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Volume 504, March 4 – March 5, 1942
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Volume 504, March 4 – March 5, 1942
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Henry Morgenthau, Jr. Papers
Diaries of Henry Morgenthau, Jr.
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DIARY
Book 504
March 4 and 5, 1942
- A. -
Book Page
Airplanes
Aircraft despatched - British Air Commission reports -
3/5/42
504
224,225-A
Appointments and Resignations
Day, William P.: Swope memorandum concerning - 3/4/42
32
Viner, Jacob: Leave of absence from University of
Chicago terminates March 30, 1942 - 3/5/42
212
- B - -
Brasil
See Latin America
Business Conditions
Sears Roebuck and Montgomery Ward sales by types of goods
and by regions - - 3/5/42
203
- C -
China
Stabilization Board: Adler memorandum following conference
and quoting Hall Patch - 3/5/42
231
(See also Book 505, page 220)
Currency
HMJr-Wheeler (Senator, Montana) correspondence concerning
dollar and its connection with gold and/or silver -
3/5/42
195
- D - -
Day, William P.
See Appointments and Resignations
Defense Savings Bonds
See Financing, Government
- $ -
Emanuel, Victor
Principal business interests as of January 1, 1942
223
Exchange Market
Resunds - - 3/4-5/42
62,243
Exports
Freight Situation - Hass memorandum - 3/5/42
219
- 7 -
Financing. Government
Statutory debt limitation report as of February 28, 1942 -
3/4/42
12
Regraded Unclassified
- A -
Book Page
Airplanes
Aircraft despatched - - British Air Commission reports -
3/5/42
504
224,225-A
Appointments and Resignations
Day, William P.: Swope memorandum concerning - 3/4/42
32
Viner, Jacob: Leave of absence from University of
Chicago terminates March 30, 1942 - 3/5/42
212
- B -
Brasil
See Latin America
Business Conditions
Seare Roebuck and Montgomery Ward sales by types of goods
and by regions - 3/5/42
203
- C -
China
Stabilization Board: Adler memorandum following conference
and quoting Hall Patch - 3/5/42
231
(See also Book 505, page 220)
Currency
HMJr-Wheeler (Senator, Montana) correspondence concerning
dollar and its connection with gold and/or silver -
3/5/42
195
- D -
Day, William P.
See Appointments and Resignations
Defense Savings Bonds
See Financing, Government
- I -
Zeanuel, Victor
Principal business interests as of January 1. 1942
233
Exchange Market
Resunds - 3/4-5/42
62,243
Exports
Freight Situation - Hans memorandum - - 3/5/42
219
- 1 -
Financing, Government
Statutory debt limitation report as of February 28, 1942 -
3/4/42
12
Regraded Unclassified
- 1- (Continued)
Book Page
Financing, Government (Continued)
Defense Savings Bonds:
Scrap Iron: Plan to pay farmers in Defense Bonds
and Stamps discussed by HMJr and Howard Hunter -
3/4/42
504
3
Change of name discussed by Treasury group -
3/5/42
85
(See also Book 506, page 49 - 3/9/42)
Daily changes in stock of Series E Bonds - 3/5/42..
216
Fisher Body Company
See United Automobile Workers
Foreign Funds Control
General Aniline and Film Corporation:
See also Books 497 and 501
Conference: present: HMJr, Foley, Mrs. HMJr, and
Mrs. Klots - 3/5/42
70
a) FDR's "go ahead" reported to Foley
Resume for FDR before actual displacement of
existing management - 3/5/42
78
Proposed program.
81
Conference; present: HMJr, Foley, O'Connell, Pehle,
Bernstein, Pike, and McConnell - 3/5/42
115
a) HMJr tells Foley "no more delays" -
3/6/42: See Book 505, pages 16, 17, and 22
Crowley told of HMJr's talk with FDR and of the
future plans - 3/5/42,
129
Memorandum (anonymous) on Treasury action - 3/5/42.
131
Patent situation (I.G. Farben, General Electric, etc.)
discussed with Thurman Arnold, of Justice -
3/6/42: Book 505, page 91
McConnell, Robert E.: To act as President of General
Aniline and Film Corporation; reiteration of
Treasury point of view - 3/9/42: Book 506, page 128
1) Discussed by Treasury group in view of
problem of Alien Property Custodian Executive
Order with Crowley as Custodian - 3/10/42:
Book 506, page 228
2) Crowley-Foley conversation - - 3/10/42:
Book 506, page 242
3) Release - 3/10/42: Book 506, page 245
Wilson, Robert 3.: Standard Oil will release him for
one-half to two-thirds of time - 3/14/42:
Book 507, page 364
O'Connell describes meeting to consider resignations
of present directors - 3/16/42: Book 508, page 111
New management statement: Book 508, page 115
Freight, Export
See Exports
- G -
General Aniline and Film Corporation
See Foreign Funds Control
General Electric Company
See Mint, Bureau of
Regraded Unclassified
- G - (Continued)
Book Page
Germany
See Military Reports
Golden, John
See Revenue Revision: Admission tax for officers of
Army and Navy
- H -
Hunter, Howard
See Financing, Government: Defense Savings Bonds
(Scrap Iron)
- I -
Iceland
Documents concerned with working loan for National
Bank of Iceland - 3/5/42
504
226
Iron, Scrap
See Financing, Government: Defense Savings Bonds
- J -
Japanese in United States
Proclamation and release by War Department - - 3/4/42.
43
Suggested program for Federal Reserve Bank of
San Francisco, etc., in dealing with property of
evacuees - 3/5/42
74
McCloy told of FDR's interest "in what happened to
the Japanese after they get moved, not in what
happened to their property" - 3/5/42
77
Eccles-HMJr conversation - 3/5/42
175
Stimson accepts help of Federal Reserve Banks and
Treasury - 3/6/42: See Book 505, page 25
a) McCloy, Pehle, and Saymesak (Federal Reserve)
flying to Coast - 3/6/42: Book 505, page 26
1) No press relations personnel:
Book 505, pages 28 and 29
b) Tolan Committee informed - 3/9/42: Book 506,
page 22
- L -
Latin America
Brazil: American currency - restriction of circulation
discussed in cable from American Embassy, Rio -
3/5/42
235
Lend-Lease
Report as of February 28, 1942.
19
a) Reconciliation of allocations on HMJr's report
and on summary sheet - 3/4/42
23
Regraded Unclassified
- M -
Book Page
McConnell, Robert E.
See Foreign Funds Control: General Aniline and
Film Corporation
Military Reports
German aircraft production - Kamarck report - 3/4/42
504
54
Reports from London transmitted by Halifax: In
future, distribution to be by Combined Chiefs of
Staff - 3/4/42
63
Royal Air Force bombing activity in February - -
Kamarck summary - 3/5/42
244
Mint, Bureau of
Philadelphia: Swope memorandum on visit of two General
Electric men - 3/5/42,
183
Montgomery Ward
See Business Conditions
- P -
Public Debt
See Financing, Government
- R - -
Revenue Revision
1942 Revenue Bill:
Excise Taxes: Separate bill suggested to HMJr by
FDR - 3/5/42
170
Personal exemptions, capital gains and losses,
joint returns, advertising, tax-exempt securities,
etc. - Swope memorandum - 3/5/42
171
Admission tax for officers of Army and Navy:
Elimination of discussed in Mrs. FDR-HMJr
correspondence 3/5/42
197
- S - S -
Scrap Iron
See Financing, Government: Defense Savings Bonds
Sears Roebuck
See Business Conditions
Spain
Utilization of American currency held by Spanish Foreign
Exchange Institute - American Embassy, Madrid,
cable - 3/5/42
239
(See also Book 507, page 72; Book 508, page 152 -
3/16/42)
Stabilization Fund
Report of approximate earnings for January and
February, 1942 - 3/5/42
222
Switzerland
See Spain
Regraded Unclassified
- T -
Book Page
Taxation
See Revenue Revision
- U -
United Automobile Workers
Fisher Body plant, at Pontiac, Michigan, asks HMJr's
assistance in obtaining defense orders - 3/5/42..
504 214
a) Invited to conference in Treasury - -
3/6/42: See Book 505, page 152
- V -
Viner, Jacob
See Appointments and Resignations
- W -
West Coast
See Japanese in United States
Wheeler, Burton K. (Senator, Montana)
See Currency
Wilson, Robert E. (Standard 011 Company of Indiana)
See Foreign Funds Control: General Aniline and
Film Corporation
1
March 4, 1942
12:20 p.m.
Vincent
Callshan:
Yes, Mr. Secretary.
HMJr:
Vince, I thought you were going to write a.
letter for my signature to this fellow Murray,
who's sick.
C:
I did write one.
HMJr:
Who'd you give it to?
C:
I gave it to Ferdie Kuhn.
HMJr:
Oh, don't
C:
I don't know whether it went to Ferdie Kuhn or
not, but I prepared it and I presumed it went
out three or four days ago.
HMJr:
Look. That happened once before. Send the
letters that I have to sign to Miss Chauncey.
C:
All right, sir.
HMJr:
Because - do you remember once before I was
waiting for B. letter and it took three or four
days to get off Kuhn's desk.
C:
I remember.
HMJr:
Well, if I ask you for something, does it have
to always go that way?
C:
Well, that's the routine, Mr. Secretary. I
mean, it's - when I prepare it, Mr. Kuhn usually
looks it over and sometimes makes changes.
HMJr:
Well, call up Kuhn and tell him to get it in
to me.
C:
Well, I don't - in this case, I don't know whether
he's got it. I know I wrote it right the next
day or a couple of days later though.
C:
Well, would you tell - would you mind following
Regraded Unclassified
2
2 -
it through and tell him please to give it to
Miss Chaunesy at two o'olook 80 I can sign it?
C:
Yes, sir.
HMJr:
Bee?
C:
Yes, sir.
HMJr:
And I just heard the second one.
C:
Did you?
HMJr:
Oh, it's wonderful.
C:
oh, well, we made some yesterday which - we
made three of them. One was the "Watch on the
Rhine" and we made another one with a play
about production, which is marvelous.
HMJr:
Well, the second one is wonderful. I get a
great thrill out of them.
C:
Well, that's grand. Glad to hear it.
HMJr:
I write 80 many other letters to people that
don't mean anything, and this is the best
thing . - my tongue's hanging out; I want to
write somebody.
C:
Well, I've got a beautiful letter written.
HMJr:
Okay.
C:
I'll get it over.
HMJr:
Tell them - whoever's holding it up - to get
it to Chaunoey by two.
C:
Yes, sir.
HMJr:
I thank you.
C:
Okay, sir. Good-bye.
cc - Mr. Graves
3
March 4, 1942
2:20 p.m.
HMJr:
Hello.
Mr. Howard
Hunter:
Hello, Mr. Secretary.
HMJr:
Hello, Mr. Hunter.
H:
I've got a scheme I thought might possibly
interest you, and the build-up to it 1s this.
The War Production Board, Mr. Batt's Division,
is working out a project for the WPA to use
its entire field force and trucks for about
two weeks to collect scrap iron on rural
farms.
HMJr:
Yeah.
H:
They think there are millions of tons, and I
they're right.
HMJr:
They are, yes.
H:
Now, we're getting ready to organize to do
that, and the Department of Agriculture has
insisted and the War Production Board has
agreed that the farmers will be paid something
for this scrap iron.
HMJr:
Yes.
H:
We will have to handle that machinery, too.
It's going to be a difficult job. We couldn't
pay them cash on the farms. I had this in
mind. It will range anywhere from a few pounds
to several tons on a farm, and it might be worth
considering that we pay them or give them some
form of receipt for this, which will be cashable
in Defense Stamps.
HMJr:
Yes.
H:
The War Production Board are getting together
some money - twenty odd million dollars, I think,
for the purpose of paying for this.
Regraded Unclassified
4
- 2 -
HMJr:
How much?
H:
Well, they have to guess at it, because nobody
knows how much there ie.
HMJr:
Yeah. Twenty million, you said?
H:
That's what I understand they've taken on now.
Now, why not pay these farmers, if we have to
pay them at all, pay them in Defense Stamps?
HMJr:
Well, it's an idea. I'd like to think about
it.
H:
All right.
HMJr:
And I tell you what I'll do. I'll give your
suggestion to Harold Graves, who handles that
for me, and tell him to get in touch with you
within the next - well, by tomorrow?
H:
Yeah.
HMJr:
Is that all right?
H:
Sure.
HMJr:
It sounds very interesting.
H:
Who?
HMJr:
I say it sounds interesting.
H:
Yes.
HMJr:
I'll tell Graves about it and tell him to
think about it.
H:
All right, fine.
HMJr:
Thank you very much.
H:
I'll be glad to talk to him any time.
HMJr:
Thank you.
H:
Thank you, sir.
Regraded Unclassified
5
ANDARD FORM No. 14A
TREASURY DEPARTMENT
APPROVED BY THE PRESIDENT
MARCH 10, 1926
WASHINGTON
TELEGRAM
CHARGE TREASURY DEPARTMENT, APPROPRIATION FOR
OFFICIAL BUSINESS-GOVERNMENT RATES
Henry Morgenthau Jr - Personal
(The appropriation from which payable must be stated on above line)
DAY LETTER
a. - - -
2-14117
MARCH 4 1942
MRS FRANKLIN D ROOSEVELT
o/o SEATTLE POST INTELLIGENCER
SEATTLE WASHINGTON
We missed you especially at the services this morning but were
happy that you could be with Anna. Wish all goes well with
her. Hope you have good flight back. Our fondest love to
you all
HENRY AND ELINOR
Regraded Unclassified
5
ANDARD FORM No. 14A
TREASURY DEPARTMENT
APPROVED BY THE PRESIDENT
WASHINGTON
MARCH 10, 1926
TELEGRAM
CHARGE TREASURY DEPARTMENT, APPROPRIATION FOR
OFFICIAL BUSINESS-GOVERNMENT RATES
Henry Morgenthau Jr - Personal
(The appropriation from which payable must be stated un above line)
DAY LETTER
. - - -
2-14117
MARCH 4 1942
MRS FRANKLIN D ROOSEVELT
c/o SEATTLE POST INTELLIGENCER
SEATTLE WASHINGTON
We missed you especially at the services this morning but were
happy that you could be with Anna. Wish all goes well with
her. Hope you have good flight back. Our fondest love to
you all
HENRY AND ELINOR
Regraded Unclassified
6
March 4, 1942
Norman Thompson
Secretary Morgenthau
In this report on Miss Anne Collins Boardman,
one of the things which she says she helped to
organize is the Committee to Defend America.
Please find out what this Committee was, what it
stood for and, if possible, what kind of literature
it got out. I think it is very important to find
out more details about that particular organization.
Submitted 3/6/42
Regraded Unclassified
March 4, 1942
Dear Mr. Barnard:
Your telegram came as a real encourage-
ment, and I should like you to know how much I
appreciate and value it. I think you can see
that we all benefited from the discussions
which you initisted months ago.
We shall probably have 8 stiff fight on
our hands with Congress, but I believe that the
good sense and patriotism of the American public
will be pushing toward the enactment of some
such program as I outlined yesterday.
with best regards,
Sincerely,
(Signed) 1. Morgenthau. 12.
Mr. Chester I. Barnard
540 Broad Street
Newark, New Jersey
FK/hkb
nmc.
3/4/42
capies whempson
3K-
Regraded Unclassified
E
L
8
E
G
R
A
P
H
1942 MAR 4 AM 11 36 -
T
R
E
A
S
in 16 12
U
R
NK NEWARK NJ MAR 4 1034A
Y
HENRY MORGENTHAU JR
T
E
SECRETARY OF TREASURY
L
E
G
INTERESTED AND GREATLY PLEASED WITH YOUR MESSAGE TO
R
A
COMMITTEE YESTERDAY. PROGRAM SEEMS TO ME SOUND AND
P
H
PHASTICABLE. CONGRATULATIONS
T
CHESTER I BARNARD.
R
1127A.
E
Sincer und 540 proof A.
U R
Regraded Unclassified
SUBT - - SENATER - - -
9
MINART L - REPRESENTATIVE - - - VIIIA -
strate
- -
TER a - - -
- . CALLIR - now -
et e. was - touth - -
allew t. TREASMAT, - MASSACHUSETT
Congress of the United States
- ELASTER -- -
name CARROL FROM -
JOINT COMMITTEE ON REDUCTION OF NONESSENTIAL
- BILLAR - TERMONO
GIFTAN & - REPRESENTATIVE - -
FEDERAL EXPENDITURES
was A and serves now - -
- TAMEL REPRESENTATIVE FORM - -
CREATED PURSUANT TO SEC. 401, OF THE REVENUE
EUROS a. HOSTLEY of THE
MMILE 9. tarra. - 1 - of THE GRUT
ACT OF 1941
March 4, 1942 r
Hon. Henry Morgenthau, Jr.
The Secretary of the Treasury
Washington, D. C.
My dear Mr. Secretary:
As the Senate Finance Committee will meet
tomorrow in the Finance Committee room, and, as
the Todd Shipyards Corporation has requested more
time to prepare the information asked for, the
meeting of the Joint Committee on Reduction of
Nonessential Federal Excenditures, scheduled for
Thursday, March 5, has been postponed for several
days.
You will be notified at. a later date.
with best wishes, I am
Faithfully yours,
Hany Chairman t. Bym
Regraded Unclassified
10
March 4, 1942
TO:
Mr. Sullivan
FROM: The Secretary
In answer to your memorandum of March 4,
I am delighted to know that you have put into effect
seven of the eight suggestions. I am more than
willing to accept your suggestion and drop the eighth.
11
ENORANQUM
arch 4, 1942.
DO:
The Secretary
FROM:
Ir. Sullivan
Its
SUBJECT: Tax Publicity.
On February 26th I submitted E additional tax
milicity projects which you approved. I wish to report
that 7 of these have slready been executed. The 8th,
"a Treasury statement urging employers to give employees
time off to file their returns", has not been done. Upon
reconsideration, 1r. Cann, Kr. Callahan and I felt that
wille there is 80 much criticism in the news apers about
work stoppages the public reaction to such a statement as
me hed proposed would be had. Do you approve?
Regraded Unclassified
March 4, 1942.
12
STATUTORY DEBT LIMITATION
AS OF FEBRUARY 28, 1942
Section 21 of the Second Liberty Bond Act, as amended, provides
that the face amount of obligations issued under authority of that
Act, "shall not exceed in the aggregate $65,000,000,000 outstanding
at any one time."
The following table shows the face amount of obligations out-
standing and the face amount which can still be issued under this
[imitation:
Total face amount that may be
outstanding at any one time
$65,000,000,000
Outstanding as of February 28, 1942:
Interest-bearing:
Bonds -
Treasury
$35,912,029,400
Savings (Maturity
value)'
9,674,147,950
Depositary
72,436,000
Adjusted Service
731,634,706
$46,390,248,056
Treasury notes
12,145,729,175
Certificates of
indebtedness
2,941,800,000
Treasury bills
(maturity value)
2,001,743,000
17,089,272.175
$63,479,520,231
Matured obligations, on
which interest has ceased
114,592,000
63,594,112,231
Face amount of obligations
issuable under above authority
$ 1,405,887,769
Reconcilement with Daily Statement of the United States Treasury
February 28, 1942
Total face amount of outstanding public debt obligations
issued under authority of the Second Liberty Bond Act,
88 amended
$63,594,112.231
Deduct, unearned discount on Savings bonds (difference
between current redemption value and maturity value)
1,780,767,691
61,813,344,540
Add other mublic debt obligations outstanding but not
subject to the statutory limitation:
Interest-beering (Pre-War, etc.)
$ 195,990,180
Matured obligations on which interest
has ceased
11,519,665
Bearing no interest
359,650,781
567,160,626
Total gross debt outstanding as of February 28, 1943
$62,380,505,166
Approximate maturity value. Principal amount (current redemption value)
according to preliminary public debt statement $7,893,380,259.
30-56
-000-
Regraded Unclassified
UNITED STATES SAVINGS BONDS
Comparative Statement of Sales During
First Two Dusiness Days of March, February and January 1942
(March 1-3, February 1-3, January 1-2)
(On Basis of Issue Price)
(Amounts in thousands of dollars)
:
1
Amount of Increase
: Percentage of Increase
:
Sales
:
or Decrease (-)
:
or Decrease (-)
Item
:
:
:
:
March
:
February
:
March
:
February
:
March
: February
:
January
:
over
:
over
:
over
:
over
2
2
:
:
February
:
January
:
February
I
January
Series 1 - Post Offices
* 8,786
$12,006
$ 8,784
-$ 3,220
$ 3,222
- 26.8%
36.7%
Series E - - Banks
24,327
42,037
20,964
- 17,710
21,073
- 42.1
100.5
Series 1- - Total
33,112
54,044
29,749
- 20,932
24,295
- 38.7
81.7
Series 1- Banks
3,672
8,984
4,021
- 5,312
4,963
- 59.1
123.4
Series G - Banks
17,506
39,313
15,384
- 21,807
23,929
- 55-5
155.5
Total
$54,290
$102,341
$49,153
-$48,051
$53,188
- 47.0%
108.26
Office of the Secretary of the Treasury, Division of Research and Statistics.
March 4, 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 Unclassified
UNITED STATES SAVINGS BONDS
Daily Sales - - March, 1942
On Basis of Issue Price
(In thousands of dollars)
Post Office
Bank Bond Sales
All Bond Sales
Bond Sales
Date
Series 1
Series I
Series 7
Series G
Total
Series E
Series 1
Series G
Total
March 1942
2
$ 5,811
$ 15,868
$ 2,043
$ 8,726
$ 26,636
$ 21,678
$ 2,043
$ 8,726
$ 32.447
3
2,975
8,459
1,629
8,750
18,868
11,434
1,629
8,780
21,843
Total
$ 8,786
$ 24,327
$ 3,672
$ 17,506
$ 45,504
$ 33,112
$ 3,672
# 17,506
$ 54,290
Office of the Secretary of the Treasury, Division of Research and Statistics.
March 4. 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 Unclassified
Number of agents in Other Corporations and Investment Industry
qualified to issue Series 3 Savings Bonds, by Federal Re-
serve districts - January 10 to date.
1
I
#
1
I
2
:
I
-
I
I
Cleveland
Dallas
Kansas
:
I
:
Date
Atlanta
Boston
Chicago
I
Minne-
New
:
Phila-
:
Richmond
:
San Fran-
City
St. Louis
apolis
:
York
:
Total
delphia
cisco
Other Corporations
Jan. 10
4
-
8
-
-
-
-
-
-
-
-
17
-
12
27
12
-
-
1
-
-
4.
65
8
-
24
15
2
61
1
118
22
13
-
1
21
83
15
4
31
17
14
3
240
90
28
27
1
3
32
101
Feb.
19
8
7
20
11
19
115
33
42
351
5
3
41
124
23
14
14
18
23
22
151
40
49
457
9
3
46
135
27
21
23
27
170
43
15
32
552
53
14
3
53
148
27
28
37
198
44
18
23
16
35
614
58
4
55
159
30
21
41
686
Investment Industry
Jan. 24
-
-
5
-
-
2
-
1
-
2
.
31
.
10
10
-
-
W
-
2
-
7
,
6
7
-
-
13
6
1
8
-
2
37
,
9
-
14
-
6
7
3
8
.
15
48
3
2
-
10
-
7
21
3
8
17
7
54
-
-
3
2
-
14
-
28
1
17
7
.
7
3
2
-
was
3
8
14
61
-
8
3
8
63
1/
Other Corporations authorized as of December 27. 1941 and Investment Industry as of January 17. 1942.
Regraded Unclassified
Daily changes in the stock of Series E savings bonds on hand 1/
(In thousands of pieces)
: Number of : Number of pieces : Stock on hand :
IBM
:pieces sold :
manufactured
:
at close of
:
deliveries
: this day
:
this day
:
day
:
this day
Feb. 23
214
800
21,905
-
24
55
800
22,650
1,600
25
104
800
23,346
700
26
158
800
23,988
875
27
240
800
24,548
660
28
162
none-closed
24,386
-
Mar. 1
none-closed
none-closed
24,386
-
2
304
500
24,582
-
3
160
500
24,922
625
Office of the Secretary of the Treasury,
March 4, 1942
Division of Research and Statistics.
1/ Includesstock 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 Unclass
17
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE March 4, 1942.
TO
Secretary Morgenthau
FROM George Buffington G.D.
The following list shows "The New Spirit" bookings
for the week ending March 1, 1942, and the total to date.
Albany
22
Atlanta
118
Boston
94
Buffalo
53
Charlotte
70
Chicago
121
Cincinnati
96
Cleveland
55
Dallas
85
Denver
23
Des Moines
22
Detroit
96
Indianapolis
60
Kansas City
54
Los Angeles
77
Memphis
62
Milwaukee
40
Minneapolis
56
New Haven
20
New Orleans
48
New York
126
Oklahoma City
55
Omaha
47
Philadelphia
122
Pittsburg
107
Portland
30
St. Louis
93
Salt Lake City
San Francisco
51
Seattle
40
Washington, D.C. 64
Total Week Ending
March 1, 1942 ##
2007
Grand Total Week Ending
February 22, 1942
5757
Grand Total Week Ending
March 1, 1942 ##
7764
**Salt Lake City report not included.
18
ASSISTANT SECRETARY OF THE TREASURY
March 4, 1942.
MEMORANDUM
To:
Secretary Morgenthau
From: Mr. Gaston
Johnson and Dow, of Customs, have been
in conference yesterday and today with the
Budget, Captain Gorman of the Coast Guard
and Commander Field of the Bureau of Naviga-
tion as to our absorption of a part of the
work of that Bureau, which is the part for
which Collectors of Customs have been the
field agents, that is, the entry, clearance
and documentation of ships. Customs is to
take over 34 men in Washington and none in the
field. Among the 34 is Captain Sweet, who is
the specialist on navigation regulations and
documentation. Another is a lawyer who will
be assigned to the General Counsel's staff.
The matter of physical space is a problem
both for Customs and Coast Guard, but we are
& temporary arrangement under which
all of the men assigned to us
would remain in their present quarters in
the Commerce Building for several months.
They have a serious problem in reorganization
and separation of their files.
NB
Regraded Unclassified
19
OFFICE OF LEND-LEASE ADMINISTRATION
MAI
1942
FIVE-FIFTEEN 22d STREET NW.
WASHINGTON. D.C.
E. R. Stettinius, Jr.
Administrator
March 4, 1942
MEMORANDUM
To:
The Honorable Henry Morgenthau
From:
E. R. Stettinius, Jr.
Subject: Executive Reports
Transmitted herewith, for your
information, are copies of the latest
Executive Reports on Lend-Lease opera-
tions.
Attachment
Regraded Unclassified
20
CONFIDENTIAL
Executive Report No.1
Office of Lend-Leose Administration
STATEMENT OF ALLOCATIONS AND OBLIGATIONS
Weekly Report as of February 28, 1942
Adjusted
Allocations
Obligations
Appropriation Category
Appropriations
Feb. 28, 1942
Feb. 28, 1942
Feb. 23, 1942
Feb. 23, 1942
Irdnance and Ordnance Stores
$ 2,026,454,289
$ 1,993,354,681
$ 1,293,354,681
$1,304,549,015
Aircraft and Aero. Material
2,877,000,000
2,838,204,353
2,837,956,698
2,298,982,150
Tanka and Other Vehicles
971,100,000
959,051,249
959,051,249
572,967,420
Vessels and Other Watercraft
1,675,280,100
1,663,858,450
1,663,858,450
1,240,631,540
Misc. Vilitary Equipment
466,500,000
457,327,106
457,323,631
132,587,034
Production Facilities
1,051,313,824
1,041,585,513
1,041,585,513
676,276,087
Agrio, and Indust. Commod's
3,266,381,887
2,734,868,301
2,734,012,401
1,721,052,855
Servicing Repair of Ships, etc.
305,469,900
296,947,333
296,947,333
194,686,284
Services and Expenses
312,500,000
278,476,944
277,956,520
81,159,767
Administrative Expenses
20,000,000
8,333,352
8,083,352
3,238,120
Total
$12,972,000,000
$12,272,007,282
$12,270,129,828
$8,226,130,272
Adjusted
Allocations
Obligations
Procuring Agency
Limitations
Feb. 28, 1942
Feb. 28, 1942
Feb. 23, 1942
Feb. 23, 1942
War Department
8 6,656,977,280
8 6,589,985,169
$ 6,589,453,020
$4,379,618,142
Navy Department
2,663,921,469
2,613,220,753
2,613,061,348
1,665,660,676
Maritime Commission
1,143,068,100
1,127,296,500
1,127,296,500
931,892,111
Treasury Department
932,901,774
931,992,840
931,136,940
571,341,068
Department of Agriculture
1,518,040,076
1,008,312,076
1,008,312,076
676,934,780
Other
1,199,944
1,199,944
869,944
683,495
Total
$12,916,108,643
$12,272,007,282
$12,270,129,828
$8,226,130,272
Funda for freight and other necessary charges are not included in obligations.
'THIS DOCUMENT CONTAINS INFORMATION AFFECTION FM NATIONAL DEFERER OF 2.00 CRITES STATES #ITHIN en DE THE EXPIO-
FACE ACT, U.S.C. se, 11 AND 11. TEI TRANSMISSION - FM REVELATION OF 378 CONTONYA 10 487 MIDE 10 AF MB-
TON 18 PROVISIVED BY
Regraded Unclassified
21
CONFIDENTIAL
LEND-LEASE FUNDS
TOTAL
WAR DEPARTMENT
(Mittions)
(Millions)
20,000
7,000
PROGRAM LIMITATION
ALLOCATIONS
6,000
16,000
Procurement
Authorizations
5,000
APPROPRIATIONS
12,000
ALLOCATIONS
4,000
Procurement
Authorizations
OBLIGATIONS
3,000
8,000
2,000
OBLIGATIONS
4,000
EXPENDITURES
1,000
EXPENDITURES
o
o
Ses Oct Nov Dec Jan Feb Mor Apr May Jun Jul Aug Sep
Sep Oct Nov Dec Jon Feb Mar Apr May Jun Jul Aug Sep
(94)
1942
1941
1942
NAVY DEPARTMENT
MARITIME COMMISSION
(Millions)
(Millions)
$
3,500
2,500
3,000
"PROGRAM LIMITATION
2,000
2,500
ALLOCATIONS
1,500
2,000
Procurement
Authorizations
PROGRAM LIMITATION
ALLOCATIONS
1,500
1,000
Procurement
OBLIGATIONS
Authorizations
1,000
OBLIGATIONS
500
500
EXPENDITURES
EXPENDITURES
o
o
Sea Oct Nov Dac Jon Feb Mar Apr May Jvn Jul Aug Sep
Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
1941
1942
1941
1942
TREASURY DEPARTMENT
DEPT. OF AGRICULTURE
(Millinns)
(Millions)
$
$
3,500
2,500
3,000
2,000
2,500
1,500
2,000
1,500
PROGRAM LIMITATION
ALLOCATIONS
1,000
Procurement
PROGRAM LIMITATION
ALLOGATIONS
Authorizations
1,000
Procurement
OBLIGATIONS
500
Authorizations
500
OBLIGATIONS
EXPENDITURES
EXPENDITURES
o
o
Sep Oct Nov Dec Jes Feb Mar Apr May Jun Jul Aug Sep
Sep Oct Nov Dat jan Feb Mar Apr May Jun All Aug Sep
1941
1942
1941
1942
Excludes reserve of $500,000,000
Office of Lend-Laose Administration - March 3, 1942
Regraded Unclassified
TOTAL AMOUNT OF FUNDS OBLIGATED
CONFIDENTIAL
IN EACH WEEKLY PERIOD
Millions of Dollars
500
500
400
400
300
300
200
200
100
100
0
o
Oct
Nov
Dec
Jan
Feb
Mor
1941
1942
AMOUNT OF FUNDS OBLIGATED, BY WEEKLY PERIODS
Thousands of Dollars
Jan. 24-31
Feb. 1-8
Feb. 9-15
Feb. 16-23
APPROPRIATION CATEGORY
Ordnance and Ordnance Stores
100,255
21,087
7,921
43,017
Aircraft and Aero. Material
29,139
51,075
197,696
68,407
Tanks and Other Vehicles
48,720
24,210
8,261
16,632
Vessels and Other Watercraft
12,999
13,619
8,142
45,701
Misc. Military Equipment
13,872
9,814
4,201
5,008
Production Facilities
13,608
9,739
61,305
16,965
Agric. and Indust. Commod's
130,864
75,909
83,198
61,726
Servicing, Repair of Ships, etc.
31
4,427
1,215
3,433
Services and Expenses
4,068
16,877
7,585
8,517
Administrative Expenses
89
185
179
111
Total
353,645
226,942
379,703
269,517
PROCURING AGENCY
War Department
204,084
132,155
306,254
161,763
Navy Department
51,457
13,669
19,092
28,204
Maritime Commission
12,343
27,609
608
60,232
Treasury Department
34,729
53,470
36,854
19,313
Department of Agriculture
50,989
30
16,855
5
Other
43
9
40
-
Total
353,645
226,942
379,703
269,517
Office of Lend-Lease Administration
Regraded Unclassified
23
TREASURY DEPARTMENT
MAR 5 1942
PROCUREMENT DIVISION
95
OFFICE OF THE DIRECTOR
WASHINGTON
March 4, 1942
Tothe Searty
20 a STOPS:
3/5/42
The peconciliation of Allocations as shown on
La Decretory's report 10" Vebruary 28, 1042, and the
item satitled, "Deguisitioned" on Submary sust is as
follows:
Ilecations new constrer's Report $752,027,529.
evalsitions per Emoinse Tasti-
Cication Report 406,480,938
did:
mistributed Allo-
cations
125,007,582
Administrative
SIV,209
iscellanoous
6,000
382,022,539.
stator's. of Producement Month Inck
FORDEFENSE
BUY
UNITED
STATES
WALFAGE
Buyes
-
Regraded Unclassified
24
SUBMARY SHEET
TREASURY DEPARTMENT. PROCUREMENT DIVISION
LEND LEASE PROGRAM
STATUS REPORT AS OF CLOSE OF BUSINESS FEBRUARY 28, 1942
Total
United
All Countries
Kingdom
Russia
China
Other
1. Requisitioned- (by dollar amount)
$805,430,738
$587,604,057
$157,784,089
$57,159,310
$2,883,282
(Allocations and Recommendations)
(Exclusive of Administrative and
Contingent Expenses and Special Fund)
2. Obligated-- (by dollar amount)
600,175,590
459,405,549
104,197,681
34,390,155
2,152,205
(Contracts and Commitments)
3. Delivered-- (by dollar amount)
210,444,050
185,855,110
12,284,559
12,133,945
170,436
(To Foreign Government Representative)
L. Undelivered Belance-- (by dollar amount)
389,731,540
273,580,439
91,913,122
22,256,210
1,981,769
(2 less 3)
5, Scheduled-(by dollar amount)
213,807,722
166,328,796
41,313,393
6,064,474
101,059
(By Months, BE Followo:)
1942:
March
75,826,619
61,732,024
10,690,527
3,309,661
94,407
April
35,534,094
28,266,090
6,096,534
1,164,818
6,652
19,906,694
7,375,344
819,822
-
May
28,101,860
June
31,101,913
19,397,972
11,248,046
453,895
-
July
10,372,612
8,735,296
1,431,136
206,180
-
August
8,615,875
7,184,611
1,393,301
37,963
.
September
9,178,497
7,954,897
1,187,661
35,939
I
October
4,181,268
3,570,941
578,144
32,183
,
425,118
-
November
3,529,404
3,103,071
1,215
December
5,062,321
4,520,819
538,704
2,798
-
Subsequent to December
2,303,259
1,954,381
348,878
-
-
Tex
Unscheduled-- (by dollar amount)
148,504,470
90,405,934
44,003,081
13,095,199
1,000,256
(Delivery Schedule being Developed)
7. Revised Schedule-- (by dollar amount)
27,419,348
16,845,709
6,596,648
3,096,537
880,454
146+7+4) -
TREASURY DEPARTMENT. PROCUREMENT DIVISION
LOD LEASE PROGRAM
CHIMA--BIPORC BY COMMODITIES AS or THE CLOSE OF DUSINESS FEBRUARY 28, 19/2
£
L
I
2
2
g
Amunition,
L
Communications
Miscellaneous
Explosives,
(Snall Aras)
Ammunition
Ordnance
Equipment and
A
Military
Naval and
Pyrotechnice
Etc., Grenades
(Other Than
of
Waterial
Special
Equipment,
Unritime
and Chemical
and Anti-Tank
Scall Arms)
(Other Than
Total
Aircraft
Filitary
Warfare Items
Supplies
Equipment
Mines
Servicing
and Etc.
Vehicles)
Devices
and Naterial
and Supplies
(Non-Caritis)
1. Requisitioned--(by dollar amount)
$57,159,310
(Allocations and Recommendations)
(Exclusive of Administrative and
Contingent Expenses and Special Fund)
2. Obligated--(by dollar amount)
34,390,155
$ -
$142,875
$54,000
$51,825
(Contracts and Commitments)
$3,162,088
$ -
$3,568,949
I .
$ -
3. Delivered--(by dollar amount)
12,133,945
-
5,375
-
51,825
1,517,215
-
3,546,550
I
(To Foreign Government Representative)
-
4. Undelivered Belance--(by dollar amount)
22,256,210
-
137,500
54,000
-
1,644,873
-
(2 lass 3)
22,399
-
.
a
5. Scheduled--(by dollar amount)
6,064,474
-
37,500
-
-
1,303,415
-
48,680
-
-
(By Months, as Follows:)
1942:
March
3,309,661
-
37,500
-
.
526,911
-
32,000
-
-
April
1,164,818
-
-
-
.
388,751
-
16,680
-
-
May
819,822
-
-
-
-
89,036
-
-
#
-
June
453,895
-
-
.
