Secretary of State,
Weshington, D. C.
Page 2
Mr. Chavez last week informed the Director of the Mint that
he was leaving for Lima on February 27th, and while there would die-
asso the coinage problemsof his country. He stated that when he
returned he would renew discussion of the subject with officials here.
Very truly yours,
Secretary of the Treasury.
Inclosure.
Regraded Unclassified
The
orielmil
and
WILL
3
ID
90.
far
CENTRAL RESERVE BANK or PERU
Lime, January 26, 1942.
Mr. Don Juan Chavez D.,
Commercial Counsellor,
Feruvian Embassy,
diskington, D. C.
Dear Sirt
Coinage
No have the pleasure of acknowledging the receipt of your
favors Nos. 5-3-5/Q-295 and 5-3-3/4-302 of January 20 and 23, respectivaly,
is which you advise us of the results of an interview with Mr. Howard of
the Treasury Department in regard to new possible alloys to be subeti-
tated for the old ones in coinage.
The new alloy of 50% silver and 50% copper suggested by Mr. Howard,
shick is confirmed by the press communication which you sent us with the
ascond of your aforementioned letters, in nothing but our present light
silver eoin of One Sol and One-half Sol.
These coins weigh 25 and 12 grans, respectively, and their fine
silver content, therefore, is 12/ and 61 grams for cash.
metal in One Sol coin, with our exchange at 6.50, represents 0.9919 Sol to
Considering the price of silver in New York, the content of this
must a add the cost of the copper, of the coinage, of its transpor- coin
which tation we to Peru, maritime and war insurance, which represente for this
u intrinsio value above its face value.
brouse which weighs 7à gross instead of 12, this is authoritative not possible
In regard to coining One-half Bols equal to the present nickel-
Lee end two reasons: because it would not be possible for two silver at the of
for soin, First, because the Government lacks an coins
the
same second, value but with different sizes and weights to circulate
time.
and But the from which the nickel will be left out. Effectively, Mint of
problem some to be solved with the adoption of a copper our
present zine "nickel-bruss" alloy coin-as it no baptized by the nickel. Royal
has & content of 70% copper, 29% zino and 1%
Regraded Unclassified
- 2 -
From the Press Bulletin 29-77 it appears that the United States
desires to reserve for national defense nickel, in the first place, and
11a, ta the second place, attributing less importance to copper and none
at all to rinc. Under these conditions, while Mr. Howard talks to you
about a copper and zine alloy in the proportion of 80 to 20, more or loss,
- would propose another one exactly equal to that of our Half-Sol coin,
which 10 70 to 30, and if possible to increase the proportion of zine,
adthout running the risk of a brittle coin, no think that NO would meet
with the desire of the United States Government and that we will obtain
a eotn as white as possible, which on aging does not became 08 black
as our One and Two Centavo coins, which are made of pure copper.
Now, B.S you surely know, the Half-Sol coin is in reality a natallic
note, a.e 18 indicated by the legend given on its book; it is issued by the
bank under the same conditions 68 its paper notes with the sole approval of
a Supreme Decree, BO that a change in its alloy alons would require the
consent of the Government.
Re would be grateful if, on the receipt of the present letter,
you would be no kind as to obtain a reply from the Treasury Department in
regard to the possibility of ooining the 4 million pisces requested by our
Babany from the State Department, at the request of our Department of
Foreign Relations, but with an alloy of 70% copper and 30% zinc, increasing
if possible the proportion of zinc, provided this higher proportion Live
proven the appearance of the coin without decreasing its resistence and
malleability.
Ao the Treasury Department has spoken several times about the
supply of our metals required for the coinage requested, which amounts VS
do not quots as they are already given in our previous correspondence in
regard to this matter, we take the liberty of insisting upon the fact that
this country exports to the United States infinitely larger quantities of
eepper and zino than those required for this purpose. We could resit right
sitw the exact amounts of electrolytic zinc and of copper, requesting for
the latter notal to be refined over there. There 1a likewise the possi-
bility of our acquiring copper from Chuquieamata, which produces it alectro-
lytically, but we hope NO won't be obliged to proceed in this shape if
the monetary authorities of that country intend, as we believe, to give us
its frank 00-operation in this matter.
But there is for us another problem requiring just as urgent
Alution as the one we have just dealt with, and this is the coinage of
Five, Ton and Twenty Centero pieces.
Regraded Unclassified
- 3 -
These coins have the following characteristics:
instion
Diameter
Weight
5
Destaroz
17
3 grans
20
4 grans
24
7 grame
The composition of these coine 101
Copper - 75%
Nickel - 25%
ha you will understand, being given the proportion of nickel
contained therein, it 10 useless to pretend that they will be coined in
the United States: the solution of adopting an alloy equal or similar to
the one that we think can be used for the One-half Sol, that is 70% copper
end 30% zinc, would run the risk that the 20 Centavo coin on aging might
be mistaken for the copper Two Centavo, end the Ton Centevo might be mis-
taken for the One Centavo.
If theere were no other possible illoy to take the place of the
present copper-nickel, which motter we beg you to consult about with the
competent authorities, there may be, who knows, a иьу of avoiding this on-
fusion, and this might be the adoption of the performed coin. In this case,
4o you believe it possible to make the coinage in one of the United States
Mints?
Naturally, once this problem of to technical character 18 solved,
there would remain to solve the legal problem, to the copper-nickel coins
of Five, len and Twenty Centavos are issued by the Covernment and not by
In this case the Government, naturally, would formulate the respective request
this Bank, in virtue of an authoritative law which will have to be modified.
through the diplomatic channel in order to reach the Treasury Department.
In order to complete this information we add that the first coinage
of the aforementioned coins were made in the Philadelphia Wint.
though you, personally, surely remember all the coins a which fuw
mentioned Even in this letter, we dean it advisable to and with you the
59 camples have of the same in order to facilitate your conversations
officials of the Treasury Department,
The coins enclosed with the present letter are NO follows:
Regraded Unclassified
4 light silver One-half Sol coine
4 Twenty Centavo coins
4 Ten Centevo coins
4 Five Centavo coine
& One Centavo coins
)
of the new thinner type which is
& Two Centavo coine
)
being coined at present.
1 One Centavo coir )
Of the ancient type which is no longer coined and
1 Two Centavo coin )
which is sent only for the purpose. of showing the
dark color with they essume.
We are not sending you nickel-bronze Half-Sol coine, as we have
done BO before.
We theck you again for your kind co-operation in this metter and
we are signing ourselves
Your effectionate end obedient servants,
CETRL RESERVE BANK OF PERU
(aga) Two illegible signatures.
Regraded Unclassified
215
DEPARTMENT OF STATE
In raply refer to
Washington
February 19, 1942,
My dear Mr. Secretary:
There is enclosed e copy of ES letter dated February 13,
1942 received in the Department from the Commercial Counsellor of the
Peruvian Embassy concerning the desire of the Peruvian Government to
have certain coinage effected through the Treasury Department and the
Royal Mint of London. The general question of coinage, and the Peruvi-
nn chae in particular, has been the subject of considerable discussion
among officers of this Department and officers of the Division of
Monetary Research in the Treasury Department end the Office of the
Director of the Mint.
the Commercial Counsellor of the Peruvian embasy has stated
orelly that his Government is enxious to have this coinage effected BE
scon BE possible and that he has been asked to handle the matter on an
urgent besie. I should appreciate receiving et your early convenience
the views and comment of the Treasury Department on this subject, with
porticular reference to the possibility of making available the coinage
facilities requested end the desire of the Peruvien Government to bave
part of the work done by the Royal Wint of London.
Sincerely yours,
(ogd) CORDELL HULL
Enclosure:
From Commercial Counsellor
of the Peruvien Embassy,
February 13, 1942.
The Honorable
Henry Morgenthau, Jr.
Secretary of the Treasury.
Regraded Unclassified
216
PERUVIAN DMBASSY
1010 Vermont Avenue, N. W.
Weshington, D. C.
Commercial Counsellor
5-3-3/N-203
February 13, 1942
Mr. James Wright
Division of the Americen Republics
Department of State
Washington, D. C,
Dear Mr. Wright=
As a result of the decision that has been taken by the United
States authorities to prohibit the use of nickel for most civil
68 well as for minting purposes, our Government tos decided to
abandon the alloy that had been used in the minting of coine of
1/2 sol, 1. e.79% copper, 20% zine and 1% nickel and edopt B new
one of 70% copper and 30% zinc unless a greater proportion of zinc
could be used without effecting the unflexibility of the coins.
The Peruvian Government is desirous of having 8,000,000 of these
coins minted at the Royal Mint of London which has taken care of
this coinage on previous occesions and the British Ambassy will
probably communicate with the United States authorities in order
to obtein their agreement to the use of the quantities of copyer
and zino needed for that purpose.
On the other hand the Pervien Government 1A also interested in
having 4,000,000 of these coins minted by one of the Mints of the
Treasury Department with this seme alloy. Furthermore, my Govern-
ment 1s elso desirous of having minted by the Tressury Department
coins of 5g, 10g and 20g, the diameters and weights of which are
17 millimeters, 20 millimeters and 24 millimeters and 3, 4 and 7 grume,
respectively. The alloy used for these coine up to the present time
hes been 75% copper and 25% nickel but I understand thet this hus to
be abendoned. It is therefore suggested that the seme alloy of
70% copper and 30% zinc to be used in the minting of the 1/2 sol
coins, be used 88 well for the above-mentioned coins.
