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Volume 624, April 9 – April 12, 1943
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Volume 624, April 9 – April 12, 1943
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Henry Morgenthau, Jr. Papers
Diaries of Henry Morgenthau, Jr.
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DIARY
Book 624
April 9 - 12, 1943
Regraded Unclassified
- B -
Book
Page
Bernetein, Bernard - Lieutenant Colonel
Arrives safely in Algiers - 4/10/43
624
189
Continued usefulness discussed by HMJr and McCloy -
4/15/43: See Book 625, page 213
Business Conditions
Haas memorandum on situation, week ending April 10, 1943 -
4/12/43
282
- C -
Chiang Kai-shek, Madame
See China
China
Madame Chiang Kai-shek's future plans discussed in
Secret Service Chief's letter - 4/9/43
87
Diplomatic Missions: Subsidy discussed in American
Embassy, Chungking, cable - 4/11/43
224
Contracts, War
See Plant Expansion
Correspondence
Mrs. Forbush's mail report - 4/9/43
68
- F -
Financing, Government
Federal Reserve operations in Government securities -
4/10/43
182
War Savings Bonds:
2nd War Loan Drive:
See also Speeches by HMJr
Des Moines (Iowa) Register editorial - 4/9/43
54
Newspaper carriers congratulated by FDR - 4/9/43
57
Associated Press thanked for cooperation - 4/9/43
58
American Bankers' Association brochure, "Banking's
Job in April" - 4/10/43
145
Young and Rubicam's ad in Washington Evening Star -
4/10/43
164
a) Drug. Cosmetic, and Allied Industries
contributions - 4/12/43
258
Washington Post thanked for Colonel William A.
Brewer's "This is America" on front page -
4/14/43: See Book 625. page 141
Norfolk, Virginia: Emerson Waldman report -
4/10/43
168
Pittsburgh, Penneylvania: Emerson Waldman report -
4/17/43: Book 626, page 212
Las Vegas, Nevada: Report by LeRoux - 4/27/43:
Book 629, page 88
Salt Lake City, Utah: Report by LeRoux - 4/28/43:
Book 629, page 117
Press release announcing opening - 4/11/43
216
Regraded Unclassified
- I - (Continued)
Book Page
Ford, Thomas F. (Congressman, California)
Laude HMJr's handling of finances - 4/12/43
624
310
Foreign Funds Control
Letters to Congressmen Cannon and Ludlow with regard to
1944 appropriation - 4/12/43
297
- L -
Lend-Lease
U.S.S.R.:
Cargo available for April reported to FDR - 4/9/43
88
United Kingdom:
Aircraft despatched, week ending April 6, 1943 -
British Air Commission report - 4/12/43
305
Aircraft flight delivery as at April 6, 1943 -
British Air Commission report - 4/12/43
307
LeRoux, Robert A.
See Financing, Government: War Savings Bonds (2nd War
Loan Drive)
- M -
Moreland, Esther S.
See Telephone Room
- N -
Navy Department
Industrial Incentive Division described to HMJr -
4/12/43
268
Norfolk, Virginia
Emerson Waldman report - 4/10/43
168
- 0 -
Occupied Territories
Tripolitania: British plan for withdrawing Italian
lira - Treasury comment for State Department -
4/10/43
207
Office of Price Administration
See Secret Service, New York City
- P -
Pittsburgh, Pennsylvania
See Financing, Government: War Savings Bonds (2nd War
Loan Drive)
Plant Expansion
Emergency Plant Facilities contracts by War and Navy
Departments discussed in Sullivan memorandum - 4/12/43
299
Regraded Unclassified
- R -
Book
Page
Revenue Revision
Jurisdiction by Treasury over Taxes: FDR's apparent
decision not to invade discussed by HMJr and Paul -
4/9/43
624
4
Doughton-HMJr conversation - 4/9/43
17,31
a) McCormack's statements regretted
Rayburn-HMJr conversation - 4/9/43
20
Doughton plan to introduce simple withholding tax
reported to HMJr - 4/9/43
36
a) Surrey report - 4/14/43: See Book 625, page 147
Tactics (future) discussed by HMJr, Paul, Surrey,
Blough, Congressmen Rayburn. McCormack, Doughton,
and Cooper - 4/10/43
142
$25,000 Salary Limitation: Revocation in rider of Public
Debt Act of 1943 presented by FDR - 4/11/43
220
Ruml, Beardsley
Personal tax situation discussed with Collector,
New York City - 4/9/43
65
- S -
Sawyer, John (Member, Democratic National Committee, Ohio)
Houghteling reports on labor record - 4/10/43
187,188
Secret Service, New York City
Report on Office of Price Administration cooperation
in counterfeit gasoline stamps - 4/10/43
184
Speeches by HMJr
2nd War Loan Drive: Radio speech to be made on Saturday,
April 10 - 4/9/43
48,118,127
a) Allocation of time - 4/10/43
97
1) Robbins' speech
109
Stabilization Fund
Plans for legislation to extend - 4/9/43
27
a) White's draft of HMJr's testimony: See Book 625,
page 220
Sullivan, John L.
Daughter Patricia thanked by HMJr for war poster -
4/10/43
180
- T -
Taxation
See Revenue Revision
Telephone Room
Moreland, Eather S.: HMJr asks for personnel record -
4/12/43
280
TIME Magazine
"Invasion dollars - fortunes made": HMJr's comment on
article - 4/9/43
66
Tripolitania
See Occupied Territories
Regraded Unclassified
- U -
Book 624
U.S.S.R.
See Lend-Lease
- W -
War Savings Bonds
See Financing, Government
Regraded Unclassified
1
Executive Order on Prices and Wages;
Taxes, 4-8-43
April 9, 1943
8:50 a.m.
Present:
Mr. Surrey
Mr. Gaston
Mr. Bell
Mrs. Klotz
HM,Jr: The radio commentator and the news story
don't check.
Mr. Surrey: No.
HM,Jr: There is nothing about ...
Mr. Surrey: compulsory savings; no,sir.
It's just "save more".
HM,Jr: What he said is all right.
Mr. Surrey: That's what I think.
HM,Jr: But the thing he said this morning was
he would come out for payroll deduction at the source
and compulsory saving and I had a lousy half hour.
Mr. Surrey: The statement seems brief and all
right.
HM,Jr: There are two statements and the Order.
Mr. Surrey: The Order did not refer to taxes.
HM,Jr: No. But I got Mr. Paul on the wire.
The statement is all right. The thing that bothers
me is it goes back to October 4th and does that cut
Regraded Unclassified
2
-2-
across our authority where it is set up? Were you
in on that when we worked so hard to keep the Economic
Stabilizer from telling us what to do? Who in Paul's
office was in on that?
Mr. Surrey: I think Mr. Paul himself.
HM,Jr: Did you read that part?
Mr. Surrey: Where he delegates to Burns
HM, Jr: Yes. The power to function.
Mr. Surrey: That's Part 5.
HM, Jr: Part 5? Yes. "The Economic Stabilization
Director is authorized to exercise all powers and duties
conferred upon the President
11
That's the thing.
Mr. Surrey: Uh-huh.
HM,Jr: I wonder who in Paul's office would know.
(Asked the operator to get him Mr. Paul's office.) He
has had 20 minutes to read it.
Could we get that Order?
Mr. Surrey: Mr. Paul's office should have that.
(At this point, the Secretary talked to Mr. Paul
on the phone and Miss Chauncey left the Secretary's
office to get a copy of the October 2 Economic Stabiliza-
tion Act.)
(At the conclusion of the conversation with Mr.
Paul, the following discussion took place.)
HM, Jr: When I heard this thing this morning,
I got this gathering of the clan because it looked
again like the President had done something without
consulting me and if he came out with a recommendation
Regraded Unclassified
3
-3-
for compulsory savings
Mr. Bell:
on the eve of the drive it would
be nice.
HM, Jr: I am just limp. But I just -- There
wasn't any "did he do it or didn't he do it?". I
went out for a walk and, God!, the speeches I wrote!
The letter we wrote up at the hospital would have
been
Mr. Bell:
...
cold water compared
...
HM,Jr: Luke warm water.
Mr. Gaston: It's just a case of the Budget
fixing up the statement and Executive Order for him
and not being able not to say anything about taxes,
but what he said on taxes was all right.
(At this point the Secretary held a telephone
conversation with Mr. Doughton.)
HM,"r: That's that!
Mr. Surrey: The only thing Mr. Paul wanted was
we should not go out on a limb in view of the fact
they might decide to pass a simple withholding bill
at the last minute.
HM,Jr:' I am not going out on the end of a limb.
Mr. Surrey: Because Doughton is resisting it
and he may be out on & limb.
HM, Jr: Just be sure you people don't go out
on a limb.
Regraded Unclassified
4L
April 9, 1943
8:53 a.m.
HMJr:
That's right.
Randolph
Paul:
Well, taking the whole thing together, I
don't really think that goes any - or is
intended to go any further. Of course, the
language 18 - you could drive a freight
train through the language.
HMJr:
Oh, you mean the language is not good or too
good?
P:
Well, it's very broad, but
HMJr:
Oh.
P:
but it's clear to me when you take the two
things together, the actual Executive Order
and the President's statement, that the Presi-
dent certainly doesn't intend to - to invade
the tax jurisdiction of the Treasury.
HMJr:
Yeah.
P:
Now, for instance, at the end of his Order -
of his statement.
HMJr:
Surrey's here listening.
P:
Yeah - at the end of his statement, not the
text of the Order but the end of his statement
on inflation
HMJr:
Yes.
P:
he says: "We cannot stop inflation solely
by wage and price ceilings. We cannot stop it
solely by rationing. To complete the job,
Congress must act to reduce and hold in check
the excess purchasing power."
HMJr:
Congress must what?
P:
"We must be prepared to tax ourselves more,
to spend less and save more. The details of
new fiscal legislation must be worked out by
the appropriate committees of the House and
the Senate."
Regraded Unclassified
5
- 2 -
HMJr:
Yeah.
P:
Then he says, "The executive departments stand
ready to submit suggestions.." Now that
language seems to imply that - that on the tax
front things will go on just the same way as
ever, and this delegation of authority under
the Executive Order to Byrnes really relates to
the First War Powers Act and the Emergency -
the Act of October 2, 142, neither of which
specifically deal with taxes.
HMJr:
Yes.
P:
So that taking the whole thing together, I
certainly don't think that's the intention.
HMJr:
Oh.
P:
What does Surrey say about it?
HMJr:
He - he agrees. Now there's just one thing,
that language you're reading, isn't that al-
most the same as the Budget language?
P:
No, no, it's the same idea that we've all
had, but I don't think you can trace that
language to - to - - in fact, well, you can.
HMJr:
Well, there's this
P:
find almost exactly the same thing in
things that we've said from time to time.
HMJr:
But isn't that the language of - confer with
appropriate committees, isn't that our - our
language?
P:
No, not exactly but it's our idea.
HMJr:
I see.
P:
And the - the earlier language - we've re-
peatedly said that same thing, that you can't
do the job by price - you said - you said it
way back in your March 3, '42, statement.
We can't control solely by wage and price
ceilings or by rationing, and 80 on. The -
it's a pretty good statement, and it's just
simple stuff
Regraded Unclassified
6
- 3 -
HMJr:
Well, I'd like to Bee....
P:
that we've all said right along.
HMJr:
( Talks aside: Get a copy of the Bureau of -
the Budget Message. Mr. Bell will have it,
the Budget Message.)
P:
You say Surrey - you say Surrey agrees.
HMJr:
Well, he can get on the phone and talk to you.
Stanley
Surrey:
Hello.
P:
Hello.
S:
Did you - did you want anything, Randolph?
P:
Well, I just wondered - you agree with that
taking those two statements together, that
there's no intention to do anything different
with respect to taxes.
S:
I - I wouldn't think BO. I think it's all
directed, as you say, to prices and wages and that
the
P:
Sure.
S:
tax matter 18 handled along the general
lines of the Budget Message. It's a state-
ment
P:
And - and
S:
of more taxes and savings and
P:
And that last paragraph indicates that he in-
tends then to go on just as before.
S:
I - - I would think so. I - - I wouldn't - I
wouldn't think - a - a major departure would
require more than he has done in that Order,
I would think.
P:
Surrey, well, I think we're - - I think that's
perfectly clear. Say, I wish you would tell
the Secretary
Regraded Unclassified
7
- 4 -
HMJr:
I'm listening.
P:
any late developments -- he's seeing the
President this morning -- and any late develop-
ments than what you looked up yesterday
S:
All right.
HMJr:
Just - just wait one second. I wanted to
(Talks aside: Bell, find the President's part
on the Budget Message where he refers to taxes,
will you, please?) Bell's going to look that
up.
P:
Hello.
HMJr:
(Talks aside: I'm the only one against these ?
P:
I wanted you to hear any of the late news of
what's going on and
HMJr:
Well, I wanted to ask you, what the hell 1s -
is Speaker McCor.. - not Speaker - John McCormack
doing up there?
P:
Well, he - of course, he has the reputation for
compromise - rather, for liking to compromise
better than to eat.
HMJr:
Well, I - I hope that we're no - we're in on that,
are we?
P:
No, not at all.
HMJr:
What?
P:
Not at all. I haven't even seen John. The last
thing we did to - was to send that letter. That
was before - in the middle of - just before the
debate started, and gave him the several plans,
and I told Doughton I was doing that. And we -
I haven't even seen John McCormack since then.
HMJr:
Oh.
P:
I haven't talked with him on the phone.
Regraded Unclassified
8
- 5 -
HMJr:
You sound innocent. (Laughs)
P:
We did - Surrey can tell you about it - a
couple of Congressmen that came down to see me,
I think it was last Monday, and they were inter-
ested in promoting a compromise measure. No, I -
I don't think we ought to get in the position
of resisting this movement either, because.
HMJr:
Now wait a minute. Before we go on, let me
just - Bell's given me this - just - just before
we get on taxes, let me look at this other.
Will you hold the wire a minute?
P:
All right.
HMJr:
Just relax. Are you still in bed?
P:
(Laughs) No, I'm right next to it.
HMJr:
(Laughs) Oh, it's all right.
P:
Yeah.
HMJr:
There's nothing that - now I was going to call
up Doughton before I went to see the President.
P:
Well, my - my point with respect to the tax
situation 18 this. Of course, there is a good
deal of force in these statements that some-
thing ought to be done, and I don't think we
ought to get in the position of trying to defer
the tax bill until June. I think our position
ought to be that we're - we realize the gravity
of the inflation situation, and we're ready to
come up any time.
HMJr:
Yeah.
P:
You see what I mean?
HMJr:
Yes. Well, I think I'll call him and let him
know that I'm in a fog what's going on up on
The Hill.
P:
Well - yeah, well, I - Surrey can tell you a
little about it. He was checking up yesterday.
Regraded Unclassified
9
- 6 -
HMJr:
Well, let's hear it, Surrey.
P:
But I think what's happening is that a lot of
people are sorry that they voted to recommit.
They're sorry that they didn't let the Committee
bill go through or some bill go through in order
to get it over to the Senate, and I think a lot
of people are sore because, owing to the
parliamentary situation that developed on the
floor, they never had a chance to vote on anything
else but the Committee bill. So - and then
they've been criticized a lot in the papers,
and they're beginning to think, "Well, maybe we
should have done something?" and - and my whole
feeling is that there's enough force in that
argument 80 we shouldn't get on the other side
and say "Now you mustn't do anything until June," -
we should be willing to do anything at any time.
S:
That - that would go so far, Randolph, 8.8 to
suggest a straight withholding and nothing else?
P:
What's that, Stanley?
8:
That would go to cover even a straight with-
holding and nothing else
P:
Yeah, we want the
S:
That - that's what I was thinking.
P:
withholding. We've always wanted 1t.
8:
That's right.
P:
And I think - I just want to cover ourselves BO
we don't get in an unfortunate position. Yeah -
and you get my point, Stanley?
S:
Yes, I - I - I agree with that.
P:
This point is what we've discussed.
HMJr:
Well, now let me
Regraded Unclassified
10
- 7 -
P:
I thought the Secretary ought to have it in mind
when he went over to see the President.
HMJr:
All right.
S:
Yes.
HMJr:
Now look, just repeat again how you interpret that
BO Mr. Bell can hear it, because he's read it now,
P:
Yeah, are
HMJr:
And Gaston will hear it now too.
P:
Now there is some broad language in Section 5 of
the actual text of the Executive Order, but I
think that language relates back to the very begin-
ning where there's a statement of authority, and
that statement refers to the First War Powers Act
and the Act of October 2, 1942, which have to do
mostly with price and wage control. Now it's
true that language under Section 5 18 quite broad,
conferring on Byrnes all authority to take action
under those Acts, and then it says - refers to
the fact that except, etc. "or inconsistent with
this Order, otherwise the powers and duties con-
ferred upon other persons and agencies remain -
remain in status quo." Now I think that - the
way - the language is so broad that you have to
try to get at the intention, and if you read the
last paragraph - next to the last paragraph of
the President' 8 statement - separate statement on
inflation, he talks about wages and price ceilings
and rationing not being enough. Then he goes on
to say, "We must be prepared to tax ourselves more.
The details
must be worked out by the
appropriate committees of the House
The
executive departments stand ready to submit sug-
gestions." Now that paragraph indicates to me
that he means the tax situation to go on just as
before, and - as a sort of separate department
from the Executive Order, but that he realizes
that - that one has to do more than just control
the prices and wages and ration. That 8 the way
I would interpret it.
Daniel
Bell:
Randolph, this 18 Dan.
Regraded Unclassified
11
- 8 -
P:
Hello.
B:
How much difference is - 1s there in this
than in the one previously issued?
P:
Not a
B:
Has Byrnes got more authority - - has Byrnes got
more authority in this than in the other one?
P:
No, I don't think so.
B:
Isn't it almost the same wording?
P:
Well, I can't remember the exact wording of
the other, Dan, but I - - it 18, in substance,
the same.
B :
Well, that's - that's my recollection.
P:
I mean it's all a question here of what people
do and not the words themselves.
B:
Uh huh.
P:
What they intend, and the language here I don't
think is any broader than the language in the
old Order.
B:
Paragraph 6 keeps the old Executive Order in
full force and effect except
P:
Yeah.
B:
if they're inconsistent with this Order,
and I thought that language was largely the
same. I don't
P:
Well, it - it certainly 18 the same in sub-
stance, Dan.
B:
Surrey thinks it's broader.
P:
Surrey does?
B:
That - that this Order is broader.
Regraded Unclassified
12
- 9 -
S:
I have the impression, Randolph, that the
Executive Order authorized Byrnes to do
quite a bit. This goes somewhat further and
gives Byrnes the direct authority to carry out
any power which the President has under the
Act of October 2.
P:
Yes, but - he may have more authority
S:
Yes, sir.
P:
down the orbit intended, but I don't think
he - there's any extension of
S:
Of that
P:
from an area standpoint, of his authority.
S:
That's right. I think he may have more authority
over wages and prices
P:
Well, I think
S:
and salaries, but not - not over other mat-
ters.
P:
That's right.
S:
Yes.
P:
In other words, it's a sort of vertical extension
and not 8. horizontal extension of authority.
S:
You - yeah, I think that's right.
Herbert
Randolph, this is Herbert.
Gaston:
P:
Yes.
G:
It occurs to me that if the War Powers Act did
not confer upon the President any additional
powers with respect to tax - taxation, then
this new grant of authority to the Stabilization
Director would not - would not cover any - any
taxing authority at all.
P:
Well, the
Regraded Unclassified
13
- 10 -
G:
In other words, he's conferring here all the
authority granted to
P:
The War Powers Act....
G:
The War Powers Act didn't touch the - his - his
Constitutional and statutory authority with
respect to taxation, did it?
P:
No, except that very collaterally you might say
that he had certain - was given certain authori-
ties where it was
G:
You mean it
P:
broadly necessary to the prosecution - the
way the language might have given some authority
G:
Yeah.
P:
but - but basically it didn't cover the field
of taxes.
G:
Yes, and this - I should think this matter of
recommending to the Congress additional tax
legislation, that - that doesn't rest on the War
Powers Act at all. It reste
P:
oh, no.
G:
It reste on the President's general Constitutional
statutory powers.
P:
Well, Herbert, the way he's put that in his state-
ment, it looks as if he realizes that
G:
Yes.
P:
and he covers the whole subject of - of
inflation, the price ceiling and the wage ceiling,
and then he goes on with an additional paragraph.
G:
Well, I got the impression, without comparing
the two Orders carefully, that - that the new
power granted the Stabilization Director did not
touch the field of taxation at all.
P:
Well, no, they don't. You might say if you got
in a certain Jam that certain language of that,
8.8 to allocation, helped you on the tax matter,
but
Regraded Unclassified
14
- 11 -
G:
Uh huh.
P:
there isn't - it isn't basically related to
taxes at all.
G:
Uh huh. Of course, the President can go as far
8.8 he likes in the way of tagging anybody around -
around him with the responsibility with respect
to taxation, but it didn't seem to me that this
Order made any transfer.
P:
Well, I don't think it's intended to at all.
G:
Uh huh.
P:
I don't think it - as far as extending the area
of Byrnes' authority is concerned, as
distinguished from merely proving his authority
in respect to wages and prices, I don't think
this Order goes - changes a thing in the last
Order.
G:
Well, the Secretary would like to talk to you
again.
HMJr:
Hello.
G:
Yeah.
HMJr:
I don't know whether I told you. You know what
I really was upset about was the seven o'clock
broadcast, which
P:
Oh, I didn't hear that.
HMJr:
Well, the seven o'clock broadcast said that the
President had come out with a statement recom-
mending a withholding tax and compulsory
savings, and I never saw the papers until eight
o'clock, and 80 between seven and eight I was
making speeches that I would deliver to the
President this morning.
P:
Yeah.
HMJr:
And the broadcast had it all wrong. So by the
time I read the paper, I was completely ex-
hausted.
Regraded Unclassified
15
- 12 -
P:
Well, I'm sorry but....
HMJr:
Well, there's
P:
those broadcasts are almost always wrong.
HMJr:
Well, I thought he'd come out with a complete
tax program without - without consulting us.
P:
Well
HMJr:
So that - that - then when I saw the papers, I
realized it was something quite different, and
P:
This - this statement - this is 8. rather good
paragraph, I think, on taxes.
HMJr:
Well, I think this - to sum up - I mean that
I think it - what he said on taxes 1s all
right, but the overall will be very helpful to
us on our bond drive
P:
Yeah.
HMJr:
which is the important.
P:
Well, I think - I think that you want to keep
in mind when you talk to the President
HMJr:
Yeah, I'm
P:
some of the things that have been developing
here on The Hill with
HMJr:
Yes, well, I'm going to have - I - I've got -
I've got to stop now because I've got to get
Doughton
P:
Okay.
HMJr:
before - and this 1a - I didn't want every-
body to think that I was just - what upset me
was the broadcast.
P:
(Laughs) Well
HMJr:
And what the broad.
Regraded Unclassified
16
- 13 -
P:
the moral - the moral is not to listen to
the radio 80 early in the morning.
HMJr:
Well, the moral is not to be Secretary of the
Treasury and then I wouldn't care about the
radio.
P:
(Laughs) But those - those radio stories are
almost - a lot of them are wrong constantly.
HMJr:
Yes. Okay.
P:
All right.
HMJr:
Goodbye.
Regraded Unclassified
:72
April 9, 1943
9:11 a.m.
Cong. Robert
Doughton:
All right, Brother Morgenthau. How are
you?
HMJr:
All right, Brother Doughton. How are you?
D:
Oh, about 80-80.
HMJr:
Bob, I'm going over in a little while to see
the President...
D:
Are you?
HMJr:
and I read about all this stuff from
The Hill and what your friend, McCormack,
has to say.
D:
Well, I was just - glad you called me, be-
cause I've been thinking about asking for
an opportunity to see the President ex-
clusively, if McCormack keeps on giving out
that stuff
HMJr:
Yeah.
D:
like he's been now in two statements
he's issued without ever letting us know
anything about it.
HMJr:
Yeah.
D:
The Speaker said that he was not concerned
about the statement yesterday, and he ad-
vised him --- if he keeps that up we can't
do anything down here.
HMJr:
Yeah.
D:
He's playing right into the hands of Joe
Martin all the time.
HMJr:
Yeah.
D:
Making our road that much more difficult
and, God knows, it's difficult enough any-
how.
HMJr:
Yeah.
Regraded Unclassified
18
- 2 -
D:
And if we can't do something about that, why, we'd
Just ae well quit trying to fool with tax matters
at all, and let John McCormack and Joe Martin
run it.
HMJr:
Well
D:
John - well, if he'd have stood up and fought for
our Committee bill, in place of talking compromise
all the time and thereby creating dissatisfaction
with it - there must be some forgiveness and some
compromise and all that - we'd - we could have
passed the Committee bill.
HMJr:
Well, if you don't see the President and get
something out of
D:
How's that?
HMJr:
I think you should have a chance to see the Presi-
dent.
D:
Well....
HMJr:
Should I say something or do - I say - or do you
want to ask direct?
D:
I wish you would. I'd be glad to have the oppor-
tunity to come up and see him today or tomorrow.
HMJr:
I'll ask - tell him.
D:
You tell him that we're - we're distressed, not
only disturbed but distressed about the way
the thing's going along down here
HMJr:
Yeah.
D:
and we're going to become completely demora-
lized now, for outside of maybe two men on our -
Democrate on the Ways and Means Committee, we all
are in favor of going along with this Reciprocal
Trade. The Republicans sent that bill back with-
out any instruction about - when it was recom-
mitted - they had their opportunity if they'd
have wanted to of some compromise. They could
put it in a motion to recommit. They just sent
it back without any - just sent it back on &
motion to recommit, and they keep talking all
(cont.)
Regraded Unclassified
19
- 3 -
D:
the time, and they're determined to have that
(cont.)
Ruml steal if they can get it....
HMJr:
Yeah.
D:
....and playing politics all the time, and if
we can't get better cooperation from the leader-
ship, Henry, we can't - can't do anything down
here.
HMJr:
Well, I'll talk to him. I - - I'll see what kind
of a mood he's in
D:
All right.
HMJr:
and when I come back I'll - when I come
back I'll call.
D:
Well, thank you very kindly. Thank you for
calling.
HMJr:
Right.
D:
Goodbye.
Regraded Unclassified
20
April 9, 1943
10:41 a.m.
HMJr:
Hello.
Operator:
Speaker Rayburn.
HMJr:
Hello.
Speaker
Rayburn:
Yes, Henry.
HMJr:
Sam, I first talked with Doughton this morn-
ing, and then I was over to see the President,
and he suggested that I come up and see you and
McCormack about this tax legislation. When
could you see me?
R:
Well, I've got - as soon as we get - I've
got to go to The House now. We're meeting at
eleven o'clock.
HMJr:
Yes.
R:
As soon as I get out of there, I'm having a
meeting with Doughton and Cooper and Disney
and Willis Robertson
HMJr:
Yeah.
R:
and let me call you after that. I don't
know what their ideas are going to be. John's
got everybody pretty mad.
HMJr:
Well, John's kind of off the reservation.
R:
Well, he's got every - everybody on the Com-
mittee mad as hell at him.
HMJr:
Yeah, Doughton's mad at him.
R:
Oh, he's in 8 towering rage. Now I had this
in my mind, Henry.
HMJr:
Yeah.
R:
These fellows are bellyaching. I'm going
to meet with these fellows and see if they
would agree to something like this, if it
can be done.
Regraded Unclassified
21
- 2 -
HMJr:
Yes.
R:
Now, you see, each one of these bills - the
Committee bill, the Carlson bill, and the
Robertson bill - all had the same provision on
withholding.
HMJr:
That's right.
R:
Now I'm thinking, if these gentlemen agree to
that, that I'm going to put it up to them in
a statement to the press that if they can get
together and agree to bring in a bill with
just that in it, that we can pass it very sud-
denly.
HMJr:
That would be wonderful.
R:
Huh?
HMJr:
That would be wonderful.
R:
Well, now that's the statement I'm - I'm think-
ing of and going to make this afternoon.
HMJr:
Well, do you think
R:
if these gentlemen think that that's right
HMJr:
Well, do you think you can get McCormack to
back you up?
R:
I don't know.
HMJr:
Well, if you need any....
R:
And after I talk to them....
HMJr:
Yes.
R:
I'll
HMJr:
You
R:
Some of them suggested that, if it was agree-
able, then that - you know, the Boss has got
great influence with him.
Regraded Unclassified
22
- 3 -
HMJr:
With McCormack?
R:
Uh huh.
HMJr:
Yes.
R:
And - but we'll talk that over and I'll let
you know as soon as I get out of that, Henry,
what the outcome of it is.
HMJr:
What time is that meeting, Sam?
R:
Well, I ought to get out of the Chair around
twelve-thirty....
HMJr:
Yeah.
R:
and go in committee on this other bill,
and then I'll - I'm going to meet with them
immediately.
HMJr:
Yes.
R:
And I ought to be out of that by one or one-
thirty.
HMJr:
Well, if you'll call me, I - - I eat in the
Treasury and I'm available.
R:
All right, Henry.
HMJr:
And I go over to Cabinet at two, you see?
R:
Yeah. I'll do my best to call you between
now and then.
HMJr:
I thank you.
R:
All right, Henry.
Regraded Unclassified
23
April 9, 1943
10:45 a.m.
HMJr:
Hello.
Operator:
Mr. Doughton.
HMJr:
Hello.
Cong. Robert
Doughton:
Hello.
HMJr:
Henry talking.
D:
All right, Henry.
HMJr:
Now, Bob, I had a good talk with the President
and he's very much interested and he asked me
to talk with Sam, which I did. And Sam tells
me that he has arranged to see you and some
of your Ways and Means people between now and
one 'clock.
D:
Uh huh.
HMJr:
And he said that after he had talked with you
gentlemen, why, he was going to give me a ring.
But he wants to see you all and find out just
what you've got in mind.
D:
Well, we've got in mind, if we know how - our
hearts will guide us, and our minds and hearts
will work together to do what's right.
HMJr:
Yeah, well, that's - I know it - that's -
you always are
D:
And what - you've been cooperating or trying
to do - they claim you and I are breaking up
the whole tax system and the plan of salvation
and bringing - suspending the law of gravita-
tion and bringing about the end - the consummation
of all things.
HMJr:
(Laughs)
D:
And that' B
HMJr:
Well....
Regraded Unclassified
24
- 2 -
D:
That's a pretty serious charge, you know.
HMJr:
Pretty serious. I'd hate to have to face
St. Peter with that.
D:
Or to face a jury or a judgment either on that,
wouldn't you?
HMJr:
No, I wouldn't want to.
D:
(Laughs)
HMJr:
But I think maybe after Sam Rayburn has seen you
gentlemen - then he's going to give me a call.
D:
All right, then maybe we can clarify the situation
some way.
HMJr:
That's right, and I'll keep right after it.
D:
Thank you, and thank you for your interest and
your call and everything else.
HMJr:
Thank you.
D:
Goodbye.
Regraded Unclassified
25
April 9, 1943
11:00 a.m.
HMJr:
Hello.
Operator:
Professor Odegard.
HMJr:
Hello.
Operator:
Go ahead.
HMJr:
Hello.
Peter
Odegard:
Hello.
HMJr:
Peter?
0:
Yes.
HMJr:
Henry Morgenthau.
0:
Oh, hello.
HMJr:
I was worried. I heard that you'd been
quite 111 in the office ar.deso forth, and
I wanted to know how you were getting along.
0:
Well, I - (laughs) - I've been in bed the
last two days. I'm in bed now.
HMJr:
Oh.
O:
But I think I'm shaking this off.
HMJr:
Good.
0:
I hope that I'll be - have it all off by
Sunday.
HMJr:
Well, if you do will you join us with
Lucky Strike at Carnegie Hall?
0:
(Laughs) At Carnegie Hall - I'd certainly
like to, I have to speak at a big meeting
in Hartford Monday night.
HMJr:
Oh. Well, then
0:
And I think probably I'll take Sunday to pre-
pare for that.
Regraded Unclassified
26
- 2 -
HMJr:
I Bee.
0:
So I'll listen to it up here.
HMJr:
Well, good luck to you, but you're - but you're
on your way back on your feet?
0:
Oh, yes, thank you very much. I - did - did you
get everything all set for Sunday or is that
off?
HMJr:
That's off.
0:
That's off?
HMJr:
That's off.
O:
But the Monday Carnegie is all set?
HMJr:
That's all finished, and the President approved
it an hour ago.
0:
Fine.
HMJr:
So we're all right.
0:
Well, I'll - what time is that, Mr. Secretary?
HMJr:
Nine to nine-thirty.
0:
Nine to nine-thirty.
HMJr:
Yeah, Red Network, whatever that....
0:
That'll give me a chance to hear it.
HMJr:
Good.
0:
Before taking the train.
HMJr:
Well, take care of yourself now.
0:
Well, thank you for calling.
HMJr:
All right. Goodbye, Peter.
0:
Goodbye.
Regraded Unclassified
27
April 9, 1943
)
Mrs. Klotz phoned Mr. Sullivan that
the Secretary said he is ready any
time that Congressman Somers is ready;
the sooner the better.
Regraded Unclassified
28
your Minday Its The have
Hrth Sames
an
MEMORANDUM
11:30
do
to hair - not
April 9, 1943.
TO:
The Secretary
JTS
FROM:
Mr. Sullivan
Senator Wagner is anxious to introduce the legislation
extending the Stabilization Fund and the Power to Devalue in the
Senate at the same time that this legislation is introduced in
the House. Mr. White agrees with me that it would be advantageous
to hold the hearings in the House and the Senate on successive
days. If you care to indicate when you would like to have these
hearings, I will try to make the necessary arrangements.
Regraded Unclassified
29
April 9, 1943
3:45 p.m.
HMJr:
Hello.
Operator:
Speaker Rayburn.
HMJr:
Hello.
Operator:
Go ahead.
HMJr:
Sam?
Speaker
Rayburn:
Yeah.
HMJr:
Sam?
R:
Yeah.
HMJr:
Henry talking.
R:
Oh, are you back from the Cabinet?
HMJr:
Sure, just got back.
R:
Well, now I tell you, it looks like it will
take us until five o clock here to get....
HMJr:
I see.
R:
through.
HMJr:
Yeah.
R:
Could you come up then?
HMJr:
Five
R:
Or John and I can come to your office, as
far as that's concerned. Might be better.
HMJr:
Whatever you say.
R:
That doesn't make BO much noise, you know.
HMJr:
Yeah. You and who?
R:
John. You asked me....
Regraded Unclassified
30
- 2 -
HMJr:
Oh.
R:
You said you wanted to see us, didn't you?
HMJr:
Yes, sir, that's what the President asked me
to.
R:
Yeah, yeah. Well, I'll see him, and I think
he can come down there with me at that time,
and I think it would be better for us to come
on down there.
HMJr:
Five o'clock.
R:
Yeah. Well, I'll - I'll make it then if - if
we can get out of here.
HMJr:
Right.
R:
You're going to wait there a little while?
HMJr:
Oh, yes.
R:
All right then, Henry.
HMJr:
Thank you.
Regraded Unclassified
>
31
April 9, 1943
4:39 p.m.
HMJr:
Hello.
Operator:
Mr. Doughton. Go ahead.
HMJr:
Hello.
Cong. Robert
Doughton:
All right.
HMJr:
Doughton?
D:
All right.
HMJr:
Henry speaking.
D:
All right, Henry.
HMJr:
I - I wondered if you wanted to tell me what
happened today, if anything. Did
D:
We had a conference, and I understood - the
Speaker said that he was going to get in
touch with you
HMJr:
He has.
D:
as you had to be at the - at the Cabinet
meeting
HMJr:
Well....
D:
and then he was going to arrange to have - for
him and the majority leader to have a conference -
conference with you.
HMJr:
That's right. Well, now....
D:
I suppose this afternoon if you - if you could
get together.
HMJr:
Well, now this is - may - can I tell you some-
thing that's strictly between us?
D:
Absolutely.
HMJr:
A secret.
D:
Yes.
Regraded Unclassified
32
- 2 -
HMJr:
Well, he - he's on his way down now, he and
McCormack.
D:
Well
HMJr:
And I just wondered if you could tip me off
on anything.
D:
Well
HMJr:
But this is just between the two of us. In
other words, I'd like to know what you want.
D:
Well, my idea is this, you know, that it's
not worthwhile for us to try to go ahead -
go ahead with matters of tax legislation or
any other important matters unless we're going
to have the support - cooperation and support
of the Speaker and the Majority Leader. In
other words, if we bring out bills and then
the Majority Leader 1s not in sympathy with
them or the Speaker's not - not in sympathy
with it, why, there's nothing that - it just
only produces confusion, and we're anxious
at any time - we feel that the Majority Leader
should not be taking positions in opposition
to what our committee - a majority of the
Democratic members favor without - without
consulting with us.
HMJr:
Yeah.
D:
Giving out these statements, you know, without
consulting about the statements he gives out
with us, and then when we had the bill out, why,
he didn't give us his support. He was all the
time talking about compromise, and as far 8.8
we re concerned there's nothing we can do
about tax legislation unless there's something
we can get together on, as far as I see.
HMJr:
Well, did the Speaker say anything to you about
the possibility of trying to get hold - get
through just the withholding tax bill?
D:
He talked about that, and I'm issuing - trying
to prepare a statement right now to make in
the morning.
Regraded Unclassified
33
- 3 -
HMJr:
Yeah.
D:
I'm saying that as far as I'm concerned, if the
leadership will get behind me on that, that
I'll introduce a bill and bring it up - contain-
ing those non-controversial provisions - 8.8 you
know, provisions which were in both tax bills
HMJr:
Yeah.
D:
that I would be glad to cooperate, as far as
I'm concerned
HMJr:
Yeah.
D:
if I can have the assurance of the coopera-
tion of the Speaker and the leadership on both
sides, which will be necessary - that I'll intro-
duce the bill and - and con. - convene the
committee for its consideration and do what I
can for its favorable consideration at the
earliest practicable moment.
HMJr:
Yeah. Well, I just wanted to know where you
were, because you and I work together, that's all.
D:
Why, certainly, and I appreciate that. Well, we
can't - there' not any use now to keep talking
about us bringing out something when the Majority
Leadership is not in sympathy with it and issuing
statements and criticizing it all the time and
suggesting some other course or something that we
haven't - he hasn't conferred with us about.
HMJr:
Well, if the leadership can guarantee that they'll
get behind you, you're willing
D:
Why, I'm willing and anxious to do it.
HMJr:
That's right.
D:
And we'll try - try to sandwich it in and bring
it out during the consideration of this - the
extension of the Reciprocal Trade Act.
HMJr:
I see.
Regraded Unclassified
34
- 4 -
D:
But if we don't - and leaving these other
controversial matters to be disposed of when
we reach the subject of general - consideration
of general tax legislation.
HMJr:
Well
D:
The question of forgiveness and doubling up and
all that for consideration when We bring out a
general tax bill, which, of course, if you take
up now it'll take more time and discussion and
consideration than we can possibly give and do
anything now. Everybody knows that.
HMJr:
Well, I wanted to know where you were at before
I started talking to them.
D:
Well, that's exactly the situation as far as I'm
concerned.
HMJr:
Okay.
D:
If I can have the assurance of the support and
wholehearted cooperation - that's all we can do
now
HMJr:
Yeah.
D:
because there's no use to talk about our
committee having time
HMJr:
Yeah.
D:
to bring out and then to get a bill and then
get it up to The House on - couldn't t get a rule
where if we could bring in all the amendments
and everything of that kind covering the whole
subject - why, we couldn't do that certainly
until we dispose of this Reciprocal Trade Act
and the Guffey Coal Act.
HMJr:
Yeah.
D:
But if we could just agree to get behind this
one thing
HMJr:
Yeah.
Regraded Unclassified
35
- 5 -
D:
....why, then I'll cooperate if I can have the
assurance of the - of the support and coopera-
tion of the leadership. We'd have to have it
on both sides. If we didn't, why, we're just
playing pol.. - the other side was just playing
politics and just killing time.
HMJr:
Okay.
D:
Yes.
HMJr:
Thank you.
D:
Well, thank you.
HMJr:
I'll let you know what happens.
D:
All right. Thank you.
Regraded Unclassified
4-9-4336
Surrey just toed me
that confidentially
he was tood that
Doughton s going to
make a statement
tomorrow morning
that he is perfectly
meling to introduce
a simple micholding
inty if the majority
r minority Can apre
on taking that and
nothing more. this
Should So into effect
Regraded Unclassified
On July " and 37
not 80 into the
question 2
forgureness Ruml
dence or any this.
else
This is very
Confidential
Regraded Unclassified
38
4/9/43
Copy of speech which HM, Jr took
to the White and which the President
read and approved.
Regraded Unclassified
39
Tonight I'm going to talk about something
you might not expect the Treasury Department to
discuss. I'm going to talk about the Second Front.
The Second Front is no military secret.
We all know that, just over the horizon, we of
the United Nations are piling up the thunder-clouds
of the greatest attack in history. We are massing
for that attack, now. The planning, the patient
preparation, the bitter time when we had to take
blows without returning them, because we weren't
ready -- all of that is past. Now we're ready
to deal a few blows ourselves; and they'll be
blows, I can promise you, that will rock Nazi
Germany to its rotten, bloodstained foundations.
As the Secretary of the Treasury I've been
given the job of seeing to it that money is available
to pay for this great military offensive and others
to follow. This is why we are launching the
Second War Loan tonight -- to raise at least
13 billion dollars before the end of this month
to buy materials and implements of war.
We
Regraded Unclassified
40
-2-
must buy shells today for big guns that will be
roaring tomorrow and the day after. I'm here
tonight to tell you that your help is needed.
The need is real, urgent, pressing. Ten percent
is no longer enough. We are asking everyone to
buy extra bonds this month, even workers who are
now participating in the payroll savings plan.
In our private lives none of us deals with
billion-dollar figures. I know they're bewildering.
But except for the size of the figures
involved there is no mystery about financing a
war. The Government of the United States is
buying the best equipment ever furnished to any
army. It is paying not only for equipment that
reaches the fighting fronts, but for some equipment
that never gets there. For every ship that's sunk
we must build two new ships -- for every cargo that's
lost we must send out two new cargoes. And that
costs money. Where are we going to get it?
Well, there are several ways to get the
Regraded Unclassified
.41
-3-
money. We can raise it through taxes. We
can borrow it from the banks. And we can
borrow it from the people -- and that means you.
We are now getting more money through
taxes than ever before. And it will be necessary,
I have no doubt, to ask for still more. But we
cannot rely on taxes alone to do the whole job,
and I wouldn't want to -- because we could not
tax with fairness on so huge a scale.
We could borrow all the money from the
banks. Our credit is excellent. But for a
varlety of reasons, economic and social, this
is also undesirable. One reason goes to the
very heart of our system of Government. It is
important to me as I know it is to you. This
1s a people's war -- so all of the people ought
to have a part in financing it.
And I know you feel the same way about it,
because five-sixths of all the people who are
earning money today have bought bonds.
Regraded Unclassified
42
-4-
As Secretary of the Treasury, I can report
that 95 cents out of every dollar which comes into
the Treasury, through war bonds, taxes, or anything
else, is spent for war purposes. When you pay
eighteen dollars and seventy-five cents for a bond,
eighteen dollars go immediately into guns and planes
and equipment. The 75 cents goes for the regular
expenditures of the Government.
The cost of selling bonds is indeed very
small. And this is because you and your neighbors
and hundreds of thousands of volunteers across the
country have taken over the job of selling. I'd
like to express, to all of you, my deepest gratitude.
I should like to thank all of those who are helping --
management and labor, for the splendid success they
have made of the payroll savings plan, under which
more than 25 million working people now regularly
invest almost 9 percent of their wages and salaries.
I'd like to thank manufacturing and retail business
firms, large and small, who have given us, free of
Regraded Unclassified
43
-5-
charge, millions of dollars worth of advertising
space and radio time, as has the Bell Telephone
System tonight. And the Federal Reserve System
and thousands of banks working with them -- and
all the others who are giving their time in this
way in the service of their country.
You can feel every confidence that the
financial affairs of your Government are in good
condition as the United Nations go on the offensive.
The situation is well in hand. We know where we're
going. We know how much money our armed forces
will need.
During this month of April we must get
13 billion dollars. We shall then have borrowed
about 20 billions in the first 4 months of this
year. We will need to borrow about 25 billions
during the second 4 months, and, without any new
taxes, another 25 in the final period of the year;
a total of about 70 billion dollars for the year.
Regraded Unclassified
44
-6-
I would like to assure you that we can
afford 1t.
But 70 billion dollars 1s, of course, a
lot of money. It isn't going to be easy to
raise 1t. It means hard work. But I have
every confidence, knowing the American people,
and how deeply serious they are about this war,
that we will get it. We will get it from people
who will scrimp and save if need be to buy these
bonds. We will get it especially from those
upon whom we must depend most heavily -- the men
and women who are making good money in shipyards
and plane factories and tank production; the
gallant women who used to call themselves housewives
but who are working today at lathes and drill-presses
in the great war plants. These are the Americans
who, all together, buy bonds in amounts that a
millionaire, or even all of the millionaires
combined, could never hope to equal. And they'll
buy more of them this year -- this year when 10
percent is no longer enough.
Regraded Unclassified
45
-7-
The boys at the front are counting on
them. They are counting on you.
All of us will buy bonds because all of
us know that this is our war and that we must
win 1t. We must win it so that nations with
a bloody philosophy out of the dark ages of
mankind's past will never again be able to raise
a traitorous hand against neighbors wanting only
to live in peace and friendly good will. An
hour ago I passed through a railroad station.
Standing at the iron gates, saying goodbye, were
boys in uniform with their girls, their wives --
young couples come to the heart-breaking minute
when there were no more words; when all they
could do was to stand with their hands clenched
so tightly together that they hurt. And as I
passed them I thought of all the other young
Americans whose lives have been torn into ragged
bits -- young architects and engineers giving up
their studies; school-girls working in factories;
Regraded Unclassified
15
-8-
farmers sending their wives and youngsters out
to work in the fields because they can't get
hired hands; business men losing what they've
spent twenty years creating, because of the
necessary curtailments.
By what right do the Germans, the Japanese,
blight our lives, shatter our homes, whirl away
our boys to drown five thousand miles from home
in a scum of oil at sea, or bleed and cough their
lives out in a muddy, filthy ditch? Who do they
think they are? We know only too well who they
think they are. They're the supermen, the
Master Races, put here on earth to enslave the
rest of us and crack the whip over our bare backs
while we do their dirty chores. They and their
"great" armies; their great armies of sneaks and
bullies that jump on weak, helpless nations when
they aren't looking. The Japs, with their dreams
of empire, built on lies and treachery.
The
Germans, who twice within the memory of living
Regraded Unclassified
47
-9-
men have tried, with their Kaisers and their
Fuehrers, to conquer the rest of our world.
We say: "Never again!" We of the United
Nations will show them who we are. We'll
show them some really great armies -- Chinese
and Russian, British and American.
These armies are the mightiest military
machine in all history. But to us they are
friends and husbands, fathers and sons. They
are your boys and my boys.
They are asked to give their lives.
You are only asked to lend your money.
Shall we be more tender with our dollars
than with the lives of our sons?
Regraded Unclassified
48
April 9, 1943
Last paragraph changed after Secretary's
first reading copy made, due to re-
arrangement of program.
Regraded Unclassified
4/1/43
Saturday Speech
Thank you, Mr. Robbins.
Fellow workers. I want, first, to express my gratitude
to you veterans of the home front for the patriotism you
have shown in the campaigns that are already history. You
have given unsparingly of your time and effort, without
compensation of any kind save the satisfaction of serving
your country loyally and well, to the most important task
to which men today can devote themselves -- the winning
of the war.
The experience you have gained in previous campaigns
has made you into seasoned, hardened veterans. This
experience will now serve you well, for on Monday next
you are going to undertake the greatest operation in all
financial history -- the raising of 13 billion dollars.
Regraded Unclassified
50
- 2 -
This is a task that will demand all of your ingenuity,
all of your resources, all of your patience and strength.
Great as are the sums the Government is raising
through taxes, they are far from sufficient to finance
the whole costs of the war. And great as has been the
sale of Government securities to individuals, trusts,
corporations, partnerships, and banks, the sums raised
in the past are insufficient in terms of the vastly
expanded needs of our war requirements today. What is
required this month is a financial mobilization 50 all-
embracing and thorough that the war will be brought to
every American, every wage earner and farmer, every
business and professional man and woman. Such has not
been the case in the past. It must be the case during
the Second War Loan Drive if success is to be achieved.
D-2
Regraded Unclassified
51
- 3 -
In spite of the unparalleled task that lies before
us, the conditions of success are at hand. There is
more money in the people's hands available for investment
than at any previous time in the nation's history. We
have, as you know, designed our securities in such a way
to appeal to every type of investor, long-term or short-
term, corporate or individual, bank or trust. What is
required now is that you workers carry the Government's
message to the people of the country -- carry the message
to every home in the land. This I know you will do.
To win this war, the people -- all the people --
will have to put their shoulders to the wheel. War on
80 unexampled a scale cannot be the enterprise of the
few; it must be an undertaking of the many. Only the
people -- all the people -- can finance this total war.
L-2
Regraded Unclassified
52
- 4 -
Our success in achieving the 13 billion dollar goal will
not be measured alone by our ability to raise the money.
The true measure of success will be the extent to which
this money comes from the savings of individual men and
women.
The overwhelming majority of our people, I am
convinced, are ready, willing, and eager to demonstrate
to the men and women of the armed forces, to the teeming
millions of our Allies who are enduring the tortures of
a living hell at this very moment, that we are with them
in fact as well as in spirit in this crusade to blot out
barbarism and lay the basis for 8. better world.