-
64,736
-
-
-
,
July
206,180
-
-
-
-
159,866
-
-
-
-
August
37,963
-
-
-
-
24,300
-
-
-
-
September
35,939
-
-
-
-
24,300
-
-
-
#
October
32,183
-
-
-
-
24,300
-
,
-
-
November
1,215
-
-
-
-
1,215
-
-
-
-
December
2,798
-
-
-
-
.
#
-
-
-
Subsequent to December
-
-
-
-
-
.
#
,
-
-
6. dollar ascunt)
13,095,199
.
5,375
54,000
-
242,801
-
69,324
-
-
(Delivery Schedule being Developed)
7. Revised Schedule-(by dollar amount)
3,096,537
-
94,625
-
-
98,657
-
Cr. 95,605°
-
-
(546+7=4)
. Delivered In Advance of Schedule.
Regraded Inclassified
El
2.
I
I
Z
Agricultural
Y
Fuels and
Machine Tools.
Machinery
Foodstuffs
Materials and
Chemicals Not
Etc.,
and Farts
Miscellaneous
=
and
Products Not
Misewhere
For Export
(Agricultural
Machinery
Related
Elsewhere
Classified
(Metal Lorking)
Tractors)
and Farts
Metals
Products
Classified
$8,589,744
$399
$ -
$3,147,720
$15,085,728
$5,580
$581,247
2,552,082
399
-
459,673
3,720,342
5,580
274,904
6,037,662
-
-
2,688,047
11,365,385
-
306,344
357,780
-
-
247,993
3,858,706
-
210,400
237,041
-
-
74,765
2,317,871
-
83,573
86,277
-
.
38,588
632,657
-
1,865
11,850
.
-
96,827
620,660
-
1,449
9,825
.
.
10,273
255,353
-
113,708
713
-
.
9,366
30,137
-
6,098
7,012
-
-
5,914
737
-
-
4,050
-
-
6,852
737
-
-
1,013
.
-
2,611
553
-
3,706
-
.
-
-
-
-
-
-
-
-
2,798
-
-
-
-
I
-
-
-
-
-
5,094,221
-
-
2,440,054
5,093,480
-
95,944
585,661
.
-
2,413,199
-
TREASURY DEPARTMENT. PROCUREMENT DIVISION
LDD LEASE PROGRAM
RUSSIA--REPORT 31 COMMODITIES AS or THE CLOSE OF BUSINESS FEBRUARY 28, 19/2
E
If
2
I
₽
&
Last
Ammunition,
Communications
Miscellaneous
Explosives,
(Small Aras)
Ammition
Ordrance
Equipment and
Vilitary
Naval and
of
Pyrotechnics
Stc., Grenales
(Other Than
Material
Special
Equipment,
Maritine
and Chemical
and Anti-Tank
Scall Arms)
(Other Than
Filitary
Supplies
Equipment
Servicing
Total
Aircraft
Warfare Items
Kines
and Etc.
Vehicles)
Devices
and Vaterial
and Supplies
(Son-Maritine)
1. Requisitioned=-(by dollar mount)
$157,784,089
(Allocations and Recommendations)
(Exclusive of Administrative and
Contingent Expenses and Special Fund)
2. Obligated--(by dollar anount)
104,197,681
$126,878
$209,925
il -
I -
$2,145,771
$252,876
$9,489,136
$
$
(Contracts and Commitments)
3. Delivered--(by dollar amount)
12,284,559
-
-
-
-
-
I
-
-
-
(To Foreign Government Representative)
4. Undelivered Balance--(by dollar amount)
91,913,122
126,878
209,925
-
-
2,145,771
252,876
9,489,136
-
,
(2 less 3)
5. Scheduled-(by dollar amount)
41,313,393
63,439
71,025
-
-
1,182,19
108,850
3,478,706
-
-
(By Months, as Follows:)
1942:
March
10,690,527
-
71,025
-
-
9,532
108,850
70,575
all
#
April
6,096,534
-
-
-
-
9,532
-
319,350
-
-
May
7,375,344
-
-
-
-
333,888
-
574,595
-
.
June
11,248,046
-
-
-
-
279,082
-
1,623,816
-
.
July
1,431,136
-
-
-
-
109,429
-
278,620
-
.
August
1,393,301
63,439
-
1
-
229,818
-
-
-
-
September
1,187,661
-
-
-
-
-
-
320,250
-
-
October
578,144
-
-
-
-
-
-
220,500
-
-
November
425,110
-
-
-
-
76,100
-
35,500
-
.
December
538,704
-
-
-
-
54,975
-
35,500
-
-
Subsequent to December
348,870
-
-
-
-
-
-
.
-
-
5. Unacheduled--(by dollar amount)
44,003,081
63,439
52,650
-
-
886,351
36,176
6,010,430
-
-
(Delivery Schedule being Developed)
7, Revised Schedule-(by dollar amount)
6,596,648
.
86,250
-
-
77,001
109,550
-
-
(0+6+7+4)
26
E
§
I
I
2
Agricultural
I
Fuels and
Machine Tools,
Eachinery
Foodstuffs
Materials and
Chemicals Not
Stc.,
and Parts
Miscellaneous
1
and
Products Lict
Eleewhere
For Export
(Agricultural
Machinery
Related
Elsewhere
Classified
(Vetal Working)
Tractors)
and Parts
Metale
Products
Classified
#
-
$673,790
$ -
$15,529,720
$74,403,468
$ -
$1,366,117
-
-
-
91,219
12,157,237
.
36,103
Y
673,790
-
15,438,501
62,246,231
-
1,330,014
-
620,939
-
5,989,933
29,185,988
-
612,094
-
76,733
-
472,262
9,719,962
-
161,588
-
45,787
-
675,562
4,931,923
-
114,380
-
58,602
-
1,051,762
5,355,097
-
1,400
-
156,784
-
363,399
8,499,471
-
325,494
-
12,930
-
721,479
219,386
-
9,232
-
101,403
-
624,267
374,374
-
-
-
168,700
.
639,245
59,466
-
-
#
-
.
354,067
3,577
-
-
-
-
-
309,941
3,577
-
-
-
-
-
444,650
3,576
-
-
-
-
-
333,299
15,579
-
-
-
52,851
-
6,149,308
30,720,871
-
33,005
-
3,299,260
2,339,372
-
684,915
27
27
was received
- MAIL
- III All or DI CLIBE a - N. 1942
I
:
4
1
a
a
I
.
-
as
:
I
1
Commention
Inform,
I
Usell kmi
-
Orbane
Replicant and
Billiary
Sami and
i
hele -
Pentize Twile,
Fontatuffe
Naturials -
4.
Mr., Greater
(Dther The
Exterial
Sydpent,
Baritize
-
Be.,
- Parte
I
-
Intire 141
el
et
hall 4m)
Date These
Williary
Supplies
Spipment
Servicing
Contain
For ligert
Suchinery
Selected
Combers
Airent
Name Time
the
end Bu.
and Beterial
and Supplies
Botal
- Parta
Setails
Products
Classified
1. - - -
-
- así -
d' -
- - has
H
- filler -
-
I
-
-
-
A.R
-
must
2,2,2
-
$1,000,00
-
- - -
- -
use
-
-
-
-
use
--
%
UNE
--
7,348,517
127,135,30
-
I I 2
ave abe -
-
20,000.00
#
#
-
-
--
-
57,29
1,000
-
14,000.00
- Ce -
--
WE
-
-
-
-
à
VICE
-
VA
30.00
1,000
I
MW
- - 12ml
NA
-
-
-
--
-
5
-
---
-
-
=
-
-
-
#
-
-
-
7,70
=
1,000
P.O.
1,000.00
-
was
J.M
20,50
-
-
=--
-
---
5
TAX
-
-
&
-
-
.
-
-
-
=
E
C/N
1,356,75
-
---
-
--
-
3
G
-
1
-
1,00,00
400
===
-
.
3
-
%
7,4
-
-
-
-
-
---
-
-
1,00
1,300,00
-
-
MS
-
-
=
==
minic
57,36
-
-
===
0,70
$
---
2/8
30,00
--
-
20,00
-
-
I
=,=
9,%
7,5
FA
26,00
VIVE
6
I
12
5
-
-
-
-
-
-
-
-
-
di
-
-
7,36
=
-
-
-
-
-
- -
-
-
-
-
3
-
--
-
-
-
28
28
ESTADOS name: DIVIRION
LES STATE
- If AT a 26. 1962
E
1
i
-
I
a
a
6
#
:
I
a
Commissione
Agriestional
Explorives,
1
(Inall Area)
Amerition
and
filltary
Femal and
il
Pails and
Eastine Taxis
Materiale and
&
Br., Orenades
(Dther Than
Reterial
doestal
Buttim
Commission Ext
the
and Parte
I
and
Products M.
and Chested
and Anti-Tack
Small ina)
(Other Than
Filitary
Suppline
Entral
Contain
7vr Ixpert
Related
Total
attents
Bartare Items
Enee
and Its.
Takinles
Devices
et Tatarial
and Dipoline
Classified
Warking)
Pricters)
et Porta
Estate
Products
Classified
L. dollar amail)
2,30,282
end Recommendation)
of and
Contribut Expense and Special had)
1, faller
2,152,205
.
.
-
211,000
.
20.19
-
0.47
10,8%
-
41,175,626
Huntracts and
1. - dollar accunt)
170,06
-
-
-
.
#
-
.
-
.
170,36
LTs Devement Representative)
4. 4stier sanat)
1,961,769
-
-
I
11,000
-
7,497
0,0%
1,905,190
12 lass 32
1. fallar and
10,009
-
-
.
.
12,500
MAR
-
11,407
By Conths, M Follower)
TREE
and
%.109
-
-
-
-
3,00
72,407
and
us
-
-
.
1,452
Exp
-
,
.
-
à
-
-
-
Heat
.
Tumber
-
-
richer
-
-
-vitter
-
missing
.
и Secember
1,000,256
a
11,000
.
dellar -
-
135,507
RLS
11,0%
They being Developed)
dellar
600,114
-
125,152
I
-
-
155,30
+ +7+4)
29
MAR 4.1942
Dear ET. McCormack:
I am in receipt of your letter of March 2,
enclosing a letter which you received from
Melvin Silverman, ttorney, of Boston, Massachusetts.
Enclosed is e copy of a letter which has been
sent to Er. silverman, together with a copy of the
press release referred to.
Sincerely yours,
(Signed) 1. Mergonthau, Jr.
secretary of the Treasury
Enclveures
Press Release is
Bonorable John N. McCormack
House of Representatives
nmc
30:61b 3/2/49
Thompson
By Messemer Manie
340
Regraded Unclassified
30
March 2, 1942
Helvin silverman, Esq.
10 State Street
Beston, Massachusetts
My dear Mr. silvermant
The Honorable John W. McCormack has forwarded your
letter of February 24th to me, in regard to the
removal of household goods from Washington by the
Procurement Division of the Treasury Department.
There is some misunderstanding in regard to this
subject and I am enclosing herewith a press release
on the subject. The Procurement Division of the
Treasury Department will be very glad to consider
you if you will write in and tell them something
of your equipment and facilities to do this work.
Yours very truly,
Gerard Swope
Assistant to the Secretary
Enclosure
05,blb
Regraded Unclassified
C
0
31
P
Y
MELVIN SILVERMAN
Attorney and Counseller at Law
Ten State Street
Boston, Massachusetts
Capitol 7297
February 24, 1942
Congressman John E. McCormick
Congressional Office Building
Washington, D. C.
Dear Sir:
-
As my Representative in Congress, I urge
that you protest the action of the Procurement
Division in the Treasury Department in arranging for
the removal of household goods of Non-defense
Government offices and employees through a private
organisation (Traffic Service Department) of
American Trucking Associations, which does not
represent the entire trucking industry and which
demands $60.00 a year as a condition for memberships,
I insist that an investigation be made of the action
of the Procurement Division in allotting contracts to five
(5) companies through the Traffic Service Department
at rates higher than are presently available to the
Government, as an illustration of gross waste and
intemperate spending. As a tax paying member of your
state and your constituent I urge immediate action
on my protest.
Very truly yours,
/s/ MELVIN SILVERMAN
MS:MG
Regraded Unclassified
32
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE March 4, 1942
to
Secretary Morgenthau
FROM Gerard Swope
Mr. William P. Day came to me with an
introduction and recommendation from Tom K. Smith,
President of The Boatmen's National Bank of
St. Louis. You may remember that I spoke to you
about it. This is simply for the record if you
wish to consider him for some appointment at a
later date.
Mr. Day was born in Philadelphia in
1887. He 1s single. He lived in St. Louis and
was educated there. He worked as an auditor in
the Third National Bank in St. Louis and later was
8. dealer in municipal bonds. He was also Vice
Fresident of the Lambert Company of St. Louis.
Other names and references that he has
given, other than Mr. Smith, are:
Cerard B. Lambert, 78 Kalorama Circle,
Washington, D. C.
N. L. Hemingway, President
Mercantile Commerce Bank and Trust Co.
St. Louis, Missouri
John R. Shepley, Vice President
St. Louis Union Trust Co.
St. Louis, Missouri
Louis S. Brady, Vice President
Bankers Trust Co.
New York, New York
He also mentioned Eugene Sloan, to whom
I have spoken, and who speaks very woll of him.
us.
Regraded Unclassified
33
MAR 4 1942
My dear Mr. Perkins:
I am enclosing five copies of the
report on our exports to some selected
countries for the period February 11 to
February 20, 1942.
Sincerely yours,
(Signed) R. Morgenthau, se.
Secretary of the Treasury
Mr. Milo Perkins,
Executive Director,
Board of Meonomie Marfare,
2501 Que Street, N. W.,
Washington, D. C.
Enclosures
zme
Maarie
3:40
2/25/42
Regraded Unclassified
34
MAR 4 1942
My dear Colonel Donovan:
I am enclosing copy of report on our
exports to some selected countries for the
period February 11 to February 20, 1942.
Sincerely yours,
(Signed) 2. 4%
Secretary of the Treasury
Colonel William J. Donovan,
Coordinator,
Office of Coordinator of Information,
old National Institute of Health Building,
25th and E Streets, N. N.,
Washington, D. C.
Enclosure
n.m.c
By Manie
3.40
2/25/42
know
Regraded Unclassified
35
MAR 4 1942
Ry sear Mr. Secretary:
I an ensleeing copy of report on our
exporte to - selected countries for the
period February 11 to February 20, 1942.
Sincerely yours,
(Bigned) E. Mergenthau, Jr.
Secretary of the Treasury
the
Senerable,
the
Secretary of State,
Washington, D. C.
Include
nine
by Messemer Manus 40
-
deuja Here
Regraded Unclassified
36
MAR 4 1942
My dear Mr. President:
I an enclosing report on our exports
to some selected countries for the period
February 11 to February 20, 1942.
Faithfully,
(Signed) 1. Morgenthau. In.
Secretary of the Treasury
The President,
The White House.
Enelosure
n.m.
" Dr white
Secret dervicemenary
HDW: meh
By Messenger 3:50
2/25/42
Ret to Secipt office
Regraded Unclassified
32
March 2, 1942
Exports to Ruasia, Free China, Burea and other
blocked countries, as reported to the Treasury
Department during the ton-day period ending
February 20, 1942.
1. Exports to Russia
Reports to Ruasia, as reported to the Trassury during the
ton-day period ending February 20, 1942 amounted to more than
26 aillion. Landplanes and military tanks and parts accounted
for care than one-haif. (See Appendix C.)
2. Exports to Free China and Durma
Reports to Free China during the period under poview anounted
to a, "55 thousand. The principal items wore landplanes, motor
trucks and chassis and printed matter, (See Appendix D.)
Exports to Durma amounted to about 6585 thousand. Motor
Appendix B.)
thicks accounted for about one-third of this total. (See
3. RADORTS to France
No exports to France were reported during the period under
review.
4. Exports to other blocked countries
Exports to other blocked countries are Given in Appendix he
Regraded Unclassified
38
STRICTLY CONFIDENTIAL
NOT FOR PUBLICATION
SUMMARY OF UNITED STATES
DRESTIC STARTS TO SELACTED CONTRIBUS
AS REPORTED To THE TREASURY DEPARTMENT
FROM EXPORT DECLARATIONS RECEIVED
DURING THE PERIOD INLIGATED 2/
July 28, 1941 to February 20, 1942
(In thousands of dollare)
July 28
to
Puriod ended
Period ended
Total
Jane 32
Pubruary 10
February 20
Domestic Experts
11.5. S. n.
$108,157
$ 13,315
5 26,174
$ 147,646
Free China
37,093
4,899
4,853
46,835
sures 3/
9,445
1,054
583
11,082
France 1/
6
-
-
6
2
-
-
2
eupled Franco
2
Inscrupied Trance
+4
-
2
Spain
2,493
144
2
2,639
Switzerland
6,785
"
115
6,933
Senden
12,157
1,123
509
13,849
Portagal
5,674
223
548
6,245
French North Africa
w
1,747
4,536
-
6,283
Treasury Department, Division of Hometary Research
February 26, 1942.
Mary of the export declarations are received with - 1ag of several days or more.
Therefore this compilation does not securately represent the actual shipment of
a particular wook. The longer the period covered, the closer will these figures
cons to Department of Commerce revised figures.
3/ Trom September 11, 1941 to date - It is premismed that a large percentage of
asterial listed here, consigned to name, is destined for From China.
2/ Includes both Occupded and Proccupied France through week ending October 4, 1941.
Desupted and Incompled France separated thereafter.
W
Includes Moreess, Algeria et Tenista.
2/26/42
Regraded Unclassified
39
APPENDIX 3
Exports from the U. 5. to 7200 China, Burna and
as reported to the Treasury Department
July 28, 1941 - February 20, 1942
(Thousands of Dollars)
Exports to
Laporta to
Exports to
Free China
Dares 3/
it
July 28 - AUG. 2
395
4,523
AME. 4 - aug. 2
-
551
sug. 11 - AME. 16
309
986
Lug. 18 - AUG. 23
No
2.735
JUE. 25 - ARE. 29
1
1,023
gayt. 2 - Sept. 6
204
4.260
Dept. 5 - Sept. 13
2,281
5,217
Sept.15 - Sept. 20
3,822
752
Sept.22 - dept. 27
110
449
2,333
Sept.29 - Oct. 4
1,225
684
323
Cet. o - Dat. 11
5,312
1,157
0.845
Cot. 13 - Oct. 18
5
35
1,924
"ct. 20 - Oct. 25
269
403
5,623
at. 27 - liev.
1
4,772
58
4.48
Hove 5 - Nov.
8
1,672
342
4,552
Nov. 10 - Nov. 15
2,851
88
2,677
Nov. 17 - NOV. 22
1,228
1,021
3,581
Hov. 24 - Nov. 29
3,239
1,364
2,436
Dec. 1 - Dec.
6
791
&
3.609
Dec. E - Dec. 13
2,337
18
12,040
Dec. 15 - Dec. 20
111
8
4,580
Dec. 22 - Dec. 27
1
196
1,829
Dec. 29 - Jan.
3
35
2
5,993
Jan. 5 - Jan. 10
91
1,073
5,247
Jan. 12 - Jun. 17
1,695
447
5.874
Jan. 19 - Jan. 24
-
-
3,885
Jun. 26 - Jan, 31
6,938
923
9,608
Feb. I - Feb. 10 W
4,889
1,054
13,315
Feb. 10 - Feb. 20
4,853
583
26,174
Total
49,438
9,969
147,999
1. These figures are in part taken from copies of shipping manifests.
=. Figures for exports to Pree China during these weeks include
exports to Bangoon which are resumed to be destined for Free China.
3. It 1s preaumed that a large persentage of exports to Bures are
destined for Free China.
Declaring with February 1 figures will be given for 10-day period
instead of week.
TRANSURY Department, Division of Bonetary Research
March 2, 1942
Regraded Unclassified
40
APPENDIX C
Principal Exports from U.S. to U.S.S.R.
as reported to the Treasury Department
during the ten-day period ending
February 20, 1942
(Thousands of Dollars)
TOTAL EXPORTS
$26,174
Principal Items:
Landplanes (bombers)
4,912
Military tanks (light)
4,641
Landplanes (pursuit, intercepter and fighter)
2,831
Brass and bronze plates and sheets
1,961
Motor trucks and chassis
1,224
Military tanks (medium)
1,060
Explosive shells and projectiles
1,025
Wool cloth
881
Landplanes (partial shipment)
708
Relief supplies (surgical and hospital)
640
Copper wire (insulated)
555
Sole leather
466
Milling machines
399
Trinitro toulene (T.N.T.)
383
Copper wire (bare)
329
Netal-grinding machines and parts
318
Motallic cartridges
273
Other power-driven metal-working machinery and parts
271
Hilitary tank parts and accessories
261
Aluminum tubing
208
Lathes
163
Lubriesting oils
159
Nitrocellulose
153
Machine and sub-machine guns
149
Toluene
144
Molybdenum salts and compounds
124
Lard
123
Treasury Department, Division of Monetary Research
March 2, 1942
Regraded Unclassified
41
APPENDIX D
Principal Exports from U. 8. to Free China
as reported to the Treasury Department
during the ten-day period ending
February 20, 1942
(Thousands of Dollars)
TOTAL EXPORTS
$ 4,853
Principal Items:
Landplanes (pursuit)
936
Motor trucks and chassis
795
Printed matter (bank notes)
723
Netallic cartridges and belt links
313
Explosive shells and projectiles
308
Smokeless powder
291
Landplanes (partial shipment)
265
Machine and heavy ordnance guns
217
Auto replacement parts
77
Relief supplies (surgical and hospital)
62
Aircraft parts and accessories, n.e.s.
60
Treasury Department, Division of Monetary Research
March 2, 1942
Regraded Unclassified
42
APPENDIX E
Principal Exports from U.S. to Burma
as reported to the Treasury Department
during the ten-day period during
February 20, 1942
(Thousands of Dollars)
TOTAL EXPORTS
0 583
Principal Items:
Metallie cartridges
139
Motor trucks (1 to 1t tons)
128
Motor trucks (1) to 21 tona)
65
Aircraft propellers and parts of
43
Steel sheets, black
42
Evaported milk
33
Auto replacement parts
25
Rayon piece goods
21
reasury Department, Division of Monetary Research
March 2, 1942
ISP/ets
1/2/42
Regraded Unclassified
43
MAR 4 1942
Dear Mr. McCloy:
Thank you for your letter
of March 3, and the release in regard
to the evacuation of the Japanese from
the West Coast areas.
Sincerely yours,
(Signed) 1. Morgenthau, in
Hon. John McCloy,
Assistant Secretary of Ear,
Washington, D. C.
EHF:vls - 3/3/42
Original file to Iday
Copy of file an.m.
Regraded Unclassified
42
C
THE ASSISTANT SECRETARY OF WAR
o
P
Washington
Y
March 3, 1942
Dear Mr. Secretary:
I am sending you herewith 8. copy
of the proclamation and release which was
issued, I believe, this morning on the West
Coast in connection with the Japanese evacuees.
You will note that the substance of
it is merely to designate the areas, and that
no evacuations are 88 yet ordered, although the
classes of people to be affected by possible
evacuations in the future are also designated.
Sincerely yours,
John J. McCloy
The Honorable
The Secretary of the Treasury
Regraded Unclassified
CONFIDENTIAL
HEADQUARTERS WESTION DEFENSE COMMAND AND FOURTH ARMS
PRESIDIO OF SAN FRANCISCO, CALIFORNIA
PUBLIC proclemation NO. 1.
Murch 2, 1942
To: The people within the States of Arizona, Celifornia, Orogon, and
Washington, and the Public Generally.
WHEREAS, by virtue of orders issued by the Far Department on December
11, 1941, that portion of the United States lying +ithin the States of
Painington, Oregon, California, Montana, Idaho, Nevada, Utah and Arizona
and the Territory of Alaska has been established 58 the Western Defense
Commind and designated as a theatre of operations under my command; and
WHEREAS, By Executive Order No. 9066, dated February 19, 1942, the
President of the United States authorized and directed the Secretary of
War and the Military Commanders whom he my from time to time designate,
whenever he or any such designated commander deems such action necessary
or desirable, to prescribe military areas in such places and of such ex-
tent all he or the appropriate Military Commander may determine, from which
any or all persons may be excluded, and with respect to which the right of
any person to enter, remain in, or leave shall be subject to whatever
restrictions the Secretary of Rar or the appropriate military commander
may impose in his discretion; and
#HEREAS, The Secretary of War on February 20, 1942, designated the
undersigned a.3 the Military Commander to carry out the duties and responsi-
bilities imposed by said Executive Order for that portion of the United
States embraced in the Western Defense Command; and
WHEREAS, The Western Defense Command embraces the entire Pecific
Coast of the United States which by its geographical location is particu-
Larly subject to ettack, to attempted invasion by the armed forces of
nations with which the United States is now at war, and, in connection
therewith, 1s subject to espionage and acts of sabotage, thereby requiring
the adoption of military measures necessery to establish safeguirite Against
such enemy operations:
NOW THEREFORE, I, J. L. DeWitt, Lieutenant General, U. S. tray, by
virtue of the authority vested in ao by the President of the United States
and by the Secretary of War and my powers and prerogatives N.S Comminding
General of the Testern Defense Commund, do hereby declare that:
1. The present situation requires où a matter of military necessity
the establishment in the territory embraced by the Testern Defense Commend
of Military Areas end zones thereof sa defined in Exhibit 1, herete attached,
one as generally shown on the map attached hereto and mirked Exhibit 2.
CONFIDANCIAL
Regraded Unclassified
AC
CONFIDENTIAL
2. Military treat Nos. 1 and 2, 88 particularly described end generally
shown hereinafter end Le Exhibite 1 and 2 hereto, are hereby designated and
natablished.
3, Within Wilitary Areas Nos. 1 and 2 there Kre established Zone /-1,
1y10g whelly *ithin Militery Aree No. 1; Zones A-2 to A-99, inclusive, some
of which are in Military Area No. 1, and the others in Military Area No. 2;
and Zone B, comprising all that part of Military Area No. 1 not included within
Zoner A-1 to A-99 inclusive; all as more particularly described and defined
ARE generally shown hereinafter and in exhibits 1 and 2.
Military Area No. 2 comprises all that part of the Statem of Washington,
Orogon, California and Arizone which is not included within Military Arua No.
1, und 1a shown on the map (Exhibit 2) as an unshaded Jes.
L. Such persons or classes of persons as the situation may require will
by subsequent proclemation be excluded from all of Military Area No. 1 and
else from such of those sones herein described AB Zones A-2 to A-99, inclusive,
sa AIR within Military Area No. 2.
Certain persons or classes of persons who are by subsequent proclemation
excluded from the zones last above mentioned may be permitted, under certain
regulations and restrictions to be hereafter prescribed, to enter upon or
remain within Zone B.
The designation of Vilitary /rea No. 2 as such does not contemplate any
prohibition or regulation or restriction except with respect to the Lones
est blished therein.
5. Any Japanese, German, or Itelian Alien, or any person of Japanese
encestry nor resident in Military Area No. 1 who changes his place of
habitual residence is hereby required to obtain and execute a "Change of
Residence Notice" at any United States Post Office within the States of
Washington, Oregon, California and Arizona. Such notice must be executed at
any such Post Office not more than five days or less than one day prior to
effecting any such change of residence. Nothing contained herein shell be
construed to affect the existing regulations of the U. S. Attorney General
which require aliens of enemy nationalities to obtain travel permits from
U. 8. Attorneys and to notify the Federal Bureau of Investigation and the
Commissioner of Immigration of any change in permanent address.
6. The designation of prohibited and restricted sreas within the Teatam
Command by the Attorney General of the United States under the
Programtions of December 7 and 8, 1941, and the instructions, rules and
regulations prescribed by him with respect to such prohibited and restricted
and, are hereby adopted and continued in full force and effect.
The duty and responsibility of the Federal Bureau of Investig.illon <1th
to the investigation of alleged neta of empionage and sabotage are not
stared by this proclamation.
J. I., Doffie
Limitement Concerl, U. 1.
Committing
CONFIDENTIAL
Regraded Unclassified
CONFIDENTIAL
17
PRESS RELEASE:
March 2, 1942
Cracking down on unfounded rumors and co-celled "official statements"
regarding Pacific Coest evacuation, Lieutenant General J. L. DeWitt, Com-
mending General of the Western Defense Command and Fourth Army, declared today
that the decision as to who will be evacuated, from where, and when in a
silitary decision based on military necessity.
"Military necessity," said General DeWitt, "is the sole yardstick by
which the Army has selected the military areas announced. Public clamor
for evacuation from non-strategic areas and the insistence of local organisa-
tions end officials that evacuses not be moved into their communities
cannot and will not be considered. No one has been authorised to speak for
the in connection with my authority under the Executive Order, and all
statements and predictions coming from other sources should be disregarded."
The Commanding General declared that for two weeks the staff of the
Restern Defense Command and Fourth Army has made additional and final studies
of the areas involved. Proclamation No. 1, issued today, includes approx-
imately the west half of Washington, Oregon and Colifornia, and the south
bulf of Arisona, in military area No. 1.
The proclamation also imposes restrictions on the movement of persons
within the military sreas amounced. Any Japanese, German or Italian alien or
person of Japanese lineage changing his place of habitual residence either
from one place to another within the military area, or by leaving the
aree, is required to register the change. Post Offices have been designated
as the places where this registration will be nde. The Communding General
seid arrangements were being made to have registration forms issued these
offices as repidly 18 available facilities permit.
CONFIDENTIAL
Regraded Unclassified
- 2 -
48
CONFIDENTIAL
Regraded Unclas
In speaking of his proclamation, the Commending General indicated
that future proclamations forthcoming shortly will affect five classes
of people. These are: Class 1, all persons who are suspected of espionage,
sabotage, fifth-column or other subversive activity; Class 2, Japanese
aliens; Class 3, American-born persons of Japanese lineage; Class 4, German
aliens; Class 5, Italian aliens.
Persons falling in Class 1 are being apprehended daily by the Federal
Bureau of Investigation and other intelligence services. Evacuation from
military areas will be E. continuing process, the General declared. He
explained that persons in Classes 2 and 3 will be required by future
orders to leave certain critical points within the military areas first,
and that these areas will be defined and announced shortly. After exclusion
has been completed from around the most strategic areas, a. gradual program
of exclusion from the balance of military area No. 1 will be developed.
The General stated that German and Italian aliens will be next on the
list for evacuation, but they probably would not be affected until after
the Japanese had been removed. He said that German and Italian aliens of
70 years of age or over would not be required to move, except when individually
suspected, and that the parents, wived and children of Germans and Italians
in the armed forces would not be moved unless for some special reason.
Specifically directing his comments toward predictions of immediate
mass evacuation from Pacific Coastal areas, General DeWitt said: "Immediate
compulsory mass evacuation of all Japanese and other aliens from the Pacific
Coast is impracticable. Eventually, orders will be issued requiring all Japanese,
- 3 -
49
CONFIDENTIAL
including those who are American born, to vacate all of military area No. 1.
Those Japanese and other aliens who move into the interior out of this area now
will gain considerable advantage, and in all probability will not again be
disturbed. The appropriate agencies of the Federal Government are engaged in
far-reaching preparations to deal with the problem and a study is in progress
by these agencies regarding the protection of property, the resettlement and
relocation of those who are affected. The completed preparations will include
measures designed to safeguard as far as possible property and property rights,
to avoid the depressing effect of forced sales, and generally to minimize
resulting economic dislocations. As soon as these studies are concluded,
definite designation of territories and definite designation of persons to
be affected will be made."
*****
CONFIDENTIAL
Regraded Unclassified
MAR -
50 1942
March 4, 1942
Mr. Donald M. Nelson
Chairman
War Production Board
Social Security Building
Washington, D. C.
Dear Mr. Nelson:
I am pleased to know that you are having & status
report prepared of allocations covering the items under
the Moscow Protocol, which your letter of February 28th
states will be completed today.
The remaining time to make up existing deficiencies
before April 1st is limited, and it is most important
that the suppliers maintain production schedules in ac-
cordance with your allocation orders.
Since writing you I have received a further report
from the Procurement Division as of February 28th, which
indicates that the difficulty concerning some of the Items
has been overcome.
Sincerely yours,
(Signed) 1. Morganthuse in
Secretary of the Treasury
CEM/rm
By Momember Steem 11.00
surnome
any as
Regraded Unclassified
51
WAR PRODUCTION BOARD
WASHINGTON, D. C.
OFFICE OF
DONALD M. NELSON
CHAMMAN
February 28, 1942
Dear Mr. Secretary:
I have your letter of February 19 and the report
on the status of a few of the purchases under the Moscow
Protocol as of February 18, 1942.
I find several figures and statements in the report
which conflict with information available here and, rather
than send you a hastily prepared report on the status of
USSR requisitions considered by the WPB, I am having prepared
a complete account of such items of material and equipment
showing, specifically, the total Protocol requirements, the
amounts requisitioned, and the amounts allocated for delivery
or that will be made available for delivery by April 1. This
will be completed by March 4 and I will send a copy to you
at that time.
We are aware of the importance of meeting all
promises under this Protocol, and I assure you we will con-
tinue to do everything possible in this organization to ex-
pedite delivery of the materials and manufactured products
which we have agreed to make available.
Sincerely yours,
Whilulen Donald 11. Nelson
The Honorable
The Secretary of the Treasury
Regraded Unclassified
MAR 4 1942
March 4, 1942
Mr. Thomas B. McCabe
Deputy Administrator
Office of Lend-Lease Administration
515 - 22nd Street, N. W.
Washington, D. C.
Dear Vr. McCabe:
The concern expressed in your letter of March 2nd
because of the present Russian cargo situation is thor-
oughly understood and appreciated.
I have directed that the Procurement Division con-
tinue to exert every effort to follow up each order close-
ly and particularly to expedite shipments of heavy cargo
to shipside.
You may reat assured that everything within our
power is being done.
Sincerely yours,
(81gmad) 1. Bergantian, St.
Secretary of the Treasury
CEM/rm
By Membership -
carry us
Regraded Unclassified
53
OFFICE OF LEND-LEASE ADMINISTRATION
FIVE-FIFTEEN 22d STREET NW.
WASHINGTON, D.C.
March 2, 1942
3/3/42
The Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
Dear Mr. Morgenthaur
Ne are very grateful for the splendid cooperation of the
Treasury Procurement in accelerating purchases for the Soviet
Union.
Knowing your vital interest in the protocol and your
offorts in urging compliance with the President's directive in de-
livering the backlog, with certain amendments, by April 1st, I
thought you would like to know that Mr. Mack end his associates are
speeding up their procedure in placing contracts and expediting
deliveries.
As you know, ocean shipping has been the chief bottloneck,
but after e long hard struggle we succeeded in obtaining a consider-
able number of ships last week and promises of 8. larger number this
week and the succeeding weeks of March.
Now the responsibility is squarely up to the various
procurement agencies and ourselves to expedite deliveries to the
ports. At the moment there is available considerable quantities of
trucks and other bulky items, but the important need is steel and
other heavy cargo for balanced loading, of which the tonnage for
immediate delivery is inadequate. Your procurement office is fully
uware of the requirements and is exerting great pressure to obtain
the necessary material, but I thought you and Mr. Swope should know
the seriousness of the problem.
With kindest regards,
Sincerely,
Thomas B.W.: Calu
Thomas B. MoCabe
Deputy Administrator
Regraded Unclassified
TREASURY DEPARTMENT
54
INTER OFFICE COMMUNICATION
DATE March 4, 1942
Secretary Morgenthau
TO
Mr. Kamarok
FROM
Subject:
German Aircraft Production (based on Ministry of
Economic Warfere reports)
1. From January 1, 1941, to December, 1941, German
aircraft production increased by one-third, or from 1,900
military planes 8. month to 2,500 8. month. Plant extensions
which are being made may increase this output by another
15 to 20 percent, or to a total of about 3,000 planes A
month. (The production in Poland and Czechoslovakia is
included in these figures. The production of Italy and
the other occupied countries would boost the total by
another 600 to 700 planes a month. The present European
Axis production would be, then, probably around 3,300 a
month, with 8. possible figure of 3,700 per month this
year.)
2. In 1941, it 1s estimated that the Germane produced
8 total of 26,000 planes. (At the same time, Italy and
the other occupied countries probably produced around
7,000 planes, giving a total Axis production of 33,000
military planes in 1941.)
3. The main factor limiting expansion of the German
sircraft industry 1s the size of the labor force. Raw
materials are not 8. bottleneck; the amount of aluminum
and magnesium required is only a small portion of the
total German production.
By the end of 1941, there were around 900,000 workers
in the whole German aircraft industry. Probably 150,000
workers were added to the industry in the course of 1941.
Most of this addition was composed of imported male labor.
It 1s believed that the reserves of female labor in
Germany are exhausted. Further expansion in output can
come only from further rationalization, sub-contracting,
diverting labor from other war work, recruitment of foreign
labor, and the placing of orders in the occupied countries.
Regraded Unclassified
2
55
Due to the shortage of labor, only two shifts are
worked in the plane factories. The average working week
le 60 hours, 1.e., the average machine is used only 120
houre per week out of a possible maximum of 168 hours.
4. In order to keep production at its maximum, no
fundamental changes have been made in aircraft design
during the war. Germany 1s not developing new military
types to anything like the same extent that England and
the United States are. Many of the planes, publicized
98 new German types, were either developed 98 prototypes
before the war, or are merely modified and improved
versions of existing standard types. By making few type
changes, and BO avoiding the six to nine months decrease
in production that a changeover requires, Germany has been
able to produce constantly at her maximum. (This policy
might well lose the war for Germany. It gambles on
gaining 80 much in the short-run that the long-run dis-
advantages of this policy can be discounted.)
(Comment: Thie type of information would be more signi-
ficent If it could be compared to American production
figures. I have been informed by A fairly reliable source
that Mr. Lubin has made arrangements for unofficial liaison
representatives of several of the Cabinet Members [who do
not receive copies of the Armaments Statistics progress
reports 7 to see the American production statistics once
A month. Perhaps an arrangement of this sort could be
worked out for the Treasury.)
