Ask the Scholar

{
    "localId": "28276953",
    "label": "Volume 504, March 4 – March 5, 1942",
    "core": "doc",
    "dtoType": "document",
    "citationUrl": "https://catalog.archives.gov/id/28276953"
}

{
    "id": "28276953",
    "sourceUrl": "https://catalog.archives.gov/id/28276953",
    "contentType": "document",
    "title": "Volume 504, March 4 – March 5, 1942",
    "citationUrl": "https://catalog.archives.gov/id/28276953",
    "collections": [
        "Henry Morgenthau, Jr. Papers",
        "Diaries of Henry Morgenthau, Jr."
    ],
    "iiifBase": "https://s3.amazonaws.com/NARAprodstorage/opastorage/live/53/2769/28276953/content/presidential-libraries/roosevelt/FDR-MORGEN/589213/md0724.pdf",
    "thumbnailUrl": "https://s3.amazonaws.com/NARAprodstorage/opastorage/live/53/2769/28276953/content/presidential-libraries/roosevelt/FDR-MORGEN/589213/md0724.pdf",
    "largeImageUrl": "https://s3.amazonaws.com/NARAprodstorage/opastorage/live/53/2769/28276953/content/presidential-libraries/roosevelt/FDR-MORGEN/589213/md0724.pdf",
    "imageCount": 1,
    "hasImages": true,
    "source": "import",
    "hasTranscription": false
}

{
    "url": "https://catalog.archives.gov/id/28276953",
    "naId": 28276953,
    "levelOfDescription": "fileUnit",
    "recordType": "description",
    "ocrSource": "nara-archive"
}

{
    "seq": 1,
    "pageIndex": 0,
    "type": "document",
    "url": "https://s3.amazonaws.com/NARAprodstorage/opastorage/live/53/2769/28276953/content/presidential-libraries/roosevelt/FDR-MORGEN/589213/md0724.pdf",
    "mediaId": "59dea70bcadb7e1a",
    "ocrText": "DIARY\nBook 504\nMarch 4 and 5, 1942\n- A. -\nBook Page\nAirplanes\nAircraft despatched - British Air Commission reports -\n3/5/42\n504\n224,225-A\nAppointments and Resignations\nDay, William P.: Swope memorandum concerning - 3/4/42\n32\nViner, Jacob: Leave of absence from University of\nChicago terminates March 30, 1942 - 3/5/42\n212\n- B - -\nBrasil\nSee Latin America\nBusiness Conditions\nSears Roebuck and Montgomery Ward sales by types of goods\nand by regions - - 3/5/42\n203\n- C -\nChina\nStabilization Board: Adler memorandum following conference\nand quoting Hall Patch - 3/5/42\n231\n(See also Book 505, page 220)\nCurrency\nHMJr-Wheeler (Senator, Montana) correspondence concerning\ndollar and its connection with gold and/or silver -\n3/5/42\n195\n- D - -\nDay, William P.\nSee Appointments and Resignations\nDefense Savings Bonds\nSee Financing, Government\n- $ -\nEmanuel, Victor\nPrincipal business interests as of January 1, 1942\n223\nExchange Market\nResunds - - 3/4-5/42\n62,243\nExports\nFreight Situation - Hass memorandum - 3/5/42\n219\n- 7 -\nFinancing. Government\nStatutory debt limitation report as of February 28, 1942 -\n3/4/42\n12\nRegraded Unclassified\n- A -\nBook Page\nAirplanes\nAircraft despatched - - British Air Commission reports -\n3/5/42\n504\n224,225-A\nAppointments and Resignations\nDay, William P.: Swope memorandum concerning - 3/4/42\n32\nViner, Jacob: Leave of absence from University of\nChicago terminates March 30, 1942 - 3/5/42\n212\n- B -\nBrasil\nSee Latin America\nBusiness Conditions\nSeare Roebuck and Montgomery Ward sales by types of goods\nand by regions - 3/5/42\n203\n- C -\nChina\nStabilization Board: Adler memorandum following conference\nand quoting Hall Patch - 3/5/42\n231\n(See also Book 505, page 220)\nCurrency\nHMJr-Wheeler (Senator, Montana) correspondence concerning\ndollar and its connection with gold and/or silver -\n3/5/42\n195\n- D -\nDay, William P.\nSee Appointments and Resignations\nDefense Savings Bonds\nSee Financing, Government\n- I -\nZeanuel, Victor\nPrincipal business interests as of January 1. 1942\n233\nExchange Market\nResunds - 3/4-5/42\n62,243\nExports\nFreight Situation - Hans memorandum - - 3/5/42\n219\n- 1 -\nFinancing, Government\nStatutory debt limitation report as of February 28, 1942 -\n3/4/42\n12\nRegraded Unclassified\n- 1- (Continued)\nBook Page\nFinancing, Government (Continued)\nDefense Savings Bonds:\nScrap Iron: Plan to pay farmers in Defense Bonds\nand Stamps discussed by HMJr and Howard Hunter -\n3/4/42\n504\n3\nChange of name discussed by Treasury group -\n3/5/42\n85\n(See also Book 506, page 49 - 3/9/42)\nDaily changes in stock of Series E Bonds - 3/5/42..\n216\nFisher Body Company\nSee United Automobile Workers\nForeign Funds Control\nGeneral Aniline and Film Corporation:\nSee also Books 497 and 501\nConference: present: HMJr, Foley, Mrs. HMJr, and\nMrs. Klots - 3/5/42\n70\na) FDR's \"go ahead\" reported to Foley\nResume for FDR before actual displacement of\nexisting management - 3/5/42\n78\nProposed program.\n81\nConference; present: HMJr, Foley, O'Connell, Pehle,\nBernstein, Pike, and McConnell - 3/5/42\n115\na) HMJr tells Foley \"no more delays\" -\n3/6/42: See Book 505, pages 16, 17, and 22\nCrowley told of HMJr's talk with FDR and of the\nfuture plans - 3/5/42,\n129\nMemorandum (anonymous) on Treasury action - 3/5/42.\n131\nPatent situation (I.G. Farben, General Electric, etc.)\ndiscussed with Thurman Arnold, of Justice -\n3/6/42: Book 505, page 91\nMcConnell, Robert E.: To act as President of General\nAniline and Film Corporation; reiteration of\nTreasury point of view - 3/9/42: Book 506, page 128\n1) Discussed by Treasury group in view of\nproblem of Alien Property Custodian Executive\nOrder with Crowley as Custodian - 3/10/42:\nBook 506, page 228\n2) Crowley-Foley conversation - - 3/10/42:\nBook 506, page 242\n3) Release - 3/10/42: Book 506, page 245\nWilson, Robert 3.: Standard Oil will release him for\none-half to two-thirds of time - 3/14/42:\nBook 507, page 364\nO'Connell describes meeting to consider resignations\nof present directors - 3/16/42: Book 508, page 111\nNew management statement: Book 508, page 115\nFreight, Export\nSee Exports\n- G -\nGeneral Aniline and Film Corporation\nSee Foreign Funds Control\nGeneral Electric Company\nSee Mint, Bureau of\nRegraded Unclassified\n- G - (Continued)\nBook Page\nGermany\nSee Military Reports\nGolden, John\nSee Revenue Revision: Admission tax for officers of\nArmy and Navy\n- H -\nHunter, Howard\nSee Financing, Government: Defense Savings Bonds\n(Scrap Iron)\n- I -\nIceland\nDocuments concerned with working loan for National\nBank of Iceland - 3/5/42\n504\n226\nIron, Scrap\nSee Financing, Government: Defense Savings Bonds\n- J -\nJapanese in United States\nProclamation and release by War Department - - 3/4/42.\n43\nSuggested program for Federal Reserve Bank of\nSan Francisco, etc., in dealing with property of\nevacuees - 3/5/42\n74\nMcCloy told of FDR's interest \"in what happened to\nthe Japanese after they get moved, not in what\nhappened to their property\" - 3/5/42\n77\nEccles-HMJr conversation - 3/5/42\n175\nStimson accepts help of Federal Reserve Banks and\nTreasury - 3/6/42: See Book 505, page 25\na) McCloy, Pehle, and Saymesak (Federal Reserve)\nflying to Coast - 3/6/42: Book 505, page 26\n1) No press relations personnel:\nBook 505, pages 28 and 29\nb) Tolan Committee informed - 3/9/42: Book 506,\npage 22\n- L -\nLatin America\nBrazil: American currency - restriction of circulation\ndiscussed in cable from American Embassy, Rio -\n3/5/42\n235\nLend-Lease\nReport as of February 28, 1942.\n19\na) Reconciliation of allocations on HMJr's report\nand on summary sheet - 3/4/42\n23\nRegraded Unclassified\n- M -\nBook Page\nMcConnell, Robert E.\nSee Foreign Funds Control: General Aniline and\nFilm Corporation\nMilitary Reports\nGerman aircraft production - Kamarck report - 3/4/42\n504\n54\nReports from London transmitted by Halifax: In\nfuture, distribution to be by Combined Chiefs of\nStaff - 3/4/42\n63\nRoyal Air Force bombing activity in February - -\nKamarck summary - 3/5/42\n244\nMint, Bureau of\nPhiladelphia: Swope memorandum on visit of two General\nElectric men - 3/5/42,\n183\nMontgomery Ward\nSee Business Conditions\n- P -\nPublic Debt\nSee Financing, Government\n- R - -\nRevenue Revision\n1942 Revenue Bill:\nExcise Taxes: Separate bill suggested to HMJr by\nFDR - 3/5/42\n170\nPersonal exemptions, capital gains and losses,\njoint returns, advertising, tax-exempt securities,\netc. - Swope memorandum - 3/5/42\n171\nAdmission tax for officers of Army and Navy:\nElimination of discussed in Mrs. FDR-HMJr\ncorrespondence 3/5/42\n197\n- S - S -\nScrap Iron\nSee Financing, Government: Defense Savings Bonds\nSears Roebuck\nSee Business Conditions\nSpain\nUtilization of American currency held by Spanish Foreign\nExchange Institute - American Embassy, Madrid,\ncable - 3/5/42\n239\n(See also Book 507, page 72; Book 508, page 152 -\n3/16/42)\nStabilization Fund\nReport of approximate earnings for January and\nFebruary, 1942 - 3/5/42\n222\nSwitzerland\nSee Spain\nRegraded Unclassified\n- T -\nBook Page\nTaxation\nSee Revenue Revision\n- U -\nUnited Automobile Workers\nFisher Body plant, at Pontiac, Michigan, asks HMJr's\nassistance in obtaining defense orders - 3/5/42..\n504 214\na) Invited to conference in Treasury - -\n3/6/42: See Book 505, page 152\n- V -\nViner, Jacob\nSee Appointments and Resignations\n- W -\nWest Coast\nSee Japanese in United States\nWheeler, Burton K. (Senator, Montana)\nSee Currency\nWilson, Robert E. (Standard 011 Company of Indiana)\nSee Foreign Funds Control: General Aniline and\nFilm Corporation\n1\nMarch 4, 1942\n12:20 p.m.\nVincent\nCallshan:\nYes, Mr. Secretary.\nHMJr:\nVince, I thought you were going to write a.\nletter for my signature to this fellow Murray,\nwho's sick.\nC:\nI did write one.\nHMJr:\nWho'd you give it to?\nC:\nI gave it to Ferdie Kuhn.\nHMJr:\nOh, don't\nC:\nI don't know whether it went to Ferdie Kuhn or\nnot, but I prepared it and I presumed it went\nout three or four days ago.\nHMJr:\nLook. That happened once before. Send the\nletters that I have to sign to Miss Chauncey.\nC:\nAll right, sir.\nHMJr:\nBecause - do you remember once before I was\nwaiting for B. letter and it took three or four\ndays to get off Kuhn's desk.\nC:\nI remember.\nHMJr:\nWell, if I ask you for something, does it have\nto always go that way?\nC:\nWell, that's the routine, Mr. Secretary. I\nmean, it's - when I prepare it, Mr. Kuhn usually\nlooks it over and sometimes makes changes.\nHMJr:\nWell, call up Kuhn and tell him to get it in\nto me.\nC:\nWell, I don't - in this case, I don't know whether\nhe's got it. I know I wrote it right the next\nday or a couple of days later though.\nC:\nWell, would you tell - would you mind following\nRegraded Unclassified\n2\n2 -\nit through and tell him please to give it to\nMiss Chaunesy at two o'olook 80 I can sign it?\nC:\nYes, sir.\nHMJr:\nBee?\nC:\nYes, sir.\nHMJr:\nAnd I just heard the second one.\nC:\nDid you?\nHMJr:\nOh, it's wonderful.\nC:\noh, well, we made some yesterday which - we\nmade three of them. One was the \"Watch on the\nRhine\" and we made another one with a play\nabout production, which is marvelous.\nHMJr:\nWell, the second one is wonderful. I get a\ngreat thrill out of them.\nC:\nWell, that's grand. Glad to hear it.\nHMJr:\nI write 80 many other letters to people that\ndon't mean anything, and this is the best\nthing . - my tongue's hanging out; I want to\nwrite somebody.\nC:\nWell, I've got a beautiful letter written.\nHMJr:\nOkay.\nC:\nI'll get it over.\nHMJr:\nTell them - whoever's holding it up - to get\nit to Chaunoey by two.\nC:\nYes, sir.\nHMJr:\nI thank you.\nC:\nOkay, sir. Good-bye.\ncc - Mr. Graves\n3\nMarch 4, 1942\n2:20 p.m.\nHMJr:\nHello.\nMr. Howard\nHunter:\nHello, Mr. Secretary.\nHMJr:\nHello, Mr. Hunter.\nH:\nI've got a scheme I thought might possibly\ninterest you, and the build-up to it 1s this.\nThe War Production Board, Mr. Batt's Division,\nis working out a project for the WPA to use\nits entire field force and trucks for about\ntwo weeks to collect scrap iron on rural\nfarms.\nHMJr:\nYeah.\nH:\nThey think there are millions of tons, and I\nthey're right.\nHMJr:\nThey are, yes.\nH:\nNow, we're getting ready to organize to do\nthat, and the Department of Agriculture has\ninsisted and the War Production Board has\nagreed that the farmers will be paid something\nfor this scrap iron.\nHMJr:\nYes.\nH:\nWe will have to handle that machinery, too.\nIt's going to be a difficult job. We couldn't\npay them cash on the farms. I had this in\nmind. It will range anywhere from a few pounds\nto several tons on a farm, and it might be worth\nconsidering that we pay them or give them some\nform of receipt for this, which will be cashable\nin Defense Stamps.\nHMJr:\nYes.\nH:\nThe War Production Board are getting together\nsome money - twenty odd million dollars, I think,\nfor the purpose of paying for this.\nRegraded Unclassified\n4\n- 2 -\nHMJr:\nHow much?\nH:\nWell, they have to guess at it, because nobody\nknows how much there ie.\nHMJr:\nYeah. Twenty million, you said?\nH:\nThat's what I understand they've taken on now.\nNow, why not pay these farmers, if we have to\npay them at all, pay them in Defense Stamps?\nHMJr:\nWell, it's an idea. I'd like to think about\nit.\nH:\nAll right.\nHMJr:\nAnd I tell you what I'll do. I'll give your\nsuggestion to Harold Graves, who handles that\nfor me, and tell him to get in touch with you\nwithin the next - well, by tomorrow?\nH:\nYeah.\nHMJr:\nIs that all right?\nH:\nSure.\nHMJr:\nIt sounds very interesting.\nH:\nWho?\nHMJr:\nI say it sounds interesting.\nH:\nYes.\nHMJr:\nI'll tell Graves about it and tell him to\nthink about it.\nH:\nAll right, fine.\nHMJr:\nThank you very much.\nH:\nI'll be glad to talk to him any time.\nHMJr:\nThank you.\nH:\nThank you, sir.\nRegraded Unclassified\n5\nANDARD FORM No. 14A\nTREASURY DEPARTMENT\nAPPROVED BY THE PRESIDENT\nMARCH 10, 1926\nWASHINGTON\nTELEGRAM\nCHARGE TREASURY DEPARTMENT, APPROPRIATION FOR\nOFFICIAL BUSINESS-GOVERNMENT RATES\nHenry Morgenthau Jr - Personal\n(The appropriation from which payable must be stated on above line)\nDAY LETTER\na. - - -\n2-14117\nMARCH 4 1942\nMRS FRANKLIN D ROOSEVELT\no/o SEATTLE POST INTELLIGENCER\nSEATTLE WASHINGTON\nWe missed you especially at the services this morning but were\nhappy that you could be with Anna. Wish all goes well with\nher. Hope you have good flight back. Our fondest love to\nyou all\nHENRY AND ELINOR\nRegraded Unclassified\n5\nANDARD FORM No. 14A\nTREASURY DEPARTMENT\nAPPROVED BY THE PRESIDENT\nWASHINGTON\nMARCH 10, 1926\nTELEGRAM\nCHARGE TREASURY DEPARTMENT, APPROPRIATION FOR\nOFFICIAL BUSINESS-GOVERNMENT RATES\nHenry Morgenthau Jr - Personal\n(The appropriation from which payable must be stated un above line)\nDAY LETTER\n. - - -\n2-14117\nMARCH 4 1942\nMRS FRANKLIN D ROOSEVELT\nc/o SEATTLE POST INTELLIGENCER\nSEATTLE WASHINGTON\nWe missed you especially at the services this morning but were\nhappy that you could be with Anna. Wish all goes well with\nher. Hope you have good flight back. Our fondest love to\nyou all\nHENRY AND ELINOR\nRegraded Unclassified\n6\nMarch 4, 1942\nNorman Thompson\nSecretary Morgenthau\nIn this report on Miss Anne Collins Boardman,\none of the things which she says she helped to\norganize is the Committee to Defend America.\nPlease find out what this Committee was, what it\nstood for and, if possible, what kind of literature\nit got out. I think it is very important to find\nout more details about that particular organization.\nSubmitted 3/6/42\nRegraded Unclassified\nMarch 4, 1942\nDear Mr. Barnard:\nYour telegram came as a real encourage-\nment, and I should like you to know how much I\nappreciate and value it. I think you can see\nthat we all benefited from the discussions\nwhich you initisted months ago.\nWe shall probably have 8 stiff fight on\nour hands with Congress, but I believe that the\ngood sense and patriotism of the American public\nwill be pushing toward the enactment of some\nsuch program as I outlined yesterday.\nwith best regards,\nSincerely,\n(Signed) 1. Morgenthau. 12.\nMr. Chester I. Barnard\n540 Broad Street\nNewark, New Jersey\nFK/hkb\nnmc.\n3/4/42\ncapies whempson\n3K-\nRegraded Unclassified\nE\nL\n8\nE\nG\nR\nA\nP\nH\n1942 MAR 4 AM 11 36 -\nT\nR\nE\nA\nS\nin 16 12\nU\nR\nNK NEWARK NJ MAR 4 1034A\nY\nHENRY MORGENTHAU JR\nT\nE\nSECRETARY OF TREASURY\nL\nE\nG\nINTERESTED AND GREATLY PLEASED WITH YOUR MESSAGE TO\nR\nA\nCOMMITTEE YESTERDAY. PROGRAM SEEMS TO ME SOUND AND\nP\nH\nPHASTICABLE. CONGRATULATIONS\nT\nCHESTER I BARNARD.\nR\n1127A.\nE\nSincer und 540 proof A.\nU R\nRegraded Unclassified\nSUBT - - SENATER - - -\n9\nMINART L - REPRESENTATIVE - - - VIIIA -\nstrate\n- -\nTER a - - -\n- . CALLIR - now -\net e. was - touth - -\nallew t. TREASMAT, - MASSACHUSETT\nCongress of the United States\n- ELASTER -- -\nname CARROL FROM -\nJOINT COMMITTEE ON REDUCTION OF NONESSENTIAL\n- BILLAR - TERMONO\nGIFTAN & - REPRESENTATIVE - -\nFEDERAL EXPENDITURES\nwas A and serves now - -\n- TAMEL REPRESENTATIVE FORM - -\nCREATED PURSUANT TO SEC. 401, OF THE REVENUE\nEUROS a. HOSTLEY of THE\nMMILE 9. tarra. - 1 - of THE GRUT\nACT OF 1941\nMarch 4, 1942 r\nHon. Henry Morgenthau, Jr.\nThe Secretary of the Treasury\nWashington, D. C.\nMy dear Mr. Secretary:\nAs the Senate Finance Committee will meet\ntomorrow in the Finance Committee room, and, as\nthe Todd Shipyards Corporation has requested more\ntime to prepare the information asked for, the\nmeeting of the Joint Committee on Reduction of\nNonessential Federal Excenditures, scheduled for\nThursday, March 5, has been postponed for several\ndays.\nYou will be notified at. a later date.\nwith best wishes, I am\nFaithfully yours,\nHany Chairman t. Bym\nRegraded Unclassified\n10\nMarch 4, 1942\nTO:\nMr. Sullivan\nFROM: The Secretary\nIn answer to your memorandum of March 4,\nI am delighted to know that you have put into effect\nseven of the eight suggestions. I am more than\nwilling to accept your suggestion and drop the eighth.\n11\nENORANQUM\narch 4, 1942.\nDO:\nThe Secretary\nFROM:\nIr. Sullivan\nIts\nSUBJECT: Tax Publicity.\nOn February 26th I submitted E additional tax\nmilicity projects which you approved. I wish to report\nthat 7 of these have slready been executed. The 8th,\n\"a Treasury statement urging employers to give employees\ntime off to file their returns\", has not been done. Upon\nreconsideration, 1r. Cann, Kr. Callahan and I felt that\nwille there is 80 much criticism in the news apers about\nwork stoppages the public reaction to such a statement as\nme hed proposed would be had. Do you approve?\nRegraded Unclassified\nMarch 4, 1942.\n12\nSTATUTORY DEBT LIMITATION\nAS OF FEBRUARY 28, 1942\nSection 21 of the Second Liberty Bond Act, as amended, provides\nthat the face amount of obligations issued under authority of that\nAct, \"shall not exceed in the aggregate $65,000,000,000 outstanding\nat any one time.\"\nThe following table shows the face amount of obligations out-\nstanding and the face amount which can still be issued under this\n[imitation:\nTotal face amount that may be\noutstanding at any one time\n$65,000,000,000\nOutstanding as of February 28, 1942:\nInterest-bearing:\nBonds -\nTreasury\n$35,912,029,400\nSavings (Maturity\nvalue)'\n9,674,147,950\nDepositary\n72,436,000\nAdjusted Service\n731,634,706\n$46,390,248,056\nTreasury notes\n12,145,729,175\nCertificates of\nindebtedness\n2,941,800,000\nTreasury bills\n(maturity value)\n2,001,743,000\n17,089,272.175\n$63,479,520,231\nMatured obligations, on\nwhich interest has ceased\n114,592,000\n63,594,112,231\nFace amount of obligations\nissuable under above authority\n$ 1,405,887,769\nReconcilement with Daily Statement of the United States Treasury\nFebruary 28, 1942\nTotal face amount of outstanding public debt obligations\nissued under authority of the Second Liberty Bond Act,\n88 amended\n$63,594,112.231\nDeduct, unearned discount on Savings bonds (difference\nbetween current redemption value and maturity value)\n1,780,767,691\n61,813,344,540\nAdd other mublic debt obligations outstanding but not\nsubject to the statutory limitation:\nInterest-beering (Pre-War, etc.)\n$ 195,990,180\nMatured obligations on which interest\nhas ceased\n11,519,665\nBearing no interest\n359,650,781\n567,160,626\nTotal gross debt outstanding as of February 28, 1943\n$62,380,505,166\nApproximate maturity value. Principal amount (current redemption value)\naccording to preliminary public debt statement $7,893,380,259.\n30-56\n-000-\nRegraded Unclassified\nUNITED STATES SAVINGS BONDS\nComparative Statement of Sales During\nFirst Two Dusiness Days of March, February and January 1942\n(March 1-3, February 1-3, January 1-2)\n(On Basis of Issue Price)\n(Amounts in thousands of dollars)\n:\n1\nAmount of Increase\n: Percentage of Increase\n:\nSales\n:\nor Decrease (-)\n:\nor Decrease (-)\nItem\n:\n:\n:\n:\nMarch\n:\nFebruary\n:\nMarch\n:\nFebruary\n:\nMarch\n: February\n:\nJanuary\n:\nover\n:\nover\n:\nover\n:\nover\n2\n2\n:\n:\nFebruary\n:\nJanuary\n:\nFebruary\nI\nJanuary\nSeries 1 - Post Offices\n* 8,786\n$12,006\n$ 8,784\n-$ 3,220\n$ 3,222\n- 26.8%\n36.7%\nSeries E - - Banks\n24,327\n42,037\n20,964\n- 17,710\n21,073\n- 42.1\n100.5\nSeries 1- - Total\n33,112\n54,044\n29,749\n- 20,932\n24,295\n- 38.7\n81.7\nSeries 1- Banks\n3,672\n8,984\n4,021\n- 5,312\n4,963\n- 59.1\n123.4\nSeries G - Banks\n17,506\n39,313\n15,384\n- 21,807\n23,929\n- 55-5\n155.5\nTotal\n$54,290\n$102,341\n$49,153\n-$48,051\n$53,188\n- 47.0%\n108.26\nOffice of the Secretary of the Treasury, Division of Research and Statistics.\nMarch 4, 1942.\nSource: All figures are deposits with the Treasurer of the United States on account of proceeds\nof sales of United States savings bonds.\nNote: Figures have been rounded to nearest thousand and vill not necessarily add to totals.\nRegraded Unclassified\nUNITED STATES SAVINGS BONDS\nDaily Sales - - March, 1942\nOn Basis of Issue Price\n(In thousands of dollars)\nPost Office\nBank Bond Sales\nAll Bond Sales\nBond Sales\nDate\nSeries 1\nSeries I\nSeries 7\nSeries G\nTotal\nSeries E\nSeries 1\nSeries G\nTotal\nMarch 1942\n2\n$ 5,811\n$ 15,868\n$ 2,043\n$ 8,726\n$ 26,636\n$ 21,678\n$ 2,043\n$ 8,726\n$ 32.447\n3\n2,975\n8,459\n1,629\n8,750\n18,868\n11,434\n1,629\n8,780\n21,843\nTotal\n$ 8,786\n$ 24,327\n$ 3,672\n$ 17,506\n$ 45,504\n$ 33,112\n$ 3,672\n# 17,506\n$ 54,290\nOffice of the Secretary of the Treasury, Division of Research and Statistics.\nMarch 4. 1942.\nSource: All figures are deposits with the Treasurer of the United States on account of proceeds of\nsales of United States savings bonds.\nNote: Figures have been rounded to nearest thousand and will not necessarily add to totals.\nRegraded Unclassified\nNumber of agents in Other Corporations and Investment Industry\nqualified to issue Series 3 Savings Bonds, by Federal Re-\nserve districts - January 10 to date.\n1\nI\n#\n1\nI\n2\n:\nI\n-\nI\nI\nCleveland\nDallas\nKansas\n:\nI\n:\nDate\nAtlanta\nBoston\nChicago\nI\nMinne-\nNew\n:\nPhila-\n:\nRichmond\n:\nSan Fran-\nCity\nSt. Louis\napolis\n:\nYork\n:\nTotal\ndelphia\ncisco\nOther Corporations\nJan. 10\n4\n-\n8\n-\n-\n-\n-\n-\n-\n-\n-\n17\n-\n12\n27\n12\n-\n-\n1\n-\n-\n4.\n65\n8\n-\n24\n15\n2\n61\n1\n118\n22\n13\n-\n1\n21\n83\n15\n4\n31\n17\n14\n3\n240\n90\n28\n27\n1\n3\n32\n101\nFeb.\n19\n8\n7\n20\n11\n19\n115\n33\n42\n351\n5\n3\n41\n124\n23\n14\n14\n18\n23\n22\n151\n40\n49\n457\n9\n3\n46\n135\n27\n21\n23\n27\n170\n43\n15\n32\n552\n53\n14\n3\n53\n148\n27\n28\n37\n198\n44\n18\n23\n16\n35\n614\n58\n4\n55\n159\n30\n21\n41\n686\nInvestment Industry\nJan. 24\n-\n-\n5\n-\n-\n2\n-\n1\n-\n2\n.\n31\n.\n10\n10\n-\n-\nW\n-\n2\n-\n7\n,\n6\n7\n-\n-\n13\n6\n1\n8\n-\n2\n37\n,\n9\n-\n14\n-\n6\n7\n3\n8\n.\n15\n48\n3\n2\n-\n10\n-\n7\n21\n3\n8\n17\n7\n54\n-\n-\n3\n2\n-\n14\n-\n28\n1\n17\n7\n.\n7\n3\n2\n-\nwas\n3\n8\n14\n61\n-\n8\n3\n8\n63\n1/\nOther Corporations authorized as of December 27. 1941 and Investment Industry as of January 17. 1942.\nRegraded Unclassified\nDaily changes in the stock of Series E savings bonds on hand 1/\n(In thousands of pieces)\n: Number of : Number of pieces : Stock on hand :\nIBM\n:pieces sold :\nmanufactured\n:\nat close of\n:\ndeliveries\n: this day\n:\nthis day\n:\nday\n:\nthis day\nFeb. 23\n214\n800\n21,905\n-\n24\n55\n800\n22,650\n1,600\n25\n104\n800\n23,346\n700\n26\n158\n800\n23,988\n875\n27\n240\n800\n24,548\n660\n28\n162\nnone-closed\n24,386\n-\nMar. 1\nnone-closed\nnone-closed\n24,386\n-\n2\n304\n500\n24,582\n-\n3\n160\n500\n24,922\n625\nOffice of the Secretary of the Treasury,\nMarch 4, 1942\nDivision of Research and Statistics.\n1/ Includesstock in hands of (1) Federal Reserve Banks and branches, (2) Post\noffices, (3) Federal Reserve Bank issuing agents, and (4) Treasury vaults\nin Washington.\nRegraded Unclass\n17\nTREASURY DEPARTMENT\nINTER OFFICE COMMUNICATION\nDATE March 4, 1942.\nTO\nSecretary Morgenthau\nFROM George Buffington G.D.\nThe following list shows \"The New Spirit\" bookings\nfor the week ending March 1, 1942, and the total to date.\nAlbany\n22\nAtlanta\n118\nBoston\n94\nBuffalo\n53\nCharlotte\n70\nChicago\n121\nCincinnati\n96\nCleveland\n55\nDallas\n85\nDenver\n23\nDes Moines\n22\nDetroit\n96\nIndianapolis\n60\nKansas City\n54\nLos Angeles\n77\nMemphis\n62\nMilwaukee\n40\nMinneapolis\n56\nNew Haven\n20\nNew Orleans\n48\nNew York\n126\nOklahoma City\n55\nOmaha\n47\nPhiladelphia\n122\nPittsburg\n107\nPortland\n30\nSt. Louis\n93\nSalt Lake City\nSan Francisco\n51\nSeattle\n40\nWashington, D.C. 64\nTotal Week Ending\nMarch 1, 1942 ##\n2007\nGrand Total Week Ending\nFebruary 22, 1942\n5757\nGrand Total Week Ending\nMarch 1, 1942 ##\n7764\n**Salt Lake City report not included.\n18\nASSISTANT SECRETARY OF THE TREASURY\nMarch 4, 1942.\nMEMORANDUM\nTo:\nSecretary Morgenthau\nFrom: Mr. Gaston\nJohnson and Dow, of Customs, have been\nin conference yesterday and today with the\nBudget, Captain Gorman of the Coast Guard\nand Commander Field of the Bureau of Naviga-\ntion as to our absorption of a part of the\nwork of that Bureau, which is the part for\nwhich Collectors of Customs have been the\nfield agents, that is, the entry, clearance\nand documentation of ships. Customs is to\ntake over 34 men in Washington and none in the\nfield. Among the 34 is Captain Sweet, who is\nthe specialist on navigation regulations and\ndocumentation. Another is a lawyer who will\nbe assigned to the General Counsel's staff.\nThe matter of physical space is a problem\nboth for Customs and Coast Guard, but we are\n& temporary arrangement under which\nall of the men assigned to us\nwould remain in their present quarters in\nthe Commerce Building for several months.\nThey have a serious problem in reorganization\nand separation of their files.\nNB\nRegraded Unclassified\n19\nOFFICE OF LEND-LEASE ADMINISTRATION\nMAI\n1942\nFIVE-FIFTEEN 22d STREET NW.\nWASHINGTON. D.C.\nE. R. Stettinius, Jr.\nAdministrator\nMarch 4, 1942\nMEMORANDUM\nTo:\nThe Honorable Henry Morgenthau\nFrom:\nE. R. Stettinius, Jr.\nSubject: Executive Reports\nTransmitted herewith, for your\ninformation, are copies of the latest\nExecutive Reports on Lend-Lease opera-\ntions.\nAttachment\nRegraded Unclassified\n20\nCONFIDENTIAL\nExecutive Report No.1\nOffice of Lend-Leose Administration\nSTATEMENT OF ALLOCATIONS AND OBLIGATIONS\nWeekly Report as of February 28, 1942\nAdjusted\nAllocations\nObligations\nAppropriation Category\nAppropriations\nFeb. 28, 1942\nFeb. 28, 1942\nFeb. 23, 1942\nFeb. 23, 1942\nIrdnance and Ordnance Stores\n$ 2,026,454,289\n$ 1,993,354,681\n$ 1,293,354,681\n$1,304,549,015\nAircraft and Aero. Material\n2,877,000,000\n2,838,204,353\n2,837,956,698\n2,298,982,150\nTanka and Other Vehicles\n971,100,000\n959,051,249\n959,051,249\n572,967,420\nVessels and Other Watercraft\n1,675,280,100\n1,663,858,450\n1,663,858,450\n1,240,631,540\nMisc. Vilitary Equipment\n466,500,000\n457,327,106\n457,323,631\n132,587,034\nProduction Facilities\n1,051,313,824\n1,041,585,513\n1,041,585,513\n676,276,087\nAgrio, and Indust. Commod's\n3,266,381,887\n2,734,868,301\n2,734,012,401\n1,721,052,855\nServicing Repair of Ships, etc.\n305,469,900\n296,947,333\n296,947,333\n194,686,284\nServices and Expenses\n312,500,000\n278,476,944\n277,956,520\n81,159,767\nAdministrative Expenses\n20,000,000\n8,333,352\n8,083,352\n3,238,120\nTotal\n$12,972,000,000\n$12,272,007,282\n$12,270,129,828\n$8,226,130,272\nAdjusted\nAllocations\nObligations\nProcuring Agency\nLimitations\nFeb. 28, 1942\nFeb. 28, 1942\nFeb. 23, 1942\nFeb. 23, 1942\nWar Department\n8 6,656,977,280\n8 6,589,985,169\n$ 6,589,453,020\n$4,379,618,142\nNavy Department\n2,663,921,469\n2,613,220,753\n2,613,061,348\n1,665,660,676\nMaritime Commission\n1,143,068,100\n1,127,296,500\n1,127,296,500\n931,892,111\nTreasury Department\n932,901,774\n931,992,840\n931,136,940\n571,341,068\nDepartment of Agriculture\n1,518,040,076\n1,008,312,076\n1,008,312,076\n676,934,780\nOther\n1,199,944\n1,199,944\n869,944\n683,495\nTotal\n$12,916,108,643\n$12,272,007,282\n$12,270,129,828\n$8,226,130,272\nFunda for freight and other necessary charges are not included in obligations.\n'THIS DOCUMENT CONTAINS INFORMATION AFFECTION FM NATIONAL DEFERER OF 2.00 CRITES STATES #ITHIN en DE THE EXPIO-\nFACE ACT, U.S.C. se, 11 AND 11. TEI TRANSMISSION - FM REVELATION OF 378 CONTONYA 10 487 MIDE 10 AF MB-\nTON 18 PROVISIVED BY\nRegraded Unclassified\n21\nCONFIDENTIAL\nLEND-LEASE FUNDS\nTOTAL\nWAR DEPARTMENT\n(Mittions)\n(Millions)\n20,000\n7,000\nPROGRAM LIMITATION\nALLOCATIONS\n6,000\n16,000\nProcurement\nAuthorizations\n5,000\nAPPROPRIATIONS\n12,000\nALLOCATIONS\n4,000\nProcurement\nAuthorizations\nOBLIGATIONS\n3,000\n8,000\n2,000\nOBLIGATIONS\n4,000\nEXPENDITURES\n1,000\nEXPENDITURES\no\no\nSes Oct Nov Dec Jan Feb Mor Apr May Jun Jul Aug Sep\nSep Oct Nov Dec Jon Feb Mar Apr May Jun Jul Aug Sep\n(94)\n1942\n1941\n1942\nNAVY DEPARTMENT\nMARITIME COMMISSION\n(Millions)\n(Millions)\n$\n3,500\n2,500\n3,000\n\"PROGRAM LIMITATION\n2,000\n2,500\nALLOCATIONS\n1,500\n2,000\nProcurement\nAuthorizations\nPROGRAM LIMITATION\nALLOCATIONS\n1,500\n1,000\nProcurement\nOBLIGATIONS\nAuthorizations\n1,000\nOBLIGATIONS\n500\n500\nEXPENDITURES\nEXPENDITURES\no\no\nSea Oct Nov Dac Jon Feb Mar Apr May Jvn Jul Aug Sep\nSep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep\n1941\n1942\n1941\n1942\nTREASURY DEPARTMENT\nDEPT. OF AGRICULTURE\n(Millinns)\n(Millions)\n$\n$\n3,500\n2,500\n3,000\n2,000\n2,500\n1,500\n2,000\n1,500\nPROGRAM LIMITATION\nALLOCATIONS\n1,000\nProcurement\nPROGRAM LIMITATION\nALLOGATIONS\nAuthorizations\n1,000\nProcurement\nOBLIGATIONS\n500\nAuthorizations\n500\nOBLIGATIONS\nEXPENDITURES\nEXPENDITURES\no\no\nSep Oct Nov Dec Jes Feb Mar Apr May Jun Jul Aug Sep\nSep Oct Nov Dat jan Feb Mar Apr May Jun All Aug Sep\n1941\n1942\n1941\n1942\nExcludes reserve of $500,000,000\nOffice of Lend-Laose Administration - March 3, 1942\nRegraded Unclassified\nTOTAL AMOUNT OF FUNDS OBLIGATED\nCONFIDENTIAL\nIN EACH WEEKLY PERIOD\nMillions of Dollars\n500\n500\n400\n400\n300\n300\n200\n200\n100\n100\n0\no\nOct\nNov\nDec\nJan\nFeb\nMor\n1941\n1942\nAMOUNT OF FUNDS OBLIGATED, BY WEEKLY PERIODS\nThousands of Dollars\nJan. 24-31\nFeb. 1-8\nFeb. 9-15\nFeb. 16-23\nAPPROPRIATION CATEGORY\nOrdnance and Ordnance Stores\n100,255\n21,087\n7,921\n43,017\nAircraft and Aero. Material\n29,139\n51,075\n197,696\n68,407\nTanks and Other Vehicles\n48,720\n24,210\n8,261\n16,632\nVessels and Other Watercraft\n12,999\n13,619\n8,142\n45,701\nMisc. Military Equipment\n13,872\n9,814\n4,201\n5,008\nProduction Facilities\n13,608\n9,739\n61,305\n16,965\nAgric. and Indust. Commod's\n130,864\n75,909\n83,198\n61,726\nServicing, Repair of Ships, etc.\n31\n4,427\n1,215\n3,433\nServices and Expenses\n4,068\n16,877\n7,585\n8,517\nAdministrative Expenses\n89\n185\n179\n111\nTotal\n353,645\n226,942\n379,703\n269,517\nPROCURING AGENCY\nWar Department\n204,084\n132,155\n306,254\n161,763\nNavy Department\n51,457\n13,669\n19,092\n28,204\nMaritime Commission\n12,343\n27,609\n608\n60,232\nTreasury Department\n34,729\n53,470\n36,854\n19,313\nDepartment of Agriculture\n50,989\n30\n16,855\n5\nOther\n43\n9\n40\n-\nTotal\n353,645\n226,942\n379,703\n269,517\nOffice of Lend-Lease Administration\nRegraded Unclassified\n23\nTREASURY DEPARTMENT\nMAR 5 1942\nPROCUREMENT DIVISION\n95\nOFFICE OF THE DIRECTOR\nWASHINGTON\nMarch 4, 1942\nTothe Searty\n20 a STOPS:\n3/5/42\nThe peconciliation of Allocations as shown on\nLa Decretory's report 10\" Vebruary 28, 1042, and the\nitem satitled, \"Deguisitioned\" on Submary sust is as\nfollows:\nIlecations new constrer's Report $752,027,529.\nevalsitions per Emoinse Tasti-\nCication Report 406,480,938\ndid:\nmistributed Allo-\ncations\n125,007,582\nAdministrative\nSIV,209\niscellanoous\n6,000\n382,022,539.\nstator's. of Producement Month Inck\nFORDEFENSE\nBUY\nUNITED\nSTATES\nWALFAGE\nBuyes\n-\nRegraded Unclassified\n24\nSUBMARY SHEET\nTREASURY DEPARTMENT. PROCUREMENT DIVISION\nLEND LEASE PROGRAM\nSTATUS REPORT AS OF CLOSE OF BUSINESS FEBRUARY 28, 1942\nTotal\nUnited\nAll Countries\nKingdom\nRussia\nChina\nOther\n1. Requisitioned- (by dollar amount)\n$805,430,738\n$587,604,057\n$157,784,089\n$57,159,310\n$2,883,282\n(Allocations and Recommendations)\n(Exclusive of Administrative and\nContingent Expenses and Special Fund)\n2. Obligated-- (by dollar amount)\n600,175,590\n459,405,549\n104,197,681\n34,390,155\n2,152,205\n(Contracts and Commitments)\n3. Delivered-- (by dollar amount)\n210,444,050\n185,855,110\n12,284,559\n12,133,945\n170,436\n(To Foreign Government Representative)\nL. Undelivered Belance-- (by dollar amount)\n389,731,540\n273,580,439\n91,913,122\n22,256,210\n1,981,769\n(2 less 3)\n5, Scheduled-(by dollar amount)\n213,807,722\n166,328,796\n41,313,393\n6,064,474\n101,059\n(By Months, BE Followo:)\n1942:\nMarch\n75,826,619\n61,732,024\n10,690,527\n3,309,661\n94,407\nApril\n35,534,094\n28,266,090\n6,096,534\n1,164,818\n6,652\n19,906,694\n7,375,344\n819,822\n-\nMay\n28,101,860\nJune\n31,101,913\n19,397,972\n11,248,046\n453,895\n-\nJuly\n10,372,612\n8,735,296\n1,431,136\n206,180\n-\nAugust\n8,615,875\n7,184,611\n1,393,301\n37,963\n.