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Volume 858, June 23 - June 26, 1945
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Volume 858, June 23 - June 26, 1945
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Henry Morgenthau, Jr. Papers
Diaries of Henry Morgenthau, Jr.
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RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL
NO.
$
DIARY
Book 858
June 23-26, 1945
June 23, 1945
10:43 A. M.
Mr. Harry
White:
Austria, have been prepared and they've been
working on it for quite some time. It came to
my office for initialing three or four days ago
and I didn't have time to go over it until last
night. They've been pressing for it, and I want
to know whether you would want to go over it
before I initial it or whether you'd want me to
initial it as member of this committee. It is
a. very excellent document, incidentally. It is
a splendid document. It 18 on the political
directive. We all think it 1e very good.
HMJr:
You are thoroughly satisfied?
W:
Yes. This is an amazingly good document.
HMJr:
What?
W:
We think it is an amazingly good document.
HMJr:
Well, if you are thoroughly satisfied you initial
it as a member of a committee and let her go.
W:
Yeah, but that will represent the Treasury approval.
#
That's what
HMJr:
All right.
V:
Now, shall I send you a memo giving you the digest
of it, or send you & copy and if you get a chance
you might want to...
HMJr:
Give me a digest of it, but if you are satisfied
don't hold it up, let it go.
V:
All right, sir.
HMJr:
What?
W:
Right.
HMJr:
I can't do any more than that, but you've got to tell
me that you are thoroughly satisfied.
V:
Yes, we are thoroughly satisfied and I'm sure you would
be pleased at it.
HMJr:
O. K.
W:
Fine. Bye.
2
23 JUN 1945
Dear Dr. Rung :
I am glad to receive your letter of 9 June,
1945, and needless to say, I was pleased to have
the opportunity of secing you again the other day.
I appreciate your assurance that the Central
Bank of China will continue to cooperate with the
United States Army and Navy Forces in China. de
in the Treasury realise the difficulties involved
in supplying our forces with adequate amounts of
currency and in making available banking facili-
ties within China,
Your expression of gratification that ar-
rangements have been made to ship to China the
remainder of the $200 million of gold is appreciated.
As you know, the easing of the transportation situ-
ation has facilitated going forward with the se ship-
ments.
I an looking forward to the pleasure of seeing
you again.
Sincerely yours,
(Signed) H. Morgentham, Ja.
Nonorable H. is. Kung,
Hoom 4201,
Waldorf-Astoria Hotel,
New York, New York.
ISF/SA/efs 6/22/45
THE GENTRAL BANK OF CHINA
DEPOSITORY OF THE
HEAD OFFICE
CABLE ADDRESS
NATIONAL GOVERNMENT
CHUNORING, GHINA
June 9, 1945.
Hon. Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D. C.
Dear Mr. Morgenthau,
First of all, I wish to tell you that it gave me great
pleasure to have seen you today. After months of illness, it was
good to be able to get around and talk to old friends again.
Your letter of June 8, 1945 reached me just as I returned
from visiting you and I wish to thank you for giving the necessary
instructions to transfer the V35 million out of the unused portion
of the 0500 million loan for the purchase of banknotes. With
reference to the $25 million for the purchase of textiles, I am
glad to know that you will have transfers nade up to this amount
at such times no the purchses are made.
I wish to take this opportunity to tell you that I was deoply
gratified by the arrangement you have made with Dr. T. V. Boong
for a schedule of shipment for transporting to China the remaining
part of the $200 million worth of gold.
I also wish to take this occasion to assure you that the
Central Bank of China will continue to cooperate fully with the
United States Army and Navy forces in China. I, 68 the Governor
of the Bank, will make sure that our joint military effort is
never delayed because of currency or monetary needs. We have
cooperated fully for many years together and I would not want
anything to mar this good record during the last phase of our
common struggle against Japanese militarism and aggression.
with best personal regards,
Sincerely yours,
H. H. Kung.
RECISION
TRADE
MARK
MICROSTAT/ MICROFILM
ROLL NO.
4 -
June 23, 1945
MESSAGE FOR MR. MATTHEW CONNELLY, SECRETARY TO THE
PRESIDENT:
I have just received the message that you gave to
FitgGerald. Please thank the President for ne on
5
his prompt action in this matter.
Henry Morgenthau, Jr.
PRECISION
TRADE MARK
MICROSTAT/
RSG. a 5. PAT. OFF.
MICROPILM
5
TREASURY DEPARTMENT
Fiscal Assistant Secretary
To MRS. NO HUGH
I have reported these totals
to the Secretary.
As I know he does not want
written reports, I just wondered
whether you wanted to send this
#tatement in or return 11 to so.
&
C
Mr. Bartelt
7
INTERDEPARTMENTAL WAR SAVINGS BOND COMMITTEE
BUY
- 2 -
MAR
WASHINGTON
OFFICE OF CHAIRMAN
TREASURY DEPARTMENT
June 23, 1945
III. DOUBTFUL
Bureau of Engraving and Printing
81%
MEMORANDUM FOR THE SECRETARY:
A special effort 10 being made to help the Bureau of
Às of June 18, the standing of bureaus and offices of
Engraving and Printing meet its quota. The Interdepart-
the Treasury Department in the Seventh War Loan is as fol-
mental War Savings Bond Committee and my personal repre-
lows:
sentative, Mr. W. E. Barker, Jr., are rendering every
possible assistance. The prospects for making 100 per cent
I. OVER THE TOP
are hopeful, but by no means certain.
Office
Per cent of Quote
IV. TREASURY AS A WHOLE
War Finance Division
216%
Office of General Counsel
1838
The percentage for the Treasury Department as a whole,
Office of Chief Clerk
155%
on June 18, was 92 per cent. Later reports indicate
Procurement Division
1318
Internal Revenue 10 up to 90 per cent, making Departmental
Foreign Funds Control
129%
total 98 per cent. I as certain that the Department will
Division of Monetary Research
127%
reach its quota when all field reports are in.
Secret Service
126%
Bureau of Public Debt
114%
V. ALL FEDERAL AGENCIES -- NATION-WIDE
Interdepartmental War Savings
Bond Committee
1118
Over-all report not yet available; but indications are
Bureau of Accounts
108%
that Federal employees will seet their over-all quota of
Supt. of Treasury Bldge
108%
0305 millions.
Comptroller of the Currency
107%
Div. of Research and Statistics
105%
VI. FEDERAL EMPLOYEES IN
Division of Personnel
104%
DISTRICT OF COLUMBIA
Office of the Secretary
103%
Às of June 18, civilian Federal employees in the District
II, WILL REACH QUOTAS
of Columbia had reached 73.1 per cent of their quota of
$29,000,000. Indications are that D. C. total will reach
Bureau of Customs
98%
between 95 and 100 per cent.
Division of Tax Research
98%
Bureau of Narcotics
97%
Office of Treasurer of U. 5
93%
Bureau of the Mint
88%
Bureau of Internal Revenue
80%
I have been assured by the heads of all of the above
E. F. Bartelt
offices that their quotas will be reached or surpassed. The
Chairman
Bureau of Internal Revenue telegraphed recently to its larger
field offices for an estimate of the prospects of making their
quotas, and the replies were favorable with very few exceptions.
Later report shows Internal Revenue 90%.
RECISION
TRADE MARK
MICROSTAT
156. U. PAT. OFF.
MICROFILM
ROLL NO.
9
28
JUN
Fy dear Admiral Finkmid,
Ky dear General Vandegrift;
Under your leadership, the U. 5. Seventh Fleet
The Marine Corps, true to tradition, has shown the
has emblasoned . proud and victorious record on
same qualities of leadership in the Havy var Bond
the pages of history.
Program as it has in all other fields of endeevor.
I an informed that the Marine Corps currently leads
Your varo interest in and support of the Havy Yes
both the Nevy and Coast Guard in bond allotment
Bond Program have enabled Seventh Fleet Personnel
participation.
to write an equally fine record into Havy ter flond
history. by their savings in Ter Bonds, personnel
It is heartening to note that Marine Corps personnel,
in your command, who are already doing so such to
insure the security of our democratic way of life,
who have played such a determined part in the march
are also insuring their individual future financial
along the rugged road to Tokio, are equally determined
to provide for their individual future security.
security.
This citation 1a presented to you in recognition
As Commendant of the U. 3. Harine Corps, you have
of the able leadership which you have given to the
not only given fine leadership and interested support
to the Havy Ver Bond Program, but you have been most
far Bond Program of the Navy and of the Treasury
generous in giving of your time and effort to the
Department. I extend thanks and congratulations
Treasury Var Loan drives. This citation is presented
to you.
to you in recognition of these services. with it 8
Sincerely,
my ware thanks and sincere appreciation.
Sincerely,
(Signed) H. Morgenthau, Jr.
(Signed) H. Morgenthau, Jr.
General As A. Vandagrift, USMC
Commendant, U.S. Varine Corps
lleadquarters
Admirel 7. C. Kinkwid, USN
Comander Seventh Fleet
Washington, D.C.
Floot Post office
300 Pranolsco, Celifornia
Regraded Unclassified
PRECISION TRADE MARK MICROSTAT/ REG. v. & PAR, OFF, MICROFILM
ROLL NO.
10
28
Fy dear Admirel Teesche:
The U. 3. Const cuard bes played a splendid part
in the success of the Nevy ver Bond Program. The
Coast Cuard record In this respect matches its
distinguished record in all other vital phases of
the Tar effort.
Particularly noteworthy 1s the sanner In which the
Temporary Fembers of the Reserve have matched the
=
support given to the program by the regular and
reserve officers and ven of the U. S. Coast Cuard.
This citation is presented to you in recognition
of the sealous leadership end support which you
have given to the Tar Bend Program. on behalf of
the Treasury Department, heartfelt thanks are
extended to you.
Sincerely,
(Signed) H. Mergenthew, de,
Admirel n. B. Faesche, USCO
Commendant, de 3. Coest Cuard
Beadquarters, 1300 X street, T.S.
veshington, D.C.
Regraded Unclassified
June 23, 1945
11
MESSAGE FOR MR. MATTHEW CONNELLY:
Sent by Secret Service to
Mr. Latta at the White House
It has been suggested to me that Mr. Smith Troy,
at 11:25 A.V., June 23.
Attorney General for the State of Washington, and I an
informed now with the Judge Advocate General somewhere
in Europe might make a very good Assistant Commissioner
of Internal Revenue.
Inasmuch as you are in the State of Washington, I would
like you to mention this to the President, and would
appreciate your making some inquiries in the state as to
Mr. Smith Troy's capabilities. If you hear good things
about him, and if the President thinks well of this
suggestion, would you make inquiries as to whether or not
the friends of Smith Troy think he would like a job of
this kind. Thank you. How many fish did
you catch?
Henry Morgenthau, Jr.
RECISION TRADE MARK MICROSTATI MICROFILM ROLL NO.
14
TREASURY DEPARTMENT
B
- 2 -
INTER OFFICE COMMUNICATION
DATE
eno on the Marquette football team; in 1927
TO
Secretary Morgenthau
June 23, 1945
he joined the Packer team, and played through
1934; W&D a member of the 1929, 1930, and 1931
FROM
John W. Fehle
championship teams; at the present time he is
one of the Big Ten officials; elected to the
Seventy-eighthCongres on November 3, 1942."
I SSW Mr. Dilweg this morning and the following
points were developed:
1. Dilweg has no administrative ex-
perience and did not seen to be particularly
Interested in administrative problems.
2. He is dublous as to whether be would
be interested in the proposed job, but will
think it over and get in touch with me.
3. He did not impress me 8.8 being at
all outstanding in ability.
The following statement of Dilweg's background is
taken from the Congressional Directory for the 78th
Congress:
"LaVern Ralph Dilweg, Democrat, of
Green Bay, Wisconsin; was born November 1, 1903,
In Milwaukee, Wis.; was graduated from Washington
High School in 1921; entered Marquette University
in 1922, and had 1 year of engineering; received
his law degree, and W&S admitted to the Wisconsin
bar in 1927; married to Kleanor Coleman of swin-
ming fame, Milwaukee, Wis., in 1927; has family
of four children -- Jon Coleman Dilweg, 14;
Robert Anthony Dilweg, 9; Gary Thomas Dilweg, 6;
and Dianne LaVerne Dilweg, 5; moved to Green Bay,
Wis., in 1927 and began the practice of Law
there; at present is a member of the firm of
Martin, Clifford & Dilweg, with offices in the
Bellin Building; is active in fraternal and civic
organizations, being past chapter chairman of
the Brown County Red Cross; is a member and past
president of the Lions Club of Green Bay; played
Regraded Unclassified
RECISION TRADE MARK MICROSTAT/ MICROFILM BOLL
NO.
15
16
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
- 2 -
DATE June 23,
1945
TO Secretary Morgenthan
compared to $7 million in the correspond-
ing period of May. At the same time,
FROM J. W. Pehle
out-payments of large denominations of
currency decreased in this area and out-
payments of smaller denomination notes
A review of the comments by the Federal Reserve
increased.
Banks on the reaction to the recent currency order
reveals the following:
4, There were many expressions of pleasure
of the Treasury's deleting the require-
1. On the whole the banks are accepting
ment that banks indicate why they regard
the order with good grace and are
a. particular payment as unusual.
willing to cooperate.
5. Chicago reports that the initial news-
2. There are a. fev scattered criticions
paper comments of the Chicago district
ne follows:
vere critically in tone; probably due
to unfavorable publicity inspired by the
B. The banks fear that the reporting
State Bank Associations of Indiana and
requirements will have an adverse
Illinois. On the other hand, the Iowa
effect on their relations with
Association expressed approval of the
their customers.
order and pledged cooperation. Chicago
reports that since your letter of June 9
b. A fev banks mestion the Constitu-
and the deletion of one phase of the
tional and statutory authority for
reporting requirement, the feeling of the
the order.
bnnks is much improved.
C. A few of the banks object to the
6. It seems clear that your letter of June 9
extra work involved.
did a lot of good in producing a. favorable
reaction to the Treasury order.
3. Since the issuance of the order, there
has been a marked increase in the inflow
of currency in denominations of $50 and
up. At the same time there has been a
marked outflov of the smaller denomina-
tions.
Internec
For example, Philadelphia reports $26
million in receipts of currency in
denominations of $50 and over in the
first fifteen business days in June, 8.6
Regraded Unclassified
RECISION TRADE MARK MICROSTAT REG. U.S. PAT. OFF. MICROFILM ROLL
NO.
2"
G
R
17
A
P
$
H
Bell
95 JUN 20 PM 5 30
T
R
E
A
5
U
R.
Y
SN78G89K WASH (LONG ) D 194 CLEV 20-502
T
MORGENTHAU
1
L
E
IN PRESIDENT GIDNEY'S ABSENCE, I AM REPLYING TO BELL'S
G
R
WIRE JUNE 19 REQUESTING REPORT REGARDING ATTITUDE OF FINANCIAL
A
P
INSTITUTIONS WITH RESPECT TO YOUR REQUEST FOR REPORTS OF
H
CURRENCY TRANSACTIONS.
T
REACTIONS OF BUSINESSMEN WHICH HAVE COME TO OUR ATTENTION HAVE
R
E
BEEN FAVORABLE. REACTION OF BANKERS HAS BEEN SPOTTY, BUT IN THE
A
5
MAIN FAVORABLE. YOUR RECENT LETTER TO BANKS ELIMINATING
U
REQUIREMENT OF - REASON FOR REPORT" AND STATING THAT NO BANK
R
Y
NEED FEAR GOVERNMENT BECAUSE OF EEXXX ERROR IN JUDGMENT HAS
T
IMPROVED BANKERS' ATTITUDE. IN NO CASE HAS THERE BEEN ANY
E
L
CRITICISM OF THE OBJECTIVE, VIZ., TO OVERCOME BLACK MARKETS AND
[
TAX EVASION. OBJECTIONS VOICED ARE :
G
R
1. BANKS DO NOT LIKE TO BE POLICEMEN :
A
P
2. COMPLIANCE WITH THE REQUEST WILL NOT BE UNIFORM AMONG
H
BANKS, WITH THE RESULT THAT BANKS WHICH ARE CONSCIENTIOUS
T
IN REPORTING FEAR THEY MIGHT LOSE BUSINESS TO BANKS NOT so
R
E
CONSCIENTIOUS OR WHOSE JUDGMENT DIFFERS.
A
$
WE HAVE NOTED NO NEWSPAPER COMMENT OTHER THAN THE ORIGINAL
U
ANNOUNCEMENT, EXCEPT IN PITTSBURGH WHERE THE REPORTING WAS JUST
R
Y
AND SYMPATHETIC.
T
THE FOLLOWING SUGGESTIONS HAVE BEEN RECEIVED AND ARE PASSED ON
E
L
[
G
R.
A
P
H
T
Regraded Unclassified
RECISION TRADE MARK MICROSTAT REG. U. $ PAT. OFF. MICROFILM ROLL
NO.
12"
T
R:
E
A
D194/2
$
U
R.
Y
TO YOU WITHOUT RECOMMENDATION:
T
1. PERMIT CUSTOMER TO FILE EXPLANATORY STATEMENT TO BE FORWARDED
E
L
WITH REPORT.
E
2. REQUIRE REPORTS FROM WAR BOND CONSIGNMENT AGENTS.
G
R
3. CALL IN ALL LARGE BILLS, SUBSTITUTING NEW ISSUES AND
A
P
REQUIRING REPORTS ON PERSONS CONVERTING.
H
4. FLAT REQUIREMENT THAT ALL TRANSACTIONS IN BILLS OF CERTAIN
T
E
*
SIZE OR OVER OR TRANSACTIONS OVER CERTAIN AMOUNT BE
E
I
REPORTED WITHOUT REGARD TO LEGITIMACY OR UNUSUALNESS.
A
$
5. WAIVE REPORTS ON TRANSACTIONS INVOLVING PURCHASE OF
U
1
R
WAR BONDS.
Y
I
T
FLOW OF CURRENCY IN THOUSANDS
E
L
I
(MINUS SIGH INDICATES NET PAYMENTS)
E
JUNE 1-16
1945
MAY 1-16 Run
JUNE H6 1944
G
I
&
CLEVELAND
-5,282
-14,413
-10,567
A
P
4
CINCINNATI
377
- 3,293
-1,675
H
PITTSBURGH
-4,924
- 8,421
-8,328
T
de
R.
-9,869
-26,127
-20,570
E
AS INDICATED ABOVE, NET OUTWARD FLOW HAS DECREASED.
A
5
U
R
Y
T
6TH LN FROM BOTTOM MK HEADING OF THREE COLUMNS
E
L
JUNE 1-16 1945
ann MAY 1-16 1945 JUNE 1-16 XXXXX
E
a
G
1944
R
A
1
&
P
5
H
1
8
T
R.
E
8
A
$
U
8
R.
Y
&
D194/3
T
E
Regraded Unclassified
WAR BUNDS.
Y
I
PRECISION
TRADE MARK
MICR
T
FLOW OF CURRENCY IN THOUSANDS
E
0
L
(MINUS SIGH INDICATES NET PAYMENTS)
E
I
JUNE 1-16 1945
MAY 1-16 AVS
JUNE H6 1944
G :
R.
CLEVELAND
-5,282
-14,413
-10,567
A
$
P
[
CINCINNATI
377
- 3,293
- 1,675
H
I
PITTSBURGH
-4,924
- 8,421
- 8,328
:
T
R
-9,869
-26,127
-20,570
I
E
AS INDICATED ABOVE, NET OUTWARD FLOW HAS DECREASED.
A
$
4
U
R
Y
I
T
3
6TH LN FROM BOTTOM MK HEADING OF THREE COLUMNS
E
L
JUNE 1-16 1945
NMM MAY 1-16 1945 JUNE 1-16 *****
E
#
G
-
1944
R
A
#
I
P
5
H
T
.
R
E
A
6
$
U
I
I
R
Y
I
D194/3
T
E
I
L
1
FOLLOWING FIGURES FOR FIRST SIXTEEN DAYS OF JUNE 1945ARE
E
G
1
SIGNIFICANT :
R
5's , 10'S , AND 20'S
50's AND UP
A
:
P
CLEVELAND
- 8,839
3,803
H
CINCINNATI
- 1,644
2,157
T
R
PITTSBURG#
- 5,494
2,155
E
A
- 15,977
8,115
$
THESE FIGURES SHOW A NET COUTWARDHDAW OF SIXTEEN MILLION
U
R.
N IN SMALL BILLS AND A NET INWARD FLOW OF EIGHT MILLION IN
Y
I
LARGE BILLS, SUGGESTING SUBSTITUTION
T
E
HAYS
I
L
E
G
1
R
A
1
,
H
2
T
R
Regraded Unclassified
RECISION TRADE MARK MICROSTAT NO. u. 5. PAT. OFF. MICROFILM
ROLL NO.
Bell
19
A
5
U
R
Y
W83WASH C93 LONG PHILA JUNE 20-346P
T
MORGENTHAU
95 JUN 20 PM 4 08
E
L
I
U
18
R
ANSWERING MR BELL'S WIRE OF JUNE 19, 1945, GENERAL REACTION
G
il
Y
TO CURRENCY REPORTING IN THIS AREA CONTINUES TO BE FAVORABLE. A
A
T
P
I
FEW BANKS MENTIONED THE EXTRA WORK INVOLVED IN MAKING THE REPORTS.
H
L
THE WAIVING OF THE REQUIREMENTS AS TO THE REASONS FOR REPORTING
T
E
R
G
THE TRANSACTIONS HAS EVOKED FAVORABLE COMMENTS. QUESTIONS RAISED
[
95 JUN 20 PM 5 51
R
A
HAVE BEEN OF A TECHNICAL NATURE AND NOT RELATED TO PROPRIETY OF
A
S
P
ORDER. NEWSPAPER REPORTS HAVE BEEN CONFINED TO FACTUAL STATEMENTS.
U
H
R
ONE COUNTRY BANK REPORTS CONSIDERABLE EXCITEMENT IN ITS CITY
T
Y
R.
AS A RESULT OF VISITS, SINCE PUBLICATION OF TREASURY'S PROPOSAL
T
E
W73GC13K WASH D 194 MORGENTHAU SINED IN SHEET 2 7TH LN FROM END MK
E
A
TO EXPAND FORCE OF INVESTIGATORS, BY REPRESENTATIVES OF COLLECTOR
L
2ND WD SIGN PLS AND IN SHEET 3 3RD LAST LN MK 6TH WD OUTWARD TNX
5
U
OF INTERNAL REVENUE WHO WISHED TO EXAMINE THE BANK'S DEPOSIT
E
D
G
R
TICKETS.
R.
Y
I
A
RECEIPTS OF CURRENCY ALL DENOMINATIONS IN FIRST 15 BUSINESS
T
P
E
DAYS IN JUNE 1945, AMOUNTED TO $71,400,000 AS COMPARED WITH
H
E
$59,500,000 IN CORRESPONDING PERIOD IN MAY. RECEIPTS OF CURRENCY
T
R
I
IN DENOMINATIONS OF $50 AND OVER AMOUNTED TO $26,000,000 IN FIRST
E
A
15 BUSINESS DAYS IN JUNE AS COMPARED WITH $7,000,000 IN COREESPONDING
:
$
U
PERIOD IN MAY. TOTAL PAYMENTS IN FIRST 15
BUSINESS DAYS IN
R.
JUNE AMOUNTED TO $83,000,000 AS COMPARED WITH $67,500,000 IN
Y
3
CORRESPONDING PERIOD IN MAY. PAYMENTS IN DENOMINATIONS OF $50
T
E
3
AND OVER AMOUNTED TO $5,500,000 IN FIRST 15 DAYS IN JUNE AS COMPARED
L
E
WITH $8,200,000 IN FIRST 15 DAYS IN MAY.
G
2
DRINNEN
R
Regraded Unclassified
RECISION TRADE MARK MICROSTAT R$G. U. 5. PAT. OFF. MICROFILM BOLL
NO.
H
21
T
t
R
Y
SN76WASH B206 LONG BOS 20-1220P
E
[
Bell
low
:
A
]
T
HENRY MORGENTHAU JR
S
20
-
TR DEPT
U
L
R
E
845 1945 JUN 20 PM I 17
Y
I
G
3N83WASH B602 NY 20-518
R
PURSUANT TO REQUEST UNDERSECRETARY BELL'S TELEGRAM 19TH, WE
T
E
1915 JUN 20 PM 5 38
A
I
MORGENTHAU - TREASURY
SUBMIT FOLLOWING GENERAL REPORT ON CURRENCY ORDER: NEWSPAPER COMMENT
L
P
H
TO DATE MOSTLY FACTUAL: CLIPPINGS FORWARDED PURSUANT YOUR PREVIOUS
E
G
I
T
REURTEL K-187, SUPPLEMENTING OUR PREVIOUS REPORT THERE HAS BEEN
REQUEST. APPROXIMATELY 60 TCR-1 REPORTS RE TRANSACTIONS AGGREGATING
R
o
R
A
SURPRISINGLY LITTLE NEWSPAPER COMMENT AND WE HAVE RECEIVED VERY
E
ABOUT $275,000 RECEIVED TO DATE FROM MISCELLANEOUS SMALL BANKS WITH-
P
a
I
A
OUT COMMENT BY BANKERS SINCE MAILING OF YOUR LETTER TO BANKS. PREVIOUS
H
LITTLE UNFAVORABLE COMMENT FROM THE BANKS NEARLY ALL OF WHICH HAVE
$
[
U
COMMENT SCATTERING, MAJORITY FAVORABLE BUT SOME CRITICAL OF EXPECTED
2
EVIDENCED A WILLINGNESS TO COOPERATE. SEVERAL OF OUR NEW YORK CITY
R
(
BANKS WERE MUCH CONCERNED ABOUT QUESTION #2, THE ELIMINATION OF WHICH
Y
ADVERSE EFFECT ON CUSTOMER RELATIONS AND QUESTIONING CONSTITUTIONAL
T
T
AUTHORITY. MARKED INCREASE IN INFLOW OF CURRENCY IN DENOMINATIONS OF
R
WAS PLEASING TO THEM. THE CLEARING HOUSE BANKS HAVE HELD TWO
E
(
E
L
$50 AND UP, ESPECIALLY IN $100 BILLS. ALTHOUGH THIS TENDENCY BEGAN
A
)
MEETINGS FOR DISCUSSION OF THE PROGRAM WITH A VIEW TO FOLLOWING
5
E
BEFORE, IT HAS BEEN ACCELERATED SINCE ISSUANCE OF THE ORDER. CONVERSELY,
UNIFORM POLICIES AND MAKING REPORTS EFFECTIVE. WE REGARD ENTIRE
u
G
DURING SAME PERIOD THERE HAS BEEN A MARKED ACCELERATION IN THE OUTFLOW
R
)
R
PROGRAM AS SATISFACTORY AT THIS TIME.
Y
A
OF SMALLER DENOMINATIONS, ESPECIALLY $20 BILLS. DURING PAST MONTH ONLY
ROUNDS.
P
T
H
NEGLIGIBLE NET CHANGE IN AGGREGATE CURRENCY IN CIRCULATION.
E
L
T
WILLIAM WILLETT, FIRST VICE-PRESIDENT.
E
R
G
E
R.
A
P
Regraded Unclassified
RECISION
TRADE MARK
MICROSTAT
REG.
U.
$
PAT.
ORF.
MICROFILM
ROLL NO.
Bell
H
23
W82WASH F212 ATLA 20-230P
T
SECRETARY MORGENTHAU
22
Y
E
WW
T
WN 20 PM A 01
A
$
E
OUTSPOKEN CRITICISM OF THE RECENT CURRENCY ORDER HAS IN THIS
u
L
DISTRICT BEEN LIMITED TO A VERY FEW BANKERS WHO HAVE SAID THAT THEY
R
Y
SN52WASH RM 133 RICH 20-420
G
OBJECT TO ACTING AS AGENTS FOR UNCOVERING INFORMATION FOR THE PURPOSE
T
SECRETARY MORGENTHAU Iandia
19-5-JUN JUN 20 PM 4 38
A
OF PROSECUTION. A GREAT MANY SEEM TO FEEL THAT THE ORDER TENDS
E
P
L
H
TO BREAK DOWN A LONG-ESTABLISHED CONFIDENTIAL RELATION BETWEEN THE
E
RETEL OF UNDER SECRETARY YESTERDAY, AS FAR AS WE KNOW THERE
T
G
BANKER AND HIS CUSTOMER; BUT THE OVERWHELMING MAJORITY IS QUITE WILLIS
R
HAS BEEN NO MATERIAL CHANGE IN SITUATION IN THIS DISTRICT
R
-
TO COOPERATE BECAUSE THE NECESSITY OF CURBING TAX VIOLATORS AND BLACK
A
AS REPORTED TO YOU IN PRESIDENT LEACH'S TELEGRAM OF JUNE 7.
P
A
S
MARKET OPERATORS IS THOROUGHLY APPRECIATED. YOUR STATEMENT, WHICH WE
H
VERY FEW ADDITIONAL COMMENTS HAVE BEEN RECEIVED, NONE OF WHICH
U
HAVE EMPHASIZED, THAT NO HONEST MAN HAS ANYTHING TO FEAR HAS BEEN VERY
T
HAS BEEN UNFAVORABLE. FOLDER OF NEWSPAPER CLIPPINGS SENT YOU
R
Y
EFFECTIVE.
E
JUNE 7. NO SIGNIFICANT COMMENT HAS APPEARED SINCE THEN. RETURN
T
A
THE POINT HAS BEEN MADE TO US THAT THE ORDER, IF INDEFINITELY
FLOW OF CURRENCY TO THIS BANK AND ITS BRANCHES FOR FIRST NINETEEN
E
$
L
CONTINUED OR EXTENDED IN SCOPE, MIGHT EVENTUALLY RESULT IN AN
u
DAYS OF LAST FOUR MONTHS IN EVEN THOUSANDS OF DOLLARS, AS FOLLOWS:
E
R
G
INTERFERENCE WITH THE FREE INTERCHANGE OF DEPOSITS AND CURRENCY; BUT
Y
20s & UNDER
508 & OVER
R
THERE SEEMS TO BE NO GENERAL FEAR THAT THE TREASURY WILL EXPAND THE
T
40,809
6,086
A
MARCH
E.
P
ORDER SUFFICIENTLY TO PRODUCE ANY SUCH RESULT. THE POINT HAS ALSO BEEN
L
39,297
7,740
H
APRIL
E
MADE THAT THERE IS ALREADY OUTSTANDING SUFFICIENT CURRENCY TO FINANCE
MAY
40,841
5,666
T
G
R.
BLACK MARKET OPERATIONS.
R.
11,994
JUNE
35,883
E
A
WALDEN.
A
PRESS COMMENT, JUDGING FROM LEADING PAPERS ALL OVER THE DISTRICT,
5
H
u
HAS BEEN ALMOST TOTALLY LACING. THE PRESS LARGELY CONFINED ITSELF TO
R
T
BRIEF NEWS STOREIS QUOTING YOUR STATEMENT AT THE TIME THE ORDER BECAME
Y
R.
T
EFFECTIVE.
E
A
OUR CIRCULATION CONTINUES TO EXPAND, BUT SINCE THE ORDER WENT IND
$
U
EFFECT, THERE HAS BEEN A NOTABLE REDUCTION OUR IN OUR PAYMENTS OF 50'S
R
AND UP, AND, THIS MONTH, IT APPEARS THAT WE WILL HAVE NET RECEIPTS OF
Y
T
50'S AND UP FOR THE FIRST TIME IN SEVERAL YEARS.
E
BRYAN.
L
E
G
Regraded Unclassified
RECISION TRADE MARK MICROSTAT RDG. u, 5. PAT. OFF. MICROFILM
ROLL NO.
12"
P
0
Bell
24
H
T
E
A
W79G60WASH (LNG) GX234 CGO 20-242
5
25car
5
96 JUN 20 PM 3 55
HON. HENRY MORGENTHAU
U
Y
Bill
Y
t
IN ABSENCE OF PRESIDENT YOUNG THE UNDERSIGNED IS REPLYING TO
T
T
E
I
BELL'S WIRE OF 19TH RE RECENT CURRENCY ORDER. STOP. INITIAL
96 JUN 20 PM & 22
L
NEWSPAPER COMMENTS IN THIS DISTRICT WERE LIMITED IN NUMBER
W98G07WASH (LONG) H184 STL 20-307
E
G
G
BUT RATHER CRITICAL IN TONE FOR THE MOST PART, PROBABLY DUE
MORGENTHAU
A
A
TO UNFAVORABLE PUBLICITY INSPIRED BY STATE BANKERS ASSOCIATIONS
P
H
OF INDIANA AND ILLINOIS. ON THE OTHER HAND IOWA ASSOCIATION
SINCE MR. DAVIS' TELEGRAM TO YOU ON JUNE B THERE HAS BEEN NO
EXPRESSED APPROVAL OF PURPOSE OF ORDER AND PLEDGED CO-OPERATION.
MATERIAL CHANGE IN EIGHTH DISTRICT IN REGARD TO TREASURY
T
T
C
STOP. PRINCIPAL CRITICISM OF BANKERS RELATED TO VIOLATION OF
DEPARTMENT REPORTS OF UNUSUAL CURRENCY TRANSACTIONS. SINCE THAT
CONFIDENCE BETWEEN THEMSELVES AND CUSTOMERS WITH POSSIBLE LOSS
E
DATE HAVE RECEIVED TWO LETTERS FROM FINANCIAL INSTITUTIONS AND
A
A
OF GOOD WILL, ALSO INABILITY TO DISTINGUISH MOTIVES FOR CURRENCY
$
NEITHER WAS CRITICAL OF TREASURY OBJECTIVES IN RESPECT TO REPORTS.
$
U
u
C.
TRANSACTIONS AND SOME RESENTMENT THAT TRADING WITH THE ENEMY ACT
HAVE OBSERVED NO NEWSPAPER COMMENTS SINCE THOSE SENT BY MR. DAVIS
Y
TO YOU ON JUNE 8. DOLLAR VOLUME OF LARGE DENOMINATION CURRENCY
Y
WAS USED AS AUTHORITY FOR ORDER, AND THAT INSTRUCTIONS WERE NOT
C
T
DEPOSITEC XXX DEPOSITED WITH US FROM JUNE 8TH TO 19TH WAS IN EXCESS OF
T
DIRECTED TO ALL BUSINESS ESTABLISHMENTS. WE HAVE HAD NO DIS-
I
E
APPROVAL OF PURPOSE OF ORDER NOR EXPRESSION OF DESIRE TO AVOID
L
USUAL EXPERIENCE CONTINUING TREND REPORTED IN OUR TELEGRAM 8TH. IN
L
C
E
ADDITIONAL WORK REQUIRED OF BANKS. STOP. SINCE SECRETARY'S
G
CONVERSATIONS WITH OFFICIALS OF BANKS AND OTHER FINANCIAL INSTITUTIONS
G
C
R
R.
LETTER OF JUNE 9 AND ELIMINATION OF REQUIREMENT OF ANSWERING
A
IN EIGHTH DISTRICT HAVE RECEIVED SEVERAL FAVORABLE COMMENTS
A
PART C-2 OF REPORT FORM, WE BELIEVE FEELING OF BANKS is MUCH
P
REGARDING YOUR LETTER JUNE 9TH CLARIFYING OBJECTIVES OF ORDER AND
P
2
I
H
H
IMPROVED AND NEWSPAPER COMMENT HAS PRACTICALLY DISAPPEARED. WE
ELIMINATION OF REQUIREMENT THAT PART C-2 OF REPORT FORM BE COMPLETED.
T
T
3
I
HAVE NO DOUBT THAT BANKS IN THIS DISTRICT ARE PREPARING TO CO-
HITT.
E
E
OPERATE. STOP. OUR CIRCULATION SHOWS NET DECREASE $9,000,000
0
A
A
$
$
JUNE 1 TO JUNE 19 INCLUSIVE, STOP. EXCESS OF RECEIPTS OVER PAY-
U
U
)
MENTS OF BILLS IN DENOMINATIONS $50 AND OVER $33,500,000 SAME
Y
(
PERIOD.
T
DAWES.
E
L
E
G
R
A
Regraded Unclassified
RECISION TRADE MARK MICROSTAT/ REG. v. $. PAT. OFF. MICROFILM ROLL
NO.
T
27
A
$
U
But
95 JUN 20 PM 6 07
Y
26
$
U
T
E
Y
L
W67G49WASH 164 MPLS 20-234
E
196 JUN 20 PM
T
G
MORGENTHAU
E
R
L
W84GC26K WASH J196 KC 20-453
A
E
G
HENRY MORGENTHAU, MXXX JR. SECRETARY OF THE TREASURY
P
THE MAJORITY OF BANKERS IN THE NINT H DISTRICT ENDORSE YOUR
H
R.
RECENT CURRENCY ORDER ALTHOUGH SOME BANKERS QUESTION THE PROPRIETY
A
T
REPLYING MR. BELL'S WIRE OF JUNE 19, THERE HAS BEEN LITTLE OR NO
R
OF REPORTING CERTAIN CONFIDENTIAL TRANSACTIONS STOP GENERALLY
H
E
A
SPEAKING BANKERS ARE FAVORABLE TO YOUR PROGRAM AND WILL GIVE
T
NEWSPAPER COMMENT INTHIS DISTRICT REGARDING RECENT CURRENCY ORDER,
$
FULL COOPERATION TO REPORTING UNUSUAL CASH TRANSACTIONS WXXX
U
AND SUCH COMMENTS AS HAVE BEEN MADE WERE THE REPORTINGOF FACTS WITH
R
WHERE THERE IS AN INDICATION OF INCOME TAX EVASION OR BLACK
A
Y
S
ND INDICATION OF PRESS BEING FAVORABLE OR UNFAVORABLE. WHILE NOT TOO
MARKET OPERATIONS STOP THERE HAS BEEN NO MARDXXX MARKED INCREASE
U
T
.
ENTHUSIASTIC ABOUT ASSIGNMENT, BANKERS GENERALLY EXCEPT IN FEW
E
IN THE INFLOW OF CURRENCY, BUY THERE HAS BEEN AN APPRECIABLE
Y
L
ISOLATED CASES HAVE INDICATED WILLINGNESS TO COOPERATE TO FULLEST
E
DECREASE IN THE DEMAND FOR LARGE BILLS
T
EXTENT AS THEY ARE IN SYMPATHYWITH THE OBJECTIVES. HOWEVER, THEY
G
E
PEYTON
C
L
R
E
RECOGNIZE IT AS À DELICATE TASK WHICH REQUIRES HANDLING WITH TACT AND
A
P
G
DIPLOMACY TO AVOID EMBARRASSING SITUATIONS WITH CUSTOMERS LEST THEY
H
8TH LN 6TH we BUT.
A
FEEL CONFIDENCE BETWEEN THEM HAS BEEN VIOLATED. ONE PROMINENT BANKER
T
P
H
SAID BANKS WOULD FEEL BETTER ABOUR XXXX ABOUT REPORTING REQUIREMENT
E
IF TREASURY WOULD ASSURE BANKS THAT THIS WAS NOT OPENING WEDGE FOR
A
s
OTHER ASSISTANCE GOVERNMENT MAY REQUEST OF BANKS IN SIMILAR MATTERS
U
WHICH MAY HAVE TENDENCY TO COME BETWEEN THEM AND THEIR CUSTOMERS.
Y
TOTAL PAYMENTS AND RECEIPTS OF CURRENCY, ALL DE NOMINATIONS, BY THIS
T
BANK AND ITS BAXXXX BRANCHES HAVE BEEN ABOUT NORMAL FOR FIRST 19 DAYS
E
L
THIS MONTH, ALTHOUGH ALL OF OUR OFFICES REPORT RECEIPTS THIS MONTH
E
G
HAVE INCLUDED SUBSTANTIAL AMOUNT OF LARGE BILLS AVERAGING 4 AND 5
R
A
TIMES NORMAL. ALSO SOME INDICATION THAT CURRENCY IN SAFETY DEPOSIT
F
BOXES 18 BEING WITHDRAWN AND DEPOSITED IN COMMERCIAL BANKS.
H
KOPPANG.
T
Regraded Unclassified
RECISION
TRADE MARK
MICROSTAT
REG. v. s. PAT. OFF.
MICROFILM
ROLL NO.
H
29
T
)
WW
R.
E
w89 gc42
L165-20 JUNE 20-45-435p
)
A
$
U
)
BELL, TREASURY
95 JUN 21 AM 11 49
Y
3
T
REURTEL 19TH. CURRENCY ORDER APPARENTLY RESPINSIBLXX
E
I
28
L
A
RESPONSIBLE FOR SUBSTANTIAL NET RETURN FLOW OF
E
5
u
CURRENCY IN LARGER DENOMINATIONS AND FOR A DECREASE IN
G
R.
R
6;2-'# M147 DLS 20-435P
Y
RATE OF EXPANSION OF TOTAL CURRENCY OUTSTANDING.
A
96 JUN 20 PM 56
P
T
SPECIFICALLY NET RECEIPTS AT ALL OFFICES OF THIS BANK
H
E
BELL
JUNE 1 TO 19 ARE:
L
T
REURTEL 19TH WE HAVE OBSERVED IN THE NEWSPAPERS PUBLIXXXX PUBLISHED
E
R.
$2,298,000 IN 100'S
G
E
C
IN LARGER CITIES OF THIS DISTRICT NO UNFAVORABLE EDITORIALS WITH
R.
1,631,000 IN 500'8
A
5
REGARD TO THE TREASURYS CURRENCY REGULATIONS.ON THE OTHER HAND, WE
A
P
3,893,000 IN 1,000'S
U
UNDERSTAND SUCH NEWSPAPERS ARE SYMPATHETIC WITH THE PROGRAM AND ARE
H
R
NEWPAPER COMMENT HAS BEEN ALMOST NON-ESXX EXISTENT SINCE
Y
FULLY COOPERATING WITH IT. WE HAVE CONTACTED THE LARGER BANKS IN
PUBLICATION OF TREASURY'S INITIAL PRESS RELEASE. BANKERS
T
DALLAS HOUSTON SANANTONIO AND EL PASO AND NONE OF THEM RAISED ANY
T
IN PRINCIPAL CITIES GENERALLY APPEAR WILLING TO FILE
E
C
R.
QUESTION OF IMPROPRIETY REGARDING THE PROGRAM. THESE BANKS ARE
L
E
:
REPORTS SINCE THE ELIMINATION OF PARAGRAPH 2, PART (c),
E
C
COOPERATING TO THE FULLEST EXTENT, AN OFFICER OF THE LARGER DALLAS
A
G
S
OF TCR-1. IT APPEARS HOWEVER THERE MAY BE LACK OF
R
INSTITUTION STATING EMPHATICALLY HE WAS AGAINST THE BLACK MARKET
U
R.
UNIFORMITY AMONG BANKS IN DETERMINING TRANSACTIONS TO BE
A
C
P
AND TAX EVASION. SINCE JUNE 11945 OUR HEAD OFFICE HAS PAID OUT
Y
REPORTED. FOR INSTANCE, SOME BANKS ARE UNDECIDED WHETHER
H
$633,000 IN BILLS OF $50,XXX $50 DENOMINATION AND ABOVE AND HAS
T
RECEIVED $3,006,000 IN SUCH BILLS. PRESIDENT GILBERT MATTENDING
E
L
:
THEY SHOULD REPORT TRANSACTIONS WITH RACE TRACKS AND OTHER
T
C
THE PRESIDENTS CONFERENCE AND IT MIGHT BE WELL FOR YOU TO CONTACT
E
R.
G
GAMBLING OPERATORS WHERE SUCH TRANSACTIONS HAVE BEEN
E
1
HIM
R:
A
[
A
CUSTOMARY AND NOT ILLEGAL. REACTION OF A FEW BANKS STILL
$
COLEMAN.
P
1
U
APPEARS TO BE UNFAVORABLE ON GROUND THAT A BURDEN HAS BEEN
$
H
R
PLACED ON THEM AND CUSTOMER RELATIONS WILL BE DISTURBED.
Y
5
MOST BANKS STATE THEY BELIEVE THE NUMBER OF REPORTABLE
T
E
TRANSACTIONS WILL BE SMALL, SEVERAL FEELING THAT PUBLICITY
L
E
HAS FORESTALLED SOME DEPOSITS AND WITHDRAWALS WHICH MIGHT
G
OTHERWISE HAVE BEEN EFFECTED. WE ANTICIPATE SEVERAL
R
A
HUNDRED REPORTS FOR UXX JUNE WILL BE FILED IN THIS
P
H
DISTRICT.
T
CLERK.
A
5
Regraded Unclassified
30
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE 6/23/45
TO
Secretary Morgenthau
FROM
E. B. Fussell
The most significant feature of the mail reports
this week is the continuing number of letters dealing with
our tax evasion drive.
The Secretary's and White House mail combined
show:
43 applications for jobs
36 reports of evaders
4 (only) letters dealing with Hartford-
Elliott Roosevelt loan
Commissioner Nunan and various Bureau of Internal
Revenue offices, of course, receive many additional letters
of information about tax evasion and applications for jobs,
but the number who write the Secretary directly, as con-
trasted with letters on other subjects, indicates & very
general reaction.
Letters regarding instructions to banks, etc.,
to report currency transactions -- 18 favorable, 3 un-
favorable, are also interesting. In this connection,
however, one of the unfavorable letters makes the probably
significant comment that there is still much adverse
criticism among bankers who do not feel called upon to
write.
At the start of this new method of analyzing
mail I asked War Finance to install & digest system.