Regraded Unclassified
56
TELEGRAM SENT
ELP
March 6, 1:42
This tele rar must be
periphrased before being
2 P.E.
masmunicated to anyone
other than a Governmental
neency. (BR)
AMEMBASSY,
CHUNCKING. (CHINA)
147
TO ADLER FROM FOX FOR TRANSMISSION TO THE
STABILIZATION BOARD.
QUOTE 1. The United States Treasury has
accumulated a backlog of about 40 CASER involving
Either (1) trensfers from United States dollar
anonunts in the names of individuals or firus held
by appointed banks in Occupied China to nccounts
16. the United States in the names of the Andivid-
cale or firms, or (2) transfers from accounts
carried by banks in the United States in the names
02 individuals or firms comiciled in Occupied
China. The total value I these dollar transfers
is about United States $500,000. American nation-
als are the beneficiaries of nearly 21 as the
approximately United States 500,000.
2. ThESE 088ES have accumulated over 3
period
Regraded Unclassified
57
-2- #147, March 4, 2 pame to Chungking.
period of time, all before December 7 and many
of them a considerable period of time previous
to December 7. These applications have not been
acted upon because of the desire of the United
States Treasury to obtain the prior approval of
the Stabilization Board, EVEN though this drlay is
resulting in personal hardships to individual
Americans, The licensing of these transactions will
not result in a drain the Board's resources.
3, I have examined the individual applica-
tions; find snme of only indirect interest to the
Board, and SEE no objection to the United States
Treasury approving these transactions. I find con-
firmation of disposition of United States Treasury
not to act on cases involving China without the
Board's previous approval. If the Board's per-
mission is granted, the United States Treasury is
prepared to license these transactions.
4. I recommend that the Board inform the
United States Treasury that it has no objection to
the above transactions heing licensed by the United
States Treasury and that I be recorded as joining
in such spproval.
5. A reply to your cable of February 3, 1942,
No. 84, 18 being prepared and shall be sent to you
65 soon as possible. EWD QUOTE
WELLES
Acting
D: D:L:ME
TE
(FL)
Regraded Unclassified
58
TELEGRAM SENT
WWIT
GRAY
March 4, 1942
7 p.m.
AMERICAN LEGATION,
CAIRO, (SGYPT).
184
FROM TREASURY.
PHOTE 1. To facilitate the negotiction of
checks drawn on the Treasurer of the United States
and United States currency, the following procedure
is suggested.
2. All United States dollar checks drawn on
the Treasurer of the United States negotinted by
Borclays Bank (D. C. & O.), Cairo are to be deliv-
tred to the American Legation, Cairo, accompanied by
list in triblicete with complete description each
check as follows: Name of drawer; symbol number;
check number; amount; payee's name: date of check.
Consular officer will carefully verify checks
-gninst list and advise Treasury by wire through
State Department aggregate amount of checks delivered
by bank. Upon receipt of this advice, "rensury will
effect payment in corresponding amount to Barclays
Bank
Regraded Unclassified
59
-2- 184, March 4, 1942 to Cairo, (Egypt)
Bank (D. C. & O.), NEW York, for account of its
Cairo Branch,
Consular officer should instruct Barclays Bank
(D. C. & O.) to use all possible diligence in identi-
fication of payee and determining validity of Endorse-
ments, Barclays Bank (D. C, & 0.), Cairo, should
Endorse checks ns follows: INTER QUOTE Pay to the
order of the Transurer of the United 3tates for credit
of our cocount with Barclays Bank (D. C. & 0.), NEW
York. Signed Barclays Bank (D. C. & O.), Cairo,
Egypt. END INNER QUOTE. Treasury will look to
Barclays Bank (D, C. is O.), Cairo, only for usual
guarantee under love applicable in Egynt.
Consular officer should forward checks accom-
penied by one copy of list to Treasurer of United
3tates, Washington, as promptly as possible by
safest means available, 3econd cony of list should
follow by separate carrier at carliest possible date,
Third cony should be retained by consular officer.
3, In the CASE of EXCESS United States paper
currency, instruct Barclays Bank (D. C. & O.) to
prepare list in quadruplicate showing the amount of
Each denomination of each kind of currency separately,
and for
Regraded Unclassified
59
-- "184, March 4, 1942 to Coiro, (Sgypt)
Bank (D. C. &: O.), NEW York, for account of its
Ceiro Branch.
Consular officer should instruct Barclays Bank
(D. C. P: 0.) to use r.ll possible diligence in identi-
fication of nayee and determining volidity of Endorse-
ments. Barclayo Bank (). C. : 0.), Chiro, should
endorse checks C.3 follows: INTER QUOTE Pay to the
order of the Trensurer of the United 3tetto for credit
of our account with Barclays Bank (D. C. " 0.), HEY
York. Signed Barolays Benic (D. C. & O.), Cairo,
Egypt. END INNER QUOTE. Pressury will look to
Perclays Bank (D. C. & O.), Coiro, only for usual
guarantee under Into applicable in Egynt.
Consuler officer should forward checks accom-
ornied by one cony of list to Treasurer of United
3totes, Washington, 0.3 promptly na nossible by
onfest menns ovailable, 3800nd cony of list should
follow by separate carrier cb corliest possible date,
Third cony should bE retained by consular officer.
3. In the CF3E of EXCE38 United States ORDER
SUPPENCY, instruct Bereleys Bank (D. C. & 0.) to
TEEDERE list in quodrublicate showing the amount of
sach denomination of sech kind of currency secorately,
and for
Regraded Unclassified
60
-3- 184, March 4, 1942 to Cairo, (Egyot)
and for Federal Reserve notes end for Federal RESERVE
Bank notes, the list must-show separately the amount
of ecoh denomination of the issue of each bank, cut
currency in half vertically and stemp or write name
of bank on each half in ink. Then deliver both
halves and list in quadruplicate to American Legation,
Cairo,
4. Consular officer will verify amount of currency
delivered to him ngainst list prepared by bank and then
he will wire Treasurer of United States through State
Department the amount of currency delivered to him.
When Treasury receives this advice, payment in
corresponding amount will be made to Barclays Bank
(D. 0. 8: O.), NEW York, for account of its Cairo
branch. Upon receipt and examination Treasury reserves
right to claim reimbursement for any currency which
is not genuine. Ench set of halves should be for-
warded by separate carrier accompanied by n copy of
the list. The third copy of list should bE forwarded
by still another carrier. American consular officer
Fill retain fourth copy of list.
5. Consular officer should make no orrengements
for insurance ns shipments of both checks and currency
will bE
Regraded Unclassified
61
⑉4⑉ /184, March 4, 1942 to Cairo, (Egypt)
will bE covered by Government LOSSES in 3hinment Act.
6. Please advise Boroleys Bank (D. C. i: O.),
Oniro, of appropriate parts hereof with the suggestion
that it advise 1ts branches in adjecent countries and
banks in Cairo of these arrangements.
7. Please advise Major R. E. Odell, F. D.,
U. 3. Army, Cairo, of the contents of this message and
inform other United States Government officials appro-
prints parts hereof.
8. To minimize number of checks drawn on
Treasurer of United States, suggest that you advise
disbursing officers that they should cable through
their respective departments their local currency
requirements. Arrangements will then bE made to
ndvance dollar credits to Barclays Bank (D. C. & 0.),
Cairo. END QUOTE
The Department approves the foregoing. Any
EXDENSE incurred in carrying out the instructions
contained in this telegram should bE included in
regular accounts 0.3 separate item for billing Treasury
in accordance with Sec. V - 45, Foreign SERVICE
Regulations.
WELLES,
ACTING
(FI,)
FD:FL:ME
NE
D/.
FA
Regraded Unclassified
62
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
DATE March 4, 1942
TO
Secretary Morgenthau
PROM Mr. Dietrich
CONFIDENTIAL
Registered sterling transactions of the reporting banks were ae follows:
Sold to commercial concerns
£46,000
Purchased from commercial concerns
£ 2,000
Open market sterling remained at 4.03-3/4. The only reported transaction
consisted of £2,000 purchased from a commercial concern.
No supreciable change took place today in New York quotations for foreign
currencies. Closing rates were as follows:
Canadian dollar
11-1/2% discount
Argentine peso (free)
.2370
Brazilian milreis (free)
.0516
Colombian peso
.5775
Mexican peso
.2065
Uruguayan peso (free)
.5275
Venesuelan boliver
.2800
Cuban peso
3/8% premium
There were no gold transactions consummated by us today.
The Federal Reserve Bank of New York reported that the Bank of Canada shipped
12,568,000 in gold from Canada to the Pederal for account of the Government of
Canada, for sale to the New York Assay Office.
In London, spot end forward silver remained at 23-1/24. equivolent to 42.67d.
The Treasury's purchase price for foreign silver was unchanged at 354. Handy
and hermen's settlement price for foreign silver was also unchanged st 35-1/81.
% made no purchases of silver today.
X
Regraded Unclassified
62
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
DATE March 4. 1942
TO
Secretary Morgenthau
FROM Mr. Districh
CONFIDENTIAL
Registered sterling transactions of the reporting banks were as follows:
Sold to commercial concerns
£46,000
Purchased from commercial concerns
£ 2,000
Open market sterling remained at 4.03-3/4. The only reported transaction
consisted of £2,000 purchased from a commercial concern.
No appreciable change took place today in New York quotations for foreign
currencies. Closing rates were as follows:
Canadian dollar
11-1/2% discount
Argentine peso (free)
.2370
Brazilian milreis (free)
.0516
Colombian peso
.5775
Mexican peso
.2065
Uruguayan peso (free)
.5275
Venezuelan bolivar
.2800
Cuban peso
3/8% premium
There were no gold transactions consummated by us today.
The Federal Reserve Bank of New York reported that the Bank of Canada shipped
$2,568,000 in gold from Canada to the Federal for account of the Government of
Canada, for sale to the New York Assay Office.
In London, spot and forward silver remained at 23-1/24, equivalent to 42.67#.
The Treasury's purchase price for foreign silver was unchanged at 35$, Handy
and Earman's settlement price for foreign silver was also unchanged at 35-1/84.
We made no purchases of silver today.
X
Regraded Unclassified
7
Treasury Department
63
Division of Monetary Research
Date
March 4, 1942
19
Secretary Morgenthau
To:
From:
Mr. Kamarck
1. The attached letter from Lord Halifax
states that the distribution of all
British military reports 18 to be
undertaken by the American section
of the Combined Chiefs of Staff
Secretariat. Therefore, he will
have to stop sending copies of the
Britien "operational" reports to you.
2. These reports have been very useful
and, I believe, it would be desirable
to have them continued.
3. General Smith is the Secretary of the
Combined Chiefs of Staff organization.
Should we attempt to work out an
arrangement for the continued receipt
of these reports through General Smith?
yes
MR. WHITE
Branch 2058 - Room 214
Regraded Unclassified
64
MAR 4 1942
Excellency:
This is to acknowledge your letter of February
28, stating that the distribution of all British
documents on the military situation to United
States authorities will be undertaken in the future
by the Secretariat of the Combined Chiefs of Staff.
I want to thank you for having kept as informed
of developments in the war during the past year, by
sending ne copies of your operational telegrams.
four kindness was approciated.
Tours respectfully,
(Signed) 1. 100
Secretary of the Treasury
His Excellency,
The Anbassador of Great Britain,
Washington, D. C.
Idenms
By Members 2 40
FILE COPY
Regraded Unclassified
65
BRITISH EMBASSY
WASHINGTON, D.C.
28th February, 1942.
Dear Mr. Secretary,
With the completion of the secretarial
arrangements for the Combined Chiefs of Staff
Committee, the Secretarist of the Combined Chiefs
of Staff have agreed that it would simplify
matters considerably if the distribution of all
British documents concerning the military situation
to the United States authorities were undertaken in
its entirety by the American section of the Combined
Secretariat, and if accordingly the direct dis-
tribution of any such papers by this Embassy were to
cease.
Such an arrangement will obviate possible
misunderstandings and overlapping, and should also
accelerate the distribution of individual papers.
In view of the adoption of this procedure I would
therefore/
The Honourable
Henry Morgenthau, Jr.,
United States Treasury,
Washington, D.C.
Regraded Unclassified
66
BRITISH EMBASSY
WASHINGTON, D.C.
- 2 -
therefore propose to cease, as from March 1st,
sending you direct from this Embassy copies of the
daily British "Operational" telegrams.
Believe me,
Dear Mr. Secretary,
Very sincerely yours,
Halifax
67
RESTRICTED
MID 319.1
Situation
No. 648
M.I.D., W.D.
11:00 A.M., March 4, 1942.
8-11-41
SITUATION REPORT
I. Pacific Theater.
Philippines: In a surprise air aveep, American planes de-
stroyed more than 30,000 tone of Japanese shipping in Subio Bay, fired
docks at Grande Island and Olongapo, causing numerous explesions. No
change in the ground situation. Burma: Fighting of a sporadic nature
18 reported along the Sittang River, where small Japanese forces are
raiding the Rangoon-Mandalay road. Japanese forces are being steadily
reinforced. Java: Japanese aircraft are reported as operating from
at least one airdrome seized on Java in supporting land operations.
Australia: Port Darwin was attacked on March 3 by Japanese aircraft.
The Japanese-cccupied town of Gasmata in New Britain was attacked by
the R.A.A.F. on the same date,
II. Western Theater.
The R.A.F. bombed industrial suburbe of Paris for two hours.
III. Eastern Theater.
The German High Command admita heavy Russian attacks on all
fronts. No change in the general situation. (A situation map vill not
be issued this date.)
IV. Middle Eastern Theater.
Ground activity 18 increasing. Press reports Axis aerial
bombing of Suez Canal on March 3.
RESTRICTED
Regraded Unclassified
68
March 5, 1942
9:09 a.m.
Randolph
Paul:
.....and I'm going up today instead of Monday.
HMJr:
Oh, really?
a:
They a dvanced the time; they got through the
Cochran hearings.
HMJr:
What happened on the Cochran thing?
P:
Well, I don't know; you see, we didn't send
anybody up simply because we relied on our
written record. We arranged that with the clerk;
we didn't do that because we'd made our position
clear and we didn't want any public fight be-
tween us and the War Department.
HMJr:
I see. But they're starting you off today.
P:
Yeah. I'm going up at ten o'clock today.
HMJr:
Well, good luck.
P:
Mr. Doughton called up yesterday afternoon and
said some very kind words.
HMJr:
Did he?
P:
And also he told me that - I told Dan Bell
about it - he wants a memorandum from you on
the debt limit bill. I told Dan about that.
HMJr:
I see.
P:
But he was very pleasant and 80 on, but I don't
know what they'll be like today.
HMJr:
Well, I'm not worried how you'll handle your-
self after what you did the other day.
P:
Yeah. Well, I've got some stuff. If I'd had
until Monday, I'd have a little more material;
but I've got some pretty good stuff all along
the line on what I think they're going to ask
about.
Regraded Unclassified
69
- 2 -
HMJr:
You've got that stuff that I've gotten from
that woman on this low income family, haven't
you?
P:
Roy has that, I'm sure. I've got the basic
figures. I haven't got that material, but
I'm sure Roy has it.
HMJr:
Well, if they bring it up.....
P:
I'll make a note of it.
HMJr:
You know, no paper ran that, so I'd like you to
make an effort to get that in.
P:
All right.
HMJr:
Because none of the papers ran that before. I
mean, my using it, you know.
P:
Yeah. All right, I'll check that with Roy.
HMJr:
Good luck.
P:
Thank you.
70
March 5, 1942
11:00 am
GENERAL ANILINE AND FILM
Present: Mr. Foley
Mrs. Klotz
Mrs. Morgenthau
H.M.JR: Are you ready for some good news?
MR. FOLEY: Yes.
H.M.JR: The President said to proceed at once
with Aniline and these other two. He said to go ahead
and clean them up. He said - he took our memorandum
on the West Coast thing and he liked the idea, and he
said he would take it up right after lunch, and he
said that - but that isn't the thing that was worrying
him. "What are you going to do with these people once
they get there? Why can't they go to Texas?" "Well,
after all, Mr. President, that isn't us." And I said,
"What McCloy is worrying about is--"
MR. FOLEY: Getting them there.
H.M.JR: If is to get them started, and they are
not ready to go until a week from Monday. You can't
get the volunteers and the property and so forth and so
on." So he said, "Well, I am not worrying about that.
What I am worrying about is what is going to happen
to them when they get there." I said, "Well, they won't
get there until you do this. He said, "Well, I will
take it up right after lunch," and he said, "The other
three things, go ahead." He said, "Go on.
MR. FOLEY: Good.
Regraded Unclassified
71
- 2 -
H.M.JR: I said, "Mr. President, as far as I am
concerned, my advice is let us do it now. If two
weeks or three weeks from now you want to take it away
from us, anything to win the war, I don't care, If but
I said, "We want to win the war over here." And then
he asked me one question, "Who was the man next to you
who is going to handle this thing?" So my hunch is
somebody has been talking about Bernstein. So I said,
"The man that would handle it would be Pehle." Was
he any relation to the man in Columbia Broadcasting
Company, and I said, "None." Now, Ed, you said you
would have somebody in there by Monday, and have O'Connell
in this afternoon.
MR. FOLEY: I will.
H.M.JR: And I will see O'Connell.
MR. FOLEY: Joe O'Connell?
H.M.JR: No.
MR. FOLEY: Robert E. McConnell?
H.M.JR: Yes, I am ready at two thirty. Is
Joe out?
MR. FOLEY: No, I will get him down here.
H.M.JR: Where are you on this other business?
MR. FOLEY: Well, I'm waiting to hear from McCloy.
McCloy had to go to Agriculture and he is calling me,
and we will go and see Smith as soon as he is free
over there.
H.M.JR: Should I tell him that the President sort
of likes the thing, that the thing he is worrying about
is the other end of it?
MR. FOLEY: I think it would be 8. good idea to get
that message to him. Otherwise, he will wonder how
the President found out about it. We were over there
this morning on something else and didn't mention this.
Regraded Unclassified
72
- 3 -
H.M.JR: The President treated everybody else
terrible, Sam Rosenman and everybody. They said,
"Gee, we won't ask the President a thing, we will get
out of here." I had three-quarters of an hour, and he
said, "Henry, honestly, the Attorney General isn't
interested in the Aniline and Dye. What he is interested
in is the Japanese." I said, "Honestly, Mr. President,
for once I think that you are being taken in."
MR. FOLEY: Good for you.
H.M.JR: I said, "Well, after all, you have trained
me to be suspicious, and I have got good reason to be
suspicious.' I said, "We have picked up certain stuff."
MRS. KLOTZ: You didn't show him that statement.
H.M.JR: No. I told him, "Mr. President, I am
not taking your suggestion because I want the stuff.
I don't care what you do to win the war. If two weeks
from now or a week from now, you want to give it to
somebody else, it is all right with me, but this is
just a suggestion 50 that the Army can move these people
out at once instead of waiting for two weeks."
MR. FOLEY: That is right.
H.M.JR: I mean, I want you to know, and I said,
"If you take my advice, this Aniline thing is a dirty
piece of business, and I was going to clean it up and
tell you nothing. If you want me to do it, we will
go ahead just as long as you say so." So, he said,
Well, go ahead. He said, "Don't wait for anything."
MR. FOLEY: O.K.
H.M.JR: Now wait a minute, until I get McCloy
on the phone. Well, he is out of his office for half
an hour.
MR. FOLEY: I guess he is in Agriculture, because
I talked with Gill, and Gill said he was going to be
over there, and he said he would be in the South Building
Regraded Unclassified
73
- 4 -
somewhere. He said, "I will get word to him as soon as
at Budget on his way back.
he leaves there to call you, and he said he would stop
H.M.JR: When Foley gets to McCloy's office last
night, who should be sitting there but Harrington Gill.
MRS. MORGENTHAU: Is he working for McCloy now?
MR. FOLEY: Apparently he is working with McCloy
on this West Coast evacuation problem.
MRS. MORGENTHAU: Oh, for Landis. You see, Landis
would be interested in that, I should think. It is
under Civilian Defense.
MR. FOLEY: I should think so too.
MRS. MORGENTHAU: And he works with the regional
people.
MR. FOLEY: Well, that must have been it. All
right. Well, I will go out and get started.
H.M.JR: Yes. Oh, I will see you and your gang
at two thirty.
MR. FOLEY: All right.
H.M.JR: And we will go to town. I expect to put
McConnell in tomorrow.
MR. FOLEY: All right. I will see if I can find
him.
H.M.JR: Or tonight.
MR. FOLEY: All right. I have got to find him
first. The last time I talked with him he was in
Shreveport, Louisiana, but he said he would be back
Thursday, today.
H.M.JR: Well, we will start the wheels going, Ed.
MR. FOLEY: I will.
Regraded Unclassified
74
SUGGESTED PROGRAM FOR THE FEDERAL RESERVE BANK
OF AS FRANCISCO AND OTHER PUBLIC AGENCIES TO
DEAL WITH PROPERTY OF EVACUEES FROM PACIFIC
COAST MILITARY AREAS.
The success of the proposed program will depend upon placing
complete responsibility for its execution in & responsible West Coast
agency acting under the general direction of the local military
authorities.
I - Scope of Problem:
The evacuation on short notice of tens of thousands of persons
from Vilitary Áreas on the Pacific Const raises serious problems in con-
section with the liquidation of their property holdings and the protection
of the property of such persons against fraud, forced sales, and unscrupu-
lous creditors. Obviously the emergency will cause financial loss to the
group involved. However, the following program In intended to accord to
this group reasonable protection of their property interests consistent
with the war effort.
I - Logal Authority:
Since the program is one basically to assist the evacuee in the
liquidation of his property, it is expected that in most instances the
evacuee will voluntarily avail himself of the facilities afforded by this
program. Governmental sanctions will be necessary to deal with creditors
and others who seek unfair advantage of the evacuees. There is ample
logal authority now vested in the military authorities and in the Treasury
Department which can be delegated to such West Coast agency to deal with
this problem without necessity of obtaining further legislation or new
executive orders.
III - Administration of Program:
The nature and urgancy of the situation, coupled with the large
volume of transactions that will require prompt handling, necessitates
the program's being administered by an agency on the West Coast cloaked
with full authority to act without reference to Washington. The over-all
control of all aspects of the evacuation must obviously rest in the military
authorities. Subject to this over-all control by the Army, the direct
responsibility for the execution of the pro erty aspects of the program
should be placed in the Federal Reserve Bank of San Francisco, which has
branch offices in Los Angeles, Seattle, and Portland. The Federal Reserve
Regraded Unclassified
- 2 -
75
1k will be in 8. position to obtain the cooperation of other Government
gencies, and of well-known and experienced individuals and institutions
La the various communities throughout the West Coast area. This coopera-
tion, together with the established integrity and ability of the Federal
Loberve Bank, will enlist the confidence of all of the affected groups
and discourage gouging by creditors or other self-seeking interests.
The Federal Reserve Bank will also work in close liaison with
the Federal Security Agency, the United States Department of Agriculture,
and other Federal, State, and local public agencies that can be of
sesistance in dealing with the property during the course of its liquida-
tion. These agencies will undoubtedly be called upon by the military
authorities to handle other aspects of the evacuation problem, such as
the transportation and resettlement of the evacuees, and their reemploy-
ment in new areas.
The Federal Reserve Bank of San Francisco, which is the fiscal
agent of the Treasury Department, will be clothed with ample authority
to execute the program. The Treasury Department will lay down the broad
principles and objectives of such program as well 8.8 the general procedure
to be followed. The Department will also furnish the San Francisco Bank
by airplane with the requisite number of trained experts to assist in
mrking out the details of the program in the field and to participate
its execution. If need be the Department is in B. position to provide
the San Francisco Federal at once with 100 or more men for this purpose.
The keynote of this program is speed. It is believed that it
can be put in operation by Monday, March 9, 1942.
IV - Outline of Program.
4. Properly staffed offices under the direction of the San
Francisco Federal Reserve Bank will be opened at once in the local
communities from which evacuees will be moved.
B. Announcement will be made throughout the area by the Federal
Reserve Bank of San Francisco that its representatives in these offices
are prepared to assist evacuees with the problem of liquidating their
property and protecting them against those seeking to take unfair advan-
tage of their plight.
C. These representatives will assist in putting the evacuees in
= position to obtain buyers, lessees, and other users of their property
on fair terms. In cases where the evacuee is unable to select his own
agent to dispose of his property, the Federal will be prepared to act 88
Acent for the evacuse under B. power of attorney or similar arrangement and
:e steps to liquidate the property on fair terms.
Regraded Unclassified
76
-3-
D. Evacuees threatened by creditors will be encouraged to
come tothe representatives of the Federal for advice and guidance.
The Federal representative will also discuss the matter with the
creditor with the view to working out a fair settlement and limiting
the remedies that may be pursued by the creditor who threatens un-
fair action. By and large the mere existence of this program of help-
ing ovacuees will eliminate or forestall most of the sharp practices
that are now feared.
E. In some cases the property of the evacuee may be such
that its real value can only be realized at 6. future time, e.g., Jap-
anese novelties. In such cases the Bank's representative will assist
the evacuee in arranging for the storage of such property if that is
the wish of the evacues.
F. On agricultural properties the Bank's representative,
with the assistance of representatives of the U. S. Department of
Agriculture, will attempt to arrange for the leasing or sale of such
property or if need be for the growing of the crops, with 6 view to
preventing their loss through inattention.
G. The Federal Reserve Bank of San Francisco and its
representatives will be cloaked with adequate authority to cope with
problems arising on the basis of existing circumstances. The program
will be flexible and at all times the Bank will attempt to keep matters
on a voluntary basis, satisfactory to the evacuee. Where these af-
forts fail it may be necessary for the Bank's representative to step
in and take the property over for the purpose of obtaining a fair and
reasonable liquidation.
It is expected that the setting up of this program and the
accordance to the evacuees of facilities for the liquidation of their
property should greatly expedite the departure on & voluntary basis
of the evacuees from the military area.
3-4-42
Regraded Unclassified
77
March 5, 1942
I told McCloy about having seen the President
this morning, and that he was interested in what
happened to the Japanese after they get moved -
not in what happened to their property.
Pearaded
3/5/42-
78
THE SECRETARY OF THE TREASURY
WASHINGTON
MEMORANDUM FOR THE PRESIDENT:
Re: General Aniline and Film Corporation.
On December 12, 1941 the Treasury installed
representatives in each of the properties of General
Aniline and Film Corporation for the purpose of super-
vising the activities of the company and making an
investigation of its affairs and personnel. Since
that time we have been proceeding as rapidly as may be
with 8. program of Americanization of the company and I
should like to summarize the developments up to date.
1. On January 13, 1942 we suspended five
key executives of the company. They were: Rudolph
Hutz, Vice-President; William vom Rath, Vice-President;
Hans Aickelin, Director of Research; Leopold Eckler,
Acting Plant Manager, Agfa Ansco Division; and William
von Meister, head of the Ozalid Division. Subsequent
events have confirmed our belief that this action was
RODEFENSE necessary, and it is contemplated that these men's
BUY FIFTED connection with the company will be completely severed
FATES
wisses
$03.00
-
Regraded Unclassified
79
- 2 -
in the near future.
2. Our investigation of the personnel of
the company has brought to light a substantial number
of individuals who are pro-Nasi in sympathy and who
would, if retained in the company, constitute a
definite threat to its continued operation. In each
such case we have made the information we have un-
earthed available to the Federal Bureau of Investiga-
tion and, after clearing with F.B.I., have discharged
them. So far, 39 employees of the company have been
discharged because of serious doubt as to their loyalty.
Of this number, the company, with our approval, dis-
charged 15, but refused to discharge the others at
our direction and we were required to take action on
our own.
Of the employees discharged, 5 have since
been arrested by the Federal Bureau of Investigation
as enemy aliens, and I am informed that the arrests
were based at least in part upon information furnished
by us to the F.B.I.
3. On February 17, 1942 the Treasury took
title to over 97 percent of the outstanding stock of
Regraded Unclassified
80
- 3 -
General Aniline and Film Corporation, all foreign, and
we think German, owned. On the same day a discussion of
the general situation was had between Judge Mack,
William C. Bullitt, Homer Cummings, Ralph Budd, Leo
Crowley, Gerard Swope, and Ed Foley. At the end of the
discussion it was clearly understood that we would
select of competent, qualified man to run the company for
the Government and that after he had been installed, the
present management and board of directors will resign
and turn the operation of the company over to our man.
Our understanding with Judge Mack and the members of the
board is that they will stay on and help until our man
has his feet on the ground.
Although you have heretofore approved our pro-
gram for Americanizing the company and vesting its
stock in the Secretary of the Treasury, I wanted again
to bring the situation to your attention before taking
the final step which is the actuel displacement of the
existing management.
Regraded Unclassified
The purpose of this latter La to Inform you of the policy
LOSS (be Government proposes to pursue in handling the General Aniline
File Corporation.
Our program envisages the elimination of all things in
Genoral Aniline 6 Film Corporation representing control by German
Interests. These controls stemmed in the first instance from owner-
mip of the corporation by I. 0. Farbenindustrie which, in Mazi
Company, has been its staunchest bulwark and full partner. In
dealing with its satellites outside of Germany, I. G. Farben
developed an extensive and well-organized system of controls, Men
ware trained in I. O. Farben methods and techniques in the home
office and plants, Some of these men were able technical men, others
were younger sons of the dominant families within the organization,
but all of them were men whose loyalty to I. G. Farben was
enjuestioned and none of them would have been appointed to such
important industrial posts outside of Germany if such had not been
the case.
AS soon as they were trained they were sent to various
countries where they were placed in key technical or administrative
positions in companies KL thin the I. G. Farben sphere of influence.
They were encouraged to marry within the new country and acquire its
citizenship, but they remained "I. 0. Farben Men"- Even after filling
the key positions in this way other control techniques were employed.
As recently as late in 1941 managerial policy was being dictated from
Germany by transatlantic telephone, and until that year periodical
official visits were the settled rule. Option agreements of bewilder-
inc complexity reinforced or replaced control by share ownership.
Cross-licensing agreements, control agreements and agreements for the
exchange of patents and "know-how", implemented by frequent exchange
of information cerented enduring ties. All of these methods were
found to be present in General Aniline & Film Corporation.
The German-owned stock has already been vested in the
Secretary of the Treasury. Furthermore, we have broken the lines of
communication between the two companies in so far 2.6 they relate to the
Open exchange of information and "know-how", and we are and shall be
dealing with the more obvious ways in which the operations of General
Anilinetave been controlled from Germany in the past. More difficult
is the problem of Company personnel, and that is a matter which
requires development somewhat in detail. An effective job of fresing
the organization from Jerman domination and vontrol requires the
alimination of the I. G. Farben men.
Regraded Unclassified
82
- 2 -
In practice, all persons of executive or managerial status
who have been connected with I. G. Farben will have to be replaced
as soon as possible by men unquestionably devoted to American ideals.
With regard to technical personnel of similar background,
our objective may take longer to attain. Assuming that these men,
or some of them, have such technical qualifications as would make their
immediate dismissal impracticable from an operating standpoint, they
will be retained under surveillance for so long as is required to
obtain and train suitable substitutes for them. In determining the
rate of effecting these changes I expect to rely heavily on the
judgment of the management.
Persons of doubtful allegiance may also be found who do not
have I. G. Farben backgrounds. These, too, will be eliminated.
However, our program does not involve the dismissal of employees
simply because they are of German birth or extraction.
Of course, the whole program must be carried out with a
view to maintaining, and wherever possible expanding, the operations
of the Company whose products are so necessary in the war effort.
Regraded Unclassified
83
The following is a newspaper interview given by Tom Clark, Chief of
Staff of General DeWitt's Civilian Alien Control Committee, published in
the San Francisco Chronicle, Thursday, March 5, 1942, page 6:
"He promised full protection for evacuated property owners
and urged them 'not to sell their property unless they get fair prices'.
Custodians of alien property will be named soon and Clark guaranteed
that all properties !whether owned by aliens or American-born will be
returned to the original owners after the war'.
"Our motive behind every procedure', he explained, 'is
to treat the Japanese in a manner in which We expect our nationals to
be treated in Japan. This will be reflected in the manner we care for
their property."
Regraded Unclassified
83
The following is a newspaper interview given by Tom Clark, Chief of
Staff of General DeWitt's Civilian Alien Control Committee, published in
the San Francisco Chronicle, Thursday, March 5, 1942, page 6:
"He promised full protection for evacuated property owners
and urged them 'not to sell their property unless they get fair prices'.
Custodians of alien property will be named soon and Clark guaranteed
that all properties !whether owned by aliens or American-born will be
returned to the original owners after the war'.
"'Our motive behind every procedure', he explained, 'is
to treat the Japanese in a manner in which we expect our nationals to
be treated in Japan. This will be reflected in the manner we care for
their property."
Regraded Unclassified
84
March 5, 1942
MEMORANDUM FOR THE SECRETARY'S FILES
Conference in Mr. White's Office
March 5, 1942
10:00 A.M.
Present: Mr. White
Mr. Foley
Dr. Viner
Mr. B. Bernstein
Mr. Southard
Mr. Friedman
Mr. Currie
The Chinese reply on the draft of the loan agreement was
discussed and it was agreed that pending a conference with the
State Department any conclusions reached were necessarily tentative.
On this basis, it was concluded that (1) the Chinese suggestions
should be accepted, (2) that the letter from Dr. Soong could be
taken as a voluntary commitment to keep us informed, and (3) that
the sending of a letter from the Secretary, informing the Chinese
that because of the considerations outlined in their letter we are
accepting their suggestions, would constitute a confirmation of
their commitment to keep us informed.
It was also agreed that the phrase "in the post-war period as
well as during the war" should be deleted from the new Article II.
Regraded Unclassified
85
March 5, 1942
11:05 a.m.
DEFENSE SAVINGS STAFF
Present: Mr. Tickton
Miss Dallas
Mr. Sloan
Mr. Houghteling
Mr. Kuhn
Mr. Odegard
Mr. Graves
Mr. Adams
Mr. Callahan
Mr. Mahan
Mr. Duffus
Mr. Sparks
Mr. Gamble
Mr. Bell
Mr. Buffington
Mrs. Morgenthau
Mrs. Klotz
MR. GRAVES: Mr. Secretary, we just concluded a
conference with Mr. Bell and Mr. Broughton and others
from Mr. Bell's staff on this question of changing the
name of Defense Savings Bonds, and I wondered if you
wanted to discuss that briefly.
H.M.JR: The date that Bell names suits me. It
is our anniversary.
MR. GRAVES: In the first place, there are some
who think the change should not be made.
H.M.JR: Not made at all?
MR. GRAVES: Yes, and we were unanimous in feeling
Regraded Unclassified
86
- 2 -
that it would be a mistake to attempt to change the
name until the first of July.
H.M.JR: The second is ruled out. Way don't they
want to change it to "War Bonds"? Do you leave out the
word "Saving" or "Savings Bonds"?
MR. GRAVES: We were thinking, I believe, in terms
of using the term, "War Savings Bonds." Mr. Odegard,
I think, can present the case.
H.M.JR: Against?
MR. GRAVES: Against changing.
MR. ODEGARD: Yes, Mr. Secretary. I belong to
His Majesty's loyal opposition here and--
H.M.JR: Who is "His Majesty"?
MR. ODEGARD: I don't know. I have been trying to
find out. (Laughter) As in the case of the opposition,
I find myself in the minority. It seems to me that there
are a number of reasons that have been advanced for chang-
ing the name to War Bonds. You will remember that
immediately after Pearl Harbor there was a great flood
of correspondence from people who wanted Victory Bonds.
You will remember, too, that we had three different sur-
veys made to determine the attitude of the public in so
far as that attitude is reflected in public opinion polls,
to see which of several names were preferred, and without
exception those polls have shown that Defense Bond was
the preferred name of the majority.
Now, Mr. Graves argues, and I think with some cogency,
although not too much cogency, that the mere fact that
you have sixty-five to seventy percent of the people on
these polls preferring Defense Bonds is in itself a good
argument in favor of the change, because this shows the
type of complacent, negative attitude which is important
to change at this time if the war is to be successfully
prosecuted. But the reasons for changing can be, I think,
listed as two. One is that there have been a flood of
Regraded Unclassified
87
- 3 -
correspondence and objections raised by people all over
the country. That, I think, is not 8. valid reason for
making the change in view of the other evidence that we
have. The second argument, which I think is more per-
suasive, but not persuasive enough, because it is based
on guesswork, is that the change of the name of the
security to War Bond would have a good psychological
effect upon the country in the sense that it would help
to toughen, and I am quoting Mr. Graves, would help to
toughen the attitude of people toward the war. It would
add at least a mite, that is my word, to the toughening
process. Now, I raised the question, and it is a ques-
tion that so far as I know hasn't been answered, what
is there that could be done with our copy, with our
organization, with our whole promotion effort, by chang-
ing the name to War Bond that can't be done by keeping
Defense Bond? It seems to me that the reasons for the
change must be pretty overwhelming or else the change
ought not to be made. That is the substance. There
are 8 good many other angles of it that I think could
be discussed.
MR. BELL: In other words, you think the toughening
process can come under Defense Bonds as well as the War
Bonds?
MR. ODEGARD: I do. I don't think you have to have
any nickname on these bonds, as I suggested in your
office, Mr. Bell. As a matter of fact, we had in our
first posters, you will remember, "For Defense" across
the top, "Buy United States Savings Bonds." We can have,
"For War, Buy United States Savings Bonds, "For Freedom,
Buy United States Savings Bonds, or anything else. The
idea that you are going to have any appreciable effect
upon the underlying complacency, so-called, of the
American people by changing the name of this security
seems to me to be overly optimistic.
H.M.JR: Well, let me ask you 8. question, as 8.
member of the majority party. If you had to start right
today, what would you call it?
MR. ODEGARD: If you had to start right today?
