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DIARY
Book 80
August 1 - August 31, 1937
Regraded Unclassified
- B -
Book Page
Budget
Copy of memorandum to FDR from Taylor giving comparison
of deficit for the months of July 1937 and July 1936 -
8/10/37
LXXX
21
Business Conditions
Haas memorandum sent to HWr in Hawaii - 8/19/37
81
- C -
China
See chronology of important events: Book LXXXVII, page 264
American Embassy, London, reports on confidential letter
received through foreign office: Chinese authorities
have been in communication with Hong Kong and Shanghai
Banking Corporation with regard to E20 million currency
loan - 8/12/37
42
Cochren reports French banking credit to the Central Bank
of China is immediately available and runs for one year-
8/12/37
48
9:30 group reports to HMJr in Hawaii that British
Ambassador to China has been shot by Japanese airplane-
8/26/37
144
- F -
Financing, Government
Bell memorandum sent to HMr in Hawaii on financial
situation "so far this fiscal year" - 8/23/37
113
a) Charts and tables
Eccles memorandum on September financing (prepared because
of contemplated assets in September) - 8/23/37
133
France
See Stabilization
- G -
Gold
See U.S.S.R.
- R -
Russia
See U.S.S.R.
- S -
Stabilization
France:
Cochren reports that French Stabilization Fund has
acquired on balance, since July lat, 3,400,000,000
france of foreign exchange: assets now total
9,961,000,000 france - 8/11/37
26
Regraded Unclassified
- U -
Book Page
U.S.S.R.
State Bank instructs Chase National Bank, London, to
deliver to Federal Reserve Bank of New York, for its
account, 358 bars of gold, total weight approximately
5001 kilograms, being forwarded from Leningrad within
next few days - 8/5/37
LXXX
12
a) Taylor memorandum on this first shipment of gold
giving value as approximately $5,600,000 -
8/7/37
15
Regraded Unclassified
Copy for Secretary
1
RB
GRAY
Paris
Dated August 2, 1937
Rec'd 3:45 p. m.
Secretary of State
Washington.
1101, August 2, 6 p. m.
FROM COCHRAN.
With London market closed today, Paris exchange
trading is very light. French control obtained some
sterling at 132,78. Evidently still official support
for forward franc. While National Bank of Belgium was
obliged to intervene Friday to protect belga versus
Swiss franc pressure on Belgian currency has today
lightened. Some French circles expect lowering of
official discount rate this week but this would seem
difficult considering scarcity of funds and degree to
which borrowers are already resorting to Bank of France.
Rentes practically unchanged with no evidence yet of
support through the new fund. Latest economy decrees
have not aroused much comment or much hope. With many
people on vacation there is a tendency to refrain from
market commitments and to let things drift.
BULLITT
Regraded Unclassified
2
JR
CODAT
Paris
Dated August 3, 1937
Rec'd 3 p.m.
Secretary of State,
Washington.
1105. August 3, 4 p.m.
FROM COCHRAN.
Bank of France this noon lowered rate for discount
from five to four per cent, advances on securities from
six to five and thirty day advances from five to four.
This had cheErful reaction on market. French control
profferedsome sterling but more active trading was in
dollars, one Paris American Bank purchasing one and three
quarter million dollars for the control today. Dollars
appeared to be coming principally from London as a result
of ten million dollar stock Exchange deal over week-end.
Brussels also selling dollars, while Bank of England was
a buyer at 498.15. French rentes up fifty to seventy
centimes and better feeling all around. Societe Generale
operated for French control in forward franc market. Bankers
holding treasury bonds opted for repayment in October are
endeavoring to obtain ninety day treasury bills therefor
instead of Eighteen month notes which government has been
suggesting.
French
Regraded Unclassified
3
-2-
JR #1105, August 3, 4 p.m., from Paris.
French Ministry of Finance today announced that
Appert, Financial Attache in United States, will succeed
Boisanger in charge of indirect taxation in the Ministry.
Appert's successor in the United States is Paul Leroy-
Beaulieu. Latter has been serving in same capacity in
Rome; is a career inspector of finance; specks English,
is not outstanding.
BULLITT
CSB
Regraded Unclassified
Copy for Secretary
4
NL
CODAT
Paris
Dated August 4,1937
Rec'd 2:30 P. m.
Secretary of State
Washington
1111, August 4, 5 p. m.
FROM COCHRAN:
Journal Officiel today announced issue, from August 4
to 19, 1937 inclusive of one year treasury bonds bearing
four percent interest from August 5 for which those
holders of 1954 Treasury four and one half bonds who opted
repayment on October 5th 1937 may exchange these latter
securities. There will be no cash subscription. Labor
leader Jouhaux spoke yesterday against deflation as an
impossible solution of French financial difficulties. He
is against liberal circulation of capital and in favor of
control, alleging that capitalists are planning another
crisis for October or November.
European Financial Press gives in considerable detail
but 30 far without editorial comment letters from President
Roosevelt and Chairman Eccles to Senator Thomas on stabili-
zation of dollar.
Loney continues very tight in spite of lowering of
discount rate yesterday and of rumor that a further de-
crease is to be expected.
French
Regraded
Inclassifie
5
ML -2- August 4,1937 2:30 p.m. Paris #1111
French franc both spot and forward offered today, with
Jouhaux! speech evidently having more influence than Bonnet
tochnique. Control wielded sterling at around 132.81 and
also intervened in forwards through both Comptoir and
Crodit Lyonnaise. Commercial demand for dollars from
Amstordam and Havre. Bolga under pressure and being pro-
tected through salos of Swiss francs. Fronch rontos up
fow contimos.
BULLITT
DDM: HBS
Regraded Unclassified
6
COPY FOR THE SECRETARY
JR
GRAY
London
Dated August 5, 1937
Rec'd 12:45 p.m.
Secretary of State,
Washington.
523. August 5, 4 p.m.
FOR THE TREASURY.
All of the papers reported the President's letter to
Senator Thomas yesterday. There is however very little
comment in today's press though the FINANCIAL TIMES devoted
a leader to the letter and to the problem of hot money,
Excerpts from which are quoted below,
"The letter reveals an attitude which in some respecss
is closely parallel to that of the British Treasury.
Stabilization is seen as desirable but it is recognized
that much has yet to bE done before it can become an
accomplished fact (***) Monetary means and devices by
themselves are recognized by the President and also by
Mr. Eccles as is minimum utility without assistance of
broader measures of cooperation (***) The outstanding fact
in relation to the dollar is that the currency is being
subjected at present to a number of External influences.
Stubilization must be preceded therefore by a balancing
of these influences. Mr. Roosevelt is clearly aware
of this fact and WE may EXPECT some practical move from
Regraded Unclassific
7
-2-
JR #523, August 3, 4 p.m., from London.
him in the near future. For some time past the most
important factor controlling the dollar rate has been the
movement of hot money. This is one of the most difficult
problems with which Mr. Roosevelt is confronted (***)
The proposed tax on foreign investments in Wall Street
would be of doubtful Efficacy (***) The greater part of
this hot money is flight capital seeking safety (***) A
tax would bE regarded merely as an extra price to bE paid
for the safe keeping of funds and as such negligible in
comparison. President Roosevelt will probably go ahead
with a scheme and it will not bE entirely ineffective but
the real crux of his problem 11ES in the European tongle".
BINGHAM
HPD
8
RB
CODAT
Paris
DatedAugust 5, 1937
Rec'd 8 p. m.
Secretary of State
Washington.
1122, August 5, 5 p. m.
FROM COCHRAN.
French Control again lost sterling protecting the
spot franc and was obliged to intervene strongly in future
market since forward franc is again definitely offered.
Belga still under pressure with Belgian nationals buying
their own industrial shares (?) on Paris market and with
National Bank yielding some dollars last evening. French
rentes slightly better but market suspects artificial
character of improvoment.
Bank of France statement as of July 29 showed re-
valuation of gold stocks on basis of forty-three milligr
of gold to the franc, with resultant increase from forty-
eight million eight hundred fifty-nine thousand five
hundred fifty-seven thousand to fifty-five million six
hundred seventy-seven thousand one hundred seventy-one
thousand francs. Deposits were up over six billion francs
representing bulk of revaluation profit which is consti-
tuting fund for supporting rentes. No new advances to the
state.
Regraded Unclassified
3
RB
-2-#1122, August 5, 5 p. m. from Paris
state. Treasury deposit account declined one billion.
Coverage fifty-one point seventy versus forty-eight point
seventy-eight.
(END OF FIRST SECTION)
BULLITT
NPL
EMB
Regraded Unclassified
10
RB
CODAT
Paris
Dated August 5, 1937
Rec'd 5:22 p. m.
Secretary of State
Washington.
1122, August 5, 5 p. m. (SECTION TWO)
FINANCIAL TIMES LONDON today carries editorial on
"Er. Roosevelt And The Dollar". It begins: "President
Roosevelt's statement concerning stabilization of the
dollar, in his letter to the redoubtable Senator Thomas,
reveals an attitude which in some respects is closely
parallel to that of the British Treasury. Stabilization
is seen as desirable but it is recognized that much has
yet to be done before it can become an accomplished fact.
As the President points out 'the rabidly shifting inter-
national scene' precludes any attempt to fix the dollar--
and the same applies to other currencies--at any particular
value". It ends "The present rate of around four dollars
ninety-seven cents seems to require little official support
except when the dollar tends downwards under the proviously
mentioned inferences, Actually the situation is not so
simple, for there is a mutual feeling of under-valuation.
At present the position is one of stalemate, for the British
authorities
Regraded Unclassified
11
RB
-2-#1122, August 5, 5 p. m. SECTION
TWO from Paris
authorities are opposed to any serious appreciation of
sterling which would sacrifice export advantages and the
United States Treasury is oqually adamant. In practice
the present rate has come to be generally accepted as
being not very far removed from the natural level, and
without further definito dovelopments it is unlikely to
undergo anything more than the inevitable small variations."
(END MESSAGE).
BULLITT
EMB
NPL
Regraded Unclassifie
0
12
P
Y
INCOMING CABLEGRAM
Moscow, August 5, 1937.
Federal Reserve Bank of New York
New York
No. 4
Refer to your wire of last month 7th and refer to
our wire of last month 7th we have today instructed Chase
National Bank London England to deliver to you for our account
358 bars of gold total weight approximately 5001 kilograms
being forwarded from Leningrad U. S. S. R. within the next
few days. Upon arrival this gold please place it our depot
with you under advice by cable acknowledging Please acknowledge
receipt of this message by wire.
State Bank of the U.S.S.R.
Regraded Unclassifie
COPY FOR THE SECRETARY
13
LMS
CODAT
Paris
Dated August 6, 1937
Rec'd 5:52 P. m.
Secretary of State,
Washington.
1125, August 6, 5 P. m.
FROM COCHRAN.
Control today yielded some sterling through Bank of
France and also intervened through Credit Lyonnais and
Lazard in forward franc market where discount has never-
theless widened. Difficulty is being Experienced in find-
ing satisfactory "names" for forward operations. Belga
under heavy pressure. Belgian officials selling Swiss
francs but not yielding dollars or sterling with result
that belga is out of line with these two currencies. Paris
Bourse rather good. Slight rise in rentes but not very
impressive. Several banks which feel obliged to accept
one
some of the Treasury's new/year bonds as reimbursement of
their maturing Germain Martin bonds are already offering
the new securities at a discount.
FINANCIAL NEWS London today carried an article from
its Paris correspondent on Bonnet and the French budget
which concluded: "That Monsigur Bonnet is doing his
utmost -- through the time-honored expedient of cheap
money
Regraded Unclassified
14
LMS 2-No. 1125, August 6, 5 P. m., from Paris.
money -- to get the wheels of industry revolving faster
is illustrated by this WEEK'S reduction in the bank rate.
And hE is thus -- aided by the seasonal influx of tourist
money and income tax collections -- also preparing for a
revival of confidence in the currency and national credit
which would of course greatly simplify his task. Whether
that revival of confidence will mature rests largely with
the Socialists. If that party should succeed in staging
a "come back" at the End of the summer then undoubtedly
a
there will be/renewed capital Efflux and all Monsieur
Bonnet's efforts will bE nullified."
BULLITT
SMS:EMB
Regraded Unclassifie
15
Ang. 7, 1937
Mr. Taylor
Mr. Dietrich
The following is a. cable received August 5, 1937 by the Federal
Reserve Bank of for York from the State Bank of the U.S.S.R., Moncew:
"Refer to your wire of last menth 7th and refer to our
wire of last menth 7th we have today instructed Chase
National Bank Londen England to deliver to you for our
account 358 hars of gold total weight approximately 5001
kilograme being forwarded from Leningrad U.S.S.R. within
the next few days. Upon arrival this gold please place
it our depot with you under advice by cable acknowledging
Please acknowledge receipt of this mercare by wire."
The above-mentioned gold has a. value of speroximately $5,600,000,
and you will observe from the cable that it is not to be sold but merely
held under earmark for the State Bank at the Federal Reverve Bank of for
York.
10 this is the first shipment of gold directly from Russia since the
institution of direct relations between the State Bank and the Federal
Reserve Bank of Sex York, no doubt you will wish to bring this natter to
the attention of the Secretary upon his return.
Regraded Unclassified
COPY FOR THE SECRETARY
16
CA
Gray
PARIS
Dated Aug. 9, 1937
Roed 6:15 p.m.
Secretary of State,
Washington.
1134, August 9, 5 p.m.
FROM COCHRAN
Iaris exchange markot slow. French control bought c.
little storling at 132.82 and sold some at 87. One Paris
American bank bought $400,000 for control and Lazard exe-
cuted somowhat similar order. Belga still under pressure
and florin wonkor. Offer of dollars comos principally from
Now York and Japanese. Fronch press carrios report of
criticism by Houso of Representativos Banking and Currency
Committoe of administration's gold purchase policy. Havro
cotton people who are anxiously awaiting American crop ro-
port have. rumor today that nogotiations for American loan
to Fronch railways are progrossing satisfactorily. Their
Paris American bankers have tried to discourage such
optimism.
French rentes are up 1 to 1.50 francs with Caisse
selling some to prevent too rapid rise. General market
atmosphere better. These improvements due principally to
week-end political speeches by President Lebrun, Chautemps
and Bonnet, who quoted President Roosevelt as recommending
to him
Regraded Unclassified
17
CA
--2--1134 from Paris Aug 95 p.m...
to him as he left the United States that he balance the
French budget, emphasized in a conservative and effective
address the steps which he is taking toward this end.
He urged the need for economies, patience and calm.
BULLITT
SMS TPL
03/13/10
Regraded Unclassifie
18
RB
GRAY
Paris
Dated August 10, 1937
Rec'd 4:14 p. m.
Secretary of State
Washington.
1136, August 10, 5 p. m. (SECTION ONE)
FROM COCHRAN.
French control acquired quite a few pounds and dollars
today. Dollar became more bid from New York in trading.
Belgian still yielding Swiss francs and dollars to support
the belga. Forward franc bid without any official inter-
vention in Paris. French rentes again gaining and Caisse
selling to prevent too much rise in B. market where the
turnover is not heavy. Latest statements of Swiss National
Bank show decline in gold and gain foreign exchange holdings
According to press reports Chinese Minister of Finance
Kung yesterday signed a financial agreement with a group
of French banks in Paris for the grant of a special credit
with the object of increasing Chinese reserves of foreign
currencies.
Press report from Rome on the occasion of the return
of Suvich donies the rumor of forthcoming loans to Italy
to be launched in the United States.
BULLITT
SMS
NPL
Regraded Unclassified
19
RB
GRAY
Paris
Dated August 10, 1937
Rec'd 4:30 P. r.
Secretary of State
Washington.
1136, August 10, 5 P. m. (SECTION TWO)
Although Paris market and most European financial
press have reacted favorably to Bonnet's week-end speech,
a suggestion of caution is contained in an editorial in
the LONDON FINANCIAL TIMES today which concludes:
"Clearly, financial regularization on paper is
not enough. Until taxes are collected, loans raised,
and exponditure cut made effective the situation is
the same as before M. Bonnet bogan his addition and
subtraction This fact has not escaped the shrewdly
realistic French capitalist with his hoards over the
water as is proved by the small return of capital that
has so far materialized. It is all a matter of confidence
which unfortunately the Popular Front Government through
all its pormutations and combinations has not boon signally
successful so far in inspiring. Excessive social roforms
may have
Regraded Unclassified
20
RB
-2-#1136, August 10, 5 p.m. SECTION
TWO from Paris
may have been ended and the popularity even among the
workers, of the forty hour week may be in question but
trade union irresponsibility remains. The return to
financial orthodoxy is a declaration of faith and welcome
as stated but we have still to wait for its effective
application".
END OF MISSAGE.
BULLITT
SIS
NPL
Regraded Unclassified
21
the sury Department
Amount 10, 1937
TO THE PRESIDENT'S
This is in reforence to your inquiry concerning the com
ments recently appearing in the public press with respect to the
deficit for the month of July, 1937, as compared with the deficit
for July, 1936, on the basis of daily Treasury statements,
There supere to be some misunderstending about the -
tar and, therefore, I all Blad to have the opportunity of submitting
this memorandun,
As you know, it has always been the practice of the
Government to regard the difference between its receipts and di
oursements, including sinking fund and debt retirements from ⑈
marked receipts, but excluding other debt transactions, ne the
Government's deficit. Whether collections deposited in revolving
funds (such as the R.F.C.) ATV deducted from expenditures or cred-
ited au receipts, the effect on the deficit is precisely the same,
The transactions of the Government are of such a complex
and varied nature that it would be virtually impossible to reduce
the reports of receipts and expenditures to such simple form AS
would cause them to be readily understood by all, without, at least,
meing some mental analysis of the various factors involved. It
would, perhaps, be even more difficult to device a form of state-
sent which would meet the individual views of all. Erena if all the
factors and problems involved in compiling the daily statement of
the United States Treasury were thoroughly understood by the public,
it is doubtful whether two persons would be in total agreement as
to form, substance. and the particular trestment to be accorded
certain items.
For instance, while some would contend time the sma
dollar should be charged nd an expenditure ten times if it rolled
over that many times in n. revolving fund for loans. repayments.
and now loans. there ATS others who would just as vigorously sain-
tain that such practice would tend only to pad the total receipts
and ampenditures of the Government. of course. when & lending
organisation commanoes to liquidate and has no authority to make
further loans, the viewpoint changes. That is the situation to
which we will eventually dome with rement to the Reconstruction
Finance Corporation as wall all all other revolving funds, and if
the Congress should anst legislation turning the collections for
account of such funds into the general fund of the Treasury all air
cellansous receipts. the Treasury would change the present pro-
cedure for handling such collections to conform to the Daw legis-
lation and the changed conditions resulting therefrom.
For your convenient reference, there follows a repro-
Chietion of page two of the daily Treasury statement of July 31,
1937, showing comparative receipts and expenditures for July, 1936
and July. 1937:
Regraded Unclassified
2
COMPARATIVE ANALYSIS OF RECEIPTS AND EXPENDITURES
JULY 31, 1937
Corresponding
This month
period last
year
GENERAL AND SPECIAL ACCOUNTS
Hanelyle:
Internal revenue:
Income laz
$57,140,977.82 82
$39, 120. 852 56
Missellaneous internal revenue
221,071,974.33
200,809,819.29
Unjust enrichment las
361, 345 24
Taxes under Social Security Act
55, 001, 738 so
Taxes upon curriers and their employees
32,139.10
Customs
40,645,901.22
31, 680, 452 27
Miscellaneous receipts
Proceeds of Government-owned securities
obligations
Interest-foreigo obligations
All other
16,585,641.09
TO, 586, pen 56
Panama Canal tolls, de
2,165,736.69
2,199,231.73
Seigniorape
3,486,208.08
4,816,632.80
Other miscellanenus
14,588,070.23
4,772,831.42
Total receipts
409,160,636.55
293,886,769.63
Expenditures:
I. General:
Departmental
60,168,737.13
39,217,701.03
Public buildings
0,621,094.75
1,517,963.00
Public highways
19,158,280,91
5,954,210.39
River and harbor work
12,742,897.36
8,550,995.21
Reclamation projects
8,470,463.36
Pacama Canal
1,870,750.54
902,611.73
Postal definiency
'634,266.02
2,527,757.52
Bailroad Retirement Act
630, 410, 01
84,710.09
Bocial Security Ael
29,466,584.53
11,891,503.11
District of Columbia IU. 8 share)
4,495,201.76
3,810,062.58
National defense:
Army
$2,958,084.00
33, III, 43A 48
Navy
46, 230,050 80
36 614, 934 76
Veterans Administration
48,083,019.46
48, 634, 860 79
Agricultural Adjustment Program
23,000,640.14
87,627,565.30
Civillan Conservation Corps
31,853,403.60
1,889,157.53
Farm Credit Administration
*902,535.17
116,373.81
Tennessee Valley Authority
3,702,793.24
59,061.95
Interest on the public debt
12,296,234.65
9,882,833.68
Refunds:
Customs
1, 305, 280 64
2,107,196.65
Internal revenue
1,714,523.11
9,982,609.53 53
Promming tax on farm products
500,255.36
1,749.93
Subtotal
037,380,132.05
240,385,878.99
11. Recovery and rolief:
Agricultural aid:
Federal land banks
785,032.80
1, 656, 946. 44
Relief
654,613.00
as, 022, 999 24
Public works (including work relief):
Reclamation projects*
2,506,628.52
1,828,098.63
Public highways
8,642,097.33
30, 031, 82L 13
River and harbor work
3, 659, 211. TM
13, 476, 816 15
Runal Electrification Administration
2,289,779.75
316,321.82
Works Progress Administration
127, 350, 140 37
162, 051, 064. 04
All other
22,838,301.57
36,922,263.55
Ald to home OWDETAL
Home Loan system
1,516,471.13
2, 501, 075. 81
Emergency housing
6,292,099.42
2, N83, 387. 70
Federal Housing Administration
1,048,007.95
1,015,188.73
Resettlement Administration
19,170,004.02
12,330,248.27
Miscellaneous:
Administration for Industrial Recovery
$5,816.32
2,030.76
Subtotal
198, 009, 494 20
001,686,256.22
III. Revolving funds (net):*
Agricultural aid:
Commodity Credit Corporation
1, 202, MAL 74
67. 213, our 00
Farm Credit Administration
*1,215,246.78
42,853,717.37
Public works:
Loans and grante to States, municipal-
Itim, etc.
19,154,916.02
99. 837, 015. IS
Loans Le railroads
*76,679.88 88
739,344.54
Missellaneous:
Export-Import Bank of Washington
48,731.97
443,244.37
Reconstruction Finance Corporation-
direct loans and expenditure
15, 771, sua Me
4174,572,570.02
Rubtotal
*2,100,133,78
215, 806, 272 41
IV. Transfers to trust accounts, etc:
Old-age reserve account
42,000,000.00
Reilroad retirement account
10,000,000.00
Adjusted service sertificate fund
20,116,060.51
Government employees' retirement funde
(United States share)
72,255,000.00
46,785,200.00
Subtotal
123,254,000.00
76. 551, 350, 51
V. Debt retirements (sinking fund, etc.)
20 550.00
£ 039,400.00
Total expenditures
658,545,042.47
417. 108, 648. $1
Excess of receipte
Excess of expenditures
249,384,405.93
123. 251, 873 as
23
3 -
It will be noted from the nbove statement that the deficit
he No. 1957. - $249,000,000. as compared with $123,000,000 for
20% 19%, LA Incroase of $125,000,000. Total ampenditures 170
cranged from 9437,000,000 in July, 1936, to $358,000,000 in July,
1/17. This Increase of $241,00,000 Includes $43,000,000 for the
ordenge Teserve recount, and $20,000,000 for the milroud retirement
account, deltier of which were in the platom 1-25 TVP, It nico
includes n $27,000.00 increased in the United Mates share of the
communent employees' retirement funds, expenditures unles
Sixe World Lot, representing principally prints to States,
+20m $11,091,000 to $29,495,000. There item Account for
206,000,000 of the $341,000.00 increase in expenditures and 120
plainly net out in the daily ristement.
The principal Items offenting the however, we
- baconstruction Anonea Corporation and the Commodity Credit
- in May, 19:5, these to empolou comedned bed come
revenue of ,00 19 company -1th en arcess of reportents
as mix $20,000,000 in hay of this more This is . decline of
in not revoments. and, of course, the companitive
Classes with request to total expenditures end the leftelt for Ady.
199, and July, 1976. enro efforted Ena the as -
permite in movelving funds hom the simi this your 18 List, the -
politires for July, 1977. world have been only $27,000.000 2020
time La sury, 1975, and the deficit the July, 1977. must have boos
$4,000,000, instand of $340,000,000.
Othersch there appairs to be considerable
4d concerning the significance of the deflait for July in relation
a the activated Coffeit for the year. I to not understand that
way uno contante that the Government's deficit for July is actually
different from that in the daily Treasury statements, 48
a loter alsos to this memorredom I will misser to der up this
misunderstar.ding.
The excess reportente in July, 1935, in the of the
indonstruction 71amos Corporation, on the beals of daily transury
vistements, emmanted to while the registere
nonte for July, 1937 were 818,771,523.56. = decline of $195,901,053.07.
this difference is tracsable to two CERTIFICATE First, repayments in
July, 1930, of $83,000,000 fre retirment of preferred
stodic will notes of ml trust companies] and second,
quartity $24,000.000 from revents of milrond loans, sales of
Public writen Additionation mounties, and other regular
Lottony three Accounting for about $152,00,000 of the 2156,800,000.
In the questity Tredit Corporation the of
receipts in July 1935, imported to 207.213.203. cus compared with
(1,302,884, in July of this year, a dedline in receipts of
66,021,139. This difference 10 accounted for by the ande of
270,000,000 of colleteral trust notes, limites 4, in July, 1955, and
and offert iv the payment of much notes later in the fiscal year,
this transation yourd not spece in the statement of
receipts of expenditures on prem two of the daily Treasury state=
only but the deposits ware not no marked 18 to anable the Ireup
known of the United States to identify the disimates of the trus-
actions. Stope have been taken to have all chadics and all for
posite Goving through the beare's addounts of 1. million dollars
or mro, to delivered to the Commissioner of Accounts and Deposits
for amerination md instructions concerning the accounting treate
nent of unsual Items.
the daily Treasury statement shows expende
bures of $00,168,737. in July, 1937, 08 compared with 19.27.702.
in July. 1935, more increase of $20,951,095. $9,300,00 of this Law
arease is in the Department of vericulture, arising principally from
Regraded classified
4
24
the fnot that a more empeditions wethod for reking payments to
States under cooperative agreements will been worked out between
the Treasury and the Department of Apriculture, Stadler payments
for Inst year vere not unde until August,
U. S. ligitime Cominsion $3,400,000. due principally
to the fact that payments under DOBAN mill contracts wire más to
the Haritine Commission in July, 1937, similar payments
were mêe by the Post Office Department in July, 1935 from its own
account with the Treasure of the United States and reflected in
the postal deficiency.
The remainder Is accounted for by the for thet. LD
compared with last year, D considerably larger resource of chedks
lamind top the Division of Disbursement in June - paid In July,
1937.
The "Coneral" emmilitures (including "Departmental") for
July, 1937. ROG'S $337,000,000. MM compared with $249,000,000 in
1935, an increase of $88,000,000. or this anount 139,000,000*1*
at-Inined above, $30,000,000 of the remaining $49,000,000. is due
to the transfer of the Civilian Conservation Погри from the
sn/ Calinf" classification to the "General" classification. You 120
fedlier with this change of classification in the budget. Das.
Liare was an increase of $8,000.000 in Servy expenditures: mm0 above
$2,000,000 in interest; the bulance is principally on nocount of
and river and herbor are larguly to N change in
classification from *Secovery and Relief" to "Deneral".
with reference to the emarel question of publishing
the receipts and expenditures of the Covernment, envoral changes
were mis in the daily Treasury statement, effective July 1, 1937.
You probably have road come invorable coments appearing in the
public press concerning these disages, One of the duages had to
in with the handling of cortain non-crub transactions, represent=
inc mounts net anido in the 010-0/20 reserve account, the rail-
road retirement account, nad the sureral Government employee'
retirement fair, It is felt that sound budgetrary proctice re-
quires that such Items be included in governmental expenditures,
trat they are lapt in a coporate (TOUD) for ready identification.
Another important change relates to the handling of -
volving funds. These funds have boen secrepted from all other
fundo end placed in e separate croup. with a separate net substotal.
In conformity with the - - 6. grootlee
which I believe to be in accordance with the 10(ml status of the
funds - - the figures are on a net bala. 1. Day (russ prymite
lova represents but it is imortant to note that the (TOSO 1'0"
cainta and reproments reported 1a detail on PP four of the
daily Treasury statement 9 that it is simly a matter of aritimatic
to put the figures on a (TOSS besis, then Shore le still another
discription, namely, to publish the figures on the present not basis
by supporting schedules of payments and repoy-
ments ne at present) but to "ginttle" the figures back and forth
between receipts and expenditures. depending upon desting the
Regra
assified
5
25
net result is - excess of empenditures or in EXCESS of repayments,
United much a procedure, the net figures for Reconstruction Pinance
Corporation in - mosth would be reported under "Tependitures",
sharens in another month the not figures would appear under
Regraded Unclassifie
But hare again 11 is staply a matter of aritimatic to old the net
repayments to the totals of both receipts mil expenditures if such
in the basis upon which cas wishes to work. In the last analysis,
whether the items are treated one my or mother. the effect on the
deficit is the - While there is see morit in the treatment
which I have Just outlined, it presents - protional difficulties:
md, in my opinion the present procedure conforms more nearly to
1mm and the legal status of the funds, then any other plan time
for devised or
the daily Treasury statement now presenta & genuldate
formed picture of the receipts and expenditures of the Government
in the zost simplified from consistent with proper presentation
of A complex subject.
with reference to the significance. if any, which the
deficit for July any have with respect to the full fiscal year. I
would like to call attention to the followings
is you know, the receipts of the Dovemont do not flow
into the Treasury evenly throughout the year. It is very probable
that the eight months of this Modal your in which a compuratively
mill amount of income taxes will be received, my show no accrease
deficit of $1,400,000,000, thereas the four income tax payment
nonths my show a surplus of as much as $1,000,000,000, leaving a
not deficit for the year of about $400,000,000. as indicated in your
meaningo to the Congress of April 30, 1937. The deficit of $249,000.000
during July, 1937. as above in the daily Trensury statement of July a.
1937, does mt, therefore, indicate the necessity of revising the
estimates for the figal year 1933, as contained in that letter.
(Signed) Wayne C. Taylor
Assistant Secretary
of the Treasury.
MFB:HW
9/10/27
26
RB
CODAT
Paris
Dated August 11, 1937
Rec'd 3:02 D. m.
Secretary of State
Washington.
1139, August 11, 4 p. m. (SECTION ONE)
FROM COCHRAN:
At Bank of France this forenoon I was informed that
French stabilization fund yesterday gained one hundred
twenty-four million francs of foreign exchange. Since
July lst the fund has acquired on balance three billion
four hundred million francs of forcign exchange. Total
of assets in fund as of yestorday wasnine billion nine
hundred sixty-one million francs including the above amount
of foreign exchange and revaluing on a forty-three milli-
gram to the franc basis the some four billion francs of
gold which was acquired from the Bank of Franco when the
recent changes on the monetary system took place and which
the fund has been able to hold.
Higher officials of Bank of France are working well
with Governor Fournier but organized personnel just dedi=
cated a special number of thoir publication to ex-Governor
Laboyrie. Latter is reported recently to have told the
unionized
Regraded Unclassified
27
RB
-2-#1139, August 11, 4 p. m. from
Paris SECTION ONE
unionizod employees as well as outsiders that ho had boen
forcod out only temporarily and that the "will of the
people" would in the not distant future return him to
the bank where he could complete the reforms which he
had started, institute exchange control, et cetera.
(laughed?)
Vhile the responsible officials of the bank laydh at
this, their relations with the personnel are not helped
by Labeyrie's remarks
BULLITT
HPD
Regraded Unclassified
28
RB
CODAT
Paris
Dated August 11, 1937
Rec'd 5:20 P. m.
Secretary of State
Washington.
1139, August 11, 4 p. m. SECTION TWO.
The Bank officials find Bonnet a very alert and
understanding Minister of Finance with whom they can
cooperate. They feel that he has shown real courage
in the steps which he has so far taken. They realize,
however, that he has chosen the propitious time with
Parliament adjourned, with so many Parisians, including
labor agitators out of town, with France enjoying a
really good tourist season, and with the entire effects
of the latest currency depreciation not yet fully felt
on the cost of living.
While the gains by the French stabilization fund
have been encouraging, there has not yet been any big
repatriation of French capital from abroad and the Bank
of France officials do not look for the heavy holders
to act quickly. The really significant sums were sent
to New York to be away from Europe as well as from France
and my
Regraded Unclassified
29
RB
-2-#1139, August 11, 4 p.m. from Paris
and my contacts do not take too seriously the press stories
that important amounts of this French capital are moving
from New York to London.
Operators of French stabilization fund have recently
beon more aggressive in their dollar purchases and hope
to continue to acquire more thereof so long as their sit-
uation pormits. They are surprised that the British have
not made more effort to check the dollar's decline expecial-
ly since London will shortly be needing dollars for seasonal
purchases of American grain and cotton.
BULLITT
SMS
NPL
Regraded Unclassified
30
RB
CODAT
PARIS
Dated August 11, 1937
Rec'd 8:20 D. m.
Secretary of State
Washington.
1139, August 11, 4 D. m. SECTION THREE.
At the bank I mentioned the story in this morning's
AGENCE ECONOMIQUE that a group of banks headed by Paris
and Pays Bas and including Lazard, Bank of Indo China
and Franco Chinese Bank for Commerce and Industry, has
opened a credit of 100,000,000 francs to the Central Bank
of China at Shanghai which may be raised aventually to
200,000,000 (Reuter's report of this credit was mentioned
in my 1136, August 10, 5 D. m.). My contact at Bank of
France thought this was more of a friendly gesture to
Kung than anything else. That is, he expects the sum
to be entered into a special account for the Chinese
so that the latter can credit a corresponding amount in
their holdings of foreign exchange but he looks for no
actual disbursements to be made from this account.
AGENCE ECONOMIQUE gives ample space to President
Roosovolt's denial of any contemplated change in gold
policy
Regraded Unclassified
31
RB
-2-#1139, Au ust 11, 4p. m. from
Paris SECTION THREE
policy and FINANCIAL NEWS today ridicules the views of
the Republican mombers of the House Banking and Curroncy
Committee.
BULLITT
SMS
NPL
Regraded Unclassifie
32
RB
CODAT
PARIS
Dated August 11, 1937
Rec'd 8:35 p. m.
Secretary of State
Washington.
1139, August 11, 4 P. m. SECTION FOUR
Paris exchange market quiet. French control yielded
some sterling at 132.87 and apparently has acquired no
foreign exchange during the day. Bank of England reported
to have sold some dollars. Belga offered against dollars
and continental currencies other than French franc. Cassel
of Brussels reported shipping gold to New York. French
rentos uneven. Understand that recent purchases thereof
have been almost entirely by professional operators who
figure that the new rente fund can not afford to let the
securities decline and will eventually push them up so
these spoculators will have a chance to unload at a profit.
Commorcial interests hope for anothor reduction in official
discount rate. On this point Bank of France contact told
me this morning that much of the foreign exchango which
they
Regraded Unclassified
33
RB
-2-#1139, August 11, 4 p. m. SECTION
FOUR From Paris
they had recontly acquired had boon brought back by
French business poople who, with the local monoy markot
tight, had to sell foreign exchango to got the francs
which thoy needod. To case the interest situation vory
far would thorofore likoly work against capital ropatria-
tion. In the samo way, boosting rentos too activoly
before general financial confidence is restored would
give investors cash for transfer abroad.
END OF MESSAGE.
BULLITT
SMS
NPL
Regraded Unclassified
34
FEDERAL RESERVE BANK
OF NEW YORK
FICE CORRESPONDENCE
DATE August 18, 1937.
CONFIDENTIAL FILES
SUBJECT: TELEPHONE CONVERSATION WITH
D. J. Comeron
BANK OF ENGLAND
M
I phoned Mr. Bolton at about 11 a.m. and inquired about
the darket in general and asked if he could throw any light on two
gold shipments totalling about $5,000,000 consigned by Samuel Montagu
and Company, London, to the bank of the Manhattan Company, New York
per steamers Westernland and Rotterdam. I mentioned to Mr. Bolton
that this was quite a large amount in view of the recent smallness of
the gold market and it seemed strange that slow hoats were selected
while faster boats could have been used, He said that he had heard
that £1,000,000 in Russian gold had been transshipped at Antworp for
New York, but I told him confidentially that I did not believe there
vas any connection because we had advice from the State Bank of such
a shipment to us, He said that be would see what information he could
get and let me know.
He said the French market was getting a little money but not
much, however, they were getting & badly needed rest. He said the
only feature in the market, If it could be called one, was the weakness
of the belga. He said the Belgians were losing gold at the rate of
about £100,000 per day and that the trouble was largely political.
Be said the Japanese were now enforcing & very rigid control of the
yen, holding the rate at 1sh 2d and that no forward transactions were
allowed. He said the Japanese continue to accumulate balances in
London which in his opinion is purely a war measure. I asked if he
had had any dealings with Argentina on account of the refunding of
the City of Buenos Aires bonds as we had sold a small amount of
storling here. He replied they had done nothing.
Regraded Unclassified
35
11 40M 6.17
FEDERAL RESERVE BANK
OF NEW YORK
FICE CORRESPONDENCE
DATE August 18, 1937
CONFIDENTIAL FILES
SUBJECT: TELEPHONE CONVERSATION WITH
M
D, J, Cameron
BANK OF ENGLAND
+
I phoned Mr. Bolton again at about 12.45 p.m. I told him
that we had received a cable from the Central Bank of China asking
us if we could provide them with 2 £1,000,000 sterling spot, as
there was a continued demand on them for spot sterling and they did
not wish to disturb the New York - London rate.
I told Mr. Bolton that we would have to release gold to
him from our account (under tripartite agreement) to obtain the
sterling, and as we would not be able to tell him definitely until
tomorrow at our opening, we wondered how he falt about taking $
£1,000,000 of gold from us tomorrow at his today's price. He said
it would be perfectly all right but he could offer us £300,000 spot
at 4.9845 for delivery tomorrow which would only leave £700,000 to
be realized from the sale of gold. I accepted his offer and it was
understood between us that if the Central Bank of China accepted our
offer for the additional £700,000 we would cable him at our opening
tomorrow to take over the equivalent amount in gold at today's price
of 139 sh 4d.
Regraded Unclassified
36
JR
GRAY
London
Dated August 12, 1937
Rec'd 2:06 p.m.
Secretary of State,
Washington.
536. August 12, 5 p.m.
FOR TREASURY FROM BUTTERWORTH.
CONFIDENTIAL.
One. Sir Frederick Philipps plans to sail for Canada
on September 4 on the EMPRESS OF BRITAIN. HE will adhere
to the itinerary reported in the final paragraph of my
475, July 15, 3 p.m., coming from Lake Louise GO Chicago
on September 16 or 17th and arriving in Washington the
WEEK End before September 20, the date of his meeting with
the Secretary of the Treasury.
Two. As regards the French situation, Philipps said
that it moving along the lines hE indicated in his
previous conversations; that the French were now "messing
about with the forward rates" but they had done little
harm and not very much good. As regards spot operations,
they were holding their own but not receiving any worthwhile
amounts of gold.
Three. Philipps referred to today's press reports
quoting the Federal Reserve Board's monthly bulletin on
gold
Regraded Unclassified
37
-2-
JR #536, August 12, 5 p.m., from London.
gold hoardings, in particular the statement that hoarded
gold in London "must bE less than five hundred million
dollars". In this connection, he mentioned his Estimate of
not more than 95 and not less than 75 million pounds,
reported in my 354, June 7, 6 p.m., and said that he thought
the time had now come to check up on the figure again but
that certainly it must bE somewhat lower than that of
two months ago. Phillips added that a perhaps more
interesting figure was that of a billion dollars for
hoarded gold throughout the world and that he intended
to write Jacobsen at the B I S for confirmation.
BINGHAM
PEG:RR
Regraded Unclassified
38
RB
GRAY
Paris
Dated August 12, 1937
Rec'd 3:02 P. m.
Secretary of State
Washington.
1149, August 12, 5 p. m.
FROM COCHRAN.
Paris exchange market extremely quiet. French con-
trol lost a little sterling at 132,87 and 86. Belga
offered but Cassel said still to be operating against
dollars with view to shipping gold from Belgium to New
York. Market report it that French Caisse had to buy
heavily yesterday to hold Government securities about
level. Today rentes and other Treasury issues are all
offered. Latest rise in cost of living index and this
week's increase in local transportation rates cause
worry. American bankers in Paris tell me that French
banks share their opinion that no significant amounts
of capital are returning to France.
Bank of France statement as of August 5 was satis -
factory. There were no new advances to the state but a
few slight adjustments in two of the items constituting such
entries
39
RB
-2-#1149, August 12, 5 p. m. from
Paris
entries. With a small gold gain and deposits down one
and one-half billions coverage rose from 51.70 to 52.29.
BULLITT
PEG
GW
-
Regraded Unclassified
40
JR
GRAY
London
Dated August 12, 1937
Rec'd 2:06 p.m.
Secretary of State,
COPY,
Washington.
FILE LOCHHEAD
536. August 12, 5 p.m.
FOR TREASURY FROM BUTTERWORTH.
CONFIDENTIAL.
One. Sir Frederick Philipps plans to sail for Canada
on September 4 on the EMPRESS OF BRITAIN. HE will adhere
to the itinerary reported in the final paragraph of my
475, July 15, 3 p.m., coming from Lake Louise 00 Chicago
on September 16 or 17th and arriving in Washington the
WEEK end before September 20, the date of his meeting with
the Secretary of the Treasury.
Two, As regards the French situation, Philipps said
that it who moving along the lines he indicated in his
previous conversations; that the French were now "messing
about with the forward rates" but they had done little
harm and not very much good. As regards spot operations,
they were holding their own but not receiving any worthwhile
amounts of gold.
Three. Philipps referred to today's press reports
quoting the Federal Reserve Board's monthly bulletin on
gold
FILE COPY
2
Regraded Unclassifie
41
-2-
JR #536, August 12, 5 p.m., from London.
gold hoardings, in particular the statement that hoarded
gold in London "must bE less than five hundred million
dollars". In this connection, hE mentioned his Estimate of
not more than 95 and not less than 75 million pounds,
reported in my 354, June 7, 6 p.m., and said that he thought
the time had now come to check up on the figure again but
that certainly it must bE somewhat lower than that of
two months ago. Phillips added that a perhaps more
interesting figure was that of a billion dollars for
hoarded gold throughout the world and that he intended
to write Jacobsen at the B I S for confirmation.
BINGHAM
PEG:RR
Regraded Unclassified
42
RB
GRAY
London
Dated August 12, 1937
Rec'd 3:30 p. m.
Secretary of State
Washington.
535, August 12, 4 p. m.
Confidential.
3
With reference to your 242, August 9, 7 P. m., I
have received from the Foreign Office a confidential
letter which supplements the memorandum quoted in my
394, June 24, 2 p. m. The pertinent points of the
letter are as follows:
One. That the Chinese authorities have been in
communication with the Hong Kong and Shanghai Banking
Corporation with a view to settling the terms of the
twenty million pound currency loan and that the Foreign
Office understands that the Chinese are likely to accept
the conditions mentioned in its previous memorandum,
Two. However, the negotiations have not progressed
nearly as for as press reports imply and "it is obviously
impossible that a loan should be issued during the con-
tinuance of the present state of tension in North China".
Three. Reference is made to the resolution adopted
at the
43
RB
-2-#535, August 12, 4 p.m. from London
at the May 6 meeting of the Consortium Council, to the
letter of July 23 addressed by the British group to the
other groups regarding the proposals for the Pukow-Siangyang
Railway, to which no replies have been received, and in
this connection it is stated that "on the 30th July an
agreement was roached botwoon the Chinoso Government on
the one hand and the British and Chinoso and China Develop-
mont Finance Corporation on the other for tho issuo of a
pounds sterling three million loan for the Canton-Meihsien
Railway, and on the 4th August a second agreement between
the Chinese Government on the one hand and Chinese Central
Railways and the China Development Finance Corporation
on the other for the issue of a pounds sterling four
million loan for the Pukow-Siangyang Railway. The latter
agreement contains the following proviso: Notwithstanding
any of the provisions hereinbefore contained, none of the
clauses in this agreement shall become effective until the
present consortium obligations, which are now the subject
of discussion between the governments concerned, cease to
be binding on the British group".
I have also been given in confidence copy of a letter
addressed by Padfield of the Hong Kong and Shanghai Banking
Corporation
Regraded Unclassified
44
RB
-3-#535, August 12, 4 p.m. from London
Corporation to Kung under date of July 30 together with
the latter's reply of August 3 which are quoted verbatim:
"I write again you this letter for the purpose of
placing on record what I understand to be the conclusions
to be drawn from the recent discussions with Mr. T. K.
Tseng. I should be grateful if you could confirm that
the following accurately represent your wishes and inten-
tions:
(one) The Chinese Government contemplate. approaching
the London market through the Hong Kong and Shenghai Bank
for the issue of a sterling loan for an amount or amounts
up to pounds sterling twenty million in all, such loan
to be known as the Chinese Government refunding loan of
(#*).
(two) The proceeds of the loan would be paid to the
Central Reserve Bank of China and held by it in sterling
in London and used solely for foreign exchange transactions
to maintain the stability of the Chinese currency as at
present established.
(three) The Chinese dollar counterpart would be
used gradually over B period for the redemption of existing
domestic
Regraded Unclassified
45
RB
-4-#535, August 12, 4 p.m. from Londor
domestic bonds.
(four) An adviser to the Central Reserve Bank of
China would be appointed in consultation with whom the
foregoing disposition of the loan proceeds would be
effected.
(five) The security in respect of principal and
interest would be the entire revenue of the Chinese
Maritime Customs Service after provision for all exist-
ing charges.
(six) The administration of the Chinese Marltime
Customs Service shall continue as at present constituted
during the currency of loan.
With reference to the foregoing I have to say that
the Hong Kong and Shanghai Bank would be prepared, subject
to the security referred to under paragraph five above
proving adequate and to there being no objection on the
part of His Majesty's Government, to give favorable con-
sideration to the issue of such a loan provided that the
current negotiations in regard to the consortium have
removed any obstacles on that account to such a sterling
issue, It is understood of course that the actual timo
of issue and the terms on which the loan could be placed
would
Regraded Unclassified
46
RB
-5-#535, August 12, 4p.m. from London
would have to be governed by the London market conditions.
I am sending a copy of this letter to His Majesty's
Treasury and to the Foreign Office."
Kung's reply is as follows: "I wish to acknowledge
the receipt of your letter of 30th July and to thank you
for the interest you have taken in the proposed loan in
London. From time to time, Mr. T. K. Tseng and Doctor
P. W. Tuo have reported to me the conversations they
have had with the officials of the Treasury and of
your bank regarding the matter. In general their reports
correspond with your observations with the exception
of Article five which they understand to be that the
proposed loan would be charged on the customs revenue,
ranking immediately after the internal consolidated and
recovery loans of 1936.
I assure you that I am to receive your understanding
of these conversations and that the matter will receive
my careful attention".
In the course of a convorsation Sir Frederick Phillips
reiterated that irrespective of future developments Chinese
credit in London had been unfavorably affected by recent
events in North China and that neither the proposed
currency loan nor the two proposed railway loans can be
effected
Regraded Unclassified
47
RB
-6-#535, August 12, 4 p.m. from London
effected unless market conditions prove favorable and
that the present situation in China is likely to have
an adverse effect on them for some time to come. Phillips
also said that the Chinese had been losing "a fair amount"
of sterling; that in his opinion they could hold their
currency under present conditions for several months
if they wished to do so but that if a real war came
"there is no telling".
I gather that similar communications have been given
by the Foreign Office to the French and Japanese ripre-
sentatives.
BINGHAM
HPD
03V13038
40%
- -- -
Regraded Unclassified
48
MM
CODAT
Paris
Dated August 12, 1937
Rec'd. 7:45pm.
Secretary of State
Washington, D.C.
1152, August 12, 8pm.
Department's 423, August 11, noon.
Cochran obtained following information at Ministry
of Finance this evening to supplement my 1148, August 12,
4pm.
The French banking credit to the Central Bank of
China is immediately available and runs for one year.
The charges therefore are explained as follows: the
interest will be at one percent above the current dis-
count rate of the Bank of France with a minimum charge of
four percent and the bankers will receive a commission of
approximiately two thirds percent.
The officials consulted at the Ministry of Finance
gave the same impression as that obtained at the Bank of
France and set forth in our 1139, August 11, 4pm, in
regard to the purpose and real significance of the
operation. That 1s, the credit is solely to bolster
the backing of the note issue to the Central Bank of
China. It 1s stipulated that to the extent to which
the credit is drawn upon the borrowers must deposit a
pledge
Regraded Unclassified
49
1152, August 12, 8pm from Paris. -2-
pledge of silver in London. Furthermore there is a
secret gontlemen's agreement to the effect that the
funds available under the credit shall not be takon
out of France.
BULLITT
SMS
NPL
<801 BIPUA
TRUZAJRT
to
- 3 as $ -
Regraded Unclassified
50
August 16, 1937.
12:35 p.m.
Hawaii
Magill:
After by play back and forth with me they finally
quit and
H.M.Jr:
It'll pay you not to try and handle the hot money.
Magill:
Ah - yes, that's right - yeah, yes it did look as
if it was a time we could do it very well. Did you
get my letter?
H.M.Jr:
Yes (laughs)
M:
(
(Laughs)
H.M.Jr:
But listen -
M:
Yes.
H.M.Jr:
Next time you send me a letter don't warn me three
days in advance and have me all tizzy-wizzy worrying
what it is.
M:
I didn't know that they were going to.
H.M.Jr:
Yes - Coast Guard - Lieutenant Pollio sent word over
that you were sending me a very very personal letter.
M:
(Hearty laughter)
H.M.Jr:
And for three days I wondered what it was all about.
M:
You stayed in your room and didn't go swimming at all
I suppose.
H.M.Jr:
Right.
M:
Well that's too bad; I don't know what they did that
for.
H.M.Jr:
Well anyway your letter was very satisfactory.
Regraded Unclassified
51
- 2 -
M:
Well I'm glad it was. I - I think we really got out
of a tough situation there quite happily.
E.M.Jr:
Were you able to get upathe to camp?
M:
I - I finally got away for a couple of days there at
one point; got away Friday and came back Monday
evening
H.M.Jr:
Yes.
M:
but I've been here the rest of the time except
week-ends.
H.M.Jr:
I see.
M :
I hope - I hope they'll get through this week-end and
if they do I want to get away for a week or so then.
H.M.Jr:
How are you feeling?
M:
Very well except it's been hot down here and a good
deal of a strain but I think we came out awfully well
considering everything.
H.M.Jr:
I think so. You must have handled it very well.
M:
Well I don't know about that but it's - ah - it's
taken a lot of diplomacy at various times to get
through alive. Now would you like to talk to Wayne?
H.M.Jr:
Yes, and would you just send a message to the operator
when I'm through I'd like to talk to Bob McHugh in his
room.
M:
Yes.
H.M.Jr:
When I get through.
M;
Yes,I'll do that. Here's Wayne.
Taylor:
Hello
H.M.Jr:
Hello Wayne.
T:
Hello Henry.
Regraded Unclassified
52
- - 3 - -
H.M.Jr:
How are you?
T:
Oh I'm fine.
H.M.Jr:
Ah - Wayne - one of the principal things I wanted was -
I have no idea, for instance, what what is our daily
balance right now - our working balance.
T:
I've got the figures for you - 855 million.
H.M.Jr:
How much?
T:
855.
H.M.Jr:
I see. Well now has it been - has it
each
week or are we eating into it.
(Pause and squeal)
T:
Wait a minute - I've got to get around to the other
side.
H.M.Jr:
Hello hello
T:
Hello
H.M.Jr:
Hello.
T:
Ah - we'll eat into it a little bit to-day but - on
account of special transactions but it will act all
right from now on.
H.M.Jr:
Ah-ha, well what I'd wish you'd do with Bell would be
to send me a cable to-day, giving me the picture to
September 15th and then from September 15th to Nov-
ember 15th, do you see?
T:
Yes.
H.M.Jr:
And the idea the main thing I want is what is the
minimum of new money that we need to carry us to
December 15th.
T:
O.K.
H.M.Jr:
I mean I'd like to get it to get the feel of the thing.
Regraded Unclassified
- 4 -
53
T:
Right.
H.M.Jr:
For the first time in my life I'm completely out of
touch.
T:
Well that's what we hoped you'd be.
H.M.Jr:
Frankly, I haven't been worrying about anything.
But I want to begin to get the feel of the thing,
you see?
T:
Ah - we'll start with to-day's stuff and then we'll
keep you generally in touch.
H.M.Jr:
Well I don't - I don't want cables every day but I -
but I would like a cable memo - how the thing looks
to you and Bell.
T:
Right.
R.M.Jr:
And - ah - what you think the minimum money is and
then - you haven't begun to find out in New York yet.
T:
No, we haven It done that yet. Burgess has been away
you see and we thought we'd start fussing around with
that this week.
H.M.Jr:
Ah-ha. Well what are those - the last March 42's - what
are they selling at now?
T:
Ah - par 18 to 20.
H.M.Jr:
How much?
T:
Par 18 to 20.
H.M.Jr:
Ah-ha. The market has sold off the last week, hasn't
it?
T:
Yes - ah - mostly in the long bonds.
H.M.Jr:
Ah-ha.
T:
But they turned on Saturday and they're acting all right
to-day too.
H.M.Jr:
I see.
Regraded Unclassified
54
5 1 I
T:
It was mostly the dealers switching their position
a little bit.
H.M.Jr:
I see.
T:
There was no real liquidation.
H.M.Jr:
No, I don't want daily cables but I would like to have
one now.
T:
Ah - we'll get it to you this afternoon.
H.M.Jr:
Yes and then - ah - so I can get some idea how much
new money - how she was running. Now on the Japanese
thing - ah - did they send us all the gold they said
they were going to?
T:
Ah - yes - they've - it's slowed up a little bit
lately.
H.M.Jr:
Ah-ha.
T:
Ah - there's only 13 million - ah - that we know
about on the water at the present time.
H.M.Jr:
How much?
T:
13.
H.M.Jr:
That makes a total of how much?
T:
It will be 143 which they sent here.
H.M.Jr:
143.
T:
Yes.
H.M.Jr:
Ah-ha. Any more coming?
T:
Ah - 13 on the way and nothing new reported.
H.M.Jr:
I wish also in the cable that you'd give me an idea
how the people there feel about this Chinese-Japanese
show.
T:
Ah - - perfectly dreadful.
Regraded Unclassified
55
- 6 -
H.M.Jr:
Is that the way they feel?
T:
What?
H.M.Jr:
I say how do they feel there?
T:
They think it's perfectly dreadful.
H.M.Jr:
What are they doing about it?
T:
Ah - main thing up to date is making arrangements to
get the women and children out of Shanghai and the
rest of China.
H.M.Jr:
Besides that?
T:
Ah - besides that they put - they're having - ah -
whatever transportation can be made available - ah -
then it's up to people whether they want to go or
not.
H.M.Jr:
Then the situation itself.
T:
The situation itself looks very bad.
H.M.Jr:
They're not doing anything about it.
T:
Not yet; they're having a meeting this morning with
Secretary Hull and Secretary Woodring at the White
House.
H.M.Jr:
I see.
T:
But nothing has come out about that yet.
H.M.Jr:
Well if you get anything on that let me have that,
T:
Right.
H.M.Jr:
And - ah
T:
Well it couldn't be worse.
H.M.Jr:
Ah - how was the New York Times index for Sunday;
was it up or down?
56
- 7 -
T:
(Has a conversation with George Haas) (Pause)
H.M.Jr:
Hello
T:
Ah - not much change this last week - ah - practically
none but it's a little down from June when you were
here - July rather.
H.M.Jr:
Tell George he can get me off a letter airmail giving
me a little review of the business situation.
T:
Right.
H.M.Jr:
Suppose he gets me off a letter airmail - George Haas.
T:
Yes.
H.M.Jr:
See.
T:
O.K.
H.M.Jr:
Have you any feelings yet on financing?
T:
Ah - no bonds.
H.M.Jr:
Ah-ha.
T:
And then whatever happens to fit on the notes
.
H.M.Jr :
You what?
T:
Whatever happens to fit on notes I think either - any
note would go all right.
H.M.Jr:
All right. Anything else?
T:
Ah -
H.M.Jr:
How is your health?
T:
My health is excellent.
H.M.Jr:
Good.
T:
Ah - the foreign exchanges outside of this Far Eastern
stuff has been acting all right.
Regraded Unclassified
57
- 8 -
H.M.Jr:
What?
T:
Foreign exchanges outside of the Far East have been
acting all right.
H.M.Jr:
Ah-ha.
T:
Ah - generally quiet; France has been gaining foreign
exchange - not much but doing a little better to hold
its own and their bond market is better.
H.M.Jr:
Well let me talk a minute to Bell and then to Archie.
T:
All right.
Bell:
Hello
H.M.Jr:
Hello Dan.
B:
Good morning.
H.M.Jr:
Good morning. Ah - how is the spending going - is it
ahead or behind our estimates?
B:
Ah - well it's a little behind and balances have picked
up over our estimates for the month of July and up to
date but that has largely been due to Jesse Jones
of obligations.
H.M.Jr:
I see.
B:
Ah - the emergency was off about 40 million dollars
from our estimate; the others are about the same. The
gold was off about 40 million - 38 million.
H.M.Jr:
Would you mind getting me off by airmail a little
review?
B:
All right.
H.M.Jr:
I mean a little review of the spending outlook?
B:
All right. We sent quite a report last week on the
July expenditures as compared with last year's July
expenditures to the President. I mean last week.
Regraded Unclassified
58
- 9 -
H.M.Jr:
Well send me a copy of that.
B:
Ah - yes. He brought it up at Cabinet Meeting and
asked Wayne to give him an explanation of it so he
could make it public
H.M.Jr:
Yes.
B:
but when we took it over we talked him out of it.
H.M.Jr:
Ah-ha.
B:
We thought it better to keep still.
H.M.Jr:
Let me have a copy of it and bring it up to date.
B:
All right.
H.M.Jr:
How are you feeling?
B:
I'm feeling pretty good; kind of anxious for Congress
to get away.
H.M.Jr:
Yes, well take care of yourself.
B:
All right. Do you want Archie now?
H.M.Jr:
Anything else you want to tell me?
B:
No, there isn't much change in the situation so far
as the Budget is concerned. Department hung on to
the Interior Bill for quite a while with a view to
vetoing it but he finally decided not to because he
had word that they'd pass it over his veto immediately.
Everybody's in a pretty bad temper; they want to go
home so badly that they don't want to reconsider anything.
H.M.Jr:
Yes.
B:
So he decided to sign it.
H.M.Jr:
Well up to date I mean on the legislation he didn't
pass anything that would cost us any great money to
it,did he?
B:
No.
Regraded Unclassified
59
10 I I
H.M.Jr:
What?
B:
No, there isn't anything that we need worry about
so far as '38 is concerned.
H.M.Jr:
I see. Do you think they'll pass the Housing Bill?
B:
I really don't know. (Aside: "Did you hear anything
of the Housing Bill"?) Mac says that he can't find
anybody that's got any idea from it. The House has it
and hasn't reported yet.
H.M.Jr:
I didn't hear what you said - the phone wasn't working.
B:
I say Mac says that he hasn't seen anybody that knows
anything about the status of the Housing Bill.
H.M.Jr:
Who says that?
a
Mac.
H.M.Jr:
I see.
B:
The House has it and the Committee hasn't reported it.
H.M.Jr:
I see.
B:
We're all hoping that it will hang over.
H.M.Jr:
Well if - ah - we'll see what happens.
B:
Yes.
H.M.Jr:
Well if you'll get me off a letter airmail I'll
appreciate it.
B:
All right, Goodbye.
H.M.Jr:
Thank you.
B:
Here's Archie.
Lochhead:
Hello
H.M.Jr:
Hello Archie
Regraded Unclassified
60
- 11 -
L:
Well the exchanges have been absolutely inactive;
H.M.Jr:
Yes.
L:
sterling is holding strong and the francs, as
Mr. Taylor said, are holding quiet; they're not gain-
ing anything real but they're holding their own.
H.M.Jr:
Ah-ha.
L:
Ah - the other exchanges are not doing much; Belgium
is inclined to be a little weak but there - there's
been no questions brought up at all. The Chinese
have managed to hold that exchange so far; of course,
it has cost them money; it hasn't come out yet but
it's costing them money.
H.M.Jr:
How much of the one billion two is inactive.
L:
Just a minute. (Aside: "What is the inactive fund
right now"?) One billion 277.
H.M.Jr:
I see,
L:
Now that seems to have quieted down again. There's
little dribs and drabs come over from England and
Belgium just now but there's no heavy shipments and
very little coming in from the market over in London.
H.M.Jr:
How are you feeling?
3
I'm feeling fine and things have been so quiet I've
been away most of the time that you've been away.
H.M.Jr:
Good for you.
L;
Yes.
H.M.Jr:
All right.
L:
All right, now do you want to speak to Mr. McReynolds?
H.M.Jr:
Yes. That's about everybody, isn't it?
L:
Ah - Mr. McReynolds and Mr. Haas here.
Regraded Unclassified
61
- 12 -
H.M.Jr:
All right, I'll say "Hello" to both of them.
L:
Right.
McReynolds: Hello Secretary.
H.M.Jr:
Hello Mac.
How are things going?
McR:
Right fast.
H.M.Jr:
No troubles?
McR:
No troubles.
H.M.Jr:
Good, I'll have to think up some.
McR:
Well I've no doubt you will.
H.M.Jr:
Yes.
McR:
We had - the only trouble we had was Wayne and Dan
and I got in a golf game the other day and had a
little difficulty.
H.M.Jr:
You did.
McR:
Not bad, you understand, but Dan won our money.
H.M.Jr:
I see.
McR:
(Laughs)
H.M.Jr:
Well that's good.
McR:
The devil it is - I lost it.
H.M.Jr:
That's all right.
McR:
(Laughs)
H.M.Jr:
Everything's quiet, eh?
McR:
Yes, everything's quiet.
H.M.Jr:
Good.
Regraded Unclassified
62
- 13 -
McR:
And nothing to worry about at all.
H.M.Jr:
O.K.
McR:
O.K. Here's George.
Haas:
Hello Mr. Secretary.
H.M.Jr:
Hello George. How are things with you?
H:
Oh everything moving along fine and think we'll make
the schedule on the several jobs we had when you left.
H.M.Jr:
Good.
E:
And the other thing - I'll get off that letter on the
general business situation. In general, it's just
about as it was when you left.
H.M.Jr:
Ah-ha.
H:
Ah - the index - the weekly one is down a little bit
but nothing disturbing.
H.M.Jr:
You're going to have something for me on the little
business man.
H:
Yes sir.
H.M.Jr:
Good.
H:
I'll have that.
H.M.Jr:
May I talk to Magill once more?
H:
Yes sir.
Magill:
Hello
H.M.Jr:
Ros, have you seen the President recently?
M:
No I have not, no sir, I've - well the last time I
saw him was at Cabinet two or three weeks ago.
H.M.Jr:
Has Taylor seen him?
Regraded Unclassified
63
- 14 -
M:
Yes, he's - well he's seen him at Cabinet too. I don't
know whether he's seen him in between or not.
H.M.Jr:
I mean I want to know how he feels.
M:
Well - ah - ah - very well I should say. He - there's
been a lot of discussion about the Congressional situ-
ation, etc.
H.M.Jr:
Do you think there's any chance of their getting away
before Labor Day?
M:
Oh yes, my own guess would be, from the way they talk
to me, that they're, pretty sure to be away by the 25th
and there's a possibility they'll be away by the end
of this week.
H.M.Jr:
I see.
M:
That's the way it looks to me; I don't think there's
any change.
H.M.Jr:
Now Ros -
M:
Yes sir.
H.M.Jr:
I want to tell you. There's no need of your being
there over Labor Day week-end.
M:
Well that's very good of you. I thought I would - I
would try to get away and come back the day after
Labor Day probably, if that was agreeable to you.
H.M.Jr:
I just want the people to be there that help me on my
financing.
M:
Well I - I imagined that you'd be busy on that and
that you wouldn't want me to be reporting to you till
a little later.
H.M.Jr:
Well I mean I'd like to see you but I mean that would
be a good chance for you to get away.
M:
Well I'd'like to do it; I've been - it's just been
impossible to get away here with this bill in the
state that it's been
H.M.Jr:
Yes.
Regraded Unclassified
64
- 16 -
H.M.Jr:
I - I really haven't been working at all and I've
had a complete rest.
M:
Well that's - I'm glad you have because that's
fine.
H.M.Jr:
And I'm really in good shape.
M:
Well now have you got anything you want to-day?
H.M.Jr:
No.
M:
I've spoken to Mac - Bob McHugh - I guess he'll
take you up - the operator will take you up on
that.
H.M.Jr:
All right.
M:
Thank you. Goodbye.
H.M.Jr:
Goodbye to all of you.
M:
Good luck.
Unclassifie
65
15 1 I
M:
except the week-ends but I - I'm feeling
perfectly good but I would be glad to get a week
or so down to camp.
H.M.Jr:
Well that would be a good time to get it.
M:
Yes - yes, that would be fine. How - how are you
feeling, Henry?
H.M.Jr:
Ah - you see because I want on my financing - ah -
I need Wayne, I need Bell - I need George and his
people
M:
Yes.
H.M.Jr:
and I'd like Archie to be around.
M:
I think they're all planning to be here.
H.M.Jr:
All right.
M:
When would you plan to get here?
H.M.Jr:
Well I hope to get in there Friday night or Saturday
morning.
M:
I see. Well I probably won't be here then and I'll
check in after Labor Day.
H.M.Jr:
All right.
M:
Well how are you?
H.M.Jr:
I've had a grand vacation
M:
And have Mrs. Morgenthau and the children been well
all the while?
H.M.Jr:
Well they've had colds; I had a little cold but it's
been a perfect rest.
M:
Well that's fine. I'm - I'm glad you can get a rest
out of it without taking things here too hard.
Regraded Unclassified
66
JR
GRY
Paris
Dated August 17, 1937
Rec'd 3:34 p.m.
Secretary of State,
Washington.
1168. August 17, 4 p.m.
FROM COCHR.N.
Paris Exchange market very quiet. French control
acquired small amount starling 132.83. Forward franc more
offered and intervention through British control to hold
three months rate at 3 and one-sighth apparently withdrawn
this afternoon. Rentes slightly lower. International
shares hard hit by Shonghai trouble. Further increase in
foreign Exchange holdings of Swiss National Bank as of
.ugust 14 presumed to have resulted from tourist influx.
Press report from Prague says Chinese Minister of
Finance Kung has concluded arrongements with Skoda works
for 10,000,000 pound credit to China for purchase of
"industrial Boods" in Czechoslovakin. Press report from
Basel states Dutch Swiss banking credit which I mentioned
yesterday was placed through Luescher and Company, Basel,
amounting to 100,000,000 Swiss francs is secured by Chinese
silver deposits.
BULLITT
MC:DDM
Regraded Unclassified
67
RB
CODAT
PARIS
Dated August 18, 1937
Rec'd 7:05 D. m.
Secretary of State
Washington.
1173, August 18, 5 D. m.
FROM COCHRAN.
French control yielded sterling throughout the day
at from 132.87 to 94. While turnover was not heavy the
pressure was steady. Three months rate weakened to four
francs against sterling. French rentes definitely lower.
No special cause for unsatisfactory feeling but contributing
factors are: rising cost of living, labor troubles which
caused cancellation of ILE DE FRANCE cruise, realization of
deficient French industrial production and Far East situation
German Reich announces issue at 98.75 of 700,000,000
reichsmarks of four and one-half treasury bonds reimbursable
within fifteen years.
Press reports visit by Kung, Minister of Finance of
China, to Austrian munition works Hirtenberg before pro-
ceeding to Genoa to embark for China. In commenting upon
Kung's
Regraded Unclassified
68
RB
-2-#1173, August 18, 5 p. M. from
Paris
Kung's reported arrangements in Europe Financial News
today concludes:
"While the sympathies of financial circles in London
and other western European centres are with China there is
a great difference between sympathy and the granting of
credits while the risk is so exceptionally high as it is
at present, There can of course be no question of any
issue of a public loan either in London or in other centres
unless it is under the guarantee of the governments of the
lending countries which does not seem to be forthcoming.
The schemes for Chinese financial transactions under the
Trade Facilities Act or the export credits guarantee scheme
will have to await the advent of quieter times".