This has entailed considerably more work than is justified
by the results. Unless you disagree, I will ask War
Finance hereafter to digest only letters dealing with
general subjects, indicating the trend of public opinion,
eliminating the letters which deal mainly with suggestions
as to types of promotion, etc. The "box score" report
by Mrs. Forbush gives a good idea of the general scope
of such letters.
statemed
RECISION TRADE MARK MICROSTAT/ MICROFILM
ROLL NO.
31
WAR FINANCE DIVISION
J.M.Morse
to
June 23, 1945
Mr. Pussell
DIGEST OF MAIL
FOR
REPORT TO SECRETARY
Constructive Suggestions
Use "Dr. Win The Mar* as alogan for 8th War Loan in connection with
the Roosevelt Memorial Bonds- 1
Put forth more effort to sell bonds at ball parks during the 7th inning
stretch- 1
Have system of pdn and varied ribbons to designate people who hold bonds
certain length of time without cashing thes 10- 1
(referred to us by Senator Vandenburg, to whom reply directed)
Cultivate more extensively the use by business and individuals of
miniatures (as stickers) of War Bond posters- 1
s
Point up more where we use statistical tables the amount of interest cos
loses on appreciation bonds by cashing at various dates before
maturity-1
Regraded Unclassif
RECISION TRADE MARK MICROSTAT/ MICROFILM
ROLL NO.
32
33
Har Finance Division
- 3 -
June 23, 1945
War Finance Division
- 2 -
June 23, 1945
Miscellaneous
Is it possible to get payment now on & lost Liberty Bond?- 1
Criticism
Please have Treasury keep landlord from putting Mother out- 1
7th War Loan E Bond quota much too large; why don't - give more
attention to F's and 0's?- 1
(Bond selling youngster in New York City)
(Executive Manager for Florida)
Can - get help on having OPA release rationed goods for Mar Bond
austions?-- 1
Postmaster at Ludlow, Miss., giving War Bond program poor cooperation;
unwilling to issue bonds unless pressed- 1
(WFCommittee in Pikeville, ky.)
(State Chairman for Mississippi)
will Treasury endorse campaign by Veterans' organisations of Spencer,
Iowa, to use bonds as fund for memorial to veterans of this warl- 1
War Finance Division wastes 16 Mr. film. Certain private industries
using then for their OWN advertising- 1
Private wanting Treasury to get his out of Any so be can work for
use 1
(Member State Department of Education, Columbus, 0.)
Party in New York turned down by State Committee as volunteers wants
Many people in Iowa charge OPA with bad faith when it outs canning sugar
us to over-rule decision; would donate Goys if granted- 1
allowance, and argue that by same tokan is no assurance Government
will redeem War Bonds- 1
Chain letters involving War Savings Stamps- 3
(Reported by Executive Manager for Iowa)
Songs submitted- 5
Slogans submitted- 4
Poster designs submitted- 2
Poema submitted-- 4
Skit for theatres showing superiority of bonds over cash because former
can easily be replaced if burned-- 1
Suggestion we use editorial from Quitman (Ga.) Free Press stressing fact
war is still on so why dream about refrigerators and vacations-- 1
ad.
Suggestion - use their (Seagram's) War Bond - presching moderation
in drink- "No don't want Bond money" in whiskay-- 1
Regraded Unclassified
MICROSTAT/ MICROFILM
ROLL NO.
RECISION
TRADE MARK
TREASURY DEPARTMENT
34
INTER OFFICE COMMUNICATION
DATE June 23, 1945
to
Mr. Charles S. Bell
PROM Secretary Morgenthau
During the next few months I think that you can be of
special service to me and the Commissioner of Internal
Revenue if you arrange to devote a large portion of your
time to the administrative problems connected with the
Revenue law enforcement expansion.
Joseph O'comell and
Specifically, I want you, with Commissioner Nunan's con-
currence, to advise and assist in putting into operation
adequate procedures for recruiting, training, distributing,
promoting, and transferring persons engaged to work on this
drive. You should give the Commissioner every assistance
possible on problems of space, office equipment, and related
administrative services.
I want you, Mr. O'Connell and Commissioner Nunan to
examine thoroughly the present organizational setup in the
Bureau of Internal Revenue, including the possible need for
top administrative personnel. The three of you should sub-
mit for my approval such plans for changes as you may agree
are necessary to schieve maximum effectiveness in this cam-
paign, and for the permenent improvement of the Bureau,
I an deteching Mr. Elmer Irey from his other duties to
assist, temporarily, you and the Commissioner in carrying
forward this special program of work.
Jong
JJJ
Regraded Unclassified
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE June 23, 1945
TO
Secretary Morgenthau
FROM
Charles S. Bell
palls
Subject: Current Plans for
Internal devenue Expansion
In addition to the steps already teken and reported to
you in earlier memoranda, Commissioner Numan, J. O'Connell
and I have agreed to the following procedures for expediting
the development of a top notch law enforcement organization
in the Bureau of Internal Revenue.
PERSONNEL PLACEMENT
Instructions have been issued to Collectors to release
five men each to the Special Agents, Intelligence Unit, in
their respective districts in order to form 8. nucleus of
trained personnel for the expanding investigative service.
These instructions will be supplemented by directions to
release an additional number of experienced deputy collectors
who are acceptable to the Intelligence Unit and deserving of
promotion.
Similar instructions will be issued to Supervising Agents
in Charge, Alcohol Tax Unit. Further, experienced Revenue
Agents who have shown special interest and aptitude for investi-
gative work shall be transferred if mutually agreeable to the
Revenue Agent in Charge and the Special Agent, and approved by
the Bureau.
The transfer of these men, with the exception of Revenue
Agents, shall be made without prior approval from Washington,
and the Collectors shall be automatically authorized to promote
PRECISION
TRADE MARK
MICROSTAT/
ass, PAT, OFF,
MICROFILM
ROLL NO.
36
- 2 -
from within to fill vacencies thus created and to recruit
locally to fill zone deputy collector positions at the
entrence level.
In making these transfers the transferred employee shall,
if otherwise entitled to the privilege, be transferred with
reemployment rights on the Collector's Office.
Concurrently with the recruitment of new personnel,
qualified Revenue Agents and Special Agents shall be pro-
moted in accordance with the Bureau's promotion from within
policy.
The previously established ratios for stenographie and
clerical employees shall be controlling at this time and
all offices are to be instructed to recruit accordingly.
SUPERVISION
=
In connection with the enlargement of existing and the
establishment of additional field offices, supervisors will
have to be developed and assigned to construct these offices.
Sufficient intermediate supervisors must be developed rapidly
in order to maintain en acceptable standard of production
and at the same time provide adequate supervision and on-the-job
training for the new recruits.
For the most part, the supervisors should be selected
from existing personnel in the Special Agents' offices. Con-
sideration should also be given to the best qualified employees
transferred from the collectors' offices. Procedural instruc-
tions directing the special agents to carry out such plans
will be prepared and released to the field.
Regraded Unclassified
37
- 3 -
TRAINING
The training of new recruits and newly sppointed super-
visors shell be developed by Mr. Elmer Irey, with the concer-
rence of Commissioner Nunan. The existing facilities of the
Coordinator's Office and the Bureau of Internal Revenue shall
be utilized for this program and it will be carried out in
each of the Special Agents' districts. The training program
already under way in New York City will serve 85 8 pattern
for the other Districts. In the event 8. (iven district has
no personnel available or qualified to carry out the training
program, arrangements will be made to provide training
specialists from Washington or other Districts.
CHARACTER INVESTIGATIONS
=
Character investigations of all new recruits shall be
the responsibility of Mr. Elmer Irey, and instructions will
be issued to the District Coordinators immediately, outlining
the new type of streamlined investigation that is to be made.
SPACE AND EQUIPMENT
With the exception of 25 cities to be covered by the
Treasury Department's space control staff, authority to lease
space and purchase equipment subject only to post approval
by the Buresu shell be granted each Special Agent, Intelligence
Unit, and each Revenue Agent in Charge, Income Tax Unit, 8.8
well as Collectors. This authority shall be conditioned by
the prevailing ratios employed by the Bureau.
Procedural instructions implementing this authority will
be prepared immediately. If possible, present recommendations
of the Agents for the establishment of field offices in certain
cities will be approved immediately to expedite the establish-
ment of the offices.
ROLL NO.
38
- 4 -
WORK LOAD PROGRAMMING
Tae Bureau will take immediate steps to survey present
operating procedures with a view toward msking such changes
in organization and methods as may be necessary to channel
and distribute the work of the Bureau in harmony with the
expension of respective offices. In this respect it is
agreed tant the tentative expension quota set may be subject
to change during the next few months.
INSTRUCTIONS AND DIRECTIVES
All policy directions regarding personnel, organization,
space or equipment shall be promulgated over the signature
of the Commissioner of Internal Revenue, with the advice and
concurrence of the General Counsel and the Administrative
Assistant to the Secretary.
=
Concurred in:
Commissioner of Internal Revenue
2
General Counsel
Approved:
decretary of the Treasury
PRECISION
TRADE
MARK
MICROSTAT/
MICROFILM
BOLL NO.
34
40v
25
June 23, 1945
23 JUN 1945
Dear Mr. President:
Mr. Charles Bell
Under section 18 of the Ast approved 24 My 1924 (43 Stat. 144).
establishing the Foreign Service Retirement and Disability Fund,
Secretary Morgenthau
deductions from the salary, pay or compensation of employees entitled
to the benefits of the Let shall, in effect, bear interest at the
Congressmen Compton White wants ne to see Mr. J. Richard
rate of 45 per snow. In pursuance to recomendations of the Acting
Secretary of the Treasury, approved by President Coolidge under date
Altiere. He wants - to give him a raise.
of 8 August 1927 such portion of the fund not needed for immediate
payments is invested in special 45 obligations of the United States.
will you please look over the attached personnel record
Section 3 of the ist of 24 April 1939 (Public Law 40, 76th
Congress), assended the Act of 24 May 1924 (43 Stat. 144), by provid-
and talk to me about it Monday?
ing that any Foreign Service Officer my, at da option and under
such regulations as my be preseribed by the President, deposit
additional - to be returned, at the date of his retirement, in
a lump sun, or to be used to purchase additional anouities. These
additional deposite bear interest at the rate of 35 per -
compounded on 30 June of each year.
Os 28 May,1965 the amount of $6,000, representing additional
deposite not needed for imediate payments, became available for
investment for account of the Foreign Service retiresent and dis-
ability fund. In order that there night be so less of interest to
the fund, this amount - invested in special series of Treasury
notes, entering 30 June 1949 and bearing interest at the rate of
35 per - which correspendo to the earning requirements of the
Let. It is anticipated that free time to time as additional funds
become available, investments will be made is sizilar Treasury
for the purpose entlided above.
Since the Second Liberty Bond Act provides that notes my be
Locard only with the approval of the President, I trust that the
authod of investment which bestre effective 28 May 1945 in
commention with the amount of $6,000, mosts with your approval.
Faithfully yours,
(Signed) H. Mergenthau, Jr.
The President,
The White House.
Approved:
18:a4 6/8/45
Regraded Unclassified
MICROSTAT MICROFILM
and
2"
OFFICE OF THE
ARMY-NAVY LIQUIDATION COMMISSIONER
REPLY - TO:
ID MAR DEPARTMENT BUILDING
WASHINGTON 11. D.C.
June 23, 1945
Honorable Henry Morgenthau, Jr.
The Secretary of the Treasury
Washington, D. C.
Dear Mr. Secretary:
It was very thoughtful of you to send so
a copy of your letter of June 21st to Mr. A. E. Howse,
Administrator, Surplus Property Board. Immediately up-
on receipt of it, I wrote to Governor Hurley as per copy
of letter enclosed.
Dan Bell and your staff have been of so much
help to us that I was anxious to convey to the Surplus -
Property Board my wish that they, in answering the letter,
express my centiments.
With warment personal regards.
Sincerely,
TIME
Tom his Colu
THOMAS B. McCABE
Commissioner
-
2"
23 June 1945
Governor Robert Hurley
Surplus Property Board
Sunicipal Center Building
Washington, D. c.
Dear Bobs
Secretary Morgestheu has forwarded no . copy of his letter of June 21
to Mr. House, Administrator of your Board, in which he expresses the interest
of the Treasury Department in the financial aspects of surplus disposal in
foreign countries and their general responsibility for United States foreign
financial policy. la says that 19 have been requesting their advice concern-
ing the acquisition and disposition of foreign surrencies, and other finan-
cial netters, and states that before they can " any further in advising us
they would like a specific request from the Surplus Property Board indicating
the extent of the responsibility which the Board would like the Treasury to
In Mr. reply I wish you would have his emphasize to the Treasury
that I have indicated to you our appreciation of the advice and counsel of
the treasury Department end that you urge then to continue to give us their
recommendations. You sight call bis attention to the paragraph in our Guide
for Field Commissioners marked $3. Second Offering* in which it is specifi-
cally stated that acceptance of foreign currencies will be "subject to any
emititions recomended by the U. s. Treasury and State Departments with
respect to the overall acceptable amount of any such surrency, the applicable
rato of exchange, and the provisions of conversion".
Mr. Novse night state further that you have been informed by as that
99 have culmitted to the Treasury all of our important documents and drafts
of Adde Honoires for their recommendations before submitting the to your
Board and that I have assured you this practice will be continued.
Dan Ball, Classer and Ounter have all been very scoperative, You will
resall Dan Bell's constructive suggestions made at the meeting in my office
the forepast of this vook. Our desire is to continue having these mestings
visa - have something Important to discuss, and in this nanser keep State,
Treasury, Commerce, Any, Havy, NPC and yourselves fully informed 1.8 to our
proposed plans.
I - sincerely grateful for the strong support which you and Colonel
Holler have given no in meeting all of our major problems of foreign disposal.
Sincerely,
Signed
THOMAS B. McCARE
Commissioner
43
1
20: memo
matt Connelly
says the President
acted on your
Gene Rossevelt
message right
away Connelly Called from
Olympial Wash- asked for
6/23/45 15 LE Pront Mr. FiteGorald
from were at links.
TREASURY DEPARTMENT
44
INTER OFFICE COMMUNICATION
DATE 1945
TO
Secretary Lorgenthau (For action)
FROM
Mr. Coe 100F.C. HDW
Subject: India's re quest for the lond-leasing of 208 million
ounces of silver.
1. The Treasury has been requested by the Government of India to
lend-leane 208 million ounces of silver for coinage and open
market sales for rice stabilization purposes for the sixteon
month period or March 1, 1945 to June 50, 1946, This request
for 200 million ounces 1a in addition to the 185 million ounces
alroady lend-leaned to India.
=. It is felt that the Treasury should not attempt to asses India's
noed For ailver for the entire sixteen month period in view of
Live Synamic und rapidly changing conditions in India. Instead
It in thought that we should review India's silver requirements
every three months with n. view to making periodic recommendations
covering the ensuing Unroe month period. We have discussed this
procedure with representatives of the Government of India and
they have indicated no objection to it.
3. As invitated in the attached table, the Government of India,
an of June 30, 1945, will have a little less than enough dNiver
to neet its needs during the following three month period, July
Enrough September, 1945. Unless India is given immediate
resurance at at loast three months sup lios will be forth-
contin through lond-lease during the next few months, she will
have to curtail sharply loss nao of silver OF face the prospect
of complete depletion of her silver stocks.
1. It := therefore 800 ested Dist the Treasury recommend the
invediate lond-lessing of 1:1 million ounces of silver to India,
- an amount equivalent to about times months' requirements,
5. If these 1:1 million others of silver are lond-loased, it will
bring the total of silvor loni-loased to India up to 226 million
No will still have outstanding for future determination
the remainder of India's 200 million canse 2'0 uest, 1.0. about
107 million
OK. that
RECISION TRADE MARK MICROSTAT MICROFILM
BOL NO
2"
Government of India Silver Position
As of June 30, 1945
(nillion owness)
Silver Stock and Receipts:
Net Balance on hand, March 1, 1945
26.0
Lend-lease silver received in Harch
20,0
Lend-lease silver received in June
45.0
93.0
Silver Consumption Herch 1 - June 30, 1545:
Coinage
27.6
Sales
26.4
54.0
Stock on hand June 30, 1945
39.0
Needs for three month aried June 50 to
September 30, 1915
Coinage
20.7
Sales for stabilisation purposes
19.8
40.5
)
Regraded Unclassif
PRECISION
TRADE MARK
MICROSTAT
ASG. PAT. OFF.
MICROFILM
ROLL NO.
46
- 2 -
47
25
Nevertheless, this Department certainly could have
June 23, 1945.
no objection to the consideration of the matter by
the Congress. I an sure that there are no valid
grounds against continuance of the reporting require-
monts during wartine until the evasions which they
My dear Mr. Ludlown
were designed to meet have been overcome.
Reference is made to your letter of Juno 6, 1945
In the belief that you may find it interesting,
conserning the instructions relating to reports of
I enclose a copy of & statement concerning a letter
currency transactions recently issued by this Depart-
about the reporting instructions which was recently
mont.
sent to all banks in this country. In view of the
considerations expressed in the letter, it seems
with respect to the first of your specific
clear that the reporting requirements cannot be 70"
questions, I wish to state that the instructions were
garded as an undue infringement upon relationships
issued for the purpose of furthering our efforts to
between financial institutions and their clients.
stamp out serious ovils of tax evasion which have
No one who is honestly fulfilling his logal obliga-
arison under wartins conditions. It is our intention
tions to his government need have any consern that
to withdraw the instructions at the carliest moment
his affairs will be interfored with through the
consistent with this purpose.
operations of the reporting system. Moreover, as I
have already indicated, this Department has made
Secondly, it should be noted that although the
every effort to hold the administrative problems
instructions do not expressly specify the ainham
involved in the reporting requirements to a minimum
size of transactions to be reported, they indicate
which will not unituly burden financial institutions
that, except in unusual circumstances, only trans-
or the government.
actions involving $1,000 or more of currency in denomi-
nations of $50 or higher, 02" involving $10,000 or more
Sincerely yours,
of currency in any denominations need be listod. This
Department intends to follow a comon senso policy in
administering the reporting requirements and it hopes
that financial institutions will be guided by sinilar
- * - 10.
considerations. It would be an undue administrative
burden on both reporting institutions and this Depart-
Honorable Louis Ludlow
ment if reports were mado of insignificant transactions.
House of Representatives
Thirdly, since existing statutes amply authorize
the issuance of the instructions, this Department re-
gards special legislation on the subject as unnecossary.
Enclosure
14 June 1945
Regraded Unclassified
June 23, 1945
HM Jr had me tell Mr. White that he
48
should check Mr. DuBola' files here to
00 if he could find out what he had taken
1th him, and If he couldn't find out here
to write to DuBois.
RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO.
49
June 23,1945
Harry White
Secretary Morgenthau
I have just read Joe DuBois' letter from Paris.
I note that he says he has a memorandum which he has
been showing various people. Do you know what that
memorandum 1s? I wish you would get a copy of it and
show it to me as soon 0.8 possible.
50
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE June 23, 1945
TO
Secretary Morgenthau
FROM Mr. White
This refers to your note of June 23rd, asking about
the memorandum which Joe Dubois stated he had been showing
various people.
I don't know what menorandum he refers to. I have
spoken to Mr. Coe and Mr. Giesser; we all feel it must be
some of the chapters of the German book which I think he
took with him along with some other material on Germany.
If you like, we can ask him to specify what it was
that he referred to.
RECISION
MICROSTAT
MICROFILM
ROLL
NO.
52
51
- 2 -
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
0
Seven new assignments were received by the Procure-
DATE 23 JUN 1945
ment Price Adjustment Board, and ten cases were disposed of
involving determinations of $775,000.
TO
Secretary Morganthau
An inquiry WSS received from the Philippine government
FROM
Charles S. Ball
prull
in regard to Procurement furnishing school supplies to it.
Most of an oarlior order for the Philippine government amount-
ing to about $180,000 HAS been loaded on board ship.
Purchases for the week ended 16 June 1946 effected
by the Procurement Division totaled $8,858,002.95 of which
The Office of Surplus Property, Department or Commerce,
$7,000,000 was Land Lease; $150,00 was USEA, and
was requested to discuss with the Surplus Property Board en
$405,008.93 was regular.
amendment to its Regulation No. 2 to Incilitate the Issuance
or surplus property through the stores and Issue warehouses
Unusual requisitions Included 281,000 wool blankets
of the Procurement Division.
for civilian relist by UNICA 10 the amount of $976,500;
3,340,000 pounds of truck tires and tutes, and tractor
A case nistory 18 being propered covering all commodities
tires and tubes for meeting civilian needs in operations
purchased under authority of Public 117, approved 7 June 1939.
relating to =ilitary occupation or conquered territories
This report also compares the Army and havy Munitions Board
and rodeployment of allied troops In the asount of
tentative specifications with those used in making purchases
$1,540,000; 20,000 pairs of pliers for Australio In the
for the current stockpile.
0
amount or $15,850; 120, cotton dusters for combatting
malaris mosquitoes In flooded areas of the Metherlands in
In connection with the Lend-Lease Program, the du Pont
the unount of $1,508.40; 10,590,000 pounda of raw wool for
Company has reported the rd-use of 37,080 additional bobbins
the Belgian government 111 the amount of $4,342,021.26;
returned from the United kin dom with resultant envings of
1,605,000 pounds of rayon tire cord fatric for the United
$14,077.55.
Eingdom In the amount or $1,256,000; 25,000,000 pounds of
cotton fabrice for China to be used In barter transactions
There were two mostings of the Contract Termination
for outaining supplies for Chinese troops. 9100 are now
Board et which time four cases wore recommended for settle-
being solicited for 800,200 pounds of Cancare Sugrada, for
ment.
making pharmaceuticals 10 the United kingdom, in the amount
or $66,950.
The last report on the Seventh War Loan Drive submitted
to the Treasury on Le June showed Procurement Division
Unusual purchases included 350,000 pill boxes for
(whohington Office) 109% over the top. The Field offices
use by civilian hospitale in Italy In the amount of $837.60;
gained and the report shows them 116.108, making an overall
2 loud speckers with amplifiers, associated microphones
for Procurement or 126.1 .
and cable for the Department of Justice In the amount of
2,132.06; 30 sixty watt portable F.M. stations in disguised
trunk form for the Department or Justice In the amount of
$21,000.
III
Regraded Unclassified
LEAS-LEASE
TREASURY DEPARTIENT-PROCUREMENT DIVISION
STATEMENT OF ALLOCATIONS, OBLIGATIONS (PURCHASES) AND
DELIVERIES TO FOREIGN GOVERNMENTS AT U.S. PORTS
AS OF JUNE 16, 1945
(In Willions of Dollars)
Administrative
Miscellaneous
Total
U.K.
Russia
China
Expenses
Undistributed
Allocations
$ 5947.0
$ 2284.3
$ 2303.4
$ 159.3
$
19.6
$ 1180.4
Requisitions in
$ 176.6
3
47.2
$
8.2
$
24.2
-
$
97.0
Purchase
Requisitions Not
$ 117.3
$
22.7
$
10,0
$
26.1
-
$
58.5
Cleared by W.P.B.
Obligations
$ 5027.0
$ 2145.5
$ 2217.5
:
121.5
$
19.2
$
523.3
$
(Purchases)
Deliveries to
$ 3983.7
$ 1998.3
$ 1733.3
8
30.4
-
$
221.7
Foreign Gov'ts
at U.S. Ports
e
4b Deliveries to foreign governments at U.S. Ports do not Include the tonnage that is either
in storage, "in transit" storage, or in the port area for which actual receipts have not been
received from the foreign governments.
RECISION TRADE MARK MICROSTAT MICROFILM
ROLL NO.
U.N.R.R.A.
TREASURY DEPARTMENT - PROCUREMENT DIVISION
STATEMENT OF ALLOCATIONS , OBLIGATIONS (PURCHASES) AND
DELIVERIES TO FOREIGN GOVERNMENTS AT U.S.PORTS
AS OF JUNE 16, 1945
(In millions of dollars)
Administrative
Total
U.N.R.R.A.
Expenses
Allocations
$
201.0
$
200.0
a 1.0
Requisitions in
Purchase
:
39.29
E
39.20
-
Requisitions not
cleared by W.P.B.
co
8,03
$
8,03
-
Obligations
(Purchases)
8
181.23
- 120.47
- .76
Deliveries to
Foreign Dov'ts.
at U.S.Portae
:
3.58
,
3.50
-
«Deliveries to U.N.R.R.A. at U.S.Ports do not Include the tonnage that la either
in storage, "In transit" storage, or in the port area for which actual receipts have
not been received from the foreign governments.
54
Regraded Unclassified
RECISION TRADE MARK MICROSTAT/ MICROFILM
ROLL NO.
55
FORMATORY
BUY
TREASURY DEPARTMENT
MAR
FISCALSERVICE
Washington
FISCAL ASSISTANT SECRETARY
June 23, 1945
TO THE SECRETARY:
In response to your oral request, I as sending
you herewith the weekly report relating to payments
to veterans.
VETERANS PAYMENTS
UNDER
G. I, BILL OF RIGHTS
Week ended June 15, 1945
Number of
Cumulative
recipients
Amount
Number
Amount
Unemployment
benefits
29,307
$592,859
$23,659
$16,479,128
=
Self-employed.
2,913
286,618
26,115
2,731,749
Students'
subsistence
allowances
o
640
48,408
11,849
710,259
Tuition and
fees for
students
di
.....
1,170
116,824
3,910
418,789
Total
34,030
$1,044,709
865,533
$20,339,925
&
$20 a week; four weeks' allowance for each month of
active service, not to exceed 52 weeks.
À
Difference between monthly earnings and $100.
050 a month without dependents; 475 with dependents.
Limited to $500 per annus.
Regraded Unclassified
56
CABLE TO HOOLELLARD AND KATZEL, MRS, FROM O'DEYER, WAR REPUGES
BOARD
Reference your 3256.
Mr. Marl Harrison and Board approve Katski's se-
companying Harrison on forthcoming survey trip. Penrose
also agrees but hopes this assignment for Katski will be
terminated within three months.
Harrison will communicate with Kataki as soon as
he arrives in Europe. As soon as itinerary is known, Penrose
=
wishes to be advised.
THIS IS NEB NEW CARLE NO. 537
11:20 a.m.
June 23, 1945
Miss Ripple (for the Secty). Cohn, Hodel, Hutchison, McCormack, Files.
Flive 6/23/45
57
I
COMMANDER THIRD FLEET
June 24, 1945
My dear Mater Secretary:
I an very appreciative of your letter
of the eighth of June 1945. It is good to know
that my small effort is some help to you in the
7th War Loan Drive. May the fine work of you
and your department continue unabated.
Sincerely yours,
W7. Habey
W.F. HALSEY,
Admiral, U.S. Navy.
The Honorable Herry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, 25, D.C.
RECISION
TRADE MARK
MICROSTAT/
MICROFILM
ROLL NO.
58-
59
- 2 -
June 25, 1945
9:15 s.m.
MR. OLIPHANT: There are one thousand three hundred
and thirty-two Deputy Collectors' posts of du'y.
INTERNAL REVENUE
H.M.JR: But how many on the kind of things they do
Present: Mr. D. W. Bell
in each Collector's office?
Mr. C. S. Bell
Mr. Oliphant
MR. OLIPHANT: Inside the office, you mean?
Mr. O'Connell
Mr. Irey
H.M.JR: Yes.
Mr. Pehle
Mr. Tickton
MR. C.S. BELL: They have a Special Agent and in
Mr. Hass
many cases about fourteen Collectors.
Mr. Sherwood
Mr. Atkeson
H.M.JR: No. I'll tell you what I want. Take
Baltimore or take New York. They have got to collect
miscellaneous taxes and there is a fellow, I take it,
H.M.JR: Good morning.
in Baltimore that is & head of Miscellaneous Taxes.
MR. PEHLE: Good morning.
MR. C.S. BELL: I don't think there is.
H.M.JR: Now, where is the Acting Commissioner?
H.M.JR: It doesn't make any difference. There are
miscellaneous taxes. Start at this end with Captain
MR. O'CONNELL: He should be here in a minute,
Bliss. I want to take Misceilaneous Tax. I want to
because he left his office about fifteen minutes ago
know how many men there are in Washington, how many
and he will be here with Mr. Atkeson. I don't know
men there are in each place. Now, whatever the Division
where he is, but he should be here.
is for Captain Bliss, how much money is he collecting in
each Unit, see? And how far is he behind? And then I
H.M.JR: Well, anyway, Commissioner or no Commissioner,
want to take the normal income taxes. How many income
this is what I want, and Internal Revenue is going to have
tax returns are there, what is the backlog, what is
to give it to no, see? George can help ne get started,
each office doing, and how many people are there on &
but it is perfectly ridiculous to run his shop like--
monthly basis? In other words, I want to take each
Internal Revenue is supposed to collect how many dollars?
important segment of this work. I don't care whether
you a tart in Washington or at the bottom. I don't
MR. HAAS: Forty-seven gross.
want to know about just penal cases, but I want to
know, If I have to go back to my original example
H.M.JR: How much?
of Mr. Grant of Chrysler, who knew each night or each
morning what every single sales agent--down to
MR. HAAS: Forty-seven gross.
accountants--how many cars he sold and how many he
had on hand, and I am sure the treasurer's office
H.M.JR: And not know what is going on. Now, what
knew how much money he paid and how much money he
I want, George, is this, and I want to start in each
owed.
field office, see, each Collector's office, sixty-five
Collectors' Offices. I don't know how many branches
there are.
Regraded Unclassified
RECISION
TRADE MARK
MICROSTAT
PAT.
OFF.
MICROFILM
ROLL NO.
61
60
4
- 3 -
This is what I want the Bureau to do, and this is
Now, Mr. Grant, in his heyday, could go into 8. room
an order, gentlemen. I will be reasonable about getting
and see how many cars he had on the floor, how many
you started, but I think once you get--if you don't
were sold on that day, how many were on the way, and all
hear me, Mr. Sherwood, come up here.
the rest of that for one district. Now, along comes
the questi on from Senator Willis of Indiana, and he
MR. SHERWOOD: I hear you quite well, Mr. Secretary.
asks me, Why haven't you examined Mr. Hartford's
return for 1942?" Well, the only answer I get and
H.M. Mr. Hans will help you and everybody else
the only answer I can give him is, We have got to
will help you, but I will go back to the example of
compare 1942 and 1943.
Mr. Grant who was the greatest sales manager in the
world, who WRB Vice President in Charge of Sales for
KR. O'CONNELL: No, that was 8. partial answer.
General Motors, and every morning Mr. Grant would
go into a room and for every single agent in the
H.M.JR: That's the answer you gave no.
United States he could tell how many cars he sold
that day, and how many he had on the floor, and
MR. O'CONNELL: No, the meno which I gave you on
how many were on the way to him. In other words,
Friday pointed out the chronology of it. (Attachment
he was able to keep track of his business.
A.) The simple answer is we are two years behind in
that work.
Now, I don't like to go back too much on back
stuff, but last fall I was suddenly told about six
H.M.JR: But nobody told me that.
million checks that had to go out. I think Mr.
Sullivan told me--he isn't here--that he had to get
MR. O'CONNELL: It has been common knowledge for
them out on time. I may not be correct, but at least
five years, Mr. Secretary.
I think I an correct. Then, suddenly they found they
couldn't get them out. I was under the impression
H.M.JR: Oh, no, no, no! I will show you . memo
that the examination of income taxes--I think I have
quite to the contrary.
nemos in my file which say that each year we are
current from the year before. I think I can go
(Mr. Sherwood and Mr. Atkeson enter the conference.)
back to Mr. Helvering's time, and nobody told me
that we are two years behind, see, until I get
H.M.JR: Good morning, gentimen.
8. letter from Senator Willis asking me why Mr.
Hartford--but I an not here to scold you this morning.
I will show you 8. neno which shows that each year
I en here to make some suggestions, and try to be
WRS current.
helpful, but I am going to be very, very insistent
that I get what I ask for, see?
MR. O'CONNELL: I would like to see one of those.
Now, they tell me that Mr. Atkeson is trained to
H.M.JR: I will show you one from John Sullivan
do this and can do it very well. This is his business,
saying that we are current each year.
and if it isn't, when I get through he can tell me so,
but that is what I thought he was hired for. Kr. Hass
MR. O'CONNELL: Bill, you came in in the middle
has done this for me, but I was in a for worse jam in
of it.
Farm Credit when it was a matter of saving people's
H.V.JR: Well, I will do it again.
Regraded Unclassified
RECISION
TRADE
MARK
MICROSTAT
OFF.
MICROFILM
ROLL NO.
62
M-1
63
5 -
- 6 -
forms, getting them from each other. But I can see
the handwriting on the wall. I haven't been in
Washington for twelve years and held a job satisfactorily
in order to get information in consultation, can Mr. Hass
the schedules along the lines you're speaking about. Now,
MR. ATKESON: Yes, Mr. Secretary, We have been developing
to two Presidents without learning something, and I
an going to insist that I know what any President of
a corporation knows, where I stand. I want to know
all and Mr. Tickton, who have indicated an outline, workwith us ?Ispent
lines with the idea of getting them started coincidental
day yesterday attempting to develop schedules along these
each Division, take Miscellaneous Taxes, and start
there. I don't care whether you start st the bottom
with the first week of the new fiscal year. Now, It's
or whether you start at the top, but start some place.
going to push us, of course, to get them out and in effect
Captain Bliss has so many men, he has so much back-
at that time, but I think we can do that. It's quite a
log, he collected 80 much during the month of June;
during the month of June he had so many people at
what you are driving at and we'll do everything in our
little schedule and We are aware, I think, of exactly
work; each man collected so much money during the
power to meet It.
month of June; he added so many men or he lost so
many men, and we start this the first of July. We
H.M.JR: Do I make myself clear?
can start on Alcohol Tax and do every single Division
that you have got. I want to know whot the head of
MR. ATKESON: Yes, sir.
that Division did, and I would like to have whatever
the Units are. If it is sixty-five Collectors' Offices,
H.M.JR: I don't knowas much about the Bureau as I
you break it down to that. I don't know, but I want a
should, but I'm going to learn more about it, and I'm
plan.
not going to scold. I want to be helpful, but from
here, in my anxiety to get the Bureau the money which
If you want to break it down on a production basis
ar. O'Connell and Mr. Nunan said you couldn't get in
of the sixty-five Units--you people know you can come
back after I told you what I want, but I want to be able
ballyhooing these things, I've got a blank check from
order to carry out our responsibility and through my
to go across the hall once 8. month, and if necessary, sit
down there all day with Commissioner Nunan and the rest of
Congress for you. Nom 1 wint to make good. I want the
Burcau to make good. 1 want the Bureau to feel it's an
you and look this thing over, the work of collecting fifty
billion dollars and see whether we are gaining or whether
integral part of the Treasury, and that my only interest
we are losing, how many people we put on it, how many
people we lose, and whether the men who are hired to do
and I did It with a heavy hand--to let it be known that the
is the reputation of the Bureau. I took the pain Friday--
it are doing something else. So, you can say to me, Vr.
Congress of the united States was trusting the Bureau to
make this investigation of hartford-- Nunan-Hartford-
Morgenthau, you made us take the nen off this job and do
Roosevelt--because the papers were full of the fact that
that." Then, it is my fault unless I change.
Congress was Investigating. I came to the Bureau's
But I don't want to hear . year from now, "We have
rescue out of my office. Did you see it, Mr. Sherwood?
another Hartford case. The reason we didn't examine
Hartford was because you made us put it on so and so."
MR. SHERWOOD: I saw it,Mr. Secretary.
In other words, I want to know once a month where the
Bureau stands on & straight basis breaking it down to "
small a unit as is practical. Mr. Atkeson, can you do
but I don't want it thought from one end of the country
H.M.JR: Well, somebody else should have come to it,
to the other that the Congress of the United States
that?
doesn't trust the Dureau.When things get hot I come to
the Dureau's rescue, and I wish the people down the line
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in the Bureau would know that I'm their friend. I
don't know whether you were in the Bureau when Senator
people for three months because he wanted one nan fired.
an analysis we've been making on a. three-months basis.
MR. SHERWOOD: Complete support, yes. We do have
McKellar held up the pay of eight hundred some odd
I stuck by that fellow and I've also stuck by the Bureau,
we do. is completely, entirely different from
which Now, Dr. Atkeson has been carrying on an operation
but I've not to know my task, and if we're two years
behind we've got to do those things which are most
tions. It gives & breakdown of individuals to everything corpora-
I should like Mr. Tickton to examine that
important, and maybe I'm wrong, but I think we can go
ahead on the whole front, but 1 want to know, 80 that
80 anyone far else who may be designated. It's completed, or and
as the Bureau is concerned--
you don't come to me six months from now and say, "Well,
we did the black market; we let everything else go, and
it's Morgenthau's fault."
it's Haas knows after twelve years how I like things, and that
H.M.JR: They've got to talk with Atkeson, because
MR. SEERWOOD: Of course, Mr. Secretary, in the
I like. not very difficult to present then to me the
Hartford-Roosevelt case there was no examination of
other But as I understand it, Mr. Atkeson is doing way
any 1942 returns because the tax for that year was
Commissioner Nunan, because what I'm asking is
work, and I hoped you would talk it over with
eliminated because of the forgiveness and we had no
eighteen-hour a day job. He's going to have to an build
1942 tax--we had a 1943 tax job. The 1942 returns
had to be examined with the 1943, and no examination
make him a representative on the Hill?
up his staff, and why take a good statistician and
was conducted for 1942, so 1942 and 1943 became
available to us in 1944 of March.
and is spread out too thin, and I think he has over it,
MR. it SHERWOOD: I think the Doctor has been
MR. D.W. BELL: So you're not two years behind?
given the kind the kind of job he wanted. I think I can been you
MR. SHERWOOD: No, we're just now working on the
of job you want if I'm given the opportunity. give
1943 year, which is the only individual tax year we have.
because wanted your help to accumulate this Saturday and
H.M. JR: Because of this meeting this morning I
H.M.JR: Well, Mr. Helvering gave me this impression,
when you people come in tomorrow, you'll Sunday, be
and he was 8. very honorable fellow--of course he hasn't
been here for a couple of years--we always clean up
he has don't know how big 8 staff Atkeson has.
prepared. see, but I I've made it clear in my own mind what I more want,
within twelve months.
on got to get a big enough staff. I want this But
MR. SHERWOOD: I think, Mr. Secretary, that needs
Okay, a monthly Joe? basis, and he ought not to do anything thing else.
this qualification. We're making two hundred fifty
examinations less in these years than in prior years
he think is it would not be right to take Atkeson so, off the work I
MR. O'CONNELL: Okay, after a week or because
because of the lack of personnel. we complete all the
work we can do, and--
Mr. that, Bill, ties very closely in to the sort of thing
doing with the Ways and Means Committee, because
H.M.JR: Can 1 count on yours and Mr. Nunan's
Atkeson is very definitely concerned with.
support on this?
Atkeson can give this thing full time.
H.M.JR: Well, George will help him all he can until
it if monthly this weekly now, report--if or-- you still want that. Do you wondered want
MR. HAAS: Tom is . little confused because he
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"We haven't got the men", or The have the men," this
H.M.JR: I want to go on a monthly basis right
man or that, no we can run it like a business. It's
away, a monthly basis, but I'd like to have--I'n one
the biggest business in the world, and there im't
of these thirteen period, four week fellows. Would
any other business in the world that can't say where
that be all right with you?
they are 88 of last night. Okay, gentlemen?
MR. ATKESON: Yes, sir.
MR. ATKESON: Yes, sir.
H.M.JR: Because a monthly thing is a bad report.
H.M.JR: I'll see you again tomorrow at three.
Would that be more difficult?
You come in and we'll develop those plans, if you
will, please.
MR. ATKESON: I don't think 80.
H.K.JR: I want thirteen reports of four weeks,
otherwise--
MR. ATKESON: It's not comparable.
H.M.JR: Thirteen reports of four weeks each.
MR. ATKESON: As a matter of fact, 1 think it would
C
be more convenient, because We do keep our mailing or
assessment list on a weekly basis ending every Friday,
so it will all tie in very nicely. I would like to
say, Mr. Secretary, that the staff we have now is
working not only on this program, but on other programs
for Mr. Blough, in connection with the post war tax
plans. I think they are all tied in together, and I
would like to utilize the services of the same staff in
compiling the information that you're interested in.
H.M.JR: Well, look, I'm giving you a job through
Mr. O'Connell, through Commissioner Sherwood, to you.
Now, you rentlemen know what I want, and I insist on it,
and I'm going to get it, and you fellows have to work it
out so I get it, and I think I'm doing you & service
by insisting on it. But I want to know 80 I can get--
I can't remember the name, Head of Alcohol Tax, Charles
Berkshire--Berkshire, and say, "Look Berkshire, it's
wonderful, or, "It's terrible.' Get the head of
enforcement on something else, "This is good, or
"This is bad. Now, what's the matter with It?" You
see? So he can sit down and take each of these sections
and have the cold facts, what they're doing, and if they say,
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60
ATTACHMENT A
June 22, 1945
- 2 -
Secretary Morgenthau
Joseph J. O'Connell, Jr.
There follows a more detailed statement as to the
chronology of events and the character of the investigation
under way.
This refers to your inquiry about the article in
this morning's Times Herald to the effect that in-
On June 15 Mr. Cann conferred with Messrs. Doughton,
vestigation on the Roosevelt-Hartford loan was being
Knutson and Stam, advising them that the Bureau would
held up by the failure of the Bureau to submit necessary
like to proceed with 8 thorough investigation before
information to the Congressional Committees.
formally reporting to the Committee and asking that they
be permitted to get all the facts. This was agreed to.
This report is based on information obtained from
Mr. Norman Cann who is heading up the field investigation
Immediately, one of the key men of the New York office,
which the Bureau is conducting under arrangements discussed
Mr. Olson, was called to Washington and directed to undertake
with Chairman Doughton and Representative Knutson of the
an investigation of Mr. Hartford's 1942 and 1943 returns.
Ways and Means Committee.
The agent in charge at Dallas was instructed at the
The investigations are proceeding as rapidly as possible
same time to proceed with an investigation of Elliott
in New York, Texas and Washington, D. C. The Committee
Roosevelt's returns, and, in addition, to investigate the
members have expressed anxiety to get the completed reports
radio company which was the subject of the loan (Texas
as early as possible but at the same time they have an under-
State Networks, Inc.), the stock of which was pledged as
standing of the scope of the examination required and to
collateral for the loan. The Texas agent was also directed
Mr. Cann's knowledge have not expressed any dissatisfaction
to examine into the properties reported to have been set
with the Bureau's efforts to date. The orders to the key
aside in trust by Elliott Roosevelt.
nen in the field have been to the general effect to proceed
with all possible dispatch, but at the same time strive
The New York agent WES also directed to investigate
earnestly for an adequate report which will give sound
the new radio company which was to be organized, known as
support to & decision which must be justified not only
Transcontinental Broadcasting Company, Inc., which required
in Congressional inquiries, but also possibly before the
the securing of information at sources in Pittsburgh,
courts in case of litigation.
Delaware and Texas.
Apparenti y Mr. Stam reported yesterday to members of
At the same time a further investigation was directed
the Joint Committee. We had no representative present at
in Washington, D. C., with respect to the four thousand
that time. Mr. Stam did advise Mr. Cann in advance of his
dollar check reportedly paid in settlement of the bad debt.
report that he would recommend that the Committee await its
detailed investigation until the completion of the Bureau's
Mr. Cann has been in daily communication with both
report. There was no indication of any criticism " to the
New York and Texas in directing and expediting the
progress being made by the Bureau.
investigation.
The New York investigation of Mr. Hartford's returns
is proceeding satisfactorily and is expected to be concluded
next neek. Kr. Hartford has been cooperating with the
agents in furnishing all requested information.
Regraded Unclassified
:
61
. 3 -
The Texas investigation relating to Elliott Roosevelt's
returns has encountered greater difficulties, because of
inability to locate all necessary records, the fact that he
maintained several bank accounts, and the variety of tax
advisers who participated in making his returns.
When the report is in order it is intended to take the
matter up with you before submitting any information to the
Committee.
=
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63
June 25, 1945
9:30 0.00
2
GROUP
There are only usually the three wire services that come
Present: Mr. D. V. Rell
up to ask what in doing, if he knows anything.
Mr. Gaston
Hr. C. S. Bell
H.K.JR: I know, but Ganble does that in the afternoon
Mr. Penle
and he does it himself. He doesn't designate somebody else
Mr. Hass
to do it, and he gets results, and I thought the way he
Mr. O'Connell
handled that story the other day YIS 5 terrible. Anyway,
Fr. Coe
I would like you to go up there this morning, will you?
Mr. White
Mr. Luxford
MR. FUSSELL: Yes.
Mr. Partelt
Fr. Fursell
H.W.JR: At ten o'clock. And also I went to know
Yrs. Klotz
If every day ONI is in on this. I don't see why we
should have OWI sitting in ss 8. spy every norning they
meet. I don't mind them coming to my press conference,
B.W.JR: Good morning. hon, look, Fussell, before
but I don't know mhy they should be running all over
you sit down, to you can watch the time. Just sit down.
my building. Does anyone want to make any comments?
I would like you to sit in on this sc-called ten 'clock
press conference starting with this norning that Charlie
VR. GASTON: No. I didn't think Cherlie was holding
Shaeffer has, see? After ail, over at the White House
press conferences. I remember going into that once
when they have E press conference, Mr. Rose has it even
before and I didn't go up to see, but I didn't understand
if the President doesn't have it, see? And I don't know
he ves holding any press conferences. He shouldn't hold
what Charlie Shaeffer does et ten o'clock. I never could
any, in my opinion.
find out. Certainly the suggestions I made about the
Hartford thing he handled with 6. sledge hanmer, and I
JR: Hell, anyway, he does every morning at ten
would like you to 20 up there this morning et ten o'clock
o'clock, and he doesn't know what is -oin : on, and when
if be le going to have one, md just sit in and listen,
he does I don't like the may he handles that. will you
looking formard to your holding thore instead of his
tell him that, please?
holding them.
