Volume 490, January 29 – January 31, 1942

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TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE Jen. 3, rone
TO
FROM
Vr. Haae
Secretary PA Morgenthau
Subject: Mr. Winthrop W. Aldrich's Proposal for "United
States Annuity Bonde"
1. Description of Proposed Bunde
The annuity bonds proposed by Mr. Aldrich would be in
two series -- one for large and the other for small investors.
In the description given by Mr. Aldrich, the yield of each
series 1s 2-1/2 percent. He states, however, that this rate
"
is used for illustration; it 18 not put forward as B.
reconsendation."
Each of the bonds, as described by Mr. Aldrich, would
be Issued at $92.82 and would appreciate in value (at 2-1/2
percent interest) to $100.00 at the end of three years.
Durine this period, and during an additional six months
before the disbursement of the first annuity payment -- a
total of 3-1/2 years -- the bonds would not be redeemable.
Since it is also proposed that the bonde be non-negotiable,
the holders would have no way of realizing on them during
this st-called "grace period."
Commencing 3-1/2 years after issue date, the bonds
would be liquidated by a series of equal semi-annual annuity
payments, each paid partly out of principal and pertly out
of interest. In the case of the bond designed for large
investors, these payments would be $3.00 per $100.00 and
would continue until 25 years after issue date, the last
payment being only about $1.20. In the case of the bond
Resigned for small investors, the semi-annual payments would
be 17.80 per $100.00 and would continue until 10 years after
issue date. the last payment being 8 little over $8.00.
Regraded Unclassified
222
Secretary Morgenthau - 2
The bonds of each series would be redeemable at the
option of the holder at any time after the initial 3-1/2
year grace period, but only at substantial discounts from
their unpaid principal balances. The bond for large in-
vestors, for example, would be redeemable at $90.70, 3-1/2
years after issuance at $92.82 and after the payment of one
semi-annual annuity of $3.00. This 1a equivalent to an
investment yield of 0.25 percent per annum for the period
held, and compares with 1.04 percent on Series G savings
bonds redeemed after being held for an equal period. In-
vestment yields for the period held increase gradually
thereafter, reaching 0.80 percent at the end of 5 years;
2.05 percent at the end of 12 years (the maturity date of
the present Beries F and G bonds); and 2.50 percent at the
end of 25 years.
The bond designed for small investors gives B. yield of
2.50 percent if held for the entire 10 year period; but, as
the intermediate redemption yields are only as great as those
of the series designed for large investors, the penalty for
redemption prior to maturity 18 much greater. This 18, of
course, just the reverse of the relationship between the
present Series E bonde on the one hand and Series F and G
bonds on the other.
Mr. Aldrich suggests that a provision be inserted in
each series analogous to that in the present Series G savings
bonds providing for the redemption of the full unpaid prin-
cipal balance in the event of death.
II. Merits Claimed for Proposed Bonds
Mr. Aldrich believes that the bonds which he proposes
would have the following advantages:
(1) They would be attractive to investors.
(2) They would lighten the burden of the
demand debt imposed on the Treasury by
the present savings bonds.
(3) They would provide for a more systematic
liquidation of the debt during the post-
war period.
Regraded Unclassified
Secretary Morgenthau - 3
III. Evaluation of Proposed Bonds
It is believed that the proposed bonds, if offered
mould not sell well for the following reasons!
(1) It would be difficult to popularize &
security neither redeemable nor nego-
tiable for a 3-1/2 year period.
(2) A term annuity such as the proposed
security 1s a "wasting asset", and it
18 believed that such an asset would be
less attractive at any given rate of
interest than either an appreciation
security or a current interest security.
The traditional preference of the market
for discount securities as compared with
premium securities 18 an example of the
relative unpopularity of "wasting assete." "
If a security 18 to be repaid in the form
of en annuity, it would probably be much
more popular dollar-for-dollar of actus-
rial value 1f it were payable in the form
of an annuity for a period certain or for
life, whichever 18 longer, rather than
for a period certain only.
(3) The suggested yields of the proposed bonds
would be unattractive in the present market
and compare very unfavorably with those
offered on the present savings bonds of
all series. (It should be noted in this
connection that r. Aldrich says that the
proposed yields are for purposes of illus-
tration only.)
It should finally be noted, from the standpoint of
public policy, that the proposed method of repayment of
the securities by periodic principal payments would impair
the flexibility of Treasury policy in handling the debt In
the post-war period.
Attachment
Regraded Unclassified
053
UNITED STATES ANNUITY BONDS
Page
221
A. Proposal
from
Winthrop W. Aldrich, Chairman Board of Directors
of the
Chase National Bank of the City of New York
Introduction
Any proposal, worthy of serious consideration at
this time, must recognize the magnitude and com-
=lexity of the Treasury's task in providing funds for the war effort.
The proposal must go further and look to the nature of the Treasury's
responsibilities in the transition from war to a peace economy. The
bond iseue herein described is designed to appeal to the public and at
the same time regularize the Treasury's financing without increasing
its immediate cash outlay. It is adapted to the basic economice of
the present and future situation of the nation, in so for 8.8 that situa-
tion can be appraised. It 1s believed that the bond would utilize the
present needs of the Treasury for new money to furnish a bridge into
the post-war reconstruction of the nation by providing purchasing power
to the nation when It will be needed.
Briefly, the form of the proposed bond 1a patterned on the
charactoristics of term loans as developed in recent years by commercial
banks. After B. three and one half year grace period, during which interest
socumulates, principal and interest would be returned to the purchaser in
equal Instalments 80 88 to rotire the bond at its maturity. Purchases
would not be limited to any fixed amount. It 18 belloved that the bond
would appeal to large purchasors, as woll as to those with medium or small
resources. It should attract those whose income during the war will ox-
aud their prospective post-war income, and those who, by reason of age,
world to interested In annuities.
Regraded Unclassified
- N -
225-
The introduction of such a bond would give added strength
and security to the fiscal position of the Treasury. For, to the
extent that the Annuity Bond finds favor with investors, the short-
term indebtedness of the Treasury would be thereby reduced, The fact
that the principal repayments are spread over a period of time would,
in itself, ease the burden of debt retirement in the post-war period.
Although tax revenues will increase, the projected war ex-
penditures of the federal government will be financed, for the most
part, by the sale of its obligations. Estimates contained in the
President's budget message of January 7 indicate the sale of over
$19,000,000,000 of obligations in the fiscal year 1941-42, and
$34,000,000,000 to $35,000,000,000 of obligations in 1942-43. These
are sales that must be made in addition to those government issues
placed with truet funds under the Social Security and other legisla-
tion.
The Status of With such requirements confronting 1t, the Treasury
Defense Bonds
must exerciso the utmost skill in handling its
finances. The security 1ssues most importantly used in the financing
of the Treasury are of two types, the genoral money market bonds issued
under the Second Liberty Loan Act (together with Treasury notos and
bills) and the "defonse bonds" issued in Series "E", "F" and "G".
It has been estimated that of total borrowings, exclusive of trust fund
borrowings, approximately $9,000,000,000 to $10,000,000,000 annually
will be realized from the sale of defonse bonds. These 18sues are not
negotiable but are redocmable. The Sories "E" and "F" bonds are pur-
chased at a discount of par and are rodoomable at successively higher
1/ Serios "E" bonds are dosigned for smallor purchasers and the Series
"p" and "G" for those with larger resources.
Regraded Unclassified
percentages of par value. The Series "C" bonds are purchased at par
and redemption value varies between 94.7 per cent of par and par dur-
ing the life of the bond. For the most part, defense bonds are sold
to individuals, institutions, and other non-banking purchasers. It
ia highly desirable that & still larger part of the Treasury's borrow-
ing be done in this manner.
The sale of these defense bonds began last May. In the Timal
eight months of 1941, a total of $2,538,000,000 WELE sold. of this total,
45 por cent went to smaller purchasers in the form of Series "E" bonds,
and 55 per cent to larger purchasers in the form of Series "F" and "G"
bonds, Interestingly enough, December sales reversed these percentages,
45 per cent consisting of Series "E" bonde and but 35 per cent Series
"F" and "c" bonds. Series "F" and "G" bonds contributed about 45 por
cent of total defense bond sales in the Second Federal Reserve District
from January 1 to January 23, inclusive. The present series of defense
bonds appear to be of limited suitability for purchases in substantial
amounts by those with large resources. For this and other reasons, It
1e proposed to supplement and, perhaps, replace the Series "I" and "C"
bonds by an issue of United States Annuity Bonds.
In addition, the Serios "F" and "G" bonde have another objec-
tionable characteristic from the standpoint of the Treasury. After six
months, they become redesmable on the first day of any calendar month,
on one month's notice in writing. The Series "E" and "F" bonds are TO-
deemable at not less than the cost price. The Series "G" bonds are re-
deemable at moderate discounts of the cost price but at not less than
cost price whon interest payments are included. Heavy demanda on the
Treasury in the future might occur under unfavorable circumstances should
the sale of defense bonds reach large levels. The one month's grace per-
Lod would not provide the same relief for the Treasury that it provides in
the case of B bank. In BO far de redemption might be demanded by the
Regraded Unclassified
- 4. -
227
public in successive months, the defense bonda constitute A liability
on the Treasury's books of uncertain nature, but one more akin to o
demand than to a time obligation with a fixed maturity.
Requirements of Three important requirements occur in considering
8 Desirable
Issue
the most desirable type of obligation for the
Treasury to 1ssue. The bond should appeal more strongly than the
Series "y" and "G" bonds to potential purchasers who possess large
idle balances. The demand liability position of the Treasury should
be prevented from increasing in so far as possible. There should be
no unhecessary addition made to the cash demands on the Treasury in
the immediate future. If & bond can be devised to accomplish these
objectives, a highly desirable revision will result in the Treasury's
financing program.
The United States It ia hoped that the United States Annuity Bond
Annuity Bond
herein described may accomplish these purposes.
The form of the bond, in substance, constitutes B term annuity. The
issue would be dated as of the first of the month in which purchase
1a made, and would be extinguished 25 years after the issue date. It
would be purchased at B discount and interest would accrue at 2 1/2 per
cent compounded semi-annually for three years from the issue date. The
2 1/2 per cent rate is used for illustration; it is not put forward as
a recommeniation. By setting B. purchase price of $928.17 a/ per $1,000,
the 2 1/2 per cent rate enhances the purchase price to $1,000 principal
amount after the three-year period has elapsed.
a/ If desired, this figure could be rounded out by accruing interest
for three years at a slight variation of the 2 1/2 per cent rate.
Regraded Unclassified
- 5 -
228
Semi-annual payments of principal and interest begin 3 1/2
years from the issue date. These semi-annual amortization and interest
payments are made in equal aggregate amounts, $30 each six months on a
$1,000 bond. The interest paid progressively decreases, while the
principal reduction payments progressively increase until maturity
when the total principal will have been returned to the purchaser. The
net yield, if held to maturity, 18 2 1/2 per cent, The return to the
holder after three years 18 6 per cent per annum, including both interest
and return of capital.
The Treasury would mail checks on a single bond each six months.
Since bonds would be sold in each month, different bonds would be dated
differently and the Treasury would mail checks to various holders on the
first day of each month in the calendar year. Each check would carry a
notation of the amount to be credited to interest and the amount to be
credited to return of principal. The interest accrued during the first
three years would be paid out with other paymente of interest and princi-
pal, beginning 3 1/2 years from the issue date.
The schedule which follows shows the semi-annual return of
principal with semi-annual interest payments computed at 2 1/2 per cent
per annum on the respective unpaid balances of principal at successive
intervals of time. These combined payments amount to $30 per $1,000
bond every six months over a period of 22 years, after the lapse of
the three and one half year grace period during which interest accumulates
on the original purchase price at the rate of 2 1/2 per cent compounded
semi-annually,
Regraded Unclassified
- 6
0, B. ANNUITY BOND
229
l'ayment and Redemption Value Schedule of & $1,000 - 216 Integret bearing Bond producing $60.00 per arms, or
$30.00 sech stx months. This is a 25 Year Bond with annuily payments commensing 2: years from the tome date.
These 130. annuity payments become due over 44 synd-annual periods OP 22 years.
(Not redeemable until end of 32 year period)
Approx.In-
Approx.Yisle
vestment
on Redemption
Semi-Annual
Senj-Annual
Dollars
Net Dollars
Yield from
value from
Semi-Annual
Interest at
Principal
Principal
Payable
of Income
Issue Date
Redemption
Periods
Innuity
HS per
Reduction
Balances
If
over Cost
to Redemp-
Date to
Years Henoe
Payments
annun
Payments
of Bond
Redeemed
If Redeemed
tion Date
Maturity
Subscription price)
-
-
5 928.17
(Average Ltre Method Used)
End of
Tr.
-
Subscription price -
939.78
-
1
of $928.17 m-
-
951.52
-
-
il
Yes.
,
hannes to $1,000.
-
963.42
-
7
1
n.
principal, at end -
975.46
-
II
If
-
of the 3rd Year.
-
967.65
-
3
"
I
1,000.00
#
-
31
"
1 30.00
12.50
$ 17.50
902.50
1 907.00
I 0.89
.25%
3,304
4
"
30.
12.25
17.72
964.78
804.
15.113
40%
3,425
o
4
-
30.
12.06
17.94
946.34
n64,
25.83
.60%
3.50%
5
=
30.
11,84
18.16
928.68
847.
38.03
.80%
3.53%
"
St
"
30.
11,61
16,39
910.29
831.
52,83
1,005
3.50%
F
"
30.
11.30
10.62
891.67
817.
60.03
1,20$
3.59%
4
"
30.
11.15
10.05
872.82
799.
#0,93
1.305
3,64%
E
7
-
30.
10.91
19.09
853.73
781.
92.83
1.40$
3.73%
if
75 "
30.
10.67
19.33
894.40
764.
105.83
1,50%
3.75%
A
"
30.
10,43
19.57
814.83
748.
119.83
1,60%
3.77%
il
- R
30.
10,19
19.81
795.02
732.
133.03
1.70%
3.79%
9 "
30.
9.94
20.06
774.96
717.
148.83
1.60$
3.80%
=
90 II
30.
9.69
20.31
754,65
699.
160.83
1.85%
3.83%
=
10 "
30,
9.43
20.57
734.08
680,
171.83
1,90%
3.91%
lot
"
30,
9.18
20.82
713.26
662.
183.93
1,95%
3.96%
If
11
H
30.
8,92
21.08
692.18
644.
195.83
2,00%
3.99%
.
11- "
30.
0.65
21.35
670.83
625.
206.83
2,05%
4,09%
.
12 N
30.
8.39
21.61
647.72
602.
213.83
8.05%
4,30%
a
12th If
30.
1.12
21.88
627.34
584,
225.83
2,10%
4.345
if
13
Il
30.
7.84
22.16
605.10
561.
232,83
2.10%
4.57%
a
13t
E
30,
7.56
22.44
582.74
543.
244,83
2.15%
4,60%
in
14
a
30.
7.28
22.72
560.02
519.
250.83
2,15%
4.95%
14th
-
30.
7,00
23,00
537.02
501.
262.83
2.20%
4.95%
15 "
30.
6.71
23.29
513.73
477.
260.83
2,20%
5.325
#
150
"
30,
6,42
23.58
490.15
459.
280.83
2.25%
5,33%
IF
16
F
30.
6,13
23.87
466.20
435.
296.83
2.25%
5,75%
-
16th
is
30.
5.63
24.17
447.11
416.
297.83
2.305
5,70%
If
17 -
30.
5.53
24,47
417.64
391.
302.83
2,30%
6,37%
-
17%
=
30,
5.22
24.78
392.86
367.
306.83
2.315
6.75%
Is "
30.
4,91
25.09
367.77
343.
314.83
2.325
Yields from
1A) "
30,
4,60
25,40
342.37
319.
320.83
2,33%
this period
19
.
30.
4.28
25,72
316.65
294.
325.83
2.34%
on, increase
=
190 a
30.
3.96
26,04
290.61
269.
330.83
2.355
quite rapidly.
20 et
30,
3,63
26.37
264.24
246.
337.83
2.375
"
20 -
30,
3,30
26,70
137.54
222.
343.83
2.395
"
21
-
30,
2,97
27.03
210.51
197.
344.63
2,415
22/- "
30.
2.63
27.37
183.14
173,
354.83
2.435
22 -
30.
2,29
27.71
155.43
148,
359.83
2,45%
227
=
30.
1,94
28,06
127.37
121.
362.33
2,46%
-
13
se
30,
1,59
28,41
98.96
94.
365.83
2,475
232
is
30,
1,24
28.76
70.20
67.
368.83
2,408
e
24
I
30,
.88
29.12
41.08
41.
372.03
2.495
"
24--
"
30
.SI
29,49
11.59
11,59
373.42
2.50%
25
=
11.73
,14
11.59
&
(
373.56
Insals $1,301.73
$301.73
$1,000.00
increment of $71.83 represents an accumulation of 2% interest compounded sent-enmielly on the 1920.17 sub-
peription price.
Vetter units ware maintained shen arriving at Redemption Values.
Regraded Unclassified
- 7 -
230
Registration
The bonds would be issued in registered form in
denominations of $1,000, $5,000, $10,000, $50,000,
$100,000 and $500,000 and made non-negotiable. The rules that now
apply to the registration of the defense bonds might be used in con-
nection with the United States Annuity Bond.
Redeemability The issue would not be callable by the Treasury
Department, but on one month's notice in writing
may be redeemed prior to maturity after 3 1/2 years from the issue
date at the owner's option at fixed redemption values, as provided
in the accompanying schedule. These redemption values represent a
greater discount of the face value of the bonds than is now the case
with defense bonds.
Provision should be made for redemption in full upon the
death of the registered owner at the then prevailing principal balance.
This 18 equivalent to making the bonds acceptable for payment of estate
and inheritance taxes. Or, if it is preferred by the holder, the
annuity payments might be continued after death by registering the
bonds in two names, or by naming a beneficiary in the bond's registra-
tion.
Annuity Bonde
The foregoing description and table outline the
For Smaller
Incomes
features of a bond that should appeal to those in
the middle and higher income groups. It is entirely possible that the
annuity feature could be applied also to & bond designed to draw off
Regraded Unclassified
- 8 4
231
the abnormal wartime incomes of many in the lower income ranges.
Industrial workers particularly should look with favor upon an instru-
ment in which they could place enhanced incomes today, and have their
incomes returned with interest over a period of years in the future.
A bond designed for this purpose should have a shorter
maturity; should pay out in, perhaps, ten years. Since the annuity
feature would be its chief attraction, it might carry a moderate rate
of interest. Cash outlays of the Treasury to service a bond paying
out this rapidly would be heavier, and the amount issued in any year
to any one person might be limited to $2,500. Denominations should
be limited, perhaps, to $100 minimum in order to minimize clerical
expenses in servicing the issue.
The following table describes a $100 bond, at 2 1/2 per cent,
to be retired in 10 years. After the three and one-half year period of
grace, semi-annual payments of $7.80 would begin. A somewhat larger
payment would be made on the maturity date, BO as to return principal
with interest in full.
Regraded Unclassified
- 9 -
232
U. 5, ANNUITY BOND
$7.80 each six months. & Bond with annuity payments commencing 30 years from the issue date.
Payment and Redemption Value This is Schedule 10 Year of a $100. - 2/6 Interest bearing Bond producing $15.60 per annum, or
These $7.00 annuity payments become due over 14 seni-annual periods or 7 years,
(Not Redeemable until end of » year period)
Approx.In-
Approx.Yield
Semi-Annual
Semi-Annual
vestment
Dollars
on Redemption
Seni-Annual
Semi-Annual
Interest at
Net Dollars
Principal
Yield from
Principal
value from
Payable
Periods
2/5 per
of Income
Annuity
Reduction
Issue Date
Balances
Redemption
if
over Cost
Years Hemos
Payments
ennus
Payments
of Bond
to Redemp-
Date to
Redeemed
If Redeemed
(Subscription price)
tion Date
-
-
$ 92.82
Maturity
-
End of
Yr.
-
) Subscription price -
(Average Life Method Used)
93.94
-
"
1 11
-
)
of $92.82 un-
-
95.15
-
"
If Yrs.
-
hances to $100.
-
96.34
-
"
2 a
-
at end of 3rd
-
97.55
-
#
it "
-
year.
-
98.77
-
If
3 "
-
.
-
100.00
/
"
It
"
$ 7.80
$ 1.25
$ 6.55
93.45
# 85.90
$ 00.88
.26%
"
4 "
7.80
1.17
6.63
5.15%
86.82
78.80
1.58
A "
7.80
.415
.
1.09
6.71
6,00%
80,11
72.00
2.58
.60%
.
5 =
7.80
1.00
6.80
7.00%
73.31
65.40
3.78
.815
"
#
7.80
Yields from
50
.92
6.88
66.43
58.90
5.08
1.01%
#
6 "
7.80
.83
6.97
this period
59.46
52.50
6.48
1.21%
"
4 "
7.80
.74
7.06
on, increase
52.40
45.60
7.38
1.30%
of
7 "
7.80
66
quite rapidly.
7.14
45.26
38.70
8.28
1,40%
.
7½ #
7.80
.57
7.23
38.03
31.90
9.28
1.50%
"
8 "
7.80
.48
7.32
30.71
24.90
10,08
1.60%
in
et "
7.80
.38
7.42
23.29
18,10
11,08
1,70%
"
9 "
7.80
.29
7.51
15.78
11.10
11,88
1.80%
#
90 "
7.80
.20
7.60
8.18
2.80
12.38
1.85%
.
10 "
8.28
.10
8.18
-0-
-
16.86
Totals $ 109.68
$ 9.68
$ 100.00
Increment of $7.18 represents an accumulation of 2% interest compounded semi-annually on the $92.82 sub-
scription price,
/ Dollar units were maintained when arriving at Redemption Values,
- 10 -
233
Economic
The economic effects of using annuity bonds as
Effects
a supplement to Series "E" defense bonds and,
perhaps, as a substitute for Series "F" and "G" bonds may be con-
eidered from the standpoint of the Treasury, the holder of the bonds,
and the general economy of the country,
Effect on
The present defense bonds create & contingent claim
the Treasury
upon the Treasury in any month that holders may
wieh to redeom. The amount of this contingent claim increases in pro-
portion to the success realized in selling the defense issues. There
are two principal reasons why holders might demand payment. Individuals
may need funds from time to time which they can conveniently obtain by
redeeming their defense bonds. This could result in a large number of
demands upon the Treasury in the event of a post-war deflation with
rising unomployment. But it is improbable that the aggregate dollar
demande from this source would be great or would be difficult for the
Treasury to handle. Moreover, redemption in these circumstances would
eupply purchasing power to the community when it would be desirable.
The most important potontial demand upon the Treasury in dol-
lar amount 1a provided by the possibility of a material revision in the
economic expectations of the larger holders of defenso bonds. A state
of high business activity with booming prices might induce redomption of
the Series "F" and "G" bonde especially. In theso circumstances, unlike
those in a situation of large unomployment, redomption on a large scale
would provide the community with now purchasing power at a time when it
1e most undesirable that purchasing power be increased.
A highly desirable featuro of the United States Annuity Bond
ie that it is rodoemable at sizablo discounts of the face value. In
this circumstance, a holder confronted with the docision of redeeming
Regraded Unclassified
- 11 -
234
the bonds to acquire funds to use in other investments must accept &
known loss for a contingent gain. It seems less likely that a large
"run" on redeemable government bonds could occur in this situation.
Even if open-markst bonds should decline in market price
to 8. level making it profitable for the holder of Annuity Bonds to
cash his holdings and purchase the open-market government obligations,
the Treasury would find itself in the enviable position of realizing a
net decrease in its debt as a result of the transaction. But this 1a
an improbable contingency in view of the announced intention to main-
tain comparatively easy interest rates.
After the three year accretion period, the service of Annuity
Bonds would require greater cash outlays than other types of government
issues. The following table uses the 25-year Annuity Bond to show just
how much greater this service would be for outstanding amounts from
$10,000,000,000 to $40,000,000,000. To the extent that it 18 not financed
with new issues, the additional cash outlay represents & reduction of debt
and & strengthening of government credit. In addition, it 1s a determin-
able amount, whereas the cash outlays to service an equal amount of Defense
Bonds might fluctuate within wide ranges, depending upon the rate of their
redemption,
ANNUAL DEBT SERVICE TO CARRY DEFENSE PROGRAM
(in millions of dollars)
Six per cent
Additional Cash
Principal
Two and one-half
Outlays of
and
per cent
Treasury--Applied to
Interest
Interest on
Principal
Service
"Long" Bonds
Reduction of
Amount
Per Annum
in any event
"Defense" Debt
$10,000
$ 600
$ 250
$ 350
20,000
1,200
500
700
25,000
1,500
625
875
30,000
1,800
750
1,050
40,000
2,400
1,000
1,400
Regraded Unclassified
- 12 -
235
Effect on
The holder of Annuity Bonds has somewhat less to
the Holder
fear from changing economic developments than
would be the case if be possessed a marketable government bond of the
customary type, which be held to maturity or was forced to sell in
the market at an inopportune time. In the third year after issuance,
semi-annual return of principal begins in progressively larger amounts
until the issue has been fully paid at its redemption date. These
successive principal payments provide the holder with the opportunity
of reinvesting successive parts of his original funds over a period of
time so that the average conditions that pertain over the life of the
bond are available to him in his reinvestment decisions. This provides
him with the opportunity of mitigating the effects of broad economic
change upon his personal affairs.
Moreover, it provides the holder with a convenient means of
saving wartime income that would be returned in instalments with
interest over a period of years in the future. This 18 especially true
of the 10-year 1ssue designed to appeal to smaller income receivers.
Effect on the The effects of the Annuity Bond issue upon the
Economy
general economy, and more specially upon the money
markets, depend largely upon the extent of their sale. To the extent
that the bonda are sold in large amounts to people who use existing
dormant deposits, the result 18 an activating of those deposits. Since
the annuity feature of the bonds 18 designed to appeal to those who have
substantial resources, it is reasonable to believe that this would be one
of the results. No other type of government issue has been conspicuously
successful in tapping these large unused funds.
Regraded Unclassified
- 13 -
236
To the extent that the Treasury might succeed in financing the
war effort in this way, there would be 4 reduction in the amount of new
general money market bonds which it had to sell. Perhaps the most dif-
ficult problem today associated with war finance occurs in connection
with the now indicated necessity of large bond purchases by the commer-
cial banks of the nation. From the standpoint of the money markets,
this problem can be sased somewhat by the Treasury gradually reducing
the maturity of its outstanding obligations and concentrating the bulk
of its forthcoming financing in the short-term market, But it still
remains true that for many reasons, it 1s highly desirable for the
government to sell as large a part of its issues as possible to non-
banking purchasers. Anything that can divert the forthcoming Treasury
financing away from the banks and toward the public will serve the
national interest and is worthy of serious consideration. The Annuity
Bonde appear to possess the necessary features to attract large balances
from private sources and thus to ease this phase of government finance.
Finally, the method of repayment should have B. beneficial ef-
fect on the economy. Repayment of the Liberty and Victory bonds of the
last war occurred at irregular maturity intervals, This released funds
to the money markets that were used to stimulate some of the undesirable
financing of the 1920's, In contrast, the provisions of the Annuity
Bonds would insure that new funds would arrive in stabilized amounts.
To the extent that the bonds might be widely held, funds would be
returned to all sections of the nation and not concentrated in the large
money markets.
January 28, 1942
Regraded Unclassified
Unfilled Orders for Savings Bonds at the
Federal Reserve Banks and the Post Office Department
January 15 to date
(In thousands of pieces)
t Unfilled
:
:
Unfilled
New orders
Bonds
: orders at
:
:
orders at
Stock of
IBM
received
manufactured
close of
bonds
deliveries
opening of
:
: business
today
:
:
today
business
on hand
this day
Jan.
15
550
660
750
455
231
1,000
16
455
773
775
426
204
750
17
426
672
800
298
204
1,000
18
298
none-no mail
none-closed
298
204
300
19
298
204
800
202
704
625
20
202
204
300
86
1,184
1,000
21
86
411
800
59
1,546
075
22
59
697
800
86
1,676
1,000
23
86
569
800
50
1,871
1,000
24
50
727
800
28
1,922
1,000
25
28
none-no mail
none-closed
28
1,922
-
26
28
490
1,000
7
2,011
2,000
27
7
434
1,000 1/
7
2,177
-
28
7
474
1,000
6
2,102
7,000
29
6
407
1,000
8
2,097
-
Office of the Secretary of the Treasury,
January 30, 1942
Division of Research and Statistics.
*
Bonds in Washington vaulte only.
1 Includes 400 thousand pieces manufactured for inventory in the field.
N
Includes 600 thousand pieces manufactured for inventory in the field.
Regraded Unclassified
hug
CONFIDENTIAL
Stock of Series E Savings Bonds on Hand
January 15, 1942 to date
(In thousands of pieces)
: Stock on hand
:
:
Bonds
Stock on hand
IBM
Sales
:
beginning
:
manufactured
close of
deliveries
:
of day
:
this day
:
this day
day
this day
Jan.
15
6,569
320
750
6,999
1,000
16
6,999
445
775
7,329
750
17
7,329
163
800
7,966
1,000
18
7,966
none-closed
none-closed
7,966
800
19
7,966
665
800
8,101
825
20
8,101
218
800
8,683
1,000
21
8,683
337
800
9,146
875
22
9,146
381
800
9,565
1,000
23
9,565
377
800
9,988
1,000
24
9,988
263
800
10,525
1,000
25
10,525
none-closed
none-closed
10,525
-
26
10,525
487
1,000
11,038
2,000
27
11,038
186
1,000
11,852
I
28
11,852
251
1,000
12,601
2,000
29
12,601
265
1,000
13,336
I
Office of the Secretary of the Treasury,
January 30, 1942
Division of Research and Statistics.
Includes stock in hands of (1) Federal Reserve Banks and branches, (2) Post offices,
(3) Federal Reserve Bank issuing agents, and (4) Treasury vaults in Washington.
Regraded Unclassified
CONFIRM
UNITED STATES SAVINGS BONDS
Comparative Statement of Sales During
Last Twenty-three Business Days of January 1942 and December and November 1941
(November 1-29, December 431, January 3-29)
On Basis of Issue Price
(Amounts in thousands of dollars)
:
:
:
:
Sales
:
Amount of Increase
:
Percentage of Increase
Item
:
:
:
:
January
:
December
:
January
:
December
January
December
November
:
:
--
:
over
:
over
:
over
:
:
1942
:
1941
1941
over
:
:
December
:
November
:
December
:
November
Series E - Post Offices
$141,850
$ 97,439
$ 37,997
$ 44,411
$ 59,442
45.6%
156.4%
Series E - Banks
457,554
228,701
71,478
228,853
157,223
100.1
220.0
Series 3 - Total
599,405
326,140
109,475
273,265
216,665
83.8
197.9
Series 7 - Banks
67,492
30,446
18,978
37,046
11,468
121.7
60.4
Series G - Banks
277,331
135,983
105,035
141,348
30,948
103.9
29.5
Total
$944,227
$492,568
$233,487
$451,659
$259,081
91.7%
111.0%
Office of the Secretary of the Treasury, Division of Research and Statistics.
January 30, 1942.
Source: All figures are deposits with the Treasurer of the United States on account of proceeds
of sales of United States Savings Bonds.
Note: Figures have been rounded to nearest thousand and vill not necessarily add to totals.
Regraded Unclassifi
UNITED - SAVINGS BONDS
Daily Sales - January, 1942
CONFIDENTU
On Basis of Issue Price
(In thousands of dollars)
Post Office
Bank Bond Sales
All Bond Sales
Bond Sales
Date
Series I
Series I
Series I
Series G
Total
Series 1
Series I
Beries G
Total
January 1942
1
$ 3,982
$ 10,229
$ 1,964
# 7,605
$ 19.798
$ 14,211
$ 1,964
$ 7,605
$ 23,780
2
4,802
10,736
2,056
7.779
20,571
15,538
2,056
7.779
25,373
3
4,457
9,557
1,278
5,453
16,289
14,015
1,278
5,453
20,747
5
9,684
26,724
3,240
13,704
43,668
36,408
3,240
13,704
53,352
GV
6,711
7,659
1,341
6,778
15,778
14,369
1,341
6,778
22,489
7
6,748
21,267
3,692
16,832
43,790
28,015
3,692
18,832
50,539
8
7,509
21,297
3,821
12,871
37,989
28,806
3,821
12,871
45.498
9
5.746
12,359
1,798
4,765
18,923
18,105
1,798
4,765
24,669
10
4,398
16,031
1,858
6,355
24,244
20,429
1,858
6,355
28,641
12
10,187
37,483
3,830
14,353
55,666
47,670
3,830
14,353
65,853
13
7,902
15,059
2,507
11,944
29,510
22,961
2,507
11,944
37,412
14
4,706
19,939
3,701
14,293
37,933
24,645
3.701
14,293
42,639
15
6,444
16,597
2,243
13,283
32,123
23,041
2,243
13,283
38,567
16
5.721
26,239
4,319
14,078
44,637
31,960
4,319
14,075
50,358
17
4,830
6,933
759
3,008
10,700
11,763
759
3,008
15.530
19
6,835
39,000
3,946
16,599
59,545
47,835
3,946
16,599
68,300
20
5,155
10,549
2,285
10,551
23,385
15,703
2,255
10,551
28,539
21
4,886
19,375
3,538
15,566
38,479
24,261
3,538
15,566
43,365
22
5,161
22,257
3.973
9.850
36,080
27,418
3.973
9,850
41,241
23
5.908
23,392
2,652
5,004
34,048
29,300
2,652
8,004
39.956
24
4,655
15,820
2,239
5,344
23,403
20,476
2,239
5.344
28,058
26
7,095
39.997
5,022
17,516
62,535
47,093
5,022
17,516
69,630
27
4,967
11,504
3.569
23,125
38,199
16,471
3.569
23,125
43,165
28
5,318
18,394
2,656
18,636
39,686
23,712
2,656
18,636
45,004
29
4,826
20,123
3,223
12,422
35,768
24,949
3,223
12,422
40,595
Total
$150,635
$478,519
$ 71,513
$292,714
$ 842,746
$629,153
$ 71,513
$292,714
$ 993,380
Office of the Secretary of the Treasury, Division of Research and Statistics.
January 30, 1942.
Source: All figures are deposits with the Treasurer of the United States on account of proceeds of
sales of United States savings bonds.
Regraded Unclas
Ligares have been rounded to sand net consertly add to totals,
240-A
January 30, 1942
TO: LAROID E. GRAVES
PROGRESS HEPORT These DEPENSE SAVINGS STAFF
02 BOITDS
Actual cash receints from the sale of S, F and
G
words for the last twenty-three business days of Janu-
ary (January 1 excluded) totaled 929,006,000, an increase
of 100.6 per cent over sales for the corresponding number
of days in December. Sales for the last twenty-three
business days of December were w463,093,000, And the same
period in November, 233,487,000.
Sales of Bonds on Monday, January 26, totaled
69,530,000, settin" the highest daily record si ce the
start of the Defense Savings Program.
Series E Bond sales for the last twenty-three
business days of Jenuary were ,539,993,000, an increase
of 95.1 per cent over Series 11 sales for the same period
in December. Series E sales for the first twenty-three
days of December were $302,350,000.
PAYROLL SAVINGS PLAN
The estimated number of employees now exposed
to Payroll Savings Plans totals 12,148,735. These are
the employees of 14,722 firms from "Mich reports have been
vislan.
received through State admi Istrators.
Regraded Unclassified
240-B
-2-
Four thousand forty-three firms employing
500 or more workers report 10,844,061 employees exposed.
Five thousand nine hundred thirty-three firms
employing between 100 and 500 workers report 1,136,464
employees exposed.
Four thousand seven hundred fifty-six firms
employing less than 100 workers report 168,210 workers
exposed.
SPECIAL
Life Magazine's current issue, on newsstands
today, devotes a double spread of ten pictures and text
to the promotional efforts undertaken for Defense Bonds.
(Copy attached.)
VICTORY HOUSES
Standard Oil Company of California has informed
the Treasury that it will continue the Victory House in
Los Angeles "for the duration," and that a similar House
to promote the sale of Defense Bonds and Stamps will be
opened in San Francisco in February.
240.C
-3-
NEWSPAPER CARRIERS
Returns through January 24 show that the news-
paper carriers of 604 newspapers have sold 66,673,928
ten cent Defense Savings Stamps, or the cash equivalent
in Bonds or stamps of larger denominations. This is an
increase of 26 per cent over the returns reported as of
January 19. The dollar increase since the January 19 re-
port amounts to $13,841,901. (Statistical chart showing
carrier boy sales by states is attached.)
EDUCATION
Copies of the new Education Committees handbook
are being distributed to all education representatives on
local and state committees this week by State Administra-
tors. (Copy attached.)
The Education Division has completed arrangements
to set up & Defense Savings Stamp booth at the Civic audi-
torium in San Francisco during the national convention of
the American Association of School Administrators from
February 21 through February 26. The Education Director
is booked to give three talks at both general and committee
meetings of this convention.
Plans were outlined at the National Executive Board
meeting of the Parents Teachers Association in Chicago by the
Education Division, calling for expansion of the Defense Sav-
ings Program both by PTA members and in Schools. At this meet-
ing, the National PTA body invested $25,000 in Defense Bonds.
Regraded Unclassified
240-D
-4-
In response to numerous requests from school
officials, two small pamphlets are in preparation, designed
to explain the meaning of Bonds and Stamps to school pupils.
One of these booklets is being prepared expressly for students
of high school age; the other for elementary school pupils.
(Copy of Defense Savings article in "School Life" attached.)
RETAIL STORE ACTIVITY
Governor Stevenson of Texas, has advised the
Treasury's Retail Advisory Committee, that he will issue
a proclamation on February 16, making every pay day De-
fense Bond Day throughout the entire state. Arrangements
are being completed to have volunteer workers man Defense
Savings booths in department stores, hotels and theatres.
Friday, January 30 is Defense Savings Day in Al-
toona, Pennsylvania. Clerks in all stores have been assigned
$10 worth of Defense Savings Stamps to sell to customers. A
large parade is scheduled and all schools will be closed in
observance of the day.
Retailers of the State of Pennsylvania have set
themselves an $80,000,000 goal in their Defense Savings
Drive; while chain stores of Pennsylvania have advised
that their goal is $25,000,000.
Since January 2 through January 23, Schulte Cigar
Stores in New York City area report that they have sold
$106,000 worth of Defense Savings Stamps.
Regraded Unclassified
240-E
-5-
WOMEN'S ORGANIZATIONS
Replies from 250 questionnaires to women's
organizations throughout the country are being analyzed
by the Women's Division. The questionnaires were drawn
up to determine what individual organizations have done
and plan to do for the Defense Savings Program, and also
to learn in what way the Defense Savings Staff might best
aid them. Publications of these organizations are also
being studied to determine the type of Defense Savings
articles best suited for them.
The Women's Division in cooperation with the
General Federation of Women's Clubs is working out details
of 8 nationwide pledge-signing contest through local and
state member clubs.
Arrangements were completed for members of the
American Woman's Voluntary Service to sell Defense Savings
Stamps in cooperation with local and state committees.
ENTERTAINMENT
Sabu, the "elephant boy" movie star, began his
nationwide tour of newspaper carrier meetings this week,
making appearances in Washington, D. C., Baltimore, Phila-
delphia and Pittsburgh.
The Defense Bond Doll Tour of Miss Audrey Kargere,
stylist and sculptress, opens on February 2 at the Jordan
Marsh Department store in Boston, Massachusetts.
Regraded Unclassified
240-F
-6-
Miss Lucy Monroe, concert and radio star, begins
her extended songfest tour in February. (Copies of Press
Releases on the Kargere and Monroe tours are attached.)
SPECIAL COMPAIGNS
"Buy a Bomber," through the purchase of Defense
bond campaigns are being started Sunday, February 1, by
the New York Journal American and the Los Angeles Examiner.
Similar campaigns are scheduled to start on Wednesday, Feb-
ruary 4 by the Washington Post and Radio Station WJSV in
Washington, D. C.; the Chicago Herald-American and the San
Francisco Examiner.
NEWSREELS
The Defense Savings Staff now has 8 library of
newsreel film, picturing citizens from all walks of life,
from the states of Minnesota, Wisconsin, Michigan, New York,
Massachusetts, Rhode Island, Connecticut, Pennsylvania,
Maryland, Virginia, North Carolina, South Carolina and Georgia.
Two newsreel crews are now working, and this week
will cover the states of Louisiana, Texas, Oklahoma, Ohio,
West Virginia and Kentucky.
Release of these films to theaters in these
regions will begin on 8 continuing basis through the
five newsreel companies on March 5.
Regraded Unclassified
240-G
-7-
MOTION PICTURES
The Motion Picture Theaters Section of the War
Activities Committee of the Motion Picture Industry has
passed a resolution that they will make every effort to
place Stamps on sale at special booths or at the box offices
or candy counters as soon as possible in every one of the
13,000 theatres which they represent.
Special "Bugs Bunny" animated cartoon produced
by Leon Schlesinger to promote Defense Savings, is being
distributed to theatres throughout the country.
BUSINESS PUBLICATIONS
Replies have been received from 250 business
publications advising that they will run the second ad-
vertisement on Payroll Savings in their February or March
issues.
In additi n to publishing the first Payroll
Savings Advertisement, numerous publications are carry-
ing special cover illustrations featuring Defense Bonds
and Stamps. A typical example is illustrated in attached
tear sheets from American Agency Bulletin.
Coupon requests from the first Payroll Savings
advertisement now total 2,855.
Newsweek Magazine publishes Payroll Savings
advertisement in current issue. (Copy attached)
Regraded Unclassified
240-H
-8-
HOUSE MAGAZINES
House magazines publishing the first one column
feature release "Defense Bonds Buy Tanks," now total 700.
RADIO
Total of 2,581 Minute Men already have broadcast,
in English and eleven foreign languages, over 814 radio
stations throughout the country. (Copy of Treasury De-
partment citation given to Minute Men is attached.)
Twenty-seven of the ninety-six United States
Senators have already made recordings in the interest of
the Defense Savings Program. Others are making their records
daily. These transcriptions will be distributed to all radio
stations in the senators' home states. Senators who have
completed their records are:
Robert M. LaFollett Jr., of Wisconsin; Alexander
Wiley of Wisconsin; Henry Cabot Lodge, Jr., of Massachusetts;
Scott W. Lucas of Illinois; Harry S. Truman of Missouri;
Joseph H. Ball of Minnesota; George W. Norris of Nebraska;
Arthur H. Vandenberg of Michigan; Wall Doxey of Mississippi;
Theodore G. Bilbo of Mississippi; Millard E. Tydings of
Maryland; Hugh A. Butler of Nebraska; Raymond E. Willis
of Indiana; James E. Murrey of Montana; James E. Mead of
New York; George D. Aiken of Vermont; John Thomas of Idaho;
James M. Tunnell of Delaware; D. Worth Clark of Idaho;
Arthur Capper of Kansas; Albert B. Chandler of Kentucky;
240-I
-9-
Charles W. Tobey of New Hampshire; William J. Bulow of
South Dakota; Eugene Millikin of Colorado; Joseph Rosier
of West Virginia; Edwin C. Johnson of Colorado; and C.
Wayland Brooks of Illinois.
Foreign language radio stations and program
directors are announcing daily the amount of Bonds bought
by foreign language organizations, in addition to schedu-
ling Minute Man speakers. (Typical foreign language
Minute Man address attached.)
Farm program directors are scheduling Minute
Men daily on 214 stations. New Minute Man announcements
have been sent to 870 radio stations for daily use, (samples
attached) along with regular announcement for use five
times daily. (Samples attached.)
Employees of Standard Oil refineries of New
Jersey have pledged $600,000 out of 1942 wages for pur-
chase of Bonds.
Broadcasting Magazine story of January 19 on
radio stations participation in Defense Payroll Savings
is attached.
PRESS
Editors of fourteen movie and radio fan magazines
met with Defense Savings Staff representatives in New York
this week to develop plans for further promotion of Defense
Regraded Unclassified
240.J
J
-10-
Bonds and Sta ps. Each editor present pledged his magazine
to all possible support of the program and each promised to
develop individual means of supporting Defense Savings.
Miss Dagmar Norgord, representing the publishers
of All-American Comics, Inc., net with staff represente-
tives in Washington to present a plan for organizing the
\OTS then 40 publishers of comic magazines in support of
Defause Sevings. A further meeting with E committee of
publishers is being arranged for next week, when a plan
for resching children through these comics will be out-
lined in detail.
The Press Section contacted leading representatives
of religious publications of all faiths to discuss means of
furthering the Defense Savings Program through this valuable
medium. A meeting with B group of verious Protestant de-
nominational leaders is scheduled for next week to advance
these Mims, with representatives of all faiths expressing
a desire to help in all ways possible.
Nat releases this week including mailing of the
third set of comics -- Abbie 'n Slats, Silly Milly, Winnie
Will ule and Rube Goldberg -- to all daily newsoapers, along
with the February set of four editorial cartoons.
Payroll Savings clip sheet (cory atteched) WHS
ailed to all newspapers.
Copies of newspaper pages with photographs pro-
oting sale of Defense Bonds and Stangs are atteched.
Regraded Unclassified
240-15
-11-
LABOR PRESS
Members of the Pabor Division and Labor Press
Section met this week with American Federation of Labor
representatives to outline cooperative plans of publicity
in 00 nection with the AFL campaign for $1,000,000,000
Defense Bond goal.
The CIO News cerried a special article, prepared
by Labor Press Section, on Secretary Morgenthad's Detroit
visit.
Publication of Aluminum Workers of America, CIC,
publicized with picture of 8. submarine, their goal to raise
6,000,000 in Defense Ponds. (Copy atteched)
DIRECT MAIL
Total Sales of Defense Bonds through the medium
of Direct Mail, B.S. of January 28, were 18,045,620. The
Second Customer Mailing, to a roster of 894,000 newly
available names, has produced $1,527,926 in 43 days of
pulling.
Regraded Unclassified
TREASURY DEPARTMENT
Me"
INTER OFFICE COMMUNICATION
DATE January 30. 1942
Secretary Morgenthau
TO
FROM
Mr. Kemarck
sunject: of Possible Interest: Some British Military Criticiem
of British War Policy
In connection with the debate in the House of
Commons on mistakes and !nefficiency In the conduct
of the war, it might be of interest to note that
there has been considerable criticism along these
lines from British military circles themselves. This
attack 18 not directed against Churchill. There was
a great deal of criticism in the war of 1914-18 of
Churchill's policy as being too rash, too adventurous
and too much in disregard of official military and
naval advice. This attack did result in Churchill's
losing his post as First Lord of the Admiralty.
Churchill appears, after the war, to have agreed with
this earlier criticism himself. He says in his book,
"The World Crisis", published in 1923: "Looking
back with after-knowledge and increasing years, I
seem to have been too ready to undertake tasks which
were hazardous or even forlorn." (Volume I, P. 348)
In this wer, the criticism runs in the opposite
direction: that the conduct of the wer 18 too much
governed by the slow-moving, conservative and ineffi-
cient military hiererchy. According to 8 British
officer, who worked in the Admiralty in the first year
of this war, almost directly in contact with Churchill
as First Lord of the Admiralty, he said that, in his
experience, Churchill allowed himself to be lulled by
his naval subordinates into a policy of inaction.
This British officer, incidentally, agrees with the
criticism of Churchill's conduct in the last war.
Regraded Unclassified
- 2 -
212
Admiral Sir Roger Keyes told the House of Commons last
November, on leaving his post as the head of the Commandos,
that this force, created primarily for daring offensive, had
been hobbled by the War Office. He stated flatly:
"After fifteen months of directing the
Commandos and having been frustrated in
every worth-while offensive action I tried
to undertake, I most fully endorse the Prime
Minister's contention of the strength of the
negative power which controls the war-making
machine in Whitehall.
"Today we have B. fighting Prime Minister,
but unfortunately he 1s handicapped not only
by the same kind of machine in Whitehall as
existed in the last war, but with an even
greater force apparently with constitutional
power."
Admiral Sir Herbert Richmond makes 8. similar criticism:
"At the beginning of the War the pernicious
catchword was 'Time is on our side'. That delu-
sion was swept away when France capitulated, but
now & new and not less mistaken catchword 18
taking its place, 'the allied resources outweigh
those of the enemy'. The importance of resources
is unquestioned, but he wins who uses them with
foresight, intelligence and vigour. So far there
has been little of these in the direction of the
war. Opportunities have been missed - Trondhjem,
Dakar, Crete and, if Admiral Keyes is right, in
the refussl to make any use of the picked and well
equipped Commando forces. The bravery of the
fighting men at sea, on land and in the air can
do nothing if the hands which direct lack the
qualities needed."
("The Fortnightly", January, 1942)
Regraded Unclassified
243
BRITISH AIR COMMISSION
1785 MASSACHUSETTS AVENUE
WASHINGTON. D.C.
TELEPHONE HOBART 9000
PLEASE QUOTE
REFERENCE NO
With the compliments ol British Air Commission,
who enclose Statement No. 18 - Aircraft Despetched -
for week ended January 27, 1942 - Date: January 29, 1942.
The Hon. Henry Morgenthau, Jr.
Secretary of t.e Treasury
Mashington, D. C.
January 30, 1942.
Regraded Unclassified
244
STATEMENT NO. 18
AIRCRAFT DESPATCHED FROM THE UNITED STATES
DURING WEEK ENDED JANUARY 27, 1942
FLIGHT DELIVERED
TYPE
DESTINATION
ASSEMBLY POINT
BY SEA
BY AIR
FOR USE IN CANADA
CESSNA
T 50
Cenada
12
CONSOLIDATED
Catelins Caneda
1
CURTISS
Kittyhawks
Middle East
Port Suden
39
Canada
14
GLENN MARTIN
Baltimore Middle East Port Suden
24
GRUMMN
Martlett II U.K.
U.K.
5
NORTH AMERICAN
Harvard II Canada
1
Mustang
U.K.
U.K.
42
1
FAIRCHILD
9
U.K.
U.K.
1
VULTEE
Stinston 049
U.K.
U.K.
4
TOTALS
115
28
British Air Commission
Jenuary 29, 1942.
Regraded Unclassified
245
P
Y
SAFE HAND
BRITISH essassy,
WASHINGTON, D.C.,
CONFIDENTIAL
W.T.612/12/42
30th January, 1942.
Dear Mr. Dietrich,
I enclose a copy of a secret memorandum which I have
received from London on the subject of postage stamps. I -
afraid this has taken a long time to reach me owing to A delay
in the mail, and it is probably now rather out of date particu-
larly in view of the action which you have taken under the
Freesing Order. However, I an sending it in case it contains
any new information which is of interest to you.
Some of the information in the memorendum comes from
secret sources and it should therefore be treated with rather
more than ordinary care.
Yours sincerely,
(Sgd) W. Ritchie.
Mr. Frank Dietrich,
Room 279. U.S. Treasury Department,
Washington, D.C.
WR:TMI
Regraded Unclassified
COFT
12/12/42
246
SECRET.
M PORTS 02 POSTAGE SALUS.
GINERAL.
1,
The German authorities have for years controlled the
anternal and internal traffic in vostage stamps with almost
reater severity than the movement of notes, securities,
bills of exchange, cheques and coins. The reason for this
very close attention is that rare stamps afford an easy 01:-
portunity for hoarding and transferring capital without at=
tracting public notice.
2,
Purchases of stamps in Germany by foreignars or for
foreign account officially have been per issible only when
such transactions were paid for in foreign currencies or
"free"marks. The use of registered marks or other mrk
categories has been strictly prohibited. In addition, there
as been a system of export licensing.
3.
Direct purchases and sales - normal business between
dealers has been permitted but, apart from this, recognised
dealers have often been permitted to exchange single stamps,
lots or collections with dealers in other countries. Such
traffic has been subjected to very close and expert supervis-
ion to ensure that no illicit transfer of capital takes place.
THE HOLD MARKET.
:-
There is evidence that many German citizens are buying
stamps se a protection against inflation. In this they are
merely following the practice adopted during and after the
last war, when it WILE found that the possession of postage
stamps WELS a convenient and inconspicuous way of investing
capital with an international value. A recent visitor to
Germany confirmed that foreign stamps were commanding 8 emch
higher price in Germany than in other countries.
Regraded Unclassified
247
- 2 -
5.
There is & report from Genevn that Swies stamp-dealers
are doing a roaring trade with German buyers, and prices have
risen 50 per cent in the last few months. (It is not clear
how this is achieved under existing arrangements but paragraph
16 may provide the answer). The Germans show a particular
interest in complete sets of British Colonialissues because
these have a good international value.
b.
It is significant that on October 4th the Reichswirt-
schaftsminister issued B decree forbidding trade in used or
unused stamps of enemy countries. The order prohibits the
exhibition, offer and sale of such stamps either singly, in
lots or collections.
7.
Special mention was sade in the order of issues of
Great Britain and all her Colonies, Dependencies, Protector-
ates and andates; Australia: India: Indian States: Canada;
New Sealand: South Africa (including South West Africa); Sudari:
Egypt: Irak; and the Soviet Union.
8.
The effect of this order has been to immobilise unch
of the German dealere' capital.
OUTSIDE INTEREST IN GREMAN Issues.
9.
German military victories have resulted in intense
interest in German issues. The philatelist 1B an inveterate
"headline hunter" and will pay high prices for any stamps
which have a "news value".
10. A report from Stockholm shows that there is a special
interest in provisional issues, 1.e. the normal peace-time
issues of overrun countries which have been surcharged to
show that these countries are under military occupation.
THE EXTENT OF OFFICIAL INTER.ST IN EXPORTS.
11,
The key point 1s the extent to which the German Govern-
ment are interested in the export of enemy issues to the out-
side world, and particularly to the Americas. Other and more
scrupulous Governments have shown BO much interest in postage
stamps as a eans of obtaining revenue and foreign exchange
that it seems unlikely that the Nasis have overlooked this
road to easy money.
Regraded Unclassified
248
- 3 -
12. If peace-time activities are a guide to war-time tac-
tics, then the German Government are involved no to the hilt.
Between 1935 and 1939 they issued nearly 100 special issues
over and above those required for ordinary postal needs and
these were mainly for the foreign collectors. The German
postal authorities maintained B. special department to supply
collectors with all current German stamps - or issued under
German auspices - at face value. This is an old dodge in
the philatelic game, and in considering it one must remember
that almost the entire proceeds are profits. As no services
have to be given in return for the sale of the stamps, the
only expenses to offset against receipts are the costs of
printing and material,
13.
There has also been a suggestion tist the Germans are
eliberately issuinz stangs which have certain deformities,
counting upon the fact that collectors will pay higher prices
for thèse "deformities", This is very likely, but bloght 10
no information to confirm it.
14.
It is interesting to note that the iggies of eneur-
occupied territories can be obt ined in ununed condition in
Germany at less than face value. Dere is also evidence the
the Germans have been buying 110 copies of E. FO franc French
strip, recently issued, which bears the ortende of Capacier
(the French air ace of the last mr).
CF
15,
It seems to be generally agreed 07 these who have in-
Vestigated the stamp traffic that the cont prevalent method
of exporting to the Americas is by the LAND service,
Large quantities can be exported without taking up much
space. There 1s also S estion that the čivlon tic bag
is used for the purpose.
16.
Chere 1a information from R. reliable source that the
Commercial Secretariat of the German Legation in Berne are
sending stamps to the Americas by LAT.I.I. on B. large scale.
British Colonial stomps (gee paragraph 5) are their special
interest. It may seem odd that the Gernans should purchase
stamps for the sake of re-selling them, but there ie a simple
explanation of this. A complete set of a certain issue will
raise a higher price than if the stange were sold individually.
This, German dealers may have incomplete sets which CRD be
Increased considerably in salemble value 12 the missing stude
Regraded Unclassified
249
- 4 -
can be purchased. Furthermore, stampe bought in Switzerland
are paid for in Swies francs, whereas they can be sold for
American currencies.
17.
There is also the suggestion that Germany may have
despatched dies to South America and are having German 10-
sues produced locally for collector purposes. There is no
information to support this, but it is a possibility which
cannot be excluded.
THE USE OF hetprals.
15.
Certain neutral dealers are assisting the Germans by
exporting their stamps. This has been proved by intercep-
tions and seizures at Bermuda and Trinidad. Whether they
are acting for the Germans or dealing independently for per-
sonal profit 10 immaterial. Each stamp which is sold outside
Germany represents additional revenue, usually paid in
foreign exchange.
19. The principal dealers are in Switzerland and Liechten-
stein - Staiger of Zurich, Babaeff of Geneva and Stauffenegger
of Vaduz are three of the more prominent. There are also one
or two dealers in Portugal and, in a small way, in Sweden,
SKUGGLING.
20.
It is believed that, apart from LA.T.I., the chief
method of export is to have them smuggled by a member of &
ship's crew. Because they are such small articles - several
bundred can be packed into B. medium-sized envelope - it is
exceedingly difficult to find them. Even if a ship were
combed from top to bottom, it 10 probable that a hoard would
not be discovered. It 10 a battle of wits between the smuggler
and the searcher, with the cards stacked in favour of the
former.
21.
There is reason to believe that many of the Portuguese
ships sailing to New York have "collections" on board, and
that Spanish ships sailing to the Americas are similarly used,
22.
The only clear evidence is that the crews of the Ameri-
can Export Line ships are working with googs of sungglers
operating in Lisbon, and that their activities are on a grand
scale,
23.
There are two gangs at work. One 18 organised by B
Swise named Kubli, assisted by a Belgian journalist L'Ohr and
Regraded Unclassified
250
- 5 -
G. Portuguese, A. Lomelino Lora (known an Tont) of the Inter-
stional rading Corporation, Rossio 93, Lisbon. They work
with three members of the Lxeter crew. John Boning, linen-
Leeper. who is believed to be brains of the trip; harold
.hlers (icnown as "Long Harry"), a deck steward aged 39. who
recently carried a parcel valued at 1,500 dollars and broug t
back the money in notes on the return voyage; and an Irish-
American who has not yet been identified.
24. The second sang is organized by Sulmanis, a dealer in
Lisbon who is known to be in constant communication with
Germany. They work with members of the crew of the Excalibur,
of whom Trank Horning is the leader.
25. According to one report, these two gangs are despatch-
inc unused German stamps, which can be sold at a profit of
500 per cent in the United States.
ASERICAN BUYERS.
26.
The principal buyers are said to be refugees from
Purope, operating in :lew York.
27.
J. & E. Stolow are probably the most prominent offenders.
any consignments to this firm have been seimed at Bermuda
and they are known to be using the service. They
are also receiving many of the stamps amiggled in the American
Axport Line ships.
26.
Other buyers are:-
Eliot 1, alton, Inc., item York.
Agruba, You York.
Schoenbach's Stamp Axchange, -lew York.
Bolaffi, Llew York.
Stamp Export & Import Corp. (President Bela
Sekula), -em York.
Tankel, dem York.
Patoullah, New York
Atlantic Stamp Co., Vew York.
Carl Marks & Co., Inc., Ilem York,
F. 3. Zeitlin, View York,
MONCLUSIONS.
9.
It seems clear that there is an extensive traffic in
meny stamps and that this is operated with the assistance or
the approval of the German Government.
Regraded Unclassified
250
- 5 -
& Portuguese, A. Lomelino Lyra (known as Toni) of the Inter-
national rading Corporation, Rossio 93, Lisbon. They work
with three members of the Exeter crew, John Boning, linen-
keeper, who 1e believed to be brains of the trip: Earold
Ehlers (known as "Long Harry"). a deck steward aged 39. who
recently carried B. parcel valued at 1,500 dollars and brought
back the money in notes on the return voyage; and an Iriab-
American who has not yet been identified.
24. The second gang is organized by Sulmanis, a dealer in
Lisbon who is known to be in constant communication with
Germany. They work with members of the crew of the Excalibur,
of whom Frank Horning is the leader.
25. According to one report, these two cange are despatch-
ing unused German stamps, which can be sold at a profit of
500 per cent in the United States.
ALERICAN BUYERS.
26. The principal buyers are said to be refugees from
Durope, operating in New York.
27. J. & E. Stolow are probably the most prominent offenders.
Lany consignments to this firm have been seized at Bermida
and they are known to be using the LA.T.I. service. They
are also receiving many of the stamps amuggled in the American
Export Line ships.
28.
Other buyers are:-
Eliot 1. "alton, Inc., Sew York,
Agruba, New York.
Schoenbach's Stamp Ixchange, New York,
Bolaffi, New York.
Stamp Export di Import Corp. (Fresident Bela
Sekula), -8W York.
Tankel, New York.
Patoullah, Yes York
Atlantic Stamp Co., New York.
Carl Varice & Co., Inc., New York,
E. 3. Zeitlin, New York,
CONCLUSIONS.
29. enemy stamps and that this is operated with the assistance or
It seems clear that there is an extensive traffic in
the approval of the German Government.
Regraded Unclassified
251
30.
The traffic can be divided into two categories:-
(a) The export of new umised issues in enemy and occupied
territories which are in demand in neutral territor-
ies. This trade can be carried on without any inter-
ference with internal trade because the supply of
stamps is always equal to the demand, although this
does not necessarily mean that sufficient can be ex-
ported to meet the demand;
(b) The export of stamps which have an international value,
In to is category can be included used and unused
stanps of all countries which are rarities or are in
special demand, The British Colonial issues mentioned
in paragraph five are an example. The export of such
stamps would be made from stocks or from purchases
within the European area,
31.
It is possible that as regards (b) there 1s a tug of
war between private and official intereste ingide Germany.
As shown in paragraph four there is B. tendency to hoard
stamps as a protection against inflation, whereas it is in
the official interests to prevent money being invested in
postage stamps which might otherwise be lent to the State.
It is also in German interests to sell these stamps overseas
and so to convert then into foreign exchange.
32.
These facts give added significance to the recent
decree forbidding trade In British stamps. The effects of
this are fairly clear. There will be a certain number of
"black market" dealings, but, in general, dealers will find
that a large part of their capital has been frozen. Probably
the next step will be an official offer to purchase these
stamps and they will then be sold overseas.
33.
The extent of the existing traffic cannot be eati-
mated reliably. It has been suggested that it amounts to
about £5,000,000 per year. and it would be unwise to assume
that this 10 an over-estimate. The stamp trade is always a
flourishing one, and if skilfully exploited it can yield sub-
stantial results.
34.
The fact must be faced that BO far the Germans have
been very successful. Control at Fermuda over peckages sent
through the mails is probably effective, but most of the
trade does not pass through Bermuda, It is also reasonable
to sssume that the Dermane will expand this trade if possible,
and the = acent decree regarding British stamps foreshndows &
drive in a new direction. If this is to be defeated, it in
@ssential that prompt action 1a taken.
Regraded Unclassified
252
- 7 -
35.
As regards the amuggling, there are two ways of try-
ing to check this. The first is to have a careful search at
Bermuda. The second is for action by the United States
authorities. There can be no doubt that the latter would be
the more effective, partly because more time would be available
and partly because there would be greater opportunities for
examining the crews as they tried to go ashore with their
hauls.
GENERAL SECTION,
Neutral Trade Dept. I.
2.2.7.
Copy:ec:2-2-42
Regraded Unclassified
253
.F
PLAIN
London
Dated January 30, 1942
Rec'd 1:45 p.m.
Secretary of State,
Washington.
442, thirtieth
FOR THE SECRETARY OF THE TREASURY FROM CASADAY.
In addition to the daily and weekly press sum-
maries prepared by the British Ministry of Information
end which, at the Ambassador's request, are being for-
warded regularly by air to Washington with one copy
marked for Treasury, attention is now called to a
telegraphic press digest prepared by the Embassy re-
presentative of the Coordinator of Information and
forwarded daily to the NEW York office of the Coor-
dinator of Information and thence by teletype to
its Washington office. The ...mbassador suggests that
this SERVICE likewise may bE of interest to the Seo-
retary of the Treasury as well as to some officials
of the State Department.
WIN..NT
DD
Regraded Unclassified
254
January 30, 1942
Mr. Livesey
Mr. D. V. Bell
will you please send the attached cable from the Secretary of the Treasury
to High Commissioner Sayre, Manila (Fort Mille).
FD:kma 1/29/42
Regraded Unclassified
0
o
P
255
I
DRAFT OF CARE TO 13 TRANSMITTED TO THE KIGH COMMISSIONER OF THE
PHILIPPINE ISLANDS
for Sayse from Secretary of the Treasury.
Reference your No. 30 Jamuary 26th. Account of Philippine Treasury
credited with $23,000,000 during the period November 27th through
December 24th, including last credit of $10,500,000 based on radio No.
10. December 23, from Queson. Apparantly Treasury has reimbursed
Philippine Treasury for substantial amount of checks now in your
custedy. Please furnish separately total amount of payments, receipts
and deposite for restoration of balance shown in the account Treasurer
of United States with Philippine Treasury subsequent to transcript of
account of November 25th, the last received by Treasury. Upon receipt
of such information consideration will be given to further credits to
account of Philippine Treasury if it can be determined that it is
entitled to further credit. Can it be accertained from information
available to you whether cheeks is your custedy are included in total
payments in account of Treasurer of United States referred to above.
Willialb 1-29-42
Copyree:1-30-42
Regraded Unclassified
256
TELEGRAM SENT
MEV
January 30, 1942
This telagram must bE
paraphrased before being
4 pame
communicated to anyone
other than a Governmental
agency. (BR)
UNITED STATES HIGH COMMISSIONER,
MANILA (FORT MILLS, PHILIPPINE ISLANDS)
18
For Sayre from Secretary of the Treasury.
Your 30 January 26, 10 a.m. Account of
Philippine Treasury credited with $23,000,000
during the period November 27th through December
24th, including last credit of $10,500,000 based
on radio no. 10 December 23, from Quezon. Apparently
Treasury has reimbursed Philippine Treasury for sub-
stantial amount of checks now in your custody. Please
furnish stparattly total amount of payments, receipts
and deposits for restoration of balance shown in the
account Treasurer of United States with Philippine
Treasury substquent to transcript of account of
November 25th, the last received by Treasury. Upon
receipt of such information consideration will be
given to further credits to account of Philippine
Treasury if it can be determined that it is entitled
to further credit. Can it be ascertained from infor-
metion available to you whether checks in your custody
art included
Regraded Unclassified
257
-2- #18, January 30, 4 p.m., to Manila.
are included in total payments in account of
Treasurer of United States referred to above?