The coins needed would than be the following:
4 million unite 1/2 sol
4 million unite 5 cent coins
2 million units 10 cent coins
1/2 million units 20 cent coins
Regraded Unclassified
COPY
217
-2-
Before the definite order for the minting of these coins can be
given through this Embessy by the Banco Central de Reserve to
one of the Kints of the Treasury Department, I believe it would
be advisable to know if the quantity of metala required for these
orders can be obtained in the United States.
Will you be kind enough to let me know what procedure should be
followed in order to secure those metale. As you are undoubtedly
ewere, large quantities of copper are sent by Peru to the United
Stutes but not in B sufficiently refined percentage to be used for
that purpose. Zine 1s also exported in large quantities and I under-
stand in a percentage sufficiently refined.
Some time ago, I presented to the thon OPM 8 PD-1 application for
the copper, zine end nickel needed in the minting of a quantity of
those coine and this application has not been decided upon due to the
scarcity of nickel. I will fill in & new application for the
quantity of refined copper and zine needed for that purpose should
you consider it adviseble that I do so.
Thanking you for your kind attention to this matter, believe me
Yours very sincerely,
(sga) J. CHAVEZ
JC/mab
Regraded Unclassified
218
DEPARTMENT OF STATE
FINANCIAL DIVISION
March 6, 1942
Cur Code Room has asked for a repetition
of garbled groups.
219
C
0
P
Y
DEPARTMENT OF STATE
WASHINGTON
March 6, 1942
In reply refer to
FD
The Secretary of State presents his compliments to the
Honorable the Secretary of the Treasury and encloses copies
of the paraphrase of Section I of telegram No. 190, dated
March 5. 1942, from the American Embassy, Chungking, China,
transmitting a message from Mr. Adler for the Secretary of
the Treasury.
Enclosure:
From Embassy, Chungking,
No. 190, March 5. 1942.
Copy:1c:3/6/42
Regraded Unclassified
C
o
230
P
Y
PARAPHRASE OF TELEGRAM RECEIVED
FROM: Americen Embassy, Chungking, China.
DATE: March 5, 1942, 10 a.m.
NO. : 190, Section I.
This 1s B. message for the Secretary of the Treasury and 1s from
Adler. It is B. strictly confidential message marked TF-18.
(1) On March 3 at the Board meeting Hall Fatch said that he had
received B. cable from the Bank of England that (7)(7) Board with
£750,000 in order to meet the requirements for sterling since the out-
break of the war in the Pacific. Presumably no further calla from the
Board need be expected by the Bank of England as a result of the loan
of £50,000,000 and the changed situation. Therefore, Hall Patch is
inclined to desire the suspension of the operations of the Board but
he gave in to the general feeling of the meeting including that of the
chairman which was one of strong opposition.
At this time it would be very unfortunate to suspend operation of
the Board, since it would place enthasis on China's isolation, weaken
to e. greater extent the influence and prestige of America (?)(?). and
would be welcomed by some groups in the Government of China. Once
operations were suspended, it would be very difficult for the Board
to resume them. Some commercial cargo still remains in Lashio and
Wanting and the Board should finance the import of these. Even before
the regular new route is established from Burma and India (7) (7) goods
are expected over a rule track which now exists. A final consideration is
that, as Fox auggested originally, the Board's existence may because of
the (?) (7) which it enjoys afford an instrument which will be convenient for
the use of the loan. (End of Section I)
GAUSS
Copy:bj:3-6-42
Regraded Unclassified
C
o
221
P
Y
DEPARTMENT 02 STATE
WASHINGTON
March 6, 1942
In reply refer to
FD 012.3/6267
The Secretary of State presents his compliments to
the Honorable the Secretary of the Treasury and encloses
a copy of telegram No. 23, dated February 12, 1942, 5 p.m.,
from the American Embassy, Vichy, France, transmitting a
message from Morgan & Cie., Chatel-Guyon, France, to J. P.
Morgan and Company, Inc., New York, regarding the nossi-
ble appointment of French or German custodians for princi-
pal American interests in the occupied zone of France,
and copies of the Department's telegrem No. 144, dated
March 3, 1942, 6 p.m., transmitting the reply of J. P.
Morgan and Company, Inc.
Enclosure:
From Embasey, Vichy,
No. 23, February 12, 1942.
To Embassy, Vichy,
No. 144, Merch 3, 1942.
Copy:bj:3-7-42
Regraded Unclassified
D
222
0
P
Y
HRL
GRAY
(Paris)
Vichy
Dated February 12, 1942
Rec'd 5:43 p.r.
Secretary of State,
Washington.
23, February 12, 5 p.m.
Arragon of Morgans Bank requests following message
be transmitted to Morgan, New York, and it is believed
that in view of its contents Department will find it of
interest:
"Following is report on status question of French
and/or German custodians for principal American interests
In Occupied Zone.
JOURNAL OFFICIEL December 14, 1941 published law of
August 2, 1941 providing for appointment b/ French courts
of administrateurs proviscires for any property in foreign
ownership if for any reason owners can not assure good
administration.
On December 19 Barnaud, French Delegate to and
President of Frenco-German Economic Relations Commission
personally charged with this question, informed us French
Government intended to avail of this law, despite its
somewhat imperfect applicability. and to appoint administrateurs
Regraded Unclassified
223
-2-
proviscires for four American banks and principal American-
owned industrial companies with hope this might avoid appoint-
ment of commissioners by occupying authorities, stating he
wished if possible obtain approval of representatives of American
interests concerned. Same day French Foreign Office informed
Embassy of Government's intentions. I made full reservations.
During January and early February discussions were carried
on mostly in Paris with Bernand, Treasury, production the
ministry, counsel end several American owned companies. On
February 5 Pesson - Didion being absent on rest for few days
Meynial whose interzone pass had just been renewed came to report
necessity immediate firm attitude if appointment of administrateurs
provisoires was to be avoided. Therefore, knowing Peason -
Didion holds Dame views, B&W Barnaud February 7 and informed him
in order reserve all American rights we could not approve even
tacitly. Barnaud stated be had now less confidence such
appointments by French authorities would evoiá appointment occupying
commissioners and in view our feelings which he said he understood
proposal would be dropped; if revived later he would first consult
us. He believes occupying authorities have prepared list
commissioners for principal American companies but will not nake
appointments unless and until some cimilar measures are taken
in the United States with respect Germen-ovned companies.
Measures already adopted in the United States appear interpreted
by occupying authorities as taken with respect to persons not
property.
Regraded Unclassified
233
-2-
proviscires for four American banks and principal American-
owned industrial compenies with hope this might avoid appoint-
ment of commissioners by occupying authorities, stating he
wished if possible obtain approval of representatives of American
intereste concerned. Same day French Foreign Office informed
Embassy of Government's intentions. I made full reservations.
During January and early February discussions were carried
on mostly in Paris with Barnaud, Treasury, production the
ministry, counsel end several American owned companies. On
February 5 Pesson - Didion being absent on rest for few days
Meynial whose interzone pass had just been renewed came to report
necessity immediate firm attitude if appointment of administrateurs
proviscires vas to be avoided. Therefore, znowing Pesson -
Didion holde same views, BBW Barnaud February 7 and informed him
in order reserve all American rights we could not approve even
tacitly. Barnaud stated be had now less confidence such
appointments by French authorities would avoid appointment occupying
commissioners and in view our feelings which he said he understood
proposal would be dropped; if revived later he would first consult
us. He believes occupying authorities have prepared list
commissioners for principal American companies but will not make
appointments unless and until DOZE similar messures are taken
in the United States with respect German-owned companies.
Measures already adopted in the United States appear interpreted
by occupying authorities AS taken with respect to persons not
property.
Regraded Unclassified
224
-3-
Ye will inform principal American-owned companies of our
views.
Would be glad know if you concur and to receive any
suggestions".
We requested information of the Foreign Office several
days ago concerning the intentions of the French Government
in this regard and were informed by the competent official
that he had no recent information as to his Government's plans
in this regard but will endeavor to inform us.
LEAHY
GW
Copy:1c:3/7/42
Regraded Unclassified
(COPY)
225
TELEGRAM SENT
CJ
March 3, 1942
This telegram must be
paraphrased before being
6 p.m.
communicated to anyone
other than a Governmental
agency. (Br)
AMEMBASSY,
VICHY, (FRANCE).
144.
Your 23, February 12, 5 p.m.
FROM MORGAN FOR ARRAGON.
No suggestions but we thank you for your complete
advice.
WELLES
Acting
Copy:bj:3-7-42
Regraded Unclassified
228
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
DATE March 6, 1942
TO
Secretary Morgenthau
108
FROM Mr. Districh
Registered sterling transactions CONFIDENTIAL of the reporting benks were as follows:
Sold to commercial concerns
£51,000
Purchased from commercial concerns
£34,000
Open market sterling was again quoted at 4.03-3/4. There were no reported
transactions.
The Canadian dollar discount widened to close at 11-5/8%. as compared with
11-1/25 yesterday.
The Cuban peso, which was offered at e. premium of 3/16% last night, improved
slightly to B. final quotation of 7/32%.
In Sev York, closing quotations for the foreign currencies listed below
were as follows:
Argentine peso (free)
.2370
Brazilian milreis (free)
.0516
Colombian peso
-5775
Mexican peso
.2065
Venezuelan boliver
.2805
Uruguayan peso (free)
5295
There were no gold transactions consummated by us today.
