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Diary Book 723 April 20-23, 1944 - A - Book Page Adams, Charles W. See Deferments, Military Argentina See Latin America # War Refugee Board - B - Banks See Revenue Revision Brazil See Post-War Planning (Currency Stabilization) - C - Cabaret Tax See Revenue Revision China British loan of E50 million - resume of situation - 4/22/44 723 324 Correspondence Mrs. Forbush's mail report - 4/21/44 234 - D - - Deferments, Military Resume of Treasury situation by Bell - 4/20/44 131 Conference: present: HMJr, C.S. Bell, and Jordan - 4/21/44 194 a) Adams (Charles W.) deferment discussed b) Internal Revenue, Bureau of Mint, Bureau of Procurement Division Treasurer, Office of War Finance Division Deferments, under 26, by Board, not Treasury, discussed by 9:30 group - 4/28/44: See Book 725, page 17 - E - Eccles, Marriner S. See Post-War Planning: Currency Stabilization Employee Relations Prizes for suggestions in re comfort of employees - HMJr's memorandum to Mrs. Doyle and C.S. Bell - 133 4/20/44 Regraded Unclassified - I - Book Page Federal Reserve System See Financing, Government Fedhala Refugee Camp See War Refugee Board Financing, Government Federal Reserve System: Ability to support market for United States securities, etc., reviewed in Murphy memorandum "Federal Reserve Ratio" - 4/20/44 723 139 Finland See War Refugee Board - G - Gold See Latin America: Argentina - I - India See Lend-Lease Intergovernmental Committee on Refugees See War Refugee Board Internal Revenue, Bureau of See Deferments, Military - L - Latin America See also War Refugee Board Argentina: Shipment of gold to Switzerland - use of British navicert system to prevent discussed in O'Connell memorandum - 4/20/44 145 a) HMJr strongly approves 146 (Brazil (Mexico See Post-War Planning (Currency Stabilization) Lend-Lease Silver to India: Resume of negotiations - 4/22/44 306 U.S.S.R. Exports to in February 1944 - 4/21/44 249 Report for March 1944 and nine months ending March 31, 1944, toward fulfillment of Third Protocol - - 4/22/44 307 United Kingdom: Federal Reserve Bank of New York statement showing dollar disbursements, week ending April 12, 1944 - 4/21/44 250 - X - - Mexico See Post-War Planning: Currency Stabilization Mint, Bureau of See Deferments, Military Regraded Unclassified - P - - Book Page Post-War Planning Currency Stabilization International Conference Eccles as member of delegation discussed by HMJr, White, O'Connell, and Smith - 4/20/44 723 42 Press conference arranged by HMJr, White, Smith, Luxford, Bernstein, and Shaeffer - 4/20/44 45 FDR brought up to date on testimony before Senate and House Committees, on Russian and British cooperation - - 4/21/44 232 (See also Book 724, page 150 - 4/26/44) Brazil: Final revised draft published in Rio simultaneously with release in Washington and London - - 4/22/44 373 Mexico: Final revised draft published in Mexico City - 4/22/44 374 U.S.S.R. : Final revised draft published in Moscow - 4/25/44: See Book 724, page 148 Procurement Division See also Deferments, Military Surplus Property, Disposal of Construction Equipment: Results of conference reported by Mack - 4/20/44 142 - R - - Revenue Revision Cabaret Tax: HMJr strongly favors retention of 30% tax - 4/20/44 135 "Increase in earnings of banks and all active American corporations (after taxes) since 1932" - - White memorandum - 4/20/44 141 - S - - Silver See Lend-Lease: India Spain See War Refugee Board Stabilization Fund Gold transactions for three months ending March 31, 1944 - 4/21/44 247 Statements by HMJr Before Senate and House Committees. on International Stabilization Fund - 4/21/44 205 (For previous drafts see Book 722: Post-War Planning - Currency Stabilization) - T - - Taxation See Revenue Revision Treasurer, Office of See Deferments, Military Regraded Unclassified - U - Book Page U.S.S.R. See also Lend-Lease Press comments reviewed in Harriman cable - 4/20/44 723 25 - W - War Finance Division See Deferments, Military War Refugee Board Spain: Corcoran may still go to Spain - - Pehle memorandum - 4/20/44 147 Fedhala Refugee Camp near Casablanca to be transferred to United Nations Relief and Rehabilitation Administration - 4/20/44 148 Finland: General attitude toward refugees discussed in cable from American Minister, Helsinki - 4/20/44 152 Intergovernmental Committee: House of Commons debate on - 4/21/44 255 Reports for weeks of April 10-16 and 17-22 - 4/21/44 277,329 Argentina: Resume of situation - 4/21/44 286 1 April 20, 1944 10:00 a.m. CONVERSATION WITH AMBASSADOR HARRIMAN AT MOSCOW Present: Mr. White Mr. Luxford Mrs. Klotz H.M.JR: What cables have gone, in case he refers to other cables? MR. WHITE: From him, we haven't heard anything, but - do you want to jot down the numbers, or do you want the cables? H.M.JR: I want the cables. (Mr. White hands cables to the Secretary) MR. WHITE: Here is the one (indicating). It is in the very first paragraph. H.M.JR: All right. MR. WHITE: Here is the later cable in which we informed him. H.M.JR: This is No. 938 that this refers to. And then you give them the release? MR. WHITE: They have the release in another cable. We informed him that we sent a similar message to the earlier one, to the Chancellor of the Exchequer. This cable tells him they have agreed. If he knows about this cable sent on April 17-- H.M.JR: You took an awful chance on that. Regraded Unclassified 2 - 2 - MR. WHITE: Well, Bernstein and Luxford sold me. They were right. They decided to take a chance. We had a couple more conversations that morning with Opie. H.M.JR: But this is the group - April 10, April 17, and April 19 - there is nothing else? MR. WHITE: No. H.M.JR: Then what you want is the Russians to say what? MR. WHITE: Yes or no. MR. LUXFORD: Yes is what we want. MR. WHITE: Yes if they are in agreement, no if they haven't given their word. They might have some excuse. They might say they wouldn't know until next week, or something like that. We want merely to be able to say they are in agreement. H.M.JR: Now I am ready. If the call had come through at ten o'clock, I wouldn't have been ready. MR. WHITE: That is a good thing. MR. LUXFORD: The cable that went out last night told Harriman to say yes or no. H.M.JR: They say these cables take three days to get through. MR. WHITE: When you received your message, then, it was not at all certain that he had received this cable, but merely that the telephone operators had contacted him. H.M.JR: Oh, they started at nine o'clock this morning. They said he couldn't talk at ten-thirty, but he could talk at ten. What is Smith doing? Regraded Unclassified 3 - 3 - MR. LUXFORD: Working on the statement. H.M.JR: Did he hear about our decision to have a press conference at four-thirty today? MR. LUXFORD: Yes. H.M.JR: If they waited until four-thirty tomorrow it wouldn't get through until around six and wouldn't appear in 8. single paper. Fred was amazed that White agreed to it. The 866 is the first part, rather than the 865. What did you change the number for? MR. WHITE: Because they are both parts of the same cable. H.M.JR: Let me have 865. MR. WHITE: No.865 apparently comes after 866. H.M.JR: That is what I thought. They sent the last part first. MR. LUXFORD: They send things in part. H.M.JR: Let's do a couple of questions while we are here. (The Secretary reads from attached list of questions and answers) "Will the Fund control the gold value of the United States dollar?" MR. WHITE: Definitely not. That remains the power of the United States, exclusively. It can be altered by the Fund, but only with the approval-- H.M.JR: Can we alter the gold content? MR. WHITE: The gold value - only with the approval of the United States. Regraded Unclassified 4 - 4 - H.M.JR: They can take the initiative? MR. WHITE: Yes. They can't alter the gold content of the dollar, but what they can say is that the value of gold in terms of all currency shall rise or fall, and we accepted that only on the condition that it would require our approval. MR. LUXFORD: In other words, they still can't do it without our approval. H.M.JR: Who advocated that? MR. WHITE: A lot of the countries. You see, there are two groups. One group thought that some day there would be too much gold. Our friends in the Federal Reserve Board would like to lower the price of gold 80 as to reduce the mining of gold over there, and they had 8. lot of company - - the countries that don't produce gold. The countries that produce gold wanted it the other way - South Africa, particularly - Australia, and others. They might simply want to increase it. So a compromise was made. We said that no country that - you can't change it except with the approval of all countries that have more than ten percent of the votes now. That includes-- H.M.JR: All the countries? MR. WHITE: That have more than ten percent of the votes. H.M.JR: "Would it not be better to wait before attempt- ing to stabilize currencies?" MR. WHITE: The most acute period will be in the immediate post-war period, where there are a number of currencies that have to be adjusted and where the pressure on the currencies of some countries will be the greatest, and where the struggle for world markets will be the keenest after six months or a year. Regraded Unclassified 5 - 5 - And it is very important that during that acute period there is international cooperation to prevent chaotic exchange conditions such as occurred in the last war. H.M.JR: "Will the Fund be used for the liquidation of blocked sterling balances?" MR. WHITE: No. That is out. No. H.M.JR: You have the question. MR. WHITE: That suggestion was in our first draft. The British objected to it. They would like it, but they think its presence in there - you can't say - this is for your own information - its presence in there makes it more difficult for them to make a better deal with India or some of the other œuntries, 80 they asked us to leave it out. As it stands now, the answer is no, but it being in an earlier draft, some people may ask. H.M.JR: Couldn't they try it? MR. WHITE: They have the power to do so, if they want to. H.M.JR: I mean, that is England's one big problem. Why shouldn't they try it? MR. WHITE: Because they think they don't have to liquidate India still. They think they can make & deal which will be more satisfactory than the kind of conditions that we imposed on them. H.M.JR: I think the more honest answer - I am not questioning you - would be to say, "Well, that is a problem; they may bring it up. It is a problem that the British had and it might help them." MR. LUXFORD: Under the principles today, though, they couldn't solve that problem. Regraded Unclassified 6 - 6 - MR. WHITE: No, but they could bring it up at the conference and include it in the powers. H.M.JR: It is the one thing that is bothering Churchill. MR. WHITE: But they were the ones who asked us to take it out. H.M.JR: That may be for trading purposes. But there is nothing in it saying they can't liquidate. MR. WHITE: Some changes or additions would have to be made in the final draft if that problem was to be undertaken. H.M.JR: "Would the United States be bound to stay in the Fund if membership proved disadvantageous?" I know that. MR. WHITE: On notice. H.M.JR: "Will the Fund support the price of silver?" Don't give me that kind of stuff. MR. WHITE: There is nothing in there that has any- thing to do with silver. H.M.JR: Why not say so? MR. WHITE: Because the fellow who will ask you will only be the man who is interested in silver. Silver plays no direct role. H.M.JR: That is what I would say. "Would joining the Fund mean that Congress will not have control of our monetary system?" The answer to that is no. Regraded Unclassified 7 - 7 - MR. WHITE: That is right. H.M.JR: "Will the United States be forced to insti- tute exchange controls?" MR. WHITE: No. If we want to-- H.M.JR: Isn't it better to say the whole purpose is 80 we will not have exchange control? MR. WHITE: To discourage it, that is right. H.M.JR: "Does the establishment of the Fund mean the abandonment of the gold standard?" MR. WHITE: On the contrary, it means a strengthening. H.M.JR: "Why can't the BIS do the job?" MR. WHITE: The BIS can't do the job because it has neither the powers, the resources, not is the membership broad enough. It has nothing other than a building of & name. H.M.JR: They didn't behave too well. MR. LUXFORD: That is right. MR. WHITE: If that question is asked, it will be people on the outside who will be - a few - interested in your answer from the point of view of picking you up if you say anything very adverse. So I think you better answer that cautiously. But the Bank has very little resources. It has none of the powers that are necessary for this purpose. It is owned by the Central Bank and not by the Governments. MR. LUXFORD: Doesn't even have Federal Reserve Bank participation on the part of the United States. MR. WHITE: And it is at present practically controiled by Germany, because Germany votes with the Regraded Unclassified 8 - 8 - countries she has occupied. England has withdrawn her Member. (The Secretary holds telephone conversation with Ambassador Harriman in Moscow, as follows:) 9 April 20, 1944 10:07 a.m. HMJr: Hello. Operator: The Secretary is on, Operator. HMJr: Hello. Overseas Operator: Hello. Secretary Morgenthau? HMJr: Talking. Operator: This is the overseas operator 80 awaiting your call to Moscow I'd like to advise you about Government regulations. In the interest of National security you are requested to refrain from discussing departure or arrival, name or location of ships, military traffic of any kind, technical weather information or any other infor- mation which may be of aid or comfort to the enemy. HMJr: Thank you. Operator: You're welcome, sir. HMJr: Hello. Hello. Hello. Treasury Operator: She'll put him on in just a second. HMJr: Hello. Operator: Yes, sir. HMJr: Oh, you're still there? Operator: Yeah, I'm still here. Do you want me to hold it for you? Overseas Operator: Go ahead, please. HMJr: Hello. Hello. Hello. Operator: Just a moment, Secretary Morgenthau. (Pause) Treasury Operator: Hello, New York. (Pause) HMJr: Hello. Regraded Unclassified 10 - 2 - Overseas Operator: I'm sorry to keep you waiting, Secretary Morgenthau. HMJr: That's all right. Treasury Operator: Would you like me to hold it for you? HMJr: Don't they like to have me on? I don't care. Operator: No, they don't mind. HMJr: All right. Operator: I thought maybe you would mind. HMJr: Well, I -- my hand is getting tired. if Regraded Unclassified April 20, 1944 11V 10:24 a.m. Operator: Go ahead. HMJr: Hello. Averill Harriman: Hello. HMJr: Hello. H: Hello. HMJr: Averill? H: Yes. HMJr: Hello. H: Hello. HMJr: Averill? H: Yes. HMJr: Can you hear me? H: Yes, I hear you very well. HMJr: Averill, I don't know . -- did you get Cable 961? H: What? HMJr: Have you received Cable 961? H: Yes, I got your cable. HMJr: Yes. H: The answer 1s "No". HMJr: Hello? H: I say, the answer is "No". HMJr: The answer is "No"? H: They have not informed.... HMJr: Wait -- I don't hear you. Regraded Unclassified 12 - 2 - H: They have not been .... HMJr: They have not got the time? H: They have not had time to give your message .... HMJr: Well, now.... Operator: Just a moment, please. HMJr: That's all right. (Aside: They haven't had enough time to give him .... No, I can hear him.) Hello. Oh. (Aside: Do you think it draws on it?) Hello. Operator: Yes, sir. HMJr: Which one of these things draws down most, the dictaphone or the loud speaker? Operator: I think the loud speaker. HMJr: You think the loud speaker? Operator: I think 80. HMJr: Well, I could hear him. Tell the operator I could hear him. Operator: Oh, is he gone? Long Distance Operator: Long Distance. HMJr: Hello, Operator. Operator: Yes. HMJr: I could hear Mr. Harriman, you know. Operator: Yes. HMJr: You cut me off. ; Operator: No, we haven't cut you off. Just a moment. I'll see what happened over there. Overseas Operator: Just a moment, please. Hello? Regraded Unclassified 13 - 3 - HMJr: I could hear him. Hello? Hello? Operator: Yes, sir. Overseas Operator: Hello, Secretary Morgenthau? HMJr: Yes. (Pause) Operator: The operator says the overseas operator says they interrupted because the connection was so distant. HMJr: Well, I could Operator: She said she's trying to get a better connection over there. I told her that you could hear him. HMJr: I could hear him. Operator: Uh huh. Well, just a minute now. She'll have him back on. HMJr: Hello. Operator: Yes, sir. Shall I ask the telephone man if it makes any difference? HMJr: What? Operator: Shall I ask one of the telephone men if it makes any difference? HMJr: Yes. Which one makes -- if it makes any difference. Operator: Right. HMJr: Will you let me know? Operator: I will. Regraded Unclassified 14 April 20, 1944 10:28 a.m. Operator: Yes. HMJr: Can you hear any difference now? Operator: I can't tell any difference at all. HMJr: All right. Well, then I can -- the loud speaker does not? Operator: He said the loud speaker wouldn't make any difference. HMJr: All right. Now -- Hello. Averill Harriman: Hello. HMJr: Averill? H: Yes. HMJr: I hear you very well. I heard you say the answer was "No". H: Yes. HMJr: And that they didn't have.... H: Didn't have time HMJr: What's that? H: There hasn't been time. HMJr: There hasn't been time? H: He hopes that you can be -- that you will be able to wait. HMJr: Well, I am testifying before the Senate Friday morning. H: What day? HMJr: Friday. H: Friday? HMJr: And before the House Friday afternoon. Regraded Unclassified 15 - 2 - H: Yeah. HMJr: And that's all been arranged. H: Yes. HMJr: I -- I cannot wait. H: Well, I told them -- I said that you probably could not wait. HMJr: No, I can't wait. And, as you know, we've got agreement from everybody else. H: Yes. HMJr: Hello? H: Yes. HMJr: And we're releasing Friday night this statement. H: Yes. HMJr: For Saturday morning. H: Yes. HMJr: And I had hoped that they would join us. H: Well, there was a desire expressed that you might be able to wait but they haven't been able to hear from their experts. HMJr: Well, I -- I don't understand that. Do you mind if I find out what happened at this end from their experts? H: I wish you would. I think it's important that you should. HMJr: And they're waiting on their experts. H: Yes. HMJr: Hello? H: Yes. HMJr: Well, I'll call up.... Regraded Unclassified 16 - 3 - H: And there were a few other points in the original text .... HMJr: Yes. H: .... that seemed to trouble them. HMJr: I see. H: So that it's mostly dangers and the -- of certain points that are not yet ironed out. HMJr: Well, at this end from the top down, there's complete unanimity. H: Yes. HMJr: I mean, in our Government. Hello? H: Yes. HMJr: I just want you to know that. H: Fine. I wish I could talk more freely. How are you? HMJr: I'm fine. And you? H: Fine. HMJr: Well H: Give my love to the Boss when you see him. HMJr: I'll do that and thanks for what you've done and if you'd keep up the pressure, I'd appreciate it. H: One trouble 1s, the cables take 80 long. HMJr: That's why I'm phoning you. H: Yes. I'm just sending you a cable explaining it in more detail. HMJr: Thank you, Averill. H: Fine. HMJr: Good bye. H: Good luck. Regraded Unclassified 17 - 9 - MR. WHITE: If I had known you could hear as well as that, we should have done it a week ago. H.M.JR: You suggested it last night. MRS. KLOTZ: This. is amazing. MR. WHITE: The first time left some doubts in my mind as to the wisdom of telephoning. (The Secretary holds telephone conversation with First Secretary Bazykin, as follows:) 18 April 20, 1944 10:34 a.m. HMJr: Hello. Operator: The Ambassador is not there now. They expect him about 11:30. HMJr: Well, who is there? Is the First Secretary there? Operator: I'll find out. (Pause) Operator: Go ahead. HMJr: Hello. Mr. .... Vladimir Bazykin: Yes, how are you, Secretary Morgenthau? HMJr: I'm very.... B: This is Bazykin. HMJr: How are you? B: Very well, thank you. HMJr: Mr. Bazykin, I have just talked on the telephone to Ambassador Harriman in Moscow. B: Yes. HMJr: And I inquired from him why we did not have an answer from your Government in regard to this statement on the stabilization of money B: Yes. HMJr: which we hoped to announce Friday night. B: Yes. HMJr: Now, I don't know how familiar you are, but I am testifying before four Committees in the Senate Friday morning. B: Yes. HMJr: And four Committees in the House Friday afternoon. B: Yes. Regraded Unclassified 19 - 2 - HMJr: On this plan. And all of the countries involved have -- we've heard from except your Government and the plan 18 to give out a joint statement in the various Capitols Friday night for Saturday morning's publications. B: Yes, I see. HMJr: And we had hoped very much that your Government would join us. Now, in talking with Mr. Harriman, he says that your Government had not yet heard from your experts, which is very difficult for me to believe. B: I see. HMJr: And B: It was answer to our Government - to Mr. Harriman. HMJr: Yes, that they had not yet had time B: Yes. HMJr: to hear. B: I see. HMJr: And that there were one or two points in dispute. Well, of course, the two statements contradict each other. B: Yes. HMJr: But with everybody going along on this and it's simply a declaration of principles -- I mean, it doesn t bind anybody. You see? . B: Yes. HMJr: I wondered whether you might still have time to get an answer 80 that it would seem that all United Nations were together. B: Yes. Thank you very much, Mr. Secretary, for your calling. I know that the Ambassador communicated with Moscow after our visit with you.... HMJr: Yes. Regraded Unclassified 20 - 3 - B: at the Treasury Department and I will immediately see him and I will regret to inform him what you told me and HMJr: Should I.... B: I am sure that he will undertake what he can do. HMJr: Should I say it once more or did I -- do you understand it? B: No, I understood everything. HMJr: And you see the point is -- well, if you under- stand it -- and if there's any point you don't, Mr. White's available. But there's still time, you see.... B: Yes, sir. HMJr: for us to hear from Russia. B: Yes. HMJr: And -- the Soviet Union. B: Yes..... HMJr: And.... B: ....Mr. Secretary. HMJr: See what you can do. B: And you say that there is an idea to make the declaration -- joint declaration -- in all Capitols of the United Nations? HMJr: We've heard from everybody except your Government. B: I see. HMJr: And the announcement is to be made at eight o'clock Friday night. B: Eight o'clock. HMJr: In this Capitol. Regraded Unclassified 21 4 - B: Yes. HMJr: And it will be made in London and it's going to be made in Canada and it's going to be made in Chungking and a number of other places. They're all going to make a joint announcement. B: Joint announcement at eight o'clock in the morning? HMJr: No, eight o'clock tomorrow night. B: Tomorrow night. HMJr: Now the other thing which is embarrassing to me, you see, I am to appear before these Committees B: Yes. HMJr: in our Senate and in our House tomorrow B: Yes, I remember you told the HMJr: and I B: the Ambassador. HMJr: And I had hoped very much that -- because as far as I know, there's practically no difference. B: Yes. HMJr: And I imagine it's due to difficulties in communica- tion possibly and your Government hasn't been fully informed. But it's something which I should think that the Soviet Union, of all the Countries, would want to subscribe to. B: Yes. HMJr: I mean you get as much out of it, or more, than anybody else. B: Yes. And I will be very glad to inform the Ambassador, Mr. Secretary, and I am sure that he will do everything possible to get.... HMJr: Do you ever use the telephone? B: We do sometimes if assured conditions are not 80 good, but I will ask him Regraded Unclassified 22 - 5 - HMJr: Well, .... B: if he can. HMJr: Well B: If it's not too late. HMJr: Well, the phone -- I was informed -- I didn't know we could talk -- you can talk from nine 'till eleven in the morning. B: Yes. HMJr: And I had an excellent connection with Mr. Harriman. I could hear him almost as well as I can hear you. B: I see. I'll recommend to the Ambassador HMJr: Would you recommend. B: to telephone. HMJr: that he might put in a telephone call tomorrow morning? B: I think BO. Yes, I'll recommend him to call. I think it might be the best way to get Moscow immediately. HMJr: If you would, because as I say it's for the general effect on the world, I think, it's most important that Russia be amongst those. B: Yes, I'll be very glad to inform the Ambassador immediately and I am sure, maybe, he will call. I will advise him. HMJr: And I'm available any time today or tonight if the Ambassador wants to talk to me. B: Yes. Thank you very much. HMJr: I'm available. B: Thank you very much. HMJr: Thank you. B: Thank you. Good bye. 23 - 10 - MR. WHITE: I didn't think that the Ambassador said they hadn't heard from the experts, but that they hadn't time. H.M.JR: Listen, what Harriman said to me was two things - they hadn't heard from their experts, and the last thing he said was, "But there are a couple of points not in agreement." The two things are in conflict. So I said that. MR. LUXFORD: Will we get their conversation if they talk to Moscow? H.M.JR: Yes, through Gaston's office; you can take it up with the censorship people. He is on that Board, I think. MR. WHITE: Their experts are on the spot. If they said they haven't communicated-- H.M.JR: Tell them we think the Ambassador is going to speak to Moscow tomorrow and we would like immediate translation 80 I could have it immediately. MRS. KLOTZ: I don't think they will call. MR. LUXFORD: We will find out whether they call, anyway. H.M.JR: I think through Gaston's office. Now, one other thing while I have you here - with this gold imminently going into Switzerland, and all that, just as soon as you fellows can catch your breath, let's move in on the Argentine. MR. LUXFORD: All right. H.M.JR: I am sick and tired of all this shadow- boxing, because - I know that you will reluctantly go along, but you can overcome it. (Laughter) Regraded Unclassified 24 1. Will the Fund control the gold value of the United States dollar? 2. Would it not be better to wait before attempting to stabilize currencies? 3. Will the Fund be used for the liquidation of blocked sterling balances? 4. Would the British Empire have a larger vote than the United States? 5. Would the United States be bound to stay in the Fund if membership proved disadvantageous? 6. Will the Fund support the price of silver? 7. Would joining the Fund mean that Congress will not have control of our monetary system? 8. Will the United States be forced to institute exchange controls? 9. Does the establishment of the Fund mean the abandon- ment of the gold standard? 10. Why can't the B.I.S. do the job? 11. Will the fund compete with banks on exchange trans- actions? Regraded Unclassified 25 Department OF STATE DIVISION OF COMMUNICATIONS AND RECORDS MEMORANDUM With reference to the Secretary of State's letter of January 1, 1944 there is transmitted herewith a para- phrase of a telegram from Loscow con- tinuing Ambassador Harriman's inter- pretive comment upon developments in and respecting the Soviet Union as reflected in the Soviet Press. o May 2, 1944 HA 26 PARAPHRASE OF TELLGRAM RECEIVED FROM: American Embassy, Loscow TO: Secretary of State, Washington DATED: April 20, 1944 NUMBER: 1369 This report covers the period from March 9 to April 15. Apparently with the general purpose of exhorting the people to increased efforts for the drive for final victory the press continues to concentrate on the war and to publicize accomplishments on the home front as well as the military. Soviet political policy is unfolding, as applied to specific problems of individual countries, with the advance of the Red Army toward and into neighboring countries. The trond of Soviet diplomacy is becoming positive and increasingly active. These developments are in pattern consistent with the basic policies pre- viously outlined by Soviet officials, but the determina- tion and readiness to take independent action in some cases is startling in aggressiveness. Commensurate with its power and with the sacrifices it has made toward winning the war, it is increasingly clear through the announced policies and articles in the press that the Soviet Union intends to play an important role in inter- national affairs. The Soviet Regraded Unclassified 27 -2- The Soviet Union gives no indication that they do not value the relations they have attained with ourselves and the British. It is obvious, on the other hand, that they are unwilling to compromise certain basic principles which they believe are essential to the interests and security of the Soviet. The western boundaries estab- lished in 1940, with the exception of the compromise Curzon line for the boundary with Poland, are, from Finland to the Black Sea, considered fixed and irrevo- cable. Although full opportunity for political expres- sion of the Communist parties appears a fixed objective, any semblance of a cordon sanitaire is to be ended, but confirmation is evidenced by Molotov's announcement re- garding Rumania and exchange of representatives with the Badoglio Government that Communist form of Govern- ments in Europe is not a present objective of the Soviets. (1) In IZVESTIYA'S article of March 29, the Soviet decision to exchange direct representatives with the Badoglio Government was justified as part of the Soviet policy of assisting all movements tending to shorten the war against the German Fascisti. By proventing the unity of all anti-Hitler Italian groups in the struggle against the Hitlerites, the article stated that the political situation in Italy had created disunity which Regraded Unclassified 28 -3- which threatened Italy with disaster and above all tended to prolong the war, Arguing that heretofore the Soviets had lacked adequate representation in Italy in comparison with the Allies, the editorial at the same time indirectly criticised the Allies for allegedly not working out, together with the Soviets, a common policy for Italy. The independent character of Soviet action contra- ry to the spirit of the Moscow understanding was ignored by the Soviet press and an attempt to take leadership in advancing policies that had consistently been those of the Americans and British in Italy and which they had been pressing in full consultation with the Soviets was made by them. (2) In connection with what was designated as the entry of Soviet troops into Rumanian territory, Molotov's statement confirmed that the Soviets had no territorial aims in Rumania and that any attempt to alter the social and political order existing there had not been their intention. Not only in relation to Rumania, but also as an indication of Soviet policy toward neighboring countries in general, this statement was important. Shortly before the statement was made the fact that Great Britain and the United States were informed was an encouraging Regraded Unclassified 29 -4- an encouraging sign of Soviet willingness to collaborate and in previous and subsequent discussions of the Rumanian question this willingness has been further con- firmed. By its reference to the arrival of the Red Army at the "state frontier" at the Pruth, the press at the same time made clear that the Soviet maintained its position on the Soviet Rumanian boundary question and its claim to Bessarabia. (3) The occupation of Hungary was pointed out as a further drain upon German cilitary strength and that by withdrawing forces which might have been used against the Allied invasion in the west new favorable military possibilities for the western Allies were thereby created. The consequences of continued association with Hitlerite Cermany WOS taken as the theme of editorials warning other Axis satellites of a fate similar to that of Hungary. (4) However, without advocating a direct break with the Puric Government, the press carried further its ten- dency to view Tito's movement as virtually a Government in Yugoslavia. Tito was regarded as the only representa- tive of the Yugoslav people in Yugoslavia Ambassador Semic's letter of resignation published by PRAVDA and RED STAR. Attacks even sharper than previously made on Mihailovich 30 ⑉5⑉ Mihailovich and publicity was given the request that Yugoslav funds abroad be frozen which request was made by the Yugoslav Committee. Several speakers placed the London Polish and the Cairo Yugoslav Governments in the same category at the Kosciuszko meeting staged by the Union of Polish Patriots and the All Slav Committee. (E) Although favorable foreign comment on the Soviet offer for peace terms was published there was, during the period under review, little publicity concern- ing Finland. Anxiety upon the part of the Soviets not to prejudice the prospects of peace negotiations was apparent. (6) Toward Poland the attitude remained much the same as stated in my previous report. The Kosciuszko Rebellion's 150th anniversary scainst the Czarist Govern- mont furnished the occasion for stressing the theme that the Union of Polish Patriots, together with Polish forces in the Soviet Union (the latter recently raised to the status of an army and now called "the" Polish Army) wore carrying on the Kosciuszko tradition, while elements such AS Sosnkowski, against whom Kosciuszko had fought, were viewed as continuing the tradition of the reactionary landlords. A report Regraded 31 -6- A report of an article in the LONDON OBSERVER which included statements to the effect that the majority of the Ministers of the London Government realized the necessity of meeting Soviet demands but lacked courage to buck the militarist elements, was published in line with the press policy of hinting periodically at the possibility of some sort of agreement being reached between the Soviets and a reconstructed London Government. To the arrest of Ukrainian soldiers serving the Polish Army in England considerable publicity was given. (7) The call to partisan and underground move- ments in all countries to rise against the Cerman in- vaders continued to be emphasized by the press. Combined with strong hints that the resistance groups were suffering from lack of arms and wore handicapped by an order to await the signal of a general uprising, tributes were paid to French resistance, especially in upper Savoy. Prominent treatment was given the Czech Government's appeal to its people to take action and Pene's letter to Stalin expressing joy at the entry of the Red Army into Czechoslovakian territory. Without comment, General de Gaulle's speech on French unity and the steps taken to strengthen his position 32 -7- position were reported. As 9 model for the treatment of traitors the sentence on Pucheu was applauded. (8) The conclusion of a new fisheries convention between the Soviet and Jap Governments covering EL five year period combined with an agreement with the Japs to liquidate their concessions in northern 3akhalin was an important now development. The connection between this agreement and the "sobriety" which the Japs had acquired with the successful Soviet military operations against Germany was editorially emphasized. In regard to the Japanese evacuation of northern Sakhalin it was pointed out that Matsucka had given an undertaking in April 1941, but it was in the autumn of 1943 that the necessity of undertaking negotiations to carry out these promises was recognized by the Japanese. That the agreements had taken account of the special position of "our Allies" in the Pacific was stated. (9) Mixed was the press comment on Great Britain and the United States. Receiving about as much space and prominence as the war in Italy and the Pacific com- bined, the Allied war effort was a major theme in dealing with Britain and America and special prominence was given to the Allied air war against Germany. Prominence was given Poaradod 33 -b- riven to important declarations of Allied tatesmen and exprossions locking toward future cooperat on with the 11105 In the war and postwar period conti med snd, in general. news from Allied countries was treated sympa- Unusually full, though not complete, coverage was riven tc .r. Hull's radio address of heril S. RED STAR contained & long article cautiously convessing the possibilities for the 1944 American Presi- Cential election, confinire direct comment only to stuto- ments to the effect that Recsevelt's foreign policy had the support of wide soctions of the American people and that the chief problem confronting the United States at present is foreign affairs. Regarding the activities of "Fascist and reactionary" (Teups within the Alliod countries, unxiety was expressed. country Hearst of being in agent of Mtler in America, a 3030 0 Must was delivered by Zuslavski. In WAR VID THE CLASS an article expressed the view that powerful "roups of capitalists In the United States and more es- recially in England were anxious to revive international cartols in which a large rolo has been played by German interests. Tending to keep alive suspicion of Britain was the publication of a second statement by a German prisoner 34 -9- prisoner regarding the exchange of able bodied German military personnel in British hands which permitted them to be sent for service on the eastern front against the Russians. In connection with the Canadian-Soviet supply agree- ment, prominent expressions of good will went to Canada, and to Canada's military and industrial contribution to the Allied war effort warm tribute was paid. (11) The victories of the Red Army and exhortation to increase war production and in other ways help the front were the chief internal themes. In contrast to the emphasis on anonimity which prevailed during the early stages of the war, orders of the day and the award- ing of high decorations to Army officers continued to build up Soviet military leaders in the public eye. HARRIMAN DCR:MAS:EA Regraded Unclassified 35 PARAPHRASE OF TELEGRAM RECEIVED FROM: AMEMBASSY, Moscow TO: Secretary of State, Washington DATED: April 20, 1944 NUMBER: 1370 SECRET HARRIMAN SENDS THE FOLLOWING FOR THE ATTENTION OF THE SECRETARY OF THE TREASURY. As soon as I received your cable of April 17, 1944, No. 938, I requested an immediate appointment with the Peoples Commissar for Finance and I sent the substance of your cable over in writing. Inasmuch as the Commissar was engaged all last night in conference I saw him this afternoon and strongly urged him that the Soviet Government should join in authorizing the statement proposed. I was informed by him that he could not agree to the text of the International Monetary Fund statement being approved by the Soviet expert. The Commissar stated that he had not had an opportunity to hear from his expert regarding the changes which your cable proposed and that in any event there were several points in the previous text to which agreement had not been given by the Soviets. He stated, in reply to my queries, that no provision had been made for the fixing of the parity of the ruble unilaterally by the Soviet Government and that other provisions concerning payments in gold and gold resources in mining countries were not satisfactory Regraded Unclassified 36 - 2 - to them. It was stated by him that he felt it would not be desirable for the text to be released without the Soviet expert's approval. The Commissar was asked by me whether the Soviet Government would agree to publication after these questions of which he spoke had been settled. He stated in reply that he would have to get the approval of his Government before he could answer that question. He clearly indicated by indirection, however, that the Soviet Government was very anxious to have the situation develop in such a way that their expert could join in approving the text of the statement. The Commissar expressed the hope that you would not find it necessary to publish the text without participation by the Soviet Government. It was explained by me that I believed you would have to publish the text as you were appearing tomorrow before Congressional Committees. When I departed I was asked by Mr. Xverev to convey to Mr. White and you his appreciation of the courtesies and hospitality which the Soviet experts in Washington had received. Harriman Regraded Unclassified 37 PARAPHRASE OF TELEGRAM RECEIVED FROM: Moscow DATED: April 20, 10 p.m. NUMBER: 1380 I we.s asked by Molotov to call this evening near midnight and received the following statement from him: Among our financial experts there exists a major discord with respect to the basic conditions of the establishment of the international monetary fund. The objection was made by the majority of our experts to a series of points. Speaking with complete frankness, the Soviet Government has not succeeded in studying yet fully the basic conditions of the proposal. If it is necessary, however, to the Government of the United States of American to have the concurrence of the Government of the Soviet Republic to secure due effect in the rest of the world, theSoviet Government is willing to instruct its experts to associate themselves with Mr. Morgenthau's project. It was explained by Mr. Molotov that this was not to be considered as a reservation made by the experts Regraded Unclassified 38 -2- but for your information, it expressed the actual attitude of the Soviet Government. If you wished it under these circumstances would issue instructions to his experts to associate themselves with the monetary fund statement. Molotov was informed by me that there was not time for me to get a reply from you, and I suggested to him that he give instructions to his experts to associate themselves with the monetary fund statement, provided however, you approved under the circumstances. To this Molotov agreed, and he will instruct his experts on receipt of this cable to get in touch with Mr. White. My suggestion is that you telephone me as early as possible in order to give me advice of your decision so that I may tell Molotov, who said, if you approve, he is prepared to publish the monetary fund statement in Moscow. FMA:EGC:ja Regraded Unclassified April 20, 1944 39 2:13 p.m. HMJr: Hello. Operator: General Greenbaum. There you are. HMJr: Hello. General Greenbaum: Yes, sir. HMJr: Hello, Eddie. G: Yes, Henry. HMJr: Eddie, I got the answer to the request that we made about the possibility of using German prisoners. G: Yes. HMJr: Which I appreciate is the correct answer. G: Yes. HMJr: Now, I want to ask you, a fellow with an original mind, how can we get the results? G: I'm not quite clear exactly what you want to accomplish there. HMJr: Well, let me tell you. I wanted to try it out in one factory. The idea I got is either very good or it's no good. See? G: Yes. HMJr: Now, what I've got in mind is this, I don't think there's one person in ten in this country who really knows what the Nazi system has done to their own people. G: Yes. HMJr: See? And the thing that's bothering me as time comes -- approaches this invasion business and if it's going to be tough, which certainly we have every reason to believe, that this thing called Nazism -- the thing which we've got to exterminate -- that the people in this country aren't prepared, because they really don't know what it 1s. I mean there's a lot of loose talk -- hello? Regraded Unclassified - 2 - G: Yes. HMJr: Now, the thought that I had -- that if -- I know from conversations I've had with you and others, there are amongst these prisoners real Anti-Nazis. G: Yes. HMJr: If one of these men, or two or three, could talk to a group of laboring people -- I mean on the idea of incentive -- and explain to them what Nazism has done to their home -- the question of the Church -- Christianity, and how it has deprived them of all their privileges. You see? And it's something that they hate. It's something that we've got to exterminate, no matter what the cost. Hello? G: Yes. HMJr: Now, every time I've talked to any group, and I've really gotten tough about the enemy -- I'm talking now about labor audiences -- 1s the only time I ever get a hand. And I wouldn't say, "Now, when I get through, won't you please buy a bond?" But I've got the hope that the audience will be angry enough that they'd want to produce more guns and more tanks and buy more bonds. You see? G: Yes. HMJr: Now, I may be entirely wrong. I don't think anybody can tell me until it's tried. I do know that the Germans have an -- I mean the Russians have an organization -- they have the General who defended Stalingrad, or attacked Stalingrad -- I mean, they've got the whole group there, of Germans, in Russia whom they use for propaganda purposes. Now, the Russians are doing it. They go on the air and they certainly got them some way or other. G: That's an entirely different thing because those fellows have sort of pulled themselves away. HMJr: But they must have been prisoners. G: Yes, they were. But that's a deal that they've been working out among themselves. You see, but we'd be handicapped on this business of using the prisoners of war, in the first place, on the Geneva Convention, we'd be tied -- our hands would be tied as far as our ability to do it even though they'd be willing to, because the Germans would Regraded Unclassified 40 - 3 - G: Cont'd. twist that around and there's the possibility of retaliatory measures on our prisoners. That's number one. Number two. You'd have a great reluctance on the part of the German prisoners to do it because none of them want to put them- selves in that category on account of a fear of reprisals to members of their families there and they, themselves HMJr: Why don't you take that candy out of your mouth? G: That's right. HMJr: (Laughs) Or give me a piece 80 I can chew. G: That's just a gulp from a pipe I've been smoking. HMJr: (Laughs) G: I don't think it's do-able at all via prisoners- of-war, but what I would like to do is think it over and talk with Colonel Gough and some of the others and see if we can think of some way in which you can do it. Your objective is a fine one and I think it's something that would be very effective, but I just can't see doing it via the prisoners-of-war. HMJr: Well, look, Eddie, old man, I'm not trying to kid you -- if you agree with me the objective 18 worthwhile trying -- I don't want to try it Coast-to-Coast. I'd like to try it in some isolated place, to see the effect on the audience. You see? G: Yes, I see. HMJr: Test it out and then if the audience reacted well, and you got this general response, "By God, we're going to get mad and we're going to work Sunday and we're going to work Saturday night. We're not going to get drunk. We're really going to do something and we're going to invest our money to the last.... -- I mean, I want to get these people really 80 that they understand this thing, and they don't. G: Well, I've got it. Let me mull over this thing overnight and I'll give you a ring in the morning. Regraded Unclassified - 4 - HMJr: Will you? G: Yes, I will. HMJr: And some way that we can do it legally. G: I understand. HMJr: The Russians have a way. G: Yeah. But there are a little different factors there. I'll talk to Ralph Gough and maybe General Bryan in charge of prisoners-of-war on the thing. HMJr: Thank you. G: Okay. Thanks. Regraded Unclassified 41 SECRETARY'S SCHEDULE APPEARANCE before CONGRESSIONAL COMMITTEES Thursday, April 20 2:00 p.m. - Speaker Rayburn's office Attending: Chairmen of House committees Mr. McCormack, Majority Leader (2) not ettend wey Speaker Rayburn 6 Secretary Morgenthau Mr. Acheson (to go with Treasury group) Mr. Smith Mr. White Mr. O'Connell (Mr. Acheson to be notified by Mr. O'Connell) Friday, April 21 10:00 a.m. - Senator Barkley's office Attending: Mr. Barkley Mr. Connally Mr. Wagner (Same State and Treasury group which attended Thursday's meeting) 10:30 a.m. - Senate Banking Committee Room Attending: Three Senate Committees Secretary Morgenthau Mr. White Mr. Smith Mr. O'Connell Mr. Bernstein Mr. Luxford Mr. Acheson Mr. Collado Mr. Pasvolski 2:00 p.m. - House Banking Committee Room Attending: The 10:30 a.m. group 4:30 p.m. - Secretary's office - Press conference, Mr. Acheson invited Regraded Unclassified 42 April 20, 1944 2:40 p.m. APPEARANCE BEFORE CONGRESSIONAL COMMITTEES Present: Mr. White Mr. O'Connell Mrs. Klotz Mr. Smith H.M.JR: I have seven minutes and I wondered if you thought this would be good bail, for me to cail up Chairman Eccles and say, "Look, Marriner, you weren't here when I opened the meeting and asked, if & man didn't agree, that he would say so publicly." Then I would say, "Now look, Marriner, you would be interested to know that I have just gotten word from the President that if there is 8. meeting, I am going to be Chairman of the delegation, and I hope that you will go along with us sufficiently, because I am looking forward to having you on that delegation." MR. O'CONNELL: I don't know how far-- MR. WHITE: I would say the latter part. I think you are asking him not to say anything against it. I doubt whether he would agree, if you put it that way. If you would say not to say anything against it until he hadbad a chance to talk it over with you-- H.M.JR: What has Eccles done about a public statement? What has he agreed to? MR. SMITH: Luxford was sending that, were you? MR. WHITE: We haven't asked him yet. We thought we would wait until the day before. Regraded Unclassified 43 - 2 - H.M.JR: Eccles is smart. When I say, "I hope you will go along because I am going to be Chairman of the delegation"-- MR. WHITE: That statement, I think, would be a pretty good one to make. H.M.JR: That is pretty much of a bribe. MR. WHITE: I think I would put it, "...because I want you on there and you appropriately belong on there." Then say, coupled with the request not to say any- thing publicly - - I can see your point-- H.M.JR: Maybe you don't have to say the other. MRS. KLOTZ: It all depends on the way you put it. I think you can put it all right. H.M.JR: I can't do it in the next five minutes. MR. WHITE: He is liable to talk long. H.M.JR: No, I have been cutting corners all day long. Look, old man, on the way down, talk to me about this thing. One of the first things I learned in direct mail, never thank a man in advance for something if you are going to ask him & favor. MR. SMITH: I have never even seen it. I have never read it. H.M.JR: I can't get this through War Bonds. Before I do anything, you have got to pass on it. They send twenty-seven thousand telegrams, which I am not going to do. They can go by letter. Twenty-seven thousand telegrams is bad public relations. Regraded Unclassified 44 - 3 - MR. SMITH: That is & lot of them. H.M.JR: Yes, he said SO. It is bad public relations, and the whole thing is bad. I am sorry if War Bonds annoy you (Smith). MR. SMITH: You do want Acheson at your press conference today, don't you? H.M.JR: Yes, I think 80. MR. SMITH: We asked him to come. He is going to check with Mr. Hull. H.M.JR: Is he coming here? MR. O'CONNELL: At a quarter of. MR.SMITH: Do you want to take your speech along with you? H.M.JR: Yes. MR. SMITH: I hope it is done. H.M.JR: Where is Mr. Acheson? MR. WHITE: de will be here at a quarter of. Regraded Unclassified 45 April 20, 1944 4:15 p.m. Re: PRESS CONFERENCE Present: Mr. White Mr. Smith Mrs. Klotz Mr. Luxford Mr. Bernstein Mr. Shaeffer H.M.JR: Charlie, I want you to get this over to State before my press conference. Mr. Hull, Mr. Acheson tells us, doesn't want Dean Acheson to come to the press conference because anything he does, he wants to do himself! Dean said Mr. Hull was very much annoyed because somebody in the State Department made a speech the other day. He doesn't like any publicity in connection with it unless he, Mr. Hull, has it himself. MR. WHITE: Would he have wanted to come up with you to meet these people? H.M.JR: I don't know. MR. WHITE: I mean the leaders? H.M.JR: Maybe. You know this is very unusual. MR. WHITE: Does Hull want to appear before these Committees? H.M.JR: I don't know. Dean said I turned this thing around. Hull doesn't like Berle. He said I turned this around. Hull wants to get the publicity and I don't want to get my name in the paper to get the old man upset in any way. Regraded Unclassified 46 - 2 - He says he is very peculiar. That is why I took Dean for 8. walk. MR. WHITE: I wonder if you would want to call Hull up. H.M.JR: No, I think it is all right. MR. WHITE: We have a Russian delegation. They will have to go back. H.M.JR: You can all go out, but let me read this, please. MR. WHITE: I will be back in a few minutes. H.M.JR: It will be too late. You have me saying something, and I have to settle these things. MR. WHITE: All right. (Mr. White leaves the conference temporarily) H.M.JR: I want those three men in. (Mr. Luxford and Mr. Bernstein enter the conference) H.M.JR: Why do you put more stuff in now at the last minute? MR. SMITH: The only reason is because Smith is on our trail. H.M.JR: You can't answer it. MR. SMITH: But he has a good press. H.M.JR: But you can say things that will get me a bad press. (Mr. White re-entered the conference) Regraded Unclassified 47 - 3 - MR. WHITE: I adjourned the meeting. MR. SMITH: This is the way it was. (Deletes several sentences from the Secretary's draft of statement) H.M.JR: Now the rest is the same? MR. SMITH: Just the same except for some minor things, and the change you made on the last page about Mr. Roosevelt. Now, here was another change you suggested making: "International cooperation on monetary and financial matters is the keystone of successful cooperation on all international and economic problems. Unless we can agree to expand and develop the world economy, few other agree- ments which we might make will or can be effective." H.M.JR: Can I see that, please? MR. SMITH: That was where you got your "keystone" in, remember? H.M.JR: I think that is all right. Anybody not think that is all right - since Hull is so sensitive on the thing? MR. LUXFORD: I think it is very good. MR. WHITE: You might stick in "...the world economy." MR. SMITH: It is in there. H.M.JR: It says, "Unless we can agree to expand and develop the world economy, few other agreements which we might make will or can be effective. MR. WHITE: "Unless we agree to expand world trade and economy" - everybody is in favor of world trade. H.M.JR: "To develop world trade"? MR. WHITE: "...expand world trade." Regraded Unclassified 48 - 4 - MR. SMITH: He wants to put "world trade" as well as "economy." He wants to say "world economy and world trade." MR. BERNSTEIN: "Expand world trade and develop world economy." MR. WHITE: That would be better. H.MJR: Everything else is practically the same? MR. SMITH: Yes. And then the last page is the thing you dictated word for word. H.M.JR: Now, one thing I want to do when this is over. Those telegrams that we have, all these invitations, those all ought to be answered over my signature tomorrow. Do you have anybody in your office can do it? MR. SMITH: I will find somebody. H.M.JR: Tell Charlie to draft some telegrams. MR. SMITH: We have about six more now. H.M.JR: Whatever they are - because Rayburn said to me, "Be sure to let Patman know yourself. So as long as we are going to do it, the more people we are doing a personal favor to, the better. I would like those to go out tomorrow. MR. LUXFORD: How did it go on the Hill? H.M.JR: Very well. Regraded Unclassified april/9,/944 Draft # 1 This is a geat stip forward. &ts 49 metary matters on 1 nosel-war Gentlemen: I am happy to tell you today that the technical experts of thirty United Nations including our own and those of Great Britain have agreed upon a set of basic principles to govern an International Monetary Stabilization Funds # The experts of Representative of some of these nations have prepared a joint statement of the 30 particular principles. I want to call your attention to some of the fact contained in this joint statement, but before I do that, I should like to take a few moments of your time to review with you some of the things that have happened since I last appear before these Committees on October 5 of last year. At that tin I told you I would like to keep you informed of progress, and appreciate accordingly I grateful for this opportunity to bring you up to date. requesentative Shortly after our meeting last October, many of the that existed ther differences of opinion between the exports of this country and those of the United Kingdom were resolved in & cories of between representatives of the two nations. Lord John Maynard Keynes headed a Butick n delegation to this country, and spent a month conferring with representatives of the the Treasury and other governmental departments. Since they returned, correspondence with them has cleared up the remaining points of difference have hear cleaned ap Through conseponders Regraded Unclassified 50 - 2 - In January of this year & delegation came to Washington from the U.S.S.R. and conferences with this group have been and almost continuous up to the present time, Practically no important points of difference remain to be settled between the nepresentatives of our two countries We have been in agreement with the Chinese since before my lact appearance here, the October meeting, and the meetings we have had with them since that time have been called chiefly to keep them up to date. This is also the case with numerous other countries, most of whom were in agreement as early as May and June of last year. Since I last talked to you, we have taken steps in another direction. We have discussed the principles of International Stabilization and World Bank mogiams plans with bankers, labor representatives and other interested groups in Washington, Chicago, Boston, Philadelphia, New York, Richmond and other came major cities. Out of these meetings - people received., great many helpful suggestions and I believe it is safe to say that the vast majority of those who are inclined to look we found favorably upon the principles of controlling currencies and values on an international basis at the Government level, are in fundamental agreement with our plans and principles. marry opposition that we have encountered has been largely the opposition to the basic principle of creating In International Stabilization Regraded Unclassified 51 - 3 - Fund,' and although there seems to be some difference of opinion on this subject among those in control of the central donbt banking systems of the various nations, there is no deviation among the monetary experts of any of the nations, from the convistion that such an international fund is essential if the world economy is not to be threatened after the cessation of and umemhreeaber hositlities, by uncontrolled currencies. To ***** state it briefly, 7he the consensus of these experts is that private investment on a world wide basis is vital to post-war reeovery and reconstruction, and that the stabilization of to this mustment currencies among the United Nations is a necessary prerequisites We cannot expect American business men, nor business men of any nation to take major financial risks without some assurance that his their investments will not be spepardized damaged by fluctuating money values. Having studied the world picture after the last war, these we and all monotary exports are agreed that steps must be taken to prevent, insofar as possible, unavoidable fluctuations of currency; and to prohibit deliberate manipulation of currencies in an effort to repair the fiscal damage done by the war. Insofar as the proposed world bank is concerned, considerable progress has been made since our October 5 meeting. American technical exports men and interested agencies such as the export- import bank, and labor representatives, and other interested Regraded Unclassified 52 - 4 - groups have held conferences in Washington. Representatives of the United Kingdom, of Russia, of China, Cuba, Yugoslavia, and Poland have met to exp lore the problems and projected the solutions as suggeståd in the world bank plan. I can say that there is considerable support for the general principles embodied in the world bank, although no joint statement has yet been agreed upon by these nations. on the would Bank Because these discussions were initiated somewhat later they have not yet been completely finkshed. I can tell you, however, that considerable progress has been made and that we believe we have the basis for agreement among the technical experts of the United Nations. There is every indication now that the technical experts will soon issue a statement of principles setting forth their recommendations on the establishment of a Bank for Reconstruction and Development. All of the countries with whom our technical experts have discussed this problem regard the revival of international investment after the war as essential to the expansion of international trade and the maintenance of a high level of business activity. This will be possible only if steps are taken to encourage and aid private investors in providing an adequate volume of long-term investment capital for productive purposes, Regraded Unclassified 53 - 5 - The discussions we have had contemplate the establishment of 8. Bank for Reconstruction and Development which will facilitate the provision of long-term investment capital through private financial agencies by guaranteeing and participating in loans made by private investors. The Bank would also supplement investment of private financial agencies if this becomes necessary by lending for productive purposes from its own resources when private capital is otherwise not available on reasonable terms. N A full statement of the recommendations of the experts on the establishment of 8. Bank for Reconstruction and Development and of the principles on which such a Bank should be based is still in preparation. It is my hope that this statement of principles will soon be completed and that it will be issued later. Before it is published, I shall inform your committees of the recommendations of the experts of the United Nations. Now I should like to explain some of the basic principles upon which we are all agreed in connection with the International Stabilization Fund. Here are the purposes and policies as set forth in the joint statement: space Regraded Unclassified 54 - 6 - (1) To promote international monetary cooperation through a permanent institution which provides the machinery for consultation on international monetary problems. (2) To facilitate the expansion and balanced growth of international trade and to contribute in this way to the maintenance of a high level of employment and real income, which must be a primary objective of economic policy. (3) To give confidence to member countries by making the Fund's resources available to them under adequate safeguards, thus giving members time to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity. (4) To promote SXXXX exchange