HULL
(FL)
FD:FL:BMcB
Regraded Unclassified
Date
19
To:
Miss Chauncey
For your files.
MR. WHITE
Branch 2058 - Room 214
259
JW
Buenos Aires
This telegram must bE
paraphrased before being
Dated January 30, 1942
communicated to anyone
other than a Governmental
Rec'd 6 p.m.
agency. (br)
Scoretary of State,
Washington.
182, January 30, 6 0.00
Referring to the 110 million dollar loan
credit for Argentina arranged with the Treasury
Department and the Export-Import Bank in December
1940 official statistics published here yesterday
indicate that Argentine in 1941 had en aggregate
positive trade balance of 187 million praos RB
compared with n negative balance of 71 million pt808
in 1940 and had A positive belance with the United
States (ellowing for Estimated differences between
"teriff values" and "real values") of roughly 175
million pesos P8 contrasted with e substantial negative
balance for 1941 enticipated at the time of the
financial conversetions in 1940. As the official
export figures Are understimpted the true trade
bolance with the United States wee probably pt least
250 million DEBOS.
It is believed the above may bE of interest
to Worren
Regraded Unclassified
260
-2- #182, January 30, 6 p.m. from Buenos Aires.
to Warren Pierson in ViEW of talks I had with him
at Rio de Janeiro. HE and the Secretary of the
Treasury may also wish to consider what would bE
their position in the EVENT that Congress when it
meets should approve the loan credit.
ARMOUR
KLP
201
February 4, 1942
Secretary Morgenthau
Mr. White
In connection with our Stabilization Agreement with
Argentina - as yet unretified - you may be interested in the
attached cable.
Ambassador Armour reports in the cable that Argentina's
total trade balance in 1941 showed an excess of exports of
167,000,000 pesos compared with an excess of imports of
71,000,000 pesos in 1940. The excess of exports with United
States will probably be officially reported at 175,000,000
pesos in 1941 (actually possibly as much A6 250,000,000 pesos)
contrasted with Argentine predictions of excess of imports
during the negotiations in 1940.
Ambassador Armour suggests that these data may De
interesting should the Argentine Congress approve our Stabili-
zation Agreement at its forthcoming session.
A5:dm:2/4/42
Regraded Unclassified
262
CABLE
From: Lisbon
Dated: January 30, 1942
Rec'd: January 31, 1942
Federal Reserve Bank of New York,
New York.
#5
In order strengthen our gold reserve request you
obtain license and convert $10,000,000 into gold to be
held by you earmarked our account. You will receive
Bank Manhattan New York $7,000,000. Please cable exe-
cution.
(Signed) Banco de Portugal.
(Received by telephone from Federal Reserve Bank, New
York, 11:00 a.m., 1-31-42)
ec
Regraded Unclassified
TREASURY DEPARTMENT
263
INTER-OFFICE COMMUNICATION
Chauncey
DATE January 30, 1942
TO
Secretary Morgenthau
FOR
FROM Mr. Dietrich
CONFIDENTIAL
Registered sterling transactions of the reporting banks were as follows:
Sold to commercial concerns
£39,000
Purchased from commercial concerns £12,000
Open market sterling remained at 4.03-3/4. with no reported transactions.
For account of the Central Bank of China, the Federal Reserve Bank of
New York purchased £200,000 from the Bank of England at 4.03-1/2.
The Canadian dollar discount narrowed to 11-5/8% at the close, compared
with 11-7/8% yesterday.
The Cuban peso, which had been quoted at par until January 28 and at a
premium of 1/16% thereafter, advanced to 1/4% premium today.
In New York, closing quotations for the foreign currencies listed below
were as follows:
Argentine peso (free)
.2360
Brasilian milreis (free)
.0516
Colombian peso
.5775
Mexican peso
.2065
Uruguayan peso (free)
.5250
Venezuelan bolivar
.2720
There were no gold transactions consummated by us today.
No new gold engagements were reported.
In London, spot and forward silver remained at 23-1/2d and 23-9/16d
respectively, equivalent to 42.67$ and 42.78$.
The Treasury's purchase price for foreign silver was unchanged at 35#.
Handy and Harman's settlement price for foreign silver was also unchanged at
35-1/8#.
We made no purchases of silver today.
AD
RESTRICTED
264
G-2/2657-220: No. 616 M.I.D., W.D. 11:00 A.M., January 30, 1942.
SITUATION REPORT
I. Pacific Theater.
Philippines: There was light fighting all along our lines
yesterday, with enemy air activity negligible. Activity in Mindanao
is limited to patrolling. In the Visayans there is no change. Hawaii:
No further reports of hostile activity. Malaya: Official communiques
report Japanese advances on the east coast and in the center. No
change on the west. Air action continues over Singapore. Burma:
Properations for an attack on Moulmein continue. Air action over
Bangoon is reported on EL reduced scale, Australasia: No further re-
ports have been received on the progress of the Japanese convoy in the
Macasuar Straits. It is believed, however, that that force is still
being subjected to heavy Dutch and American air and sea bombardment.
Aerial activity by both sides continues, but there is no important
change in the general situation throughout this area. West Coast: No
further reports of enemy activity.
II. Eastern Theater.
Ground: Both sides report continuous fighting in spite of
deep snow and severe cold. The Germans report defensive fighting in
the Donets area. The Russians claim to have captured Barvenkova and
Losovaya (75 miles south of Kharkov).
III. Western Theater.
No activity of importance has been reported.
IV. Middle Eastern Theater.
Ground: British Middle East Headquarters announced the
capture of Benghazi by Axis forces January 30. Press reports indicate
the British forces south of Benghazi were forced to retire from the
city, The main Axis effort was northward along the coastal plain
coordinated with a flanking attack northwest out of Zt, Lisus. This
flank attack succeeded in cutting the road north of Benghazi and the
status of British forces in this area is somewhat obscure. An Axis
screening force is in operation east and northeast of 2t. Usus, Minor
actions are reported from this area.
Air: Valta is still under Axis air bombardment. Present
aerial activity in North Africa is largely confined to attacks on rear
areas and supply lines.
RESTRICTED
Regraded Unclassified
265
January 31, 1942
9:07 a.m.
HMJr:
Yes, Bill.
Colonel
Donovan:
I've followed all that through. Now I'll give
you something in writing, or I'll give you my
reaction right off.
HMJr:
I'd rather have your reaction.
D:
My reaction is that while weaknesses - the 1m-
portant weaknesses can be cured by help.
HMJr:
I see. Financial?
D:
Of any kind.
HMJr:
Of any kind. I see.
D:
And even though it's 80 important - you see,
they're containing a greater force up there than
are being used below.
HMJr:
I see.
D:
And even if it weren't for this, it's got to be
taken, that's my judgment.
HMJr:
Yeah. And you think it's.....
D:
And I think that would - it's particularly important
because Burma will probably be lost.
HMJr:
Or closed.
D:
Yes.
HMJr:
To Rangoon.
D:
That's right.
HM,Jr:
Right. Well, that's all -- I don't need any more.
D:
All right.
HM,Jr:
Very much obliged.
D:
All right, Henry.
266
January 31, 1942,
MEMORANDUM FOR THE SECRETARY'S FILES
Conference in Mr. White's Office
January 31, 1942
9:30 A. M.
Present: Mr. White
Dr. Soong
Dr. Soong called on Mr. White at Dr. Soong's request.
Dr. Soong said that he would like to have Mr. White inform the
Secretary of his conversation with the President on Friday, January 30.
The Ambassador and Dr. Soong had arranged through the State
Department for a conference with the President. Dr. Soong said he
had wished to take up two points with the President, as follows:
1. To make a plea for greater participation by the Chinese Gov-
ernment in the Committee (presumably British and the United States)
now deciding the distribution of war materials as among the various
countries. He said that he appreciated the fact that they could not
have an important say in this distribution, but that they would like
to have their relationship to the problem formalized 50 that China's
point of view could be assured of an adequate hearing. Soong did not
indicate what the President's reply to his request was.
2, The second point he took up with the President was that of
providing means of transportation by air line between India and China.
He said if they could get 100 planes like the Douglas transport planes
(but without the seats and other unnecessary equipment) they would be
able to transport 12,000 tons of freight each month between Kunming
and Sodiya, after allowing for enough gasoline to carry planes both
ways. They had been promised 35 such planes during 1942. Soong was
pressing for 100 such planes quickly, inasmuch es they feared that the
Burma Road would be interrupted. He said that Rangoon was now closed
by enemy submarines, for how long he did not know.
The President seemed favorable to the idea and told Soong to take
it up with Hopkins and some others. The President thought some planes
could be taken off the present commercial lines for the purpose.
Regraded Unclassified
267
- 2 -
Dr. Soong said that he had not intended to speak to the
President of the loan because his understanding with Secretary
Morgenthau was that they were to await Mr. Fox. However, while he
was talking with the President, Secretary Hull telephoned to the
President about something relating to space in the Japanese Embassy
and according to Dr. Soong, the President asked Hull about the
Chinese loan. Soong gathered from the President's subsequent re-
marks that Hull said they were going to take the matter up with
him at the cabinet meeting and that it might be done through legis-
lation. Dr. Soong remarked to the President that it might take too
long to have the loan arranged if it were to be done by a Congres-
sional Act and thought it might be done more quickly through Lend-
Lease arrangements. The President said they would see.
Mr. White asked Mr. Soong whether he still thought that con-
sideration of the loan could wait for Fox's return. Mr. Soong said,
"No, in view of the delay in Fox's arrival, and at the rate things
are going in Malaya, Singapore might fall soon and it would be un-
fortunate if it fell before monetary arrangements were completed."
He thought it would be a great help if both the monetary arrangements
and the Planes they were asking for could be announced soon and
simultaneously.
Regraded Unclassified
268
January 31, 1942
10:04 a.m.
HM, Jr:
Harry.
Mr. Harry
Hopkins:
How are you?
HM,Jr:
I missed you last night.
H:
Well, I am sorry, but, by God, along about 5
o'clock I kicked up a devil of a fever
HM,Jr:
So I only heard
H:
But this morning I feel fine again.
HM,Jr:
You do?
H:
Yeah. I took some medicine and went to sleep.
My fever is all gone.
HM,Jr:
Good for you.
H:
I think I got a little cold.
HM,Jr:
Oh, that's too bad!
in
Hen
HM,Jr
Yes, sir.
H:
There's organized in town here ...
HM,Jr:
Yeah.
H:
...
you know, when Churchill was here, the joint
staffs ....
HM,Jr:
Yeah.
H:
and they are going to have three or four
very important sub-committees.
HM,Jr:
Yeah.
H:
And the work of those things is going to be
extremely important during the war.
Regraded Unclassified
269
- 2 -
HM,Jr:
Yes.
H:
Now, they ought to have a place to work where
they've got real security
HM,Jr:
Yeah.
H:
.....and where nobody can get in the building
and nobody else is there.
HM,Jr:
Yeah.
H:
Now, I, of course, as usual, have some bright
ideas. And the War Department Marshall called
me up about it, and I thought of the Federal
Reserve Building.
HM,Jr:
Yeah.
H:
And I called up Marriner.
HM,Jr:
Yeah.
H:
And Marriner gave me, of course, a long song and
dance about what he was doing for the Army and
for you, all of which I know nothing about.
HM,Jr:
Yeah.
H:
And it may be perfectly true.
HM,Jr:
Yeah.
H:
But I wonder if you could give me any hint as
to whether you think that should be followed up
or not, or should we let it drop. He promptly
came back and offered us a couple of rooms and
twenty office rooms, but that won't do the trick.
HM,Jr:
Well, the President, at Cabinet yesterday, told
them that he had turned over to them the Public
Health Building.
H:
He did?
HM,Jr:
Yeah.
H:
Well, that's just as good, of course.
270
- 3 -
HM,Jr:
He told Paul McNutt then and there that they
could move in at once.
H:
Uh huh.
HM,Jr:
To Public Health.
H:
You mean this joint staff?
HM,Jr:
Yeah.
H:
He had the two buildings in mind.
HM,Jr:
Well, he said the Joint staff could have the
Public Health Building here, and that they
could move out temporarily to Bethesda.
H:
Uh huh.
HM,Jr:
So Paul McNutt said, "How?" He said, "Well, see
McIntyre."
H:
(Laughs)
HM,Jr:
So McNutt, who's smart, says, "But Mr, President,
you've already spoken to McIntyre."
H:
Yeah.
HM,Jr:
But the President told him that he would have to
vacate at once.
H:
Good.
HM,Jr:
So I think that takes care of you.
H:
Yeah. What do you think.....
HM,Jr:
What?
H:
What do you think about the Federal Reserve. Do
you think they'll last here? Throughout the war?
HM,Jr:
Is it going to last?
W:
Well, I mean do you think they can hold onto that
building with the.....
271
- 4 -
HM,Jr:
I don't know.
H:
.....with the pressures that will be around here.
HM,Jr:
I don't know. They - I'd like to turn that over
in my mind.
H:
All right.
HM,Jr:
Because.....
H:
There's no hurry about it at all, because what I
wanted was a building for this.
HM,Jr:
Well, I.....
H:
And I thought about those two buildings.
HM,Jr:
Well, as of yesterday, you have those buildings.
H:
Wonderful, because that Public Health Service is
a damn nice building.
HM,Jr:
Yes, it 18.
H:
Yeah.
HM,Jr:
And you can protect it.
H:
Yeah. All right, old boy.
HM,Jr:
Okay. Now, take care of yourself.
H:
I'm going to.
HM,Jr:
Thank you.
H:
Good-bye, Henry.
272
January 31, 1942.
FOR THE SECRETARY'S FILES
Conference in Secretary Morgenthau's Office
January 31, 1942
10:30 A.V.
How
Present: Secretary Morgenthau
Secretary Jones
Dr. Viner
Mr. White
(10. Foley was later
called in.)
Mr. Jones said that be would like to know about the Chinese "TO-
nosal now being considered. The Secretary asked him whet he would like
to know about it and Jones reclied that all be knew of it was what he
heard at the Cabinet meeting on January 30. Secretary Morgenthau then
stated the State Department and Treasury Department had been working
for more than a month on the proposal and recounted very briefly the
nevelopments during the past month up to the time of the Cabinet meet-
the The Secretary gave Jones el copy of the letter which he had sent
to Secretary Hell on Thursday and which he said would give the gist of
the points to be discussed. Jones read the letter carefully and Asked
whether there was agreement that aid should be given. Secretary
mrgenthau told him that he had talked with Stirson end Marshall and
tomy felt it was important to give China financial aid, es did the
President and Secretary Pull. The Secretary then showed Mr. Jones B.
draft of the suggested joint resolution and seid the Treasury thought
that might be adequate along with a brief letter from the President.
he also gave Secretary Jones a copy of the draft of FL message which
the State Department had prepared.
The Secretary commented that the draft wes probably too long.
Secretary Jones agreed and Selt that the joint resolution accompanied
by a brief letter would be adequate.
Secretary Jones said be had but one suggestion to make in the draft
of the resolution and that was to substitute "Secretary of Treasury with
LOVE shruoval of the President is hereby authorized" for the phrase
"the President is authorized". He said it would give more protection
to the President and "take the neat off him". The change would make
it necessary for the Chinese to come to the Secretary of the Treasury
rather than to the President for terms, funds, etc. Secretary Morgenthau
acquiesced. Secretary Morgenthau stated that it should be clear that
the request for financial assistance by China of this amount was justi-
fied only on political and military grounds.
Regraded Unclassified
273
- 2 -
The Secretary asked Jones what he thought the next step should
be and Jones said that they should get Hull to agree to the resolu-
tion and then submit it to the President. Jones thought that there
wouldn't be any trouble in Congress in securing passage of the Bill.
Secretary Hull was telephoned and Mr. Jones explained to him
over the phone that he (Jones) agreed with Secretary Morgenthau's con-
clusion that the loan had best be asked of Congress and in the form
indicated in the resolution. He also explained to Secretary Hull the
change he (Jones) would like to make in the wording, substituting
"Secretary of the Treasury with the approval of the President" for
"the President". Secretary Hull agreed with the change and with the
resolution. In the conversation it was agreed that they would try
to see the President as soon as possible to obtain his approval.
It was decided that in the meantime Mr. Jones would get a let-
ter from Secretary Hull to the President, setting forth his (Hull's)
reasons why he feels financial aid should be given at this time; while
Secretary Morgenthau was to draft letters from Secretary Knox and
Secretary Stimson to the President setting forth their reasons why
they l'avored financial aid to China now, and also prepare a draft of
E letter from the President to the Speaker of the House and of the
Senate which would accompany the resolution.
An hour or so later the Secretary and Secretary Jones saw the
President. The Secretary hed with him 8 preliminary draft of a letter
which was to accompany the resolution. The President approved the
resolution and changed a few words in the letter and approved the
letter.
Drafts of letters for Secretary Stimson and Secretary Knox were
also prepared and sent to each of them (Stimson was in New York end
Kriox was in North Carolina) to obtain their signatures. They signed
the letters and they were returned by Monday morning.
Regraded Unclassified
[²ᵃ
274
Nell
1/31'42
This is a photostat of
JR given to Secretary yesterday
with handwritten notations and
changes by J.H.Jones.
This is your copy. Doas it
take care of what you had T in mind?
FM
MR. FOLEY
Regraded Unclassified
1/30/48
275
% - IT Lift Valied
later 10 to
Tm
valiantly
-
mossity
to
at
the
defense
1:00 States: Therefore (€
WI the letives the
upon
afted States in Longress ADde 0166, resident
authorized, or: behalf of the (Lee is loan
Lane credit or live other KIK to in an
cot to exceed in the appropate 1500,000,000 at such
JP times and upon such terms and conditions LS the
filedt shall does in the interest of the United States.
n the Teasury with R upproval of the
See. 2. The authority herein granted shall be in
Stlon to any other authority provided by law.
Sec. 3. There is hereby appropriated out of any money
the Treasury not otherwise appropriated, such sus or sugs
to exceed 1500,000,000 as may be necessary to carry out
provisions of this Joint Resolution.
2:30 11W; BB: SS/ mp 1/30/42
HDW
Regraded Unclassified
Responsible officials, both of this Government and of the
overnment of China, have brought to my attention the existence
of urgent need for the immediate extension to China of economic
and financial assistance, going beyond in amount and different
in form from such aid 88 Congress has already authorized. I be-
lieve that such additional assistance would serve to strengthen
China's position as regards both her internal economy and her
with grint molitary
espacity in general to function
in our common effort.
I urge, therefore, the passage by Congress of appropriate
legislation to this effect and attach therewith suggested draft
of a joint resolution which would accomplish this purpose.
Regraded Unclassified
JOINT RESOLUTION
277
To authorize the President of the United
States to render financial aid to China,
and for other purposes.
WHEREAS China has for more than four years valiantly
resisted the forces of Japanese aggression; and
WHEREAS financial and economic aid to China will
increase her ability to oppose the forces of aggression; and
WHEREAS the defense of China is vital to the defense
of the United States: Therefore be it
Resolved by the Senate and House of Representatives
of the United States in Congress assembled, That the
Secretary of the Treasury with the approval of the President
is hereby authorized, on behalf of the United States, to loan
or extend credit or give other financial aid to China in an
amount not to exceed in the aggregate $500,000,000 at such
time or times and upon such terms and conditions as the
Secretary of the Treasury with the approval of the President
shall deem in the interest of the United States.
Sec. 2. The authority herein granted shall be in
to any other authority provided by law.
Sec. 3. There is hereby appropriated out of any money
in the Treasury not otherwise appropriated, such sum or sums
not to exceed $500,000,000 as may be necessary to carry out
the provisions of this Joint Resolution.
Regraded Unclassified
278
Letters prepared but not submitted to the
sident for signature.
Regraded Unclassified
January 31, 1942
My dear Mr. Speaker:
Responsible officials, both of this Government
and of the Government of China, have brought to my
attention the existence of urgent need for the immediate
extension to China of economic and financial assistance,
going beyond in amount and different in form from such
aid as Congress has already authorized. I believe that
such additional assistance would substantially strengthen
China's position as regards both her internal economy and
her capacity in general to function effectively as an
ally with us in our common effort.
I urge most strongly, therefore, the immediate
consideration by Congress of appropriate legislation
to this effect and attach hereto B. suggested draft of
& joint resolution which would accomplish this purpose.
Yours sincerely,
The Honorable,
The Speaker of the House of Regresentatives.
Regraded Unclassified
Responsible officials, both of this Government and of the
Government of China, have brought to my attention the existence
of urgent need for the immediate extension to China of economic
and financial assistance, going beyond in amount and different
in form from such aid as Congress has already authorised. I be-
lieve that such additional assistance would serve to strengthen
China's posi on an regards both her internal economy and her
conscity in general to function effectively as an ally with us
in our common effort.
with
coundainton
I urge, therefore, the passage by Congress of appropriate
legialation to this effect and attach (herewith suggested draft
of 8 joint resolution which would accomplish this purpose.
Regraded Unclassified
281
JOINT RESOLUTION
To authorise the President of the United
States to render financial aid to China,
and for other purposes.
WHEREAS China has for more than four years valiantly
resisted the forces of Japanese aggression; and
WHEREAS financial and economic aid to China will
increase her ability to oppose the forces of aggression; and
WHEREAS the defense of China is vital to the defense
of the United States: Therefore be it
Resolved by the Senate and House of Representatives
of the United States in Congress assembled, That the
Secretary of the Treasury with the approval of the President
is hereby authorized, on behalf of the United States, to loan
or extend credit or give other financial aid to China in an
amount not to exceed in the aggregate $500,000,000 at such
time or times and upon such terms and conditions as the
Secretary of the Treasury with the approval of the President
shall deem in the interest of the United States.
Sec. 2. The authority herein granted shall be in
addition to any other authority provided by law.
Sec. 3. There is hereby appropriated out of any money
in the Treasury not otherwise appropriated, such sum or sums
not to exceed $500,000,000 as may be necessary to carry out
the provisions of this Joint Resolution.
282
Copies to Secy hull and Secretary Jones
( *e delivered by messenger. Copies to
Secretary Stimson and Secretary Knox were
handed to Dr. White who will see Asst. Secy
Patterson this afternoon and will enclose
Secretary Knox' copy in & letter which is
being transmitted to Secy Knox today.
Regraded Unclassified
283
January 31, 1942
FROM: T.E SECRETARY OF THE TREASURY
TO:
THE SECRETARY OF NAVY
For his information.
Regraded Unclassified
284
January 31, 1942
FROM: THE SECRETARY OF THE TREASURY
TO:
THE SECRETARY OF WAR
For his information.
285
January 31, 1942
FROM: The Secretary of the Treasury
TO:
The Secretary of State
For his information.
286
January 31, 1942
FROM: THE SECRETARY OF THE TREASURY
TO:
SECRETARY JONES
For his information.
237
January 31, 1942
dear "r. Vice President:
Res onsible officials both of this Govern-
went and of the Government of China, have brought
to my attention the existence of urgent need for
the imediate extension to China of oconomic
ená financial assistance, coint beyond in amount
and different in form from such aid as Congress
has already authorized. I believe that such ad-
ditional assistance would serve to strengthen
China's position U.S. regards both l.or Internal
economy and her capacity in general to function
with reat military effectiveness in our common
effort.
I urge, therefore, the passage by Con, ress of
appropriate Islation to this effect and attach
hereto Il suggested draft of 8 joint resolution which
would accomplish this purpose.
Sincerely yours,
The Monorable,
"the Vice President of the Enited itates.
Regraded Unclassified
288
January 31, 1942
My dear Mr. Speaker:
Responsible officials both of this Govern-
ment end of the Government of China, have brought
to my attention the existence of urgent need for
the immodiate extension to China of economic
and financial assistance, going beyond in amount
and different in form from such aid as Congress
has already authorized. I believe that such ad-
ditional assistance would serve to strengthen
China's position as regards both her internal
economy and her capacity in general to function
with great military effectiveness in our common
effort.
I urge, therefore, the passage by Congress of
appropriate legislation to this effect and attach
hereto a suggested draft of & joint resolution which
would accomplish this purpose.
Sincerely yours,
The Honorable,
The Speaker of the House of Representatives.
Regraded Unclassified
289
JOINT RESOLUTION
OK
To authorize the President of the United
States to render financial aid to China,
and for other purposes.
WHEREAS China has for more than four years valiantly
resisted the forces of Japanese aggression; and
WHEREAS financial and economic aid to China will
increase ner ability to oppose the forces of aggression; and
WHEREAS the defense of China is vital to the defense
of the United States: Therefore be it
Resolved by the Senate and House of Representatives
of the United States in Congress assembled, That the
Secretary of the Treasury with the approval of the President
is hereby authorized, on behalf of the United States, to loan
or extend credit or give other financial aid to China in an
amount not to exceed in the aggregate $500,000,000 at such
time or times and upon such terms and conditions as the
Secretary of the Treasury with the approval of the President
shall deem in the interest of the United States.
Sec. 2. The authority herein granted shall be in
sittion to any other authority provided by law.
Jeo. 3. There is hereby appropriated out of any money
in the .reasury not otherwise appropriated, such sum or sums
1102 to exceed $500,000,000 as may be necessary to carry out
the provisions of this Joint Resolution.
Regraded Unclassified
290
DEPARTMENT OF STATE
WASHINGTON
January 31, 1942
Dear Mr. President:
= refer to Generalissimo Chiang Kai-Shek's request
for an Immediate credit to China of $500,000,000 to
assist him in China's prosecution of the war.
China is now in her fifth year of war against
aggression and has had to draw very heavily upon her
own resources. Certain loans have been made to China
through the Federal Loan Agency, mostly in connection
with the purchase of strategic materials. These loans
have been used to buy supplies in this country, but
China now needs cash to be used within, or from within,
Its own borders, and I strongly recommend that you ask
Congress to authorize loans, or credits, or both, to
China up to $500,000,000. The brillient resistance to
aggression which the Chinese have made and are making,
and their contribution to the common cause, deserve the
fullest support we can give.
Sincerely yours,
The President,
The White House.
Correshiel
Regraded Unclassified
THE SECRETARY OF THE NAVY
WASHINGTON
January 31, 1942
Yy dear Mr. President:
I refer to the urgent request which this
Government has received from Generalissimo Chiang
Kai-shek to help him, by financial assistance, to
meintain more effectively the morale of the
Chinese people. Recent military developments in
the Pacific and difficult economic and financial
conditions in China have made necessary remedial
action of A substantial character.
The military operations which the armies of
China under the Generalissimo are carrying on and
are plenning to carry on are of extreme importance
to us. It would be very unfortunate if we were to
overlook any possibility of checking the impair-
ment of China's morale resulting from the growing
internal difficulties in China. I am convinced
that the financial assistance which the General-
issimo has requested would make en effective con-
tribution to the maintenance of China's morale and
military strength.
I strongly recommend, therefore, that we should
grant the Generaliasimo's request without delay.
Faithfully,
Jeankstnon
The President,
The White House,
Regraded Unclassified
January 31, 1942
zy dear Mr. President:
I refer to the urgent request which this
Government has received from Generalissimo Chiang
tal-shek to help his, by financial assistance, so
maintain more effectively the morale of the
Chinese people. Recent military developments in
the Pacific and difficult coonomic and financial
conditions in China have made necessary remedial
action of a substantial character.
The military operations which the armies of
China under the Generalissimo are earrying on and
are planning to carry on are of extrems importance
to us, It would be very unfortunate if 10 pere to
overlook any possibility of checking the Impair-
ment of Chine's morale resulting from the growing
internal difficultive in China. I an convinced
that the financial assistance which the General-
issimo has requested would auxe an effective con-
tricution to the asistenance of China's morale and
military strength.
I strongly recommend, therefore, that 00 should
grant the Generalissimo's request without delay.
Faithfully,
n Frank Knox
The President,
The thise Bouse.
HDR:JV16P 1/31/42
Regraded Unclassified
WAR DEPARTMENT
WASHINGTON
January 31st, 1942.
Xs
lear Mr. President:
The confidential information which has been
coming to me during the past few weeks indicates that
the difficult economic And financial situation within
China is impairing her military effort.
Our information indicates further that sub-
stantial financial aid must be given to China quickly
if we are to have assurance that recent and prospective
military developments will not too seriously weaken the
morale of the Chinese people.
Any substantial financial help that can be
given to China at this time can not but help strengthen
her striking power.
I therefore urge for your consideration that
the financial assistance which I am informed the
Generalissimo is requesting be granted expeditiously.
Faithfully,
<
The President,
The White House.
Regraded Unclassified
January 31st, 1942.
My NBAT Mr. President:
The confidential information which has been
coming to me during the past few weeks indicates Wint
the difflcult economic and financial situation within
Chine La impairing her military effort.
Our information indicates further that sub-
stantial financial aid must be given to China puickly
1." we are to have ascurance that recent and prospective
military developments vili not too seriously weaken the
morale of the Chinese poople.
Any substantial financial help that can be
given to China at this time ONE not but help strengthen
her striking power.
I therefore urge for your consideration that
the financial assistance which 1 am informed the
Cenerali:simo is reduesting be granted exceditiously.
Faithfully,
(Sig) Hanry h Shurson
The President,
The White House.
o.K.
R.P.P.
Regraded Unclassified
2015
suggested Draft.
My dear Mr. President:
The confidential information which has been
coming to ne during the past few weeks indicates
that the difficult economic and financial situation
within China is impairing her military effort.
Our information indicates further that sub-
stantial financial aid must be given to China quickly
if we are to have assurance that recent and prospec-
tive military developments will not too seriously
weaken the morale of the Chinese people.
Any substantial financial help that can be
iven to China at this time can not but help
strengthen her striking power.
I therefore urge for your consideration that
the finencial assistance which I an informed the
Coneralissimo is requesting be granted expeditiously.
Faithfully,
s/Henry L Stemson
The President,
The Muite House.
MD#1JV:69
1/31/42
Regraded Unclassified
1/51/42-
JOINT RESOLUTION
296
To authorize the President of the
United States to render financial
aid to China, and for other purposes.
WHEREAS China has for more than four years valiantly
resisted the forces of Japanese aggression; and
WHEREAS financial and economic aid to China will
increase her ability to oppose the forces of aggression; and
WHEREAS the defense of China is vital to the defense
of the United States: Therefore be it
Resolved by the Senate and House of Representatives
of the United States in Congress assembled, That the
Secretary of the Treasury with the approval of the President
is hereby authorized, on behalf of the United States, to loan
or extend credit or give other financial sid to China in an
amount not to exceed in the aggregate $500,000,000 at such
time or times and upon such terms and conditions as the
Secretary of the Treasury with the approval of the President
shell deem in the interest of the United States.
Sec. 2. The authority herein granted shall be in
addition to any other authority provided by law.
Sec. 3. There is hereby appropriated out of any money
in the Treasury not otherwise appropriated, such sum or sums
not to exceed $500,000,000 as may be necessary to carry out
the provisions of this Joint Resolution.
Regraded Unclassified
297
THE WHITE HOUSE
WASHINGTON
January 31, 1942
ity dear Mr. Vice President:
Res onsible officials both of this Govern-
Lent and of the Government of China, have brought
to my attention the existence of urgent need for
the immediate extension to China of economic
and financial assistance, going beyond in amount
and different in form from such aid as Congress
has already authorized. I believe that such ad-
ditional assistance would serve to strengthen
China's position as regards both her internal
economy and her capacity in general to function
with great military effectiveness in our common
effort.
I urge, therefore, the passage by Congress of
appropriate legislation to this effect and attach
hereto & suggested draft of a joint resolution which
would accomplish this purpose.
Sincerely yours,
Juseah
The Honorable,
The Vice President of the United States.
Regraded Unclassified
298
THE WHITE HOUSE
WASHINGTON
January 31, 1942
My dear Mr. Speaker:
Responsible officials both of this Govern-
ment and of the Government of China, have brought
to my attention the existence of urgent need for
the immediate extension to China of economic
and financial assistance, going beyond in amount
and different in form from such aid as Congress
has already authorized. I believe that such ad-
ditional assistance would serve to strengthen
China's position as regards both her internal
economy and her capacity in general to function
with great military effectiveness in our common
effort.
I urge, therefore, the passage by Congress of
appropriate legislation to this effect and attach
hereto a suggested draft of a joint resolution which
would accomplish this purpose.
Sincerely yours,
finalding Minewel
The Honorable,
The Speaker of the House of Representatives.
299
1/31/43
Secretary Jones' suggested revision
(first line of third WHEREAS)
Regraded Unclassified
JOINT RESOLUTION
To authorise the President of the inited
States to render financial aid to China,
and for other purposes.
China has for more than four years valiantly
resisted the forces of Japanese aggression; and
-1.2.20 financial and economic aid to Shina will
increase her ability to oppose the forces of aggression; and
MEMITAS the defense of China is of vital importance:
Therefore be it
Resolved by the Senate and House of Representatives
of the United States in Congress assembled, That the
Secretary of the Treasury with the approval of the President
is hereby authorized, on bohalf of the nited States, to loan
or extend credit or give other financial aid to China in an
amount not to exceed in the aggregate $500,000,000 at such
time or times and upon such terms and conditions as the
Secretary of the Treasury with the approval of the President
shell desn in the interest of the inited States.
Sec. 2. The authority herein granted shall be In
addition to any other authority provided by law.
Sec. 3. There is hereby appropriated out of any money
In the Treasury not otherwise appropriated, such sum or -
not to exceed $500,000,000 as may be necessary to carry out
the provisions of this Joint Resolution.
Regraded Unclassified
photoctat from attached
1/31/47.
JOINT RESOLUTION
201
To authorize the President of the
United States to render financial
aid to China, and for other purposes.
WHEREAS China has for more than four years valiantly
resisted the forces of Japanese aggression; and
WHEREAS financial and economic aid to China will increase
ner ability to oppose the forces of aggression; and
WHEREAS the defense of China is of the greatest possible
importance: Therefore be it
Resolved by the Senate and House of Representatives
of the United States in Congress assembled, That the Secretary
of the Treasury with the approval of the President is hereby
authorized, on behalf of the United States, to loan or extend
credit or give other financial aid to China in an amount not
to exceed in the aggregate $500,000,000 at such time or
times and upon such terms and conditions as the Secretary of
the Treasury with the approval of the President shall deem
in the interest of the United States.
Sec. 2. The authority herein granted shall be in
addition to any other authority provided by law.
Sec. 3. There is hereby appropriated out of any money
in the Treasury not otherwise appropriated, such sum or sums
not to exceed $500,000,000 as may be necessary to carry out
the provisions of this Joint Resolution.
Regraded Unclassified
JOINT RESOLUTION
To authorize the President of the United
States to render financial aid to China,
the
and for other purposes.
WHEREAS China has for more than four years valiantly
resisted the forces of Japanese aggression; and
WHEREAS financial and economic aid to China will
increase her ability to oppose the forces of aggression; and
WHEREAS the defense of China is vital to the defense
of the United States: Therefore be it
Resolved by the Senate and House of Representatives
of the United States in Congress assembled, That the
Secretary of the Treasury with the approval of the President
is hereby authorized, on behalf of the United States, to loan
or extend credit or give other financial aid to China in an
mount not to exceed in the aggregate $500,000,000 at such
time or times and upon such terms and conditions as the
Secretary of the Treasury with the approval of the President
hall deem in the interest of the United States.
Sec. 2. The authority herein granted shall be in
ddition to any other authority provided by law.
Sec. 3. There is hereby appropriated out of any money
in the Treasury not otherwise appropriated, such sum or sums
not to exceed $500,000,000 as may be necessary to carry out
the provisions of this Joint Resolution.
Regraded Unclassified
TREASURY DEPARTMENT
--
INTER-OFFICE COMMUNICATION
DATE
TO
Secretary Morgenthau
January 31, 1942
FROM
E. H. Foley, Jr.
Attacned is a copy of the Joint Resolution as approved
05 the President.
Secretary Jones suggests the following:
"WHEREAS the defense of China is of the greatest
possible importance"
in lieu of the third "Whereas" clause which reads:
"WREREAS the defense of China is vital to he defense
of the United States." "
Our language in this respect follows the language of
the Lease Lend Bill. Secretary Jones' point is that the
Generalissimo can come back and ask for another loan if
Congress in a special bill says that the defense of China
is vital to the defense of the United States,
9.1.7h S.,-
Regraded Unclassified
JOINT RESOLUTION
201
To authorize the President of the United
States to render financial aid to China,
and for other purposes.
WHEREAS China has for more than four years valiantly
resisted the forces of Japanese aggression; and
WHEREAS financial and economic aid to China will
increase her ability to oppose the forces of aggression; and
WHEREAS the defense of China is vital to the defense
of the United States: Therefore be it
Resolved by the Senate and House of Representatives
of the United States in Congress assembled, That the
Secretary of the Treasury with the approval of the President
is hereby authorized, on behalf of the United States, to loan
or extend credit or give other financial aid to China in an
amount not to exceed in the aggregate $500,000,000 at such
time or times and upon such terms and conditions as the
Secretary of the Treasury with the approval of the President
shall deem in the interest of the United States.
Sec. 2. The authority herein granted shall be in
idition to any other authority provided by law.
Sec. 3. There is hereby appropriated out of any money
.n the Treasury not otherwise appropriated, such sum or sums
not to exceed $500,000,000 as may be necessary to carry out
the provisions of this Joint Resolution.
Regraded Unclassified
205
Januery 31, 1942
I asked T. V. Soong to come and see me At quarter of
seven Saturday night, and I read to him the joint resolution
and told him how I had started leet Thursday to work on
this thing and told him what we'd done and how we were
going up Monday on the Hill, and he should let the General-
1ssimo know, but impress upon him not to give out any
publicity until the publicity came out of Washington.
Any lenks would be very harmful. Soong said this would
tre very pleasing to the Generalissimo to learn that this
MAP going to 6° through. He asked me how long it would
take, and I said I thought from one to two weeks. He BRIG
P.O. hoped It would pass before the fall of Singapore. I
asked nim If he thought it would fall, and he sald, "Yes."
He sald that if for no other reason, the water question.
He said there wae a great shortage of water, and that they
got most of their water from Johore. Then he went on to
say that weren't thinge terrible in Bengasi, and he said
that until Americane got into this thing he didn't think
the thing would go well. The Americans have demonstrated
that they know how to fight.
He told me that when he WBE with the President Friday
morning, that the President called up Hull about some question
of taking over the German and Japanese Embassies, and in-
cidentally mentioned the cuestion of a loan. Then Hull told
the President that Hull and I were going to telk to the
President at Cabinet, and that we were recommending to do
it through Congressional action. He said the President
seezed a little bit surprised and aleo showed by his remarks
that he had heard nothing about it. So I said that we ned
only worked it out that morning, and that when I brought it
to the President today, it only took him B. few seconde to
read the resolution and to approve 1t. And I told him we
appreciated how much the Chinese had done during the lest
four years, and they of all people should receive help at
this time.
Regraded Unclassified
MAY
JAN 31 1942
My dear Mr. President:
Attached for your information is &
copy of a press release relative to the suspension
by the Treasury Department of personnel in Schering
Corporation who have been closely associated with
the Schering Company in Jermany.
Treasury representatives have been
supervising American Schering since the United
States entered the war, and the action referred
to in the press release resulted from our investiga-
tion.
Faithfully yours,
(Signed) E. Morgesthan, 200
Secretary of the Treasury.
The President,
The White House.
Enclosure
Serves twice it 20pm
nmc, Copies
Regraded Unclassified
307
JAN 31 1942
My dear Mr. Secretary:
Attached for your information is a copy of
a press release relative to the suspension by
the Treasury Department of personnel in Schering
Corporation who have been closely associated
with the Schering Company in Germany.
Treasury representatives have been
supervising American Schering since the United
States entered the war, and the action referred
to in the press release resulted from our in-
vestigation.
Very truly yours,
(Signed) 1. Korgenthaw, in
Secretary of the Treasury.
The Honorable
The Secretary of the Navy.
Enclosure.
n.m.c
by Messenger
Steen 2:00
DJS:BB:1hh/mp 1-30-42
copies to Thompson
Regraded Unclassified
308
JAN 31 1942
My dear Mr. Secretary:
Attached for your information is & copy of
a press release relative to the suspension by
the Treasury Department of personnel in Schering
Corporation who have been closely associated
with the Schering Company in Germany.
Treasury representatives have been supervising
American Schering since the United States entered
the war, and the action referred to in the press
release resulted from our investigation.
Very truly yours,
(Signed) 1. Morgenthaw. INC
Secretary of the Treasury
The Honorable
The Secretary of War
Enclosure
By Messenger Steen 2:00
DJS:BB:1hh/s 1-31-42
copies to Thompson
n.m.c.
Regraded Unclassified
nos
JAN 31 1942
My dear Dr. Sush:
Attached for your information is a copy
of a press release relative to the suspension
by the Treasury Department of personnel in
Schering Corporation who have been closely
associated with the Schering Company in Germany.
Treasury representatives have been supervising
American Schering since the United States entered
the war, and the action referred to in the press
release resulted from our investigation.
Very truly yours,
(Signed) a. Morgesthaw. it.
Secretary of the Treasury.
Dr. Vannevar Bush,
Office of Scientific Research
and Development,
Washington, D. C.
n.m.c.
Enclosure
By Messenger School
the
DJS:BB:lhh 1-30-42
Regraded Unclassified
210
JAN 31 1942
wy dear Mr. MoNutt:
Attached for your information is a
copy of 8. press release relative to the suspension
by the Treasury Department of personnel in Schering
Corporation who have been closely associated with
the Schering Company in Germany.
Treasury representatives have been
supervising American Schering since the United
States entered the war, and the action referred
to in the press release resulted from our investige-
tion.
Very truly yours,
(Signed) E. Morganthas, Jr.
Secretary of the Treasury.
lion. Paul V. Mallutt,
Administrator,
Federal Security Agency,
Washington, D. C.
Enclosure
By Hand Safey Ni40
n.m.c.
DJS:BB:lhh 1-30-42
Regraded Unclassified
311
JAN 31 1942
My dear Dr. Jewett:
Attached for your information is a copy of
a press release relative to the suspension by
the Treasury Department of personnel in Schering
Corporation who have been closely associated with
the Schering Company in Germany.
Treasury representatives have been supervising
American Schering since the United States entered
the war, and the action referred to in the press
release resulted from our investigation.
Very truly yours,
(Signed) I. Morgenthau, Jr.
Secretary of the Treasury.
Dr. P. 8. Jewett,
President,
National Academy of Sciences,
Washington, D. C.
Enclosure
Capies to Hompson
By Messenger 11:40 Schey
n.m.c.
DJS:BB:lhh 1-30-42
Regraded Unclassified
212
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
Press Service
Thursday, January 29, 1942.
No. 30-3
The Treasury Department today suspended Dr. Julius Weltzien,
360, 000-a-year president of Schering Corporation, Bloomfield, N. J.,
manufacturers of anti-shock vaccines, hormones, sulfa compounds
and other pharmaceutical products essential to the war effort.
Seven others were also suspended from further activity as
members of Schering's staff. Three of the seven were:
Ernst Hammer, promotion manager, salary $22,000, formerly In
the South American department of Schering A. G., Berlin, and at
one time its representative in South America.
Hans Erdmann, director of engineering and maintenance
departments, salary $10,000, formerly a designer of chemical
equipment for Schering A. G., Berlin.
Martin Bernhardt, head of the Schering legal department and
comptroller of the corporation, salary $9,400, B former vice-
chairman of Schering A. G., Berlin.
The suspension bars the eight individuals from the Schering
premises, blocks their personal accounts, and All employees are
forbidden to communicate with them without Treasury consent.
The Treasury Department believes that today's action smashes
completely a long-range German scheme to control an important
segment of the pharmaceutical market in the western hemisphere,
and enables the United States to take full advantage of the vital
research now under way in the Schering laboratories at Bloomfield.
Dr. Weltzien as late as 1938 held one of the most important
positions in German industry as president of Schering A. G., Berlin,
the second largest pharmaceutical corporation in Germany and the
control board of Schering subsidiaries concentrated in South
America and other parts of the world.
As early as 1933, Schering A. G, Berlin, undertook a long-
range scheme to maintain its world-wide economic position. The
Treasury charged that, as a part of this schene, Hermann Goering
in 1937 ordered the sale of Schering's subsidiaries in the western
hemisphere to Swies interests.
Dr. Weltzien, who personally directed the expansion of the
German Schering interests in South America and other parts of the
world, transferred his offices from Berlin to this country in 1938
when he assumed the presidency of the Bloomfield plant.
Regraded Unclassified
TREASURY DEPARTMENT
Washington
POR IMMEDIATE RELEASE,
Press Service
Thursday, January 29, 1942.
No. 30-3
The Treasury Department today suspended Dr. Julius Weltzien,
50,000-a-year president of Schering Corporation, Bloomfield, N, J.,
manufacturers of anti-shock vaccines, hormones, sulfa compounde
and other pharmaceutical products essential to the war effort.
Seven others were also suspended from further activity as
members of Schering's staff. Three of the seven were:
Ernst Hammer, promotion manager, salary $22,000. formerly In
the South American department of Schering A. G., Berlin, and at
one time its representative in South America.
Hans Erdmann, director of engineering and maintenance
departments, salary $10,000, formerly a designer of chemical
equipment for Schering A. G., Berlin.
Martin Bernhardt, head of the Schering legal department and
comptroller of the corporation, salary $9.400, B former vice-
chairman of Schering A. G., Berlin.
The suspension bare the eight individuals from the Schering
premises, blocks their personal accounts, and all employees are
forbidden to communicate with them without Treasury consent.
The Treasury Department believes that today's action omashes
completely a long-range German scheme to control an important
segment of the pharmaceutical market in the western hemisphere,
and enables the United States to take full advantage of the vital
research now under way in the Schering laboratories at Bloomfield.
Dr. Weltzien as late as 1938 held one of the most important
positions in German industry as president of Schering A. G., Berlin,
the second largest pharmaceutical corporation in Germany and the
control board of Schering's subsidiaries concentrated in South
America and other parts of the world.
AG early as 1933, Schering A. G. Berlin, undertook a long-
range scheme to maintain its world-wide economic position. The
Treasury charged that, 88 a part of this scheme, Hermann Goering
in 1937 ordered the sale of Schering's subsidiaries in the western
hemisphere to Swies interests.
Dr. Weltzien, who personally directed the expansion of the
German Schering interests in South America and other parts of the
world, transferred his offices from Berlin to this country in 1938
when he assumed the presidency of the Bloomfield plant.
Regraded Unclassified
313
-2-
Prior to Dr. Weltzien's entry into the United States, other
key personnel from the Schering staff in Berlin had been sent into
this country and assigned to important tasks in the Bloomfield
Schering Corporation. Hammer, Bernhardt and Erdmann were brought
here as a part of this plan, Treasury officials said,
At the outbreak of the European war the network of western
hemisphere Schering corporations, then headed by the Schering
Corporation at Bloomfield, drew closer together in the effort to
hold markets for Schering A. G., of Berlin, until the end of the
war, In addition the entire network was used as a tool to raise
foreign exchange for the Nazi regime.
The Nazi scheme showed promise of succeeding until the
Treasury Department blocked all German nationals under the
President's freezing order in June of 1941.
The Treasury blocked Schering funds on June 14, 1941, and
installed supervisory representatives in the plant shortly after
the attack on Pearl Harbor. Production of Schering's vital
pharmaceutical products has continued since June under Treasury
control.
Heretofore the United States government has been unwilling
to exchange pharmaceutical scorets with Schering Corporation in
order to further development of vital drugs because it felt that
important scientific discoveries might be made known to German
agents and benefit the Axis. With the German elements removed,
cooperative experiments will be made possible and the full benefit
of Schering's important pharmaceutical research will be made
available to the United Nations.
-000-
Regraded Unclassified
THE SECRETARY OF THE NAVY
WASHINGTON
February 3, 1942
My dear Henry:
Thank you for that letter of January 31 in-
cluding the statement concerning the offices of the
Schering Corporation. I was glad to have this
information.
Yours sincerely,
Frankstnon
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
Regraded Unclassified
TREASURY DEPARTMENT
315
INTER OFFICE COMMUNICATION
DATE JAN 1942
TO
Secretary Morgenthau
FROM E. H. Foley, Jr.
Re: Werner von Clemm
Pioneer Import Corp.
A Federal grand jury in New York on Thursday
indicted Werner von Clenm and certain of his associates
for conspiracy to violate the freezing regulations and
customs laws. The basis for the indictment is that Werner
von Clenm, operating through the Pioneer Import Corporation,
conspired with other persons, including his brother in
Europe, and certain German officials who were acting in
cooperation with the German army, to bring diamonds confis-
cated by the Nazis in Belgium or Holland into the United
States for sale.
The conspiracy contemplated that the diamonds
would be marked as originating in Germany and thus brought
into the country without obtaining 8 license from Foreign
Funds Control, because at the date of the transactions
German assets were not yet frozen, although both Beigian
and Dutch were- Werner von Clenm is B. cousin of von Ribbentrop's
wife.
Regraded Unclassified
316
- 2 -
Foreign Funds Control and investigators of
the Customs Bureau have been working with the United
States Attorney's office on this case for over a year.
It is contemplated that the trial will begin within
approximately a month.
9.1.7h. 9.10
17
515.32
My dear Mr. Secretary:
I have received your letter of January 27,
1342 (En 811.34544/1610), in which you state
that the Secretary of the Navy has requested
that the question of the admission into the
United States under bond of articles for use in
or abourd British ships being refitted in the
United States be taxen un with the Treasury
Department.
In connection with this matter, your atten-
tion 18 invited to the communication addressed
to the Treasury Department by the Department of
State under date of Avril 7. 1941 (PR), request-
156. in view of A note from the British Asbasssior,
that the collectors of customs at All seaports
be authorized to admit free of duty. no in act
of international courtesy. all articles consigned
to the Dritish Advisory Repair Mismion, in care
of the Com andant of any United States Navy Yord.
In response to this request, the Treasury
Department, in a letter of April 21, 1341
(515.32). to all headcuarter customs seaports,
directed that free entry be accorded to all
articles, the property of the British Govern-
cent, when consigned to the British Advisory
Repair Mission, in care of the Commandant of
any United States Navy Yard in this country,
and intended for the repair or refitting of
British chips of WHI in the United States. A
copy of this authorization VIII forwarded to the
Department of State with the Treasury Department's
letter of Anril 21, 1941 (515.32). In a letter
Regraded Unclassified
318
515.32
- 2 -
of November 6, 1941 (515.32), the same collectors
of customs were directed in & blanket authorization
to accord articles of the character referred to
free entry, as an act of international courtesy,
when imported by air, as well as when imported in
vessels of war or in merchant ships. This blanket
authorization vas in response to the request con-
tained in a letter received from the Department
of State dated October 27, 1941 (PR), and a copy
of the authorization vas transmitted to the Depart-
ment of State with the Treasury Department's letter
of November 6, 1941 (515,32).
It is nov and has been the practice, since
May 33, 1941, to accord free entry, as an act of
international courtesy, under the conditions laid
down in this Department's letter to your office of
May 22, 1941 (515.32). to articles intended for the
repair and maintenance of vessels of the British
Mercantile Marine, upon the receipt, in each in-
stance, of & request for free entry on that basis
from the British Ministry of War Transport (formerly
the British Ministry of Shipping).
As it is now the established practice, under
the procedure outlined above, to accord free entry
unconditionally, as an act of international courtesy,
to the articles referred to by the Secretary of the
Navy, this Department would appreciate advice as to
anything further it might do to accomplish the pro-
posal of the Secretary of the Havy.
Copies of the Department's authorizations
referred to above are again transmitted for your
ready reference and possible transmission to the
Secretary of the Navy.
Very truly yours,
(Signed) 1. Morgesthas. 19,
Secretary of the Treasury.
The Honorable
The Secretary of State. Photo file n.m.c
Its to
Enclosures.
Regraded Unclassified
#
STATE
5/5.32
%.K
DEPARTMENT OF STATE
WASHINGTON
reply
refer to
January 27. 1942
544/1610
My dear Mr. Secretary:
The Secretary of the Navy has asked me to take up
with you the question of having dutiable articles, con-
signed for use in or aboard British ships being refitted
in United States yards, admitted into the United States
in bond. I am glad to endorse the Secretary of the Navy's
proposal and should be grateful if you can give effect to
it.
Sincerely yours,
The Honorable
ENSE
Henry Morgenthau, Jr.,
BUY
Secretary of the Treasury.
Regraded Unclassified
515.32
COPY
November 6, 1941
CONFIDENTIAL
The Collector of Customs,
Portland, Me., and to all other headquarter seaports and Honolulu, T. H.
Sir:
Reference is made to the Department's letter of April 21, 1941
(615.32), authorizing the admission free of duty and import tax as
an act of international courtesy of all imported articles consigned
to the British Advisory Repair Mission, in care of the Commandant
of any United States Navy Yard in this country.
The Department is now in receipt of a request from the Depart-
ment of State that blanket authority be issued to collectors of
customs for the admission free of duty of articles of this character
when imported by air AS well as on board vessels of way and merchant
ships. In compliance with the request received from the Department
of State, the Department's letter of April 21, 1941 (515.32), is
hereby extended to cover articles imported by air consigned to the
British Advisory Repair Mission, in care of the Commandant of any
United States Mavy Yard in this country.
This letter shall be blanket authority, and specific author-
isations in each instance shall not be required.
Very truly yours,
(Signed) Herbert E. Gaston
HERBERT E. GASTON,
Aceistant Secretary of the Treasury.
Regraded Unclassified
COPY
515.32
MAY 22 1941
My dear Mr. Secretary:
Reference is made to your letter of May 17, 1941 (PR 841.
85/480), enclosing a copy of a note dated May 10, 1941 from the
British Ambassador concerning the question of free entry into
the United States of certain repair parts, supplies and so forth,
which may be required for the repair and maintenance of vessels
of the British mercantile marine.
The British Ambassador requests that consideration be given
to the free entry of this material under the following conditions:
(1) The materials must be the property of the British
Government or of a department thereof.
(2) The materials must be destined for the maintenance
and/or repair of vessels of the British mercantile
marine or of vessels coming under the control of the
British Government.
(3) A request for free entry should in the case of each
ship be addressed to, and filed in advance of arrival
with, the Commissioner of Customs at Washington, D. C.
by the Ministry of Shipping.
(4) This request should in each case give assurances on
the points raised in (1) and (2) above and should
include the name of the consignee, the port at which
entry will be made, the name of the conveying vessel,
a. broad general description of the materials together
with the marks and numbers on the cases, and the number
of packages of which each shipment is composed.
The Department can see no objection to the admission free
of duty of repair and maintenance material under the conditions/out-
lined by the British Ambassador provided that there is no waiver of
any license or permit required by law in connection with such im-
portations. Further, in view of the statement made in the second
paragraph of your letter, no objection is perceived to the adoption
Regraded Unclassified
515.32
- 2 -
practice of according free entry to such material on
sceipt of requests for free entry which are addressed
tly to the Commissioner of Customs by the British Ministry
and
pping.
by direction of the Secretary:
Very truly yours,
(Signed) Herbert E. Gaston
HERBERT B. GASTON,
Assistant Secretary of the Treasury.
Honorable,
The Secretary of State.
Regraded Unclassified
515.32
COPY
April 21, 1941
CONFIDENTIAL
The Collector of Customs,
Portland, Me., and to all other headquarter seaports and Honolulu.
Sir:
You are hereby authorized to admit free of duty and import
tax, as an not of international courtesy, all imported articles
consigned to the British Advisory Repair Mission, in care of the
Commandent of any United States Navy Yard in this country.
Suoh articles will in each case be the property of the British
Government and will be used in connection with the repair or re-
fitting of British ships of war in the United States. Some ship-
ments will arrive on board vessels of war and come in merchant
ships,
The shipments will be composed of "articles, the immediate
delivery of which is necessary" within the meaning of section
448(b) of the Tariff Act of 1930, and may be released prior to en-
try in accordance with the procedure outlined in article 354 of
the Customs Regulations of 1937. In view of the nature of the
transactions the requirements of article 354 with respect to the
giving of bonds are hereby waived and it is requested that you ex-
pedite in all possible ways the release of the shipments.
In 08.865 where it is desired to invoke the provisions of ar-
ticle 770 of the Customs Regulations of 1937, 6.8 amended, the re-
quirements of that article with respect to the giving of bonds or
stipulations are hereby waived and all possible facilities should
be extended.
This letter shall be blanket authority for the treatment of
all importations of the character herein described, and specific
authorizations in each instance shall not be required.
Very truly yours,
(Signed) Herbert E. Gaston
HERBERT E. GASTON,
C8-mc 4-16-41
Assistant Secretary of the Treasury.
WRJ-esb 4-17-41
Regraded Unclassified
324
You are right, Secretary Knox; the Navy has once
more set en example and offered 8 chollen e to the rest
of the country. On behalf of the Treasury Department
I RM happy and proud to receive this ma nificent invest-
nent in America.
It is doubly melcone to me because it comes from the
shore establishments of one of our fighting services. It
shows that the men ano women who work in the navy yerds
and other shore stations are soing a double job for their
country. They are working day end night to supply our
righting men with fighting пеароль. At the same time
they are saving systematically, week after neek, to supply
our fighting men with fighting dollars.
It will be grand news to those who serve st sea to
hear that the men and women on shore are giving them this
In
31,
Regraded Unclassified
- 2 -
325
kind of active and continuous support. After all, the
men of the Navy must have new ships, planes, guns and
shells in a steady stream if they are to do their part
in winning the war. The workers in the shore establishments
and millions of others in war industries throughout the
country are making it possible, by their savings, to
provide those weapons that will smash our enemies.
I wish that I could thank every one of the thousands
who have contributed to the check that you have just handed
to me. Since that is impossible, I am going to thank them
through you, Secretary Knox.
The people who work in the
Navy to shore establishments have shown by their wonderful
response that they are all out for victory just 8 S much as
the men who serve on the ships of war.
Let the Nazis and
the Japanese look at that response, and look at it well.
- 3 -
326
It is just another example of the spirit that is going
to win the war for freedom.
D-A
January 31, 1942
My dear Mr. Luhrsen:
Immediately after the railroad wage settlement
your Association, through you and through the presidents
of many of your member brotherhoods and unions, Informed
me that Railroad Labor has giving the word "Full Steam
Ahead!" to its members for participation in the Defense
Savings Program. This prompt and wholehearted support
from yourself and these other leaders was very good news
for the United States Government in facing the heavy
burdens of financing the war.
In these circumstances 1 an somewhat troubled to
learn from members of the Defense Savings Staff that
reports so far received on Payroll Savings Plans set up
at our request by the transportation companies show that
in general only a minor percentage of railroad employes
are taking part. These reports show that, in the case
of 72 railroads with a total of 907, 657 employes, only
34,962 of that number have filed Payroll Allotment
Authorizations. I am attaching to this letter 8. list of
those railroads, showing the number of their employes,
the number of Payroll Authorizations filed and the per-
centage of participation.
Since the date on which your organization gave me
these assurances, the war effort of the United States
has been intensified and all our national needs have
increased tremendously. It is vitally important that
your members recognize this situation clearly; and having
before them the facts here presented, set themselves
without delay to make good on their undertaking of all-out
Regraded Unclassified
328
- 2 -
cooperation with the Government in this essential part
of its war program.
We are counting on you to pass this word on to your
associates.
Sincerely yours,
(Signed) Henry Morgesthau, Jr.
Mr. Julius G. Luhrsen,
Executive Secretary-Treasurer,
Railway Labor Executives' Association,
10 Independence Avenue,
Washington, D. C.
Attachment.
CC- Jhompson
n.m.c.
JLH
FK/hkb
Regraded Unclassified
STATEMENT OF RAILROAD EMPLOYEES PARTICIPATION
Number of
Railroads
Employees
Participants
Per Cent
1. L. & F.
35
5
72.7
500 Line
7677
5524
72.0
C. of Da.
5132
2625
51.1
Ge. & Pla,
583
293
50.3
St. L. & 8. F. of Two
474
222
46.8
N. 5. Okle.
160
74
46.3
C. & W. I.
1129
364
32.2
Vonon
2250
700
31.1
Belt Ry. Chiengo
1570
483
30.8
Lehigh & Hudmon River
321
87
27.1
Chicago Ilnion Station
1000
250
25.0
Burlington Rock Island
225
56
24.9
T. & P.
6546
1557
23.8
Pullman Co.
23000
5000
21.7
I. & 0. N.
3489
749
21.5
L. & N.
29000
6150
21.2
Ann Arbor
2143
262
21.1
Union Ry. Vemphis
800
158
19.8
C. & 3.
1550
296
19.1
C. G. W.
4000
758
19.0
C. 3. & Q.
28000
4731
16.9
A. & W. P.
3000
503
16.8
K. o. & G.
735
121
16.5
Dee Moines Union
235
37
15.7
D. & H.
3400
1311
15.6
T. & N. 0.
15500
2400
15.5
Clinchfield
1249
186
14.9
M. & St. L.
2500
360
14.4
Wab.
72700
1814
14.3
Erie
24170
3291
13.6
Virginian
3300
449
13.6
W. K. & T.
8738
1083
12.4
Prisco
15000
1853
12.4
D. & R. G.
8000
935
11.7
Lehigh & N. &
928
100
10.8
Chicago Tunnel
383
E
10,7
54380
5729
10.5
B. 4 0. Ry.
Southern Pacific
53700
5500
10.2
C. M. & St. P.
30000
3000
10.0
W. M.
4400
432
9.8
D. L. A W.
15300
1482
9.7
New Beven
26451
2538
9.6
Toledo Terminal
300
27
9.0
Borfolk & Port Selt
340
30
8.8
C. & N, W.
28500
2500
8.8
C. St. P. M. & D.
5000
432
8.6
1492
126
8.4
Ill. Term.
1200
100
8.3
8. & A.
C. R. I. 4 P.
22372
1779
B.O
Regraded Unclassified
330
STATEMENT OF RAILROAD EMPLOYEES PARTICIPATION
Number of
Railroads
Employees
Participants
Per Cent
K. c. 3.
5047
406
8.0
Cambria & Ind.
145
114
7.9
P. R. R.
147813
11174
7.6
G. N.
15000
11.00
7.3
C. N. J.
12150
821
6.8
L. v.
11159
756
6.8
C & 0, N. K. P., P. M.
52000
3541
6.8
G. T. W.
8014
531
6.6
B. & M.
15200
935
6.2
Reading
19000
1158
6.1
K. C. Term.
1625
98
6.0
C. & E. I.
4500
270
6.0
N. C. & St. L.
5699
332
5.8
T. R. R. A.
3636
207
5.7
C. V.
1500
82
5.5
Sou Ry.
42229
2125
5.0
N. & N.
21000
1000
4.8
I. C.
36500
1700
4.7
8. A. L.
15500
721
4.6
N. T. C.
121000
4000
3.3
A. C. L.
17000
495
2.9
F. E. C.
2500
59
2.4
Jax Term.
700
15
2,1
Regraded Unclassified
331
TREASURY DEPARTMENT
WASHINGTON
January 31, 1042.
200 MI SEVENTARY:
I attach the regort you R for
about the 99. unles 210 have been
the Havy ":" flag.
CHAVES
Regraded Unclassified
332
Existence of Payroll Savings Plans in
Industrial Plants Receiving the Navy "2" Flag
Suster of companies listed BB receiving
the Havy "E" Flag
82
of the listed companies recorted
30 have established a payroll savings
-186 by the State Administrator
(see stteched list)
45
ter of commenies renorted to have 88+
isblished a payroll savings -len from
which rorress recorts have been De-
celved by the Tressury
10
of the 5 companies reportin to the Tressury, 3 194 -lans onerating
10 December and the rercents e of certicipation emong their employees
W S A.B follows:
Consolidated Machine Tool Corporation,
Roomester, N. Y
684 es loyees
038
westinenouse Electric Elevetor Co.
Jersey City, N. J
1,281 employees
665
D. I. DuPort de Nemours & Commany,
52,000 employees
136
Wilmington, Del
Toe other 6 companies reported their plans were not in oberation
December but would stert on the following dates:
Carrier Corroration,
Syrecuse, N, Y.
Jen. 1
Pollak Manufecturing 00.,
Arlington, N. J
Jan. 1
MaKey Co.,
Pittsturgh, Po
Jac.10
5. A. Roeblin ¹E Sons Co.,
Trenton, N. J
Jan. 25
Bridgemort Brass Co.,
Bridgemort, Zenn...
Pet. =
Control Instrudent Co.,
New York, S. Y.
$51.15
Regraded Unclassified
333
Existence of Payroll Savings Plans in Industrial Plants
Receiving the Navy "E" Flag
: Administrators'
:January 24 report
Name of company
City and State
:
on existence
:
of payroll
:
savings plan
ontinental Gin Co.
Birmingham, Ala.
Yes
orris Stamping & Mfg. Co.
Los Angeles, Cal.
Yes
Mageport Brase Co.
Bridgeport, Conn.
Yes
hase Brass & Copper Co., Ino.
Waterbury, Conn.
Yes
I. DuPont de Nemours & Oo., Ino.
Wilmington, Del.
Yes
iehle Printing Press & Mfg. Co.
Chicago, Ill.
Yes
QBB Printing Press Co.
Chicago, Ill.
Yes
ngersoll Milling Machine Co.
Rockfort, Ill.
No
merican Steel Foundries
Granite City, I11.
No
TODD Forge Co.
Chicago, Ill.
No
antam Bearings Corp.
South Bend, Ind.
Yes
cerican Steel Foundries
Indiana Harbor, Ind.
No
R. Mallory & Co., Inc.
Indianapolis, Ind.
No
he Magnavox Co.
Fort Wayne, Ind.
No
outh Bend Lathe Works
South Bend, Ind.
Yes
ocsier Lamp & Stamp Corp.
Evansville, Ind.
Yes
Elkton, Md.
No
riumph Explosives, Inc.
heen Manufacturing Co.
Baltimore, Md.
Yes
West Hanover, Mass.
No
ational Fireworks, Inc.
olaroid Corp.
Cambridge, Mass.
Yes
eneral Motors Corp., Fisher Body Div.
Detroit, Mich.
Yes
ickers, Inc.
Detroit, Mich.
Yes
en, Motore Corp., Pontiac Motors Div.