The Federal Reserve Bank of New York reported that the Bank of Mexico
shipped $1,958,000 from Mexico to the Federal, to be earmarked for its account.
Ia London, spot and forward silver were again priced at 23-1/24. The
United States equivalent was 42.67#.
The Treasury's purchase price for foreign silver was unchanged at 35#.
Randy and Harman's settlement price for foreign silver was also unchanged at
35-1/80.
We made no purchases of silver today.
Regraded Unclassified
227
-2-
The report of February 25 received from the Federal Reserve Bank of New York,
giving foreign exchange positions of banks and bankers in its district, revealed
that the total position of all countries was short the equivalent of $3,133,000,
or decrease of $463,000 in the short position since February 18. Net changes were
AG follows:
Short Position
Short Position
Change in
Country
February 18
February 25
Short Position*
sugland ..
$ 527,000 (Long)
$ 903,000 (Long)
-
$376,000
Europe
2,385,000
2,374,000
-
11,000
Canada
506,000 (Long)
694,000
(Long)
-
188,000
Latin America
137,000 (Long)
74,000
(Long)
+
63,000
Japan
160,000
160,000
|
Other Ásla
2,257,000
2,242,000
-
15,000
All Others
36,000 (Lone)
28,000
+
64,000
Total
$3,596,000
$3,133,000
- $463,000
Plus sign (+) indicates increase in short position, or decrease in long position.
Minus sign (-) indicates decrease in short position, or increase in long position.
**Combined position in registered and open market sterling.
CONFIDENTIAL
A
Regraded Unclassified
228
UNITED STATES GOVERNMENT
COORDINATOR OF INFORMATION
WASHINGTON, D.C.
March 6, 1942
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
Dear Henry:
The attached is the General
Directive of BBC for the week of March
1 to 8.
Sincerely,
Bill
William J. Donovan
Attachment
Regraded Unclassified
1. German propaganda is concentrating on:
229
a. Bolstering the morale which is flagging in
the Vassal countries and Germany.
b. Promoting disunity among the Allies and putting
a damper on the rising morale in the occupied countries.
They are saying that the Americans and British are sunk in
selfish sloth beset with alarm over Bolshevism and are not
capable of helping themselves or of aiding Russia. They
also assert that the Russians being faced with disaster are
clamoring for aid. Destruction of these Nazi pictures
should be given close attention.
2. We look upon the Russi ns as a great Ally, as
pursuing an ideal with wholehearted sacrifice and as a
mighty fighting nation. We are true allies, being neither
disloyal nor distrustful. We will not allow our strategy
to be determined by jealousy or fear of Stalin and we have
not the slightest intention of allowing Russia to fight
our battles. Russia's reasons for non-belligerency in the
Far East are appreciated by us,
3. In the meantime we are doing four invaluable services
for Russia.
a. German forces in Libya are bein, diverted.
b. Holding Middle East bastion and keeping the
Persian supply route open.
C. Keeping the Northern supply route open.
d. Occupying the Japanese to keep her from an
assault on the Russians.
Regraded Unclassified
230
-2-
4. This week a high level of British projection should
be reached, and also an effort to project America to mar the
German picture of a spineless decadent disunited nation
capable only of blustering big talk. United States offensive
spirit accented and desire to hit the enemy this year, if
possible in the Spring.
5. The infectious spirit of attack must be communicated
to our European friends, but must qualify that we must
grit our teeth and face a prolongation of the war, if
despite all our efforts, the enemy achieves substantial
successes. If Germany is successful in the Spring it will
mean another winter of war for Europe and in Asia a pro-
longing of Japanese terror. The final issue could not be
affected. Show ruthlessly and clearly this week the choice
which lies before all Europeans: To allow Bitler to pro-
long the misery for another winter or aid the Allies in
ending it this year.
6. Something more positive than mere release from the
Nazi grip must be promised in order to stimulate the Euro-
peans to take big risks to defeat Hitler this year. The
closer we ap, roach the war crisis tue more need there is
for talk of peace. This is for operational reasons and
not simply from a vague desire to emit hot air about
Utopia. We must paint a convincing and attractive picture
of what peace in Europe would mean.
Regraded Unclassified
231
UNITED STATES GOVERNMENT
COORDINATOR OF INFORMATION
WASHINGTON, D.C.
March 6, 1942
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
Dear Henry:
The attached is taken from the
British PWE General Weekly Directive.
Sincerely,
Bill
William J. Donovan
Attachment
Regraded Unclassified
SECRET
INVOICE
1. Strategy: (a) Russia: Soviet heavy attacks
intended to bring relief to Lenigrad are proceeding
satisfactorily. From Velizh to Staraya Russa there
is heavy fighting. Large bodies of Germans isolated
by Russian break-through to Vitebsk-Lenigrad Railway.
In confused fighting west of Moscow several fortified
centers have also been isolated by Russians. German
counter-attack in Ukraine reaching Losovoya; while
Russians are approaching Chuguyev. It should be
pointed out that stabilization on Russian front no-
where near being achieved; despite desperate costly
counter-attacks, Germans still being thrown back in
various sectors. Emphasize that the respite so ur-
gently needed for preparing a spring offensive is not
being given to the Germans. Commit Hitler to spring
offensive, pointing out his dilemma: if no offensive
is tried, preparations will be inadequate; whichever
his choice, he must reckon with an enemy with far
greater resources. Besides, the new Soviet levees
will be well-equipped, because Russia not only is
still receiving large quantities of Anglo-American
war material, but also has made good the bulk of her
loss in productive capacity. Also mention element of
surprise will be lacking in any offensive this time.
(b) Far East: In Burma further re-
treat may be expected, as Sittang River has been cros-
sed by Japanese at several points, isolating on east
mide considerable number of our troops. At present
Japanese hold greater part of Southern Sumatra, and
are seriously threatening Java. Reiterate the tem-
porary charcter of Japanese victories, all of which
Regraded Unclassified
233
-2-
are dependent upon a control of the seas which she must
inevitably Lose. Heavy Japanese naval losses should be
pointed out. Denial of Manila Harbor for Japanese use
due to MacArthur's splendid stand in the Philippines also
should be mentioned.
(c) Libya: Link again Russi in and Libyan
fronts, repeating that Nazi reinforcements, a heavy toll
of which are being exacted by Royal Navy and Air Force,
are sent there at sacrifice of German forces on Russian
front.
2. Propaganda policy: (a) Ne must always maintain
a confident, buoyant optimism in our propaganda. But no
damage will be done by telling Europe SOME of the recent
vigorous, constructive criticism voiced by the home
public.
(b) Complete realization by European
listeners that Europe is where Germany's fate is being
Recided. We should emphasize how Germany's difficulties
are being accentuated by our own acts,
(c) Our job is to make use of the
following methods to relieve and strengthen Russian armies:
(1) direct aid with implements of war via Persia and
northern Russia. The massing of German ships in Norway
indicates effectiveness of northern route, Britain's
Battle of the Atlantic thus finds its counterpart in
Russias' Battle of the Arctic. (2) Russia has been re-
lieved of both Luftwaffe and Nazi armored divisions by
situation on Libyan front. (3) Germany has been forced
by us to keep large portion of her air force in West.
More German forces will be kept in West by recent com-
mando raid, which may be made to appear to the Nazis as
the first of a series.
Regraded Unclassified
234
-3-
(d) The demand for stronger offensive
action against Germany so as to help break up by every
available means her impending spring offensive should be
reflected in our propaganda this week. To help Russia
both directly and indirectly in every way possible is
our object, and we are going out ourselves to do it.
SECRET
CONDITINATOR OF INFORMATION
Regraded Unclassified
235
UNITED STATES GOVERNMENT
COORDINATOR OF INFORMATION
WASHINGTON, D. c.
March 6, 1942
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
Dear Henry:
The attached is a summary taken
from the Weekly News Guidance of the British
Ministry of Information.
Sincerely,
Bill
William J. Donovan
Attachment
Regraded Unclassified
There are two Japanese divisions in Burma, four
in Java, and others are available in Malaya, Siam and
236
Indo-China to be used as reinforcements. The Japanese
division consists of twenty thousand men. We are thus
ECRET
at a serious numerical disadvantage which we are unable
to reinforce.
- INFORMATION
Russia's offensive is being stiffly resisted. It is
believed that there are stilla number of German fortified
posts remaining behind the Russian forward lines. It
is now clear that Stalin intended his references in the
Red Army Order of the Day for external, not home consumption.
Home propaganda by the Russians shows no abatement of incive
ments to hate and destroy the enemy. Britain will stress
that the best method of beating the Germans quickly is to
send material assistance to the Russians.
The increase in losses of merchant ships is due partly
to German submarine activity in the Atlantic and partly
to losses in the Pacific. German production of submarines
is high, but the rate of destruction is believed great
enough to cause them difficulty in providing enough
trained crews. When an adequate convoy system comes into
effect for the United States Atlantic seaboard coastwise
traffic, the situation is likely to improve.
Until further construction is available, our Mediter-
ranean naval position will be difficult since available
strength is occupied in safe guarding the vital Atlantic
Arctic supply routes. We are now unable to prevent rein-
forcements from reaching Rommel.
Here are some facts to correct exaggerations on German
naval strength. Germany has one battleship, the Tirpitz.