stability, to maintain orderly exchange arrangements among member countries, and to avoid competitive exchange depreciation. (5) To assist in the establishment of multilateral pay- ments facilities on current transactions among member countries and in the elimination of foreign exchange restrictions which hamper the growth of world trade. (6) To shorten the periods and lessen the degree of dis- equilibrium in the international balance of payments of 1 member countries. Regraded Unclassified 55 - 7 - The joint statement further explains that All of the United and Associated Nations would subscribe approximately $8 billion to the Fund in the form of gold and local currency. The resources of the Fund would be available under adequate safeguards to help member countries to maintain exchange stability while they correct maladjustments in their balance of payments. Member countries would be able to buy foreign exchange from the Fund with their own currencies, to the extent of their quotas, to meet international payments consistent with the purposes of the Fund. If 8. member country makes use of the Fund in a manner contrary to its purposes and policies, the Fund would give appropriate notice that it would sell additional exchange to the member country only in limited amounts and under specific conditions. The par value of currencies of member countries would be expressed in gold and could be changed only at the request of member countries after consultation with the Fund and with its approval. The Fund would approve a requested change in parity only if it were essential to correct fundamental disequilibrium. Prompt consideration would be given to requests for necessary adjustment of exchange rates. Voting power in the Fund would be closely related to quotas. A member country could withdraw from the Fund immediately by giving notice in writing. Thereafter, the Regraded Unclassified 56 - 8 - reciprocal obligations of the Fund and the country would be liquidated within a reasonable time. Member countries would not allow their exchange rates to fluctuate outside a prescribed range based on the agreed gold parity. They would not impose restrictions on payments for current international transactions or engage in discrimimatory currency practices without approval of the Fund. During the period of transition following the war, member countries would be permitted to retain their exchange controls with the expectation that these would be gradually relaxed. Three years after the establishment of the Fund any member still retaining restrictions inconsistent with these principles would consult with the Fund as to their retention. I am frank to say that in my opinion the agreement of the technical experts to these principles is the most important development on international monetary policy in this generation. The way to prevent a breakdown of currencies and the imposition and retention of restrictive and discriminatory stay exchange measures after the war is by providing now for international cooperation to assure a stable and orderly pattern of exchange rates. The purposes set forth in this Joint Statement have long been the international menetary policies of the United States. For years it has been our objective to have these policies adopted by other countries. We know of no better way of assuring general Regraded Unclassified 57 - 9 - adherence to these international monetary policies than through international cooperation in an International Monetary Fund. if Regraded Unclassified mystlp on 58 we make will n can your required me of The discussions we have had contemplate the establishment of a Bank for Reconstruction and Development which will facilitate the provision of long-term investment capital through private financial agencies by guaranteeing and participating in loans made by private investors. The Bank would also supplement investment of private financial agencies if this becomes necessary by lending for productive purposes from its own resources when private capital is otherwise not available on reasonable terms. A full statement of the recommendations of the experts on the establishment of a Bank for Reconstruction and Development and of the principles on which such a Bank should be based is still in pre- paration. It is my hope that this statement of principles will soon be completed and that it will be issued later. Before it is published, I shall inform your committees of the recommendations of the experts of the United Nations. We believe that it is of the greatest importance that all of the United Nations are in agreement on the best means to deal with these international financial problems after the war. This is concrete evidence that the United Nations can and will work together in establishing a peaceful and prosperous world just as they are now fighting together to destroy tyranny and oppression. believe at cm The tentative proposals that have been under discussion by the technical experts are part of a program for cooperation on international economic problems among the United Nations. The objectives of this program are the expansion and development of international trade, the imperedimion restoration of international investment for productive purposes, the Mentin en the burt in the spectmy point intent 1 Regraded Unclassified 59 - 6 - maintenance of stable and orderly exchanges, and through these means to contribute to a high level of employment and production. The establishment of an International Monetary Fund and a Bank for Reconstruction and Development are important steps in the attainment of the objectives of this broad program. I wan to emphasize again that the discussions up to now have all been of a technical nature and exploratory in character. Whatever has been done represents the views of the technical experts of this country and of other countries that have been 8 tudying these questions. No country, including the United States, will be committed until there has been a formal conference which will draft definite proposals to be sub- mitted to Congress for its action. It is my hope that after studying the recommendations of the technical experts, the governments of the United Nations will come to the conclusion that there is sufficient basis of agreement at a technical level to warrant the convening of a formal conference. I am happy to say that the President has authorized me to state that if a conference is held, the American delegation would pro- bably include representatives of both houses of Congress. Regraded Unclassified Draft #2 4-19-44 60 Gentlemen: I am happy to tell you today that the technical experts of thirty United Nations including our own and those of Great Britain have agreed upon a set of basic principles to govern an International Monetary Stabilization Fund. This is a great step forward. Its importance on post-war monetary matters cannot be overemphasized; and this agreement is a valuable asset, also to those of us who believe that the nations of the world can and will agree on matters that control our international economic and social well-being. This is the first major step to be contemplated in post-war international cooperation; its success to date is, I believe, prophetic. Representatives of some of these thirty nations have prepared a joint statement of the principles which have been agreed upon. I want to call particular attention to some of the facts contained in this joint statement, but before I do that, I should like to take a few moments of your time to re- view with you some of the things that have happened since I last appeared before these Committees on October 5 of last year. At that time, I told you I would like to keep you informed of progress, and accordingly I appreciate this opportunity to bring you up to date. Regraded Unclassified 61 - 2 - Shortly after our meeting last October, a series of conferences were held in which many of the differences of opinion that existed then between representatives of this country and those of the United Kingdom were resolved. Lord John Maynard Keynes headed & British delegation to this country, and spent 8. month conferring with representatives of the Treasury and other governmental departments. Since their return to their own country the remaining points of difference have been cleared up through correspondence. In January of this year a delegation came to Washington from the U.S.S.R. and conferences with this group have been almost continuous up to the present time, and practically no important points of difference remain to be settled. We have been in agreement with the Chinese since before my last appearance here, and the meetings we have had with them since that time have been called chiefly to keep them up to date. This is also the case with numerous other countries, most of whom were in agreement as early as May and June of last year. Since I last talked to you, we have taken steps in another direction. We have discussed the principles of International Stabilization and World Bank programs with bankers, labor Regraded Unclassified 62 - 3 - representatives and other interested groups in Washington, Chicago, Boston, Philadelphia, New York, Richmond and other major cities. Out of these meetings came many helpful that suggestions. I believe it is safe to say that we found the vast majority of those who are inclined to look favorably upon the principle of controlling currencies and values on an international basis at the Government level, are in fundamental agreement with our plans and principles. Any opposition that we have encountered has been largely opposition to the basic principle of creating an International Stabilization Fund, and although there seems to be some difference of opinion on this subject among those in control of the central banking systems of the various nations, there is no doubt among the monetary experts of any of the nations, that such an inter- national fund is essential if the world economy is not to be threatened after the cessation of hostilities, by uncontrolled and uncontrollable currencies. The consensus of these experts is that private investment on a world wide basis is vital to post-war recovery and reconstruction, and that the stabili- zation of currencies among the United Nations is a necessary prerequisite to this investment. We cannot expect American business men, nor business men of any nation, to take major Regraded Unclassified 63 - 4 - financial risks without some assurance that their investments will not be jeopardized by fluctuating money values. Having studied the world picture after the last war, we are all agreed that steps must be taken to prevent, insofar as possible, unavoidable fluctuations of currency; and to prohibit deliberate manipulation of currencies in an effort to repair the fiscal damage done by the war. Insofar as the proposed world bank is concerned, considerable progress has been made since our October 5 meeting. American technical men and interested agencies such as the export-import bank, and labor representatives, and other interested groups have held conferences in Washington. Representatives of the United Kingdom, of Russia, of China, Cuba, Yugoslavia, and Poland have met to explore the problems and projected solutions as suggested in the World Bank Plan. I can say that there is considerable support for the general principles embodied in the World Bank, although no joint statement has yet been agreed upon by these nations. Because discussions on the World Bank were initiated some- what later they have not yet been completely finished. I can tell you, however, that considerable progress has been made and that we believe we have the basis for agreement among the Regraded Unclassified 64 - 5 - technical experts of the United Nations. There is every indication now that the technical experts will soon issue a statement of principles setting forth their recommendations on the establishment of a Bank for Reconstruction and Development. All of the countries with whom our technical experts have discussed this problem regard the revival of international investment after the war as essential to the expansion of international trade and the maintenance of a high level of business activity. This will be possible only if steps are taken to encourage and aid private investors in providing an adequate volume of long-term investment capital for productive purposes. The discussions we have had contemplate the establishment of & Bank for Reconstruction and Development which will facilitate the provision of long-term investment capital through private financial agencies by guaranteeing and participating in loans made by private investors. The Bank would also supplement investment of private financial agencies if this becomes necessary by lending for productive purposes from its own resources when private capital is otherwise not available on reasonable terms. Regraded Unclassified 65 - 6 - A full statement of the recommendations of the experts on the establishment of a Bank for Reconstruction and Development and of the principles on which such & Bank should be based is still in preparation. It is my hope that this statement of principles will soon be completed and that it will be issued later. Before it is published, I shall inform your committees of the recommendations of the experts of the United Nations. Now I should like to explain some of the basic principles upon which we are all agreed in connection with the International Stabilization Fund. Here are the purposes and policies as set forth in the joint statement: (1) To promote international monetary cooperation through a permanent institution which provides the machinery for consultation on international monetary problems. (2) To facilitate the expansion and balanced growth of international trade and to contribute in this way to the maintenance of a high level of employment and real income, which must be a primary objective of economic policy. (3) To give confidence to member countries by making the Fund's resources available to them under adequate Regraded Unclassified 66 - 7 - safeguards, thus giving members time to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity. (4) To promote exchange stability, to maintain orderly exchange arrangements among member countries, and to avoid competitive exchange depreciation. (5) To assist in the establishment of multilateral pay- ments facilities on current transactions among member countries and in the elimination of foreign exchange restrictions which hamper the growth of world trade. (6) To shorten the periods and lessen the degree of dis- equilibrium in the international balance of payments of member countries. The joint statement explains that all of the United and Associated Nations would subscribe approximately $8 billion to the Fund in the form of gold and local currency. The resources of the Fund would be available under adequate safe- guards to help member countries to maintain exchange stability while they correct maladjustments in their balance of payments. Regraded Unclassified 67 - 8 - Member countries would be able to buy foreign exchange from the Fund with their own currencies, to the extent of their quotas, to meet international payments consistent with the purposes of the Fund. If a member country makes use of the Fund in a manner contrary to its purposes and policies, the Fund would give appropriate notice that it would sell additional exchange to the member country only in limited amounts and under specific conditions. The par value of currencies of member countries would be expressed in gold and could be changed only at the request of member countries after consultation with the Fund and with its approval. The Fund would approve 8. requested change in parity only if it were essential to correct fundamental disequilibrium. Prompt consideration would be given to requests for necessary adjustment of exchange rates. Voting power in the Fund would be closely related to quotas. A member country could withdraw from the Fund immediately by giving notice in writing. Thereafter, the reciprocal obligations of the Fund and the country would be liquidated within a reasonable time. Member countries would not allow their exchange rates to fluctuate outside a prescribed range based on the agreed gold parity. They would not impose restrictions on payments for Regraded Unclassified 68 - 9 - current international transactions or engage in discriminatory currency practices without approval of the Fund. During the period of transition following the war, member countries would be permitted to retain their exchange controls with the expectation that these would be gradually relaxed. Three years after the establishment of the Fund any member still retaining restrictions inconsistent with these principles would consult with the Fund as to their retention. I am frank to say that in my opinion the agreement of the technical experts to these principles is the most important development on international monetary policy in this generation. The way to prevent a breakdown of currencies and the imposition and retention of restrictive and discriminatory exchange measures after the war is by providing now for international cooperation to assure a stable and orderly pattern of exchange rates. The purposes set forth in this Joint Statement have long been the international monetary policies of the United States. For years it has been our objective to have these policies adopted by other countries. We know of no better way of assuring general adherence to these international monetary policies than through international cooperation in an International Monetary Fund. Regraded Unclassified 69 - 10 - We believe that it is of the greatest importance that all of the United Nations are in agreement on the best means to deal with these international financial problems after the war. This is concrete evidence that the United Nations can and will work together in establishing a peaceful and prosperous world just as they are now fighting together to destroy tyranny and oppression. And I believe it can be said that international cooperation on this front is the starting point of international cooperation on all fronts. Unless we agree to respect and protect the world economy, few other agreements which we might make will or can be effective. The tentative proposals that have been under discussion by the technical experts are part of & program for cooperation on international economic problems among the United Nations. The objectives of this program are the expansion and development of international trade, the restoration of international invest- ment for productive purposes, the maintenance of stable and orderly exchanges, and through these means to contribute to a high level of employment and production. The establishment of an International Monetary Fund and a Bank for Reconstruction and Development are important steps in the attainment of the objectives of this broad program. Regraded Unclassified 70 - 11 - I want to emphasize again that the discussions up to now have all been of a technical nature and exploratory in character. Whatever has been done represents the views of the technical experts of this country and of other countries that have been studying these questions. No country, including the United States, will be committed until there has been 8. formal conference which will draft definite proposals to be submitted to Congress for its action. It is my hope that after studying the recommendations of the technical experts, the governments of the United Nations will come to the conclusion that there is sufficient basis of agreement at a technical level to warrant the convening of a formal conference. I am happy to say that the President has authorized me to state that if a conference is held, the American delegation would probably include representatives of both houses of Congress. Regraded Unclassified Draft #3 71 4-20-44 Gentlemen: I am happy to tell you today that technical experts of the United Nations have agreed upon a set of basic principles for an International Monetary Stabilisation Fund. This is a great step forward. Its significance can lardly to exaggerated. the It is of greatest importance to all of us who believe that the nations of the world can cooperate in dealing with international economic problems. This is the first major move to be con- sconomic templated in post-war international cooperation; and its success to date is, I believe, prophetic. Technicians representing some of these thirty nations have prepared a. joint statement of the principles which are agreed upon. This statement does not, of course, bind any government to participate in the Stabilization Fund, though it does mean that the Fund will be recommended to each of the governments as a practical means of meeting post-war monetary problems. I want to call particular attention to some of the facts contained in this joint statement, but before I do that, I should like to review with you some of the things that have happened since I appeared before these Committees on October 5 of last year. At that time, I told you I would like to keep you informed of progress, and accordingly I appreciate this opportunity to bring you up to date. Regraded Unclassified 72 - 2 - Since I last talked to you, we have discussed the principles of the International Stabilization program with bankers, labor representatives and other interested groups in Washington, Chicago, Boston, Philadelphia, New York, Richmond and other cities. Out of these meetings came helpful suggestions, many of which were incorporated in our plans. I-might mention one in particular: the Foreign Exchange Committee of the New York market, including representatives of the leading New York banks and one Canadian bank, came to Washington to disouss with ne this tentative proposal. During the conference, they pointed but the desirability of requiring the Fund to give appropriate notice before terminating the right of a member country to purchase foreign exchange for local currency. As a result of this discussion, a basic provision to this end has been in- corporated into the Joint Statement. The vast majority of those with whom we have talked are inclined to look favorably upon the principle of cooperation to maintain stable and orderly exchange rates. Informed opinion seems to point to private investment on & world wide basis as vital to post-war recovery and reconstruction; and the stabili- zation of currencies among the United Nations through the medium of an international fund, is generally believed to be & necessary prerequisite to this investment. I believe we Regraded Unclassified 73 - 3 - cannot expect American business men, nor business men of any nation, to take major financial risks, immediately upon the heels of & catastrophic global war, without some assurance that steps have been taken to prevent their investments from being jeopardized by unduly fluctuating money values, and reverterely respons Having studied the world picture after the last war, we are all agreed that steps must be taken to prevent, insofar as possible, harmful fluctuations of currency; and to prohibit deliberate manipulation of currencies in an effort to secure unfair competitive advantage in world trade. I want to point out that we have kept the interests of the American e conomy very much in mind in planning the type of international cooperation set forth in the statement of prin- ciples. As one might expect, especially in our election year, there is, occasionally, some uninformed comment to the effect that the United States will suffer as a result of International cooperation in the monetary and economic fields. Some suggestion has been heard that we cannot become an important force in world reconstruction without compromising our own sovereignty. I believe it is obvious to all reasonable and informed people that in a world as small as ours has come to be, American Regraded Unclassified 74 - 3a - business, and accordingly, the American economy, cannot move forward while the economies of other nations slip backward. There would be slight advantage in our being the wealthiest nation in the Universe if all the other nations in the world had little or no wealth, and if all the other nations' stan- dards of living were so far beneath our own that international business and commerce would be impossible. Address, There is no reason or logic in the statement that all the other nations in the world can prosper only at our expense; but there is both reason and logic in the assertion that the stability and progress of our own economy can be sabotaged by seriously fluctuating situations in the nations with which we must live and trade. Thus it becomes of vital importance to every nation in the world, including our own, to seek cooperation of all other nations in maintaining steady and dependable monetary and economic policies. That is what we have set out to do. That is all we have set out to do. We have not planned, nor per- mitted to be planned, an international Shave-the-Wealth scheme. When I was here on October 5, I spoke of a projected international bank for reconstruction and development. Because discussions on the Bank were initiated some- what later they have not yet been completely finished. I can Regraded Unclassified 75 - 3b - tell you, however, that there is considerable support for the general principles embodied in the World Bank, and that good progress has been made. We believe that already we have the basie for agreement among the technical experts of the United Nations, All of the international representatives with whom we have discussed the problem of reviving international invest- ment after the war regard the - Bank as essential to the expansion of international trade and the maintenance of a high Regraded Unclassified 76. - 4 level of business activity. They believe it necessary to take steps to encourage and aid private investors in providing an adequate volume of long-term investment capital for productive purposes. The discussions we have had contemplate the establishment of a Bank for Reconstruction and Development which will facilitate the provision of long-term investment capital through private financial agencies by guaranteeing and participating in loans made by private investors. The Bank would also supplement investment of private financial agencies if this becomes necessary by lending for productive purposes from its own resources when private capital is otherwise not available on reasonable terms. & full statement of the recommendations of the experts on the establishment of a Bank for Reconstruction and Development and of the principles on which such a Bank should be based is still in preparation. It is my hope that this statement of principles will soon be completed and that it will be issued later. Before it is published, I shall inform your committees of the recommendations of the experts of the United Nations. Now I should like to explain briefly some of the basic. principles upon which the technicians are agreed in connection Regraded Unclassified 77 - 5 - with the International Monetary Fund. Here are the purposes and policies as set forth in the joint statement: (1) To promote international monetary cooperation through a permanent institution which provides the machinery for consultation on international monetary problems. (2) To facilitate the expansion and balanced growth of international trade and to contribute in this way to the maintenance of & high level of employment and real income, which must be & primary objective of economic policy. (3) To give confidence to member countries by making the Fund's resources available to them under adequate safeguards, thus giving members time to correct maladjustments in their balance of payments without resorting to measures destructive of national OF international prosperity. (4) To promote exhhange stability, to maintain orderly exchange arrangements among member countries, and to avoid competitive exchange depreciation. (5) To assist in the establishment of multilateral pay- ments facilities on current transactions among member Regraded Unclassified 78 - 6 - countries and in the elimination of foreign exchange restrictions which hamper the growth of world trade. (6) To shorten the periods and lessen the degree of dis- squilibrium in the international balance of payments of member countries. The joint statement recommends that all of the United and Associated Nations world subscribe approximately 38 billion to the Fund in the form of gold and local currency. The resources of the Fund would be available under adequate safe- guards to help member countries to maintain exchange stability which they correct maladjustments in their balance of payments. Member countries would be able to buy foreign exchange from the Fund with their own currencies, to the extent of their quotas, to meet international payments consistent with the purposes of the Fund. If a/member country makes use of the Fund in a manner contrary/ to its purposes and policies, the Fund would give appropylate notice that 1t would sell additional exchange to the member country only in limited amounts and under prescribed conditions. The par value of currencies of member countries would be expressed in gold and could be changed only at the request of Regraded Unclassified 79 - 7 - member countries after consultation with the Fund and with its approval. The Fund would approve a requested change in parity only if it were essential to correct fundamental disequilibrium. Prompt consideration would be given to requests for necessary adjustment of exchange rates. Voting power in the Fund would be closely related to quotas. A member country could withdraw from the Fund immediately by giving notice in writing. Thereafter, the reciprocal obligations of the Fund and the country would be liquidated within a reasonable time. Member countries would not allow their exchange rates to fluctuate outside B. pressulbed range based on the agreed gold parity They would not impose restrictions on payments for current international transactions or engage in multiple currency practices without approval of the Fund. During the period of transition following the war, member countries would be permitted to retain their exchange controls with the expectation that these would be gradually relaxed. Three years after the establishment of the Fund any member still retaining restrictions inconsistent with these principles would tonsult with the Fund as to their retention. I am frank to say that in my opinion the agreement of the technical experts to these principles is the most important Regraded Unclassified 80 - 8 - development on international monetary policy in this generation. The way to prevent a breakdown of currencies and the imposition and retention of restrictive and discriminatory exchange measures after the war is by providing now for international cooperation to assure & stable and orderly pattern of exchange rates. The purposes set forth in this Joint Statement have long been the international monetary policies of the United States. For years it has been our objective to have these policies adopted by other countries. We know of no better way of assuring general adherence to these international monetary policies than through international cooperation in an International Monetary Fund. We believe that is is of the greatest importance that all of the United Nations are in agreement on the best means to deal with these international financial problems after the war. This is concrete evidence that the United Nations can and will work together in establishing & peaceful and prosperous world just as they are now fighting together to destroy tyranny and oppression. And ± believe it can be said that international cooperation on this front is the starting point of international cooperation on alledrents. 91 Unless we agree to expand and develop the world economy, few other agreements which we might Regraded Unclassified 81 - 9 . make will or can be effective. The tentative proposals that have been under discussion by the technical experts are part of a program for cooperation on international economic problems among the United Nations. The objectives of this program are the expansion anddevelopment of international trade, the restoration of international invest- ment for productive purposes, the maintenance of stable and orderly exchanges, and through these means to contribute to & high level of employment and production. The establishment of an International Monetary Fund and a Bank for Reconstruction and Development are important steps in the attainment of the objectives of this broad program. I want to emphasize again that the discussions up to now have all been of a technical nature and exploratory in character. Whatever has been done represents the views of the technical experts of this country and of other countries that have been studying these questions. The United States not in any way to committed until Congress has taken action. It is my hope that after studying the recommendations of the technical experts, the governments of the United Nations will come to the conclusion that there is sufficient basis of Regraded Unclassified 82 - 10 - agreement at a technical level to warrant the convening of a formal conference. I am happy to say that the President has authorized me to state that if a conference is held, the American delegation would probably include representatives of both Houses of Congress. Regraded Unclassified Draft #4 Druft stat. before Comp. Come 4-20-44 83 Gentiemen: I am happy to teil you today that technical experts of the United Nations have agreed upon a set of basic principles for an International Monetary Stabilization Fund. This is 8. great step forward. It is of greatest importance to all of us who believe that the nations of the world can cooperate in dealing with international economic problems. This is the first major move to be contemplated in post war international economic cooperation; and its success to date is, I believe, prophetic. ) Technicians representing some of these thirty nations have prepared a joint statement of the principles which are agreed upon. This statement does not, of course, bind any government to participate in the Stabilization Fund, though it does mean that the Fund will be recommended to each of the governments as a practical means of meeting post-war monetary problems. I want to call particular attention to some of the facts contained in this joint statement, but before I do that, I should like to review with you some of the things that have happened since I appeared before these Committees on October 5 of last year. At that time, I told you I would like to keep you informed of progress, and accordingly I appreciate this opportunity to bring you up to date. Regraded Unclassified 84 - 2 - Since I last talked to you, we have discussed the principles of the International Stabilization program with bankers, labor representatives and other interested groups in Washington, Chicago, Boston, Philadelphia, New York, and other cities. Out of these meetings came helpful suggestions, many of which were incorporated in our plans. The vast majority of those with whom we have talked are inclined to look favorably upon the principle of cooperation to maintain stable and orderly exchange rates. Informed opinion seems to point to private investment on a world wide basis as vital to post-war recovery and reconstruction; and the stabili- zation of currencies among the United Nations through the medium of an international fund, is generally believed to be a necessary prerequisite to this investment. I believe we cannot expect American business men, nor business men of any nation, to take major financial risks, immediately upon the heels of a catastrophic global war, without some assurance that steps have been taken to prevent their investments from being jeopardized by unduly fluctuating money values and severe exchange restrictions. Having studied the world picture after the last war, we an effort made are all agreed that shops must be taken to prevent, insofar as Regraded Unclassified 85 - 3 - possible, harmful fluctuations of currency; and to prohibit deliberate manipulation of currencies in an effort to secure unfair competitive advantage in world trade. I want to point out that we have kept the interests of the American economy very much in mind in planning the type of international cooperation set forth in the statement of prin- ciples. As one might expect, especially in our election year, there is, occasionally, some uninformed comment to the effect that the United States will suffer as A result of International cooperation in the monetary and economic fields. Some suggestion has been heard that we cannot become an important force in world reconstruction without compromising our own sovereignty. I believe it is obvious to all reasonable and informed people that in a world as small as ours has come to be, American business, and accordingly, the American economy, cannot move forward while the economies of other nations slip backward. There is no reason or logic in the statement that all the other nations in the world can prosper only at our expense; but there is both reason and logic in the assertion that the stability and progress of our own economy can be sabotaged Regraded Unclassified 86 - 3a - by seriously fluctuating situations in the nations with which we must live and trade. Thus it becomes of vital importance to every nation in the world, including our can, to seek cooperation of all other nations in maintaining steady and dependable monetary and economic policies That is what we have set out to do. That is all we have set out to do. We have not planned nor permitted to be planned, as some commentators would have the American public believe, an international Share the Wealth scheme. When I was here on October 5, I spoke of a projected International bank for reconstruction and development. Because discussions on the Bank were initiated somewhat later they are not yet completely finished. I can tell you, however, that there is considerable support for the general principles embodied in the World Bank, and that good progress has been made. Three The international representati ves with whom we have Prat was discussed the problem of reviving international investment after the was regard the bank as essential to the expansion of international trade and the maintenance of a high Regraded Unclassified 87 - 4 - level of business activity. They believe it necessary to take steps to encourage and aid private investors in providing an adequate volume of long-term investment capital for productive purposes. The discussions we have had contemplate the establishment of a Bank for Reconstruction and Development which will to facilitate the provision of long-term investment capital through private financial agencies by guaranteeing and participating in loans made by private investors. The Bank would also supplement investment of private financial agencies, if this becomes necessary, by lending for productive purposes from its own resources when private capital is otherwise not available on reasonable terms. A full statement of the recommendations of the exports on such the establishment of a Bank, Bank for Reconstruction and Development and of the principles on which such a Bank should be based is still in preparation It is my hope that this statement of by technology principles will soon be completed and that it will be issued later. Before it is published, I shall fully inform your committees. of the recommendations of the experts of the United Nationa. Now I should like to explain briefly some of the basic principles upon which the technicians are agreed in connection Regraded Unclassified 88 - 5 - with the International Monetary Fund. Here are the purposes and policies as set forth in the joint statement: (1) To promote international monetary cooperation through a permanent institution which provides the machinery for consultation on international monetary problems. (2) To facilitate the expansion and balanced growth of international trade and to contribute in this way to the maintenance of a high level of employment and real income, which must be a primary objective of economic policy. (3) To give confidence to member countries by making the Fund's resources available to them under adequate safeguards, thus giving members time to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity. (4) To promote exchange stability, to maintain orderly exchange arrangements among member countries, and to avoid competitive exchange depreciation. (5) To assist in the establishment of multilateral pay- ments facilities on current transactions among member countries Regraded Unclassified 89 - 6 - and to and in countries and in the elimination of foreign exchange restrictions which hamper the growth of world trade. (6) To shorten the periods and lessen the degree of dis- equilibrium in the international balance of payments of member countries. The joint statement recommends that all of the United and Associated Nations subscribe approximately $8 billion to the Fund in the form of gold and local currency. The resources of the Fund would be available under adequate safeguards to help is and to member countries to maintain exchange stability which they correct maladjustments in their balance of payments. Member countries would be able to buy foreign exchange from the Fund in order with their own currencies, to the extent of their quotas, to meet international payments consistent with the purposes of the Fund. The par value of currencies of member countries would be expressed in gold and could be changed only at the request of and approval of member countries after consultation with the Fund and with Les approval. The Fund would approve a requested change in parity only if it were essential to correct fundamental disequilibrium. Prompt consideration would be given to requests for necessary Regraded Unclassified 30 - 7 - adjustment of exchange rates. Member countries would not allow their exchange rates to fluctuate outside a narrow range based on the agreed gold parity. Voting power in the Fund would be closely related to quotas. A member country could withdraw from the Fund immediately and by giving notice in writing, Thereafter, the reciprosal obligations of the Fund country would be liquidated within a reasonable time. During the period of transition following the war, member countries would be permitted to retain their exchange controls with the expectation that these would be gradually relaxed. I am frank to say that in my opinion the agreement of constitute a long slep in the technical experts to these principles A is the way triund to prevent a breakdown of currencies and the imposition and retention of restrictive and discriminatory exchange measures after the Through now we warD by providing now for international postwar cooperation assure a stable and orderly pattern of exchange rates. The purposes set forth in this Joint Statement have long been the international monetary policies of the Unite States. For years it has been our objective to have these policies adopted by other countries. We know of no better way of assuring general adherence to these Regraded Unclassified 91 - 8 - international monetary. policies than through international cooperation in an International Monetary Fund. We believe that it is of the greatest importance that all of the United Nations are in agreement on the best means to deal with these international financial problems after the war. This is concrete evidence that the United Nations can and will work together in establishing a peaceful and prosperous world just as they are now fighting together to destroy tyranny and oppression. International cooperation on monetary and financial matters is the keystone of successful cooperation on all intemational world trade economic problems. Unless we agree to expand and develop the world economy, few other agreements which we might Regraded Unclassified 92 - 9 - make will or can be effective. The tentative proposals that have been under discussion by the technical experts are part of a program for cooperation on international economic problems among the United Nations. The objectives of this program are the expansion and de velopment of international trade, the restoration of international invest- ment for productive purposes, the maintenance of stable and we can orderly exchanges and through these means contribute to a high level of employment and production. The establishment of an International Monetary Fund and a Bank for Reconstruction and Development are important steps in the attainment of the objectives of this broad program. I want to emphasize again that the discussions up to now have all been of a technical nature and exploratory in character. Whatever has been done represents the views of the technical experts of this country and of other countries that have been studying these questions. The United States 15 will not in any way committed until Congress has taken action. It is my hope that after studying the recommendations of the technical experts, the governments of the United Nations will come to the conclusion that there is sufficient basis of Regraded Unclassified 93 - 10 - agreement at a technical level to warrant the convening of a formal conference. I am happy to say that the President has authorized me to state that if a conference is held, it is his intention to invite direct congressional participation in the work of the United States Delegation. Regraded Unclassified 94 Gentlemen: I am happy to tell you today that technical experts of the United Nations have agreed upon a set of basic principles for an International Monetary Stabilization Fund. This 18 a great step forward. It is of greatest importance to all of us who believe that the nations of the world can cooperate in dealing with international economic problems. Technicians representing some of these thirty nations have prepared a joint statement of the principles which are agreed upon. This statement does not, of course, bind any government to participate in the Stabilization Fund, though it does mean that the Fund will be recommended to each of the governments as a practical means of meeting post-war monetary problems. Regraded Unclassified 95 - 2 - I want to call particular attention to some of the facts contained in this joint statement, but before I do that, I should like to review with you some of the things that have happened since I appeared before these Committees on October 5 of last year. At that time, I told you I would like to keep you informed of progress, and accordingly I appreciate this opportunity to bring you up to date. Since I last talked to you, we have discussed the principles of the International Stabilization program with bankers, labor representatives and other interested groups in Washington, Chicago, Boston, Philadelphia, New York, and other cities. Regraded Unclassified 96 - 3 - Out of these meetings came helpful suggestions, many of which were incorporated in our plans. The vast majority of those with whom we have talked are inclined to look favorably upon the principle of co-operation to maintain stable and orderly exchange rates. Informed opinion seems to point to private investment on a world-wide basis as vital to post-war recovery and reconstruction; and the stabilization of currencies among the United Nations through the medium of an international fund, is generally believed to be a necessary prerequisite to this investment. Regraded Unclassified 97 - 4 - I believe we cannot expect American business men, nor business men of any nation, to take major financial risks, immediately upon the heels of a catastrophic global war, without some assurance that steps have been taken to prevent their investments from being jeopardized by unduly fluctuating money values and severe exchange restrictions. Having studied the world picture after the last war, we are all agreed that an effort must be made to prevent, insofar as possible, harmful fluctuations of currency; and to prohibit deliberate manipulation of currencies in an effort to secure unfair competitive advantage in world trade. Regraded Unclassified 98 - 5 - When I was here on October 5, I spoke of a projected International Bank for Reconstruction and Development. Because discussions on the Bank were initiated somewhat later they are not yet completely finished. I can tell you, however, that there 1s considerable support for the general principles embodied in the World Bank, and that good progress has been made. Those with whom we have discussed the problem of reviving post-war international investment regard the Bank as essential to the expansion of international trade and the maintenance of a high level of business activity. Regraded Unclassified 99 - 6 - They believe it necessary to take steps to encourage and aid private investors in providing an adequate volume of long-term investment capital for productive purposes. The discussions we have had contemplate the establishment of a Bank for Reconstruction and Development to facilitate long-term investment capital through private financial agencies by guaranteeing and participating in loans made by private investors. The Bank would also supplement investment of private financial agencies, if this becomes necessary, by lending for productive purposes from its own resources when private capital 18 otherwise not available on reasonable terms. Regraded Unclassified 100 - 7 - A full statement of recommendations on the establishment of such a Bank, and of the principles on which such a Bank should be based, 1s still in preparation by technicians. It is my hope that this statement of principles will soon be completed and that it will be issued later. Before it is published, I shall fully inform your Committees. Now I should like to explain briefly some of the basic principles upon which the technicians are agreed in connection with the International Monetary Fund. Regraded Unclassified 101 - 8 - Here are the purposes and policies as set forth in the joint statement: (1) To promote international monetary cooperation through a permanent institution which provides the machinery for consultation on international monetary problems. (2) To facilitate the expansion and balanced growth of international trade and to contribute in this way to the maintenance of a high level of employment and real income, which must be a primary objective of economic policy. Regraded Unclassified 102 - 9 - (3) To give confidence to member countries by making the Fund's resources available to them under adequate safeguards, thus giving members time to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity. (4) To promote exchange stability, to maintain orderly exchange arrangements among member countries, and to avoid competitive exchange depreciation. Regraded Unclassified 103 - 10 - (5) To assist in the establishment among member countries of multilateral payments facilities on current transactions, and to aid in the elimination of foreign exchange restrictions which hamper the growth of world trade. (6) To shorten the periods and lessen the degree of disequilibrium in the international balance of payments of member countries. Regraded Unclassified 104 - 11 - The joint statement recommends that all of the United and Associated Nations subscribe approximately $8 billion to the Fund in the form of gold and local currency. The resources of the Fund would be available under adequate safeguards to help member countries to maintain exchange stability and to correct maladjustments in their balance of payments. Member countries would be able to buy foreign exchange from the Fund with their own currencies, to the extent of their quotas, in order to meet international payments consistent with the purposes of the Fund. Regraded Unclassified 105 - 12 - The par value of currencies of member countries would be expressed in gold and could be changed only at the request of member countries after consultation and approval of the Fund. The Fund would approve a requested change in parity only if it were essential to correct fundamental disequilibrium. Prompt consideration would be given to requests for nacessary adjustment of exchange rates. Member countries would not allow their exchange rates to fluctuate outside a narrow range based on the agreed gold parity. Regraded Unclassified 106 - 13 - Voting power in the Fund would be closely related to quotas. A member country could withdraw from the Fund immediately by giving notice in writing, and obligations would be liquidated within a reasonable time. During the period of transition following the war, member countries would be permitted to retain their exchange controls with the expectation that these would gradually be relaxed. Regraded Unclassified 107 - 14 - I am frank to say that in my opinion the agreement of the technical experts to these principles constitutes a long step on the way toward preventing a breakdown of currencies and the imposition and retention of restrictive and discriminatory exchange measures after the war. Through international cooperation now we can assure a stable and orderly pattern of post-war exchange rates. The purposes set forth in this Joint Statement have long been the international monetary policies of the United States. For years it has been our objective to have these policies adopted by other countries. Regraded Unclassified 108 - 15 - We know of no better way of assuring general adherence to these policies than through international cooperation in an International Monetary Fund. We believe that it is of the greatest importance that all of the United Nations are in agreement on the best means to deal with these international financial problems after the war. This is concrete evidence that the United Nations can and will work together in establishing a peaceful and prosperous world just as they are now fighting together to destroy tyranny and oppression. International cooperation on monetary and financial matters is the keystone of successful cooperation on all international economic problems. Regraded Unclassified 109 - 16 - Unless we agree to expand world trade and develop the world economy, few other agreements which we might make will or can be effective. The tentative proposals that have been under discussion by the technical experts are part of a program for cooperation on international economic problems among the United Nations. The objectives of this program are the expansion and development of international trade, the restoration of international investment for productive purposes, the maintenance of stable and orderly exchanges. Through these means, we can contribute to a high level of employment and production. Regraded Unclassified 110 - 17 - The establishment of an International Monetary Fund and a Bank for Reconstruction and Development are important steps in the attainment of the objectives of this broad program. I want to emphasize again that the discussions up to now have all been of a technical nature and exploratory in character. Whatever has been done represents the views of the technical experts of this country and of other countries that have been studying these questions. The United States is not in any way committed until Congress has taken action. Regraded Unclassified 111 - 18 - It is my hope that after studying the recommendations of the technical experts, the governments of the United Nations will come to the conclusion that there is sufficient basis of agreement at a technical level to warrant the convening of a formal conference. I am happy to say that the President has authorized me to state that if a conference is held, it is nis intention to invite direct Congressional participation in the work of the United States Delegation. Regraded Unclassified 112 Gentlemen: 19/30/77 I am happy to tell you today that technical experts of the United Nations have agreed upon a set of basic principles for an International Monetary Stabilis tion Fund. This is a great step forward. It 18 of greatest importance to all of us who believe that the nations of the world can cooperate in dealing with international economic problems. Technicians representing some of these thirty nations have prepared a joint statement of the principles which are agreed upon. This statement does not, of course, bind any government to participate International monetary in the St billeation Fund, though it does mean that the Fund will be recommended to each of the governments as a practical means of meeting post-war monetary problems. Regraded Unclassified 113 - 2 - I want to call particular attention to some of the facts contained in this joint statement, but before I do that, I should like to review with you some of the things that have happened since I appeared before these Committees on October 5 of last year. At that time, I told you I would like-to keep you informed of progress, and accordingly I appreciate this opportunity to bring you up to date. Since I last talked to you, we have discussed the principles of the International Stabilization program with bankers, labor representatives and other interested groups in Washington, Chicago, Boston, Philadelphia, New York, and other cities. Regraded Unclassified 114 - 3 - Out of these meetings came helpful suggestions, many of which were incorporated in our plans. The vast majority of those with whom we have talked are inclined to look favorably upon the principle of co-operation to maintain stable and orderly exchange rates. Informed opinion seems to point to private investment on a world-wide basis as vital to post-war recovery and reconstruction; and the stabilization of currencies among the United Nations through the medium of an International fund, 18 generally believed to be a necessary prerequisite to this investment. Regraded Unclassified 115 - 4 - I believe we cannot expect American business men, nor business men of any nation, to take major financial risks, immediately upon the heels of a catastrophic global war, without some assurance that steps have been taken to prevent their investments from being jeopardized by unduly fluctuating money values and severe exchange restrictions. Having studied the world picture after the last war, we are all agreed that an effort must be made to prevent, insofar as possible, harmful fluctuations of currency; and to prohibit deliberate manipulation of currencies in an effort to secure unfair competitive advantage in world trade. Regraded Unclassified 116 - 5 - When I was here on October 5, I spoke of a projected International Bank for Reconstruction and Development. Because discussions on the Bank were initiated somewhat later they are not yet completely finished. I can tell you, however, that there is considerable support for the general principles embodied in the World Bank, and that good progress has been made. Those with whom we have discussed the problem of reviving post-war international investment regard the Bank as essential to the expansion of international trade and the maintenance of a high level of business activity. Regraded Unclassified 117 - 6 - They believe it necessary to take steps to encourage and aid private investors in providing an adequate volume of long-term investment capital for productive purposes. The discussions we have had contemplate the establishment of a Bank for Reconstruction and Development to facilitate long-term investment capital through private financial agencies by guaranteeing and participating in loans made by private investors. The Bank would also supplement investment of private financial agencies, if this becomes necessary, by lending for productive purposes from its own resources when private capital 18 otherwise not available on reasonable terms. Regraded Unclassified 118 - 7 - A full statement of recommendations on the establishment of such a Bank, and of the principles on which such a Bank should be based, is still in preparation by technicians. It is my hope that this statement of principles will soon be completed and that it will be issued later. Before it is published, I shall fully inform your Committees. Now I should like to explain briefly some of the basic principles upon which the technicians are agreed in connection with the International Monetary Fund. Regraded Unclassified 119 - 8 - Here are the purposes and policies as set forth in the joint statement: (1) To promote international monetary cooperation through a permanent institution which provides the machinery for consultation on international monetary problems. (2) To facilitate the expansion and balanced growth of international trade and to contribute in this way to the maintenance of a high level of employment and real income, which must be a primary objective of economic policy. 120 - 9 - (3) To give confidence to member countries by making the Fund's resources available to them under adequate safeguards, thus giving members time to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity. (4) To promote exchange stability, to maintain orderly exchange arrangements among member countries, and to avoid competitive exchange depreciation. Regraded Unclassified 121 - 10 - (5) To assist in the establishment among member countries of multilateral payments facilities on current transactions, and to aid in the elimination of foreign exchange restrictions which hamper the growth of world trade. (6) To shorten the periods and lessen the degree of disequilibrium in the international balance of payments of member countries. Regraded Unclassified 122 - 11 - The Joint Statement recommends that all of the United and Associated Nations subscribe approximately $8 billion to the Fund in the form of gold and local currency. The resources of the Fund would be available under adequate safeguards to help member countries to maintain exchange stability and to correct maladjustments in their balance of payments. Member countries would be able to buy foreign exchange from the Fund with their own currencies, to the extent of their quotas, in order to meet international payments consistent with the purposes of the Fund. Regraded Unclassified 123 - 12 - The par value of currencies of member countries would be expressed in gold and could be changed only at the request of member countries after consultation and approval of the Fund. The Fund would approve a requested change in parity only if it were essential to correct fundamental disequilibrium. Prompt consideration would be given to requests for necessary adjustment of exchange rates. Member countries would not allow their exchange rates to fluctuate outside a narrow range based on the agreed gold parity. Regraded Unclassified 124 - 13 - Voting power in the Fund would be closely related to quotas. A member country could withdraw from the Fund immediately by giving notice in writing, and obligations would be liquidated within a reasonable time. During the period of transition following the war, member countries would be permitted to retain their exchange controls with the expectation that these would gradually be relaxed. Regraded Unclassified 125 - 14 - I am frank to say that in my opinion the agreement of the technical experts to these principles constitutes a long step on the way toward preventing a breakdown of currencies and the imposition and retention of restrictive and discriminatory exchange measures after the war. Through international cooperation now we can assure a stable and orderly pattern of post-war exchange rates. The purposes set forth in this Joint Statement have long been the international monetary policies of the United States. For years it has been our objective to have these policies adopted by other countries. 