KR. FUSSELL: Yes.
I don't know how many press nen you have around. You
should have Cherlie Shaeffer there and Irving Perlmeter
H.M.JR: Now, the other thing, Harry, I had Monnet
there. There is one at Procurement. I'd have him in.
in yesterday for an hour and B. helf, and I don't know--
I don't know how many press men you have around Treasury,
naybe you and Coe and your people--I want Hoss to know what is
but I think it--Shaffer doesn't know it. It v.s.a denon-
going to Europe under 3-C. Do you know what is going
strated the other day he doesn't know. I tried to keep
to Europe?
him informed. I told him, "If you don't know, It is your
job to come to see me, if he is going to hold 5. press
MR. COE: The get a brief report on the requisitions
up there every day at ten. I think it is just ridiculous.
which are going through. Substantial volumes of stuff
have been going through.
KR. FUSSELL: It isn't quite as ornate, Mr. Secretary.
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H.M.JR: Well, do you know? Does White know?
H.M.JR: I think it is very important. I went to
know whether it is on time--whether Western Europe is
VR. WHITE: I know what the original request WES,
going to be able to go through the winter or not. The
but I don't know how many they filled. I don't follow
only may I can find out what is going on, and I would
it.
like you to--either you can consult with "hite or with
Coe--now, I don't know when this 3-C thing started,
H.M.JR: Do you know how much cotton and how
how much they get--if It is 3-C. An I using the right
much steel?
language?
MR. WHITE: I don't follow it.
ER. COE: Yes.
H.W.JR: Don't you think it is important?
H.V.J.: But there la B. real flow going. For
instance, he tells me--maybe somebody knows this--
ER. WHITE: Only if you are interested in E special
but Cronley has issued all directive saying they can't
problem, because the way we decided to begin with what
have any loconotives after the 1st of January of
they were going to get and which organization would go about
this your, or any of that stuff.
it and are they getting it. If you are interested in
their getting more or less, we will follow it.
MR. COE: There has been e controversy on that.
I didn't know he said they couldn't have any.
H.K.JR: Well, we spend all the time arguing about
what they get and then we don't follow through to see
H.L.JR: And I think it is very important that the
whether they get it or not, and it has got e direct
Secretary of the Treasury does know this, because if we
relation on the finances of this Government. What I
are going to take the position that I am Chairman of this
would like to have, George, is this: lie reeled off
Advisory Financial Committee on Bretton Roods, then I
when be sould get it. I would like for each one of
have got to know what the United States Government is
these countries, see--you get the figures from Coe--
doing to aid these countries, and where we are fel ling
I would like to be able to go in and see that France
down, and I don't know.
got, I think, forty to fifty thousand tons. This
month was an enormous amount. On the top would be
MR. D.N. BELL: Why isn't the whole lend-lesse program
what they have been allocated to get for this calendar
important and not just 3-C? The whole thing is cash.
year. I think it is for a calendar year, and hom much
That's what =e are interested in, in the role of
of the they are paying for themselves, and how much
financing.
of it is under lend-lease.
H.E.JR: All right. Wouldn't you like to know?
Now, I think it is of real interest because ne have
spent 8. lot of time getting it and then we sort of kiss
D.W. BILL: That I know in a general way is the
It good-bye and don't know whether the thing works or
over-all picture, because it is part of our estimated
not. The don't know whether--
cash position that we do not break it down as to 3-C.
MR. WHITE: Largely until I pick it up, but we haven't
felt it is our responsibility or interest in seeing they
get it or not, but if you think it 18--
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H.M.JR: Well, let's take the whole lend-lease and
break it down.
B.N.JR: Well, it sould be nice to know what is
going on. I have got to go to a Frenchmen to find
out.
MR. HAAS: Geographically?
B.V.JR: Geographically, financially, and anything
VR. WHITE: Well, your range of interest can be as
else you can get.
broed no you ment to make it, but if you are going
to take over the task of finding out how each of these
M. D. BELL: By categories, major categories?
foreign countries is doing, what the supply situati on
is, that can he done. That's quite 8 bit to chew off.
H.M.JR: If they buy six hundred locomotives or
nine hundred locomotives, that is important, and then--
B.E./R: Well, the figures are available.
I completely forgot that & big bur.ch of this stuff
we buy through Procurement.
MM. WHITE: Oh, yes, I mean, some of these can very
easily be made available.
MR. PERLE: On that stuff, Mr. Secretary, I arranged
while I was down there for all the requisitions, particularly
H.M.JR: I do want to know, because I think that
to come over to Frank's and 8 summary of them 80 he knows
the whole thing--fi I W&E interested in winning the
what is going on. The did tie that in.
nor in Europe but now I en interested in peace in
Europe. In order to have peace in Europe me have got
H.M.JR: Well, anyway, I want a statistical picture
to have these people supplied in such a way that they
once a month. I want to sit down once 8 month, and if
can P.O. through the winter without 8 revolution. Now
anybody is interested they can alt down with ae, eno if I
is the time to find out what they are going to have
am going to be the top fellow in this international
next October, and I want to know.
financial picture, I want to know what is going on,
and we might as well train for it. They tell ae that--
MR. VLITE: Then the specific interest, I gather,
make n. note of this, Mrs. Klotz, that e fellow by the
is that you went to expedite shipments.
name of Potter that just came back--he is the head of
the Combined Coal thing, and they have got Hg plans
H.E.JR: I didn't my that. I went the facts first.
on it, that the President had # lot of cables over the
I want the facts first, Then, if they are not getting
week-end.
then, I 621 in 6. position to bring it to President Truman's
attention. But until I and the fects, I can't do
There is McCloy and will Clayton and Crowley about
anything about it, but it has E direct effect on our
getting coal,and this coal commission, what they are
dollar position.
going to do, and what they are going to do to start up
the Ruhr and the Saar.
Okay, Fr. White?
We sees to be completely left to one side on all of
ER. VHITE: Sure. Tf you ore interested in that,
this stuff.
they can easily supply you with that.
VR. COE: lie are on most of that supply--on most of
B.M.JR: I should think you would be interested,
those supply matters.
of all people. What?
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68
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H.V.JR: I mant the whole picture, what me promised
thes, what they are getting, end what they are not getting,
VR. WHITE: Could be. I don't think the dollar
and after I have got the picture I can decide what I want
to do. I think the people in the Treasury should know.
position--
MR. COE: There is too much to follow.
KR. PEHLE: Can those figures include military
vr. HITE: ...has any significance. You can use It
lend-lease or are those secret figures?
as on excuse if you are interested in seeing Prence
gets what you promised to give them.
R. WHITE: They give aggregates.
H.M.JR: Well, I spend weeks on the thing on What's e
counittee,anc then I ED left in the vacuum.
the sense of drawing these things up?
KR. PERIE: Because those are interesting.
MR. WHITE: You spent weeks on the question 68 to
whether or not you want them to get certain things in
H.V.JR: I think no can get them.
the light of what they had in cash, whether they should
also agreed at the time that you would re-examine it
get it for nothing, whether they should pay cash. You
VR. PENLE: In the sense we send in continued
at sometime in the near future whether you wanted to
0
military stuff.
change your mind. But, there is justification needed,
Mr. Secretary. I don't think you are offering any.
If you are interested in that, sure.
B.V.JR: Coe can find out. Do you suppose there is
such a series of charts in existence?
H.K.JR: I an interested.
M. D.W. HELL: There is E. pretty great lend-lease
VR. WITE: Yes. It may not 20 into 8.5 much detail
report sent to Congress every quarter.
&8 you want, but they go to--you can get then geographically
and you can get them by large categories to the larger
MR. WHITE: Every three months.
countries. They are printed every three months, and I
an sure that FEA must have very detailed data.
H.M.JR: I em interested, and I want it set up.
The may I want it, George, is statistically, once a
MR. COE: They don't have a breakdown of the kind
month, if possible.
which we want on the financial side. They have never
been able to do it. They have a regular commerce figure.
VR. WHITE: The only country you have been interested
in bitherto in knowing what they have got and whether it
Then they have figures showing what is spent which
has been kept up to schedule, NO: Russia, and you used to
don't jibe with the export figures.
receive it, and recently you decided it wasn't 5.5 scute.
Te don't supply it. Tie have It. But If you are interested
In the other countries, it can be quite easily provided.
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I told him if he wanted somebody while he was over there
H.M.JR: Well, you see, there's the thing which is
he should take Taylor, and one of the questions he asked--
very interesting. Make a note of it, having money
I want to know whether Taylor would know the answer.
come back. This whole thing--I asked to see him, he
For instance, he asked ne about--he's preparing him-
didn't ask, because I wanted to find out. The whole
self to no over, and 1 wonder if I gave him the correct
thing built up to & point we net a million tons 8.
answer-how did I propose to pay off Socony in Rumania,
month out of the Ruhr and the Saar, in order to give
or General Motors in Europe, Germany, for their plants,
each family in advance a half ton of soal. Now you
out of reparations, or out of money In this country?
have got to have your basic figures. Be leads up to
I said in my opinion they should not be mixed up with
that and I gather he's going to get--
the reparations, that We had enough money, I thought.
MR. COE: We learned on Saturday that Secretary
by impression was there is about seven or eight hundred
million dollars, German finances in this country, which
Stimson recently wrote the letter to State suggesting
is more than the total claim that American companies
that four or five men, including yourself, sit down
have.
on the question of War Department's now being unwilling
to finance relief to certain areas. They have been
taking the position, particularly in Italy, and they
MR. PEHLE: That's wrong.
were worried about coal, and another question was that
the War Department said it would not finance the coal
H.W.JR: Is that wrong?
question. State--
MR. PEHLE: Yes. The claims against Germany far
H.M.JR: Excuse no. I don't want to ask Harry to
exceed the assets.
do this while Bretton Woods is on, but I wish you
H.M.JR: Who can give me a nemorandum on that?
would get hold of Mr. Potter, if Harry hasn't time
and--
MR. COE: We can.
MR. WHITE: No, no. Frank has time and the staff
MR. WHITE: Data has already been checked and
to handle it, and he's set up to handle it.
there's--
H.M.JR: Well, then, Potter, who just came back
H.M.JR: Coe, would Taylor have that at his finger
from Europe, who has made the survey, will you get
hold of him and have a talk with him, and find out
tips?
what his report is on the Ruhr and the Saar, and how
MR. MIITE: I doubt it. But be can easily get it.
we arrived at the figure of a million tons a month?
I mean, the whole thing all comes back, are they going
H.M.JR: What?
to have a revolution? Are these people going to be
able to say, Well, we've got to do this and that for
MR. WHITE: I doubt it very much.
Germany to keep them from revolting," and all the rest
of that stuff, and I want to know. Now on the thing--
H.M.JR: Well, Frank, would you be thinking of
I had 8. long talk, almost two hours, with Hopkins, and
different things like that, what have we got, and if
I recommended to him first Yost in the State Department.
he decides to take Taylor, what we ought to send
He couldn't get Yost, and then I recommended Reams.
Taylor so that he could have it, see? And I think
that it would be nice, Frank, if you would write a
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12
M-3
- 12 -
- 11 -
H.M.JR: Well, it's so different. Anyway, I want
different ones thinking what we should possibly give
letter to Taylor, for my signature, telling him that
him or give Taylor. That's about all.
Senator Kilgore said of all the people that appeared
before him, Taylor made the best impression. I
MR. GASTON: Is that Wayne Taylor?
don't know what we should give him. He wanted my
plan for Germany and he pressed ne very hard, and I
H.M.JR: No. No, it s William Taylor.
said he couldn't have it unless I got permission from
-. Trunan, and I'm going to ask Truman If I should
MR. GASTON: Our Taylor?
give it to him. But I don't think it's generally
known that he's going to go with Hopkins.
MR. WHITE: Bill Taylor. He's in London.
MR. WHITE: Hopkins saw the brief, the six-page
MR. GASTON: Did he appear before this committee?
proprosal.
H.M.JR: In London.
H.M.JR: What's that Harry?
MR. WHITE: Kilgore saw him in London.
MR. GASTON: The outline?
MR. GASTON: Kilgore, oh, yes.
MR. WHITE: When it was first discussed.
MR. PEHLE: They had hearings, Harry. They took
H.M.JR: On what, Harry?
testimony and he testified. I gather from something
Kilgore said--
MR. WHITE: On Germany.
MR. WHITE: In London?
MR. LUXFORD: He sat in on the original?
MR. PEHLE: Yes.
M. WHITE: Yes. It's & little bit vague in my mind.
I'm ninety-five percent positive that he had a copy of
MR. WHITE: I didn't know that.
that.
H.M.JR: In London.
H.M.JR: That was before Quebec?
MR. GASTON: I'm confused because 1 didn't know
MR. WHITE: That's when we had a meeting in his
about Bill Taylor appearing before any committee here.
office, which was attended by State Department and McCloy,
H.M.JR: Here? That gets down to a question of my
and myself.
appearing, and somebody wrote ne a letter about wanting
H.M.JR: Before Quebec?
somebody to appear.
MR. WHITE: Well, I'm not certain. I think so.
MR. WHITE: Mike Hoffman, and they called up again
and they've got him scheduled for wednesday.
H.M.JR: Well, the thing is, today it's so different.
H.M.JR: Well, 1 don't want Mike Hoffman. I don't
MR. WHITE: I think it is, after State Department's
n
think he's--
consideration of it.
0
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- 14 -
- 13 -
MR. WHITE: Do you have an alternative?
MR. PEHLE: How about getting Schmidt back?
H.H.JR: The alternative would be If we get Schmidt
MR. FUSSELL: Mr. Secretary, will there be a press
back.
conference this afternoon?
MR. WHITE: Oh, I don't think myself it's worth
H.M.JR: I don't think so.
while, and I think Hoffman can do as good a job in
this particular field.
Mr. Secretary--I think that he knows the stuff. I think
10., WHITE: The factual material that he's to present,
MR. PERLE: He's older and much more nature in
he's quite competent to discuss the narrow field which
appearance in fact.
they will want him to discuss, and if you have somebody
else, It will be more difficult for that somebody else.
(Secretary holds telephone conversation with
Whoever you may select tokeep off the broader German
Senator Kilgore.)
problem, he can very appropriately say, "That's not in
my field."
H.M.JR: That's all right. The President told him
practically the same as he told me. He says he has
H.M.JR: Well, let's take the time. who called up
divided it a little bit differently because of this nan's
for Kilgore, and what did they say they wanted?
appropriation. I think it runs out the first of July.
Ho'll have to get another appropriation. Well, Harry,
MR. WHITE: One of the clerks on Kilgore's Committee,
who is your Assistant Secretary in Charge of Foreign,
Schimmel, called up to say that they have somebody scheduled
and so forth? Who is the best qualified man to do what
for Wednesday--they're hoping to have him scheduled for
President Truman wants, to go up and give them the
Wednesday--and they want him to discuss the amount of
economic, historical background?
foreign property which Germans have here and the amount
of holdings which Americans have there. They want to
MR. WHITE: Well, I think the choice is extremely
discuss some of the cartel relations which have been
limited. If you want to get Orvis back, the boys think
revealed by foreign funds activities, some of the ways
he makes a more nature appearance. I'm sure he does.
in which the Germans can hide their assets abroad and
He would have the added attraction of being fresh from
can promote research or propaganda abroad through the
Germany, and would be able to give the kind of experiences
funds they have, the kind of problems which Mike, I
which always go well in & committee. It might also have
think, would be qui adequately prepared to discuss,
the advantage of bringing home to the committee that the
and he can confine himself to that narrow area, and he
Treasury is actively operating in that field and has men
has been instructed so far, and he'll carry it out,
in there. It would have that advantage if we do get men
that if they ask him any other questions, for him to
over in time, and it might be a very good thing to get
reply that it's not in his bailfwick.
Orvis Schmidt to find out what he's doing and send him
right back again. So, If they can weit, I dont know how
H.M.JR: If we sent Mike Hoffman, thirty years old,
long it would be, ton days maybe.
up there to testify on this thing, I don't--
H.M.JR: Oh, no. I can call up McCloy and tell him
MR.WHITE: He's a very smart boy, Mr. Secretary.
to send a message over that I want him back immediately.
His age has--
He is to leave today.
H.M.JR: I know, but--
MR. WHITE: If that's the case, then I can see where
he would make a more interesting showing than Mike Hoffman.
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- 15 -
h-1
If Orvis is out for one reason or another, it seema to ne
77
that Mike Hoffman could handle it adequately. He could be--
H.M.JR: Where's Orvis Schmidt, at SHEAFT
- 16 -
(Secretary holds telephone conversation with Mr. McCloy.)
MR. COE: Yes.
H.M.JR: All right, how far did we get?
H.H.JR: I'll call him up myself.
Charles?
MR. PEHLE: That's the way.
MR. C. S. BELL: I haven't anything, sir.
MR. D.W. HELL: Is this hearing for Wednesday?
H.M.JR: Daniel Bell?
MR. WHITE: Those would be the only two that I could
think of.
MR. D. W. BELL: I haven't anything.
H.M.JR: What?
H.M.JR: Luxford?
MR. WHITE: It seens to me those are the only two.
up--
MR. LUXFORD: I don't know how far you have been kept
H.M.JR: I think it would be good. How long has
Orvis been over there?
H.M.JR: Anybody want to go up on the Hill?
MR. PEHIE: About a month and a half.
MR. LUXFORD: I have to go at ten-twenty. The war
criminal problem is again being negotiated with the State
MR. WHITE: Two weeks. I don't think he got to
War, and Navy Departments, and with considerable difficulty
Germany until--
in the sense that State and the War Department in particular
are trying to hold back on two main points, one, industries,
MR. PEHLE: A month.
and two, the question of extradition of war criminals. The
boys have flushed them out enough to know that in 8. way their
H.M.JR: And he could talk, and he could simply say,
fears are in connection with Russia and Yugoslavia. They
"I'm head of Forei Funds, and this is why I'm here,
are afraid that they will be pulling the wrong people in as
and I'm not to talk, but this is my field and I'm very
war criminals, and they are setting up the procedure, or
sorry, I can't talk about the other business.
attempting to, which would make it very difficult.
MR. WHITE: Of course Mike would say precisely that, too.
H.M.JR: Did you get this secondhand?
MR. D.W. BELL: They might both go. Mike would have
more current information.
attending those meetings.
MR. LUXFORD: I got it from the directors and our boys
MR. WHITE: They might both come up. It depends on how long--
Joe W&S gone.
H.M.JR: See, I made you custodian of our allies while
H.M.JR: Don't misunderstand me, I have confidence in
Mike Hoffman, but he does make a very youthful appearance. I
MR. LUXFORD: That is right. Our attack has been one
mean, I think he's & very able person, but I think of the
of foreing out into the open what the issues are and the
two that Schmidt would make a better appearance before the
redrafting of the directive, but there definitely is trouble
committee. All right, I've been doing most of the talking.
so far as what they are trying to do is concerned.
Charlie Bell?
H.M.JR: Should I be interested in that, Harry?
MR.C.S. BELL: I have nothing.
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- 17 -
- 18 -
MR. LUXFORD: I think you should.
H.M.JR: Who is chairman of that?
MR. WHITE: I would if I were you.
MR. WHITE: It is not handled by the IPCOG Committee.
The SNNCCommittee played around with it, the same one that
MR. LUXFORD: I just wanted to mention to you what was
handled Germany before. They are not handling it by what
going on. At an appropriate point we may have to go further,
we have called the initials, the IPCOG Committee, which
but we are foreing them on the record in regard to what they
handled Germany. They are taking it out in this other
are trying to do.
committee. The difference between the two is the Treasury
is in one and out of the other.
H.M.JR: Is today Burgess' day?
H.M.JR: It doesn't nake sense.
MR. WHITE: Yes, and they may also go into an executive
session with myself. Fulbright asked ne for some questions
MR. GASTON: The whole thing is preposterous in my
that he can ask me. He wants me to answer them, refute a
opinion; this making the peace and economic future of the
lot of the questions.
countries that were conquered is apparently in the hands
of the military, and to ne it is nothing.
H.M.JR: An executive session with you, yourself?
MR. WHITE: Well, State--
MR. WHITE: I an not sure whether it is going to be an
executive session after Burgess gets through. Burgess would
MR. GASTON: Well, military and State is not enough.
like to make it an executive session before he starts, but
To me it is preposterous.
Senator Wagner is opposed to it, so I don't know what is
going to happen. They were going up this morning to find out.
MR. WHITE: No, it is my thought after going into the
Dean Acheson and I spent an hour and a half with Senator
details of what the men have to contend with that there is
Millikin at his office Saturday at Senator Millikin's request.
no use maneuvering from our position unless you take it up
We may have budged him, I don't know.
with the officials and got it up officially.
H.M.JR: Anything else?
H.M.JR: Take it up with Grew.
MR. LUXFORD: No, I haven't anything else.
MR. COE: Grew stayed off at the time of the IPCOG
meetings. You asked him about that, and the understanding
MR. WHITE: Were you through, Luxford?
was that Grew would be the one. Henceforth as these things
arose and there was specific reference to Japan it would be
MR. LUXFORD: Yes, I am through.
taken up in some group like the IPCOG one.
MR. WHITE: If you are interested in getting in on the
H.M.JR: Should I call Grew, or should I call Clayton.
Japanese directive, It is being prepared now. They are
keeping us on the edge. They are asking us about some
MR. COE: Clayton himself seens to be out of the SWNCC
things, and some they are not, but we are out of it officially.
thing, so I suppose it is Grew.
I don't know at what point you want to make an effort to get
back in officially. We have never been in officially.
MR. WHITE: Isn't it being run by the Army?
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81
- 19 -
- 20 -
MR. D. W. BELL: What about McCloy? Isn't McCloy
H.M.JR: What I would like you to do is take his letter
chairman?
and get all the answers you can give, and see Walter George
and have a talk with him today.
H.M.JR: I will follow it through. What else?
MR. O'CONNELL: You are not anxious that we get & letter
MR. WHITE: There is no official basis for it, 80 if
which would be released to the press today?
you do follow through, I think that that is what you ought
to get, because when it is just an understanding, the boys
H.M.JR: I an not going to have a press conference.
have a hard time operating.
I would like to answer It as soon 8.8 possible, but there
is no rush. I would like to get Walter George's advice.
H.M.JR: Are you going on the Hill, too?
MR. O'CONNELL: All right.
IR. O'CONNELL: I hadn't intended to.
H.M.JR: I will call him up and ask him whether he will
H.M.JR: All right, you go ahead, you fellows.
see you this afternoon.
MR. WHITE: I think Joe should be up there if they are
MR. O'CONNELL: It is a very impertinent sort of letter.
going to have an executive session, and there may be an
If you put out an answer which you wish to publicise, a
executive session today.
brushoff would be the thing, because the letters are pertinent.
We wouldn't answer some of the questions for him anyway. The
MR. O'CONNELL: I didn't think there would be an
complete answer is that the Treasury is examining the whole
executive session today.
thing, and when we have completed our examinations we will
report to the proper committees, to Ways and Means instead of
MR. WHITE: Will you join us in about ten minutes?
Finance.
MR. O'CONNELL: Burgess goes on right away, doesn't
MR. GASTON: I agree on the brushoff, but I don't
he?
think we ought to give out any information.
MR. WHITE: Yes.
MR. O'CONNELL: That suits me, but I was raising the
question. I think the silent treatment is best along the
MR. O'CONNELL: I will be down before he is through.
line here. No one is paying much attention to Willis or
(Mr. White, Mr. Luxford, and Mr. C. S. Bell leave the
the Republicans in this connection except the Times Herald
which is 8. Republican paper.
conference.)
(Secretary holds a telephone conversation with Senator
MR. O'CONNELL: I gathered from what you said earlier
George.)
that you weren't going to have & press conference today. I
wondered whether you wanted & new thought. I sent Senator
H.M.JR: He says it is purely political and we should
Willis a letter on the Bureau before the publicity appeared,
just give him a courteous answer. I was thinking to say,
and as I told you Saturday morning, We were thinking of writ-
"Well, we have all the facts. We will present then to the
ing a short letter to Willis, not at all on the defensive,
Joint Committee on Taxation.
which we could get out. We probably would have it by noon
if you wish to sign it.
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82
- 22 -
- 21 -
I would like to report also that the Treasury Depart-
ment has made ninety-two percent of its Seventh War Loan
MR. O'CONNELL: Yes, I think that is the right slant.
quota.
There isn't any reason why we should fall in their trap in
trying the thing in the newspapers with added facts or
H.M.JR: How much?
without them, but we will have n. short letter which I will
have when We go down to see Senator George.
MR. BARTELT: Ninety-two percent, and I think We will
be up to ninety-eight by the end of this week.
H.M.JR: At two o'clock in the Office of the Secretary.
H.M.JR: Good.
MR. O'CONNELL: May I be excused? Sherwood is waiting
for me, and I would like to talk to him and maybe bring him
George?
down with me.
MR. HAAS: The Budget Bureau asked if we would advise
H.M.JR: All right. This thing I referred to, Gaston,
their fiscal agent, the idea being that the President might
I will bring that up tomorrow on how we are going to handle
issue the Budget summation by August 1, but I don't think
McKellar, when Nunan is in here.
they have & definite commitment. Maybe you know.
MR. O'CONNELL: Yes.
MR. D. W. BELL: No, I understood they were contemplating
August 1. That is about the usual time.
H.M.JR: This request of McKellar's for an appointment
in Internal Revenue-I don't want to discuss it until Nunan
H.M.JR: Anything else? I gave you some things to do
is here.
today, didn't I?
MR. GASTON: I see.
MR. HAAS: Yes.
H.M.JR: I want to get Nunan's reaction.
H.M.JR: And if you don't have & large enough staff, get
them.
MR. O'CONNELL: I am anxious to get that. I have talked
to Cann and Sherwood, and their reaction was what I gave you
MR. HAAS: Thank you.
Saturday morning.
H.M.JR: Frank?
H.M.JR: We will go into the thing tomorrow morning,
Gaston being political, and you being In Internal Revenue,
MR. COE: I have nothing, sir.
and I want to see how Nunan reacts.
H.M.JR: What did you do? Did you decide how to
MR. O'CONNELL: Gaston being political!
reorganize your department?
MR. GASTON: Yes, we will see about that. (Laughter)
MR. COE: I have a memo that is being typed up now.
(Mr. O'Connell leaves the conference.)
H.M.JR: Is it good?
MR. BARTELT: Mr. Secretary, I want to report that we
are making very good progress on tax refund cases. Last week
We paid about one million sixty-nine thousand, bringing the
total up to two and one-half million. That means we have
just about twenty-one and one-half million to go.
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85
- 23 -
- 24 -
MR. COE: I think it gives what we want. I have dis-
cussed it generally with Harry, but I haven't shown it to
M. COE: Oh, then, you have what you want.
him. I an afraid it is the usual thing, certain things we
are doing in order to produce certain things We need. We
H.V.JR: The Department started to give me what they
will get a little more informal organization. I will hand
thought about the press, which I didn't want. I wanted
a full-dress document in to you. There is one thing, Mr.
simply what the Russian press said uninterpreted.
Secretary, we have been a little pussled by, and due to your
good contacts with State we have been getting a deluge of
MR. COE: They are very interesting.
Moscow telegrams. They have never sent any over before.
They are mainly reports on the newspapers in Russia.
H.M.JR: Is this what I an getting?
H.M.JR: I an very much interested in those myself.
MR. COE: That's what you are getting.
MR. COE: We have gotten them up for you.
H.V.JR: Because when I got what the State Department
got out about what the Russian press said, it was no good.
H.M.JR: I get more information out of those reports
This is it.
than I do anything else on the whole European situation.
I am going to try Grew on this.
MR. COE: You got what you asked for then.
(Mr. Coe hands Secretary two memoranda dated June
H.V.JR: I think it is more interesting than reading
15, 1945 and June 22, 1945.)
the daily newspaper.
Pehle, I will give you a few minutes if you will
MR. COE: That is a brief memo, but I think they are
stay behind.
mainly to skin through.
MR. GASTON: That thing you mentioned to Fussell
H.M.JR: What is this? I don't think you meant to
upstairs, I think if press conferences are being held
give ne this.
upstairs they ought to be stopped. They ought not to
be encouraged. Your suggestion was about bringing in
MR. COE: I an sorry. They are very interesting, but
certain people and getting something more formal. I
I warn you they haven't given you what their own political
think that would be n. mistake. There should not be any
analysis is; they are mainly furnishing a view of how the
press conferences. If he is setting a certain time at
Soviet is reacting in their press to the developments
which the newspapermen come up to talk to him, that
of the world.
should not be done.
H.M.JR: It isn't an analysis of the press itself?
H.M.JR: Be does. Every norning the wire services
come up to see him.
MR. COE: It is an analysis of the press itself,
a condensation, but it is not the Department's own.
MR. GASTON: But going in the direction of putting
it in Fussell's hands and making It all the more formal
H.M.JR: I don't want the Department's. I have
that Fussell can handle it better than Shaeffer, that's
that,and that is what I didn't want.
going in the wrong direction. I don't think we want to
organize formal press conferences upstairs. If they
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86
- 26 -
- 25 -
MR. D.W. BELL: I think Shaeffer started that, Mr.
are being held, we ought to make it just & matter of
Secretary, at the time when you woren't holding press
drifting in one at a time, calling up on the telephone,
conferences. Remember, there WAS quite & period there
and so forth, to give out routine information. I
that you didn't have press conferences, and he was
wouldn't have press conferences.
trying to keep the boys in a good human and he started
it.
H.M.JR: Why?
I didn't know he was doing every day, but I
MR. GASTON: It is substituting somebody else than
think they come in and ask questions, and keep current
yourself as spokesman. If you want to do that, substitute
on things that are going on that Shaeffer can give
someone else as spokesman for Treasury policy, you could
them. Re doesn't give them any policies.
do it, but I don't think it is a wise thing to do. We
don't need press conferences by somebody else. We don't
have enough business here to justify that. We can give
MR. GASTON: I think that's right, but I think
out routine stuff to the men as they come along.
the habit of having them all acceptable at one time
leads to the wrong direction.
H.M.JR: Ted Gamble does it.
I would like to say one more word about something
MR. GASTON: I know, but Ted Gamble is running a
that is none of my business either, and that is this
big propaganda machine. I never felt the need of holding
thing about Europe and the peace.
press conferences. I didn't hold press conferences.
It is not the right idea. Steve Early, yes, that's
I think President Roosevelt neglected proper form
unique, that's different. I don't think any department--
of organization for the treaty problems of the disposition
I may be wrong, but I don't think any department has
of occupied countries. I don't think there is any
somebody holding press conferences unless it is In the
really proper form of governmental organization set up
absence of the Secretary or something of that sort, or
yet, as illustrated in the fact there is this by-play
unless the Secretary just doesn't want to.
of crowding us out, and so forth, and it is too much
military.
H.M.JR: Well, I am going to have a talk with Fussell
and see what happens. I don't know which is the better,
It seems to me that President Truman might be sold
to see them at one time or to have them drop in. And the
on the idea of a really conscious, deliberate, organization
first thing he knows he is having favorites and telling
of the Cabinet and the Government to solve these really
one story to--
important problems. I think there is just authority
being grabbed, and the thing is kind of being done in
MR. GASTON: It's his business to see he doesn't
the corner.
have favorites.
H.M.JR: You're right.
H.M.JR: But certainly the thing is going on where
the press could be guided and Shaeffer just isn't doing
MR. GASTON: I think my suggestion was possibly
it.
you could work out a definite plan and go to him
and say, "There, this is the broadest thing we have
MR. GASTON: Well, the press can be guided much
got on all governmental propositions."
better if you don't take them in a group.
(The Secretary holds a telephone conversation with
H.M.JR: Well--
Mr. Grew.)
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88
10:00 A. M.
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- 27 -
HMJr:
Hello.
Operator:
Senator Kilgore.
H.M.JR: He has it on his desk.
HMJr:
Hello.
Now, there is no reason Mr. Clayton should--Mr.
Clayton doesn't know anything about Japan. It has to
Senator
Kilgore:
Hello.
be people who lived with it.
HMJr:
Morgenthau speaking.
MR. COE: One of Clayton's men brought over & part
of it to us including the political--
K:
Kilgore talking. How are you this morning?
H.M.JR: Well, anyway, that's that. Herbert, you
HMJr:
All right.
are right. I have spoken to the President & couple
of times about it. I have a notion to ask him. The
K:
I just got in from West Virginia, and got myself
lined up on these hearings. After I talked to you
first of July he is going to do something.
I started checking on the materials to see just what
might be questionable.
MR. GASTON: There should be a plan. There are
two fundamental misconceptions. One is Army shouldn't
HMJr:
Yeah.
be interfered with wherever they are in occupation
and the other the State Department should manufacture
K:
And in the meantime I got a call from Mr. Clayton,
International policy. It shouldn't.
right after that - so on the strength of that call
I called the President and asked his. I said we
had advertised the hearings, what did he want done?
H.M.JR: Yes. What else?
Re said well, he wanted the hearings to go ahead,
but he wanted any question of future policy left
MR. GASTON: Do you have something you wanted to talk
out.
to me about?
HMJr:
Yeah.
H.M.JR: It was this business--
K:
until afterwards. He wanted the hearings in two
series. One set of hearinge to give the background -
MR. GASTON: Fitz mentioned something.
the economic background, and then as soon as the
Berlin conference in over a series of hearings on
H.M.JR:
about Senator McKellar, and I don't want
policy.
to discuss it until Nunan is here.
HMJr:
I see.
MR. GASTON: All right.
K:
So we are just going ahead merely with the historical
H.M.JR: I have got to rest a minute, and then I'll
background. He has requested every department to cut
out anything that deals with policy.
see you. (Mr. Pehle.)
HMJr:
I see.
MR. PEHLE: Yes, sir. Do you want Herbert or any-
body else here when you talk about Americas United?
K:
And serely give economic and financial history up to
the present time, which would be & foundation stone
H.M.JR: No.
for 8. statement of policy later. But he doesn't want
anything said on policy until after the Berlin confer-
ence.
MR. PEHLE: Okay.
Regraded Unclassified
RECISION TRADE MARK MICROSTAT/ MICROFILM BOLL NO.
- 2 -
90
- 3 -
91
HMJr:
Yeah.
K:
We were to start this morning with State De-
partment and Mr. Clayton, and just work our way
Well, I thought I'd call you up and tell you what he
on through. And the Baruch hearing as a matter
X:
of fact it was such a surprise that I vas out of
told no.
town on the day it was held.
HMJr:
Yeah, well...
HMJr:
(Laughe) I see.
K:
He said what he wanted was - the reason he wanted
E:
Senator Thomas told me before I left that Mr. Baruch
that vas that he wanted to keep all the whole carts
covered up well until after that conference.
was going to testify before the whole Military Affairs
Committee, and wanted ne to be present. I told his
Well, that is what he has told me. That's why I
I didn t know anything about it and couldn't be there.
HMJr:
told you I had better not come up there.
I was out of town.
K:
Yeah.
HMJr:
Yeah. Well, your Mr
HMJr:
I gathered that -- did you know that Baruch was going
K:
As a matter of fact Baruch's whole statement was
practically your policy there - according to the
to testify before...
editorial I saw in the paper this morning.
X:
Baruch made that request of the Military Affairs Com-
mittee. See that wasn't before the subcommittee.
HMJT:
What paper was that?
I see.
K:
It's the News.
HMJr:
HMJr:
News?
X:
I wasn't even at the meeting. Senator Thomas, the
chairman of the Military Affairs Committee presides
X:
Yeah.
at that meeting.
HMJr:
Did you know Baruch vas going to do that?
HMJr:
The Washington News?
K:
K:
I think that it is - yeah. It's one of those tabs.
Well, I didn't know how far he was going. I knew he
was going to testify.
HMJr:
Oh, yeah. I haven't seen it.
HMJr:
Yeah.
K:
Well, what he said, I think, was all right, but, ...
K:
But he made that request to Senator Thomas, and
Senator Thomas gave the permission to talk before
HMJr:
or course, what we've done is we've gone much further
in showing how to solve it.
the whole committee.
K:
Yeah. I know. Well, I mean it vas in line with that.
HMJr:
I see.
And the subcommittee didn't have anything to do with
HMJr:
Definitely.
K:
it.
K:
HMJr:
I see.
HMJr:
He made 8. good start. Very good start.
K:
Our hearings were scheduled to start out - he wasn't
even on our schedule, see.
K:
Now what was suggested was this. That in as such as
if we got you up here, they'd probably - some of the
HMJr:
I see.
Republicans would probably ask you.
HMJr:
Yeah.
Regraded Unclassified
RECISION
TRADE
MARK
MICROSTAT/
MICROFILM
ROLL NO,
June 25, 1945
92
10:09 A.M.
93
- 4
HMJr:
Hello.
X:
But we were going to ask somebody else in the
Department, who could say that he couldn't go into
Mr. John
those details - he knew nothing about them, that
McCloy:
Hello. How are you?
they were detailed to another man.
HMJr:
I'm all right, and you?
HMJr:
Yeah.
M:
0. K.
K:
And that would save us what do you think about that?
HMJr:
Jack, I'm just through talking to Senator Kilgore.
HMJr:
Well, I certainly think I should not come.
K:
M:
Yes.
I think you shouldn't come at this time, but should
come after the Berlin hearing.
HMr:
Who tells ne that the President wants the different
Departmente to give the sort of economic background
HMJr:
I'd like to come after the Berlin hearing.
on Germany.
E:
All right. That's fine, then if we can get somebody
M:
Yes.
from down there who can sua up the economic facts as
found by Treasury Department, then we can go ahead
HMJr:
Nothing to do with future planning, but just the
about economic background.
background.
HMJr:
Well, I understand what you want, and we'll do the
M:
Yes.
best that we can, and we'll give you the best that
we have available.
HMJp:
Orvis Schmidt - if you've got a pencil.
K:
0. K. fine.
M:
Wait a minute. Orvis Schmidt?
HMJr:
But as I understand what President Truman wante - he
HMJr:
100. Who is head of Foreign Funds for Treasury is
wants historic background and nothing as to the future.
at Frankfurt.
K:
No 1dea as to any future planning.
M:
Yeah.
HMJr:
Yeah.
HMJr:
Under Colonel Bernetein.
K:
Just the background on which the plans will have to
M:
Yes.
be laid.
HMJr:
He is a civilian - I mean Schmidt.
HMJr:
Well, we'll do the best we can.
M:
Yes.
K:
0.8.
HMJr:
And I would like to get him back at once, because they
HMJ,:
Thank you.
want him to testify Wednesday, but if you could get a
message BO he could leave tomorrow he could get back
K:
Thank you.
here and testify Thursday.
M:
0. K. Well, I'll do what I can. I'll tell then to
put his on the plane and send him back no fast as they
can.
HMJr:
Would you do that?
Regraded Unclassified
RECISION
TRADE MARK
MICROSTAT/
MICROFILM
BOLL
NO.
- 2 -
94
- 3 -
Yes, Orvis Schmidt. I can't guarantee what time he
95
M:
will be here.
HMJr:
HMJr:
No.
So they'll ask ne to come up after Berlin.
But I'll get him here just as quickly as I can.
M:
Yeah. I don't know quite what he wants ne to testify
Mt
about. I'll just go up and sort of shoot off the ouff
HMJr:
Well, if you would tell whoever handles it for you
as to what our set-up 1s now and what problems we are
to let Harry White know when we can expect his back
finding now. Lou Douglas just came in & minute ago.
so we could let Senator Kilgore know.
HMJr:
Did he?
M:
Right, right. Now are you going to testify up there?
M:
Yeah, he's just here now. Just arrived - with, well,
HMJr:
No.
he's just going to start the story.
They've got ne down for Friday.
HMJr:
Well, tell him this time I expect to see him, or my
M:
feelings will be hurt.
HMJr:
I tell you what he told me. President Truman is
No, dividing - wants the thing divided into two pieces.
M:
I'll tell him that.
For the present, just the background.
HMJr:
Tell him that.
M:
Yeah.
M:
Yeah, he'll be around to see you.
HMJr:
And after Berlin, the future.
HMJr:
You tell him that.
M:
Future, yeah. Wante to keep off the policy, I'm told.
M:
I will.
HMJr:
Off the policy.
HMJr:
Is he there?
M:
Yeah.
M:
Yeah, wait a minute - you want to talk to him?
HMJr:
So they are going to keep me off.
HMJr:
Yeah.
M:
(Laughs)
M:
Hold the wire.
HMJr:
(Laughs)
Mr. Lewis
M:
They had Baruch up there.
Douglas:
Hello.
HMJr:
Yeah, well....
Hello, Lev.
HMJr:
He got on the policy all right.
D:
Hello, Henry, how are you, sir?
M:
Well, he's free-lance.
HMJr:
I'm all right.
HMJr:
D:
M:
Yeah, yeah.
Good for you.
But you heard the same thing, that
HMJr:
And you?
HMJr:
Yeah, be embarrassed before this thing - and later
I heard that Truman had indicated that he when might he
Dt
I'm all right, thank you, Henry.
M:
HMJr:
could do it.
Well, now, this time don't wait until you've about got
one foot in the overseas plane to say that you wanted
to see me.
Regraded Unclassified
PRECISION TRADE MARK MICROSTATI MICROFILM
ROLL NO.
-
96
June 25, 1945
10:20 A.M.
97-
D:
I won't, Henry. Well, we had bad luck the last time.
HMJr:
Hello.
HMJr:
I know. Well, I'll tell you...
Senator
George:
Hello.
D:
You going to be here on Friday and Saturday?
HMJr:
Henry talking.
HMJr:
Yeah.
G:
Yes, Henry, this 1s Walter George.
D:
May I come in and see you then?
HMJr:
How are you?
HMJr:
Surely.
G:
Fair, only.
D:
All right, sir. I've just got back and I'm here
HMJr:
Only fair?
HMJr:
Do you want to have lunch with ne Friday?
G:
Only fair.
D:
Love to, Henry.
HMJr:
I'm sorry. Walter, I had a long letter from
HMJr:
Lunch on Friday.
Senator Willis of Indiana.
D:
Lunch on Friday. I should love to.
G:
I saw it published.
HMJr:
We'll give you what a. civilian eats in America.
HMJr:
And asking me a lot of questions. Now sometime
around noon or 80, we'll have all the answers that
D:
(laughs) Well, that will be more than some civilians
we can have. I wondered if you would receive my
eat on the other side.
General Counsel, Joe O'Connell, sometime this after-
noon, and let him go over the matter with you and
HMJr:
I guess that's true. All right.
get your advice as to what we should do.
D:
All right, Henry.
G:
I'd be glad to, Henry. I expect he had better come
to the Secretary's office over there because we will
HMJr:
Thank you.
be tied out over there this morning today, I think
all day.
D:
Thank you ever so much. What time?
HMJr:
Well, what time would be agreeable for you?
HMJr:
One o'clook.
G:
Well, any time, say two o'clock, or anytime after two.
D:
One o'clock - I shall be there.
HMJr:
Two o'clock. He'll be at the office of the Secretary
HMJr:
Good.
in the Senate....
D:
All right.
G:
Yes, that's right.
HMJr:
Bye.
HMJr:
...at two o'clock.
D:
Bye.
G:
Yes, I'd gladly see him here, but I won't be back
over here I don't think until
HMJr:
We'd like your advice because this 18 really a party
issue - they ve made it a party issue.
Regraded Unclassified
RECISION TRADE MARK MICROSTAT/ MICROFILM
ROLL
NO.
98
- 2 -
June 25, 1945
10:32 A.M.
99.
Well, I read that letter and I thought it was pure
G:
politics. Yeah. I would be largely guided by whatever you ad-
HMJr:
Hello.
HMJr:
Mr. Joseph
vise. that I can help a lot, but wondered it just
Grew:
Good morning.
G:
Well, I don't that know it was so political that courteous I
HMJr:
seemed if reply, you would but to ne anyhow do more I'll than be glad just give to see him O'Connell. a.
Bow are you? Mr. Grew, can you hear ne?
G:
Yes, perfectly.
Well, some of the questions we can't answer.
HMJr:
As you know, under what you people call an informal
HMJr:
committee for Germany we got out what everybody
G:
Yes.
seened to think was a pretty good Directive, and of
I mean we just haven't got the information.
which Mr. Clayton vas Chairman. Hello?
HMJr:
0:
Yes.
G:
Yes. just give him a courteous reply and will say
HMJr:
Now they have a group which is notheaded by
HMJr:
And I could proper time that the information taxation. be
Mr. Clayton getting out a directive on Japan, and
presented that at the to the Joint Committee on
we are very much on the outside, and I am informed
that you people yourselves are not wholly inside
of it. Hello?
G:
Yes.
G:
Yes,
When we have all the facts.
HMJr:
HMJr:
I may be wrong as far as State is concerned, but as
G:
Yes.
far as Treasury is concerned, we're just on the very
outside fringe.
Which we expect to.
HMJr:
G:
Yes.
G:
Yes.
HMJr:
Now, I think that committee which Mr. Clayton headed
HKJr:
See?
did 8 very good Job on a directive on Germany, and
we have a real interest in it - in the one for Japan
and I'd appreciate it if you would make some inquires
G:
I see. will Preation thend when the ve Joint have
and see what is happening.