\nSeptember\n9,178,497\n7,954,897\n1,187,661\n35,939\nI\nOctober\n4,181,268\n3,570,941\n578,144\n32,183\n,\n425,118\n-\nNovember\n3,529,404\n3,103,071\n1,215\nDecember\n5,062,321\n4,520,819\n538,704\n2,798\n-\nSubsequent to December\n2,303,259\n1,954,381\n348,878\n-\n-\nTex\nUnscheduled-- (by dollar amount)\n148,504,470\n90,405,934\n44,003,081\n13,095,199\n1,000,256\n(Delivery Schedule being Developed)\n7. Revised Schedule-- (by dollar amount)\n27,419,348\n16,845,709\n6,596,648\n3,096,537\n880,454\n146+7+4) -\nTREASURY DEPARTMENT. PROCUREMENT DIVISION\nLOD LEASE PROGRAM\nCHIMA--BIPORC BY COMMODITIES AS or THE CLOSE OF DUSINESS FEBRUARY 28, 19/2\n£\nL\nI\n2\n2\ng\nAmunition,\nL\nCommunications\nMiscellaneous\nExplosives,\n(Snall Aras)\nAmmunition\nOrdnance\nEquipment and\nA\nMilitary\nNaval and\nPyrotechnice\nEtc., Grenades\n(Other Than\nof\nWaterial\nSpecial\nEquipment,\nUnritime\nand Chemical\nand Anti-Tank\nScall Arms)\n(Other Than\nTotal\nAircraft\nFilitary\nWarfare Items\nSupplies\nEquipment\nMines\nServicing\nand Etc.\nVehicles)\nDevices\nand Naterial\nand Supplies\n(Non-Caritis)\n1. Requisitioned--(by dollar amount)\n$57,159,310\n(Allocations and Recommendations)\n(Exclusive of Administrative and\nContingent Expenses and Special Fund)\n2. Obligated--(by dollar amount)\n34,390,155\n$ -\n$142,875\n$54,000\n$51,825\n(Contracts and Commitments)\n$3,162,088\n$ -\n$3,568,949\nI .\n$ -\n3. Delivered--(by dollar amount)\n12,133,945\n-\n5,375\n-\n51,825\n1,517,215\n-\n3,546,550\nI\n(To Foreign Government Representative)\n-\n4. Undelivered Belance--(by dollar amount)\n22,256,210\n-\n137,500\n54,000\n-\n1,644,873\n-\n(2 lass 3)\n22,399\n-\n.\na\n5. Scheduled--(by dollar amount)\n6,064,474\n-\n37,500\n-\n-\n1,303,415\n-\n48,680\n-\n-\n(By Months, as Follows:)\n1942:\nMarch\n3,309,661\n-\n37,500\n-\n.\n526,911\n-\n32,000\n-\n-\nApril\n1,164,818\n-\n-\n-\n.\n388,751\n-\n16,680\n-\n-\nMay\n819,822\n-\n-\n-\n-\n89,036\n-\n-\n#\n-\nJune\n453,895\n-\n-\n.\n-\n64,736\n-\n-\n-\n,\nJuly\n206,180\n-\n-\n-\n-\n159,866\n-\n-\n-\n-\nAugust\n37,963\n-\n-\n-\n-\n24,300\n-\n-\n-\n-\nSeptember\n35,939\n-\n-\n-\n-\n24,300\n-\n-\n-\n#\nOctober\n32,183\n-\n-\n-\n-\n24,300\n-\n,\n-\n-\nNovember\n1,215\n-\n-\n-\n-\n1,215\n-\n-\n-\n-\nDecember\n2,798\n-\n-\n-\n-\n.\n#\n-\n-\n-\nSubsequent to December\n-\n-\n-\n-\n-\n.\n#\n,\n-\n-\n6. dollar ascunt)\n13,095,199\n.\n5,375\n54,000\n-\n242,801\n-\n69,324\n-\n-\n(Delivery Schedule being Developed)\n7. Revised Schedule-(by dollar amount)\n3,096,537\n-\n94,625\n-\n-\n98,657\n-\nCr. 95,605°\n-\n-\n(546+7=4)\n. Delivered In Advance of Schedule.\nRegraded Inclassified\nEl\n2.\nI\nI\nZ\nAgricultural\nY\nFuels and\nMachine Tools.\nMachinery\nFoodstuffs\nMaterials and\nChemicals Not\nEtc.,\nand Farts\nMiscellaneous\n=\nand\nProducts Not\nMisewhere\nFor Export\n(Agricultural\nMachinery\nRelated\nElsewhere\nClassified\n(Metal Lorking)\nTractors)\nand Farts\nMetals\nProducts\nClassified\n$8,589,744\n$399\n$ -\n$3,147,720\n$15,085,728\n$5,580\n$581,247\n2,552,082\n399\n-\n459,673\n3,720,342\n5,580\n274,904\n6,037,662\n-\n-\n2,688,047\n11,365,385\n-\n306,344\n357,780\n-\n-\n247,993\n3,858,706\n-\n210,400\n237,041\n-\n-\n74,765\n2,317,871\n-\n83,573\n86,277\n-\n.\n38,588\n632,657\n-\n1,865\n11,850\n.\n-\n96,827\n620,660\n-\n1,449\n9,825\n.\n.\n10,273\n255,353\n-\n113,708\n713\n-\n.\n9,366\n30,137\n-\n6,098\n7,012\n-\n-\n5,914\n737\n-\n-\n4,050\n-\n-\n6,852\n737\n-\n-\n1,013\n.\n-\n2,611\n553\n-\n3,706\n-\n.\n-\n-\n-\n-\n-\n-\n-\n-\n2,798\n-\n-\n-\n-\nI\n-\n-\n-\n-\n-\n5,094,221\n-\n-\n2,440,054\n5,093,480\n-\n95,944\n585,661\n.\n-\n2,413,199\n-\nTREASURY DEPARTMENT. PROCUREMENT DIVISION\nLDD LEASE PROGRAM\nRUSSIA--REPORT 31 COMMODITIES AS or THE CLOSE OF BUSINESS FEBRUARY 28, 19/2\nE\nIf\n2\nI\n₽\n&\nLast\nAmmunition,\nCommunications\nMiscellaneous\nExplosives,\n(Small Aras)\nAmmition\nOrdrance\nEquipment and\nVilitary\nNaval and\nof\nPyrotechnics\nStc., Grenales\n(Other Than\nMaterial\nSpecial\nEquipment,\nMaritine\nand Chemical\nand Anti-Tank\nScall Arms)\n(Other Than\nFilitary\nSupplies\nEquipment\nServicing\nTotal\nAircraft\nWarfare Items\nKines\nand Etc.\nVehicles)\nDevices\nand Vaterial\nand Supplies\n(Son-Maritine)\n1. Requisitioned=-(by dollar mount)\n$157,784,089\n(Allocations and Recommendations)\n(Exclusive of Administrative and\nContingent Expenses and Special Fund)\n2. Obligated--(by dollar anount)\n104,197,681\n$126,878\n$209,925\nil -\nI -\n$2,145,771\n$252,876\n$9,489,136\n$\n$\n(Contracts and Commitments)\n3. Delivered--(by dollar amount)\n12,284,559\n-\n-\n-\n-\n-\nI\n-\n-\n-\n(To Foreign Government Representative)\n4. Undelivered Balance--(by dollar amount)\n91,913,122\n126,878\n209,925\n-\n-\n2,145,771\n252,876\n9,489,136\n-\n,\n(2 less 3)\n5. Scheduled-(by dollar amount)\n41,313,393\n63,439\n71,025\n-\n-\n1,182,19\n108,850\n3,478,706\n-\n-\n(By Months, as Follows:)\n1942:\nMarch\n10,690,527\n-\n71,025\n-\n-\n9,532\n108,850\n70,575\nall\n#\nApril\n6,096,534\n-\n-\n-\n-\n9,532\n-\n319,350\n-\n-\nMay\n7,375,344\n-\n-\n-\n-\n333,888\n-\n574,595\n-\n.\nJune\n11,248,046\n-\n-\n-\n-\n279,082\n-\n1,623,816\n-\n.\nJuly\n1,431,136\n-\n-\n-\n-\n109,429\n-\n278,620\n-\n.\nAugust\n1,393,301\n63,439\n-\n1\n-\n229,818\n-\n-\n-\n-\nSeptember\n1,187,661\n-\n-\n-\n-\n-\n-\n320,250\n-\n-\nOctober\n578,144\n-\n-\n-\n-\n-\n-\n220,500\n-\n-\nNovember\n425,110\n-\n-\n-\n-\n76,100\n-\n35,500\n-\n.\nDecember\n538,704\n-\n-\n-\n-\n54,975\n-\n35,500\n-\n-\nSubsequent to December\n348,870\n-\n-\n-\n-\n-\n-\n.\n-\n-\n5. Unacheduled--(by dollar amount)\n44,003,081\n63,439\n52,650\n-\n-\n886,351\n36,176\n6,010,430\n-\n-\n(Delivery Schedule being Developed)\n7, Revised Schedule-(by dollar amount)\n6,596,648\n.\n86,250\n-\n-\n77,001\n109,550\n-\n-\n(0+6+7+4)\n26\nE\n§\nI\nI\n2\nAgricultural\nI\nFuels and\nMachine Tools,\nEachinery\nFoodstuffs\nMaterials and\nChemicals Not\nStc.,\nand Parts\nMiscellaneous\n1\nand\nProducts Lict\nEleewhere\nFor Export\n(Agricultural\nMachinery\nRelated\nElsewhere\nClassified\n(Vetal Working)\nTractors)\nand Parts\nMetale\nProducts\nClassified\n#\n-\n$673,790\n$ -\n$15,529,720\n$74,403,468\n$ -\n$1,366,117\n-\n-\n-\n91,219\n12,157,237\n.\n36,103\nY\n673,790\n-\n15,438,501\n62,246,231\n-\n1,330,014\n-\n620,939\n-\n5,989,933\n29,185,988\n-\n612,094\n-\n76,733\n-\n472,262\n9,719,962\n-\n161,588\n-\n45,787\n-\n675,562\n4,931,923\n-\n114,380\n-\n58,602\n-\n1,051,762\n5,355,097\n-\n1,400\n-\n156,784\n-\n363,399\n8,499,471\n-\n325,494\n-\n12,930\n-\n721,479\n219,386\n-\n9,232\n-\n101,403\n-\n624,267\n374,374\n-\n-\n-\n168,700\n.\n639,245\n59,466\n-\n-\n#\n-\n.\n354,067\n3,577\n-\n-\n-\n-\n-\n309,941\n3,577\n-\n-\n-\n-\n-\n444,650\n3,576\n-\n-\n-\n-\n-\n333,299\n15,579\n-\n-\n-\n52,851\n-\n6,149,308\n30,720,871\n-\n33,005\n-\n3,299,260\n2,339,372\n-\n684,915\n27\n27\nwas received\n- MAIL\n- III All or DI CLIBE a - N. 1942\nI\n:\n4\n1\na\na\nI\n.\n-\nas\n:\nI\n1\nCommention\nInform,\nI\nUsell kmi\n-\nOrbane\nReplicant and\nBilliary\nSami and\ni\nhele -\nPentize Twile,\nFontatuffe\nNaturials -\n4.\nMr., Greater\n(Dther The\nExterial\nSydpent,\nBaritize\n-\nBe.,\n- Parte\nI\n-\nIntire 141\nel\net\nhall 4m)\nDate These\nWilliary\nSupplies\nSpipment\nServicing\nContain\nFor ligert\nSuchinery\nSelected\nCombers\nAirent\nName Time\nthe\nend Bu.\nand Beterial\nand Supplies\nBotal\n- Parta\nSetails\nProducts\nClassified\n1. - - -\n-\n- así -\nd' -\n- - has\nH\n- filler -\n-\nI\n-\n-\n-\nA.R\n-\nmust\n2,2,2\n-\n$1,000,00\n-\n- - -\n- -\nuse\n-\n-\n-\n-\nuse\n--\n%\nUNE\n--\n7,348,517\n127,135,30\n-\nI I 2\nave abe -\n-\n20,000.00\n#\n#\n-\n-\n--\n-\n57,29\n1,000\n-\n14,000.00\n- Ce -\n--\nWE\n-\n-\n-\n-\nà\nVICE\n-\nVA\n30.00\n1,000\nI\nMW\n- - 12ml\nNA\n-\n-\n-\n--\n-\n5\n-\n---\n-\n-\n=\n-\n-\n-\n#\n-\n-\n-\n7,70\n=\n1,000\nP.O.\n1,000.00\n-\nwas\nJ.M\n20,50\n-\n-\n=--\n-\n---\n5\nTAX\n-\n-\n&\n-\n-\n.\n-\n-\n-\n=\nE\nC/N\n1,356,75\n-\n---\n-\n--\n-\n3\nG\n-\n1\n-\n1,00,00\n400\n===\n-\n.\n3\n-\n%\n7,4\n-\n-\n-\n-\n-\n---\n-\n-\n1,00\n1,300,00\n-\n-\nMS\n-\n-\n=\n==\nminic\n57,36\n-\n-\n===\n0,70\n$\n---\n2/8\n30,00\n--\n-\n20,00\n-\n-\nI\n=,=\n9,%\n7,5\nFA\n26,00\nVIVE\n6\nI\n12\n5\n-\n-\n-\n-\n-\n-\n-\n-\n-\ndi\n-\n-\n7,36\n=\n-\n-\n-\n-\n-\n- -\n-\n-\n-\n-\n3\n-\n--\n-\n-\n-\n28\n28\nESTADOS name: DIVIRION\nLES STATE\n- If AT a 26. 1962\nE\n1\ni\n-\nI\na\na\n6\n#\n:\nI\na\nCommissione\nAgriestional\nExplorives,\n1\n(Inall Area)\nAmerition\nand\nfilltary\nFemal and\nil\nPails and\nEastine Taxis\nMateriale and\n&\nBr., Orenades\n(Dther Than\nReterial\ndoestal\nButtim\nCommission Ext\nthe\nand Parte\nI\nand\nProducts M.\nand Chested\nand Anti-Tack\nSmall ina)\n(Other Than\nFilitary\nSuppline\nEntral\nContain\n7vr Ixpert\nRelated\nTotal\nattents\nBartare Items\nEnee\nand Its.\nTakinles\nDevices\net Tatarial\nand Dipoline\nClassified\nWarking)\nPricters)\net Porta\nEstate\nProducts\nClassified\nL. dollar amail)\n2,30,282\nend Recommendation)\nof and\nContribut Expense and Special had)\n1, faller\n2,152,205\n.\n.\n-\n211,000\n.\n20.19\n-\n0.47\n10,8%\n-\n41,175,626\nHuntracts and\n1. - dollar accunt)\n170,06\n-\n-\n-\n.\n#\n-\n.\n-\n.\n170,36\nLTs Devement Representative)\n4. 4stier sanat)\n1,961,769\n-\n-\nI\n11,000\n-\n7,497\n0,0%\n1,905,190\n12 lass 32\n1. fallar and\n10,009\n-\n-\n.\n.\n12,500\nMAR\n-\n11,407\nBy Conths, M Follower)\nTREE\nand\n%.109\n-\n-\n-\n-\n3,00\n72,407\nand\nus\n-\n-\n.\n1,452\nExp\n-\n,\n.\n-\nà\n-\n-\n-\nHeat\n.\nTumber\n-\n-\nricher\n-\n-\n-vitter\n-\nmissing\n.\nи Secember\n1,000,256\na\n11,000\n.\ndellar -\n-\n135,507\nRLS\n11,0%\nThey being Developed)\ndellar\n600,114\n-\n125,152\nI\n-\n-\n155,30\n+ +7+4)\n29\nMAR 4.1942\nDear ET. McCormack:\nI am in receipt of your letter of March 2,\nenclosing a letter which you received from\nMelvin Silverman, ttorney, of Boston, Massachusetts.\nEnclosed is e copy of a letter which has been\nsent to Er. silverman, together with a copy of the\npress release referred to.\nSincerely yours,\n(Signed) 1. Mergonthau, Jr.\nsecretary of the Treasury\nEnclveures\nPress Release is\nBonorable John N. McCormack\nHouse of Representatives\nnmc\n30:61b 3/2/49\nThompson\nBy Messemer Manie\n340\nRegraded Unclassified\n30\nMarch 2, 1942\nHelvin silverman, Esq.\n10 State Street\nBeston, Massachusetts\nMy dear Mr. silvermant\nThe Honorable John W. McCormack has forwarded your\nletter of February 24th to me, in regard to the\nremoval of household goods from Washington by the\nProcurement Division of the Treasury Department.\nThere is some misunderstanding in regard to this\nsubject and I am enclosing herewith a press release\non the subject. The Procurement Division of the\nTreasury Department will be very glad to consider\nyou if you will write in and tell them something\nof your equipment and facilities to do this work.\nYours very truly,\nGerard Swope\nAssistant to the Secretary\nEnclosure\n05,blb\nRegraded Unclassified\nC\n0\n31\nP\nY\nMELVIN SILVERMAN\nAttorney and Counseller at Law\nTen State Street\nBoston, Massachusetts\nCapitol 7297\nFebruary 24, 1942\nCongressman John E. McCormick\nCongressional Office Building\nWashington, D. C.\nDear Sir:\n-\nAs my Representative in Congress, I urge\nthat you protest the action of the Procurement\nDivision in the Treasury Department in arranging for\nthe removal of household goods of Non-defense\nGovernment offices and employees through a private\norganisation (Traffic Service Department) of\nAmerican Trucking Associations, which does not\nrepresent the entire trucking industry and which\ndemands $60.00 a year as a condition for memberships,\nI insist that an investigation be made of the action\nof the Procurement Division in allotting contracts to five\n(5) companies through the Traffic Service Department\nat rates higher than are presently available to the\nGovernment, as an illustration of gross waste and\nintemperate spending. As a tax paying member of your\nstate and your constituent I urge immediate action\non my protest.\nVery truly yours,\n/s/ MELVIN SILVERMAN\nMS:MG\nRegraded Unclassified\n32\nTREASURY DEPARTMENT\nINTER OFFICE COMMUNICATION\nDATE March 4, 1942\nto\nSecretary Morgenthau\nFROM Gerard Swope\nMr. William P. Day came to me with an\nintroduction and recommendation from Tom K. Smith,\nPresident of The Boatmen's National Bank of\nSt. Louis. You may remember that I spoke to you\nabout it. This is simply for the record if you\nwish to consider him for some appointment at a\nlater date.\nMr. Day was born in Philadelphia in\n1887. He 1s single. He lived in St. Louis and\nwas educated there. He worked as an auditor in\nthe Third National Bank in St. Louis and later was\n8. dealer in municipal bonds. He was also Vice\nFresident of the Lambert Company of St. Louis.\nOther names and references that he has\ngiven, other than Mr. Smith, are:\nCerard B. Lambert, 78 Kalorama Circle,\nWashington, D. C.\nN. L. Hemingway, President\nMercantile Commerce Bank and Trust Co.\nSt. Louis, Missouri\nJohn R. Shepley, Vice President\nSt. Louis Union Trust Co.\nSt. Louis, Missouri\nLouis S. Brady, Vice President\nBankers Trust Co.\nNew York, New York\nHe also mentioned Eugene Sloan, to whom\nI have spoken, and who speaks very woll of him.\nus.\nRegraded Unclassified\n33\nMAR 4 1942\nMy dear Mr. Perkins:\nI am enclosing five copies of the\nreport on our exports to some selected\ncountries for the period February 11 to\nFebruary 20, 1942.\nSincerely yours,\n(Signed) R. Morgenthau, se.\nSecretary of the Treasury\nMr. Milo Perkins,\nExecutive Director,\nBoard of Meonomie Marfare,\n2501 Que Street, N. W.,\nWashington, D. C.\nEnclosures\nzme\nMaarie\n3:40\n2/25/42\nRegraded Unclassified\n34\nMAR 4 1942\nMy dear Colonel Donovan:\nI am enclosing copy of report on our\nexports to some selected countries for the\nperiod February 11 to February 20, 1942.\nSincerely yours,\n(Signed) 2. 4%\nSecretary of the Treasury\nColonel William J. Donovan,\nCoordinator,\nOffice of Coordinator of Information,\nold National Institute of Health Building,\n25th and E Streets, N. N.,\nWashington, D. C.\nEnclosure\nn.m.c\nBy Manie\n3.40\n2/25/42\nknow\nRegraded Unclassified\n35\nMAR 4 1942\nRy sear Mr. Secretary:\nI an ensleeing copy of report on our\nexporte to - selected countries for the\nperiod February 11 to February 20, 1942.\nSincerely yours,\n(Bigned) E. Mergenthau, Jr.\nSecretary of the Treasury\nthe\nSenerable,\nthe\nSecretary of State,\nWashington, D. C.\nInclude\nnine\nby Messemer Manus 40\n-\ndeuja Here\nRegraded Unclassified\n36\nMAR 4 1942\nMy dear Mr. President:\nI an enclosing report on our exports\nto some selected countries for the period\nFebruary 11 to February 20, 1942.\nFaithfully,\n(Signed) 1. Morgenthau. In.\nSecretary of the Treasury\nThe President,\nThe White House.\nEnelosure\nn.m.\n\" Dr white\nSecret dervicemenary\nHDW: meh\nBy Messenger 3:50\n2/25/42\nRet to Secipt office\nRegraded Unclassified\n32\nMarch 2, 1942\nExports to Ruasia, Free China, Burea and other\nblocked countries, as reported to the Treasury\nDepartment during the ton-day period ending\nFebruary 20, 1942.\n1. Exports to Russia\nReports to Ruasia, as reported to the Trassury during the\nton-day period ending February 20, 1942 amounted to more than\n26 aillion. Landplanes and military tanks and parts accounted\nfor care than one-haif. (See Appendix C.)\n2. Exports to Free China and Durma\nReports to Free China during the period under poview anounted\nto a, \"55 thousand. The principal items wore landplanes, motor\ntrucks and chassis and printed matter, (See Appendix D.)\nExports to Durma amounted to about 6585 thousand. Motor\nAppendix B.)\nthicks accounted for about one-third of this total. (See\n3. RADORTS to France\nNo exports to France were reported during the period under\nreview.\n4. Exports to other blocked countries\nExports to other blocked countries are Given in Appendix he\nRegraded Unclassified\n38\nSTRICTLY CONFIDENTIAL\nNOT FOR PUBLICATION\nSUMMARY OF UNITED STATES\nDRESTIC STARTS TO SELACTED CONTRIBUS\nAS REPORTED To THE TREASURY DEPARTMENT\nFROM EXPORT DECLARATIONS RECEIVED\nDURING THE PERIOD INLIGATED 2/\nJuly 28, 1941 to February 20, 1942\n(In thousands of dollare)\nJuly 28\nto\nPuriod ended\nPeriod ended\nTotal\nJane 32\nPubruary 10\nFebruary 20\nDomestic Experts\n11.5. S. n.\n$108,157\n$ 13,315\n5 26,174\n$ 147,646\nFree China\n37,093\n4,899\n4,853\n46,835\nsures 3/\n9,445\n1,054\n583\n11,082\nFrance 1/\n6\n-\n-\n6\n2\n-\n-\n2\neupled Franco\n2\nInscrupied Trance\n+4\n-\n2\nSpain\n2,493\n144\n2\n2,639\nSwitzerland\n6,785\n\"\n115\n6,933\nSenden\n12,157\n1,123\n509\n13,849\nPortagal\n5,674\n223\n548\n6,245\nFrench North Africa\nw\n1,747\n4,536\n-\n6,283\nTreasury Department, Division of Hometary Research\nFebruary 26, 1942.\nMary of the export declarations are received with - 1ag of several days or more.\nTherefore this compilation does not securately represent the actual shipment of\na particular wook. The longer the period covered, the closer will these figures\ncons to Department of Commerce revised figures.\n3/ Trom September 11, 1941 to date - It is premismed that a large percentage of\nasterial listed here, consigned to name, is destined for From China.\n2/ Includes both Occupded and Proccupied France through week ending October 4, 1941.\nDesupted and Incompled France separated thereafter.\nW\nIncludes Moreess, Algeria et Tenista.\n2/26/42\nRegraded Unclassified\n39\nAPPENDIX 3\nExports from the U. 5. to 7200 China, Burna and\nas reported to the Treasury Department\nJuly 28, 1941 - February 20, 1942\n(Thousands of Dollars)\nExports to\nLaporta to\nExports to\nFree China\nDares 3/\nit\nJuly 28 - AUG. 2\n395\n4,523\nAME. 4 - aug. 2\n-\n551\nsug. 11 - AME. 16\n309\n986\nLug. 18 - AUG. 23\nNo\n2.735\nJUE. 25 - ARE. 29\n1\n1,023\ngayt. 2 - Sept. 6\n204\n4.260\nDept. 5 - Sept. 13\n2,281\n5,217\nSept.15 - Sept. 20\n3,822\n752\nSept.22 - dept. 27\n110\n449\n2,333\nSept.29 - Oct. 4\n1,225\n684\n323\nCet. o - Dat. 11\n5,312\n1,157\n0.845\nCot. 13 - Oct. 18\n5\n35\n1,924\n\"ct. 20 - Oct. 25\n269\n403\n5,623\nat. 27 - liev.\n1\n4,772\n58\n4.48\nHove 5 - Nov.\n8\n1,672\n342\n4,552\nNov. 10 - Nov. 15\n2,851\n88\n2,677\nNov. 17 - NOV. 22\n1,228\n1,021\n3,581\nHov. 24 - Nov. 29\n3,239\n1,364\n2,436\nDec. 1 - Dec.\n6\n791\n&\n3.609\nDec. E - Dec. 13\n2,337\n18\n12,040\nDec. 15 - Dec. 20\n111\n8\n4,580\nDec. 22 - Dec. 27\n1\n196\n1,829\nDec. 29 - Jan.\n3\n35\n2\n5,993\nJan. 5 - Jan. 10\n91\n1,073\n5,247\nJan. 12 - Jun. 17\n1,695\n447\n5.874\nJan. 19 - Jan. 24\n-\n-\n3,885\nJun. 26 - Jan, 31\n6,938\n923\n9,608\nFeb. I - Feb. 10 W\n4,889\n1,054\n13,315\nFeb. 10 - Feb. 20\n4,853\n583\n26,174\nTotal\n49,438\n9,969\n147,999\n1. These figures are in part taken from copies of shipping manifests.\n=. Figures for exports to Pree China during these weeks include\nexports to Bangoon which are resumed to be destined for Free China.\n3. It 1s preaumed that a large persentage of exports to Bures are\ndestined for Free China.\nDeclaring with February 1 figures will be given for 10-day period\ninstead of week.\nTRANSURY Department, Division of Bonetary Research\nMarch 2, 1942\nRegraded Unclassified\n40\nAPPENDIX C\nPrincipal Exports from U.S. to U.S.S.R.\nas reported to the Treasury Department\nduring the ten-day period ending\nFebruary 20, 1942\n(Thousands of Dollars)\nTOTAL EXPORTS\n$26,174\nPrincipal Items:\nLandplanes (bombers)\n4,912\nMilitary tanks (light)\n4,641\nLandplanes (pursuit, intercepter and fighter)\n2,831\nBrass and bronze plates and sheets\n1,961\nMotor trucks and chassis\n1,224\nMilitary tanks (medium)\n1,060\nExplosive shells and projectiles\n1,025\nWool cloth\n881\nLandplanes (partial shipment)\n708\nRelief supplies (surgical and hospital)\n640\nCopper wire (insulated)\n555\nSole leather\n466\nMilling machines\n399\nTrinitro toulene (T.N.T.)\n383\nCopper wire (bare)\n329\nNetal-grinding machines and parts\n318\nMotallic cartridges\n273\nOther power-driven metal-working machinery and parts\n271\nHilitary tank parts and accessories\n261\nAluminum tubing\n208\nLathes\n163\nLubriesting oils\n159\nNitrocellulose\n153\nMachine and sub-machine guns\n149\nToluene\n144\nMolybdenum salts and compounds\n124\nLard\n123\nTreasury Department, Division of Monetary Research\nMarch 2, 1942\nRegraded Unclassified\n41\nAPPENDIX D\nPrincipal Exports from U. 8. to Free China\nas reported to the Treasury Department\nduring the ten-day period ending\nFebruary 20, 1942\n(Thousands of Dollars)\nTOTAL EXPORTS\n$ 4,853\nPrincipal Items:\nLandplanes (pursuit)\n936\nMotor trucks and chassis\n795\nPrinted matter (bank notes)\n723\nNetallic cartridges and belt links\n313\nExplosive shells and projectiles\n308\nSmokeless powder\n291\nLandplanes (partial shipment)\n265\nMachine and heavy ordnance guns\n217\nAuto replacement parts\n77\nRelief supplies (surgical and hospital)\n62\nAircraft parts and accessories, n.e.s.\n60\nTreasury Department, Division of Monetary Research\nMarch 2, 1942\nRegraded Unclassified\n42\nAPPENDIX E\nPrincipal Exports from U.S. to Burma\nas reported to the Treasury Department\nduring the ten-day period during\nFebruary 20, 1942\n(Thousands of Dollars)\nTOTAL EXPORTS\n0 583\nPrincipal Items:\nMetallie cartridges\n139\nMotor trucks (1 to 1t tons)\n128\nMotor trucks (1) to 21 tona)\n65\nAircraft propellers and parts of\n43\nSteel sheets, black\n42\nEvaported milk\n33\nAuto replacement parts\n25\nRayon piece goods\n21\nreasury Department, Division of Monetary Research\nMarch 2, 1942\nISP/ets\n1/2/42\nRegraded Unclassified\n43\nMAR 4 1942\nDear Mr. McCloy:\nThank you for your letter\nof March 3, and the release in regard\nto the evacuation of the Japanese from\nthe West Coast areas.\nSincerely yours,\n(Signed) 1. Morgenthau, in\nHon. John McCloy,\nAssistant Secretary of Ear,\nWashington, D. C.\nEHF:vls - 3/3/42\nOriginal file to Iday\nCopy of file an.m.\nRegraded Unclassified\n42\nC\nTHE ASSISTANT SECRETARY OF WAR\no\nP\nWashington\nY\nMarch 3, 1942\nDear Mr. Secretary:\nI am sending you herewith 8. copy\nof the proclamation and release which was\nissued, I believe, this morning on the West\nCoast in connection with the Japanese evacuees.\nYou will note that the substance of\nit is merely to designate the areas, and that\nno evacuations are 88 yet ordered, although the\nclasses of people to be affected by possible\nevacuations in the future are also designated.\nSincerely yours,\nJohn J. McCloy\nThe Honorable\nThe Secretary of the Treasury\nRegraded Unclassified\nCONFIDENTIAL\nHEADQUARTERS WESTION DEFENSE COMMAND AND FOURTH ARMS\nPRESIDIO OF SAN FRANCISCO, CALIFORNIA\nPUBLIC proclemation NO. 1.\nMurch 2, 1942\nTo: The people within the States of Arizona, Celifornia, Orogon, and\nWashington, and the Public Generally.\nWHEREAS, by virtue of orders issued by the Far Department on December\n11, 1941, that portion of the United States lying +ithin the States of\nPainington, Oregon, California, Montana, Idaho, Nevada, Utah and Arizona\nand the Territory of Alaska has been established 58 the Western Defense\nCommind and designated as a theatre of operations under my command; and\nWHEREAS, By Executive Order No. 9066, dated February 19, 1942, the\nPresident of the United States authorized and directed the Secretary of\nWar and the Military Commanders whom he my from time to time designate,\nwhenever he or any such designated commander deems such action necessary\nor desirable, to prescribe military areas in such places and of such ex-\ntent all he or the appropriate Military Commander may determine, from which\nany or all persons may be excluded, and with respect to which the right of\nany person to enter, remain in, or leave shall be subject to whatever\nrestrictions the Secretary of Rar or the appropriate military commander\nmay impose in his discretion; and\n#HEREAS, The Secretary of War on February 20, 1942, designated the\nundersigned a.3 the Military Commander to carry out the duties and responsi-\nbilities imposed by said Executive Order for that portion of the United\nStates embraced in the Western Defense Command; and\nWHEREAS, The Western Defense Command embraces the entire Pecific\nCoast of the United States which by its geographical location is particu-\nLarly subject to ettack, to attempted invasion by the armed forces of\nnations with which the United States is now at war, and, in connection\ntherewith, 1s subject to espionage and acts of sabotage, thereby requiring\nthe adoption of military measures necessery to establish safeguirite Against\nsuch enemy operations:\nNOW THEREFORE, I, J. L. DeWitt, Lieutenant General, U. S. tray, by\nvirtue of the authority vested in ao by the President of the United States\nand by the Secretary of War and my powers and prerogatives N.S Comminding\nGeneral of the Testern Defense Commund, do hereby declare that:\n1. The present situation requires où a matter of military necessity\nthe establishment in the territory embraced by the Testern Defense Commend\nof Military Areas end zones thereof sa defined in Exhibit 1, herete attached,\none as generally shown on the map attached hereto and mirked Exhibit 2.\nCONFIDANCIAL\nRegraded Unclassified\nAC\nCONFIDENTIAL\n2. Military treat Nos. 1 and 2, 88 particularly described end generally\nshown hereinafter end Le Exhibite 1 and 2 hereto, are hereby designated and\nnatablished.\n3, Within Wilitary Areas Nos. 1 and 2 there Kre established Zone /-1,\n1y10g whelly *ithin Militery Aree No. 1; Zones A-2 to A-99, inclusive, some\nof which are in Military Area No. 1, and the others in Military Area No. 2;\nand Zone B, comprising all that part of Military Area No. 1 not included within\nZoner A-1 to A-99 inclusive; all as more particularly described and defined\nARE generally shown hereinafter and in exhibits 1 and 2.\nMilitary Area No. 2 comprises all that part of the Statem of Washington,\nOrogon, California and Arizone which is not included within Military Arua No.\n1, und 1a shown on the map (Exhibit 2) as an unshaded Jes.\nL. Such persons or classes of persons as the situation may require will\nby subsequent proclemation be excluded from all of Military Area No. 1 and\nelse from such of those sones herein described AB Zones A-2 to A-99, inclusive,\nsa AIR within Military Area No. 2.\nCertain persons or classes of persons who are by subsequent proclemation\nexcluded from the zones last above mentioned may be permitted, under certain\nregulations and restrictions to be hereafter prescribed, to enter upon or\nremain within Zone B.\nThe designation of Vilitary /rea No. 2 as such does not contemplate any\nprohibition or regulation or restriction except with respect to the Lones\nest blished therein.\n5. Any Japanese, German, or Itelian Alien, or any person of Japanese\nencestry nor resident in Military Area No. 1 who changes his place of\nhabitual residence is hereby required to obtain and execute a \"Change of\nResidence Notice\" at any United States Post Office within the States of\nWashington, Oregon, California and Arizona. Such notice must be executed at\nany such Post Office not more than five days or less than one day prior to\neffecting any such change of residence. Nothing contained herein shell be\nconstrued to affect the existing regulations of the U. S. Attorney General\nwhich require aliens of enemy nationalities to obtain travel permits from\nU. 8. Attorneys and to notify the Federal Bureau of Investigation and the\nCommissioner of Immigration of any change in permanent address.\n6. The designation of prohibited and restricted sreas within the Teatam\nCommand by the Attorney General of the United States under the\nProgramtions of December 7 and 8, 1941, and the instructions, rules and\nregulations prescribed by him with respect to such prohibited and restricted\nand, are hereby adopted and continued in full force and effect.\nThe duty and responsibility of the Federal Bureau of Investig.illon <1th\nto the investigation of alleged neta of empionage and sabotage are not\nstared by this proclamation.\nJ. I., Doffie\nLimitement Concerl, U. 1.\nCommitting\nCONFIDENTIAL\nRegraded Unclassified\nCONFIDENTIAL\n17\nPRESS RELEASE:\nMarch 2, 1942\nCracking down on unfounded rumors and co-celled \"official statements\"\nregarding Pacific Coest evacuation, Lieutenant General J. L. DeWitt, Com-\nmending General of the Western Defense Command and Fourth Army, declared today\nthat the decision as to who will be evacuated, from where, and when in a\nsilitary decision based on military necessity.\n\"Military necessity,\" said General DeWitt, \"is the sole yardstick by\nwhich the Army has selected the military areas announced. Public clamor\nfor evacuation from non-strategic areas and the insistence of local organisa-\ntions end officials that evacuses not be moved into their communities\ncannot and will not be considered. No one has been authorised to speak for\nthe in connection with my authority under the Executive Order, and all\nstatements and predictions coming from other sources should be disregarded.\"\nThe Commanding General declared that for two weeks the staff of the\nRestern Defense Command and Fourth Army has made additional and final studies\nof the areas involved. Proclamation No. 1, issued today, includes approx-\nimately the west half of Washington, Oregon and Colifornia, and the south\nbulf of Arisona, in military area No. 1.\nThe proclamation also imposes restrictions on the movement of persons\nwithin the military sreas amounced. Any Japanese, German or Italian alien or\nperson of Japanese lineage changing his place of habitual residence either\nfrom one place to another within the military area, or by leaving the\naree, is required to register the change. Post Offices have been designated\nas the places where this registration will be nde. The Communding General\nseid arrangements were being made to have registration forms issued these\noffices as repidly 18 available facilities permit.\nCONFIDENTIAL\nRegraded Unclassified\n- 2 -\n48\nCONFIDENTIAL\nRegraded Unclas\nIn speaking of his proclamation, the Commending General indicated\nthat future proclamations forthcoming shortly will affect five classes\nof people. These are: Class 1, all persons who are suspected of espionage,\nsabotage, fifth-column or other subversive activity; Class 2, Japanese\naliens; Class 3, American-born persons of Japanese lineage; Class 4, German\naliens; Class 5, Italian aliens.\nPersons falling in Class 1 are being apprehended daily by the Federal\nBureau of Investigation and other intelligence services. Evacuation from\nmilitary areas will be E. continuing process, the General declared. He\nexplained that persons in Classes 2 and 3 will be required by future\norders to leave certain critical points within the military areas first,\nand that these areas will be defined and announced shortly. After exclusion\nhas been completed from around the most strategic areas, a. gradual program\nof exclusion from the balance of military area No. 1 will be developed.\nThe General stated that German and Italian aliens will be next on the\nlist for evacuation, but they probably would not be affected until after\nthe Japanese had been removed. He said that German and Italian aliens of\n70 years of age or over would not be required to move, except when individually\nsuspected, and that the parents, wived and children of Germans and Italians\nin the armed forces would not be moved unless for some special reason.\nSpecifically directing his comments toward predictions of immediate\nmass evacuation from Pacific Coastal areas, General DeWitt said: \"Immediate\ncompulsory mass evacuation of all Japanese and other aliens from the Pacific\nCoast is impracticable. Eventually, orders will be issued requiring all Japanese,\n- 3 -\n49\nCONFIDENTIAL\nincluding those who are American born, to vacate all of military area No. 1.\nThose Japanese and other aliens who move into the interior out of this area now\nwill gain considerable advantage, and in all probability will not again be\ndisturbed. The appropriate agencies of the Federal Government are engaged in\nfar-reaching preparations to deal with the problem and a study is in progress\nby these agencies regarding the protection of property, the resettlement and\nrelocation of those who are affected. The completed preparations will include\nmeasures designed to safeguard as far as possible property and property rights,\nto avoid the depressing effect of forced sales, and generally to minimize\nresulting economic dislocations. As soon as these studies are concluded,\ndefinite designation of territories and definite designation of persons to\nbe affected will be made.\"\n*****\nCONFIDENTIAL\nRegraded Unclassified\nMAR -\n50 1942\nMarch 4, 1942\nMr. Donald M. Nelson\nChairman\nWar Production Board\nSocial Security Building\nWashington, D. C.\nDear Mr. Nelson:\nI am pleased to know that you are having & status\nreport prepared of allocations covering the items under\nthe Moscow Protocol, which your letter of February 28th\nstates will be completed today.\nThe remaining time to make up existing deficiencies\nbefore April 1st is limited, and it is most important\nthat the suppliers maintain production schedules in ac-\ncordance with your allocation orders.\nSince writing you I have received a further report\nfrom the Procurement Division as of February 28th, which\nindicates that the difficulty concerning some of the Items\nhas been overcome.\nSincerely yours,\n(Signed) 1. Morganthuse in\nSecretary of the Treasury\nCEM/rm\nBy Momember Steem 11.00\nsurnome\nany as\nRegraded Unclassified\n51\nWAR PRODUCTION BOARD\nWASHINGTON, D. C.\nOFFICE OF\nDONALD M. NELSON\nCHAMMAN\nFebruary 28, 1942\nDear Mr. Secretary:\nI have your letter of February 19 and the report\non the status of a few of the purchases under the Moscow\nProtocol as of February 18, 1942.\nI find several figures and statements in the report\nwhich conflict with information available here and, rather\nthan send you a hastily prepared report on the status of\nUSSR requisitions considered by the WPB, I am having prepared\na complete account of such items of material and equipment\nshowing, specifically, the total Protocol requirements, the\namounts requisitioned, and the amounts allocated for delivery\nor that will be made available for delivery by April 1. This\nwill be completed by March 4 and I will send a copy to you\nat that time.\nWe are aware of the importance of meeting all\npromises under this Protocol, and I assure you we will con-\ntinue to do everything possible in this organization to ex-\npedite delivery of the materials and manufactured products\nwhich we have agreed to make available.