126 - 15 - We know of no better way of assuring general adherence to these policies than through international cooperation in an International Monetary Fund. We believe that it is of the greatest importance that all of the United Nations are in agreement on the best means to deal with these international financial problems after the war. This is concrete evidence that the United Nations can and will work together in establishing a peaceful and prosperous world just as they are now fighting together to destroy tyranny and oppression. International cooperation on monetary and financial matters is the keystone of successful cooperation on all international economic problems. Regraded Unclassified 127 - 16 - Unless we agree to expand world trade and develop the economic world economy, few other agreements which we might make will or can be effective. The tentative proposals that have been under discussion by the technical experts are part of a program for cooperation on international economic problems among the United Nations. The objectives of this program are the expansion and development of international trade, the restoration of international investment for productive purposes, the maintenance of stable and orderly exchanges. Through these means, we can contribute to a high level of employment and production. Regraded Unclassified 128 - 17 - The establishment of an International Monetary Fund and a Bank for Reconstruction and Development are important steps in the attainment of the objectives of this broad program. I want to emphasize again that the discussions up to now have all been of a technical nature and exploratory in character. Whatever has been done represents the views of the technical experts of this country and of other countries that have been studying these questions. The United States is not in any way committed until Congress has taken action. Regraded Unclassified 129 - 18 - It is my hope that after studying the recommendations of the technical experts, the governments of the United Nations will come to the conclusion that there is sufficient basis of agreement at a technical level to warrant the convening of a formal conference. I am happy to say that the President has authorized me to state that if a conference is held, it is his intention to invite direct Congressional participation in the work of the United States Delegation. Regraded Inclassified 130 April 20, 1944 Harry White. Secretary Morgenthau. Please write a letter for me to sign to Ambassador Winant thanking him for the assistance he has given us this last week with the English on this monetary matter. I call him Gil 80 address it, "Dear G11". Letter in -4/21/44- Pogradod 131 TREASURY DEPARTMENT 4th INTER OFFICE COMMUNICATION DATE April 20, 1944 TO Secretary Morgenthau FROM Charles Bell pull Of approximately 11,000 males between 18 and 37 inclusive, employed in the Treasury Department, there were as of March 15, 1944, 340 deferred from military service on occupational grounds. Of this number 118 deferments were made at the request of the Department. of the 118 cases deferred at the Department's request one falls in the 18 to 25 age group; six in the 26 to 29 age group; and 111 in the 30 to 37 age group. The remaining 222 were deferred by local draft boards without the request of the Department. It is likely that in many of these cases the draftee sought occupational deferment direct. In this group five fall in the 18 to 25 age group; 29 in the 26 to 29 age group; and 188 in the 30 to 37 age group. As you know draft boards are being notified that the Department does not request deferment on occupational grounds in these cases; however, before such letters go to the draft boards our bureaus have an opportunity to review each case and make a decision then as to whether or not it is desired to recommend deferment. Regraded Unclassified 132 Mr. Charles Bell, April 20, 1944. Mrs. Doyle. Secretary Morgenthau. What would you think of offering prizes to the employee of the Treasury who makes the best suggestion along the following lines: namely, that by increasing the comfort of the employee and lessening the strain, we can at the same time increase the efficiency of any particular group? Think that over and I would be glad to give small monetary prizes out of my own-pocket. After you have thought it over, the two of you might come to see me. I got this idea from reading Mrs. Doyle's memorandum. 1C 9 a 5/15 3^ 5/20 report reportes Pall to be will pay When who Regraded Unclassified 133 April 20, 1944. Dear Harry: As you undoubtedly know, the Fifth War Loan will open June 12 and extend through July 8. Our over-all goal of $16 billion is larger than that for any previous drive, and we must also sell a greater portion than ever before, $6 billion, to individuals. The close cooperation of the War Department in former loan drives has been of great value. During the Fourth War Loan, our six million volunteers, who sold more than 69 million separate War Bonds to indi- viduals, were assisted immeasurably by Army shows, bands, speakers and exhibits of equipment. I should appreciate it very much if you would be willing to issue an order or directive, similar to that issued for the Fourth War Loan drive, on coopera- tion between the War Department and the War Finance Program. The assignment to the War Bond Program of a liaison officer in each of the nine Service Commands was most helpful, so I hope that this arrangement can be continued in the forthcoming drive. As before, we will undertake to channel to the Commanding General of each Service Command all requests from State or local War Finance Committees for Army cooperation. Sincerely, (Signed) Henry Morgenthan, Jr. The Honorable Henry Stimson, Secretary of War, Washington, D. C. Regraded Unclassified 134 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE April 20, 1944 TO Secretary Morgenthau FROM Fred Smith Wright Patman respectfully requests that if possible we make the Texarkana speech on Monday night instead of Sunday night. He says Texarkana is in the middle of the Bible belt and he is afraid there will be various reactions from the preachers if we competed with the churches for attention. Gamble says he has no serious objections to switching it. My own feeling is that if the people down there are so faithful to the church they wouldn't even hear a broadcast on Sunday night and maybe for that reason, the switch is a good idea anyway. That would put the opening speech on Monday, June 12. Regraded Unclassified 135 April 20, 1944 Mr. Blough Secretary Morgenthau In reply to your memorandum dated April 20th on taxation, Point Two, if there is any business in the United States which can stand & 80% tax, it is the cabarets. I, therefore, would like the Treasury position to be that we are in favor of keeping the rate at its present level. Regraded Unclassified Treasury Department 136 Division of Tax Research O Date April 20,1944 To: Miss Chauncey From: Mr. Blough Please have brought to the Secretary's attention that his consideration of Point 2 is desired. RB a - 2 i2 L 2 be Y is / - is 30% Le to Cal V , F. 2 d \ C Regraded Unclassified 137V April 20, 1944 MEMORANDUM FOR THE SECRETARY Subject: Taxation Your consideration of Point 2 1s requested. No immediate action required. 1. The Committee on Waye and Means met at 10:00 A.M., Wednesday, April 19th. After discussion of possible alternative rate schedules the Committee voted on motion of Mr. Cooper to accept the previously adopted surtax rate schedule appearing in the Bill. Reading of the Bill was then resumed but not completed. No further controversial issues arose. The Committee is meeting again Thursday, April 20 at 10:00 A. M. 2. Congressman Knutson is planning to introduce a resolution to lower the tax on cabarets from 30 percent to 10 percent. Prior to the Revenue Act of 1943 the cabaret tax was 5 percent of the total charge including food. That Act increased the rate to 30 percent, whereas other luxury items were increased from 10 percent to 20 percent. Under the impact of the heavy tax some cabarets are going out of business, while others are changing the methods of operation to escape or minimize the tax. The Treasury will undoubtedly be asked for its atti- tude toward the proposed reduction. Mr. Surrey and I are discussing the matter with Mr. Bell, Mr. Gaston, and Mr. Sullivan. It may have political implications out of proportion to the revenue involved. 3. In accordance with my earlier memorandum, the interdepartmental group discussing tax incentives in the postwar period is meeting this afternoon from 2 to 4 P. M. in Room 220. RoyBlough 138 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE April 20, 1944 TO Secretary Morgenthau FROM Mr. Haas AR This memorandum was prepared by Henry Murphy in response to your request for a short version of & previous memorandum on the same subject. We have reviewed with you orally in conferences in your office all the materials contained in the memorandum. 139 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE APR 20 1944 TO Secretary Morgenthau FROM Mr. Hass Subject The Federal Reserve Ratio Under existing statutes, the ability of the Federal Reserve System to support the market for United States securities and the credit structure generally 1s determined primarily by the Federal Reserve ratio -- 1.e., the ratio of gold and "lawful money" combined held by the Federal Reserve Banks to their combined note and deposit liabilities. This ratio has a legal minimum of about 37 or 38 percent, the exact figure depending upon a variety of circumstances. If the ratio should fall below this legal minimum, addi- tional credit could be extended by the Federal Reserve Banks only pursuant to an emergency suspension of requirements by the Board of Governors. Such a suspension would be subject to a penalty tax and would have to be renewed by the Board at fifteen-day intervals -- conditions which might make it difficult or impossible to maintain an orderly market in United States securities. The fluctuation of the Federal Reserve ratio yearly since the establishment of the System and monthly since the beginning of 1940 18 shown on the accompanying chart. The ratio has declined from 91 percent at the end of 1942 to 63 percent at the end of February of this year. This decline will probably continue at about the present rate for the duration of the war and for some time thereafter, unless some definite monetary move is made to check it. As indicated on the chart, we esti- mate that it will have fallen to about 48 percent by the end of this year. It 1s clear that the ratio will not reach or closely Federal Reserve System need not stint in its support of the approach the legal minimum this year. Until it does, the Government security market. It is likely, however, that as the ratio approaches, and perhaps falls below, 50 percent during the year, it will excite increased comment and some ability of the Treasury and the Federal Reserve System to skepticism on the part of the market with respect to the maintain their present support of the Government security market. Any such skepticism should be met with an expres- sion of confidence in the continuance of this ability. Regraded Unclassified Secretary Morgenthau - 2 There are & number of measures which might be taken under existing law to increase the Federal Reserve ratio. The most important of these measures would be the issuance of Federal Reserve Bank notes in lieu of Federal Reserve notes. Federal Reserve Bank notes require no reserve; and if their issuance should be substituted generally for that of Federal Reserve notes, the problem of the Federal Reserve ratio would be solved for the duration of even a long war. The issuance of Federal Reserve Bank notes is authorized by law without limit as to amount. None have been issued since 1933, however, except for about $660 millions issued during the past year. The issuance of these notes -- and more particularly the somewhat unorthodox manner in which they were issued -- precipitated a storm of protest, and a bill to pre- vent their further issuance passed the Senate last May and 18 now pending (inactive) in the House Banking and Currency Com- mittee. Under these circumstances, it would probably be inadvisable to issue additional Federal Reserve Bank notes this year. The issuance of these notes might be well received next year, however, 1f the need for it 18 carefully explained and the manner of issuance 18 altered to meet the criticism directed at last year's operation. If this should prove to be the case, no other action would need to be taken for the duration in order to maintain the Federal Reserve ratio. Aside from the issuance of Federal Reserve Bank notes, the principal steps which could be taken under existing statutes to check the decline of the Federal Reserve ratio are the fol- lowing: (1) Reduce member bank reserve requirements (2) Monetize additional silver (3) Use gold in Stabilization Fund None of the above measures would do more than check the decline in the ratio for a few months, however. The most potent of them, & reduction of member bank reserve requirements to the statutory minima, would only offset the decline in the ratio for about seven months. Finally, in addition to remedies available under present statutes, there remains the possibility of seeking an altera- tion of existing law. Such legislation might be obtained next spring, by which time the necessity for action will probably be clearer to Congress. Attachment Regraded Unclassified 140 RATIO OF RESERVE HELD TO COMBINED DEPOSIT AND NOTE LIABILITIES OF FEDERAL RESERVE BANKS PERCENT PERCENT PERCENT End of Year End of Month 110 110 110 100 100 100 90 90 90 80 80 80 70 70 70 60 60 60 50 50 50 48.2 Est 48.2 Est 40 40 40 30 30 30 20 20 20 10 10 10 o 0 O 1914 19 24 29 34 39 44 1940 1941 1942 1943 1944 Office of the Secretary of the Treasury F-329 Division of Research and Statistics Regraded Unclassified TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE April 20, 194 Secretary Morgenthau H. D. White Increase in the Earnings of Banks and All Active American Corporations Since 1932. net earnings after taxes of all national banks and ber banks, recovering from the $255 million deficit climbed gradually to an annual level of nearly $350 in the prewar years 1939 to 1940, but shot up rapidly to $563 million, 8.8 shown in the following table: Net Earnings of All National Bank and State Member Banks (in millions of dollars) Calendar Year Before Taxes After Taxes 1932 -$188 (deficit) $255 (deficit) 1937 423 $337 1938 347 265 1939 432 347 1940 449 349 1941 519 390 1942 532 383 1943 758 563 The earnings after taxes of all active American corpora- rose from a deficit of $5,462 million in 1932 to profits 655 million in 1940. The rise in their profits was very after 1940 and rose to more than $8,500 million in 1943, hown in the following table: Net Earnings of All American Corporations (in millions of dollars) Calendar Year Before Taxes After Taxes 1932 -$5,187 (deficit) -$5,462(deficit) 1937 5,148 3,872 1938 2,340 1,480 1939 5,272 4,040 1940 7,204 4,655 1941 14,107 6,941 1942 19,850 8,100 1943 22,000 8,550 Regraded Unclassified 142 VICTORY TREASURY department BUY VRITED STATES WAR PROCUREMENT DIVISION BONDS STAMPS WASHINGTON 25 ICE OF THE DIRECTOR April 20, 1944 MEMORANDUM TO THE SECRETARY: Representatives of the Treasury Procurement Division, the Surplus War Property Administration, and the Federal Works Agency met with representatives of the manufacturers and distributors of construction equipment for the purpose of exchanging ideas with regard to the disposal of such equipment when it becomes surplus as a result either of no further need on the part of the armed forces, or of con- tract terminations. A conference was held with Mr. Charles Bell to dis- cuss the type of personnel and proposed classifications for the field organizations to handle the recording and accountability control of surplus property by means of the I.B.M. system. The personnel program was approved. Steps are being taken to complete promptly the manual which will provide guidance in this work and to recruit the necessary personnel. A conference has been arranged with representatives of OPA, RFC, and the Procurement Division for Saturday after- noon to establish the price ceiling for sales of passenger vehicles to dealers. A report will be submitted to you as to the outcome. Offers received for the motorcycles are now being analyzed and will be reported in 8. day or two. GAMEN Clifton.E. Mack Director of Procurement Regraded Unclassified 143 Treasury Department Division of Monetary Research Date April 20 1944 To: Mrs. McHugh I informed Secretary Morgenthau that Mr. Friedman was leaving by plane at eleven o'clock today and therefore would not be able to go to New York to talk with Governor Lehman unless the Secretary wished Mr. Friedman to delay his trip. Secretary Morgenthau sug- gested that Mr. Friedman telephone Governor Lehman, to find out what he had in mind. Mr. Friedman telephoned him this morning and spoke to him at some length. H.D.W. MR. WHITE Branch 2058 - Room 214-1/2 Regraded Unclassified white 144 ),072.90 C UNITED NATIONS 1 8m RELIEF AND REHABILITATION ADMINISTRATION none 1344 CONNECTICUT AVENUE WASHINGTON 25. D. C. New York, N.Y. April 17, 1944 Personal Dear Henry, I am just in receipt of your letter of April 13, which was forwarded to me from Washington. I am still at Doctors Hospital where I still continue to have treatment for my leg which I think 1s slowly improving. I am sorry that Harold Glasser is not available. I am sure, however, that Mr. Friedman on his arrival in Cairo can be of very substantial value in exploring the whole subject of currency and price control which I think 1s one of the most important matters with which the British and we will have to deal in any Balkan undertaking. I would very much like to see Mr. Friedman in Washington or here before he leaves for Cairo. My plans with regard to returning to Washington are still indefinite. I will, however, probably be here in New York for the balance of this week and hope to get to Washington early next week. On my return to Washington I think I shall go for a few days either to Walter Reed or the Naval Hospital for further treatment. When Mr. Friedman's plans with regard to leaving for the Middle East are settled I would appreciate it if he would telephone me and I can then arrange for a specific time to see him either here or in Washington. Thanks ever 80 much for letting me know about Glasser and Mr. Friedman's plans. It was grand seeing you and Ellie at the hospital a few days ago. I hope to see you soon after my return to Washing- ton. With affectionate greetings to you and Ellie in which Edith joins me, I am Very sincerely yours, Herber Honorable Henry Morgenthau, Jr. N3 876 Secretary of the Treasury, Washington, D.C. Regraded Unclassified 145 TREASURY DEPARTMENT an INTER OFFICE COMMUNICATION DATE TO Secretary Morgenthau April 20, 1944 FROM Joseph J. O'Connell, Jr. For your information (Argentine gold shipment) As I understand it, the only practical way of preventing the shipment of gold from Argentine to Switzerland is through use of the British navicert system. At our request, the State Department has advised the British that this Government does not favor the proposed shipment, and has requested that the British not issue a navicert for it without prior consultation with us. Our information is that the British have not yet replied. The State Department and the British both know our position in the matter, and presumably the latter will not move to permit the shipment without talking with us. In any event, it is 8. little too early to approach State again, though we will do so within the next week if we haven't heard from them in the meantime. Regraded Unclassified 146 April 20, 1944 Mr. 0'Connell Secretary Morgenthau I have read your memorandum about a shipment of gold from the Argentine. It is not quite clear to me from your memorandum whether this shipment has definitely been held up by the State Department or not. I'd like a clearer memorandum and I positively want to do everything within our power to stop this shipment of gold from Portugal Agentina? to Switzerland. Undoubtedly it's a German account; at least, that is my strong suspicion. Finished. See 1)commells memo memo/4/2014- Regraded Unclassified 147 EXECUTIVE OFFICE OF THE PRESIDENT WAR REFUGEE.BOARD 14 INTER-OFFICE COMMUNICATION DATE April 20,1944 TO Secretary Morgenthau FROM J.W. Pehle For your information: Apparently the possibility of having Corcoran go to Spain for the War Refugee Board is still not dead. I talked to Corcoran yesterday and he said that he had an appointment to discuss the matter with the President just before the President went away, but the appoint- ment was cancelled at the last minute. Corcoran said he would see the President when he gets back and will ask him whether he is to go to China or Spain. McDonald is coming down to see me next week. I have real doubts as to whether he could crack the Spanish situation however. John 148 April 20, 1944. Regraded Unclassified AMREP, ALGIERS. 1202, Twentieth. Agreement has been reached in principle between American and British Governments to transfer to UNERA full responsibility for operation and maintenance of refugee camp at Fedhala near Casablance. Detailed arrangements as to transfer of responsibility are now being worked out. It is proposed that the American and British Governments should retain responsibility of transporting refugees to North Africa and that UNRRA's primary responsibility would be to maintain refugees after their arrival in North Africa. Responsibility for eventual resettlement of refugees not to be repatriated will remain unchanged, although under terms of UNRRA Agreement UNRRA will assist in repatriation of refugees who are to return to their original countries. Effective date of transfer will occur after appropriation by United States Congress of funds for contribution to UNRRA, which is expected before the middle of June. UNRRA is instructing Beckelman to take up with French authorities in Algiers with respect to proposed transfer in order to obtain their consent as required. by UNRRA Agreement to operations in French territory. You are requested to join with Beckslman in discussions with the French to the extent necessary, although, since French Committee is genber of UNRRA, the initial approach should be made by Beckelman on behalf of UMRRA. UNRRA has informally notified French representatives how of these plans. It is understood that the British Govern- ment is issuing similar instructions to Algiers. HULL (DA) LASEGN:MKG 4/18/44 VS WRB Accompanied by hectograph. April 20, 1944. 149 CABLE TO CAIRO From War Refugee Board to MacVeagh Reference your no. 88 of April 13, 1944. War Refugee Board is extremely interested in project involving escape of Jews from occupied terri- tory to Italy and Mediterranean region. Please advise War Refugee Board of any further developments in this situation, particularly result of mentioned approach to Tito. Board is prepared to arrange for any assis- tance, including funds. April 20, 1944 3:00 p.m. fh; jbj; jwp Regraded Unclassified 150 TELEGRAM SENT This telegram must be April 20, 1944 paraphrased before being communicated to anyone midnight other than a Governmental agency. (BR) RESTRICTED AMEMBASSY, LONDON. 3169 FOR THE AMBASSADOR. Reference your no. 2696 of April 3, 1944 concerning relief to refugees in Rome. War Refugee Board has been advised by representative of American Jewish Joint Distribution Committee in Portugal that 1,400,000 lire have already been borrowed in Rome against the $20,000 credit established in London. War Refugee Board is discussing with Apostolic Delegate in Washington possibility of making future remittances for this program direct from United States through Vatican channels. American Jewish Joint Distribution Committee is prepared to make further sums available for this relief work but will wait outcome of aforementioned discussions. HULL (GLW) HULL WRB :GLW:KG BC SE WT S/CR 4/20/44 Regraded Unclassified 151 PARAPHRASE OF TELEGRAM RECEIVED FROM: American Embassy, London TO: Secretary of State, Washington DATED: April 20, 1944 NUMBER: 3233 SECRET In accordance with the request contained in the Depart- mont's 3005, April 18, we immediately sought cansent of the British Government. The head of the Relief Section in NEW was simultaneously appreach because of the urgency of the matter. Even though the reply of the British Government is not yet available, we find the opinion of the cited Section Head (w. he Camps who in Greek relief matters is the most influential British efficial) is agreeable to diverting of a Swedish ship engaged in Greek relief, the choice to be left to the Svedes though the BARDALAND seens likely and conditional on Russian and German naval and air safe conducts; but to any appreach mde to Germany before the departure from the Baltic (schedule for April 25 or 26) of the last of the three addi- tiomal and two replacing Svedish ships approved by the Germans for the Greek relief fleet, Camps is emphatic that whatever anticipatory arrangements be made he would object stremously. Shall I guide my discussion with the Swedish Minister in the same sense, if this proves to be the line taken by the British when their reply is received? Valuable time my be saved by your advance instructions. Both the Foreign Office and the Ministry of War Transport were appreach by us upon receipt of the Department's cable of March 31, No. 2516. Instructions have gone forward to Gibson Graham which are generally favorable, according to an informal statement made yesterday by latter Ministry. WINANT Regraded Unclassified 152 PARAPHRASE OF TELEGRAM RECEIVED FROM: The American Minister, Helsinki TO: The Secretary of State, Washington DATE: April 20, 1944 NUMBER: 341 SECRET The following Message is for the War Refugee Board. Along the lines of my message number 303 dated April 3 I have had some further informal discussion regarding refugee questions and with reference to the intentions of the Board in respect to Finland, I would appreciate some guidance. It is my belief that the Government of Finland would issue a declaration of its willingness to facilitate the movement of refugees as envisaged in airgram from the Department dated 7:30 p.m., February 29, paragraph 6. The political implica- tions involved will, however, be overlooked by the Department. The Government of Finland may sooner or later link the welfare of its three hundred thousand Karelians who in all probability would leave the area to be ceded under current peace terms to Russia by Finland, or the one hundred and fifty thousand who are already in West Finland, with the general plan for the amelioration of Refugees' conditions. With reference to as- sistance for fifty thousand Ingrians from the USSR in German- land, a question may also be raised. Up to the present time, however, these points have not been made to ne. As the Department knows, the Government of Finland on the other hand, on a basás of international cooperation at this time would be strongly attracted by any opportunity to associate itself with western democraties and would in all probability issue a declaration of the type in question for this reason. As my number 82 this is being repeated to Stockholm for Olsen. The Jewish Community has advised me and the report is confirmed by the Swedish Legation, that the Government of Sweden has decided to allow entry of the 106 refugees which paragraph eight of my telegram in reference mentioned, into Sweden. It is indicated by the Assistant Chief of the Political Department of the Foreign Office that it might be opportune to make a statement in connection with the travel of these refugees, if a statement were forthcoming. It was asked by him whether any governments other than ours have made declarations up to the present ime and he would like to know their contents if such declarations have been made. GULLION DCR:MPL 4/21/44 Regraded Unclassified 153 PARAPHRASE OF TELEGRAM RECEIVED FROM: The Allied Control Commission, Naples TO: The Secretary of State, Washington DATE: April 20,1944 NUMBER: 3590 SECRET Murphy sends the following message. At the suggestion of the Combined Chiefs of Staff a study of the civilian relief problem in Italy has recently been made and completed by Patrick Malin, Vice President of the Inter- governmental Committee on Refugees. With regard to non-Italian persons in Italy especially Jews, Malin although he found ar- rangements satisfactory for the relief of Italians, considered that further steps should be taken with a view to ensuring the dispensation of adequate relief and to arranging their evacua- tion or repatriation where possible. The following recommendations which ACC and AFHQ have approved are put forward by Malin to supplement the foregoing: One. Sir Clifford Heathcote Smith, late British Consul General at Alexandria, to be appointed as resident representa- tive in Italy of IGCON refugees. Two. To work in Italy under Heathcote Smith on the issuance of Palestine immigration certificates, the appointment of a representative of & Jewish agency which the Government of Palestine has approved. Three. The authorities of France to be asked to accommo- date some 750 Jewish refugees in a camp established at Fedhala by UNRRA. Four. The present policy of excluding organizations other than British and American from Italy Allied Red Cross to be maintained. UNSIGNED DCR:MPL 5/5/44 Regraded Unclassified 154 ORIGINAL TEXT OF SENT FROM: Secretary of State, Washington TO: American Consul, Jerusalen DATED: April 20, 1944 NUMBER: 86 CONFIDENTIAL The War Refugee Beard requests that you deliver the fellowing message to Chief Babbi Issac Hersegt QUOTE. Your radiograms of April 4 and 7 have been received. The safety of Jewish and other holders of Lating American passports in Vittel and other camps has been a matter of deep concern to this Government. It has made repeated efforts to save all these persons. To this end, it has approached the governments of Spain, Switserland and Latin American countries involved and is mintaining constant communication with Interngovernmental Committee and International Red Cress. Special steps have been taken to save the lives of 238 persons deported from Vittel. The Board hopes that, as a result of these efforts, the danger threatening these persons will be averted, Signed, John W. Pehle, Executive Director, Var Refugee cleard. UNQUOTE. HULL Regraded Unclassified 155 CIRCULAR CONFIDENTIAL April 20, 1944 7:35 p.m. FOR THE PERSONAL AND CONFIDENTIAL INFORMATION OF THE AMBASSADORS AT SAN JOSE, SAN SALVADOR, GUATEMALA, TEGUCIGALPA, MANAGUA, QUITO AND ASUNCION. With further reference to the Department's circular airgram of January 26, 7 p.m., and to subsequent communications on refugee matters, you are informed that the Department has now authorized the American consular officers in Switzerland to issue up to four thousand quota immigration visas to refugee children up to sixteen years of age without regard to religion, nationality or stateless status, to close relatives residing in enemy, enemy-occupied or controlled territory, or to the availability of means of transporta- tion to the United States. The purpose of this authorisation is to facilitate the escape to Switzerland of orphaned or abandoned children by giving assurances to the Swise Government that these children will not remain in Switzerland after the termination of hostilities in Europe. The authorisation contains provisions for the continued renewal of the visas until such time as adequate transportation facilities to the United States become available. Private sources have posted bond with the Attorney General of the United States to assure this Government that the immigrating children will not become public charges. If there are private agencies in the country to which you are accredited, willing and able to undertake a program for the care of refugee children, the War Refugee Board is confident that it can make arrangements to provide these agencies with adequate funds for the maintenance, education and welfare of as many children as the Government of that country would be willing to admit. Should it prove necessary, funds would undoubtedly be available to meet transportation expenses from Switzerland to that country. Kindly approach appropriate officials of the Government to which you are accredited, inform them of the foregoing and request them to give assurances to the Swiss Government of their willingness to accept up to & fixed number of refugee children in a manner similar to this Government. For the information of the Government to which you are accredited, it is conservatively estimated that there are in France alone eight to ten thousand abandoned or orphaned refugee children. Should that Government be willing to make this humanitarian offer, please request the Ministry of Foreign Affairs to authorise its chief of mission in Bern to issue the appropriate number of immigration visas and to maintain their validity until suitable transportation facilities from Switzerland to its country become available. The Government may be informed that the special repre- sentative of the War Refugee Board attached to the American Legation in Bern will be glad to cooperate with the diplomatic and consular Regraded Unclassified 156 - 2 - officers of the other American Republics in this as well as in all other refugee matters. Please report by telegraph whether this suggestion has been favorably received by the Government to which you are accredited and, if so, the number of children it is prepared to admit. HULL HULL Sent to: Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Ecuador and Paraguay. WRB:GLW:KG ARA WE VD Regraded Unclassified 157 A-77 SECRET 2:30 PM Sent by Secret Courier AMEMBASSY April 20, 1944 TEGUCIGALPA (HONDURAS). FOR THE PERSONAL AND CONFIDENTIAL ATTENTION OF THE AMBASSADOR. Refer our previous communications regarding War Refugee Board. Reference is made to Department's airgram March 31, 1:05 p.m. Minister Harrison at Bern has informed us that the Swiss Foreign Interests Division has advised him informally that the Spanish government had been requested by the Germans to inquire into the bona fides of certain Latin American passports, held by internees in enemy-controlled territory and that the Latin American governments have denied responsibility as well as any claims of the persons holding such passports. Please approach appropriate offi- cials of the government to which you are accredited and inquire whether it has received any such inquiries through the government of Spain or otherwise from the Germans with respect to the validity of passports held by such internees and if such inquiry has been made, please ascertain the nature of the response, if any. In view of the perilous situation in which these internees find themselves, the conclusion has been reached that perhaps the only way of safeguarding the lives of these unfortunate victims of Nasi persecution is forwith to initiate through proper channels negotiations Regraded Unclassified 158 Tegucigalpa A-77 - 2 - negotiations for an exchange of nationals for which these people will be eligible. In contemplating such exchange negotiations, it is not expected that the government to which you are accredited will physically admit any such persons into its territory even on a temporary or tentative basis. This Government is prepared to take full responsibility for all arrangements necessary to route these persons to places elsewhere. Proceeding on this basis, please approach the government to which you are accredited with the request that it give its approval to the Government of the United States approaching the German government through appropriate channels with a view to initiating such negotiations. Please also advise appropriate officials of the government of Honduras that similar requests are being made of other Latin American countries, it being the hope of this Government that it will be put in a position to initiate exchange discussions on & hemispheric basis. Please also advise such officials that in any exchange negotiations that may be entered into, it is of course understood that unquestioned citizens of the United States and of the Latin American countries will be considered by this Government as being in a category entitled to priority over others. Please also request the government to which you are accredited on humanitarian grounds, affirmatively to approach the German government through the protecting power with a demand that the lives of all persons holding passports issued in its name or claim- ing its citizenship on the basis of consular documents be safe- guarded / Regraded Unclassified 159 Tegucigalpa A-77 - 3 - guarded and that they be given all rights, privileges and immunities accorded to civilian internees of enemy nationality to whom the Geneva Convention regarding the treatment of prisoners of war is currently applied by analogy. In view of the imminent danger in which the persons concerned find themselves, you are requested to act with the greatest possible dispatch. Finally, we communicate to you, for communication to the govern- ment to which you are accredited, the substance of a cable which the Department has sent to our Minister at Bern as follows: QUOTE Although the motives of the Germans in according better treatment to Jews of Polish origin holding passports and other documents issued in the names of Latin American countries are not too clear, it would appear that they include (1) some hope that they might be considered exchange material against Germans in the Western Hemisphere and (2) some fear that their ill-treatment might afford the Latin American countries a pretext for further limiting the freedom and economic activities of Germans resident in such countries. The measure reported in your 1958 of March 30 may be an indication that Germany is beginning to doubt whether such Jews are considered exchange material and whether their treatment would affect the treatment of Germans in Latin America. This Government regards it as essential that these doubts be promptly and effectively disspelled. Regraded Unclassified 160 Tegucigalpa Am77 - 4 - Accordingly, please request the good offices of the Swiss Govern- ment in informing the Germans that this Government is undertaking discussions with Latin American countries for & further exchange of Germans in the Western Hemisphere for persons in German-controlled territory and that in this connection, the United States considers that all persons in Vittel and elsewhere holding passports and other documents issued in the names of Latin American countries will be eligible for such exchange. Simultaneously, please request the appropriate Swiss authori- ties to advise the Germans that in the meantime this Government expects that these persons will be accorded the same rights, privileges and immunities that the German government expects will be accorded to Germans in the Western Hemisphere. You may add that a consider- able number of German civilians interned by various Latin American countries have been placed by such countries in the custody of the United States and are presently in such custody within continental United States. For your information, the substance of this message is being communicated to our Missions in the Latin American countries concerned. We are also making inquiry of such Latin American countries with respect to the authenticity of the information informally conveyed to you by the Swiss Foreign Interests Division which you referred to in your 1994 of March 31 UNQUOTE SPECIAL INSTRUCTIONS TO THE AMBASSADOR. You are instructed to memorize the contents of this airgram, burn the document and discuss the matter orally with the government Regraded Unclassified 161 Tegucigalpa Am77 - 5 - to which you are accredited. Such report &8 you submit to the Department on this cubject should be by secret courier. HULL WRB:GLW:KG ARA WE SWP 4/19/44 Regraded Unclassified 162 TELEGRAM SENT PLAIN April 20, 1944 AMERICAN CONSULATE CASABLANCA 61, twentieth FOR BECKELMAN FROM 1. British and American Governments have agreed in principle to transfer to UNRRA of responsibility for maintenance and operation of refugee center at Casablanca. 2. Plans are to develop as soon 8.8 possible detailed agreement as to conditions and date of transfer. UNRRA proposes that British and American Governments should retain responsibility for transport of refugees to North Africa, UNRRA's primary responsibility being for care and maintenance of refugees after arrival at North African seaport. Responsibility for finding new places for their eventual settlement will remain unchanged by transfer although UNRRA is prepared to assist in repatriation of such persons as can and are willing to return to countries of origin or of former residence. Expectation is that terms of transfer will also include some understanding as to supply arrangements as for example possible extension of present agree- ment with military for furnishing of supplies. Proposed date of transfer is some time after U. S. Congress appropriates money for UNRRA probably in four to six weeks. 3. Take up with French authorities in Algiers the proposed transfer in order to obtain their consent pursuant to Article I, paragraph 2 (a) of the UNRRA agreement, clearing with them also as to any discussions which you deem necessary with authorities in Morocco. British and American representatives in Algiers are being instructed to join with you in discussions with French whenever necessary although since French Committee 1s member of UNRRA initial approach should be made by you as UNRRA representa- tive. We are informally notifying French representatives here of the above plans. 4. Would appreciate your cabled recommendations as to terms to be included in understanding referred to in paragraph 2. Also cable results of your talks with French in line with paragraph 3. HULL Forwarded by (GHK) JGJohnson/fh DCR:RLH:ATM 18 Apr 44 Regraded Unclassified 163 AIR MAIL No. 415. LEGATION OF THE UNITED STATES OF AMERICA Lisbon, April 20, 1944. Subject: Transmission of Memorandum Prepared by Dr. Robert C. Dexter, Unitarian Service Committee, Lisbon, in Response to Treasury License Issued to the Unitarian Service Committee. CONFIDENTIAL The Honorable The Secretary of State, Washington. Sir: I have the honor to refer to the Department's telegram of April 8, 1944, which states that the Treasury Department has issued License No. W-2167 to the Unitarian Service Committee of Boston, Massachusetts, and which conveys the substance of the license, and to transmit herewith a memorandum prepared by Dr. Robert 0. Dexter in response to the telegram. Dr. Dexter, who has been European Director of the Unitarian Service Committee, will become Special Attache for Refugee Matters to the American Legation, Lisbon, when the position is approved by the Portuguese Foreign Office. Respectfully yours, For the Minister, James B. Wood, Financial Attache. Enclosure: Memorandum. File No. 814.4/300 JEWilr Regraded Unclassified 164 Enclosure to despatch No. 415 dated April 20, 1944 from American Legation, Lisbon MEMORANDUM Lisbon, April 12, 1944. To: James 2. Wood, Financial Attache, American Legation, Lisbon. From: Dr. Robert C. Dexter, European Director, Unitarian Service Committee. 1) The Unitarian Service Committee appreciates ex- ceedingly the information contained in the cable dated April 8, 1944 from the Department of State and especially the general attitude contained therein. 2) As far as remittances from Portugal to France are concerned, at the present moment the permission is purely academic as no funds have been remitted here speci- fically under the terms of the license. It was Dr. Robert C. Dexter's understanding when he left the United States that the license granted to Portugal was only an alternative one in case the funds for France could not be sent through Switzerland. It was his further understanding that $10,000 was to be sent to Switzerland shortly under & similar license. 3) In view of the various complications presented by the license, it is the policy of the Unitarian Service Committee to consult the Financial Attache of the Legation, and only to make putchase of francs with his approval. It is assumed that such approval would be satisfactory to the Legation here and to the State and Treasury Departments in Washington. 4) In case facilities develop rapidly for sending money into France for purposes mentioned in the license, the Unitarian Service Committee would like advice as to whether funda already in Lisbon, but not specifically allo- cated for the purposes envisioned by the license, may be used for remittances to enemy occupied territory. Such remittances would be made only upon prior approval of the Financial Attache. This question is asked only in order to facilitate transmission in an emergency. Regraded Unclassified 165 CORRECTION April 20, 1944 BJR In cable from Lisbon 1145 April 18, 11 a.m. War Refugee Board page 2, line 4 insert "can arrange" after "believe". DIVISION OF COMMUNICATIONS AND RECORDS CSB Regraded Unclassified 166 AMT-558 PLAIN Lisbon Dated April 20, 1944 Rec'd 3:50 p.m. Secretary of State, Washington. 1176, Twentieth, 11 a.m. Following Message is from Joseph Schwartz for War Refugee Board and Leavitt, Joint Distribution Committee, New York. "Barlas supplies following figures concerning emigration services from Turkey to Palestine from December 1943 to March 31, 1944. Local Turkish residents 1084 of whom 194 required assistance. From Bulgaria 276 including 46 children who arrived in March. From Hungary 169, from Greece 176, from Rumania 285, which includes 239 SS MILCA passengers who arrived March. Financial statements not yet ready but will advise as soon as pvailable. Thus far Turkish repatriates arriving from France No. 340 of whom 175 receiving assistance which over a period of 6 weeks amounted 14,000 Turkish pounds. Resnik advises passengers boarding both steamships MILCA and MARITZA at Constanza were required to pay fantastic sums." NORWEB RB Regraded Unclassified 167 LEG-635 PLAIN Lisbon Dated April 20, 1944 Rec'd 6:12 p.m. Secretary of State, Washington. 1183, April 20, 6 p.m. Following telegram number 2 is for War Refugee Board and Rabbi Stephen Wise, President Jewish Congress, New York, from Isaac Weissman. "We enthusiastically welcome nomination Dexter representative Mar Refugee Board closest collaboration already established. Considering nature general rescue work Dexter and myself agreed upon closest confidential cooperation between Jewish Congress and Board, am there- fore giving him information concerning work extensively developed by Congress here. Regular groups rescued orphans now arriving. Fully appreciate promised American visas but since delegate Jewish agency just arrived from London with visas Palestine should take preference for following reasons: First, according Jewish faith orphans belong Jewish Community who in Palestine have created special institutions adoption and vocational training youth groups; secondly, Palestine community long experienced reception such groups; thirdly, our experience shows shildren dispersed foster parents risk being lost Judaism. Please intervene immediately with Director War Refugee Board urging him favor Palestine destination all children having no relatives USA". NORWEB EJH Regraded Unclassified 168 ORIGINAL THE or TELEGRAM SENT FROM: Secretary of State, Washington TO: American Legation, Born DATED: April 20. 1944 NUMBER: 1358 SECRET FROM THE WAR REFUGER BOARD TO MINISTER HARRISON. The War Refugee Board requests that you deliver the following message to Dr. Gerhart Rigner, Genevat QUOTE Please advise whether you can resume contacts with Willy, his superiors and associates, and ethers exercising similar authority. If this is possible, would appreciate your views as to pessibility of arrenging for evacuations from Bungary to neutral countries or for holding up deportations or per mitting sending relief to those detained. If any sucherrange- ments possible, please indicate amounts you consider would be involved and extent to which such amounts could remain in neutral countries. Also is Willy reliable. Signed Mahum Goldmann, World Jewish Congress. UNQUOTE. Regraded Unclassified 169 PARAPHRASE OF TELEGRAM RECEIVED FROM: American Legation, Bern TO: Secretary of State, Washington DATED: April 20, 1944 NUMBER: 2508 CONFIDENTIAL Legation's cable dated March 6, no. 1366, is referred to herewith. Regarding test shipments of food parcels to Allied Nationals in German concentration camps, please see letter of September 1, 1943, from James, Special Representative in Geneva of American Red Cross to Mitchell, Director of Insular and Foreign Operations of American Red Cross. HARRISON Regraded Unclassified 170 PARAPHRASE OF TELEGREM RECEIVED FROM: The American Minister, Bern TO: The Secretary of State, Washington DATE: April 20, 1944 NUMBER: 2510 SECRET The fellowing mesage refere to your number 1269 dated April 13, and to number 1270 also dated April 18, 1944. The Government of Switzerland has been requested by the Legation to extend protection to Hager and Wachtel whose cases were mentioned in by number 1994 dated March al until specific> ally advided to the contrary and similar action will be taken on cases of this kind is the future. On April 14 we requested the immediate return to Vittel of two hundred and thirty-eight persons. It is assumed by the Legation that the authority given in the telegram under reference to extend protection to documents- tion applicants who are awaiting the decision of the Department applies only to such refugee cases and does not alter the cus- tomary procedure of withholding protection to ordinary cases which are refersed to the Department for decision such as cases of cooperation in the war effort of the enemy, doubtful leyalty. repatriations first time application, et cetera. In later cases the Legation will continue to request the Swise representative to withhold protection watil the decisions of the Department are - ceived, unless instructed otherwise. HANRISON DORAMPL 4/26/44 Regraded Unclassified 171 CABLE TO AMBASSADOR STEINHARDT, ANKARA, TURKEY FROM WAR REFUGEE BOARD This is WRB cable to Ankara No. 28 As previously advised, you should effect in Turkey all Insurance required by charter for SS TARI except war risk on vessel. As indicated in our No. 306 of April 8 war risk on vessel will be placed here through War Shipping Administration. Advise us immediately when TARI is ready to depart in order that war risk insurance can be placed here. This matter has been discussed with Hirschmann who is in complete accord. April 20, 1944 3:00 p.m. JBF:bbk - 4/19/44 Regraded Unclassified 172 TELEGRAM SENT This telegram must be April 20, 1944 paraphrased before being communicated to anyone midnight other than a Governmental agency. (BR) RESTRICTED AMEMBASSY MOSCOW 978 FOR THE AMBASSADOR FROM WAR REFUGEE BOARD. Please refer to Department's circular airgram of January 26 in regard to the establishment of the War Refugee Board, also to War Refugee Board cables nos. 554, March 11, and subsequent tele- gram on same subject. The Executive Director of the Board John W. Pehle has informed the Department that in conformity with the President's Order of January 22, the Board proposes to appoint Mr. Robert J. Scovell, former representative of the American Red Cross in Russia and new on the headquarters staff of that organization, as the Special Representative of the Board with the designation by the Department as Special Attache to the Embassy on war refugee matters. The Presidential Order provides that the State Department shall appoint such Special Attaches on the recommendation of the Board, that they shall have diplomatic status, and that their duties and responsi- bilities shall be defined by the Board in consultation with the State Department. It 1s/ 173 -2-1978, April 20, midnight, to Hoscow. - 2 - It is understood that Mr. Scovell is personally known to you. It is assumed that there will be no objection on the part of the Russian Government to this designation, although you may in your discretion approach the Russian authorities informally,i you consider it necessary or advisable to do 80. If Mr. Scovell's appointment meets with your approval, please advise us accordingly in order that his designation may be made effective at once. If Scovell is appointed we propose to advise him through you that: (a) He is charged with the duty and responsibility of carry- ing out the Board's policies and programs in Russia; (b) He is responsible to the Ambassador and should discuss his activities and problems with him regularly and fully; (c) The Embassy will provide him with the necessary com- munication facilities in carrying on his official duties; (d) He should extend all possible assistance to the Ambassador in carrying out instructions contained in the airgram and cable- grams referred to above; ( (e) He should work with and give all possible assistance to public and private agencies operating in Russia in this field regardless of whether such organizations are American, foreign or international; (f) He should develop and assist in the development of pro- grans and implementation of measures for the rescue, transporta- tion, maintenance and relief of refugees; (g). He should forward to the Board recommendations and frequent reports on progress of work and difficulties encountered; (h) In so far as the Trading with the enemy Act is concerned, the Secretary of the Treasury has vested in the War Refugee Board and its representatives in the field full authority to communicate with enemy territory to carry out the purposes of the Order/ Regraded Unclassified 174 -3-1978, April 20, midnight, to Moscow. - 3 - the Order. The Secretary of the Treasury has also delegated to the War Refuges Board and its representatives the power to authorize any public or private agencies who may be subject to the provisions of our Trading with the enemy Act to communicate with enemy territory for the purpose of carrying out the Order. Scovell is authorised to act accordingly upon your confirmation of his designation, HULL (GLW) MRB:GLN:KG 4/20/44 II A-5/3 S/CR Regraded Unclassified 175 MJK-652 Rio dE Janeiro This telegram must bE paraphrastd before bEing Dated April 20, 1944 communicated to anyone other than a Government Rec'd 8 p.m. Agency. (BR) SECRETARY of State, DEPARTMENT OF STATE Washington. IN OF APR 21 1471, April 20, 6 p.m. TRATIONS *No RECORDS FOR THE SECRETARY OF THE TREASURY FROM THE AMBASSADOR. I personally transmitted to the Minister of Finance your message in regard to the Joint Statement recom- mending the Establishment of an international monetary fund. HE was deeply appreciative of your interest in this matter and suggestion of joint action. Finance Minister, Souza Costa, asked ME to inform you that hE would have released for publication on April 22 the revised Joint Statement and that hE would at the same time make appropriate comment in regard to Brazil's desire to collaborate in international monetary control plans. FOR THE DEPARTMENT - The above refer to the Depart- ment's 1251, April 18, 10 p.m., and 1264, April 20. Embassy is translating final revision Joint Statement for USE Finance Ministry in its public statement. CAFFERY RB Regraded Unclassified 176 TELEGRAM SENT KEM April 20, 1944 This telegram must bE paraphrased before being Midnight communicated to anyone other than a Government agency.. (BR) DEPARTMENT OF STATE DIVISION OF AMEMBASSY, APR 22 1944 LONDON. COMMUNICATIONS 3175 AND RECORDS FOR THE AMBASSADOR This is a personal message from the Secretary of the Treasury to the Chancellor of the Exchaquer. QUOTE In accordance with the desire of the President which I communicated to you in our cable no. 2651 WE are planning to call a conference beginning the last WEEK in May. It is EXPECTED that the President will invite the United and Associated Nations to send representatives to a formal financial and monetary conference. The chief items on the agenda will bE the drafting of proposals, for the Establishment of an international monatary fund and an international bank for reconstruction and development. The President has indicated that hE will appoint me head Regraded Unclassified 177 -2- #3175, April 20, midnight, to London. me head of the American dalagation and will indicate in his letter that he hopes that Each government will have its delegation headed by its chief financial officer. It is contemplated that the delegates will bE instructed by their respective governments to assemble for the purpose of preparing concrete proposals to bE formally presented later to the respective governments for their acceptance or non-acceptance. It would bE very helpful to me if I could have your personal views on these contemplated arrangements as soon as possible. It is important that there bE no delay, as there is very little time to spare for com- pleting arrangements. I should like to stress again the urgency of holding the conference before the political conventions in June. As soon ns I hear from you WE shall bE prepared to discuss with you on an informal basis the calling of a drafting committee to begin work as soon as a conference is officially called. END QUOTE HULL (DA) FMA :EGC:ja SA Regraded Unclassified 178 KEM-598 London This telegram must be paraphrased before being Dated April 20, 1944 comminicated to anyone other than a Government Rec'd 5:02 p.m. agency. (BR) DEPARTMENT OF STATE DIVISION OF Secretary of State, APR 21 1941 Washington. COMMUNICATIONS AND RECORDS US URGENT 3253, April 20, 7 p.m. (SECTION ONE). Department's 3077, April 18, midnight. The following is an urgent message from the Chancellor of the Exchequer to Secretary Morgenthau: "I thank you for your personal message of April 18. Arrangements are being made for publication here on Saturday morning to fit the timing of publication in the United States. We are informing the Dominions of the agreed changes in the statement but owing to the difficulties of synchronizing our publication with yours, I doubt whether it will be possible for any of them to publish simultaneously though they may be able to make some announcement. AS for the representatives of the European countries who are in England, we shall send them a copy of what we publish but no question of simultaneous publication or announcement by them could arise. "TWO. I note Regraded Unclassified 179 -2- #3253, April 20, 7 p.m. (SECTION ONE) from London. "Two. I note that you propose to make a general statement on the same lines as that by our Government though not necessarily in identical language. "Three. Owing to other parliamentary business already determined, it is not possible for me to give you a clear indication when contemplated debate will take place. If for any reason it had to be deferred for a considerable period, I could not expect you to hold back on that account from any action you might wish to take. "Four. If the general reception of the statement of principles indicates to your Government that a further conference at an early date is desirable, we should try to fall in with your plans though I am sure you will understand that for various reasons both travel and communications will be vory difficult to arrange. "I think I should make plain to you our conception of the nature of the conference that might be held. The statement of principles will have appeared on April 22 and this will be the first occasion upon which many countries who are important in international commerce and whose adherence to the scheme would be necessary for its successful 180 -3- #3253, April 20, 7 p.m. (SECTION ONE) from London. for its successful operation will be definitely aware of its contents. It is an important statement about postwar international cooperation and its important issues. My judgment is that a conference at the end of May, if indeed it can be arranged at that date, in view of the difficulties I have mentioned should be summoned for the purpose of examining the statement of principles and establishing a detailed text which would then be the subject of formal consideration by govern- ments so that they could declare their attitude to the scheme as a whole. WINANT LMS 181 KEM-590 London This telegram must be paraphrased before being Dated April 20, 1944 communicated to anyone other than a Government Rec'd 5:02 p.m. agency. (BR) Secretary of State, Washington. US URGENT 3253, April 20, 7 p.m., (SECTION TWO). Five. As regards the Bank for Reconstruction and Development, I have received your draft statement of principles which you were good enough to send me. Meanwhile Mr. Opie will have informed Dr. White of our general views on the plans you have published and will, I hope, have been in a position to give Dr. White a memorandum which we had prepared. There is no disagreement between us as to the objectives of such a scheme but as you will have observed, we approach it from a rather different standpoint and I very much doubt whether it would be practicable for us to reach agreement on a joint statement of principles without a further conference between our respective experts. The conference on the monetary fund might provide the opportunity for this. "In these Regraded Unclassified 182 -2- #3253, April 20, 7 p.m. (SECTION TWO) from London. "In these circumstances I think your suggestion that you should explain to the Congressional Committee that the statement of principles which you have sent me is being released as having the approval of the exports of a number of countries is premature and might give rise to misunderstanding. Should it not be presented at this stage as representing the views of the technical experts of the United States?" END OF MESSAGE.) WINANT LMS Regraded Unclassified 183 SECRETARY OF OFFICE TREASURY 1944 APR 21 PM 2 28 TREASURY DEPARTMENT NOT TO BE RE-TRANSMITTED COPY NO. 11 SECRET OPTEL No. 127 Information received up to 10 a.m., 20th April, 1944, 1. NAVAL EAST INDIES. 