Regraded Unclassified
88
- 4 -
H.M.JR: New.
MR. ODEGARD: I don't think I would nickname it at
all. I would call them United States Savings Bonds,
and I would make all my copy, war copy.
H.M.JR: Well, I wouldn't argue with you on that,
but I certainly would argue with you on keeping the
word "defense" in the name.
MR. ODEGARD: Even in the face of every survey that
we have?
H.M.JR: Yes. I think that - didn't they make some
surveys about Mr. Roosevelt running, and predictions?
MR. ODEGARD: Yes, they all predicted his election.
H.M.JR: In '36?
MR. ODEGARD: Yes. Gallup - all the polls that we
have used did.
H.M.JR: Gallup did?
MR. ODEGARD: Yes. Oh, there were differencesas to
the margin. Fortune came closer to it than Gallup, but
that was for special reasons, which I don't think we
ought to go into here.
H.M.JR: Well, I will tell you, Peter, is anybody
else on your side?
MR. ODEGARD: I didn't detect anyone unless it was
George Buffington.
MR. BUFFINGTON: I am, in a measure, on his side.
MR. BELL: Would it be worth anything to get another
poll? I understand you can get one within a few hours.
H.M.JR: No.
MR. BELL: Somebody said fourty-eight hours.
Regraded Unclassified
89
- 5 -
MR. ODEGARD: You can get a telegraphic poll in
forty-eight hours.
H.M.JR: Well, do I have to decide this? Can I
decide this?
MR. GRAVES: No, I don't think 80.
H.M.JR: I would like to decide it.
MR. GRAVES: I think you can leave it to a vote
if you like.
H.M.JR: No, I don't want a vote on this?
MR. GRAVES: It would be overwhelming.
H.M.JR: Why didn't you say that in the first place?
(Laughter)
MR. GRAVES: I think this group, with the single
exception of Mr. Odegard and perhaps Mr. Buffington,
favor changing the name of this security to War Savings
Bond.
H.M.JR: Well, Peter, I hate to go against you,
because your advice has been awfully good, but I am
willing to reconsider whether it should be United States
Savings Bonds or United States War Savings Bonds, if
that means very much, if you want to fight on that front,
but I would like to see the word "defense" out.
MR. ODEGARD: I think the word "defense" could go
out of our copy, and we could toughen our copy, and I
still ask the question, which hasn't been answered, what
could we do by changing the name of the security that we
can't do without changing it?
H.M.JR: Well, you can stop this. You can stop
people like Mr. Willkie from attacking us, including us
in 8. lot of other things which I don't want to be a
partner to. When he lists the things that aren't being
Regraded Unclassified
90
- 6 -
done, I hate to be in that list.
MR. ODEGARD: Suppose you were attacked for using
the word "war" instead of "Freedom Bond" or "Victory
Bond" or anything?
H.M.JR: Oh, I would like to be attacked on that.
That I would enjoy, The word "wartime" has gone over
awfully well. I am not crying for "war," but I am
opposed to "defense."
MR. ODEGARD: Well, I am not married to the word
"defense." As 8. matter of fact, I am open to persuasion,
but I just think that if you think that this is going
to have any material effect on morale or any material
effect upon the sale of Defense or United States Savings
Securities, that we arebeing too optimistic.
H.M.JR: Well, I don't go that far, but I don't
want to be attacked. I don't want to be included.
MR. ODEGARD: We were attacked before, immediately
after Pearl Harbor, for the same reason, by people almost
as distinguished as Mr. Willkie.
MR. KUHN: Well, I think there is another reason,
Mr. Secretary, that didn't exist at the time of Pearl
Harbor. The whole Administration is trying to fight
& tendency to pull our troops and our ships back home
here for defense. The means - one of the means by which
they are fighting that tendency is to strike the word
"defense" out of all Government propaganda, out of the
names of Government agencies and so on. We are the
most permanent of all the Government agencies in the
use of the word "defense." It is plastered over our
letter paper, our posters. It inevitably comes up on
the radio, because it is the name of our product, and I
think that there is a real purpose behind it that is not
just confined to this Department.
MR. ODEGARD: Well, I think, Ferdie, that that is the
only argument that I have heard that has any cogency, and
Regraded Unclassified
91
- 7 -
I would still say that you can get rid of the word
"defense" without giving another nickname to your
bond, War Bond. I don't think the name of the security
means much.
H.M.JR: Let's have a showing of hands. Who would
like to keep it the way it is, if they would raise their
right hand.
MR. ODEGARD: I would like to keep it the way it is
and change the nature of our copy.
MR. BUFFINGTON: So would I.
MR. BELL: Well, I would vote for United States
Savings Bonds and leave out the word "war", and then
put the "war" in your copy like we have "defense" and
so on. I would vote for that.
MR. GRAVES: Mr. Secretary, on that point, which is
made by Mr. Odegard and supported by Mr. Bell, I think
that is definitely wrong. Our bonds are now known not
as Treasury Savings Bonds, which they are technically,
as a matter of law, but everybody who talks about these
securities talks about Defense Bonds. Defense Bonds is
the way these are popularly referred to everywhere.
Now, take out the word "defense" and what have you
got left? You have got the word "bonds" and then you
have got to supply another word, "Treasury Bonds" or
"Savings Bonds," and in these times, those are weak
words, I think the public, if you strike out the word
"defense," they are going to demand that we put something
in the place of that word. If we don't, you have got no
language to describe these securities. "Savings Bonds"
or "Treasury Bonds," what does that mean in times like
these?
MR. BELL: That is what you had up until--
MR. GRAVES: It is much weaker than "Defense Bonds,"
in my opinion.
Regraded Unclassified
92
- 8 -
MR. BELL: That is what you had up until the last
two or three weeks.
H.M.JR: Up until the first of May. I mean popularly,
Dap. I am not talking about what is on our posters or
what is on the face of the bonds. I am talking about
what the people use, what language they use in talking
about them, and they are known everywhere as Defense
Bonds, and you take out the word "defense" and you have
got nothing.
MR. BELL: Haven't they also been known as Savings
Bonds?
MR. GRAVES: Yes, but people don't talk about them
as Savings Bonds. They talk about Defense Bonds. Listen
to your radio, listen to people who make speeches, listen
to people talk in the street, and they say "Defense Bond."
MR. ODEGARD: That is right.
MR. GRAVES: You take out that word "defense" and
you just collapse. You have got nothing.
MR. ODEGARD: Yes, that is what you propose to do,
change it to--
MR. GRAVES: No, we propose to call them War Bonds,
War Savings Bonds.
H.M.JR: I think he is right. We are at war. I
think he is right. I am with you, Harold.
MR. BELL: United States War Bonds?
MR. KUHN: War Savings Bonds.
MR. GRAVES: War Savings Bonds.
H.M.JR: I don't know what you want "savings" in
there for.
MR. GRAVES: Well, technically they have got to be
Regraded Unclassified
93
- 9 -
Savings Bonds, as I understand the statute, but that
name quickly disappears when people talk about this
thing. They will become known, in my opinion, as War
Bonds just as they are now knownas Defense Bonds.
H.M.JR: How about you (Callahan) on your radio?
MR. CALLAHAN: Oh, I am very enthusiastic about
"War Bonds.'
H.M.JR: Where is Mahan?
MR. MAHAN: Here, sir.
H.M.JR: How about you?
MR. MAHAN: It can very easily be - the change can
be made by July 1 without scrapping anything.
MR. GRAVES: This is just a question of what name,
Sid.
MR. MAHAN: Oh, "War Bonds."
H.M.JR: As an advertising man, what kind of a name
do you want on the thing?
MR. MAHAN: Personally, I don't feel that it is
important what name is on it. It is what we say about
it, and I think we could still go with the present name,
but there are very real reasons why it should be changed,
and I think it would stimulate interest.
H.M.JR: Well, let's have it "United States War
Bonds" - "Nar Savings Bonds, and we are going to do it
on the anniversary, May 1, and you are not going to scrap
the old copy, you can use it up, and even if you scrapped
it all, I still could go one year from now in to the
Poughkeepsie or Hyde Park post office and still find
last year's posters there. (Laughter) But I mean, it is
an anniversary, and I have just been with the President
three quarters of an hour, and he is talking about this
delay and waiting and waiting and waiting, and I am not
going to sit here and say that you can't change over in
Regraded Unclassified
94
- 10 -
two months. You will use up the material, but he (Calla-
han) can start next week. You can begin next week, if
you have to, but certainly on the first of May all your
announcements would be War Savings Bonds. It is like
this thing, some of the stuff in the newspapers is
"Victory Bonds," some is "Defense Bonds, and gradually
they change over.
MR. KUHN: Mr. Secretary, we have a million and
a quarter dollars worth of bonds already printed,
"Defense Bonds."
H.M.JR: We will send them out just the same. We
will use them.
MR. GRAVES: No, I don't think you could, Mr.
Secretary. If you change the name of this security to
"War Savings Bonds, If I think the people are not going to
take over the counter a security that carries in red
type across the face, the words, "Defense Savings Bonds."
I think we have got to repleace these bonds.
MR. BELL: And we have about a seven months' supply.
MR. GRAVES: No, no, Dan, five at most.
MR. BELL: Oh, I think we have two million pieces
in various stages of completion at the Bureau of Engraving
and Printing which will give you close to a six months'
supply of bonds.
MR. TICKTON: Twenty-five million pieces altogether.
H.M.JR: I will make you a little bet on the bond,
whether it is "War Savings" or "Defense Savings" or what-
ever it is.
MR. GRAVES: I think that is wrong, because it is
in red type.
H.M.JR: Well, starting with the radio, can you
start calling them War Savings Bonds as of May 19 Change
Regraded Unclassified
95
- 11 -
all your copy to "war" from "defense"?
MR. CALLAHAN: Well, of course radio is a simple
problem, but the other material is a very difficult
problem.
MR. KUHN: Sid, you had some figures on that, about
the National Cash Register, for example.
MR. MAHAN: That is the one company, Mr. Secretary,
that is very badly involved. They have seven hundred
fifty thousand stickers to put on cash registers and
cards to go with them, and I called this morning. They
are off the press and they are ready to go on that pro-
gram. Now, if it was held over until July, they would
replace those cards at that time.
H.M.JR: Well, look, gentlemen, we have got thirty
minutes to go, and I will leave it with Graves and Bell
to decide it. I am not going to fight. Just as long as
you decide on the name and as to when, I will leave it
to the two of you.
MR. GRAVES: As a matter of fact, if you will
excuse one further word about this, I think this could
come as a sort of compromise with Peter's point of view.
We can stiffen up all of our copy with respect to the
present bond. We can put "war" into our copy much more
stoutly than we have, and then announce this change as
soon as we can dispose of the present stocks without
what I would consider to be a very bad waste of money.
H.M.JR: Well, you and Bell decide that.
MR. GRAVES: All right.
MR. BELL: And Mr. Secretary, make that statement as
someone suggested, that it is not going to change over
immediately and destroy all this stock, we are going to
save that.
MR. KUHN: Because it will be a point in our favor
Regraded Unclassified
96
- 12 -
with the public if you are asked about the change of
name to say, "Well, we have so many months' supply of
bonds and lots of people have financial outlays here.
We over." are not going to waste money in making this change-
H.M.JR: Well, Ferdie, prepare a statement we are
going to do it as of July 1 and why We don't do it
earlier, and in my next press conference I can announce
it.
MR. KUHN: I will be glad to, something of that
kind without mentioning July 1, explaining why we are
not deal. doing it at once. I think it would help us a great
MR. BELL: Let's consider whether that will kill
sales from now until July 1 before you do it.
MR. KUHN: You wouldn't mention July 1, Dan.
MR. ODEGARD: Sales will drop if you make an
announcement.
MR. BELL: They certainly dropped last April when
you announced you were going to change over, didn't they,
Harold?
MR. GRAVES: Yes.
MR. BELL: The bottom fell out of them.
H.M.JR: Again, you fellows decide. Now, what else
have you got?
MR. GRAVES: Well, sir, I would like to have a few
people tell you briefly some of the things that we are
trying to do. Perhaps we might talk a little about our
field work first.
H.M.JR: Anything that you want.
MR. GRAVES: Mr. Sparks, suppose you tell the status
Regraded Unclassified
97
- 13 -
of our additional staffing operation in the field.
MR. SPARKS: Well, Mr. Secretary, we have just
concluded a series of regional field meetings in dif-
ferent parts of the country in which we gathered the
adjoining states at a central place for the purpose of
tightening up our entire field organization and bolster-
ing it wherever we felt that bolstering was required.-
Preliminary to that we sent a letter and question-
naire out to the field so that the representatives in
the field that attended these meetings would come pre-
pared and not just be taken by surprise. The result of
that - of those meetings is that we have agreed to
increase the paid personnel in the field throughout the
country to the extent of two hundred forty-five addi-
tional employees. We also have another fifty-four em-
ployees that are schedule for addition to the staff in
the very near future, which would bring the total paid
personnel up to four hundred ninety-five. There has
been a considerable increase in the number of volunteer
workers being--
H.M.JR: I was going to ask you, could you let me
have a figure through Mr. Graves by Monday or as soon
as it is practical, how many full-time volunteer work-
ers have we got - I mean, that work from nine to five,
you see, and some kind of a classification as to what
they do?
MR. SPARKS: Yes, sir.
H.M.JR: I mean, some kind of a classification. I
mean, full time, Then you might give me part-time, too.
MR. SPARKS: I can't give you that figure now, but
I can give you now the actual recorded number of com-
mittees and number of volunteer workers throughout the
country.
H.M.JR: Please.
MR. SPARKS: It is five thousand committees with
Regraded Unclassified
98
- 14 -
seventy thousand members. That is the actual recorded
number.
MR. GRAVES: Mr. Tickton has--
H.M.JR: Could I just say this, Harold? I didn't
realize yesterday that We have been out on the number
of people that we wanted, and I told Harold Graves that
when it came up next time, I would go up personally and
ask for it.
MR. GRAVES: That will be about a month, I think.
H.M.JR: I didn't realize that we had been cut.
What is Tickton going to do?
MR. GRAVES: He is going to tell us the payroll
allotment situation.
H.M.JR: Good.
MR. TICKTON: In accordance with your request, we
are asking all firms that have payroll allotment plans
to report to the Treasury each month the progress of
the plan. There are, as of last week--
H.M.JR: Excuse me a minute. I take it, Sparks,
that you have, either you or - how many people you would
need either on part or full time or volunteer basis, to
get the billion dollars a month that Harold Graves has
promised me by the first of May?
MR. SPARKS: Yes, sir.
H.M.JR: All right.
MR. TICKTON: As of last week there were thirty-
two thousand firms with payroll savings plans, of which
five thousand were firms with more than five hundred
employees and ten thousand were firms with one hundred
to five hundred employees, and the rest of them were
firms with less than one hundred employees. Sixty-eight
percent of the firms, of the large firms, with more than
Regraded Unclassified
99
- 15 -
five hundred employees, had signed up. Thirty-eight
percent of the smaller firms.
H.M.JR: In my testimony at the tax hearing, I said
two-thirds. That wasn't bad.
MR. TICKTON: That is right. It was on the table
we gave you last week.
H.M.JR: Good.
MR. TICKTON: Approximately half of the number of
persons employed by government and business are exposed
to the plan. That is, their employers have the plan in
operation. We have received from five thousand firms
information on what they did under the plan in January,
and that represents about half of the firms that actually
had plans in operation in January and the figures show
that in the smaller firms you have the largest percentage
of participation and in the larger firms you have the
smallest percentage of participation, which is due pri-
marily to the mechanics of getting a large number of
employees signed up. The railroads, for example, have
relatively small participation, because it is much -
very difficult to get all the yardmen and railroad em-
ployees signed up, whereas in the smaller firms, in
some of the banks, for example, it is very easy to get
& very large number of persons signed up that are coming
in and can be - the sign-up can be obtained rather quickly.
On the average, about forty percent of the employees
who were exposed to the plan are participating. They are
deducting about four percent of their own salaries, which
amounts when we multiplied it out to about seven dollars
twenty-eight cents a month, which would be sufficient to
buy four bonds a year. If you multiply that out further
on the basis of these firms for the thirty-five million
people that are employed, it would produce about three
billion dollars out of your ten-billion-dollar yardstick
that you announced in your Baltimore speech.
Now, of course some of these plans have just gotten
Regraded Unclassified
100
- 16 -
into operation, and they hadn't gotten the thing work-
ing very satisfactorily, but I might point out that that
seven dollars twenty-eight cents which is being deducted
each month for each one of these employees compares
approximately with the minimum amount that is required
on the Government plan. That is, a Government plan is
three dollars seventy-five cents a pay, which would be
slightly less than what these employees are deducting.
On the other hand, a great many industrial concerns
that have reported to us indicate that their minimum
reduction is about 8 dollar or seventy-five cents a payday,
rather than three dollars seventy-five cents under the
Government plan. Taking the largest companies that
reported for December and January, General Electric leads
the list of course with eighty-five percent participating
in January and approximately five percent of the employees'
payroll being deducted, which is very high for companies
that have such a large percentage of participation. They
are doing pretty well. Companies that have the small
participation have a higher percentage, but of course
that is because a lot of the office workers and executives
were able to sign up first and naturally that represents
a higher proportion of the salaries than would otherwise
be expected.
Last month we gave you a list of concerns that had
the Navy "E" flag, where they answer as to whether or
not they had the plan, and last month there were - of
eighty-two firms that had the "E" flag, thirty-six
firms did not have the plan. Those same firms have been
checked again and it is down by half. There are only
eighteen firms now where they had the Navy "E" flag
in January that still don't have payroll saving plans.
H.M.JR: And how many firms have our own flag now?
MR. GRAVES: One.
H.M.JR: Just one?
MR. GRAVES: Yes. We have just gotten delivery of--
Regraded Unclassified
101
- 17 -
H.M.JR: The one I--
MR. GRAVES: That is right. We have just gotten
delivery of the certificates.
H.M.JR: Well, how many are entitled to them,
Harold.
MR. GRAVES: Oh, hundreds, and hundreds and hundreds
are entitled to them. Many firms report in here that
their participation is 8 hundred percent, in fact. We
will get out, within the next day or two, these cer-
tificates to our state officers, and they will forward
them to the companies that are entitled to have the flag.
That was another problem that came up in connection with
this change of name, our certificates referring to the
bonds.
H.M.JR: Are you going to have local publicity when
the flags are presented?
MR. GRAVES: Yes. We give 8 certificate, merely,
that has your facsimile signature on it and the signature
of the chairman of our state committee and the state
administrator. That is given to the company or to the
union, and then they buy the flag from companies that
we designate or authorize to manufacture the flag. That
ought to be in pretty good shape within B. couple of
weeks.
H.M.JR: Were you through, Tickton?
MR. TICKTON: Unless Mr. Graves wanted something
else.
MR. GRAVES: No, I think this payroll allotment
thing was about the most important.
H.M.JR: It is.
MR. TICKTON: In the large firms that have been
reporting, 8 great many have 8. negligible percentage of
Regraded Unclassified
102
- 18 -
their total payrolls going to the plan. That is just
because B. great many of them write us that they have got
a lot of transient help that they never expect to
cover on the plan. There are a number of firms in the
country who don't like the payroll plan from a mechanical
point of view and are attempting to circumvent it by using
stamps. That is, instead of actually accumulating the
funds in their own office or through their bank, they
prefer to hand the man his payroll consisting of twenty-
five dollars and five dollars' worth of stamps or what-
ever the figures amount to. Mr. Sparks doesn't consider
those as payroll plans, and we are not counting them,
because the man who gets the stamps may do anything with
them besides turn them in for a bond. The mechanical
difficulties do not, apparently, oppress the largest
companies as against the smallest companies, because
the largest companies have to do 8. large proportion of
their bookkeeping on machines anyway and it can be
handled, but in & great many small companies, they send
us & lot of letters with 8. mild amount of griping and
a great many of them don't want to be bothered as far
as reporting is concerned. We don't have any trouble
with the large companies reporting. Once they start,
they continue to send us the information, and we are
planning to have that information available within about
two weeks after the close of the month. That is,
twenty-thousand of my forms will go out, and I expect
I will have ten thousand replies within two weeks from
now, and we will turn those over to the field offices,
copies over to the field offices so that the field
offices will be able to check up on those firms that
show relatively low participation one month after another.
There is a minor difficulty there. Some of the
aircraft firms point out that their figures are supposedly
war secrets, 80 we may have to make some special arrange-
ment to pull those out, but that is spotty. Whereas
Boeing will send it to me and 8. few others will send it,
Curtiss Wright and Douglas say it is confidential.
On the other hand, the ship building companies are
glad to give it. So it all depends on the fellow that
is writing the letter for the company.
Regraded Unclassified
103
- 19 -
MR. GRAVES: There is one thing I would like you
to check again, Mr. Tickton. You said, as I understood
you that we had no trouble getting reports from these--
MR. TICKTON:- Once they start reporting to us - we
have a little trouble sometimes at the beginning. That
is, out of five hundred companies that are over five
thousand, seventy-five have not answered the letter for
December or January, which is fifteen or twenty percent.
MR. GRAVES: Although they have the plan in?
MR. TICKTON: They already have the plan in. But
once we get them, they seem to be agreed that you ought
to have the information, and they ought to be able to
give it to us in the form we ask, which is very simple.
H.M.JR: Is that all?
MR. TICKTON: Yes.
H.M.JR: Now, who is your payroll deduction man
here, from your staff?
MR. GRAVES: Well, we didn't bring him. He comes
under Mr. Sparks.
H.M.JR: Who is he?
MR. SPARKS: Mr. O'Malley and Mr. Touchstone. Mr.
Touchstoneis in the field now. Mr. O'Malley is in
Washington.
H.M.JR: I see.
MR. GRAVES: Would you care to have Mr. Buffington
comment at all on his--
H.M.JR: No, because - yes. Just one second please.
All right, George.
Regraded Unclassified
104
- 20 -
MR. BUFFINGTON: Mr. Tickton raised 8 question
about some of these companies not reporting to the
requests from the Secretary's office. A number of
them with whom I talked have instituted the plan,
but their results, they felt, weren't good enough to
report. Many of them had only thirty to fifty percent.
I called on ten companies in Chicago, varying in number
of employees from five hundred to twenty thousand, and
without exception every officer or employee with whom
I talked was most enthustiastic about the plan. I
raised with Mr. Graves the question about the presentation
of the "E" flag. In one instance of banks, the Continental
Bank in Chicago and the First National, are practically
identical, both with respect to the number of employees
and the average payroll. One of them - they had both
accomplished between ninety-five and a hundred percent
employee participation. The deductions varied from three
and a half with Continental to seven or seven and a half
for the First National. I found in connection with
industrial organizations, many of the officers in those
organizations had checked with the bank to determine
what they should expect from their employees. They
checked with Continental, and they got three percent as
being a fair participation; and if they checked with
First National, they got seven. I suggested to Mr.
Graves in awarding the "E" flag it could be done to
differentiate between the man who had done 8 pretty good
job which the First accomplished and the Continental,
which I didn't feel had done quite such a good job.
It would eliminate people from just getting the "E"
flags and feeling that the job WRS done.
Also, I feel from talking with these ten corpora-
tions that the higher you can get the participation
originally the better, because it is going to be very
difficult, probably, to raise it. The General American
Tank Car Corporation, for example, which is very largely
war effort, went immediately to a ten percent monthly
participation or deduction from payrolls. There are many
other companies like the banks who have not had increase
in hours worked or increase in pay scales who can't reach
that ten percent; but if there could be some way of
accurately measuring good performance when you give the
Regraded Unclassified
105
- 21 -
"E" flag, it might make the corporation work - put in
more effort on attaining those standards, however they
are set.
Mr. Graves asked me if I had suggestions for that
standard, and I haven't yet arrived at them; because
if you differentiate in the color of the flag it wouldn't
be significant enough. If you put the percentage on the
flag of deduction, it may change very shortly thereafter
and be difficult to handle.
H.M.JR: May I interrupt a minute? Somebody,
either yourself, Graves, or somebody, should call on the
Vice-President and explain the payroll deduction plan.
I don't think he understands it, and he is a strong advo-
cate of forced savings.
MR. GRAVES: Yes.
MR. KUHN: Did you see the picture in the Herald
Tribune this morning, Mr. Secretary, the Senators and
Congressmen signing their own payroll deduction pledges?
H.M.JR: I guess I didn't. Somebody ought to call
on the Vice-President and tell him about this. Every
time it comes up he keeps throwing at me the forced
savings thing.
MR. BUFFINGTON: The only other observation, there
is a grand sales effort being made in the Chicago area,
but I don't feel that anyone in authority in Chicago
knows concretely just what the over-all performance of
that area is. However, this record system is set up,
and I think it would be an excellent thing to follow up
if the Chicago office had an adequate record system.
MR. GRAVES: In fact, didn't you make some
suggestions there, George, about setting up a local
follow-up system independent of Mr. Tickton?
MR. BUFFINGTON: Yes.
H.M.JR: I haven't seen George because just as
soon as he told me he only had good news, I lost
interest.
Regraded Unclassified
106
- 22 -
MR. GRAVES: I did make this suggestion to George,
if you don't mind. I would like him to go to New York
at his early convenience and spend a day or so there.
H.M.JR: You can plan it for next week, George.
MR. BUFFINGTON: I thought in going out there that
this was a plan that would have to be sold. I found in
many corporations the employees had requested the plan
being put in operation. There seems to be complete cooper-
ation of the employers and employees in every place I
went.
H.M.JR: Well, you could plan to go to New York
next week.
MR. BUFFINGTON: Yes, I shall.
MR. GRAVES: I would like to comment on one point
made by Mr. Buffington, which was that we are going to be in
trouble if we award the "E" flag to companies wholly on
the basis of the percentage of people who participate
in the plan and without regard to the amount of their
individual payments. We struggled with that a long time.
In fact, the folks here put up to me & proposition that
we should impose two considerations before we award an
"E" flag. First, that there had to be ninety percent
or more participation; and second, that the amount of
participation had to exceed five percent. I overruled
that myself, because it seemed to me that there were too
many differences in the wage levels of employees in
different companies. It would be easy for General Electric,
which on the whole is a high paid personnel, to attain
five percent, whereas it would be a matter of extreme
difficulty for some organization, we will say, of sewing
women or something of that kind, where the wages were
very low, to attain any such percentage, and we couldn't
find any formula that would be fair; and, therefore, we
rejected this second factor and are now proposing to
award this flag wholly on the basis of the number of
people participating without regard. to the amount.
Regraded Unclassified
107
- 23 -
MR. SPARKS: Mr. Graves, we found from experience
that when you stabilize the minimum, the minimum auto-
matically becomes the maximum.
MR. GRAVES: Yes, that is another point. Now, there
is & project that we have in mind that we consider to be very
important in raising the rate of participation, which we
have referred to in talking with you as our pledge campaign
I would like Mr. Gamble, if he will, please, to say a
word or two about the progress of that, what we had in
mind. In effect, Ted, if you please, on the participation
in payroll allotment.
MR. GAMBLE: Mr. Secretary, we have in some forty
odd states a million two hundred fifty thousand people
at the present time in varying stages and being trained
to go into the field between March 15 and May 1.
H.M.JR: How many?
MR. GAMBLE: A million two hundred fifty thousand
people in some forty odd states being trained to conduct
this house to house, person to person cenvass.
H.M.JR: You are going to have to prove that to me.
MR. GAMBLE: Well, sir, these figures are too
conservative.
H.M.JR: Are what, conservative?
MR. GAMBLE: They are conservative, yes. That is
the minimum number of people required to do the job.
We have at the present time in the State of Indiana
thirty thousand odd people all ready organized to do
this job. We have completed the job in one state where
we used seventeen thousand five hundred people in the
State of Oregon to conduct this canvass.
H.M.JR: I know. That is a state by itself.
MR. GAMBLE: Actually, Mr. Secretary, it isn't.
We have found just as high interest in the other states
in this campaignaswe have found in Oregon. As a matter
Regraded Unclassified
108
- 24 -
of fact, the securing of the workers is a very simple
job. We have found that we have had more workers--
H.M.JR: Really? If it is so, it is the most amazing
thing I have heard.
MR. GAMBLE: We think it is the most amazing program
that has ever been conducted in this country. In addition
to giving everybody in this country an opportunity--
H.M.JR: The reason I question it, it seems unbeliev-
able but - that you could do it; but if you are doing it,
and you say you are doing it, I think it is amazing.
MR. GAMBLE: Well, there are things in connection
with it that will be even more unbelieveable than the
number of people that we have organized to do this job.
H.M.JR: Excuse me, Ted. Do we have downstairs,
Vince, the record of the start-off of that organization
campaign, the defense transcription?
MR. CALLAHAN : We have one across the street we can
get over right away.
MR. GRAVES: That is something I would like very
much for you to hear.
MR. CALLAHAN: It is a marvelous record.
H.M.JR: If you will send it over to me.
MR. GRAVES: It is a half hour state-wide hook-up
on all stations that started off the pledge campaign in
the State of Oregon. It is a wonderful job.
MR. GAMBLE: I think you ought yourself, Mr.
Secretary, to hear it, not because it came from Oregon,
but because it is typical of the reaction of the people
out in the country to this program. It is not anything
that was inspired by the Defense Savings Committee, but
it was something that was done by the radio people in
the State of Oregon, and it is now being done throughout
the country. We had a request yesterday from the State
Regraded Unclassified
109
- 25 -
of Pennsylvania for thirty of these transcriptions.
MR. CALLAHAN: And all the New England States.
MR. GRAVES: We have sent out copies of that to
all our states.
H.M.JR: I would like to hear that. I have never
heard about it.
MR. GAMBLE: In addition, of course, to giving
everybody an opportunity to indicate what they are going
to do about this bond campaign, we had hoped through
this effort to not only encourage new payroll savings
plans, but to increase participation in plans already
In effect. We are studying the figures from the State
of Oregon and from one county in Oklahoma which has been
completed to try and ascertain what effect it has had
upon payroll savings and upon participation. The belief
is that it is going to have a very healthy effect. We
will have more definite information, of course, after we
have made additional surveys, but the reaction was
instantaneous. There were numerous new plans that sprung
into effect over night as & result of the pledge cam-
paign, and firms that had been going along on two and
three and four and five percent participation became &
hundred percent over night. We had firms with as many
as a thousand employees that were signed up in forty-
five minutes as & result of this pledge campaign. These
things, Mr. Secretary, we have evidences of, and none
of them were plants. Probably one of the most encourag-
ing things about this program is the seriousness with
which the American people have accepted this job that
we have set out to do, They were ready and waiting for
these canvassers when they came to talk to them, and one
of the things that we did not anticipate that we have
experienced is that it is going to take twice as long
to do the job as we expected, because the people want to
talk to these canvassers about the bond program and about
what they can do and about what they should do. In
addition to that, as you know, we are going to have a
house-to-house distribution of some fifty million savings
schedules. It will probably be the most effective
Regraded Unclassified
110
- 26 -
distribution job that has ever been done in this country
because it is going to be a person to person distribu-
tion. It is not going to be 8. question of leaving it at
& person's door or in their mail box, but it is going to
be given them personally as a result of a call that will
be made upon them by some person that has been well
trained to represent this program. Briefly, I think,
Fr. Graves, that covers it.
MR. GRAVES: Yes. I am glad you mentioned that
schedule, because the effect of that--
H.M.JR: This is all news to me.
MR. GRAVES:
ought to be to raise the rate of
participation, such as George Buffington mentioned.
MR. ODEGARD: You had the schedule, Mr. Secretary,
at the time of the Baltimore speech.
H.M.JR: I said in the speech that I had it in my
hand. But you know I have been for months on thís
thing and they keep telling me about Oregon. I know
Oregon is special, and this one county in Oklahoma.
But anything like what Mr. Gamble says - if that happens
it will be very encouraging.
MR. GRAVES: Ted, I would like you to tell the
Secretary also about the beginning and end of this
campaign, as far as the country as & whole is concerned,
when we are beginning and when we are finishing.
MR. GAMBLE: We are starting on March 15, Mr. Graves
and it will take at least until May first to finish this
job.
MR. GRAVES: They are not beginning everywhere on
the same day.
MR. GAMBLE: National "V" Day, the starting day,
will be different in different states. It is to be left
Regraded Unclassified
111
- 27 -
in the discretion of the state administrators as to
when to start them, but it will be state-wide whenever
it starts in & state.
MR. GRAVES: Have you further time?
H.M.JR: What have you got?
MR. GRAVES: Well, I have the Callahans and Mahans
and Houghtelings. We will put on as many as you would
like to - have time for.
H.M.JR: Well, I will give Callahan the time. He
will be the last.
MR. GRAVES: I would like to have, if you will
allow me to vary this just for a second, I would like
Mr. Duffus to tell us a little of what happened last
night at this--
H.M.JR: All right.
MR. GRAVES: ... this sing.
H.M.JR: Then I will say this, because I haven't
done this in so long. This meeting has been good for
me. So, let's - so you are not so crowded, let's put
it down for next Wednesday at ten o'clock, and I will
give you enough time so I won't crowd you. This is good
for me.
MR. GRAVES: Yes.
H.M.JR: Let's put it down for ten o'clock next
Wednesday and then run it through. So, we will hear
about this sing, and then I am afraid I will have to
stop. I have gotten a tremendous amount of pleasure
out of that parade of stars. I have heard two records
now and it is great stuff.
MR. CALLAHAN: We have twelve made.
Regraded Unclassified
112
- 28 -
H.M.JR: I know. How many stations?
MR. CALLAHAN: Seven hundred and four.
H.M.JR: When you get one that is humorous, let me
know, something really humorous, and I will send it
over to the White House. I don't want to send anything
over unless it is humorous. Have you got any that are
humorous?
MR. CALLAHAN: Olson and Johnson. I will have to
find a subtle humor rather than some of the obvious
humor. (Laughter.)
H.M.JR: No, it needn't be too subtle. Well,
let's hear about the sing, Mr. Duffus.
MR. DUFFUS: We had our first sing last night at the
Riverside Stadium. We played to a little over six
thousand people and sold all the stamps that we had at
two booths in the lobby. We ran short on stamps, I am
sorry to say that. The Army, Navy, and Marine Bands,
Lucy Monroe, Barry Wood, Irving Berlin, and the master
of ceremonies was Walter Pidgeon. The - we worked the
Army in by inducting, inlisting fifteen volunteers on
the stage, and I think it was one of the highlights of
the evening.
MR. GRAVES: Swearing them in as soldiers in the
Army.
MR. DUFFUS: Yes, they took their oath of allegiance.
H.M.JR: Did they cheer that?
MR. GRAVES: Yes.
MR. CALLAHAN: Oh, yes.
MR. DUFFUS: Oh, yes, people stood up and applauded.
H.M.JR: Were you there?
Regraded Unclassified
113
- 29 -
MR. BELL: Yes. I hever missed one of those. It
was really one of the grandest things I have seen.
She puts on a good show. That community sing she had
here last year at which there were about thirty-five
thousand people at the Water Gate, it is really quite
an inspiring sight, and you are amazed at the spirit
with which the people enter into it. I don't think
there was a soul left that place last night until it
was over, and it wasn't over until after eleven o'clock.
I think it is grand. She is going to put on a grand
show all over the country.
MR. GRAVES: What is her itinerary roughly,
Carlton?
MR. DUFFUS: Miami, St. Petersburg, New Orleans,
Mobile, Houston, El Paso, Dallas, Fort Worth, Oklahoma
City, and up the Mississippi Valley. We are going to
work it with the weather so that we can use the outdoor
stadiums, because we can take care of so many more
people, and put on really a better show than we did last
night, I believe.
H.M.JR: What other features, did you have?
MR. DUFFUS: On the bill?
H.M.JR: Yes. You said you had the swearing in
of these soldiers.
MR. DUFFUS: Well, three Minute-Men spoke on payroll
savings and various ways you can buy stamps and bonds,
and the purpose behind the campaign. Mr. Rust selected
those from the District of Columbia Minute-Men Speakers'
Bureau, and, of course, we utilized various parts of the
three bands for musical novelties and the like.
H.M.JR: And what did Irving Berlin do?
MR. DUFFUS: He introduced a new song, a very short
one. He sang "God Bless America."
Regraded Unclassified
114
- 30 -
H.M.JR: Did he?
MR. DUFFUS: And Barry Wood sang "Any Bonds Today?"
and helped in leading & couple of numbers for the entire
audience.
H.M.JR: Didn't they sing "I Paid My Income Tax
Today"? (Laughter.)
MR. DUFFUS: No. We are having a rally with Glenn
Miller and his orchestra on the north steps of the
Treasury this Friday, that is, on the Pennsylvania
Avenue side, from one to one thirty in the afternoon,
using the large flag poster as a. background.
H.M.JR: What time?
MR. DUFFUS: One to one thirty, between his shows
at the Capitol Theater he is coming over.
H.M.JR: I see. Seriously, isn't there anybody
interested in this group in other than their own income
tax, to get somebody else's paid? (Laughter.)
MR. GRAVES: No, we are not interested in them.
It interferes with bond sales.
H.M.JR: The President - who is his second press
man?
MR. KUHN: Hassett?
H.M.JR: Hassett said to me, "Mr. Morgenthau, I
want to compliment you on the cleverest piece of
psychology I have seen since I have been here, launching
your new tax bill just before income tax date, because
it makes everybody feel, well, how easily we are getting
off this year. (Laughter.) He said he thought it was
very clever. Well, this is a good meeting, Harold.
It was good for me.
MR. GRAVES: Fine, and we will be in again on Wednesday.
H.M.JR: At ten o'clock to allow more time.
Regraded Unclassified
115
March 5, 1942
2:40 pm
GENERAL ANILINE AND FILM
Present: Mr. Foley
Mr. O'Connell
Mr. Pehle
Mr. Bernstein
Mr. Pike
Mr. McConnell
MR. FOLEY: Well, Mr. Secretary, I haven't had &
chance to talk to these fellows very much. I had to
get Joe out of New York, and Bob had just gotten back
from Shreveport, and he was getting over this cold,
and he was down in Middleburg, 80 we all just got
together here a couple of minutes before we came in.