Referring to British customs figures showing arrival
in London past week of one million two hundred fifteen
thousand pounds sterling of Chinese gold, Financial News
says in part:
"China has sold a considerable proportion of her
precious silver stock to the American Treasury in recent
months to fulfil her plan to adopt a gold -- CYM-- foreign
exchange base for the currency. Some of the gold acquired
has been converted into dollars and some into sterling. The
accuisition of sterling assets explains the arrival of Chinese
gold in London".
BULLITT
Regraded Unclassified
69
August 19, 1937.
Thursday.
From Hawaii
12:35 p.m.
H.M.Jr:
Well what are you going to do - get away now?
Magill:
Well I think I will. I think as soon as we get this
bill situation wound up - I want to talk to Doughton
a little about the work of the Joint Committee
H.M.Jr:
Yes.
M:
in connection with the tax program in the fall.
H.M.Jr:
I see.
M:
But I can do that I think tomorrow morning and then
if everything is quiet I think I'll get away.
H.M.Jr:
Good. Well can you stay away until after Labor Day?
M:
If it's agreeable to you, I'll plan to come back
the day after Labor Day.
H.M.Jr:
Why don't you do that.
M:
Yes. Well I'd like to do it. If I get that two
weeks it would be fine.
H.M.Jr:
I'd do that.
M:
Yes.
H.M.Jr:
Ah - Ross.
M:
Yes sir.
H.M.Jr:
Ah - just tell somebody when I'm through with this
I want to talk to McHugh in his office.
M:
Well he wants to talk to you so he's got that in
mind. I'll see that the operator gets the message.
E.M.Jr:
Yes, I want to - have you got - have you got - is
Taylor and Bell there?
M:
Taylor and Bell are here. Do you want Taylor?
Which do you want? Hello
Regraded Unclassified
70
- 2 -
H.M.Jr:
Yes.
M:
Ah - do you want Taylor?
H.M'dr:
If you please.
M:
All right. Just a minute; he's coming on.
H.M.Jr:
Ross.
M:
Yes sir.
H.M.Jr:
I think that you ought to feel awfully happy that
you're able to get this thing through because there's
so few things have been gotten through.
M:
Well I - I do feel rather good about it because -
ah - we had a lot of fights in the Committee about
it and it took a lot of strategy and figuring
around and so forth and - and I - I am really quite
happy that we got it through without any more trouble.
H.M.Jr:
Well you get away now and then when we come back -
as soon as my financing is over I expect to spend
most of my time on this tax business.
M:
Good. Good - well I'll try to be all freshened up
for you.
H.M.Jr:
Good.
M:
All right, I'll put Wayne on.
H.M.Jr:
Right.
Taylor:
Hello Henry.
H.M.Jr:
Hello Wayne - I - in studying your cable I don't
think there is any question but what paragraph 1 -
the first one is the thing to do.
T:
Ah - it looks more that way all the time, Henry.
H.M.Jr:
Yes. Now what I want to ask you is this. I've got
a column in front of me. Ah - if we offered an issue
of Friday before Labor Day at percentage
T:
Yes.
Regraded Unclassified
71
- 3 -
H.M.Jr:
payment on the 8th, is that right. You do it
on percentage for payment on the 8th? They pay on
Wednesday, don't they?
T:
No this is - this is - ah - payment on the - you talk-
ing about bills?
H.M.Jr:
Yes - I mean you couldn't offer it on Monday, the 6th,
you see?
that
T:
No Bell) that wouldn't quite figure/way. (Talks aside to
H.M.Jr:
Hello - hello.
T:
That would go out on Wednesday which is the first,
you see?
H.M.Jr:
The first - now would that - does that make 400
million?
T:
That would make four (talks aside again with Bell)
H.M.Jr:
If we sold one on Wednesday the 1st?
(Taylor is still talking aside to Bell)
T:
The payment would be on September one.
H.M.Jr:
What's that?
T:
The payment would be on September one.
H.M.Jr:
Yes, well does that make 400 million?
T:
Yes that makes 400.
H.M.Jr:
Well is there any reason why we can't sell two more?
T:
No.
H.M.Jr:
What?
T:
No.
H.M.Jr:
Because I don't like - ah - I'd like to do that and
then, as I get it, I want to see if I was figuring
right - there'd be one on the 8th and one on the 15th?
Regraded Unclassified
72
- 4 -
T:
That's right.
E.M.Jr:
And then on the 22d we could start a new series.
T:
Well we could either do that or we could skip the
rest of September and start right with the first of
October.
H.M.Jr:
Hello
T:
Yes it would be the 6th of October.
H.M.Jr:
I don't think I'd want to - well it -
T:
But that's up to you. We're all right by doing the
two on the 8th and the 15th.
H.M.Jr:
You are all right?
T:
Yes and that would give us a total of 500.
H.M.Jr:
On the 8th and the 15th.
T:
What?
H.M.Jr:
I say let's count definitely on doing it.
T:
Well that checks completely with the way we feel.
H.M.Jr:
On the 8th and the 15th.
T:
Yes, and that will give us time to look around.
If we want to keep on with them - fine - otherwise
we could - what?
H.M.Jr:
We
up to the new series after
I come back.
T:
That's right.
you see,
H.M.Jr:
(Sag I don't know what price your bills have sold for
the last two issues because I haven't had any news-
papers.
T:
Well we've been all right on them. The short bills -
ah - have been going - ah - around 22.
Regraded Unclassified
73
- 5 -
H.M.Jr:
Have they got any - has it been going better or
T:
They went better than the long ones up to the last
time
H.M.Jr:
Yes.
T:
and the last time it switched a little bit.
H.M.Jr:
I see. I see. Ah - what rate did you get the last
time on the long ones?
T:
About forty (aside to Bell: 46, wasn't it?) 46.
H.M.Jr:
I see. Well that's a good rate.
T:
Yes.
H.M.Jr:
That's a good rate.
T:
Ah - we've helped by an account of - we've allowed
payment by credit, you see?
H.M.Jr:
I see.
T:
And that helped a little bit on the short ones
particularly.
H.M.Jr:
Well you'd want to tell - ah - ah - on Monday the
30th I think we ought to say something, don't you
think so?
T:
Ah - yes, at least then.
H.M.Jr:
What?
T:
I think at least then.
H.M.Jr:
At least then.
T:
Yes. In other words, not later than that?
H.M.Jr:
What?
T:
Not later than that. In other words, if we could -
if we could say that we weren't going to ask for any
cash
Regraded Unclassified
74
- 6 -
H.M.Jr:
Yes.
T:
fairly soon, I think it would help the market
because the boys are guessing - ah - they're figuring
that we're going to refund those 350 bills, you see?
H.M.Jr:
I see.
T:
And they're talking about an issue which will be anywhere
from a billion one up to a billion three.
H.M.Jr:
Well I'll talk to you again next Tuesday or Wednesday.
T:
Right, but we - we check completely on the two more
bills in Septem - ah - two more issues in September
into December.
H.M.Jr:
Ah - we check on that?
T:
Absolutely.
H.M.Jr:
Good.
T:
And that gives you - that puts us in nice shape so
that the maximum amount at any one time
H.M.Jr:
Yes.
T:
would be two billion eight.
H.M.Jr:
Ah-ha.
T:
And then that one could work down at periods, you see?
H.M.Jr:
Yes. Well that sounds all right. Now - ah - what
are my March 142 - what are they selling at?
T:
Ah - on a 163 basis but the feeling isn't terribly
good at the minute.
H.M.Jr:
You say the what?
T:
They're selling on a 163 basis.
H.M.Jr:
What does that make them - ah - par what - par 20?
Regraded Unclassified
75
- 7 -
T:
Par 16.
H.M.Jr:
Par what?
T:
It's about par and a half.
H.M.Jr:
Oh they're off a little bit, aren't they?
T:
Yes, they're off since you last - ah - since we
last talked to you and we had another speech
that didn't help the market too much but it had it's
(laughs)
H.M.Jr:
Well hello.
T:
Yes.
H.M.Jr:
Ah
T:
It wasn't a Green Bay one but it was
H.M.Jr:
With Congress gone and out of the way I think the
market ought to improve.
T:
What?
H.M.Jr:
The market ought to improve as soon as Congress goes
ho
home.
T:
It won't hurt it any.
H.M.Jr:
All right. Now what about gold?
T:
Ah - gold's about the same; we've got a little bit
more coming from Japan now - I think its six million.
H.M.Jr:
Ah-ha.
T;
Ah - and pounds act awfully strong.
H.M.Jr:
They do.
T:
Yes. They're - they might hit $5.00 to-day.
H.M.Jr:
Really?
Regraded Unclassified
76
- 8 -
T:
Yes.
H.M.Jr:
Any more gold coming from
T:
From where?
H.M.Jr:
T:
Ah - - six.
H.M.Jr:
New?
T:
Yes.
H.M.Jr:
Ah-ha. Ah-ha.
T:
It isn't much any one place but it's - ah -
.......
H.M.Jr:
It trickles in.
T:
Yes and particularly with the strong pound, you see?
It - ah - ah - it - if the pound were a little lower
and the gold rate had been about as it is why the -
ah - the gold would go there instead of here.
H.M.Jr:
I see. All right, can I say hello to Dan?
T:
He's right here.
Bell:
Hello
H:M.Jr:
Hello Dan.
B:
How are you?
H.M.Jr:
Fine. Aren't you perfectly happy about that sug-
gestion?
B:
Yes, it's O.K. I agree with it entirely.
H.M.Jr:
You - you feel all right?
B:
Yes. I apologize for not getting off a report on
Monday but I missed the plane.
Regraded Unclassified
17
- 9 -
H.M.Jr:
Well -
B:
So I'll have one next Monday and you can read it
on the boat.
H.M.Jr:
Good.
B:
Ah - let's see you're leaving there when - Saturday?
H.M.Jr:
I leave here on the 28th?
B:
That's - ah -
H.M.Jr:
There's one more plane will catch me.
B:
Yes, well I'll get the next plane sure.
H.M.Jr:
Right.
B:
All right.
H.M.Jr:
Are you going to get any vacation now?
B:
Well (laughs) I haven't given much thought to it.
But there may be a possibility after this financing
is over.
H.M.Jr:
I see.
B:
I'll have to skip some of the Budget Hearings and
just let the boys go ahead with it in order to get
any.
H.M.Jr:
You ought to figure on it right after the financing.
B:
Well I will a little but our Budget Hearings will
start about the 20th. But I guess I can arrange
the schedule and then go off and let the boys do
the trick.
H.M.Jr:
I think you'll have to.
B:
Yes.
H.M.JrL
Ah-ha.
B:
Well I'll have to think about it anyhow.
Regraded Unclassified
- 10 -
78
H.M.Jr:
I forgot to ask Wayne how is he standing it physically?
B:
(Laughs) Fine,he says.
H.M.Jr:
He is.
B:
Yes. It doesn't look as though he lost any weight.
H.M.Jr
Anything you want to say to me?
B:
How's that?
H.M.Jr:
Anything you want to say to me?
B:
No I think everything is running along bretty good.
Ah - if we get Congress out of here why some of our
worries are over and
H.M.Jr:
That
Bill the way I read it in the New
York Times I don't think they're going to build many
houses.
B:
No - no they won't.
H.M.Jr:
What?
B:
No, that's right.
H.M.Jr:
That's what I thought.
B:
Yes. There's one thing up there that's bothering
me a little and that's this cotton business.
H.M.Jr:
Yes. That's one of those things who told what last,
eh?
B:
Yes, I got some
stuff that Senator Byrnes
is trying to use some of the Customs money to - ah -
make a gift of about 3¢.
H.M.Jr:
I see,
B:
That means that the Budget is sunk to the extent of
about 65 million,I understand.
Regraded Unclassified
79
- 11 -
H.M.Jr:
Well is there anything you can do about it?
B:
Ah - I don't think SO. I understand that it's had
the approval of higher-ups.
H.M.Jr:
Ah-ha. Well it's a lot of money.
B:
Well I'm just hoping that it will get caught in the
cog and they'll go home before anything's done.
H.M.Jr:
Ah-ha. I hope so too.
B:
Yes. Well we'll talk to you next week, eh?
H.M.Jr:
Next week.
B:
All right, good-bye.
H.M.Jr:
Wait a minute.
B:
Yes.
(Pause)
B:
Yes.
H.M.Jr:
Wayne?
B:
Oh just a minute.
Taylor:
Hello.
H.M.Jr:
Are you standing it all right physically?
T:
I certainly am.
H.M.Jr:
And it hasn't been too hot?
T:
No it's - ah - the last couple of days it's been
pretty rough - I mean as far as the weather goes -
but it's really been all right.
H.M.Jr:
O.K.
T:
In case of need I have an extra guilder and that
seems to work out.
Regraded Unclassified
- 12 -
80
H.M.Jr:
All right. (Laughs)
T:
(Laughs)
H.M.Jr:
Goodbye.
T:
Goodbye.
Regraded Unclassified
81
TREASURY DEPARTMENT
WASHINGTON
August 19, 1937
My dear Mr. Secretary:
In accordance with your telephone request, there is
attached & current business situation memorandum and some
accompanying charts. I was glad to hear that you are
having a good rest and enjoying your vacation.
My best wishes for a pleasant return voyage,
Sincerely,
George C. Haas,
Director of Research and Statistics.
Honorable Henry Morgenthau, Jr.,
Royal Hawaiian Hotel,
Honolulu,
Territory of Hawaii.
Enclosure
Regraded Unclassified
TREASURY DEPARTMENT
82
CONFIDENTIAL
INTER OFFICE COMMUNICATION
DATE August 18, 1937
TO
Secretary Morgenthau
FROM
Mr. Hass JOH
Subject: The Business Situation
Business activity during July and early August has on
the whole been well maintained. In large measure, however,
it has been maintained on backlogs of unfilled orders built
uo in earlier months, while the volume of new buying has con-
tinued small relative to the current level of production. It
seems evident that unless increased buying appears, to replace
backlogs as they become exhausted, a slackening in business
activity and possibly a temporary decline is to be expected.
In our revenue estimates we have made allowence for a tem-
porary decline of this nature, since we believed it likely
that a period of adjustment would follow the high production
levels of last spring, which were apparently excessive as
compared with the movement of goods into consumption. The
longer term outlook, however, continues to favor a general
unwerd trend in business, encouraged by low interest rates,
improved capital markets, a deficiency in building, and in-
creasing purchasing power of farm and factory workers. The
effect of these may be offset to some extent, however, by a
decrease in the net volume of Federal spending.
Some tendency toward a lull in business was seen during
July. The Federal Reserve Board preliminary estimate of in-
dustrial production for that month shows a gain in the index
of only 2 points from the strike-depressed June level of 114
(revised), despite 8. recovery in steel production to the
highest level (seasonally adjusted) since Jenuary. A sharp
decline in textile activity was the most important adverse
factor. In comparison, the index stood at 118 during the
months of March, April, and May. The New York Times index
(Chart 1) showed some tendency of business to weaken during
the latter part of July and early August, despite well-
maintained steel activity.
Factors in the Business Outlook
The relatively light volume of new buying appears to
us of outstanding importance in the near-term business out-
look. The volume of new orders in most industries, judging
Regraded Unclassified
83
- 2 -
from our confidential figures from reporting companies and
from various trade reports, has been insufficient to maintain
industrial production at its present level. In terms of
physical volume, new orders appear to be running at about
the same level as last year at this time, or somewhat lower.
The level of industrial production during the fall months of
last year, A.B. measured by the FRB index, was about 12 per-
cont below the present level.
Industrial production has been maintained this summer
largely on backlogs of orders built up during earlier
months. The volume of such orders must have been unusually
large. In cotton textiles, for example, new orders have
been running at B. lower level than production almost con-
tinually since March, yet it was not until July that back-
logs were reduced sufficiently to drop production to B
sharoly lower level. Cotton consumption by mills during
July was 15 percent below that in June, and lower than the
consumption in July of last year.
A similer situation appears to exist in the steel indus-
try. Production has been maintained at recent levels largely
because of an unusually heavy volume of old orders. New buy-
ins has been light since the latter part of April. Although
expressions of confidence in the fall outlook for steel have
been quite numerous recently, no definite signs of an upturn
in steel buying have so far appeared. The Iron Age says that
only at Chicago has there been a reversal of the downward
trend of new orders, and that even there the change has been
moderate.
A marked increase in payrolls in recent months is con-
sidered by business observers as one of the outstanding
fevorable factors in the business outlook. This may already
be having an influence on retail buying, since department
store sales and variety store sales during July (both
sessonally adjusted) showed an increase over earlier months.
During August so far, retail sales are reported to be some-
what disappointing, though definite data are not available.
Dollar sales of merchandise in small towns and rural areas
during July, according to the Department of Commerce index
figures, following B. previous slight decline from the peak
(seasonally adjusted), declined 4 percent from the June
established in May. The July sales were 4 percent higher
than during the corresponding month of last year.
Regraded Unclassified
- 3
84
Purchases of automobiles in recent months have shown a
tendency to lag, new car registrations during April, May, and
June being lower than last year. Some upturn appears likely
during July 8,8 a result of prospective price increases for
1938 models, but the increased prices may later have an
adverse effect on new car buying.
A continued rise in rents during the summer is a factor
favoring increased building activity. The sharpest upturns
in residential rents during July occurred in large indus-
trial cities, according to reports from the Department of
Lebor. The advance in rents 16 expected to be accelerated
after October 1, the date when, leases on dwellings are
generally renewed. More stable building costs will also
fevor an upturn in construction. Five of twenty-six cities
reporting to the Federal Home Loan Banks report that resi-
dential building costs declined in July for the first time
in many months. Total construction in 37 Eastern States
during July, according to the F. W. Dodge figures, reached
a new high for any month since April 1931, making a gain of
9 percent over the corresponding month of last year. The
most pronounced gain, 44 percent, was in non-residential
construction awards (largely commercial), which reached
the highest level since July 1930. Residential construe-
tion awards during July were 12.5 percent higher than in
July of last year, while public works and utility awards
showed B 19 percent decline.
A continued upward movement in commercial loans
sopears a favorable factor in the business picture. The
volume of commercial paper outstanding at the end of July
7/MB the highest since January 1931, and made the best
July showing since 1930. Commercial borrowing this year
has not shown the usual summer slackening, but instead
has continued to increase. It 1s reported that a sub-
stantial part of the borrowing 18 for the financing of
plant expension.
New capital flotations during July did not hold the
sharp gain registered in June, but for the first half
year they made B. very favorable comparison with the cor-
responding period of 1936, although total security flota-
tions have declined. Estimated gross proceeds from
securities registered with the SEC during the first half
of 1937 were about 15 percent less than during the cor-
responding period of 1936. The estimated net proceeds
Regraded Unclassifie
85
4
to be used for plant expansion and working capital, however,
both in percentage of the total and in aggregate amount, was
the highest for any first half year since registration began
under the Securities Act of 1933. New corporate security
flotations 8,6 reported by the Commercial and Financial
Chronicle, amounted to only $139 millions in July 1937, as
concered with $294 millions in July 1936, but the amount of
ruch flotations for new capital as contrasted with refunding
nurnoses amounted to $82 millions in July 1937, 86 compared
with only 170 millions in July 1936. During the last several
weeks the new issue market has been quiet.
Commodity and Security Prices
Commodity orices (Chart 2) have recently tended down-
mrd. Commodity futures, BB represented by the Dow-Jones
future. index, have reached new low levels on the general
decline which began in March, while the BLS index of 30
sensitive commodities has held above its earlier lows.
Declining prices for cotton and grains Aue to large
croo prospects have recently been an important factor in
the futures index. The total wheat crop is now estimated
at 890 million bushels, 8.8 compared with 626 millions last
year. Despite the increased production, however, prices
have been sustained at 8. higher level than last year by
heavy crop deterioration in Canada, where conditions are
reported to be the worst in 30 years, and by Door crops
in other wheat countries. Farm prices for whest on
July 15 everaged about 31.13, AS compered with a crop-
yoar average of $1.00 for the 1936 crop.
The Government's August cotton crop estimate of 15.6
million bales, as compared with 12.4 millions last year,
made the average yield per acre the highest on record. In-
creased foreign crop prospects, together with the large
estimate of the domestic crop, have reduced futures prices
to hear the 10-cent level. Present prospects indicate that
the larger crop may bring farmers little, if any, more in-
come than the smaller crop of last year. It appears likely,
however, that a crop loan, or more probably a loan and
aljustment payment plan, will be applied to this year's
crop. which would add to the incomes of cotton farmers.
The President has consented to a crop loan, provided
Congress would out crop control legislation first on the
celendar next session. The Senate has adopted a resolu-
tion to this effect, which the House Agriculture Committee
has accepted.
Regraded Unclassifi
86
- 5 -
Security prices have shown divergent trends. Government
bonds and notes (Chart 3) showed & general upward movement
during July, most groups exceeding their May-June highs. A
moderate recession has taken place during August. Corporate
bond prices, 88 measured by the Dow-Jones combined average,
have held steady, with a slightly sagging tendency, since
the sharp recovery early in July. Industrial and utility
bonds have shown greater strength than railroad issues. In
the stock market, price trends have been mixed. Industrial
stocks (Chart 4) have shown a steady rise since the middle
of June, reaching nearly to the high levels of early March.
Utilities have shown a moderate gain, but have sagged some-
what during the past three weeks. Railroad stocks have
shown very little improvement, and are now but slightly
above their June lows. Foreign transactions (shown on
Chart 4) continued moderately on the buying side during
July, but more recently the buying and selling has been
practically equal.
STOCK PRICES AND FORBIGN TRADING
IN DOMESTIC STOCKS
Daily Movement, Dow-Jones Industrials
and Foreign Net Purchases and Sales
DOLLARS
in
196
192
192
THE
Prices
182
188
Pth
184
184
180
180
176
176
172
172
168
168
DOLLARS
DOLLARS
VILLIONS
WILLIONS
Het Purchases
4
4
o
o
4
+
Net Sales
I
a
24
3
10
17
24
31
7
14
21
25
in
12
19
2
9
:
16
23
30
7
14
21
28
4
11
18
25
MARCH
APRIL
MAY
JUNE
JULY
AUGUST
1937
Total Weekly Poreign Trading, Weeks Ending Wednesday
DOLLARS
COLLARS
MILLIGHS
WILLIONS
40
40
Net Purchases
20
20
o
D
Regraded Unclassified
Net Sales
87
20
20
Thant CB F
40
7
24
3
is
17
24
31
7
14
21
20
5
12
19
26
N
9
16
23
a
7
14
21
28
4
It
18
25
MARCH
APRIL
MAY
JUNE
JULY
AUGUST
1937
- el the Sairmary el the -
P - 149 - A.
- of - - -
Chart 3
Price Fluctuations
U.S. SECURITIES BY MATURITY CLASSES
Yield Fluctuations
1936
1937
MAR
MAY
JULY
SEPT
NOV
JAN
MAR
1936
1937
MAY
JULY
SEPT
DOLLARS
NOV.
Inverted Seale
MAR
MAY
JULY
SEPT
NOV.
JAN.
MAR
DOLLARS
MAY
JULY
SEPT.
impried Boals
Notes
PER CENT
FER CENT
Notes
102
Under / Year
102
4
4
Limiter y Year
100
100
a
a
154
104
/ta2 Peare
o
o
ICE
102
100
106
4
.
(to2 Years
104
Zin3 Years
104
a
8.
(or
102
(2
1,2
108
ID#
4
+
108
106
3105 Years
e
a
184
104
102
JAN
MAR
MAY
102
1.2
2103 Years
1.2
JULY
SEPT
NOV
JAN
MAR
MAY
JULY
SEPT
NOV.
114
114
Bonds
1.6
1.6
114
112
110
a
a
110
10%
Stal0 Years
(08
12
( 2
3eo5 Years
124
106
16
1.0
104
104
2.0
2.0
TN
112
24
2.4
110
110
JAN
MAR
MAY
JULY
SEPT
NOV
JAN,
MAR
MAY
ALY
SEPT
NOV.
12
12
Bonds
104
108
1.6
16
13A
10ta20 Years
IDÉ
to 10 Years
2.0
2.0
104
104
102
102
2.4
1.4
100
100
20
3.0
118
110
24
14
198
108
IO se 20 Years
2.8
28
188
10%
15a
24
2.4
104
20 Years and Over
102
102
28
2.8
20 Years and Over
160
/
---
100
12
JULY
NEFT
NOV
JAN
MAR
MAY
JULY
NOV
JAN
MAR
MAY
JULY
SEPT
NOV
JAN
MAR
MAY
AAY
SEPT
3.2
MAY
SEPT
HOV
1936
1937
1936
1937
- - is computed - followe:- the yiside of all Tesels of failing -
within the specified autority period ACT first Date APREADA is the -
MAN the dollar price of . these 10 a security at the afd-getal of the
are - aptority date. Tisles ses invial is all - -
class, - by dates. Tisida AFR required is will
willing - Mr. - in Flast - Illnes selling tale sur.
date - ammilies willing starre Mr. and - Fisst minity - - with below per.
/
Motor is the I tome IN traning - - at liams is # state
PASA
Regraded Unclassified
di
I 5 / 1. , 1. I
- -
2061
AVIP
LESI
9161
7
%
61
21
in
5Z
zz
SI
$
E1
11
*1435
Arne
AVT:
*avn
"NWP
'ACM
von
$
are
19
55
=
99
00
8
V.S., U.K., FRANCE
CURRENCY AGREEMENT
PRESCH DEVALUATION,
a
V
69
89
&
stening
B.
02
02
V
a
&
"
"
ALIGORICO
%
N
se
la
s
(******)
1045 a
92
76
DE
à
(*s - (ii)
1045 361115435 DE
82
BL
as
18
OR
OR
06
del
2
ze
1830
1830
1430
17d
02
61
zu
5
62
D
or
"
-
52
ni
=
to
17d
*WM
or
ATTE
AVN
'IVE
'NYF
*AOM
*Lass
#38831435
2361
9661
2561
(wrive to 30VH3AV)
Daily
1924 I
PRICES COMMUTITY 40
a Chint
68
Chart 1
90
PER
STEEL INGOT PRODUCTION
CENT
"Per Cent of Capacity" (Dow Jones)
100
37
80
60
36
40
JAN.
APR.
JULY
OCT.
BUSINESS ACTIVITY - N.Y. TIMES
PER
CENT
Seasonally Adjusted
Est. Normal=100
110
37,
100
'36
90
80
JAN
APR.
JULY
OCT.
Office of the Secretary of the Treasury
C-142 C
Origina of 1 and Statestics
Regraded Unclassified
91
RB
CODAT
Paris
Dated August 19, 1937
REC'd 3:41 P. m.
Secretary of State
Washington.
1178, August 19, 5 P. M.
FROM cochran.
Vrench control had rather heavy day supporting through
purchases by Comptoir spot franc against sterling at one
thirty two point nine fifty five to ninety-two. Interven-
tion in three months franc was made at London through
Societe Generale to reduce discount from four and seven
eighths to four and five eighths. All currencies weak
against sterling. Bank of France statement as of August
twelve showed no important changes. French rentes lower,
Market Estimates that French fund has averaged purchases
of ONE hundred million francs each of past three days to
prevent more serious slump in French Government securities.
Tarket pessimism today is due in part to rumor of differences
between Chautemps and Blum on railway reorganization which
may split Cabinet.
Sentiment
Regraded Inclassified
92
RB
-2-#1178, August 19, 5 p.m. from Paris
Sentiment is also influenced by financial writers who
are beginning to think that French breathing spell may bE
nearing an end. FINANCIAL NEWS London for instance says
today in part: "As a matter of fact the prospects of the
franc have not become worse during the last few days simply
because they have never really become better. Taking a
long view, the outlook is the same as it was a month or
two 830. M. Bonnet's measures have failed to bring about
a fundamental restoration of confidence. The volume of
repatriations has been negligible even though the outflow
of capital has come to a hault. If the best the franc can
do during the holiday season is to remain 'neutral' it is
likely to become worse after the holiday season when the
seasonal influx of revenue has subsided and when the
politicians have once more DECOME restive".
Period for subscription to four percent nineteen thirty
SEVEN Treasury bonds to convert four and one half percent
nineteen thirty-four expired today, is Extended
to twenty third.
BULLITT
KLP
X
Regraded Unclassified
93
RB
CODAT
PARIS
Dated August 20, 1937
Rec'd 2:25 p. m.
Secretary of State
Washington.
1182, August 20, 5 P. m.
FROM COCHRAN.
Better sentiment prevails on Paris market today.
French control has acquired some sterling at OAF thirty-
two point Eighty-six and a fEW dollars at twenty-six point
sixty-four. Forward rate has been held at four and one
half. .ith only slight assistance from the fund rentes
have remained practically unchanged.
French adverse trade balance for first SEVEN months
1937 amounted to ten and one half billion francs as com-
pared with five and one half billion same period last year.
While tourist trade is supporting franc at present the
heavy deficit in the trade balance if continued will surely
have repercussions on the currency.
Liscussing dollar's weakness FINANCIAL NEWS LONDON
today said in part: "Whatever may happen to the dollar
in the
Regraded Unclassified
94
RB
-2-#1182, August 20, 5 p. m. from
Paris
in the short run, in the somewhat longer run the factor
that will have most influence in deciding its tendency
will be the measures taken against the influx of 'hot
money'. Any drastic steps whether in the form of dis-
criminatory taxation or in the form of disclosing informa-
tion on foreign dollar assets would inevitably lead to a
lasting weakening of thE dollar especially as similar steps
are not EXPECTED to bE taken in this country. Since,
however, President Roosevelt has been threatening with
anti- 'hot money' measures EVEr since November 1935 and
nothing has so far been done about it the market is
naturally inclined to minimize the probable importance of
this factor".
BULLITT
GW
KLP
03413323
st
Regraded
95
RB
CODAT
Paris
Dated August 23, 1937
Rec'd 3:45 p. m.
Secretary of State
Washington.
1193, August 23, 6 p. m.
ROll COCHEAN.
Little business and no importart changes on Paris
Exchange market. Slightly better sentiment and small
improvement in forward franc and French rentes attributed
to week-End speech by Bonnet who said at least three
billion francs (out of five point four billion outstanding)
of the four and one half Germain Martin bonds had been
e inverted into the new four percent issue and pointed
out other developments which WERE likewise making the
Treasury situation Easier.
LONDON TIMES today contrasts latest French and
German fortign trade returns. In spite of depreciated
currency French fortign trade deficit increasing because
of higher costs of production and prices. FINANCIAL NEWS
today stresses seriousness of the French price situation
and recommends peaceful negotiation toward releasing
industry
Regraded Unclassified
96
RB
-2-#1193, August 23, 6 p. m. from
Paris
industry from rigid forty hour WEEK. French Cabinet
will meet tomorrow to begin study of final SET of decrees
under authority Expiring August 31.
Press reports Chinese l'inister of Finance Kung has
cancelled sailing from Genoa and returned to Bad Nauhtim
for cure.
BULLITT
KLP
/
/
/
/
Regraded Unclassified
97
August 23, 1937.
12:32 p.m.
From Hawaii
Taylor:
Hello Henry.
H.M.Jr:
Good morning.
T:
Good morning to you.
H.M.Jr:
Ah - Wayne - ah - the main thing that I'm calling
up about is - 1 - I'd like to talk to Bell first,
if I could.
T:
He's right here.
H.M.Jr:
Thank you.
Bell:
Hello
H.M.Jr:
Hello - Dan?
B;
Yes.
H.M.Jr:
Good morning. In the first place, I never got
your summary - hello
B:
Yes.
H.M.Jr:
You know you were going to send me a summary up
to the 15th of July or something like that?
B:
Yes but as I told you, when I talked to you last
week, I missed the plane.
H.M.Jr:
Oh did you miss last week's plane?
B:
I missed the plane, yes, and it's going out of
here to-day and will catch Wednesday's plane.
H.M.Jr:
Oh you're going to send it this week?
B:
Yes, and you'll get it, I take it, Friday
H.M.Jr:
I didn't get George Haas' either.
B:
How's that?
Regraded Unclassified
98
- 2 -
H.M.Jr:
George Haas was going to mail me a review of the
business situation.
B:
Well I don't know - well he sent that. Wayne says
that he sent it.
H.M.Jr:
What's that?
B:
Wayne says that he has sent that.
H.M.Jr:
Well I never got it.
B:
I see. Well it probably missed the plane also.
H.M.Jr:
Now Dan.
B:
Yes.
H.M.Jr:
Ah - I see that they got through that 60 million
dollars for the cotton.
B:
They sure did.
H.M.Jr:
And they dropped out this other money.
B:
They dropped out what?
H.M.Jr:
The money for the sugar.
B:
Ah - yes, except 250 thousand dollars for administrative
expenses.
H.M.Jr:
Yes.
B:
They'll drop that
H.M.Jr:
I'm really calling up for this. What would happen if
the President vetoed the Third Deficiency Bill?
B:
Well in one or two places it would probably do some
harm, in a small way.
H.M.Jr:
Well you remember last year we didn't get our last
Deficiency Bill through.
99
- 3 -
B:
No, it was a couple of years ago - Huey Long's
filibuster
the
H.M.Jr:
Yes, and we went along all right.
B:
Yes.
H.M.Jr:
I wish you'd think about seriously whether we could
recommend to the President that he veto that.
B:
Ah - you mean - ah - merely because of the 60 million?
H.M.Jr:
Yes.
B:
For cotton loan?
H.M.Jr:
Yes.
B:
Well - ah (laughs) I think that - ah - he's agreed
to it.
H.M.Jr:
Well that's what I was afraid of.
B:
Oh yes, he's agreed to it - ah - really had agreed
to it before I ever got in on it; knew anything about
it.
H.M.Jr:
Ah-ha.
B:
And they had quite a time over the facts; had three-way
conversations between Billy Byrnes and McIntyre and
myself and Cliff Woodruff - ah - McIntyre and myself
and apparently the President had committed himself
on it and there wasn't anything we could do about it.
H.M.Jr:
Ah-ha.
B:
I tried to get it out.
H.M.Jr:
Well now is that a straight grant?
B:
It's a straight grant, yes.
H.M.Jr:
A straight grant.
100
- 4 -
B:
It would be a benefit payment - ah
H.M.Jr:
What's that?
B:
It would be a benefit payment of not to exceed 3¢
a pound.
H.M.Jr:
An - 3¢.
B:
Yes, you see they're figuring on 12# a pound.
The loan will be either 96 or 10¢.
H.M.Jr:
Oh it's going to be a loan?
B:
Well the loan will be from the Commodity Credit
of either 90 or 10¢ and then the differential will
be the benefit payment. If you get a loan at 10c
then the differential is only 24 but if you get a
loan of 9¢ then the benefit payment will be 3¢.
H.M.Jr:
11¢ - if cotton sells at 11 they get 3¢.
B:
So I understand, yes. They get a benefit payment.
B.M.Jr:
You mean the higher the price the more they get?
B:
Ah - the other way Wayne says.
H.M.Jr:
Yes that's what I should think but I mean - but I
won't go into details but from the standpoint of
getting the veto it's water over the dam.
B:
Oh I think SO. I think the President had a con-
ference on it - ah - ah - a week ago Friday.
H.M.Jr:
I see,
B:
And I didn't know anything about it until - ah -
Friday morning
H.M.Jr:
Ah-ha.
B:
when I was trying to get Cliff Woodruff to
get it out in Conference and I was told by the
Secretary of Agriculture that it was all agreed to
and - at a previous week's conference.
101
- 5 -
H.M.Jr:
Well -
B:
It's all set in everything apparently.
H.M.Jr:
Well it's just as well I'm in Honolulu.
B:
Well easier. I think (laughs) you probably are resting much
H.M.Jr:
Yes.
B:
This has been a terrible place in the last week
H.M.Jr:
Ah-ha.
B:
and our budget's been hurt materially - both
'38 and '39.
H.M.Jr:
Has it?
B:
Yes. 365 million, I think, in each year on that
account alone.
H.M.Jr:
Yes.
B:
And - ah - if this sugar bill goes through - ah -
it won't quite pay for itself and - ah - the way the
thing is working out now - if it's vetoed now why
it will reenact at the next session and, it will cost
us money because we'll lose a half year's revenue,
whereas the benefit payments will go in for the
whole year.
H.M.Jr:
I see.
B:
See?
H.M.Jr:
Well that's that.
B:
Do you want me to give you the picture here from the
last of Saturday night, based on what we talked about
last week - 150 million dollars in Treasury bills up
to the 15th of September on maturity in December?
H.M.Jr:
Yes.
102
- 6 -
B:
100 million extra in September for maturity in March.
H.M.Jr:
Yes.
B:
And 200 million from the period in March to be issued
in October.
H.M.Jr:
Yes.
B:
On that basis we'd go out in August with a balance of
about 804.
H.M.Jr:
Yes.
B:
Out of September with 819.
H.M.Jr:
Yes.
B:
And out of October 784 million.
H.M.Jr:
Yes.
B:
And out of November 644 million.
HuM.Jr:
Yes.
B:
And then we have a 600 million dollar third issue in
December.
H.M.Jr:
Yes.
B:
We would go out of there with about 859 million.
H.M.Jr:
If we sold how many bills?
B:
Ah -
B:M.Jr:
Just do that again.
B:
Well you see we've got our program all the way through
to September 15th - the present program - - did you get
that?
H.M.Jr:
That would be five hundred
103
- 7 -
B:
That would be 500 million in - ah - December.
H.M.Jr:
Yes.
B:
Then we would issue another 100 million in September
H.M.Jr:
Yes.
B:
on the 22d and the 29th
H.M.Jr:
Yes.
BE
for maturity in March
H.M.Jr:
Yes.
B:
and continue that series through to the end of
October
HhM.Jr:
I see.
B:
giving you 300 for the period in March.
H.M.Jr:
On that basis we 'd have the following figures.
B:
Yes.
H.M.Jr:
Well that sounds very good.
B:
Very good and that's allowing 110 million dollars
for gold in August and 75 million in each of the
other three months.
H.M.Jr:
I see, well that gives us plenty of leeway.
B:
Plenty unless this gold starts back.
H.M.Jr:
That will increase our bills.
B:
Yes.
H.M.Jr:
I think that sounds all right.
B:
Well I think Wayne agrees to that.
H.M.Jr:
Yes.
104
- 8 -
B:
I think Wayne agrees to that program too.
H.M.Jr:
Who?
B;
Wayne.
H.M.Jr:
All right. How - how is our - those last five year
notes - what - what are they selling at?
B,
They closed Saturday with a slant to 12 and I under-
stand they're off a little this morning for about a
7 to 10.
H.M.Jr:
Ah-ha.
B:
They had an AP story this morning that we were going
to buy about a billion and a quarter and that didn't
help the market any. I think the sooner we announce
that we're not going to have any new cash in Septem-
ber the better our market will be.
H.M.Jr:
I - have you got anything else?
B:
But Wayne will talk to you about that.
H.M.Jr:
All right.
B:
No, that's all I have.
H.M.Jr:
What?
B:
That's all I have.
H.M.Jr:
Thank you.
B:
All right.
Taylor:
I think this - what Dan was telling you at the end
is quite important; that the one good thing that we
can do as far as the market is to indicate that we're
just going to turn over that 817.
H.M.Jr:
Yes.
Baylor:
I'd like to do that as soon as possible.
105
- 9 -
H.M.Jr:
Well do it tonight for tomorrow morning's papers.
T:
O.K.
H.M.Jr:
And, if you don't mind, I'd just as leave have you say,
when you did it, that you consulted with me by telephone.
T:
Right.
H.M.Jr:
See?
T:
Right.
H.M.Jr:
And I'd do it tonight, for tomorrow morning papers
and I think, while you're doing it, you might as well
tell them that this - that present bill issue is going
to be 500 million.
T:
Ah - into December the debt will be 500.
H.M.Jr:
Yes, then they have the whole picture.
T:
Yes.
H.M.Jr:
I'd do the whole thing.
T:
Do it right that way.
H.M.Jr:
Yes.
T:
Because they'll ask the question about the bills
immediately.
H.M.Jr:
Well I'd tell them the whole thing.
T:
Yes.
H.M.Jr:
And you can tell them that you were talking it over
with me.
T:
Right.
H.M.Jr:
I think the quicker we do it now the better.
T:
I'll do it this evening for tomorrow's papers.
H.M.Jr:
Now what else?
Regraded Unclassified
106
- 10 -
T:
Ah - gold - ah - every - all the exchanges and so
on have been very quiet. We've got about ten million
more, however, coming from the Japs.
H.M.Jr:
How much more?
T:
Ten - two lots of five.
H.M.Jr:
Ah-ha. What do they do with all that money anyway?
T:
Using most of it to buy sterling to pay debts with.
H.M.Jr:
Pay who?
T:
Pay debts.
H.M.Jr:
I see.
T:
They got a lot - still got a lot of paper out in
that London market.
H.M.Jr:
Ah-ha. Now what else?
T:
Ah - that's about all. There's one - by the way -
there's one thing on this damn sugar bill.
H.M.Jr:
Yes.
T:
Ah - we've been brought in as part of a committee
H.M.Jr:
Yes.
T:
....ah - to prepare a veto message.
B.M.Jr:
Yes.
T:
Ah - I have taken the position that we will not
comment on the merits of the legislation.
H.M.Jr:
On the what?
T:
On the merits of the legislation.
H.M.Jr:
Yes.
T:
Ah - consistent with what you did before.
Regraded Unclassified
107
- 11 -
H.M.Jr:
That's right.
T:
Ah - but the only thing that we will do is call
attention to this question of the figures.
H.M.Jr:
That's right. You mean on the - on the taxes?
T:
Yes.
H.M.Jr:
That - that's right - that's good sense.
T:
Ah - I wanted to check that with you because I said
that very hard this morning. I told Dan that and our
own people. Now that isn't going to suit the other
people. They're trying to drag us back in again but
I think we're out and we ought to stay out.
H.M.Jr:
Yes, well the President told me to stay out.
T:
Right.
H.M.Jr:
He was very emphatic that I should keep out of it.
T:
Well that suits me fine.
H.M.Jr:
He said, "Henry, the only interest is whether we gain
or loses money".
T:
Yes.
E.M.Jr:
And that's our only interest.
T:
Well that's what we're - that's what we're saying in
our comment.
H.M.Jr:
Attaboy. Ah - now Wayne - would you have again
tonight and they needn't bother coding it - send me
a message - because I don't get the quotations on
those notes, you see - hello
T:
Yes.
H.M.Jr:
Ah - send me - I think I'd select two notes - whichever
ones you think are the most significant, you see?
T:
Yes.
Regraded Unclassified
108
- 12 -
H.M.Jr:
I'd certainly use the last one as one of them.
T:
Yes.
H.M.Jr:
And I'd like every night that the notes - I don't
want basis. it on a yield basis. I want it on a price
T:
Price basis.
H.M.Jr:
Selling at 101 or 101 and so many thirty-seconds, see?
T:
Yes.
H.M.Jr:
And then always say up or down so much, you see? Hello
T:
We'll send you - there are about six of them, I think.
That won't be too many, will it?
H.M.Jr:
Six what?
T:
Six notes. Six maturities.
H.M.Jr:
I don't care.
T:
Well we'll picksome out and.
H.M.Jr:
Send me a - send me a - the only bond they quote here
is the 2-7/8's.
T:
Yes.
H.M.Jr:
So send me a short bond.
T:
Well we'll send that to you every evening from now
until you - ah - till you get back.
H.M.Jr:
Yes and - and tell Schwartz - Gaston isn't there,
is he?
T:
No.
H.M.Jr:
Ah - very significant news - financial news, you see?
T:
Yes.
Regraded
Unclassified
109
- 13 -
H.M.Jr:
Put that in because we get very little here.
T:
Right.
H.M.Jr:
And also any - I mean any significant political
news, you see?
T:
Ah - it's all bad.
H.M.Jr:
Well I mean he can put it in, you see?
T:
All right.
H.M.Jr:
What?
T:
All right.
H.M.Jr:
I mean it comes government radio - it doesn't cost
anything. You say it's all bad?
T:
Yes.
H.M.Jr:
Really?
T:
Yes.
H.M.Jr:
Well I'm - I'm wearing pink-colored glasses.
T:
(Laughs) Ah - it'll look better by the time you get
back but it's lousy.
H.M.Jr:
What's the matter?
T:
A cat and dog fight.
H.M.Jr:
You mean on between the Hill and
T:
Yes.
H.M.Jr:
Ah-ha. Well tell Schwartz to pick out anything
very significant and - ah - political news and then
give me something on the financial. I get the stocks
and the other bonds but I don't get those bills and
these government bonds, you see?
T:
Right.
Regraded Unclassified
110
- 14 -
H.M.Jr:
Hello
T:
All right.
H.M.Jr:
And also I'd like the price of gold - I mean like if
it's 34.77 or 34.76, you see?
T:
Right.
H.M.Jr:
I'd like that price; I don't get that price.
T:
Ah - you get the sterling rates, don't you?
H.M.Jr:
What's that?
T:
You get the quotations that are on exchange.
H.M.Jr:
No, I don't get anything here.
T:
Yes.
H.M.Jr:
I mean I'd like whatever the price of gold is in
terms of sterling, you see in London?
T:
Right.
H.M.Jr:
See?
T:
Right.
H.M.Jr:
And - ah - that's about all. Ah -
T:
Want to talk to Archie?
H.M.Jr:
Yes I'd like to.
T:
All right.
Lochhead:
Hello
H.M.Jr:
Hello Archie.
L:
Yes sir, things have been very quiet on the European
front.
H.M.Jr:
Yes.
111
15 I I
L:
So I think the French will wait off until about the
first week in September and then we'll be starting in
to hear a new story.
H.M.Jr:
Well that will give me something to do - otherwise
I won't have anything to do when I come back.
L:
You'll be surprised - they'll find something.
H.M.Jr:
Who will?
I:
Oh just anybody. (Laughs) Mr. Taylor says you've
got a tax reorganization program on.
F.M.Jr:
Archie, I wish you'd make a study and get it to me
if you can by mail - if there's still time - I don't
know whether there is or not but at least have it
when I come back - how much foreign government money
is on deposit outside of the Federal Reserve Banks.
L:
Outside the Federal Reserve Banks.
H.M.Jr:
I mean really money - in the Russian case I mean
money that they control, see?
L:
I see.
H.M.Jr:
I mean money that we might get out of the banks and
put into the Federal Reserve because it's government
own - government money.
L:
Well now I'll tell you - in order to get that the
Federal Reserve will have to issue new regulations
and have them split up their whole account - it's
going to cause quite a lot of comment.
H.H.Jr:
Well then don't do it until after our financing.
L:
I - I think not. It would - it would stir up a lot
of - a lot of conjecture, I think.
H.M.Jr:
Well we can do it when we get back.
L:
Incidentally, Russia sent over five million dollars
worth of gold and put it on earmark with the Federal.
H.M.Jr:
They did do that.
Regraded Unclassified
112
- 16 -
L:
They did do that. They sent over five million.
H.M.Jr:
Yes, well keep it in mind when I come back.
L:
Yes, well now that other story - there's not an
awful lot as far as - we - we checked around privately
now and again.
H.M.Jr:
Yes.
L:
But you see to get the two figures we'd have to ask
every bank alike.
H.M.Jr:
Well we can wait.
L:
Yes, but we'll keep that in mind and anything we can
get on that we'll follow through on.
H.M.Jr:
All right.
L:
O.K. then. Goodbye.
H.M.Jr:
Yes.
L:
Do you want to speak to McHugh?
H.M.Jr:
Yes please.
L:
Just a second.
0:
Hello.
L:
The Secretary wants to speak to Mr. McHugh.
0:
All right, just a minute.
Regraded Unclassified
113
TREASURY DEPARTMENT
WASHINGTON
August 23, 1937
Honorable Henry Morgenthau, Jr.,
The Royal Hewaiian Hotel,
Honolulu, Territory of Hawali.
My dear Mr. Secretary:
In accordance with your telephone request I am submitting
herewith comments on the financial situation as it has developed
80 far this fiscal year.
Total expenditures of the Government for the first month
of the fiscal year were $658,000,000 as compared with $417,000,000
for the same period last year. showing a deficit of $249,000,000
for the first month this year as compared with $123,000,000 for
the same period last year.
There was a great deal of comment in the press regarding
these totals and most of the comments failed to explain the reasons
for the difference. One 0r two papers, however, did point out the
main cause of the increases in this year over last year. At the
cabinet meeting of the week ended August 7th, the President asked
Mr. Taylor to give him an explanation of these increases 80 that
he could explain the matter at his press conference on Tuesday,
August 10. We prepared 8. memorandum for him on the matter and I
took it over and explained the whole situation to him. I told him,
however, that in my opinion he should make no comments whatever on
the July figures, that the Daily Statement was now set up so that
it showed clearly where the difference was and any financial writer
who wanted to ascertain the facts could very easily get them from
that statement. I told him that any statement made by him would
necessarily call for further comment by the press, which in turn
would lead to further comment from the Administration.
It is my view that you cannot compare July, 1937. with
July, 1936, without commenting on the special situation with respect
to revenues coming in under the Social Security Act, expenditures
going out under that Act. and the net expenditures in the revolving
fund which in July of this year only showed a $2,000,000 net credit,
wheress in July of last year it showed & net credit of $216,000,000
due to large repayments coming in last year for the account of the
Reconstruction Finance Corporation and a financial transaction of
the Commodity Credit Corporation. An explanation of these items
Regraded Unclassified
114
- 2 -
is set out in the memorendum submitted to the President, & copy
of which I enclose herewith. I an also enclosing & copy of the
Daily Statement of the United States Treasury for July 31, 1937,
on page 2 of which you will notice the various items of receipts
and expenditures, together with the increases and decreases, as
compared with the same period last year.
In this connection I am enclosing a copy of the Daily
Statement for August 19, on page 2 of which you can 888 the current
budget picture. For your convenient reference the totals are net
out below in millions of dollars:
August 19, 1937
This
Same
Total
Same period
month
period
fiscal
fiscal year
last year
year 1938
1937
Revenue
330
256
739
550
Expenditures:
General
224
222
561
471
Recovery and
Relief
111
163
309
465
Revolving funds
3
- 16
1
- 232
Trust accounts
(inv.)
61
3
186
80
Debt retirement
-
16
-
21
Total
399
388
1,057
805
Deficit
69
132
318
255
The significant feature of this picture is that the Works
Progress Administration expenditures for the current fiscal year to
date show & drop of about $56,000,000 over last year, and the first
19 days of the month of August show & drop of $21,000,000 over the
same period last year.
You will notice on the statement of the 19th that the public
debt for that day was $36,952,000,000. This is an increase of
$527,000,000 since June 30th. It will be over the $37,000,000,000
mark by the first of September due to two more issues of bills coming
in, United States Savings bonds and Unemployment Trust funds.
Regraded Unclassified
115
- 3 -
I 80 also enclosing the ten-day statements usually furnished
you and the President, showing comparative expenditures and obliga-
tions of the major organizations on a checks-issued basis. Ton will
note that the expenditures on this basis by the Works Progress Adminis-
tration were $30,000,000 for the first ten days of August and that the
total expenditures for all agencies using emergency funds was $45,000,000.
Some of the agencies, such as the Civilian Conservation Corps, and the
river and harbor and public highway work should fall off pretty fast
during this fiscal year as expenditures for account of these items
have now been shifted to the regular expenditures of the Government.
#1th reference to the proposed financing in September, there
is enclosed a revised estimate of the cash position for the months
of August to December, both inclusive. You will note that this con-
templates continuing the present Treasury bill program through to
December 15 with total maturities between December 16th and 20th of
$500,000,000. It also includes Treasury bill issues of $100,000,000
between September 16 and 30, and $200,000,000 in October, & total of
$300,000,000, to mature in March, 1938. On the basis of these estimates
and program, our balance will be about $644,000,000 going into December.
We can borrow $600,000,000 on notes in December, leaving our balance
$959,000,000 going into January.
This is 8. very flexible program and can be changed at any time
to meet the situation. It may be that you will decide in November
to issue an additional $100,000,000 of bills for maturity in March.
On the basis of our present budget estimates there will be approxi-
mately $500,000,000 in excess revenue over expenditures in March and
it -ould do no hare to have at least $400,000,000 of Treasury bills
maturing at that time. I en making this statement on the assumption
that $455,000,000 Treasury notes maturing on March 15th will be re-
funded into other notes.
There is also & maturity of $277,000,000 Treasury notes on
February 1. 1938 which could be refunded in connection with the
December 15 financing or we could have four Treasury bill issues at
$50,000,000 each in January and pay the Treasury note maturity off
in cash, using $77,000,000 of our balance. Such Treasury bills
would mature in June. It would probably be necessary to put another
$100,000,000 on top of this for maturity in June because our present
estimates show that we my have as much BE $400,000,000 excess revenue
in that month. There 1s, however, a Treasury note maturity in June
of $618,000,000, but again I an assuming that this will be refunded.
Regraded Unclassified
116
4
For your information I AM enclosing the following statements:
I. Estimate of cash position for the period August
to December. both months inclusive.
II. Statement showing the present Treasury bill program
through September 15 and dates on which they will
mature in December.
III Statement showing total amount of Treasury bills which
will be outstanding on various dates on the basis of
the program set out in the cash position estimate.
IV Statement showing the public debt maturing between
September, 1937, and the end of June, 1938, 03-
clusive of the regular weekly Treasury bills.
V Statement showing public debt maturities on quarterly
tax-payment dates (with intermediate dates noted)
including the present Treasury bill program of
$500,000,000 but excluding the regular Treasury bill
program and the special issues to trust funds, etc.
VI Statement showing the prices and yields by days from
July 28 to August 21, 1937, of certain issues of
Treasury bonds.
VII Statement showing the prices and yields by days from
July 28 to August 21, 1937, of certain issues of
Treasury notes.
VIII Prices and discount rates of Treasury bill issues
since July 14.
In connection with statement No. V. you will notice that
September 15, 1940, 1941 and 1942, and June 15, 1942, are all open
dates. Present indications seem to point to a note issue of between
three and five years. The March, 1942, 1-3/4% notes selling Saturday
at 100-10/32 to 100-12/32 on & basis to yield 1.67%, indicates the
difficulty of issuing a five-year note on the basis of these prices
unless we go above 1-3/4%. but in view of the probability of only
an exchange issue we will not have to allow as much leeway as if we
were raising a substantial amount of eash in addition to the refunding
The market has declined substantially during the past week, regained
Regraded Unclassified
117
- 5 -
some on Saturday, but unless it comes back on the announcement next
week that no new cash will be required in connection with the September
15 financing, it looks more like a three or four year note at 1-3/4%
For your further information there are enclosed the usual
statement given to you at the close of business each day, showing the
gold in the general fund, the debt increase since December 22, 1936
and the working balance, and the daily sheet showing the prices and
yields of Government securities at the close of business August 21.
Faithfully yours,
DWB
Regraded Unclassified
considential
118
OFFICE OF THE SECRETARY OF THE TREASURY
COMMISSIONER OF ACCOUNTS AND DEPOSITS
August 21. 1937
TO THE SECRETARY:
GOLD
ESTIMATED GOLD IN GENERAL FUND BALANCE:
Free gold
$ 157,900,000
Held to retire Nat. Bank Notes.
...
47,844,000
Increment resulting from
reduction of gold dollar.
.....
141,000,000
Inactive (Policy ennounced 12/22/36)
1,306,500,000
1,653,244,000
FUNDS SCRROWED SINCE DEC. 22, 1936:
Treasury Bills. $1,100,000,000
do
(retired).
600,000,000
500,000,000
Other borrowings:
Try. notes dated
(
6/15/37
.....
853,000,000
..S.Savings Bonds.
411,000,000
Special Issues
..
1,268,000,000
2,532,000,000
Less debt retired.
370,000,000
2,162,000,000
Increase in gross debt
since Dec. 22, 1936
2,662,000,000
WORKING BALANCE - CLOSE 8 BUSINESS AUGUST 20, 1937:
Federal Reserve Banks
........
$ 150,157,000
Special Depositaries
........
650,283,000
Total Working Balance August 20, 1937. $ 800,440,000
DWB
Regraded Unclassified
ESTIMATE OF CASH POSITION
August - December
1937
(In millions of dollars)
1937
Aug.
Sept.
Oct.
Nov.
Dec.
Total
Balances at beginning of periods
734
804
819
784
644
734
...
Receipts:
General revenue
430
800
365
425
775
2,795
Unemployment trust fund
55
40
40
40
40
215
U. S, Savings bonds
35
30
30
30
35
160
Treasury bills (special)
150 Dec.
200 Dec.
100 Mar.
200 Mar.
-
-
650
-
-
-
600
600
Treasury bonds and notes
-
Sale - R.F.C., C.C.C., H.L.B., notes
75
-
-
-
75
-
Total available
1,529
1,924
1,454
1,279
2,094
5,229
1.
Expenditures:
General
305
310
325
325
310
1,575
180
180
180
180
910
Emergency
190
Interest on public debt
20
160
70
10
155
415
65
-
-
25
-
90
Special transactions
Debt redemptions
20
380
20
20
515
955
110
75
75
75
75
410
Gold purchases
-
-
-
15
Investment
15
-
1,105
670
635
1,235
4,370
Total expenditures
725
Balances end of period
804
819
784
644
859
859
Refunding operations:
Treasury bills:
Regular
200
250
200
200
250
1,100
500
850
Special
350
-
-
-
-
817
-
817
-
Treasury notes
-
200
1,417
200
200
750
2,767
Treasury
Accounts and Deposits
August 21, 1937
120
II
Special bills for December
Issued and which mature December 16
$100 M
If
If
If
If
If
17
100
If
If
II
If
If
18
$50 M
-
If
If
If
#
If
18
50
-
To be issued on 8/25 and mature Dec. 18
50
150
II
If
II
If
9/1
If
If
If
20
50
Il
II
If
If
9/8
If
If
If
20
50
If
If
If
"
9/15
II
If
If
20
50
150
Total special bills for December
500
Regraded Unclassified
121
III
Treasury Bills Outstanding
on basis of program set out
in Cash Position Estimate
August 18
$2,603 M
September 1
2,703
September 15 (8th and 15th)
2,803
September 18 ($350M maturing 9/16, 17 & 18)
2,453
September 30 (22nd and 29th)
2,553
October 31
(6th, 13th, 20th and 27th)
2,753
December 20 ($500M maturing Dec. 16,17,18 & 20)
2,253
Treasury bill payment dates:
Sept. 1 - - 8 - 15 - 22 - 29
=
$ 250*M
Oct. 6 - 13 - 20 - 27
If
200*
Nov. 3-- 10 - 17 - 24
=
200'
Dec. 1 - 8 - 15 - 22 - 29
II
200'
e In proposed program.
- Not in program.
August 20, 1937
Regraded Unclassified
122
IV
Maturing Debt
September, 1937 - June,-1938
(Exclusive of regular
weekly bills)
Treasury
Special
Total
Notes
Treasury
Refunding
Bills
September 15, 1937
$817 M
$350 M
$1,117 H
December 15, 1937
-
500
500
February 1, 1938
277
-
277
March 15, 1938
455
300
755
June 15, 1938
618
-
618
August 20, 1937
Regraded Unclassified
123
V
TREASURY FINANCING
(Exclusive of regular Treasury Bills and special
obligations issued directly to trust funds)
(In millions of dollars)
March 15
June 15
Sept. 15
Dec. 15
Total
1937
Bills
-
-
351
Notes
500
1,668
-
-
817
-
1938
All notes
277
(2/1)
618
596
-
455
1,945
1939
All notes
942
1,294
427
526
3,189
1940
Notes
1,378
N
738
-
N
737
3,206
B
353
1941
Notes
677
N
504
-
N
204
Bonds
2,764
545
B
834
(8/1)
1942
Notes
426
-
-
-
426
1943
All bonds
-
454
1,401 (10/15)
-
1,855
1944
-
-
1,519 (4/15)
-
-
1,037
2,556
1945
#
#
-
-
1,214
-
1,214
1946
-
.
489
1,855
-
-
2,344
1947
.
If
-
-
759 (10/15)
-
759
-
1948
-
-
1,223
-
-
-
1,223
1949
e
-
.
-
-
-
2,278
2,278
1950
-
-
-
-
-
1951
.
.
-
1,627
755
-
2,582
1952
-
-
-
-
-
1953
-
-
-
-
-
1954
-
-
-
-
-
1955
#
#
2,611
-
-
2,611
-
1956
-
#
-
-
982
-
982
10,542
8,277
7,302
5,282
51,403
ACCOUNTS AND DEPOSITS
August 20, 1937
Regraded Unclassified
124
TABLE Va
23
COMPARATIVE OBLIGATIONS
or MAJOR ORGANIZATIONS
THE EMERGY RELIEF
BY PERIODS
APPROPRIATED ASTS a 986, -
EXPRESSED (# MILLIONS
CONSOLIDATED
THA -
DISTRIRUTION ST MAJOR DOGARIZATIONS
FORM
INCREMENT
PRINC
M.
ENTEREST
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PUBLIC REASO
excessive of
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Regraded Unclassified
vI
PRICES AND YIELDS ON
VARIOUS THEASURY BONDS
125
July 28 to August n, 1937
Coupon rate:
2-3/45
3%
3-1/8%
2-3/65
3-1/9%
2-1/25
fall = maturity date:
1945-49
2-3/45
1946-48
3%
1946-49
2-7/05
1948-51
2-3/45
1949-52
1949-53
1951-54
1951-55
1955-60
1956-59
Frices:
1937
July 28
103.06
104.25
105,18
101.18
105.16
98.31
100.16
103.18
101.09
100.18
29
103.11
105.02
106.20*
101.19*
105.18*
99.02
100.18
103.16
101.16
100.15
30
103.12
104.30*
105.21
101.17
105,20
99.01
100.17
105.18*
101.16
100.14
31
103.09"
106.30
105,21
101.18
105.16*
99.02
100.18
103.20
101.16
100.14
Aug.
2
103.10
104.30
105.21
101.15
105.14
99.00
100.15
103.19
101.14
100.14
3
103.15
104.27*
105,25
101.17
105.13*
99.00
100.18
103,19
101.14
100.13*
4
103.00
104.28
105.24
101.19
105,19
99.01
100.15
103.19
101.14
100.18
5
103.11
104,28*
105.21
101.19
105.20
99.00
100.17
103.80
101.16
100,16
6
103.10
104.29*
105.22
101.17
105.19*
99.04
100.18
103.21
101.14
100.16
7
103.09'
104.26*
105.24*
101.20
105,18*
99.04
100.20
103.20*
101.17
100.17
9
103.11
104.31
105.26
101.21
105.19*
99.04
100.21
103.20*
101,15
100,16
10
103,11
104.31
105.20*
101.20
105,21
99.01
100.19
103.21
101.15
100.14
11
103.08*
104.25
105.16
101.14
105.14*
98.51
100.14
105.16
101.09
100.10
12
103,06
104.16
105.17
101.06
105.08
96.25
100.08
103.08
101.04
100.01
13
103.00
104.11
105.09
101.00
105.05
98,28
100.00
103.09
101.01
100.00
14
102.28
104.12°
105.13
101.03*
105.01*
98.25
100.04
103.08
100.31
100.00*
16
103.00
104.14
105.11*
101.05
105.07
98,26
100.04
103.10
101,03
100.06
17
102.29
104.14
105.14
101.02
105,04
98.24
100.05
103.07
101.04
100.05
18
102.29*
104.12
105.11
101.03
105.00
98.54
100.02
103.05
101.00
100.02
19
102.22
104.06
105.07
100.28
104.87
98.19
99.28
103.00
100.86
99.28
20
102.09
104.05
104.29*
100.10
104.14
98,08
99.15
102.16
100.10
99.12
21
102.14
104.02*
105.00
100.15
104.10*
98.06
99.24
102.18
100.18
99.17
- B14 price - no sale.
Tielda [to call date):
1937
July 28
2.317
8.399
2,436
2,581
2,502
2,598
8,706
2.695
2.782
8,720
29
0.296
2.364
2.419
2.579
2.596
2.589
2.701
2,700
2.769
2.718
30
2.298
8,379
8,413
2,584
8.590
2.592
2.704
2.695
2.769
2.720
31
2.305
2,379
2.413
2.580
2.602
2,589
2.701
2.689
2,767
8,750
log.
2
2.300
2.379
2.412
2.591
2,607
2.595
2.709
2,692
2,771
8,720
3
8.287
2,390
2,397
2,564
1,610
2.595
2.701
2.698
2.771
2,725
4
2,304
2.306
2.401
2.579
2,593
2,592
2.709
2.691
2.791
2.785
5
2,295
2.386
2.412
2.577
2,590
2.595
2.703
2.689
8.767
2.716
6
2.300
2,382
2,408
8,584
2.598
2.583
2.701
2,687
2.771
5,716
7
2.304
2.393
2,400
2,574
1,595
2,583
2.695
2.689
2.765
2.714
9
2,296
2,374
2.398
2,570
2,592
2.583
2.693
2,689
2,769
8.716
10
2.296
2.374
2,415
2.574
2.587
2.592
2.698
2,687
2.769
2.720
11
2.307
2,396
2,450
2.594
3,607
8,598
2.711
2.700
2,782
2.729
12
2.315
8.431
2.485
2.620
2,684
2.616
2.726
8.720
2,793
8,748
13
2,340
2.450
2.456
2.641
2,633
2.625
2,750
2,723
2,800
2.750
14
2.357
2.446
2.440
2.630
2.644
2.616
2.739
2.720
2,805
5.750
16
2.340
2.438
2,448
8,624
2,626
E,713
2,739
2.715
2,796
2.737
17
2,353
8,438
2,435
3.634
2,635
2,619
2,736
2.723
2.793
2.759
18
2.355
2.445
2,448
2.631
2.647
2.619
2.744
2.728
2.802
8.746
19
2.302
2,468
2.463
2,654
2,661
2,634
8,761
2,742
2,016
8.789
to
3.436
2.480
2.501
2.715
2,699
3,667
8,795
2.764
2,652
3.798
21
2,418
1,404
2,469
2.699
2,710
2.673
2,772
2.779
2.654
2.782
Regraded Unclassified
126
TABLE VIA
26
COMPARATIVE EXPENDITURES
of MAJOR DREAMIZATIONS
THE EMERGENCY RELIEF
or PERIODS
APPROPRUTION ACTS of 41937
EXPRESSED IN MILLIONS
CONSOLIDATED
DISTRIBUTION
"
TETAL EXPENDITIMES
WAJOR
CNGARIZATION5
AGRICULTORY
FEMER
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issue
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your
1257.0
VII
171.4
W.I
7.1
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I
200.1
40.0
45.9
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$7.4
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1.1
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38.4
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-
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48.4
186.7
111.0
$7,7
185.0
14.0
475
BULF
INJ
12F-F
40.7
404.1
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!
4,201.1
128.1
&
--
à
4,001.3
187,3
3
1,087,1
24.6
8,427.3
W.W.T.T
1,800.0
Regraded Unclassified
VII
PRICES AND YIELDS OR
VARIOUS TREASURY NOTES
127
July 28 to August 21, 1937
Coupon rate:
1-5/8%
1-1/2%
1-1/2%
1-1/2%
1-3/8%
1-1/4%
1-3/4%
Maturity date:
Mar, 15, 1940
June 15, 1940
Dec. 15, 1940
Mar. 15, 1941
June 15, 1941
Dec. 15, 1941
Mar. 15, 1942
12 Prices (everage between bid and offer):
1937
July 28
101.01
100.21
100.19
100.16
100.01
99.24
100.26
29
101.02
100.22
100.19
100.17
100.02
99.25
100.27
30
101.02
100.22
100.19
100.17
100.02
99.25
100,27
100.26
31
101.01
100.21
100.19
100.19
100.01
99.24
Aug. 2
101.01
100.20
100.18
100.17
100.01
99.25
100.25
3
101.00
100.20
100.18
100.16
100.01
99.25
100.25
4
100.30
100.19
100,18
100.16
100.01
99.84
100.84
5
100.31
100.20
100.18
100.16
100.01
99.25
100.24
6
101.01
100.21
100.19
100.17
100.02
99.26
100.24
100.24
7
101.01
100,21
100.19
100.17
100.02
99.27
9
101.01
100.21
100.19
100.17
100.02
99.26
100.24
10
101.02
100.21
100.19
100.17
100.02
99.26
100.24
11
101.01
100.20
100.18
100,16
100.01
99.25
100.22
12
101.00
100.19
100.17
100.15
100.00
99.23
100.20
13
100.30
100.19
100.16
100.14
99.31
99.22
100,19
100.19
14
100.50
100.19
100.16
100.14
99.31
99.22
16
100.20
100.17
100.15
100.00
99.25
100.20
100.31
17
100.31
100.20
100,17
100.15
100.00
99.25
100.80
18
100.19
100.16
100,13
99.31
99.21
100.19
100.30
19
100.26
100.14
100.11
100.09
99.27
99,14
100.14
20
100.22
100.09
100.07$
100.01
99.24
99.08
100.00
100.11
21
100.25
100.12
100.09
100.03
99.27
99.11
Tielda:
1937
1.320
1,358
1,367
1,509
1.567
July 28
1,226
1.267
1.213
1,256
1.349
1.358
1,302
1,550
29
1,380
30
1.320
1,349
1,358
1,302
1,560
1.213
1.256
51
1,224
1.267
1.319
1.349
1.367
1,305
1.569
1,224
1.277
1.349
1,367
1,302
1,574
Aug. 2
1.329
1,328
1.358
1.367
1,302
1,574
3
1.235
1.277
4
1,328
1,358
1,366
1,309
1,581
1,259
1,288
1.277
1,358
1.346
1,508
1,681
5
1.247
1.588
1,349
1.358
1.294
1.581
1.222
1.265
1.319
6
1,281
1.265
1.318
1,548
1,358
1.287
1,581
7
1,221
1.265
1,348
1,358
1.291
1.580
1.318
9
1,318
1,348
1,358
1,291
1.580
10
1.208
1.264
1.326
1,357
1,366
1,302
1.594
11
1,220
1,275
1,232
1.886
1.366
1.375
1.317
1,608
1,337
12
1,346
1,375
1.383
1.324
1,615
13
1.256
1.286
1.346
1,383
1,321
1.615
14
1,255
1.286
1,374
1.274
1.365
1,375
1,313
1,608
16
1,242
1.336
1.608
17
1.242
1.274
1.336
1.365
1.375
1.313
18
1.346
1,383
1.583
1.352
1.615
1.854
1.285
1,417
1.382
1.650
19
1,341
1.393
1,419
1.303
1.429
1,690
1,392
1,486
1,438
1.346
1,427
20
1.412
1.417
1.407
1.672
1,315
1,364
1.472
21
Regraded Unclassified
128
VIII
TREASURY BILL ISSUES
July 14 - August 18, 1937
Date
No. of days
Average Price
Average Rate
SHORT TERM
July 14
155
99.819
.419
21
148
99.837
.397
28
142
99.853
.372
Aug. 4
135
99.915
.228*
11
129
99.924
.211*
18
122
99.927
.216*
* Payment by credit in war loan account.