There are no sis ter ships under construction; two pocket
Regraded Unclassified
237
-2-
battleships, the Lutzow and the Admiral Scheer; two battle
cruisers, the Gneisenau and the Scharnhorst; two eight
inch cruisers, Hipier and the Prinz Eugen; four six-inch
cruisers, two of which are used for training, one aircraft
carrier and one eight-inch cruiser which is not yet complete
The sea war 1s in a critical phase and its seriousness
should not be concealed. In all aspects of the war strategy,
shipping is the vital factor. It is the key to Russian
supplies, Far East reinforcements and the impracticability
of a British invasion of the continent in the near future.
British propaganda will stress the fact that American
and British production will be large enough to make good.
Regraded Unclassified
TREASURY DEPARTMENT
238
INTER OFFICE COMMUNICATION
DATE March 6, 1942
Secretary Morgenthau
TO
FROM
Mr. Kamarck
Subject:
Summary of Intelligence Reports
Conditions in Germany
All the evidence is to the effect that the Germene
have, so far, not been able to secure any sizesble food
supplies from their Russian conquests. Owing to the
destruction of farm equipment, live stock, lack of labor
and other factors, it seems unlikely that anything like
normal production can be secured out of the Russian ADAAB
before 1943.
(M.E.W., Report of Joint Intelligence Committee
Meeting, November, 1941.)
According to a British study, which has Just become
available, the Germen war administration is still very
effective and very efficient. This efficiency must be
maintained for the German economic system 1A working at
such 6. strain that only the most comprehensive control
can prevent serious difficulties. All labor reserves
are used, living standards are approaching those at which
reduction in output sets in, machines Are wearing out,
and there is tremendous pressure on the price system.
There are signs that some deterioration has already
crept in. Administrative standards are lower the further
one goes from the central authority, and particularly in
the occupied countries. Corruption is present in all
forms, from favoritism in the distribution of profitable
positions to direct bribery. In spite of all the energy
of the Price Control, prices of manufactured goods continue
to rise slowly.
(M.E.W., "Administrative Problems of the German
War Economy," July, 1941)
Regraded Unclassified
239
British Home Intelligence Report
but lack of confidence "In the higher direction of the war"
There has been 8 partial recovery of morale in England,
continues in spite of the Cabinet changes. However, there
1s special satisfaction that Moore-Barbizon and Margesson
are out. (These are both, of course, "men of Munich.
Cripps enjoys universal approval. Relief 1s felt that, at
last, 8 man has shown up who should be able to take some of
the strain off Churchill's shoulders and who could succeed
nim, if necessary. It is hoped that his presence in the
Cabinet will mean a closer and more productive relationship
with Russie.
There 18 growing anxiety over India. The impression
18 current that Churchill personally is responsible for
British slowness in making A move to meet Indian demands.
As far 88 the British defeats in the Far East are concerned,
scathing comparisons are made to McArthur's defense of the
Philippines. Confidence in the Navy remains high. There
1s A very noticeable and wide-spread scepticism about the
leadership of the Army. Considerable disappointment 18
voiced that the prophesy that "Germany was going to be
decisively bombed this year" has not proved true.
(British Home Intelligence Report, Week Ending
February 23; C.O.I. Cable, March 2, 1942)
Germen Intelligence
The concentration of German warshins at Trondheim,
Norway, with its threat to the northern supply route to
Rusaia, may be connected with recent developmente in the
shipment of American supplies to Ruseia. The concentration
of German ships at Trondheim occurred in the last week of
February. According to our export statistics, the movement
of armaments to Russia first began in any considerable
volume in the latter half of February. In February, our
exports to Russia totalled $68,000,000, compared to
$108, 000,000 for the whole preceding five months. In the
military material included in the February exporte, there
were 250 military planes (two-thirds bombers), 230 tanks
(mostly light), and 600 ermored cars, If the mobilization
of the German neval striking force At Trondheim w98 mainly
motivated by a desire to threeten the supply route to Russia,
it was nicely timed to coincide with the first considerable
shipment of armaments to Russia,
Regraded Unclassified
3 -
240
OF POSSIBLE INTEREST
Interception of Night Bombers
(The actual techniques used in intercepting night
bombers are still wrapped in secrecy. How radio location
report of an actual combat.)
is used for this purpose is illustrated by the following
On a totally dark night A raider Wes discovered by
the radio location apparatus and A night fighter assigned
to him. The fighter was told to flash his weapon and A
"blip" (indication on the oscilloscope showing his location)
188 obtained at once. The pilot WAS informed that the enemy
bomber WAB below, so he dove down in several steve of 500
feet. Then, the enemy WAS located above and to the left,
The fighter climbed slowly about 500 feet, closed to 100
yards, and caught a silhouette which definitely identified
the plane AS an enemy heavy bomber. The fighter fired his
gung and saw white flames appear in his adversary after the
first buret. The bomber dove And crashed into the sen.
(U.S. Air Information Bulletin, No. 2)
Russian Ramming Tactics
When all their ammunition is expended, Ruesian airmen
still attack their enemy by attempting to ram him. The
technique attempted 18 to cut off the enemy's tail with
their propellor. If the Russian pilot is skillful and lucky,
his opponent 18 destroyed, while only his propellor 18
damaged. The Russian plane attempts to reach safety by
gliding to an sirfield.
(U.S. Air Information Bulletin, No. 2)
Regraded Unclassified
241
RESTRICTED
MID 319.1
Situation
No. 650
M.I.D., W.D.
11:00 A.M., March 6, 1942.
8-11-41
SITUATION REPORT
I. Pacific Theater.
Philippines: No changes to report. Burma: Clashes on a
small scale between ground forces are reported. Java: According to
a Netherlands Indies communique, the Japanese have both air superior-
ity and numerical superiority on the ground. The enemy advance con-
tinues, and Surakarta, Bojonegoro, Krewang, Purwakarta and Tangerang
have fallen. The press reports an official Japanese claim of the
occupation of Batavia. Japanese aircraft heavily attacked and bombed
the city of Bandoeng on March 5. Australia: A small scale air at-
tack wae made against Darwin, and over southern New Guines enemy
reconnaissance missions were active.
II. Western Theater.
Bad flying weather over the continent curtailed R.A.F.
activity.
III. Eastern Theater.
Fighting is reported at various points along the front with
no important changes indicated officially. The German Air Force
bombed Moacow and Sevastopol on March 5. (A situation map will not
be issued this date.)
IV, Middle Eastern Theater.
Heavy rain prevented ground activities. There 1a no report
of activity in the air.
RESTRICTED
Regraded Unclassified
242
March 7, 1942
mt or SECRETARY'S FILES
Conference in Mr. Bell's Office
March 7, 1942
10:15 A.V.
Present:
For Treasury:
Mr.
Bell
Mr. Viner
Mr. B. Bernstein
Vr. Southard
Mr. Friedman
For State:
Mr. Homilton
Mr. Luthringer
Mr. Hiss
Mr. A. 11, Fox
The Cidnese reply on our draft Agreement was discussed. The State
Department said that they were concerned shout having to report to Congress
in the future and by the precedent which might be established. Representa-
lives of the Treasury pointed out that this loan would not necessarily
become a precedent and that the attitude shown by members of the Contres-
sional Committees indicated that detailed reports to Congress would not
he necessary. It would be sufficient to have a statement on the loan in
the Secretary's Annual Report.
It was agreed that there would be many opportunities in the future
for the United States to make suggestions relating to the Chinese war
effort. All agreed that political and military, rather than financial,
considerations were of paramount importance.
Mr. Hornbeck telephoned and spoke to Mr. Hamilton, Mr. Hamilton said
that Mr. Hornbeck had expressed the desire to have a chance to report on
the matter to Mr. Welles and had suggested the possibility of an exchange
of letters. It was pointed out that neither Mr. Welles nor Mr. Berle had
coen the Chinese reply to our draft Agreement. Mr. Welles had seen our
traft Agreement and had commented favorably on it.
It was agreed that the best method would be for the Secretary to
acknowledge by letter Dr. Soong's latter. Treasury representatives under-
took to have a draft letter ready for transmittal to State by 2:10 o'clock
Decretary and by the State Department; on Monday aftermoon, Dr. Soong could
the same day. On the following Monday the letter would be gone over by the
be called in and informed of the latest developments; and by Tuesday, verhaps,
Regraded Unclassified
243
- 2 -
the Agreement could be ready for signature. It was pointed out that
the coming Thursday is the anniversary of Sun Yat-sen and that it
would be desirable to have everything ready for public announcement
by that day.
Regraded Unclassified
244
March 7, 1942
Mr. Sullivan
Secretary Morgenthau
At Cabinet the Attorney General said that
there will be destroyed 567,000,000 gallons of
bootleg mash, and he asked why this couldn't be
converted into industrial alcohol. He spoke
as though the matter rested with him. Please
look into this and let me know.
Discussed at 1:30-3/9- bullian will sindin
Follow up 3/10-
du attached memo- finished-
Regraded Unclassified
245
Not sent. Submitted to Welles on 3/7/42.
See Letter from Welles dated 3/9 and conv.
th Welles on 3/10/42
J
346
COPY
My dear Dr. Soong:
I was happy to receive your letter of
March 3, 1942, indicating the Generalissimo's
favorable reaction to the draft of the Agreement
for financial aid to China and the points suggested
by him as to details.
I wish to assure the Generalissimo through
you of my complete concurrence with his comments
and suggested changes and that I am prepared im-
mediately to sign, on behalf of the United States,
the Agreement in the form attached to your letter.
I feel sure that this Agreement, will
make possible in 8. spirit of mutual cooperation
the strengthening of the financial and economic
structure of China and thus further the strong
bond of friendship between our two countries.