I think that Bob knows generally what we have got in
mind, and I think Bob is willing to help us. He says
he will need some help if he takes on the job.
H.M.JR: Well, let me tell you, so that you will
know. Last Friday at Cabinet they raised this question
in connection with the Japanese on the West Coast, who
was going to handle this thing, and they raised the
whole question, so I don't know just what the President
did or didn't want us to do, so I went in this morning
to see him and said we were ready and I wasn't interested
whether we had it today, tomorrow, or next year, but I
was interested in cleaning up 8 mess for him, this Aniline
and Dye particularly was a bad mess; and talking in the
room here, I thought if he would let me go ahead and do
it, the less he knew about it the better, and it would
be good for him. So, he said, "What are you waiting for"?
So, I said, "I just wanted to make sure that you wanted
it." "Go ahead, he said, "clean it up. I want you to
do it." So, I told him he would have plenty of complaints
and kick-back, and he said, "No, go right ahead and do it,"
Regraded Unclassified
116
- 2 -
and I said, "After a couple of weeks or months something
else comes up and you want to change the arrangement, it
is all right with me, but my thought for the minute is
that we could take these three companies and got the
Nazi influence out of them, and so forth and so on,
and the President said, "Go ahead," 50 on that basis with
the help that I can get, I thought we would do it, and
as I told the President, we are going to be ruthless
about it. He said, "All right." So, he raised the
question about, could we get American chemists to do
this, and I said I was sure that we could. I didn't
believe the Germans had & monopoly on anything. So,
that is it. I would like to get going this afternoon.
We have got this so-called charter of ours, laying down
the principles, and I should think that the thing would
be to send for Mack and his people and just tell them.
MR. McCONNELL: Mr. Secretary, Mr. Foley called me
in Texas. I told him I had two questions in my mind
and I would like to think them over and call him back.
H.M.JR: Does this machine bother you?
MR. McCONNELL: Not a bit, no.
H.M.JR: There is just one copy that goes in the
safe, but I can't remember, it is just - it is never -
if it bothers you, we will stop it.
MR. McCONNELL: Not a bit, Mr. Secretary.
H.M.JR: All right.
MR. McCONNELL.: You know, I have been quite active
in defense work, and I am still chairman of the board
of this engineers board that was appointed by the
engineering societies. I don't like to admit it, but
I do not believe that board would function as well if I
got off of it. The other question in my mind is the
question of competence. This is a highly technical
business. The technical staff down below are going to
do very much as they wish to some extent unless the
Regraded Unclassified
117
- 3 -
immediate superiors are well acquainted with the type
of business they are doing and know what is going on.
So, somewhat at Mr. Foley's suggestion I suggested two
additional men to act under the policy laid down by the
Treasury in the operation of that company, both of whom
have enough technical ability, and both of whom have a
great deal of administrative ability. I think that some
of these gentlemen here know both of them. One of them
is & man by the name of Wilson, who is in the oil business.
Ho is president of Pan American, a smaller oil company,
whowasalso at the head of the chemical oil section of
OPM, before the Oil Coordinator was appointed, and the
other is a man by the name of George Moffett, who is now
with the RFC and has charge of sugar and alcohol
purchases, the control of the RFC. He was chairman of
the Board of Corn-Planters. He is one of the most able
men that I knew of in OPM last spring.
H.M.JR: George Moffett is 8. very able man.
MR. McCONNELL: I think Robert Wilson is probably -
I think Mr. Pike knows Wilson perhaps better than I do.
He is one of the outstanding chemists in the country,
and he also has demonstrated his administrative ability
in the company he has been operating. It seems to me
that however you do this, sir, you should want one or
more individuals, two or three, preferably, in my mind,
who would take the responsibility and the authority and
do that job which the Treasury wishes to be done with
this company. I don't know whether that has appealed to
Mr. Foley. I didn't have a chance to ask him before I
came in here, but to my mind, I don't think that any
one man would do as good a job as those three men and
get it done as quickly, and get the company turned around
in whatever direction - in the way of production.
H.M.JR: Well, it sounds all right. I mean, each
person has to operate - three good men might be better
than one, and they might not. It depends upon how they
get along, you know. The way I feel is, you can do it.
If you want two fellows to go with you or three fellows
to go with you, that is your decision. That is the way
I feel.
Regraded Unclassified
118
- 4 -
MR. McCONNELL: Were you going to ask this board
to resign, this present board?
H.M.JR: Yes.
MR. McCONNELL: And you were going to appoint
new board members?
H.M.JR: Well, there is this thought. Under the
law it only needs three directors; and quite frankly,
if you could keep the three directors within the manage-
ment, that would be much better, and then I won't have
the politicians calling me up to make political directors.
An alternative to that would be to have three directors
who would be appointed from the Federal Reserve Board of
New York, who would be advisers, you see. They would
simply be there in advisory capacity, and you could have
your executive committee run your company. I mean, I
am just suggesting that as an alternative. In case
Senator "X" calls me up and says, "Look, Morgenthau, I
have got & swell director for you up in Buffalo; he is
a swell fellow, and I think you had better put him on,"
I can say, "I am awfully sorry, Senator, but I have asked
the Federal Reserve in the second district to lend me
three of their men, because we want their interest and
advice, and they have loaned three men as directors,
who would be more or less in an advisory capacity."
You could go either way, I don't care, see, but I was
just thinking there are two advantages. One is, it
would get the Federal Reserve interested. They cover
the whole district on the question of any refinancing
or anything like that. You would have their advice,
and you would be able to say, "Sorry, gentlemen, there
is no political pap. On the other hand, if you would
rather haveyourself and these other two men as directors,
that will be all right.
MR. FOLEY: Combine the two, Mr. Secretary?
H.M.JR: As far as we are concerned down here, the
only thing that I am interested in is to do a good job.
I want to get all the Nazi influence out of there, and
Regraded Unclassified
119
- 5 -
I want to get the company straightened out so it can
take on a maximum of war production, and I want to
keep politics out entirely. Now, how you do it and
the rest of that, that is up to you, and I don't expect
our boys to interfere with you, you see.
MR. McCONNELL: Well, there was another reason
for that. I don't believe that I could devote & hundred
percent of my time to this.
H.M.JR: Well, that is all right. You can do
enough to--
MR. FOLEY: You could organize it.
MR. McCONNELL: I think it could be done very well.
H.M.JR: This thing here, it is the first shot, and
all these fellows running down and complaining about us
and the rest of it and 80 forth, and do the one and
set a pattern and then the others are going to be easy.
This is the only really big one anyway.
MR. McCONNELL: I think that that suggestion would
solve your problem. I think it would take the responsi-
bility and the worry of that particular company off your
shoulders, and I think they would do as good a job as
anybody I know of. I don't know whether Pike agrees or
not.
MR. PIKE: Oh, I agree. I have known them for a
long while. They are good men. They are competent,
and they are not scared of things.
H.M.JR: Are they down here?
MR. PIKE: Yes. Today, I don't know, but--
H.M.JR: I mean, has Moffett separated himself from
his business?
MR. McCONNELL: Practically, yes. I think he
attends board meetings.
Regraded Unclassified
120
- 6 -
H.M.JR: I know George. He ran Corn Products
as well as any corporating was run in this country.
MR. McCONNELL: And he also has that technical
ability which I think is pretty necessary.
H.M.JR: Has he got that?
MR. PIKE: A surprising lot.
H.M.JR: I didn't know that. Did he have e. plant
in Germany? He has had them everywhere else.
MR. PIKE: Yes, he did. They ground corn in Germany.
H.M.JR: But, there are no connections there?
MR. McCONNELL: Oh, no, he wrote it off.
H.M.JR: But I mean no sympathetic connections?
MR. McCONNELL: Oh, no, he is 8. hundred percent
American.
H.M.JR: He could be a hundred percent American and
still not want to spit in Hitler's eye.
MR. McCONNELL: Well, he has been spitting a hundred
percent. I admire him very much. He won't make a good
speech, Mr. Secretary, and he won't talk to 8. large
number of people.
H.M.JR: He won't have to.
MR. PIKE: One at 8. time, I take it, would be his
speed.
MR. FOLEY: The thing that is most important in our
eyes, Bob, is to get somebody who doesn't believe that
all of the knowledge in this field is in the heads of these
Germans who have come over here, and who would be willing
ruthlessly to separate them when "know-how" can be substi-
tuted of unquestioned loyalty and-not get any resistance
from your management insofar as separating these fellows
is concerned, because it might have some effect on produc-
tion.
Regraded Unclassified
121
- 7 -
I mean if it is going to slow up production in
the beginning, from my standpoint, we have got to do that
in order to be able to tell the War Department and the
Navy Department that it is safe to deal with this
company. Now, there is an effective boycott against
this company now, because of its German background, and
the presence in the company of these German sympathizers.
Some of them have come over here and have become natural-
ized citizens, but they are still German, and they are
still representing their German connections.
H.M.JR: Let me interrupt you. Who is this man,
Tom Clark, on the West Coast?
MR. BERNSTEIN: He is the coordinator, acting
originally for the Attorney General in dealing with the
Japanese.
H.M.JR: Well, I read this to the President this
morning, just to show you. Here is Tom Clark, Chief
of Staff of General, DeWitt's Civilian Alien Control
Committee. Now, he made this statement yesterday. I
read this to the President today. He promised full
protection to evacuated property owners, and urged them
not to sell their property unless they get fair prices.
Custodians of alien property would be - guarantee that
all properties, whether owned by aliens or American-
born, will be returned to the original owners after the
war. And the President said, "He is crazy. What is the
matter with him?"
MR. FOLEY: That is right.
H.M.JR: So, I mean - maybe we are seeing things
under the bed, but General Aniline and Dye, certainly
in Germany, typify in business everything that world
domination does, and so forth, and so on, and what
we are trying to do is to eliminate that influence.
MR. McCONNELL: Your first objective is dependable
American management; and second, is capacity operation;
and down the line?
Regraded Unclassified
122
- 8 -
H.M.JR: That is right.
MR. PIKE: In other words, get these guys out if you
have to close & section down for a while.
H.M.JR: Are you going to be able to help us on this?
MR. PIKE: I hope SO.
H.M.JR: Because I mean, every day they tell me you
are off or on. I didn't call up Purcell, but the last
word I got on Friday was from Harry Hopkins, that I could
settle it any way that I wanted, and any way that I
settle it was agreeable to the President and him, but
there wouldn't be any letters other than any letter that
I wished to write.
MR. PIKE: I think the President made it pretty
clear to Purcell, and Hopkins did too. We felt that
under the circumstances - this move thing comes this
week. We are starting to move today. But there should
be no thought of my taking any vacation, permanent or
temporary, but that there is no reason in the world -
Hell, I am used to working until one o'clock in the morning.
I kind of like to. Joe and I used to do it in Tennessee
Valley Authority together. In extra-curricular work,
anything I can do, I will be very happy to.
MR. McCONNELL: Well, I think that is an awfully
good suggestion.
MR. PIKE: Without any official capacity or title
or anything, but get in there and pitch whenever you
think I can be used.
H.M.JR: Well, if you could do that as of from now
until we get the board of directors out, and the next
few days will be the difficult time. The howl that is
going up will be something terrible. Frankly, I am
going to rather enjoy it.
MR. FOLEY: You see, these fellows, Bob, did the
typical thing. They tried to buy protection by putting
people of influence in the administration and high places
in this country, and paying them huge salaries,
Regraded Unclassified
123
- 9 -
Homer Cummings, John E. Mack.
MR. PIKE: I had better make my confession now,
hadn't I?
MR. FOLEY: Those fellows. Now, Bill Bullitt
has resigned as chairman of the board, wrote & very
nice letter and got out, but that is the situation.
H.M.JR: You know, excuse me again for interrupt-
ing you, where Bill has been 8. perfect damn fool, if
he had released his letter a week ago, it would look as
if he resigned. Now, if he and the board all go out at
the same time, it is going to look as though he had been
kicked out.
MR. PIKE: It looks as if he was going with the
rest of the lot when he was out cleanly first.
H.M.JR: And I can't understand it.
MR. FOLEY: They don't know anything about business.
They haven't learned anything about the business, and
don't really care much about it except to take the cream
off, and the boys in Germany are perfectly willing to
have them do it 80 long as they keep the thing warm
for the Germans after the war is over.
H.M.JR: And this one New York law firm got two
hundred fifty thousand dollars last year alone.
MR. FOLEY: And they have got an ex-partner, a
fellow named Williamson, executive vice-president, and
he is getting one hundred thousand dollars now. They
are the conniving brains behind this thing, and they
hired Homer Cummings, and they have already paid Homer
Cummings a hundred thousand dollars, and they got him
on a twenty-five thousand dollar retainer this year.
He suggested John E. Mack, and put John E. Mack in there
at ninety thousand dollars. First after they began to
put their satellites on the board, the first thing they
did was to increase the board of directors from fifty
to two hundred fifty dollars 8. meeting, and pay the
chairman twelve thousand dollars.
124
- 10 -
MR. McCONNELL: All kinds of inducements.
MR. FOLEY: All kinds, and they have been handing
the pap around.
MR. McCONNELL: The Treasury owns this stock?
MR. FOLEY: Ninety-seven and a half percent.
MR. McCONNELL: Wouldn't you want one of your men on
the board, Mr. Morgenthau?
H.M.JR: Oh, no.
MR. McCONNELL: You would like to stay away from it?
Then we probably should have a lawyer on the board, too.
H.M.JR: Oh, we have got lawyers and economists.
We can always spare a lawyer or an economist.
MR. McCONNELL: I don't know about the latter.
MR. PIKE: Joe has been on it three months or more.
MR. FOLEY: Joe will stay with you.
H.M.JR: We can let you have & lawyer.
MR. McCONNELL: Well, I have no hesitancy in recom-
mending these men, but I would like the privilege of
bringing them in and have a chance to discuss it with
them when you would like to discuss it with them, and
check them up thoroughly.
H.M.JR: Oh, Mr. McConnell, I don't want to do it.
Look, if you and Sumner Pike would tell me that you will
go into this thing with Ed and Joe O'Connell, other than
in the next few days to talk things over, if the two of
you will say, "Now just forget about this thing, Morgenthau,
we will handle it, other than something tough, that is
what I would like. I mean, I have had my battle and my
Regraded Unclassified
125
- 11 -
heavens - over this man. (Pike) I mean, there was more
finagling going on. He ought to be terribly flattered.
MR. McCONNELL: Hasn't he been behaved? I feel a
certain responsibility for him.
H.M.JR: Oh, he is all right.
MR. FOLEY: You know, Bob brought him down here.
H.M.JR: As soon as I ask for him, then everybody
wants him. You said you had a confession to make.
MR. PIKE: It is a confession. I just told Ed as
I came in. I went to lunch with Ed Rose of the Public
Service of New Jerseyat the Carlton. He hailed across
the room, "Come on over and eat with us." Homer
Cummings was there.
MR. FOLEY: I told him it was a good thing he told
this, because we would have had a report on it very
quickly.
MR. PIKE: So, I have just had lunch with Homer
Cummings. I couldn't keep my face straight very well,
unfortunately.
H.M.JR: If you men want to do it, I don't want
to - I mean to say, I am not washing my hands of it, and
I am here; and if you say Mack won't resign or he will,
or this or that, or I have got to tell him something,
but I an satisfied, as I say, with the two of you and
then whoever you want to get to help you, if you don't
mind, I will just hold you responsible.
MR. PIKE: Yes.
H.M.JR: You see, I will just hold you responsible.
But we have fussed around with it, and I would like to
get off the ground and get going on this thing. Now,
Ed told me, for instance, that the Army has just given
them a contract for a time-fuse or something.
Regraded Unclassified
126
- 12 -
MR. FOLEY: The Ordnance Department of the Army
wants to give them 8 contract for a bomb fuse.
H.M.JR: There must be others which are backed up.
MR. O'CONNELL: There is a great deal of business
that is just waiting on our getting this thing straight-
ened around. The Binghamton plant, which has three hun-
dred employees, is a plant that will probably go out of
business in a matter of months unless it is converted to
wer production, and it is in process of being converted.
They cen be very readily converted to making shells and
bomb fuses and all those things. The other biggest part
of the company is the chemical and dye business, and, of
course, they are working at what I assume to be capacity,
but I think they could do a great deal of work, and they -
you could expand their production fifty percent, and they
still wouldn't be producing as much as is needed. About
sixty-five or seventy percent goes to defense. Practically
all the copy dye is produced by them, and they really need
& little drive, is what they really need, and we are
getting squared away with the War Department. I mean, these
direct orders. They gave them a contract three weeks ago
for a million and a half dollars of bomb shell fuses, and
it had got down to Washington, end the Under-Secretary of
war called it off.
H.M.JR: You see, I ought to explain it. I wrote a
letter around putting all these departments under notice
not to, so they won't do it until we take the curse off.
MR. FOLEY: Not only that, but after the matter was
called to their attention and they found out how vul-
nerable they were, they got SO scared they backed off so
far that Forrestal and Patterson signed & joint memorandum
attached to B. memorandum from the Provost Marshall General
giving evidences of actual espionage within the company,
and instances where information had been communicated to
the enemy, and they asked - recommended to the Secretary
that he take over the stock, amortize the company, and
that he do it quickly because they wanted to use the produc-
tivity of the plant.
Regraded Unclassified
127
- 13 -
MR. PIKE: The case is very clear, and you don't
have to worry about that.
H.M.JR: Well, why don't you do this, Mr. McConnell,
talk 80 more with them, but have you got any doubts now
about it?
MR. McCONNELL: Well, I haven't any doubts as to
your policy.
H.M.JR: How about doubts about your going into this
yourself?
MR. McCONNELL: Well, I have doubts about my own
ability to do this without & lot of help, Mr. Secretary.
I don't know this business.
H.M.JR: I didn't mean that. I mean, are you ready
to take off your coat and go to work?
MR. McCONNELL: If these gentlemen will come along,
subject to your approval.
H.M.JR: Sure, you fellows have got to get the
assistants you want, but let's say if it isn't them, it
might be somebody else.
MR. McCONNELL: Yes.
H.M.JR: In other words, I would like to start the
thing going this afternoon.
MR. McCONNELL: Well, I think we can get right
started on it, and I think we can get hold of these
fellows as soon as we get back to Foley's office.
H.M.JR: And you (Pike) can stick with us until
We can get these fellows started.
MR. PIKE: I will do everything I can in the mean-
time the commission allows me.
H.M.JR: Listen, you don't have to put the stuff
in the van.
Regraded Unclassified
128
- 14 -
MR. PIKE: But, I do have to be around-- (Laughter.)
Your boys have been benefiting quite a little bit. Mr.
Bernstein has just held his hands out and collected six
or eight very good men in the last few weeks.
MR. FOLEY: They fell off the tree. We didn't
shake it.
MR. PIKE: The gale is on, boys, and the apples are
falling to the ground, and another little push and there
will be about sixty or more off in the next few days.
Once we get them in Philadelphia, they will all go to
sleep like good Philadelphians, and we won't have any
more trouble. (Laughter.)
H.M.JR: Now, Joe, are you looking for any troubles
I ought to know about?
MR. McCONNELL: No, I don't think we will have any
trouble.
MR. FOLEY: How do you think we ought to handle
this?
H.M.JR: Look, why don't you go back to your room
and I am here if you need me, see.
Regraded Unclassified
129
March 5, 1942
3:15 p.m.
Leo
Crowley:
Hello.
HMJr:
Leo.
C:
Yeah.
HMJr:
Good afternoon.
C:
How are you?
HMJr:
I'm fine.
C:
That's good.
HMJr:
I had quite a talk with the President
C:
Yeah.
HMJr:
and as a result of that, we're going to
move in on Aniline Dye
C:
Fine.
HMJr:
.....and on Bosch and on Schering.
C:
That's good.
HMJr:
He wante us to go ahead at once.
C:
That's good. How did you get along with him
with the general picture, all right?
HMJr:
Well, we Just discussed this, and he doesn't
want to wait and he wants me to go ahead with
this.
C:
Fine. If I can help you any on it, let me
know.
HMJr:
Well, I know you can.
0:
All right.
HMJr:
But - and Ed will be in touch with you. But I
Regraded Unclassified
130
- 2 -
wanted to let you know that I'm doing this only
after explicit orders from the President.
C:
Fine. I'm glad you're going in on them.
HMJr:
And he wants it cleaned up, and I'm going to
do it and not bother him.
C:
Fine and dandy.
HMJr:
And Ed will be in touch with you.
C:
Fine. I'll help him.
HMJr:
Thank you.
C:
Good-bye.
Regraded Unclassified
131
author unknown.
orig to Deary 3/5
132
MOST INTERESTING ITEMS
Page
32
Charge that Treasury officials deceived the President
to induce his approval of a memorandum for the
suspension of five corporation officials.
Innuendo that Messrs. Foley and Berle "concocted" a
plan to discharge Ogden Hammond and concealed the
full facts even from Secretary Morgenthau.
33
Statement that "high authority" advised Homer Cummings
and Judge Mack to launch a counter-offensive against
Treasury and State Department officials, and that
this advise was followed.
35
Recommendation to have James Roosevelt employed as
salesman on the West Coast "with adequate compensa -
tion".
OTHER INTERESTING ITEMS
11 & 12 How Homer Cummings was retained by Breed.
13
Innuendo against Vice President Wallace.
14
Innuendo against Garey and Garey.
15
Innuendo against Edward Foley.
18
How Ogden Hammond met Lilly Stein, the German Spy.
19 & 20 Selection of Judge Mack by Homer Cummings.
21
Attack against the Treasury Department for alleged
inaction.
29
Innuendo that the Treasury Department did not
cooperate with the management but that the Department
of Justice did.
30
Innuendo that personal pique at & letter concerning
Stammler brought about Treasury action.
Regraded Unclassified
133
MEMORANDUM FOR MR. BULLITT
Re: General Aniline & Film Corporation
I. G. Farben of Frankfurt, Germany first established
some time in the late 1880's had by the outbreak of the
first World War in 1914 become one of the most powerful
corporations and industrial cartels, entirely concentrated
in the chemical and dye field with subsidiaries and af-
filiates covering the world. Out of the first World War
and the entry of this country into it in 1917 came the
seizure of all American properties of I. G. Farben and
after the war these were blanketed by American capital
into en organization which is today Allied Chemical & Dye
Corporation and its subsidiaries. Certain of the German
properties and formulas also passed to DuPont.
The difficulty with Allied Chemical & Dye was that
it never kept up its research while I. G. Farben went
shead in the years immediately following the first World
War. By the middle 20's I. G. Farben had again achieved
8. position of world dominance in the chemical and dye
fields and entered into licensing agreements throughout
the world with its principal competitors. In the late
20's I. G. Farben had progressed to the stage where it
Regraded Unclassified
134
- 2 -
organized two foreign holding corporations, one a Swiss
Corporation and the other an American Corporation, namely
I. G. Chemie and American I. G. This simplified account
disregards numerous other less important foreign sub-
sidiaries. Except for noting that I. G. Chemie was
organized and controlled and has ever since by direct
or indirect methods been entirely controlled by I. G.
Farben, we hereafter disregard the subsequent history of
I. G. Chemie insofar as it does not enter into the picture
of the General Aniline & Film Corp. If any questions
should arise 8.8 to the absolute control by I. G. Farben
of I. G. Chemie, various memoranda, statistics and other
supporting evidence can be adduced at great length to
show both the continuing and absolute nature of this
control.
In 1929 I. G. Farben had enough interests in America
and was receiving enough money from its patent licenses
to desire the establishment of a separate American branch
of its business, hence American I. G. was organized. I. G.
Farben was unduly anxious to distribute its assets as
widely as possible, due to unsettled conditions in Germany,
and also to obtain American capital. This it did by
Regraded Unclassified
185
- 3 -
issuing approximately twenty million dollars worth of
bonds of the new American company which it, the I. G.
Farben of Frankfurt, Germany, guaranteed both as to
principal and interest. The bankers for this loan were
the National City Bank, headed by Charles E. Mitchell
and by Henry Mann, Vice President in Charge of European
Affairs, & naturalized American citizen of German ancestry,
with his then office at Berlin. Of this $20,000,000
issued to the American public in bonds, approximately
$18,000,000 are now still outstanding in the hends of
American holders.
The organization of the American I. G. occurred in
1929. One year prior to this time I. G. Farben had
organized the Agfa Ansco Corporation to care for the
American camera and film market. These and other I. G.
Farben corporations were merged into one, General Aniline
Corporation in 1939. Two of the present directors of
General Aniline & Film, William C. Breed, senior partner
of Breed, Abbott & Morgan of New York City, and W. H.
Bennett, Chairman of the Board of the Immigrant Industri-
al Savings Bank of New York City, became members of the
Agfa Ansco Corporation Board. About this time I. G. Farben
Regraded Unclassified
- 4 -
136
also organized a company known 0.5 the General Dye Stuffs.
This Corporation, however, was wholly owned by two
naturalized Germans, Ernest Hallbach and W. H. Duisberg-
Duisberg comes from an old I. G. Farben of Frankfurt
family, his parents having been leading figures in the
original formation of the German dye cartel. The General
Dye Stuffs Corporation was formed mainly to handle the
import and sale of I. G. Farben's dyes. In the beginning
only a small proportion of its sales came from American
I. G. but as the American branch expanded an increasing
share of General Dye Stuff's business came from this
source. A contract between American I. G. and General
Dye Stuff was entered into whereby the latter undertook
the sale of all products of the American I. G. with
compensation at the rate of 10 per cent. This rate of
compensation was changed from time to time until lately
it stood at 15 per cent on a constantly expanding sales
market and in the calendar year of 1941 costing General
Aniline & Film Corp. approximately $4,000,000. The full
facts concerning General Dye Stuffs are more fully brought
out in the complaint of General Aniline & Film Corp. filed
in January 1942 to cancel saiá contract, copy attached
hereto and marked Appendix "A"-
Regraded Unclassified
13?
- 5 -
Going back to 1929 and the original organization of
the American I. G. which has now become General Aniline s
Film Corp., I. G. Farben was extremely desirous of secur-
ing & top American financial name to go on the Board of
Directors of American I. G. Insomuch 8.8 the Ford Motor
Company through its English subsidiary, Ford Motors
Limited, was organizing 8. Ford Motor Company of Germany
through Charles E. Mitchell and Henry Mann on the one
hand and Dr. Carl Bosch representing I. G. Farben on the
other, Mr. Edsel Ford, became & director first of American
I. G. and later of General Aniline & Film Corp. while
Dr. Bosch became 8 director of the Ford Motor Company of
Germany. Mr. Ford retained his post as a director of
General Aniline & Film Corp. until sometime in the
summer of 1941 when amidst the gathering governmental
difficulties he resigned from the Board.
After 1929 the history of American I. G. is one of
uninterrupted growth and prosperity undisturbed by any
untoward influences until the year 1939. Starting with
8 negligible share of the American market, by that time
American I. G. had become the second film industry of the
United States and in effect the only competitor of Eastman
Regraded Unclassified
138
- 6 -
Kodak Company on the one hand and the third most important
producer of dye stuffs and chemical dyes on the other,
ranking after Allied Chemical and DuPont. However, the
set-up of this organization was composed of various com-
panies and subsidiaries and it was decided in 1939 with
the shadow of the second World War already on the horizon
to simplify the corporate structure of these American com-
panies owned or controlled by I. G. Farben. Hence, in
1939 General Aniline & Film Corp. was formed. Its prin-
cipal officers were Dr. Carl Bosch (Chairman of I. G.
Farben), Chairman of the Board, Mr. D. A. Schmitz (brother
of Geheimrat Doctor Herman Schmitz president of I. G.
Farben), president of General Aniline & Film and Messrs.
Aickelin, Rudolph Hutz, W. P. Pickhardt, Ernest Schwarz,
W. H. vom Rath, F. W. von Meister and Hugh S. Williamson.
Williamson whose name will figure prominently in other
connections later was formerly 8 junior partner of Breed,
Abbott and Morgan and because of his adept fitting into
the picture as shown by his many trips to Germany, was
rewarded with office as vice president and treasurer of
the new company.
Regraded Unclassified
139
- 7-
From this point onward we are discussing General Aniline
& Film Corp- whose predecessors we have heretofore briefly
traced. General Aniline & Film Corp. is a corporation
organized under the laws of the State of Delaware with an
authorized capital of 3,000,000 "A" shares and 3,000,000
"B" shares. Both "A" and "B" shares have equal voting
rights. There are issued and outstanding of the "A" shares
only 529,700-2/3 shares of which 58,099-2/3 are owned by
629 miscellaneous individual holders, C. G. Howland Shay,
assistant Secretary of State owning 100 shares, whereas all
the other issued and outstanding "A" shares are owned
directly or indirectly by I. G. Chemie. The "B" shares
in the amount of 3,000,000 were all issued but 950,000 of
them were repurchased in June 1940 by General Aniline &
Film Corp. from I. G. Chemie for payment in cash, a device
which it is readily seen was simply another method of trans-
ferring a portion of the capital of General Aniline & Film
Corp. to Swiss I. G. Chemie. These 950,000 shares are held
as treasury stock subject to resale at the will of the Board
of Directors. The 2,050,000 shares of "B" are outstanding
in the names of certain Dutch subsidiaries of I. G. Chemie
which gives color to the so-called Dutch claim to ownership
Regraded Unclassified
- 8 -
140
of a portion of this corporation hereinafter more fully
discussed. A. more detailed but somewhat confused account
of these matters is contained in the printed document
attached hereto and marked Appendix "B" and called "History
of Ownership of Securities of General Aniline & Film Corp."
We now concern ourselves with a brief history of
the interest of the various government agencies in this
corporation. The first group of people who became inter-
ested in this concern was the Securities & Exchange Com-
mission. Around 1935 or 1936 the S.E.C. became interested
in the question as to who was the beneficial owner of
General Aniline & Film Corporation. Company records and
indeed the Company officials were unable to cast any light
on this subject and professed ignorance as to whether they
were actually controlled by Dutch, Swiss, English or German
corporations. Mr. Williamson accompanied by Mr. D. A. Schmitz,
on one of his numerous trips to Switzerland and Germany,
was informally told that I. G. Chemie of Switzerlend was the
beneficial owner of the shares. The S.E.C. from 1935 to
date has been very much interested in this matter and still
is and still has no proof meriting court standing 8.8 to the
beneficial ownership at any given time of the stock of the
Regraded Unclassified
140
- 8 -
of a portion of this corporation hereinafter more fully
discussed. A more detailed but somewhat confused account
of these matters is contained in the printed document
attached hereto and marked Appendix "B" and called "History
of Ownership of Securities of General Aniline & Film Corp."
We now concern ourselves with & brief history of
the interest of the various government agencies in this
corporation. The first group of people who became inter-
ested in this concern was the Securities & Exchange Com-
mission. Around 1935 or 1936 the S.E.C. became interested
in the question as to who was the beneficial owner of
General Aniline & Film Corporation. Company records and
indeed the Company officials were unable to cast any light
on this subject and professed ignorance as to whether they
were actually controlled by Dutch, Swiss, English or German
corporations. Mr. Williamson accompanied by Mr. D. A. Schmitz,
on one of his numerous trips to Switzerland and Germany,
was informally told that I. G. Chemie of Switzerland was the
beneficial owner of the shares. The S.E.C. from 1935 to
date has been very much interested in this matter and still
is and still has no proof meriting court standing 8.8 to the
beneficial ownership at any given time of the stock of the
Regraded Unclassified
141
- 9 -
General Aniline & Film Corp. In this connection it might
be interesting to point out that I. G. Farben was accustomed
to list balance sheets of its owned or controlled subsidi-
aries on the back of its annual report. The General Aniline
& Film Corp. was so listed in the Annual Report of I. G.
Farben of Frankfurt, Germany of 1939, and for all the
years from 1929 to 1939 inclusive.
The next governmental department to become interested
in the General Aniline & Film Corporation was the Depart-
ment of Justice (Antitrust Division) which late in 1939
began an investigation into the affairs of this corpora-
tion along with certain other German controlled corporations
in this country. This investigation has proceeded intensively
since and is not yet completed although to date it has
resulted on December 19, 1941 in the indictment of the
Corporation and its leading German officers for violating
the Antitrust Laws by the allocation of world markets in
criminal conspiracy with I. G. Farben of Germany. The
Corporation alone, earlier in 1941, had been indicted
along with the Aluminum Corporation of America and American
Magnesium Corporation for restricting the output of magnesium.
Other more important and more sensational indictments are
Regraded Unclassified
- 10 -
142
expected in February or March 1942. A copy of the indictments
of December 19, 1941 is attached hereto and marked Appendix
"C"- The other activities of the Department of Justice
incidental to these investigations are more fully described
in the following portions. of this memorandum.
As pointed out above, 1,500,000 of the "B" shares
(all beneficially owned by I. G. Chemie) are listed on the
stock books in the names of certain Dutch subsidiaries.
When the invasion of the Netherlands occurred in May 1940,
these shares had not been transferred. Shortly thereafter
the "freezing orders" of the Department of Treasury clamped
down and forbade, amongst other things the transfer of any
corporate stock listed in Dutch names without the consent
of the Department of the Treasury. In May or June 1940
General Aniline & Film Corp. and I. G. Chemie filed two
applications with the Department of Treasury for the transfer
of these 1,500,000 shares of "B" stock listed in Dutch
corporate name to I. G. Chemie. This application fell
under the jurisdiction of Mr. Edward H. Foley, Jr., general
counsel of the Treasury, and his immediate subordinates
including Mr. Joseph J. O'Connell, Jr. and Mr. Bernard
Bernstein. Sometime later an Interdepartmental Committee
Regraded Unclassified
143
- 11 -
composed of Mr. Dean Acheson of the Department of State
and a member of the firm of Covington, Burling, Rublee,
Acheson & Shorb of Washington, D. C., Mr. Edward H. Foley, Jr.,
general counsel of the Department of Treasury, and Mr. Francis
M. Shea, Assistant Attorney General, Claims Division, rep-
resenting the Department of Justice, was formed. Before
this Committee the various interests lined up consisting
primarily of the company acting through its officers
Messrs. Schmitz and Williamson and its counsel, Mr. Breed,
of Breed, Abbott & Morgan, and Mr. Martin Saxe on the one
hand and Dr. Werner Gabbler, attorney in fact for I. G.
Chemie and his attorneys, Messrs. Covington, Burling, Rublee,
Acheson & Shorb on the other. Many documents were filed
by the protagonists on this matter before both the Department
of the Treasury and before the Interdepartmental Committee.
Nothing was ever accomplished. From the time of the applica-
tion in 1940 to date, no action has ever been taken by
the Department of the Treasury or the Interdepartmental
Committee on this application.
We come now to the chronology which is a matter of
personal knowledge. Early in 1941 Mr. William Breed, finding
Regraded Unclassified
144
- 12 -
that he was unable to make headway with the Department of
Treasury, solicited the aid of the Department of Justice,
interviewing Messrs. Thurman Arnold, Fowler Hamilton and
Wilber Stammler- From time to time various interviews
were had with Mr. Breed and with Messrs. Schmitz and
Williamson resulting in the retention by Mr. Breed and
his firm, Breed, Abbott & Morgan, but not by the company
which he then refused to represent, of Mr. Homer Cummings
of Washington, D. C. as special counsel.
The first occasion of this employment of Mr. Cummings
was Dr. Gabbler's scheme of having the 1,500,000 shares
whose transfer was then and is now in question placed in
a voting trust agreement of which he and two other Chemie
selected agents would be the trustees. Dr. Gabbler and
his counsel, Messrs. Covington, Burling, Rublee, Acheson &
Shorb, were of the opinion that this voting trust agreement
would avoid the powers of the Alien Property Custodian in
time of war. Mr. Cummings' opinion was to the contrary
and a copy is attached hereto marked Appendix "D", and
through acceptance by the Department of Justice became in
fact the law of the case. This voting trust scheme was
Regraded Unclassified
145
- 13 -
then dropped. In this, however, as in his other ventures,
Dr. Gabbler and I. G. Chemie had the active support of
the Minister from Switzerland, C. W. Bruggemen, whose
wife is the full sister of Vice President Wallace.
At about this time, that is in May or June 1941,
Mr. Edsel Ford became perturbed by the way matters were
shaping up and in particular his vulnerable connection
with an obvious German interest and he therefore decided
to employ Mr. Cummings as counsel to the end that he
might retire from any connection with General Aniline &
Film Corp. This was successfully accomplished in late July
1941.
Efforts meanwhile were being made by some of the
directors, notably Messrs. Breed, Williamson and Bennett,
to effect the sale of the I. G. Chemie stock blocked by
the Treasury to an obviously American interest. In this
connection Libby Owens Ford Corporation, among others,
WAS approached and was greatly interested only to find
at the crucial moment of negotiations that I. G. Chemie
found it impossible to part with their holdings. Later
on International Telephone & Telegraph Corporation was
approached with much the same result. All of the above
Regraded Unclassified
146
- 14 -
negotiations purportedly met with the approval or cooperation
of D. A. Schmitz the president of the concern. In July
the directors received a telegram from the president of
I. G. Chemie, Felix Iselin of Switzerland, advising them
that they should no longer concern themselves with the
problem of selling the stock and that I. G. Chemie had
found "a 100 per cent American concern" to which they
intended to transfer their holdings. This concern was the
General Dye Stuffs Corporation mentioned earlier in our
history. Paranthetically it may be noted that the stock
ownership of General Dye Stuffs had nominally already
passed 51% into the name of D. A. Schmitz, and that in
any event the three individuals named as owners of General
Dye Stuff stock, Duisberg, Hallbach and D. A. Schmitz,
were all complete tools of I. G. Farben- General Dye
Stuffs was represented in this matter by the firm of
Garey & Garey of New York, a firm of somewhat questionable
antecedents and background. Raoul Desvernine (a former
classmate and friend of Thurman Arnold who banked too
heavily on this connection) formerly & partner of Miller,
Miller, Hornblower, Weeks & Boston, now the Wendell Willkie
Regraded Unclassified
147
- 15 -
firm, but who on dismissel from that firm became associated
with and later president of Crucible Steel Corporation, and
was summarily dismissed from that post in November 1941 and
thereafter became a partner of Garey & Garey under the firm
name of "Garey Desvernine & Garey" was associated as counsel
with Garey & Garey in this matter. These individuals and
firms along with Covington, Burling, Rublee, Acheson &
Shorb represented Dr. Gabbler, attorney in fact for I. G.