HMJr:
We all are of now the making facts, an we to
G:
Oh, I know all about it. I have the paper before me,
Committee on taxation.
it's not in final form yet. It has not been approved
Yes. meantime, Well, when I'll O'Connell be glad comes to think over it I'll over, talk and with in the him.
yet, and we've got to study it and possibly modify it
before we want it to go anywhere.
G:
HMJr:
Yeah.
Thank you so much.
HMJr:
G:
But we are working on it now. You - there's a financial
All right, Henry.
angle in it you mean?
G:
HMJr:
Well, there 1s in all of these things.
G:
Yes.
Regraded Unclassified
RECISION
TRADE
MARK
MICROSTAT/
MICROFILM
BOLL NO.
101
- 2 -
100
- 3 -
HMJr:
After all in all of these questions once they begin
HMJr:
And so, if you will see it 1s made available to
to occupy these countries the Army has a strong
me, I would appreciate it.
finance section. Ae I say we've been on the one for
Germany, we've been in on the one for Austria, now
G:
I'll see that you get a look at it in due course.
why are we suddenly excluded on the one on Japan.
HMJr:
I thank you.
G:
Well, you haven't been excluded because the thing 11
not yet in a form where we could properly send it out
G:
All right.
to anybody because we haven't all agreed on it our-
selves yet.
HMJr:
Bye.
HMJr:
Vell, the time must -- I find to get in on these things
G:
Bye.
18 when they are being in the formative period.
G:
Well, I'll look into it and see here.
HMJr:
It 1s a different group, you know. I don't think
Clayton 1s Chairman of the group on handling the
directive for Japan.
G1
No, he's not at all.
HMJr:
Why it should be a different group, I don't know.
G:
Well, there are a good many reasons for that. In
the first place, Clayton doesn't know anything about
Japan whatsoever. This thing is being drawn up by
people who do know something about Japan.
HMJr:
Yeah.
G:
It requires a very expert hand on this matter. Its
problems out there cannot be settled by people who
have never lived there and don't know anything about
the situation, the psychology, and all the rest of it.
HMJr:
Mr. Clayton never lived in Germany either.
G:
Vell, he has a better grasp, I think, of European
affairs than he has of Fareastern affairs. However,
that's not here nor there, but I'll see-what the
situation of the paper 18 now, I think we shall want
to have it passed by our staff committee or considered
by it before we send it to anybody else, and it is
coming up very shortly.
HMJr1
Well, I would very much like to have a look at it myself,
and have my assistants have a look at it, before it 1e
too late.
G:
Oh, yes. Well, nothing will be crystalized, of course,
until other people have had a chance to look at it. It
will have to go to Var and Navy and all the rest of it.
Regraded Unclassified
102
- 2 -
103
June 25, 1945
11:04 A.M.
HMJr:
And I felt that the experiences in the
proceedings with him, that he 1sn't the kind at
HMJr:
all that I want.
Hello.
B:
Operator:
Well, I didn't remember that he had such to do with
The Attorney-General.
the
HMJr:
Hello.
HMJr:
He vse the attorney. He tried that before the Grand
Atty. Gen,
Jury, and I looked through my records and we had the
Biddle:
grand jury minutes. I read then over at the time very
Hello, Henry, you called ne last night - I vas out.
carefully, and I felt that he vas entirely too lenient
HMJr:
with the witnesses at the time.
Yes. Francis, are you in your office?
B:
B:
Well, I know Charlie very well. I think he hasn't got
Yes.
very good judgment - he is a little impetuous, but I
would doubt whether it was in that direction.
HMJr:
I wondered if you could have somebody look through
the original investigation of United States Attorney
HMJr:
After that I asked you people whether you wouldn't
Carr of Los Angeles.
change it to New York, which you did.
B:
Who?
B:
Yes.
HMJr:
Carr - C-a-r-r.
HMJr:
Cahill then tired it in New York.
B:
want.... I know his very well. In what connection did you
B:
Yes. Well, I'll look at it. I would think that that
would not be my view. My view would be that his
judgment was not always very good, but not 80 much
HMJr:
Well, Treasury. he has been recommended for a position in the
what you said. However I'll have some one look over
it and I'll give you a ring about it.
B:
Oh, I see.
HMJr:
Would you call me yourself?
HMJr:
And we went through our original files when he vas
B:
Certainly.
trying a case in Los Angeles for us.
HMJr:
If you don't mind.
B:
Yes.
B:
HMJr:
Certainly, yes.
And I was dissatisfied.
HMJr:
Because as I say
B:
Yes.
B:
Well, I'll call you personally, Henry.
HMJr:
On the way he conducted the grand jury proceedings.
HMJr:
If you don't mind.
B:
Yes.
B:
Oh, certainly. Very good.
HMJr:
And, I've
HMJr:
Thank you.
B:
Now, could you tell me, Henry, the type of position
...
HMJr:
For Deputy Commissioner of Internal Revenue.
B:
Yes.
Regraded Unclassified
RECISION
MICROSTAT/
MICROFILM
BOLL NO.
TRADE MARK
105.
June 25, 1945
4:22 P.M.
104
June 25, 1945
HMJr:
Ted.
Mr. Ted
Gamble:
Yes, Mr. Secretary.
Jean and I don't know whether my people know about it or not.
Monnet at my house. A lot of things have been going
From 5:00 to 6:30 P.M. on Sunday, June 24, I had
HMJr:
here I have a very attractive and very forceful
of the Washington office of America United.
by the name of Mrs. George L. Bell, director lady
on meeting and I want Haas to set up the statistics
showing I want a the flow of goods from this country to other countries,
G:
and how they are being paid for.
Yes.
HMJr:
has I also just made n. study of the whole coal situation. from Monnet
want to get hold of Mr. Potter from Ickes' office
for They've tied up about every organization in America
the 4th of July.
who that the cable la going out over the weekend
G:
Yes,
tells President ne Truman which is going to set up the production of
coal in the Saar and the Ruhr. I don't know whether anybody know
HMJr:
And I was suggesting that she might come over and
in office knows about it, but I certainly ought down to is
us on the 4th of July.
see you because she 1e offering to coope rate with
what about they need is another million tons of coal per month in
my it. After an hour and a half what he boils
G:
which would give a half a ton of coal to every family
Wonderful.
HMJr:
are France. on top of it or not, but I certainly want to be informed
I repeat - I don't know whether my Treasury people
And ization she's got about, as I say, every national
she in America except - well, I don't know organ-
about what is going on.
on Bretton Woods.
has overlooked, and they were very helpful what to us
G:
over Fine. and... Vell, we shall be delighted to have her come
HMJr:
Could you see her now?
G:
Yes, sir.
HMJr:
Well, I'll have John bring her over.
G:
Fine.
HMJr:
And he'll leave her in your very good hands.
G:
Fine. Well look forward to seeing her.
HMJr:
Is that all right?
G:
That's perfect.
HMJr:
Thank you.
G:
All right, sir,
Regraded Unclassified
ON not
106,
25th June, 1945.
Super
Thank you for the kind thought which inspired
you to send me with your letter of 19th June the
copies of the full proceedings in the House of
Representatives on the Bretton Woods plans. We on
this side shall be very interested to be able to
=
study the complete record.
Joan succerey
The Hon. Henry Morgenthau, Jar.
RECISION TRADE MARK MICROSTAT MICROFILM ROLL
NO.
108
107
Hold Until
Juness
-2-
Delivered.
1915
world. Five times within the memories of some persons now living,
STATEMENT OF BERNARD X. BARUCH
the Germans have waged aggressive war: against Denmark in 1864;
BEFORE MILITARY AFFAIRS COMMITTEE
Austria in 1866, France in 1870; against the world in 1914 and
of UNITED STATES SENATE
again from 1933 to 1945. This must be made the last German war.
Defeation Unfounded
Mr. Chairman and Gentlemen of the Committee:
By itself, no German settlement can be enough. If this
I an honored by your request to appear before you.
is to be a sure peace, we must be prepared to 800 the peace through
Your esteemed Chairman, in his letter of invitation, described
with an international organization to maintain common unity among
the objective of this Committee's inquiry as "the elimination of
the Allies, with a determined preparedness including universal
Germany's economic potential for military aggression."
military training, with an as-long-as-it-takes occupation of
No more important question ever will come before you
Germany, with the judicious use of our great productive power,
than this one - of how to prevent the revival of Germany's war-
and a living faith in our democracy strong enough to give the
making might, It is the heart of the making of the peace; it is
world the moral leadership in progress towards greater freedom
the heart of the keeping of the peace.
and steadily rising living standards that America has stood for
What 18 done with Germany holds the key to whether
since its creation.
Russia, Britain and the United States can continue to get along.
The defeation that prevails in the minds of some 10 un-
It will affect profoundly the jobs and livelihoods of everyone,
justified. At the close of any great war there are always some
everywhere, for none of the economic problems of the peace can
who despair of the future. It was that way after the last war.
be solved except in the light of German reparations policy and
We have only to learn the lesson of these two world wars and work
the measures taken to demilitarize Germany's traditional war
at the peace and we need not fear what the future holds in store
economy.
for us -- a new cave age of bomb shelters or prosperity and security
Is it possible to control and transform a nation of
for ourselves and our children.
more than 60 million persons, with an economy as intricate and
Bold Leadership Needed
efficient as that of the Germans?
The time has come to end piecemeal peacemaking and to
I believe it can be done. I know it must be done.
write the peace in Europe as an entirety. In this total peace-
Germany's Third Try
making, America should move forward with a positive program of
It will not be easy. But if not done, we face the
bold leadership.
certainty that Germany will make a third try to conquer the
Regraded Unclassified
PRECISION
TRADE MARK
MICROSTAT/
MICROFILM
BOLL NO.
110
-3-
To the United Nations we can direct a converted
It is important that we think of the condition of
"Arsenal of Democracy" to aid in establishing a new peaceful
the peoples involved in the war. What are the hopes and fears
economic equilibrium with increased numbers of jobe and steadily
of the people in Russia and England? In the countries completely
rising living standards for all.
overrun by the Germans, many have lost faith in government, in
Don't Overpromise
themselves - in everything but force. Seared and scorched,
We cannot do this by promising more than we can deliver.
they do not know where their next neal is to come from; how
We can by organizing priorities of production for peace -- BO
they will be able to make a living in the future. Not only
that our vast productive capacity is directed to where it will
physical but great psychological lesions will have to be healed
do the greatest good.
in the peacemaking.
In return, ve need ask only that the terms of the
All these people look to the United States as the
peace equare with the American conscience. Which is not to say
one great untouched reservoir of productive resources in the
that we - or anyone else - can have all we want.
entire world. We have no problem of physical reconstruction yet,
Strategy of Pencemaking
these people must be made to realize, we cannot do all they
Effective handling of this productive power assumes
would ask of us and survive ourselves. They must relearn self-
a strategic, positive concept of the peacemaking, knowing what
reliance. With visdom we can use our productive capacity to
we must have and what ve are ready to yield on, where American
lead the way for these countries to help themselves 80 that
interests lie and how they can be harmonized with the interests
together we can implement one another's security.
of others. We must not find ourselves thrust into the position
To Russia we can show the means of making herself DO
of seeming to have no program other than to object to the
strong she need not fear Germany; and this while permitting her
proposals of others or, by failing to move decisively, to drift
to reduce military expenditures, leaving more for lifting the
into complications. Ve must realize that unless we are prepared
living standards of her heroic people.
to exercise leadership the peace will be shaped by other forces.
Expanding trade for Britain
A vacuus does not long remain unfilled.
To Britain we can show the way to expanding world
To unify all of the many peace problems into one whole,
markets, steering her away from an economic war that could only
integrated with the Pacific war, all governmental agencies deal-
be disastrous to her and the world.
ing with these matters must be streamlined under & top group
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Germany do we want to end up with? Will the United Nations ask
acting as a focus of decision for recommendations to the President,
for reparations which require the rebuilding of destroyed German
factories and which compel Germany to work at full-tilt, thus
I speak of a council because with matters of such profound 10-
portance, the many different viewpoints should be examined by
again becoming highly industrialized and a menace to the world?
the best collective wisdom our nation can muster.
Or is German war-making industry to be curtailed and if so, what
No International Logrolling
level of industrial capacity can safely be allowed her?
It 18 not enough to answer "we want an economically
Our peacemaking must rise above any and all questions
of partisan politics, above any pressure group or vested interest
weak Germany." This program should be sufficiently specific --
-- whether on the right or left, at home or abroad -- above any
industry by industry -- so all of the occupying nations know
individual's desires for kudos or headlines.
they have agreed to the same thing. It should be put into
We must be alert not to slip into the temptations of
writing and made public. Until such a program 18 given common
international logrolling, of handling conferences as if they
acceptance, the basis for peace in Europe will be lacking.
We Want A Sure Peace
were mere political conventions, of writing peace agreements as
Any effective approach to the German question, it
if they were political platforms to nean different things to
seens to ne, sust begin by recognizing one inescapable fact --
different men. If the stakes of war are mortal, the stakes of
there is no blinking a thorough overhauling of Germany's economy,
peacemaking are life-giving and they require methods and thoughts
for the simple reason that there is no "normaloy" to return to
of heroic stature, worthy of the stakes.
The German Problem
in Germany except that of war-making.
Whether one wants to be "nice" or "harsh" to Germany
At Yalta, an excellent beginning vas made by the major
nakes no difference. War must be displaced as Germany's chief
powers on the German problem, oovering in the main the more
immediate measures for Germany's occupation. The need now 18
business.
Will the measures taken be thoroughgoing enough to
to fill in the Yalta agreement in detail and to enlarge it to
be effective? Will they disars Germany in a way to bring unity
settle definitely Germany's future.
Is Germany to be occupied in four zones for a certain
to the great powers? Those are the issues.
I have not thought in terms of a "hard" or & "soft"
period of time and then restored as a whole or is the occupation
to be the preliminary to a lasting diememberment into lesser
peace. I seek & sure peace.
parts? How long is the occupation to last? What kind of
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Therefore I recommend:
mind -- security against Germany -- I believe we can
Bettle German's Future
arrive at full understanding with the Soviets, If it
1. The carliest definite settlement of what 10 to be
is not possible, the sooner we know it, the better.
done with Germany.
All Agreements Public
5. This agreement with Russia as well as agreements
Break German Dominance
with other nations - to be in writing and promptly
2. Economically, this settlement break once and for all
made public in full detail. This has been a People's
Germany's dominance of Europe. Her war-making
War. Let it be a People's Peace.
potential must be eliminated; many of her plants
General Staff for Peace
and factories shifted East and West to friendly
6. Tighten our peacemaking machinery here at home to
countries; all other heavy industry destroyed; the
give us the effect of a General Staff for Peace,
Junkers estates broken up; her exports and imports
charged with drawing up a master plan for the peace-
strictly controlled; German assets and business
making 80 America can exercise the leadership which
organizations all over the world rooted out.
is her heritage.
Priorities for Peace
Free Look-Bee in Europe
3. Through priorities for peace to the peoples Germany
7. America's role in dealing with Russia should be one
tried to destroy, to build up the strength of the
of tolerance and fairness. Cooperation is & two-way
United Nations in both Europe and overseas while
street. I would like to see this simple rule laid
reducing Germany's overall industrial and technical
downt what we permit the Russians to do, they
power. Only when such & new equilibrium is estab-
permit us to do. There should be A free look-see
lished will it be safe to re-admit Germany to the
for all the United Nations throughout Europe.
family of nations.
More Recognition for Russia
Full Boviet Agreement
8. The United States should use her offices to persuade
4. That this German settlement be used as a basis for
those nations who still refuse to recognize Soviet
& comprehensive, all-embracing agreement with Russia
Russia to do 80.
on the major peace problems. By tackling immediately
and forthrightly the question uppermost in the Russian
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to Statism -- so we can provide jobs for all? Shall we
Security above Reparations
settle the shooting war only to plunge into economic war?
9. Reparations should be fixed at the maximum within
Raise Living Standards
Germany's capacity to pay, consistent with security
13. Raising human standards all over the world must be &
and not to underout living standards by foroing exports.
bulwark of postwar economic policy. I would insert
Russia and other countries are entitled to labor
into all financial and economic arrangements we make,
reparations, particularly if they will include in
A denunciation clause giving us the right to terminate
their labor battalions the principal war makere - the
any agreement which results in lowering of wages or
Nazis, the Gestapo, Junkers, the General Staff,
lengthening of hours -- an undercutting of human
geopolitikers, war industrialists, war financiers -
standards.
leaving the ordinary peasants and workers.
Determined Preparedness
Long Occupation Vital
14, Finally, we must ace the peace through with speedy
10, To must ready ourselves for & long occupation of
ratification of the United Nations Organization and
Germany -- 8.8 long as it takes for her spiritual
with a determined, enduring program of preparedness,
and economic rebirth.
including universal military training, adequate stock-
Supreme European Council
piles of strategic war materials. unflagging intensive
11. Create & Supreme European Reconstruction Council to
research, and the many other things indicated by &
coordinate the many aspects of European reconstruction
modernised mobilization plan designed to convert our
with the German settlement, reparations and other
nation in quickest order to the conditions of any
problems.
possible war in the future.
Positive Foreign Economic Policy
The logistics of war and the potentialities of yet un-
12. Develop & positive American foreign economic policy
heard of weapone for destruction are such we must shorten the lag
bringing tariffs, monetary agreements, foreign credits,
in any future war mobilization or risk defeat.
cartels and all other economic matters into a coherent
Peace a Painful Process
whole which will meet this one decisive test -- how to
There is no use talking about peace unless you are ready
preserve the American free enterprise system in a
to do what neede to be done to make it -- and maintain it. The
world drifting to cartelizations of various kinde -
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program I have outlined will entail many painful adjustments. I
No falling for "dunny" contrivances. If necessary to make sure
cannot see how we can afford to do less.
that these properties really change hands, I would set up &
The cost of two German world ware -- an estimated 25
corporation to finance such transfer.
million killed; and millions more left maimed and crippled, home-
Formula for Private Property
less and emaciated; the twice-repented devastation of Europe; the
Enemy assets in each country should be used to make
destruction of hundreds of billions of dollars in painfully
restitution to nationals of that country for properties lost or
accumulated wealth; the wastes of four generations whose normal
damaged in enemy countries. In the United States the value of
lives have been disrupted by the enemy, with the aftermath of
German properties taken over by Congress would be pooled and from
this war still to roll over us and our children -- the terrible
this fund Americane with property in Germany or her satellites
cost of total war demande that we now resolve to accept no terms
would receive restitution. Anything left after these claims are
but unconditional peace.
net would be turned into a common pool to pay for necessary German
After the last war, the victorious Allies acted as if
imports, with the balance going as reparations, This will make
they were determined to forget the plainest lessons of the war.
possible de-industrializing German heavy industry even where
In contrast, the German General Staff set about systematically to
American or other foreign-owned plants are involved,
remedy the mistakes they had made. As a result, the German war
I want this to be & just peace -- not one of vengeance,
machine for World War II was far more efficient, its mobilization
This program does not mean the destruction of the German people.
more ruthless, yet better organized. We know how much closer the
They would have to suffer a comparatively low living standard for
Germane came to winning; how much greater an effort in lives,
a time -- but nowhere as low as what they imposed upon enalaved
time and treasure was required to beat them.
Europe and not much lower than the standards which they assumed,
Recover Secreted Assets
to give Hitler and the General Staff the stuff to attempt world
When defeat became certain, many of Germany's Junkers,
enalavement.
Nazi leaders and war industrialista sneaked abroad assets of every
Heavy Cost of War
type as reserves for that day in the future when they could try it
The inmediate, emergency problem of feeding Germany is
again. German business abroad has traditionally been an instrument
a most difficult one. Still it should not affect the program here
of economic and propagandistic war. These assets and organizations
recommended, The heavy industries which need to be removed from
should be rooted out and taken over -- everywhere. No hocus-pocus.
Germany produced guns and munitions. Consumer goods industries
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know that Germany will be unable to go to war again.
Great care should be used in authorizing the rebuilding
can be revived to a scale that will meet Germany's own domestic
of German industries, especially heavy industries. It will be
neede. How much food will be available in Germany will depend in
easy to permit many industries to revive on a basis of expediency
great measure on the Germans themselves.
because of present urgent needs, and later find them reestablished
There will be shortages all over the world -- even
to stay.
here. With whom shall we share? Who -- in justice -- should
The argument is raised that Germany is the industrial
get the highest priorities? The Germans or the peoples they
giant of Europe and that de-industrializing her to any extent
ravaged?
would have disastrous economic effects on the rest of Europe and
United States of Europe
the whole world. There is no denying that Germany has dominated
Unchaining the German people from a war machine which
Europe economically. So she did militarily. Nor is there any
has consumed an easy one-half of Germany's total substance should
denying that this domination has been the ruin of Europe and the
case their adjustment. Eventually, purged and reorganized, and
world. Where has German economic influence been felt and smiles
the Europe around her made strong, Germany will be able to take
left to that country's people? In Poland? Rumanial Hungary?
her place with her neighbore.
Greece? Jugoslavia? Austria? Italy? France? Holland? Belgium?
The new equilibrium of industrial strength in Europe
Norway? Denmark? In Germany herself?
might take the form of a United States of Europe -- a United
Cave Age versus Prosperity
States of Europe in which Germany would be one of several peaceful
To accept the view that the restoration of German
equals, not the dominating war organizer.
industrial dominance in Europe is inevitable -- something we can
Piecemeal Controls Fail
do nothing about -- is to resign ourselves to the return to a
A number of other proposale for less drastic control of
new cave age.-- To might as well begin to put our factories
Germany has been proposed -- as placing her heavy industry under
and plants underground.
international trusteeship or limiting the control to 8. few so-
As & result of controlling Germany, great economic
called *key industries." As temporary aids to the occupation
benefits will flow to all of the United Nations. It will open
authorities, such proposals have some merit. They fail completely
expanded industrial opportunities to them and agricultural and
to provide a basis for lasting peace. Only by permanently reducing
other products which Germany will not use, will be taken up by
Germany's over-all war-making potential in relation to Russia,
Britain, the rest of Europe and the overseas nations can we
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nation which has undergone such experiences is bound to be
other countries. Britain, which after the war will be confronted
security-conscious to a very high degree.
with a grave need for increasing the volume of her exports to
To illustrate the point, I quote from the introduction
pay for food and raw material importe, will fall heir to many
to a book I wrote at the close of the last var, "The Making of
former German (and Japanese) markets. Instead of trading
the Reparations and Economic Sections of the Treaty",
with Germany, the United Nations will have more trade with one
"From wantonly devastated France had not departed
the fear and inherent hatred of the enemy who but
another. More jobs and more business will permit the United
a few months before had pierced almost to her heart --
the traditional enemy who had brought upon her the
Nations to pay part of the war's coste out of higher wages,
bitter days of 1870. With the world war already
history, the shadow of the Prussian still hung
over the Republic. France was fixed in her deter-
increased profite and greater tax revenues.
sination to ereot an impregnable wall, economic
For at least five and possibly geven years there
or geographical, or both against future German
invasion. This, in greater or lesser neasure vas
will be an enormous over-consuming demand for everything -
the attitude of the other Allies."
raw materials, manufactured goods, food, clothing, housing,
We Failed the League
transportation, machinery and capital. If the peace soon to
If "Russia" were substituted for "France", this
be written permite pen to look forward to the future with hope,
quotation would apply equally well to the present situation
not fear, prosperity of unpredictable length lies before us.
in Europe. Nor would France's experience after Versailles
lessen Russie's concern over her security. At Versailles,
Allay Soviet Feare
France did not obtain her "impregnable wall". Instead she was
How to insure our working with Soviet Russia is a
persuaded to place her reliance on the League of Nations, which
difficult problem, which has been preplexing many people of
we in the United States, who had put it forth, then refused to
late. I have tried to ask myself what would I think if I were
join. Is it then BO surprising to find the Russians shying
B. Russian?
from placing their first reliance for the security they are
Uppermost in my mind -- if I were a Russian - would
determined to gain on peace machinery still untested and whose
be the almost infinite suffering endured from the Germans during
predecessor failed? Is it BO surprising to find Russia insist-
the past thirty years. In World War I, Western Russia was
ing on what her officials regard as more realistic security
overrun and looted. In this war Russia was twice ravaged, as
measures?
the Germans went in and again as the Germane cano out. Any
The occupation of Germany will be difficult enough at
best. In the absence of common policy 8.8 to the long-range
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fate of Germany, the Soviets are bound to question Allied moves
changes in our country as we grew from thirteen colonies on
the Atlantic. When we recall that it was nearly ten years
as dictated by & desire to rebuild Germany into a buffer against
after the Revolution vas won, before our thirteen states
Russia. In turn, the Western Democracies will suspect Russia
of seeking to communize Germany. The Germans can be expected
could agree on & Constitution for ourselves alone, I an not
to resort to every imaginable trick to foment discord among the
dismayed that more was not done at San Francisco.
Must Understand Soviete
four occupying nations. They will play one nation against the
Relations with the Russians may continue difficult
others, one zone against the next, hoping to break the common
for & time, not only in Europe but on other fronts. Again I
unity of the Allies, 80 controls will be permitted to lapse,
point out, we should not be surprised that Soviet suspicions
giving her & chance to recoup, as after Versailles.
have survived our fighting together against the common enemy.
Support Eisenhower
When one reviews recent world history, one finds considerable
General Eisenhower, in my judgment, is ideal to head
cause for suspicion between Russia and the Western Democracies --
our occupation in Germany. His deputy Lt. Gen. Lucius Clay is
on both sides. After the Red Revolt in 1917, the Tearist powers
another excellent san, with whose work I an quite familiar. I
made three major attempts to reconquer Russia, efforts largely
have every confidence they will handle themselves effectively,
armed and supplied by the British and French. The deepest
with firmness and tact. Recently General Eisenhower described
himself as the "executor not policy-maker" in Germany. Give
significance of the Munich pact vas the exclusion of Russia.
It is not that all of Russia's acts were justified but it is
him an agreed upon policy. Don't handicap him.
While on the subject of Russia, I would like to add
important that we understand the Russian point of view.
Ruesia Must Cooperate Too
this general observation: I have no fear of the spread of
On the Russian side there must be equally sincere
Boleheviem in the United States - jobs and higher living
efforts to understand us. The Russians must appreciate that
standards are the proven anti-toxine. I have stressed the
refusal of Soviet authorities to permit free access to the
importance of lifting wage and hour standards all over the
countries of Eastern Europe has a most adverse effect on American
world. It 10 crucial if only to keep to a minimum the dis-
publie opinion and will jeopardize any program for the recon-
ruptive effects of the inflation already loose in the world.
struction of these countries. Another cause of suspicion has
And as living standards within Russia improve, the atmosphere
been & tendency for the Russians to act unilaterally in many
there should lighten, and some practices which strike us unfavor-
countries, Such actions irritate us less because of our interests
ably are likely to disappear. I as mindful of the tremendous
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126
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in those countries than because we feel & moral responsibility
to those peoples which we cannot shirk. On our part we cust
Confusion about Cartela
shift our peacemaking machinery into high gear and avoid delays
This Committee has asked that I discuss cartels.
which may prompt unilateral action.
First, 8.8 I cee it, we should determine just what ve mean by
The pledged word kept 1e the best antidote to eus-
a cartel. The Germane employed cartels as an instrument of
picion. Above everything else, there must be the most meticulous
economic warfare, which was what they did with every aspect of
observance on our part of all our obligations with the Soviets,
the German economy. Soviet Russia is an example of a completely
written or implied, while insisting firmly that they do the
cartelized state -- only one buyer, only one seller -- the
same. By doing our homework before going to conferences, agree-
government. Within the British Empire, trade preferences or
sterling bloc restrictions can accomplish the same effects as
ments can be free of ambiguity.
Before the var, business interests in this country
cartels; 80 can import and export quotas, compensatory pay-
acquired the greatest respect for the manner in which Russia
ments, currency depreciations, wage reductions or a lengthening
kept all contracts and observed all credit arrangements. Our
of hours. The last two are more disintegrating. Cartele are
admiration has been increased by her incomparable military
established for the purpose of advantage to those engaged in
accomplishments during the war. It would be tragic for the
then but these advantages can be obtained in many different ways.
Soviet at this point to permit doubte of their motives to mar
Are all cartels bad? Or are there good cartele as
this splendid record -- tragic for both them and us -- since
well? Is all competition good, no matter how destructive in
it would react against all who want peace.
result? Shall we return to the unrestricted jungle law of tooth
There are many detailed aspects of German de-militariza-
and fang? We have legislated for both sides of the argument.
tion and reparations not dealt with here which can be covered
We have anti-trust laws and we have laws and commissions which
in the discussion. The public statements of Messre. Pawley and
seek to restrain competitive practice.
Some Competition Bad
Lubin, our reparations commissioners, indicate a clear grasp
of the issues. Whether the reparations agreement will have to
In stabilizing farm prices, our government year after
be ratified by the Senate, I do not know. If so, the Russians
year approves cartel-like practices and I think you gentlemen
and British should be told that now.
will agree with me that it is a good thing. I have always felt
that in any area where competition becomes so disruptive as to
hurt the general good, the government vas duty-bound to correct
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127
Registration Not Enough
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Will the State Department or any other agency that ie
the worst effects of unbridled competition.
set up to handle such registrations know which agreements are
With some raw materials not produced in this country,
in the national economic interest and which are not? Do we
we may find cartels foreing us to pay higher prices. Should
have enough of a positive foreign economic policy in this
our government use ito influence to 000 that our manufacturers
country?
are not aqueered, particularly where materials vital to our
This question goes beyond patent matters. Are
defense are involved? We can protect ourselves somewhat by
American businessmen to be encouraged to invest abroad and to
keeping in reserve our stocks of these strategic materials.
widen their exports and are their interesta to be protected by
Patents Mean Know-How
the government or disregarded? What if we grant government
Foremost in the minds of the Committee, I gather, is
credite to & country like Boviet Russia? What becomes of little
the relationship between German, other foreign and American
business if it has to face an import and export monopoly of
manufacturers in the use of patents. In most instances, I think
another government? Under the Bretton Woods agreemente are
you will find that Americans have improved upon the processes
loans to be made to countries which may evade the agreements
which they obtained through these negotiations. Should the
through cartel-like methods?
Americans not have bought those patenta? If that is the desired
Bounded Policy Needed
policy, it can be put into effect simply by prohibiting the use
I do not want to seem to leave you in confusion on
of those patent processes in America. This would force the
this matter.-- What I am trying to get across is that there
things manufactured under those patents to be produced outside
has been too much discussion of this question without regard to
of the United States without benefit to our economy or increas-
the part it plays in the broader picture of the need for a
ing our own know-how.
coherent American foreign economic policy, which we still lack.
One proposal is that all international business
Every report from abroad indicates the different
agreements entered into by American firms be registered with
nations of the world are becoming more -- not less -- cartelized --
the government, eay, the State Department. Any businessean
cartelized in many different forms, especially as to foreign
should welcome such A law cince it would free him of danger that
trade. How free will the economy of any European country be
a business not taken in good faith in ona year could be accused
after this war? What if certain industries in these countries
against him years later, possibly under changed international
conditions.
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are nationalized? What then becomes their position and how
do we adjust ours to it? Suppose a United Nations registration
of all cartels were suggested? What would that cover?
Keep our Leadership
In making my recommendations, I have sought only to
stimulate action so that we will exercise the leadership which
is ours. I would not want to 800 that leadership which we have
held for 150 years now lost to others or wasted through disuse.
A vastly better world lies ahead if we use the intel-
ligence and gifts of nature that have been bestowed upon us.
We can live alone. Be sure of that. Let us then encourage
=
and help those who live with us to live our way -- -- not to copy
our way in detail -- but to stand with us on the broad base of
expanding human dignity and freedom.
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SPECIAL
131
TREASURY DEPARTMENT
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
INTER OFFICE COMMUNICATION
DATE 6/25/45
DATE June 25,1945
Secretary Morgenthau
TO
Mrs. Klotz
to
FROM
FROM
E. B. Fussell
Secretary Morgenthau
Congressman Wright Patman's "Tribute to Hon. Henry
Morgenthau, Jr." was mailed to the following:
Patman's statement to each County Chairman in War Bonds?
I want to find out from Fussell - did he send Wright
That was the original idea and there was some discussion
(Approximate figures)
that they wouldn't. I would like to find out.
War Finance County Chairmen
4,000
War Finance State Chairmen and State
Fussell is sending AND ~ memo
Publicity Men
100
College Presidents
1,700
are this He also is sending we some
Business & Industry Committee for
Bretton Woods
80
Federal Reserve Banks
12
copies of the article.
State Bankers Associations
50
Selected Individuals
124
12
Professional Organizations
220
Men's National Organizations
116
Women's National Organizations
219
Youth Organizations
6
Patriotic Organizations
71
Fest S in chicago
Labor Organizations
8
Church Leaders
128
7
Negro Organizations
National Committee Members
66
Religious Organizations
78
Veterans' Organizations
30
Total - 7,015
Regraded UUnclassified
SPECIAL
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TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE June 25,1945
TO
Mrs. Klotz
FROM
Secretary Morgenthau
Will you find out the list of persons to whom the
statement by Congressman Wright Patman was mailed? If
there were any left over, I would like to mail a few to
friends. I surely want to mail it to my own immediate
family. Please speak to de about it. I think the person
who knows about it is Ed Fussell.
RECISION
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OFF.
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(Not printed of Government expense)
Congressional Record
United States
of America
PROCEEDINGS AND DEBATES OF THE 79ᵗʰ CONGRESS, FIRST SESSION
Tribute to Hos. Heary Morgenthau, Ir.,
sesum republica were relatively stable is
Let no one think of the present Becre-
Secretary of the Treasury
largely due to arrangements - made
tary of the Treasury as & starry-eyed
with them.
Identist Intent upon only distant goads.
SPETCH
Secretary known aware-
His entire record shows . deep realiza-
HON. WRIGHT PATMAN
- of the Imminence of war in Europe
tion that his job is to serve the United
and the possibility at might become
Bistes of America and to people.
OF TEXAS
IN THE nome OF REPRESENTATIVES
world-wide, endangering the United
to the years preceding the outbreak of
Wednesday, June d. 2345
States, was demonstrated as early as
World War If be was estatanding in his
Mr. PATMAN Mr. Chairman, no
1926. In that year the impending de-
recognition of the necessity of that
discussion of the Beetton Woods pro-
valuation et the French france held
the United States should be prepared to
and would be complete without a
treads of grave trouble. If the devalua-
meet any eventualities.
tribute to the man who is primarily re-
tion should have set off a new interna-
B. was largily due to Becretary Mor-
spendble for this opportunity to build
tional-exchange war, the French eco-
genthera's instatence on American pre-
namie structure might be so weakened
that American aireraft fac-
a solid eronomie foundation for world
price and world progress. I refer to
by nots and strikes that Hitler, even with
tories were tooled up, well in advance of
Henry Morgenthau, Jr., the Beretary et
a military machine only half built, would
President Roments historie pica for
the United States Treasury. He has
have been encouraged to march in, with
50,000 airplanes, to available their obliga-
held that position longer than any other
the thought that be could take France
tions.
person in the history of the United
with little or no straggle.
Il was largely due to Investigations
States, with one exception: be has done
This vas part of the reasoning that TH-
Isunched by the Treasury Department,
more during his incumbency than any
sulted is the United Blaim, Great Britain,
nm before attack on Polant.
other Becretary of the Treasury. with no
and Prance Joining in the triparille
that this country know what critical and
agreement of 1938. The purpose of the
strategic materials IL misht require, if
exerption.
The Bretton Woods program for the
agreement was to maintain . reasonable
war should bottle up our customary
parity between the eurrencies of the -
sources of rappitr. seross the Allantic and
International Bank and Fund la the eul-
mination of the policy of International
operating nations. Balland. Beightm,
the Pacific.
and Switzerland 1008 joined the engina-
n vas langely due to Secretary Mot-
monetary and financial cooperation
which the Treasury Department insure-
tom of the plan and the members of the
smither's personal interest that realistic
reled under Becretary Morgenthau.
so-called starting bloc Ikrutar benefited
programa of helping China and pan-
The decide et the 1990's, partly as a
from exchange stabilization
American countries meet their urgent
If, at that time, there had been the
economic problems were lausched. Bat
result of the depression, was a period of
machinery under which economic and
for these programs Japan might have
serious montary disorder. Countries
political cooperation could have been de-
erushed China in relatively short under
were unable to maintain the value of
their exchanges and world trade declined
veloped slong with this montary -
and Hitler and Municini might have
been able to establish, in our own hemi-
rapidly. Difficulties were Intensified by
operation, the AXIS Powers micht well
the fact that Germany, girding for . war
have tem curbed and this terrible war
aphere, military bases for war spinit the
United States.
of aggrention, Insugurated a virtual eco-
prevented. Unhappily, there ⑉ DO
namic reign of terror, using restrictive
such machinery.
Some may say that such reasoning to
too much in the entegory of what might
and discriminatory exchange controls to
Secretary Margenthau remained, how-
attack established trade relations and to
ever, constant in Ista knowledge that ec-
have been. But there em certainly be DE
disputing the solid evidence of facts and
obtain . large supply of war materials.
enemie cooperation must underlie politi-
Beares.
Secretary Morgenthau realized very
est cooperation and mud provide . solid
Let us tarn to the matter of war financ-
early that only through international
foundation for any endoring prace. He
Ing. Becretary Morgenthau's record
cooperation would = be possible to free
availed the propitious time for bringing
resounds to his credit at every point. Its
world trade from the mounting volume
the peace-loving nations of the world to-
has urged, in one Congress after an-
of currency restrictions.
gether and the Bretton Woods Confer-
other, revenue programs designed so keep
The fact that in the latter part of the
ence came as the result of his untiring
the Nation's finances upon & sound basis,
1930's the exchanges of the Latin Amer-
efforts and unflagging seal.
10a advice has not always been followed
600438-13120
Regraded Unclassified
MICROSTAT
PAT.
MICROFILM
ROLL
NO.
RECISION
TRADE MARK
2
CONGRESSIONAL RECORD
to the letter. n is to his credit that he
today. And trut for the start that was
from doing their daily (sb and well.
has urged sound financing at all times
made, leng before war clouda hung ever
Every day, letters come to - from people
and that he has opposed such plans as
the world, this Nation would never have
who ask "What ess I de to help?" Our plan
the forgiveness of $8,500,000,000 of taxes
bem able to distribute the bonds so widely
to offer securities attractive to ACE classes
due, when income taxes were placed on a
or to make effective generally the eco-
of Investore is an alteingt to stawer this
pay-si-ve-go basis, It to unfortunate
nomic that have been estab-
question. : can think of no other single
way in which e may people nan become
that in this matter a past Congress falled
lished.
partners of thair Generament is facing this
to heed his advice. But his leadership
The prople of this country recognize
emergency.
has been preminent at all times. And is
what has term done and what is being
is due to his careful planning that the
Bome people in this country today are
done. And their record in overrubrerib-
great expansion in the Pederal debt has
seetng another side of Becretary Morgen-
the every war loan to date will I -
born echieved with stable interest rates-
than D: a quite in keeping with his
confident, be matched in the Mighty
far lower than have ever been achieved in
trust to the people as a whole that be
Beventh Drive, now in progress.
any previous war. If you who hear DE
should be shocked at the discovery et
The people know Brentary Morgen-
will think back to the 416-percent rate
maintactors. It is quite in keeping with
than is right, not only because they see
which prevailed during World War I, and
his determination to protect the Inter-
the results of his policies, but because
contrast this with the 1%-percent rate
esta of the millions of mm in uniform,
they know his philosophy, 21 is the phil-
prevating today, you will need no fur-
the $3,000,000 individual taxpayers and
exply of Thomas Jefferson, of Andrew
ther argument en this point.
the 85,000,000 bondholders that he has
Jackson, of Abraham Lineste, of Frank-
M a result, this country is saving sp-
declared unrelenting war upon the block
En Reservelt, of Harry Truman. These
proximately $4,000,000,000 a year.
marketeers, the rocketerrs and the other
men know the people. They trusted the
This fact is not merely a tribute to Bec-
war profileers who see in this terrible
reasoned, informed juigment et the pro-
retary war record. n
confict only an opportunity to amass
ple. And so does Henry Morgenthau, Jr.
comes about as the result of careful
personal wealth-and dodge their taxes.
I hardly need to remind you of the
planning, prudent management et the
II predict stem Justice for these tax
presture that was so evident, early in
Nation's final affairs is time of peace,
evaders, because : know the apirit that
the war, for a system of compulsory say-
plus intelligent development of new Ideas
antmates Becretary Morgenthau and I
Ings. Dut Secretary Morgenthau was
for the benefit of the Government and
know, too, what delight he takes in nd-
adament upon this taras. He wanted
the people.
ministrative efficiency, in accomplishing
people to Invest their aavings in Govern-
Arrangements for war financing are .
results, titulaver be undertakes.
ment bonds, net under compulsion, but of
case in point. Back in 1935, when United
their free will-because they wanted to
a is, porhaps, & long cry from the
States Basings bonds were first offered to
win the war and because United States
tripartite accord of 1536 to the campaign
the public, there was no threat of war.
bonda were the world's best and subert
against tax evasion, and some et my
But # seemed to Becretary Morgenthau
invoicement. And Berretary Morgen-
bearers may my there is little connee-
that It would be a good thing for the
these's reasoning on this usue is so six-
Non between war bond compaigns and
Government to have the national debi
mificant of the philosopher guiding all his
Bretton Woods. But I want to point out
distributed as widely as possible, and
actions that I quote from what he said,
that the record of a man provides the
that it would be a good thing for the
back in 1941, when he first arked as-
best yardstick to missure his stature.
people to encourage their thrift, and
theriestion from Congress to borrow from
I point to the record of 8:cretary
their interest in National Government, as
the general public, through a deferar sav-
Morgenthau because it la an suistand-
its bondholders.
the bond campaign. The Secretary
the record. Mr has forearen develop-
We called them "Baby bonds" then.
said:
ments en cerasion after occasion. He
But the Baby bende of 1935 and succeed-
There in the country today - -
has seted promptly and effectively. He
Ing years give into the Defense bonds
whatesing desire - the part of sendy every
NW, long ago, the necruity for . stable
that enabled this eventry to finance the
man, wamen and child to make a direct
economic order If the world was to enjoy
preparedness program. and after Decem-
and suipible contribution to the national des
prace. Today " have an opportunity
ber 1, 1941, they became the war bonds
fines. Six rught to en them . - et per-
to take advantage of his foreight, his
that are held by 83,000,000 Americans
social participation Regued that which come
planning. his wisdom.
650438-12128
- - -------------------------
Regraded Unclassified
RECISION TRADE MARK MICROSTAT/ REG. U.S. FAT. OFF. MICROFILM
ROLL NO.
134
135
25 June 1945
June 25, 1945
Secretary Morgenthau
Mr. Luxford
Dear Ed:
The San Francisco Conference is
You wanted me to remind you that in our publicity
a great triumph. You handled some
extremely difficult situations with
relating to the Elliott Roosevelt matter we should
great intelligence, patience and good
emphasize that nothing in Hartford's return disclosed
humor.
The result la a very hopeful out-
Elliott Roosevelt's name and that, therefore, the
look for organized and purposeful peace.
Treasury had no notice whatever of Elliott Roosevelt's
I give you my most cordial con-
part. This, to my mind, is of key importance in
gratulations.
Sincerely,
demonstrating that the Treasury was not soft-pedaling
(Signed) Benry
the matter because of Elliott Roosevelt's interest.
The Honorable Edward R. Stettinius
Secretary of State
HEG/mah
AFL:ehb
25/6/45
Regraded Unclassified
RECISION
TRADE MARK
MICROSTAT/ MICROFILM
ROLL NO.
136
137
June 25,1945
June 25,1945
John Pehle
Mr. Gamble
Secretary Morgenthau
Secretary Morgenthau
These last two cooling machines which you had sent
Have a look at the letter which came in last week
down to New York for ne - would you please inquire whether
from Chester Bowles in which he talks about cooperation
they bring in fresh air from the outside or do they simply
on enforcements between the Treasury and OPA. Read it and
cool the air in the room and recirculate it? The machines
let me know whether there is anything in it I should be
give off a peculiar odor and I had a very bad headache from
particularly familiar with, also whether I should answer
them and I wonder if that is from the machine because they
It. Get the letter from Mrs. Klots. this rithe hab beirer mous.
don't bring in fresh air from the outside. I would appreciate
it If you could get ne that information today. Thank you.
The machine is called a Monarch. Gauble tocked to Horp
6/25/45
RECISION TRADE MARK MICROSTAT/ MICROFILM
ROLL NO.
138
June 25,1945
Mr. Gamble
Secretary Morgenthau
T have been pleased to note that the Kansas City Star
is carrying a lot more news on Car Bonds. I want to
compliment you and whoever your representative is in
Kansas City on the good job they are doing now. File
RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL
NO.
'ohr
PLEASE TRANSMIT BY WIRE.
June 25, 1945
139
Sent to Mr. Latta at the White House
T transmittal to the President
MESSAGE FOR THE PRESIDENT:
Pleased to inform you that we are announcing
tonight for Tuesday morning's papers that we have sold
over $20 billion of War Bonds so far.
With kind regards,
Henry Morgenthau, Jr.
$
Regraded Unclassified
141
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE June 1945
TO
Secretary Morgenthau
FROM
Mr. Gaston
I attach 6. draft of a letter to Forrestal, which is
not to be mailed but delivered personally by Waesche. The
bill sets a post-war authorized strength celling of 3,500
officers, 1,400 warrants and 30,000 enlisted men, which
will enable Coast Guard headquarters to go ahead and make
some plans for reduction and for taking on the enlarged
work of air-sea rescue and aids to navigation, principally
Loran stations, 5. new type of navigational aid. The actual
strength of the Coast Guard in personnel in any year will
of course depend on appropriations rather than on this pro-
posed authorization.