It is your job to see that the men and women of
America demonstrate their determination to win through
to final victory and lay the foundations for a lasting
D-2
Regraded Unclassified
53
- 5 -
peace by buying War Bonds in vastly greater amounts than
they ever did before. Some you will only have to approach;
some you will have to persuade; and some you may have to
convince. All, however, you will have to reach.
may I express to ym in this glournenterprice
Before I turn you back to Mr. Robbins, who will give
you pero detail 88 to the job to be done, and the meens
my sincerent makes for the test ? oncess
and Grhspeed.
which are being provided with which to do it, may I wish
you the best of success and Godspeed.
-o0o-
D-2
Regraded Unclassified
April 9, 1943
Dear Gardner:
Thank you for calling my attention to the
splendid editorial that appeared in the April 1
edition of the Des Moines Register. Certainly,
it expresses very clearly the Treasury's position.
I liked especially the reference that our
quota was no idle shot in the dark." I think too
that the editorial has done an excellent job of
treating the anti-inflationary aspects of our pro-
gram.
Alto ether, it was a praiseworthy example
of the intelligent treatment that your papers have
been giving all problems dealing with the war ef-
fort.
Sincerely yours,
(Signed) H. Morgenthau, Jr.
Mr. Gardner Cowles, Jr.
e Kalorama Circle
Washington, D. C.
JGarip
File in Diary
Initialed copy to Gamble
Regraded Unclassified
57
GARDNER COWLES. JR.
6 KALORAMA CIRCLE
WASHINGTON.I D.C.
APR 81943
April 7, 1943
The Honorable
Henry Morgenthau, Jr.
The Secretary of the Treasury
Washington, D. C.
Dear Mr. Secretary:
I think this editorial from our Des Moines
newspaper may interest you.
Gardner Sincerely Cowler
Enclosure
Regraded Unclassified
56
8 PAGE IDUNT
The Des Moines Register
Patitional every verifity by
THE RECEIVER AND TRIBUNE CO, TAB-TIS Compt BL
Entered at the postettice a Des Mothers, la., - and class matter.
TM - - - 18401
the - - Register - 18541
RESERVITION RATES
PATABLE - ADVENCE
as REL
- - THE -
Delip Repairs Year
- X - Tmc.
Des - fer. "
Roder THE -
- Ten, #1
PERSCARE ser FAIL
Daily
RECEIVER
TRANSINE
AND 311,888 Sunday MADER 378,249
- Dine -
Date Beginet
SMLTTS
-
Transis
Date
hand
Name
SEATS
APRE.
all
MEMBER - THE AMOUNTED - - Fine la - - is
- - residention of all - - - to a . Date - and publicable -
of responsibilition al - other - - - - - - INSURANCE
Speed Up Victory-Buy
Extra Bonds This Month!
Here are some simple facta relating to the Second War Loan
drive which will get under way April 12 all over the country:
In order to Insure Victory, the United States treasury is
forced to borrow some 70 billion dollars this year from the Amer-
ican people.
In order to insure that this loaning of money to the govern-
ment will maintain the necessary rate, the treasury la conducting
an April drive to raise 18 billions of it.
Eight billions of this must be raised smong me-banking
lenders-wage-earzers, private enterprisers, partnerships, or-
porations, and to on The rest will be terroned from banks.
lowa's quota of this 8. billions la 100 million dollars, OF one-
eightleth of it.
This is in addition to louns that will be subscribed by Towa
banks. It is 100 million dollars that must be borrowed from
fargers and business men and workers and everybody else, both
as individuals and as beads of enterprises and organizations.
This quota for lowa, like the national quota, in no "shot in
the dark." It is based on concreta figures of bank deposita and
other things which prove, indisputably, that " have the money.
Indeed, almost 13 billions was ruland in last December's
drive, although the original goal then was considerably less than
that and our income is now considerably higher.
This time the Victory Fund committee and the War Savings
staff, which functioned separately in the December drive, are
pooling their facilities, They are being united for this month's
drive under a new Treasury War Finance committee, so as to
integrate the whole fund-raising campaign in one "big push."
So far as the general public is concerned-excluding the
banks' part of the fund-raising, in other words-the treasury has
four principal investments to sell:
1-The common "war bonds" or Series E, at maturity
values of from $25 to $1,000.
1-The Beries F surings bonds, from 505 la $10,000.
1-The Series G bonds, from $100 to $10,000.
t-The "tax savings notes," Series C, acceptable for fo-
ture payment of federal tases,
*
Now presumably everybody knows most of the good and
sufficient reasons why the federal government is spenling up
this borrowing from the American public.
It is not morely that the federal government needs the - of
these funds In the prosecution of the war. A good dest more of
the secessary cash could be raised from the banks. But to do all
of it, or even a major part of IL that way would be to create the
most terrifie inflationary pressures.
The government does not und to have Inflation: It wants
the starage citimen's dollar, after the war, still to be worth a
dellar-cot just 75 centa, or 50 centa, or something else, by pres-
ent standards.
So If the use of money to win the war is also plaz to win
for - . presperous and stable peace, then we the American
peoplé-ell of us-have got to forego every possible thing during
the war period Itailf, and wait to spend our surplus cash until
our Industries can return to peacetime production.
That la the net of IL
Every boad bought this month helps that much to stave off
inflationary pressures and keep our economy stable.
Every unnecessary thing we "go without this month will
permit or to buy that much more, Instead of less, with the same
namber of dellars when Victory is wat.
or course there are plenty of other reasons why we all want
to buy was bonds, and will E the limit.
One la that It la the simplast expression of patriotism by
those who stay at home-we can "fight" with our dollars, since
the government must have dollars as well as anldiers.
Another is that it is the best possible investment, all things
considered. If is set "giving." It in anring, with interest-sar-
Ing by investing in the thing that la new mast manualy for all
of -
So still another reason is that m UNE on the cirillas fruit
has made himself a "full partner" in the defeat of the Anix and
the ackinvement of Victory unless he la loising to Unite Same
1-8mg - - - - of - I RUS-
1 1 1 I I a 1 a i 1 I
any. productive enterprises.
*
For a lest of our people, a mere 10 per cent is and mough.
Mary incomes, even after taxes, are far higher than mer
before. The buying that has trees pudposed setil
after the war leaves them either with other enry/as Income, or
with avings that ought - to go to work for Vistery,
To get this nimity Invested in the job al table in turn our
must argest responsibility.
Lat's leave it to aur memjer - As the "quiting" - the
"casting"
Les - know piling it us the belier and hereing
HE WHITE HOUSE
WASHINGTON
April 9, 1943
My dear Mr. Secretary:
I think the job the American newspaper
boys have been doing over the past year in the
sale of War Savings Stamps is an inspiration to
all of us.
Please extend my congratulations to the
boys, their mothers and fathers, and the newspaper
organizations who are making this great contribution
to our war effort.
Very sincerely yours,
Honorable Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D. 0.
Regraded Unclassified
TO:
The
apr Secretary 9, 1993 Threethree to 58
ap representative
The Associated Press asked for
A short piece to carry your signature
to be run this week dealing with the
important part the newspapers can
play and are playing in the war
financing. The attached has Pembody's
approval and I Idea it would be
helpful.
mr
FROM: MR. GASTON
Regraded Unclassified
Traft for the AP
ok.
1/mh.
The financial demands of this war have stretched
to every corner of the country the need for lending
fighting dollars to the Government. Even with history-
making numbers already holding a stake in the nation's
future, new millions will have to be added to the lists
of shareholders in America during the $13,000,000,000
Second War Loan drive which the Treasury will launch
next week.
Thousands of volunteer workers from every group
in our national life will be collaborating with their
Government in the campaign to sell securities to their
friends, neighbors and business associates. Busy as
they will be in this important task concentrated into
a brief period, they will find their work simplified
tremendously by the splendid contributions that have
Regraded Unclassified
60
- 2 -
been made and will be made by the industries that provide
our public with information and advertising.
Naturally, one of the great jobs in this field is
that contemplated by the newspapers of America. The
press -- daily and weekly, urban and rural -- has long
been of importance in the Treasury's financing programs.
With the development of the War Savings campaign, the
publishers and editors and reporters and artists and
carrier boys have joined in with a superb will to tell
the story of the War Bonds and Stamps and to sell them
as well.
Last month I invited to the Treasury leaders of
the newspaper industry who were asked for suggestions
in the conduct of the Second War Loan drive. I was de-
lighted by the spontaneity with which they recognized
our problems and offered even further cooperation. As
Regraded Unclassified
- 3 -
a result, they organized themselves into an Allied News-
paper Council to work shoulder to shoulder with us in
this gigantic undertaking. In addition to the constant
advisory aid of the members of the Council, they have
made available to us the full-time services of several
of their most talented colleagues.
So painstaking are the preparations for participa-
tion by this group that I know that no individual who
reads their publications will be unaware of the purposes
of our campaign or of the securities that are being
offered. On behalf of the Treasury, I am happy to make
public acknowledgement **** in advanue of the valuable
support being provided to us by the nation's press.
-o00-
Regraded Unclassified
E2
INTERDEPARTMENTAL WAR SAVINGS BOND COMMITTEE
WASHINGTON
AFFICE OF CHAIRMAN
THEASURY DEPARTMENT
April 9, 1943
The Honorable
The Secretary of the Treasury
My denr Mr. Secretary:
In connection with my assignment as Acting
Chairman of the Interdepartmental War Savings Bond
Committee I have, from time to time, made use of the ser-
vices of Mr. F. A. Birgfald, Chief Clerk of the Treasury
Department. Mr. Birgfeld has been particularly helpful
in addressing groups of employees and War Bond workers.
At the present time I am broadening the scope of the
Committee's activities to include the field service of
the various Government departments and agencies.
If it meets with your approval I would like to
make use of Mr. Birgfeld's talents as a speaker to address
employee groups occasionally in Washington and in some of
the nearby cities in which there are concentrations of
Government employees. I feel that Mr. Birgfeld's services
in this connection will be productive of very good results.
Very truly yours,
E. F. Bartelt
Acting Chairman
Honorable Henry Morgenthau
Secretary of the Treasury
Washington, D. C.
POP VICTORY
BUY
CVITED
STATES
WAR
BONDS
AND
STAMPS
Regraded Unclassified
63
THE WHITE HOUSE
WASHINGTON
April 7, 19/3
My dear Mr. Secretary:
I am pleased to learn that the Treasury Department
Committee on Intergovermental Fiscal Relations has
completed its report and that you have made it public.
It occurs to me that the recommendations might appro-
priately be discussed by you with the Joint Federal-
State-Local Committee on Fiscal Policies and Practices,
of which you are a member.
Sincerely yours,
Franchton
The Honorable
The Secretary of the Treasury
Regraded Unclassified
84
4/9/43
INCOME AND ENCESS PROFITS TAXES
For MARCH 1943
AS COMPARED WITH MARCH 1942
BY
FEDERAL RESERVE DISTRICTS
March 1943
March 1942
BOSTON
=
347,839,896.92
$
236,471,789.09
YORK
1,181,639,059.13
799,305,521.98
PHILADELPHIA
373,729,792.94
220,838,221.35
CLEVELAND.
544,729,375.92
349,999,089.98
RICHIOND
269,942,052.30
181,050,975.16
ATLANTA
193,910,994.63
126,261,363.11
CHICAGO
862,981,907.54
604,170,493.56
ST. LOUIS
133,770,821.61
79,381,720.31
TIMIRAPOLIS
102,604,449.63
43,456,563.93
KUNSAS CITY.
167,482,001.14
85,785,837.25
DALLAS
116,352,065.80
78,067,411.92
SAX FRANCISCO.
382,513,980.74
235,900,616.18
TOTAL, FEDERAL RESERVE BANKSS
4,677,496,398.30
$ 3,040,689,603.82
territory (F HAWAII.
*
4,094,029.12
3,039,554.84
GRAND TOTAL
3 4,681,590,427.42
$ 3,043,729,158.66
Revised - final
# Reports March 15, 16, 17, etc. not yet received
Regraded Unclassified
85
April 2, 1943
Mr. Sullivan reported that Mr. Ruml called
at the Collector's Office and admitted that he was
broke and could not pay the balance due on his
1941 income tax. The Collector's Office told
him that the warrant was out and that, therefore,
they would have to put a levy on his property.
He agreed to pay the amount on the 15th of April
with interest.
He told the Collector's Office that he was
surprised that they had discovered these back taxes
and that he had hoped that they would not discover
it for several months and by that time he had hoped
to have the money to pay it. He further stated
that he thought that we were very tough on him and
that the next time he saw his friend, John Sullivan,
he would tell him SO. Mr. Sullivan not only has
never met Mr. Ruml, but he has never seen him.
Regraded Unclassified
4/9/43
66
Mr. Schwarz reported to Secy yesterday that
White and lawyers are still debating whether
to forget about this article or to answer
it.
Memo from Dr. White to Schwarz trans-
mitted by Schwarz' memo of 4/9
finested. sery sand forget.
Regraded Unclassified
April 5,
1943
Chic Schwarz
Secretary Morgenthau
I wish you would look at the third column on
page 24 of Time Magazine, April 5 issue. It says,
"Before the U. 9. Treasury finally awoke and forbade
such speculation, several huge fortunes were amassed
by this trading in invasion dollars." I think that
this is wholly inaccurate. I wish you would ask Harry
White about it, and see what kind of an answer we can
get. Then I would like to decide after you show it to
me what we should do about it.
Regraded Unclassified
67-A
Life Insurance Coordinating Committee
51 Madison Avenue
Clairmant
Executive Committee
Descript L. Harrison
New York, N.Y.
Franklin D'Olier
George L Harrtson
Date Adams
William H. Andrews, Jr.
April 9, 1943.
Leroy A. Lincoln
Gerard S. Nollen
Pasrick A. Collins
D'Olier
John A. Witherspoon
W. T. Cirant
Lenoy A. Lincoln
James Lee Loomis
A.). McAndless
Gerard 5. Nollen
R.B. Richardson
Grant Tegan
Sestom T. Whatley
john A. Witherspoon
Dear Mr. Secretary:
I want to thank you for your letter of April 1
giving me your views about the newspaper advertising campaign
which the life insurance companies are considering for the
purpose of further educating the public about the practical
steps which they may take in the over-all effort to check
inflation.
The whole matter was considered at some length
yesterday at a meeting of the Life Insurance Coordinating
Committee. Its members were most enthusiastic about the
possibilities of the program. They left with the Executive
Committee the problem of endeavoring to raise the necessary
funds. This we shall try to do as soon as possible. I shall
be glad to advise you as we progress.
I hope you will know that I very much appreciate
your letter.
Sincerely yours,
Teap
Hon. Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D. C.
APP -
Regraded Unclassified
58
MEMORANDUM FOR THE SECRETARY.
April 9, 1943.
Mail Report
Mail receipts for the week ending April 9 took
& strong upward surge, with several new types of
subject matter appearing, and 8. great deal more feel-
ing, both pro and con, on the part of correspondents.
The first outburst of letters followed Congressional
defeat of all proposed tax plans, and the second
followed release of news about the International
Stabilization Fund.
It is noteworthy that when a radio broadcaster or
newspaper columnist criticizes the Secretary, or the
Treasury, in a dispassionate and intelligent way, mail
may be sharply critical, but is also restrained in
tone. However, when such criticism is bitter and
personal, the mail follows suit, ranging from scolding
letters to actually virulent ones, the latter usually
anonymous. This occurred as 8. result of the Fulton
Lewis, Jr., broadcast April 1. Many of the signed com-
munications were nagging and nasty, and the frequency
with which the same words were used showed that they
were definitely prompted by this particular broadcast.
However, only 12 writers actually mentioned Lewis, one
sending & letter of reproof that had been addressed to
him. There were, in addition, about 75 letters strongly
disapproving the present tax policy of the Treasury
Department. One-third of these particularly criticized
the much publicized statement of Mr. Paul, "Well, we
beat Ruml". Others spoke of the fact that the Secretary
was quoted as saying he was happy over the defeat of
the Ruml Plan, and sent newspaper clippings commenting
unfavorably on this. From those who were exceedingly
critical there were over 100 requests for a pay-as-you-
go plan, Ruml's receiving specific endorsement in about
half of these. There were only 18 letters condemning
forgiveness of taxes. Five local Unions (CIO) sent
resolutions along the lines of earlier mail.
Regraded Unclassified
69
- 2 -
Memorandum for the Secretary.
April 9, 1943
Disappointment at Congressional failure to approve
a pay-as-you-go plan was reflected by a number of sug-
gestions for alternatives. These particularly favor the
sales tax or a gross income tax. À few correspondents
enclosed copies of an editorial, "The Mute But Forgotten
Class", descriptive, of course, of the unorganized, white-
collar workers. There were 50 or 60 miscellaneous com-
munications containing ideas or inquiries in regard to
taxes.
Immediately upon publication of news about the Inter-
national Stabilization Fund, requests for copies of the
text of the plan began to arrive. Within a day after
its release 30 letters of comment, mostly favorable, were
received, while Kaltenborn's radio invitation to the
public to suggest names for the proposed currency brought
in 31 suggestions. Among many serious ones was the
following ironic comment: "Should not Mr. Morgenthau's
new synthetic money more properly be called 'Bunitas'
and be placed under the control of the rubber czar, Mr.
Jeffers?"
Although less exciting than the rest of the mail,
that concerning Bonds outweighed all other receipts
combined. Requests for Bond music, inquiries as to
correct procedure and suggestions for sales promotion
ran into the hundreds. Many were prompted, of course,
by news of the second War Loan drive. Exclusive of those
who were disgruntled over tax action and predicted
failure of the campaign, mail concerning this drive
continues to be most cooperative. However, from radio
stations, newspapers, etc., have come several urgent
pleas for advertising material not yet delivered. There
was a small flurry of protest over the news article
headed, "Savings Cut Urged to Buy War Bonds". A number
of letters from newspapers inquired about the Bankhead
Bill for Government-paid advertising, many smaller
publications feeling they would not receive a fair share
of any al lotment.
Regraded Unclassified
70
- 3 -
Memorandum for the Secretary.
April 9, 1943
Bonds submitted to the Secretary for cashing rose
to 63 this week, 11 from Patchogue, New York, and 14
from Wurtland, Kentucky. Complaints also took an upward
turn with 70 letters, of which 60 dealt with war Depart-
ment cases. A number of these were forwarded by Senators
or Congressmen, several of whom commented on the increas-
ing complaints crossing their own desks.
Along with favorable acknowledgments of the Report
of the Committee on Interdepartmental Fiscal Relations
came a number of requests for additional copies.
Inflation has again been discussed frequently by
correspondents who suggest various methods of control.
Regraded Unclassified
71
General Comments
J. D. Davis, Cashier, Love County National Bank, Marietta,
Okla. # I think your position is exactly right, and
I can see no reason for banks or other lending agencies
to be raising so much fuss about the R.A.C.C. It appears
that the banks in general are fighting the Farm Security,
the P.C.A., and the R.A.C.C. I doubt if any of them
know just why they are waging this fight, except that
they have noticed articles where other bankers are oppos-
ing these organizations. We are in close touch here
with the Farm Security and with the P.C.A. and none of
these organizations so far have been any competition to
us. # # * We have been cooperating with the P.C.A. In
fact, we have been taking applications for them. This
was very desirable and a number of banks sought our co-
operation when the R.A.C.C W&S operating before, and
also after it was taken over or replaced by the P.C.A.
They all had loans that they wanted to get off their
books. Not 50 much because they thought the loan was
bad, but because it had been running so long, renewing
from year to year, and they wanted to clean their lia-
bility ledger sheets. # * There may not come the time
again when they will be doing the same thing, but we,
I believe, can figure that it might come. Almost all of
the P.C.A. customers come to us first before they borrow
from the P.C.A., usually wanting a short term loan until
they can get their plans made for the year, then borrow
and pay us off, and it is not bad business for us. #
I think at this time when production is so badly needed,
there is B. great need of the R. A. C. C., and that it
should be used to the fullest extent. $8 % # We have a
good many men in this county who have excellent facil-
ities for taking care of livestock but have always been
held down for the lack of security, and have never been
given a chance to see whether they could really put a
production over on their farms. I would like to see
them have that chance, and no time is better than now.
* # I am glad to see you and a number of others looking
at this matter as you do.
Regraded Unclassified
72
- 2 -
Mrs. E. G. Morrell, Titusville, N.J. # # # Every year
sround the first of March my husband's employer pays
a bonus to some employees on such items 8.5 increase in
sales of certain items, savings in operation, etc.,
which the men earn during the previous year. They
depend on the bonus for the payment of items which can-
not be met by their regular salary, such as taxes, doctor
bills, repair bills, etc. This year we fully expected
to pay all of these bills on March 1, as usual, but no
bonus came through. We waited and waited and waited.
Creditors became impatient, threatening our credit
rating. * # 49 Upon inquiry, I found that Borden Company,
in bending over backward to keep within all of the many
Government regulations, submitted the employees' bonus
to one of the Government Boards, WLB, or some such --
and they have not as yet released it. we have bought
Bonds, but unless we get our bonus within the next two
weeks, I shall have to cash them to pay these bills.
We borrowed the first installment of our income tax, in
order to pay that. We find it impossible to Save enough
from our regular income to pay such bills, more and more
of our money must be spent for our family of five. I can
see no reason for the Government Board's holding the
bonus back for our income is much less this year than
on the year previous. Our income did not go up when the
war began -- it went down instead.
Arthur Stein, Assistant to Secretary-Treasurer, United
Federal Workers of America, Washington, D. C. I am
writing to you in connection with the case of Walter
Blinstrub, an employee who has been employed in the
Bureau of the Public Debt in Chicago, and has recently
received notice of termination. # # * In view of the
strong possibility that Mr. B's. termination is B. direct
result of Union activity on his part, we requested that
a fair hearing be granted Mr. Blinstrub with a presenta-
tion of the charges against him, so that he may be given
an opportunity to refute them. Personnel refused either
a hearing or a detailed statement of charges, and took
refuge in the fact that no such procedure is required
by Civil Service procedures. # # We request an interview
Regraded Unclassified
73
- 3 -
with you at your convenience in order to appeal this
decision. The Union began in January B. series of
negotiations with the personnel officer in Chicago
around the question of improving the efficiency and
morale of the Chicago office of the Bureau of the
Public Debt. The negotiations were conducted for over
two months in a spirit of cooperation and mutual con-
fidence. Certain of the Union's proposals involved
recommendations with respect to changes in the super-
visory structure, based on the strong conviction that
inadequate supervision was a key bottleneck to produc-
tion. This also involved a charge that a certain
supervisor was unfit to perform the functions of her
office. The personnel officer apparently accepted
these proposals in good faith, but in order to assist
his investigation, he requested the Union to supply him
with signed affidavits from employees of the section,
promising that the signers would be kept free from
reprisals. # # # Immediately after the submission of
this evidence by the Union, B. number of Union members
and other employees were called into 8 private session
individually, and statements adverse to Mr. B. were
solicited from them. Mr. B's. dismissal followed im-
mediately. It is interesting to note that Mr. Blin-
strub's work until the time of his dismissal had been
of progressively greater responsibility and at no time
had any suggestion been made to him that his work or
personality were in any way unsatisfactory. ***
(Letter referred to Mr. Thompson.)
Anonymous - Chicago, Ill. We have been trying to get
a voucher through your office for $10,000 for 90 days.
It is for payment for a large unit used by the Army.
Your gang has had the use of this unit now for that
period. We have written you - we have wired you - the
results are like water on 8. duck. When people ask you
to wait for the payment of their taxes, you tell them
$10,000 and ten years in jail. Possibly if the election
was in prospect and that "Bird" in the White House was
running, there would be no delay in matters of this
kind. % # "
Regraded Unclassified
74
- 4 -
Alden A. Potter, Bethesda, Md. As 8 very much in-
terested citizen of the United States of America
I beg to protest most earnestly against the practice
of not letting the public in on every phase of the
discussions regarding the proposals for post-war
financial arrangements. To plead that we must win the
peace by secret negotiations and discussions before
the war is over, so that the arrangements are presented
to the people as & fait accompli when the peace treaty
is finally negotiated, is as indefensible as was the
trick of assuring this nation before the end of World
War I that there was no secret diplomacy. Or is it
supposed to carry some absolution from the sin of
secrecy to confess it openly? It is silly to think
that the Treasury officials are capable of shaping a
safe and sound policy in the proper interest of this
nation without plenty of public criticism and plenty
of time for it to be developed. It is bad enough to
attempt secrecy in discussions of food supplies, but
in monetary matters the existing confusion of ideas
among the "experts" who cannot be said to agree on any
fundamentals whatever, makes public scrutiny imperative.
Joseph Warner, Goshen, Mass. All praise is due for
efforts made now to relieve for the future those economic
stresses that tend to make for war. But before Uncle Sam
passes over five billions to an international currency
stabilization agency, do you suppose he could manage to
pay my wife for two tires and a tube delivered to his
agent on October 17 of last year on his covenant to
compensate her in cash? * * # Fortunately, it matters
very little to us whether we ever get the pittance for
this rubber. It matters vastly to us and to all citizens
whether we can feel assurance that Uncle Sam will honor
his covenants, either in the matter of rubber or in the
matter of money loaned him on his Bonds. Without national
honor, we shall not have international honor; and without
international honor, no matter what devices we employ,
we shall not have peace.
Regraded Unclassified
75
- 5 -
Favorable Comments on Bonds
Sergeant Henri Bendel, Hq. Co. D.E.M.L. Sec., U.S.
Army, Camp Lee, Va. + # # The payroll deduction plan
in the Army is good, but I notice oftentimes men would
like to buy Bonds with spare cash, but here at Camp
Lee, and I imagine posts all over are the same, or
similar, one can only buy Bonds at the Post or Finance
Office. Why couldn't each Company or Battalion have
an officer delegated for the cash sale and immediate
delivery of Bonds -- No Delay! This idea would, of
course, be additional to monthly deductions. In a
large Camp not more than 5% of the men are near either
the Post or Finance Office. Ease of purchasing tends
toward greater sales. In addition to increased Bond
sales, the soldiers or sailors, if the idea is a good
one, will be thankful for a convenient place to invest
money they would otherwise dispose of foolishly. ***
Pfc. Harold Stearns, Somewhere in North Africa. I am
acknowledging receipt of" your letter of February 25.
I was very glad to hear of some word of those Bonds.
I hope that they are delivered to my St. Paul home so
my mother won't have to worry about them. I know that
she is watching the mail every day for those Bonds.
Thanks very much.
Regraded Unclassified
76
- e -
Unfavorable Comments on Bonds
David Redwing, Navy Supply Depot, Oakland, Calif.
I was working at the John T. Knight Camp, Army Base
in Oakland, Calif., last year. I had paid for 8. $25
War Bond on the 10% plan. I never did get it. They
refuse to get it for me. I paid for it on December 9,
1942. I thought by now I should have it. I asked
about it two or three times. The last time they said,
"What would B. big, ignorant Indian like you do with a
Bond if you had it?" I told them I had 8. sick wife who
could look at it if nothing else. I wonder if you would
speak a word for me about getting this Bond -- or who
should I write to? I write to you because I thought you
would be the best man to write to. I am now working for
the Navy Base at Oakland, California.
Frederick Oscar Reid, R.R. #1, Hartington, Ontario.
In regards to war Bonds. which I purchased and sent to
the Treasury Department for redemption -- what about
them? I paid hard-earned cash for them and when I
needed the money I thought I could get it from them.
I had them takencare of the best I knew how, and your
Department refused to cash them that way, sending me
forms to be filled out, which W8.5 done as nearly as
I could possibly do so, and what now? Well, I haven't
heard any more -- can't get satisfaction any way. The
form is either in the hands of the Treasury Department
or the U. S. Consul at Toronto. Which, I do not know.
What I do know is that I don't seem to get anywhere
regarding same. What is this -- robbery or a run-around?
I don't like your way of doing business.
Warren V. Miller, Attorney, New Orleans, La. This is
a complaint about War Bonds and U. S. Treasury Notes
that is so serious that I know of no one else with whom
the subject should be discussed. Unless corrected, it
is going to result in the loss of thousands and thousands
of dollars of sales.
I
was the organizer of the
Regraded Unclassified
77
- 7 -
Council of Civic Club Presidents of New Orleans, which
put on the million dollar War Bond Breakfast, selling
$4,000,000.00 of Bonds. # % The same organization has
proposed to put on a similar proposition in May, but
I shall have to advise them that I, for one, will not,
under the present conditions, be willing to "gyp" the
Louisiana public, and have mything further to do with
Bond sales. * # # These complaints are two in kind and
I will give you specific instances rather than abstract
generalities. (1) A client, Mrs. Julie Strauss, died
in the City of New Orleans, without will, owning a U.S.
Defense Bond, $25.00 denomination. We cannot cash this
Bond without either violating the law and subjecting
ourselves to a fine up to $10,000.00, or by expending
from six to ten times the value of the Bond to cash it.
The Federal Reserve Bank will only cash Bonds by an
Administrator, or else by having all of the heirs of
the decedent present in person. The appointment of an
Administrator in Louisiana is unnecessary when the
decedent leaves no debts, as happened in this instance,
but the succession is handled by a short procedure plac-
ing the heirs in possession. The appointment of en
Administrator would cost $150.00 or more. # % # The
heirs live in Colorado, California and New Orleans, and
it would take $1,000.00 to assemble them. Every other
matter in this succession was handled by Power of Attorney,
which was referred by the Federal Reserve Bank. Transfer
of your Bonds is forbidden by law. In spite of this, the
Federal Reserve Bank did state that they would not accept
H. transfer by the heirs, but would allow an assignment.
In law, an assignment is merely a form of transfer, and
same is forbidden with penalties, and neither my clients
nor myself are willing, for the sum of $25.00, to incur
Federal penalties. As a result, the Bond has practically
been preempted to the U. S. Treasury, and cannot be
cashed. Remember, that every other effect of this suc-
cession has been adjusted, paid off or transferred. *
There are thousands of this class of succession in
Louisiana every year, and if the news ever gets around
among the Legal Fraternity, you can bet your bottom
dollar that there is going to be a thousand people
arguing to their clientele against the purchase of these
Bonds. I would not again let 8. client purchase B. Bond
until these conditions complained of herein are corrected.
(2) The second complaint is about U. S. Treasury Notes
Regraded Unclassified
78
- 8 -
and use of them in paying income taxes in the State of
Louisiana. Hundreds of our citizens have bought U. S.
Treasury Notes, expecting to use these Notes for the
payment of their income taxes. Louisiana is a community
law State and by some nitwit quirk we cannot pay the
community tax with these Bonds, the Collector of Internal
Revenue claiming that your ruling is that since the Bonds
are made payable to the man of the community, the wife's
income tax cannot be covered by them, overlooking the
fact that in Louisiana, property in the husband's name
belongs to the community and he is merely Trustee for the
community during its existence, and that, therefore,
these Bonds belong as much to the wife as they do to the
husband. This means that the interest on these Bonds is
almost totally lost for when turned down by the Collector
of Internal Revenue, the party must pay cash, and then in
turn, the holder of these Bonds has to go to the Federal
Reserve Bank and cash them at a lower rate. Today I have
talked with four different people in this position, and
each and every one of them is firmly convinced that this
regulation was made for the purpose of killing the in-
terest provision. 4k # # The public- is already distrustful
of the Government, having suffered severely at the hands
of the various Bureaus, and they feel that further imposi-
tions are being placed upon them in an attempt to get
their money under false pretenses. The Government has
asked for the public's cooperation, but the Treasury
Department is giving no cooperation to the public. ***
John J. Scully, Secretary-Treasurer, National Organiza-
tion Masters, Mates and Pilots of America, N.Y.C. It has
been brought to our notice that the banking interests are
contemplating an intensive campaign for the joint pro-
motion of War Savings Bond and Victory Bond securities.
Rumors are also being circulated that the present War
Savings Bonds would be changed to a similar status as
was the Liberty Bonds in World. War #1. The officers of
the organization were very responsive to promoting the
necessity of the wholehearted support of the present War
Savings Bonds, with the result that 8. very few, if any,
of our members have not participated and bought Bonds.
Our locals too, have bought Bonds up to the limit of their
Regraded Unclassified
79
- 9 -
treasuries.
#
We have been requested to write for
an official opinion from you as to whether or not the
present value of the War Savings Bonds would in any way
be changed if our membership participated in this new
drive? They are concerned about whether or not new Bonds,
at any time while they are holding same, would be cut
from their full value. They are also suspicious of the
banking interest to the extent that they believe the
banking interests may be interested in using these Bonds
for 8. commercial reason and trade with same at a profit.
Oscar S. Blinn, Attorney and Counsellor at Law, N.Y.C.
Am I not fair in submitting that if Uncle Sam is asking
millions of poor people to take money out of their
savings bank accounts and sell corporate bonds in order
to invest the money in Nar Savings Bond, he should at
least extend to them the same cooperation, courtesy, and
facilities which any private bank or the transfer-agent
of any private corporation would extend? # * About two
years ago, I had occasion to write you about the pre-
posterous rule of the Treasury Department, requiring
that no Government Bonds could be transferred by an
estate to & legatee in kind without a court order. How-
ever, probate procedure in other states may be, any
lawyer in New York State knows that there is no procedure
in our Surrogate's Court Act for the making of such an
order except as it is a part of 8. final decree in an
accounting proceeding. # In reply to my letter, you
wrote me to the effect that the rule had been abrogated
and that the Treasury Department was now accepting, in
lieu of a court order, the same kind of proof which any
private corporation would accept.
"
#
We
have
now
run
into 8. new situation of the same general type in connection
with the affairs of the above decedent. She left a few
$25 Series D War Savings Bonds, registered in her own
name, but payable on death to two infant nieces.
Today we presented the proper forms, the Bonds, and a
death certificate to the Federal Reserve Bank, only to
learn that the bank was terrifically shocked and claimed
that our papers were entirely defective because the Bonds
were registered in the name of "Carrie Howd" while the
death certificate (like all death certificates) gave the
Regraded Unclassified
80
- 10 -
full name 8.5 "Carrie Wolven Howd". It is unnecessary
to remind you, as counsel for your Department will
readily agree, that middle names are entirely super-
fluous in the eye of the law as the law requires only
& given or Christian name and 8 family name. We have
had many occasions to present similar death certificates
to savings banks and private corporations in connection
with transfers of money and securities, and have never
yet had our papers thrown back upon us. 4b # It is
going to be extremely onerous to secure supporting affi-
davits such as the Federal Reserve Bank is now demand-
ing.
# # # Just 50 long as the Treasury Department
insists upon putting investors to all sorts of trouble
which private corporations would not require, just so
long shall we hesitate to advise clients to sacrifice
their securities in order to buy War Savings Bonds.
The whole attitude of the Treasury Department upon any
kind of a re-issue or transfer of Bonds seems to be to
throw as many obstacles into the way of the investor as
possible. Is it not time that the Department abandoned
that attitude and gave at least as good cooperation as
private corporations will furnish in similar circumstances?
Hon. Hamilton Fish, Member of Committee on Rules, House
of Representatives. I have received numerous complaints
such as the enclosed from whitman S. Wick, regarding the
nondelivery of War Bonds purchased by Federal employees
through deductions from their pay, some running back
as far 85 eight and nine months. In one case the War
Savings Staff actually requested that 8 Money Order in
the amount of $1.25 be sent to them before they would
even give any information as to the status of such a
purchase. Certainly it should be evident that if such
8 practice is continued, and delivery of Bonds purchased
continues to be held up by the Treasury, people will dis-
continue permitting deductions from the pay for such
purpose, and with some justification. I am confident
that you will want to do everything possible to correct
this situation and will appreciate it if you will advise
me as to what can be done about it.
#
Regraded Unclassified
81
- 11 -
H. H. Riddle, Cleveland, Ohio. I understand you ap-
preciate the views of the ordinary man. You are about
to start a campaign to sell War Bonds. I wish to state
that many of my friends and myself will not purchase any
Bonds for the following reasons. The Income Tax problem
has become 50 complicated one does not know what to
expect, therefore the only thing to do is to save money
in order to pay the tax when due. We object to paying
such high taxes in order to allow our Government to pay
exorbitant prices for the purchases of material. If our
boys are prevented from defending themselves or winning
battles on account of the lack of ammunition, planes,
etc., it will have to be charged to our Government. We
are fast making Republicans out of good Democrats.
Alexander Merdach, N.Y.C. As a worker in the Language
Section, Military Intelligence Division, U. S. war Dept.,
formerly at 17 Battery Place, New York City, I have had
deductions made from my salary beginning June 15, 1942.
These deductions amount to $76.25. I was under the im-
pression that this money was to be applied to the purchase
of War Bonds. I regret to say that this impression is
fast losing its grip on reality. To date, the Chief
Finance Officer of the Bond Division has not only failed
to send me any Bonds, but he has even failed to answer
our telegram of last week requesting information as to
the fate of the money that has been collected from us.
# * Were this a matter that concerns me only, I should
suppose that it is just a minor slip of Departmental pro-
cedure, but it happens that the same dilemma confronts
all of my co-workers who too have had deductions from
their wages, and who too have as little to show for it.
Regraded Unclassified
82
- 12 -
Favorable Comments on Taxation
George E. Mainardy, Hollis, N.Y. # # We all understand
and admit the necessity of an "all-out" current income
tax payment. We all, also, admit that you are qualified
to formulate a plan to solve this serious problem. How-
ever, it is exasperating to note the lack of definite
solution and cooperative action, and passing the matter
back and forth for further consideration and action.
Such procedure makes for delay and at a time when delays
are vitally dangerous and harmful to the best interests
of all American people. (Outlines plan.) * # * We all
must realize the seriousness of the existing situation
and the necessity of giving what is needed now, rather
than having an enemy take all from us later, if we fail
in our cooperation and support.
Michael Addison, N.Y.C. I listened to a commentator
last evening, Fulton Lewis, Jr. His remarks about you
were definitely unfair. He spoke of a Poll in which 95%
of the people approved of 8. plan to excuse them from
paying 8 year's or part of 8. year's taxes. It is sur-
prising that the percentage was not recorded at 99%.
I went you to know that I disapproved of the insinuations
in the remarks of the above-mentioned commentator.
Copy of letter to Fulton Lewis, Jr., Washington, D. C.,
from L. C. Miller, Los Angeles, Calif. Your blast of
condemnation today, directed at our Secretary of the
Treasury, was very unjust, not the voice of a good loser,
for example, Wendell Willkie in 1940. The Ruml pay-as-
you-go plan had its say, time, and a fair count, and was
defeated. Mr. Morgenthau did not vote, neither did he
tour all over the country speech-making as did the Ruml
Wall Street fox, cleverly attempting to sell his gold
brick to Uncle Sam. * * # And now as for your Gallup Poll
check on the Ruml tax plan, as you say, it adds up to 95%
in fevor of B. pay-as-you-go plan. All right my boy. Now
I will wager you the White House against your Maryland
Regraded Unclassified
83
- 13 -
farm, and this is very good odds, that if you strip
the veil off this Ruml tax plan and bare the behind-
the-curtain scheme to the full light of day* # *then
give these facts and figures, that this same 95% will
reverse their preference. #
+
Lewis Penwell, Collector, District of Montana, Helena,
Mont. The entire force of this Collection District is
grateful to you for your recent telegram commending it
for the manner in which it handled the business during
the income tax filing period. During the latter part
of the period, every one in. the main office worked long
evenings, and all of the last Sunday. There were no
complaints, every one did his part cheerfully, and all
are thankful to you for your graceful recognition of
our small contribution to the general good.
Fred Olsson, Art Shop, Cambridge, Mass. For common sense
reasoning, do all you can to kill the Ruml Plan. It is
unsound economically, and from every business standpoint.
I wonder if Macy would be willing to wipe off all accounts
due it for merchandise purchased in 1942, provided that
future purchases made in 1943 would be paid for in cash.
Would not that be a dream for all debtors? In my opinion
the plan is asinine and crazy, and thoroughly unsound.
Kill it!
Regraded Unclassified
84
- 14 -
Unfavorable Comments on Taxation
Oliver Johnson (A Low-Salaried Worker), Manhasset, N.Y.
Congratulations upon your income tax victory! You have
licked Mr. Ruml, and I suppose you and Mr. Doughton
feel fine about it. At the same time you have also
licked most of the individual income taxpayers 8.5
these people are in favor of the Ruml Plan. The partisan
resistence to the Ruml Plan as reflected by the House
vote is disgusting and stupid. That was due to the
Administration's obstinate pressure which in this case
means you. e 4:- You want unity and cooperation from us --
how about our getting some from you?
Henry Erdos, York, Pa. Now that the pay-as-you-earn
tax plans have been scrapped by the House of Represen-
tetives, don't you think this would be the proper time
for you to really get busy with the House Ways and
Means Committee and work out B. feasible pay-as-you-earn
plan? # * * I am manager of E. hosiery mill, employing
about 400 people, and I can testify to the fact that
the big majority of our employees do not have money
saved for taxes. In fact, a lot of them borrowed money
and cashed in War Bonds to pay their March 15 income
tax. I respectfully request that you give this your
attention so that deductions at the source could start
July 1.
L. H. Bieler, Brooklyn Park, Maryland. Don't you think
you owe the American people an apology for your remark
concerning the pay-as-you-go plan? I should like to
remind you that "we the people" pay the taxes as well
as your salary, and "we the people" want that system
adopted, so don't be so "pleased" in the future when a
few people in Washington choose to disregard the wishes
of the voters, who, at the next election won't forget
these certain politicians who appoint people like you
to office.
C. W. Guinzburg, Yonkers, N.Y. (Encloses Times Editorial.)
"
# * Our family have always voted Democratic, but Boy,
Oh: Boy! did that vote against the Ruml Plan make us
eager to vote Republican from now on.
Regraded Unclassified
85
- 15 -
Miss Bertha E. Irons, New Bedford, Mass. I am writing
to ask you to change your mind about the tax plan.
The current saying is that the only reason you are
against it is because you did not think of it. If
you were a Japanese, I would know you could not change
your mind without losing face, but we Americans are not
bound by such rules. I can understand Franklin D.
Roosevelt not having much conception of B. pay-as-you-go
tax plan, but you must know a few poor folks - not
breadline poor, but thrifty poor - who have to worry 8.
little over paying their bills, but who take pride in
keeping them paid. We taxpayers are not trying to have
any taxes forgiven, we are merely hoping to have the
base of taxation changed from last year to the current
year. Congress has the power to determine the rate to
secure what funds are needed, so there will be no loss
of revenue to the Government. If a taxpayer can compute
and pay his tax on current income, he can end the year
paid to date. Recent Federal rulings make us keep our
store charge accounts paid to date, and we would like
to pay our taxes in the same way.
Jeannette Hammel, Akron, Ohio. I cannot understand why
the Treasury Department will not bend its efforts toward
reaching a compromise on pay-as-you-go legislation when
it is so obvious that such a system will have to be put
into effect if the Government ever hopes to collect.
I am incensed over the way this country is being run,
and I think it is time you politicians put the United
States on a sane economic basis instead of spending it
to bankruptcy 85 you are now doing. I am putting 10%
of my salary into War Bonds for the sake of our boys,
butnot because I have any faith in the present Govern-
ment.
Haynes L. Everest, West Hartford, Conn. Perhaps my
concepts of Government are all outmoded, but it has
been my belief that the Secretary of the Treasury, as
well 85 other Government officials are the paid employees
of the people. Unless I am wrong, is it not a fair
question to ask why you should express, as reported,
Regraded Unclassified
86
- 16 -
pleasure over the defeat of a measure which has seemingly
the support of 85 to 90% of the public? Your comments
will be appreciated.
R. Winthrop Nelson, West Hartford, Conn. May I say
that your remarks about being pleased over the defeat
of the wishes of the American people about the Ruml Plan
do not sit very well with many people. I happen to be
on the Victory Bond Committee and it is indeed hard to
put pep into a sales talk for Government Bonds when so
little concern is felt by our officials as to modern-
izing our tax laws. As it is now, everybody owes the
Treasury 8 year's taxes, and when a man dies or retires
on half-pay or his pension (if any) his estate or he
owes a year's taxes on the larger income he has been
receiving, ithout the means of paying it. People are
really remarkably willing to go the limit on taxes,
restrictions, etc., and I think it would be sporting
for you fellows to meet them half-way, and not take
this school teacher attitude.
***
Regraded Unclassified
REFER TO FILE No.
87
TREASURY DEPARTMENT
WASHINGTON, D.C.
OFFICE OF THE CHIEF
U.S. SECRET SERVICE
April 9, 1943
Memorandum for the Secretary
From: Chief, U. S. Secret Service
Supervising Agent Maloney today advises me
that Madame Chiang Kai-shek's doctor in New York
had been requested to reserve hospital accommodations
for her upon her arrival in New York City on April 14th,
but that the plans to enter the hospital have been
changed and the doctor advises Mr. Maloney that they
wish to secure a country estate within two hours ride
of New York City. When the estate is secured the
doctor is to notify Supervising Agent Maloney in order
that he may make a survey of it.
"7gm
FORVICTORY
BUY
UNITED
STATES
WAR
BONDS
AND
STAMPS
Regraded Unclassified
882
APR 9 1943
My dear Mr. President:
There is attached a report of Lend-Lease
purchases made by the Treasury Procurement Division
for the Soviet Government indicating the cargo
available for April.
Tonnage at the end of April will be 665,656
an increase of 40,084 tons over March. This increase
is chiefly attributable to the accumulation of equip-
ment under the special industry programs such as the
tire plant, electric power and oil refinery programs.
Yours sincerely,
(Signed) H. Mergenthan, Jr.
The President
The White House
Marked "Strictly Confidential"
By Mess. Sturgis 5:14 4/9/43
ABL:kb
(4-8-43)
Copy to: Major Gen. J. H. Burns,
President's Soviet Prot. Commit.
1901 Constitution Ave.,
(marked "Strictly Confidential")
Copies in Diary
Regraded Unclassified
89
TREASURT IEPARTMENT-U. S.S.R.
MATERIALS AVAILABLE FROM STORAGE AND PRODUCTION DURING APRIL 1943
PRIORITY CARGOES
SPECIFIED FOR
AVAILABLE
COMMODITY
APRIL 1943
STORAGE
PRODUCTION
BALANCE
STEEL BARS, SHEETS, STRIP,
PLATES, SHAPES. ETC.
10,830
210,146
24,616
223,932
TOOL AND DIE STEEL
2,195
2,316
5,792
5,913
RAILROAD RAILS, VIIREL SETS
AND ACCESSORIES
1,700
100,260
98,560
WIRE PRODUCTS
2,150
76,322
9,412
83,584
PIPE AND TUBING
2,000
122,942
2,172
123,114
TIN PLATE
7,923
7,923
COPPER AND ITS PRODUCTS
17,450
38,078
16,943
37,571
ZINC
3,400
853
3,500
953
ALUMINUM AND ITS PRODUCTS
2,000
2,400
400
MICKEL AND ITS PRODUCTS
350
13
460
123
FEHRO ALLOYS
3,400
4,401
1,100
2,101
CHEMICALS
3,441
2,030
5,471
MERCURY
31
31
INDUSTRIAL AND CONSTRUCTION
MACHINERY, MATERIAL,
ACCESSORIES AND PARTS
1,550
42,843
17,897
59,190
AUTOMOTIVE EQUIPMENT AND PARTS
70
70
TIRES AND TUBES
9,000
735
10,000
1,735
GRAPHITE - METAL ELECTRODES
20
1,168
1,890
3,038
RUBBER PRODUCTS
2,864
2,935
5,799
HAND AND MACHINE TOOLS
1,200
2,030
3,220
BALL AND ROLLER BRARINGS
160
133
500
463
PAPER AND PAPER PRODUCTS
2,070
300
2,370
MISCELLANROUS SUPPLIES AND
EQUIPMENT
250
345
95
56,455*
617,729
104,382
665,656
NOTE: *Priority Cargo represents only that tonnage with assured shipping space as of today.
As in previous months substantial other cargo will be shipped.
Regraded Unclassified
901
PARAPHRASE OF TELEGRAM RECEIVED
PROM:
AMEMBASSY, London
TO:
Secretary of State, Washington
DATED:
April 9, 1943, 7 p.m.
NUMBER: 2510
CASADY SENDS THE POLLOWING FOR THE SECRETARY OF THE
TREASURY
The British Ministry of Information in London 1s
mimeographing the American post-war currency proposal.
They are distributing it through our Treasury Attache's
office and the Office of War Information. Because of
the large demand and the necessity for re-stenciling,
the process of distribution is relatively slow.
Officials of the British Treasury wish to know whether
there is any objection to having H.M. Stationery Office
print the United States currency document for widespread
distribution to the public, the members of Parliament,
and so forth, as was done in the case of the State
Department's publication Peace and War and the Senate
document number 188 entitled Addresses and Messages of
Franklin D. Roosevelt on the Development of United States
Foreign Policy. Peace and war is still in demand, and it
is said that some 28,000 copies were sold. Sales to date
of
Regraded Unclassified
91
-2-
of Addresses and Messages are unavailable, although they are
believed to be large, and 40,000 copies were printed in the
original edition.
Reference is made to the last sentence of the Depart=
ment's message number 2161 of 1 p.m. April 7. Authoriza-
tion for printing to proceed has been granted with the
approval of Mr. Minant. Prior to final printing, proofs
are to be submitted to the Embassy.
WINANT
S:WDM
FS:MM
4 /10 43
Regraded Unclassified
Treasury Department
92
Division of Monetary Research
Date April 16, 194394
To:
Miss Chauncey
The Secretary might be interested
in glancing at this item from Ankara.
H.D.W.
MR. WHITE
Branch 2058 - Room 214-
Regraded Unclassified
93
C
o
Mrs White
P
Y
IM
PLAIN
Ankara
Dated April 9, 1943
Rec'd 9:54 p.m.
Secretary of State,
Washington.
680, ninth
Yesterday's VATAN declares that should United States
congress fail to renew reciprocal trade agreements act by
next June, United States would be obliged to resort to its
former isolationist policy and that should Congress override
President's veto on farm parity prices bill, general equilibrium
of life there would be upset. These two alarming possibilities,
editorial continues, give evidence of extent to which American
politics may affect world peace.