Very truly yours,
Secretary of the Treasury.
His Excellency
Dr. T. V. Soong
Minister for Foreign Affairs
Republic of China.
BB/ma - 3/7/42
Orig. to D. W. Bell
CC to: Mr. Hamilton (2), Messrs. White, Viner, Southard
Fox
Regraded Unclassified
247
STANDARD FORM No. 14A
TREASURY DEPARTMENT
APPROVED BY THE PRESIDENT
MARCH 10. 1925
WASHINGTON
TELEGRAM
CHARGE TREASURY DEPARTMENT. APPROPRIATION FOR
OFFICIAL BUSINESS-GOVERNMENT RATES
Official
(The appropriation from which payable must be stated on above line)
a a. - -
1-14117
MARCH 7 1942
MR EARL THACKER
HONOLULU HAWAII
DELIGHTED TALK TO BUDGE MARCH NINTH THREE P M WASHINGTON
TIME
HENRY MORGENTHAU JR
Regraded Unclassified
248
WUWE14 VIA RCA
F HONOLULU 27 MAR 6 1942
NLT HONORABLE SECRETARY HENRY MORGENTHAU
1942 MAR 7 AM 8 02
WASHDC
WILL IT BE CONVENIENT FOR YOU TO TALK TO ALEXANDER BUDGE
I
MON MAP 9 530 PM WASH TIME REGARDS
H
FAPL THACKER.
755AM MAR 7.
R
3 marh Time
E
3:30
S
U
Regraded Unclassified
249
March 7, 1942
Dear Harry:
Enclosed find a memorandum in
regard to voluntary payroll deduc-
tion plan for Federal employees.
You will see that we are getting
this started in the Navy, Treasury,
and several other agencies.
I enjoyed very much having
you for lunch, and I hope you will
do it soon again.
Yours sincerely,
(Signed) Leavy
Honorable Harry Hopkins,
The White House.
File n.m.c.
by Steen 12:50
Regraded Unclassified
-COPY-
March 5, 1942.
MEMORANDUM FOR THE SECRETARY:
Re: Harry Hopkins' inquiry about the voluntary
pay-roll deduction plan for Federal employees:
A voluntary payroll savings plan for Federal em-
ployees was adopted generally by the various departments
of the Government last July.
Due to supposed legal obstacles, this was not,
strictly speaking, a pay-roll deduction plan, but a
"group agent plan, under which each participating
employee turned over to his "group agent" a certain
amount each pay day, to be used for the purchase of
bonds or stamps.
Within the last few months, the Comptroller Goneral
has ruled that & straight pay-roll deduction plan would
be legal for the Federal service. It is intended that
the "group agent" plan will accordingly be superseded
by the straight deduction plan being used by most private
employers. Such a plan is now in effect in the Navy and
Treasury Departments, the Works Progress Administration,
the Federal Deposit Insurance Corporation, both Houses
of Congress, and the Library of Congress. The War De-
partment is committed to installing this plan as soon
as the necessary forms can be secured, probably April 1.
Other branches of the Federal service are expected to
take similar action in the near future.
CRAVES.
Regraded Unclassified
251
THE SECRETARY OF THE TREASURY
WASHINGTON
March 7, 1942
Dear marry:
Enclosed find a memorandum in regard
to voluntary payroll deduction plan for
Federal employees. You will see that we
are getting this started in the Navy,
Treasury and several other agencies.
Would you care to start the plan-go-
ing among the White House employees?
I enjoyed very much having you for
lunch and I hope you will do it soon again.
Yours sincerely,
Jennes
non. Harry Hopkins,
The White House.
Regraded Unclassified
252
March 5, 1942
TO:
Harold Graves
FROM: The Secretary
At lunch, Mr. Harry Hopkins asked me why
we did not put in the volunteer payroll deduction
plan among Federal employees. What is the answer
on this?
I would like an answer tomorrow morning.
Regraded Unclassified
Number of agents in Other Corporations and Investment Industry
qualified to issue Series E Savings Bonds, by Federal Re-
serve districts - January 10 to date.
1
:
:
:
:
:
:
:
:
=
I
:
:
Kansas
Minne-
New
Phila-
Boston
Chicago
Cleveland
:
Dallas
:
:
I
:
:
Richmond
:
San Fran-
:
St. Louis
:
Total
Date
:
Atlanta
:
I
:
City
apolis
York
I
:
:
:
:
delphis
cisco
:
:
:
:
:
:
Other Corporations
Jan. 10
4
-
8
-
-
-
-
,
-
-
-
,
12
17
12
27
1
-
-
4
65
8
-
1
115
-
-
24
15
2
61
22
13
-
1
21
83
15
4
3
240
31
17
14
90
28
27
1
3
32
101
19
8
11
351
Feb.
7
20
19
115
33
42
5
3
41
124
23
14
18
457
14
23
22
151
40
49
9
3
46
135
27
15
32
552
21
23
27
170
43
53
14
3
53
148
27
18
35
614
28
23
37
198
114
58
16
4
55
159
30
21
41
686
Mar. 7
50
234
46
59
17
4
56
174
31
25
42
25
763
Investment Industry
Jan. 24
-
,
-
-
2
-
1
#
2
-
-
10
-
31
-
10
3
-
2
-
7
-
6
1
8
37
,
ov
9
7
3
8
48
7
7
1
13
-
2
-
-
-
14
-
-
15
6
3
2
-
10
,
7
3
8
54
21
-
.
17
7
3
2
-
14
.
7
3
8
61
28
1
17
7
3
2
-
14
1
8
3
8
63
-
Mar. 7
1
17
7
3
2
-
16
1
8
3
8
65
-
1
Other Corporations authorized as of December 27, 1941 and Investment Industry as of January 17, 1942,
Regraded Unclassified
CONFIDENTIAL
Daily changes in the stock of Series E savings bonds on hand
(In thousands of pieces)
: Number of : Number of pieces
Stock on hand
IBM
:pieces sold :
manufactured
at close of
deliveries
: this day
:
this day
day
this day
Feb. 23
214
800
21,905
-
24
55
800
22,650
1,600
25
104
800
23,346
700
26
158
800
23,988
875
27
240
800
24,548
660
28
162
none-closed
24,386
-
Mar. 1
none-closed
none-closed
24,386
-
2
304
500
24,582
I
3
160
500
24,922
625
4
171
500
25,251
-
5
200
500
25,551
625
6
210
500
25,841
-
Office of the Secretary of the Treasury,
March 7, 1942
Division of Research and Statistics.
Includes stock in hands of (1) Federal Reserve Banks and branches, (2) Post
offices, (3) Federal Reserve Bank issuing agents, and (4) Treasury vaults
in Washington.
Regraded Unclassified
UNITED STATES SAVINGS BONDS
Comparative Statement of Sales During
First Five Business Days of March, February and January 1942
(March 1-6, February 1-6, January 1-6)
On Basis of Issue Price
(Amounts in thousands of dollars)
1
:
Amount of Increase
:
Percentage of Increase
Sales
:
:
or Decrease (-)
:
or Decrease (-)
Item
I
2
:
:
March
:
February
:
March
#
February
:
March
:
February
:
January
:
over
=
over
2
over
I
over
#
:
:
:
February
:
January
1
February
I
January
Series 3. Post Offices
$ 20,228
$ 25,467
$ 29,636
$ 5,239
$ 4,169
- 20.6%
- 14.1%
Series 1- Banke
54,304
98,234
64,904
- 43,930
33,330
- 44.7
52.4
Series 1- Total
74.532
123,701
94,541
- 49,169
29,160
- 39.7
30.8
Series I - Banks
9,768
19,116
9,881
- 9,348
9,235
- 48.9
93.5
Series 0. - Banks
52,758
91,087
41,319
- 38,329
49,768
- 42.1
120.4
Total
$137,058
$233,904
$145,740
-$96,846
$88,164
- 41.4%
60.5%
Office of the Secretary of the Treasury, Division of Research and Statistics,
March 7. 1942.
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
256
UNITED STATES SAVINGS BONDS
Daily Sales - March, 1942
On Basis of Issue Price
(In thousands of dollars)
Post Office
Bank Bond Sales
All Bond Sales
Date
Bond Sales
Series E
Series I
Series 3
Series G
Total
Series I
Series I
Series G
Total
March 1942
2
$ 5,811
$ 15,868
$ 2,043
$ 8,726
$ 26,636
$ 21,678
$ 2,043
$ 8,726
$ 32.447
3
2,975
8,459
1,629
8,780
18,868
11,434
1,629
5,780
21,843
4
3,395
8,833
2,658
12,558
24,048
12,228
2,658
12,558
27,443
our
3,869
10,448
1,680
11,870
23,998
14,317
1,680
11,870
27,867
4,179
10,696
1,759
10,825
23,279
14,875
1.759
10,825
27,458
Total
$ 20,228
$ 54,304
$ 9,768
$ 52,758
$116,830
$ 74,532
$ 9,768
# 52,758
$137,058
Office of the Secretary of the Treasury, Division of Research and Statistics.
March 7, 1942.
Source: All figures are deposite 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
257
MAK 4 1942
Dear Mr. Crawford:
My attention has been directed to
your remarks on the floor of the House Tuesday
relative to my statement to the Committee on
Ways and Means on the proposed tax measure.
I want to take this opportunity to
thank you for these remarks.
Sincerely yours,
(81emed) 1. Morganikan. Jr.