Waesche Was over discussing the matter with me today.
The air-sea rescue work will undoubtedly attain very con-
siderable importance. Present ideas are to combine it with
5.
weather observation. Thirteen weather observation stations
are now being maintained, which require something like
fifty ships. Waesche's idea is to use the Liberty type
of ship and to equip each one with one or more helicopters.
They now have 8. considerable number of Catalina flying boats
taken over from the Navy for use In rescues from shore and
In fact they are taking pilots under training out of the
water pretty frequently along the coast.
I expect to discuss soon with Clayton and Waesche the
possibility that Coast Guard may be called upon to take
over some international rescue and navigational aid functions.
If this should develop Coast Guard would probably need more
men than are provided for in the bill attached, but it will
be a good idea to get something moving.
PRECISION
TRADE MARK
MICROSTAT/
MICROFILM
ROLL NO.
142
143
June 26, 1945.
JUN 19 1945
The Monorable
The Secretary of the Treasury
My dear Mr. Secretary:
I have received your letter of June 19 with
My dear Mr. Secretary:
which were transmitted a copy of & proposed bill
There are transmited herewith a copy of a proposed bill "To establish
"to establish the permanent military strength of
the permanent military strength of the Coast Ouard and for other pur-
the Coast Cuard and for other purposes" and copies
posse", together with copies of proposed letters of transmittal to
of proposed letters of transmittal to Congress.
Congress explaining the purpose of the proposed bill.
I note that it is provided that the bill shall
The proposed Mill provides that it shall be effective on the date of
become effective on the date of the termination of
the termination of the present wars. Since at that time or shortly
be authorized (a total of 3500 commissioned officers,
the present wars and that the enlarged personnel to
thereafter it is expected that the Cosst Cuard will be returned to the
jurisdiction of the Treasury Department the bill is of primary concern
1,400 chief warrant and warrant officers and 30,000
to the Treasury Department. It is proposed at this time so that proper
planning GAR be ande for the peace time activities of the Coast Guard,
enlisted men) is based on personnel requirements
In this connection, attention is invited to the Report of Board of
to carry out augmented post-war functions, including
Visitors of the Coast Guard Academy composed of Representative Cordon
air-sea rescue, operation of direction finder stations,
Canfield, Chairman, and Smaters George L. Radeliffe, Edward V. Robert-
and operation of new electronic aids to navigation.
son, W, Lee O'Daniel, and Thomas C. Hart, and Representatives Joseph E.
Talbot, Ralph Daughton, Eugeno J. Keogh, Chase o. Hoodhouse, and Oliver
The proposed bill has my complete approval and
F. Weichel, members, and Captain Ellis Reed-Hill, UJ00, Secretary, from
the Treasury Department will be glad to cooperate with
which the following is quoted:
you in any way you may desire to forward its enset-
"The board understands that Coast Guard headquarters
ment.
has developed & postwar plan which has been approved by
the Savy subject to such changes as subsequent events my
Your courtesy in submitting the bill for our
dictate. It 1a recommended that legislation necessary to
consideration is greatly appreciated.
effectuate these postwar plans with respect to personnel
and functions should be Introduced and enacted at the
Sincerely,
earliest possible date." (91 Congressional Record, June
12, 1945, p. A3044).
(Signed) H. Morgenthaw, Jr.
The authorized strength of the Coast Guard provided in the proposed bill
Le based on personnel requirements to carry out the functions to be
assigned pursuant to the post war-plane for the Coast Guard in addition
to its normal peace time functions. These include air-sea reseue, opera-
tion of direction finder stations, and operation of new electronic aide
The Monorable
to cavigation, functions which are considered necessary to the post-war
neval and connercial interests of the United States.
The Secretary of the Navy
Regraded Unclassified
PRECISION TRADE MARK MICROSTAT ass. u. PAT. OFF. MICROFILM ROLL
NO.
144
145
The Honorable
The Secretary of the Treasury
on the proposed logislation are requested. The proposal to
The Honorable
Your views be submitted to the Bureau of the Budget for advice until as
The President of the ente
will not to the legislative program of the President
its relationship is received. Since it is desired to secure prompt action
NPI
your on this answer proposed bill an early reply would be greatly appreciated.
There Le transmitted herewith . proposed bill "To establish the
Very truly yours,
permanent allitary strength of the Cosst Cuard and for other purposes".
61 famestal
The purpose of the bill is to flx the permanent peace time strength
of the Cosst Cuard. It provides authorization for thirty five Instrud
comissioned officers, fourteen hundred shief varrant and varrent officers,
and Unreased enlisted sen. (1though 11 is previded in section 7
of the peoposed add that it will not because offective will ais notthe
after the termination of the present ware, 11 la nost essential that is
be enseted at this time - that proper planning can be nade for Live
peace Line activities of the Coset Cuard. it Le meassary - to plan
the currieulum of the Const Cuard /exdemy and schedule admissions of
cadeta at the to provide the trained officers wie dil perform
Incl.
Lie post-war dubles of the Const Oward. It La also destrable to effect
. planned true fer of time permanent officers and - of Live service to
the namel pesso the duties of the Corst Cuard, tranfar 18 possible
penditing reserve personal to perform duties instdent to the realning
special wartize functions of the Const Guard during the period vian such
functions are bein: tendented.
The idulte on the personal military strength of the Const Cuard -
established lay Live proposed bill have veen determined on the busia of
detailed plane for the post-sar duties of the Const Ounrd. These daties
include the pressr passe time functions of Line Cosst Cuard such -
maritime law enformat, protection of Lie quatine revenues, protestion
of life and property from Line perile of Lia sea, conducting the lierta
Alantie See potrol, and establishing and existaining al do to navigation.
The plans also provide for certain aplification of these prever functions
and for the undertaking of new related frestions which will be performed
by the Cones Cuard. These include air-sea resous, operation of direction
finder stations, and operation of new electronic des to nevigation.
The performance of these functions by the Cosst Cusrd 10 provided for by
deschilisation and post-war plans for the posse time functions of the
Cost Ouard and are related to its general duty to maintain - state of
military resultance to operate with Lie Name in Line of war. These
- 2 -
Return to 6-7
COMQ (L)014
Regraded Unclassified
PRECISION
TRADE MARK
MICROSTAT
166, D. PAT. OFF. MICROFILM
ROLL NO.
146
147
CO-L=OLA
(L)
00-014
functions are corsidered recessary to U.e post-ver nevel and commercial
intereste or the United itates.
Authority La provided by the proposed odli to appoint commissioned
officers is the Cosst Churd fre among the chief sermet and warrent
officers and enlisted nen of the regular Coast Guard, terporary comissioned
MEMORANDOM TO ASSISTANT SECRETARY GASTON
officers, moters of the Coast Cuard Deserve, amiers of Lie former Duress
of Marine Inspection and Navigation, and licensed officers of the United
Subje Proposed legislation to establish the post-mar allitary
tates liarine. It is provided that persons cominaioned from
strength of the Cosat Cuard
these sources met be found by U.e of the Treasury to be
sentally, sorally, professionally, and qualified. They will be
1.
I - forwarding herewith by special messenger & letter dated
appointed in (rades appropriate to their qualifications and may be assigned
19 June, 1945, from Mr. Forrestal, Secretary of the Havy, addressed to
to general or special duty. It is Lotended to comission qualified persons
the Secretary of the Treasury, with 1ts enclosures consisting of a
from these sources to fill the officer needs of the Coast Chard. It is not
draft of proposed bill To establish the permanent military strength
intended, however, immediately to fill the entire authorised complement
of the Coast Guard, and for other purposes" and copies of letters of
by such appointments. The complaint will be (moually filled over a
transmittal.
period of years by even appointments and by the regular graduates from
2.
the Coset Cuard loaderg. Until such Line, 11 La planned Le retain -
This proposed legislation 1s of grimary interest to the Treasury
sufficien naier of officers of the lieserve - active duty to carry out
Department and, as & reading of Mr. Forrestal's letter and its enclosures
Lie authorized functions of Live Costs Duard. Except possibly during the
will show, it is important that prompt action be taken by the Treasury
demobilisation period, the number of such officers on active duty
Department in replying to Mr. Forrestal's communication.
along with the regular and temporary officers of the Coret Cusrd will Dever
3.
expeed the total complement authorized by the proposed bill.
After you have read the letter and enclosures, please hold then
on your desk and I will come over and discuss the matter with you in
a day or so,
It will be appreciated 1f you will LAY the bill tefore Us
similar bill le being transmitted to the House of representatives.
L.R. MAESCHE
Very truly yours,
461.
Return to 6-7
Return to 8-7
applicable by
Lt.Comdr.
Cosst Cuard B.- Legal dv.
Ellisab
Regraded Unclassified
NOTE
Strength as of May 31, 1945
Commissioned Officers, 11,040
Chief Warrant and
Warrant Officers
1,632
MR. CHARLES BELL'S OFFICE TO
Inlisted men
154,940
Total 171,612
Strength as of November 1, 1941
Commissioned Officers,
793
Chief Varrant and
Varrant Officers
910
Enlisted men
22,234
Total
23,937
2"
149
A BILL
to establish the permenent military strength of the Coast Guard,
and for other purposes.
be 11 spected by the Senate and lieuse of of the
United States of America in Congress assembled, That the total mainer
of regular comissioned officers (both permanent and temporary) -
the active list of the Coast Guard (exalusive of these halding a runk
by virtus of office, of chief warrent officers and of additional numbers
as authorised by Law) shall not expeed three thousand five hundred,
distributed in grades in such propertions - the Secretary of the
Treasury determines the meda of the Coset Guard require, but within
the proportion provided by law.
SEC. 2(a) The President 1a hereby authorised to appoint, by and
with the advice and consent of the Senste, comissioned officers in the
Coast Quard in grades appropriate to their qualifiestions, - determined
by the Secretary of the Treasury, from mong
(1) Chief varrent and warrant officers and milisted
- of the regular Coast Guardi
(2) Temporary comissioned officers;
(3) Members of the Cosst Ouard Reserve;
(4) Members of the formar Bureau of Marine Inspection
and Nevigation, Department of Comerce, who were
transferred to the Coast Guard by Executive Order
No. 9083, dated February 28, 1942 (7 P.R. 1609),
as manded; and
(5) Licensed officers of the United States Merchant
Marinej
as the needa of the Coast Guard say require, and .. are found by the
Secretary M be sentally, norally, professionally, and physically qualified.
Officers comissioned under this section shall be comissioned for general
daty or special duty in accordance with their qualifications. A person
connissioned to perform special duty in accordance with kis qualifications
shall be examined for promotion only with respect to those qualifications
which pertain to his specialty.
(b) Each appointee under tide section shall take precedence
with other officers comissioned in his grade under this section na the
Secretary may determine, and with other officers in his grade in accordance
with the date of id. comission in such grade in the regular Coast Ouard.
S&C. 3 The total mmber of regular chief warrant and warrant
officers (both permanent and temporary) on the setive list of the Coast
Guard shall not exceed fourteen hundred.
S.O. 4(a) The President is hereby authorized to appoint, by and
with the advice and consent of the Senate, as chief warrant officers of
the Coast Quard such of the persons included in subsection (a) of section
2 48 the needa of the Coast Cuard may require and as the Secretary finds
to be mentally, norally, professionally and physically qualified.
(b) Under such regulations as be may issue, the Secretary is
hereby authorized to appoint na warrant officers of the Coast Goard such
of the persons instituded in subsection (a) of section 2 as the needs of
-2-
the Coast Guard may require.
(e) Each appointee under this section shall take
procedence with chief varrat and warrant officers appointed under this
section as the Secretary may determine, and with other chief warrant
and warrant officers in accordance with the date of his commission or
warrant in the regular Coast Guard.
SEC. 5 The total number of enlisted persons (both regular and
temperary) on the active list of the Coast Quard shall not exceed thirty
thousand.
sec. 6 Until such time as the number of commissioned officers,
chief warrent efficers, warrant officers, and enlisted men (both regular
and temporary) of the Coast Guard shall be adequate to neet the needa of
the service, the Coast Guard 1a authorized to employ on active duty
personnel of the Coast Ouard Reserve in such numbers that the totals of
comissioned officers, older warrant and warrant officers, and enlisted
man, regular, temporary, and reserve, will not exceed the totals authorised
by this Act.
SEC. 7 This Act shall not take effect until six months after the
termination of the ware in which the United States is now engaged as
preclaimed by the President or such earlier termination date as the
Congress, by consurrent resolution, may fixe Provided, That the permanent
military strength of the Coast Quard herein established may be temporarily
exceeded for the period required for the release of Coast Guard personnel
Noval duty and their demobilization if not completed by the effective
date of this mt.
PRECISION
TRADE MARK MICROSTAT MICROFILM ROLL NO.
153r
152
State of lew York,
0
KERNAN AND KERNAN
Court of Appeals.
COUNSELORS AT LAW
FRANCIS . KERMAN
WARNICK KERNAN
EDWARD e BURNS
WILLIS o MORGAN
HOWARD - TAYLOR
THOMAS . KERMAN
UTICA,N.Y. Thursday
CHARLES PHILLIPS
JAMES . KERNAN,JR
Irving Schmun Chip Judge
36 West 44th Street
New York 18
June 28th, 1945
My Dear Judge dodre:
Personal and Private
Referring t 05 telephone talk of
The Honorable Henry Morgenthau, Jr.,
Office the Secretary,
yesterday, V reglish t org that The decom, about
Treasury Department,
Washington, D.C.
whom has - advidenj, and at ~ the -
Dear Henry,
Connect
I enclose a letter I have received
from Mr. Kernan. I an sorry that I do not know of
TL que a + Camege in difficult + ensured
any person whom I could recommend with any degree
have Y has not the cofficulty
of confidence.
Clou to officer cood quity V+ my them
Sissie joins me in love to Siasie and
Thereof, however, who 7 "by TCT VTLI V his
yourself.
Affectionately,
the L have and byd, and % give - the, L would
rough
do his what tecenthis it
& Then words, Then would & he divided logo
Into a in regards as always
Sincerely
tranich Manan
Doaraded
RECISION TRADE MARK MICROSTAT/ MICROFILM
ROLL NO.
copy
154
Kernan and Kernan
Utica, N. Y.
Counselore at Law
Thursday
My dear Judge Lehman:
Referring to our telephone talk of yesterday,
I neglected to say that the person, about whom we were
speaking, served at one time as Corporation Counsel.
The question as to courage is difficult to
answer, because my acquaintanceship has not been suffi-
ciently close to appraise much quality. It say bear
=
thereon, however, when I say that I think him to be honest
and loyal, and if given any task, he would do his utmost
to accomplish it.
In other words, there would be no divided loyalty.
With ay wara regards as always
Sincerely,
/a/ Warnick J. Kernan
Regraded Unclassified
156
Messrs. I. 0. Alk and 1. Arnold
25 June 1945
G
155
Secretary Morgenthau
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATEJune 25,1945
TO
Secretary Morgenthau
I want you to know that I appreciate
your fine work in connection with the
FROM
F. Coe FC
recent agreement with the Alien Property
Custodian concerning the disposition of
These two men in the Legal Division, working closely with
German and Japanese assets.
Foreign Funds Control, did & bang-up job on this Executive Order.
Mr. Aik is now in the Philippines out for his and Mr. Arnold's
record I hope you will consider something like the attached note.
0.9.
Amp
MLHoffaanier 11 June 1945
PRÉCISION TRADE MARK MICROSTAT MICROFILM
ROLL NO.
157
158
June 25, 1945
DRAFT
MEMORANDEM FOR THE FILES
TOP SECRET
Subject, Traft Telegram from the President to the Prime Minister
TELEGRAM TO PRIME MINISTER CHIRRILLE FROM RESDET TRIMAN
Concerning Phane II Lend-Lease
On June 25 the Secretary harded the attached draft telegram to
This is in reply to your Versage No. 57 of May 28.
Mr. Promo of the State Department telling him that he did not intend
to send this over formally to the State Department but that Mr. Beans
le shall of course carry cut in full the understanding reached
night instead give it to Mr. Grew with the information that this was
butween you and President Hoosevelt at the Quebec Conference.
the type of telegram Secretary Morgenthau thought should be sent to
Frice Minister Churchill in response to his nensage of May 28.
The ar Department officials concerned with the lend-lease pro-
gran understand this and I as confident that there will be adequate
Previously I had explained to the Secretary that me understood
appropriation to carry out the decisions reached by the Combined
that Messre. Clayton and Vinson were now discussing this matter and
Chiefs of Staff.
that the State Department officials with whom we had been conferring
had told us the matter was out of their hands. I said we lind a draft
ready but had not cleared it with IT. White or the Secretary. I also
showed the Secretary an alternative wording for the proposed telegram
which added the phrase "a" I an confident you will* and which would have
served to resind the Primo Minister that be too had made certain under-
takings at Quebec. The Secretary said he 114 not think that these words
should be added.
In the course of the conversation the Secretary repeated to Mr. Peans
de objections to the telegran which had been drafted and to the failure
of those concerned to furnish us with full copies of all the correspondence
and of the incoming telegran when 15 reached them. Be clso mnde it plain
that he had liked the reply which Judie Vinson had nemt to Secretary
Stinson on this matter under date of June 13, see attached.
Frank Coe
FC
Draft telegram handed to Finance by Secretary Morgenthau, June 25, 1945.
June 21, 1945
Regraded Unclassified
RECISION
TRADE
MARK
MICROSTAT
MICROFILM
BOLL
NO.
159
160
TOP SECRET
TELEGRAM TO PRIME MINISTER CHURCHILL FROM PRESIDENT TRUMAN
I have gone into the question that you raise in your nessare (No. 57)
of May 28 in regard to lend-lease during the Japanese Tar. - intend to
furnish lend-lease during the Japanese war in accordance with the general policy
discussed between you and President Recoevelt at Quebec on September 14, 1944,
The shall, of course, carry out the understandings reached
and that was the basis for the discussions between American and British
representatives in Eashington in October and November 1944 in regard to
between you and President Roosevelt at the (tuebed Conference
Lend-Lease requirements for the first year following the defeat of Germany.
In the light of the anticipated war strategy lend-lease will be furnished
as I an confident you will.
on the basis that will permit a partial and equitable reconversion in the
United Kingdom, and plans have been worked out here for your representatives
on the CFRD to make available full information on the Pritish roconversion
program to American officials responsible for the administration of lond-loase.
You, of course, realise that the policy I have indicated does not
necessarily mean that either the military or the non-military program for
the coning year will be equal to the lend-lease requirements se estimated
in the meetings of last October and November. Those estimates were subject
to changing strategic demands as well as to supply cousiderations and con-
siderations of procurement and allocation, and to the provision of the
necessary funds by Congress. I have requested Congress to appropriate funds
that will make possible lend-lease deliveries to the British Commonwealth
in accord with the spirit of there earlier understandings, and I an confident
that lend-lease will continue to be a powerful weapon in bringing the war to
a speed: and victorious conclusion.
In connection with the foregoing, is has come to my attention that the
cold and foreign exchange holdings are now considerably higher then
was anticipated at the time of the Phase II discussions. I do not wish
to propose reopening the Phone II discussions on this account. However, I
would like to riquest that your Government relax its position with respect to
permitting dollar payments on certain items, particularly those where the
unwillingness of your Government to make payments leads to political critician
in the United Status. For example, it would be of considerable assistance if
your Government relaxed its restrictions on dollar payments for the proceeds
of U.S. Government property sales in the Modle East and elemhore; if the
U.K. continued to take its share of the burden of the military relief and
UNRA programs in Evrope: and if dollar payments were allowed on other items
which arise from time to time in our relationships. I urge that you provide
this Claribility in the long-term interest of both your country and mine.
State
par
Treasury
Dodget
Cid
one
OPD A-C D
6/20/45
Alternative version rejected by Secretary, June 25, 1945
Draft telegram vetood by the Secretary June 25, 1945
Regraded Unclassified
RECISION
TRADE MARK
MICROSTAT/
MICROFILM
ROLL NO.
161
162
SECRET
TOP SECRET
19 June 1945
PURCHASE
The lionorable
PARAPEPASE or A MESSAGE SENT DI == max MINISTER TO 195
PRESIDENT OM MAY 28th, No. 57
The Secretary of State,
linalington, D.C.
I an distressed to have to bother you with tido telogram then
a standatill many - the subject and 1% is celt on all sides here that the
no other graver matters are pending. Dut nachine has come to
our Vr. Secretary:
natter should be referred by of to you.
Junes de Waxwell to General 8.5, Greenbaur inclosing a draft of
This acknowled os receipt of letter of 9 June 1945 from I/r.
Then I not President Receevalt at Quebec in September 1944 ne In both
initialled an agreement about Lond-Loase after defeat of Corseny.
the proposed cable from the President to the Prine linister in
with that agreement a. detailed plan worked out with your
comment on this inft.
response to the Prixe Minister's cable of May 28, and requesting
accordance Administration by the Keynes Sinclair Wission. It 10 on this basis that
our ;roduction plans have been carte.
Testerday I received from the Director of War libbilization and
hear that your par Department has told 0.00 people in askington
The Reconversion a Mar dated 13 June 1945, a copy of which is attached.
that they I now are expecting so large a out in their forthooming appropriations
proposed cable appears to the Mar Department to be consistent with
for United States Air Corps that supplier to us must be drastically Those cur-
it tike direction contained in that letter. If the cable is to be sent,
tailed below schedule of our requirements as agreed last Activen.
of course subject to auboequent nodification in the
second sentence read as follows:
in believed that its accuracy would be improved by making the
requirements of changes in strategic situation. I an hopeful that our require-
light as agreed last tutuan can now be reduced but déails of reduction
*in intend to furnish lend-lease during the Japaness far in
sente discussions between our respective Chiefs of staff which will
accordance with the general policy discussed between you
depend have upon been completed before May 31st. Heanwhile I hope your people Cuebec
and that 103 the basis for the discussions between American
and President Receivelt at (tabee on September 14, 144,
not be told that principles your predecessor and I agreed to at
can stand and in particular that appropriations given your Ter Department
and British representatives in lasidnaton in Cetober and
will still be enough to provide for our needs as finally worked out between us.
November 1944 in regard to lond-loase requirements for the
first year following the defeat of Comany."
have for appropriations been for military lend-lease were arrived and
It should be noted, however, that the lar Department requests
printe presented to the Congress, under policies considered as,
which the furnishing by the Tar Department of only those anong other
things, by the Joint Chiefs of Starr, which contemplate, appro-
forces sopire on the predise that the Empire will maintain by,
British are not available to, and cannot otherwise be provided materials the
its for the war against Japan to the fullest possible extent its from
own stocks and production.
cable. the may be necessary, therefore, for the mr Department to proposed request
Pdo It policy is not in accord with the implications of the
direction contained in the letter of 13 June 1945.
Congress for funds for the specific purpose of carrying out the
Sincerely yours,
Incording telegram from the President
Secretary of Maz.
Letter from Stinton to Crew conterning Vinson letter.
Regraded Unclassified
RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO.
163
164
OFFICE OF WAR MOSILIZATION NO
Washington 25, D.C.
June 13, 1945
Ky dear I/n Secretary:
7th Loon Down Desk
har Pinance Division
Your letter of HAY 15, 1945, with reference to the 1. quirments
Trensury Department
of the British Empire for war material for the period following
Washington 25, D. C.
VE-Day, was the subject of a discussion held In my office on June 4,
Sp. Release ">-/"
1945, with Under Secretary Patterson, Mr. Crowley, Mr. Clayton and no.
RELEASE Alla AD Ptin, JULE 25 - AID RADIO LISTIMS
It visa agreed that the tentative principles emunciated in your
letter were not broad enough to cover the understanding rencired between
WASHINGTON, D.C., June 22, Decretory of the Treasury
the Inte President and the Prime Unister at Quebec.
livery in will held the spotlight on the
In general, it was agreed that, in accor ance with those under-
standings, lend-lease should be furnished on a basis with would perait
"Spotlicht Tands* program June 27th, shen be
proportional and equitable reconversion in the United Kingdom. It
was further agreed that the requirements estimated in the meetings held
personally interviewe : just-scrived vuteran of the Okinawn
in October and November 1944 abould be accepted as the baris for pre-
sent requirements. Such estimates, however, are always subject to
bettle during the program's brondenst over the thitual
charge in the light of stratogic dezanda and supply considerations.
Zetwork Dron 2:30 to 10+00 Palley a.
I alsume, of course, that the Tar Department's budget requests
appropriations adequate to minill those comiticants.
Sincerely yours,
are
(Signed) Frei If. Vinson
Director
The Honorable
The Secretary of Har
Washington 25, D.C.
Letter from Vinson to Stinson on Phose II.
Regraded Unclassified
RECISION TRADE MARK MICROSTAT MICROFILM
BOLL NO.
165
June 25, 1945
Dear Alan:
I an giving this statement out this after-
noon for tomorrow morning's papers.
As you most likely know, I am going on the
air again Wednesday night, and I wonder what you
would think of the Idea of our using the three
minutes' time to say something about seeing this
war through rather having me interview another
soldier.
After you have read the press release, I
would appreciate receiving a telephone call from
5
you.
Sincerely yours,
(Signed) H. Marcenthau, Jr.
Mr. Alan Barth,
The Washington Post,
Washington, D.C.
Regraded Unclassified
RECISION
TRADE MARK MICROSTAT/ MICROFILM
ROLL NO.
166
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE 25 June 1945
President Truman's Vo
TO
Secretary Morgenthau
4
Record AS Senator, 1935-1944
For
Against
FROM
J. W. Pehle
1935
1. Repealing income tax publicity.
1. Reduction of relief appropriations from
2. Social Security Act.
$4,880,000,000 to $2,880,000,000.
At my suggestion, Mr. O'Connell had prepared a
statement of President Truman's voting record as
Senator, 1935-1944. This statement is attached and
1936
3. Borrus for veterens.
2. Frasier-Lenke farm mortgage-inflation bill
I am sure you will find it of interest.
4. Flood control financing entirely by Federal
Government.
Also attached are a memorandum on statements of
President Truman on post-war taxes and excerpts from
a report of the War Contract Subcommittee of the
1937
Senate Committee on Military Affairs, of which committees
5. Extension of Reciprocal Trade Agreements Act.
3. Restricting tariff reductions under re-
6. Continued subsidy of form interest rates.
ciprocal trade agreements.
President Truman was a member.
4. Increasing surtex on individual incomes
over $6,000.
I an sending copies of these documents to the
5. Shelving President's plan for Supreme
interested persons on the Treasury staff.
Court reorganization.
1938
7. Taxing federal tax-exempt securities.
1939
8. Government reorganization plan.
6. Increasing Treasury price for newly mined
9. Renewal of President's currency-devaluation
domestic silver to 77.57 cents.
powers.
7. Allowing TVA to issue $100,000,000 in
10. Proposed $1,615,000,000 public works program.
bonds to acquire private power facili-
Attachments
11. Increased federal contribution to old-age pensions.
ties.
1960
12. Extension of reciprocal trade program.
8. Senate veto power over reciprocal trade
pacte.
167
Regraded Unclassified
RECISION TRADE MARK MICROSTATI MICROFILM
ROLL NO.
- 2 - -
1941
13. Lend-Lesse Act.
14. $7,000,000,000 Lend-Lesse appropriation.
15. Continuing stabilisation fund and President's
power to devalue currency.
1942
16. Price Control Act.
9. Increasing corporate income tax rete
17. Freesing Social Security payroll taxes for 1943.
from 40 percent to 50 percent.
10. Proposed limitation of profite on war
contracts.
11. Prohibiting sales of Government-owned
whent below parity prices for corn.
12. Tax exemption for State and city bonds.
1943
18. Rescinding $25,000 salary limitation.
13. Paid advertising of war bonds in small
19. Extending Trade Agreements Act to 1945.
newspapers.
20. Pay-es-you-go tax bill.
21. Continuing National Resources Planning Board.
s
1944
22. Exempting unions, form co-operatives and other
14. State control of unemployment insurance
tex-exempt organizations from filing financial
benefits (George plan).
reports.
15. Reconversion Act (George bill).
23. Overriding veto of 1944 revenue bill.
16. Suspending 10-cents-a-pound tax on
colored oleomargarine for duration
of war.
17. Reviving food stamp plan for low-income
groups.
18. Congressional control of TVA funds
(McKellar assendment).
168
Regraded Unclassified
RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO.
- 3 -
1945
In 1945 Mr. Truman voted only once. Then, 0.5 Vice President, he broke a tie and defented
a proposed limiting amendment to the Lend-Lesse extension bill. Purpose of the assendment was to
eliminate presidential power to curry out postwar Lend-Lease deliveries under contracts made during
the war.
169
Regraded Unclassified
RECISION
TRADE MARK
MICROSTAT
MICROFILM
SOLL NO.
171
170
- 2
Statements of Harry S. Trassa
Har Contract Termination
Postwar Taxes
From Third Annual Report of Special Committee Investigating the National
Defense Program, March 4, 1944:
From Third Annual Report of Special Committee Investigating the National
Defense Progrem, March 4, 1944:
"It 10 obvious that some method of handling termination problems on
an over-all basis rether than a contract-by-contract basis is vitally
"If taxpeyers are provided with the meens for coming out of this war
needed. It is obvious that there are problems arising in termination
in a financially sound condition, it may not be necessary within the first
which cannot be solved economically by anthematical formula, and perhaps
18 months after the cessation of hostilities to reduce taxes materially.
cannot be solved at all except by the use of sound business judgment. There
There 1a something to be said for beginning DON to consider reduction of
1s obviously mach to be said for vesting discretion in termination officials,
our national debt in the years immediately following the var. Even if it
who are experienced in business and financial matters, to make lump-mum
should be possible to nake such en immediate postmar tax reduction, however,
allowances on at least the maller contracts-perhaps on all individual con-
a provision could be inserted in the proposed enendment which would prevent
tracts for $5,000, or less, or perhaps even on those for $10,000, or less.
any windfalls to texpayers receiving the proceeds of postwar expense bonds.
Such a procedure should go a long way toward the goal of quick settlement of
The proceeds, to the extent that they are not used for purposes deductible
termination problems which all authorities have agreed is vital to industrial
as expenses under the then current tax law, could be subjected to tex at the
solvency at the end of the wer."
same rate at which they would have been taxable in the year in which they
were earned."
From Third Annual Report of Special Committee Investigating the National
Defense Program, March 4, 1944:
Full Employment and Prosperity
"Particular attention must be given to the problems of subcontractors,
From an address before the Society for the Advancement of Management, Sex
who otherwise may suffer the full brunt of cancellations without the benefit
York City, Dec. 3, 1963:
of shock absorbers devised to protect the prime contractor."
"To mus up, the Comdtttee of which I an chairman has had any dir-
cussions, public and private, with leaders of Government, industry and
Renegotiation
labor. From those discussione 11 1s quite apparent that NO have everything
necessary with which to creste the world's greatest prosperity, but that we
are faced with certain specific problems on which action should be taken nov."
From an address before the Industrial Conference Council, Sept. 24, 1942:
(See also attached excerpts from year-end report of Her Contracts Subcommittee)
"In a opinion, the Government must insist upon renegotisting contracts,
Government A1d to Business
but no can confine it to a remegotiation of price because of autual mistakes
on copt estimates."
From Third Annual Report of Special Committee Investigating the National
From Third Annuel Report of Special Committee Investigating the National
Defense Progres, March 4, 1944:
Defense Program, March 4, 1964:
"It will be difficult if not impossible for private banking to provide
"The argument about whether renegotistion should be 'before taxes' or
sufficient working cepital soon enough. It will, therefore, be necessary
'after taxes' has been . great tempest in a tenpot. If we remember that the
for the Government to formulate plans to supplement private benking.
basic purpose of renegotistion 1s to control prices of war material, it 1s
obvious that the tax liability of 8 particular producer is completely benide
*Every effort should be made to induce the corporations to obtain
the point. Prices aust be determined either by free and open competition or,
their working cepital through the investing public and not by leans from
in the absence of competition, by determining what costs are proper, as
6. Government agency."
indicated by results obtained by efficient producers, and what profits con-
stitute a fair reward for the effort end regults obtained by, the particular
Prom an address before the Society for the Advancement of Management, New
contractor."
York City, Dec. 3, 1943:
"To the extent necessary, and only to the extent necessary, the Govern-
nent should supplement private banking shere private banking 1a not able to
do the job, but should not try to supplant it or to place the Government in
control of business."
Regraded Unclassified
RECISION
TRADE MARK
MICROSTAT/
PAT. OFF.
MICROFILM
BOLL NO.
172
113
Excerpts From the Year-end Report of the
- 3 -
Rar Contract Subcommittee of the Senate
Committee on Military Affairs, Part III.
Lend-Lesse
The report refers to existing post-war legislation and as to the
From Third Annual Report of Special Committee Investigating the National
adequacy thereof has the following to say:
Defense Program, March 4, 1944:
"In addition to the three industrial demobilization
"Before authorizing Lend-Lense, the Congress expressly requested and
lows, a number of other post-mar measures have been enacted
received assurances that Lend-Lense assistance would be extended only
during the Seventy-sighth Congress. We have enacted a G. I.
the recipient we.e fully utilizing all of its own resources. Buch
bill of rights. But its provisions are not yet fully ade-
where resources, of course, include foreign-hald American securities and foreign-
quate to neet the needs of returning soldiers and mailors.
held securities which control basic raw materials abroad."
Although 18 have provided for loans to State unemployment
compensation boards, we have done nothing to incroase cover-
age under uneaployment compensation and old-age and survivors
Reciprocal Trade Agreements
insurance, to liberalise benefits, or to provide for health
insurance. To have passed legislation to provide for a
miscellaneous assortment of flood-control and rivers and
From a debate in the United States Senste, March 26, 19401
harbors projects, but have postponed action to develop the
river busine of our country in a courageous and comprehensive
"The present Administration in 1934 took the land in world commercial
fashion under a Missouri Valley Authority, an Arkansna River
relations in en intelligent and practical manner and placed the adjustment
Authority, and similar agencies in other areas. To have done
of teriff duties in the hands of the sost competent sen available for the
little in the preparation of a post-war tax program, on the
purpose, men beyond the reach of political logrolling and tariff lobbying
promotion of foreign trude, or in the adjustment of freight
rates that discrimint to against industrial activity in the
at the expense of national welfare."
South and the Vest. le have passed a road bill but have de-
layed action on post-mir sirports. Tie have not come to grips
with the problem of monopoly and international cartels. Ne
Inflation
have not yet mapped out post-mr policies on the fundenental
quentions of labor relations, viges, and prices.
From Second Annual Report of Special Committee Investigating the National
"As messured against the background of our economic
Defense Program, March 11, 1943:
needs, the post-var laws that have been enacted add up to
"The Administration's avound determination to hold down both wage would and
very little. The balance sheet shows that the Seventy-
price war costs tremendously and leave both agriculture and labor facing must
increases offers the only hope of avoiding en inflation shich
eighth Congress never cuse to grips with the problem of
providing an economic substitute for war production."
increase severe deflation when the war enda. The success of any such policy of all
6. rest upon equitable treatment so that it will obtain the support
The report also refers to the first point in the "economic bill of
rights" of the President's annual 1944 messange to Congress, "The right
groups and individuals."
of a useful and reumerative Job in the industries, or shops, or farms,
or ulnes of the Nation", and to the President's Chicago address in
October of 1944 in which he mentioned the necessity of providing close
to 60,000,000 productive jobs to assure full employment. Commenting upon
that goal the report continues:
Sennte Subcommittee Print No. 12, 78th Congress. Former Senator
Trusen was 4. member of the Subcomulttee, vhose chairman una Senstor
Murry.
Regraded Unclassified
RECISION
TRADE
MARK
MICROSTAT MICROFILM
ROLL NO.
174
. 2 -
175
- 3 -
"As yet, unfortunately, we do not have in America an
'adequete progrem' to provide 60,000,000 productive jobs.
Nor will such 8. progres develop out of thin air. The right
to a job in not self-enforceable. It can be translated into
reality only through the joint action of the people of our
pending bill.
the draft of a full-employment bill which is the predecessor of the
The report sets forth, for purposes of consideration end discussion,
country-buriness, labor, agriculture, and all other groups-
acting through the medium of their duly elected Government.
In short, the so-celled right to a job Le a meaningless
figure of speech unless our Government assumes responsibility
for the expension of our peacetime economy so that 11 will be
capable of assuring full employment.
"The fight for full employment is a twofold bettle.
*On the coe hand, the Government must do everything in
its power to stimulate increased opportunities for employ-
ment in private enterprise. This 1e the major front.
"On the other hand, to the extent that private enterprise
cannot by itcelf assure full employment, the Government must
take such measures an my be necessary to fill the gap."
After stressing the necessity to maintain 6. high post-war gross
national product, and referring to some estimates of $200,000,000,000
as being necessary for full production and employment, the report
continues:
"In the opinion of your subcommittee, the question of
what level of gross national product no should ein at 1s a
direct concern of the Government. Tie believe that the Govern-
ment should calculate the total of all investment and other
expenditures-by consumers, by business, by State or local
government, and by the Federal Government-needed to provide
jobs for everybody.
"Re believe that the Government should give full and
complete opportunity for an expension of business investment
and that it should promote increased consumer expenditures.
"The believe that, to the extent that non-Federel ex-
penditures do not provide the necessary total, the Covernment
met develop en investment and expenditure program to make
up the deficiency.
*Only in this my can se be mire of providing en economic
substitute for war production. Only in this any can 16 pro-
tect our economic structure from collapsing when the frenevork
of var contracts 1s withdrewn."
Regraded Unclassified
176
FEDERAL RESERVE BANK
of New York
June 25, 1945
CONFIDENTIAL
Dear Mr. White:
I as enclosing our compilation for the week ended
June 13, 1945, analysing dollar payments and receipts in of-
ficial British, French, Canadian, and Australian accounts at
the Federal Reserve Bank of New York,
Very truly yours,
H. L. Sanford,
Assistant Vice President.
The Honorable Harry D. White,
Assistant Secretary of the Treasury,
Washington 25, D. C.
Enclosures 2
177
TREASURY DEPARTMENT
OFFICE OF THE SECRETARY
June 28, 1945
CONFIDENTIAL
Received this date from the Federal Recerve Bank of New York,
for the confidential information of the Secretary of the Treasury,
compilation for the week ended June 13, 1945, showing dollar dis-
bursements out of the British Empire and French accounts at the
Federal Reserve Bank of New York and the means by which these ex-
penditures were financed.
soll
AVALYSIS OF BRITISH AND FRENCH ACCOUNTS
Strictly
(In Willions of Dollars)
Week Ended June 13
Confidential
-
BANK OF ENGLAND ( BRITISH GOVERNMENT)
BANK OF
E (CAT) E CENTRAL) (b)
DESITS
CREDITS
Cov't
Transfers to
Proceeds of
Transfers
Net Incr.(*)
Net Incr. (+)
PERIOD
55388 or
from
Other
or Decr.(-)
Total
Total
or Decr. (-)
11
Expendi-
official
Canadian
Other
Total
Securities
Official
(official)
Credits
in $ Punda
Debite
visite
in $ Punda
tures
Avoiralian
Your Years (g)
to
(a)
Account
Dobite
Credits
Gold
(b)
Account
(c)
(d)
(a)
(e)
Ca)
Pirst
11,293.2
605.6
20,9
1,166.7
1,828.2
1,356.1
52,0
3,9
416,2
+ 35.0
866,) (
095,310
+ 299,0
Second
2,203.0
1,792.2
3.4
407.4
2,189.8
1,193.7
274.0
16.7
705.4
- 13.2
38.9
0.6
- 30.1
Third
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
764.0
312.7
170.4
280.9
1,072.3
-
0.5
155.1
916.7
+ 308.3
10.3
1,0
- 9.3
Finan
1,197.7
300.4
61.4
835.9
1,369.6
-
-
253.0
1,116.6
+ 171.9
-
-
-
1944
September
151.0
19.9
50.4
80.7
56.5
-
-
1.0
55.5
- 94.5
-
-
-
Detober
127.9
21.0
7.4
99.5
54.7
-
-
1.0
53.7
- 73,2
-
-
-
November
74.2
45.4
2,9
25,9
%.)
-
-
1,0
91,1
+ 17.9
-
.
-
Ccember
80.4
21,9
-
58.5
91.6
-
-
-
91.6
. 11.2
56,7
6.5
- 50.2
1945
148.9
98.7
31,3
18,9
54,2
-
-
-
54.2
- 94.7
27.4
6.2
- 21.2
Februity
21.4
1/1.7
4,7
19,8
80.5
-
-
-
80,5
*
86,8
0.8
-
March
79.2
40.2
4,2
22.7
22-2
-
-
-
75,3
- 229
247
1,9
- Dell
April
66.6
25.9
11.1
20.6
62,6
-
-
-
62.6
,
6.0
22,1
1.1
- 21.0
May
18.6
39.5
2.6
36.5
79.3
-
-
-
79.3
*
C.T
19.7
2.3
-
17.4
June
July
August
Work Ended
May 23, 1945
6.1
2.5
-
3.6
30.7
.
-
-
30.7
, 24.6
0.5
0.3
-
0.2
May 29, 1945
0.7
1.1
-
9.6
5.5
-
-
-
5.5
- 5.2
16.2
0.1
- 16.1
June 6, 1945
10.5
4.1
-
6.4
9.9
-
-
-
9.9
- 0.6
54.7
95.9
+
41.2
June 13, 1945
"
1.6
4,8
58.5
-
-
-
58.5(1) . 52.1
1.1
6.2
5.1
Average Weekly Expenditures Since Outbreak of War
See st täched sheet for
France (through.June 1, 1940) $19.6 million
England (through June D. 1940) $27.6 million
England (through June 1940 to March 12, 1941) $54.9 million
England (since March 12 1941) 21.5
réllion
Reporte and Andiysis Division
PRECISION TRADE MARK MICROSTAT REG. U.S. PAT. OFF, MICROFILM
ROLL NO.
12"
Reports and Analysis Division
ANALYSIS OF CANADIAN AND AUSTRALIAN ACCOUNTS
Strictly
(In Willions of Dollars)
Week Ended 1945 Confidential
BLNK
OF
CANADA (and Canadian Government)
COMMONWEALTH B.NK OF Cand Australian Government)
DEBITS
CREDITS
ITS
CREDITS
Transfers
Transfers from Official:
Transfers
3
Proceeds
British.A/C
Not Incr,
3
Proceeds
Net Incr.
Official
of
(+) or
Official
of
(+) or
PERIOD
Total
British
Others
Total
Gold
For Own
For French
Other
Decr. (-)
Total
British
Other
Total
Gold
Other
Dear. (-)
Mar Years (a)
Debite
A/C
Debite
Credits
Sales
A/C
A/C
Credits
Debite
A/C
Debite
Gred
E
Sales
Credits tollindo (d)
First
323.0
16,6
306,4
504.7
412,7
20,9
38.7
32.4
181.7
31,2
3.9
27.3
300
30,0
6.1
. 4.9
Second
460,4
-
460,4
462.0
246,2
3.6
123.9
88,5
+ 1.6
72.2
16.7
55.5
81.2
62.9
18.3
. 9,0
Third
525.8
0,3
525.5
566.3
196,6
7.2
-
360.0
. 40.5
107.2
57.6
49.8
112.2
17.2
95.0
- 5.0
Fourth
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
Fifth
648,3
1,0
848.3
958.5
38,1
61.4
-
859,0
+ 283.3
298.6
253.0
45,6
287.7
-
287.7
- 10,9
1944
September
74-5
0.1
76-6
91.6
-
50.6
-
41.4
17.36
5.8
1,0
4,8
7.3
.
7.3
Colober
24.1
-
24.1
84.2
-
7.4
-
76.8
* 60.1
20.5
1,0
19.5
21.0
21.0
: 1.5
-
0,5
November
38.8
-
30,8
53,7
-
2,9
50.8
# 14.9
2-6
1,0
3-4
5-8
-
-
5.8
3,4
December
43
0.7
20.8
12.7
-
-
32.7
- E.R
1.1
in
1.1
19.6
-
19.6
. 16.5
1945
January
35,1
-
35.1
91,6
10,0
31,3
-
50.3
+ 56.5
27.4
-
27.4
5,6
-
5,6
- 21.8
February
21,8
-
27,8
103,9
-
4.9
-
99.0
+ 76,1
LAS
-
1,9
4,9
-
4.9
. 3,0
warch
23,5
-
23,5
62.4
-
6,2
-
56.2
+ 38,9
3.3
-
April
25.4
27.9
70.8
17
13
0.5
-
11.1
-
39.7
* 42.4
1.1
1.1
1:9
-
2.0
-
ET
. 0.6
May
64.4
84.4
104.3
2.6
101.7
. 19.9
10.1
-
10.1
8.3
-
8.3
-
1.7
-
-
-
Juipe
July
August
Week Ended
May 23, 1945
0.3
-
0.3
33.0
-
-
-
33.0
- 32.7
2.1
-
2.1
0.5
-
0.5 . 1.6
May 29, 1945
5.2
-
5.2
9.0
-
-
-
9.0
+ 3.8
3.2
-
3.2
4.2
-
4.2 * 1.0
June to 1945
1.5
-
1.5
32.1
-
-
-
32.1
30,6
2.1
-
2.1
1.6
-
1.6
-
0.5
June 13, 1945
3.0
-
3.0
12.5
-
-
-
12.5(b) 9.5
0.5
-
0.5
0.4
-
0.4
-
3
Average Weekly expenditures for
First year of war
6.2 million.