Pontiac, Kich.
Yes
ederal Screw Works
Detroit, Mich.
Yes
Port Huron, Mich.
No
ueller Brass Co.
Minneapolis, Minn.
Yes
orthern Pump Co.
Minneapolis, Minn.
Yes
lour City Ornamental Iron Co.
casanto Chemical Co.
St. Louis, Mo.
Yes
eatrice Steel Tank Mfg. Co.
Beatrice, Nebr.
No
leuffel d: Esser Co.
Hoboken, N. J.
Yes
Pollock Mfg. Co.
Arlington, N. J.
Yes
/estinghouse Electric Elevator Co.
Jersey City, N. J.
Yes
Harrison, N. J.
Yes
Trucible Steel Co. of America
Trenton, N. J.
Yes
John A. Roebling Bons Co.
Brooklyn, N. Y,
No
Arma Corp.
Rochester, N. Y,
No
Bausch & Lomb Optical Co.
continued)
Office of the Secretary of the Treasury,
January 31, 1942
Division of Research and Statistics.
Regraded Unclassified
331
Syistence of Payroll Savings Plans in Industrial Plants
Receiving the Navy "E" Flag
(continued - 2)
: Administrators'
:January 24 report
Name of company
:
City and State
: on existence
:
of a payroll
:
: savings plan
brd. Instrument Co.
Long Island City, F.Y.
Yes
DEOL [achine Tool Corp.
Rochester, N. Y.
Yes
Inchine, Div. of Bendix, Avia. Cor. Elmira, N. Y.
No
Carrier Corp.
Syracuse, N. Y.
Yes
pricin Locomotive Go.
Schenectady, E. Y.
Yes
atrol Instrument Co., Inc.
Brooklyn, F. Y.
Yes
--- Cory.
Brooklyn, I:, Y,
No
Pront Corp.
Long Island City, N.Y.
%
jork Aircrake Co.
Lew York City, N.Y.
No
L. white Co.
Brooklyn, N. Y.
No
Reinstional Rickel Co.
New York City, N.Y.
Yes
márch Machine Tool Co.
Sidney, Ohio
Yes
näuskey Foundry & Machine Co.
Sanduskey, Ohio
No
Pormold Works
Cleveland, Ohio
Yes
stional Cash Register Co,
Dayton, Ohio
Yes
teel Improvement & Forge Co.
Cleveland, Ohio
Yes
he Worner & Swase) Co.
Cleveland, Ohio
Zee
Livale Co.
Bloetown, (Phila.), Pa.
Yes
artile Machine works
Reading, Fa.
No
Erie, Pa.
Yea
bie Todayo Co.
nedowne Steel & Iron Co.
Morton, Pn,
1.0
eeta Machine Company
Pittsburgh, Pa.
No
lond. Steel Wke., Div. of Baldwin Loco. Burnham, Pa,
Yes
rie Morks of General Electric Co.
Irie, Pa.
Yes
Sethlenem, Pa.
Yes
\nlehem Steel Co.
Honestead, Fa.
l'o
www.gis-Illinois Steel Co.
medicall Co.
Pittsburgh, Pa.
No
lional Forge & Ordnance Co.
Irvine, Pa.
No
ACE Sall Searing Co.
Philadelphia, Pa.
Yes
Crucible Steel Corp.
Midland, Pa.
No
Doeler Die Cesting do.
Pottetown, Pa.
No
Nov England Auto Products Corp.
Pottstown, Pm.
No
Pittsburgh, Pe.
Yes
The ::eXay Co.
Pittsburgh, Pa.
110
KYOKOSI Drawn Steel Company
Bethlehem, Pt.
::0
Bethlehem Foundry & lachine Co.
(contimed)
Office of the Secretary of the Treasury,
January 32, 1942
Division of and Strtistics.
Regraded Unclassified
335
Existence of Payroll Savinga Plans in Industrial Plants
Receiving the Navy "E" Flag
(continued - 3)
:
: Administrators'
January 24 report
Name of Company
City and State
:
on existence
:
of a payroll
:
savings plan
eadwell Engineering Company
Easton, Pa.
No
maylvania Electric Steel Casting Co. Hamburg, Pa.
No
pricen Pulley Co.
Nicetown, (Phila.) Pa.
Yes
111nc Engineers Ino.
Philadelphia, Pa.
Yes
ward G. Budd KfE. Co.
Philadelphia, Pa.
No
cime & Sharn Kfg. Co.
Providence, R, I.
Yes
Fulton Sylphon Co.
Knoxville, Tenn.
No
ceron Iron Works
Houston, Texas
No
adegar Co.
Richmond, Va.
Yes
keside Bridge & Steel Co.
Milwaukee, Wisc.
No
his Allis Co.
Wilwaukee, Wisc.
No
Office of the Becretary of the Treasury,
January 31, 1942
Division of Research and Statistics.
Regraded Unclassified
TREASURY DEPARTMENT
336
INTER OFFICE COMMUNICATION
DATE January 31, 1942
TO
Secretary Morgenthau
FROM
Mr. Hass M.
Subject: Operation of Payroll Savings Plans in Large Companies
during December 1941
1, Attached to this memorandum is a table showing
some preliminary information on the operation of payroll
savings plans in 86 large companies during the month of
December 1941. The data shown in the table were obtained
from the companies listed therein through the direct mail
reporting system which we established two weeks ago. They
represent actual results for December in the companies listed.
2. The 86 companies shown in the table employed
506,000 persons in December. Of this number 93,850 or ap-
proximately 18-1/2 percent had pledged themselves to purchase
Savings Bonds under payroll savings plans. The average de-
duction from pay under the plans amounted to approximately
1 percent of the aggregate payroll of the various companies.
3. The companies listed in the table represent a random
sample of large companies operating payroll savings plans in
December. (The companies selected were those whose reports
were included in the first week's replies received to our
questionnaire.) A random sample such as this should be more
or less representative of the operation of the plan through-
out the country during that month.
4. Employee participation in payroll savings plans 1s
undoubtedly higher at the present time than it was in Decem-
ber because the companies have had more time to canvase their
employees. We shall have preliminary data on the extent of
this participation in about three weeks when the replies to
our February 10 questionnaire begin to come in.
237
of Payroll Savings Plane in A Selected Group of Large
Companies Durine December 1941 1/
:
:
Number of
Percentage
:Percent of
:
Number
: employees
of
company's
and address
:
of
:participating
employees
imayroll de-
of company
:
persons
:
in payroll
:
: ducted for
partici-
:
employed
savings
++
t mayroll
:
plane
:
rating
:sevings plar
Leo Co.
December, Conn
2,000
980
36
1
Machine Tool Cora
N. Y
824
766
93
.
senire & Foundry Co.,
Ohio
1,048
773
AT
if
- Lient Co.,
Wis
1,147
1,001
87
1.
- Corp.,
- Affie, Wie
3,850
3,084
80
in Co., Inc.,
N. J
12,464
0,715
70
NO
J. Worsted Hills, Gera
11110 Branch, Garfield, N.J
2,900
1,950
67
2
one insurecturing Co.,
Ve
1,600
1,060
46
2
Electric Elevator
1,281
842
1.6
2
20., Jersey City, N. J
...: Slectric Co.,
Conn
1,562
392
64
2
Develond Twist Drill Co.,
3,242
1,439
64
4
Onio
Slectric Railway &
incoment Co., Hilwaukee, Wie.
2,494
2,480
59
I
Avintion,
Ostroit, %1ch.
1,087
553
51
2
Store, Ine,
1,200
son
2.
2
lev Yark, N. Y.
E. Hanes Khitting Co.,
Julton-Salex, S. O.
3,150
1,537
45
I
Instone Cotton Mille,
877
48
3
Bedford, Mose
1,819
Central of Jeor 19 Rollway,
Seventish, Ga
2,530
-
1
5,500
R. J. Reynolds Tobacco Co.
4,625
42
1
Winston-Salem, N. C
11,000
Wisconsin Electric Power Co.,
2,385
REO
37
2
Hilwsukee, Wis
(costinued)
Office of the Secretary of the Tressury,
Division of Research and Statistics.
Companies selected are those with tor largest number of employees Among
the first 8,000 reulies received to tae Treasury's December ruestionnaire
on Regroll sevings niens.
Leva than -5 of 1 percent.
Regraded Unclassified
338
Operation of Payroll Savinge Plans in a Selected Group of Large
Companies During December 1941 1/
(Continued - 2)
:
:
Number of
: Number
:
employees
Percentage
Percent of
of
:
participating
of
company'e
Name and address
:
of company
:
persons
:
in payroll
employees
payroll de-
:
:
:
partici-
ducted for
: emoloyed
savings
:
:
:
plane
:
peting
payroll
envings plan
STP Drop Forging Co.,
Springfield, Mass
1,400
451
32
2
ther Pen Co,
Janeaville, Wis
1,442
450
31
2
1srk Thread Co.
Newark, N. J
1,940
560
29
1
unley Works, American Tube
A Stemping Plant,
Sridgeport, Conn
1,122
298
27
1
inn-Lovett Co,
Jacksonville, Fla
1,000
250
15
ew York Life Insurance Co.,
Sew York, N. Y
4,287
1,055
25
1
with & Wesson,
Springfield, Mase
1,258
300
24
-
alley Carburetor CO.,
1,476
350
24
.
Detroit, Mich
leveland Railway Co.,
Cleveland, Ohio,
4,200
980
23
-
1-State Telephone & Telegraph
Co., Omeha, Neb.
1,730
366
21
1
& K. Keragheusian, Inc.,
Freehold, N. J
1,707
359
21
1
ew York Telephone Co.,
New York, N. Y,
40,454
8,514
21
1
anufscturers Trust Co.,
Sew York, N. Y.
3,365
723
21
eatherhead Co.,
Cleveland, Ohio,
2,100
445
21
2
incinnati Street Railway Co.,
1,992
421
21
-
Cincinnati, Ohio
orthrup Aircraft Manufac-
1
turing Co., Los Angeles, Calif.
4,320
575
20
ombustion Engineering Co.,
Y
1,010
202
20
1
Inc., New York, N
G. Corporation,
New York, N. Y.
1,400
260
19
1
White Motor Company,
4,990
970
19
1
Cleveland, Ohio
Chicago, Indianapolis &
Louisville R. T.,
Chicago, Ill
2,200
359
18
1
Nevada Consolidated Copper
Corp., McGill, Nev
1,677
297
18
2
(continued)
Office of the Secretary of the Treasury,
Division of Research and Statistics.
Companies selected are those with the largest number of employees among
the first 2,000 replies received to the Tressury's December cuestionnaire
on payroll sevings plans.
Lees than .5 of 1 percent.
Regraded Unclassified
339
Operation of Payroll Savings Plans in a Selected Group of Large
Companies During December 1941
(Continued - 3)
:
:
Number of
:
:Percent of
:
Number
:
employees
Percentage
of
company's
Name and address
:
of
:participating
of company
:
:
in payroll
employees
:payroll de-
persons
ducted for
: employed
:
savings
:
partici-
:
:
:
pating
: payroll
plans
:savings plar
pchester Transit Corp.
Rochester, N. Y.
1,032
188
18
1
artford Machine Screw Co.,
Hartford, Conn
1,600
265
17
1
Sams-Millis Corp.
Righ Point, N. C.
2,712
452
17
1
nnn-Bush Shoe Co.,
Milwaukee, Wis
1,239
210
17
1
puisville & Nashville
Railroad Co., Louisville, Ky.
30,600
4,800
16
1
hesapeake & Potomac Telephone
Co., Baltimore, Md
5,493
866
16
-
erican Writing Paper Corp.,
Holyoke, Mass
1,330
200
15
1
irestone Cotton Mills, Inc.
Gastonia, N. C
2,063
300
15
1
ones & Lamson Machine Co.,
Springfield, Vt.
2,045
300
15
1
igin, Joliet & Eastern Railway
Co., Chicago, Ill
5,975
845
14
-
arke-Davis & Co.,
4,141
589
14
1
Detroit, Mich
I. DuPont de Nemours & Co.,
Wilmington, Del
62,000
5,070
13
.
onde Nest Publications, Inc.,
Greenwich, Conn
1,238
161
13
1
hrysler Corporation,
Detroit, Mich,
66,194
8,327
13
1
entral Hanover Bank & Trust
Do., New York, N. Y.
2,393
306
13
leveland Trust Co.,
Cleveland, Ohio
1,983
252
13
linchfield Railroad Co.,
1,397
186
13
Erwin, Tenn
huntain States Telephone &
Telegraph Co., Denver, Colo..
8,267
992
12
1
Northwestern Bell Telephone Co.,
10,986
1,286
12
1
Omaha, Neb
Bell Telephone Co. of Pa.,
Philadelphia, Pa
19,536
2,423
12
I
Chesapeake & Potomac Telephone
Co,, Washington, D. 0
5,249
553
11
1
(continued)
Office of the Secretary of the Treasury,
Division of Research and Statistics.
Companies selected are those with the lergest number of employees among
the first 2,000 replies received to the Treasury's December questionnaire
on payroll savings plane.
-
Less than .5 of 1 percent.
Regraded Unclassified
340
Operation of Payroll Savings Plane in à Selected Group of Large
Companies During December 1941
(Continued - 4)
:
: Number of :Percentage: Percent of
:
Number
:
employees
:
of
: company's
Name and address
:
of
:participating
employees
: payroll de-
of company
: persons : in payroll
:
particl-
:
ducted for
:
employed
:
savings
:
pating
:
payroll
:
:
plans
:
:savings plai
ational Bank of Detroit,
Detroit, Mich.
1,222
131
11
cerican Telephone &
Telegraph Co., New York, N.Y. 16,176
1,831
11
1
11100 Service 011 Company,
Bartlesville, Okla
5,000
550
11
1
grogannett Electric Co.,
Providence, R. I
1,529
172
11
Lente, Incorporated,
Atlanta, Ga
1,700
170
10
onsolidated Copper Kines
COME., Kimberly, Nev
1,022
104
10
1
cited Electric Railways Co
Providence, R. I
1,120
96
9
1
orthwestern Mutual Life Ins.
Co., Milwaukee, Wie
1,577
138
AD
-
10 Bell Telephone Co.,
Cleveland, Ohio
11,420
940
8
1
othern Bell Telephone È
Telegraph Co., Atlanta, Ga
26,316
1,970
7
1
estern Maryland Reilroad
30., Baltimore, Md
4,441
318
7
S. Metals Refining Co,
Carteret, N. J
2,108
148
7
-
tomac Electric Power Co.,
Washington, D. 0
2,264
131
6
beton and Naine Reilroad,
Boston, Mass
15,200
935
6
ty Bank Farmers Trust Co.,
New York, N. Y
1,041
62
6
rter 011 Co.,
Tulsa, Okla
1,966
111
6
reintan Railway Co.,
Norfolk, Va
3,300
190
6
inilton Manufacturing Co.,
Two Rivers, Wie
1,280
75
5
Dane-Blabon Corp.,
Trenton, N. J.
2,040
52
5
1
Carlion Interests,
Colorado Springs, Colo
1,000
35
4
1
Terminal Railroad Association
of St. Louis, St. Louis, Mo.
4,101
147
4
National City Bank of
New York, New York, N. Y
211
11
*
5,500
(continued)
Office of the Secretary of the Secretary,
Division of Research and Statistics.
1/ Commanies selected are those with the largest number of employees among
the first 2,000 replies received to the Treasury's December questionnaire
on payroll savings plans.
Less than .5 of 1 percent,
Regraded Inclassified
341
Operation of Payroll Savings Plans in a Selected Group of Large
Companies During December 1941 1/
(Continued - - 5)
:
:
Number of
:Percentage :Percent of
:
Number
: employees
:
of
: company's
Name and address
:
of
:participating:
employees
: payroll de-
of company
:
persons
:
in payroll
:
employed
partici-
:
ducted for
:
:
savings
:
pating
:
payroll
:
:
plans
:
:savings plan
idland Steel Products Co.,
Cleveland, Ohio
1,737
67
4
merican Airlines, Inc.,
New York, N. Y.
4,611
132
3
1985 Point Manufacturing Co.,
West Point, Ga.
7,765
166
2
Office of the Secretary of the Treasury,
Division of Research and Statistics.
January 31, 1942
1/ Companies selected are those with the largest number of employees among
the first 2,000 replies received to the Treasury's December questionnaire
on payroll savings plans.
#
Less than .5 of 1 percent.
Regraded Unclassified
342
TREASURY DEPARTMENT
WASHINGTON
January 31, 1942.
MEMORANDUM FOR THE SECRETARY:
Your request that we have a "Gallup"
poll about the pay-roll allotment plan
has been handled by liessrs. Kuhn, Odegard,
and Powel.
Mr. Odegard reports that he expects
the tabulation of the results will be com-
pleted the middle of next week.
GRAVES.
Regraded Unclassified
FIELD ORGANIZATION News Letter
DEFENSE SAVINGS STAFF
TREASURY DEPARTMENT, WASHINGTON, D. C.
PANUARY 31, 1942
NUMBER 37
WANTED-FIGHTING DOLLARS
MAKE EVERY PAY-DAY
BOND-DAY
UNITED STATES
DEFENSE
BONDS-STAMPS
Ask
about
our
pagrell
sacings
plan
The second poster in the Defense Savings Staff's new WAS series.
This poster, designed for display by concerns and organizations that
have adopted Pay Roll Sevings, will 9000 be available. Alwo edapted
to newspaper use, it is illustrated in set fórm as Campaigo So. 5-
Ad No. 2, in the Fortfolio of Newspaper Advertisemente (DSS-195) TO-
cently released to State Aiministrators gnd the press,
Regraded Unclassified
Neses Letter
News Letter
MUSICAL DOLLS TO BOOST BALES OF DEFENSE STAMPS
Stamp Act Of 742
2U
A notable collection of dalla - beautifully costumed and authentic
7009
AMERICA
replicas of American women of history, vives of the presidents,
no
GUARD
Indian of all history - will soon be seen in prominent department shores
throughout the country in connection with special efforts of these shores
to sell Defense Stamps and fo-
cas attention upon other phases
of National Defense.
The "Defense Doll Tour"
opens in Boston's Jordan
Marsh store February 2, Mise
Audrey Kargere, owner of the
collection, will be in attend-
once and will explain the
many interesting features of
CARICAL
the exhibit. State Adminis-
trators will be advised of the
date of Miss Enrgere's arrival
ARD
in their community.
When the dolla reach
Joliet, Illinois, DD March 16,
where they will be shown by the
M. A. Felman Company, their
IT WILL LICK THEM
arrival vill, it 1s confidently
predicted, be calabrated by
Gene Elderman Washington Post.
announcement that the 201 employ-
Mise Andrey Largere with one of
can of this store have purchased
her collection of fesous doll
$50,000 worth of Defense Bonds.
dresses.
This is the goal of the campaign
IN THIS ISSUE
DOV under way, according to Personnel Manager Marjorie luckley, who pointe
out that the nearby and Elwood Ordnance Plants late sade attimene
m PAY ROLL SAVINGS Poster - Page 1
of Joliet "national defense" conscious.
DEFINER DOLL Tour - Page 3
FIELD ORGANIZATION NEWS - Pages 4 to 7
LABOR AND INDUSTRY - Pages 8 and 9
À DEFENSE STAMP BALL
SPECIAL PROMOTIONS - Pages 10 and 11
BANK Program Expands - Page 12
An unusual Defense Stamp Ball vas held la the cities of Rock Island
STAMP ALBUM Shortage - Page 13
and Moline, Illinois, and Devenport, lows, on January 23. Spansored by
MORE FILM STARS On Tour - Page 12
the Alpha Chapter of Pai Mu Eappe fraternity, the ball took place sinul-
laneously in three different hotele la this metropolites area, now an
NEV TORN AND DALLAS Retail Store Plane - Page 14
important center of areasent production.
NEV HANDBOOK For Education Committees - Page 15
TO THE LADIES - Pages 16 and 17
Admission to the dance vas $1 per couple but two twenty-five cent
Defense Stamps in an albus were given upon presentation of admission
ARTIST Contributions - Page 18
tickets at the door. The hotels and orchestras donated thetr services,
RADIO Programs and Pay Roll Savings - Page 19
and the receipts of the check-room were given to the Red. Cross.
PICTURES - Page 20
Row about promoting such all affair la your community!
pr
News Letter
FIELD ORGANIZATION NEWS
South Dakota's state organization, which was only brought together
following the Chicago meeting in December, is progressing by leaps and
bounds. Already the state boasts a News Letter -- first issue January
24 -- which includes the following highlights:
100 Rapid City firms enrolled in pay roll savings the first ten
days of B. drive by 8 committee in charge of Marty Beckers.
More than 100 Sioux Falls firms similarly enrolled since January
10 by the Minnehaha County Committee assisted by 80 Sioux
Falls insurance men.
Bond and Stamp sales sky-rocketing in Bennett County, 0, I, Hodson,
chairman, where more than a dozen snappy rallies have been
held.
Sully County, Luther Nelson, chairman, has recorded every man,
woman and child a bond or stamp owner, including Harvey, 36-
hour old son of Mr. and Mrs. Arthur Haub of Onida.
John Morrell and Company, Sioux Falls, has given a stamp album with
a ten-cent stamp to each Sioux Falls school child - 9,000 of
them.
(Left) T. Henry Foster, Pres-
BUY A SHARE IN
ident of John Morrell & Company,
AMERIC
exchanging smiles with one of the
30,000 children in Sioux Falls,
S. D., Topeka, Kan., and Ottumwa,
Iowa, to whom the company is
furnishing an album and a stamp.
"We are going to start the ball
rolling in this way," said Mr.
Foster, "and expect that the boys
and girls will then help carry on
NSE SAN
the war against the aggressor
DS AND ST
nations. and also start them-
selves on the path of patriotism
and thrift."
Chairman Andrew Hedman of Day County is an effective committeeman
in his own right, while his son, Duke, is credited with downing five Jap
planes on Christmas Day.
"We are most happy." say Administrator Christopherson and
State Chairman Walter Burke, "When we hear that your banks and
post offices cannot keep enough bonds and stamps on hand. That's
what we want to do - sell them faster than they can be had."
- 4 -
Regraded Unclassified
News Letter
FIELD ORGANIZATION NEWS
Clermont. Florida, records the purchase of $63,315 worth of Do-
fense Bonds and Stamps, an average of $37 for each of its 1,680
people.
WATCH OUT HITLER! When
Republicane and Democrate in
America join hands, they mean
business.
In the picture are (left).
Mrs. Pearl Waters, Republican
National Committeewoman, and
Mrs. Lennard Thomas, Democratic
National Committeewoman, getting
together for Defense Bonds at
the meeting of the Women's Divi-
sion of the Defense Savings
Committee for Alabama, held
January 14.
Ted Jones, Chairman of the state theatres sub-committee for New
Mexico, brought out last August a 20-page manual offering local theatre
owners and managers a great variety of suggestions on how to make their
sudiences Defense Bond conscious. Recently Chairman Jones circularized
his associates with a 7-page supplement bringing his earlier program up
to war tempo,
"A country worth fighting over
is a country worth fighting for" --
Clarence Coleman (seated, left),
Democratic State Chairman for Wash-
ington, and Thomas Oakshott (seated,
right), Republican State Chairman,
eigning joint statement in presence
of Joel 3. Ferris (standing, left),
Chairman Washington State Advisory
Committee, and Saul Hans (standing,
right), State Administrator.
The 7,000 party workers of the
two political organizations were put
nt the disposal of the Defense Sav-
ings Staff.
"ENLIST WITH THE DEFENDERS - BUY DEFENSE BONDS!"
- 5 -
News Letter
News Letter
VIBLO OROANITATION USVS
FIELD ORGANIZATION JEWS
A special meeting of the Oklahoma State Defense Sevings Committee
⑉ held in Oklahoma City on January 8. The meeting VAI en all-day
In Sheboygan, Wisconsin, Mr. 0. L, Hall, President of the Bank of
session and vas featured by the announcement of Honorary Chairman,
Sheboygan, delivered an enlightening address on Defense Bunds to the
Governor Leon C. Phillips, that 15,000 State employees under his super-
local Woman's Club. In the course of his talk he made the following
vision would immediately sign up for the regular purchase of Defense
remarks, which should be taken to heart by everyone.
Bonds and Stamps.
"Ve Americana will have to anke up our minds to buy De-
Pictured here from left
fense Bonds in ever increasing amounts or ve are going to
to right, Governor Phillips,
find that instead of the personal privilege ve now have of
State Chairman L. H, Wents,
saving and investing a part of our earnings to provide the
and Administrator F. C. Junes
purchasing power for the adjustment period which is sure to
conferring on the State ex-
come, it will be taken away from 110 by taxation in sae form
playees participation in the
or another. Let there be no question in our sinde about
that."
Defense Savings Program. A.
large portion of the all-day
seeting WALE turned over to
Hear what Goehring did to Hitler! Only It ween't the Goering of
promotion of the Pay Roll
the German air force - it vas who Coshring of Flaxville in northeastern
Savings Flao in Oklahoma.
Montana, who announced recently that his town had raised $65,975 in De-
fenee Savings males since last May, which is an average of $244.35 for
each inhabitant. The Flarville per capita sale of Series El Bunde for
December was $62.50. Ene any community asceeded this figure?
Picture at right shows
come of the more than 1500
At the University of Oklahoma
employees of Prederick &
students recently conducted a whirl-
Nelson Department store in
wind campaign which resulted in the
Seattle, Washington, filing
starting of more than 3,000 twenty-
up to stage to turn in pay
five cent stamp books on the campus.
roll savings authorization
Defense Savings Stamps are now on
cards at the conclusion of
sale regularly in every fraternity
talk by Deputy Administra-
and sorority house, and every campus
tor Karl M. Richards.
shop.
In State Leaders for Delaware
Secretary Morgenthau announced
January 27 the appointment of Hanry
Pledge Campaign Launched in Oregon
T. Sush, Wilmington banker, to the
chairmanship of the Delaware State
To test procedures to be used in other states in conducting the
Committee, and the appointment of
pledge campaign which vill get under way throughout the country in
Donald P. Rose, also of Wilmington,
February, Oregon is new #agaged in its pledge undertaking. A kick-off
as State Administrator. Mr. Bush
broadcast was held the night of January 20, and the first completed
1.0 A former president of the Wil-
pledge cards began coming in about twenty-four hours later. Bigh soun-
sington Chamber of Commerce, and
University of Oklahoma students
tain roade and trails in the northeast corner of the state were covered
president of the Wilmington Music
receive Stamp Albume for distribu-
with anov and ice, necessitating may deliveries on horeeback. A full
School. Mr. Hoes for many years
tion.
report on this very important experiment will be BOOD forthcoming,
has been active in banking and
business circles in Delaware.
"JOIN IN THE CAUSE BUY DEFENSE STAMPS!"
- 6
- 7
Unclassified
News Letter
News Letter
LABOR AND INDUSTRY
CABOR AND
Last week's News Letter, page 12, carried the story of the 1. 7. of L.
"This 18 not a 25 ver." declares Bulletin No, 5 of the Idaho De-
billion-dollar goal for 1942. On January 23, the United Mine Worbers of
fense Savings Staff. Enforcing the same theme la Idaho comes e letter
America (CIO) issued a circular latter to officers and members of all local
from J. J. 0'Connell, manager of the Potlatch Foresta, reminding Its
unions, urging co-operation with the Defense Savings Program:-
employees that "We are not playing for the little white chips now, Ve
are playing the big game where they use the yellow ones, Many of us
"At the meeting of the International Executive Board, held in the city
are too old to enlist in the forces defending our country, but ve can
of Washington last week, consideration was given to the purchase of Defense
do a lot by supporting those who are in where lbs going 1s tough by in-
Bonds by the various branches of our organisation and by our members.
creasing our Defense Savings Bond purchases. . Ask yourself the ques-
tion, Am I doing all I can and should to back up the boye!"
The International organization in 1941 purchased $50,000 worth of De-
On the right is an enlarged reproduc-
fense Bonds, which La the naximum allowed any one organisation under the regi-
tion of the first button to be Issued by
lations of the Treasury Department.
the Defense Bond Club to employees of Velt-
too Steel in Vest Virginia, while they are
BOND
"On January 1 of this year, the International Union again made # similar
paying for their bonds. The button has .
limit purchase. If rules and regulations of the Treasury Department later
white background and red letters. When
permit, - will be glad to make larger purchases of these bonds.
sumbers of the club have completed paying
for their bonds, they will receive a
"The International Executive Board endorses and urges vigorous support,
similar button in red, white and blue.
of the purchase of Defense Bonds by our membere. We approve the Treasury
Department's pay roll allotment plan applied to the Defense Savings Program.
A similar method of encouraging the
We urge upon our Districts and Local Unions, and their manbers, that this
purchase of Defense Bonde out of Income bee
plan be utilized so that part of the earnings in stated pay periods may be
been launched by the Dry Dock Surings Instity-
utilized and set aside for the purchase of Defense Bonds.
tion of New York City, Its Victory Club operates
like a Christmas club, with weekly deposite ranging from 50# opeard.
This usa the procedure followed generally in the mining industry in
Members of the club receive the button pictured below. The National
the 1sst World War for the purchase of Liberty Bonds.
Association of Mutual Sevings Banks 160 last 42nd Street, 3, T. 0,)
offers its member banks similar buttons, with the individual branch
This is also a practical way for our members to back the armed forses
DATE inserted, at podarate cost.
of our nation, thousands of whole are from the ranks of the United Mine Brk-
ers of America; many of whose have already given their lives in defense of
our nation and its institutions.
There New For - -
From the Rev Tork bead-
"The International Executive Board, therefore, calls upon all branches
of our organization and our mambers to lend their fullest assistance in this
JOIN THE DRY DOCK
quarters of the American
Thread Company, whose mill
all-out means to total victory. fie urge the of ficers of the various branches
Is located In Willmantic,
of the organization to co-operate fully with our members in the Local Unions,
VICTORY
DRY
8006
Connecticut, COMB the come
with the respective coal operators' associations and with the government in
that 1,516 employees Join-
working out the necessary details so sa to meet local and individual needs
ed in Pay Holl Savings 10-
and requirements in order to insure the success of this great program."
CLUB
tween December 20 and 280-
MATY 3, authoriting weekly
- -
deductions of $1,997. In
Signed "Yours for Victory," by John L. Lowls, President,
WIN THE W.A.R
Philip Murray, Vice-President, and Thomas Kennedy, Secy.-Treas.
addition to the foregoing,
PAYMENTS
the will made cash sales
of Series 2 Bonde to 86
P. 1. Fagen, President of Matrict No. 5, United Vine Workers of America,
r i i
has sent . similar letter to the Local Unions in the Pithaburgh, Pa. district.
I I i I 1 I
-
employees, with e maturity
- - - les M -
- of - - - -
value of $20,300.
President Fagan's measage asks local members to maintain the proud and envi-
- - -
able record set by the United Mine Workers during the first World War. PM
are hopeful," he concluded, "that you will continue to do your part in the
bettle of freedom by buying Defense Bonie, and more Defense Bonds."
- 8
Regraded Unclassified
News Letter
News Letter
SPECIAL PROMOTIONS
SPHOTAL PHONOTIONS
On January 22, the Pocatello (Idaho) Central Labor Union adopted
President Herber: 2. Hopkins of Civitan International has enggish
a var resolution pledging its members to *co-operate fully with all
ed that each Civitan 0lub begin immediately . Buy-A-Bond-A-Day campaign.
local, state, and Federal agencies for the civilian and national de-
To stimulate club rivalry, the bond sales will he scored for purposes of
fense and to purchase all the Defense Savings Stamps and Bonds
oational publicity -- e $25 bond to count 10 pointe, $60 bond 15 points,
that ve are financially able to buy."
$100 bond 20 points, and 40 da. President Hopkins bas pointed out that
Civitan was founded during World Var I to help solve civic problems
The Walter Field Company. Chicago mail order house, plans to
crested by the crisis. "Civitan la now in a position to work effectively
distribute to its customers this coming year some 800,000 circulars
on a nation-wide basis," he added, orging the continuance of Duy-&-Nand-
inviting you to Woin the 'Loyal Order of Americane' by buying " many
A-Day campaigns for as long 68 the seed laste.
Defense Sevings Bonde at you can." The reverse of the circular gives
an order form for purchase of Series 2 Bonds direct from the Treasurer
Marrill Igach. Pierce, Fenner and
of the United States. Many business firms carrying on an extensive nail
Senne, con of the country's largest
order trueiness or conducting & large volune of currespondence are dis-
stock exchange firms, has launched a
tributing similar form.
plan for merchandising Defense Bonds
investment
in its 93 offices in cities through-
FORSAFETY+ INCOME
out the United States. The plan,
RITY
Pictured at the left 18 the
sanctioned by the Treasury Depart-
Stamp booth in Grand Central
sent, emphasizes Defense Bonds pri-
Terminal, New York City, which
marily as an investment, "on the
YOUR DEFENSE SAVINGS
vse recently opened "for the
theory that a greater investor sp-
STAMPS HERE
duration." Postmaster Albert
peal can be made on this basis than
TODAY!
Goldman and Deputy Administrator
by patriotic argument alone," said
John Whitney Bichmond are well-
Les G. Griffith, Pitteburgh Manager
- - Card
ing stamps to children as they
of the firs. The small poster
break their banks. Sales have
illustrated at the right la attrac-
averaged nearly $1,000 a day
tively printed in red, white, and
since this booth vas installed,
two shades of blue.
The January issue of Life
Fraternal
clation News carries full informa-
tion on the activities of the National
COPY fu no
The Lione International
Association of Life Underwriters in
organization has offered to
co-operation with the Defense Savings
assist the Defense Savings Pro-
Program.
(TM) In any vay possible. State
Administratora are now being sent
*Selling Bonde is DD longer . bobby," said Mr. William H. Andrews,
carde giving the names and ad-
II., National Chairman of the Life Underwriters' Committee for Defense
dresses of individual Lions who
Savings. the original pasce-time 1dea of one day a month is
have been designated 03 contact
out, Everyone In the country is working overtime underwriters
men with local Defense Savings
must do that too." Approximately 10,000 life underwriters are actively
Committees. These nes, and the
at work in the country as volunteers selling bonds. They have made con-
organization they represent, can be of such assistance in the forthoom-
tact with about 8,500 firm, large and mall, and have made preliminary
log pledge campaign. But the co-operation of the Lione Club 1e not
contacts with more than 2,000,000 employees, of which acre than 1,600,000
limited to the pledge plan - It is A long-range offer to help the De-
have now been enrolled in the Pay Soll Savings Plan.
fense Bond Program et every point.
Impressive as this figure after little more than two months
of work, the Underwriters realize that it is less than three per cent of
"SUPPORT THOSE WHO ARE SERVING -- BUT DEFENSE BONDS!*
the amount of Liberty Bonde sold by their organization during 1917 and
1918. The Association 10 saking the members so redouble their afforts.
II
- LO -
News Letter
News Letter
Temporary Shortage of Stamp Albuse
Banks
Not only has the public demand for Defense Sevings Bunde run aboad
Left, lobby desk
of the supply since Pearl Harbor, but the demand for Stemp Albuma has
of the first Intional
practically exhausted post office stocks of this item,
Bank of Lincoln, Nehr.,
where customers may
An order for 60,000,000 Stamp Albums, in 10, 25, and 50-cent depasi-
conveniently purchase
nations is now in production. Delivery of 2,500,000 albums to two die-
Defense Savings Bonds,
tributing centers - the Fourth Assistant Postmaster General in Weshington
Defense Stamps are not
and the Postmaster for Nov York City - 1a scheduled before the end of
sold at this desk, but
January. Re-distribution to post offices throughout the country will be
are available at all
made immediately thereafter,
of the cashiers' cages.
Howard Freeman, cash-
ier of the First
File Stare
National, has arranged
special lobby displays DO Dafense bonde at the bank since last summer.
Recent issues of
the Neve Letter have coa-
the American Inetitute of Banking launched January 14 Its national
tained stories on the
program on behalf of Defense Savings Bonds and Stamps. Although banks
Defense Savings activi-
have co-operated with the Treasury since the beginning of the Defense
ties of Durothy Lanour
Savings Program, stated President George T. Newell in his letter to the
and the late Carole
Institute's members, this initial work can be supplemented in many vays.
Lombard. Saby, the
All bank employees, whether immediately engaged in the sale of defense
"Elephant Boy," is now
securities or not, are to be educated
8. Minute Nen for the
on the major aspects of the Defense Bond
Treasury Department.
Program so that they can pass on this
The young Indian star
information to the general public outside
and his plear elephant
of business hours as well as during the
vill tour the country
working day. To get this program under
as guest of the neve-
vay, President Newell's letter vas so-
paper carrier boys to
companied by a statement of seven objec-
aid them in their cap-
tives in the defense-financing program.
paign to sall Defense
and & list of ten suggestions for the
Stampe and Bonds. The
educational forume which are to be held
services of Sabu have
by Institute's committees ne public
been placed at the die-
relations.
posal of the Treasury
by Alexander Korda, pro-
"The var has a job for you, too!"
ducer of Budyard Kip-
Dafense Bond Advertisement of the Rhode
ling's "Jungle Book,"
Sabu, the "Elephant Boy'
Island Hospital National Bank, Provi-
starring Sabu. United
dence, Pawtucket, and Woonsocket, R. I.
Artists will furnish Bernie Kamber, of the Publicity Department, to be
"Tackle this job earnestly. Buy
in charge of the your. Sabu visited Washington briefly on January 25;
Defense Bonds Nov!* and make continued
his itinerary will take his to 24 other cities in the country.
AMOUNT
-
purchases A regular part of your budget.
Judy Canova. famous Republic Pictures singing star, visited Char-
lotte, I. C., on January 18, as as hunor guest at the thirtieth annual
convention of the Theatre Owners of North and South Carolina. Mine
Canova participated in 6. public sale of Defense Bunds by the Macklen-
Evening Bulletin, Providence,
burg Defense Bond Committee, along with Junes J. Walker, former Mayur
Rhode Island.
of New York City.
13
News Letter
News Letter
11 111 SCHOOLS
Another Cartoonist Recruit
POLVICTORY
1
only
ALL
BUY
(8) will 200
-
J. R. Williams, creator of
Parent-Tembers Invest in Defense Savings
- But
URITED
The
-
& 5 F
the famous "Ous Our Way" charac-
print
Test
ters, has drawn the cartoon (left)
The National Congress of Parents and Teachers, Inc. invested $25,000
for the exclusive use of the Ameri-
of its endowment funds in Defense Savings Bonds last month when the Isscu-
can Labor Press on behalf of the
tive Committee met in Chicago. Mrs. James K. Lytle, of Los Angales, BE
Defense Savings Program for Vic-
national treasurer, unde the purchase. She said it VAI done to encourage
tory.
state F. T. &. congresss, districts, councils, the 28,000 local units,
and the 2,500,000 members of the association to invest their ovn money In
similar fashion.
NEW YORK STORES PUSHING SALES OF
STAMPS AND BONDS
Shorily before the Executive
Committee sessions speaed, James
Clarke of the Education Division,
& detailed plan for the promo-
tion and sale of Defense Sevings
BUY
Defense Savings Staff, conferred
with Mrs. Lytle, Mrs. Villiam
Stamps and Bonds by New York stores
ADMI -
Klatter, president, and other na-
has been prepared by the Retail
tional P. T. A. officials about
Publicity Committee of the Greater
UNTIL THE an DONEI"
ways in which the organization
New York Defense Savings Staff.
could expand its Defense Sevings
The plan 10 presented in a nineteen
antivities smong its members and
page mineographed brochure which
in co-operation with the schools.
the chairmen of retail divisions
General endorsement of the Defense
of large city Defense Savings
Savings Program has been part of
Committees can secure from William
the National Congress' official
Howard of R. E. Macy & Company,
Mrs. James I. Lytle, national P. ,
program for 6 good many months.
Some of the suggestions in this retailere manual:
A. treasurer, and James Clarke, De-
fenee Savings Staff, Washington, D.C.
"Wherever possible a permanent window should be assigned to the
promotion of Defence Savings Stamps."
Handbook for Education Committees
"Telephone order hoard transactions should be concluded with
some such reference as:
Pictured at right is the cover of the
DBV Handbook for Education Committees,
'And how many Defense Stamps can I charge to your account
prepared by the Education Division of the
today, Mrs. Jonnet' or,
Defense Savings Staff after consultation
with many Defense Savings workers in the
'Mrs. Junes, I thought you night be interested to know that
field. The Bendbook is intended to help
Blanks has unde arrangements to sell Defense Stamps. Va
Education reprosentatives on State and
have a. special booth on the Street Floor and I hope you will
Local Committees, or sub-comittees, with
buy some the part time you are in the store."
problems of procedure connected with the
promotion of Defense Savings among pupils
and teachers. It will also help Educa-
HANDBOOK
"Each store should establish its OMB sales goal for a specified
Education
period of time, One method would be to take 15 of the
tion representatives co-ordinate their
COMMITTEES
store's anoual volume as a goal to be reached in two months."
work with other local Defense Savings
- ...... -
activities.
Courtesy copies of this essual, and of the Dallas, Texas, retail
of this Bendbook for every Defense Savings Committee member who
stores plan will soon be sent to State Muinistrators.
Copies Education any be obtained through State Administratore, Bo. 179.
were representing recently notified of its publication in Field Mesorandum
16 -
14
News Letter
News Letter
TO THE LADING
10 111 LADIES
General Federation Vomen's Club Pres-
ident Stans First Pladge in the Back
American Vomen's Voluntary Services, Inc.
Helps so Sell Defense Bonds and Stamps
At the anoual seesion of the
General Federation of Women's Clubs
Attractively uniformed, Mrs. Treberne-
held in Washington last week, Mrs.
Thomas. who le Secretary of the American
Sara Whitehurst, President, signed
Women's Voluntary Services, Inc., and Mrs.
the first of the new Defense Sav-
Alesander Hamilton of the New York Branch,
ings pledges in the last, Setting
CARE to Vashington to offer the services
an example to the ambere of her vast
of their organization to retailers through-
out the country who eight wish to net up
organisation, Kre, Whitehurst promised
bouths to sell Defense Stamps and Bonds
south. to invest $100 in Defense Bunds every
and distribute literature. Major Benjenia
Same who heads the retailer's advisory
comittee on Defense Savings, introduced
The General Federation offered to
tham to retailer's representatives who
co-operate with the State Defense Bay-
Harold N. Graves, Assistant to
had COMB to Washington to discuss the pro-
ings Committees in the pledge compaign
motion of Defense Savings is their stores.
Secretary Morgenthau, watches
scheduled for this Spring. *Our State
while Mrs. Whiteburst signs
Federations vill help in any way that
A week after this visit the National
Major I'am, Mrs. Trabarne-
pledge,
they cas," Mrs. Whitehurst said. "Per-
Vomen's Division of the Defense Savings
Thomas, and Mrs. Alexander
hape ve can most effectivaly aid by
Staff called upon Miss Anita Phipps,
Hamilton
educating our members to the need of systematically purchasing Defense
Chairman of the Washington Unit of the
Bonds and Stamps. They must understand that it Is only by putting money
American Women's Voluntary Services. to
regularly into Defense Savings that they will help vard off inflation."
supply volunteers for the Defense Savings booth at the General Toders-
tion of Vomen's Club annual board meeting at the Mayflower Hotel.
Mrs. John D, Robinson, Chairman of Bonds and Stampe for the General
Federation, anoounced a contest to be held among the States, with prises
to be offered the three State Federations having the highest percentage
of members (or their busbands) signing pledges. Mrs. Robinson sald,
AWVS Pledge Centessers
"This does not BOAD that our members wuet canvase for pledges, although
The American Vomen's Vol-
we will be happy to do that If It helps the local Defense Savings Commit-
teas. But it does Been that ve will check our clubs to find out how many
untary Service workers answered
members have signed the pay pledges." The first prise for the contest
questions put to them by the
delegates to the General Federa-
will be 0 $100 Series 1 Bond, con-
time of Vomeo's Club Board Meet-
tributed by Mr. Villiam F, Witherow,
ing about the forthcoming pleigs
who vas a speaker at the General
campaign. They also managed to
Federation's Defense session.
secure quite A. number of sign-
tures from VOBER attending the
Women of the General Federation
convention, who promised to buy
listened intently to Harold N. Graves
Defense Bonds and Stamps regu-
and Leon Henderson, who talked about
larly and La specified amounts.
methods of controlling Inflation.
Mr. Graves spoke on the regular pur-
Other Unite of the AWYS.
chase of Defense Bonds: Henderson on
AVVS voluntears sign up GFVC dele-
are active throughout the country,
the need for affective price control
gates in pledge campaign held at
and can be of help to Defense
legislation. Afterwards the audience
Washington's (D. C.) Mayflower
Savings projects.
participated in . lively discussion
Hotel. Army officers look on.
on the subject of inflation, and kept the two speakers busy answering
questions. (See picture at right),
- 16
News Letter
News Letter
Artists
0% AIR
Almost every mall brings
to the Defense Savings Staff
Madio Prograza for the Coming Week:
idease for alogans and posters.
Some of the sketches submitted
Monder. February 2. *FOE AMERICA WE SING,* Dr. Frank Black's Orchas-
are indifferent; many of then
ITS and Chorus Guest Stare: Felix Knight. Tenor and Mary Bestman,
very good: and all have been
Supreno. 9:30-10:00 PM (EST), NBC Blue Network.
submitted in 5 spirit of help-
fulness and patriotian.
Monday, February 9. "FOR AMERICA VZ SING,* Dr. Frank Black's Orches-
Ira and Choris Guest Stors: Arthur Carron - Netropolitan Opera and
The painting illustrated
Lydla Summers - Soprano, The Sev Opera Company, 9:30-10:00 PM (EST),
at the right vae submitted by
mc Blue Network.
Mr, William 3. Ingraham of
Springfield, Illinois. The
rull effect of this striking
printing cannot be appreciated
A total of 159 radio stations have informed the Radio Section of
wishout the colors, but Uncle
the Defense Savings Staff that their employees have signed up 100 per
Sec's determination to wipe
cent for the Pay Roll Savings Plan, Sixty-alx other radia stations
the blot of the Japanese
have installed such plane and have signed up a large number of their
lalande off the flate of the
employees.
United States is very evident.
Participation in full by the employees of KARK, KOHI, KLBA, of
Little Rock, Arknosas, and KFJ2, KGKO, and WEAP at Fort Worth, Texas.
$48,000 Salary Increases in Defense Bonds
makes theee two cities the first 100 per cent cities in towns of three
or more radio stations. Other 100 per cent cities are Evanaville,
In voting the appropriation ordinance for 1942, the Mayor and
Indians, Springfield, Missouri, and Albany. Hey York, each having two
Council of Macco, is., granted a 10% Increase in the salaries of all
radio stations.
City employees making less than $175 per month, the antire increase,
amounting to about $48,000 to be paid in Defense Bonds or Stemps.
Eight out of seventeen stations in Kensas are algned up 100 par
cent, making the best record by proportion of any State in the Usion,
"I wish 11 were possible," wrote
although Texas has largest number of 100 per cent stations, eleven
Mayor Charles L. Bowden to State Ad-
followed by Celifornia with ten and Sew Tark with nine.
ministrator Allen, "for every fire who
grants BA increase to make it on the
The third in the weekly serias of one-half hour radio above spon-
same basis as we have done. The time
sured Jointly by Boeton's Hotel Statler and Radio Station VBZ took place
is here when it whall be e privilege
on Saturday night, January 24. Featuring the music of Leighton Noble
to give back to the Government e part
and his orchestra, guest appearances and announcements on behalf of De-
of the things they gave to us -- for
Tabse Bonde and Stamps were cade by Mayor Maurice F. Tobin, of Boston
our Government needs 18 and our sup-
Lynn U. Stambaugh, national commender of the American Legion: Bake Rose
port DOW, and we need our Government
Marie end Pat O'Brien, motion picture stare.
and its protection always."
The total pledges from this one program amounted to $16,000 -
which runs the total of the three broadcaste to date to $42,000. Public
The "Inveet in Victory" sketch
response is mounting and the sponsors of the program have definitely
(left) was designed by Phil YOB Phul
decided to continue it through several works to come.
and Associates, who have been doing
splendid work for the Elng County De-
The Williamson Cardy Company of Chicago, m., was recently coo-
fense Sevings Committee in the State of
gratulated by the Treasury Department on their radio program, *Famous
Washington. This concern also handles
Jury Triale," for the splendid job the company and the employees have
poster work for the Boeing Aircraft
done on their Pay Roll Defense Savings Plan,
Company.
19
18
News Letter
PULLIAM EMPLOYEES BUY BONDS, TOO!
Eugene C. Pulliam,
president of Central
Newspapers, Inc., and
executive chairman of
the Indiana Defense
Savings Staff, had
been so busy urging
all firms in the State
to co-operate in the
Pay Roll Savings Plan
that he had forgotten
his own plants until
the managers of his two
radio stations and three newspapers presented him with signed applica-
tions from 209 employees. The five plants are enrolled 100%. Shown in
above, (left to right), are Howard Zinn of the Huntington Herald-Press;
Jess Batterton of the Lebanon Reporter; Victor Lund of Station WAOV,
Vincennes; Howard Greenlee of the Vincennes Sun-Commercial; Gerald Al-
bright, treasurer of Station WIRE, Indianapolis; and (seated), execu-
tive chairman Pulliam.
RAYMOND IS NO SISSY!
OFFICIAL BUSINESS
WASHINGTON, D. C.
DEFENSE SAVINGS STAFF
TREASURY DEPARTMENT
Eleven-year-old Raymond Bowman
of Atlanta, Ga., who is too
young to fight, but plenty big
to launder the dishes, has con-
tracted with his mother to wash
$
'em up after every meal -- at
so much per washing -- to earn
PAYMENT OF POSTAGE. 8300
money to buy Defense Stamps.
PENALTY FOR PRIVATE USE TO AVOID
Besides this, he is scouring
the neighborhood daily for old
papers and boxes.
- 20 -
Regraded Unclassified
Stock of Series E Savings Bonus on Bend
January 15, 1942 to date
(In thousands of niecee)
: Stock on hand :
:
Bonds
Stock on hand
IBM
:
beginning
Sales
:
: manufactured
close of
deliveries
of day
this day
:
:
this day
day
this day
Jan.
15
6,569
320
750
6,999
1,000
16
6,999
445
775
7,329
750
17
7,329
163
800
7,966
1.000
18
7,966
none-closed
none-closed
7,966
on
19
7.966
665
800
8,101
eng
20
8,101
218
800
8,683
1,000
21
8,683
337
800
9,146
-T
22
9,146
381
800
9,565
1,100
23
9,565
377
800
9,988
2,000
24
9,988
263
800
10,525
1,00
25
10,525
none-closed
none-closed
10,525
26
10,525
487
1,000
11,038
7,000
27
11,036
186
1,000
11,852
28
11,852
251
1,000
12,601
29
12,601
265
1,000
13,336
30
13,336
283
800
13,853
Office of the Secretary of the Treasury,
Jenuary 31, 1942
Division of Research and Statistics.
Includes stock in hands of (1) Federal Reserve Banks and branches, (2) Post offices,
(3) Federal Reserve Bank issuing agents, and (4) Treasury vaults in Washington.
Regraded Unclassified
CONFIDENTIAL
Unfilled Orders for Savings Bonds at the
Federal Reserve Banks and the Post Office Department
January 15 to date
(In thousands of pieces)
: Unfilled
:
:
Unfilled
:
: orders at
New orders
Bonds
:
:
orders at
Stock of
IBM
:
opening of
received
manufactured
close of
bonds
deliveries
:
:
:
: business
:
today
:
today
business
on hand*
:
this day
Jan.
15
550
660
750
455
231
1,000
16
455
773
775
426
204
750
17
426
672
800
298
204
1,000
18
298
none-no mail
none-closed
298
204
800
19
298
204
800
202
704
825
20
202
204
800
86
1,184
1,000
21
86
411
800
59
1,546
875
22
59
697
800
86
1,676
1,000
23
86
569
800
50
1,871
1,000
24
50
727
800
28
1,922
1,000
25
28
none-no mail
none-closed
28
1,922
-
26
28
490
1,000 1/
7
2,011
2,000
27
7
434
1,000 1/
7
2,177
-
28
7
474
1,000
6
2,102
2,000
29
6
407
1,000 2/
8
2,097
#
30
8
426
800
6
1,869
2,000
Office of the Secretary of the Treasury,
January 31, 1942
Division of Research and Statistics.
Bonds in Washington vaults only.
Includes 400 thousand pieces manufactured for inventory in the field.
Includes 600 thousand pieces manufactured for inventory in the field.
Regraded Unclassified
UNITED STATES SAVINGS BONDS
Comparative Statement of Sales During
Last Twenty-three Business Days of January 1942 and December and November 1941
(November 1-29, December 4-31, January 5-30)
On Basis of Issue Price
(Amounts in thousands of dollars)
:
:
:
Sales
Amount
of
Increase
:
:
:
Percentage of Increase
Item
:
:
:
:
November
January
:
December
2
January
January
:
December
December
1
:
:
:
over
:
over
:
over
:
over
:
1942
:
1941
:
1941
:
December
:
November
:
December
:
November
Series I - Post Offices
$142,323
$ 97,439
$ 37,997
$ 44,884
$ 59,442
46.18
156.4%
Series 1 - Banks
469,591
228,701
71,478
240,890
157,223
105.3
220.0
Series I - Total
611,914
326,140
109,475
285,774
216,665
87.6
197.9
Series 7 - Banks
70.059
30,446
18,978
39,613
11,468
130.1
60.4
Series G - Banks
286,310
135,983
105,035
150,327
30,948
110,5
29.5
Total
$968,282
$492,568
$233,487
$475,714
$259,081
96.6%
111.0%
Office of the Secretary of the Treasury, Division of Research and Statistics.
January 31, 1942.
Source: All figures are deposits with the Treasurer of the United States on account of proceeds
of sales of United States savings bonds.
Note: Figures have been rounded to nearest thousand and will not necessarily add to totals.
Regraded Unclassifie
Daily Sales - January, 1942
On Basis of Issue Price
(In thousands of dollars)
Post Office
Bank Bond Sales
All Bond Sales
Date
Bond Sales
Series E
Series M
Series 7
Series G
Total
Series E
Series I
Series G
Total
January 1942
1
$ 3,982
# 10,229
$ 1,964
$ 7.605
$ 19,798
$ 14,211
$ 1,964
$ 7,605
$
23.780
2
4,802
10,736
2,056
7.779
20,571
15,538
2,056
7,779
25,373
3
4,457
9,557
1,278
5.453
16,289
14,015
1,278
5.453
20,747
5
9,684
26,724
3,240
13,704
43,668
36,408
3,240
13,704
53.352
6
6,711
7,659
1,341
6,778
15,778
14,369
1,341
6.778
22,489
7
6,748
21,267
3,692
18,832
43,790
28,015
3.692
18,832
50.539
8
7.509
21,297
3,821
12,871
37,989
28,306
3,821
12,871
45,498
9
5.746
12,359
1,798
4,765
18,923
18,105
1,798
4,765
24,669
10
4,398
16,031
1,558
6.355
24,244
20,429
1,858
6,355
28,641
12
10,187
37.483
3,830
14,353
55.666
47,670
3,830
14,353
65,853
13
7,902
15,059
2,507
11,944
29,510
22,961
2,507
11,944
37,412
14
4,706
19,939
3.701
14,293
37.933
24,645
3,701
14,293
42,639
15
6,444
16,597
2,243
13,283
32,123
23,041
2,243
13,283
38,567
16
5,721
26,239
4,319
14,078
44,637
31,960
4,319
14,078
50,358
17
4,830
6,933
759
3,008
10,700
11,763
759
3.008
15,530
19
8,835
39,000
3,946
16,599
59,545
47.835
3,946
16,599
68,380
20
5,155
10,549
2,285
10,551
23,385
15,703
2.285
10,551
28,539
21
4,886
19,375
3,538
15,566
38,479
24,261
3.538
15,566
43.365
22
5,161
22,257
3.973
9,850
36,080
27,418
3.973
9.850
41,241
23
5,908
23,392
2,652
8,004
34,048
29,300
2,652
8,004
39,956
24
4,655
15,820
2,239
5,344
23,403
20,476
2,239
5.344
28,058
26
7,095
39,997
5,022
17,516
62,535
47,093
5,022
17,516
69,630
27
4,967
11,504
3.569
23,125
38,199
16,471
3,569
23,125
43,165
28
5,318
18,394
2,656
18,636
39,686
23,712
2,656
18,636
45.004
29
4,826
20,123
3,223
12,422
35,768
24,949
3,223
12,422
40,595
30
4,930
21,594
3,845
14,432
39,871
26,524
3,845
14,432
44,802
Total
$155.565
$500,112
$ 75,358
$307,147
$882,617
$655,677
$ 75,358
$307,147
$1,038,152
Office of the Secretary of the Treasury, Division of Besearch and Statistics,
January 31. 1942.
Sourcet All figures are deposite with the Treasurer of the United States on account of proceeds of
sales of United States savings bonds.
Figures have been rounded to nearest thousand vill not pecessafily add to totals.
Regraded Unclassified
348
TREASURY DEPARTMENT
WASHINGTON
January 31, 1042.
MEMORANDUM FOR THE SECRETARY:
In answer to your inquiry, through
Miss Chauncey: Mr. S. Albert Phillips,
who is being appointed State Administrator
for Kentucky was suggested by Senator
Barkley, as was Mr. Ben Williamson, our
State Chairman.
GRAVES.
349
IAM 1 we
Dear Eleanor:
I know you will be glad to hear
that we have been able to find a place
for Mrs. McAdoo with our Defense Sav-
ings Staff.
Her appointment was effective
January 22, and she will be stationed
at Los Angeles.
Affectionately,
(Signed) Henry
Mrs. Franklin D. Roosevelt,
The White House.
n°f
Suret Lewier 2:30pm
name
Regraded Unclassified
350
January 22, 1942.
Mrs. Kleanor Wilson McAdoo,
Los Angeles, California.
Dear Mrs. McAdoo:
You are hereby appointed a Senior Defense Securities
Promotion Specialist, CAF+12, on the Defense Savings Staff
of the Office of the Secretary, with compensation at the
rate of $4,600 per annum, payable from the appropriation,
*Expenses of Loans", Act of September 24, 1917, as Amended
and Extended. This appointment is to be effective on date
of entrance on duty and continue for the duration of the
national defense program.
Sincerely,
(Signed) 1. Horgenthaw. in.
Secretary of the Treasury.
n.m.c.
JJ.jd
Capies to Thompson
Regraded Unclassified
351
JAN 31 1942
Dear Harolds
I want to tell you of By genuine appreciation for the
excellent my in which you have handled your assignment in
supervisory charge of the Procurement Division, the Bureau
of Ingraving and Printing, and the Bureau of the Mint. As
you know, the only reason I an relieving you of this assign-
sent is because you have taken over the arduous task of
carrying on the operations of the Defense Savings organi-
sation. This in itself 10 more than a full-time job and
its @@@@@@@ is due in no small measure to the tireless and
able manner in which you are directing this major activity
of the Department.
Sincerely,
(Signed) Henry Morgenthau, Jr.
Mr. Harold 1. Graves,
Assistant to the Secretary.
WNT:cf
Original Handed to Mr. Graver by buy.
n.mc.
Jhompson,
this
Regraded Unclassified
152
war department
WASHINGTON
VID 029.21
JAN 31 1942
(1-24-42) VB
Conorable Henry Morgenthau, Jr.,
The Secretary of the Treasury.
wear Menry:
It was extremely good of you to take the time
from your busy day to interest yourself in our office space
problems. Because of your consideration of our needs by
allowing the Public Buildings Administration to remain in
your Procurement Building, the War Department will occupy
temporarily Temporary Building "I". This will help relieve
sume of our congestion and will very materially help in the
war effort.
I take this opportunity to express to you my
appreciation and that of the War Department.
Sincerely yours,
There L Sheuson
Secretary of MR.
Regraded Unclassified
OFFICE OF FACTS AND FIGURES
WASHINGTON
January 31, 1942
Dear Henry:
Thank you for your letter of January 5th. We
have now received replies from all of the agencies repre-
sented on the Committee on War Information, agreeing to
the poster coordination plan approved by the Committee on
December 29.
I note that you have appointed Mr. Ferdinand Kuhn,
Jr., as liaison between the Treasury Department and the
Office of Facts and Figures. Our Graphics Division will
communicate with Mr. Kuhn within the next few days with the
view to working out with him specific plans for coordination.
I feel sure that this cooperative machinery we are
setting up together will be an effective means of clearance
and review, and will result in more effective use of war
posters by the government.
Faithfully yours,
am
Archibald MacLeish
Director, Office of Facts and Figures
The Honorable
Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D.C.
Regraded Unclassified
THE WHITE HOUSE
354
WASHINGTON
January 31, 1942
Dear Henry:
I received the record, Civilian
Defense Series, of the re-interpretation of
the Constitution,and my talk on Medical Progress
on the other side. I want to thank you very
much for sending it to me.
Affectionately,
Thank
395
JAN 31 1942
My dear Mr. Landier
I have your letter of January 23 with reference
to your Community Planoing and Organization Program.
The matters to which you refer will have our prompt
attention and you will be further advised.
Sincerely,
(Signed) 2. derganthaw. JE,
Secretary of the Treasury,
Hon. James M. Landis,
Executive Director,
Office of Civilian Defense,
Washington, D. C.
WNTief
Plato file
Regraded Unclassified
Copy to
Magenthan
OFFICE OF CIVILIAN DEFENSE
WASHINGTON, D. C
1/29/42-
January 23, 1942
Mr. Henry Morgenthau, Jr.
Secretary of the Treasury
Department of the Treasury
Washington, D. C.
My dear Mr. Morgenthau:
The Civilian Participation Office of the Office of Civilian
Defense is now organizing a Community Planning and Organization
Program Division. Although the program is not yet fully under vay I
believe it would be helpful to the federal agencies to know something
at this time of the contemplated plan of operation.
Carrying out the executive order which established the
Office of Civilian Defense, the Division will serve as a center for
coordinating federal civilian defense activities which involve re-
lations between the Federal Government and state and local govern-
ments in other than the field of protection from air raids and similar
emergencies.
It will keep informed of problems which arise from the 1a-
pact of the industrial and military war effort upon local communities.
It will take necessary steps to secure the cooperation of appropriate
federal departments and agencies in dealing with these problems and
in meeting the emergency needs of local communities in other than the
protective fields.
It will consider proposals, suggest plans, and promote ao-
tivities designed to sustain the national morale and to provide op-
portunities for constructive civilian participation in the defense
program. It will review and integrate civilian defense programs of
federal departments and agencias involving the use of volunteer ser-
vices in order to assure unity and balance in the application of such
programs. It will seek to assist state and local defense councils
and other agencies in the organization of volunteer service unite and
in the development of their activities in other than the protective
fields.
It will review existing or proposed navures relating to or
affecting state and local defense activities, and recomend such d-
ditional measures as may be necessary or desirable to assure adequate
civilian defense in terms of maintenance and strengthening of neces-
sary community services.
Regraded Unclassified
Henry Morgenthan, Jr.
-2-
January 23, 1942
We are now proceeding to set up our Clearing House of Infor-
sion on state and local defense activities in our field of operation
is cooperation with appropriate federal departments and agencies. It
is our hope that ve may count on the cooperation of your Agency, BO
essential if the purposes for which this office is being set up are to
A
fulfilled.
At this time ve would appreciate it very much indeed if you
vill make available to us a list of your regular, periodic printed re-
porte. locality and field surveys which contain information as to so-
cial and industrial problems arising in local communities in your field
as a result of war activities, and which my be put at the disposal of
the Clearing House of Information.
May we also have whatever material you can put at our disposal
bearing on such problems, in your field of operation, associated with
activities in (1) the Hampton Roads area; (2) Detroit and the sur-
rounding automobile industry area; (3) Spokane: (4) Fort Worth,
Ye would be glad to have you indicate such information as
should be considered confidential. and to return to you any material
which cannot be permitted to leave your files for more than a short
time.
Would you be good enough to let us know whether there is, in
addition to the reports you are sending us, further information on these
areas which would be of assistance to this office but which cannot be
permitted to leave your files. If 80, could you arrange to give a mem-
ber of the staff of the Clearing House of Information access to these
for study in your office?
It would be helpful if you would let me know to whom we should
address future requests for material with regard to specific fields of
your Agency's work in other geographical areas.
Vo shall be desply grateful to you for your assistance.
Very sincerely yours.
June Jamés M. Landia
Executive Director
Regraded Unclassified
358
stocen up
Feb. 2/9
ck with wrl to see
the kept 90 incoming.
359
JAN 31 1942
Honorable Harold L. Ickes,
Secretary of the Interior.
1/y dear Mr. Secretary:
Further reference is made to your letter of December
10, 1941, requesting information on the use of solld fuels
within the Treasury Department.
The information desired by you is not et hand and I
take pleasure. in transmitting the completed forms showing
the solid fuel requirements within the Treasury Department.
Very truly yours,
(Signed) 2. Morgenthou. 392
Secretary of the Transury.
Encl.
Photo file #
Copies
Regraded Unclassified
UNITED STATES
DEPARTMENT OF THE INTERIOR
OFFICE OF THE SECRETARY
WASHINGTON
ESTIMATED CONSUMPTION AND STOCKS OF SOLID FUELS BY THE
UNITED STATES GOVERNMENT
BITUMINOUS COAL
of Federal Government Department or Agency
Treasury Department
Bituminous coal
State or
territory
Estimated consumption in calendar year 1941
Estimated
Estimated
in which
Percent delivered direct
consumption
stocks on hand
biturinous
to burning equipment
in calendar
coal is
Net tons
In carload
In truck or
year 1942
Jan. 1, 1942
(net tons)
(net tons)
consumed
lots
wagon
labama
110
100
110
45
risons
rkansas
difornia
a.-ando
mectiont
22
100
22
15
:laware
ist. of Columbia
230
100
210
7
lorida
sorgia
iaho
llinois
dians
I
usaa
intradige
135
100
200
010
visiana
7
100
10
5
doe
uryland
Lohd
imesota
4
100
5
2
loads ppi
Lenours
eta
13
100
15
15
bracine
made
ne Bespshire
* Jorrey
100
290
100
290
rth
rolina
101
100
104
9
(Continued on reverse side)
167477
Regraded Unclassified
I
91.3
É
- -
381
UNITED STATES
- 2 .