Secretary of the Treasury.
Hon. Fred L. Crawford,
House of Representatives
HMC: jo
3/4/42.
cc July
Regraded Unclassified
458
TAXES
Mr. CRAWFORD. Mr. Speaker, I ask
unanimous consent to address the House
for I minute and to revise and extend my
remarks.
The SPEAKER. Is there objection Lo
the request of the gentleman from Mich-
tran?
There was DO objection.
Mr. CRAWFORD. Mr. Speaker, to-
day, on March 3, 1942, I had the privilege
of sitting before the Committee on Ways
and Means and listening to the Secre-
tary of the Treasury present what I
think is an outstanding and courageous
tax statement, consisting of 17 pages,
with 13 additional pages of supporting
charts and statistics. I regret that we
have to incur obligations, but having in-
curred them, I am to favor of proceeding
with the enactment of B $24,000,000,000
or $25,000,000,000 tax bill Just as quickly
ns possible so We can proceed to adjust
our lives to the new order and world we
have entered.
Regraded Unclassified
259
March 7, 1942
Dear Archies
Thank you for your letter of March 2
about the clearance of official speeches.
As you know, I believe strongly in the value
of the new procedure, and all of us at the
Treasury will give it our complete coopera-
tion. Insidentally, 98 have found your
office most courteous and efficient in
clearing Treasury speeches and in bringing
those from other Departments to our atten-
tion whenever necessary.
Sincerely,
(Sterma) -
Hon. Archibald Macleish
Director, Office of
Facts and Figures
Washington, D. C.
FK/hkb
3/7/49
n.m.c.
Capies a Thompson
Regraded Unclassified
250
OFFICE OF FACTS AND FIGURES
WASHINGTON
THE DIRECTOR
March 2, 1942
Dear Mr. Secretary.
By e White House directive dated January 29, 1948,
high officials of the government were requested to submit proposed
public addresses for clearance in advance of delivery and the
Office of Facts and Figures was directed to undertake the actual
work of clearance in cooperation with Mr. Stephen Early, Secretary
to the President.
The Office of Facts and Figures has now had some
wooks of experience in the clearance of addresses. It has had the
fullest cooperation of the various departments and agencies. Its
experience, however, has indicated that there 10, In Home quarters,
a misunderstanding of the scope of the directive and of the fune-
tion of the Office of Facts and Figures.
The White House directive covers public addresses
only. The function of the Office of Facts and Figures is to submit
proposed addresses to departmente and agencies, other than the
department or agency of the speaker, which may share responsibility
for any aspect of the subject matter. The purpose of the submission
is to avoid conflicting statements by high officers of government.
Officials affected are: the heads of departments and
agencies and their responsible assistante - in the case of the
departments, under secretaries and assistant secretaries: in the
case of agencies and boards, those officers who correspond to under
secretaries and assistant secretaries - 1.0., the principal
responsible assistants.
The procedures of the Office of Facts and Figures with
regard to clearance of public addresses by such officials are M
follows:
1. Where a. speech involves matters within the responsi-
bility of several departments or agencies, it will be
submitted to the other departments or agencies con-
cerned. Where these departments or agencies have no
comments, the speech will be returned with an appro-
priate notation.
Regraded Unclassified
261
. 2 -
2. Where the speech involves matters within the respon-
sibility of other departments or agencies and where
questions are raised by one or more of these depart-
ments or agencies, OFF, through its deputies, will
attempt to work out 8. solution of the questions thus
raised, by consultation with the appropriate representa-
tives of the departments involved. When 6. solution is
arrived at, the speech will be returned with the state-
ment that it has been cleared.
It will be apparent that the above procedures cannot be
followed without the submission of the full text воще time in advance.
OFF has generally been able to clear speeches within B. period of a day.
but two days' loeway should be provided, and greater leeway would be
helpful. Three copies of minor speeches and six copies of major
apeeches are necessary to prompt clearance.
Faithfully yours,
Amarlush
Archibald MacLeish
The Director
The Honorable
The Secretary of the Treasury
Department of the Treasury
Washington, D. C.
Regraded Unclassified
262
OFFICE OF LEND-LEASE ADMINISTRATION
FIVE-FIFTEEN 22d STREET NW.
WASHINGTON, D.C.
March 7, 1942
The Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
Dear Mr. Morgenthau:
We are very grateful for the assurances con-
veyed in your letter of March 4, 1942 in regard to
expediting Treasury Procurement items on the Russian
program.
Our chief difficulty now is to cut through the
red tape of paper work and documents in connection with
these shipments. Mr. Mack is giving us his full coopera-
tion in simplifying the procedure and has called me
twice in the last few days reporting his activities in
this regard. Ne have our fellows working with him and
all the shipping people to simplify the procedure.
With kindest regards,
Sincerely,
Ilcouras B. his Calse
Thomas B. McCabe
Deputy Administrator
Regraded Unclassified
- - more - -
THE SECRETARY OF STATE
- D.C.
3/10/21
263
DEPARTMENT OF STATE
WASHINGTON
In reply refer to
March 7. 1942
My dear Mr. Secretary:
There are attached hereto for your information a
copy of B. letter dated March 4, 1942 received from the
Ambassador of the Union of Soviet Socialist Republics
and a copy of my letter of reply dated March 5, 1942
relating to the establishment in the United States of
B. Soviet Government Purchasing Commission.
It will be noted that the Commission referred to
will enjoy & status similar to tnat of the British
Purchasing Commission.
Sincerely
A yours, Acting Secretary Ach
Enclosures:
1. From Soviet Ambassador,
March 4, 1942.
2. From Acting Secretary of
State, March 5, 1942.
The Honorable
Henry Morgenthau, Jr.,
Secretary of the Treasury.
Regraded Unclassified
261
COPY
March B, 1942
My dear Mr. Ambassador:
I have received your note of March 4 in which you
confirmed your oral statements of Maroh 2 that your
Government has decided to create an official purchasing
commission for the Government of the Union of Soviet
Socialist Republics in the United States, and in which
you asked that the Government of the United States ex-
tend to the commission all the privileges end courtesies
corresponding to its Governmental status.
Às I told you during the course of our conversation
of
His Excellency
Maxis Litvinoff,
Ambassador of the
Union of Soviet Socialist Republics.
Regraded Unclassified
265
-2-
of March 2, the Government of the United States is glad
to welcome to this country the Soviet Government Purchasing
Commission.
This Commission will enjoy a status similar to that
of the British Purchasing Commission. It will be afforded
the privilege of using confidential codes and such other
facilities as are necessary to carry on its activities.
With my kind regards, believe me
Yours very sincerely,
BUMNER WELLES
Regraded Unclassified
266
Labancy of the
Union of Soviet Socialist Republice
Washington, D. C.
March 4, 1942
%y dear Mr. Wellen:
Pursuant to our conversation of March 2ml 1 wish
to confirm hereby that & decision has been taken by ay
government to create an official ourchasing commission
for the Government of the U.S.B.R. in the United States.
This commission 1s to be known BR the Soviet Sovern-
ment Purchasing Commission and le to consist of:
Major General À. I. Belaev, Fresident
Mr. K. I, Lukashev, Deputy President
hear Admiral M. I. Akulin, Deputy President
Ar. L. A. Maxin
)
)
Mr. I. A. Brewin
)
-
members
Mr. P. S. Seldiakov
)
)
Mr. A. A. Rosterchuk
)
The Commission is authorized:- to make purchases, to
conduct negotiations and consummate agreements with Govern-
mental authorities and agencies of the United States in
connection with financial, commercial, transport and other
kindred matters; to place orders or otherwise fill require-
ments for the U.S.S.R. with the United States Government
departments, divisions and agencies thereof as well S.B with
private commercial entities, organizations and enterprises;
to incur obligations on behalf of the Government of the
D.S.S.R. pertaining to Lend-Lease supplies and services,
loans and other credits granted by the United States
Government to the Government of the U.S.S.R.; to execute
any and all instruments which may be required in the
premises.
Regraded Unclassified
267
+
Obligations incurred by the Purchasing Commission on
behalf of the Government of the U.S.S.R. should bear the
signature of the President or one of his Deputies and the
signature of one of the members of the Commission.
The Government of the U.S.S.R. will appreciate it if
the Government of the United States will extend to the
Commission all the privileges and courtesies corresponding
to its governmental status.
Sincerely,
MAXIN LITVINOFF
Ambassador
The Honorable
Summer Welles
Acting Secretary of State
Washington, D. C.
KUSH
Regraded Unclassified
268
AIH
PLAIN
Chungking via N.R.
Dated March 7, 1942
Rec'd 19:42 s.m., 8th
Secretary of State,
Washington.
202, seventh,
Adler
Following from Aircr for For, Treasury Department:
"TF dash nineteen, reference your 144 of Merch 3,
Board on January 20 informed Bank of China Red Cross
could Either hold a United States doller account or
convert its United States dollars into rupees and national
dollars in accordance with its monthly requirements. On
Fabruary 28 Bank of China informed Board that REd
Cross WEB opening en account in Chungking and preferred
the first alternative. This errangement W6S confirmed
by Board on March 3 and Evens informed me yesterday
it was perfectly satisfrotory. His inquiry due Either
to misunCerstending between him and bank of China as
to delays orising from transfering REd Cross account
from Kunming to Chungking. "
GAUSS
HPD
Regraded Unclassified
269
2000
Dear Mr. Secretary,
I as melosing herewith a letter addressed by
Mr. to - Hall, Director of the Bureau of ingraving and
Printing, to the Minister of the Treasury of Cuba, which
has reference to the Cuben Minister's request that the
Bareau engrave end print . certain assunt of new paso
currency.