SON POSTA of seventh remarks that endeavors of American
Treasury Secretary to create stable international currency unit
imply that gold standard will again be universally adopted sooner
or later.
STEINHARDT
DD
Copy:bj:4-13-43
Regraded Unclassified
94
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
TO
Secretary Morgenthau
April 9, 1943
FROM Frances McCathran
CONTROVERSIAL ISSUES BEFORE CONGRESS
1, international Monetary Plan - Representative Ford took
exception on the floor of the House yesterday to remarks
made by Representative Smith of Ohio criticizing the
Treasury's plan for oost-war currency stabilization. Smith,
calling it "Mr. Morgenthau's secret plan to establish an
international stabilization fund" and a "clandistine move-
ment," said the proposal would threaten the "freedom and
sovereignty" of the Deople of this country. He then went
On to pose questions sounding like the tag-line on a grade B
ranio serial, such as: "Who wants to get control of our
gold hoard?", "Who are the real forces back of this sinister
scheme?", etc. Representative Ford yesterday vointed out,
however, that there could be nothing very secretive in a
olan submitted to Congressional committees and made public
by both press and radio all over the world. The fact that
it was withheld from the public until presented to the
Congressional committees was simply a matter of courtesy,
Ford observed. The principles of the olan are already
embodied, he added, in the tripartite agreement between
the United States, Britain, and France, and the results of
this were far from "sinister." The Treasury's proposal,
Ford continued, "which has a worthy and I might add, a
vital objective, the stabilization of international currencies,
i. erely a plan to apply to the world the mechanism used
in our tripartite stabilization plan, and thus avoid the
chaos that would be inevitable, in the absence of some plan,
in the post-war world. Later in the day Reoresentative
August H. Andresen served notice that he intended to intro-
duce a resolution in the next few days providing for the
creation of a Congressional committee to sit in on the
monetary conferences when they are held in Washington. Since
"Mr. Morgenthau felt it would be necessary to have addi-
tional legislative authority" in the hearings on the post-war
monetary plan, Andresen said he thought Congress should be
represented in the "international conference, not necessarily
to take part in the deliberations, but to get the viewpoint
and knowledge of secret agreements that are often made in
such conferences."
Regraded Unclassified
95
E. Tax: Pay-As-You-Go - Chances for action in the near future
on pay-as-you-go income tax legislation appear to have
reached another stalemate, despite House Democratic Leader
McCormack's statement yesterday that if a "reasonable
compromise" plan is presented by the Ways and Means Commit-
tee he will "see that it is brought un in the House at
once." Republican Leader Martin, however, while calling
for immediate action, announced that he was still firmly
behind the Ruml-Carlson Plan, although McCormack had observed
that "a reenactment of the Ruml fight by my Republican
friends would do no good." Meanwhile Representative Ander-
son's letter to Representative Doughton urging the revival
of plans for outting taxes on a current basis has been
signed by 65 Democrats. In it Anderson criticizes the
Treasury Department for what he calls its "arbitrary position"
and urges that "no more attention be paid" to its opinion.
Whether all these words are not "much ado about nothing"
remains to be seen, however, for the House Ways and Means
Committee, with a full program ahead of it, may decide to go
anead with hearings on the Guffey Coal Act and the Recipro-
cal Trade Agreements Act first.
Farm Issue - In hearings before the Senate Agriculture
Committee on the Pace Bill yesterday, Price Administrator
Brown again stirred un tempestuous criticism from farm bloc
Senators when he reiterated his approval of a government
subsidy program to encourage food oroduction in olace of
raising farm prices as provided in the Pace and Bankhead
Perity Bills. But Chairman Smith, declaring himself complete-
ly unsatisfied with OPA's explanation of their claim that
the Pace Bill would increase living cost more than 14 per
cent, disgustedly requested that the Committee "continue
this burlesque" on Monday. Meanwhile on the other side of
the Capitol, the Senate passed a bill providing $40,000,000
to create a new "land army"--principally of imported Mexi-
can workers--and sent it to conference to resolve differences
with a similar House measure.
Regraded Unclassified
DEPAKIMENT
TO BE TRANSMITTED
BRITISH MOST SECRES
e>
COPY NO.
13
V.S. SECRET
OPTIL No. 116
01
TREASURY
Information received.up to 7 A.M., 9th April, 1943.
1. REVAL
SECRET
Norwegian patrol vessel in overdue from patrol off NORWAY and must be
considered lost. One of H.M. Submarines between 24th end 30th March Bank r. 2,500 ton
wal-bound Linker off Morthern SICILY, attacked shipping in MILAZZO Horbour and annk
I schoonern and dom god tother north of the Strait of MESSINA.
', MILITARY
TUNISIA. To 6 P.E., 8th Army. It now appears that the 8th Army attrok
an the AKARIT position took the enery by surprise /init caught him with two Armoured
Divisions « Lready committed on the EL GUETTAR Front. During the afternoon 7th, 30th
Corps were in close pursuit of the enemy and 51st Division advancing astrido the Const
Hoad were 5 miles nouthwest of CEXHIRA by 6 p.m., our armoured forces protecting the
left flank fought an action during the fternoon 7 miles northwest of CEKHIRA, The
momy noon withdrew. Further west our troops had by the end of the day caught up
1th nn enemy protective screen running southeast from SEBKRET EL NODAL. Other forces
the clearing the AKARIT bettlefield and forming E firm bese in the bridgehend post or
but of 5,311 prisoners taken by the 3th Army on the 6th, only 98 were Gurman. During
the 8th, enumy withdrawal from the CEXHIRA-SESKRETEL NOUAL position continued and
there is considerable congestion of vehicles on road londing northwards. Our troope
or in pursuit and forward elements have reached the CEKHIRA Area end have crossed
the SFAX-GAFSA Road,
U.S. Sector. During the 7th, -mony forces in the southorn portion of the
sector made R. general withdrawnl, in crmoured force followed up and fought an ongage-
sunt with rearguards east of BIR ZELLOUDTA (Road Junction about 25 milos cast of EL
quettar). 2,000 prisonors were taken during the day. In Sector of southeast Algorian
Comonnd, French troops attacked enemy positions south of Djebel BERDA directly the
began to withdraw. They captured 50 prisoners and considerable material, in-
cluding 20 guns, with only a fuw casualties. They followed up the couny ruargunrds
boyond SIR OUM ALI but their advance was delayed by minos. They have established
contrat with United States forces on GAFSA-GABES Road.
First Army. On 7th, our infontry attacked betwoen H&JA and MEDJES EL BAB
on - front of 10 miles end gained all their objectives against strong enemy resistance.
High positions 5 to a miles north of OUED ZARGA were captured and 120 prisoners taken
during the morning. Further progress WAR made on the morning of the 8th and the ut-
thek continues in the PICHON-FONDOUE Area. British, United States and Frunch forces
are now advancing. The United States Forces southwest of FONDOUK nore hold up by
hadvy fire, otherwise according to the Intest report good progross in boing made.
General Haadquarters 9th Corps (Lioutanent noral Crocker) has arrived in lst Army
Area. lot Army now consisto of 5th and 9th United Kingdom Corpo and 19th French Corps.
Although early indications could by expected to be received, there are at present for
signs of an intention by unemy to evacunte. Jettium have been built in Gulfs of
and TUNIS which have not been used for supply purposes and which might by
intended for evacuation. There aro, however, no signs of concentration of light
craft which would use thom. Troops and supplies continue to be sont to TUNISIA.
3, AIR OPERATIONS
WESTERN FRONT. 8th/9th. Aircraft despatchod - DUISBURG 392 (21 missing
and 1 crashed); sea mining 27 (1 missing) Intruders 5. Over DUISBURG wonther was bed
1th thick cloud to above 20,000 foot end most aircraft bombed by navigational nids.
TUNISIA. 5th/6th. Wellingtons dropped 33 tone of bombs on TUNIS and
Virted a very largo fire. 6th. 76 escorted U.S. Bontons made 6 attacks on LA FAUCH-
NERIE airfield. 6th/7th. Wellingtons dropped 144 tons of high explosive on SFAX and
Whicles in the vicinity. 7th. 333 Bomber and fighter bomber sorties were flom
grinst vohicles withdrawing along the Coast Road in the SFAX area. Hurricano tank-
busters attacked 25 tanks proparing for EL counter attack at CEKHIRA. From incomplete
dotails st least two tanks were not on fire. 6 Hurricanes missing. In patrols over
the forward area many capuelties by Spitfires 4, 1, 2. Ours 1 missing.
SICILY. 22 U.S. Liberatoro bombod the train-forry terminus at MESSINA.
SICILIAN CHANNEL. 6th. U.B. Bombers attacked 3 large ships with four
socrt vessels; of these vous,ls 3 were sunk, ontogory unspecified. Enomy fighter
comunities 3, 5, 5.
Regraded Unclassified
April 10, 1943
9:30 a.m.
FINANCING
Present: Mr. Bell
Mr. Gaston
Mr. Buffington
Mr. Robbins
Mr. Graves
Mr. Gamble
Mr. Peabody
H.M.JR: I had nothing particular. I did want to hear
what Mr. Robbins is going to say at one-fifteen, in case
there is something I might not like about it.
I got the suggestion about the rehearsal.
MR. PEABODY: One o'clock, sir.
H.M.JR: I will be there at one.
I have been working on my speech since eight this
morning and I am in such a lousy mood over that speech
because the more I read it the more terrible it sounded to
me. In two paragraphs the word "people" appeared five
times. So I made a few changes, but it just - I don't
like it. 30 I don't want to be--
MR. ROBBINS: How long will you be, sir, do you know?
H.M.JR: If you divide the thing by a hundred and twenty
you will get whatever it is. I don't know how many words
it is.
MR. ROBBINS: Our thought on the organization of the
fourteen and a half minutes we have - after we left you
yesterday we went to my office, Mr. Gaston, and Peabody,
and Mager, and myself, and it seemed best for me to get
Regraded Unclassified
98
- 2 -
my stuff finished and then turn it over to you. Now,
according to the timing on these comments, it will take
about eight minutes. That was built to that number of
minutes because what you had - what was prepared for you -
was planned to take about four, I believe.
MR. GASTON: It will take at least five.
MR ROBBINS: Whatever it was - four or five. This
was built to fill in the gap and leave perhaps - well, at
least two minutes leeway at the end.
H.M.JR: On a speech like that that I read, I will
come within five seconds of hitting it right. I won't
vary - ten seconds at the most.
MR. ROBBINS: That would give us thirteen - 8
minute and a half to play with.
H.M.JR: "hat I did was I cut out maybe ten or fifteen
words this morning. There are a couple of words that are
unpronourceable.
But the sooner I get that speech out of my system and
the sooner I can get back to my Carnegie Hall speech, the
happier I will be, because it just throws me off on the
Carnegie Hall speech. It constantly throws me off. That
is what puts me in such a bad humor.
MR. GASTON: At this stage you don't want anybody else
to do anything more with that speech?
H.M. JR: No, I cut out some words and changed a few.
It is being retyped now.
MR. ROBBINS: I have done & good bit of chopping and
hacking with mine, so I am reading from the rough notes
to be retyped between now and one o'clock.
I would be preceded by an announcer, wouldn't I,
and then I would come on?
Regraded Unclassified
- 3 -
MR. PEABODY: Yes.
(Speech read by Mr. Robbins, copy attached.)
MR. ROBBINS: I can change that last and say, "And
now I would like to introduce to you our leader in this
great financial mobilization. I have the honor to present
Secretary Morgenthau.'
H.M.JR: would you like a few suggestions?
MR. RUBBINS: Sure.
H.M.JR: Don't call me the leader - translated in
German that means the Fuehrer. (Laughter)
MR. ROBBINS: That is B. good thought.
H.M.JR: If you want to be a little colloquial, call
me "the boss" or something like that.
MR. ROBBINS: Luch better.
H.M.JR: If you wanted, I mean, a little something on
the human side about me, or something in there just before
you go into that - humanize--
V. ROBBINS: have you any thought? Do you want me
to generate that myself?
H.M.JR: A little bit on me. That is such a cold
introduction.
MR. ROBBINS: I agree with you.
H.M.JR: Get a little warmth over about me to them.
MR. ROBBINS: I can refer to you perhaps as the real
sales manager of this campaign - the boss.
H.M.JR: I don't mean that, but a little humanizing,
if you can. Maybe Gaston could help you on that.
Did you mention Bell in the opening group?
Regraded Unclassified
100
- 4 -
MR. ROBBINS: No, I did not - a very definite over-
sight.
MR. BELL: I don't think you have to do that.
H.M.JR: Oh, yes - very much.
MR. BELL: He has enough names there now.
H.M.JR: Oh, no. Then there was one thing - when you
said you don't want to challenge their patriotism. It
leaves the impression, do we want to - I mean, raising the
issue. And then there is so much about patriotism.
MR. ROBBINS: I worried about that sentence and took
it out. It was in, and I read it. back in again this time.
H.M.JR: We don't want to challenge patriotism. It
sounds as though maybe we really do. I don't think this
thing should be based on patriotism.
MR. ROBBINS: Let's take that whole sentence out.
H.M.JR: I read somewhere the other day they were
painting RFD boxes yellow where the boys went back on the
farm. Did you see that?
MR. PEABODY: No, sir, I didn't.
H.M.JR: I read it in Arthur Krock's column.
MR. ROBBINS: That is terrible.
H.M.JR: Then the other thing, Herbert, either Robbins
or I should say - because I think the most important thing
that happened this week was the President's statement on
freezing costs and wages, and it certainly is going to be
most helpful to us.
MR. ROBBINS: I think that belongs in your comments -
not in mine.
Regraded Unclassified
102
- 5 -
H.M.JR: I think then, Herbert - there isn't anything
in mine - if I could lead into - say something like this:
"The President helped us by starting this drive, first by
buying a bond - the thing he did which is going to be the
most helpful is this freezing" - and 80 forth and so on.
Everybody knows - I don't know as we want to go - it will
direct the peoples' minds to buying 8. bond as against an
equity. If you want to go that far, that is the truth.
Maybe you don't have to spell it out.
MR ROBBINS: There would be a lot of people on the
receiving end of this that will understand that.
H.M.JR: It will direct their thoughts towards buying
a bond as against buying an equity. What do you think, Herbert?
MR. GASTON: I think it would be 8 good idea.
E.M. JR: I mean, I would like to bring in something
about - that the thing was lead off by the President, but
that is the least that he did - buying 8 bond - the really
important thing he did this week was the thing he did on
prices and wages, which will direct the peoples' minds
towards a bond campaign as against going out and buying an
equity. If they don't know what that means, say "speculating
in the stock market." How does that leave you, Peabody?
MR. PEABODY: I think it is fine.
H.M.JR: How about you, George?
MR. ROBBINS: Do you think this will have much effect
on the stock market?
H.M.JR: The worst flop yesterday--
MR. BUFFINGTON: I wonder if that is common knowledge.
In other words, only the sophisticated will understand it,
and they understand it now. I wonder if it adds much. In
other words, you don't want to do anything that is contro-
versial as far as any of these workers are concerned.
MR. GASTON: We don't need to go into the stock market
end of it.
Regraded Unclassified
THE
- 6 -
MR. BUFFINGTON: That is what I mean.
MR. GASTON: Just say that, "Freezing prices makes
money available."
MR. PEABODY: "And is going to make your job easier."
MR. BELL: Stay away from equities.
H.M.JR: Say "It will make your job much easier."
MR. ROBBINS: The financial community by and large
have constantly expressed an opinion that a healthy,
although not necessarily wild, stock market would help us
in this bond campaign.
MR. BUFFINGTON: That is why I wouldn't hit too hard
on hurting the market. It doesn't add anything.
MR. ROBBINS: It does become, therefore, 8 contro-
versial issue if you toss it out into the ears of ten
thousand bankers.
Schram asked me only one question in my New York
bankers meeting, and that was that question that dealt
with the attitude of the Treasury towards activity in
the stock market at the time of the drive. I was very
fortunate in having a whole roomful of bankers, and 1
said, "Gentlemen, you had better keep me on selling, not
on banking."
H.M.JR: What did he want?
MR. ROBBINS: The opinion was then crystallized that
EL healthy stock market would be a stimulus to bond sales,
not a run-away market.
H.M.JR: We had been having a run-away stock market
and Schram came down here. He was the fellow on the door
step of the White House who talked about the possibility
of taking some steps to curtail it, which wasn't very
intelligent. He didn't say how, but just sort of frightened
people.
Regraded Unclassified
- 7 -
Herbert, see what you can do. It may throw my
whole speech out of tune; I don't know.
MR. GASTON: I don't think SO. Let me take a look
at it.
H.M.JR: Miss Chauncey will have an up-to-date copy.
MR. ROBBINS: Is there anything basically wrong with
this?
H.M.JR: No.
Bell, do you think so?
MR. BELL: No.
MR. GRAVES: I think he ought to take the words "pro-
jection room" out of that first sentence and just say "from
the Treasury Department." That is very minor, but somebody
might--
MR. ROBBINS: I was feeling around for local color.
H.M.JR: We have an advertising factor - we have a
projection room--
MR. PEABODY: Say, "from a room in the Treasury." The
"room" does pull it closer to an intimate thing.
MR. GRAVES: Why not say "fron the Secretary's office"?
H.M.JR: I have never said that when it wasn't SO.
MR. BELL: Say "from the Treasury building" or "Treasury
offices."
H.M.JR: "From the Treasury."
Peabody, have you anything?
MR. PEABODY: No.
Regraded Unclassified
10$
- 8 -
MR. BUFFINGTON: I rather agree with Harold. If
you work that in, say - if it were in the Secretary's
office it would be more intimate.
H.M.JR: We have never said that if it wasn't true.
MR. BUFFINGTON: I have nothing else.
MR. GAMBLE: No.
H.M.JR: Herbert?
MR. GASTON: No. We will have to count words on
this thing now.
H.M.JR: I will be down at five minutes of one, and
will be glad to run through it then.
Could I just say one thing? Would you mind making a
note to give to the people that are coming to this meeting .
I take it they are the key people in the Treasury?
MR. GAMBLE: Yes, sir, thirty-two people.
H.M.JR: Would you give them a little package of the
stuff which went out last night for the newspapers, the
letter to the publishers, the chart, and my speech?
MR. PEABODY: Yes, sir.
H.M.JR: Have forty packages.
MR. GAMBLE: Thirty-two is the exact number. That
is all the seats we have.
H.M.JR: I think it would be nice.
MR. BELL: Put one in each seat. (Laughter)
H.M.JR: Keep it hot. (Laughter)
I have nothing other than that, unless somebody wants
to shoot something at me.
Regraded Unclassified
- 9 -
MR. BELL: I assume that there will be no publicity
over the week end from the Treasury - press release, I
mean, that we usually have on financing. We don't need
that because--
MR. PEABODY: No, we will have 8 general promotional
story for release in tomorrow's papers. In other words,
it is background on the drive. It involves 8 greet many
people. It includes a summary of districts and in general
what they are planning to do, but that is all, nothing
specific.
There is one point I want to raise--
H.M.JR: You were worrying about & formal--
MR. BELL: Yes, 8. formal press release. We talked
about it earlier in the week and we thought we ought to
get Wanders down here Thursday or Friday and have him work
on it if there were going to be one, but I understood it
wasn't contemplated. I wanted to make sure.
The other thing is, Wanders is coming Tuesday.
MR. PEABODY: He wants to be up for the speech Monday
night and will report Tuesday.
MR. BELL: I think it would be a good thing if you
announce he is coming.
MR. PEABODY: It has already been done with regard
to our own organization.
MR. BELL: I know, but publicly.
MR. PEABODY: I think it would be - we talked about
that, Mr. Gaston and myself. We felt that if the Secretary
at his next press conference could make & statement to
that effect--
MR. BELL: That is Monday. The boys yesterday thought
if there was some place they could come - they suggested
they might come to me, Herbert, and John Sullivan during the
Regraded Unclassified
- 10 -
campaign with suggestions for quotations so as to help
out with their stories. I told them I thought by Monday
or Tuesday there would be & channel through which they
could come.
H.M.JR: Who would the channel be?
MR. BELL: Wanders. They come to Wanders and make
this suggestion that somebody be quoted during the campaign
like it was last time - not very much, but there were quotes.
You were in three or four times. They said it helped the
stories immensely. If they come to him, he works out the
quotes and then clears them.
H.M.JR: But he works under you?
MR. PEABODY: Yes, sir. What we plan to do is make
him a coordinator of all of the releases in the campaign,
have everything flow through him and prevent the overlapping,
and be sure the emphasis is right in each type of release.
H.M.JR: Harold?
MR. GRAVES: I have nothing.
MR. ROBBINS: I haven't anything else.
There is only one thing I want to register with you,
and that is that we have all those reports in - this is
off the subject - but one, and that is on the way. So any
time - I don't think now is the time, but probably in the
next week--
H.M.JR: Are you satisfied with them?
MR. ROBBINS: Well, yes; I think they serve the purpose
you had in mind. I believe we have a reference now of all
except the twelfth district.
H.M.JR: Which is the twelfth?
MR. ROBBINS: California.
Regraded Unclassified
- 11 -
H.M.JR: But I meant, in looking at these reports,
do they seem to have every county filled in?
MR. ROBBINS: One place didn't show up with city
records. The rest of them even went down to city levels.
MR. BUFFINGTON: Yes, went through the county organiza-
tion to city.
H.M.JR: Does it show any weaknesses in our organization
I mean?
MR. ROBBINS: No, it shows 8 surprising strength. The
volume is terrific.
H.M.JR: Good.
MR. PEABODY: One point on the closed circuit thing
is the timing. If it is under on this thing, it doesn't
matter. In other words, I just throw that out 89 a re-
assuring fact, because we could go off the circuit for a
full minute before our period is up and it would have no
repercussions whatever.
H.M.JR: So you don't have to put 8 piano player on?
(Laughter)
MR. PEABODY: Nobody needs to be under pressure as to
timing, because the way we have it here we are under - we
don't have to worry about it.
MR. ROBBINS: That does bring up the point, though,
that after my comments and the Secretary's comments there
is perhaps a closing comment that should be made - at least
80 we thought in our discussion yesterday, that I would go
back on for 8 very brief statement. The thought I had in
mind was to thank the Federal Reserve presidents for the
important part that they have played in the organization
and development of the plan and sort of throw the challenge
out to them that the leadership is in their hands and they
should go shead. That is it; that is the end of it. Does
that sound all right?
H.M.JR: Sure.
Regraded Unclassified
188
- 12 -
MR. BELL: Thank them all for gathering.
H.M.JR: If you are going to write out anything more
about me, would you mind showing it to Gaston before you
say it, please?
MR. ROBBINS: Yes, I will. It wasn't my thought
that I would write this in at all. It would just end up
with that.
MR. GAMBLE: We have set that date for Wednesday at
twelve o'clock. That was agreeable to everybody. Congress-
man Doughton agreed with you.
H.M.JR: Have you notified them?
MR. GAMBLE: Yes.
H.M.JR: No trouble?
MR. GAMBLE: No trouble.
H.M.JR: That is much better.
Regraded Unclassified
Mr. Robbins' Opening Speech (8 minutes)
Fellow workers in the field: I am speaking to you from
the Treasury Building in Washington. In the room with me are
some of the men and women who have built up this great organiza-
tion of war workers from its very beginning: leading the list,
of course, Secretary of the Treasury Morgenthau; also Under
Secretary Daniel Bell and my coworkers Harold Graves, Ted Gamble,
George Buffington. I regret that another associate whom most of
you know, Peter Odegard, is not here with us this morning.
In the brief time since I have joined the Treasury
Department, I regret that it has been impossible for me -- or
for our advertising associate, Mr. Peabody -- to meet personally
all of the many people who are joined in this radio conference
this morning. For you are many people, no doubt of that. You
are approximately 60,000 war workers listening over a closed
Regraded Unclassified
TTO
- 2 -
circuit from 130 stations of the National Broadcasting Company
and 216 stations of the Mutual Broadcasting System.
Since coming to the Treasury, however, I have traveled
across the land and back, and I have met many members of this
great staff. It was a truly inspiring experience for me, for
I learned at first hand how devoted, determined, and enthusi-
astic all of you really are. I appreciate full well the part
you will play in this April Drive.
For our part, we in Washington have done all in our power
to set the stage for success. I would like to tell you
something of what we have done.
We have made the preparations for perhaps the greatest
national advertising and publicity campaign in history. The
American public has some idea already of the forthcoming Second
Regraded Unclassified
111
- 3 -
War Loan Drive. The full force of the Drive, the full impact
of our message, however, will not be registered until 48 hours
have passed.
As all of you know it is our intention to relate the
Second War Loan Drive to the activities of the armed forces.
Starting tomorrow at 3:30 p.m. Eastern War Time the big guns
of our campaign, working in conjunction with the nation-wide
Army Hour radio program, will release their first great salvo.
Those who are tuned to their radios will hear a stirring tale
of heroism from the fighting fronts. The intimate connection
between the fighting fronts and fighting dollars, between the
lives of our soldiers and the lending of our money, will be
forcefully brought home.
Monday, April 12, will be, however, the red letter day on
the radio throughout the nation. Practically every radio
Regraded Unclassified
112
- 4 -
station in this land will go all-out on war Bonds for the
full 24 hours of that day. The high spot will be the mass
meeting at Carnegie Hall in New York, from which Secretary
Morgenthau will address the nation.
Other avenues of publicity will operate with increased
force as the campaign develops. In their advertising and in
their editorial columns, the newspapers of the land will lay
down 8 terrific Mar Bond barrage. There will be billboards,
car cards, posters, end pamphlets -- a gigantic volume of
advertising donated to the nation by leading American industries,
institutions, and individuals.
The magnitude of this advertising campaign is too huge
to cover in the brief time at our disposal, embracing as it
does everything from the modest pamphlet to the local newspaper,
the nation-wide radio program and featured newsreel. Your own
Regraded Unclassified
113
- 5 -
local advertising and publicity campaign will supplement and
in many respects even surpass the national programs handled
from here. America will be made aware of our presence. The
people of this country will know that the Second war Loan
Campaign has started. And you, as salesmen, will be preceded
to your customers' doors by the persuasive, compelling support
of perhaps the greatest publicity drive in history.
Much 88 the advertising will do to aid you in your work,
the fact remains that the success of this April Drive depends
on you, end you alone. Advertising and publicity, regardless
of its force and persuasiveness, will not do the job which lies
ahead of us, The job before us will only be accomplished by
personal contacts, by dealing face-to-face with the people to
whom we wish to sell. we cannot wei t for the people to come
to us. On the contrary, we must go to the people. The success
Regraded Unclassified
124
- 6 -
of our campaign rests upon millions of conversations -- face-
to-face conversions -- which will take place between you end
the people. And that is going to take time, patience, effort.
Above all, it is going to take skill.
Let us have no illusions. The selling of United States
War Bonds to the citizens of the country is 8 unique kind of
sales job, far different, for example, from selling packaged
merchandise or even an automobile. In the first place, it is
difficult, often impossible, to know when you have achieved
success. It is not enough simply to sell John Jones e $100
bond. Such a sale may indicate real achievement, or, in turn,
it may fall short of the mark. If John Jones could afford to
buy only EL $100 bond -- if, in fact, his purchase represents
a real sacrifice on his part -- then you have certainly
achieved success. If, on the other hand, John Jones was in
Regraded Unclassified
115
- 7
8. position to buy $1,000 worth of bonds, but only bought
$100 worth, then the measure of our success has been small
indeed.
In dealing with an incividual's ability to buy, we are
face to face with the most intimate financial relationship that
cen possibly exist between customer and salesman. I know of
no sure way to meet this problem. I have but 8. few suggestions
which are homely and certainly not original. Put yourself in
the position of the man to whom you are trying to sell, try
out your own sales plan on yourself, appeal to the self-
interest of the customer as well as his patriotism. Hard
sincere selling will do the job and no other kind of selling is
worthy of the effort. Study your manual, plan your calls, make
boná selling your first and only business until the job is done -
and see the people.
Regraded Unclassified
- 8 -
I am extremely optimistic as to the results you are going
to achieve. I say this as one whose job for many years it has
been to sell, and to work with salesmen. Every salesman knows
that to achieve success, the feel of the sales force must be
right. I have been out with many of you in the field and I have
the feel of our organization - it is fine! - we are on our way -
nothing can stop us!
You war workers joined up in this great crusade out of your
own free choice. You came in to perform a patriotic service to
your country. You came in because a hard, difficult job had to
be done, and you felt you had the experience, the judgment, and
the skill to do it. I know you have! You came in because you
believe the securities of your Government -- and the great
country that backs them up -- are the finest things in the world
Regraded Unclassified
117
- 9-
to have and to own. To achieve success in this April Drive,
all you need to do is communicate some of your own feeling,
some of your own enthusiasm, some of your own patriotism,
to the millions with whom you will come in contact. Patriotism
is 8 contagious thing. And I have every confidence you will
spread your own contarion far and wide.
And now I would like to introduce to you the Commanding
General of this great army of volunteer workers. The man on
whose shoulders rests the chief financial responsibility of
our nation in time of war. The man who now asks you to
shoulder e portion of this great responsibility - The Secretary
of the Treasury - henry Morgenthau, Jr.
Regraded Unclassified
118
April 10, 1943
Pages changed by the Secretary.
4-10-43 113 113
Thank you, Mr. Robbins.
Fellow workers. I want, first, to
express my gratitude to you veterans of the
home front for the patriotism you have shown
in the campaigns that are already history.
You have given unsparingly of your time and
effort, without compensation of any kind save
the satisfaction of serving your country loyally
and well, to the most important task to which
and women
men ^ today can devote themselves -- the winning
of the war.
Regraded Unclassified
120
-4-
In spite of the unparalleled task that
lies before us, the conditions of success are
at hand. There is more money in the people's
hands available for investment than at any previous
time in the nation's history. We have, as you
know, designed our securities in such a way to
appeal to every type of investor, long-term or
short-term, corporate or individual, bank or trust.
What is required now is that you workers carry
the Government's message to the people of the
country
carry
W
message to every home in
the land.
I know you will do this
Regraded Unclassified
121
-5-
evenybody
To win this war the people all the
people -- will have to put their shoulders to
sucha hiese
the wheel. War on so unexampled scale cannot
be the enterprise of the few; it must be an
undertaking of the many.
Only the people --
all the people -- can finance this total war.
Our success in achieving the 13 billion dollar
goal will not be measured alone by our ability
to raise the money. The true measure of success
will be the extent to which this money comes
from the savings of individual men and women.
Regraded Unclassified
122
&
The overwhelming majority of our people,
I am convinced, are ready, willing, and eager
to demonstrate to the men and women of the
armed forces, to the teeming millions of our
Allies who are enduring the tortures of a living
hell at this very moment, that we are with them
in fact as well as in spirit in this crusade
to blot out barbarism and lay the basis for a
better world.
It is your job to see that the men and women
of America demonstrate their determination to win
through to final victory and lay the foundations
for a lasting peace by buying War Bonds in
vastly greater amounts than they ever did before.
Regraded Unclassified
123
Some you will only have to approach; some you
will have to persuade; and some you may have
to convince. All, however, you will have to
reach.
magnificant
May I express to you in this glorious
enterprise my sincerest wishes for the best of
success and Godspeed.
Regraded Unclassified
124
These new sofique
Discusst inflation
will make it
Anne deciable than
lten to reviest iil
Gm. Binds.
125
4/10/43
The President of The United
States has already given us have he
help ein This campagn; not merely
ty selling The prot funds, but new what
4 for me unportant by the action
he has just Taken to hild down The
Ceet of living and make mine money
amilable 70 involvement Through freezing
way
prices as will as wages,
These new eataguards against
inflation will add to The many funds available
for investment. which are new
greatu than at any ame in The
patien's history.
Regraded Unclassified
-4-
In spite of the unparalleled task that
lies before us, the conditions of success are
at hand. There is more money in the people's
hands available for investment than at any previous
time in the nation's history. We have, as you
know, designed our securities in such a way to
appeal to every type of investor, long-term or
short-term, corporate or individual, bank or trust.
What 1s required now is that you workers carry
the Government's message to every home in the
land.
I know you will do this.
Regraded Unclassified
127
April 10, 1943
Reading copy of the closed circuit
speech by the Secretary.
Regraded Unclassified
128
Thank you, Mr. Robbins.
Fellow workers. I want, first, to
express my gratitude to you veterans of the
home front for the patriotism you have shown
in the campaigns that are already history.
You have given unsparingly of your time and
effort, without compensation of any kind save
the satisfaction of serving your country loyally
and well, to the most important task to which
men and women today can devote themselves --
the winning of the war.
Regraded Unclassified
128
-2-
The experience you have gained in previous
campaigns has made you into seasoned, hardened
veterans. This experience will now serve you
well, for on Monday next you are going to undertake
the greatest operation in all financial history --
the raising of 13 billion dollars.
This is a
task that will demand all of your ingenuity,
all of your resources, all of your patience and
strength.
Great as are the sums the Government is
raising through taxes, they are far from sufficient
to finance the whole costs of the war.
Regraded Unclassified
730
-3-
And great as has been the sale of Government
securities to individuals, trusts, corporations,
partnerships, and banks, the sums raised in the
past are insufficient in terms of the vastly
expanded needs of our war requirements today.
What is required this month 1s a financial
mobilization so all-embracing and thorough
that the war will be brought to every American,
every wage earner and farmer, every business and
professional man and woman.
Such has not been
the case in the past. It must be the case during
the Second War Loan Drive 1f success is to be
achieved.
Regraded Unclassified
131
-4-
In spite of the unparalleled task that lies
before us, the conditions of success are at hand.
The President of the United States has already
given us powerful help in this campaign; not
merely by selling the first bonds, but -- what
is far more important -- by the new courageous action he has
just taken to hold down the cost of living through
freezing prices as well as wages. These new
safeguards against inflation will make it more
desirable than ever to invest in Government bonds.
We have, as you know, designed our securities in
such a way to appeal to every type of investor,
long-term or short-term, corporate or individual,
bank or trust. What is required now is that you
workers carry the Government's message to every
home in the land. I know you will do this.
Regraded Unclassified
132
-5-
To win this war, everybody will have
to put their shoulders to the wheel. War
on such a huge scale cannot be the enterprise
of the few; it must be an undertaking of the
many. Only the people -- all the people --
can finance this total war.
Our success in
achieving the 13 billion dollar goal will not
be measured alone by our ability to raise the
money. The true measure of success will be
the extent to which this money comes from the
savings of individual men and women.
Regraded Unclassified
133
-6-
The overwhelming majority of our people,
I am convinced, are ready, willing, and eager
to demonstrate to the men and women of the
armed forces, to the teeming millions of our
Allies who are enduring the tortures of a living
hell, that we are with them in fact as well as
in spirit in this crusade to blot out barbarism
and lay the basis for a better world.
It is your job to see that the men and women
of America demonstrate their determination to wir.
through to final victory and lay the foundations
for a lasting peace by buying War Bonds in
vastly greater amounts than they ever did before.
Regraded Unclassified
134
-7-
Some you will only have to approach; some you
will have to persuade; and some you may nave
to convince. All, however, you will have to
reach.
May I express to you in this magnificent
enterprise my sincerest wishes for the best of
success and Godspeed.
Regraded Unclassified
135
April 10, 1943
11:35 a.m.
Operator:
Go ahead.
James V.
Forrestal:
Hello.
HMJr:
Hello, Jim?
F:
Yes. Henry?
HMJr:
Yes.
F:
Oh, on this Glenn Martin, we'll get a man
over there to take a look.
HMJr:
Yeah.
F:
and I think probably if Eubank himself
goes, it's worth doing. He's very good.
HMJr:
Yes, he 18.
F:
And I think he can put some steam in it.
HMJr:
I gathered you've glanced at that memo.
F :
Yeah.
HMJr:
Yeah.
F:
Yeah, well, it's just obvious there 1sn't
any - there isn't any zip in the thing at
all.
HMJr:
That's right, and that goes - what - what
hurts us on War Bonds hurts you on production.
F:
No question of that.
HMJr:
The two are tied up.
F:
Yeah.
HMJr:
Jim, sometime when you have a - a minute I'd
love to talk to you about what the Navy does
to go into the plants and really give these
fellows pep talks on....
Regraded Unclassified
- 2 -
F:
Well, I'd be - I'd be - I'd be very glad to
do it because we've got a very - I'd be - I'd
be glad to send you, as a matter of fact, the
monthly reports I got on it. This - we have
a very - you see, the Navy - Army and Navy "E"
is tied up with - the award of that insignia 18
tied up with what we call our Incentive Division.
HMJr:
Yeah.
F:
And that's run by Admiral Clark Woodward, the -
the Incentive part of it.
HMJr:
Yes.
F:
And we try to get people to tell us when they've
got a feeling of let down, because we can shoot
into those plants men back from the front, such
as the captain of the Boise
HMJr:
Yeah.
F:
and that's the most effective thing - I mean
if - we're - we get - well, this Sullivan
family we've got on a tour now of all of the
required escort plants.
HMJr:
I see.
F:
That 18, all of the plants making components,
and they are very effective because this little
woman gets up - she had her five kids go down
on the Juneau, you know.
HMJr:
You have some kind of a monthly report on that?
F:
Yeah, and I'd like to send it to you.
HMJr:
Would you do that?
F:
You bet.
HMJr:
I thank you.
F:
Okay.
Regraded Unclassified
THE UNDER SECRETARY OF THE NAVY
WASHINGTON
10 April 1943
Dear Henry:
Captain Eubank, who heads up the
Navy's Bond Selling organization, is going
down to Glenn Martin to have a look. I
an confident results will follow - they
always have wherever he has gone.
Sincerely yours,
Fouestal
Honorable Henry Morgenthau, Jr.
The Secretary of the Treasury
Washington, D.C.
Regraded Unclassified
THE UNDER SECRETARY OF THE NAVY
WASHINGTON
10 April 1943
Dear Henry:
I am asking Admiral Woodward's office to send you El brief
summary of what we do by way of stimulation of morale in
our industrial plants as well as copies of two or three
of his recent reports to me. As I told you over the tele-
phone, the most effective stimulus we find comes as the
result of visits and talks by the men back from actual
wer - Captain Moran of the BOISE, the parents of the five
Sullivan boys who went down on the JUNEAU, etc. We find
that speeches have to be administered with judgment -
that there is definitely & point of diminishing return
in their effectiveness.
We are now in the process of getting some movie shorts
for display in plants making components for the escort
vessel program. There are so many of these plants doing
work remote from the ultimate delivery of vessels that
it is hard for them to visualize the relation of what
they do to one of the most important weapons in the war.
John Ford, who did the Midway picture, will run this
program and it may be that some of the results might be
useful to you in your own Bond selling efforts.
With thanks for your interest, I am
Sincerely yours,
Fourtal
James Forrestal
The Honorable Henry Morgenthau, Jr.
The Secretary of the Treasury
Regraded Unclassified
129
April 10, 1943
Dear Jim:
With reference to your question concerning
the number of Bonds redeemed in March, I would
like to give you the following information:
Total redemptions in March of outstanding
Savings Bonds on sale since May 1941 and including
Series E, F, and G were 131 million two hundred
thousand dollars. This is a much smaller figure
than had been anticipated by a great many people.
A very interesting and pleasing story in
connection with the March picture is the sale of
Bonds in this tax month. Our total sales for the
month of March 1943 of E, F, and G Bonds were
944 million three hundred thousand dollars,
compared to 557 million nine hundred thousand
dollars in March 1942. The sale of Series E Bonds
in the month of March 1943 alone was 720 million
four hundred seven thousand dollars compared to
337 million five hundred and ninety-nine thousand
dollars in March 1942, an increase of 382 million
eight hundred eight thousand dollars.
For your further information I am attaching
a sheet which gives you something of the over-all
picture on redemptions which I think will interest
you.
With all good wishes, I am,
Sincerely yours,
(Signed) Henry
Honorable James V. Forrestal
Under Secretary of the Navy
Navy Department
Washington, D. C.
TG:vm
Copy in Diary
Cooies to Thompson
Regraded Unclassified
140
Since U. S. Savings Bonds (Defense and War) Series
E, F, and C were first of fered May 1, 1941, cash receipts
totaled over fourteen and three quarter billions from
that date through March 31, 1943.
Redemptions (cost plus accrued interest) through
March 31, 1943, totaled about 507 million dollars or
3.4% of sales.
.e still have 96.6% of the over fourteen end three
quarter billions taken in on Series E, F, and G since
they were first offered for sale.
U. S. Savings Bonds (Defense and War) Series E
only. ..ver nine and one quarter billions have been
taken in and 449 millions (cost plus accrued interest)
paid out through March 31, 1943.
Regraded Unclassified
141
April 10, 1943
2:52 p.m.
HMJr:
Hello.
Operator:
There you are.
HMJr:
Yes, Sam.
Speaker
Rayburn:
Henry?
HMJr:
Yes, Sam.
R:
We'll be down as soon as I can get my car.
HMJr:
Oh, you're coming earlier?
R:
Yeah. Will you be ready?
HMJr:
Oh, sure, I'll adjust myself.
R:
All right. I'll - well, we were supposed to
start down there about three, but the car
hasn't come, and - and it may be
HMJr:
I was....
R:
It may be as late as three-thirty, I don't
know.
HMJr:
Well, whenever you're here, I'm at your
service.
R:
All right, fine. We'll come on down then
when I can get the car.
HMJr:
Thank you.
R:
All right.
Regraded Unclassified
April 11, 1943
Memorandum to the file:
After a preliminary conference beginning at 3 p.m.
Saturday, April 10, 1943, attended by the Secretary, Mr. Blough,
Mr. Surrey and myself, the Secretary and I had a long conference
with Speaker Rayburn, Majority Leader McCormack, Chairman
Doughton and Mr. Jere Cooper. The conference lasted for about
office. two hours, until almost 6 o'clock. It was held in the Secretary's
The general subjects discussed were -
(a) the defeat of the Ruml plan;
(b) the tactics of Martin and the Republicans since
that defeat;
(c) the public reaction with respect thereto; and
(a) what steps should be taken for the future.
There was considerable discussion of the question whether
to bring forward some compromise plan at an early date. Jere
Cooper voiced the opinion that in beating the Ruml plan so many
members of the Committee and House had gone out so strongly
against forgiveness that it would be hard for them now to re-
verse their position by backing plans involving forgiveness
and that he thought it would be hard to get 8. majority of the
Committee for any one plan. He spoke particularly of the
Chairman and himself in connection with the forgiveness issue
and said that practically every member of the Committee, except
Robertson, was in the same position. Cooper also voiced concern
that on another vote the Ruml plan might succeed, since the
vote had been very close and the Republicans were so solid as 8.
party matter. McCormack expressed some agreement with this fear.
The Chairman indicated that he thought the Ruml plan could be
defeated again provided the Democrats stuck together and no one
was in disagreement with the Administration policy.
This brought on a quarrel between McCormack and Chairman
Doughton. The Chairman accused McCormack of having failed to
Regraded Unclassified
- 2 -
back the Committee in discussing compromise with many members.
McCormack denied that he had talked compromise and claimed that
he had attempted very hard to secure votes. The Chairman
accused McCormack of insulting him which he did not have to
take when he wasn't acting as Chairman of the Committee. After
some period of quarreling, the two shook hands and decided to
let bygones be bygones.
The only compromise measures suggested were the Doughton
No. 1 plan which I explained briefly and the plan suggested by
the Secretary of withholding 10 percent the first year without
any forgiveness and 20 percent the second year, this plan being
similar in theory to the 5 and 10 percent plan adopted last year
by the House. McCormack, particularly, objected to this last
mentioned plan because it did not have enough sweetening. The
Chairman said that I had beaten his second plan and then he
criticized his first plan (which was only a "suggestion") because
under it there would be a. hang-over of debt which might prevent
further tax increases. However, he thought it was the best
available plan and everyone else seemed to be in agreement.
Cooper said that this plan had lost in the Committee 11 to 13,
that the Robertson plan had secured only about 7 votes, and that
the Doughton No. 2 plan had secured only about 5 votes. In the
course of this discussion there was some discussion of withholding
and the farmer situation. I said quarterly statements could be
used, and the Chairman made the discrimination point if they
were not covered.
The discussion then turned to the tactical situation.
After & good deal of discussion on the question of danger in
reviving a vote on the House floor, it was agreed that Mr.
Doughton should make B. short speech Monday in which he would
say that if the leadership on both sides would agree 8. bill
could be introduced immediately covering the non-controversial
collection at the source provisions of all the bills recently
under consideration; that passage of any such bill would probably
enable collection at the source to start July 1 or, at the
latest, August 1; and that the controversial issues, particularly
that of forgiveness, could be taken up later as part of the
regular tax bill. Among the non-controversial issues which
Regraded Unclassified
144
- 3 -
could be included in the immediate legislation would be the
provision as to soldiers' exemptions. It was felt particularly
by Rayburn that this procedure would put the Republicans on 8.
spot in that they would then be in the position, if they re-
fused to join, of sharing responsibility for delay in collection
at the source, and would be showing that they wanted forgive-
ness more than collection at the source. It was felt that such
& statement by Doughton (which he had already prepared but did
not have with him at the meeting) would possibly lead to a
compromise discussion with Martin at which the possibility of
the first Doughton plan or some other plan could be discussed.
REP
Regraded Unclassified
approv 11/10 145
The Second
WAR LOAN
CAMPAIGN
Banking's job in April
AMERICAN BANKERS ASSOCIATION
22 East 40th Street
ORGANIZED ABA 1515
New York City, N.Y.
See back covar lar announcement of special broadcast on Second War Loan Compaign by President Hemingway]
Regraded Unclassified
Every individual who has worked with
ings should be held at which the objectives
A. 8. A. COMMITTEE ON TREASURY WAR BORROWING
either group will have an important assign-
and urgency of the drive are discussed and
ment in the April program. This is a job
the various securities described. You will and
W.L. Heiningway, President
Thomas M. Steele, President
where everyone has a part - a job that re-
the summary on the inside pages of this
Mercantile-Commerce Bank and Trust
First National Bank & Trust Company
quires complete cooperation and thorough
folder helpful in staff discussions.
Company, Sc. Louis, Min.
of New Haven
coordination.
President, A. B. A., Charrman
New Haven, Connecticut
Allocation of prospects and instructions
regarding sales plans are problems that every
Edward E. Brown, President
The First National Bank of Chicago
Robert Strickland, President
THE BANKER'S PART IN THE
bank muse solve for itself. Before the cam-
Chicago, Illinois
Trust Company of Georgia
CAMPAIGN
paign opens every officer and member of the
Adanta, Georgia
staff should clearly understand the part be
W. Randolph Burgen, Vive Chairman
Bankers will play an important part in the
is expected to play.
of the Board
W. H. Wood, President
activities of the War Finance Committees
Many banks in previous campaigns have
The National City Bank of New York
American Trust Company
and will continue to be active in their local
successfully employed the team method of
New York, N. Y.
Charlotte, North Carolina
War Savings and Victory Fund groups.
competition within the hank with prizes
Robert V. Fleming President
Perhaps you are a member of one of these
Riggs National Bank
A. L. M. Wiggins, President
awarded the winning group. Other banks
Washington, D.C.
Bank of Hartsville
committees or perhaps you are one of the
have conducted contests in which the entire
Hartsville, South Carolina
90,000 volunteer workers from the banks of
staff participated with rewards going to the
William C. Puiret, Chairman of the
Vire President, A. El. A.
the country who will patriotically contribute
top salesman in various classifications. Some
Extrative Committee
their experience and skill in finance, their
banks make their officers available as mem-
Guaranty Trust Company of New York
Harold Stonier, Executive Manager
knowledge of the investment habies of their
hers of teams organized by local sales
New York, N.Y
Ametican Bankers Association, Secretary
communities and their time and effort. Offi-
committees.
cially or otherwise, you are a part - and a
vital part of a great sales organization
WHO SHOULD BUY
created to obtain thirteen billion dollars for
America's war effort.
The nature and variety of the securities of-
fered in the Second War Loan Drive brings
HIRTEEN BILLION DOLLARS! That is the
ORGANIZING FOR ACTION
into the market a wide variety of prospects.
amount of Government securities that must be sold during America's Second War Loan
In building your prospect list you should con-
Drive which starts April 12. Banks will be called upon to play a vital role in this tremen-
The first job confronting every banker is that
sider as potential investors:
dous warrime undertaking. They will be asked to redouble their efforts in an to
of organizing his own bank for the campaign.
There is a place in the April drive for every
Cemetery Associations
expected in purchase substancial blocRs for their own accounts,
sell Government securities to the public on an unprecedented scale. Too, they attempt will be
man and woman on your staff and for your
Charitable Organizations
stockholders and your directors too. The
Cooperative Organizations
The economic background of this cam-
variety and nature of the securities offered
Corporations
paign has been stated and the urgent reasons
Committee. This group will coordinate the
make everyone, from the president to the
Credit Unions
for wholchearred bank participation clearly
activities of the War Savings Staff and the
youngest member of the staff, a potential
Dealers and Brokers
set forth by the Economic Policy Commission
Victory Fund Committee so that the person-
salesman.
Educational Institutions
of the American Bankers Association in its
nel, facilities, skill and experience of each
This dues not mean of course that every
Executors
récent publication "The 100 Billing Budger
organization will be made available for the
member of the staff is qualified to discuss
Farm Organizations
and the Banks."
gigantic effort necessary to exceed the Thir-
intelligently the entire list of securities with
Foreign Relief Organizations
The list of the securities offered by the
teen Billion Dollar quota.
all prospective investors A qualified group
Foundations (Endowed)
This national committee will have charge
should be selected who will do the actual
Fraternal Organizations
Treasury with the distinctive characteristics
of each is outlined on the following pages.
of the over-all campaign and its functions
sales work among the men and women ap-
Fund Managers
This folder has been prepared on provide the
and responsibilities will be duplicated by
pearing on your prospect list particularly
Guardians
hankers with additional information and
similar committees in each Federal Reserve
among the large investors. These men will
Hospital and Medical Boards
District, The presidents of each of the Fed-
probably require special training so that they
Government and its Agencies:
sales suggestions which will assist them in
the successful conduct of the campaign in
eral Reserve Banks will serve as chairmen of
may become roughly familiar with every
States
their communities.
the United States Treasury War Finance
security listed in the April offering. Too, they
Counties
Committee in their respective districts with
should be able to select and recommend spe-
Municipalities
authority and responsibility for the conduct
cific securities for the consideration of every
School Districts
WAR FINANCE COMMITTEE
of the Second War Loan Drive.
type of investor.