DEPARTMENT OF THE INTERIOR
OFFICE OF THE SECRETARY
WASHINGTON,
Bituminous coal
State or
Estimated
ESTIMATED CONSUMPTION AND STOCKS or SOLID FUELS BY THE
territory
Estimated consumption in calendar year 1941
consumption
UNITED STATES GOVERNMENT
in which
Percent delivered direct
Estimated
in calendar
visaks on t.
bituminous
to burning equipment
COKE
year 1942
coal is
Net tons
In truck or
Jun. 1, 1%
In carload
(net tons)
(not too
at of Federal Government Department or Agency
consumed
lota
wason
Transury Department
No Requirements
State or
Golgi
Ohio
territory
Oklahoma
in which
Estimated consumption in calendar year 1941
Retinated
Oregon
cella
Percent delivered direct
consumption
Estimated
Pennsylvania
is
Net tons
to burning equipment
in calendar
stocks on hand
Rhode Island
consumed
In carload
In truck or
year 1942
Jan. 1, 1942
South Carolina
lots
neon
(not tons)
(net tons
South Dakota
been
Tennessee
-
Texas
2588
Utah
Vermont
N
Comia
orado
Virginia
recticut
Washington
19829
West Virginia
to of Columbia
Wisconsin
ride
Wyoming
rgla
he
Alaska
inois
Canal Zone
I land
Island Poss. ins
.
Atlantic Ocean
SSS
Pacific Ocean
today
Caribbean Sea
istana
at
fland
Total
Mohnsette
dan
esta
issippi
our
use
4ka
pohire
Bico
forms
vlina
ota
(Contimed di NRIM no)
JOHN
- 2
- 2
INTERRER you
UNITED STATES
DEPARTMENT OF THE INTERIOR
OFFICE OF THE SECRETARY
WASHINGTON
ESTIMATED CONSUMPTION AND STOCKS OF SOLID FUELS BY THE
State or
Coke
UNITED STATES GOVERNMENT
territory
in which
Estimated consumption in calendar year 1941
Estimated
ANTHRACITE COAL
coke
Percent delivered direct
consumption
Retimated
is
to burning equipment
in calendar
stocks on by
-
of Federal Government Department or Agency Treasury Department
consumed
Net toos
In carload
In truck or
year 1942
Van. 1, 29.2
lots
wagon
(not toma)
(net too)
Anthrucite coal
Ohio
Oklahosa
State or
Estimated consumption in calendar year 1941
Estimated
Pennsylvania
territory in
Estimated
Rhode Island
which
Percent delivered direct
consumption
stocks on hand
South Carolina
thracite coal
Net tons
to burning equipment
in calendar
Jan. 1, 1942
South Dakota
In carload
In truck or
year 1942
is consumed
(net tons)
Tennessee
lote
wagon
(net tons)
Texas
Utah
Vermont
Ladna
Virginia
lifornia
Washington
lorado
Burt Virginia
necticut
Elsoonsin
sware
it. of Columbia
Ryoming
vrida
alaska
rgia
he
Canal Zone
inois
Teland Poss. in:
Mana
Atlantic Ocean
a
Pacific Ocean
usab
Caribbean Sea
tucky
dafana
Los
223
100
226
110
Total
7land
40
100
20
3.
isachusetts
higan
masota
adminippi
regurl
tana
raska
ada
Repshire
'Wersey
Mexico
147478
(Contimed on riverse side)
Regraded Unclassified
THE SECRETARY OF THE INTERIOR
WASHINGTON
DEC 10 1941
State or
Anthracite coal
territory in
which
Retimated consumption in calendar year 1941
Estimated
anthracite coal
Percent delivered direct
consumption
Batta
My dear Mr. Secretary:
is consumed
Net tons
to burning equipment
in calendar
stocks
In earload
In truck or
year 1942
Jan. 1,
This is to request information on the use of solid fuels within
lots
wagon
(net tonal
(ast No
your Department.
Now York
40
North Carolina
100
The President, in asking M to act 48 solid fuels corrdinator
40,
North Dakota
14
for national defense, specified certain daties, among which is the
No.
Ohio
12th
one to obtain current data on fuel needs. In this regard, it is -
**
&
sential that I have information on fuel requirements of the United
Cklahom
States Government which is a large user of coal in particular. A
Oregon
similar request is being sent to the other Federal Agencise,
Pennsylvania
Rhode Island
The information reported will be tabulated to show the fuel con-
South Carolina
sumption of the Government by regions during the present calender
South Dakota
year, stocks on hand at the end of the year, and the estimated No-
Tennessee
quirements for 1942. Enclosed are forms upon which the data may be
Texas
listed. It 1s urged that the information be submitted as promptly
Utah
an possible.
Vermont
15
Virginia
100
15
It may happen that the information to be listed in the above
Washington
forms is not available in your central office and its assemblage
West Virginia
will necessitate & canvase of field offices or local installations.
Wisconsin
For purposes of such a canvase, a special form, S.P.C. No. 4, has
Wyoming
been prepared, copies of which will be furnished to your of fice upon
request.
Alaska
Canal Zone
I earnestly recommend that all Agencies of the United States
Island Poss. in,
Government plan their fuel purchases to provide a comparatively large
Atlantic Ocean
supply for storage purposes. Government activities must be protected
Pacific Ocean
from interruptions due to temporary fuel shortages caused by disturb-
Caribbean Sea
ances in mining and distribution.
Sincerely yours,
Total
Harold Z rhes
Enclosures.
Secretary of the Interior.
Hon, Hanry Morgenthau, Jr.,
Secretary of the Treasury.
Regrad Unclassi
Treasury Department
Division of Monetary Researon54
Date 2-4-42
19
To:
Miss Chauncey
1 think the Secretary will be in-
-
terested in glancing at this.
H.D.W.
to Dell
to Hard
2/5-142
withod already 12.
MR. WHITE
Branch 2058 - Room 214
for
10 mg
survints
Regraded Unclassified
TREASURY DEPARTMENT
385
INTER OFFICE COMMUNICATION
DATE January 31,1947.
TO
Secretary Morgenthau
FROM Mr. White
Subject: British Tax Reserve Certificates.
The Chancellor of the Excheduer announced recently the
forthcoming issue by the British Treasury c: a security which
termayers Tay tender for tex payments, along the lines of our
tax anticipation notes.
We have just received E despatch from the American Embassy
in London, giving further information regarding these Tax Reserve
Certificates, which were first offered to the public on December 31,
1941. This information can be summarized as follows:
1. Description of the issue:
B, Issued in units of 3 25 ($100) and multiples thereof.
b, Sold at face value, through banks.
C. May be tendered in payment of national income,
excess profits and land taxes, for taxes due from
the certificate holder at any time not less than
two months and not more than two years from the
date of the certificate.
d. If used in paying taxes, the certificates beer
interest at one percent per annum. Otherwise
only the orincipal is repaid.
B. The interest 16 exempt from income taxes.
2. Advantages of the new security, 38 stated by the Chancellor
of the Exchequer, are:
a. Preventing bank deposite from being swollen by
funds set aside to pay taxes.
b. Helping to smooth out the flow of revenue into
the Treasury.
C. Certificates not used to pay taxes are in effect
interest-free loans.
3. Press reactions were generally fovorable, although it is
considered to be of technical interest rather than of fundamental
importance, since it will not affect inflation or the amount of
saving.
One editorial points out that the tax-exempt feature 18
regressive in principle.
L. Sales of tax reserve certificates between December 23 and 30
totalled to 16.8 million ($67.2 million), which 16 considered e good
response for the Christmas holiday ABABON.
(Embassy despatch No. 2463, London,
Dec. 29, 1941)
Regraded Unclassified
366
TREASURY DEPARTMENT
PROCUREMENT DIVISION
OFFICE OF THE DIRECTOR
WASHINGTON
- 81, 1042
to a 20 DE
are is submitted heregits the operating report el
nurchases for the was enned desirent 21, 1000.
- - the 21 MAI english ACE been Alsos uson
UL 1985 In
if MUI, 10 result, - lobel and
provided
21:6c
to
scotein
- involving return emiz/4
we - 26311 - considerytive D tie in Promotion
of: NOS 120 time and take the Stra with BRUT certrin
18.
DE grouent 109 178 lost 1.00
the JOE - Pluse 1 ex-
TAC* we to tobruary ---, il completed
curchase notice WPLAS cells teknoo or
to: 1-61 or =10
100 1092 de whe
- :
FORDEFENSE
BUY
24
UNITED
STATES
SAVINGS
BONDS
ADTAMPS
us.
Regraded Unclassified
367
OPERATING REPORT - LEND-LEASE PURCHASES
WEEK ENDED JANUARY 31, 1942
TOTAL ALLOCATIONS
$825,722,879.00
PURCHASES PREVIOUSLY
REPORTED
$441,863,654.57
PURCHASES THIS WEEK
18,261,008.97
TOTAL PURCHASES
$460,124,663.54
REQUISITIONS IN PRO-
ESS OF PURCHASE
72,133,790.03
ISITIONS IN PRO-
CESS OF CLEARANCE BY
HAR PRODUCTION BOARD
88,660,412.00 620,918,865.57
UNOBLIGATED ALLO-
CATIONS
$204,804,013.43
Dama
368
JAN 31 1942
My dear Mr. President:
I an enelesing report an our exports
to some selected countries during the week
ending January 17. 1942.
Faithfully,
(Signed) 1. Morganthan, Jr.
Secretary of the Treasury
The President,
The White House.
Enclosure
nmc
Scaret Levin 12.30
capies To Dr when
1/21/42
to to Serge there
Regraded Unclassified
é
369
JAN 31 1942
My dear Mr. Perkins:
five
I - enclosing 5 copies of the report
en our experts to some selected countries
during the week ending January 17, 1942.
Sincerely yours,
(Signed) 1. Morgentham, 12
Secretary of the Treasury
Mr. Mile Perkins,
Executive Director,
Board of Economic Warfare,
2501 Que Street, N. W.,
Washington, D. c.
Enclesures
n.m.c.
By Messenger Steen 12:31
1/28/42
Capital Dr w hite
Ret to Rm. 214/2
Regraded Unclassified
370
JAN 31 1942
My dear Mr. Secretary:
I an enclosing copy of report on our
experts to some selected countries during
the week ending January 17, 1942.
Sincerely yours,
(Signed) E. Horgenthau, Jr.
Secretary of the Treasury
The Honorable,
The Secretary of State,
Washington, D. C.
Enclosure
n.m.c. C.
By Messenger Steen 2:35
HDW:meb
1/21/42
Ret. to Secip office
Regraded Unclassified
371
JAN 31 1942
My dear Colonel Donovan:
I an enclosing copy of report on
our exports to some selected countries
during the week ending January 17, 1942.
Sincerely yours,
(Signed) 1. Morganthau, Jr,
Secretary of the Treasury
Colemel William J. Donovan,
Coordinator,
Office of Coordinator of Information,
old National Institute of Health Building,
25th and 8 Streets, N. N.,
Washington, D. C.
Inclesure
nmc.
HDWsmoh
By Steen 12:35
Messenger
1/21/42
Copies TN white's office
Ret. to Secip office
Regraded Unclassified
January 28, 1942
Exports to Russis, Chine, Burse, Hong Kong, Japan
Frence and other blooked countries, as reported to
the Treasury Department during the week ending
January 17. 1942.
1. Exports to Russia
Exports to Russia AS reported to the Treasury during the
week ending January 17, 1942 smounted to about $5,800,000.
The chief items were motor trucks and cheseis and landplanes.
(See Appendix G.)
2. Exports to China, Burne and Hong Kong
Exports to Free Ohine amounted to about $1,700,000, of
which printed matter and motor trucks end chaseis accounted
for nearly rifty persent. (See Appendix D.) Exports to Burne
amounted to $447,000. (See Appendix %.)
No exports to Occupied China or Hong Kong were reported
during the week under review.
3. Exports to Japan
Be exporte to Japan were reported during the week under
review.
4. Exports to France
No exports to France were recorted during the week ending
January 17, 1942.
5. Exports to other blocked countries
Exports to other blocked countries Are given in Appendix A.
Regraded Unclassified
373
SUMMARY OF UNITED STATES
DOMESTIC EXPORTS TO SELECTED COUNTRIES
AS REPORTED TO THE TREASURY DEPARTMENT
FROM EXPORT DECLARATIONS RESERVED
DURING THE PERIOD INDICATED 2/
July 26, 1941 to Junuary 17, 1962
(In thrusands of dollars)
July 28
3
Resk endad
York ended
Total
Jan, 3
January 10
Issues 17
Demarks
U. 5. 3. B.
$80,548
$ 8,267
8 5,874
$94,660
Iree China
28,369
91
1,695
30,155
Burns 21
7,002
1,073
w
8,522
France 2/
6
-
-
6
Occupied Frence
2
-
-
2
Uncorspied Transe
14
-
-
+4
Spada
2,329
-
,
2,334
Switeerland
5,061
11
207
5,279
Snales
11,515
1
w
11,516
Portugal
4,488
155
824
5,467
Treasury Department, Division of Nonetary Research
Junuary 21, 1942.
2/ Many of the export declarations are received with 8 lag of coveral days or serv.
Therefere this empilation dass net accurately represent the actual shipment of
& particular week. The leager the period covered, the cleser will these figures
- to Department of Commerce revised figures.
2/ Prom September 11, 1941 to date - it is premed that a Large percentage of
naterial listed here, consigned to purma, is destined for Free China.
2 Includes both Compled and @seempded Prence through week enting Detober 4. 1941.
Occupied and Unscorpied France separated thereafter.
w Less them 8500.
Jiffillef 1/21/42
Regraded Unclassified
Exports from the U.S. to China, Burma, Hong Kong, Japen and U.S.S.R.
as reported to the Treasury Department, July 28, 1941 - January 17,1942.
(Thousands of Dollars) 1
Exports to China
Total
To Japanese
To
Chinese
Exports
Exports
Exports
Exports
controlled
controlled
to
to
to
to
ports
porte
Burna
3/
Mong Kong
Japan
U.S.S.R.
July 28 - Aug. 2
937
542
395
654
1,657
4,523
Aug. 4 - Aug. q
2,796
2,794
-
983
159
554
Aug. 11 - Aug. 16
1,278
969
309
235
42
986
Aug. 18 - AUG. 23
1,352
1,350
2
234
6
2,735
Aug. 25 - Aug. 30
736
735
1
742
-
1,023
Sept. 2 - Sept. 6
897
693
204
634
-
4,260
Sept. 8 - Sept.13
3,038
3,978
I
757
2,281
456
-
5,217
Sept.15 - Sept.20
156
3,822
389
-
752
Sept.22 - Sept.27
462
352
110
449
810
-
2,333
Sept.29 - Det. 4
1,305
so
1,225
684
297
-
323
Cet. 6 - Cet. 11
5,864
552
5,312
1,157
1,233
-
6,845
Det. 13 - Ost. 18
272
267
5
35
584
-
1,924
Oct. 20 - Ost. 25
668
399
269
403
1,243
-
5,623
Det. 27 - Nov. 1
5,210
438
4,772
58
624
-
3,454
Nov. 3 - Nov. 5
1,836
164
1,672
342
283
5
4,552
Nov. 10 - Nov. 15
3,009
158
2,851
88
303
-
2,677
Nov. 17 - Nov. 22
1,701
473
1,228
1,021
600
-
3,581
Nov. 24 - Nov. 29
3,359
120
3,239
1,364
1,325
-
2,436
Dec. 1 - Dec. 6
852
61
791
64
-
-
3,609
Dec. 8 - Dec. 13
3,025
688
2,337
18
-
-
12,040
Dec. 15 - Dec. 20
123
12
111
8
-
-
4,580
Dec. 22 - Dec. 27
37
36
1
196
-
-
1,829
Dec. 29 - Jam. 3
35
*
35
2
-
-
3,993
Jan. 5 - Jun. 10
91
-
91
1,073
-
-
8,277
Jan. 12 - Jan. 17
1,695
1,695
447
-
-
5,874
44,554
11,796
32,758
7,409
11,629
1,869
95,017
1.These figures are in part taken from copies of shipping manifests.
2.7igures for exports to Free Ohine during the se weeks include exports to Rangoom which are
presured to be destined for Free China.
374
3.1t is presured that 4 large percentage of exporte to Burma are destined for Free China.
Treasury Department, Division of Monetary Research
January 23,1942
Regraded Unclassified
375
APPENDIX C
Principal Exports from U.S. to U.S.S.R.
no reported to the Treasury Department
during the week ending January 17. 1942.
(Thousands of Dollars)
TOTAL EXPORTO
1 5,874
Principal Items:
Notor trucks and changis
1,101
Landplanes, powered
1,029
Molybdenum are and consentrate
638
Wilitary tanks
480
Refined copper
195
Men's beets and shoes
164
Ethyl fluid
158
Insulated copper wire
155
Aluminus plates, sheets, Dara, strips
and rode
153
Drilling machines
146
Aircraft engines
116
Brass and bronse plates and sheets
117
Relief supplies - clothing
111
Air oreft parts and mecessories,n.e.s.
110
Engine Inthes
110
Other lathes
96
Treasury Department, Division of Nometary Research Jenuary 26,1942
Regraded Unclassified
376
APPENDIX D
Principal Experts from U.S. to Free Ohine
as reported to the Treasury Department
during the week ending Jenuary 17. 1942.
(Thousands of Dollars)
TOTAL EXPORTS TO FREE CHINA
5 1,695
Frincipal Items:
Printed matter
561
Notor trucks and chassie
243
SO
Ink
Auto replacement Darts
76
Relief supplies - hospital
$
Tires and tubes
60
Conper wire (bare)
50
45
wheels
Aireraft instruments and parts of
36
32
steel bars
27
Hand tools
Treasury Department, Division of Monetary Recearch January 23,1942
Regraded Unclassified
377
APPENDIX E
Frincipal Exports from U.S. to Burna
" reported to the Treasury Department
during the work ending January 17,1942.
(Thousands of Dellare)
TOTAL EXPORTS
$ 447
Principal Items:
Motor trucke and chessis
133
Automobiles
6
Proprietary medicinal preparetions
&
Auto replacement parts
34
Iron and steel sheets
19
Evaporated milk
11
Petroleum and gas well-drilling
apparatus and perts
9
Watel-grinding machines and parte
9
Typewriters and parts
s
Cotton piece goods
e
Industrial chewicels
6
Dried skimmed milk
UPS
5
Cotton cenver articles
5
Treasury Department, Division of Monetary Research
Jenuary 26,1942
ISF/efe
1/26/42
Regraded Unclassified
378
Junuary 31, 1942
Mr. Livesey
Mr. Dictrich
will you please send the attached cable to the American Commissioner
at Delhi, India for transmission to Consul at Karashi, for Fox from the
Secretary of the frensury."
FDich
Regraded Unclassified
379
January 31, 1942
American Commissioner,
Delhi, India.
For transmission to Consul at Karachi.
FOR FOX FROM THE SECRETARY OF THE TREASURY:
Regret very much that you are delayed and we are
trying to expedite your journey. Because of the urgency
of the matter we feel we must proceed with the negoti-
ations and therefore would appreciate very much if you
would cable us 8.8 much as you feel can be cabled of the
Generalissimo's views and opinions.
KSF/efs
1/31/42
Regraded Unclassified
330
TEL GRAM SENT
HRL
January 31, 1942
This telegram must bE
paraphrestd before being
7 p.m.
communicated to anyonE
other than A Governmental
agency. (BR)
AMERICAN COMMISSIONER,
NEW DELHI (INDIA).
21
For transmission to Consul At Kerachi.
FOR FOX FROM THE 85CFSTARY OF THE TREASURY.
Regret very much that you are delayed and WE are
trying to expedite your journey. BECAUSE of the urgenoy
of the metter WE fEEl WE must prooted with the nEgotistions
end therefore would sporeciate very much if you would
cable us °B much 28 you feel can be cabled of the
Generalissimo's views And opinions.
HULL
(FL)
FD:FL:BNcP
Regraded Unclassified
TEBEGRAM SENT
381
January 31, 1942
HRI
This telegrom must be
7 n.m.
persphrased before being
communicated t.o anyone
other then a Governmental
agency. (BR)
AMERICAN CONSUL,
CALCUTTA (INDIA).
26
TO CONSUL GENERAL SECRETARY OF THE TREASURY.
QUOTE. Hewlett, Secretary to Mr. Fox, American
mimber of the Chinese Stabilization Board, has recently
arrived in Colcutta from Chungking for medical treatment.
Please transmit following message to HE and confirm
to us that Heylett has received it:
INNER QUOTE. Henlett from the Secretary of the
Tressury:
All cossible sters heing taken here to arrange
for your passage home by clinner. It. is advisable that
you st.ay in Calcutta until the necessary arrangements
have been made for your return home. BID DIER CUOTE.
END QUOTE.
HITL
(FI)
FD:FI:ENcB
Cony:bj;2-2-42
Copy dmh - 2-7-42
Regraded Unclassified
382
JAN 27 1942
w dear Mr. Secretary:
Mr. A. N. Fox, the American member of the
Stabilization heard of China, has informed no by
cable that his secretary, Mr. Herbert Hewlett, is
ill and should return to the Faited States for
treatment. will you be good enough to make the
necessary arrangements for his transportation back
to the United States.
I understand that Mr. Newlett is visiting
Calcutta January 29 for & supply of medicine -
ebtainable in China, and for a thorough examination.
If the State Department advises us that it is desirable
for Mr. Newlett to renain in Calentia mtil return
transportation is arranged, we will cable his to this
effect.
Very truly yours,
(Signed) 1. Mergenthaus 12.
Secretary of the Treasury
The Memorable
The Secretary of State
By Messenger Sturgls 5:30
cc.n.M.C.
VFC:INF:iem
1/22/42.
Ret to Deajs office
Regraded Unclassified
383
January 31. 1948
Mr. Livesey
Mr. Districh
will you please send the attached cable to the United States Consul
General, Calcutta, India.
Regraded Unclassified
384
January 31, 1942
U. S. Consul General,
Calcutta, India.
TO CONSUL GENERAL FROM SECRETARY OF THE TREASURY:
Hewlett, Secretary to Mr. Fox, American member of the
Chinese Stabilization Board, has recently arrived in Calcutta
from Chungking for medical treatment. Please transmit fol-
lowing message to him and confirm to us that Hewlett has
received it:
"Hewlett from the Secretary of the Treasury:
All possible steps being taken here to arrange
for your passage home by clipper. It is advisable that
you stay in Calcutta until the necessary arrangements
have been made for your return home."
ISF:gp
1/31/42
385
TELEGRAM SENT
HRL
January 31, 1942
This telegram must bE
paraphresed before being
7 p.m.
communicated to anyone
other than A Governmental
agency. (BR)
AMERICAN CONSUL,
CALCUTTA (INDIA).
26
TO CONSUL GENERAL FROM SECRETABY OF THE treasury.
QUOTE. Hewlett, Secretary to Mr. Fox, American
zember of the Chinese Stabilization Board, hes recently
arrived in Calcutta from Chungking for medical treatment.
Please trensmit following meserge to him and confirm
to us that, HEWlett has received it:
INNER QUOTE. HEwlett from the Secretary of the
Treasury:
All possible steps bEing taken here to arrange
for your passage home by clipper. It 18 advisable that
you etay in Calcutta until the necessary arrangEmEnts
have been mpde for your return home. END INNER QUOTE.
END QUOTE.
HULL
(FL)
FD:FL:EMcB
Regraded Unclassified
C
o
386
SAFE HAND
BRITISH EMBASSY,
1030/AA/6/42
WASHINGTON, D.C.
31st January, 1942
Danr Xr. Dietrich,
With reference to my letter V.T. 1029/AL/2/42 of 19th
Jenuary about freezing mensures in the countries of the Weet
Coast of South America, I am now able to sive you B few further
items of information which we have received from the same source.
Colombia
The German compensation funds which were "technically"
but not physically blocked some time 86° are said to have amounted
to some 8 to 9 million Desos. The Banco de la Republice had a
list of all German credite in compensation account but did not
collect them ani hold then under their jurisdiction. In the
meantime, German agents approached the Colombian importers who
held these credits and offered them exceptional and favourable
terms under which they could pay their debts to Germany, at the
same time giving them proofe that the German Government at the
end of the var would maise no further claima against them. It is
not known to what extent funis were octually paid to the Germans,
but it is naturally hoped that effective messures will be taken
to see that whatever funds are still in German hands ere blocked
in the reel sense in the Banco de la Regublica.
As regards the Banco Aleman Antioemono, certain
Colombians have for a considerable time been studying the
possibility of opening E new Colombian bank in Redellin.
The Banco Frances e Italiano is said to be losing ground
very repidly in Colombia and evidence that it is worried about its
deposits is shown by the fact that credit terms at special retes
are being offered. In this connection I have just heart that the
position of the Banco Frances e Italiano in Santiago is believed
to be even more acute than that of the branch in Bogote, due to
the withdrawal of deposits and the impossibility of contacts
abroad. There are rumours that the bank is about to close its
doors and will probably be finally liquidated somewhere around
September.
Regraded Unclassified
387
-2-
The Vichy Government is understood to be endeavouring
to procure payment of French debts to their Minister in Colombia,
as ve have heard that they are also doing in Venezuela and
Ecuador.
Ecuador
No measures with regard to German and Italian funds
have been taken BE yet. German compensation funds at the begin-
ning of the war amounted to 11 million sucres which were held by
"Le Provisors" Banco Macional de Credito, the biggest bank in
Ecuador. I take this opportunity of sending 2. copy of a memorandum
regarding this bank which I have already sent to Mr. Pehle and Mr.
Hiss.
Italian funds are at a low ebb and it is said that the
Italian Legation were unable to pay their servants for one month
until the Banco Italiano-Limn came to the rescue with a loan.
The Italian Consul at Quito has weekly meetings with his nationals
in order to raise loans.
Bolivia
With regard to freezing mensures in Bolivia, I would
like to draw your special attention to our Memorandum JIN. 409/42
of 28th January.
Yours sincerely,
(sgd) 3. V. Palin
Regraded Unclassified
388
LA PREVISORA BANCO NACIONAL DE CREDITO
"Le Previsora" Banco Nacional deCredito is the official agent for
the Deutache Sudamerikanische Bank of Hamburg and Berlin. It is the only bank
in Ecuador which effects cable transfers of askinarks, and it should be noted
that although the amount of this compensation exchange available has for some
time been exhausted owing to the complete absence of exportation, La Previsora
still continues to negotiate in askimarks in any quantity however large.
The pro-Nazi propaganda carried on by the directors of La Previsora
is well known, and more especially that of its General Manager, Senor Victor
Smilio Estrada who is often to be seen in the afternoons in conference with the
German Consul, Mr. Bruckmenn in the latter's office in the Malecon.
The travelling representative of the International Harvester Export
Company of New York, Mr. Roland G. Kriser stated in Gueyscuil that the principal
motive for withdrawing the agency which 1:1s company had entrusted to Sr. Enrique
Gellardo, son-in-lew of Sr. Estrada, was that all the concerns in the control of
Sr. Estrada and of the Previsora were Razi 1л complexion. At a summtuous dinner
which Sr. Estrada gave to Mr. Kaiser, the former expressed the wish that the
agency should be transferred to one of the many concerns of which he is principal
shareholder on the score of Previsore investments. Mr. Eniser, however, flatly
refused and gave the representation to Mr. Augusto Dillon, Manager of the Italian
Bank of Guayaquil.
Many United States and United Kingdom companies are avoiding the ser-
vices of La Previsors and are collecting through the Banco de Descuento and the
Bank of London and South America.
The following firms ore under the control of Sr. Victor Estrada,
General Manager of the Previsors, and he is the principal shareholder in eacht
Commanie General de Comercio y Mandato S.A.
Agencies and importers
Compania General de Construcciones S.A.
Building construction and importers of materials
Distribuidora de Autos S.A.
Agents for Ford, Mercury, Lincoln and Packard calls
The Guayaquil Bottling Company S.A.
Bottlers of Coca-Cole and importers of assences.
J. E. Estrada & Co.
General importers
I. Ballardo
Sr. Gallardo is Sr. Estrada's son-in-law and immorts
general merchandise.
Compania Radiofusora del Ecundor S.A.
Established by Sr. Estroda who owne 80 of the shares.
9th Jsn./42
RVF:OSB
Copy:bj:1c:2-2-42
Regraded Unclassified
u FEBYISORA BANCO NACIONAL DE CREDITO
389
"La Provisers" Banco Nacional deCredito is the official agent for
the Deutsche Sudamerikanische Bank of Hamburg and Borlin. It is the only bank
in Reunder which effects sable transfers of askimarks, and it should be noted
that although the amount of this compensation exchange available has for some
time been exhausted owing to the complete absense of exportation, Le Provisors
etill continues to negotiate in askimarks in any quantity however large.
The pro-Nasi propeganda sarried on by the directors of La Previsers
is well known. and more especially that of its General Manager, Senor Vistor
Mmillo Estrada who is often to be seen in the afternoons in sonference with the
German Consul. Mr. Bruckmann in the latter's office in the Malecom.
The travelling representative of the International Harvester Export
Company of New York, Mr. Roland 0. Katser stated in Quayaquil that the principal
motive for withdrawing the agency which his company had satrusted to Sr. Enrique
Gallarde, som-in-law of Br. Estrada, was that mil the concerns in the control of
Sr. Estrada and of the Provisore were Vasi is complexion. At a sumptuous disner
which Sr. Estrada gave to Mr. Kaiser, the former expressed the wish that the
agency should be transferred to one of the easy concerns of which he is principal
shareholder on the seore of Previsors investments. Mr. Kaiser, however, flatly
refused and gave the representation to Mr. Augusto Dillon, Manager of the Italian
Bank of Quayaquil.
Many United States and United Kingdom companies are avoiding the 047-
visas of La Previsors and are sellecting through the Banco de Descuents and the
Bank of London and South America.
The following firms are under the control of Sr. Victor Estrada,
General Manager of the Provisora, and he is the principal shareholder in each:
Compania General de Comercio y Mendato S.A.
Agencies and importers
Compania General de Construcciones B.A.
Building construction and importers of materials
Distribuidora de Autos S.A.
Agente for Ford, Mercury, Lincoln and Packard care
The Quayaquil Bottling Company S.A.
Bettlers of Coca-Cola and importers of sasences.
J. 1. Retrada & Go.
General importers
1. Callardo
57. Gallardo is Sr. Setroda's son-in-lax and imports
general merchandise.
Compania Madiofmsora del Equador S.A.
Notablished by Sr. Estrada who owne 80% of the shares.
9th Jan./42
RVP:OSB
Copy:bj:1a:2-2-42
Regraded Unclassified
C
0
P
390
Y
PD
GRAY
Rio de Janeiro
Dated January 31, 1942
Rec'd 7:45 p.m.
Secretary of State,
Washington.
311, January 31, 5 p.m.
I recommend inclusion in Proclaimed List of Centro
de Mel, Porto Alegre, name under which Lang and Cia, a
listed firm, also does business.
CAFFERY
LMS
0opy:ec:2-3-42
Regraded Unclassified
C
0
P
391
Y
DEPARTMENT OF STATE
WASHINGTON
January 31, 1942
In reply refer to
If 840.51 Frozen Credits/5210
The Secretary of State presents his compliments to
the Honorable the Secretary of the Treasury and transmits
a copy of air mail despatch no. 882 of January 26, 1942
from the American Legation at Ciudad Trujillo, concerning
freezing control provisions instituted by the Dominican
Government since December 8, 1941.
Enclosure:
From Ciudad Trujillo,
no. 882, January 26,
1942.
Copy:ec:2-2-42
C
o
P
392
Y
No. 882
Ciudad Trujillo, D. R., January 26, 1942.
Subject: Freezing Control Provisions in the
Dominican Republic.
The Honorable
The Secretary of State,
Washington, D. C.
Sir:
I have the honor to refer to the Department's
circular telegram of January 24 - 4 p.m. and the Lega-
tion's telegraphic reply no. 20 of January 26 concern-
ing freezing control provisions instituted by the Do-
minican Government since December 8.
The measures reported in the Legation's despatches
nos. 814 of December 12 and 828 of December 18 continue
in effect, and the three banks operating in the Domin-
ican Republic are adhering closely to the regulations
laid down by the Dominican Secretary of State for the
Treasury
393
- 2 -
Treasury on December 16, as reported in despatch no, 828,
The Secretary of the Treasury has fixed a limit of $1000,
up to which amount enemy aliens may make withdrawals from
banks in the Dominican Republic at the discretion of the
banks. Sums over that amount must receive the authoriza-
tion of the Department of the Treasury.
All local banks have informed the Legation that they
are giving particular attention to accounts held by enemy
aliens and that they are prepared to deny the right of
withdrawal of funds to any enemy alien at any time if not
satisfied that the purpose for which the funds are to be
used is legitimate.
The Dominican Department of State has authorized the
Banco de Reservas and the Royal Bank of Canada to permit
withdrawal of sums up to $5000 by the Compania Exportado-
ra of Puerto Plata, in which an Italian holds a large
interest, to enable the company to continue its normal
business. The Banco de Reservas, which is managed by
American citizens, is continuing to watch these with-
drawals carefully, as is the Royal Bank of Canada.
The public suspect list mentioned in the Executive
Decree of December 16 has not yet been issued. In the
meantime, in accordance with the policy adhered to prior
to
Regraded Unclassified
394
- 3 -
to the entry of the Dominican Republic into the war, the
Banco de Reservas holds no accounts and does no business
with firms and individuals on the American Proclaimed List,
The other two banks in the country - the Royal Bank of
Canada and the Bank of Nova Scotia - follow the same
policy as concerns persons and firms on both the British
Statutory List and the American Proclaimed List.
The banks are aware of the fact that this policy
permits greater freedom of action to firms on the Pro-
claimed List than to enemy aliens not considered suspicious.
They anticipate that the Committee whose appointment was
reported in despatch no. 862 of January 13 will meet
shortly after the return of the Foreign Minister from
Rio de Janeiro with a view to considering what appropriate
action might be taken on this matter. The Committee also
expects Senor Despradel to bring back from Rio information
on action taken by other American republics on this subject,
and it may attempt to incorporate into the Dominican
regulations measures taken by other countries which are
applicable here.
Respectfully yours,
ROBERT M. SCOTTEN
851
1(B:vmmm
A true copy of
the signed origi-
nal.
VM
Copy:ec:2-2-42
Regraded Unclassified
C
0
P
395
Y
DEPARTMENT OF STATE
WASHINGTON
In reply refer to
FF 840.51 Frozen Credits/5211
January 31, 1942
The Secretary of State presents his compliments
to the Honorable the Secretary of the Treasury and
transmits herewith a copy of air mail despatch no. 3346
of January 27, 1942 from the American Embassy at Habana,
concerning freezing control measures which have been
instituted by the Cuban Government since December 8,
1941.
Enclosure:
From Habana, no. 3346,
January 27, 1942.
396
No. 3346
Habana, January 27, 1942
AIR MAIL
(Freezing control measures adopted by the Cuban Government-
Subject: (Department's circular telegram dated January 24, 1942, 4 p.m.
The Honorable
The Secretary of State,
Washington, D.C.
Sir:
I have the honor to refer to the Department's circular telegram
of January 24, 1942, 4 p.m., requesting the Embassy to submit by air
mail B. report on the freesing control measures which have been in-
stituted by the Cuban Government and on the actual application of such
measures at the present time, and to inform the Department by telegram
of the numbers and dates of any despatches or telegrams submitted in
the subject matter since December 8, 1941.
In reply. the Embassy telegraphed the Department today, listing
despatches No. 3119 of December 16, 1941, No. 3143 of December 18, 1941,
No. 3148 of December 18, 1941, and No. 3188 of December 27, 1941, which
contain full data on all the important measures enacted by the Cuban
Government since December 8, 1941, in respect of the freezing of the
funds of enemy aliens.
With regard to the application of these measures in Cuba, no hard
and fast rules and regulations have as yet been established, but Mr.
Manuel Perez Benitoa, the Enemy Property Custodian, has assured the
Embassy that it is his intention in respect thereof to follow as closely
as possible the policies of our Government. Enemy aliens who have de-
posits in local banks or who own other property here, are being authorized
to withdraw at periodic intervals sufficient funds for their living expenses.
Banks receiving payments from abroad in favor of enemy aliens are
authorized to accept such remittances provided the proceeds are deposited
in blocked accounts in favor of the beneficiaries, who must then look
to the Enemy Property Custodian for authorization to make withdrawals from
such accounts.
With regard to properties owned or controlled by enemy aliens not
residing in Cuba, as well as by enemy aliens who have been interned, or
who for other reasons are unable to administer their properties, the Enery
Property Custodian is appointing supervisors who will administer such
properties as long an the existing situation endures. A case in point
is the "Aevos" razor blade factory which is owned or controlled by Mr.
Eugen Hoppe, a German national whose name is included in our Proclaimed
List. Mr. Perez Benitoa has appointed a supervisor who will direct the
operations of this factory, and he proposes to do likewise in the case of
other business establishments or properties with respect to which a similar
situation exists.
397
-2-
Mr. Perez Benitoa has informed the Embassy that he has been
cooperating closely with the British Legation and the Canadian Trade
Commissioner, and the Embassy and the Consulate Genoral have likewise
been rendering him every possible assistance. The Embassy hopes
that Mr. Perez Benitoa will continue to cooperate with it and with
the Consulate General, especially in view of his avowed intention, in
applying the freezing control measures adopted by the Cuban Government,
to follow as closely as possible the system adopted by our Government.
It is assumed that as soon as Mr. Perez Benitoa's office has been
fully organized some definite system embodying all phases of Cuba's
freezing control measures will be worked out, and the Embassy will keep
the Department informed of further developments with regard thereto.
Respectfully yours,
For the Ambassador:
Ellis O. Briggs
First Secretary of Embassy
File No. 820
AFN/ed
A true copy of
the signed orig-
inal. (I) cd
Copy : bj 2-2-42
C
398
0
P
Y
MEV
PLAIN
Istanbul
Dated January 31, 1942
Rec'd 8:12 a.m.
Secretary of State,
Washington.
24, thirty-first.
Sermet Djadjouli Albanian national independent
Albania formerly Consul General in Yugoslavia resi-
dent in Turkey since July 1939 has requested assis-
tance in obtaining Treasury authorization to withdraw
for current expenses $3000 from his account with the
Credit Suisse New York. Djadjouli is well known in
independent Albanian circles and it is suggested
that withdrawals when requested be given favorable
consideration.
HONAKER
RR
Copy:bj:2-5-42
Regraded Unclassified
399
C
0
P
Y
XD
This telegram must be
Cairo
paraphrased before being
communicated to anyone
Dated January 31, 1942
other than a Governmental
agency. (BR)
Rec'd. 12:01 p.m.
Secretary of State,
Washington.
178, January 31, 9 p. m.
The press reports that the Council of Ministers has
approved the draft of the 1942-1943 State Budget but thus
far the explanatory note embodied in the draft is not
available to the Legation. Revenues are estimated at
Egyptian pounds 52,000,000 and expenditures Egyptian
pounds. 53,500,000, the deficit to be taken from the reserve
fund which in April, 1941, amounted to Egyptian pounds
28,960,363 of which Egyptian pounds 16,533,292 was free
(Reference my despatch no. 148, December 5. 1941).
KIRK
RDS
Copy:1c:2/3/42
Regraded Unclassified
C
O
P
DEPARTMENT OF STATE
400
Y
Washington
In reply refer to
January 31, 1942
FF 840.51 Frozen Credits/5069
The Secretary of State presents his compliments
to the Honorable the Secretary of the Treasury and,
referring to aletter dated January 16, 1942 to the
Secretary of State from Mr. J. W. Pehle, Assistant to
the Secretary of the Treasury, transmits copies of telegram
no. 5. dated January 23, 1942 to Sts Pierre, concerning
certain payments to be made by the Western Union Telegraph
Company and the Marden Wild Corporation.
Enclosure:
Copies of telegrem no. 5,
dated January 23, 1942 to
St. Pierre.
eh:copy
2-2-42
Regraded Unclassified
TELEGRAM SENT
401
LM
This telegram must be
January 23, 1942
paraphrased before being
6 p.m.
communicated to anyone
other than a Governmental
agency. (BR)
AMERICAN CONSUL,
ST. PIERRE-MIQUELON.
5.
Your January 3, 1942.
Department has discussed your telegram with the
Treasury Department. Payments by Western Union Telegraph
Company and Marden Wild Corporation should be made into the
special free accounts of Banque Pierre Andrieux with Bank
of Nova Scotia, New York, or with the French-Americen
Banking Corporation, New York, or into the special free
account of the Banque des Iles with the Guaranty Trust
Company, New York.
HULL
(DA)
840.51 Frozen Credits/5069
FF:ASF:LM
Bu
A-A
eh:copy 2-2-42
TREASURY DEPARTMENT
483
INTER-OFFICE COMMUNICATION
DATE January n, 1942
TO
Secretary orgenthau
CONFIDENTIAL
FROM -I. Dietrich
Registered sterling transactions of the reporting banks were as follows:
Sold to commercial concerns
12,000
Purchased from comprcial concerns
2 8,000
Open market sterling held stendy at 4,03-1/2, and there were no reported
(rangections.
Continuing its improvement, the Cuban 2830 was offered at a premium of
16 against the dollar. Until January 27, the peso had been quoted approxi-
mately at par,
In let York, closing quotations for the foreign currencies listed below
were as follows:
Canadian dollar
11-5/89 discount
Argentine peso (free)
,2360
Brazilian milreis (free)
.0516
Colombian peso
.5775
exican peso
.2065
ruguayan pego (free)
.5250
Venezuelan bolivar
.2720
Te solo 3,000,000 in 8016 to the Bank of Portugal, which was added to
its empmarked account. An additional 57,000, 00 in gold will be cale to that
bank on Monday.
lo new gold engagements were reported.
As WELS the case in December 1941, we mace no purchases of silver during
the month of January.
A
Regraded Unclassified
403
BRITISH EMBASSY
WASHINGTON, D.C.
31st January, 1942.
PERSONAL AND SECRET
Dear Mr. Secretary,
I enclose herein for your
personal and secret information a copy
of the latest report received from
London on the military situation.
Believe me,
Dear Mr. Secretary,
Very sincerely yours,
(For the Ambassador)
R.I. Ca-pbell
The Honourable
Henry Morgenthau, Jr
United States Treasury,
Washington, D.C.
Regraded Unclassified
401
Copy No.
BRITISH HOST SECRET
(U.S. SECRET)
ONTEL No. 35
Information received up to 7 And,, 29th January, 1942.
1, NAVAL
28th/29th, Enemy coastal battories ineffectively shelled a Channel
convoy off DOVER.
22nd, A small merchant ship mas sunk by gunfire from a U-boat 120
miles southwest of RANGOON.
24th. A medium sised Allied ship in su, ply convoy mas mined and
sunk 27 miles southwost of SINGAPORE, and # medium sized Portuguese steamer 11
reported to have runk by mine off RETOUNDIAND,
2, MILITARY
LIBYA- Enemy columne from the ISUS area are pushing east, north
and northwest, South of BEIGRAZI, our forces covering the town have been forced
to withdraw by strong enemy attacks from the south, Wortheast of : ISUS, cur ar-
moured forces are advancing to attack the enery.
DALAYA. East, On 27th, Australian forces were in contact noar
JEMATHANG, Inflicting about 250 carnalties on the enemy and suffering 32. Our
troops have not retired to UNSEDILLI, some 30 miles soith of JERAUANG,
Centre. There has been some infiltration by enemy south of SIMPANG
RENGAR
Test. 15th Indian Infantry Brigade to still southeast of SENG=
GARAND, but about 1,000 of the troops isolated there managed to rejoin our forces
on 28th.
BURNA. Japanese forces, including cavalry, are reported to be ap-
proaching the MOULIETN area from the east and south,
RUSSIA. The Russians are continuing their pressure to the Test cd
TZNEV and in the KHARKOV sector, but German resistance me increased north of =
line CREL - BRYANSK and in the FURSE aroa.
AIR OFFRATIONS
MASTERN FRONT. Six R.D.A.F. aircraft took part in operations 25
8th without casualty. 28th/29th. 10) aircraft sent out - MINSTER, 84; HOULOGIES
18; ROTTERDAM, 29: aerodromes in HOLL and TER FRANCE, 20; and leaflets
over PARIS, 2, Seven aircraft missing, There 185 thick cloud over INDIER, to:
conditions at BOULDONE and ROTTERDAL tere good,
Regraded Unclassified
405
. 2 -
LIBYA, On night 26th/27th Tellingtons attacked mechanical trans-
part on the KL AGHEITA - JEDABYA road, and, on the 27th, until bad weather pre-
vented further operations, our fighters attacked mechanical transport in the MSUS
area and on the road west of SIRTE, 13 vehicles were destroyed and at least 35
damaged, 27th/28th, Wellingtons attacked shipping in TRIPOLI (L) harbour,
scoring hite on the Spanish Hole and Main Quay,
SICILY. Night 27th/28th. and 28th, 53 enemy aircraft attacked the
island at HAL FAR, aircraft on ground being slightly damaged,
BURMA. 27th/28th, Blenheims attacked BANGKOK area, 26th/27th.
Eight enemy aircraft attacked HINGALADON aerodrome, destroying an ammunition
store and one Hurricans, The attack was repeated by 30 aircraft on 27th/28th.
These were intercepted by Tomalaske of the American Volunteer Group, which des=
troyed seven aircraft and probably destroyed a further six for the loss of one
aircraft.
NETHERLANDS EAST INDIES. 26th, Attacks were made by enemy fighters
on aerodromes at PARE PARE, YYKASSOR, BIMA, KOEPANG, DILLI (PORTUGUESE TIMOR),
AMBON and NAMIEA,
The results of the action against the enemy convoy in MACASSAR
STRAITS, believed to have consisted of three cruisers, 12 destroyers and 30 trans-
ports, now appear to have been, at a conservative estimate, one large cruiser
sunic by American submarine, one cruiser hit by Dutch submarine, all three cruisers
hit by bomb, one destroyer sunk, one or two destroyers hit by bombe, ten trans-
parts sunic and several transports damaged,
40
AIRCRAFT CASUALTIES IN OPERATIONS OVER AND FROU THE BRITISH ISLES
Enemy - none reported
British - eight (one R.C.A.F. Spitfire)
5. IRON ORE
Total shipments of Swedish iron are to GERMANY during 1941 were
9,554,734 tons (of which 738,255 tons via NARVIE) compared with a total of 9,172,
807 tons (473,312 tons via NARVIK) during 1940. Exports in December totalled
569,000 tons, of which 24,000 were shipped vis NARVIX, This is 409,000 tons less
than shipmente in December, 1940. The Germans are said to be pressing for in-
creased deliveries to NARVIK,
Regraded Unclassified
TREASURY DEPARTMENT
508
INTER OFFICE COMMUNICATION
DATEJANUARY 31,1942
TO
Secretary Morgenthau
FROM
Mr. Kamerck
subject:
Summary of Military Recorts
For East
UD to January 25, only two Chinese divisions had been
-iven permission by the British to enter Burna- or this
force, only one regiment has, so far, arrived. This regi-
ment had to enter by A difficult and circultous route. It
19 now occupied in defending the northern route from Thei-
lend into Burne. The British did not allow the Chinese
troops to use the Burma Road for entering Burma untill Janu-
ary 25.
(O.C.I., "The War This Week", January 22-29)
The U.S. submarine which obtained a hit on A cruiser
or aircraft carrier in the Macassar Streits 18 the U.S.
Sturgeon. (The "Sturgeon" is R 1,500 ton submarine, 1.e.,
9 Ben-going submarine, carrying 8 torpedo tubes. It WAS
launched in March, 1938 and has 8 crew of 55 men.) Ameri-
can and Australian anti-submarine units have sunk one large
and probably one smell Japanese U-boat off Port Darwin,
Australia.
(U.K. Operations Report, January 28)
The British estimate that the Japanese are producing
350 planes e month. Our Military Intelligence estimates Jan-
anese plane production at 500 R month. (The Jananese sir
strength 18 evidently going to be one of Jeoan's weekest
points, once the United Nations bring enough air strength
to bear in the Far East.)
(O.C.I., "Tne Ver This Week", January 22-29)
Russo-German Mar
According to reports reaching the Coordinator of Infor-
antion, the Germans are sending another division from France
to the Russian front, This makes e total of g divisions
transferred from Frence TO Ruseia in the lost Yes months.
(0.C.I., "The war Tris Week". January 22-29)
Regraded Unclassified
- 2 -
407
Germany
The Germans are probably turning out submarines at the
rate of 18-20 per month. A total of 250 are under construc-
tion at any one time. Fifty more are building in Italy and
five in France. (In this connection, it might be of interest
to note a memorandum written by Churchill on the last war, in
which he stated that the difficulties of providing suitable
submarine personnel, rather than production of submarines
impose an absolute limit." "There 1s no personnel that
requires more careful training than the submarine personnel.
All the experience of our officers shows that a submarine
depends for its effectiveness mainly upon its captain."
(O.C.I., "The War This Week", January 22-29)
011 to Italy
The British report that in a further check-up of recent
reports on oil shipments to Italy from Germany, it was found
that during the last fortnight of December, 40 trains of 35
oil tank cars each passed daily through Basle, from Germany
to Italy. This amounts to a shipment of no less than 300,000
tons of oil from Germany to Italy in two weeks. (This 18 to
be compared to the Italian estimated minimum requirements of
100,000 tons of oil a month.)
(U.K. Operations Report, January 28)
Regraded Unclassified
408
RESTRICTED
G-2/2657-220: Ro. 617 L.I.D., W.D. 11:00 A.M., January 31, 1942.
SITUATION REPORT
I.
Pacific Theater.
Philippines: Sporadic enemy attempts at infiltration were
repulsed, Air activity was light yesterday. Bawaii: No further re-
ports of hostile action. Mulaya: The press reports that the British
forces have successfully withdrawn to Singapore Island, after destroy-
ing the deliceray connecting that island to the minland. Burma:
Light fighting continues in the area of Noulmein. There has been a
slight decrease in air activity throughout this sector. Australazia:
According to the press, Japanese have made a landing on the Inland of
Anbon, east of the Celebes. Both vides continue active in the air
throughout this theater. Ground fighting in obscure, with reports of
enemy gains in western Borneo. West Coast: No further reports.
II. Eastern Theater.
Ground: Fighting continues along the general front, The
German High Command claims successful counterattacks ugainst a Russian
Break-through northeast of Kursk. (No situation ma? will be issued
this date.)
Air: On the loscow front, the Russians claim the destruction
of five JU-52's on January 30.
III.
Western Theater.
The press states that units of Use Termen nir Force raided
objectives in North Ireland yesterday,
IV.
Middle Eastern Theater.
Ground: British Beadquarters in the *38dle Snet have stated
that two brigades which were defending Senghazi have successfully re-
joined the British main force, The press indicates that fighting is
now sporadio, with both forces bringing up supporting troops,
Air: On the 30th, the R.A.F. curried out heavy sttacks against
Akis motorized columns, suggly lines, and bases in vestern Cyrensios.
Axis air forces continue the desultory bemburdment of Malta and the
support of ground troops.