19th. Aircraft from carriers supported by Eastern Fleet attacked SABANG (SUMATRA). Wireless installa- tions, dockyard, airfield and other targets were hit and large fires left burning, including oil fuel cistern. 2 destroyer escort vessels set on fire, 2 medium-sized ships hit and 24 air- craft destroyed on ground. Our loss 1 aircraft, pilot safe. 2. AIR OPERATIONS WESTERN FRONT. 18th/19th. 4048 tons were dropped on Marshalling Yards in FRANCE. 19th. U.S. heavy bombers attacked targets at KASSEL, ESCHWEDE, PADERBORN, GUTTERSLOH, LIPPSTADT and WERL dropping a total of 1284 tons with results generally good to excellent. Enemy casualties by fighters 16, 1, 2 for loss of five bombers and 2 fighters, Medium and fighter bombers dropped 454 tons on Coastal Defences N.E. FRANCE, railway centres at HASSELT, NAMUR and MALINES as well as 315 tons on military objectives in Northern France. 19th/20th. 12 enemy aircraft operated over KENT, SUSSEX and SURREY with slight penetration to LONDON area. Damage and casualties slight. 18th/19th. Casualties in LONDON area now reported - 51 killed and 150 seriously wounded. HUNGARY. 16th/17th. Allied bombers dropped 67 tons on BUDAPEST. BULGARIA and RUMANIA. 17th. U.S. heavy bombers dropped 426 tons on railway centres SOFIA and 333 tons at SAVA near BELGRADE. Enemy casualties by bombers and fighters 24, 3, 9. 17th/18th. Allied bombers dropped 65 tons on PLOVDIV Marshalling Yards 80 miles E.S.E. of SOFIA. ITALY. 18th. Weather restricted bombing. Near UDINE fighters scored 6, 2, 5 in combat and 11, 2, 9 on ground for loss of 5 fighters. Regraded Unclassified cc-Fred Smith 184 April 21, 1944 9:04 a.m. Wright Patman: Hello. This 1s Patman, Mr. Secretary. HMJr: How are you? P: Fine. I hope you're all right. HMJr: I just wanted to tell you how I'm looking forward to coming down to your meeting. P: Well, I'm certainly glad of that. And we're looking forward to it, too, Mr. Secretary, and we'll do everything in the world to make it a success. HMJr: Well, I'm sure it will and I think it's a fine idea and I'm glad you all want me. P: Yes, sir. And that's the middle of the Gulf Southwest, you know. HMJr: I know. P: And, by-the-way, will you give out the statement from here -- from your office? HMJr: That I'm going to go? P: Yes. HMJr: I'll tell them to. P: All right. I think that would be better. And I was talking down there and our friends think that you should invite these Governors, too. We're going to invite them. HMJr: I see. P: And if you'll do it, that will just cinch things. HMJr: Well, I'll talk that over and I don't see why I can't, seeing it's to be a War Bond meeting. P: That's right, War Bond meeting -- and also invite the War Bond Finance Chairman, you see, from each State. Regraded Unclassified - 2 - 185 HMJr: Fine. P: I'll furnish Fred Smith the names, if it's all right. HMJr: Fred Smith. P: Yeah. HMJr: That's the fellow. P: Is he the one to deal with? HMJr: Yeah. P: All right, sir. Well, I'll do that. HMJr: Fine. And thank you for defending my honor again yesterday. P: All right. Did you see that in the Record? HMJr: (Laughs) P: Well, I'll watch that and I'll be there this afternoon. is HMJr: He's just -- that fellow's crazy. P: Oh, he is crazy. He's just a nut. HMJr: And I don't think the Republicans like him any better than I do. P: I don't think so. HMJr: But somebody has got to answer him and answer him quickly just the way you did. P: Well, it should be answered, yes. That speech got a lot of notice, that Mr. O'Connell fixed up for me. HMJr: It did? P: Oh, yes. It received lots of notice around over the country. HMJr: Well, I'm delighted. Regraded Unclassified 186 - 3 - P: Yes, sir. HMJr: I'm delighted. P: Say, this afternoon, is there any reason why that should be a secret meeting? HMJr: Ah .... P: What I mean, closed? HMJr: Do you mean as far as the Press goes? P: Yes. HMJr: I don't know. You see, what we're worried about is we're not supposed to give anything out until eight o'clock tonight and all the other countries do it at the same time. P: Well, why don't you just say that, then, when you come that as far as you are concerned, you wouldn't object to it except for that agreement. HMJr: All right. I'll talk with Smith about it in a few minutes. P: All right, sir. This fellow -- there's no use of yielding to him on account of -- saying it's a secret meeting and 80 on. HMJr: Oh, no. What I've done, you see, I've run up against him on this -- what do they call it -- "Coinage, Weights and Measures" --- you see? P: Uh huh. HMJr: And he talks and I've gotten 80 I just don't answer him. P: Well, he's got some crack-pots around him that gets up these questions like Crawford. Crawford has a bunch of crack-pots, too. HMJr: I see. Well, I just -- I got 80 I just don't answer him. P: Yeah. Regraded Unclassified - 4 - 187 HMJr: And it makes him wild. P: Yes. Well, you tell the fellows down there to watch things up here and if they want anybody answered for you, to let me know. HMJr: Fine. P: All right. HMJr: Thank you. P: All right, I sure do thank you, Mr. Secretary, and I'm delighted that you're going to be down with us. HMJr: Well, I'm looking forward to it. P: Well, thank you very kindly, sir. It pleases us very much. HMJr: Bye. P: Bye. Regraded Unclassified 188 April 21, 1944 9:20 a.m. Treasury Operator: The Secretary is on the wire, operator. Overseas Operator: Hello. HMJr: Hello. Operator: Mr. Henry Morgenthau, Jr.? HMJr: In person. Operator: On the overseas call for Mr. William Averill Harriman HMJr: Yes. Operator: we're all ready and I'd like to advise you in the interest of National security HMJr: Yes. Operator: you are requested to refrain from discussing departure or arrival, name or location of ships.... HMJr: Yes. Operator: military topics of any kind HMJr: Yes. Operator: technical weather information HMJr: Yes. Operator: or any other information which may aid or comfort the enemy. HMJr: All right. Operator: Just a moment now for Mr. Harriman. HMJr: Thank you. Foreign Operator: Hello, sir. HMJr: Hello. Regraded Unclassified 189 - 2 - Operator: Hello, sir. HMJr: Hello. Hello. Averill Harriman: Hello. HMJr: Hello. H: Henry? HMJr: Yes. H: This is Averill. HMJr: Good morning. H: Have you gotten the cables I sent last night? HMJr: No, I have not. H: Do you mind inquiring at the State Department? HMJr: I'd love to. H: The answer, now, is "yes". HMJr: The answer, now, is "yes"? H: With the request not to discuss it until you've seen my cables. HMJr: Now, wait a minute. See if I've got it -- the answer, now, is "yes" but I shouldn't discuss it until I see your cable? H: Yes, because there are certain aspects about it that you will have to look at before you -- for you to make up your mind about before you .... HMJr: Averill, we -- you'll have to repeat slowly because this 18 not too good. H: I say there are certain statements in connection with this that you will have to .... HMJr: There are certain things in the cable that I ought to see? H: Hello? Regraded Unclassified 130 - 3 - HMJr: Hello. H: I say, my cable gives you a suggestion. HMJr: Averill, can you hear me? H: I hear you perfectly. HMJr: Hello? H: I say, I hear you perfectly. HMJr: Well, I hear you off and on. I should -- let me see if I got this right. There are certain things in the cable that I should see before I make any announcement? H: Yes. HMJr: Is -- hello? H: Hello. HMJr: Well, I'll get hold of Dean Acheson and tell him to get me the cable right away. H: Yes. And don't do anything until you have read the cable. HMJr: I will do nothing until I have read the cable. H: And ask Mr. White to get in touch with the experts there. HMJr: And ask White to be in touch with the experts in Washington? H: Yes. Ask Mr. White to get in touch with the experts and see if they have heard from their people. HMJr: I'll do that. H: I'd appreciate very much being told what your decision 1s. HMJr: I -- the minute we make one I'll let you know. H: Yes. Okay. Regraded Unclassified 191 - 4 - HMJr: Thank you 80 much for your help. H: Not at all. HMJr: Thank you. H: Good luck to you. HMJr: Bye. H: Bye. 192 April 21, 1944 9:27 a.m. HMJr: Hello. J. E. Brown: Good morning, Mr. Secretary. HMJr: Good morning. I've tried to reach Mr. Acheson and I couldn't. Now, Ambassador Harriman just called me from Moscow. B: Yes. HMJr: And he said there's a very important cable there for me somewhere in the State Department. B: Yes. HMJr: Now, I'm going up on the Hill with Mr. Acheson at a quarter of ten. B: Uh huh. HMJr: And we've been waiting for this answer from Russia. Now, is there any way B: Well, now, Mr. Secretary, he may have sent it but it may not have arrived. HMJr: Well. B: You know with the problem -- it's the old problem of getting telegrams back and forth to Moscow with the atmospheric conditions HMJr: Yeah. Well, now, look. Will you do this for me? Will you ask whoever is in charge of your code room and 80 forth and 80 on B: Yes. HMJr: to give this thing priority? B: I'll be very glad to do that. HMJr: And then the second you've got it, let Mrs. Klotz know, herself. B: Yes. HMJr: She'll send a Secret Service man over to get it and he can rush it up to me on the Hill. Regraded Unclassified 193 - 2 - B: Fine. HMJr: See? B: I'll be very glad to do that. HMJr: But I mean, whatever it is, if there's one from Harriman, please give it first priority. B: Yes, indeed. HMJr: Because I'm awfully anxious to get it. B: All right, sir. HMJr: Because he's .... B: I'll take care of that right away. HMJr: He says the Russians have said "yes" with certain qualifications. B: Uh huh. HMJr: Now, if I can tell these four Committees on the Hill that they've said "yes" .... B: Yes. HMJr: Would you give it as immediate attention .... B: I'll -- I'll do that right away, sir. HMJr: Thank you. B: Fine. Not at all. Regraded Unclassified 194 April 21, 1944 9:35 a.m. DEFERMENTS Present: Mr. C.S. Beil Mr. Jordan Mrs. Klotz MR. BELL: Mr. Jordan doesn't go along with me on one - Taggart of Procurement. He has only been with us for two months. I warned Cliff that for the future not to take on people that are subject to the draft with- out first clearing with us, but I have talked with Mr. Gaston about this case and we both feel that he should be deferred because of his age. MR. JORDAN: He has only been in the Treasury three months. H.M.JR: Oh, he has been in the Government. Oh well, there has to be some incentive to work for the President. (The Secretary approves deferment list No. 1, attached) MR. BELL: This is Charlie Adams' case. He has declined a commission in the Navy at Ted Gamble's request. Ted thinks the sun rises and sets in him. As far as we know he is doing a grand job. Since McNamara has left, he has absorbed practically that entire field of work. H.M.JR: He is not on the key list, though. MR. BELL: That is true. I am reasonably sure we can get him on the key list. MR. JORDAN: The Committee has refused to put adminis- trative positions in the Bureau on the key list. Regraded Unclassified 195 - 2 - MR. BELL: That is true, but this is different. This is a recent reclassification. We have had no oppor- tunity to put this on the key list. Actually the man has to be an accountant, and if we don't work it one way, we will another. H.M.JR: Are we asking three months or six months? MR. BELL: In the case of Adams? I think he ought to be deferred for six months. H.M.JR: It doesn't say here. MR. JORDAN: You see, all of our requests go over for six months and they sometimes cut them down. H.M.JR: That is all right. (The Secretary signs the deferment application of Charles W. Adams, attached) Is that all? MR. BELL: Yes, sir. Regraded Unclassified # 1 196 DEFERMENTS April 19, 1944. Title Age No. of children INTERNAL REVENUE: Beott, Matthew J. Chief, Employment Tax 37 4 Division (Arizona) Siegle, Sol Agent 34 None MINT BUREAU: Neisser, Philip B. Asst. Supt. of Melting and 33 1 Refining (Philadelphia) CUREMENT DIVISION: Taggart, Maurice J. Asst. Chief, Finance Div. 36 2 Weiss, Basil P. Chief, Lend-Loase Transporta- 30 1 tion and Storage Division SUPER'S OFFICE: Issace, Hayden B. Fiscal Accountant 34 1 BAR FINANCE DIVISION: Henry, Edgar Cowden Deputy Manager (Texas) 33 1 Deferment for the above 7 employees is recommended by the Agency Committee: p/ Charles S. Bell with I approve all of the above cases the exception of request for deforment of Maurice J. Taggart: Jaseph a.Jordan Approved: APR 21 1944 (Signed) H. Morgenthau, Jr. Secretary of the Treasury. Regraded Unclassified II 197 April 19, 1944 The Committee on Deferments gives approval to the attached request for the deferment of Mr. Charles W. Adams, Assistant to the National Director, War Finance Division. Mr. Adams is 31 years of age, is married and has two children. Mr. Adams exercises overall administrative control of the activities of the War Finance Division, including the headquarters office in Washington and 156 field offices; coordinates the work of the two branches of the organisation (departmental and field); makes executive decisions pertaining to all administrative matters; formulates basic policies and carries out the National Director's desires in connection with all aspects of the program. Because of Mr. Adams' wide experience and training derived in carrying on this work since the inception of the organisation, and his knowledge of the entire program as it relates to both the departmental and field services, the loss of his services would seriously impair the War Bond activity. Charles S. Bell acting Chairman Jaseph a.Jandan. Approved: APR 2 1 1944 (Signed) H. Morgenthau, Jr. Secretary of the Treasury w Regraded Unclassified 198 April 21, 1944 9:40 a.m. APPEARANCE BEFORE CONGRESSIONAL COMMITTEES Present: Mr. Smith Mr. Shaeffer Mrs. Klotz H.M.JR: Good morning. Patman thinks it will be helpful if the press was in this afternoon on account of this fellow White. But I don't see how we can let them in this afternoon if we don't let them in this morning. I don't think we will let the press in. MR. SMITH: You mean into the sessions? H.M.JR: Yes. This is Washington. This is the Office of the Secretary of the Treasury. MR. SMITH: I didn't know what you were talking about. I am not sure that Rayburn isn't planning, because he said something yesterday very clearly about this being open to the public, and I was going to check up, but there is no way to do it. H.M.JR: We can check up when we go on the Hill. I don't think it should be. MR. SMITH: I don't think it should be this morning because of the - I don't think you dare have a meeting this morning because they will have it before the Senators have it. I think that is wrong. H.M.JR: Well, get organized. I will be ready in & couple of minutes. Regraded Unclassified 199 - 2 - MR. SMITH: There is one word that Mr. Bernstein says is vital that we stick in on Page 16. MR. SHAEFFER "Economic policy" isn't it? I have it in this mimeographed copy. MR. SMITH: On Page 16. "Any other agreements." H.M.JR: What line? MR. SMITH: Second line. u few other agreements" - it should be, "...few other economic agreements." H.M.JR: I will be outside in a few minutes. Any leaks from last night? MR. SHAEFFER: No, sir. Not a line in the paper. The The Journal columnist had a piece quoting Sol Bloom. H.M.JR: Do you think I should try to do anything with Pearson about when they saw the Secretary - about a stenographer taking notes? He keeps talking about my having dictaphones all the time. MRS. KLOTZ: I wouldn't. If I would say anything to him, I would have him for lunch. MR. SHAEFFER: Yes. MR. SMITH: I think that will be good, if you could take it. I don't think that is damaging. That is just so much noise. MRS. KLOTZ: And I would laugh at it. MR. SMITH: If you were anybody but the Secretary of the Treasury, it would be alarming, but I am not sure that it is such a terribly bad idea for the Secretary of the Treasury to be cautious. MR. SHAEFFER: It wasn't printed locally. Regraded Unclassified 200 April 21, 1944 12:23 p.m. HMJr: Hello. Operator: Ambassador Gromyko. HMJr: Hello. Ambassador Gromyko: How do you do, Mr. Secretary? HMJr: How are you? G: Thank you. I am all right. How are you today? HMJr: Fine. Well, we had a very good message from Mr. Harriman. G: Yes, I am familiar with it. HMJr: You are familiar? G: Yes. HMJr: And I am very happy about it. G: Uh huh. HMJr: And we've sent an answer through Mr. Harriman to Mr. Molotov. G: Uh huh. HMJr: But I wanted to, also, send one through you. G: Uh huh. HMJr: And -- telling them how happy I am that I was able to tell the Committee this morning G: I will do HMJr: that the Soviet Government was going to associate themselves with us. G: He's already advised us. HMJr: Excuse me? G: He has already advised us. Regraded Unclassified 201 - 2 - HMJr: I don't understand that. G: We have been -- did you receive the full text which was handed to the Ambassador? HMJr: I am not sure. The trouble is that the one that was handed to the Ambassador came through to us and it was very much "garbled". G: I see. Well, Mr. Secretary, we will transmit to you the very short, very brief text of the -- which was handed to the Ambassador by Mr. Molotov. HMJr: Could I get that before a quarter of two? G: Before a quarter of -- yes, you will get it. HMJr: And I'll be here in my office if he would come but before G: Yes. HMJr: a quarter of two. G: Yes. Because I received it and I am expecting the chauffeur will arrive within several minutes to the Embassy and I will give this text to him HMJr: Yes. G: and will ask him to transmit it to you immediately. HMJr: Here at the Treasury. G: All right. HMJr: Because I go back up again to testify before the House. G: All right. The best wishes for you in this difficult work. HMJr: Well, you'll be interested I was testifying and Senator Vandenberg, who 18 you know who he 18. G: (Laughs) I think I know a little bit. Regraded Unclassified - 3 - 202 HMJr: Yes. Well, Senator Vandenberg whispered to me. He said, "Henry, I'm for this plan." G: Uh huh. HMJr: So that's -- makes it a success in the Senate, if he's for it. G: I see. I see. Well, I am delighted, too, that you and I received such a wire. HMJr: Yes, it gives me a very happy feeling and the experts will -- they'll get together. If we can't do any other way, we'll give them some Vodka and I'll give them some American Bourbon. G: (Laughs) HMJr: And we'll make the Russians drink the Bourbon and the Americans drink the Vodka and then they'll get together. G: (Laughs) That is right. HMJr: How's that? All right. Thank you. G: Thank you for calling. HMJr: Thank you. G: Good bye. 203 April 21, 1944 Mr. Collado took with him up on the Hill the cable which the State Department received from Harriman for Mr. Morgenthau. He delivered it to Mr. Morgenthau at the Committee hearing where Mr. Morgenthau was testifying this morning on the establishment of an International Monetary Fund. The hearing was adjourned for a couple of minutes while Mr. Morgenthau read the cable, and Bernstein, Collado and Smith left the hearing and drafted a reply, which the Secretary read to the Committee. The reply is attached hereto. 204 United States Senate WASHINGTON, D.C. We have just received a message from Moscow asseriate theruselves with that the Soviet experts agree with the general principles of the Koint Statement, and that the Joint Statement will be published in Moscow. There are some points of detail on whSch they wish to continue discussion after the principles have been published. 160% ey Statement of Secretary Morgenthau before Sen. 205 Coms. on Foreign Relations, Banking and Currency, and the Special Committee on Post-War Economic Policy and Planning, and before the House of Representative Coms. on Foreign Affairs Ways and Means, Banking and Currency, Coinage, Weights and Measures, and Special Com. on Post- War Economic Policy and Planning Friday, April 21, 1944 206 Gentlemen: I am happy to tell you today that technical experts of the United Nations have agreed upon a set of basic principles for an International Monetary Stabilization Fund. This is a great step forward. It is of greatest importance to all of us who believe that the nations of the world can cooperate in dealing with international economic problems. Technicians representing some of these thirty nations have prepared a joint statement of the principles which are agreed upon. This statement does not, of course, bind any government to participate in the Stabilization Fund, though it does mean that the Fund will be recommended to each of the governments as a practical means of meeting post-war monetary problems. 207 - 2 - I want to call particular attention to some of the facts contained in this joint statement, but before I do that, I should like to review with you some of the things that have happened since I appeared before these Committees on October 5 of last year. At that time, I told you I would like to keep you informed of progress, and accordingly I appreciate this opportunity to bring you up to date. Since I last talked to you, we have discussed the principles of the International Stabilization program with bankers, labor representatives and other interested groups in Washington, Chicago, Boston, Philadelphia, New York, and other cities. 208 - 3 - Out of these meetings came helpful suggestions, many of which were incorporated in our plans. The vast majority of those with whom we have talked are inclined to look favorably upon the principle of co-operation to maintain stable and orderly exchange rates. Informed opinion seems to point to private investment on a world-wide basis as vital to post-war recovery and reconstruction; and the stabilization of currencies among the United Nations through the medium of an international fund, is generally believed to be a necessary prerequisite to this investment. 209 - 4 - I believe we cannot expect American business men, nor business men of any nation, to take major financial risks, immediately upon the heels of a catastrophic global war, without some assurance that steps have been taken to prevent their investments from being jeopardized by unduly fluctuating money values and severe exchange restrictions. Having studied the world picture after the last war, we are all agreed that an effort must be made to prevent, insofar as possible, harmful fluctuations of currency; and to prohibit deliberate manipulation of currencies in an effort to secure unfair competitive advantage in world trade. 210 - 5 - When I was here on October 5, I spoke of a projected International Bank for Reconstruction and Development. Because discussions on the Bank were initiated somewhat later they are not yet completely finished. I can tell you, however, that there is considerable support for the general principles embodied in the World Bank, and that good progress has been made. Those with whom we have discussed the problem of reviving post-war international investment regard the Bank as essential to the expansion of international trade and the maintenance of a high level of business activity. 211 - 6 - They believe it necessary to take steps to encourage and aid private investors in providing an adequate volume of long-term investment capital for productive purposes. The discussions we have had contemplate the establishment of a Bank for Reconstruction and Development to facilitate long-term investment capital through private financial agencies by guaranteeing and participating in loans made by private investors. The Bank would also supplement investment of private financial agencies, if this becomes necessary, by lending for productive purposes from its own resources when private capital is otherwise not available on reasonable terms. 212 - 7 - A full statement of recommendations on the establishment of such a Bank, and of the principles on which such a Bank should be based, is still in preparation by technicians. It is my hope that this statement of principles will soon be completed and that it will be issued later. Before it is published, I shall fully inform your Committees. Now I should like to explain briefly some of the basic principles upon which the technicians are agreed in connection with the International Monetary Fund. 213 - 8 - Here are the purposes and policies as set forth in the joint statement: (1) To promote international monetary cooperation through a permanent institution which provides the machinery for consultation on international monetary problems. (2) To facilitate the expansion and balanced growth of international trade and to contribute in this way to the maintenance of a high level of employment and real income, which must be a primary objective of economic policy. 214 - 9 - (3) To give confidence to member countries by making the Fund's resources available to them under adequate safeguards, thus giving members time to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity. (4) To promote exchange stability, to maintain orderly exchange arrangements among member countries, and to avoid competitive exchange depreciation. 215 - 10 - - (5) To assist in the establishment among member countries of multilateral payments facilities on current transactions, and to aid in the elimination of foreign exchange restrictions which hamper the growth of world trade. (6) To shorten the periods and lessen the degree of disequilibrium in the international balance of payments of member countries. 216 - 11 - The joint statement recommends that all of the United and Associated Nations subscribe approximately $8 billion to the Fund in the form of gold and local currency. The resources of the Fund would be available under adequate safeguards to help member countries to maintain exchange stability and to correct maladjustments in their balance of payments. Member countries would be able to buy foreign exchange from the Fund with their own currencies, to the extent of their quotas, in order to meet international payments consistent with the purposes of the Fund. 217 - 12 - The par value of currencies of member countries would be expressed in gold and could be changed only at the request of member countries after consultation and approval of the Fund. The Fund would approve a requested change in parity only if it were essential to correct fundamental disequilibrium. Prompt consideration would be given to requests for necessary adjustment of exchange rates. Member countries would not allow their exchange rates to fluctuate outside a narrow range based on the agreed gold parity. 218 - 13 - Voting power in the Fund would be closely related to quotas. A member country could withdraw from the Fund immediately by giving notice in writing, and obligations would be liquidated within a reasonable time. During the period of transition following the war, member countries would be permitted to retain their exchange controls with the expectation that these would gradually be relaxed. 219 - 14 - I am frank to say that in my opinion the agreement of the technical experts to these principles constitutes a long step on the way toward preventing a breakdown of currencies and the imposition and retention of restrictive and discriminatory exchange measures after the war. Through international cooperation now we can assure a stable and orderly pattern of post-war exchange rates. The purposes set forth in this Joint Statement have long been the international monetary policies of the United States. For years it has been our objective to have these policies adopted by other countries. 220 - 15 - We know of no better way of assuring general adherence to these policies than through international cooperation in an International Monetary Fund. We believe that it is of the greatest importance that all of the United Nations are in agreement on the best means to deal with these international financial problems after the war. This is concrete evidence that the United Nations can and will work together in establishing a peaceful and prosperous world just as they are now fighting together to destroy tyranny and oppression. International cooperation on monetary and financial matters is the keystone of successful cooperation on all international economic problems. 221 - 16 - Unless we agree to expand world trade and develop the economic world economy, few other agreements which we might make will or can be effective. The tentative proposals that have been under discussion by the technical experts are part of a program for cooperation on international economic problems among the United Nations. The objectives of this program are the expansion and development of international trade, the restoration of international investment for productive purposes, the maintenance of stable and orderly exchanges. Through these means, we can contribute to a high level of employment and production. 222 - 17 - The establishment of an International Monetary Fund and a Bank for Reconstruction and Development are important steps in the attainment of the objectives of this broad program. I want to emphasize again that the discussions up to now have all been of a technical nature and exploratory in character. Whatever has been done represents the views of the technical experts of this country and of other countries that have been studying these questions. The United States is not in any way committed until Congress has taken action. 223 - 18 - It is my hope that after studying the recommendations of the technical experts, the governments of the United Nations will come to the conclusion that there is sufficient basis of agreement at a technical level to warrant the convening of a formal conference. I am happy to say that the President has authorized me to state that if a conference is held, it is his intention to invite direct Congressional participation in the work of the United States Delegation. FOR RELEASE AFTER 8:00 P.M., 224 FRIDAY, APRIL 21, 1944 Joint Statement by Experts on the Establishment of an International Monetary Fund Sufficient discussion of the problems of international monetary cooperation has taken place at the technical level to justify a statement of principles. It is the consensus of opinion of the experts of the United and Associated Nations who have participated in these discussions that the most practical method of assuring international monetary cooperation is through the establishment of an International Monetary Fund. The principles set forth below are designed to constitute the basis for this Fund. Governments are not asked to give final approval to these principles until they have been embodied in the form of definite proposals by the delegates of the United and Associated Nations meeting in A formal conference. I. Purposes and Policies of the International Monetary Fund. The Fund will be guided in all its decisions by the pur- poses and policies set forth below: 1. To promote international monetary cooperation through 8 permanent institution which provides the machinery for con- sultation on international monetary problems. 2. To facilitate the expansion and balanced growth of international trade and to contribute in this way to the maintenance of a high level of employment and real income, which must be a primary objective of economic policy. 3. To give confidence to member countries by making the Fund's resources available to them under adequate safe- guards, thus giving members time to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity. 4. To promote exchange stability, to maintain orderly exchange arrangements among member countries, and to avoid competitive exchange depreciation. 5. To assist in the establishment of multilateral pay- ments facilities on current transactions among member coun- tries and in the elimination of foreign exchange restrictions which hamper the growth of world trade. 6. To shorten the periods and lessen the degree of dis- equilibrium in the international balance of payments of member countries. Regraded Unclassified 225 - 2 - II. Subscription to the Fund. a.s. A2.5 $1.2 billing u.k. 1. Member countries shall subscribe in gold and in 3.9 45' their local funds amounts (quotas) to be agreed, which will China amount altogether to about $3 billion if all the United and Associated Nations subscribe to the Fund (corresponding to about $10 billion for the world as a whole). 2. The quotas may be revised from time to time but changes shall require a four-fifths vote and no member's quota may be changed without its assent. 3. The obligatory gold subscription of a member coun- u.s. try shall be fixed at 25 percent of its subscription (quota) million $625 or 10 percent of its holdings of gold and gold-convertible exchange, whichever is the smaller. III. Transactions with the Fund. 1. Member countries shall deal with the Fund only through their Treasury, Central Bank, Stabilization Fund, or other fiscal agencies. The Fund's account in a member's currency shall be kept at the Central Bank of the member country. 2. A member shall be entitled to buy another member's currency from the Fund in exchange for its own currency on the following conditions: (a) The member represents that the currency de- manded is presently needed for making pay- ments in that currency which are consistent with the purposes of the Fund. (b) The Fund has not given notice that its holdings of the currency demanded have become scarce in which case the provisions of VI, below, come into force. (c) The Fund's total holdings of the currency offered (after having been restored, if below that figure, to 75 percent of the member's quota) have not been increased by more than take Quota more will 25 percent of the member's quota during the than + years previous twelve months and do not exceed de ex X and you 200 percent of the quota. any country Regraded Unclassified 226 - 3 - (d) The Fund has not previously given appropriate notice that the member is suspended from making further use of the Fund's resources on the ground that it is using them in a manner contrary to the purposes and policies of the Fund; but the Fund shall not give such notice until it has presented to the member concerned a report setting forth its views and has allowed a suitable time for reply. The Fund may in its discretion and on terms which safe- guard its interests waive any of the conditions above. 3. The operations on the Fund's account will be limited to transactions for the purpose of supplying a member coun- try on the member's initiative with another member's currency in exchange for its own currency or for gold. Transactions this provided for under 4 and 7, below, are not subject to limitation. 4. The Fund will be entitled at its option, with a view to preventing a particular member's currency from be- coming scarce: (a) To borrow its currency from a member country; (b) To offer gold to a member country in exchange for its currency. another member's currency from the Fund in exchange for its 5. So long as a member country is entitled to buy own currency, it shall be prepared to buy its own currency from that member with that member's currency or with gold. This shall not apply to currency subject to restrictions in have accumulated as 8 r^sult of transactions of a current conformity with IX, 3 below, or to boldings of currency which account nature effected before the removal by the member country of restrictions on multilateral clearing maintained or imposed under X, 2 below. 6. A member country desiring to obtain, directly or indirectly, the currency of another member country for gold This shall not preclude the sale of nowly-mined gold by & to acquire the currency by the sale of gold to the Fund. is expected, provided that it can do so with equal advantage, gold-producing country on any market. 7. The Fund may also acquire gold from member countries in accordance with the following provisions: (a) A member country may repurchase from the Fund for gold any part of the latter's holdings of its currency. Regraded Unclassified - 4 - 227 say payments(b) (b) So long as a member's holdings of gold and gold- convertible exchange exceed its quota, the Fund must be me we in selling foreign exchange to that country shall good if country require that one-half of the net sales of such has more to guova. exchange during the Fund's financial year be paid for with gold. (c) If at the end of the Fund's financial year a member's holdings of gold and gold-convertible my must the increasin exchange have increased, the Fund may require has dings to up to one-half of the increase to be used to charp local repurchase part of the Fund's holdings of its currency so long 88 this does not reduce the nency from Jund. Fund's holdings of a country's currency below 75 percent of its quota or the member's hold- ings of gold and gold-convertible exchange below its quota. IV. Par Values of Member Currencies. 1. The par value of a member's currency shall be agreed with the Fund when it is admitted to membership, and shall be d expressed in terms of gold. All transactions between the Fund eld. and members shall be at par, subject to a fixed charge payable by the member making application to the Fund, and all transac- tions in member currencies shall be at rates within an agreed percentage of parity. 2. Subject to 5, below, no change in the per value of 8 member's currency shall be made by the Fund without the coun- try's approval. Member countries agree not to propose a change in the parity of their currency unless they consider it appropriate to the correction of a fundamental disequi- librium. Changes shall be made only with the approval of the Fund, subject to the provisions below. 3. The Fund shall approve a requested change in the par value of 8. mamber's currency, if it is essential to the correc- tion of A fundamental disequilibrium. In particular, the Fund shall not reject a requested change, necessary to restore equilibrium, because of the domestic social or political pol- icies of the country applying for a change. In considering & requested change, the Fund shall take into consideration the extreme uncertainties prevailing at the time the parities of the currencies of the member countries were initially agreed upon. 4. After consulting the Fund, a member country may change the established parity of its currency, provided the proposed change, inclusive of any previous change since the establishment of the Fund, does not exceed 10 percent. In the case of application for 8 further change, not covered by Regraded Unclassified 228 - 5 - the above and not exceeding 10 percent, the Fund shall give its decision within two days of receiving the application, if the applicant so requests. 5. An agreed uniform change may be made in the gold value of member currencies, provided every member country having 10 percent or more of the aggregate quotas approves. V. Capital Transactions. 1. A member country may not use the Fund's resources to meet a large or sustained outflow of capital, and the Fund may require a member country to exercise controls to vision is not intended to prevent the use of the Fund's prevent such use of the resources of the Fund. This pro- resources for capital transactions of reasonable amount re- quired for the expansion of exports or in the ordinary course of trade, banking or other business. Nor is it in- tended to prevent capital movements which are met out of a member country's own resources of gold and foreign exchange, provided such capital movements are in accordance with the purposes of the Fund. 2. Subject to VI below, 8 member country may not us 3 its control of capital movements to restrict payments for current transactions or to delay unduly the transfer of funds in settlement of commitments. VI. Apportionment of Scarce Currencies. 1. When it becomes evident to the Fund that the demand for a member country's currency may soon exhaust the Fund's holdings of that currency, the Fund shall so inform member countries and propose an equitable method of apportioning the scarce currency. "Then & currency is thus declared of the scarcity and containing recommendations designed to scarce, the Fund shall issue a report embodying the causes bring it to an end. 2. A decision by the Fund to apportion a scarce cur- rency shall operate as an authorization to a member country, after consultation with the Fund, temporarily to restrict the freedom of exchange operations in the affected currency, rationing the limited supply among its nationals, the member and in determining the manner of restricfing the demand and country shall have complete jurisdiction. VII. Management. 1. The Fund shall be governed by & board on which each member will be represented and by an executive committee. The executive committee shall consist of at least nine mem- bors including the representatives of the five countries with the largest quotas. Regraded Unclassified 229 . 6 - vadeo 2. The distribution of voting power on the board and the executive committee shall be closely related to the quotas. R. spc. 5p.e. 3. Subject to II, 2 and IV, 5, all matters shall be settled by A majority of the votes. 4. The Fund shall publish at short intervals a state- ment of its position showing the extent of its holdings of member currencies and of gold and its transactions in gold. VIII. Withdrawal. 1. A member country may withdraw from the Fund by giv- ing notice in writing. 2. The reciprocal obligations of the Fund and the country are to be liquidated within 8 reasonable time. 3. After a member country has given notice in writing of its withdrawal from the Fund, the Fund may not dispose of its holdings of the country's currency except in accord- ance with t' e arrangements made under 2, above. After a country has given notice of withdrawal, its use of the resources of the Fund is subject to the approval of the Fund. IX. The Obligations of Member Countries. 1. Not to buy gold at a price which exceeds the agreed parity of its ourrency by more than 8 prescribed margin and not to sell gold at & price which falls below the agreed parity by more than B. prescribed margin. 2. Not to allow exchange transactions in its market in currencies of other members at rates outside a prescribed range based on the agreed parities. 3. Not to impose restrictions on payments for current international transactions with other member countries (other than those involving capital transfors or in accordance with VI, above) or to engage in any discriminatory currency arrangements or multiple currency practices ithout the approval of the Fund. X. Transitional Arrangements, 1. Since the Fund is not intended to provide facilities for relief or reconstruction or to deal with international indebtedness arising out of the war, the agreement of & member country to provisions III, 5 and IX, 3 above, shall ments at its disposal to facilitate the sottlement of the not become operative until it is satisfied AB to the arrange- Regraded Unclassified 230 - 7 - balance of payments differences during the early post-war transition period by means which will not unduly encumber its facilities with the Fund. 2. During this transition period member countries may maintain and adapt to changing circumstances exchange regula- tions of the character which have been in operation during the war, but they shall undertake to withdraw as soon 88 possible by progressive stages any restrictions which im- pede multilateral clearing on current account. In their exchange policy they shall pay continuous regard to the principles and objectives of the Fund; and they shall take all possible measures to develop commercial and financial relations with other member countries which will facilitate international payments and the maintenance of exchange stability. 3. The Fund may make representations to any member that conditions are favorable to withdrawal of particular restrictions or for the general abandonment of the restric- tions inconsistent with IX, 3 above. Not later than three years after coming into force of the Fund any member still retaining any restrictions inconsistent with IX, 3 shall consult with the Fund as to their further retention. 4. In its relations with member countries, the Fund shall recognize that the transition period is one of change and adjustment, and in deciding on its attitude to any pro- posals presented by members it shall give the member country the benefit of any reasonable doubt. 231 Transmitted by Secret Service Agent Slye at 4:20 Sent to Mr. Latta's Office To be sent by pouch. Copy of telegram # 1380 from Mosson imbred. 232 April 21, 1944 My dear Mr. President: I thought you would like to know some of the things that have been happening behind the scenes in connection with our testifying before the Senate and House Commit- tees. Only by telling the English that I would go up and testify whether I heard from them or not were we finally able to get an agreement out of them to go along with the principles involved. The Russians also have been stalling us, and yesterday I called up both Harriman in Moscow and Ambassador Gromyko here to put all the pressure I could on them to get the Russians to come along. I never got an answer from the Russians until I was in the middle of my testimony before the four Committees in the Senate this morning. You will find the message attached to this letter. I thought you would be most pleased that the Soviet Government de- cided to go along with us "to secure due effect in the rest of the world". In other words, they want to be associated with us in the eyes of the world. State and Treasury both think this is highly significant, as I am sure you will also. Before leaving the hearing in the Senate, Senator Vandenberg whispered to me that he would support this program. The fact that I was able to tell the Senate that you would appoint members of Congress to the American Delegation made a great hit. I an dictating this letter between hearings, so I do not know how I will be received in the House this afternoon, or what kind of publicity we will get in the morning papers, but I am hoping for the best. Regraded Unclassified 233 - 2 - I was 80 happy to learn that both Jimmy and Franklin received highly deserved promotions, and may I extend my congratulations to you as their father. With warm regards, Sincerely yours, (Signed) Henry The President, The White House. 234 MEMORANDUM FOR THE SECRETARY. April 21, 1944. Mail Report Although this week's mail was heavier than that of last week, no new subject appeared. Bond matters accounted for roughly 70%; the other 30% of the week's receipts concerning taxes, checks, cur- rency, and now and then 8. Foreign Fund problem. The Fifth Drive continued to figure prominently in the mail. Our correspondents submitted slogans, songs, and poems; offered personal services; and out- lined possible drawbacks that might be overcome by preliminary planning. Several writers wanted new types of bonds, especially small ones. Many asked that the $5,000 limit be raised 50 that quotas may be reached more easily by sale of E Bonds during the next Drive. While there were again very few complaints about delays in receiving bonds, there were 20 reports of overdue interest. The 67 bonds submitted for redemp- tion through this office represent an average for recent weeks. Requests for tax refunds, some of them pathet- ically urgent, rose sharply. Evidently this is going to be a sore spot in Treasury relations with the public, particularly the new taxpayers. There were few addi- tional requests for simplification of forms, and per- haps a dozen appeals for reconsideration of deduction of charitable donations in the proposed Withholding Act. Occasionally a letter would point out that be- cause of present rates, the manpower shortage is made worse inasmuch as workers refuse to put in overtime, only to have their wage gains nullified by the taxes that are imposed. Publicity about the decline in U. S. gold holdings prompted several inquiries. A number of these letters were submitted by Senators and Congressmen. Gabrice Fortush 235 General Comments Mrs. George V. Linden, Dallas, Texas, wrote to the President, enclosing a letter from her husband, who is & Corporal in the Army in Africa. The correspondence was referred to the Treasury for handling, and the letter from Corporal Linden reads in part as follows: If So the fellows at your office have heard about the money being made on the exchange of currency. Yes, some of the boys have made quite 8. nest egg for themselves by this method. It works this way: The American value of the franc, for instance, is $.02, but the franc may be purchased on the black market for $.01. Accordingly, on the exchange of a black market franc one would make 100% profit. You can imagine how much one could accumulate by this method. The biggest steal though is accomplished on the exchange of Chinese currency. An American dollar can be exchanged for 120 Chinese dollars on the black market, and these black market dollars can then be converted back to American dollars via draft at 40 Chinese dollars for 1 American dollar, a neat profit of 200%, i.e. 3 for 1. For every winner there must be a loser, and the loser in these steals is the U. S. Government, for both the franc and the Chinese dollar are babies of the U. S. Treasury. Maybe it is smart like the lads told you, but it does seem strange for Americans to fight for their country with their hands and their hearts while kicking her in the stomach with their feet. Your own husband may be overconscientious, but after working in the Internal Revenue for 80 many years, I instinctively yearn to pro- tect the Government's interest. The War Department, however, has issued regulations prohibiting a member of the Armed Forces to use his position for personal gain via the franc black market route, but as far as I know, the Chinese swindle racket is still in vogue. 236 - 2 - Norman Somers, Binghamton, N.Y. I think that you are doing a tremendous job very well. I know that you must be very busy steering our country through this crucial period, but I thought I'd write to you and add & bit of encouragement. Perhaps you face as many problems as Alexander Hamilton, and I am sure you will take care of them as well as he. # # I am 15 years old and am in the 9th grade. I heard a man on the radio the other day who told about those filthy counter- feiters. We have 80 many opportunities in the United States today, and yet those people have to try to make money the easy way. They should be out working in war plants, helping our war effort in 8. nice clean way in- stead of sneakily turning out ersatz bills. Keep up the good work, Mr. Morgenthau. Dr. Herman Sharlit, New York City. My converted war risk insurance of World War I will become completely paid up next year. It has occurred to me that our Government should consider offering holders of such matured policies annuities on the surrendez of the said policies. The annuity return, beginning at the age which insurance practices make feasible, should be based not alone on the cash surrender value of the policy, but should include old age and war veteran benefits which would ultimately accrue to war veterans. # To the extent to which war veterans may be encouraged to convert and maintain their policies to maturity, such a proposal as herein suggested should go a long way towards automatically solving the veterans' pen- sion problem. Naturally, should such an offer be put into effect, those accepting annuities would be ex- cluded from any veterans' pensions that would ulti- mately be voted. The adjusted service bonds of World War I, which reach maturity in June, 1945, also merit consideration at this time. I trust that simple machinery will be set up for exchanging those bonds for some series next year. It is inconceivable that those of us who overcame the temptation these many years to cash them, would seek to redeem them next year. *** 237 - 3 - Anna Laslo, Washington, D. C. I take the liberty of approaching you in this rather unusual way, but I can't think of any other means by which I would be able to help the cause of the European Refugees, which cause is the dearest to my heart. I have no cash on hand which I could offer to aid this most worthy cause, but I have some 100 dollars in the U. S. Retirement Fund, which accumulated during my employ- ment with the U. S. Government from the 18th of June 1942 to the end of August 1943. I would like to contri- bute this sum toward the fund of the European Refugee Board. I sincerely hope that I'm not imposing on you too much when I'm pleading with you to kindly use your good influence to get that money paid out to you as soon as possible, and then please use it toward the fund of the European Refugee Board. I would consider it & privilege if you would kindly accept this little contribution from me. ### Senator Arthur Capper sends the following letter he has received from Mark D. Mitchell, Independence, Kan. Henry Taylor has broadcast over the radio the news that we are printing enormous quantities of money to take care of military currency, and shipping it to foreign countries; that gold is being taken out of the Depository at Fort Knox, Kentucky, and shipped to foreign countries like China, India and Arabia for the alleged purpose of stabilizing the currency of these nations. It seems that these shipments of currency printed in the United States is a contingent liability of the Federal Government, and that no systematic entry has apparently been made covering this liability, and that it seems to me a thorough investigation of this procedure on the part of Congress is a necessary thing in order to protect the stability of our currency here at home, as well as to protect the War Bonds which we have bought, and protect the value of our life insurance policies. 238 - 4 - Favorable Comments on Bonds W. C. Rogers, Arkansas Senate, Nashville, Arkansas. For two or three days in succession, I have heard the Commercial Bank, of Shreveport, Louisiana, in their advertising broadcasts, refer to their facil- ities for assisting those who have been patriotic enough to buy bonds. I may be mistaken, but this seems to me to be demoralizing to the legitimate sale of bonds in that it will give the average a thought that he can get rid of his bonds any time after sixty days. I think this fact, though true, should always be soft-pedaled in selling War Bonds. I believe 8. note to that bank in your official capacity will be all that is necessary. My best wishes, Mr. Morgenthau. You are doing 8. wonderful job and doing it well. 239 - 5 - Unfavorable Comments on Bonds J. L. Shepherd, Milan, Missouri. ***A man and his wife, who were on Old Age Assistance roll, owned eighty acres of land without any improvements. Last May they sold same with the idea of buying 8. small piece of property 8.8 a home. After paying some debts, they had around $700 left in the bank. # # * When the Bond Drive came along, they were prevailed upon to put this money in War Bonds until such time as they could buy a home. They did not do this until they consulted the cashier of the bank, who was County Chairman of the Bond Drive, as to whether they could get the money back when needed, as it takes a little time, as you know, to cash these bonds. He informed them that he would take care of them as soon as they bought property, without having to wait to cash the bonds. They then bought bonds with this money amount- ing to $625. Then along comes the investigator of the O.A.A. and suspends them from Old Age Assistance because they have these bonds; in other words, penalizing them for letting the Government have the use of their money until such time as they could find a home to buy. I have talked with the cashier of the bank (who has been very active in the Bond Drives) and he agrees that if this action is not challenged, it is going to hurt the bond effort in this County, and if it is the policy of the O.A.A. Commission of Missouri, it will hurt the State Bond effort. Looks like a case of bond sabotage, pure and simple. James V. B. Post, West Orange, N. J. # Evidently the Treasury Department in Washington, and others, have not been informed of this paper shortage as we have just been the recipient of a citation from the Treasury for services rendered on behalf of the last War Loan Drive. Most of the people I have spoken to, who assisted in the last Drive, felt it their duty to assist in whatever Regraded Unclassified 240 - 6 - manner they could, but they did not expect to receive any citations for doing this work. The one I received is only one of millions sent out from Washington, and I have seen other citations four or five times bigger than this one, which have been given, as near as I can make out, to practically anyone working in a war plant. Besides using critical paper, I know very well that it took at least the services of several hundred people, or more, to design and print these citations, plus the thousands of stenographers re- quired to address the envelopes. The cost of doing all this work just at a. time when the country cer- tainly should be economizing as much as possible, runs up to a mere one hundred million dollars or more. We feel that this is all 80 unnecessary with the short- age of manpower and everything else. *** E. J. Connor, Connor Company - - Wholesale Plumbing and Heating Supplies, Peoria, Illinois. The writer has been offered and his services have been accepted to do more or less 100% work for a few months in connec- tion with the next bond campaign. # In discussing the failure of many Illinois rural counties to come even close to their quotas, 8. banker told me these facts. Farmers are not using the banks either in de- positing their receipts and transactions. Neither are they using safety deposit boxes. All of their deals are now selling for cash, and paying the same way. They don't put the money in the bank, as thereby they have records, and income tax auditors cannot check them, and they want to forget and have no records. *** They don't want to and don't do their share of bond buying. #** Labor and business pay their share of taxes and buy bonds, because they can't do other- wise, perhaps, but results are the same. I know the farmers - my business is indirectly with them. Also own some farms. Farmers are exceedingly prosperous and should do their share, but are not. # * But farmers should be scared, that would be much better selling argument than logic or patriotism. 241 - 7 - Robert E. Ausenbaugh, Evansville, Ind. There is a problem existing at the Evansville shipyard - contrac- tors Missouri Valley Bridge and Iron Company - con- cerning the payroll bond deductions. It has been bad all along, and is growing worse all the time. Employees have from 4 to 5 bonds due them all the time before they receive perhaps 1 in 1 month. The thing is getting worse, and if not corrected, the employees are going to stop the payroll plan. As for myself, I am sure we will get the bonds due us, sometime, and would buy all the bonds I can afford anyway. But lots of employees, less interested in bond buying than I am, are almost ready to quit on this account, and lots of them would not buy bonds otherwise. *** 242 - 8 - Unfavorable Comments on Taxation G. E. Avery, Wethersfield, Conn. In December 1942 I bought & few United States Treasury Notes, Tax Series A, for the purpose of paying future income tax obligations to the Government. Since then, the withholding tax law has been passed, and I cannot use the two that I have left for such purpose, as the balance of my tax due each year is less than the face value of the notes. Will you advise me as to what to do with these notes, and if presented for redemption will I lose the accrued interest, and thus be penalized for trying to cooperate with the Govern- ment? This same letter was sent to the local Collec- tor of Internal Revenue on February 7th, to which I have had no reply. Louis L. Baere, Peerless Fibre Company, Cohoes, N.Y. The currently existing high tax rates are having a strange repercussion on the manpower situation in our country today. Due to the rates, a good many of the working people feel that taxes take the bulk of their overtime wage from them 80 that, as a result, numbers of men and women alike have refused to work additional hours. This situation has held true in my own plant here and also prevails in 8. good many plants throughout the country, according to my con- versations with other mill owners. It has occurred to the writer that the Treasury Department should endeavor, both in the interests of realizing greater taxes and at the same time promoting maximum use of our manpower, to put out some publicity in order to ameliorate this situation. *** A. E. Hotson, Shreveport, La. On my attempting to file Form 1040-ES with the local office of the Bureau of Internal Revenue, Shreveport, La., as required, I was refused & receipt in any form. In view of the ease with which slips of paper can be mislaid, wrongly Regraded Unclassified 243 - 9 - filed or destroyed, I believe my request was reasonable, and that no honest person, whether Federal employee or otherwise, would or should re- fuse a receipt when cash or important papers are tendered. Kindly advise if instructions covering issuance of receipts have or will be issued from your office. Palmer Conger, Philadelphia, Pa. Will you please give me the information about my returned tax money which the Government owes me? For I have overpaid my taxes for 1943, the amount is $69.21 which I was told in February 1944 that the Government would give me this money back in a month or six weeks. I have not received this money yet and I would like to know when I will get it. I need this money now to help pay my rent, and to carry me till I get a payday. I would be very grateful if you can send me the $69.21 as soon as you can. Thanking you kindly. Copy of letter written by Ray Alvis, McAllen, Texas, to Frank Scofield, Collector of Internal Revenue, Austin, Texas. I have your letter of March 20th say- ing that you had received my protest dated January 25th, but that I should have sent it to Dallas. Now on April 7th you sign a letter saying that I failed to file a protest. The cheapest and easiest thing that I can do is to pay you your $28.00 that I do not owe you, and at least be rid of you for the moment. It is the principal of extortion involved. Being dogged to exasperation. I spent a great deal of time with your field investigator. Offered to furnish proof of any entries that he might question. When he was making out his so-called "exhibit", I insisted that he was duplicating figures and that it was in- correct. He didn't want the facts though - he just wanted to make all the trouble that he could. You suggest that I go to the Tax Court in Washington. If gas is available later in the year, I will most Regraded Unclassified 244 - 10 - certainly do it. Travelling conditions are too diffi- cult now. I would like to see my Senator, Congressman and Mr. Morgenthau in person. Go ahead and carry your illegal and dishonest claim to court. I flatly refuse to pay you more than the law requires. If I have to, I would prefer to spend the rest of my time in Alcatraz than be hounded to death. Alex Rexion, Department of Cooperative Work, Fenn College, Cleveland, Ohio. On the income tax documents that we citizens must file we are continually reminded that we shall be penalized unless we do this or that on time, and in other ways dictated to by the Govern- ment. All of that is, I suppose, as it should be. But would it not be good if the Government itself practiced what it preaches? For instance, I overpaid my income tax last year, and requested that the Govern- ment refund me the sum I paid beyond that which was required by the Government. Nearly 40 days have passed since I filed my annual return, and as yet I have not received the money I have coming. I have more than $100 coming, and this would serve me well now instead of later in the year. The rumor is going the rounds that it is foolish for us to expect any refund from the Government. How true is this rumor? M. E. Peterson, Principal, Winnetka School, Canoga Park, California. Again I must protest at the excessive taxation on my salary. This time the particular pro- test is because I have been forced to pay far in excess of my actual tax. On my last return, March 15th, the Government owed me $96.00 which I have been promised as a refund. However, over the radio 8. few nights ago We were told that such refunds might not come to us for 8. year because "The Government simply hasn't got it". In making up my tax estimate I find that the Government, according to the present rate of with- holding, will owe me $76.00; and that is before any deductions for contributions, taxes, interest, and 245 - 11 - 80 on, are made. The amount will probably be over $100.00. Have you any reasonable explanation for the inability of your office to figure closer than this? We "white collar" people are literally beaten into the dust. *** The critical feeling which I have with reference to excessive taxation, and the fact that re- funds are not forthcoming, is shared generally by the many millions of "white collar" wage-earners in the United States. *** Emile Ramel, Brooklyn, New York. About three months ago I filed my income tax return with the office at Hoyt and Schermerhorn Streets 80 as to give that office a chance or plenty of time to check same before the week of the March 15th rush. I overpaid $28.85, based on my weekly salary, and asked for 8. refund, as I will be again overpaid for 1944, based on the 20% deduction at the source. Have heard nothing from them and could not get any information of a satisfactory nature in answer to my letter. Could your office do anything to expedite matters? 