Labor Organizations
Representatives of the Victory Fund Com-
The other members of the stall can sell
Libraries and Museums
Previous fund raising campaigns have been
under the sponsorship and direction of either
mittee and the War Savings Staff will be
the well known Series "E" War Savings
Orphanages
the War Savings Stuff OF the Victory Fund
included in the membership of each district
Bonds to men and women who they know
Partnerships
Committee In the April deive, however,
committee and the volunteer workers in both
are logical prospects for the purchase of this
Patriotic Societies
type of bond.
Pension Funds
these two groups will be united under the
organizations will join in a united effort to
name the United States Treasury War Finance
In order to give the entire staff accurate
Governmental or Private
project assure the success of the Treasury's greatest
information regarding the campaign, meet-
Political Subdivisions
2
3
(Contitual not Nov V
Regraded Unclassified
$13,000,000,000 Second War Loan Drive
SUMMARY OF UNITED STATES GOVERNMENT SECURITIES ON SALE DURING APRIL, 1943
Cifs. of Indebtedness.
Tax Savings Notes
United States U'ar
United States Savings
United States Savings
2% Treasury
21/2% Treasury
Treasury Bill
Series B-1944
Series C
Bonds, Series E
Bonds, Series F
Bonds, Series G
Bonds of 1950-52
Bonds of 1964-69
Discount basis
74% of maturity
$500 or $1,000 bonds,
100% and interest
% of maturity
5500 or $1,000 bonds,
100%
100%
Issue price
by tender
value
value
100%. Over $1,000,
100%. Over $1,000,
100% and incerest.
100% and interest.
Offered weekly
April 15, 1943
First day of month
Files day of month
First day of month
First day of month
Dated
in which purchased
inghich purchased
in which purchased
in which purchased
April 15, 1943
April 15, 1943
Generally
April 1, 1944
3 years from
0 years from
12 years from
12 years from
Due
in 91 days
issue date
issue date
issue date
issue date
Sept. 15, 1952
June 15, 1969
Governed by
1/2%
Varies-1.075
arits-2,90%
Varies-2.53%
21/2%
2%
21/2%
Rate
price bid
if held to maturity
to maturity
if held to maturity
Bearer form only
Bearer form only
In inscribed form
only
Requered form only
Registered form only
Registered form only
Bearer or registered
Bearer or registered
Registration
form
form
$1,000 to $1,000,000
$1,000 to $1,000,000
Denominations
$1,000 to $1,000,000
25 to $1,000
$25 to $10,000
$100 to $10,000
$500 to $1,000,000
$500 to $1,000,000
Generally
Banks Apr. 12, 1943
Books open
Continuously
Continuously
Continuously
Continuously
Banks Apr. 28, 1943
on Fridays
Others Apr. 12, 1943
Others Apr. 12, 1943
April 12, 1943
Banks Apr. 14, 1943
Generally on Mondays
Others upon order of
Upon order of
Upon order of
Upon order of
Banks Apr. 30, 1943
Open order of
Treasury
Others upon orders
Upon order of
Books close
at 2 p.m. (E.W.T.)
Treasury
Treasury
Treasury
Treasury
of Treasury
Treasury
Generally
Banks
Banks
Payment due on
Application
Apply
ion
on Wednesdays
Others on subscription
Application
Application
Others on subscription
Subscription
Generally
A few days after
A few days after
few days after
A few days after
A few days after
A few days after
A few days after
Delivery date
on Wednesdays
payment
payment
payment
payment
payment
payment
payment
Taxable by Federal Government
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Eligible for subscription by individuals.
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Eligible for subscription by commer-
Yes
Yes
Yes
No
No
No
Yes
No*
cial banks
Acceptable in payment of Federal (in-
Yes, during and after
Federal estate taxes
come, estate or gift) taxes prior to
No
No
2nd calendar month
No
No
No
No
only, 00 death of
moturity
after purchase
owner
At holder's option
M holder's option
At bolder's option
At holder's option
At Government's option
only, after 6 months,
Redeemable for cash prior to maturity
only, after 6 months,
only, after 60 days
only, after 6 months,
No*
No
on or after June 15, '64
No
at 100% and interest
from issue date
on variable schedule
on variable schedule
at 100% and interest
00 1 month's notice²
on 1 month's notice
on I month's notice
Use as collateral
Yes
For loans from banks
No
No
No
Yes
Yes
Yes
only
Not before
Eligible for deposit of public moneys
Yes
No
No
No
No
Yes
Yes
April 15, 1953
Solable in open market
Yes
No
No
No
No
Yes
Yes
Yes
Amount for which eligible invester
Not more than $5,000
Limited only by
No limit
No limit
miturity value in one
Not more than $100,000 issue price of Series
No limit
No limit
may substribe
amount of offering
cilendar year
F and G together in one calendar year
*But Total Rederal sales DO Reserve Bank - purchase from besider - disersion brain at rate of No. per innue
Upon death of redegmable at 1 stree fine from issue date, a application for redemption a mule
our not be buid by commercial banks for own account units April 19, 1993.
banks limited in a billine
F/M purchase price only if IMMEDIAL bank is bolder for - -
wishin fear mode after decease
Regraded Unclassified
Professional Groups
When you can sit down and personally dis-
Religious & Franemal Organizations
cuss with the prospect the merics of a security
first time. Some will be unfamiliar with Gov-
outstanding citizens, special feature pro-
and point our the patriotic and economic fac-
emment securities or purzled by the variety
Service Groups
grams, and spot announcements are included
Individuals
ton that compel widespread public partici.
offered for sale during the April drive. These
in the broadcast schedule. Banks making
Insurance Companies
pation in this drive, you are well on your way
men and women, whether they are acting for
regular use of radio facilities can stimulate
(Life, Fire and Camalty)
to making a successful sale,
themselves or representing boards, associa-
the campaign in their own districts by de-
Trustees and Trust Accounts
When you discuss these securities with the
tions or other groups, will need the benefit of
voting a substantial part of their programs
Universities and Colleges
people of your community, you are not merely
your experience and guidance in determining
to the local sales drive. Script can be obtained
Veterans Organizations
a salesman asking them to buy a bond. You
which securities are best adapted to their in-
through the publicity head of your local
vestment needs,
represent the Government of the United
committee or by writing to the secretary of
BUILDING YOUR PROSPECT LIST
States. You are a citizen of responsibility and
Take time to analyze their investment or
your state bankers association, Secretaries
integrity and you are parriouically perform-
savings problems so that your recommenda-
have been supplied by the American Bankers
Prospect lists and their intelligent use are the
key to the success of any fund-raising cam-
ing an urgent and vital service for your
tions will be sound. Avoid technical terms.
Association with radio and speech material.
paign. This will be particularly true of the
country.
Describe the securities and their characteris-
The dramatic story of America's greatest
The telephone method is most effective
ties in simple everyday language. Remember,
financial drive should be told to every organi-
April drive. All the time and care you take
when an officer known to the prospect makes
the potential investor is no mind reader.
zation in the country. Here is an opportunity
in building your own prospect list will pay
the call. Here again is another reason for allo-
What is a familiar story to you is perhaps a
for bankers to make an additional and im-
rich dividends. A carefully considered list
will aid in the sale of securities and save mun-
cation of names to the various officers. If you
new and exciting adventure to him. Take
portant contribution to the success of the
are conducting a telephone campaign, a rou-
time and have the patience to explain thor-
program. Either personally or through your
power, time and expense.
tine should be established and calls made on
oughly and, if necessary, do it again and
committee arrange to appear before service
Prepare a prospect list of those whom you
know to be potential investors. Determine in
schedule. Set aside certain hours of the day
again. Make sure the new investor under-
clubs, trade associations, business, industrial
advance how you intend to use this prospect
and night for your relephone calls. Evening
stands every important characteristic of the
and agricultural groups, patriotic societies,
calls are effective. Some banks have installed
security be is buying.
women's clubs, and other organizations.
list, then haild it accordingly. Make it a
selective list and une that can be capably
special switchboards in order to handle this
The need for public participation in this
work. Too, the telephone can be used suc-
TELLING THE STORY
great undertaking and the investment oppor-
covered by you and your associates. Mere
numbers are meaningless if they do not pos-
cessfully in making appointments for per-
Every effective advertising and publicity tech-
tunities afforded by it can best be stated in
sess quality or are not called upon. Names
sonal interviews thereby eliminating much
nique will be brought into action during the
your own words. If, however, time prevents
should be allocated to certain officers or the
waste of time and effort.
April drive. The Treasury will send three
you from preparing a talk, your local com-
prospect list resulted among them in order to
advertisements each week for four weeks to
mittee or the secretary of your state bankers
When letters are used they should be real
determine who knows each prospect best and
sales letters expressing the writer's personal
every daily newspaper. Weeklies will receive
association will be glad to provide you with
adaptations of the daily material. Proofs of
manuscripts suitable for a brief talk before
who is most likely to succeed in making a sale.
interest in the success of this gigantic war-
Some banks will furn over lists of prospects
time task. A folder describing the issues, such
these advertisements will be sent each bank.
any group.
Cooperate with the chairman of your local
to their local campaign organization for as-
as that distributed by the Wat Finance
These advertisements are to be sponsored
publicity committee by providing him with
signment to its salesmen, Where this is done,
Committee or the booklet produced by the
by individuals and the financial, business,
facts relating to the progress of the campaign
the source of the lists will not be revealed
Advertising Department of the American
industrial, labor and other groups in each
in your district. He will be particularly in-
either to the worker or the prospect. Others
Bankers Association, should be enclosed.
local community. Sponsorship will be sought
terested in the human interest stories that are
will turn over their list to the district or local
Before any letters are mailed check the
by the newspaper publishers and by repre-
always present during bond campaigns.
organization 50 that it may be checked for
prospect list carefully to make sure the names
sentatives of your local committee. Banks and
duplications. It was found in previous cam-
are spelled properly and the addresses are
clearing house groups throughout the coun-
Your lobby can be made an artractive cen-
paigns that the name of the same prospect
correct. Whenever possible use the personal
try gave generous support to the sponsorship
ter for the bond selling activities of your
appeared on the list of several banks with
of similar advertisements in previous cam-
bank. Many banks in previous drives placed
salutation, Dear Mrs. Jones or Dear Bill. The
the result that he was over-solicited. The
a booth or table in the lobby with capable
letter should be signed by the president of
paigns. And they will do so again in the
committee will respect the confidence of the
April drive. Sponsorship, however, should
girls from their own staff or volnoteers from
the bank or some other officer well known
banks when asked to perform this checking
women's defense organizations handling the
to the prospect. Carry into the correspon-
not be confined to the banks but should rep-
or clearing duty.
sales. Massed flags, souvenirs of the present
dence the factors that make personal solicita-
resent A cross-section of the patriotic leader-
war and of World War I, pictures of home
Many banks will prefer to handle their
tion so successful. When possible, follow up
ship of your entire community.
town boys who are cow in the service, speci-
own lists exclusively. Whatever method you
these letters with telephone calls or provide
Many banks of course will prefer to use
follow, it is important that you do have a
mens of war materials produced by local
some return card or other sign whereby the
their own newspaper copy. Such advertise-
industries, and other interesting but inex-
list and that you use it systematically.
prospect may indicate his desire to purchase
ments are effective and contribute much to
pensive display material will quicken public
or discuss the securities.
the success of local campaigns.
interest in the War Loan drive and will
MAKING THE SALE
Billboards and car cards earrying cam-
attract attention to your bank. Your windows
Prospects may be approached personally, by
THE NEW INVESTOR
paign copy will be sponsored by advertisers
can be used for similar displays. The place
telephone, through correspondence, or by
In order to exceed the Thirteen Billion Dol-
in various sections of the country. An affrac-
where the securities are offered for sale in
any combination of these established sales
tive poster for lobby use will be sent DO
your bank or where information concerning
téchniques. Direct personal solicitation, how.
lar goal an army of new investors must be
every bank,
them can be obtained should be clearly
ever, is by far the most successful method,
reached during the drive, Many of these
Radio will be used extensively throughout
marked. This will avoid confusion at other
people will be investing their money for the
the Second War Loan Drive. Speeches by
windows.
6
7
CAMPAIGN INFORMATION
garding each of the securities included in the
April offering.
Banks can obtain booklets containing basic
A third folder contains a summary of the
information regarding the Second War Loan
securities prepared in chart form. This folder
and the drive organized to assure its success
and the descriptive circulars are well written
from the United States Treasury War Finance
and carefully designed and can be used effec-
Committee and from the American Bankers
tively in personal solicitation, direct-by-mail,
Association.
and in lobby distribution. All material pro-
The Association has produced through its
duced by the War Finance Committee can be
Economic Policy Commission the booklet
requisitioned through your local organiza-
"The 100 Billion Budget and the Banks"
tion or from the War Finance Committee in
which has already won high acclaim for its
your Federal Reserve District.
thorough, accurate and interesting analysis
The War Savings Staff has also issued a
of the war-financing problem that now con-
basic pamphlet on the April drive giving il
fronts the people of America.
detailed description of the securities.
In addition, the Advertising Department
of the American Bankers Association has
THE JOB AHEAD
made available an attractive two-color folder
This great Thirteen Billion Dollar sales
describing the securities and carrying a brief
campaign to provide the urgently needed
sales message. Many banks are planning to
money whereby America may wage total war
use this as a mailing piece and for counter
on a victorious basis commands the coopera-
distribution.
tion and participation of every thinking
Excellent campaign material has been pro-
American. You can play a tremendously
duced by the United States Treasury War
important part. You can give strength, en-
Finance Committee. A sales manual for vol-
couragement and direction to this great dem-
unteer workers will be sent to every banker
ocratic movement through your leadership.
serving as a member of a committee or as a
This campaign presents a challenge and an
worker in the Second War Loan effort.
opportunity to the bankers of the country.
We are confident that you will maintain your
In addition, the War Finance Committee
proud wartime record and will again meet
has produced an attractive folder containing
the needs of the nation fully, quickly, and
descriptive circulars which give the facts re-
with high patriotism.
BROADCAST BY PRESIDENT W. L. HEMINGWAY
President Hemingway will make a special radio broadcast over the Blue Net-
work at 7:15 P.M. Eastern War Time, April 12, on the Second War Loan
Campaign.
Your depositors and other people of your community will be interested in this
important broadcast.
BLUE NETWORK, MONDAY, APRIL 12, 7:15 P.M., EASTERN WAR TIME
146
April 10, 1943
My dear Mr. Albee:
I want to take this opportunity
to thank you and Mr. Smith for the
assistance which you so generously gave
me in preparing my Carnegie Hall speech.
I feel that it is the best that has been
done so far in connection with Mar Bonds.
I am enclosing herewith the pack-
age which we gave to the press last night.
With kind regards,
Yours sincerely,
(Signed) H. Morgenthau, Jr.
Mr. George Albee,
Route 1,
Accord, New York.
( Closed Circuit Speech - 4/10/43
sent same day with Secy's card)
File in Diary
Regraded Unclassified
147
April 10, 1943
My dear Mr. Smith:
I want to take this opportunity
to thank you and Mr. Albee for the
assistance which you 80 generously gave
me in preparing my Carnegie Hall speech.
I feel that it is the best that has been
done 50 far in connection with War Bonds.
I am enclosing herewith the pack-
age which we gave to the press last night.
With kind regards,
Yours sincerely,
(Signed) H. Morgenthau, Jr.
Mr. Fred Smith,
C/o Young & Rubicam,
285 Madison Avenue,
New York, N. Y.
(Closed Circuit Speech - 4/10/43 -
sent same day with Secy's card)
File in Diary
Regraded Unclassified
148
Note to editors:
While this memorandum is
not intended as 8. news
release, facts herein may
MEMORANDUM TO EDITORS,
be used as the basis of
PUBLISHERS AND COMMENTATORS
news stories or editorial
FROM HENRY MORGENTHAU, JR.,
comment on and after
SECRETARY OF THE TREASURY
Tuesday, April 13.
On April 12th, at Carnegie Hall in New York City, I shall officially
launch our Second War Loan drive.
I am taking this opportunity to give you some background. We are
very anxious that you, and through you the American people, should
understand the problems of war finance, and why it is that we want
them to help finance the war.
There is no mystery about war finance. There are many problems,
however, and it is difficult to explain some of them to the people.
We need your help
I feel strongly that we are going to have to find new ways of
explaining the situation to the American people: and I hope that
you who are closest to the people, and who spend your life ex-
plaining things to them, will turn your hand to seeing that this
job is done.
The job ahead
During the calendar year 1943, the Treasury is going to spend
about $100 billion. Present taxes will cover about $30 billion
of this, leaving about $70 billion to be raised.
People ask, "Where will the money come from? Where will we find
the money to pay for such a costly war?" The answer is simple.
We will have the income. When we produce munitions or peacetime
Regraded Unclassified
- 2 -
goods or anything else, we likewise produce income. For every
dollar of production, there is 8 dollar of income. This income
may find its way into the hands of individuals, into corporation
profits or reserves, or it may be turned over to the Government
as taxes. The important thing to remember is that somebody gets
& dollar of income for every dollar of goods produced. This point
ought to te put across to the American people -- every dollar that
is spent on war equipment finds its way to American business and
the American worker.
The problems of war finance arise mainly with respect to the where-
abouts of this income. If individuals and businesses receive more
income after taxes than there are things produced for them to buy,
then excess funds arise. At the same time, the Government will
necessarily be receiving less in taxes than it is spending. It
boils down to the fact that the Government deficit is matched by
the combined surplus of everybody else.
How should we raise the $70 billions?
There are several ways to get the money we need. We can raise it
through taxes. We can borrow it from the banks. And we can borrow
it from the people.
Limitations of taxes
We are now getting more money through taxes than ever before - and
it will be necessary, I have no doubt, to ask for still more. But
we cannot rely on taxes to do the whole job, and I would not want
to - because we could not tax with fairness on so huge 8 scale. For
example, we all know of family groups where there are extra workers
profitably employed at this time; and certainly it is not fair to
base a tax upon what these people are able to pay and force into
near bankruptcy the average many workers whose income has increased
little if at all.
Bond sales are mounting
We could borrow all the money from the banks. Our credit is excel-
lent. But for a variety of reasons, economic and social, this is
also undesirable. One reason is that we would then sacrifice what
we believe to be our greatest dam against inflation. Another is
that this is 8 people's war, and the people should finance it. Our
Regraded Unclassified
- 3 -
750
experience in the past has proved that the people want to finance
it. The sales of Savings Bonds have mounted consistently since
Pearl Harbor.
The redemption of bonds, about which there have been many rumors,
has been relatively small. In March, because taxes had to be paid,
redemptions were at 8. peak of $131 millions; but during this same
month the sale of $954 million in Savings Bonds established a
record which has been surpassed in only three months since Pearl
Harbor.
I am very anxious that the American people be given credit for
their truly excellent participation to date, and that we attack
this new campaign th the idea that the people will not let us
down if we deal with them honestly and frankly -- if we tell them
why we need the money, how much we need, and where we must get it.
Borrowing plans for 1943
Your Treasury Department has the financing for the calendar year
1943 well organized. We know where the money is going to be; we
know how much we need to borrow from civilians and how much from
bankers. With the greatest invasion in history just around the
corner--our invasion of enemy-held territory--we feel confident
that the American people will live up to our expectations.
Last December we conducted the first war loan drive. Our goal was
$9 billions. We surpassed it by about $4 billions. More than half
of the total funds came from non-banking sources.
This year we are planning to conduct 8. series of drives--beginning
with the Second War Loan which opens on April 12th. This drive is
for $13 billions, with at least $8 billions from non-banking
sources. Later drives will probably be for higher aggregate
amounts with even larger proportions from non-banking investors.
We also expect to increase the participation in the payroll savings
plan during the year and raise the average investment under that
plan. This work will go on independently of the periodic drives.
A tentative program
Let me tell you something about the tentative program W6 have set
down for ourselves for the year.
Regraded Unclassified
- 4 -
31
The details are of course subject to change from time to time.
My purpose here is to illustrate how we are planning for the
year. First of all let's divide the $70 billions which we must
raise during the year into three financing periods of four months
each. The job for the first period comes to about $20 billions;
for the second period to about $25 billions, and for the third
period, assuming no new taxes, to another $25 billions. Sales
of the continuing types of securities such a.6 Savings Bonds and
tax notes will, of course, go on month by month throughout the
year. In addition, our present plans call for a drive during
the last month in each period to make up the remainder of the
funds which will be required.
Analysis of savings and accumulations
If our deficit is going to run to $20-odd billions in each financ-
ing period this year, then current savings and accumulations by
individuals and businesses will also run to about this same mag-
nitude. This follows from the fact that the Federal deficit is
matched by the combined surplus of everyone else. For each
period, we have analyzed these current savings and accumulations
and classified the funds by investor groups.
Personal savings
In the case of personal savings, we know that people will put
8. certain amount into life insurance, into savings bank deposits
and into the payment of debts. We can also estimate the amount
of personal savings which will be left in the hands of individuals
and which may be sai to be available for investment in Federal
securities. Of this reservoir available for Federal securities
in the last six months of 1942, We found that 47 percent was
actually 80 invested. (The remainder went largely into currency
and commercial bank deposits.) As a tentative program for this
year, W6 have set our sights 80 that this percentage would be
successively increased in each of the three financing periods to
55, 65, and finally to 75 percent in the last four months of this
year.
Corporate accumulations
For corporations other than banks and insurance companies, we made
a similar analysis. In the last six months of 1942, 72 percent of
the newly available accumulations of these corporations was invested
Regraded Unclassified
152
- 5 -
in Government securities. For this year, we assumed that this
percentage could be increased in each of the financing periods
to 75, 80, and finally to 85 percent in the last four months.
Insurance companies and mutual savings banks
We also estimated the amount of securities which might be absorbed
by insurance companies and mutual savings banks as a result of the
new funds flowing to them, and other funds which would probably be
released for new investment during the year.
Governmental investment accounts
Similar estimates were made as to the amount of savings going to
governmental investment accounts -- Federal, State, and local --
and of the amounts of securities which might be absorbed by them.
Summary
Adding together the scheduled sales to each of these non-banking
investor groups provides us with 8. total for each of the three
financing periods of the year. The remainder of our requirements
we will have to fill by going to the commercial banks.
The tentative schedule for the year calls for total borrowing of
$48 billions from non-banking sources, and $22 billions from bank-
ing sources. Borrowing from banks for the year would be held to
approximately the same figure as in 1942, although the amount of
total Federal borrowing required will be much higher. This means
that the tentative program would call for financing the entire
increase in the deficit this year over last year from non-banking
sources.
Getting $25 billions from the people
In order to sell $48 billions of securities outside of the banks
this year, the tentative schedule calls for selling $25 billions
to individuals. If we expect to do this, it will be necessary to
adopt 8. widespread campaign to reach all income groups. Our own
economists and consulting economists point out that the bulk of
the money which we must get in 1943 must come from those people
Regraded Unclassified
- 6 -
253
earning from $1,000 to $5,000 net. They will have three quarters
of the current incomes after taxes; and we must urge these people
to do much better than the 10 percent we have asked them for up
until now.
IT IS OBVIOUS THAT EVERY PERSON RECEIVING INCOME ABOVE THE BAREST
SUBSISTENCE LEVEL WILL HAVE TO BE REACHED IN OUR CAMPAIGNS IF WE
ARE TO SUCCEED IN OUR GOAL OF RAISING $25 BILLIONS FROM THE SALE
OF SECURITIES TO INDIVIDUALS THIS YEAR.
Inflation
I am not sure that the American people really understand the re-
lationship of war bonds to inflation. Certainly it is not enough
simply to tell them that they have a great amount of excess cash
which must be siphoned off if prices are not to be bid up out of
sight, when as a matter of fact the average person never thinks
of himself as holding "excess" cash. Moreover, he -- personally --
never actually "bid" against anybody for a porterhouse steak in
his life. But when you take all of these average Americans as a
group, it is a different story.
It is very important that the total excess money should be saved
rather than used collectively to bid up prices. Ideally it should
be invested to a very large extent in Government securities to
close the circuit between the matching deficit of the Government
and the surplus of everyone else.
I am hoping you can help to explain this difficult idea to the
American people.
A final remark
Before I close, I want to tell you how much I appreciate the
wonderful cooperation we have been receiving in connection with
the selling of our bonds. You know that there may be some feeling
that Washington, D. C., is 80 filled with people on the Government
payroll that a significant part of the money represented by 8. war
bond must be detoured into the maintenance of a bond selling
bureau.
Actually, this is not the case. The cost of selling bonds is very
small. This is because hundreds of thousands of volunteers across
the country have taken over the job of selling. Management and
Regraded Unclassified
154
- 7 -
labor have pulled together to put over the payroll savings plan,
under which more than 25 million working people now regularly
invest almost 9 percent of their wages and salaries. Manufactur-
ing and retail firms, large and small, have given us, free of
charge, millions of dollars worth of advertising space and radio
time. The Federal Reserve System and housands of banks working
with them have worked hard in this bond-selling job. You know,
of course, how much the press has been doing.
XXXX
I trust that you will forgive this unusual means of reaching you.
These are unusual times and WB need your help. To help us to the
full extent of your capacity you should know the facts, and this
is the best way I know to get them to you. Although this memo-
randum is not intended for publication, please feel free to use
any of the material included as you see fit. I extend, for the
Treasury Department, our thanks for the help you have already
given us in selling War Bonds. I know very well that as good
Americans you will continue it.
Regraded Unclassified
155
(The background information
presented herewith may be used
in news stories and editorials
appearing Tuesday, April 13,
1943, and thereafter.
The attached tables summarize the tentative financing
program and the sources of funds for the calendar year 1943.
Table A. shows the estimated production for the country
during the years 1941, 1942, and 1943. Table B. analyzes the
estimated uses of the income generated by this production.
Table C. shows the uses of personal savings.
Table 1. outlines the estimated sources of funds for Treas-
ury borrowing from July 1941 through December 1942 by investor
groups. Table 2. shows the estimated sources of funds for the
calendar year 1943 under a series of tentative schedules to
increase the participation of non-banking investors during the
year. Table 3 analyzes the distribution of personal incomes
by size classes,
All of the figures shown in these tables are, of course,
estimates, and are subject to change from time to time, The
figures for 1943 are naturally subject to a wider margin of
error than the estimates reflecting the actual situation in the
post. The tentative financing program for obvious reasons can-
not be a hard and fast plan, but is illustrative of how the
Treasury views the situation at this time.
Regraded Unclassified
Table A
Production of Goods and Services, Calendar Years 1941-1943
by 6-month Periods
(Annual rates - in billions of dollars)
:
1941
:
1942
:
1943
: First : Second : First : Second :. First : Second : Full
:
half
:
half
:
half
:
half
:
half
:
half
:
year
(
In current prices
) (.In January 1943 prices.)
War 1/
8
15
35
63
84
96
90
Federal Government (except war) 1/
6
5
5
5
5
5
5
State and local Governments
8
8
8
8
7
7
7
Private capital goods:
Purchased by business
15
17
11
2
o
-1
-1
Purchased by consumers 2/
2
3
2
1
1
1
1
Total
17
20
13
3
1
0
0
Consumers' goods and services 2/
74
78
81
83
76
69
73
Gross national product
113
126
142
162
173
177
175
Office of the Secretary of the Treasury, Division of Research and Statistics.
March 1, 1943.
1/ Axcludes Government expenditures not constituting a drain on gross national product.
2/
Total consumer spendings consist of purchases of (1) private capital goods and (2) consumers'
goods and services.
31 Represents excess of liouidation of inventories (net) over expenditures for plant and
equipment, etc.
egraded Unclassified
157
Table B
Uses of Funds Generated by Production, Calender Years 1941-1943
by 6-month Periods
(Annuel rates - in billions of dollars)
:
1941
:
1942
:
1943
: First : Second : First : Second : First : Second : Full
: half
:
half
: half
:
half
: half
:
helf
:
year
(
In current prices
) (..In January 1943 prices.)
Personal savings: ordinary savings
and pressure funds
6
12
19
31
38
52
45
Social Security accumulations, etc.
1
2
2
3
3
3
3
Business accumulations
-1
-1
3
19
19
20
20
Federal taxes paid
8
7
16
15
29
26
27
State and local taxes paid
8
8
8
8
7
7
7
Spent for private capital goods:
By business
15
17
11
2
0
-1
-1 31
By private persons 2/
2
3
2
1
1
1
1
Total
17
20
13
3
1
0
0
Spent for consumers' goods end services 2/
74
78
81
83
76
69
73
Gross national product
113
126
142
162
173
177
175
Office of the Secretary of the Treasury. Division of Research and Statistics.
March 1. 1943.
1/
Adjusted for transfer of purchasing power through pensions, relief, etc.
?/
Total consumer spendings consist of purchases of (1) private canital goods end (2) consuners'
goods nnd services.
3/ Represents excess of licuidation of inventories (net) over expenditures for plant and
equipment, etc.
Regraded Unclassified
158
Table C
Uses of Personal Savings, Calendar Years 1941-1943
by 6-month Periods
(Annual rates - in billions of dollars)
:
1941
:
1942
:
1943
: First : Second : First : Second : First : Second : Full
: half : half : half : half : half : half : year
(
In current pric
8
)
(.In January 1943 prices.)
Private insurance
2.0
2.1
2.2
2.4
2.4
2.6
2.5
Mutual savings bank deposits
-.2
-.3
-.5
.6
1.2
1.8
1.5
-2.6
-.7
2.8
2.8
2.8
2.6
2.7
Debt repayment
Investment in Federal securities
1.6
5.0
8.8
11.6
(
(
31.2
45.0
38.1
Currency and commercial bank deposits. etc. 1/ .
4.8
6.1
6.1
13.2
(
Total
5.6
12.2
19.4
30.6
37.6
52.0
44.8
Office of the Secretary of the Treasury, Division of R search and Statistics.
March 1. 1943.
Includes minor amounts of non-Foderal securities and savings and loan association shares.
Unclassified
Table 1: Recent Experience
Comparison by Investor Groups of Current Savings and Accumulations
Received and Federal Securities Absorbed, By Semi-annual Periods,
July 1941 - December 1942
(In billions of dellars)
Source of funds and
:
July - December 1941
:
January - June 1942
:
July - December 1942
:
investor group
Savings
: Securities :
:
Percent
Savings
: Securities :
:
Savings
: Securities :
: received
Percent
Percent
:
absorbed :
:
received
:
absorbed :
: received
: absorbed :
A. Nonbanking sources:
1. Personal savings:
a. Insurance companies
1.1
1.0
1.1
.9
1.2
2.1
b. Mutual savings banks.
-.2
-3
-.3
.2
-3
-7
c. Recipients of debt
repayment
-.4
-
1.4
-
1.4
-
d. Individuals
5.6
2.5
45%
7-5
4.4
59%
12.4
5.6
47%
e. Total
6.1
3.8
9.7
5.5
15.3
8.6
2. Corporate accumulations:
a. Corporations 2/
--7
2.4
1.9
1.0
53%
9-5
6.8
72%
3. Accumulations in Govern-
mental funds:
a. Federal 3/
1.0
1.0
1.0
1.1
1.3
1.6
b. State and local
.2
.1
.1
.1
-
.2
c. Total
1.2
1.1
1.1
1.2
1.3
1.8
4. Total for nonbanking
sources
6.6
7.3
12.7
7.7
26.1
17.2
B. Banking sources
1.7
5.0
17.9
C. Total borrowing
9.0
12.7
35.1
Office of the Secretary of the Treasury, Division of Research and Statistics.
March 1, 1943.
Individuals, partnerships and personal trust accounts.
Corporations other than banks and insurance companies.
3/
Federal agencies and trust funds.
4/
State and local Governments, thoir agencios. sinking and trust funds.
Regraded Unclassified
160
Table 2: Tentative Schedule for 1943
Comparison by Investor Groups of Current Savings and Accumulations
Received and Federal Securities Absorbed, By Four-Month Periods.
Calendar Year 1943
(In billions of dollars)
Source of funds and
:
January-April
:
May-August
:
September-December
:
Total for year
investor group
: Savings : Securities
:
Percent
: Savings : Securities :
received: absorbed
Percent
:
Savings : Socurities
Percent
: Savings : Securities
Percent
:
:received: absorbed
:
received: absorbed
:
received: absorbed
:
A. Nonbanking sources:
1. Personal savings:
a. Insurance companios
.8
1.1
.8
1.1
-9
1.1
2.5
3.3
b. Mutual savings banks.
-4
-5
.4
.5
-7
.5
1.5
1.8
C. Recipients of dobt
repayment
1.1
-
1.0
-
.6
-
2.7
-
d. Individuals 1/
9.6
5-3
55%
14.7
9.6
65%
13.8
10.4
75%
38.1
25.3
66%
0. Total
11.9
6.9
16.9
11.2
16.0
12.3
44.8
30.4
2. Corporate accumulations:
a. Recipients of debt
repayment
.6
-
1.0
-
1.3
-
2.9
I
b. Corporations 2/
5.6
4.2
75%
5.6
4.5
80%
5.2
4.4
85%
16.4
13.1
80%
c. Total
6.2
4.2
6.6
4.5
6.5
4.4
19.3
13.1
3. Accumulations in Govern-
montal funds:
a. Fodoral 3/
.6
1.0
1.3
1.5
1.2
1.4
3.1
3.9
b. State and local
-
.2
-
.1
-
.2
-
.5
c. Total
.6
1.2
1.3
1.6
1.2
1.6
3.1
4.4
4. Total for nonbanking
sources
18.7
12.3
24.8
17.3
23.7
18.3
67.2
47.9
3. Banking sources
8.9
8.5
5.4
22.8
C. Total borrowing
21.2
25.8
23.7
70.7
Office of the Socretary of the Tronsury, Division of Rosearch nnd Statistics.
March 1. 1943
Individuals, partnorships and personal trust accounts.
Corporations other than banks and insurance companios.
31
Federal agencies and trust funds.
4/
State and local Governments, their agencies, sinking and trust funds.
Regraded Unclassified
161
PRELIMINARY
Table 3
Analysis of Personal Incomes by Size Classes
Calendar Year 1943
:
:
Distribution by net income groups
:
:
: Total
:
:
:
:
:
0-
:
:
$1,000-
:
$3,000-
:
$ 5,000-
$10,000
:
:
$1,000
: 3,000
: 5,000
10,000
and over
:
:
:
:
I. Number of income recipients
Millions of persons
63
19.6
37.1
5.2
1.1
.4
II. Dollar figures, in January 1943 prices (in billions)
Gross incomes (total income payments)
132
14.9
72.7
23.3
8.9
12.4
Loss: Personal taxes
13
.6
4.8
2.3
1.4
4.2
Equals disposable incomes
119
14.4
67.9
21.0
7.5
8.2
Loss: Consumer spondings
74
Equals personal savings
45 3/
Office of the Secrotary of the Treasury, Division of Research and Statistics.
March 1, 1943.
Note: Figuros nro rounded and do not necessarily ndd to totals.
1/
Excluding individuals under 18 required to report incomos ns part of thoir perents' returns.
State and local as well as Federal.
31
Distribution by income groups not estimated.
Regraded Unclassified
162
APR 1 n 10A9
Dear Frank,
I read with a great deal of interest the statement
which you released to the papers yesterday on behalf of the
Allied Newspaper Council.
It was an excellent statement and I an sure it is
going to do much to aid us in our April Drive. Altogether
it would appear that you have helped us immeasurably in
getting away to a good start, and I am indeed appreciative
of the work you are doing.
Sincerely yours,
(Signed) H. Morganthan. Jr
Mr. Frank Tripp
Chairman, Allied Newspaper Council
X Gannett Newspapers
Elmira, N.Y.
TROsces
Regraded Unclassified
163
The Evening Star
APR - 9 1943
newapapermen, know about this ter-
Tripp-Pledges Aid
Tiole war, These truths inspire us
to do our duty in this second war
loan campaign.
Of Newspapermen to
"Hitlerism has ravaged and
thrown into the world's gutters the
free volce of free information. If
any vestige of Hillerism were to
New War Loan Drive
triumph out of the war, American
newspapers, greatest and most inde-
pendent in the history of mankind.
Head of Press Group
would be sucked Into the sewers,
Finds Industry Ready
Newspapermen Defend Herliage,
"Newspapermen would not be
For National Compaign
worth their salt If they did not fight
By the Associated Press,
with all their souls and might and
skill and courage to defend their
Frank E. Tripp, chairman of the
heritage.
Allied Newspaper Council, today as-
"The heritage of American news-
serted that America's newspaper-
papermen was bought with sweat,
men-remembering that their own
blood and tears, Once this country
heritage "was bought with sweat,
had an underground press as Europe
blood and tears"-are marshaled on
has It today. Once we had our
the home front lines, ready "to help
presses smashed and our editors
their Government borrow 13 billion
murdered because newspapers dared
fighting dollars from Americans
to fight for the truth.
from every station of life."
"In this war newspapermen are
"They await the zero hour on
living up to the grandest traditions
April 12 to strike a blow for their own
of a free press. They are dying on
preservation as well as the preser-
the battlefield and on the seas.
vation of all human rights," Mr.
"Can we whose duty and lot In
Tripp said in outlining plans for
this war is to man the presses at
press participation in the Treasury's
home do less than to attempt to
second war loan campaign, stated to
match the record of these true sol-
start Monday.
diers of the prese?
Press Joins Front Line.
"The Allied Newspaper Council, of
His statement follows:
which I have the bonor of being
"Newspapermen of the country go
chairman, was formed in answer to
into battle on April 12th on the
the appeal of Secretary of the Treas-
home front to help their Govern-
ury Henry Morgenthau, Jr., for an
ment borrow 12 billion fighting del-
all-out contribution by newspapers-
lars from Americans from every eta-
daily and weekly. It has placed the
tion of life,
problem of publicizing the second
"Newspapers In every nation-
War loan campaign squarely up to
newspapers with small circulations
the individual publishers and editors.
and newspapers with large circula-
The response has been heartening
time in point of humber of sub-
"I am sure that every reader of a
scribers, but all equally great in the
newspaper in America will know why
service of their country in an hour
the Government is asking for this
of need-are listed in the front
loan of $13,000,000.000 and what is
lines. They await the zero hour on
expected of each citizen during the
April 12. to strike a blow for their
drive. or course, in order to do
own perservation as well as the
this, your newspaper must do ita
preservation of all human rights.
part. In the manner In which the
"Millions upon millions of lines of
appeal is presented by each news-
advertising space and countless mil-
paper and, the response of Its adver-
lions of lines of editorial space will
tisers and subscribers we will have
spill forth the messages of the second
& moving national picture of the pa-
war loan appeal with the force and
triotiam, resourcefulness and the in-
genuity of 8 free press freely acting
"There are certain truths we, as
to aid & tree government
answer for Secretary
Regraded Unclassified
164
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE April 10, 1943
TO
Secretary Morgenthau
FROM
Stuart Peabody S.P
The attached ad which you liked was prepared through
the Advertising Council by Young and Rubicam. There is
no sponsor indicated and I would, therefore, guess that
this is a contribution of space by the newspaper itself.
As you probably know, we keep & record of all of
these and send an acknowledgment card to the sponsor.
Regraded Unclassified
165
165.
THE EVENING STAR, WASHINGTON, n. c, WEDNESDAY, APRIL 1942.
The 2nd War Loan
Starts April 12
FINANCE
WAR
COMMITTEE
13 billion dollars must be raised!
HE GOVERNMENT of the United
lato actual bettle. Our Tonors have already
yourself con of the biggest favors of your life!
tionsi $25, 850, $100, 8500, $1000. Re-
States is asking us to lend it 13
begun to mount-end they will not grow less.
For United States War Bends are the greatest
demption: any time 60 days after issue date.
And We've Got to Buy
investment in the world-bar none- They're
Prices 75% of maturity value.
billion dollars in the next few weeks.
investments tailored to Et your particular site-
Wecan do it. And we must do it. Every
More War Bonds!
215% Treasury Bonds of 1964-1969: Read-
stion. And they give you the chance of a life-
American must realize the truth:
Sure we're all buying War Bonds now. Bet
time to order and get the kind of world you
By marketable, acceptable as bank collateral,
we've got to help pay for our increased fight-
three Bonds are ideal Investments for trust
vant to live in after this var, Every cent you
In this, our toughest war, we've made . good
Ing and building We've got to match, as
put in War Bonds MV will help to guarantee
funds, estates and individuals. A special fea-
start. We've trained a lot of inro-mado .
best we can, the sacrifice of those Americans
plenty of pesortime jobs making peace-living
tare provides that they may be redeemed at
lot of wespons-built . lot of ships.
who are tailing and sweating en . donem battle-
for every one of 118.
per and accrued Interest for the purpose of
But It's only - start. No man or vomen
fronts-with the bloodiest yet to come. The
For your Country's sake-for your our
estisfying Federal estate taxes. Dated April 15,
among - would contrad for a single instant
Stant fact la this: to keep our war machine
all you can?
1943; due June 15, 1969. Denominations:
that we're we doing enough now to win this war!
going, we're got to dig up 13 billion extra
8500, $1000, $5000, $10,000, $100,000--
dollars this month. 13 billion dollars 0112 and
There Are 7 Different Types of U.S.
also $1,000,000 if registered. Redemption
We've Got to Build Morel
above our regular Vir Bond buying!
Government Securities-Choose
Not eallable ull June 15, 1964; thereafter at
We broke all records building 8 million tons
la the next few weeks you may be visited by
The Ones Best Sulted For You:
par and accrued interest on any interest date
of shipping last year. But grim-faced Army
ame of the thousands of volunteers who are
at 4 months' notice. Subject to Federal taxes
and Navy men will tell you that the 18 MIL-
contributing their time and effort to this Drive.
United States War Savings Bonds-Series &
only. Price: par and accrued Interest.
LION toma we're building this year still wen't
But don't wait for him. Make up your mind
The perfect investment for individual and fam-
be enough!
now that before this deive is ever, you're g
By savings. Given you back B4 for every $5
Other Securities: Series "C" Tax Notes: 16%
year
1
when the - Designed espectally
Continutor at 2% Treasury
la
Amirica
-
Pail
Ollin,
-
place
where
they
sull
War
for the smaller Investion. Dated lat day of
Bands of 1950-1952, Dalted States Sevings
From
sev
un
the
I
Bends, and da your daty. And don't ever for-
month is which payment la received. Interests
Bands Series "F", United States Serings Bende
r
is
1
year
I
brothers,
husbands
I
- this doing year daty, you're doing
2.9% a your if beld to maturity. Deminina-
Series "6"
THEY GIVE THEIR LIVES
YOU LEND YOUR MONEY!
TREASURY WAR FINANCE COMMITTEE-WAR SAVINGS STAFF-VICTORY FUND COMMITTEE
Regraded Unclassified
166
APR 10 1943
Dear Mr. Connolly:
I want to thank you very much for your
telegram of April 6th.
It is certainly gratifying to know that
an organization such as yours is so wholeheartedly
behind the Treasury Department's Second War Loan
Drive.
Sincerely,
(Signed) Henry Morganthan, Jr.
Mr. J. v. Connolly, President
International News Service
New York, New York
VFC/mon
Photo of incoming in Diary
File to Thompson
Regraded Unclassified
1943 APR 6 PM 4 37
066 29 DL - - 1 EXTRA
WUX CD NEWYORK NY APR 6 1943 402P
HENRY MORGENTHAU
1 **** G R A E E P
THIS IS TO CONFIRM MY PROMISE MADE TO MR CALLAHAN THAT
INTERNATIONAL NEWS SERVICE WILL GIVE THE TREASURY DEPARTMENT
ITS UTMOST COOPERATION IN THE DEPARTMENTS FORTHCOMING BOND
T
DRIVE
J V CONNOLLY PRESIDENT INTERNATIONAL NEWS SERVICE.
436P.
Regraded Unclassified
168
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE April 10, 1943
TO: decretary Morgentheu
FROM: Amerson weldman
Subject: Norfolk
Norfolk is e. "resentful" town, and this fact must be
taken into consideration when looking at the Wer Savings
picture.
When + say "resentful" I meen the following; reported
to ne during interviews with Norfolkians:
1) The civilians in the Norfolk area resent the
"sgilors." Two civilians with whom I spoke said that the
"asilors" come into Norfolk from their base and "est do our
food. They have their own food out at the base, for which
the texpayers pay: But they don't eat that. Instead they
come into Norfolk and let food, already prepared for them,
go to waste. They crowd our restaurants SO we can't get a
meal. They crowd our movies so we can't see a picture show. if
These two men whom I quote (one 8 cab driver, the other a
local union leader) only put into words a feeling which I
could sense in watching street, resteurant and hotel scenes.
There seemed to be no mingling of civilians and sailors.
2) The Navy (sailors as well as officers) feel the
resentment of the people of Norfolk. They don't like the
people of Norfolk. They feel that the people of Norfolk
are unfriendly, inhosmitable. one seilor summed it up. He
Regraded Unclassified
- 2
169
said: "Then I got my training out In Chicago I had more
than enough things to do in my off time. The people were
swell, too. The only trouble was that I didn't have the
'liberty' to do everything and gn everywhere I could. In
Norfelk it's different. I've got ell the 'liberty' in
the world but no place to spend it."
3) Working nen with whom I spoke resented the housing
eveilable to them: "There are holes in the walls," one of
them said, describing his "room." He edded: "four beds in
B room, two to a bed. I got bedbugs crawling on ne
I'd
be ashamed to let my friends know how I'm living
4) Local union leaders and some minor executives of
Norfolk industry resented the Victory Tax
resented the
continued uncertainty over the future of income taxes.
They were vociferous on the subject of higher prices and the
increased cost of living.
5) Civilians and sailors resented the overcrowded
condition of the city. There has been an increase in the
town's population of almost 200,0, and the town is not of the
"expandable" type.
****
I spoke with approximately 20 civilians -- working men
and women, union labor leaders and minor representatives of
menagement -- and from no one of their did I get 8 spontaneous
statement on the urgency of the war. NO one of them seened
to have any conception of the importance of to-the-limit
buying of Wer Bonds as 8 means of helping to win the wer.
Regraded Unclassified
- 3 -
170
Nor was there any mention of the importance of such Bond-
buying 88 a menns of helping to keep prices down
helping
to prevent uncontrolled inflation. There was some mention
of the value of War Bonds as a personal investment.
of these civilians, the ones who showed the greatest
understanding of the necessity of buying Bonds out of pay
were carpenters end bricklayers. These migratory workingmen
said that they were "willing" to have pert of their pay set
aside for Bonds through the payroll savings plen. They
edded that the reason they now are not buying Bonds through
the payroll savings plan is due to the fect that such a
plen has not been set up where they work. They said that,
on other jobs, they had bought Bonds through payroll savings.
(They had recently worked in the Egst.) The great majority-
showed no Bond-buying initiative, only acceptance. Except
for a small minority they are not now buying Bonds through
outlets such as banks end post offices.
Some thumbnail interviews with these bricklayers follow:
a) Foreman on a hospital construction job is buying
Bonds with 50% of his pay "to help win the war and for savings."
b) Swedish-American bricklayer: said he had no War
Bonds, was buying none; wes in 1-A and his wife needed the
money if he got drefted.
c) Italian-American bricklayer: is not buying Bonds
now, but like idea of payroll sevings; had bought Bonds this
way, on past jobs, where they had plan.
Regraded Unclassified
4 -
171
d) Bricklayer from New York (of Jewish religion):
wife buying Bonds at home out of money he sends her. Would
11.0 to see payroll savings plan established on present job.
He was "willing to help Government in everything it needed!
e) Irish-American bricklayer from Boston: He would
buy Bonds on the payroll savings plan if there wes such a
plan
not buying Bonds now.
f) Bricklayer from New York (Negro): liked Bonds
to help Government and for savings
not buying any now.
had bought them on past jobs through payroll savings. He
sali Lhis WBE the only Yes Le'd EVEI get Bonds. "If
i get the money I spend it, If I don't get the any I
don't spend it
and 1 get the Bonds. He, more than the
others, WSS preoccupied with housing.
Naturally the housing situation is harder on Kegroes
than on whites. However, I did see one Megro housing
development which was the superior of any that I saw for
whites. This caused comment by whites with whom I spoke,
to the effect: "It's just 8 waste to give that over to
Niggers. They'll ruin it all in a couple of weeks
"
Still,
there was no apparent "race" feeling. A white men, with
whom I spoke, explained this by saying that "Norfolk needs
the Negroes now
11
*****
Scattered interviews:
1) Working woman: "I work in this soft drink stand and
Regraded Unclassified
- 5 -
172
get 625 a week. My husband works at the building trades
rein or shine
day in and day out
No, we don't buy
no Bonds. Sure
my husband gets good money. But we drink
it all up
"
2) Several workingmen from the shipyards: They were
more incommunicative then the others: 8) "We 20° to buy
Bonds on the job, buddy. Voluntary? That's e laugh. You
know what happened to one guy who said he bought his Bonds
at the post office and didn't want to buy Bonds through the
payroll savings plan? Why, they give him his time and told
him to go down and work for the post office b) "What
about higher prices? My wife came home yesterday and told me
the men at the store wanted $1.05 for three pounds of turnip
greens! c) "Bonds 're all right. But how about income
taxes? And what are they going to do about them? And how
about the way prices are going up? Sure
I buy what Bonds
I can. I buy what I can afford
if
I spoke with six local union leaders. All of these
were white, excepting two Negroes whom I will indicate AS such:
1) Local union leader "A" said: "Most of the men feel,
about their Bond buying, that the Government is using this
information in order to check up on how little they can live
on
The men are forced to buy
If they don't buy they
don't work
I buy my Bonds out of my pocket. I don't
like the payroll savings plan. I don't like anybody spending
my money
No, I'm not buying regularly. And I don't like
Regraded Unclassified
- 6 -
173
these drives
one after another
War Bonds or anything
else. They are just too many drains on a man's pay." From
the way he spoke War Bonds were another form of taxation.