LONG TERM
July 14
273
99.610
.514
21
273
99.620
.502
28
273
99.632
.485
Aug. 4
273
99,646
.467
11
273
99,638
.478
18
273
99.652
.459
Accounts and Deposits
August 23, 1937.
Regraded Unclassified
RISDS APPROPRIATED AND ALLOCATED FOR RECOVERY AND BELIEF, EXPENDITURES THEREFROM.
AND UNEXPENDED BALANCES
AUGUST IS, 1997
OFFICE OF THE SECRETARY OF THE TREASURY
- -
Appropriation
- of -
Daily Statement of the United States Treasury
- -
Two
Fines/ the
-
-
- Fisher
Remember
-
mile
E
IFMI
I
COMPILED FROM LATEST PRIPED REPORTS FROM TREASURY OFFICES AND DEPOSITANCY
I
I I
- -
AM NUMBER
provides Avia
A i
-
- Test. HM.
-
4ND -
AUGUST 19, 1937
129
----
-
-------------------------
-------------------------
CURRENT ASSETS AND LIABILITIES
----
---
GOLD
10.02.20
-----
----
-
--
-----
----
-
ASSETS
LIABILITIES
----
---
Bold
$12,807,784,142.53
fiuld certificates:
-
Outstanding (semile of Treasury)
$2,902,142,889.00
129
----
Dald perilicate of non-
el
2020
NEWER Federal Excerve Eyalem
0,010,442,436.78
Bedamytion Banarvé
M
10,121,001.75
summer
---
Gold PRODUCTS
150,009,430.95
I
-
!
I
I
.
-
---
----
-
I
of
-
$
I
- M
----
Enchanger vishOlastion final
1,600,000,000.00
smen
Mail
NEO
I
10,854,746,418.46
Quit la created fandi
-
Issure
a---
Balance of
EMIGO
resulting trais -
I
-
EMB
-
is weight of
the cold dellar
140,001,462.07
----
is working balance.
5
1,642,047,724.07
----
---
......
first
-
---
MADH
Total:
13,837,394,142.63
Total
12,327,394,142.53
de
---
-
(*)
-
SILVER
---
:
-
Fruis
ASSETS
LEABILITIES
-
confirm
---
----
-
Diver
$860,456,818.00
contificates unternanding
$1,300,728,994.00
Bluer dellars
COMMUNITA
501,112,807.00
Treasury services of 1890
1,171,722.00
Billower to grand food,
42,670,608.09
IMMES
UNITED
-
communits
.
Total
Total
1,374,571,325,09 BY
la - for the [ pour la - you very - of the - Finance
M - - - Extend lamit habi una - - ast - Inc. a. las the - - - in point mir
Insury - of - - - - - - - - - - - signature at -
- - The the under privalled - anvided M M - Feirnd Mit - and - Alip 26. NM.
-
Der
GENERAL FUND
I
1
Peleral
Baylar
$
Name
the
Line
- - is the - al Fee IL - - - as - - - Company will etce
in
the
1
E
1
Massismed
M
the
to
is
the
AMETS
Additional
-
for
new
1
-
-
1
L,
-
A/T
-
fundel
their
et
expensive
-
-
*
-
I
Suid (M abrie)
$1,642,047,734.07
Treasurer's checks
$11,406,014.08
-
-
-
tax.
-
-
-
the
I
-
I
-
I
E
-
the
Place
Birer (na slowe)
42,470,000.00
Degistration of Deverstant efficers:
- a - - the - Appropriation Art. Emil - parti, MÁ - of - - The of - 187. - via Bermute - - Finance Corporation is
Total States
3,000,000.00
Fort Offive Department
2,294,334.04
-
-
de
Factoral
name
Federal Belorve siles
13,947,770.00
Board of truntees, Fortal Buvings Systems
-
Instruction
-
at
units
-
-
=
us
-
-------------------------
a
Putite
Warks
ON
18
1
-
to
la
-
14.
Federal Reserve health tates
166,750.50
-
and
Pare
-
-
-
5-parents reserve lawful many
59,300,000.00
1
relined
3
in
-
IL
et
I
Material bank series.
210,261.50
Other Reposita
7,367,000.77
de
Transary.
1
I
-
-
of
1
=
-
1
-
name
-
-
if
-
-
companied
M.
The
Order airer neta.
of diaburating
celle
I
-
-
-
the A problems Art - all u - ADDRESS BE And business) R use, - a the (H) he M the - comm M - nist - - - - siel preferent to - provided Fail is is Mine visits. Envirory
Misor enla
etc.
66,816,928.74
Rev believe That value)
$02,800,234.46
Depatis Der
an
USA
I
I
a
la
-
If
-
I
-
instituted
-
to
-
7
-
-
-
-
line below value)
000,410.20
Redemption at - mank 15-
vis.
DETAILS OF REVOLVING FUNDS INCLUDED IN EXPENDITURES ON PAGE 2
2,792,384.40
personal not lawful manager)
405,460.00
in:
Presidented anchange, etc.
19,200,007.70
2
Pederal Basarva banks.
105,502,938.97
TM -
Timal pear -
depositarios account of salse at
Belance whey
100,084,208.02
assoridas
658,283,000.00
IDACTIVA gold 1A8
-
a - -
Payment
I
No
and the bank depositation:
alown)
I
To end of Descrer Culted States
12,048,209.48
Increment se gold (&si
To of other Government afters.
29,873,708.26 29,
above)
144,001,482.97 482.
- Dependen
and
-
-
Foreign
(aliver),
I
-
etc.
TEMIS
ILBLINE
CALNED
et
y
To of Tressurer United States
1,320,332.37
---
Lease
-
s.g.e
-ana
from
-------------------------
To credit of eiber Instaal altors,
1,009,098.42
Working belazire
1_082_204_418_44
Form
-
-
-
Fullippine treasury.
To and di Trassurer Italma
1,082,496.75
2,842,001,040.02
tom - et -
I E Dear
Total
2,002,145,215.04
Total
OUTSTANDING FEDERAL RESERVE NOTES, FEDERAL RESERVE BANK NOTES,
AND NATIONAL BANK NOTES
RECEIPTS AND EXPENDITURES THIS DAY
- The
result a
ASSIST -
- - taxt
- Tower
fai -
- -
-
- creative
I
1
I
(nies
- - - -
-
taxis
Internal revenue
General
Patient - -
been w.
Departmental
$2,801,211.70
Feland - web -
I
internal
1,782,338.11
Insurest - public date
283,519.90
I
soame
Valuel ecrickment iss
4,665.87
AU wiber.
6,800,606.70
2
- within - - . Int - the yas - Rate . Principal - - - - la - - - - en Theye - Doe -
Taxas sale Bontal Security All
Reservery and patied
MM.
-
IN
I
-
-
-
€
1
Customs
Bevelving hade.
1,404,055.22
-
I
of
I
-
-
1
by
I
-
-
I
-
the
I
1
I
I
-
Line
Citized
-
-
-
1
-
I
242,199.27
17,604,539.49
TRANSACTIONS AFFECTING THE CIRCULATION OF FEDERAL RESERVE NOTES,
11,503,674.43
FEDERAL RESERVE BANK NOTES, AND NATIONAL BANK NOTES
Truel apprecia, es está. etc.
946,710.74
Truel increment or quid,
200,025.49
Fuldis debt.
1,144,522.40
Fulitie dist.
759,037.25
-
I
( 1
- - -
- form
Balances previous dat.
Bulance unler lass above)
The -
1
- -
THAL
2,600,894,871.26
I I
- - -
i
I
-
[
Res
-
har
-
I
I
1
va.
I
I I I I
---
intere
Ber
Blue Furchase Art. of 1994 AND the same) medibe manal he the the - the President's predamation daint sig. . 164.
Nine 1-Tale new represente ina the of sincer event se the eat of Lie Che valor
and
LOCARD
-
case
5
Nome 1-Th amount far the mill of distrurging Sim and certain agrodits wise -
---
- -
Regraded ed
3
COMPARATIVE ANALYSIS OF RECEIPTS AND EXPENDITURES
COMPARATIVE ANALYSIS OF RECEIPTS AND EXPENDITURES-Cominued
AUGUST 19, 1937
ARGUST 19, 1987
Corresponding
This -
period last
Fiscal 7087 1935
pariod Recal
Corresponding
This month
PM FROT
petel last
Paral
7
missing -
1831
GENERAL AND SPECIAL ACCOUNTS
racer ACCOUNTS, INCREMENT 0% GOLD, ETC.
Remiste
listernal PAYMENT
Trust amota
les
PLTANKK
Insurent reville trea in the weight of
Internal
406,700,437.01
the gold dellar
Unjust resident tax
148,000.12
100,004.36
Respiration
37,384.01
ARE
Taire under Social Becurity Art.
Unstiployment fund
4,694,670.41
Every
Taxe - and Unly employees
19,01%,50
31,157.85
Customs
Total
Missing
Primode a severities:
Truel
chiligaticas
0,511,102 W
Transactions in shecking of
All other
1,20,100.00
17,000,202.00
11,014,467.33
agreedes (net), etc.
Parama Used inlls, etc
$15,000.00
1,026,082.07
$17,341,256.76
2,201,197.28
Chargeable against in gold,
1,787,501.34
7,735,800.41
Melting - etc.
Other -
17,378,416.00
Paramets to Voloral Receive lants
20.140.74
VILIMY
Federal Act, as
THE remine
720,197,518.84
Far of reflocal has soles
571,000.00
Comployment trust fred:
1,030,546.90
6,000,000.00
0,000,000.00
Date
Other
4,400,000.00
69,247,000.00
39,400,201.74
78,087,001.71
hair milings
Old-ego maine amount
200,000.00
has highways
Investments end tranders (net)
11,477,716.23
Bas and harber and find
Seont payments,
*1,000,001.00
DONO
23,172,097.15
14,857,254.89
Refired retiresant -
Invistion projects
2,134,120.83
l'erante -
426,640.01
$17,001.00
and (and)
1,716,638.13
10,000,001.00
Nated detrimes
19,003,000.00
Benndit payments.
1,942,107.1)
Balinad Internal del.
199,020.02
EMP
Redal Seally Art.
10,770,738.17
Total
Daind of Columbia (II,
2,000,000.00
National
5,600,000.00
Extre of resiple or credita
Artir
23,071,477.01
Exeme of expenditures
22,477,146.56
T0,107,224.90
$2,764,237.27
Nary
20,05,000.00
74,204,001.54
Administration
PUBLIC DEBT ACCOUNTS
01,200,200.00
Agrimilural Program
32,100,111.00
Civilian Commission Carge
06.011.167.00
27,172,661.40
Market operational
fare Crét Administration
17,594,224.04
I
$1,472,496.00
72,367.61
Turner Vality
LUCH
Treasury bübe
501,256,000.00
limit M the date
18,650,516.00
Treasury ming securition.
030,122,000.00
42.20
fature
United Braine missings bonds (Including un-
42.28
-
1,906,116.00
classified
REVENUE
26,754,711.30
las os fere
4,713,775.49
700,190.47
Bubiniai
11,008.05
110,009,711.20
Bulliotal
Adjusted aervices beüde
$40,530.00
X.470,500.00
H. Bannary not wast
Exchange:
Agricultural and
Treasury arter
Formal land backs,
9,748,428.00
Transury India
Box
*77,964.97
Putitle (including work millef):
43,736,001.80
projects."
Public highware
3,203,774.02
Juner and harfer - and fund
14,476,214.78
formal meriow:
REVIEWE'T
Comployment truet foid
Hirst United Administration
30,181,000.00
Ild-up name smoot (nther)
29,247,000.00
Works Program Administration
MT.136.73
Railmed - address
41,000,000.00
10,215,000.00
REMIT
12,000,000.00
AM wither
AM - lusse -
13,499,016.77
17,10,000.00
Civil service intirest Fund (motes)
19,000,000.00
10,000,000.00
loan ayesem
Fursign Service minimist foid (paire)
71,300,000.00
169.42
Canal & had
367,000.00
30,000.00
Energency bousing
Alasks Railmad beforment ford (sutes)
489,000.00
kmin
Federal Houng Administration
740,811.00
185,000.00
Administrative
Misestance
JEMES
Subtotal
01,181,000.00
4,467,600.00
254,872,000.00
some
Administration bis Indovidual Belovery.
30.00
NOT
17,220.10
Total pulle delai
401,676,230.00
Expenditions
Reveiving Ficendar
Markst spreations
Agricultural NAME:
Cashi
Commadity Credit Corporation
Treasury $
Pare Credit Administration
Certificate of
41,200,601.83
264,200.00
363,772,099.00
Treasury petas
76,200.00
Private works
431,120.00
Treasury bonds
178,250.00
and grants to States, eximinal-
1,132,400.00
V. etc.
United States writings lands
Adjusted arrie tands
2,544,211.75
10,000.00
Lotor -
744,173.17
First Liberty biods
5,040,600.00
37,645,600.00
Fourth Liberts hunda
142,050.00
308,134.00
Export- Import Bank of Weshington
179,376.36
Postal Barlogs tends
$47,630.00
1,125,500.00
Finance Corporation
680 00
1,27,000.00
direct Indian and expenditures
46,220,541.01
Other dibs Hage
2,030.00
-
National lank and Federal
26,476.25
20,764.72
CARD
Subtotal
2,012,417.53
back -
7,448,000.00
IV. Transfers to truel - MAI
143,048,832.00
name -
47,000,000.00
Ballmad retirement
20,000,000.00
£3,000,000.00
Entange
Adjusted error certificate Fund
30,000,000.00
Trimury total
Conversment employees' Ender
Treasury Incode
(United Finance starr)
72,216,106.00
44,735,200.00
Subtotal
Exhibital
$1,000,000.00
eirlas:
V. Dels relimants (sinking hind, atc.)
Adjusted service certificate had
1,100,000.00
39,540.00
Unemployment true tund
13,000,000,00
2,000,000,00
50,000,000.00
Tital expenditions.
Dril services - famil (avise)
7,900,000.00
Foreign Berries - first
1,700,000.00
1,900,000.00
1,700,000.00
- uf
Canal returned find
18,000.00
14,000.00
24,000.00
46,000.00
lane of rependities
15,000.00
46,000.00
258,018,942.40
2,412,160.00
16,766,000.00
4,192,700.00
SUMMARY
11,818,000.00
Came of
Total poblic dalis expenditions
Lase público delta minimols
205,016,862.00
Exem of
20,000.00
Name of
Kama of expenditions (estuding pulide dabi
272,190,200.10
Tran amounts Increased - ets, of
(-) if expecitions (4)
Market spendime.
(+) - decrease (-16 debb
+74,402,958.00
Mills.
+384,750,603.00
Certificate of
-254,000.00
-70,000.00
- 481,150.00
-231,766.00
Law estimal lack colé
2,015,645.00
Tennery Biller
-1,150,400.00
Bonds.
+94,677,840.01
Tvtal - of expendions
Other Nebt
-24,832.05
-42,444.50
-67,000.50
Imme (+) or detram (-) a pin ad
National Seni - and Total Namerro taxis
DANA
-7,266,000.00
Internal (+) er dama (-) in the deld
Public dela si beginning of - - yes
Púle delà Mile date
AMERICA
Special -
-22,200,001.00
+2,60,000.00
------------------------- THE
a
Total
the de Additional 1946 of of - which work. vit las dues M - is the - Releced for the al est the SMAL et years expenditions Instituted appearing today - "Regrary P. of On MM daily valid Treasury medium Mas
"Pate outer The Water-Ad apelitions rige." - this year UST miy Boulder Caugue project, alter refamation for that your relat being 1 Indisded la
. Owned this siglio to the vide as dipling ha the year 1987 are instaded is "Departmental" "Berrury and Halmunt
Income of
adount be the hole Part via Office expended Impartant by the la 0. Us D. il, the Marition few you Commission 1949 farm permal - redised M the Ny net of Issue - 7a, and 1930 (40 of the transfer of that
the
of la # milk - E. Mariliana 5. Marythe Complete APR classified - die I M "Department", and BILL to & ($89). 7 - the Time ING
lase of (dident).
Details MY sim in expelmentary material - 4.
Regraded Unclassit
OFFICE OF THE SECRETARY OF THE TREASURY
130
Daily Statement of the United States Treasury
COMPULED FROM LATEST PROVED REPORTS FROM TREASURY EFFICES AND DEPOSITANIES
JULY 31, 1937
CURRENT ASSETS AND LIABILITIES
GOLD
ASSETS
-
-
$12,444,662,870.14
Seld certificates
(stable if Treasury)
Buid certificate of time-
resure Federal tystem
6,018,442,436.78
Redemption find-Pateral
dates
0,251,011.75
Onld resurre
156,030,430.95
his - Code -
! 1 = I I V 1 I
Town: - - ONE - - - "
- - . -
Enclange fand
1,800,000,000.00
Unit b general bad:
Balance of Increment
resulting from no
ductime in weight of
de avid dollar
b working balance
1,368,146,711.68
Tital
12,444,002,520.14
Total
12,444,062,670.14
SILVER
ASSETS
MARILITIES
Biver
$802,058,621.73
Süver internating
$1,321,487,722.00
Street dellars
805,271,314.00
Treasury sitos of 1890 extetanding
1,171,922.00
Siner is tax
44,600,491.73
Total
1,207,300,135.73
Total
1,387,360,135.73
GENERAL FUND
ASSETS
LIABILITIES
Gald las shore)
$1,528,146,711.05
Therefore's shecks
$10,681,005.08
(as above)
$4,000,493.73
Depisita of client
Ratied Diates
2,032,708.00
Frat Office Department
2,743,079.38
Faderal Baserve suive
14,286,830.00
Board of Partal Garings Rystem
Pederal bank 200M.
257,047.20
d-parted FRESTYA, lawful BUSINY
AD,300,000.00
Mational bask soles
$41,67L.50
other deposite
0,008,575.64
Subsidiary sur via
$,623,004.05
deta of disbursing
allows als.
70,702,708.37
Minar esta
Since bullies (mail value)
369,655,076.43
Depante to:
tradies nin
Redemption d' national bank sales (&-
de
3,472,520.04
personal net lawfel
408,460.09
also
22,041,420.53
Deposite for
Federal Bearric
247,092,164.65
Balance tobacco
179,620,240.03
Special departacies Amtil at nales of
Gerernment securities
200,015,000.00
Instite [M]
National and other Sank
above)
To nelli of Transine Extrad
12,397,045.42
Increment se enter (sa
To credit of siber International
10,693,986.27
above)
Events degistration
To crudit of Treseure Biain
200,673.58
ser sole 1
T= outh of older
2,230,347.40
Value balance
Pullippine treasury
74 credit et Treasurer United States
1,064,787.89
2,636,004,384.86
Total
Total
2,818,724,625.08
RECEIPTS AND EXPENDITURES THIS DAY
Reseipts:
Internal revenue
General:
$066,272.12
Departmental
$5,410,251.21
Insure tax
insural
10,007,400,36
External as public debt
1,456,025.87
1,943.00
AG other.
0,402,878.22
TAX
Texas under fedal A/L.
1,849,403.01
and relief.
9,354,947.36
Tun - corries and their -
Revelving bade
Name
100.02
Transfers - trast ate
1,008,279.85
remigis
273,461.77
56,962,940.12
15,432,001.12
Trul - auf -
1,018,786.06
Trust securita, increment en sis.
39,302,836.31
Palis
6,899,102.30
Febilis desit
1,101,084.25
Balance perform day
of
Belance swing Date above)
2,634,004,284.83
Total
2,070,603,544.07
Total.
2,070,005,548.07
- of oncia
the She Parkam Ans M Himale May and the - released for Man aliver reselved souler Lie dated Are .
Num 1-Th - - resulting That OF - of PAY equal to the mit of the also sequired under NM.
Name 1-The - to the credit of delevrance - - seriale - today -
-
Regraded Unclassified
2
COMPARATIVE ANALYSIS OF RECEIPTS AND EXPENDITURES
COMPARATIVE ANALYSIS OF RECEIPTS AND EXPEND!TURES-Contiaued
JULY as, HMP
Compressive
Corresponding
Corresponding
This -
period last
Rest year ryan
parted Seral
This
growthind -
Items year 1258
period Recal
your
year 1887
FANT
year 1917
GENERAL AND OFECIAL ACCOUNTS
TRUST ACCOUNTS. INCREMENT ON COLD, ETC.
Trust
-
$11,790,971.53
818,411,000.26
$20,131,632.14
lesse lat.
- reding (he relation la the Hipia
name
lie and dislier
31,324.00
201,079.03
21,124.60
United tax
361,348 34
201,316.28
Texas - Aventy An
Disciployment trud fand
29,121,200.04
the
Tune - - and -
----
$1,360,452.27
Total
54,696,229.33
United
-
Expensivement
a
obligation
Trust Airmints,
21,055,12 0
difference
Transactions is sheeking - of provided
All nie
1635,00
10,100,046.50
(NM)
$1,410,201.20
FALIERS Canal solls, etc.
1,109,201.73
Chargester apaint - -
4,416,632.00
Minima
I
-
111,180.07
10,140.74
111,180 97
Other
Payments to - 13b,
Friend Am. -
Total maiple
the effirment of national back color
0,073,200.00
0,072,294.00
Uteuplaiment out
25,000,000.00
4,232,000.00
I
L United
Other
200,000.00
50,000.00
255,000.00
Departmentsi*
29,217,701.00
Disp mane amount:
1,317,953.10
Investante soil transfers (red)
+1,501,001.00
Pylice
payments
48,327.05
Hive - -
12.742.487.36
Balload missed
+10,000,000.00
-
- transfirm (pat)
Canal
1,500,780.00
insults payments
Postal
4634,200.00
Hairond Airt
04,710 00
Total
- Am.
District of Columbia (LL darti
- of melyu emile
37,580,078.11
National deference
I i 4.
11.707,741.00
11.787,741.48
Army
20,000,000.00
-------------------------
Sany
PUBLIC UKUT ACCOUNTS
Transis
-------------------------
Beselplac
Agrinature Program
Mariel qualime
Orites Commissione Corpe
Cash
Fun Cavisa Administration
Treasury bills.
250,154,000.00
Value Authority
10,06€ 95
40,001.00
Transury soles
- Ge public debit
0,502,000.00
hands
Return
Claims Ristes hunda -
Code
2,107,106.00
- -
2,18,000.00
fotal
1,00,000.00
Promoting lact - feha jacture
1,748.94
146,214.30
1,741.99
Subtotal
Adjusted IMPTION
1,384,020.00
62,453,000.00
1,184,050.90
(22,452,001.00
11. Add relief
Agricultural ant:
Times seie
Videral backs
746,082.40
Transury tools
Mirf.
654,413.00
654,011.08
Public vicia out -
projects?
Police highways
Special
him and Imphe with
Unimployment trail non
23,010,201.00
Here/
316,251.02
Disap marrie airect furiel
41,000,000.00
43,680,002.00
Works Pingre Administration
Civil siffile Missil had -
71,300,000.00
43,790,000.00
71,200,001.00
42,700,000.00
All yür
Things funt
347,000.00
243,000.00
367,000.00
262,006.00
Ald in lice insure
Canal Any has (MM)
660,000.00
489 000 00
$01,000.00
live Less and
Alassa Ballmad nument Tusdi
162,000.00
189,504.00
Complo being
€ 243,070.42
2,883,367.70
FIRMAL (
Indial
Command THE assoce find -
Administration
-
Administration for Reserver.
3,030.70
15,356.32
2,039,76
162.391.000.00
50,815,000.00
142,241,000.00
50,012,000.00
198,000,424.25
201,638,248.25
Total politic delai memple.
$48,601,000.50
no. Divisivise
Experititure:
No.:
Marin
Community Credit Cargoration
Case
Earge Credit Administrative
Tressury bills.
212,834,090.00
254,003,000.00
254,555,000.00
Public -
Certificate of
115,200.00
and grade la -
Travility pulva
1,140,100.00
V76,180.00
- -
Transury bonds
18,000.00
10,000.00
Lesse to milinede
16,570.00
$76,670.00
130,246.04
w/op bands
1.776.248.72
4.406.177,00
Authorized service Soods
-------------------------
Back d' Washington
440,344.27
First Limity bunde
630,200.00
640,000.00
1,484,200.00
Fraum Corporation
Found Unity Invoice
$64,050.00
2,024,450.00
dives - and supenditures
Portal Maringo Insula
712,646.76
199,526.00
712,460.00
880,520.00
Other delli Manua
18,612.00
48,208.75
18,612.30
46,200.78
Extressal
National back orten and Federal Beserve
back -
11,624,271.08
7,212,645.00
11,424,275.00
IV. Transfere - truel etac:
Childen sosiol
42,090,000.00
42,000,000.00
Resided
Bailned entirvement samunt
48,000,000.00
32,002,020.00
Adjusted ente curtificate End
Covernment employees' estiment have
Transury
(United Bluden share).
73,254,000.00
71,211,000.00
46,734,800.00
Transury tribute
125,252,000.00
76,851,200.01
76,853,200.01
V. Dulta - (sinking had wird
30,130.00
5,031,400.00
20,450.00
6,020,408.00
Spenial -
Adjustment hand
1,500,000.00
25,000,000.00
1,500,000.00
35,000,000.00
Tinal rependitions
417,108,443.21
417,108,863.31
trail (und
50,000.00
20,000.00
entie fust
Error of -
Pingo Service minnel found
18,000.00
20,501.00
18,000.00
30,000.00
of
Canal Dine food (seles)
Postal Hurings Review (minked)
SUMMARY
Pedrod Deposit Income Organization
Date of experitions
Subtotal
1,115,100.00
35,070,001.06
Less puide debt
5,049,196.00
3,000,400.00
Tital patita 6/4 expenditions
Des at registrations (resting debt
Types - - give withing HIM - musts
Ins if
(-) if informations
Time N. apentitions
234,748,254.00
334,748,214.00
Increase (+) M time (-) in public Add
Low national Imme - -
4,072,204.00
Mariet
Traino -
+137,423,603.00
4,451,000.00
Total - of vonditions
of
-100,500.00
-133,200.00
-105,980.00
Increase (4) - derrease (-) in - fund
Transity -
-1,141,000.00
- 874,150.00
-1.141,100.00
1
Increase (+) - demoses (-) - (In public -
Clim della Dema
-44,891.73
-18,012.00
-19,400.75
Police a of or past
National tack - and Fisheral Ram back
I
-7,112,848.00
Public Vide date
Infilited
- Additional - - he the months and the final your un Individad under "Bininery and - -
Epesial and
+18,715,606.00
disabilization of which ell la done a Be deleved of - and expenditions appearug - pid Like daily Trainery
for the LAS of - smills
Total
General parte Via aption for Die - your 1997 are - - "Departmental" and relief medical
this repline fill 9a Ani year THAT into any Buider Cadynix - schelf release projects for that poir talog -
"Pville Walk- AB what
Extess of (division).
TM unter this stamilization be the month and kins - your IVAN lave - ha - - a the
transfer of that - by Our Part Offer Department 18 INF U. a. Marritive Consumer promant - Not APL of June or, jess can State
no, The united Timile - expensived by Mas D. 8. Commission will be - This - as "Degartmental", Mill
- & - 19th of On - M Marrium Commission."
- of
Details - does be - 4.
Regraded Unclassified
&
FUNDS APPROPRIATED AND ALLOCATED FOR RECOVERY AND KELIEF, EXPENDITURES THEREFROM,
AND UNEXPRNDED BALANCES
PRELIMINARY STATEMENT OF THE PUBLIC DEBT JULY 31, 1937
10n the last el dalla Transury
JULY as, 1987
ban:
$5, Pressure Out loss of 1001
- - -
is Correvies bands of 1946-47
$48, 800.000.00
IN% Batings leods (14th le seu eder
24,684,500.00
TRAVELY
14% of 1047-12
have - Exemptive -
-
mi
Companiel
INS home di
-
1% Issue of 1944-54
Please En
Total
Fines 1
en
IS - of
-
I -
INS imb al (945-50
1,000,374,400.00
1
-
Energent
I
1 !
as hunds of 1000-02
- -
as Intás al
- -
sind -
454,180,200.00
24% Made of 1645-60,
km express
- -
[ -
as tends el ING-O
2,611,107,850.00
- -
-
at THE -
-
NS twice if 1945-47.
- 14, -
- -
INS hicly of
as - M 1948-51
14% holds of
as humb uf 1001-94
- alt.
15 beits d FAST-85
-
25 landy of 1956-59
THE
----
man
-
145 leads if 1041
434,453,200.00
21/6 hands of 1919-12
Organization -
----
-----
----
ass humb uf 1242-45
leok -
United Rater form Sender
Cayinal -
10,000,000.00
-
----
-
AND
NAME
E
CARD
Birth A
to -
- - -
----
----
-
---
II.
----
-
bire c.
$45,913,218.00
- -
----
-
-
---
-
-
INSU
Contracted sales.
THE -
/
----
---
----
----
LALOR
-
Conservation
Missid Any lends d 1945
-
-
----
---
asse
---
----
-
Adjusted Service Life Insurance Fund write
- -
-------------------------
---
-
and
- -
-
----
Love
----
OF
i
----
Tital lends
21,646,503,056.02
--- - - -
need
----
---
DEDO
----
Tenumi Name
- 46
---
Memo
come
INS A-19CT, instruring Agl 15, 1997
Works -
I
-
as estima Pm.
$74,670,600.00
----
- - - ---
29% - exturing Just is, 100%
614,014,800.00
- - -
as enter C-MM, extiring Mar 16. TOM
- - ytars.
---
---
---
immo
455,178,600.00
- timer -
25 are D-UB, maistag N/A IN
---
----
-
Professional will
as aria beliving too 1A, 1981
1,298,714,200.00
- -
-------
AUTO
ave
INS eris D-WA, naturing Das n. 1984
Electrons -
----
---
AREA
$26,233,000.00
- -
INS eris C-199, No. is 1000
941.013.780.00
-
1,000,000.00
IMAX
exus
- -
as eries D-198, celoring Hapi, IA. 1999
426,554,508.00
-
----
MONT
----
INTERES
ISS aria 5-194, baluring Mar. 15, 1940
-
Twomit
-
ISS are natiring 3000 IL THE
-
-
----
-
-
INS miss C-IMI, cavering Die 18. isto
- -
T37,141,600.00
- -
i
asse
the
INS mine A-191, estaring Mar 13, 1041
Telephone TADAY Author
I
----
----
-
as series 0-001, submitting June 14. 1941
513,677,500.00
-
-
and
iss eria assima Drs. is. Bit
294,421,400.00
we A-192 matiring Mar. 12, 1912.
Funds -
455,349,200.10
4d
Credit De
11,017,241,250.00
-
-
---
name
1% Didap more - Jun at, tou and 1912
Fee Credit
-
----
----
-
sime
----
GASH
i
is Die enjor fund, ente to 1942.
201,700,000.00
is Fersign hat. series - to UNI
-
$ 400,000.00
the
----
----
par
----
----
----
is Canal & ntiment fond. aria - M me
$ 773,000.00
Losse - -
4% Alasks Reined fund caloring las a 1941 and net
241,900.00
Insurt -
-
----
---
TAME
2% Postal withs, restoring Area 30. PHO
20,000,000.00
-
[
15, Federal Deposit Corporation entre, maining Dar 1, HOS.
08,000,000.00
Corporative trans
----
----
Commitates -
- -
11,438,515,250.00
-
---
1% Aujusted Anie Certificate Fust wris, insturing Jam 1, -
24,100,201.00
73% Unimployment Trust Fund with naturag June 20, 1038
241,541,000.00
-
-
ISMEN
THE
$77,461,000.00
Oried EMA
=
43
Visant
(
Bertas maturing ARE 1. not
30,113,000.00
maturing Das. 12. 1077
The - - - - - to City - - a Timel - on - - - - di the - -
Bertin assigng Ave 107.
10,143,000.00
term Dra. 1% IVT?
100.107.000.00
- moital - a unive society Am al has a. 190 la the - - - the police - -
Beries maining AVE IN 1637,
de Relief end of - - date --- - - MY - - - - - mini of -
Horter untering Des IT, 1007
50.012,000.00
-
-
E
1
.
Transpy
CHARGES
Beries mailing Aug. % 1997.
50,158,000.00
Serie resuluring be 12, 1897
50.177,000.00
no of - - - by - - et May = - May - MM a
- - be wind Result - Misi provided in the Federal -
Service maturing Aspt. 1,1007
Seria Realizing Das. 29, 1997
Fla in of NAME - provided - live - of Pats is. - - In Ille - - Felins . man al -
I - - a the - - - CHE - eu - - - --- - ean se - - - . ase -
Berten matering Bryt. A. 1017
40,027,000.00
Service matifing In 1028
60.048,000.00
- - - - a - Employer
maketing Rept. 15. 10.17
50,008,001.00
forta instructions Jan 1008
50,022,000.00
-- to - NOS - provide - - - " - El e the - Any. -
I alient - - - all -
Beries maliring dept. JB, LEFT
matering Jan. 19.
00.000,000.00
- salet - - - . - - - - - - - - - --- - - - - - -
Smile maturing 17.
Siris disturise Iv. zn FORM
N. aller del - - - - Floward Email -
-
if
Suits matering 3 14, 1017
Arvie claiming Per 2,15%
56,014,600.00
- Pake the - la - THE - end Up Insurer - km - (mL the - Name - -
- - parties - anyward " Lie - - - y FINE Form - - - - or Our -
Organization
Berine mailuring Sept. p. 1987
Beine Pain 1018
26,037,060.00
M - of the - per - trade - - - - M . media - Members the Failing Element - - Police --
Beries maturing Sept. D, 1997
Being maisring Pets. 10, 195%
58,546,000.00
al - = - BENUILE instructions) - - - - a - - - - has Credit - DAS - -
Rerita maturing Onl 1007
00,126,000.00
beria maintig Fab. 23, the
16,612,000.00
unple Transity questi approvation - - as - apr. . an n.c.m.m.m. - - - de - of - e - - 40.00 - unde
-
Berie matiring Ock 13, 1487
belies matering Me. USA
-
TM
feb
.
HE,
cell
-
-
-
A
1
=
HAT
1
I
>
I
-
M
-
The
-
-
December,
Herite mataring Oct. - 1497.
Aria destring Mar. Issue
20,000,000.00
pour X Number all Bar - la - provided M
las Claims of hist, Name . - - UM - - - - and - primised - - Employer) Age:
forms maturing on 1997
$6,008,000.00
Pevise majoring Mar. 18, 1948
50,048,000.00
provider M al ind, like - - - the - - - - Refund - - ----- - - One at - his - IDL - --
has - - Name - in - - - Not II, MIT - - is - M N/V M Use Agrinal and Additioness
Beriew maturing Non. 3, 1437
Series maturing Mar. 28, 1988
56,128,000.00
Beries maluring Nos is, 1972
Sorial maturing Mar. 1028
30,018,000.00
DETAILS OF REVOLVING FUNDS INCLUDED IN EXPENDITURES ON PAGE 2.
Berma estime Nov. 17. NOT
60.027.000.00
Rociam caluring Apr. 4,1034
30,010,000.00
- matering Not 14, 1007
50,034,000.00
Surve mathering Apr. 18, 1938
66,002,000.00
- -
Final post 18
Borrise maturies Des. 1, 1807
56,004,000.00
Service naturing Apr: DI, 1988
28,913,000.00
Serve maturing Des. By NOT
Service maturing Age. 27, 1944
50,942,000.00
2,412,863,000.00
Pagments
- -
Payment
- -
-
-
- -
Total Internal-bearing - Intelanding
MATHERS Duer - Warre the
- Date Orposito
-
sawa
-
-
-
one
---
---
OM delive prior in Apr. 1, 1917 Inscluding Postal Parap (endi)
- MM pours - - - -
and
---
---
2N% Posted Savings Units
-
D
I
-
THE
----
-
---
-
hand of Waiter
---
!
same
24% 1% and 145 First Liberty Loan heade of 1602-47
29,004,850.00
- Date Department - and admitions
-
----
-
-----
1% and 15% benet Liberty Less Sunda 1007-42
1,431,656.00
- - - - -
nos Third lämrte Loss friends of 1938
- -
4H% Yourth Less twode of 190-88
27,674,000.00
2N% and as Virtory name if 1922-23
691,500.00
OUTSTANDING FEDERAL RESERVE NOTES, FEDERAL RESERVE BANK NOTES,
Treasury name, as varture listed FAMILY
AND NATIONAL BANK NOTES
Certificate of et verbine Internet native
Transacy -
$60,400.00
- - the
- - Date
Amount
Treasury Allan certificates
I I
Transfer in
- - -
- Transport
-
-
-
-
Dem Beserm No INTERNET
- ni
-
to - of
- - line -
Coment Flator -
-
-
las and -
Failured - -
AGES
-
- Reserve back -
cmme
----
I - -
----
some
----
Departe the of national hank will lame tank notes
OM demind total and nimes
2,682,510.59
- were E - = name E. . - - - - - - - - - - of she Failed -
Tinh and Transity sevings - -
payable is - - beld Ang - be The - M - - - - -
- by the United Main - - - for Not -
has of - - - M - new - bei a the Transurer will pen - ky De Sales - of - - - - -
Tital - delid
TRANSACTIONS AFFECTING THE CIRCULATION or FEDERAL RESERVE NOTES,
FEDERAL RESERVE BANK NOTES, AND NATIONAL BANK NOTES
COMPARATIVE PUBLIC DEBT STATEMENT
112a du - of daily Train
I
Designative
TM -
- -
Piel - -
1 [
No #1. (917,
Ave al. INK
Des, 41. IMA,
his n.
les 30. NOT,
E
- -
yes doint
- posiver
I
will
July 1837
vse ad TM -
I
. you MIY
Patient -
- - - -
------
-
-----
----
Recent - entir
-------------------------
1200
----
-
Circum debt.
- be - by Transure United Rater
use
---
Patient - hall - -
IMME
Net belazone to gromal
LISTED
1000
I I 1 I
IDSP
date
EMA
----
find
1,110,109,534.78
2,339,867,707.00
Grom delik - and
belave in -
fund.
Cruse delate -
12.80
234.18
120.00
2022
+28471
Comment of inter-
- - AVENUE - -
twairing
standing
2.36
3.7M
iii
1145
Regraded Unclassified
#ubject
6
COMBINED STATEMENT OF ASSETS AND LiABILITIES OF GOVERNMENTAL CORPORATIONS AND CREDIT SCENCIES OF THE UNITED STATES
COMPLEO FROM LATEST REPORTS RECEIVED BY THE TREASURE
JUNE M, 1517
SUMMARY
i
- - -
Prepary Internet
- el Entail -
Total -
Il
- et
Date
Na -
- -
-
-
- -
und -
Timel
to
4d.
mindin
-
- -
Total
-
Dated tiste
United
Printing
Ownet in
-
to
# de
promity
[
I
Time
Code -
forção
-
United Sale
I - - - -
ище
---
18.00
- Emill -
N.Y.
CIN
as
---
-
----
Form cruss Issue
LIABI
Call
-
HEAR
-
COM
4
Pine
and
--
18.00.00
cas
INCIME
17,085.50
2,000
HOMEN Civil
-
LIMITED
11,42
0,00
445
- Cein Dependent
ALF
BLAW
SALON
LIMIT
7M
-
CARD
and
- - 6.
THE
IMM
10,000
MCMP
ame
26,111
ase
are
I I
see
USA
---
New - and Approved
LIMITA
!
--
on
B.M.
10,9%
---
---
ema
25
/
0,40
ser
ante
3WM
8,20
----
DALOR
-
-
Two -
-
01.05.20
-
14,000.00
-
---
28.10.58
sure
same
are
---
-------------------------
====
---
---
- - -
-
AMP -
que
LM
-
use
number
-
-
TATER
LAP
-
-
MILHI
nas
Failure Fax - - -
-
10,000.00
-------------------------
ann
FLAILYM
a
0,05%
see
01.412.00
THE
3.6
-M
LIMITS
----
- - -
cuer
--
LONG
---
e.m.
-
UNIT
i I I ! i
---
-------------------------
---
-
Peteral EN Bird - - -
SEM
--
---
---
-
24,40,00
1.000,00
Pelma - - -
THE
PRIMER
INCIAL
--
-
-
- - -
---
-
CHICK
:
---
we -
E
ALIB
RICHI
and
-------------------------
4@
-----
-
:
--
:
--
Trial, -
-
---
maz
STATE
MEME IN
una
-
---
- -
---
---
---
---
-
ane
UNDOR
1000
---
1
DETAILS
Thank utility - Gresses -
Financed para - - Two - benty - privers -
-
Commentry
Table
relative
Yes -
Within
forsi
Credit
Inc.
Dates -
- -
In-
Fullend -
-
Credit Or
Insuel
I
Endical Last
Primi Firm
Issits for
Benefits
Total
- -
-
-
Inco -
Prive Nir
- -
Departic
-
Bunk
I
-
hants
Unite
-
I
9
I
Country
And
I
Toma
- -
use
AM
-
Type
this
-
- CIP
-
-
-
Corporation
-
-
-
banks
-
HERLAN
---
-
M,MI
BILAN
- -
0.10.19
- -
LEW
- - - -
- milk
---
-
- - -
END
05,00
/ -
-
0.00
--
WALST
-
- - - being
LOVE
ALEXAN
INCIME
-
I I I I i
Mines - one - -
NONE
:
Dr. - - - -
POLUCIO
----
-
6,348
- -
PLAN
-------------------------
----
-----
ITEMS
1,775
-
Time -
GLRUM
-
!
n.m.s:
LTTH
Invoice) mail -
---
-
1.M
- - - -
-
- -
m.me
livineda
Other
IN.4M
Call:
--
----
- -
LIMITS
0.79
1.00.79
1,000
se
MARIA
-
11.78.00
- - - in
state
-
--
REM
DATE
MTH
---
we
---
3a -
I
WL712
-
41,300
AW.M:
---
!
04.00
!
2a -
19076
AM
-
INLINE
13.M
- - -
LOW
RR
Chilizations - - -
-
REGIO
MILLET
-
-
1,130.00
serse
-
-
Form Montangs Corperation
NOV
- Corpeter
Federal Load Flash -
----
- Credit Bunk -
RELOW
- - - . -
-
1.300,100
- - - -----
-
:
New
- -
11.14.76
ILWATE
- - -
-
- - -
2019
LE
*
AIR
no
-
LIMITS
-
know
n.m.
11,000.00
- -
0.00
ALM
i
4.1%
-
ALAS
4,187
DAM
TOTAL
---
- - - properto
--
BLUANS
LIMITH
76,012
name
ME.TS
LIMITS
- - -
---
3.90
3,876
ne
2MI
- - - -
1
76.40
USA
-
-
NNO
- - -
ADD
I I | I 1 I
una
8,80
-
--
-
I I
41,79
---
ou
B-6AI
145
-
-
value
1,00,00
-
-
E
---
1- - - Line -
RRM
- -
3,000
---
-
---
Unite - - -
-
4,204,600
.
i
use
Capital - - - - 4d - e -
I
4 - le - - - - -
-
-------------------------
-
-
-
-
- -
2
THAT air -
---
une
USSLID
0.00,00
unan
41,50
----
-
- - -
- - 4a -
:
WESS
and
Due
LCAS
10.00.00
LNNE
-
---
una
--
INSUR
- End Fraha
-
Ast
at.m
ame
Office
3,20,00
Miller -
118,472
-
ne
IN
-
Lisa
:-
14,417,281
M.V.IM
LIMIT
SALAT
Lise
4,20,50
-
:
E
THE
CARD
Tin - -
case
a
0,00
Q.M.HI
AND
MARIS
RAD
Utile - -
LOUIS
NEW
100,00
BEVERE
M.O.
2,16
10.00
---
Total
---
--
-
IR.W
-
---
---
ana
---
HOUR
LOUR
78,10
are
nm
Line to - - - -
-
email
510
and
Lm
ALB
ALTALES
The - -
-
-
-
I I I
-
ase
ML40
10,000.40
101/20,00
asso
CAP
CALTM
IRAM
MIRMI
NA
United -
-------------------------
-
11,000,000
---
1.00,00
-
----
LIMITED
ann
- -
ISSUE
mm
-
sai
15.80
have has - Purplax
- for end -
mas
70,201
FILAM
sum
48.51
1 I 1
5,00.00
-
- - - - -
see
H.C.
----
---
--
---
CONTR
ILEM
ISCM
LIBLE
---
That - - - -
----
-
COLOR
LEMIUM
new
12,70.00
LEAVE
---
-
-
- - - - programes Name:
& - - -
. de de - - If IM BY - tuni Drail
Ended -
- zun la is Faters) w be the Tream a to paid supia
- - - - - - - -
- - - - - use
1 1 1 I 1 I ] $ I 1
Hare et na - last - in - - a PARIN win - - -
- - Date - - e -
I È I I I T E e. 5 il 1 I 1 I -
à is
- . Bing M fairmal EL Aynomi - - named - - ww
- Down - Corporations Lane - FMS Farm Credit - ed - the
condition - - IMA, all - anne as die - - will 5 - inc lie - check - - a - -
- Fereral has Intial - - en Carponation Poste - Nemat
- - - bornd I a - &
- - - TM NFO as Falled - Company, - - Total Authority - - - AR
- im in MI has - M
a - - and I für - - - Insury - -
-
Regraded Unclassified
CONFIDENTIAL
AUGUST 21, 1937
1. CALL MONEY:-
131
Low
Loaned
None.
Cloaed.
None.
Loaned
Average
None,
Migh
Loaned outside
Unloaned
Condition of Block Market at closer
Compared with previous day's clease
Trend of Stock barkets
No rates received on Saturdays.
Stock Market salest
shares.
L. TREASURY BONDS, PANAMAS A CONVERSIONS:
CLOSING QUOTATIONS
Decimals in 3201a I
Yield
Today 1 Change I Tn call : To masur-
I
t date
I Ity date
I
1
I
Treasury 3-3/8s
40-43
105.20
+,2
1,333
2,335
Treasury 3-3/8"
41-43
106.04
+.3
1,603
2,200
Treasury 3-1/4s
1941
106.08
+,5
1,609
Treasury 3-3/8=
41-47
107,02
-,4
2,079
2.567
Trensury 4-1- & Sta 43-45
106.10
+,2
2.148
2.392
Treasury 3-1/4s
44-46
*106,02 bid
-
2,263
2,467
Treasury 4a
44-54
111.20
+,2
2,266
3,125
Treasury 2-3/40
45-47
102,14
+,5
2,415
2.475
Treasury 3-3/4s
46-56
110.10
+.10
2.410
3,020
Treasury 3s
46-49
*104.02 bid
-.1
2.484
2.667
Treasury 4-1/88
46-49
105,
+.3
2.489
2,630
Treasury 4-1/48
47-52
*116.
bid
-,6
2.469
2,933
Treasury 2-3/4g
48-51
100.15
+.5
2,699
2.708
Treasury 3-1/8s
49-52
*104.10 bid
-,4
2,710
2.777
Treasury 2-10
43-63
98.06
-,2
2.673
2.637
Treasury 2-3/40
51-54
99.24
+,9
2.772
2,769
Treasury Ds
51-65
102.18
+,2
2.779
2.818
Treasury 2-7/03
55-60
100.18
+,8
2.834
2.841
Treasury 2-3/40
56-59
99.17
+.5
2,782
2,779
Panama S%
1961
113. to 117,
2.188
Conversions of
1946
108. to 111.
1,775
Conversions 3%
1947
109. to 111,
1.835
. No sale.
5. SHOWT-TER-1 OBLIGATIONS:
Bid
-
Offer
-
-
reasory Notest
Notes Á . 1/27 - 3-1/4% eaturing
Sept.18, 1937
100.13
100.15
negative
intes A - 1938 - 2-5/8%
Feb. 1, 1928
100.21
101.01
.377
Notes o - 1932 - 11
-
MAY. 18, 1938
101.17
101.19
.245
Natual Il - 1938 - 2-7/81
e
June 15, 1938
102.
102.02
.382
Notes Il - 1938 - 23%
e
Sept.15, 1938
102.02
102.04
.531
Notes o - 1939 - 11%
#
Mar. 15, 1939
100.24
100,26
.996
Notes A - 1939 - 2%
e
June 15, 1939
101.25
101.27
1,114
Notes D - 1939 - 18%
-
Sept.15, 1939
100.12
100.14
1.176
lotes B - 1989 - 18%
.
Doc. 15, 1939
100.11
100113
1.210
Notes A - 1840 - 18%
.
Mar. 15, 1940
100.24
100,26
11315
Notes B - 1940 - 14%
-
June 16, 1940
100.11
100.13
1.364
Notes C - 1940 - 1%
-
Dec. 15, 1940
100,08
100.10
1,412
Notes A - 1941 - 18%
.
Mar. 15, 1941
100.02
100.04
1,472
Notes a - 2941 - 11%
=
June 15, 1941
99.26
99.28
1,417
Nosas o - 1941 - us
-
Dac, 15, 1941
99,10
99.18
1.407
Notes A - 1942 - 18%
Mar. 15, 1942
100.10
100.12*
1,672
Pressury Bills: maturing
Ang. 25, 1937
.28%
.284
in
Sept 1, 1937
.30%
.305
"
Sept 8, 1937
.30%
.305
.
Sept 15, 1937
.30%
,305
-
Sept 16, 1937 (2)
.30%
,305
Sept 17, 1937 (2)
.30%
.305
e
Sept IA, 1937 (3)
.30%
.305
"
Sept 22, 1937
.305
,305
e
Sept 89, 1937
.30%
.305
e
Oct. 6, 1937
.32%
.325
Oct. 13, 1937
.32%
.325
-
Oct. 20, 1937
325
.325
B
Oct. 37, 1937
.32%
,325
-
Nov. 3, 1937
.33%
335
-
Nov. 10. 1937
.33%
.335
.
Nov. 17. 1937
.335
Nov. 24, 1937
335
"
Dec. 1, 1937
.35
355
-
Dec. 8. 1937
.35
355
Dec. 15, 1937
.40%
.406
Dec. 16, 1937 (2)
,406
Dec. 17. 1937 (2)
.40%
.406
Dec. 10, 1937 (2)
.40%
.406
Dec. 32, 1937
.40%
406
Dec. 29, 1927
.40%
.406
August 21, 1937 - S. - Accts, and Derosits.
Regraded Unclassified
a
132
Continued from paper 1.
me
I listed
4 Vield
I
Treasury Bills maturing -
Jan, 5, 1938
.40%
.406
Jan. 12, 1988
.40%
406
-
Jane 19, 1938
.42%
.426
e
Jan. 26, 1938
.42%
.426
-
Feb. 2, 1938
,44%
.447
-
Feb. 9, 1938
.445
.447
.
Feb. 16, 1938
.44%
,447
.
Feb, 23, 1938
.47%
.478
.
Maz. 2, 1938
.475
.479
Mar. 9, 1938
.47%
.
,478
Mar. 16, 1938
.476
-
.478
Mar. 23, 1938
.47%
.
,478
Mar. 30, 1938
.475
#
.478
Apr. 6, 1938
.40%
,488
.
Apr. 13, 1938
.48%
.498
-
Apr. 2), 1938
.40%
,488
-
Apr. 27, 1938
,48%
.488
-
May 4, 1938
.50%
,500
.
May 11, 1938
.50%
.BOB
-
May 18, 1938
.50%
,508
.
.
4. SECURITIES GUARANTERO BY THE UNITED STATES
CLOSING QUOTATIONS
Decimale in 32nds I
Field
Today I Change I To call I To natur-
I
I date
I its date
I
-
,
FED.7.M. Its- 1989
100.18 to 100.16
1,273
FED.F.N. 3a - 1948-47
*103.
bid
+,12
2.379
3.637
FED.F.M. No- 1942-47
*101.24 bid
+.4
2,340
2,542
FED.F.M. 3/4- 1944-64
*102,22 bid
-,4
2,799
3,101
FED.F.M. la - 1944-49
102.18
+,9
2.682
2.743
HOLO 20 - B-1990
101.07 to 101.11
.691
HOLO 1ts - F-1939
100.13 to 100.16
1.241
HOLO He - 1939-49
190.16
+,8
2,484
2.701
*100.02 b14
*,2
2,236
2,340
HOLO like - 1943-44
HOLC 30 - 1944-52
102.14
+,5
2,600
2.807
R.F.C. 110 (Seriss E) 12/15/22
*100.10 bid
.511
1,114
No valor
5. DEPORITS:-
In Federal Reserve Benks
AREA 30, 1937
150,167,000
In Special Depositariest n/c Balance called issues unpaid
218,000
s/o Treasury issues dated June 15, 1937
500,169,000
s/o Treasury bills
dated 8/4-11-18, 1937
149,970,000
Total Ang. 20, 19378800,440,000
Call of
AUG. 23, 1937
None,
8. GOLD IMPORTS AND EXPORTS (NET):-
Aug. DO, 1937, (N.Y. a 5 12,793,000 Importe
(
5,627,000 Burnerked Suesta
(
231,000 Veriod
Aug. 1 to 3), 1937
76,920,000 Set importe, prelin.
Jan. 1 to AUG. 31, 1977 .1.196.861,000 Net Imports.
( 3 3,205,000 from Janada
€
2,508,000 from Ingland
à
(
946,000 fros Todia
-
278,000 from Holland
t
6,637,000 TNA Ruesia
1
251,000 from Verioo
Are. R1. 1937 - Accts. - Deposite.
Regraded Unclassified
133
can
cos
BOARD OF GOVERNORS
OF THE
IT 3 $500000 123 NATURE THE
FEDERAL RESERVE SYSTEM
WASHINGTON
OFFICE OF THE CHAIRMAN
August 23, 1937.
MEMORANDUM:
TO
I
Mr. Taylor
FROM
-
Chairman Eccles
As I will not be here during the final con-
sideration of the September financing, I told the Secre-
tary that before I left, I would leave a memorandum for
him covering broadly and in a general way my views of
the situation as they existed at the time I left.
I am, therefore, enclosing such a letter,
which I will appreciate your bringing to the attention
of the Secretary at the proper time.
M.S.E.
D.E.
enclosure
Regraded Unclassified
134
BOARD OF GOVERNORS
or THE
FEDERAL RESERVE system
Emp
WASHINGTON
(
August 21, 1937.
OFFICE CPP CE or THE
My dear Mr. Secretary:
On the basis of present conditions, It is my belief that It would
be advisable in the September financing to issue Treasury notes In ex-
change for the maturing notes and to raise no additional cash.
From the present cash position of the Treasury and budgetary pros-
pects it appears that, if no cash 1s ralsed in the September financing,
the working balance will decline to 8. minimum of around $550,000,000 at
the end of October and will amount to about $600,000,000 at the end of
November. This estimate assumes purchases of $400,000,000 of gold be-
tween the middle of August and the end of November end the issuance of
a similar amount of Treasury bills to mature around the March tax date.
Additional cash can be raised at the time of the December financing if
necessary. If purchases of gold exceed the $400,000,000 mentioned above,
the inactive gold account will approach $2,000,000,000. Under these
circumstances, it will likely be not only desirable but necessary to
find some other way to deal with the gold import problem.
In refunding the September notes it does not seem to me that the
market would be receptive to an issue of bonds. Member banks are still
liquidating Government securities, end it is understood that some of
them are anxious to sell the long bonds in particular on favorable mar-
kets, since their holdings are still at E. relatively high level,
As to details of the new issues, notes maturing in about five years,
either in June or September, 1942, or en issue maturing in December, 1988,
might be offered in exchange for the meturing notes. Or the holders of
naturing notes might be given the option to exchange for either of these
issues. I do not feel that I can at this time express an opinion as to
which of these alternatives would be most desirable, since that will de-
pend, of course, on market conditions at the time of the announcement.
Sincerely
M. S, Ecoles,
Chairman.
Honorable Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D. C.
Regraded Unclassified-
135
JR
CODAT
Paris
Dated August 24, 1937
Rec'd 1:35 p.m.
Secretary of State,
Washington.
1196, August 24, 6 p.m.
FROM COCHRAN.
Improved sentiment which prevailed yesterday on Paris
market continued today. French control gained good amount
of sterling at 132.80 to 83 and SOME dollars at 26.63.
Forward franc more bid and discount down to 3 3/8 for three
months against sterling. Rentes up well on report that
Effective August 31 Government will remove 10 per cent
coupon tax from Government rentes.
BULLITT
DDM:KLP
SHA
-
-
Regraded Unclassified
136
RB
SIECIAL GRAY AND GRAY
London
Dated August 24, 1937
REC'd 2:40 p. m.
Secretary of State
Washington.
FILE N LOCHHEAD COPY,
554, August 24, 6 p. m.
FOR THEASURY FROM BUTTERWORTH.
CONPIDENTIAL.
OnE. I saw Sir Frederick Philipps today who said
that his plans, reported in Yo. 536, August 12, 5 P. Γ.
remain unchanged. HE added "How long are you going to
keep me in Washington? Will I bE able to get away by
September 27th?" In reply I said that naturally I did
not know -- that I presumed hE himself was the best judge
as to how long hE would have to bE there.
I cuote the above verbatim as having a possible
bearing in the matter of the initiative and SCOPE of
the forthcoming conversations.
Two. Philipps also said that in his opinion the
only important aspect of the present French situation
was that while they are not losing gold they are not
gaining any substantial amount at time when they should
bE acquiring a large quantity.
Three. Philipps made a noncommittal reference to
FILE COPY
M. LOCHHEAD
the actions
Regraded
137
RB
-2-#554, August 24, 6 P. m. from
London
the actions of the Federal RESERVE Banks of Atlanta and
Chicago in reducing their discount rates from 2 to 12%
but in VIEW of the approaching Washington conversation
I made no attempt to press him on this or other subjects.
HOWEVER, the concluding portion of today's FINANCIAL
TIMES aditorial is representative of other press comment
on this question.
"The majority of member banks have reserves in EXCESS
of the minimum requirements which average about 20% of
deposits and thus the banks are in need of extra money.
But SOME -- and they are almost all in the agricultural
districts -- had a certain amoun! of difficulty at the
time of the raising of the reserve percentage in finding
the necessary funds so that some heavy liquidation of
gilt-EdgEd securities ENSUED. Thus to enable them to
lend more money to farmers on their now EXCELLENT prospects
and to Save them from having to unload their investments
the Federal RESERVE Board is offering them rediscounts and
advances at a rate considerably nearer market realities
than that previously prevailing. In the short run this
has obvious advantages both to the banking system and
to the
138
RB
-3-#554, August 24, 6 p. m. from
London
to t E country. But in the long run from the banking
point of VIEW there are drawbacks. To bEgin with it
encourages just those banks which can least afford it
to overlend and while repayment following this year's
crop seems assured the past records of the agricultural
banks qualifies complete confidence in their general
loan policy. Moreover, cheap money provides in itself
EL strong incentive to grant larger advances as the keen
corpetition it entails cuts ternings down to a very low
margin. And as was pointed out in a recent article in
the ECONOMIST the stagnation of the bond market combined
with the disappearance of such non-recurrent items as bad
debts recovered has reduced American banking profits to
WEll below last year's level. The danger of over lending
is EXa gerated in the United States by the loose organiza-
tion of the banking system which consists not of a few
powerful joint stock banks with many branches as in this
country but of a large number of small banks, a high pro-
portion of which are private. Consequently while the
lowering of the discount rate has immediate advantages it
also contains the seeds of a denger which must bE guarded
against. On the other hand the advantages of cheap money
from
Regraded Unclassified
139
RB
-6-#554, August 24, 6 p. m. from
London
from the point of view of the Government and of commerce
generally are too WEll known by their Effects in this
country to require comment."
JOHNSON
KLP
HPD
03V13030
1891
ring
- -
K AMT
FEDERAL RESERVE BANK
OF NEW YORK
140
OFFICE CORRESPONDENCE
DATE August 25, 1987.
CONFIDENTIAL FILES
To
SUBJECT: Telephone Conversation with
D. J. Cameron
From
Bank of England.
I called Mr. Bolton today and I was connected at 10:27 1.3.
I asked Mr. Bolton what was going on and he said there was absolutely
no business. The London market was *still on holiday". I asked if
any further Bussian gold had come to London and he said that they
had received £1,000,000 yesterday which was earmarked for Bussian
account but that the last sale of gold in the market took place about
a fortnight ago. I told Mr. Bolton that Japanese gold was still
coming here and that we had heard that £800,000 in gold had been
shipped direct to London. He said he had heard about it from the
insurance people but did not understand why they were shipping it to
London, except as an experiment, as it was much more expensive,
especially now in view of the high rates for war risk insurance on
shipments via the Mediterranean. (It appears more like a gesture on
the part of the Japanese for our. benefit). Mr. Bolton mentioned the
arrangement which they had made with the Yokohama Specie Bank (with
which he said I was probably familiar as the payments go through his
account on our books) under which the Bank of England takes dollars
from the Yokohama Specie Bank. He said there was nothing binding
on their part, but they were only doing it to give the Japanese a
decent price as the market is so narrow even 8. small offering has
4 depressing affect. I referred to the press report of the Argentina
shipment from London of 1,920,000 ounces of gold. He said that this
gold would be shipped to Buenos Aires, but they had not as yet
received definite instructions, only inquiries as to freight rates,
Regraded Unclassified
MISC. J.2 a 6-47
FEDERAL RESERVE BANK
141
OF NEW YORK
OFFICE CORRESPONDENCE
DATE August 25, 1937.
TO CONFIDENTIAL FILES
SUBJECT: Telephone Conversation with
FROM D. J. Cameron
Bank of England.
insurance, etc. He said Argentinasexports had been very good and
that it was only natural for them to bring any surplus gold home.
He said we all do that.
I asked Mr. Bolton if he had any information on the two
shipments of gold by Samuel Montagu & Company to the Manhattan Company
amounting to about $5,000,000, about which I inquired during our last
telephone conversation, as there were two similar shipments reported
as coming forward from London totaling about $5,000,000 on the
steamers Volendam and Pennland. Mr. Bolton said that it is very
likely that these gold shipments originate in Antwerp and are shipped
to London first, thence to New York. The Belgians are still losing
gold steadily and he understands Montagu is very close to them. One
of the directors of Samuel Montagu & Company 18 a relative of Governor
Franck of the National Bank of Belgium and he thought that some
special arrangement had been made. He said that Montagu had become
more active recently in the London gold market and that practically
all of the business was being done by Montagu and Rothschild.
Regraded Inclassified
142
RB
CODAT
Paris
Dated August 25, 1937
REC'd 3:13 p. m.
Secretary of State
Washington.
1198, August 25, 5 p. m.
FRO) COCHRAN.
Forward franc and French rentes continue to
improve. No EVIdence of operations by French control
in today's quiet Exchange market. Official fund sold some
rentes. Certain details of plans made in today's meeting
of Council of Ministers for further financial decrees were
received too late to influence market. Swiss National Bank
continues to lose gold and gain foreign Exchange. No great
significance is attached by European financial press to
Argentine decision to withdraw important part of gold
holdings from Bank of England.
FINANCIAL NEWS London says six hundred seventy-nine
million pounds starling of gold received in Great Britain
second half of last WEEK from China "doubtless represents
metal collected SUA internally or purchased from the United
States
Soal)
Regraded Unclassified
143
RB
-2-#1198, August 25, 5 p. m. from
Paris
States against silver which the Chinese authorities are
converting into sterling assets to form part of the new
reserve of fortign currency for the note issue". This
article adds that some Eight hundred and SEVEN million
pounds "of gold also arrived from Germany presumably
Russian gold sent to London via Berlin in accordance
with the Russian Government's recent practice".
BULLITT
JLS
KLP
DECEIVED
YESI as DUA
YRUSADNT
an to
- - at without -
Regraded Unclassified
144
August 26, 1937.
12:32 p.m. - Thursday.
From Hawaii
0:
Go ahead.
Taylor:
Hello
H.M.Jr:
Hello Wayne.
T:
Hello Henry.
H.M.Jr:
Good morning.
T:
Good morning to you.
H.M.Jr:
How do things look back home?
T:
Ah - couldn't look much worse.
H.M.Jr:
Oh - really?
T:
Yes.
H.M.Jr:
What's the matter?
T:
Well you got the news I suppose about British
Ambassador being shot.
H.M.Jr:
No.
T:
British Ambassador to China was shot. He.....
H.M.Jr:
British who?
T:
British Ambassador to China was shot by a J apanese
airplane.
H.M.Jr:
No.
T:
Ah - that - there has been an apology which doesn't
explain too much.
H.M.Jr:
I mean how was he - in the street?
TE
No he was motoring to Shanghai from Nanking
H.M.Jr:
Yes.
Regraded Unclassified
145
- 2 -
T:
....and a Jap plane comes along and - ah - machine
guns the road and then drops a bomb on him.
H.M.Jr:
Oh for heaven's sakes.
T:
And that had - I mean had quite an effect on all the
markets.
H.M.Jr:
Ah-ha
T:
Ah - stocks - everybody is talk - I mean the market
is very nervous anyhow
H.M.Jr:
Yes.
T:
and your industrial stocks are off - ah - oh
three and three quarters points
H.M.Jr:
Yes.
T:
everything else is off. Bonds acted very
badly.
H.M.Jr:
They have.
T:
Yes.
H.M.Jr:
How about our 5-year old bills?
T:
Ah (Has conversation aside) Three to five - par
three to five.
H.M.Jr:
Well they're not off so much.
T:
No - ah - notes have acted comparatively well but
they're off
H.M.Jr:
Wayne what are they nervous about? I mean - ah -
what - what could happen as far as we're concerned?
T:
Ah - I don't think anything but that - ah - the
markets are just nervous.
H.M.Jr:
I see. The President is at Hyde Park, isn't he?
Regraded
to I I
146
T:
No he's - he's going there tonight, I believe.
H.M.Jr:
Oh, I see. The radio said he was going up there
Thursday. Is he going to be away for a while?
T:
Yes.
H.M.Jr:
For how long - do you know?
T:
Until the 15th.
H.M.Jr:
The 15th?
T:
Yes.
H.M.Jr:
Of September?
T:
Yes.
H.M.Jr:
Well is he going to stay at Hyde Park?
T:
I understand so.
H.M.Jr:
What?
T:
I understand SO.
H.".Jr:
I see. Well - ah - you might, in addition to the
information you've been sending me, send me the
quotations every day on - on four bonds - the
government bonds - whichever are the most signifi-
cant.
T:
Yes.
H.M.Jr:
Pick out four bonds
T:
Right.
H.M.Jr:
and send it to me. Because it's been helpful
for me to have that, you see?
T:
Ah - Burgess is back
H.M.Jr:
Yes.
T:
and - ah - he's - ah - - I'm glad he is.
H.M.Jr:
Yes.
Regraded
14
- 4 -
T:
But it's - ah - he thinks that this is just one of
those things that happen
H.M.Jr:
Ah-ha.
T:
....and he's glad that it's happening this week instead
of next week.
H.M.Jr:
I see.
T:
Ah - they have got some bids in the market.
H.M.Jr:
Ah-ha.
T:
Not very heavy because there isn't much volume but
it got to be a little bit panicky here this morning.
H.M.Jr:
Well how does he feel about our financing?
T:
Well he - ah - doesn't think we 're going to have any
trouble. I mean as long as we - ah - get the right
maturity and so on.
H.M.Jr:
I tell you what you do - ask him to send me a little -
what - what he thinks we can do and have it coded and
send it to me, will you?
T:
Yes I will.
H.M.Jr:
To-day.
T:
Yes.
H.M.Jr:
Please.
T:
Right.