246 POBLYCTORY TREASURY DEPARTMENT BUY VISITED STATES WAR bonds PROCUREMENT DIVISION STAMPS WASHINGTON 25 OF THE DIRECTOR April 21, 1944 MEMORANDUM TO THE SECRETARY: M Sale of corrugated sheet steel, originally purchased for Lend-Lease, has just been completed. 3,172,000 pounds of steel were involved in this sale, and the price secured was $118,003.00. There were no other unusual activities today which seem to merit inclusion in this memorandum. Some study was devoted to the proposed Office of Price Administration Sup- plementary Order governing sales by Government agencies. Our general opinion is that the proposed regulations are much more complex than is necessary. Clifson E. Mack Director of Procurement Regraded 247 TREASURY DEPARTMENT & INTER OFFICE COMMUNICATION DATE April 21, 1944 TO Secretary Morgenthau FROM Mr. White HDW 1. Stabilization Fund's Gold Transactions During the three months ending March 31, 1944, the Stabilization Fund sold approximately $359.7 million in gold to foreign countries principally to be earmarked for their accounts with the Federal Reserve Bank of New York. Sales by countries were as follows: Country Sales in millions of dollars Afghanistan 5.985 Argentina 64.837 Bolivia .499 Chile 5.096 Colombia 15.050 Cuba 14.999 Guatemala 5.075 Haiti .500 Iran 4.000 Paraguay .500 Peru 1.995 Portugal 19.950 Salvador 2.063 Switzerland 19.951 Turkey 29.925 United Kingdom 150.288 Uruguay 7.482 Vatican City .499 Venezuela 10.969 Total 359.663 During the same period, the Stabilization Fund sold $15.7 million in gold to acquire local currency in India and 248 - 2 - the Middle East for the purpose of financing United States war expenditures. Sales by countries were as follows: Country Millions of dollars India 11.572 Iran 2.007 Egypt 2.079 Total 15.658 The Fund purchased approximately $5.0 million in gold from the earmarked account of the Royal Netherlands Govern- ment. In order to maintain its gold balance, it also purchased $341.5 million of gold from the Treasury General Fund. As & result of the above transactions there was a net decrease of approximately $28.7 million in the Stabilization Fund's gold holdings to about $14.3 million as of March 31. 2. Treasury Gold Stock During this quarter, the Treasury's gold stock decreased $337.7 million from $21,937.5 million to $21,599.8 million as of March 31. Known and estimated amounts of sales and acquisitions were as follows: - 3 - Sales Millions of dollars Sold to the Stabilization Fund 341.5 Sold to industry 7.0 Miscellaneous 5.1 Total 353.6 Acquisitions Newly-mined domestic 3.4 Imports sold directly to mints and assay offices 11.1 Miscellaneous (coin and scrap) 1.4 Total 15.9 Net decrease in the Treasury gold stock $337.7 3. Total Gold Holdings of the United States December 31, 1943 March 31, 1944 Treasury Gold Stock $21,937,509,984 $21,599,752,837 Stabilization Fund Gold 42,907,236 14,277,104 Total $21,980,417,220 $21,614,029,941 The decrease in the gold holdings of the Treasury and the Stabilization Fund during this quarter was $366.4 million. Regraded Unclassified TREASURY DEPARTMENT 249 INTER OFFICE COMMUNICATION AAK DATE April 21,1944 TO Secretary Morgenthau FROM Mr. White HDW Subject: Lend-Lease Exports to Russia 1. In February, 1944, United States lend-lease exports to Russia totalled approximately $200 million as compared with about $285 million in January, 1944. 2. Among the principal non-military items were: Motor trucks (all sizes) ($13 million) Wool cloth and dress goods ($10 million) Dried eggs ($7 million) Lard ($3 million) Canned meat, ex. chicken ($3 million) Wheat flour ($3 million) 3. Among the munitions sent were: 159 P-39 pursuit fighters 20 P-40 pursuit fighters 215 light and medium tanks 90 50 cal. aircraft machine guns 50 50 cal. anti-aircraft machine guns 192 40 mm. anti-aircraft guns 18 3 in. 50 cal. naval anti-aircraft guns 12 5 in. 38 cal. naval anti-aircraft guns 2,077 scout cars 1,122 motorcycles 273 railway freight cars 4. Shipments to Eastern Russia, presumably on Russian boats via for about $38 million of the total of approximately $200 Vladivostok or some other Siberian port, accounted million exported during the month under review. 250 TREASURY DEPARTMENT OFFICE OF THE SECRETARY April 21, 1944 CONFIDENTIAL Received this date from the Federal Reserve Bank of New York, for the confidential information of the Secretary of the Treasury, compilation for the week ended April 12, 1944, showing dollar disbursements out of the British Expire and French accounts at the Federal Reserve Bank of Now York and the means by which these expenditures were financed. EMB Poaraded 251 FEDERAL RESERVE BANK OF NEW YORK April 20, 1944. CONFIDENTIAL Dear Mr. Secretary: Attention: Mr. H. D. White I am enclosing our compilation for the week ended April 12, 1944, showing dollar disbursements out of the British Empire and French accounts at this bank and the means by which these expenditures were financed. Very truly yours, 1st H. L. Sanford, H. L. Sanford, Assistant Vice President. The Honorable Henry Morgenthau, Jr., Secretary of the Treasury, Washington 25, D.C. Enclosures COPY Regraded Unclassified ANALYSIS 07 DRITISH AND FRENCH ACCOUNTS Strictly (In Hillions of Dollars) Week Ended April 12, 1944 Confidential BANK OF ENGLAND (BRITISH GOVERNMENT) BANK OF FRANCE PERIOD DEBITS CREDITS Net Incr. (+) Net. Incr. (+) Gov't Transfers to Proceeds of Transfers Sales of Other or Decr. (-) Total Total or Decr. (-) Expendi- Official .from Securities official Credits in & Punds Debits Credits in D Funds Total tyres Canadian Other Total (Official) Australian Debite (a) Account Debits Credits Gold (b) Account (c) (d) (e) (e) (d) First year of may (a) 1,793.2 605.6 20,9 1,166,7 1,828,2 1,356.1 52,0 3,9 416.2 + 35.0 866.3(f) 1,095.3(f) + 299.0 War period through 108,0 14.5 561,1 + 10,8 878.3 1,098.4 - 220,1 December, 1940 2,782.3 1,425.6 20.9 1,335.8 2,793,1 2,109,5 Second year of war(h) 2,203.0 1,792.2 344 407.4 2,189,6 1,193.7 274.0 16.7 705.4 - 13,2 38.9 8.8 - 30.1 Third year of way (1) 1,235.6 904.8 7.7 223.1 1,361.5 21,8 5,5 57.4 1,276,8 + 125,9 18,5 4.4 - 14.1 Fourth year of mgr(1) 766.0 1,0 - 9,3 312.7 170.4 280.9 1,072.3 - 0,5 155.1 916.7 + 308,3 10.3 1943 September 49.4 16.8 10.6 22.0 86.2 - - 15,0 71.2 + 36,8 - - - 38,2 16.0 22,2 115,4 40.5 + 77.2 - - 74.9 - October - - - November 65.9 12.4 5.9 17.6 89,0 - - 3.5 85.5 + 23,1 - - - December 98.1 16,3 - 81,8 134.5 - 36.5 98.0 + 36.4 - - - - - 1944 126,5 + C2,7 . 1,0 - January 44.6 22,2 10.6 12,0 127.5 - - - February - 29.0 + 0.7 1 - 143.8 14.3 2,1 127.4 144.5 115.5 - - March 152.9 71.1 12.5 69.3 133-3 24.5 108.8 - 19.6 1 1 - - - April May July August Week Zaded March 22, 1944 6.7 1,0 - 29.8 29.8 + 23.1 - - 5-1 - - - - - 12.8 6,8 6.0 - - + 30.7 - March 29, 1944 - 43.5 - 43.5 - - 58.1 - - April <. 1944 15.0 94 8.4 51.2 16.9 - - 6.5 10.4 - 1 57.3(2) 3,5 - 53.8(1) 26,7(k) - - 10,0 16.7(k) - 30.6 - - - See attached sheet for Tootnotes. England Jule 19, 1940) $27.6 million England through June 20, 1940 to Hareb 12, 1941) 054.9 million England Maunets 12, 1941) 811.2 million Regraded Unclassified (a) Includes payments for doccunt of British Ministry of Supply Mission, British Supply Board, Ministry of Supply Tumber Control, end Ministry of Shipping. (b) Estimated figures based on transfers from the New York Agency of the Bank of Montreal, which apparently represent the proceeds of official British sales of American securities, including those effected through direct negotiation. In addition to the official selling, substantial liquidation of securities for private British account occurred, particularly during the early months of the war, although the receipt of the proceeds at this Bank cannot be identified with any accuracy. According to data supplied by the British Treasury and released by Secretary Morgenthau, total official and private British liquidation of our securities through December, 1940 amounted to $334 million. (c) Includes about $85 million received during October, 1939 from the accounts of British authorised banks with New York banks, presumably reflecting the requisitioning of private dollar balances, Other large transfers from such accounts since October, 1939 apparently represent current acquisitions of proceeds of exports from the sterling area and other accruing dollar receipts. See (k) below, (d) Reflects net change in all dollar holdings payable on demand or maturing in one year. (e) For breakdown by types of debits and credits see tabulations prior to March 10, 1943. (f) Adjusted to eliminate the effect of $20 million paid out on June 26, 1940 and returned the following day. (g) For monthly breakdown see tabulations prior to April 23, 1941. (h) For monthly breakdown see tabulations prior to October B, 1941. (1) For monthly breakdown see tabulations prior to October 14, 1942. ()) Voc conthly breakdown see tabulations prior to September 29, 1943. Includes $ 4.5 million apparently representing current and acou ulated dollar proceeds oi starling area services and {roundine exportsa and #1-3 million in connection with the expenses of our armed forces abroad. (:) or shieb $50.1 million represents cost of gold purchased for export. Regraded Unclassifie Regraded 48413878 OF CANADIAN AND AUSTRALIAN ACCOUNTS (In Willions of Dollars) Yesk Ended April 12. 1944 Confidential COMM BANK OF Tylesfers from Official Transfers to Net Incr. to Brittich s/c official of (+) or Official Total Britin Total Gold For Own For French Other Decr, (-) Total British Other Total Gold other PERIOD A/C A/C Credits in $Rands(s) Debits A/C Debits Credits Sales Credits in Rinds (e) A/C Credits Sales First year. of me n 323.0 16.6 306.4 504.7 412.7 20,9 36,7 32,4 181,7 31,2 3.9 27.3 36.1 30,0 6,1 + 4.9 for period through geshber, 1940 4772 16,6 460.6 707.4 534.8 20.9 110.7 41.0 + 230.2 57.9 14.5 43.4 62.4 50.1 12.3 + 4.5 16.7 55.5 81.2 62.9 18.3 + 9.0 agord year of war(b) 450.4 - 410.4 462.0 246,2 3.4 123.9 88.5 + 1.6 72.2 Whird year of 0 525.8 0,3 525.5 566.3 198.6 7.7 - 360.0 + 40.5 107.2 57.4 49.8 112.2 17.2 95.0 - 5,0 Fearth year of 723.6 723.6 958.8 47.1 170.4 - 741.3 235,2 197.0 155.1 41.9 200,4 - 200.4 + 3.4 - N 1943 September 672 47.2 70.1 - 10.6 - 59.5 + 22.9 16.8 15.0 1,8 20.0 - 20.0 + 3.2 - abober : - 32.1 71.3 - - - 71.3 + 39.2 42.8 40.5 2.3 26.5 - 26.5 - 16.3 15.4 0,1 15.3 95.1 - 5.9 - 89.2 + 79.7 6.6 3.5 3.1 18.2 - 18,2 + 11.6 0.3 166.5 35.1 - - - 55.1 - 91.7 39.7 36.5 3.2 27.0 - 27.0 - 12.7 1944 January 323 - 32.3 78.5 - 10,6 - 67.9 + 46.2 6.0 1,0 5.0 11.) 1 11.3 + 5.3 Embruary 25.4 26,6 1 25.4 118.5 23,1 2,1 - 93.3 + 93.1 31.3 29.0 2,3 - 28,6 - 2,7 March 30.3 0.5 29.8 88.6 15.0 12.5 - 61.1 + 58.3 27.6 24.5 3,1 29.9 - 29.9 + 23 Anril L. July Amount Teak Endad March 22, 1544 509 0.5 5,41 10.6 # - - 10,6 + 4,7 - - - 0.9 - 0.9 + 0.9 March 29, 1944 12.8 - 12,8 4.1 - - - 41 - B.T 0.5 - 0.5 5.6 - 5.6 + 5.1 April 1944 172.6 - 172.6 39.5 E 8.4 - 31+1 - 133.1 8.0 6-5 1.5 10+3 - 10+3 a. 2-3 April 12, 1944 2:9(1) - 2.9 (2.9(f) - - - AIC 5.0 10.0 10.0 - 5.3(a) - 5.3(b) 4.7 Average Weekly axpenditures for (a) For monthly breakdown see tabulations prior to April 23, 1941. First year of war 6.2 million. (b) For monthly breakdown see tabulations prior to October 8, 1941. Second year of war 8.9 million, (c) For monthly breakdown see tabulations prior to to October 14, 1942. Third year of mar 10.1 million. (d) For monthly breakdown see tabulations prior to September 29, 1943. Fourth year of was 13.9 million. (e) Reflects changes in all dollar holdings payable on demand or maturing in one year. Fifth year of war (through April 12, 1944) 15.6 million. (f) Does not reflect transactions in short term U. S, securities, (g) Includes $ 3.6 million deposited by War Supplies, Ltd. and $ 4.0 million received from New York account' of Canadian Chartered Bank. (b) Includes $5.0 million in connection with the expenses of our armed forces abroad. 255 EXECUTIVE OFFICE OF THE PRESIDENT WAR REFUGEE BOARD 1AA INTER-OFFICE COMMUNICATION DAMAPRIL 21,1944 TO Secretary Morgenthau FROM J. W. Pehle When and if you have time you may be interested in reading the attached excerpt from the debate in the House of Commons on the Inter-Governmental Committee. got 1457 Supply: Committes HOUSE OF COMMONS Diplomatic, etc., Services 1458 [Mr. McCorquodale, As regards the actual work, I think means of establishing their rights if it is the arrangement is really much the same casonable and practicable. The Bill also as we have often had in the past in the brings in many hundreds of thousands of Foreign Office. We have often had three ounteers who were previously left but. persons, the Secretary of State and two For that. reason alone, it für no other, the Under-Secretaries, or perhaps the Secre- Bill will be justified. It is an integral tary of State and the Chancellor of the part, if only a part, of the Government's Duchy, or some other Minister holding great scheme for resett) ment after the an office which does not entail work on war, and for that reason I commend it its own account, in order to assist our warmly to the House. deliberations. Generally, my right hon. Question pute and agreed to. Friend will also interest himself in the economic side of our work, as he has been Bill accordingly read the Third time, doing, and the knowledge which he has and passed. gained at a number of conferences will be invaluable to us. SUPPLY Question put, and agreed to. Considered in Committee. CLASS Il [Mr. CHARLES WILLIAMS in the Chair] DIPLOMATIC AND- CONSULAR SERVICES CIVIL ESTIMATES, SUPPLEMENTARY Motion made, and Question proposed, ESTIMATE. 1943 That a Supplementary sum, not exceeding CLASS 11 153.873. be granted to His Majesty. to delray FOREIGN OFFICE the charge which will come in course of pay- ment during the year ending on the 31st day Motion made, and Question proposed, of March, 1944. for the expenses in connec- tion with His Majesty's Embassies, Missions " That a Supplementary sum, not exceeding and Consular Establishments Abroad, and 61,525 be granted to His Majesty, to defray other expenditure chargeable to the Consular the charge which will curris in course of pay- Vote: certain special grants and payments, ment during the year ending un the just day including grants-it-aid: and sundry other of March, 1944 for the silaries and expenses services. of the Department of His Majesty's Secretary State fur Fureign Affairs and the salary of Mr. Granville (Suffolk, Eye): 1 gather Minister of State." that we are now considering the Votes Mr. Munder (Wolverhanipton, East): I in connection with the Inter-Govern- hope that we may have some explanation mental Committee of refugees and relief of the precise duties which the Minister of of prisoners of war and contributions for State will perform. It would be interest- the funds of the International Red Cross. ing il the Foreign Secretary could let us know how it is proposed to allocate his The Deputy-Chairman: Yes, that is so. duties between this country and abroad. Mr. Granville: The Paper says that the I am desighted that the appointment has additional provision required is a con- been made. I cannot think of anything tribution towards the funds of the Inter- more satisfactory for the foreign affairs national Red Cross Society of this country than that my two right in resognition of the work of the society hon, Friends should be associated together in the relief nf prisoners of war." in their conduct. 1 hope that my support will not be loo damaging to them. I think It goes on to say: that the sum of £1,525 which it is pro- The expenditure out of this grant-in-ald will not be accounted for in detail to the posed to spend on my right hon. Friend Comptroller and Auditor General. is money which will be very well spent. I quite understand that, but I thought we The Secretary of State for Foreign might have been told a little more about it. Affairs (Mr. Eden): It is intended that my right hon. Friend should assist me in the The Minister of State (Mr. Richard Law): general conduct of foreign policy under I must apologise to the Committee, and in the guidance of the War Cabinet. 1 need particular to the hon. Member who has hardly say that I warmly welcome his just spoken, and who has very kindly assistance. I have no doubt that I shall given way to me. I was not quile quick stand in need of it, and of any other help enough off the mark, but I hope I shall be I can find, in future as our problems get able to give him satisfaction on the very heavier, as I have no doubt they will. important matter that we are discussing. Regraded Unclassified 1459 Supply: Committee- 1 MARCH 1944 Diplomatic, etc., Services 1460 I do not think that it will be necessary £50,000. I think hon. Members will have to give any very long or detailed explana- seen from the Estimate that that is only tion of the first sub-head of the Supple- by way of instalment. On another mentary Estimate, which is the grant-in- occasion we shall be asking the Com- aid for the relief of prisoners of war, in mittee to underwrite our proportionate the form of a further contribution towards share of what we think may be the the Funds of the International Red Cross. expenses of the Inter-governmental Com- The Committee has always supported mittee in the coming year. That figure right through the war the efforts which is £1,000,000, a provisional figure, and the International Red Cross have made to we have undertaken to underwrite improve the lot of prisoners of war and £500,000 and the United States have 1 do not suppose for a moment that the undertaken to underwrite the other Committee would wish to withhold any £500,000. further support that they could give to The difference between what we were the International Red Cross. asking in 1939 and 1940 for the Inter- The additional sum required under the governmental Committee and what we are Supplementary Estimate is not a big asking now is an indication of the great one, £3,873. The purpose of it is to enable growth there has been in this hideous the International Red Cross to maintain problem of refugees. The comparison a sub-office in Shanghai, where they hope, between £2,000 and (50,000-or, indeed, and we hope, they will be able to be of {500,000-is not out of place as a com- some service to the very large number of parison of the growth in the horror and British civilians who are interned in complexity of the problem. It is a Shanghai, and of course, to help too, I measure of the determination and serious- hope, the very much smaller number of ness of purpose with which His Majesty's British prisoners of war who are there. Government and the Government's repre- We are quite satisfied that the Inter- sented on the Inter-governmental Com- national Red Cross is doing as much as mittee are tackling the refugee problem. possibly can be done for our prisoners of It may be for the convenience of the war and our fellow countrymen and Committee if I give a brief review of the women who are interned in the Far East. events which led to the reconstitution of The fact that it cannot do more is in no the Inter-governmental Committee. The way due to any lack of good will or of refugee problem was, unfortunately, knowledge and effort on the part of the already of monstrous proportions before International Red Cross. It is simply, из the war, and it is difficult to realise now I am afraid we all know, due to the atti- that, even before the war, when civilised tude of the Japanese authorities. I have Governments like the Government of this DO doubt that the Committee will approve country. and others, were in relation with this grant-in-aid and I will, if I may, pass the German Government, something like on to the second sub-head, the grant-in-aid 400,000 human beings were being driven for the Intergovernmental Committee on like cattle across the borders of Germany refugers. Here I think it would probably and were either expelled, or had to take be for the convenience of the Committee refuge in other lands, to avoid a worse LE I dealt with this matter fairly fully, fate. It was to meet this appalling situa- because it is some time since we had 1 tion that developed even before the war Debate on this tremendously important that the President of the United States subject. took the initiative in summoning a con- This in not the first time that - have ference at Evian in 1938. Out of that but to come to the House to ask for pro- conference grew the Inter-governmental take for- the Inter-Governmental Com- Committee on Refugees. milk on Refugees, but we have never The primary function of the Inter- - NO the House for provision on this governmental Committee in those days scale, or indeed, anything like it. In was to negotiate with the German Govern- the Committee was asked to provide ment 60 that the lot of those unhappy Dissa and in 1940 and 1945 provision people might be improved and their escape W made on the saide sort of scale. Since from Germany facilitated: in short, to Co. for be born DO vote for the Inter- that the cruelty of the German authorities governiciental Committee. Now I em ask- and the German people might, in some W 150 Committee, not for (6,000 but for degree, be mitigated. I think it is a. fact Regraded Unclassified 1461 Supply: Committee- HOUSE OF COMMONS Diplomatic, etc., Services 146z [Mr. Law.] the United States, the Netherlands, that, before the war, the Inter-govern- Brazil, the French National Committee of mental Committee was able to do a great Liberation and Argentina. 1 would like deal in mitigation. It co-ordinated the to take this opportunity of saying how activities of the various voluntary societies much His Majesty's Government appres and carried out an examination into the ciate the fact that the Inter-governumental prospects of finding other homes for those Committee is still able to call upon the unhappy people in various parts of the experience of my Noble Friend the Mem- world. On the outbreak of war, all that ber for Horsham and Worthing in matters work had to cease. There was another concerning refugees, and upon his wide meeting of the executive of the Inter- sympathy and deep interest in regard to governmental Committee in Washington in this matter. I would like at the same October, 1939, but, for the next two or time to pay a tribute to the other repre- three years after that, it never met again. sentatives of other Governments who are There was, indeed, no scope or work that serving on the Inter-governmental Com- could usefully be done. mittee at the present time, Other The work of the Inter-governmental Governments are represented by their Committee seemed to come to an end Ambassadors, It is a remarkable thing when the war broke out, but, of course, that these men, busy and over-burdened the problem remained. With every day as they are, have been able to devote SO that passed, the refugee problem increased much time to this hideons problem of in size, difficulty and horror, until it is refugees. And it is very much to the calculated now that, when the war in general advantage that they have been Europe comes to an end, there will be able to give that time, because it is an something like 20,000,000 human beings indication to the world as a whole of the who have been uprooted from their homes importance which is attached to a solu- in Europe, A figure like that is so big tion of it by the respective Governments. that it is almost meaningless. It is liter- Mr. Lipson (Cheltenham); Does the ally true that the human imagination right hon. Gentleman's reference to the cannot comprehend the full extent of amount of time these members have given human misery contained in a figure of mean that this Committee has met fre- that magnitude. It very soon became quently since the Bermuda Conference? clear, as the war progressed and as the refugee problem became more acute, that Mr. Law: It has met several times since there was a problem which could be the Bermuda Conference. 1 know from tackled with hope of success only upon my own experience that all the members the international plane. Accordingly, as of it take a most keen and deep interest hon. Members are aware, representatives in the problem. The Bermuda Conference of His Majesty's Government and the recommended that the Inter-governmental Government of the United States met Committee should be revived, that its some months ago at Bermuda, and went membership should be extended and that exhaustively into the whole refugee its Mandate should also be extended. In problem. accordance with that recommendation the Executive of the Inter-governmental One of the recommendations which the Committee issued invitations to a number Bermuda conference made was that there of other Governments who had not pre- should be instituted at once international viously been associated with the work to machinery to deal with the problem, and. join the Committee, and 1 understand as the Inter-governmental Committee still that replies have already been received, existed-though it had not been active affirmative replies, from Czechoslovakia, for some time-it was thought to be the Egypt, India, Luxemburg, Poland, the most salisfactory form of international Union of South Africa and the Soviet machinery. Accordingly, in, I think, Union. August last, the Executive of the Inter- governmental Committee met under the But it was necessary not only to chairmanship of my right hon. Friend the expand the membership. It was neces- Member for Horsham and Worthing (Earl sary also to alter its Mandate, As I said Winterton). The executive consists, as earlier the original function of the Inter- the Committee are probably aware, of governmental Committee was, in the representatives of the United Kingdom, main, to negotiate with the German Regraded Unclassified 259 Supply: Committee PORK 1 Services 144 authorities. Clearly that W/J BO longer mental Committee. With . this 16 possible at the time when the Inter- that, there 50, I die service the Committee, governmental Committee was revived. It every property that the executive was limited under its original Mandate machinery of the Inter governmental to dealing with refugees from Germany, Committee on refugoes will be built Austria, and Inter on the Sudetenland, into as effective a piece of machinery 1 Clearly, that again was inappropriate. Its conditions permit. It in being stordily scope had to be much wider than that, beik up sow, I hope very much that Perhaps the most important change that the Committee will not press DIA to & has been made in the Mandafe of the into details of the work of the Inter Inter-governmental Committee is this: governmental Committee. This refuges under its original Mandate the Inter- problem is one of those in which the governmental Committee had no finan- more one talks about what 5 being done cial responsibility of any kind for the the less chance there is of achieving any- maintenance of refugees. Clearly if that thing, I think the Committee realises provision was maintained it could not that fully as well as I do bet I would do any effective work whatever, 50 the just like to say this about what has been Mandate was revised, so that there now done. comes within the purview of the Com- The Vice-Director,- Malin, is on a mittee refugees from the whole of Europe, visit to North Africa and Italy, where he and it was revised further so that the has been seeing conditions on the spot. Committee can spend money upon the The honorary Assistant Director, Doctor maintenance, the transfer and preserva- Kullmann, has just returned from a visit tion of refugees. In other words, in the to Switzerland, where he has been going new reincamation, the Inter-governmental into the whole question of refugees. It is, Committee has changed from being I understand, the intention of the Execu- in the main a piece of co-ordinating tive Committee to have permanent repre- machinery into an executive office which septatives in those centres which are will be able, of its own initiative, to mainly concerned with the refugee prob- undertake tasks in connection with the lem. I can assure the Commitee that the safety of refugees. Inter-governmental Committee is making I think the Committee is aware that every possible effort to forward the work Sir Herbert Emerson, the League of of resoue that is consistent with the effet- Nations High Commissioner for Refugees, tive prosecution of the war. has for some time been the Director of 1 would like to say just a word about the Inter-governmental Committee. I the actual financial arrangements. The think it must be a matter for great con- administrative expenses of the Inter- gratulation that be has been confirmed governmental Committee are being in his appointment as Director of the Executive Committee. Sir Herbert covered by a percentage contribution by all the member Governments. Our per- Emerson, of course, continues to be centage is 12 per cent. and it is calcu- League of Nations High Commissioner. lated that that will amount to £4,000 It is very valuable that the two bodies in the following year; It does not which are dealing with refugee problems should have a link between them in the actually appear in this Vote because the Executive have enough funds to carry on person of the Director. I suppose there until the end of March, but next year the is no one in this country, or indeed in Committee will be asked to make pro- the world, who has so wide a knowledge vision for something in the nature of of this problem as Sir Herbert Emerson. I am sure too that there is no one whose £4,000 for administrative expenses. The heart is more deeply in it. operating expenses are another matter, They are likely to be very considerable. Sir Herbert Emerson is the Director. Indeed, we must all of as hope that they Under this new organisation an American will be considerable because the greater citizen, Mr. Patrick Malin, who has had- the expenditure on operations the more great experience of welfare work is Vice- chance there is of our being able to do director, and Doctor Sillem of the Nether- something practical for the relief and lands is Secretary-General. # In addition, resctie of the oppressed peoples of Europe. Doctor Kullmann the Deputy League of Nations High Commissioner, is Honorary As I said earlier it has been calculated Assistant Director of the Inter-govern- that operating expenses will amount to 1405 Supply: Committee- HOUSE OF COMMONS Diplomatic, itc., Services 1466 (Mr. Law] refer to prisoners of war under the head- .000,000 in the coming 12 months, The ing BB, which is: lited States Government and ourselves have agreed to underwrite that Relief of prisoners of war; contribution towards the funds of the International Red (1,000,000. It Was necessary, I think, Cruse (Grant in Aid)." to take that action because we could not I understand from the right hon. Gentle- afford delay, and we could not afford a man that the sum which is being voted és long period in which neither the Com- £3.873. As be says, of course, the Com- mittee nor the Director knew where they mittee will not grudge the Government this stood, bit I should make it clear to the item. I am sorry it is 50 small. 1 under- Committee that the other member Gov- stood from the Minister for State that it is enunents are being asked to contribute to our contribution towards the setting up the fullest extent to these operating of an office in the Far East by the Inter- expanses. I have no doubt that they will national Red Cross Society. I was rather wish to share in this very important sorry that the right hon. Gentleman did humanitarian work. Therefore, we may not tell us a little more about this because expect that through we are underwriting we have all a considerable number of con- £500,000 we shall not be called on, in stituents who are extremely anxious after the event, to supply anything like that the statement which was made in the amount However that may be 1 am House by the Foreign Secretary with quite sure that the Committee would not regard to what is happening to our wish the Inter-governmental Committee prisoners in the Far East, and the atro- 00 refugees to be under any disability at cities that have been committed by the all through lack of finance, Japanese, Although I understand that there is a great deal of anxiety and tre- There is just one more thing which mendous interest in this problem of the perhaps I ought to add. As I have said international refugees I am sorry that the the Executive Committee has met several right hon, Gentleman did not take a little times and, of course, il is the Executive more time in his speech to tell us what Committee which directs and supervises if is hoped to achieve by the setting up the work of the whole organisation, but of this office by the International Red it may well be that the time will come Cross in Shangbai because, so far-I shall when it is desirable to have a plenary be very brief about this-we have had, I feeting of the Cummittee, and 1 am able think, two statements from the Foreign to way now that is being borne in mind Secretary about what is happening out by the Executive Committee. When there, and we have also had a statement opportunity offers 1 have no doubt they from someone connected with the Inter- will give the fullest consideration to the national Red Cross. My view is that there possibility of calling together such a is a feeling in the minds of the relatives and J do not think I have anyhing dependants of our prisoners of war in the INSURER - say at this stage. I expect that Far East that these statements are some- other hon: Members will be making con- what contradictory. One was reassuring tributions to our discussion, and if and others gave facts of brutal treatment necessary I shall be very glad to reply to 1 realiso that it might be difficult for the Dear. But I do commend must heartily Foreign Secretary to give us all the in- Unin Voiv to the Committee I am sure formation which is available to him from that just Committee will want the Inter- men who have escaped from the Far East, governmental Committee to have the but I think it would be better if he could fulled possible support and that the Com- give us a little more information on what is milter look- forward to its achieving, intended with regard to this office which within the Imitations imposed by war, is to be set up. Is it hoped that, as a considerable results. result, His Majesty's Government or our Mr. Granville: I apologise for having military authorities or the Red Cross will stand Detween the Committee and that be able to make some contact with the very interesting statement which the right Japanese Government, and make repre- sentations which will secure an alleviation him, Gentleman has made. 1 will only detain hon. Members for one or two of the conditions of our prisoners of war in their hands? moments before the Committee go on to discuss the second part of this Vote nn Mr. Law: I am extremely sorry if I gave Refugees I would like very briefly to the impression that I was dealing in a Regraded Unclassified 1467 Supply: Committee- I MARCH 1944 Diplomatic, etc., Services cursory way with the questions which the aware, are to transmit lists of prisoners of hon. Stember has just touched upon. I war, to distribute parcels, to visit camps, certainly appreciate fully. and I do not and so on. The Japanese authorities think anybody could fail to appreciate, have been extremely stiff about allowing the deep anxiety which prevails through- the International Red Cross to exercise out the country about the conditions of their rights: in fact, they have not allowed our prisoners of war and internees- them to excrcise their rights, in spite of Mr. Granville: I thought the right hon. repeated representations, in what are Gentleman wished to interrupt me. Per- called the occupied territories, the Philip- haps I might be allowed to finish, as pines, Malaya, the Netherlands East have already been interrupted once. Indies, and so on. know the difficulties of the Foreign Office. Mr. Mathers (Linlithgow): Are the The difficulties of distance and the atti- Japanese authorities parties to the Con- tude of the Japanese constitute a tremen- vention? dous handicap to the Government in try- ing to get improvement in the state of Mr. Law: I will tell my hon. Friend affairs, but I hope the Government will that in a moment, As 1 was saying, in remember that this Japanese war may go spite of repeated pressure from the Inter- on for years. What is to happen? I ask national Red Cross and the protecting them to put themselves in the position of Power, the Japanese have refused to the dependants of these prisoners, who allow any visits to camps in the occupied suddenly get this statement from the territories. With regard to the obliga- Foreign Secretary after they had received tions of the Japanese under the Geneva post-cards from prisoners saying that they Convention, the Japanese Government did were well treated. not ratify the Convention, but at the beginning of the war in the Far East they The Deputy-Chairman: The hon. Mem- said that they were going to observe its ber said he hoped the Debate would be provisions. How little they have kept short. He is now going into the question their word the Committee are aware. of the length of the war and a great many other things. This is a narrow Amend- Mise Rathbone (Combined English Uni- ment, and I hope that he will keep to it. versities): While I do not intend to trouble the Committee with a very long speech. Mr. Granville: Very well. I will confine I am afraid I shall have to depart from myself to saying that I hope that in setting the welcome brevity which has marked up this office no money will be spared, practically all the speeches in to-day's and no amount of initiative be lacking on Debates, because I have a fair amount to the part of the Government in supporting say about the work of this Committee. the Red Cross, so that we shall have more This is the first opportunity we have had information as to what is happening to since 19th May of a general Debate on the our prisoners of war who are suffering in refugee question. When some of us have Japanese hands. I hope that the right asked in recent months for such an oppor- hon. Gentleman will give a. full assurance tunity, we have been reminded that the on that point. opportunity would come when we dis- Mr. Law: I apologise for interrupting cussed this Vote. That is my excuse for the hon. Member just now: I thought be going in a little more detail into some of had finished. I was saying that we were the questions which are troubling myself conscious of the very deep interest in the and others who are interested in relugees. House and in the country on the matters Is it not rather significant of the impor- on which the hon. Member has touched. tance attached to different aspects of the He asked whether the opening of this new question, that not long ago we spent an office would lead to more success in the entire day discussing U.N.R.R.A., and representations made by the International that the amount we then voted was Red Cross to the Japanese authorities. It £80,000,000, while now, when we have is really impossible to give any answer. our first opportunity since May of discuss- One must hope that it will lead to im- ing the work of the Inter-Goverumental provement. It will certainly lead-I think Committee, the subject is sandwiched in it is bound to lead-to some improvement. between other subjects on a very busy day, The functions of the International Red and the amount we are asked to vote is Cross, as the hon. Member is probably £50,000. I was glad to hear that that 1469 Supply Committee- HOUSE OF COMMONS Diplamatic, etc., Services 1470 [Miss Rathbone,] covers only administrative expenses, and with several rooms, in Lower Regent that the expenditure on the operative Street It has four people, whose iden- work of the Committee is likely to be tity has been described by my right hon. mething in the nature of £1,000,000. Friend: Sir Herbert Emerson, his Ameri- 1 am not making any comparison be- can deputy, his Swiss deputy, and the tween the Inter-Governmental Committee Dutch secretary to the Committee-an and U.N.R.R.A. U.N.R.R.A. covers a admirable learn. I know thein all. I have vast field, Its job is to deal with the the highest esteem for them all. They whole post-war problem of rehabilitating have wide experience and great knowledge distressed Europe. Dealing with displaced of refugee problems, and their hearts are populations, who include refugees - in their jobs. Sir Herbert, especially, has that seems the new fashionable worked at this problem for a long time. He has a background of Civil Service term for refugees - is only one part of its work. But this Inter- experience and very great knowledge. We Governmental Committee on Relugees can be confident that any work done by also covers a pretty vast field. Consider a team like that will be done with the intinest discretion, with high technical effi- some of its responsibilities. 1 noted that my right hon. Friend said that be did ciency, No rash promises will be made, and there will be no unwise publicity. It not want to go into detail in discussing will all be in the best traditions of British its work, and that it would be better not to go into details, I quite recognise that, and other diplomacy. But that technique but there are certain facts known to us has its disadvantages. It is inevitably slow-work that has to be consented to all as to the kind of work it has to do. First, it is responsible, I gather, for con- by a large number of nations working to- certing immediate rescue measures for the gether has, I suppose, inevitably to be slow. victims of Nazi oppression, so far as they are dependent upon inter-governmental But when one thinks of the machinery of that little office, with three or four action; for instance, the removal from the neutral States of the over- rooms, four people, with their two or flow of those refugees they have three typists, and £50,000 which we are taken in, and the maintenance of voting to-day for their expenses, one thinks of the tasks allotted to them. How those refugees who are removed from many of the millions of men, women neutral countries to havens of temporary and children who are threatened not (uge, and also of refugees who have merely with death, but with torture, can aped directly from enemy areas. We be rescued? What is to be done with heard that the Deputy-Director, Mr. them if they are rescued, and, then, Malin, has been in Italy and North what is to be done with them after the Africa, where, no doubt, he was consider- war? It is just a little as though, seeing ing that problem. We know that many a number of people escaping from a thousands of refugees were found in that hungry tiger, you sent after them a stage part of Italy which has now been libera- coach, drawn by four white horses, when ated from the enemy. what you needed was a Rolls-Royce. It Also, in regard to its post-war plans- seems rather a leisurely machine, and a and I attach extreme importance to this small machine. I am not complaining; -the Committee is responsible for 1 suppose an Inter-Governmental Com- negotiating arrangements with neutral mittee has to work in that way. We have Powers as to what help we can give them been told that there are 36 member States in removing, now or after the war, the on that Committee. They have not yet burden of refugees that they carry, so met in plenary session, but we are told that they may be willing to take larger that a meeting is likely to be arranged. numbers. Obviously, what the small That is not likely to lead to a quick neutrals do largely depends on whether result. When you have 36 Government the burden is going to be a permanent representatives meeting together like burden or whether they can count on this, every one of them will ask, What other nations relieving them of a part of does my Government think of it? " before it or assisting them with the maintenance they agree to anything. Then as to their of their refugees. For all this work Executive. I am not going to criticise what machinery has the Inter-Govern- them in the least. I have no justification mental Committee? It has a small office, for doing so, and I am told that they Regraded Unclassified 1471 Supply: Committee- MARCH 1944 Diplomatic, the Services 1472 work together admirably, but it is rather odd to note that you have the Argentine Committee can only act, just as the Iso-1 make no comment, but note the League of Nations did, through the in- Same-and also the Netherlands and dividnal Governments represented on the Brazil as members, the Liberation Com- Committee It cannot do anything itself mittee nf France is a member, and the except on a small scale, because all its other two members are the United States action depends upon what the individual and ourselves, So far 50 good, but it Governments may do, and, therefore, I is rather curious that most of the countries want to say that, while we gladly vote which are the chief victims nf persen- this money. we should supplement the tion, such as Poland, Czechoslovakia and work of this Committee by insisting that the U.S.S.R. are not, as far as I know, an organ similar to the Board in the represented on this Executive. Nor are United States, with a full-time executive the chief neutral countries which have director in constant touch with the director space to receive refugees-Sweden in the United States, should be set up. and Switzerland. The Executive was The American Board has direct access to appointed in 1938, but it has never been the President himself. The object is that it would make it 50 much easier for the reviewed or added to with a view to Inter-Governmental Committee to do its making it rather more realistic, Is it not possible for something to be done about work if it had in London a body repre- that? senting His Majesty's Government which really is carrying out the recommendations Now 1 come to a more important point. made by the Inter-Governmental Com- Many of us have had our minds on this mittee. point for over a year, and we then sug- gested that what was wanted in this This is a vast problem. This Inter- country was a new organ of Government Governmental Committee is an inevit- which would co-operate with the Inter- ably slow mechanism in tackling so vast Governmental Committee so as to secure a problem as the problem with which it the full-time intration of first class has to deal There are questions of minds on this question. Well, only two shipping and transport, collecting of or three weeks ago the United States did refugees, questions as to where refugees that very thing. President Roosevelt set are to be kept until permanently settled, up a War Refugee Board, composed of and questions of negotiations with he Secretary of State, Mr. Cordell Hull, neutrals. There are questions of food the Secretary of the Treasury, Mr. supplies and 50 forth. It is a huge busi- Morgenthau, and the Secretary of State ness, and it is the one hope of rescue for for War, Mr. Stimson. We have a sub- millions of people, nearly every one, in committee of the Cabinet here composed a way, a separate problem. You really of three equally eminent Ministers, but capnot work it unless the nations repre- the difference is that the American Board's sented on the Committee have their functions are clearly defined and it has a separate machinery for co-operation with full-time Executive Director. Its functions the Inter-Governmental Committee, for are set out in a pamphlet-which I have perpetually working backwards and for- here_ wards as between it and themselves to carry out the projects planned on a far The Deputy-Chairman: I think we are bigger scale than would be possible if the getting a little wide, because if it is pos- work depended on a Committee with so sible to pay a tribute to the American small a mechanism of operation. representatives on this Board, in a wide way, such as is now being done, it would This is my last word. I ask the Com- be equally possible to criticise them, and mittee to recognise that we in this country it is not within the duty of this Committee have a rather special responsibility for to criticise or otherwise comment on the this Inter-Governmental Committee. We representatives of a foreign Government ought to take the initiative and set a lead in that way. I did not wish to stop the to other nations by what we ourselves are hon. Lady before, but I do not think we doing to help the Inter-Governmental must go any further. Committee. For one thing, the Com- mittee is situated in London, while the Miss Rathbone: I bow to your Ruling, headquarters of U.N.R.R.A. are in the Mr. Williams, but the point 1 wanted to United States, where we expect that a make was that the Inter-Governmental good deal of the planning out will be Regraded Unclassified 1473 Supply: Committes- HOUSE OF COMMONS Diploinatic. etc., Services 1474 Miss Rathbone.] all the threatened victims we can and not done. The chairman of the Inter-Govern- grudge the money, but vote it gladly, mental Committee and the British repre- sentative on it is the Noble Lord the Mr. Lipson (Cheltenham): I am sure Member for Horsham (Earl Winterton), the Committee will understand why it was and therefore the Committee looks a good somewhat difficult for the hon. Lady to deal to him, because we know his great keep within the rules of debate. We know interest in this problem, and we want how very strongly she feels on this sub- to see that he is able to say to his Com- ject, and how much she has done herself mittee that the British Government is to arouse public opinion to a sure of re- going to do so-and-so and thus give a sponsibility in the treatment of refugees, lead for the whole of the world. There and we are extremely grateful to her. I is another reason for our special respon- welcome the increase in the amount of sibility. We know that though very the grant from £2,000 to £50,000, with many of these threatened millions are the promise of underwriting (1,000,000 non-Jewish, the majority of them are for further operations, because this in- Jewish-the Jews being the one race creased expenditure, I hope, means an which Hitler threatens with wholesale increase of activity. One naturally asks extermination of men, women and chil- oneself-Is the amount that is being spent dren, and he is doing it. He threatens even now enough, and are we really to exterminate the entire Jewish popula- tackling this problem as it ought to be tion of Europe. Well, we hold the gates tackled, because we were reminded by of Palestine and we promised the Jews a the right hon. Gentleman, in introducing National Home there- the Vote, that this is a problem which is really beyond what the imagination The Deputy-Chairman: I am afraid the can conceive, and therefore the action hon. Lady must keep off Palestine and dealing with it ought to be in accordance the Home for Jews. If we once begin to with the news. We were asked not to in- discom that, there will be absolutely no quire into the details of the work. We end to it, and it has oothing to do with will respect that request, but we are very the Question before the Committee. much left in the dark as to what actually Miss Rathbone: In our hearts, it was is being done. So far as we are told to- very much to do with it, because we day, all that has been done is that certain machinery has been set up, but we did lways remember how many people are not find, in the information given to us, theady massacred who might be alive and happy now if they had been allowed any sense of urgency or of the importance of the time factor. There are millions to go to that promised land. We remem- her also that the British Empire is a big of tragedies behind this particular pro- blem, so we ask ourselves how many place. If I cannot mention Palestine, lives are being saved and whether this for God's sake, let us find a place some- where in the Empire where these people problem can be tackled only by the ortho- dox method associated with inter-govern- can get in. I was reminded by the Under- mental committees. Secretary for the Home Department in putting a question- I would like to ask the member of that Committee in what spirit they approach The Deputy-Chairman: We cannot go this problem. Do they see it in this light? Into Home Office matters on this Vote. Supposing the positions were reversed, Miss Rathbone: I will not go further and, instead of them being an inter- with it. But if it was a mistake to men- governmental committee trying to bring tion the Home Office, it was not my mis- succour and relief to victims of Nazi take but that of the Under-Secretary in terror, they were those victims and were telling me that I should be able to raise themselves the refugees? Could they the question on this Vote. We vote this honestly say that they themselves, in money gladly and only wish that the sum those circumstances, would be satisfied we are voting was larger. I hope the with what was being done by the Inter- Vote for the operational activities of the Governmental Committee? It seems to Inter-Governmental Committee, which we me that that is a very fair test. But for shall be asked to agree to later, will be the grace of God, the position might have been reversed, and, instead of the Inter- larger because we have a heavy re- Governmental Committee being in the sponsibility in this matter. Let us save Regraded Unclassified 475 Royal Amount 1 MARCH 1944 Diplomatic, etc., Services 1476 position of being able to help, they might 3. Prize Salvage Act, 1944. themselves have been needing tais help, and 1 want to submit, in all earnestness, 4. Guardianships (Refugee Children) that that is the test they should apply to Act, 1944. 5.-Supreme Court of Judicature this problem. 1 have to contess that I (Amendment) Act, 1944. cannot find anything in the record of achievement of the Inter-Governmental 6. Disabled Persons (Employment) Act, 1944. Committee to justify any very great con- 7. House of Commons Disqualification fidence that they are alive to the urgency (Temporary Provisions) Act, 1944. of this problem, and that the action they 8. Income Tax (Offices and Employ- have taken is commensurate with the ments) Act, 1944. need. Mr. Silverman: Will the hon. Member SUPPLY not agree that, within the limits which they exercise, they do show a sense of Again considered in Committee. urgency, and that, after all, we should [MAJOR MILNER in the Chair] be very grateful to them? Question again proposed: Mr. Lipson: Surely the answer to that That a Supplementary sum, pot exceed- is this-that, if the limits of their powers ing £53.873. be granted to His Majesty, to are too narrow or too confined, the Com- defray the charge which will come in course mitee ought to say so, instead of saying of payment during the year ending on the that they are able to deal with the pro- 31st day of March, 1944. for the expenses in connection with His Majesty's Embassies, blem, when they know they are not in Missions and Consular Establishments Abroad. a position to do so, and other expenditure chargeable to the Con- sular Vote: certain special grants and pay- Earl Winterton (Horsham and Worth- ments, including grants in aid: and sundry ing): I gather that my hon. Friend is other services." criticising my Ambasiadorial colleagues on Mr. Lipson: I should like to make it clear the Committee and myself-the represen- that, in the remarks that I am making, I tatives of the United States and other am not concerned with personalities but countries-when he talks of they." It with a very great tragic human problem. is only in order to make the point clear I have to ask myself whether the machin- that I have interrupted. ery and the means we have taken to deal Mr. Lipson: We are asked to vote a with this problem bear a proper relation to it, and are adequate. This matter of sum of money towards the work of an Inter-Governmental Committee. It is the rescue of refugees is on my conscience, as I believe it is on the conscience of a only right that we should ask, Are we getting value for the money that is being great many people, and we in this Com- mittee have a very definite responsibility spent?; is enough money being spent?; and is the dividend in the shape of lives in the matter. being saved adequate? Therefore I would say this. It may be Whereupon. the GENTLEMAN USHER OF necessary to conceal a great deal of the work of the Committee, but many of us THE BLACK Rop being come with a Mes- feel that we are not in a position to esti- sage, The CHAIRMAN left the Chair. mate the value and the importance and the Mr. SPEAKER resumed the Chair. seriousness of the work that this Com- mittee is carrying out, and we would like a complete assurance as to whether the ROYAL ASSENT machinery is adequate for its purpose OF Message to attend the Lords Commis- not and, if it is adequate, that the sioners. machinery is being used to the full so that the object in mind may be achieved. We The House went; and having returned- would also like an assurance that the Com- Mr. SPEAKER reported the Royal Assent mittee will not hesitate to use, if need be, to: unorthodox methods to try and save L Landlord and Tenant (Requisitioned human lives. We would also like it to Land) Act, 1944 be considered whether it is advisable to 2. Courts (Emergency Powers) (Scot- supplement the action taken by the Inter- land) Act, 1944 Governmental Committee by similar action Regraded Unclassified 1477 Supply: Committee- HOUSE OF COMMONS Diploments. atc.: Services 1478 FMr. Lipson.] to that which President Roosevelt has currestances that have arisen since rgth found it necessary to take in America-he May, I think it was, when last the House was apparently so impressed with. the or the Committee had any opportunity of discussing these matters. There have urgency of the problem that be thought inter-governmental machinery by itself been, since 19th May, great changes in Europe in the circumstances that these was not sufficient. I would like further measures are designed to meet. John consideration to be given to that matter. Pehle, a member of the executive of the We in this country are engaged in a body in America charged with these life and death struggle. That was true matters, said the other day, quite when we began the war, it still is true, and rightly, that unless this job were we can only hope to succeed in that done within the next few months struggle by God's help. If we go to God there would be no job left to do. and ask Him to help us in our trouble, It is in that spirit that the problem has I think we ought to put ourselves in a to be approached. I would like to direct position to say to Him that we have the attention of the Committee to some helped those we were in a position to help. of the things that have in fact been hap- That is the test which 1 would apply to pening since May of last year, because, the work of this Inter-Governmental Com- not merely do things happen, but we gel mittee. Here are these hapless refugees, knowledge of them. I have a copy of a. for whom we have a special responsibility. document which has reached London. It Can we honestly say. with a clear con- only concerns Poland and I think It only science, that impressed by the urgency of concerns the Jews. May I, in passing, the problem, by the importance of the my that I speak in this matter as a Jew, time factor, we have done everything that and as a Jew I would say at once that is humanly possible to save human lives? this is by no means entirely a Jewish Unless we can give a satisfactory answer problem-not by any means-and DO to that, I submit we have not done what Jew, knowing the facts, would think that we ought to have done. To do anything it was, or would lose any opportunity al less than the maximum possible in a prob- pointing out that it was not, lem of this kind, is simply not good It remains true, however, what the hon. enough. Lady said, that it is very largely a Jewish question, and that among the refugess Mr. Silverman (Nelson and Colne): I the Jews are the only ones against whom would like at once to dissociate myself, the Nazis have declared a policy of com- and any organisation interested in this plete extermination, regarding them-as matter with which 1 may be concerned, they expressly say-as belligerent enemies. from any kind of criticism, implied or do not quite know what they mean by express, direct or indirect, of the Inter- that because, if the Jews were really Governmental Committee. So far as I belligerent enemies, I suppose the Geneve am aware its work is done with efficiency Convention would apply to them, and and urgency and in a spirit of co-opera- certainly no attempt is made to make it tion to which no one who speaks with apply. But the Nazis regard themselves any sense of responsibility, could fail to as making war upon them in the sense pay carnest and sincere tribute. Nobody of rooting them out ulterly, in an en- would pretend, however, that the work deavour to solve what is sometimes called they are doing is going to resçue all those the Jewish question by the extermination threatened by the evil thing that stalks in Europe of any Jews at all. That policy throughout Europe to-day, I will have is to be resisted from outside, but it is a word or two to say about that a little also resisted from within, and I want later on, but I thought it was right to to draw the attention of the Committee say SO much at once, so that there should to some things that are happening. This be no doubt about it. report comes from the Jewish National Committee, operating somewhere in We are concerned to-day with a Sup- Poland, and it reached London in Febru- plementary Estimate and we cannot ary of this year. In this report it is bring in and debate large issues of general stated- policy. One can only deal with the new " Last month we still reckoned the number circumstances that have necessitated a of Jews in the whole territory of Poland as Supplementary Estimate at all, new cir- 250,000 to 300,000. In a few weeks not more Regraded Unclassified 1479 Supply Committee- MARCH 1944 Diplomatic. etc., Services 1480 than 50,000 of us will remain. In the last declaration was made of the intentions DIAMINE before death the reminants of Polish Jewry appeal for help to the whole world of all the United Nations. That declara- The blood sheil by 3,400,190 Jews in Paland tion was simultaneously made elsewbere. will purso not only the Hitlerite bearrs but 1 would suggest to the right hon. Gentle- all those who uttered words but did not act man that the time has come when a new to save a people condemned to extermination by the Hitlerite munteres. May this, per declaration might be made, It is doubtful hape our last voice from the ahym, reach the whether it has very much effect, but it cars of the whole world." has some, We do know that there are There follow descriptions of mass murders. people in Europe who listen. We do know In the early days of November, uns. all that there are people in Europe who re- the Jews in the two large concentration camps act. We have information about heroic in Poland numbering 25.000 people, were acts done in enemy-occupied countries completely appibilated On Wednesday, which have the effect of actual rescue, and November 3nf. the 10,000 Jews in the camp of Trawniki were marched out, surrounded many of us think that a new declaration and machine-gunned. The women and chil- made now, a new joint warning by the dren were loaded into 30 lorries, transported heads of the Allied Nations, might be to the expcution place and mundered by heard. But not only a warning: a de- machine-gunning. On Friday. November 5th. several thousand Jews were massacted in a claration, that the satellite States could similar way in the district of Lublin" hear, about the special measures they I am not going to weary the Committee could take to stop the deportation, perse- with a further recital of horrors, but there cution and killing of the Jews. A call are others of the same kind. They resist. made in the name of the leaders of the On the fourth day. the Jewish youth of United Nations to the peoples of Europe Bialystok attacked their persecutors with hand- to do what they could to prevent mas- grenades, fire bombs and a couple of machine- sacres, and the deportations preliminary guns, killing and wounding several hundred to massacres. It is not a thing which Germans and Ukrainiane The Germans brought up, as in Warsaw, fielif-artillery and requires any expenditure of money, tanks with 1,000 armed policemen and S.S. energy or machinery; it is a declaration and many detachments of Chramiane They which, If it succeeded in saving any lives, set fire to the Chetin from all sides. The would be justified. I think it is realised violent fighting continued for eight days. that the declaration that was made before Afterwards, the Jews set fire to. and destroyed the autorious death-camp of Treblinka was not altogether without effect. A in the region of Chelm-Labilin The Jews new one made now might be very oppor- organized themselves into Agbring groups and tune indeed. Certainly the neglect of it attacked the Germans and Ukrainians, dis- would be difficult to justify if there was arming and killing the majority of them. They barnt the gis-chambers and the cornitoria, only the remotest prospect that the mak- and the survivors fled to the forests in the ing of it would succeed in saving any lives neighbourhoud." at all. It is against that kind of background I would like to say something about the that We are considering to-day this Sup- particular machinery that this Supple- plementary Estimate. It will grow as mentary Estimate is designed to pay for. military defeat after military defeat is I have already said something about the forced upon the Germans. As they spirit in which the work of this Committee retreat. the last retiring German soldier is done, but they are charged with look- will kill the last available Jew, What ing after refugees, that is to say, look- proposals have we to make about that? ing after people who have already escaped. I would like to make one or two practical It is only when a man, woman or child suggestions. I understand that the right has succeeded in escaping from some- hon. Gentleman is going to reply. 