(a) For monthly breakdowns seo tabulations prior tos April 23, 1941; October 8, 1941;
Second year of war
8.9 million.
October 14, 1942; September 29, 1943; September 6, 1944.
Third year of war
10.1 million.
(b) Reflects changes in all dollar holdings payable on demand or naturing in cine year.
Fourth year of war
13.9 million.
(c) Includes $ 3.4 million deposited by Mar Supplies, Ltd.
Fifth of war
16.1 million.
and C 8.5 million received from New York accounts of Canadian chartered banks,
Sixth of war (through June 13, 1945)
8.9
on.
(d) Reflects net change on all dollar hold en payable on demand or enturing in one
year.
(a) Includes payments for account of British limistry of Supply llission, British Supply Board, linistry of Supply Timber
Control, and Ministry of Shipping.
(b) Estimated figures based on transfers from the New York Agency of the Bank of Montroal, 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 authorized 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 storling area and other accruing dollar
receipts. See (k) below.
(d) Reflecte net change in all dollar holdings payable on demand or naturing in one year.
(e) For broakdown 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 riturned the following day.
(g) For monthly brenkdown see tabulations prior to April 23, 1941; October e, 1941; October 14, 1942; Septomber 29, 1943; September 6, 1944.
(h) Transactions for account of Caisse Contral do La France E'Outre-Wer included for first time in wook ended December 6, 1944,
(1) Includes $ 15.6 -illion apparently representing current and accumulated dollar proceeds of sterling area services and morehandise
exports, and $40.4 million in commention with the expenses of our armed forces abroad.
RECISION
MICROSTAT/
MICROFILM
BOLL
NO.
181
182
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
CONFIDENTIAL
2 -
DATE June 25, 1945
Industrial production declines
Secretary Mongenthau
Due largely to curtailments in munitions industries,
TO
Mr. Hage off
aggregate industrial output showed a further decline in
May and the FRB adjusted index of production for the month
FROM
dropped to 227 from 231 in April. The index now stands
The Business Situation,
20 points (about & percent) below the war-time high at-
Subject:
Week ending June 23, 1945.
tained in the fall of 1943. (See Chart 1.)
Summary
Reflecting slackening activity in the shipbuilding
and aircraft industries, the important transportation
Industrial production: Due largely to declines in war industries,
equipment component of the index continued to decline
aggregate industrial output in May showed a further recession from
in May, and dropped 4 percent below the April level. Like-
and the FRB adjusted index of production dropped to 227
wise the machinery industries showed a further noticeable
231 in April. The index now stands 20 pointe below the war-
reduction. Nondurable goods output, however, was un-
put in May was unchanged from the previous month after allow-
time peak reached in the fall of 1943. Nondurable goods out-
changed after allowance for sensonal factors. Minerals
output in May was only moderately lower, despite a sharp
ance for sessonal factors. Minerals output declined only
drop in anthracite coal output caused by work stoppages
moderately, despite a. sharp drop in anthracite coal output
prior to the conclusion of & new wage agreement. On the
due to labor troubles.
other hand, crude petroleum output during the month rose
to A new record high.
Employment: Factory employment showed a further decline of
236,000 in May with 60 percent of the decline occurring in
Factory employment continues to decline
the munitions industries. Aside from the munitions industries,
only the textile and apparel industry groups showed declines
Factory employment in May showed a further drop of
of more than 10,000 workers, and even these decreases to n.
236,000, with 80 percent of the decline occurring in the
large extent were seasonal. Labor restiveness has increased
munitions industries. The largest decrease was in the
recently, with the number of strikes in progress rising con-
transportation equipment industry, which employed less
than 1,800,000 workers in May as compared with more then
siderably since V-E Day.
2,600,000 at the war-time peak in November 1943. Al-
Reconversion: The WPB has fixed passenger car production at
though cutbacks in aircraft and tank production have
approximately 242,000 units in the last half of 1945 and
been contributing factors, two-thirds of the decline
449,000 units in the first quarter of 1946. Production
from the 1943 penk has been accounted for by the ship-
quotas assigned to individual producers in the last half of
building industry. Outside the munitions industries,
1945 range from approximately 95,000 for General Motors to
only the textile and apparel industry groups showed de-
6,000 for each of the 6 smallest producers. The Ford Motor
clines of more than 10,000 workers in May, and even
Company has protested the quota alloontions, which it
these decreases to a large extent were sessonal.
asserts would confine its operations in the last half of
this year to less than 10 percent of pre-war output.
Labor troubles in the anthracite coal industry out
mining employment last month, while civilian government
Prices: After advancing to n. new war-time high at the beginning
employment showed no change. However, gains occurred in
of last week, the Dow-Jones futures index Inter declined
all other major groups such as trade, transportation,
appreciably, due largely to a drop in grain prices. Rye
etc., partially offsetting the drop in factory and mining
futures dropped sharply AS margin requirements were doubled
employment. Nevertheless, total nonagricultural employ-
by the Chicago Board of Trade.
ment was 150,000 less than in April, and more than 1 mil-
Cost of living: The BLS cost-of-living index in May rose 0.7 per-
lion less than in May 1944. (See Chart 2.) It should be
cent to B. new wer-time high, 29.8 percent above the June 1939
noted, however, that since May 1944 the arned forces have
shown a net increase of nearly 1 million.
pre-war average. Food costs rose 1.6 percent to the highest
level since mid-1943.
Regraded Unclassified
RECISION
TRADE
MARK
MICROSTATI
MICROFILM
184
183
4
to the slackening in steel operations. Moreover, according
to the American Metal Market, there has been A tendency to
Labor restiveness again in evidence
reduce overtime operations in order to reduce costs, as
steel producers contend that ceiling prices on steel are
Labor restiveness has increased recently, with the
still too low in relation to operating costs.
number of strikes doubling since V-E Day, according to
the Department of Labor. Many of the strikes have devel-
Steel serap prices strengthen
oped over relatively trivial issues. Although labor
disputes have occurred over a wide area, Detroit has
After declining moderately for about 2 weeks after
been one of the industrial centers most seriously nf-
V-E Day, steel scrap prices later stendied, and during
fected. Numerous jurisdictional disputes have developed
the past week alightly rising tendencies were noted. As
in that city causing work stoppages at Ford, Chrysler
a result the Iron Age scrap composite rose 8 cents to
and Packard plants among others, and concern has been
$19 per gross ton, thus scoring the first advance since
expressed over the resulting threat to the reconversion
V-E Day. Meanwhile, the volume of new rated orders for
activities of the automobile industry.
steel 1e reported to have increased somewhat, and con-
siderable uncertainty continues to exist over the amount
In addition to the loss in employment due to strikes,
of steel which will be available for civilian production
outbacks in war contracts are expected to increase idleness
in the third quarter.
at Detroit in coming months. During the past week the WIC
director at Detroit predicted that unemployment in the area
Automobile production quotas announced
would be at least 80,000 by September 1, as compared with
30,000 on June 1. However, a leading CIO official promptly
The availability of steel supplies has been the
challenged the estimate and predicted that 140,000 would be
principal determining factor in the formulation of re-
1dle in the area by September 1 if current trends continue.
conversion plans for the automobile industry. Last week
the WPB announced that authorized passenger car production
Steel operations recover
would total 241,916 cars in the last half of 1945 and
449,102 care in the first quarter of 1946. Production
Unauthorized work stoppages have also been in
quotas were assigned to the various passenger oar pro-
evidence in the steel industry recently and have been
ducers, which for the last half of 1945 range from
a factor in the decline in steel operations in recent
95,096 for General Motors to 8,000 for each of the 6
weeks. Output at the beginning of last week WILD scheduled
smallest producers.
at only 88.8 percent of capacity, which 10 the lowest
level touched since early last February when severe
While production quotas for the biggest producers
weather conditions curtailed output. Scheduled operations
were determined largely by the rate of manufacture at
during the current week, however, have recovered to
the time manufacturing was discontinued in 1942, it was
91. percent of capacity, due primarily to settlement
decided that a production quota of less than 8,000 cars
of labor disputes. (See Chart 3.)
in the last half of 1945 would not be fensible for any
one company. Consequently, the smaller producers in
Despite outbacks in war contracts, the W.C.C. director
the initial stages of reconversion will have a larger
at Pittsburgh recently reported a shortage of 6,000
share of the total market than previously. As might be
workers in the area, with three-fourths of this number
expected, the larger producers are reported to be dis-
being needed in the basic steel industry. P1g iron pro-
satisfied with the quotas, and the Ford Motor Company
duction is said particularly to have suffered from a
has registered a protest with the WPB. The Ford Company
lack of manpower. It is reported, for example, that one
asserte that under the quotas announced its dealers in
of the blast furnaces of the Carnegie-Illinois Steel
the last half of this year will receive only 4 cars per
Corporation which was ready to resume operations Inst
dealer, whereas dealers representing some of the smaller
April actually wild not able to get back in production
producers will receive many times that number. Similarly
until June 8 due to & lack of workers. In addition to
the mandower shortage, the advent of hot weather has contributed
Regraded Unclassified
RECISION
TRADE
MARK
MICROSTAT/
MICROFILM
ROLL NO.
186
185
- 6 -
- 5
speculative interest appears to have developed in the
it is contended that Ford will be operating at less than
rye market in recent months of rapidly rising prices.
10 percent of pre-war output, while one smaller producer
The volume of trading in this minor commodity has
will be operating at nearly 100 percent, and another at
recently been nearly double that in wheat, and the
15 times pre-war output.
open interest in rye futures last week exceeded that
in whent. with no price ceiling, rye prices have
Railroads confronted by heavy traffic burden
risen far above parity to the highest levels in 20 years.
The end of the war in Europe has failed to ease the
The BLS all-commodity index in the week ended
heavy war-time traffic demands on the railroads. On the
June 16 remained unchanged at the previous week's level,
contrary, the railroads in the western part of the country
and was 2.2 percent higher than in mid-June last year.
are now confronted with the heaviest demands of the entire
war. During the past week the director of the ODT indi-
Higher food prices raise cost-of-living index
oated that embargo restrictions may have to be imposed on
certain types of civilian freight shipments when the peak
The BLS cost-of-living index rose 0.7 percent in
military shipments to the West Coast occur.
May to a new war-time high, 29.8 percent above the June
1939 pre-war average, as food costs rose 1.6 percent to
Indicative of the sustained high level of railroad
the highest level since m1d-1943. Increased retail
traffic, the first 87 Class I railroads to report for
prices for potatoes, apples, onions, carrots, and
May showed a rise of about 1 percent in the operating
spinach were chiefly responsible for the rise in food
revenues over year-earlier levels. Furthermore, freight
costs. The index of clothing prices continued its
carloadings in the first half of June were alightly
steady upward trend, rising 0. percent for the month,
above the corresponding period last year.
while costs of other component items held practically
unchanged. (See Chart 6.)
The prospect of a further extension of the war-time
upsurge in railroad traffic undoubtedly has been a
Some relief seen in fats and oils supplies
factor in the recent strength in railroad securities,
with second-grade railroad bonds now standing close to
The tight situation in fats and oils, which led to
the highest levels on record and railroad stocks only
cuta in allocations and increases in ration points in
moderately below their 1937 peak. Net railway operating
May, shows some possibility of partial relief by the
income, (earnings after taxes but before fixed charges)
beginning of next year as a result of recent developments,
after running behind the previous year's levels through-
although the outlook 1s not yet clear.
out most of last year and the first 2 months of 1945
has since moved above year-earlier levels. However,
It now appears more hopeful that copra supplies in
the gain in April, the latest month for which figures
quantity will be obtained from the Philippines this year,
are available, was only 2.5 percent. (See Chart 4.)
according to the Bureau of Foreign and Domestic Commerce,
which will increase our supplies of coconut oil. Estimates
Commodity prices weaken
of imports this year, according to the Bureau, range from
a conservative figure of 30,000 tons to an optimistic
Led by a sharp break in rye futures, the futures
figure of 100,000. Because of the destruction of crushing
markets lost part of their recent gains last week after
mills, there is expected to be no imports of coconut oil
reaching a new war-time high on Monday. (See Chart 5.)
from the Philippines. The handling of copra procurement
The selling movement chiefly affected the grain markets,
will be under direction of the newly-formed Copra Export
and wheat futures lost 5 cents for the week. Cotton
Management Company, a private corporation which will be
held about unchanged.
financed with Government funds.
Rye futures declined 3 to 5 cents a bushel on
Wednesday AS margin requirements for rye were doubled
by the Chicago Board of Trade, apparently with the object
of discouraging speculative activity. An extensive
Regraded Unclassified
187
- 7 -
Under an agreement concluded last month between
Argentina and the United States Commercial Company, an
increased supply of linseed oil and certain edible oils
and other products is expected to be nnde available to
the United Nations, chiefly for relief and rehabilitation
purposes in Europe, in exchange for shipments of fuel
oil to Argentina. Previously the shortage of fuel oil
in that country had necessitated the burning of vegetable
oils, which have snaller heat values. Under this agree-
ment, the USCC will purchase Argentina's entire 1945 and
1946 surpluses of the specified products, to be exchanged
for fuel oil according to their relative fuel values.
No improvement in the lard situation is immediately
in sight, although the abnormally slow beginning of the
expected sessonal increase in hog slaughter apparently
indicates that farmers are holding their hoge off the
market for heavier feeding, which would mean an increase
in lard yield. The 1945 spring pig crop, as estimated
last week by the Department of Agriculture, totalled
about 51.7 millions as compared with 55.4 millions last
year and with the announced goal of 55.0 millions. How-
ever, the fall crop is expected to show an increase of
about 4.0 millions over last year, based on farmers'
reported intentions, making the total crop about equal
to the 1944 figure.
F.R.B. INDEX OF INDUSTRIAL PRODUCTION, REVISED
1935-39-100. Seasonally Adjusted
1939
1940
1941
1942
1943
1944
1945
PERCENT
PERCENT
275
275
250
250
225
225
200
200
s
175
175
150
150
125
125
100
100
75
75
,
M
a
J
5
N
J
M
#
5
N
.
-
M
J
$
N
J
M
M
J
5
N
J
M
M
,
$
N
J
J
$
-
#
#
a
#
5
N
1939
1940
1941
1942
1943
1944
1945
I serve
Offer of the Secretary of the Treasury
C-349-0
- of - - -
RECISION TRADE MARK MICROSTATI MICROFILM BOLL
NO.
NON-AGRICULTURAL EMPLOYMENT
1940
1941
1942
1943
1944
1945
EMPLOYEES
EMPLOYEES
Millions
Millions
Monthly
45
45
40
40
35
35
Total Non- Agricultural Employment
30
30
25
25
s
20
20
Factory Employment
15
15
10
10
5
5
0
o
.
-
M
al
$
M
4
-
-
di
.
N
,
M
-
,
s
M
.
-
-
.
.
N
di
M
M
a
1
.
#
-
M
#
.
N
1940
1941
1942
1943
1944
1945
189
Chart 2
Office of - Secretary # -
- al - - the
C-606
STEEL INGOT PRODUCTION
PERCENT
PERCENT
Percent of Capacity
1943
100
100
1944
90
90
1945
$
1940
80
80
70
70
60
60
JAN
FEB.
MAR.
APR
MAY
JUNE
JULY
AUG.
SEPT
OCT.
NOV.
DEC
Source: American from and Steel Institute
061
Office of the Secretary of the Treasury
Division of Besserch - State
C-532-A
E
PRECISION TRADE MARK MICROSTAT MICROFILM SOLL NO.
RAILROAD ARNINGS
Net Railway Operating Income." Closs I Railroads
DOLLARS
DOLLARS
Millions
Millions
180
180
1942
160
160
140
140
120
120
1944
100
100
80
80
=
60
60
19451
40
40
1935-39 Average
20
20
o
o
JAN.
FEB.
MAR
APR.
MAY
JUNE
JULY
AUG.
SEPT.
OCT.
NOV.
DEC
Chart 4
*Earnings after reses, - before interest and effer lised charges.
Once # the Serviary of the
C-483-8
- - - - -
Regraded Unclassified
NO.
-
COMMODITY PRICE INDEXES IN U.S.
1944
1945
SEPT
OCT
NOV.
DEC.
JAN
FEB
MAR.
APR
MAY
JUNE
JULY
PERCENT
PERCENT
(Mondy)
(Dow-Janes)
Daily
ETO
ID4
267
103
264
OF
261
101
256
100
Moody's Index
255
Spol Prices
19
December 34. /93/100
252
99
249
97
244
96
=
Commodity Futures
243
(Dow-Jones)
ss
1984-26-100
240
94
237
in
93
234
92
231
91
228
90
125
#
,
.
e
NO
,
-
.
⑉
.
.
.
a
,
.
.
a
to
.
a
=
et
.
8
=
N
,
e
if
a
.
,
.
-
19
,
.
-
H
89
.
,
.
n
NO
.
-
⑉
-
SEPT.
OCT
NOV.
DEC
JAN
FEB
MAR
APP
MAY
JUNE
JULY
1944
1945
- - - - el - -
192
5 Chart
- - -
RECISION TRADE MARK MICROSTAT/ MICROFILM SOLL
NO.
COST OF LIVING AND SELECTED ITEMS
June 1939=100
1939
1940
1941
1942
1943
1944
1945
PERCENT
PERCENT
160
160
Food
150
150
140
140
Clothing
130
130
=
Combined Index
120
120
Household Furnishings
and Miscellaneous
110
110
Rent, Light
and Heat
100
100
90
90
J
5
D
M
J
$
N
J
M
M
#
$
.
M
M
J
5
N
4
M
M
-
$
M
J
M
M
/
$
N
J
M
M
J
5
N
1939
1940
1941
1942
1943
1944
1945
193
9
Secre ALL
Office et the Services et the Treasury
- of - - -
0-413-0
PRECISION TRADE MARK MICROSTAT MICROFILM ROLL NO.
DEPARTMENT
INCOMING
DIVISION OF
195
DIVISION OF 194
OF
CENTRAL SERVICES
DEPARTMENT
INCOMING
STATE
RECEMELEGRAM
CENTRAL SERVICES
TELEGRAPH SECTION
OF
TELEGRAM
DIVISION OF
STATE
TELEGRAPH SECTION
CENTRAL SERVICES
PEM-35
PLAIN
1945 JUN 26 AM 9 12
Tendon
DC/L
Dated June 25, 1945
RS-136
Lisbon
LIAISON
Distribution of true
Rec'd 4 p.m.
reading only by special
Dated June 25, 1945
arrangement. (SECRET 17)
Rec'd 7:35 Palle
Secretary of State,
Washington.
Secretary of State
STATE
Washington
6397, Twenty-fifth
AUN 1945
DCL
FOR DEPT WRB AND EARL HARRISON
1368, June 25, 6 pame
MAISON OFFICE
Sir Herbert Emerson, director Intergovernmental
JDC 447 FOR SCHWARTZ FROM BIELE
Committee. Refugees, circulated memorandum to members
Salazar personally approved admission 500 refugee
executive committee June 21 recommending that travel
children ex-concentration camps American Brit sonos
facilities for members of staff IGC be extended by
selected nonsectarian basis with understanding Joint
nember GOVTS in line with precedent and model provided
will guarantee maintenance and ultimate enigration.
by UNRRA council at its first Atlantic City meeting.
Jewish agency will reserve 300 certificates. Advise
Memorandum contains following resolutions which will
when you wish matter pursued further.
be presented next meeting executive committee IGC which
BARUCH
vill probably be hold before middle July "(1) that the
MRM
director be authorized to issue to officials and employees
of the Intergovernmental Committee on Refugees for use
105 poorded. /
when travelling on official business a document identi-
fying the official or employee and requesting in the
name of the International Committee on refugees that all
appropriate facilities be granted to the bearer" "(2)
so
That all member governments give full recognition to such
documents
Regraded Unclassified
RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL
NO.
196
DEPARTMENT
INCOMING
DIVISION OF 197
OF
CENTRAL SERVICES
STATE
TELEGRAM
TELEGRAPH SECTION
00-185
PLAIN
-8- #6397, Twenty-fifth, from London.
Lisbon
Dated June 25, 1945
documents and instruct their diplematic consular
Rec'd 9:45 p.m.
customs and excise services and any other services which
may be concerned to recognise such documents as entitling
Secretary of Stats,
the bearer to all appropriate facilities" *(3) That in
Washington.
respect to passporte and visas the member GOVTS shall
LIAISON
1/00
1363, Twenty-fifth
accord to the officials and employees of the IGC the
195 JUN 26 AM 19
CENTRAL SERVICE
DIVISION OF
RECEIVED
WRB 423. POR HIAS,425 LAPAYETTE STREET, NE YORK,
same treatment as 10 accorded to the officials and
FROM DAVID SCHE ITZER HICEN.
employees of comparable rank of their own or other GOVTS"
Received dated fifteenth and seventeenth two
*(4) That all member GOVTS take the necessary stops to
following cables from Biryan. First one, inform Doctor
grant all appropriate and possible priorities for the
-
Nahum Goldmann Warhaftig Saczupakiewiez "our sixty friends
travel of the officials of the IGC on official business
extremely needy asking htlp. Kalmanowicz Pat familica
and where appropriate to allow GOVT rebates for such
receiving regúlar support except Usiwry Graudens Docbekirtr
travel" *(5) That the member GOVTS make any necessary
Ilutowicz". Second one, Tiefonbrunn asks brother how
arrangements with the director for the application of
Berri Chavascleth Hashoron Nathania. Cable immediately
the foregoing recommendations". Department's instructions
whercaboute family Poland. Inform Doctor Nahum Goldmann
respecting foregoing resolutions requested urgently.
150 Haluzim and friends leader Doctor Parnes coming 1939/40
WINANT
from central Europt asking relief. Inform Lider
Landsmannschaft Michel Ivensky Bertl Dworetsky "Lider
WTD
friends here needy asking help. Signed Rabbi Cyperastejn
Budin Carrtok". Dobekirtr asks Kantorowicz Burnstein
Poalcizion private relief. Iron Ilutowicz nttdy asking
Jacob Aprnshlak influence Bornard Elelitov relief.
Please keep us informed.
RB
BARUCH
Regraded Unclassified
198
CORRECTION
NS-1288
June 25, 1945
Distribution of true
ronding only by special
arrangement. (SECRET 11)
In cable from Bern 3287, June 22, 2 p.m. for WRB
change serial number to 3286.
DIVISION OF CENTRAL SERVICES
CSB
RECISION
TRADE
MARK
MICROSTAT/ MICROFILM ROLL NO.
June 26, 1945 199
- 2 -
200
10:45 A.M.
L: (cont.) I certainly wouldn't
Dr. B. W.
Leonard:
tell his about the arrangemente about getting
HMJr:
Yeah, well, Doctor, I'm not going to go up to the
down and getting back. He said he would sort of
farm while things are the way they are. I mean I
like to fly if he could. He could leave La Guardia
just couldn't rest up there.
about five thirty and be here about 7:30.
L:
I see.
HMJr:
I see. On Thursday.
HMJr:
So...
L:
On Thursday.
L:
Well, that's between the two of you.
HMJr:
I see. 5:30.
HMJr:
L:
Re asked me to ask you to call his and make the
Yeah, but she told ne last night that you thought I
arrangements about the definite time of his coming.
ought to go, see. But I would be very unhappy up
there this weekend until I see better what 1s going
to happen.
HMJr:
I'll do that.
L:
L:
Directly.
All here. right, if you will be unhappy, you had better stay
HMJr:
I'll do that.
HMJr:
I think so.
L:
All right.
L:
All right, I'll see you later.
HMJr:
I'll do that.
HMJr:
Thank you.
L:
Things are going along all right. She had a good
L:
Bye.
night and she checked all right this morning.
HMJr:
Well, what are we going to do from now until Thursday
to keep her quiet?
L:
Keep her quiet?
HMJr:
Yeah.
L:
Vell, we'll use the mild sedatives we have there - the
medinol
at night.
HMJr:
Yeah.
L:
And I told her this morning in not too direct a way
that this thing meant more bed rest.
HMJr:
Well,
L:
I think she will take it all right.
HMJr:
All right, doctor.
Lt
She is insisting on your going up to the farm this
weekend. Well, now, frankly if she is doing all right,
I think it wouldn't be a bad idee if you did it.
Regraded Unclassified
RECISION
TRADE
MARK
MICROSTAT/
MICROFILM
ROLL NO.
202
June 26, 1945
201
- 2 -
12:10 P. M.
HMJr:
I personally, if I was coming down, I would take
the Congressional.
Operator:
Dr. Levy.
L:
I'll do it.
HMJr:
Hello.
HMJr:
I will get you a seat on the Congressional. When would
Dr. Robert
you want to go back?
Levy:
Hello, Henry. I'm sorry to hear about Elinor.
L:
Well, I think probably the best thing 1s to go back
HMJr:
Yeah, it is a shame, 1sn't 1t?
on the night train, if I can get a bedroom.
L:
It certainly. It looks as though she might inherit
HMJr:
I can get you a bedroom, or...
a mild extension. I would like very much to defer
this until Thursday for two reasons - first of all,
L:
You see you can get on that train by ten o'clook.
because I think at the end of that time, or at least
before then you could get another cardiogram.
HMJr:
Or if you want to fly back after supper. Let me work
on it, may It
HMJr:
Yes.
L:
Lt
...and possibly another count. We'll get more ideas
Well, I'll plan to come down on the Congressional, and
I'll have my dinner on the train and then I can meet
as to just what the extent of this thing 1s.
Leonard there, say by half past eight - if the train
is on time.
HMJr:
Right.
HMJr:
I'll have a car and the chauffeur will have a hand-
L:
Certainly it would be easier for me.
kerchief tied around his left arm, see? Hello?
HMJr:
Well, I don't $00....
L:
Is he that colored fellow?
L:
Apparently her condition 1e good and there is no
HMJr:
Yeah.
urgency about it.
L:
I think I would know him.
HMJr:
No urgency.
HMJr:
Well, he will be down there to meet you.
L:
Well, I could -- I think probably the simplest thing
would be to go down on the Congressional Thursday
L:
At the gate.
and come back on the night train.
HMJr:
At the gate. I'll buy the ticket and have it de-
HMJr:
Well, I can do that, or I can try to get you a seat -
livered at your office - the railroad ticket.
there 18 a plane leaving at 50'clook on Eastern Air-
lines.
L:
Yeah. I think it 18 just as easy to come back on
the night train. I mean that will save the element
L:
On which?
of uncertainty of flight.
HMJr:
Five o'clock on the Eastern Airlines. There 18 a
HMJr:
I'll get you a bedroom going back.
plane around five o'clook.
L:
That will be fine.
Lt
Yes, it gets in about 6:20?
HMJr:
And I'll have the tickets delivered to your office.
HMJr:
Yeah, you don't save an awful lot because very often
these planes don't leave on time - they are sometimes
L:
All right.
a half an hour to an hour late in leaving.
HMJr:
Well, then, why don't I just take the Congressional?
Well look forward to seeing you.
L:
L:
Thank you. Bye.
Regraded Unclassified
MICROSTAT
MICROFILM
BOLL NO.
RECISION
TRADE
MARK
June 26, 1945 203
- 2 -
2:24 P. M.
204
M:
It im't anything that....
HMJr:
Hello.
HMJr:
Mr. David
Look, we've got a very good man that handles all of
Miles:
Hello, Mr. Secretary.
this stuff for us. You know Lawrence Hougheling.
M:
Yeah.
HMJr:
Hello, David.
HMJr:
Well, that is his Job over at Var Bonde.
M:
How are you today?
M:
Well, I'll talk to him.
HMJr:
Oh, O. X.
HMJr:
To keep the Union happy.
M:
How is Mrs. Morgenthau these days?
M:
(Laughs)
HMJr:
Just fair.
HMJr:
Hello?
M:
Mr. Secretary, I hate to bother you with this
thing, but I've got Philadelphia bond trouble.
M:
Yeah.
HMJr:
Philadelphia what?
HMJr:
And he has done a swell job on it.
M:
Bond trouble.
M:
That's right.
HMJr:
Bond?
HMJr:
him, don't you?
Why don't you call up Lawrence Houghteling. You know
M:
Yeah.
M:
Yeah.
HMJr:
Bond, why?
HMJr:
And tell him what it 1e all about.
M:
Tomorrow night there is supposed to be a concert
given by the Philadelphia Symphony Orchestra for
M:
Right. I will.
a Bond Drive.
HMJr:
And if you don't get satisfaction, let ne know.
HMJr:
Yeah.
M:
M:
The Union cleared it, and it was advertised and
Righto. Well, I think everybody wants - they think this
they've sold two million dollars worth of bonds.
fellow has gotten a little bit tempermental, he is probably
worn out.
HMJr:
Yeah.
HMJr:
Well, you call up Lawrence, and if you don't get satis-
faction, call me back.
M:
Now, somebody came in from Philadelphia today to
see me and tell me that your man Seeton up there
M:
You bet.
insulted somebody or other, and so the Philadelphia
Symphony crowd aren't going to play.
HMJr:
Thank you.
HMJr:
Oh, for heaven's sake.
M:
Righto. Thanks
M:
And they are going to substitute a jass band, and
this man is all upset - the Union is all upset.
They think they are going to get a black eye.
HMJr:
Well, let me look...
Regraded Unclassified
PRECISION
TRADE MARK
MICROSTAT/
MICROFILM
BOLL NO.
205
206
June 26, 1945
3:00 p.m.
- 2 -
INTERNAL REVENUE
H.M.JR: Yes.
MR. ATKESON: And I have had two or three conferences
Present: Mr. D. W. Bell
with -. Hans and Mr. Tickton, and as I reported to you
Mr. C. S. Bell
yesterday, We have made what we think is considerable
Mr. Pehle
headway in the matter of developing schedules necessary
Mr. Gaston
to arry that out. Now, no are not too positive, of
Mr. Haas
course, as to just how far we should go. The big thing
Mr. Irey
is to tie in as closely as possible to the present operating
Mr. Woolf
methods from the standpoint of gathering statistics, in
Mr. Wenchel
order that we might be fortified with a lot of background
Mr. Atkeson
material that we have today, which we think you would be
Mr. Oliphant
interested in. So, I think it's a question, if you let
Mr. Tickton
ne surgest, of leaving the thing with us for a few more days
Mr. O'Connell
so that we can, with Mr. Nunan and Mr. Haas, come to some
Mr. Sherwood
final agreement as to what additional data may be needed
Mr. Nunan
to meet the program, and I personally feel, and 1 think
Mr. Hans does too, that we have a fairly good understanding
H.M.JR: All right. Who said Internal Revenue is
of your objectives and we're doing everything we can to
short of manpower, huh? (Laughter) I said, who said
develop the program to meet that.
Internal Revenue is short of manpower?
MR. NUHAN: Mr. Secretary, before Mr. Atkeson finishes
MR. NUNAN: You can start to recruit here.
may I say I understood from Mr. Atkeson last week it will
be & rather simple procedure if we can submit to you
H.M.JR: Look, Commissioner, I have a little agenda
once a month the additional taxes that are being collected
here. The first thing is the question of statistics,
as a result of this drive. However, if we're going to
have to break them down to say that a thousand dollars
huh?
cane from the food industry, or two thousand dollars came
from some ther industry, that that's going to be a
MR. NUNAN: Yes, sir.
little more difficult and complicated and a little more
H.M.JR: Will you tell me where we stand, please?
burdensome to the Collectors, officers, and Internal
Revenue service. If it's satisfactory to you that you
MR. NUNAN: After I left last week, I talked to
know the difference or the results of this drive in
Mr. Atkeson, whom we proposed to appoint as head
dollars and cents rather than where it's coming from,
statistics. I asked Mr. Atkeson to come over here this
that's going to be more simple procedure. Is that right,
Mr. Atkeson?
afternoon to tell you what he has talked over with Mr.
Haas, and just what the situation is, Mr. Atkeson.
MR. ATKESON: Yes, the business classification,
VR. ATKESON: Mr. Secretary, Mr. Haas prepared an
as to it, that is, the business inwhich the income tax-
outline of the type of statistics that he thought was
payer is engaged, does complicate the thing very
materially, but we have been trying to simplify that,
along the line you were interested in.
but under the present, that is,at the moment, there has
been no agreement other than the business classification
Regraded Unclassified
RECISION
TRADE
MARK
MICROSTAT
MICROFILM
ACLL
NO.
207
208
- 3
- 4
has been originally suggested, and if you could waive
might prevent him from doing it, but as long as you
that, and I might say this, the point at issue is this:
have asked for what you have, Mr. Atkeson can take
In the case of the income tax returns audited in the
charge.
Revenue Agents' offices, which from a money standpoint
constitute probably three-fourths of the money, we can
H.M.JR: Plus the things I asked for yesterday?
get the business classification very easily, but in the
case of the income tax returns audited by the Collectors,
MR. ATKESON: Yes, sir. We are working, Mr. Secretary,
it would be a rather difficult proposition. That
with Mr. Hass on the progress reports. You asked yesterday
represents only about five percent of the money, but
in connection with the progress reports in order that you
as Mr. Haas points out, the large number of retail
might be able to tell the backlog in any Agent's office.
food stores, for example, will be found among the returns
audited by the Collectors, and the picture from a purely
H.M.JR: Yes.
statistical standpoint might not be so good. So, It's
really a question of how badly you think you would need
MR. ATKESON: Well, we have pretty good figures today
this picture by industrial or business classification.
on that, even though we don't have it on the four-week
basis you indicated. We have it on a quarterly basis,
H.M.JR: Well, in the first instance, let me get
but we could come around to the four-week basis without
the figures, and then if subsequently I want it broken
too much difficulty there, I think. I asked you & minute
down into various classifications of industry, I'll
ago to give us just a few more days to develop those
ask for it. Let's get the thing started.
schedules.
MR. NUNAN: Fine.
H.M.JR: That few more days sounds very reasonable.
H.M.JR: And get the gross figures, and then if
While I'm here, I've got this memorandum from
somebody wants to know how much is alcohol and how much
Charles Bell, signed by the Commissioner and Mr. O'Connell,
is food, we'll talk about that later.
which I have okayed. (Indicates attachment A.) The only
thing I haven't okayed, Charlie, is the memorandum from
MR. NUNAN: That will be a great help to us if you
me to you, one page, and before I do that--I'll do it,
break it down that way. We'll start immedIately.
but I do want both Mr. O'Connell's and Mr. Nunan's initials
on it. (Indicates attachment B.)
H.M.JR: I like to be helpful.
MR. C.S. BELL: Yes, sir, I cleared the memorandum.
MR. NUNAN: All right.
H.M.JR: But there's no indication that they have
H.M.JR: Now I take It, Commissioner, you are--
initialed it. Now, If they will initial this top
memorandum. I did add a word there. I put in 'O'Connell",
MR. NUNAN: Mr. Atkeson is going to head that
but if O'Connell and Nunan will sign that top page, it's
department. He's going to take charge of that.
all right with me.
H.M.JR: Wonderful.
MR. C.S. BELL: All right, sir.
MR. NUNAN: In talking to him the other day, he
H.M.JR: It sounded very good. Now the other thing
said if we have to break it down that the work involved
Regraded Unclassified
MICROFILM
BOLL NO.
RECISION
TRADE
MARK
209
210
- 6 -
- 5 -
MR. GASTON: I think it's & good idea that you
we have to discuss, one other thing, and then We get
should read about it in the papers. I think it's &
into very rarified atmosphere--politics, and I don't
good idea that some of the people who have quite con-
want to contaminate some of you people.
siderable income from that source should get the idea
we are looking for that, too.
MR. NUNAN: Do you nean you want me to leave?
(Laughter)
H.M.JR: I respectfully differ with you.
MR. D.W.BELL: That was quick.
MR. GASTON: I add my respects, and we'll continue
to differ.
H.M.JR: That was very quick. I read in the New York
Tribune of a plan to look for unreported dollars among--
MR. D.W. BELL: They are even after taxi drivers, too.
I don't know what it was--receivers of tips, and waiters.
Fifty agents have been put to work entirely on black-market
H.M.JR: Excuse me, that's where OPA fell down on
incomes. (Quotes from article in the New York Herald
their nose and haven't got over it yet.
Tribune, June 21, 1945, Attachment C.) "A" drive concentrated
on those service trade workers--waiters, taxi drivers,
MR. O'CONNELL: May I add one thing?
barbers, manicurists and beauticians--whose tip incomes
have doubled and tripled during a war boom was reported in
H.M.JR: Sure.
Newark by Robert Smith, chief field deputy for the Fifth
New Jersey District. Such tip-receivers, and so forth--
MR. O'CONNELL: I don't know whether it adds anything,
I think you'll agree with me, Commissi oner, that before we
but It may be a matter of emphasis. It seems to me we
go after these babies, we better go after some of the
should at some point stop thinking of this drive as an
fellows from one hundred thousand dollars up.
interim drive on black market operations and people having
one hundred thousand dollars of income. Às long as we have
MR. NUNAN: Smith is in the Collector's Office and
high tax rates and high incomes, the enforcement problem
probably he got some of the Deputy Collectors, who are
in the Bureau with respect to all taxes is going to be
not in the high class Revenue Agents, to make a drive on
greater than we ever had before, and it seems we should
this, but that can be stopped. That was done on his own.
not discontinue--although, admittedly, as a matter of
emphasis, I don't want to see a lot of publicity on small
MR. O'CONNELL: I'd like to raise a question there.
profit, don't want to keep the Revenue service from
It seems to me that there's a place--it may be a matter
attacking problems on all fronts.
only of emphasis, but we've got thousands of Deputy
Collectors and other people not properly equipped to
H.M.JR: Certainly, if Mr. Nunan has people that
handle complicated tax cases involving one hundred
can do that kind of thing, and have the time, all right,
thousand dollars of income, but they have work to do.
but I want the emphasis placed on the big fellow, and
Their job is e matter of routine checking of al 1 the
when I pick up newspapers, with all due respect to Mr.
lower grade income people, and I don't think we ought
Gaston, I want to read about the big fellows. Now, I
to reverse the emphasis to stopping the doing of that
inherited from my predecessor in this office, and the
kind of work.
Attorney General, the bootleg thing, and they batted their
heads against the wall all through the bootleg era, going
H.M.JR: I don't want to read about it in the papers.
after little fellows, and all they got was & lot of
I can't tell--
agents shot in woods, and they got somebody with a five
MR. NUNAN: I think that's right.
Regraded Unclassified
PRECISION
TRADE MARK
MICROSTAT
MICROFILM
ROLL NO.
211
212
- 7 -
- 8 -
or ten gallon still, and fellows living in the Waldorf-
Astoria got away with murder. So, I'd like to see--
on time that. I think we have to talk first, because by the
H.M.JR: Well, of course, you and I don't agree
I want everybody to do everything they can. I agree
with Ar. O'Connell, there's a three hundred sixty-five day
job for a good many years to come, but as far as the
and they forget We exist.
United States Attorney and the Department of Justice,
it gets around to indictments, it's only the
newspapers are concerned, I would like to continue to
stress the big shots. Are we all right?
MR. O'CONNELL: I know, but at some point--
MR. O'CONNELL: I just don't want to have these
Feltus and Fussell, and start right. I don't care
like you to have & little meeting with him, with
H.M.JR: But if the Commissioner agrees, I'd
people all stop work.
MR. NUNAN: Of course, Mr. Secretary, on that I had
one or two letters from some Collectors asking about
where, Now York or Chicago, and pick a good man and
publicity, and I wrote back and said that the drive
let him be there, one who knows public relations,
was emanating from the Treasury and any publicity that
work it up. How about that, Nunan?
and advise with the Collectors and do it gradually,
should be given to it should come from here. How this
statement went out I don't know.
MR. NUNAN: If you want it, it's all right. I
H.M.JR: I'm glad you raised that. I'd like you to
would rather have it come from here, the way you have
try possibly raising the ban on that. If we could pick
been giving it, because you're going to get more
Chicago, somebody that has some judgment, who could assist
one good man in the important places, each place, New York,
you're going to be surprised to read, I don't care who
the man you put in.
the Collector at New York or the Collector at Chicago, so
that we get good publicity. I think we have got to let
I don't want them to feel they couldn't talk. You think
H.M.JR: will you think It over? I'm not pushing.
these fellows talk.
it's better to come here?
MR. PEHLE: I noticed in one letter that came in
there's no local publicity, and the cause for that is there
MR. NUNAN: Yes, then you can control it.
are no local people giving it out.
back and see me again.
H.M.JR: Suppose you have a little talk and come
H.M.JR: Joe, can you arrange this week end a
little meeting that Fussell could sit down with the
MR. O'CONNELL: Good.
Commissioner with the idea of possibly either designating
somebody in each of these more important offices, and
then maybe of a little work sheet to guide them-- what
atmosphere? H.M.JR: Anything before We go into rarified
we would like, you see, what they would like to follow--
Feltus is very much interested in this too.
have redsed it before, it's 8. minor point and relates
MR. O'CONNELL: On the statistical thing, I should
MR. O'CONNELL: Looking ahead & little, the best
publicity we can hope to get, and that sho ld be almost
to statistics generally in connection with revenue
entirely local, would be the good effects that come
out of reports of indictments and convictions.
of responsible for, and has a great interest in, the type
statistics and Atkeson's position. Blough is generally
statistics on income that come out of the Bureau.
Regraded Unclassified
RECISION
TRADE MARK
MICROSTAT
MICROFILM
BOLL
NO.
213
- 10 -
- 9 -
MR. C.S. BELL: It's in there enough for the Bureau
of the Budget to identify it. (Laughter)
I don't know how close he has been to this operation;
I gather not very close. I want to be sure no changes
H.M.JR: All right. Well, now, I want Mr. Gaston,
made in the Bureaus collection of statistics would out
Pehle, O'Connell, Commissioner, if you are interested.
across anything he has interest in. He has no interest
Dan you can stay.
in progress statistics, but you know his field. In
addition, Roy is very anxious, and rightly so, that he not
MR. D. W. BELL: All right. I don't know what it's
be deprived immediately of the assistance Mr. Atkeson
about, but I'll stay.
has been giving him and other people on the Hill on the
Tax Bill. That's most urgent int he next two or three
weeks.
MR. NUNAN: Mr. Atkeson said he could handle this
if it wasn't & breakdown and still do this.
H.M.JR: Was he on the Tax Bill? 1 thought it was
getting your appropriation.
MR. O'CONNELL: Oh, no, the Tax Bill.
MR. NUNAN: As a matter of fact,he's our general
utility man and does a good job any place.
MR. ATKESON: We service theDivision of Tax Research
in Mr. Blough's office in respect to all financial data
he needs from tax returns in connection with formulating
the tax program.
H.M.JR: What did we get out of the House Appropriations
Committee?
MR. C.S. BELL: Sixteen million three hundred thousand,
with a blank check for next year.
H.M.JR: Isn't that what I asked for?
MR. KLOTZ: You got everything you asked for. Did
you see Klutts this morning?
H.M.JR: Yes. I smelt Charlie Bell. it smelt good.
MR. D.W. BELL: Did they put the blank check in the
report.
Regraded Unclassified
PRECISION TRADE MARK MICROSTAT/ REG. v. S.PAT. OFF, MICROFILM
ROLL NO.
12"
Attachment 4.
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE June 23, 1945
TO
Secretary Morgenthau
FROM Charles S. Bell
pull
Subject: Current Plans for
Internal Revenue Expansion
In addition to the steps already taken and reported to
you in eerlier memoranda, Commissioner Nunan, Mr. O'Connell
and I have agreed to the following procedures for expediting
the development of 8. top notch law enforcement organization
in the Bureau of Internal Revenue.
PERSONNEL PLACEMENT
Instructions have been issued to Collectors to release
five men each to the Special Agents, Intelligence Unit, in
their respective districts in order to fora a nucleus of
trained personnel for the expending investigative service.
These instructions will be supplemented by directions to
release an additional number of experienced deputy collectors
who are acceptable to the Intelligence Unit and deserving of
promotion.
Similar instructions will be issued to Supervising Agents
in Charge, Alcohol Tax Unit. Further, experienced Revenue
Agents who have shown special interest and aptitude for investi-
gative work shall be transferred if mutually agreesble to the
Reveque Agent in Charge and the Special Agent, and approved by
the Bureau.
The transfer of these men, with the exception of Revenue
Agents, shall be made without prior approval from Washington,
and the Collectors shall be automatically authorized to promote
PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL
NO.
215
- 2 -
from within to fill vacancies thus created and to recruit
locally to fill zone deputy collector positions at the
entrance level.
In making these transfers the transferred employee shall,
if otherwise entitled to the privilege, be transferred with
reemployment rights on the Collector's Office.
Concurrently with the recruitment of new personnel,
qualified Revenue Agents and Special Agents shall be pro-
moted in accordance with the Bureau's promotion from within
policy.
The previously established ratios for stenographic and
clerical employees shall be controlling at this time and
all offices are to be instructed to recruit accordingly.
SUPERVISION
In connection with the enlargement of existing and the
establishment of additional field offices, supervisors will
have to be developed and assigned to construct these offices.
Sufficient intermediate supervisors must be developed rapidly
in order to maintain an acceptable standard of production
and at the same time provide adequate supervision and on-the-job
training for the new recruits.
For the most part, the supervisors should be selected
from existing personnel in the Special Agents' offices. Con-
sideration should also be given to the best qualified employees
transferred from the collectors' offices. Procedural instruc-
tions, directing the special agents to carry out such plans
will be prepared and released to the field.
Regraded Unclassified
RECISION
TRADE MARK
MICROSTAT/
RSG.
o,
PAT.
OFF,
MICROFILM
ROLL NO.