Be said, too: "Most of the people buying Bonds now bought
Liberty Bonds in the last war
got swindled out of their
money by the banks
expect they'll get swindled out of it
again
The housing in this town 18 lousy. The houses
aren't houses, they are shacks. They are firstraps. There's
a lot of people going to get burned up. Why, you can't even
get insurance on these houses they're so bad
=
2) Local union leader "B" said: "Taxes are too high.
I don't mean only such things as income taxes and other direct
taxes. I mean all those indirect taxes which make everything
cost more
The tapering off of Bond-buying since the first
of the year is due to the higher cost of living (with which
the other union leaders agreed) and higher income taxes
(with which they did not agree). In the state of Virginia,
labor as E whole is not recognized in the Bond drives to a
point of putting credit where credit is due. The firms get
the flag
not the union (with which statement all union
leaders agreed)." All six union leaders "resented labor's
treatment by the press." Personally he seemed to have a low
regard for the value of Mar Bonds either to the country or
the individual. He illustrated his belief by a remark which
he attributed to his wife: "They just don't look like money
to me!"
Regraded Unclassified
- 7 -
174
Labor leaders "A" and "B" greatly resent the Victory
Tax. They say that they don't understand where the money
goes. They understand income taxes but not the Victory
Tax. They blame the Victory Tax for a decrease in Bond
buying by workers.
31 Local union leader "C" said: "The terrific increase in
the cost of living is hurting Bond sales. Another reason
Bond sales are not better is that many men who work here
have to send money back home to meintain their families.
Also, many working men have to help take care of the families
of relatives who've been drafted." I asked this man why
payroll savings plans had not been established on some
projects
...
such as the hospital construction job. He seid
that it was the management's fault; that the management
would not install such a plan where it had to pay the cost
itself. He said that if this construction job had been on
a cost-plus basis that the management would have installed
G payroll savings plan because, then, it could have passed the
cost of this plan's operation on to the Government. He said
that the only way to get the working man and woman to invest
substantially in War Bonds was through the payroll savings
plan
that if they got the money in their pockets they
would spend it.
This man, in a discussion with a representative of
another union, objected strenuously to the men of that other
Regraded Unclassified
- 8 -
175
union doing work which he seid should be done by the men
of his union (on a housing project). There was no question
here of the speed with which such work should be done or
wight be done If one crew of men did the very minor Job to
which he referred; there was no question here of the need
for the whole job to be finished as 4 part of the war effort.
4) Local union leader "D" seid: "The Victory Tax is
hurting War Bond sales. A working man looks at his Victory
Tax deduction of 5% and then just outs his War Bond buying
in half
1 buy my War Bonds at the post office. They're
e good investment. When you have War Bonds you don't spend
the money
I also buy war Bonds for patriotic reasons
=
5) Local union leader "3" -- EL negro -- soid: "Most
of my men (dock workers) are buying a few Bonds
some out
of pay
some out of pocket. I believe in payroll savings
as best. If you leove the money in their pockets they' 11
spend it. Most men buy Bonds through payroll savings in
this erea because they are forced into it
...
some because
of 'loyalty'
Most of my men are Ignorant and need to be
...
educated. I believe that somebody ought to meet with the
'locals' and educate them on war Bonds.
...
War Bonds are
as good as life insurance as an Investment
=
He inferred
that he thought it was a good thing for the workers that
many of them had been made to feel, by their employers, that
they must buy Bonds "Not enough attention is poid to or
credit given labor unions in promoting Bonds.
Regraded Unclassified
- 9 -
176
6) Local union leader "F" -- a negro -- said: "My
men (chenicel workers) have voted for 10% Bond deductions
from pay. Some companies are cooperating and some are net
cooperating in establishing payroll plans
I want to
see employers putting more pressure on the workers to buy
Bonds. The workers are making more money end they can buy
more Bonds. If they don't invest their money in Bonds they
won't have It when they need it
We need men to come into
this aree and sit down with the workers and explain Bonds to
them. Wall stickers are not enough
The workers who buy,
buy for investment
others for showing patriotism
I
think if you put on a drive like the Red Cross did the men
would buy more Bonds.
7) A member (Negro) of the pile drivers' local seid:
"My work is irregular. I work Et day now. I work a week
later. I'm not buying Bonds now
What happens to my
money if I'm buying Bonds through payroll plan and I get laid
off
?
Nobody explains this about Wer Bonds
I haven't
heard enough about War Bonds to be interested in them
if
*****
The Payroll Savings official of a company employing
about 2500 workers said: "I'm buying Bonds with all I cen
spare
all I can afford. It's the only safe and stable
investment on the market outside of life insurance
Income
taxes caused a drop in Wer Bond buying by our men. First of
Regraded Unclassified
- 10 -
177
the year 85% of the men were buying, with 92% of gross pay.
Now It's dropped to 50% of the men, with 6.6% of gross pay.
This company does not force its men to buy Bonds. Many
companies in Norfolk do. I think that the foremen on the
jobs should do the selling. (The labor union leaders
disagreed with this thought, saying that the foreman didn't
have time and wouldn't be interested in handling this Job
along with his OWD work.) The men on this job buy Bonds only
after solicitation. They don't volunteer to buy Bonds or
increase their allotment
It was easier to sell Bonds
before all this confusion about income taxes
The men are
worried about higher taxes and the higher cost of living."
He summed up, as the present reaction of his firm's clerical
help: "If they (the Government) don't know what they want,
why should we put our money into Bonds? It's foolish for a
man to put into Bonds money he'll have to pay into taxes. if
"The Company would have 8 better payroll savings record
if we'd put the pressure on the workers to buy insteed of
just leading them to buy as we have
if
*****
A woman clerical worker at the above plant Is buying
Bonds through payroll savings
"because we're supposed
to
to help win the war." Before working for this company
she bought stamps. She likes the payroll plan better because
"it's quicker than buying stemps."
Regraded Unclassified
- 11 -
178
Another women clerical worker -- in 8 downtown Norfolk
firm not engaged in war work -- is buying Bonds regularly.
She's buying because it helps to win the war. "I've got
four brothers in uniform
...
I think that everybody ought
to be forced to buy Bonds
If
*****
Before I left Norfolk I spent E number of hours wendering
around the heart of the town
on the streets and in and out
of stores, pool rooms and hotels.
The town 1s full of money and it's in the hands of
working men and women. In one "pool parlor" I saw games
played for from two dollars to ten dollars and an offer
was made to play H single game for 250
...
with the money
thrown upon the pool table. The participants In these games
wore workingmen's clothing and workers' badges. This pool
room was crowded with sailors as well as workingmen. The
suilors did not mingle with the civilians.
*****
As a comment on the "higher cost of living," I found
that restaurant prices compare well with prices in Washington
and that a very good evening meal can be had in one of the
town's good eating places for 75 cents.
During my day's interviews I was invited to look at work
sheets and wage scales which showed that a semi-skilled worker
can earn from 475 A week on up.
Regraded Unclassified
179
-12-
In the first part of this report I commented on
resetions of Navy men to Norfolk. My comments resulted
from conversations with four sailors and one officer.
Regraded Unclassified
180
April 10, 1943
Dear Pat:
Your poster to buy War Stamps
was the bright spot of the day for
me. I think you show a great deal
of talent and your parents should be
very proud of you.
I have only one complaint to
make and that is that you have not
called on me in years. I think it
is high time that you and your brother
came to see me.
Yours sincerely,
(Signed) H. Morgenthan, Jr.
Miss Patricia Sullivan,
4871 Glenwood Road,
Washington, D. C.
File in Diary
Regraded Unclassified
SOW 1
I'M
b
The kne C 8
181
182
FEDERAL RESERVE OPERATIONS IN GOVERNMENT SECURITIES
Page 1
Column A shows Federal Seserve
Marketable Issues:
operations is millions of
Special one-day certificates g/1
Column , shows price changes La 32nde
Market purchases
dollars as follower
Net Increase.
-d
for all securities except certificates.
Market sales
Net decrease
-4
For certificates. Column a shiws
Direct purchases from Treasury -d
pield changes in decimale.
Maturities
STRICTLY
à
last Week
This Week
Mestag
Wednesday
Thursday
Friday
Daturday
Mar. 29
30
31
Apr. 1
Full Vook
Inter
Description
Monday F
Tuesday
Velnesday
Toursday
Friday
Saturday
2
3
Agr. 5
6
Fall Vest
7
A
3
6
3
3
A
3
9.
to
A
A
&
3
A
3
A
B
A
B
A
3
A.
3
I. Sunnary
&
3
A
3
à
a
A
B
Marketable Leagee:
+206.9
+403.5
+169.0
+68,6
*100.0
*160.4
*1128.3
-221.7
Market purchases
+276.€
+467.2
+116.2
-35.6
-61.2
-141.4
-62.1
+113.1
+58.6
*134.1
+1165.9
-73.8
-615.8
Market sales
-50.8
-31.9
-53.1
-95.4
-192.7
-57.0
-510.9
Direct purchases from Treasury.
-a104.0
m104.0
Maturities
-99.3
-19.3
-480.0
-4200,0
-164.0
Special one-tay certificates:
-440,0
-4384.0
Net change
-53.1
+167.9
-220.7
-32.7
-41.4
+98,2
+24.5
Total not increase (-) or decrease (-)
+195.9
+435.3
-36.2
+17.7
5919.1
-134.2
*77.1
+555.6
Vetnesday report of total portfelle
6549.0
II. Taxable securities
Bills - all issues combined
*206.9
+360.6
+162.0
+56,7
+51.9
+156.6
+994.6
Market purchases
*250.3
*383.2
+103.6
+105.1
+53.2
+134.1
+1029.5
-60.7
-21,6
-211,6
-11-3
-136.5
-61.1
-570.9
Market sales
-80.8
-31.9
-53.1
-95.4
-192.7
-57.0
-510.9
a104.0
104.0
Maturit
-*99.3
-*99.3
+146.2
*339.0
-153.6
-20,6
-86.6
+95.4
+319.8
Total net Increase - or decrease (-)
*169.4
*351.3
-48.8
+9.7
-139.5
+77.1
+419.2
Certificates
c 1
65% 0- 5-1 43
+21.8
+3.0
+7.8
+32.6
C 2
1/6 1- 6-1 43
+1.#
+1.9
-5.0
+6.7
+4.0
+3.5
+12.7
+,015
+18.6
-.01%
+2.0
+40.6
e
3
7/8 D - 11-1 43
+4.8
*13.0
*.015
+3,0
+.01
+20.5
+,02%
+.01%
+.01%
+.02%
C
-
7/8 1 - 12-1 43
+6.2
+.019
*56.4
*.01%
+6.0
4.02
.01%
+.015
+70.6
+,04%
+,01%
+.01%
+.02%
e
5
7/8 A - 2-1 -
*.02%
+.02
-.01%
+.019
+,04%
-180.0
-4200.0
-464.0
-d40.0
-4384.0
Special nue-tay certificates
Treasury notes
-1
-1
I
1
3/4% D - 9-15 MM
=1
=1
-1
-1
$ 2
1-1/4 C - 3-15 45
-1
+1.0
=1
+2.0
+3.0
7
, 3
3/4
3 12-15 45
-1
-1
-1
-1
, .
1
- 3-15 46
-1
-1
-1
-1
I 5
1-1/2 a 12-15 46
*.5
*.5
Treasury bonds
-1
-1
, 1
X
-
3-15
48-50
-1
-1
-1
-)
-1
+1
1 2
1-3/4
- 6-15
48
4
=1
-3
3 3
2
- 6-15 49-51
3 E
2
- 9-15 49-51
-1
=
-1
+1
I
2
- 12-15 49-51
-1
+1
+1
+1
+2
, 6
2
- 3-15 50-52
-1
-1
-2
=
+1
, 7
2
- 12-15 51-55
-1
-1
-1
-3
+1
+1
+1
+1
-1.0
+2
-1.0
+6
3
8
2-1/2
- 3-15 52-54
+1
-1
-1
-1
7
+1
+1
+2
+
, 9
2-1/4
6-15
55
-2
-2
+1
+1
+2
+3
1.
+6
$ 10
2-1/2
3-15
20-50
+2
-1
7
-2
-2
-1
-6
-1
+1
11
2-1/2
-
6-15
62-67
+1
-1
12
2-1/2
- 12-15
63-64
-1
-1
7
-1
+1
13
2-1/2
- 9-15 67-72
+1
-1
Quaranteed securities
-1
-1
0 1
000 1-1/85 2-15 is
-1
-1
-1
+10.0
+10.0
=1
G 2
EFC 1-1/8 , - 7-15 43
-1
-1
6 1
1FC 1
If - 4-15 dels
-1
-1
7
All taxable securities
Marketable Issues:
+206.9
+654.5
+110.6
-386.4
+166.5
+69.4
+18.)
+158.6
+1078.0
Market purchases
+265.1
+113.6
+55.2
-134.1
-1133.1
-60.7
-21.6
-77.3
-138.5
-62.1
-572.3
Market sales
-80.8
-31.9
-53.1
-95.4
-192.7
-57.0
-510.9
-211.6
Direct purchases from Treasury
-a104.0
à
les
e104.0
-
-w99.3
Special une-day certificates:
-480,0
-4200.0
-464.0
-440.0
-4384.0
Bes change
+66.2
+164,6
-50.2
+96.4
+18.2
Total net increase (+) or decrease (-)-
-184.2
+422.6
-38.0
+15.2
-137-5
+77.1
*522.8
-211.1
-47.9
Office of the Secretary of the Treasury, Division of Research and Statistics.
r Original figures revised.
Less then $50,000.
Purchases sad. sales recorded - of day of transaction and not day of delivery. Transactions after la s'alock are included is the next day.
Transactions are entered as of the day following that to which they apply. since date are not evailable matil the following morning.
Note: Data are reasted and say not att to the totals.
Regraded Unclassified
183
FEDERAL RESERVE OPERATIONS IN GOVERNMENT SECURITIES
Page 2
Column A above Federal Baserve
operations is millions of
Market purchases
dollars as follows:
Market sales 1/
Column . shows price changes is 32nds.
Maturities
Last Vesir
,
STRICTLY CONFIDENTIAL
Montay
Tuesday
Vednesday
Thursday
Friday
Naturday
this York
Mar. 29
30
31
Apr. 1
3
Full Yest
Index
2
Description
Monday ,
Tuesday
Velnesday
Thursday
Friday
A
,
3
Saturday
&
A.
I
A
3
&
9
A
Apr. 5
6
B
A
7
E
9
Full Vanic
3
10
A
3
A
3
III, Tax-exempt securities
A
a
à
3
&
3
A
a
A
3
-1
Treasury notes
-1
I
101
1-1/86 à - 5-15 kg
-1
-1
-3.5
-1
-
102
1
9-15 43
-1
-1
-1
-3.5
1-
I 103
1-1/8
-1
3 12-15 43
-1
1
1. 3-15 lala
-1
-1
.
-.-
105
3/4
A - 6-15 late
=
To
-1
-,-
-1
,
106
1
C 9-15 Lab
+1
+1
-1
,
107
3/4
3-15 -5
*.5
Treasury bonds
-2
+1.8
*10.5
*.5
-2
3 101
3-3/85
-
+3.5
7
6-15
43-47
+14.8
*1,2
7
+17.0
+.5
-2
3 102
+,6
*8.6
3-1/4
+8.2
+,6
- 10-15 43-45
1,5
+1,0
-2
+10.2
*.5
-1
+2.6
=1
=1
Y
-1
+32.8
-1
3 103
3-1/4
. 4-15 W4-45
+11.7
+2,1
+1.5
+1.0
+26.5
-1
-6
3 104
4
- 12-15 44-54
+.9
+1.0
-2
*.5
-2
+2.4
+1
-2
-2
1
3 105
2-3/4
*1
- 9-15
45-47
+2
7
-1
-1
-)
-
-1
3 106
-1
2-1/2
-2
12-15
-1
-6 3 107
+1
-1
-1
3-3/4
- 3-15
46-56
+1
-1
-1
=1
-3
, 108
3
-1
. 6-15 46-18
-1
-1
-)
-1
+1
=
, 109
3-1/8
is
- 6-15 46-49
-1
-3
3 110
4-1/1
- 10-15 47-52
-1
-1
Y
=1
-3
3 111
-1
2
- 12-15 47
-1
-2
a
112
2-3/4
- 3-15 48-51
-1
=1
-
-1
-1
113
2-1/2
- 9-15
48-
-1
-1
-1
114
-1
2
- 12-15 48-50
-2
-1
L-
+1
+1
+1
+3
, 115
3-1/8
-12-15 49-52
-1
-1
=1
+1
-,
+1
--5
+1
+1
+1
+2
-1.3
+6
116
-3.3
-2.6
+1
-,4
2-1/2
+1
- 12-15 49-53
+1
+1
+2
*1
-6.3
d.
117
-1
2-1/2
- 9-15 50-52
-1
-1
-,2
+1
+1
-2.0
+1
+1
---
*1
+3
-3.0
*7
118
2-3/4
-1
- 6-15 51-54
+2
-1,2
*]
-1
-1
+1
+3
-1.2
+6
119
-1
3
4.5
-4.0
- 9-15 51-55
=1
-1
+2
+1
-3.0
+1
+3
+1
-9-5
+7
120
2-1/4
- 12-15 51-53
i
+3
-1
72
of
-2.7
+2
+1
+2
+1
-3.5
&
3 121
2
- 6-15 53-55
+1
+2
+)
+1
+2
+2
+2
+10
122
2-1/4
- 6-15 54-56
+3
-2.) +1
+2
-,8
+3
-2.5
+1
+3
-1.6
+3
+3
-7.2
+14
123
2-7/8
-1,4
- 3-15 55-60
-
$
+1
-1.7
+2
+1
+3
+3
-3.6
124
2-3/4
-2
-1
--5
+3
+13
+1
- 9-15 56-59
+1
=
+5
+1
+)
-.5
+2
+2
+3
*14
e
125
2-3/4
-3
+1
+3
--5
- 6-15 58-63
+1
:-
-1.8
+4
*1
-1.7
+3
+1
-4.0
B 126
2-3/4
7
-.5
+1
+3
+3
+3
+14
- 12-15 60-65
+3
+)
-2
*1
A
Quaranteed securities
-1
-1
9 101
CCC
3.
5-1
-1
-1
-1
-3
102
TTIC
- 3-15
-1
-1
-2
=2
103
me 3
- 5-15 44-49
-1
=1
7
-2
-2
104
HOLD 3
5-1 44-52
+.5
-1
..5
-)
-1
-1
7
9 105
HOLC 1-1/2 H - 6-1 45-47
+.8
+.8
-1
-1
0 106
TPIA 1-3/8 - 2-1 -
All Lax-exempt securities
*17.1
+-5
+19.2
+11.7
+1,8
+50.2
Market purchases
-13,1
+11.7
*12.7
+2.6
+2.5
-14.0
-10.1
+3.3
-3.9
-2.8
-44.0
Market sales
+32.8
Maturities
-13,1
+3.1
-9.6
+15.2
+6.8
+1.8
+6.3
Total net increase (+) or decrease (-)
+11.7
+12.7
+2.6
+2.5
+3.3
+32.8
Office of the Secretary of the Treasury. Division of Research and Statistics,
Γ Original figures revised.
. Less than $50,000.
Purchases and sales recorded as of day of transaction and sot day of delivery. Transactions after 4 s'alock are included is the sert day.
Vater Data are reunded and say not add to the totals.
Regraded Unclassified
AH
April 10, 1943
MEMORANDUM
TO:
Secretary Morgenthau
FROM: Mr. Gaston
Jim Maloney, Supervising Agent of the Secret
Service in New York, is in town today and reported on
O.P.A. cooperation. They found that a very bad situ-
ation existed in the use of counterfeit "p" stamps
for gasoline by independent stations. The O.P.A. had
done practically nothing about the matter and hadn't
the faintest idea how to go about breaking it up.
Maloney finds it isn't difficult at all and the pros-
pects look very good for suppressing this traffic
entirely within a very short time. He has operated
by tracing sheets of counterfeit stamps turned in
through deposit banks to the gasoline wholesalers and
thence to the retailers. They are working on 112 cases
in Manhattan, Bronx and Queens, and have made ten
arrests. Assistant District Attorneys have been
assigned to cooperate with them. They have seized
one plant and sixteen plates, and arrested two printers.
They plan to pick up the distributors of the counter-
feits, which they think will not be difficult, and
then make conspiracy cases under several statutes.
One of them, Section 72 of the Criminal Code, which
deals with the falsification of any Government docu-
ment, carries a ten-year penalty.
Believing that the main objective was to stop
this traffic rather than multiply arrests, Maloney
went to Saul Herzog, a New York lawyer who represents
50,000 independent gasoline dealers east of the Mis-
sissippi, and told him what he had discovered. Herzog
was greatly upset, since he has been accusing O.P.A.
of not allowing sufficient supplies of gasoline to
the independent dealers. With Maloney's permission,
Herzog gave to the Associated Press B. story that the
Secret Service had discovered extensive use of counter-
feit stamps by independent dealers and quoted Herzog
as pleading with the dealers to stop it. Herzog has
Regraded Unclassified
185
- 2 -
called & meeting for tomorrow at Philadelphia at
which he promises to get to work on the dealers
to make them do some self-policing.
We plan to send out to the supervising agents
in other cities a report on what Maloney has done,
with instructions to go to work on this problem.
In New York, Maloney has had the O.P.A. assign one
of their so-called investigators to trail along in
each case, with the idea that we can train them how
to do the job. After we have had a clean-up in the
more important cities it is possible that O.P.A.
will get the idea and will be able to carry on by
themselves with some occasional assistance.
Secret Service in New York is also working
with Alcohol Tax on the sugar diversion problem.
As Maloney says, "We are leaving 'em roll' until
sufficient evidence is collected for prosecution.
That is to say, Alcohol Tax and Secret Service mer.
are trailing the trucks and not making arrests for
the present.
I asked Speck, of the General Counsel's office,
to clear our proposed Executive Order with Justice
before submitting it through O.P.A. to Justice. Irey
reports that it has been cleared so far as the Attorney
General is concerned but is now resting on Hoover's
desk. We should have it, but I don't think it is
anything to worry about, since the gasoline and sugar
cheaters are not going to challenge the authority of
the Secret Service and the juries of "A" card holders
are not going to bother about who made the arrests.
An O.P.A. man in New York asked Maloney who was going
to get the credit for making these cases. Maloney
told him the Secret Service was.
mr.
Regraded Unclassified
186
NEW YORK HERALD-TRIBUNE
APRIL 8, 1943
116inCityFoundHolders
Of Bogus T Gas Coupons
Secret Service Starts Inquiry
Into Counterfeit 'Flood'
Sol A. Herzog, general counsel
for the Eastern States Gasoline
Dealers Conference, announced
yesterday that the Federal gov-
ernment had extended through-
out the metropolitan area its
drive against distributors of coun-
terfeit gasoline coupons, and that
in the first day's investigation in
New York City alone 116 cases of
possession of such coupons had
been discovered.
Mr. Herzog said he had been
informed that the circulation of
counterfeit T coupons in Manhat-
tan, Brooklyn. Queens, the Bronx
and Westchester had become "a
veritable flood." Genuine T cou-
pons are issued only for trans-
portand commercial vehicles.
Pointing out that Federal crimi-
nal statutes prohibit making. pos-
sessing or dealing in counterfeit
government documents, Mr. Her-
sog said that the current investi-
gation is not in the hands of the
Office of Price Administration, but
is being conducted by the Secret
Service.
Regraded Unclassified
187
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE April 10, 1943
TO: Miss Chauncey
FROM: James L. Houghteling
You asked me to find out about the labor record of Charles
Sawyer of Cincinnati, member of the Democratic National Committee
from Ohio and former Lieutenant Governor of that State.
I have consulted William Green, president of the American
Federation of Labor, whose home is at Coshocton, Ohio, and who is
thoroughly familiar with leading personalities in that State. Mr.
Green stated, with considerable enthusiasm, that Mr. Sawyer's labor
record is in every way eminently satisfactory and that he endorsed
him without any reservation whatsoever.
I also had Ted Wagner, Deputy State Administrator of the
War Savings Staff in Ohio, get me a line on Mr. Sawyer from the C.I.O.
standpoint. Ted Silvey, the new president of the Ohio Industrial
Union Council, C.I.O., advises that the C.I.O. endorsed Mr. Sawyer in
1938 when the latter was a candidate for Governor against Governor
Bricker, and has had no reason to change its attitude. Mr. Sawyer
has a good record as far as Organized Labor is concerned. Mr. Silvey
was somewhat catious about a blanket endorsement without knowing how
said endorsement might be used. However, I think we are safe in
concluding that Mr. Sawyer's standing with the C.I.O. is satisfactory.
Regraded Unclassified
188
BOARD OF ECONOMIC WARFARE
OFFICE OF EXECUTIVE DIRECTOR
WASHINGTON, D.C.
Mr. H. D. White
Assistant to the Secretary
Treasury Department
Dear Harry:
In connection with the position you mentioned,
may I suggest Charles Sawyer for consideration? Though
I do not know him, he was recommended to me by a friend
in the War Production Board as a person who might be
brought to Washington for a large-scale job.
Mr. Sawyer is probably known chiefly to the
public as a liberal Democratic politician in Ohio,
a member of the Democratic National Committee. How-
ever, he is a substantial owner in one of the largest
American business concerns, has a considerable interest
in a large life insurance company, and in one of the
largest electrical equipment manufacturing concerns.
I think he is Chief Counsel for all of these businesses.
I believe the President thinks highly of him and that
he was at one time seriously considered for the posi-
tion of Attorney General.
Yours sincerely,
But COE
Frank Coe
Assistant to the
Executive Director
missing
shell
Regraded Unclassified
TO:
memo.
189
DuBell advised of
will advise Bunsteries
this message and
family
From: Mr. Fitzgerald
190
ADDRESS OFFICIAL COMMUNICATIONS TO
THE SECRETARY OF STATE
WASHINGTON, D.C.
DEPARTMENT OF STATE
WASHINGTON
April 10, 1943.
In reply refer to
FA - 102.1/8076
The Secretary of State presents his compliments
to the Honorable the Secretary of the Treasury and,
confirming the communication by telephone to the
Treasury Department today, advises him of the receipt
of a telegram from the American Consulate General at
Algiers containing a message "for Morgenthau and
Carter" which states that Colonel Bernstein has ar-
rived safely and requests that his family be informed.
The War Department has been advised in the matter.
to White
Harry 4/12/43
FORVICTORY
copy
BUY
UNITED
STATES
persons
BONDS
ARB
STAMPS
J.B.P.
Regraded Unclassified
191
April 10, 1943
TO:
MR. Gaston
FROM:
The Secretary
Speaker Rayburn asked me the following
question:
"Is there any move to stop the flow of money
into Mexico?"
He says there is a lot of money going into
Mexico.
What about it, please?
Sasta the 24 him
X-serp
by
SKIPIK
Regraded Unclassified
192Γ
TREASURY department
INTER OFFICE COMMUNICATION
DATE
Secretary Morgenthau
APR 10
TO
FROM Randolph Paul and H. D. White
On October 7. 1942, we sent you a. memorandum with
regard to the shipment of food parcels from Portugal into
occupied Europe. Our recommendation, with which you agreed,
was that in view of the small amount of shipments proposed,
the Treasury raise no objections to the proposed shipments
but that the movement of food into occupied Europe should
be carefully watched.
On Saturday, April 3. 1943, Pehle attended a
meeting in Dean Acheson's office at the State Department
with regard to shipments of food into occupied areas. There
was distributed at the meeting a memorandum signed by
Governor Lehman, dated March 16, 1943, which sets out
Lehman's views with regard to such shipments. A copy of
such memorandum is attached.
We have been asked to comment on the following
proposal:
Regraded Unclassified
193
- 2 -
1. Shipments of food, clothing, or medicines
from the neutral countries of Europe to the
occupied territories shall be freely approved
by this Government, provided that there seem
to be reasonable ground to assume that such
shipments will reach the civilian population
for whom they are intended and will not
directly benefit the enemy.
2. The transmission of funds by allied
governments to the neutral countries of Europe
to purchase the supplies to be shipped will be
licensed, provided that the funds may be
obtained against blocked dollars.
The argument given in support of such action by this
Government may be summarized as follows:
1. The British Government apparently is allowing
shipments within the blockade and our failure
to follow a similar policy antagonizes the
exiled governments.
2. There would be little benefit to the enemy
in such shipments since Germany could obtain
these supplies in neutral countries of Europe
by purchasing them herself. When Pehle asked
what amount would be involved on a yearly basis,
the best estimate State could make was somewhere
between $71 million and $20 million. It seems
clear that purchases of supplies in this amount
and the shipment thereof into occupied areas
would be of material assistance to the enemy.
3. The authorization of shipments to the
occupied areas originating within the blockade
relieves the pressure for shipments through
the blockade. It can be argued that this is
the case. On the other hand, if there are
Regraded Unclassified
194
- 3 -
extensive campaigns to raise funds for
shipments of supplies within the blockade,
and there are not enough supplies to use the
funds which have been raised, there will
undoubtedly be substantial pressure created
for shipments through the blockade.
4. Apparently we have asked the British for
their assent to the shipment of limited
supplies through the blockade to Norway and
Belgium. It is argued that it is inconsistent
to ask the British to agree to shipments
through the blockade and at the same time
refuse to authorize shipments within the
blockade. This is not necessarily a good
argument if the shipments which we propose
to make through the blockade are felt to be
clearly justified on the basis of promoting
the war effort. For example, shipments of
food to prospective areas to be occupied by
our forces in-the not too distant future
might be justified. The real query is the
reason why we are pressing to make shipments
through the blockade to Europe.
The most disturbing factor in the situation is that
the State Department determines the policy of this
Government with regard to these matters and the State
Department has assigned this area of responsibility to
Governor Lehman, whose main job it is to see that food
gets through to Europe, as soon as areas are reoccupied.
If he is going to use all of his energies to see that food
shipments to areas not yet occupied are made, the whole
blockade policy of this Government may be jeopardized.
Regraded Unclassified
195
- 4 -
Under the circumstances, we recommend that State
be advised as follows:
The Treasury Department will not object
to the shipment to occupied areas of food
and other supplies which are within the
blockade and thus available to Germany,
subject to the following conditions:
(a) Only products which have not been
shipped through the blockade, and which are
not substitutes for products shipped through
the blockade, will be included.
(b) We are opposed to public campaigns to
raise funds for these purposes, since they
will give rise to more public pressure to
make shipments through the blockade.
(c) Insofar as possible all shipments
should be handled by the governmental
authorities involved and not by private
organizations, since private organizations
will use all of the pressure at their com-
mand to make the shipments as large as
possible.
(d) The purchase of food and other supplies
in the neutral countries should be subject
to careful regulation and supervision.
(e) Shipments of food and other supplies
through the blockade give Germany materials
which she cannot otherwise obtain. Accord-
ingly, the Treasury Department is opposed to
shipments through the blockade, except where
such shipments definitely further the success-
ful prosecution of the war,
REP
HOW
Regraded Unclassified
196
ACPY
March 16, 1943
A-A - Mr. Acheson:
In reviewing our policy relative to food shipments to
civilian oopulations in territories occupied by the enemy
the following seems to be true:
1. With reference to proposals to send food
shipments through the blockade, the American
and British attitudes have in the past been
similar, i.e. to oppose any mitigation of a.
rigorous blockade policy.
2. With reference to proposals for relief by
intra-blockade food shipments from neutral
European countries to civilians in areas
under enemy occupation, this Government has
adopted a more restrictive policy than the
British.
The British view is that within the general limits of
the European blockade such small surplus food supplies as
may exist in neutral countries are available to the Germans
in any case; and that to permit them to go to non-German
civilians is not seriously harmful to the Allied cause
while it undoubtedly ameliorates civilian food conditions.
This difference in the American and British viewpoints
has given rise to a number of slight irritations and mis-
understandings. It has also tended to place Britain in a
more favorable light than the United States with our other
Allies. Our greater reticence has, however, been without
much practical effect. To my knowledge we have never in the
end actually refused our assent to any of the various British
proposals to permit the shipment of foodstuffs from neutral
countries; but we have examined them so carefully and
minutely that much time has been lost in putting them into
execution - for which we have probably had to bear the blame.
On the other hand we have refused proposals made
directly to us by private organizations and governments,
particularly in the case of Norway to send funds to neutral
countries for the purchase there of food supplies.
Regraded Unclassified
197
- 2 -
I want to suggest for consideration a liberalization
of our policy in this whole matter.
I believe this is the more necessary because, as you
doubtless know, we have now asked the British for their
assent to the shipment of limited supplies through the
blockade for the relief of certain sections of the civilian
populations in Norway and Belgium. Clearly our position
will be rather illogical, if we press this much more
serious modification of blockade policy while at the same
time we maintain an intransigeant attitude toward intra-
blockade relief proposals. We would be, in effect, asking
the British to swallow what we and they have regarded as
a camel while we continue to strain at gnats.
I would recommend, therefore, that hereafter we pursue
a policy which may be generally outlined as follows:
1. Requests from allied governments to purchase
foodstuffs, clothing or medicines in neutral
countries for shipment into occupied territories
shall be given approval and even be encouraged
provided, of course, that there seem to be
reasonable grounds to assume that such shipments
will in fact reach the civilian populations for
whom they are intended and will not directly
benefit the enemy.
2. Requests from Allied governments and private
organizations for the transmission of funds
from this country to neutral countries for the
purchase of foodstuffs, clothing and medicines
to be sent into occupied countries shall also
be given approval, provided that reasonable
assurances exist that the goods will reach the
people whom it is desired to help and provided
further that the amounts involved are not
excessive and that the transfer of free exchange
is not involved.
Regraded Unclassified
198
- 3 -
The adoption of this policy does not mean that each
proposal will not be carefully examined to determine
whether there is some particular aspect of it which might
render it undesirable; it does mean that in the absence of
such a factor it will receive speedy approval as being in
line with a recognized policy.
The existing policy seems to rest upon a fear that food
sent into occupied territories may assist in relieving the
Nazi food situation; and that, even though these food
supplies may be theoretically available to the Axis, the
latter cannot buy them without sacrificing their own foreign
exchange, whereas if they are bought with neutral or
American funds, the amount of foreign exchange in the
neutral countries potentially available to the Axis is
increased. It must be admitted that these arguments are
not without validity. Some slight advantage may accrue to
Germany from the shipment of food and clothing from neutral
countries. However, the same thing is true of prisoner-of-
war packages particularly when the number per month is as
high as it is in the case of British and American prisoners.
And on the other side of the picture, there is
unquestionably a. great and growing demand in this country
and in Britain that effective measures be taken to improve
the food situation in occupied countries. The simplest
method of doing this is obviously to send in whatever food
supplies may be available within the limits of the
continental blockade. This raises no question of the use
of ship tonnage.
There is also in my mind real validity in the contention
that, as things are now going, the future will find the
vitality of the peoples in Allied countries seriously under-
mined, whereas that of the Germans will be less affected.
Another argument which weighs with me, at least at the
present time, is the entirely practical one that having
pressed the British to send food through the blockade, it
is quite illogical to adopt a restrictive policy in respect
of limited food shipments from inside the blockade. It is
Regraded Unclassified
199
- 4 -
clear that such shipments can only be very limited in view
of the small surpluses available in these countries.
If you approve the liberalization of policy I have
outlined I would bespeak your assistance in securing the
acceptance of it by the Treasury which is involved in all
such transactions as may require the transfer of funds from
or through this country.
Herbert H. Lehman
OFR: LOsborne: VIC
Regraded Unclassified
NEW YORK TIMES, WEDNESDAY, APRIL 7
200
RELIEF PLEA BASED
ships for the war effort. They
won't take anything to a belliger-
ent country. But after a guarantee
ON FROZEN FUNDS
of safety from the balligerent pow-
era, they take food to the children
of these occupled countries.
"As far as supervision goes, the
French Societies Council Says
International Red Cross, with Swe-
Money Held Here Could Buy
dish and Swiss personnel, Le willing
to undertake the responsibility of
Food for Children
distribution, the same M they are
doing so saitsfactorily in Greece,
"We have no shortage of cereals
SHIPS, GRAINS AVAILABLE
In this country. There is enough
so that we could spare a few thou-
sand tons without ovr missing ft.
200 at Meeting Urged to Ask
and we need to send cereals to the
children of these countries. Vita-
President and Congress to
mins and milk are no longer
enough. The children of these coun-
Free Necessary Assets
tries have reached the point where
vitamins will not do them any good
unless they get food also.
Instead of another appeal for
"Theer La no foundation to Work
funds, a large group of business
on any more. We need to send
and social raders who attended a
them cereals and fats and meats,
luncheon meeting called yenterday
as well na milk. The cereals are
by the Coordinating Council of
right here in this country and the
French Relief Societies at the
fata and meats are In South Amer-
Hotel Plaza heard an urgent rec-
(ca in sufficient quantity. The neu-
ommendation to telegraph or write
tral ships could go to South Amer-
to the President and their Repre-
les and take these fats and mests
sentatives in Congress asking their
to the starving children of Europe,
support for measures to free frozen
"So everything la In order-the
French, Belgian and Dutch funds
money, the food and the ships,
in this country to buy food for
with supervision for the distribu-
children in Nari-occupied coup-
tion. All that in needed is the offi-
tries.
cial permission of Washington and
Howard E. Kerschner, director
London to do it. What you can do
of the International Commission
to help persuade Washington that
for the Assistance of Child Refu-
it ought to be done is to write to
grees and an executive of the Amer-
the President, write to both your
lcan Friends (Quakers) Society,
Senator and your Congressman.
made the recommendation to 200
You can say that Senate Resolu-
persons at the Pot au Feu luncheon
tion 100 and House Resolution 117,
organized by Miss Anne Morgan's
which advocate food for the chil-
relief agency. Those attending in-
dren of occupled countries, ought
cluded Mr. and Mrs. Archibald
to be supported."
Brown, Mr. and Mrs. Pierre Car-
tier, Mrs. Spencar Eody, Princess
Guy de Faucigny-Laincinge, Miss
Elizabeth Hudson, Theodore Rous-
seau, Mr. and Mrs. André Maurois
and the Marquis and Marquise de
Talleyrand.
"We don't need any money with
which to do this," said Mr. Kersch-
ner. "There in money belonging to
France, Beigtum, Holland and Nor-
way In this country-more than
sufficient to send all the food that
it is proposed to send. All that
would be necessary would be for
our government to unblock the
money belonging to these coun-
tries, to pay for the food.
"Shipe are not a problem. There
are 100,000 tons of Swedish ship-
ping tied up right now at the docks
In Sweden, You can't hire these
Ote:
This is undoubtedly an indication of the beginning of an
extensive campaign to send substantial amounts of food to
occupied areas through the blockade.
Int
Regraded Unclassified
201
78TH CONGRESS
1st SESSION
S. RES. 100
IN THE SENATE OF THE UNITED STATES
FEBRUARY 11, 1943
Mr. GILLETTE (for himself and Mr. TAFT) submitted the following resolution;
which was referred to the Committee on Foreign Relations
RESOLUTION
Whereas the small democratic countries of Belgium, Norway,
Poland, the Netherlands, Greece, Jugoslavia, Czechoslovakia,
and others have been invaded and occupied; and
Whereas these small countries which are allied with us in the cause
of democracy resisted to the limit of their strength the onrush
of invading forces; and
Whereas the usual economic processes of these small countries
have been completely dislocated as a result of being occupied
by invading forces; and
Whereas the food supplies of all these nations are dangerously
exhausted due to requisition of native food supplies by the
Germans, and inability to secure their usual imports through
the blockade; and
Whereas no relief can be brought to them unless there be inter-
Regraded Unclassified
202
2
3
national action through which their native supplies can be
of securing the necessary agreements by which this disaster
protected and imports be made through the blockade; and
can be averted: Now, therefore, be it
Whereas starvation has already begun; and
1
Resolved, That the Senate of the United States does
Whereas a plan for feeding the people of Greece has been in
2 express the conviction that immediate steps should be taken
effect for several months in Greece under supervision of the
3 to extend the Greek experiment and thereby prevent this
Swedish and Swiss Governments and the International Red
Cross: and
4 impending tragedy of mass starvation heretofore named: and
5 be it further
Whereas after six months' trial this relief has been certified by the
State Department as working satisfactorily and without
6
Resolved, That the Senate of the United States respect-
benefit to the Germans: and
7 fully urges that the Government of the United States, through
Whereas the Governments of Belgium, Norway, Poland have
8 the Secretary of State, endeavor as quickly as possible to
requested that their people be given relief; and
9 work out, in cooperation with the British Government and
Whereas there are food surpluses available in the United States
10 the Governments of Sweden, Switzerland, and the accredited
and in South America; and
11 representatives of the other governments concerned, the
Whereas many of the small invaded countries have money with
which to purchase the food needed to keep their people alive
12 setting up of systematic and definite relief for all stricken
and have signified their desire to use funds for that purpose;
13 and hungry countries where the need is now the most acute;
and
14 this relief to be based on agreements by the belligerents
Whereas the Swedish Government has ships not available to the
15 for the protection of the native and imported food supplies,
Allies which could be used for transportation: and
16 with rigid safeguarding of such relief so that no military
Whereas the specter of mass starvation among friendly and
noncombatant women and children is a tragedy that the
17 advantage whatever may accrue to the civil populations or
compassionate heart of America wants to avert; and
18 armed forces of the invading nations.
Whereas Belgium, Czechoslovakin, Norway, Poland, Greece,
Jugoslavia, and the Netherlands and others have lived in
friendship with the United States during our entire national
existence, and have sent ns millions of our most useful and
helpful American citizens, and now have no means whatever
203
78TH CONGRESS
1sr SESSION
H. RES. 117
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 15, 1943
Mr. LESINSKI submitted the following resolution: which was referred to the
Committee on Foreign Affairs
Referred to the Committee on Foreign Relations
Favoring action looking to relief for starving
I Iwn
BEHONONOO mage
FEBRUARY 11, 1943
By Mr. GULLETTE and Mr. TAPT
peoples of Europe.
RESOLUTION
RESOLUTION
S. RES. 100
Whereas the small democratic countries of Belgium, Norway,
Poland, the Netherlands, Greece. and Yugoslavia have been
invaded and occupied: and
Whereas these small countries, which are allied with us in the
cause of democracy, resisted to the limit of their strength the
onrush of invading forces; and
Whereas the usual economic processes of these small countries
have been completely dislocated as a result of being occupied
by invading forces; and
Whereas the food supplies of all these nations are dangerously ex-
hausted due to requisition of native food supplies by the Ger-
mans, and inability to secure their usual imports through the
blockade; and
Whereas no relief can be brought to them unless there be inter-
Regraded Unclassified
204
2
3
national action through which their native supplies can be
of our most useful and helpful American citizens, and now
protected and imports be made through the blockade; and
have no means whatever of securing the necessary agree-
Whereas starvation has already begun; and
ments by which this disaster ean be averted: Now, therefore,
be it
Whereas the American Committee on Food for the Small Dec
mocracies eighteen months ago made a proposal that n. trial
1
Resolved. That the House of Representatives of the
feeding should be undertaken in one of these countries under
2 United States does express the conviction that immediate
neutral protections and agreements from German seizure; and
3 steps should be taken to extend the Greek experiment and
Whereas this plan has in effect now been adopted in respect to
4 thereby prevent this impending tragedy of mass starvation
Greece under supervision of the Swedish and Swiss Govern-
ments and the International Red Cross: and
5 heretofore named; and be it further
Whereas after six months' trial this relief has been certified by the
6
Resolved, That the House of Representatives of the
State Department as working satisfactorily and without bene-
7 United States respectfully arges that the Government of the
fit to the Germans: and
8 United States, through the Secretary of State, endeavor as
Whereas the Governments of Belgium. Norway, and Poland have
9 quickly as possible to work out, in cooperation with the
requested that their people be given relief; and
10 British Government and the Governments of Sweden,
Whereas there are large food surpluses available in South America:
and
11 Switzerland, and the accredited representatives of the other
Wherens many of the small invaded countries have money with
12 governments concerned, the setting up of systematic and
which to purchase the food needed to keep their people alive
13 definite relief for all stricken and hungry countries where the
and have signified their desire to use funds for that purpose:
14 need is now the most acute: this relief to be based on agree-
and
15 ments by the belligerents for the protection of the native and
Whereas the Swedish Government has ships not available to the
16 imported food supplies, with rigid safeguarding of such
Allies which could be used for transportation: and
17 relief so that no military advantage whatever may acerue
Whereas the specter of mass starvation among friendly and non-
combatant women and children is a tragedy that the com-
18 to the civil populations or armed forces of the invading
passionate heart of America wants to avert: and
19 nations.
Whereas Belgium, Norway, Poland, Greece, Yngoslavia, and the
Netherlands have lived in friendship with the United States
during our entire national existence, and have sent us millions
205
APR 1 0 1943
My dear Mr. Ford:
I have read with interest in the Con-
gressional Record for April 8 your remarks
concerning my so-called "secret plan" to
establish an international stabilization plan.
May I thank and congratulate you for bringing
to the House 80 promptly and concisely the
true facts concerning this important matter.
Very truly yours,
(Signed) H. Morgenthau, Jr.
Secretary of the Treasury.
Hon. Thomas F. Ford,
House of Representatives.
of
DJS:mj
4/9/43 AWB HDW wit
Regraded Unclassified
206
Mr. FORD. Mr. Speaker, yesterday
the distinguished gentleman from Ohio
[Mr. SMITH] called attention to what he
described as the secret plan of Becre-
tary of the Treasury Morgenthau to
establish an International stabilization
fund.
The plan is so secret that three com-
mittees of the House-Poreign Affairs,
Banking and Currency, and Coinage,
Weights, and Measures-were all invited
to meet Secretary Morgenthau and offer
any suggestions that might occur to
them.
The plan is so secret that it has been
published Nation-wide and commented
on both by radio commentators and edi-
torial writers. In spite of this fact, the
gentleman from Ohio IMr. SMITH) asks,
"Why all the secrecy?"
The answer is very simple: What se-
crecy?
The fact that the meeting with the
Secretary was an executive meeting, a
meeting which the gentleman from Ohto
(Mr. SMITH) attended, the only secrecy
about it was that the Secretary asked
that his answers to any questions be off
the record, the reason being one of
courtesy because the plan had not as yet
been published.
The distinguished gentleman assures
us that be will do all in his power to
inform his people of the peril that is
involved in this secret New Deal scheme.
Well, since the United States, Great
Britain, and Prance have had a tripar-
tite agreement of this sort for some
years, and the result of the peril in-
volved has been a $30,000,000 profit to
the Treasury of the United States, I may
be pardoned if I suggest to the gentle-
man from Ohio that his effort to inform
comes rather late.
The plan, which has a worthy and, I
might add, a vital objective, the sta-
bilization of international currencies, is
merely a plan to apply to the world the
mechanism used in our tripartite sta-
bilization plan, and thus avoid the chaos
that would be inevitable, in the absence
of some plan, in the post-war world.
Regraded Unclassified
Treasury Department
208
Division of Monetary Research
Date
April 9, 1943
19
To:
Mr. Herbert Feis
Dear Herbert:
I am returning the unsigned letter of April 1,
in accordance with our telephone conversation.
The British Treasury stated that they were pro-
posing to replace all currency in circulation in
Tripolitania with B.M.A. notes. In response to an
oral query by me, Phillips said that they were to
be in sterling units. I think your interpretation
that such replacement could only be on formal basi
is the correct one. Any other procedure would
replace other currency in terms of local units only
very slowly and with confusion, in that it would
soon bring about a dual price system.
Your draft is perhaps adequate, but I wonder
if you could express more clearly your objections
to the introduction of the B.M.A. notes in sterling
as the unit.
H.D.W.
MR. WHITE
Branch 2058 - Room 2141
Regraded Unclassified
Treasury Department
207
Division of Monetary Research
Date 4/10/43
19
To:
Miss Chauncey
From: L. Shanahan
The letter to the Secretary from State
Department, unsigned, dated April 1
(with regard to reported British plan
for withdrawing the Italian lira from
circulation in Tripolitania) was returned
to Mr. Feis yesterday with the original
#
of this note.
Regraded Unclassified
DEPARTMENT OF STATE
WASHINGTON
April 1. 1943
My dear Mr. Secretary:
Feis and Livesey have drawn my attention to your
request for an expression of opinion 8.8 regards the
reported British plan for withdrawing the Italian lira
from circulation in Tripolitania and replacing it with
British military authority notes over-printed with the
word "TRIPOLITANIA". As I understand it, this would mean
that the British, through some formal action, would re-
quire the full conversion of outstanding lire into the
new British currency.
If my understanding of the suggestion is correct,
I do not understand the necessity for it and doubt its
advisability. I can see no objection of course to the
use by the British of a special military currency desig-
nated for use or circulation in Tripolitania. The
enforced substitution of this currency for Italian
currency might, however, give rise to misunderstanding,
and furthermore seems to run contrary to the general
principle being considered of resort as soon and as
fully 88 possible to the use of local currencies in
reoccupied areas.
I should be obliged if you would let the British
Treasury authorities know of this opinion, provided my
understanding of it 18 correct and adequate.
Sincerely yours,
The Honorable
Henry Morgenthau, Jr.,
Secretary of the Treasury.