This Cuban proposal arises directly out of
recommendations sade to the Cuban Government by the
émerican Technical Mission to Cubs. If you cunsider it
appropriate, will you please forward this letter to the
Minister of the Treasury in Habans.
Sincerely,
(Signed) 8. Morgenthus. Jes
secretary of the Treasury.
The Nonerable Cordell Rull,
Prop in AMC
Secretary of State.
Please return to Secretary's office
inclosure
time IN thompson
FAS:esh
By Memenger in
3/6/42
Regraded Unclassified
TREASURY DEPARTMENT
BUREAU OF ENGRAVING AND PRINTING
WASHINGTON.D.C.
March 5, 1942
Dr. Oscar Garcia Montes,
Minister of the Treasury,
Ministerio de Hacienda,
Habana, Cuba.
Dmar Mr. Minister:
This is in reply to your letter of February 17, 1942,
in which you state that the Treasury Department of Cuba has decided
to proceed with the engraving and printing of a total amount of 106
million pesos. I note that of this total amount it is planned to
place two orders for immediate execution: Order No. 1 for 25 million
pesos in denominations and number of units as given in your letter
and Order No. 2 for 23 million pesos allocated as in your letter. I
also note your Ministry wishes to know:
(1) When this Bureau will be in a position to commence ship-
ments of Order No. 1 and when such shipments can be completed;
(2) When the Bureau will be in a position to commence Order
No. 2;
(3) What form of payment can be followed; and
(4) Whether we have any suggestion concerning the medium of
shipment.
It is not possible to give precise answers to the first and
second questions until the Bureau can be informed exactly what changes
must be made in the plates. On the assumption that the only changes
to be made are those mentioned on page 1 of my letter of December 3
to Mr. Frank A. Southard, Jr. (which was forwarded to you through the
Department of State), namely, changes in the two facsimile signatures,
in the date of the law, and in the series date, the Bureau will pro-
bably be able to meet the delivery schedule outlined on page 4 of that
letter. According to that schedule, partial deliveries could begin
about two months after receipt of the order.
Regraded Unclassified
I have no suggestion to make at this time regarding the
method of shipment. It is probably desirable to postpone selection
of the medium of shipment until the first lot of notes is ready.
As to form of payment, I believe it will be satisfactory for your
representative in Washington to make payment against shipping docu-
ments, but I would prefer to leave the final determination of this
matter Department. until an actual order is received from the Cuban Treasury
It should be made clear that the cost estimates contained
in my letter of December 3 above referred to and which you have used
in your letter of February 17 are based on our estimates of actual
cost as of that date and do not contain any margin for profit. We
would expect to hold to this basis of calculating our charges and
consequently should our actual costs of filling your order be less or
more than our estimates we would adjust our final charges accordingly.
Your order should, in addition to the information contained
in your letter of February 17, provide precise instructions as to the
changes desired in the notes and should also provide us with the sig-
natures of the signing officers which are to appear on the notes.
These signatures should be in black ink on white paper, and we should
like to have each official sign two or three times on a sheet in order
that we may select the signature that promises the best reproduction.
The Bureau of Engraving and Printing of the Treasury De-
partment will be glad to give prompt consideration to definitive
arrangements for the engraving and printing detailed in your letter
of February 17 on receipt of a formal request by the Cuban Goverment
to the Secretary of the Treasury through the Secretary of State.
Sincerely yours,
Amoree he %. Hall,
Director.
Regraded Unclassified
272
INCOMING CABLEGRAM
Date: March 7. 1942
From: Buenos Aires
Federal Reserve Bank of New York
1960
In order to increase our gold reserves please buy
for our account gold bars for the equivalent of US
$4,000,000 keeping the goldbare earmarked for our
account. Cable execution.
(Sgd.) Banco Central de la
Republica Argentina
(Received by telephone from Federal Reserve Bank of New York,
N. Y. 10:00 am March 9, 1942)
lose
Regraded Unclassified
Treasury Department
273
Division of Monetary Research
Date March 7:
1942.
To:
Secretary Morgenthau
From: H. D. White
Appended is a note in answer to
your inquiry with respect to the
changing silver situation in India.
274
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE March 6, 1942
TO
Mr. White
FROM
Miss Beal
Subject: Silver Prices in India.
According to 8 recent report silver prices in Bombay
(when converted into f.o.b. New York equivalents) were 55
cents per ounce for spot silver and 47 cents for one-month
delivery.
Current high prices are the result of R hoarding wave
which has developed in response to Japanese aggression in
the Pacific. People are displaying B. greater preference
for silver than for rupee notes--a natural consequence of
the rapid advance of Japanese forces. While the current
annual rate of hoarding, about 200 million ounces, 1a no
greater than that which prevailed in late 1939 and early
1940, the price ceiling formerly maintained by the Reserve
Bank of India and the Government has been recently removed.
There has been a disparity between Bombay and New York gil-
ver prices since November 1939 when India prohibited non-
licensed silver imports. Until recently however the differ-
ential between New York and Bombay prices was limited by
Reserve Bank of India and Indian Government sales and by
licensed imports of silver.
The wide spread between spot and forward rates shows
clearly that silver arbitrageurs are unwilling to sell spot
and buy forward because of unsettled military and political
situations.
Regraded Unclassified
EXCERPT FROM REPORT RECEIVED BY THE
SECRETARY
In all probability you are already posted on
this, but if not I thought it might interest you to
know that a considerable demand for silver has devel-
oped in India. According to our cable advices yes-
terday, the up-country off-take from the Bombay
market is running around 600 bars (i.e. 660,000
ounces) per day. There seems to be a squeeze on
spot silver, the price for which yesterday was
78-1/2 rupees per hundred tolas as against
68-5/8 rupees for March settlement silver.
Converting these prices at current nominal rate
of exchange and estimated freight and war risk rates New
York to Bombay gives a parity of about 55₫ per ounce
f.o.b. New York for spot silver and 47¢ per ounce for
March silver.
Regraded Unclassified
276
March 2, 1942
Harry White
Secretary Morgenthau
Please speak to me about this.
Came back from 9:30
3/9/42 marked "Fanished"
Regraded Unclassified
277
EXCERPT FROM REPORT RECEIVED BY THE
SECRETARY
In all probability you are already posted on
this, but if not I thought it might interest you to
know that a considerable demand for silver has devel-
oped in India. According to our cable advices yes-
terday, the up-country off-take from the Bombay
market is running around 600 bars (1.e. 660,000
ounces) per day. There seems to be B. squeeze on
spot silver, the price for which yesterday was
78-1/2 rupees per hundred tolas as against
68-5/8 rupees for March settlement silver.
Converting these prices at current nominal rate
of exchange and estimated freight and war risk rates New
York to Bombay gives a parity of about 55g per ounce
f.o.b. New York for spot silver and 47₫ per ounce for
March silver.
Regraded Unclassified
278
THE AMERICAN METAL COMPANY, LIMITED
o) BROADWAY
HKH:AA
NEW YORK
February 25, 1942
TELEPHONE BOWLING ONCEN
CARLE AUDRESS. EFFLUR. HEW TOR#
YOU
Honorable Henry Morgenthau,
Secretary of the Treasury,
Washington, D. C.
Dear Henry:
In all probability you are already posted on
this, but if not I thought it might interest you to know
that a considerable demand for silver has developed in
India. According to our cable advices yesterday, the
up-country off-take from the Bombay market is running
around 600 bars (1.e. 660,000 ounces) per day. There
seems to be a squeeze on spot silver, the price for which
yesterday was 78-1/2 rupees per hundred tolas as against
68-5/8 rupees for March settlement silver.
Converting these prices at current nominal rate
of exchange and estimated freight and war risk rates New
York to Bombay gives a parity of about 554 per ounce
f.o.b. New York for spot silver and 47¢ per ounce for
March silver.
Sincerely,
Harold
Regraded Unclassified
- EFFICIAL COMMUNICATIONS TO
THE SECRETARY OF STATE
WASHINGTON, as
279
DEPARTMENT OF STATE
WASHINGTON
In reply refer to
Eu 851.515/154
March 7. 1942
STRICTLY CONFINUENTIAL
My dear Mr. Secretary:
I have received your letter of February 27,
1942 concerning the possibility that the French gold
at Martinique might be removed. This Department
shares the concern expressed less the French Govern-
ment might attempt to reship the gold from Martinique
and has from time to time instructed the Consulate
to exercise the right of inspection permitted under
the agreement relating to the status quo in the
Islands. Any movement of the quantity of gold
stored there would be immediately reported. Under
these circumstances and at the present stage of our
relations with the French authorities it 16 not felt
that
The Honorable
Henry Morgenthau, Jr.,
FORDEFENSE
Secretary of the Treasury.
BUY
UNITED
STATES
SAVINGS
BONDS
Regraded Unclassified
250
-2-
that insistence upon a guard by United States officers
could be made under the existing agreement. The
Consul 18, however, being instructed to endesvor
insofar 8.8 18 possible under the existing agreement
to ascertain the exact value of the gold in storage.