Hh
- 3 -
TRAINING
The training of new recruits and newly sppointed super-
visors shall be developed by Mr. Elmer Irey, with the concur-
rence of Commissioner Nunan. The existing facilities of the
Coordinator's Office and the Bureau of Internal Revenue shall
be utilized for this program and it will be carried out in
each of the Special Agents' districts. The training program
already under way in New York City will serve 8.8 a pattern
for the other Districts. In the event 8. given district has
no personnel available or qualified to carry out the training
program, arrangements will be made to provide training
specialists from Washington or other Districts.
CHARACTER INVESTIGATIONS
Character investigations of all new recruits shall be
the responsibility of Mr. Elner Irey, and instructions will
=
be issued to the District Coordinators immediately, outlining
the new type of streamlined investigation that is to be made,
SPACE AND EDIPANT
With the exception of 25 cities to be covered by the
Treasury Department's space control staff, authority to lease
space and purchase equipment subject only to post approval
by the Bureeu saell be granted each Special Agent, Intelligence
Unit, and each sevenue Agent in Charge, Income Tax Unit, 8.3
well 6.8 Collectors. This authority small be conditioned by
the prevailing ratios employed by the Buresu.
Procedural instructions implementing this authority will
be prepared immediately. If possible, present recommendations
of the Agents for the establishment of fleld offices in certain
cities will be spproved immediately Lo expenite the establish-
ment 9. Sue offices.
Regraded Unclassified
PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO.
217
- 4 -
WORK LOAD PROGRAMING
The Bureau will take immediate steps to survey present
operating procedures with a view toward making such changes
in organization and methods as may be necessary to channel
and distribute the work of the Bureau in harmony with the
expansion of respective offices. In this respect it is
agreed that the tentative expansion quota set may be subject
to change during the next few months.
INSTRUCTIONS AND DIRECTIVES
All policy directions regarding personnel, organization,
space or equipment scall be promulgated over the signature
of the Commissioner of Internal Revenue, with the advice and
concurrence of the General Counsel and the Administrative
Assistant to the Secretary.
Concurred in:
Commissioner of Internal Revenue
General Counsel &
Approved:
decretary of the Treasury
Regraded Unclassified
PRECISION
TRADE MARK
MICROSTAT/
No.
U.
PAT.
OFF,
MICROFILM
ROLL NO.
Attachment B.
TREASURY DEPARTMENT
218
INTER OFFICE COMMUNICATION
DATE June 23, 1945
to Mr. Charles S. Bell
FROM Secretary Morgenthau
During the next few months I think that you can be of
special service to me and the Commissioner of Internal
Revenue if you arrange to devote 8. large portion of your
time to the administrative problems connected with the
Revenue law enforcement expansion.
Joseph O'comell and
Specifically, I want you, with Commissioner Nunen's con-
currence, to advise and assist in putting into operation
adequate procedures for recruiting, training, distributing,
=
promoting, end transferring persons engaged to work on this
drive. You should give the Commissioner every assistance
possible on problems of space, office equipment, and related
administrative services.
I want you, Mr. O'Connell and Commissioner Nunan to
examine thoroughly the present organizational setup in the
Bureau of Internal Revenue, including the possible need for
top administrative personnel. The three of you should sub-
mit for my approvel such plans for changes as you may agree
are necessary to schieve meximum effectiveness in this can-
paign, and for the permanent improvement of the Bureau,
I an detsching Mr. Elmer Irey from his other duties to
assist, temporarily, you and the Commissioner in carrying
forward this special program of work.
OK.I.M
Jong
Jec
TRADE MARK
MICROSTAT!
156. U. 5. PAT. OFF.
MICROFILM
ROLL NO.
Attachment C
NEW
YORK
Herald
Tribune
219
JUN 21 1945
Tax Men Look
Manhattan north of Twenty-third
Buest. James W. Johnson, cel-
lector. said both his field office
For Unreported
DATE were being expanded
Fitty agents have been put to
work entirely on black-market In-
Dollars Here
comes by the 3d District, in lower
Manhattan, covering real estate
and fur and jewelry transactions
Federal Agents Expect to
is vas this district, under Cal-
lector William 2. Pedrick, which
Uncover Hage Sume in
found the will unnamed -
Delinquent Income Levies
tourant owner who, according to
Secretary of the Treasury Henry
Morgenthan F. "overlocked" .
The full ingensity of the Fed-
$2,300,000 Income
eral income tax agents and the
A drive concentrated en those
scores at new comers recently
service trade workers walters,
added to their staff has been
taxi drivers, barbers. manicariata
turned into exploring sources of
and beauticiano-whone tip in-
unreported tax dollars in the met-
cottes have doubled and tripled
repotition area.
duris à var boom was reported in
By delving Into such matters
Newark by Robert Smith, chief
as the cash purchases of fur costa
Beld deputy for the Fifth New
and the gross volume of business
Jersey Diatries.
in which lavish tipping has oc-
Bach up-receivers vote advised
curred during the war. they n-
by Mr. Benith to propare their in-
pert to turn up hundreds of these-
come reports for the last two
rands of dollars in delinquent -
years for security by twenty-fre
special investigators who have
come tases.
employed in these
In Brooking and Long Island,
trades. "Practically every case,
the let District Collector of In-
we're bringing in now." Mr. Barth
termal Revenue office is making .
said, showed failure elther to -
special arruting of check cashing
port tips as part of income or at
concerns. to track down those per-
best only reported "A nominal
5
sons who don't care to let their
amount
incomes appear in the form of
Many delinquenta, he said, were
bank deposits.
two-job workers, such as . night-
John E. Brady. assistant eal-
time taxi driver who would work
lector, said resterday that "con-
in a factory by day and report
siderable drinquencies" had been
only the factory Income Mr.
developed by probing Into real
Smith said his agents would reckon
estate deals, where the purchase
up . "reasonable" income for any
⑉ made in cash, or Into cash
delinquent claiming to have kept
buying of each Items of wearing
DO record of tips received. He de-
appared M for costs.
rimed to reval any formula for
An extensive drive sestrat
this, but observed that the bureau
black-market incomes, under way
realized "barbers in downtown
for several months, was expected
shops received - better
If produce "hundreds of -
those in meighborhood
sands" of dollars' additional reve-
intores."
true is the Id District, covertas
RECISION TRADE MARK MICROSTAT MICROFILM ROLL
NO.
June 26, 1945
- 2 -
221
4:20 P. M.
220
HMJr:
Hello.
HMJr:
Yeah. Is that the best you can do?
Mrs. George
M:
I might be able to get them up a little bit, but
Mellen:
Hello, Mr. Morgenthau.
I don't know. The woman vas down today and she
made that offer. She was going back to talk to her
HMJr:
Speaking.
husband and whether there enthusiass will be in-
creased or lessened I can't tell you.
M:
Mr. Morgenthau, Mrs. Mellen.
HMJr:
Have you had anybody else?
HMJr:
Yes.
M:
No, I haven't had anybody else. I tried, but as I
M:
I have some people who would be interested in taking
say, people who want large places are apt to have
over the Cotuit House.
their plans made before this.
HMJr:
Yes,
HMJr:
Yeah.
M:
Unfortunately, they don't want to pay but $1500,
M:
And I haven't been able to get anybody else at all
but we don't have many people coming along looking
interested.
for large houses right now, and I thought I had
better let you know about it. The demand for the
HMJr:
Well
large houses is almost evaporated. People make their
plans ahead of time, you know.
M:
It 18 quite a drop but it is better than nothing.
HMJr:
Ahuh.
HMJr:
That's true. Well, see what you can do, Mrs. Mellen.
I'll leave it in your hands.
M:
And I'm sure it's a family that would be acceptable
to Mrs. McLeod..
M:
All right, Mr. Morgenthau.
HMJr:
From when to when?
HMJr:
I'll leave it in your hands, but I think that if
they don't want it after the 15th of September..
M:
What vas that?
M:
No, that's -- I forgot that your - when I was talking
HMJr:
They want it for the season?
with them the first time - that your lease went into
October 80 I told them September 15th. So they
M:
Well, July let to September 15th. I nean you weren't
wouldn't expect it after that.
planning to use it at all were you?
HMJr:
Now we want to make it perfectly clear that I will
HMJr:
Well, I didn't know whether I could maybe get up there
be in no way responsible while they are the tenants.
for & couple of weeks in the Fall or not.
M:
Oh, I know, they will understand that and, of course,
M:
Well, I told them September 15th, and I looked up
they will take over all the utilities, and they will
afterwards and found that your lease went to October 15.
pay you all in one payment.,
HMJr:
That's right.
HMJr:
They will.
M:
And that would give you a month there.
M:
Yeah. Well, I'm going to talk with them tomorrow and
I'll see what - if I can get them up a little bit, I
HMJrt
Yeah. They want it from when?
will.
M:
July let to September 15th.
HMJr:
See what you can do.
M:
I will.
Regraded Unclassified
PRECISION
TRADE MARK
MICROSTAT/
ML
OFF.
MICROFILM
ROLL NO.
222
- 3 -
223
HMJr:
Thank you.
June 26, 1945
M:
who But, are going to have a large place like that
as I say, it's too bad, but of course, people most
4:20 p.m.
of them made their plans by now.
BRETTON WOODS
HMJr:
All right.
Present: Mr. White
Mr. Luxford
M:
All right, thank you.
Mr. Pehle
Mr. O'Connell
HMJr:
Thank you.
Mr. Feltus
Mr. Bernstein
M:
Goodbye.
H.M.JR: Hello.
Well, I got & very quick report from Joe O'Connell
from the Hill.
MR. O'CONNELL: It was very quick because there
wasn't much to tell you. Harry and I went down to
see Senator Wagner and Tobey about the points you
discussed this morning about the extension of the
Stabilization Fund. Neither of them seemed to have
very much interest in it and the only thing I got
out of it was that they were quite hopeful that
this was a pretty good chance of getting the bill
passed by next week, and they didn't see any particular
reason for attempting separate legislation for the
Stabilization Fund, although I had difficulty knowing
whether Wagner was focusing on it at all.
MR. WHITE: It was the first time I had seen
Wagner so almost certain of the passage that there
would be no trouble about it.
MR. O'CONNELL: That was the only encouraging
thing about it.
MR. WHITE: But he left the thing a little in
the air whether they would raise the thing Tuesday,
because it was the day before the Fourth of July.
Tobey thought they might preferably wait until the
following Monday, and he did not say definitely,
but the assumption was they were going to have it
Tuesday, begin the discussions Tuesday.
Regraded Unclassified
RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO.
225
224
- 3 -
- 2 -
H.M.JR: He can't push Wagner into this?
MR. O'CONNELL: I think if I can reach Barkley on
the phone before the end of the day--they have been tied
MR. O'CONNELL: Tobey can.
up on conferences on the OPA bill all day. It seems with
Barkley we could have a little more hope of success in
MR. WHITE: It was Tobey who suggested not having it.
giving the thing 8. push, and this Fourth of July business
is ridiculous. The fact that the majority of Congress
MR. O'CONNEL: That's the trouble, but Wagner didn't
won't be here the Fourth of July isn't any reason for
seen to pay much attention to that.
not introducing the bill and starting discussions on the third.
H.M.JR: Is there any use in my calling Biffle?
MR. WHITE: One thing is Senator Wagner has an hour's
speech, and I think he probably is going to be reluctant
VR. O'CONNELL: No.
to talk to five Senators.
H.M.JR: Why not?
MR. O'CONNELL: He can talk on the third.
MR. O'CONNELL: The one person to call, and Harry and
MR. LUXFORD: Everybody is going home and they want
I agreed I would do it when I could reach him, was
to be home on the Fourth of July.
Barkley.
MR. WHITE: However, that is uncertain.
H.M.JR: I don't mean on stabilization, just on
where the bill stands. I haven't talked to Biffle
H.M.JR: Is it a good speech, Bernstein?
in 8. week.
MR. BERNSTEIN: It is a good, dull speech. It's
MR. WHITE: There is a little danger now. Wagner
what he wanted. (Laughter)
might think you are going over and beyond him.
H.M.JR: Do you think it would do any good to
MR. PEHLE: Isn't everything going all right? Why
call Tobey?
don't you leave it alone?
MR. WHITE: Not Tobey, Tobey is all right. I think
MR. LUXFORD: It's going very well.
Barkley is the man who--
H.M.JR: I don't know if you boys are right if it
H.M.JR: I was thinking if Tagner made a speech on
is going to be a week from Tuesday.
the second, I might remind Tobey of the last Fourth of
July oration he made at Bretton Woods.
MR. O'CONNELL: The thing is good. The thing I
thought you were worried about was the Stabilization
MR. WHITE: Wagner reminded him of it.
Fund.
H.M.JR: But there is no chance of getting Tobey
H.M.JR: There is one thing, but I thought of Biffle.
to do it again?
MR. FELTUS: When are they talking about recessing
MR. O'CONNELL: Tobey will nake a speech all right.
for the summer?
H.M.JR: Wagner won't know if I call Biffle.
Regraded Unclassified
PRECISION
TRADE
MARK
MICROSTAT
MICROFILM
ROLL NO.
226
227
- 4 -
- 5 -
MR. O'CONNELL: I don't see what you could get
from Biffle.
H.M.JR: You fellows don't give me credit for any
common sense.
MR. WHITE: Biffle might tell Wagner you called him
to find out about this thing, and the fat would be in
MR. LUXFORD: I said you don't want word like that
the fire.
to get out.
MR. FELTUS: Biffle will play ball. Ask him not
H.M.JR: No, all of you. I didn't just nean Luxford.
to mention it to Wegner. He is a politician.
MR. WHITE: There is a representative of the Mead
MR. WHITE: Mr. Feltus, Wagner is getting very prima-
Committee--
donnish. The least word--today, for example, he said something.
MR. LUXFORD: I'll give you a little credit. (Laughter)
MR. BERNSTEIN: If they don't take it up Tuesday,
H.M.JR: Just a soupoon. That's French for dann little.
why do they have to wait until the following Monday?
Why can't they do it Thursday?
MR. HITE: I never heard of that.
MR. WHITE: There won't be mybody there after
MR. BERNSTEIN: S-o-u-p-c-o-n, but it takes 8. little
Thanksgiving--after the Fourth of July. (Laughter)
They are going on a long week end beginning Tuesday.
longer to say. (Laughter)
H.M.JR: Well, anyway, I find you all very dull,
MR. LUXFORD: They won't be here Monday.
(Laughter) If you weren't all very polite, you might
MR. FELTUS: Biffle started his Fourth of July
say, "That makes it unanimous.
vacation today.
MR. O'CONNELL: It doesn't seen there is any chance
that San Francisco will go ahead of Bretton Woods if
MR. WHITE: They can get the votes, but they might
we take next week and the following week. San Francisco
vote on the amendments. That's the danger.
doesn't get here until next week.
KR. O'CONNELL: That's only an assumption.
H.M.JR: If you fellows don't worry, I am going to
H.M.JR: The thing I am worried about is this may
worry.
get into a tangle with San Francisco.
MR. PEHLE: Then we can say we told you so.
MR. WHITE: Could be.
H.M.JR: That doesn't help.
MR. LUXFORD: On the other hand, you don't want
MR. WHITE: Something we might have to worry more
word to get out that Morgenthau is insisting they
about is the Mead Committee is meeting tomorrow, and
don't take their Fourth of July holiday, because
that would make them md.
they propose--their representative was here and they are
informing us--to talk to us, and they propose to go
Regraded Unclassified
RECISION
TRADE
MARK
MICROSTAT/ MICROFILM
ROLL
NO.
228
229
- 6 -
- 7
into the question of exchange rates, who determined
MR. LUXFORD: Yes, until after Bretton Woods.
them, what was the basis of it, why the difference of
opinion, and 80 on. They have got quite 8. few questions.
H.M.JR: I agree with Luxford.
MR. FELTUS: Who is?
MR. WHITE: lie have to do some awfully fast work if
that's the case.
MR. WHITE: The Mead Committee, and they have already
picked up a lot of stuff.
MR. O'CONNELL:Isitm Executive Session?
MR. PEHLE: Who is their representative?
MR. WHITE: An Executive Session.
MR. FELTUS: Rudy Halley.
MR. LUXFORD: They will approach you out on the
Floor. You don't know what the rates are.
MR. WHITE: I don't know.
H.M. JR: Who will take this over and try to get it
MR. PEHLE: Halley will play ball.
postponed? Whose baby will it be?
MR. WHITE: It isn't a question of his playing ball,
MR. WHITE: I wouldn't even know how to go about
it's the Committee.
that, because Senator Mead--this is a small part and
they want a report.
MR. PEHLE: Do they rely on investigations or--
MR. FELTUS: Biffle could handle Mead, and Kilgore
MR. LUXFORD: Postpone it until after Bretton Woods.
is one of the top ranking members and is very active
in it. You can find out what is going on from him.
MR. WHITE: It was postponed until tomorrow, but they
I will find out, if you like, but if it is Ferguson
have got a lot of other items on the agenda. They want
who is doing it--Mead is 8. lot weaker person than
to know all about surplus property, rand they are disturbed
Ferguson, and Ferguson is running away with that
about the evaluation of lend-lease in reverse, and so on.
Committee.
Now, I agreed we could have somebody there.
H.M.JR: Boys, put your heads together. I think
H.M.JR: Who is that?
it would be very unfortunate if we had to testify.
MR. WHITE: They want Treasury, State, and FEA.
MR. WHITE: It is an Executive Session. They say
it isn't to testify, it is just a conversation.
H.M.JR: Whom did you nominate?
MR. PEHLE: Who were you going to send up?
MR. LUXFORD: You would get into a fight about what
the rates would be before Bretton Woods is through.
MR. WHITE: I was going up.
That's the kind of thing Biffle ought to be able to
pull us out of.
MR. O'CONNELL: Not exactly. The sessions have been
pretty well handled, and they haven't sounded--
MR. WHITE: Do you want to postpone it?
Regraded Unclassified
230
231 r
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
- 8 -
DATE 26 June 1945
MR. LUXFORD: You let them cover a fight between
War, State, and Treasury.
TO
Secretary Morgenthau
MR. WHITE: They already know the Treasury opposed
FROM
Mr. Luxford
an increase in rates from seventy-five to fifty in
North Africa, that ne started with seventy-five and
fifty WS S imposed. Now, I an sure that I could--
MR. LUXFORD: Why fan it?
Apropos of my report to you yesterday on
MR. WHITE: No.
Burgess' testimony before the Senate Banking &
H.M. JR: Look, suppose you fellows adjourn to somebody
Currency Committee, I am attaching today's
else's office and talk about it. But I think it would be
too bad, and I would like to talk to Feltus on another
newspaper reports.
matter.
The interesting thing is that all of the
Good afternoon.
newspapers headlined Burgess' testimony as
indicating the ABA will accept the Fund.
602
Attachments
PRECISION
TRADE MARK
MICROSTAT/ MICROFILM
ROLL NO.
Sige New York Times.
232
JUN 26 1940
SWITCH TO ENDORSE
WORLD BANK PLAN
American Bankers Also Accept
Fund but Suggest Modify-
ing Bretton Woods Plan
WASHINGTON, June 28 -
The American Bankers Associa-
tion, changing M earlier stand,
endorsed the Bretton Woods -
tary agreements today with . pro-
viso for some changes. Previously
is had opposed parta of them.
W. Randolph Burgan, president
of the association, suggested that
the - board of directors should
govern both the proposed $8,800,
000,000 International Stabilization
Fund and the $8,100,000,000 Inter-
national Bank for Reconstruction
and Rehalditation.
Mr. Burgian first had represent.
ed the M opposing the
fund, center of most of the hos-
ulity to the agreements. How-
ever, be told the Banking Commit-
tas of the Benate at today's hear-
Ing that the fund - well as the
$
bank would be fesable with -
modifications
Declaring that the "short-term
character of advances" to nations
from the fund needed clarification
be suggested a requirement that
nations purchase exchange
be required to above they could
Shake repayments within eighteen
months and that they agree be-
forsheind to de No.
Be praised changes made in. the
plan to the House which has voted
approval. The Senate abould make
the additional "dartification" be
- and instruct upon than as
conditions of United Bates mem-
to both the fund and the
beak.
W. L Hamingway, president of
the Bank
and Trut Company of BL Louis,
total 4 consittes the Upited
States ahould extend to Great
Within medit to tide " through
the transities pariod VM to
1
Benefor Thomas of @labems
introduced two to the
Woods plan, one to BM-
the Treasury to mint ass
= cotes and another to allow the
Onital Blates to - its eurplia
Nover M part payment of the
Americas - to the -
posed fund
The INK cola, containing an
busine of - - only be theo-
refical, be declared, rether than -
a actual direction. Leader of
the Sensite altver blac, be said his
keep the mation
* Must vistalle, -
IND rether than - Banaged
paper currency."
The committee research will -
Date is the WALL
PRECISION
TRADE MARK
MICROSTAT
No. V. 5. PAT. OFF.
MICROFILM
ROLL NO.
233
The Fournal of Commerce
JUN 26 1945
Burgess Drops Opposition to Monetary Fund
ABA President Calls for
condition should not be subject
operations of the fund should be
le waiver, 11 would follow a proce
postponed." Benster Taft experied
dest of the Federal Reserve Bye
that 15r. Burgane - apposed to
Safeguards Rather Than
1001 and other banks of lasse la
the fund but vas bewing to a
Delay to Senate Body
having . definite materity fee só-
pressure of the
vances. he commented.
Mr. Burgen 44 not ancept this
Would Bont Co-ordination
Interpretation M correctly stating
of Journal of Commerce
A further asfeguard which sould
his views, While be expressed the
belief that postponsment will desir-
WASHINGTON, June
be added without altering the beste
able, be said that "under the -
inc . previous stand of opposition
Bretise Woods plan would is.
sumstances # would -- beet to
la the Bretten Woods Menetary
crease the degree of co-ordination
estaguard M as much - possible."
Fued. w Randoigh presi-
between operations of the Mone
His lestimeny left little deubt
that the AGA preferred not to put
dest of the American Bankers Ae-
lary fund and the Reconstrution
en recerd M asking outright
sociation, today gave effective -
Bank. siready provided for in the
postponsment of the monetary -
document of the $8,800,000,000 eta-
House-passed plan.
attations M they had been pro-
billestion fund.
While the House plan calle for
posed after long efforta of Republic
marging the offices of the United
0622 and Democrata is the House
Mr. Bargens appeared before the
States efficial serving - governor
committee to errive a/t. an accept-
Benate Banking and Currency Com-
on the bank and the fund, Mr.
able compremias.
mittes which le studying the house
Burgese asked that the executive
-
pessod monetary propossis to tall
directors of both inalitutions also
Nover Action
the Sensiore that if be were is
marge their functions, 80 experate
WASHINGTON, June a (AP).
their place be would vota approval
directors would not serve on the
The Resair's aliver y undertook
of the plada,
two institutions. As the plan N°
Would Fellow Home
stands. twelve directors are -
loday se the . campaign for world
While the ABA spokesman said
vided for the bank and fund
montary recognition of the while
that be personally would prefer to
and twoive alternation for each
metal to the Bretton Woods agree
postpone operation of the Mone-
making . total of forty-eight. In
menta-
lary Fund, around which the ABA
the opinion of the ARA spokesmen,
this was too large . number 18
Benator Thomas (Dem., Okla.1.
eriticlem has contered, be replied
la questioning by Renator Alben
make - affective working greep.
the leader, sald reporters be would
Barkley (Dess, Ala.) by
and the principle of having exp-
talk the Banking Committee to
"If I were in your place, with the
arate bank and fund directors
hear him as . without on propossia
action of the House before me, I
should be dropped.
that:
would proceed to enfeguard the
There la . very good change
Fund rether than a postpose the
here of two many cooks spolling
1. The Treasury be authorised
operation
the broth. he commented.
to mint coins containing an ource
of goid.
There are two ways of approach-
Tell Bone "Treater"
1. The Treasury be directed la
ing the problem, Mr. Burgens elab-
When Mr. Burges told Benefor
use any after not held security
crated either by postposing lia
Barkley F would vote for the fund
for outstanding remark de part
operation until . more normal 2+
If be were in the Benefor's place.
That part of the America nichi
ried, or by providing for sale-
Benator Rebut Taft (Rep. Oble),
scription to the propesed
parés, "I recognize that you are
monitary fund opponent, m/d.
times monetary fund which is not
headed in the around direction." 34
"What you mean la that the
required la be paid in gold
mid.
He meintained that the safe-
gurde provided by the House
which had. among other Chinge,
provided against long-term stabili-
nation loans by the Monetary Fund
were in the right direction AS-
though, be climed, they should be
strengthened.
The ABA spokesman suggested,
for instance, that the short-term
character et advances by the Mode
tary Fund should be clarified to
provide " a condition of - of the
fund "that it can be shows to the
- of the Fund that the
member making the registered
eschange can repay within 18
months an dagrees to de -
Mr. Burget contended that such
Regraded Unclassified
MICROFILM
ROLL NO.
MICROSTAT/
REG. U. s. PAT. OFF.
RECISION
TRADE MARK
THE
SUN
JUN 2 b 1945
Burgese praised
made
A.B.A. SHIFTS
the plan. of 44 membel
the House of Represent
which already has voted - ag-
ON BRETTON
proval. He said the Senate should
make the additional "clarifica-
Lions" be outlined and Instrt agen
them as of United
States membership in both fund
Now indorses Monetary Agree-
and bank.
A colleague et Burger in ABA
ments With Certain Changes
W. L Hambagy who is president
of the Marcantile- Commente Bank
Washington
June
If
Pr-TM
and Trust Company, of BL. Louis,
American
Antiviation
tald the committee 4 United
changing " earller, posides, Las
States dosid extend Great Britde
dersed the Bretton "Woode -
credit to tide # through Use terminal-
tary Agreements today va . -
tien period from for to pease.
viso for certain changes. Preficial
He did MR name any knount,
# had opposed portions et the pinis
Thomas Has Two Amendments
outright.
Sension Themas (D, ORGA.) 40-
W. Rendeigh Burger ABA
peared before the committes to
president, auggetted that the -
advocate two proposed amend-
board of directors should
menta to the Bretten Woods plan,
both the la
one to authorise the Trumpy to
ternational defilitation - and
mint 335 gald entra and another to
the a 190.000,000
allow this country to - the -
bank for receive and -
plus stiver as part payment of the
habilitation
American subscription to the pro-
Burgest initially had
posed fund.
ed ABA - apposing the NM.
The gold coin, containing -
center of most of the apposition
conce of gold. need entry be theo-
the agreements, However, be told
retical, Themas declared, rether
the Senate Banking - -
the be in actual circulation. The
day the - - well as the
Oklahoman, leader of the Senate
2 I I 1 I 1
allent bloe, said his amendmenta
Scattege
would keep the sation "as a would,
Clarifications Sought
metallic, monetary hanis raiber
Declaring that the
than - . managed paper -
character of advanced" -
reacy
from the hat needs
After hearing several other rit-
be suggested . requirement the
- the contitutes recessed -
member
-
beardage the Brettom Wogds pro-
change be required to the
possia und
tater is the
were
plan-
within rights
ning to no
tertined the
and
that
they
Harry D.
Assistant
beforehand to de No.
DATY of Line secury. - . final
I
Regraded Unclassified
RECISION
TRADE MARK
MICROSTAT/
REG. PAT. OFF.
MICROFILM
ROLL NO.
The Washington Post
JUN 26 1945
ABA Amends Bretton Stand,
Asks Funds Be Provided Now
" the - Pross
The American Bankers Associa- the House of Representatives
kien, changing an earlier position,
which already has voted na approv
at. He suid the Senate about
indorsed the Bretton Woods mone-
make the additional "clarifications
Lary agreements yesterday with a
be outlined and instat upon them a
provise for certain changes. Previ-
conditions of United States new
jously is had opposed partiens of the
bership in both fund and bank.
plan outright.
A colleague of Burgess is ABA
W. Bandolph Burgens, ABA presi-
W. L Hemingway, who is presi
demt of the Mercantile-Commert
dent. engansted that the same
Bank & Trust Co. of SL Louis, tax
board of directors should govern
the committee the United State
both the proposed 88.800.000,000
should extend Great Britain credit
international etabilization hand and
to tide in through the transition per
the $9,100,000,000 international
riod from war to peace. lie did
bank for reconstruction and rebs-
not name any amount.
bilitation,
Senator Thomas (D., Okla) ap-
Burgera initially had represented
peared before the committee to ad-
ABA as opposing the fund, center
vocate two proposed amendments
of most of the opposition le the
se the Bretten Woods plan, one to
sgreementa. liewers, he told the
authorize the Treasury to mini $35
Senate Renking Committee today
gold relas and another to allow
the "fund" as well as the bank
this country to use its surplus ail-
would be fessible with some modi-
ver - part payment of the Ameri-
fications
can subscription to the proposed
Declaring that the "short-term
fund.
character of advances" to nations
The gold coin, containing an
free the fund needs clarification,
ounce of gold, need only be theo-
be magnet - requirement that
retical, Themas declared. rather
member nations purchasing ex-
than be le actual circulation. The
change be redired to show they
Oklahoman, leader of the Senate
can make relayments within 18
aliver bios, said his amendments
months and PAR they agree before-
would keep the Nation "on . pund,
hand to de
metallic, monetary basis
ther
Burgess praised changes made to
than - a managed paper
à
the plan of 44 member mations to ready."
Regraded Unclassified
PRECISION TRADE MARK MICROSTAT/ No. V. 5. PAT, OFF. MICROFILM
ROLL NO.
New York Telegram
JUN 25 1945
ABA Ends Opposition
To Monetary Fund
By the - -
that the - "M - longer a
WASHINGTON N-W.
question of "yes" or no. The
Bandelph presides of
hearthgs. the solion of the Rouse
the American Bankers today
in approving the agreement, and
the trand of public spinios are all
an qualified approval. to the
in favor of International -
proposed international monetary
tary co-operation.
to be - - under the Brei-
n becomes, of amend-
in Voode agreement.
ment to mate York mote
THE partially reversed previous
efficiently.
ABA to the bad in
Barkley Quaries Rs.
testallony before the Details Bank
T take n then," Ben. Alben W.
ing and Currency Committee, -
Barksley (D. Ky.), mid, That the
plaining the an by remarking
Bankers' Amt. - longer recorts-
mends elimination of the fund?
- workda't the to make =
your minda for you." Mr. Burgess
said.
"No," lies. Barkley replied, "but
I vant you to make - your minds
for yourselves,
# I - in your place, with
the action of the New before
me." Mr. Surger said, "I would
recognise the signation and de
what I could to esteguant the
fund."
Bm. Robert A. Tan (R., Ohie)
an appaints of the whole MTM-
ment, interrupted,
"What you new be mád. "M
that the operations of the fund
should - postponed. You're -
powed to the fund, but you're too-
time to the promite of the Inevi-
table."
Registe
Mr. Burgew encled.
"Will net exactly," be repaired.
"In 017 judgmans IN should per-
hape be postponed. But under the
circumstances is would - beat
to asfeguard is M much as pos-
sible."
As be proposed that
the - board of directors person
the fund and the proposed THE
for International sellements.
Alao, be mid. the NETWORK -
perhage should be amended to
provide that short-term towns the
the fund be made only - the
condition that the borrowing DAY
Non repay in 18 months.
He - losse from the fund
i
be "highly inflationary
money.
Regraded Unclassified
The
Fun
JUN 25 1945
BANKERS REVERSE
ON BRETTON WOODS
Washington, June 25 (A. P.).
The American Bankers Ano
dation reversed today the earlier
position recommending that Con-
grom postpone effect of the pro-
posed $8,800,000,000 International
stabilization fund.
W. Randolf Burges, president
of the A. B. A., said be now felt
It la "feasible" to go abred with
the fund as the twin of the a.
100,000,000 International bank for
resonstruction and development
in the Bretton Woods monetary
agreements of forty-four nationa,
Mr. Burgens had represented
the A. B. A.'s view is opposition
to the fund in House Banking
Committee heartngs. He told the
Benate Banking Committee to
day that changes which the
House has since written tato
legislation enabling this nation's
participation to the plan have
improved the chances for success.
Mr. Burgess agreed under
questioning by Senator Taft (R-
Ohio), a. leading opponent of the
fund. that he will had . personal
dislike for some phase of the
fund end still had a incline
tion to favor the postponement.
This led Benator Barkley (D.
Ky. to Inquire just what was
A. B. A.'s position on the whole
plan.
Mr. Burgess distributed .
statement to reporters saying
House amendmenta had "only
partly" clartified the short-term
character of advances made to
member nations from the fund.
He advocated & clearly stated #
quirement that members making
purchase of exchange from the
fund agree to repay with eigh-
teem menths and show in advance
that they are in & position to
do so.
"This condition should not be
subject to waiver," Mr. Burgess
said. This would be following
the precedent of the Federal Re
serve system and other banks of
tasue in having a definite ma-
turity for advances."
Mr. Burgens suggested. too,
that the bank and fund have the
same board of directors is the
interest of co-ordinating functions
of the two establishmenta,
"The way It la now." The Told
the committee, "there to . very
good, chance of too many cooks
spotling the broth."
RECISION
TRADE MARK
MICROSTAT/
156. U. 5. PAT. ON.
MICROFILM
ROLL NO.
THE WALL STREET JOURNAL
JUN 26 1945
Burgess Calls Fund "Peasible"
Senate Group Proposes
WASHINGTON Un-The American Bank-
Amorication reversed the earlier position
Silver Be Given Role in
that Congress photogram -
promit of the proposed as billion high
World Monetary Fund
total Stabitestion First.
W. Randolph Burgen, A.B.A. prodent,
said be now full If is "Yearbia" to - should
with the - M the twis of the billies
Bloe Seeks to Tie Drive for Recogni
International Bank for Recomatruction and
tion of This Metal to Bretton
Development proposed in the Bretton Woods
monetary agreements
Woods Part
Mr. Burger had represented the A.B.A.Y
view to oppliation to the Part in House
Banking Committee heartngs. But be told the
WASHINGTON an-The Benefits
Benale Banking Committee yesterday that
bloe undertook to Use . campaign for work
changes which the House has since written
monetary recognition of the while metal
into the Brittle Woods legislation have -
Bretist Woods agreements.
proved the Fund's chances for -
Sension Themas (Dem. ORIA.), - 1
adversed . classity etated requirement
Lold reporters - would set the beake
that members making purchase of exchange
committee to hear him - a witses -
from the Pupd agree to may within 18
possia that:
moths and in intrance that they Vire -
1. The Treasury be authorized to mist
position to ao.
- estaleing M - of gold, and
Mr. Hurghés too, that NM
#. The Treasury be directed to - say
Bank and Fund have the same board of di-
aliver not hald - security for octatané-
restors in the interest of coordinating -
ing currency to pay that part of the
time of the two establishmente
American autocription to the proposed
Interpational Monetary Fund which is -
required to be paid is gold.
Mr. Thomas proposed these - amendments
to pending legislation for American
to the Brettion Woods agreementa.
Mr. Themas is chairman of a special
Benate Bilver Committee where members
have been holding informal conferences -
ways to promote à bi-metallie monetary -
He said that - drafted. bia amondments
were domestic legislation which would not
require any changes in the Bration Woods
agreements Na said his hope was the eventually
world exchange payments would be in terms
of his proposed - eda, the goid
with attive boiding . ratie to Ald based en
their relitive production. The world NOW
produces about eight times M much street
annually - gold.
RECISION
TRADE MARK
MICROSTAT/
REG. U. 5. PAT. OFF.
MICROFILM
ROLL NO.
NEW
YORK
239
Herald
Tribune
JUN 20 1945
"Well, not
Burgess
my jude-
a be past-
Safeguards
Bel
under
is world - - le
puant a - such - possible.
Monetary Fund
As esteguarás be proposed that
the - board of directore porent
the find and the proposed bank
4. B. A. Head Approves in
for terminational
Also, be mid. the agreement
Part Bretton Woods Plan
should perhaps be amended to -
at Hearing in Senate
ride short term - trom the
hand be - entr - the condi-
NO that the borrowing Tastigo #
WASHINGTON, June 28 (UP).
par =
-W, Randriph Burges, president
No and loans - the had
x the American Bankers Associa-
world - "Mair information
300, gam qualified societal today
money."
to the proposed International not-
stary fund to be - up under the
Pretion Woods agreement.
Mr. Burgen party reversed pre-
vious A. B. A. opposition to the
fund to before the Ben-
are Banking and Currency Com-
millee
He explained the shift to remark-
Ing that the taxe "M no longer .
question of "yes" or "no." These
hearings. the setion of the House
in pproving the agreement and
the trend of public opinion are all
in favor of international monetary
co-operation.
"Il becomes a matter of and
mens to make the fund work more
efficiently."
=I take in then." Benator Alben
W. Barkley, Democrat. of Km-
tacky said, "thes the Bankers -
sociation no longer recommends
elimination of the fund?"
"We wedde's like to make on
your minde for post Mr. Burgen
said.
"No." Benator Barklay replied.
"Inst I wast you to make - your
minda for yourselves."
"If I vere in your place. with the
action of the House before me."
Mr. Burgess said. 7 would recog-
nise the situation and de what E
could to enfeguant the the
Benalor Robert A. Tall. Repub-
Dean, of Oble, an apponent of the
whole agreement. interrupted.
"Whaled" mean," Benstor Tan
said, 1 that the operations of the
tund should be portpgent. You're
opposed to the fund. but you're
bowing to the pressure of the II-
evitable."
RECISION
TRADE MARK
MICROSTAT/
PA/T.
ORF.
MICROFILM
ROLL NO.
June 26, 1945
240
2:37 P. M.
- 2 -
241
HMJr:
HMJr:
Hello.
But there 1s considerable pressure on me, you see?
B:
Yes.
Attorney
n.Biddle: Henry.
HMJr:
And I wanted to see if I could get any...
HMJr:
Yes, Francis.
B:
B:
you called ne about - Charlie Carr. Do you remember?
Henry, I've looked at the file now on the nan that
use my name all you like, but I just don't want it to
Henry, there 18 no reason-if talking to the President,
know what I mean.
United States Attorney- he'd say I'd block him. You
come back and to go back to Carr - one of my assistants-
HMJr:
Very well.
c.
My summary - I've also talked to Matt Korrea and two
HMJr:
B:
want him.
Well, I've already told the President that I didn't
or three of the other people. My summary 18 about
this. I don t think there is any evidence to show
that he was slack or lax,or not on his toes out there.
B:
Fine.
I don't think he 18 a top-flight lawyer. I think an
abler lawyer would have gone into this thing more
HMJr:
which I don't think he will, I wanted to be able to
But it is the question - if the President raised it,
say, "Well, this 1sn't just my opinion.' If I can say,
"It's also Mr. Biddle's.
HMJr:
Yeah.
B:
B:
I know Carr quite well personally. I think he is a
Sure, sure, go right ahead.
man of moderate good judgment, a little invulsive -
quite vigorous, but not very well, technically, e-
HMJr:
quipped for a really important position.
more about it.
But I don't think that Mr. Truman will say anything
B:
HMJr:
I see.
Yeah. Well, you are perfectly free to do that, Henry.
That 18 about my summary. In other words, I think
HMJr:
B:
you can trust him as an individual, but not as a
anybody. That's all -- but, outside of that, I won't say it to
lawyer, if you see what I mean.
B:
Fine. Righto.
HMJr:
Well, how about his judgment?
HMJr:
I'm coming to your reception tomorrow.
B:
I don't think it 1e very good, Henry, frankly.
B:
Henry? Oh, that's lovely. I'a delighted. How is your lady,
HMJr:
Ahum.
This, of course, is most confidential.
HMJr:
Not at all well.
B:
B:
HMJr:
I know, I understand.
Oh, dear. She vas better for a while.
But told me what it was for, and I personally,
HMJr:
B:
if I you were in your shoes, would hesitate a good deal.
Yeah, but since Friday she 1en't feeling well at all.
B:
Well, I have already told President Truman I didn't
Well, give her our joint regards. I'm awfully sorry.
HMJr:
HMJr:
want him.
I'll do that. Thank you.
B:
Bye.
B:
Yes.
Regraded Unclassified
RECISION
MICROSTAT/
MICROFILM
BOLL
NO.
June 26, 1945
11:46 A. X,
242
- 2 -
243
HMJr:
Will, you are the darnedest fellow I ever saw.
C:
Yes. I think that 18 a wise thing. So for the
present it would have to be off.
Mr. Will
Clayton:
What's the matter, Henry?
HMJr:
Well, he asked me to stay here.
HMJr:
Well, either I can't talk to you for a week, or else
O:
Yes, I know.
you want to see ne on the drop of a hat.
HMJr:
So it is off.
C:
(Laughs)
C:
Yes.
HMJr:
As President Roosevelt used to say "You sound as
though you had ants in your pants."
HMJr:
And come September, and I have an itching foot I
0:
(Laughs) Well, I've been trying to get over to see
think I'll take & little trip.
you for a week and they've had me on the Hill
C:
practically all the time - one committee or another,
Yes, well, it, of course, might be possible in August.
and I've just been running my head off. I had an
HMJr:
engagement with you once and had to break it on no-
Not the way he talked.
count of something up on the Hill.
0:
Not the way he talked.
HMJr:
Well, what's on your sind?
HMJr:
No.
C:
Well, I really can say it on the telephone. You re-
C:
member you called me up at home one Sunday.
Now, Henry.
HMJr:
Not the way he talked.
HMJr:
Yeah.
C:
Not long ago. Well, of course, I have been thinking
Yes. I think from that conference I will go to
C:
about the matter but it developed just a few days
London and be there about the end of July or first
after that, that I probably will go with the Presi-
of August, and then on the 7th the UNRA Council
dent on this Three-Power thing on account of some
starts it's meetings.
economic questions that will probably arrise, and
HMJr:
take one or two men with no. As that seems to be
Well, do you think the Three-Power will be over that
mon?
in the cards, I wouldn't be able to do the other,
and I've got to be in London on the 7th of August
C:
Well, I -- they usually never last over two weeks, do
at the UNRA Council.
they?
HMJr:
Oh, yes. Well, since I talked to you the President
HMJr:
asked me definitely to stay in the country while he
I don't know - I don't know what he had in mind, but
and the Secretary of State are out of the country.
he said to me September for some reason or another.
C:
Really?
C:
Yes.
HMJr:
HMJr:
Because with the two of them out, I'm the next.
Yeah.
C:
O:
Yes. Well, that is a very natural thing.
Well, I just assumed that
HMJr:
So he asked - subsequently to my talking to you -
Two weeks, eh?
HMJr:
he said, @Please to stay here.® And then he said
when he comes book I can go anywhere that my heart
C:
That two weeks would be the limit, but I may be wrong.
But what I vas going to say to you is that we probably
desires.
will have -- want to have in London in the first week
in August if I can get there at that time - some talks
on a pretty high level there about post-war commercial
Regraded Unclassified
PRECISION TRADE MARK MICROSTAT MICROFILM ROLL NO.
- 3 -
244
- 4 -
245
etc. And there's sure to arise some question
HMJr:
Yes.
C:(cont.)
policy, about Britain's needs in the transitional period.
C:
I see.
HMJr:
Yeah.
HMJr:
And then we loaned him to Judge Rosenman when
And was Glasser go over there as soon as I cable that you
I wondering if you wouldn't like to let
Rosenman made his trip.
0:
Harold when I can arrive. It may be, as you say, know. this
O:
Yeah.
thing will last on into August. I don't
HMJr:
So he 18 really pretty well posted.
HMJr:
Well, I've got a first-class man there now - Taylor.
C:
All right, I'll check on that.
C:
Taylor.
HMJr:
You check on Taylor.
HMJr:
He's right there.
C:
Yeah. Sometime - do you expect to be here right
Our fellows all seemed to like Glasser fine. very
along for the next two weeks?
O:
Ahuh. much, and I like his too. Ve get along
HMJr:
Yeah.
HMJr:
Ask them about Taylor.
C:
Well, sometime soon I want to make an appointment
Yes, all right. What 1e his name?
with you to sit down and go over this English position.
C:
HMJr:
Bill Taylor.
Yeah.
HMJr:
C:
C:
Bill Taylor.
And to discuss with you some other aspects of...
really sort of Financial Attache there, and com- he
HMJr:
I'm not busy, I've got nothing to do - just give me
HMJr:
He has 18 a formal position on the European advisory
a day e notice.
mittee.
C:
(Laughs) All right.
C:
I see.
HMJr:
But I can't do these drop of the hat business like
And then he used to sit here as Treasury representative
you'd like to.
HMJr:
with MoCloy.
C:
But really, Henry, I didn't want to take any of your
time this morning, I vas just going to drop in to say
0:
Oh, yes.
to you what I said to you on the telephone.
HMJr:
McCloy knows all about him.
HMJr:
I called you up a couple of days ago after
called up to congratulate you on the fine work you've
C:
Yeah.
done.
HMJr:
And gets along very well with McCloy, and he gets along
very well with Winant.
C:
Well, nobody told ne.
HMJr:
Yeah. I left word there - the day after the Trade
0:
Yes.
Kilgore went over there he said of all the the
Treaty passed that I wanted to tell you how pleased
I was.
HMJr:
And people when over that came before his, Taylor made best
0:
impression.
Well, you are awfully nice. It really was & great
victory, wasn't 117
C:
Senator Kilgore?
Regraded Unclassified
MICROSTAT
MICROFILM
ROLL NO.
PRECISION
TRADE MARK
- 5 -
246
HMJr:
It was a wonderful victory - I know how hard you
TREASURY DEPARTMENT
worked at it.
247
INTER OFFICE COMMUNICATION
0:
Gee, we sure did work, and it shows that public
opinion 1s behind us because we never could have
got by these pressure boys and minority selfish
DateJune 26
groups except with the strength of public opinion.