Regraded Unclassified
210
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
TO
Secretary Morgenthau
April 10, 1943
FROM Frances McCathran
CONTROVERSIAL ISSUES BEFORE CONGRESS
1. Inx: Pay-As-You-Go - Yesterday saw more demands from Re-
amblican Reoresentatives for immediate action on nay-as-you-
PO texation. In a formal statement, nine Republican members
of the House Ways and Means Committee urged the Committee
to "tike no action on other matters until it has first
reconsidered the all-important question of establishing a
current, pay-ss-we-earn tax collection system and has given
the House of Reoresentatives another opportunity to vote
01 the matter.' If In en attempt to answer objections to the
Carlson-Ruml Plan, Representatives Compton and Newsome
presented another compromise plan. Their method would grant
complete forgiveness of 1942 taxes to some 7, 100, 000 new
taxpayers, cancel 45% of this liability for the remaining
taxonyers and allow this last groun to pay the 55% owed,
over 2 Geriod of five years. Also veering toward compromise,
Representative F. Edward Hebert, leader of 15 southern
Democrats who supported the Ruml Plan, advised his followers
yesterday, "If we can't have the whole loaf, I think it best
to take half.' Il House Recublican Leader Martin also announced
mis intention of blocking any Easter recess for the House
"until something is done on this tax matter." According
to an article by John H. Crider in the New York Times this
morning, all Martin says he wants is an opportunity for the
nouse "to decide the matter for itself, and by t is state-
ment Mr. Crider concluded "the minority leader WAB under-
stood to be inviting a compromise." However, all previous
remarks from Representative Martin have been strictly on a
"no comoromise" basis. Meanwhile there is little indication
of whether the House Ways and Means Committee, which alone
has the key to the deadlock, will allow the recommitted
subject of taxes to be brought up in its hearings Monday on
the Reciprocal Trade Agreements Act. Chairman Doughton,
Sowever, is said to have announced himself RE "unimoressed"
with the Anderson letter petitioning immediate action on taxes.
Regraded Unclassified
211
2. Labor - Marking the first legislation passed in this session
of Congress to curb Labor, the House approved yesterday,
by a vote of 270 to 107, the Hobbs Bill amending the 1934
Anti-Racketeering Act. The bill provides imprisonment up
to 20 years and fines up to $10,000 for "robbery and ex-
tortion" in interstate commerce, and for "interference
during the war with the transportation of troops, muni-
tions, war supplies, or mail in interstate or foreign
commerce. 11 The bill also carefully defines the terms "rob-
bery" and "extortion." Reoresentatives recalled in House
debate yesterday the Supreme Court decision refusing to
uphold the conviction of teamster union members who stopped
non-union trucks entering New York and foreibly demanded
"fees." The House accepted, however, an amendment approved
by the Judiciary Committee, providing that nothing in the
act would be construed as nullifying the Clayton Act, the
Morris-LaGuardia Act, the Railway Labor Act, or the National
Labor Relations Act. Meanwhile the Senate yesterday
unenimously approved the Byrd resolution re uiring the WLB
to submit to Congress by May 10 a complete report on wage
increases granted since the Board VAS formed in January
1942, and similar monthly reports thereafter.
Regraded Unclassified
214
85
6 TREASURY
NOT TO BE RE-TRANS) ITTED
CO.2 50,
SECRET
1.081 SECRET
OPTAL 117
130
SEORET
Information received up to 7 A.L. 10th April, 15+3.
1.
MILITARY
Tunisic. To Midnight oth.
Eighth Army.
The enemy continued his withdraw 1 throughout the day
from the Line Muzzoune-Cekhira closely followed 11.0 by the
Eighth Army. Early E in the afternoon his main forces were
Y6 orted North of the Anilway going towards
Agereb and Sf . fince 7th the Eighth Anmy her talton over
9,000 prisoners U.S. Soctor. Little contact with the eneny
A patrol moving down the road from Maltnessy reached the mills
South of liezzouna without opposition. No further activity Enst
of Bou is mraia nourt from an emound recommissence of the
hills Erst of Djobel Chemsi.
First Army.
Attack by 78th Division already reported continuen eth
and cill objectives for the day takon. Since city 7th over 4001
Prisoners contured, all Germens. Further South in two Pichone
Fondouk Area British and J.S. Forces attacked on 7th/Cth. On
the 6th the enemy withdrew from Pichon which was catered by our
tanks during the niternoon and our Infentry crossed the River
ictyeon the two villages and renched the high ground Best of
Pichon. Hornwhole U.S. Infantry occupied the High Ground South
of Fondouk. The enemy 15 reliably reported to have brought up
some of his ermour from the Frid Area.
2,
AIR OPERATIONS.
Mestern Front. 0th/sth.
About 800 tons 31 bombs VOTC drowned in Duisourg Aree.
Cloudy conditions with severe icing forced some carer ft to
return t.rly. Over objective identification 112 ossible and no
results seen. A.A. heavy And occurate 9th. 3 hosquitos
bombed D factory noer Anchen. Fighters do ged 16 locomotives
and 3 Winesweepers. Hampdens off estern Norway torpodoud A
tanker of 0,000 tons which blew up and also hit Γ. 1,000 ton
ship, two Hempdons missing.
4 Mossorschmidt Fightors attacked Folkestone and
others were intercepted over the Channel. Enemy casualties o,
Fil, 4. 9th/10th. Aircraft desp tched Duisburg 109, Lecflots
5, Intruders 1. Nine aircraft missing, one creshed in United
Lingdom. Worther over Duisburg cloudy but somo fires NOTO SEON
Tunisic. 7th.
Wellingtons propped o. total of 20 tons on the R.11wr.
centres at Tunis rad Djobel Djelloud. Spitfires intercopted 2
formations of JU 87's over the Modjez El Bab Area. Enemy
casuelties S, 4, 2. All JU 87's. 7th/8th. tons drop
ed 122 tons 0.2 Sfax and vehicles on Mahares Road. 8th. ⑉14
between Mezzounn and fox was rttricked r.nd hoevy drivinge
Regraded Unclassified
215
inflicted enemy columns in retrent being broken up and dis-
organized. At least 330 Vehicles were destroyed or domnged.
Enemy casurlties Nil, One, 3. Ours 7, Nil 3.
Burma.
Between 5th and 7th U.S. Mitchells successfully
bombed Railway Yords at Rangoon and in Mendalay Area. On 8th
Blenhoims bombed villages in the Mayu Area. 17 escorted enemy
bombers attacked one of our airfields damaging buildings and
two Blenheins on the ground.
-2-
+1
Regraded Unclassified
216
NOT TO 36 RE-TRAISMITTED
MICH MOST SECRET
TREASURY
U.S. SECTION
1943 APR 1943 APR 15
ADPY
40.
13
No. 120
Folloring is supplementary resumo of operational events covering the
ariod 3rd April to 10th April, 1943.
1. NAVAL
ATLANTIC OCEAN. German hlorknde runner DOGGER BANK reported munk 3 March
by unidentified submerine, probably U-boat G.W. of AZORES. One 6,000 ton Italian
ship has arrived et BORDEAUX from FAR EAST. 3 German ships have left BORDEAUX -
OSOENO, 6,900 tone and PORTLAND, 7,100 tono, probably for JAPAN and a 2,700 ton ship
which any be coting as a U-bont supply vessel.
mediferranean, Reports received of promising attacks by H.M. Submarines
on 6 tankers and -4 merchantmen. About 1100 tons of shipping arrived In TONISIA from
TRAN during the period. During Murch about 40 percent of shipping to PUNISIA was
mink.
SUBMARINE WARFARE. Very large homeward bound N. ATLANTIC convey has
, Ived in 0.%. with only few ships lost. Air cover WILS provided in mid-Atlantic and
ships of escort successfully drove off numerous night attacks by pack of U-bouts.
17 nttacks on 0-borts of which 11 by surface craft. 5 promising attacks of which 2
urface craft. U-bont notivity more videly dispersed but North Atlantic rem ins
lane of min effort.
SHIPPING CASUALTIES. During the wook 3rd to 9th inclusive 12 ships ro-
ported attacked by submerines. 2 British ships sunk in S.W. Approaches; 3 British
nips (1 tanker) sunic and one Dutch ship torpedoed in honeward bound convoy in North
intention in West Indies one U.S. Tanker nd one Norweginn thip sunk and one U.S. ship
convoy torpedoed; one British ship torpodoed N.N.S. of CAPETOWN end one French shi
(if DAKAR; one agyptian ship sunk in LEVANT. One British tanker was minol in convoy
in THAMES ESTUARY, stern sunk, forward part tored in, 3 British ships were reported
overdue at ADEN, FREETOWN and SAN DOMINGO resoectively. Provisional losseb by enemy
ction March - 654,000 tons which includes 6 tankers totalling 48,000 tons. Main
Losses in ATLANTIC, 72,000 tons in MEDITERFANEAN and 27,000 tons in INDIAN OCEAN and
PACIFIC.
TRADE. Imports in convoy into UNITED KINGDOM week ending 3rd - 845,000 tons
including 148,000 oil.
2, MILITARY
TUNISIA. Now apparent that the onemy has suffered severe defort. Pursuit
continues gathering momentum. 8th Army prisoners since MARETH attack 20/21 March
non 20,000. Number of Axis Divisions unchanged povo indications elements now Gurman
Infantry division northern TUNISIA. Estimate serviceable tanks approximately -
Northorn Punisia 30, mijority Gormen; Contral and Southorn Tunisia 130, majority
German. No indications evacuation is contemplated yut. Fuel supply difficultios
probibly continuing. Italian Divisions. Total has been reduced to 68 owing to losses
in RUSSIA. Estimito 4-5 divisions climinated. Little change in the past 3 months in
and Italian Divisions now disposed no under. Italy 9; South of Franco 7;
Condien 2, Sardinia 2; Sicily 3; North Africa aquivalent 7; Jugoslavis and Albanta
20; Greece 8; Augenn Inlands aquivalent 41 Russia nouivalent 6.
3. AIR OPERATIONS
TESTERN FRONT. Day. U.S. 8th Air Force mnde heavy attack on Rennult
orks and sizilar scala attack on Minnews circraft ropair vorks nb ANTWERP, both
caused considerable damage. R.A.F. Venturas bombod docks at ROTTERDAM end BREST.
Other aircraft attacked nirfields, war industry and railway objectives. 29 aircraft
lost. Night. Bomber Comund operated 1,546 aircraft nd lost 67. Moin attacks -
/SSEN - vary successful; KIEL - vary heavy attack and DUISBURG. Both latter hampored
by bed weather. Tip and run raids by 29 unemy ircraft on south coast, 9 destroyed.
TUNISIA. Intense activity in support of the Army by North West African
and Vestern donort air forces maintained. Much dumage to anemy aircraft on airfields
and to U.T. vehicles. Enomy lossos in air 32, ours 19.
MEDITERRANEAN. Large scale reid on NAPLES by U.S. Fortrosses. 5 convoys
In SICILIAN CHANNEL sttocked by total of 76 U.S. Mitcholls. Extensive damage caused
to supply ships and ono escorting destroyer blown up. in number of transport aircraft
Intercepted and destroyed by U.S. Lightnings.
Regraded Unclassified
215
N 1 I
RUSSIA. Except in the south, empacially KUDAN Arva, Russian dr activity
mL) light, probably due to weather. Russians attacked several convoys in BLACK SE,
Jorman Air Force supported. their troops in KUBAN and bombed Russian harbours Lnd
not bases in Wustern Caucasus. Over 40 German aircraft reported destroyed over
h+ EXTRACTS FROM PHOTOGRAPHIC AND INTELLIGENCE REPORTS ON RESULTS OF II. ATTACKS ON
INEMY ferritory IN EUROPE.
BERLIN. Final interpretation of photographs after roid 1st/2nd March
explain why this attack has always been regarded as outstendingly succossful since
considerable fire damage is disclosed confirming numerous reports that fire situation
m.2 out of control and that organisation and discipline of Borlin Fire Serviços
nollepsod, assistance was obtained from LEIPZIC and other centres. On/ bomb foll
in "DI innor courtyard of Air Ministry damaging 200 to 300 rooms and destroying in-
portent records. Phosphorus incondieries and the heavy bombn appear to have caused
short effect.
VEGESACK. U.S. day attack on 18th March. Opinion on photographs of
inciulist in Noval shipbuilding. Of 15 U-bont hulls on slips 7 have been soveroly
and 6 slightly. U-bonts were In different stryes of construction, nome
Imost ready for Lunching. AB F result of dditional damage to dockyard buildings
his yard by will be of little importance for at least 12 months.
ESSEN. L visitor third week in March reported no work in progress at
Crupps. Pass required to enter town. Reported that 15,000 Krupp workmen and 90,000
more homeless and that damage nt Krupps WHO grentest blow to German war industry
of inflicted by R.A.P.
GENERAL. Recent reliable report from GARMANY states that latest attacks
JV made marked impression on wholo nation. Soldiers home on leave are shocked nt
be state of the towns and have openly criticised the party.
OUGREE. In attack on 12th March on Cockerill works the electric power
nase was hit. All work has stopped end no resumption data has been fixed.
ANTWERP. Minorve aircraft repair works. Assembly shop and noro-engine
repair shop partly destroyed; aircraft dismintling and ving repair shop severely
demaged by several direct hits.
5. HOME SECURITY
Estimated civilinn casualties week ending 7th - killed 22, seriously
wounded 41.
Regraded Unclassified
216
TREASURY DEPARTMENT
Washington
FOR RELEASE, MORNING HEWSPAPERS,
Press Service
Sunday, April 11, 1943.
No. 36-10
The greatost war financing campaign in the world's his-
tory - $13,000,000,000 to help clear the roads to Berlin,
Rome and Tokio for American liberators - will get underway
tonight at midnight throughout America.
More than 1,000,000 volunteers, the largest civilian army
ever assembled, await the zero hour, the Treasury Department
announced today.
From New England, where a modern Patil Revere will ride
once again the cobbled streets and spread the alarm, to
California where the Second War Loan campaign commanders tel-
ecruphed the War Finence Committee of the Treasury that
"preparations on the Western Front are complete, the ammu-
nition is rendy," everything was set for the gigantic home
front offensive.
Reports from all of the twelve Federal Reserve Districts
revealed a feeling of confidence that the 00,000-a-day
sales of Government bonds - the pace necessary t.c reach the
13 billion dollar objective during the upproximately three
weeks of the drive - will be achieved.
Government bonds to fit every purse will be offered.
Victory Fund Committees and War Savings Staffs have merged
their resources and manpower to make a thorough canvass 01°
every community in the land.
The campaign theme, "They Give Their Lives - You Lend Your
Money," runs through every preparation and will resound over
the radio, in newspapers and from outdoor billboard displays
in an unprecedented mobilization of American advertising re-
sources,
The plain citizen whose son, brother and friends are be-
ing called upon to sacrifice their lives if need be for the
defense of the Republic is being asked during the Secono War
Loan to:
1. Divert every cent that is not absolutely required for
food, shelter and other necessities of life into extra War
Bonds.
Regraded Unclassified
217
- 2 -
2. Canvnss his neighbors to make sure they make an equal
extra loan to the Government during the drive,
Bere is E1 swift picture of the highlights of Second War
Lonn compaign plans:
First Federal Reserve District - Connecticut (excluding
Fairfield County) Maine, Massachusetts, New Hampshire, Rhode
Island and Vermont: 20,000 volunteers mobilized; campaign
fervor at white heat with newspapers going all-out to stimu-
late feeling that people must back up boys at the front by
lending their money to the Government; special emphasis is be-
ins placed upon observance of Patriot's Day, April 19, when
Minute Men and ride of Paul Revere will be dramatized to give
renewed inpetur to the drive as it rolls on toward victory.
Second Federal Reserve District - New York, northern New
Jersey and Pairfield County in Connecticut: 115,000 War
Finance Committee volunteer workers will launch drive with
rallies in every region of the district; Secretary of the
Treasury Henry Morgenthau, Jr., will launch the campaign from
Carnegie Hall Monday night over a notion-wide radio network
with Governor Thomas E. Dewey, President William Green of the
American Pederation of Labor, President Phillip Murrey of the
Congress of Industrial Organizations and other distinguished
leaders participating. Efforts will be concentrated through-
out the drive on obtaining loans from sources other than com-
mercial banks. District has set goal of $3,000,000,000,
which "we are confident we will exceed."
Third Federal Reserve District - Distern and Central
Pennsylvania, Delaware and Southern New Jersey: Every county
in district is fully organized and awaits the zero hour at
midnight Sunday. Seles will be made at that moment in
Philadelphia, Cradle of Liberty. More than 50,000 volunteers
have answered the call. Special events include parades and
other public meetings. Civilian Defense workers, civic or-
ganizations, women's clubs, religious groups and public-
spirited citizens are assisting War Finance Committee workers
in making the canvass the most thorough in history of the area.
Fourth Federal Reserve District - Enstern Kentucky, Ohio,
western Pennsylvania, northern West Virginia: 120,000 vol-
Unteer workers to spring to action Sunday to get jump on nn-
tional drive. Parades and public meetings scheduled in large
population centers.
Fifth Federal Reserve District - District of Columbia,
Maryland, North Carolina, South Corolina, Virginia and southern
West Virginia: 50,000 workers have been welded into 11. fighting
Regraded Unclassified
218
civilian organisation by the War Pinance Committee with the nn-
nounced objective of canvassing every citizen. "The organi-
zation is being strengthened every day and enthusiasm is very
high.'
Sixth Pederal Reserve District - Alebama, Florida,
Georgia, southern Louisiana, southern Mississippi, eastern
Tennessee. Many of the 40,000 volunteer salesmen and women
have already made contacts and report fuvorable results. War
Finance Committees, civilian defense, commercial bankers,
security dealers, civic clubs and independent citimens are
cooperating.
Seventh Federal Reserve District - Northern Illinois,
northern Indiana, Iowa, southern Nichigan one southern Wis-
consin: More than 250,000 men and women volunteer workers
mobilized. Chicago planning parade of Army, Navy, Red Cross
and volunteer women's groups, Special dinners planned for
Chicago and Indianupolis,
Eighth Federal Reserve District - Arlomsas, southern
Illinois, southern Indiana, wentern Kentucky, northern Missis-
sippi, eastern Missouri and western Tennessee: 29,000 workers
ready; St. Louis to "celebrato" Sitler's birthday April 20,
with special sales drive to furnish Ammunition "that will make
it his last.
Ninth Federal Reserve District - Northern Lichigan, Min-
nesota, Montana, North Dakota, South Dakota and northern Wis-
consin: Fully organized with 56,000 workers. Many counties
are well on way toward quotas as solicitation was started
early to avoid bad ronds expected during lutter part of April.
Governor Moses of North Diskota has proclaimed April 12 Dedi-
cation Day for sale of War Bonds. Aim to contact 1,500,000
citizens for personal subscriptions to Second Tar Lonn.
Tenth Federal Reserve District - Colorado, Kansas, western
Missouri, Nebraska, northern New Mexico, northwestern Oklahoma,
Wyoming: 50,000 workers rendy: kick-off breakfast meetings
planned Honday, April 12, throughout 385 counties of district;
1,800 banks as well as other financial institutions are co-
operating and urging their depositors to invest in War Bonds.
Insurance companies lending hundreds of sales agents to vol-
unteer sales force; constructed Large thermopeters throughout
district and arranged special daily radio brondcast on per-
centage of quota attained; clergy to announce the Second War
Loan from pulpits Sunday.
Eleventh Federal Reserve District - Texas, southeastern
Arizona, northern Louisiana, southern New Mexico and south-
eastern Oklahoma: "Remember Batsan" is the battlecry of the
Regraded Unclassified
219
4 -
20,000 volunteer salesmen and women; communities are incor-
porating into the drive special events such as purchase of
fighting ships and bombers; April 21 is San Jacinto Day and
will be featured as "Texas Heroes' Day."
Twelfth Federal Reserve District - Oregon, Utah, Wash-
ington, northwestern Arizona, California, Idaho and Nevada:
From the district came this terse report, "Twelfth district
reports 18,750 picked representatives of War Finance Committee
in 1,550 communities are ready. These trained troops report
preparations on the Western Front are about completed. The
ammunition is ready. The big guns are loaded as the barrage
awaits only the zero hour, Monday, April 12."
o00-
Regraded Unclassified
220
FOR THE PRESS
IMMEDIATE RELEASE
APRIL 11, 1943
STATEMENT BY THE PRESIDENT
The Public Debt Act of 1943 10 before me for cignature.
This bill increases the limitation on the face amount of obliga-
tions issued under the Second Liberty Bond Act that may be out-
standing at any one time from 125 billion dollars to 210 billion
dollare,
I pointed nut the need for this increase in By Budget
message on January 6. A bill to authorize the increase was intro-
duced in the House of Representatives on Jonuary 25 by Chairman
Doughton of the Ways and Menns Cormittee. The Treasury informed
the Ways and Means Consittee that the present debt limit would be
insufficient to cover the necessary bond issueo which would be
required during the month of April.
The Treasury has advised me that, to permit the execu-
tion of its war financing plans the Public Debt Act must become
effective without further delay, I am accordingly allowing the
Bill to becomo law without my signature, in order to avoid en-
burrassment to our war financing program.
If the circumstances were otherwise, I should veto
the bill. Even so, I cannot permit this legiclation to become
effective without registering my protest against the attachment
to this Bill of un Irrolevant and unwarranted rider,
There was attached to this Bill in the House a provi-
nion which would have taken from the President the right to
stabilize salaries until they were raised above $67,200 or the
annual rate paid on December 7, 1941, whichever was the greater.
This rider would have destroyed the entire stabilization program.
It would obviously have been unfair to atabilize wages, and yet
leave salarios free to rise to $67,200.
This patently indefensible provision was eliminated
in the Senate. But instand of dropping it altogether, the Senate
substituted a provision removing from the ACT of October 2, 1942,
the Prosident's authority, granted in terms by that Act to reduce
Magns or salarios "to the extent that he finds necessary to correct
gross inequitios and also to aid in the effoctivo prosecution of
the WAP." The effect of this provision, which was accepted in
conforence, in to terminate the authority given to and exercised
by me to provent the payment during the war of salarios in excess
of 867,200.
The reasons which prompted me to (xercise the authority
conferred upon au are fully explained in the letter which I sent
to Chairman Doughton of the Ways and Means Committee on February 15.
A copy of that letter is appended to this statement. As I explained
in my letter, I agree with those who say that the limitation on
salaries dous not deal adequatuly with the problem of excessive
incomes. Practical limitations ought by appropriate taxation to
be placed on all income, earned and unearned. I urged and would
have welcomed A special tax measure applicable to all excessive
incomus from whatever source derived in place of the flat $67,200
salary limitation.
But the Congress has chosen to rescind my action limit-
ing excessive salarius without evon attempting to offer a substi-
tute. The result is that Congress has authorized the drafting
of men into the army for $600 a your rugardless of whether they
are earning 51,000 or $100,000 a year, but has refused to authorize
the reduction in the salary of any isan not drafted into the Army
no matter how high his income may be.
Regraded Unclassified
721
- 2 -
At the same time the stabilization program enacted by the
Congress requires wage increases to be denied to workers earning $1,500
a year even when their employers are willing to pay those wage increases.
The assence of stabilisation is that each should sacrifice for the bene-
Ist of all. This principle the Congress has failed to recognize.
Some 2 or 3 thousand persons who on September 15, 1942 were
receiving salarico in excess of $67,200 may continue to receive them.
About 750 persons will be able to receive salaries in excess of
$100,000; about 30 persons, salaries in excess of $250,000; and 3 or
4 persons, salarios in excess of $500,000.
One hundred and thirty million Americans can make the
stabilization program work even though a relative handful of persons
are not obliged to cooperate as they should. The exemption accorded
these excessively high salaries does not help morale, but American
morale is too strong to be permanently injured by this ill-considered
action.
The act of October 2, 1942 set up a stabilization program
covering wages, salaries and prices. It could, of course, be revised
or repunled by the Congress but subject, under the Constitution, to the
approval or voto by the President.
The Congross, however, did not adopt. this constitutional
method.
It chose to take away the eathority of the President to
rejust salarios which were grobaly incquitable, not by a suparate
law, but by attaching a rider to a Bill incroasing the debt limit.
This system of attaching riders to Bills rolating to a
wholly different subject has been used by former Congresses in a
number of notable cases. Such abuses of sound legislative procedure
have been protosted by may former Presidents, and the practice has
been condemned by sound opinion. It is noteworthy that the Conoti-
tutions of many Statos require that a proposed law shall relate to
only one subject.
In this particular case the problem is only to understand.
If I veto this Bill, with its rider, the Treasury's were
financing plans may be seriously retarded. I have no (B=Ens of sacuring
prompt action by the Congress prior to 4 great bond Issue, the sale of
which 18 about to start. I have no means of preventing indefinite
dolay if either branch of the National Legislature should decide to
recommit the measure to a Committee for further study.
If I sign the Bill I would be necused of giving my approval
to salaries which most persons regard AS excessive in the midst of a
war for the survival of this Nation.
Thus the Congress has successfully and effectively circum-
vented my power to veto.
All that remains to me is to permit the Act to become a low
without my signature.
I am doing this with two earnest objuctions. The first is
against the practice of attaching extrancous riders to any Bill. The
second is to make clear to the country that I still hope and trust that
the Congress, at the curliest possible moment, will give consideration
to imposing a special war supertax on net income, from whatever source
dorived, which after the payment of all taxes exceeds 425,000.
I still believe that the nation has a common purpose --
equality of secrifico in war time.
Regraded Unclassified
1
Fobruary 15, 1943
Dear Mr. Chairmant
Some days ago you wrote me that there was a proposal before
your Committee to amend the Public Debt Bill by adding a provision
nullifying the Executive Order issued by me under the Act of October 2,
1942, limiting salaries to $25,000 after taxes, and asked if I cared to
submit any views with reference to the proposal. In reply, I told you
trut I hoped the Public Debt. Bill could be passed without adding amend-
ments not related to the subject, but that if the Committee thought
otherwise, I would later write you my views.
In A message to the Congruss on April 27, 1942, I stated, ".
discropancies between low personal incomes and very high personal in-
comes should be lessened; and I therefore believe that in time of this
grave national danger, when all execus income should go to win the war,
no American citizon ought to have a not income, after he has paid his
taxus, of more than $25,000 a your." Thereafter the Treasury advised
the Committee, "To implement the Prosident's proposal, the Treasury
now recomiends the enactment of e 100% war suportex on that part of the
net income ofter regular income tax which exceede A personal exemption
of 325,000. ++ 4 It is recommended that for the purpose of the super-
tax, joint returns be medo candatory and that a personal exemption of
$25,000 for ench spouso bu allowed, or in effect 150,000 for the married
couple."
50 for as I lesow, nuither Houae of the Congross acted upon the
recommendation.
When the Act of October 2, 1942 VGS passod, 11. authorized me
to adjust wages or salaries whenever I found it receasary "to correct
gross inuquities and also aid in the effective prosecution of the mer."
Pursuant to this nuthority, I issued an Exceutive Order in which, among
other things, it wes provided that in order to correct gross inequitics
and to provide for grunter equality in contributing to the wis effort,
no solary should be authorized to the extent that it exceeds $25,000
not after the payment of LAXUS. Provision was made for certein allow>
ances in order to prevent undue hardships.
The legality of thu Exceutive Order W.B attested by the
Attorney Genoral, prior to its issuance. No Executive Order is issued
without such approval.
The regulation issued under this Order, with my approval,
wis so worded that it. affected only gross sularies in excess of
$67,200, the amount. of taxes due upon such salarios reducing them to
approximntely $25,000 not, I could not exercise the discrition vested
in 150 by the Congruss to adjust salaries, without finding that it is A
gross inequity in wartime to pormit one can to receive n salary in
excuss of $67,200 a year while the Government is drafting another man
and requiring him to serve with the arraed forces for 6600 per year.
I believed it C gross inequity for the President of a Corporation
engaged in the production of materials for the government, to receive
a salary and bonus of $500,000 a year while the workers in the Corpora-
tion were donied an increase in wiges under the provisions of the law
and my Executive Order. The correction of such inequities, I believed,
would aid in the effective prosecution of the wer.
I cell your attention to the fact that the limitation of
solaries W.S, by the langungo of the Order, limited to the war poriod;
and that the law upon which the Order was based expires June 30, 1944,
and can be continued only by the affirmativo action of the Congress.
Therefore, no fair argument can be mode that the limitation was intended
either by the Congress or by the Executive to become permanent law. The
intention WAS mrido plain in my original message. I then and there
affirmed my belief that this limitation should be made # in time of this
grave national danger when all excess income should go to win the war."
Regraded Unclassified
723
-2-
This desire to limit personal profits during wartine is
no thought. Ita origin is neither alien nor obscure. It is in
record with the sclumn pludges of the Republican Party and the
Imporitic Farty.
In 1924, just after our soldiers had ruturned from the
First world har and the louders of both parties were conscious of
If views of the returning soldiors LO to war profiteering, the
Republican Firty declared in its platform:
"Wis bulieve that in tine of war the nation
should draft for its defense not only 163
citizens but (1150 avery resource which may
contribute to success. The country decands
that should the United Status over again be
called upon to defend Itself by amo the Pres-
ident be uppowered to Graft such asterial PV-
sources and such services 15 may b. required,
And to stabilize the prices of services and
con-ntial commodities, whather utilized in
actual wirfare or private Activity."
The Deporatic Party platfors the your solemnly pledged:
"In the evunt, of n.r in which the ean power of
the nation is drafted, all other resources
should likevise be driftsa. This will tend to
discourance war by depriving it of its profite."
I export, this this in 1924, not 1928, and that those were the plat-
family of the Republican and Democratic Partius.
I agree with those who say that the limitation of valarios
dous not dall adoqu.tely with the problem of excessive personal
profits and that the limitation should extend to all income. My
Exceptive Order endouvored to correct the inequity to the cottant of
the jower granted The Congruss cas, however, anko the limits-
tion adoquite by extending it to the coupon clippir _5 well 15 the
can who carns the shlary.
Therefore, I urg. the Congress to lavy -1 special war super-
tax on not income from whitever source derived (including income from
tax except securition) which, after payment of regular income taxes,
decards $25,000 in the caso of = single person, and $50,000 in the
clas of 14 carried couple. If the Concress dous not approv= the
reviendation submitted by the Trussury last June that a flat 100%
supertex be imposed on such 070608 Incume, than I hope the Congress
will provide a address Lux of 50% with steeply graduated rates as
high as 90% The amount of the exceptions to be allowed and
the exact rate of texation to bu applied are nucessurily arbitrary
and these are Letters the Congress nust ducide.
If taxes are leviod, which substantially accomplish the
purpose I have indicated, alther in a superate bill or in the rescind
-ral Revenue Bill you are considering, I shill invediately
the soction of the Executivo Order in question. The Congress may
appropriately provide that such tixes should take the place of the
$25,000 limitation imposed by Executive Order.
I trust, howover, that without such tax lovies, the Con-
gruss will NOT rescing the linitation and punit the existunce of
inaguities that suriously affect the morale of soldiers and sailors,
farmers and workers, imporiling offorts to stabilize vagus and prices,
and theruby imphiring the frective prosecution of the war.
Very truly yours,
FRANKLIN D. ROOSEVELT
Regraded Unclassified
224
PARAPHRASE OF TELEGRAM RECEIVED
FROM: American Embassy, Chungking, China
DATE: April 11, 1943, 9 a.m.
NO.: 527
Reference is made to the last paragraph of my 492 of the
fifth of April, noon. Dr. Kung, in response to request from
the Belgian Ambassador--Doyen of the Diplomatic Corps--through
the Foreigh Off ice, in order to offer relief from the exchange
situation, has finally indicated willingness, through reluctantly
to give a subsidy of rifty cents on the dollar to diplomatic
missions. It is stipulated though that no publicity should be
given to this action, that no special diplomatic rate be fixed,
and that the word subsidy be used BO as to indicate that the step
is made voluntarily by the Finance Ministry and 1a not a matter
which can later be used as a precedent.
Objection of the Belgian Ambassador to the idea of a sub-
sidy to diplomatic missions (which objection was later withdrawn)
led to altering the phrase to "exchange subsidy". This was then
accepted by the Belgian Ambassador. The Belgian Ambassador will
report back to the Foreign Office when he has obtained the agree-
ment of other Chiefs of Missions, which he is endeavoring to do.
I discussed the matter with the Belgian and British Ambassa-
dors and with the Acting Foreign Minister without making any com-
mitment on our part. The Acting Foreign Minister was informed
that from the standpoint of the Chinese Government, as well as
the diplomatic (omission) the use of the word subsidy in any con-
text was inappropriate, with which he was in agreement, The
Belgian and British Ambassadors, and the Acting Foreign Minister,
were informed that the matter would have to submitted to the
Government of the United States.
Apparently the Foreign Office has not been informed regard-
ing our plans for reciprocal Lend-Lease and it is also possible
that Dr. Kung has not been informed concerning such plans. I see
no reason why other diplomatic missions should not take what
exchange relief they can get regardless of the effect the Lend-
Lease agreement might have on our position, but I would like to
have the instructions of the Department with regard to the
foregoing.
Unsigned
NPL
EA:NW
Regraded Unclassified
226
9b
ASURY
" è) TREASURY
NOT TO M
ARR
$
COPY NO.
13
1.6. SECRET
REIDISH MOOR SKORET SECHET
No. 118
Information received up to 7 c.m., 11th April, 19A3.
1. HAVE
One of H.M. Fast Minelayers intercented an inward Sound blockade
minior, the SILVAPLANA, 4,800 tons, ex-Norwagian on afternoon 10th 220 miles west
of CAPA FINISTERRE. The ship WES scuttled. 146 survivors rescued.
J. MIGITARY
8th Army. Aftor some onemy resistance a for milor south
not of WHARES our loading troops entered the tom nt 1350 hours and by last nicht
on in contact with enemy forces 5 miles north west of the town. 35 miler
inland Now Zealand troops advanced north of the min SF.X-SPAITLE rond with 1nt
requred Division 15 miles further on thuir left.
10th to 2100 hours. Our troops occupied SP.X at 0815 hours. By
L110 hours forward clements of 7th Armound Division had reched a point 8 miles
worth vest of SFAX end 51ct Division vere 5 miles south of the town. Loading
-roops of Now Zetland Division reached L. RUNCHA octivious SF,X and ATEM while patrol
of lst Armoured Division Vero moving north Lowards K.ISOUAN. Air reconnaissance
"RE reported hanvy traffic on ronds to the north and northesit through KATROUN
cit on the coastal road na for north 0.0 cafidaville.
lot Army. On the 9th troops of 73th Division captured CHAOUGR 6
miles north west of MRDJEZ EL B.B together with the high ground to the northwest
at it, All objectives for our attack of the 7th/9th have been captured together
vick 175 prisoners including about 500 German. Further south French forces occupitier
the high ground 3 milas north onst 01' PICHON and good progress was made on the
couthlest slopes of the hills north of PICHON. Enemy resistance was strong in the
hills north and south of the FONDOUK PASS but by 1600 hours they had been cleared
tod our ermour passed through vestwards 10th. 6th Armoured Division follo ing up
Visa onemy townrds K..IROUAN had some tank casualties from anemy mines in FONDOUK CAP
Other Unitod Kingdom troops and 34th United States Division are following along and
clouring up north and south of FONDOUK Gr.P.
3. AIR OPERATIONS
WESTERN FRONT. 9th/10th. DUISBURG. 296 tons of H.E. and incon-
diaries were dropped. Complete thin cloud with occasional broaks covered objective.
Attnck lested 17 minutos. Reports vary some alleging concentration of well ustrb-
lighed fires, others describing fires as posttored. Heavy A.A. accurate and fairly
intense. Fow searchlights.
10th. In Northorn FEANCE nd the Low Countries fightors, of which
< nro missing, destroyed bargo end demiged 22 small craft and 3 goods trains.
Blocked runner thought to be 6200 ton Italian ship balieved to be returning after
an attempt to brank out :nd ascorted by 4 Guymen destroyers was attncked by 6
llingtons and 5 torpedo carrying Hempdons 120 miles southwost of ST. NAZAIRE.
ship was hit with e bomb and one of the uscorts was damaged. A Hampden and n
ufighter of the fighter escort are missing.
10th/11th. Aircraft despatched - FRANKFURT 502 (19 outstanding, 2
thed in the sue and 1 in United Kingdom); son mining 7, leaflets 4. Preliminary
into indicato completo cloud over FRANKFURT at about 10,000 feet.
TUNISIA. 8th/9th. Wellingtons and Hnlifaxes dropped 104 tons of
on SOUSSE and its Landing ground, lso vehicles on the EL DJEM rond.
9th. Fighters intercepted 16 IU 88's in the PICHON/KAIROUAN Area.
"y 3, 3, 1. allied - 1 missing.
Regraded Unclassified
226
April 12, 1943
9:20 a.m.
FINANCING
Present: Mr. Bell
Mr. Gaston
Mr. Robbins
Mr. Buffington
Mr. Graves
Mr. Gamble
Mr. Peabody
Miss Elliott
H.M.JR: Mr. Bell
MR. BELL: Did you see the piece in the Wall Street
Journal about what the President said on inflation - what
he said about the enforced savings plan that is being
worked out?
H.M.JR: The President didn't say that. I don't
think he said that.
MR. GASTON: The newspapermen told me that at the
press conference on Friday morning he talked a little
about forced savings.
H.M.JR: Well, if that is the worst he does--
MR. BELL: "Administration plans for taxes and
forced savings are being worked out."
H.M.JR: Well, don't look at me so seriously.
(Laughter) He gave us 8 great boost last night. lle
said that thanks to the April drive in the Treasury he
was going to veto the bill, so that everybody who doesn't
like the twenty-five-thousand-dollar feature ought to
feel kindly disposed to the Treasury. (Laughter)
Regraded Unclassified
227
- 2 -
It was kind of a left-handed compliment, but at
least, in the room here, seeing that I never saw it
until four-thirty--
MR. BELL: It was a good message.
H.M.JR: It was all right.
MR. GASTON: It was a Ben Cohen message, wasn't it?
MR. BELL: I don't know. I thought it was pretty
well written, particularly that part about attaching.
irrelevant riders to the bill. (Laughter)
MR. GASTON: That is a strong feature - well
justified.
H.M.JR: I think that on the whole we in the Treasury
can be ery well pleased with what the President did last
week. He did the movie for us. I mean, he has got a lot
of things on his mind. He gave us a letter to the news
people that they could use that.
MR. PEABODY: That was the carrier boys, Mr. Secretary.
H.M.JR: What else, Mr. Bell? I take it that you
people in the room will keep Mr. Gaston and me informed
on how this drive is going along.
MR. BELL: Every day. You mean as to the amount?
We get a report every night, as we did on the other.
H.M.JR: By districts?
MR. BELL: Yes, by districts and by issues, but not
down to individuals, and 80 forth.
MR. BUFFINGTON: We asked, Dan, that in the districts
they make estimates from their figures on number of sales,
as we did in the last drive.
MR. BELL: We won't give that out until the end,
though.
Regraded Unclassified
228
- 3 -
MR. BUFFINGTON: That is right.
H.M.JR: The last report on the weather seems bad.
It is getting steadily worse. They will give me, as
far as I am concerned, a final weather report at eleven.
I am not going to fuss. If at eleven it still looks bad,
I will go up on the train at one and come back at mid-
night.
I am not going to this time get up as far as
Philadelphia and have them put me back and then try to
scramble into a train.
MR. GASTON: I would like to make a suggestion, and
that is that if you can you should try to get away by
eleven o'clock - get an eleven o'clock train, get up
there and go to the hotel and give yourself a counle of
hours to lie down before you eat dinner. I think it
would make it much easier if you could do that.
(Miss Elliott entered the conference.)
H.M.JR: That isn't a bad idea. You mean get up
there earlier?
MR. GASTON: Yes, leave here by eleven and get up
there at three or three-thirty.
H.M.JR: Anything else, Dan?
MR. BELL: No.
H.M.JR: Harold, you look kind of fresh and full
of beans. (Laughter)
MR. GRAVES: I feel all right.
H.M.JR: Are you attending this meeting tonight?
MR. GRAVES: No, I wasn't intending to.
H.M.JR: Incidentally, Mr. Manager, I am going as is.
Regraded Unclassified
229
- 4 -
MR. GAMBLE: That is right, that is correct.
H.M.JR: Miss Elliott?
MISS ELLIOTT: No, sir. I got back yesterday from
North Carolina, and I was very much pleased with the way
they are organizing things there.
They are starting this morning in Greensboro with
a public meeting and a parade, and interest is very
general. I was particularly pleased with the way they
had organized the whole community.
I called Raleigh, and they are doing the same
thing there, which I thought was a very good beginning.
I also found at the college and down at Chapel Hill
great interest among the students. They had a student
committee meet with me Saturday noon - the Chapel Hill
unit, also - and there was great interest in the student
group.
H.M.JR: Good. We are counting on you women.
MISS ELLIOTT: Ringing those doorbells? (Laughter)
MR. ROBBINS: I don't think of anything that is
critical or vital this morning. I think we are right
in the dead center spot.
H.M.JR: All right.
MR. BELL: The slogan is going over well.
MR. ROBBINS: Incidentally, I like our board out
here. (Indicating billboard outside the Treasury.)
H.M.JR: I will have to look at it.
MISS ELLIOTT: I did notice, Mr. Secretary, that
in all the papers, and I saw southern papers - I went to
the library Saturday morning and looked over all of the
Regraded Unclassified
230
- 5 -
papers, and they are carrying full-page announcements,
with the slogan very prominent in them.
H.M.JR: Will one of you gentlemen just think
this over. You are saying that the Washington Herald
isn't doing enough. I don't know how to approach the
woman, and I don't want to, but you might inquire around -
I don't know - she is a very sentimental person.
MR. ROBBINS: It certainly is conspicuous by absence
of advertising.
H.M.JR: I don't know who is close to her. Some
of the big department store advertisers might or might
not be.
MR. ROBBINS: Maybe Mr. Rust, the local leader here,
might have more interest than any of us.
H.M.JR: What business is he in?
MR. ROBBINS: Real estate.
MR. GAMBLE: Hecht's is their biggest advertiser.
MR. GASTON: Let Rust do the talking to Hecht's.
H.M.JR: Can I throw that out?
MR. ROBBINS: I am going to see Mr. Rust at eleven
o'clock.
MR. BELL: The business manager over there is a very
nice fellow. I don't know whether he has any influence
or not.
H.M.JR: I am just throwing it out. After all, if
she slaps us off we are no worse off than we were. But,
as I say, she is a sentimental person.
MR. ROBBINS: The Post has gone all-out.
Regraded Unclassified
231
- 6 -
H.M.JR: I will be curious about what happens. It
will be an interesting experiment in psychology. I mean,
the woman started as a great Roosevelt person, then she
got in this terrific row down at Warm Springs with Ray
Moley. They actually had a battle, fistic battle, in
her private car. From that day on she has been off the
New Deal, SO to speak, but up to that time she was all-
out. I suppose she and Ray Moley now weep on each other's
shoulders. (Laughter)
MR. PEABODY: It is a deliberate thing. From the
standpoint of news, there isn't any reason why that
shouldn't be on the front page today.
H.M.JR: I will make a bet that the Chicago Tribune
goes all-out. Take a look at the New York Daily News,
too, will you?
I was very much pleased with the opening this
morning.
Mr. Peabody, anything else?
MR. PEABODY: No, sir.
H.M.JR: I would like to see you, my manager, after-
wards.
MR. GAMBLE: Yes, sir.
H.M.JR: I hope you have no headache?
MR. GAMBLE: I have not.
H.M.JR: George?
MR. BUFFINGTON: I have nothing.
H.M.JR: Herbert?
MR. GASTON: I was thinking of something which I
suppose will be done anyway, and that is I think a
Regraded Unclassified
232
- 7 -
pretty careful survey of the use of advertising space
during this campaign would be worth doing, see whether
they spread it properly, whether they over-do it, whether
they under-do it.
MR. PEABODY: We are doing a new thing on that for
this drive. We are getting a checking agency - not an
ordinary news checking agency but one which specializes
in checking advertisements - and they are going to check
every paper that they get, which is substantially all
papers, and give us a tabulation at the end of the thing
on all of the stuff that appeared.
H.M.JR: Who is going to do that?
MR. PEABODY: A checking agency in New York. I
don't remember the name of it.
H.M.JR: Fine.
MR. PEABODY: Heretofore we had a spot check and
had gotten a lot from the districts, but this time we
are going to get the whole thing.
H.M.JR: Did you men get anything out of Likert?
MR. PEABODY: Yes.
MR. ROBBINS: Yes, indeed. That is a fine service,
and it is something that I think we can use very
effectively as we go on.
H.M.JR: I am going to call up LaRoche in a little
while and ask him whether he won't let me have Smith and
Albee down again this week just in case I want to do
another speech. I would like them to be thinking about
it.
Thursday and Friday I have to testify on the
Stabilization again, and after that I an holding myself
in readiness to go anywhere that is necessary.
Regraded Unclassified
233
- 8 -
MR. ROBBINS: Our thought there, sir, is that We
would like very much to have you go as far west as you
feel you can.
H.M.JR: Well, I would be--
MR. ROBBINS: Would you seriously think of going
all the way to the Coast?
H.M.JR: I would on one condition. I insist on
going to Portland. (Laughter)
MR. PEABODY: Managerial relationships. (Laughter)
MR. ROBBINS: If you would seriously consider
going to the Coast, I think it would b e splendid.
H.M.JR: You think that is where I would be needed
the most?
MR. ROBBINS: Yes.
H.M.JR: Think a little bit about it. I wouldn't
tell them anything, but let's just see.
I have to do this Stabilization thing in the House
and Senate on Thursday and Friday, and after that I am
free.
MR. PEABODY: Mr. Rubicam has told Smith to be
available to you for this drive, so that is cleared.
H.M.JR: Well, I would like to have them ·down
here - you can save me a call, if you will--
MR. PEABODY: Glad to.
H.M.JR: Either one - really both of them because
they like to work together, don't they? Smith is
cleared for this drive?
MR. PEABODY: Mr. Rubicam told Mr. Smith that he
was to do anything on this drive you wanted him to.
Regraded Unclassified
234
- 9 -
H.M.JR: If Smith œuld come down with enough
collars to last him, if necessary, throughout the
week - and the other man, too, Albee - and tell them
when they come down they will not be rushed. I want
to sit around and just talk with them. I would like
them to get the feel of this thing.
MR. PEABODY: Will you be able to talk with them
tomorrow?
H.M.JR: Yes. If Smith could be here the whole
drive it would be wonderful. Gaston mentioned it to me.
MR. GASTON: Yes.
H.M.JR: That fellow has got - he can tell pretty
well how the public will react. He is awfully good.
MR. ROBBINS: He is top-flight in that work.
MR. GASTON: If he comes down here I think it would
be a good idea to get together clippings showing the
sore spots, the attacks and criticism over a period,
and discuss the general thing about how to handle them.
He is smart.
H.M.JR: You will take care of that for me?
MR. PEABODY: Yes, sir.
H.M.JR: I will tell you what I will do now. If
they will come, I will set the time for ten-thirty for
them.
MR. PEABODY: All right, sir, I will confirm that
this morning. If for any reason they can't make that
time I will let you know.
Regraded Unclassified
235
April 12, 1943
9:50 a.m.
HMJr:
Hello.
Cong. Wright
Patman:
Henry, this 18 Wright Patman.
HMJr:
Hello, Wright. How are you?
P:
Fine. I hope you're all right.
HMJr:
I hope 80.
P:
Did you see that - (laughs) - yes - did you
see that Post editorial this morning?
HMJr:
No.
P:
I thought it right good about this Second
War Loan Drive, and I wanted to give it a
boost - what I mean, your drive - and I
wonder if it would be all right with you
or meet your - with your disapproval if I
recommended Series G Bonds for people who
can invest more than $100?
HMJr:
You mean just pick that one out?
P:
Well, for those who invest in that - in
that category, from $100 to $10,000. On
the theory, I believe they'll keep those
bonds better. You know, these - these 10-
year bonds, I think they'd come nearer
cashing them
HMJr:
Yeah.
P:
....when they find out how low the interest
rate 18 for the first few years.
HMJr:
Of course, the ones that we'd like them to
buy the most 18 this 21% bond, the long one.
P:
The long one.
HMJr:
Yeah.
Regraded Unclassified
236
- 2 -
P:
Well, that's the which - which series is that?
HMJr:
It has no particular name. It's just known as
the tap issue.
P:
The - the tap issue?
HMJr:
Yes.
P:
Oh, that's the 21%.
HMJr:
Yeah.
P:
Well, that would be just as good.
HMJr:
From the standpoint of the Treasury, that's the
best issue for us to have the public own.
P:
Uh huh. And they can get their money any time any-
way on sixty days notice, can't they?
HMJr:
No, no, they can't. It's not a demand issue.
P:
It's not?
HMJr:
No, that one fluctuates with the market.
P:
Well, you're not going to let them go down below
par, are you?
HMJr:
We're going to try our best not to, but we can't
promise anything. But, of course, a man would be
a fool not to buy his $100,000 limit of either F
or G.
P:
Uh huh.
HMJr:
See?
P:
Uh huh.
HMJr:
What we'd like them to do is this.
P:
Well, listen, I don't like that business of put-
ting - them things on the open market. You know....
HMJr:
Well....
Regraded Unclassified
237
- 3 -
P:
that's what we're trying to avoid.
HMJr:
Well, the point 18 this. We'd like everybody
first to buy everything they can of the E Bond.
That's the best from the fellow - man's - from
the standpoint of the investor, see?
P:
Yeah.
HMJr:
And then next - if he loads up with F and G,
that's the thing for him to do.
P:
Uh huh.
HMJr:
And then if he has over 8 $100,000, the long bonds.
P:
Uh huh, yeah.
HMJr:
See?
P:
Yeah. And, of course, that won't hit the small
investor?
HMJr:
No, no, no, we're - we're protecting the small
investor.
P:
Yeah, well, that's good.
HMJr:
The whole purpose here is to avoid the mistakes
of the first war where they didn't look after the
small investor.
P:
That's right. Well, I - - I'm glad to know that.