1 where or other that he or she comes under cannot ask him to give positive and con- such jurisdiction and powers as the Inter- structive replies to all the things that I Governmental Committee possess. Obvi- propose to suggest now, but I do hope onsly, that cannot be enough, because they will be urgently and sympathetically there ought to be some way of creating considered, and that if anything can be refugees, of getting people out so that done about it, it will be done without they could acquire the status of refugees undue delay. and this machinery become responsible When the news first became known of for them. I am inclined to think that it this active initiation of the policy of com- was along those lines that the United plete extermination, there was enacted in States were thinking when they set up this Chamber an historic scine, when a the United States War Refugees Board. Regraded Unclassified 1481 suppor Committee- HOUSE OF COMMON etc.) Services 1422 (Mr. Silverman matters as I do, but I would invite him We have been asked not to lalk too much nust earnestly Do look again at this aspect about certain matters and nobody would of the question and make quice certain dream of doing so but people can be got time our country does not take the second out, they are being got out, and some- place; instead of the first place, which attempt ought to be made al active rescue. both practical politics and our traditions If the United States thought Il worth would compel us to occupy, while to set up special Government I would like to see created in this machinery alongside the Inter-Govern- country machinery parallel to the United mental Committee might it not be worth States War Refugres Board. I would while to consider whether we, 100, ought like to see it done in a large way, in such not to set up parallel machinery in this a way as would make it clear to the world country? I do not refer lo this by way that we do recognise the heavy obligations of praise, censure or criticism of the which rest on our shoulders in these United States at all; I point to it as an matters and that we do not intend to lag example of the way in which one of our behind anybody in the discharge of those principal Allies is attempting to meet obligations. I would like to urge con- their obligations when faced with exactly tinued and even closer co-operation with the same problem. It was not a light those bodies in the world which are thing for the United States to do. They charged with the responsibility of practical have not set up their Board merely for rescue wherever it is possible. Bodies like the sake of adding machinery to the World Jewish Congress and the machinery. Presumably, there is a prac- National Rescue Committee in Palestine tical function which that Board will carry are both actively engaged in such rescue out. If that is so is it not reasonable to work as can be done. I would like to see inquire whether similar machinery might a method evolved of associating bodies of not be set up here to carry out the same that kind with the Inter-Governmental kind of functions, which, 1 think, are dis- Committee, with the State machinery, tinguished from the functions of the Inter- wherever it may be set up. concerning Governmental Committee, in the way I itself with active rescue and organisation have indicated? of rescue, A large number of people who are getting out are Stateless. They them- May I say, in passing, that I am afraid selves might be organised and be in some there is a growing feeling that the initia- way or other represented on these bodies, tive in these matters, the active urgency because nobody knows more about the of endeavour, is passing from London to means of rescue than they do. I need not Washington? I think that if there were say any more about other matters which any justification for such a view it would have been dealt with by my hon. Friend be a very great pity, because we here the Member for the Combined English have a proud and long record of rescue Universities (Miss Rathbone). of the victims of political- and religious persecution, extending over many cen- In conclusion, may I repeal that the turies. It is one of our proudest tradi- urgency of this matter is extremé, that a tions; it is one of the things we stand for is literally true that those you save within in the world. Nobody pretends that we the next few months will be the only ones have ceased to stand for it, but there is a who can be saved, since afterwards none tendency to push over the initiative in will be left? Do not let us have it on our these matters to the United States of conscience that there were people who America. I think we ought to be careful of might have been saved but who were not that; we ought to resume the initiative saved because we were not willing to take ourselves. It is not merely in accordance from our other pressing obligations the with our traditions to do so, but also time, energy or machinery necessary to because we are 3,000 miles nearer the save them. If the employment of that scene. I am not at all sure whether some time, energy or machinery were to delay of the machinery we have here is not a victory by a single day none of us would little cumbrous, whether the delay in con- ask for it to be taken, but it is not correct sidering matters, reaching plans and to say that the only way of saving these carrying them out is not longer than some- people is by ensuring a quicker victory. times it might, be. I know that the As defeat crowds upon defeat for the Minister feels as keenly about these enemy so massacre crowds upon massacre. Regraded Unclassified 1483 Supply: Committee- I MARCH 1944 Diplomatic, etc., Services 1424 The very coming of victory may mean the body can mention a topic like this with- extermination of the last remnants of the out exciting a good deal of feeling. But Jewish people in Europe. Well, if that I always imagined that the Jews were sacrifice were necessary in order again to members of a religion and not of a raco, bring freedom to the world, let it be made. For that reason it would surely be better But no one is certain that it is necessary. for us to talk about the Poles or the At any rate, do not let it be on our con- Greeks, or any one else, and include the science that there were any lives at all that Jews in that. I have been in touch with might have been saved that we neglected some of the Polish organisations during to save. the past week and I have heard some- Lieut.-Colonel Sir Walter Smiles (Black- thing of the terrible atrocities committed burn): I intervene in this Debate only and the massacres, and I have heard of after hearing the last two speeches. One the gas chambers. I have believed what would imagine that the only refugees in 1 have heard to be true, although when the world at present were Jews. Great you hear it for the first time you would publicity is given to every atrocity against almost imagine that it was far-fetched. the Jews, and it is the feeling of many However, after hearing of these things people in this country that to times the from peoples lips one believes, them to be publicity is given to the Jews in this true, even in 1944. But these people matter as to members of other races who were talking about the Poles that were are maltreated or murdered. That feeling massacred: they were not talking about is springing up, and it would be just as those of one religion. If we are to give well for my hon. Friend the Member for relief and help-and I am quite sure that Cheltenham (Mr. Lipson) and my bon. every penny the Foreign Secretary asks Friend the Member for Nelson and Colne for would be agreed to without demur in (Mr. Silverman) not to forget that this House-let us at any rate give to the Relgians and the Greeks also, I get Mr. Lipson: I did not mention the word letters from my own constituency, from Jew once in my speech. the Society of Friends I think it is, and they tell me that the Belgians and the Mr. Silverman: Perhaps the hon. and Greeks have suffered more than any one gallant Member opposite would do me the else, I suppose nobody really knows, courtesy of remembering that I expressly perhaps even the Foreign Secretary him- said in my speech very much what he is self hardly knows, who has suffered the saying now, most, but I am quite sure that when a Sir W. Smiles: I apologise if I am Debate on this subject takes place it will wrong. but we shall see in Hansard later be very much better for the newspapers what was said, At any rate, I think the to give publicity to the fact that we are hon. Member for Nelson and Colne men- voting money for the Grecks, the Poles tioned some organisation for rescue work and the Belgians rather (han for those of in connection with Jewish refugees. one religion only. Mr. Graham White (Birkenhead, Mr. Silverman: I expressly said that East): Whatever the hon. Member for this problem was not by any means an Nelson and Colne (Mr. Silverman) may exclusive Jewish problem and that no Jew or may not have said in the coorse of thought it was so. I also said that, never- his speech, there was one sentence which theless, it was largely a Jewish problem. will dwell in the memory of all who heard Miss Rathbone: I think I know all the it, and that was the striking phrase that if the sacrifice were necessary of all the organisations working on this problem, We are perpetually stressing that it is not Jewish lives lo order that liberty might only a Jewish problem. Many non-Jewish come again to the world, then let it be made. Having made that statement, I people have been, and are being, do not think anyone would want to cavil victimised, but the majority of the victims are Jews. Everybody knows that that is at anything else he might-bave said. He so. Hitler's policy of exterminating a expressly said in his opening sentences that he was not speaking for the Jews whole people is confined to the Jews. They alone and, indeed, who would propose to are the principal victims. limit this discussion to the question of Sir W. Smiles: I expected to have a the Jews? We are, in fact, living wit- good many interruptions, because no- pesses of a most repugnant phenomenon Regraded Unclassified 1485 Supply: Committee- HOUSE OF COMMONS Diplomatic, etc., Services 1486 [Mr. White.] in history. We have enemies inspired by Members, have not the responsibility: it a fanaticism which apparently is even lies upon the shoulders of my right hon. stronger than any inspiration and effort Friend, and he himself must seek the best way out, which has been inspired by good pur- poses. In the last few weeks they have Mr. Astor (Fulham, East): I am stated their intention to fight to the last going to back up the words spoken with man in this fifth year of war and then to such eloquence by the hon. Member for commit suicide in large numbers. They East Birkenhead (Mr. G. White). 1 am are inspired by the same fanaticism to interested in the refugee question, and wreak their vengeance on anybody who in the Middle East I actually had to look would prevent them. after a very large refugee camp of 1 would support the hon. Member for Greeks. 1 want to make one or two Nelson and Colne in his suggestion that points which I think are important. It machinery, the counterpart of that which is very important to keep perfectly separ- has been set up in Washington, might ate the refugee question and Palestine. be set up in this country if I did not We were able to get enormous help in the believe that the right hon. Gentleman Lebanon, Palestine and Egypt from the who carries the responsibility in this local inhabitants because there was no House had not considered it an unwork- question of creating- able piece of machinery. I hope it might at least go forth from the House of Com- The Chairman: I am sorry lo interrupt mons to-day that as we were all of one the hon, Member but we cannot discuss mind when we passed the original Resolu- conditions in Palestine on this Vote. tion on this matter 50 there is no differ- Mr. Astor: With great deference 1 will ence of opinion among us to-day. We avoid that point. I only wanted to skate Members of the House of Commons are over it very briefly, because il has, to some aware that there are some aspects of this extent. almost prejudiced the possibility terrible manifestation that it might be of getting Jewish refugees out of Eastern unwise to discuss. We realise that may Europe, and I think that, whatever may be so, and we are consequently very be people's feeling in the matter, it does guarded in anything we may my. not in any way take away from the What we do want from the right hon. Christian duty to get as many of these Gentleman is an assurance that nothing refugees out as we possibly can If we which could conceivably be done to save neglect to do anything now which can even one life will be neglected. My hon. possibly be done, we shall curse ourselves Friend the Member for Nelson and Colne later on for our short sightedness. In said that, as events march on, there may the recent pamphlet of my right hon. in a few months be no problem of this Friend the Minister of Health it said there particular kind to solve, but 1 am not were not enough dentists in this country sure that I am as pessimistic as that. to provide treatment for all the children There are events on the horizon which in need of it. 1 wonder how many Jewish will make the satellite countries reflect dentists before the war- very seriously as to their course of action The Chairman: The hon. Gentleman is and it may well be, sooner rather than now encréaching upon the Home Office. later, that events will take place which That matter does not arise here: will make some of the satellite countries, who are now holding down large popula- Mr. Astor: I only wanted to suggest tions, consider very scriously whether certain considerations which might in- even at this late stage they cannot do fluence a representative of that Commit- something which can be placed on the tee in his attitude towards refugees. credit side of their balance sheet. I do Earl Winterfon (Horsham and Worth- not know what can be done. The right hon, Gentleman may have some means ing): I can give my hon. Friend the assurance that my opinion will not be at his disposal, and I emphasise that biased by any of the matters he has men- aspect of the affair. I only intervened tioned, one way or the other. because I wanted to express my convic- tion that we were unanimous in the Mr. Astor: I very much regret that my matter, There has never been any dif- noble Friend is not going to be influenced ference of opinion. We, as individual to some extent Regraded Unclassified 1487 Supply Committee- MARCH 1944 Inplamatic vic. Services 1488 Earl Winterton: My hon. Friend is the same tone as the bon, Member for trenching on a very dangerous form of East Fulliam (Mr. Astor). If I were not argument. I have no Ministerial respon- able to convince the Committee that this sibility, Ministerial responsibility rests is a caso of exceptional urgency I should with my right hon. Friend opposite. 1. not have (elt it worth while to listen to merely represent his views, the speeches already made. My first re- Mr. Astor: I am very sorry if anything flection is that we are a highly fortunate I say may not be able to sway my noble body of politicians to occupy the only Friend, but 1 hope I am still at liberty to available place in Europe for a discussion mention certain considerations in which on this subject. In this small island we he may take an interest on reflection. I are separated from the mainland of hope we shall not follow the American Europe by a very narrow sea, and we system of setting up a special office, be- have been able to escape the sense of cause all my experience is that these new dread, fear and horror which closer ac- mushroom Government Departments are quaintance with the problem has conveyed never strong enough to deal with a really to people in various parts of Europe, This strongly-entrenched Government Depart- is not really a Jewish question, though ment. the Jewish people are involved to perhaps a greater extent than anyone else, There The Chairman: The hon. Member is not are other refugees-Greeks, Yugoslavs, entitled to discuss the arrangements made Belgians, French, Norwegians and Danes by another country. Will he please con- have been mentioned-many of whom fine himself to the subject matter of the have found a home away from home and Estimate. many of whom are here enjoying our hos- Mr. Astor: With deference, Major pitability, if it can be termed such. Milner, the hon. Member for Nelson and I regard it as a very great privilege for Colne (Mr. Silverman) mentioned the Merobers of this House to be able to possibility of having some form of tend this offer and to make this mode separate office. I do not want to go provision of £50,000, envisaging a larger further than he did. I was only following expenditure later on, to be applied to what up what he said on the purely practical is called operational expenditure, Opera- point that it is not the best system of tional expenditure is very difficult to de- organisation to start a special body but fine, but it certainly means the making of to get a really high official in an existing provision for the reception, maintenance. Department specifically charged with this. transport and regulation of this very un- On the question of what we can say to happy traffic which is now taking place neutral countries, the principle has been surreptitiously under clandestine arrange- admitted that the satellite Powers can ments, Many are escaping. They are work their passage back. We have defi- leaving the areas of danger and coming nitely made a distinction between the within reach of a helping hand and what treatment of Germany and the treatment we are proposing is that at least £50,000 of the satellites. We must make is abso- shall be available to extend that and to lutely clear that one of the factors influenc- meet halfway those people who are fleeing ing our treatment of the satellite Powers from the wrath of their enemies on the after the war is their attitude towards the Continent and seeking salvation and sanc- refugees within their borders. There is a tuary in this very fortunate country and wide divergence, and we should make il in other parts of the world. quite clear and explain to them that in I agree with the right hon. Gentle- our relief operations immediately after the man who is responsible for the Estimate war, in any sanctions that we may im- that this is not the end, but the beginning pose, in our general treatment of them of a very large plan of salvation, in which politically, this will be a factor which will we are joined directly by the United defnitely-influence our treatment of them. States, who have committed themselves want to reiterate what has been said, to the same financial extent as we have this should go out from the-House of done. I should like us not to be too cons as having been backed up by squeamish about the nationality and the tives of every party. religion of the people we are saving, T cafell (Gower): I should like is the anniversary of the patron saint he same direction and in my country. His name was David, but D Regraded Unclassified 489 Supply: Committee- HOUSE OF COMMONS Diplomatic, etc., Services 1490 [Mr. Grentell.] taken by us in this House and shared David originally was not a Welsh name. by our people, Do not let us be atraid David was a Jew, a lovable character, a to tell our people about these things. In brave man and a human man, and the this country I per cent. of our popula- David who became the patron saint of our tion is of the Jewish race. What is wrong country was equally lovable and equally with the 90 per cent. that they should brave. The oaths that we take, the not be told? In Germany the percentage vows we offer in this House were origin- is also 1 per cent. We know what was ally based upon a Jewish institution and wrong with the German Reich and the a great Jewish character, who lived his German people. We must carry out our life and died equally bravely as he had work of charity, rescue and salvation re- lived. There is the problem. gardless of race, I hope that the Com- 1 should like us to dismiss the priorities mittee will dedicate itself to-day, not in this matter. A Jew is no more entitled merely by supporting this Vote, but by to sympathy in distress than anyone else, doing and preparing to do something much more in the next six or twelve and I do not think anyone else says that months than we have done in this regard in the House, but it is a lamentable fact in the last two or three years. If this Vote that millions of people are homeless in Europe. No one can predict the propor- is only a spur to gréater effort to help these people towards personal security, tion of those who can get away from the we shall have done a good day's work in areas of danger, but certainly there are this Committee. areas where life is very uncertain, and there is no object more worthy of human Mr. Law: 1 am sure that my bon. sympathy than a hunted human being. I Friend the Member for Gower (Mr. Gren- did some work in relation to the Sudeten fell) truly represented the views of the Germans in the time of Munich and 1 Committee when he welcomed the pay- was privileged to conduct the two first ment which it is proposed that we parties from Prague to Gdynia, It was make towards the expenses of the In very uncomfortable for me, but I will- Governmental Committee. I am sure, ingly incurred the risks and discomfort too, that he represented the views of hon and fatigue attendant upon those jour- Members when he urged that the refuger neys. problem should not be left only to the Inter-Governmental Committee, but that I shall always remember the courtesy of we should work at it in other ways cease- the Foreign Secretary of those days. lessly until we can get some kind of solu- There was no besitation at all, and on tion. The hon. Gentleman the Member the direct applications that I made to for Nelson and Colne (Mr. Silverman) re- him sufficient sums were made available ferred us back to the dark and hideous to send 400 people who were in immedi- background against which we have to con- ate danger of their lives, They were sider this problem. 1 think he was quite German speaking people-there may have right to do so, He was right to impress been some Jews among them-and they upon us once again, not only the impor- were in danger. On that journey I had tance of the problem, but its urgency. The occasion to go through Poland and I saw hon. Member made what was certainly a the Polish ghetto. I, who had always dismal prophecy, and what may prove been sympathetic with the history of that to be a true prophecy. when he said that, race, saw in a way 1 had never previously as defeat drew nearer Germany, so the witnessed the limitations and hardships excesses against the Jews would increase long ago imposed on the Jewish commu- in intensity. That may be so, but I hope nity. There are people who have escaped that il will not be so. T am more inclined from Hungary and other places, and if to agree with my hon. Friend the Member there is anything we can do in Parliament for East Birkenhead (Mr. Graham White) to help them we should do it, when he reminded us that as defeat drew 1 congratulate my right hon. Friend nearer to Germany, so the satellite coun; on the sympathy and understanding he tries would attempt to re-insure by tre has shown. He is a worthy son of a ing these unhappy people more de worthy father. This just gives him an and giving them the sanctuary who opportunity which is natural to him, and lack at the present time. 1 believe that he will avail himself of it. The hon, Member for Nel It is an opportunity which will be fully asked me to consider van Regraded Unclassified 1491 Supply Committee- I MARCH 1944 Diplomatic etc. Services 1492 he made, and, in particular, the possi- bility of making a new declaration which Cheltenham and the hon Member for he described, I think, as a call to the Nelson and Colne stressed the fact, as it seened to them, that this must be so and peoples of Europe from the heads of the that the Inter-Governmental Committee United Nations. Certainly that will be cannot be up to its job because the Presi- considered, but in the meantime I would remind the hon. Gentleman and my hon. dent of the United States has just recently created the War Refugee Board. Friend the Member for East Fulham (Mr. I hope that I may be able to persuade Astor), who also touched upon the neces- my hon. Friends, or to persondo the sity of giving warning, particularly to the Committee as a whole, that that is a satellites of Germany, that there has never fallacy, and that the fact that the War been any doubt about the attitude of Refugee Board has been set up in the opinion in this country and, indeed, of United States is not in any serise a world opinion, to what has been going on criticism of the Inter-Governmental Com in Europe under German rule and to the mittee. persecution of the Jews and the general treatment of minorities and refugees. No Mr. Silverman: No doubt the right hom one in any of the satellite countries can Gentleman will recognise that, when I be in any doubt of the fact that the advocated the setting up of machinery in British attitude and, indeed, the world this country paralle) to the War Refugee attitude, towards them after the war is Board of the United States. I Was not bound to be affected by the way they act doing 50 in any way as a criticism of the in this matter of Jewish persecution. There Inter-Governmental Committee The can be no doubt whatever of that, and, point I was making was, that as the indeed, the satellite countries are now Inter-Governmental Committee was getting very serious warnings through the charged with the fate of refugees after wireless, to which we must hope they are they had become such, there ougly paying due attention. I have no doubt be governmental machinery In prd that the Committee will vote the Supple- the Committee with the TOW material. mentary Estimate for this purpose, but more than one of my hon. Friends have Miss Rathbone: I think we all must expressed their feeling that what we are make il clear that none of us were doing in voting this money, and, indeed, criticising the Inter-Governmental Com- what the Inter-Governmental Committee mittee when speaking al the War Refugee can do, is not really sufficient for the Board. The Inter-Governmental Com- problem. I was, incidentally, glad that mitter, because it is inter-governmental, the hon, Member for Nelson and Colne must depend upon the actions of the dissociated himself from the criticism of Governments represented upon it, and the Inter-Governmental Committee which therefore. both Governments should have the hon. Member for Cheltenham (Mr. their own separate maddinery In dealing Lipson) made earlier. I am sure that that with the work. Such machinery would criticism was not in any way justified supplement and not supersedo the Inter- and that the Members of the Committee Governmental Committee- are treating this matter with just the Mr. Law: I am afraid that I must have seriousness and sincerity which the hon. expressed myself badly. and I apologise Gentleman himself would require. to hon. Members and to the Committee My hon. Friend the Member for the for doing so. I did not really mean to English Universities (Miss Rathbone) imply that they had said that the in- took the same point of view as the hon, stitution of the War Retuge Board was Member for Cheltenham. She, too, felt a criticism of the Inter-Gove remental that the machinery of the Inter-Govern- Committee. but I did nead to imply, and mental Committee was not enough. She I think it is clear that what I am going compared it to a stage coach when what to say now is a true representation of she wanted was a Rolls Royce. She what they said, that, in their view. the criticised the smallness of the present institution of the War Refugee Board of the Committee in London and showed that there was a gap which had from the size of the office and to be filled and which the Intertiover at of typists the theory that the mental Committee was not filling, 11 mental Committee was not not think that even that criticism is She, the hon. Member for altogether justified. D : Regraded Unclassified 1493 Supply: Committee-- HOUSE Diplomatic 1454 Mr. Lipson: Did not the right hon. Gentleman himselt say that the work of such a body in this country, here la the Inter-Governmental Committee Was already a Cabinet Commider not suiticient by itself to deal with this with these matters, and HER problem? Committee has at its dispo-al aa relabis trative >tall in the form of No ki Que Mr. Law: Yes, Sir, and it the hou. Department of the Foreign Office Member nad had a little more patience In really have the substance of who would have tound that I was going to President of the United States has (ist repeat exactly that argument. I spoke instituted, in the -hape of the Wat earlier in the Debate about the necessity Refugeo Board, For constitutional for international co-operation in these trasins, I do not see how we could intice matters, I think every Member the -tructure of that Board, and, the would agree that there are some matters practical reasons, I cannot or that we which can be handled far latter by an should cain any advantage from imitating inter-governmental body of this kind than it. by any particular Government, but that Miss Rathbone: One thing that struck us does not at all rule out the necessity that, very much was that the American Roard as well as international action, there has had Il while-time executive director, who to be national action in these was stiretly in tench with three Socre- For that reason, His Majesty's Govern- taries of State and had diretaces to the ment welcomed most heartily the President. Has the Refugee Department institution of the War Refugee Board in of the Foreign Office access to Ministers the United States, and We shall be willing, and to the Prime Minister in the sume and indeed anxious, to give that War way? Refugee Board, as a part of the United States administration, our very warmest The Chairman: We cannot en into the support and sympathy. We are working details of this organization, The rivid on all these matters in the closest hom. Gentl-man Ins said quite sufficient relations with the United States adminis- about it. tration, I do not know whether it is Mr. aw: Micht I an-wer, in a sentence, generally known among hon. Members what the hear, Lady has askid? We have that we have recently sent instructions to really got exactly what who wants. We every one of our missions abroad likely have a full time administrative staff, not to be involved in rolugeo matters that in the persons of -ingle directors, but in they should seck out and collaborate with the shape of the staff of the Refusers their American opposite numbers YYYY Department of the Foreign Office That refugee matters to the fullest extent in staff is directly re-ponsible to my right their power. hon. Friend and through him, to the I know that I cannot go very far in Cabinet Committee, I do not think there discussion of the War Relugee Board really i- the practical difference that some without transgressing the Kuang which hon. Members imagine there to be. you have given, Major Milner. On the I do not think Hate were any other other hand, there has been such a great points misel in the Debate. T think the deal said about the War Retugee Board Committee has made it abundantly clear and so many appeals have been made to den il want- Ce- work of reserve for these the Government here to institute a similar infortunate people to be proceeded with body in this country that I hope 1 may, with the utimet possible visour and dis- without getting into trouble, just touch patch. I can Jesufe the Committee that upon that aspect of the matter. I du not Itis Maje-ty's Government are prepared In think that hon. Members who have raised d., everything they possibly can to Ind a the question ot the Joint Refugee Board solution of this problem, in co-operation quite realise the constitutional difference with other mations where that is necessary, between this country and the United and individually as a Government where States. Under our system of ministerial that is possible. responsibility it would, in fact, be impos- sible for us to institute an independent Question put, and agreed In, body which would control Ministers and Resolyed: heads of other Departments outside it; that a Supplementary in fact, there is not the same need for be granted to Regraded Unclassified 1495 Givil Estimates I MARCH 1944 Civil Estimates 1496 the charge which will come in course of pay. CLASS VI. ment during the year ending on the 31st day of March, 1944, for the expenses in connection MINISTRY OF AGRICULTURE AND with His Majesty's Embassies, Missions and FISHERIES Consular Establishments Abroad, and other ex- penditure chargeable to the Consular Vote: 4. -- That a Supplementary sum, not exceed- certain special grants and payments, including Ing (10, be granted to His Majesty. to defray grants in aid; and sundry other services." the charge which will come in course of pay- ment during the year ending on the 31st day of March, 1944. for the salaries and expenses of CLASS V the Ministry of Agriculture and Flaberies, and of the Royal Botanic Gardens, Kew, including OLD AGE PENSIONS grants, grants in aid and expenses in respect Resolved: of agricultural education and research, eradica- tion of diseases of animals, and improvement " That a Supplementary sum, not exceeding of breeding, etc., of live stock, land settle- £150,000, be granted to His Majesty to defray ment, improvement of cultivation, drainage, the charge which will come in course of pay- etc., regulation of agricultural wages, agricul- ment during the year ending on the 31st day tural credits, and marketing: fishery organisa- of March, 1944. for the payment of Old Age tion, research and development, control of Pensions, pensions to blind persons, and for diseases of fish, etc.; and sundry other services certain administrative expenses in connection including certain remanet subsidy payments." therewith." DEPARTMENT OF AGRICULTURE FOR Resolutions to be reported upon the next SCOTLAND Sitting Day; Committee to sit again upon 5. TL That a Supplementary sum, not exceed- the next Sitting Day. ing (8 520. be granted to His Majes'y, to defray the charge which will come in course of pay- ment during the year ending on the yet day of March, 1944. for the salaries and expenses REPORT [IIth February] of the Department of Agriculture for Scotla including grants for land improvement, Resolutions reported: cultural education, research and marketing, es penses in respect of regulation of sericultural CIVIL ESTIMATES, SUPPLEMENTARY wages. certain grants in aid. and remanet sub- ESTIMATE, 1943 sidy payments.' STATE MANAGEMENT DISTRICTS CLASS II b. That a supplementary sum, not exceed- DOMINION SERVICES ing (10, be granted to His Majesty. to delray 1. " That a Supplementary sum, not exceed- the charge which will come in course of pay- tng (10. be granted to His Majestv. to defray ment during the year ending on the list day of March, 1944. for the salaries and expenses the charge which will come in course of pay. of the State Management Districts, including ment during the year ending on the 31st day the salaries of the central office, and the cost of March, 1944. for sundry Dominion services, of provision and management of licensed including certain grants in aid, and for es- penditure in connection with Ex-Service Men premises." CLASS X in Eire, and for a grant in and to Eire in respect of compensation to transferred MINISTRY OF AGRICULTURE AND officers." FISHERIES (WAR SERVICES) DEVELOPMENT AND WELFARE (SOUTH 7: That a Supplementary sum, ent EX- creding (10, be granted to Ills Majesty, to AFRICAN HIGH COMMISSION defray the charge which will come in crigine of TERRITORIES) payment during the year emiling on the just 2. That a Supplementary sum, not exceed day of March, 1914. for the cont of the war services of the Ministry of Agriculture and (20,800, be granted to Hh Majesty to detray Fisheries." the charge which will cume in course of pay. ment during the year ending on the fint day MINISTRY OF AIRCRAFT PRODUCTION of March, 1944. for the development of the resources of the South African High Com- 8. That a Supplementary sum. not ex- mission Territories and the wellare of their ceeiling (to, be granted 147 His Majesty, to peoples." defray the charge which will cous in en une of paym- nt during the year ending in the LINE CLASS V by nt March, 1941. for the salaries and ex- prives of vise Mini-try of Aircraft de Dear SUPPLEMENTARY PENSIONS MINISTRY OF FUEL AND POWER That a Supplementary sum. not incred- 20,000, be granted ... 11b Majoriv, to 9. IN That is Supplementary pame, not charge which will come for course of cerding (10 be granted to His Majesty, to ting the year ending on the 31ml defray the charge which will CLUBIP in course for the payment of Supplement All payment Juring the-year ending on the certain persons in receipt nl 31st day of March, 1944, for the salaries and or Willows" Pensions. expenses of the Ministry of Fuel and Prover Regraded Unclassified 1497 Civil Estimates HOUSE OF COMMONS India Bill [Lords] MINISTRY OF HEALTH (WAR SERVICES) 1498 10. That a Supplementary sum, not ex- and other non-effective annual allowances, additional allowances, gratuities, compassion- coeding 610, be granted to His Majesty, to defray the charge which will come in course ate allowances and supplementary pensions in respect of civil empoyment. of payment during the year ending on the gist day of March, 1944, for the cost of the CLASS I war services of the Ministry of Health." TREASURY AND SUBORDINATE MINISTRY OF HOME SECURITY DEPARTMENTS 11. " That a Supplementary sum, not ex- 18. That a Supplementary aum, not ex- ceeding (10, be granted to His Majesty, to ceeding (6,030, be granted to His Majesty, to defray the charge which will come in course defray the charge which will come in course of payment during the y, ending on the of payment during the year ending on the jist day of March, 1944. fo. be salaries and 31st day of March, 1944. for the salaries and expenses of the Ministry of Howe Security.' other expenses in the Department of His Majesty's Treasury and Subordinate Depart- MINISTRY OF SUPPLY ments, and the salaries and expenses of certain Ministers appointed for special duties." 12. That A Supplementary sum, not ex- ceeding (10, be granted to His Majesty, to Resolutions agreed to. defmy the charge which will come in course of payment during the year ending on the just day of March, 1944. for the salaries and expenses of the Ministry of Supply. including INDIA (ATTACHMENT OF STATES) the expenses of the Royal Onlimnce Factories. BILL [Lords] MINISTRY OF WAR TRANSPORT Order for Second Reading read. 13. That a Supplementary sum, not ex- The Attorney-General (Sir Donald ceeding (10, be granted to His Majesty, to Somervell): I beg to move, That the defray the charge which will come in course Bill be now read a Second time." of payment during the year ending on the just day of March, 1914. for the salaries and This Bill is concerned with the parts expenses of the Ministry of War Transport.' India known as Kathiawar and Gujen MINISTRY OF WORKS (WAR SERVICES) in which, together with Inrer Indian States with rull administrations, there are 7 very 14. That A Supplementary sum, not PS- creding (10, be granted to His Majesty, to large number of small, and in some cases defray the charge which will cure in course very small areas described as States, of payment during the year ending un the though I think it would probably be more 31st day of March, 1944 for the cost of the accurate in the use of language to describe war services of the Ministry of Works." them as estates. They are scattered. DEPARTMENT OF AGRICULTURE FOR Their number is about 400 and the total SCOTLAND (WAR SERVICES) population is some 800,000, Forty of them are less than a square mile in area, 15. That a Supplementary sum. not conling Liv. be granted to His Majesty. fri and more than half are about the size of defray the charge which will come in course an ordinary rural parish-seven, eight or of payment during the year ending on The nine square miles. The problem as to jist day nf March, 1014- hir the par of the bow these areas can best be administered war services of the Department of Agriculture for Scottant." so that those who live in them may have CLASS Il the advantages in such matters as educa- tion, health services, communications. IMPERIAL WAR GRAVES COMMISSION and su on which individually owing, as Hr. That a Supplementary suin. - PM the House will see, to the size of the areas. cerding 1,90% for grand DI His to delner the charge which will an ----- they camed of conree provide for dont of payment thring the year ending the selves, has engaged for sume years the 301 die - - March, 1111. for emplo adention of the Viceroy in his capacity and expenses 1.1 The Inderal War - Com - Crown representative, mission, inc inling of Emi in the United Runglom and 4 27.01 must" The for submitting this 168 to CLASS VIII Parfament is a rycent decision in the local court which is called the Court of SUPERANNUATION AND RETIRED Judicial Commissioner in which apr ALLOWASCES from courts e-rablished by the 17. That a supplimentary sure, BM ON representative her Have small In granted to n. to heart This Juli lat G EXM Pin charges who will TYTHE in LIBITS: of proment turing they year emilier on the Come Unit the Ht 11.1 devent March MAL for Lanndation Vision had been taking 277 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION M DATE TO Secretary Morgenthau APR 21 1944 FROM Mr. Pehle I am attaching herewith a copy of the report of the War Refugee Board for April 10 to 16, 1944. Attachment. st. in S 278 Developments during the week of April 10 - 16, 1944 1. STATEMENT ON AXIS ATROCITIES Ambassador Steinhardt has advised that the President's statement of March 24 was publicized in the Turkish and Balkan press and on the radio, and that he has been in- formed it made a deep impression on the people of the Balkan and central European countries. It has been suggested to Steinhardt by Bulgarian, Hungarian, and Rumanian sources that the President's statement be broad- cast in all Slavic and European languages at least once a day by the Algiers and American radio stations. Since a great many people in the Balkan area do not have radios, Steinhardt also suggested that pamphlets containing the President's statement be dropped from Allied planes on bombing missions over Europe. The British Foreign Office has advised Winant that on and since the issuance of the British statement of March 30 by Mr. Eden, similar in content to the statement of the President, the British have been taking action paralleling our own in the psychological warfare field by broadcasting their statement in all foreign broadcasts, particularly for the purpose of having it come to the notice of the satellite governments and their people. 2. COOPERATION WITH OTHER GOVERNMENTS (a) Neutrals (i) Spain In response to our specific plan of operations in Spain to further the evacuation of refugees to and through that country, recently proposed to Hayes, the Ambassador has informed us that he feels no such plan should be put into effect until it becomes apparent that our efforts to stimulate the influx of refugees into Spain will render insufficient the facilities now existing for their care. According to Hayes, the latter facilities in the form of Blickenstaff's organization are adequate to cope with 279 - 2 - present problems and have the support of the Spanish Government, which Hayes believes would look with disfavor upon the plan outlined by the Board. With respect to the rejection of certain refugees who had applied for admission to Camp Lyautey, by the French authorities, we have advised Ackermann to use his own judgment in the matter of pressing the French to admit those rejected refugees who had been in Spain since prior to 1933. The French have made some concessions in their policy regarding admissibility to Lyautey as a result of our representations and it is felt that it may be unde- sirable to press them further in this matter. In an effort to induce the Spanish and Portuguese Governments to grant asylum to additional refugee children, instructions have been sent by the State Department to our Missions at Madrid and Lisbon, similar to the instruc- tions recently transmitted to our diplomatic representa- tives in Switzerland, providing for the issuance of 1,000 immigration visas to refugee children from France, who arrive in Spain and Portugal on and after January 1, 1944, and before July 1, 1944. (ii) Portugal Dr. Robert C. Dexter has accepted the appointment, approved by Minister Norweb, as the Board's Special Repre- sentative in Lisbon and as Special Attache to the Legation on war refugee matters. (iii) Sweden About two months ago we were advised by Minister Johnson that, although the Swedish Government had been urged to make a public appeal to Germany to permit refugee children to come to Sweden from Poland, it had not taken action on the ground it was clear that Germany would reject such an appeal, if made. We subsequently received a report from London indicating that circumstances would appear to be favorable at this time to encourage the Swedish Government to request Germany to release up to 20,000 280 - 3 - refugee children of all nationalities. Accordingly, we have drafted a cable to Johnson which is pending at State, asking him to approach the Swedish Government and request that it take such action. We are pointing out to Johnson, for the information of the Swedish Government, that such an appeal should not now prejudice the possibility of refugees escaping unnoticed, a fear previously expressed by the Swedes, since the evacuation of refugees from Den- mark has now been completed, and stating that we would undertake to meet the Swedish request made in this connec- tion in 1943 with respect to assurances as to the eventual evacuation of the children from Sweden, the delivery of additional foodstuffs for their assistance while in Sweden and the furnishing of financial assistance to aid in their maintenance while there. (iv) Turkey On April 7 the Bulgarian "S.S. Maritza" arrived at Istanbul from Constanza with 244 Jewish refugees. Turkish authorities agreed to permit this group to land and have furnished them with rail transportation to Palestine although, according to Steinhardt, only a few of the refugees had Turkish visas and Palestine certificates. We have also received word from Steinhardt that the "S.S. Bellacitta" was expected to sail from Constanza on April 9. The Turkish Ambassador has advised us that it is his understanding that his government is no longer in- sisting upon a guarantee to replace the "S.S. Tari" in the event of loss with & passenger vessel but that it will accept a guarantee of & cargo ship. The governments of Switzerland and Sweden and the Holy See have been asked to support the request of the International Red Cross for a German safe-conduct for the "S.S. Tari." We have been advised by our Mission at Stockholm that the Swedish Minister to Berlin has been instructed to support the IRC request for safe-conduct for this vessel. The Russian Ambassador at Ankara has informed Steinhardt that his government is granting safe-conduct for the "S.S. Tari.' Although the signing of the charter party for the "S.S. Tari" should be delayed as long as possible until more definite word with regard to German safe-conduct is 281 - 4 - obtained, we are authorizing Steinhardt to use his own judgment in this matter and to charter the "S.S. Tari" when and if he deems it advisable. We have received 8. communication from Steinhardt that a member of the Swedish Legation at Ankara has expressed the belief that a Swedish vessel, "S.S. Barda- landa" now in the eastern Mediterranean, might be made available to transfer refugees from Constanza to Haifa. Steinhardt stated that this ship could be used in addition to the "S.S. Tari" and requested that we approach the Swedish Government on the matter. The "S.S. Bardalanda" is one of the Swedish vessels engaged in the Greek relief program and we are cabling Winant requesting that he take up with British Government the use of this vessel since our previous efforts to obtain the diversion of Swedish vessels engaged in Greek relief were opposed by the British who apparently did not wish to have any of these ships diverted for refugee evacuation. If Winant obtains the approval of the British Government to the proposed use of this vessel, he will then take up our request with the Swedish Ambassador in London, also asking the Swedish Government to obtain a German safe-conduct for the "S.S. Bardalanda." Steinhardt also advised that, since there apparently were a sufficiently large number of refugees to justify the use of ships in addition to the "S.S. Tari," and, since the obtaining of a German safe-conduct for the "S.S. Tari" is uncertain, that the JDC representative at Lisbon should resume and attempt to conclude his negotia- tions for a Portuguese vessel. The JDC has cabled its representative at Lisbon to this effect and we have asked Norweb and Dexter to give him all possible assistance in his effort to obtain a Portuguese ship for evacuating refugees from Rumania. (b) Yugoslavia Ackermann has recommended that Saxon, who has just returned to North Africa from Bari, be recalled to Washing- ton at once to review the details of the refugee situation, 282 - 5 - particularly the possibilities of rescue operations in and through Partisan territory. The Partisan representa- tives, according to Ackermann, claim to have done much already in this direction but they are handicapped by lack of ships, supplies, and money. (c) India A report has been received from our Mission at New Delhi to the effect that the standing finance committee of the Indian Legislative Assembly has approved the pro- posal to pay India's contribution toward the administration expenses of the Intergovernmental Committee. India has accepted the invitation to become & member government sub- ject to approval by its Legislative Assembly. No reply has as yet been received from the government to our Mission's approach as a result of the instructions con- tained in the circular airgram of January 26. Our Mission believes, however, that the Indian Government intends to limit its assistance in refugee matters to the payment of India's share of the administration expenses of the Intergovernmental Committee. (a) Latin American Countries In an endeavor to induce the Latin American Republics to give assurances to Switzerland similar to those we have given by means of the instructions issued to the U. S. Consular offices in Switzerland regarding the issuance of immigration visas to refugee children arriving in Switzer- land, cables have been despatched to our Missions in Brazil, Panama, Cuba, Dominican Republic, Colombia, Peru, Chile, Uruguay, Mexico, Costa Rica, El Salvador, Guatemala, Hon- duras, Nicaragua, Ecuador and Paraguay, requesting that the governments of these countries give such assurances to the Swiss Government. Those Latin American governments which do not have consular representatives in Switzerland qualified to issue visas are being advised that U. S. Con- sular offices are prepared, if they so desire, to issue such visas on behalf of the respective Latin American govern- ments. We are also advising the Latin American governments that the Special Representative of the War Refugee Board attached to the American Legation at Bern will be pleased 283 - 6 - to cooperate with the diplomatic and consular offices and the governments of the Latin American Republics. (e) Canada In an effort to obtain action by the Canadian Govern- ment parallel to that taken by this government, we have cabled the Embassy at Ottawa asking that the appropriate officials of the Canadian Government be advised of the instructions which were recently issued to United States Consular offices in Switzerland, authorizing the issuance of 4,000 immigration visas to refugee children arriving in Switzerland with the view of facilitating by such issuance the escape of additional refugee children to Switzerland and suggesting that the Canadian Government take similar steps with regard to 1,000 children. Canada had previously expressed its willingness to accept 1,000 refugee children from France. 3. SPECIAL PROJECTS (a) Internees in Occupied Europe holding Latin American Passports. Reports from Switzerland indicate that 238 Jews who had been interned at Vittel have been evacuated to an unknown prison. This was apparently done upon the ground that they possessed only accommodation passports issued by certain Latin American countries and consequently they were not eligible for exchange for German citizens in Latin America. Reports were also received that the Span- ish Government had been requested by the Germans to inquire into the validity of the Latin American passports held by these persons and that the Latin American governments had denied responsibility. The private agency making these reports stated that only by assuring the Germans that àn exchange is being prepared for these people could they be saved. We have cabled Harrison that it is essential that German doubts as to whether these persons are exchange material must be promptly and effectively dispelled and we have asked him to request the Swiss to use their good offices to inform the Germans that this government is 284 - 7 - undertaking discussions with Latin American countries for further exchanges of Germans in the western hemisphere for persons in German-controlled territory; that this government considers all internees who were at Vittel to be eligible for such exchange and that the Germans should be advised that in the meantime we expect these persons to be accorded the same treatment which Germany expects to be accorded to her citizens in the western hemisphere. Cables to our Missions in Costa Rica, Ecuador, El Salvador, Haiti, Peru, Nicaragua, Venezuela, and Paraguay, have also been despatched. We are asking that these governments be asked to give their approval to this government's approaching the German Government through appropriate channels with a view to initiating such ex- change negotiations. We also are requesting these Latin American governments to themselves approach the German Government through the protecting power with the demand that all persons claiming their citizenship on the basis of passports or consular documents be accorded the same treatment as that given to prisoners of war under the Geneva Convention. We have also cabled our Embassy in Madrid requesting it to report to the Spanish Government our vital interest in this matter and the pending discussions with the Latin American countries regarding a further exchange of civi- lians with Germany, setting forth the position of this government in the matter and requesting the Spanish Govern- ment to act at once to correct the impression which may have been created in Germany that there is & lack of interest on the part of the Latin American countries in the treatment of these persons who hold documents issued in the names of such countries. We have also asked both the Swiss and Spanish Govern- ments to make every effort to have the 238 persons, removed from Vittel, returned thereto. 285 - 8 - (b) Jewish Labor Committee Program for Evacuations from France. Upon the recommendation of the Board, a license was issued to the Jewish Labor Committee permitting its repre- sentative in Portugal to carry on relief and evacuation operations in enemy territory. An initial remittance of $10,000 was authorized to begin operations designed to rescue persecuted persons from France. Intruce 286 EMBASSY OF THE UNITED STATES OF AMERICA Buenos Aires, Argentina, 14547 April 21, 1944 Subject: Situation in Argentina as regards Relief and Rescue of Jews in Europe The Honorable. The Secretary of State, Washington. Sir: 1/ I have the honor to transmit herewith & memorandum prepared by Mr. John F. Griffiths of the Embassy staff in which an attempt is made to reply to the inquiries set forth in the fourth paragraph of the Department's circular airgram of January 26, 7 p.m. In brief, it may be said that the consensus of opinion among persons and organizations interested in the rescue and relief of Jews is that as long as the present Argentine governmental regime remains in power it will be useless to look to the Argentine authorities for any assistance whatsoever in reaching a solution of the problem. Enclosure: Respectfully yours, memorandum 840.1 13/ Edward L. Reed KIR:wrd To Department-in original. 