TO
Secretary Morgenthau - Confidential
1945
HMJr:
I tell you, if you want to come over Thursday and
FROM
Randolph Feltus
have lunch with me, I'd be delighted.
C:
Excuse ne just a. minute - let me look at my calendar.
I've got an engagement, but I'll break it, - at what
time?
in the press of the rumor that you will retire after
You have no doubt noticed a persistent recurrence
HMJr:
One o'clock.
completion of the Seventh War Loan Drive, This is
C:
I'11 break it and I 11 get my papers together and
and Ickes.
added to all dope stories having to do with Stettinius
1'11 be there at one o'clock.
You tell her you'll see her some other time.
It is guite possible that Stettinius and Ickes,
HMJr:
or one of them, will resign soon. If that happens,
C:
Yeah, (Laughs) 0. K. Thanks very such.
tion. it will add credence to the rumor about your resigna-
HMJr:
o. K.
I recommend that you announce one or more pro-
grams or projects which will involve you closely and
C:
Bye.
personally for some months after the Seventh War Loan.
If it is made clear that in December you will do BO-
HMJr:
Bye.
of the Treasury, the rumor can be scotched.
and-so, and in February such-and-such, as Secretary
If such announcements are made, I can have a
position is solid as indicated by your program.
couple of columnists and commentators argue that your
If possible, Truman's endorsement of the announced
program should also appear. Ve can plant a question
or two at his press conference to take care of this.
I know there is no need for ne to point out how
the uncertainty caused by this rumor can affect the
morale of your staff and the cooperation of other
programs. government departments and the públic in Treasury
R.T.
Regraded Unclassified
RECISION
TRADE MARK
MICROSTAT/
no. v. s. PAR, OFF.
MICROFILM
ROLL NO.
\
249
248
- 2 -
26 JUN 1543
viewed the Internal Revenue laws as being general
and impersonal in character, to be applied to all
without discrimination. That basic principle will
govern the handling of this case.
My dear Senator:
Sincerely yours,
In your letter of June 20, 1945 you ask
several questions regarding the John Hartford-
Elliott Roosevelt loan transaction.
Henry genural, jr.
This matter has been the subject of
discussion with Congressman Doughton, Chairman
of the Ways and Means Committee of the House of
Representatives and Senator George, Chairman of
the Senate Finance Committee. In these disous-
Honorable Raymond E. Willis
sions it was agreed that the Bureau of Internal
United States Senate
Revenue would complete a thorough investigation
Washington, D. c.
as soon as possible and submit its findings to the
Congress through those Committees. The Bureau is
proceeding diligently to that end.
The Senate Finance Committee, as you know,
is authorized by law to obtain from the Treasury
and to disclose to the Senate information from Income
tax returns which I an not otherwise privileged to
disclose. I an confident that your interest and mine
in the vigorous and impartial enforcement of the
Internal Revenue laws will best be served by proceed-
ing regularly with the full development of facts in
this case for transmission to and consideration by
the appropriate Committees In the Congress as is now
contemplated.
In view of some of the observations in your
letter, I think I should state that the Treasury
Department, during my administration, has always
TJL:JJO'C:a:mv
Regraded Unclassified
- & - MARK, -
MILLARD a. -
- - - our
- . - -
i * 1 a ,
I 1 # 1
RETURN a. - -
PETER . - -
a. MAILAND - M.
- at - PLA.
I I I
- 4. LA.
- . -
1 Γ I
LEVENITY -
United States Senate
4. EMETLAND, -
- a - -
PRINCIS L MYSES, FA.
COMMITTEE ON NAVAL AFFAIRS
- . - -
June 20, 1945
Honorable Henry Morgenthau, Jr.,
Secretary of the Treasury,
United States Treasury Building,
Washington, D. C.
Dear Mr. Secretary:
I have followed very elocely the disclosures
and statements regarding Elliott Roosevell's $200,000
loon from John Burtford, president of the Crest 14 P
Ton Company. At the Date time, I have noted your
intention to put on 10,000 new enforcement agents to
work to uncover what you have termed startling income
tax evacions. Further, I understand, you have called
upon the banks to report to you any unurual trinsportions.
La THE both realize, the disclosures relating
to Elliott and Mr dealings with Join Photford,
plus the long period that elapeed betteen the :Ine Nortford
claimed the Image deduction and the Mae you announced
the Bureau of Internal Revenue Buresu investigation,
reflect not only upon your former chief and our late
president, Franklin D. Roosevelt, but upon the operation
of an egency directly under your supervision, the Buronu
of Internal Revenue.
In the interests of good government and of
your own record, I have no doubt that you are anxious
to give the public all information possible about every
angle of this case.
Therefore, from my interest in keeping By
people amro of visit 10 happening in government and
because I want to be well informed on this subject, I
as requesting you to reply to the following questions at
your early convenience:
TRADE MARK
I 2"
- 2 -
1. My did the Bureau of Internal Revenue wait until recently
to begin investigating Hartford's 1942 deduction of such a
large amount? Had the officials of the burous guined know-
ledge the Westbrook Pogler Intended to make the disclosure?
2. Do you not feel that It in time for drastle improvement
in the service of the Bareau of Internal Revenue when this agency
of the government in two years behind in investigating the
returns of the richest an in America? It is now four years
after the war began and five years after income levels began
to rise swiftly due to direct and indirect was work.
3. Would you use the 10,000 new enforcement agents on these
higher brackets, rather than concentrating on the smll basinessman
while the big ones get by with claiming hage deductions for
each lossen AS the one claimed by Hartford?
4. The tax Collector of Internal Revenue et the time the Hartford
1942 return NAF filed? If the return was made at the usual time
early in 1943, Robert E. Portasster General and
chairs a of the Democrable donal Comitties, collector.
Did you ever talk with Mr. about this particular
return, Lnd, if no, what NO.0 his excuse for not making the
necessary investigation at that Line?
5. In view of the fact that you have access to all records of
the Burena of Internal Revenue, cnn you tell ne rhetime or not
Elliott reported the ultimate disposition of the
$196,000 be Finaled from John Hartford, and If be did not do
this, when not? Alno, our you tell me whether or not Elliott
Roosevelt negotiated other "lounn" from other prominent men,
as has been rumored?
6. If a young civilian of 29 were to deposit $200,000 or more in
a bank, although having no great noticesble Income, would
you expect a banker of today to report that as an unusual
transaction? Or what exactly do you sean when you request
banks to report every tax
Assuring you that I an with you in every good cause to
promote honest government, I as
Yourd mgs/r Singerely,
RECEIVED
SPEC CORRES CONT.
JUN 23 245
Raymond E. Willin
HUM 187 BIN
NO
TellC
252
June 26, 1945
My dear Mr. Pleven:
By now, you will have received official
notice from the President, through our State
Department, that he has asked be to postpone
my trip to France.
I was very sorry that I could not accept
your very kind invitation to come to France
early in July and assist in the opening of the
War Bond Exhibit. However, I hope that the
situation will be such that I will be able to
make 8. trip to Europe after President Truman
returns to this country.
With kind regards,
Sincerely yours,
(Signed) Marry Morgenthan, Jr.
Honorable Rene Pleven,
Minister of Foreign Affairs,
Paris, France.
ROLL NO.
SPECIAL
253
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE June 25, 1945
TO
Mrs. Klotz
FROM
Secretary Morgenthau
I want to write a personal letter to Pleven telling
him how sorry I am that I can't come over now and that I
hope to come over later. Please remind me.
RECISION
TRADE MARK
MICROSTAT
ass.
PAT.
OFF.
MICROFILM
ROLL NO.
2550
254
77: 5. George little
June 26, 1945
June 26, 1945
From: Jame L. Houghteling
Mailing lists
Mr. Fussell of Secretary Morgenthan's office has astred - to
prepare 4 list of from 900 to 1,000 names of labor outlete - TO-
ceive copies of Congressman Wright Patman's recent statement in the
Congressional Record in commendation of the program and work of
the Secretary of the Treasury. I muggest that reprints of Congress-
man Patman's remarks be sent to the following mailing lists which
are on file at our office in Chicago.
Dear Bob:
list
No. of
No.
List Title
Plates
For your information, I an enclosing
14
C.I.O. Labor list Newspapers
177
herewith 6. copy of Senator Willis' letter
15
A.F.L. Labor List and Misc. Newspapers
415
15-A
Railroad Labor Press
16
to ne, and my answer to him.
246-A
C.I.O. International Unions
to
246-C C.I.O. State Industrial Union Councils
36
246-F
A.T. of L. Organisations and Departmente
106
Sincerely yours,
21,6-G
A.7. of L. State Branches
48
363
American Newspaper Guild
84
922
Also one copy to:
D. B. Robertson,
H. W. Preser,
President,
President,
Brotherhood of Locomotive Piremen
Order of Railroad Conductors of A.,
and Engineen,
O. n. c. Building,
Keith Building,
Cedar Rapids, Iowa
Cleveland, Ohio
William Green,
Honorable Robert L. Doughton,
Alvanley Johnston,
President,
House of Representatives,
President,
American Federation of Labor,
Washington, D.C.
Brotherhood of Locomotive Ingineers,
Mass, Ave, and 9th Street K.V.,
Engineers Building,
Washington, D. C.
Cleveland, Chio
Philip Murray,
A. F. Whitney,
President,
President,
Congress of Industrial Organisations,
Brotherhood of Railroad Trainen,
718 Jackson Place N.W.,
B. R. T. Building,
Washington, D. C.
Cleveland, Ohio
T. c. Cashen, Chairman,
Railway Labor Executives Association,
10 Independence Avenue S.W.
Washington, D. c.
The mailing to the above lists will give the article in question
a very fine circulation among labor leaders.
Regraded Unclassified
RECISION
TRADE
MARK MICROSTATI MICROFILM
ROLL NO.
FROM: Newspaper Stertion
-
MIGHTY
Release date
251
Var Finance Division
256 r
Treasury Department
A.M.
P.M.
Washington 15, D.C.
Release No.
NEWS
DESK
WAR LOAN
June 26, 1945
Room 746, Fashington Building, Washington 25, D. C.
Forms E. Two Chairman, diffed Nampaper Conner Diver
& Camera Lms Special Considers, Treasury
Bawa D. Bus, International - Service
L. Lass Later Balar
Bearne Durs. For Finance Division, Edior
Now Kensen, Publishers
- F. McCarrent, Financial Frie
Amazo Come for /
Durse lieure
Mas -
hours Times Newspaper
Pan - United Press
Office of For Information cooperating
DESDIATE RELEASE
790
WASHINGTON, D. C., June 26 - The winning quotation from
Franklin
Dear Walter:
D. Roosevelt's speeches, to be imprinted on a special war bond to be
For your information, I am enclosing
issued in the 8th "Tar Loan as a nemorial to the late president, will
herewith a copy of Senator Willis' letter
be announced by Secretary of the Treasury ''orgenthmu during a broad-
cast over NDC on Friday, June 29, from 10:45 to 11 p.m., ETT.
to me and my answer to him.
The Mashington newspaperman who submitted the winning quotation
Thank you very much for your helpful
will receive a war bond award from the Secretary. Associate Justice
Oven J. Roberts of the U. S. Suprene Court was judge of the contest.
suggestions.
Decision to innue the menorial bond, to carry Roosevelt's
Sincerely yours,
picture and the quotation, was rade by President Truman and Secretary
Morgenthau in a conference on how best to met the public denand for
(lignai) Sours
such a memorial, a Treasury spokesman explained. It was a physical
impossibility to print and distribute such a bond in the interval be-
tween President Roosovelt's death and the opening of the Seventh Tar
Loan, so it was ande the first project for the next war loan. The
contest was opened to "ashington newapapermen and correspondente and
three war hand prizes will be marded for three quotations considered
most appropriate.
Honorable Walter F. George,
The program will be heard in "ashington over Station mc.
United States Senate,
222
Washington, D.C.
INTEDIATE RELEASE -- PADIO PAGES "ID LISTINGS
790-A
Washington, D. C., June 26 - Secretary of the Trensury Henry l'orgen thau
Jr. will tall: on progress of the 7th "ar Loan on the Victory Parade of
Spotlight Bands program, "ednesday, June 27, 9:30 to 10 p.m., ETT, over
the liutual network.
(The loor: "ashington outlet is 701).
0.00
Regraded Unclassified
FROM: Newspaper Section
-
Release date
258
MISRTY
War Finance Division
Treasury Department
A.M.
P.M.
Washington 15, D.C.
No.
NEWS
DESK
WAR LOAN
Room 746, Washington Building, Washington 25, D.C.
Faces D. Taxes, Chaires died Nompaper Coundil, Conner Director
5. Cause Special
a. Bus, - New Service
L lane Leases, Laber Idea
Burrow Date For Finance Disision, Edior
Mose Nagro Newspaper Association
FRANCE a. McCurrer, Financial Frier
- Coan, Manageria Ser-Jared
Date -
Max Best, described Press
Serviços Newspapers
Fin Bases, United Press
Office of For Information experating
RELEASE AMs, JUNE 26
Sp.Release #0-5
MASHINGTON, D.C., June 25 -Secretary of the Treasury Morgenthau
announced today that two milestones had been passed in the Highty
Seventh War Loan drive.
At the close of business Monday night overall sales
totalled $20,250,000,000.
Having passed 20 billion dollars at this stage of the drive,
=
Mr. Morgenthau mid, "It would appear that we are going to set a new
high in total sales for any War Loan to date."
He further pointed out that, more importantly, sales to
individuals in this drive, had passed a high watermark of all Loans of
the mr to date, Total of all types of socurities sold to individuals
in the Seventh Tar Loan reached $6,595,000,000 tonight.
However, the Secretary continued, since higher goals had boen
set for individual participation, there was still much work remaining to
be dono by volunteers throughout the country in order that these high
quotas night be attained.
Itr. Horgenthau concluded: "I believe that the results achieved
to date in the Seventh The Loan drive provo conclusively that the American
people not only are bound and determined to stand behind their fighting
non, but to see the vor with Japan through to complete and unconditional
surrender."
###
258
Hyde Park
Dutchess County, New York
June 26, 1945
Dear Henry:
I was delighted to see this and
although I have told you before, I want
to any again visit a grand Job you did on
Bretton Voods.
Affectionately,
ER
I dahage Sincer at lets sym,
anriety is between -
TRADE MARK
MICROSTAT
ON.
MICROFILM
ROLL NO.
(Not printed at Government expense)
facting
Congressional Record
United States
of America
PROCEEDINGS
AND
DEBATES
OF
THE
79th
CONGRESS,
FIRST
SESSION
Tribute to Hon. Heary Morgesthan, Jr.,
less repubites were relatively stable is
Let no one think of the present Berre-
Secretary of the Transary
largely due to arrengments " made
tary of the Treasury as & starry-cyed
with them.
Idealist intent upon only distant goals.
SPEECH
Secretary Morget/thau's keen sware-
Mis entire recent shows & deep realize-
HON. WRIGHT PATMAN
DAIS of the imminence of war in Europe
Use that his job a to ENTRY the United
and the possibility IL might become
Blates of America and the people.
or TENAN
IN THE HOUSE OF
world-wide, endangering the United
In the pran preceding the outbreak of
States, WM demonstrated as early as
World War II be was outstanding in his
Wednesday, June #, JNS
Mr. PATMAN. Mr. Chairman, no
1936. In that year the impreding de-
recognition of the necessity of seeing that
valuation of the French frane held
the United States should be prepared to
discussion of the Bretton Woods pro-
eram would be complete without a
treats of grave trouble. If the devalus-
ment any eventualities.
tion should have set off a MP Interna-
It was largely das to Becretary Mor-
tribute to the man who a primarils n-
sponsible for this opportunity to build
tional-enchange war, the French eco-
genther's institunce on American pre-
. solld economic foundation for world
nomic structure might be an weskened
paradres that American alreraft fac-
peace and world progress. I refer to
by riots and strikes that Hitler, even with
tories were tooled up, well is advance of
a military machine only half built, would
President Rossevelt's historie plea for
Menry Morgenthau, Jr., the Beretary of
have been encouraged to march in. with
50,000 airplanes, to assume their obliga-
the United States Treasury. II: has
the thought that be could take France
time
held that position longer than any ether
person in the history of the United
with Title or no struggle.
Il was largety due to Investigations
States, with one exception: be has door
This was part of the reasoning that Te-
teanched by the Treasury Department,
more during his incumberscy than any
sulted in the United States, Great Britain,
em before REATER'S attack on Poland.
that this country know what critical and
other Becretary of the Treasury, with -
and France Joining in the tripartite
exception.
agreement of 1936. The purpose of the
strategic materials is might require, if
The Brotton Woods program for the
agreement was to maintain & reasonable
war should bottle up our customary
International Bank and Fund " the eal-
party between the currencies of the co-
seguros of rupply. across the Atlantic and
operating nations. Holland, Beightm,
the Pacific,
mination of the policy of international
mondary and fnancial cooperation
and Switzerland soon Joined the origina-
I: was largety due to Becretary Mar-
which the Treasury Department Insure-
ton of the plan and the members of the
genthau's personal Interest that realistic
rated under Benefiary Morgetthau.
no-called sterling bloe likewise benefited
programa of helping China and par-
from eschange stabilization.
American countries meet their urgent
The decade of the 1933's, partly as .
IF. at that use, there had been the
economic problema were launched. But
result of the depression, was a period of
for these programs Japan might have
serious monitary disorder. Crentries
machinery under which eccessive and
were unable to maintain the value et
political cooperation could have been de-
crushed China in relatively short order
and Bittler and Masselini might have
their cachanges and world trade declined
veloped along with this monetary co-
been able to establish in our own bemi-
expidly. Difficulties were intensified to
operation, the AXIS Powers might well
the fact that Germany, girding for a was
have been carled and this terrible war
aphere. military bases for was against the
Dailed States.
of aggression, insuranced a virtest eco-
prevented. Unhapply, there vas no
Bone may say that such resenting is
nomie reign of terror, using restrictive
with machinery,
100 much in the category of what might
and discriminatory exchange controls to
Becretary Morgenthan remained, bow-
have been. Dut there can certainls be ne
attack established trade relations and to
constant in his knowledge that 10-
disputine the solid evidence of facts and
obtain a large supply of was materials.
onergie cooperation must underlie politi-
Deares.
Becretary Morgenthau realized very
cal cooperation and mail provide a solid
Let us turn to the matter of was financ-
early that only through International
foundation for any endoring poace. 20e
Ing. Birretary Morgenthau's record
cooperation would " be possible to tree
swalted the propitions time for bringing
resounds to fris credit at every point. He
world trade from the mounting volume
the peace-loving nations of the world to-
has unred, in one Congress after an-
of currency restrictions.
exther and the Bretton Woods Confer-
other, DEVERSE programs designed to keep
The fact that in the latter part of the
ence came as the result of his untiring
the Nation's finances upon . sound basis.
1930% the exchanges of the Latin Amer-
d'orta and unflagging and
His advice has net always been followed
2
CONGRESSIONAL RECORD
to the letter. n is to his crefit that be
today. And but for the start that -
from entre their only job and wall.
has unged sound financing at all times
made, lens before war clouds hure cver
ENTY exp. Insure come to - from proçõe
and that he has appoint such planse as
the world, this Nation world never have
was est "What in I de to beight Our plan
been able to distribute the bonds 40 widdly
to de securition attractive to all classes
the forgivences of $4,500,000.00 of use
due, when Income taxes were placed on a
or to make effretive emerally the cos-
of in - attempt to this
qualiva. I un thisk of no other single
basis, It in unfortanate
nomit that have b:en estate-
vay is etich is may people on become
that in this matter a past Congress failed
lished.
prizes of their Corrent to facing this
to heed his advice. But his tradership
The prople of this country recognize
has been preminent M all times. And #
what bes been done and what is being
Bone people in this country today are
is due to his eareful plannine that the
done. And their record in
- another side of decretary Margen-
great expansion in the Pederal debt. has
the cvery war toan to date will I in
than IL 18 quite in keeping with his
been echieved with stable Interest nin-
confident, be establed in the Mighty
trest in the people as a whole that be
far lower than have ever been actived in
Brenth Drive. sow in progress.
should be shocked at the discovery of
any previous war. If you who hear me
The people know 8:cretary Morgen-
mainfactors. n is quite in keeping with
will think back to the 412-perment esta
than is riebt, not only beenuse they see
has determination so protect the inter-
which prevailed during World War 1. and
the resilts of his policies. trat because
cata of the millions of as in uniform.
contrast this with the 196-permit rate
they know bis philosophy. Il is the phil-
the 53,000,000 individual texpayers and
prevailing today, you will need no fur-
exploy of Tivesas Jeferson, of Andrew
the bendholders that he has
ther argument on this point.
Jackson, of Aliesham Linecia, of Prank-
doclared unrelenting war upon the block
As a result, this country is saving sp-
in Reserved of Harry Truman. These
marketeers, the recketers and the other
persimately $4,000,000,000 a pur.
men knew the people. They trusted the
war proficers vie are in this terrible
This fact la not merely . tribute to See-
informed judgement of the peo-
exflet only an opportunity to smoke
retary Morgenthau's var record. IL
ple. And so does Henry Morgenthsu 2r.
personal wealth-and dodge their taxis.
comes about as the result of careful
I hardly nied to remind you of the
planning, prudent management of the
I prodict stern justice for there tax
pressure that was DO evident, early in
evaders, because 1 know the spir% that
Nation's fireal affairs = time of prace,
the war, for a system of compulsory say-
animates Birretary Mergenthau and I
plus intelligent development of new ideas
Ings. But Becretary vus
for the benefit of the Government and
know, too, what delight be taken in ad-
adamant upon this leve. He wanted
ministrative efficiency, in accomplishing
its people.
people to Invest their sevings is Govern-
media, ubatever be undertakes.
Arrangements for war financial are a
mem bonds, not under completion. but of
case in point. Back in 1935, what United
1. is. perhaps, a leng cry from the
their tree will-bersine they wanted to
States Barines bonds were first effered to
traunite accord of 1126 to the campaign
win the war and because United States
the public, there was no threat of war.
against tax evancon, and some of my
tends were the world's best and sitest
Dat it sermed to Secretary Morgenthase
may say there is mine conner-
investment. And Berretary Morgin-
that n. would be a. good thisg for the
the totaren war tond campulgns and
they's reasoning en this unless la so sig-
Government to have the national debt
Brition Woods. But 1 want to point out
mineant of the philosophy guiding all his
distributed M widely as possible, and
that the record of . man provides the
actions that I quete from what be mid.
that is would be a good thing for the
back in 1941. when be first arkend IN-
bei yarditick to missure bis stature.
people to encourage their and
theremise from Congres to borrow from
I point to the record et S:cretary
their interest in National Covernment, as
Mircenthse because it is AS cuistand-
the general public, through a defense SET:
its bondholders.
mes bond estipaign. The Secretary
ing record. Its has foressen develop-
We called them "Baby bonds" then.
ments on occasion after occusion. He
said:
But the Baby bonds of 1935 and succeed-
has and promptly and effectively. Be
Three extite in the country today 40 one)-
ins years grew into the Defense bonds
desire - the part of nearly every
NOV. lens RED. the necessity for . stable
that enabled this country to finance the
mas, waman und child to make accos dont
economic order if the world was to enjoy
preparedness program, and after Decem-
and sungible contribution to the national de-
prace. Today " have an opportunity
bet 1, 1941, they became the was bonds
have We esight to give them . - of pir-
to take advantage of his foresight, 261
that are bild by 83,000,000 Americans
account participation begond Uset which comme
planeine. Ms wordom.
650416-18128
- -
RECISION TRADE MARK MICROSTAT MICROFILM ROLL
NO.
M
259
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
Date June 26,
1945
TO
Secretary Morgenthau
FROM J. Y. Pehle
Points you may wish to raise at the three
o'clock meeting:
1. Assure full Bureau of Internal Revenue
agreement on the statistical work which
you want done covering all significant
Bureau activities. The figures are to
cover the period beginning July 1, and
=
be furnished to you every four weeks
in detail.
2. Confirm that the Commissioner is assigning
Tom Atkenson to this work, and that he is
being relieved of other responsibilities
and given the necessary staff.
3. I understand Charles Bell has obtained
the written concurrence of Commissioner
Nunan and Joseph O'Connell in a memorandum
which he has sent to you covering current
plans for Internal Revenue expansion. If
you are in agreement with such memorandum
it might be well to indicate your concur-
rence at this meeting.
4. I believe you wanted to discuss the
McKellar case further with some other
people present at this meeting.
5. Emphasis of tax drive not to be directed
against "the little fellow".
RECISION
TRADE MARK
MICROSTAT/ REG. U.S. FAT. OFF. MICROFILM
ROLL NO.
260 or
THE PLAZA BANK OF ST. LOUIS
ST. LOUIS. MO.
?
June 26, 1945
Hon. wright Potern, N. 9,,
House Office Bldg.,
Washington, D. C.
Dear Mr. Patamnt
Thank you Jt., Secretary of the Treasury, sixth,
for anding - a copy of your tribute to
1945. the resarkable in the Hon. House In lieury 6up fisce of opinion Reprose of during work Ar Atives in the Morgenthau 12 most on handling critical Wednesday, has done of periods the June & very finances which
of our extended government thoughout uda di service. It of was the
have past time for bio to regal public remognition
debt which se all oue Xia
Sincerely,
=
Windeggers
FRYWELF
Ce to lion. lienry Morgenthau, J.-
President
Secretary of the Treasury
Washington, D. C.
Regraded Unclassified
CISION TRADE MARK MICROSTAT/ MICROFILM
ROLL NO.
12"
6/26/45 - Original list sent
be Mr. Fussell.
s
RECISION
TRADE MARK
MICROSTAT
MICROFILM
sou NO.
261
- 2 -
262
Patman Statement to be sent to:
Mr. Sam Lewischn,
61 Broadway,
New York, Now York.
Captain Henry Morgenthau III,
0-1091909,
Troop B, 2d Cavalry Sq. (Meez),
General Edward 3. Greenbaum,
APO 403,
har Department,
c/o Postmaster,
Room 3E 724,
New York, New York.
Pentagon Building.
Lieut. Robert M. Morgenthau,
Mr. Harold Bochschild,
USS Harry F. Bauer (DM 26),
61 Broadway,
Fleet Post Office,
New York, New York.
San Francisco, California.
Mr. Morris L. Ernst,
Miss Joan Morgenthau,
285 Madison Avenue,
Davison Hall,
New York 17, New York.
Vassar College,
Poughkeepsie, New York.
Mr. Lawrence Greenbaum,
285 Madison Avenue,
Sew York 17, New York.
Mrs. Robert Morgenthau,
4440 West Lake Marriet Blvd.,
Minneapolis, Minnesota.
Mr. Herbert Wolff,
285 Madison Avenue,
New York 17, New lork.
Honorable Henry Morgenthau, Sr.,
1133 Fifth Avenue,
New York, New York.
Dr. harold Hyman,
940 Park Avenue,
New York, New York.
Mrs. Mortimer J. Fox,
Foxden,
Peekskill, New York.
Dr. Robert Levy,
730 Park Avenue,
New York, New York.
Mrs. John Knight,
40 East 66th Street,
New York, New York.
Mr. Bernard Heineman,
245 Church Street,
New York, New York.
Mrs. Paul L. Wiener,
399 Park Avenue,
New York, New York.
Regraded Unclassified
PRECISION
TRADE MARK
MICROSTAT/
MICROFILM
BOLL NO.
263
264
- 4 -
- 3 -
Judge Irving Lehman,
36 West 44th Street,
Mr. E. E. Brown,
New York, New York.
President,
First National Bank of Chicago,
Chicago, Illinois.
Mrs. Franklin D. Roosevelt,
Hyde Park,
New York.
Mr. Leo T. Crowley,
Administrator,
Foreign Economic Administration,
Mr. Alan Barth,
Washington, D. C.
The Washington Post,
Washington, D. C.
Mr. Harriner S. Rocles,
Chairman,
Hoard of Governors of the
Mr. Nathan Straus,
1657 Broadway,
Federal Reserve System,
New York 19, New York.
Mashington, D. C.
Miss Wabel Neacomer,
Mr. Fred Smith,
The Blue Network,
Professor of Economics,
Vassar College,
30 Rockefeller Plaza,
New York 20, New York.
Poughkeepsie, New York.
Honorable Brent Spence,
Mr. George Albee,
University Club,
House of Representatives.
Wilmington, Delaware.
Honorable Charles W. Tobey,
United States Senate.
Mr. B. M. Edwards,
1401 Main Street,
Honorable Robert 7. Magner,
Columbia, South Carolina.
United States Senate.
Mr. Fred M. Vinson,
Honorable Jesse P. Wolcott,
Director, Dar Mobilization,
House of Representatives.
Washington, D. C.
Mr. Dean Acheson,
Assistant Secretary of State,
Washington, D. C.
Regraded Unclassified
265
- 5 -
Mr. Alfred Jaretaki,
48 Sall Street,
New York, New York.
Mr. Arthur H. Sulzberger,
Publisher, New York Times,
Times Square,
New York, New York.
Members of Cabinet, including the incoming members.
Heads of Independent Agencies.
6/29/56
Mrs. Charles Heming
Miss Edith Hans
Mrs. Josten
266
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE June 26,1945
TO
Mrs. Klotz
Check for $131.25-
FROM
Mr. Fussell
turned over to Mr.
Fusell. 6/07/95
As the Secretary has been informed, the
following are the winners of the Roosevelt quota-
tion contest:
Mr. Daniel M. Kidney, winner of the
$100 bond
Mr. Ned Brooks, winner of the $50
bond
Mr. Thomas W. Kelley, winner of the
$25 bond.
At your convenience, would you please secure
the Secretary's check for $131.25 so that bonds may
be obtained for them as follows:
Mr. Daniel M. Kidney, -- $100 bond
2121 R Street, N. W.
(Daniel M. Kidney, Jr., Co-owner
2121 R. Street, N. W.)
Mr. Ned Brooks, -- $50 Bond
4614 Langdrum Lane,
Chevy Chase, Mr.
(Mrs. Mary J. Brooks, co-owner
Same address)
Mr. Thomas W. Kelley, -- $25 bond
906 Garland Avenue,
Takona Park, Maryland.
(Mrs. Barbara N. Kelley, co-owner
Same address)
RECISION TRADE MARK MICROSTAT/ MICROFILM
ROLL NO.
STANDARD FORM No. 54
Amounts BY THE PRESENT
FROM Secretary of the Treasury
BRANCH 10, 1926
26%
BUREAU
TELEGRAM
CHO. APPROPRIATION Exchange Stabilisation
OFFICIAL BUSINESS-GOVERNMENT RATES
26 JUN 1945
V. I. Wheeler, Jr.
Business & Industry Committee for Bretton Woods, Inc.
Notel Receivelt
In Tork, I. T
Retel your consittee is to be commended for giving public recognition
to the senators and congressmen who have worked together in & non-
partisan spirit to give the world mochinery for international economic
cooperation. the Brotten Woods proposals were conceived through the
cohseive action of 4% nations. Our Congress has followed through in
this constructive spirit, casting aside party pelitics to pull to-
gether in the public interest. By their action these statement have
pointed the way for intelligent relations between nations.
The sponsors of the legislation and the sembers of the House Beaking
and Ourrency Condition are particularly deserving of the gratitude
of all who was world peace and security. It was these statement who
guaranteed passage of the legislation through their demonstration of
stendfast devotion to public service.
As Secretary of the Treasury and as as individual, I send My heartiest
good wishes to your honored guests and to your condities which has
iteelf performed & notable public service.
Heary Morgesthau, Jr.
RF:Dr1 -6/26/45
Regraded Unclassified
E
will
G
R
A
WUB NL PD
P
NEWYORK NY JUN 22 1945
H
HON HENRY MORGENTHAU JR
96 JUN 25 NM 8 25
T
R
SECY OF THE TREASURY
E
A
THE BUSINESS AND INDUSTRY COMMITTEE FOR BRETTON WOODS, INC,
$
RALPH E FLANDERS, CHAIRMAN, 18 GIVING A LUNCHEON TO HONOR THE
u
CONGRESSMEN WHOSE NON-PARTISAN EFFORTS EFFECTED THE PASSAGE OF
Y
THE BRETTON WOODS LEGISLATION IN THE HOUSE. THE MEMBERS OF THE
T
E
HOUSE BANKING AND CURRENCY COMMITTEE WILL BE HONORED GUESTS AT
L
E
THE LUNCHEON, AND IN ADDITION, U 8 SENATORS WAGNER AND TOBEY.
G
THE LUNCHEON WILL BE HELD AT THE ROOSEVELT HOTEL IN NEW YORK
A
⑉ THURSDAY. JUNE 28TH. WITH 500 PROMINENT BUSINESSMEN AND THE
P
H
CONGRESSMEN IN ATTENDANCE. WE WOULD GREATLY APPRECIATE A WIRE
OF GREETING FROM YOU TO THE GROUP ASSEMBLED AT THE LUNCHEON
T
SINCE WE BELIEVE THIS 18 THE FIRST OCCASION THAT A PROMINENT
R
-
BUSINESS AND INDUSTRIAL GROUP HAS HAD THE OPPORTUNITY OF
A
CONGRATULATING CONGRESS PUBLICLY ON ITS STATESMANLIKE
$
U
APPROACH TO THE BRETTON WOODS ISSUE. A MESSAGE FROM YOU WOULD
R.
Y
ADD GREATLY TO THE SPIRIT OF THE MEETING. THE MESSAGE SHOULD
T
BE DIRECTED TO W H WHEELER, JR CHAIRMAN OF THE LUNCHEON,
E
L
BUSINESS & INDUSTRY COMMITTEE FOR BRETTON WOODS, HOTEL ROOSEVELT
E
NEW YORK
G
R
LOUIS P BIRK EXECUTIVE DIRECTOR
A
P
815A JUN 23.
H
T
R
BUSINESS AND INDUSTRY COMMITTEE FOR BRETTON WOODS Inc.
ROOSEVELT HOTEL MADISON AT 45th
NEW YORK 17
MURRAY WILL 4-3986
CHAIRMAN
SALPH E FLANDERS
June 22nd, 1945
SECRETARY
WALTER H. il
Hon. Heary Morgesthau Jr.
FREASURER
LOUIS SACHAR
Secretary of the Treasury
mashington, D. C.
ERECUTIVE DIRECTOR
IDUIS F.
Dear Sir:
.
he wish to confirm the following night letter sent to you
BOARD OF SIRECTORS
this day:-
VENES F. BESIDE
President,
Brown Myers Ca.
*The Business and Industry Committee for Bretton Woods, Inc.,
BORERT NUTLER
Ralph E. Flanders, Chairman, is giving & luscheon to honor
President,
Waller Butter -
the Congression whose non-partisan efforts effected the pos-
E. FLANGERS
ange of the Bretton hoods legislation in the House.
Provident
Anderal Reserve Bank,
-
The members of the House Banking and Currency Committee will
C. N. HILTON
be honored guests at the lunchson, and in addition, United
President
States Senators Wagner and Tobey.
bitter les
L INCORMACE
You Prevident and
The luncheon will be held at the Roo.mevelt Hotel in New Tork
on Thursday, June 28th, with 500 preminent businessmen and
Name
Livers, -
the congressmen in attendance.
LOUIS SACHAE
President,
Famile Ca
We would greatly appreciate a wire of greeting from you to
WALTER in WHILE -
the group assembled at the luncheon since we believe this
Provident,
is the first occasion that . prominent business and indus-
Friend
Exchage Made De
trial group has had the opportunity of congratulating Cone
gress publicly on its statesmanlike approsch to the Bretton
Woode issue. A measage from you would add greatly to the
ADVISORY BOARD
spirit of the meeting.
- Formation
EDWARD 8. secure
The measage should be directed to N. H. wheeler, Jr., Chair-
Charges at the food,
For Natural bank,
man of the -uncheon, Business & Industry Committee for Bretton
Chinago
hoods, Hotel Possevelt, New "ork."
24. MONAG A. REGRESS
- -
that De
Respectfully yours,
10/1 RENEADY
President
les -
- Carpo
Louis P.Bick
. MACK
Lovis P. Bark
President
- Williams Cop
Executive Director
20191 a. SICHINGON
Provident,
- Motorial
o I de
CARL M. WINNE
President
Overseas industrial, in
-
THE GENTRAL BANK OF CHINA
270
271
OFFICIAL DEPOSITORY or THE
HEAD OFFICE
CABLE *******
NATIONAL GOVERNMENT
CHUNOKINO, GHINA
it
June 26, 1945
26 JUN 1945
Honorable Henry Morgenthau, Jr.
Secretary of U. S. Treasury
ity dear lb. Secretary:
Washington, D. C.
This is in reply to the letter of 7 June addressed to
Dear Secretary Morgenthau:
Mr. White by Mr. Clayton conserning the termination of military
responsibility for civilien supplies in liberated areas.
I an glad to acknowledge receipt of your
letter of June 9, 1945 and to hear from you that
I understand that discussions have been proceeding between
the easing of the transportation situation has fa-
Mr. Mr. Crowley and Mr. Clayton - these entters. If I
cilitated the shipments of the remainder of the
any comment, however, on the letter of Mr. MoOLey which was
$200 million of gold to China. Your cooperation
atteshed to your letter of 7 June, 1% sours to no that the mill-
in this matter is greatly appreciated.
tary has responsibility for the importation of civilian supplies in
Italy as long as part of that country is under Allied Military Gon-
During my stay in this country I have re-
ermment in wideh the United States takes a part. In my case, I
ceived many courtesies from you and through your
- that the military relief program will not be terminated with-
friendship and understanding we have been able to
out prior consultation with the Italian Government - provided in
settle some of the pending questions between our
President Trum's letter also attached.
two countries. I shall cherish more than ever your
friendship that has stood the test of more than
It is disturbing to - to know that the policy announced to
twelve years. It is my hope that you will continue
the world by President Ressevelt and Prime Risister Churchill in
to extend to me the benefit of your advice and that
their joint statement of 26 September 1944 and adopted, I believe,
you will also help China's postwar reconstruction
by President Truman, has not yet been implemented, and that 11 may
program.
not be implemented in the future. Dush a complete failure to earry
out the promise unde in the 26 September declaration should not, in
With best wishes.
my opinion, be permitted to 00007.
Yours sincerely,
Sincerely,
H. 1974 H. Kung
(Signed) H. Morgenthew Jh
The Honorable,
The Secretary of State.
the 6/25/45
RECISION TRADE MARK MICROSTAT REG. U.S. PAT. OFF. MICROFILM
ROLL NO.
12"
- OFFICIAL - -
THE RECRETARY OF BRAIN
- . -
DEPARTMENT OF STATE
WASHINGTON
June 7, 1945
In reply refer to
LA
Dear Mr. White:
I enclose, herewith, copy of a letter dated June 2,
1945, from Mr. McCloy, Assistant Secretary of War, to no
in my capacity as Chairman of the Liberated Areas Committee.
The letter with its enclosure was read in the meeting
of LAC this morning and will be circulated with the matters
=
for further consideration. The letter is of such importance,
however, that I an forwarding 12 for your urgent personal
attention,
Sincerely W.Clayter yours,
N. L. Clayton
Chairman
Liberated Areas Committee
POSYTICTORY
The Honorable
BUY
Harry D. White,
from
-
Assistant Secretary of Treasury.
SECRET
Attachment 3 of LAC Linutes
THE UNITE HOUSE
May 21, 1945
Door Er. Sceretary,
On lovember 10, 1943, Prosident Roosovolt directed the
Any to undertako the initial burden of shipping and distri-
buting rolief supplios for liborated aroas of Europo ponding
the completion by civilian agoncios of plans to carry out the
nocessary long rargo plan of relief. The fact that our vast
military operations in Europo have been carried on without
discnso and unrost in liborated aross testifica to the Army's
succossful discharge of the obligation so inposed.
Onco liberation of a country has been accomplished,
however, I fool that the best interests of the United States
and of the liborated country itsulf require termination of
this military rosponsibility 0.8 soon na the militory situation
pormits. No responsibility for civilian supply in any liberated
country in Europe should continue to rost upon the Any oxcopt
na my be dietated by the actual nocossition of the military
situation.
On the other hand, no liborated country should bo projudiced
by termination of this responsibility. The dato and condi-
tions of tormination in onch ense should be subject, of course,
to the recomendation of the military commader in the field.
In order that the transition from military to civilina rosponsi-
bility my be smooth, final docision by the Army to end its
responsibility should be nnde only after consultation with the
government of the liborated country concerned and also with
our own State Department and Foreign Sconomie Administration.
In addition, I think the general policy of the Army,
upon such termination, should be to continuo to assist the
national governments involved end the approgrinte civilian
agencios of our own Government and UNRRA to the extent the
SECRET
MARK
MICROSTAT / REG. U.S. PAT. OFF, MICROFILM
ROLL NO.
I 2"
SECRET
-2-
military situation pormits. This should include, where
possible, and to the extent logally permissible, the transfer
of supplies which are in 0X0088 of ossontial militory
requirements.
To the extent that implementation of this policy requires
agreement of British military authoritics, will you ploase
causo nogotintions to be initinted through appropriato military
channols to obtain such agreemental
Vory sincerely yours,
/e/ Harry Trumn
The Monorable
The Secretary of The
Washington 25, D. C.
SECRET
MICROSTAT
No. U.S. PAT. OFF.
MICROFILM
ROLL NO.
12"
3
SECRET
Attachment 2 of LAC l'inutes
MAR DEPARTMENT
Office of the Assistant Secretary
Washington, D. C.
2 June 1945
lion. William L. Clayton
Chairman, Liberated Areas Committee
Department of State
Mashington, D. C.
Doar lir. Claytons
I enclose herewith copy of a letter dated May 21, 1945
from the President of the United States to the Secretary of
Tar dealing with termination of military responsibility for
the inportation of civilian supplies.
The hr Department contemplates the following program
to implement this letters
1. As to Holland, Forway, Belgium and Dennark,
a. No funds will be included in Tar Department
budget estimates for fiscal year 1946 for the provision
of civilian supplies in these areas.
b. "ar Department will terminate the provision of
civilian supplies to these areas with August 1045 loadings.
Supplies already in the pipeline resulting from the use
of funds appropriated in fiscal year 1945 will be ado-
quate to meet requirements through August londings.
2. As to France.
a. Tar Department will terminato the provision
of coal with August loadings.
SECRET
SECRET
-2-
3. As to Italy.
a. No funds will be included in for Department
budget estimates for fiscal year 1040 for the provision
of civilian supplies in this area,
b. The economic policy for Italy established in the
joint statement of the President and the Prine , inistor
of September 26, 1944 can no longer be supported on a
military basis. Docauso requirements implementing this
policy have just been received in the ar Department, 92
to this tine no supplios have been furnished to Italy
above those necessary to avoid discaso and unrost. Since
the broadoned policy can no longer find support on mill-
tary basis, no supplice will be furnished by the hr
Department to implement such policy.
Ca In the event agencies of this Government other
than the Ther Department assuno the responsibility for
provision of supplies to Italy, there are sufficient
supplies currently in the pipolino to permit the far
Department to furnish to such agoncios other than the
Mar Department civilian supplies for Italy on the discaso
and unrost formula through August 1945 loadings.
Appropriate action will be initiated pronptly to apprise
British military authorities and theater comendore concerned
of the for Department's position.
While this program has already boon the subject of
sultation botwoon ropresentatives of the Artign . conomie
Administration and the - and State Departments, I wish to
formally notify you of the The Department's views at this
tine and to solicit your cooporation in offecting the snooth
transition desired by all concorned.
The Director, Civil Affairs Division, Jar Department,
will be glad to confor with the appropriato reprosentativos
of the civilien agencica of our government at their conveniuneo
with respect to the extent to which supplies or allocations
in the hands of the "lar Department can be rado available to
COSO the transition.
Sincerely Yours,
/s/ John J. HoCley
SECRET
Assistant Socretary of Tar
MICROSTAT
REG. U.S. PAT. OFF,
MICROFILM
ROLL NO.
2"
RELEVANT PARAGRAPHS FROM JOINT DECLARATION
OF PRESIDENT ROOSEVELT AND PRIME MINISTER CHURCHILL
26 SEPTEMBER 1944
"At the some time, first steps should be taken toward
the reconstruction of an Italian economy--an economy inid
low under the years of the misrule of Mussolini and ravished
by the German policy of vengeful destruction.
"These steps should be taken primarily as military nime
to put the full resources of Italy and the Italian people
into the struggle to defeat Germany and Japan. For military
reasons we should assist the Itelians in the restoration of
such power systems, their railways, motor transport, roads
and other communications as enter into the war situation, and
for a short time send engineers, technicians and industrial
experts into Italy to help them in their own rehabilitation.
"The application to Italy of the trading with the enemy
acts should be motified 80 as to enable business contacts
between Italy and the outside world to be resumed for the
benefit of the Italian people.
"We all wish to speed the day when the last vestiges
of Fascism in Italy will have been wiped out, and when the
last Germen will have left Italian soil, and when there
will be no need of any Ailied troops to remain--the day when
free elections can be held throughout Italy, and when Itely
can carn her proper place in the great family of free
nations."
MICROFILM
ROLL NO.
278
26 June 1945
Dear Bernie:
I have just read your testimony
before the Senate Military Affairs
Committee on the elimination of Germany's
economic potential for var.
Your statement VAS 8. masterful job
and I as sure will do a lot of good in
creating an enlightened public opinion
on this crucial issue.
Sincerely,
(Signed) Learn
Mr. Bernard M. Baruch
597 Madison Avenue
New York 22, New York
JWP:1hh 6-26-45