H.M.Jr:
Have him write out a little statement of how it looks
to him and what he thinks we could do as the thing
looks today and have the thing put in code and send
it over to me.
T:
Yes. Now there's one other thing.
H.M.Jr:
Yes. I mean just what his opinion is.
Regraded
Unclassified
- 5 -
148
T:
That's right. Now to get to another subject.
H.M.Jr:
Go ahead.
T:
On this Far Eastern situation.
H.M.Jr:
On the which?
T:
On the Far Eastern situation.
H.M.Jr:
Yes.
T:
There was a special message that came to you last
night - ah - through Buck
H.M.Jr:
Yes.
T:
which went to the other interested Department
H.M.Jr:
Yes.
T:
and do you want me to - ah - let Buck know that
you are not in this country?
H.M.Jr:
Yes, why not?
T:
I think it's - I think it's advisable to do it
because it was rather an urgent appeal, you see?
H.M.Jr:
Ah-ha.
T:
Nothing that you could do anything about.
H.M.Jr:
Ah-ha. But supposing you send the message over to
me anyway.
T:
Yes I'll do that.
H.M.Jr:
But don't tell him that but simply I would tell him
that ¹¹m not in the country
T:
Yes.
H.M.Jr:
.....until Saturday a week.
149
- 6 -
T:
And that the message was delivered to where it
ought to go.
H.M.Jr:
Well whatever you think.
T:
Yes.
H.M.Jr:
What?
T:
Yes. He's already been told that the message has
been received.
H.M.Jr:
Well there isn't much use of sending it to me, is there?
T:
I don't think SO.
H.M.Jr:
What?
T:
I don't think so.
H.M.Jr:
No. There's nothing I can do, is there?
T:
Not a damn thing.
H.M.Jr:
Well then I would advise him I'm not here.
T:
Yes.
H.M.Jr:
(Laughs) I'm here - not there. (Laughs)
T:
That's right.
H.M.Jr:
Yes, I would. Ah - an appeal for help?
T:
Ah - yes.
H.M.Jr:
Ah-ha. Well there's nothing we can do, is there?
T:
Nothing.
H.M.Jr:
Fine. What else?
T:
That's about all.
H.M.Jr:
When did Magill get away?
150
- 7 -
T:
Why he got away - ah - ah - last Friday night.
H.M.Jr:
What - this last Friday?
T:
What?
H.M.Jr:
He just got away last Friday.
T:
Yes.
H.M.Jr:
Ah-ha. Well he'll get two weeks in anyway.
T:
Yes, he'll - he's planning on coming back after
Labor Day so he'll get two full weeks there.
H.M.Jr:
He gets a full two weeks, doesn't he?
T:
Yes.
H.M.Jr:
Well that's good. Now what else cheerful have you got?
T:
Ah (laughs) it's stopped raining. It's been raining
for five days and it just stopped. (Laughs)
H.M.Jr:
Really?
T:
Yes.
H.M.Jr:
All up and down the coast?
T:
Ah - pretty much.
H.M.Jr:
Ah-ha.
T:
Ah - there's a slight premium on gold in London.
H.M.Jr:
What was that?
T:
There is a slight premium on gold in London.
H.M.Jr:
Have we lost any?
T:
Nothing.
H.M.Jr:
Ah-ha. What - what is our sterilization fund - a
million what
151
- 8 -
T:
A million three - a million three naught nine.
H.M.Jr:
Ah-ha. Now the only suggestion I have is -
in the New York Times on August 16th, which just
arrived, they had an article by John Crieder -
C-r-i-e-d-e-r on the front page
T:
Yes.
H.M.Jr:
entitled, "Roosevelt Insists on Budget Balance".
I don't know how they got that story. It quotes a
lot of stuff from the Treasury, see?
T:
Yes.
H.M.Jr:
It's good. I wondered if you and Bell couldn't work
up something else like that
T:
Ah.
H.M.Jr:
on this spending showing the decrease in the
spending under the Relief Agencies.
T:
Ah - we'll do what we can.
H.M.Jr:
But take a look at that article.
T:
Yes, we - ah - I suspect that we had nothing to do
with that one.
H.M.Jr:
Well take a look at it. I don't know who put it in
the paper but it was good.
T:
Yes.
H.M.Jr:
But reduced costs of the Relief Agencies, see?
T:
Yes.
H.M.Jr:
And - ah - what else? Is that all?
T:
Ah - that's about all we have.
H.M.Jr:
All right, gad you're about as cheerful as a
mourner at a
152
- 9 -
T:
(Hearty laughter) Maybe it's the five days' rain.
H.M.Jr:
All right. Now is Bell there?
T:
He is - right here.
H.M.Jr:
Right.
Bell:
Hello
H.M.Jr:
Hello Dan.
B:
Good morning.
H.M.Jr:
How are you?
B:
Pretty good. How are you?
H.M.Jr:
Is Hopkins' living up to his bargain on his spending
since the first of July?
B:
Well he's living pretty well within his own figures
as to employment and down to about the mark that he
agreed upon. Now something's been done in the last
week for these - ah - marchers in town and I haven't
been able to get the low-down on it but I understand
that Hopkins and the President agreed that there'd
be no more lay-offs.
E.M.Jr:
That's what it had on the radio.
B:
Yes at the present time. Well apparently they called
the leader or something; I don't know just what it
was and
H.M.Jr:
The radio said that they promised this fellow Lassiter
B:
Yes.
H.M.Jr:
No more lay-offs.
B:
That's right.
H.M.Jr:
Yes.
- 10 -
153
Bt
Well I understood that there was a letter delivered
to him by the President.
H.M.Jr:
Ah-ha.
B:
He'd been trying to see the President for two weeks
and he wouldn't see him and then I think he held
out so long that they had to give him something.
H.M.Jr:
Well how about - ah - is - is it much over 100
million a month?
B:
Well expenditures for WPA up to the 24th
H.M.Jr:
Yes.
B:
of August
H.M.Jr:
Yes.
B:
just for the month 86 million.
B.M.Jr:
86.
B:
Yes, and then 32 - that's 32 million less than the
same period last year and total for the year is
213 million as compared with 280 or 67 million less
than fiscal year. 137.
H.M.Jr:
Well are you still spending last year's money or
will that all come out of the billion and a half?
B:
Well it's all made a part of the billion and a
half now, you see? It was all thrown together.
H.M.Jr:
I see.
B:
Ah - of course, there will be a liquidation in a
lot of those old obligations incurred in 1937 -
this year
H.M.Jr:
Yes.
B:
but - ah - there will be possibly about a
hundred - about a billion 650 million dollars un-
obligated balances including the billion and a half
available for expenditure in 1938.
154
- 11 -
H.M.Jr:
Well I don't think the story's got across the papers
at see? all the big reductions in emergency expenditure,
B:
Ah-ha.
H.M.Jr:
And if you and Wayne Taylor could work out something
to get that over I think it would be helpful at this
time, don't you?
B:
All right, we'll look at it. Well - ah
H.M.Jr:
What's my working balance to-day?
B:
792 - ah - million.
H.M.Jr:
How much.
B:
792 million Tuesday night.
H.M.Jr:
Yes.
B:
And that will go up - ah - tonight - that will go
up from yesterday evening about 40 million.
H.M.Jr:
Ah-ha.
B:
Ah - the statements I sent you indicate that we might
have as much as 804 million going out of August but
I think that will increase to about 815 or 20 because
we estimated they'd give 55 million to unemployment
trusts and I believe it's going to 70.
H.M.Jr:
Really?
B:
Ah-ha. On this budget thing, I don't know that I'd
talk much about it.
H.M.Jr:
You don't?
B:
I'll tell you - the picture is going to look pretty
bad when the summation comes out. I'm terribly dis-
appointed about it.
H.M.Jr:
When is the summation coming out?
155
- 12 -
B:
Well certainly not till after financing. (Laughs)
R. M.Jr:
All right.
B:
(Still laughing) That would be physically impossible.
H.M.Jr:
I wouldn't say anything.
B:
No I - I tell you - they added a lot of things in
the Congress and I'm afraid we're not going to get
much below that 418 million deficit that we showed
in April.
H.M.Jr:
You mean for the whole year?
B:
Yep.
H.M.Jr:
Oh my heavens that's terrible.
B:
Well I thought we could probably wipe that out but
I'm afraid that there's been enough added - see we
had Credit. a 30 million dollar credit in from Commodity
H.M.Jr:
Yes.
B:
I'm now told that that's going to be a black figure
of 230 - 200 million which makes it a loss in the
budget of 230 million.
H.M.Jr:
Well why?
B:
Loans to cotton. Those things hurt.
H.M.Jr:
Yes.
B:
200 million over and above what we - ah - figured
on in April.
E.M.Jr:
Well the President agreed to that, didn't he?
B:
Oh yes, it's agreed to - there isn't any question
about it.
H.M.Jr:
What's that?
156
13 I I
B:
Yes he agreed to it, I'm sure.
E.M.Jr:
Well - it is pretty tough.
B:
Yes but he told me yesterday - I told him that
that I thought it was going to be a bad picture
in '38 and I didn't think that he could tell the
American people in 1939 that there wasn't going
to be a balanced budget
H.M.Jr:
Yes.
B:
even if he had to say we were going to ask
for new taxes.
H.M.Jr:
Yes.
B:
Well he agreed and he said I'm going to get you a
balanced budget (laughs) in 1939.
H.M.Jr:
He's going to do what?
B:
Get me a balanced budget in 1939.
H.M.Jr:
I still don't hear it.
B:
I say he told me that he was going to get me a
balanced budget in 1939
H.M.Jr:
Yes.
B:
including - ah - 600 million of debt retirement.
Well I said, "We'll be satisfied with that".
H.M.Jr:
Yes. Well I'm terribly disappointed over this.
B:
Well I am too. Maybe it won't look as bad when I
get into it but I'm afraid it's a pretty bad picture.
H.M.Jr:
Yes. How does the Bresident seem?
B:
Seems in very good spirits.
H.M.Jr:
Yes.
B:
Yes. Going away tonight to Hyde Park and
- 14 -
157
H.M.Jr:
What's that?
B:
He's going away tonight to Hyde Park
H.M.Jr:
Ah-ha.
B:
.....and be back here probably the 15th and 16th
for the antietam celebration and the constitutional
H.M.Jr:
I see.
B:
celebration and then - ah - I think he's going
away; no one knows where.
H.M.Jr:
After the 15th?
B:
Yes. Told me that he'd be away for about a month.
H.M.Jr:
Really?
B:
Yes up to about October 15th.
H.M.Jr:
October 15th.
B:
Yes.
H.M.Jr:
Ah-ha.
B:
Said that would be a good time for me to take a
vacation. (Laughs)
H.M.Jr:
Good.
Good. He's going away for a month, eh?
B:
Yep.
H.M.Jr:
Ah-ha.
B:
But he didn't say where.
H.M.Jr:
Ah-ha. On the 16th. I see.
B:
Yes.
H.M.Jr:
All right. Do you want to say anything?
158
- 15 -
B:
I haven't got a thing other than that.
H.M.Jr:
Does Archie want to say anything?
B:
Archie isn't here - ah - he's - ah - (Aside to Taylor:
Where is he?) He's in Baltimore. Deitrich's here.
(To Deitrich: Got anything?) Deitrich says he hasn't
anything other than what Wayne told you.
H.M.Jr:
Well if you people want to get any mail to me when I
land send it to Captain Parker of the Coast Guard at
San Francisco.
B:
Captain - ah -
H.M.Jr:
Parker.
B:
(Aside to Taylor: Do you know that?)
H.M.Jr:
Captain Parker - Coast Guard - San Francisco.
B:
All right.
H.M.Jr:
I don't know whether I'll call you again but I may
before I go - I'm leaving Saturday you know.
B:
Ah - Wayne wants to know what day you expect to be
in Washington.
H.M.Jr:
Next week ?
B:
Yes.
H.M.Jr:
I expect to be there Saturday and Sunday.
B:
Ah - you won't get here before what - Saturday
morning late?
H.M.Jr:
I'll either get there late Friday night or very
early Saturday morning.
B:
I see.
H.M.Jr:
Why?
What's Wayne got on his mind?
Regraded
Unclassified
159
- 16 -
B:
Well he wanted to know if you wanted to see the
Open Market Committee and, if so, when?
H.M.Jr:
Oh I don't - do we want to see them?
B:
I don't believe so - ah ( Aside to Taylor: I don't
believe it's necessary, do you?) Three of the members
are here.
H.M.Jr:
Well if I see them I'd see them Saturday.
B:
Well - ah - three of the members are here and - ah
Harrison says he'll come down Saturday if you want
him.
H.M.Jr:
George Harrison?
B:
Yes.
H.M.Jr:
And - and Burgess?
B:
Well Burgess - ah - questioned whether you wanted
him to stay in New York - he could come down Saturday
afternoon after the market closed.
H.M.Jr:
Well I - I certainly would want to see him after the
market closes.
B:
Wait a minute.
H.M.Jr:
I'll be in the office about 11 o'clock Saturday.
B:
Oh - ah - Harris tells me the market will be closed
Saturday.
H.M.Jr:
Oh.
B:
Chances are it will be.
H.M.Jr:
Well then have - ah....
B:
So Burgess could come down here Saturday.
H.M.Jr:
I'd have the boys get together - who ever's here, yes.
B:
11 o'clock Saturday,
H.M.Jr:
Yes.
Regraded Unclassified
160
- 17 -
B:
(Aside to Taylor: You - ah - anybody from the West?)
All right we'll - we'll call Eccles and leave it to
him.
H.M.Jr:
Is Eccles in town?
B:
Well it will be Ransom, Wayne tells me.
H.M.Jr:
I thought Eccles was away.
B:
Yes he is.
H.M.Jr:
Ah-ha.
B:
Well we'll have some of the group here then at
11 o'clock Saturday morning.
H.M.Jr:
All right.
B:
Goodbye.
H.M.Jr:
All right, thank you.
B:
Goodbye.
H.M.Jr:
Goodbye.
Regraded Unclassified
161
RB
CODAT
Paris
Dated August 26, 1937
REC'd 4:51 p. m.
Secretary of State
washington.
1203, August 26, 4 P. P1,
FROM COCHRAN.
Trading still very light on Paris Exchange. Forward
franc continues to bE wanted and rentes better. Bank of
France statement as of August 19 showed no new advances
to Government but Treasury account down to 72,000,000
francs; with circulation lower coverage was 53.14 VErSUS
52.78. Market found nothing particularly disturbing in
new series of decrees mentioned below but inclined to con-
sider them artificial rather than productive.
Under the special authority accorded the Government
by the law of June 30, 1937 a further series of financial
decrees was promulgated in today's Journal Official providing
chiefly for the following:
One. An immediate inquiry into production Embracing
13 branches of industry. The Inquiry Committee will
include in addition to officials of Government departments,
representatives of Employers and of labor. Its task will
bE to propose such measures as may bE necessary to improve
production
Regraded Unclassified
162
RB
-2-1203, August 26, 4 P. m. from
Paris
production and in a general manner the situation of
agriculture, industry, and COMMERCE.
Two. Improvement of commerical and industrial
Equipment of commercial and industrial equipment for
the racid increase of production through Government aid.
This includes technical assistance from the Credit National
by i.:Eana of the allotment proferably to smaller trade and
industry of interest rebates for 3. period of four years
at most and to a maximum annuel amount of 35,000,000
francs not to EXCEED 4 percent nor bE more than 50 per-
cent of t.s interest actually paid on the mortgage. The
rebates will bE turned over to a special account opened
with the Credit National in the name of the firm concerned
and which can only bE debited for the payment of the interest
due,
Three. Promotion of the building industry through
lower money rates, interest rebates as above with assistance
of Orsdit Foncier to B. maximum of 40,000,000 francs and
certain tax Exemptions;
Four. Easier formalities for mobilization of Government
securities to permit quicker obtaining of advances from the
Bank of Trance on registered state securities. Other
decrees
163
RB
-3-1203, August 26, 4 p. m. from
Paris
decrees relate to various branches of state credit price
control, reenforcement of supervision over insurance and
investment companies, pensions, price of wheat. The decree
relating to the suppression of the ten percent levy on rente:
coupons though approved is held over perhaps to include
other securities such as those of the Credit National and
railways.
BULLITT
SMS
NPL
aded Unclassified
164
EDA
CODAT
PARIS
Dated August 27, 1937
RECEIVED 5:50 p.m.
Secretary of State
Washington
1209, August 27, 6 p.m.
French control yielding sterling throughout the day
at 132.95 to 92, Forward rate also tended to weaken and
intervention was apparently Effected at London to hold
three months sterling at three and five Eighths. On the
fear that latest developments increase likelihood of
British intervention in Far East sterling W&S today
offered against all leading currencies EXCEPT the French
franc. French rentes lower and international shares
followed downward trend of London and NEW York.
Another series of French financial decrees appeared
today. While it is too early for these and the ones I
reported yesterday to bE analyzed and understood by the
market the impression grew today (and caused the weakness
in the franc) that these measures are in opposition to the
Economy decrees recently issued indicate the lack of faith
of the Government in achieving cheap money rates by repa-
triation of capital and other normal means and at same
time
165
EDA - 2 - #1209, August 27, 6 p.m. from Paris
time (particularly through the lifting of the ten percent
levy on rente coupons) increase the improbability of any
Effective measure toward reducing carrying charge of Govern-
ment debt. Building costs have gone up so steeply in
France during past year that Encouragement to construction
provided in these decrees is held insufficient,
l'uch space given in financial press to lowering of
bank rate in New York. Comment in city notes of today's
LONDON TIMES was as follows: "Thus NEW York continues to
hold the distinction of being the cheapest monetary center.
The reason for reducing abnormally low bank rates to still
lower levels may not be very clear Especially at a time when
borrowing is increasing but the measure has a political
rather than an Economic significance. Demand for money
in the United States has been growing for some time past
with the progress of trade recovery and the banks - which
are the principal holders of Government securities - have
realized some portion of their holdings in order to provide
the necessary means to finance trade. By reducing the
reserve banks' rediscount rates it is hoped to induce the
banks to discount their bills and advances more freely and
to avoid the selling of Government stock. Enormous imports
of gold into America have caused the Government to adopt
a sterilization
166
EDA - 3 - #1209, August 27, 6 p.m. from Paris
a sterilization process with a ViEW to preventing too great
an Expansion in the supply of credit. As long as the
Government sterilizes gold imports it may bE difficult
to justify a rise in money rates but a reduction of
Exceptionally low rates seems hard to account for on
business grounds".
Position of Governor Franck becoming more uncomforta-
ble as campaign grows for investigation of and sharp sanc*.
tions against alleged action of Governor and Directors of
National Bank of Belgium in splitting among themselves the
salary of Van Zeeland after latter gave up under governor-
ship to Enter Cabinet.
BULLITT
SMS:MPL
167
London, August 30, 1937.
My dear Mr. Secretary:
I have reported Sir Frederick Phillips' plans in
my No. 536, August 12, 5 p.m. and No. 554, August 12,
6 p.m., confirming the fact that he will arrive in
Washington on the week-end before September 20th,
the date of his first meeting with you.
I plan to sail on the "Normandie" on September
5th, and I will arrive in Washington September 14th.
I enclose two articles and an editorial which
recently appeared in "The Times" on the French situa-
tion; you may be interested in glancing through
these inasmuch as the writer's attitude and predi-
lections are not dissimilar to Phillips'.
I do hope you have had a most restful and en-
joyable vacation.
With kindest regards,
Respectfully yours,
Whalter Jultanent
The Honorable
Henry Morgenthau, Jr.,
Secretary of Treasury,
Washington.
EXPERT
THE TIMES
NUMBER:
CITY
LONDON
DATE:
AUG 231937
YOKING THE BANK
11
A. strong provide at the houd of IM Bank of
Transe might have prevented soon of (3)) en
A REVIVAL IN
scrious made by MI Virsent Aund
Non in nationalazing the Bank lis Comment
took good CITY la and . man who bad a
FRANCE
experimente of WORK - kryat and derviced
services of (M Administrations, and could be
relied upon Bill em ont there orders to the beil
of his ability 0 is difficult to checus the
Convernment low uning that paid Governments
1.-LEGACY OF
had sufferent immiterable humiliations at the
funds of la Bank of France, and many people,
them. agreed that . change was
M. CHAUTEMPS
necessary and demable, Nince the publication
PARTY MI 1937 of the diary of M. Moresu,
Governor of the Bank a 1926-28, even umag
Commercives admined this lbs wings of the
Bank four to be clipped M. Merro besied
MISTAKES IN FINANCE
of the mander in which he finced M. Herriot
from office in 1926 The firm attitude of the
Bank, he mule, comtributed largth towands the
From Our Paris Currespondent
dismissial of the Government His hiller and
The expérience Blan collapsed three months
consent hostility la M. Herrini and his attempts
Inviore the Best Front Populaire Government
to rid the country of the disastrous Cand
des Gasehes in which be wws ably secueded by
were furced from office by the refusal
President Deumergue) far excended the bounds
of the Senale us graci them full puwer
al the permasible in A democratic state 50
to deal with the financial crisin. It was
while M. Blum nationalized the Bank and por a
dring in Docember when the Chamber
devised follower in cueirol il was left to one
disclined ⑉ accept the estimases el M. Vincent
of his Interest opporimis to provide the junib-
gation In il
Auriol, the Jonah of French Socialism, of the
This step opened the coffers el the Hank to
prohable size of the 1937 It finally
the Treasury in the past many Governments
expired la March, 1937, when the Government
Sad been driven from office by the refusal of
wers forcal to delegate their financial authority
the Bank to pari them lampurary advances, or
IM a committee of four expert-twor of whom
to short sbort-term Treasury Bonds or Ban
were among the most desdly critics et Socialisi
which were drug ae the market Bor under the
finance-wiib a mandair in operate the EX-
new rigime an wich difficulting existed: thart
change Equalization Fund
term Tunis were mon oth available the
Why was the Blum Government able to
Opposition could el no support from the
survive into the seventh age of second child-
Givernor (M the Regente la them in NMS
and oblivion Nor many Covernmento
an attack upon the Administration lun the day em
in the history of the Third Republic have sur
which the Bank returnd M eximal the Treasury
cuested in staying in office after being overtaken
in short the Opposition pould WL
by service decay. Why did pert the Opposition
as in the just, launch an informative ander the
valid exper and dismas them from office 7
burnets of the Bank of Frame
why were they allowed to carry on until The
But je spire of the disappearance of IM name)
trans had lost another 25 per cent. of its value Y
Basocial lu (he policy of the Gevern
Soundent and Communisi supporters of the
mont of the day M. Blue reached the end of
Pront Populaire are now 11ying to convince the
his when in March. No further funds were
electorate that the Bluen Government could have
available and II was only the issue of . National
consinued in office los the full electoral period,
Delense Lown rensiling 6,000,000,000 frances
and that is tell only because It was stabbed to the
(reatly £80,000,000 at the tate of exchange then
back by powerful Anaocial Nothing
ruling) that made if multe for him to way in
could be farther Trum the thuth
affer. " tank rhree must (e extrad these new
foods and by the esid of June , political crisit
A. BOURGEOIS RALLY
will inevirable There H logething dramincally
Few French Governments have encountered
stow / Socialist Minister of
so little destructive criticiaro (rem the responsible
Finance who had spent his life in publiping
Opposition as ber the of M. Blian
igeculature requing - Government loan designal
⑉ make special appeal in the gambling insting
And. though the dangers of Vincint April
The extrange guarance carried by the National
finance were clearly appervid to them (be
Defence Unit wherely the widd fluctuates, with
varimus opposed to the Government and
the frame (all on London sed Name York has
net until be bed brought France, which
given the Boorse . specifitive smitted allow
is and the weilthies country od the Continues
em ha compared outr 10 those
of face to face with the specifica of A
aftered by the law Ivar Krouger 10 (fie gointen
planned essimome, foreign eachange puntrol, and
days of Sweath
Yes the colliage of the Blue Convernment was
an authorizario economic system. The advere
not due En the fuldnce of financial milling
vote IN the Senale was not a etab in the buik.
not in the speet of their soinal Their
DGF . raily by bourgenis France in defence of
Animal policy defend only in list
Joeral capitalism.
The eactier auitude of the political and
crities of the Government's policy eu
ent impired by altroidic mouves. There were
as lessi good resides why they failed (i)
carry their eitima in BY logical conclusion
In de liest place the sarimalication of the Bank
of Prance had robbeil the French of
Be ratiying point: secondly, the foreign polity
of M. Blum and M: Dellies was generally
approved and there was no doute la Interfere
with the work they were doing. thirdly, there
- a widespread feeling their many of the secial
reforms enacted by the Frast Populaire Govern
med were useful and loog fourthly.
majority of the eleciorais had suffered ml
havily under the policy of M. Lavel
that a period of reflaxion. even of inflation. WAX
publically essectial, DD matter what were the
politions observen (bereinre realized that II
possible objections III H. Azwie
world le extrancly dangerent to disladge the
Blum Government before The electorate as
. while became convinced für the Visiums
durril policy would end to deam and that
shere - 60 alternative M alimine the expire
enve by college under in own with What is
15 that M. Bum, with this brillin
gifts, allowed to have the
of Bis Government. " PM be -
pastent only our the that he has adli -
consumpt of the AN de for
and Connerial And that be
that the problem is und for departmental
wasers rather that for the Prime Minium
Regraded Unclassified
PAPER:
THE TIMES
NUMBER:
CITY
LONDON
DATE: AUG 1937
The nature at the financial problem tas Dear
analysed by M. Bonnel When the 100k over
the Ministry of Finance be found Insury
11
practically empty: in liarrowing provery were
exhausted; yet. it faced with the liability
of having to find about 35,000,0,000,000 before
A REVIVAL IN
the end of the year IN excess of normal
hodgetary receipts His Drst slep was to in-
crease taxation. As a result lie lurges to reduce
FRANCE
the estimated deficit ne the ordinary 1937
Budget fram about 6,000,000,000L. lo about
4,500,000,000 Expenditure on public works
and advances to local authorities which in win
have leen forced to increase their taxes) are
auf by That reduces The
II.-M. BONNET'S
1937 demands 4915 the Treasury to about
29,000,000,000L. In this faller sum is included
4,400,000,000[, ou account of the British loan
ECONOMIES
to the French Railways, which has already
been covered by A transfer of extrational gold
to London. and un account of
Treasury Bond maturities which the Gevern
ment are now reying to convers. 11 that open-
WEAKNESS OF HEART
non - successful. and the indications are That
it will he, the net obligations of the Treasury
From Our Paris Correspondent
in 1937 will by about 19.000.000,000/. Twith-
out allowing for any increased budgetwer
In justice to M. Blum and M. Vincent Auriol,
receiply on account w/ a. prissible improvement
his Minister of Finance, il must be emphasized
in trade), Against them 19,000,000,000E, the
that they look office in exiraordinarily difficult
Government have abtained a fresh ailvance
circumstances. The General Election in 1936
from the Bank of France totalling
resulted in the defeat of all (he parties support-
There is, therefore, fin reason
ing the Laval coonomies. The From Populaire
to four that the Treasury will have any great
difficully in meeting in obligations this year.
marched to Victory on the promise that they
would end deflation, und that they would put
CUTS FOR 1938
in hand a vast scheme of public works in combut
M. Honnel quality realized that the (918) pro-
unemployment
them was going la he even more troublesoms
That meant in effect that the first Front
He (herefore decided (o cur loan expenditure
Populaire Government were piedged to
on account of rearmament and public works
unbalance the Budget. Other countries whose
by to increase national taxation
national finances were generally considered to
be sound had done the same thing; so why
by to faire railway fares and
not France? The difference was that France
freight pates by A total of
had enjoyed unbulanced Budgets ever since 1931.
to reduce the State grant to Paris by
R that the basis of the new financial structure
1,300,000,000 (and compelling the City to
which the Government of M. Blum proposed
Increase local taxation by that amount), to
to crect was rickety in the extreme. In 1932
curtail the public works grant to the capital
the deficit on the ordinary Budget had been
the 700,000,000., and to cut Various octive
nearly 5,000,000,0001. In 1933 it was close on
smaller appropriations so do to reduce his total
12,000,000,0000 in 1934 il was 9,000,000,0001.
lean requirements Gipan Transis such compunity
1935 over 10,000,000,000E, ; and in 1936 nearly
advances by the State as are to be refunded
8,000,000,000/0 These recurring deficits had
within - reasonable time) by between
destroyed confidence in the national finances
11,000,000,000Γ. and 22.000,000,0000 As the
and Governments found it increasingly difficult
male as miade by M. Reynand of
to borrow money by orthodox means, Finally
the Government's probable loan requirements
recourse was had to the Bank of France, which
in 1938 has been officially accepted. these outs
meant that the Bank was printing new nutes in
and 10% increases mean that the Government
order En moet such of the Government's financial
will liave to borrow only about 26.000,000,000
needs as the money market refused to cover.
nest year. Less than 17,000,000,00000 of files is
All this was perfectly clear to M. Blum and
required for purcly State purposes, and of that
to the members of his Cabinet. They realized
wm nearly two-thinds is LIVE account of
that it was essential le balance the Budget and
rearmament.
that taxation would have to be increased in
The burden reiling on the French (axpayer
order to make enda méet. But they thought
is now at least as havy X that devolving upon
that the country would not be able to stand any
the Jaxpayer of any other country While an
new frondena until prosperity bail been restored,
EXACT comparison between the incidence of
and that their first task ought to be to revise
British and French incume-lax is difficult to
trade and industry
make owing to the difference in the methods
BALANCING THE BUDGET
al calculation, the following figures give a fairly
correct impression of the manner in which is
AL recently as August 9 M. Vincent Auriel
taxed (he Income of a married man with two
uid that in 1936 they peeded 2,000,000,000E. BY
children in Grest Britzin and France. A tax-
advieve budgetary equilibrium. but (hat they
payer in this category with £300 a year pays
thought if between le do something inwards the
mothing in Great Briten in France Two pays
restoration of prosperity twice welcing respayers
shout 45 10% to Grest are Income of
lo shoulder new hundres. The Government
CSOO is Taxed at HOSE over IK, are against about
were therefore sumbling on A trade revival.
121 in Frame The figures for the CLINO im
Their gamble failed. und two months ago the
come level any about 1102 and 195, and for
£2,000 almos 1327 and 1440 respectively. And
Chauterops Government, with M. Bonnet at the
da for DA evasider. M. Bloonet's advisers de not
Ministry of Funance, came into office with a
excess that if is - prevalege as in generally be-
mandain to pay the deliis insured by M. Vincent
lieved. Il ** true that large amounts of French
Aurint. Time task is terribly complidated
savings And hearded abroad, und that the tis
unorthudex methods, tried by M. Vincent Aurist
will the results described, are closed to them:
authoritive have no record of Them. isually
they are still raced with the problems of attain-
their avings earn no interess 47 all thes are
ing husigntary which no Gavern.
not invested, but are deposited or suing his
mant has time une 1911, of review trade and
in the form al bankettes OF gold In any event
industry, which have been depressed MIVE 1933.
the Ministry extimate that they will not get queh
and of suppling the expirt of capital. which has
ame on therefore, since has the three end of aspects. 1934.
Regraded Unclassified
common
DATE:
1937
M. BONNETS REFORMS
- * doier and
M. - insts and dradic
blue Englism reques some - that
have - insurance - Fines,
Park ve cel - e) Bord sinko
- - for impressionable - The
and University Part laid + - By the reminal -
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Regraded Unclassified
171
RB
CODAT
PARIS
Dated August 30, 1937
Rec'd 3:50 p. m.
Secretary of State
Washington.
1220, August 30, 6 p. m.
FROM COCHIAN.
In conversation yesterday Vincent Avriol told THE that
hE had recently said to his successor Minister of Finance
Bonnet that the latter was "Eating white bread" in August
but that in September or October hE might bE having the
same hard fare that hE, Auriol, had last September. In
other words Auriol does not EXPECT the present respite for
the Treasury to last. HE was as always most apprehensive
as to the general outlook for international currency sta-
bility if rearmament continues at the present pace.
Paris Exchange Market witnessed fairly wide fluctua-
tions today. French control gained a little sterling at
132.82 while British control was losing dollars against
sterling around 4.963. Pressure on sterling was increased
by rumor that Japan would take no cognizance of British
note. Report that American ship had been torpedoed by
Japanese came
172
RB
-2-#1220, August 30, 6 pama from Pari?
Japanese came too late to affect the market. Forward frano
slightly improved but rentes lower and internationals offered.
Bonnet has announced that the ten percent tax imposed
by Laval on French rente dividends will bE abolished Effective
Wednesday on securities hEld by individuals. This news had
already been discounted on the rentr market. Bonnet also
announced that the Exact figure of four and one-half percent
1934 bonds refunded was three billion one hundred sixty-one
million.
Orlgian ! inister of Finance Deeman has according to
press issued & report of investigation of recent allegations
against Covernor and directors of BElgian National Bank
which Exonerates them from any legal misdeeds but recommends
measures for avoiding recurrence of situation under investiga
tion.
Editorial on need for world cooperation with respect
to currencies appearing today in LONDON FINANCIAL TIMES
conclude: "If EVEry country is going to depreciate its
currency in greater or less degree then WE must work to-
gether so as to reach the ultimate goal of a world-wide
currency relationship in which under and over-valuation
are reduced to & minimum. Belgium tried to achieve that
End
173
RB
-3-#1220, August 30, 6 p.m. from Paris
End in 1935 and England, the United States, the sterling area,
and Holland, Switzerland and Belgium are in a fair way to
achieve it today. France is still in the throes of trial
and error and. Germany clings to the first alternative or
restriction. The real need is for consultation and coopera-
tion instead of Each country waiting to SEE how the other is
going to jump. In other words WE need a united Effort made
in a spirit of friendship and mutual trust and not in an
atmosphere of competitionend suspicion."
BULLITT
NPL
MEDITAED
TON
naver
VIRGINIARY
-
-
Regraded Unclassified
174
PARAPHRASE OF TELEGRAM RECEIVED
FROM: American Embassy, Paris
DATE: August 31, 5 p.m.
NO.: 1225
FROM COCHRAN
Weakness of the belga was & feature of the Paris
exchange market today resulting from press reports of a
stormy session in yesterday's meeting of shareholders of
the National Bank of Belgium Rexist demonstrations and
the possibility of Cabinet resignations if no adjustment
was made of differences between the Prime Minister and
the Minister of Finance.
Forward franc appears quiet. Money 18 scarce but
there are still hopes for B. lowering of discount rate.
A possible strike in the Renault automobile works in the
near future is being rumored.
Another set of financial decrees was promulgated in
today's Journal Officiel. The two most important decrees
concern: (1) the suppression, effective on the maturity
date subsequent to the first of September, 1937, of the
10% levy on coupons of Treasury securities and rentes
belonging to individuals; (3) the conversion, consolida-
tion and amortization of foreign loans. To permit the
Government to meet the extensive maturities of its foreign
loans
If
Regraded Unclassified
1/5
-2-
loans and those contracted in behalf of French publio
organizations and in order that no further charges in
the latter connection be incumbent upon the state,
articles 1 and 2 of the decree provide, in translation,
as follows:
Article 1. Authorization is given the Minister of
Finance to borrow for the account of the Treasury on for-
eign markets with the view of the amortization consolida-
tion or conversion of loans contracted abroad by the large
railways or the state public bodies.
Article 2. Authorization is given the Minister of
Finance to enter agreements with the large railways or
the French National Railway Company and with public bodies
for the purpose of settling the terms under which they
are to reimburse the Treasury for the charges which it
assumes on account of the issues which it undertakes in
their behalf in application of Article 1 of this decree".
Other financial decrees relate to fiscal modifications
mainly in regard to communal finance, current accounts, etc.
In a meeting this forenoon the Counoil of Ministers
discussed the terms of & decree which will appear tomorrow
establishing "the French National Railway Company", already
mentioned above. Railway heads and the Minister of Public
Works signed the pertinent agreement.
BULLITT
EA:DJW
Regraded
Unclassified
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"ocrText": "DIARY\nBook 80\nAugust 1 - August 31, 1937\nRegraded Unclassified\n- B -\nBook Page\nBudget\nCopy of memorandum to FDR from Taylor giving comparison\nof deficit for the months of July 1937 and July 1936 -\n8/10/37\nLXXX\n21\nBusiness Conditions\nHaas memorandum sent to HWr in Hawaii - 8/19/37\n81\n- C -\nChina\nSee chronology of important events: Book LXXXVII, page 264\nAmerican Embassy, London, reports on confidential letter\nreceived through foreign office: Chinese authorities\nhave been in communication with Hong Kong and Shanghai\nBanking Corporation with regard to E20 million currency\nloan - 8/12/37\n42\nCochren reports French banking credit to the Central Bank\nof China is immediately available and runs for one year-\n8/12/37\n48\n9:30 group reports to HMJr in Hawaii that British\nAmbassador to China has been shot by Japanese airplane-\n8/26/37\n144\n- F -\nFinancing, Government\nBell memorandum sent to HMr in Hawaii on financial\nsituation \"so far this fiscal year\" - 8/23/37\n113\na) Charts and tables\nEccles memorandum on September financing (prepared because\nof contemplated assets in September) - 8/23/37\n133\nFrance\nSee Stabilization\n- G -\nGold\nSee U.S.S.R.\n- R -\nRussia\nSee U.S.S.R.\n- S -\nStabilization\nFrance:\nCochren reports that French Stabilization Fund has\nacquired on balance, since July lat, 3,400,000,000\nfrance of foreign exchange: assets now total\n9,961,000,000 france - 8/11/37\n26\nRegraded Unclassified\n- U -\nBook Page\nU.S.S.R.\nState Bank instructs Chase National Bank, London, to\ndeliver to Federal Reserve Bank of New York, for its\naccount, 358 bars of gold, total weight approximately\n5001 kilograms, being forwarded from Leningrad within\nnext few days - 8/5/37\nLXXX\n12\na) Taylor memorandum on this first shipment of gold\ngiving value as approximately $5,600,000 -\n8/7/37\n15\nRegraded Unclassified\nCopy for Secretary\n1\nRB\nGRAY\nParis\nDated August 2, 1937\nRec'd 3:45 p. m.\nSecretary of State\nWashington.\n1101, August 2, 6 p. m.\nFROM COCHRAN.\nWith London market closed today, Paris exchange\ntrading is very light. French control obtained some\nsterling at 132,78. Evidently still official support\nfor forward franc. While National Bank of Belgium was\nobliged to intervene Friday to protect belga versus\nSwiss franc pressure on Belgian currency has today\nlightened. Some French circles expect lowering of\nofficial discount rate this week but this would seem\ndifficult considering scarcity of funds and degree to\nwhich borrowers are already resorting to Bank of France.\nRentes practically unchanged with no evidence yet of\nsupport through the new fund. Latest economy decrees\nhave not aroused much comment or much hope. With many\npeople on vacation there is a tendency to refrain from\nmarket commitments and to let things drift.\nBULLITT\nRegraded Unclassified\n2\nJR\nCODAT\nParis\nDated August 3, 1937\nRec'd 3 p.m.\nSecretary of State,\nWashington.\n1105. August 3, 4 p.m.\nFROM COCHRAN.\nBank of France this noon lowered rate for discount\nfrom five to four per cent, advances on securities from\nsix to five and thirty day advances from five to four.\nThis had cheErful reaction on market. French control\nprofferedsome sterling but more active trading was in\ndollars, one Paris American Bank purchasing one and three\nquarter million dollars for the control today. Dollars\nappeared to be coming principally from London as a result\nof ten million dollar stock Exchange deal over week-end.\nBrussels also selling dollars, while Bank of England was\na buyer at 498.15. French rentes up fifty to seventy\ncentimes and better feeling all around. Societe Generale\noperated for French control in forward franc market. Bankers\nholding treasury bonds opted for repayment in October are\nendeavoring to obtain ninety day treasury bills therefor\ninstead of Eighteen month notes which government has been\nsuggesting.\nFrench\nRegraded Unclassified\n3\n-2-\nJR #1105, August 3, 4 p.m., from Paris.\nFrench Ministry of Finance today announced that\nAppert, Financial Attache in United States, will succeed\nBoisanger in charge of indirect taxation in the Ministry.\nAppert's successor in the United States is Paul Leroy-\nBeaulieu. Latter has been serving in same capacity in\nRome; is a career inspector of finance; specks English,\nis not outstanding.\nBULLITT\nCSB\nRegraded Unclassified\nCopy for Secretary\n4\nNL\nCODAT\nParis\nDated August 4,1937\nRec'd 2:30 P. m.\nSecretary of State\nWashington\n1111, August 4, 5 p. m.\nFROM COCHRAN:\nJournal Officiel today announced issue, from August 4\nto 19, 1937 inclusive of one year treasury bonds bearing\nfour percent interest from August 5 for which those\nholders of 1954 Treasury four and one half bonds who opted\nrepayment on October 5th 1937 may exchange these latter\nsecurities. There will be no cash subscription. Labor\nleader Jouhaux spoke yesterday against deflation as an\nimpossible solution of French financial difficulties. He\nis against liberal circulation of capital and in favor of\ncontrol, alleging that capitalists are planning another\ncrisis for October or November.\nEuropean Financial Press gives in considerable detail\nbut 30 far without editorial comment letters from President\nRoosevelt and Chairman Eccles to Senator Thomas on stabili-\nzation of dollar.\nLoney continues very tight in spite of lowering of\ndiscount rate yesterday and of rumor that a further de-\ncrease is to be expected.\nFrench\nRegraded\nInclassifie\n5\nML -2- August 4,1937 2:30 p.m. Paris #1111\nFrench franc both spot and forward offered today, with\nJouhaux! speech evidently having more influence than Bonnet\ntochnique. Control wielded sterling at around 132.81 and\nalso intervened in forwards through both Comptoir and\nCrodit Lyonnaise. Commercial demand for dollars from\nAmstordam and Havre. Bolga under pressure and being pro-\ntected through salos of Swiss francs. Fronch rontos up\nfow contimos.\nBULLITT\nDDM: HBS\nRegraded Unclassified\n6\nCOPY FOR THE SECRETARY\nJR\nGRAY\nLondon\nDated August 5, 1937\nRec'd 12:45 p.m.\nSecretary of State,\nWashington.\n523. August 5, 4 p.m.\nFOR THE TREASURY.\nAll of the papers reported the President's letter to\nSenator Thomas yesterday. There is however very little\ncomment in today's press though the FINANCIAL TIMES devoted\na leader to the letter and to the problem of hot money,\nExcerpts from which are quoted below,\n\"The letter reveals an attitude which in some respecss\nis closely parallel to that of the British Treasury.\nStabilization is seen as desirable but it is recognized\nthat much has yet to bE done before it can become an\naccomplished fact (***) Monetary means and devices by\nthemselves are recognized by the President and also by\nMr. Eccles as is minimum utility without assistance of\nbroader measures of cooperation (***) The outstanding fact\nin relation to the dollar is that the currency is being\nsubjected at present to a number of External influences.\nStubilization must be preceded therefore by a balancing\nof these influences. Mr. Roosevelt is clearly aware\nof this fact and WE may EXPECT some practical move from\nRegraded Unclassific\n7\n-2-\nJR #523, August 3, 4 p.m., from London.\nhim in the near future. For some time past the most\nimportant factor controlling the dollar rate has been the\nmovement of hot money. This is one of the most difficult\nproblems with which Mr. Roosevelt is confronted (***)\nThe proposed tax on foreign investments in Wall Street\nwould be of doubtful Efficacy (***) The greater part of\nthis hot money is flight capital seeking safety (***) A\ntax would bE regarded merely as an extra price to bE paid\nfor the safe keeping of funds and as such negligible in\ncomparison. President Roosevelt will probably go ahead\nwith a scheme and it will not bE entirely ineffective but\nthe real crux of his problem 11ES in the European tongle\".\nBINGHAM\nHPD\n8\nRB\nCODAT\nParis\nDatedAugust 5, 1937\nRec'd 8 p. m.\nSecretary of State\nWashington.\n1122, August 5, 5 p. m.\nFROM COCHRAN.\nFrench Control again lost sterling protecting the\nspot franc and was obliged to intervene strongly in future\nmarket since forward franc is again definitely offered.\nBelga still under pressure with Belgian nationals buying\ntheir own industrial shares (?) on Paris market and with\nNational Bank yielding some dollars last evening. French\nrentes slightly better but market suspects artificial\ncharacter of improvoment.\nBank of France statement as of July 29 showed re-\nvaluation of gold stocks on basis of forty-three milligr\nof gold to the franc, with resultant increase from forty-\neight million eight hundred fifty-nine thousand five\nhundred fifty-seven thousand to fifty-five million six\nhundred seventy-seven thousand one hundred seventy-one\nthousand francs. Deposits were up over six billion francs\nrepresenting bulk of revaluation profit which is consti-\ntuting fund for supporting rentes. No new advances to the\nstate.\nRegraded Unclassified\n3\nRB\n-2-#1122, August 5, 5 p. m. from Paris\nstate. Treasury deposit account declined one billion.\nCoverage fifty-one point seventy versus forty-eight point\nseventy-eight.\n(END OF FIRST SECTION)\nBULLITT\nNPL\nEMB\nRegraded Unclassified\n10\nRB\nCODAT\nParis\nDated August 5, 1937\nRec'd 5:22 p. m.\nSecretary of State\nWashington.\n1122, August 5, 5 p. m. (SECTION TWO)\nFINANCIAL TIMES LONDON today carries editorial on\n\"Er. Roosevelt And The Dollar\". It begins: \"President\nRoosevelt's statement concerning stabilization of the\ndollar, in his letter to the redoubtable Senator Thomas,\nreveals an attitude which in some respects is closely\nparallel to that of the British Treasury. Stabilization\nis seen as desirable but it is recognized that much has\nyet to be done before it can become an accomplished fact.\nAs the President points out 'the rabidly shifting inter-\nnational scene' precludes any attempt to fix the dollar--\nand the same applies to other currencies--at any particular\nvalue\". It ends \"The present rate of around four dollars\nninety-seven cents seems to require little official support\nexcept when the dollar tends downwards under the proviously\nmentioned inferences, Actually the situation is not so\nsimple, for there is a mutual feeling of under-valuation.\nAt present the position is one of stalemate, for the British\nauthorities\nRegraded Unclassified\n11\nRB\n-2-#1122, August 5, 5 p. m. SECTION\nTWO from Paris\nauthorities are opposed to any serious appreciation of\nsterling which would sacrifice export advantages and the\nUnited States Treasury is oqually adamant. In practice\nthe present rate has come to be generally accepted as\nbeing not very far removed from the natural level, and\nwithout further definito dovelopments it is unlikely to\nundergo anything more than the inevitable small variations.\"\n(END MESSAGE).\nBULLITT\nEMB\nNPL\nRegraded Unclassifie\n0\n12\nP\nY\nINCOMING CABLEGRAM\nMoscow, August 5, 1937.\nFederal Reserve Bank of New York\nNew York\nNo. 4\nRefer to your wire of last month 7th and refer to\nour wire of last month 7th we have today instructed Chase\nNational Bank London England to deliver to you for our account\n358 bars of gold total weight approximately 5001 kilograms\nbeing forwarded from Leningrad U. S. S. R. within the next\nfew days. Upon arrival this gold please place it our depot\nwith you under advice by cable acknowledging Please acknowledge\nreceipt of this message by wire.\nState Bank of the U.S.S.R.\nRegraded Unclassifie\nCOPY FOR THE SECRETARY\n13\nLMS\nCODAT\nParis\nDated August 6, 1937\nRec'd 5:52 P. m.\nSecretary of State,\nWashington.\n1125, August 6, 5 P. m.\nFROM COCHRAN.\nControl today yielded some sterling through Bank of\nFrance and also intervened through Credit Lyonnais and\nLazard in forward franc market where discount has never-\ntheless widened. Difficulty is being Experienced in find-\ning satisfactory \"names\" for forward operations. Belga\nunder heavy pressure. Belgian officials selling Swiss\nfrancs but not yielding dollars or sterling with result\nthat belga is out of line with these two currencies. Paris\nBourse rather good. Slight rise in rentes but not very\nimpressive. Several banks which feel obliged to accept\none\nsome of the Treasury's new/year bonds as reimbursement of\ntheir maturing Germain Martin bonds are already offering\nthe new securities at a discount.\nFINANCIAL NEWS London today carried an article from\nits Paris correspondent on Bonnet and the French budget\nwhich concluded: \"That Monsigur Bonnet is doing his\nutmost -- through the time-honored expedient of cheap\nmoney\nRegraded Unclassified\n14\nLMS 2-No. 1125, August 6, 5 P. m., from Paris.\nmoney -- to get the wheels of industry revolving faster\nis illustrated by this WEEK'S reduction in the bank rate.\nAnd hE is thus -- aided by the seasonal influx of tourist\nmoney and income tax collections -- also preparing for a\nrevival of confidence in the currency and national credit\nwhich would of course greatly simplify his task. Whether\nthat revival of confidence will mature rests largely with\nthe Socialists. If that party should succeed in staging\na \"come back\" at the End of the summer then undoubtedly\na\nthere will be/renewed capital Efflux and all Monsieur\nBonnet's efforts will bE nullified.\"\nBULLITT\nSMS:EMB\nRegraded Unclassifie\n15\nAng. 7, 1937\nMr. Taylor\nMr. Dietrich\nThe following is a. cable received August 5, 1937 by the Federal\nReserve Bank of for York from the State Bank of the U.S.S.R., Moncew:\n\"Refer to your wire of last menth 7th and refer to our\nwire of last menth 7th we have today instructed Chase\nNational Bank Londen England to deliver to you for our\naccount 358 hars of gold total weight approximately 5001\nkilograme being forwarded from Leningrad U.S.S.R. within\nthe next few days. Upon arrival this gold please place\nit our depot with you under advice by cable acknowledging\nPlease acknowledge receipt of this mercare by wire.\"\nThe above-mentioned gold has a. value of speroximately $5,600,000,\nand you will observe from the cable that it is not to be sold but merely\nheld under earmark for the State Bank at the Federal Reverve Bank of for\nYork.\n10 this is the first shipment of gold directly from Russia since the\ninstitution of direct relations between the State Bank and the Federal\nReserve Bank of Sex York, no doubt you will wish to bring this natter to\nthe attention of the Secretary upon his return.\nRegraded Unclassified\nCOPY FOR THE SECRETARY\n16\nCA\nGray\nPARIS\nDated Aug. 9, 1937\nRoed 6:15 p.m.\nSecretary of State,\nWashington.\n1134, August 9, 5 p.m.\nFROM COCHRAN\nIaris exchange markot slow. French control bought c.\nlittle storling at 132.82 and sold some at 87. One Paris\nAmerican bank bought $400,000 for control and Lazard exe-\ncuted somowhat similar order. Belga still under pressure\nand florin wonkor. Offer of dollars comos principally from\nNow York and Japanese. Fronch press carrios report of\ncriticism by Houso of Representativos Banking and Currency\nCommittoe of administration's gold purchase policy. Havro\ncotton people who are anxiously awaiting American crop ro-\nport have. rumor today that nogotiations for American loan\nto Fronch railways are progrossing satisfactorily. Their\nParis American bankers have tried to discourage such\noptimism.\nFrench rentes are up 1 to 1.50 francs with Caisse\nselling some to prevent too rapid rise. General market\natmosphere better. These improvements due principally to\nweek-end political speeches by President Lebrun, Chautemps\nand Bonnet, who quoted President Roosevelt as recommending\nto him\nRegraded Unclassified\n17\nCA\n--2--1134 from Paris Aug 95 p.m...\nto him as he left the United States that he balance the\nFrench budget, emphasized in a conservative and effective\naddress the steps which he is taking toward this end.\nHe urged the need for economies, patience and calm.\nBULLITT\nSMS TPL\n03/13/10\nRegraded Unclassifie\n18\nRB\nGRAY\nParis\nDated August 10, 1937\nRec'd 4:14 p. m.\nSecretary of State\nWashington.\n1136, August 10, 5 p. m. (SECTION ONE)\nFROM COCHRAN.\nFrench control acquired quite a few pounds and dollars\ntoday. Dollar became more bid from New York in trading.\nBelgian still yielding Swiss francs and dollars to support\nthe belga. Forward franc bid without any official inter-\nvention in Paris. French rentes again gaining and Caisse\nselling to prevent too much rise in B. market where the\nturnover is not heavy. Latest statements of Swiss National\nBank show decline in gold and gain foreign exchange holdings\nAccording to press reports Chinese Minister of Finance\nKung yesterday signed a financial agreement with a group\nof French banks in Paris for the grant of a special credit\nwith the object of increasing Chinese reserves of foreign\ncurrencies.\nPress report from Rome on the occasion of the return\nof Suvich donies the rumor of forthcoming loans to Italy\nto be launched in the United States.\nBULLITT\nSMS\nNPL\nRegraded Unclassified\n19\nRB\nGRAY\nParis\nDated August 10, 1937\nRec'd 4:30 P. r.\nSecretary of State\nWashington.\n1136, August 10, 5 P. m. (SECTION TWO)\nAlthough Paris market and most European financial\npress have reacted favorably to Bonnet's week-end speech,\na suggestion of caution is contained in an editorial in\nthe LONDON FINANCIAL TIMES today which concludes:\n\"Clearly, financial regularization on paper is\nnot enough. Until taxes are collected, loans raised,\nand exponditure cut made effective the situation is\nthe same as before M. Bonnet bogan his addition and\nsubtraction This fact has not escaped the shrewdly\nrealistic French capitalist with his hoards over the\nwater as is proved by the small return of capital that\nhas so far materialized. It is all a matter of confidence\nwhich unfortunately the Popular Front Government through\nall its pormutations and combinations has not boon signally\nsuccessful so far in inspiring. Excessive social roforms\nmay have\nRegraded Unclassified\n20\nRB\n-2-#1136, August 10, 5 p.m. SECTION\nTWO from Paris\nmay have been ended and the popularity even among the\nworkers, of the forty hour week may be in question but\ntrade union irresponsibility remains. The return to\nfinancial orthodoxy is a declaration of faith and welcome\nas stated but we have still to wait for its effective\napplication\".\nEND OF MISSAGE.\nBULLITT\nSIS\nNPL\nRegraded Unclassified\n21\nthe sury Department\nAmount 10, 1937\nTO THE PRESIDENT'S\nThis is in reforence to your inquiry concerning the com\nments recently appearing in the public press with respect to the\ndeficit for the month of July, 1937, as compared with the deficit\nfor July, 1936, on the basis of daily Treasury statements,\nThere supere to be some misunderstending about the -\ntar and, therefore, I all Blad to have the opportunity of submitting\nthis memorandun,\nAs you know, it has always been the practice of the\nGovernment to regard the difference between its receipts and di\noursements, including sinking fund and debt retirements from ⑈\nmarked receipts, but excluding other debt transactions, ne the\nGovernment's deficit. Whether collections deposited in revolving\nfunds (such as the R.F.C.) ATV deducted from expenditures or cred-\nited au receipts, the effect on the deficit is precisely the same,\nThe transactions of the Government are of such a complex\nand varied nature that it would be virtually impossible to reduce\nthe reports of receipts and expenditures to such simple form AS\nwould cause them to be readily understood by all, without, at least,\nmeing some mental analysis of the various factors involved. It\nwould, perhaps, be even more difficult to device a form of state-\nsent which would meet the individual views of all. Erena if all the\nfactors and problems involved in compiling the daily statement of\nthe United States Treasury were thoroughly understood by the public,\nit is doubtful whether two persons would be in total agreement as\nto form, substance. and the particular trestment to be accorded\ncertain items.\nFor instance, while some would contend time the sma\ndollar should be charged nd an expenditure ten times if it rolled\nover that many times in n. revolving fund for loans. repayments.\nand now loans. there ATS others who would just as vigorously sain-\ntain that such practice would tend only to pad the total receipts\nand ampenditures of the Government. of course. when & lending\norganisation commanoes to liquidate and has no authority to make\nfurther loans, the viewpoint changes. That is the situation to\nwhich we will eventually dome with rement to the Reconstruction\nFinance Corporation as wall all all other revolving funds, and if\nthe Congress should anst legislation turning the collections for\naccount of such funds into the general fund of the Treasury all air\ncellansous receipts. the Treasury would change the present pro-\ncedure for handling such collections to conform to the Daw legis-\nlation and the changed conditions resulting therefrom.\nFor your convenient reference, there follows a repro-\nChietion of page two of the daily Treasury statement of July 31,\n1937, showing comparative receipts and expenditures for July, 1936\nand July. 1937:\nRegraded Unclassified\n2\nCOMPARATIVE ANALYSIS OF RECEIPTS AND EXPENDITURES\nJULY 31, 1937\nCorresponding\nThis month\nperiod last\nyear\nGENERAL AND SPECIAL ACCOUNTS\nHanelyle:\nInternal revenue:\nIncome laz\n$57,140,977.82 82\n$39, 120. 