\nSincerely yours,\nWhilulen Donald 11. Nelson\nThe Honorable\nThe Secretary of the Treasury\nRegraded Unclassified\nMAR 4 1942\nMarch 4, 1942\nMr. Thomas B. McCabe\nDeputy Administrator\nOffice of Lend-Lease Administration\n515 - 22nd Street, N. W.\nWashington, D. C.\nDear Vr. McCabe:\nThe concern expressed in your letter of March 2nd\nbecause of the present Russian cargo situation is thor-\noughly understood and appreciated.\nI have directed that the Procurement Division con-\ntinue to exert every effort to follow up each order close-\nly and particularly to expedite shipments of heavy cargo\nto shipside.\nYou may reat assured that everything within our\npower is being done.\nSincerely yours,\n(81gmad) 1. Bergantian, St.\nSecretary of the Treasury\nCEM/rm\nBy Membership -\ncarry us\nRegraded Unclassified\n53\nOFFICE OF LEND-LEASE ADMINISTRATION\nFIVE-FIFTEEN 22d STREET NW.\nWASHINGTON, D.C.\nMarch 2, 1942\n3/3/42\nThe Honorable Henry Morgenthau, Jr.\nSecretary of the Treasury\nWashington, D. C.\nDear Mr. Morgenthaur\nNe are very grateful for the splendid cooperation of the\nTreasury Procurement in accelerating purchases for the Soviet\nUnion.\nKnowing your vital interest in the protocol and your\nofforts in urging compliance with the President's directive in de-\nlivering the backlog, with certain amendments, by April 1st, I\nthought you would like to know that Mr. Mack end his associates are\nspeeding up their procedure in placing contracts and expediting\ndeliveries.\nAs you know, ocean shipping has been the chief bottloneck,\nbut after e long hard struggle we succeeded in obtaining a consider-\nable number of ships last week and promises of 8. larger number this\nweek and the succeeding weeks of March.\nNow the responsibility is squarely up to the various\nprocurement agencies and ourselves to expedite deliveries to the\nports. At the moment there is available considerable quantities of\ntrucks and other bulky items, but the important need is steel and\nother heavy cargo for balanced loading, of which the tonnage for\nimmediate delivery is inadequate. Your procurement office is fully\nuware of the requirements and is exerting great pressure to obtain\nthe necessary material, but I thought you and Mr. Swope should know\nthe seriousness of the problem.\nWith kindest regards,\nSincerely,\nThomas B.W.: Calu\nThomas B. MoCabe\nDeputy Administrator\nRegraded Unclassified\nTREASURY DEPARTMENT\n54\nINTER OFFICE COMMUNICATION\nDATE March 4, 1942\nSecretary Morgenthau\nTO\nMr. Kamarok\nFROM\nSubject:\nGerman Aircraft Production (based on Ministry of\nEconomic Warfere reports)\n1. From January 1, 1941, to December, 1941, German\naircraft production increased by one-third, or from 1,900\nmilitary planes 8. month to 2,500 8. month. Plant extensions\nwhich are being made may increase this output by another\n15 to 20 percent, or to a total of about 3,000 planes A\nmonth. (The production in Poland and Czechoslovakia is\nincluded in these figures. The production of Italy and\nthe other occupied countries would boost the total by\nanother 600 to 700 planes a month. The present European\nAxis production would be, then, probably around 3,300 a\nmonth, with 8. possible figure of 3,700 per month this\nyear.)\n2. In 1941, it 1s estimated that the Germane produced\n8 total of 26,000 planes. (At the same time, Italy and\nthe other occupied countries probably produced around\n7,000 planes, giving a total Axis production of 33,000\nmilitary planes in 1941.)\n3. The main factor limiting expansion of the German\nsircraft industry 1s the size of the labor force. Raw\nmaterials are not 8. bottleneck; the amount of aluminum\nand magnesium required is only a small portion of the\ntotal German production.\nBy the end of 1941, there were around 900,000 workers\nin the whole German aircraft industry. Probably 150,000\nworkers were added to the industry in the course of 1941.\nMost of this addition was composed of imported male labor.\nIt 1s believed that the reserves of female labor in\nGermany are exhausted. Further expansion in output can\ncome only from further rationalization, sub-contracting,\ndiverting labor from other war work, recruitment of foreign\nlabor, and the placing of orders in the occupied countries.\nRegraded Unclassified\n2\n55\nDue to the shortage of labor, only two shifts are\nworked in the plane factories. The average working week\nle 60 hours, 1.e., the average machine is used only 120\nhoure per week out of a possible maximum of 168 hours.\n4. In order to keep production at its maximum, no\nfundamental changes have been made in aircraft design\nduring the war. Germany 1s not developing new military\ntypes to anything like the same extent that England and\nthe United States are. Many of the planes, publicized\n98 new German types, were either developed 98 prototypes\nbefore the war, or are merely modified and improved\nversions of existing standard types. By making few type\nchanges, and BO avoiding the six to nine months decrease\nin production that a changeover requires, Germany has been\nable to produce constantly at her maximum. (This policy\nmight well lose the war for Germany. It gambles on\ngaining 80 much in the short-run that the long-run dis-\nadvantages of this policy can be discounted.)\n(Comment: Thie type of information would be more signi-\nficent If it could be compared to American production\nfigures. I have been informed by A fairly reliable source\nthat Mr. Lubin has made arrangements for unofficial liaison\nrepresentatives of several of the Cabinet Members [who do\nnot receive copies of the Armaments Statistics progress\nreports 7 to see the American production statistics once\nA month. Perhaps an arrangement of this sort could be\nworked out for the Treasury.)\nRegraded Unclassified\n56\nTELEGRAM SENT\nELP\nMarch 6, 1:42\nThis tele rar must be\nperiphrased before being\n2 P.E.\nmasmunicated to anyone\nother than a Governmental\nneency. (BR)\nAMEMBASSY,\nCHUNCKING. (CHINA)\n147\nTO ADLER FROM FOX FOR TRANSMISSION TO THE\nSTABILIZATION BOARD.\nQUOTE 1. The United States Treasury has\naccumulated a backlog of about 40 CASER involving\nEither (1) trensfers from United States dollar\nanonunts in the names of individuals or firus held\nby appointed banks in Occupied China to nccounts\n16. the United States in the names of the Andivid-\ncale or firms, or (2) transfers from accounts\ncarried by banks in the United States in the names\n02 individuals or firms comiciled in Occupied\nChina. The total value I these dollar transfers\nis about United States $500,000. American nation-\nals are the beneficiaries of nearly 21 as the\napproximately United States 500,000.\n2. ThESE 088ES have accumulated over 3\nperiod\nRegraded Unclassified\n57\n-2- #147, March 4, 2 pame to Chungking.\nperiod of time, all before December 7 and many\nof them a considerable period of time previous\nto December 7. These applications have not been\nacted upon because of the desire of the United\nStates Treasury to obtain the prior approval of\nthe Stabilization Board, EVEN though this drlay is\nresulting in personal hardships to individual\nAmericans, The licensing of these transactions will\nnot result in a drain the Board's resources.\n3, I have examined the individual applica-\ntions; find snme of only indirect interest to the\nBoard, and SEE no objection to the United States\nTreasury approving these transactions. I find con-\nfirmation of disposition of United States Treasury\nnot to act on cases involving China without the\nBoard's previous approval. If the Board's per-\nmission is granted, the United States Treasury is\nprepared to license these transactions.\n4. I recommend that the Board inform the\nUnited States Treasury that it has no objection to\nthe above transactions heing licensed by the United\nStates Treasury and that I be recorded as joining\nin such spproval.\n5. A reply to your cable of February 3, 1942,\nNo. 84, 18 being prepared and shall be sent to you\n65 soon as possible. EWD QUOTE\nWELLES\nActing\nD: D:L:ME\nTE\n(FL)\nRegraded Unclassified\n58\nTELEGRAM SENT\nWWIT\nGRAY\nMarch 4, 1942\n7 p.m.\nAMERICAN LEGATION,\nCAIRO, (SGYPT).\n184\nFROM TREASURY.\nPHOTE 1. To facilitate the negotiction of\nchecks drawn on the Treasurer of the United States\nand United States currency, the following procedure\nis suggested.\n2. All United States dollar checks drawn on\nthe Treasurer of the United States negotinted by\nBorclays Bank (D. C. & O.), Cairo are to be deliv-\ntred to the American Legation, Cairo, accompanied by\nlist in triblicete with complete description each\ncheck as follows: Name of drawer; symbol number;\ncheck number; amount; payee's name: date of check.\nConsular officer will carefully verify checks\n-gninst list and advise Treasury by wire through\nState Department aggregate amount of checks delivered\nby bank. Upon receipt of this advice, \"rensury will\neffect payment in corresponding amount to Barclays\nBank\nRegraded Unclassified\n59\n-2- 184, March 4, 1942 to Cairo, (Egypt)\nBank (D. C. & O.), NEW York, for account of its\nCairo Branch,\nConsular officer should instruct Barclays Bank\n(D. C. & O.) to use all possible diligence in identi-\nfication of payee and determining validity of Endorse-\nments, Barclays Bank (D. C, & 0.), Cairo, should\nEndorse checks ns follows: INTER QUOTE Pay to the\norder of the Transurer of the United 3tates for credit\nof our cocount with Barclays Bank (D. C. & 0.), NEW\nYork. Signed Barclays Bank (D. C. & O.), Cairo,\nEgypt. END INNER QUOTE. Treasury will look to\nBarclays Bank (D, C. is O.), Cairo, only for usual\nguarantee under love applicable in Egynt.\nConsular officer should forward checks accom-\npenied by one copy of list to Treasurer of United\n3tates, Washington, as promptly as possible by\nsafest means available, 3econd cony of list should\nfollow by separate carrier at carliest possible date,\nThird cony should be retained by consular officer.\n3, In the CASE of EXCESS United States paper\ncurrency, instruct Barclays Bank (D. C. & O.) to\nprepare list in quadruplicate showing the amount of\nEach denomination of each kind of currency separately,\nand for\nRegraded Unclassified\n59\n-- \"184, March 4, 1942 to Coiro, (Sgypt)\nBank (D. C. &: O.), NEW York, for account of its\nCeiro Branch.\nConsular officer should instruct Barclays Bank\n(D. C. P: 0.) to use r.ll possible diligence in identi-\nfication of nayee and determining volidity of Endorse-\nments. Barclayo Bank (). C. : 0.), Chiro, should\nendorse checks C.3 follows: INTER QUOTE Pay to the\norder of the Trensurer of the United 3tetto for credit\nof our account with Barclays Bank (D. C. \" 0.), HEY\nYork. Signed Barolays Benic (D. C. & O.), Cairo,\nEgypt. END INNER QUOTE. Pressury will look to\nPerclays Bank (D. C. & O.), Coiro, only for usual\nguarantee under Into applicable in Egynt.\nConsuler officer should forward checks accom-\nornied by one cony of list to Treasurer of United\n3totes, Washington, 0.3 promptly na nossible by\nonfest menns ovailable, 3800nd cony of list should\nfollow by separate carrier cb corliest possible date,\nThird cony should bE retained by consular officer.\n3. In the CF3E of EXCE38 United States ORDER\nSUPPENCY, instruct Bereleys Bank (D. C. & 0.) to\nTEEDERE list in quodrublicate showing the amount of\nsach denomination of sech kind of currency secorately,\nand for\nRegraded Unclassified\n60\n-3- 184, March 4, 1942 to Cairo, (Egyot)\nand for Federal Reserve notes end for Federal RESERVE\nBank notes, the list must-show separately the amount\nof ecoh denomination of the issue of each bank, cut\ncurrency in half vertically and stemp or write name\nof bank on each half in ink. Then deliver both\nhalves and list in quadruplicate to American Legation,\nCairo,\n4. Consular officer will verify amount of currency\ndelivered to him ngainst list prepared by bank and then\nhe will wire Treasurer of United States through State\nDepartment the amount of currency delivered to him.\nWhen Treasury receives this advice, payment in\ncorresponding amount will be made to Barclays Bank\n(D. 0. 8: O.), NEW York, for account of its Cairo\nbranch. Upon receipt and examination Treasury reserves\nright to claim reimbursement for any currency which\nis not genuine. Ench set of halves should be for-\nwarded by separate carrier accompanied by n copy of\nthe list. The third copy of list should bE forwarded\nby still another carrier. American consular officer\nFill retain fourth copy of list.\n5. Consular officer should make no orrengements\nfor insurance ns shipments of both checks and currency\nwill bE\nRegraded Unclassified\n61\n⑉4⑉ /184, March 4, 1942 to Cairo, (Egypt)\nwill bE covered by Government LOSSES in 3hinment Act.\n6. Please advise Boroleys Bank (D. C. i: O.),\nOniro, of appropriate parts hereof with the suggestion\nthat it advise 1ts branches in adjecent countries and\nbanks in Cairo of these arrangements.\n7. Please advise Major R. E. Odell, F. D.,\nU. 3. Army, Cairo, of the contents of this message and\ninform other United States Government officials appro-\nprints parts hereof.\n8. To minimize number of checks drawn on\nTreasurer of United States, suggest that you advise\ndisbursing officers that they should cable through\ntheir respective departments their local currency\nrequirements. Arrangements will then bE made to\nndvance dollar credits to Barclays Bank (D. C. & 0.),\nCairo. END QUOTE\nThe Department approves the foregoing. Any\nEXDENSE incurred in carrying out the instructions\ncontained in this telegram should bE included in\nregular accounts 0.3 separate item for billing Treasury\nin accordance with Sec. V - 45, Foreign SERVICE\nRegulations.\nWELLES,\nACTING\n(FI,)\nFD:FL:ME\nNE\nD/.\nFA\nRegraded Unclassified\n62\nTREASURY DEPARTMENT\nINTER-OFFICE COMMUNICATION\nDATE March 4, 1942\nTO\nSecretary Morgenthau\nPROM Mr. Dietrich\nCONFIDENTIAL\nRegistered sterling transactions of the reporting banks were ae follows:\nSold to commercial concerns\n£46,000\nPurchased from commercial concerns\n£ 2,000\nOpen market sterling remained at 4.03-3/4. The only reported transaction\nconsisted of £2,000 purchased from a commercial concern.\nNo supreciable change took place today in New York quotations for foreign\ncurrencies. Closing rates were as follows:\nCanadian dollar\n11-1/2% discount\nArgentine peso (free)\n.2370\nBrazilian milreis (free)\n.0516\nColombian peso\n.5775\nMexican peso\n.2065\nUruguayan peso (free)\n.5275\nVenesuelan boliver\n.2800\nCuban peso\n3/8% premium\nThere were no gold transactions consummated by us today.\nThe Federal Reserve Bank of New York reported that the Bank of Canada shipped\n12,568,000 in gold from Canada to the Pederal for account of the Government of\nCanada, for sale to the New York Assay Office.\nIn London, spot end forward silver remained at 23-1/24. equivolent to 42.67d.\nThe Treasury's purchase price for foreign silver was unchanged at 354. Handy\nand hermen's settlement price for foreign silver was also unchanged st 35-1/81.\n% made no purchases of silver today.\nX\nRegraded Unclassified\n62\nTREASURY DEPARTMENT\nINTER-OFFICE COMMUNICATION\nDATE March 4. 1942\nTO\nSecretary Morgenthau\nFROM Mr. Districh\nCONFIDENTIAL\nRegistered sterling transactions of the reporting banks were as follows:\nSold to commercial concerns\n£46,000\nPurchased from commercial concerns\n£ 2,000\nOpen market sterling remained at 4.03-3/4. The only reported transaction\nconsisted of £2,000 purchased from a commercial concern.\nNo appreciable change took place today in New York quotations for foreign\ncurrencies. Closing rates were as follows:\nCanadian dollar\n11-1/2% discount\nArgentine peso (free)\n.2370\nBrazilian milreis (free)\n.0516\nColombian peso\n.5775\nMexican peso\n.2065\nUruguayan peso (free)\n.5275\nVenezuelan bolivar\n.2800\nCuban peso\n3/8% premium\nThere were no gold transactions consummated by us today.\nThe Federal Reserve Bank of New York reported that the Bank of Canada shipped\n$2,568,000 in gold from Canada to the Federal for account of the Government of\nCanada, for sale to the New York Assay Office.\nIn London, spot and forward silver remained at 23-1/24, equivalent to 42.67#.\nThe Treasury's purchase price for foreign silver was unchanged at 35$, Handy\nand Earman's settlement price for foreign silver was also unchanged at 35-1/84.\nWe made no purchases of silver today.\nX\nRegraded Unclassified\n7\nTreasury Department\n63\nDivision of Monetary Research\nDate\nMarch 4, 1942\n19\nSecretary Morgenthau\nTo:\nFrom:\nMr. Kamarck\n1. The attached letter from Lord Halifax\nstates that the distribution of all\nBritish military reports 18 to be\nundertaken by the American section\nof the Combined Chiefs of Staff\nSecretariat. Therefore, he will\nhave to stop sending copies of the\nBritien \"operational\" reports to you.\n2. These reports have been very useful\nand, I believe, it would be desirable\nto have them continued.\n3. General Smith is the Secretary of the\nCombined Chiefs of Staff organization.\nShould we attempt to work out an\narrangement for the continued receipt\nof these reports through General Smith?\nyes\nMR. WHITE\nBranch 2058 - Room 214\nRegraded Unclassified\n64\nMAR 4 1942\nExcellency:\nThis is to acknowledge your letter of February\n28, stating that the distribution of all British\ndocuments on the military situation to United\nStates authorities will be undertaken in the future\nby the Secretariat of the Combined Chiefs of Staff.\nI want to thank you for having kept as informed\nof developments in the war during the past year, by\nsending ne copies of your operational telegrams.\nfour kindness was approciated.\nTours respectfully,\n(Signed) 1. 100\nSecretary of the Treasury\nHis Excellency,\nThe Anbassador of Great Britain,\nWashington, D. C.\nIdenms\nBy Members 2 40\nFILE COPY\nRegraded Unclassified\n65\nBRITISH EMBASSY\nWASHINGTON, D.C.\n28th February, 1942.\nDear Mr. Secretary,\nWith the completion of the secretarial\narrangements for the Combined Chiefs of Staff\nCommittee, the Secretarist of the Combined Chiefs\nof Staff have agreed that it would simplify\nmatters considerably if the distribution of all\nBritish documents concerning the military situation\nto the United States authorities were undertaken in\nits entirety by the American section of the Combined\nSecretariat, and if accordingly the direct dis-\ntribution of any such papers by this Embassy were to\ncease.\nSuch an arrangement will obviate possible\nmisunderstandings and overlapping, and should also\naccelerate the distribution of individual papers.\nIn view of the adoption of this procedure I would\ntherefore/\nThe Honourable\nHenry Morgenthau, Jr.,\nUnited States Treasury,\nWashington, D.C.\nRegraded Unclassified\n66\nBRITISH EMBASSY\nWASHINGTON, D.C.\n- 2 -\ntherefore propose to cease, as from March 1st,\nsending you direct from this Embassy copies of the\ndaily British \"Operational\" telegrams.\nBelieve me,\nDear Mr. Secretary,\nVery sincerely yours,\nHalifax\n67\nRESTRICTED\nMID 319.1\nSituation\nNo. 648\nM.I.D., W.D.\n11:00 A.M., March 4, 1942.\n8-11-41\nSITUATION REPORT\nI. Pacific Theater.\nPhilippines: In a surprise air aveep, American planes de-\nstroyed more than 30,000 tone of Japanese shipping in Subio Bay, fired\ndocks at Grande Island and Olongapo, causing numerous explesions. No\nchange in the ground situation. Burma: Fighting of a sporadic nature\n18 reported along the Sittang River, where small Japanese forces are\nraiding the Rangoon-Mandalay road. Japanese forces are being steadily\nreinforced. Java: Japanese aircraft are reported as operating from\nat least one airdrome seized on Java in supporting land operations.\nAustralia: Port Darwin was attacked on March 3 by Japanese aircraft.\nThe Japanese-cccupied town of Gasmata in New Britain was attacked by\nthe R.A.A.F. on the same date,\nII. Western Theater.\nThe R.A.F. bombed industrial suburbe of Paris for two hours.\nIII. Eastern Theater.\nThe German High Command admita heavy Russian attacks on all\nfronts. No change in the general situation. (A situation map vill not\nbe issued this date.)\nIV. Middle Eastern Theater.\nGround activity 18 increasing. Press reports Axis aerial\nbombing of Suez Canal on March 3.\nRESTRICTED\nRegraded Unclassified\n68\nMarch 5, 1942\n9:09 a.m.\nRandolph\nPaul:\n.....and I'm going up today instead of Monday.\nHMJr:\nOh, really?\na:\nThey a dvanced the time; they got through the\nCochran hearings.\nHMJr:\nWhat happened on the Cochran thing?\nP:\nWell, I don't know; you see, we didn't send\nanybody up simply because we relied on our\nwritten record. We arranged that with the clerk;\nwe didn't do that because we'd made our position\nclear and we didn't want any public fight be-\ntween us and the War Department.\nHMJr:\nI see. But they're starting you off today.\nP:\nYeah. I'm going up at ten o'clock today.\nHMJr:\nWell, good luck.\nP:\nMr. Doughton called up yesterday afternoon and\nsaid some very kind words.\nHMJr:\nDid he?\nP:\nAnd also he told me that - I told Dan Bell\nabout it - he wants a memorandum from you on\nthe debt limit bill. I told Dan about that.\nHMJr:\nI see.\nP:\nBut he was very pleasant and 80 on, but I don't\nknow what they'll be like today.\nHMJr:\nWell, I'm not worried how you'll handle your-\nself after what you did the other day.\nP:\nYeah. Well, I've got some stuff. If I'd had\nuntil Monday, I'd have a little more material;\nbut I've got some pretty good stuff all along\nthe line on what I think they're going to ask\nabout.\nRegraded Unclassified\n69\n- 2 -\nHMJr:\nYou've got that stuff that I've gotten from\nthat woman on this low income family, haven't\nyou?\nP:\nRoy has that, I'm sure. I've got the basic\nfigures. I haven't got that material, but\nI'm sure Roy has it.\nHMJr:\nWell, if they bring it up.....\nP:\nI'll make a note of it.\nHMJr:\nYou know, no paper ran that, so I'd like you to\nmake an effort to get that in.\nP:\nAll right.\nHMJr:\nBecause none of the papers ran that before. I\nmean, my using it, you know.\nP:\nYeah. All right, I'll check that with Roy.\nHMJr:\nGood luck.\nP:\nThank you.\n70\nMarch 5, 1942\n11:00 am\nGENERAL ANILINE AND FILM\nPresent: Mr. Foley\nMrs. Klotz\nMrs. Morgenthau\nH.M.JR: Are you ready for some good news?\nMR. FOLEY: Yes.\nH.M.JR: The President said to proceed at once\nwith Aniline and these other two. He said to go ahead\nand clean them up. He said - he took our memorandum\non the West Coast thing and he liked the idea, and he\nsaid he would take it up right after lunch, and he\nsaid that - but that isn't the thing that was worrying\nhim. \"What are you going to do with these people once\nthey get there? Why can't they go to Texas?\" \"Well,\nafter all, Mr. President, that isn't us.\" And I said,\n\"What McCloy is worrying about is--\"\nMR. FOLEY: Getting them there.\nH.M.JR: If is to get them started, and they are\nnot ready to go until a week from Monday. You can't\nget the volunteers and the property and so forth and so\non.\" So he said, \"Well, I am not worrying about that.\nWhat I am worrying about is what is going to happen\nto them when they get there.\" I said, \"Well, they won't\nget there until you do this. He said, \"Well, I will\ntake it up right after lunch,\" and he said, \"The other\nthree things, go ahead.\" He said, \"Go on.\nMR. FOLEY: Good.\nRegraded Unclassified\n71\n- 2 -\nH.M.JR: I said, \"Mr. President, as far as I am\nconcerned, my advice is let us do it now. If two\nweeks or three weeks from now you want to take it away\nfrom us, anything to win the war, I don't care, If but\nI said, \"We want to win the war over here.\" And then\nhe asked me one question, \"Who was the man next to you\nwho is going to handle this thing?\" So my hunch is\nsomebody has been talking about Bernstein. So I said,\n\"The man that would handle it would be Pehle.\" Was\nhe any relation to the man in Columbia Broadcasting\nCompany, and I said, \"None.\" Now, Ed, you said you\nwould have somebody in there by Monday, and have O'Connell\nin this afternoon.\nMR. FOLEY: I will.\nH.M.JR: And I will see O'Connell.\nMR. FOLEY: Joe O'Connell?\nH.M.JR: No.\nMR. FOLEY: Robert E. McConnell?\nH.M.JR: Yes, I am ready at two thirty. Is\nJoe out?\nMR. FOLEY: No, I will get him down here.\nH.M.JR: Where are you on this other business?\nMR. FOLEY: Well, I'm waiting to hear from McCloy.\nMcCloy had to go to Agriculture and he is calling me,\nand we will go and see Smith as soon as he is free\nover there.\nH.M.JR: Should I tell him that the President sort\nof likes the thing, that the thing he is worrying about\nis the other end of it?\nMR. FOLEY: I think it would be 8. good idea to get\nthat message to him. Otherwise, he will wonder how\nthe President found out about it. We were over there\nthis morning on something else and didn't mention this.\nRegraded Unclassified\n72\n- 3 -\nH.M.JR: The President treated everybody else\nterrible, Sam Rosenman and everybody. They said,\n\"Gee, we won't ask the President a thing, we will get\nout of here.\" I had three-quarters of an hour, and he\nsaid, \"Henry, honestly, the Attorney General isn't\ninterested in the Aniline and Dye. What he is interested\nin is the Japanese.\" I said, \"Honestly, Mr. President,\nfor once I think that you are being taken in.\"\nMR. FOLEY: Good for you.\nH.M.JR: I said, \"Well, after all, you have trained\nme to be suspicious, and I have got good reason to be\nsuspicious.' I said, \"We have picked up certain stuff.\"\nMRS. KLOTZ: You didn't show him that statement.\nH.M.JR: No. I told him, \"Mr. President, I am\nnot taking your suggestion because I want the stuff.\nI don't care what you do to win the war. If two weeks\nfrom now or a week from now, you want to give it to\nsomebody else, it is all right with me, but this is\njust a suggestion 50 that the Army can move these people\nout at once instead of waiting for two weeks.\"\nMR. FOLEY: That is right.\nH.M.JR: I mean, I want you to know, and I said,\n\"If you take my advice, this Aniline thing is a dirty\npiece of business, and I was going to clean it up and\ntell you nothing. If you want me to do it, we will\ngo ahead just as long as you say so.\" So, he said,\nWell, go ahead. He said, \"Don't wait for anything.\"\nMR. FOLEY: O.K.\nH.M.JR: Now wait a minute, until I get McCloy\non the phone. Well, he is out of his office for half\nan hour.\nMR. FOLEY: I guess he is in Agriculture, because\nI talked with Gill, and Gill said he was going to be\nover there, and he said he would be in the South Building\nRegraded Unclassified\n73\n- 4 -\nsomewhere. He said, \"I will get word to him as soon as\nat Budget on his way back.\nhe leaves there to call you, and he said he would stop\nH.M.JR: When Foley gets to McCloy's office last\nnight, who should be sitting there but Harrington Gill.\nMRS. MORGENTHAU: Is he working for McCloy now?\nMR. FOLEY: Apparently he is working with McCloy\non this West Coast evacuation problem.\nMRS. MORGENTHAU: Oh, for Landis. You see, Landis\nwould be interested in that, I should think. It is\nunder Civilian Defense.\nMR. FOLEY: I should think so too.\nMRS. MORGENTHAU: And he works with the regional\npeople.\nMR. FOLEY: Well, that must have been it. All\nright. Well, I will go out and get started.\nH.M.JR: Yes. Oh, I will see you and your gang\nat two thirty.\nMR. FOLEY: All right.\nH.M.JR: And we will go to town. I expect to put\nMcConnell in tomorrow.\nMR. FOLEY: All right. I will see if I can find\nhim.\nH.M.JR: Or tonight.\nMR. FOLEY: All right. I have got to find him\nfirst. The last time I talked with him he was in\nShreveport, Louisiana, but he said he would be back\nThursday, today.\nH.M.JR: Well, we will start the wheels going, Ed.\nMR. FOLEY: I will.\nRegraded Unclassified\n74\nSUGGESTED PROGRAM FOR THE FEDERAL RESERVE BANK\nOF AS FRANCISCO AND OTHER PUBLIC AGENCIES TO\nDEAL WITH PROPERTY OF EVACUEES FROM PACIFIC\nCOAST MILITARY AREAS.\nThe success of the proposed program will depend upon placing\ncomplete responsibility for its execution in & responsible West Coast\nagency acting under the general direction of the local military\nauthorities.\nI - Scope of Problem:\nThe evacuation on short notice of tens of thousands of persons\nfrom Vilitary Áreas on the Pacific Const raises serious problems in con-\nsection with the liquidation of their property holdings and the protection\nof the property of such persons against fraud, forced sales, and unscrupu-\nlous creditors. Obviously the emergency will cause financial loss to the\ngroup involved. However, the following program In intended to accord to\nthis group reasonable protection of their property interests consistent\nwith the war effort.\nI - Logal Authority:\nSince the program is one basically to assist the evacuee in the\nliquidation of his property, it is expected that in most instances the\nevacuee will voluntarily avail himself of the facilities afforded by this\nprogram. Governmental sanctions will be necessary to deal with creditors\nand others who seek unfair advantage of the evacuees. There is ample\nlogal authority now vested in the military authorities and in the Treasury\nDepartment which can be delegated to such West Coast agency to deal with\nthis problem without necessity of obtaining further legislation or new\nexecutive orders.\nIII - Administration of Program:\nThe nature and urgancy of the situation, coupled with the large\nvolume of transactions that will require prompt handling, necessitates\nthe program's being administered by an agency on the West Coast cloaked\nwith full authority to act without reference to Washington. The over-all\ncontrol of all aspects of the evacuation must obviously rest in the military\nauthorities. Subject to this over-all control by the Army, the direct\nresponsibility for the execution of the pro erty aspects of the program\nshould be placed in the Federal Reserve Bank of San Francisco, which has\nbranch offices in Los Angeles, Seattle, and Portland. The Federal Reserve\nRegraded Unclassified\n- 2 -\n75\n1k will be in 8. position to obtain the cooperation of other Government\ngencies, and of well-known and experienced individuals and institutions\nLa the various communities throughout the West Coast area. This coopera-\ntion, together with the established integrity and ability of the Federal\nLoberve Bank, will enlist the confidence of all of the affected groups\nand discourage gouging by creditors or other self-seeking interests.\nThe Federal Reserve Bank will also work in close liaison with\nthe Federal Security Agency, the United States Department of Agriculture,\nand other Federal, State, and local public agencies that can be of\nsesistance in dealing with the property during the course of its liquida-\ntion. These agencies will undoubtedly be called upon by the military\nauthorities to handle other aspects of the evacuation problem, such as\nthe transportation and resettlement of the evacuees, and their reemploy-\nment in new areas.\nThe Federal Reserve Bank of San Francisco, which is the fiscal\nagent of the Treasury Department, will be clothed with ample authority\nto execute the program. The Treasury Department will lay down the broad\nprinciples and objectives of such program as well 8.8 the general procedure\nto be followed. The Department will also furnish the San Francisco Bank\nby airplane with the requisite number of trained experts to assist in\nmrking out the details of the program in the field and to participate\nits execution. If need be the Department is in B. position to provide\nthe San Francisco Federal at once with 100 or more men for this purpose.\nThe keynote of this program is speed. It is believed that it\ncan be put in operation by Monday, March 9, 1942.\nIV - Outline of Program.\n4. Properly staffed offices under the direction of the San\nFrancisco Federal Reserve Bank will be opened at once in the local\ncommunities from which evacuees will be moved.\nB. Announcement will be made throughout the area by the Federal\nReserve Bank of San Francisco that its representatives in these offices\nare prepared to assist evacuees with the problem of liquidating their\nproperty and protecting them against those seeking to take unfair advan-\ntage of their plight.\nC. These representatives will assist in putting the evacuees in\n= position to obtain buyers, lessees, and other users of their property\non fair terms. In cases where the evacuee is unable to select his own\nagent to dispose of his property, the Federal will be prepared to act 88\nAcent for the evacuse under B. power of attorney or similar arrangement and\n:e steps to liquidate the property on fair terms.\nRegraded Unclassified\n76\n-3-\nD. Evacuees threatened by creditors will be encouraged to\ncome tothe representatives of the Federal for advice and guidance.\nThe Federal representative will also discuss the matter with the\ncreditor with the view to working out a fair settlement and limiting\nthe remedies that may be pursued by the creditor who threatens un-\nfair action. By and large the mere existence of this program of help-\ning ovacuees will eliminate or forestall most of the sharp practices\nthat are now feared.\nE. In some cases the property of the evacuee may be such\nthat its real value can only be realized at 6. future time, e.g., Jap-\nanese novelties. In such cases the Bank's representative will assist\nthe evacuee in arranging for the storage of such property if that is\nthe wish of the evacues.\nF. On agricultural properties the Bank's representative,\nwith the assistance of representatives of the U. S. Department of\nAgriculture, will attempt to arrange for the leasing or sale of such\nproperty or if need be for the growing of the crops, with 6 view to\npreventing their loss through inattention.\nG. The Federal Reserve Bank of San Francisco and its\nrepresentatives will be cloaked with adequate authority to cope with\nproblems arising on the basis of existing circumstances. The program\nwill be flexible and at all times the Bank will attempt to keep matters\non a voluntary basis, satisfactory to the evacuee. Where these af-\nforts fail it may be necessary for the Bank's representative to step\nin and take the property over for the purpose of obtaining a fair and\nreasonable liquidation.