RESTRICTED
Regraded Unclassified

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    "ocrText": "TREASURY DEPARTMENT\nINTER OFFICE COMMUNICATION\nDATE Jen. 3, rone\nTO\nFROM\nVr. Haae\nSecretary PA Morgenthau\nSubject: Mr. Winthrop W. Aldrich's Proposal for \"United\nStates Annuity Bonde\"\n1. Description of Proposed Bunde\nThe annuity bonds proposed by Mr. Aldrich would be in\ntwo series -- one for large and the other for small investors.\nIn the description given by Mr. Aldrich, the yield of each\nseries 1s 2-1/2 percent. He states, however, that this rate\n\"\nis used for illustration; it 18 not put forward as B.\nreconsendation.\"\nEach of the bonds, as described by Mr. Aldrich, would\nbe Issued at $92.82 and would appreciate in value (at 2-1/2\npercent interest) to $100.00 at the end of three years.\nDurine this period, and during an additional six months\nbefore the disbursement of the first annuity payment -- a\ntotal of 3-1/2 years -- the bonds would not be redeemable.\nSince it is also proposed that the bonde be non-negotiable,\nthe holders would have no way of realizing on them during\nthis st-called \"grace period.\"\nCommencing 3-1/2 years after issue date, the bonds\nwould be liquidated by a series of equal semi-annual annuity\npayments, each paid partly out of principal and pertly out\nof interest. In the case of the bond designed for large\ninvestors, these payments would be $3.00 per $100.00 and\nwould continue until 25 years after issue date, the last\npayment being only about $1.20. In the case of the bond\nResigned for small investors, the semi-annual payments would\nbe 17.80 per $100.00 and would continue until 10 years after\nissue date. the last payment being 8 little over $8.00.\nRegraded Unclassified\n222\nSecretary Morgenthau - 2\nThe bonds of each series would be redeemable at the\noption of the holder at any time after the initial 3-1/2\nyear grace period, but only at substantial discounts from\ntheir unpaid principal balances. The bond for large in-\nvestors, for example, would be redeemable at $90.70, 3-1/2\nyears after issuance at $92.82 and after the payment of one\nsemi-annual annuity of $3.00. This 1a equivalent to an\ninvestment yield of 0.25 percent per annum for the period\nheld, and compares with 1.04 percent on Series G savings\nbonds redeemed after being held for an equal period. In-\nvestment yields for the period held increase gradually\nthereafter, reaching 0.80 percent at the end of 5 years;\n2.05 percent at the end of 12 years (the maturity date of\nthe present Beries F and G bonds); and 2.50 percent at the\nend of 25 years.\nThe bond designed for small investors gives B. yield of\n2.50 percent if held for the entire 10 year period; but, as\nthe intermediate redemption yields are only as great as those\nof the series designed for large investors, the penalty for\nredemption prior to maturity 18 much greater. This 18, of\ncourse, just the reverse of the relationship between the\npresent Series E bonde on the one hand and Series F and G\nbonds on the other.\nMr. Aldrich suggests that a provision be inserted in\neach series analogous to that in the present Series G savings\nbonds providing for the redemption of the full unpaid prin-\ncipal balance in the event of death.\nII. Merits Claimed for Proposed Bonds\nMr. Aldrich believes that the bonds which he proposes\nwould have the following advantages:\n(1) They would be attractive to investors.\n(2) They would lighten the burden of the\ndemand debt imposed on the Treasury by\nthe present savings bonds.\n(3) They would provide for a more systematic\nliquidation of the debt during the post-\nwar period.\nRegraded Unclassified\nSecretary Morgenthau - 3\nIII. Evaluation of Proposed Bonds\nIt is believed that the proposed bonds, if offered\nmould not sell well for the following reasons!\n(1) It would be difficult to popularize &\nsecurity neither redeemable nor nego-\ntiable for a 3-1/2 year period.\n(2) A term annuity such as the proposed\nsecurity 1s a \"wasting asset\", and it\n18 believed that such an asset would be\nless attractive at any given rate of\ninterest than either an appreciation\nsecurity or a current interest security.\nThe traditional preference of the market\nfor discount securities as compared with\npremium securities 18 an example of the\nrelative unpopularity of \"wasting assete.\" \"\nIf a security 18 to be repaid in the form\nof en annuity, it would probably be much\nmore popular dollar-for-dollar of actus-\nrial value 1f it were payable in the form\nof an annuity for a period certain or for\nlife, whichever 18 longer, rather than\nfor a period certain only.\n(3) The suggested yields of the proposed bonds\nwould be unattractive in the present market\nand compare very unfavorably with those\noffered on the present savings bonds of\nall series. (It should be noted in this\nconnection that r. Aldrich says that the\nproposed yields are for purposes of illus-\ntration only.)\nIt should finally be noted, from the standpoint of\npublic policy, that the proposed method of repayment of\nthe securities by periodic principal payments would impair\nthe flexibility of Treasury policy in handling the debt In\nthe post-war period.\nAttachment\nRegraded Unclassified\n053\nUNITED STATES ANNUITY BONDS\nPage\n221\nA. Proposal\nfrom\nWinthrop W. Aldrich, Chairman Board of Directors\nof the\nChase National Bank of the City of New York\nIntroduction\nAny proposal, worthy of serious consideration at\nthis time, must recognize the magnitude and com-\n=lexity of the Treasury's task in providing funds for the war effort.\nThe proposal must go further and look to the nature of the Treasury's\nresponsibilities in the transition from war to a peace economy. The\nbond iseue herein described is designed to appeal to the public and at\nthe same time regularize the Treasury's financing without increasing\nits immediate cash outlay. It is adapted to the basic economice of\nthe present and future situation of the nation, in so for 8.8 that situa-\ntion can be appraised. It 1s believed that the bond would utilize the\npresent needs of the Treasury for new money to furnish a bridge into\nthe post-war reconstruction of the nation by providing purchasing power\nto the nation when It will be needed.\nBriefly, the form of the proposed bond 1a patterned on the\ncharactoristics of term loans as developed in recent years by commercial\nbanks. After B. three and one half year grace period, during which interest\nsocumulates, principal and interest would be returned to the purchaser in\nequal Instalments 80 88 to rotire the bond at its maturity. Purchases\nwould not be limited to any fixed amount. It 18 belloved that the bond\nwould appeal to large purchasors, as woll as to those with medium or small\nresources. It should attract those whose income during the war will ox-\naud their prospective post-war income, and those who, by reason of age,\nworld to interested In annuities.\nRegraded Unclassified\n- N -\n225-\nThe introduction of such a bond would give added strength\nand security to the fiscal position of the Treasury. For, to the\nextent that the Annuity Bond finds favor with investors, the short-\nterm indebtedness of the Treasury would be thereby reduced, The fact\nthat the principal repayments are spread over a period of time would,\nin itself, ease the burden of debt retirement in the post-war period.\nAlthough tax revenues will increase, the projected war ex-\npenditures of the federal government will be financed, for the most\npart, by the sale of its obligations. Estimates contained in the\nPresident's budget message of January 7 indicate the sale of over\n$19,000,000,000 of obligations in the fiscal year 1941-42, and\n$34,000,000,000 to $35,000,000,000 of obligations in 1942-43. These\nare sales that must be made in addition to those government issues\nplaced with truet funds under the Social Security and other legisla-\ntion.\nThe Status of With such requirements confronting 1t, the Treasury\nDefense Bonds\nmust exerciso the utmost skill in handling its\nfinances. The security 1ssues most importantly used in the financing\nof the Treasury are of two types, the genoral money market bonds issued\nunder the Second Liberty Loan Act (together with Treasury notos and\nbills) and the \"defonse bonds\" issued in Series \"E\", \"F\" and \"G\".\nIt has been estimated that of total borrowings, exclusive of trust fund\nborrowings, approximately $9,000,000,000 to $10,000,000,000 annually\nwill be realized from the sale of defonse bonds. These 18sues are not\nnegotiable but are redocmable. The Sories \"E\" and \"F\" bonds are pur-\nchased at a discount of par and are rodoomable at successively higher\n1/ Serios \"E\" bonds are dosigned for smallor purchasers and the Series\n\"p\" and \"G\" for those with larger resources.\nRegraded Unclassified\npercentages of par value. The Series \"C\" bonds are purchased at par\nand redemption value varies between 94.7 per cent of par and par dur-\ning the life of the bond. For the most part, defense bonds are sold\nto individuals, institutions, and other non-banking purchasers. It\nia highly desirable that & still larger part of the Treasury's borrow-\ning be done in this manner.\nThe sale of these defense bonds began last May. In the Timal\neight months of 1941, a total of $2,538,000,000 WELE sold. of this total,\n45 por cent went to smaller purchasers in the form of Series \"E\" bonds,\nand 55 per cent to larger purchasers in the form of Series \"F\" and \"G\"\nbonds, Interestingly enough, December sales reversed these percentages,\n45 per cent consisting of Series \"E\" bonde and but 35 per cent Series\n\"F\" and \"c\" bonds. Series \"F\" and \"G\" bonds contributed about 45 por\ncent of total defense bond sales in the Second Federal Reserve District\nfrom January 1 to January 23, inclusive. The present series of defense\nbonds appear to be of limited suitability for purchases in substantial\namounts by those with large resources. For this and other reasons, It\n1e proposed to supplement and, perhaps, replace the Series \"I\" and \"C\"\nbonds by an issue of United States Annuity Bonds.\nIn addition, the Serios \"F\" and \"G\" bonde have another objec-\ntionable characteristic from the standpoint of the Treasury. After six\nmonths, they become redesmable on the first day of any calendar month,\non one month's notice in writing. The Series \"E\" and \"F\" bonds are TO-\ndeemable at not less than the cost price. The Series \"G\" bonds are re-\ndeemable at moderate discounts of the cost price but at not less than\ncost price whon interest payments are included. Heavy demanda on the\nTreasury in the future might occur under unfavorable circumstances should\nthe sale of defense bonds reach large levels. The one month's grace per-\nLod would not provide the same relief for the Treasury that it provides in\nthe case of B bank. In BO far de redemption might be demanded by the\nRegraded Unclassified\n- 4. -\n227\npublic in successive months, the defense bonda constitute A liability\non the Treasury's books of uncertain nature, but one more akin to o\ndemand than to a time obligation with a fixed maturity.\nRequirements of Three important requirements occur in considering\n8 Desirable\nIssue\nthe most desirable type of obligation for the\nTreasury to 1ssue. The bond should appeal more strongly than the\nSeries \"y\" and \"G\" bonds to potential purchasers who possess large\nidle balances. The demand liability position of the Treasury should\nbe prevented from increasing in so far as possible. There should be\nno unhecessary addition made to the cash demands on the Treasury in\nthe immediate future. If & bond can be devised to accomplish these\nobjectives, a highly desirable revision will result in the Treasury's\nfinancing program.\nThe United States It ia hoped that the United States Annuity Bond\nAnnuity Bond\nherein described may accomplish these purposes.\nThe form of the bond, in substance, constitutes B term annuity. The\nissue would be dated as of the first of the month in which purchase\n1a made, and would be extinguished 25 years after the issue date. It\nwould be purchased at B discount and interest would accrue at 2 1/2 per\ncent compounded semi-annually for three years from the issue date. The\n2 1/2 per cent rate is used for illustration; it is not put forward as\na recommeniation. By setting B. purchase price of $928.17 a/ per $1,000,\nthe 2 1/2 per cent rate enhances the purchase price to $1,000 principal\namount after the three-year period has elapsed.\na/ If desired, this figure could be rounded out by accruing interest\nfor three years at a slight variation of the 2 1/2 per cent rate.\nRegraded Unclassified\n- 5 -\n228\nSemi-annual payments of principal and interest begin 3 1/2\nyears from the issue date. These semi-annual amortization and interest\npayments are made in equal aggregate amounts, $30 each six months on a\n$1,000 bond. The interest paid progressively decreases, while the\nprincipal reduction payments progressively increase until maturity\nwhen the total principal will have been returned to the purchaser. The\nnet yield, if held to maturity, 18 2 1/2 per cent, The return to the\nholder after three years 18 6 per cent per annum, including both interest\nand return of capital.\nThe Treasury would mail checks on a single bond each six months.\nSince bonds would be sold in each month, different bonds would be dated\ndifferently and the Treasury would mail checks to various holders on the\nfirst day of each month in the calendar year. Each check would carry a\nnotation of the amount to be credited to interest and the amount to be\ncredited to return of principal. The interest accrued during the first\nthree years would be paid out with other paymente of interest and princi-\npal, beginning 3 1/2 years from the issue date.\nThe schedule which follows shows the semi-annual return of\nprincipal with semi-annual interest payments computed at 2 1/2 per cent\nper annum on the respective unpaid balances of principal at successive\nintervals of time. These combined payments amount to $30 per $1,000\nbond every six months over a period of 22 years, after the lapse of\nthe three and one half year grace period during which interest accumulates\non the original purchase price at the rate of 2 1/2 per cent compounded\nsemi-annually,\nRegraded Unclassified\n- 6\n0, B. ANNUITY BOND\n229\nl'ayment and Redemption Value Schedule of & $1,000 - 216 Integret bearing Bond producing $60.00 per arms, or\n$30.00 sech stx months. This is a 25 Year Bond with annuily payments commensing 2: years from the tome date.\nThese 130. annuity payments become due over 44 synd-annual periods OP 22 years.\n(Not redeemable until end of 32 year period)\nApprox.In-\nApprox.Yisle\nvestment\non Redemption\nSemi-Annual\nSenj-Annual\nDollars\nNet Dollars\nYield from\nvalue from\nSemi-Annual\nInterest at\nPrincipal\nPrincipal\nPayable\nof Income\nIssue Date\nRedemption\nPeriods\nInnuity\nHS per\nReduction\nBalances\nIf\nover Cost\nto Redemp-\nDate to\nYears Henoe\nPayments\nannun\nPayments\nof Bond\nRedeemed\nIf Redeemed\ntion Date\nMaturity\nSubscription price)\n-\n-\n5 928.17\n(Average Ltre Method Used)\nEnd of\nTr.\n-\nSubscription price -\n939.78\n-\n1\nof $928.17 m-\n-\n951.52\n-\n-\nil\nYes.\n,\nhannes to $1,000.\n-\n963.42\n-\n7\n1\nn.\nprincipal, at end -\n975.46\n-\nII\nIf\n-\nof the 3rd Year.\n-\n967.65\n-\n3\n\"\nI\n1,000.00\n#\n-\n31\n\"\n1 30.00\n12.50\n$ 17.50\n902.50\n1 907.00\nI 0.89\n.25%\n3,304\n4\n\"\n30.\n12.25\n17.72\n964.78\n804.\n15.113\n40%\n3,425\no\n4\n-\n30.\n12.06\n17.94\n946.34\nn64,\n25.83\n.60%\n3.50%\n5\n=\n30.\n11,84\n18.16\n928.68\n847.\n38.03\n.80%\n3.53%\n\"\nSt\n\"\n30.\n11,61\n16,39\n910.29\n831.\n52,83\n1,005\n3.50%\nF\n\"\n30.\n11.30\n10.62\n891.67\n817.\n60.03\n1,20$\n3.59%\n4\n\"\n30.\n11.15\n10.05\n872.82\n799.\n#0,93\n1.305\n3,64%\nE\n7\n-\n30.\n10.91\n19.09\n853.73\n781.\n92.83\n1.40$\n3.73%\nif\n75 \"\n30.\n10.67\n19.33\n894.40\n764.\n105.83\n1,50%\n3.75%\nA\n\"\n30.\n10,43\n19.57\n814.83\n748.\n119.83\n1,60%\n3.77%\nil\n- R\n30.\n10,19\n19.81\n795.02\n732.\n133.03\n1.70%\n3.79%\n9 \"\n30.\n9.94\n20.06\n774.96\n717.\n148.83\n1.60$\n3.80%\n=\n90 II\n30.\n9.69\n20.31\n754,65\n699.\n160.83\n1.85%\n3.83%\n=\n10 \"\n30,\n9.43\n20.57\n734.08\n680,\n171.83\n1,90%\n3.91%\nlot\n\"\n30,\n9.18\n20.82\n713.26\n662.\n183.93\n1,95%\n3.96%\nIf\n11\nH\n30.\n8,92\n21.08\n692.18\n644.\n195.83\n2,00%\n3.99%\n.\n11- \"\n30.\n0.65\n21.35\n670.83\n625.\n206.83\n2,05%\n4,09%\n.\n12 N\n30.\n8.39\n21.61\n647.72\n602.\n213.83\n8.05%\n4,30%\na\n12th If\n30.\n1.12\n21.88\n627.34\n584,\n225.83\n2,10%\n4.345\nif\n13\nIl\n30.\n7.84\n22.16\n605.10\n561.\n232,83\n2.10%\n4.57%\na\n13t\nE\n30,\n7.56\n22.44\n582.74\n543.\n244,83\n2.15%\n4,60%\nin\n14\na\n30.\n7.28\n22.72\n560.02\n519.\n250.83\n2,15%\n4.95%\n14th\n-\n30.\n7,00\n23,00\n537.02\n501.\n262.83\n2.20%\n4.95%\n15 \"\n30.\n6.71\n23.29\n513.73\n477.\n260.83\n2,20%\n5.325\n#\n150\n\"\n30,\n6,42\n23.58\n490.15\n459.\n280.83\n2.25%\n5,33%\nIF\n16\nF\n30.\n6,13\n23.87\n466.20\n435.\n296.83\n2.25%\n5,75%\n-\n16th\nis\n30.\n5.63\n24.17\n447.11\n416.\n297.83\n2.305\n5,70%\nIf\n17 -\n30.\n5.53\n24,47\n417.64\n391.\n302.83\n2,30%\n6,37%\n-\n17%\n=\n30,\n5.22\n24.78\n392.86\n367.\n306.83\n2.315\n6.75%\nIs \"\n30.\n4,91\n25.09\n367.77\n343.\n314.83\n2.325\nYields from\n1A) \"\n30,\n4,60\n25,40\n342.37\n319.\n320.83\n2,33%\nthis period\n19\n.\n30.\n4.28\n25,72\n316.65\n294.\n325.83\n2.34%\non, increase\n=\n190 a\n30.\n3.96\n26,04\n290.61\n269.\n330.83\n2.355\nquite rapidly.\n20 et\n30,\n3,63\n26.37\n264.24\n246.\n337.83\n2.375\n\"\n20 -\n30,\n3,30\n26,70\n137.54\n222.\n343.83\n2.395\n\"\n21\n-\n30,\n2,97\n27.03\n210.51\n197.\n344.63\n2,415\n22/- \"\n30.\n2.63\n27.37\n183.14\n173,\n354.83\n2.435\n22 -\n30.\n2,29\n27.71\n155.43\n148,\n359.83\n2,45%\n227\n=\n30.\n1,94\n28,06\n127.37\n121.\n362.33\n2,46%\n-\n13\nse\n30,\n1,59\n28,41\n98.96\n94.\n365.83\n2,475\n232\nis\n30,\n1,24\n28.76\n70.20\n67.\n368.83\n2,408\ne\n24\nI\n30,\n.88\n29.12\n41.08\n41.\n372.03\n2.495\n\"\n24--\n\"\n30\n.SI\n29,49\n11.59\n11,59\n373.42\n2.50%\n25\n=\n11.73\n,14\n11.59\n&\n(\n373.56\nInsals $1,301.73\n$301.73\n$1,000.00\nincrement of $71.83 represents an accumulation of 2% interest compounded sent-enmielly on the 1920.17 sub-\npeription price.\nVetter units ware maintained shen arriving at Redemption Values.\nRegraded Unclassified\n- 7 -\n230\nRegistration\nThe bonds would be issued in registered form in\ndenominations of $1,000, $5,000, $10,000, $50,000,\n$100,000 and $500,000 and made non-negotiable. The rules that now\napply to the registration of the defense bonds might be used in con-\nnection with the United States Annuity Bond.\nRedeemability The issue would not be callable by the Treasury\nDepartment, but on one month's notice in writing\nmay be redeemed prior to maturity after 3 1/2 years from the issue\ndate at the owner's option at fixed redemption values, as provided\nin the accompanying schedule. These redemption values represent a\ngreater discount of the face value of the bonds than is now the case\nwith defense bonds.\nProvision should be made for redemption in full upon the\ndeath of the registered owner at the then prevailing principal balance.\nThis 18 equivalent to making the bonds acceptable for payment of estate\nand inheritance taxes. Or, if it is preferred by the holder, the\nannuity payments might be continued after death by registering the\nbonds in two names, or by naming a beneficiary in the bond's registra-\ntion.\nAnnuity Bonde\nThe foregoing description and table outline the\nFor Smaller\nIncomes\nfeatures of a bond that should appeal to those in\nthe middle and higher income groups. It is entirely possible that the\nannuity feature could be applied also to & bond designed to draw off\nRegraded Unclassified\n- 8 4\n231\nthe abnormal wartime incomes of many in the lower income ranges.\nIndustrial workers particularly should look with favor upon an instru-\nment in which they could place enhanced incomes today, and have their\nincomes returned with interest over a period of years in the future.\nA bond designed for this purpose should have a shorter\nmaturity; should pay out in, perhaps, ten years. Since the annuity\nfeature would be its chief attraction, it might carry a moderate rate\nof interest. Cash outlays of the Treasury to service a bond paying\nout this rapidly would be heavier, and the amount issued in any year\nto any one person might be limited to $2,500. Denominations should\nbe limited, perhaps, to $100 minimum in order to minimize clerical\nexpenses in servicing the issue.\nThe following table describes a $100 bond, at 2 1/2 per cent,\nto be retired in 10 years. After the three and one-half year period of\ngrace, semi-annual payments of $7.80 would begin. A somewhat larger\npayment would be made on the maturity date, BO as to return principal\nwith interest in full.\nRegraded Unclassified\n- 9 -\n232\nU. 5, ANNUITY BOND\n$7.80 each six months. & Bond with annuity payments commencing 30 years from the issue date.\nPayment and Redemption Value This is Schedule 10 Year of a $100. - 2/6 Interest bearing Bond producing $15.60 per annum, or\nThese $7.00 annuity payments become due over 14 seni-annual periods or 7 years,\n(Not Redeemable until end of » year period)\nApprox.In-\nApprox.Yield\nSemi-Annual\nSemi-Annual\nvestment\nDollars\non Redemption\nSeni-Annual\nSemi-Annual\nInterest at\nNet Dollars\nPrincipal\nYield from\nPrincipal\nvalue from\nPayable\nPeriods\n2/5 per\nof Income\nAnnuity\nReduction\nIssue Date\nBalances\nRedemption\nif\nover Cost\nYears Hemos\nPayments\nennus\nPayments\nof Bond\nto Redemp-\nDate to\nRedeemed\nIf Redeemed\n(Subscription price)\ntion Date\n-\n-\n$ 92.82\nMaturity\n-\nEnd of\nYr.\n-\n) Subscription price -\n(Average Life Method Used)\n93.94\n-\n\"\n1 11\n-\n)\nof $92.82 un-\n-\n95.15\n-\n\"\nIf Yrs.\n-\nhances to $100.\n-\n96.34\n-\n\"\n2 a\n-\nat end of 3rd\n-\n97.55\n-\n#\nit \"\n-\nyear.\n-\n98.77\n-\nIf\n3 \"\n-\n.\n-\n100.00\n/\n\"\nIt\n\"\n$ 7.80\n$ 1.25\n$ 6.55\n93.45\n# 85.90\n$ 00.88\n.26%\n\"\n4 \"\n7.80\n1.17\n6.63\n5.15%\n86.82\n78.80\n1.58\nA \"\n7.80\n.415\n.\n1.09\n6.71\n6,00%\n80,11\n72.00\n2.58\n.60%\n.\n5 =\n7.80\n1.00\n6.80\n7.00%\n73.31\n65.40\n3.78\n.815\n\"\n#\n7.80\nYields from\n50\n.92\n6.88\n66.43\n58.90\n5.08\n1.01%\n#\n6 \"\n7.80\n.83\n6.97\nthis period\n59.46\n52.50\n6.48\n1.21%\n\"\n4 \"\n7.80\n.74\n7.06\non, increase\n52.40\n45.60\n7.38\n1.30%\nof\n7 \"\n7.80\n66\nquite rapidly.\n7.14\n45.26\n38.70\n8.28\n1,40%\n.\n7½ #\n7.80\n.57\n7.23\n38.03\n31.90\n9.28\n1.50%\n\"\n8 \"\n7.80\n.48\n7.32\n30.71\n24.90\n10,08\n1.60%\nin\net \"\n7.80\n.38\n7.42\n23.29\n18,10\n11,08\n1,70%\n\"\n9 \"\n7.80\n.29\n7.51\n15.78\n11.10\n11,88\n1.80%\n#\n90 \"\n7.80\n.20\n7.60\n8.18\n2.80\n12.38\n1.85%\n.\n10 \"\n8.28\n.10\n8.18\n-0-\n-\n16.86\nTotals $ 109.68\n$ 9.68\n$ 100.00\nIncrement of $7.18 represents an accumulation of 2% interest compounded semi-annually on the $92.82 sub-\nscription price,\n/ Dollar units were maintained when arriving at Redemption Values,\n- 10 -\n233\nEconomic\nThe economic effects of using annuity bonds as\nEffects\na supplement to Series \"E\" defense bonds and,\nperhaps, as a substitute for Series \"F\" and \"G\" bonds may be con-\neidered from the standpoint of the Treasury, the holder of the bonds,\nand the general economy of the country,\nEffect on\nThe present defense bonds create & contingent claim\nthe Treasury\nupon the Treasury in any month that holders may\nwieh to redeom. The amount of this contingent claim increases in pro-\nportion to the success realized in selling the defense issues. There\nare two principal reasons why holders might demand payment. Individuals\nmay need funds from time to time which they can conveniently obtain by\nredeeming their defense bonds. This could result in a large number of\ndemands upon the Treasury in the event of a post-war deflation with\nrising unomployment. But it is improbable that the aggregate dollar\ndemande from this source would be great or would be difficult for the\nTreasury to handle. Moreover, redemption in these circumstances would\neupply purchasing power to the community when it would be desirable.\nThe most important potontial demand upon the Treasury in dol-\nlar amount 1a provided by the possibility of a material revision in the\neconomic expectations of the larger holders of defenso bonds. A state\nof high business activity with booming prices might induce redomption of\nthe Series \"F\" and \"G\" bonde especially. In theso circumstances, unlike\nthose in a situation of large unomployment, redomption on a large scale\nwould provide the community with now purchasing power at a time when it\n1e most undesirable that purchasing power be increased.\nA highly desirable featuro of the United States Annuity Bond\nie that it is rodoemable at sizablo discounts of the face value. In\nthis circumstance, a holder confronted with the docision of redeeming\nRegraded Unclassified\n- 11 -\n234\nthe bonds to acquire funds to use in other investments must accept &\nknown loss for a contingent gain. It seems less likely that a large\n\"run\" on redeemable government bonds could occur in this situation.\nEven if open-markst bonds should decline in market price\nto 8. level making it profitable for the holder of Annuity Bonds to\ncash his holdings and purchase the open-market government obligations,\nthe Treasury would find itself in the enviable position of realizing a\nnet decrease in its debt as a result of the transaction. But this 1a\nan improbable contingency in view of the announced intention to main-\ntain comparatively easy interest rates.\nAfter the three year accretion period, the service of Annuity\nBonds would require greater cash outlays than other types of government\nissues. The following table uses the 25-year Annuity Bond to show just\nhow much greater this service would be for outstanding amounts from\n$10,000,000,000 to $40,000,000,000. To the extent that it 18 not financed\nwith new issues, the additional cash outlay represents & reduction of debt\nand & strengthening of government credit. In addition, it 1s a determin-\nable amount, whereas the cash outlays to service an equal amount of Defense\nBonds might fluctuate within wide ranges, depending upon the rate of their\nredemption,\nANNUAL DEBT SERVICE TO CARRY DEFENSE PROGRAM\n(in millions of dollars)\nSix per cent\nAdditional Cash\nPrincipal\nTwo and one-half\nOutlays of\nand\nper cent\nTreasury--Applied to\nInterest\nInterest on\nPrincipal\nService\n\"Long\" Bonds\nReduction of\nAmount\nPer Annum\nin any event\n\"Defense\" Debt\n$10,000\n$ 600\n$ 250\n$ 350\n20,000\n1,200\n500\n700\n25,000\n1,500\n625\n875\n30,000\n1,800\n750\n1,050\n40,000\n2,400\n1,000\n1,400\nRegraded Unclassified\n- 12 -\n235\nEffect on\nThe holder of Annuity Bonds has somewhat less to\nthe Holder\nfear from changing economic developments than\nwould be the case if be possessed a marketable government bond of the\ncustomary type, which be held to maturity or was forced to sell in\nthe market at an inopportune time. In the third year after issuance,\nsemi-annual return of principal begins in progressively larger amounts\nuntil the issue has been fully paid at its redemption date. These\nsuccessive principal payments provide the holder with the opportunity\nof reinvesting successive parts of his original funds over a period of\ntime so that the average conditions that pertain over the life of the\nbond are available to him in his reinvestment decisions. This provides\nhim with the opportunity of mitigating the effects of broad economic\nchange upon his personal affairs.\nMoreover, it provides the holder with a convenient means of\nsaving wartime income that would be returned in instalments with\ninterest over a period of years in the future. This 18 especially true\nof the 10-year 1ssue designed to appeal to smaller income receivers.\nEffect on the The effects of the Annuity Bond issue upon the\nEconomy\ngeneral economy, and more specially upon the money\nmarkets, depend largely upon the extent of their sale. To the extent\nthat the bonda are sold in large amounts to people who use existing\ndormant deposits, the result 18 an activating of those deposits. Since\nthe annuity feature of the bonds 18 designed to appeal to those who have\nsubstantial resources, it is reasonable to believe that this would be one\nof the results. No other type of government issue has been conspicuously\nsuccessful in tapping these large unused funds.\nRegraded Unclassified\n- 13 -\n236\nTo the extent that the Treasury might succeed in financing the\nwar effort in this way, there would be 4 reduction in the amount of new\ngeneral money market bonds which it had to sell. Perhaps the most dif-\nficult problem today associated with war finance occurs in connection\nwith the now indicated necessity of large bond purchases by the commer-\ncial banks of the nation. From the standpoint of the money markets,\nthis problem can be sased somewhat by the Treasury gradually reducing\nthe maturity of its outstanding obligations and concentrating the bulk\nof its forthcoming financing in the short-term market, But it still\nremains true that for many reasons, it 1s highly desirable for the\ngovernment to sell as large a part of its issues as possible to non-\nbanking purchasers. Anything that can divert the forthcoming Treasury\nfinancing away from the banks and toward the public will serve the\nnational interest and is worthy of serious consideration. The Annuity\nBonde appear to possess the necessary features to attract large balances\nfrom private sources and thus to ease this phase of government finance.\nFinally, the method of repayment should have B. beneficial ef-\nfect on the economy. Repayment of the Liberty and Victory bonds of the\nlast war occurred at irregular maturity intervals, This released funds\nto the money markets that were used to stimulate some of the undesirable\nfinancing of the 1920's, In contrast, the provisions of the Annuity\nBonds would insure that new funds would arrive in stabilized amounts.\nTo the extent that the bonds might be widely held, funds would be\nreturned to all sections of the nation and not concentrated in the large\nmoney markets.\nJanuary 28, 1942\nRegraded Unclassified\nUnfilled Orders for Savings Bonds at the\nFederal Reserve Banks and the Post Office Department\nJanuary 15 to date\n(In thousands of pieces)\nt Unfilled\n:\n:\nUnfilled\nNew orders\nBonds\n: orders at\n:\n:\norders at\nStock of\nIBM\nreceived\nmanufactured\nclose of\nbonds\ndeliveries\nopening of\n:\n: business\ntoday\n:\n:\ntoday\nbusiness\non hand\nthis day\nJan.\n15\n550\n660\n750\n455\n231\n1,000\n16\n455\n773\n775\n426\n204\n750\n17\n426\n672\n800\n298\n204\n1,000\n18\n298\nnone-no mail\nnone-closed\n298\n204\n300\n19\n298\n204\n800\n202\n704\n625\n20\n202\n204\n300\n86\n1,184\n1,000\n21\n86\n411\n800\n59\n1,546\n075\n22\n59\n697\n800\n86\n1,676\n1,000\n23\n86\n569\n800\n50\n1,871\n1,000\n24\n50\n727\n800\n28\n1,922\n1,000\n25\n28\nnone-no mail\nnone-closed\n28\n1,922\n-\n26\n28\n490\n1,000\n7\n2,011\n2,000\n27\n7\n434\n1,000 1/\n7\n2,177\n-\n28\n7\n474\n1,000\n6\n2,102\n7,000\n29\n6\n407\n1,000\n8\n2,097\n-\nOffice of the Secretary of the Treasury,\nJanuary 30, 1942\nDivision of Research and Statistics.\n*\nBonds in Washington vaulte only.\n1 Includes 400 thousand pieces manufactured for inventory in the field.\nN\nIncludes 600 thousand pieces manufactured for inventory in the field.\nRegraded Unclassified\nhug\nCONFIDENTIAL\nStock of Series E Savings Bonds on Hand\nJanuary 15, 1942 to date\n(In thousands of pieces)\n: Stock on hand\n:\n:\nBonds\nStock on hand\nIBM\nSales\n:\nbeginning\n:\nmanufactured\nclose of\ndeliveries\n:\nof day\n:\nthis day\n:\nthis day\nday\nthis day\nJan.\n15\n6,569\n320\n750\n6,999\n1,000\n16\n6,999\n445\n775\n7,329\n750\n17\n7,329\n163\n800\n7,966\n1,000\n18\n7,966\nnone-closed\nnone-closed\n7,966\n800\n19\n7,966\n665\n800\n8,101\n825\n20\n8,101\n218\n800\n8,683\n1,000\n21\n8,683\n337\n800\n9,146\n875\n22\n9,146\n381\n800\n9,565\n1,000\n23\n9,565\n377\n800\n9,988\n1,000\n24\n9,988\n263\n800\n10,525\n1,000\n25\n10,525\nnone-closed\nnone-closed\n10,525\n-\n26\n10,525\n487\n1,000\n11,038\n2,000\n27\n11,038\n186\n1,000\n11,852\nI\n28\n11,852\n251\n1,000\n12,601\n2,000\n29\n12,601\n265\n1,000\n13,336\nI\nOffice of the Secretary of the Treasury,\nJanuary 30, 1942\nDivision of Research and Statistics.\nIncludes stock in hands of (1) Federal Reserve Banks and branches, (2) Post offices,\n(3) Federal Reserve Bank issuing agents, and (4) Treasury vaults in Washington.\nRegraded Unclassified\nCONFIRM\nUNITED STATES SAVINGS BONDS\nComparative Statement of Sales During\nLast Twenty-three Business Days of January 1942 and December and November 1941\n(November 1-29, December 431, January 3-29)\nOn Basis of Issue Price\n(Amounts in thousands of dollars)\n:\n:\n:\n:\nSales\n:\nAmount of Increase\n:\nPercentage of Increase\nItem\n:\n:\n:\n:\nJanuary\n:\nDecember\n:\nJanuary\n:\nDecember\nJanuary\nDecember\nNovember\n:\n:\n--\n:\nover\n:\nover\n:\nover\n:\n:\n1942\n:\n1941\n1941\nover\n:\n:\nDecember\n:\nNovember\n:\nDecember\n:\nNovember\nSeries E - Post Offices\n$141,850\n$ 97,439\n$ 37,997\n$ 44,411\n$ 59,442\n45.6%\n156.4%\nSeries E - Banks\n457,554\n228,701\n71,478\n228,853\n157,223\n100.1\n220.0\nSeries 3 - Total\n599,405\n326,140\n109,475\n273,265\n216,665\n83.8\n197.9\nSeries 7 - Banks\n67,492\n30,446\n18,978\n37,046\n11,468\n121.7\n60.4\nSeries G - Banks\n277,331\n135,983\n105,035\n141,348\n30,948\n103.9\n29.5\nTotal\n$944,227\n$492,568\n$233,487\n$451,659\n$259,081\n91.7%\n111.0%\nOffice of the Secretary of the Treasury, Division of Research and Statistics.\nJanuary 30, 1942.\nSource: All figures are deposits with the Treasurer of the United States on account of proceeds\nof sales of United States Savings Bonds.\nNote: Figures have been rounded to nearest thousand and vill not necessarily add to totals.\nRegraded Unclassifi\nUNITED - SAVINGS BONDS\nDaily Sales - January, 1942\nCONFIDENTU\nOn Basis of Issue Price\n(In thousands of dollars)\nPost Office\nBank Bond Sales\nAll Bond Sales\nBond Sales\nDate\nSeries I\nSeries I\nSeries I\nSeries G\nTotal\nSeries 1\nSeries I\nBeries G\nTotal\nJanuary 1942\n1\n$ 3,982\n$ 10,229\n$ 1,964\n# 7,605\n$ 19.798\n$ 14,211\n$ 1,964\n$ 7,605\n$ 23,780\n2\n4,802\n10,736\n2,056\n7.779\n20,571\n15,538\n2,056\n7.779\n25,373\n3\n4,457\n9,557\n1,278\n5,453\n16,289\n14,015\n1,278\n5,453\n20,747\n5\n9,684\n26,724\n3,240\n13,704\n43,668\n36,408\n3,240\n13,704\n53,352\nGV\n6,711\n7,659\n1,341\n6,778\n15,778\n14,369\n1,341\n6,778\n22,489\n7\n6,748\n21,267\n3,692\n16,832\n43,790\n28,015\n3,692\n18,832\n50,539\n8\n7,509\n21,297\n3,821\n12,871\n37,989\n28,806\n3,821\n12,871\n45.498\n9\n5.746\n12,359\n1,798\n4,765\n18,923\n18,105\n1,798\n4,765\n24,669\n10\n4,398\n16,031\n1,858\n6,355\n24,244\n20,429\n1,858\n6,355\n28,641\n12\n10,187\n37,483\n3,830\n14,353\n55,666\n47,670\n3,830\n14,353\n65,853\n13\n7,902\n15,059\n2,507\n11,944\n29,510\n22,961\n2,507\n11,944\n37,412\n14\n4,706\n19,939\n3,701\n14,293\n37,933\n24,645\n3.701\n14,293\n42,639\n15\n6,444\n16,597\n2,243\n13,283\n32,123\n23,041\n2,243\n13,283\n38,567\n16\n5.721\n26,239\n4,319\n14,078\n44,637\n31,960\n4,319\n14,075\n50,358\n17\n4,830\n6,933\n759\n3,008\n10,700\n11,763\n759\n3,008\n15.530\n19\n6,835\n39,000\n3,946\n16,599\n59,545\n47,835\n3,946\n16,599\n68,300\n20\n5,155\n10,549\n2,285\n10,551\n23,385\n15,703\n2,255\n10,551\n28,539\n21\n4,886\n19,375\n3,538\n15,566\n38,479\n24,261\n3,538\n15,566\n43,365\n22\n5,161\n22,257\n3.973\n9.850\n36,080\n27,418\n3.973\n9,850\n41,241\n23\n5.908\n23,392\n2,652\n5,004\n34,048\n29,300\n2,652\n8,004\n39.956\n24\n4,655\n15,820\n2,239\n5,344\n23,403\n20,476\n2,239\n5.344\n28,058\n26\n7,095\n39.997\n5,022\n17,516\n62,535\n47,093\n5,022\n17,516\n69,630\n27\n4,967\n11,504\n3.569\n23,125\n38,199\n16,471\n3.569\n23,125\n43,165\n28\n5,318\n18,394\n2,656\n18,636\n39,686\n23,712\n2,656\n18,636\n45,004\n29\n4,826\n20,123\n3,223\n12,422\n35,768\n24,949\n3,223\n12,422\n40,595\nTotal\n$150,635\n$478,519\n$ 71,513\n$292,714\n$ 842,746\n$629,153\n$ 71,513\n$292,714\n$ 993,380\nOffice of the Secretary of the Treasury, Division of Research and Statistics.\nJanuary 30, 1942.\nSource: All figures are deposits with the Treasurer of the United States on account of proceeds of\nsales of United States savings bonds.\nRegraded Unclas\nLigares have been rounded to sand net consertly add to totals,\n240-A\nJanuary 30, 1942\nTO: LAROID E. GRAVES\nPROGRESS HEPORT These DEPENSE SAVINGS STAFF\n02 BOITDS\nActual cash receints from the sale of S, F and\nG\nwords for the last twenty-three business days of Janu-\nary (January 1 excluded) totaled 929,006,000, an increase\nof 100.6 per cent over sales for the corresponding number\nof days in December. Sales for the last twenty-three\nbusiness days of December were w463,093,000, And the same\nperiod in November, 233,487,000.\nSales of Bonds on Monday, January 26, totaled\n69,530,000, settin\" the highest daily record si ce the\nstart of the Defense Savings Program.\nSeries E Bond sales for the last twenty-three\nbusiness days of Jenuary were ,539,993,000, an increase\nof 95.1 per cent over Series 11 sales for the same period\nin December. Series E sales for the first twenty-three\ndays of December were $302,350,000.\nPAYROLL SAVINGS PLAN\nThe estimated number of employees now exposed\nto Payroll Savings Plans totals 12,148,735. These are\nthe employees of 14,722 firms from \"Mich reports have been\nvislan.\nreceived through State admi Istrators.\nRegraded Unclassified\n240-B\n-2-\nFour thousand forty-three firms employing\n500 or more workers report 10,844,061 employees exposed.\nFive thousand nine hundred thirty-three firms\nemploying between 100 and 500 workers report 1,136,464\nemployees exposed.\nFour thousand seven hundred fifty-six firms\nemploying less than 100 workers report 168,210 workers\nexposed.\nSPECIAL\nLife Magazine's current issue, on newsstands\ntoday, devotes a double spread of ten pictures and text\nto the promotional efforts undertaken for Defense Bonds.\n(Copy attached.)\nVICTORY HOUSES\nStandard Oil Company of California has informed\nthe Treasury that it will continue the Victory House in\nLos Angeles \"for the duration,\" and that a similar House\nto promote the sale of Defense Bonds and Stamps will be\nopened in San Francisco in February.\n240.C\n-3-\nNEWSPAPER CARRIERS\nReturns through January 24 show that the news-\npaper carriers of 604 newspapers have sold 66,673,928\nten cent Defense Savings Stamps, or the cash equivalent\nin Bonds or stamps of larger denominations. This is an\nincrease of 26 per cent over the returns reported as of\nJanuary 19. The dollar increase since the January 19 re-\nport amounts to $13,841,901. (Statistical chart showing\ncarrier boy sales by states is attached.)\nEDUCATION\nCopies of the new Education Committees handbook\nare being distributed to all education representatives on\nlocal and state committees this week by State Administra-\ntors. (Copy attached.)\nThe Education Division has completed arrangements\nto set up & Defense Savings Stamp booth at the Civic audi-\ntorium in San Francisco during the national convention of\nthe American Association of School Administrators from\nFebruary 21 through February 26. The Education Director\nis booked to give three talks at both general and committee\nmeetings of this convention.\nPlans were outlined at the National Executive Board\nmeeting of the Parents Teachers Association in Chicago by the\nEducation Division, calling for expansion of the Defense Sav-\nings Program both by PTA members and in Schools. At this meet-\ning, the National PTA body invested $25,000 in Defense Bonds.\nRegraded Unclassified\n240-D\n-4-\nIn response to numerous requests from school\nofficials, two small pamphlets are in preparation, designed\nto explain the meaning of Bonds and Stamps to school pupils.\nOne of these booklets is being prepared expressly for students\nof high school age; the other for elementary school pupils.\n(Copy of Defense Savings article in \"School Life\" attached.)\nRETAIL STORE ACTIVITY\nGovernor Stevenson of Texas, has advised the\nTreasury's Retail Advisory Committee, that he will issue\na proclamation on February 16, making every pay day De-\nfense Bond Day throughout the entire state. Arrangements\nare being completed to have volunteer workers man Defense\nSavings booths in department stores, hotels and theatres.\nFriday, January 30 is Defense Savings Day in Al-\ntoona, Pennsylvania. Clerks in all stores have been assigned\n$10 worth of Defense Savings Stamps to sell to customers. A\nlarge parade is scheduled and all schools will be closed in\nobservance of the day.\nRetailers of the State of Pennsylvania have set\nthemselves an $80,000,000 goal in their Defense Savings\nDrive; while chain stores of Pennsylvania have advised\nthat their goal is $25,000,000.\nSince January 2 through January 23, Schulte Cigar\nStores in New York City area report that they have sold\n$106,000 worth of Defense Savings Stamps.\nRegraded Unclassified\n240-E\n-5-\nWOMEN'S ORGANIZATIONS\nReplies from 250 questionnaires to women's\norganizations throughout the country are being analyzed\nby the Women's Division. The questionnaires were drawn\nup to determine what individual organizations have done\nand plan to do for the Defense Savings Program, and also\nto learn in what way the Defense Savings Staff might best\naid them. Publications of these organizations are also\nbeing studied to determine the type of Defense Savings\narticles best suited for them.\nThe Women's Division in cooperation with the\nGeneral Federation of Women's Clubs is working out details\nof 8 nationwide pledge-signing contest through local and\nstate member clubs.\nArrangements were completed for members of the\nAmerican Woman's Voluntary Service to sell Defense Savings\nStamps in cooperation with local and state committees.\nENTERTAINMENT\nSabu, the \"elephant boy\" movie star, began his\nnationwide tour of newspaper carrier meetings this week,\nmaking appearances in Washington, D. C., Baltimore, Phila-\ndelphia and Pittsburgh.\nThe Defense Bond Doll Tour of Miss Audrey Kargere,\nstylist and sculptress, opens on February 2 at the Jordan\nMarsh Department store in Boston, Massachusetts.\nRegraded Unclassified\n240-F\n-6-\nMiss Lucy Monroe, concert and radio star, begins\nher extended songfest tour in February. (Copies of Press\nReleases on the Kargere and Monroe tours are attached.)\nSPECIAL COMPAIGNS\n\"Buy a Bomber,\" through the purchase of Defense\nbond campaigns are being started Sunday, February 1, by\nthe New York Journal American and the Los Angeles Examiner.\nSimilar campaigns are scheduled to start on Wednesday, Feb-\nruary 4 by the Washington Post and Radio Station WJSV in\nWashington, D. C.; the Chicago Herald-American and the San\nFrancisco Examiner.\nNEWSREELS\nThe Defense Savings Staff now has 8 library of\nnewsreel film, picturing citizens from all walks of life,\nfrom the states of Minnesota, Wisconsin, Michigan, New York,\nMassachusetts, Rhode Island, Connecticut, Pennsylvania,\nMaryland, Virginia, North Carolina, South Carolina and Georgia.\nTwo newsreel crews are now working, and this week\nwill cover the states of Louisiana, Texas, Oklahoma, Ohio,\nWest Virginia and Kentucky.\nRelease of these films to theaters in these\nregions will begin on 8 continuing basis through the\nfive newsreel companies on March 5.\nRegraded Unclassified\n240-G\n-7-\nMOTION PICTURES\nThe Motion Picture Theaters Section of the War\nActivities Committee of the Motion Picture Industry has\npassed a resolution that they will make every effort to\nplace Stamps on sale at special booths or at the box offices\nor candy counters as soon as possible in every one of the\n13,000 theatres which they represent.\nSpecial \"Bugs Bunny\" animated cartoon produced\nby Leon Schlesinger to promote Defense Savings, is being\ndistributed to theatres throughout the country.\nBUSINESS PUBLICATIONS\nReplies have been received from 250 business\npublications advising that they will run the second ad-\nvertisement on Payroll Savings in their February or March\nissues.\nIn additi n to publishing the first Payroll\nSavings Advertisement, numerous publications are carry-\ning special cover illustrations featuring Defense Bonds\nand Stamps. A typical example is illustrated in attached\ntear sheets from American Agency Bulletin.\nCoupon requests from the first Payroll Savings\nadvertisement now total 2,855.\nNewsweek Magazine publishes Payroll Savings\nadvertisement in current issue. (Copy attached)\nRegraded Unclassified\n240-H\n-8-\nHOUSE MAGAZINES\nHouse magazines publishing the first one column\nfeature release \"Defense Bonds Buy Tanks,\" now total 700.\nRADIO\nTotal of 2,581 Minute Men already have broadcast,\nin English and eleven foreign languages, over 814 radio\nstations throughout the country. (Copy of Treasury De-\npartment citation given to Minute Men is attached.)\nTwenty-seven of the ninety-six United States\nSenators have already made recordings in the interest of\nthe Defense Savings Program. Others are making their records\ndaily. These transcriptions will be distributed to all radio\nstations in the senators' home states. Senators who have\ncompleted their records are:\nRobert M. LaFollett Jr., of Wisconsin; Alexander\nWiley of Wisconsin; Henry Cabot Lodge, Jr., of Massachusetts;\nScott W. Lucas of Illinois; Harry S. Truman of Missouri;\nJoseph H. Ball of Minnesota; George W. Norris of Nebraska;\nArthur H. Vandenberg of Michigan; Wall Doxey of Mississippi;\nTheodore G. Bilbo of Mississippi; Millard E. Tydings of\nMaryland; Hugh A. Butler of Nebraska; Raymond E. Willis\nof Indiana; James E. Murrey of Montana; James E. Mead of\nNew York; George D. Aiken of Vermont; John Thomas of Idaho;\nJames M. Tunnell of Delaware; D. Worth Clark of Idaho;\nArthur Capper of Kansas; Albert B. Chandler of Kentucky;\n240-I\n-9-\nCharles W. Tobey of New Hampshire; William J. Bulow of\nSouth Dakota; Eugene Millikin of Colorado; Joseph Rosier\nof West Virginia; Edwin C. Johnson of Colorado; and C.\nWayland Brooks of Illinois.\nForeign language radio stations and program\ndirectors are announcing daily the amount of Bonds bought\nby foreign language organizations, in addition to schedu-\nling Minute Man speakers. (Typical foreign language\nMinute Man address attached.)\nFarm program directors are scheduling Minute\nMen daily on 214 stations. New Minute Man announcements\nhave been sent to 870 radio stations for daily use, (samples\nattached) along with regular announcement for use five\ntimes daily. (Samples attached.)\nEmployees of Standard Oil refineries of New\nJersey have pledged $600,000 out of 1942 wages for pur-\nchase of Bonds.\nBroadcasting Magazine story of January 19 on\nradio stations participation in Defense Payroll Savings\nis attached.\nPRESS\nEditors of fourteen movie and radio fan magazines\nmet with Defense Savings Staff representatives in New York\nthis week to develop plans for further promotion of Defense\nRegraded Unclassified\n240.J\nJ\n-10-\nBonds and Sta ps. Each editor present pledged his magazine\nto all possible support of the program and each promised to\ndevelop individual means of supporting Defense Savings.\nMiss Dagmar Norgord, representing the publishers\nof All-American Comics, Inc., net with staff represente-\ntives in Washington to present a plan for organizing the\n\\OTS then 40 publishers of comic magazines in support of\nDefause Sevings. A further meeting with E committee of\npublishers is being arranged for next week, when a plan\nfor resching children through these comics will be out-\nlined in detail.\nThe Press Section contacted leading representatives\nof religious publications of all faiths to discuss means of\nfurthering the Defense Savings Program through this valuable\nmedium. A meeting with B group of verious Protestant de-\nnominational leaders is scheduled for next week to advance\nthese Mims, with representatives of all faiths expressing\na desire to help in all ways possible.\nNat releases this week including mailing of the\nthird set of comics -- Abbie 'n Slats, Silly Milly, Winnie\nWill ule and Rube Goldberg -- to all daily newsoapers, along\nwith the February set of four editorial cartoons.\nPayroll Savings clip sheet (cory atteched) WHS\nailed to all newspapers.\nCopies of newspaper pages with photographs pro-\noting sale of Defense Bonds and Stangs are atteched.\nRegraded Unclassified\n240-15\n-11-\nLABOR PRESS\nMembers of the Pabor Division and Labor Press\nSection met this week with American Federation of Labor\nrepresentatives to outline cooperative plans of publicity\nin 00 nection with the AFL campaign for $1,000,000,000\nDefense Bond goal.\nThe CIO News cerried a special article, prepared\nby Labor Press Section, on Secretary Morgenthad's Detroit\nvisit.\nPublication of Aluminum Workers of America, CIC,\npublicized with picture of 8. submarine, their goal to raise\n6,000,000 in Defense Ponds. (Copy atteched)\nDIRECT MAIL\nTotal Sales of Defense Bonds through the medium\nof Direct Mail, B.S. of January 28, were 18,045,620. The\nSecond Customer Mailing, to a roster of 894,000 newly\navailable names, has produced $1,527,926 in 43 days of\npulling.\nRegraded Unclassified\nTREASURY DEPARTMENT\nMe\"\nINTER OFFICE COMMUNICATION\nDATE January 30. 1942\nSecretary Morgenthau\nTO\nFROM\nMr. Kemarck\nsunject: of Possible Interest: Some British Military Criticiem\nof British War Policy\nIn connection with the debate in the House of\nCommons on mistakes and !nefficiency In the conduct\nof the war, it might be of interest to note that\nthere has been considerable criticism along these\nlines from British military circles themselves. This\nattack 18 not directed against Churchill. There was\na great deal of criticism in the war of 1914-18 of\nChurchill's policy as being too rash, too adventurous\nand too much in disregard of official military and\nnaval advice. This attack did result in Churchill's\nlosing his post as First Lord of the Admiralty.\nChurchill appears, after the war, to have agreed with\nthis earlier criticism himself. He says in his book,\n\"The World Crisis\", published in 1923: \"Looking\nback with after-knowledge and increasing years, I\nseem to have been too ready to undertake tasks which\nwere hazardous or even forlorn.\" (Volume I, P. 348)\nIn this wer, the criticism runs in the opposite\ndirection: that the conduct of the wer 18 too much\ngoverned by the slow-moving, conservative and ineffi-\ncient military hiererchy. According to 8 British\nofficer, who worked in the Admiralty in the first year\nof this war, almost directly in contact with Churchill\nas First Lord of the Admiralty, he said that, in his\nexperience, Churchill allowed himself to be lulled by\nhis naval subordinates into a policy of inaction.\nThis British officer, incidentally, agrees with the\ncriticism of Churchill's conduct in the last war.\nRegraded Unclassified\n- 2 -\n212\nAdmiral Sir Roger Keyes told the House of Commons last\nNovember, on leaving his post as the head of the Commandos,\nthat this force, created primarily for daring offensive, had\nbeen hobbled by the War Office. He stated flatly:\n\"After fifteen months of directing the\nCommandos and having been frustrated in\nevery worth-while offensive action I tried\nto undertake, I most fully endorse the Prime\nMinister's contention of the strength of the\nnegative power which controls the war-making\nmachine in Whitehall.\n\"Today we have B. fighting Prime Minister,\nbut unfortunately he 1s handicapped not only\nby the same kind of machine in Whitehall as\nexisted in the last war, but with an even\ngreater force apparently with constitutional\npower.\"\nAdmiral Sir Herbert Richmond makes 8. similar criticism:\n\"At the beginning of the War the pernicious\ncatchword was 'Time is on our side'. That delu-\nsion was swept away when France capitulated, but\nnow & new and not less mistaken catchword 18\ntaking its place, 'the allied resources outweigh\nthose of the enemy'. The importance of resources\nis unquestioned, but he wins who uses them with\nforesight, intelligence and vigour. So far there\nhas been little of these in the direction of the\nwar. Opportunities have been missed - Trondhjem,\nDakar, Crete and, if Admiral Keyes is right, in\nthe refussl to make any use of the picked and well\nequipped Commando forces. The bravery of the\nfighting men at sea, on land and in the air can\ndo nothing if the hands which direct lack the\nqualities needed.\"\n(\"The Fortnightly\", January, 1942)\nRegraded Unclassified\n243\nBRITISH AIR COMMISSION\n1785 MASSACHUSETTS AVENUE\nWASHINGTON. D.C.\nTELEPHONE HOBART 9000\nPLEASE QUOTE\nREFERENCE NO\nWith the compliments ol British Air Commission,\nwho enclose Statement No. 18 - Aircraft Despetched -\nfor week ended January 27, 1942 - Date: January 29, 1942.\nThe Hon. Henry Morgenthau, Jr.\nSecretary of t.e Treasury\nMashington, D. C.\nJanuary 30, 1942.\nRegraded Unclassified\n244\nSTATEMENT NO. 18\nAIRCRAFT DESPATCHED FROM THE UNITED STATES\nDURING WEEK ENDED JANUARY 27, 1942\nFLIGHT DELIVERED\nTYPE\nDESTINATION\nASSEMBLY POINT\nBY SEA\nBY AIR\nFOR USE IN CANADA\nCESSNA\nT 50\nCenada\n12\nCONSOLIDATED\nCatelins Caneda\n1\nCURTISS\nKittyhawks\nMiddle East\nPort Suden\n39\nCanada\n14\nGLENN MARTIN\nBaltimore Middle East Port Suden\n24\nGRUMMN\nMartlett II U.K.\nU.K.\n5\nNORTH AMERICAN\nHarvard II Canada\n1\nMustang\nU.K.\nU.K.\n42\n1\nFAIRCHILD\n9\nU.K.\nU.K.\n1\nVULTEE\nStinston 049\nU.K.\nU.K.\n4\nTOTALS\n115\n28\nBritish Air Commission\nJenuary 29, 1942.\nRegraded Unclassified\n245\nP\nY\nSAFE HAND\nBRITISH essassy,\nWASHINGTON, D.C.,\nCONFIDENTIAL\nW.T.612/12/42\n30th January, 1942.\nDear Mr. Dietrich,\nI enclose a copy of a secret memorandum which I have\nreceived from London on the subject of postage stamps. I -\nafraid this has taken a long time to reach me owing to A delay\nin the mail, and it is probably now rather out of date particu-\nlarly in view of the action which you have taken under the\nFreesing Order. However, I an sending it in case it contains\nany new information which is of interest to you.\nSome of the information in the memorendum comes from\nsecret sources and it should therefore be treated with rather\nmore than ordinary care.\nYours sincerely,\n(Sgd) W. Ritchie.\nMr. Frank Dietrich,\nRoom 279. U.S. Treasury Department,\nWashington, D.C.\nWR:TMI\nRegraded Unclassified\nCOFT\n12/12/42\n246\nSECRET.\nM PORTS 02 POSTAGE SALUS.\nGINERAL.\n1,\nThe German authorities have for years controlled the\nanternal and internal traffic in vostage stamps with almost\nreater severity than the movement of notes, securities,\nbills of exchange, cheques and coins. The reason for this\nvery close attention is that rare stamps afford an easy 01:-\nportunity for hoarding and transferring capital without at=\ntracting public notice.\n2,\nPurchases of stamps in Germany by foreignars or for\nforeign account officially have been per issible only when\nsuch transactions were paid for in foreign currencies or\n\"free\"marks. The use of registered marks or other mrk\ncategories has been strictly prohibited. In addition, there\nas been a system of export licensing.\n3.\nDirect purchases and sales - normal business between\ndealers has been permitted but, apart from this, recognised\ndealers have often been permitted to exchange single stamps,\nlots or collections with dealers in other countries. Such\ntraffic has been subjected to very close and expert supervis-\nion to ensure that no illicit transfer of capital takes place.\nTHE HOLD MARKET.\n:-\nThere is evidence that many German citizens are buying\nstamps se a protection against inflation. In this they are\nmerely following the practice adopted during and after the\nlast war, when it WILE found that the possession of postage\nstamps WELS a convenient and inconspicuous way of investing\ncapital with an international value. A recent visitor to\nGermany confirmed that foreign stamps were commanding 8 emch\nhigher price in Germany than in other countries.\nRegraded Unclassified\n247\n- 2 -\n5.\nThere is & report from Genevn that Swies stamp-dealers\nare doing a roaring trade with German buyers, and prices have\nrisen 50 per cent in the last few months. (It is not clear\nhow this is achieved under existing arrangements but paragraph\n16 may provide the answer). The Germans show a particular\ninterest in complete sets of British Colonialissues because\nthese have a good international value.\nb.\nIt is significant that on October 4th the Reichswirt-\nschaftsminister issued B decree forbidding trade in used or\nunused stamps of enemy countries. The order prohibits the\nexhibition, offer and sale of such stamps either singly, in\nlots or collections.\n7.\nSpecial mention was sade in the order of issues of\nGreat Britain and all her Colonies, Dependencies, Protector-\nates and andates; Australia: India: Indian States: Canada;\nNew Sealand: South Africa (including South West Africa); Sudari:\nEgypt: Irak; and the Soviet Union.\n8.\nThe effect of this order has been to immobilise unch\nof the German dealere' capital.\nOUTSIDE INTEREST IN GREMAN Issues.\n9.\nGerman military victories have resulted in intense\ninterest in German issues. The philatelist 1B an inveterate\n\"headline hunter\" and will pay high prices for any stamps\nwhich have a \"news value\".\n10. A report from Stockholm shows that there is a special\ninterest in provisional issues, 1.e. the normal peace-time\nissues of overrun countries which have been surcharged to\nshow that these countries are under military occupation.\nTHE EXTENT OF OFFICIAL INTER.ST IN EXPORTS.\n11,\nThe key point 1s the extent to which the German Govern-\nment are interested in the export of enemy issues to the out-\nside world, and particularly to the Americas. Other and more\nscrupulous Governments have shown BO much interest in postage\nstamps as a eans of obtaining revenue and foreign exchange\nthat it seems unlikely that the Nasis have overlooked this\nroad to easy money.\nRegraded Unclassified\n248\n- 3 -\n12. If peace-time activities are a guide to war-time tac-\ntics, then the German Government are involved no to the hilt.\nBetween 1935 and 1939 they issued nearly 100 special issues\nover and above those required for ordinary postal needs and\nthese were mainly for the foreign collectors. The German\npostal authorities maintained B. special department to supply\ncollectors with all current German stamps - or issued under\nGerman auspices - at face value. This is an old dodge in\nthe philatelic game, and in considering it one must remember\nthat almost the entire proceeds are profits. As no services\nhave to be given in return for the sale of the stamps, the\nonly expenses to offset against receipts are the costs of\nprinting and material,\n13.\nThere has also been a suggestion tist the Germans are\neliberately issuinz stangs which have certain deformities,\ncounting upon the fact that collectors will pay higher prices\nfor thèse \"deformities\", This is very likely, but bloght 10\nno information to confirm it.\n14.\nIt is interesting to note that the iggies of eneur-\noccupied territories can be obt ined in ununed condition in\nGermany at less than face value. Dere is also evidence the\nthe Germans have been buying 110 copies of E. FO franc French\nstrip, recently issued, which bears the ortende of Capacier\n(the French air ace of the last mr).\nCF\n15,\nIt seems to be generally agreed 07 these who have in-\nVestigated the stamp traffic that the cont prevalent method\nof exporting to the Americas is by the LAND service,\nLarge quantities can be exported without taking up much\nspace. There 1s also S estion that the čivlon tic bag\nis used for the purpose.\n16.\nChere 1a information from R. reliable source that the\nCommercial Secretariat of the German Legation in Berne are\nsending stamps to the Americas by LAT.I.I. on B. large scale.\nBritish Colonial stomps (gee paragraph 5) are their special\ninterest. It may seem odd that the Gernans should purchase\nstamps for the sake of re-selling them, but there ie a simple\nexplanation of this. A complete set of a certain issue will\nraise a higher price than if the stange were sold individually.\nThis, German dealers may have incomplete sets which CRD be\nIncreased considerably in salemble value 12 the missing stude\nRegraded Unclassified\n249\n- 4 -\ncan be purchased. Furthermore, stampe bought in Switzerland\nare paid for in Swies francs, whereas they can be sold for\nAmerican currencies.\n17.\nThere is also the suggestion that Germany may have\ndespatched dies to South America and are having German 10-\nsues produced locally for collector purposes. There is no\ninformation to support this, but it is a possibility which\ncannot be excluded.\nTHE USE OF hetprals.\n15.\nCertain neutral dealers are assisting the Germans by\nexporting their stamps. This has been proved by intercep-\ntions and seizures at Bermuda and Trinidad. Whether they\nare acting for the Germans or dealing independently for per-\nsonal profit 10 immaterial. Each stamp which is sold outside\nGermany represents additional revenue, usually paid in\nforeign exchange.\n19. The principal dealers are in Switzerland and Liechten-\nstein - Staiger of Zurich, Babaeff of Geneva and Stauffenegger\nof Vaduz are three of the more prominent. There are also one\nor two dealers in Portugal and, in a small way, in Sweden,\nSKUGGLING.\n20.\nIt is believed that, apart from LA.T.I., the chief\nmethod of export is to have them smuggled by a member of &\nship's crew. Because they are such small articles - several\nbundred can be packed into B. medium-sized envelope - it is\nexceedingly difficult to find them. Even if a ship were\ncombed from top to bottom, it 10 probable that a hoard would\nnot be discovered. It 10 a battle of wits between the smuggler\nand the searcher, with the cards stacked in favour of the\nformer.\n21.\nThere is reason to believe that many of the Portuguese\nships sailing to New York have \"collections\" on board, and\nthat Spanish ships sailing to the Americas are similarly used,\n22.\nThe only clear evidence is that the crews of the Ameri-\ncan Export Line ships are working with googs of sungglers\noperating in Lisbon, and that their activities are on a grand\nscale,\n23.\nThere are two gangs at work. One 18 organised by B\nSwise named Kubli, assisted by a Belgian journalist L'Ohr and\nRegraded Unclassified\n250\n- 5 -\nG. Portuguese, A. Lomelino Lora (known an Tont) of the Inter-\nstional rading Corporation, Rossio 93, Lisbon. They work\nwith three members of the Lxeter crew. John Boning, linen-\nLeeper. who is believed to be brains of the trip; harold\n.hlers (icnown as \"Long Harry\"), a deck steward aged 39. who\nrecently carried a parcel valued at 1,500 dollars and broug t\nback the money in notes on the return voyage; and an Irish-\nAmerican who has not yet been identified.\n24. The second sang is organized by Sulmanis, a dealer in\nLisbon who is known to be in constant communication with\nGermany. They work with members of the crew of the Excalibur,\nof whom Trank Horning is the leader.\n25. According to one report, these two gangs are despatch-\ninc unused German stamps, which can be sold at a profit of\n500 per cent in the United States.\nASERICAN BUYERS.\n26.\nThe principal buyers are said to be refugees from\nPurope, operating in :lew York.\n27.\nJ. & E. Stolow are probably the most prominent offenders.\nany consignments to this firm have been seimed at Bermuda\nand they are known to be using the service. They\nare also receiving many of the stamps amiggled in the American\nAxport Line ships.\n26.\nOther buyers are:-\nEliot 1, alton, Inc., item York.\nAgruba, You York.\nSchoenbach's Stamp Axchange, -lew York.\nBolaffi, Llew York.\nStamp Export & Import Corp. (President Bela\nSekula), -em York.\nTankel, dem York.\nPatoullah, New York\nAtlantic Stamp Co., Vew York.\nCarl Marks & Co., Inc., Ilem York,\nF. 3. Zeitlin, View York,\nMONCLUSIONS.\n9.\nIt seems clear that there is an extensive traffic in\nmeny stamps and that this is operated with the assistance or\nthe approval of the German Government.\nRegraded Unclassified\n250\n- 5 -\n& Portuguese, A. Lomelino Lyra (known as Toni) of the Inter-\nnational rading Corporation, Rossio 93, Lisbon. They work\nwith three members of the Exeter crew, John Boning, linen-\nkeeper, who 1e believed to be brains of the trip: Earold\nEhlers (known as \"Long Harry\"). a deck steward aged 39. who\nrecently carried B. parcel valued at 1,500 dollars and brought\nback the money in notes on the return voyage; and an Iriab-\nAmerican who has not yet been identified.\n24. The second gang is organized by Sulmanis, a dealer in\nLisbon who is known to be in constant communication with\nGermany. They work with members of the crew of the Excalibur,\nof whom Frank Horning is the leader.\n25. According to one report, these two cange are despatch-\ning unused German stamps, which can be sold at a profit of\n500 per cent in the United States.\nALERICAN BUYERS.\n26. The principal buyers are said to be refugees from\nDurope, operating in New York.\n27. J. & E. Stolow are probably the most prominent offenders.\nLany consignments to this firm have been seized at Bermida\nand they are known to be using the LA.T.I. service. They\nare also receiving many of the stamps amuggled in the American\nExport Line ships.\n28.\nOther buyers are:-\nEliot 1. \"alton, Inc., Sew York,\nAgruba, New York.\nSchoenbach's Stamp Ixchange, New York,\nBolaffi, New York.\nStamp Export di Import Corp. (Fresident Bela\nSekula), -8W York.\nTankel, New York.\nPatoullah, Yes York\nAtlantic Stamp Co., New York.\nCarl Varice & Co., Inc., New York,\nE. 3. Zeitlin, New York,\nCONCLUSIONS.\n29. enemy stamps and that this is operated with the assistance or\nIt seems clear that there is an extensive traffic in\nthe approval of the German Government.\nRegraded Unclassified\n251\n30.\nThe traffic can be divided into two categories:-\n(a) The export of new umised issues in enemy and occupied\nterritories which are in demand in neutral territor-\nies. This trade can be carried on without any inter-\nference with internal trade because the supply of\nstamps is always equal to the demand, although this\ndoes not necessarily mean that sufficient can be ex-\nported to meet the demand;\n(b) The export of stamps which have an international value,\nIn to is category can be included used and unused\nstanps of all countries which are rarities or are in\nspecial demand, The British Colonial issues mentioned\nin paragraph five are an example. The export of such\nstamps would be made from stocks or from purchases\nwithin the European area,\n31.