287 Air Mail (Enclosure No. 1 to despatch 14547 of from Buenos Aires CONFIDENTIAL regarding relief and rescue of dons in Europe.) MEMORANDUM To 1 Mr. Reed April 19, 1944 From $ Mr. Griffiths Subject 1 The Existing Situation in the Argentine with respect to Jewish Refugees and Rescue Work As is naturally to be supposed, the local organizations interested in cooperating with UNRRA and other established agencies for the resoue of victims of Nazi persecution are now few in number, as the result of the early closure by the June 4 Revolutionary Government of all organizations known to harbor sympathies for the cause of the democracies. No noticeable change in the official attitude has as yet made itself felt. With particular reference to organized efforts in furtherance of the rescue of Jewish refugees, under 8. Government that enjoys no popular support other than that grudgingly furnished by anti-democracy "nationalists" in whose platform hatred for Jews holds a prominent place, I take it there is no hope for anything but official hostility. That hostility existed during the Castillo regime, expressed in the main by bureaucratic obstruction. To that sort of obstruction the present Government has added positive measures such as prohibiting public acts to raise funds, and refusing to permit the entry of Jews into the country. An outstanding example of official obstructions is furnished by the history of & project to bring to the Argen- tine 1,000 Jewish children under A years of age. President Castillo was with difficulty prevailed upon to issue a decree permitting that humane act, but it was provided that the decree should be mull and void after December 31, 1943. Came the June 4 revolution and the military Government refused to use its offices, through diplomatic action, to seek permission from the Nazi Government to remove the children from Germany. Came December 31, 1943 and 1,000 Jewish children who might have been rescued remained in Germany. 288 - 2 - In the course of the past year and so far this year, except for the restricted purpose activities of the Sionists (Committee to Raise Funds for the Reconstruction of the Palestine), what Jewish rescue activities have been carried on have been almost exclusively in the hands of two local Jewish organizations and their activities have been limited to the raising and transmittal of funds. Those two organiza- tions are: 1) Central Committee (Comite Central) 2) Jewish Junta to Aid Refugees (Junta de Ayuda Judia a Refugiados) The "Central Committee" is 8 nation-wide organization formed and operating under the auspices of the D.A.I.A. (Delegacion Argentina de Asociaciones Israelitas). Most of the funds they are able to raise, principally from small but widely popularized subscriptions and gifts, are adminis- tered for Jewish relief work through such agencies as the American Jewish Congress, of New York, the Joint Distribu- tion Committee, also in New York, and the Relief Committee in Geneva. From time to time funds are sent directly for use in individual cases, to help transport refugees from some European port of exit to the Palestine, for example. The "Jewish Junta to Aid Refugees" is a somewhat dissident organization, limited in number and made up mainly of a group of wealthy Jewish Argentines who insist on determining the destination and use of the funds they contribute. Funds raised by them since their establishment around the first of the current year total some 60,000 pesos. raised by the D.A.I.A. sponsored "Central Committee" and During the year 1943 approximately 460,000 pesos were Raise Funds for the Reconstruction of the Palestine". upwards of 450,000 pesos were raised by the "Committee to Probably it is known in Washington that D.A.I.A. with has offered, to the fullest extent local circumstances permit. clearly in good faith I believe, to cooperate UNRRA strictly limited by the hostile attitude That of the cooperation, present political set-up, would be principally through the American Jewish Congress as the intermediary. Regraded Unclassified 289 - 3 - Plans for future activities of the D.A.I.A. and of other agencies with similar objectives in the Argentine are necessarily indefinite. Much will surely be done if there comes a radical change in the Government which would doubt- less bring with it a more reasonable attitude toward the whole question of immigration. Until such change is brought about, relatively little can be done. Once made possible by governmental acquiescence, arrangements could at once be made to handle upwards of 2,000 refugee families through the Jewish Colonization Association alone. That association has large land holdings in the provinces of Entre Rios, Santa Fe, La Pampa, Santiago del Estero and Buenos Aires. I understand there are some 200,000 hectares (about 300,000 acres) available for refugee colonists. It 1s calculated that 100 hectares for each colonist would be a proper distribution. Then, there is 8. sort of suburban agrarian society known as Fomento Agrario with holdings in the province of Buenos Aires, about 90 kilometers from the Capital where they established, some 5 years ago, a colony called Avigdor, peopled by German Jews. The concentration is on truck farming, dairying and poultry raising and the normal distri- bution of land in this case is of 2 hectares for each colonist. I have not been able to learn how much land they might have available for refugees. It is quite evident, though, that with governmental cooperation, and with the cooperation of other governments, in the course of a few years the Argentine could absorb millions, not merely thousands. No conceivable political change would make possible the willing acceptance of a very large proportion of Jews among those proposed millions, though. J.F.G. 230 any - 644 Camberra This telegram must be paraphrased before being Dated April 31, 1944 e municated to anyone other than & Government Rec'd 10:25 Malls Agency. (BR) Secretary of State, Washington. 48, April 21, 11 The Legation has sent a formal note to the mini- stor for External Affairs stressing the urgency of the refuges question which has also been discussed formally with members of the Department of Internal Affairs (reference Department's tolegram grea yo. 40 of April 14, 10 Mallo embodying & nessage from the War Refugee Board). & reply stating the position of the Australian Government is premised at as early a date as possible. Is however, anticipate considerable delay as questions raised involve basic governmental policy on sigration. The duties of the Inter-Govern- mental Committee referred to in By airgram No. A=6 of February 17, 1 P.M. do not include var tim relief problems. The immediate question met be referred to the MinhatperMinister for the Interior who will probably wish to take it to babinet. The Prime Minister's absence will doubtlees delay action, " I believe approach to his is Washington sight be useful. For background I sugget my airgram 4-36 of December 6, 1943, 1 DoBo be más svailable to the War Refugee Board. UNSIGNED no 291 Habana Dated April 21, 1944 KEN-57 Rec'd 8:20 p.m. This telegram must be paraphrased before being communicated to anyone other than a Government agency. (NR) Secretary of State, Washington, 401, April 21, 6 p.m. Embassy lacks sufficient information concerning Laredo to approve scholarship although files reveal nothing unfavorable (Department's 344, April 18). He is understood to be nephew of former President Laredo Bru, BARDEN BB 292 CABLE TO AMBASSADOR WINANT, LONDON, FROM WAR REFUGEE BOARD The War Refugee Board requests that you transmit the following message to Dr. Ignacy Schwarzbart, 45 Queens Court, London, W.2: QUOTE The question of the internees in Vittel Titmoning Liebenau Compiegne and Belsen-Bergen is given the closest attention by the War Refugee Board, The United States government has requested Switzerland and Spain to inform the German authorities that it is prepared to consider all internees in possession of Latin American passports 8.8 exchange material. Steps have also been taken to secure cooperation of Latin American countries. Signed Goldmann, World Jewish Congress, New York. UNQUOTE April 21, 1944 11:45 A.m. LSLesser:als 4/21/44 293 TELEGRAM SENT GMY April 21, 1944 This telegram must be peraphrased before being 1 p.m. SECRET communicated to anyone other than a Government Agency. (SC-00) AMEMBASSY, MADRID. 1108 FOR THE AMBASSADOR FROM WAR REFUGEE BOARD The Spanish Government has on several occasions in the past, as the result of intercession by the Holy See whose humanitarian efforts on behalf of the persecuted refugees of Europe have resulted in the saving of thousands of lives, extended protection to groups of Sephardic Jews in Axis occupied areas and has intervened with Germany to accomplish their evacuation to Spain after release from Concentration camps. The War Refugee Board has now been informed that 400 such Sephardic Jews residing in Athens have recently beeh interned in a concentration camp. To forestall deportation to Poland and almost certain death it is vital that these Sephardic Jews be given Spanish protection. You are requested to approach appropriate Spanish officials to advise them of the situation of this group and to enlist the aid 4. of the Spanish Government in the resoue of these refugees. You are authorised to give full assurance to the Spanish Government that funds will be available for the support in Spain of such of these persons as may be evacuated to Spain and that prompt action to speed their departure from Spain to otherppleaces of refuge will be taken. Kindly advise the Department of all developments in this matter. The foregoing has been repeated to Bern for Tittman. HULL WRB :GIN:KG WE SE 4/20/44 294 PARAPHRASE OF TELEGRAM RECEIVED year: The American Imbassy. Madrid TO: The Secretary of State, Washington DATE: April 21, 1944 NUMBER: 1397 SECRET Representations have been made by the Bubassy to the Foreign Office covering the points brought up in number 992 NUMBER dated April 10 from the Department, including the return of two hundred and thirty-sight internees who have been moved from Vittel according to a report. In number 1090 dated April 19 from the Department & Foreign Official says that although the Government of Spain has no information re- garding the latter report it has given assurance that it will sttempt to learn the facts as seen as possible with a view toward endeavoring to arrange for the return of these refugees. That similar representations on the part of represente- tives of other American Republics concerned will support the demarche of the Mubassy is assumed. HAYNS DORINPL 4/26/44 295 ORIGINAL TEXT OF TELEGRAM SENT FROM: Secretary of State, Washington TO: American Legation, Stockholm DATED: April 21, 1944 NUMBER: 724 SECRET FROM WAR REFUGEE BOARD TO MINISTER JOHNSON AND OLSEN, AT STOCKHOLM, War Refugee Board is gratified by the Legation's efforts reported in your 908 and 1209 of March 16 and April 8. Please continue watching over situation in Finland and, as soon as sign of danger appears for Jews and central-European refugees there, urge the Swedish Government to carry out its informal undertaking reported in your 908, in line with its generous performance in the case of Danish Jews, Please also take all appropriate steps to ensure that knowledge of Swedish readiness to admit these people is known in proper quarters in Finland, While the Finnish situation should be clearer to observers in Sweden than it is here, the Board is extremely perturbed over the possibility of a sudden deterioration which would make rescue action impossible. It fully relies on you, how- ever, to see to it that action be taken before this group of people is placed in jeopardy of their lives. The Board notes that the informal undertaking reported in your 908 deals only with 113 #ewish refugees. This figure corresponds, on the basis of the Board's information, to the number of Jewish refugees from Germany and Austria only. On the basis of past events elsewhere, the Board considers that equal danger undoubtedly threatens many additional persons. According to the Board's information, Finland has 475 Danes, 131 Italians, 192 Norwegians, 144 Poles, 172 refugees from other countries occupied by Germany and a local Jewish com- munity of about 1500, of whom 940 have Nansen passports. Clearly. in the event of increased German influence, local and refugee Jews and many non-Jevish refugees would be equally threatened with Jewish refugees from Germany and Austria, You are requested therefore to ask that Swedish undertaking be extended to cover all of these persons. You will note that the total is less than half the number of the Danish Jews accorded refuge in Sweden, Please keep the Board informed regarding result of your action. This is WEB Stockholm Cable No. 3. 296 CABLE TO MINISTER JOHNSON AND OLSEN, STOCKHOLM Reference is made to your 1235 of April 11, War Refugee Board appreciates importance of Hellsted statement regarding extent of danger from Gestapo to many Germans, Swedes and others. Board is charged with rescuing QUOTE the victims of enemy oppression who are in imminent danger of death UNQUOTE regardless of religion, nationality or stateless status. Accordingly. Board would warnhy welcome Swedish action to afford rescue to all groups in Finland which would especially be endangered as a result of increased German influence. The above, however, does not detract from Board's deep concern about equal or greater danger threatening 113 Jewish refugees from Germany and Austria and about 2600 others refesred to in our No. of Board's attitude on this score is fully explained in aforementioned cable, and Board fully associates itself with your representations reported in your 1209 of April 8. Accordingly, the Board trusts that the Hellsted statement is not (repeat not) intended to modify the confidential assurance given by Boheman and reported in your 908 of March 16. Please obtain confirmation of mid assurance and, should you consider that danger is imminent, please press for immediate action. Cencerning Hellsted's remark that permission to refugees and others to enter Sweden would amount to discrediting Finnish government, Board suggeste that you refer him and other Swedish officials to Boheman statement reported in your 908 to the effect that the Finnish government has itself applied for the admission of Jewish refugees. With respect to the questions reported in your 1235, the Board holds that all persons referred to in our of are in danger. It is prepared to make arrange- ments for the evacuation from Sweden, as soon as practicalbe, of all persons, other than Swedes, who may be accorded refuge in Sweden, and for the maintenance in Sweden of such refugees who cannot claim the support of their own governments. For your information, Board has requested Gullion to report on possibility using FideAduas escape-route to Sweden from German-held Baltic areas, particularly Lithuania. Board.... 297 - 2 - would appreciate your view and comments as to feasibility of such escape. Reference made Olsen's No. 3. Board gratified by favorable Swedish reaction to his appointment and approves statements made to press. This is WRB Cable No. 4a April 21, 1944 11:45 none 298 PARAPHRASE OF TELEGRAM RECEIVED FROM: The American Minister, Stockholm TO: The Secretary of State, Washington DATE: April 21, 1944 NUMBER: 1379 SECRET According to Hellstedt Swedish visas have been authorized for one hundred central European refugees now in Finland, as a starter - please refer to number 1235 dated April 11 from the Legation. It was stressed by Hellstedt that visas are being granted for humanitarian reasons since the refugees are panicky and not (repeat not) because the Government of Sweden believes there is any danger. JOHNSON DCR:MPL 4/22/44 Regraded Unclassified 299 0013-990 Born This telegram must be yarephrased before being Dated April 21, 1944 communicated to anyone other than a Government Rec'd 5141 P.B. Agency. (32) Secretary of State, Washington. 2580, April 21, 8 pollo My telegram No. 2,320 of April 14. It is reported from Budapest that Hungarian Jewish Commissioner Indro declared there April 18 that while san are not new to be concentrated into a ghetto they will be accommedated in districts where Terreristic aviation attacks are to be expected". Bangarian press early in April announced the evacus- tion of residential quarters in the exposed factory and other districts of the capital and its suburbs. Medrod statement which has been publicised in the German press apparently refers to such areas and is intended to make prepaganda use of the some 400,000 dave now resident in the Imagarian capital. HARRISON. your 300 Regraded Unclassifie PARAPHRASE OF TELEGRAM RECEIVED FROM: American Legation, Born TO: Secretary of State, Washington DATED: April 21, 1944 NUMBER: 2561 CONFIDENTIAL Department's cable no. 1168 dated April 6 is referred to herewith. Following is substance of message from Blochlaine for Andre Mayer: Here there has been great interest in the President's statement but I agree with you that an effort must be made to give it more effect. Swiss Government's official atti- tude concerning Jewish and non-Jewish refugees is as you state, but at times there have been deviations from rules under pressure of public opinion, thanks particularly to tireless efforts of organizations and individuals. There is such arbitrariness and secrecy involved, and it is impossible to secure exact statistics. For time being, apparently, rejections are not number- our, principally because of few arrivals due to danger in approaching heavily guarded frontier and travel difficul- ties, but restrictive policy undoubtedly has heretofore pre- vented arrival of great number of wretched Jews of both sexes who are now deported, imprisoned or dead and it still acts as deterrent on efforts to escape. Various persons concerned with the problem have been contacted by no and I believe it is useless to form new group here or stir up new movement here. There is being done or tried everything possible that can be done within the country. United Nations Governments, to expect radical change in situation, should 1. Refer to Government of Switserland to take over substantia, share of cost of upkeep of now refugees. 2. Give Swiss Government formal undertakingthat with this reasonable length of time after and of war all refugees entering after given date will be removed. The first point is of secondary importance. Point number two is essential and is very core of the question, according to competent advice. We have reason to believe dueed to its frontiers either under pressure of opin- that, with such guarantee, Swise Government could be in- ion or of open its own accord. The time for such initiative to have effect apprrrs ripe. 301 TELEGRAM SENT This telegram must bE April 21, 1944 paraphrased before being communicated to anyont 1 p.m. other than a Governmental agrody. (BR) U.S. URGENT AMERIBASSY, MOSCOW. 980 FOR TE AMBASSADOR FROM THE SECRETARY OF THE TREASURY I am most grateful for your help in securing a favor- of last night) ablo reply. [Referense yours 1380 YORK Please deliver this personal message to the People's Commissar for Foreign Affairs and the People's Commissar of Finance. UOTE I wish to express my sincere thanks for your deci- sion to have the experts of the Soviet Union associate themsolves with the rinciples of the Joint Statement of experts recommending the establishment of an International Monstary Fund. We regard the publication of the Joint Statement as of the greatest importance. It is further evidence that our two countries are determined to work side by side in the solution of international monetary and financial problems. Regraded Unclassified 302 -2- #980, April 21, 1 p.m., to Moscow. V. I an in accord with the circumstances mentioned in your message. I assume you will instruct the technical financial delegation of the Soviet Union to associate themselves with the principles of the Joint Statement. They have already been informed of the substance of your message. END QUOTE HULL (EGC) FIA :EGC I ja 4/21/44 Regraded Unclassified 303 NOT TO BE RE-TRANSMITTED SECRET COPY NO OPTEL No. 128 Information received up to 10 ..M. 21st April 1944. 1. NAVAL Home Watern: 18th/19th One of H.M. Destroyers and 2 E.T.B.'s damaged It number of E -Boato suspected of mine-laying off ISLE OF IGHT. 20th/21st. Mine laying by aircraft oft HUMBER subpected. Mediterranean Hostile shelling in ANZIO port area increased on 18th and 19th. 0.8. Destroyer Intercepted 4 E-Bosts West of ANZIO on 20th, one probably sunk, another damaged. 2. MILITARY Russia hussians have repelled heavy German attacks on beldgehoad S.n. of NARVA and there has also been heavy fighting S.W. of STARNOPOL. Burma In ARAKAN our troops have captured a hill feature 3 miles N. of 30THIDAUNG. Jupanese attacks on our positions 25 miles S.M. of IMPHAL and near IMPHAL-TIDDIM road have been repulsed. 3. AIR OPERATIONS Testern Front 20th Spcorted Fortresses and Liberators (9 missing) dropped 1640 tons through ground have on militory objectives in Northern FRANCE. bombers attacked coastal :defences and military objectives* CAMBRAI in sirfields, 4 enemy aircraft dostroyed in air and 4 on ground. NORTHERN Medium FRANCE. Other aircraft bombed ctilway centros at CREIL and tons Of a and set fice to 3 epcort. vossels. 20th/21pt, aircraft 5-chip convoy off FRISIAN ISLAND, Beaufighters sank A 2,000 ship COLOGNE 379, railyay dopote PARIS LA CHAPELLE Intrudors 269, 36, OTTIGNIS desp&tched: 196, LENS 175, CHAMREE 14, BERLIN d, Romber support 26, Sea-mining 38, Loaflets 32. Proliminary reports indicate 16 bombarn miscing, rosults apparently aatisfactory. aircraft flo over scattered inland 80085 without coordination, About 30 enclay in YOKSHIRE, LONCOLNSHIRE and SUFFOLK, NORFOLK cousing and plight 48062 apparent damage. Later 6 believed Intruders operated briefly over SUFFOLK. 2 enemy aircraft destroyed by night fighters. Italy 20th Fortrorses deopped 91 tons on ANCONA and 138 tons VENICE Hurbour. Liberators deopped 66 tons on bridge UDINE it F.JID, 41 tons on on MESTRE, 285 tons en доск at MALFALCONE and in aren, 85 tons at TRIESTE. ТИЗМТЛАЯ Regraded Unclassified 304 April 22, 1944 Mr. White Secretary Morgenthau Would you please prepare a letter for my signature to Mr. Harriman along the same lines as the one which you wrote to Ambassador Winant yesterday. Thank you. Letter in for Sig. 4/26/14 Regraded Unclassified 305 April 22, 1944 Mr. White Secretary Morgenthau Would you please let me know whether the lend-lease on silver to India has gone through. I also would like to know how much silver, through one method or another, we have let India have this year. Whitis them in 4/25/44 Regraded Unclassified TREASURY DEPARTMENT 306/4 INTER OFFICE COMMUNICATION MA DATE Apr. 22, 1944 TO Secretary Morgenthau FROM Mr. White HDW Subject: Status of lend-leasing 90 million ounces of silver to India. We have been informed by the State Department that an understanding has been reached with the British Government with respect to the guarantees to be given for returning the silver lend-leased to India to the United States Treasury. We understand that the agreement with the British will be kept secret. As soon as the British sign the formal documents, the State Department will advise the Foreign Economic Administra- tion to put through the requisition for lend-leasing the silver to India. We are keeping in close touch with both the State Department and the Foreign Economic Administration and will be prepared to expedite the shipment of the silver to India when the requisition is completed. A total of 20 million ounces of silver was lend-leased to India in 1943 and 10 million ounces has been lend-leased to date in 1944. Regraded Unclassified 307 as April 22, 1944. Dear Mr. Batt: In the absence of the Secretary, I as acknowledging your letter of April 20, which enclosed a carpor of Mr. Demald N. Nelson's regular monthly report to the President on production performance against materials and equipment consitments of the Third Russian Protecol. I shall be very glad to bring your letter and the report to Mr. Mergenthan's attention as soon as be returns to the effice. Sincerely yours, (Signed) #. S. Klotz m 1. 3. Nots, Private Secretary. Mr. V. 1. 2019, Var Production Beard, Vashington, D. e. KP/dbs Regraded Unclassified 308 ORVICTORY BUY - must WAR PRODUCTION BOARD WAR WASHINGTON, D. C. April 20, 1944 IN REPLY REFER TO: The Honorable The Secretary of the Treasury My dear Mr. Secretary: There is attached for your information a copy of Mr. Donald M. Nelson's regular monthly report to the President on production performance against materials and equipment commitments of the Third Russian Protocol. Sincerely yours, mh Daw W. L. Batt Attachment Regraded Unclassified 309 ACTORY BUY E - WAR PRODUCTION BOARD WASHINGTON, D. C. SECRET April 17, 1944 IN REPLY REFER TO: My dear Mr. President: Attached hereto is a tabulation showing progress made during March, and during the nine months ending March 31, 1944 towards fulfilment of Third Protocol materials and equipment production programs for the Union of Soviet Socialist Republics. There is also attached a summary of the major problems and developments which have marked production aspects of the program during the first three quarters of the Protocol period. Respectfully yours, /e/ Donald M. Nelson The President The White House Washington, D. 0. Attachments .RCRET 2-800P Regraded Unclassified 310 SECRET SUMMARY OF PRODUCTION DEVELOPMENTS IN THE SOVIET MATERIALS AND EQUIPMENT PROGRAM IN THE FIRST THREE QUARTERS OF THE THIRD PROTOCOL PERIOD I. MATERIALS Because of the easing of the domestic materials situation, as well as because of intensification of efforts to arrange satisfactory delivery schedules, stated Soviet requirements for all important materials are being met in full. Except for a few minor items, it has not been necessary for some time to reduce a request of the USSR for a raw material or semi-fabricated product because of supply considerations. Shipping limitations continue to restrict the flow of several bulky items. Aside from this, however, materials are going forward at the rate desired by the USSR. Aluminum to the full amount requested has been scheduled for the last half of the Protocol year. The same is true of copper base alloys, carbon steel, alloy steel, railway materials, ferro-alloys, and all major chemicals. Nickel, several special alloy wires, and a few special purpose chemicals have been held under the amounts re- quested by the USSR because of continued tight supply conditions, but even at the case of these there has been a very substantial increase in average monthly shipments during the past quarter and further increases are scheduled for the current quarter. II. INDUSTRIAL EQUIPMENT The present status of the Third Protocol industrial equipment program must be considered against the background of (a) the stocks situs- tion, (b) delays in the submission of new orders, and (c) the impact of several domestic programs, particularly the landing craft program, which have been granted overriding priorities because of strategic considera- tions. lest the new industrial equipment program offered the USSR result in the At the beginning of the Third Protocol period there was concern accumulation of excessive stocks. Calculations which weighed the tonnage of items held in this country as of July 1, 1943 and the tonnage of items scheduled for delivery during the coming twelve months against prospective out of hand in the same way that stocks of steel and certain other materials shipping seemed to indicate that stocks of industrial items might get had gotten out of hand during the Second Protocol period. Because of Regraded Unclassified 311 and - 2 - - 3 - this, those charged with over-all responsibility for the Russian program were inclined to discourage application of pressurer to expedite deliver- 1es of industrial items. It vis generally felt unwise to insist upon The general effect of these several factore was that for many shipments at a given rate simply because such a rate had been net up in types of equipment going to the USSR, production vas behind Protocol the Protocol schedule, and without regard to whether the equipment thus offers at the close of the third quarter of the Protocol period. Total made available could be lifted. deliveries of industrial equipment, in terms of dollar value, vere only slightly under the amount promised, and all indications were that between To an extent, developments have demonstrated that there was March 31st and the end of June shipments will be increased to a point which justification for this attitude. Despite conservatism re expediting de- vill insure the US having made available from the over-all standpoint at liveries, the tonnage of industrial equipment held in Ordnance and Treasury least $431,000,000 - i.e. the amount offered in the Protocol. However, warehouses increased from some 97,000 short toos as of June 30, 1943 to this is due to accelerated shipmente in the case of several relatively some 167,000 short tone as of March 31, 1944. easy items. In spite of it, the USSA will not have received the amount of several important items which the US promised to make available. It should be noted, however, that a very small number of items The detailed outlook by categories is as follower were responsible for this situation. Of the 167,000 short tone held in storage on March 31st, approximately 120,000 consisted of machine tools, forging presses and hammers, power equipment, and complete industrial Cemented Carbide Tipe and Blanks: Although there was some delay plants. Stocke of all other industrial equipment, which included nome in the clearance of Third Protocol orders, it was possible to work out sixty odd categories of maintenance and replacement items indispensable satisfactory schedules and all contracts are expected to be completed for the operation of the industrial establishment of the USSR, totalled by June 30, 1944. only nome 47,000 short tons. Small Outtine Tools: New Third Protocol orders were very slow Of more importance in holding back industrial equipment than - in coming in, and considerable difficulty vas experienced in arranging the conservation of US officials vas the delay of Soviet representa- for placement of contracts. In several cases orders had to be shifted tives in preparing and submitting specifications against Third Protocol from one company to another and special expediting pressures were necessary, offere. It will be recalled that in reports prepared by the War Produc- The great majority of orders are expected to be completed by June 30th, tion Board during the first half of the Protocol period attention was but a few important ones will probably be carried over into the Fourth repeatedly called to the necessity of requisitions being cleared Immediate- Protocol period. ly if adequate time were to be allowed for production cycles required for completion of orders before the end of the Protocol period. Despite these Measurine Toola: The same difficulties were experienced in the and other efforts of the WPB, however, a large part of the new orders case of measuring tools as for small outting tools. Most of these diffi- Authorized under the Third Protocol was not cleared until December. Jam- culties have been overcome, but it is nevertheless anticipated that & few ary, and February. Among the items affected were electric furnaces, ordere will be carried over and the full Protocol promise will not be not. rolling mille and auxiliary equipment, wire drawing machines, cranes, pumps, control instruments, small cutting toole, etc, Abrasive Graine and Abrasive Products: Despite relatively tight supply conditions, it vse possible to schedule ordere satisfactorily, and This late forwarding of requisitions inevitably raleed grave shipments at the end of the third quarter were ahead of Protocol promises. scheduling problems, it not being possible to arrange for shipment over A principal reason for this was the fact that all orders were cleared very a five to seven month period the quantities of critical items which had early in the Protocol period. been offered for delivery over a twelve month period. This was especially true mince a number of urgent domestic programs, all of which conflicted Machine Tools: The Third Protocol machine tool offer was one with Russian items in regard to componente, fabricating facilities and of the most ambitious made by the US. It represented more than 15% of labor, were given overriding priorities during the very months in which total production schedules for the corresponding period in the US, How- the Russian items had to be scheduled. sver, the entire offer was covered by orders placed in advance of the opening of the Third Protocol period, and, because of this, it vaa possi- ble immediately to put the program on a sound, scheduled basis. Regraded Unclassified 312 BECEBE - 4 - 5 - Through January, average monthly shipmente of machine tools vere above the rate promised. In February and March there vus A elight The program as finally approved included A rail and structural falling off, largely because manufacturers were finding it necessary to sill. & blooming mill, electrical aquipment for the above mills, fish spread remaining orders which they had on their books in such & vay as plate and tie plate installations, Besemer converters. hot metal mizers, to enable than to maintain their labor supply, etc., at & level which transfer care, coke cars, hot metal cars, turbo blowere, de-watering equip- would insure their being in a position to take care of future emergency cast. and foundry equipment. It is anticipated that supply of this equip- ordere which night come in. Although this resulted in accumulative cen sent will contribute to the recovery of the Soviet staol industry and will liveries through March falling under the amount promised, this has caused consequently help the USER to meet more fully its steel requirements from little concern. Stocks of Soviet muchine tools at the and of March were its own resources and reduce the quantity required from this country. very large, totalling moro than 46 000 short tobs or approximately $70,000,000. Nevertheless, it is expected that during the next three Prosses. Forces. Harmors. and Related Equipment: Under the months, shiphente will again increase with result that by June 30th $30,000,000 Third Protocol program were included such items as forging practically all orders vill have been completed. grosson. humers, abears, bolt and out equipment, punching presses. manipu- lators, maxi-presses, etc. Among these were some of the largest machines Xlactric Furnaces: Although the electric furnace industry is of this type which have ever been produced. generally in good shape, difficulties have been experienced 1a the execu- Fev production problems have been encountered in connection with tion of the Russian program. The offer of $12,000,000 vas relatively large, requiring an appreciable percentage of total US capacity. At the the program. However, the entire program has been repeatedly est back same time, orders were late in coming in: there vae an unexpected con- through diversion of items to the small truck program. the malleable iron centration in the small eise range: and certain components, notably program, the landing craft program, and other domestic programs. In con- instruments, fractional motors, and frequency changer ests, offered sequence. by June 30th there probably will not have been delivered more problems because of conflict with domestic programs. As a. result of than $34,000,000 against the promised $30,000,000. However, stocks of these factors, it appears likely that deliverics during the Protocol ( squipment of this type hold on USSR account are very large, totalling as period will fall short of the $12,000,000 promised by $2,000,000 to of March 32st more than 25,000 tons, and it 16 felt that the rate of $3,000,000. Navarthaless, it is falt that adequate supplies of furnaces are shipment is adequate to seet realistic Soviet needs. being, and vill continue to be, made available to meet shipping availabili- Wire Praving Squipment: The $2,000,000 Third Protocol offer ties and to take care of all reasonable Soviet requirements. vas intended to cover saventy-seven machines which had been ordered in advance of June 30, 1943, and thirty-five additional machines which the Rolling Kills and Doutness. and Reminant For Blast. Hearth. and Coke Turnaces' Total Third Protocol offers for equipment of this USSR stated that it wished to order after June 30th. type amounted to $26,000,000. These offers were formulated to cover & In the case of the old orders for seventy-seven machines, pro- specific list of squipment which the USAR had indicated that 10 urgently duction has been in accordance with schedule and all will be completed needed and which it was found could be scheduled for delivery during before June 30, 1944. The dollar value involved 1a approximately $1,000,000. the pariod May, 1943 - June, 1944. However, there were delays of several In the case of the new orders for thirty-five machines, clearance was not months before problems in regard to supply of the equipment vare cleared worked out by the Soviet Purchasing Commission and the yea until February. up by the TEA and the Soviet Purchasing Commission. As a. result, the These ordere will consequently have to be carried over into the Fourth VP3 found 16 necessary to notify the TRA that insufficient time remained for ordere to be placed and fabrication completed by June 30th, It vas Protocol period. subsequently agreed, however, to go aboad with the program with 11 being The $12,500,000 offered under the Third Protocol in- understood that the equipment, with the exception of a few minor items cluded some $7,000,000 of old orders for Treasury procured items and an which required short lead factors, would not be completed prior to the retimated $5,500,000 of War Department procured items. Since formulation opening of the Fourth Protocol period. of the Third Protocol, however, a re-survey by the War Department has - realed that no equipment which can properly be classified "Excavator Equip- ment" is being procured by that agency for the USSR. (Equipment which truck was originally considered "Escavator Equipment" 1e now classified under Regraded Unclassified 313 was - 6 - - 7 and tractor cranse and various construction equipment.) To all intents Despite this, and despite difficulty in securing required bearings and and purposes. therefore, the Third Protocol excevator program 1s not a motore, it has been possible to arrange satisfactory schedules and few $12,500,000 but a $7,000,000 progrem. contracts will have to be carried over. Even for a $7,000.000 program, numerous scheduling difficulties Welding Equipment: The welding equipment program has gone have been encountered. US capacity 1e almost entirely taken up by Argy, smoothly. Schedules are satisfactory and It is expected that the full Mary, and the British and US surface oining programs. Purther, equipment Protocol commitment will be met without difficulty. Items being supplied being procured for the USSR is of such nature that only two companies are under the program are designed for repair work on barges, railways, and capable of handling it. Because of these difficulties, it 10 expected structural shapes in buildings. as well 48 for use in the manufacture that It will be necessary to extend several important contracts beyond of tanks, trucks, etc. June 30, 1944. Valves and Fittings: A substantially larger program than the Cranest The actual Third Protocol program is substantially larger $3,000,000 offered is being carried out under the Third Protocol, a than the $22,000,000 offered. The reason for this is that many of the items number of important orders having been accepted under the emergency being procured by the War Department which were formerly classified as equipment category. The program is proceeding moothly and satisfactory Excavator Equipment" properly fall under this catagory. deliverisa are being maintained. Production problems of a erious nature have been encountered. Ensuratic Tools: Third Protocol orders for pneumatic tools are In the case of special metallurgical cranes such as Indle cranes and in- being procured by the Var Department and it is understood that satis- got strippere, difficulty has been experienced in securing bearings. factory progress le being made on them. Data se to details have not Also, after much preliminary work had been completed, Soviet representa- been zade available by the Var Department, however, All pre-Third Pro- tives insisted upon changes in specifications ende necessary by war develop- tocol orders, which are being procured by Treasury, will be completed ments in the USSR. Mining hoista which form an important part of the before June 30th. program, were placed on order only late in the Protocol period and several Control Instruments and Testing Machines: Included in this componente, notably gears and electrical equipment, have slowed down pro- duction. For the program se 8 whole, set-backs have resulted from COD- category of equipment are circular and linear dividing machines, universal flicts with the rubber program and with the landing craft program. Be- and hydraulic testers, dynometer testers, proving rings, tool makers cause of these various factors, it la not expected that all contracts microscopes, etc. All items will be completed and delivered by June 30, will be completed by June 30th. 1944, except circular and linear dividing machines. Prior to the out- brenk of the ver, circular and linear dividing machines were not pro- Compressors. Gas Blowers. Exhancters. and Pana: The Third Pro- duced in the US, Europe being the sole source of supply. One US company tocol program vas not presented to the WPB until December, 1943 - January, has developed fabricating facilities but its capacity in limited to one 1944. A few orders have only recently been submitted. Retarded deliver- or two machines a year. The USSR has twenty-one on order. Most of these iss have been entirely due to this delay. as the program offers no pro- vill necessarily have to be carried over into the Fourth Protocol period. duction problems. Anti-Friction Bearings: An pointed out in previous reports. the Soviet anti-friction bearings program has come into conflict with re- Pugga: Fumps being supplied under the Third Protocol are con- quirements of the lamine craft program, the heavy duty truck program, sidered one of the most important items in the industrial equipment pro- the synthetic rubber progrem and the agricultural equipment program, 0.0 gram. Included are a group of exceptionally large pumps intended for use well as other importent domestic programs. As a result, it will not be in the re-establishment of reservoir and water systems contaminated or possible to produce by June 30th the $15,000,000 promised. A special destroyed in the occupied territories, mining pumps needed for the re- effort in being made to deliver such bearings as Soviet representatives opening of Donete coal mines, special chemical pumps. etc. No Third Pro- state pre most orgently needed for their var effort. but from the over- tocol requisitions were placed until after the first of January. 1944. all standpoint it is expected that we vill fail to neet the formal com- sitment by some $3,000,000 to $5,000,000. Regraded Unclassified 314 above aso - 8 - - 9 - Block Signal System: The Third Protocol program consists of a of this type vas limited to $36,500,000. However, orders on the books block signal system designed for 3,000 kilonsters of railways under as of June 30, 1943 considerably exceeded this amount. Further, additional ideal conditions or 5,000 to 10,000 kilometers under reasonably satis- items have been approved under the emergency equipment offer. factory working conditions. The equipment being supplied is identical to that required for domestic use with the exception of centralizers Deliveries under this category have been generally antisfactory. which are peculiar to USSR operations. Competition with other programs has delayed completion of electric motors and other electrical equipment, but despite this, the flow of these items Work on the system is proceeding satisfactorily and it 10 antici- has been large. Some of the other equipment included in this category pated that virtually all shipments from plant will have been completed has been hald up because of difficulty in securing components. but this by June 30th, again has not seriously affected the situation of the USSR, ample supplies having been nade available to meet the more pressing needs of that country. Power Program: The Third Protocol power program consisted of approximately $40,000,000 of equipment ordered, but not delivered, during Altogether, through March net a total of $67,000,000 of suxiliary the Second Protocol pariod, and $57,000,000 of new Third Protocol orders. equipment had been shipped from plant, and it 1a anticipated that at least $33,000,000 additional will be shipped between the and of March and June of the orders carried forward from the Second Protocol, roughly 30th, 98% vere completed by the end of March, 1944. The items still to be de- livared, principally boilers, spare parts, switch gear, and process pip- ing, will all be finlabed and shipped from plant in the next few weeks, In the case of the $57,000,000 of equipment placed under order since July 1, 1943, it 16 expected that approximately 60% (about $33,000,000) will be shipped from plant by June 30, 1944. Inability to complete the TO- maining 40% 1e largely the result of re-engineering and re-designing upon which the Russians have insisted. When the new Third Protocol program VI.I offered to the USSR, it was anticipated that work done on plants previous- ly supplied would make possible proceeding with production thout pre- liminary engineering. However, because of changing conditions in the USSR, Bussian representatives felt it necessary to ank for new specifications in many instances. After re-designing had been completed, the bill of materials already worked out for components, ote, could not be used for the new plants and complete re-surveye had to be made, This resulted in loss of approximately three months in the placing of orders for 000- ponents and other materials. Steel plate particularly caused trouble because space in mill schedules who lost for a period of several months. A further cause of delay in the program was conflict with urgent domestic programs, particularly the landing craft program. Auxiliary Industrial Equipment: This category includes a wide variety of equipment of which the most important are electric motors, other electrical equipment, engines and turbines, industrial trucks and tractore, petroleum refinery equipment, oil well drilling equipment, comminications equipment, smelting and alloying equipment, hand tools, and agricultural machinery. The Third Protocol offer for all equipment Regraded Unclassified STATUS OF MATERIALS AND EQUIPMENT PRODUCTION PROGRAMS usi. - THIRD RUSSIAN PROTOCOL a OF APRIL 1, 1944 (MARCH DELIVERY DATA SUBJECT TO ENVISION) Pro- Item Unit 3rd Made Available Made Available Percent of Ratio of Balance to be Comments tocol Protocol at Mill in U.S.A. at Mill in U.S.A. 3rd Prot. Actual Produced Item Production Mar. 1, 1944 - July 1, 1943 - Program Deliveries to M of Apr. 1, 1944 No. Program Mar. 31, 1944 Mar. 31, 1944 Completed Prot.Sched. To Complete as of (Prot.Sched.=100) 3rd Protocol Apr. 1, 1944 Prod. Program NON-7%RIOUS METALS Aluminus shipments to date com- sist of 5,278 S.T. red and tab- 3 Alumisum (Inget and Fabricated) S.9. 35,760 14,982 72,946 204 272 (37,186 Excess) ing: 18,444 S.T. sheet; and 49,224 S.T. inget including secondary. % Fickel Includes shipment on U.S. ao- & Pig Fickel 5.7. 3,600 300 3,900 108 144 (300 Excess) count of 800 S.T. from U.K. stocks. The 274 S.T. shows as the Third Protocol production program is 3 Wickel in Nonel Scrap S.T. 274 o 274 100 133 o the quantity selected by the U.S.S.R. out of a total of 600 S.T. originally offered. Contained sickal deliveries to date consist of 923 S.T. is steel; 337 8,7, to nichrose wire and o Nickel in Steel and Other S.T. 2,400 108 1,681 70 93 719 strip: 295 S.T. in cupro-niskel Non-Ferrous Products strip: and 126 S.T. in various - other products including pure nickel products. 5 Molybdemum 5.7. 4,000 333 3,330 83 in 670 Electrolytic copper figures N° for to copper contained in vari- our miterials requiring copper which are being supplied the U.S.S.R. Deliveries to date include 64,854 s.f. contained is copper base alleys: 10,025 S.T. contained in copper goods 6 Copper, Electrolytic S.T. (121,400) (13,725) (88,371) (73) (97) (33,029) and tabes: 674 S.f. contained in bimetal: and 12,818 S.T. contained in vire mill products, Is addition to the copper pro- gram shows, the V.P.B. has más arrangements for the supply of 16,800 S.T. of copper wire bare during the remainder of the Third Protocol period. 31 Regraded Unclassifie Pro- Item Unit 3rd Hade Available Hade Available Percent of Ratio of Balance to be Consents tocol Protocol at xm in U.S.A. at mill in U.S.A. 3rd Prot. Actual Produced Item Production Mar. 1, 1944 July 1, 1943 - Program Deliverise to AS of Apr. 1, 1944 No. Program Har. 31, 1944 Mar. 31, 1944 Completed Prot.Sched. To Complete as of (Pret,Sched,*100) 3rd Protocol Anr. 1, 1944 Prod. Program NON-FERROUS METAIS (Continued) 7 Copper Base Alleys S.f. 107,520 15,974 85,227 82 109 19,293 E Magnesium S.T. 4,032 335 3,024 75 100 1,008 9 Zine S.T. 13,440 1,120 10,080 75 100 3,360 11 Copper Goods and Tubes 8.7. 15,000 1,275 10,025 67 65 4,975 The third Protocol provides that - to 269 S.f. of special - ferrous vires my be ordered. Until the present, hovever, only 100 S.T. have boen requisitioned. The Third Protocol production schedule 1a, therefore, limited to this amount, Deliveries to date include A S.T. of tangstes alley wire: 2.9 S.f. of constaa- 29 Special Non-Ferrous Alloy S.T. 100 13 90 90 120 10 tan vire: ,4 S.T. of tastalum wire: 33.1 8.9. of alwel and Vires chromel vire: 15.9 S.T. of monal, overdur and beryllium bronse wire: 5.7 8.2. of enamelled - gania wire; 19.8 5.7. of molyb- denue vire: -5 S.T. of manganis virg: 5.7 S.T. of round maganis wire: 5-3 S.T. of hare thereo- couple wire: and -3 S.T. of Zenet solybdenns vire. On urgent request of the U.S.S.R., the U.S. has agreed to undertake supply of 134 S.T. is addition to the amount originally offered in the Protocol. Soverer, due to AS acute shortage of chrosise 30 Nichrose Wire S.T. 5.38 23 222 76 104 116 metal, difficulty is being - countered is scheduling this added quantity. la consequence, it vill probably be necessary to carry & 1-rge part of it over into the Fourth Protocol period. USE 316 Regraded Unclassified Pro- Item Unit 3rd Made Available Made Available Percent of Ratio of Balance to be Compents Protocol at Fill is U.S.A. at Mill in U.S.A. 3rd Prot. Actual Produced tocol Item Production Mar. 1, 1944 - July 1, 19:3- Program Deliveries to as of Apr. 1, 1944 No. Program Mar. 31, 1944 Mar. 31, 1944 Completed Prot.Sched. To Complete ná of (Prot.Sched.=100) 3rd Protocol Apr. 1, 1944 Prod. Frogram FOR-FIRMOUS METALS (Continued) The Third Protocol cadaium cossit- ment vas originally included is the Canadian schedule, but due to a difficult supply situation is 93 Ordaine S.T. 112 28 56 50 100 56 Canada, the U.S. agreed to take this over as the 112 s.r. due is the second half of the Protocol period. The production program above is for the first half of the Third Protocol period: the ratio of actual deliveries to the Proto- col schedule bes, therefore, been adjusted to take this late account. The October shipment completed the full original he 94 Cobalt S.T. 80.5 o 80.5 100 133 0 tocol offer. The U.S.S.R. - cently requested the Increase of the Protocol offering by 78 s.r. The U.E. has agreed to supply one-half of this along with the 80.5 S.T. included in its Pro- toool schedule. The U.S. will supply the reminder. Total Con-Ferrous Metale (Excluding Item 6, S.T. 186,855.5 34,192 194,135.5 104 139 (7,279 Excess) Concer, Electrolytic) FERRO-ALLOYS 12 Ferrosilicom S.T. - o 57 - - - Because of the stocks situation, Third Protocol offers to supply up to 78% S.T. of ferresilicon and S.T. of ferrochrous per 13 Ferrochrome S.P. - 0 o - - . month are considered insperative. I 317 Regraded Unclassified Pro- Item Unit 3rd Hade Available Made Available Percent of Ratio of Balance to be Commants tocol Protocol at Mill in U.S.A. at Fill in U.S.A. 3rd Prot. Actual Produced Item Production Mar. 1, 1944 - July 1, 1943 - Program Deliveries to as of Apr. 1. 1944 No. Program Mar. 31, 1944 Mar. 31, 1944 Completed Prot.Sched. To Complete as of (Prot.Sched.=100) 3rd Protocol Apr. 1, 1944 Prod. Program FREEO-ALLOYS (Continued) 854 Perronolyblemus 8.9. 1,456 o 1,120 77 183 336 forrovanation, and forretungsten have been scheduled in the quantities above under the Third Protocol produc- ties program as aubstitutes for - equivalent scanage of ferre- 86 Ferrovanadium S.T. 358 0 224 63 150 134 silicon end/or ferrochross. to- cluded is these quantities are 336 S.T. ferronolyblems, 134 S.T. forrovanadium, and 224 S.T. ferrotungsten which are current- ly being approved for delivery 67 Perrotungsten S.T. 1,064 o 526 49 148 538 in the second quarter, 1944, Total Forre-Alleys 8.7. - o 1,927 - - 1,008 ALLOT STEEL 16 Polished Drill Rod 3 Righ Speed S.f. 96 11 85 89 119 11 c Other Allay S.f. 45 3 bo 89 119 5 17 Righ Speed feel Steel s.r. 4,480 203 4,551 104 139 (171 Excess) 18 feel Steel 3 Alley n2 S.P. 672 70 665 99 132 7 c Alley X12M S.f. 672 64 611 91 121 61 2 Other Alleys 3.9. 4,850 525 4,912 101 135 (62 Excess) 19 Cold Finished Bare S.T. 11,200 933 9.395 54 112 1,805 20 LL Alley here and Billete S.T. 67,267 9,018 55,669 83 m 11,598 23 Stainless Steel 1-3 Sheets and Strip S.T. 3,007 hog 3,130 104 139 (123 Excess) 0 here 8.9. 756 55 593 76 104 163 0% Steel Wire A Mall Vire S.T. 1,34 so 1,215 90 120 129 3 Alley 232 S.T. 1,344 228 1,058 79 105 266 o Other Alley S.T. o o 191 - I (191 Excess) 318 Regraded Unclassified Pro- Item Unit 3rd Made Available Made Available Percent of Ratio of Balance to be Comments tocol Protocol at Mill in U.S.A. at Mill in U.S.A. 3rd Prot. Actual Produced Item Production Mar. 1, 1944 - July 1, 1943 - Program Deliveries to as of Apr. 1, 1944 No. Program Kar, 31, 1944 Mar. 31, 1944 Completed Prot.Sched. To Complete as of (Prot. Sched.-100) 3rd Protocol Apr. 1, 1944 Prod. Program ALLOT STEML (Continued) 27 Steel Alley Tubes A 18% Cr. - es n. S.T. 994 188 1,222 123 164 (226 Excess) 1,019 B 4-66 Chrone S.T. 8,625 937 7,506 88 117 0-8 Carbon 35 Moly., Pipe Sizes S.T. o o 9 - - (9 Excess) 7 L.R. 3all Hearing Tubes S.T. 5,376 779 5,060 94 125 316 26 Stainless Steel Wire S.T. 1,747 163 1,609 92 123 138 mg Special Allay Wire S.T. 754 26 819. 104 139 (35 Excess) Total Alley Steel S.T. 113,259 13,692 98,540 87 116 14,719 CARBON STEEL 101-8 Rails, Accessories and Other S.T. - 18,659 188,548 - - - Bailvay Material 10 Copper Clad Strip (Bimetal) S.T. - 4,167 5,852 - - - Approximately 110,000 8.9. of carbon steel have been scheduled 16A Plain Carbon fool Steel and S.T. 508 6,515 - - - for delivery prior to June 30, - 1944, in addition to the 345.397 & 18A Drill 3od S.T. originally included in the Third Protocol program. 19D Plain Carbon Bullet Care S.T. - 43 11,736 - - - S.T. 1,511 36,504 - - - 24 Timplate - - Other Carbon Steel S.T. - 1,526 70,017 - - - Total Carbon Steel 5.7t 345.397 26,714 319.372 92 123 26,025 CHEMICALS S.T. 1,653 8,701 - - - 36 Phesel - the 650 S.T. shown as the qual- tity delivered through Karch 31 is 350 less than that delivered 38 Ethylene Glycol 5.7. - o & - - - through Feb. 29 due to a out- back agreed to by Soviet repre- sentatives. 319 Regraded Unclassified Pro- Item Unit 3rd Hade Available Nade Available Percent of Ratio of Balance to be Comments tocol Protocol at Mill in U.S.A. at Mill in U.S.A. 3rd Prot. Actual Produced Item Production Far. 1. 1944 - July 1, 1943 - Program Deliveries to as of Apr. 1, 1944 No. Program Mar. 31, 1944 Mar. 31. 1944 Completed Prot.Sched, To Complete na of (Prot.Sched.=100) 3rd Protocol Apr. 1, 1944 Prod. Program CHEMICALS (Continued) 45 Methanol S.T. - o 3.395 - - - 46 Urotropine S.T. - 225 4,975 - I - . SIA1 Glycerine 8.7. 6,720 o 7.707 115 153 (987 Excess) 61A3 Caustic Soda 3.7. 40,320 272 24,925 62 = 15,395 61,600 S.T. of ethyl alcohol have been scheduled for delivery during the Third Protocol period in addi- 38A Sthyl Alcohol S.T. 107,520 o 114,278 106 141 (6,758 Excess) tion to the 107,520 S.T. originally included in the Third Protocol - program. 6145 Acetons S.T. 5,137 420 3,198 62 83 - 1,939 514 Other Chamicals - S.T. 12,096 1,248 5,347 69 92 3,749 Total Chemicals S.T. - 3,818 176,176 . - - MARINE AND SUBMARINE CARLE 1 Marine Cable EM. 784 7 198 25 33 586 014 orders for marise and submarise cable have been largely completed whereas deliveries of new orders have not yet begun because of lead 2 Submarise Cable YM. 319 1 120 38 51 199 factors. Total Marine and Subscribe IN. 1,103 8 318 29 39 785 Cable - POWER AND RELATED CARLE 74 Insulated Cable and Vire S.T. - 754 11,170 - . - 01d orders for pover and related (Conser Content) cable have been largely completed wherens deliveries of care orders THA Bare Cable and Wire 3.7. - 113 1,542 . - - have not yet begun because of lead (Copper Content) factors. Total Power and Related 1.7. 21,000 867 12,712 51 81 8,288 Cable 320 Regraded Unclassified - - Pro- Item Unit 3rd Made Available Inde Available Percent of Ratio of Balance to be Comments tocol Protocol at Mill in U.S.A. at Vill in U.S.A. 3rd Prot. Actual Produced Item Production Mar. 1, 1944 - July 1, 1943 - Program Deliveries to - of Apr. 1. 1944 No. Program Mar. 31, 1944 Mar. 31. 1944 Completed Prot.Sched. To Complete as of (Prot,Sched.=100) 3rd Protocol Anr. 1, 1944 Prod. Program MISCUMATIONS PATERIALS ITEMS 80 Sheet Fiber S.T. 1,000 o 1,370 137 183 (370 Excess) 63 Parchaent Paper S.T. 1,680 , o o } to date as requisitions have been o 1,680 submitted by Soviet representatives. 83A1 Lithogronh Map Paper S.T. - 550 2,221 - - - 834 Condenser Paper S.T. 73 19 56 77 103 17 } Because of delays is the or requisitions, production of - denser paper vas not began until Jamary. S.T. 336 0 0 o o 336 } To date as requisitions have been 833 Cigarette Paper submitted by Soriet representatives, INDUSTRIAL AND RELATED EQUIPMENT 15A Consented Carbide Tips and $ 3,000,000 11,631 1,180,183 39 52 1,619,817 *lasks 158 Small Outting Tools $ 15,000,000 980,311 8,512,250 57 75 6,457.750 150 Yearoring Tools $ 3,000.000 151,503 1,020,223 34 45 1,979,777 FTB Abrasive Products $ 4,000,000 50,861 3,571,833 89 119 428,157 62 Mechine Tools $ 120,000,000 5,623,400 84,946,050 71 95 35,053,950 See attached taxt for communis. 53 Electric Purnaces $ 11,900,000 583,528 4,456,067 38 51 7,143,933 as Bolling Mills and Equipment $ 16,000,000 207.946 1,529,211 10 13 14,470,789 543 Freeses, Forges, Hanners and $ 30,000,000 746,491 17.071.041 57 76 12,928,359 Related Mynipment 54c Tire Drawing Reuineent $ 2,000,000 178,538 203,625 10 13 1,796,375 65A Receavators $ 12,500,000 276,139 7,856,175 23 31 9,643,825 321 Regraded Unclassified Fre- Item Unit 3rd Made Available Made Available Percent of Ratio of Balance to he Comments Protocol at mill in U.S.A. at Mill is U.S.A. 3rd Prot. Actual Produced tocol Item Production Mar. 1, 1944 - July 1, 1943- Program Deliveries to as of Apr. 1, 1944 Program Mar. 31, 1944 Mar. 31, 1944 Completed Prot. Sched, To Complete No. as of (Prot.Sched.=100) 3rd. Protocol Apr. 1, 1944 Prod. Program INDUSTRIAL AND RELATED EQUIPMENT (Continued) 658 fruck and Tractor Cranee $ 22,000,000 1,482,126 16,683,240 76 101 5,316,760 650 Other Cranes $ 650 Compressors, Gas Vlowers, a 9,000,000 68,179 3,778,534 42 56 5,221,466 Zcheusters and Thas 65% Pumps $ 8,000,000 214,075 4,396,734 55 73 3,603,266 658 Mining Equipment, Ore Dressing, $ 10,000,000 172,452 5,183,325 52 69 4,816,674 Handling and Transporting Excipent 950 Equipment for Blast, Hearth $ 10,000,000 226,722 1,778,778 13 17 8,721,222 and Coke Farnaces See attached text for compate, 658 Velding Equipment $ 4,400,000 138,645 2,698,452 61 81 1,701,548 651 Valves and Fittings $ 3,000,000 117,803 3,041,610 101 135 (41,610 Excess) 652 Pneuratic Tools $ 5,000,000 194,635 2,262,470 45 60 2,737.530 11 65% Autiliary Industrial Equipment $ 36,500,000 2,021,282 67.875.218 186 248 (31,375,218 Excess) 66 Centrol Inst. and Testing $ 1,700,000 42.572 769,189 45 60 930,811 Machines -70 Anti-Friction Mearings $ 15,000,000 657,058 7,053.649 47 53 7.946,351 111 Block Signal System $ 14,591,500 690,212 4,033,453 25 37 10,558,047 140 Power Equipment $ 75,000,000 3,316,754 44,179,362 59 79 30,820,638 Total Industrial and Related $ 431,291,500 18,402,994 268,561,273 67 89 142,710,227 Equipment 322 Regraded Unclassified Yre- Item Unit 3rd Made Available Made Available Percent of Natio of Balance to be Comments tacel Protocol at Mill in U.S.A. at Mill in U.S.A. 3rd Prot. Actual Produced Item Production Mar. 1, 1944 - July 1, 1943 = Program Deliveries to as of Apr. 1, 1944 Program Mar. 31, 1944 Mar. 31. 1944 Completed Prot.Sched. to Complete i AP of (Prot.Sched.=100) 3rd Protocol Anr. 1, 1944 Prod. Program MISCELLATIONS EQUIPMENT ITEMS 67A Abrasive Orain S.T. 4,000 1,432 6,312 158 211 2,312 FEA Graphite Electrodes S.T. 5.757 396 4,621 80 107 1,136 fax Other Graphite Goods S.T. 1,691 16 693 41 55 998 660 Graphite Powder S.T. 1,120 177 1,712 153 204 (592 Excess) 76 Tires, fuber, Other Rubber S.T. 40,320 1,460 24,571 61 81 15,7%9 Products (haber Content) 82 Metallic Cloth and Screen # 1,000,000 54,316 431,484 43 57 568,516 Var Production Foard Foreign Division Program Review Branch April 15, 1944 323 Regraded Unclassified 324 Mr. Dell said for you to show this to the Secretary. It is an informal thing and no acknowledgment is yes- was Klatz 1 M Let me know whether H. w hite has seen they. Mr. Office of the Under Secretary E STATE THE 25 DEPARTMENT OF STATE WASHINGTON In re fer to PKA April 22, 1944 The Secretary of State presents his compliments to the Honorable the Secretary of the Treasury and transmite for his information a copy of a note dated April 20, 1944 received from the British Embassy re- garding a loan of $50,000,000 by the United Kingdom to China. Enclosure: From British Embassy, note no. 225, dated April 20, 1944. G.L. Regraded Unclassified ENTIAL No. 225 Ref. 493/25/44 His Majesty's Ambassador presents his compliments to the Secretary of State and has the honour to inform Mr. Hull that His Majesty's Principal Secretary of State for Foreign Affairs proposes to make an announcement in the House of Commons on or about April 22nd, 1944, regarding the agreement which is to be signed on that day on the subject of B. loan of $50,000,000 by His Majesty's Government in the United Kingdom to China. A copy of the draft text of this announcement is attached hereto and Viscount Halifax would be grateful if Mr. Hull would consider it as confidential until after it has been made public in London. 