\nIt is expected that the setting up of this program and the\naccordance to the evacuees of facilities for the liquidation of their\nproperty should greatly expedite the departure on & voluntary basis\nof the evacuees from the military area.\n3-4-42\nRegraded Unclassified\n77\nMarch 5, 1942\nI told McCloy about having seen the President\nthis morning, and that he was interested in what\nhappened to the Japanese after they get moved -\nnot in what happened to their property.\nPearaded\n3/5/42-\n78\nTHE SECRETARY OF THE TREASURY\nWASHINGTON\nMEMORANDUM FOR THE PRESIDENT:\nRe: General Aniline and Film Corporation.\nOn December 12, 1941 the Treasury installed\nrepresentatives in each of the properties of General\nAniline and Film Corporation for the purpose of super-\nvising the activities of the company and making an\ninvestigation of its affairs and personnel. Since\nthat time we have been proceeding as rapidly as may be\nwith 8. program of Americanization of the company and I\nshould like to summarize the developments up to date.\n1. On January 13, 1942 we suspended five\nkey executives of the company. They were: Rudolph\nHutz, Vice-President; William vom Rath, Vice-President;\nHans Aickelin, Director of Research; Leopold Eckler,\nActing Plant Manager, Agfa Ansco Division; and William\nvon Meister, head of the Ozalid Division. Subsequent\nevents have confirmed our belief that this action was\nRODEFENSE necessary, and it is contemplated that these men's\nBUY FIFTED connection with the company will be completely severed\nFATES\nwisses\n$03.00\n-\nRegraded Unclassified\n79\n- 2 -\nin the near future.\n2. Our investigation of the personnel of\nthe company has brought to light a substantial number\nof individuals who are pro-Nasi in sympathy and who\nwould, if retained in the company, constitute a\ndefinite threat to its continued operation. In each\nsuch case we have made the information we have un-\nearthed available to the Federal Bureau of Investiga-\ntion and, after clearing with F.B.I., have discharged\nthem. So far, 39 employees of the company have been\ndischarged because of serious doubt as to their loyalty.\nOf this number, the company, with our approval, dis-\ncharged 15, but refused to discharge the others at\nour direction and we were required to take action on\nour own.\nOf the employees discharged, 5 have since\nbeen arrested by the Federal Bureau of Investigation\nas enemy aliens, and I am informed that the arrests\nwere based at least in part upon information furnished\nby us to the F.B.I.\n3. On February 17, 1942 the Treasury took\ntitle to over 97 percent of the outstanding stock of\nRegraded Unclassified\n80\n- 3 -\nGeneral Aniline and Film Corporation, all foreign, and\nwe think German, owned. On the same day a discussion of\nthe general situation was had between Judge Mack,\nWilliam C. Bullitt, Homer Cummings, Ralph Budd, Leo\nCrowley, Gerard Swope, and Ed Foley. At the end of the\ndiscussion it was clearly understood that we would\nselect of competent, qualified man to run the company for\nthe Government and that after he had been installed, the\npresent management and board of directors will resign\nand turn the operation of the company over to our man.\nOur understanding with Judge Mack and the members of the\nboard is that they will stay on and help until our man\nhas his feet on the ground.\nAlthough you have heretofore approved our pro-\ngram for Americanizing the company and vesting its\nstock in the Secretary of the Treasury, I wanted again\nto bring the situation to your attention before taking\nthe final step which is the actuel displacement of the\nexisting management.\nRegraded Unclassified\nThe purpose of this latter La to Inform you of the policy\nLOSS (be Government proposes to pursue in handling the General Aniline\nFile Corporation.\nOur program envisages the elimination of all things in\nGenoral Aniline 6 Film Corporation representing control by German\nInterests. These controls stemmed in the first instance from owner-\nmip of the corporation by I. 0. Farbenindustrie which, in Mazi\nCompany, has been its staunchest bulwark and full partner. In\ndealing with its satellites outside of Germany, I. G. Farben\ndeveloped an extensive and well-organized system of controls, Men\nware trained in I. O. Farben methods and techniques in the home\noffice and plants, Some of these men were able technical men, others\nwere younger sons of the dominant families within the organization,\nbut all of them were men whose loyalty to I. G. Farben was\nenjuestioned and none of them would have been appointed to such\nimportant industrial posts outside of Germany if such had not been\nthe case.\nAS soon as they were trained they were sent to various\ncountries where they were placed in key technical or administrative\npositions in companies KL thin the I. G. Farben sphere of influence.\nThey were encouraged to marry within the new country and acquire its\ncitizenship, but they remained \"I. 0. Farben Men\"- Even after filling\nthe key positions in this way other control techniques were employed.\nAs recently as late in 1941 managerial policy was being dictated from\nGermany by transatlantic telephone, and until that year periodical\nofficial visits were the settled rule. Option agreements of bewilder-\ninc complexity reinforced or replaced control by share ownership.\nCross-licensing agreements, control agreements and agreements for the\nexchange of patents and \"know-how\", implemented by frequent exchange\nof information cerented enduring ties. All of these methods were\nfound to be present in General Aniline & Film Corporation.\nThe German-owned stock has already been vested in the\nSecretary of the Treasury. Furthermore, we have broken the lines of\ncommunication between the two companies in so far 2.6 they relate to the\nOpen exchange of information and \"know-how\", and we are and shall be\ndealing with the more obvious ways in which the operations of General\nAnilinetave been controlled from Germany in the past. More difficult\nis the problem of Company personnel, and that is a matter which\nrequires development somewhat in detail. An effective job of fresing\nthe organization from Jerman domination and vontrol requires the\nalimination of the I. G. Farben men.\nRegraded Unclassified\n82\n- 2 -\nIn practice, all persons of executive or managerial status\nwho have been connected with I. G. Farben will have to be replaced\nas soon as possible by men unquestionably devoted to American ideals.\nWith regard to technical personnel of similar background,\nour objective may take longer to attain. Assuming that these men,\nor some of them, have such technical qualifications as would make their\nimmediate dismissal impracticable from an operating standpoint, they\nwill be retained under surveillance for so long as is required to\nobtain and train suitable substitutes for them. In determining the\nrate of effecting these changes I expect to rely heavily on the\njudgment of the management.\nPersons of doubtful allegiance may also be found who do not\nhave I. G. Farben backgrounds. These, too, will be eliminated.\nHowever, our program does not involve the dismissal of employees\nsimply because they are of German birth or extraction.\nOf course, the whole program must be carried out with a\nview to maintaining, and wherever possible expanding, the operations\nof the Company whose products are so necessary in the war effort.\nRegraded Unclassified\n83\nThe following is a newspaper interview given by Tom Clark, Chief of\nStaff of General DeWitt's Civilian Alien Control Committee, published in\nthe San Francisco Chronicle, Thursday, March 5, 1942, page 6:\n\"He promised full protection for evacuated property owners\nand urged them 'not to sell their property unless they get fair prices'.\nCustodians of alien property will be named soon and Clark guaranteed\nthat all properties !whether owned by aliens or American-born will be\nreturned to the original owners after the war'.\n\"Our motive behind every procedure', he explained, 'is\nto treat the Japanese in a manner in which We expect our nationals to\nbe treated in Japan. This will be reflected in the manner we care for\ntheir property.\"\nRegraded Unclassified\n83\nThe following is a newspaper interview given by Tom Clark, Chief of\nStaff of General DeWitt's Civilian Alien Control Committee, published in\nthe San Francisco Chronicle, Thursday, March 5, 1942, page 6:\n\"He promised full protection for evacuated property owners\nand urged them 'not to sell their property unless they get fair prices'.\nCustodians of alien property will be named soon and Clark guaranteed\nthat all properties !whether owned by aliens or American-born will be\nreturned to the original owners after the war'.\n\"'Our motive behind every procedure', he explained, 'is\nto treat the Japanese in a manner in which we expect our nationals to\nbe treated in Japan. This will be reflected in the manner we care for\ntheir property.\"\nRegraded Unclassified\n84\nMarch 5, 1942\nMEMORANDUM FOR THE SECRETARY'S FILES\nConference in Mr. White's Office\nMarch 5, 1942\n10:00 A.M.\nPresent: Mr. White\nMr. Foley\nDr. Viner\nMr. B. Bernstein\nMr. Southard\nMr. Friedman\nMr. Currie\nThe Chinese reply on the draft of the loan agreement was\ndiscussed and it was agreed that pending a conference with the\nState Department any conclusions reached were necessarily tentative.\nOn this basis, it was concluded that (1) the Chinese suggestions\nshould be accepted, (2) that the letter from Dr. Soong could be\ntaken as a voluntary commitment to keep us informed, and (3) that\nthe sending of a letter from the Secretary, informing the Chinese\nthat because of the considerations outlined in their letter we are\naccepting their suggestions, would constitute a confirmation of\ntheir commitment to keep us informed.\nIt was also agreed that the phrase \"in the post-war period as\nwell as during the war\" should be deleted from the new Article II.\nRegraded Unclassified\n85\nMarch 5, 1942\n11:05 a.m.\nDEFENSE SAVINGS STAFF\nPresent: Mr. Tickton\nMiss Dallas\nMr. Sloan\nMr. Houghteling\nMr. Kuhn\nMr. Odegard\nMr. Graves\nMr. Adams\nMr. Callahan\nMr. Mahan\nMr. Duffus\nMr. Sparks\nMr. Gamble\nMr. Bell\nMr. Buffington\nMrs. Morgenthau\nMrs. Klotz\nMR. GRAVES: Mr. Secretary, we just concluded a\nconference with Mr. Bell and Mr. Broughton and others\nfrom Mr. Bell's staff on this question of changing the\nname of Defense Savings Bonds, and I wondered if you\nwanted to discuss that briefly.\nH.M.JR: The date that Bell names suits me. It\nis our anniversary.\nMR. GRAVES: In the first place, there are some\nwho think the change should not be made.\nH.M.JR: Not made at all?\nMR. GRAVES: Yes, and we were unanimous in feeling\nRegraded Unclassified\n86\n- 2 -\nthat it would be a mistake to attempt to change the\nname until the first of July.\nH.M.JR: The second is ruled out. Way don't they\nwant to change it to \"War Bonds\"? Do you leave out the\nword \"Saving\" or \"Savings Bonds\"?\nMR. GRAVES: We were thinking, I believe, in terms\nof using the term, \"War Savings Bonds.\" Mr. Odegard,\nI think, can present the case.\nH.M.JR: Against?\nMR. GRAVES: Against changing.\nMR. ODEGARD: Yes, Mr. Secretary. I belong to\nHis Majesty's loyal opposition here and--\nH.M.JR: Who is \"His Majesty\"?\nMR. ODEGARD: I don't know. I have been trying to\nfind out. (Laughter) As in the case of the opposition,\nI find myself in the minority. It seems to me that there\nare a number of reasons that have been advanced for chang-\ning the name to War Bonds. You will remember that\nimmediately after Pearl Harbor there was a great flood\nof correspondence from people who wanted Victory Bonds.\nYou will remember, too, that we had three different sur-\nveys made to determine the attitude of the public in so\nfar as that attitude is reflected in public opinion polls,\nto see which of several names were preferred, and without\nexception those polls have shown that Defense Bond was\nthe preferred name of the majority.\nNow, Mr. Graves argues, and I think with some cogency,\nalthough not too much cogency, that the mere fact that\nyou have sixty-five to seventy percent of the people on\nthese polls preferring Defense Bonds is in itself a good\nargument in favor of the change, because this shows the\ntype of complacent, negative attitude which is important\nto change at this time if the war is to be successfully\nprosecuted. But the reasons for changing can be, I think,\nlisted as two. One is that there have been a flood of\nRegraded Unclassified\n87\n- 3 -\ncorrespondence and objections raised by people all over\nthe country. That, I think, is not 8. valid reason for\nmaking the change in view of the other evidence that we\nhave. The second argument, which I think is more per-\nsuasive, but not persuasive enough, because it is based\non guesswork, is that the change of the name of the\nsecurity to War Bond would have a good psychological\neffect upon the country in the sense that it would help\nto toughen, and I am quoting Mr. Graves, would help to\ntoughen the attitude of people toward the war. It would\nadd at least a mite, that is my word, to the toughening\nprocess. Now, I raised the question, and it is a ques-\ntion that so far as I know hasn't been answered, what\nis there that could be done with our copy, with our\norganization, with our whole promotion effort, by chang-\ning the name to War Bond that can't be done by keeping\nDefense Bond? It seems to me that the reasons for the\nchange must be pretty overwhelming or else the change\nought not to be made. That is the substance. There\nare 8 good many other angles of it that I think could\nbe discussed.\nMR. BELL: In other words, you think the toughening\nprocess can come under Defense Bonds as well as the War\nBonds?\nMR. ODEGARD: I do. I don't think you have to have\nany nickname on these bonds, as I suggested in your\noffice, Mr. Bell. As a matter of fact, we had in our\nfirst posters, you will remember, \"For Defense\" across\nthe top, \"Buy United States Savings Bonds.\" We can have,\n\"For War, Buy United States Savings Bonds, \"For Freedom,\nBuy United States Savings Bonds, or anything else. The\nidea that you are going to have any appreciable effect\nupon the underlying complacency, so-called, of the\nAmerican people by changing the name of this security\nseems to me to be overly optimistic.\nH.M.JR: Well, let me ask you 8. question, as 8.\nmember of the majority party. If you had to start right\ntoday, what would you call it?\nMR. ODEGARD: If you had to start right today?\nRegraded Unclassified\n88\n- 4 -\nH.M.JR: New.\nMR. ODEGARD: I don't think I would nickname it at\nall. I would call them United States Savings Bonds,\nand I would make all my copy, war copy.\nH.M.JR: Well, I wouldn't argue with you on that,\nbut I certainly would argue with you on keeping the\nword \"defense\" in the name.\nMR. ODEGARD: Even in the face of every survey that\nwe have?\nH.M.JR: Yes. I think that - didn't they make some\nsurveys about Mr. Roosevelt running, and predictions?\nMR. ODEGARD: Yes, they all predicted his election.\nH.M.JR: In '36?\nMR. ODEGARD: Yes. Gallup - all the polls that we\nhave used did.\nH.M.JR: Gallup did?\nMR. ODEGARD: Yes. Oh, there were differencesas to\nthe margin. Fortune came closer to it than Gallup, but\nthat was for special reasons, which I don't think we\nought to go into here.\nH.M.JR: Well, I will tell you, Peter, is anybody\nelse on your side?\nMR. ODEGARD: I didn't detect anyone unless it was\nGeorge Buffington.\nMR. BUFFINGTON: I am, in a measure, on his side.\nMR. BELL: Would it be worth anything to get another\npoll? I understand you can get one within a few hours.\nH.M.JR: No.\nMR. BELL: Somebody said fourty-eight hours.\nRegraded Unclassified\n89\n- 5 -\nMR. ODEGARD: You can get a telegraphic poll in\nforty-eight hours.\nH.M.JR: Well, do I have to decide this? Can I\ndecide this?\nMR. GRAVES: No, I don't think 80.\nH.M.JR: I would like to decide it.\nMR. GRAVES: I think you can leave it to a vote\nif you like.\nH.M.JR: No, I don't want a vote on this?\nMR. GRAVES: It would be overwhelming.\nH.M.JR: Why didn't you say that in the first place?\n(Laughter)\nMR. GRAVES: I think this group, with the single\nexception of Mr. Odegard and perhaps Mr. Buffington,\nfavor changing the name of this security to War Savings\nBond.\nH.M.JR: Well, Peter, I hate to go against you,\nbecause your advice has been awfully good, but I am\nwilling to reconsider whether it should be United States\nSavings Bonds or United States War Savings Bonds, if\nthat means very much, if you want to fight on that front,\nbut I would like to see the word \"defense\" out.\nMR. ODEGARD: I think the word \"defense\" could go\nout of our copy, and we could toughen our copy, and I\nstill ask the question, which hasn't been answered, what\ncould we do by changing the name of the security that we\ncan't do without changing it?\nH.M.JR: Well, you can stop this. You can stop\npeople like Mr. Willkie from attacking us, including us\nin 8. lot of other things which I don't want to be a\npartner to. When he lists the things that aren't being\nRegraded Unclassified\n90\n- 6 -\ndone, I hate to be in that list.\nMR. ODEGARD: Suppose you were attacked for using\nthe word \"war\" instead of \"Freedom Bond\" or \"Victory\nBond\" or anything?\nH.M.JR: Oh, I would like to be attacked on that.\nThat I would enjoy, The word \"wartime\" has gone over\nawfully well. I am not crying for \"war,\" but I am\nopposed to \"defense.\"\nMR. ODEGARD: Well, I am not married to the word\n\"defense.\" As 8. matter of fact, I am open to persuasion,\nbut I just think that if you think that this is going\nto have any material effect on morale or any material\neffect upon the sale of Defense or United States Savings\nSecurities, that we arebeing too optimistic.\nH.M.JR: Well, I don't go that far, but I don't\nwant to be attacked. I don't want to be included.\nMR. ODEGARD: We were attacked before, immediately\nafter Pearl Harbor, for the same reason, by people almost\nas distinguished as Mr. Willkie.\nMR. KUHN: Well, I think there is another reason,\nMr. Secretary, that didn't exist at the time of Pearl\nHarbor. The whole Administration is trying to fight\n& tendency to pull our troops and our ships back home\nhere for defense. The means - one of the means by which\nthey are fighting that tendency is to strike the word\n\"defense\" out of all Government propaganda, out of the\nnames of Government agencies and so on. We are the\nmost permanent of all the Government agencies in the\nuse of the word \"defense.\" It is plastered over our\nletter paper, our posters. It inevitably comes up on\nthe radio, because it is the name of our product, and I\nthink that there is a real purpose behind it that is not\njust confined to this Department.\nMR. ODEGARD: Well, I think, Ferdie, that that is the\nonly argument that I have heard that has any cogency, and\nRegraded Unclassified\n91\n- 7 -\nI would still say that you can get rid of the word\n\"defense\" without giving another nickname to your\nbond, War Bond. I don't think the name of the security\nmeans much.\nH.M.JR: Let's have a showing of hands. Who would\nlike to keep it the way it is, if they would raise their\nright hand.\nMR. ODEGARD: I would like to keep it the way it is\nand change the nature of our copy.\nMR. BUFFINGTON: So would I.\nMR. BELL: Well, I would vote for United States\nSavings Bonds and leave out the word \"war\", and then\nput the \"war\" in your copy like we have \"defense\" and\nso on. I would vote for that.\nMR. GRAVES: Mr. Secretary, on that point, which is\nmade by Mr. Odegard and supported by Mr. Bell, I think\nthat is definitely wrong. Our bonds are now known not\nas Treasury Savings Bonds, which they are technically,\nas a matter of law, but everybody who talks about these\nsecurities talks about Defense Bonds. Defense Bonds is\nthe way these are popularly referred to everywhere.\nNow, take out the word \"defense\" and what have you\ngot left? You have got the word \"bonds\" and then you\nhave got to supply another word, \"Treasury Bonds\" or\n\"Savings Bonds,\" and in these times, those are weak\nwords, I think the public, if you strike out the word\n\"defense,\" they are going to demand that we put something\nin the place of that word. If we don't, you have got no\nlanguage to describe these securities. \"Savings Bonds\"\nor \"Treasury Bonds,\" what does that mean in times like\nthese?\nMR. BELL: That is what you had up until--\nMR. GRAVES: It is much weaker than \"Defense Bonds,\"\nin my opinion.\nRegraded Unclassified\n92\n- 8 -\nMR. BELL: That is what you had up until the last\ntwo or three weeks.\nH.M.JR: Up until the first of May. I mean popularly,\nDap. I am not talking about what is on our posters or\nwhat is on the face of the bonds. I am talking about\nwhat the people use, what language they use in talking\nabout them, and they are known everywhere as Defense\nBonds, and you take out the word \"defense\" and you have\ngot nothing.\nMR. BELL: Haven't they also been known as Savings\nBonds?\nMR. GRAVES: Yes, but people don't talk about them\nas Savings Bonds. They talk about Defense Bonds. Listen\nto your radio, listen to people who make speeches, listen\nto people talk in the street, and they say \"Defense Bond.\"\nMR. ODEGARD: That is right.\nMR. GRAVES: You take out that word \"defense\" and\nyou just collapse. You have got nothing.\nMR. ODEGARD: Yes, that is what you propose to do,\nchange it to--\nMR. GRAVES: No, we propose to call them War Bonds,\nWar Savings Bonds.\nH.M.JR: I think he is right. We are at war. I\nthink he is right. I am with you, Harold.\nMR. BELL: United States War Bonds?\nMR. KUHN: War Savings Bonds.\nMR. GRAVES: War Savings Bonds.\nH.M.JR: I don't know what you want \"savings\" in\nthere for.\nMR. GRAVES: Well, technically they have got to be\nRegraded Unclassified\n93\n- 9 -\nSavings Bonds, as I understand the statute, but that\nname quickly disappears when people talk about this\nthing. They will become known, in my opinion, as War\nBonds just as they are now knownas Defense Bonds.\nH.M.JR: How about you (Callahan) on your radio?\nMR. CALLAHAN: Oh, I am very enthusiastic about\n\"War Bonds.'\nH.M.JR: Where is Mahan?\nMR. MAHAN: Here, sir.\nH.M.JR: How about you?\nMR. MAHAN: It can very easily be - the change can\nbe made by July 1 without scrapping anything.\nMR. GRAVES: This is just a question of what name,\nSid.\nMR. MAHAN: Oh, \"War Bonds.\"\nH.M.JR: As an advertising man, what kind of a name\ndo you want on the thing?\nMR. MAHAN: Personally, I don't feel that it is\nimportant what name is on it. It is what we say about\nit, and I think we could still go with the present name,\nbut there are very real reasons why it should be changed,\nand I think it would stimulate interest.\nH.M.JR: Well, let's have it \"United States War\nBonds\" - \"Nar Savings Bonds, and we are going to do it\non the anniversary, May 1, and you are not going to scrap\nthe old copy, you can use it up, and even if you scrapped\nit all, I still could go one year from now in to the\nPoughkeepsie or Hyde Park post office and still find\nlast year's posters there. (Laughter) But I mean, it is\nan anniversary, and I have just been with the President\nthree quarters of an hour, and he is talking about this\ndelay and waiting and waiting and waiting, and I am not\ngoing to sit here and say that you can't change over in\nRegraded Unclassified\n94\n- 10 -\ntwo months. You will use up the material, but he (Calla-\nhan) can start next week. You can begin next week, if\nyou have to, but certainly on the first of May all your\nannouncements would be War Savings Bonds. It is like\nthis thing, some of the stuff in the newspapers is\n\"Victory Bonds,\" some is \"Defense Bonds, and gradually\nthey change over.\nMR. KUHN: Mr. Secretary, we have a million and\na quarter dollars worth of bonds already printed,\n\"Defense Bonds.\"\nH.M.JR: We will send them out just the same. We\nwill use them.\nMR. GRAVES: No, I don't think you could, Mr.\nSecretary. If you change the name of this security to\n\"War Savings Bonds, If I think the people are not going to\ntake over the counter a security that carries in red\ntype across the face, the words, \"Defense Savings Bonds.\"\nI think we have got to repleace these bonds.\nMR. BELL: And we have about a seven months' supply.\nMR. GRAVES: No, no, Dan, five at most.\nMR. BELL: Oh, I think we have two million pieces\nin various stages of completion at the Bureau of Engraving\nand Printing which will give you close to a six months'\nsupply of bonds.\nMR. TICKTON: Twenty-five million pieces altogether.\nH.M.JR: I will make you a little bet on the bond,\nwhether it is \"War Savings\" or \"Defense Savings\" or what-\never it is.\nMR. GRAVES: I think that is wrong, because it is\nin red type.\nH.M.JR: Well, starting with the radio, can you\nstart calling them War Savings Bonds as of May 19 Change\nRegraded Unclassified\n95\n- 11 -\nall your copy to \"war\" from \"defense\"?\nMR. CALLAHAN: Well, of course radio is a simple\nproblem, but the other material is a very difficult\nproblem.\nMR. KUHN: Sid, you had some figures on that, about\nthe National Cash Register, for example.\nMR. MAHAN: That is the one company, Mr. Secretary,\nthat is very badly involved. They have seven hundred\nfifty thousand stickers to put on cash registers and\ncards to go with them, and I called this morning. They\nare off the press and they are ready to go on that pro-\ngram. Now, if it was held over until July, they would\nreplace those cards at that time.\nH.M.JR: Well, look, gentlemen, we have got thirty\nminutes to go, and I will leave it with Graves and Bell\nto decide it. I am not going to fight. Just as long as\nyou decide on the name and as to when, I will leave it\nto the two of you.\nMR. GRAVES: As a matter of fact, if you will\nexcuse one further word about this, I think this could\ncome as a sort of compromise with Peter's point of view.\nWe can stiffen up all of our copy with respect to the\npresent bond. We can put \"war\" into our copy much more\nstoutly than we have, and then announce this change as\nsoon as we can dispose of the present stocks without\nwhat I would consider to be a very bad waste of money.\nH.M.JR: Well, you and Bell decide that.\nMR. GRAVES: All right.\nMR. BELL: And Mr. Secretary, make that statement as\nsomeone suggested, that it is not going to change over\nimmediately and destroy all this stock, we are going to\nsave that.\nMR. KUHN: Because it will be a point in our favor\nRegraded Unclassified\n96\n- 12 -\nwith the public if you are asked about the change of\nname to say, \"Well, we have so many months' supply of\nbonds and lots of people have financial outlays here.\nWe over.\" are not going to waste money in making this change-\nH.M.JR: Well, Ferdie, prepare a statement we are\ngoing to do it as of July 1 and why We don't do it\nearlier, and in my next press conference I can announce\nit.\nMR. KUHN: I will be glad to, something of that\nkind without mentioning July 1, explaining why we are\nnot deal. doing it at once. I think it would help us a great\nMR. BELL: Let's consider whether that will kill\nsales from now until July 1 before you do it.\nMR. KUHN: You wouldn't mention July 1, Dan.\nMR. ODEGARD: Sales will drop if you make an\nannouncement.\nMR. BELL: They certainly dropped last April when\nyou announced you were going to change over, didn't they,\nHarold?\nMR. GRAVES: Yes.\nMR. BELL: The bottom fell out of them.\nH.M.JR: Again, you fellows decide. Now, what else\nhave you got?\nMR. GRAVES: Well, sir, I would like to have a few\npeople tell you briefly some of the things that we are\ntrying to do. Perhaps we might talk a little about our\nfield work first.\nH.M.JR: Anything that you want.\nMR. GRAVES: Mr. Sparks, suppose you tell the status\nRegraded Unclassified\n97\n- 13 -\nof our additional staffing operation in the field.\nMR. SPARKS: Well, Mr. Secretary, we have just\nconcluded a series of regional field meetings in dif-\nferent parts of the country in which we gathered the\nadjoining states at a central place for the purpose of\ntightening up our entire field organization and bolster-\ning it wherever we felt that bolstering was required.-\nPreliminary to that we sent a letter and question-\nnaire out to the field so that the representatives in\nthe field that attended these meetings would come pre-\npared and not just be taken by surprise. The result of\nthat - of those meetings is that we have agreed to\nincrease the paid personnel in the field throughout the\ncountry to the extent of two hundred forty-five addi-\ntional employees. We also have another fifty-four em-\nployees that are schedule for addition to the staff in\nthe very near future, which would bring the total paid\npersonnel up to four hundred ninety-five. There has\nbeen a considerable increase in the number of volunteer\nworkers being--\nH.M.JR: I was going to ask you, could you let me\nhave a figure through Mr. Graves by Monday or as soon\nas it is practical, how many full-time volunteer work-\ners have we got - I mean, that work from nine to five,\nyou see, and some kind of a classification as to what\nthey do?\nMR. SPARKS: Yes, sir.\nH.M.JR: I mean, some kind of a classification. I\nmean, full time, Then you might give me part-time, too.\nMR. SPARKS: I can't give you that figure now, but\nI can give you now the actual recorded number of com-\nmittees and number of volunteer workers throughout the\ncountry.\nH.M.JR: Please.\nMR. SPARKS: It is five thousand committees with\nRegraded Unclassified\n98\n- 14 -\nseventy thousand members. That is the actual recorded\nnumber.\nMR. GRAVES: Mr. Tickton has--\nH.M.JR: Could I just say this, Harold? I didn't\nrealize yesterday that We have been out on the number\nof people that we wanted, and I told Harold Graves that\nwhen it came up next time, I would go up personally and\nask for it.\nMR. GRAVES: That will be about a month, I think.\nH.M.JR: I didn't realize that we had been cut.\nWhat is Tickton going to do?\nMR. GRAVES: He is going to tell us the payroll\nallotment situation.\nH.M.JR: Good.\nMR. TICKTON: In accordance with your request, we\nare asking all firms that have payroll allotment plans\nto report to the Treasury each month the progress of\nthe plan. There are, as of last week--\nH.M.JR: Excuse me a minute. I take it, Sparks,\nthat you have, either you or - how many people you would\nneed either on part or full time or volunteer basis, to\nget the billion dollars a month that Harold Graves has\npromised me by the first of May?\nMR. SPARKS: Yes, sir.\nH.M.JR: All right.\nMR. TICKTON: As of last week there were thirty-\ntwo thousand firms with payroll savings plans, of which\nfive thousand were firms with more than five hundred\nemployees and ten thousand were firms with one hundred\nto five hundred employees, and the rest of them were\nfirms with less than one hundred employees. Sixty-eight\npercent of the firms, of the large firms, with more than\nRegraded Unclassified\n99\n- 15 -\nfive hundred employees, had signed up. Thirty-eight\npercent of the smaller firms.\nH.M.JR: In my testimony at the tax hearing, I said\ntwo-thirds. That wasn't bad.\nMR. TICKTON: That is right. It was on the table\nwe gave you last week.\nH.M.JR: Good.\nMR. TICKTON: Approximately half of the number of\npersons employed by government and business are exposed\nto the plan. That is, their employers have the plan in\noperation. We have received from five thousand firms\ninformation on what they did under the plan in January,\nand that represents about half of the firms that actually\nhad plans in operation in January and the figures show\nthat in the smaller firms you have the largest percentage\nof participation and in the larger firms you have the\nsmallest percentage of participation, which is due pri-\nmarily to the mechanics of getting a large number of\nemployees signed up. The railroads, for example, have\nrelatively small participation, because it is much -\nvery difficult to get all the yardmen and railroad em-\nployees signed up, whereas in the smaller firms, in\nsome of the banks, for example, it is very easy to get\n& very large number of persons signed up that are coming\nin and can be - the sign-up can be obtained rather quickly.\nOn the average, about forty percent of the employees\nwho were exposed to the plan are participating. They are\ndeducting about four percent of their own salaries, which\namounts when we multiplied it out to about seven dollars\ntwenty-eight cents a month, which would be sufficient to\nbuy four bonds a year. If you multiply that out further\non the basis of these firms for the thirty-five million\npeople that are employed, it would produce about three\nbillion dollars out of your ten-billion-dollar yardstick\nthat you announced in your Baltimore speech.\nNow, of course some of these plans have just gotten\nRegraded Unclassified\n100\n- 16 -\ninto operation, and they hadn't gotten the thing work-\ning very satisfactorily, but I might point out that that\nseven dollars twenty-eight cents which is being deducted\neach month for each one of these employees compares\napproximately with the minimum amount that is required\non the Government plan. That is, a Government plan is\nthree dollars seventy-five cents a pay, which would be\nslightly less than what these employees are deducting.\nOn the other hand, a great many industrial concerns\nthat have reported to us indicate that their minimum\nreduction is about 8 dollar or seventy-five cents a payday,\nrather than three dollars seventy-five cents under the\nGovernment plan. Taking the largest companies that\nreported for December and January, General Electric leads\nthe list of course with eighty-five percent participating\nin January and approximately five percent of the employees'\npayroll being deducted, which is very high for companies\nthat have such a large percentage of participation. They\nare doing pretty well. Companies that have the small\nparticipation have a higher percentage, but of course\nthat is because a lot of the office workers and executives\nwere able to sign up first and naturally that represents\na higher proportion of the salaries than would otherwise\nbe expected.