852 56\nMissellaneous internal revenue\n221,071,974.33\n200,809,819.29\nUnjust enrichment las\n361, 345 24\nTaxes under Social Security Act\n55, 001, 738 so\nTaxes upon curriers and their employees\n32,139.10\nCustoms\n40,645,901.22\n31, 680, 452 27\nMiscellaneous receipts\nProceeds of Government-owned securities\nobligations\nInterest-foreigo obligations\nAll other\n16,585,641.09\nTO, 586, pen 56\nPanama Canal tolls, de\n2,165,736.69\n2,199,231.73\nSeigniorape\n3,486,208.08\n4,816,632.80\nOther miscellanenus\n14,588,070.23\n4,772,831.42\nTotal receipts\n409,160,636.55\n293,886,769.63\nExpenditures:\nI. General:\nDepartmental\n60,168,737.13\n39,217,701.03\nPublic buildings\n0,621,094.75\n1,517,963.00\nPublic highways\n19,158,280,91\n5,954,210.39\nRiver and harbor work\n12,742,897.36\n8,550,995.21\nReclamation projects\n8,470,463.36\nPacama Canal\n1,870,750.54\n902,611.73\nPostal definiency\n'634,266.02\n2,527,757.52\nBailroad Retirement Act\n630, 410, 01\n84,710.09\nBocial Security Ael\n29,466,584.53\n11,891,503.11\nDistrict of Columbia IU. 8 share)\n4,495,201.76\n3,810,062.58\nNational defense:\nArmy\n$2,958,084.00\n33, III, 43A 48\nNavy\n46, 230,050 80\n36 614, 934 76\nVeterans Administration\n48,083,019.46\n48, 634, 860 79\nAgricultural Adjustment Program\n23,000,640.14\n87,627,565.30\nCivillan Conservation Corps\n31,853,403.60\n1,889,157.53\nFarm Credit Administration\n*902,535.17\n116,373.81\nTennessee Valley Authority\n3,702,793.24\n59,061.95\nInterest on the public debt\n12,296,234.65\n9,882,833.68\nRefunds:\nCustoms\n1, 305, 280 64\n2,107,196.65\nInternal revenue\n1,714,523.11\n9,982,609.53 53\nPromming tax on farm products\n500,255.36\n1,749.93\nSubtotal\n037,380,132.05\n240,385,878.99\n11. Recovery and rolief:\nAgricultural aid:\nFederal land banks\n785,032.80\n1, 656, 946. 44\nRelief\n654,613.00\nas, 022, 999 24\nPublic works (including work relief):\nReclamation projects*\n2,506,628.52\n1,828,098.63\nPublic highways\n8,642,097.33\n30, 031, 82L 13\nRiver and harbor work\n3, 659, 211. TM\n13, 476, 816 15\nRunal Electrification Administration\n2,289,779.75\n316,321.82\nWorks Progress Administration\n127, 350, 140 37\n162, 051, 064. 04\nAll other\n22,838,301.57\n36,922,263.55\nAld to home OWDETAL\nHome Loan system\n1,516,471.13\n2, 501, 075. 81\nEmergency housing\n6,292,099.42\n2, N83, 387. 70\nFederal Housing Administration\n1,048,007.95\n1,015,188.73\nResettlement Administration\n19,170,004.02\n12,330,248.27\nMiscellaneous:\nAdministration for Industrial Recovery\n$5,816.32\n2,030.76\nSubtotal\n198, 009, 494 20\n001,686,256.22\nIII. Revolving funds (net):*\nAgricultural aid:\nCommodity Credit Corporation\n1, 202, MAL 74\n67. 213, our 00\nFarm Credit Administration\n*1,215,246.78\n42,853,717.37\nPublic works:\nLoans and grante to States, municipal-\nItim, etc.\n19,154,916.02\n99. 837, 015. IS\nLoans Le railroads\n*76,679.88 88\n739,344.54\nMissellaneous:\nExport-Import Bank of Washington\n48,731.97\n443,244.37\nReconstruction Finance Corporation-\ndirect loans and expenditure\n15, 771, sua Me\n4174,572,570.02\nRubtotal\n*2,100,133,78\n215, 806, 272 41\nIV. Transfers to trust accounts, etc:\nOld-age reserve account\n42,000,000.00\nReilroad retirement account\n10,000,000.00\nAdjusted service sertificate fund\n20,116,060.51\nGovernment employees' retirement funde\n(United States share)\n72,255,000.00\n46,785,200.00\nSubtotal\n123,254,000.00\n76. 551, 350, 51\nV. Debt retirements (sinking fund, etc.)\n20 550.00\n£ 039,400.00\nTotal expenditures\n658,545,042.47\n417. 108, 648. $1\nExcess of receipte\nExcess of expenditures\n249,384,405.93\n123. 251, 873 as\n23\n3 -\nIt will be noted from the nbove statement that the deficit\nhe No. 1957. - $249,000,000. as compared with $123,000,000 for\n20% 19%, LA Incroase of $125,000,000. Total ampenditures 170\ncranged from 9437,000,000 in July, 1936, to $358,000,000 in July,\n1/17. This Increase of $241,00,000 Includes $43,000,000 for the\nordenge Teserve recount, and $20,000,000 for the milroud retirement\naccount, deltier of which were in the platom 1-25 TVP, It nico\nincludes n $27,000.00 increased in the United Mates share of the\ncommunent employees' retirement funds, expenditures unles\nSixe World Lot, representing principally prints to States,\n+20m $11,091,000 to $29,495,000. There item Account for\n206,000,000 of the $341,000.00 increase in expenditures and 120\nplainly net out in the daily ristement.\nThe principal Items offenting the however, we\n- baconstruction Anonea Corporation and the Commodity Credit\n- in May, 19:5, these to empolou comedned bed come\nrevenue of ,00 19 company -1th en arcess of reportents\nas mix $20,000,000 in hay of this more This is . decline of\nin not revoments. and, of course, the companitive\nClasses with request to total expenditures end the leftelt for Ady.\n199, and July, 1976. enro efforted Ena the as -\npermite in movelving funds hom the simi this your 18 List, the -\npolitires for July, 1977. world have been only $27,000.000 2020\ntime La sury, 1975, and the deficit the July, 1977. must have boos\n$4,000,000, instand of $340,000,000.\nOthersch there appairs to be considerable\n4d concerning the significance of the deflait for July in relation\na the activated Coffeit for the year. I to not understand that\nway uno contante that the Government's deficit for July is actually\ndifferent from that in the daily Treasury statements, 48\na loter alsos to this memorredom I will misser to der up this\nmisunderstar.ding.\nThe excess reportente in July, 1935, in the of the\nindonstruction 71amos Corporation, on the beals of daily transury\nvistements, emmanted to while the registere\nnonte for July, 1937 were 818,771,523.56. = decline of $195,901,053.07.\nthis difference is tracsable to two CERTIFICATE First, repayments in\nJuly, 1930, of $83,000,000 fre retirment of preferred\nstodic will notes of ml trust companies] and second,\nquartity $24,000.000 from revents of milrond loans, sales of\nPublic writen Additionation mounties, and other regular\nLottony three Accounting for about $152,00,000 of the 2156,800,000.\nIn the questity Tredit Corporation the of\nreceipts in July 1935, imported to 207.213.203. cus compared with\n(1,302,884, in July of this year, a dedline in receipts of\n66,021,139. This difference 10 accounted for by the ande of\n270,000,000 of colleteral trust notes, limites 4, in July, 1955, and\nand offert iv the payment of much notes later in the fiscal year,\nthis transation yourd not spece in the statement of\nreceipts of expenditures on prem two of the daily Treasury state=\nonly but the deposits ware not no marked 18 to anable the Ireup\nknown of the United States to identify the disimates of the trus-\nactions. Stope have been taken to have all chadics and all for\nposite Goving through the beare's addounts of 1. million dollars\nor mro, to delivered to the Commissioner of Accounts and Deposits\nfor amerination md instructions concerning the accounting treate\nnent of unsual Items.\nthe daily Treasury statement shows expende\nbures of $00,168,737. in July, 1937, 08 compared with 19.27.702.\nin July. 1935, more increase of $20,951,095. $9,300,00 of this Law\narease is in the Department of vericulture, arising principally from\nRegraded classified\n4\n24\nthe fnot that a more empeditions wethod for reking payments to\nStates under cooperative agreements will been worked out between\nthe Treasury and the Department of Apriculture, Stadler payments\nfor Inst year vere not unde until August,\nU. S. ligitime Cominsion $3,400,000. due principally\nto the fact that payments under DOBAN mill contracts wire más to\nthe Haritine Commission in July, 1937, similar payments\nwere mêe by the Post Office Department in July, 1935 from its own\naccount with the Treasure of the United States and reflected in\nthe postal deficiency.\nThe remainder Is accounted for by the for thet. LD\ncompared with last year, D considerably larger resource of chedks\nlamind top the Division of Disbursement in June - paid In July,\n1937.\nThe \"Coneral\" emmilitures (including \"Departmental\") for\nJuly, 1937. ROG'S $337,000,000. MM compared with $249,000,000 in\n1935, an increase of $88,000,000. or this anount 139,000,000*1*\nat-Inined above, $30,000,000 of the remaining $49,000,000. is due\nto the transfer of the Civilian Conservation Погри from the\nsn/ Calinf\" classification to the \"General\" classification. You 120\nfedlier with this change of classification in the budget. Das.\nLiare was an increase of $8,000.000 in Servy expenditures: mm0 above\n$2,000,000 in interest; the bulance is principally on nocount of\nand river and herbor are larguly to N change in\nclassification from *Secovery and Relief\" to \"Deneral\".\nwith reference to the emarel question of publishing\nthe receipts and expenditures of the Covernment, envoral changes\nwere mis in the daily Treasury statement, effective July 1, 1937.\nYou probably have road come invorable coments appearing in the\npublic press concerning these disages, One of the duages had to\nin with the handling of cortain non-crub transactions, represent=\ninc mounts net anido in the 010-0/20 reserve account, the rail-\nroad retirement account, nad the sureral Government employee'\nretirement fair, It is felt that sound budgetrary proctice re-\nquires that such Items be included in governmental expenditures,\ntrat they are lapt in a coporate (TOUD) for ready identification.\nAnother important change relates to the handling of -\nvolving funds. These funds have boen secrepted from all other\nfundo end placed in e separate croup. with a separate net substotal.\nIn conformity with the - - 6. grootlee\nwhich I believe to be in accordance with the 10(ml status of the\nfunds - - the figures are on a net bala. 1. Day (russ prymite\nlova represents but it is imortant to note that the (TOSO 1'0\"\ncainta and reproments reported 1a detail on PP four of the\ndaily Treasury statement 9 that it is simly a matter of aritimatic\nto put the figures on a (TOSS besis, then Shore le still another\ndiscription, namely, to publish the figures on the present not basis\nby supporting schedules of payments and repoy-\nments ne at present) but to \"ginttle\" the figures back and forth\nbetween receipts and expenditures. depending upon desting the\nRegra\nassified\n5\n25\nnet result is - excess of empenditures or in EXCESS of repayments,\nUnited much a procedure, the net figures for Reconstruction Pinance\nCorporation in - mosth would be reported under \"Tependitures\",\nsharens in another month the not figures would appear under\nRegraded Unclassifie\nBut hare again 11 is staply a matter of aritimatic to old the net\nrepayments to the totals of both receipts mil expenditures if such\nin the basis upon which cas wishes to work. In the last analysis,\nwhether the items are treated one my or mother. the effect on the\ndeficit is the - While there is see morit in the treatment\nwhich I have Just outlined, it presents - protional difficulties:\nmd, in my opinion the present procedure conforms more nearly to\n1mm and the legal status of the funds, then any other plan time\nfor devised or\nthe daily Treasury statement now presenta & genuldate\nformed picture of the receipts and expenditures of the Government\nin the zost simplified from consistent with proper presentation\nof A complex subject.\nwith reference to the significance. if any, which the\ndeficit for July any have with respect to the full fiscal year. I\nwould like to call attention to the followings\nis you know, the receipts of the Dovemont do not flow\ninto the Treasury evenly throughout the year. It is very probable\nthat the eight months of this Modal your in which a compuratively\nmill amount of income taxes will be received, my show no accrease\ndeficit of $1,400,000,000, thereas the four income tax payment\nnonths my show a surplus of as much as $1,000,000,000, leaving a\nnot deficit for the year of about $400,000,000. as indicated in your\nmeaningo to the Congress of April 30, 1937. The deficit of $249,000.000\nduring July, 1937. as above in the daily Trensury statement of July a.\n1937, does mt, therefore, indicate the necessity of revising the\nestimates for the figal year 1933, as contained in that letter.\n(Signed) Wayne C. Taylor\nAssistant Secretary\nof the Treasury.\nMFB:HW\n9/10/27\n26\nRB\nCODAT\nParis\nDated August 11, 1937\nRec'd 3:02 D. m.\nSecretary of State\nWashington.\n1139, August 11, 4 p. m. (SECTION ONE)\nFROM COCHRAN:\nAt Bank of France this forenoon I was informed that\nFrench stabilization fund yesterday gained one hundred\ntwenty-four million francs of foreign exchange. Since\nJuly lst the fund has acquired on balance three billion\nfour hundred million francs of forcign exchange. Total\nof assets in fund as of yestorday wasnine billion nine\nhundred sixty-one million francs including the above amount\nof foreign exchange and revaluing on a forty-three milli-\ngram to the franc basis the some four billion francs of\ngold which was acquired from the Bank of Franco when the\nrecent changes on the monetary system took place and which\nthe fund has been able to hold.\nHigher officials of Bank of France are working well\nwith Governor Fournier but organized personnel just dedi=\ncated a special number of thoir publication to ex-Governor\nLaboyrie. Latter is reported recently to have told the\nunionized\nRegraded Unclassified\n27\nRB\n-2-#1139, August 11, 4 p. m. from\nParis SECTION ONE\nunionizod employees as well as outsiders that ho had boen\nforcod out only temporarily and that the \"will of the\npeople\" would in the not distant future return him to\nthe bank where he could complete the reforms which he\nhad started, institute exchange control, et cetera.\n(laughed?)\nVhile the responsible officials of the bank laydh at\nthis, their relations with the personnel are not helped\nby Labeyrie's remarks\nBULLITT\nHPD\nRegraded Unclassified\n28\nRB\nCODAT\nParis\nDated August 11, 1937\nRec'd 5:20 P. m.\nSecretary of State\nWashington.\n1139, August 11, 4 p. m. SECTION TWO.\nThe Bank officials find Bonnet a very alert and\nunderstanding Minister of Finance with whom they can\ncooperate. They feel that he has shown real courage\nin the steps which he has so far taken. They realize,\nhowever, that he has chosen the propitious time with\nParliament adjourned, with so many Parisians, including\nlabor agitators out of town, with France enjoying a\nreally good tourist season, and with the entire effects\nof the latest currency depreciation not yet fully felt\non the cost of living.\nWhile the gains by the French stabilization fund\nhave been encouraging, there has not yet been any big\nrepatriation of French capital from abroad and the Bank\nof France officials do not look for the heavy holders\nto act quickly. The really significant sums were sent\nto New York to be away from Europe as well as from France\nand my\nRegraded Unclassified\n29\nRB\n-2-#1139, August 11, 4 p.m. from Paris\nand my contacts do not take too seriously the press stories\nthat important amounts of this French capital are moving\nfrom New York to London.\nOperators of French stabilization fund have recently\nbeon more aggressive in their dollar purchases and hope\nto continue to acquire more thereof so long as their sit-\nuation pormits. They are surprised that the British have\nnot made more effort to check the dollar's decline expecial-\nly since London will shortly be needing dollars for seasonal\npurchases of American grain and cotton.\nBULLITT\nSMS\nNPL\nRegraded Unclassified\n30\nRB\nCODAT\nPARIS\nDated August 11, 1937\nRec'd 8:20 D. m.\nSecretary of State\nWashington.\n1139, August 11, 4 D. m. SECTION THREE.\nAt the bank I mentioned the story in this morning's\nAGENCE ECONOMIQUE that a group of banks headed by Paris\nand Pays Bas and including Lazard, Bank of Indo China\nand Franco Chinese Bank for Commerce and Industry, has\nopened a credit of 100,000,000 francs to the Central Bank\nof China at Shanghai which may be raised aventually to\n200,000,000 (Reuter's report of this credit was mentioned\nin my 1136, August 10, 5 D. m.). My contact at Bank of\nFrance thought this was more of a friendly gesture to\nKung than anything else. That is, he expects the sum\nto be entered into a special account for the Chinese\nso that the latter can credit a corresponding amount in\ntheir holdings of foreign exchange but he looks for no\nactual disbursements to be made from this account.\nAGENCE ECONOMIQUE gives ample space to President\nRoosovolt's denial of any contemplated change in gold\npolicy\nRegraded Unclassified\n31\nRB\n-2-#1139, Au ust 11, 4p. m. from\nParis SECTION THREE\npolicy and FINANCIAL NEWS today ridicules the views of\nthe Republican mombers of the House Banking and Curroncy\nCommittee.\nBULLITT\nSMS\nNPL\nRegraded Unclassifie\n32\nRB\nCODAT\nPARIS\nDated August 11, 1937\nRec'd 8:35 p. m.\nSecretary of State\nWashington.\n1139, August 11, 4 P. m. SECTION FOUR\nParis exchange market quiet. French control yielded\nsome sterling at 132.87 and apparently has acquired no\nforeign exchange during the day. Bank of England reported\nto have sold some dollars. Belga offered against dollars\nand continental currencies other than French franc. Cassel\nof Brussels reported shipping gold to New York. French\nrentos uneven. Understand that recent purchases thereof\nhave been almost entirely by professional operators who\nfigure that the new rente fund can not afford to let the\nsecurities decline and will eventually push them up so\nthese spoculators will have a chance to unload at a profit.\nCommorcial interests hope for anothor reduction in official\ndiscount rate. On this point Bank of France contact told\nme this morning that much of the foreign exchango which\nthey\nRegraded Unclassified\n33\nRB\n-2-#1139, August 11, 4 p. m. SECTION\nFOUR From Paris\nthey had recontly acquired had boon brought back by\nFrench business poople who, with the local monoy markot\ntight, had to sell foreign exchango to got the francs\nwhich thoy needod. To case the interest situation vory\nfar would thorofore likoly work against capital ropatria-\ntion. In the samo way, boosting rentos too activoly\nbefore general financial confidence is restored would\ngive investors cash for transfer abroad.\nEND OF MESSAGE.\nBULLITT\nSMS\nNPL\nRegraded Unclassified\n34\nFEDERAL RESERVE BANK\nOF NEW YORK\nFICE CORRESPONDENCE\nDATE August 18, 1937.\nCONFIDENTIAL FILES\nSUBJECT: TELEPHONE CONVERSATION WITH\nD. J. Comeron\nBANK OF ENGLAND\nM\nI phoned Mr. Bolton at about 11 a.m. and inquired about\nthe darket in general and asked if he could throw any light on two\ngold shipments totalling about $5,000,000 consigned by Samuel Montagu\nand Company, London, to the bank of the Manhattan Company, New York\nper steamers Westernland and Rotterdam. I mentioned to Mr. Bolton\nthat this was quite a large amount in view of the recent smallness of\nthe gold market and it seemed strange that slow hoats were selected\nwhile faster boats could have been used, He said that he had heard\nthat £1,000,000 in Russian gold had been transshipped at Antworp for\nNew York, but I told him confidentially that I did not believe there\nvas any connection because we had advice from the State Bank of such\na shipment to us, He said that be would see what information he could\nget and let me know.\nHe said the French market was getting a little money but not\nmuch, however, they were getting & badly needed rest. He said the\nonly feature in the market, If it could be called one, was the weakness\nof the belga. He said the Belgians were losing gold at the rate of\nabout £100,000 per day and that the trouble was largely political.\nBe said the Japanese were now enforcing & very rigid control of the\nyen, holding the rate at 1sh 2d and that no forward transactions were\nallowed. He said the Japanese continue to accumulate balances in\nLondon which in his opinion is purely a war measure. I asked if he\nhad had any dealings with Argentina on account of the refunding of\nthe City of Buenos Aires bonds as we had sold a small amount of\nstorling here. He replied they had done nothing.\nRegraded Unclassified\n35\n11 40M 6.17\nFEDERAL RESERVE BANK\nOF NEW YORK\nFICE CORRESPONDENCE\nDATE August 18, 1937\nCONFIDENTIAL FILES\nSUBJECT: TELEPHONE CONVERSATION WITH\nM\nD, J, Cameron\nBANK OF ENGLAND\n+\nI phoned Mr. Bolton again at about 12.45 p.m. I told him\nthat we had received a cable from the Central Bank of China asking\nus if we could provide them with 2 £1,000,000 sterling spot, as\nthere was a continued demand on them for spot sterling and they did\nnot wish to disturb the New York - London rate.\nI told Mr. Bolton that we would have to release gold to\nhim from our account (under tripartite agreement) to obtain the\nsterling, and as we would not be able to tell him definitely until\ntomorrow at our opening, we wondered how he falt about taking $\n£1,000,000 of gold from us tomorrow at his today's price. He said\nit would be perfectly all right but he could offer us £300,000 spot\nat 4.9845 for delivery tomorrow which would only leave £700,000 to\nbe realized from the sale of gold. I accepted his offer and it was\nunderstood between us that if the Central Bank of China accepted our\noffer for the additional £700,000 we would cable him at our opening\ntomorrow to take over the equivalent amount in gold at today's price\nof 139 sh 4d.\nRegraded Unclassified\n36\nJR\nGRAY\nLondon\nDated August 12, 1937\nRec'd 2:06 p.m.\nSecretary of State,\nWashington.\n536. August 12, 5 p.m.\nFOR TREASURY FROM BUTTERWORTH.\nCONFIDENTIAL.\nOne. Sir Frederick Philipps plans to sail for Canada\non September 4 on the EMPRESS OF BRITAIN. HE will adhere\nto the itinerary reported in the final paragraph of my\n475, July 15, 3 p.m., coming from Lake Louise GO Chicago\non September 16 or 17th and arriving in Washington the\nWEEK End before September 20, the date of his meeting with\nthe Secretary of the Treasury.\nTwo. As regards the French situation, Philipps said\nthat it moving along the lines hE indicated in his\nprevious conversations; that the French were now \"messing\nabout with the forward rates\" but they had done little\nharm and not very much good. As regards spot operations,\nthey were holding their own but not receiving any worthwhile\namounts of gold.\nThree. Philipps referred to today's press reports\nquoting the Federal Reserve Board's monthly bulletin on\ngold\nRegraded Unclassified\n37\n-2-\nJR #536, August 12, 5 p.m., from London.\ngold hoardings, in particular the statement that hoarded\ngold in London \"must bE less than five hundred million\ndollars\". In this connection, he mentioned his Estimate of\nnot more than 95 and not less than 75 million pounds,\nreported in my 354, June 7, 6 p.m., and said that he thought\nthe time had now come to check up on the figure again but\nthat certainly it must bE somewhat lower than that of\ntwo months ago. Phillips added that a perhaps more\ninteresting figure was that of a billion dollars for\nhoarded gold throughout the world and that he intended\nto write Jacobsen at the B I S for confirmation.\nBINGHAM\nPEG:RR\nRegraded Unclassified\n38\nRB\nGRAY\nParis\nDated August 12, 1937\nRec'd 3:02 P. m.\nSecretary of State\nWashington.\n1149, August 12, 5 p. m.\nFROM COCHRAN.\nParis exchange market extremely quiet. French con-\ntrol lost a little sterling at 132,87 and 86. Belga\noffered but Cassel said still to be operating against\ndollars with view to shipping gold from Belgium to New\nYork. Market report it that French Caisse had to buy\nheavily yesterday to hold Government securities about\nlevel. Today rentes and other Treasury issues are all\noffered. Latest rise in cost of living index and this\nweek's increase in local transportation rates cause\nworry. American bankers in Paris tell me that French\nbanks share their opinion that no significant amounts\nof capital are returning to France.\nBank of France statement as of August 5 was satis -\nfactory. There were no new advances to the state but a\nfew slight adjustments in two of the items constituting such\nentries\n39\nRB\n-2-#1149, August 12, 5 p. m. from\nParis\nentries. With a small gold gain and deposits down one\nand one-half billions coverage rose from 51.70 to 52.29.\nBULLITT\nPEG\nGW\n-\nRegraded Unclassified\n40\nJR\nGRAY\nLondon\nDated August 12, 1937\nRec'd 2:06 p.m.\nSecretary of State,\nCOPY,\nWashington.\nFILE LOCHHEAD\n536. August 12, 5 p.m.\nFOR TREASURY FROM BUTTERWORTH.\nCONFIDENTIAL.\nOne. Sir Frederick Philipps plans to sail for Canada\non September 4 on the EMPRESS OF BRITAIN. HE will adhere\nto the itinerary reported in the final paragraph of my\n475, July 15, 3 p.m., coming from Lake Louise 00 Chicago\non September 16 or 17th and arriving in Washington the\nWEEK end before September 20, the date of his meeting with\nthe Secretary of the Treasury.\nTwo, As regards the French situation, Philipps said\nthat it who moving along the lines he indicated in his\nprevious conversations; that the French were now \"messing\nabout with the forward rates\" but they had done little\nharm and not very much good. As regards spot operations,\nthey were holding their own but not receiving any worthwhile\namounts of gold.\nThree. Philipps referred to today's press reports\nquoting the Federal Reserve Board's monthly bulletin on\ngold\nFILE COPY\n2\nRegraded Unclassifie\n41\n-2-\nJR #536, August 12, 5 p.m., from London.\ngold hoardings, in particular the statement that hoarded\ngold in London \"must bE less than five hundred million\ndollars\". In this connection, hE mentioned his Estimate of\nnot more than 95 and not less than 75 million pounds,\nreported in my 354, June 7, 6 p.m., and said that he thought\nthe time had now come to check up on the figure again but\nthat certainly it must bE somewhat lower than that of\ntwo months ago. Phillips added that a perhaps more\ninteresting figure was that of a billion dollars for\nhoarded gold throughout the world and that he intended\nto write Jacobsen at the B I S for confirmation.\nBINGHAM\nPEG:RR\nRegraded Unclassified\n42\nRB\nGRAY\nLondon\nDated August 12, 1937\nRec'd 3:30 p. m.\nSecretary of State\nWashington.\n535, August 12, 4 p. m.\nConfidential.\n3\nWith reference to your 242, August 9, 7 P. m., I\nhave received from the Foreign Office a confidential\nletter which supplements the memorandum quoted in my\n394, June 24, 2 p. m. The pertinent points of the\nletter are as follows:\nOne. That the Chinese authorities have been in\ncommunication with the Hong Kong and Shanghai Banking\nCorporation with a view to settling the terms of the\ntwenty million pound currency loan and that the Foreign\nOffice understands that the Chinese are likely to accept\nthe conditions mentioned in its previous memorandum,\nTwo. However, the negotiations have not progressed\nnearly as for as press reports imply and \"it is obviously\nimpossible that a loan should be issued during the con-\ntinuance of the present state of tension in North China\".\nThree. Reference is made to the resolution adopted\nat the\n43\nRB\n-2-#535, August 12, 4 p.m. from London\nat the May 6 meeting of the Consortium Council, to the\nletter of July 23 addressed by the British group to the\nother groups regarding the proposals for the Pukow-Siangyang\nRailway, to which no replies have been received, and in\nthis connection it is stated that \"on the 30th July an\nagreement was roached botwoon the Chinoso Government on\nthe one hand and the British and Chinoso and China Develop-\nmont Finance Corporation on the other for tho issuo of a\npounds sterling three million loan for the Canton-Meihsien\nRailway, and on the 4th August a second agreement between\nthe Chinese Government on the one hand and Chinese Central\nRailways and the China Development Finance Corporation\non the other for the issue of a pounds sterling four\nmillion loan for the Pukow-Siangyang Railway. The latter\nagreement contains the following proviso: Notwithstanding\nany of the provisions hereinbefore contained, none of the\nclauses in this agreement shall become effective until the\npresent consortium obligations, which are now the subject\nof discussion between the governments concerned, cease to\nbe binding on the British group\".\nI have also been given in confidence copy of a letter\naddressed by Padfield of the Hong Kong and Shanghai Banking\nCorporation\nRegraded Unclassified\n44\nRB\n-3-#535, August 12, 4 p.m. from London\nCorporation to Kung under date of July 30 together with\nthe latter's reply of August 3 which are quoted verbatim:\n\"I write again you this letter for the purpose of\nplacing on record what I understand to be the conclusions\nto be drawn from the recent discussions with Mr. T. K.\nTseng. I should be grateful if you could confirm that\nthe following accurately represent your wishes and inten-\ntions:\n(one) The Chinese Government contemplate. approaching\nthe London market through the Hong Kong and Shenghai Bank\nfor the issue of a sterling loan for an amount or amounts\nup to pounds sterling twenty million in all, such loan\nto be known as the Chinese Government refunding loan of\n(#*).\n(two) The proceeds of the loan would be paid to the\nCentral Reserve Bank of China and held by it in sterling\nin London and used solely for foreign exchange transactions\nto maintain the stability of the Chinese currency as at\npresent established.\n(three) The Chinese dollar counterpart would be\nused gradually over B period for the redemption of existing\ndomestic\nRegraded Unclassified\n45\nRB\n-4-#535, August 12, 4 p.m. from Londor\ndomestic bonds.\n(four) An adviser to the Central Reserve Bank of\nChina would be appointed in consultation with whom the\nforegoing disposition of the loan proceeds would be\neffected.\n(five) The security in respect of principal and\ninterest would be the entire revenue of the Chinese\nMaritime Customs Service after provision for all exist-\ning charges.\n(six) The administration of the Chinese Marltime\nCustoms Service shall continue as at present constituted\nduring the currency of loan.\nWith reference to the foregoing I have to say that\nthe Hong Kong and Shanghai Bank would be prepared, subject\nto the security referred to under paragraph five above\nproving adequate and to there being no objection on the\npart of His Majesty's Government, to give favorable con-\nsideration to the issue of such a loan provided that the\ncurrent negotiations in regard to the consortium have\nremoved any obstacles on that account to such a sterling\nissue, It is understood of course that the actual timo\nof issue and the terms on which the loan could be placed\nwould\nRegraded Unclassified\n46\nRB\n-5-#535, August 12, 4p.m. from London\nwould have to be governed by the London market conditions.\nI am sending a copy of this letter to His Majesty's\nTreasury and to the Foreign Office.\"\nKung's reply is as follows: \"I wish to acknowledge\nthe receipt of your letter of 30th July and to thank you\nfor the interest you have taken in the proposed loan in\nLondon. From time to time, Mr. T. K. Tseng and Doctor\nP. W. Tuo have reported to me the conversations they\nhave had with the officials of the Treasury and of\nyour bank regarding the matter. In general their reports\ncorrespond with your observations with the exception\nof Article five which they understand to be that the\nproposed loan would be charged on the customs revenue,\nranking immediately after the internal consolidated and\nrecovery loans of 1936.\nI assure you that I am to receive your understanding\nof these conversations and that the matter will receive\nmy careful attention\".\nIn the course of a convorsation Sir Frederick Phillips\nreiterated that irrespective of future developments Chinese\ncredit in London had been unfavorably affected by recent\nevents in North China and that neither the proposed\ncurrency loan nor the two proposed railway loans can be\neffected\nRegraded Unclassified\n47\nRB\n-6-#535, August 12, 4 p.m. from London\neffected unless market conditions prove favorable and\nthat the present situation in China is likely to have\nan adverse effect on them for some time to come. Phillips\nalso said that the Chinese had been losing \"a fair amount\"\nof sterling; that in his opinion they could hold their\ncurrency under present conditions for several months\nif they wished to do so but that if a real war came\n\"there is no telling\".\nI gather that similar communications have been given\nby the Foreign Office to the French and Japanese ripre-\nsentatives.\nBINGHAM\nHPD\n03V13038\n40%\n- -- -\nRegraded Unclassified\n48\nMM\nCODAT\nParis\nDated August 12, 1937\nRec'd. 7:45pm.\nSecretary of State\nWashington, D.C.\n1152, August 12, 8pm.\nDepartment's 423, August 11, noon.\nCochran obtained following information at Ministry\nof Finance this evening to supplement my 1148, August 12,\n4pm.\nThe French banking credit to the Central Bank of\nChina is immediately available and runs for one year.\nThe charges therefore are explained as follows: the\ninterest will be at one percent above the current dis-\ncount rate of the Bank of France with a minimum charge of\nfour percent and the bankers will receive a commission of\napproximiately two thirds percent.\nThe officials consulted at the Ministry of Finance\ngave the same impression as that obtained at the Bank of\nFrance and set forth in our 1139, August 11, 4pm, in\nregard to the purpose and real significance of the\noperation. That 1s, the credit is solely to bolster\nthe backing of the note issue to the Central Bank of\nChina. It 1s stipulated that to the extent to which\nthe credit is drawn upon the borrowers must deposit a\npledge\nRegraded Unclassified\n49\n1152, August 12, 8pm from Paris. -2-\npledge of silver in London. Furthermore there is a\nsecret gontlemen's agreement to the effect that the\nfunds available under the credit shall not be takon\nout of France.\nBULLITT\nSMS\nNPL\n<801 BIPUA\nTRUZAJRT\nto\n- 3 as $ -\nRegraded Unclassified\n50\nAugust 16, 1937.\n12:35 p.m.\nHawaii\nMagill:\nAfter by play back and forth with me they finally\nquit and\nH.M.Jr:\nIt'll pay you not to try and handle the hot money.\nMagill:\nAh - yes, that's right - yeah, yes it did look as\nif it was a time we could do it very well. Did you\nget my letter?\nH.M.Jr:\nYes (laughs)\nM:\n(\n(Laughs)\nH.M.Jr:\nBut listen -\nM:\nYes.\nH.M.Jr:\nNext time you send me a letter don't warn me three\ndays in advance and have me all tizzy-wizzy worrying\nwhat it is.\nM:\nI didn't know that they were going to.\nH.M.Jr:\nYes - Coast Guard - Lieutenant Pollio sent word over\nthat you were sending me a very very personal letter.\nM:\n(Hearty laughter)\nH.M.Jr:\nAnd for three days I wondered what it was all about.\nM:\nYou stayed in your room and didn't go swimming at all\nI suppose.\nH.M.Jr:\nRight.\nM:\nWell that's too bad; I don't know what they did that\nfor.\nH.M.Jr:\nWell anyway your letter was very satisfactory.\nRegraded Unclassified\n51\n- 2 -\nM:\nWell I'm glad it was. I - I think we really got out\nof a tough situation there quite happily.\nE.M.Jr:\nWere you able to get upathe to camp?\nM:\nI - I finally got away for a couple of days there at\none point; got away Friday and came back Monday\nevening\nH.M.Jr:\nYes.\nM:\nbut I've been here the rest of the time except\nweek-ends.\nH.M.Jr:\nI see.\nM :\nI hope - I hope they'll get through this week-end and\nif they do I want to get away for a week or so then.\nH.M.Jr:\nHow are you feeling?\nM:\nVery well except it's been hot down here and a good\ndeal of a strain but I think we came out awfully well\nconsidering everything.\nH.M.Jr:\nI think so. You must have handled it very well.\nM:\nWell I don't know about that but it's - ah - it's\ntaken a lot of diplomacy at various times to get\nthrough alive. Now would you like to talk to Wayne?\nH.M.Jr:\nYes, and would you just send a message to the operator\nwhen I'm through I'd like to talk to Bob McHugh in his\nroom.\nM:\nYes.\nH.M.Jr:\nWhen I get through.\nM;\nYes,I'll do that. Here's Wayne.\nTaylor:\nHello\nH.M.Jr:\nHello Wayne.\nT:\nHello Henry.\nRegraded Unclassified\n52\n- - 3 - -\nH.M.Jr:\nHow are you?\nT:\nOh I'm fine.\nH.M.Jr:\nAh - Wayne - one of the principal things I wanted was -\nI have no idea, for instance, what what is our daily\nbalance right now - our working balance.\nT:\nI've got the figures for you - 855 million.\nH.M.Jr:\nHow much?\nT:\n855.\nH.M.Jr:\nI see. Well now has it been - has it\neach\nweek or are we eating into it.\n(Pause and squeal)\nT:\nWait a minute - I've got to get around to the other\nside.\nH.M.Jr:\nHello hello\nT:\nHello\nH.M.Jr:\nHello.\nT:\nAh - we'll eat into it a little bit to-day but - on\naccount of special transactions but it will act all\nright from now on.\nH.M.Jr:\nAh-ha, well what I'd wish you'd do with Bell would be\nto send me a cable to-day, giving me the picture to\nSeptember 15th and then from September 15th to Nov-\nember 15th, do you see?\nT:\nYes.\nH.M.Jr:\nAnd the idea the main thing I want is what is the\nminimum of new money that we need to carry us to\nDecember 15th.\nT:\nO.K.\nH.M.Jr:\nI mean I'd like to get it to get the feel of the thing.\nRegraded Unclassified\n- 4 -\n53\nT:\nRight.\nH.M.Jr:\nFor the first time in my life I'm completely out of\ntouch.\nT:\nWell that's what we hoped you'd be.\nH.M.Jr:\nFrankly, I haven't been worrying about anything.\nBut I want to begin to get the feel of the thing,\nyou see?\nT:\nAh - we'll start with to-day's stuff and then we'll\nkeep you generally in touch.\nH.M.Jr:\nWell I don't - I don't want cables every day but I -\nbut I would like a cable memo - how the thing looks\nto you and Bell.\nT:\nRight.\nR.M.Jr:\nAnd - ah - what you think the minimum money is and\nthen - you haven't begun to find out in New York yet.\nT:\nNo, we haven It done that yet. Burgess has been away\nyou see and we thought we'd start fussing around with\nthat this week.\nH.M.Jr:\nAh-ha. Well what are those - the last March 42's - what\nare they selling at now?\nT:\nAh - par 18 to 20.\nH.M.Jr:\nHow much?\nT:\nPar 18 to 20.\nH.M.Jr:\nAh-ha. The market has sold off the last week, hasn't\nit?\nT:\nYes - ah - mostly in the long bonds.\nH.M.Jr:\nAh-ha.\nT:\nBut they turned on Saturday and they're acting all right\nto-day too.\nH.M.Jr:\nI see.\nRegraded Unclassified\n54\n5 1 I\nT:\nIt was mostly the dealers switching their position\na little bit.\nH.M.Jr:\nI see.\nT:\nThere was no real liquidation.\nH.M.Jr:\nNo, I don't want daily cables but I would like to have\none now.\nT:\nAh - we'll get it to you this afternoon.\nH.M.Jr:\nYes and then - ah - so I can get some idea how much\nnew money - how she was running. Now on the Japanese\nthing - ah - did they send us all the gold they said\nthey were going to?\nT:\nAh - yes - they've - it's slowed up a little bit\nlately.\nH.M.Jr:\nAh-ha.\nT:\nAh - there's only 13 million - ah - that we know\nabout on the water at the present time.\nH.M.Jr:\nHow much?\nT:\n13.\nH.M.Jr:\nThat makes a total of how much?\nT:\nIt will be 143 which they sent here.\nH.M.Jr:\n143.\nT:\nYes.\nH.M.Jr:\nAh-ha. Any more coming?\nT:\nAh - 13 on the way and nothing new reported.\nH.M.Jr:\nI wish also in the cable that you'd give me an idea\nhow the people there feel about this Chinese-Japanese\nshow.\nT:\nAh - - perfectly dreadful.\nRegraded Unclassified\n55\n- 6 -\nH.M.Jr:\nIs that the way they feel?\nT:\nWhat?\nH.M.Jr:\nI say how do they feel there?\nT:\nThey think it's perfectly dreadful.\nH.M.Jr:\nWhat are they doing about it?\nT:\nAh - main thing up to date is making arrangements to\nget the women and children out of Shanghai and the\nrest of China.\nH.M.Jr:\nBesides that?\nT:\nAh - besides that they put - they're having - ah -\nwhatever transportation can be made available - ah -\nthen it's up to people whether they want to go or\nnot.\nH.M.Jr:\nThen the situation itself.\nT:\nThe situation itself looks very bad.\nH.M.Jr:\nThey're not doing anything about it.\nT:\nNot yet; they're having a meeting this morning with\nSecretary Hull and Secretary Woodring at the White\nHouse.\nH.M.Jr:\nI see.\nT:\nBut nothing has come out about that yet.\nH.M.Jr:\nWell if you get anything on that let me have that,\nT:\nRight.\nH.M.Jr:\nAnd - ah\nT:\nWell it couldn't be worse.\nH.M.Jr:\nAh - how was the New York Times index for Sunday;\nwas it up or down?\n56\n- 7 -\nT:\n(Has a conversation with George Haas) (Pause)\nH.M.Jr:\nHello\nT:\nAh - not much change this last week - ah - practically\nnone but it's a little down from June when you were\nhere - July rather.\nH.M.Jr:\nTell George he can get me off a letter airmail giving\nme a little review of the business situation.\nT:\nRight.\nH.M.Jr:\nSuppose he gets me off a letter airmail - George Haas.\nT:\nYes.\nH.M.Jr:\nSee.\nT:\nO.K.\nH.M.Jr:\nHave you any feelings yet on financing?\nT:\nAh - no bonds.\nH.M.Jr:\nAh-ha.\nT:\nAnd then whatever happens to fit on the notes\n.\nH.M.Jr :\nYou what?\nT:\nWhatever happens to fit on notes I think either - any\nnote would go all right.\nH.M.Jr:\nAll right. Anything else?\nT:\nAh -\nH.M.Jr:\nHow is your health?\nT:\nMy health is excellent.\nH.M.Jr:\nGood.\nT:\nAh - the foreign exchanges outside of this Far Eastern\nstuff has been acting all right.\nRegraded Unclassified\n57\n- 8 -\nH.M.Jr:\nWhat?\nT:\nForeign exchanges outside of the Far East have been\nacting all right.\nH.M.Jr:\nAh-ha.\nT:\nAh - generally quiet; France has been gaining foreign\nexchange - not much but doing a little better to hold\nits own and their bond market is better.\nH.M.Jr:\nWell let me talk a minute to Bell and then to Archie.\nT:\nAll right.\nBell:\nHello\nH.M.Jr:\nHello Dan.\nB:\nGood morning.\nH.M.Jr:\nGood morning. Ah - how is the spending going - is it\nahead or behind our estimates?\nB:\nAh - well it's a little behind and balances have picked\nup over our estimates for the month of July and up to\ndate but that has largely been due to Jesse Jones\nof obligations.\nH.M.Jr:\nI see.\nB:\nAh - the emergency was off about 40 million dollars\nfrom our estimate; the others are about the same. The\ngold was off about 40 million - 38 million.\nH.M.Jr:\nWould you mind getting me off by airmail a little\nreview?\nB:\nAll right.\nH.M.Jr:\nI mean a little review of the spending outlook?\nB:\nAll right. We sent quite a report last week on the\nJuly expenditures as compared with last year's July\nexpenditures to the President. I mean last week.\nRegraded Unclassified\n58\n- 9 -\nH.M.Jr:\nWell send me a copy of that.\nB:\nAh - yes. He brought it up at Cabinet Meeting and\nasked Wayne to give him an explanation of it so he\ncould make it public\nH.M.Jr:\nYes.\nB:\nbut when we took it over we talked him out of it.\nH.M.Jr:\nAh-ha.\nB:\nWe thought it better to keep still.\nH.M.Jr:\nLet me have a copy of it and bring it up to date.\nB:\nAll right.\nH.M.Jr:\nHow are you feeling?\nB:\nI'm feeling pretty good; kind of anxious for Congress\nto get away.\nH.M.Jr:\nYes, well take care of yourself.\nB:\nAll right. Do you want Archie now?\nH.M.Jr:\nAnything else you want to tell me?\nB:\nNo, there isn't much change in the situation so far\nas the Budget is concerned. Department hung on to\nthe Interior Bill for quite a while with a view to\nvetoing it but he finally decided not to because he\nhad word that they'd pass it over his veto immediately.\nEverybody's in a pretty bad temper; they want to go\nhome so badly that they don't want to reconsider anything.\nH.M.Jr:\nYes.\nB:\nSo he decided to sign it.\nH.M.Jr:\nWell up to date I mean on the legislation he didn't\npass anything that would cost us any great money to\nit,did he?\nB:\nNo.\nRegraded Unclassified\n59\n10 I I\nH.M.Jr:\nWhat?\nB:\nNo, there isn't anything that we need worry about\nso far as '38 is concerned.\nH.M.Jr:\nI see. Do you think they'll pass the Housing Bill?\nB:\nI really don't know. (Aside: \"Did you hear anything\nof the Housing Bill\"?) Mac says that he can't find\nanybody that's got any idea from it. The House has it\nand hasn't reported yet.\nH.M.Jr:\nI didn't hear what you said - the phone wasn't working.\nB:\nI say Mac says that he hasn't seen anybody that knows\nanything about the status of the Housing Bill.\nH.M.Jr:\nWho says that?\na\nMac.\nH.M.Jr:\nI see.\nB:\nThe House has it and the Committee hasn't reported it.\nH.M.Jr:\nI see.\nB:\nWe're all hoping that it will hang over.\nH.M.Jr:\nWell if - ah - we'll see what happens.\nB:\nYes.\nH.M.Jr:\nWell if you'll get me off a letter airmail I'll\nappreciate it.\nB:\nAll right, Goodbye.\nH.M.Jr:\nThank you.\nB:\nHere's Archie.\nLochhead:\nHello\nH.M.Jr:\nHello Archie\nRegraded Unclassified\n60\n- 11 -\nL:\nWell the exchanges have been absolutely inactive;\nH.M.Jr:\nYes.\nL:\nsterling is holding strong and the francs, as\nMr. Taylor said, are holding quiet; they're not gain-\ning anything real but they're holding their own.\nH.M.Jr:\nAh-ha.\nL:\nAh - the other exchanges are not doing much; Belgium\nis inclined to be a little weak but there - there's\nbeen no questions brought up at all. The Chinese\nhave managed to hold that exchange so far; of course,\nit has cost them money; it hasn't come out yet but\nit's costing them money.\nH.M.Jr:\nHow much of the one billion two is inactive.\nL:\nJust a minute. (Aside: \"What is the inactive fund\nright now\"?) One billion 277.\nH.M.Jr:\nI see,\nL:\nNow that seems to have quieted down again. There's\nlittle dribs and drabs come over from England and\nBelgium just now but there's no heavy shipments and\nvery little coming in from the market over in London.\nH.M.Jr:\nHow are you feeling?\n3\nI'm feeling fine and things have been so quiet I've\nbeen away most of the time that you've been away.\nH.M.Jr:\nGood for you.\nL;\nYes.\nH.M.Jr:\nAll right.\nL:\nAll right, now do you want to speak to Mr. McReynolds?\nH.M.Jr:\nYes. That's about everybody, isn't it?\nL:\nAh - Mr. McReynolds and Mr. Haas here.\nRegraded Unclassified\n61\n- 12 -\nH.M.Jr:\nAll right, I'll say \"Hello\" to both of them.\nL:\nRight.\nMcReynolds: Hello Secretary.\nH.M.Jr:\nHello Mac.\nHow are things going?\nMcR:\nRight fast.\nH.M.Jr:\nNo troubles?\nMcR:\nNo troubles.\nH.M.Jr:\nGood, I'll have to think up some.\nMcR:\nWell I've no doubt you will.\nH.M.Jr:\nYes.\nMcR:\nWe had - the only trouble we had was Wayne and Dan\nand I got in a golf game the other day and had a\nlittle difficulty.\nH.M.Jr:\nYou did.\nMcR:\nNot bad, you understand, but Dan won our money.\nH.M.Jr:\nI see.\nMcR:\n(Laughs)\nH.M.Jr:\nWell that's good.\nMcR:\nThe devil it is - I lost it.\nH.M.Jr:\nThat's all right.\nMcR:\n(Laughs)\nH.M.Jr:\nEverything's quiet, eh?\nMcR:\nYes, everything's quiet.\nH.M.Jr:\nGood.\nRegraded Unclassified\n62\n- 13 -\nMcR:\nAnd nothing to worry about at all.\nH.M.Jr:\nO.K.\nMcR:\nO.K. Here's George.\nHaas:\nHello Mr. Secretary.\nH.M.Jr:\nHello George. How are things with you?\nH:\nOh everything moving along fine and think we'll make\nthe schedule on the several jobs we had when you left.\nH.M.Jr:\nGood.\nE:\nAnd the other thing - I'll get off that letter on the\ngeneral business situation. In general, it's just\nabout as it was when you left.\nH.M.Jr:\nAh-ha.\nH:\nAh - the index - the weekly one is down a little bit\nbut nothing disturbing.\nH.M.Jr:\nYou're going to have something for me on the little\nbusiness man.\nH:\nYes sir.\nH.M.Jr:\nGood.\nH:\nI'll have that.\nH.M.Jr:\nMay I talk to Magill once more?\nH:\nYes sir.\nMagill:\nHello\nH.M.Jr:\nRos, have you seen the President recently?\nM:\nNo I have not, no sir, I've - well the last time I\nsaw him was at Cabinet two or three weeks ago.\nH.M.Jr:\nHas Taylor seen him?\nRegraded Unclassified\n63\n- 14 -\nM:\nYes, he's - well he's seen him at Cabinet too. I don't\nknow whether he's seen him in between or not.\nH.M.Jr:\nI mean I want to know how he feels.\nM:\nWell - ah - ah - very well I should say. He - there's\nbeen a lot of discussion about the Congressional situ-\nation, etc.\nH.M.Jr:\nDo you think there's any chance of their getting away\nbefore Labor Day?\nM:\nOh yes, my own guess would be, from the way they talk\nto me, that they're, pretty sure to be away by the 25th\nand there's a possibility they'll be away by the end\nof this week.\nH.M.Jr:\nI see.\nM:\nThat's the way it looks to me; I don't think there's\nany change.\nH.M.Jr:\nNow Ros -\nM:\nYes sir.\nH.M.Jr:\nI want to tell you. There's no need of your being\nthere over Labor Day week-end.\nM:\nWell that's very good of you. I thought I would - I\nwould try to get away and come back the day after\nLabor Day probably, if that was agreeable to you.\nH.M.Jr:\nI just want the people to be there that help me on my\nfinancing.\nM:\nWell I - I imagined that you'd be busy on that and\nthat you wouldn't want me to be reporting to you till\na little later.\nH.M.Jr:\nWell I mean I'd like to see you but I mean that would\nbe a good chance for you to get away.\nM:\nWell I'd'like to do it; I've been - it's just been\nimpossible to get away here with this bill in the\nstate that it's been\nH.M.Jr:\nYes.\nRegraded Unclassified\n64\n- 16 -\nH.M.Jr:\nI - I really haven't been working at all and I've\nhad a complete rest.\nM:\nWell that's - I'm glad you have because that's\nfine.\nH.M.Jr:\nAnd I'm really in good shape.\nM:\nWell now have you got anything you want to-day?\nH.M.Jr:\nNo.\nM:\nI've spoken to Mac - Bob McHugh - I guess he'll\ntake you up - the operator will take you up on\nthat.\nH.M.Jr:\nAll right.\nM:\nThank you. Goodbye.\nH.M.Jr:\nGoodbye to all of you.\nM:\nGood luck.\nUnclassifie\n65\n15 1 I\nM:\nexcept the week-ends but I - I'm feeling\nperfectly good but I would be glad to get a week\nor so down to camp.\nH.M.Jr:\nWell that would be a good time to get it.\nM:\nYes - yes, that would be fine. How - how are you\nfeeling, Henry?\nH.M.Jr:\nAh - you see because I want on my financing - ah -\nI need Wayne, I need Bell - I need George and his\npeople\nM:\nYes.\nH.M.Jr:\nand I'd like Archie to be around.\nM:\nI think they're all planning to be here.\nH.M.Jr:\nAll right.\nM:\nWhen would you plan to get here?\nH.M.Jr:\nWell I hope to get in there Friday night or Saturday\nmorning.\nM:\nI see. Well I probably won't be here then and I'll\ncheck in after Labor Day.\nH.M.Jr:\nAll right.\nM:\nWell how are you?\nH.M.Jr:\nI've had a grand vacation\nM:\nAnd have Mrs. Morgenthau and the children been well\nall the while?\nH.M.Jr:\nWell they've had colds; I had a little cold but it's\nbeen a perfect rest.\nM:\nWell that's fine. I'm - I'm glad you can get a rest\nout of it without taking things here too hard.\nRegraded Unclassified\n66\nJR\nGRY\nParis\nDated August 17, 1937\nRec'd 3:34 p.m.\nSecretary of State,\nWashington.\n1168. August 17, 4 p.m.\nFROM COCHR.N.\nParis Exchange market very quiet. French control\nacquired small amount starling 132.83. Forward franc more\noffered and intervention through British control to hold\nthree months rate at 3 and one-sighth apparently withdrawn\nthis afternoon. Rentes slightly lower. International\nshares hard hit by Shonghai trouble. Further increase in\nforeign Exchange holdings of Swiss National Bank as of\n.ugust 14 presumed to have resulted from tourist influx.\nPress report from Prague says Chinese Minister of\nFinance Kung has concluded arrongements with Skoda works\nfor 10,000,000 pound credit to China for purchase of\n\"industrial Boods\" in Czechoslovakin. Press report from\nBasel states Dutch Swiss banking credit which I mentioned\nyesterday was placed through Luescher and Company, Basel,\namounting to 100,000,000 Swiss francs is secured by Chinese\nsilver deposits.\nBULLITT\nMC:DDM\nRegraded Unclassified\n67\nRB\nCODAT\nPARIS\nDated August 18, 1937\nRec'd 7:05 D. m.\nSecretary of State\nWashington.\n1173, August 18, 5 D. m.\nFROM COCHRAN.\nFrench control yielded sterling throughout the day\nat from 132.87 to 94. While turnover was not heavy the\npressure was steady. Three months rate weakened to four\nfrancs against sterling. French rentes definitely lower.\nNo special cause for unsatisfactory feeling but contributing\nfactors are: rising cost of living, labor troubles which\ncaused cancellation of ILE DE FRANCE cruise, realization of\ndeficient French industrial production and Far East situation\nGerman Reich announces issue at 98.75 of 700,000,000\nreichsmarks of four and one-half treasury bonds reimbursable\nwithin fifteen years.\nPress reports visit by Kung, Minister of Finance of\nChina, to Austrian munition works Hirtenberg before pro-\nceeding to Genoa to embark for China. In commenting upon\nKung's\nRegraded Unclassified\n68\nRB\n-2-#1173, August 18, 5 p. M. from\nParis\nKung's reported arrangements in Europe Financial News\ntoday concludes:\n\"While the sympathies of financial circles in London\nand other western European centres are with China there is\na great difference between sympathy and the granting of\ncredits while the risk is so exceptionally high as it is\nat present, There can of course be no question of any\nissue of a public loan either in London or in other centres\nunless it is under the guarantee of the governments of the\nlending countries which does not seem to be forthcoming.\nThe schemes for Chinese financial transactions under the\nTrade Facilities Act or the export credits guarantee scheme\nwill have to await the advent of quieter times\".\nReferring to British customs figures showing arrival\nin London past week of one million two hundred fifteen\nthousand pounds sterling of Chinese gold, Financial News\nsays in part:\n\"China has sold a considerable proportion of her\nprecious silver stock to the American Treasury in recent\nmonths to fulfil her plan to adopt a gold -- CYM-- foreign\nexchange base for the currency. Some of the gold acquired\nhas been converted into dollars and some into sterling. The\naccuisition of sterling assets explains the arrival of Chinese\ngold in London\".\nBULLITT\nRegraded Unclassified\n69\nAugust 19, 1937.\nThursday.\nFrom Hawaii\n12:35 p.m.\nH.M.Jr:\nWell what are you going to do - get away now?\nMagill:\nWell I think I will. I think as soon as we get this\nbill situation wound up - I want to talk to Doughton\na little about the work of the Joint Committee\nH.M.Jr:\nYes.\nM:\nin connection with the tax program in the fall.\nH.M.Jr:\nI see.\nM:\nBut I can do that I think tomorrow morning and then\nif everything is quiet I think I'll get away.\nH.M.Jr:\nGood. Well can you stay away until after Labor Day?\nM:\nIf it's agreeable to you, I'll plan to come back\nthe day after Labor Day.\nH.M.Jr:\nWhy don't you do that.\nM:\nYes. Well I'd like to do it. If I get that two\nweeks it would be fine.\nH.M.Jr:\nI'd do that.\nM:\nYes.\nH.M.Jr:\nAh - Ross.\nM:\nYes sir.\nH.M.Jr:\nAh - just tell somebody when I'm through with this\nI want to talk to McHugh in his office.\nM:\nWell he wants to talk to you so he's got that in\nmind. I'll see that the operator gets the message.\nE.M.Jr:\nYes, I want to - have you got - have you got - is\nTaylor and Bell there?\nM:\nTaylor and Bell are here. Do you want Taylor?\nWhich do you want? Hello\nRegraded Unclassified\n70\n- 2 -\nH.M.Jr:\nYes.\nM:\nAh - do you want Taylor?\nH.M'dr:\nIf you please.\nM:\nAll right. Just a minute; he's coming on.\nH.M.Jr:\nRoss.\nM:\nYes sir.\nH.M.Jr:\nI think that you ought to feel awfully happy that\nyou're able to get this thing through because there's\nso few things have been gotten through.\nM:\nWell I - I do feel rather good about it because -\nah - we had a lot of fights in the Committee about\nit and it took a lot of strategy and figuring\naround and so forth and - and I - I am really quite\nhappy that we got it through without any more trouble.\nH.M.Jr:\nWell you get away now and then when we come back -\nas soon as my financing is over I expect to spend\nmost of my time on this tax business.\nM:\nGood. Good - well I'll try to be all freshened up\nfor you.\nH.M.Jr:\nGood.\nM:\nAll right, I'll put Wayne on.\nH.M.Jr:\nRight.\nTaylor:\nHello Henry.\nH.M.Jr:\nHello Wayne - I - in studying your cable I don't\nthink there is any question but what paragraph 1 -\nthe first one is the thing to do.\nT:\nAh - it looks more that way all the time, Henry.\nH.M.Jr:\nYes. Now what I want to ask you is this. I've got\na column in front of me. Ah - if we offered an issue\nof Friday before Labor Day at percentage\nT:\nYes.\nRegraded Unclassified\n71\n- 3 -\nH.M.Jr:\npayment on the 8th, is that right. You do it\non percentage for payment on the 8th? They pay on\nWednesday, don't they?\nT:\nNo this is - this is - ah - payment on the - you talk-\ning about bills?\nH.M.Jr:\nYes - I mean you couldn't offer it on Monday, the 6th,\nyou see?\nthat\nT:\nNo Bell) that wouldn't quite figure/way. (Talks aside to\nH.M.Jr:\nHello - hello.\nT:\nThat would go out on Wednesday which is the first,\nyou see?\nH.M.Jr:\nThe first - now would that - does that make 400\nmillion?\nT:\nThat would make four (talks aside again with Bell)\nH.M.Jr:\nIf we sold one on Wednesday the 1st?\n(Taylor is still talking aside to Bell)\nT:\nThe payment would be on September one.\nH.M.Jr:\nWhat's that?\nT:\nThe payment would be on September one.\nH.M.Jr:\nYes, well does that make 400 million?\nT:\nYes that makes 400.\nH.M.Jr:\nWell is there any reason why we can't sell two more?\nT:\nNo.\nH.M.Jr:\nWhat?\nT:\nNo.\nH.M.Jr:\nBecause I don't like - ah - I'd like to do that and\nthen, as I get it, I want to see if I was figuring\nright - there'd be one on the 8th and one on the 15th?\nRegraded Unclassified\n72\n- 4 -\nT:\nThat's right.\nE.M.Jr:\nAnd then on the 22d we could start a new series.\nT:\nWell we could either do that or we could skip the\nrest of September and start right with the first of\nOctober.\nH.M.Jr:\nHello\nT:\nYes it would be the 6th of October.\nH.M.Jr:\nI don't think I'd want to - well it -\nT:\nBut that's up to you. We're all right by doing the\ntwo on the 8th and the 15th.\nH.M.Jr:\nYou are all right?\nT:\nYes and that would give us a total of 500.\nH.M.Jr:\nOn the 8th and the 15th.\nT:\nWhat?\nH.M.Jr:\nI say let's count definitely on doing it.\nT:\nWell that checks completely with the way we feel.\nH.M.Jr:\nOn the 8th and the 15th.\nT:\nYes, and that will give us time to look around.\nIf we want to keep on with them - fine - otherwise\nwe could - what?\nH.M.Jr:\nWe\nup to the new series after\nI come back.\nT:\nThat's right.\nyou see,\nH.M.Jr:\n(Sag I don't know what price your bills have sold for\nthe last two issues because I haven't had any news-\npapers.\nT:\nWell we've been all right on them. The short bills -\nah - have been going - ah - around 22.\nRegraded Unclassified\n73\n- 5 -\nH.M.Jr:\nHave they got any - has it been going better or\nT:\nThey went better than the long ones up to the last\ntime\nH.M.Jr:\nYes.\nT:\nand the last time it switched a little bit.\nH.M.Jr:\nI see. I see. Ah - what rate did you get the last\ntime on the long ones?\nT:\nAbout forty (aside to Bell: 46, wasn't it?) 46.\nH.M.Jr:\nI see. Well that's a good rate.\nT:\nYes.\nH.M.Jr:\nThat's a good rate.\nT:\nAh - we've helped by an account of - we've allowed\npayment by credit, you see?\nH.M.Jr:\nI see.\nT:\nAnd that helped a little bit on the short ones\nparticularly.\nH.M.Jr:\nWell you'd want to tell - ah - ah - on Monday the\n30th I think we ought to say something, don't you\nthink so?\nT:\nAh - yes, at least then.\nH.M.Jr:\nWhat?\nT:\nI think at least then.\nH.M.Jr:\nAt least then.\nT:\nYes. In other words, not later than that?\nH.M.Jr:\nWhat?\nT:\nNot later than that. In other words, if we could -\nif we could say that we weren't going to ask for any\ncash\nRegraded Unclassified\n74\n- 6 -\nH.M.Jr:\nYes.\nT:\nfairly soon, I think it would help the market\nbecause the boys are guessing - ah - they're figuring\nthat we're going to refund those 350 bills, you see?\nH.M.Jr:\nI see.\nT:\nAnd they're talking about an issue which will be anywhere\nfrom a billion one up to a billion three.\nH.M.Jr:\nWell I'll talk to you again next Tuesday or Wednesday.\nT:\nRight, but we - we check completely on the two more\nbills in Septem - ah - two more issues in September\ninto December.\nH.M.Jr:\nAh - we check on that?\nT:\nAbsolutely.\nH.M.Jr:\nGood.