HMJr:
Now - that the whole underlying principle here
is - and on this long run, for instance, we don't
sell anything less than a $500 bond.
P:
Uh huh, I know.
HMJr:
Because we don't - we don't want the little fellow
to buy it.
P:
Yeah.
HMJr:
See?
P:
Yeah. There's a good description of all those
issues in this morning's Daily News put in by
the Bowery Bank.
Regraded Unclassified
238
- 4 -
HMJr:
Good. But we - we don't - we don't want
the little fellow buying it. We want to
protect him. We don't want to see the bonds
go down to eighty-three the way they did and
all that.
P:
That's right.
HMJr:
And we don't want him to hypothecate them.
P:
Yeah.
HMJr:
The whole thing is designed to look after the
little fellow.
P:
Well, that's good.
HMJr:
So if - if you're going to make a speech or
anything, I'd recommend in this order if I
might suggest it, first, the E and then the
F and G.
P:
That's right. For the little fellows.
HMJr:
For the little fellow. And if they got any
money left over, why then they can go into
the other bonds.
P:
That's good.
HMJr:
How....
P:
Well, I'm anxious to get this tax business
started. I think the President's exactly
right....
HMJr:
Yes.
P:
if we don't tax some, we're going to have
inflation.
HMJr:
Yes, no question about it.
P:
And we got to go to work on that.
HMJr:
Well - we've been working on it, and I -
you watch Doughton today.
Regraded Unclassified
239
- 5 -
P:
Yeah, okay. And I sure thank you for this
HMJr:
And again - well, I'm indebted to you for
excusing me the other day.
P:
(Laughs) Oh, that's all right.
HMJr:
Thank you.
P:
I'll - - I'll get a hold of you some other time.
HMJr:
Thank you.
P:
All right, thank you. Goodbye.
Regraded Unclassified
240
April 12, 1943
10:05 a.m.
HMJr:
Hello.
Operator:
Mr. Boettiger.
HMJr:
Hello. Hello.
John
Boettiger:
Hello, Henry.
HMJr:
Hello, John.
B:
How are you?
HMJr:
I'm okay. How are you?
B:
I'm fine. I talked with Elinor a little bit
ago and I have gathered from her and from
FitzGerald that you're really busy as hell
writing a wonderful speech for tonight.
HMJr:
Well, that's the idea, and we're leaving at
quarter of eleven to go up to New York.
B:
Yeah, well, we'll be back - Anna isn't here
yet. She's coming in later in the week, and
we'll go right down to Charlottesville, and
we ought to be back here around the 8th or
the 10th of May. Are you planning to be in
town then?
HMJr:
Oh, yes.
B:
Well, we'll - we'll try to work out that
evening that we missed the last time.
HMJr:
Well, you've got two rain checks on it.
B:
(Laughs) All right, fine. I've got a couple
of little things to talk with you about, but
they can wait until then.
HMJr:
Okay.
B:
How are you?
HMJr:
I'm all right, and things are coming a little
bit faster than usual, that's all, and....
Regraded Unclassified
241
- 2 -
B:
Yeah.
HMJr:
But....
B:
Don't let it get you down, Henry.
HMJr:
It isn't.
B:
Okay, fine.
HMJr:
And I'm very envious of you.
B:
(Laughs) Well, I'm envious of myself somehow or
other. I can't believe it's me.
HMJr:
Well, it's wonderful.
B:
I dumped all the worries and troubles in the world
there, and I may - I may get into a mare's-nest of
new ones, but at - at least while I'm contemplating
it, it's - - it's - it looks all right.
HMJr:
Well, as I say, I wish you the best of luck, John.
B:
Thanks a lot, Henry, and I'll be seeing you.
HMJr:
Right.
B:
Fine. Goodbye.
Regraded Unclassified
242
April 12, 1943
READING COPY OF THE SECRETARY'S
SPEECH AT CARNEGIE HALL, NEW YORK, UPON
THE LAUNCHING OF THE SECOND WAR LOAN DRIVE.
243
Tonight I'm going to talk about something
you might not expect the Treasury Department to
discuss. I'm going to talk about the Second Front.
The Second Front is no military secret.
We all know that, just over the horizon, we of
the United Nations are piling up the thunder-clouds
of the greatest attack in history. We are massing
for that attack, now. The planning, the patient
preparation, the bitter time when we had to take
blows without returning them, because we weren't
ready -- all of that is past. Now we're ready
to deal a few blows ourselves; and they'll be
blows, I can promise you, that will rock Nazi
Germany to its rotten, bloodstained foundations.
1467
116
1351
Regraded Unclassified
244
-2-
Pause
As the Secretary of the Treasury I've
been given the job of seeing to it that money
is available to pay for this great military
offensive and others to follow. This is why
we are launching the Second War Loan tonight --
to raise at least 13 billion dollars before the
end of this month to buy materials and implements
of war. We must buy shells today for big guns
that will be roaring tomorrow and the day after.
I'm here tonight to tell you that your help is
needed. The need is real, urgent, pressing.
Ten percent is no longer enough. We are asking
everyone to buy extra bonds this month, even workers
who are now participating in the payroll savings plan.
122
1229
Regraded Unclassified
245
-3-
Pause
In our private lives none of us deals
with billion-dollar figures. I know they're
bewildering.
But except for the size of the figures
involved there is no mystery about financing
a war $ The Government of the United States
is buying the best equipment ever furnished to
any army. It is paying not only for equipment
that reaches the fighting fronts, but for some
equipment that never gets there. For every
ship that's sunk we must build two new ships --
for every cargo that's lost we must send out
two new cargoes. And that costs money.
Where are we going to get it?
103
1126
Regraded Unclassified
246
-4-
Well, there are several ways to get
the money. We can raise it through taxes.
We can borrow it from the banks. And we can
borrow it from the people -- and that means you.
We are now getting more money through
taxes than ever before. And it will be necessary,
I have no doubt, to ask for still more. But we
cannot rely on taxes alone to do the whole job,
and I wouldn't want to -- because we could not
tax with fairness on so huge a scale.
We could borrow all the money from the
banks. Our credit is excellent. But for a
variety of reasons, economic and social, this
is also undesirable. One reason goes to the
very heart of our system of Government.
126
1000
Regraded Unclassified
247
-5-
It is important to me as I know it is to you.
1 3 thru
This is a people's war -- so all of the people (4 minutes
ought to have a part in financing it.
And I know you feel the same way about 1t,
because five-sixths of all the people who are
earning money today have bought bonds.
Pause
As Secretary of the Treasury, I can report
that 96 cents out of every dollar which comes into
the Treasury, through war bonds, taxes, or
anything else, is spent for war purposes.
When you pay eighteen dollars and seventy-five
cents for a bond, eighteen dollars go immediately
into guns and planes and equipment. The 75 cents
goes for the regular expenditures of the Government.
122
878
Regraded Unclassified
248
-6-
The cost of selling bonds is indeed
very small. And this is because you and
your neighbors and hundreds of thousands of
volunteers across the country have taken over
the job of selling. I'd like to express,
to all of you, my deepest gratitude. I should
like to thank all of those who are helping --
management and labor, for the splendid success
they have made of the payroll savings plan,
under which more than 25 million working people
now regularly invest almost 9 percent of their
wages and salaries.
90
788
Regraded Unclassified
249
-7-
I'd like to thank manufacturing and retail
business firms, large and small, who have
given us, free of charge, millions of dollars
worth of advertising space and radio time,
as has the Bell Telephone System tonight.
And the Federal Reserve System and thousands
of banks working with them -- and all the
others who are giving their time in this way
in the service of their country.
Pause
You can feel every confidence that the
financial affairs of your Government are in
good condition as the United Nations go on the
offensive. The situation is well in hand.
We know where we're going. We know how much
money our armed forces will need.
111
677
Regraded Unclassified
250
-8-
Pause
During this month of April we must get
thirteen billion dollars. We shall then have
borrowed about twenty billions in the first four
months of this year. We will need to borrow
about twenty-five billions during the second four
months, and, without any new taxes, another
billions
twenty-five in the final period of the year;
a total of about seventy billion dollars for
the year.
I would like to assure you that we can
afford it.
But seventy billion dollars 1s, of course,
a lot of money. It isn't going to be easy
to raise it. It means hard work.
101
576
Regraded Unclassified
251
-9-
But I have every confidence, knowing the American
people and how deeply serious they are about
this war, that we will get it. We will get it
from people who will scrimp and save if need be
to buy these bonds. We will get it especially
from those upon whom we must depend most heavily --
the men and women who are making good money in
shipyards and plane factories and tank production;
the gallant women who used to call themselves
housewives but who are working today at lathes 2/3 2 thru
(8 minutes)
and drill-presses in the great war plants.
96
48
Regraded Unclassified
252
-10-
These are the Americans who, all together, buy
bonds in amounts that a millionaire, or even
all of the millionaires combined, could never
hope to equal. And they'll buy more of them
this year -- this year when 10 percent is no
longer enough.
The boys at the front are counting on them.
They are counting on you.
All of us will buy bonds because all of
us know that this is our war and that we must
win it. We must win it so that nations with
a bloody philosophy out of the dark ages of
mankind's past will never again be able to raise
a traitorous hand against neighbors wanting only
to live in peace and friendly good will.
120
360
Regraded Unclassified
253
-11-
just about An hour ago I passed through a railroad
station. Standing at the iron gates, saying
goodbye, were boys in uniform with their girls,
their wives -- young couples come to the
heart-breaking minute when there were no more
words; when all they could do was to stand
with their hands clenched so tightly together
that they hurt. And as I passed them I thought
of all the other young Americans whose lives have
been torn into ragged bits -- young architects
and engineers giving up their studies; school-girls
working in factories; farmers sending their
wives and youngsters out to work in the fields
because they can't get hired hands; business men
losing what they've spent twenty years creating,
because of the necessary curtailments.
125
235
Regraded Unclassified
254
-12-
By what right do the Germans, the Japanese,
blight our lives, shatter our homes, whirl away
our boys to drown five thousand miles from home
in a scum of oil at sea, or bleed and cough
their lives out in a muddy, filthy ditch?
Who do they think they are? We know only too
well who they think they are. They're the
supermen, the Master Races, put here on earth
to enslave the rest of us and crack the whip
over our bare backs while we do their dirty
chores -- they and their "great" armies;
their great armies of sneaks and bullies
that jump on weak, helpless nations when
they aren't looking.
112
123
Regraded Unclassified
255
-13-
The Japs, with their dreams of empire, built
on lies and treachery. The Germans, who
twice within the memory of living men have
tried, with their Kaisers and their Fuehrers,
to conquer the rest of our world. We say:
"Never again!" We of the United Nations
will show them who we are. We'll show them
some really great armies -- Chinese and Russian,
British and American.
These armies are the mightiest military
machine in all history. But to us they are
friends and husbands, fathers and sons. They
are your boys and my boys.
93
30
Regraded Unclassified
256
-14-
Pause
They are asked to give their lives.
You are only asked to lend your money.
Pause
Shall we be more tender with our dollars
than with the lives of our sons?
30
257
TREASURY DEPARTMENT
Washington
FOR RELEASE, MORNING MEWSPAPERS,
Press Service
Monday, April 12, 1943
lio. 36-11
Washington, D. C., April 12 - In scores of communities
throughout the nation, volunteer workers in the Treasury's
Second War Loan drive "jumped the sun" on Bond sales and as
early as a minute after micnight rang up the first purchases
of the 13 billion dollar quota set for the drive.
In the meantime on the opening day of the campaign the
civilian army of more than a million men and women wheeled
into action in what officials of the drive and was "the
greatest demonstration of unity and cooperation ever mani-
fested in the history of the nation."
Parades, rallies, demonstrations of all kinds were
scheduled to feature the first day's promotion to bring home
vividly to the American people the vital importance of the
Treasury's war financing program which must proceed at a
pace of hundreds of millions of dollars d=11y to reach the
goal in the time set.
Highlighting the opening day's activities will be a
radio message tonight from Secretary of the Treasury
Morgenthau, speaking at n rally in Carnegie Hall. He will
be joined in a program, the broadcast portion of which will
begin at 9 P. m., Eastern War Time, by Governor Thomas E.
Dewey of New York and President Philip Hurray of the Con-
gress of Industrial Organizations and President William
Green of the American Federation of Labor.
The bulk 01 the financing must come from non-banking
sources, including the workers in plants, stores and offices
in income brackets of from $1,000 to $5,000, officials said.
Backing up the point-of-sales efforts was the most wide-
spread advertising end promotion campaign ever placed behind
a single product, and from newspapers, both daily and weekly,
from the radio, both individual stations and the networks,
came the message of urgency and the story of the part the
American people must play in the Second War Loan Drive,
Spread on thousands of billboards, on car cards, millions
of posters and throughout the retail stores of the nation, was
the same story - "They give their Lives - You lend your
money, " which is the theme of the campaign.
-000-
Regraded Unclassified
4
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE April 12, 1943
TO
Secretary Morgenthau
Mr. Peabody o.P.
FROM
I thought you might like to see the latest series of
ads which are to be contributed to the Treasury by the
Drug, Cosmetic and Allied Industries.
These ads are written in such a way as to focus closely
on the circulations of magazines of various kinds.
They were prepared by Benton & Bowles, Pedlar & Ryan,
and Young & Rubicam.
Attachments.
Regraded Unclassified
Will you do without an evening gown today
for a wedding dress tomorrow ?
T
HAT'S a gorgeous evening gown
come true Joon-you won't buy that
you're thinking of buying It's
evening gown!
Here's what War Bonds
so gay and glamorous-and what a
You'll buy U. S. War Bonds in-
do for You!
flattering neck line! It's YOU.
stead! You'll help make sure that we
1 They are the safest place in all the
But who's going to see you wear it
will win the war!
world for your savings.
-if America should lose the war?
Just what are U.S. War Bonds?
2 They are a written promise from
the United States of America to pay
Not that soldier you kissed good-
They're the incendiaries that will
you back every penny you put in.
bye in a mist of tears! He's not going
rain on Tokyo and Berlin - the
3 They pay you back 54 for every $5
to sec it until it's years out of style if
landing barges that will win back
you put in, at the end of ten years
America should lose the war.
the Philippines!
this is interest at the rate of 2.9 prr
cent.
Remember! Germany knocked out
They're your anchor to wind-
ward-your nest egg for the future.
4 You may turn them in and get your
France in June, 1940. And today mil-
cash back at any time after 60 days.
lions of Frenchmen are still Nazi
They're your white satin wed-
The longer you hold them, the more
ding dress, your coroner of lace,
they're worth.
prisoners of war!
that little house you dream of by
5 They are never worth less than the
That's the pattern-of defeat.
the edge of the wood.
money you invested in them. They
So, if you want that soldier of yours
And they're the safest, soundest,
can't go down in value. That's il
promise from the financially-strong-
to come marching home before too
strongest investment that anyone
est institution in the world: The
has had the privilege of making in all
United States of America!
many springtimes have passed-if
you want that big church wedding to
the long history of mankind!
SAVE YOUR MONEY THE SAFEST WAY-BUY U.S. WAR BONDS REGULARLY
Published in cooperation with the Drug, Cosmetic and Allied Industries by:
Ad P-2B
Pedlar & Ryne
Regraded Unclassified
260
The biggest dime's worth
in the whole, wide world
I
WAS DRIVING in to the ferd store when
I saw Harry Brown's little girl trudg-
ing toward town carrying a basket of
berries. I invited her to hop in and ride,
"What you doing with the betries.
Dot?" I asked her.
"I pick 'em and Daniel's store buys
"em," she said, "I expect I'll get ten
cents again today. That's what I got
how much better you lel when you do
yesterday and the day before."
it that way,
"That's fine, Dot." I said, "and
Why don't you try as Dedicate a
you'll be just in time for the movie."
bond tn every youngster you know in
She looked up at me, surprised, and
the service. Just figure to yourself that
said, "But it's not for movies, it's for a
your particular bonds are going to save
War Stamp, You get them at the Post
their particular lives some day, that burry!
Office!" I felt sort of funny.
5 reasons why
"That's right." 1 said, "-a War
Stamp. For Uncle Sam."
WAR BONDS ARE THE WORLD'S BEST BUY
"But it's not for Code Sain!" she re-
1. For every 83 you invest in War Bonds,
plied, impatiently. "It's to go for a bond
you get back 84 at the end of 10 years.
tobey bullets and things for my hruther."
"Sure. Dot. or course it's for Andy.
2. War Bonds can't go down in value.
He's fighting for you. away liver there,
After 2 months, your FAB always get your
and you're fighting for him. back home
money hack. After 12 months. your can
here." Dut looked down and didn't say
get it back plus interest! No other in-
restment is an guaranteed.
anything the rest of the trip.
But it set un to thinking. Was I doing
3. Money invested liss War Bonds ennant
as much, in my way, as that little lot
be lost or stalen! The United States
was, in hers? Every dime she worked so
Government guarantees payment-even
hand to earn was deficated to someone
if you lose your bonds. And nobody ran
she loved-her uner brother. And some
cash them in but you or your heirs.
day when Andy marched in the big
victory parade. Dot would know she'd
4. War Bonds protect your other prop.
helped bring it about.
erty-your farm, your insurance, your
bank deposits-by helping to prevent
When I got house Mary and 1 de-
inflation.
cided I could make my overcoat go
another year. Today we took $18.75 and
5. War Bunds are an investment in
bought a was War Bond. It's for Code
American victory, an investment to guard
Sam. of course, but especially for my
your freedom, a protection for every
nephow in the Navy. You'd he surprised
fighting man.
WE'VE GOT TO WIN! BUY BONDS
AND KEEP ON BUYING!
PUBLISHED IN CO-OPERATION WITH THE DRUG, COSMETIC, AND ALLIED INDUSTRIES BY
Ad No. Y2-C
Young & Rubican
Regraded Unclassified
261
The Man you're going to Marry
is asking your Help right now !
H
ELP HIM? Of course you're going
They'll help to put a machine gun in
to help him! After you're mar-
his hands-a gas mask in his pack.
Here's what War Bonds
ried-didn't you always say you'd
They'll supply him with cool water
do for You!
give half your salary towards that
when he's thirsty-with blankets
1 They are the ulnt place in all the
house you planned together-those
when he's cold-with three solid
world for your savings.
curtains and flowered rugs?
meals every day.
2 They are a written promise from
Of course you did! But you can't
the United States of America to pay
They'll build the ships that will
you back every pering you put in
wait 'til you're married to start. The
carry our marines to Tokyo and Yo-
time to help him is now-right now!
3 They pay you back 54 for every N
kohama-the tanks that will carry
you pot in, at the end of tell years
How are you going to do it?-
our flag to Berlin and Munich and
That is interest at the rate of 29%.
You're going to make sacrifices-
Budapest.
You may turn them in for redemp-
tion at any time after 60 days. The
real ones-aren't you? You're going
And when the war is over and the
longer you hold them, the more they're
to give up many things you've
vows are taken, those self-same bonds
worth.
dreamed of-that coat with the big
can be the first deposit in your joint
5 They Are monté less than the
fur collar-that cute little bell hat!
account at the bank! So start buying
money you invited in them. They last
e down in milw. That's a primise frime
And with the money you save-
them today. Invest in the safest cor-
the financially-strungest institution in the
poration in the world-your United
and The United States of America!
you're going to buy U.S. War Bonds!
Your bonds will help your sweetheart!
States of America!
SAVE YOUR MONEY THE SAFEST WAY-BUY U.S. WAR BONDS REGULARLY
Published in cooperation teith the Drug. Carmetic and Allied Industries by:
Ad No. P-3B
Pedlar & Ryan
Regraded Unclassified
Ever wonder what a soldier thinks about?
YOU'VE never tried to cram yourself into a
Give us tank for tank, plane for plane, and gun for
FACTS
fox-hole while all Hell breaks loose around
gun-and we'll beat the Japs and Naris And the
you, and the bombs come raining down
more and faster we get them. the sooner we'll
ABOUT WAR BONDS
If you've never waited, your throat parched,
win-yes, and the fewer will be the white crosses
on the battlefields.
your heart pounding, your very hands sweating,
1. Wer Bonds cost $18.75 for which
as the Captain's watch ticks off the last seconda
you receive $25 is 10 years-or
before you attack, to stake your life against the
$4 for every $3.
Can you sit down and examine your conscience?
Nari or the Jap
Can you truthfully say you are buying all the
If you've never tried to keep your finger steady
War Bonds you can afford?
2. War Bonds are the world's safest
Investment guaranteed by
on the trigger of a machine gun, while your bud-
Would you buy more if the life of your own
the United States Government.
dies drop on all sides of you
son depended on it? Would you step up your pur-
Well, you just can't know what a soldier thinks
chases to every dollar you could scrape together if
3.
Wer Bonds can be mode out in
about war, and life
and death. Let me tell you.
the future of your country hung on your actions?
I same or 2. as co-owners.
We don't want to die. We're young. We have
Multiply yourself by millions of other Ameri-
4.
War Bonds cannot go down in
our whole lives before us. But if we've got to
cans, and you'll see that each man and woman
choose between death and defeat say good-
ralue. IF they are lest, the Gen-
must help decide the fate of all of us.
emment will have new cest.
bye right now!
So sit down and do a little figuring, will you?
Once in a while we soldiers sit around and talk
Take another notch in your belt. Put every last
5.
War Bonds con be cashed in, in
about things
back home. And we just can't
dime and dollar you can possibly afford into War
case of necessity, after 60 days.
help wondering why anybody's got to be asked
Bonds.
to buy War Bonds, when the very lives of their
6.
War Bonds begin to occrue in
brothers, their sons and their loved ones depend
Then maybe they'll come back sooner, these
terest after one year,
on the things those War Bonds buy.
boys of ours. More of them. Victorious. Alive.
Keep on Buying War Bonds
PUBLISHED IN COOPERATION WITH THE DRUG, COSMETIC AND ALLIED INDUSTRIES BY
Bonton
Regraded Unclassified
Ad R-JA
Next?
FACTS
THERE'S no rule about the length of a war, and
ABOUT WAR BONDS
planes, tanks, guns and ships-tens of billions of
no telling how great the sacrifices needed to win it.
dollars. It takes War Bond money-from you, and
1.
War Bonds cost $18.75 for which you
All we know is that it must be won.
you, and you-regularly-every payday-10% of
receive $25 in 10 years-or $4 for
We hope and pray that the next generation will
your income, at least-more, if you can.
every $3.
be spared-that our lada of fourteen and fifteen are
Your Government will give you back $4 in 10
2.
War Bonds ore the world's select in
destined for something else but the horrors of war
years for every $3 you invest now-$25 for each
vesiment-guaranteed by the United
$18.75 Bond you buy. And your investment is
States Government.
and the fields of battle.
We hope that we, of this generation, may trans-
backed and guaranteed by all the strength of the
3. War Bonds con be mode auf in I
mit to the next generation a world in which ruthless
world's most powerful nation.
name or 2, as CO-Owners.
savagery and killing have ceased
a world in
The better we arm our men, the more lives of our
4. War Bonds cannot P° down in value.
which they may live and work in peace.
boys will be spared, and the sooner will their future
if they are lost, the government will
issue new ones,
America must not lose this war-dare not lose it!
be assured.
We must win as quickly and completely as pos-
Knowing this to be true-knowing that War
5.
War Bonds can be cashed In. in casa
Bonds will help save our country-the lives of our
of necessity, after 60 days.
sible. If we win in time, hundreds of thousands of
lives will be saved, and the youths of today will
fighting men-yes, even the lives of those who are
6. War Bonds begin to occrue interest
build the greater America of tomorrow.
Can you possibly not put every
after one year.
mere boys now
It takes money to provide our fighting men with
dollar you can scrape together into War Bonds?
Keep on Buying War Bonds
PUBLISHED IN COOPERATION WITH THE DRUG, COSMETIC AND ALLIED INDUSTRIES BY
Benton & Bowlee
Regraded Unclassified
264
The Curious Belief
aptain
ahill
Time weather-beaten granite headstone
Has front where UMP boys bittle for
up in Prospect Hill says la will born
their existence and ours?
bank in 1538. But he hanked far older
Today, how insury of 111 realize the
than forty when Il first met film
a
vital Importance of really surrificing to
lean, suber-scarred man
two years
support that front?
after the Custer Massacre.
How many of us are doing something
He WAS my mother's oblest brother
about il by purchasing our full share of
and I hat a child. Hut the memory of his
war bonds-every merk, every pay day
curimis Indief lives with me still.
-und ALL use can provibly afford?
He FIME away in 37, with may a-pote
or il word from him for twenty-one
years. Them he walked in, IM leave, a
FACTS ABOUT WAR BONDS
Civil War veteran and of cay>
- War Bonds cost $18.75, for which
alry, home from the Indian wars.
your receive 425 in 10 years-in
He spoke surprisingly suldem and
$4 for may 53.
: Was Hunds an the world's w/nt
than softly. And, curiously, be always
by the
sal in that corner of a room where his
United States Comment.
restless glance could emmmand all doors
3 War floods can les made at in
and windows.
I name-se in 2, as
"Why? Because." less answered my
4. War Hands remot go down in
milher's query, "sixteen years of wat-
value: If they are lost, the Code
lare have taught me that, to survive.
enternent will issue - CHIS
/ must NECOT turn with back on the front."
5. War Bonds can la redeemed, Bi-
Today, how many of us share the be-
of necesity, after no days
lief of Captain Cabill the conviction
War Bonds begin in Inskl up -
that, if we Americans are to survive, WP
terest after 12 months.
inst never furn our backs on the from
Don't Turn Your Back on the Front
BUY BONDS
FUBLISHED IN COOPERATION WITH THE DRUG, COSMETIC, AND ALLIED INDUSTRIES BY
B.IC
Senton & Bowles
Regraded Unclassified
kd R-2A
265
Will you help him come back-Alive?
FACTS
of thousands of them. Their lives depend upon
ABOUT WAR BONDS
M
AYBE you never thought of War Bonds-as
life-savers-and yet that's exactly what
bullets for the rifles they fire
shells for the
1.
War Bonds cost $18.75 for which you
cannon to blast Jap landing barges
bombs that
receive $25 in 10 years or $4 for
they are.
drop from soaring planes
tanks that roar to the
every $3.
Look at a War Bond
attack
great ships
submarines.
2. War Bonde are the world's selest in-
A piece of paper. Weighs a tenth of an ounce,
Supplied in abundance-and on time-they spell
vestment-guaranted by the United
States Government.
maybe. Printed in black and green ink.
the difference between life and death-between
Read it. You'll see the interest you get from it-
Victory and defeat.
3. War Bands con be made eut in I
$4 from every $3 you invest, as it pays you $25 for
some or 2, os co-owners.
That is why it is up to us-here-now-every
$18.75 in ten years.
day-to buy War Bonds not only as an investment
4.
Wer Bonds cannot go down in value.
H they are lost, the Government will
Signed by the Secretary of the Treasury of the
in our own future security-but as an investment in
issue new ONEL
United States, and backed by the power and good
human lives today.
faith of the world's mightiest nation.
5.
War Bonds can be cashed in, in case
Think of that when you think of War Bonds.
of necessity, after 60 days.
But there are some things it won't tell you.
Things that come from your heart. More important
Buy them regularly-every payday-with 10% of
6.
Wer Bonds begin to accrue interest
your income-as a minimum goal.
after one year.
than interest. More important than security.
Lives. Of clean, smiling American boys. Hundreds
And you, too, will help him come back-ALIVE!
Keep on Buying War Bonds
PUBLISHED IN COOPERATION WITH THE DRUG, COSMETIC AND ALLIED INDUSTRIES BY
3enton & Bowlee
Regraded Unclassified
Ad R-SH
I was putting away
Bob's civilian clothes
0
COURSE there was a catch in my
planes and ships they must have to
throat as I folded Bob's suits, and
conquer
and live.
his sweater, and put shoe trees into
And suddenly my whole conception
his black shoes, and wondered when
of War Bonds changed. I saw them
he'd be wearing them again.
not so much as a wonderful investment
And the thought came
suppos-
in money-not so much as personal
ing he never wears them again
security for our own financial future
It was then, I think, that my heart
I saw War Bonds as an investment
told me the same story that millions
in the lives of boys like my Bob. 1
of mothers already know. And the
saw them as Faith in my country
ordinary things of life seemed so small,
Belief in everything decent and up.
so petty, so inconsequential.
right-yes, almost my Faith in the
justice of God, Himself.
And I got thinking of the boys
And then I decided. Nothing e/se
boys like my Bob-fighting, suffering,
counts. That's why my husband and I
dying for their Country.
are going over financial matters again.
I began examining my own con-
We're going to see how much more
science. No use trying to fool myself
than 10% of our earnings can go into
that I "gave" my son. It's not true.
War Bonds every payday.
He went, like millions of others, to do
And-yes, I patted Bob's old shoe,
his duty toward the country we all
and even kissed the collar of his coat
love: our America. And no heroics
where it used to touch his neck
about it, either.
"God willing, dear boy,' I said,
And 1 wondered what we, here at
"you'll come back to us. And we'll be
home, could do.
able to look you in the eye, confident
The least we can do, I thought, was
that our duty will have been done by
to give these boys the guns, tanks,
you. and every one of you!"
FACTS ABOUT WAR BONDS
1. War Bonds cost $18.75 for which you
4. War Bonds connet go down is value.
receive $25 in 10 years-or $4 for
il they are lost, the Government will
issue new DESL
every $3.
2. Wer Bonds are the world's selest In-
5. War Bonds con be cashed in, in case
vesiment guaranteed by the United
of necessity, ofter 60 days.
States Government.
3. War Bonds con be made out in
6. Wer Bands begin la occive interest
other - year.
name - 2. as co-panen-
Keep on Buying War Bonds
PUBLISHED IN COOPERATION WITH THE DRUG, COSMETIC AND ALLIED INDUSTRIES BY
Regraded Unclassified
For the Man in your Heart
who isn't in your Arms tonight !
Where is he tonight? It was Ireland, last
front of your soldier-and a protecting
time you heard. But that was three
cloud of pursuit planes over his head.
Here's what Wor Bonds do for you:
months ago-where is he tonight?
They'l help to build the Liberty ships
What can you do to bring him back?
that will carry him boots and bacon and
1 They provide the safest place in all, the
cigarettes-and bring his precious letters
world for your savings.
What can you do to speed his passage
2 They are a written promise from the United
home? How can you help that far-off
home to you.
States of America to pay you back every penny
soldier you love-and miss-so much?
They' help to check Inflation-to
you put in.
You can help him by putting every
keep prices lower on the things you buy
3 They pay you back $4 for every $3 you put
in, at the end of ten years
accumulate in-
dime, every quarter, every dollar you can
now-so you can save more and more
terest at the rate of 2.9 per cent.
save into the War Bonds of the United
towards the things you and he will want
4 The longer you hold them, the more they're
States of America!
to buy-when he comes home.
worth. But, remember, if you need the money,
Give up buying foolish things, frivolous
They'll help to bring Peace nearer-
you may turn them in and get your cash back
at any time after 60 days.
things, useless things-until the war is
and make Victory more complete.
5 They are new worth less than the money you
won! Yes, give up all the unnecessary
Yes, and the wisest, soundest, hardest-
intested in them. Thry can't go down in malar.
things-and put the money you save into
headed bankers in America have never
That's # promise from the financially strongest
War Bonds!
institution is the world: the United States of
in all their lives been able to discover a
America.
Do you realize what your bonds will do?
safer, more secure investment than U.S.
They'll help to put heavy tanks in
War Bonds are for you!
SAVE YOUR MONEY THE SAFEST WAY - BUY U.S. WAR BONDS REGULARLY
Published in experation with the Drug, Cometic and Allied Industries by:
Regraded Unclassified
PROVICTORY
BUY
SAITED
-
progra
WAR
NAVY DEPARTMENT
home
-
WASHINGTON
INDUSTRIAL INCENTIVE DIVISION
2118 Massachusetts Avenue, N.W.
April 12, 1943
The Honorable, The Secretary of the Treasury
Treasury Department
Washington, D. c.
My dear Mr. Secretary:
At the request of the Under Secretary of Navy, we are writing
to acquaint you with the facilities and activities of this Division.
The objective of the Division is to accelerate war material
production for the Navy. The staff of the Division, both for Wash-
ington and the field, consists of thirty-five officers. It is the
duty of our officers to work particularly with those plants that have
problems affecting production, which can be helped by incentive
activites by showing the unity between the production line and the
war fronts. These include excessive absenteeism; decline in rate
of production; excessive waste; breakage and work spoilage; and
similar matters which relate to the output of war material by the
particular shipyard or plant.
Enclosed is & copy of a recently issued bulletin describing
the various services which we offer to plants producing for the
Navy. Also enclosed are copies of our last two monthly reports
(except for schedules) to the Under Secretary outlining the acti-
vities performed by this Division during the months of February and
March of this year.
It is our pleasure to cooperate with the Treasury Department
in connection with the War Savings program in many different ways.
The most recent example of this occurred about a week ago when we
secured the services of Lieutenant (Jg) Ann Bernatitus, USN (who
served as a Navy nurse on Bataan) and prepared the speech which she
delivered at the Brooklyn Museum during the program dedicated to the
heroes of Bataan. You will remember that Mrs. Morgenthau was one
of the featured speakers on that occasion. This Division had
previously arranged for Lt. Bernatitus to make a recording and
appear in & motion picture short for your Department.
Regraded Unclassified
89
The Honorable, The Secretary of the Treasury
April 12, 1943
As you know, Mr. and Mrs. T. F. Sullivan and their daughter,
Genevieve, are now touring shipyards and plants producing for the
Navy. Their tour is under the auspices of this Division. In the
rallies at which they appear, it is the practice for Mrs. Sullivan
to speak of the need for increased production for the Navy, while
Mr. Sullivan speaks frequently of the patriotic duty to buy War Bonds
and mentions particularly his own record of War Bond purchases through
the Payroll Savings Plan. In this way the Sullivans are bringing an
effective War Bond message to thousands of workers in shipyards and
plants located in many parts of the country. The Sullivans have also
made recordings for your Department.
As you are undoubtedly aware, this Division cooperated to a
considerable extent on the campaign to secure War Bond purchases in
an amount sufficient to equal the cost of the new cruiser, the USS
ATLANTA. Our Atlanta officer secured returned combat personnel and
arranged for appearances of these men at War Bond rallies in many
parts of Georgia during the campaign.
It was also the pleasure of this Division to cooperate with
the Field Section and the Payroll Savings Section of the War Savings
Staff in the special industry-wide War Bond drives which were con-
ducted in the rubber and steel industries.
There are many other instances, too numerous to detail here,
where the field officers of this Division have worked with the state
offices of the War Savings Staff in securing heroes and enlisted
personnel with combat experience for plant and community War Bond
rallies.
We fully appreciate the importance of the War Savings program
and look forward to continuing to cooperate with your Department in
every way that our facilities will permit.
6
C. H. WOODWARD
Rear Admiral, USN (Ret.)
Chief of the Incentive Division
Regraded Unclassified
C
270
D
P
I
INCENTIVE DIVISION
2118 Massachusetts Avenue, Northwest
March 30, 1943
From:
The Chief of the Incentive Division
To:
The Under Secretary of Navy
Subject:
Report of progress for the month of March
1.
Forty-two "E" presentation awards were conducted by the Navy,
as shown on schedule A. In addition, the Navy participated in 116 Army-spon-
scred ceremonies and arranged for the distribution of 49 one-star, 23 two-star
and 10 three-star renewal pennants to the companies listed in schedule B.
2.
In-plant incentive activities such as rallies, visits by combat
personnel, etc. were conducted in 78 plants as listed in schedule C.
3.
Mr. and Mrs. T. F. Sullivan (Parents of the five boys lost on
the USS JUNEAU) visited 73 plants as listed in 5 chedule D. Approximately
250,000 workers saw and heard them. Most commendatory reports on the
Sullivans' appearances, with Lt. Taylor, have been received.
4.
The 20-mm gun exhibit was displayed at 34 plants making com-
ponent parts for this gun. These plants are listed in schedule E. Approx-
imately 28,000 workers saw the exhibit and heard of the use of the gun in
combat.
5.
A tour of industrial plants was scheduled for Seaman 2c Basil
D. Issi, USN (rescued with 2 shipmates after 83 days on a life raft in the
South Atlantic.) The proposed tour will take Inzi to major industrial cities.
He will be sent particularly to plants with important orders for component
parts for DE vessels.
of radio 6. programs, this Division arranged to have incentive messages or material
Through cooperation with radio networks and sponsors and directors
included on 10 national radio programs as listed in schedule F.
were sent 7. to 97 companies manufacturing component parts for these vessels.
Large blow-up photographs showing DE vessels ready for outfitting,
In conjunction with these photographs special telegrams over Admiral Cochrane's
signature, were sent to the companies explaining the importance of the DE
program as part of the anti-submarine campaign, and the critical need for
components in order to complete the building of these ships as soon as possible.
8.
A special DE article, for employee publications, was distributed
to 407 contractors making equipment for these vessels.
and Chief 9. BuShips, were forwarded to Incentive Officers with instructions to
Lists of important DE parts manufacturers, furnished by UnSecNav
immediately B chedule incentive activities in those plants.
Regraded Unclassified
71
10.
Thirty-two labor press releases were distributed to all labor
press services. In addition, 247 official U. S. Navy photographs were distri-
buted to the labor press services and to the most important labor newspapers.
The War Production Board informed this Division that a WPB survey of seventy
leading labor papers showed that during the last sixty days, releases prepared
by this Division received a larger pick-up from the labor press than releases
of any other Government agency.
11.
Twelve special releases were distributed to a list of 115 leading
trade publications. In addition, 25 official U. S. Navy photographs were
distributed to trade publications.
12.
185 photographs, illustrating various types of naval equipment
in action, were distributed to 55 groups of manufacturers.
13.
Performance communiques were sent to 67 companies, reporting to
the employees the excellence, under combat conditions, of material they had
made and urging increased production.
14.
Articles and editorial features were prepared for the monthly
cooperative release of the Army and Navy to 2500 employee publications. In
addition, a number of special incentive stories were distributed to the above
list of employee publications during the month.
15.
Two new posters designed to combat absenteeism were distributed
to 296 shipyards building naval vessels. In addition, & special selection of
posters was mailed to 6,000 contractors in the New York district at the request
of Admiral Brisner.
organization 16. will furnish this Division, wthout cost, 80 prints of their latest
Arrangements were completed with the March of Time whereby that
film "One Day of War" (carrying an excellent incentive message) for distribution
to plants producing for the Navy. In addition, the March of Time is furnishin;
this Division with 40 prints of their new film "Navy and the Nation" for similar
showing in industrial plants.
prepared 17. a 15 minute transcription of a dramatized incentive program featuring
In cooperation with the Office of War Information this Division
Corporal Barney Ross, USMCR, for distribution to 400 radio stations.
C. H. WDODWARD
Regraded Unclassified
C
272
o
P
Y
INCENTIVE DIVISION
2118 Massachusetts Avenue, N. W.
March 3, 1943
From:
The Chief of the Incentive Division
To:
The Under Secretary of the Navy
Subject:
Report of Progress for the Month of February
The following is a report of progress for the month of February.
1.
44 "E" presentation awards were conducted by the Navy as shown
on Schedule A attached and, in addition, the Navy participated in 64 Army
ceremonies held during this period. There were also 51 one star, 59 two star,
and 12 three star Navy renewals.
2.
Stimulation efforts were conducted in cities and plants as
listed on schedule B attached.
3.
The campaign to combat "absenteeism" continues. This problem
has now been brought out publicly and many agencies are working thereon.
4.
Twenty press releases and three cartoons were released to the
labor press and in addition Ass't. Sec'y. Bard addressed the meeting of the
American Labor Press Association.
will include 5. industrial incentive messages and combat moving pictures
Arrangements have been made tareby many feature radio programs
containing such messages are now being prepared to be shown only in plants.
One of the stories developed by this Division to stimulate production was
used by Mr. Ham Fisher in his cartoon "Joe Palooka."
USS JUNEAU) 6. are now in Oregon, having completed a very successful stimulation
Mr. and Mrs. T. F. Sullivan (parents of the 5 boys lost on the
trip through several Eastern States.
7.
The tour of the 20-mm gun exhibit continues very successfully.
8.
Activities on the following special programs continue:
(a) Bureau of Ships-Absenteeism in shipyards.
(b) Bureau of Ships-General appeals to all contractors.
(c) Bureau of Ordnance-General appeals to all contractors.
(e) Bureau of Aeronautics-Stimulation efforts at Naval Air Stations.
(d) Bureau of Ordnance--Conversion to wartime needs.
(f) OPM & S&A-Conservation and salvage.
(g) Army and Navy Electronics Production Agency-General production program.
Regraded Unclassified
273
and in addition, & special program is being planned for the DE class of ship.
9.
This Division is cooperating with the Production Information
Committee which represants all the government agencies working on the problem
of labor morale.
влого C. H. WOODWARD
Regraded Unclassified
274
INVENTIVE DIVISION
liavy Department
2118 assachusetts Ave., N.W.
Washington, D. C.
The Incentive Division of the Havy Department is concerned with the prob-
len of stimulating the production of war materials for the llavy. A compre-
hensive program designed to bring home to employees in industry the fact that
they represent an integral part of the war effort is being sponsored by the
Division. Distribution of inspirational material, visits to the production
front by Naval personnel who have returned from the fighting areas and, reports
of how war materials are performing in combat action are included in this
program.
Requests should be specific and describe, as clearly as possible, the
type of service desired. Information as to the size of employee groups, where
and when the material or services will be used and a description of local
problems will enable the Incentive Division to fulfil requests more intelli-
gently.
The specialized services of the Incentive Division are available to all
plants producing for the llavy. Requests should be addressed to:
The Chief of the Incentive Division,
Navy Department,
2118 Massachusetts Avenue, N. VI.,
Washington, D. C.
PERFORMANCE PHOTOGRAPHS
The Incentive Division has available for distribution a wide variety of
photographs showing Navy Products in action. Many of the photographs can be
used effectively to show employees in industry that the products they make are
on active duty with the Navy.
Regraded Unclassified
- 2 -
275
Certain equipment cannot be illastrated for reasons of security, but it
is believed that photographs showing Navy products in action will serve a
beneficial purpose when used in posters, plant displays, employee publications,
and on bulletin boards.
Other photographs of a more genoral character showing the Navy and
Marine Corps in action in the combat areas are available and will be furnished
upon request.
Requests should contain a description of your products and, if possible,
details ns to their use by the Navy.
PRODUCTION COMMUNIQUES
The Incentive Division believes that outstanding industrial accomplish-
ments aro worthy of recognition and that messages of commendation addressed
to employee groups making equipment for the Navy are a powerful incontive to
more production. Special messages of citation, in the form of telegrams,
messages, or letters from ranking officers and officials of the Navy Department
will be sent when the facts merit such nction.
From time to time, the Navy Department will report to employees on the
performance of certain oquipment under combat conditions. Messages of this
kind may be requested but action thereon will depend necessarily upon informa-
tion available for publication.
POSTERS
Colorful incontive posters suitable for plant display aro available upon
request. These posters are designed to appeal to men and women producing for
the Navy. They combine dramatic illustrations with powerful appoals directed
at absenteeism, lack of senso of participation in the war, inaccuracy and
other factors delaying production. Requests should be specific as to the
number of postors desired.
Regraded Unclassified
276
- 3 -
MATERIAL FOR EMPLOYEE PUBLICATIONS
There are no regular direct releases of Navy material to editors of
employee publications. The Incontive Division contributes to several labor
pross services and to newssheets such as the Army-Navy Employee Publication
Release and will supply special Navy material to editors upon request.
SPEAKERS
Experienced Incontive Division staff speakers are available for a limited
number of ongagements at community, labor and plant rallios organized for the
purpose of stimulating war production. These speakers not only report upon
Navy activities in the combat arens but make every offort to bring home to
employee groups the fact that their work is an important part of the ontire
war effort.
Whenever possible, talks are supplemented by eye witness accounts of the
war by Naval personnel recently returned from sea duty.
EXHIBITS
Arrangements are being completed to display finishod Navy products in
settings approximating their use in combat. Colorful exhibits croated by the
Incentivo Division and accompanied by trained Naval personnel will visit
various plants in an effort to show the employees how their jobs contribute to
A particular finished product end the war offort in general.
PLANT VISITS
The Incontive Division will, upon request, conduct either formal or in-
formal plant visits to industrial plants. The personnel for such visits will
be chosen from mon of the Navy, Const Guard or Marine Corps. Every effort will
be made to provido mon who have had experience in the combat aroas with the
particular product manufactured by the plant visited.
Regraded Unclassified
277
- 4 -
OTION PICTURES
Authentic battle scenes filmed by the Navy are available in documentary
motion pictures, such as "The Battle of Midway." Plans are under way for the
release of other stirring sound films showing the Navy in action. Employees
will be ablo to see and hear the actual performance of the war materials they
build.
RECORDINGS
Recordings suitable for use in industrial plants will shortly be avail-
able. Every effort is being made to provide distinctive material that will
have n special interost to the producers of material which is used by the
Navy.
Regraded Unclassified
278
WAR DEPARTMENT
OFFICE OF THE UNDER SECRETARY
4/13/43
WASHINGTON, D.C.
April 12, 1943
Honorable Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D. C.
Dear Henry:
Thank you for the copy of the report prepared by
Mr. Bartelt of your office on the military dependency payment
procedure.
This report emphasized that the most trouble came
from errors in the filing of applications for benefits. I have
arranged to expedite the issuance of adequate instructions and
regulations on this point, and to have the War Department under-
take a campaign to educate dependents through the press.
We are giving further consideration to the suggestion
that some payments be effective on the fifteenth of the month.
A tie-in with the Veterans Administration on insurance
allotments is being studied.
On the subject of erroneous payments a number of adminis-
trative steps have been taken which should decrease cases of this
kind.
I hope that when the points outlined above have been
completed, the majority of our troubles will be corrected. If you
have any further suggestions, we should like to receive them.
Sincerely yours,
RLPPP#
ROBERT P. PATTERSON
Under Secretary of War
Regraded Unclassified
279
WAR DEPARTMENT
OFFICE OF THE UNDER SECRETARY
WASHINGTON, D.C.
April 12, 1943.
Honorable Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D. C.
Dear Henry:
Thank you for sending me Mr. Bartelt's report
on the Army War Bond Office in Chicago. I have asked
General Carter to send direct to Mr. Bartelt the letters
of complaint which he requested.
RLJPP# Sincerely yours,
Robert P. Patterson
Under Secretary of War.
%05 m Barteet 4/12.
Regraded Unclassified
280
April 12,
1943
Norman Thompson
Secretary Morgenthau
Esther S.
I would like the personnel record of Mrs. Moreland,
the telephone operator. She was at my position on the
board Sunday, and her intelligence seems way above average.
unite R
memo
of 4/12.
T4/13
2
R 1
Regraded Unclassified
281
OF
TREASURY DEPARTMENT
WASHINGTON
THE
CRETARY
April 12, 1943
Dear Vr. President:
Subject to your approval, I propose to offer for cash subscription,
under authority of the Second Liberty Bond Act, as amended, an issue of
2-1/2 percent Treasury Bonds of 1964-69 and an issue of 2 percent Treasury
Bonds of 1950-52 in amounts which will not be specifically limited. At the
same time, I propose to offer for cash subscription 7/8 percent Treasury
Certificates of Indebtedness maturing April 1, 1944, also in an amount which
will not be specifically limited.
I propose that all three issues be dated April 15, 1943, and that the
subscription books be opened on April 12, and remain open for several weeks.
It is my intention during the period to sell $2,000,000,000, or thereabouts,
of the 2 percent bonds and the same amount of the certificates of indebted-
ness to commercial banks which accept demand deposits. All subscriptions
from others than commercial banks for any of the new issues will be allotted
in full regardless of amount.
The 2-1/2 percent bonds may not be held by commercial banks during the
next ten years, and in general their terms and conditions will be similar to
the 2-1/2 percent Treasury Bonds of 1962-67 and 1963-68 issued last year.
These issues, together with the United States Savings Bonds, Treasury
Tax Savings Notes and additional amounts of Treasury bills sold in April,
will constitute the Treasury's Second War Loan Drive, with an objective of
$13,000,000,000. In addition to these securities, and outside of the Second
Mar Loan campaign, I propose to offer on April 20 a one-year 7/8 percent
Treasury Certificate of Indebtedness, to be dated May 1, only in exchange
for the Treasury Certificates of Indebtedness and Commodity Credit Corpora-
tion notes which mature on that day.
The authorizing act provides that bonds may be issued only with the
approval of the President. Accordingly, I trust that the proposed issues
will meet with your approval.
Faithfully yours,
Secretary of the Treasury.
FRDE The President,
UY
The White House.
TED
TE#
IND#
APPROVED:
*DE
-
Finally
282
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
CONFIDENTIAL
DATE April 12, 1943
TO
FROM
Mr. Haas
Secretary 904 Morgenthau
Subject: The Business Situation,
Week ending April 10, 1943.
Summary
Inflation control: Prospects for effective control of the
rising cost of living are improved as a result of last week's
Executive Order stren thening the position of the Economic
Stabilization Director, and of the WLB, OPA and other agencies
charged with coping with demands for higher wages and prices.
The President's expressed determination to hold the line on
nrices and wages already appears to have had a strong
psychological effect.
Commodity prices: Basic commodity prices moved moderately
lower last week, partly due to the bearish effects of the
President's anti-inflation order. The BLS index of 28 basic
commodities declined 0.3 percent during the week.
Stock prices: The long rise in stock prices was brought to an
abrupt halt last week by a sharp decline which followed
the anti-inflation order. Industrial stock prices on Friday
suffered the widest decline since the Dunkerque break of
May 1940, and at Saturday's close industrial and railroad
stock prices were about 3 percent lower than a week earlier.
Despite last week's decline, the possibility exists of e.
later renewed advance in stock prices which might become an
inflationary influence with adverse consequences, thus
necessitating the consideration of possible regulatory
measures.