2. As Mr. Hull is aware, discussions have been going on for some considerable time between His Majesty's Government and the Chinese Government regarding this loan, and Viscount Ralifax has been instructed to inform Mr. Hull that t he agreement now to be signed represents, with minor alterations, the basis on which Hia Majesty's Government in the United Kingdom have, since the inception of the negotiations, been ready to offer this credit. 3. The main points of the loan agreement are as follows:- (a) His Majesty's Government in the United Kingdom agree to provide up to L10,000,000 in the first instance to secure an internal loan. An eventual increase in this amount, if it should be found that /more Regraded Unclassified ONFIDENTIAL DRAPT TEXT OF ANNOUNCE NT TJ B. HADE CY HIS MAJESTY'S PRINCIPAL SECRETARY 0: X T. FOR FORMIGN AFFAIRS INTE IC O. COLDIONS A formal agreement :a being signed today on the subject of the loan by N1o "ajosty's Covernment to China of up to $50,000,000. Under the terms of the agreement, which carries ut the offer made by His Majosty's Government to the Chinoso Government somo tino ago, up to 550,000,000 will be available for finan- ching of goods and services required by China in the storling aron, for jurposes artsing out of the war. second agreement covering munitions, arms and military equipment on lend-lease terms by the "nited Kingdom to China has been 5 igned at the samo time. Pending the signature 02" agreements, the cost of Coods and services required by hind from the sterling area for war purposes has be n not from onrlier Tribish credits; munitions otc., have 50 n provided on lend- lease torms 1:. anticipati = of ont agreement. he limit of our assistance to China remains as always, one of transport and not _no of financo, I an sure that the Housevill share = ontia- faction that those agreements ha e now bound cluded and that in this, ad in other ways, we have mádo manifost our desire to (Ive all the holp to China that lies within our power. Regraded Unclassified Page 2. more could be effectively used for such a scheme, is not excluded. (b) The credit is not to be used for sterling savings certificates. (a) His Majesty's Government in the United Kingdom agree to use, during the war, of 10,000,000 for printing bank-notes in the Sterling Area, and for outstanding and future payments on orders already placed under previous credit arrangements. (d) His Hajesty's Government in the United Kingdom agree that the Chinese Government my earmark the sum of L20,000,000 for the purchase of goods in the Sterling Area for war purposes. The remaining £10,000,000 would then be available for such of the purposes covered by the Agree- ment as might prove necessary. (a) His Majesty's Government in the United Kingdom agree to ranko payments which fall due after the end of the war on contracts properly concluded, with their concurrence, for goods which could reasonably be expected to arrive in time to serve "war purposes". J Viscount Halifax has also been informed that the opportunity presented by the signing of this loan agreement will be taken to sign the Lend Lease agreement between His Majesty's Government in the United Kingdom and the Chinese Government which was originally proposed in February 1942, and which, although unsigned, has in fact been in operation since April 1942. BRITISH EMBASSY, WASHINGTON, D.C., April 20th, 1944. Regraded Unclassified 329 Developments during the week of April 17 - 22, 1944 1. COOPERATION WITH OTHER GOVERNMENTS (a) Russia A reply has been received from the Soviet Government to the memorandum left by Ambassador Harriman with respect to the creation and objectives of the Board. This reply states in substance that the policy of the Soviet Govern- ment has been, and still is, to aid in every way possible the victims of persecution by Hitlerite Germany. In a cable to Harriman we have asked that appropriate authorities of the Soviet Union be approached in an effort to ascertain whether, in view of the positive action re- cently taken by both the United States and British Govern- ments in reiterating their attitude toward Nazi war crimes and atrocities, the Soviet Government would take similar action. We have indicated our belief that such a statement on the part of the U.S.S.R. would have a profound effect upon the leaders and people of Rumania and Hungary. (b) Greek Government-in-Exile According to a report from the U. S. Legation in Cairo, the Royal Hellenic Government has welcomed the creation of the Board and has indicated its desire to cooperate in alle- viating the refugee problem. A memorandum left with the Legation in Cairo stresses the great hunger and other hardships visited upon the Greek people as a result of German occupation. The memorandum also points out that persons in danger can escape from Greece with relative ease because of that country's geographical position. (c) Turkey Ambassador Steinhardt reports that the Turkish Govern- ment has now put into effect a plan worked out before Hirschmann's departure, for the evacuation of refugees from the Balkans by rail via Turkey. Regraded Unclassified 330 - 2 - We have been advised that Turkish repatriates are also arriving in Turkey from France, in groups of fifty or 80 and at regular intervals, this repatriation being a direct result of our representations through Hirschmann and Stein- hardt to the Turkish Government. With respect to further "illegal" voyages by the "Milka" and "Maritza" -- that is, evacuations in which the proper maritime papers, Palestine immigration certificates, and Turkish entrance and transit visas are lacking, Ambassador Steinhardt indicates that if the number does not go beyond 500 refugees per month, he is reasonably sure that entry and transit can be arranged with the Turkish Minister for Foreign Affairs as each occasion arises, subject to the limited carrying capacity of the railroad to the Syrian frontier from Istanbul. Because of the recent substantial increase in the transit to Palestine from Istanbul of refu- gees arriving "legally," Steinhardt estimates that this 500 is the maximum number of refugees arriving illegally each month for whom rail transportation could be provided. In & cable to Ankara we are advising Steinhardt that we have now obtained from the War Shipping Administration and from the Foreign Economic Administration authorization to commit this Government to the replacement of the "S.S. Tari," in the event of the loss of that ship in projected evacuation efforts, with a passenger vessel, as requested by the Turkish Government. In order to remove the one remaining obstacle, the granting of safe-conduct by the German Government, we are requesting that Steinhardt urge both the International Red Cross representative in Ankara and the Apostolic Delegate from Istanbul to arrange to see von Papen in person. Steinhardt is also being asked to advise us when the "Tari" is ready to depart, in order that war risk insurance may be placed here. (d) Switzerland The appointment of Roswell McClelland as the Board's Special Representative in Bern, Switzerland, and as Special Attache to the Legation on war refugee matters, has been confirmed. Minister Harrison has reported that the Swiss Govern- ment has declined to request German safe-conduct for the "S.S. Tari" in the projected Turkish evacuation on the ground that Swiss support of such a request would impede the efforts of the International Red Cross in that direction. Regraded Unclassified 331 - 3 - The Swiss Government indicated, however, that it would not refuse to consider participation in a joint step which other neutral states might decide to undertake in this matter for exclusively humanitarian motives. Harrison subsequently reported that & similar position had been taken by the Swiss Government with respect to IRC representations concerning safe-conduct for the "S.S. Bellacitta." We have cabled Harrison that both the Swedish and Turkish Governments have already acted in support of the IRC request for German safe-conduct for the "Tari" and we have suggested that Harrison may wish to bring these circumstances to the attention of the Swiss Government in renewed efforts to obtain an affirmative decision. (e) Sweden We are continuing our efforts to arrange for the use of a Swedish ship, notably the "S.S. Bardalanda," in Turkish evacuation efforts. With respect to the President's statement of March 24, Minister Johnson reports a fairly general coverage in Stockholm newspapers, with less coverage throughout the rest of Sweden. Excerpts from the President's statement were given in official Swedish news broadcasts in the Swedish language over short, medium, and long wave lengths. The statement was also relayed through underground channels to Norway and Denmark and may thus come to the attention of occupation forces in those countries. Informal requests by the Legation that prominent government officials publicly comment on the statement were unsuccessful. Johnson also reports that the Swedish Government has agreed to make every effort to hasten action on the part of the Germans with respect to the granting of safe-conduct for the "S.S. Tari." The matter of safe-conduct for the "S.S. Bellacitta" is also being taken up with the Swedish Government. (f) Guatemala In reply to State's circular airgram of January 26, Ambassador Long advises that little or nothing is being done officially in Guatemala toward the rescue or relief of mission has been granted for nearly 1,000 refugees to enter persecuted elements in Europe, although since 1933 per- Regraded Unclassified 332 - 4 Guatemala. The Guatemalan Government reportedly permits the entry of refugees for permanent residence where such refugees are able to obtain a guarantee of support from relatives already residents or nationals of that country; in- some instances refugees have been able to gain entry for permanent residence without local sponsors. However, in all cases entry is granted only under the provisions of a law which severely restricts the pursuits of immigrants. Alleged abuses of entry restrictions led to a government decree in March 1929, closing business establishments owned or operated by refugees, requiring the registration of business houses, and calling for the licensing of agents working on a commission basis. Ambassador Long indicated his belief that if any representations are to be made to the Guatemalan Government with respect to the acceptance of refugees, the chances of success would be greatly enhanced if any such proposal could be presented in specific terms, particularly with respect to the number of persons proposed and their probable length of stay. (g) Finland On the basis of informal discussions, Minister Gullion reports his belief that the Finnish Government would in all probability issue a declaration with respect to its willingness to facilitate the movement of refugees. The Finnish Foreign Office has indicated that, if such a statement is to be made, its release will be timed to co- incide with the projected evacuation of certain Jewish refugees from Finland to Sweden. In a cable to Helsinki now pending at State, we are asking Gullion to report on the possibility of using Fin- land as an escape route to Sweden from German-held Baltic areas, particularly Lithuania, and on the possibility of cooperation from the Finnish Government in this connection. 2. APPROACHES TO THE SATELLITES In response to our request that the International Red Cross send effective -representation to Hungary in order to protect the well-being of groups facing persecution there under the recent German occupation, the IRC has advised Minister Regraded Unclassified 333 - 5 - Harrison in Bern that for the time being it does not con- template any such special delegation. The IRC is said to feel that under present circumstances such a mission might be considered as inconsistent with its traditional and conventional competence. Minister Harrison has also reported on recent developments in the Jewish situation in Hungary. Increasing restrictions against Jews are noted, including those relating to general urban accommodations. Aryanization of banks and commercial and industrial enterprises is said to be proceeding, The establishment of ghettos or internment centers is also foreseen. Mass deportations to the cast, however, are reported to hinge upon military developments. Signifi- cantly, Jews have been forbidden to leave Budapest despite the official evacuation of that city. 3. RESCUE AND RELIEF PROJECTS (a) Relief to Jews in Rome The American Jewish Joint Distribution Committee representative in Portugal reports that 1,400,000 lire have already been borrowed in Rome against the $20,000 credit established in London for relief to Jewish refugees in Rome. The recipient organization in Rome, Delasem, has asked that the funds originally deposited in London be credited in its name in the United States in dollars, along with such additional funds as may be forthcoming from the JDC on the basis of previous requests. (b) Abandoned Children from France Minister Harrison has advised us that despite repeated informal representations on the part of the Swiss Government to Vichy with respect to the release of abandoned children facing deportation in France, Laval's decision was negative, with no-explanation being given. It was urged that no publicity be given concerning Swiss intervention in this matter or Vichy's refusal, for fear of halting further efforts by the Swiss Government in this direction. In a cable pending at State we are asking Minister Harrison and Board Representative McClelland to request that apprepriate instructions be issued to the Swies Le- gation at Vichy with respect to a formal approach to Laval on the matter. We are also requesting our Ministers in Lisbon and Dublin to approach the Portuguese and Eire Governments with requests for parallel action. Regraded Unclassified 334 - 6 - According to a report from the JDC representative in Lisbon, during the past four or five weeks over 300 such children from France have reached Switzerland clandestinely and are being cared for by local groups. (c) Evacuations to Italy and the Mediterranean Area According to a report from the U. S. Legation in Cairo, the British Foreign Office has instructed its Yugo- slavian Embassy to approach Tito with a view to obtaining his active aid in facilitating the escape of Jews from Hungary through Partisan territory. Our great interest in facilitating such escapes to Italy and the Mediterranean area, has likewise been indicated in a cable to Cairo. Our Legation there has been advised that arrangements can be made for any assistance necessary, including finan- cial, in order to enable these refugees to reach places of safety. (d) Rescue of Jews in Athens We have learned that 400 Sephardic Jews, Spanish nationals residing in Athens, have recently been imprisoned in & concentration camp. As a result of intercession by the Holy See, the Spanish Government has on several occasions in the past been prevailed upon to recognize groups of Sephardic Jews in Axis-held territory as Spanish nationals. For this reason, we are cabling Harold Tittmann, U. S. representative at the Vatican, asking him to approach Vati- can officials 80 that the Papal Nuncio at Madrid may be advised of this situation and his aid enlisted in obtaining Spanish recognition, thereby forestalling deportation and almost certain death. (e) Evacuation of Refugees from Finland Some time ago Minister Johnson reported from Stockholm that Sweden had refused entry to 113 Jewish refugees who had gone to Finland from central Europe in 1938 and 1939, fact des- pite repeated requests on Johnson's part and despite the for that the Finnish Government itself had made application the admission of these refugees to Sweden. Johnson sub- sequently prevailed upon the Swedish Government to re- examine the case, in view of the danger of serious perse- cution, not only to the Jewish refugees in question but to Regraded Unclassified 335 - 7 - local Jews and many non-Jewish refugees who would be equally threatened as a result of increasing German influ- ence in Finland. We have now guaranteed to make arrange- ments for the evacuation from Sweden, as soon as practical, of all threatened persons other than Swedes who may be accorded. refuge in Sweden, and for the maintenance while in Sweden of such refugees who cannot claim the support of their own governments. As a result, Swedish visas have now been authorized for 100 of the central European refugees now in Finland "as a starter." (f) Latin American Passports Minister Harrison has communicated to us the details of approaches made by the Vatican to various Latin Ameri- can governments in an attempt to work out relief measures and possible evacuation plans for Jews interned in Axis territory who hold passports or papers issued by these governments. Under the circumstances reported, our efforts toward exchange arrangements become all the more urgent. Accordingly, we are cabling Harrison to proceed with all possible despatch in pressing Spain and Switzerland to-inform the German authorities that we are prepared to consider as exchange material all internees in occupied territory who hold Latin American passports. In this connection we are asking Harrison to note that we are advising Latin American countries that this Government does not expect such countries physically to admit any of these persons, but that arrangements will be made for refuge elsewhere. We are also communicating with the Vatican and requesting its support in our efforts on this basis. In cables to Bolivia, Costa Rica, El Salvador, Guate- mala, Haiti, Nicaragua, Paraguay and Peru on the projected exchange, the substance of the report concerning Vatican efforts is given along with the request that our Ambassa- dors impress upon the officials concerned the fact that failure to act will almost certainly spell death for the persons involved. Since certain individuals among the refugees interned in France and Germany claim American citizenship, we are asking that Switzerland, as the protecting power, be advised that while such claims are under investigation and until the Swiss Government is advised to the contrary, we expect such refugees to be treated as U. S. citizens, with all the rights, privileges, and immunities to which such citizens are entitled. Regraded Unclassified 336 - 8 - (g) Joint Exchange Project We have been urged by the World Jewish Congress to make a special joint effort, with Great Britain, to arrange still another exchange of Jews in German-occupied countries against German nationals in Allied countries. The WJC has indicated that the candidates for exchange which it proposes are some 3500 Jews holding Palestine immigration certificates and whose names have already been supplied by the British Government, through Switzerland as the protecting power, to the Government of Germany. Germany is said to have accepted this principle of exchange, but the lack of German candidates has prevented the exchange from material- izing. The holders of these Palestine certificates are now interned in special camps and are in increasing danger of deportation as exchange arrangements are prolonged. 4. COOPERATION WITH THE INTERGOVERNMENTAL COMMITTEE Discussions in Washington with Sir Herbert Emerson and Patric Malin of the Intergovernmental Committee have now been concluded, complete agreement having been reached with regard to our respective fields of operation. Copies of an exchange of memoranda between the IGC and the Board are being sent: to our representatives abroad, reinforcing a mutual desire for the closest cooperation between our respective staffs in attempts to alleviate the refugee problem. 5. PRESS CONFERENCES During the past week two press conferences were held. In the first instance, Ira Hirschmann was interviewed on accomplishments in Turkey. At the second meeting, Sir Herbert Emerson and Patric Malin of the Intergovernmental Committee were presented and discussion dealt with the agreement reached between IGC and the Board. (Signed) J. W. Pehle Regraded Unclassified 337 April 22, 1944 2130 Pollo TO: Mr. Berle FROM: J. We Pehlo The Verla Jewish Congress, of 330 West 42nd Street, New York, has informed the War Refugee Board of its desire to send Dr. Solemen Tocker to various countries in Latin America, to work as representative of the World Jewish Congress in connection with that organization's action to resoue Jevs from German occupied areas in Burope. The Board is informed by the World Jewish Congress that Dr. Tocker has lived many years in Latin American countries, has a perfect command of Spanish, enjoys excellent connections is Latin American and therefere, would be of distinct value in furthering refuges rescue work in that area. As you have the War Refugee Board isdesirous of using the services of any private agency which can assist it in recouing Jews of Burope who are in danger of imminent death. Accordingly. the Board wishes to register its approval of the proposed journey of Dr. Tocker and would appreciate anything that dould be dans to facilitate this journey. More particularly, the Board would request the Department's cooperation is granting Dr. Tocker the necessary re-eatry permit to enable him to return to this country. Dr. Tocker is a Polich ditisen, admitted to this country as & quota immigrant, and has filed his declaration of intention is view of obtaining American citisenship. It is understood that be has already filed his application for a re-entry permit with the Immigration and Naturalisation Service. You are quare, of course, of the extreme urgency of receaing Puropean Sers in Coman-controlled territory, and of the importance of @ising the cooperation of Latin American countries to this one I trust, therefore, that you will find # possible to emable Dr. Technor to depart on his mission with the least possible delay. (Signed) J. V. Pehle RAIJUPSING 4/21/44 Regraded Unclassified 338 PARAPHRASE OF TELEGRAM RECEIVED FROM: The American Representatives, Algiers TO: The Secretary of State, Washington DATE: April 22, 1944 NUMBER: 1337 CONFIDENTIAL The following message is from Ankermann, War Refugee Representative No. 14 for the War Refugee Board. 1. I have again discussed with the Partisan general whom AFHQ referred to us the problem of evacuation of the Yugoslavs. The immediate need is for from fifteen to twenty schooners from one hundred to two hundred in size since the repair of the vessels they own will take some time. Since rescue must be done in darkness and since the nights are growing shorter these vessels preferably should have a speed of ten knots at least. For the journey to the Dalmatian Islands from the mainland of Tugoslavia small vessels one to two tons in size are needed, 2. If allocation can be obtained from MEDIBO in Italy there are available some 200-ton ships. This will be assisted by strong direction from a high naval authority or from Admiral Land. Motor boats or small ships must be obtained elsewhere since they are not available. As the nights grow shorter the present use of fishing smacks by Yugoslavs becomes more dan- gerous. 3. For additional report on the Yugoslav situation which is being sent directly from Bari, please get in touch with Robert Wolff, Balkan Desk, R. and A. Branch, Office of Strategic Services, Washington, CHAPIN DCR:MPL 4/25/44 Regraded Unclassified 339 ORIGINAL TRXT OF TELEGRAM SENT FROM: Secretary of State, Washington TO: Amlegation, Gaire DATED: April 22, 1944 NUMBER: 30 SECRET From Var Befuges Board to MacVeagh. War Refuges Beard is extremely interested in preject involving escape of Jews from sccupied territory to Italy and Mediterranean region. Please advise Mar Refuges Board of any further developments in this situation, particularly result of mentioned appreach to Tite. Board is prepared to arrange for any assistance, including funds. HULL Regraded Unclassified 340 CABLE TO LONDON From War Refugee Board to Winant If en answer has not yet been received from the British with respect to the proposal to establish refugee havens in Cyrenaica and Tripolitania as outlined in our No. 2292 of March 25, 1944, please inquire when answer may be expected. April 22, 1944 11:15 a.m. Regraded Unclassified 341 PLAIN ON-349 Londen Dated April 22, 1944 Rec'd 1:25 Pollo Secrdary of State, Washington. 3817, treaty-cosent. Please instruct cancerning action 18 take en travel phority and passport Unlidation raised by following letter dated April 20th from American Joint Distribution Office at London just established by Donald Harvits. The American Joint Distribution Committee is interested is establishing an office in Sweden in order to extend and more effectivity carry out its program of relief and rehabilitation. The representative assigned to establish this effice is Miss Lanra Margelis, an American citisen, who is now in Lisbon, Portugal. We have been informed that transportation to Sweden is sev abailable, this being a prerequisite to having her passport validated for Sweden, and for England in transit. M present we should like very such to ob- tain a prierity for travel to Sweden for Miss Margolis in which case a validation would be granted. Will gou be kind enough to take this matter up with Washington so that ve my secure a prierity and in turn the neo- essary validations and visas". War Befugee Board my be interested. Unless Miss Margelis has agecial passport indicating that she is travelling en efficial business the Embassy understands the transportation facilities would not be granted and is all probability Svedish visa could net be obtained. WINANT VSD Regraded Unclassified 342 ORIGINAL TEXT OF TELEGRAM SENT FROM: Secretary of State, Washington TO: Amembassy. London DATED: April 22, 1944 NUMBER: 3243 SECRET From War Refugee Board to Winant. If an answer has not yet been received from the British with respect to the proposal to establish refugee havens in Cyrenaica and Tripolitania as out- lined in our No. 2292 of March 25, 1944, please inquire when answer may be expected. HULL Regraded Unclassified 343 CABLE TO THE AMERICAN CONSULATE GENERAL AT JERUSALEM Please deliver the following message from War Refugee Board to Rabbi Joseph Mishkowski, Meker Chaim, Jerusalem: QUOTE Necessary you immediately send influential outstanding delegate to Istanbul to cooperate with Griffel. Remitted 25.000 dollars under license 617451-R to Jacob Griffel, Hotel Continental, Beyoglu for rescue. Sternbuch also remitted to him 25.000 francs. Sternbuch cables urgency procuring unlimited number of veteran certificates for Rabbis and religious leaders in grave danger in Hungary and Lithuania. Sternbuch reports these certificates useful for internment privileges in occupied territories and for possibilities of exchange. Necessary you inform American Consulate names of your Vaad Hatzalah Com- mittee and your activities to enable consulate to lend you every support possible. Vaad Hatzalah Emergency Committee, Rabbis Rosenberg, Silver, Levinson, Kotler, Kalmanowitz. UNQUOTE April 22, 1944 11:15 a.m. Regraded Unclassified 344 CIRCULAR sacuer Sent by Secret Courier Secret April 22, 1944 SECRET CIRCULAR AIRGRAM FOR THE PERSONAL AND CONFIRENTIAL INFORMATION OF THE anbassadors AP TEQUCISALPA, SAN JOSE, QUITO. SAN SALVADOR, PONSeau-PRINCE, LIMA, MANAGUA AND CARACAS. Referring to the Department's circular airgram of April 10, 11:00 Balle, and of March 31, 1205 PORTO the following is the sub- stance of a message received from Lendon by Sir Herbert Emerson, Director of the Intergovernmental Committee, who is new in Washington: QUOTE According cables Jewish Agency, Jerusalem, new commander Vittel Camp advised March 20 about 250 to 300 internees helding South American passporte that they were not recoggized by government OD- cerned. It is alleged these persons already isolated for deportation which caused panic and despair. Agency here has partial list of people affected, mostly Polish Jews previously put on list of veteran Zionists, Rabbie, et cetera, for grant of Palestine certificates. Agency trying to obtain from Colemial Office formal assurance to Swiss protecting power that these persons placed on Palestine exchange list in order to tave off deportation UNQUOTE. In view of the imminent danger which faces the persons involved, and in the light of this Government's deep consern for their welfare, you should communicate to appropriate officials of the Government to which you are accredited the urgency with which favorable responses and active seasures along the lines described in our circular airgrams of April 10 and March 31 are needed. You may also wish to inform such efficials that in addition to the approach to Switserland referred to in our circular airgram of April 10, we have also requested Ambassador Hayes similarly to approach the Spanish Govern ment. Please keep the Department promptly advised of all develop- ments is this matter. Hull HULL Sent tet Headuras, Costa Bica, Boundor, B1 Salvador, Haiti, Peru, Nicaragua and Venesuela. ARA VE SWP WHB:GLW:KG 4/19/44 Regraded Unclassified 345 AIRGRAM From: American Embassy, Habana Date: April 22, 1944 Rec'd: Apr 27 10a SECRET Secretary of State, Washington, D. C. 34 Department's confidential circular airgram, April 15, 78p.m. The Joint Relief Committee in Habana, local branch of the Joint Distribution Committee in the United States is the private agency here most qualified and reliable to carry out such work, Its local representative states that he is ready to cooperate but that would have to obtain au- thorization from his head office. At the Embassy's re- quest, he has taken no action on the matter. I feel that if the choice of a private agency were left to the Cuban authorities, local irregularities would probably occur, particularly in the distribution of funds. In this connection the Department will recall the dsigrace- ful record of the Cuban authorities with reference to the refugee situation (see despatch No. 6149 of March 1): also the inclusion of Inc Gustavo GUTIERREZ AND Manuel PEREZ Benitoa on the recently created Cuban War Refugee Board is not encouraging. A recent example of the Cuban Gov- ernmant's attitude was its unsuccessful attempt to swindle refugees out of $700,000 by freezing the deposits required of immigrants entering Cuba. I therefore suggest that, before I inform the Cuban Government of the contents of the airgram under reference, the Department ascertain whether the Joint Distribution Committee would be willing to undertake such a program in Cuba. My approach to the Cuban Government might then be (1) to request it to assure the Swiss Government that it will be willing to accept a fixed number of refugee chil- dren and (2) to state that I am informed that the Joint Distribution Committee would be prepared to care for the children, through the Joint Relief Committee in Habana, and to make arrangements to provide the latter with the necessary funds. BRADEN 711 EMH/jm-dsc Regraded Unclassified 346 129 6845 p.m. Sent by Secret C ourier AMEMBASSY, ASUNCION (PARAGUAT). April 22, 1944 FOR THE PERSONAL AND CONFIRENTIAL INFORMATION or THE AMBASSADOR. Referring to the Department's 118 of April 10, the fellowing is the substance of a neceage received from Londen by Sir Herbert Imerson, Director of the Intergovernmental Committee, who is now in Washington: QUOTE According cables Jewish Agency, Jerusalem, now commander Vittel Gasp advised March 20 about 250 to 300 internees holding South American passports that they were not recognised by government concerned. It is alleged these persons already iselated for departation which caused pamic and despair. Agency here has partial list of people affected, mostly Polish Jews previously put on list of veteran Siemists, Rabbis. et cetera, for grant of Palestine certificates. Agency trying to obtain from Colemial Office formal assurances to Guiss protecting power that these persens placed on Palestine exchange list in order to extave off deportation UNQUOTE. In view of the imminent danger which faces the persons involved, and is the light of this Government's deep concern for their velfare, you should communica to appropriate officials of the Government of which you are accredited the urgency with which faverable responses and active measures along the lines described in our 118 of April 10 are needed. You may also wish to inform such officials that in addition to the approach to Switserland referred to in our 118 of April 10g we have also requested Ambassador Kayes similarly to approach the Spanish Government. Please keep the Department premptly advised of all developments in this matter. HULL VEB:GLN:KG ARA VS SWP 4/19/44 Regraded Unclassified 347 AIRGRAM BY SECRET COURIER from Asuncion Date: April 22, 1944 Rec'd: May 1 8 Bello STRICTLY COMPIDENTIAL The Secretary of State, Washington. 4-139, April 22, 10:00 a.m., 1944 I teek up with the Foreign Minister on April 20 the points raised in the Department's recent circular airgram, A-118, 11:25 Bolleg April 11, 1944, (whose special directions have received compliance.) The Minister at first stated that be was unaware of any inquiries from the Spanish Government with regard to eastern Europeans in German concentration camps who hold Paraguayan passports. He was familiar with the general question, however, and affirmed that his Government will steadfasty recognise the validity of such passports until the war shall have terminated. The Minister provisionally took a favorable attitude with regard th securing an exchange of persons holding Paraguayan passports for persons of German nationality interned in the United States or elsewhere in the Americas. He accepted the view that this my bring the possibility that Easi agents in Paraguay,- some of whom are apparently about to be interned here.- could eventually be repatriated to Germany. Be made written note of the fact that if any bone fide Paraguayan citisens are found in the German co De centration camps they will be given preference in any 02- change; and also that persons holding Paraguayan passports who are not in reality Paraguayans will not be sent to Paraguay. (On this latter point be assumed that in case any such persons vere shown to be skilled agriculturists. Paraguay could and would receive them.) Be also clearly understeed that this proposal is being made by our Govern- ment to the governments of the other Latin American countries invelved. Be stated that if the Spanish Government on be half of the German authorities should submit lists of per sens holding such passporte, the reply would be that the passporte are being maintained. The Foreign Minister likevise inseribed in his notes the request that the Paraguayan Government affirmatively appreach the German Government.- by addressing a note to the protesting power, Spain, through its Charge d'Affaires here. to demand that the Paraguayan passporte be honored and the...... Regraded Unclassified p/2, S.C. Airgram A-139, pril 22, 10 a.m. Asuncion 348 STRICTLY CONFIDENTIAL Regraded Unclassified and the holders respected as regards their lives, rights and privileges. My visit was timed to precede immediately a Cabinet meeting; and the Foreign Minister promised to take up the mtter with the President after the Cabinet meeting. He stated be was confident of receiving the President's per- mission to give definitively favorable responses on all the points raised (especially, (a) the approval of nego- tiations by the United States with Germany for exchanges, and (b) the making of an admonitory remonstrance by Paraguay to Germany). Dr. CHIRIANI then summoned the Undersecretary, who has been in charge of the problem for some months past; and the latter took as to his office and showed me net of the correspendence file. From the file, and from the Under- secretary's statements, the following situation was developed: by Decree No. 207 of September 4, 1943, the Paraguayan Supreme Court decided (a) that Sr. Rodelfe HUGLI, Paraguayan Honorary Consul at Berne, Switserland, should be dismissed from his position, and (b) that the passports which he had issued to eastern Burppeans whowing them to be Paraguayana should be annulled. During the next three or four months, however, the Paraguayan Government received appeals from Poland, Belgium and Holland through their representatives at Buenes Aires requesting that the passports not be annulled, for humani- tarian reasons) and late in December had the same request from this Mabassy, undo at the Department's suggestion. the reply given in all cases was that the Paraguayan Government had not cancelled the passports in question and did not intend to do so while the var continues. (See my telegram No. 688, December 28, 3:30 p.m., 1943.) On January 2, 1944, the Foreign Office addressed the Spanish Charge d'Affaires at Asuncion, in response to a note received from hime stating that Consul Hugli had possessed to legal right to confer Paraguayan nationality; but that while the Supreme Court had ordered him to be dismissed and the passports to be treated as null, never- thelese the latter part of this order would not be placed into effect until after the termination of the Buropean Ware It further requested the Charge to telegraph to his government asking 1t to inform the Corner Government that the passports are still recognised as valid. On January 3, the Foreign Office addressed two separate instructions to the Paraguayan Ambassador in Bacaos Aires, who had been approached by the Dutch and Polich Ministers in that capital. Be was told to inform the Ministers in question(1) that the passporte were recognized as valid for the duration of the war and (2) that it had requested the Spanish Charge here 80..... 349 9. 3, S.O. A-139, April 22, 10 alm,, Asuncion STRICTLY CONFIL NTIAL here se to inform the German Goverment telegraphically via Madrid. On February 8 the Foreign Office addressed a further note to the Spanish Charge confirming its previous note. The Chairman of the Paraguayan Red Cross, Dr. Andres BARBERO, visited the Foreign Office early this month on behalf of a list of forty cases of interned eastern Buropeans helding Paraguayan passports. He received assurances. On April 10 the Spanish Charge communicated again with the Foreign Office to the effect that since Paraguayan law provides that a Consul can not confer Paraguayan nationali- ty there was not perceived legal consistency in Paraguay's position in continuing to regard the passports as valid. On April 17 the Foreign Office replied flatly and simply reasserting its attitude. (While its note did not 80 state, the theorpy of the Paraguayan Foreign Office seem to be that the Supreme Court Decrde declaring the passports null need not be given effect immediately.) The Charge of Spain vas informed that this Paraguayan action was tallen as a result of intercessions by the governments of Poland, Belgium, Holland and (informally) the United States, as well as of several philanthisopic organizations, and that it is based on humanitarian grounds. In response to informal inquiry on the 21st instant the Foreign Minister dtated that he had not yet received an affirmative decision as to exchange negotiations and a Paraguayan demand upon Germany. FROST 801.2 WF/ajl Regraded Unclassified 350 PARAPHRASE OF TELEGRAM SENT FROM: Secretary of State, Washington tos American Legation, Lisbon DATED: April 22, 1944 NUMBER: 1133 CONFIDENTIAL The Treasury has issued license number W-2177 to the Jewish Labor Committee, New York City, and you are requested to inform Paulo Duarte, 17 Rua Padre Antonio, Vierira, Lis- bon, that notwi thatanding General Ruling Number 11, he is authorized, as their representative in Portugal, to commun- icate with persons in enemy or enemy-occupied territory for the purpose of arranging for the evacuation of persons in such territory in imminent danger of their lives, to such places of safety or relative safety as he may select. License W-2177 is exactly identical with license num- ber W-2154 which is described in Department's message of March 18, no. 800, which was issued to the Joint Distribu- tion Committee, except that Section (B) is identical with section (B) of license W-2167 described in Department's message of April 8, no. 991, You should deem Department's comments in our cable of March 18, no. 800. to apply to License number W-2177 to the same extent as if fully not forth herein, Also you are re- quested to inferm Duarte that the Jewish Labor Committee is remitting the escudo equivalent of $10,000 to begin operations. HULL Regraded Unclassified 351 LBG-374 PLAIN Lisbon Dated April 22, 1944 Rec'd 5:15 P.M. Secretary of State, Washington. 1208, twenty-second, 2 p.m. FOR WAR REFUGER BOARD. VEB 3. Acknowledging Department's telegram 1097, twentieth, VEB 3. Remittance received. Thanks, Will keep reco rd and report. Regarding personal expenses, do you wish to cover all expenses as has been case heretofore or have you per diem or other arrangement. NORWEB LMS Regraded Unclassified 352 DME-435 PLAIN Lisbon Dated April 22, 1944 Rec'd 8:45 P.M. Secretary of State, Washington. 1209, twentysecond, 4 p.m. VEB 4. Please send following Unitarian Service Committee, 25 Beacon Street, Bostent "Greatly disturbed delay Howard Breck's North African validation. Urgent be accept French Committee's invitation sconest. he has French visa laisses passer and Ambassador Wilson approval. Sigged Elisabeth Dexter." NORWEB LMB Regraded Unclassified 353 NNO-425 Lisbon This telegram must be paraphrased before being Dated April 22, 1944 communicated to anyone other than a Government Rec'd 7:52 p.m. agency. (s000) Secretary of State, Washington. 1214, April 22, 6 p.m. WHB number five. Requested by Joseph Schwarts following for War Refugee Board and Leavitt joint distribution New York: "Six children arrived in Spain as first group and more are expected to follow. Guides arranged by us brought them thru Pyrennes and they are now in our care in Barcelona. In addition 26 adults came into Spain which makes a total of 94 new arrivals there. Will attempt to provide children with visas under United States Commission plan or, in case of those having close relatives there or preferring Palestine, certificates for Palestine". NORMEB WSB Regraded Unclassified 354 CABLE TO MINISTER JOHNSON AND OLSIN, STOCKHOLM, FROM WAR REFUGEE BOARD Please deliver the fllowing message from War Befugee Board to Rabbi W. s. Wolbe, 11 Olefsgatan, Steckholm, Swedent QUOTE Gravely disturbed your report of Litbuania. Cable War Refugee Board for us through American Legation your rescue plans and if you can utilise funds for relief and resous of Rabbis and religious leaders is Lithmania. Have cabled 85,800 Buiss france to Rabbi Shoulevits through Switzerland. Vand Hahatzalah Emergency Committee, Rabbie Aaron Ketler and Abraham Kalmanowits. UNQUOTE THIS IS VED STOCKHOLM CABLE NO. 5 April 22, 1944 11:15 Bollo BAksin:LSLessertals 4/21/44 Regraded Unclassified 355 CABLE TO BREN From War Befuges Board to Harrison Your 1754 delayed and just received by War Refugee Board. McClelland's appointment Special Attache on War Refugee Board matters approved effective immediately. He should receive base salary of fifty- six hundred dollars per annum and seven dollar per diem allowance effective when he assures duties. Salary and per diem payments. as well as miscellaneous administrative expenditures such as travel, clerical staff if needed, office supplies and equipment, and rental if necessary. should be paid directly by the Legatich through usual channels, for which Department will be reimbursed by War Refugee Board here. In addition, ten thousand dollar credit in confidential funds for McClelland from President's Emergency Fund being established at once for which Mc01elland will be responsible to Pehle alone. These confidential funds are not subject to usual government disbursing requirements but McClelland should keep careful record and obtain receipts where possible. These funds may be used at McClelland's discretion but should not (repeat not) be used for administrative expenses of the sort being handled through the regular channels of the Legation. McClelland's duties are as described in our 659. Let us know at once of any obstacles. April 22, 1944 11:16 gells Witewart; pdk 4/20/44 Regraded Unclassified 356 CABLE TO BEN From War Refugee Board to Harrison for McClelland Board delighted that you have accepted appointment as its Special Representative. Pehle sends personal thanks and feels confident that you will do competent job. War Befugee Board will support you to fullest extent. Phease do not (repeat not) hesitate to make frequent comments and suggestions. THIS IS WEB BREN CABLE NO. 3 April 22, 1944 11:15 a.m. MJNarks:lsk 4/21/44 Regraded Unclassified 357 CABLE TO MINISTER HARRISON AT BERN Please deliver the following message from War Refugee Board to Isaac Sternbuch, Postfach 168, St. Gallen, Switzerland; QUOTE Greatly pleased with your April 7th message. Suggest necessity that such couriers be supplied with larger sums and that such funds be given to outstanding personalities, leaders of communities and former heads of Yeshivoth to save themselves in whatever possible manner. Ready supply you additional funds on request. Vaad Hatzalah Emergency Committee Rabbis Rosenberg Kotler Kahmanowitz. UNQUOTE THIS IS WRB BERN CABLE NO. 4 April 22, 1944 11:15 s.m. Regraded Unclassified 358 DRAFT OF CABLE TO AMERICAN LEGATION, BEEN FOR MINISTER AND McCLELLAND Please request Pilet Golas to issue the instructions to Swise Legation at Vichy as suggested in first paragraph your 2315 of April 14. In view non-objection Pilet Golaz we are appreaching Portuguese and Bire Governments with request for paralles action. Var Refuges Board would welcome any addi- tional suggestions you may have for expediting emigration from France of orphaned and abandoned children subject to enemy persecution. For your information consular officers in Spain and Portugal have received instructions similar those trans- mitted Departments's 891 for issuance 1,000 immigration visas. Governments of Canada and Australia and appropriate other American republics are being approached with sugges- tion that they make similar offers to Swiss Government regarding children. THIS IS WEB BREN CABLE NO. 5 April 22, 1944 13:20 p.m. MSTandishilem 4-21-44 Regraded Unclassified 359 ORIGINAL THET OF TELEGRAM SENT FROM: Secretary of State, Washington TO: Amlegation, Bern DATED: April 22, 1944 NUMBER: 1395 CONFIDENTIAL Reference year No. 2301 April 13, 1944, The Turkish Government has already acted in support of the ICRC request for safe cenduct for the ss TARI. The Swedish Government has been asked to support such wquest and has agreed to de 80. ^ccerdingly you may care to bring these facts to the attention of Swise Government in an effort to persuade it to reconsider its decision. Please keep the Department and War Refugee Beard advised on this matter. THIS IS WRB BERN CABLE NO. 2 Regraded Unclassified 360 ORIGINAL TEXT OF TELEGRAM SENT FROM: Secretary of State, Washington TO: Amlegation, Bern DATED: April 22, 1944 NUMBER: 1400 CONFIDENTIAL Reference Department's 1221 of April 10 and 1181 of April 7. Our Embassy in Madrid has been fully advised concerning the situation of internees at Vittel and other camps who hold passports, consular documents and other papers issued in the name of certain Latin American countries. The Department's above-mentioned No. 1221 of April 10 was repeated to Madrid. Our Embassy there was requested urgently to report to the Spanish Government this Government's preoccupation with this matter and inform it of our pending discussions with Latin American countries regarding a further exchange of civilians with Germany, of our view that persons in Vittel and elsewhere holding Latin Americanjapers are eligible for such exchange and of our expectation that pending such exchange they would be ac- corded the same treatment which Germans wish to see accorded their civilians in the Western Hemisphere. It was requested that the Spanish Government be urged to act in Madrid and Berlin to the end that these persons be given every possible protection and that it take steps immediately to correct the impression which might have been created in Berlin regarding the alleged lack of concern of the countries of the Western Hemisphere in the treatment of persons holding papers issued in their name. With respect to the 238 persons who you reported to have been evacuated from Vittel, our Embassy was instructed to request the Spanish Government to make every effort to secure their return to Vittel. Please convey the above information to Riegner, Isaac Sternbuch and other interested organizations. Explain to them fully the steps which this Government is taking through the Swies Government and advise them that cables have been memb to the Latin American countries in whose names papers have been issued opening discussion on the subject of exchange of nationals. On behalf of the War Refugee Board, please deliver the following message to Isaac Sternbuch from the Vaad Hahatzala Emergency Committee: "Please ascertain conditions at Camp Zelle, Inform us if you have contact with said camps and what can be done." Such message should be delivered after you have fully advised Sternbuch as requested above. HULL Regraded Unclassified 361 ORIGINAL TEXT OF TELEGRAM SENT FROM: Secretary of State, Washington TO: Amlegation, Bern DATED: April 22, 1944 NUMBER: 1402 CONFIDENTIAL FROM THE WAR REFUGEE BOARD TO HARRISON, BERN. The War Refugee Board requests that you deliver the following message to Islambek Khan, Afghan Legation, Bernt QUOTE Proceeding abroad on business expect to arrive Palace Hotel, Lisbon, May 3. Please come and see me in Lisbon as soon as possible. Signed David Paul Joffo. UNQUOTE. HULL Regraded Unclassified 362 TELEGRAM SENT RP PLAIN War Refugee Board April 22, 1944 AMLEGATION BERN. 1405, Twenty-second FOR THE MINISTER. Please deliver the following to McClelland from War Refugee Board. WRB no. 3. Board delighted that you have accepted appointment as its Special Representative. Wahle-sends personal thanks and feels confident that you will do competent job. War Refugee Board- will support you to fullest extent. Please do not (repeat not) hesitate to make frequent comments and suggestions. HULL (GLW) WE A-S/3 FA WRB :GLW:KG 4/22/44 Regraded Unclassified 363 PARAPHRASE OF TELEGRAM SENT FROM: Secretary of State, Washington TO: American Legation, Bern DATED: April 22, 1944 NUMBER: 1406 SECRET Reference is made herewith to your cable of April 14, No. 109. Such safe conduct as the British Government may agree to for the movement of the Tari from Istanbul to Constansa and from thence to Haifa carrying Jewish refugees, is con- curred in by the Government of the United States. In De- partment's cable of March 23, no. 970, the Department had requested the Legation to inform Intercross that this Gov- ernment concurred in safe conduct for movement of Tari be- tween Constansa and Istanbul, HULL Regraded Unclassified 364 PARAPHRASE OF TELEGRAM RECEIVED FROM: American Legation, Bern TO: Secretary of State, Washington DATED: April 22, 1944 NUMBER: 2581 CONFIDENTIAL Reference is made herewith to Department's cable of April 8, no. 1198. It is stated by Intercross that it is preparing re- plies to questions one, two and four. Concerning three, Intercross believes that if Joint Distribution Committee purphase foodstuffs in Portugal for delivery to Intercross delegate in Lisbon, matter would be simplified. HARRISON Regraded Unclassified 365 PARAPHRASE OF TELEGRAM RECEIVED FROM: American Legation, Bern TO: Secretary of mate, Washington DATED: April 22, 1944 NUMBERS 2591 CONFIDENTIAL Reference is made herewith to By cable of March 25, no. 1852. It is reported by Riegner that in fourth transaction he has purchased further million French france from Stitel- seve at rate of Swies france 1.70 por hundred French france. It is stated by Riegner that he is receiving satis- fadery reports on continuation of rescue action in France and evacuation of Jewish groups to 8 pain from Belgium, Holland, and France continues without interruption. A do- tailed report on these operations is promised b): him. HARRISON Regraded Unclassified 366 PARAPHRASE OF TELEGRAM RECEIVED FROME The American Minister, Bern TO: The Secretary of State, Washington DATE: April 22, 1944 NUMBER: 2592 CONFIDENTIAL 1. It is requested by Jewish organization here that the funds in question be placed to the credit of Delasem after being retransferred to the United States and placed in any convenient American bank. This request has already been telegraphed to London by Osborne. To enable me to ad- vise the representative please inform me by telegram if and when the operation is completed and I should like also to know the name of the bank. 2. It is requested by organization here that another twenty thousand dollars be deposited for the account of Delasem in the above mentioned American bank. When this is accomplished please advise me by cable. HARRISON DCR:MPL 4/24/44 Regraded Unclassified 367 CORRECTION April 22, 1944 In cable from Ankara 688 April 15 for War Refugee Board, line 7 delete "presidents" insert "presidency" delete "Centred" insert "Center". Line 8 "resche" should read "rescue". DIVISION OF COMMUNICATIONS AND RECORDS CSB Regraded Unclassified 368 PARAPHRASE OF TELEGRAM RECIEVED FROM: The American Ambassador, Ankara TO: The Secretary of State, Washington DATE: April 22, 1944 NUMBER: 725 CONFIDENTIAL As Ankara's number 41 the following message is for the War Refugee Board. This morning I was advised by the representative of the Intercross that an intimation had been received by him from Intereross that if the destination of the SS TARI is changed from Haifa to Iskanderun a German safe conduct for the ship might be granted. I have advised Simond that only after all hope of securing a German safe conduct to Haifa must be abandoned would the change be agreeable. Trans- shipping the refugees at Iskenderun to a United Nations ship would be involved in such a change of destination. STEINHARDT DCR:MPL 4/25/44 Regraded Unclassified 369 PARAPHRASE FOF TELEGRAM RECEIVED FROM: American Rubassy, Ankara TO: Secretary of State, Washington DATED: April 22, 1944 NUMBER: 726 CONFIDENTIAL Following is Ankara no. 42 for the WRB. Referwing to the unreserved confidence which Simond expressed to Hirschmas that von Paper would secure the German safe=senduct for the ss TARI without delay and that if it has not yet been secured, the Apostelic Delegate to Istan- bul and Simond try to ⑉ ven Paper to prese the request and that I confer with Simond personally without delay, please inform Hirschman that since his departure, I have been in constant contact with Simond who has how conferred with ven Paper on three occasions and that in addition, the Turk Minister for Foreign Affairs, at my request, has personally twice requested the German safe-conduct of von Papen. From the reports I have received from the Turkish Minister for Foreign Affairs and Simond, I as satisfied that ver Paper has been pessing for the safe-conduct from his Government. STEINHARDT Regraded Unclassified 370 RECT-561 Ankara This telegram must be paraphrased befo e being Dated April 22, 1944 communicated to anyone other than a Government Rec'd 7:55 p.m., 23rd. Agency. (BR) Secretary of State, Washington. 732, April 22, 3 p.m. FOR THE WAR REFUGEE BOARD FROM THE AMBASSADOR Ankara number 43. I perceive no objection to the Board raising with the Turkish Ambassador in Washington the danger of deportation to approximately 800 Jews in France who claim Turkish nationality. Department's number 350, April 19. As the Board is aware the Minister for Foreign Affairs at my request has on two occasions telegraphed the Turkksh Ambassador in Vichy to lend every possible assistance to these individuals. It 1s quite possible that, on receiving word from his Ambassador in Washington that he has been approached, the Minister may again communicate with the Turkish Ambassador in Vichy. STEINHARDT WTD Regraded Unclassified 371 NOB - 563 Ankara This telegram gran must be paraphrased before being Rated April 25, 1944. communicated to anyone other than a Governmental Rec'd 7:50 p.m. agency. (BR) Secretay of State, Washington. 733, April 23, 4:00 p.m. ANKARA NUMBER 44 FOR THE WAR REFUGEN BOARD FROM THE AMBASSADOR. Department's number 351, April 19. I very such appreciate the Board's generous telegram and shall of course continue by efforts to facilitate the disembarkation and transit through Turkey of refugees irrespective of whether their arrival in Turkish ports is legal or illegal. STRINHARDT NH Regraded Unclassified Treasury Department 372 Division of Monetary Research Date May 5, 1944 19 To: Miss Chauncey I think the Secretary would like to read this. H.D.W. MR. WHITE Branch 2058 - Room 214-1/2 Regraded Unclassified 373 THE FOREIGN SERVICE OF THE UNITED STATES OF AMERICA M AMERICAN EMBASSY Rio de Janeiro, Prazil, worll 22, 1944. My dear Mr. Secretary: I have received your letter of April 13, 1944, transmitting B. draft of the joint statement of experts on the establishment of an international monetary fund. AS mentioned in my telegram to you of April 20, I trans- mitted the finel revised draft to Finance Minister Arthur de Souza Costa, who expressed his appreciation for your thoughtfulness and courtesy in suggesting publication in Rio de Janeiro simultaneous with release in Washington and London. The text was published in full in today's local press and the plan 1s receiving widespresd and favor- able publicity in the newspapers and over the radio. As of possible interest to your organization, I enclose B translation of the Finance Minister's public statement which accompanied the publication of the text. Dr. Octavio Bulhoes, Brazil's technical expert in monetary matters, has informed me of his favorable re- action to the preliminary discussions held in Wishington last year with Dr. Harry White and his associates. If in the future I can be of assistance to you in this or any other matter, please do not hegitate to call upon me. Sincerely, Enclosure: Transl РАУШОНЯ The street Henry Morgenthau, Jr. Secretary of Treasury, Washington, D. C to dossess Regraded Unclassified 374 ACK-400 PLAIN DEPARTMENT OF STATE Mexico APR DATED April 22, 1944 TIONS RECORDS REc'd 6:04 p.m. Secretary of State, Washington. 605, Twenty-second FOR THE SECRETARY OF THE TREASURY FROM THE AHBAS- SADOR. All principal Mexico City ARILIES this morning carry front-page banner headlines and full text of joint statement by Experts on the Establishment of international monetary fund, clippings are being transmitted by air mail despatch. MESSERSMITH CAW Regraded Unclassified 375 NOT TO BE RETRA SMITTED COPY NO. 11 SECRET OPTEL NO. 129 Information received up to 10 a.m. 22nd April, 1944, 1. NAVAL. Anzio. 20th. Ineffective attac by humai torpedoes, one of which captured intact and two others probably sunk by patrol craft. Situation Bombay much improved. Alexandra dock working normally and clearance atPrinces and Victoria docks proceeding well, One of H.M. Submarines off Andamers probably sank 3,500 ton escorted ship 14th and sank a Destroyer 15th. 2. AIR OPERATIONS Western Front. 20th/21st. Total 4720 tons dropped by R.A.F. as follows:- Cologne. 1020 tons H.E., 722 incondiary including 244 4,000 pound H.E. thick cloud; almost impossible see markers and flares rapfdly lost in clouds; several earlier crews bombed on estimated time arrival. Vevertheless attack appeared well concentrated. Ground defences ineffective; few fighters. La Chapelle. 1224 tons H.E. attack in 2 phases at about 1- hour interval. Weather clear, some haze. Flares accurate and initial bombing well concentrated but somewhet scattered later on account of smoke spoiling visibility. Ottignies. 910 tons H.E. weather clear, but ground haze and smoke rendered assessment difficult though bombing appeared accurately concentrated on markers. No round defences; few fighters. Lens. 837 tons H.E., moderate cloud, everal explosions reported, including 1 very large. Ground defences insignificant; some fighters. 21st. 238 medium, light and fighter bombers attacked military constructions Northern France. 4 medium 1 fighter bomber missing. 119 Thunderbolts bombed 4 Belgian railway centres. 21st/22nd. Aircraft despatched. Cologne 24, sea-mining 58, leaflets 15. All returned safely. Rumania 21st. Escorted Liberators bombed railway centres at Bucharest. 189 tons, and Turnul Severin, 35 tons in bad weather. Enemy casualties reported in the air 35:21:31. Ours 6 Liberators, 5 fighters missing. Regraded Unclassified 376 LOT TO BL RE-TRANSMITTED COPY NO. " SECRET OPTEL No. 130 Information received up to 10 a.m., 23rd April, 1944. 1. NAVAL A motor torpedo boat was damaged during engagement 22nd, between our light forces and some E-boats off DEVONSHIRE on 21st/ During abortive air attack on ANDIO 21st our A/A claimed six aircraft shot down, In BLACK SEA between 15th and 20th Russian aircraft claim to have sunk 9 ships and two F-lighters, On evening 20th e U.S. east-bound convoy was attacked by about 25 aircraft east of ALGIERS. Two were destroyed. A U.S. Destroyer, a U.S. Liberty Ship and a British 8,000 ton ship sunk. Two other 7,000 ton ships damaged but reached port. Approximately same time another east-bound convoy attacked northeast of BOUGIE by 15 enemy air- craft. Casualties 1, 1, 3. A French ship, 4,700 tons, was sunk, 2, MILITARY BURMA. Japanese attack on BISHENPUR 20th repulsed. On IMPHAL-UKHRUL Road our troops have made further progress to- wards latter place. 3. AIR OPERATIONS WESTERN FRONT. 22nd. 804 Fortresses and Liberators supported by 48 squadrons fighters sent northwest GERMANY. 627 of them bombed HAMM Goods Yards dropping 1056 tons H.E. and 302 incendiary with results mainly good. 147 of remainder bombed other objectives including HAMM Town, BONN, KOBLENZ and SOEST. Eight Fortresses, 10 Liberators missing and 7 more Liberators reported shot down over this country by German Intruders. Enemy, casualties by fighters 3, 0, 1. Ours 1 fighter. 680 Marauders, ::itchells and Bostons and 108 Spitfire bombers attacked military constructions in Northern FRANCE. Two forces of Thunderbolt bombers sent to attack railway targets in FRANCE and BELGIUM. Full reports not yet received. 22nd/23rd. 1124 aircraft despatched: DUSSELDORF 594 (29 missing) BRUNSWICK 265 (4 missing) LAON Goods Yards 181 (9 missing) MANNHEIM 17 Military Constructions, N. FRANCE 2 Bomber Support 19 Intruders 22 Leaflets 24 Preliminary reports: DUSSELDORF - Weather clear, markers well grouped and easily seen, bombing well concentrated around them. BRUNSWICK - Thin cloud, otherwise good visibility, bombing appeared accurate and Mosquito one hour after attack reported good fires. Ten German Intruders operated over EAST ANGLIA. One was destroyed. Spitfires shot down a JU 188 off WICK. Regraded Unclassified