\nLast month we gave you a list of concerns that had\nthe Navy \"E\" flag, where they answer as to whether or\nnot they had the plan, and last month there were - of\neighty-two firms that had the \"E\" flag, thirty-six\nfirms did not have the plan. Those same firms have been\nchecked again and it is down by half. There are only\neighteen firms now where they had the Navy \"E\" flag\nin January that still don't have payroll saving plans.\nH.M.JR: And how many firms have our own flag now?\nMR. GRAVES: One.\nH.M.JR: Just one?\nMR. GRAVES: Yes. We have just gotten delivery of--\nRegraded Unclassified\n101\n- 17 -\nH.M.JR: The one I--\nMR. GRAVES: That is right. We have just gotten\ndelivery of the certificates.\nH.M.JR: Well, how many are entitled to them,\nHarold.\nMR. GRAVES: Oh, hundreds, and hundreds and hundreds\nare entitled to them. Many firms report in here that\ntheir participation is 8 hundred percent, in fact. We\nwill get out, within the next day or two, these cer-\ntificates to our state officers, and they will forward\nthem to the companies that are entitled to have the flag.\nThat was another problem that came up in connection with\nthis change of name, our certificates referring to the\nbonds.\nH.M.JR: Are you going to have local publicity when\nthe flags are presented?\nMR. GRAVES: Yes. We give 8 certificate, merely,\nthat has your facsimile signature on it and the signature\nof the chairman of our state committee and the state\nadministrator. That is given to the company or to the\nunion, and then they buy the flag from companies that\nwe designate or authorize to manufacture the flag. That\nought to be in pretty good shape within B. couple of\nweeks.\nH.M.JR: Were you through, Tickton?\nMR. TICKTON: Unless Mr. Graves wanted something\nelse.\nMR. GRAVES: No, I think this payroll allotment\nthing was about the most important.\nH.M.JR: It is.\nMR. TICKTON: In the large firms that have been\nreporting, 8 great many have 8. negligible percentage of\nRegraded Unclassified\n102\n- 18 -\ntheir total payrolls going to the plan. That is just\nbecause B. great many of them write us that they have got\na lot of transient help that they never expect to\ncover on the plan. There are a number of firms in the\ncountry who don't like the payroll plan from a mechanical\npoint of view and are attempting to circumvent it by using\nstamps. That is, instead of actually accumulating the\nfunds in their own office or through their bank, they\nprefer to hand the man his payroll consisting of twenty-\nfive dollars and five dollars' worth of stamps or what-\never the figures amount to. Mr. Sparks doesn't consider\nthose as payroll plans, and we are not counting them,\nbecause the man who gets the stamps may do anything with\nthem besides turn them in for a bond. The mechanical\ndifficulties do not, apparently, oppress the largest\ncompanies as against the smallest companies, because\nthe largest companies have to do 8. large proportion of\ntheir bookkeeping on machines anyway and it can be\nhandled, but in & great many small companies, they send\nus & lot of letters with 8. mild amount of griping and\na great many of them don't want to be bothered as far\nas reporting is concerned. We don't have any trouble\nwith the large companies reporting. Once they start,\nthey continue to send us the information, and we are\nplanning to have that information available within about\ntwo weeks after the close of the month. That is,\ntwenty-thousand of my forms will go out, and I expect\nI will have ten thousand replies within two weeks from\nnow, and we will turn those over to the field offices,\ncopies over to the field offices so that the field\noffices will be able to check up on those firms that\nshow relatively low participation one month after another.\nThere is a minor difficulty there. Some of the\naircraft firms point out that their figures are supposedly\nwar secrets, 80 we may have to make some special arrange-\nment to pull those out, but that is spotty. Whereas\nBoeing will send it to me and 8. few others will send it,\nCurtiss Wright and Douglas say it is confidential.\nOn the other hand, the ship building companies are\nglad to give it. So it all depends on the fellow that\nis writing the letter for the company.\nRegraded Unclassified\n103\n- 19 -\nMR. GRAVES: There is one thing I would like you\nto check again, Mr. Tickton. You said, as I understood\nyou that we had no trouble getting reports from these--\nMR. TICKTON:- Once they start reporting to us - we\nhave a little trouble sometimes at the beginning. That\nis, out of five hundred companies that are over five\nthousand, seventy-five have not answered the letter for\nDecember or January, which is fifteen or twenty percent.\nMR. GRAVES: Although they have the plan in?\nMR. TICKTON: They already have the plan in. But\nonce we get them, they seem to be agreed that you ought\nto have the information, and they ought to be able to\ngive it to us in the form we ask, which is very simple.\nH.M.JR: Is that all?\nMR. TICKTON: Yes.\nH.M.JR: Now, who is your payroll deduction man\nhere, from your staff?\nMR. GRAVES: Well, we didn't bring him. He comes\nunder Mr. Sparks.\nH.M.JR: Who is he?\nMR. SPARKS: Mr. O'Malley and Mr. Touchstone. Mr.\nTouchstoneis in the field now. Mr. O'Malley is in\nWashington.\nH.M.JR: I see.\nMR. GRAVES: Would you care to have Mr. Buffington\ncomment at all on his--\nH.M.JR: No, because - yes. Just one second please.\nAll right, George.\nRegraded Unclassified\n104\n- 20 -\nMR. BUFFINGTON: Mr. Tickton raised 8 question\nabout some of these companies not reporting to the\nrequests from the Secretary's office. A number of\nthem with whom I talked have instituted the plan,\nbut their results, they felt, weren't good enough to\nreport. Many of them had only thirty to fifty percent.\nI called on ten companies in Chicago, varying in number\nof employees from five hundred to twenty thousand, and\nwithout exception every officer or employee with whom\nI talked was most enthustiastic about the plan. I\nraised with Mr. Graves the question about the presentation\nof the \"E\" flag. In one instance of banks, the Continental\nBank in Chicago and the First National, are practically\nidentical, both with respect to the number of employees\nand the average payroll. One of them - they had both\naccomplished between ninety-five and a hundred percent\nemployee participation. The deductions varied from three\nand a half with Continental to seven or seven and a half\nfor the First National. I found in connection with\nindustrial organizations, many of the officers in those\norganizations had checked with the bank to determine\nwhat they should expect from their employees. They\nchecked with Continental, and they got three percent as\nbeing a fair participation; and if they checked with\nFirst National, they got seven. I suggested to Mr.\nGraves in awarding the \"E\" flag it could be done to\ndifferentiate between the man who had done 8 pretty good\njob which the First accomplished and the Continental,\nwhich I didn't feel had done quite such a good job.\nIt would eliminate people from just getting the \"E\"\nflags and feeling that the job WRS done.\nAlso, I feel from talking with these ten corpora-\ntions that the higher you can get the participation\noriginally the better, because it is going to be very\ndifficult, probably, to raise it. The General American\nTank Car Corporation, for example, which is very largely\nwar effort, went immediately to a ten percent monthly\nparticipation or deduction from payrolls. There are many\nother companies like the banks who have not had increase\nin hours worked or increase in pay scales who can't reach\nthat ten percent; but if there could be some way of\naccurately measuring good performance when you give the\nRegraded Unclassified\n105\n- 21 -\n\"E\" flag, it might make the corporation work - put in\nmore effort on attaining those standards, however they\nare set.\nMr. Graves asked me if I had suggestions for that\nstandard, and I haven't yet arrived at them; because\nif you differentiate in the color of the flag it wouldn't\nbe significant enough. If you put the percentage on the\nflag of deduction, it may change very shortly thereafter\nand be difficult to handle.\nH.M.JR: May I interrupt a minute? Somebody,\neither yourself, Graves, or somebody, should call on the\nVice-President and explain the payroll deduction plan.\nI don't think he understands it, and he is a strong advo-\ncate of forced savings.\nMR. GRAVES: Yes.\nMR. KUHN: Did you see the picture in the Herald\nTribune this morning, Mr. Secretary, the Senators and\nCongressmen signing their own payroll deduction pledges?\nH.M.JR: I guess I didn't. Somebody ought to call\non the Vice-President and tell him about this. Every\ntime it comes up he keeps throwing at me the forced\nsavings thing.\nMR. BUFFINGTON: The only other observation, there\nis a grand sales effort being made in the Chicago area,\nbut I don't feel that anyone in authority in Chicago\nknows concretely just what the over-all performance of\nthat area is. However, this record system is set up,\nand I think it would be an excellent thing to follow up\nif the Chicago office had an adequate record system.\nMR. GRAVES: In fact, didn't you make some\nsuggestions there, George, about setting up a local\nfollow-up system independent of Mr. Tickton?\nMR. BUFFINGTON: Yes.\nH.M.JR: I haven't seen George because just as\nsoon as he told me he only had good news, I lost\ninterest.\nRegraded Unclassified\n106\n- 22 -\nMR. GRAVES: I did make this suggestion to George,\nif you don't mind. I would like him to go to New York\nat his early convenience and spend a day or so there.\nH.M.JR: You can plan it for next week, George.\nMR. BUFFINGTON: I thought in going out there that\nthis was a plan that would have to be sold. I found in\nmany corporations the employees had requested the plan\nbeing put in operation. There seems to be complete cooper-\nation of the employers and employees in every place I\nwent.\nH.M.JR: Well, you could plan to go to New York\nnext week.\nMR. BUFFINGTON: Yes, I shall.\nMR. GRAVES: I would like to comment on one point\nmade by Mr. Buffington, which was that we are going to be in\ntrouble if we award the \"E\" flag to companies wholly on\nthe basis of the percentage of people who participate\nin the plan and without regard to the amount of their\nindividual payments. We struggled with that a long time.\nIn fact, the folks here put up to me & proposition that\nwe should impose two considerations before we award an\n\"E\" flag. First, that there had to be ninety percent\nor more participation; and second, that the amount of\nparticipation had to exceed five percent. I overruled\nthat myself, because it seemed to me that there were too\nmany differences in the wage levels of employees in\ndifferent companies. It would be easy for General Electric,\nwhich on the whole is a high paid personnel, to attain\nfive percent, whereas it would be a matter of extreme\ndifficulty for some organization, we will say, of sewing\nwomen or something of that kind, where the wages were\nvery low, to attain any such percentage, and we couldn't\nfind any formula that would be fair; and, therefore, we\nrejected this second factor and are now proposing to\naward this flag wholly on the basis of the number of\npeople participating without regard. to the amount.\nRegraded Unclassified\n107\n- 23 -\nMR. SPARKS: Mr. Graves, we found from experience\nthat when you stabilize the minimum, the minimum auto-\nmatically becomes the maximum.\nMR. GRAVES: Yes, that is another point. Now, there\nis & project that we have in mind that we consider to be very\nimportant in raising the rate of participation, which we\nhave referred to in talking with you as our pledge campaign\nI would like Mr. Gamble, if he will, please, to say a\nword or two about the progress of that, what we had in\nmind. In effect, Ted, if you please, on the participation\nin payroll allotment.\nMR. GAMBLE: Mr. Secretary, we have in some forty\nodd states a million two hundred fifty thousand people\nat the present time in varying stages and being trained\nto go into the field between March 15 and May 1.\nH.M.JR: How many?\nMR. GAMBLE: A million two hundred fifty thousand\npeople in some forty odd states being trained to conduct\nthis house to house, person to person cenvass.\nH.M.JR: You are going to have to prove that to me.\nMR. GAMBLE: Well, sir, these figures are too\nconservative.\nH.M.JR: Are what, conservative?\nMR. GAMBLE: They are conservative, yes. That is\nthe minimum number of people required to do the job.\nWe have at the present time in the State of Indiana\nthirty thousand odd people all ready organized to do\nthis job. We have completed the job in one state where\nwe used seventeen thousand five hundred people in the\nState of Oregon to conduct this canvass.\nH.M.JR: I know. That is a state by itself.\nMR. GAMBLE: Actually, Mr. Secretary, it isn't.\nWe have found just as high interest in the other states\nin this campaignaswe have found in Oregon. As a matter\nRegraded Unclassified\n108\n- 24 -\nof fact, the securing of the workers is a very simple\njob. We have found that we have had more workers--\nH.M.JR: Really? If it is so, it is the most amazing\nthing I have heard.\nMR. GAMBLE: We think it is the most amazing program\nthat has ever been conducted in this country. In addition\nto giving everybody in this country an opportunity--\nH.M.JR: The reason I question it, it seems unbeliev-\nable but - that you could do it; but if you are doing it,\nand you say you are doing it, I think it is amazing.\nMR. GAMBLE: Well, there are things in connection\nwith it that will be even more unbelieveable than the\nnumber of people that we have organized to do this job.\nH.M.JR: Excuse me, Ted. Do we have downstairs,\nVince, the record of the start-off of that organization\ncampaign, the defense transcription?\nMR. CALLAHAN : We have one across the street we can\nget over right away.\nMR. GRAVES: That is something I would like very\nmuch for you to hear.\nMR. CALLAHAN: It is a marvelous record.\nH.M.JR: If you will send it over to me.\nMR. GRAVES: It is a half hour state-wide hook-up\non all stations that started off the pledge campaign in\nthe State of Oregon. It is a wonderful job.\nMR. GAMBLE: I think you ought yourself, Mr.\nSecretary, to hear it, not because it came from Oregon,\nbut because it is typical of the reaction of the people\nout in the country to this program. It is not anything\nthat was inspired by the Defense Savings Committee, but\nit was something that was done by the radio people in\nthe State of Oregon, and it is now being done throughout\nthe country. We had a request yesterday from the State\nRegraded Unclassified\n109\n- 25 -\nof Pennsylvania for thirty of these transcriptions.\nMR. CALLAHAN: And all the New England States.\nMR. GRAVES: We have sent out copies of that to\nall our states.\nH.M.JR: I would like to hear that. I have never\nheard about it.\nMR. GAMBLE: In addition, of course, to giving\neverybody an opportunity to indicate what they are going\nto do about this bond campaign, we had hoped through\nthis effort to not only encourage new payroll savings\nplans, but to increase participation in plans already\nIn effect. We are studying the figures from the State\nof Oregon and from one county in Oklahoma which has been\ncompleted to try and ascertain what effect it has had\nupon payroll savings and upon participation. The belief\nis that it is going to have a very healthy effect. We\nwill have more definite information, of course, after we\nhave made additional surveys, but the reaction was\ninstantaneous. There were numerous new plans that sprung\ninto effect over night as & result of the pledge cam-\npaign, and firms that had been going along on two and\nthree and four and five percent participation became &\nhundred percent over night. We had firms with as many\nas a thousand employees that were signed up in forty-\nfive minutes as & result of this pledge campaign. These\nthings, Mr. Secretary, we have evidences of, and none\nof them were plants. Probably one of the most encourag-\ning things about this program is the seriousness with\nwhich the American people have accepted this job that\nwe have set out to do, They were ready and waiting for\nthese canvassers when they came to talk to them, and one\nof the things that we did not anticipate that we have\nexperienced is that it is going to take twice as long\nto do the job as we expected, because the people want to\ntalk to these canvassers about the bond program and about\nwhat they can do and about what they should do. In\naddition to that, as you know, we are going to have a\nhouse-to-house distribution of some fifty million savings\nschedules. It will probably be the most effective\nRegraded Unclassified\n110\n- 26 -\ndistribution job that has ever been done in this country\nbecause it is going to be a person to person distribu-\ntion. It is not going to be 8. question of leaving it at\n& person's door or in their mail box, but it is going to\nbe given them personally as a result of a call that will\nbe made upon them by some person that has been well\ntrained to represent this program. Briefly, I think,\nFr. Graves, that covers it.\nMR. GRAVES: Yes. I am glad you mentioned that\nschedule, because the effect of that--\nH.M.JR: This is all news to me.\nMR. GRAVES:\nought to be to raise the rate of\nparticipation, such as George Buffington mentioned.\nMR. ODEGARD: You had the schedule, Mr. Secretary,\nat the time of the Baltimore speech.\nH.M.JR: I said in the speech that I had it in my\nhand. But you know I have been for months on thís\nthing and they keep telling me about Oregon. I know\nOregon is special, and this one county in Oklahoma.\nBut anything like what Mr. Gamble says - if that happens\nit will be very encouraging.\nMR. GRAVES: Ted, I would like you to tell the\nSecretary also about the beginning and end of this\ncampaign, as far as the country as & whole is concerned,\nwhen we are beginning and when we are finishing.\nMR. GAMBLE: We are starting on March 15, Mr. Graves\nand it will take at least until May first to finish this\njob.\nMR. GRAVES: They are not beginning everywhere on\nthe same day.\nMR. GAMBLE: National \"V\" Day, the starting day,\nwill be different in different states. It is to be left\nRegraded Unclassified\n111\n- 27 -\nin the discretion of the state administrators as to\nwhen to start them, but it will be state-wide whenever\nit starts in & state.\nMR. GRAVES: Have you further time?\nH.M.JR: What have you got?\nMR. GRAVES: Well, I have the Callahans and Mahans\nand Houghtelings. We will put on as many as you would\nlike to - have time for.\nH.M.JR: Well, I will give Callahan the time. He\nwill be the last.\nMR. GRAVES: I would like to have, if you will\nallow me to vary this just for a second, I would like\nMr. Duffus to tell us a little of what happened last\nnight at this--\nH.M.JR: All right.\nMR. GRAVES: ... this sing.\nH.M.JR: Then I will say this, because I haven't\ndone this in so long. This meeting has been good for\nme. So, let's - so you are not so crowded, let's put\nit down for next Wednesday at ten o'clock, and I will\ngive you enough time so I won't crowd you. This is good\nfor me.\nMR. GRAVES: Yes.\nH.M.JR: Let's put it down for ten o'clock next\nWednesday and then run it through. So, we will hear\nabout this sing, and then I am afraid I will have to\nstop. I have gotten a tremendous amount of pleasure\nout of that parade of stars. I have heard two records\nnow and it is great stuff.\nMR. CALLAHAN: We have twelve made.\nRegraded Unclassified\n112\n- 28 -\nH.M.JR: I know. How many stations?\nMR. CALLAHAN: Seven hundred and four.\nH.M.JR: When you get one that is humorous, let me\nknow, something really humorous, and I will send it\nover to the White House. I don't want to send anything\nover unless it is humorous. Have you got any that are\nhumorous?\nMR. CALLAHAN: Olson and Johnson. I will have to\nfind a subtle humor rather than some of the obvious\nhumor. (Laughter.)\nH.M.JR: No, it needn't be too subtle. Well,\nlet's hear about the sing, Mr. Duffus.\nMR. DUFFUS: We had our first sing last night at the\nRiverside Stadium. We played to a little over six\nthousand people and sold all the stamps that we had at\ntwo booths in the lobby. We ran short on stamps, I am\nsorry to say that. The Army, Navy, and Marine Bands,\nLucy Monroe, Barry Wood, Irving Berlin, and the master\nof ceremonies was Walter Pidgeon. The - we worked the\nArmy in by inducting, inlisting fifteen volunteers on\nthe stage, and I think it was one of the highlights of\nthe evening.\nMR. GRAVES: Swearing them in as soldiers in the\nArmy.\nMR. DUFFUS: Yes, they took their oath of allegiance.\nH.M.JR: Did they cheer that?\nMR. GRAVES: Yes.\nMR. CALLAHAN: Oh, yes.\nMR. DUFFUS: Oh, yes, people stood up and applauded.\nH.M.JR: Were you there?\nRegraded Unclassified\n113\n- 29 -\nMR. BELL: Yes. I hever missed one of those. It\nwas really one of the grandest things I have seen.\nShe puts on a good show. That community sing she had\nhere last year at which there were about thirty-five\nthousand people at the Water Gate, it is really quite\nan inspiring sight, and you are amazed at the spirit\nwith which the people enter into it. I don't think\nthere was a soul left that place last night until it\nwas over, and it wasn't over until after eleven o'clock.\nI think it is grand. She is going to put on a grand\nshow all over the country.\nMR. GRAVES: What is her itinerary roughly,\nCarlton?\nMR. DUFFUS: Miami, St. Petersburg, New Orleans,\nMobile, Houston, El Paso, Dallas, Fort Worth, Oklahoma\nCity, and up the Mississippi Valley. We are going to\nwork it with the weather so that we can use the outdoor\nstadiums, because we can take care of so many more\npeople, and put on really a better show than we did last\nnight, I believe.\nH.M.JR: What other features, did you have?\nMR. DUFFUS: On the bill?\nH.M.JR: Yes. You said you had the swearing in\nof these soldiers.\nMR. DUFFUS: Well, three Minute-Men spoke on payroll\nsavings and various ways you can buy stamps and bonds,\nand the purpose behind the campaign. Mr. Rust selected\nthose from the District of Columbia Minute-Men Speakers'\nBureau, and, of course, we utilized various parts of the\nthree bands for musical novelties and the like.\nH.M.JR: And what did Irving Berlin do?\nMR. DUFFUS: He introduced a new song, a very short\none. He sang \"God Bless America.\"\nRegraded Unclassified\n114\n- 30 -\nH.M.JR: Did he?\nMR. DUFFUS: And Barry Wood sang \"Any Bonds Today?\"\nand helped in leading & couple of numbers for the entire\naudience.\nH.M.JR: Didn't they sing \"I Paid My Income Tax\nToday\"? (Laughter.)\nMR. DUFFUS: No. We are having a rally with Glenn\nMiller and his orchestra on the north steps of the\nTreasury this Friday, that is, on the Pennsylvania\nAvenue side, from one to one thirty in the afternoon,\nusing the large flag poster as a. background.\nH.M.JR: What time?\nMR. DUFFUS: One to one thirty, between his shows\nat the Capitol Theater he is coming over.\nH.M.JR: I see. Seriously, isn't there anybody\ninterested in this group in other than their own income\ntax, to get somebody else's paid? (Laughter.)\nMR. GRAVES: No, we are not interested in them.\nIt interferes with bond sales.\nH.M.JR: The President - who is his second press\nman?\nMR. KUHN: Hassett?\nH.M.JR: Hassett said to me, \"Mr. Morgenthau, I\nwant to compliment you on the cleverest piece of\npsychology I have seen since I have been here, launching\nyour new tax bill just before income tax date, because\nit makes everybody feel, well, how easily we are getting\noff this year. (Laughter.) He said he thought it was\nvery clever. Well, this is a good meeting, Harold.\nIt was good for me.\nMR. GRAVES: Fine, and we will be in again on Wednesday.\nH.M.JR: At ten o'clock to allow more time.\nRegraded Unclassified\n115\nMarch 5, 1942\n2:40 pm\nGENERAL ANILINE AND FILM\nPresent: Mr. Foley\nMr. O'Connell\nMr. Pehle\nMr. Bernstein\nMr. Pike\nMr. McConnell\nMR. FOLEY: Well, Mr. Secretary, I haven't had &\nchance to talk to these fellows very much. I had to\nget Joe out of New York, and Bob had just gotten back\nfrom Shreveport, and he was getting over this cold,\nand he was down in Middleburg, 80 we all just got\ntogether here a couple of minutes before we came in.\nI think that Bob knows generally what we have got in\nmind, and I think Bob is willing to help us. He says\nhe will need some help if he takes on the job.\nH.M.JR: Well, let me tell you, so that you will\nknow. Last Friday at Cabinet they raised this question\nin connection with the Japanese on the West Coast, who\nwas going to handle this thing, and they raised the\nwhole question, so I don't know just what the President\ndid or didn't want us to do, so I went in this morning\nto see him and said we were ready and I wasn't interested\nwhether we had it today, tomorrow, or next year, but I\nwas interested in cleaning up 8 mess for him, this Aniline\nand Dye particularly was a bad mess; and talking in the\nroom here, I thought if he would let me go ahead and do\nit, the less he knew about it the better, and it would\nbe good for him. So, he said, \"What are you waiting for\"?\nSo, I said, \"I just wanted to make sure that you wanted\nit.\" \"Go ahead, he said, \"clean it up. I want you to\ndo it.\" So, I told him he would have plenty of complaints\nand kick-back, and he said, \"No, go right ahead and do it,\"\nRegraded Unclassified\n116\n- 2 -\nand I said, \"After a couple of weeks or months something\nelse comes up and you want to change the arrangement, it\nis all right with me, but my thought for the minute is\nthat we could take these three companies and got the\nNazi influence out of them, and so forth and so on,\nand the President said, \"Go ahead,\" 50 on that basis with\nthe help that I can get, I thought we would do it, and\nas I told the President, we are going to be ruthless\nabout it. He said, \"All right.\" So, he raised the\nquestion about, could we get American chemists to do\nthis, and I said I was sure that we could. I didn't\nbelieve the Germans had & monopoly on anything. So,\nthat is it. I would like to get going this afternoon.\nWe have got this so-called charter of ours, laying down\nthe principles, and I should think that the thing would\nbe to send for Mack and his people and just tell them.\nMR. McCONNELL: Mr. Secretary, Mr. Foley called me\nin Texas. I told him I had two questions in my mind\nand I would like to think them over and call him back.\nH.M.JR: Does this machine bother you?\nMR. McCONNELL: Not a bit, no.\nH.M.JR: There is just one copy that goes in the\nsafe, but I can't remember, it is just - it is never -\nif it bothers you, we will stop it.\nMR. McCONNELL: Not a bit, Mr. Secretary.\nH.M.JR: All right.\nMR. McCONNELL.: You know, I have been quite active\nin defense work, and I am still chairman of the board\nof this engineers board that was appointed by the\nengineering societies. I don't like to admit it, but\nI do not believe that board would function as well if I\ngot off of it. The other question in my mind is the\nquestion of competence. This is a highly technical\nbusiness. The technical staff down below are going to\ndo very much as they wish to some extent unless the\nRegraded Unclassified\n117\n- 3 -\nimmediate superiors are well acquainted with the type\nof business they are doing and know what is going on.\nSo, somewhat at Mr. Foley's suggestion I suggested two\nadditional men to act under the policy laid down by the\nTreasury in the operation of that company, both of whom\nhave enough technical ability, and both of whom have a\ngreat deal of administrative ability. I think that some\nof these gentlemen here know both of them. One of them\nis & man by the name of Wilson, who is in the oil business.\nHo is president of Pan American, a smaller oil company,\nwhowasalso at the head of the chemical oil section of\nOPM, before the Oil Coordinator was appointed, and the\nother is a man by the name of George Moffett, who is now\nwith the RFC and has charge of sugar and alcohol\npurchases, the control of the RFC. He was chairman of\nthe Board of Corn-Planters. He is one of the most able\nmen that I knew of in OPM last spring.\nH.M.JR: George Moffett is 8. very able man.\nMR. McCONNELL: I think Robert Wilson is probably -\nI think Mr. Pike knows Wilson perhaps better than I do.\nHe is one of the outstanding chemists in the country,\nand he also has demonstrated his administrative ability\nin the company he has been operating. It seems to me\nthat however you do this, sir, you should want one or\nmore individuals, two or three, preferably, in my mind,\nwho would take the responsibility and the authority and\ndo that job which the Treasury wishes to be done with\nthis company. I don't know whether that has appealed to\nMr. Foley. I didn't have a chance to ask him before I\ncame in here, but to my mind, I don't think that any\none man would do as good a job as those three men and\nget it done as quickly, and get the company turned around\nin whatever direction - in the way of production.\nH.M.JR: Well, it sounds all right. I mean, each\nperson has to operate - three good men might be better\nthan one, and they might not. It depends upon how they\nget along, you know. The way I feel is, you can do it.\nIf you want two fellows to go with you or three fellows\nto go with you, that is your decision. That is the way\nI feel.\nRegraded Unclassified\n118\n- 4 -\nMR. McCONNELL: Were you going to ask this board\nto resign, this present board?\nH.M.JR: Yes.\nMR. McCONNELL: And you were going to appoint\nnew board members?\nH.M.JR: Well, there is this thought. Under the\nlaw it only needs three directors; and quite frankly,\nif you could keep the three directors within the manage-\nment, that would be much better, and then I won't have\nthe politicians calling me up to make political directors.\nAn alternative to that would be to have three directors\nwho would be appointed from the Federal Reserve Board of\nNew York, who would be advisers, you see. They would\nsimply be there in advisory capacity, and you could have\nyour executive committee run your company. I mean, I\nam just suggesting that as an alternative. In case\nSenator \"X\" calls me up and says, \"Look, Morgenthau, I\nhave got & swell director for you up in Buffalo; he is\na swell fellow, and I think you had better put him on,\"\nI can say, \"I am awfully sorry, Senator, but I have asked\nthe Federal Reserve in the second district to lend me\nthree of their men, because we want their interest and\nadvice, and they have loaned three men as directors,\nwho would be more or less in an advisory capacity.\"\nYou could go either way, I don't care, see, but I was\njust thinking there are two advantages. One is, it\nwould get the Federal Reserve interested. They cover\nthe whole district on the question of any refinancing\nor anything like that. You would have their advice,\nand you would be able to say, \"Sorry, gentlemen, there\nis no political pap. On the other hand, if you would\nrather haveyourself and these other two men as directors,\nthat will be all right.\nMR. FOLEY: Combine the two, Mr. Secretary?\nH.M.JR: As far as we are concerned down here, the\nonly thing that I am interested in is to do a good job.\nI want to get all the Nazi influence out of there, and\nRegraded Unclassified\n119\n- 5 -\nI want to get the company straightened out so it can\ntake on a maximum of war production, and I want to\nkeep politics out entirely. Now, how you do it and\nthe rest of that, that is up to you, and I don't expect\nour boys to interfere with you, you see.\nMR. McCONNELL: Well, there was another reason\nfor that. I don't believe that I could devote & hundred\npercent of my time to this.\nH.M.JR: Well, that is all right. You can do\nenough to--\nMR. FOLEY: You could organize it.\nMR. McCONNELL: I think it could be done very well.\nH.M.JR: This thing here, it is the first shot, and\nall these fellows running down and complaining about us\nand the rest of it and 80 forth, and do the one and\nset a pattern and then the others are going to be easy.\nThis is the only really big one anyway.\nMR. McCONNELL: I think that that suggestion would\nsolve your problem. I think it would take the responsi-\nbility and the worry of that particular company off your\nshoulders, and I think they would do as good a job as\nanybody I know of. I don't know whether Pike agrees or\nnot.\nMR. PIKE: Oh, I agree. I have known them for a\nlong while. They are good men. They are competent,\nand they are not scared of things.\nH.M.JR: Are they down here?\nMR. PIKE: Yes. Today, I don't know, but--\nH.M.JR: I mean, has Moffett separated himself from\nhis business?\nMR. McCONNELL: Practically, yes. I think he\nattends board meetings.\nRegraded Unclassified\n120\n- 6 -\nH.M.JR: I know George. He ran Corn Products\nas well as any corporating was run in this country.\nMR. McCONNELL: And he also has that technical\nability which I think is pretty necessary.\nH.M.JR: Has he got that?\nMR. PIKE: A surprising lot.\nH.M.JR: I didn't know that. Did he have e. plant\nin Germany? He has had them everywhere else.\nMR. PIKE: Yes, he did. They ground corn in Germany.\nH.M.JR: But, there are no connections there?\nMR. McCONNELL: Oh, no, he wrote it off.\nH.M.JR: But I mean no sympathetic connections?\nMR. McCONNELL: Oh, no, he is 8. hundred percent\nAmerican.\nH.M.JR: He could be a hundred percent American and\nstill not want to spit in Hitler's eye.\nMR. McCONNELL: Well, he has been spitting a hundred\npercent. I admire him very much. He won't make a good\nspeech, Mr. Secretary, and he won't talk to 8. large\nnumber of people.