Farm real estate: Increased agricultural incomes and pressure
of surplus investment funds have been responsible for a marked
upturn recently in prices of farm lands. The value of farm
real estate has increased 18 percent from the pre-war level
of March 1, 1939.
Sanpower shortages: Production goals of shipbuilders and other
war industries are being menaced by & shortage of manpower.
This is partly due to the recent increasing migration of
workers from war industries to farms, as a result of changes
in regulations which grant farm workers virtual assurance of
deferment from military service.
Regraded Unclassified
283
- 2 -
Anti-inflation program bolstered
Inflationary sentiment and pressure for higher wage
rates and farm prices received a sharp set-back last week as
n. result of the Executive Order designed to head off further
price and wage increases. In addition to considerably
strengthening the position of the Economic Stabilization
Director, as well 8.6 that of the various regulatory agencies
such as OPA, WLB, etc., the determination expressed by the
President to"hold the line" on prices and wages already has
had a notable psychological effect. Evidence of this effect
was seen in the declines in the stock and commodity markets
which followed the order.
Since the War Labor Board is now specifically directed
to authorize no further wage or salary increases beyond the
limits envisaged in the "Little Steel" formula, except to
correct sub-standard wages, the pressure on this agency for
wage increases should relax. This development in turn should
facilitate the avowed intention of the OPA to widen the list
of cost-of-living commodities under dollar and cents ceilings.
These are expected to include many items heretofore exempt,
such as wheat, cotton, fresh fish, and fresh fruits. In
addition, rollbacks in some commodity prices are expected to
result from the order. As further aids in the reinvigorated
program to hold down living costs, it is intended to stop the
shifting of Jobs for higher pay, and regulatory bodies are
called upon to disapprove increases in the rates of common
carriers and other public utilities or even to effect rate
reductions.
Coal miners' demands to test wage order
In view of the fact that last week's Executive Order
requires wage increases to be held within the limits of the
"Little Steel" formula, unless necessary to correct sub-
standard wages, an early test of the order appears practically
certain to arise in the pending demands of the United Mine
Workers for a 2-dollar-a-day wage increase. Negotiations
between the mine owners and the Union have been deadlocked,
and following the issuance of the President's order last week
John L. Lewis stated that it left "the mine workers still
hungry and resentful in having their demands for bread made a
political pawn". He also claimed that coal miners wages are
still sub-standard.
Whatever the outcome of the forthcoming tests of the wage
ceilings, the contention continues to be made that the real crux
of the problem of inflation control lies in the excess purchasing
284
- 3 -
power in the hands of consumers under current war-time conditions.
This viewpoint was reiterated last week by Chester Davis in his
first press interview as Food Administrator. He stated that
835 billions in surplus purchasing power would have to be
siphoned off by the Government to make inflation control
effective. To accomplish this purpose he advocated higher
Federal taxes and sharply increased sales of war bonds to the
consuming public. He also indicated his belief that higher
taxes would have to be collected at the time income is earned.
Use of subsidies encouraged
If prices are to be maintained or reduced in order to
stabilize the cost of living, which is the apparent intent of
the new Executive Order, an impetus will be given to the use
of subsidies. In his Executive Order the President implied e
desire that subsidies be used where necessary to increase and
maintain production. This tendency was further manifest by
the Price Administrator's testimony on the Pace Bill before the
Senate Agricultural Committee, in which he advocated incentive
payments to farmers as preferable to increasing prices of
agricultural products. The Administrator mentioned that OPA
had the authority to use subsidies, but that funds were lacking.
Strong opposition to subsidies, however, was expressed by the
Committee.
Because Congress failed to appropriate funds for the
$100 million incentive payment program, the Food Administrator
announced last week that the Government would guarantee farmers
higher prices for five vital war crops -- dry beans, peas, peanuts
soybeans, and flaxseed. The new support prices for dry beans,
peas, and soybeans are higher than OPA ceiling prices, hence
ceilings must be raised or the Government must, in effect,
subsidize these products by paying producers the higher prices
and then selling to processors within present ceilings. In view
of the President's Executive Order, the latter course seems more
likely.
Commodity prices decline
The President's order on prices and wages last week caused
EL liquidating movement in major commodities, and both future and
spot prices were off moderately. (See Chart 1.) Traders took
to the sidelines to await details of ceilings on grains and cotton,
which they believed would result from the order. Earlier in the
week the Farm Bloc's failure to muster sufficient votes to over-
ride the President's veto of the Bankhead-Steagall bill had &
depressing influence on commodity prices.
Regraded Unclassified
285
- 4
A decrease of 0.3 percent we.8 registered in the BLS index
of 28 basic commodities last week. (See Chart 2.) Wheat prices,
with & drop of 2.6 percent, led the decline in which all of the
uncontrolled commodities participated, and the index of seven
uncontrolled commodities fell 1.0 percent. Hogs, cotton, and
flaxseed were off noticeably. The only change in the controlled
commodities was a small decline in wool top prices.
In the week ending April 3, the BLS all-commodity index
rose slightly to 103.4, which is 5.6 percent higher than the
corresponding week a year ago and 37.9 percent above the pre-
war level of August 1939. Increases in prices of farm products
and foods, particularly fruits and vegetables and cattle, were
largely responsible for the rise in the index.
Stock prices decline sharply
The long expected reaction in stock prices was finally
touched off last week by the President's anti-inflation order.
In the early part of the week stocks were strong and active, and
new highs for the move were reached in both prices and volume
of trading. However, by mid-week prices were showing a tendency
to ease and & sharp break occurred on Friday as the over-night
announcement of the President's order caught the market by
surprise and in a vulnerable position. On the second highest
trading volume of the year, prices, as measured by the Dow-Jones
industrial average, suffered the widest decline since the
Dunkerque break of May 21, 1940, and the gains of more than
2 weeks were erased in one session. Prices steadied on Saturday
but at the close of the week industrial and railroad stocks were
about 3 percent lower than of week earlier, while utility stocks
showed a somewhat greater decline. (See Chart 3.)
Although a. reaction in prices was over-due in view of the
protracted rise of recent months, the selling which developed on
the prospects of stronger inflation control appears to confirm
the belief that recent buying of stocks has been in part to
hedge against inflation. In contrast with the wide moves which
have occurred in U. S. stock prices this year, stock prices in
London have been moving in a narrow range since the middle of
January. On the other hand, despite last week's decline,
industrial stock prices at New York were still about 8 percent
higher than in mid-January. (See Chart 4.)
Regraded Unclassified
286
- 5 -
Inflationary implications of the rise in stock prices
The recent increasing volume of trading in the stock
market, associated with a rise in prices which (previous to
last week's decline) had carried average quotations back to the
1939 pre-war levels, raises the question whether & speculative
situation hermful to the war effort may not be developing.
It has been suspected for some time that the large and
growing volume of idle cash in the hands of the public would
eventually, in some degree, find an outlet in speculative
ventures. The greatest beneficiaries of the war program, how-
ever, have not been the stock-buying class, but largely the
wage earning and farming groups, hence 2. diversion of war
earnings into the stock market has been slow to develop.
Nevertheless, stock prices have been rising gradually but
persistently since the summer of last year, and brokers report
that a significant volume of buying has been coming from
typical war centers.
The unusual amount of buying of very low-priced stocks
in the last several months, and the fact that practically all
of the buying so far has been for cash, are perhaps further
indications that surplus funds of people unfamiliar with stock-
trading have been coming into the market. Professional traders,
on the other hand, have apparently maintained & bearish attitude
toward the market, 8.8 indicated by financial news comments and
by the outstanding short position, which at the end of February
was the largest since May 1939.
While the strong stand against inflation taken by the
President last week may halt the rise in stock prices for a
time, the possibility exists of & later renewed advance to new
high levels which might become an inflationary influence. A
rapid rise in stock prices would have several adverse consequences:
Primarily, it would interfere with the bond sales program by
attracting surplus funds from various classes of investors. It
would also advertise the fact that inflation is getting under
way, and thus lead to speculative buying of commodities, to
unrest among labor groups, and to demands for higher farm prices.
Finally, it might accentuate the difficulties of read justment
after the war.
Among the methods being considered by the SEC to halt a
stock market boom, according to a press report early in February,
the following may be mentioned 2.8 of some interest:
Regraded Unclassified
287
- 6 -
(1) The prohibition of margin trading, to encompase security
loans by banks as well as by security brokers.
(2) A requirement that buyers not only pay for purchases
in cash, but also buy a proportionate amount of blocked Govern-
ment bonds, which would tie up buying power.
(3) A required minimum holding period on new purchases.
(4) A special tax on capital gains from purchases made
after a given date.
(5) Inducements to encourage selling of stocks, as by
imposing a special tax on realized appreciation on existing
holdings after a given date, by higher corporate taxes, or by
limitations on corporate dividend payments.
Stock market controls in Germany
England has apparently not as yet become seriously concerned
over stock market speculation, although there was some fear in
the latter half of 1942 that the market might get out of hand.
(Refer to Chart 4.) In Germany, however, drastic measures
have been taken to curb inflation in stock prices. Data from
the Statist (London) indicate that average quotations for 25
German industrial stocks had risen 61 percent in the period
between August 1939 and June 1941. Industry was conspicuous
among buyers, partly for investment of idle funds, but banking
circles and individuals also showed increasing interest in the
market.
lieasures to check rising stock prices in Germany took
various forms. Early in 1941 EL previously-abolished speculation
tax was reintroduced, amounting to a capital gains tax on
securities held less than one year, with an exemption limit of
1,000 marks. This had some effect in stabilizing prices for a
time. In the same year, restrictions were imposed on dividends
by a progressively increasing tax on dividends above specified
rates.
These measures failed to halt the rise, however, since
investors had become less concerned about income from their
investment than about safeguarding their capital against
inflation. The next action W&LS to permit companies to increase
their outstanding stock by issuing bonus shares up to the amount
of disclosed reserves. While this increased the supply of shares
and tended to reduce the market quotations, it naturally had
little effect on the demand for stocks. Later decrees (1) required
all stock transactions to be made through the stock exchanges; and
(2) prohibited the buying of stocks on credit, and prohibited banks
from lending money for such purpose.
Regraded Unclassified
288
- 7 -
Despite these and other regulations, stock prices continued
to rise, and black markets sprang up with quotations higher than
those officially listed. In the spring of 1942 a quotation-
stop was introduced, aimed at preventing share prices from rising
too rapidly, but the net effect was to choke off trading on the
exchanges to 2. point where official quotations became meaningless
and black markets flourished. In the second quarter of 1942 a
new decree required all shares in certain categories to be first
offered to the Reichsbank, which would pay for them in blocked
Treasury bonds at the lower price levels of December 31, 1941.
More recently the hours of trading on the stock exchanges
have been restricted to one hour a day, three days a week, and
trading in shares with variable quotations has been discontinued.
(Statist, February 27, 1943).
Rise in ferm real estate values
Increased agricultural incomes, together with the pressure
of surplus investment funds, have recently brought FL marked
upturn in prices of farm lands, according to confidential March 1
data of the Department of Agriculture. The Department's index of
estimated value per acre of farm real estate has risen 6 percent
in the 4 months from November 1 to March 1. This increase rep-
resents more than one-third of the total increase in the index
from the pre-war level of March 1, 1939.
Although in the present war the rise in the value of farm
real estate has been appreciably less than during the first World
War, it has followed about the same pattern. During the past year,
in fact, farm real estate values have increased at almost the
same rate as in the corresponding period of the first World War.
The following table shows a comparison of the changes in farm
real estate values in the two war periods, based on data as of
March 1 each year:
1916
1918
World War I
Year
1914
1915
1917
(1914 = 100)
Index
100
100
105
114
125
Index
100
100
101
108
118
Present War
(1939 = 100)
Year
1939
1940
1941
1942
1943
Investors have comprised a larger proportion of all buyers
of farm property during the past year, thus suggesting the
possibility that some purchases are being made as inflation hedges.
Nevertheless, farmers still constitute about 60 percent of all
buyers. Increased income taxes and fear of labor and machinery
shortages are reported as tending to modify the demand for land.
289
- DA -
Rise in Canadian living costs
The Canadian index of living costs (1935-39=100) on March 1
stood at 117.2, an increase of 0.3 percent over February. (See
Chart 5.) This gain was caused by higher food prices, while the
other components of the index remained unchanged. The food index
rose about 1 percent, the principal factor being a seasonally
higher price of beef, permitted under Canadian regulations.
Higher price for potatoes and oranges were contributing factors.
It should be noted that the previous decline of 5.5 points
in the food index from December 1 to January 1 was due principally
to Government subsidies on milk, coffee, tea, and oranges. How-
ever, the Canadian Government recently issued an order changing
the pricing method for oranges. Under previous regulations the
price was computed on the basis of cost plus mark-up, with a
provision that the final price be no higher than 2. certain
base price, the difference being made up by a Government
subsidy and the cancellation of the import duty and tax. The
present regulations allow a specified limited mark-up but do
not hold prices to a base-period ceiling. This partly cancels
the effect of the Government subsidy on oranges.
The latest official United States figures (shown on
Chart 5) are for February. However, estimates published last
week by the National Industrial Conference Board show a 2.5 per-
cent rise in food prices in March, which was largely responsible
for a gain of 1.0 percent in the combined index of living costs.
The Conference Board figures show an increase of 7.0 percent in
living costs since a year ago, and an increase of 15. percent
in food prices.
Black markets hinder war effort
Black market operations are seriously hindering the
war effort and constitute the greatest threat to military and
civilian programs, the OWI declared in & special statement last
week. Illegal trade in meats "has been so great that even buyers
for the Army have had difficulties, though they have secured
adequate meat supplies for America's fighting men here and
abroad at ceiling prices". Difficulties in obtaining supplies
of poultry due to black market activities have prevented dressing
plants on the Eastern Shore from filling Army and Navy orders,
according to press reports, and a majority of plants have been
forced to cut production to one-third of normal wartime capacity.
One indication of the growing importance of black market
activities in beef is seen in the unusually large number of hides
Regraded Unclassified
290
- 9 -
that has been reaching the market from uninspected slaughter
in recent months, while the supply of hides from inspected
slaughter has fallen sharply. Confidential figures from the
Tunners' Council for February reveal that 45 percent more hides
were received from uninspected sources than during the corresponding
month of 1942; whereas 4 percent fewer hides were received from
inspected slaughter. (See Chart 6.)
Several measures have been taken recently by OPA and the
Department of Agriculture which should help to combat the black
market in ments. Since April 1 every person killing livestock
for sale is required to be licensed, and all meat processed
must bear his license number. OPA is replacing individual store
ceilings on meats with specific retail ceilings, which will be
the same for all stores of n given type in a given area. Specific
retail ceilingson pork are already in effect, and beef, veal,
lamb, and mutton are to be placed under such ceilings by en
order issued last week, effective April 15. Because it will
be easier for the consumer to know the ceiling prices, retailers
of meat will have more difficulty obtaining black market prices.
To supplement these measures, OPA is attempting a vigorous
prosecution of black market operators. Seven corporations were
indicted last week for alleged operation of e nation-wide black
market in meats. In the first two months of this year court
action was instituted against more than 1,000 individuals for
price violations. Fines and ja11 sentences have been imposed
and there have been no acquittals.
Manpower shortage cutting production
Despite the fact that merchant ship deliveries in March
reached a new record high of 146 vessels, the Maritime Commission
last week indicated that the manpower shortage was becoming 80
serious as to threaten the attainment of this year's shipbuilding
goal. During the first quarter of the year a deficit of 70,000
workers was reported for the industry, while replacements
necessitated by the heavy labor turnover amounted to more than
200,000 workers. Similarly the manpower shortage is one of the
factors said to be threatening achievement of this year's lumber
production goal of 32 billion feet.
An increasingly important factor in the manpower shortage
confronting war industries has been a growing migration of workers
from war industries to farms, reversing the previous trend. This
movement is reported to have stepped up considerably recently,
since under existing draft regulations farm workers are virtually
assured of deferment from military service, in contrast to the
uncertainty confronting many workers in war industries. The Wer
Department has expressed concern over the shift of workers from war
industries to farms, and committees from the WMC and the War
Department are slated to meet this week to consider the problem.
Regraded Unclassified
291
COMMODITY PRICE INDEXES IN U.S.
Daily
1942
JULY
AUGUST
SEPTEMBER
OCTOBER
1943
Il
18
25
I
8
29
NOVEMBER
15
22
5
RECEIVER
4
12
19
26
3
10
17
24
JANUARY
FERRUARY
an
7
14
21
19
26
NAMOI
2
16
25
30
5
13
20
27
APRIL
6
13
20
MAY
n
3
10
17
&
e
15
PER
22
Chart 1
CENT
PER
accor
SENT
DON-JONES
264
3
261
93
258
52
255
91
252
so
249
-
246
88
243
67
Commodity Futures
(Dow-Jones)
240
86
237
65
234
84
231
83
228
Moody's Index
a
in U.S.
BI
225
8
222
79
219
78
216
77
213
76
210
75
207
26
2
9
16
23
30
6
13
20
27
6
13
20
27
3
10
17
24
I
6
IS
22
a
4
II
is
22
20
5
12
19
26
3
10
17
%
If
7
14
21
R
5
12
19
18
25
I
8
JANUARY
PERMARY
MADE
APRIL
MY
SEPTEMBER
OCTOBER
MOVEMBER
DECEMBER
JULY
AUGUST
1943
1943
1942
P-148-J
Office of the Secretary of the Treasury
Prices . have and
MOVEMENT OF BASIC COMMODITY PRICES
1942
1943
PERCENT
PERCENT
August-1939-100
210
210
205
205
200
200
195
9 Uncontrolled Commodities
195
190
190
185
185
180
180
175
175
28 Commodilies
170
170
165
165
160
160
*
19 Controlled Commodities
155
155
MAR.
MAY
JULY
SEPT.
NOV.
JAN.
MAR.
MAY
1942
1943
PERCENTAGE CHANGE DEC. 6, 1941 TO APR. 2 AND APR. 9 . 1943
PERCENT
PERCENT
19 Controlled
9 Uncontrolled
Commodities
Commodities
+60
*60
Hogese.ex
+50
+50
292
+40
+40
Comasex
Butter sax
+30
Lard za ex
+30
"Borleyseax
Shelloe 12.3%
Lead N.IX
Print Cloth zer
+20
+20
Sugar 69%
Wheatroax
Cottonsed Oil 5.9%
(Woo/ Topa I.E.X
Zine 3%
+10
0% Change
+10
Mides. Salh,
Tin, Rubber,
Coffee, Copper,
St Screptom,
o
St Screpuesp
o
Coooo -.ax
Tollow-4.13
Bunlep -4.2%
-10
-10
Dec. 6
Apr. 2
Apr. 9
Dec. 6
Apr. 2
Apr. 9
1941
1943
1943
1941
1943
1943
"20 Controlled and a Uncontrolled previous to June 26
Office of the Secretary of the havy
of Presents and
P-244-40
chaRegraded Unclas
293
STOCK PRICES, DOW-JONES AVERAGES
Workly Range
1942
1841
1943
7
Daily
-
MAR.
-
MPF.
NOV.
Jan.
I
BAT
ALL
BEFF.
REFUNDS
NOVEMBER
IMI
i
-
DOLLARS
21
APRIL
BOLLARE
I
30 Industrial Blocks
Chart 3
-
TMO
30 Industrial Stocks
140
140
(50
150
135
18
140
140
130
1.80
130
18
(20
is
129
us
-
110
120
100
120
100
*
3
115
185
e
K
-
TIE
30
30
-
30
45
46
20 Refiroada
ao Ra ilroads
=
2.
<
&
22
If
a
35
K
30
so
NO
a
25
20
I
a
x
=
z
a
is
24
=
X
X
15 Utilities
15 Utilities
20
20
a
25
is
18
A
20
-
18
13
is
14
14.
IN
10
-
-
-
-
WILLIONE
and -
WILLIONS
Volume of Trading
volume of Trading
(AVERAGE or BAILY)
2
7
#
I
I
I
F
I
o
#
=
T
:
21
a
.
"
in
25-
I
#
.
II
19
25
.
15
12
a
.
13
20
17
6
17
24
If
,
14
5
-
(
SEPT.
-
-
-
JULY
get.
-
ass.
DETOBER
INSURER
INSURER
I
FLAME
-
-
i
-
1943
E
(943
7941
1942
I i ! 2 I I
144
INDUSTRIAL STOCK PRICES IN U.S. AND U.K.
August 1939 = 100
Weekly
(Average of Daily)
1942
1943
1941
FCB.
MAR.
APR.
MAY
JUNE
JULY
AUG.
SEPT.
ocT.
NOV.
DEC.
JAR.
FEB.
MAR.
APR.
MAY
AND
JULY
AUS.
SEPT.
OCT.
NOV.
DEC.
JAN.
PER
CENT
PCR
CENT
110
110
105
165
100
100
95
95
90
50
U.K. 56 Industrial
Stocks
85
85
80
su
75
75
70
70
65
&
U.S. 30 Industrial
Stocks (Doe-Janes)
60
60
55
55
50
Chart 4
su
JULY
AUG.
SEPT.
OCT.
NOV.
DEC.
JAM.
FEB.
MAR.
APR.
MAY
JUNE
JULY
i
SEPT.
OCT.
NOV.
DEC.
JAN.
FEB.
MAR.
APR.
MAY
JUNE
1941
1942
1943
Office of the Secretary of the Treasury
FO - 156 . A
- of - and -
2
Regraded Uncla
Chart 5
295
COST OF LIVING, U.S. AND CANADA
August 1939 . 100
1939
1940
1941
1942
1943
PERCENT
PERCENT
Cost of Living
120
120
115
115
Conada
(Dem Air of Stat)
110
no
U.S.
(BLS)
105
105
100
100
95
95
JASONDJFMAMJJASOMOJFMAMJJABONDA
F
M
A
M
/
,
A
5
or
M
D
/
F
M
1939
1940
1941
1942
1943
PERCENT
PERCENT
Foods, Retail
130
130
125
125
Conada
(Dom Ber of Stat)
120
120
U.S.
(BLS)
115
115
110
110
IOS
105
100
100
95
&
A
M
J
J
A
$
o
#
D
di
F
E
A
M
,
J
A
$
o
.
o
a
F
M
A
-
,
#
A
$
e
.
D
#
F
M
.
.
o
N
o
é
F
M
A
1939
1940
1941
1942
1943
Office of the Secretary of the Transy
C-42-A
- e - and -
Regraded Unclassified
MOVEMENT INTO SIGHT OF CATTLE HIDES FROM INSPECTED
AND UNINSPECTED SLAUGHTER
1941
1942
1943
HIDES
HIDES
Thousands
Thousands
1200
1200
1100
1100
1000
1000
900
900
From Inspected Slaughter
800
800
700
700
600
600
500
500
From Uninspected Slaughter
400
400
J
M
M
J
$
N
J
M
M
J
S
N
J
M
M
J
S
N
1941
1942
1943
Chart 5
Source: Department of Agriculture and Tonners' Council
Office of the Secretary of the Treasury
Division of Research and Statistics
0-476
Regraded Unclassifie
6
297
APR 121943
Honorable Clarence Cannon,
Chairman, Committee on Appropriations,
House of Representatives.
Dear Mr. Cannon:
I am enclosing a copy of a letter which Under
Secretary Bell has sent to Congressman Ludlow,
Chairman of the Treasury Subcommittee, concerning
the 1944 appropriation for the Foreign Funds Control.
I know that you realize the importance of pro-
viding the funds necessary for carrying out this
vital program of economic and financial warfare. I
shall be very grateful if you will endeavor to sus-
tain this appropriation in the amount of $3,800,000.
With best wishes, I remain
Very truly yours,
(Signed) H. Mergenthau, Jr.
Secretary of the Treasury.
Enclosure
Mailed by Schoeneman
Copy in Diary
Regraded Unclassified
298
APR 2 1943
Honorable Louis Le Ludlow,
Chairman,
Treasury Subcommittee on Appropriations,
House of Representatives.
Dear Mr. Ludlows
I note from the conference report that the Conference Committee
is in disagreement with respect to the 1944 appropriation for Foreign
Funds Control.
As approved by the Bureau of the Budget, this estimate was in
the amount of 34,350,000. As you know, it was reduced by the House
Committee to $4,100,000, and subsequently further reduced to
$3,100,000 on the floor of the House, upon the motion of Congress-
man Taber. After hearings before the Senate Committee, the appro-
priation was approved by the Senate in the amount of $3,800,000.
As you will recall, Foreign Funds Control's activities will re-
quire the expenditure of $5,000,000 during the present fiscal year.
A reduction to $3,800,000 would, of course, necessitate substantial
curtailment. Any reduction beyond that figure, however, would
seriously cripple the Treasury Department's program of economic and
financial warfare. Representatives of the Department have appeared
before the Appropriations Committees of both the House and the Senate
and, I believe, have fully satisfied these Committees as to the
necessity, in the war effort, of the funds requested.
The Treasury Department's economic and financial warfare programs,
which this appropriation supports, are essential to victory. They
stop the energy from getting and using funds for military operations,
sabotage, espionage, and propaganda all over the world. Billions of
dollars are at stake in this financial warfare. For that reason any
further reduction in the Government's programs for want of a minimum
appropriation would be false economy. Accordingly, it is urged that
every possible effort be made on the floor of the House to sustain
this appropriation at $3,800,000.
I shall deeply appreciate any assistance that you may be able to
render to this end.
Very truly yours,
Under Secretary of the Treasury.
Regraded Unclassified
299
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE 11/12/43
TO
The Secretary
ILS
FROM Mr. Sullivan
Following is a short statement showing the general
nature of the so-called "EPF" contracts entered into
by the War and Navy Departments; a similar statement
with respect to emergency facilities financed by the
Defense Plant Corporation; and a paragraph on renegotia-
tion, with particula reference to the treatment of
amortization and war losses.
EMERGENCY PLANT FACILITIES CONTRACTS
BY WAR AND NAVY DEPARTMENTS.
The facilities constructed under these contracts
consist of buildings or machinery, or both, and are
usually located on land owned by the contractor.
The Government pays the cost of the facilities,
but title thereto is in the contractor. Upon termina-
tion of the contract, the contractor may retain the
facilities by paying the original cost less deprecia-
tion, obsolescence and loss of useful value. If the contractor
does not elect to retain the facilities they are to be trans-
ferred to the Government, and, if the contractor desires,
they must be removed from the contractor's premises (which
provision gives the contractor the right to demand the
demolition of the buildings). The Government is pro-
hibited from using the facilities for any business or
commercial purposes, except when used for defense or
pursuant to an Act of Congress or an order of the President,
and in any event it cannot sell or lease the facilities
without first giving the contractor an opportunity to purchase
or lease them. Amounts received by the contractor in
reimbursement of the cost of the facilities are treated as
taxable income for income tax purposes, and the contractor
is allowed the 5-year amortization deductions. Some
Regraded Unclassified
300
The Secretary,
2.
modifications of the contracts have been made with 8.
view to excluding the reimbursements from taxable
income, but such exclusion has not been allowed except
where the Government is given complete beneficial and
equitable ownership of the facilities, it being re-
cognized, however, that the contractor may properly be
given an option for a specified period to purchase the
facilities, and that the facilities may be subject
to restrictions prohibiting the Government from selling
them to the contractor's competitors or using them
for storing explosives or other extra-hazardous materials.
DEFENSE PLANT CORPORATION FACILITIES
This agency takes title to the facilities which
it provides for defense purposes. The facilities are
leased to the operator for & period of 5 or 7 years,
subject to earlier termination when no longer needed
for defense purposes. In the case of buildings, title
to the underlying land is usually required to be un-
qualifiedly transferred to the Defense Plant Corporation.
Upon termination of the lease, if the operator has not
violated the terms of the lease, he has a 90-day option
to acquire all the facilities but not a part thereof,
at cost less rentals paid or less depreciation, subject
to a specified minimum option price. If this option
is not exercised, the facilities remain the property of
Defense Plant Corporation, without any restrictions as
to the use of the facilities. For tax purposes the
operator does not include in income any amounts paid
by Defense Plant Corporation for the facilities and is
not permitted amortization in respect of the facilities.
The operator is however permitted to deduct the rentals
Regraded Unclassified
301
The Secretary,
3.
paid, but if a closing agreement is entered into in
respect of such deduction he is required to agree that
if he acquires the facilities he will include in taxable
income the excess of their value over the option price,
RENEGOTIATION
In the formulation of general principles to be
applied to the renegotiation of Government contracts,
some difficulty was encountered in reaching unanimity
in the treatment of amortization (the allowance of 20
per cent a year in depreciating emergency plant facilities
financed by the contractor). The War and Navy Departments,
and to a lesser extent the Maritime Commission, originally
took the position that the full 20 per cent a year allowed
for tax purposes should be included as a cost for purposes
of renegotiation. The Treasury Department felt that only
normal depreciation should be recognized as a cost, and
that any amount in excess of normal depreciation should
be treated as a profit (which it is) and not 8. cost,
with recognition that the dollar amount represented by
the difference between normal depreciation and 20 per cent
may not be realized as an actual profit in all cases,
since the ultimate realization of this profit will de-
pend upon the usefulness of the facilities in the post-war
period. After extensive debate the other agencies involved
in renegotiation acquiesced in the Treasury view and now
only normal depreciation is included as a cost for purposes
of renegotiation.
Another problem that aroused some controversy was
the manner of treatment of war losses. Although the
Navy was at first of a mind to allow war losses as a
cost of the performance of Government contracts in some
cases, the Treasury view that the rule should be other-
wise prevailed and at the present time the policy of all
renegotiating agencies is not to allow war losses as 8.
cost chargeable to Government contracts.
Regraded Unclassified
302
SECRET
TREASURY department
PROCUREMENT DIVISION
OFFICE OF THE DIRECTOR
WASHINGTON
April 12, 1943
MEMORANDUM TO THE SECRETARY:
Supplementing report to you of April 5, 1943,
the purchases against the African Program from April
5, 1943, to April 11, 1943, totaled $515,320.25, or
a total of purchases for the program thus far of
$22,193,681.68.
Attached is report giving status of shipping
against these purchases.
Clifton E. Mack
Director of Procurement
FORVICTORY
BUY
UNITED
STATES
general
BONDS
ARM
STAMPS
Regraded Unclassified
303
SHIPPING REPORT AS OF APRIL 10, 1943
SECRET
Tonnage
Tonnage
Tonnage
Tonnage
Shipped to Date
Under Load
On Hand at Port
En Route
Commodity
From U. S. A.
At Port
Waiting Vessels
To Port
Aluminum sulphate
-
-
-
14.5
Asbestos sheet packing
-
2
-
-
Bone glue
-
33
-
-
Books & booklets
2
-
-
-
Brass rods
-
22.25
2.75
93
Babbitt metal
53.5
792.
-
-
Brick
109
20
40
-
Calcium carbide
-
247
-
95
Cement rubber
-
-
19.5
20
Chemicals
163.5
240
191
133
12
-
Coal cutters
-
-
Clothing
2013.75
235.25
171
9.25
Copper sulphate
5292.75
918.75
-
-
Cotton thread
29.25
61.5
-
-
Cordage & twine
225
5
40
-
6
-
-
-
Drugs
Files, steel
15
15
-
-
Fullers earth
72.5
-
-
-
Gelatin
1
-
-
-
-
-
17
-
Glass lamp chimneys
12.75
-
-
Glycerine
-
Horse shoes & nails
23
98
46.25
10.75
22.5
6
8.5
-
Hosiery
-
6.5
Light bulbs
-
-
Lumnite
-
30
-
-
Mach. finished book paper
2
-
-
-
Matches
389.75
-
74.75
-
Newsprint
892
78
-
188
Nipples, bottles, eye cups
-
9
I
-
-
115
Paper bags
-
-
Regraded Unclassified
'304
-2-
SECRET
Tonnage
Tonnage
Tonnage
Tonnage
Shipped to Date
Under Load
On Hand at Port
En Route
Commodity
From U. S. A.
At Port
Waiting Vessels
To Port
Phonograph records
-
-
1000 Each
-
Piece goods, textiles
5940.50
2334
3048.5
1228
Pig tin
20
44
-
-
Powdered milk
119.5
-
-
-
Printers ink
.1
-
-
-
Raw sugar
1545
-
-
-
Refined sugar
4196.5
-
-
-
Sheet copper
-
-
33
34
Shoe tacks
4
9.5
-
-
Silver solder
145
-
-
57
Spare parts for autos,
tractors & harvesters
219.50
27.25
212.25
49.75
Spark plugs
2
-
2.5
-
Storage batteries
47
-
11.75
-
Steel
27.5
62.50
-
1014
Shoes, boots & soling
211.25
82.75
99
27.25
Sulphur commercial flour
-
-
-
320
Tires, tubes, & tape
175.75
-
-
35.75
Tools
-
.5
-
100
Tooth brushes
-
-
75
-
Tea
171.5
-
-
-
Wire nails
100
-
22
-
Wire rope
71.25
17.75
-
-
X-Ray films
-
1
-
-
Paint pigments
8.7
-
-
-
Tinplate
845
-
-
-
Corrugated boards
-
-
-
78.5
Paper, tarred, mimeo.
-
-
-
448
wrapping, blue print
Totals
23,114.80
4,630.50
4,874.00
Regraded Unclassifie
305
BRITISH AIR COMMISSION
1785 MASSACHUSETTS AVENUE
WASHINGTON, D. C.
TELEPHONE HOBART 9000
PLEASE QUOTE
REFERENCE NO
With the compliments of British Air Commission
who enclose Statement No. 80 - Aircraft Despatched
- for week ended April 6, 1943.
The Honourable Henry Morgenthau, Jr.
Secretary of the Treasury
WASHINGTON, D. C.
April 12, 1943.
Regraded Unclassified
306
MOST SECRET
STATEMENT NO. 80
Aircraft Despatched from the United States
Week ended April 6th. 1943
ASSEMBLY
BY
BY
FLIGHT DELIVERED
TYBE
DESTINATION
POINT
SEA
AIR
FOR USE IN CANADA
CONSOLIDATED
Coronado
U.K.
U.K.
1
Liberator III
Canada
Canada
1
Liberator GR V
U.K.
U.K.
4
CURTISS
Seamew
Canada
Canada
5
Kittyhawk
Middle East
Port Sudan
11
DOUGLAS
Dakota I
U.K.
U.K.
1
Dakota I
India
India
1
Dakota III
India
India
9
Dakota III
Middle East
Middle East
4
FAIRCHILD
Cornell PT 26
Canada
Canada
4
Cornell PT 26
Middle East
Middle East
6
LOCKHEED
Lodestar II
Fighting French
en route
1
Ventura
U.K.
U.K.
1
GLENN MARTIN
Baltimore III A
Middle East
MiddleEast
5
Baltimore IV
Middle East
Middle East
12
NORTH AMERICA
Harvard
S'Rhodesia
S'Rhodesia
10
Harvard
India
Bombay
8
STINSON
Reliant
Trinidad
Trinidad
3
VULTEE
Vengeance
India
Bombay
16
Total
51
42
10
Statement Note* No.76, week ended March 9, Dakota 1 - 7 were reported as being en route to Middle
East. Six were delivered to M.E. and one through error was delivered to U.K. where it is
expected to remain.
Movements Division,
April 10, 1943.
British Air Commission.
Regraded Unclassified
307
BRITISH AIR COMMISSION
1785 MASSACHUSETTS AVENUE
WASHINGTON, D. C.
TELEPHONE HOBART 9000
LEASE QUOTE
EFERENCE NO
"ith the compliments of British Air Commission
who enclose weekly Statement No. 98 covering
Aircreft Flight Delivery as at April 6, 1943.
The Honourable Henry Morgenthau, Jr.
Secretary of the Treasury
WASHINGTON, D. C.
April 12, 1943.
Regraded Unclassified
3081
SECRET
2
LOCATIONS OF OCEANIC FATHER CRAFE
(Covering Novements through April 6,
MOST SECRET
Agril % 1963
(1)
(8)
(3)
3
(5)
(6)
(7)
(8)
(9)
(20)
(11)
(12)
(E)
(14)
(15)
E270
si
É
VENT.
no BOAT
VENT.
di
BOST.
BALF.
BITH,
7
-
BOGA
TRANSP.
(BAC)
(BAC)
(PMC)
(RAC-L/L)
(L/1)
(5/5)
(I/L)
(1/2)
(12)
(0.8.)
(L/L)
TOTAL
UNITED KINGDOM
20
%
432
240
270
293
129
63
114
93
4
8
WINNER HAST
1,642
5
%
w
R
SOUTH AFRICA
127
FREETONE
5
AUSTRALIA
27
SERGAPORE
9
INNIA
CTU'S If CANADA
,
,
45
58
265
RCAP
16
1
WASSAN
1
18
FINILY SERVICE
9
39
7
5
221
h reste Overseas
22
5
7
8
32
1 I É
1
#
6
,
2
1
Marque or Permise (m reute)
,
4
w
Special duty (Can. w Dorm.)
19
2
1
15
4
12
2
Nontreal
x
2
1
6
1
29
35
1
CRASHED APTER EXPORT
7
7
1
,
29
29
8
n
14
7
3
1
ha reste export
6
1
At installation conter
44
1
1
,
56
2
49
4 reute installation center
4
4
,
4
1
,
2
48 modification conter
la reute Notification center
34
14
Special duty in U. s,
1
1
1
,
Under repair
1 2
2
M starting yoint(Iang Boash,etc)
1
2
8
GRASHED IN U. 8.
=
1
20
1
2
5
w
at
1
8
DIVERTED 70 1. 8.
2
2
,
50
20
264
a
20
352
TOTAL
20
165
520
660
-
1
745
199
424
w
E
261
72
122
3,722
e Insluding - treasferred to U. s. after delivery to U. L
PLANNING AND AIRPRANCE
AIR 46 COMMISSION Regraded-Unclassified
U. S.
2
SECRET
309
PRITISH
EXPLANATION
or
COLUMN
MOST SECRET
Space limitations have necessitated a slight re-organisation of the contents
of the various columns on the weekly table. Aircraft included in each column is
as follows:
(1) 20 BOXING FORTRESS I OFF BAC CONTRACT 4-5077 (Complete)
(2) 165 CONSOLIDATED LIBERATOR TIPES OFF BAC CONTRACTS (Complete)
6 B24's off A-5068
20 Liberator I off F-677
139 Liberator II off 1-677
(9) 520 LOCKHEED HUDSONS orr BAC CONTRACTS (Complete)
225 Hudsen 1 (Lang Range) off A-1749
50 Hudsen III (Isug Range) off 4-67
245 Budson III (Long Range) off A-68 (excluding 30 exported by ma)
(No Short Range Hudsons are included)
(4) 663 VEGA VENTURAS OFF BAG CONTRACTS
375 Off A-1748 (Complets)
268 off 4-344 (Excluding 10 Short Range exported by sea,
2 to come: 1 Beng Ranges 1 Shart Range)
(5) 388 CONSOLIDATED FLYING BOATS OFF BAC CONTRACTS AND LEND-LEASE REQUISITIONS
7 Catalina II (FBY5) off A-2587 (Complete)
40 Catalina I off F-210 (Complete)
59 Catalina I (28-58%) off 6-37 (Complets)
18 Catalina I (28-583) off ABB-58 (Complete)
29 Cagalina na (28-580) off CAM-78 (Complete, but onitting 7
delivered to Canada)
12 Catalina III (PEYSA) off BSO 10772 (Complete)
102 Catalina B (PBY58) off BSC 148 (Complete)
75 Catalina IB (FBY58) off ase 7952 (Complete)
45 Catalina IV (PRY5) off BSQ I-8 (Incomplete)
1 Coronado (FB2I-3B) off BSO 152 (Inessplete)
(6) 1 VEGA VENTURA as 1 OFF BSO 142 (Incomplete; other requisitions to be added
(7) 745 LOCKHEED HUDSONS OFF LIND LEASE REQUISITIONS
149 Hudson III (A29) off L/L Centract DA-A0-5 (Completez non shipments
not included)
209 Hudson III (A29) eff L/L Centract DA-10-151 (Complete) ⑉ shipments
not included)
95 Budson VI (A28A) off L/L Contract D4-AC-472 (Complete; sea shipments
not included)
192 Hudson VI (A28A) off L/L Contract DM-MC-908 (Incomplete)
($) 199 DOUGLAS BOSTON IIIA OFF 1/6 CONTRACT DA-AC-934 (Incomplete)
(9) 424 MARTIN BALTIMORES OFF 1/6 CONTRACT DA-A0-19 (Incomplete)
280 Baltimere IIIA (1 to come)
144 Baltimare IV (Incomplets)
(10) 64 BOXING PORTRESSES OFF LIND LEASE REQUISITIONS (Complete - basis of
present understanding)
45 Fortress IIA (BITE) off 380 149 (Army Release)
6 Partress II (5175) off n4-ml-16
13 Portress II (5178) off 280-149 (Any Release)
(11) 279 CONSOLIRATED (B24D) 077 BSC 141 (ANIT RELEASE)
86 Liberator III
93 Missater a 1
(12) 161 BORTH AMERICA orr ass 4617 (AMY RELEASED
23 Mitchell I (sage) (Complete)
130 Mitchell II (B250) (Incomplete) and other Marks expected to fellow)
(23) 71 MARTIN MARAUDER I (B26A) OFF RSO 150 (Complete - understanding) basis of procest
(24) 122 TRANSPORTS OFF LEND-LEASE REQUISITIONS
1 Douglas Dubsta I (0-47) off 10-10-167 (Complete)
20 Douglas Inkota I (0-47) off MD-20669, 360 2849 (Complete)
30 Bouglas Bubsta I (0-47) off DA-AC-1043 (Complete)
9 Bouglas Dakota II (0-53) off BSC-1050 (Complete)
40 Bouglas Dukota III (0-47A) off A0-206691, 860-2849 (Incemplete)
7 Lockheed Ledester TA (0-59) off D4-MO-53 (Complete)
15 Lockhood Ledester II (0-60) off D4-A0-53 (Gemplete)
PLAINING AND AIRPRANZ SUPPLY
MATTIN ATR COMMISSION
WASHINGTON, D. c.
APRIL 7, 1943
Regraded Unclassified
THOMAS F. FORD
310
COMMITTEE.
14TH DIST. CALIFORNIA
BANKING AND CURRENCY
Congress of the United States
House of Representatives
R. w.
April 12, 1943.
Hon. Henry Morgenthau, Jr.,
Secretary of the Treasury,
Department of the Treasury,
Washington, D. C.
My dear Mr. Secretary:
It was exceedingly gracious of you to take
note of my little squib in the Record, re the so-called
"secret plan."
I had two objectives in that statement: The
first was that I wanted to spike Mr. Smith's insinua-
tions. The second that his complete lack of courtesy
to a committee that had invited our committee to be
its guests, embarrassed me.
Unfortunately, under the one minute rule,
I did not have the opportunity to make this clear.
AS to your conduct of the Treasury Department,
I want to reiterate what I have said on numerous
occasions and which I will shortly say in the House,
that I consider you the greatest secretary of the
Treasury since Hamilton who has had to deal with -- as
Hamilton did -- a deficit.
This "greatest Secretary of the Treasury
since Hamilton" has been applied to Mellon. Nuts,
is my answer. Mellon had to deal with a surplus only.
From the day you assumed your duties a deficit has been
your problem.
Your masterly handling of that difficult
problem, in my view, makes you the greatest Secretary
of the Treasury since Hamilton.
I'm going to have more to say about your
stabilization plan later.
Being a bit interested in the subject of
international trade; being the co-author, with my wife,
of "The Foreign Trade of the United States" (Scribner,
1920), I feel that what you are trying to do is of
vital importance to America, and to the world.
Regraded Unclassified
311
-2-
I am your friend and your supporter.
Count on me.
Cordially yours,
Thomas 2 2nd
Thomas F. Ford, M. C.
Regraded Unclassified
312
APR 121943
My dear Mr. President:
This is to acknowledge your letter of April 7, 1943,
concerning the preliminary draft proposal for an inter-
noti onal stabilization fund of the United liations and their
associates.
I offer my sincere regret that through an oversight,
& letter was not sent to the Minister of Finance of the
Commonwealth of the Philippines, requesting his views on
the preliminary draft proposal. I aveure you, no welcome
the opportunity to have the prolisinary draft proposal
considered by the Winister of Finance of your Covernment,
and ve look forward to discussing with the technical 62-
parts of your Government the reasibility of international
monetary cosporation along the lines suggested therein, or
along any other lines your Government may wish to suggest.
I - sending our preliminary draft proposal to the
Minister of /Anance of the Commonwealth of the Philippines
for his examination and consideration.
Very sincerely yours,
(Signed) H. Morgenthau, Jr.
Secretary of the Treasury
The Honorable
The President of the Philippines.
Photo file in Diary
File to White's office
EMB/10
4/10/43
Regraded Unclassified
Office of the President
of the Philippines
The Shoreham Hotel
Washington, D.C.
April 7, 1943
My dear Mr. Secretary:
I have seen in the newspapers that the Treasury has sub-
mitted to the United Nations and their associates, a proposal
for an international fund to stabilize currencies, and has
invited 37 nations to send representatives here to discuss this
proposal. The Philippines, as you must know, is a full-fledged
member of the United Nations, and I assume there has been an
oversight on the part of the Treasury not to have sent to the
Philippine Government-in-exile in Washington either the proposal
or the invitation.
While at present our currency system still remains under
the ultimate control of the Government of the United States pend-
ing the establishment of the Philippine Republic, it is evident
that after the war when the Philippine Republic shall be esta-
blished, the said Republic will have full control on matters
affecting its currency. Since it is our policy to cooperate
with the other members of the United Nations, especially with
the United States, in the solution of post-war problems, I feel
that the Philippines should have its representatives in the
conference that will be held for the purpose of discussing
the proposal of the Treasury.
I would very much appreciate it, therefore, if you should
invite the Commonwealth of the Philippines to take part in
that conference.
Very sincerely yours,
MANUEL L. QUEZON
The Honorable
Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D.C.
Regraded Unclassified
SURY
NOT TO BE RE-TRANSMITTED
2>
COPY NO.
13
BRITISH MORE
SECRET
U.S. SECRET
STATE
OPT
No.
119
TREASURY
Information received up to 7 A.M., 12th April, 1943.
1.
On the 1st one of U.S. Submarines on petrol off North SPAIN torpedoed
a merchant ship and 2 or possibly 3 destroyers. Subsequent reconnaissence showed
that all these ships had reached BORDEAUX but that the merchant ship THIS hadly
damaged. The escorted blockade runner which was bombed on the 10th has reached n
Biscay port. One of H.M. Destroyers damaged in collision on 10th while escorting
outward bound convoy, W/LB torpedoed and sunk yesterday morning 450 miles south of
GREENLAND. 3 survivors rescued. Following attacks reported by H.M. Submarines in
MEDITERRANEAN: One sank L 2,000 ton southbound ship off southern ITALY on 28th
March and & motor fishing vessel south east of NAPLES on lot, A Dutch Submarine
sank 5. 4,500 ton ship off CACLIARI on 29th Warch. One of H.M. Submarines on petrol
in AEGEAN between 21st and 31st March sonk 4 caloues and shelled a resin refinery
on the ATHOS Peninsule. The refinery was jut out of action end eight coiques im
KANNAVITSA BAY were destroyed. One of H.M. Submarines sank N 4,000 ton ship off
Eastern TUNISIA. A 12,800 ton merchant ship from United Kingdom to AUSTERLIA with
tircraft presumed sunk by U-boat southeast of BERMUDA on the 2nd.
2, MILITARY
PUNISIA. To midnight 10th. 8th Army. Advance continued all clong the
front by armoured car patrols which on coast road reached MCLIOUNECHE 35 miles north
of SFAX. Our light arzoured forces patrolled on a line wort from EL DJ&M.
2nd U.S. Corps. U.S. Infantry are clearing battlefield in the GAFSA
uren and 0.3. armoured forces have moved north to make contact with our troops south
east of FONDOUR. No opposition has been net except minos in the FAID area and the
roads north end east of FAID are now open.
lst Army. British armoured units continued their advence on KAIROUAN
and by night full & tale. battle was going on south of the town. Our forces have
soved through the FONDOUK GAP to 8 miles south west of KAIROUAN and U.S., British
and French forces have occupied the high ground south east and north of FONDOUK and
north of PICHON. Several hundred prisoners were taken on this front on 9th and 10th
Astride the MATEUR-BJEM road our forces secured positions 12 to 15 miles northeast
of (?DJEJA), some prisoners wore taken but opposition was slight.
3. AIR OPERATIONS
WESTERN FRONT. 10th/11th. FRANKFURT. Nov reported 18 bombers missing
1,022 tons of bombs dropped in vicinity of objectivo but bombing appears to have
been spread over & wide area. 11th. Mosquitos attacked the diesol works at HENGELO
and railway work shops at MALINES, 2 are missing. Typhoons attacked railway and
other objectives in Northorn FRANCE. 11th/12th. Aircraft despatched - son mining
46, 2 missing, Intruders 5. About 20 enemy aircraft laid mines in the THAMES
Estuary, 1 WDB destroyed by Naval A.A., another was shot dorm by an Intruder aircraft
over FRANCE.
TUNISIA. On 9th/10th and 10th enemy troops and M.T. in the ENFIDAVILLE
uron were heavily attacked by Wollingtons end U.S. Marauders. On the 10th A total
of 15 U.S. Mitcholls and 52 U.S. Lightnings on offensive sweeps in the SICILIAN
CILINEL destroyed 53 enomy aircraft including 40 transport aircraft und demaged 10
others for the loss of one Lightning.
10th/11th. Naval Albecores attacked 3 on-my ships northoast of SFAX
sinking one and setting fire to another.
SARDINIA. 10th. U.S. Fortresses dropped 224 tons on LA MADDALENA
Herbour scoring direct hits on the B inch cruisers GORIZIA and TRIESTE, the Munition
Dopot and the U-boat base, soveral ships were set on firo.
Regraded Unclassified