\nT:\nAnd that gives you - that puts us in nice shape so\nthat the maximum amount at any one time\nH.M.Jr:\nYes.\nT:\nwould be two billion eight.\nH.M.Jr:\nAh-ha.\nT:\nAnd then that one could work down at periods, you see?\nH.M.Jr:\nYes. Well that sounds all right. Now - ah - what\nare my March 142 - what are they selling at?\nT:\nAh - on a 163 basis but the feeling isn't terribly\ngood at the minute.\nH.M.Jr:\nYou say the what?\nT:\nThey're selling on a 163 basis.\nH.M.Jr:\nWhat does that make them - ah - par what - par 20?\nRegraded Unclassified\n75\n- 7 -\nT:\nPar 16.\nH.M.Jr:\nPar what?\nT:\nIt's about par and a half.\nH.M.Jr:\nOh they're off a little bit, aren't they?\nT:\nYes, they're off since you last - ah - since we\nlast talked to you and we had another speech\nthat didn't help the market too much but it had it's\n(laughs)\nH.M.Jr:\nWell hello.\nT:\nYes.\nH.M.Jr:\nAh\nT:\nIt wasn't a Green Bay one but it was\nH.M.Jr:\nWith Congress gone and out of the way I think the\nmarket ought to improve.\nT:\nWhat?\nH.M.Jr:\nThe market ought to improve as soon as Congress goes\nho\nhome.\nT:\nIt won't hurt it any.\nH.M.Jr:\nAll right. Now what about gold?\nT:\nAh - gold's about the same; we've got a little bit\nmore coming from Japan now - I think its six million.\nH.M.Jr:\nAh-ha.\nT;\nAh - and pounds act awfully strong.\nH.M.Jr:\nThey do.\nT:\nYes. They're - they might hit $5.00 to-day.\nH.M.Jr:\nReally?\nRegraded Unclassified\n76\n- 8 -\nT:\nYes.\nH.M.Jr:\nAny more gold coming from\nT:\nFrom where?\nH.M.Jr:\nT:\nAh - - six.\nH.M.Jr:\nNew?\nT:\nYes.\nH.M.Jr:\nAh-ha. Ah-ha.\nT:\nIt isn't much any one place but it's - ah -\n.......\nH.M.Jr:\nIt trickles in.\nT:\nYes and particularly with the strong pound, you see?\nIt - ah - ah - it - if the pound were a little lower\nand the gold rate had been about as it is why the -\nah - the gold would go there instead of here.\nH.M.Jr:\nI see. All right, can I say hello to Dan?\nT:\nHe's right here.\nBell:\nHello\nH:M.Jr:\nHello Dan.\nB:\nHow are you?\nH.M.Jr:\nFine. Aren't you perfectly happy about that sug-\ngestion?\nB:\nYes, it's O.K. I agree with it entirely.\nH.M.Jr:\nYou - you feel all right?\nB:\nYes. I apologize for not getting off a report on\nMonday but I missed the plane.\nRegraded Unclassified\n17\n- 9 -\nH.M.Jr:\nWell -\nB:\nSo I'll have one next Monday and you can read it\non the boat.\nH.M.Jr:\nGood.\nB:\nAh - let's see you're leaving there when - Saturday?\nH.M.Jr:\nI leave here on the 28th?\nB:\nThat's - ah -\nH.M.Jr:\nThere's one more plane will catch me.\nB:\nYes, well I'll get the next plane sure.\nH.M.Jr:\nRight.\nB:\nAll right.\nH.M.Jr:\nAre you going to get any vacation now?\nB:\nWell (laughs) I haven't given much thought to it.\nBut there may be a possibility after this financing\nis over.\nH.M.Jr:\nI see.\nB:\nI'll have to skip some of the Budget Hearings and\njust let the boys go ahead with it in order to get\nany.\nH.M.Jr:\nYou ought to figure on it right after the financing.\nB:\nWell I will a little but our Budget Hearings will\nstart about the 20th. But I guess I can arrange\nthe schedule and then go off and let the boys do\nthe trick.\nH.M.Jr:\nI think you'll have to.\nB:\nYes.\nH.M.JrL\nAh-ha.\nB:\nWell I'll have to think about it anyhow.\nRegraded Unclassified\n- 10 -\n78\nH.M.Jr:\nI forgot to ask Wayne how is he standing it physically?\nB:\n(Laughs) Fine,he says.\nH.M.Jr:\nHe is.\nB:\nYes. It doesn't look as though he lost any weight.\nH.M.Jr\nAnything you want to say to me?\nB:\nHow's that?\nH.M.Jr:\nAnything you want to say to me?\nB:\nNo I think everything is running along bretty good.\nAh - if we get Congress out of here why some of our\nworries are over and\nH.M.Jr:\nThat\nBill the way I read it in the New\nYork Times I don't think they're going to build many\nhouses.\nB:\nNo - no they won't.\nH.M.Jr:\nWhat?\nB:\nNo, that's right.\nH.M.Jr:\nThat's what I thought.\nB:\nYes. There's one thing up there that's bothering\nme a little and that's this cotton business.\nH.M.Jr:\nYes. That's one of those things who told what last,\neh?\nB:\nYes, I got some\nstuff that Senator Byrnes\nis trying to use some of the Customs money to - ah -\nmake a gift of about 3¢.\nH.M.Jr:\nI see,\nB:\nThat means that the Budget is sunk to the extent of\nabout 65 million,I understand.\nRegraded Unclassified\n79\n- 11 -\nH.M.Jr:\nWell is there anything you can do about it?\nB:\nAh - I don't think SO. I understand that it's had\nthe approval of higher-ups.\nH.M.Jr:\nAh-ha. Well it's a lot of money.\nB:\nWell I'm just hoping that it will get caught in the\ncog and they'll go home before anything's done.\nH.M.Jr:\nAh-ha. I hope so too.\nB:\nYes. Well we'll talk to you next week, eh?\nH.M.Jr:\nNext week.\nB:\nAll right, good-bye.\nH.M.Jr:\nWait a minute.\nB:\nYes.\n(Pause)\nB:\nYes.\nH.M.Jr:\nWayne?\nB:\nOh just a minute.\nTaylor:\nHello.\nH.M.Jr:\nAre you standing it all right physically?\nT:\nI certainly am.\nH.M.Jr:\nAnd it hasn't been too hot?\nT:\nNo it's - ah - the last couple of days it's been\npretty rough - I mean as far as the weather goes -\nbut it's really been all right.\nH.M.Jr:\nO.K.\nT:\nIn case of need I have an extra guilder and that\nseems to work out.\nRegraded Unclassified\n- 12 -\n80\nH.M.Jr:\nAll right. (Laughs)\nT:\n(Laughs)\nH.M.Jr:\nGoodbye.\nT:\nGoodbye.\nRegraded Unclassified\n81\nTREASURY DEPARTMENT\nWASHINGTON\nAugust 19, 1937\nMy dear Mr. Secretary:\nIn accordance with your telephone request, there is\nattached & current business situation memorandum and some\naccompanying charts. I was glad to hear that you are\nhaving a good rest and enjoying your vacation.\nMy best wishes for a pleasant return voyage,\nSincerely,\nGeorge C. Haas,\nDirector of Research and Statistics.\nHonorable Henry Morgenthau, Jr.,\nRoyal Hawaiian Hotel,\nHonolulu,\nTerritory of Hawaii.\nEnclosure\nRegraded Unclassified\nTREASURY DEPARTMENT\n82\nCONFIDENTIAL\nINTER OFFICE COMMUNICATION\nDATE August 18, 1937\nTO\nSecretary Morgenthau\nFROM\nMr. Hass JOH\nSubject: The Business Situation\nBusiness activity during July and early August has on\nthe whole been well maintained. In large measure, however,\nit has been maintained on backlogs of unfilled orders built\nuo in earlier months, while the volume of new buying has con-\ntinued small relative to the current level of production. It\nseems evident that unless increased buying appears, to replace\nbacklogs as they become exhausted, a slackening in business\nactivity and possibly a temporary decline is to be expected.\nIn our revenue estimates we have made allowence for a tem-\nporary decline of this nature, since we believed it likely\nthat a period of adjustment would follow the high production\nlevels of last spring, which were apparently excessive as\ncompared with the movement of goods into consumption. The\nlonger term outlook, however, continues to favor a general\nunwerd trend in business, encouraged by low interest rates,\nimproved capital markets, a deficiency in building, and in-\ncreasing purchasing power of farm and factory workers. The\neffect of these may be offset to some extent, however, by a\ndecrease in the net volume of Federal spending.\nSome tendency toward a lull in business was seen during\nJuly. The Federal Reserve Board preliminary estimate of in-\ndustrial production for that month shows a gain in the index\nof only 2 points from the strike-depressed June level of 114\n(revised), despite 8. recovery in steel production to the\nhighest level (seasonally adjusted) since Jenuary. A sharp\ndecline in textile activity was the most important adverse\nfactor. In comparison, the index stood at 118 during the\nmonths of March, April, and May. The New York Times index\n(Chart 1) showed some tendency of business to weaken during\nthe latter part of July and early August, despite well-\nmaintained steel activity.\nFactors in the Business Outlook\nThe relatively light volume of new buying appears to\nus of outstanding importance in the near-term business out-\nlook. The volume of new orders in most industries, judging\nRegraded Unclassified\n83\n- 2 -\nfrom our confidential figures from reporting companies and\nfrom various trade reports, has been insufficient to maintain\nindustrial production at its present level. In terms of\nphysical volume, new orders appear to be running at about\nthe same level as last year at this time, or somewhat lower.\nThe level of industrial production during the fall months of\nlast year, A.B. measured by the FRB index, was about 12 per-\ncont below the present level.\nIndustrial production has been maintained this summer\nlargely on backlogs of orders built up during earlier\nmonths. The volume of such orders must have been unusually\nlarge. In cotton textiles, for example, new orders have\nbeen running at B. lower level than production almost con-\ntinually since March, yet it was not until July that back-\nlogs were reduced sufficiently to drop production to B\nsharoly lower level. Cotton consumption by mills during\nJuly was 15 percent below that in June, and lower than the\nconsumption in July of last year.\nA similer situation appears to exist in the steel indus-\ntry. Production has been maintained at recent levels largely\nbecause of an unusually heavy volume of old orders. New buy-\nins has been light since the latter part of April. Although\nexpressions of confidence in the fall outlook for steel have\nbeen quite numerous recently, no definite signs of an upturn\nin steel buying have so far appeared. The Iron Age says that\nonly at Chicago has there been a reversal of the downward\ntrend of new orders, and that even there the change has been\nmoderate.\nA marked increase in payrolls in recent months is con-\nsidered by business observers as one of the outstanding\nfevorable factors in the business outlook. This may already\nbe having an influence on retail buying, since department\nstore sales and variety store sales during July (both\nsessonally adjusted) showed an increase over earlier months.\nDuring August so far, retail sales are reported to be some-\nwhat disappointing, though definite data are not available.\nDollar sales of merchandise in small towns and rural areas\nduring July, according to the Department of Commerce index\nfigures, following B. previous slight decline from the peak\n(seasonally adjusted), declined 4 percent from the June\nestablished in May. The July sales were 4 percent higher\nthan during the corresponding month of last year.\nRegraded Unclassified\n- 3\n84\nPurchases of automobiles in recent months have shown a\ntendency to lag, new car registrations during April, May, and\nJune being lower than last year. Some upturn appears likely\nduring July 8,8 a result of prospective price increases for\n1938 models, but the increased prices may later have an\nadverse effect on new car buying.\nA continued rise in rents during the summer is a factor\nfavoring increased building activity. The sharpest upturns\nin residential rents during July occurred in large indus-\ntrial cities, according to reports from the Department of\nLebor. The advance in rents 16 expected to be accelerated\nafter October 1, the date when, leases on dwellings are\ngenerally renewed. More stable building costs will also\nfevor an upturn in construction. Five of twenty-six cities\nreporting to the Federal Home Loan Banks report that resi-\ndential building costs declined in July for the first time\nin many months. Total construction in 37 Eastern States\nduring July, according to the F. W. Dodge figures, reached\na new high for any month since April 1931, making a gain of\n9 percent over the corresponding month of last year. The\nmost pronounced gain, 44 percent, was in non-residential\nconstruction awards (largely commercial), which reached\nthe highest level since July 1930. Residential construe-\ntion awards during July were 12.5 percent higher than in\nJuly of last year, while public works and utility awards\nshowed B 19 percent decline.\nA continued upward movement in commercial loans\nsopears a favorable factor in the business picture. The\nvolume of commercial paper outstanding at the end of July\n7/MB the highest since January 1931, and made the best\nJuly showing since 1930. Commercial borrowing this year\nhas not shown the usual summer slackening, but instead\nhas continued to increase. It 1s reported that a sub-\nstantial part of the borrowing 18 for the financing of\nplant expension.\nNew capital flotations during July did not hold the\nsharp gain registered in June, but for the first half\nyear they made B. very favorable comparison with the cor-\nresponding period of 1936, although total security flota-\ntions have declined. Estimated gross proceeds from\nsecurities registered with the SEC during the first half\nof 1937 were about 15 percent less than during the cor-\nresponding period of 1936. The estimated net proceeds\nRegraded Unclassifie\n85\n4\nto be used for plant expansion and working capital, however,\nboth in percentage of the total and in aggregate amount, was\nthe highest for any first half year since registration began\nunder the Securities Act of 1933. New corporate security\nflotations 8,6 reported by the Commercial and Financial\nChronicle, amounted to only $139 millions in July 1937, as\nconcered with $294 millions in July 1936, but the amount of\nruch flotations for new capital as contrasted with refunding\nnurnoses amounted to $82 millions in July 1937, 86 compared\nwith only 170 millions in July 1936. During the last several\nweeks the new issue market has been quiet.\nCommodity and Security Prices\nCommodity orices (Chart 2) have recently tended down-\nmrd. Commodity futures, BB represented by the Dow-Jones\nfuture. index, have reached new low levels on the general\ndecline which began in March, while the BLS index of 30\nsensitive commodities has held above its earlier lows.\nDeclining prices for cotton and grains Aue to large\ncroo prospects have recently been an important factor in\nthe futures index. The total wheat crop is now estimated\nat 890 million bushels, 8.8 compared with 626 millions last\nyear. Despite the increased production, however, prices\nhave been sustained at 8. higher level than last year by\nheavy crop deterioration in Canada, where conditions are\nreported to be the worst in 30 years, and by Door crops\nin other wheat countries. Farm prices for whest on\nJuly 15 everaged about 31.13, AS compered with a crop-\nyoar average of $1.00 for the 1936 crop.\nThe Government's August cotton crop estimate of 15.6\nmillion bales, as compared with 12.4 millions last year,\nmade the average yield per acre the highest on record. In-\ncreased foreign crop prospects, together with the large\nestimate of the domestic crop, have reduced futures prices\nto hear the 10-cent level. Present prospects indicate that\nthe larger crop may bring farmers little, if any, more in-\ncome than the smaller crop of last year. It appears likely,\nhowever, that a crop loan, or more probably a loan and\naljustment payment plan, will be applied to this year's\ncrop. which would add to the incomes of cotton farmers.\nThe President has consented to a crop loan, provided\nCongress would out crop control legislation first on the\ncelendar next session. The Senate has adopted a resolu-\ntion to this effect, which the House Agriculture Committee\nhas accepted.\nRegraded Unclassifi\n86\n- 5 -\nSecurity prices have shown divergent trends. Government\nbonds and notes (Chart 3) showed & general upward movement\nduring July, most groups exceeding their May-June highs. A\nmoderate recession has taken place during August. Corporate\nbond prices, 88 measured by the Dow-Jones combined average,\nhave held steady, with a slightly sagging tendency, since\nthe sharp recovery early in July. Industrial and utility\nbonds have shown greater strength than railroad issues. In\nthe stock market, price trends have been mixed. Industrial\nstocks (Chart 4) have shown a steady rise since the middle\nof June, reaching nearly to the high levels of early March.\nUtilities have shown a moderate gain, but have sagged some-\nwhat during the past three weeks. Railroad stocks have\nshown very little improvement, and are now but slightly\nabove their June lows. Foreign transactions (shown on\nChart 4) continued moderately on the buying side during\nJuly, but more recently the buying and selling has been\npractically equal.\nSTOCK PRICES AND FORBIGN TRADING\nIN DOMESTIC STOCKS\nDaily Movement, Dow-Jones Industrials\nand Foreign Net Purchases and Sales\nDOLLARS\nin\n196\n192\n192\nTHE\nPrices\n182\n188\nPth\n184\n184\n180\n180\n176\n176\n172\n172\n168\n168\nDOLLARS\nDOLLARS\nVILLIONS\nWILLIONS\nHet Purchases\n4\n4\no\no\n4\n+\nNet Sales\nI\na\n24\n3\n10\n17\n24\n31\n7\n14\n21\n25\nin\n12\n19\n2\n9\n:\n16\n23\n30\n7\n14\n21\n28\n4\n11\n18\n25\nMARCH\nAPRIL\nMAY\nJUNE\nJULY\nAUGUST\n1937\nTotal Weekly Poreign Trading, Weeks Ending Wednesday\nDOLLARS\nCOLLARS\nMILLIGHS\nWILLIONS\n40\n40\nNet Purchases\n20\n20\no\nD\nRegraded Unclassified\nNet Sales\n87\n20\n20\nThant CB F\n40\n7\n24\n3\nis\n17\n24\n31\n7\n14\n21\n20\n5\n12\n19\n26\nN\n9\n16\n23\na\n7\n14\n21\n28\n4\nIt\n18\n25\nMARCH\nAPRIL\nMAY\nJUNE\nJULY\nAUGUST\n1937\n- el the Sairmary el the -\nP - 149 - A.\n- of - - -\nChart 3\nPrice Fluctuations\nU.S. SECURITIES BY MATURITY CLASSES\nYield Fluctuations\n1936\n1937\nMAR\nMAY\nJULY\nSEPT\nNOV\nJAN\nMAR\n1936\n1937\nMAY\nJULY\nSEPT\nDOLLARS\nNOV.\nInverted Seale\nMAR\nMAY\nJULY\nSEPT\nNOV.\nJAN.\nMAR\nDOLLARS\nMAY\nJULY\nSEPT.\nimpried Boals\nNotes\nPER CENT\nFER CENT\nNotes\n102\nUnder / Year\n102\n4\n4\nLimiter y Year\n100\n100\na\na\n154\n104\n/ta2 Peare\no\no\nICE\n102\n100\n106\n4\n.\n(to2 Years\n104\nZin3 Years\n104\na\n8.\n(or\n102\n(2\n1,2\n108\nID#\n4\n+\n108\n106\n3105 Years\ne\na\n184\n104\n102\nJAN\nMAR\nMAY\n102\n1.2\n2103 Years\n1.2\nJULY\nSEPT\nNOV\nJAN\nMAR\nMAY\nJULY\nSEPT\nNOV.\n114\n114\nBonds\n1.6\n1.6\n114\n112\n110\na\na\n110\n10%\nStal0 Years\n(08\n12\n( 2\n3eo5 Years\n124\n106\n16\n1.0\n104\n104\n2.0\n2.0\nTN\n112\n24\n2.4\n110\n110\nJAN\nMAR\nMAY\nJULY\nSEPT\nNOV\nJAN,\nMAR\nMAY\nALY\nSEPT\nNOV.\n12\n12\nBonds\n104\n108\n1.6\n16\n13A\n10ta20 Years\nIDÉ\nto 10 Years\n2.0\n2.0\n104\n104\n102\n102\n2.4\n1.4\n100\n100\n20\n3.0\n118\n110\n24\n14\n198\n108\nIO se 20 Years\n2.8\n28\n188\n10%\n15a\n24\n2.4\n104\n20 Years and Over\n102\n102\n28\n2.8\n20 Years and Over\n160\n/\n---\n100\n12\nJULY\nNEFT\nNOV\nJAN\nMAR\nMAY\nJULY\nNOV\nJAN\nMAR\nMAY\nJULY\nSEPT\nNOV\nJAN\nMAR\nMAY\nAAY\nSEPT\n3.2\nMAY\nSEPT\nHOV\n1936\n1937\n1936\n1937\n- - is computed - followe:- the yiside of all Tesels of failing -\nwithin the specified autority period ACT first Date APREADA is the -\nMAN the dollar price of . these 10 a security at the afd-getal of the\nare - aptority date. Tisles ses invial is all - -\nclass, - by dates. Tisida AFR required is will\nwilling - Mr. - in Flast - Illnes selling tale sur.\ndate - ammilies willing starre Mr. and - Fisst minity - - with below per.\n/\nMotor is the I tome IN traning - - at liams is # state\nPASA\nRegraded Unclassified\ndi\nI 5 / 1. , 1. I\n- -\n2061\nAVIP\nLESI\n9161\n7\n%\n61\n21\nin\n5Z\nzz\nSI\n$\nE1\n11\n*1435\nArne\nAVT:\n*avn\n\"NWP\n'ACM\nvon\n$\nare\n19\n55\n=\n99\n00\n8\nV.S., U.K., FRANCE\nCURRENCY AGREEMENT\nPRESCH DEVALUATION,\na\nV\n69\n89\n&\nstening\nB.\n02\n02\nV\na\n&\n\"\n\"\nALIGORICO\n%\nN\nse\nla\ns\n(******)\n1045 a\n92\n76\nDE\nà\n(*s - (ii)\n1045 361115435 DE\n82\nBL\nas\n18\nOR\nOR\n06\ndel\n2\nze\n1830\n1830\n1430\n17d\n02\n61\nzu\n5\n62\nD\nor\n\"\n-\n52\nni\n=\nto\n17d\n*WM\nor\nATTE\nAVN\n'IVE\n'NYF\n*AOM\n*Lass\n#38831435\n2361\n9661\n2561\n(wrive to 30VH3AV)\nDaily\n1924 I\nPRICES COMMUTITY 40\na Chint\n68\nChart 1\n90\nPER\nSTEEL INGOT PRODUCTION\nCENT\n\"Per Cent of Capacity\" (Dow Jones)\n100\n37\n80\n60\n36\n40\nJAN.\nAPR.\nJULY\nOCT.\nBUSINESS ACTIVITY - N.Y. TIMES\nPER\nCENT\nSeasonally Adjusted\nEst. Normal=100\n110\n37,\n100\n'36\n90\n80\nJAN\nAPR.\nJULY\nOCT.\nOffice of the Secretary of the Treasury\nC-142 C\nOrigina of 1 and Statestics\nRegraded Unclassified\n91\nRB\nCODAT\nParis\nDated August 19, 1937\nREC'd 3:41 P. m.\nSecretary of State\nWashington.\n1178, August 19, 5 P. M.\nFROM cochran.\nVrench control had rather heavy day supporting through\npurchases by Comptoir spot franc against sterling at one\nthirty two point nine fifty five to ninety-two. Interven-\ntion in three months franc was made at London through\nSociete Generale to reduce discount from four and seven\neighths to four and five eighths. All currencies weak\nagainst sterling. Bank of France statement as of August\ntwelve showed no important changes. French rentes lower,\nMarket Estimates that French fund has averaged purchases\nof ONE hundred million francs each of past three days to\nprevent more serious slump in French Government securities.\nTarket pessimism today is due in part to rumor of differences\nbetween Chautemps and Blum on railway reorganization which\nmay split Cabinet.\nSentiment\nRegraded Inclassified\n92\nRB\n-2-#1178, August 19, 5 p.m. from Paris\nSentiment is also influenced by financial writers who\nare beginning to think that French breathing spell may bE\nnearing an end. FINANCIAL NEWS London for instance says\ntoday in part: \"As a matter of fact the prospects of the\nfranc have not become worse during the last few days simply\nbecause they have never really become better. Taking a\nlong view, the outlook is the same as it was a month or\ntwo 830. M. Bonnet's measures have failed to bring about\na fundamental restoration of confidence. The volume of\nrepatriations has been negligible even though the outflow\nof capital has come to a hault. If the best the franc can\ndo during the holiday season is to remain 'neutral' it is\nlikely to become worse after the holiday season when the\nseasonal influx of revenue has subsided and when the\npoliticians have once more DECOME restive\".\nPeriod for subscription to four percent nineteen thirty\nSEVEN Treasury bonds to convert four and one half percent\nnineteen thirty-four expired today, is Extended\nto twenty third.\nBULLITT\nKLP\nX\nRegraded Unclassified\n93\nRB\nCODAT\nPARIS\nDated August 20, 1937\nRec'd 2:25 p. m.\nSecretary of State\nWashington.\n1182, August 20, 5 P. m.\nFROM COCHRAN.\nBetter sentiment prevails on Paris market today.\nFrench control has acquired some sterling at OAF thirty-\ntwo point Eighty-six and a fEW dollars at twenty-six point\nsixty-four. Forward rate has been held at four and one\nhalf. .ith only slight assistance from the fund rentes\nhave remained practically unchanged.\nFrench adverse trade balance for first SEVEN months\n1937 amounted to ten and one half billion francs as com-\npared with five and one half billion same period last year.\nWhile tourist trade is supporting franc at present the\nheavy deficit in the trade balance if continued will surely\nhave repercussions on the currency.\nLiscussing dollar's weakness FINANCIAL NEWS LONDON\ntoday said in part: \"Whatever may happen to the dollar\nin the\nRegraded Unclassified\n94\nRB\n-2-#1182, August 20, 5 p. m. from\nParis\nin the short run, in the somewhat longer run the factor\nthat will have most influence in deciding its tendency\nwill be the measures taken against the influx of 'hot\nmoney'. Any drastic steps whether in the form of dis-\ncriminatory taxation or in the form of disclosing informa-\ntion on foreign dollar assets would inevitably lead to a\nlasting weakening of thE dollar especially as similar steps\nare not EXPECTED to bE taken in this country. Since,\nhowever, President Roosevelt has been threatening with\nanti- 'hot money' measures EVEr since November 1935 and\nnothing has so far been done about it the market is\nnaturally inclined to minimize the probable importance of\nthis factor\".\nBULLITT\nGW\nKLP\n03413323\nst\nRegraded\n95\nRB\nCODAT\nParis\nDated August 23, 1937\nRec'd 3:45 p. m.\nSecretary of State\nWashington.\n1193, August 23, 6 p. m.\nROll COCHEAN.\nLittle business and no importart changes on Paris\nExchange market. Slightly better sentiment and small\nimprovement in forward franc and French rentes attributed\nto week-End speech by Bonnet who said at least three\nbillion francs (out of five point four billion outstanding)\nof the four and one half Germain Martin bonds had been\ne inverted into the new four percent issue and pointed\nout other developments which WERE likewise making the\nTreasury situation Easier.\nLONDON TIMES today contrasts latest French and\nGerman fortign trade returns. In spite of depreciated\ncurrency French fortign trade deficit increasing because\nof higher costs of production and prices. FINANCIAL NEWS\ntoday stresses seriousness of the French price situation\nand recommends peaceful negotiation toward releasing\nindustry\nRegraded Unclassified\n96\nRB\n-2-#1193, August 23, 6 p. m. from\nParis\nindustry from rigid forty hour WEEK. French Cabinet\nwill meet tomorrow to begin study of final SET of decrees\nunder authority Expiring August 31.\nPress reports Chinese l'inister of Finance Kung has\ncancelled sailing from Genoa and returned to Bad Nauhtim\nfor cure.\nBULLITT\nKLP\n/\n/\n/\n/\nRegraded Unclassified\n97\nAugust 23, 1937.\n12:32 p.m.\nFrom Hawaii\nTaylor:\nHello Henry.\nH.M.Jr:\nGood morning.\nT:\nGood morning to you.\nH.M.Jr:\nAh - Wayne - ah - the main thing that I'm calling\nup about is - 1 - I'd like to talk to Bell first,\nif I could.\nT:\nHe's right here.\nH.M.Jr:\nThank you.\nBell:\nHello\nH.M.Jr:\nHello - Dan?\nB;\nYes.\nH.M.Jr:\nGood morning. In the first place, I never got\nyour summary - hello\nB:\nYes.\nH.M.Jr:\nYou know you were going to send me a summary up\nto the 15th of July or something like that?\nB:\nYes but as I told you, when I talked to you last\nweek, I missed the plane.\nH.M.Jr:\nOh did you miss last week's plane?\nB:\nI missed the plane, yes, and it's going out of\nhere to-day and will catch Wednesday's plane.\nH.M.Jr:\nOh you're going to send it this week?\nB:\nYes, and you'll get it, I take it, Friday\nH.M.Jr:\nI didn't get George Haas' either.\nB:\nHow's that?\nRegraded Unclassified\n98\n- 2 -\nH.M.Jr:\nGeorge Haas was going to mail me a review of the\nbusiness situation.\nB:\nWell I don't know - well he sent that. Wayne says\nthat he sent it.\nH.M.Jr:\nWhat's that?\nB:\nWayne says that he has sent that.\nH.M.Jr:\nWell I never got it.\nB:\nI see. Well it probably missed the plane also.\nH.M.Jr:\nNow Dan.\nB:\nYes.\nH.M.Jr:\nAh - I see that they got through that 60 million\ndollars for the cotton.\nB:\nThey sure did.\nH.M.Jr:\nAnd they dropped out this other money.\nB:\nThey dropped out what?\nH.M.Jr:\nThe money for the sugar.\nB:\nAh - yes, except 250 thousand dollars for administrative\nexpenses.\nH.M.Jr:\nYes.\nB:\nThey'll drop that\nH.M.Jr:\nI'm really calling up for this. What would happen if\nthe President vetoed the Third Deficiency Bill?\nB:\nWell in one or two places it would probably do some\nharm, in a small way.\nH.M.Jr:\nWell you remember last year we didn't get our last\nDeficiency Bill through.\n99\n- 3 -\nB:\nNo, it was a couple of years ago - Huey Long's\nfilibuster\nthe\nH.M.Jr:\nYes, and we went along all right.\nB:\nYes.\nH.M.Jr:\nI wish you'd think about seriously whether we could\nrecommend to the President that he veto that.\nB:\nAh - you mean - ah - merely because of the 60 million?\nH.M.Jr:\nYes.\nB:\nFor cotton loan?\nH.M.Jr:\nYes.\nB:\nWell - ah (laughs) I think that - ah - he's agreed\nto it.\nH.M.Jr:\nWell that's what I was afraid of.\nB:\nOh yes, he's agreed to it - ah - really had agreed\nto it before I ever got in on it; knew anything about\nit.\nH.M.Jr:\nAh-ha.\nB:\nAnd they had quite a time over the facts; had three-way\nconversations between Billy Byrnes and McIntyre and\nmyself and Cliff Woodruff - ah - McIntyre and myself\nand apparently the President had committed himself\non it and there wasn't anything we could do about it.\nH.M.Jr:\nAh-ha.\nB:\nI tried to get it out.\nH.M.Jr:\nWell now is that a straight grant?\nB:\nIt's a straight grant, yes.\nH.M.Jr:\nA straight grant.\n100\n- 4 -\nB:\nIt would be a benefit payment - ah\nH.M.Jr:\nWhat's that?\nB:\nIt would be a benefit payment of not to exceed 3¢\na pound.\nH.M.Jr:\nAn - 3¢.\nB:\nYes, you see they're figuring on 12# a pound.\nThe loan will be either 96 or 10¢.\nH.M.Jr:\nOh it's going to be a loan?\nB:\nWell the loan will be from the Commodity Credit\nof either 90 or 10¢ and then the differential will\nbe the benefit payment. If you get a loan at 10c\nthen the differential is only 24 but if you get a\nloan of 9¢ then the benefit payment will be 3¢.\nH.M.Jr:\n11¢ - if cotton sells at 11 they get 3¢.\nB:\nSo I understand, yes. They get a benefit payment.\nB.M.Jr:\nYou mean the higher the price the more they get?\nB:\nAh - the other way Wayne says.\nH.M.Jr:\nYes that's what I should think but I mean - but I\nwon't go into details but from the standpoint of\ngetting the veto it's water over the dam.\nB:\nOh I think SO. I think the President had a con-\nference on it - ah - ah - a week ago Friday.\nH.M.Jr:\nI see,\nB:\nAnd I didn't know anything about it until - ah -\nFriday morning\nH.M.Jr:\nAh-ha.\nB:\nwhen I was trying to get Cliff Woodruff to\nget it out in Conference and I was told by the\nSecretary of Agriculture that it was all agreed to\nand - at a previous week's conference.\n101\n- 5 -\nH.M.Jr:\nWell -\nB:\nIt's all set in everything apparently.\nH.M.Jr:\nWell it's just as well I'm in Honolulu.\nB:\nWell easier. I think (laughs) you probably are resting much\nH.M.Jr:\nYes.\nB:\nThis has been a terrible place in the last week\nH.M.Jr:\nAh-ha.\nB:\nand our budget's been hurt materially - both\n'38 and '39.\nH.M.Jr:\nHas it?\nB:\nYes. 365 million, I think, in each year on that\naccount alone.\nH.M.Jr:\nYes.\nB:\nAnd - ah - if this sugar bill goes through - ah -\nit won't quite pay for itself and - ah - the way the\nthing is working out now - if it's vetoed now why\nit will reenact at the next session and, it will cost\nus money because we'll lose a half year's revenue,\nwhereas the benefit payments will go in for the\nwhole year.\nH.M.Jr:\nI see.\nB:\nSee?\nH.M.Jr:\nWell that's that.\nB:\nDo you want me to give you the picture here from the\nlast of Saturday night, based on what we talked about\nlast week - 150 million dollars in Treasury bills up\nto the 15th of September on maturity in December?\nH.M.Jr:\nYes.\n102\n- 6 -\nB:\n100 million extra in September for maturity in March.\nH.M.Jr:\nYes.\nB:\nAnd 200 million from the period in March to be issued\nin October.\nH.M.Jr:\nYes.\nB:\nOn that basis we'd go out in August with a balance of\nabout 804.\nH.M.Jr:\nYes.\nB:\nOut of September with 819.\nH.M.Jr:\nYes.\nB:\nAnd out of October 784 million.\nH.M.Jr:\nYes.\nB:\nAnd out of November 644 million.\nHuM.Jr:\nYes.\nB:\nAnd then we have a 600 million dollar third issue in\nDecember.\nH.M.Jr:\nYes.\nB:\nWe would go out of there with about 859 million.\nH.M.Jr:\nIf we sold how many bills?\nB:\nAh -\nB:M.Jr:\nJust do that again.\nB:\nWell you see we've got our program all the way through\nto September 15th - the present program - - did you get\nthat?\nH.M.Jr:\nThat would be five hundred\n103\n- 7 -\nB:\nThat would be 500 million in - ah - December.\nH.M.Jr:\nYes.\nB:\nThen we would issue another 100 million in September\nH.M.Jr:\nYes.\nB:\non the 22d and the 29th\nH.M.Jr:\nYes.\nBE\nfor maturity in March\nH.M.Jr:\nYes.\nB:\nand continue that series through to the end of\nOctober\nHhM.Jr:\nI see.\nB:\ngiving you 300 for the period in March.\nH.M.Jr:\nOn that basis we 'd have the following figures.\nB:\nYes.\nH.M.Jr:\nWell that sounds very good.\nB:\nVery good and that's allowing 110 million dollars\nfor gold in August and 75 million in each of the\nother three months.\nH.M.Jr:\nI see, well that gives us plenty of leeway.\nB:\nPlenty unless this gold starts back.\nH.M.Jr:\nThat will increase our bills.\nB:\nYes.\nH.M.Jr:\nI think that sounds all right.\nB:\nWell I think Wayne agrees to that.\nH.M.Jr:\nYes.\n104\n- 8 -\nB:\nI think Wayne agrees to that program too.\nH.M.Jr:\nWho?\nB;\nWayne.\nH.M.Jr:\nAll right. How - how is our - those last five year\nnotes - what - what are they selling at?\nB,\nThey closed Saturday with a slant to 12 and I under-\nstand they're off a little this morning for about a\n7 to 10.\nH.M.Jr:\nAh-ha.\nB:\nThey had an AP story this morning that we were going\nto buy about a billion and a quarter and that didn't\nhelp the market any. I think the sooner we announce\nthat we're not going to have any new cash in Septem-\nber the better our market will be.\nH.M.Jr:\nI - have you got anything else?\nB:\nBut Wayne will talk to you about that.\nH.M.Jr:\nAll right.\nB:\nNo, that's all I have.\nH.M.Jr:\nWhat?\nB:\nThat's all I have.\nH.M.Jr:\nThank you.\nB:\nAll right.\nTaylor:\nI think this - what Dan was telling you at the end\nis quite important; that the one good thing that we\ncan do as far as the market is to indicate that we're\njust going to turn over that 817.\nH.M.Jr:\nYes.\nBaylor:\nI'd like to do that as soon as possible.\n105\n- 9 -\nH.M.Jr:\nWell do it tonight for tomorrow morning's papers.\nT:\nO.K.\nH.M.Jr:\nAnd, if you don't mind, I'd just as leave have you say,\nwhen you did it, that you consulted with me by telephone.\nT:\nRight.\nH.M.Jr:\nSee?\nT:\nRight.\nH.M.Jr:\nAnd I'd do it tonight, for tomorrow morning papers\nand I think, while you're doing it, you might as well\ntell them that this - that present bill issue is going\nto be 500 million.\nT:\nAh - into December the debt will be 500.\nH.M.Jr:\nYes, then they have the whole picture.\nT:\nYes.\nH.M.Jr:\nI'd do the whole thing.\nT:\nDo it right that way.\nH.M.Jr:\nYes.\nT:\nBecause they'll ask the question about the bills\nimmediately.\nH.M.Jr:\nWell I'd tell them the whole thing.\nT:\nYes.\nH.M.Jr:\nAnd you can tell them that you were talking it over\nwith me.\nT:\nRight.\nH.M.Jr:\nI think the quicker we do it now the better.\nT:\nI'll do it this evening for tomorrow's papers.\nH.M.Jr:\nNow what else?\nRegraded Unclassified\n106\n- 10 -\nT:\nAh - gold - ah - every - all the exchanges and so\non have been very quiet. We've got about ten million\nmore, however, coming from the Japs.\nH.M.Jr:\nHow much more?\nT:\nTen - two lots of five.\nH.M.Jr:\nAh-ha. What do they do with all that money anyway?\nT:\nUsing most of it to buy sterling to pay debts with.\nH.M.Jr:\nPay who?\nT:\nPay debts.\nH.M.Jr:\nI see.\nT:\nThey got a lot - still got a lot of paper out in\nthat London market.\nH.M.Jr:\nAh-ha. Now what else?\nT:\nAh - that's about all. There's one - by the way -\nthere's one thing on this damn sugar bill.\nH.M.Jr:\nYes.\nT:\nAh - we've been brought in as part of a committee\nH.M.Jr:\nYes.\nT:\n....ah - to prepare a veto message.\nB.M.Jr:\nYes.\nT:\nAh - I have taken the position that we will not\ncomment on the merits of the legislation.\nH.M.Jr:\nOn the what?\nT:\nOn the merits of the legislation.\nH.M.Jr:\nYes.\nT:\nAh - consistent with what you did before.\nRegraded Unclassified\n107\n- 11 -\nH.M.Jr:\nThat's right.\nT:\nAh - but the only thing that we will do is call\nattention to this question of the figures.\nH.M.Jr:\nThat's right. You mean on the - on the taxes?\nT:\nYes.\nH.M.Jr:\nThat - that's right - that's good sense.\nT:\nAh - I wanted to check that with you because I said\nthat very hard this morning. I told Dan that and our\nown people. Now that isn't going to suit the other\npeople. They're trying to drag us back in again but\nI think we're out and we ought to stay out.\nH.M.Jr:\nYes, well the President told me to stay out.\nT:\nRight.\nH.M.Jr:\nHe was very emphatic that I should keep out of it.\nT:\nWell that suits me fine.\nH.M.Jr:\nHe said, \"Henry, the only interest is whether we gain\nor loses money\".\nT:\nYes.\nE.M.Jr:\nAnd that's our only interest.\nT:\nWell that's what we're - that's what we're saying in\nour comment.\nH.M.Jr:\nAttaboy. Ah - now Wayne - would you have again\ntonight and they needn't bother coding it - send me\na message - because I don't get the quotations on\nthose notes, you see - hello\nT:\nYes.\nH.M.Jr:\nAh - send me - I think I'd select two notes - whichever\nones you think are the most significant, you see?\nT:\nYes.\nRegraded Unclassified\n108\n- 12 -\nH.M.Jr:\nI'd certainly use the last one as one of them.\nT:\nYes.\nH.M.Jr:\nAnd I'd like every night that the notes - I don't\nwant basis. it on a yield basis. I want it on a price\nT:\nPrice basis.\nH.M.Jr:\nSelling at 101 or 101 and so many thirty-seconds, see?\nT:\nYes.\nH.M.Jr:\nAnd then always say up or down so much, you see? Hello\nT:\nWe'll send you - there are about six of them, I think.\nThat won't be too many, will it?\nH.M.Jr:\nSix what?\nT:\nSix notes. Six maturities.\nH.M.Jr:\nI don't care.\nT:\nWell we'll picksome out and.\nH.M.Jr:\nSend me a - send me a - the only bond they quote here\nis the 2-7/8's.\nT:\nYes.\nH.M.Jr:\nSo send me a short bond.\nT:\nWell we'll send that to you every evening from now\nuntil you - ah - till you get back.\nH.M.Jr:\nYes and - and tell Schwartz - Gaston isn't there,\nis he?\nT:\nNo.\nH.M.Jr:\nAh - very significant news - financial news, you see?\nT:\nYes.\nRegraded\nUnclassified\n109\n- 13 -\nH.M.Jr:\nPut that in because we get very little here.\nT:\nRight.\nH.M.Jr:\nAnd also any - I mean any significant political\nnews, you see?\nT:\nAh - it's all bad.\nH.M.Jr:\nWell I mean he can put it in, you see?\nT:\nAll right.\nH.M.Jr:\nWhat?\nT:\nAll right.\nH.M.Jr:\nI mean it comes government radio - it doesn't cost\nanything. You say it's all bad?\nT:\nYes.\nH.M.Jr:\nReally?\nT:\nYes.\nH.M.Jr:\nWell I'm - I'm wearing pink-colored glasses.\nT:\n(Laughs) Ah - it'll look better by the time you get\nback but it's lousy.\nH.M.Jr:\nWhat's the matter?\nT:\nA cat and dog fight.\nH.M.Jr:\nYou mean on between the Hill and\nT:\nYes.\nH.M.Jr:\nAh-ha. Well tell Schwartz to pick out anything\nvery significant and - ah - political news and then\ngive me something on the financial. I get the stocks\nand the other bonds but I don't get those bills and\nthese government bonds, you see?\nT:\nRight.\nRegraded Unclassified\n110\n- 14 -\nH.M.Jr:\nHello\nT:\nAll right.\nH.M.Jr:\nAnd also I'd like the price of gold - I mean like if\nit's 34.77 or 34.76, you see?\nT:\nRight.\nH.M.Jr:\nI'd like that price; I don't get that price.\nT:\nAh - you get the sterling rates, don't you?\nH.M.Jr:\nWhat's that?\nT:\nYou get the quotations that are on exchange.\nH.M.Jr:\nNo, I don't get anything here.\nT:\nYes.\nH.M.Jr:\nI mean I'd like whatever the price of gold is in\nterms of sterling, you see in London?\nT:\nRight.\nH.M.Jr:\nSee?\nT:\nRight.\nH.M.Jr:\nAnd - ah - that's about all. Ah -\nT:\nWant to talk to Archie?\nH.M.Jr:\nYes I'd like to.\nT:\nAll right.\nLochhead:\nHello\nH.M.Jr:\nHello Archie.\nL:\nYes sir, things have been very quiet on the European\nfront.\nH.M.Jr:\nYes.\n111\n15 I I\nL:\nSo I think the French will wait off until about the\nfirst week in September and then we'll be starting in\nto hear a new story.\nH.M.Jr:\nWell that will give me something to do - otherwise\nI won't have anything to do when I come back.\nL:\nYou'll be surprised - they'll find something.\nH.M.Jr:\nWho will?\nI:\nOh just anybody. (Laughs) Mr. Taylor says you've\ngot a tax reorganization program on.\nF.M.Jr:\nArchie, I wish you'd make a study and get it to me\nif you can by mail - if there's still time - I don't\nknow whether there is or not but at least have it\nwhen I come back - how much foreign government money\nis on deposit outside of the Federal Reserve Banks.\nL:\nOutside the Federal Reserve Banks.\nH.M.Jr:\nI mean really money - in the Russian case I mean\nmoney that they control, see?\nL:\nI see.\nH.M.Jr:\nI mean money that we might get out of the banks and\nput into the Federal Reserve because it's government\nown - government money.\nL:\nWell now I'll tell you - in order to get that the\nFederal Reserve will have to issue new regulations\nand have them split up their whole account - it's\ngoing to cause quite a lot of comment.\nH.H.Jr:\nWell then don't do it until after our financing.\nL:\nI - I think not. It would - it would stir up a lot\nof - a lot of conjecture, I think.\nH.M.Jr:\nWell we can do it when we get back.\nL:\nIncidentally, Russia sent over five million dollars\nworth of gold and put it on earmark with the Federal.\nH.M.Jr:\nThey did do that.\nRegraded Unclassified\n112\n- 16 -\nL:\nThey did do that. They sent over five million.\nH.M.Jr:\nYes, well keep it in mind when I come back.\nL:\nYes, well now that other story - there's not an\nawful lot as far as - we - we checked around privately\nnow and again.\nH.M.Jr:\nYes.\nL:\nBut you see to get the two figures we'd have to ask\nevery bank alike.\nH.M.Jr:\nWell we can wait.\nL:\nYes, but we'll keep that in mind and anything we can\nget on that we'll follow through on.\nH.M.Jr:\nAll right.\nL:\nO.K. then. Goodbye.\nH.M.Jr:\nYes.\nL:\nDo you want to speak to McHugh?\nH.M.Jr:\nYes please.\nL:\nJust a second.\n0:\nHello.\nL:\nThe Secretary wants to speak to Mr. McHugh.\n0:\nAll right, just a minute.\nRegraded Unclassified\n113\nTREASURY DEPARTMENT\nWASHINGTON\nAugust 23, 1937\nHonorable Henry Morgenthau, Jr.,\nThe Royal Hewaiian Hotel,\nHonolulu, Territory of Hawali.\nMy dear Mr. Secretary:\nIn accordance with your telephone request I am submitting\nherewith comments on the financial situation as it has developed\n80 far this fiscal year.\nTotal expenditures of the Government for the first month\nof the fiscal year were $658,000,000 as compared with $417,000,000\nfor the same period last year. showing a deficit of $249,000,000\nfor the first month this year as compared with $123,000,000 for\nthe same period last year.\nThere was a great deal of comment in the press regarding\nthese totals and most of the comments failed to explain the reasons\nfor the difference. One 0r two papers, however, did point out the\nmain cause of the increases in this year over last year. At the\ncabinet meeting of the week ended August 7th, the President asked\nMr. Taylor to give him an explanation of these increases 80 that\nhe could explain the matter at his press conference on Tuesday,\nAugust 10. We prepared 8. memorandum for him on the matter and I\ntook it over and explained the whole situation to him. I told him,\nhowever, that in my opinion he should make no comments whatever on\nthe July figures, that the Daily Statement was now set up so that\nit showed clearly where the difference was and any financial writer\nwho wanted to ascertain the facts could very easily get them from\nthat statement. I told him that any statement made by him would\nnecessarily call for further comment by the press, which in turn\nwould lead to further comment from the Administration.\nIt is my view that you cannot compare July, 1937. with\nJuly, 1936, without commenting on the special situation with respect\nto revenues coming in under the Social Security Act, expenditures\ngoing out under that Act. and the net expenditures in the revolving\nfund which in July of this year only showed a $2,000,000 net credit,\nwheress in July of last year it showed & net credit of $216,000,000\ndue to large repayments coming in last year for the account of the\nReconstruction Finance Corporation and a financial transaction of\nthe Commodity Credit Corporation. An explanation of these items\nRegraded Unclassified\n114\n- 2 -\nis set out in the memorendum submitted to the President, & copy\nof which I enclose herewith. I an also enclosing & copy of the\nDaily Statement of the United States Treasury for July 31, 1937,\non page 2 of which you will notice the various items of receipts\nand expenditures, together with the increases and decreases, as\ncompared with the same period last year.\nIn this connection I am enclosing a copy of the Daily\nStatement for August 19, on page 2 of which you can 888 the current\nbudget picture. For your convenient reference the totals are net\nout below in millions of dollars:\nAugust 19, 1937\nThis\nSame\nTotal\nSame period\nmonth\nperiod\nfiscal\nfiscal year\nlast year\nyear 1938\n1937\nRevenue\n330\n256\n739\n550\nExpenditures:\nGeneral\n224\n222\n561\n471\nRecovery and\nRelief\n111\n163\n309\n465\nRevolving funds\n3\n- 16\n1\n- 232\nTrust accounts\n(inv.)\n61\n3\n186\n80\nDebt retirement\n-\n16\n-\n21\nTotal\n399\n388\n1,057\n805\nDeficit\n69\n132\n318\n255\nThe significant feature of this picture is that the Works\nProgress Administration expenditures for the current fiscal year to\ndate show & drop of about $56,000,000 over last year, and the first\n19 days of the month of August show & drop of $21,000,000 over the\nsame period last year.\nYou will notice on the statement of the 19th that the public\ndebt for that day was $36,952,000,000. This is an increase of\n$527,000,000 since June 30th. It will be over the $37,000,000,000\nmark by the first of September due to two more issues of bills coming\nin, United States Savings bonds and Unemployment Trust funds.\nRegraded Unclassified\n115\n- 3 -\nI 80 also enclosing the ten-day statements usually furnished\nyou and the President, showing comparative expenditures and obliga-\ntions of the major organizations on a checks-issued basis. Ton will\nnote that the expenditures on this basis by the Works Progress Adminis-\ntration were $30,000,000 for the first ten days of August and that the\ntotal expenditures for all agencies using emergency funds was $45,000,000.\nSome of the agencies, such as the Civilian Conservation Corps, and the\nriver and harbor and public highway work should fall off pretty fast\nduring this fiscal year as expenditures for account of these items\nhave now been shifted to the regular expenditures of the Government.\n#1th reference to the proposed financing in September, there\nis enclosed a revised estimate of the cash position for the months\nof August to December, both inclusive. You will note that this con-\ntemplates continuing the present Treasury bill program through to\nDecember 15 with total maturities between December 16th and 20th of\n$500,000,000. It also includes Treasury bill issues of $100,000,000\nbetween September 16 and 30, and $200,000,000 in October, & total of\n$300,000,000, to mature in March, 1938. On the basis of these estimates\nand program, our balance will be about $644,000,000 going into December.\nWe can borrow $600,000,000 on notes in December, leaving our balance\n$959,000,000 going into January.\nThis is 8. very flexible program and can be changed at any time\nto meet the situation. It may be that you will decide in November\nto issue an additional $100,000,000 of bills for maturity in March.\nOn the basis of our present budget estimates there will be approxi-\nmately $500,000,000 in excess revenue over expenditures in March and\nit -ould do no hare to have at least $400,000,000 of Treasury bills\nmaturing at that time. I en making this statement on the assumption\nthat $455,000,000 Treasury notes maturing on March 15th will be re-\nfunded into other notes.\nThere is also & maturity of $277,000,000 Treasury notes on\nFebruary 1. 1938 which could be refunded in connection with the\nDecember 15 financing or we could have four Treasury bill issues at\n$50,000,000 each in January and pay the Treasury note maturity off\nin cash, using $77,000,000 of our balance. Such Treasury bills\nwould mature in June. It would probably be necessary to put another\n$100,000,000 on top of this for maturity in June because our present\nestimates show that we my have as much BE $400,000,000 excess revenue\nin that month. There 1s, however, a Treasury note maturity in June\nof $618,000,000, but again I an assuming that this will be refunded.\nRegraded Unclassified\n116\n4\nFor your information I AM enclosing the following statements:\nI. Estimate of cash position for the period August\nto December. both months inclusive.\nII. Statement showing the present Treasury bill program\nthrough September 15 and dates on which they will\nmature in December.\nIII Statement showing total amount of Treasury bills which\nwill be outstanding on various dates on the basis of\nthe program set out in the cash position estimate.\nIV Statement showing the public debt maturing between\nSeptember, 1937, and the end of June, 1938, 03-\nclusive of the regular weekly Treasury bills.\nV Statement showing public debt maturities on quarterly\ntax-payment dates (with intermediate dates noted)\nincluding the present Treasury bill program of\n$500,000,000 but excluding the regular Treasury bill\nprogram and the special issues to trust funds, etc.\nVI Statement showing the prices and yields by days from\nJuly 28 to August 21, 1937, of certain issues of\nTreasury bonds.\nVII Statement showing the prices and yields by days from\nJuly 28 to August 21, 1937, of certain issues of\nTreasury notes.\nVIII Prices and discount rates of Treasury bill issues\nsince July 14.\nIn connection with statement No. V. you will notice that\nSeptember 15, 1940, 1941 and 1942, and June 15, 1942, are all open\ndates. Present indications seem to point to a note issue of between\nthree and five years. The March, 1942, 1-3/4% notes selling Saturday\nat 100-10/32 to 100-12/32 on & basis to yield 1.67%, indicates the\ndifficulty of issuing a five-year note on the basis of these prices\nunless we go above 1-3/4%. but in view of the probability of only\nan exchange issue we will not have to allow as much leeway as if we\nwere raising a substantial amount of eash in addition to the refunding\nThe market has declined substantially during the past week, regained\nRegraded Unclassified\n117\n- 5 -\nsome on Saturday, but unless it comes back on the announcement next\nweek that no new cash will be required in connection with the September\n15 financing, it looks more like a three or four year note at 1-3/4%\nFor your further information there are enclosed the usual\nstatement given to you at the close of business each day, showing the\ngold in the general fund, the debt increase since December 22, 1936\nand the working balance, and the daily sheet showing the prices and\nyields of Government securities at the close of business August 21.\nFaithfully yours,\nDWB\nRegraded Unclassified\nconsidential\n118\nOFFICE OF THE SECRETARY OF THE TREASURY\nCOMMISSIONER OF ACCOUNTS AND DEPOSITS\nAugust 21. 1937\nTO THE SECRETARY:\nGOLD\nESTIMATED GOLD IN GENERAL FUND BALANCE:\nFree gold\n$ 157,900,000\nHeld to retire Nat. Bank Notes.\n...\n47,844,000\nIncrement resulting from\nreduction of gold dollar.\n.....\n141,000,000\nInactive (Policy ennounced 12/22/36)\n1,306,500,000\n1,653,244,000\nFUNDS SCRROWED SINCE DEC. 22, 1936:\nTreasury Bills. $1,100,000,000\ndo\n(retired).\n600,000,000\n500,000,000\nOther borrowings:\nTry. notes dated\n(\n6/15/37\n.....\n853,000,000\n..S.Savings Bonds.\n411,000,000\nSpecial Issues\n..\n1,268,000,000\n2,532,000,000\nLess debt retired.\n370,000,000\n2,162,000,000\nIncrease in gross debt\nsince Dec. 22, 1936\n2,662,000,000\nWORKING BALANCE - CLOSE 8 BUSINESS AUGUST 20, 1937:\nFederal Reserve Banks\n........\n$ 150,157,000\nSpecial Depositaries\n........\n650,283,000\nTotal Working Balance August 20, 1937. $ 800,440,000\nDWB\nRegraded Unclassified\nESTIMATE OF CASH POSITION\nAugust - December\n1937\n(In millions of dollars)\n1937\nAug.\nSept.\nOct.\nNov.\nDec.\nTotal\nBalances at beginning of periods\n734\n804\n819\n784\n644\n734\n...\nReceipts:\nGeneral revenue\n430\n800\n365\n425\n775\n2,795\nUnemployment trust fund\n55\n40\n40\n40\n40\n215\nU. S, Savings bonds\n35\n30\n30\n30\n35\n160\nTreasury bills (special)\n150 Dec.\n200 Dec.\n100 Mar.\n200 Mar.\n-\n-\n650\n-\n-\n-\n600\n600\nTreasury bonds and notes\n-\nSale - R.F.C., C.C.C., H.L.B., notes\n75\n-\n-\n-\n75\n-\nTotal available\n1,529\n1,924\n1,454\n1,279\n2,094\n5,229\n1.\nExpenditures:\nGeneral\n305\n310\n325\n325\n310\n1,575\n180\n180\n180\n180\n910\nEmergency\n190\nInterest on public debt\n20\n160\n70\n10\n155\n415\n65\n-\n-\n25\n-\n90\nSpecial transactions\nDebt redemptions\n20\n380\n20\n20\n515\n955\n110\n75\n75\n75\n75\n410\nGold purchases\n-\n-\n-\n15\nInvestment\n15\n-\n1,105\n670\n635\n1,235\n4,370\nTotal expenditures\n725\nBalances end of period\n804\n819\n784\n644\n859\n859\nRefunding operations:\nTreasury bills:\nRegular\n200\n250\n200\n200\n250\n1,100\n500\n850\nSpecial\n350\n-\n-\n-\n-\n817\n-\n817\n-\nTreasury notes\n-\n200\n1,417\n200\n200\n750\n2,767\nTreasury\nAccounts and Deposits\nAugust 21, 1937\n120\nII\nSpecial bills for December\nIssued and which mature December 16\n$100 M\nIf\nIf\nIf\nIf\nIf\n17\n100\nIf\nIf\nII\nIf\nIf\n18\n$50 M\n-\nIf\nIf\nIf\n#\nIf\n18\n50\n-\nTo be issued on 8/25 and mature Dec. 18\n50\n150\nII\nIf\nII\nIf\n9/1\nIf\nIf\nIf\n20\n50\nIl\nII\nIf\nIf\n9/8\nIf\nIf\nIf\n20\n50\nIf\nIf\nIf\n\"\n9/15\nII\nIf\nIf\n20\n50\n150\nTotal special bills for December\n500\nRegraded Unclassified\n121\nIII\nTreasury Bills Outstanding\non basis of program set out\nin Cash Position Estimate\nAugust 18\n$2,603 M\nSeptember 1\n2,703\nSeptember 15 (8th and 15th)\n2,803\nSeptember 18 ($350M maturing 9/16, 17 & 18)\n2,453\nSeptember 30 (22nd and 29th)\n2,553\nOctober 31\n(6th, 13th, 20th and 27th)\n2,753\nDecember 20 ($500M maturing Dec. 16,17,18 & 20)\n2,253\nTreasury bill payment dates:\nSept. 1 - - 8 - 15 - 22 - 29\n=\n$ 250*M\nOct. 6 - 13 - 20 - 27\nIf\n200*\nNov. 3-- 10 - 17 - 24\n=\n200'\nDec. 1 - 8 - 15 - 22 - 29\nII\n200'\ne In proposed program.\n- Not in program.\nAugust 20, 1937\nRegraded Unclassified\n122\nIV\nMaturing Debt\nSeptember, 1937 - June,-1938\n(Exclusive of regular\nweekly bills)\nTreasury\nSpecial\nTotal\nNotes\nTreasury\nRefunding\nBills\nSeptember 15, 1937\n$817 M\n$350 M\n$1,117 H\nDecember 15, 1937\n-\n500\n500\nFebruary 1, 1938\n277\n-\n277\nMarch 15, 1938\n455\n300\n755\nJune 15, 1938\n618\n-\n618\nAugust 20, 1937\nRegraded Unclassified\n123\nV\nTREASURY FINANCING\n(Exclusive of regular Treasury Bills and special\nobligations issued directly to trust funds)\n(In millions of dollars)\nMarch 15\nJune 15\nSept. 15\nDec. 15\nTotal\n1937\nBills\n-\n-\n351\nNotes\n500\n1,668\n-\n-\n817\n-\n1938\nAll notes\n277\n(2/1)\n618\n596\n-\n455\n1,945\n1939\nAll notes\n942\n1,294\n427\n526\n3,189\n1940\nNotes\n1,378\nN\n738\n-\nN\n737\n3,206\nB\n353\n1941\nNotes\n677\nN\n504\n-\nN\n204\nBonds\n2,764\n545\nB\n834\n(8/1)\n1942\nNotes\n426\n-\n-\n-\n426\n1943\nAll bonds\n-\n454\n1,401 (10/15)\n-\n1,855\n1944\n-\n-\n1,519 (4/15)\n-\n-\n1,037\n2,556\n1945\n#\n#\n-\n-\n1,214\n-\n1,214\n1946\n-\n.\n489\n1,855\n-\n-\n2,344\n1947\n.\nIf\n-\n-\n759 (10/15)\n-\n759\n-\n1948\n-\n-\n1,223\n-\n-\n-\n1,223\n1949\ne\n-\n.\n-\n-\n-\n2,278\n2,278\n1950\n-\n-\n-\n-\n-\n1951\n.\n.\n-\n1,627\n755\n-\n2,582\n1952\n-\n-\n-\n-\n-\n1953\n-\n-\n-\n-\n-\n1954\n-\n-\n-\n-\n-\n1955\n#\n#\n2,611\n-\n-\n2,611\n-\n1956\n-\n#\n-\n-\n982\n-\n982\n10,542\n8,277\n7,302\n5,282\n51,403\nACCOUNTS AND DEPOSITS\nAugust 20, 1937\nRegraded Unclassified\n124\nTABLE Va\n23\nCOMPARATIVE OBLIGATIONS\nor MAJOR ORGANIZATIONS\nTHE EMERGY RELIEF\nBY PERIODS\nAPPROPRIATED ASTS a 986, -\nEXPRESSED (# MILLIONS\nCONSOLIDATED\nTHA -\nDISTRIRUTION ST MAJOR DOGARIZATIONS\nFORM\nINCREMENT\nPRINC\nM.\nENTEREST\nMAIS\nPUBLIC REASO\nexcessive of\n----\nINCLUDING\nSEXETTLEMENT\n- . -\n-\n-\n4d -\nHELAIP\nMAIL\n-\n(Ben - PM)\nTAXIM\n-\n-\nun\nISM\nMI\n-\nELEMINATION\n-\nTRATION\nNet\nM.S.\nTRATISH\nCOMBINED\nH2 -\n1834\n18.00\n1926 --\n-\nHER\n1131 et\nna\n1596\nIMM et\n-\n-\n-\n1923\n-\nTRUE -\n:\n-\nress\nTEM\n- -\nact\n1\n-\nAND\nNM\néste\nan\nAct\nan\nat\n-\n-\nMI\n1800\n-\n-\narta\nart\nARE\nISM\nMIS\n-\nMTA\nAst\natf\ndeta\nDestate\nN.NES\n-\nMIA\n1974\n191.1\n1110.1\n1111-1\n-\nIMI-9\n1173-6\n-\nUR!\n-\nals\n\"\n\"\n48\n.\nI-8\n5,5\n4.4\n9.4\n-\n-\n- -\nI\n1.1\n70.00\nM.A\nNr.\nM\nair\nE.\nN.7\n17,40\n77.0\n7.8\n-\n1,7\nNA\n14\n1.8\n4\n4\n-\n/\n-\nM.K\nif\nNJ\n1.8\nM\n1.7\n=\n14.7\nno\nM\nfull\n1.7\n1,7\ndel\n1.9\nn.+\n1.0\n1.0\nI\na\nof\n77.7\n---\nas\n44\n1.1\nin\n117.1\nRI./\nNO.7\nAuf\n4,7\n1\nThe\n17.1\n14\n:\nfal\n-\nJ.f\n216.7\n14.4\nNot\nINI\n17.1\n-\n-\n-\n113\nMA\nWE\ndi\nin\n4.9\n4.)\nMP\n7,8\n1.0\n1\n1,4\n-1\nThe\nM.A\n-1.7\n35,7\n1.8\ne.\ndie\n-\n-\n-\n11.4\n3,7\n67.7\nP.S\n\"\n2.*\n7,7\nzur\nN\nin\n1.0\n,,\nil\ndi\nof\n-1,1\n41-F\n8,7\n7.8\n1.1\n-\nR\nno\n1.1\nTM\n->\n111\n1.6\n- - -\nNE\n1.1\nf.)\nJ\na\n,\n10.1\n-.-\n30.7\n8.7\n3.7\n1.8\nTHAN\nPM\n17.8\n185.9\n\"\n1.1\nA.B\n11.8\n11.1\n7.7\nA.M\n1J\n1,1\ndi\nla\n-\nN.P\n-\n170.0\n14,8\nf.)\n4.1\nH.7\nA.C\nAS.V\nna\n1.1\n-\nM\n1.1\n14\nM\n..\n(.f\nM/R\n--\n39.0\n4.8\n(.f\n7.6\n-\n\"\nN.7\nN.I\nAUF\nEA\n148\n3-1\n11\n-\n(-)\n-f\nH.F\n11,2\n417\n10.8\n1.1\nfor\nM\n3\n10.4\n10.4\n2.8\n1.3\nMM\n7,1\nf.f\n7,8\n1.1\na\nthe\n\"\n1.8\n14\nINH\n11.1\n90,3\n4,7\n14\n11-1\n14,1\nvar\n4.7\nR.1\n1.1\n1.4\n114\nINJ\nHil\n174.4\n11-1\nf.f\nAll\nIS\n#J\n(4.4)\nN.P\n1.4\n1.1\nas\n- -\n1,1\nI-K\n4.2\nN\n47.7\n-12\n12.7\n1.1\n1.8\nis\nNJ\nna\n1.8\n1.4\nS.P\n1/2\nas\n4.1\naur\n1.1\n11.7\nas\nÉ\n03\n4,4\nC\n1.8\nBider\nDE\nAt\nM.S\n1.4\n,>\n10\n1-4\n1,3\n1.5\n4.1\n1.7\n-1-7\n67,4\n1.1\n2.1\n7.8\nass\nUPA\nV.I\n,,\n-\nINC\n--\n-\n11.4\nL.9\nIN\n1.8\n1.0\nIM\n(N.#\n-14\n1912\n11-1\n#.#\n-\nJE\n30,4\n1-1\nM.S\n1.0\nT.S\n3.4\nNO\nU\n-\n(.)\n14\ndel\n--f\n4.1\n4,4\n1.1\nLI\n-\n.\nN.A\n0.0\nN.I\n7,9\n\"\n24\n1.3\nla\n\"\nd.i\n4.8\nna\n3.8\n1.1\n-\n-\na\nIf\nMJ\nM.A\n1.0\n-\nPP\n13\n4-1\n1.9\n(.)\n10.8\n:\n82.1\n14\n(.8\n1,4\n90.7\nN.I\n1.2\n4.8\n-\n20\n141\n10.0\n1.1\n12\n1.1\nna\n-1.7\n160.3\nIM\n4.1\n1.6\n-\nN.A\n18.0\nthe\nM\n2.º\n/\nMP\n1.8\nthe\n\"\nf.)\n12.6\n87.7\n1.8\n7-8\n#.#\nI\nK\nN.+\n#,º\n43.7\n13\n-\n1,1\nLIF\nLA\n1,4\n-\n7,8\na\n4.)\nN.T\n+4\nN,4\n-1\n4.8\n-\nall\nL4\n17,9\n...\n-,\n-\n-\n43\n4.8\n-1\n\"\nH.F\nau\n4.2\n7,7\nLE\n27.1\n194.0\n1.7\n,\n:\n-\nM\n4.2\n---\n4,1\n1.4\n14\nD.I\nHIA\n--\n165.1\ns.f\n12.1\n1,870.2\n11.4\nNO.?\n20,1\n451,2\n1.7\n751 2\n207,8\n11.7\n19.5\n179.1\n1.1\n103.1\nIII.I\n187,1\n411.1\nLON.3\n264.1\n219.0\n43.8\ni\nI\n-\nHill\n4d\nand\n12\n4.8\nJ.R\nM\nAT\n--\n:\n41\n7.7\n2.1\n3,1\n03\n17,3\nM\n14\n1.2\n-\nM.P\n-13.8\nM.J\nT.I\n7. #\n7.4\n1.1\n1.5\n1.1\n-17J\n37.1\nHA\nH.P\n14\n..\n7.1\nanen\n=\nH.I\n-FL.\"\n..\nin\n11.0\nun\nN.E\n- -\n11.7\n14\n7,4\n7.º\n140.1\n173.9\nM\n7.4\nM\n12\nNJ\n1.7\nN.I\n1.1\n-174\n10.1\n4,8\n(41)\n11.4\n(2\n\"\nne\n-\n#1\n143\n(-1\nLI\n3.4\n- 61\n17.7\n-\n67.8\n1.5\n1.7\n1.1\n*\nn.s\n(.)\n61.2\n1.1\n7.0\nF.#\n3.8\na\n13.1\nL/\n\"\n1.8\n18\nM.F\n1,1\n17,8\n1.1\n7.1\nM.I.\nM.7\n7.8\nla\n100%\n142.7\nt.o\n139.7\n1.1\n1.3\n7,2\n1.1\nDU\n14,1\nIMI\n-\nou\nIM\nM\n1.8\nis\nN.3\nLI\n1.7\n1,2\nN7\nNo\n4.8\nN.I\nN.I\nof\n1.8\n-\n20\n87,7\nP.A\n6.2\n1.7\nT.7\nV.A\n1,8\nNO\n7,4\nna\nRI\nAd\n1.8\n4.5\n=\n11,7\n-1\n81,4\n1.1\nvie\n...\nSI\n-\n10,9\nM\n,\n1.1\n-\nMA\n200.7\n1.6\n1.4\n4,0\n(1)\nAll\n71.1\nuse\nun?\nIM\nM\n2.1\nMII\n16\nNJ\nP.O\n42.1\n14\n1.1\n74\nP.A.\n1.5\n8.1\n-1.0\n48.0\n34\n41.1\n1.3\nla\n4,2\ntell\n20\n18.7\n1.4\nINT\n-8\n1,5\n\"\n1.0\n1.1\n13\n0,1\ndid\n47,1\n4,1\nI.I\nNA\nwill\n(6)\nas\n1.1\n80.2\n1.4\n1.5\n1.1\n#.7\nH.I\na.\nM\nJ.P.\nIS.#\n175.4\n1.4\nNJ\n4.4\n14\n31.1\n-\n11.9\ndue\nLI\n18.7\n10.1\nIM\nM\n14,7\n10\n16.1\nP.P.\n48,4\n-\n18\n1.4\n\"\n#:2\n1.8\nM.F.\n9.1\n(.)\nLI\n1.1\n-\n20\n:\n7.F\n28.0\n1.8\n1.0\nlit\n1.1\n4.1\n.\nR.O\n-1\ndi\n0,1\n47,1\n1,1\n,\n1.0\n-\na\ni\nR.\nM.P\n4.1\n48.1\n-\nr.e\n\"\n13\n-\n1.9\n- ᵃ\n42.1\ned\n47,7\nM\n1.7\n11\n10.8\n156.4\n1.0\nT.O\n4,3\n18.8\n1-2\n13.7\n1.0\n14\n=\ndi\nINJ\n118.5\nll.1\n1.5\nM\n-\n10\n6\n1.4\nH.?\nD.#\nthe\n4,*\n-\n1.1\n4.2\n11\n-\n14.4\nH.1\n1.1\nLI\nL7\nI\nLl\n-\na\nM.S.\nF.S\n4d-f\n,\n-\n7.7\n-\n\"\n1.5\n3.1\n-\nU.P\n#A\n4.1\nJ\nH\n-\na\n-\nM\nMET\n19.4\n19.3\n1.1\n1.€\nFed\n7.1\n7.1\n12.0\n1.5\nD.S\n4\n-\n-\n.3\nU.S.\nILI\nU.A\n9.1\n2.1\n(AP.)\nW./\n157.4\n0.7\n1.1\nL.