Chemie, throughout the discussions wherein these people
were all pressing for the granting of the application to
allow for transfer of the shares from Dutch to Swiss name
and then to sell this stock to General Dye Stuffs. This
application was denied by the Treasury Department on
October 2, 1941 after many weeks of delay, principally we
understand through the activity of Mr. Bernard Bernstein
in the absence from town of Mr. Edward Foley.
To return to our directors in New York at the moment
they received the telegram from Felix Iselin outlining
the aforementioned plan of sale, all of them including
D. A. Schmitz professed innocence of any prior knowledge
that such an idea was thought of. It was a habit of
Regraded Unclassified
148
- 16 -
Mr. D. A. Schmitz to receive advice and counsel from his
brother Geheimrat Doctor Herman Schmits each week by
trans-atlantic telephone. Geheimrat Doctor Herman Schmitz
would journey to Basle, Switzerland and the connection
would be put through to his brother in New York City.
D. A. Schmitz anxious not to lose one particle of the
pearls of wisdom kept accurate stenographic transcripts
of these calls in the top drawer of his desk at 230 Park
Avenue- The Department of Justice officials requested
permission to go through the company's papers, received
it through the intervention and aid of Mr. Breed. (It
may be noted at this time that Mr. William Breed was
becoming more entangled in his activities as a director
of General Aniline & Film Corp. and he brought in his
distinguished partner, Charles H. Tuttle, to give legal
advice on the complex matters of this corporation. The
time of these matters may be fixed as the latter part
of August 1941.) The Department of Justice discovered
these transcripts of the telephone conversations and they
became known to the other directors. This resulted in
8. hurried meeting of the Board to discuss these recent
developments in which Mr. Schmitz appeared to be concealing
information from his fellow members of the Board of Directors.
Regraded Unclassit
149
- 17 -
From that time forward until the meeting of September 23, 1941
& great controversy raged in the Board of Directors and
culminated in the removal of Mr. D. A. Schmitz as president
of General Aniline & Film Corp. Throughout this period
I. G. Chemie and its American representatives fought vigor-
ously for the retention of Mr. D. A. Schmitz and demanded
the resignation of his opposing directors. A complete
printed statement of the minutes of the meetings of the Board
of Directors of the corporation from August 20, 1941 to
October 2, 1941 inclusive are attached hereto and marked
Appendix "B".
Thwarted in their attempt to gain control of General
Aniline & Film-Corp. and doubly inspired by the removal of
D. A. Schmitz as president on September 23, Hallbach and
Duisberg sought a new channel of approach within & few days
of Schmitz's removal. The laws of the state of Delaware
are such that a stockholders' meeting can be called and held
without regard to size of the holding requesting it, when-
ever the regular annual meeting of the stock has once been
passed. No annual stockholders' meeting was held in April
1941 or thereafter until this date because of the fact that
the Treasury's freezing of the I. G. Chemie stocks rendered it
Regraded Unclassified
- 18 -
150
impossible to secure a quorum for the holding of such a
stockholders' meeting. It then developed that a certain
Mr. Ernest Flender, & naturalized American citizen of
German birth, who previously had served in the German
Imperial Army during the first World War, brought suit
to Delaware before the Chancellor for a stockholders'
meeting. Mr. Flender was represented in this matter by
the firm of Garey & Garey and Mr. Desvernine. Of possible
interest is the fact that Mr. Flender, was a partner of
Richard & Company, an old New York brokerage company
whose senior partner George N. Richard, had given a letter
of introduction to Lilly Stein to Mr. Ogden H. Hammond, Jr.
in May 1939. It will be remembered that Miss Stein has
since pled guilty and has been sentenced to ten years in
Federal prison for espionage. Mr. George N. Richard, a
Jew of social ambitions, many of which have been realized
in Long Island, and a friend of Mr. William C. Breed, was
after considerable pressure by Mr. Breed brought to compel
Mr. Flender to retire from future maintenance of this suit
against the American directors. In Mr. Flender's place in-
stead was substituted Dorothy P. Kahle, 8. sister of the late
W. P. Pickhardt, already under indictment by the Department
- 19 -
151
of Justice at this time and a relative also of Duisberg.
This suit was set for hearing in Delaware on October 10,
1941. It became apparent to the Department of Justice
that this was merely 8. scheme to retain German control
inasmuch as at any stockholders' meeting the free German
held
stock would be certain to elect subservient directors
and oust all opposing ones. Accordingly, under direct
orders of the Attorney General through the intermediation
of Mr. Hugh Cox, first assistant to Thurman Arnold and
Mr. Wilber Stammler, Mr. Fowler Hamilton was dispatched
to Wilmington to request 8. postponement for sixty days
until the Department of Justice should have completed
its investigation of the corporation. A copy of the
transcript of the proceedings had in the Chancery Court
of Delaware on October 10, 1941 and the order of the
Chancellor postponing further hearing of this matter until
December 10, 1941 is attached hereto and marked Appendix
"F". Around this time the Hon- Homer Cummings consented,
feeling that a large portion of the German influence had
been removed, to represent the corporation as such.
Mr. Cummings advised the directors that a man of impeccable
patriotism and one known personally to the Administration
should be selected as president of the Corporation. John E.
Mack of Poughkeepsie, New York, was suggested.
Regraded Unclassified
152
- 20 -
This suggestion met with some opposition from & group
of the directors led by Mr. Hugh Williamson and in this con-
nection it might be well to state that Mr. Williamson had
suggested the election of Messrs. Baragwanath and Tallbot
as directors during the stormy period of the early fall.
It is believed that these directors were approved by Gordon
Renschler of the National City Bank. In the meantime a ques-
tion had arisen as to the voting power of foreign held stock
and although both the Department of the Treasury and the De-
partment of Justice because of interdepartmental difficulties
refused to rule upon this matter, Mr. Homer Cummings delivered
an opinion on October B, 1941 that blocked stock could not
vote and 8. copy of this opinion is attached hereto and marked
Appendix "G". In the interim the affairs of the corporation
after the discharge of Mr. Schmitz as president were carried
on by Messrs. Hutz and Williamson, senior vice presidents.
After considerable negotiation between William C. Breed and
Mr. Cummings on one side and Williamson and "The National
City" group of directors on the other, it W&S agreed to elect
Judge Mack as president on October 31, 1941. Photostatic
copies of the minutes of the meetings of the Board of Direc-
tors from October 7, 1941 through October 31, 1941 (at which
Regraded Unclassified
153
- 21 -
meeting Judge Mack was elected president of the corpora-
tion) are hereto attached and marked Appendix "H". This
election of Judge Mack as president and director of the
corporation was later approved and ratified at a special
meeting of the Board of Directors held on November 5, 1941,
and a copy of the minutes of the meeting is attached hereto
and marked Appendix "I".
It may be mentioned throughout this time among other
agencies, the Department of the Treasury was constantly
being solicited both by the Department of Justice and
members of the company to intervene in the internal af-
fairs of this corporation and make certain of the con-
tinuance in office of the American directors 80 that their
policy of Americanization might be carried out. Throughout
this period the Department of the Treasury refused to take
any action whatsoever. Further developments in this matter
are shown by the minutes of the meetings of the Board of
Directors of November 5, November 14, November 21, 1941,
and a copy of these minutes is attached hereto and marked
Appendix "J". It is to be noted that Mr. W. H. Vom Rath
resigned as secretary and director of the corporation on
this later date and was replaced by Mr. F. A. Gibbons as
secretary.
Regraded Unclassified
- 22 -
154
Shortly afterwards as revealed by the minutes hereto
attached Mr. Hans Aickelin also resigned as director of this
corporation. This left two vacancies on the Board of Direc-
tors with a third vacancy shortly created by declaring vacant
the office of Felix Iselin as director. Mr. Iselin, despite
repeated promises by cable had never attended any of the
Board meetings. In the interim the approaching date of
December 10, 1941 when the adjourned hearing in the Delaware
Chancery was again coming up was more and more in the minds
of the directors and the managements of this corporation.
At this point the Treasury Department and the Inter-depart-
mental Committee showed 8. peculiar reluctance to interfere
with the proposed stockholders meeting. John E. Mack and
Mr. Cummings together interviewed various Treasury officials
including the Secretary and also Mr. Shea of the Department
of Justice as well as the Attorney General personally. Mr.
Cummings was able to convince the Attorney General who pre-
viously had been inclined upon the recommendation of Mr. Shea
to do nothing in this matter that he should again intervene
and request further postponement lest the company fall back
into the hands of German dominated interests. Accordingly,
Mr. Fowler Hamilton was again dispatched to Wilmington and
Regraded Unclassified
155
- 23 -
secured a postponement of the stockholders meeting for 90
days or until March 12, 1942. A copy of the transcript of
his hearing before the Chancellor at Wilmington is attached
hereto and marked Appendix "K". On December 10, 1941 8. for-
mal reason to show cause why a special meeting of the stock-
holders should not be held was filed on behalf of General
Aniline & Film Corp. and a printed copy of it is attached
hereto and marked Appendix "L".
Regraded Unclassified
- 24 -
156
Mr. Cummings and Judge Mack felt that 8 figure of na-
tional importance and & person of considerable energy was
needed as director and Chairman of the Board to facilitate
the Americanization of the corporation. They suggested the
Hon. William C. Bullitt for this position. After 8. discus-
sion with Mr. Bullitt and after he had thoroughly discussed
it with prominent governmental officials he determined to
accept this position. The interesting correspondence which
is contemporary with your acceptance of election to the
Board of Directors is not attached hereto inasmuch as you
both have knowledge of it and retain copy of it in your
files and it is not felt advisable to spread this matter
further upon the files without your expressed approval. On
December 5, 1941 Mr. Bullitt was elected a director of General
Aniline & Film Corp. and the minutes of that meeting are at-
tached hereto and marked Appendix "M". A printed communi-
cation signed by Mr. Mack as president of the corporation
sent to all the stockholders of the corporation dated Decem-
ber 12, 1941 is attached hereto and marked Appendix "N".
Also attached hereto and marked Appendix "0" is a copy of
the last Annual Report of the Corporation, namely for 1940.
Regraded Unclassified
- 25 -
15?
It may be noted that prior to this time and on
December 1, 1941 Mr. Ogden H. Hammond, Jr., now on leave
without pay from the Foreign Service of the United States,
was appointed by President Mack as his confidential aid
and personal assistant with title of Assistant to the
President with a salary of $7500 a year plus necessary
business expenses and he had entered immediately on his
duties and continued there-in. This was done with the
full knowledge and consent of the Department of State as
shown by the attached letters of Mr. Hammond, Jr. and of
J. Howland Shaw, Assistant Secretary of State, and marked
Appendix "P".
On the morning of December 12, 1941 everyone in General
Aniline & Film Corp. was astounded by the sudden appearance
of numerous Treasury agents under the personal direction of
Mr. Joseph J. O'Connell, Jr. as authorized Treasury repre-
sentative in the office of the General Aniline & Film Corp.
to seize control of the business under instructions of the
Secretary of the Treasury marked through the Federal Reserve
Bank &S a part of the freezing control of the Treasury De-
partment, a copy of the orders under which they acted, Bul-
letin No. 2, is attached hereto and marked Appendix "Q"-
Regraded Unclassified
158
- 26 -
After some discussion with President Mack and other of-
ficers of the Corporation a general policy of cooperation
was agreed on between Mr. O'Connell and Judge Mack.
Mr. Stammler of the Department of Justice happened to
be present in Judge Mack's office on the morning of
December 12, 1941 on which this seizure was made.
Routine matters occupied the remainder of the month
of December 1941 with Judge Mack and the management de-
voting its time and cooperation to the War Department to
effect protection of the plants and to plan further expan-
sion in the interests of the Army and Navy. Judge Mack
and Mr. Cummings also requested, through the Attorney
General personally, that the F.B.I. make an investigation
of certain officers and individuals in the corporation.
During this time Mr. Ralph Budd, President of the Chicago,
Quincy & Burlington Railroad and adviser to President
Roosevelt on transportation, and Mr. Robert L. Stevens
of New Jersey and son-in-law of Brigadier General and
Mrs. Cornelius Vanderbilt, were elected members of the
Board of Directors at B. meeting of the Board held on
December 19, 1941. Prior to this time Messrs. Aickelin
and Schwartz had resigned as directors of the company and
Regraded Unclassified
159
- 27 -
Mr. Schwartz from all positions whatever held in the com-
pany. The minutes of these meetings are marked Appendix
"R" and are attached hereto. At a later meeting of the
Board of Directors held on December 24, 1941 Mr. Bullitt
was elected Chairman of the Board at & salary of $12,000
per annum beginning with the date of his election and a
copy of the minutes of this meeting is attached hereto and
marked Appendix "S".
In the meantime the Treasury Department had expanded
its activities in the Corporation. It was employing upwards
of fifty agents throughout the plants of the corporation
located through New York and New Jersey all under the di-
rection of Mr. Sam Klaus to endeavor to ferret out any dis-
loyal activities on the part of the personnel of the cor-
poration. The Department of Justice in the first and most
minor of its series of indictments springing from the long
continued investigation of the affairs of this company on
December 19, 1941 indicted the Corporation and many of its
previous officers and directors in a series of indictments,
attached hereto in Appendix "C".
Regraded Unclassified
- 28 -
160
During the month of December Mr. Cummings and
Mr. Hammond sought to reach some working agreement with
the Dutch "interests". The Dutch were represented by
Mr. John Sharp of the firm of Sullivan & Cromwell and
the matter was in the hands of a certain Mr. Molekamp
of the Royal Dutch Legation. Mr. Bullitt interviewed
Mr. Molekamp's assistant immediately prior to (Bullitt's)
his departure and subsequently Mr. Hammond interviewed
Mr. Molekamp and took him to the offices of Mr. Cummings
and arranged an appointment with Mr. Cummings, Mr. Sharp
and Mr. Molekamp. These gentlemen met together with
Mr. Tuttle of Breed, Abbott & Morgan and Judge Mack and
discussed the situation. The Dutch were willing to agree
to B. Board of Trustees to represent their stock if and
when they should obtain 8. clear title to it but they were
unwilling to allow the present management to obtain con-
trol. Their suggestion was that two members of the trustees
be appointed by Judge Mack and Ambassador Bullitt and two
members by themselves each to have equal voting power.
This suggestion was definitely unsatisfactory to the
present management and negotiations were dropped for the
time being. They have not yet been resumed.
Regraded Unclassified
161
- 29 -
The foregoing more or less in chronological order
covers the events of the year 1941 and brings the year
to & close with a definitely American Board of Directors
in place of the former German control with the only pre-
vious people with Farben backgrounds left on the Board
of Directors being Messrs. Hutz and Schmitz and with
proceedings being contemplated for the removal of Schmitz.
It may be parenthetically mentioned that it was the man-
agement's intention while dispensing with other Germans
to retain Mr. Hutz who had & long time intimate knowledge
of the company and who was within one year of his retire-
ment in any event.
In this connection it may be mentioned that the De-
partment of Justice cooperated with the management and had
not indicted Hutz but had subpoenaed him for future indict-
ment in connection with the indictment sent down December 19,
1941. Mr. Schmitz claimed to be president and wrote Judge
Mack under date of December 18, 1941 and to which Judge
Mack replied on December 30, 1941, copies attached hereto
and marked Appendix "0". It is to be noted that Mr. Schmitz
has since attended Directors meetings and has accordingly
waived any question of the legality of his removal as president.
Regraded Unclassified
162
- 30 -
He is willing to resign at any time when requested to do
50 by either the Attorney General or Secretary of the
Treasury. He has been barred from the premises of General
Aniline and Film Corp. by an order of the Treasury dated
January 28, 1942. It is suggested that the useful thing
to do would be to have either the Attorney General or the
Secretary of Treasury request Mr. Schmitz's resignation
and be done with that gentleman for good and all.
We turn now to the rather dramatic developments of
January 1942. Apparently the Treasury supervision was run-
ning smoothly and the management was proceeding with plans
for reorganization of the company and with the cooperation
of the British Intelligence Section in New York had ar-
ranged for realignment of its South American business when
the first inkling came that all was not well on the Treasury
front. On January 8 Mr. Edward H. Foley, Jr. general counsel
of the Treasury, called Thurman Arnold and complained of
Mr. Stammler's activities in General Aniline & Film Corp.
Mr. Arnold refused to hear any discussion of this matter
orally and asked Mr. Foley to write him a letter which
Mr. Foley did under date of January B, 1942. As a result
Regraded Unclassified
163
- 31 -
of this letter an amicable conference between Mr. Arnold,
Mr. Stammler and Mr. Foley was held. Mr. Stammler filed
& memorandum dated January 16, 1942 with Mr. Arnold, copies
of Mr. Foley's letter and Mr. Stammler's memorandum (with
attachments omitted) are attached hereto and marked Appendix
"V": This concludes the episode 80 far as Mr. Stammler and
the Department of Justice is concerned, although Mr. Stammler
has taken other steps to make sure the record of this matter
is set straight so far as his own activities in this matter
are concerned. Apparently the Department of the Treasury
was angered into this position by & letter from Judge Mack
to Mr. Stammler of the Department of Justice dated January 7,
1942 which spoke of certain Treasury attempts to disregard
the business of General Aniline & Film Corp. with govern-
mental departments which in Judge Mack's picturesque lan-
guage led to the conclusion that "it would be futile on
my part to try and extend ourselves to help successfully
promotion of our War if I am going to be whipsawed from
behind." A copy of Judge Mack's letter dated January 7,
1942 is attached hereto and marked Appendix "W".
Regraded Unclassifie
164
- 32 -
The next attempt of the Treasury was 8. direct telegraphic
order dated January 13, 1942 suspending and immediately barring
Aickelin
from the premises of the Corporation Messrs. Hutz,/vom Rath,
von Meister and Eckler, a copy of which order is attached
hereto and marked Appendix "X". This order was complied with
by the corporate officers although with some misgiving. It
was later learned through governmental sources that this had
been done by written memorandum approved by the White House
on factual misrepresentations from Treasury officials.
Mr. Leo Crowley specifically refused to approve this order
although both he and Judge Mack (who never knew of the
order's existence until after its issuance) were quoted by
Treasury officials to President Roosevelt as having approved
it in advance. Sufficient comment on the untimeliness of
this order is contained in Judge Mack's letter of January 29,
1942 to the Secretary of the Treasury.
The next move in the attempted Treasury blitzkreig was
the order of January 22, 1942 ordering without discussion
Judge Mack and the Corporation to dispense forthwith with
Mr. Hammond's services. This order was concocted as a
result of a conference of Messrs. Foley and Berle and
Regraded Unclassified
165
- 33 -
only sporadically mentioned to Secretary Morganthau and to
no one else. This order of the Treasury Department has
never been complied with as the minutes of the special
meeting of the Board of Directors of January 30, 1942 dis-
close. Mr. Hammond is at present suayanded until the
Corporation determines whether to obey or disregard or se-
cures the withdrawal of the Treasury order. A copy of
Judge Mack's letter to Mr. Hammond dated January 23, 1942
is attached hereto and marked Appendix "Y", & copy of this
letter from Judge Mack to Mr. Hammond went forward to
Mr. O'Connell.
As & result of further extensive and confidential
interviews here in Washington, it has been determined that
an aggressive group of Treasury officials led by Messrs. Foley
and Sam Klaus abetted by the advice from Berle and certain
of his minions in the Department of State were determined to
disregard the business of this Corporation for reasons best
known to themselves. Advice from high authority was given
Mr. Cummings and Judge Mack to launch 8. counter offensive and
accordingly Judge Mack's letter of January 29, 1942 to the
Secretary of Treasury was prepared and dispatched. Copy of
this letter is attached hereto and marked Appendix "2".
Regraded Unclassified
166
- 34 -
A special meeting of the Board of Directors was called
for January 30, 1942, and was duly held as B. result of which
& vote of confidence was given the management and Judge Mack.
His letter of January 29, 1942 was approved and the matter
of Mr. Hammond's services passed for the time being while an
investigation committee of one or more was authorized to be
appointed by President Mack. Mr. Ralph Budd came on especially
from Chicago to attend this meeting and it is understood that
he will be a member of this committee. At this meeting
according to Mr. Budd, Williamson again showed a certain
reluctance to cooperate.
On January 29, 1942 it was ascertained that you had
returned to this country and & communication was immediately
established with you by Messrs. Cummings and Stammler. The
rest of the developments in this situation you are more
familiar with than we are.
Regraded Unclassified
167
RECOMMENDATIONS
1. Appoint Conant to the Board of Directors.
2. Secure from Conant 8. list of probable executives.
3. Eliminate Williamson.
4. Eliminate Baragwanath & Tallbot.
5. Ratify the actions of the Treasury with the exception of
the removal of Mr. Hammond.
6. If possible reappoint temporarily Hutz and Aickelin and
Eckler as they are necessary for the time being.
7. Get a general order allowing these things to be accomplished.
8. James Roosevelt coming to see Judge Mack in reference to
1
acting as Salesman on the Coast for films with adequate
compensation. It is suggested that Roosevelt confer with
Cummings and other representatives of the company in
Washington.
9. Secure the resignation of Schmitz and Hutz from the Board
of Directors.
Regraded Unclassified
TREASURY DEPARTMENT
168
INTER OFFICE COMMUNICATION
DATE March 5, 1942.
Secretary Morgenthau
TO
FROM yr. Foley
Mr. Irey, Mr. Harney, Mr. Maloney (the coordinator
of Treasury Enforcement in New York) and Mr. Bernard had
9. meeting on the General Aniline and Film investigators
today.
It develops as a result of this meeting that the
reason for the low caliber of some of the investigators
is that the men were recruited very hurriedly at the
time we took over, not to make personnel investigations
but to guard the property. A few days after we had taken
over, guards were employed to protect the property and
the investigators then on the job were assigned to check
the loyalty of the General Aniline and Film personnel.
After a full discussion of the situation, it was
agreed at the meeting that several replacements and 8.
few reassignments should be made. It was also agreed
that the details would be worked out by Mr. O'Connell
and Mr. Maloney in New York later in the week. Irey is
to give Bernard 8. report on what has been done next week.
I will advise you further at that time.
9.107h
Regraded Unclassified
169
March 5. 1942
3:20 p.m.
HMJr:
Hello.
Operator:
Go ahead.
Ronald
Ransom:
Hello.
HMJr:
Yes.
R:
Henry, I just wanted to say I think your tax
proposal is statesmanlike and certainly in
the right direction, and I want to wish you
all the luck in the world with it.
HMJr:
Well, we'll need luck and help.
R:
Well, if I can give it, it's yours.
HMJr:
Well, we'll need lots of help.
R:
You're surely in the right direction.
HMJr:
Well, I'm ever BO much obliged. It's very
encouraging.
R:
I think you made a fine statement on it.
HMJr:
Thank you.
R:
All right.
HMJr:
Thank you.
Regraded Unclassified
170
March 5, 1942
TO:
Mr. Paul
FROM: The Secretary
This morning, the President said that as
an ace up our sleeve we should keep the idea of
getting through a separate bill on the excise taxes
making them effective almost at once.
When you return on Monday, will you please
discuss this with me.
Regraded Unclassified
171
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE March 0, 1042
TO
Secretary Morgenthsu
FROM lerard Swope
Referring to our conversation of yesterday
fternoon in which you asked me to put down the thoughts
1 expressed regarding personal exemptions, they are BE
follows:
1. For a single person, to have the exemption
9.21 st present - $750 per year, but for 11 Temily, to
reduce the personal exemption from $1600 to 1200, and
for each child, to reduce it from $400 to $300, and this
would work out as shown in several exemples in the
attached table.
2. Because of the increased taxation for
1042 it may be difficult. if not impossible, to put
into effect B withholding tax at the source. AS an
alternative, which would also have B. very good effect,
let us assume that the withholding tax this year
should take the form of B 10% withdrawal from the
pay envelope each week or month for everyone, and this
invested in defense bonds, but the discounts for
redemption in the first few years should be high 80 that
there would be 8, distinct deterrent for anyone cashing
In his bonds, say before five years.
3. A similar provision to what 1a proposed
for corporations - that when the excess profits tax
exceeds B. certain amount, after the emergency B corpora-
tion may draw upon this for reemployment, capital
improvements, etc. - be provided for individual incomes
for capital improvements such as building houses or
improvements to houses, reemployment or increased
employment.
4. An excess profit tax for individuals
similar to corporations, even to a greater extent than
the surtax on increased income above the four year
average from 135 to 139.
5. Capital gains and losses - capital
losses not deductible except 83 offset for capital
gaina, but net capital gains if reinveated, no tax.
If net capital gains are not reinvested they should be
texed 88 regular income.
Regraded Unclassified
172
-2-
6. Modification of joint returns might be
a greater recognition of earned income or simply a
tax on joint income on investments.
7. Advertising should be limited to the
same amount in dollars as in the years of normal
profit.
8. Allowable contributions for charitable
and educational purposes be limited to 3% rather than
5% as at present.
9. New state and municipal securities
should be issued subject to tax, just 8.8 federal
securities. If tax is to be placed on municipal and
state securities at present outstanding, then also a
way should be found to place a tax on federal
securities outstanding. This can be accomplished in
one way by calling in all exempted federal securities,
even at 8. higher price than now provided, and
reissuing as taxable securities. This would mean more
bonds outstanding in amount, but a greater return to
the Government from tax per year, which is much to be
desired at this time.
U.
Regraded Unclassified
173
FAMILY
Married
Children
Income
Tax
Union Dues
Week
Year
If
o
$23.10
$1200.
o
13 +
o
29.00
1500.
6% - $18.00
13 4
1
29.00
1500.
o
13 +
If
1
34.50
1800.
6%
-
$18.00
18 +
11
3
40.40
2100.
0
18 +
18
3
46.20
2400.
6%
-
$18.00
18 +
5
52.00
2700.
o
18 +
If
5
57.80
3000.
6% - $18.00
18 +
Regraded Unclassified
174
march 5, 1942
[
5:17 P.M.
Message from Congressmon
A. Willis Robertson Virginia
ways and Means Committee Charmian
Please arrange for
Ecces and Leon Hendered to
appear before the House Waye
and Means Committee on
monday to discuss the need
for a heavy tax program
and the danger of uncontrol
id inflation if we don't
have
The Congressman askochat
this be taken Care 8 today
in order that there gentle
men may be placed ahead
of other witnesses
This proggestion hasthe
Regraded Unclassified
appronal of the Committee
and has as its purpose the
setting of background for
future hearing
175
March 5. 1942
3:37 p.m.
Operator:
Go ahead.
HMJr:
Hello.
Marriner
Eccles:
Yes.
HMJr:
Marriner. Hello, Marriner.
E:
Oh, yes, Henry.
HMr:
Henry talking.
8:
I didn't recognize your voice. They didn't
say who was calling. Okay.
HMJr:
Marriner, you may or may not have heard that
there's B lot of trouble on the West Coast
on moving this alien population.
E:
Yes, I have heard there was.
HMJri
Now
a
I got a wire from - that I sent over to the
Treasury on it, and Ed Foley sent me B copy
of the reply.
HMJr:
Well, now, this 18 the situation. There's been
8. lot of hemming and hawing and the usual Washington
jealousy, but it's 8 very critical situation
because General De Witt can't move out there.
He's in charge of the entire Pacific Coast -
because he can't get the population to move,
you Bee, on account of - they don't want to
volunteer to go, the American Japanese, until
they know what's going to happen to their property;
and McCloy, Assistant Secretary of War, has been
asked to handle this thing. So in conference with
him yesterday, we said, "Now, we don't care whether
we get alien property or not, that ien't the
question; but we think that through the Federal
Reserve Bank of San Francisco and that region,
we could be very helpful." And I B&W the
President this morning, he liked it, and
Regraded Unclassified
175
March 5. 1942
3:37 p.m.
Operator:
Go ahead.
HMJr:
Hello.
Marriner
Eccles:
Yes.
AMJr:
Marriner. Hello, Marriner.
E:
oh, yes, Henry.
HMJr:
Henry talking.
2:
I didn't recognize your voice. They didn't
Bay who was calling. Okay.
HMJr:
Marriner, you may or may not have heard that
there's B. lot of trouble on the West Coast
on moving this alien population.
in
Yes, I have heard there was.
HMJr:
Now
E1
I got 8. wire from - that I sent over to the
Treasury on it, and Ed Foley sent me a copy
of the reply.
HMJr:
Well, now, this is the situation. There's been
B. lot of hemming and hawing and the usual Washington
jealousy, but it's a very critical situation
because General De Witt can't move out there.
He's in charge of the entire Pacific Coast -
because he can't get the population to move,
you see, on account of - they don't want to
volunteer to go, the American Japanese, until
they know what's going to happen to their property:
and McCloy, Assistant Secretary of War, has been
asked to handle this thing. So in conference with
him yesterday, we said, "Now, we don't care whether
we get alien property or not, that ien't the
question; but we think that through the Federal
Reserve Bank of San Francisco and that region,
we could be very helpful." And I 68W the
President this morning, he liked it, and
Regraded Unclassified
176
- 2 -
McCloy's just called up and he's cleared it
with the Budget and he's asked us formally
whether the Treasury plus the Federal Reserve
Bank of Ban Francisco won't do this, you see.
E:
Yeah.
HMJr:
Now, what I want to know 18 - I understand
President Day is here.
E:
Day, I think, left yesterday or day before,
and is en route. He was here Saturday and
Sunday and Monday and Tuesday.
HMJr:
Oh. Well.....
E:
I'll find out if he went up to New York or if
he - but I think he left for the West Coast.
HMJr:
Well, could you see Ed Foley at five o'clock
today?
E:
Yes, sir.
HMJr:
Well, he'll come over and give you the details
and we'd like to get the blessing of the Board.
E:
Yes.
HMJr:
And your own help.
E:
Yes.
HMJr:
It's.....
E:
Well, Ed will explain just what the problem 18,
and if I've got any suggestions on the thing,
why I'll be free to make them to Ed.
HMJr:
Of course.
E:
Is that right?
HMJr:
That's right.
E:
Now, is this thing under - this thing comes
under Ed, does it, directly?
Regraded Unclassified
177
- 3 -
HMJr:
That's right.
E:
In other words, it's under the alien property
custodianship which is in Ed's hands directly
and under him comes Bernard and Pehle and
HMJr:
That's right.
E:
That's the set-up.
HMJr:
That's the set-up.
E:
Well, now, let me just mention this thing. I
happen to know a little about this labor situation
out there in Utah and Idaho and Colorado and 80
forth.
HMJr:
Yeah.
E:
And this is a point that you might think of.
Now they're having quite a time getting an
increased sugar beet acreage, which, of course,
is terribly important right now; and one of
the reasons 1s that - of course, it requires
& considerable amount of labor.
HMJr:
Yeah.
E:
And in the past, with the unemployment situation,
there's been, of course, plenty of labor.
HMJr:
Yes.
E:
With the present situation, the boys - so many
of them being pulled in the Army, the farmers'
boys - and that has created a real labor problem
and that area has developed into a big defense
area in a lot of that section. Now, I was
talking to, yesterday, to Mr. Benning, who is
the head of the Amalgamated Sugar Company - the
company that our people are interested in.....
HMJr:
Yeah.
E:
is on the sugar committee over here.
HMJr:
Which company are you interested in?
Regraded Unclassified
178
- 4 -
E:
Amalgamated.
HMJr:
Amalgamated.
E:
That's right. And they produce about three
million bage of sugar, He said, "My God, what
we ought to do is, if we're going to move these
Jape off the Coast, Bee.....
HMJr:
Yeah.
E:
!
that they could move these Japs in those
areas there to take - do a lot of this farm
work available for these farmers, and take the
place of this labor shortage.
HMJr:
Well, Marriner, old Man, I think that that's
a very important thing; but the only part which
the Treasury would like the Federal Reserve Bank
of San Francisco to do would be to handle the
physical property, as in businesses and real
estate, in the area which General De Witt is
going to move these people out of.
E:
Yeah.
HMJr:
Now, where these people are going to be moved
to is
E:
Well, I know; that's another question.
HMJr:
That's the point.
E:
That's another question, except that it would
be easier to move them, I suppose, if you knew
exactly where they were going to go. I mean,
that does help to help the problem.
HMJr:
Well.....
E:
You're interested to preserve the property that
they move from, to protect it and manage it
and look after it.
HMJr:
Well, to see that they're not victimized, that's
the principal thing.
Regraded Unclassified
179
5
Et
Yes.
And that the Coing It code To - avonne,
non-pulition) canger.
S:
Yes.
And vala lite to Est the help of the Poderal
Reserve Sank of the voot Coast,
8:
Yes.
Bide:
And, na I ROY, sold the Idea 20 the
President that 15's 60 be helpful: that's
a)3 Mo sact, and Up bave the ovthrity by - the
President's given n to us - and us would
delegate whatever actionity MAD
to the mens In Cash Prancisco,
E:
Well, as I understand Lt, the Presteent feels
that the dobes under your power under the
Examutive Order under which you art SU the
alien property custodian.
MJr:
Hell, that's - he oridently door. because
Modley has just cleared 16 with she Budget.
E:
Yes.
HW:
And I've asset He. Stigion to write De 9 letter
etking no to do this - to help General De Wits.
E:
Zen. Willare
HMJr:
THE have A letter from Sidaron before se
nove,
E:
Well, 2'11 be plad GO DE SO; and anything
that we our de to help, 7'11 be - NO'CA be
gind to as 15, and 1'm 000 16 the
if X can find out where P112 Day and ofter
Micing to GE we can BAT in touch with Bill Day.
EXJr:
That's right.
E:
Char. them,
Regraded Unclassified
180
- 6 -
HMJr:
Ever 80 much obliged.
E:
All right.
181
March 5, 1942
4:14 p.m.
HMJr:
Clif Mack.
Clifton
Mack:
Yes, sir.
HMJr:
I just wanted to say I'm very much interested
in that letter that Donald Nelson is supposed
to write as of the fourth.
M:
Yes.
HMJr:
I haven't got it yet.
M:
I called Swope this morning
HMJr:
Yeah.
M:
.....and told him that we had checked up to find
out how far along they were with the report, and
they now say that they are not going to have it
ready until Saturday; so that I asked Loeb to
get together a report for you 80 that I could
get it over this afternoon. He's working on
it right now.
HMJr:
Yeah.
M:
To give you the pioture as of the close of
business yesterday.
HMJr:
Right.
M:
Bo that he should have that ready immediately.
HMJr:
Okay.
M:
And I'll get that right over to you.
HMJr:
Thank you.
M:
Yes, sir.
VIG -- 1942
March 5, 1942
MEMORANDUM TO THE SECRATARY:
In response to your request for information as to
the Russian Protocol items and the tonnage of each for
which we do not have allocations in order to meet the
April 1st delivery requirements, the following is a list-
Ing no of the close of business March 5th:
Tool Steel
1489 Tons
Steel Wire
37798
BY
Steel Billets (Shell Steel) 38000
"
Steel Alloy Tubes
1165
"
Stainless Steel Wire
108
"
Cold Rolled Steel Strips
19408
-
Hot Rolled Steel
32000
"
It is very possible that the report to be submitted
by Mr. Nelson may show a reduction over the above quan-
tities due to further allocations not yet received by us
or allocations for production subsequent to April lat.
Further, the Russians have submitted many requisitions for
items outside of the Protocol which will be included in
Mr. Nelson's report and will help the tonnage pleture.
your difton E. Mack
Director of Procurement
Regraded Unclassified
183
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE March 5, 1942
TO
Secretary Morgenthau
FROM
Gerard swope
This is the report I spoke of, which was
made by two of the General Electric men whom I
asked to go to the Philadelphia Mint. They spent
Monday, February 23, there.
I have given a copy of this report to
D. W. Bell, and several copies to Mrs. Ross and
Mr. Howard.
I hope it may be helpful.
150
G.S.
Attachment
Regraded Unclassified
o
D
GENERAL ELECTRIC COMPANY
184
P
Y
March 4, 1942
Mr. Gerard Swope
Treasury Department
Washington, D. C.
213/5
Deor Mr. Swope:
Mr. Ernest and I visited the Federal Kint
In Philadelphia last Monday.
We had figured that perhaps We would be
received rather coldly, but Mr. Drassel received us
cordially and answered every question frankly, and
introduced us to EL number of people before we went on
the trip. We made G, survey of the manufacture of
coins beginning with the ingot and completed the
whole job by 1 o'clock, when we went to lunch. We
returned about 2, and I asked Mr. Dressel if he would
be good enough to let me go over the Job from soup to
nute again so that we would have a clear picture an to
what the situation was.
One of the first and most important things
we learned was that they have no cost system, and that
they do not know the coat of producing B. million
pennies or a million of any other coin.
They produce pennies, nickels, dimes, quarters
and half dollars. They employ approximately 1,000 people,
including indirect workers. For the year 1941 the
production was 8.5 follows -
24 million 50d pieces
111
e
25d pieces
209
If
10d pieces
203
"
5d pieces
809
"
pennies
making a total of approximately 1,356,000,000 pieces.
The employees work 48 hours per week on a six day besis,
and 1f we assume that they make $1.00 an hour, the total
labor cost would be approximately $2,000,000 to
$2,400,000a year.
You were so very right in stating that the
operations wore archaic. One of the real causes of
inefficiency is the fact that this building was never
planned for a manufacturing department, but 18 cut up
into many many small rooms where it is impossible to
work out a good factory layout without breaking through
the walls.