\nH.M.JR: He won't have to.\nMR. PIKE: One at 8. time, I take it, would be his\nspeed.\nMR. FOLEY: The thing that is most important in our\neyes, Bob, is to get somebody who doesn't believe that\nall of the knowledge in this field is in the heads of these\nGermans who have come over here, and who would be willing\nruthlessly to separate them when \"know-how\" can be substi-\ntuted of unquestioned loyalty and-not get any resistance\nfrom your management insofar as separating these fellows\nis concerned, because it might have some effect on produc-\ntion.\nRegraded Unclassified\n121\n- 7 -\nI mean if it is going to slow up production in\nthe beginning, from my standpoint, we have got to do that\nin order to be able to tell the War Department and the\nNavy Department that it is safe to deal with this\ncompany. Now, there is an effective boycott against\nthis company now, because of its German background, and\nthe presence in the company of these German sympathizers.\nSome of them have come over here and have become natural-\nized citizens, but they are still German, and they are\nstill representing their German connections.\nH.M.JR: Let me interrupt you. Who is this man,\nTom Clark, on the West Coast?\nMR. BERNSTEIN: He is the coordinator, acting\noriginally for the Attorney General in dealing with the\nJapanese.\nH.M.JR: Well, I read this to the President this\nmorning, just to show you. Here is Tom Clark, Chief\nof Staff of General, DeWitt's Civilian Alien Control\nCommittee. Now, he made this statement yesterday. I\nread this to the President today. He promised full\nprotection to evacuated property owners, and urged them\nnot to sell their property unless they get fair prices.\nCustodians of alien property would be - guarantee that\nall properties, whether owned by aliens or American-\nborn, will be returned to the original owners after the\nwar. And the President said, \"He is crazy. What is the\nmatter with him?\"\nMR. FOLEY: That is right.\nH.M.JR: So, I mean - maybe we are seeing things\nunder the bed, but General Aniline and Dye, certainly\nin Germany, typify in business everything that world\ndomination does, and so forth, and so on, and what\nwe are trying to do is to eliminate that influence.\nMR. McCONNELL: Your first objective is dependable\nAmerican management; and second, is capacity operation;\nand down the line?\nRegraded Unclassified\n122\n- 8 -\nH.M.JR: That is right.\nMR. PIKE: In other words, get these guys out if you\nhave to close & section down for a while.\nH.M.JR: Are you going to be able to help us on this?\nMR. PIKE: I hope SO.\nH.M.JR: Because I mean, every day they tell me you\nare off or on. I didn't call up Purcell, but the last\nword I got on Friday was from Harry Hopkins, that I could\nsettle it any way that I wanted, and any way that I\nsettle it was agreeable to the President and him, but\nthere wouldn't be any letters other than any letter that\nI wished to write.\nMR. PIKE: I think the President made it pretty\nclear to Purcell, and Hopkins did too. We felt that\nunder the circumstances - this move thing comes this\nweek. We are starting to move today. But there should\nbe no thought of my taking any vacation, permanent or\ntemporary, but that there is no reason in the world -\nHell, I am used to working until one o'clock in the morning.\nI kind of like to. Joe and I used to do it in Tennessee\nValley Authority together. In extra-curricular work,\nanything I can do, I will be very happy to.\nMR. McCONNELL: Well, I think that is an awfully\ngood suggestion.\nMR. PIKE: Without any official capacity or title\nor anything, but get in there and pitch whenever you\nthink I can be used.\nH.M.JR: Well, if you could do that as of from now\nuntil we get the board of directors out, and the next\nfew days will be the difficult time. The howl that is\ngoing up will be something terrible. Frankly, I am\ngoing to rather enjoy it.\nMR. FOLEY: You see, these fellows, Bob, did the\ntypical thing. They tried to buy protection by putting\npeople of influence in the administration and high places\nin this country, and paying them huge salaries,\nRegraded Unclassified\n123\n- 9 -\nHomer Cummings, John E. Mack.\nMR. PIKE: I had better make my confession now,\nhadn't I?\nMR. FOLEY: Those fellows. Now, Bill Bullitt\nhas resigned as chairman of the board, wrote & very\nnice letter and got out, but that is the situation.\nH.M.JR: You know, excuse me again for interrupt-\ning you, where Bill has been 8. perfect damn fool, if\nhe had released his letter a week ago, it would look as\nif he resigned. Now, if he and the board all go out at\nthe same time, it is going to look as though he had been\nkicked out.\nMR. PIKE: It looks as if he was going with the\nrest of the lot when he was out cleanly first.\nH.M.JR: And I can't understand it.\nMR. FOLEY: They don't know anything about business.\nThey haven't learned anything about the business, and\ndon't really care much about it except to take the cream\noff, and the boys in Germany are perfectly willing to\nhave them do it 80 long as they keep the thing warm\nfor the Germans after the war is over.\nH.M.JR: And this one New York law firm got two\nhundred fifty thousand dollars last year alone.\nMR. FOLEY: And they have got an ex-partner, a\nfellow named Williamson, executive vice-president, and\nhe is getting one hundred thousand dollars now. They\nare the conniving brains behind this thing, and they\nhired Homer Cummings, and they have already paid Homer\nCummings a hundred thousand dollars, and they got him\non a twenty-five thousand dollar retainer this year.\nHe suggested John E. Mack, and put John E. Mack in there\nat ninety thousand dollars. First after they began to\nput their satellites on the board, the first thing they\ndid was to increase the board of directors from fifty\nto two hundred fifty dollars 8. meeting, and pay the\nchairman twelve thousand dollars.\n124\n- 10 -\nMR. McCONNELL: All kinds of inducements.\nMR. FOLEY: All kinds, and they have been handing\nthe pap around.\nMR. McCONNELL: The Treasury owns this stock?\nMR. FOLEY: Ninety-seven and a half percent.\nMR. McCONNELL: Wouldn't you want one of your men on\nthe board, Mr. Morgenthau?\nH.M.JR: Oh, no.\nMR. McCONNELL: You would like to stay away from it?\nThen we probably should have a lawyer on the board, too.\nH.M.JR: Oh, we have got lawyers and economists.\nWe can always spare a lawyer or an economist.\nMR. McCONNELL: I don't know about the latter.\nMR. PIKE: Joe has been on it three months or more.\nMR. FOLEY: Joe will stay with you.\nH.M.JR: We can let you have & lawyer.\nMR. McCONNELL: Well, I have no hesitancy in recom-\nmending these men, but I would like the privilege of\nbringing them in and have a chance to discuss it with\nthem when you would like to discuss it with them, and\ncheck them up thoroughly.\nH.M.JR: Oh, Mr. McConnell, I don't want to do it.\nLook, if you and Sumner Pike would tell me that you will\ngo into this thing with Ed and Joe O'Connell, other than\nin the next few days to talk things over, if the two of\nyou will say, \"Now just forget about this thing, Morgenthau,\nwe will handle it, other than something tough, that is\nwhat I would like. I mean, I have had my battle and my\nRegraded Unclassified\n125\n- 11 -\nheavens - over this man. (Pike) I mean, there was more\nfinagling going on. He ought to be terribly flattered.\nMR. McCONNELL: Hasn't he been behaved? I feel a\ncertain responsibility for him.\nH.M.JR: Oh, he is all right.\nMR. FOLEY: You know, Bob brought him down here.\nH.M.JR: As soon as I ask for him, then everybody\nwants him. You said you had a confession to make.\nMR. PIKE: It is a confession. I just told Ed as\nI came in. I went to lunch with Ed Rose of the Public\nService of New Jerseyat the Carlton. He hailed across\nthe room, \"Come on over and eat with us.\" Homer\nCummings was there.\nMR. FOLEY: I told him it was a good thing he told\nthis, because we would have had a report on it very\nquickly.\nMR. PIKE: So, I have just had lunch with Homer\nCummings. I couldn't keep my face straight very well,\nunfortunately.\nH.M.JR: If you men want to do it, I don't want\nto - I mean to say, I am not washing my hands of it, and\nI am here; and if you say Mack won't resign or he will,\nor this or that, or I have got to tell him something,\nbut I an satisfied, as I say, with the two of you and\nthen whoever you want to get to help you, if you don't\nmind, I will just hold you responsible.\nMR. PIKE: Yes.\nH.M.JR: You see, I will just hold you responsible.\nBut we have fussed around with it, and I would like to\nget off the ground and get going on this thing. Now,\nEd told me, for instance, that the Army has just given\nthem a contract for a time-fuse or something.\nRegraded Unclassified\n126\n- 12 -\nMR. FOLEY: The Ordnance Department of the Army\nwants to give them 8 contract for a bomb fuse.\nH.M.JR: There must be others which are backed up.\nMR. O'CONNELL: There is a great deal of business\nthat is just waiting on our getting this thing straight-\nened around. The Binghamton plant, which has three hun-\ndred employees, is a plant that will probably go out of\nbusiness in a matter of months unless it is converted to\nwer production, and it is in process of being converted.\nThey cen be very readily converted to making shells and\nbomb fuses and all those things. The other biggest part\nof the company is the chemical and dye business, and, of\ncourse, they are working at what I assume to be capacity,\nbut I think they could do a great deal of work, and they -\nyou could expand their production fifty percent, and they\nstill wouldn't be producing as much as is needed. About\nsixty-five or seventy percent goes to defense. Practically\nall the copy dye is produced by them, and they really need\n& little drive, is what they really need, and we are\ngetting squared away with the War Department. I mean, these\ndirect orders. They gave them a contract three weeks ago\nfor a million and a half dollars of bomb shell fuses, and\nit had got down to Washington, end the Under-Secretary of\nwar called it off.\nH.M.JR: You see, I ought to explain it. I wrote a\nletter around putting all these departments under notice\nnot to, so they won't do it until we take the curse off.\nMR. FOLEY: Not only that, but after the matter was\ncalled to their attention and they found out how vul-\nnerable they were, they got SO scared they backed off so\nfar that Forrestal and Patterson signed & joint memorandum\nattached to B. memorandum from the Provost Marshall General\ngiving evidences of actual espionage within the company,\nand instances where information had been communicated to\nthe enemy, and they asked - recommended to the Secretary\nthat he take over the stock, amortize the company, and\nthat he do it quickly because they wanted to use the produc-\ntivity of the plant.\nRegraded Unclassified\n127\n- 13 -\nMR. PIKE: The case is very clear, and you don't\nhave to worry about that.\nH.M.JR: Well, why don't you do this, Mr. McConnell,\ntalk 80 more with them, but have you got any doubts now\nabout it?\nMR. McCONNELL: Well, I haven't any doubts as to\nyour policy.\nH.M.JR: How about doubts about your going into this\nyourself?\nMR. McCONNELL: Well, I have doubts about my own\nability to do this without & lot of help, Mr. Secretary.\nI don't know this business.\nH.M.JR: I didn't mean that. I mean, are you ready\nto take off your coat and go to work?\nMR. McCONNELL: If these gentlemen will come along,\nsubject to your approval.\nH.M.JR: Sure, you fellows have got to get the\nassistants you want, but let's say if it isn't them, it\nmight be somebody else.\nMR. McCONNELL: Yes.\nH.M.JR: In other words, I would like to start the\nthing going this afternoon.\nMR. McCONNELL: Well, I think we can get right\nstarted on it, and I think we can get hold of these\nfellows as soon as we get back to Foley's office.\nH.M.JR: And you (Pike) can stick with us until\nWe can get these fellows started.\nMR. PIKE: I will do everything I can in the mean-\ntime the commission allows me.\nH.M.JR: Listen, you don't have to put the stuff\nin the van.\nRegraded Unclassified\n128\n- 14 -\nMR. PIKE: But, I do have to be around-- (Laughter.)\nYour boys have been benefiting quite a little bit. Mr.\nBernstein has just held his hands out and collected six\nor eight very good men in the last few weeks.\nMR. FOLEY: They fell off the tree. We didn't\nshake it.\nMR. PIKE: The gale is on, boys, and the apples are\nfalling to the ground, and another little push and there\nwill be about sixty or more off in the next few days.\nOnce we get them in Philadelphia, they will all go to\nsleep like good Philadelphians, and we won't have any\nmore trouble. (Laughter.)\nH.M.JR: Now, Joe, are you looking for any troubles\nI ought to know about?\nMR. McCONNELL: No, I don't think we will have any\ntrouble.\nMR. FOLEY: How do you think we ought to handle\nthis?\nH.M.JR: Look, why don't you go back to your room\nand I am here if you need me, see.\nRegraded Unclassified\n129\nMarch 5, 1942\n3:15 p.m.\nLeo\nCrowley:\nHello.\nHMJr:\nLeo.\nC:\nYeah.\nHMJr:\nGood afternoon.\nC:\nHow are you?\nHMJr:\nI'm fine.\nC:\nThat's good.\nHMJr:\nI had quite a talk with the President\nC:\nYeah.\nHMJr:\nand as a result of that, we're going to\nmove in on Aniline Dye\nC:\nFine.\nHMJr:\n.....and on Bosch and on Schering.\nC:\nThat's good.\nHMJr:\nHe wante us to go ahead at once.\nC:\nThat's good. How did you get along with him\nwith the general picture, all right?\nHMJr:\nWell, we Just discussed this, and he doesn't\nwant to wait and he wants me to go ahead with\nthis.\nC:\nFine. If I can help you any on it, let me\nknow.\nHMJr:\nWell, I know you can.\n0:\nAll right.\nHMJr:\nBut - and Ed will be in touch with you. But I\nRegraded Unclassified\n130\n- 2 -\nwanted to let you know that I'm doing this only\nafter explicit orders from the President.\nC:\nFine. I'm glad you're going in on them.\nHMJr:\nAnd he wants it cleaned up, and I'm going to\ndo it and not bother him.\nC:\nFine and dandy.\nHMJr:\nAnd Ed will be in touch with you.\nC:\nFine. I'll help him.\nHMJr:\nThank you.\nC:\nGood-bye.\nRegraded Unclassified\n131\nauthor unknown.\norig to Deary 3/5\n132\nMOST INTERESTING ITEMS\nPage\n32\nCharge that Treasury officials deceived the President\nto induce his approval of a memorandum for the\nsuspension of five corporation officials.\nInnuendo that Messrs. Foley and Berle \"concocted\" a\nplan to discharge Ogden Hammond and concealed the\nfull facts even from Secretary Morgenthau.\n33\nStatement that \"high authority\" advised Homer Cummings\nand Judge Mack to launch a counter-offensive against\nTreasury and State Department officials, and that\nthis advise was followed.\n35\nRecommendation to have James Roosevelt employed as\nsalesman on the West Coast \"with adequate compensa -\ntion\".\nOTHER INTERESTING ITEMS\n11 & 12 How Homer Cummings was retained by Breed.\n13\nInnuendo against Vice President Wallace.\n14\nInnuendo against Garey and Garey.\n15\nInnuendo against Edward Foley.\n18\nHow Ogden Hammond met Lilly Stein, the German Spy.\n19 & 20 Selection of Judge Mack by Homer Cummings.\n21\nAttack against the Treasury Department for alleged\ninaction.\n29\nInnuendo that the Treasury Department did not\ncooperate with the management but that the Department\nof Justice did.\n30\nInnuendo that personal pique at & letter concerning\nStammler brought about Treasury action.\nRegraded Unclassified\n133\nMEMORANDUM FOR MR. BULLITT\nRe: General Aniline & Film Corporation\nI. G. Farben of Frankfurt, Germany first established\nsome time in the late 1880's had by the outbreak of the\nfirst World War in 1914 become one of the most powerful\ncorporations and industrial cartels, entirely concentrated\nin the chemical and dye field with subsidiaries and af-\nfiliates covering the world. Out of the first World War\nand the entry of this country into it in 1917 came the\nseizure of all American properties of I. G. Farben and\nafter the war these were blanketed by American capital\ninto en organization which is today Allied Chemical & Dye\nCorporation and its subsidiaries. Certain of the German\nproperties and formulas also passed to DuPont.\nThe difficulty with Allied Chemical & Dye was that\nit never kept up its research while I. G. Farben went\nshead in the years immediately following the first World\nWar. By the middle 20's I. G. Farben had again achieved\n8. position of world dominance in the chemical and dye\nfields and entered into licensing agreements throughout\nthe world with its principal competitors. In the late\n20's I. G. Farben had progressed to the stage where it\nRegraded Unclassified\n134\n- 2 -\norganized two foreign holding corporations, one a Swiss\nCorporation and the other an American Corporation, namely\nI. G. Chemie and American I. G. This simplified account\ndisregards numerous other less important foreign sub-\nsidiaries. Except for noting that I. G. Chemie was\norganized and controlled and has ever since by direct\nor indirect methods been entirely controlled by I. G.\nFarben, we hereafter disregard the subsequent history of\nI. G. Chemie insofar as it does not enter into the picture\nof the General Aniline & Film Corp. If any questions\nshould arise 8.8 to the absolute control by I. G. Farben\nof I. G. Chemie, various memoranda, statistics and other\nsupporting evidence can be adduced at great length to\nshow both the continuing and absolute nature of this\ncontrol.\nIn 1929 I. G. Farben had enough interests in America\nand was receiving enough money from its patent licenses\nto desire the establishment of a separate American branch\nof its business, hence American I. G. was organized. I. G.\nFarben was unduly anxious to distribute its assets as\nwidely as possible, due to unsettled conditions in Germany,\nand also to obtain American capital. This it did by\nRegraded Unclassified\n185\n- 3 -\nissuing approximately twenty million dollars worth of\nbonds of the new American company which it, the I. G.\nFarben of Frankfurt, Germany, guaranteed both as to\nprincipal and interest. The bankers for this loan were\nthe National City Bank, headed by Charles E. Mitchell\nand by Henry Mann, Vice President in Charge of European\nAffairs, & naturalized American citizen of German ancestry,\nwith his then office at Berlin. Of this $20,000,000\nissued to the American public in bonds, approximately\n$18,000,000 are now still outstanding in the hends of\nAmerican holders.\nThe organization of the American I. G. occurred in\n1929. One year prior to this time I. G. Farben had\norganized the Agfa Ansco Corporation to care for the\nAmerican camera and film market. These and other I. G.\nFarben corporations were merged into one, General Aniline\nCorporation in 1939. Two of the present directors of\nGeneral Aniline & Film, William C. Breed, senior partner\nof Breed, Abbott & Morgan of New York City, and W. H.\nBennett, Chairman of the Board of the Immigrant Industri-\nal Savings Bank of New York City, became members of the\nAgfa Ansco Corporation Board. About this time I. G. Farben\nRegraded Unclassified\n- 4 -\n136\nalso organized a company known 0.5 the General Dye Stuffs.\nThis Corporation, however, was wholly owned by two\nnaturalized Germans, Ernest Hallbach and W. H. Duisberg-\nDuisberg comes from an old I. G. Farben of Frankfurt\nfamily, his parents having been leading figures in the\noriginal formation of the German dye cartel. The General\nDye Stuffs Corporation was formed mainly to handle the\nimport and sale of I. G. Farben's dyes. In the beginning\nonly a small proportion of its sales came from American\nI. G. but as the American branch expanded an increasing\nshare of General Dye Stuff's business came from this\nsource. A contract between American I. G. and General\nDye Stuff was entered into whereby the latter undertook\nthe sale of all products of the American I. G. with\ncompensation at the rate of 10 per cent. This rate of\ncompensation was changed from time to time until lately\nit stood at 15 per cent on a constantly expanding sales\nmarket and in the calendar year of 1941 costing General\nAniline & Film Corp. approximately $4,000,000. The full\nfacts concerning General Dye Stuffs are more fully brought\nout in the complaint of General Aniline & Film Corp. filed\nin January 1942 to cancel saiá contract, copy attached\nhereto and marked Appendix \"A\"-\nRegraded Unclassified\n13?\n- 5 -\nGoing back to 1929 and the original organization of\nthe American I. G. which has now become General Aniline s\nFilm Corp., I. G. Farben was extremely desirous of secur-\ning & top American financial name to go on the Board of\nDirectors of American I. G. Insomuch 8.8 the Ford Motor\nCompany through its English subsidiary, Ford Motors\nLimited, was organizing 8. Ford Motor Company of Germany\nthrough Charles E. Mitchell and Henry Mann on the one\nhand and Dr. Carl Bosch representing I. G. Farben on the\nother, Mr. Edsel Ford, became & director first of American\nI. G. and later of General Aniline & Film Corp. while\nDr. Bosch became 8 director of the Ford Motor Company of\nGermany. Mr. Ford retained his post as a director of\nGeneral Aniline & Film Corp. until sometime in the\nsummer of 1941 when amidst the gathering governmental\ndifficulties he resigned from the Board.\nAfter 1929 the history of American I. G. is one of\nuninterrupted growth and prosperity undisturbed by any\nuntoward influences until the year 1939. Starting with\n8 negligible share of the American market, by that time\nAmerican I. G. had become the second film industry of the\nUnited States and in effect the only competitor of Eastman\nRegraded Unclassified\n138\n- 6 -\nKodak Company on the one hand and the third most important\nproducer of dye stuffs and chemical dyes on the other,\nranking after Allied Chemical and DuPont. However, the\nset-up of this organization was composed of various com-\npanies and subsidiaries and it was decided in 1939 with\nthe shadow of the second World War already on the horizon\nto simplify the corporate structure of these American com-\npanies owned or controlled by I. G. Farben. Hence, in\n1939 General Aniline & Film Corp. was formed. Its prin-\ncipal officers were Dr. Carl Bosch (Chairman of I. G.\nFarben), Chairman of the Board, Mr. D. A. Schmitz (brother\nof Geheimrat Doctor Herman Schmitz president of I. G.\nFarben), president of General Aniline & Film and Messrs.\nAickelin, Rudolph Hutz, W. P. Pickhardt, Ernest Schwarz,\nW. H. vom Rath, F. W. von Meister and Hugh S. Williamson.\nWilliamson whose name will figure prominently in other\nconnections later was formerly 8 junior partner of Breed,\nAbbott and Morgan and because of his adept fitting into\nthe picture as shown by his many trips to Germany, was\nrewarded with office as vice president and treasurer of\nthe new company.\nRegraded Unclassified\n139\n- 7-\nFrom this point onward we are discussing General Aniline\n& Film Corp- whose predecessors we have heretofore briefly\ntraced. General Aniline & Film Corp. is a corporation\norganized under the laws of the State of Delaware with an\nauthorized capital of 3,000,000 \"A\" shares and 3,000,000\n\"B\" shares. Both \"A\" and \"B\" shares have equal voting\nrights. There are issued and outstanding of the \"A\" shares\nonly 529,700-2/3 shares of which 58,099-2/3 are owned by\n629 miscellaneous individual holders, C. G. Howland Shay,\nassistant Secretary of State owning 100 shares, whereas all\nthe other issued and outstanding \"A\" shares are owned\ndirectly or indirectly by I. G. Chemie. The \"B\" shares\nin the amount of 3,000,000 were all issued but 950,000 of\nthem were repurchased in June 1940 by General Aniline &\nFilm Corp. from I. G. Chemie for payment in cash, a device\nwhich it is readily seen was simply another method of trans-\nferring a portion of the capital of General Aniline & Film\nCorp. to Swiss I. G. Chemie. These 950,000 shares are held\nas treasury stock subject to resale at the will of the Board\nof Directors. The 2,050,000 shares of \"B\" are outstanding\nin the names of certain Dutch subsidiaries of I. G. Chemie\nwhich gives color to the so-called Dutch claim to ownership\nRegraded Unclassified\n- 8 -\n140\nof a portion of this corporation hereinafter more fully\ndiscussed. A. more detailed but somewhat confused account\nof these matters is contained in the printed document\nattached hereto and marked Appendix \"B\" and called \"History\nof Ownership of Securities of General Aniline & Film Corp.\"\nWe now concern ourselves with a brief history of\nthe interest of the various government agencies in this\ncorporation. The first group of people who became inter-\nested in this concern was the Securities & Exchange Com-\nmission. Around 1935 or 1936 the S.E.C. became interested\nin the question as to who was the beneficial owner of\nGeneral Aniline & Film Corporation. Company records and\nindeed the Company officials were unable to cast any light\non this subject and professed ignorance as to whether they\nwere actually controlled by Dutch, Swiss, English or German\ncorporations. Mr. Williamson accompanied by Mr. D. A. Schmitz,\non one of his numerous trips to Switzerland and Germany,\nwas informally told that I. G. Chemie of Switzerlend was the\nbeneficial owner of the shares. The S.E.C. from 1935 to\ndate has been very much interested in this matter and still\nis and still has no proof meriting court standing 8.8 to the\nbeneficial ownership at any given time of the stock of the\nRegraded Unclassified\n140\n- 8 -\nof a portion of this corporation hereinafter more fully\ndiscussed. A more detailed but somewhat confused account\nof these matters is contained in the printed document\nattached hereto and marked Appendix \"B\" and called \"History\nof Ownership of Securities of General Aniline & Film Corp.\"\nWe now concern ourselves with & brief history of\nthe interest of the various government agencies in this\ncorporation. The first group of people who became inter-\nested in this concern was the Securities & Exchange Com-\nmission. Around 1935 or 1936 the S.E.C. became interested\nin the question as to who was the beneficial owner of\nGeneral Aniline & Film Corporation. Company records and\nindeed the Company officials were unable to cast any light\non this subject and professed ignorance as to whether they\nwere actually controlled by Dutch, Swiss, English or German\ncorporations. Mr. Williamson accompanied by Mr. D. A. Schmitz,\non one of his numerous trips to Switzerland and Germany,\nwas informally told that I. G. Chemie of Switzerland was the\nbeneficial owner of the shares. The S.E.C. from 1935 to\ndate has been very much interested in this matter and still\nis and still has no proof meriting court standing 8.8 to the\nbeneficial ownership at any given time of the stock of the\nRegraded Unclassified\n141\n- 9 -\nGeneral Aniline & Film Corp. In this connection it might\nbe interesting to point out that I. G. Farben was accustomed\nto list balance sheets of its owned or controlled subsidi-\naries on the back of its annual report. The General Aniline\n& Film Corp. was so listed in the Annual Report of I. G.\nFarben of Frankfurt, Germany of 1939, and for all the\nyears from 1929 to 1939 inclusive.\nThe next governmental department to become interested\nin the General Aniline & Film Corporation was the Depart-\nment of Justice (Antitrust Division) which late in 1939\nbegan an investigation into the affairs of this corpora-\ntion along with certain other German controlled corporations\nin this country. This investigation has proceeded intensively\nsince and is not yet completed although to date it has\nresulted on December 19, 1941 in the indictment of the\nCorporation and its leading German officers for violating\nthe Antitrust Laws by the allocation of world markets in\ncriminal conspiracy with I. G. Farben of Germany. The\nCorporation alone, earlier in 1941, had been indicted\nalong with the Aluminum Corporation of America and American\nMagnesium Corporation for restricting the output of magnesium.\nOther more important and more sensational indictments are\nRegraded Unclassified\n- 10 -\n142\nexpected in February or March 1942. A copy of the indictments\nof December 19, 1941 is attached hereto and marked Appendix\n\"C\"- The other activities of the Department of Justice\nincidental to these investigations are more fully described\nin the following portions. of this memorandum.\nAs pointed out above, 1,500,000 of the \"B\" shares\n(all beneficially owned by I. G. Chemie) are listed on the\nstock books in the names of certain Dutch subsidiaries.\nWhen the invasion of the Netherlands occurred in May 1940,\nthese shares had not been transferred. Shortly thereafter\nthe \"freezing orders\" of the Department of Treasury clamped\ndown and forbade, amongst other things the transfer of any\ncorporate stock listed in Dutch names without the consent\nof the Department of the Treasury. In May or June 1940\nGeneral Aniline & Film Corp. and I. G. Chemie filed two\napplications with the Department of Treasury for the transfer\nof these 1,500,000 shares of \"B\" stock listed in Dutch\ncorporate name to I. G. Chemie. This application fell\nunder the jurisdiction of Mr. Edward H. Foley, Jr., general\ncounsel of the Treasury, and his immediate subordinates\nincluding Mr. Joseph J. O'Connell, Jr. and Mr. Bernard\nBernstein. Sometime later an Interdepartmental Committee\nRegraded Unclassified\n143\n- 11 -\ncomposed of Mr. Dean Acheson of the Department of State\nand a member of the firm of Covington, Burling, Rublee,\nAcheson & Shorb of Washington, D. C., Mr. Edward H. Foley, Jr.,\ngeneral counsel of the Department of Treasury, and Mr. Francis\nM. Shea, Assistant Attorney General, Claims Division, rep-\nresenting the Department of Justice, was formed. Before\nthis Committee the various interests lined up consisting\nprimarily of the company acting through its officers\nMessrs. Schmitz and Williamson and its counsel, Mr. Breed,\nof Breed, Abbott & Morgan, and Mr. Martin Saxe on the one\nhand and Dr. Werner Gabbler, attorney in fact for I. G.\nChemie and his attorneys, Messrs. Covington, Burling, Rublee,\nAcheson & Shorb on the other. Many documents were filed\nby the protagonists on this matter before both the Department\nof the Treasury and before the Interdepartmental Committee.\nNothing was ever accomplished. From the time of the applica-\ntion in 1940 to date, no action has ever been taken by\nthe Department of the Treasury or the Interdepartmental\nCommittee on this application.\nWe come now to the chronology which is a matter of\npersonal knowledge. Early in 1941 Mr. William Breed, finding\nRegraded Unclassified\n144\n- 12 -\nthat he was unable to make headway with the Department of\nTreasury, solicited the aid of the Department of Justice,\ninterviewing Messrs. Thurman Arnold, Fowler Hamilton and\nWilber Stammler- From time to time various interviews\nwere had with Mr. Breed and with Messrs. Schmitz and\nWilliamson resulting in the retention by Mr. Breed and\nhis firm, Breed, Abbott & Morgan, but not by the company\nwhich he then refused to represent, of Mr. Homer Cummings\nof Washington, D. C. as special counsel.\nThe first occasion of this employment of Mr. Cummings\nwas Dr. Gabbler's scheme of having the 1,500,000 shares\nwhose transfer was then and is now in question placed in\na voting trust agreement of which he and two other Chemie\nselected agents would be the trustees. Dr. Gabbler and\nhis counsel, Messrs. Covington, Burling, Rublee, Acheson &\nShorb, were of the opinion that this voting trust agreement\nwould avoid the powers of the Alien Property Custodian in\ntime of war. Mr. Cummings' opinion was to the contrary\nand a copy is attached hereto marked Appendix \"D\", and\nthrough acceptance by the Department of Justice became in\nfact the law of the case. This voting trust scheme was\nRegraded Unclassified\n145\n- 13 -\nthen dropped. In this, however, as in his other ventures,\nDr. Gabbler and I. G. Chemie had the active support of\nthe Minister from Switzerland, C. W. Bruggemen, whose\nwife is the full sister of Vice President Wallace.\nAt about this time, that is in May or June 1941,\nMr. Edsel Ford became perturbed by the way matters were\nshaping up and in particular his vulnerable connection\nwith an obvious German interest and he therefore decided\nto employ Mr. Cummings as counsel to the end that he\nmight retire from any connection with General Aniline &\nFilm Corp. This was successfully accomplished in late July\n1941.\nEfforts meanwhile were being made by some of the\ndirectors, notably Messrs. Breed, Williamson and Bennett,\nto effect the sale of the I. G. Chemie stock blocked by\nthe Treasury to an obviously American interest. In this\nconnection Libby Owens Ford Corporation, among others,\nWAS approached and was greatly interested only to find\nat the crucial moment of negotiations that I. G. Chemie\nfound it impossible to part with their holdings. Later\non International Telephone & Telegraph Corporation was\napproached with much the same result. All of the above\nRegraded Unclassified\n146\n- 14 -\nnegotiations purportedly met with the approval or cooperation\nof D. A. Schmitz the president of the concern. In July\nthe directors received a telegram from the president of\nI. G. Chemie, Felix Iselin of Switzerland, advising them\nthat they should no longer concern themselves with the\nproblem of selling the stock and that I. G. Chemie had\nfound \"a 100 per cent American concern\" to which they\nintended to transfer their holdings. This concern was the\nGeneral Dye Stuffs Corporation mentioned earlier in our\nhistory. Paranthetically it may be noted that the stock\nownership of General Dye Stuffs had nominally already\npassed 51% into the name of D. A. Schmitz, and that in\nany event the three individuals named as owners of General\nDye Stuff stock, Duisberg, Hallbach and D. A. Schmitz,\nwere all complete tools of I. G. Farben- General Dye\nStuffs was represented in this matter by the firm of\nGarey & Garey of New York, a firm of somewhat questionable\nantecedents and background. Raoul Desvernine (a former\nclassmate and friend of Thurman Arnold who banked too\nheavily on this connection) formerly & partner of Miller,\nMiller, Hornblower, Weeks & Boston, now the Wendell Willkie\nRegraded Unclassified\n147\n- 15 -\nfirm, but who on dismissel from that firm became associated\nwith and later president of Crucible Steel Corporation, and\nwas summarily dismissed from that post in November 1941 and\nthereafter became a partner of Garey & Garey under the firm\nname of \"Garey Desvernine & Garey\" was associated as counsel\nwith Garey & Garey in this matter. These individuals and\nfirms along with Covington, Burling, Rublee, Acheson &\nShorb represented Dr. Gabbler, attorney in fact for I. G.