\nIt is possible that as regards (b) there 1s a tug of\nwar between private and official intereste ingide Germany.\nAs shown in paragraph four there is B. tendency to hoard\nstamps as a protection against inflation, whereas it is in\nthe official interests to prevent money being invested in\npostage stamps which might otherwise be lent to the State.\nIt is also in German interests to sell these stamps overseas\nand so to convert then into foreign exchange.\n32.\nThese facts give added significance to the recent\ndecree forbidding trade In British stamps. The effects of\nthis are fairly clear. There will be a certain number of\n\"black market\" dealings, but, in general, dealers will find\nthat a large part of their capital has been frozen. Probably\nthe next step will be an official offer to purchase these\nstamps and they will then be sold overseas.\n33.\nThe extent of the existing traffic cannot be eati-\nmated reliably. It has been suggested that it amounts to\nabout £5,000,000 per year. and it would be unwise to assume\nthat this 10 an over-estimate. The stamp trade is always a\nflourishing one, and if skilfully exploited it can yield sub-\nstantial results.\n34.\nThe fact must be faced that BO far the Germans have\nbeen very successful. Control at Fermuda over peckages sent\nthrough the mails is probably effective, but most of the\ntrade does not pass through Bermuda, It is also reasonable\nto sssume that the Dermane will expand this trade if possible,\nand the = acent decree regarding British stamps foreshndows &\ndrive in a new direction. If this is to be defeated, it in\n@ssential that prompt action 1a taken.\nRegraded Unclassified\n252\n- 7 -\n35.\nAs regards the amuggling, there are two ways of try-\ning to check this. The first is to have a careful search at\nBermuda. The second is for action by the United States\nauthorities. There can be no doubt that the latter would be\nthe more effective, partly because more time would be available\nand partly because there would be greater opportunities for\nexamining the crews as they tried to go ashore with their\nhauls.\nGENERAL SECTION,\nNeutral Trade Dept. I.\n2.2.7.\nCopy:ec:2-2-42\nRegraded Unclassified\n253\n.F\nPLAIN\nLondon\nDated January 30, 1942\nRec'd 1:45 p.m.\nSecretary of State,\nWashington.\n442, thirtieth\nFOR THE SECRETARY OF THE TREASURY FROM CASADAY.\nIn addition to the daily and weekly press sum-\nmaries prepared by the British Ministry of Information\nend which, at the Ambassador's request, are being for-\nwarded regularly by air to Washington with one copy\nmarked for Treasury, attention is now called to a\ntelegraphic press digest prepared by the Embassy re-\npresentative of the Coordinator of Information and\nforwarded daily to the NEW York office of the Coor-\ndinator of Information and thence by teletype to\nits Washington office. The ...mbassador suggests that\nthis SERVICE likewise may bE of interest to the Seo-\nretary of the Treasury as well as to some officials\nof the State Department.\nWIN..NT\nDD\nRegraded Unclassified\n254\nJanuary 30, 1942\nMr. Livesey\nMr. D. V. Bell\nwill you please send the attached cable from the Secretary of the Treasury\nto High Commissioner Sayre, Manila (Fort Mille).\nFD:kma 1/29/42\nRegraded Unclassified\n0\no\nP\n255\nI\nDRAFT OF CARE TO 13 TRANSMITTED TO THE KIGH COMMISSIONER OF THE\nPHILIPPINE ISLANDS\nfor Sayse from Secretary of the Treasury.\nReference your No. 30 Jamuary 26th. Account of Philippine Treasury\ncredited with $23,000,000 during the period November 27th through\nDecember 24th, including last credit of $10,500,000 based on radio No.\n10. December 23, from Queson. Apparantly Treasury has reimbursed\nPhilippine Treasury for substantial amount of checks now in your\ncustedy. Please furnish separately total amount of payments, receipts\nand deposite for restoration of balance shown in the account Treasurer\nof United States with Philippine Treasury subsequent to transcript of\naccount of November 25th, the last received by Treasury. Upon receipt\nof such information consideration will be given to further credits to\naccount of Philippine Treasury if it can be determined that it is\nentitled to further credit. Can it be accertained from information\navailable to you whether cheeks is your custedy are included in total\npayments in account of Treasurer of United States referred to above.\nWillialb 1-29-42\nCopyree:1-30-42\nRegraded Unclassified\n256\nTELEGRAM SENT\nMEV\nJanuary 30, 1942\nThis telagram must bE\nparaphrased before being\n4 pame\ncommunicated to anyone\nother than a Governmental\nagency. (BR)\nUNITED STATES HIGH COMMISSIONER,\nMANILA (FORT MILLS, PHILIPPINE ISLANDS)\n18\nFor Sayre from Secretary of the Treasury.\nYour 30 January 26, 10 a.m. Account of\nPhilippine Treasury credited with $23,000,000\nduring the period November 27th through December\n24th, including last credit of $10,500,000 based\non radio no. 10 December 23, from Quezon. Apparently\nTreasury has reimbursed Philippine Treasury for sub-\nstantial amount of checks now in your custody. Please\nfurnish stparattly total amount of payments, receipts\nand deposits for restoration of balance shown in the\naccount Treasurer of United States with Philippine\nTreasury substquent to transcript of account of\nNovember 25th, the last received by Treasury. Upon\nreceipt of such information consideration will be\ngiven to further credits to account of Philippine\nTreasury if it can be determined that it is entitled\nto further credit. Can it be ascertained from infor-\nmetion available to you whether checks in your custody\nart included\nRegraded Unclassified\n257\n-2- #18, January 30, 4 p.m., to Manila.\nare included in total payments in account of\nTreasurer of United States referred to above?\nHULL\n(FL)\nFD:FL:BMcB\nRegraded Unclassified\nDate\n19\nTo:\nMiss Chauncey\nFor your files.\nMR. WHITE\nBranch 2058 - Room 214\n259\nJW\nBuenos Aires\nThis telegram must bE\nparaphrased before being\nDated January 30, 1942\ncommunicated to anyone\nother than a Governmental\nRec'd 6 p.m.\nagency. (br)\nScoretary of State,\nWashington.\n182, January 30, 6 0.00\nReferring to the 110 million dollar loan\ncredit for Argentina arranged with the Treasury\nDepartment and the Export-Import Bank in December\n1940 official statistics published here yesterday\nindicate that Argentine in 1941 had en aggregate\npositive trade balance of 187 million praos RB\ncompared with n negative balance of 71 million pt808\nin 1940 and had A positive belance with the United\nStates (ellowing for Estimated differences between\n\"teriff values\" and \"real values\") of roughly 175\nmillion pesos P8 contrasted with e substantial negative\nbalance for 1941 enticipated at the time of the\nfinancial conversetions in 1940. As the official\nexport figures Are understimpted the true trade\nbolance with the United States wee probably pt least\n250 million DEBOS.\nIt is believed the above may bE of interest\nto Worren\nRegraded Unclassified\n260\n-2- #182, January 30, 6 p.m. from Buenos Aires.\nto Warren Pierson in ViEW of talks I had with him\nat Rio de Janeiro. HE and the Secretary of the\nTreasury may also wish to consider what would bE\ntheir position in the EVENT that Congress when it\nmeets should approve the loan credit.\nARMOUR\nKLP\n201\nFebruary 4, 1942\nSecretary Morgenthau\nMr. White\nIn connection with our Stabilization Agreement with\nArgentina - as yet unretified - you may be interested in the\nattached cable.\nAmbassador Armour reports in the cable that Argentina's\ntotal trade balance in 1941 showed an excess of exports of\n167,000,000 pesos compared with an excess of imports of\n71,000,000 pesos in 1940. The excess of exports with United\nStates will probably be officially reported at 175,000,000\npesos in 1941 (actually possibly as much A6 250,000,000 pesos)\ncontrasted with Argentine predictions of excess of imports\nduring the negotiations in 1940.\nAmbassador Armour suggests that these data may De\ninteresting should the Argentine Congress approve our Stabili-\nzation Agreement at its forthcoming session.\nA5:dm:2/4/42\nRegraded Unclassified\n262\nCABLE\nFrom: Lisbon\nDated: January 30, 1942\nRec'd: January 31, 1942\nFederal Reserve Bank of New York,\nNew York.\n#5\nIn order strengthen our gold reserve request you\nobtain license and convert $10,000,000 into gold to be\nheld by you earmarked our account. You will receive\nBank Manhattan New York $7,000,000. Please cable exe-\ncution.\n(Signed) Banco de Portugal.\n(Received by telephone from Federal Reserve Bank, New\nYork, 11:00 a.m., 1-31-42)\nec\nRegraded Unclassified\nTREASURY DEPARTMENT\n263\nINTER-OFFICE COMMUNICATION\nChauncey\nDATE January 30, 1942\nTO\nSecretary Morgenthau\nFOR\nFROM Mr. Dietrich\nCONFIDENTIAL\nRegistered sterling transactions of the reporting banks were as follows:\nSold to commercial concerns\n£39,000\nPurchased from commercial concerns £12,000\nOpen market sterling remained at 4.03-3/4. with no reported transactions.\nFor account of the Central Bank of China, the Federal Reserve Bank of\nNew York purchased £200,000 from the Bank of England at 4.03-1/2.\nThe Canadian dollar discount narrowed to 11-5/8% at the close, compared\nwith 11-7/8% yesterday.\nThe Cuban peso, which had been quoted at par until January 28 and at a\npremium of 1/16% thereafter, advanced to 1/4% premium today.\nIn New York, closing quotations for the foreign currencies listed below\nwere as follows:\nArgentine peso (free)\n.2360\nBrasilian milreis (free)\n.0516\nColombian peso\n.5775\nMexican peso\n.2065\nUruguayan peso (free)\n.5250\nVenezuelan bolivar\n.2720\nThere were no gold transactions consummated by us today.\nNo new gold engagements were reported.\nIn London, spot and forward silver remained at 23-1/2d and 23-9/16d\nrespectively, equivalent to 42.67$ and 42.78$.\nThe Treasury's purchase price for foreign silver was unchanged at 35#.\nHandy and Harman's settlement price for foreign silver was also unchanged at\n35-1/8#.\nWe made no purchases of silver today.\nAD\nRESTRICTED\n264\nG-2/2657-220: No. 616 M.I.D., W.D. 11:00 A.M., January 30, 1942.\nSITUATION REPORT\nI. Pacific Theater.\nPhilippines: There was light fighting all along our lines\nyesterday, with enemy air activity negligible. Activity in Mindanao\nis limited to patrolling. In the Visayans there is no change. Hawaii:\nNo further reports of hostile activity. Malaya: Official communiques\nreport Japanese advances on the east coast and in the center. No\nchange on the west. Air action continues over Singapore. Burma:\nProperations for an attack on Moulmein continue. Air action over\nBangoon is reported on EL reduced scale, Australasia: No further re-\nports have been received on the progress of the Japanese convoy in the\nMacasuar Straits. It is believed, however, that that force is still\nbeing subjected to heavy Dutch and American air and sea bombardment.\nAerial activity by both sides continues, but there is no important\nchange in the general situation throughout this area. West Coast: No\nfurther reports of enemy activity.\nII. Eastern Theater.\nGround: Both sides report continuous fighting in spite of\ndeep snow and severe cold. The Germans report defensive fighting in\nthe Donets area. The Russians claim to have captured Barvenkova and\nLosovaya (75 miles south of Kharkov).\nIII. Western Theater.\nNo activity of importance has been reported.\nIV. Middle Eastern Theater.\nGround: British Middle East Headquarters announced the\ncapture of Benghazi by Axis forces January 30. Press reports indicate\nthe British forces south of Benghazi were forced to retire from the\ncity, The main Axis effort was northward along the coastal plain\ncoordinated with a flanking attack northwest out of Zt, Lisus. This\nflank attack succeeded in cutting the road north of Benghazi and the\nstatus of British forces in this area is somewhat obscure. An Axis\nscreening force is in operation east and northeast of 2t. Usus, Minor\nactions are reported from this area.\nAir: Valta is still under Axis air bombardment. Present\naerial activity in North Africa is largely confined to attacks on rear\nareas and supply lines.\nRESTRICTED\nRegraded Unclassified\n265\nJanuary 31, 1942\n9:07 a.m.\nHMJr:\nYes, Bill.\nColonel\nDonovan:\nI've followed all that through. Now I'll give\nyou something in writing, or I'll give you my\nreaction right off.\nHMJr:\nI'd rather have your reaction.\nD:\nMy reaction is that while weaknesses - the 1m-\nportant weaknesses can be cured by help.\nHMJr:\nI see. Financial?\nD:\nOf any kind.\nHMJr:\nOf any kind. I see.\nD:\nAnd even though it's 80 important - you see,\nthey're containing a greater force up there than\nare being used below.\nHMJr:\nI see.\nD:\nAnd even if it weren't for this, it's got to be\ntaken, that's my judgment.\nHMJr:\nYeah. And you think it's.....\nD:\nAnd I think that would - it's particularly important\nbecause Burma will probably be lost.\nHMJr:\nOr closed.\nD:\nYes.\nHMJr:\nTo Rangoon.\nD:\nThat's right.\nHM,Jr:\nRight. Well, that's all -- I don't need any more.\nD:\nAll right.\nHM,Jr:\nVery much obliged.\nD:\nAll right, Henry.\n266\nJanuary 31, 1942,\nMEMORANDUM FOR THE SECRETARY'S FILES\nConference in Mr. White's Office\nJanuary 31, 1942\n9:30 A. M.\nPresent: Mr. White\nDr. Soong\nDr. Soong called on Mr. White at Dr. Soong's request.\nDr. Soong said that he would like to have Mr. White inform the\nSecretary of his conversation with the President on Friday, January 30.\nThe Ambassador and Dr. Soong had arranged through the State\nDepartment for a conference with the President. Dr. Soong said he\nhad wished to take up two points with the President, as follows:\n1. To make a plea for greater participation by the Chinese Gov-\nernment in the Committee (presumably British and the United States)\nnow deciding the distribution of war materials as among the various\ncountries. He said that he appreciated the fact that they could not\nhave an important say in this distribution, but that they would like\nto have their relationship to the problem formalized 50 that China's\npoint of view could be assured of an adequate hearing. Soong did not\nindicate what the President's reply to his request was.\n2, The second point he took up with the President was that of\nproviding means of transportation by air line between India and China.\nHe said if they could get 100 planes like the Douglas transport planes\n(but without the seats and other unnecessary equipment) they would be\nable to transport 12,000 tons of freight each month between Kunming\nand Sodiya, after allowing for enough gasoline to carry planes both\nways. They had been promised 35 such planes during 1942. Soong was\npressing for 100 such planes quickly, inasmuch es they feared that the\nBurma Road would be interrupted. He said that Rangoon was now closed\nby enemy submarines, for how long he did not know.\nThe President seemed favorable to the idea and told Soong to take\nit up with Hopkins and some others. The President thought some planes\ncould be taken off the present commercial lines for the purpose.\nRegraded Unclassified\n267\n- 2 -\nDr. Soong said that he had not intended to speak to the\nPresident of the loan because his understanding with Secretary\nMorgenthau was that they were to await Mr. Fox. However, while he\nwas talking with the President, Secretary Hull telephoned to the\nPresident about something relating to space in the Japanese Embassy\nand according to Dr. Soong, the President asked Hull about the\nChinese loan. Soong gathered from the President's subsequent re-\nmarks that Hull said they were going to take the matter up with\nhim at the cabinet meeting and that it might be done through legis-\nlation. Dr. Soong remarked to the President that it might take too\nlong to have the loan arranged if it were to be done by a Congres-\nsional Act and thought it might be done more quickly through Lend-\nLease arrangements. The President said they would see.\nMr. White asked Mr. Soong whether he still thought that con-\nsideration of the loan could wait for Fox's return. Mr. Soong said,\n\"No, in view of the delay in Fox's arrival, and at the rate things\nare going in Malaya, Singapore might fall soon and it would be un-\nfortunate if it fell before monetary arrangements were completed.\"\nHe thought it would be a great help if both the monetary arrangements\nand the Planes they were asking for could be announced soon and\nsimultaneously.\nRegraded Unclassified\n268\nJanuary 31, 1942\n10:04 a.m.\nHM, Jr:\nHarry.\nMr. Harry\nHopkins:\nHow are you?\nHM,Jr:\nI missed you last night.\nH:\nWell, I am sorry, but, by God, along about 5\no'clock I kicked up a devil of a fever\nHM,Jr:\nSo I only heard\nH:\nBut this morning I feel fine again.\nHM,Jr:\nYou do?\nH:\nYeah. I took some medicine and went to sleep.\nMy fever is all gone.\nHM,Jr:\nGood for you.\nH:\nI think I got a little cold.\nHM,Jr:\nOh, that's too bad!\nin\nHen\nHM,Jr\nYes, sir.\nH:\nThere's organized in town here ...\nHM,Jr:\nYeah.\nH:\n...\nyou know, when Churchill was here, the joint\nstaffs ....\nHM,Jr:\nYeah.\nH:\nand they are going to have three or four\nvery important sub-committees.\nHM,Jr:\nYeah.\nH:\nAnd the work of those things is going to be\nextremely important during the war.\nRegraded Unclassified\n269\n- 2 -\nHM,Jr:\nYes.\nH:\nNow, they ought to have a place to work where\nthey've got real security\nHM,Jr:\nYeah.\nH:\n.....and where nobody can get in the building\nand nobody else is there.\nHM,Jr:\nYeah.\nH:\nNow, I, of course, as usual, have some bright\nideas. And the War Department Marshall called\nme up about it, and I thought of the Federal\nReserve Building.\nHM,Jr:\nYeah.\nH:\nAnd I called up Marriner.\nHM,Jr:\nYeah.\nH:\nAnd Marriner gave me, of course, a long song and\ndance about what he was doing for the Army and\nfor you, all of which I know nothing about.\nHM,Jr:\nYeah.\nH:\nAnd it may be perfectly true.\nHM,Jr:\nYeah.\nH:\nBut I wonder if you could give me any hint as\nto whether you think that should be followed up\nor not, or should we let it drop. He promptly\ncame back and offered us a couple of rooms and\ntwenty office rooms, but that won't do the trick.\nHM,Jr:\nWell, the President, at Cabinet yesterday, told\nthem that he had turned over to them the Public\nHealth Building.\nH:\nHe did?\nHM,Jr:\nYeah.\nH:\nWell, that's just as good, of course.\n270\n- 3 -\nHM,Jr:\nHe told Paul McNutt then and there that they\ncould move in at once.\nH:\nUh huh.\nHM,Jr:\nTo Public Health.\nH:\nYou mean this joint staff?\nHM,Jr:\nYeah.\nH:\nHe had the two buildings in mind.\nHM,Jr:\nWell, he said the Joint staff could have the\nPublic Health Building here, and that they\ncould move out temporarily to Bethesda.\nH:\nUh huh.\nHM,Jr:\nSo Paul McNutt said, \"How?\" He said, \"Well, see\nMcIntyre.\"\nH:\n(Laughs)\nHM,Jr:\nSo McNutt, who's smart, says, \"But Mr, President,\nyou've already spoken to McIntyre.\"\nH:\nYeah.\nHM,Jr:\nBut the President told him that he would have to\nvacate at once.\nH:\nGood.\nHM,Jr:\nSo I think that takes care of you.\nH:\nYeah. What do you think.....\nHM,Jr:\nWhat?\nH:\nWhat do you think about the Federal Reserve. Do\nyou think they'll last here? Throughout the war?\nHM,Jr:\nIs it going to last?\nW:\nWell, I mean do you think they can hold onto that\nbuilding with the.....\n271\n- 4 -\nHM,Jr:\nI don't know.\nH:\n.....with the pressures that will be around here.\nHM,Jr:\nI don't know. They - I'd like to turn that over\nin my mind.\nH:\nAll right.\nHM,Jr:\nBecause.....\nH:\nThere's no hurry about it at all, because what I\nwanted was a building for this.\nHM,Jr:\nWell, I.....\nH:\nAnd I thought about those two buildings.\nHM,Jr:\nWell, as of yesterday, you have those buildings.\nH:\nWonderful, because that Public Health Service is\na damn nice building.\nHM,Jr:\nYes, it 18.\nH:\nYeah.\nHM,Jr:\nAnd you can protect it.\nH:\nYeah. All right, old boy.\nHM,Jr:\nOkay. Now, take care of yourself.\nH:\nI'm going to.\nHM,Jr:\nThank you.\nH:\nGood-bye, Henry.\n272\nJanuary 31, 1942.\nFOR THE SECRETARY'S FILES\nConference in Secretary Morgenthau's Office\nJanuary 31, 1942\n10:30 A.V.\nHow\nPresent: Secretary Morgenthau\nSecretary Jones\nDr. Viner\nMr. White\n(10. Foley was later\ncalled in.)\nMr. Jones said that be would like to know about the Chinese \"TO-\nnosal now being considered. The Secretary asked him whet he would like\nto know about it and Jones reclied that all be knew of it was what he\nheard at the Cabinet meeting on January 30. Secretary Morgenthau then\nstated the State Department and Treasury Department had been working\nfor more than a month on the proposal and recounted very briefly the\nnevelopments during the past month up to the time of the Cabinet meet-\nthe The Secretary gave Jones el copy of the letter which he had sent\nto Secretary Hell on Thursday and which he said would give the gist of\nthe points to be discussed. Jones read the letter carefully and Asked\nwhether there was agreement that aid should be given. Secretary\nmrgenthau told him that he had talked with Stirson end Marshall and\ntomy felt it was important to give China financial aid, es did the\nPresident and Secretary Pull. The Secretary then showed Mr. Jones B.\ndraft of the suggested joint resolution and seid the Treasury thought\nthat might be adequate along with a brief letter from the President.\nhe also gave Secretary Jones a copy of the draft of FL message which\nthe State Department had prepared.\nThe Secretary commented that the draft wes probably too long.\nSecretary Jones agreed and Selt that the joint resolution accompanied\nby a brief letter would be adequate.\nSecretary Jones said be had but one suggestion to make in the draft\nof the resolution and that was to substitute \"Secretary of Treasury with\nLOVE shruoval of the President is hereby authorized\" for the phrase\n\"the President is authorized\". He said it would give more protection\nto the President and \"take the neat off him\". The change would make\nit necessary for the Chinese to come to the Secretary of the Treasury\nrather than to the President for terms, funds, etc. Secretary Morgenthau\nacquiesced. Secretary Morgenthau stated that it should be clear that\nthe request for financial assistance by China of this amount was justi-\nfied only on political and military grounds.\nRegraded Unclassified\n273\n- 2 -\nThe Secretary asked Jones what he thought the next step should\nbe and Jones said that they should get Hull to agree to the resolu-\ntion and then submit it to the President. Jones thought that there\nwouldn't be any trouble in Congress in securing passage of the Bill.\nSecretary Hull was telephoned and Mr. Jones explained to him\nover the phone that he (Jones) agreed with Secretary Morgenthau's con-\nclusion that the loan had best be asked of Congress and in the form\nindicated in the resolution. He also explained to Secretary Hull the\nchange he (Jones) would like to make in the wording, substituting\n\"Secretary of the Treasury with the approval of the President\" for\n\"the President\". Secretary Hull agreed with the change and with the\nresolution. In the conversation it was agreed that they would try\nto see the President as soon as possible to obtain his approval.\nIt was decided that in the meantime Mr. Jones would get a let-\nter from Secretary Hull to the President, setting forth his (Hull's)\nreasons why he feels financial aid should be given at this time; while\nSecretary Morgenthau was to draft letters from Secretary Knox and\nSecretary Stimson to the President setting forth their reasons why\nthey l'avored financial aid to China now, and also prepare a draft of\nE letter from the President to the Speaker of the House and of the\nSenate which would accompany the resolution.\nAn hour or so later the Secretary and Secretary Jones saw the\nPresident. The Secretary hed with him 8 preliminary draft of a letter\nwhich was to accompany the resolution. The President approved the\nresolution and changed a few words in the letter and approved the\nletter.\nDrafts of letters for Secretary Stimson and Secretary Knox were\nalso prepared and sent to each of them (Stimson was in New York end\nKriox was in North Carolina) to obtain their signatures. They signed\nthe letters and they were returned by Monday morning.\nRegraded Unclassified\n[²ᵃ\n274\nNell\n1/31'42\nThis is a photostat of\nJR given to Secretary yesterday\nwith handwritten notations and\nchanges by J.H.Jones.\nThis is your copy. Doas it\ntake care of what you had T in mind?\nFM\nMR. FOLEY\nRegraded Unclassified\n1/30/48\n275\n% - IT Lift Valied\nlater 10 to\nTm\nvaliantly\n-\nmossity\nto\nat\nthe\ndefense\n1:00 States: Therefore (€\nWI the letives the\nupon\nafted States in Longress ADde 0166, resident\nauthorized, or: behalf of the (Lee is loan\nLane credit or live other KIK to in an\ncot to exceed in the appropate 1500,000,000 at such\nJP times and upon such terms and conditions LS the\nfiledt shall does in the interest of the United States.\nn the Teasury with R upproval of the\nSee. 2. The authority herein granted shall be in\nStlon to any other authority provided by law.\nSec. 3. There is hereby appropriated out of any money\nthe Treasury not otherwise appropriated, such sus or sugs\nto exceed 1500,000,000 as may be necessary to carry out\nprovisions of this Joint Resolution.\n2:30 11W; BB: SS/ mp 1/30/42\nHDW\nRegraded Unclassified\nResponsible officials, both of this Government and of the\novernment of China, have brought to my attention the existence\nof urgent need for the immediate extension to China of economic\nand financial assistance, going beyond in amount and different\nin form from such aid 88 Congress has already authorized. I be-\nlieve that such additional assistance would serve to strengthen\nChina's position as regards both her internal economy and her\nwith grint molitary\nespacity in general to function\nin our common effort.\nI urge, therefore, the passage by Congress of appropriate\nlegislation to this effect and attach therewith suggested draft\nof a joint resolution which would accomplish this purpose.\nRegraded Unclassified\nJOINT RESOLUTION\n277\nTo authorize the President of the United\nStates to render financial aid to China,\nand for other purposes.\nWHEREAS China has for more than four years valiantly\nresisted the forces of Japanese aggression; and\nWHEREAS financial and economic aid to China will\nincrease her ability to oppose the forces of aggression; and\nWHEREAS the defense of China is vital to the defense\nof the United States: Therefore be it\nResolved by the Senate and House of Representatives\nof the United States in Congress assembled, That the\nSecretary of the Treasury with the approval of the President\nis hereby authorized, on behalf of the United States, to loan\nor extend credit or give other financial aid to China in an\namount not to exceed in the aggregate $500,000,000 at such\ntime or times and upon such terms and conditions as the\nSecretary of the Treasury with the approval of the President\nshall deem in the interest of the United States.\nSec. 2. The authority herein granted shall be in\nto any other authority provided by law.\nSec. 3. There is hereby appropriated out of any money\nin the Treasury not otherwise appropriated, such sum or sums\nnot to exceed $500,000,000 as may be necessary to carry out\nthe provisions of this Joint Resolution.\nRegraded Unclassified\n278\nLetters prepared but not submitted to the\nsident for signature.\nRegraded Unclassified\nJanuary 31, 1942\nMy dear Mr. Speaker:\nResponsible officials, both of this Government\nand of the Government of China, have brought to my\nattention the existence of urgent need for the immediate\nextension to China of economic and financial assistance,\ngoing beyond in amount and different in form from such\naid as Congress has already authorized. I believe that\nsuch additional assistance would substantially strengthen\nChina's position as regards both her internal economy and\nher capacity in general to function effectively as an\nally with us in our common effort.\nI urge most strongly, therefore, the immediate\nconsideration by Congress of appropriate legislation\nto this effect and attach hereto B. suggested draft of\n& joint resolution which would accomplish this purpose.\nYours sincerely,\nThe Honorable,\nThe Speaker of the House of Regresentatives.\nRegraded Unclassified\nResponsible officials, both of this Government and of the\nGovernment of China, have brought to my attention the existence\nof urgent need for the immediate extension to China of economic\nand financial assistance, going beyond in amount and different\nin form from such aid as Congress has already authorised. I be-\nlieve that such additional assistance would serve to strengthen\nChina's posi on an regards both her internal economy and her\nconscity in general to function effectively as an ally with us\nin our common effort.\nwith\ncoundainton\nI urge, therefore, the passage by Congress of appropriate\nlegialation to this effect and attach (herewith suggested draft\nof 8 joint resolution which would accomplish this purpose.\nRegraded Unclassified\n281\nJOINT RESOLUTION\nTo authorise the President of the United\nStates to render financial aid to China,\nand for other purposes.\nWHEREAS China has for more than four years valiantly\nresisted the forces of Japanese aggression; and\nWHEREAS financial and economic aid to China will\nincrease her ability to oppose the forces of aggression; and\nWHEREAS the defense of China is vital to the defense\nof the United States: Therefore be it\nResolved by the Senate and House of Representatives\nof the United States in Congress assembled, That the\nSecretary of the Treasury with the approval of the President\nis hereby authorized, on behalf of the United States, to loan\nor extend credit or give other financial aid to China in an\namount not to exceed in the aggregate $500,000,000 at such\ntime or times and upon such terms and conditions as the\nSecretary of the Treasury with the approval of the President\nshall deem in the interest of the United States.\nSec. 2. The authority herein granted shall be in\naddition to any other authority provided by law.\nSec. 3. There is hereby appropriated out of any money\nin the Treasury not otherwise appropriated, such sum or sums\nnot to exceed $500,000,000 as may be necessary to carry out\nthe provisions of this Joint Resolution.\n282\nCopies to Secy hull and Secretary Jones\n( *e delivered by messenger. Copies to\nSecretary Stimson and Secretary Knox were\nhanded to Dr. White who will see Asst. Secy\nPatterson this afternoon and will enclose\nSecretary Knox' copy in & letter which is\nbeing transmitted to Secy Knox today.\nRegraded Unclassified\n283\nJanuary 31, 1942\nFROM: T.E SECRETARY OF THE TREASURY\nTO:\nTHE SECRETARY OF NAVY\nFor his information.\nRegraded Unclassified\n284\nJanuary 31, 1942\nFROM: THE SECRETARY OF THE TREASURY\nTO:\nTHE SECRETARY OF WAR\nFor his information.\n285\nJanuary 31, 1942\nFROM: The Secretary of the Treasury\nTO:\nThe Secretary of State\nFor his information.\n286\nJanuary 31, 1942\nFROM: THE SECRETARY OF THE TREASURY\nTO:\nSECRETARY JONES\nFor his information.\n237\nJanuary 31, 1942\ndear \"r. Vice President:\nRes onsible officials both of this Govern-\nwent and of the Government of China, have brought\nto my attention the existence of urgent need for\nthe imediate extension to China of oconomic\nená financial assistance, coint beyond in amount\nand different in form from such aid as Congress\nhas already authorized. I believe that such ad-\nditional assistance would serve to strengthen\nChina's position U.S. regards both l.or Internal\neconomy and her capacity in general to function\nwith reat military effectiveness in our common\neffort.\nI urge, therefore, the passage by Con, ress of\nappropriate Islation to this effect and attach\nhereto Il suggested draft of 8 joint resolution which\nwould accomplish this purpose.\nSincerely yours,\nThe Monorable,\n\"the Vice President of the Enited itates.\nRegraded Unclassified\n288\nJanuary 31, 1942\nMy dear Mr. Speaker:\nResponsible officials both of this Govern-\nment end of the Government of China, have brought\nto my attention the existence of urgent need for\nthe immodiate extension to China of economic\nand financial assistance, going beyond in amount\nand different in form from such aid as Congress\nhas already authorized. I believe that such ad-\nditional assistance would serve to strengthen\nChina's position as regards both her internal\neconomy and her capacity in general to function\nwith great military effectiveness in our common\neffort.\nI urge, therefore, the passage by Congress of\nappropriate legislation to this effect and attach\nhereto a suggested draft of & joint resolution which\nwould accomplish this purpose.\nSincerely yours,\nThe Honorable,\nThe Speaker of the House of Representatives.\nRegraded Unclassified\n289\nJOINT RESOLUTION\nOK\nTo authorize the President of the United\nStates to render financial aid to China,\nand for other purposes.\nWHEREAS China has for more than four years valiantly\nresisted the forces of Japanese aggression; and\nWHEREAS financial and economic aid to China will\nincrease ner ability to oppose the forces of aggression; and\nWHEREAS the defense of China is vital to the defense\nof the United States: Therefore be it\nResolved by the Senate and House of Representatives\nof the United States in Congress assembled, That the\nSecretary of the Treasury with the approval of the President\nis hereby authorized, on behalf of the United States, to loan\nor extend credit or give other financial aid to China in an\namount not to exceed in the aggregate $500,000,000 at such\ntime or times and upon such terms and conditions as the\nSecretary of the Treasury with the approval of the President\nshall deem in the interest of the United States.\nSec. 2. The authority herein granted shall be in\nsittion to any other authority provided by law.\nJeo. 3. There is hereby appropriated out of any money\nin the .reasury not otherwise appropriated, such sum or sums\n1102 to exceed $500,000,000 as may be necessary to carry out\nthe provisions of this Joint Resolution.\nRegraded Unclassified\n290\nDEPARTMENT OF STATE\nWASHINGTON\nJanuary 31, 1942\nDear Mr. President:\n= refer to Generalissimo Chiang Kai-Shek's request\nfor an Immediate credit to China of $500,000,000 to\nassist him in China's prosecution of the war.\nChina is now in her fifth year of war against\naggression and has had to draw very heavily upon her\nown resources. Certain loans have been made to China\nthrough the Federal Loan Agency, mostly in connection\nwith the purchase of strategic materials. These loans\nhave been used to buy supplies in this country, but\nChina now needs cash to be used within, or from within,\nIts own borders, and I strongly recommend that you ask\nCongress to authorize loans, or credits, or both, to\nChina up to $500,000,000. The brillient resistance to\naggression which the Chinese have made and are making,\nand their contribution to the common cause, deserve the\nfullest support we can give.\nSincerely yours,\nThe President,\nThe White House.\nCorreshiel\nRegraded Unclassified\nTHE SECRETARY OF THE NAVY\nWASHINGTON\nJanuary 31, 1942\nYy dear Mr. President:\nI refer to the urgent request which this\nGovernment has received from Generalissimo Chiang\nKai-shek to help him, by financial assistance, to\nmeintain more effectively the morale of the\nChinese people. Recent military developments in\nthe Pacific and difficult economic and financial\nconditions in China have made necessary remedial\naction of A substantial character.\nThe military operations which the armies of\nChina under the Generalissimo are carrying on and\nare plenning to carry on are of extreme importance\nto us. It would be very unfortunate if we were to\noverlook any possibility of checking the impair-\nment of China's morale resulting from the growing\ninternal difficulties in China. I am convinced\nthat the financial assistance which the General-\nissimo has requested would make en effective con-\ntribution to the maintenance of China's morale and\nmilitary strength.\nI strongly recommend, therefore, that we should\ngrant the Generaliasimo's request without delay.\nFaithfully,\nJeankstnon\nThe President,\nThe White House,\nRegraded Unclassified\nJanuary 31, 1942\nzy dear Mr. President:\nI refer to the urgent request which this\nGovernment has received from Generalissimo Chiang\ntal-shek to help his, by financial assistance, so\nmaintain more effectively the morale of the\nChinese people. Recent military developments in\nthe Pacific and difficult coonomic and financial\nconditions in China have made necessary remedial\naction of a substantial character.\nThe military operations which the armies of\nChina under the Generalissimo are earrying on and\nare planning to carry on are of extrems importance\nto us, It would be very unfortunate if 10 pere to\noverlook any possibility of checking the Impair-\nment of Chine's morale resulting from the growing\ninternal difficultive in China. I an convinced\nthat the financial assistance which the General-\nissimo has requested would auxe an effective con-\ntricution to the asistenance of China's morale and\nmilitary strength.\nI strongly recommend, therefore, that 00 should\ngrant the Generalissimo's request without delay.\nFaithfully,\nn Frank Knox\nThe President,\nThe thise Bouse.\nHDR:JV16P 1/31/42\nRegraded Unclassified\nWAR DEPARTMENT\nWASHINGTON\nJanuary 31st, 1942.\nXs\nlear Mr. President:\nThe confidential information which has been\ncoming to me during the past few weeks indicates that\nthe difficult economic And financial situation within\nChina is impairing her military effort.\nOur information indicates further that sub-\nstantial financial aid must be given to China quickly\nif we are to have assurance that recent and prospective\nmilitary developments will not too seriously weaken the\nmorale of the Chinese people.\nAny substantial financial help that can be\ngiven to China at this time can not but help strengthen\nher striking power.\nI therefore urge for your consideration that\nthe financial assistance which I am informed the\nGeneralissimo is requesting be granted expeditiously.\nFaithfully,\n<\nThe President,\nThe White House.\nRegraded Unclassified\nJanuary 31st, 1942.\nMy NBAT Mr. President:\nThe confidential information which has been\ncoming to me during the past few weeks indicates Wint\nthe difflcult economic and financial situation within\nChine La impairing her military effort.\nOur information indicates further that sub-\nstantial financial aid must be given to China puickly\n1.\" we are to have ascurance that recent and prospective\nmilitary developments vili not too seriously weaken the\nmorale of the Chinese poople.\nAny substantial financial help that can be\ngiven to China at this time ONE not but help strengthen\nher striking power.\nI therefore urge for your consideration that\nthe financial assistance which 1 am informed the\nCenerali:simo is reduesting be granted exceditiously.\nFaithfully,\n(Sig) Hanry h Shurson\nThe President,\nThe White House.\no.K.\nR.P.P.\nRegraded Unclassified\n2015\nsuggested Draft.\nMy dear Mr. President:\nThe confidential information which has been\ncoming to ne during the past few weeks indicates\nthat the difficult economic and financial situation\nwithin China is impairing her military effort.\nOur information indicates further that sub-\nstantial financial aid must be given to China quickly\nif we are to have assurance that recent and prospec-\ntive military developments will not too seriously\nweaken the morale of the Chinese people.\nAny substantial financial help that can be\niven to China at this time can not but help\nstrengthen her striking power.\nI therefore urge for your consideration that\nthe finencial assistance which I an informed the\nConeralissimo is requesting be granted expeditiously.\nFaithfully,\ns/Henry L Stemson\nThe President,\nThe Muite House.\nMD#1JV:69\n1/31/42\nRegraded Unclassified\n1/51/42-\nJOINT RESOLUTION\n296\nTo authorize the President of the\nUnited States to render financial\naid to China, and for other purposes.\nWHEREAS China has for more than four years valiantly\nresisted the forces of Japanese aggression; and\nWHEREAS financial and economic aid to China will\nincrease her ability to oppose the forces of aggression; and\nWHEREAS the defense of China is vital to the defense\nof the United States: Therefore be it\nResolved by the Senate and House of Representatives\nof the United States in Congress assembled, That the\nSecretary of the Treasury with the approval of the President\nis hereby authorized, on behalf of the United States, to loan\nor extend credit or give other financial sid to China in an\namount not to exceed in the aggregate $500,000,000 at such\ntime or times and upon such terms and conditions as the\nSecretary of the Treasury with the approval of the President\nshell deem in the interest of the United States.\nSec. 2. The authority herein granted shall be in\naddition to any other authority provided by law.\nSec. 3. There is hereby appropriated out of any money\nin the Treasury not otherwise appropriated, such sum or sums\nnot to exceed $500,000,000 as may be necessary to carry out\nthe provisions of this Joint Resolution.\nRegraded Unclassified\n297\nTHE WHITE HOUSE\nWASHINGTON\nJanuary 31, 1942\nity dear Mr. Vice President:\nRes onsible officials both of this Govern-\nLent and of the Government of China, have brought\nto my attention the existence of urgent need for\nthe immediate extension to China of economic\nand financial assistance, going beyond in amount\nand different in form from such aid as Congress\nhas already authorized. I believe that such ad-\nditional assistance would serve to strengthen\nChina's position as regards both her internal\neconomy and her capacity in general to function\nwith great military effectiveness in our common\neffort.\nI urge, therefore, the passage by Congress of\nappropriate legislation to this effect and attach\nhereto & suggested draft of a joint resolution which\nwould accomplish this purpose.\nSincerely yours,\nJuseah\nThe Honorable,\nThe Vice President of the United States.\nRegraded Unclassified\n298\nTHE WHITE HOUSE\nWASHINGTON\nJanuary 31, 1942\nMy dear Mr. Speaker:\nResponsible officials both of this Govern-\nment and of the Government of China, have brought\nto my attention the existence of urgent need for\nthe immediate extension to China of economic\nand financial assistance, going beyond in amount\nand different in form from such aid as Congress\nhas already authorized. I believe that such ad-\nditional assistance would serve to strengthen\nChina's position as regards both her internal\neconomy and her capacity in general to function\nwith great military effectiveness in our common\neffort.\nI urge, therefore, the passage by Congress of\nappropriate legislation to this effect and attach\nhereto a suggested draft of a joint resolution which\nwould accomplish this purpose.\nSincerely yours,\nfinalding Minewel\nThe Honorable,\nThe Speaker of the House of Representatives.\n299\n1/31/43\nSecretary Jones' suggested revision\n(first line of third WHEREAS)\nRegraded Unclassified\nJOINT RESOLUTION\nTo authorise the President of the inited\nStates to render financial aid to China,\nand for other purposes.\nChina has for more than four years valiantly\nresisted the forces of Japanese aggression; and\n-1.2.20 financial and economic aid to Shina will\nincrease her ability to oppose the forces of aggression; and\nMEMITAS the defense of China is of vital importance:\nTherefore be it\nResolved by the Senate and House of Representatives\nof the United States in Congress assembled, That the\nSecretary of the Treasury with the approval of the President\nis hereby authorized, on bohalf of the nited States, to loan\nor extend credit or give other financial aid to China in an\namount not to exceed in the aggregate $500,000,000 at such\ntime or times and upon such terms and conditions as the\nSecretary of the Treasury with the approval of the President\nshell desn in the interest of the inited States.\nSec. 2. The authority herein granted shall be In\naddition to any other authority provided by law.\nSec. 3. There is hereby appropriated out of any money\nIn the Treasury not otherwise appropriated, such sum or -\nnot to exceed $500,000,000 as may be necessary to carry out\nthe provisions of this Joint Resolution.\nRegraded Unclassified\nphotoctat from attached\n1/31/47.\nJOINT RESOLUTION\n201\nTo authorize the President of the\nUnited States to render financial\naid to China, and for other purposes.\nWHEREAS China has for more than four years valiantly\nresisted the forces of Japanese aggression; and\nWHEREAS financial and economic aid to China will increase\nner ability to oppose the forces of aggression; and\nWHEREAS the defense of China is of the greatest possible\nimportance: Therefore be it\nResolved by the Senate and House of Representatives\nof the United States in Congress assembled, That the Secretary\nof the Treasury with the approval of the President is hereby\nauthorized, on behalf of the United States, to loan or extend\ncredit or give other financial aid to China in an amount not\nto exceed in the aggregate $500,000,000 at such time or\ntimes and upon such terms and conditions as the Secretary of\nthe Treasury with the approval of the President shall deem\nin the interest of the United States.\nSec. 2. The authority herein granted shall be in\naddition to any other authority provided by law.\nSec. 3. There is hereby appropriated out of any money\nin the Treasury not otherwise appropriated, such sum or sums\nnot to exceed $500,000,000 as may be necessary to carry out\nthe provisions of this Joint Resolution.\nRegraded Unclassified\nJOINT RESOLUTION\nTo authorize the President of the United\nStates to render financial aid to China,\nthe\nand for other purposes.\nWHEREAS China has for more than four years valiantly\nresisted the forces of Japanese aggression; and\nWHEREAS financial and economic aid to China will\nincrease her ability to oppose the forces of aggression; and\nWHEREAS the defense of China is vital to the defense\nof the United States: Therefore be it\nResolved by the Senate and House of Representatives\nof the United States in Congress assembled, That the\nSecretary of the Treasury with the approval of the President\nis hereby authorized, on behalf of the United States, to loan\nor extend credit or give other financial aid to China in an\nmount not to exceed in the aggregate $500,000,000 at such\ntime or times and upon such terms and conditions as the\nSecretary of the Treasury with the approval of the President\nhall deem in the interest of the United States.\nSec. 2. The authority herein granted shall be in\nddition to any other authority provided by law.\nSec. 3. There is hereby appropriated out of any money\nin the Treasury not otherwise appropriated, such sum or sums\nnot to exceed $500,000,000 as may be necessary to carry out\nthe provisions of this Joint Resolution.\nRegraded Unclassified\nTREASURY DEPARTMENT\n--\nINTER-OFFICE COMMUNICATION\nDATE\nTO\nSecretary Morgenthau\nJanuary 31, 1942\nFROM\nE. H. Foley, Jr.\nAttacned is a copy of the Joint Resolution as approved\n05 the President.\nSecretary Jones suggests the following:\n\"WHEREAS the defense of China is of the greatest\npossible importance\"\nin lieu of the third \"Whereas\" clause which reads:\n\"WREREAS the defense of China is vital to he defense\nof the United States.\" \"\nOur language in this respect follows the language of\nthe Lease Lend Bill. Secretary Jones' point is that the\nGeneralissimo can come back and ask for another loan if\nCongress in a special bill says that the defense of China\nis vital to the defense of the United States,\n9.1.7h S.,-\nRegraded Unclassified\nJOINT RESOLUTION\n201\nTo authorize the President of the United\nStates to render financial aid to China,\nand for other purposes.\nWHEREAS China has for more than four years valiantly\nresisted the forces of Japanese aggression; and\nWHEREAS financial and economic aid to China will\nincrease her ability to oppose the forces of aggression; and\nWHEREAS the defense of China is vital to the defense\nof the United States: Therefore be it\nResolved by the Senate and House of Representatives\nof the United States in Congress assembled, That the\nSecretary of the Treasury with the approval of the President\nis hereby authorized, on behalf of the United States, to loan\nor extend credit or give other financial aid to China in an\namount not to exceed in the aggregate $500,000,000 at such\ntime or times and upon such terms and conditions as the\nSecretary of the Treasury with the approval of the President\nshall deem in the interest of the United States.\nSec. 2. The authority herein granted shall be in\nidition to any other authority provided by law.\nSec. 3. There is hereby appropriated out of any money\n.n the Treasury not otherwise appropriated, such sum or sums\nnot to exceed $500,000,000 as may be necessary to carry out\nthe provisions of this Joint Resolution.\nRegraded Unclassified\n205\nJanuery 31, 1942\nI asked T. V. Soong to come and see me At quarter of\nseven Saturday night, and I read to him the joint resolution\nand told him how I had started leet Thursday to work on\nthis thing and told him what we'd done and how we were\ngoing up Monday on the Hill, and he should let the General-\n1ssimo know, but impress upon him not to give out any\npublicity until the publicity came out of Washington.\nAny lenks would be very harmful. Soong said this would\ntre very pleasing to the Generalissimo to learn that this\nMAP going to 6° through. He asked me how long it would\ntake, and I said I thought from one to two weeks. He BRIG\nP.O. hoped It would pass before the fall of Singapore. I\nasked nim If he thought it would fall, and he sald, \"Yes.\"\nHe sald that if for no other reason, the water question.\nHe said there wae a great shortage of water, and that they\ngot most of their water from Johore. Then he went on to\nsay that weren't thinge terrible in Bengasi, and he said\nthat until Americane got into this thing he didn't think\nthe thing would go well. The Americans have demonstrated\nthat they know how to fight.\nHe told me that when he WBE with the President Friday\nmorning, that the President called up Hull about some question\nof taking over the German and Japanese Embassies, and in-\ncidentally mentioned the cuestion of a loan. Then Hull told\nthe President that Hull and I were going to telk to the\nPresident at Cabinet, and that we were recommending to do\nit through Congressional action. He said the President\nseezed a little bit surprised and aleo showed by his remarks\nthat he had heard nothing about it. So I said that we ned\nonly worked it out that morning, and that when I brought it\nto the President today, it only took him B. few seconde to\nread the resolution and to approve 1t. And I told him we\nappreciated how much the Chinese had done during the lest\nfour years, and they of all people should receive help at\nthis time.\nRegraded Unclassified\nMAY\nJAN 31 1942\nMy dear Mr. President:\nAttached for your information is &\ncopy of a press release relative to the suspension\nby the Treasury Department of personnel in Schering\nCorporation who have been closely associated with\nthe Schering Company in Jermany.\nTreasury representatives have been\nsupervising American Schering since the United\nStates entered the war, and the action referred\nto in the press release resulted from our investiga-\ntion.\nFaithfully yours,\n(Signed) E. Morgesthan, 200\nSecretary of the Treasury.\nThe President,\nThe White House.\nEnclosure\nServes twice it 20pm\nnmc, Copies\nRegraded Unclassified\n307\nJAN 31 1942\nMy dear Mr. Secretary:\nAttached for your information is a copy of\na press release relative to the suspension by\nthe Treasury Department of personnel in Schering\nCorporation who have been closely associated\nwith the Schering Company in Germany.\nTreasury representatives have been\nsupervising American Schering since the United\nStates entered the war, and the action referred\nto in the press release resulted from our in-\nvestigation.\nVery truly yours,\n(Signed) 1. Korgenthaw, in\nSecretary of the Treasury.\nThe Honorable\nThe Secretary of the Navy.\nEnclosure.\nn.m.c\nby Messenger\nSteen 2:00\nDJS:BB:1hh/mp 1-30-42\ncopies to Thompson\nRegraded Unclassified\n308\nJAN 31 1942\nMy dear Mr. Secretary:\nAttached for your information is & copy of\na press release relative to the suspension by\nthe Treasury Department of personnel in Schering\nCorporation who have been closely associated\nwith the Schering Company in Germany.\nTreasury representatives have been supervising\nAmerican Schering since the United States entered\nthe war, and the action referred to in the press\nrelease resulted from our investigation.\nVery truly yours,\n(Signed) 1. Morgenthaw. INC\nSecretary of the Treasury\nThe Honorable\nThe Secretary of War\nEnclosure\nBy Messenger Steen 2:00\nDJS:BB:1hh/s 1-31-42\ncopies to Thompson\nn.m.c.\nRegraded Unclassified\nnos\nJAN 31 1942\nMy dear Dr. Sush:\nAttached for your information is a copy\nof a press release relative to the suspension\nby the Treasury Department of personnel in\nSchering Corporation who have been closely\nassociated with the Schering Company in Germany.\nTreasury representatives have been supervising\nAmerican Schering since the United States entered\nthe war, and the action referred to in the press\nrelease resulted from our investigation.\nVery truly yours,\n(Signed) a. Morgesthaw. it.\nSecretary of the Treasury.\nDr. Vannevar Bush,\nOffice of Scientific Research\nand Development,\nWashington, D. C.\nn.m.c.\nEnclosure\nBy Messenger School\nthe\nDJS:BB:lhh 1-30-42\nRegraded Unclassified\n210\nJAN 31 1942\nwy dear Mr. MoNutt:\nAttached for your information is a\ncopy of 8. press release relative to the suspension\nby the Treasury Department of personnel in Schering\nCorporation who have been closely associated with\nthe Schering Company in Germany.\nTreasury representatives have been\nsupervising American Schering since the United\nStates entered the war, and the action referred\nto in the press release resulted from our investige-\ntion.\nVery truly yours,\n(Signed) E. Morganthas, Jr.\nSecretary of the Treasury.\nlion. Paul V. Mallutt,\nAdministrator,\nFederal Security Agency,\nWashington, D. C.\nEnclosure\nBy Hand Safey Ni40\nn.m.c.\nDJS:BB:lhh 1-30-42\nRegraded Unclassified\n311\nJAN 31 1942\nMy dear Dr. Jewett:\nAttached for your information is a copy of\na press release relative to the suspension by\nthe Treasury Department of personnel in Schering\nCorporation who have been closely associated with\nthe Schering Company in Germany.\nTreasury representatives have been supervising\nAmerican Schering since the United States entered\nthe war, and the action referred to in the press\nrelease resulted from our investigation.\nVery truly yours,\n(Signed) I. Morgenthau, Jr.\nSecretary of the Treasury.\nDr. P. 8. Jewett,\nPresident,\nNational Academy of Sciences,\nWashington, D. C.\nEnclosure\nCapies to Hompson\nBy Messenger 11:40 Schey\nn.m.c.\nDJS:BB:lhh 1-30-42\nRegraded Unclassified\n212\nTREASURY DEPARTMENT\nWashington\nFOR IMMEDIATE RELEASE,\nPress Service\nThursday, January 29, 1942.\nNo. 30-3\nThe Treasury Department today suspended Dr. Julius Weltzien,\n360, 000-a-year president of Schering Corporation, Bloomfield, N. J.,\nmanufacturers of anti-shock vaccines, hormones, sulfa compounds\nand other pharmaceutical products essential to the war effort.\nSeven others were also suspended from further activity as\nmembers of Schering's staff. Three of the seven were:\nErnst Hammer, promotion manager, salary $22,000, formerly In\nthe South American department of Schering A. G., Berlin, and at\none time its representative in South America.\nHans Erdmann, director of engineering and maintenance\ndepartments, salary $10,000, formerly a designer of chemical\nequipment for Schering A. G., Berlin.\nMartin Bernhardt, head of the Schering legal department and\ncomptroller of the corporation, salary $9,400, B former vice-\nchairman of Schering A. G., Berlin.\nThe suspension bars the eight individuals from the Schering\npremises, blocks their personal accounts, and All employees are\nforbidden to communicate with them without Treasury consent.\nThe Treasury Department believes that today's action smashes\ncompletely a long-range German scheme to control an important\nsegment of the pharmaceutical market in the western hemisphere,\nand enables the United States to take full advantage of the vital\nresearch now under way in the Schering laboratories at Bloomfield.\nDr. Weltzien as late as 1938 held one of the most important\npositions in German industry as president of Schering A. G., Berlin,\nthe second largest pharmaceutical corporation in Germany and the\ncontrol board of Schering subsidiaries concentrated in South\nAmerica and other parts of the world.\nAs early as 1933, Schering A. G, Berlin, undertook a long-\nrange scheme to maintain its world-wide economic position. The\nTreasury charged that, as a part of this schene, Hermann Goering\nin 1937 ordered the sale of Schering's subsidiaries in the western\nhemisphere to Swies interests.\nDr. Weltzien, who personally directed the expansion of the\nGerman Schering interests in South America and other parts of the\nworld, transferred his offices from Berlin to this country in 1938\nwhen he assumed the presidency of the Bloomfield plant.\nRegraded Unclassified\nTREASURY DEPARTMENT\nWashington\nPOR IMMEDIATE RELEASE,\nPress Service\nThursday, January 29, 1942.\nNo. 30-3\nThe Treasury Department today suspended Dr. Julius Weltzien,\n50,000-a-year president of Schering Corporation, Bloomfield, N, J.,\nmanufacturers of anti-shock vaccines, hormones, sulfa compounde\nand other pharmaceutical products essential to the war effort.\nSeven others were also suspended from further activity as\nmembers of Schering's staff. Three of the seven were:\nErnst Hammer, promotion manager, salary $22,000. formerly In\nthe South American department of Schering A. G., Berlin, and at\none time its representative in South America.\nHans Erdmann, director of engineering and maintenance\ndepartments, salary $10,000, formerly a designer of chemical\nequipment for Schering A. G., Berlin.\nMartin Bernhardt, head of the Schering legal department and\ncomptroller of the corporation, salary $9.400, B former vice-\nchairman of Schering A. G., Berlin.\nThe suspension bare the eight individuals from the Schering\npremises, blocks their personal accounts, and all employees are\nforbidden to communicate with them without Treasury consent.\nThe Treasury Department believes that today's action omashes\ncompletely a long-range German scheme to control an important\nsegment of the pharmaceutical market in the western hemisphere,\nand enables the United States to take full advantage of the vital\nresearch now under way in the Schering laboratories at Bloomfield.\nDr. Weltzien as late as 1938 held one of the most important\npositions in German industry as president of Schering A. G., Berlin,\nthe second largest pharmaceutical corporation in Germany and the\ncontrol board of Schering's subsidiaries concentrated in South\nAmerica and other parts of the world.\nAG early as 1933, Schering A. G. Berlin, undertook a long-\nrange scheme to maintain its world-wide economic position. The\nTreasury charged that, 88 a part of this scheme, Hermann Goering\nin 1937 ordered the sale of Schering's subsidiaries in the western\nhemisphere to Swies interests.\nDr. Weltzien, who personally directed the expansion of the\nGerman Schering interests in South America and other parts of the\nworld, transferred his offices from Berlin to this country in 1938\nwhen he assumed the presidency of the Bloomfield plant.\nRegraded Unclassified\n313\n-2-\nPrior to Dr. Weltzien's entry into the United States, other\nkey personnel from the Schering staff in Berlin had been sent into\nthis country and assigned to important tasks in the Bloomfield\nSchering Corporation. Hammer, Bernhardt and Erdmann were brought\nhere as a part of this plan, Treasury officials said,\nAt the outbreak of the European war the network of western\nhemisphere Schering corporations, then headed by the Schering\nCorporation at Bloomfield, drew closer together in the effort to\nhold markets for Schering A. G., of Berlin, until the end of the\nwar, In addition the entire network was used as a tool to raise\nforeign exchange for the Nazi regime.\nThe Nazi scheme showed promise of succeeding until the\nTreasury Department blocked all German nationals under the\nPresident's freezing order in June of 1941.\nThe Treasury blocked Schering funds on June 14, 1941, and\ninstalled supervisory representatives in the plant shortly after\nthe attack on Pearl Harbor. Production of Schering's vital\npharmaceutical products has continued since June under Treasury\ncontrol.\nHeretofore the United States government has been unwilling\nto exchange pharmaceutical scorets with Schering Corporation in\norder to further development of vital drugs because it felt that\nimportant scientific discoveries might be made known to German\nagents and benefit the Axis. With the German elements removed,\ncooperative experiments will be made possible and the full benefit\nof Schering's important pharmaceutical research will be made\navailable to the United Nations.\n-000-\nRegraded Unclassified\nTHE SECRETARY OF THE NAVY\nWASHINGTON\nFebruary 3, 1942\nMy dear Henry:\nThank you for that letter of January 31 in-\ncluding the statement concerning the offices of the\nSchering Corporation. I was glad to have this\ninformation.\nYours sincerely,\nFrankstnon\nHonorable Henry Morgenthau, Jr.\nSecretary of the Treasury\nWashington, D. C.\nRegraded Unclassified\nTREASURY DEPARTMENT\n315\nINTER OFFICE COMMUNICATION\nDATE JAN 1942\nTO\nSecretary Morgenthau\nFROM E. H. Foley, Jr.\nRe: Werner von Clemm\nPioneer Import Corp.\nA Federal grand jury in New York on Thursday\nindicted Werner von Clenm and certain of his associates\nfor conspiracy to violate the freezing regulations and\ncustoms laws. The basis for the indictment is that Werner\nvon Clenm, operating through the Pioneer Import Corporation,\nconspired with other persons, including his brother in\nEurope, and certain German officials who were acting in\ncooperation with the German army, to bring diamonds confis-\ncated by the Nazis in Belgium or Holland into the United\nStates for sale.\nThe conspiracy contemplated that the diamonds\nwould be marked as originating in Germany and thus brought\ninto the country without obtaining 8 license from Foreign\nFunds Control, because at the date of the transactions\nGerman assets were not yet frozen, although both Beigian\nand Dutch were- Werner von Clenm is B. cousin of von Ribbentrop's\nwife.\nRegraded Unclassified\n316\n- 2 -\nForeign Funds Control and investigators of\nthe Customs Bureau have been working with the United\nStates Attorney's office on this case for over a year.\nIt is contemplated that the trial will begin within\napproximately a month.\n9.1.7h. 9.10\n17\n515.32\nMy dear Mr. Secretary:\nI have received your letter of January 27,\n1342 (En 811.34544/1610), in which you state\nthat the Secretary of the Navy has requested\nthat the question of the admission into the\nUnited States under bond of articles for use in\nor abourd British ships being refitted in the\nUnited States be taxen un with the Treasury\nDepartment.\nIn connection with this matter, your atten-\ntion 18 invited to the communication addressed\nto the Treasury Department by the Department of\nState under date of Avril 7. 1941 (PR), request-\n156. in view of A note from the British Asbasssior,\nthat the collectors of customs at All seaports\nbe authorized to admit free of duty. no in act\nof international courtesy. all articles consigned\nto the Dritish Advisory Repair Mismion, in care\nof the Com andant of any United States Navy Yord.\nIn response to this request, the Treasury\nDepartment, in a letter of April 21, 1341\n(515.32). to all headcuarter customs seaports,\ndirected that free entry be accorded to all\narticles, the property of the British Govern-\ncent, when consigned to the British Advisory\nRepair Mission, in care of the Commandant of\nany United States Navy Yard in this country,\nand intended for the repair or refitting of\nBritish chips of WHI in the United States. A\ncopy of this authorization VIII forwarded to the\nDepartment of State with the Treasury Department's\nletter of Anril 21, 1941 (515.32). In a letter\nRegraded Unclassified\n318\n515.32\n- 2 -\nof November 6, 1941 (515.32), the same collectors\nof customs were directed in & blanket authorization\nto accord articles of the character referred to\nfree entry, as an act of international courtesy,\nwhen imported by air, as well as when imported in\nvessels of war or in merchant ships. This blanket\nauthorization vas in response to the request con-\ntained in a letter received from the Department\nof State dated October 27, 1941 (PR), and a copy\nof the authorization vas transmitted to the Depart-\nment of State with the Treasury Department's letter\nof November 6, 1941 (515,32).\nIt is nov and has been the practice, since\nMay 33, 1941, to accord free entry, as an act of\ninternational courtesy, under the conditions laid\ndown in this Department's letter to your office of\nMay 22, 1941 (515.32). to articles intended for the\nrepair and maintenance of vessels of the British\nMercantile Marine, upon the receipt, in each in-\nstance, of & request for free entry on that basis\nfrom the British Ministry of War Transport (formerly\nthe British Ministry of Shipping).\nAs it is now the established practice, under\nthe procedure outlined above, to accord free entry\nunconditionally, as an act of international courtesy,\nto the articles referred to by the Secretary of the\nNavy, this Department would appreciate advice as to\nanything further it might do to accomplish the pro-\nposal of the Secretary of the Havy.\nCopies of the Department's authorizations\nreferred to above are again transmitted for your\nready reference and possible transmission to the\nSecretary of the Navy.\nVery truly yours,\n(Signed) 1. Morgesthas. 19,\nSecretary of the Treasury.