\n10.0\n17.1\n1.1\n78.4\nF.S\n71.8\n4.1\n1.1\n#\nune\n-\nau\n19,8\n11.7\n1.2\n1932\n9,771.7\n4,307.1\n2,714,8\nJIME\n717\n42.5\n1.4\n817\n222.0\n181.7\n149.7\n19.5\n18.2\nSN.4\n111.9\n(11)\nNO\n397.3\nNE,F\nIN.D\nIVW, ISM\n--\n- --\n-\n-\n- -\n-\n-\n1995. -\nINTEF\n1937\n-\n- isar\nNM\n1987\nI I\nI\n-\n-\n--\nITM\n- 1937\nos\nH&F\nISSI\n- -\n- NE\n-\n1577\n- HERP\n-\nTEM\n1834\n-\nBris\ndate\nAUT\ndata\nAnto\n-\nARTS\nE\n-\ndate\nArt\n5\n-\n-\ndata\nalle\n-\nall\n-\n-\nM\nenta\nx\n1997\n#,721.7\n1,721.7\nI\n-\n111.0\n-\n501.8\nNI,4\nMI.7\nM1.7\n149,7\n148.7\n94,4\nFILE\n411,1\nFILE\n-\nNEW\n1\ndella\nMY\nsit\n47.2\n4.0\n41,7\n,7\n-\n7.8\nNP\n1.2\n1.7\nI\nif\nañ.5\n-7,7\n117\nAl\n7.1\n-\n-\n20\n41.3\n-11\n\"\n1.4\n7\n1.5\n-12.8\n-10.0\ni\nN.J.\n-\n1.1\n7\n-\n-1\nI\nNP\nH.?\n-1.8\nM.1\nLA\n\"\n(.1\ndella\na\nAN\n=\n4.1\n,,\nn.,\nJ.P.\n-,\n1-1\n41\nI\n1.1\n-\n11\n12\nof\n:\n-\n-\n11.1\n-1.1\n42.9\nlit\n4\nif\n197.1\n-\nIN.1\nM\nH\nNA\n-1.1\n+1\n-\n7,0\n1.0\n\"\n,5\n-\n-5\n-\nfor\n194\n-1,7\nIN.1\n7.1\n1.2\nX\n-\nI\n18\nN.J\nA7\nN.I\n1.7\n-\ndil\n. 4\n..\n-\n2.4\n-*\n2.2\nof\n-\nJ\n-\n-\nof\ne.)\n--\n11.1\n%\n1.\"\n1.7\ntimes\n5,297.0\n8,774.8\n173.0\nno.\n111.4\n1.3\n495,4\nano\n-\n101.1\nRS.0\n4.1\nNI.1\n140.7\n.a\nBLI\nHILF\nuna\n1441.7\nIN.1\n-\n4.2\n477.8\n174.1\nM4.0\n11.7\n1.6\n:\n14.0\n14.0\n1\n76.1\n17.4\nV.I\n57.9\n-\n57.1\n..\n1.1\n#.7\nno\n38.4\nare\n88,0\nN.I\n9.3\n-\n-\n7,370.3\n9,201.1\n47.0\n178.8\nTHE\n17.0\n10.4\n59.4\n-\nthe\n474,8\n43.4\n(99.7\n17.7\n191.1\n115.0\n49.1\nMM\n134.8\nNO.:\nCMT\n436.8\nU.S\n-\n0..1\n0.3\n-1\n7,1N.0\n1.401,3\n47.3\n1.257.1\nN.I\n1,217.1\n-\nFINAL\n1,500.0\n0\n0\nRegraded Unclassified\nvI\nPRICES AND YIELDS ON\nVARIOUS THEASURY BONDS\n125\nJuly 28 to August n, 1937\nCoupon rate:\n2-3/45\n3%\n3-1/8%\n2-3/65\n3-1/9%\n2-1/25\nfall = maturity date:\n1945-49\n2-3/45\n1946-48\n3%\n1946-49\n2-7/05\n1948-51\n2-3/45\n1949-52\n1949-53\n1951-54\n1951-55\n1955-60\n1956-59\nFrices:\n1937\nJuly 28\n103.06\n104.25\n105,18\n101.18\n105.16\n98.31\n100.16\n103.18\n101.09\n100.18\n29\n103.11\n105.02\n106.20*\n101.19*\n105.18*\n99.02\n100.18\n103.16\n101.16\n100.15\n30\n103.12\n104.30*\n105.21\n101.17\n105,20\n99.01\n100.17\n105.18*\n101.16\n100.14\n31\n103.09\"\n106.30\n105,21\n101.18\n105.16*\n99.02\n100.18\n103.20\n101.16\n100.14\nAug.\n2\n103.10\n104.30\n105.21\n101.15\n105.14\n99.00\n100.15\n103.19\n101.14\n100.14\n3\n103.15\n104.27*\n105,25\n101.17\n105.13*\n99.00\n100.18\n103,19\n101.14\n100.13*\n4\n103.00\n104.28\n105.24\n101.19\n105,19\n99.01\n100.15\n103.19\n101.14\n100.18\n5\n103.11\n104,28*\n105.21\n101.19\n105.20\n99.00\n100.17\n103.80\n101.16\n100,16\n6\n103.10\n104.29*\n105.22\n101.17\n105.19*\n99.04\n100.18\n103.21\n101.14\n100.16\n7\n103.09'\n104.26*\n105.24*\n101.20\n105,18*\n99.04\n100.20\n103.20*\n101.17\n100.17\n9\n103.11\n104.31\n105.26\n101.21\n105.19*\n99.04\n100.21\n103.20*\n101,15\n100,16\n10\n103,11\n104.31\n105.20*\n101.20\n105,21\n99.01\n100.19\n103.21\n101.15\n100.14\n11\n103.08*\n104.25\n105.16\n101.14\n105.14*\n98.51\n100.14\n105.16\n101.09\n100.10\n12\n103,06\n104.16\n105.17\n101.06\n105.08\n96.25\n100.08\n103.08\n101.04\n100.01\n13\n103.00\n104.11\n105.09\n101.00\n105.05\n98,28\n100.00\n103.09\n101.01\n100.00\n14\n102.28\n104.12°\n105.13\n101.03*\n105.01*\n98.25\n100.04\n103.08\n100.31\n100.00*\n16\n103.00\n104.14\n105.11*\n101.05\n105.07\n98,26\n100.04\n103.10\n101,03\n100.06\n17\n102.29\n104.14\n105.14\n101.02\n105,04\n98.24\n100.05\n103.07\n101.04\n100.05\n18\n102.29*\n104.12\n105.11\n101.03\n105.00\n98.54\n100.02\n103.05\n101.00\n100.02\n19\n102.22\n104.06\n105.07\n100.28\n104.87\n98.19\n99.28\n103.00\n100.86\n99.28\n20\n102.09\n104.05\n104.29*\n100.10\n104.14\n98,08\n99.15\n102.16\n100.10\n99.12\n21\n102.14\n104.02*\n105.00\n100.15\n104.10*\n98.06\n99.24\n102.18\n100.18\n99.17\n- B14 price - no sale.\nTielda [to call date):\n1937\nJuly 28\n2.317\n8.399\n2,436\n2,581\n2,502\n2,598\n8,706\n2.695\n2.782\n8,720\n29\n0.296\n2.364\n2.419\n2.579\n2.596\n2.589\n2.701\n2,700\n2.769\n2.718\n30\n2.298\n8,379\n8,413\n2,584\n8.590\n2.592\n2.704\n2.695\n2.769\n2.720\n31\n2.305\n2,379\n2.413\n2.580\n2.602\n2,589\n2.701\n2.689\n2,767\n8,750\nlog.\n2\n2.300\n2.379\n2.412\n2.591\n2,607\n2.595\n2.709\n2,692\n2,771\n8,720\n3\n8.287\n2,390\n2,397\n2,564\n1,610\n2.595\n2.701\n2.698\n2.771\n2,725\n4\n2,304\n2.306\n2.401\n2.579\n2,593\n2,592\n2.709\n2.691\n2.791\n2.785\n5\n2,295\n2.386\n2.412\n2.577\n2,590\n2.595\n2.703\n2.689\n8.767\n2.716\n6\n2.300\n2,382\n2,408\n8,584\n2.598\n2.583\n2.701\n2,687\n2.771\n5,716\n7\n2.304\n2.393\n2,400\n2,574\n1,595\n2,583\n2.695\n2.689\n2.765\n2.714\n9\n2,296\n2,374\n2.398\n2,570\n2,592\n2.583\n2.693\n2,689\n2,769\n8.716\n10\n2.296\n2.374\n2,415\n2.574\n2.587\n2.592\n2.698\n2,687\n2.769\n2.720\n11\n2.307\n2,396\n2,450\n2.594\n3,607\n8,598\n2.711\n2.700\n2,782\n2.729\n12\n2.315\n8.431\n2.485\n2.620\n2,684\n2.616\n2.726\n8.720\n2,793\n8,748\n13\n2,340\n2.450\n2.456\n2.641\n2,633\n2.625\n2,750\n2,723\n2,800\n2.750\n14\n2.357\n2.446\n2.440\n2.630\n2.644\n2.616\n2.739\n2.720\n2,805\n5.750\n16\n2.340\n2.438\n2,448\n8,624\n2,626\nE,713\n2,739\n2.715\n2,796\n2.737\n17\n2,353\n8,438\n2,435\n3.634\n2,635\n2,619\n2,736\n2.723\n2.793\n2.759\n18\n2.355\n2.445\n2,448\n2.631\n2.647\n2.619\n2.744\n2.728\n2.802\n8.746\n19\n2.302\n2,468\n2.463\n2,654\n2,661\n2,634\n8,761\n2,742\n2,016\n8.789\nto\n3.436\n2.480\n2.501\n2.715\n2,699\n3,667\n8,795\n2.764\n2,652\n3.798\n21\n2,418\n1,404\n2,469\n2.699\n2,710\n2.673\n2,772\n2.779\n2.654\n2.782\nRegraded Unclassified\n126\nTABLE VIA\n26\nCOMPARATIVE EXPENDITURES\nof MAJOR DREAMIZATIONS\nTHE EMERGENCY RELIEF\nor PERIODS\nAPPROPRUTION ACTS of 41937\nEXPRESSED IN MILLIONS\nCONSOLIDATED\nDISTRIBUTION\n\"\nTETAL EXPENDITIMES\nWAJOR\nCNGARIZATION5\nAGRICULTORY\nFEMER\nil\nissue\n-\nPERIC HATE\n-\nDATE OF\n- - -\n-\n-\nALL -\nINSTRUM\nRILHER\n----\nPUBLIC MADE\nresurts\nBANK CREEMER\n--\n-\n-\n(Nome - - Baj\nNEW\nMD RESETTLOMENT\n-\ncomme\n-\n4213\n-\ndel\nADMINISTRATION\n-\nAct\n-\nCOMBIRES\n- -\nTOMA\nTRAN\n1839 -\nun\nI\n- -\n-\n-\n- -\n-\nIRN\nTEM\n-\n-\n-\n--\nAnd\nAMT\n1636\nart.\n-\n-\n48\nISM\n10.00 -\nas\n-\ndate\nActs\nNot\neffe\n-\nAct\n-\nBIT\n-\n-\n:\n-\nan\n-\n-\n467\nAMT\nARTA\n11,424.8\n-\n147.5\n140.5\n-\n1\n114.3\nRIN-3\nI\n179.5\n-\n1529.7\nun.,\n-\n(ell\nsin\n-\n1123.7\n-\nN°F\n10\nPI.E\n71.8\nMI-7\nAT\n-\n1.8\n4.4\n-\n4.6\n4.8\n-\n1.f\n1.8\n|\n13.7\n-3\nF.2\nM.P\nn.j\n111.1\n1,3\n4,8\n-\nor\n40.00\nM.P\n1,7\n1.7\n1\n10.0\n10,F\n1\n1.1\n7,4\nM\nM\n-\n1.7\n- ,\n4.2\na.f\n\"\n60,8\n4.0\n1.3\n-\ne\nM.?\nNET\nSALA\nJ.B\ndid\nLI\na.a\n1.1\nI\n1.4\n1.0\n1.4\nfal\nN\n1\n1.8\n--\n1.3\n11.1\nM\n13.7\nded\n4,8\na\n138.0\n117.7\n5.8\n3.7\n-4\n14.2\nN.7\n11:4\n-\n-\nU.P\n-\nF./\n17,7\n1.0\n12.3\n147.1\n48.1\n114.1\n11.#\n12.4\n..\n-\n-\nvor\nare\n29.3\n-\n1.2\n-,\n-1\n0,7\n1.1\n-\nMI\nM\nif\n1.7\n1.7\nE\n2.7\n1.4\nM.I\nM\n10,3\nM\n7,4\nI\n-\n:\n10.0\n54.1\n1.8\nM\n-\n10.0\n10.0\nI\n1.1\n14\n14\nDE\n-\n1.0\n-\n-1.1\nHJ\nM\nM.I\n4,0\n1.5\n1.1\n-\n11.\n07.8\n0,1\n37.3\n-\n1.1\n112\n11/0\n-\n1.1\nNJ\n1.4\n1.0\n-\n1.0\n,,\n4.5\nM.I\n4.0\n1.8\n1.1\nL.E\n-\n19.1\n21.2\n4.8\n2.4\n1.1\n28.1\nN.1\nI\nf.1\ndie\nM\nM\n0.4\n.7\n#.\nis\n1.4\n157.4\nU.P.\n143,8\n(LI\n(0,1\nT.f\nAD\nNÃ\n241\nSC-#\n1.8\n...\n1.2\n5,4\n1.1\n-\nLI\nJ.B\n1,4\n1.2\n1-8\nof\n-\n- 4\n1.1\n50.3\n1.1\n47,7\nW\nM\ndel\nAB\n11.7\n76,8\n3F.7\nyes\n1.0\n1.1\n...\n\"\n1\n1-1\nfor\n14\n1.1\nP.S\n:\n1.1\nof\n4.4\n94\n2,1\n31.2\n6.4\n1.2\nM\n3\n314\n2014\n#1.0\n2.2\n-\n1.7\n11.1\n43,1\n-\n1.2\n1.7\n7.4\na.e\n1,7\n2.8\n-1\n1.8\n8.4\n14\nM.S\n1.1\n4.8\nM\nnot\n231.#\n78.4\nIN.)\n1.8\n1.2\n14\n77.1\nILI\n=\n1.1\n8.2\n5.2\n-\nLI\n+1\n17.1\n148.4\n8,7\n110.0\n18.0\nM.O\n4.2\nis\nN.7\n21.6\n44.1\n7.1\n-\n1.4\n4.0\n4.0\n-\nM\n1.1\n1.4\n1.1\n7.4\nH\n-/\n4.4\n87.1\n1.7\n80,1\n4.1\n3.8\nAl\n10\nN.P\n12.9\nIL#\nJ.N\ndi\n1.0\ndid\nf,f\n-\nF.P\nli\n7.P\n1.1\n1.6\n&\nof\n1.1\n48.1\n7,1\n17.2\n1.7\n12\nM\n18\n1061\n11.1\nN.4\nP.M\n-\n1:1\nwas\n34.2\n1.1\n2.8\nE\nL.E\nJ.P\n,\n,,\ndi\nALL\nB.I\n1.1\nand\n3.4\nAl\n1.1\ncrea\nN.I\n(M.)\n1.8\n1.8\n1.7\nNO.#\n0,1\nI\n18,6\n:\n1.1\nf.f.\n4.4\n1,4\n1.7\nis\nT1#\n3,7\n19.2\n114\nM\n:\nje\nNo\n29,1\n31,0\n1.1\n-\n1.1\n1,4\nF.#\nI\n1.1\n7.1\nNO\n1.4\n1.1\n:\n-,\nA.P\n49,0\n1.8\n47.4\n1,6\n1.1\nf.)\ns\na\nP.I\n24.4\nN.I\n1.5\n1\n(-)\nN\n\"\n-\n14\n24\nM\net\n14\n-\n-\nA.7\n84.0\nN\nM/\nAd\n\"\n\"\nE\n19:4\n19.4\nM.P\n1.8\n..\n1.1\nAT\nand\n-\n12\n1.8\n7.7\n1,2\n1.0\n-\n1.9\na\n1.1\nN A\nf.f\n11.1\n4.3\n-\nM\n-\n244,7\n44.1\nIN.1\n4.8\nIP\n(2)\nN.I\nN.I\n14.0\n1.2\nP.O.\n4.0\nNa\n-\n2.8\n7\ndid\n197.0\n1.8\n101.1\n14,7\ned\n:\nis\n21,1\n11/7\n2.8\n-\n67\n1,3\n6.5\n-\nET\n1.9\n1,4\nV.S.\n1.4\n- /\n-\n5.8\n85.3\n1.1\n944\nEd\no\nf.a\n-\ne\nna\n12.1\nR.P\n1.8\ndi\n1.7\n8,a\nF.*\n-\n4,7\n14\n2,7\n1.4\n1.1\n4\n-1\na\n1.8\nJF J\n4.8\n11.1\n1.1\nLF\n4-1\n-\n#.\nN -\n67.4\n4.A\n-\n:\n1,7\n#.7\n1.1\n1.1\n12\n2.2\n-\n=\n-\n4.1\nN.I\n1.4\n##\nfil\n#.5\nM\n47.7\n205.7\n3.2\n1.1\n4,f\nNO\nNA\n-\nIM\n4.1\n1.1\n4.1\n1.8\n,\n-1\n14.3\n100.4\n:\nID-I\nas\nIM\n10.0\n4,341.7\ncome\nN.A\n11.7\nN.P\nNEX\n261,6\n-\nHM./\n14.8\n114.1\nBA\n\"\nMIJ\n19.4\nINJ\nMed\nHI./\n10.1\nMNI\nVJ\ne\nva\nna\n45.9\nJ-1\n6.4\nP.P.\n\"\n1.1\ni\nM\n1.1\n2.4\n(.)\n1.8\n0,1\n41\n2.1\n12\n42.0\nv.s\n8,4\n1.8\n1,1\n14\n&\n11.1\nALO\nleft\n-\n14\n4,8\n4.5\n1.1\nid\n4.1\nfil\n1,4\n-1\nH\n1.0\n0,1\n(.8\nN.A\nM\n14\n1.1\nu\nN.?\nn.a\n-\n1.5\n.1\n1.1\nI-I\n(.)\nM\n14\nA.1\nJ\nif\n,,\n1,7\n10,4\nlal\n11.1\n1.1\n2.0\n1.1\n10.1\n17,0\n111.1\n4.4\n14\n1.1\nDI\n14.8\n114\nM\nno\n1,1\ndel\n4\n-\n-\nILI\n141\nlil\n149.1\na\n1.4\n1.1\n1/4\n10.0\nID,#\n1.1\n47\n1.4\n\"\n12\n1.1\n12\n12\n11\n(d\nJ\nL\n4.1\n-\nU.S.\nM\n1.7\nM\nMI\nNI\ndi\nB.I\n13\n,,\n1.1\n4.3\n13\nM\n1.1\na\nL\n:\n,7\nel\nI\n34,7\n-\nIM\n(.)\nM\n1.4\nit\n11,1\n-\ndi\nis\nM\n1,7\nin\n4.0\n12\nM\n-1\n4\n4J\nD.F.\n\" M\nM\n1.0\nid\nINI.F\n8.7\n19.8\n\"\n+7\nLI\nIM\n12,0\nil\nIN\n1.1\n14.9\n7á\nM\nif\n-\n1.\n-1.4\nH\n18.1\n11.4\n:\n=\nis\nn.\nN.7\n1.1\n,7\n1.1\n1.1\nN\nM\nL-d\nM\n,\n-\n4,0\n00.1\n-1\n9.1\nu\nLI\nis\nR.\nIM\nNJ\n(-)\nif\nfit\nI.F\nLE\n-\nF.7\n13\nCA\n-\n-\n+\n,7\n#.7\n0.5\n-\n11.1\n1.7\n7,1\n1,1\nMIT\n\"\nR.I\n04\n(1)\nId\n-1\n-1\n\".\"\nW\n5\nus\n1,7\nM\nin\n4.7\nn.o\n-\nHJ\n4.1\nM\n1-2\nNJ./\n(13\n201.1\n1.6\nis\n1,1\n10.5\n10.1\nJ\nIM\n\"\n21.5\nf.)\nLA\n-\n-\ndi\n(2,1\nIN.1\n(44.)\n14.1\n4.1\nM\n-\na\n11.0\nII-I\nBJ\nla\n-1\nIJ\n1,1\nK/\nin\n14\n1,1\n4.1\n,\nJ\n45\nof\nJ\n37\nM.I\nAt\n47,7\nM\n(.f\nAl\nMO\n4011\n0.7\nIM\nN.I\n,\n+7\n1.1\n2-1\n-\nF.A\n1.7\n7,)\ndi\nil\n-f\n+1\n4\n:\nN.A\n-\nuna\n14\n1.1\nM\n-\n%\n0.0\n1.1\n16/\n1/\n,7\n1.0\n11\nU\n-1\n1.1\n14\n1.0\n-8\n,\n1.1\n\"\n&\n11.1\n4.7\n1.1\nM\nN/\nINJ\nIN\n/\n1.8\n...\nN.T\n27.0\n=\n71.2\n1.1\n1,1\n/\n-\nit\nU.A\nIM.1\n1.5\nPM\n11,00\nAT\nN.)\nW.º\n1,8\nM\nЫ\nin\n18\nM.I\n17.3\nIN\nU\n,\n,\nAR\nM\n1.2\n1.9\n3,4\nof\n-\n1.0\nn.)\n-\nor\n18.4\n12,1\n1.7\n-\n-\n4/2\n4.1\n4\n1,1\nI.F\n1,1\n1.0\n4\n,\n1.1\nST.#\n-\nN.I\nf.4\n1,4\nM\n-\n=\n43.7\n11\nNJ\nor\ndi\n.\n1.1\n1,4\neu\nLA\nM\n,,\nif\na\n,\nel\n1.4\n47,00\n-1\n18.7\n4.2\n1,1\n1,1\nF\n0.1\n\"\n-\n1,1\na\n10.1\n,\n21.1\nD\n14.1\nM\nLI\nit\n-\n-7\n12.7\n198.7\n(a)\n197,1\n14.3\n5.7\nM\n-\n-\na\nn.)\nIN\nH./\n1.0\n-\nL7\n1.8\n8.7\nil\n1.1\n1,7\n1.1\n1.1\nJ\nJ\nof\n#.7\n49,8\n- -\n48.4\n4.8\nLA\n1.1\n-\nF\n-\nNJ\nBJ\nMit\nM\na\n-\nM\n...\n,\n1.1\n1.2\n4.7\n1.4\n-\n4\n-1\n-\n(,7\n42.8\nif\n17,7\n1,1\n1.0\n1.1\n54.0\n- #\n30,0\n1.7\n1.9\n1.1\n5\n-\n1\n97.4\nH.T\n71.1\nLA\ndi\nM\n11.1\nN.P\na\n14.4\n1.1\nU.!\nal\na\n-1\nI\n(.)\nN.O\n17.0\nau\nf.1\n,,\n:\n21.1\nM.1\n-\n77.8\nf.#\n22.0\nJ.A\nLA\nLe\n,\nI\n13.7\n148,3\nL4\n148.4\nDU\n8.1\n1.1\n15.7\nau\n301.8\nNo.:\nBL.#\n-\n195.1\nas\nLA\nMJ\n1.1\n149.9\n202.1\n147.5\n123,1\n1.0\nMLI\nNR. -\net\nna -\n4F\nIN -\n- -\n- et\n1957\n-\n-\n-\n- -\n-\n-\n-\n1857\n-\n-\n-\n- 1887\n1847\n- -\n-\n- -\n:\n- ean\n-\n-\nart\n- -\n-\n-\n- -\n-\nil\nant\n-\n1331\nan\n- 1887\nI\n-\nMIT\nAd\nActs\nMOTH\nanto\nMin\nado\n-\n-\ndate\nArtie\ndate\naction\ni\narta\nadto\nbehined\n-\nal\nLIMIT\n4,147,1\n4,141.1\nN.I\nINA\n-\nNI.F\n342.2\n10.9\n111.8\n01.5\nno\nau\n-\n51.0\nELI\n-\n-\n.7\n1.1\n17.1\n25.3\n7.8\n17\n12\n-\nID\n41,1\n411\nM\n1.1\nf.1\n1,5\n4.2\n2.P\nAS\n...\nL\nIN\n47.2\n71.8\nne\n1.1\n-\nif\n24\n-?-\n-\n1.0\n2.2\n-\n:\n13\nat\n--\nS.#\n9.4\n163\n11.1\nsur\n4.3\n..\n2.1\n7,8\n/\n#\n16\n-\n5,1\nM.7\nLA\nthe\nM\n-4\nN.:\n23.1\net\n2.1\n1.3\n,\n1.8\n1.9\n-\nauf\n-\nJRAY\nN.I\n77.1\nAT\n1.1\n14\n.12\n7:7\nI\n10.3\n1.8\nL/\n\"\n1.8\nis\nof\n-\n14.8\n113.4\nu.s\nM.F\n11.7\nINS\n1.7\nT.I.\nT.#\n1.7\n-#\nel\nof\n-\n1,8\npla\n\"\nN.I\nM\n1.1\n..\nj\n-\nall\n14.9\n:\nM\n,,7\n-/\n18\n:\n-\n100.3\n111.7\n59.8\n1,7\n174.1\n376,1\n-\nV.P\n114.7\n173.9\n-\nBLA\nHL?\nuna\nyour\n1257.0\nVII\n171.4\nW.I\n7.1\n17,6\n7.1\nR.1\n19.7\nI\n200.1\n40.0\n45.9\n7.4\n$7.4\n14\n1.1\n117.1\n111.4\n87.8\nm.s\nar.a\n38.4\n111.2\[email protected]\nuse\n-\n4m.7\nIN.\n48.4\n186.7\n111.0\n$7,7\n185.0\n14.0\n475\nBULF\nINJ\n12F-F\n40.7\n404.1\nMJ\n!\n4,201.1\n128.1\n&\n--\nà\n4,001.3\n187,3\n3\n1,087,1\n24.6\n8,427.3\nW.W.T.T\n1,800.0\nRegraded Unclassified\nVII\nPRICES AND YIELDS OR\nVARIOUS TREASURY NOTES\n127\nJuly 28 to August 21, 1937\nCoupon rate:\n1-5/8%\n1-1/2%\n1-1/2%\n1-1/2%\n1-3/8%\n1-1/4%\n1-3/4%\nMaturity date:\nMar, 15, 1940\nJune 15, 1940\nDec. 15, 1940\nMar. 15, 1941\nJune 15, 1941\nDec. 15, 1941\nMar. 15, 1942\n12 Prices (everage between bid and offer):\n1937\nJuly 28\n101.01\n100.21\n100.19\n100.16\n100.01\n99.24\n100.26\n29\n101.02\n100.22\n100.19\n100.17\n100.02\n99.25\n100.27\n30\n101.02\n100.22\n100.19\n100.17\n100.02\n99.25\n100,27\n100.26\n31\n101.01\n100.21\n100.19\n100.19\n100.01\n99.24\nAug. 2\n101.01\n100.20\n100.18\n100.17\n100.01\n99.25\n100.25\n3\n101.00\n100.20\n100.18\n100.16\n100.01\n99.25\n100.25\n4\n100.30\n100.19\n100,18\n100.16\n100.01\n99.84\n100.84\n5\n100.31\n100.20\n100.18\n100.16\n100.01\n99.25\n100.24\n6\n101.01\n100.21\n100.19\n100.17\n100.02\n99.26\n100.24\n100.24\n7\n101.01\n100,21\n100.19\n100.17\n100.02\n99.27\n9\n101.01\n100.21\n100.19\n100.17\n100.02\n99.26\n100.24\n10\n101.02\n100.21\n100.19\n100.17\n100.02\n99.26\n100.24\n11\n101.01\n100.20\n100.18\n100,16\n100.01\n99.25\n100.22\n12\n101.00\n100.19\n100.17\n100.15\n100.00\n99.23\n100.20\n13\n100.30\n100.19\n100.16\n100.14\n99.31\n99.22\n100,19\n100.19\n14\n100.50\n100.19\n100.16\n100.14\n99.31\n99.22\n16\n100.20\n100.17\n100.15\n100.00\n99.25\n100.20\n100.31\n17\n100.31\n100.20\n100,17\n100.15\n100.00\n99.25\n100.80\n18\n100.19\n100.16\n100,13\n99.31\n99.21\n100.19\n100.30\n19\n100.26\n100.14\n100.11\n100.09\n99.27\n99,14\n100.14\n20\n100.22\n100.09\n100.07$\n100.01\n99.24\n99.08\n100.00\n100.11\n21\n100.25\n100.12\n100.09\n100.03\n99.27\n99.11\nTielda:\n1937\n1.320\n1,358\n1,367\n1,509\n1.567\nJuly 28\n1,226\n1.267\n1.213\n1,256\n1.349\n1.358\n1,302\n1,550\n29\n1,380\n30\n1.320\n1,349\n1,358\n1,302\n1,560\n1.213\n1.256\n51\n1,224\n1.267\n1.319\n1.349\n1.367\n1,305\n1.569\n1,224\n1.277\n1.349\n1,367\n1,302\n1,574\nAug. 2\n1.329\n1,328\n1.358\n1.367\n1,302\n1,574\n3\n1.235\n1.277\n4\n1,328\n1,358\n1,366\n1,309\n1,581\n1,259\n1,288\n1.277\n1,358\n1.346\n1,508\n1,681\n5\n1.247\n1.588\n1,349\n1.358\n1.294\n1.581\n1.222\n1.265\n1.319\n6\n1,281\n1.265\n1.318\n1,548\n1,358\n1.287\n1,581\n7\n1,221\n1.265\n1,348\n1,358\n1.291\n1.580\n1.318\n9\n1,318\n1,348\n1,358\n1,291\n1.580\n10\n1.208\n1.264\n1.326\n1,357\n1,366\n1,302\n1.594\n11\n1,220\n1,275\n1,232\n1.886\n1.366\n1.375\n1.317\n1,608\n1,337\n12\n1,346\n1,375\n1.383\n1.324\n1,615\n13\n1.256\n1.286\n1.346\n1,383\n1,321\n1.615\n14\n1,255\n1.286\n1,374\n1.274\n1.365\n1,375\n1,313\n1,608\n16\n1,242\n1.336\n1.608\n17\n1.242\n1.274\n1.336\n1.365\n1.375\n1.313\n18\n1.346\n1,383\n1.583\n1.352\n1.615\n1.854\n1.285\n1,417\n1.382\n1.650\n19\n1,341\n1.393\n1,419\n1.303\n1.429\n1,690\n1,392\n1,486\n1,438\n1.346\n1,427\n20\n1.412\n1.417\n1.407\n1.672\n1,315\n1,364\n1.472\n21\nRegraded Unclassified\n128\nVIII\nTREASURY BILL ISSUES\nJuly 14 - August 18, 1937\nDate\nNo. of days\nAverage Price\nAverage Rate\nSHORT TERM\nJuly 14\n155\n99.819\n.419\n21\n148\n99.837\n.397\n28\n142\n99.853\n.372\nAug. 4\n135\n99.915\n.228*\n11\n129\n99.924\n.211*\n18\n122\n99.927\n.216*\n* Payment by credit in war loan account.\nLONG TERM\nJuly 14\n273\n99.610\n.514\n21\n273\n99.620\n.502\n28\n273\n99.632\n.485\nAug. 4\n273\n99,646\n.467\n11\n273\n99,638\n.478\n18\n273\n99.652\n.459\nAccounts and Deposits\nAugust 23, 1937.\nRegraded Unclassified\nRISDS APPROPRIATED AND ALLOCATED FOR RECOVERY AND BELIEF, EXPENDITURES THEREFROM.\nAND UNEXPENDED BALANCES\nAUGUST IS, 1997\nOFFICE OF THE SECRETARY OF THE TREASURY\n- -\nAppropriation\n- of -\nDaily Statement of the United States Treasury\n- -\nTwo\nFines/ the\n-\n-\n- Fisher\nRemember\n-\nmile\nE\nIFMI\nI\nCOMPILED FROM LATEST PRIPED REPORTS FROM TREASURY OFFICES AND DEPOSITANCY\nI\nI I\n- -\nAM NUMBER\nprovides Avia\nA i\n-\n- Test. HM.\n-\n4ND -\nAUGUST 19, 1937\n129\n----\n-\n-------------------------\n-------------------------\nCURRENT ASSETS AND LIABILITIES\n----\n---\nGOLD\n10.02.20\n-----\n----\n-\n--\n-----\n----\n-\nASSETS\nLIABILITIES\n----\n---\nBold\n$12,807,784,142.53\nfiuld certificates:\n-\nOutstanding (semile of Treasury)\n$2,902,142,889.00\n129\n----\nDald perilicate of non-\nel\n2020\nNEWER Federal Excerve Eyalem\n0,010,442,436.78\nBedamytion Banarvé\nM\n10,121,001.75\nsummer\n---\nGold PRODUCTS\n150,009,430.95\nI\n-\n!\nI\nI\n.\n-\n---\n----\n-\nI\nof\n-\n$\nI\n- M\n----\nEnchanger vishOlastion final\n1,600,000,000.00\nsmen\nMail\nNEO\nI\n10,854,746,418.46\nQuit la created fandi\n-\nIssure\na---\nBalance of\nEMIGO\nresulting trais -\nI\n-\nEMB\n-\nis weight of\nthe cold dellar\n140,001,462.07\n----\nis working balance.\n5\n1,642,047,724.07\n----\n---\n......\nfirst\n-\n---\nMADH\nTotal:\n13,837,394,142.63\nTotal\n12,327,394,142.53\nde\n---\n-\n(*)\n-\nSILVER\n---\n:\n-\nFruis\nASSETS\nLEABILITIES\n-\nconfirm\n---\n----\n-\nDiver\n$860,456,818.00\ncontificates unternanding\n$1,300,728,994.00\nBluer dellars\nCOMMUNITA\n501,112,807.00\nTreasury services of 1890\n1,171,722.00\nBillower to grand food,\n42,670,608.09\nIMMES\nUNITED\n-\ncommunits\n.\nTotal\nTotal\n1,374,571,325,09 BY\nla - for the [ pour la - you very - of the - Finance\nM - - - Extend lamit habi una - - ast - Inc. a. las the - - - in point mir\nInsury - of - - - - - - - - - - - signature at -\n- - The the under privalled - anvided M M - Feirnd Mit - and - Alip 26. NM.\n-\nDer\nGENERAL FUND\nI\n1\nPeleral\nBaylar\n$\nName\nthe\nLine\n- - is the - al Fee IL - - - as - - - Company will etce\nin\nthe\n1\nE\n1\nMassismed\nM\nthe\nto\nis\nthe\nAMETS\nAdditional\n-\nfor\nnew\n1\n-\n-\n1\nL,\n-\nA/T\n-\nfundel\ntheir\net\nexpensive\n-\n-\n*\n-\nI\nSuid (M abrie)\n$1,642,047,734.07\nTreasurer's checks\n$11,406,014.08\n-\n-\n-\ntax.\n-\n-\n-\nthe\nI\n-\nI\n-\nI\nE\n-\nthe\nPlace\nBirer (na slowe)\n42,470,000.00\nDegistration of Deverstant efficers:\n- a - - the - Appropriation Art. Emil - parti, MÁ - of - - The of - 187. - via Bermute - - Finance Corporation is\nTotal States\n3,000,000.00\nFort Offive Department\n2,294,334.04\n-\n-\nde\nFactoral\nname\nFederal Belorve siles\n13,947,770.00\nBoard of truntees, Fortal Buvings Systems\n-\nInstruction\n-\nat\nunits\n-\n-\n=\nus\n-\n-------------------------\na\nPutite\nWarks\nON\n18\n1\n-\nto\nla\n-\n14.\nFederal Reserve health tates\n166,750.50\n-\nand\nPare\n-\n-\n-\n5-parents reserve lawful many\n59,300,000.00\n1\nrelined\n3\nin\n-\nIL\net\nI\nMaterial bank series.\n210,261.50\nOther Reposita\n7,367,000.77\nde\nTransary.\n1\nI\n-\n-\nof\n1\n=\n-\n1\n-\nname\n-\n-\nif\n-\n-\ncompanied\nM.\nThe\nOrder airer neta.\nof diaburating\ncelle\nI\n-\n-\n-\nthe A problems Art - all u - ADDRESS BE And business) R use, - a the (H) he M the - comm M - nist - - - - siel preferent to - provided Fail is is Mine visits. Envirory\nMisor enla\netc.\n66,816,928.74\nRev believe That value)\n$02,800,234.46\nDepatis Der\nan\nUSA\nI\nI\na\nla\n-\nIf\n-\nI\n-\ninstituted\n-\nto\n-\n7\n-\n-\n-\n-\nline below value)\n000,410.20\nRedemption at - mank 15-\nvis.\nDETAILS OF REVOLVING FUNDS INCLUDED IN EXPENDITURES ON PAGE 2\n2,792,384.40\npersonal not lawful manager)\n405,460.00\nin:\nPresidented anchange, etc.\n19,200,007.70\n2\nPederal Basarva banks.\n105,502,938.97\nTM -\nTimal pear -\ndepositarios account of salse at\nBelance whey\n100,084,208.02\nassoridas\n658,283,000.00\nIDACTIVA gold 1A8\n-\na - -\nPayment\nI\nNo\nand the bank depositation:\nalown)\nI\nTo end of Descrer Culted States\n12,048,209.48\nIncrement se gold (&si\nTo of other Government afters.\n29,873,708.26 29,\nabove)\n144,001,482.97 482.\n- Dependen\nand\n-\n-\nForeign\n(aliver),\nI\n-\netc.\nTEMIS\nILBLINE\nCALNED\net\ny\nTo of Tressurer United States\n1,320,332.37\n---\nLease\n-\ns.g.e\n-ana\nfrom\n-------------------------\nTo credit of eiber Instaal altors,\n1,009,098.42\nWorking belazire\n1_082_204_418_44\nForm\n-\n-\n-\nFullippine treasury.\nTo and di Trassurer Italma\n1,082,496.75\n2,842,001,040.02\ntom - et -\nI E Dear\nTotal\n2,002,145,215.04\nTotal\nOUTSTANDING FEDERAL RESERVE NOTES, FEDERAL RESERVE BANK NOTES,\nAND NATIONAL BANK NOTES\nRECEIPTS AND EXPENDITURES THIS DAY\n- The\nresult a\nASSIST -\n- - taxt\n- Tower\nfai -\n- -\n-\n- creative\nI\n1\nI\n(nies\n- - - -\n-\ntaxis\nInternal revenue\nGeneral\nPatient - -\nbeen w.\nDepartmental\n$2,801,211.70\nFeland - web -\nI\ninternal\n1,782,338.11\nInsurest - public date\n283,519.90\nI\nsoame\nValuel ecrickment iss\n4,665.87\nAU wiber.\n6,800,606.70\n2\n- within - - . Int - the yas - Rate . Principal - - - - la - - - - en Theye - Doe -\nTaxas sale Bontal Security All\nReservery and patied\nMM.\n-\nIN\nI\n-\n-\n-\n€\n1\nCustoms\nBevelving hade.\n1,404,055.22\n-\nI\nof\nI\n-\n-\n1\nby\nI\n-\n-\nI\n-\nthe\nI\n1\nI\nI\n-\nLine\nCitized\n-\n-\n-\n1\n-\nI\n242,199.27\n17,604,539.49\nTRANSACTIONS AFFECTING THE CIRCULATION OF FEDERAL RESERVE NOTES,\n11,503,674.43\nFEDERAL RESERVE BANK NOTES, AND NATIONAL BANK NOTES\nTruel apprecia, es está. etc.\n946,710.74\nTruel increment or quid,\n200,025.49\nFuldis debt.\n1,144,522.40\nFulitie dist.\n759,037.25\n-\nI\n( 1\n- - -\n- form\nBalances previous dat.\nBulance unler lass above)\nThe -\n1\n- -\nTHAL\n2,600,894,871.26\nI I\n- - -\ni\nI\n-\n[\nRes\n-\nhar\n-\nI\nI\n1\nva.\nI\nI I I I\n---\nintere\nBer\nBlue Furchase Art. of 1994 AND the same) medibe manal he the the - the President's predamation daint sig. . 164.\nNine 1-Tale new represente ina the of sincer event se the eat of Lie Che valor\nand\nLOCARD\n-\ncase\n5\nNome 1-Th amount far the mill of distrurging Sim and certain agrodits wise -\n---\n- -\nRegraded ed\n3\nCOMPARATIVE ANALYSIS OF RECEIPTS AND EXPENDITURES\nCOMPARATIVE ANALYSIS OF RECEIPTS AND EXPENDITURES-Cominued\nAUGUST 19, 1937\nARGUST 19, 1987\nCorresponding\nThis -\nperiod last\nFiscal 7087 1935\npariod Recal\nCorresponding\nThis month\nPM FROT\npetel last\nParal\n7\nmissing -\n1831\nGENERAL AND SPECIAL ACCOUNTS\nracer ACCOUNTS, INCREMENT 0% GOLD, ETC.\nRemiste\nlisternal PAYMENT\nTrust amota\nles\nPLTANKK\nInsurent reville trea in the weight of\nInternal\n406,700,437.01\nthe gold dellar\nUnjust resident tax\n148,000.12\n100,004.36\nRespiration\n37,384.01\nARE\nTaire under Social Becurity Art.\nUnstiployment fund\n4,694,670.41\nEvery\nTaxe - and Unly employees\n19,01%,50\n31,157.85\nCustoms\nTotal\nMissing\nPrimode a severities:\nTruel\nchiligaticas\n0,511,102 W\nTransactions in shecking of\nAll other\n1,20,100.00\n17,000,202.00\n11,014,467.33\nagreedes (net), etc.\nParama Used inlls, etc\n$15,000.00\n1,026,082.07\n$17,341,256.76\n2,201,197.28\nChargeable against in gold,\n1,787,501.34\n7,735,800.41\nMelting - etc.\nOther -\n17,378,416.00\nParamets to Voloral Receive lants\n20.140.74\nVILIMY\nFederal Act, as\nTHE remine\n720,197,518.84\nFar of reflocal has soles\n571,000.00\nComployment trust fred:\n1,030,546.90\n6,000,000.00\n0,000,000.00\nDate\nOther\n4,400,000.00\n69,247,000.00\n39,400,201.74\n78,087,001.71\nhair milings\nOld-ego maine amount\n200,000.00\nhas highways\nInvestments end tranders (net)\n11,477,716.23\nBas and harber and find\nSeont payments,\n*1,000,001.00\nDONO\n23,172,097.15\n14,857,254.89\nRefired retiresant -\nInvistion projects\n2,134,120.83\nl'erante -\n426,640.01\n$17,001.00\nand (and)\n1,716,638.13\n10,000,001.00\nNated detrimes\n19,003,000.00\nBenndit payments.\n1,942,107.1)\nBalinad Internal del.\n199,020.02\nEMP\nRedal Seally Art.\n10,770,738.17\nTotal\nDaind of Columbia (II,\n2,000,000.00\nNational\n5,600,000.00\nExtre of resiple or credita\nArtir\n23,071,477.01\nExeme of expenditures\n22,477,146.56\nT0,107,224.90\n$2,764,237.27\nNary\n20,05,000.00\n74,204,001.54\nAdministration\nPUBLIC DEBT ACCOUNTS\n01,200,200.00\nAgrimilural Program\n32,100,111.00\nCivilian Commission Carge\n06.011.167.00\n27,172,661.40\nMarket operational\nfare Crét Administration\n17,594,224.04\nI\n$1,472,496.00\n72,367.61\nTurner Vality\nLUCH\nTreasury bübe\n501,256,000.00\nlimit M the date\n18,650,516.00\nTreasury ming securition.\n030,122,000.00\n42.20\nfature\nUnited Braine missings bonds (Including un-\n42.28\n-\n1,906,116.00\nclassified\nREVENUE\n26,754,711.30\nlas os fere\n4,713,775.49\n700,190.47\nBubiniai\n11,008.05\n110,009,711.20\nBulliotal\nAdjusted aervices beüde\n$40,530.00\nX.470,500.00\nH. Bannary not wast\nExchange:\nAgricultural and\nTreasury arter\nFormal land backs,\n9,748,428.00\nTransury India\nBox\n*77,964.97\nPutitle (including work millef):\n43,736,001.80\nprojects.\"\nPublic highware\n3,203,774.02\nJuner and harfer - and fund\n14,476,214.78\nformal meriow:\nREVIEWE'T\nComployment truet foid\nHirst United Administration\n30,181,000.00\nIld-up name smoot (nther)\n29,247,000.00\nWorks Program Administration\nMT.136.73\nRailmed - address\n41,000,000.00\n10,215,000.00\nREMIT\n12,000,000.00\nAM wither\nAM - lusse -\n13,499,016.77\n17,10,000.00\nCivil service intirest Fund (motes)\n19,000,000.00\n10,000,000.00\nloan ayesem\nFursign Service minimist foid (paire)\n71,300,000.00\n169.42\nCanal & had\n367,000.00\n30,000.00\nEnergency bousing\nAlasks Railmad beforment ford (sutes)\n489,000.00\nkmin\nFederal Houng Administration\n740,811.00\n185,000.00\nAdministrative\nMisestance\nJEMES\nSubtotal\n01,181,000.00\n4,467,600.00\n254,872,000.00\nsome\nAdministration bis Indovidual Belovery.\n30.00\nNOT\n17,220.10\nTotal pulle delai\n401,676,230.00\nExpenditions\nReveiving Ficendar\nMarkst spreations\nAgricultural NAME:\nCashi\nCommadity Credit Corporation\nTreasury $\nPare Credit Administration\nCertificate of\n41,200,601.83\n264,200.00\n363,772,099.00\nTreasury petas\n76,200.00\nPrivate works\n431,120.00\nTreasury bonds\n178,250.00\nand grants to States, eximinal-\n1,132,400.00\nV. etc.\nUnited States writings lands\nAdjusted arrie tands\n2,544,211.75\n10,000.00\nLotor -\n744,173.17\nFirst Liberty biods\n5,040,600.00\n37,645,600.00\nFourth Liberts hunda\n142,050.00\n308,134.00\nExport- Import Bank of Weshington\n179,376.36\nPostal Barlogs tends\n$47,630.00\n1,125,500.00\nFinance Corporation\n680 00\n1,27,000.00\ndirect Indian and expenditures\n46,220,541.01\nOther dibs Hage\n2,030.00\n-\nNational lank and Federal\n26,476.25\n20,764.72\nCARD\nSubtotal\n2,012,417.53\nback -\n7,448,000.00\nIV. Transfers to truel - MAI\n143,048,832.00\nname -\n47,000,000.00\nBallmad retirement\n20,000,000.00\n£3,000,000.00\nEntange\nAdjusted error certificate Fund\n30,000,000.00\nTrimury total\nConversment employees' Ender\nTreasury Incode\n(United Finance starr)\n72,216,106.00\n44,735,200.00\nSubtotal\nExhibital\n$1,000,000.00\neirlas:\nV. Dels relimants (sinking hind, atc.)\nAdjusted service certificate had\n1,100,000.00\n39,540.00\nUnemployment true tund\n13,000,000,00\n2,000,000,00\n50,000,000.00\nTital expenditions.\nDril services - famil (avise)\n7,900,000.00\nForeign Berries - first\n1,700,000.00\n1,900,000.00\n1,700,000.00\n- uf\nCanal returned find\n18,000.00\n14,000.00\n24,000.00\n46,000.00\nlane of rependities\n15,000.00\n46,000.00\n258,018,942.40\n2,412,160.00\n16,766,000.00\n4,192,700.00\nSUMMARY\n11,818,000.00\nCame of\nTotal poblic dalis expenditions\nLase público delta minimols\n205,016,862.00\nExem of\n20,000.00\nName of\nKama of expenditions (estuding pulide dabi\n272,190,200.10\nTran amounts Increased - ets, of\n(-) if expecitions (4)\nMarket spendime.\n(+) - decrease (-16 debb\n+74,402,958.00\nMills.\n+384,750,603.00\nCertificate of\n-254,000.00\n-70,000.00\n- 481,150.00\n-231,766.00\nLaw estimal lack colé\n2,015,645.00\nTennery Biller\n-1,150,400.00\nBonds.\n+94,677,840.01\nTvtal - of expendions\nOther Nebt\n-24,832.05\n-42,444.50\n-67,000.50\nImme (+) or detram (-) a pin ad\nNational Seni - and Total Namerro taxis\nDANA\n-7,266,000.00\nInternal (+) er dama (-) in the deld\nPublic dela si beginning of - - yes\nPúle delà Mile date\nAMERICA\nSpecial -\n-22,200,001.00\n+2,60,000.00\n------------------------- THE\na\nTotal\nthe de Additional 1946 of of - which work. vit las dues M - is the - Releced for the al est the SMAL et years expenditions Instituted appearing today - \"Regrary P. of On MM daily valid Treasury medium Mas\n\"Pate outer The Water-Ad apelitions rige.\" - this year UST miy Boulder Caugue project, alter refamation for that your relat being 1 Indisded la\n. Owned this siglio to the vide as dipling ha the year 1987 are instaded is \"Departmental\" \"Berrury and Halmunt\nIncome of\nadount be the hole Part via Office expended Impartant by the la 0. Us D. il, the Marition few you Commission 1949 farm permal - redised M the Ny net of Issue - 7a, and 1930 (40 of the transfer of that\nthe\nof la # milk - E. Mariliana 5. Marythe Complete APR classified - die I M \"Department\", and BILL to & ($89). 7 - the Time ING\nlase of (dident).\nDetails MY sim in expelmentary material - 4.\nRegraded Unclassit\nOFFICE OF THE SECRETARY OF THE TREASURY\n130\nDaily Statement of the United States Treasury\nCOMPULED FROM LATEST PROVED REPORTS FROM TREASURY EFFICES AND DEPOSITANIES\nJULY 31, 1937\nCURRENT ASSETS AND LIABILITIES\nGOLD\nASSETS\n-\n-\n$12,444,662,870.14\nSeld certificates\n(stable if Treasury)\nBuid certificate of time-\nresure Federal tystem\n6,018,442,436.78\nRedemption find-Pateral\ndates\n0,251,011.75\nOnld resurre\n156,030,430.95\nhis - Code -\n! 1 = I I V 1 I\nTown: - - ONE - - - \"\n- - . -\nEnclange fand\n1,800,000,000.00\nUnit b general bad:\nBalance of Increment\nresulting from no\nductime in weight of\nde avid dollar\nb working balance\n1,368,146,711.68\nTital\n12,444,002,520.14\nTotal\n12,444,062,670.14\nSILVER\nASSETS\nMARILITIES\nBiver\n$802,058,621.73\nSüver internating\n$1,321,487,722.00\nStreet dellars\n805,271,314.00\nTreasury sitos of 1890 extetanding\n1,171,922.00\nSiner is tax\n44,600,491.73\nTotal\n1,207,300,135.73\nTotal\n1,387,360,135.73\nGENERAL FUND\nASSETS\nLIABILITIES\nGald las shore)\n$1,528,146,711.05\nTherefore's shecks\n$10,681,005.08\n(as above)\n$4,000,493.73\nDepisita of client\nRatied Diates\n2,032,708.00\nFrat Office Department\n2,743,079.38\nFaderal Baserve suive\n14,286,830.00\nBoard of Partal Garings Rystem\nPederal bank 200M.\n257,047.20\nd-parted FRESTYA, lawful BUSINY\nAD,300,000.00\nMational bask soles\n$41,67L.50\nother deposite\n0,008,575.64\nSubsidiary sur via\n$,623,004.05\ndeta of disbursing\nallows als.\n70,702,708.37\nMinar esta\nSince bullies (mail value)\n369,655,076.43\nDepante to:\ntradies nin\nRedemption d' national bank sales (&-\nde\n3,472,520.04\npersonal net lawfel\n408,460.09\nalso\n22,041,420.53\nDeposite for\nFederal Bearric\n247,092,164.65\nBalance tobacco\n179,620,240.03\nSpecial departacies Amtil at nales of\nGerernment securities\n200,015,000.00\nInstite [M]\nNational and other Sank\nabove)\nTo nelli of Transine Extrad\n12,397,045.42\nIncrement se enter (sa\nTo credit of siber International\n10,693,986.27\nabove)\nEvents degistration\nTo crudit of Treseure Biain\n200,673.58\nser sole 1\nT= outh of older\n2,230,347.40\nValue balance\nPullippine treasury\n74 credit et Treasurer United States\n1,064,787.89\n2,636,004,384.86\nTotal\nTotal\n2,818,724,625.08\nRECEIPTS AND EXPENDITURES THIS DAY\nReseipts:\nInternal revenue\nGeneral:\n$066,272.12\nDepartmental\n$5,410,251.21\nInsure tax\ninsural\n10,007,400,36\nExternal as public debt\n1,456,025.87\n1,943.00\nAG other.\n0,402,878.22\nTAX\nTexas under fedal A/L.\n1,849,403.01\nand relief.\n9,354,947.36\nTun - corries and their -\nRevelving bade\nName\n100.02\nTransfers - trast ate\n1,008,279.85\nremigis\n273,461.77\n56,962,940.12\n15,432,001.12\nTrul - auf -\n1,018,786.06\nTrust securita, increment en sis.\n39,302,836.31\nPalis\n6,899,102.30\nFebilis desit\n1,101,084.25\nBalance perform day\nof\nBelance swing Date above)\n2,634,004,284.83\nTotal\n2,070,603,544.07\nTotal.\n2,070,005,548.07\n- of oncia\nthe She Parkam Ans M Himale May and the - released for Man aliver reselved souler Lie dated Are .\nNum 1-Th - - resulting That OF - of PAY equal to the mit of the also sequired under NM.\nName 1-The - to the credit of delevrance - - seriale - today -\n-\nRegraded Unclassified\n2\nCOMPARATIVE ANALYSIS OF RECEIPTS AND EXPENDITURES\nCOMPARATIVE ANALYSIS OF RECEIPTS AND EXPEND!TURES-Contiaued\nJULY as, HMP\nCompressive\nCorresponding\nCorresponding\nThis -\nperiod last\nRest year ryan\nparted Seral\nThis\ngrowthind -\nItems year 1258\nperiod Recal\nyour\nyear 1887\nFANT\nyear 1917\nGENERAL AND OFECIAL ACCOUNTS\nTRUST ACCOUNTS. INCREMENT ON COLD, ETC.\nTrust\n-\n$11,790,971.53\n818,411,000.26\n$20,131,632.14\nlesse lat.\n- reding (he relation la the Hipia\nname\nlie and dislier\n31,324.00\n201,079.03\n21,124.60\nUnited tax\n361,348 34\n201,316.28\nTexas - Aventy An\nDisciployment trud fand\n29,121,200.04\nthe\nTune - - and -\n----\n$1,360,452.27\nTotal\n54,696,229.33\nUnited\n-\nExpensivement\na\nobligation\nTrust Airmints,\n21,055,12 0\ndifference\nTransactions is sheeking - of provided\nAll nie\n1635,00\n10,100,046.50\n(NM)\n$1,410,201.20\nFALIERS Canal solls, etc.\n1,109,201.73\nChargester apaint - -\n4,416,632.00\nMinima\nI\n-\n111,180.07\n10,140.74\n111,180 97\nOther\nPayments to - 13b,\nFriend Am. -\nTotal maiple\nthe effirment of national back color\n0,073,200.00\n0,072,294.00\nUteuplaiment out\n25,000,000.00\n4,232,000.00\nI\nL United\nOther\n200,000.00\n50,000.00\n255,000.00\nDepartmentsi*\n29,217,701.00\nDisp mane amount:\n1,317,953.10\nInvestante soil transfers (red)\n+1,501,001.00\nPylice\npayments\n48,327.05\nHive - -\n12.742.487.36\nBalload missed\n+10,000,000.00\n-\n- transfirm (pat)\nCanal\n1,500,780.00\ninsults payments\nPostal\n4634,200.00\nHairond Airt\n04,710 00\nTotal\n- Am.\nDistrict of Columbia (LL darti\n- of melyu emile\n37,580,078.11\nNational deference\nI i 4.\n11.707,741.00\n11.787,741.48\nArmy\n20,000,000.00\n-------------------------\nSany\nPUBLIC UKUT ACCOUNTS\nTransis\n-------------------------\nBeselplac\nAgrinature Program\nMariel qualime\nOrites Commissione Corpe\nCash\nFun Cavisa Administration\nTreasury bills.\n250,154,000.00\nValue Authority\n10,06€ 95\n40,001.00\nTransury soles\n- Ge public debit\n0,502,000.00\nhands\nReturn\nClaims Ristes hunda -\nCode\n2,107,106.00\n- -\n2,18,000.00\nfotal\n1,00,000.00\nPromoting lact - feha jacture\n1,748.94\n146,214.30\n1,741.99\nSubtotal\nAdjusted IMPTION\n1,384,020.00\n62,453,000.00\n1,184,050.90\n(22,452,001.00\n11. Add relief\nAgricultural ant:\nTimes seie\nVideral backs\n746,082.40\nTransury tools\nMirf.\n654,413.00\n654,011.08\nPublic vicia out -\nprojects?\nPolice highways\nSpecial\nhim and Imphe with\nUnimployment trail non\n23,010,201.00\nHere/\n316,251.02\nDisap marrie airect furiel\n41,000,000.00\n43,680,002.00\nWorks Pingre Administration\nCivil siffile Missil had -\n71,300,000.00\n43,790,000.00\n71,200,001.00\n42,700,000.00\nAll yür\nThings funt\n347,000.00\n243,000.00\n367,000.00\n262,006.00\nAld in lice insure\nCanal Any has (MM)\n660,000.00\n489 000 00\n$01,000.00\nlive Less and\nAlassa Ballmad nument Tusdi\n162,000.00\n189,504.00\nComplo being\n€ 243,070.42\n2,883,367.70\nFIRMAL (\nIndial\nCommand THE assoce find -\nAdministration\n-\nAdministration for Reserver.\n3,030.70\n15,356.32\n2,039,76\n162.391.000.00\n50,815,000.00\n142,241,000.00\n50,012,000.00\n198,000,424.25\n201,638,248.25\nTotal politic delai memple.\n$48,601,000.50\nno. Divisivise\nExperititure:\nNo.:\nMarin\nCommunity Credit Cargoration\nCase\nEarge Credit Administrative\nTressury bills.\n212,834,090.00\n254,003,000.00\n254,555,000.00\nPublic -\nCertificate of\n115,200.00\nand grade la -\nTravility pulva\n1,140,100.00\nV76,180.00\n- -\nTransury bonds\n18,000.00\n10,000.00\nLesse to milinede\n16,570.00\n$76,670.00\n130,246.04\nw/op bands\n1.776.248.72\n4.406.177,00\nAuthorized service Soods\n-------------------------\nBack d' Washington\n440,344.27\nFirst Limity bunde\n630,200.00\n640,000.00\n1,484,200.00\nFraum Corporation\nFound Unity Invoice\n$64,050.00\n2,024,450.00\ndives - and supenditures\nPortal Maringo Insula\n712,646.76\n199,526.00\n712,460.00\n880,520.00\nOther delli Manua\n18,612.00\n48,208.75\n18,612.30\n46,200.78\nExtressal\nNational back orten and Federal Beserve\nback -\n11,624,271.08\n7,212,645.00\n11,424,275.00\nIV. Transfere - truel etac:\nChilden sosiol\n42,090,000.00\n42,000,000.00\nResided\nBailned entirvement samunt\n48,000,000.00\n32,002,020.00\nAdjusted ente curtificate End\nCovernment employees' estiment have\nTransury\n(United Bluden share).\n73,254,000.00\n71,211,000.00\n46,734,800.00\nTransury tribute\n125,252,000.00\n76,851,200.01\n76,853,200.01\nV. Dulta - (sinking had wird\n30,130.00\n5,031,400.00\n20,450.00\n6,020,408.00\nSpenial -\nAdjustment hand\n1,500,000.00\n25,000,000.00\n1,500,000.00\n35,000,000.00\nTinal rependitions\n417,108,443.21\n417,108,863.31\ntrail (und\n50,000.00\n20,000.00\nentie fust\nError of -\nPingo Service minnel found\n18,000.00\n20,501.00\n18,000.00\n30,000.00\nof\nCanal Dine food (seles)\nPostal Hurings Review (minked)\nSUMMARY\nPedrod Deposit Income Organization\nDate of experitions\nSubtotal\n1,115,100.00\n35,070,001.06\nLess puide debt\n5,049,196.00\n3,000,400.00\nTital patita 6/4 expenditions\nDes at registrations (resting debt\nTypes - - give withing HIM - musts\nIns if\n(-) if informations\nTime N. apentitions\n234,748,254.00\n334,748,214.00\nIncrease (+) M time (-) in public Add\nLow national Imme - -\n4,072,204.00\nMariet\nTraino -\n+137,423,603.00\n4,451,000.00\nTotal - of vonditions\nof\n-100,500.00\n-133,200.00\n-105,980.00\nIncrease (4) - derrease (-) in - fund\nTransity -\n-1,141,000.00\n- 874,150.00\n-1.141,100.00\n1\nIncrease (+) - demoses (-) - (In public -\nClim della Dema\n-44,891.73\n-18,012.00\n-19,400.75\nPolice a of or past\nNational tack - and Fisheral Ram back\nI\n-7,112,848.00\nPublic Vide date\nInfilited\n- Additional - - he the months and the final your un Individad under \"Bininery and - -\nEpesial and\n+18,715,606.00\ndisabilization of which ell la done a Be deleved of - and expenditions appearug - pid Like daily Trainery\nfor the LAS of - smills\nTotal\nGeneral parte Via aption for Die - your 1997 are - - \"Departmental\" and relief medical\nthis repline fill 9a Ani year THAT into any Buider Cadynix - schelf release projects for that poir talog -\n\"Pville Walk- AB what\nExtess of (division).\nTM unter this stamilization be the month and kins - your IVAN lave - ha - - a the\ntransfer of that - by Our Part Offer Department 18 INF U. a. Marritive Consumer promant - Not APL of June or, jess can State\nno, The united Timile - expensived by Mas D. 8. Commission will be - This - as \"Degartmental\", Mill\n- & - 19th of On - M Marrium Commission.\"\n- of\nDetails - does be - 4.\nRegraded Unclassified\n&\nFUNDS APPROPRIATED AND ALLOCATED FOR RECOVERY AND KELIEF, EXPENDITURES THEREFROM,\nAND UNEXPRNDED BALANCES\nPRELIMINARY STATEMENT OF THE PUBLIC DEBT JULY 31, 1937\n10n the last el dalla Transury\nJULY as, 1987\nban:\n$5, Pressure Out loss of 1001\n- - -\nis Correvies bands of 1946-47\n$48, 800.000.00\nIN% Batings leods (14th le seu eder\n24,684,500.00\nTRAVELY\n14% of 1047-12\nhave - Exemptive -\n-\nmi\nCompaniel\nINS home di\n-\n1% Issue of 1944-54\nPlease En\nTotal\nFines 1\nen\nIS - of\n-\nI -\nINS imb al (945-50\n1,000,374,400.00\n1\n-\nEnergent\nI\n1 !\nas hunds of 1000-02\n- -\nas Intás al\n- -\nsind -\n454,180,200.00\n24% Made of 1645-60,\nkm express\n- -\n[ -\nas tends el ING-O\n2,611,107,850.00\n- -\n-\nat THE -\n-\nNS twice if 1945-47.\n- 14, -\n- -\nINS hicly of\nas - M 1948-51\n14% holds of\nas humb uf 1001-94\n- alt.\n15 beits d FAST-85\n-\n25 landy of 1956-59\nTHE\n----\nman\n-\n145 leads if 1041\n434,453,200.00\n21/6 hands of 1919-12\nOrganization -\n----\n-----\n----\nass humb uf 1242-45\nleok -\nUnited Rater form Sender\nCayinal -\n10,000,000.00\n-\n----\n-\nAND\nNAME\nE\nCARD\nBirth A\nto -\n- - -\n----\n----\n-\n---\nII.\n----\n-\nbire c.\n$45,913,218.00\n- -\n----\n-\n-\n---\n-\n-\nINSU\nContracted sales.\nTHE -\n/\n----\n---\n----\n----\nLALOR\n-\nConservation\nMissid Any lends d 1945\n-\n-\n----\n---\nasse\n---\n----\n-\nAdjusted Service Life Insurance Fund write\n- -\n-------------------------\n---\n-\nand\n- -\n-\n----\nLove\n----\nOF\ni\n----\nTital lends\n21,646,503,056.02\n--- - - -\nneed\n----\n---\nDEDO\n----\nTenumi Name\n- 46\n---\nMemo\ncome\nINS A-19CT, instruring Agl 15, 1997\nWorks -\nI\n-\nas estima Pm.\n$74,670,600.00\n----\n- - - ---\n29% - exturing Just is, 100%\n614,014,800.00\n- - -\nas enter C-MM, extiring Mar 16. TOM\n- - ytars.\n---\n---\n---\nimmo\n455,178,600.00\n- timer -\n25 are D-UB, maistag N/A IN\n---\n----\n-\nProfessional will\nas aria beliving too 1A, 1981\n1,298,714,200.00\n- -\n-------\nAUTO\nave\nINS eris D-WA, naturing Das n. 1984\nElectrons -\n----\n---\nAREA\n$26,233,000.00\n- -\nINS eris C-199, No. is 1000\n941.013.780.00\n-\n1,000,000.00\nIMAX\nexus\n- -\nas eries D-198, celoring Hapi, IA. 1999\n426,554,508.00\n-\n----\nMONT\n----\nINTERES\nISS aria 5-194, baluring Mar. 15, 1940\n-\nTwomit\n-\nISS are natiring 3000 IL THE\n-\n-\n----\n-\n-\nINS miss C-IMI, cavering Die 18. isto\n- -\nT37,141,600.00\n- -\ni\nasse\nthe\nINS mine A-191, estaring Mar 13, 1041\nTelephone TADAY Author\nI\n----\n----\n-\nas series 0-001, submitting June 14. 1941\n513,677,500.00\n-\n-\nand\niss eria assima Drs. is. Bit\n294,421,400.00\nwe A-192 matiring Mar. 12, 1912.\nFunds -\n455,349,200.10\n4d\nCredit De\n11,017,241,250.00\n-\n-\n---\nname\n1% Didap more - Jun at, tou and 1912\nFee Credit\n-\n----\n----\n-\nsime\n----\nGASH\ni\nis Die enjor fund, ente to 1942.\n201,700,000.00\nis Fersign hat. series - to UNI\n-\n$ 400,000.00\nthe\n----\n----\npar\n----\n----\n----\nis Canal & ntiment fond. aria - M me\n$ 773,000.00\nLosse - -\n4% Alasks Reined fund caloring las a 1941 and net\n241,900.00\nInsurt -\n-\n----\n---\nTAME\n2% Postal withs, restoring Area 30. PHO\n20,000,000.00\n-\n[\n15, Federal Deposit Corporation entre, maining Dar 1, HOS.\n08,000,000.00\nCorporative trans\n----\n----\nCommitates -\n- -\n11,438,515,250.00\n-\n---\n1% Aujusted Anie Certificate Fust wris, insturing Jam 1, -\n24,100,201.00\n73% Unimployment Trust Fund with naturag June 20, 1038\n241,541,000.00\n-\n-\nISMEN\nTHE\n$77,461,000.00\nOried EMA\n=\n43\nVisant\n(\nBertas maturing ARE 1. not\n30,113,000.00\nmaturing Das. 12. 1077\nThe - - - - - to City - - a Timel - on - - - - di the - -\nBertin assigng Ave 107.\n10,143,000.00\nterm Dra. 1% IVT?\n100.107.000.00\n- moital - a unive society Am al has a. 190 la the - - - the police - -\nBeries maining AVE IN 1637,\nde Relief end of - - date --- - - MY - - - - - mini of -\nHorter untering Des IT, 1007\n50.012,000.00\n-\n-\nE\n1\n.\nTranspy\nCHARGES\nBeries mailing Aug. % 1997.\n50,158,000.00\nSerie resuluring be 12, 1897\n50.177,000.00\nno of - - - by - - et May = - May - MM a\n- - be wind Result - Misi provided in the Federal -\nService maturing Aspt. 1,1007\nSeria Realizing Das. 29, 1997\nFla in of NAME - provided - live - of Pats is. - - In Ille - - Felins . man al -\nI - - a the - - - CHE - eu - - - --- - ean se - - - . ase -\nBerten matering Bryt. A. 1017\n40,027,000.00\nService matifing In 1028\n60.048,000.00\n- - - - a - Employer\nmaketing Rept. 15. 10.17\n50,008,001.00\nforta instructions Jan 1008\n50,022,000.00\n-- to - NOS - provide - - - \" - El e the - Any. -\nI alient - - - all -\nBeries maliring dept. JB, LEFT\nmatering Jan. 19.\n00.000,000.00\n- salet - - - . - - - - - - - - - --- - - - - - -\nSmile maturing 17.\nSiris disturise Iv. zn FORM\nN. aller del - - - - Floward Email -\n-\nif\nSuits matering 3 14, 1017\nArvie claiming Per 2,15%\n56,014,600.00\n- Pake the - la - THE - end Up Insurer - km - (mL the - Name - -\n- - parties - anyward \" Lie - - - y FINE Form - - - - or Our -\nOrganization\nBerine mailuring Sept. p. 1987\nBeine Pain 1018\n26,037,060.00\nM - of the - per - trade - - - - M . media - Members the Failing Element - - Police --\nBeries maturing Sept. D, 1997\nBeing maisring Pets. 10, 195%\n58,546,000.00\nal - = - BENUILE instructions) - - - - a - - - - has Credit - DAS - -\nRerita maturing Onl 1007\n00,126,000.00\nberia maintig Fab. 23, the\n16,612,000.00\nunple Transity questi approvation - - as - apr. . an n.c.m.m.m. - - - de - of - e - - 40.00 - unde\n-\nBerie matiring Ock 13, 1487\nbelies matering Me. USA\n-\nTM\nfeb\n.\nHE,\ncell\n-\n-\n-\nA\n1\n=\nHAT\n1\nI\n>\nI\n-\nM\n-\nThe\n-\n-\nDecember,\nHerite mataring Oct. - 1497.\nAria destring Mar. Issue\n20,000,000.00\npour X Number all Bar - la - provided M\nlas Claims of hist, Name . - - UM - - - - and - primised - - Employer) Age:\nforms maturing on 1997\n$6,008,000.00\nPevise majoring Mar. 18, 1948\n50,048,000.00\nprovider M al ind, like - - - the - - - - Refund - - ----- - - One at - his - IDL - --\nhas - - Name - in - - - Not II, MIT - - is - M N/V M Use Agrinal and Additioness\nBeriew maturing Non. 3, 1437\nSeries maturing Mar. 28, 1988\n56,128,000.00\nBeries maluring Nos is, 1972\nSorial maturing Mar. 1028\n30,018,000.00\nDETAILS OF REVOLVING FUNDS INCLUDED IN EXPENDITURES ON PAGE 2.\nBerma estime Nov. 17. NOT\n60.027.000.00\nRociam caluring Apr. 4,1034\n30,010,000.00\n- matering Not 14, 1007\n50,034,000.00\nSurve mathering Apr. 18, 1938\n66,002,000.00\n- -\nFinal post 18\nBorrise maturies Des. 1, 1807\n56,004,000.00\nService naturing Apr: DI, 1988\n28,913,000.00\nServe maturing Des. By NOT\nService maturing Age. 27, 1944\n50,942,000.00\n2,412,863,000.00\nPagments\n- -\nPayment\n- -\n-\n-\n- -\nTotal Internal-bearing - Intelanding\nMATHERS Duer - Warre the\n- Date Orposito\n-\nsawa\n-\n-\n-\none\n---\n---\nOM delive prior in Apr. 1, 1917 Inscluding Postal Parap (endi)\n- MM pours - - - -\nand\n---\n---\n2N% Posted Savings Units\n-\nD\nI\n-\nTHE\n----\n-\n---\n-\nhand of Waiter\n---\n!\nsame\n24% 1% and 145 First Liberty Loan heade of 1602-47\n29,004,850.00\n- Date Department - and admitions\n-\n----\n-\n-----\n1% and 15% benet Liberty Less Sunda 1007-42\n1,431,656.00\n- - - - -\nnos Third lämrte Loss friends of 1938\n- -\n4H% Yourth Less twode of 190-88\n27,674,000.00\n2N% and as Virtory name if 1922-23\n691,500.00\nOUTSTANDING FEDERAL RESERVE NOTES, FEDERAL RESERVE BANK NOTES,\nTreasury name, as varture listed FAMILY\nAND NATIONAL BANK NOTES\nCertificate of et verbine Internet native\nTransacy -\n$60,400.00\n- - the\n- - Date\nAmount\nTreasury Allan certificates\nI I\nTransfer in\n- - -\n- Transport\n-\n-\n-\n-\nDem Beserm No INTERNET\n- ni\n-\nto - of\n- - line -\nComent Flator -\n-\n-\nlas and -\nFailured - -\nAGES\n-\n- Reserve back -\ncmme\n----\nI - -\n----\nsome\n----\nDeparte the of national hank will lame tank notes\nOM demind total and nimes\n2,682,510.59\n- were E - = name E. . - - - - - - - - - - of she Failed -\nTinh and Transity sevings - -\npayable is - - beld Ang - be The - M - - - - -\n- by the United Main - - - for Not -\nhas of - - - M - new - bei a the Transurer will pen - ky De Sales - of - - - - -\nTital - delid\nTRANSACTIONS AFFECTING THE CIRCULATION or FEDERAL RESERVE NOTES,\nFEDERAL RESERVE BANK NOTES, AND NATIONAL BANK NOTES\nCOMPARATIVE PUBLIC DEBT STATEMENT\n112a du - of daily Train\nI\nDesignative\nTM -\n- -\nPiel - -\n1 [\nNo #1. (917,\nAve al. INK\nDes, 41. IMA,\nhis n.\nles 30. NOT,\nE\n- -\nyes doint\n- posiver\nI\nwill\nJuly 1837\nvse ad TM -\nI\n. you MIY\nPatient -\n- - - -\n------\n-\n-----\n----\nRecent - entir\n-------------------------\n1200\n----\n-\nCircum debt.\n- be - by Transure United Rater\nuse\n---\nPatient - hall - -\nIMME\nNet belazone to gromal\nLISTED\n1000\nI I 1 I\nIDSP\ndate\nEMA\n----\nfind\n1,110,109,534.78\n2,339,867,707.00\nGrom delik - and\nbelave in -\nfund.\nCruse delate -\n12.80\n234.18\n120.00\n2022\n+28471\nComment of inter-\n- - AVENUE - -\ntwairing\nstanding\n2.36\n3.7M\niii\n1145\nRegraded Unclassified\n#ubject\n6\nCOMBINED STATEMENT OF ASSETS AND LiABILITIES OF GOVERNMENTAL CORPORATIONS AND CREDIT SCENCIES OF THE UNITED STATES\nCOMPLEO FROM LATEST REPORTS RECEIVED BY THE TREASURE\nJUNE M, 1517\nSUMMARY\ni\n- - -\nPrepary Internet\n- el Entail -\nTotal -\nIl\n- et\nDate\nNa -\n- -\n-\n-\n- -\nund -\nTimel\nto\n4d.\nmindin\n-\n- -\nTotal\n-\nDated tiste\nUnited\nPrinting\nOwnet in\n-\nto\n# de\npromity\n[\nI\nTime\nCode -\nforção\n-\nUnited Sale\nI - - - -\nище\n---\n18.00\n- Emill -\nN.Y.\nCIN\nas\n---\n-\n----\nForm cruss Issue\nLIABI\nCall\n-\nHEAR\n-\nCOM\n4\nPine\nand\n--\n18.00.00\ncas\nINCIME\n17,085.50\n2,000\nHOMEN Civil\n-\nLIMITED\n11,42\n0,00\n445\n- Cein Dependent\nALF\nBLAW\nSALON\nLIMIT\n7M\n-\nCARD\nand\n- - 6.\nTHE\nIMM\n10,000\nMCMP\name\n26,111\nase\nare\nI I\nsee\nUSA\n---\nNew - and Approved\nLIMITA\n!\n--\non\nB.M.\n10,9%\n---\n---\nema\n25\n/\n0,40\nser\nante\n3WM\n8,20\n----\nDALOR\n-\n-\nTwo -\n-\n01.05.20\n-\n14,000.00\n-\n---\n28.10.58\nsure\nsame\nare\n---\n-------------------------\n====\n---\n---\n- - -\n-\nAMP -\nque\nLM\n-\nuse\nnumber\n-\n-\nTATER\nLAP\n-\n-\nMILHI\nnas\nFailure Fax - - -\n-\n10,000.00\n-------------------------\nann\nFLAILYM\na\n0,05%\nsee\n01.412.00\nTHE\n3.6\n-M\nLIMITS\n----\n- - -\ncuer\n--\nLONG\n---\ne.m.\n-\nUNIT\ni I I ! i\n---\n-------------------------\n---\n-\nPeteral EN Bird - - -\nSEM\n--\n---\n---\n-\n24,40,00\n1.000,00\nPelma - - -\nTHE\nPRIMER\nINCIAL\n--\n-\n-\n- - -\n---\n-\nCHICK\n:\n---\nwe -\nE\nALIB\nRICHI\nand\n-------------------------\n4@\n-----\n-\n:\n--\n:\n--\nTrial, -\n-\n---\nmaz\nSTATE\nMEME IN\nuna\n-\n---\n- -\n---\n---\n---\n---\n-\nane\nUNDOR\n1000\n---\n1\nDETAILS\nThank utility - Gresses -\nFinanced para - - Two - benty - privers -\n-\nCommentry\nTable\nrelative\nYes -\nWithin\nforsi\nCredit\nInc.\nDates -\n- -\nIn-\nFullend -\n-\nCredit Or\nInsuel\nI\nEndical Last\nPrimi Firm\nIssits for\nBenefits\nTotal\n- -\n-\n-\nInco -\nPrive Nir\n- -\nDepartic\n-\nBunk\nI\n-\nhants\nUnite\n-\nI\n9\nI\nCountry\nAnd\nI\nToma\n- -\nuse\nAM\n-\nType\nthis\n-\n- CIP\n-\n-\n-\nCorporation\n-\n-\n-\nbanks\n-\nHERLAN\n---\n-\nM,MI\nBILAN\n- -\n0.10.19\n- -\nLEW\n- - - -\n- milk\n---\n-\n- - -\nEND\n05,00\n/ -\n-\n0.00\n--\nWALST\n-\n- - - being\nLOVE\nALEXAN\nINCIME\n-\nI I I I i\nMines - one - -\nNONE\n:\nDr. - - - -\nPOLUCIO\n----\n-\n6,348\n- -\nPLAN\n-------------------------\n----\n-----\nITEMS\n1,775\n-\nTime -\nGLRUM\n-\n!\nn.m.s:\nLTTH\nInvoice) mail -\n---\n-\n1.M\n- - - -\n-\n- -\nm.me\nlivineda\nOther\nIN.4M\nCall:\n--\n----\n- -\nLIMITS\n0.79\n1.00.79\n1,000\nse\nMARIA\n-\n11.78.00\n- - - in\nstate\n-\n--\nREM\nDATE\nMTH\n---\nwe\n---\n3a -\nI\nWL712\n-\n41,300\nAW.M:\n---\n!\n04.00\n!\n2a -\n19076\nAM\n-\nINLINE\n13.M\n- - -\nLOW\nRR\nChilizations - - -\n-\nREGIO\nMILLET\n-\n-\n1,130.00\nserse\n-\n-\nForm Montangs Corperation\nNOV\n- Corpeter\nFederal Load Flash -\n----\n- Credit Bunk -\nRELOW\n- - - . -\n-\n1.300,100\n- - - -----\n-\n:\nNew\n- -\n11.14.76\nILWATE\n- - -\n-\n- - -\n2019\nLE\n*\nAIR\nno\n-\nLIMITS\n-\nknow\nn.m.\n11,000.00\n- -\n0.00\nALM\ni\n4.1%\n-\nALAS\n4,187\nDAM\nTOTAL\n---\n- - - properto\n--\nBLUANS\nLIMITH\n76,012\nname\nME.TS\nLIMITS\n- - -\n---\n3.90\n3,876\nne\n2MI\n- - - -\n1\n76.40\nUSA\n-\n-\nNNO\n- - -\nADD\nI I | I 1 I\nuna\n8,80\n-\n--\n-\nI I\n41,79\n---\nou\nB-6AI\n145\n-\n-\nvalue\n1,00,00\n-\n-\nE\n---\n1- - - Line -\nRRM\n- -\n3,000\n---\n-\n---\nUnite - - -\n-\n4,204,600\n.\ni\nuse\nCapital - - - - 4d - e -\nI\n4 - le - - - - -\n-\n-------------------------\n-\n-\n-\n-\n- -\n2\nTHAT air -\n---\nune\nUSSLID\n0.00,00\nunan\n41,50\n----\n-\n- - -\n- - 4a -\n:\nWESS\nand\nDue\nLCAS\n10.00.00\nLNNE\n-\n---\nuna\n--\nINSUR\n- End Fraha\n-\nAst\nat.m\name\nOffice\n3,20,00\nMiller -\n118,472\n-\nne\nIN\n-\nLisa\n:-\n14,417,281\nM.V.IM\nLIMIT\nSALAT\nLise\n4,20,50\n-\n:\nE\nTHE\nCARD\nTin - -\ncase\na\n0,00\nQ.M.HI\nAND\nMARIS\nRAD\nUtile - -\nLOUIS\nNEW\n100,00\nBEVERE\nM.O.\n2,16\n10.00\n---\nTotal\n---\n--\n-\nIR.W\n-\n---\n---\nana\n---\nHOUR\nLOUR\n78,10\nare\nnm\nLine to - - - -\n-\nemail\n510\nand\nLm\nALB\nALTALES\nThe - -\n-\n-\n-\nI I I\n-\nase\nML40\n10,000.40\n101/20,00\nasso\nCAP\nCALTM\nIRAM\nMIRMI\nNA\nUnited -\n-------------------------\n-\n11,000,000\n---\n1.00,00\n-\n----\nLIMITED\nann\n- -\nISSUE\nmm\n-\nsai\n15.80\nhave has - Purplax\n- for end -\nmas\n70,201\nFILAM\nsum\n48.51\n1 I 1\n5,00.00\n-\n- - - - -\nsee\nH.C.\n----\n---\n--\n---\nCONTR\nILEM\nISCM\nLIBLE\n---\nThat - - - -\n----\n-\nCOLOR\nLEMIUM\nnew\n12,70.00\nLEAVE\n---\n-\n-\n- - - - programes Name:\n& - - -\n. de de - - If IM BY - tuni Drail\nEnded -\n- zun la is Faters) w be the Tream a to paid supia\n- - - - - - - -\n- - - - - use\n1 1 1 I 1 I ] $ I 1\nHare et na - last - in - - a PARIN win - - -\n- - Date - - e -\nI È I I I T E e. 5 il 1 I 1 I -\nà is\n- . Bing M fairmal EL Aynomi - - named - - ww\n- Down - Corporations Lane - FMS Farm Credit - ed - the\ncondition - - IMA, all - anne as die - - will 5 - inc lie - check - - a - -\n- Fereral has Intial - - en Carponation Poste - Nemat\n- - - bornd I a - &\n- - - TM NFO as Falled - Company, - - Total Authority - - - AR\n- im in MI has - M\na - - and I für - - - Insury - -\n-\nRegraded Unclassified\nCONFIDENTIAL\nAUGUST 21, 1937\n1. CALL MONEY:-\n131\nLow\nLoaned\nNone.\nCloaed.\nNone.\nLoaned\nAverage\nNone,\nMigh\nLoaned outside\nUnloaned\nCondition of Block Market at closer\nCompared with previous day's clease\nTrend of Stock barkets\nNo rates received on Saturdays.\nStock Market salest\nshares.\nL. TREASURY BONDS, PANAMAS A CONVERSIONS:\nCLOSING QUOTATIONS\nDecimals in 3201a I\nYield\nToday 1 Change I Tn call : To masur-\nI\nt date\nI Ity date\nI\n1\nI\nTreasury 3-3/8s\n40-43\n105.20\n+,2\n1,333\n2,335\nTreasury 3-3/8\"\n41-43\n106.04\n+.3\n1,603\n2,200\nTreasury 3-1/4s\n1941\n106.08\n+,5\n1,609\nTreasury 3-3/8=\n41-47\n107,02\n-,4\n2,079\n2.567\nTrensury 4-1- & Sta 43-45\n106.10\n+,2\n2.148\n2.392\nTreasury 3-1/4s\n44-46\n*106,02 bid\n-\n2,263\n2,467\nTreasury 4a\n44-54\n111.20\n+,2\n2,266\n3,125\nTreasury 2-3/40\n45-47\n102,14\n+,5\n2,415\n2.475\nTreasury 3-3/4s\n46-56\n110.10\n+.10\n2.410\n3,020\nTreasury 3s\n46-49\n*104.02 bid\n-.1\n2.484\n2.667\nTreasury 4-1/88\n46-49\n105,\n+.3\n2.489\n2,630\nTreasury 4-1/48\n47-52\n*116.\nbid\n-,6\n2.469\n2,933\nTreasury 2-3/4g\n48-51\n100.15\n+.5\n2,699\n2.708\nTreasury 3-1/8s\n49-52\n*104.10 bid\n-,4\n2,710\n2.777\nTreasury 2-10\n43-63\n98.06\n-,2\n2.673\n2.637\nTreasury 2-3/40\n51-54\n99.24\n+,9\n2.772\n2,769\nTreasury Ds\n51-65\n102.18\n+,2\n2.779\n2.818\nTreasury 2-7/03\n55-60\n100.18\n+,8\n2.834\n2.841\nTreasury 2-3/40\n56-59\n99.17\n+.5\n2,782\n2,779\nPanama S%\n1961\n113. to 117,\n2.188\nConversions of\n1946\n108. to 111.\n1,775\nConversions 3%\n1947\n109. to 111,\n1.835\n. No sale.\n5. SHOWT-TER-1 OBLIGATIONS:\nBid\n-\nOffer\n-\n-\nreasory Notest\nNotes Á . 1/27 - 3-1/4% eaturing\nSept.18, 1937\n100.13\n100.15\nnegative\nintes A - 1938 - 2-5/8%\nFeb. 1, 1928\n100.21\n101.01\n.377\nNotes o - 1932 - 11\n-\nMAY. 18, 1938\n101.17\n101.19\n.245\nNatual Il - 1938 - 2-7/81\ne\nJune 15, 1938\n102.\n102.02\n.382\nNotes Il - 1938 - 23%\ne\nSept.15, 1938\n102.02\n102.04\n.531\nNotes o - 1939 - 11%\n#\nMar. 15, 1939\n100.24\n100,26\n.996\nNotes A - 1939 - 2%\ne\nJune 15, 1939\n101.25\n101.27\n1,114\nNotes D - 1939 - 18%\n-\nSept.15, 1939\n100.12\n100.14\n1.176\nlotes B - 1989 - 18%\n.\nDoc. 15, 1939\n100.11\n100113\n1.210\nNotes A - 1840 - 18%\n.\nMar. 15, 1940\n100.24\n100,26\n11315\nNotes B - 1940 - 14%\n-\nJune 16, 1940\n100.11\n100.13\n1.364\nNotes C - 1940 - 1%\n-\nDec. 15, 1940\n100,08\n100.10\n1,412\nNotes A - 1941 - 18%\n.\nMar. 15, 1941\n100.02\n100.04\n1,472\nNotes a - 2941 - 11%\n=\nJune 15, 1941\n99.26\n99.28\n1,417\nNosas o - 1941 - us\n-\nDac, 15, 1941\n99,10\n99.18\n1.407\nNotes A - 1942 - 18%\nMar. 15, 1942\n100.10\n100.12*\n1,672\nPressury Bills: maturing\nAng. 25, 1937\n.28%\n.284\nin\nSept 1, 1937\n.30%\n.305\n\"\nSept 8, 1937\n.30%\n.305\n.\nSept 15, 1937\n.30%\n,305\n-\nSept 16, 1937 (2)\n.30%\n,305\nSept 17, 1937 (2)\n.30%\n.305\ne\nSept IA, 1937 (3)\n.30%\n.305\n\"\nSept 22, 1937\n.305\n,305\ne\nSept 89, 1937\n.30%\n.305\ne\nOct. 6, 1937\n.32%\n.325\nOct. 13, 1937\n.32%\n.325\n-\nOct. 20, 1937\n325\n.325\nB\nOct. 37, 1937\n.32%\n,325\n-\nNov. 3, 1937\n.33%\n335\n-\nNov. 10. 1937\n.33%\n.335\n.\nNov. 17. 1937\n.335\nNov. 24, 1937\n335\n\"\nDec. 1, 1937\n.35\n355\n-\nDec. 8. 1937\n.35\n355\nDec. 15, 1937\n.40%\n.406\nDec. 16, 1937 (2)\n,406\nDec. 17. 1937 (2)\n.40%\n.406\nDec. 10, 1937 (2)\n.40%\n.406\nDec. 32, 1937\n.40%\n406\nDec. 29, 1927\n.40%\n.406\nAugust 21, 1937 - S. - Accts, and Derosits.\nRegraded Unclassified\na\n132\nContinued from paper 1.\nme\nI listed\n4 Vield\nI\nTreasury Bills maturing -\nJan, 5, 1938\n.40%\n.406\nJan. 12, 1988\n.40%\n406\n-\nJane 19, 1938\n.42%\n.426\ne\nJan. 26, 1938\n.42%\n.426\n-\nFeb. 2, 1938\n,44%\n.447\n-\nFeb. 9, 1938\n.445\n.447\n.\nFeb. 16, 1938\n.44%\n,447\n.\nFeb, 23, 1938\n.47%\n.478\n.\nMaz. 2, 1938\n.475\n.479\nMar. 9, 1938\n.47%\n.\n,478\nMar. 16, 1938\n.476\n-\n.478\nMar. 23, 1938\n.47%\n.\n,478\nMar. 30, 1938\n.475\n#\n.478\nApr. 6, 1938\n.40%\n,488\n.\nApr. 13, 1938\n.48%\n.498\n-\nApr. 2), 1938\n.40%\n,488\n-\nApr. 27, 1938\n,48%\n.488\n-\nMay 4, 1938\n.50%\n,500\n.\nMay 11, 1938\n.50%\n.BOB\n-\nMay 18, 1938\n.50%\n,508\n.\n.\n4. SECURITIES GUARANTERO BY THE UNITED STATES\nCLOSING QUOTATIONS\nDecimale in 32nds I\nField\nToday I Change I To call I To natur-\nI\nI date\nI its date\nI\n-\n,\nFED.7.M. Its- 1989\n100.18 to 100.16\n1,273\nFED.F.N. 3a - 1948-47\n*103.\nbid\n+,12\n2.379\n3.637\nFED.F.M. No- 1942-47\n*101.24 bid\n+.4\n2,340\n2,542\nFED.F.M. 3/4- 1944-64\n*102,22 bid\n-,4\n2,799\n3,101\nFED.F.M. la - 1944-49\n102.18\n+,9\n2.682\n2.743\nHOLO 20 - B-1990\n101.07 to 101.11\n.691\nHOLO 1ts - F-1939\n100.13 to 100.16\n1.241\nHOLO He - 1939-49\n190.16\n+,8\n2,484\n2.701\n*100.02 b14\n*,2\n2,236\n2,340\nHOLO like - 1943-44\nHOLC 30 - 1944-52\n102.14\n+,5\n2,600\n2.807\nR.F.C. 110 (Seriss E) 12/15/22\n*100.10 bid\n.511\n1,114\nNo valor\n5. DEPORITS:-\nIn Federal Reserve Benks\nAREA 30, 1937\n150,167,000\nIn Special Depositariest n/c Balance called issues unpaid\n218,000\ns/o Treasury issues dated June 15, 1937\n500,169,000\ns/o Treasury bills\ndated 8/4-11-18, 1937\n149,970,000\nTotal Ang. 20, 19378800,440,000\nCall of\nAUG. 23, 1937\nNone,\n8. GOLD IMPORTS AND EXPORTS (NET):-\nAug. DO, 1937, (N.Y. a 5 12,793,000 Importe\n(\n5,627,000 Burnerked Suesta\n(\n231,000 Veriod\nAug. 1 to 3), 1937\n76,920,000 Set importe, prelin.\nJan. 1 to AUG. 31, 1977 .1.196.861,000 Net Imports.\n( 3 3,205,000 from Janada\n€\n2,508,000 from Ingland\nà\n(\n946,000 fros Todia\n-\n278,000 from Holland\nt\n6,637,000 TNA Ruesia\n1\n251,000 from Verioo\nAre. R1. 1937 - Accts. - Deposite.\nRegraded Unclassified\n133\ncan\ncos\nBOARD OF GOVERNORS\nOF THE\nIT 3 $500000 123 NATURE THE\nFEDERAL RESERVE SYSTEM\nWASHINGTON\nOFFICE OF THE CHAIRMAN\nAugust 23, 1937.\nMEMORANDUM:\nTO\nI\nMr. Taylor\nFROM\n-\nChairman Eccles\nAs I will not be here during the final con-\nsideration of the September financing, I told the Secre-\ntary that before I left, I would leave a memorandum for\nhim covering broadly and in a general way my views of\nthe situation as they existed at the time I left.