Regraded Unclassified
183
-2-
Almost all of the jobs are simple and 11ght,
on which women could be largely employed.
Since the largest production in the Mint con-
sists of 800,000,000 pennies out of a total of
1,356,000,000 pieces made, it 1a obvious that the real
production job is that of the penny, and it would appear
that the penny job could be entirely separated from the
silver Job.
The main operations are -
1- Moulding the Ingot.
2- Breaking ingot down by rolling.
3- Blanking.
4- Annealing and cleaning.
5- Upsetting edges of blank.
6- Coining.
7- Counting and packaging.
1- MOULDING OF THE INGOT.
The moulding of the ingot is 8 simple operation.
Small pot furnaces are used which hold 250 lbs. of
molten metal. The hot metal is ladled out and poured
into e permanent mould machine operated by hand
throughout. The Ingot used is very small weighing
about 26 lbs. In this room are 36 men operating 6
machines. If automatic permanent mold machines are
used, such as is used in the automobile factories,
I think that 6 men or less would do the job of the
36 now employed. (Mr. Dressel proposes to put in
new furnaces which hold 450 1bs. of metal and will
make an ingot about 40" in length instead of 20" as at
present used).
It is quite possible that coil strip could be bought
from outside concerns at a much cheaper price than 17
the strip is made in small pieces and with small
presses.
2- BREAKING INGOT DOWN BY ROLLING.
The ingots are rolled into atrips about 30' long and
4-1/2" wide, but since no annealing is used during
the twenty-two times that it la passed through the
rolls the metal becomes quite hard and difficult to
hendle and the edges are very much roughened, causing
an undue amount of spoilage. After the material is
rolled into 30' strips it is out into lengtha about
5 to 6 feet long and then put through the blanking
press.
Regraded Unclassified
÷
186
Since these pieces are only five to six feet long
instead of one hundred feet na they should be if
rolled into coila from a large ingot, much handling
is entailed since these short pieces are passed
through the press by an operator, received by EL
second operator, and 80 handled through the twenty-
two passes.
8- BLANKING
The blanking press used 18 B late model high speed
press but since short lengths are used there 1s El
good deal of spoilage, which could be avoided with
longer strip, and by the use of annealed strip.
The metal spoilage from blanking press to finished
product is 47% About 25% is unavoidable, but the
rest of it is due to short lengths, lack of
annealing and to the fact that the dies are not
spaced properly to give the best efficiency In the
use of the metal.
i- ANNEALING
After the blanking operation, the blanks are anneeled,
cleaned and washed, and then sorted. Ae think that
& continuous annealer would probably give better
results.
6- UPSETTING OF EDGES OF BLANKS
After cleaning and inspecting, the blanks are put
through an upsetting machine which upsets the edges
of the coin. All these upsetting machines are run
by men, but the work 1s light and women could be
used, but it would seem most natural to put on
hopper feeda on these machines, which again would
cut down the labor.
6- COINING OPERATION
This operation is performed on 5. specially designed
press which 10 made by the Mint. It would seem quite
possible to have these presses operated by women,
and to have the coins fed onto 8 moving conveyor,
from which they could be inspected by women inspectors
43 they pass by. The lighting at the inspection
conveyors seemed to be poor, and I told Mr. Dressel
#8 would be glad to send an engineer down there to
1ve him proper lighting.
Regraded Unclassified
187
7- COUNTING AND PACKAGING
This operation 1s very simple. The machines work
rapidly and are operated by men, end here too
women could easily be aubstituted because the men
are not busy. My general impression of the whole
department was that the speed of production does
not compare with General Electric factories.
In manufacturing the silver pieces much
smaller ingote are used than are used in the manufacture
of pennies. This too I think 19 wrong. They should
use larger ingota, reduce the spoilage, do enough
sunealing so that the strips would handle well in the
rolls. I think the work of silver should be put in a
department separate from pennies because there 1s so much
more money involved when silver is used, and so much
less machine work and material.
The manufacture of nickels is about the same 0.2
that for pennies but it is 8 much smaller job. This
could be well included with the manufacture of the
silver pieces. One of the things which hampers Mr.
Dressel 16 the composition of the metal used for penniss.
If he were permitted to use a alightly different composi-
tion it would be much better to manufacture, but he mAys that
this composition 16 controlled by law end he can do
nothing to change it.
I would like sometime at your convenience to
sit down with you and talk this matter over 88 I think
that there is an opportunity of saving a very large
amount of money for the Government. When you consider
that the Government has been making coins for 150 years,
one would think that they would know how to make them
better than anybody in the world, but Mr. Dressel assures
me that he finds it very difficult to get money, even
for new machines, or for anything which he thinks will
help him in his work.
I can easily 800 how difficult It would be to
justify the use of new machines when there la no cost
system to enable one to show the gaving made.
Attached you will find A sheet making some
specific recommendations, but I realize that in order
to do this job right Mr. Tressel would have to have some
help. We could arrange to give 1:1m as much or ns little
9.3 you thought desirable,
Very trily yours,
(signed) N. X- Burrows
MR Burrows:6
Regraded Unclassified
188
1. set up a suitable cost system so that expenditures
for new equipment and rearrangement could be justified.
2. Girl operators could be used to a very large extent
as most of the operations are light and require very
little skill, such as inspecting, counting, upsetting
blank edges, and operating the coining presses.
3. Consider changing analysis of various grades of
materials which would facilitate producing material
in coil stock. Mr. Miller, who is Mechanical Engineer
from the Treasury Department, informed the writer that
the present analysis hinders the rolling of strips in
large coils.
4. Consider purchasing coil material of twice the present
width from the Chase Brass & Copper Company, Scovil
Mfg. Company, or some other suitable manufacturer.
Since these concerns produce similar materials in
large quantities, they should be able to furnish
suitable materialsat reasonable costs. In connection
with this proposition, the study should be based on
the installation of a baling press or briquetting
machine to efficiently handle scrap and prevent con-
siderable oxidation when remelting the scrap.
5. In the event that it is not feasible to purchase coiled
material, then consideration should be given to the
pouring of larger ingots from an electric furnace,
which could be arranged to pour metal direct into a
rotary moulding machine similar to permanent moulding
set ups in the automobile industry.
These larger ingots would then provide sufficient
material which could be rolled into coils, provided
suitable rolling mill and annealing facilities are
installed.
Properly made coil material in long strips should result
in less scrap, longer die life and considerable saving
in handling time, as well as 8. reduction in blanking
labor.
6. Make a new factory layout, breaking through walls where
necessary to make straight line operation for production
of pennies only, and another layout for the production of
silver coins and nickels, keeping in mind the use of
conveyors and Ford trucks.
Regraded Unclassified
189
7. Since only 52 to 53% of gross material results in good
blanks, it would seem that a new die layout to give
closer nesting of the blanks and with less edge scrap,
would result in considerable saving in material. In a
new die layout consideration should also be given to the
various brands of alloy tool steel in order to get
maximum between grinds.
8. The installation of two modern belt type furnaces with
atmospheric control, should be considered to replace the
existing 5 or 6 furnaces used for annealing blanks.
This equipment should be fed by conveyor belt from the
blanking presses for maximum efficiency.
9. In the department where all coins are embossed, it might
be possible to rearrange this equipment so that the
embossed coins, when ejected from the machines, would fall
ônto 8. conveyor belt running to the inspection benches.
This conveyor belt could be totally enclosed in order to
prevent theft of finished coins.
In the manufacture of embossing punches and dies, various
brands of tool steels should be tried for the purpose
of selecting the best type of steel for the different
grades of metals embossed.
10. Various inspection tables on which 35 to 40 girls do
visual checking of coins, could be equipped with
fluorescent lighting, in order to speed up this operation.
11. Rearrangement of inspection benches and the installation
of suitable conveyors would save considerable handling
in transporting coins to the weighing and counting
stations.
12. Three or four small machines used for counting purposes,
should be manned by girl operators instead of men.
13. Have a good Ford truck engineer make definite recommenda-
tions on the handling of material, as most of the material
is handled on hand trucks with iron rims on the wheels,
which require four men to push this about.
Regraded Unclassified
COPY
TREASURY DEPARTMENT
United States Mint Service
190
Philadelphia, Pennsylvania
Office of
February 25, 1942
the Superintendent
United States Mint
Director of the Mint,
WAS
Treasury Department,
Washington, D. C.
Dear Madam:
with reference to the scheduled visit of Mr.
William R. Burrows and Mr. Edward Ernest, both of
General Electric Co., to this institution with the
view to making suggestions which, in their opinion,
might result in lower costs and increased production
from the machinery and equipment of the institution,
you are advised that their visit was carried out as
planned and that, as a result of their observations,
some suggestions and plans were advanced for increasing
the efficiency of operations.
Although all of their suggestions were sound and,
perhaps, applicable to outside industrial plants, many
of them were of such of sweeping character as to involve
radical changes in equipment the cost of which would be
prohibitive. Mr. Burrows stated that all of his sug-
gestions were based on the assumption that any needed
funds, regardless of amount, would be readily available.
Many of their suggestions were, however, applicable, to
the production of this plant and should be given serious
consideration.
To begin with, they were bewildered at the way the
building was originally constructed, that 18, with
numerous small rooms instead of fewer and longer rooms
which would be more in line with the usual industrial
type of building and amenable to an economical sequence
of operations. The limits of the building are, of
course, more or less permanent although Mr. Burrows did
suggest "tearing some of the walls out."
It was agreed that the new melting equipment would
be B. decided improvement over the old equipment. They
were of the opinion, however, that the molds moving on
a straight line carriage in front of the furnaces would
work to 8. better advantage. Such an arrangement, which
has been given previous consideration here, would not
be practical in our small melting room with the furnaces
thought the turn-tables could be made to turn automatically
so close together; hence the turn-tables. Mr. Burrows
and that an arrangement could be perfected for automati-
cally removing the ingots from the molds. I doubt that
efther would prove to be practical or economical.
Regraded Unclassified
191
-2-
Mr. Burrows suggested that excessive metal loss from
oxidation would be avoided if the returned clips were
compressed into briquettes for recharging into the
furnaces. I have noticed this practice in outside plants,
but considered it to be done for compactness in storage
and convenience in charging into the furnaces. I don't
believe our oxidation losses are excessive, but the latter
two reasons are sufficient to warrant consideration of the
practice, especially since I have recently noticed the
melting of 900-silver clips into bara because of lack of
space to store the clips. This practice, of course, means
an extra melting. The losses from oxidation will be checked.
Both men made an important point of the fact that the
percentage of good blanks realized from & given weight
of cast ingots 18 very small -- 50 to 53% on our own
coinage metal and much smaller on foreign coinage metal.
They compared our figure with their own figure of 3%
wastage which I don't consider a fair comparison because
of the different kinds of material consumed. I realize,
however, that there 1a plenty of room for improvement and,
1f you will recall, I brought up the same subject on the
occasion of our first meeting with the department heads in
Mr. Dressel's office. At that time, I made the statement
that & 10 to 12% gain in effective melting capacity of
bronze could be made by changing the width of the bronze
ingot mold from 41" to approximately 3ᵗʰ, since the same
number of blanks could be cut from an ingot of the latter
size. Mr. Dressel, Mr. Olewine, and Mr. Roland opposed
the change for the following reasons:
1. The, apparently, liberal clearance on the edges
of the strip was needed because of frequently
occuring saw-tooth edges and "break-ins" on the
strip, the true picture having been recently
obscured by an unusually long run of strips having
very smooth edges.
2. A change in the mold width at this time would
make the mold unavailable for casting nickel
ingots upon resumption of nickel coinage in
1946.
3. One set of eleven molds (41" wide) was already
on order with delivery expected momentarily.
(This set has since been delivered)
Mr. Shook and, as I recall it, unopposed by Mr. Bartholomew.
The suggested change in mold size was defended by
However, in view of the above objections, the plan was
dropped.
Regraded Unclassified
-3-
192
Mr. Burrows suggested the possibility of casting an
ingot twice, or perhaps three times, the width of the
present ingot and later slitting it into strips of approxi-
mately the same width as the present strip, thereby
eliminating two, or in the latter case four, outside
irregular edges. An ingot three times the width of our
present ingot would be out of the question because of the
limited face width of our present rolls. An ingot twice
the width of our present ingot could, perhaps, be handled by
our present rolling equipment, but 6. straight edge cutter
would, in all probability, encounter trouble with frequently
occurring curved strips, however small the curvature might be.
Mr. Burrows' answer to that objection was that such strips
might be put through a straightener. Personally, Thave
never heard of such an implement and seriously doubt the
existence or effectiveness of one. I might add that these
curved strips are usually caused by one side of the roll
pinching or exerting a greater pressure on one side of the
strip than on the other. They usually straighten themselves
out to a certain extent when the direction of the strip
through the roll is alternately reversed. The so-called
"straightening tool" might conceivably use the same
principle, but it would certainly change the gauge of the
strip, thereby making the strip useless for the purpose
intended.
Mr. Burrows suggested the possibility of "hot rolling"
directly from the melting room as a means of cutting down the
number of passes through the rolls. This would call for 8.
complete change in the type of equipment used. Besides,
there are few, if any, outside industrial plants practicing
hot rolling with a non-ferrous metal, with the possible
exception of nickel or chromium.
Both men voiced strong condemnation of the multiple
passing of numerous short strips of metal back and forth
through the rolls. It is, without & doubt, & slow and
labor consuming practice but, with the installation of new
coilers, this undesirable practice will be replaced by
the rolling of long continuous strips of metal with no
intermediate cutting of the strips. This, I am sure, will
be a decided improvement from the standpoint of both
rolling and cutting efficiency,
punching blanks was for at more scientific design of the
Their only suggestion with regard to the presses for
it means the saving of useless labor on both melting and
cutters. This, I think, is an important point, because
rolling. Some steps have already been taken toward B.
better designing of the cutters themselves, but in some
to the width of the molds. The cutters now being used on a the
cases they do not bear the proper relationship with respect
foreign coinage metal is very inefficient and results blanks in
metal loss of approximately 25%. The additional
which could be cut from the foreign coinage ingot, through the
use of designed cutter, would be of special
benefit a right properly now when the coiner is faced with A. shortage
Regraded Unclassified
193
of bronze blanks.
Mr. Ernest suggested that several of the upsetting
machines might be operated by one man through the use
of automatic feeders. Several of the machines are now
equipped with such feeders, but one man operates only
one machine. The usual objection to multiple operation
is that the feeders frequently "hang up", usually
because of imperfect blanks, and when this happens, the
operator should be right on hand to stop the machine in
order to prevent injury to the groove. I believe this
might be overcome by selecting all blanks after whitening
and equipping the automatic feeders with cut-out switches
similar to those used in connection with the feeders on
the coin presses. Mr. Ernest, at my suggestion, considered
the possibility of using two segments on one machine and
expressed the opinion that although there were certain
mechanical difficulties to overcome, he thought it could
be worked out to an advantage. There is certainly room
for thought here and as time permits, all such possi-
bilities will be investigated.
The much discussed subject of strip annealing was,
as was to be expected, brought into the discussions with
everyone, including Mr. Dressel, recognizing the
advantages of this practice which 18 80 universally used in
outside industrial plants. Both Scoville and Riverside
anneal their strips as well as their blanks. I am sure
that no one in this institution would voice the slightest
objection to strip annealing if suitable space could be
found for the required furnace. Personally, I am very
much in favor of it in connection with the rolling of
our minor coinage metal, especially with cupro-nickel
and the new 500-silver manganese alloy, both of which
harden rapidly with cold rolling. The practice would
permit fewer passes through the rolls and would, thus,
be a means of increasing rolling capacity.
Both Mr. Burrows and "r. Ernest were positive in their
support of the large ingot -- the larger the better --
both going so far as to suggest much larger silver
ingots, even in the face of segregation the effects of
which they thought might be minimized through new
legislation designed to change the existing tolerance
restrictions.
In the press room, the old familiar suggestion of
using some type of automatic conveyor for both blanks
and finished coin was mentioned, but without definite
and concete suggestions as to type and arrangement.
I believe that overhead conveyors were once used in the
press room and that they were abandoned because of the
frequent mixing of different denominations of coins.
Regraded Unclassified
-5-
194
Mr. Burrows was of the opinion that the mint could
buy coiled bronze strips, in accordance with specifica-
tions to meet our requirements, at a better advantage and
cheaper than they could be produced here in the mint plant.
In summing up the suggestions of the two men, I
would say that they stressed the following points:
1. The advantages of using a large ingot
2.
=
If
" strip annealing
3. The elimination of multiple short strips through
the use of coilers
4. The advantages of re-designing either the punch
press cutters or the related mold widths 80 as
to eliminate unnecessary waste of worked metal
5. The possibility of better mechanical features
on the upsetting machines
6. The possibility of attaining greater efficiency
in the transfer of material between the
different departments
7. The advantages of an economical sequence of
operations with regard to the flow of material
from the finish of one operation to the
beginning of the next operation.
Very truly yours,
/a/ Charles M. Miller
Regraded Unclassified
195
MAR 5 1942
V dear Senator,
Receipt is acknowledged of your letter of February 27,
in which you ask as to etate ay ideas about the dollar,
whether it 10 to be tied to the gold standard, or whether
silver 1a to be recognised and, if so, to what extent.
our huge gold holdings of course have been end are
being used to maintain stability in the foreign exchange
value of the dollar. Am you probably know, Issolution IV,
approved at the recent Conference of Foreign linisters at
Rio, calls for E conference of addisters of finance in
this headsphere to plan an international stabilization fund.
Such a fund could use gold or the United :tates dollar and
in either case would provide that comon demondnator for
International nonstary transactions which I had in and
when 2 referred to A heads;here dollar.
All countries today are basing their currencies althor
on cole or on some strong forwign currency such as the
dollar or on both and are giving silver a autordinate
position. - however, such as Mexico and cule periods
the use of 4b. certain amount of silver in their constry
reserves. To the estent that this practice continues it
will be possible to preserve for silver som notetary role.
sincerely yours,
(Signary 1, IN
secretary of the Treasury.
Generable burton *. sheeler,
Mintale will mc
United states Senste.
return
the
7A310sh
3/4/12
Regraded Unclassified
Vr.
w.
I
a
a.
i
I I all
I I di
United States Senate
P
- - -
COMMITTEE ON INTERSTATE COMMERCE
I
5
February 27, 1942.
MY
dear Mr. Secretary:-
The "New York Times" of February 23rd, quotes
you as saying there was a need for a bank of North and South America and
for 8. hemisphere dollar.
I would appreciate it if you would advise me,
confidentally or otherwise, as to what your ideas are about the dollar,
whether it is to be tied to the gold standard, or whether silver is to be
recognized, and if so to what extent?
Assuring you of my esteem, I am
BEW**
Sincerely yours,
Honorable Henry Morgenthau,
Secretary of the Treasury
Treasury Department
Regraded Unclassified
197
MAR 5 1942
Dear Eleanor:
I have your memorandum of February 23,
1942. enclosing the letter dated February 18,
received by Miss Thompson from Mr. John Golden
with respect to the suggestion that out-rate
admissions of younger officers of the Army
and Navy be exempted entirely from the Federal
tax.
The activities of Mr. Golden in behalf
of the younger officers are most commendable.
At the present time, however, the Treasury
18 advocating the elimination of tax-exempt
securities and of other forms of tax exemption
privileges, and, consequently, me are hesitant
to suggest any new exemption.
Regraded Unclassified
198
- 2 -
Although the Committee on Ways and Means
gave consideration to this very question in
the enactment of the Revenue Act of 1941, it
is quite possible that the Committee may wish
to reconsider its position at this time.
Returned herewith is your enclosure.
Affectionately,
(Signed) Henry
Mrs. Franklin D. Roosevelt,
The White House,
Washington, D. C.
Enclosure.
Photo file n.m.c.
File to Thompson
By Massinger Steen 5:00 pm.
Regraded Unclassified
THE NEW YORK THE
MENDAY, FEBRUARY 18, 112,
ooklyn Ball Club Announces
All-Out Program in
Support of
War Effort
We will give (in coopers-
DODGERS TO DONATE
Um with the other major league
(ddle) three days from miss webed-
who in order that two all-etar
games may be played for the
ONE DAY'S RECEIPTS
Ball and Dat Fund and will pay
will expebies of all Brooklyn play-
era accepted We will also play
exhibition games during the
training endado and during the
Ebbets Field Gate to Go to a
regular sesson WID camp tesms,
War Charity-One Game on
dociating all hur receipts, as well
AE "up espenase, to camp athletic
Road Also to Be Benefit
funds
4. We propose to admiss to
Ebhets Field (under plane to be
supplied upon by all New York
BOND SALE TO BE PUSHED
elubal at lesst 100,000 service
men in uniformo without charge
and We will make the services of
IRIP chaches and scouts and play-
150.000 Service Men Will Be
en available for Instruction and
such other services as have been
Admitted Free-Contests
requested by the athletic officers
Scheduled in Camps
and health service of the Army,
Navy and civillan defense organ-
lestions. We are willing to ($)
tend all of our factures, invisid-
By JAMES P. DAWSON
The N/A If comparation with
The Dodgers, through President
other milistries inr organizations
assisting in programs of the vs.
Larry MacPhail, yesterday an-
nout agencies.
nounced an all-not program in sup-
Consent Is Norded
port of the nation's prosecution of
Macthail pointed out he would
the war.
have to get the consent of other
The entire receipts at one Ebbets
club owners to the proposal to due
Field game and the Dodgers' share
nate the entire receipts from -
the gate at one road game will
championship game at Ebbele
donated to a national service
FSuld, since visiting cloba share in
agency. Every person in the Brook-
the recipts.
lyn organization will buy defense
"I prohably will be criticized for
this mine, but I can take n.° raid
horrida and stamps and the club will
MacPhail "AC the league mestings
help to promote their sale $ the
exclier this mindle I adversied
putitle. A/t many echibitions as
of plan for
possible will be played with carop
CORE all-nd Due the was that with.
teams Ebsets Field will be thrown
3 am determined the
open to an estimated 150,000 serve
EVITY will def werything
Ice men during the campaign.
villy possible to aid the ear Base:
These and other points in the
cold commet content monty
Dodgers' program were revealed
with giving Insulance
by MecPhall before he boarded .
is the and of the
plane for Miami
country,
The detailed plan. the first ad-
MM number be done, and may be
vanced by any major league base-
beginning AT lesser E Time the
ball club, and providing even for
other chalam will comon suit before
the Brooklyn organization to del
the championship evanue gets -
fray all expenses for any of (ER
der RAY."
players selected for the two major
Defend by FOR in bis enginal
league all-star charity pours, is
tight plans, Machalt Dealty took
set furth in the following state-
nft shortix 1. Tue
ment:
Mary by Signatury
Statement From the Cinb
Juhn
Recognizing its obligations and
Temp/t Camilia, fir a to
DATE every maDers will -
grateful for an opportunity to be
Detoin name the claim
of service in this crisis our did
rectors have adopted the follows
bounde 1159 statement fillie
at Miami Der Line Thank
Ing program for 1042:
1. The entire receipts for one
IAL Havans. where the THEREOF
day at Ebbete Field will be de-
product Exte united way
nated in sume national accive
agency. We will also donate our
share of the receipts of one read
game for the same purpose.
2. Every individual in the
Brooklyn organization from prom
Ident to betboy will purchase
defense bonds and stamps. We
expect our club will be 100 per
cent in this respect before -
open our gates We will counte
facilities of radio accessits of HTTP
games hillbnards,
and icore cards to help promote
the sale of deferine tionda -
stamps
Regraded Unclassified
THE WHITE HOUSE
WASHINGTON
February 23, 1942
Dear Henry:
I am sending you the latest letter from
John Golden about the tax on cut-rate theatre
tickets for the soldiers. Is there any
chance that Congress would eliminate the full
tax?
Sincerely yours,
Than Roseault
Regraded Unclassifie
C
o
P
Offices of
I
John Golden, Inc.,
Saint James Theatre
246 West 44th Street
New York City
February 18th, 1942.
Nice Malvina Thompson,
The White House,
Washington, D. C.
Dear Miss Thompson:
Thank you for your note and the tax nomo. I'm afraid the
Treasury Department hasn't got the point I've been trying to make.
The managers, theatre owners, and producers of pictures and
plays have been giving away the only thing they have to sell, seats
to their entertainments, in numbers that go into the hundreds of
thousands.
Mrs. Roosevelt in my opinion did much toward taking the taxes
off the free seats. Now, the Government still persists in asking
a tax on cut-rate seats to soldiers and sailors --- and it seems
to no that if the theatrical people can make these concessions,
the Treasury Department should be willing to take the taxes off
tickets to fighters.
It will help their morale and their pocket-books, and in its
total will be a very small source of income to the Treasury.
Roughly, assuming that 2,000 tickets were given weekly to the
younger officers, the average --- from the $4 musical seate (at
half rate) to the modest prices at picture houses --- would not
be over $1 --- or a gross of $2,000 a week --- and a 10% tax on
that sum would yield $200 to the U. S. Treasury.
I can't believe but what the folks in Washington could be
made to see that, at this cheap price, the gesture 10 worth the
price.
With thanks,
Sincerely,
(Signed) John Golden
Regraded Unclassified
- 2 -
the Nalvina Thompson
February 18th, 1942.
2.5.
Please call to Mrs. Roosevelt's attention the enclosed
elipping from the Times.
This is the thing that I told her would be dissipated
If
10 was done by just an occasional baseball team.
What Mr. Connolly, Ed Cochrane, Bill Corum and the local Army
people had hoped for and believed could be accomplished was one
National Baseball Day, with every league and every little team
Love to the smallest bush players giving the receipts of that day,
estimated to be over $1,000,000, for Army and Havy relief.
J.G.
Regraded Unclassified
2015
TREASURY department
INTER OFFICE COMMUNICATION
CONFIDENTIAL
DATE March 5. 1942
Secretary Mörgehthau
TO
FROM
Mr, Hass CA
subject: Sears' and Ward's sales by types of
goods and by regions.
Date obtained by & field trip to the offices of Sears
Rochuak and Montgomery Ward in Chicago are summarized here-
=1th an an indication of (1) what types of goods consumers
are buying, (2) what geographical regions are showing the
largest sales increases, and (3) what types of goods are be
coming woarce.
It has not been found practicable to combine the date
for the two companies, because Sears Roebuck uses 8 4-week
anles period in place of the calendar month, and because
the geographical sales districts of the two companies are
dissimilar, The types of goods sold by both companies,
however, have been re-classified into similar groups.
What goods are consumers buying?
Officials of both Sears Roebuck and Montgomery Ward eay
that their sales have increased sharply in practically all
lines, and this is born out by the salee figures. It should
be kept in mind, of course, that the classes of goods sold by
the two companies are largely those bought by people in the
lower income groups. (A tabulation of the reported incomes
of Sears Roebuck customers in March 1941, as indicated on
time-payment applications, showed an average of $1,345 for
mil order customers and $1,869 for retail customers).
1100, the two companies sell little or none of certain 10-
contant kinds of consumer goods, such as automobiles and
foods.
In Table 1. & comparison 18 made of the percentage in-
in the sales of Sears Roebuck and Company in the 1941
flocal year (ended January 31, 1942) as compared with the
previous year, for 5 major classes of goods and 21 sub-
classes, Similar year-to-year percentage increases are shown ended
for the most recent period available, the 4-week period
January 29, 1942.
Regraded Unclassified
204
- 2 -
The largest group increases in the full-year comparison,
it will be noted, are those for farm equipment and building
materials, and for the miscellaneous group comprising items
of 8 semi-luxury nature. Nevertheless, the percentage in-
creases for the various sub-classes do not show any great
variation. In the most recent period, however, considerable
variation may be noted. Sales tend to be concentrated in
such items as clothing, farm equipment, auto accessories,
and sporting goods, while sales of certain articles hit by
materials shortages show declines or but slight increases.
In Table 2, similar data are shown for Montgomery Ward
and Company, although the latest available period data for
this company are for December 1941. This company has not
shown such large percentage increases as Bears Roebuck,
partly because of & prolonged strike in the West Coast
stores of the company in the spring and summer of 1941, and
perhaps partly because a smaller proportion of sales are
made through retail stores. The general conclusions, how-
ever, do not differ markedly from those drawn from the Seare
Roebuck sales date.
What regions show the largest sales increases?
It 18 unfortunate for our purposes that the two
companies have different regional breakdowns, which makes
sales comparisons difficult. The Montgomery Ward figures
are rendered less useful by the 1941 strike on the Pacific
Coast, by the relatively emall number of districts, and by
the fact that the latest recent data are for December 1941.
The Sears Roebuok figures may, for the present, be taken as
a more satisfactory indication of regional sales variations,
particularly since a relatively large proportion of this
company's sales are made through their retail stores.
In Table 3. the percentage increases in Sears Roebuck's
combined sales by 7 geographic regions are shown for the
last fiscal year and for the most recent 4-week period. As
might have been expected, the largest cales increases are
recorded in regions strongly affected by the defense program,
Pacific Northwest. In the farming areas, on the other hand,
notably the New England and Middle Atlantic regions and the
particularly those of the South, the sales increases are
noticeably smaller. The discrepancies are particularly
marked in the more recent period.
Comparable data for Montgomery Ward are shown in
Table 4.
Regraded Unclassified
205
- 3 -
Indioation of available supplies
A partial indication of the supplies of consumer goods
available, in relation to demand, 18 provided by the per-
centage of mail orders "omitted" by the two companies. These
represent, for the most part, orders that could not be filled
because the goods ordered were not available. In this con-
nection, officials of both companies mentioned that supplies
of many goods are already definitely short, end that measures
are being taken to make the remaining supplies last as long
as possible, through various rationing plans and by with-
drawing them from their advertising.
The percentages of omissions are shown for Sears
Roebuck and for Montgomery Ward in Table 5 and Table 6,
respectively. The general similarity between the omissions
for the two companies will be noted, although certain ex-
ceptions exist. The figures do not reveal, of course, the
number of potential orders that were withheld because the
customer knew that supplies were not available.
Officials of both companies showed a willingness to
cooperate in supplying any sales statistics that we may de-
sire, and will send us periodic reports to keep up to date
the information obtained on this trip.
Regraded Unclassified
Table 1
206
CONFIDENTIAL
Combined mail order and retail sales
Sears, Roebuck and Company
Percent increase
Fiscal year ended
Latest period 1/
Class of goods
January 31, 1942
over previous year
over previous year
Nothing
27.6
45.3
Women's clothing
26.6
48.7
Men's and boys' clothing
34.8
63.3
Shoes - men's and women's
24.3
50.5
Rubber footwear
12.1
24.8
Dress goods and misc.
17.9
2.4
Rouse furnishings
29.8
25.9
Draperies, blankets, linens
34.6
41.8
Floor coverings
39.9
49.1
Elec.appliances and stoves
19.7
3.4
Radios, phonographs, etc.
24.7
39.5
Furniture and misc.
39.4
29.9
Are equipment and building mat'l.
34.9
48.1
Farm machinery and supplies
53.8
89.4
Hardware
34.8
44.4
Plumbing and heating
31.1
41.4
Paints and oils
20.1
48.4
Other building materials
42.8
23.8
into accessories, etc.
23.9
-11.5
Auto accessories
30.9
57.8
Auto tires and tubes
17.9
-94.6
iscellaneous
35.0
30.8
Sporting goods and toys
37.7
65.2
Books and stationary
40.9
21.4
Jewelry, clocks, etc.
36.9
-28.1
Drugs and toilet articles
21.9
24.2
1/ Four-week period ended January 29, 1942.
Table 2
CONF IDENTIAL 207
Combined mail order and retail sales,
Montgomery Ward and Company
Percent increase
Calendar year 1941 December 1941 over
Class of goods
over 1940
previous December
nothing
20.1
20.8
Women's clothing
21.9
18.9
Men's and boys' clothing
20.0
21.1
Shoes - men's and women's
11.2
14.3
Rubber footwear
13.3
39.6
Dress goods and misc.
31.8
33.4
louse furnishings
23.7
22.9
Draperies, blankets, linens
23.2
24.9
Floor coverings
24.1
29.2
Elec. appliances and stoves
22.4
2.0
Radios, phonographs, etc.
8.9
28.5
Furniture and misc.
28.8
27.0
arm equipment and building mat'l.
23.9
34.9
Farm machinery and supplies
35.5
77.6
Hardware
20.3
17.8
Plumbing and heating
23.5
38.6
Paints and oils
10.4
28.9
Other building materials
30.7
36.5
luto Accessories, etc.
20.4
0.1
Auto accessories
12.9
26.6
Auto tires and tubes
25.4
- 25.0
iscellaneous
20.0
9.4
Sporting goods and toys
22.7
11.2
Books and stationary
24.7
15.8
Jewelry, clocks, etc.
12.5
- 5.3
Drugs and toilet articles
13.9
15.2
Regraded Unclassified
CONFIDENTIAL
208
Table 3
Combined mail order and retail sales,
Sears, Roebuck and Company
:
Percent increase
:
Fiscal year ended:Latest period 1/
District
:
January 31, 1942 :over previous
:
over previous year:
year
:
:
New England (Boston)
44.1
66.0
Middle Atlantic (Philadelphia)
31.0
54.5
Southeastern (Atlanta)
31.7
19.7
North Central (Chicago)
28.1
49.8
South Central Dallas)
28.6
27.2
North Pacific Seattle)
51.5
66.3
South Pacific (Los Angeles)
37.0
47.3
1/ Four-week period ended January 29, 1942.
Regraded Unclassified
209
CONFIDENTIAL
Table 4
Combined mail order and retail sales,
Montgomery Ward and Company
:
Percent increase
:
:
District
: Calendar year 1941:December 1941 over
:
over 1940
:previous December
:
:
Atlantic Coast and
Southeastern
29.7
20.8
Chicago-Detroit area
and Ohio Valley
30.5
22.6
South Central
23.4
15.1
worth Central
21.7 8.7
14.5
Pacific
20.8
1/ Months February through July omitted in this comparison
owing to strikes which closed both mail order stores in
this area.
Table 5
CONFIDENTIAL
210
Percentage of mail orders omitted 2/
by Sears, Roebuck and Company,
4-weeks ended January 29,1942
(Based on dollar totals)
Percent of total
Class of goods
orders omitted
Clothing
15.0
Women's clothing
19.5
Men's and boy's clothing
7.6
Shoes - men's and women's
7.2
Rubber footwear
36.8
Dress goods and miscellaneous
17.1
House furnishings
12.6
Draperies, blankets, linens, etc.
17.1
Floor coverings
1.4
Electrical appliances and stoves
19.9
Radios, phonographs, musical instruments
17.8
Furniture and miscellaneous house furnishings
5.5
Farm equipment and building material
12.9
Farm machinery and supplies
20.7
Hardware
10.4
Plumbing and heating
8.8
Paints and oils
1.8
Other building materials
11.2
Auto Accessories, eto.
11.8
Auto accessories
9.4
Auto tires and tubes
40.8
Miscellaneous
12.5
16.9
Sporting goods and toys
Books and stationary
9.2
20.3
Jewelry, clocks, etc.
6.8
Drugs and toilet articles
1/ Representing orders that could not be filled, usually
because the goods ordered were not available. It thus
serves as an indication of relative shortages.
Regraded Unclassified
Table 6
CONFIDENTIAL
I
Percentage of mail orders omitted 1/
211
by Montgomery Ward and Co.
December, 1941
(Based on dollar totals)
Percent of total
Class of goods
orders omitted
Clothing
11.0
Women's clothing
11.4
Men's and boys' clothing
9.9
Shoes - men's and women's
9.2
Rubber footwear
19.2
Dress goods and miscellaneous
12.8
House furnishings
7.4
Draperies, blankets, linens, etc.
7-7
Floor coverings
2.4
Electrical appliances and stoves
5.9
Radios, phonographs, musical instruments
7.9
Purniture and miscellaneous house furnishings
8.3
Farm equipment and building material
9.5
Farm machinery and supplies
9.0
Hardware
11.7
Plumbing and heating
11.1
Paints and oils
2.4
Other building materials
2.8
Auto Accessories. stc.
16.5
Auto accessories
5.8
Auto tires and tubes
29.5
Miscellansous
5.4
6.2
Sporting goods and toys
5.5
Books and stationary
3.9
Jewelry, clocks, etc.
1.6
Drugs and toilet articles
2/ Representing ordere that could not be filled, usually
because the goods ordered were not available. It thus
serves as an indication of relative shortages.
Regraded Unclassified
212
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE March 5, 1942.
TO
Secretary Morgenthau
FROM Jacob Viner
My leave-cf-absence from the University terminates on
March 30, and I plan therefore to return to Chicago at the
end of this month. I will be badly tied-up with University
duties during the spring quarter. Beginning with June, I
plan to devote my time as fully as circumstances permit to
post-war problems. If there are any special problems to
which you would like me to give thought before I leave, I
would much appreciate your letting me know,
go
213
CONGRESS OF THE UNITED STATES
JOINT COMMITTEE ON REDUCTION OF
NONESSENTIAL FEDERAL EXPENDITURES
There will be a meeting of the Joint Committee in
Room 314 Senate Office Building on Thursday, March 5,
at 10:00 a.m.
To
hear Mr. J. E. Barnes of the Todd
3-K-42
Shipbuilding Corporation.
Byebs office
HARRY FLOOD BYRD, Chairman.
meeting aro eassa
1
EJ7
Regraded Unclassified
21
AUTOMOBILE AIRCRAFT AGRICULTURAL IMPLEMENT WORKERS
UNITED
of
AMERICA (UAW-CIO)
FISHER BOOY LOCAL BUE
nee BALDWIN -
THE
STATE
THE
PONTIAC MICHIGAN
INTERNATIONAL
INION
March stb. 1942
Hon. Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D. C.