\nThe Honorable\nThe Secretary of State. Photo file n.m.c\nIts to\nEnclosures.\nRegraded Unclassified\n#\nSTATE\n5/5.32\n%.K\nDEPARTMENT OF STATE\nWASHINGTON\nreply\nrefer to\nJanuary 27. 1942\n544/1610\nMy dear Mr. Secretary:\nThe Secretary of the Navy has asked me to take up\nwith you the question of having dutiable articles, con-\nsigned for use in or aboard British ships being refitted\nin United States yards, admitted into the United States\nin bond. I am glad to endorse the Secretary of the Navy's\nproposal and should be grateful if you can give effect to\nit.\nSincerely yours,\nThe Honorable\nENSE\nHenry Morgenthau, Jr.,\nBUY\nSecretary of the Treasury.\nRegraded Unclassified\n515.32\nCOPY\nNovember 6, 1941\nCONFIDENTIAL\nThe Collector of Customs,\nPortland, Me., and to all other headquarter seaports and Honolulu, T. H.\nSir:\nReference is made to the Department's letter of April 21, 1941\n(615.32), authorizing the admission free of duty and import tax as\nan act of international courtesy of all imported articles consigned\nto the British Advisory Repair Mission, in care of the Commandant\nof any United States Navy Yard in this country.\nThe Department is now in receipt of a request from the Depart-\nment of State that blanket authority be issued to collectors of\ncustoms for the admission free of duty of articles of this character\nwhen imported by air AS well as on board vessels of way and merchant\nships. In compliance with the request received from the Department\nof State, the Department's letter of April 21, 1941 (515.32), is\nhereby extended to cover articles imported by air consigned to the\nBritish Advisory Repair Mission, in care of the Commandant of any\nUnited States Mavy Yard in this country.\nThis letter shall be blanket authority, and specific author-\nisations in each instance shall not be required.\nVery truly yours,\n(Signed) Herbert E. Gaston\nHERBERT E. GASTON,\nAceistant Secretary of the Treasury.\nRegraded Unclassified\nCOPY\n515.32\nMAY 22 1941\nMy dear Mr. Secretary:\nReference is made to your letter of May 17, 1941 (PR 841.\n85/480), enclosing a copy of a note dated May 10, 1941 from the\nBritish Ambassador concerning the question of free entry into\nthe United States of certain repair parts, supplies and so forth,\nwhich may be required for the repair and maintenance of vessels\nof the British mercantile marine.\nThe British Ambassador requests that consideration be given\nto the free entry of this material under the following conditions:\n(1) The materials must be the property of the British\nGovernment or of a department thereof.\n(2) The materials must be destined for the maintenance\nand/or repair of vessels of the British mercantile\nmarine or of vessels coming under the control of the\nBritish Government.\n(3) A request for free entry should in the case of each\nship be addressed to, and filed in advance of arrival\nwith, the Commissioner of Customs at Washington, D. C.\nby the Ministry of Shipping.\n(4) This request should in each case give assurances on\nthe points raised in (1) and (2) above and should\ninclude the name of the consignee, the port at which\nentry will be made, the name of the conveying vessel,\na. broad general description of the materials together\nwith the marks and numbers on the cases, and the number\nof packages of which each shipment is composed.\nThe Department can see no objection to the admission free\nof duty of repair and maintenance material under the conditions/out-\nlined by the British Ambassador provided that there is no waiver of\nany license or permit required by law in connection with such im-\nportations. Further, in view of the statement made in the second\nparagraph of your letter, no objection is perceived to the adoption\nRegraded Unclassified\n515.32\n- 2 -\npractice of according free entry to such material on\nsceipt of requests for free entry which are addressed\ntly to the Commissioner of Customs by the British Ministry\nand\npping.\nby direction of the Secretary:\nVery truly yours,\n(Signed) Herbert E. Gaston\nHERBERT B. GASTON,\nAssistant Secretary of the Treasury.\nHonorable,\nThe Secretary of State.\nRegraded Unclassified\n515.32\nCOPY\nApril 21, 1941\nCONFIDENTIAL\nThe Collector of Customs,\nPortland, Me., and to all other headquarter seaports and Honolulu.\nSir:\nYou are hereby authorized to admit free of duty and import\ntax, as an not of international courtesy, all imported articles\nconsigned to the British Advisory Repair Mission, in care of the\nCommandent of any United States Navy Yard in this country.\nSuoh articles will in each case be the property of the British\nGovernment and will be used in connection with the repair or re-\nfitting of British ships of war in the United States. Some ship-\nments will arrive on board vessels of war and come in merchant\nships,\nThe shipments will be composed of \"articles, the immediate\ndelivery of which is necessary\" within the meaning of section\n448(b) of the Tariff Act of 1930, and may be released prior to en-\ntry in accordance with the procedure outlined in article 354 of\nthe Customs Regulations of 1937. In view of the nature of the\ntransactions the requirements of article 354 with respect to the\ngiving of bonds are hereby waived and it is requested that you ex-\npedite in all possible ways the release of the shipments.\nIn 08.865 where it is desired to invoke the provisions of ar-\nticle 770 of the Customs Regulations of 1937, 6.8 amended, the re-\nquirements of that article with respect to the giving of bonds or\nstipulations are hereby waived and all possible facilities should\nbe extended.\nThis letter shall be blanket authority for the treatment of\nall importations of the character herein described, and specific\nauthorizations in each instance shall not be required.\nVery truly yours,\n(Signed) Herbert E. Gaston\nHERBERT E. GASTON,\nC8-mc 4-16-41\nAssistant Secretary of the Treasury.\nWRJ-esb 4-17-41\nRegraded Unclassified\n324\nYou are right, Secretary Knox; the Navy has once\nmore set en example and offered 8 chollen e to the rest\nof the country. On behalf of the Treasury Department\nI RM happy and proud to receive this ma nificent invest-\nnent in America.\nIt is doubly melcone to me because it comes from the\nshore establishments of one of our fighting services. It\nshows that the men ano women who work in the navy yerds\nand other shore stations are soing a double job for their\ncountry. They are working day end night to supply our\nrighting men with fighting пеароль. At the same time\nthey are saving systematically, week after neek, to supply\nour fighting men with fighting dollars.\nIt will be grand news to those who serve st sea to\nhear that the men and women on shore are giving them this\nIn\n31,\nRegraded Unclassified\n- 2 -\n325\nkind of active and continuous support. After all, the\nmen of the Navy must have new ships, planes, guns and\nshells in a steady stream if they are to do their part\nin winning the war. The workers in the shore establishments\nand millions of others in war industries throughout the\ncountry are making it possible, by their savings, to\nprovide those weapons that will smash our enemies.\nI wish that I could thank every one of the thousands\nwho have contributed to the check that you have just handed\nto me. Since that is impossible, I am going to thank them\nthrough you, Secretary Knox.\nThe people who work in the\nNavy to shore establishments have shown by their wonderful\nresponse that they are all out for victory just 8 S much as\nthe men who serve on the ships of war.\nLet the Nazis and\nthe Japanese look at that response, and look at it well.\n- 3 -\n326\nIt is just another example of the spirit that is going\nto win the war for freedom.\nD-A\nJanuary 31, 1942\nMy dear Mr. Luhrsen:\nImmediately after the railroad wage settlement\nyour Association, through you and through the presidents\nof many of your member brotherhoods and unions, Informed\nme that Railroad Labor has giving the word \"Full Steam\nAhead!\" to its members for participation in the Defense\nSavings Program. This prompt and wholehearted support\nfrom yourself and these other leaders was very good news\nfor the United States Government in facing the heavy\nburdens of financing the war.\nIn these circumstances 1 an somewhat troubled to\nlearn from members of the Defense Savings Staff that\nreports so far received on Payroll Savings Plans set up\nat our request by the transportation companies show that\nin general only a minor percentage of railroad employes\nare taking part. These reports show that, in the case\nof 72 railroads with a total of 907, 657 employes, only\n34,962 of that number have filed Payroll Allotment\nAuthorizations. I am attaching to this letter 8. list of\nthose railroads, showing the number of their employes,\nthe number of Payroll Authorizations filed and the per-\ncentage of participation.\nSince the date on which your organization gave me\nthese assurances, the war effort of the United States\nhas been intensified and all our national needs have\nincreased tremendously. It is vitally important that\nyour members recognize this situation clearly; and having\nbefore them the facts here presented, set themselves\nwithout delay to make good on their undertaking of all-out\nRegraded Unclassified\n328\n- 2 -\ncooperation with the Government in this essential part\nof its war program.\nWe are counting on you to pass this word on to your\nassociates.\nSincerely yours,\n(Signed) Henry Morgesthau, Jr.\nMr. Julius G. Luhrsen,\nExecutive Secretary-Treasurer,\nRailway Labor Executives' Association,\n10 Independence Avenue,\nWashington, D. C.\nAttachment.\nCC- Jhompson\nn.m.c.\nJLH\nFK/hkb\nRegraded Unclassified\nSTATEMENT OF RAILROAD EMPLOYEES PARTICIPATION\nNumber of\nRailroads\nEmployees\nParticipants\nPer Cent\n1. L. & F.\n35\n5\n72.7\n500 Line\n7677\n5524\n72.0\nC. of Da.\n5132\n2625\n51.1\nGe. & Pla,\n583\n293\n50.3\nSt. L. & 8. F. of Two\n474\n222\n46.8\nN. 5. Okle.\n160\n74\n46.3\nC. & W. I.\n1129\n364\n32.2\nVonon\n2250\n700\n31.1\nBelt Ry. Chiengo\n1570\n483\n30.8\nLehigh & Hudmon River\n321\n87\n27.1\nChicago Ilnion Station\n1000\n250\n25.0\nBurlington Rock Island\n225\n56\n24.9\nT. & P.\n6546\n1557\n23.8\nPullman Co.\n23000\n5000\n21.7\nI. & 0. N.\n3489\n749\n21.5\nL. & N.\n29000\n6150\n21.2\nAnn Arbor\n2143\n262\n21.1\nUnion Ry. Vemphis\n800\n158\n19.8\nC. & 3.\n1550\n296\n19.1\nC. G. W.\n4000\n758\n19.0\nC. 3. & Q.\n28000\n4731\n16.9\nA. & W. P.\n3000\n503\n16.8\nK. o. & G.\n735\n121\n16.5\nDee Moines Union\n235\n37\n15.7\nD. & H.\n3400\n1311\n15.6\nT. & N. 0.\n15500\n2400\n15.5\nClinchfield\n1249\n186\n14.9\nM. & St. L.\n2500\n360\n14.4\nWab.\n72700\n1814\n14.3\nErie\n24170\n3291\n13.6\nVirginian\n3300\n449\n13.6\nW. K. & T.\n8738\n1083\n12.4\nPrisco\n15000\n1853\n12.4\nD. & R. G.\n8000\n935\n11.7\nLehigh & N. &\n928\n100\n10.8\nChicago Tunnel\n383\nE\n10,7\n54380\n5729\n10.5\nB. 4 0. Ry.\nSouthern Pacific\n53700\n5500\n10.2\nC. M. & St. P.\n30000\n3000\n10.0\nW. M.\n4400\n432\n9.8\nD. L. A W.\n15300\n1482\n9.7\nNew Beven\n26451\n2538\n9.6\nToledo Terminal\n300\n27\n9.0\nBorfolk & Port Selt\n340\n30\n8.8\nC. & N, W.\n28500\n2500\n8.8\nC. St. P. M. & D.\n5000\n432\n8.6\n1492\n126\n8.4\nIll. Term.\n1200\n100\n8.3\n8. & A.\nC. R. I. 4 P.\n22372\n1779\nB.O\nRegraded Unclassified\n330\nSTATEMENT OF RAILROAD EMPLOYEES PARTICIPATION\nNumber of\nRailroads\nEmployees\nParticipants\nPer Cent\nK. c. 3.\n5047\n406\n8.0\nCambria & Ind.\n145\n114\n7.9\nP. R. R.\n147813\n11174\n7.6\nG. N.\n15000\n11.00\n7.3\nC. N. J.\n12150\n821\n6.8\nL. v.\n11159\n756\n6.8\nC & 0, N. K. P., P. M.\n52000\n3541\n6.8\nG. T. W.\n8014\n531\n6.6\nB. & M.\n15200\n935\n6.2\nReading\n19000\n1158\n6.1\nK. C. Term.\n1625\n98\n6.0\nC. & E. I.\n4500\n270\n6.0\nN. C. & St. L.\n5699\n332\n5.8\nT. R. R. A.\n3636\n207\n5.7\nC. V.\n1500\n82\n5.5\nSou Ry.\n42229\n2125\n5.0\nN. & N.\n21000\n1000\n4.8\nI. C.\n36500\n1700\n4.7\n8. A. L.\n15500\n721\n4.6\nN. T. C.\n121000\n4000\n3.3\nA. C. L.\n17000\n495\n2.9\nF. E. C.\n2500\n59\n2.4\nJax Term.\n700\n15\n2,1\nRegraded Unclassified\n331\nTREASURY DEPARTMENT\nWASHINGTON\nJanuary 31, 1042.\n200 MI SEVENTARY:\nI attach the regort you R for\nabout the 99. unles 210 have been\nthe Havy \":\" flag.\nCHAVES\nRegraded Unclassified\n332\nExistence of Payroll Savings Plans in\nIndustrial Plants Receiving the Navy \"2\" Flag\nSuster of companies listed BB receiving\nthe Havy \"E\" Flag\n82\nof the listed companies recorted\n30 have established a payroll savings\n-186 by the State Administrator\n(see stteched list)\n45\nter of commenies renorted to have 88+\nisblished a payroll savings -len from\nwhich rorress recorts have been De-\ncelved by the Tressury\n10\nof the 5 companies reportin to the Tressury, 3 194 -lans onerating\n10 December and the rercents e of certicipation emong their employees\nW S A.B follows:\nConsolidated Machine Tool Corporation,\nRoomester, N. Y\n684 es loyees\n038\nwestinenouse Electric Elevetor Co.\nJersey City, N. J\n1,281 employees\n665\nD. I. DuPort de Nemours & Commany,\n52,000 employees\n136\nWilmington, Del\nToe other 6 companies reported their plans were not in oberation\nDecember but would stert on the following dates:\nCarrier Corroration,\nSyrecuse, N, Y.\nJen. 1\nPollak Manufecturing 00.,\nArlington, N. J\nJan. 1\nMaKey Co.,\nPittsturgh, Po\nJac.10\n5. A. Roeblin ¹E Sons Co.,\nTrenton, N. J\nJan. 25\nBridgemort Brass Co.,\nBridgemort, Zenn...\nPet. =\nControl Instrudent Co.,\nNew York, S. Y.\n$51.15\nRegraded Unclassified\n333\nExistence of Payroll Savings Plans in Industrial Plants\nReceiving the Navy \"E\" Flag\n: Administrators'\n:January 24 report\nName of company\nCity and State\n:\non existence\n:\nof payroll\n:\nsavings plan\nontinental Gin Co.\nBirmingham, Ala.\nYes\norris Stamping & Mfg. Co.\nLos Angeles, Cal.\nYes\nMageport Brase Co.\nBridgeport, Conn.\nYes\nhase Brass & Copper Co., Ino.\nWaterbury, Conn.\nYes\nI. DuPont de Nemours & Oo., Ino.\nWilmington, Del.\nYes\niehle Printing Press & Mfg. Co.\nChicago, Ill.\nYes\nQBB Printing Press Co.\nChicago, Ill.\nYes\nngersoll Milling Machine Co.\nRockfort, Ill.\nNo\nmerican Steel Foundries\nGranite City, I11.\nNo\nTODD Forge Co.\nChicago, Ill.\nNo\nantam Bearings Corp.\nSouth Bend, Ind.\nYes\ncerican Steel Foundries\nIndiana Harbor, Ind.\nNo\nR. Mallory & Co., Inc.\nIndianapolis, Ind.\nNo\nhe Magnavox Co.\nFort Wayne, Ind.\nNo\nouth Bend Lathe Works\nSouth Bend, Ind.\nYes\nocsier Lamp & Stamp Corp.\nEvansville, Ind.\nYes\nElkton, Md.\nNo\nriumph Explosives, Inc.\nheen Manufacturing Co.\nBaltimore, Md.\nYes\nWest Hanover, Mass.\nNo\national Fireworks, Inc.\nolaroid Corp.\nCambridge, Mass.\nYes\neneral Motors Corp., Fisher Body Div.\nDetroit, Mich.\nYes\nickers, Inc.\nDetroit, Mich.\nYes\nen, Motore Corp., Pontiac Motors Div.\nPontiac, Kich.\nYes\nederal Screw Works\nDetroit, Mich.\nYes\nPort Huron, Mich.\nNo\nueller Brass Co.\nMinneapolis, Minn.\nYes\northern Pump Co.\nMinneapolis, Minn.\nYes\nlour City Ornamental Iron Co.\ncasanto Chemical Co.\nSt. Louis, Mo.\nYes\neatrice Steel Tank Mfg. Co.\nBeatrice, Nebr.\nNo\nleuffel d: Esser Co.\nHoboken, N. J.\nYes\nPollock Mfg. Co.\nArlington, N. J.\nYes\n/estinghouse Electric Elevator Co.\nJersey City, N. J.\nYes\nHarrison, N. J.\nYes\nTrucible Steel Co. of America\nTrenton, N. J.\nYes\nJohn A. Roebling Bons Co.\nBrooklyn, N. Y,\nNo\nArma Corp.\nRochester, N. Y,\nNo\nBausch & Lomb Optical Co.\ncontinued)\nOffice of the Secretary of the Treasury,\nJanuary 31, 1942\nDivision of Research and Statistics.\nRegraded Unclassified\n331\nSyistence of Payroll Savings Plans in Industrial Plants\nReceiving the Navy \"E\" Flag\n(continued - 2)\n: Administrators'\n:January 24 report\nName of company\n:\nCity and State\n: on existence\n:\nof a payroll\n:\n: savings plan\nbrd. Instrument Co.\nLong Island City, F.Y.\nYes\nDEOL [achine Tool Corp.\nRochester, N. Y.\nYes\nInchine, Div. of Bendix, Avia. Cor. Elmira, N. Y.\nNo\nCarrier Corp.\nSyracuse, N. Y.\nYes\npricin Locomotive Go.\nSchenectady, E. Y.\nYes\natrol Instrument Co., Inc.\nBrooklyn, F. Y.\nYes\n--- Cory.\nBrooklyn, I:, Y,\nNo\nPront Corp.\nLong Island City, N.Y.\n%\njork Aircrake Co.\nLew York City, N.Y.\nNo\nL. white Co.\nBrooklyn, N. Y.\nNo\nReinstional Rickel Co.\nNew York City, N.Y.\nYes\nmárch Machine Tool Co.\nSidney, Ohio\nYes\nnäuskey Foundry & Machine Co.\nSanduskey, Ohio\nNo\nPormold Works\nCleveland, Ohio\nYes\nstional Cash Register Co,\nDayton, Ohio\nYes\nteel Improvement & Forge Co.\nCleveland, Ohio\nYes\nhe Worner & Swase) Co.\nCleveland, Ohio\nZee\nLivale Co.\nBloetown, (Phila.), Pa.\nYes\nartile Machine works\nReading, Fa.\nNo\nErie, Pa.\nYea\nbie Todayo Co.\nnedowne Steel & Iron Co.\nMorton, Pn,\n1.0\neeta Machine Company\nPittsburgh, Pa.\nNo\nlond. Steel Wke., Div. of Baldwin Loco. Burnham, Pa,\nYes\nrie Morks of General Electric Co.\nIrie, Pa.\nYes\nSethlenem, Pa.\nYes\n\\nlehem Steel Co.\nHonestead, Fa.\nl'o\nwww.gis-Illinois Steel Co.\nmedicall Co.\nPittsburgh, Pa.\nNo\nlional Forge & Ordnance Co.\nIrvine, Pa.\nNo\nACE Sall Searing Co.\nPhiladelphia, Pa.\nYes\nCrucible Steel Corp.\nMidland, Pa.\nNo\nDoeler Die Cesting do.\nPottetown, Pa.\nNo\nNov England Auto Products Corp.\nPottstown, Pm.\nNo\nPittsburgh, Pe.\nYes\nThe ::eXay Co.\nPittsburgh, Pa.\n110\nKYOKOSI Drawn Steel Company\nBethlehem, Pt.\n::0\nBethlehem Foundry & lachine Co.\n(contimed)\nOffice of the Secretary of the Treasury,\nJanuary 32, 1942\nDivision of and Strtistics.\nRegraded Unclassified\n335\nExistence of Payroll Savinga Plans in Industrial Plants\nReceiving the Navy \"E\" Flag\n(continued - 3)\n:\n: Administrators'\nJanuary 24 report\nName of Company\nCity and State\n:\non existence\n:\nof a payroll\n:\nsavings plan\neadwell Engineering Company\nEaston, Pa.\nNo\nmaylvania Electric Steel Casting Co. Hamburg, Pa.\nNo\npricen Pulley Co.\nNicetown, (Phila.) Pa.\nYes\n111nc Engineers Ino.\nPhiladelphia, Pa.\nYes\nward G. Budd KfE. Co.\nPhiladelphia, Pa.\nNo\ncime & Sharn Kfg. Co.\nProvidence, R, I.\nYes\nFulton Sylphon Co.\nKnoxville, Tenn.\nNo\nceron Iron Works\nHouston, Texas\nNo\nadegar Co.\nRichmond, Va.\nYes\nkeside Bridge & Steel Co.\nMilwaukee, Wisc.\nNo\nhis Allis Co.\nWilwaukee, Wisc.\nNo\nOffice of the Becretary of the Treasury,\nJanuary 31, 1942\nDivision of Research and Statistics.\nRegraded Unclassified\nTREASURY DEPARTMENT\n336\nINTER OFFICE COMMUNICATION\nDATE January 31, 1942\nTO\nSecretary Morgenthau\nFROM\nMr. Hass M.\nSubject: Operation of Payroll Savings Plans in Large Companies\nduring December 1941\n1, Attached to this memorandum is a table showing\nsome preliminary information on the operation of payroll\nsavings plans in 86 large companies during the month of\nDecember 1941. The data shown in the table were obtained\nfrom the companies listed therein through the direct mail\nreporting system which we established two weeks ago. They\nrepresent actual results for December in the companies listed.\n2. The 86 companies shown in the table employed\n506,000 persons in December. Of this number 93,850 or ap-\nproximately 18-1/2 percent had pledged themselves to purchase\nSavings Bonds under payroll savings plans. The average de-\nduction from pay under the plans amounted to approximately\n1 percent of the aggregate payroll of the various companies.\n3. The companies listed in the table represent a random\nsample of large companies operating payroll savings plans in\nDecember. (The companies selected were those whose reports\nwere included in the first week's replies received to our\nquestionnaire.) A random sample such as this should be more\nor less representative of the operation of the plan through-\nout the country during that month.\n4. Employee participation in payroll savings plans 1s\nundoubtedly higher at the present time than it was in Decem-\nber because the companies have had more time to canvase their\nemployees. We shall have preliminary data on the extent of\nthis participation in about three weeks when the replies to\nour February 10 questionnaire begin to come in.\n237\nof Payroll Savings Plane in A Selected Group of Large\nCompanies Durine December 1941 1/\n:\n:\nNumber of\nPercentage\n:Percent of\n:\nNumber\n: employees\nof\ncompany's\nand address\n:\nof\n:participating\nemployees\nimayroll de-\nof company\n:\npersons\n:\nin payroll\n:\n: ducted for\npartici-\n:\nemployed\nsavings\n++\nt mayroll\n:\nplane\n:\nrating\n:sevings plar\nLeo Co.\nDecember, Conn\n2,000\n980\n36\n1\nMachine Tool Cora\nN. Y\n824\n766\n93\n.\nsenire & Foundry Co.,\nOhio\n1,048\n773\nAT\nif\n- Lient Co.,\nWis\n1,147\n1,001\n87\n1.\n- Corp.,\n- Affie, Wie\n3,850\n3,084\n80\nin Co., Inc.,\nN. J\n12,464\n0,715\n70\nNO\nJ. Worsted Hills, Gera\n11110 Branch, Garfield, N.J\n2,900\n1,950\n67\n2\none insurecturing Co.,\nVe\n1,600\n1,060\n46\n2\nElectric Elevator\n1,281\n842\n1.6\n2\n20., Jersey City, N. J\n...: Slectric Co.,\nConn\n1,562\n392\n64\n2\nDevelond Twist Drill Co.,\n3,242\n1,439\n64\n4\nOnio\nSlectric Railway &\nincoment Co., Hilwaukee, Wie.\n2,494\n2,480\n59\nI\nAvintion,\nOstroit, %1ch.\n1,087\n553\n51\n2\nStore, Ine,\n1,200\nson\n2.\n2\nlev Yark, N. Y.\nE. Hanes Khitting Co.,\nJulton-Salex, S. O.\n3,150\n1,537\n45\nI\nInstone Cotton Mille,\n877\n48\n3\nBedford, Mose\n1,819\nCentral of Jeor 19 Rollway,\nSeventish, Ga\n2,530\n-\n1\n5,500\nR. J. Reynolds Tobacco Co.\n4,625\n42\n1\nWinston-Salem, N. C\n11,000\nWisconsin Electric Power Co.,\n2,385\nREO\n37\n2\nHilwsukee, Wis\n(costinued)\nOffice of the Secretary of the Tressury,\nDivision of Research and Statistics.\nCompanies selected are those with tor largest number of employees Among\nthe first 8,000 reulies received to tae Treasury's December ruestionnaire\non Regroll sevings niens.\nLeva than -5 of 1 percent.\nRegraded Unclassified\n338\nOperation of Payroll Savinge Plans in a Selected Group of Large\nCompanies During December 1941 1/\n(Continued - 2)\n:\n:\nNumber of\n: Number\n:\nemployees\nPercentage\nPercent of\nof\n:\nparticipating\nof\ncompany'e\nName and address\n:\nof company\n:\npersons\n:\nin payroll\nemployees\npayroll de-\n:\n:\n:\npartici-\nducted for\n: emoloyed\nsavings\n:\n:\n:\nplane\n:\npeting\npayroll\nenvings plan\nSTP Drop Forging Co.,\nSpringfield, Mass\n1,400\n451\n32\n2\nther Pen Co,\nJaneaville, Wis\n1,442\n450\n31\n2\n1srk Thread Co.\nNewark, N. J\n1,940\n560\n29\n1\nunley Works, American Tube\nA Stemping Plant,\nSridgeport, Conn\n1,122\n298\n27\n1\ninn-Lovett Co,\nJacksonville, Fla\n1,000\n250\n15\new York Life Insurance Co.,\nSew York, N. Y\n4,287\n1,055\n25\n1\nwith & Wesson,\nSpringfield, Mase\n1,258\n300\n24\n-\nalley Carburetor CO.,\n1,476\n350\n24\n.\nDetroit, Mich\nleveland Railway Co.,\nCleveland, Ohio,\n4,200\n980\n23\n-\n1-State Telephone & Telegraph\nCo., Omeha, Neb.\n1,730\n366\n21\n1\n& K. Keragheusian, Inc.,\nFreehold, N. J\n1,707\n359\n21\n1\new York Telephone Co.,\nNew York, N. Y,\n40,454\n8,514\n21\n1\nanufscturers Trust Co.,\nSew York, N. Y.\n3,365\n723\n21\neatherhead Co.,\nCleveland, Ohio,\n2,100\n445\n21\n2\nincinnati Street Railway Co.,\n1,992\n421\n21\n-\nCincinnati, Ohio\northrup Aircraft Manufac-\n1\nturing Co., Los Angeles, Calif.\n4,320\n575\n20\nombustion Engineering Co.,\nY\n1,010\n202\n20\n1\nInc., New York, N\nG. Corporation,\nNew York, N. Y.\n1,400\n260\n19\n1\nWhite Motor Company,\n4,990\n970\n19\n1\nCleveland, Ohio\nChicago, Indianapolis &\nLouisville R. T.,\nChicago, Ill\n2,200\n359\n18\n1\nNevada Consolidated Copper\nCorp., McGill, Nev\n1,677\n297\n18\n2\n(continued)\nOffice of the Secretary of the Treasury,\nDivision of Research and Statistics.\nCompanies selected are those with the largest number of employees among\nthe first 2,000 replies received to the Tressury's December cuestionnaire\non payroll sevings plans.\nLees than .5 of 1 percent.\nRegraded Unclassified\n339\nOperation of Payroll Savings Plans in a Selected Group of Large\nCompanies During December 1941\n(Continued - 3)\n:\n:\nNumber of\n:\n:Percent of\n:\nNumber\n:\nemployees\nPercentage\nof\ncompany's\nName and address\n:\nof\n:participating\nof company\n:\n:\nin payroll\nemployees\n:payroll de-\npersons\nducted for\n: employed\n:\nsavings\n:\npartici-\n:\n:\n:\npating\n: payroll\nplans\n:savings plar\npchester Transit Corp.\nRochester, N. Y.\n1,032\n188\n18\n1\nartford Machine Screw Co.,\nHartford, Conn\n1,600\n265\n17\n1\nSams-Millis Corp.\nRigh Point, N. C.\n2,712\n452\n17\n1\nnnn-Bush Shoe Co.,\nMilwaukee, Wis\n1,239\n210\n17\n1\npuisville & Nashville\nRailroad Co., Louisville, Ky.\n30,600\n4,800\n16\n1\nhesapeake & Potomac Telephone\nCo., Baltimore, Md\n5,493\n866\n16\n-\nerican Writing Paper Corp.,\nHolyoke, Mass\n1,330\n200\n15\n1\nirestone Cotton Mills, Inc.\nGastonia, N. C\n2,063\n300\n15\n1\nones & Lamson Machine Co.,\nSpringfield, Vt.\n2,045\n300\n15\n1\nigin, Joliet & Eastern Railway\nCo., Chicago, Ill\n5,975\n845\n14\n-\narke-Davis & Co.,\n4,141\n589\n14\n1\nDetroit, Mich\nI. DuPont de Nemours & Co.,\nWilmington, Del\n62,000\n5,070\n13\n.\nonde Nest Publications, Inc.,\nGreenwich, Conn\n1,238\n161\n13\n1\nhrysler Corporation,\nDetroit, Mich,\n66,194\n8,327\n13\n1\nentral Hanover Bank & Trust\nDo., New York, N. Y.\n2,393\n306\n13\nleveland Trust Co.,\nCleveland, Ohio\n1,983\n252\n13\nlinchfield Railroad Co.,\n1,397\n186\n13\nErwin, Tenn\nhuntain States Telephone &\nTelegraph Co., Denver, Colo..\n8,267\n992\n12\n1\nNorthwestern Bell Telephone Co.,\n10,986\n1,286\n12\n1\nOmaha, Neb\nBell Telephone Co. of Pa.,\nPhiladelphia, Pa\n19,536\n2,423\n12\nI\nChesapeake & Potomac Telephone\nCo,, Washington, D. 0\n5,249\n553\n11\n1\n(continued)\nOffice of the Secretary of the Treasury,\nDivision of Research and Statistics.\nCompanies selected are those with the lergest number of employees among\nthe first 2,000 replies received to the Treasury's December questionnaire\non payroll savings plane.\n-\nLess than .5 of 1 percent.\nRegraded Unclassified\n340\nOperation of Payroll Savings Plane in à Selected Group of Large\nCompanies During December 1941\n(Continued - 4)\n:\n: Number of :Percentage: Percent of\n:\nNumber\n:\nemployees\n:\nof\n: company's\nName and address\n:\nof\n:participating\nemployees\n: payroll de-\nof company\n: persons : in payroll\n:\nparticl-\n:\nducted for\n:\nemployed\n:\nsavings\n:\npating\n:\npayroll\n:\n:\nplans\n:\n:savings plai\national Bank of Detroit,\nDetroit, Mich.\n1,222\n131\n11\ncerican Telephone &\nTelegraph Co., New York, N.Y. 16,176\n1,831\n11\n1\n11100 Service 011 Company,\nBartlesville, Okla\n5,000\n550\n11\n1\ngrogannett Electric Co.,\nProvidence, R. I\n1,529\n172\n11\nLente, Incorporated,\nAtlanta, Ga\n1,700\n170\n10\nonsolidated Copper Kines\nCOME., Kimberly, Nev\n1,022\n104\n10\n1\ncited Electric Railways Co\nProvidence, R. I\n1,120\n96\n9\n1\northwestern Mutual Life Ins.\nCo., Milwaukee, Wie\n1,577\n138\nAD\n-\n10 Bell Telephone Co.,\nCleveland, Ohio\n11,420\n940\n8\n1\nothern Bell Telephone È\nTelegraph Co., Atlanta, Ga\n26,316\n1,970\n7\n1\nestern Maryland Reilroad\n30., Baltimore, Md\n4,441\n318\n7\nS. Metals Refining Co,\nCarteret, N. J\n2,108\n148\n7\n-\ntomac Electric Power Co.,\nWashington, D. 0\n2,264\n131\n6\nbeton and Naine Reilroad,\nBoston, Mass\n15,200\n935\n6\nty Bank Farmers Trust Co.,\nNew York, N. Y\n1,041\n62\n6\nrter 011 Co.,\nTulsa, Okla\n1,966\n111\n6\nreintan Railway Co.,\nNorfolk, Va\n3,300\n190\n6\ninilton Manufacturing Co.,\nTwo Rivers, Wie\n1,280\n75\n5\nDane-Blabon Corp.,\nTrenton, N. J.\n2,040\n52\n5\n1\nCarlion Interests,\nColorado Springs, Colo\n1,000\n35\n4\n1\nTerminal Railroad Association\nof St. Louis, St. Louis, Mo.\n4,101\n147\n4\nNational City Bank of\nNew York, New York, N. Y\n211\n11\n*\n5,500\n(continued)\nOffice of the Secretary of the Secretary,\nDivision of Research and Statistics.\n1/ Commanies selected are those with the largest number of employees among\nthe first 2,000 replies received to the Treasury's December questionnaire\non payroll savings plans.\nLess than .5 of 1 percent,\nRegraded Inclassified\n341\nOperation of Payroll Savings Plans in a Selected Group of Large\nCompanies During December 1941 1/\n(Continued - - 5)\n:\n:\nNumber of\n:Percentage :Percent of\n:\nNumber\n: employees\n:\nof\n: company's\nName and address\n:\nof\n:participating:\nemployees\n: payroll de-\nof company\n:\npersons\n:\nin payroll\n:\nemployed\npartici-\n:\nducted for\n:\n:\nsavings\n:\npating\n:\npayroll\n:\n:\nplans\n:\n:savings plan\nidland Steel Products Co.,\nCleveland, Ohio\n1,737\n67\n4\nmerican Airlines, Inc.,\nNew York, N. Y.\n4,611\n132\n3\n1985 Point Manufacturing Co.,\nWest Point, Ga.\n7,765\n166\n2\nOffice of the Secretary of the Treasury,\nDivision of Research and Statistics.\nJanuary 31, 1942\n1/ Companies selected are those with the largest number of employees among\nthe first 2,000 replies received to the Treasury's December questionnaire\non payroll savings plans.\n#\nLess than .5 of 1 percent.\nRegraded Unclassified\n342\nTREASURY DEPARTMENT\nWASHINGTON\nJanuary 31, 1942.\nMEMORANDUM FOR THE SECRETARY:\nYour request that we have a \"Gallup\"\npoll about the pay-roll allotment plan\nhas been handled by liessrs. Kuhn, Odegard,\nand Powel.\nMr. Odegard reports that he expects\nthe tabulation of the results will be com-\npleted the middle of next week.\nGRAVES.\nRegraded Unclassified\nFIELD ORGANIZATION News Letter\nDEFENSE SAVINGS STAFF\nTREASURY DEPARTMENT, WASHINGTON, D. C.\nPANUARY 31, 1942\nNUMBER 37\nWANTED-FIGHTING DOLLARS\nMAKE EVERY PAY-DAY\nBOND-DAY\nUNITED STATES\nDEFENSE\nBONDS-STAMPS\nAsk\nabout\nour\npagrell\nsacings\nplan\nThe second poster in the Defense Savings Staff's new WAS series.\nThis poster, designed for display by concerns and organizations that\nhave adopted Pay Roll Sevings, will 9000 be available. Alwo edapted\nto newspaper use, it is illustrated in set fórm as Campaigo So. 5-\nAd No. 2, in the Fortfolio of Newspaper Advertisemente (DSS-195) TO-\ncently released to State Aiministrators gnd the press,\nRegraded Unclassified\nNeses Letter\nNews Letter\nMUSICAL DOLLS TO BOOST BALES OF DEFENSE STAMPS\nStamp Act Of 742\n2U\nA notable collection of dalla - beautifully costumed and authentic\n7009\nAMERICA\nreplicas of American women of history, vives of the presidents,\nno\nGUARD\nIndian of all history - will soon be seen in prominent department shores\nthroughout the country in connection with special efforts of these shores\nto sell Defense Stamps and fo-\ncas attention upon other phases\nof National Defense.\nThe \"Defense Doll Tour\"\nopens in Boston's Jordan\nMarsh store February 2, Mise\nAudrey Kargere, owner of the\ncollection, will be in attend-\nonce and will explain the\nmany interesting features of\nCARICAL\nthe exhibit. State Adminis-\ntrators will be advised of the\ndate of Miss Enrgere's arrival\nARD\nin their community.\nWhen the dolla reach\nJoliet, Illinois, DD March 16,\nwhere they will be shown by the\nM. A. Felman Company, their\nIT WILL LICK THEM\narrival vill, it 1s confidently\npredicted, be calabrated by\nGene Elderman Washington Post.\nannouncement that the 201 employ-\nMise Andrey Largere with one of\ncan of this store have purchased\nher collection of fesous doll\n$50,000 worth of Defense Bonds.\ndresses.\nThis is the goal of the campaign\nIN THIS ISSUE\nDOV under way, according to Personnel Manager Marjorie luckley, who pointe\nout that the nearby and Elwood Ordnance Plants late sade attimene\nm PAY ROLL SAVINGS Poster - Page 1\nof Joliet \"national defense\" conscious.\nDEFINER DOLL Tour - Page 3\nFIELD ORGANIZATION NEWS - Pages 4 to 7\nLABOR AND INDUSTRY - Pages 8 and 9\nÀ DEFENSE STAMP BALL\nSPECIAL PROMOTIONS - Pages 10 and 11\nBANK Program Expands - Page 12\nAn unusual Defense Stamp Ball vas held la the cities of Rock Island\nSTAMP ALBUM Shortage - Page 13\nand Moline, Illinois, and Devenport, lows, on January 23. Spansored by\nMORE FILM STARS On Tour - Page 12\nthe Alpha Chapter of Pai Mu Eappe fraternity, the ball took place sinul-\nlaneously in three different hotele la this metropolites area, now an\nNEV TORN AND DALLAS Retail Store Plane - Page 14\nimportant center of areasent production.\nNEV HANDBOOK For Education Committees - Page 15\nTO THE LADIES - Pages 16 and 17\nAdmission to the dance vas $1 per couple but two twenty-five cent\nDefense Stamps in an albus were given upon presentation of admission\nARTIST Contributions - Page 18\ntickets at the door. The hotels and orchestras donated thetr services,\nRADIO Programs and Pay Roll Savings - Page 19\nand the receipts of the check-room were given to the Red. Cross.\nPICTURES - Page 20\nRow about promoting such all affair la your community!\npr\nNews Letter\nFIELD ORGANIZATION NEWS\nSouth Dakota's state organization, which was only brought together\nfollowing the Chicago meeting in December, is progressing by leaps and\nbounds. Already the state boasts a News Letter -- first issue January\n24 -- which includes the following highlights:\n100 Rapid City firms enrolled in pay roll savings the first ten\ndays of B. drive by 8 committee in charge of Marty Beckers.\nMore than 100 Sioux Falls firms similarly enrolled since January\n10 by the Minnehaha County Committee assisted by 80 Sioux\nFalls insurance men.\nBond and Stamp sales sky-rocketing in Bennett County, 0, I, Hodson,\nchairman, where more than a dozen snappy rallies have been\nheld.\nSully County, Luther Nelson, chairman, has recorded every man,\nwoman and child a bond or stamp owner, including Harvey, 36-\nhour old son of Mr. and Mrs. Arthur Haub of Onida.\nJohn Morrell and Company, Sioux Falls, has given a stamp album with\na ten-cent stamp to each Sioux Falls school child - 9,000 of\nthem.\n(Left) T. Henry Foster, Pres-\nBUY A SHARE IN\nident of John Morrell & Company,\nAMERIC\nexchanging smiles with one of the\n30,000 children in Sioux Falls,\nS. D., Topeka, Kan., and Ottumwa,\nIowa, to whom the company is\nfurnishing an album and a stamp.\n\"We are going to start the ball\nrolling in this way,\" said Mr.\nFoster, \"and expect that the boys\nand girls will then help carry on\nNSE SAN\nthe war against the aggressor\nDS AND ST\nnations. and also start them-\nselves on the path of patriotism\nand thrift.\"\nChairman Andrew Hedman of Day County is an effective committeeman\nin his own right, while his son, Duke, is credited with downing five Jap\nplanes on Christmas Day.\n\"We are most happy.\" say Administrator Christopherson and\nState Chairman Walter Burke, \"When we hear that your banks and\npost offices cannot keep enough bonds and stamps on hand. That's\nwhat we want to do - sell them faster than they can be had.\"\n- 4 -\nRegraded Unclassified\nNews Letter\nFIELD ORGANIZATION NEWS\nClermont. Florida, records the purchase of $63,315 worth of Do-\nfense Bonds and Stamps, an average of $37 for each of its 1,680\npeople.\nWATCH OUT HITLER! When\nRepublicane and Democrate in\nAmerica join hands, they mean\nbusiness.\nIn the picture are (left).\nMrs. Pearl Waters, Republican\nNational Committeewoman, and\nMrs. Lennard Thomas, Democratic\nNational Committeewoman, getting\ntogether for Defense Bonds at\nthe meeting of the Women's Divi-\nsion of the Defense Savings\nCommittee for Alabama, held\nJanuary 14.\nTed Jones, Chairman of the state theatres sub-committee for New\nMexico, brought out last August a 20-page manual offering local theatre\nowners and managers a great variety of suggestions on how to make their\nsudiences Defense Bond conscious. Recently Chairman Jones circularized\nhis associates with a 7-page supplement bringing his earlier program up\nto war tempo,\n\"A country worth fighting over\nis a country worth fighting for\" --\nClarence Coleman (seated, left),\nDemocratic State Chairman for Wash-\nington, and Thomas Oakshott (seated,\nright), Republican State Chairman,\neigning joint statement in presence\nof Joel 3. Ferris (standing, left),\nChairman Washington State Advisory\nCommittee, and Saul Hans (standing,\nright), State Administrator.\nThe 7,000 party workers of the\ntwo political organizations were put\nnt the disposal of the Defense Sav-\nings Staff.\n\"ENLIST WITH THE DEFENDERS - BUY DEFENSE BONDS!\"\n- 5 -\nNews Letter\nNews Letter\nVIBLO OROANITATION USVS\nFIELD ORGANIZATION JEWS\nA special meeting of the Oklahoma State Defense Sevings Committee\n⑉ held in Oklahoma City on January 8. The meeting VAI en all-day\nIn Sheboygan, Wisconsin, Mr. 0. L, Hall, President of the Bank of\nsession and vas featured by the announcement of Honorary Chairman,\nSheboygan, delivered an enlightening address on Defense Bunds to the\nGovernor Leon C. Phillips, that 15,000 State employees under his super-\nlocal Woman's Club. In the course of his talk he made the following\nvision would immediately sign up for the regular purchase of Defense\nremarks, which should be taken to heart by everyone.\nBonds and Stamps.\n\"Ve Americana will have to anke up our minds to buy De-\nPictured here from left\nfense Bonds in ever increasing amounts or ve are going to\nto right, Governor Phillips,\nfind that instead of the personal privilege ve now have of\nState Chairman L. H, Wents,\nsaving and investing a part of our earnings to provide the\nand Administrator F. C. Junes\npurchasing power for the adjustment period which is sure to\nconferring on the State ex-\ncome, it will be taken away from 110 by taxation in sae form\nplayees participation in the\nor another. Let there be no question in our sinde about\nthat.\"\nDefense Savings Program. A.\nlarge portion of the all-day\nseeting WALE turned over to\nHear what Goehring did to Hitler! Only It ween't the Goering of\npromotion of the Pay Roll\nthe German air force - it vas who Coshring of Flaxville in northeastern\nSavings Flao in Oklahoma.\nMontana, who announced recently that his town had raised $65,975 in De-\nfenee Savings males since last May, which is an average of $244.35 for\neach inhabitant. The Flarville per capita sale of Series El Bunde for\nDecember was $62.50. Ene any community asceeded this figure?\nPicture at right shows\ncome of the more than 1500\nAt the University of Oklahoma\nemployees of Prederick &\nstudents recently conducted a whirl-\nNelson Department store in\nwind campaign which resulted in the\nSeattle, Washington, filing\nstarting of more than 3,000 twenty-\nup to stage to turn in pay\nfive cent stamp books on the campus.\nroll savings authorization\nDefense Savings Stamps are now on\ncards at the conclusion of\nsale regularly in every fraternity\ntalk by Deputy Administra-\nand sorority house, and every campus\ntor Karl M. Richards.\nshop.\nIn State Leaders for Delaware\nSecretary Morgenthau announced\nJanuary 27 the appointment of Hanry\nPledge Campaign Launched in Oregon\nT. Sush, Wilmington banker, to the\nchairmanship of the Delaware State\nTo test procedures to be used in other states in conducting the\nCommittee, and the appointment of\npledge campaign which vill get under way throughout the country in\nDonald P. Rose, also of Wilmington,\nFebruary, Oregon is new #agaged in its pledge undertaking. A kick-off\nas State Administrator. Mr. Bush\nbroadcast was held the night of January 20, and the first completed\n1.0 A former president of the Wil-\npledge cards began coming in about twenty-four hours later. Bigh soun-\nsington Chamber of Commerce, and\nUniversity of Oklahoma students\ntain roade and trails in the northeast corner of the state were covered\npresident of the Wilmington Music\nreceive Stamp Albume for distribu-\nwith anov and ice, necessitating may deliveries on horeeback. A full\nSchool. Mr. Hoes for many years\ntion.\nreport on this very important experiment will be BOOD forthcoming,\nhas been active in banking and\nbusiness circles in Delaware.\n\"JOIN IN THE CAUSE BUY DEFENSE STAMPS!\"\n- 6\n- 7\nUnclassified\nNews Letter\nNews Letter\nLABOR AND INDUSTRY\nCABOR AND\nLast week's News Letter, page 12, carried the story of the 1. 7. of L.\n\"This 18 not a 25 ver.\" declares Bulletin No, 5 of the Idaho De-\nbillion-dollar goal for 1942. On January 23, the United Mine Worbers of\nfense Savings Staff. Enforcing the same theme la Idaho comes e letter\nAmerica (CIO) issued a circular latter to officers and members of all local\nfrom J. J. 0'Connell, manager of the Potlatch Foresta, reminding Its\nunions, urging co-operation with the Defense Savings Program:-\nemployees that \"We are not playing for the little white chips now, Ve\nare playing the big game where they use the yellow ones, Many of us\n\"At the meeting of the International Executive Board, held in the city\nare too old to enlist in the forces defending our country, but ve can\nof Washington last week, consideration was given to the purchase of Defense\ndo a lot by supporting those who are in where lbs going 1s tough by in-\nBonds by the various branches of our organisation and by our members.\ncreasing our Defense Savings Bond purchases. . Ask yourself the ques-\ntion, Am I doing all I can and should to back up the boye!\"\nThe International organization in 1941 purchased $50,000 worth of De-\nOn the right is an enlarged reproduc-\nfense Bonds, which La the naximum allowed any one organisation under the regi-\ntion of the first button to be Issued by\nlations of the Treasury Department.\nthe Defense Bond Club to employees of Velt-\ntoo Steel in Vest Virginia, while they are\nBOND\n\"On January 1 of this year, the International Union again made # similar\npaying for their bonds. The button has .\nlimit purchase. If rules and regulations of the Treasury Department later\nwhite background and red letters. When\npermit, - will be glad to make larger purchases of these bonds.\nsumbers of the club have completed paying\nfor their bonds, they will receive a\n\"The International Executive Board endorses and urges vigorous support,\nsimilar button in red, white and blue.\nof the purchase of Defense Bonds by our membere. We approve the Treasury\nDepartment's pay roll allotment plan applied to the Defense Savings Program.\nA similar method of encouraging the\nWe urge upon our Districts and Local Unions, and their manbers, that this\npurchase of Defense Bonde out of Income bee\nplan be utilized so that part of the earnings in stated pay periods may be\nbeen launched by the Dry Dock Surings Instity-\nutilized and set aside for the purchase of Defense Bonds.\ntion of New York City, Its Victory Club operates\nlike a Christmas club, with weekly deposite ranging from 50# opeard.\nThis usa the procedure followed generally in the mining industry in\nMembers of the club receive the button pictured below. The National\nthe 1sst World War for the purchase of Liberty Bonds.\nAssociation of Mutual Sevings Banks 160 last 42nd Street, 3, T. 0,)\noffers its member banks similar buttons, with the individual branch\nThis is also a practical way for our members to back the armed forses\nDATE inserted, at podarate cost.\nof our nation, thousands of whole are from the ranks of the United Mine Brk-\ners of America; many of whose have already given their lives in defense of\nour nation and its institutions.\nThere New For - -\nFrom the Rev Tork bead-\n\"The International Executive Board, therefore, calls upon all branches\nof our organization and our mambers to lend their fullest assistance in this\nJOIN THE DRY DOCK\nquarters of the American\nThread Company, whose mill\nall-out means to total victory. fie urge the of ficers of the various branches\nIs located In Willmantic,\nof the organization to co-operate fully with our members in the Local Unions,\nVICTORY\nDRY\n8006\nConnecticut, COMB the come\nwith the respective coal operators' associations and with the government in\nthat 1,516 employees Join-\nworking out the necessary details so sa to meet local and individual needs\ned in Pay Holl Savings 10-\nand requirements in order to insure the success of this great program.\"\nCLUB\ntween December 20 and 280-\nMATY 3, authoriting weekly\n- -\ndeductions of $1,997. In\nSigned \"Yours for Victory,\" by John L. Lowls, President,\nWIN THE W.A.R\nPhilip Murray, Vice-President, and Thomas Kennedy, Secy.-Treas.\naddition to the foregoing,\nPAYMENTS\nthe will made cash sales\nof Series 2 Bonde to 86\nP. 1. Fagen, President of Matrict No. 5, United Vine Workers of America,\nr i i\nhas sent . similar letter to the Local Unions in the Pithaburgh, Pa. district.\nI I i I 1 I\n-\nemployees, with e maturity\n- - - les M -\n- of - - - -\nvalue of $20,300.\nPresident Fagan's measage asks local members to maintain the proud and envi-\n- - -\nable record set by the United Mine Workers during the first World War. PM\nare hopeful,\" he concluded, \"that you will continue to do your part in the\nbettle of freedom by buying Defense Bonie, and more Defense Bonds.\"\n- 8\nRegraded Unclassified\nNews Letter\nNews Letter\nSPECIAL PROMOTIONS\nSPHOTAL PHONOTIONS\nOn January 22, the Pocatello (Idaho) Central Labor Union adopted\nPresident Herber: 2. Hopkins of Civitan International has enggish\na var resolution pledging its members to *co-operate fully with all\ned that each Civitan 0lub begin immediately . Buy-A-Bond-A-Day campaign.\nlocal, state, and Federal agencies for the civilian and national de-\nTo stimulate club rivalry, the bond sales will he scored for purposes of\nfense and to purchase all the Defense Savings Stamps and Bonds\noational publicity -- e $25 bond to count 10 pointe, $60 bond 15 points,\nthat ve are financially able to buy.\"\n$100 bond 20 points, and 40 da. President Hopkins bas pointed out that\nCivitan was founded during World Var I to help solve civic problems\nThe Walter Field Company. Chicago mail order house, plans to\ncrested by the crisis. \"Civitan la now in a position to work effectively\ndistribute to its customers this coming year some 800,000 circulars\non a nation-wide basis,\" he added, orging the continuance of Duy-&-Nand-\ninviting you to Woin the 'Loyal Order of Americane' by buying \" many\nA-Day campaigns for as long 68 the seed laste.\nDefense Sevings Bonde at you can.\" The reverse of the circular gives\nan order form for purchase of Series 2 Bonds direct from the Treasurer\nMarrill Igach. Pierce, Fenner and\nof the United States. Many business firms carrying on an extensive nail\nSenne, con of the country's largest\norder trueiness or conducting & large volune of currespondence are dis-\nstock exchange firms, has launched a\ntributing similar form.\nplan for merchandising Defense Bonds\ninvestment\nin its 93 offices in cities through-\nFORSAFETY+ INCOME\nout the United States. The plan,\nRITY\nPictured at the left 18 the\nsanctioned by the Treasury Depart-\nStamp booth in Grand Central\nsent, emphasizes Defense Bonds pri-\nTerminal, New York City, which\nmarily as an investment, \"on the\nYOUR DEFENSE SAVINGS\nvse recently opened \"for the\ntheory that a greater investor sp-\nSTAMPS HERE\nduration.\" Postmaster Albert\npeal can be made on this basis than\nTODAY!\nGoldman and Deputy Administrator\nby patriotic argument alone,\" said\nJohn Whitney Bichmond are well-\nLes G. Griffith, Pitteburgh Manager\n- - Card\ning stamps to children as they\nof the firs. The small poster\nbreak their banks. Sales have\nillustrated at the right la attrac-\naveraged nearly $1,000 a day\ntively printed in red, white, and\nsince this booth vas installed,\ntwo shades of blue.\nThe January issue of Life\nFraternal\nclation News carries full informa-\ntion on the activities of the National\nCOPY fu no\nThe Lione International\nAssociation of Life Underwriters in\norganization has offered to\nco-operation with the Defense Savings\nassist the Defense Savings Pro-\nProgram.\n(TM) In any vay possible. State\nAdministratora are now being sent\n*Selling Bonde is DD longer . bobby,\" said Mr. William H. Andrews,\ncarde giving the names and ad-\nII., National Chairman of the Life Underwriters' Committee for Defense\ndresses of individual Lions who\nSavings. the original pasce-time 1dea of one day a month is\nhave been designated 03 contact\nout, Everyone In the country is working overtime underwriters\nmen with local Defense Savings\nmust do that too.\" Approximately 10,000 life underwriters are actively\nCommittees. These nes, and the\nat work in the country as volunteers selling bonds. They have made con-\norganization they represent, can be of such assistance in the forthoom-\ntact with about 8,500 firm, large and mall, and have made preliminary\nlog pledge campaign. But the co-operation of the Lione Club 1e not\ncontacts with more than 2,000,000 employees, of which acre than 1,600,000\nlimited to the pledge plan - It is A long-range offer to help the De-\nhave now been enrolled in the Pay Soll Savings Plan.\nfense Bond Program et every point.\nImpressive as this figure after little more than two months\nof work, the Underwriters realize that it is less than three per cent of\n\"SUPPORT THOSE WHO ARE SERVING -- BUT DEFENSE BONDS!*\nthe amount of Liberty Bonde sold by their organization during 1917 and\n1918. The Association 10 saking the members so redouble their afforts.\nII\n- LO -\nNews Letter\nNews Letter\nTemporary Shortage of Stamp Albuse\nBanks\nNot only has the public demand for Defense Sevings Bunde run aboad\nLeft, lobby desk\nof the supply since Pearl Harbor, but the demand for Stemp Albuma has\nof the first Intional\npractically exhausted post office stocks of this item,\nBank of Lincoln, Nehr.,\nwhere customers may\nAn order for 60,000,000 Stamp Albums, in 10, 25, and 50-cent depasi-\nconveniently purchase\nnations is now in production. Delivery of 2,500,000 albums to two die-\nDefense Savings Bonds,\ntributing centers - the Fourth Assistant Postmaster General in Weshington\nDefense Stamps are not\nand the Postmaster for Nov York City - 1a scheduled before the end of\nsold at this desk, but\nJanuary. Re-distribution to post offices throughout the country will be\nare available at all\nmade immediately thereafter,\nof the cashiers' cages.\nHoward Freeman, cash-\nier of the First\nFile Stare\nNational, has arranged\nspecial lobby displays DO Dafense bonde at the bank since last summer.\nRecent issues of\nthe Neve Letter have coa-\nthe American Inetitute of Banking launched January 14 Its national\ntained stories on the\nprogram on behalf of Defense Savings Bonds and Stamps. Although banks\nDefense Savings activi-\nhave co-operated with the Treasury since the beginning of the Defense\nties of Durothy Lanour\nSavings Program, stated President George T. Newell in his letter to the\nand the late Carole\nInstitute's members, this initial work can be supplemented in many vays.\nLombard. Saby, the\nAll bank employees, whether immediately engaged in the sale of defense\n\"Elephant Boy,\" is now\nsecurities or not, are to be educated\n8. Minute Nen for the\non the major aspects of the Defense Bond\nTreasury Department.\nProgram so that they can pass on this\nThe young Indian star\ninformation to the general public outside\nand his plear elephant\nof business hours as well as during the\nvill tour the country\nworking day. To get this program under\nas guest of the neve-\nvay, President Newell's letter vas so-\npaper carrier boys to\ncompanied by a statement of seven objec-\naid them in their cap-\ntives in the defense-financing program.\npaign to sall Defense\nand & list of ten suggestions for the\nStampe and Bonds. The\neducational forume which are to be held\nservices of Sabu have\nby Institute's committees ne public\nbeen placed at the die-\nrelations.\nposal of the Treasury\nby Alexander Korda, pro-\n\"The var has a job for you, too!\"\nducer of Budyard Kip-\nDafense Bond Advertisement of the Rhode\nling's \"Jungle Book,\"\nSabu, the \"Elephant Boy'\nIsland Hospital National Bank, Provi-\nstarring Sabu. United\ndence, Pawtucket, and Woonsocket, R. I.\nArtists will furnish Bernie Kamber, of the Publicity Department, to be\n\"Tackle this job earnestly. Buy\nin charge of the your. Sabu visited Washington briefly on January 25;\nDefense Bonds Nov!* and make continued\nhis itinerary will take his to 24 other cities in the country.\nAMOUNT\n-\npurchases A regular part of your budget.\nJudy Canova. famous Republic Pictures singing star, visited Char-\nlotte, I. C., on January 18, as as hunor guest at the thirtieth annual\nconvention of the Theatre Owners of North and South Carolina. Mine\nCanova participated in 6. public sale of Defense Bunds by the Macklen-\nEvening Bulletin, Providence,\nburg Defense Bond Committee, along with Junes J. Walker, former Mayur\nRhode Island.\nof New York City.\n13\nNews Letter\nNews Letter\n11 111 SCHOOLS\nAnother Cartoonist Recruit\nPOLVICTORY\n1\nonly\nALL\nBUY\n(8) will 200\n-\nJ. R. Williams, creator of\nParent-Tembers Invest in Defense Savings\n- But\nURITED\nThe\n-\n& 5 F\nthe famous \"Ous Our Way\" charac-\nprint\nTest\nters, has drawn the cartoon (left)\nThe National Congress of Parents and Teachers, Inc. invested $25,000\nfor the exclusive use of the Ameri-\nof its endowment funds in Defense Savings Bonds last month when the Isscu-\ncan Labor Press on behalf of the\ntive Committee met in Chicago. Mrs. James K. Lytle, of Los Angales, BE\nDefense Savings Program for Vic-\nnational treasurer, unde the purchase. She said it VAI done to encourage\ntory.\nstate F. T. &. congresss, districts, councils, the 28,000 local units,\nand the 2,500,000 members of the association to invest their ovn money In\nsimilar fashion.\nNEW YORK STORES PUSHING SALES OF\nSTAMPS AND BONDS\nShorily before the Executive\nCommittee sessions speaed, James\nClarke of the Education Division,\n& detailed plan for the promo-\ntion and sale of Defense Sevings\nBUY\nDefense Savings Staff, conferred\nwith Mrs. Lytle, Mrs. Villiam\nStamps and Bonds by New York stores\nADMI -\nKlatter, president, and other na-\nhas been prepared by the Retail\ntional P. T. A. officials about\nPublicity Committee of the Greater\nUNTIL THE an DONEI\"\nways in which the organization\nNew York Defense Savings Staff.\ncould expand its Defense Sevings\nThe plan 10 presented in a nineteen\nantivities smong its members and\npage mineographed brochure which\nin co-operation with the schools.\nthe chairmen of retail divisions\nGeneral endorsement of the Defense\nof large city Defense Savings\nSavings Program has been part of\nCommittees can secure from William\nthe National Congress' official\nHoward of R. E. Macy & Company,\nMrs. James I. Lytle, national P. ,\nprogram for 6 good many months.\nSome of the suggestions in this retailere manual:\nA. treasurer, and James Clarke, De-\nfenee Savings Staff, Washington, D.C.\n\"Wherever possible a permanent window should be assigned to the\npromotion of Defence Savings Stamps.\"\nHandbook for Education Committees\n\"Telephone order hoard transactions should be concluded with\nsome such reference as:\nPictured at right is the cover of the\nDBV Handbook for Education Committees,\n'And how many Defense Stamps can I charge to your account\nprepared by the Education Division of the\ntoday, Mrs. Jonnet' or,\nDefense Savings Staff after consultation\nwith many Defense Savings workers in the\n'Mrs. Junes, I thought you night be interested to know that\nfield. The Bendbook is intended to help\nBlanks has unde arrangements to sell Defense Stamps. Va\nEducation reprosentatives on State and\nhave a. special booth on the Street Floor and I hope you will\nLocal Committees, or sub-comittees, with\nbuy some the part time you are in the store.\"\nproblems of procedure connected with the\npromotion of Defense Savings among pupils\nand teachers. It will also help Educa-\nHANDBOOK\n\"Each store should establish its OMB sales goal for a specified\nEducation\nperiod of time, One method would be to take 15 of the\ntion representatives co-ordinate their\nCOMMITTEES\nstore's anoual volume as a goal to be reached in two months.\"\nwork with other local Defense Savings\n- ...... -\nactivities.\nCourtesy copies of this essual, and of the Dallas, Texas, retail\nof this Bendbook for every Defense Savings Committee member who\nstores plan will soon be sent to State Muinistrators.\nCopies Education any be obtained through State Administratore, Bo. 179.\nwere representing recently notified of its publication in Field Mesorandum\n16 -\n14\nNews Letter\nNews Letter\nTO THE LADING\n10 111 LADIES\nGeneral Federation Vomen's Club Pres-\nident Stans First Pladge in the Back\nAmerican Vomen's Voluntary Services, Inc.\nHelps so Sell Defense Bonds and Stamps\nAt the anoual seesion of the\nGeneral Federation of Women's Clubs\nAttractively uniformed, Mrs. Treberne-\nheld in Washington last week, Mrs.\nThomas. who le Secretary of the American\nSara Whitehurst, President, signed\nWomen's Voluntary Services, Inc., and Mrs.\nthe first of the new Defense Sav-\nAlesander Hamilton of the New York Branch,\nings pledges in the last, Setting\nCARE to Vashington to offer the services\nan example to the ambere of her vast\nof their organization to retailers through-\nout the country who eight wish to net up\norganisation, Kre, Whitehurst promised\nbouths to sell Defense Stamps and Bonds\nsouth. to invest $100 in Defense Bunds every\nand distribute literature. Major Benjenia\nSame who heads the retailer's advisory\ncomittee on Defense Savings, introduced\nThe General Federation offered to\ntham to retailer's representatives who\nco-operate with the State Defense Bay-\nHarold N. Graves, Assistant to\nhad COMB to Washington to discuss the pro-\nings Committees in the pledge compaign\nmotion of Defense Savings is their stores.\nSecretary Morgenthau, watches\nscheduled for this Spring. *Our State\nwhile Mrs. Whiteburst signs\nFederations vill help in any way that\nA week after this visit the National\nMajor I'am, Mrs. Trabarne-\npledge,\nthey cas,\" Mrs. Whitehurst said. \"Per-\nVomen's Division of the Defense Savings\nThomas, and Mrs. Alexander\nhape ve can most effectivaly aid by\nStaff called upon Miss Anita Phipps,\nHamilton\neducating our members to the need of systematically purchasing Defense\nChairman of the Washington Unit of the\nBonds and Stamps. They must understand that it Is only by putting money\nAmerican Women's Voluntary Services. to\nregularly into Defense Savings that they will help vard off inflation.\"\nsupply volunteers for the Defense Savings booth at the General Toders-\ntion of Vomen's Club annual board meeting at the Mayflower Hotel.\nMrs. John D, Robinson, Chairman of Bonds and Stampe for the General\nFederation, anoounced a contest to be held among the States, with prises\nto be offered the three State Federations having the highest percentage\nof members (or their busbands) signing pledges. Mrs. Robinson sald,\nAWVS Pledge Centessers\n\"This does not BOAD that our members wuet canvase for pledges, although\nThe American Vomen's Vol-\nwe will be happy to do that If It helps the local Defense Savings Commit-\nteas. But it does Been that ve will check our clubs to find out how many\nuntary Service workers answered\nmembers have signed the pay pledges.\" The first prise for the contest\nquestions put to them by the\ndelegates to the General Federa-\nwill be 0 $100 Series 1 Bond, con-\ntime of Vomeo's Club Board Meet-\ntributed by Mr. Villiam F, Witherow,\ning about the forthcoming pleigs\nwho vas a speaker at the General\ncampaign. They also managed to\nFederation's Defense session.\nsecure quite A. number of sign-\ntures from VOBER attending the\nWomen of the General Federation\nconvention, who promised to buy\nlistened intently to Harold N. Graves\nDefense Bonds and Stamps regu-\nand Leon Henderson, who talked about\nlarly and La specified amounts.\nmethods of controlling Inflation.\nMr. Graves spoke on the regular pur-\nOther Unite of the AWYS.\nchase of Defense Bonds: Henderson on\nAVVS voluntears sign up GFVC dele-\nare active throughout the country,\nthe need for affective price control\ngates in pledge campaign held at\nand can be of help to Defense\nlegislation. Afterwards the audience\nWashington's (D. C.) Mayflower\nSavings projects.\nparticipated in . lively discussion\nHotel. Army officers look on.\non the subject of inflation, and kept the two speakers busy answering\nquestions. (See picture at right),\n- 16\nNews Letter\nNews Letter\nArtists\n0% AIR\nAlmost every mall brings\nto the Defense Savings Staff\nMadio Prograza for the Coming Week:\nidease for alogans and posters.\nSome of the sketches submitted\nMonder. February 2. *FOE AMERICA WE SING,* Dr. Frank Black's Orchas-\nare indifferent; many of then\nITS and Chorus Guest Stare: Felix Knight. Tenor and Mary Bestman,\nvery good: and all have been\nSupreno. 9:30-10:00 PM (EST), NBC Blue Network.\nsubmitted in 5 spirit of help-\nfulness and patriotian.\nMonday, February 9. \"FOR AMERICA VZ SING,* Dr. Frank Black's Orches-\nIra and Choris Guest Stors: Arthur Carron - Netropolitan Opera and\nThe painting illustrated\nLydla Summers - Soprano, The Sev Opera Company, 9:30-10:00 PM (EST),\nat the right vae submitted by\nmc Blue Network.\nMr, William 3. Ingraham of\nSpringfield, Illinois. The\nrull effect of this striking\nprinting cannot be appreciated\nA total of 159 radio stations have informed the Radio Section of\nwishout the colors, but Uncle\nthe Defense Savings Staff that their employees have signed up 100 per\nSec's determination to wipe\ncent for the Pay Roll Savings Plan, Sixty-alx other radia stations\nthe blot of the Japanese\nhave installed such plane and have signed up a large number of their\nlalande off the flate of the\nemployees.\nUnited States is very evident.\nParticipation in full by the employees of KARK, KOHI, KLBA, of\nLittle Rock, Arknosas, and KFJ2, KGKO, and WEAP at Fort Worth, Texas.\n$48,000 Salary Increases in Defense Bonds\nmakes theee two cities the first 100 per cent cities in towns of three\nor more radio stations. Other 100 per cent cities are Evanaville,\nIn voting the appropriation ordinance for 1942, the Mayor and\nIndians, Springfield, Missouri, and Albany. Hey York, each having two\nCouncil of Macco, is., granted a 10% Increase in the salaries of all\nradio stations.\nCity employees making less than $175 per month, the antire increase,\namounting to about $48,000 to be paid in Defense Bonds or Stemps.\nEight out of seventeen stations in Kensas are algned up 100 par\ncent, making the best record by proportion of any State in the Usion,\n\"I wish 11 were possible,\" wrote\nalthough Texas has largest number of 100 per cent stations, eleven\nMayor Charles L. Bowden to State Ad-\nfollowed by Celifornia with ten and Sew Tark with nine.\nministrator Allen, \"for every fire who\ngrants BA increase to make it on the\nThe third in the weekly serias of one-half hour radio above spon-\nsame basis as we have done. The time\nsured Jointly by Boeton's Hotel Statler and Radio Station VBZ took place\nis here when it whall be e privilege\non Saturday night, January 24. Featuring the music of Leighton Noble\nto give back to the Government e part\nand his orchestra, guest appearances and announcements on behalf of De-\nof the things they gave to us -- for\nTabse Bonde and Stamps were cade by Mayor Maurice F. Tobin, of Boston\nour Government needs 18 and our sup-\nLynn U. Stambaugh, national commender of the American Legion: Bake Rose\nport DOW, and we need our Government\nMarie end Pat O'Brien, motion picture stare.\nand its protection always.\"\nThe total pledges from this one program amounted to $16,000 -\nwhich runs the total of the three broadcaste to date to $42,000. Public\nThe \"Inveet in Victory\" sketch\nresponse is mounting and the sponsors of the program have definitely\n(left) was designed by Phil YOB Phul\ndecided to continue it through several works to come.\nand Associates, who have been doing\nsplendid work for the Elng County De-\nThe Williamson Cardy Company of Chicago, m., was recently coo-\nfense Sevings Committee in the State of\ngratulated by the Treasury Department on their radio program, *Famous\nWashington. This concern also handles\nJury Triale,\" for the splendid job the company and the employees have\nposter work for the Boeing Aircraft\ndone on their Pay Roll Defense Savings Plan,\nCompany.\n19\n18\nNews Letter\nPULLIAM EMPLOYEES BUY BONDS, TOO!\nEugene C. Pulliam,\npresident of Central\nNewspapers, Inc., and\nexecutive chairman of\nthe Indiana Defense\nSavings Staff, had\nbeen so busy urging\nall firms in the State\nto co-operate in the\nPay Roll Savings Plan\nthat he had forgotten\nhis own plants until\nthe managers of his two\nradio stations and three newspapers presented him with signed applica-\ntions from 209 employees. The five plants are enrolled 100%. Shown in\nabove, (left to right), are Howard Zinn of the Huntington Herald-Press;\nJess Batterton of the Lebanon Reporter; Victor Lund of Station WAOV,\nVincennes; Howard Greenlee of the Vincennes Sun-Commercial; Gerald Al-\nbright, treasurer of Station WIRE, Indianapolis; and (seated), execu-\ntive chairman Pulliam.\nRAYMOND IS NO SISSY!\nOFFICIAL BUSINESS\nWASHINGTON, D. C.\nDEFENSE SAVINGS STAFF\nTREASURY DEPARTMENT\nEleven-year-old Raymond Bowman\nof Atlanta, Ga., who is too\nyoung to fight, but plenty big\nto launder the dishes, has con-\ntracted with his mother to wash\n$\n'em up after every meal -- at\nso much per washing -- to earn\nPAYMENT OF POSTAGE. 8300\nmoney to buy Defense Stamps.\nPENALTY FOR PRIVATE USE TO AVOID\nBesides this, he is scouring\nthe neighborhood daily for old\npapers and boxes.\n- 20 -\nRegraded Unclassified\nStock of Series E Savings Bonus on Bend\nJanuary 15, 1942 to date\n(In thousands of niecee)\n: Stock on hand :\n:\nBonds\nStock on hand\nIBM\n:\nbeginning\nSales\n:\n: manufactured\nclose of\ndeliveries\nof day\nthis day\n:\n:\nthis day\nday\nthis day\nJan.\n15\n6,569\n320\n750\n6,999\n1,000\n16\n6,999\n445\n775\n7,329\n750\n17\n7,329\n163\n800\n7,966\n1.000\n18\n7,966\nnone-closed\nnone-closed\n7,966\non\n19\n7.966\n665\n800\n8,101\neng\n20\n8,101\n218\n800\n8,683\n1,000\n21\n8,683\n337\n800\n9,146\n-T\n22\n9,146\n381\n800\n9,565\n1,100\n23\n9,565\n377\n800\n9,988\n2,000\n24\n9,988\n263\n800\n10,525\n1,00\n25\n10,525\nnone-closed\nnone-closed\n10,525\n26\n10,525\n487\n1,000\n11,038\n7,000\n27\n11,036\n186\n1,000\n11,852\n28\n11,852\n251\n1,000\n12,601\n29\n12,601\n265\n1,000\n13,336\n30\n13,336\n283\n800\n13,853\nOffice of the Secretary of the Treasury,\nJenuary 31, 1942\nDivision of Research and Statistics.\nIncludes stock in hands of (1) Federal Reserve Banks and branches, (2) Post offices,\n(3) Federal Reserve Bank issuing agents, and (4) Treasury vaults in Washington.\nRegraded Unclassified\nCONFIDENTIAL\nUnfilled Orders for Savings Bonds at the\nFederal Reserve Banks and the Post Office Department\nJanuary 15 to date\n(In thousands of pieces)\n: Unfilled\n:\n:\nUnfilled\n:\n: orders at\nNew orders\nBonds\n:\n:\norders at\nStock of\nIBM\n:\nopening of\nreceived\nmanufactured\nclose of\nbonds\ndeliveries\n:\n:\n:\n: business\n:\ntoday\n:\ntoday\nbusiness\non hand*\n:\nthis day\nJan.