Sincerely yours,
D Acting Secretary Dully
Regraded Unclassified
231
0
0
P4
I
DEPARTMENT OZ STATE
WASHINGTON
In reply refer to
March 7. 1942
77 840.51 Frozen Credits/5580
The Secretary of State presents his compliments
to the Honorable the Secretary of the Treasury and
transmits herewith parephrases of telegram no. 791 of
February 26 from the American Legation et Bern and this
Department's reply, tolegram no. 606 of March 5. concern-
ing the transfer of $3,200,000 from the account of the
Swiss National Bank to the account of the Instituto
Eepanol de Moneda Extranjern.
Enclosures:
Paraphrases of
telegrams nos. 791
and 606.
Copy:1c:3/10/42
Regraded Unclassified
o
283
o
P
Y
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
AMLEGATION, Bern
TO:
Secretary of State, Washington
DATED:
February 26, 1942, g p.s.
NUMBER:
791
Paragraph three of Department's telegram no, 500,
February 20 to the Legation, is referred to.
In confirmation of the Legation's 210, January 21,
there has been iterated by the Bern Director of the
National Bank informally the statement made by him during
an informal January conference that E. chance to retain its
United States dollar position would be welcome if it could
only be rendered mobile again by adding to and drawing from
it for transactions which our authorities considered as not
aiding our enemies. Thus, willingness to purchase in
"dollars" has been expressed by the National Bank, includ-
ing our Treasury draft eights fully replacing dollars to
be sold in the last given transaction, such as for instance
the transfer to the Spanish account of $2,002,000.
During the January informal conversation the question
of whether it would be willing to limit its dollar purchases
to our Treasury drafts exclusively in such transactions was
not raised by the National Bank.
The Swise appreciate very much the sympathetic con-
sideration by the Department of their request for the release
to the Spenish account of the $2,002,000 according to the
Bern Director of the National Benk.
COPY: dm: 3/10/42
Regraded Unclassified
o
o
283
P
Y
PARAPHRASE OF TELEGRAM SENT
TO:
AMLEGATION, Bern
DATED:
March 5. 1942, 11 p.m.
NUMBER: 606
Reference is made to the Legation's No. 791, 8 p.m.,
February 26.
On March 3 Assistant Secretary of State Acheson, during
R. conference, handed the Swies Minister the following
aide-memoire:
(Aide-memoire attached)
The Swise Government is to be consulted directly by
ite Minister or through Geutier concerning the understanding
mentioned in the last paragraph and the Department vill, as
Eoon as possible, be informed.
COPY: dm: 3/10/42
Regraded Unclassified
COPY
Copy of note handed to the
Swies Minister by Assistant
284
Secretary of State Acheson
March 5. 1942.
AIDE-MEMOIRE
With reference to the application of the Swiss
National Bank to transfer from its accounts in this
country, certain United States dollars to the account
of Instituto Espanol de Moneda Extranjera, the United
States Government 1a happy to state that the appropri-
ate licenses will be granted to permit the transfer of
$3,200,000 from the account of the Swise National Bank
to the account of the Instituto Espanol de Moneda
Extranjera. It should be noted, however, that this
action is to be taken because this Government is in-
formed that this amount relates to services which were
completed during the time that negotiations were being
carried on between representatives of the Swise Govern-
ment and of the United States Government with respect
to this question. Furthermore. it must be pointed out
that the policy of the United States Government is
opposed
Regraded Unclassified
285
-2-
opposed to further transfers of this nature for similar
purposes.
The licenses will be granted on the understanding
that, once the transfer has been effected, the Swino
National Bank will maice the necessary arrangements so
that this Government will be able to purchase the counter-
value in Swiss franca of $2,200,000 and the British
Government will be able to purchase the counter-value in
Swiss frence of $1,000,000. It is also understood that
the purchase of Swise france by this Government will be
effected either through the sale of official drafts or in
such other manner as may be agreed upon by the parties
concerned and that the purchase of Swies francs by the
British Government will be effected in such menner ge
shall be agreed upon by the parties concerned.
Department of State,
Washington.
0opy:1c:3/10/42
Regraded Unclassified
286
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
DATE March 7. 1942
TO
Secretary Morgenthau
FROM Mr. Dietrich
CONFIDENTIAL
Registered sterling transactions of the reporting banks were AS follows:
Soli to commercial concerns
£15,000
Purchased from commercial concerns
£22,000
Open market sterling held at 4.03-3/4. The only reported transaction
consisted of £1,000 purchased from & commercial concern.
The Canction dollar returned to B discount of 11-1/26 as compared with
11-5/8% yesterday. The Post Office WAB reported to have purchased 100,000
Canadian dollars.
In Siev York, closing quotations for the foreign currencies listed below
were BB follows:
Argentlae peso (free)
-2370
Brazilian milrois (free)
.0516
Colombian peso
-5775
Kexican peso
,2065
Venezuelan bolivar
.2805
Uruguayan peso (free)
.5295
Cuban peed
7/32% premium
There were no gold transactions consummated by us today,
No new gold engagements were reported.
Regraded Unclassified
TREASURY DEPARTMENT
287
INTER OFFICE COMMUNICATION
DATE March 7,1942
TO
Secretary Morgenthau
FROM
Mr. Kamarck
The attached C.O.I. Report on "The German
Supply and Utilization of Rubber", I believe,
should be sent on to the Division of Monetery
Research.
Highlights of the study:
In the closing months of 1941, the German
rubber situation WAB becoming incressingly
severe. The forced sales of used tires from
laid-un civilian cars were instituted.
To meet consumption demands in 1942, the
Germans have a synthetic production of 100,000
tons. Based on 1941 consumption estimates, there
remains 8 deficit of 50,000 - 100,000 tons.
Stocks of raw rubber are exhausted. The deficit
will have to be met from imports in Vichy French
ships, using old tires from civilian cars, and
making use of reclaimed rubber.
Regraded Unclassified
288
COORDINATOR OF INFORMATION
WASHINGTON, D. c.
March 4, 1942
CONFIDENTIAL
The Honorable
The Secretary of the Treasury
Washington, D. C.
y y dear Secretary:
The Research and Analysis Hre ch of
the Coordinator of Infor tion takes olessure
in sending you a copy of the Report No. MO-LD,
THE GERMAN SUPPLY AND UTILIZATIO. OF RUBB'R,
in the hope that you may find it of interest.
You will note that this document is classified
as Confidential.
Lilla Sincerely 2. L.Langer yours Langer
Acting Director, Branch
of Research and Analysis
Attachment
Regraded Unclassified
289
RESTRICTED
MID 319.1
Situation
No. 651
M.I.D., W.D.
11:00 A.M., March 7. 1942.
8-11-41
SITUATION REPORT
I. Pacific Theater,
Philippines: The enemy remains passive except for ineffectual
aerialactivity and artillery fire. Burma: Slight activity reported around
Pegu. Java: No details to report concerning the enemy's advance, Japanese
planes were in control of the air over Bandoeng, and the Scerabaya naval
base was under continuous air attack. Australia: No new developments to
report.
II, Western Theater.
Nothing to report.
III. Eastern Theater.
The Russians claim continued local successes along the general
front. There is no change in the general situation. (A situation map
will not be issued this date) The tempo of aerial warfare is reported
increasing by the Russians.
IV. Middle Eastern Theater,
Press reports indicate bad weather is slowing activity in the
coastal area of eastern LIBYA. Long range bombing of rear supply areas
continues and MALTA has been under continued bombardment throughout the
past month. A British communique from Cairo announces that an enemy
garrison and other positions in the FEZZAN Sector (south of TRIPOLITANIA)
have been captured by B Free French force after severe fighting.
RESTRICTED
Regraded Unclassified
290
RESTRICTED
MID 319.1
Situation
No. 652
M.I.D., W.D.
11:00 A.M., March B, 1942.
8-11-41
SITUATION REPORT
I.
Pacific Theater.
Philippines: No change in the situation to report. Burma:
Action continues, but there are no specific reports of progress by the
Japanese. Java: The enemy continuee to advance and now has large
portions of the island under control. Australia: No new developments
to report.
II. Western Theater.
R.A.F. bombers attacked the Cerman Naval base at St. Nazaire,
occupied France.
III. Eastern Theater.
The Russians continue their pressure along the front. The
German High Command claims the repulse of Russian attacks east of
Kharkov. (A situation map will not be issued this date.)
IV. Middle Eastern Theater.
No ground activity to report. R.A.F. fighter planes were
kept busy intercepting German and Italian planes that have increased
their activity against British positions and supply lines.
RESTRICTED
Regraded Unclassified
291
RESTRICTED
MID 319.1
Situation
No. 653
M.I.D., W.D.
11:00 A.M., March 9, 1942.
8-11-41
SITUATION REPORT
I.
Pacific Theater.
Philippines: No change in the situation to report. Burma:
The Japanese have driven westward across the Rangoon-Mandalay road.
Australasia: Japanese forces operating from the neighborhood of New
Britain have begun landings on the northeast coast of New Guinea.
Port Moresby, on the south coast, has been subjected to frequent
bombing. The R.A.A.F. opened a heavy attack on March 9 on B. Japanese
invasion fleet which had landed enemy troops in New Guines.
II, Western Theater.
The R.A.F. bombed a French War Factory at Poisey on March
8, On the night of March 8-9, British aircraft made the heaviest
attack in many weeks on western Germany,
III. Eastern Theater.
The Russians claim continued successes on the Central front.
There are no reported changes on the remainder of the front.
IV. Middle Eastern Theater,
The Italian High Command admits new British raide on March
8 against Axis-held islands in the Aegean Sea.
RESTRICTED
Regraded Unclassified