\nChemie, throughout the discussions wherein these people\nwere all pressing for the granting of the application to\nallow for transfer of the shares from Dutch to Swiss name\nand then to sell this stock to General Dye Stuffs. This\napplication was denied by the Treasury Department on\nOctober 2, 1941 after many weeks of delay, principally we\nunderstand through the activity of Mr. Bernard Bernstein\nin the absence from town of Mr. Edward Foley.\nTo return to our directors in New York at the moment\nthey received the telegram from Felix Iselin outlining\nthe aforementioned plan of sale, all of them including\nD. A. Schmitz professed innocence of any prior knowledge\nthat such an idea was thought of. It was a habit of\nRegraded Unclassified\n148\n- 16 -\nMr. D. A. Schmitz to receive advice and counsel from his\nbrother Geheimrat Doctor Herman Schmits each week by\ntrans-atlantic telephone. Geheimrat Doctor Herman Schmitz\nwould journey to Basle, Switzerland and the connection\nwould be put through to his brother in New York City.\nD. A. Schmitz anxious not to lose one particle of the\npearls of wisdom kept accurate stenographic transcripts\nof these calls in the top drawer of his desk at 230 Park\nAvenue- The Department of Justice officials requested\npermission to go through the company's papers, received\nit through the intervention and aid of Mr. Breed. (It\nmay be noted at this time that Mr. William Breed was\nbecoming more entangled in his activities as a director\nof General Aniline & Film Corp. and he brought in his\ndistinguished partner, Charles H. Tuttle, to give legal\nadvice on the complex matters of this corporation. The\ntime of these matters may be fixed as the latter part\nof August 1941.) The Department of Justice discovered\nthese transcripts of the telephone conversations and they\nbecame known to the other directors. This resulted in\n8. hurried meeting of the Board to discuss these recent\ndevelopments in which Mr. Schmitz appeared to be concealing\ninformation from his fellow members of the Board of Directors.\nRegraded Unclassit\n149\n- 17 -\nFrom that time forward until the meeting of September 23, 1941\n& great controversy raged in the Board of Directors and\nculminated in the removal of Mr. D. A. Schmitz as president\nof General Aniline & Film Corp. Throughout this period\nI. G. Chemie and its American representatives fought vigor-\nously for the retention of Mr. D. A. Schmitz and demanded\nthe resignation of his opposing directors. A complete\nprinted statement of the minutes of the meetings of the Board\nof Directors of the corporation from August 20, 1941 to\nOctober 2, 1941 inclusive are attached hereto and marked\nAppendix \"B\".\nThwarted in their attempt to gain control of General\nAniline & Film-Corp. and doubly inspired by the removal of\nD. A. Schmitz as president on September 23, Hallbach and\nDuisberg sought a new channel of approach within & few days\nof Schmitz's removal. The laws of the state of Delaware\nare such that a stockholders' meeting can be called and held\nwithout regard to size of the holding requesting it, when-\never the regular annual meeting of the stock has once been\npassed. No annual stockholders' meeting was held in April\n1941 or thereafter until this date because of the fact that\nthe Treasury's freezing of the I. G. Chemie stocks rendered it\nRegraded Unclassified\n- 18 -\n150\nimpossible to secure a quorum for the holding of such a\nstockholders' meeting. It then developed that a certain\nMr. Ernest Flender, & naturalized American citizen of\nGerman birth, who previously had served in the German\nImperial Army during the first World War, brought suit\nto Delaware before the Chancellor for a stockholders'\nmeeting. Mr. Flender was represented in this matter by\nthe firm of Garey & Garey and Mr. Desvernine. Of possible\ninterest is the fact that Mr. Flender, was a partner of\nRichard & Company, an old New York brokerage company\nwhose senior partner George N. Richard, had given a letter\nof introduction to Lilly Stein to Mr. Ogden H. Hammond, Jr.\nin May 1939. It will be remembered that Miss Stein has\nsince pled guilty and has been sentenced to ten years in\nFederal prison for espionage. Mr. George N. Richard, a\nJew of social ambitions, many of which have been realized\nin Long Island, and a friend of Mr. William C. Breed, was\nafter considerable pressure by Mr. Breed brought to compel\nMr. Flender to retire from future maintenance of this suit\nagainst the American directors. In Mr. Flender's place in-\nstead was substituted Dorothy P. Kahle, 8. sister of the late\nW. P. Pickhardt, already under indictment by the Department\n- 19 -\n151\nof Justice at this time and a relative also of Duisberg.\nThis suit was set for hearing in Delaware on October 10,\n1941. It became apparent to the Department of Justice\nthat this was merely 8. scheme to retain German control\ninasmuch as at any stockholders' meeting the free German\nheld\nstock would be certain to elect subservient directors\nand oust all opposing ones. Accordingly, under direct\norders of the Attorney General through the intermediation\nof Mr. Hugh Cox, first assistant to Thurman Arnold and\nMr. Wilber Stammler, Mr. Fowler Hamilton was dispatched\nto Wilmington to request 8. postponement for sixty days\nuntil the Department of Justice should have completed\nits investigation of the corporation. A copy of the\ntranscript of the proceedings had in the Chancery Court\nof Delaware on October 10, 1941 and the order of the\nChancellor postponing further hearing of this matter until\nDecember 10, 1941 is attached hereto and marked Appendix\n\"F\". Around this time the Hon- Homer Cummings consented,\nfeeling that a large portion of the German influence had\nbeen removed, to represent the corporation as such.\nMr. Cummings advised the directors that a man of impeccable\npatriotism and one known personally to the Administration\nshould be selected as president of the Corporation. John E.\nMack of Poughkeepsie, New York, was suggested.\nRegraded Unclassified\n152\n- 20 -\nThis suggestion met with some opposition from & group\nof the directors led by Mr. Hugh Williamson and in this con-\nnection it might be well to state that Mr. Williamson had\nsuggested the election of Messrs. Baragwanath and Tallbot\nas directors during the stormy period of the early fall.\nIt is believed that these directors were approved by Gordon\nRenschler of the National City Bank. In the meantime a ques-\ntion had arisen as to the voting power of foreign held stock\nand although both the Department of the Treasury and the De-\npartment of Justice because of interdepartmental difficulties\nrefused to rule upon this matter, Mr. Homer Cummings delivered\nan opinion on October B, 1941 that blocked stock could not\nvote and 8. copy of this opinion is attached hereto and marked\nAppendix \"G\". In the interim the affairs of the corporation\nafter the discharge of Mr. Schmitz as president were carried\non by Messrs. Hutz and Williamson, senior vice presidents.\nAfter considerable negotiation between William C. Breed and\nMr. Cummings on one side and Williamson and \"The National\nCity\" group of directors on the other, it W&S agreed to elect\nJudge Mack as president on October 31, 1941. Photostatic\ncopies of the minutes of the meetings of the Board of Direc-\ntors from October 7, 1941 through October 31, 1941 (at which\nRegraded Unclassified\n153\n- 21 -\nmeeting Judge Mack was elected president of the corpora-\ntion) are hereto attached and marked Appendix \"H\". This\nelection of Judge Mack as president and director of the\ncorporation was later approved and ratified at a special\nmeeting of the Board of Directors held on November 5, 1941,\nand a copy of the minutes of the meeting is attached hereto\nand marked Appendix \"I\".\nIt may be mentioned throughout this time among other\nagencies, the Department of the Treasury was constantly\nbeing solicited both by the Department of Justice and\nmembers of the company to intervene in the internal af-\nfairs of this corporation and make certain of the con-\ntinuance in office of the American directors 80 that their\npolicy of Americanization might be carried out. Throughout\nthis period the Department of the Treasury refused to take\nany action whatsoever. Further developments in this matter\nare shown by the minutes of the meetings of the Board of\nDirectors of November 5, November 14, November 21, 1941,\nand a copy of these minutes is attached hereto and marked\nAppendix \"J\". It is to be noted that Mr. W. H. Vom Rath\nresigned as secretary and director of the corporation on\nthis later date and was replaced by Mr. F. A. Gibbons as\nsecretary.\nRegraded Unclassified\n- 22 -\n154\nShortly afterwards as revealed by the minutes hereto\nattached Mr. Hans Aickelin also resigned as director of this\ncorporation. This left two vacancies on the Board of Direc-\ntors with a third vacancy shortly created by declaring vacant\nthe office of Felix Iselin as director. Mr. Iselin, despite\nrepeated promises by cable had never attended any of the\nBoard meetings. In the interim the approaching date of\nDecember 10, 1941 when the adjourned hearing in the Delaware\nChancery was again coming up was more and more in the minds\nof the directors and the managements of this corporation.\nAt this point the Treasury Department and the Inter-depart-\nmental Committee showed 8. peculiar reluctance to interfere\nwith the proposed stockholders meeting. John E. Mack and\nMr. Cummings together interviewed various Treasury officials\nincluding the Secretary and also Mr. Shea of the Department\nof Justice as well as the Attorney General personally. Mr.\nCummings was able to convince the Attorney General who pre-\nviously had been inclined upon the recommendation of Mr. Shea\nto do nothing in this matter that he should again intervene\nand request further postponement lest the company fall back\ninto the hands of German dominated interests. Accordingly,\nMr. Fowler Hamilton was again dispatched to Wilmington and\nRegraded Unclassified\n155\n- 23 -\nsecured a postponement of the stockholders meeting for 90\ndays or until March 12, 1942. A copy of the transcript of\nhis hearing before the Chancellor at Wilmington is attached\nhereto and marked Appendix \"K\". On December 10, 1941 8. for-\nmal reason to show cause why a special meeting of the stock-\nholders should not be held was filed on behalf of General\nAniline & Film Corp. and a printed copy of it is attached\nhereto and marked Appendix \"L\".\nRegraded Unclassified\n- 24 -\n156\nMr. Cummings and Judge Mack felt that 8 figure of na-\ntional importance and & person of considerable energy was\nneeded as director and Chairman of the Board to facilitate\nthe Americanization of the corporation. They suggested the\nHon. William C. Bullitt for this position. After 8. discus-\nsion with Mr. Bullitt and after he had thoroughly discussed\nit with prominent governmental officials he determined to\naccept this position. The interesting correspondence which\nis contemporary with your acceptance of election to the\nBoard of Directors is not attached hereto inasmuch as you\nboth have knowledge of it and retain copy of it in your\nfiles and it is not felt advisable to spread this matter\nfurther upon the files without your expressed approval. On\nDecember 5, 1941 Mr. Bullitt was elected a director of General\nAniline & Film Corp. and the minutes of that meeting are at-\ntached hereto and marked Appendix \"M\". A printed communi-\ncation signed by Mr. Mack as president of the corporation\nsent to all the stockholders of the corporation dated Decem-\nber 12, 1941 is attached hereto and marked Appendix \"N\".\nAlso attached hereto and marked Appendix \"0\" is a copy of\nthe last Annual Report of the Corporation, namely for 1940.\nRegraded Unclassified\n- 25 -\n15?\nIt may be noted that prior to this time and on\nDecember 1, 1941 Mr. Ogden H. Hammond, Jr., now on leave\nwithout pay from the Foreign Service of the United States,\nwas appointed by President Mack as his confidential aid\nand personal assistant with title of Assistant to the\nPresident with a salary of $7500 a year plus necessary\nbusiness expenses and he had entered immediately on his\nduties and continued there-in. This was done with the\nfull knowledge and consent of the Department of State as\nshown by the attached letters of Mr. Hammond, Jr. and of\nJ. Howland Shaw, Assistant Secretary of State, and marked\nAppendix \"P\".\nOn the morning of December 12, 1941 everyone in General\nAniline & Film Corp. was astounded by the sudden appearance\nof numerous Treasury agents under the personal direction of\nMr. Joseph J. O'Connell, Jr. as authorized Treasury repre-\nsentative in the office of the General Aniline & Film Corp.\nto seize control of the business under instructions of the\nSecretary of the Treasury marked through the Federal Reserve\nBank &S a part of the freezing control of the Treasury De-\npartment, a copy of the orders under which they acted, Bul-\nletin No. 2, is attached hereto and marked Appendix \"Q\"-\nRegraded Unclassified\n158\n- 26 -\nAfter some discussion with President Mack and other of-\nficers of the Corporation a general policy of cooperation\nwas agreed on between Mr. O'Connell and Judge Mack.\nMr. Stammler of the Department of Justice happened to\nbe present in Judge Mack's office on the morning of\nDecember 12, 1941 on which this seizure was made.\nRoutine matters occupied the remainder of the month\nof December 1941 with Judge Mack and the management de-\nvoting its time and cooperation to the War Department to\neffect protection of the plants and to plan further expan-\nsion in the interests of the Army and Navy. Judge Mack\nand Mr. Cummings also requested, through the Attorney\nGeneral personally, that the F.B.I. make an investigation\nof certain officers and individuals in the corporation.\nDuring this time Mr. Ralph Budd, President of the Chicago,\nQuincy & Burlington Railroad and adviser to President\nRoosevelt on transportation, and Mr. Robert L. Stevens\nof New Jersey and son-in-law of Brigadier General and\nMrs. Cornelius Vanderbilt, were elected members of the\nBoard of Directors at B. meeting of the Board held on\nDecember 19, 1941. Prior to this time Messrs. Aickelin\nand Schwartz had resigned as directors of the company and\nRegraded Unclassified\n159\n- 27 -\nMr. Schwartz from all positions whatever held in the com-\npany. The minutes of these meetings are marked Appendix\n\"R\" and are attached hereto. At a later meeting of the\nBoard of Directors held on December 24, 1941 Mr. Bullitt\nwas elected Chairman of the Board at & salary of $12,000\nper annum beginning with the date of his election and a\ncopy of the minutes of this meeting is attached hereto and\nmarked Appendix \"S\".\nIn the meantime the Treasury Department had expanded\nits activities in the Corporation. It was employing upwards\nof fifty agents throughout the plants of the corporation\nlocated through New York and New Jersey all under the di-\nrection of Mr. Sam Klaus to endeavor to ferret out any dis-\nloyal activities on the part of the personnel of the cor-\nporation. The Department of Justice in the first and most\nminor of its series of indictments springing from the long\ncontinued investigation of the affairs of this company on\nDecember 19, 1941 indicted the Corporation and many of its\nprevious officers and directors in a series of indictments,\nattached hereto in Appendix \"C\".\nRegraded Unclassified\n- 28 -\n160\nDuring the month of December Mr. Cummings and\nMr. Hammond sought to reach some working agreement with\nthe Dutch \"interests\". The Dutch were represented by\nMr. John Sharp of the firm of Sullivan & Cromwell and\nthe matter was in the hands of a certain Mr. Molekamp\nof the Royal Dutch Legation. Mr. Bullitt interviewed\nMr. Molekamp's assistant immediately prior to (Bullitt's)\nhis departure and subsequently Mr. Hammond interviewed\nMr. Molekamp and took him to the offices of Mr. Cummings\nand arranged an appointment with Mr. Cummings, Mr. Sharp\nand Mr. Molekamp. These gentlemen met together with\nMr. Tuttle of Breed, Abbott & Morgan and Judge Mack and\ndiscussed the situation. The Dutch were willing to agree\nto B. Board of Trustees to represent their stock if and\nwhen they should obtain 8. clear title to it but they were\nunwilling to allow the present management to obtain con-\ntrol. Their suggestion was that two members of the trustees\nbe appointed by Judge Mack and Ambassador Bullitt and two\nmembers by themselves each to have equal voting power.\nThis suggestion was definitely unsatisfactory to the\npresent management and negotiations were dropped for the\ntime being. They have not yet been resumed.\nRegraded Unclassified\n161\n- 29 -\nThe foregoing more or less in chronological order\ncovers the events of the year 1941 and brings the year\nto & close with a definitely American Board of Directors\nin place of the former German control with the only pre-\nvious people with Farben backgrounds left on the Board\nof Directors being Messrs. Hutz and Schmitz and with\nproceedings being contemplated for the removal of Schmitz.\nIt may be parenthetically mentioned that it was the man-\nagement's intention while dispensing with other Germans\nto retain Mr. Hutz who had & long time intimate knowledge\nof the company and who was within one year of his retire-\nment in any event.\nIn this connection it may be mentioned that the De-\npartment of Justice cooperated with the management and had\nnot indicted Hutz but had subpoenaed him for future indict-\nment in connection with the indictment sent down December 19,\n1941. Mr. Schmitz claimed to be president and wrote Judge\nMack under date of December 18, 1941 and to which Judge\nMack replied on December 30, 1941, copies attached hereto\nand marked Appendix \"0\". It is to be noted that Mr. Schmitz\nhas since attended Directors meetings and has accordingly\nwaived any question of the legality of his removal as president.\nRegraded Unclassified\n162\n- 30 -\nHe is willing to resign at any time when requested to do\n50 by either the Attorney General or Secretary of the\nTreasury. He has been barred from the premises of General\nAniline and Film Corp. by an order of the Treasury dated\nJanuary 28, 1942. It is suggested that the useful thing\nto do would be to have either the Attorney General or the\nSecretary of Treasury request Mr. Schmitz's resignation\nand be done with that gentleman for good and all.\nWe turn now to the rather dramatic developments of\nJanuary 1942. Apparently the Treasury supervision was run-\nning smoothly and the management was proceeding with plans\nfor reorganization of the company and with the cooperation\nof the British Intelligence Section in New York had ar-\nranged for realignment of its South American business when\nthe first inkling came that all was not well on the Treasury\nfront. On January 8 Mr. Edward H. Foley, Jr. general counsel\nof the Treasury, called Thurman Arnold and complained of\nMr. Stammler's activities in General Aniline & Film Corp.\nMr. Arnold refused to hear any discussion of this matter\norally and asked Mr. Foley to write him a letter which\nMr. Foley did under date of January B, 1942. As a result\nRegraded Unclassified\n163\n- 31 -\nof this letter an amicable conference between Mr. Arnold,\nMr. Stammler and Mr. Foley was held. Mr. Stammler filed\n& memorandum dated January 16, 1942 with Mr. Arnold, copies\nof Mr. Foley's letter and Mr. Stammler's memorandum (with\nattachments omitted) are attached hereto and marked Appendix\n\"V\": This concludes the episode 80 far as Mr. Stammler and\nthe Department of Justice is concerned, although Mr. Stammler\nhas taken other steps to make sure the record of this matter\nis set straight so far as his own activities in this matter\nare concerned. Apparently the Department of the Treasury\nwas angered into this position by & letter from Judge Mack\nto Mr. Stammler of the Department of Justice dated January 7,\n1942 which spoke of certain Treasury attempts to disregard\nthe business of General Aniline & Film Corp. with govern-\nmental departments which in Judge Mack's picturesque lan-\nguage led to the conclusion that \"it would be futile on\nmy part to try and extend ourselves to help successfully\npromotion of our War if I am going to be whipsawed from\nbehind.\" A copy of Judge Mack's letter dated January 7,\n1942 is attached hereto and marked Appendix \"W\".\nRegraded Unclassifie\n164\n- 32 -\nThe next attempt of the Treasury was 8. direct telegraphic\norder dated January 13, 1942 suspending and immediately barring\nAickelin\nfrom the premises of the Corporation Messrs. Hutz,/vom Rath,\nvon Meister and Eckler, a copy of which order is attached\nhereto and marked Appendix \"X\". This order was complied with\nby the corporate officers although with some misgiving. It\nwas later learned through governmental sources that this had\nbeen done by written memorandum approved by the White House\non factual misrepresentations from Treasury officials.\nMr. Leo Crowley specifically refused to approve this order\nalthough both he and Judge Mack (who never knew of the\norder's existence until after its issuance) were quoted by\nTreasury officials to President Roosevelt as having approved\nit in advance. Sufficient comment on the untimeliness of\nthis order is contained in Judge Mack's letter of January 29,\n1942 to the Secretary of the Treasury.\nThe next move in the attempted Treasury blitzkreig was\nthe order of January 22, 1942 ordering without discussion\nJudge Mack and the Corporation to dispense forthwith with\nMr. Hammond's services. This order was concocted as a\nresult of a conference of Messrs. Foley and Berle and\nRegraded Unclassified\n165\n- 33 -\nonly sporadically mentioned to Secretary Morganthau and to\nno one else. This order of the Treasury Department has\nnever been complied with as the minutes of the special\nmeeting of the Board of Directors of January 30, 1942 dis-\nclose. Mr. Hammond is at present suayanded until the\nCorporation determines whether to obey or disregard or se-\ncures the withdrawal of the Treasury order. A copy of\nJudge Mack's letter to Mr. Hammond dated January 23, 1942\nis attached hereto and marked Appendix \"Y\", & copy of this\nletter from Judge Mack to Mr. Hammond went forward to\nMr. O'Connell.\nAs & result of further extensive and confidential\ninterviews here in Washington, it has been determined that\nan aggressive group of Treasury officials led by Messrs. Foley\nand Sam Klaus abetted by the advice from Berle and certain\nof his minions in the Department of State were determined to\ndisregard the business of this Corporation for reasons best\nknown to themselves. Advice from high authority was given\nMr. Cummings and Judge Mack to launch 8. counter offensive and\naccordingly Judge Mack's letter of January 29, 1942 to the\nSecretary of Treasury was prepared and dispatched. Copy of\nthis letter is attached hereto and marked Appendix \"2\".\nRegraded Unclassified\n166\n- 34 -\nA special meeting of the Board of Directors was called\nfor January 30, 1942, and was duly held as B. result of which\n& vote of confidence was given the management and Judge Mack.\nHis letter of January 29, 1942 was approved and the matter\nof Mr. Hammond's services passed for the time being while an\ninvestigation committee of one or more was authorized to be\nappointed by President Mack. Mr. Ralph Budd came on especially\nfrom Chicago to attend this meeting and it is understood that\nhe will be a member of this committee. At this meeting\naccording to Mr. Budd, Williamson again showed a certain\nreluctance to cooperate.\nOn January 29, 1942 it was ascertained that you had\nreturned to this country and & communication was immediately\nestablished with you by Messrs. Cummings and Stammler. The\nrest of the developments in this situation you are more\nfamiliar with than we are.\nRegraded Unclassified\n167\nRECOMMENDATIONS\n1. Appoint Conant to the Board of Directors.\n2. Secure from Conant 8. list of probable executives.\n3. Eliminate Williamson.\n4. Eliminate Baragwanath & Tallbot.\n5. Ratify the actions of the Treasury with the exception of\nthe removal of Mr. Hammond.\n6. If possible reappoint temporarily Hutz and Aickelin and\nEckler as they are necessary for the time being.\n7. Get a general order allowing these things to be accomplished.\n8. James Roosevelt coming to see Judge Mack in reference to\n1\nacting as Salesman on the Coast for films with adequate\ncompensation. It is suggested that Roosevelt confer with\nCummings and other representatives of the company in\nWashington.\n9. Secure the resignation of Schmitz and Hutz from the Board\nof Directors.\nRegraded Unclassified\nTREASURY DEPARTMENT\n168\nINTER OFFICE COMMUNICATION\nDATE March 5, 1942.\nSecretary Morgenthau\nTO\nFROM yr. Foley\nMr. Irey, Mr. Harney, Mr. Maloney (the coordinator\nof Treasury Enforcement in New York) and Mr. Bernard had\n9. meeting on the General Aniline and Film investigators\ntoday.\nIt develops as a result of this meeting that the\nreason for the low caliber of some of the investigators\nis that the men were recruited very hurriedly at the\ntime we took over, not to make personnel investigations\nbut to guard the property. A few days after we had taken\nover, guards were employed to protect the property and\nthe investigators then on the job were assigned to check\nthe loyalty of the General Aniline and Film personnel.\nAfter a full discussion of the situation, it was\nagreed at the meeting that several replacements and 8.\nfew reassignments should be made. It was also agreed\nthat the details would be worked out by Mr. O'Connell\nand Mr. Maloney in New York later in the week. Irey is\nto give Bernard 8. report on what has been done next week.\nI will advise you further at that time.\n9.107h\nRegraded Unclassified\n169\nMarch 5. 1942\n3:20 p.m.\nHMJr:\nHello.\nOperator:\nGo ahead.\nRonald\nRansom:\nHello.\nHMJr:\nYes.\nR:\nHenry, I just wanted to say I think your tax\nproposal is statesmanlike and certainly in\nthe right direction, and I want to wish you\nall the luck in the world with it.\nHMJr:\nWell, we'll need luck and help.\nR:\nWell, if I can give it, it's yours.\nHMJr:\nWell, we'll need lots of help.\nR:\nYou're surely in the right direction.\nHMJr:\nWell, I'm ever BO much obliged. It's very\nencouraging.\nR:\nI think you made a fine statement on it.\nHMJr:\nThank you.\nR:\nAll right.\nHMJr:\nThank you.\nRegraded Unclassified\n170\nMarch 5, 1942\nTO:\nMr. Paul\nFROM: The Secretary\nThis morning, the President said that as\nan ace up our sleeve we should keep the idea of\ngetting through a separate bill on the excise taxes\nmaking them effective almost at once.\nWhen you return on Monday, will you please\ndiscuss this with me.\nRegraded Unclassified\n171\nTREASURY DEPARTMENT\nINTER OFFICE COMMUNICATION\nDATE March 0, 1042\nTO\nSecretary Morgenthsu\nFROM lerard Swope\nReferring to our conversation of yesterday\nfternoon in which you asked me to put down the thoughts\n1 expressed regarding personal exemptions, they are BE\nfollows:\n1. For a single person, to have the exemption\n9.21 st present - $750 per year, but for 11 Temily, to\nreduce the personal exemption from $1600 to 1200, and\nfor each child, to reduce it from $400 to $300, and this\nwould work out as shown in several exemples in the\nattached table.\n2. Because of the increased taxation for\n1042 it may be difficult. if not impossible, to put\ninto effect B withholding tax at the source. AS an\nalternative, which would also have B. very good effect,\nlet us assume that the withholding tax this year\nshould take the form of B 10% withdrawal from the\npay envelope each week or month for everyone, and this\ninvested in defense bonds, but the discounts for\nredemption in the first few years should be high 80 that\nthere would be 8, distinct deterrent for anyone cashing\nIn his bonds, say before five years.\n3. A similar provision to what 1a proposed\nfor corporations - that when the excess profits tax\nexceeds B. certain amount, after the emergency B corpora-\ntion may draw upon this for reemployment, capital\nimprovements, etc. - be provided for individual incomes\nfor capital improvements such as building houses or\nimprovements to houses, reemployment or increased\nemployment.\n4. An excess profit tax for individuals\nsimilar to corporations, even to a greater extent than\nthe surtax on increased income above the four year\naverage from 135 to 139.\n5. Capital gains and losses - capital\nlosses not deductible except 83 offset for capital\ngaina, but net capital gains if reinveated, no tax.\nIf net capital gains are not reinvested they should be\ntexed 88 regular income.\nRegraded Unclassified\n172\n-2-\n6. Modification of joint returns might be\na greater recognition of earned income or simply a\ntax on joint income on investments.\n7. Advertising should be limited to the\nsame amount in dollars as in the years of normal\nprofit.\n8. Allowable contributions for charitable\nand educational purposes be limited to 3% rather than\n5% as at present.\n9. New state and municipal securities\nshould be issued subject to tax, just 8.8 federal\nsecurities. If tax is to be placed on municipal and\nstate securities at present outstanding, then also a\nway should be found to place a tax on federal\nsecurities outstanding. This can be accomplished in\none way by calling in all exempted federal securities,\neven at 8. higher price than now provided, and\nreissuing as taxable securities. This would mean more\nbonds outstanding in amount, but a greater return to\nthe Government from tax per year, which is much to be\ndesired at this time.\nU.\nRegraded Unclassified\n173\nFAMILY\nMarried\nChildren\nIncome\nTax\nUnion Dues\nWeek\nYear\nIf\no\n$23.10\n$1200.\no\n13 +\no\n29.00\n1500.\n6% - $18.00\n13 4\n1\n29.00\n1500.\no\n13 +\nIf\n1\n34.50\n1800.\n6%\n-\n$18.00\n18 +\n11\n3\n40.40\n2100.\n0\n18 +\n18\n3\n46.20\n2400.\n6%\n-\n$18.00\n18 +\n5\n52.00\n2700.\no\n18 +\nIf\n5\n57.80\n3000.\n6% - $18.00\n18 +\nRegraded Unclassified\n174\nmarch 5, 1942\n[\n5:17 P.M.\nMessage from Congressmon\nA. Willis Robertson Virginia\nways and Means Committee Charmian\nPlease arrange for\nEcces and Leon Hendered to\nappear before the House Waye\nand Means Committee on\nmonday to discuss the need\nfor a heavy tax program\nand the danger of uncontrol\nid inflation if we don't\nhave\nThe Congressman askochat\nthis be taken Care 8 today\nin order that there gentle\nmen may be placed ahead\nof other witnesses\nThis proggestion hasthe\nRegraded Unclassified\nappronal of the Committee\nand has as its purpose the\nsetting of background for\nfuture hearing\n175\nMarch 5. 1942\n3:37 p.m.\nOperator:\nGo ahead.\nHMJr:\nHello.\nMarriner\nEccles:\nYes.\nHMJr:\nMarriner. Hello, Marriner.\nE:\nOh, yes, Henry.\nHMr:\nHenry talking.\n8:\nI didn't recognize your voice. They didn't\nsay who was calling. Okay.\nHMJr:\nMarriner, you may or may not have heard that\nthere's B lot of trouble on the West Coast\non moving this alien population.\nE:\nYes, I have heard there was.\nHMJri\nNow\na\nI got a wire from - that I sent over to the\nTreasury on it, and Ed Foley sent me B copy\nof the reply.\nHMJr:\nWell, now, this 18 the situation. There's been\n8. lot of hemming and hawing and the usual Washington\njealousy, but it's 8 very critical situation\nbecause General De Witt can't move out there.\nHe's in charge of the entire Pacific Coast -\nbecause he can't get the population to move,\nyou Bee, on account of - they don't want to\nvolunteer to go, the American Japanese, until\nthey know what's going to happen to their property;\nand McCloy, Assistant Secretary of War, has been\nasked to handle this thing. So in conference with\nhim yesterday, we said, \"Now, we don't care whether\nwe get alien property or not, that ien't the\nquestion; but we think that through the Federal\nReserve Bank of San Francisco and that region,\nwe could be very helpful.\" And I B&W the\nPresident this morning, he liked it, and\nRegraded Unclassified\n175\nMarch 5. 1942\n3:37 p.m.\nOperator:\nGo ahead.\nHMJr:\nHello.\nMarriner\nEccles:\nYes.\nAMJr:\nMarriner. Hello, Marriner.\nE:\noh, yes, Henry.\nHMJr:\nHenry talking.\n2:\nI didn't recognize your voice. They didn't\nBay who was calling. Okay.\nHMJr:\nMarriner, you may or may not have heard that\nthere's B. lot of trouble on the West Coast\non moving this alien population.\nin\nYes, I have heard there was.\nHMJr:\nNow\nE1\nI got 8. wire from - that I sent over to the\nTreasury on it, and Ed Foley sent me a copy\nof the reply.\nHMJr:\nWell, now, this is the situation. There's been\nB. lot of hemming and hawing and the usual Washington\njealousy, but it's a very critical situation\nbecause General De Witt can't move out there.\nHe's in charge of the entire Pacific Coast -\nbecause he can't get the population to move,\nyou see, on account of - they don't want to\nvolunteer to go, the American Japanese, until\nthey know what's going to happen to their property:\nand McCloy, Assistant Secretary of War, has been\nasked to handle this thing. So in conference with\nhim yesterday, we said, \"Now, we don't care whether\nwe get alien property or not, that ien't the\nquestion; but we think that through the Federal\nReserve Bank of San Francisco and that region,\nwe could be very helpful.