\n15\n550\n660\n750\n455\n231\n1,000\n16\n455\n773\n775\n426\n204\n750\n17\n426\n672\n800\n298\n204\n1,000\n18\n298\nnone-no mail\nnone-closed\n298\n204\n800\n19\n298\n204\n800\n202\n704\n825\n20\n202\n204\n800\n86\n1,184\n1,000\n21\n86\n411\n800\n59\n1,546\n875\n22\n59\n697\n800\n86\n1,676\n1,000\n23\n86\n569\n800\n50\n1,871\n1,000\n24\n50\n727\n800\n28\n1,922\n1,000\n25\n28\nnone-no mail\nnone-closed\n28\n1,922\n-\n26\n28\n490\n1,000 1/\n7\n2,011\n2,000\n27\n7\n434\n1,000 1/\n7\n2,177\n-\n28\n7\n474\n1,000\n6\n2,102\n2,000\n29\n6\n407\n1,000 2/\n8\n2,097\n#\n30\n8\n426\n800\n6\n1,869\n2,000\nOffice of the Secretary of the Treasury,\nJanuary 31, 1942\nDivision of Research and Statistics.\nBonds in Washington vaults only.\nIncludes 400 thousand pieces manufactured for inventory in the field.\nIncludes 600 thousand pieces manufactured for inventory in the field.\nRegraded Unclassified\nUNITED STATES SAVINGS BONDS\nComparative Statement of Sales During\nLast Twenty-three Business Days of January 1942 and December and November 1941\n(November 1-29, December 4-31, January 5-30)\nOn Basis of Issue Price\n(Amounts in thousands of dollars)\n:\n:\n:\nSales\nAmount\nof\nIncrease\n:\n:\n:\nPercentage of Increase\nItem\n:\n:\n:\n:\nNovember\nJanuary\n:\nDecember\n2\nJanuary\nJanuary\n:\nDecember\nDecember\n1\n:\n:\n:\nover\n:\nover\n:\nover\n:\nover\n:\n1942\n:\n1941\n:\n1941\n:\nDecember\n:\nNovember\n:\nDecember\n:\nNovember\nSeries I - Post Offices\n$142,323\n$ 97,439\n$ 37,997\n$ 44,884\n$ 59,442\n46.18\n156.4%\nSeries 1 - Banks\n469,591\n228,701\n71,478\n240,890\n157,223\n105.3\n220.0\nSeries I - Total\n611,914\n326,140\n109,475\n285,774\n216,665\n87.6\n197.9\nSeries 7 - Banks\n70.059\n30,446\n18,978\n39,613\n11,468\n130.1\n60.4\nSeries G - Banks\n286,310\n135,983\n105,035\n150,327\n30,948\n110,5\n29.5\nTotal\n$968,282\n$492,568\n$233,487\n$475,714\n$259,081\n96.6%\n111.0%\nOffice of the Secretary of the Treasury, Division of Research and Statistics.\nJanuary 31, 1942.\nSource: All figures are deposits with the Treasurer of the United States on account of proceeds\nof sales of United States savings bonds.\nNote: Figures have been rounded to nearest thousand and will not necessarily add to totals.\nRegraded Unclassifie\nDaily Sales - January, 1942\nOn Basis of Issue Price\n(In thousands of dollars)\nPost Office\nBank Bond Sales\nAll Bond Sales\nDate\nBond Sales\nSeries E\nSeries M\nSeries 7\nSeries G\nTotal\nSeries E\nSeries I\nSeries G\nTotal\nJanuary 1942\n1\n$ 3,982\n# 10,229\n$ 1,964\n$ 7.605\n$ 19,798\n$ 14,211\n$ 1,964\n$ 7,605\n$\n23.780\n2\n4,802\n10,736\n2,056\n7.779\n20,571\n15,538\n2,056\n7,779\n25,373\n3\n4,457\n9,557\n1,278\n5.453\n16,289\n14,015\n1,278\n5.453\n20,747\n5\n9,684\n26,724\n3,240\n13,704\n43,668\n36,408\n3,240\n13,704\n53.352\n6\n6,711\n7,659\n1,341\n6,778\n15,778\n14,369\n1,341\n6.778\n22,489\n7\n6,748\n21,267\n3,692\n18,832\n43,790\n28,015\n3.692\n18,832\n50.539\n8\n7.509\n21,297\n3,821\n12,871\n37,989\n28,306\n3,821\n12,871\n45,498\n9\n5.746\n12,359\n1,798\n4,765\n18,923\n18,105\n1,798\n4,765\n24,669\n10\n4,398\n16,031\n1,558\n6.355\n24,244\n20,429\n1,858\n6,355\n28,641\n12\n10,187\n37.483\n3,830\n14,353\n55.666\n47,670\n3,830\n14,353\n65,853\n13\n7,902\n15,059\n2,507\n11,944\n29,510\n22,961\n2,507\n11,944\n37,412\n14\n4,706\n19,939\n3.701\n14,293\n37.933\n24,645\n3,701\n14,293\n42,639\n15\n6,444\n16,597\n2,243\n13,283\n32,123\n23,041\n2,243\n13,283\n38,567\n16\n5,721\n26,239\n4,319\n14,078\n44,637\n31,960\n4,319\n14,078\n50,358\n17\n4,830\n6,933\n759\n3,008\n10,700\n11,763\n759\n3.008\n15,530\n19\n8,835\n39,000\n3,946\n16,599\n59,545\n47.835\n3,946\n16,599\n68,380\n20\n5,155\n10,549\n2,285\n10,551\n23,385\n15,703\n2.285\n10,551\n28,539\n21\n4,886\n19,375\n3,538\n15,566\n38,479\n24,261\n3.538\n15,566\n43.365\n22\n5,161\n22,257\n3.973\n9,850\n36,080\n27,418\n3.973\n9.850\n41,241\n23\n5,908\n23,392\n2,652\n8,004\n34,048\n29,300\n2,652\n8,004\n39,956\n24\n4,655\n15,820\n2,239\n5,344\n23,403\n20,476\n2,239\n5.344\n28,058\n26\n7,095\n39,997\n5,022\n17,516\n62,535\n47,093\n5,022\n17,516\n69,630\n27\n4,967\n11,504\n3.569\n23,125\n38,199\n16,471\n3,569\n23,125\n43,165\n28\n5,318\n18,394\n2,656\n18,636\n39,686\n23,712\n2,656\n18,636\n45.004\n29\n4,826\n20,123\n3,223\n12,422\n35,768\n24,949\n3,223\n12,422\n40,595\n30\n4,930\n21,594\n3,845\n14,432\n39,871\n26,524\n3,845\n14,432\n44,802\nTotal\n$155.565\n$500,112\n$ 75,358\n$307,147\n$882,617\n$655,677\n$ 75,358\n$307,147\n$1,038,152\nOffice of the Secretary of the Treasury, Division of Besearch and Statistics,\nJanuary 31. 1942.\nSourcet All figures are deposite with the Treasurer of the United States on account of proceeds of\nsales of United States savings bonds.\nFigures have been rounded to nearest thousand vill not pecessafily add to totals.\nRegraded Unclassified\n348\nTREASURY DEPARTMENT\nWASHINGTON\nJanuary 31, 1042.\nMEMORANDUM FOR THE SECRETARY:\nIn answer to your inquiry, through\nMiss Chauncey: Mr. S. Albert Phillips,\nwho is being appointed State Administrator\nfor Kentucky was suggested by Senator\nBarkley, as was Mr. Ben Williamson, our\nState Chairman.\nGRAVES.\n349\nIAM 1 we\nDear Eleanor:\nI know you will be glad to hear\nthat we have been able to find a place\nfor Mrs. McAdoo with our Defense Sav-\nings Staff.\nHer appointment was effective\nJanuary 22, and she will be stationed\nat Los Angeles.\nAffectionately,\n(Signed) Henry\nMrs. Franklin D. Roosevelt,\nThe White House.\nn°f\nSuret Lewier 2:30pm\nname\nRegraded Unclassified\n350\nJanuary 22, 1942.\nMrs. Kleanor Wilson McAdoo,\nLos Angeles, California.\nDear Mrs. McAdoo:\nYou are hereby appointed a Senior Defense Securities\nPromotion Specialist, CAF+12, on the Defense Savings Staff\nof the Office of the Secretary, with compensation at the\nrate of $4,600 per annum, payable from the appropriation,\n*Expenses of Loans\", Act of September 24, 1917, as Amended\nand Extended. This appointment is to be effective on date\nof entrance on duty and continue for the duration of the\nnational defense program.\nSincerely,\n(Signed) 1. Horgenthaw. in.\nSecretary of the Treasury.\nn.m.c.\nJJ.jd\nCapies to Thompson\nRegraded Unclassified\n351\nJAN 31 1942\nDear Harolds\nI want to tell you of By genuine appreciation for the\nexcellent my in which you have handled your assignment in\nsupervisory charge of the Procurement Division, the Bureau\nof Ingraving and Printing, and the Bureau of the Mint. As\nyou know, the only reason I an relieving you of this assign-\nsent is because you have taken over the arduous task of\ncarrying on the operations of the Defense Savings organi-\nsation. This in itself 10 more than a full-time job and\nits @@@@@@@ is due in no small measure to the tireless and\nable manner in which you are directing this major activity\nof the Department.\nSincerely,\n(Signed) Henry Morgenthau, Jr.\nMr. Harold 1. Graves,\nAssistant to the Secretary.\nWNT:cf\nOriginal Handed to Mr. Graver by buy.\nn.mc.\nJhompson,\nthis\nRegraded Unclassified\n152\nwar department\nWASHINGTON\nVID 029.21\nJAN 31 1942\n(1-24-42) VB\nConorable Henry Morgenthau, Jr.,\nThe Secretary of the Treasury.\nwear Menry:\nIt was extremely good of you to take the time\nfrom your busy day to interest yourself in our office space\nproblems. Because of your consideration of our needs by\nallowing the Public Buildings Administration to remain in\nyour Procurement Building, the War Department will occupy\ntemporarily Temporary Building \"I\". This will help relieve\nsume of our congestion and will very materially help in the\nwar effort.\nI take this opportunity to express to you my\nappreciation and that of the War Department.\nSincerely yours,\nThere L Sheuson\nSecretary of MR.\nRegraded Unclassified\nOFFICE OF FACTS AND FIGURES\nWASHINGTON\nJanuary 31, 1942\nDear Henry:\nThank you for your letter of January 5th. We\nhave now received replies from all of the agencies repre-\nsented on the Committee on War Information, agreeing to\nthe poster coordination plan approved by the Committee on\nDecember 29.\nI note that you have appointed Mr. Ferdinand Kuhn,\nJr., as liaison between the Treasury Department and the\nOffice of Facts and Figures. Our Graphics Division will\ncommunicate with Mr. Kuhn within the next few days with the\nview to working out with him specific plans for coordination.\nI feel sure that this cooperative machinery we are\nsetting up together will be an effective means of clearance\nand review, and will result in more effective use of war\nposters by the government.\nFaithfully yours,\nam\nArchibald MacLeish\nDirector, Office of Facts and Figures\nThe Honorable\nHenry Morgenthau, Jr.\nSecretary of the Treasury\nWashington, D.C.\nRegraded Unclassified\nTHE WHITE HOUSE\n354\nWASHINGTON\nJanuary 31, 1942\nDear Henry:\nI received the record, Civilian\nDefense Series, of the re-interpretation of\nthe Constitution,and my talk on Medical Progress\non the other side. I want to thank you very\nmuch for sending it to me.\nAffectionately,\nThank\n395\nJAN 31 1942\nMy dear Mr. Landier\nI have your letter of January 23 with reference\nto your Community Planoing and Organization Program.\nThe matters to which you refer will have our prompt\nattention and you will be further advised.\nSincerely,\n(Signed) 2. derganthaw. JE,\nSecretary of the Treasury,\nHon. James M. Landis,\nExecutive Director,\nOffice of Civilian Defense,\nWashington, D. C.\nWNTief\nPlato file\nRegraded Unclassified\nCopy to\nMagenthan\nOFFICE OF CIVILIAN DEFENSE\nWASHINGTON, D. C\n1/29/42-\nJanuary 23, 1942\nMr. Henry Morgenthau, Jr.\nSecretary of the Treasury\nDepartment of the Treasury\nWashington, D. C.\nMy dear Mr. Morgenthau:\nThe Civilian Participation Office of the Office of Civilian\nDefense is now organizing a Community Planning and Organization\nProgram Division. Although the program is not yet fully under vay I\nbelieve it would be helpful to the federal agencies to know something\nat this time of the contemplated plan of operation.\nCarrying out the executive order which established the\nOffice of Civilian Defense, the Division will serve as a center for\ncoordinating federal civilian defense activities which involve re-\nlations between the Federal Government and state and local govern-\nments in other than the field of protection from air raids and similar\nemergencies.\nIt will keep informed of problems which arise from the 1a-\npact of the industrial and military war effort upon local communities.\nIt will take necessary steps to secure the cooperation of appropriate\nfederal departments and agencies in dealing with these problems and\nin meeting the emergency needs of local communities in other than the\nprotective fields.\nIt will consider proposals, suggest plans, and promote ao-\ntivities designed to sustain the national morale and to provide op-\nportunities for constructive civilian participation in the defense\nprogram. It will review and integrate civilian defense programs of\nfederal departments and agencias involving the use of volunteer ser-\nvices in order to assure unity and balance in the application of such\nprograms. It will seek to assist state and local defense councils\nand other agencies in the organization of volunteer service unite and\nin the development of their activities in other than the protective\nfields.\nIt will review existing or proposed navures relating to or\naffecting state and local defense activities, and recomend such d-\nditional measures as may be necessary or desirable to assure adequate\ncivilian defense in terms of maintenance and strengthening of neces-\nsary community services.\nRegraded Unclassified\nHenry Morgenthan, Jr.\n-2-\nJanuary 23, 1942\nWe are now proceeding to set up our Clearing House of Infor-\nsion on state and local defense activities in our field of operation\nis cooperation with appropriate federal departments and agencies. It\nis our hope that ve may count on the cooperation of your Agency, BO\nessential if the purposes for which this office is being set up are to\nA\nfulfilled.\nAt this time ve would appreciate it very much indeed if you\nvill make available to us a list of your regular, periodic printed re-\nporte. locality and field surveys which contain information as to so-\ncial and industrial problems arising in local communities in your field\nas a result of war activities, and which my be put at the disposal of\nthe Clearing House of Information.\nMay we also have whatever material you can put at our disposal\nbearing on such problems, in your field of operation, associated with\nactivities in (1) the Hampton Roads area; (2) Detroit and the sur-\nrounding automobile industry area; (3) Spokane: (4) Fort Worth,\nYe would be glad to have you indicate such information as\nshould be considered confidential. and to return to you any material\nwhich cannot be permitted to leave your files for more than a short\ntime.\nWould you be good enough to let us know whether there is, in\naddition to the reports you are sending us, further information on these\nareas which would be of assistance to this office but which cannot be\npermitted to leave your files. If 80, could you arrange to give a mem-\nber of the staff of the Clearing House of Information access to these\nfor study in your office?\nIt would be helpful if you would let me know to whom we should\naddress future requests for material with regard to specific fields of\nyour Agency's work in other geographical areas.\nVo shall be desply grateful to you for your assistance.\nVery sincerely yours.\nJune Jamés M. Landia\nExecutive Director\nRegraded Unclassified\n358\nstocen up\nFeb. 2/9\nck with wrl to see\nthe kept 90 incoming.\n359\nJAN 31 1942\nHonorable Harold L. Ickes,\nSecretary of the Interior.\n1/y dear Mr. Secretary:\nFurther reference is made to your letter of December\n10, 1941, requesting information on the use of solld fuels\nwithin the Treasury Department.\nThe information desired by you is not et hand and I\ntake pleasure. in transmitting the completed forms showing\nthe solid fuel requirements within the Treasury Department.\nVery truly yours,\n(Signed) 2. Morgenthou. 392\nSecretary of the Transury.\nEncl.\nPhoto file #\nCopies\nRegraded Unclassified\nUNITED STATES\nDEPARTMENT OF THE INTERIOR\nOFFICE OF THE SECRETARY\nWASHINGTON\nESTIMATED CONSUMPTION AND STOCKS OF SOLID FUELS BY THE\nUNITED STATES GOVERNMENT\nBITUMINOUS COAL\nof Federal Government Department or Agency\nTreasury Department\nBituminous coal\nState or\nterritory\nEstimated consumption in calendar year 1941\nEstimated\nEstimated\nin which\nPercent delivered direct\nconsumption\nstocks on hand\nbiturinous\nto burning equipment\nin calendar\ncoal is\nNet tons\nIn carload\nIn truck or\nyear 1942\nJan. 1, 1942\n(net tons)\n(net tons)\nconsumed\nlots\nwagon\nlabama\n110\n100\n110\n45\nrisons\nrkansas\ndifornia\na.-ando\nmectiont\n22\n100\n22\n15\n:laware\nist. of Columbia\n230\n100\n210\n7\nlorida\nsorgia\niaho\nllinois\ndians\nI\nusaa\nintradige\n135\n100\n200\n010\nvisiana\n7\n100\n10\n5\ndoe\nuryland\nLohd\nimesota\n4\n100\n5\n2\nloads ppi\nLenours\neta\n13\n100\n15\n15\nbracine\nmade\nne Bespshire\n* Jorrey\n100\n290\n100\n290\nrth\nrolina\n101\n100\n104\n9\n(Continued on reverse side)\n167477\nRegraded Unclassified\nI\n91.3\nÉ\n- -\n381\nUNITED STATES\n- 2 .\nDEPARTMENT OF THE INTERIOR\nOFFICE OF THE SECRETARY\nWASHINGTON,\nBituminous coal\nState or\nEstimated\nESTIMATED CONSUMPTION AND STOCKS or SOLID FUELS BY THE\nterritory\nEstimated consumption in calendar year 1941\nconsumption\nUNITED STATES GOVERNMENT\nin which\nPercent delivered direct\nEstimated\nin calendar\nvisaks on t.\nbituminous\nto burning equipment\nCOKE\nyear 1942\ncoal is\nNet tons\nIn truck or\nJun. 1, 1%\nIn carload\n(net tons)\n(not too\nat of Federal Government Department or Agency\nconsumed\nlota\nwason\nTransury Department\nNo Requirements\nState or\nGolgi\nOhio\nterritory\nOklahoma\nin which\nEstimated consumption in calendar year 1941\nRetinated\nOregon\ncella\nPercent delivered direct\nconsumption\nEstimated\nPennsylvania\nis\nNet tons\nto burning equipment\nin calendar\nstocks on hand\nRhode Island\nconsumed\nIn carload\nIn truck or\nyear 1942\nJan. 1, 1942\nSouth Carolina\nlots\nneon\n(not tons)\n(net tons\nSouth Dakota\nbeen\nTennessee\n-\nTexas\n2588\nUtah\nVermont\nN\nComia\norado\nVirginia\nrecticut\nWashington\n19829\nWest Virginia\nto of Columbia\nWisconsin\nride\nWyoming\nrgla\nhe\nAlaska\ninois\nCanal Zone\nI land\nIsland Poss. ins\n.\nAtlantic Ocean\nSSS\nPacific Ocean\ntoday\nCaribbean Sea\nistana\nat\nfland\nTotal\nMohnsette\ndan\nesta\nissippi\nour\nuse\n4ka\npohire\nBico\nforms\nvlina\nota\n(Contimed di NRIM no)\nJOHN\n- 2\n- 2\nINTERRER you\nUNITED STATES\nDEPARTMENT OF THE INTERIOR\nOFFICE OF THE SECRETARY\nWASHINGTON\nESTIMATED CONSUMPTION AND STOCKS OF SOLID FUELS BY THE\nState or\nCoke\nUNITED STATES GOVERNMENT\nterritory\nin which\nEstimated consumption in calendar year 1941\nEstimated\nANTHRACITE COAL\ncoke\nPercent delivered direct\nconsumption\nRetimated\nis\nto burning equipment\nin calendar\nstocks on by\n-\nof Federal Government Department or Agency Treasury Department\nconsumed\nNet toos\nIn carload\nIn truck or\nyear 1942\nVan. 1, 29.2\nlots\nwagon\n(not toma)\n(net too)\nAnthrucite coal\nOhio\nOklahosa\nState or\nEstimated consumption in calendar year 1941\nEstimated\nPennsylvania\nterritory in\nEstimated\nRhode Island\nwhich\nPercent delivered direct\nconsumption\nstocks on hand\nSouth Carolina\nthracite coal\nNet tons\nto burning equipment\nin calendar\nJan. 1, 1942\nSouth Dakota\nIn carload\nIn truck or\nyear 1942\nis consumed\n(net tons)\nTennessee\nlote\nwagon\n(net tons)\nTexas\nUtah\nVermont\nLadna\nVirginia\nlifornia\nWashington\nlorado\nBurt Virginia\nnecticut\nElsoonsin\nsware\nit. of Columbia\nRyoming\nvrida\nalaska\nrgia\nhe\nCanal Zone\ninois\nTeland Poss. in:\nMana\nAtlantic Ocean\na\nPacific Ocean\nusab\nCaribbean Sea\ntucky\ndafana\nLos\n223\n100\n226\n110\nTotal\n7land\n40\n100\n20\n3.\nisachusetts\nhigan\nmasota\nadminippi\nregurl\ntana\nraska\nada\nRepshire\n'Wersey\nMexico\n147478\n(Contimed on riverse side)\nRegraded Unclassified\nTHE SECRETARY OF THE INTERIOR\nWASHINGTON\nDEC 10 1941\nState or\nAnthracite coal\nterritory in\nwhich\nRetimated consumption in calendar year 1941\nEstimated\nanthracite coal\nPercent delivered direct\nconsumption\nBatta\nMy dear Mr. Secretary:\nis consumed\nNet tons\nto burning equipment\nin calendar\nstocks\nIn earload\nIn truck or\nyear 1942\nJan. 1,\nThis is to request information on the use of solid fuels within\nlots\nwagon\n(net tonal\n(ast No\nyour Department.\nNow York\n40\nNorth Carolina\n100\nThe President, in asking M to act 48 solid fuels corrdinator\n40,\nNorth Dakota\n14\nfor national defense, specified certain daties, among which is the\nNo.\nOhio\n12th\none to obtain current data on fuel needs. In this regard, it is -\n**\n&\nsential that I have information on fuel requirements of the United\nCklahom\nStates Government which is a large user of coal in particular. A\nOregon\nsimilar request is being sent to the other Federal Agencise,\nPennsylvania\nRhode Island\nThe information reported will be tabulated to show the fuel con-\nSouth Carolina\nsumption of the Government by regions during the present calender\nSouth Dakota\nyear, stocks on hand at the end of the year, and the estimated No-\nTennessee\nquirements for 1942. Enclosed are forms upon which the data may be\nTexas\nlisted. It 1s urged that the information be submitted as promptly\nUtah\nan possible.\nVermont\n15\nVirginia\n100\n15\nIt may happen that the information to be listed in the above\nWashington\nforms is not available in your central office and its assemblage\nWest Virginia\nwill necessitate & canvase of field offices or local installations.\nWisconsin\nFor purposes of such a canvase, a special form, S.P.C. No. 4, has\nWyoming\nbeen prepared, copies of which will be furnished to your of fice upon\nrequest.\nAlaska\nCanal Zone\nI earnestly recommend that all Agencies of the United States\nIsland Poss. in,\nGovernment plan their fuel purchases to provide a comparatively large\nAtlantic Ocean\nsupply for storage purposes. Government activities must be protected\nPacific Ocean\nfrom interruptions due to temporary fuel shortages caused by disturb-\nCaribbean Sea\nances in mining and distribution.\nSincerely yours,\nTotal\nHarold Z rhes\nEnclosures.\nSecretary of the Interior.\nHon, Hanry Morgenthau, Jr.,\nSecretary of the Treasury.\nRegrad Unclassi\nTreasury Department\nDivision of Monetary Researon54\nDate 2-4-42\n19\nTo:\nMiss Chauncey\n1 think the Secretary will be in-\n-\nterested in glancing at this.\nH.D.W.\nto Dell\nto Hard\n2/5-142\nwithod already 12.\nMR. WHITE\nBranch 2058 - Room 214\nfor\n10 mg\nsurvints\nRegraded Unclassified\nTREASURY DEPARTMENT\n385\nINTER OFFICE COMMUNICATION\nDATE January 31,1947.\nTO\nSecretary Morgenthau\nFROM Mr. White\nSubject: British Tax Reserve Certificates.\nThe Chancellor of the Excheduer announced recently the\nforthcoming issue by the British Treasury c: a security which\ntermayers Tay tender for tex payments, along the lines of our\ntax anticipation notes.\nWe have just received E despatch from the American Embassy\nin London, giving further information regarding these Tax Reserve\nCertificates, which were first offered to the public on December 31,\n1941. This information can be summarized as follows:\n1. Description of the issue:\nB, Issued in units of 3 25 ($100) and multiples thereof.\nb, Sold at face value, through banks.\nC. May be tendered in payment of national income,\nexcess profits and land taxes, for taxes due from\nthe certificate holder at any time not less than\ntwo months and not more than two years from the\ndate of the certificate.\nd. If used in paying taxes, the certificates beer\ninterest at one percent per annum. Otherwise\nonly the orincipal is repaid.\nB. The interest 16 exempt from income taxes.\n2. Advantages of the new security, 38 stated by the Chancellor\nof the Exchequer, are:\na. Preventing bank deposite from being swollen by\nfunds set aside to pay taxes.\nb. Helping to smooth out the flow of revenue into\nthe Treasury.\nC. Certificates not used to pay taxes are in effect\ninterest-free loans.\n3. Press reactions were generally fovorable, although it is\nconsidered to be of technical interest rather than of fundamental\nimportance, since it will not affect inflation or the amount of\nsaving.\nOne editorial points out that the tax-exempt feature 18\nregressive in principle.\nL. Sales of tax reserve certificates between December 23 and 30\ntotalled to 16.8 million ($67.2 million), which 16 considered e good\nresponse for the Christmas holiday ABABON.\n(Embassy despatch No. 2463, London,\nDec. 29, 1941)\nRegraded Unclassified\n366\nTREASURY DEPARTMENT\nPROCUREMENT DIVISION\nOFFICE OF THE DIRECTOR\nWASHINGTON\n- 81, 1042\nto a 20 DE\nare is submitted heregits the operating report el\nnurchases for the was enned desirent 21, 1000.\n- - the 21 MAI english ACE been Alsos uson\nUL 1985 In\nif MUI, 10 result, - lobel and\nprovided\n21:6c\nto\nscotein\n- involving return emiz/4\nwe - 26311 - considerytive D tie in Promotion\nof: NOS 120 time and take the Stra with BRUT certrin\n18.\nDE grouent 109 178 lost 1.00\nthe JOE - Pluse 1 ex-\nTAC* we to tobruary ---, il completed\ncurchase notice WPLAS cells teknoo or\nto: 1-61 or =10\n100 1092 de whe\n- :\nFORDEFENSE\nBUY\n24\nUNITED\nSTATES\nSAVINGS\nBONDS\nADTAMPS\nus.\nRegraded Unclassified\n367\nOPERATING REPORT - LEND-LEASE PURCHASES\nWEEK ENDED JANUARY 31, 1942\nTOTAL ALLOCATIONS\n$825,722,879.00\nPURCHASES PREVIOUSLY\nREPORTED\n$441,863,654.57\nPURCHASES THIS WEEK\n18,261,008.97\nTOTAL PURCHASES\n$460,124,663.54\nREQUISITIONS IN PRO-\nESS OF PURCHASE\n72,133,790.03\nISITIONS IN PRO-\nCESS OF CLEARANCE BY\nHAR PRODUCTION BOARD\n88,660,412.00 620,918,865.57\nUNOBLIGATED ALLO-\nCATIONS\n$204,804,013.43\nDama\n368\nJAN 31 1942\nMy dear Mr. President:\nI an enelesing report an our exports\nto some selected countries during the week\nending January 17. 1942.\nFaithfully,\n(Signed) 1. Morganthan, Jr.\nSecretary of the Treasury\nThe President,\nThe White House.\nEnclosure\nnmc\nScaret Levin 12.30\ncapies To Dr when\n1/21/42\nto to Serge there\nRegraded Unclassified\né\n369\nJAN 31 1942\nMy dear Mr. Perkins:\nfive\nI - enclosing 5 copies of the report\nen our experts to some selected countries\nduring the week ending January 17, 1942.\nSincerely yours,\n(Signed) 1. Morgentham, 12\nSecretary of the Treasury\nMr. Mile Perkins,\nExecutive Director,\nBoard of Economic Warfare,\n2501 Que Street, N. W.,\nWashington, D. c.\nEnclesures\nn.m.c.\nBy Messenger Steen 12:31\n1/28/42\nCapital Dr w hite\nRet to Rm. 214/2\nRegraded Unclassified\n370\nJAN 31 1942\nMy dear Mr. Secretary:\nI an enclosing copy of report on our\nexperts to some selected countries during\nthe week ending January 17, 1942.\nSincerely yours,\n(Signed) E. Horgenthau, Jr.\nSecretary of the Treasury\nThe Honorable,\nThe Secretary of State,\nWashington, D. C.\nEnclosure\nn.m.c. C.\nBy Messenger Steen 2:35\nHDW:meb\n1/21/42\nRet. to Secip office\nRegraded Unclassified\n371\nJAN 31 1942\nMy dear Colonel Donovan:\nI an enclosing copy of report on\nour exports to some selected countries\nduring the week ending January 17, 1942.\nSincerely yours,\n(Signed) 1. Morganthau, Jr,\nSecretary of the Treasury\nColemel William J. Donovan,\nCoordinator,\nOffice of Coordinator of Information,\nold National Institute of Health Building,\n25th and 8 Streets, N. N.,\nWashington, D. C.\nInclesure\nnmc.\nHDWsmoh\nBy Steen 12:35\nMessenger\n1/21/42\nCopies TN white's office\nRet. to Secip office\nRegraded Unclassified\nJanuary 28, 1942\nExports to Russis, Chine, Burse, Hong Kong, Japan\nFrence and other blooked countries, as reported to\nthe Treasury Department during the week ending\nJanuary 17. 1942.\n1. Exports to Russia\nExports to Russia AS reported to the Treasury during the\nweek ending January 17, 1942 smounted to about $5,800,000.\nThe chief items were motor trucks and cheseis and landplanes.\n(See Appendix G.)\n2. Exports to China, Burne and Hong Kong\nExports to Free Ohine amounted to about $1,700,000, of\nwhich printed matter and motor trucks end chaseis accounted\nfor nearly rifty persent. (See Appendix D.) Exports to Burne\namounted to $447,000. (See Appendix %.)\nNo exports to Occupied China or Hong Kong were reported\nduring the week under review.\n3. Exports to Japan\nBe exporte to Japan were reported during the week under\nreview.\n4. Exports to France\nNo exports to France were recorted during the week ending\nJanuary 17, 1942.\n5. Exports to other blocked countries\nExports to other blocked countries Are given in Appendix A.\nRegraded Unclassified\n373\nSUMMARY OF UNITED STATES\nDOMESTIC EXPORTS TO SELECTED COUNTRIES\nAS REPORTED TO THE TREASURY DEPARTMENT\nFROM EXPORT DECLARATIONS RESERVED\nDURING THE PERIOD INDICATED 2/\nJuly 26, 1941 to Junuary 17, 1962\n(In thrusands of dollars)\nJuly 28\n3\nResk endad\nYork ended\nTotal\nJan, 3\nJanuary 10\nIssues 17\nDemarks\nU. 5. 3. B.\n$80,548\n$ 8,267\n8 5,874\n$94,660\nIree China\n28,369\n91\n1,695\n30,155\nBurns 21\n7,002\n1,073\nw\n8,522\nFrance 2/\n6\n-\n-\n6\nOccupied Frence\n2\n-\n-\n2\nUncorspied Transe\n14\n-\n-\n+4\nSpada\n2,329\n-\n,\n2,334\nSwiteerland\n5,061\n11\n207\n5,279\nSnales\n11,515\n1\nw\n11,516\nPortugal\n4,488\n155\n824\n5,467\nTreasury Department, Division of Nonetary Research\nJunuary 21, 1942.\n2/ Many of the export declarations are received with 8 lag of coveral days or serv.\nTherefere this empilation dass net accurately represent the actual shipment of\n& particular week. The leager the period covered, the cleser will these figures\n- to Department of Commerce revised figures.\n2/ Prom September 11, 1941 to date - it is premed that a Large percentage of\nnaterial listed here, consigned to purma, is destined for Free China.\n2 Includes both Compled and @seempded Prence through week enting Detober 4. 1941.\nOccupied and Unscorpied France separated thereafter.\nw Less them 8500.\nJiffillef 1/21/42\nRegraded Unclassified\nExports from the U.S. to China, Burma, Hong Kong, Japen and U.S.S.R.\nas reported to the Treasury Department, July 28, 1941 - January 17,1942.\n(Thousands of Dollars) 1\nExports to China\nTotal\nTo Japanese\nTo\nChinese\nExports\nExports\nExports\nExports\ncontrolled\ncontrolled\nto\nto\nto\nto\nports\nporte\nBurna\n3/\nMong Kong\nJapan\nU.S.S.R.\nJuly 28 - Aug. 2\n937\n542\n395\n654\n1,657\n4,523\nAug. 4 - Aug. q\n2,796\n2,794\n-\n983\n159\n554\nAug. 11 - Aug. 16\n1,278\n969\n309\n235\n42\n986\nAug. 18 - AUG. 23\n1,352\n1,350\n2\n234\n6\n2,735\nAug. 25 - Aug. 30\n736\n735\n1\n742\n-\n1,023\nSept. 2 - Sept. 6\n897\n693\n204\n634\n-\n4,260\nSept. 8 - Sept.13\n3,038\n3,978\nI\n757\n2,281\n456\n-\n5,217\nSept.15 - Sept.20\n156\n3,822\n389\n-\n752\nSept.22 - Sept.27\n462\n352\n110\n449\n810\n-\n2,333\nSept.29 - Det. 4\n1,305\nso\n1,225\n684\n297\n-\n323\nCet. 6 - Cet. 11\n5,864\n552\n5,312\n1,157\n1,233\n-\n6,845\nDet. 13 - Ost. 18\n272\n267\n5\n35\n584\n-\n1,924\nOct. 20 - Ost. 25\n668\n399\n269\n403\n1,243\n-\n5,623\nDet. 27 - Nov. 1\n5,210\n438\n4,772\n58\n624\n-\n3,454\nNov. 3 - Nov. 5\n1,836\n164\n1,672\n342\n283\n5\n4,552\nNov. 10 - Nov. 15\n3,009\n158\n2,851\n88\n303\n-\n2,677\nNov. 17 - Nov. 22\n1,701\n473\n1,228\n1,021\n600\n-\n3,581\nNov. 24 - Nov. 29\n3,359\n120\n3,239\n1,364\n1,325\n-\n2,436\nDec. 1 - Dec. 6\n852\n61\n791\n64\n-\n-\n3,609\nDec. 8 - Dec. 13\n3,025\n688\n2,337\n18\n-\n-\n12,040\nDec. 15 - Dec. 20\n123\n12\n111\n8\n-\n-\n4,580\nDec. 22 - Dec. 27\n37\n36\n1\n196\n-\n-\n1,829\nDec. 29 - Jam. 3\n35\n*\n35\n2\n-\n-\n3,993\nJan. 5 - Jun. 10\n91\n-\n91\n1,073\n-\n-\n8,277\nJan. 12 - Jan. 17\n1,695\n1,695\n447\n-\n-\n5,874\n44,554\n11,796\n32,758\n7,409\n11,629\n1,869\n95,017\n1.These figures are in part taken from copies of shipping manifests.\n2.7igures for exports to Free Ohine during the se weeks include exports to Rangoom which are\npresured to be destined for Free China.\n374\n3.1t is presured that 4 large percentage of exporte to Burma are destined for Free China.\nTreasury Department, Division of Monetary Research\nJanuary 23,1942\nRegraded Unclassified\n375\nAPPENDIX C\nPrincipal Exports from U.S. to U.S.S.R.\nno reported to the Treasury Department\nduring the week ending January 17. 1942.\n(Thousands of Dollars)\nTOTAL EXPORTO\n1 5,874\nPrincipal Items:\nNotor trucks and changis\n1,101\nLandplanes, powered\n1,029\nMolybdenum are and consentrate\n638\nWilitary tanks\n480\nRefined copper\n195\nMen's beets and shoes\n164\nEthyl fluid\n158\nInsulated copper wire\n155\nAluminus plates, sheets, Dara, strips\nand rode\n153\nDrilling machines\n146\nAircraft engines\n116\nBrass and bronse plates and sheets\n117\nRelief supplies - clothing\n111\nAir oreft parts and mecessories,n.e.s.\n110\nEngine Inthes\n110\nOther lathes\n96\nTreasury Department, Division of Nometary Research Jenuary 26,1942\nRegraded Unclassified\n376\nAPPENDIX D\nPrincipal Experts from U.S. to Free Ohine\nas reported to the Treasury Department\nduring the week ending Jenuary 17. 1942.\n(Thousands of Dollars)\nTOTAL EXPORTS TO FREE CHINA\n5 1,695\nFrincipal Items:\nPrinted matter\n561\nNotor trucks and chassie\n243\nSO\nInk\nAuto replacement Darts\n76\nRelief supplies - hospital\n$\nTires and tubes\n60\nConper wire (bare)\n50\n45\nwheels\nAireraft instruments and parts of\n36\n32\nsteel bars\n27\nHand tools\nTreasury Department, Division of Monetary Recearch January 23,1942\nRegraded Unclassified\n377\nAPPENDIX E\nFrincipal Exports from U.S. to Burna\n\" reported to the Treasury Department\nduring the work ending January 17,1942.\n(Thousands of Dellare)\nTOTAL EXPORTS\n$ 447\nPrincipal Items:\nMotor trucke and chessis\n133\nAutomobiles\n6\nProprietary medicinal preparetions\n&\nAuto replacement parts\n34\nIron and steel sheets\n19\nEvaporated milk\n11\nPetroleum and gas well-drilling\napparatus and perts\n9\nWatel-grinding machines and parte\n9\nTypewriters and parts\ns\nCotton piece goods\ne\nIndustrial chewicels\n6\nDried skimmed milk\nUPS\n5\nCotton cenver articles\n5\nTreasury Department, Division of Monetary Research\nJenuary 26,1942\nISF/efe\n1/26/42\nRegraded Unclassified\n378\nJunuary 31, 1942\nMr. Livesey\nMr. Dictrich\nwill you please send the attached cable to the American Commissioner\nat Delhi, India for transmission to Consul at Karashi, for Fox from the\nSecretary of the frensury.\"\nFDich\nRegraded Unclassified\n379\nJanuary 31, 1942\nAmerican Commissioner,\nDelhi, India.\nFor transmission to Consul at Karachi.\nFOR FOX FROM THE SECRETARY OF THE TREASURY:\nRegret very much that you are delayed and we are\ntrying to expedite your journey. Because of the urgency\nof the matter we feel we must proceed with the negoti-\nations and therefore would appreciate very much if you\nwould cable us 8.8 much as you feel can be cabled of the\nGeneralissimo's views and opinions.\nKSF/efs\n1/31/42\nRegraded Unclassified\n330\nTEL GRAM SENT\nHRL\nJanuary 31, 1942\nThis telegram must bE\nparaphrestd before being\n7 p.m.\ncommunicated to anyonE\nother than A Governmental\nagency. (BR)\nAMERICAN COMMISSIONER,\nNEW DELHI (INDIA).\n21\nFor transmission to Consul At Kerachi.\nFOR FOX FROM THE 85CFSTARY OF THE TREASURY.\nRegret very much that you are delayed and WE are\ntrying to expedite your journey. BECAUSE of the urgenoy\nof the metter WE fEEl WE must prooted with the nEgotistions\nend therefore would sporeciate very much if you would\ncable us °B much 28 you feel can be cabled of the\nGeneralissimo's views And opinions.\nHULL\n(FL)\nFD:FL:BNcP\nRegraded Unclassified\nTEBEGRAM SENT\n381\nJanuary 31, 1942\nHRI\nThis telegrom must be\n7 n.m.\npersphrased before being\ncommunicated t.o anyone\nother then a Governmental\nagency. (BR)\nAMERICAN CONSUL,\nCALCUTTA (INDIA).\n26\nTO CONSUL GENERAL SECRETARY OF THE TREASURY.\nQUOTE. Hewlett, Secretary to Mr. Fox, American\nmimber of the Chinese Stabilization Board, has recently\narrived in Colcutta from Chungking for medical treatment.\nPlease transmit following message to HE and confirm\nto us that Heylett has received it:\nINNER QUOTE. Henlett from the Secretary of the\nTressury:\nAll cossible sters heing taken here to arrange\nfor your passage home by clinner. It. is advisable that\nyou st.ay in Calcutta until the necessary arrangements\nhave been made for your return home. BID DIER CUOTE.\nEND QUOTE.\nHITL\n(FI)\nFD:FI:ENcB\nCony:bj;2-2-42\nCopy dmh - 2-7-42\nRegraded Unclassified\n382\nJAN 27 1942\nw dear Mr. Secretary:\nMr. A. N. Fox, the American member of the\nStabilization heard of China, has informed no by\ncable that his secretary, Mr. Herbert Hewlett, is\nill and should return to the Faited States for\ntreatment. will you be good enough to make the\nnecessary arrangements for his transportation back\nto the United States.\nI understand that Mr. Newlett is visiting\nCalcutta January 29 for & supply of medicine -\nebtainable in China, and for a thorough examination.\nIf the State Department advises us that it is desirable\nfor Mr. Newlett to renain in Calentia mtil return\ntransportation is arranged, we will cable his to this\neffect.\nVery truly yours,\n(Signed) 1. Mergenthaus 12.\nSecretary of the Treasury\nThe Memorable\nThe Secretary of State\nBy Messenger Sturgls 5:30\ncc.n.M.C.\nVFC:INF:iem\n1/22/42.\nRet to Deajs office\nRegraded Unclassified\n383\nJanuary 31. 1948\nMr. Livesey\nMr. Districh\nwill you please send the attached cable to the United States Consul\nGeneral, Calcutta, India.\nRegraded Unclassified\n384\nJanuary 31, 1942\nU. S. Consul General,\nCalcutta, India.\nTO CONSUL GENERAL FROM SECRETARY OF THE TREASURY:\nHewlett, Secretary to Mr. Fox, American member of the\nChinese Stabilization Board, has recently arrived in Calcutta\nfrom Chungking for medical treatment. Please transmit fol-\nlowing message to him and confirm to us that Hewlett has\nreceived it:\n\"Hewlett from the Secretary of the Treasury:\nAll possible steps being taken here to arrange\nfor your passage home by clipper. It is advisable that\nyou stay in Calcutta until the necessary arrangements\nhave been made for your return home.\"\nISF:gp\n1/31/42\n385\nTELEGRAM SENT\nHRL\nJanuary 31, 1942\nThis telegram must bE\nparaphresed before being\n7 p.m.\ncommunicated to anyone\nother than A Governmental\nagency. (BR)\nAMERICAN CONSUL,\nCALCUTTA (INDIA).\n26\nTO CONSUL GENERAL FROM SECRETABY OF THE treasury.\nQUOTE. Hewlett, Secretary to Mr. Fox, American\nzember of the Chinese Stabilization Board, hes recently\narrived in Calcutta from Chungking for medical treatment.\nPlease trensmit following meserge to him and confirm\nto us that, HEWlett has received it:\nINNER QUOTE. HEwlett from the Secretary of the\nTreasury:\nAll possible steps bEing taken here to arrange\nfor your passage home by clipper. It 18 advisable that\nyou etay in Calcutta until the necessary arrangEmEnts\nhave been mpde for your return home. END INNER QUOTE.\nEND QUOTE.\nHULL\n(FL)\nFD:FL:EMcB\nRegraded Unclassified\nC\no\n386\nSAFE HAND\nBRITISH EMBASSY,\n1030/AA/6/42\nWASHINGTON, D.C.\n31st January, 1942\nDanr Xr. Dietrich,\nWith reference to my letter V.T. 1029/AL/2/42 of 19th\nJenuary about freezing mensures in the countries of the Weet\nCoast of South America, I am now able to sive you B few further\nitems of information which we have received from the same source.\nColombia\nThe German compensation funds which were \"technically\"\nbut not physically blocked some time 86° are said to have amounted\nto some 8 to 9 million Desos. The Banco de la Republice had a\nlist of all German credite in compensation account but did not\ncollect them ani hold then under their jurisdiction. In the\nmeantime, German agents approached the Colombian importers who\nheld these credits and offered them exceptional and favourable\nterms under which they could pay their debts to Germany, at the\nsame time giving them proofe that the German Government at the\nend of the var would maise no further claima against them. It is\nnot known to what extent funis were octually paid to the Germans,\nbut it is naturally hoped that effective messures will be taken\nto see that whatever funds are still in German hands ere blocked\nin the reel sense in the Banco de la Regublica.\nAs regards the Banco Aleman Antioemono, certain\nColombians have for a considerable time been studying the\npossibility of opening E new Colombian bank in Redellin.\nThe Banco Frances e Italiano is said to be losing ground\nvery repidly in Colombia and evidence that it is worried about its\ndeposits is shown by the fact that credit terms at special retes\nare being offered. In this connection I have just heart that the\nposition of the Banco Frances e Italiano in Santiago is believed\nto be even more acute than that of the branch in Bogote, due to\nthe withdrawal of deposits and the impossibility of contacts\nabroad. There are rumours that the bank is about to close its\ndoors and will probably be finally liquidated somewhere around\nSeptember.\nRegraded Unclassified\n387\n-2-\nThe Vichy Government is understood to be endeavouring\nto procure payment of French debts to their Minister in Colombia,\nas ve have heard that they are also doing in Venezuela and\nEcuador.\nEcuador\nNo measures with regard to German and Italian funds\nhave been taken BE yet. German compensation funds at the begin-\nning of the war amounted to 11 million sucres which were held by\n\"Le Provisors\" Banco Macional de Credito, the biggest bank in\nEcuador. I take this opportunity of sending 2. copy of a memorandum\nregarding this bank which I have already sent to Mr. Pehle and Mr.\nHiss.\nItalian funds are at a low ebb and it is said that the\nItalian Legation were unable to pay their servants for one month\nuntil the Banco Italiano-Limn came to the rescue with a loan.\nThe Italian Consul at Quito has weekly meetings with his nationals\nin order to raise loans.\nBolivia\nWith regard to freezing mensures in Bolivia, I would\nlike to draw your special attention to our Memorandum JIN. 409/42\nof 28th January.\nYours sincerely,\n(sgd) 3. V. Palin\nRegraded Unclassified\n388\nLA PREVISORA BANCO NACIONAL DE CREDITO\n\"Le Previsora\" Banco Nacional deCredito is the official agent for\nthe Deutache Sudamerikanische Bank of Hamburg and Berlin. It is the only bank\nin Ecuador which effects cable transfers of askinarks, and it should be noted\nthat although the amount of this compensation exchange available has for some\ntime been exhausted owing to the complete absence of exportation, La Previsora\nstill continues to negotiate in askimarks in any quantity however large.\nThe pro-Nazi propaganda carried on by the directors of La Previsora\nis well known, and more especially that of its General Manager, Senor Victor\nSmilio Estrada who is often to be seen in the afternoons in conference with the\nGerman Consul, Mr. Bruckmenn in the latter's office in the Malecon.\nThe travelling representative of the International Harvester Export\nCompany of New York, Mr. Roland G. Kriser stated in Gueyscuil that the principal\nmotive for withdrawing the agency which 1:1s company had entrusted to Sr. Enrique\nGellardo, son-in-lew of Sr. Estrada, was that all the concerns in the control of\nSr. Estrada and of the Previsora were Razi 1л complexion. At a summtuous dinner\nwhich Sr. Estrada gave to Mr. Kaiser, the former expressed the wish that the\nagency should be transferred to one of the many concerns of which he is principal\nshareholder on the score of Previsore investments. Mr. Eniser, however, flatly\nrefused and gave the representation to Mr. Augusto Dillon, Manager of the Italian\nBank of Guayaquil.\nMany United States and United Kingdom companies are avoiding the ser-\nvices of La Previsors and are collecting through the Banco de Descuento and the\nBank of London and South America.\nThe following firms ore under the control of Sr. Victor Estrada,\nGeneral Manager of the Previsors, and he is the principal shareholder in eacht\nCommanie General de Comercio y Mandato S.A.\nAgencies and importers\nCompania General de Construcciones S.A.\nBuilding construction and importers of materials\nDistribuidora de Autos S.A.\nAgents for Ford, Mercury, Lincoln and Packard calls\nThe Guayaquil Bottling Company S.A.\nBottlers of Coca-Cole and importers of assences.\nJ. E. Estrada & Co.\nGeneral importers\nI. Ballardo\nSr. Gallardo is Sr. Estrada's son-in-law and immorts\ngeneral merchandise.\nCompania Radiofusora del Ecundor S.A.\nEstablished by Sr. Estroda who owne 80 of the shares.\n9th Jsn./42\nRVF:OSB\nCopy:bj:1c:2-2-42\nRegraded Unclassified\nu FEBYISORA BANCO NACIONAL DE CREDITO\n389\n\"La Provisers\" Banco Nacional deCredito is the official agent for\nthe Deutsche Sudamerikanische Bank of Hamburg and Borlin. It is the only bank\nin Reunder which effects sable transfers of askimarks, and it should be noted\nthat although the amount of this compensation exchange available has for some\ntime been exhausted owing to the complete absense of exportation, Le Provisors\netill continues to negotiate in askimarks in any quantity however large.\nThe pro-Nasi propeganda sarried on by the directors of La Previsers\nis well known. and more especially that of its General Manager, Senor Vistor\nMmillo Estrada who is often to be seen in the afternoons in sonference with the\nGerman Consul. Mr. Bruckmann in the latter's office in the Malecom.\nThe travelling representative of the International Harvester Export\nCompany of New York, Mr. Roland 0. Katser stated in Quayaquil that the principal\nmotive for withdrawing the agency which his company had satrusted to Sr. Enrique\nGallarde, som-in-law of Br. Estrada, was that mil the concerns in the control of\nSr. Estrada and of the Provisore were Vasi is complexion. At a sumptuous disner\nwhich Sr. Estrada gave to Mr. Kaiser, the former expressed the wish that the\nagency should be transferred to one of the easy concerns of which he is principal\nshareholder on the seore of Previsors investments. Mr. Kaiser, however, flatly\nrefused and gave the representation to Mr. Augusto Dillon, Manager of the Italian\nBank of Quayaquil.\nMany United States and United Kingdom companies are avoiding the 047-\nvisas of La Previsors and are sellecting through the Banco de Descuents and the\nBank of London and South America.\nThe following firms are under the control of Sr. Victor Estrada,\nGeneral Manager of the Provisora, and he is the principal shareholder in each:\nCompania General de Comercio y Mendato S.A.\nAgencies and importers\nCompania General de Construcciones B.A.\nBuilding construction and importers of materials\nDistribuidora de Autos S.A.\nAgente for Ford, Mercury, Lincoln and Packard care\nThe Quayaquil Bottling Company S.A.\nBettlers of Coca-Cola and importers of sasences.\nJ. 1. Retrada & Go.\nGeneral importers\n1. Callardo\n57. Gallardo is Sr. Setroda's son-in-lax and imports\ngeneral merchandise.\nCompania Madiofmsora del Equador S.A.\nNotablished by Sr. Estrada who owne 80% of the shares.\n9th Jan./42\nRVP:OSB\nCopy:bj:1a:2-2-42\nRegraded Unclassified\nC\n0\nP\n390\nY\nPD\nGRAY\nRio de Janeiro\nDated January 31, 1942\nRec'd 7:45 p.m.\nSecretary of State,\nWashington.\n311, January 31, 5 p.m.\nI recommend inclusion in Proclaimed List of Centro\nde Mel, Porto Alegre, name under which Lang and Cia, a\nlisted firm, also does business.\nCAFFERY\nLMS\n0opy:ec:2-3-42\nRegraded Unclassified\nC\n0\nP\n391\nY\nDEPARTMENT OF STATE\nWASHINGTON\nJanuary 31, 1942\nIn reply refer to\nIf 840.51 Frozen Credits/5210\nThe Secretary of State presents his compliments to\nthe Honorable the Secretary of the Treasury and transmits\na copy of air mail despatch no. 882 of January 26, 1942\nfrom the American Legation at Ciudad Trujillo, concerning\nfreezing control provisions instituted by the Dominican\nGovernment since December 8, 1941.\nEnclosure:\nFrom Ciudad Trujillo,\nno. 882, January 26,\n1942.\nCopy:ec:2-2-42\nC\no\nP\n392\nY\nNo. 882\nCiudad Trujillo, D. R., January 26, 1942.\nSubject: Freezing Control Provisions in the\nDominican Republic.\nThe Honorable\nThe Secretary of State,\nWashington, D. C.\nSir:\nI have the honor to refer to the Department's\ncircular telegram of January 24 - 4 p.m. and the Lega-\ntion's telegraphic reply no. 20 of January 26 concern-\ning freezing control provisions instituted by the Do-\nminican Government since December 8.\nThe measures reported in the Legation's despatches\nnos. 814 of December 12 and 828 of December 18 continue\nin effect, and the three banks operating in the Domin-\nican Republic are adhering closely to the regulations\nlaid down by the Dominican Secretary of State for the\nTreasury\n393\n- 2 -\nTreasury on December 16, as reported in despatch no, 828,\nThe Secretary of the Treasury has fixed a limit of $1000,\nup to which amount enemy aliens may make withdrawals from\nbanks in the Dominican Republic at the discretion of the\nbanks. Sums over that amount must receive the authoriza-\ntion of the Department of the Treasury.\nAll local banks have informed the Legation that they\nare giving particular attention to accounts held by enemy\naliens and that they are prepared to deny the right of\nwithdrawal of funds to any enemy alien at any time if not\nsatisfied that the purpose for which the funds are to be\nused is legitimate.\nThe Dominican Department of State has authorized the\nBanco de Reservas and the Royal Bank of Canada to permit\nwithdrawal of sums up to $5000 by the Compania Exportado-\nra of Puerto Plata, in which an Italian holds a large\ninterest, to enable the company to continue its normal\nbusiness. The Banco de Reservas, which is managed by\nAmerican citizens, is continuing to watch these with-\ndrawals carefully, as is the Royal Bank of Canada.\nThe public suspect list mentioned in the Executive\nDecree of December 16 has not yet been issued. In the\nmeantime, in accordance with the policy adhered to prior\nto\nRegraded Unclassified\n394\n- 3 -\nto the entry of the Dominican Republic into the war, the\nBanco de Reservas holds no accounts and does no business\nwith firms and individuals on the American Proclaimed List,\nThe other two banks in the country - the Royal Bank of\nCanada and the Bank of Nova Scotia - follow the same\npolicy as concerns persons and firms on both the British\nStatutory List and the American Proclaimed List.\nThe banks are aware of the fact that this policy\npermits greater freedom of action to firms on the Pro-\nclaimed List than to enemy aliens not considered suspicious.\nThey anticipate that the Committee whose appointment was\nreported in despatch no. 862 of January 13 will meet\nshortly after the return of the Foreign Minister from\nRio de Janeiro with a view to considering what appropriate\naction might be taken on this matter. The Committee also\nexpects Senor Despradel to bring back from Rio information\non action taken by other American republics on this subject,\nand it may attempt to incorporate into the Dominican\nregulations measures taken by other countries which are\napplicable here.\nRespectfully yours,\nROBERT M. SCOTTEN\n851\n1(B:vmmm\nA true copy of\nthe signed origi-\nnal.\nVM\nCopy:ec:2-2-42\nRegraded Unclassified\nC\n0\nP\n395\nY\nDEPARTMENT OF STATE\nWASHINGTON\nIn reply refer to\nFF 840.51 Frozen Credits/5211\nJanuary 31, 1942\nThe Secretary of State presents his compliments\nto the Honorable the Secretary of the Treasury and\ntransmits herewith a copy of air mail despatch no. 3346\nof January 27, 1942 from the American Embassy at Habana,\nconcerning freezing control measures which have been\ninstituted by the Cuban Government since December 8,\n1941.\nEnclosure:\nFrom Habana, no. 3346,\nJanuary 27, 1942.\n396\nNo. 3346\nHabana, January 27, 1942\nAIR MAIL\n(Freezing control measures adopted by the Cuban Government-\nSubject: (Department's circular telegram dated January 24, 1942, 4 p.m.\nThe Honorable\nThe Secretary of State,\nWashington, D.C.\nSir:\nI have the honor to refer to the Department's circular telegram\nof January 24, 1942, 4 p.m., requesting the Embassy to submit by air\nmail B. report on the freesing control measures which have been in-\nstituted by the Cuban Government and on the actual application of such\nmeasures at the present time, and to inform the Department by telegram\nof the numbers and dates of any despatches or telegrams submitted in\nthe subject matter since December 8, 1941.\nIn reply. the Embassy telegraphed the Department today, listing\ndespatches No. 3119 of December 16, 1941, No. 3143 of December 18, 1941,\nNo. 3148 of December 18, 1941, and No. 3188 of December 27, 1941, which\ncontain full data on all the important measures enacted by the Cuban\nGovernment since December 8, 1941, in respect of the freezing of the\nfunds of enemy aliens.\nWith regard to the application of these measures in Cuba, no hard\nand fast rules and regulations have as yet been established, but Mr.\nManuel Perez Benitoa, the Enemy Property Custodian, has assured the\nEmbassy that it is his intention in respect thereof to follow as closely\nas possible the policies of our Government. Enemy aliens who have de-\nposits in local banks or who own other property here, are being authorized\nto withdraw at periodic intervals sufficient funds for their living expenses.\nBanks receiving payments from abroad in favor of enemy aliens are\nauthorized to accept such remittances provided the proceeds are deposited\nin blocked accounts in favor of the beneficiaries, who must then look\nto the Enemy Property Custodian for authorization to make withdrawals from\nsuch accounts.\nWith regard to properties owned or controlled by enemy aliens not\nresiding in Cuba, as well as by enemy aliens who have been interned, or\nwho for other reasons are unable to administer their properties, the Enery\nProperty Custodian is appointing supervisors who will administer such\nproperties as long an the existing situation endures. A case in point\nis the \"Aevos\" razor blade factory which is owned or controlled by Mr.\nEugen Hoppe, a German national whose name is included in our Proclaimed\nList. Mr. Perez Benitoa has appointed a supervisor who will direct the\noperations of this factory, and he proposes to do likewise in the case of\nother business establishments or properties with respect to which a similar\nsituation exists.\n397\n-2-\nMr. Perez Benitoa has informed the Embassy that he has been\ncooperating closely with the British Legation and the Canadian Trade\nCommissioner, and the Embassy and the Consulate Genoral have likewise\nbeen rendering him every possible assistance. The Embassy hopes\nthat Mr. Perez Benitoa will continue to cooperate with it and with\nthe Consulate General, especially in view of his avowed intention, in\napplying the freezing control measures adopted by the Cuban Government,\nto follow as closely as possible the system adopted by our Government.\nIt is assumed that as soon as Mr. Perez Benitoa's office has been\nfully organized some definite system embodying all phases of Cuba's\nfreezing control measures will be worked out, and the Embassy will keep\nthe Department informed of further developments with regard thereto.\nRespectfully yours,\nFor the Ambassador:\nEllis O. Briggs\nFirst Secretary of Embassy\nFile No. 820\nAFN/ed\nA true copy of\nthe signed orig-\ninal. (I) cd\nCopy : bj 2-2-42\nC\n398\n0\nP\nY\nMEV\nPLAIN\nIstanbul\nDated January 31, 1942\nRec'd 8:12 a.m.\nSecretary of State,\nWashington.\n24, thirty-first.\nSermet Djadjouli Albanian national independent\nAlbania formerly Consul General in Yugoslavia resi-\ndent in Turkey since July 1939 has requested assis-\ntance in obtaining Treasury authorization to withdraw\nfor current expenses $3000 from his account with the\nCredit Suisse New York. Djadjouli is well known in\nindependent Albanian circles and it is suggested\nthat withdrawals when requested be given favorable\nconsideration.\nHONAKER\nRR\nCopy:bj:2-5-42\nRegraded Unclassified\n399\nC\n0\nP\nY\nXD\nThis telegram must be\nCairo\nparaphrased before being\ncommunicated to anyone\nDated January 31, 1942\nother than a Governmental\nagency. (BR)\nRec'd. 12:01 p.m.\nSecretary of State,\nWashington.\n178, January 31, 9 p. m.\nThe press reports that the Council of Ministers has\napproved the draft of the 1942-1943 State Budget but thus\nfar the explanatory note embodied in the draft is not\navailable to the Legation. Revenues are estimated at\nEgyptian pounds 52,000,000 and expenditures Egyptian\npounds. 53,500,000, the deficit to be taken from the reserve\nfund which in April, 1941, amounted to Egyptian pounds\n28,960,363 of which Egyptian pounds 16,533,292 was free\n(Reference my despatch no. 148, December 5. 1941).\nKIRK\nRDS\nCopy:1c:2/3/42\nRegraded Unclassified\nC\nO\nP\nDEPARTMENT OF STATE\n400\nY\nWashington\nIn reply refer to\nJanuary 31, 1942\nFF 840.51 Frozen Credits/5069\nThe Secretary of State presents his compliments\nto the Honorable the Secretary of the Treasury and,\nreferring to aletter dated January 16, 1942 to the\nSecretary of State from Mr. J. W. Pehle, Assistant to\nthe Secretary of the Treasury, transmits copies of telegram\nno. 5. dated January 23, 1942 to Sts Pierre, concerning\ncertain payments to be made by the Western Union Telegraph\nCompany and the Marden Wild Corporation.\nEnclosure:\nCopies of telegrem no. 5,\ndated January 23, 1942 to\nSt. Pierre.\neh:copy\n2-2-42\nRegraded Unclassified\nTELEGRAM SENT\n401\nLM\nThis telegram must be\nJanuary 23, 1942\nparaphrased before being\n6 p.m.\ncommunicated to anyone\nother than a Governmental\nagency. (BR)\nAMERICAN CONSUL,\nST. PIERRE-MIQUELON.\n5.\nYour January 3, 1942.\nDepartment has discussed your telegram with the\nTreasury Department. Payments by Western Union Telegraph\nCompany and Marden Wild Corporation should be made into the\nspecial free accounts of Banque Pierre Andrieux with Bank\nof Nova Scotia, New York, or with the French-Americen\nBanking Corporation, New York, or into the special free\naccount of the Banque des Iles with the Guaranty Trust\nCompany, New York.\nHULL\n(DA)\n840.51 Frozen Credits/5069\nFF:ASF:LM\nBu\nA-A\neh:copy 2-2-42\nTREASURY DEPARTMENT\n483\nINTER-OFFICE COMMUNICATION\nDATE January n, 1942\nTO\nSecretary orgenthau\nCONFIDENTIAL\nFROM -I. Dietrich\nRegistered sterling transactions of the reporting banks were as follows:\nSold to commercial concerns\n12,000\nPurchased from comprcial concerns\n2 8,000\nOpen market sterling held stendy at 4,03-1/2, and there were no reported\n(rangections.\nContinuing its improvement, the Cuban 2830 was offered at a premium of\n16 against the dollar. Until January 27, the peso had been quoted approxi-\nmately at par,\nIn let York, closing quotations for the foreign currencies listed below\nwere as follows:\nCanadian dollar\n11-5/89 discount\nArgentine peso (free)\n,2360\nBrazilian milreis (free)\n.0516\nColombian peso\n.5775\nexican peso\n.2065\nruguayan pego (free)\n.5250\nVenezuelan bolivar\n.2720\nTe solo 3,000,000 in 8016 to the Bank of Portugal, which was added to\nits empmarked account. An additional 57,000, 00 in gold will be cale to that\nbank on Monday.\nlo new gold engagements were reported.\nAs WELS the case in December 1941, we mace no purchases of silver during\nthe month of January.\nA\nRegraded Unclassified\n403\nBRITISH EMBASSY\nWASHINGTON, D.C.\n31st January, 1942.\nPERSONAL AND SECRET\nDear Mr. Secretary,\nI enclose herein for your\npersonal and secret information a copy\nof the latest report received from\nLondon on the military situation.\nBelieve me,\nDear Mr. Secretary,\nVery sincerely yours,\n(For the Ambassador)\nR.I. Ca-pbell\nThe Honourable\nHenry Morgenthau, Jr\nUnited States Treasury,\nWashington, D.C.\nRegraded Unclassified\n401\nCopy No.\nBRITISH HOST SECRET\n(U.S. SECRET)\nONTEL No. 35\nInformation received up to 7 And,, 29th January, 1942.\n1, NAVAL\n28th/29th, Enemy coastal battories ineffectively shelled a Channel\nconvoy off DOVER.\n22nd, A small merchant ship mas sunk by gunfire from a U-boat 120\nmiles southwest of RANGOON.\n24th. A medium sised Allied ship in su, ply convoy mas mined and\nsunk 27 miles southwost of SINGAPORE, and # medium sized Portuguese steamer 11\nreported to have runk by mine off RETOUNDIAND,\n2, MILITARY\nLIBYA- Enemy columne from the ISUS area are pushing east, north\nand northwest, South of BEIGRAZI, our forces covering the town have been forced\nto withdraw by strong enemy attacks from the south, Wortheast of : ISUS, cur ar-\nmoured forces are advancing to attack the enery.\nDALAYA. East, On 27th, Australian forces were in contact noar\nJEMATHANG, Inflicting about 250 carnalties on the enemy and suffering 32. Our\ntroops have not retired to UNSEDILLI, some 30 miles soith of JERAUANG,\nCentre. There has been some infiltration by enemy south of SIMPANG\nRENGAR\nTest. 15th Indian Infantry Brigade to still southeast of SENG=\nGARAND, but about 1,000 of the troops isolated there managed to rejoin our forces\non 28th.\nBURNA. Japanese forces, including cavalry, are reported to be ap-\nproaching the MOULIETN area from the east and south,\nRUSSIA. The Russians are continuing their pressure to the Test cd\nTZNEV and in the KHARKOV sector, but German resistance me increased north of =\nline CREL - BRYANSK and in the FURSE aroa.\nAIR OFFRATIONS\nMASTERN FRONT. Six R.D.A.F. aircraft took part in operations 25\n8th without casualty. 28th/29th. 10) aircraft sent out - MINSTER, 84; HOULOGIES\n18; ROTTERDAM, 29: aerodromes in HOLL and TER FRANCE, 20; and leaflets\nover PARIS, 2, Seven aircraft missing, There 185 thick cloud over INDIER, to:\nconditions at BOULDONE and ROTTERDAL tere good,\nRegraded Unclassified\n405\n. 2 -\nLIBYA, On night 26th/27th Tellingtons attacked mechanical trans-\npart on the KL AGHEITA - JEDABYA road, and, on the 27th, until bad weather pre-\nvented further operations, our fighters attacked mechanical transport in the MSUS\narea and on the road west of SIRTE, 13 vehicles were destroyed and at least 35\ndamaged, 27th/28th, Wellingtons attacked shipping in TRIPOLI (L) harbour,\nscoring hite on the Spanish Hole and Main Quay,\nSICILY. Night 27th/28th. and 28th, 53 enemy aircraft attacked the\nisland at HAL FAR, aircraft on ground being slightly damaged,\nBURMA. 27th/28th, Blenheims attacked BANGKOK area, 26th/27th.\nEight enemy aircraft attacked HINGALADON aerodrome, destroying an ammunition\nstore and one Hurricans, The attack was repeated by 30 aircraft on 27th/28th.\nThese were intercepted by Tomalaske of the American Volunteer Group, which des=\ntroyed seven aircraft and probably destroyed a further six for the loss of one\naircraft.\nNETHERLANDS EAST INDIES. 26th, Attacks were made by enemy fighters\non aerodromes at PARE PARE, YYKASSOR, BIMA, KOEPANG, DILLI (PORTUGUESE TIMOR),\nAMBON and NAMIEA,\nThe results of the action against the enemy convoy in MACASSAR\nSTRAITS, believed to have consisted of three cruisers, 12 destroyers and 30 trans-\nports, now appear to have been, at a conservative estimate, one large cruiser\nsunic by American submarine, one cruiser hit by Dutch submarine, all three cruisers\nhit by bomb, one destroyer sunk, one or two destroyers hit by bombe, ten trans-\nparts sunic and several transports damaged,\n40\nAIRCRAFT CASUALTIES IN OPERATIONS OVER AND FROU THE BRITISH ISLES\nEnemy - none reported\nBritish - eight (one R.C.A.F. Spitfire)\n5. IRON ORE\nTotal shipments of Swedish iron are to GERMANY during 1941 were\n9,554,734 tons (of which 738,255 tons via NARVIE) compared with a total of 9,172,\n807 tons (473,312 tons via NARVIK) during 1940. Exports in December totalled\n569,000 tons, of which 24,000 were shipped vis NARVIX, This is 409,000 tons less\nthan shipmente in December, 1940. The Germans are said to be pressing for in-\ncreased deliveries to NARVIK,\nRegraded Unclassified\nTREASURY DEPARTMENT\n508\nINTER OFFICE COMMUNICATION\nDATEJANUARY 31,1942\nTO\nSecretary Morgenthau\nFROM\nMr. Kamerck\nsubject:\nSummary of Military Recorts\nFor East\nUD to January 25, only two Chinese divisions had been\n-iven permission by the British to enter Burna- or this\nforce, only one regiment has, so far, arrived. This regi-\nment had to enter by A difficult and circultous route. It\n19 now occupied in defending the northern route from Thei-\nlend into Burne. The British did not allow the Chinese\ntroops to use the Burma Road for entering Burma untill Janu-\nary 25.\n(O.C.I., \"The War This Week\", January 22-29)\nThe U.S. submarine which obtained a hit on A cruiser\nor aircraft carrier in the Macassar Streits 18 the U.S.\nSturgeon. (The \"Sturgeon\" is R 1,500 ton submarine, 1.e.,\n9 Ben-going submarine, carrying 8 torpedo tubes. It WAS\nlaunched in March, 1938 and has 8 crew of 55 men.) Ameri-\ncan and Australian anti-submarine units have sunk one large\nand probably one smell Japanese U-boat off Port Darwin,\nAustralia.\n(U.K. Operations Report, January 28)\nThe British estimate that the Japanese are producing\n350 planes e month. Our Military Intelligence estimates Jan-\nanese plane production at 500 R month. (The Jananese sir\nstrength 18 evidently going to be one of Jeoan's weekest\npoints, once the United Nations bring enough air strength\nto bear in the Far East.)\n(O.C.I., \"Tne Ver This Week\", January 22-29)\nRusso-German Mar\nAccording to reports reaching the Coordinator of Infor-\nantion, the Germans are sending another division from France\nto the Russian front, This makes e total of g divisions\ntransferred from Frence TO Ruseia in the lost Yes months.\n(0.C.I., \"The war Tris Week\". January 22-29)\nRegraded Unclassified\n- 2 -\n407\nGermany\nThe Germans are probably turning out submarines at the\nrate of 18-20 per month. A total of 250 are under construc-\ntion at any one time. Fifty more are building in Italy and\nfive in France. (In this connection, it might be of interest\nto note a memorandum written by Churchill on the last war, in\nwhich he stated that the difficulties of providing suitable\nsubmarine personnel, rather than production of submarines\nimpose an absolute limit.\" \"There 1s no personnel that\nrequires more careful training than the submarine personnel.\nAll the experience of our officers shows that a submarine\ndepends for its effectiveness mainly upon its captain.\"\n(O.C.I., \"The War This Week\", January 22-29)\n011 to Italy\nThe British report that in a further check-up of recent\nreports on oil shipments to Italy from Germany, it was found\nthat during the last fortnight of December, 40 trains of 35\noil tank cars each passed daily through Basle, from Germany\nto Italy. This amounts to a shipment of no less than 300,000\ntons of oil from Germany to Italy in two weeks. (This 18 to\nbe compared to the Italian estimated minimum requirements of\n100,000 tons of oil a month.)\n(U.K. Operations Report, January 28)\nRegraded Unclassified\n408\nRESTRICTED\nG-2/2657-220: Ro. 617 L.I.D., W.D. 11:00 A.M., January 31, 1942.\nSITUATION REPORT\nI.\nPacific Theater.\nPhilippines: Sporadic enemy attempts at infiltration were\nrepulsed, Air activity was light yesterday. Bawaii: No further re-\nports of hostile action. Mulaya: The press reports that the British\nforces have successfully withdrawn to Singapore Island, after destroy-\ning the deliceray connecting that island to the minland. Burma:\nLight fighting continues in the area of Noulmein. There has been a\nslight decrease in air activity throughout this sector. Australazia:\nAccording to the press, Japanese have made a landing on the Inland of\nAnbon, east of the Celebes. Both vides continue active in the air\nthroughout this theater. Ground fighting in obscure, with reports of\nenemy gains in western Borneo. West Coast: No further reports.\nII. Eastern Theater.\nGround: Fighting continues along the general front, The\nGerman High Command claims successful counterattacks ugainst a Russian\nBreak-through northeast of Kursk. (No situation ma? will be issued\nthis date.)\nAir: On the loscow front, the Russians claim the destruction\nof five JU-52's on January 30.\nIII.\nWestern Theater.\nThe press states that units of Use Termen nir Force raided\nobjectives in North Ireland yesterday,\nIV.\nMiddle Eastern Theater.\nGround: British Beadquarters in the *38dle Snet have stated\nthat two brigades which were defending Senghazi have successfully re-\njoined the British main force, The press indicates that fighting is\nnow sporadio, with both forces bringing up supporting troops,\nAir: On the 30th, the R.A.F. curried out heavy sttacks against\nAkis motorized columns, suggly lines, and bases in vestern Cyrensios.\nAxis air forces continue the desultory bemburdment of Malta and the\nsupport of ground troops.\nRESTRICTED\nRegraded Unclassified"
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