Dear Sir:
I did not think at the time of our meeting in Pontisc In Sen-
tember of last year when you were in attendance et one of our
meetings at which Mr. Frank Isbey spoke on the sale of Govern-
ment Stamps and Bonds, that it would become necessary for me
to make an appeal to you for assistance in obtaining defense
orders for the Fisher Body plant in Pontisc.
The Pontiac Fisher Body plant employe around 5,000 persons, but
since January 30th of this year, only approximately 400 employee
have been working. We have made every effort for the past sev-
eral months, to get the local plant management to obtain some
defense orders to supplement the curtailment of automobile oro-
Suction, but without success.
The training facilities in Pontiac have been entirely instituste
to provide training for the thousands of automobile workers who
have been thrown out of work because of the curtailment of cuto-
mobile production. Some six or seven months ago, I arranged A
seeting with E. R. Leeder, Manager of the Pontisc Fisher Body
plant, and at that time asked that every effort be made to ot-
tain defense orders for this plant.
I also asked Mr. Leeder if it wouldn't be possible to not aside
9. certain portion of the plant for training purposes 88 the
plant, even at that time, wea on 8 reduced schedule of automo- about
bile I felt that if Management were sincere
contributing production. their share to the defense program, they could have
and set some of over in some part of the plant and permitted work,
taken their Welding Bucks, Lathes, Milling Machines, the etc.
workers to them prepare themselves for the defense production
Mr. snowered me in this way: "Due to the fact that that we
don't Leeder defense orders that will require them." In
other words, if General Motors WAB not going to be
type of anticipate skill, we any do not feel obligated to train able to
URE these men themselves once they were trained, they die not
Regraded Unclassified
Page #2
215
feel obligated to train them for someone else which, in my opinion,
was a very narrow and unpatriotic point of view to tak.
The employes of this plant are in B very serious predicament as
other employee are refusing to hire anyone with a great deal of
seniority in this plant because they feel that they will be
coming back to this plant if and when work 18 available here.
Yet there is very little if any work in sight for them at this
plant.
Many of our people have sons in the armed forces of this country
and can't understand why a plant of this size is allowed to stand
idle while their sons go into battle poorly equipped for laok of
the necessary weapons to prosecute a winning fight to preserve
the democratic principles of their Country.
We have had very good success in the sale of stamps and bonds
in Pontiac. Some of the local unions are making regular monthly
investments in Government bonds. However, these people who are
out of work want to do their part for their Country also, and
are not able to because there is no work available.
I sincerely hope that you will make every effort to assist our
Committee in getting defense orders for this plant while they
are in Washington. The three members of this Committee have
been provided with credentials from this local. They are
Brothers Arthur J. Law, Ted Helgeson and William Morris.
I am sure that you will do whatever you can for this Committee
and I wish to assure you that if there 18 any way in which I
can reciprocate, do not hesitate to ask.
D.V.C.le Sincerely yours,
D. V. Cote', Fin. Secy.
Fisher Local #596, UAW-CIO
:kf
uopwa.cio
Regraded Unclassified
Daily changes in the stock of Series E savings bonds on hand 1/
(In thousands of pieces)
: Number of : Number of pieces : Stock on hand :
IBM
:pieces sold :
manufactured
:
at close of
:
deliveries
: this day
:
this day
:
day
:
this day
Feb. 23
214
800
21,905
1
24
55
800
22,650
11
1,600
25
104
800
23,346
700
26
158
800
23,988
875
27
240
800
24,548
660
28
162
none-closed
24,386
I
Mer. 1
none-closed
none-closed
24,386
-
2
304
500
24,582
-
3
160
500
24,922
625
4
171
500
25,251
-
Office of the Secretary of the Treasury,
March 5, 1942
Division of Research and Statistics.
1 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
UNITED STATES SAVINGS BONDS
Comparative Statement of Sales During
First Three Business Days of March, February and January 1942
(March 14. February 1-4, January 1-3)
On Basis of Issue Price
(Amounts in thousands of dollars)
I
I
Amount of Increase
If Percentage of Increase
Sales
I
:
or Decrease (-)
I
or Decrease (-)
Item
#
I
:
I
March
:
February
:
March
:
February
I
March
: February
I
January
:
over
:
ever
:
over
:
over
:
:
:
#
February
:
January
I
February
:
January
Series 1. Post Offices
$ 12,180
$ 16,899
$ 13,242
-$ 4,719
$ 3,657
- 27.9%
27.6%
Series 1 - Banks
33,160
58,575
30,522
- 25,415
28,053
- 43.4
91,9
Series 1- Total
45,340
75,474
43.764
- 30,134
31,710
- 39.9
72.5
Series I - Banks
6,329
12,921
5,299
- 6,592
7,622
- 51.0
143.8
Series G - Banks
30,064
57,828
20,837
- 27,764
36,991
- 48.0
177.5
Total
$ 81,733
$146,223
$ 69,900
-$64,490
$76,323
- 44.1%
109,2%
Office of the Secretary of the Treasury, Division of Research and Statistics.
March 5. 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 Unclassi
218
UNITED STATES SAVINGS BONDS
Daily Sales - March, 1942
On Basis of Issue Price
(In thousands of dellars)
Post Office
Bank Bond Sales
All Bond Sales
Bond Sales
Date
Series E
Series E
Series ,
Series G
Total
Series I
Series I
Series 0
Total
March 1942
2
$ 5,811
$ 15,868
$ 2,043
$ 8,726
$ 26,636
$ 21,678
* 2,043
$ 8,726
$ 32,447
3
2,975
8,459
1,629
8,780
18,868
11,434
1,629
8,780
21,843
it
3.395
8,833
2,658
12,558
24,048
12,228
2,658
12,558
27,443
Total
$ 12,180
$ 33,160
$ 6,329
$ 30,064
$ 69.553
$ 45,340
$ 6,329
$ 30,064
$ 81,733
Office of the Secretary of the Treasury, Division of Research and Statistics.
March 5, 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 Uncla
TREASURY DEPARTMENT
219
INTER OFFICE COMMUNICATION
DATE March 5, 1942
Secretary Morgenthau
TO
Mr. Haas
FROM
Subject: The Export Freight Situation.
The amount of lighterage freight in storage and on hand
for unloading at New York harbor at the end of last week
showed the slight decrease of 203 care to a total of 19,913
cars. (See Chart 1.) On February 28 there was additional
storage space available for 7,963 cars, 8. decrease of 838
cars from the previous week.
Exports from New York last week showed a further 1n-
crease of 263 cars to an estimated total of 6,232 cars.
(See Chart 2, upper section.)
Receipts of export freight at New York increased fur-
ther by 675 cars last week to a total of 6,049 cars. (Refer
to Chart 2, lower section.) Receipts for export at 9 other
North Atlantic ports increased sharply by 1,113 cars to
4,116 cars. However, receipts for export at 6 Pacific
ports showed but 8. slight increase, reaching a level of
1,960 cars.
Regraded Unclassified
LIGHTERAGE FREIGHT IN STORAGE
AND ON HAND FOR UNLOADING IN NEW YORK HARBOR
1941
1942
CARLOADS
CARLOADS
Thousands
Thousands
24
24
22
22
20
20
18
18
16
16
14
14
12
12
10
10
B
8
MAR
MAY
JULY
SEPT
NOV.
JAN
MAR.
MAY
JULY
JAN
SEPT.
NOV.
1941
1942
Largely export freight, But about 10% represents freight for local
220
and coastal shipment, Figures exclude grain.
Chart 1
Office of the Secretary of the Treasury
- of - and Statistics
C-303-0
Regraded Unclass
EXPORT FREIGHT MOVEMENT
1941
1942
CARLOADS
CARLOADS
Thousands
Thousands
Exports
10
10
9
9
8
B
From New York
7
7
6
6
5
5
4
4
3
3
it
2
2
JAN.
MAR.
MAY
JULY
SEPT.
NOV.
JAN.
MAR.
MAY
JULY
SEPT.
NOV.
1941
1942
CARLOADS
CARLOADS
Thousands
Thousands
Receipts for Export
10
10
9
9
8
8
At New York®
7
7
6
6
5
5
4
4
At 9 other North
Atlantic Ports
:
3
3
2
2
I
I
At 6 Pacific Ports
:
o
o
JAN.
MAR.
MAY
JULY
SEPT.
NOV.
JAN.
MAR.
MAY
JULY
SEPT
NOV.
1941
1942
As estimated from date of general monagers' association of New York.
221
e Association of American Reiroade.
Office of the Secretary of the Transury
2 state
C-382-B
Division of - - -
Regraded Un
222
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
DATE March 5, 1942
TO
Secretary Morgenthau
FROM
Mr. White
I EUTI giving you herewith a comparative statement of the
approximate earnings of the Stabilization Fund for the months
of January and February, 1942.
Earnings
January 1942
February 1942
interest earned on investments
$ 20,220.69
$ 18,263.85
Interest earned on Yuan
24,359.81
22,030.43
Interest earned on Milreis
9,804.29
3,101.38
Total
$ 54,384.79
$ 43,395.56
Profits on handling charges on gold
208,470.08
369,415.87
Grand Total $262,854.87
$412,811.53
Expenses
Salaries
$ 19,659.23
$ 16,655.79
Travel
663.06
462.51
Subsistence
123.17
1,274.11
Telephone and Telegraph
1,528.37
1,884.18
Stationery
21.88
13.04
All others
738.34
1,759.32
Total
$ 22,734.05
$ 22,048.95
Set earnings
$240,120.82
$390,762.58
The increase in the earnings for February resulted from
= greater turnover in gold trensactions with foreign countries
9A which the handling charge of 1/4 of 1% was collected.
The various expense items fluctuate from month to month.
In December they totaled $27,231.87.
This report was completed from figures supplied by
Mr. O'Daniel.
Regraded Unclassified
STRICTLY CONFIDENTIAL
PRINCIPAL BUSINESS INTERESTS OF VICTOR BWANDEL, 45 DERIYED FROM PUBLISHED sounces
(Interests de not represent
January 1. 1042
Victor Eminue)
AVIATION 453
NEPUBLIC min
TRANSPORTATION
EMAIL are
come.
AUGHERT MARL
FORM
COMP.
COMPANY
Tirier -
- the
440 LIMIT
-
CIMI
Name
at
- -
Their -
Resoutive Committee
no williams
Invoice
the themal
di the
Limited facture
hart - Treatment
- contraire
AVIATION CORP.
STANTATO 348 AIC
CHRAFT
-
27 more-
-
Prestrant
LABIER
Chaires -
institutes
4D Hold
et
ADMIRE CENTRAL
AMERICAN
AVIATION MPS.
AMERICAN
CALIFORNIA
MOUNTAIN
DELAITIRA GAS
WITH CIRP.
AIRPLANE AND
CORP.
. OTHER
AIRLINES use?
ENSIRE 2012.
PRIDON POTER
starts
AND ELECTRIC
DISCOMADO FOREE
TIME -
use check
SUBSIDIANTES
435
= -
COMPANY
para SMITH
COMPANY
COMPANY
- the
100: Dien
- instruction
-
ID TOWN
MODEVELT
WINE
FAR AMERICAN
TURCHTO
MADRET STREET
we
WITHES
NOTE GAS
SHIPSTILDING
AIRCRAFT no.
ADDRESS LES.
FUILADELPHIA
TELD INC.
ALPHATE
COMP.
PAILWAT
AND ELECTRO
CATE portes
PUBLIC SERVICE
ARE ELECTRIC
COMPANY
pl -
APT - -
- IMPLE
- -
COMPANY
COMPANY
CONTANT
:
CIRPANY
114 -
0334 millions
IVS stillens
-
-
-
- signature
-
COMPULITATED
AIRCRAFT DRF,
19 SUBSID-
AM:
M STATES
IS state
IABIER
3
- you
De streets
MARCHETTE
5
am militant
RAILWAY
TARIES
LIART ARE
LARTED
- contrasts
ZARINO
TRACTICE a
MONTIER
a
PLEET
" -
ENTERPRISE
SINCIAFT
AIRCRAFT
LIGHT R.
180.
en.
477
"AVIATION Derporation's Internet is If item of services Ave Lines is tell LA with - Herribly if -
- Name: of Involvents and for Thank benefit
224
BRITISH AIR COMMISSION
1785 MASSACHUSETTS AVENUE
WASHINGTON, D.C.
TELEPHONE HOBART 9000
PLEASE QUOTE
REFERENCE NO
with the compliments of British (Ir Commission,
who enclose Statement No. 23 - Aircraft Despatched
- for week ended March 3, 1942.
The Hon. Henry Morrentheu, Jr.
Secretary of the Trensury
Washington, D. C.
March 5, 1942.
Regraded Unclassified
STATEMENT NO. 23
YOST SECRET
AIRCRAFT DESPATCHED FROM THE UNITED STATES
225
DURING WEEK ended, MARCH 3rd, 1942
DESTINATION
ASSEMBLY POINT
FLIGHT DELIVERED
S
BY SEA
BY AIR FOR USE IN CAN.
till
recobra
U.K.
U.K.
40
ISOLIDATED
velins
U.K.
U.K.
1
(via Bermuda)
ECHILD
19
Middle East
Suez
6
MARTIN
altimore
Canada
1
Middle East
Port Suden
3
TIES
styhawks
Australia
Melbourne
IO
AMERD
uon III
Australia
Sydney
18
AL 12A (Used)
U.K.
U.K.
1
tura
U.K.
U.K.
2
2
Canada
48 AMERICAN
IN
U.K.
U.K.
30
7
110
1
3
tish Air Commission,
reig 5th. 19/2.
Regraded Unclassified
235.A
BRITISH AIR COMMISSION
1785 MASSACHUSETTS AVENUE
WASHINGTON, D.C.
-
TELEPHONE HOBART 9000
QUOTE
NO
With the compliments of British Air Commission
who enclose weekly Statement No. 41, covering
aircraft flight delivery as at March 2, 1942.
The Hon. Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
March 4, 1942.
In 0-55
US SECRET - BRITISH MOST SECRET
MARCH 2, 19/2
of OCEANIC FLIGHT DELIVERY AIRCRAFT -- WEEKLY REPORT NO, 11
Is LIBERATOR II off Contract 8-677
55 in U.K.
5 in M.S. (including I creshed in Africa, Nov. 25)
4 at Montreal
*75 taken by U.S.A.A.C., including 1 crashed neur Tucson,
Ariz., Dec. 23, and 1 crached near San Diego, Jan. 2.
139
-
2. HUDSON V (LONG RANGE) off Contract A-1749
173 in U.K.
39 at Debert
1 at Nontreal
6 under repair
219 (a)
3. HUDSON III (LONG PANGE) off Contruct A-68
211 in U.K.
1 at Durtnouth
3 at Nontreal
19 for U.S.A.A.C. Familiarization Program
1 under repair
235 (b)
àt off Contracts A-2587, F-270, A-37, MIS-58, 0/11-78
91 in U.E.
9 at Singapore
18 in Australia
y at Dartmouth
9 in Bormida
3 en route San Diego for Australia
8 at Elisabeth City, N.C.
6 at Fensacola, Fla. (diverted to U.S. llavy)
153
5, VINTURAS (LONG BANCE) off Contract 1-34
2 at Nontreal
2 in transit
12 at Long Beach
16
be LODESTARS off Lend-Lünce Contruct AC-53 (ESC Req. 1049)
(a) C-59
1 departed Viesi (A.C.F.C. reports it crushed)
3 arrived Memi for British
3 taken by U.S.A.A.O.
?
(B) C-60
2 departed Viami
1 arrived Viami for British
3
7. SUBON III-A
(A) Off Lend-Dease Contract 10-5 (BSC Rec. 62)
96 at Debert
4 at Nontreal
2 at Ottama
19 in transit for Pritish ( following certal number 97613)
6 at Montreal, em route Debert
10 at Maini
5 under repair
22 for China
20 diverted to V.S. Navy
159 taken by D.S.A.A.C.
337 (c)
(B) Off Lond-beare Contract 10-251 (I' 100
23 in transit (un route Nontreal)
1 at Long Beach
24 (d)
Regraded Unclassified
225.C
Sheet 2
INFIDENTIAL REPORT
MARCH 2, 1942
E. NC, D-55
U.S. SECRET. BRITISH MOST SECRET
LOCATIONS OF OCEANIC FLIGHT DELIVERY ATRORAFT - WEZKLY REPORT NO. 41
E. B-17 E'p (Army Release) RSC Reg, 10552
7 at modification center (Cheyenne)
9. B-25 3's (Any Release) BSC Reg. 10558
9 at modification center (St. Paul)
1 en route modification center
10
10, B-26 4's (Army Release) RSC Roa. 10556
6 en route modification center (Omeha)
1
at Baltimore
7
1
2
3
4
5
6
7
8
9
10
TOTAL
DD EINGDOM
55
173
211
91
530
== EAST
5
5
STATE
18
18
9
9
1
9
10
4
1
3
2
4
14
at
39
96
135
cired, en route Debert
6
6
tan
2
2
emia
2
9
quarted Viand
3
3
land
4
10
14
noute San Diego for Australia
3
,
Marbeth City, N.C.
8
8
transit
2
If
4
centers
7
9
16
1
6
7
rulte nod. centers
of Beach
12
1
13
1
1
Etimore
birr repair
6
5
12
1
to China
22
22
interted to U.S. Mary
6
20
26
19
MAAC Fan. Fro.
19
Were by ISUC
75
3 153
231
OTAL
219
235
153
16
10
361
7
10
7
1157
139
No indication that last one has left factory.
Imluding six which crashed - two in the United States, four after loaving.
Proluding ten which crashed - one In the United States, three in Canada, and
dis en route U.S.
c) Broluding eight which crasted seven in the United States, and CSA in
4) Excluding one which creshed in the United States
DIVISION
PLANNING AND PRODUCTION DEPARTMENT
ERITISE ATE COMMISSION
Regraded Unclassified
226
Note
the attached material, just re-
ceived from the State Department, is
dated November 1941. The two docu-
ments conferring authority on the
Icelandic Delegation and Vilhjalmur
Thor have been superseded by nov
documents transmitted by the American
Legation, Reykjavik, in its cable
No. 140 dated March 5. 1942. The
latter confer authority OB Thor Thore.
1. Dietrich
Regraded Unclassified
TELEGRAM SENT
DEPARTMENT OF STATE
Washington.
November 21, 1941
7 p.m.
AMERICAN LEGATION,
REYKJAVIK.
129.
Your 124, November 20, 10 p.m. was received too
late for transmission to the Icelandic delegation who
have already left Washington on their journey home.
Possibly the Icelandic Government and the National
Bank may wish to give you new documents in the name
of the Icelandic Minister in Washington.
HULL
859A.51/13
Regraded Unclassified
228
/
Act
authorizing the Government to guarantee a
working loan for the national Bank of Icaland.
Art. 1
Tl.= overnment 3. representiti, the Treasury Is
authrized to Pushintee DE t.=
3 at t-- 1.1100
wited tate.
art.
This Act 8,311
Translated from the official Icelandic text.
SuctiornJonson
Regraded Unclassified
229
With reference to an Act passed Sixe
the 15th November, 1941, authorizing :..: - tc
guarantee a working loan Ter t. e e National
I the undersigned Jakes USITED, Iceland's
Finance, acting or. behalf of the Treasury, 18 sinder bith
the Icelandic Trade Commission at "reselt in
Namely r. Vilhjél ur Thor, JONK mentger, ::
son, bank manager, and Sr. 3,0m. .........................
erciant, full and unrestricted power el attorney
a declaration sinding the 20 gurun
of full and due repayment of principal
interest on = loan not
dollars - which the Bational of propured perro-
ing from the _tabilization Fund, Thest con,
tis 20%
/
Regraded Unclassified
LANDSBANKI ÍSLANDS
230
REYKJAVIK,
This is to certify that we do hereby give Mr. Vilhjálmur
.hor, General Vanager of our Bank, the National Bank of Iceland
(Landsbanki Islands) in Reykjavík, on our behalf a full and
alimited power to take and sign & loan or overdraft at the
tabilization Fund in Washington, D. C., amounting to L. 3.
Ollars 2,000,000.- -two million U.S. A. dollers - and that
....tever 321d Mr. Vilhjálmur Thor may do in connection with
Vds matter is equally valid 8,8 1f "e had done it ourselves.
Done in Leykjevík, on the 17th day of October 1941
THE DARK OF ICE/AD
Minume
Regraded Unclassified
SECOND CORRECTED COPY
PARAPHRASE or TELEGRAL RECEIVED
Y
FROM: American Imbresy, Chungsting. China.
DATE: March 5, 1942, 10 a.m.
NO.: 190, Section I,
This is a message for the Secretary of the Treatury and is from
Adler. It in a strictly confidential message marked TF-18.
(1) On March 3 et the Board meeting Hall Patch said that he had
received a cable from the bank of England that after furnishing Board
with 1750,000 in order to meet the requirements for sterling since the
outbresk of the var in the Pacific, presunably DO further calla from the
Board need be expected by the Bank of England P.P. a result of the loan
of 150,000,000 end the changed cituation, Therefore, Hall Patch in
inclined to desire the suspension of the operations of the Sorri but he
gave in to the general feeling of the meeting including that of the
chairman which was one of strong opposition.
At this time it would be very unfortunate to suspend operation of
the Board, since it would place emphasis on China's isolation, venicen
to et greater extent the influence and prestige of America and Great
Dritain, end would be welcomed by some groups in the Government of
Once operations were suspended, it would be very difficult for the Board
to regume them. Some commercial careo still remains in Lastio and
Wanting and the Foard should finance the import of these. Even before
the regular new route is established from Burne end India E trickle of
goods are expected over B. rule treak which DOW existe. À final considera-
is that, as In suggested originally, the Board's existence may because
of the confidence which it enjoye afford an instrument which will Se
convenient for the use of the loan. (End of Section =)
GAUSS
Copy:ime
3/21/42
Regraded Unclassified
G
0
P
232
Y
PARAPHRASE OF TELEGRAM RECEIVED
FROM: & merican Embassy, Chungicing, China
DATE: March 5. 1942, 10 a.m.
NO. # 190 (Section 2)
A number of articles in the Press have proposed the
use of the Stabilization Board for bond issue, in this
connection. We do not have any information here as to
whether or how the status of the Board has been affected
by new British and American loans.
2. The claims of the Central Bank described in TF-17
and the fact that the Board while committed by its under-
standing with Foreign Exchange Commission to meet (2)
Government of China foreign exchange requirements worry
Hall-Patch. In regard to Central Bank application described
in TT-17. no action has been taken as yet. Any attempt by
the Board to assert any control over any foreign exchange
expenditures in the present political situation would be
most inadvisable. The oversold foreign exchange position
of the Central Bank increased, in the meantime, by approxi-
mately £1,075,000 (sterling) and U.S. dollars $1,300,000 in
January and February and all (r) remittances to China have
dried up although remittances from the U.S. still continue.
3. A letter from & Chinese employee of the Board, who
escaped from Hong Kong and wrote from (?)1in states that he
vali with Taylor and Prese until January 5 when they were
interned and shared a room in & Chinese hotel in Hong Kong.
This
Regraded Unclassified
233
+
This employee tried to see them before he left Hong Kong
but failed to do 60. He did learn, however, that they
were well and safe. Upon his arrival in Chungiding we may
be able to send more details.
This is the end of the message from Mr. Adler.
GAUSS
eh:dopy
3-12-42
Regraded Unclassified
0
o
234
P
Y
TRB 3
Rio de Janeiro
This telegram must be
paraphrased before being
Dated March 5, 1942
communicated to anyone
other than a Governmental
Rec'd 6:11 p.m.
agency. (BR)
Secretary of State,
Washington.
706, March 5, 4 p.m.
The Bank of Brazil will distribute during March
approximately $5,005,000 to American companies and the
equivalent of $2.005,000 in sterling area to British
companies for transfer abroad of profits and dividends
represented by applications registered and approved
through February 28.
Inform Treasury and Commerce.
Airmail despatch follows.
CAFFERY
KLP
0opy:bj:3-13-42
Regraded Unclassified
COPY
235
PARAPHRASE OF TELEGRAM RECEIVED
FROM: American Embassy, Rio de Janeiro, Brazil
DATE: March 5, 1942, 10 p.m.
NO. : 717
This telegram contains a message for Dr. White of
the Treasury Department.
Again the Director of Exchange has stated his hope
that steps will be taken by our Government to restrict
the free circulation in foreign countries of American bank
notes. Before issuing instructions for the control of trad-
ing in bank notes, which he is willing to do, he wants to
ascertain your suggestions and views. The Director suggested
that restricting to the Bank of Brazil the sale and purchase
of United States currency might solve the problem. Of course,
he realizes that it is not possible to stop currency smuggling
but he thinks that something should be done immediately to
impede enemy acquisition of bank notes.
The Director made the statement that no estimate of the
amount of American currency in Brazil is possible, but we do
know, however, that approximately $2,500,000 was received by
the Italian Enbassy (refer to telegram 590 dated November 14,
1940, from the Embassy) and that reasonable amounts of bank
notes are held by Germans and Japanese. The total of American
bank notes which the Bank of Brazil holds is 10,310 and accord-
ing to the Uruguayan Legation, other commercial banks held
insignificant amounts.
CAFFERY
Copy:bj:3-7-42
Regraded Unclassified
236
NATIONAL CITY BANK OF NEW YORK
New York
March 5. 1942
In replying please quote
initials JAH
Mr. L. W. Knoke, Vice-President,
Federal Reserve Bank of New York,
33 Liberty Street,
New York, New York.
Dear Mr. Knoke:
This will confirm our telephone conversation of this
morning in which we informed you that we had received a. cable
from Amministrazione Pontificia per le Opere di Religione,
Citta del Vaticano, acknowledging receipt of our cable advice
concerning the 104 bars of gold which you purchased and are
holding earmarked for their account. Their cable states:
"PLEASE COMPLETE OPERATION GOLD PURCHASING
AGAINST FOR OUR ACCOUNT GOLD FOR $2,000,000."
We understand you will give this matter your prompt
attention and advise us of your decision regarding the purchase
of additional gold, which we may transmit to Amministrazione
Pontificia per le Opere di Religione.
Very truly yours,
THE NATIONAL CITY BANK OF NEW YORK p.p.
(Signed) John A. Herber
(Received by telephone from Federal Reserve Bank of New York, N.Y.
1:15 p.m. March 11, 1942.)
le
Regraded Unclassified
237
FEDERAL RESERVE BANK OF NEW YORK
Karch 5. 1942
National City Bank of New York,
55 Wall Street,
New York, N. Y.
Dear Sirs:
Attention: Mr. J. A. Herber
With reference to your letter of today's date, in which
you quoted a cable received by you from Amministrazione
Pontificia per le Opere di Religione, Citta del Vaticano,
regarding the purchase and earmarking of an additional $2,000,000
in gold, we authorize and request you to transmit by cable to
Amministrazione Pontificia the following message from us:
"We understand Treasury is at present agreeable
to sale of additional $2,000,000 gold under same
conditions as gold sold to you on February 26, 1942.
We are willing to earmark this and further amounts
of gold under same terms and conditions as gold
earmarked for your account on February 26, 1942 as
follows: 'We are authorized to receive and hold in
custody under earmark for your account, gold which
is your property, subject to the terms of the
license issued to us by the Secretary of the
Treasury of the United States. Gold which is re-
ceived and earmarked by us for your account under
such authority is held subject to our usual rules with
regard to the earmarking and custody of gold. We
will provide the same facilities for the custody of
such gold as we provide for our own similar property
but beyond that we assume no responsibility. We
reserve the right at any time to terminate this
arrangement with you in whole or in part upon notice
to that effect except as to transactions previously
initiated.' If the foregoing terms and conditions
are agreeable to you please so inform us by authenti-
cated cable through National City Bank of New York.
It is understood that for the time being and until
further notice you will give us your instructions
respecting gold held by us for your account through
the medium of National City Bank of New York and that
Regraded Unclassified
238
-2-
we are authorized to act on any instructions relating
to such gold which National City Bank advises us it
has received from you and believes to be genuine."
Very truly yours,
D. J. Cameron,
1
Manager, Foreign Department.
(Received by telephone from Federal Reserve Bank of New York,
N. Y., 1:15 p.m., March 11, 1942.)
le
Regraded Unclassified
C
o
P
Y
DEPARTMENT OF STATE
WASHINGTON
March 5, 1942
In reply refer to
FD 852.5151/520
The Secretary of State presents his compliments to
the Honorable the Secretary of the Treasury and encloses
conies of the paranhrase of telegram No. 208, deted
Rarch 2, 1942, from the American Embassy, Medrid, Spain,
concerning the utilization of American currency held by
the Snanish Foreign Exchange Institute.
Telegram So. 99 was transmitted to the Secretary of
the Treasury in this Department's letter of February 17,
1942.
Enclosure:
From Embassy. Medrid,
No. 208, Marca 2, 1942.
Regraded Unclassified
C
o
239
P
Y
DEPARTMENT OF STATE
WASHINGTON
March 5, 1942
In reply refer to
FD 852.5151/520
The Secretary of State presents his compliments to
the Honorable the Secretary of the Treasury and encloses
copies of the paraphrase of telegram No. 208, dated
March 2, 1942, from the American Embassy, Madrid, Spain,
concerning the utilization of American currency held by
the Spanish Foreign Exchange Institute.
Telegram No. 99 was transmitted to the Secretary of
the Treasury in this Department's letter of February 17,
1942.
Enclosure:
From Embassy, Medrid,
No. 208, March 2, 1942.
Regraded Unclassified
310
PARAPERASE C7 TILEGRAN RECEIVED
FROM: American Embassy, Madrid, Spain.
DATE: March 2, 1942, 5 p.m.
10. : 308.
The Foreign Exchange Institute has been informed by ne that we can-
not accede to its request to utilize currency which It nov holds in
order to buy wheat and coal. I based this on the ressons given in the
first paragraph of the Department's confidential telegram No. 99. 10
dated the 16th of February.
It was stated by the Director of the Foreign Exchange Institute that
he felt certain that political considerations sre the besir for the refusal
of the Government of the United States to allow these bills to be re-
catriated end for the blocking of the three million dollers credit obtained
from the Swies. The Director considers the United States Government's
ection unnecessarily harsh because Spain had been given no previous
indication of a change in attitude in sufficient time to cereit it to make
other arrangements, and because during 1941 it wee permitted to utilize funds
transferred to its account by Switserland. He also pointed out that until
the British intervened no objections were nede to the regatriation of
currency. In contrast with the United States' treatment, Suain WER given a
certain length of time within which to ship the notes it had accumulated
when the Government of Greet Britzin imposed restrictions against re-
patriation of counds.
With reference to the currency, the Director insisted that it had all
been obtained through norwal channels, that any quesicions that the currency
was partly looted could be dissigated by having his booke execined end their
it would seen that the U. S. Government would avail itself of the opportunity
Regraded Unclassified
- 2 -
241
to investigate his books if these suspicions were the real reasons. The
Director stated that neither of the Axin powers had approached the Institute
to accept dollar currency for any purpose, nor anyone in the Government
80 far as he knew. He has continued to buy U. S. dollar currency at the
recently fixed official rate as these bills continue to be offered especially
by travelers arriving from South America. He does not anticipate that
such purchases will be discontinued within the near future.
With reference to the blocking of funds transferred from Swiss accounts,
the Director's impression is that the Government of the U. S. allows the
Swies to utilise its credits in the U. S. for the purchase of American
materials. Since, however, the United States Government will not permit
Spain to utilize the funds transferred from Switzerland for the movement
of Swies purchases to Switzerland from Spain or for the transportation of
Swies goods 8. general policy of emberassing Spain must necessarily be
inferred. The fear was expressed by him that if doller funds acquired by
Spain from sources other than the sale of its products to the U. S. are
to be blocked Portuguese payments for the use of Spenish tankers would also
probably be affected. Permission to charter such boats for urgent Portuguese
requirements would eventually be necessarily refused by Spain because of
this.
He regrets that in view of Spain's shortage of dollars it will
probably find it impossible to meet payments now due in the United States
unless such funds are released.
The point vas made that the volume of American accounts frozen in
Spain exceeded these funds. In reply the Director said that there had been
Regraded Unclassified
- 3 -
242
accumulation of American accounts prior to the outbreak of the Civil War;
that during his encumbency Spain has attempted scrupulously to meet its
commitments and had done so until this extraordinary action by the Govern-
ment of the United States.
With reference to blocked American accounts, he hoped that we might be
able to go into this question more fully in the near future in order to
explore the possibility of working out some arrangement for their eventual
liquidation. In all probability this would depend upon the extent to
which Spanish products purchased by American exceeded American products
purchased by the Spanish.
BEAULAC
Copy:bj:eh 3-7-42
Regraded Unclassified
TREASURY DEPARTMENT
243
INTER-OFFICE COMMUNICATION
-
DATE March 5. 1942
TO
Secretary Morgenthau
FROM Mr. Dietrich
CONFIDENTIAL
Registered sterling transactions of the reporting banks were 8.0 follows:
Sold to commercial concerns
£72,000
Purchased from commercial concerns
£29,000
Open market sterling held at 4.03-3/4, with no reported transactions.
The Uruguayan free peso, which moved off from .5295 to .5275 last week,
returned to .5295 today.
The Cuban peso moved off to an offered quotation of 3/16% premium today as
compared with 3/8% yesterday and the recent high of 7/8% reached on February 9.
In New York, closing quotations for the Toreign currencies listed below
were as follows:
Canadian dollar
11-1/2% discount
Argentine peso (free)
.2370
Brazilian milreis (free)
.0516
Colombian peso
-5775
Mexican peso
.2065
Venezuelan bolivar
.2500
The Federal Reserve Bank of New York purchased 250,000 Swedish kronor in
Sev York at the rate of .2385-1/2 by order and for account of the Central Bank
of the Uruguayan Republic, who advised that the kronor were needed to pay for
Uruguayan imports.
There were no gold transactions consummated by us today,
No new gold engagements were reported.
In London, spot and forward silver remained et 23-1/2d, squivalent to 42.67#.
The Treasury's purchase price for foreign silver was unchanged at 35#. Handy
and Harman's settlement price for foreign silver vas also unchanged at 35-1/84.
We made no purchases of silver today.
R
Regraded Unclassified
214
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE March 5. 1942
Secretary Morgenthau
10
Mr. Kamarok
FROM
Subject:
Monthly Report: Royal Air Force Bombing Activity
in February, 1942.
1. Bombing activity of the Royal Air Force
during February, 1942, WAS on a very low level.
As nearly AS it can be made out from the data,
the R.A.F. bombers were only about one-fourth
as active in February as they were in July And
August last summer.
2. It can be definitely asserted that the
British promises of intensified bombing attacks
during this winter have not been fulfilled.
Bad weather conditions during to: winter may be
8. part of the exulenation. inc development
of better anti-sircraft defenses on the part
of the Germans may have become An increasingly
deterrent factor.
Regraded Unclassified
- ? -
245
I. Losses
Total Losses in
Losses during
raids to
February
March 1,1942
R.A.F. bomber losses in
bombing raids in
Northern Europe
49
1,439
II. Analysis of Targets
Total Number of
Attacks during
attacks to
February
March 1, 1942
Ports, docks, shipping
29
1,517
Industrial plants
10
906
Airdromes and seaplane
bases
7
871
011 refineries, synthetic
plents and tank farme
0
358
Total of above
46
3,652
III. Leading Cities Attacked
Total Number of
Attacks during
attacks to
February
March 1, 1942
A. Germany
Cologne (industriel center)
1
95
Bremen (port)
0
R7
Hamburg (port)
0
85
Emden (port)
0
71
Wilhelmshaven (cort)
0
61
Mennheim (industrial center)
2
57
Kiel (port)
2
57
Berlin (industrial center)
0
50
Gelsenkirchen (synthetic oil)
0
43
Essen (industrial center)
0
43
Hanover (synthetic oil)
0
42
Total of above (11 cities)
5
691
Regraded Unclassified
246
- 3 -
B. Occupied Areas
Total Number of
Attacks during
Attacks to
February
March 1, 1942
Boulogne (port)
o
Brest (port)
119
2
Ostend (port)
107
3
100
Calais (port)
0
79
Flushing (port)
O
Lorient (port)
63
0
52
Total of above (6 cities)
5
520
C. Italy
Naples (port)
1
24
Turin (industrial center)
o
13
Total of above (2 cities)
1
37
Regraded Unclassified
347
BISTRICTED
MID 319.1
Situation
No. 64g
M.I.D., V.D.
11:00
A.M.
March
5.
8-11-41
1945,
SITUATION REPORT
I. Pacific Theater.
Philippines: No change in the situation to report. Hawali:
Three medium sized bombs, believed to be from an emeny plane, were
dropped on Honolulu at 2:15 A.M. today, the Army announced. There were
no casualties. Burma: The Japanese have crossed the Sittang River in
force, causing is British withdrawal on Pegu. Both sides have employed
tanks in recent fighting. The Rengoon-Mandalay road is atill not occu
pied by the enemy in force, but it probably is not being used by the
defenders. Australia: The Japanese made their sixth and seventh air
attacke on Port Moresby, New Guinea, early today In two small scale
raids. Some damage was reported but no casualties. Australian aircraft
again attacked Gasmata, New Britsin. Japan: The Imperial Japanese
headquarters announced today that 30 enemy planes had attacked
Minamitori Shima, a Japanese island about 1,200 miles southeast of
Tokyo.
IL. Western Theater.
Vichy: Naval Captain Jean Fontaine, Chief of Vice Premior
Darlan's Cabinet, declared tonight that the Renault, Selmson and Ferman
plants were badly hit by the British in the air raid on Paris suburbs.
111. Fastern Theater.
There 1a no reported change in the general situation. The
Risulans continue to claim successes, especially on the Central and
North Central Fronts. (A situation map will not be (ssued this date.)
Ruesia reports the fact that Germans are using reserve trans
port planes from Denmark end Yugoalavia in their effort to ferry men and
supplies to the 16th Army.
IV. Middle Tastern Theater.
No changes in the situation to report.
RESTRICTED
Regraded Unclassified