\nI am, therefore, enclosing such a letter,\nwhich I will appreciate your bringing to the attention\nof the Secretary at the proper time.\nM.S.E.\nD.E.\nenclosure\nRegraded Unclassified\n134\nBOARD OF GOVERNORS\nor THE\nFEDERAL RESERVE system\nEmp\nWASHINGTON\n(\nAugust 21, 1937.\nOFFICE CPP CE or THE\nMy dear Mr. Secretary:\nOn the basis of present conditions, It is my belief that It would\nbe advisable in the September financing to issue Treasury notes In ex-\nchange for the maturing notes and to raise no additional cash.\nFrom the present cash position of the Treasury and budgetary pros-\npects it appears that, if no cash 1s ralsed in the September financing,\nthe working balance will decline to 8. minimum of around $550,000,000 at\nthe end of October and will amount to about $600,000,000 at the end of\nNovember. This estimate assumes purchases of $400,000,000 of gold be-\ntween the middle of August and the end of November end the issuance of\na similar amount of Treasury bills to mature around the March tax date.\nAdditional cash can be raised at the time of the December financing if\nnecessary. If purchases of gold exceed the $400,000,000 mentioned above,\nthe inactive gold account will approach $2,000,000,000. Under these\ncircumstances, it will likely be not only desirable but necessary to\nfind some other way to deal with the gold import problem.\nIn refunding the September notes it does not seem to me that the\nmarket would be receptive to an issue of bonds. Member banks are still\nliquidating Government securities, end it is understood that some of\nthem are anxious to sell the long bonds in particular on favorable mar-\nkets, since their holdings are still at E. relatively high level,\nAs to details of the new issues, notes maturing in about five years,\neither in June or September, 1942, or en issue maturing in December, 1988,\nmight be offered in exchange for the meturing notes. Or the holders of\nnaturing notes might be given the option to exchange for either of these\nissues. I do not feel that I can at this time express an opinion as to\nwhich of these alternatives would be most desirable, since that will de-\npend, of course, on market conditions at the time of the announcement.\nSincerely\nM. S, Ecoles,\nChairman.\nHonorable Henry Morgenthau, Jr.,\nSecretary of the Treasury,\nWashington, D. C.\nRegraded Unclassified-\n135\nJR\nCODAT\nParis\nDated August 24, 1937\nRec'd 1:35 p.m.\nSecretary of State,\nWashington.\n1196, August 24, 6 p.m.\nFROM COCHRAN.\nImproved sentiment which prevailed yesterday on Paris\nmarket continued today. French control gained good amount\nof sterling at 132.80 to 83 and SOME dollars at 26.63.\nForward franc more bid and discount down to 3 3/8 for three\nmonths against sterling. Rentes up well on report that\nEffective August 31 Government will remove 10 per cent\ncoupon tax from Government rentes.\nBULLITT\nDDM:KLP\nSHA\n-\n-\nRegraded Unclassified\n136\nRB\nSIECIAL GRAY AND GRAY\nLondon\nDated August 24, 1937\nREC'd 2:40 p. m.\nSecretary of State\nWashington.\nFILE N LOCHHEAD COPY,\n554, August 24, 6 p. m.\nFOR THEASURY FROM BUTTERWORTH.\nCONPIDENTIAL.\nOnE. I saw Sir Frederick Philipps today who said\nthat his plans, reported in Yo. 536, August 12, 5 P. Γ.\nremain unchanged. HE added \"How long are you going to\nkeep me in Washington? Will I bE able to get away by\nSeptember 27th?\" In reply I said that naturally I did\nnot know -- that I presumed hE himself was the best judge\nas to how long hE would have to bE there.\nI cuote the above verbatim as having a possible\nbearing in the matter of the initiative and SCOPE of\nthe forthcoming conversations.\nTwo. Philipps also said that in his opinion the\nonly important aspect of the present French situation\nwas that while they are not losing gold they are not\ngaining any substantial amount at time when they should\nbE acquiring a large quantity.\nThree. Philipps made a noncommittal reference to\nFILE COPY\nM. LOCHHEAD\nthe actions\nRegraded\n137\nRB\n-2-#554, August 24, 6 P. m. from\nLondon\nthe actions of the Federal RESERVE Banks of Atlanta and\nChicago in reducing their discount rates from 2 to 12%\nbut in VIEW of the approaching Washington conversation\nI made no attempt to press him on this or other subjects.\nHOWEVER, the concluding portion of today's FINANCIAL\nTIMES aditorial is representative of other press comment\non this question.\n\"The majority of member banks have reserves in EXCESS\nof the minimum requirements which average about 20% of\ndeposits and thus the banks are in need of extra money.\nBut SOME -- and they are almost all in the agricultural\ndistricts -- had a certain amoun! of difficulty at the\ntime of the raising of the reserve percentage in finding\nthe necessary funds so that some heavy liquidation of\ngilt-EdgEd securities ENSUED. Thus to enable them to\nlend more money to farmers on their now EXCELLENT prospects\nand to Save them from having to unload their investments\nthe Federal RESERVE Board is offering them rediscounts and\nadvances at a rate considerably nearer market realities\nthan that previously prevailing. In the short run this\nhas obvious advantages both to the banking system and\nto the\n138\nRB\n-3-#554, August 24, 6 p. m. from\nLondon\nto t E country. But in the long run from the banking\npoint of VIEW there are drawbacks. To bEgin with it\nencourages just those banks which can least afford it\nto overlend and while repayment following this year's\ncrop seems assured the past records of the agricultural\nbanks qualifies complete confidence in their general\nloan policy. Moreover, cheap money provides in itself\nEL strong incentive to grant larger advances as the keen\ncorpetition it entails cuts ternings down to a very low\nmargin. And as was pointed out in a recent article in\nthe ECONOMIST the stagnation of the bond market combined\nwith the disappearance of such non-recurrent items as bad\ndebts recovered has reduced American banking profits to\nWEll below last year's level. The danger of over lending\nis EXa gerated in the United States by the loose organiza-\ntion of the banking system which consists not of a few\npowerful joint stock banks with many branches as in this\ncountry but of a large number of small banks, a high pro-\nportion of which are private. Consequently while the\nlowering of the discount rate has immediate advantages it\nalso contains the seeds of a denger which must bE guarded\nagainst. On the other hand the advantages of cheap money\nfrom\nRegraded Unclassified\n139\nRB\n-6-#554, August 24, 6 p. m. from\nLondon\nfrom the point of view of the Government and of commerce\ngenerally are too WEll known by their Effects in this\ncountry to require comment.\"\nJOHNSON\nKLP\nHPD\n03V13030\n1891\nring\n- -\nK AMT\nFEDERAL RESERVE BANK\nOF NEW YORK\n140\nOFFICE CORRESPONDENCE\nDATE August 25, 1987.\nCONFIDENTIAL FILES\nTo\nSUBJECT: Telephone Conversation with\nD. J. Cameron\nFrom\nBank of England.\nI called Mr. Bolton today and I was connected at 10:27 1.3.\nI asked Mr. Bolton what was going on and he said there was absolutely\nno business. The London market was *still on holiday\". I asked if\nany further Bussian gold had come to London and he said that they\nhad received £1,000,000 yesterday which was earmarked for Bussian\naccount but that the last sale of gold in the market took place about\na fortnight ago. I told Mr. Bolton that Japanese gold was still\ncoming here and that we had heard that £800,000 in gold had been\nshipped direct to London. He said he had heard about it from the\ninsurance people but did not understand why they were shipping it to\nLondon, except as an experiment, as it was much more expensive,\nespecially now in view of the high rates for war risk insurance on\nshipments via the Mediterranean. (It appears more like a gesture on\nthe part of the Japanese for our. benefit). Mr. Bolton mentioned the\narrangement which they had made with the Yokohama Specie Bank (with\nwhich he said I was probably familiar as the payments go through his\naccount on our books) under which the Bank of England takes dollars\nfrom the Yokohama Specie Bank. He said there was nothing binding\non their part, but they were only doing it to give the Japanese a\ndecent price as the market is so narrow even 8. small offering has\n4 depressing affect. I referred to the press report of the Argentina\nshipment from London of 1,920,000 ounces of gold. He said that this\ngold would be shipped to Buenos Aires, but they had not as yet\nreceived definite instructions, only inquiries as to freight rates,\nRegraded Unclassified\nMISC. J.2 a 6-47\nFEDERAL RESERVE BANK\n141\nOF NEW YORK\nOFFICE CORRESPONDENCE\nDATE August 25, 1937.\nTO CONFIDENTIAL FILES\nSUBJECT: Telephone Conversation with\nFROM D. J. Cameron\nBank of England.\ninsurance, etc. He said Argentinasexports had been very good and\nthat it was only natural for them to bring any surplus gold home.\nHe said we all do that.\nI asked Mr. Bolton if he had any information on the two\nshipments of gold by Samuel Montagu & Company to the Manhattan Company\namounting to about $5,000,000, about which I inquired during our last\ntelephone conversation, as there were two similar shipments reported\nas coming forward from London totaling about $5,000,000 on the\nsteamers Volendam and Pennland. Mr. Bolton said that it is very\nlikely that these gold shipments originate in Antwerp and are shipped\nto London first, thence to New York. The Belgians are still losing\ngold steadily and he understands Montagu is very close to them. One\nof the directors of Samuel Montagu & Company 18 a relative of Governor\nFranck of the National Bank of Belgium and he thought that some\nspecial arrangement had been made. He said that Montagu had become\nmore active recently in the London gold market and that practically\nall of the business was being done by Montagu and Rothschild.\nRegraded Inclassified\n142\nRB\nCODAT\nParis\nDated August 25, 1937\nREC'd 3:13 p. m.\nSecretary of State\nWashington.\n1198, August 25, 5 p. m.\nFRO) COCHRAN.\nForward franc and French rentes continue to\nimprove. No EVIdence of operations by French control\nin today's quiet Exchange market. Official fund sold some\nrentes. Certain details of plans made in today's meeting\nof Council of Ministers for further financial decrees were\nreceived too late to influence market. Swiss National Bank\ncontinues to lose gold and gain foreign Exchange. No great\nsignificance is attached by European financial press to\nArgentine decision to withdraw important part of gold\nholdings from Bank of England.\nFINANCIAL NEWS London says six hundred seventy-nine\nmillion pounds starling of gold received in Great Britain\nsecond half of last WEEK from China \"doubtless represents\nmetal collected SUA internally or purchased from the United\nStates\nSoal)\nRegraded Unclassified\n143\nRB\n-2-#1198, August 25, 5 p. m. from\nParis\nStates against silver which the Chinese authorities are\nconverting into sterling assets to form part of the new\nreserve of fortign currency for the note issue\". This\narticle adds that some Eight hundred and SEVEN million\npounds \"of gold also arrived from Germany presumably\nRussian gold sent to London via Berlin in accordance\nwith the Russian Government's recent practice\".\nBULLITT\nJLS\nKLP\nDECEIVED\nYESI as DUA\nYRUSADNT\nan to\n- - at without -\nRegraded Unclassified\n144\nAugust 26, 1937.\n12:32 p.m. - Thursday.\nFrom Hawaii\n0:\nGo ahead.\nTaylor:\nHello\nH.M.Jr:\nHello Wayne.\nT:\nHello Henry.\nH.M.Jr:\nGood morning.\nT:\nGood morning to you.\nH.M.Jr:\nHow do things look back home?\nT:\nAh - couldn't look much worse.\nH.M.Jr:\nOh - really?\nT:\nYes.\nH.M.Jr:\nWhat's the matter?\nT:\nWell you got the news I suppose about British\nAmbassador being shot.\nH.M.Jr:\nNo.\nT:\nBritish Ambassador to China was shot. He.....\nH.M.Jr:\nBritish who?\nT:\nBritish Ambassador to China was shot by a J apanese\nairplane.\nH.M.Jr:\nNo.\nT:\nAh - that - there has been an apology which doesn't\nexplain too much.\nH.M.Jr:\nI mean how was he - in the street?\nTE\nNo he was motoring to Shanghai from Nanking\nH.M.Jr:\nYes.\nRegraded Unclassified\n145\n- 2 -\nT:\n....and a Jap plane comes along and - ah - machine\nguns the road and then drops a bomb on him.\nH.M.Jr:\nOh for heaven's sakes.\nT:\nAnd that had - I mean had quite an effect on all the\nmarkets.\nH.M.Jr:\nAh-ha\nT:\nAh - stocks - everybody is talk - I mean the market\nis very nervous anyhow\nH.M.Jr:\nYes.\nT:\nand your industrial stocks are off - ah - oh\nthree and three quarters points\nH.M.Jr:\nYes.\nT:\neverything else is off. Bonds acted very\nbadly.\nH.M.Jr:\nThey have.\nT:\nYes.\nH.M.Jr:\nHow about our 5-year old bills?\nT:\nAh (Has conversation aside) Three to five - par\nthree to five.\nH.M.Jr:\nWell they're not off so much.\nT:\nNo - ah - notes have acted comparatively well but\nthey're off\nH.M.Jr:\nWayne what are they nervous about? I mean - ah -\nwhat - what could happen as far as we're concerned?\nT:\nAh - I don't think anything but that - ah - the\nmarkets are just nervous.\nH.M.Jr:\nI see. The President is at Hyde Park, isn't he?\nRegraded\nto I I\n146\nT:\nNo he's - he's going there tonight, I believe.\nH.M.Jr:\nOh, I see. The radio said he was going up there\nThursday. Is he going to be away for a while?\nT:\nYes.\nH.M.Jr:\nFor how long - do you know?\nT:\nUntil the 15th.\nH.M.Jr:\nThe 15th?\nT:\nYes.\nH.M.Jr:\nOf September?\nT:\nYes.\nH.M.Jr:\nWell is he going to stay at Hyde Park?\nT:\nI understand so.\nH.M.Jr:\nWhat?\nT:\nI understand SO.\nH.\".Jr:\nI see. Well - ah - you might, in addition to the\ninformation you've been sending me, send me the\nquotations every day on - on four bonds - the\ngovernment bonds - whichever are the most signifi-\ncant.\nT:\nYes.\nH.M.Jr:\nPick out four bonds\nT:\nRight.\nH.M.Jr:\nand send it to me. Because it's been helpful\nfor me to have that, you see?\nT:\nAh - Burgess is back\nH.M.Jr:\nYes.\nT:\nand - ah - he's - ah - - I'm glad he is.\nH.M.Jr:\nYes.\nRegraded\n14\n- 4 -\nT:\nBut it's - ah - he thinks that this is just one of\nthose things that happen\nH.M.Jr:\nAh-ha.\nT:\n....and he's glad that it's happening this week instead\nof next week.\nH.M.Jr:\nI see.\nT:\nAh - they have got some bids in the market.\nH.M.Jr:\nAh-ha.\nT:\nNot very heavy because there isn't much volume but\nit got to be a little bit panicky here this morning.\nH.M.Jr:\nWell how does he feel about our financing?\nT:\nWell he - ah - doesn't think we 're going to have any\ntrouble. I mean as long as we - ah - get the right\nmaturity and so on.\nH.M.Jr:\nI tell you what you do - ask him to send me a little -\nwhat - what he thinks we can do and have it coded and\nsend it to me, will you?\nT:\nYes I will.\nH.M.Jr:\nTo-day.\nT:\nYes.\nH.M.Jr:\nPlease.\nT:\nRight.\nH.M.Jr:\nHave him write out a little statement of how it looks\nto him and what he thinks we could do as the thing\nlooks today and have the thing put in code and send\nit over to me.\nT:\nYes. Now there's one other thing.\nH.M.Jr:\nYes. I mean just what his opinion is.\nRegraded\nUnclassified\n- 5 -\n148\nT:\nThat's right. Now to get to another subject.\nH.M.Jr:\nGo ahead.\nT:\nOn this Far Eastern situation.\nH.M.Jr:\nOn the which?\nT:\nOn the Far Eastern situation.\nH.M.Jr:\nYes.\nT:\nThere was a special message that came to you last\nnight - ah - through Buck\nH.M.Jr:\nYes.\nT:\nwhich went to the other interested Department\nH.M.Jr:\nYes.\nT:\nand do you want me to - ah - let Buck know that\nyou are not in this country?\nH.M.Jr:\nYes, why not?\nT:\nI think it's - I think it's advisable to do it\nbecause it was rather an urgent appeal, you see?\nH.M.Jr:\nAh-ha.\nT:\nNothing that you could do anything about.\nH.M.Jr:\nAh-ha. But supposing you send the message over to\nme anyway.\nT:\nYes I'll do that.\nH.M.Jr:\nBut don't tell him that but simply I would tell him\nthat ¹¹m not in the country\nT:\nYes.\nH.M.Jr:\n.....until Saturday a week.\n149\n- 6 -\nT:\nAnd that the message was delivered to where it\nought to go.\nH.M.Jr:\nWell whatever you think.\nT:\nYes.\nH.M.Jr:\nWhat?\nT:\nYes. He's already been told that the message has\nbeen received.\nH.M.Jr:\nWell there isn't much use of sending it to me, is there?\nT:\nI don't think SO.\nH.M.Jr:\nWhat?\nT:\nI don't think so.\nH.M.Jr:\nNo. There's nothing I can do, is there?\nT:\nNot a damn thing.\nH.M.Jr:\nWell then I would advise him I'm not here.\nT:\nYes.\nH.M.Jr:\n(Laughs) I'm here - not there. (Laughs)\nT:\nThat's right.\nH.M.Jr:\nYes, I would. Ah - an appeal for help?\nT:\nAh - yes.\nH.M.Jr:\nAh-ha. Well there's nothing we can do, is there?\nT:\nNothing.\nH.M.Jr:\nFine. What else?\nT:\nThat's about all.\nH.M.Jr:\nWhen did Magill get away?\n150\n- 7 -\nT:\nWhy he got away - ah - ah - last Friday night.\nH.M.Jr:\nWhat - this last Friday?\nT:\nWhat?\nH.M.Jr:\nHe just got away last Friday.\nT:\nYes.\nH.M.Jr:\nAh-ha. Well he'll get two weeks in anyway.\nT:\nYes, he'll - he's planning on coming back after\nLabor Day so he'll get two full weeks there.\nH.M.Jr:\nHe gets a full two weeks, doesn't he?\nT:\nYes.\nH.M.Jr:\nWell that's good. Now what else cheerful have you got?\nT:\nAh (laughs) it's stopped raining. It's been raining\nfor five days and it just stopped. (Laughs)\nH.M.Jr:\nReally?\nT:\nYes.\nH.M.Jr:\nAll up and down the coast?\nT:\nAh - pretty much.\nH.M.Jr:\nAh-ha.\nT:\nAh - there's a slight premium on gold in London.\nH.M.Jr:\nWhat was that?\nT:\nThere is a slight premium on gold in London.\nH.M.Jr:\nHave we lost any?\nT:\nNothing.\nH.M.Jr:\nAh-ha. What - what is our sterilization fund - a\nmillion what\n151\n- 8 -\nT:\nA million three - a million three naught nine.\nH.M.Jr:\nAh-ha. Now the only suggestion I have is -\nin the New York Times on August 16th, which just\narrived, they had an article by John Crieder -\nC-r-i-e-d-e-r on the front page\nT:\nYes.\nH.M.Jr:\nentitled, \"Roosevelt Insists on Budget Balance\".\nI don't know how they got that story. It quotes a\nlot of stuff from the Treasury, see?\nT:\nYes.\nH.M.Jr:\nIt's good. I wondered if you and Bell couldn't work\nup something else like that\nT:\nAh.\nH.M.Jr:\non this spending showing the decrease in the\nspending under the Relief Agencies.\nT:\nAh - we'll do what we can.\nH.M.Jr:\nBut take a look at that article.\nT:\nYes, we - ah - I suspect that we had nothing to do\nwith that one.\nH.M.Jr:\nWell take a look at it. I don't know who put it in\nthe paper but it was good.\nT:\nYes.\nH.M.Jr:\nBut reduced costs of the Relief Agencies, see?\nT:\nYes.\nH.M.Jr:\nAnd - ah - what else? Is that all?\nT:\nAh - that's about all we have.\nH.M.Jr:\nAll right, gad you're about as cheerful as a\nmourner at a\n152\n- 9 -\nT:\n(Hearty laughter) Maybe it's the five days' rain.\nH.M.Jr:\nAll right. Now is Bell there?\nT:\nHe is - right here.\nH.M.Jr:\nRight.\nBell:\nHello\nH.M.Jr:\nHello Dan.\nB:\nGood morning.\nH.M.Jr:\nHow are you?\nB:\nPretty good. How are you?\nH.M.Jr:\nIs Hopkins' living up to his bargain on his spending\nsince the first of July?\nB:\nWell he's living pretty well within his own figures\nas to employment and down to about the mark that he\nagreed upon. Now something's been done in the last\nweek for these - ah - marchers in town and I haven't\nbeen able to get the low-down on it but I understand\nthat Hopkins and the President agreed that there'd\nbe no more lay-offs.\nE.M.Jr:\nThat's what it had on the radio.\nB:\nYes at the present time. Well apparently they called\nthe leader or something; I don't know just what it\nwas and\nH.M.Jr:\nThe radio said that they promised this fellow Lassiter\nB:\nYes.\nH.M.Jr:\nNo more lay-offs.\nB:\nThat's right.\nH.M.Jr:\nYes.\n- 10 -\n153\nBt\nWell I understood that there was a letter delivered\nto him by the President.\nH.M.Jr:\nAh-ha.\nB:\nHe'd been trying to see the President for two weeks\nand he wouldn't see him and then I think he held\nout so long that they had to give him something.\nH.M.Jr:\nWell how about - ah - is - is it much over 100\nmillion a month?\nB:\nWell expenditures for WPA up to the 24th\nH.M.Jr:\nYes.\nB:\nof August\nH.M.Jr:\nYes.\nB:\njust for the month 86 million.\nB.M.Jr:\n86.\nB:\nYes, and then 32 - that's 32 million less than the\nsame period last year and total for the year is\n213 million as compared with 280 or 67 million less\nthan fiscal year. 137.\nH.M.Jr:\nWell are you still spending last year's money or\nwill that all come out of the billion and a half?\nB:\nWell it's all made a part of the billion and a\nhalf now, you see? It was all thrown together.\nH.M.Jr:\nI see.\nB:\nAh - of course, there will be a liquidation in a\nlot of those old obligations incurred in 1937 -\nthis year\nH.M.Jr:\nYes.\nB:\nbut - ah - there will be possibly about a\nhundred - about a billion 650 million dollars un-\nobligated balances including the billion and a half\navailable for expenditure in 1938.\n154\n- 11 -\nH.M.Jr:\nWell I don't think the story's got across the papers\nat see? all the big reductions in emergency expenditure,\nB:\nAh-ha.\nH.M.Jr:\nAnd if you and Wayne Taylor could work out something\nto get that over I think it would be helpful at this\ntime, don't you?\nB:\nAll right, we'll look at it. Well - ah\nH.M.Jr:\nWhat's my working balance to-day?\nB:\n792 - ah - million.\nH.M.Jr:\nHow much.\nB:\n792 million Tuesday night.\nH.M.Jr:\nYes.\nB:\nAnd that will go up - ah - tonight - that will go\nup from yesterday evening about 40 million.\nH.M.Jr:\nAh-ha.\nB:\nAh - the statements I sent you indicate that we might\nhave as much as 804 million going out of August but\nI think that will increase to about 815 or 20 because\nwe estimated they'd give 55 million to unemployment\ntrusts and I believe it's going to 70.\nH.M.Jr:\nReally?\nB:\nAh-ha. On this budget thing, I don't know that I'd\ntalk much about it.\nH.M.Jr:\nYou don't?\nB:\nI'll tell you - the picture is going to look pretty\nbad when the summation comes out. I'm terribly dis-\nappointed about it.\nH.M.Jr:\nWhen is the summation coming out?\n155\n- 12 -\nB:\nWell certainly not till after financing. (Laughs)\nR. M.Jr:\nAll right.\nB:\n(Still laughing) That would be physically impossible.\nH.M.Jr:\nI wouldn't say anything.\nB:\nNo I - I tell you - they added a lot of things in\nthe Congress and I'm afraid we're not going to get\nmuch below that 418 million deficit that we showed\nin April.\nH.M.Jr:\nYou mean for the whole year?\nB:\nYep.\nH.M.Jr:\nOh my heavens that's terrible.\nB:\nWell I thought we could probably wipe that out but\nI'm afraid that there's been enough added - see we\nhad Credit. a 30 million dollar credit in from Commodity\nH.M.Jr:\nYes.\nB:\nI'm now told that that's going to be a black figure\nof 230 - 200 million which makes it a loss in the\nbudget of 230 million.\nH.M.Jr:\nWell why?\nB:\nLoans to cotton. Those things hurt.\nH.M.Jr:\nYes.\nB:\n200 million over and above what we - ah - figured\non in April.\nE.M.Jr:\nWell the President agreed to that, didn't he?\nB:\nOh yes, it's agreed to - there isn't any question\nabout it.\nH.M.Jr:\nWhat's that?\n156\n13 I I\nB:\nYes he agreed to it, I'm sure.\nE.M.Jr:\nWell - it is pretty tough.\nB:\nYes but he told me yesterday - I told him that\nthat I thought it was going to be a bad picture\nin '38 and I didn't think that he could tell the\nAmerican people in 1939 that there wasn't going\nto be a balanced budget\nH.M.Jr:\nYes.\nB:\neven if he had to say we were going to ask\nfor new taxes.\nH.M.Jr:\nYes.\nB:\nWell he agreed and he said I'm going to get you a\nbalanced budget (laughs) in 1939.\nH.M.Jr:\nHe's going to do what?\nB:\nGet me a balanced budget in 1939.\nH.M.Jr:\nI still don't hear it.\nB:\nI say he told me that he was going to get me a\nbalanced budget in 1939\nH.M.Jr:\nYes.\nB:\nincluding - ah - 600 million of debt retirement.\nWell I said, \"We'll be satisfied with that\".\nH.M.Jr:\nYes. Well I'm terribly disappointed over this.\nB:\nWell I am too. Maybe it won't look as bad when I\nget into it but I'm afraid it's a pretty bad picture.\nH.M.Jr:\nYes. How does the Bresident seem?\nB:\nSeems in very good spirits.\nH.M.Jr:\nYes.\nB:\nYes. Going away tonight to Hyde Park and\n- 14 -\n157\nH.M.Jr:\nWhat's that?\nB:\nHe's going away tonight to Hyde Park\nH.M.Jr:\nAh-ha.\nB:\n.....and be back here probably the 15th and 16th\nfor the antietam celebration and the constitutional\nH.M.Jr:\nI see.\nB:\ncelebration and then - ah - I think he's going\naway; no one knows where.\nH.M.Jr:\nAfter the 15th?\nB:\nYes. Told me that he'd be away for about a month.\nH.M.Jr:\nReally?\nB:\nYes up to about October 15th.\nH.M.Jr:\nOctober 15th.\nB:\nYes.\nH.M.Jr:\nAh-ha.\nB:\nSaid that would be a good time for me to take a\nvacation. (Laughs)\nH.M.Jr:\nGood.\nGood. He's going away for a month, eh?\nB:\nYep.\nH.M.Jr:\nAh-ha.\nB:\nBut he didn't say where.\nH.M.Jr:\nAh-ha. On the 16th. I see.\nB:\nYes.\nH.M.Jr:\nAll right. Do you want to say anything?\n158\n- 15 -\nB:\nI haven't got a thing other than that.\nH.M.Jr:\nDoes Archie want to say anything?\nB:\nArchie isn't here - ah - he's - ah - (Aside to Taylor:\nWhere is he?) He's in Baltimore. Deitrich's here.\n(To Deitrich: Got anything?) Deitrich says he hasn't\nanything other than what Wayne told you.\nH.M.Jr:\nWell if you people want to get any mail to me when I\nland send it to Captain Parker of the Coast Guard at\nSan Francisco.\nB:\nCaptain - ah -\nH.M.Jr:\nParker.\nB:\n(Aside to Taylor: Do you know that?)\nH.M.Jr:\nCaptain Parker - Coast Guard - San Francisco.\nB:\nAll right.\nH.M.Jr:\nI don't know whether I'll call you again but I may\nbefore I go - I'm leaving Saturday you know.\nB:\nAh - Wayne wants to know what day you expect to be\nin Washington.\nH.M.Jr:\nNext week ?\nB:\nYes.\nH.M.Jr:\nI expect to be there Saturday and Sunday.\nB:\nAh - you won't get here before what - Saturday\nmorning late?\nH.M.Jr:\nI'll either get there late Friday night or very\nearly Saturday morning.\nB:\nI see.\nH.M.Jr:\nWhy?\nWhat's Wayne got on his mind?\nRegraded\nUnclassified\n159\n- 16 -\nB:\nWell he wanted to know if you wanted to see the\nOpen Market Committee and, if so, when?\nH.M.Jr:\nOh I don't - do we want to see them?\nB:\nI don't believe so - ah ( Aside to Taylor: I don't\nbelieve it's necessary, do you?) Three of the members\nare here.\nH.M.Jr:\nWell if I see them I'd see them Saturday.\nB:\nWell - ah - three of the members are here and - ah\nHarrison says he'll come down Saturday if you want\nhim.\nH.M.Jr:\nGeorge Harrison?\nB:\nYes.\nH.M.Jr:\nAnd - and Burgess?\nB:\nWell Burgess - ah - questioned whether you wanted\nhim to stay in New York - he could come down Saturday\nafternoon after the market closed.\nH.M.Jr:\nWell I - I certainly would want to see him after the\nmarket closes.\nB:\nWait a minute.\nH.M.Jr:\nI'll be in the office about 11 o'clock Saturday.\nB:\nOh - ah - Harris tells me the market will be closed\nSaturday.\nH.M.Jr:\nOh.\nB:\nChances are it will be.\nH.M.Jr:\nWell then have - ah....\nB:\nSo Burgess could come down here Saturday.\nH.M.Jr:\nI'd have the boys get together - who ever's here, yes.\nB:\n11 o'clock Saturday,\nH.M.Jr:\nYes.\nRegraded Unclassified\n160\n- 17 -\nB:\n(Aside to Taylor: You - ah - anybody from the West?)\nAll right we'll - we'll call Eccles and leave it to\nhim.\nH.M.Jr:\nIs Eccles in town?\nB:\nWell it will be Ransom, Wayne tells me.\nH.M.Jr:\nI thought Eccles was away.\nB:\nYes he is.\nH.M.Jr:\nAh-ha.\nB:\nWell we'll have some of the group here then at\n11 o'clock Saturday morning.\nH.M.Jr:\nAll right.\nB:\nGoodbye.\nH.M.Jr:\nAll right, thank you.\nB:\nGoodbye.\nH.M.Jr:\nGoodbye.\nRegraded Unclassified\n161\nRB\nCODAT\nParis\nDated August 26, 1937\nREC'd 4:51 p. m.\nSecretary of State\nwashington.\n1203, August 26, 4 P. P1,\nFROM COCHRAN.\nTrading still very light on Paris Exchange. Forward\nfranc continues to bE wanted and rentes better. Bank of\nFrance statement as of August 19 showed no new advances\nto Government but Treasury account down to 72,000,000\nfrancs; with circulation lower coverage was 53.14 VErSUS\n52.78. Market found nothing particularly disturbing in\nnew series of decrees mentioned below but inclined to con-\nsider them artificial rather than productive.\nUnder the special authority accorded the Government\nby the law of June 30, 1937 a further series of financial\ndecrees was promulgated in today's Journal Official providing\nchiefly for the following:\nOne. An immediate inquiry into production Embracing\n13 branches of industry. The Inquiry Committee will\ninclude in addition to officials of Government departments,\nrepresentatives of Employers and of labor. Its task will\nbE to propose such measures as may bE necessary to improve\nproduction\nRegraded Unclassified\n162\nRB\n-2-1203, August 26, 4 P. m. from\nParis\nproduction and in a general manner the situation of\nagriculture, industry, and COMMERCE.\nTwo. Improvement of commerical and industrial\nEquipment of commercial and industrial equipment for\nthe racid increase of production through Government aid.\nThis includes technical assistance from the Credit National\nby i.:Eana of the allotment proferably to smaller trade and\nindustry of interest rebates for 3. period of four years\nat most and to a maximum annuel amount of 35,000,000\nfrancs not to EXCEED 4 percent nor bE more than 50 per-\ncent of t.s interest actually paid on the mortgage. The\nrebates will bE turned over to a special account opened\nwith the Credit National in the name of the firm concerned\nand which can only bE debited for the payment of the interest\ndue,\nThree. Promotion of the building industry through\nlower money rates, interest rebates as above with assistance\nof Orsdit Foncier to B. maximum of 40,000,000 francs and\ncertain tax Exemptions;\nFour. Easier formalities for mobilization of Government\nsecurities to permit quicker obtaining of advances from the\nBank of Trance on registered state securities. Other\ndecrees\n163\nRB\n-3-1203, August 26, 4 p. m. from\nParis\ndecrees relate to various branches of state credit price\ncontrol, reenforcement of supervision over insurance and\ninvestment companies, pensions, price of wheat. The decree\nrelating to the suppression of the ten percent levy on rente:\ncoupons though approved is held over perhaps to include\nother securities such as those of the Credit National and\nrailways.\nBULLITT\nSMS\nNPL\naded Unclassified\n164\nEDA\nCODAT\nPARIS\nDated August 27, 1937\nRECEIVED 5:50 p.m.\nSecretary of State\nWashington\n1209, August 27, 6 p.m.\nFrench control yielding sterling throughout the day\nat 132.95 to 92, Forward rate also tended to weaken and\nintervention was apparently Effected at London to hold\nthree months sterling at three and five Eighths. On the\nfear that latest developments increase likelihood of\nBritish intervention in Far East sterling W&S today\noffered against all leading currencies EXCEPT the French\nfranc. French rentes lower and international shares\nfollowed downward trend of London and NEW York.\nAnother series of French financial decrees appeared\ntoday. While it is too early for these and the ones I\nreported yesterday to bE analyzed and understood by the\nmarket the impression grew today (and caused the weakness\nin the franc) that these measures are in opposition to the\nEconomy decrees recently issued indicate the lack of faith\nof the Government in achieving cheap money rates by repa-\ntriation of capital and other normal means and at same\ntime\n165\nEDA - 2 - #1209, August 27, 6 p.m. from Paris\ntime (particularly through the lifting of the ten percent\nlevy on rente coupons) increase the improbability of any\nEffective measure toward reducing carrying charge of Govern-\nment debt. Building costs have gone up so steeply in\nFrance during past year that Encouragement to construction\nprovided in these decrees is held insufficient,\nl'uch space given in financial press to lowering of\nbank rate in New York. Comment in city notes of today's\nLONDON TIMES was as follows: \"Thus NEW York continues to\nhold the distinction of being the cheapest monetary center.\nThe reason for reducing abnormally low bank rates to still\nlower levels may not be very clear Especially at a time when\nborrowing is increasing but the measure has a political\nrather than an Economic significance. Demand for money\nin the United States has been growing for some time past\nwith the progress of trade recovery and the banks - which\nare the principal holders of Government securities - have\nrealized some portion of their holdings in order to provide\nthe necessary means to finance trade. By reducing the\nreserve banks' rediscount rates it is hoped to induce the\nbanks to discount their bills and advances more freely and\nto avoid the selling of Government stock. Enormous imports\nof gold into America have caused the Government to adopt\na sterilization\n166\nEDA - 3 - #1209, August 27, 6 p.m. from Paris\na sterilization process with a ViEW to preventing too great\nan Expansion in the supply of credit. As long as the\nGovernment sterilizes gold imports it may bE difficult\nto justify a rise in money rates but a reduction of\nExceptionally low rates seems hard to account for on\nbusiness grounds\".\nPosition of Governor Franck becoming more uncomforta-\nble as campaign grows for investigation of and sharp sanc*.\ntions against alleged action of Governor and Directors of\nNational Bank of Belgium in splitting among themselves the\nsalary of Van Zeeland after latter gave up under governor-\nship to Enter Cabinet.\nBULLITT\nSMS:MPL\n167\nLondon, August 30, 1937.\nMy dear Mr. Secretary:\nI have reported Sir Frederick Phillips' plans in\nmy No. 536, August 12, 5 p.m. and No. 554, August 12,\n6 p.m., confirming the fact that he will arrive in\nWashington on the week-end before September 20th,\nthe date of his first meeting with you.\nI plan to sail on the \"Normandie\" on September\n5th, and I will arrive in Washington September 14th.\nI enclose two articles and an editorial which\nrecently appeared in \"The Times\" on the French situa-\ntion; you may be interested in glancing through\nthese inasmuch as the writer's attitude and predi-\nlections are not dissimilar to Phillips'.\nI do hope you have had a most restful and en-\njoyable vacation.\nWith kindest regards,\nRespectfully yours,\nWhalter Jultanent\nThe Honorable\nHenry Morgenthau, Jr.,\nSecretary of Treasury,\nWashington.\nEXPERT\nTHE TIMES\nNUMBER:\nCITY\nLONDON\nDATE:\nAUG 231937\nYOKING THE BANK\n11\nA. strong provide at the houd of IM Bank of\nTranse might have prevented soon of (3)) en\nA REVIVAL IN\nscrious made by MI Virsent Aund\nNon in nationalazing the Bank lis Comment\ntook good CITY la and . man who bad a\nFRANCE\nexperimente of WORK - kryat and derviced\nservices of (M Administrations, and could be\nrelied upon Bill em ont there orders to the beil\nof his ability 0 is difficult to checus the\nConvernment low uning that paid Governments\n1.-LEGACY OF\nhad sufferent immiterable humiliations at the\nfunds of la Bank of France, and many people,\nthem. agreed that . change was\nM. CHAUTEMPS\nnecessary and demable, Nince the publication\nPARTY MI 1937 of the diary of M. Moresu,\nGovernor of the Bank a 1926-28, even umag\nCommercives admined this lbs wings of the\nBank four to be clipped M. Merro besied\nMISTAKES IN FINANCE\nof the mander in which he finced M. Herriot\nfrom office in 1926 The firm attitude of the\nBank, he mule, comtributed largth towands the\nFrom Our Paris Currespondent\ndismissial of the Government His hiller and\nThe expérience Blan collapsed three months\nconsent hostility la M. Herrini and his attempts\nInviore the Best Front Populaire Government\nto rid the country of the disastrous Cand\ndes Gasehes in which be wws ably secueded by\nwere furced from office by the refusal\nPresident Deumergue) far excended the bounds\nof the Senale us graci them full puwer\nal the permasible in A democratic state 50\nto deal with the financial crisin. It was\nwhile M. Blum nationalized the Bank and por a\ndring in Docember when the Chamber\ndevised follower in cueirol il was left to one\ndisclined ⑉ accept the estimases el M. Vincent\nof his Interest opporimis to provide the junib-\ngation In il\nAuriol, the Jonah of French Socialism, of the\nThis step opened the coffers el the Hank to\nprohable size of the 1937 It finally\nthe Treasury in the past many Governments\nexpired la March, 1937, when the Government\nSad been driven from office by the refusal of\nwers forcal to delegate their financial authority\nthe Bank to pari them lampurary advances, or\nIM a committee of four expert-twor of whom\nto short sbort-term Treasury Bonds or Ban\nwere among the most desdly critics et Socialisi\nwhich were drug ae the market Bor under the\nfinance-wiib a mandair in operate the EX-\nnew rigime an wich difficulting existed: thart\nchange Equalization Fund\nterm Tunis were mon oth available the\nWhy was the Blum Government able to\nOpposition could el no support from the\nsurvive into the seventh age of second child-\nGivernor (M the Regente la them in NMS\nand oblivion Nor many Covernmento\nan attack upon the Administration lun the day em\nin the history of the Third Republic have sur\nwhich the Bank returnd M eximal the Treasury\ncuested in staying in office after being overtaken\nin short the Opposition pould WL\nby service decay. Why did pert the Opposition\nas in the just, launch an informative ander the\nvalid exper and dismas them from office 7\nburnets of the Bank of Frame\nwhy were they allowed to carry on until The\nBut je spire of the disappearance of IM name)\ntrans had lost another 25 per cent. of its value Y\nBasocial lu (he policy of the Gevern\nSoundent and Communisi supporters of the\nmont of the day M. Blue reached the end of\nPront Populaire are now 11ying to convince the\nhis when in March. No further funds were\nelectorate that the Bluen Government could have\navailable and II was only the issue of . National\nconsinued in office los the full electoral period,\nDelense Lown rensiling 6,000,000,000 frances\nand that is tell only because It was stabbed to the\n(reatly £80,000,000 at the tate of exchange then\nback by powerful Anaocial Nothing\nruling) that made if multe for him to way in\ncould be farther Trum the thuth\naffer. \" tank rhree must (e extrad these new\nfoods and by the esid of June , political crisit\nA. BOURGEOIS RALLY\nwill inevirable There H logething dramincally\nFew French Governments have encountered\nstow / Socialist Minister of\nso little destructive criticiaro (rem the responsible\nFinance who had spent his life in publiping\nOpposition as ber the of M. Blian\nigeculature requing - Government loan designal\n⑉ make special appeal in the gambling insting\nAnd. though the dangers of Vincint April\nThe extrange guarance carried by the National\nfinance were clearly appervid to them (be\nDefence Unit wherely the widd fluctuates, with\nvarimus opposed to the Government and\nthe frame (all on London sed Name York has\nnet until be bed brought France, which\ngiven the Boorse . specifitive smitted allow\nis and the weilthies country od the Continues\nem ha compared outr 10 those\nof face to face with the specifica of A\naftered by the law Ivar Krouger 10 (fie gointen\nplanned essimome, foreign eachange puntrol, and\ndays of Sweath\nYes the colliage of the Blue Convernment was\nan authorizario economic system. The advere\nnot due En the fuldnce of financial milling\nvote IN the Senale was not a etab in the buik.\nnot in the speet of their soinal Their\nDGF . raily by bourgenis France in defence of\nAnimal policy defend only in list\nJoeral capitalism.\nThe eactier auitude of the political and\ncrities of the Government's policy eu\nent impired by altroidic mouves. There were\nas lessi good resides why they failed (i)\ncarry their eitima in BY logical conclusion\nIn de liest place the sarimalication of the Bank\nof Prance had robbeil the French of\nBe ratiying point: secondly, the foreign polity\nof M. Blum and M: Dellies was generally\napproved and there was no doute la Interfere\nwith the work they were doing. thirdly, there\n- a widespread feeling their many of the secial\nreforms enacted by the Frast Populaire Govern\nmed were useful and loog fourthly.\nmajority of the eleciorais had suffered ml\nhavily under the policy of M. Lavel\nthat a period of reflaxion. even of inflation. WAX\npublically essectial, DD matter what were the\npolitions observen (bereinre realized that II\npossible objections III H. Azwie\nworld le extrancly dangerent to disladge the\nBlum Government before The electorate as\n. while became convinced für the Visiums\ndurril policy would end to deam and that\nshere - 60 alternative M alimine the expire\nenve by college under in own with What is\n15 that M. Bum, with this brillin\ngifts, allowed to have the\nof Bis Government. \" PM be -\npastent only our the that he has adli -\nconsumpt of the AN de for\nand Connerial And that be\nthat the problem is und for departmental\nwasers rather that for the Prime Minium\nRegraded Unclassified\nPAPER:\nTHE TIMES\nNUMBER:\nCITY\nLONDON\nDATE: AUG 1937\nThe nature at the financial problem tas Dear\nanalysed by M. Bonnel When the 100k over\nthe Ministry of Finance be found Insury\n11\npractically empty: in liarrowing provery were\nexhausted; yet. it faced with the liability\nof having to find about 35,000,0,000,000 before\nA REVIVAL IN\nthe end of the year IN excess of normal\nhodgetary receipts His Drst slep was to in-\ncrease taxation. As a result lie lurges to reduce\nFRANCE\nthe estimated deficit ne the ordinary 1937\nBudget fram about 6,000,000,000L. lo about\n4,500,000,000 Expenditure on public works\nand advances to local authorities which in win\nhave leen forced to increase their taxes) are\nauf by That reduces The\nII.-M. BONNET'S\n1937 demands 4915 the Treasury to about\n29,000,000,000L. In this faller sum is included\n4,400,000,000[, ou account of the British loan\nECONOMIES\nto the French Railways, which has already\nbeen covered by A transfer of extrational gold\nto London. and un account of\nTreasury Bond maturities which the Gevern\nment are now reying to convers. 11 that open-\nWEAKNESS OF HEART\nnon - successful. and the indications are That\nit will he, the net obligations of the Treasury\nFrom Our Paris Correspondent\nin 1937 will by about 19.000.000,000/. Twith-\nout allowing for any increased budgetwer\nIn justice to M. Blum and M. Vincent Auriol,\nreceiply on account w/ a. prissible improvement\nhis Minister of Finance, il must be emphasized\nin trade), Against them 19,000,000,000E, the\nthat they look office in exiraordinarily difficult\nGovernment have abtained a fresh ailvance\ncircumstances. The General Election in 1936\nfrom the Bank of France totalling\nresulted in the defeat of all (he parties support-\nThere is, therefore, fin reason\ning the Laval coonomies. The From Populaire\nto four that the Treasury will have any great\ndifficully in meeting in obligations this year.\nmarched to Victory on the promise that they\nwould end deflation, und that they would put\nCUTS FOR 1938\nin hand a vast scheme of public works in combut\nM. Honnel quality realized that the (918) pro-\nunemployment\nthem was going la he even more troublesoms\nThat meant in effect that the first Front\nHe (herefore decided (o cur loan expenditure\nPopulaire Government were piedged to\non account of rearmament and public works\nunbalance the Budget. Other countries whose\nby to increase national taxation\nnational finances were generally considered to\nbe sound had done the same thing; so why\nby to faire railway fares and\nnot France? The difference was that France\nfreight pates by A total of\nhad enjoyed unbulanced Budgets ever since 1931.\nto reduce the State grant to Paris by\nR that the basis of the new financial structure\n1,300,000,000 (and compelling the City to\nwhich the Government of M. Blum proposed\nIncrease local taxation by that amount), to\nto crect was rickety in the extreme. In 1932\ncurtail the public works grant to the capital\nthe deficit on the ordinary Budget had been\nthe 700,000,000., and to cut Various octive\nnearly 5,000,000,0001. In 1933 it was close on\nsmaller appropriations so do to reduce his total\n12,000,000,0000 in 1934 il was 9,000,000,0001.\nlean requirements Gipan Transis such compunity\n1935 over 10,000,000,000E, ; and in 1936 nearly\nadvances by the State as are to be refunded\n8,000,000,000/0 These recurring deficits had\nwithin - reasonable time) by between\ndestroyed confidence in the national finances\n11,000,000,000Γ. and 22.000,000,0000 As the\nand Governments found it increasingly difficult\nmale as miade by M. Reynand of\nto borrow money by orthodox means, Finally\nthe Government's probable loan requirements\nrecourse was had to the Bank of France, which\nin 1938 has been officially accepted. these outs\nmeant that the Bank was printing new nutes in\nand 10% increases mean that the Government\norder En moet such of the Government's financial\nwill liave to borrow only about 26.000,000,000\nneeds as the money market refused to cover.\nnest year. Less than 17,000,000,00000 of files is\nAll this was perfectly clear to M. Blum and\nrequired for purcly State purposes, and of that\nto the members of his Cabinet. They realized\nwm nearly two-thinds is LIVE account of\nthat it was essential le balance the Budget and\nrearmament.\nthat taxation would have to be increased in\nThe burden reiling on the French (axpayer\norder to make enda méet. But they thought\nis now at least as havy X that devolving upon\nthat the country would not be able to stand any\nthe Jaxpayer of any other country While an\nnew frondena until prosperity bail been restored,\nEXACT comparison between the incidence of\nand that their first task ought to be to revise\nBritish and French incume-lax is difficult to\ntrade and industry\nmake owing to the difference in the methods\nBALANCING THE BUDGET\nal calculation, the following figures give a fairly\ncorrect impression of the manner in which is\nAL recently as August 9 M. Vincent Auriel\ntaxed (he Income of a married man with two\nuid that in 1936 they peeded 2,000,000,000E. BY\nchildren in Grest Britzin and France. A tax-\nadvieve budgetary equilibrium. but (hat they\npayer in this category with £300 a year pays\nthought if between le do something inwards the\nmothing in Great Briten in France Two pays\nrestoration of prosperity twice welcing respayers\nshout 45 10% to Grest are Income of\nlo shoulder new hundres. The Government\nCSOO is Taxed at HOSE over IK, are against about\nwere therefore sumbling on A trade revival.\n121 in Frame The figures for the CLINO im\nTheir gamble failed. und two months ago the\ncome level any about 1102 and 195, and for\n£2,000 almos 1327 and 1440 respectively. And\nChauterops Government, with M. Bonnet at the\nda for DA evasider. M. Bloonet's advisers de not\nMinistry of Funance, came into office with a\nexcess that if is - prevalege as in generally be-\nmandain to pay the deliis insured by M. Vincent\nlieved. Il ** true that large amounts of French\nAurint. Time task is terribly complidated\nsavings And hearded abroad, und that the tis\nunorthudex methods, tried by M. Vincent Aurist\nwill the results described, are closed to them:\nauthoritive have no record of Them. isually\nthey are still raced with the problems of attain-\ntheir avings earn no interess 47 all thes are\ning husigntary which no Gavern.\nnot invested, but are deposited or suing his\nmant has time une 1911, of review trade and\nin the form al bankettes OF gold In any event\nindustry, which have been depressed MIVE 1933.\nthe Ministry extimate that they will not get queh\nand of suppling the expirt of capital. which has\name on therefore, since has the three end of aspects. 1934.\nRegraded Unclassified\ncommon\nDATE:\n1937\nM. BONNETS REFORMS\n- * doier and\nM. - insts and dradic\nblue Englism reques some - that\nhave - insurance - Fines,\nPark ve cel - e) Bord sinko\n- - for impressionable - The\nand University Part laid + - By the reminal -\nI I 2 2 I I T\nto . mind of forma\n- - when of the - - much heck the\nThe ding are alreadly The who of\n- they have - - la break up -\n- - fish No. -\nThe silley are HEI anded\n- hand has - Tway mhand. -\nby - - - 2 chini\nRevenues of william of lives have to\nbefore ans nail - my missio\nAming depo - - Cinima\nlas Rans al - Mani remaining will - the\n- - prov. importance PM the primare\n- forward from has fallen very -\nval. have and chaper INMI facilitàs fill France\na MAPS Mgn that \" teing\nentergines them e replements -\nrealized The which have - -\n- end expend their applicate wided\n- Towel $ (M)\nbuinning with and\nand The residency et pan All risc.\nSame Prime is -\nincluded of will pilo, though less de Queen\nthreaday The - of IM leviling\n- will have E check wanty to for MM\nliter institles my the reduction in (cal - die\ntake to por public more\nlitul lim inninal up. Who M suw\n- marks and M INC\nto . great incire a production exeming pross\nNúmer n° Ifade world All The une um\nthe DE ai pour which la clusing\nle - dews and company consumploser\nM was consirns, There has then a -\n\" was inviside Used priors should I up as\ndeul of sale M investing Vita import\nthe hame - resurné M value in cim al paid\n- a - is increasing thru efficiency\nand Commign aman, best The -\nand reducing la to - -\nTermunately von - - of the\nof the puble which - w/sh de Director\nFMIC aftects for is their n.\n- refunne by the previous\nspoun IM be und - of name\nTM andwriry Via pren -\nla improvement. Inn AM plan has yes\n- - M - own A THE - the - organ\nles subjeyment Same members of the\nBilleria current - over not only le\n- et dispossional to - N - in only\njustice in the emban has is - Che\nArough the a -\n- the retways, Offers who OMB - he\nmmaris study had heen - a buying\nIM present dism be -\npasse. These - also - - for the more\nChancial and more --- relistered\ndistre recogning uf the rights of -\nto embank un shall they fai M .\n- for Mir estable Bui IN\ngamble, expecisly - they have\n- of - first status count\nhad - experience - the working of the\ninsured information The -\nestimated sistem is - mule sel\n- of our cary well\n- to full advantage \" la is liken\nbe will UNIT beli - present expire\nof the not Invoice Budgetory\nin a few man - and the Envorsement\nemployers and employes minit unine Apriller,\nconfire - Virgin wills will to unime-\nresignize the lacts of the and\n- orofitable, esch as current\ncompany a producing as much es\nand missing operations\nresults at The Invoice cample -\nGhan decisions - this - and an the\nthe term standard of file la which de\nwhen programe Ve -\nworker) love cade good der alaim This may,\nEXPIRATION IF be tituln vilue N VALUE B/W depo\nindest certainly will, involve - currentive\nWhatever missure may be isture they un were\n- the - for which the was\nprofessor two del with de support of -\npayer acy nisi demond le visa\nuntil - upinion informised - -\n(TVIN the beginning - a .\nBeing income Receivery for -\n- red. Than - claim\nsuit - with hrs employee conditions en by\naming cash of news his by the worker.\nthe riso vi sectional éman.\nWhatever well be and for de principle which\nwf Number and of . - tack of\nfis may and a hard in there\nin the haire Al -\no alget - the review the of applica-\n- - ano - bue\n- which. - min perhaps any other single\nBail dreaming - united by - two\n- responsable for the starkering\nin HIGH cream. The anto need BITW to and\nof and the rise in\n- that tab un their business -\n1 proved\n- a - relaciamo with - - -\nAimin inversibly Man unione luss interprist\ndisniver that was - any - withing\nthe lurn hand week la - live-day and\nshould have fallered - their\nwhich - - - a\nunaller uses, - be septial and preville\nreviewing expentiture - referring production,\nor both Today's non FIVIM Parm\nstores - much de TM in pied A\npublic expirien. impensally the working\ncaso, who - is denser of loving\nall. online - than all, the of that\nIncreased man. Possible this\nwill make sum à compromise MMT the\nsours question, atch bas passed - mid Inc-\n(ine belsiven the employer and the Both\nsito a have suffered enough from the long-\ncontinuel dermission in recognize de ossessity\nof eviling ungether. espectally as a Givernment\nare now in posse in adose impartation Solb\nshould by able la for comfident Before the via\n1017 of Be Frant Poeshire - warkmen. the\npersonts, the individual and the\nsuper feir that they as the wull neo - she\nTHE LONDON THE\nOr forgulten cum of lbd - le the\nM policy and action et\nGovernment sm deunnined BY the pressure\na will anne of taken and bis information\nabs. the uncalled \"res hundred funding with\nwere is 5 many www.gev\nand declaration spercher. While M. BAN\nAUG\n36\n1937\n--- Iving Milinter and M: as\nthe Mindliry of Finess the loct von no the\npho leg. E - thes the trade university\nand (Mell Lientril Confideration wish our\ncamil . dominsts provide, and de\nand industrialists who - del They - -\ndarce of a. fair dest. And underst &\nCGT. and - afficied veine -\nBY two been anyed. poi as must as\nIM THIS sundred families\" had -\nde and astional mustives in ni the\ngeneral imprests of the unitity. M. CHAI-\nINSUPS and M. BEHIGHT late shown describe\nrevolved in person . wildle years,\nIng pressure both udes They have provid\nthair units and - belat in entivities\nprinciples, and they Save made plain\nOper M - and IM\nregister of gervale - against danger from\nANY dell' to the andome of the claims.\nparer IL (hr) have this established a\n- while - of the manden of the Gowe\n- a - purmer that the of other\nensim of Lbse pupulation sho an side - Mir\nvarging MARY of their MIN Socialis-M\nM - ATE a oppins will\nBY OM a Depart Price\n(he - Pupulaire\nM. and M. - propost 18\n- TP their - refurns with . sunder\nof - - deliped is - poter\n- and - (rule. Even procrizable -\nhave in - taken - permit operators\nwill form of pain in order is FRAD - - ,\n- MM - effect provincing of\n1 - card Interes NOM - will\nI\n1\nIM\na\nRegraded Unclassified\n171\nRB\nCODAT\nPARIS\nDated August 30, 1937\nRec'd 3:50 p. m.\nSecretary of State\nWashington.\n1220, August 30, 6 p. m.\nFROM COCHIAN.\nIn conversation yesterday Vincent Avriol told THE that\nhE had recently said to his successor Minister of Finance\nBonnet that the latter was \"Eating white bread\" in August\nbut that in September or October hE might bE having the\nsame hard fare that hE, Auriol, had last September. In\nother words Auriol does not EXPECT the present respite for\nthe Treasury to last. HE was as always most apprehensive\nas to the general outlook for international currency sta-\nbility if rearmament continues at the present pace.\nParis Exchange Market witnessed fairly wide fluctua-\ntions today. French control gained a little sterling at\n132.82 while British control was losing dollars against\nsterling around 4.963. Pressure on sterling was increased\nby rumor that Japan would take no cognizance of British\nnote. Report that American ship had been torpedoed by\nJapanese came\n172\nRB\n-2-#1220, August 30, 6 pama from Pari?\nJapanese came too late to affect the market. Forward frano\nslightly improved but rentes lower and internationals offered.\nBonnet has announced that the ten percent tax imposed\nby Laval on French rente dividends will bE abolished Effective\nWednesday on securities hEld by individuals. This news had\nalready been discounted on the rentr market. Bonnet also\nannounced that the Exact figure of four and one-half percent\n1934 bonds refunded was three billion one hundred sixty-one\nmillion.\nOrlgian ! inister of Finance Deeman has according to\npress issued & report of investigation of recent allegations\nagainst Covernor and directors of BElgian National Bank\nwhich Exonerates them from any legal misdeeds but recommends\nmeasures for avoiding recurrence of situation under investiga\ntion.\nEditorial on need for world cooperation with respect\nto currencies appearing today in LONDON FINANCIAL TIMES\nconclude: \"If EVEry country is going to depreciate its\ncurrency in greater or less degree then WE must work to-\ngether so as to reach the ultimate goal of a world-wide\ncurrency relationship in which under and over-valuation\nare reduced to & minimum. Belgium tried to achieve that\nEnd\n173\nRB\n-3-#1220, August 30, 6 p.m. from Paris\nEnd in 1935 and England, the United States, the sterling area,\nand Holland, Switzerland and Belgium are in a fair way to\nachieve it today. France is still in the throes of trial\nand error and. Germany clings to the first alternative or\nrestriction. The real need is for consultation and coopera-\ntion instead of Each country waiting to SEE how the other is\ngoing to jump. In other words WE need a united Effort made\nin a spirit of friendship and mutual trust and not in an\natmosphere of competitionend suspicion.\"\nBULLITT\nNPL\nMEDITAED\nTON\nnaver\nVIRGINIARY\n-\n-\nRegraded Unclassified\n174\nPARAPHRASE OF TELEGRAM RECEIVED\nFROM: American Embassy, Paris\nDATE: August 31, 5 p.m.\nNO.: 1225\nFROM COCHRAN\nWeakness of the belga was & feature of the Paris\nexchange market today resulting from press reports of a\nstormy session in yesterday's meeting of shareholders of\nthe National Bank of Belgium Rexist demonstrations and\nthe possibility of Cabinet resignations if no adjustment\nwas made of differences between the Prime Minister and\nthe Minister of Finance.\nForward franc appears quiet. Money 18 scarce but\nthere are still hopes for B. lowering of discount rate.\nA possible strike in the Renault automobile works in the\nnear future is being rumored.\nAnother set of financial decrees was promulgated in\ntoday's Journal Officiel. The two most important decrees\nconcern: (1) the suppression, effective on the maturity\ndate subsequent to the first of September, 1937, of the\n10% levy on coupons of Treasury securities and rentes\nbelonging to individuals; (3) the conversion, consolida-\ntion and amortization of foreign loans. To permit the\nGovernment to meet the extensive maturities of its foreign\nloans\nIf\nRegraded Unclassified\n1/5\n-2-\nloans and those contracted in behalf of French publio\norganizations and in order that no further charges in\nthe latter connection be incumbent upon the state,\narticles 1 and 2 of the decree provide, in translation,\nas follows:\nArticle 1. Authorization is given the Minister of\nFinance to borrow for the account of the Treasury on for-\neign markets with the view of the amortization consolida-\ntion or conversion of loans contracted abroad by the large\nrailways or the state public bodies.\nArticle 2. Authorization is given the Minister of\nFinance to enter agreements with the large railways or\nthe French National Railway Company and with public bodies\nfor the purpose of settling the terms under which they\nare to reimburse the Treasury for the charges which it\nassumes on account of the issues which it undertakes in\ntheir behalf in application of Article 1 of this decree\".\nOther financial decrees relate to fiscal modifications\nmainly in regard to communal finance, current accounts, etc.\nIn a meeting this forenoon the Counoil of Ministers\ndiscussed the terms of & decree which will appear tomorrow\nestablishing \"the French National Railway Company\", already\nmentioned above. Railway heads and the Minister of Public\nWorks signed the pertinent agreement.\nBULLITT\nEA:DJW\nRegraded\nUnclassified"
}