\" And I 68W the\nPresident this morning, he liked it, and\nRegraded Unclassified\n176\n- 2 -\nMcCloy's just called up and he's cleared it\nwith the Budget and he's asked us formally\nwhether the Treasury plus the Federal Reserve\nBank of Ban Francisco won't do this, you see.\nE:\nYeah.\nHMJr:\nNow, what I want to know 18 - I understand\nPresident Day is here.\nE:\nDay, I think, left yesterday or day before,\nand is en route. He was here Saturday and\nSunday and Monday and Tuesday.\nHMJr:\nOh. Well.....\nE:\nI'll find out if he went up to New York or if\nhe - but I think he left for the West Coast.\nHMJr:\nWell, could you see Ed Foley at five o'clock\ntoday?\nE:\nYes, sir.\nHMJr:\nWell, he'll come over and give you the details\nand we'd like to get the blessing of the Board.\nE:\nYes.\nHMJr:\nAnd your own help.\nE:\nYes.\nHMJr:\nIt's.....\nE:\nWell, Ed will explain just what the problem 18,\nand if I've got any suggestions on the thing,\nwhy I'll be free to make them to Ed.\nHMJr:\nOf course.\nE:\nIs that right?\nHMJr:\nThat's right.\nE:\nNow, is this thing under - this thing comes\nunder Ed, does it, directly?\nRegraded Unclassified\n177\n- 3 -\nHMJr:\nThat's right.\nE:\nIn other words, it's under the alien property\ncustodianship which is in Ed's hands directly\nand under him comes Bernard and Pehle and\nHMJr:\nThat's right.\nE:\nThat's the set-up.\nHMJr:\nThat's the set-up.\nE:\nWell, now, let me just mention this thing. I\nhappen to know a little about this labor situation\nout there in Utah and Idaho and Colorado and 80\nforth.\nHMJr:\nYeah.\nE:\nAnd this is a point that you might think of.\nNow they're having quite a time getting an\nincreased sugar beet acreage, which, of course,\nis terribly important right now; and one of\nthe reasons 1s that - of course, it requires\n& considerable amount of labor.\nHMJr:\nYeah.\nE:\nAnd in the past, with the unemployment situation,\nthere's been, of course, plenty of labor.\nHMJr:\nYes.\nE:\nWith the present situation, the boys - so many\nof them being pulled in the Army, the farmers'\nboys - and that has created a real labor problem\nand that area has developed into a big defense\narea in a lot of that section. Now, I was\ntalking to, yesterday, to Mr. Benning, who is\nthe head of the Amalgamated Sugar Company - the\ncompany that our people are interested in.....\nHMJr:\nYeah.\nE:\nis on the sugar committee over here.\nHMJr:\nWhich company are you interested in?\nRegraded Unclassified\n178\n- 4 -\nE:\nAmalgamated.\nHMJr:\nAmalgamated.\nE:\nThat's right. And they produce about three\nmillion bage of sugar, He said, \"My God, what\nwe ought to do is, if we're going to move these\nJape off the Coast, Bee.....\nHMJr:\nYeah.\nE:\n!\nthat they could move these Japs in those\nareas there to take - do a lot of this farm\nwork available for these farmers, and take the\nplace of this labor shortage.\nHMJr:\nWell, Marriner, old Man, I think that that's\na very important thing; but the only part which\nthe Treasury would like the Federal Reserve Bank\nof San Francisco to do would be to handle the\nphysical property, as in businesses and real\nestate, in the area which General De Witt is\ngoing to move these people out of.\nE:\nYeah.\nHMJr:\nNow, where these people are going to be moved\nto is\nE:\nWell, I know; that's another question.\nHMJr:\nThat's the point.\nE:\nThat's another question, except that it would\nbe easier to move them, I suppose, if you knew\nexactly where they were going to go. I mean,\nthat does help to help the problem.\nHMJr:\nWell.....\nE:\nYou're interested to preserve the property that\nthey move from, to protect it and manage it\nand look after it.\nHMJr:\nWell, to see that they're not victimized, that's\nthe principal thing.\nRegraded Unclassified\n179\n5\nEt\nYes.\nAnd that the Coing It code To - avonne,\nnon-pulition) canger.\nS:\nYes.\nAnd vala lite to Est the help of the Poderal\nReserve Sank of the voot Coast,\n8:\nYes.\nBide:\nAnd, na I ROY, sold the Idea 20 the\nPresident that 15's 60 be helpful: that's\na)3 Mo sact, and Up bave the ovthrity by - the\nPresident's given n to us - and us would\ndelegate whatever actionity MAD\nto the mens In Cash Prancisco,\nE:\nWell, as I understand Lt, the Presteent feels\nthat the dobes under your power under the\nExamutive Order under which you art SU the\nalien property custodian.\nMJr:\nHell, that's - he oridently door. because\nModley has just cleared 16 with she Budget.\nE:\nYes.\nHW:\nAnd I've asset He. Stigion to write De 9 letter\netking no to do this - to help General De Wits.\nE:\nZen. Willare\nHMJr:\nTHE have A letter from Sidaron before se\nnove,\nE:\nWell, 2'11 be plad GO DE SO; and anything\nthat we our de to help, 7'11 be - NO'CA be\ngind to as 15, and 1'm 000 16 the\nif X can find out where P112 Day and ofter\nMicing to GE we can BAT in touch with Bill Day.\nEXJr:\nThat's right.\nE:\nChar. them,\nRegraded Unclassified\n180\n- 6 -\nHMJr:\nEver 80 much obliged.\nE:\nAll right.\n181\nMarch 5, 1942\n4:14 p.m.\nHMJr:\nClif Mack.\nClifton\nMack:\nYes, sir.\nHMJr:\nI just wanted to say I'm very much interested\nin that letter that Donald Nelson is supposed\nto write as of the fourth.\nM:\nYes.\nHMJr:\nI haven't got it yet.\nM:\nI called Swope this morning\nHMJr:\nYeah.\nM:\n.....and told him that we had checked up to find\nout how far along they were with the report, and\nthey now say that they are not going to have it\nready until Saturday; so that I asked Loeb to\nget together a report for you 80 that I could\nget it over this afternoon. He's working on\nit right now.\nHMJr:\nYeah.\nM:\nTo give you the pioture as of the close of\nbusiness yesterday.\nHMJr:\nRight.\nM:\nBo that he should have that ready immediately.\nHMJr:\nOkay.\nM:\nAnd I'll get that right over to you.\nHMJr:\nThank you.\nM:\nYes, sir.\nVIG -- 1942\nMarch 5, 1942\nMEMORANDUM TO THE SECRATARY:\nIn response to your request for information as to\nthe Russian Protocol items and the tonnage of each for\nwhich we do not have allocations in order to meet the\nApril 1st delivery requirements, the following is a list-\nIng no of the close of business March 5th:\nTool Steel\n1489 Tons\nSteel Wire\n37798\nBY\nSteel Billets (Shell Steel) 38000\n\"\nSteel Alloy Tubes\n1165\n\"\nStainless Steel Wire\n108\n\"\nCold Rolled Steel Strips\n19408\n-\nHot Rolled Steel\n32000\n\"\nIt is very possible that the report to be submitted\nby Mr. Nelson may show a reduction over the above quan-\ntities due to further allocations not yet received by us\nor allocations for production subsequent to April lat.\nFurther, the Russians have submitted many requisitions for\nitems outside of the Protocol which will be included in\nMr. Nelson's report and will help the tonnage pleture.\nyour difton E. Mack\nDirector of Procurement\nRegraded Unclassified\n183\nTREASURY DEPARTMENT\nINTER OFFICE COMMUNICATION\nDATE March 5, 1942\nTO\nSecretary Morgenthau\nFROM\nGerard swope\nThis is the report I spoke of, which was\nmade by two of the General Electric men whom I\nasked to go to the Philadelphia Mint. They spent\nMonday, February 23, there.\nI have given a copy of this report to\nD. W. Bell, and several copies to Mrs. Ross and\nMr. Howard.\nI hope it may be helpful.\n150\nG.S.\nAttachment\nRegraded Unclassified\no\nD\nGENERAL ELECTRIC COMPANY\n184\nP\nY\nMarch 4, 1942\nMr. Gerard Swope\nTreasury Department\nWashington, D. C.\n213/5\nDeor Mr. Swope:\nMr. Ernest and I visited the Federal Kint\nIn Philadelphia last Monday.\nWe had figured that perhaps We would be\nreceived rather coldly, but Mr. Drassel received us\ncordially and answered every question frankly, and\nintroduced us to EL number of people before we went on\nthe trip. We made G, survey of the manufacture of\ncoins beginning with the ingot and completed the\nwhole job by 1 o'clock, when we went to lunch. We\nreturned about 2, and I asked Mr. Dressel if he would\nbe good enough to let me go over the Job from soup to\nnute again so that we would have a clear picture an to\nwhat the situation was.\nOne of the first and most important things\nwe learned was that they have no cost system, and that\nthey do not know the coat of producing B. million\npennies or a million of any other coin.\nThey produce pennies, nickels, dimes, quarters\nand half dollars. They employ approximately 1,000 people,\nincluding indirect workers. For the year 1941 the\nproduction was 8.5 follows -\n24 million 50d pieces\n111\ne\n25d pieces\n209\nIf\n10d pieces\n203\n\"\n5d pieces\n809\n\"\npennies\nmaking a total of approximately 1,356,000,000 pieces.\nThe employees work 48 hours per week on a six day besis,\nand 1f we assume that they make $1.00 an hour, the total\nlabor cost would be approximately $2,000,000 to\n$2,400,000a year.\nYou were so very right in stating that the\noperations wore archaic. One of the real causes of\ninefficiency is the fact that this building was never\nplanned for a manufacturing department, but 18 cut up\ninto many many small rooms where it is impossible to\nwork out a good factory layout without breaking through\nthe walls.\nRegraded Unclassified\n183\n-2-\nAlmost all of the jobs are simple and 11ght,\non which women could be largely employed.\nSince the largest production in the Mint con-\nsists of 800,000,000 pennies out of a total of\n1,356,000,000 pieces made, it 1a obvious that the real\nproduction job is that of the penny, and it would appear\nthat the penny job could be entirely separated from the\nsilver Job.\nThe main operations are -\n1- Moulding the Ingot.\n2- Breaking ingot down by rolling.\n3- Blanking.\n4- Annealing and cleaning.\n5- Upsetting edges of blank.\n6- Coining.\n7- Counting and packaging.\n1- MOULDING OF THE INGOT.\nThe moulding of the ingot is 8 simple operation.\nSmall pot furnaces are used which hold 250 lbs. of\nmolten metal. The hot metal is ladled out and poured\ninto e permanent mould machine operated by hand\nthroughout. The Ingot used is very small weighing\nabout 26 lbs. In this room are 36 men operating 6\nmachines. If automatic permanent mold machines are\nused, such as is used in the automobile factories,\nI think that 6 men or less would do the job of the\n36 now employed. (Mr. Dressel proposes to put in\nnew furnaces which hold 450 1bs. of metal and will\nmake an ingot about 40\" in length instead of 20\" as at\npresent used).\nIt is quite possible that coil strip could be bought\nfrom outside concerns at a much cheaper price than 17\nthe strip is made in small pieces and with small\npresses.\n2- BREAKING INGOT DOWN BY ROLLING.\nThe ingots are rolled into atrips about 30' long and\n4-1/2\" wide, but since no annealing is used during\nthe twenty-two times that it la passed through the\nrolls the metal becomes quite hard and difficult to\nhendle and the edges are very much roughened, causing\nan undue amount of spoilage. After the material is\nrolled into 30' strips it is out into lengtha about\n5 to 6 feet long and then put through the blanking\npress.\nRegraded Unclassified\n÷\n186\nSince these pieces are only five to six feet long\ninstead of one hundred feet na they should be if\nrolled into coila from a large ingot, much handling\nis entailed since these short pieces are passed\nthrough the press by an operator, received by EL\nsecond operator, and 80 handled through the twenty-\ntwo passes.\n8- BLANKING\nThe blanking press used 18 B late model high speed\npress but since short lengths are used there 1s El\ngood deal of spoilage, which could be avoided with\nlonger strip, and by the use of annealed strip.\nThe metal spoilage from blanking press to finished\nproduct is 47% About 25% is unavoidable, but the\nrest of it is due to short lengths, lack of\nannealing and to the fact that the dies are not\nspaced properly to give the best efficiency In the\nuse of the metal.\ni- ANNEALING\nAfter the blanking operation, the blanks are anneeled,\ncleaned and washed, and then sorted. Ae think that\n& continuous annealer would probably give better\nresults.\n6- UPSETTING OF EDGES OF BLANKS\nAfter cleaning and inspecting, the blanks are put\nthrough an upsetting machine which upsets the edges\nof the coin. All these upsetting machines are run\nby men, but the work 1s light and women could be\nused, but it would seem most natural to put on\nhopper feeda on these machines, which again would\ncut down the labor.\n6- COINING OPERATION\nThis operation is performed on 5. specially designed\npress which 10 made by the Mint. It would seem quite\npossible to have these presses operated by women,\nand to have the coins fed onto 8 moving conveyor,\nfrom which they could be inspected by women inspectors\n43 they pass by. The lighting at the inspection\nconveyors seemed to be poor, and I told Mr. Dressel\n#8 would be glad to send an engineer down there to\n1ve him proper lighting.\nRegraded Unclassified\n187\n7- COUNTING AND PACKAGING\nThis operation 1s very simple. The machines work\nrapidly and are operated by men, end here too\nwomen could easily be aubstituted because the men\nare not busy. My general impression of the whole\ndepartment was that the speed of production does\nnot compare with General Electric factories.\nIn manufacturing the silver pieces much\nsmaller ingote are used than are used in the manufacture\nof pennies. This too I think 19 wrong. They should\nuse larger ingota, reduce the spoilage, do enough\nsunealing so that the strips would handle well in the\nrolls. I think the work of silver should be put in a\ndepartment separate from pennies because there 1s so much\nmore money involved when silver is used, and so much\nless machine work and material.\nThe manufacture of nickels is about the same 0.2\nthat for pennies but it is 8 much smaller job. This\ncould be well included with the manufacture of the\nsilver pieces. One of the things which hampers Mr.\nDressel 16 the composition of the metal used for penniss.\nIf he were permitted to use a alightly different composi-\ntion it would be much better to manufacture, but he mAys that\nthis composition 16 controlled by law end he can do\nnothing to change it.\nI would like sometime at your convenience to\nsit down with you and talk this matter over 88 I think\nthat there is an opportunity of saving a very large\namount of money for the Government. When you consider\nthat the Government has been making coins for 150 years,\none would think that they would know how to make them\nbetter than anybody in the world, but Mr. Dressel assures\nme that he finds it very difficult to get money, even\nfor new machines, or for anything which he thinks will\nhelp him in his work.\nI can easily 800 how difficult It would be to\njustify the use of new machines when there la no cost\nsystem to enable one to show the gaving made.\nAttached you will find A sheet making some\nspecific recommendations, but I realize that in order\nto do this job right Mr. Tressel would have to have some\nhelp. We could arrange to give 1:1m as much or ns little\n9.3 you thought desirable,\nVery trily yours,\n(signed) N. X- Burrows\nMR Burrows:6\nRegraded Unclassified\n188\n1. set up a suitable cost system so that expenditures\nfor new equipment and rearrangement could be justified.\n2. Girl operators could be used to a very large extent\nas most of the operations are light and require very\nlittle skill, such as inspecting, counting, upsetting\nblank edges, and operating the coining presses.\n3. Consider changing analysis of various grades of\nmaterials which would facilitate producing material\nin coil stock. Mr. Miller, who is Mechanical Engineer\nfrom the Treasury Department, informed the writer that\nthe present analysis hinders the rolling of strips in\nlarge coils.\n4. Consider purchasing coil material of twice the present\nwidth from the Chase Brass & Copper Company, Scovil\nMfg. Company, or some other suitable manufacturer.\nSince these concerns produce similar materials in\nlarge quantities, they should be able to furnish\nsuitable materialsat reasonable costs. In connection\nwith this proposition, the study should be based on\nthe installation of a baling press or briquetting\nmachine to efficiently handle scrap and prevent con-\nsiderable oxidation when remelting the scrap.\n5. In the event that it is not feasible to purchase coiled\nmaterial, then consideration should be given to the\npouring of larger ingots from an electric furnace,\nwhich could be arranged to pour metal direct into a\nrotary moulding machine similar to permanent moulding\nset ups in the automobile industry.\nThese larger ingots would then provide sufficient\nmaterial which could be rolled into coils, provided\nsuitable rolling mill and annealing facilities are\ninstalled.\nProperly made coil material in long strips should result\nin less scrap, longer die life and considerable saving\nin handling time, as well as 8. reduction in blanking\nlabor.\n6. Make a new factory layout, breaking through walls where\nnecessary to make straight line operation for production\nof pennies only, and another layout for the production of\nsilver coins and nickels, keeping in mind the use of\nconveyors and Ford trucks.\nRegraded Unclassified\n189\n7. Since only 52 to 53% of gross material results in good\nblanks, it would seem that a new die layout to give\ncloser nesting of the blanks and with less edge scrap,\nwould result in considerable saving in material. In a\nnew die layout consideration should also be given to the\nvarious brands of alloy tool steel in order to get\nmaximum between grinds.\n8. The installation of two modern belt type furnaces with\natmospheric control, should be considered to replace the\nexisting 5 or 6 furnaces used for annealing blanks.\nThis equipment should be fed by conveyor belt from the\nblanking presses for maximum efficiency.\n9. In the department where all coins are embossed, it might\nbe possible to rearrange this equipment so that the\nembossed coins, when ejected from the machines, would fall\nônto 8. conveyor belt running to the inspection benches.\nThis conveyor belt could be totally enclosed in order to\nprevent theft of finished coins.\nIn the manufacture of embossing punches and dies, various\nbrands of tool steels should be tried for the purpose\nof selecting the best type of steel for the different\ngrades of metals embossed.\n10. Various inspection tables on which 35 to 40 girls do\nvisual checking of coins, could be equipped with\nfluorescent lighting, in order to speed up this operation.\n11. Rearrangement of inspection benches and the installation\nof suitable conveyors would save considerable handling\nin transporting coins to the weighing and counting\nstations.\n12. Three or four small machines used for counting purposes,\nshould be manned by girl operators instead of men.\n13. Have a good Ford truck engineer make definite recommenda-\ntions on the handling of material, as most of the material\nis handled on hand trucks with iron rims on the wheels,\nwhich require four men to push this about.\nRegraded Unclassified\nCOPY\nTREASURY DEPARTMENT\nUnited States Mint Service\n190\nPhiladelphia, Pennsylvania\nOffice of\nFebruary 25, 1942\nthe Superintendent\nUnited States Mint\nDirector of the Mint,\nWAS\nTreasury Department,\nWashington, D. C.\nDear Madam:\nwith reference to the scheduled visit of Mr.\nWilliam R. Burrows and Mr. Edward Ernest, both of\nGeneral Electric Co., to this institution with the\nview to making suggestions which, in their opinion,\nmight result in lower costs and increased production\nfrom the machinery and equipment of the institution,\nyou are advised that their visit was carried out as\nplanned and that, as a result of their observations,\nsome suggestions and plans were advanced for increasing\nthe efficiency of operations.\nAlthough all of their suggestions were sound and,\nperhaps, applicable to outside industrial plants, many\nof them were of such of sweeping character as to involve\nradical changes in equipment the cost of which would be\nprohibitive. Mr. Burrows stated that all of his sug-\ngestions were based on the assumption that any needed\nfunds, regardless of amount, would be readily available.\nMany of their suggestions were, however, applicable, to\nthe production of this plant and should be given serious\nconsideration.\nTo begin with, they were bewildered at the way the\nbuilding was originally constructed, that 18, with\nnumerous small rooms instead of fewer and longer rooms\nwhich would be more in line with the usual industrial\ntype of building and amenable to an economical sequence\nof operations. The limits of the building are, of\ncourse, more or less permanent although Mr. Burrows did\nsuggest \"tearing some of the walls out.\"\nIt was agreed that the new melting equipment would\nbe B. decided improvement over the old equipment. They\nwere of the opinion, however, that the molds moving on\na straight line carriage in front of the furnaces would\nwork to 8. better advantage. Such an arrangement, which\nhas been given previous consideration here, would not\nbe practical in our small melting room with the furnaces\nthought the turn-tables could be made to turn automatically\nso close together; hence the turn-tables. Mr. Burrows\nand that an arrangement could be perfected for automati-\ncally removing the ingots from the molds. I doubt that\nefther would prove to be practical or economical.\nRegraded Unclassified\n191\n-2-\nMr. Burrows suggested that excessive metal loss from\noxidation would be avoided if the returned clips were\ncompressed into briquettes for recharging into the\nfurnaces. I have noticed this practice in outside plants,\nbut considered it to be done for compactness in storage\nand convenience in charging into the furnaces. I don't\nbelieve our oxidation losses are excessive, but the latter\ntwo reasons are sufficient to warrant consideration of the\npractice, especially since I have recently noticed the\nmelting of 900-silver clips into bara because of lack of\nspace to store the clips. This practice, of course, means\nan extra melting. The losses from oxidation will be checked.\nBoth men made an important point of the fact that the\npercentage of good blanks realized from & given weight\nof cast ingots 18 very small -- 50 to 53% on our own\ncoinage metal and much smaller on foreign coinage metal.\nThey compared our figure with their own figure of 3%\nwastage which I don't consider a fair comparison because\nof the different kinds of material consumed. I realize,\nhowever, that there 1a plenty of room for improvement and,\n1f you will recall, I brought up the same subject on the\noccasion of our first meeting with the department heads in\nMr. Dressel's office. At that time, I made the statement\nthat & 10 to 12% gain in effective melting capacity of\nbronze could be made by changing the width of the bronze\ningot mold from 41\" to approximately 3ᵗʰ, since the same\nnumber of blanks could be cut from an ingot of the latter\nsize. Mr. Dressel, Mr. Olewine, and Mr. Roland opposed\nthe change for the following reasons:\n1. The, apparently, liberal clearance on the edges\nof the strip was needed because of frequently\noccuring saw-tooth edges and \"break-ins\" on the\nstrip, the true picture having been recently\nobscured by an unusually long run of strips having\nvery smooth edges.\n2. A change in the mold width at this time would\nmake the mold unavailable for casting nickel\ningots upon resumption of nickel coinage in\n1946.\n3. One set of eleven molds (41\" wide) was already\non order with delivery expected momentarily.\n(This set has since been delivered)\nMr. Shook and, as I recall it, unopposed by Mr. Bartholomew.\nThe suggested change in mold size was defended by\nHowever, in view of the above objections, the plan was\ndropped.\nRegraded Unclassified\n-3-\n192\nMr. Burrows suggested the possibility of casting an\ningot twice, or perhaps three times, the width of the\npresent ingot and later slitting it into strips of approxi-\nmately the same width as the present strip, thereby\neliminating two, or in the latter case four, outside\nirregular edges. An ingot three times the width of our\npresent ingot would be out of the question because of the\nlimited face width of our present rolls. An ingot twice\nthe width of our present ingot could, perhaps, be handled by\nour present rolling equipment, but 6. straight edge cutter\nwould, in all probability, encounter trouble with frequently\noccurring curved strips, however small the curvature might be.\nMr. Burrows' answer to that objection was that such strips\nmight be put through a straightener. Personally, Thave\nnever heard of such an implement and seriously doubt the\nexistence or effectiveness of one. I might add that these\ncurved strips are usually caused by one side of the roll\npinching or exerting a greater pressure on one side of the\nstrip than on the other. They usually straighten themselves\nout to a certain extent when the direction of the strip\nthrough the roll is alternately reversed. The so-called\n\"straightening tool\" might conceivably use the same\nprinciple, but it would certainly change the gauge of the\nstrip, thereby making the strip useless for the purpose\nintended.\nMr. Burrows suggested the possibility of \"hot rolling\"\ndirectly from the melting room as a means of cutting down the\nnumber of passes through the rolls. This would call for 8.\ncomplete change in the type of equipment used. Besides,\nthere are few, if any, outside industrial plants practicing\nhot rolling with a non-ferrous metal, with the possible\nexception of nickel or chromium.\nBoth men voiced strong condemnation of the multiple\npassing of numerous short strips of metal back and forth\nthrough the rolls. It is, without & doubt, & slow and\nlabor consuming practice but, with the installation of new\ncoilers, this undesirable practice will be replaced by\nthe rolling of long continuous strips of metal with no\nintermediate cutting of the strips. This, I am sure, will\nbe a decided improvement from the standpoint of both\nrolling and cutting efficiency,\npunching blanks was for at more scientific design of the\nTheir only suggestion with regard to the presses for\nit means the saving of useless labor on both melting and\ncutters. This, I think, is an important point, because\nrolling. Some steps have already been taken toward B.\nbetter designing of the cutters themselves, but in some\nto the width of the molds. The cutters now being used on a the\ncases they do not bear the proper relationship with respect\nforeign coinage metal is very inefficient and results blanks in\nmetal loss of approximately 25%. The additional\nwhich could be cut from the foreign coinage ingot, through the\nuse of designed cutter, would be of special\nbenefit a right properly now when the coiner is faced with A. shortage\nRegraded Unclassified\n193\nof bronze blanks.\nMr. Ernest suggested that several of the upsetting\nmachines might be operated by one man through the use\nof automatic feeders. Several of the machines are now\nequipped with such feeders, but one man operates only\none machine. The usual objection to multiple operation\nis that the feeders frequently \"hang up\", usually\nbecause of imperfect blanks, and when this happens, the\noperator should be right on hand to stop the machine in\norder to prevent injury to the groove. I believe this\nmight be overcome by selecting all blanks after whitening\nand equipping the automatic feeders with cut-out switches\nsimilar to those used in connection with the feeders on\nthe coin presses. Mr. Ernest, at my suggestion, considered\nthe possibility of using two segments on one machine and\nexpressed the opinion that although there were certain\nmechanical difficulties to overcome, he thought it could\nbe worked out to an advantage. There is certainly room\nfor thought here and as time permits, all such possi-\nbilities will be investigated.\nThe much discussed subject of strip annealing was,\nas was to be expected, brought into the discussions with\neveryone, including Mr. Dressel, recognizing the\nadvantages of this practice which 18 80 universally used in\noutside industrial plants. Both Scoville and Riverside\nanneal their strips as well as their blanks. I am sure\nthat no one in this institution would voice the slightest\nobjection to strip annealing if suitable space could be\nfound for the required furnace. Personally, I am very\nmuch in favor of it in connection with the rolling of\nour minor coinage metal, especially with cupro-nickel\nand the new 500-silver manganese alloy, both of which\nharden rapidly with cold rolling. The practice would\npermit fewer passes through the rolls and would, thus,\nbe a means of increasing rolling capacity.\nBoth Mr. Burrows and \"r. Ernest were positive in their\nsupport of the large ingot -- the larger the better --\nboth going so far as to suggest much larger silver\ningots, even in the face of segregation the effects of\nwhich they thought might be minimized through new\nlegislation designed to change the existing tolerance\nrestrictions.\nIn the press room, the old familiar suggestion of\nusing some type of automatic conveyor for both blanks\nand finished coin was mentioned, but without definite\nand concete suggestions as to type and arrangement.\nI believe that overhead conveyors were once used in the\npress room and that they were abandoned because of the\nfrequent mixing of different denominations of coins.\nRegraded Unclassified\n-5-\n194\nMr. Burrows was of the opinion that the mint could\nbuy coiled bronze strips, in accordance with specifica-\ntions to meet our requirements, at a better advantage and\ncheaper than they could be produced here in the mint plant.\nIn summing up the suggestions of the two men, I\nwould say that they stressed the following points:\n1. The advantages of using a large ingot\n2.\n=\nIf\n\" strip annealing\n3. The elimination of multiple short strips through\nthe use of coilers\n4. The advantages of re-designing either the punch\npress cutters or the related mold widths 80 as\nto eliminate unnecessary waste of worked metal\n5. The possibility of better mechanical features\non the upsetting machines\n6. The possibility of attaining greater efficiency\nin the transfer of material between the\ndifferent departments\n7. The advantages of an economical sequence of\noperations with regard to the flow of material\nfrom the finish of one operation to the\nbeginning of the next operation.\nVery truly yours,\n/a/ Charles M. Miller\nRegraded Unclassified\n195\nMAR 5 1942\nV dear Senator,\nReceipt is acknowledged of your letter of February 27,\nin which you ask as to etate ay ideas about the dollar,\nwhether it 10 to be tied to the gold standard, or whether\nsilver 1a to be recognised and, if so, to what extent.\nour huge gold holdings of course have been end are\nbeing used to maintain stability in the foreign exchange\nvalue of the dollar. Am you probably know, Issolution IV,\napproved at the recent Conference of Foreign linisters at\nRio, calls for E conference of addisters of finance in\nthis headsphere to plan an international stabilization fund.\nSuch a fund could use gold or the United :tates dollar and\nin either case would provide that comon demondnator for\nInternational nonstary transactions which I had in and\nwhen 2 referred to A heads;here dollar.\nAll countries today are basing their currencies althor\non cole or on some strong forwign currency such as the\ndollar or on both and are giving silver a autordinate\nposition. - however, such as Mexico and cule periods\nthe use of 4b. certain amount of silver in their constry\nreserves. To the estent that this practice continues it\nwill be possible to preserve for silver som notetary role.\nsincerely yours,\n(Signary 1, IN\nsecretary of the Treasury.\nGenerable burton *. sheeler,\nMintale will mc\nUnited states Senste.\nreturn\nthe\n7A310sh\n3/4/12\nRegraded Unclassified\nVr.\nw.\nI\na\na.\ni\nI I all\nI I di\nUnited States Senate\nP\n- - -\nCOMMITTEE ON INTERSTATE COMMERCE\nI\n5\nFebruary 27, 1942.\nMY\ndear Mr. Secretary:-\nThe \"New York Times\" of February 23rd, quotes\nyou as saying there was a need for a bank of North and South America and\nfor 8. hemisphere dollar.\nI would appreciate it if you would advise me,\nconfidentally or otherwise, as to what your ideas are about the dollar,\nwhether it is to be tied to the gold standard, or whether silver is to be\nrecognized, and if so to what extent?\nAssuring you of my esteem, I am\nBEW**\nSincerely yours,\nHonorable Henry Morgenthau,\nSecretary of the Treasury\nTreasury Department\nRegraded Unclassified\n197\nMAR 5 1942\nDear Eleanor:\nI have your memorandum of February 23,\n1942. enclosing the letter dated February 18,\nreceived by Miss Thompson from Mr. John Golden\nwith respect to the suggestion that out-rate\nadmissions of younger officers of the Army\nand Navy be exempted entirely from the Federal\ntax.\nThe activities of Mr. Golden in behalf\nof the younger officers are most commendable.\nAt the present time, however, the Treasury\n18 advocating the elimination of tax-exempt\nsecurities and of other forms of tax exemption\nprivileges, and, consequently, me are hesitant\nto suggest any new exemption.\nRegraded Unclassified\n198\n- 2 -\nAlthough the Committee on Ways and Means\ngave consideration to this very question in\nthe enactment of the Revenue Act of 1941, it\nis quite possible that the Committee may wish\nto reconsider its position at this time.\nReturned herewith is your enclosure.\nAffectionately,\n(Signed) Henry\nMrs. Franklin D. Roosevelt,\nThe White House,\nWashington, D. C.\nEnclosure.\nPhoto file n.m.c.\nFile to Thompson\nBy Massinger Steen 5:00 pm.\nRegraded Unclassified\nTHE NEW YORK THE\nMENDAY, FEBRUARY 18, 112,\nooklyn Ball Club Announces\nAll-Out Program in\nSupport of\nWar Effort\nWe will give (in coopers-\nDODGERS TO DONATE\nUm with the other major league\n(ddle) three days from miss webed-\nwho in order that two all-etar\ngames may be played for the\nONE DAY'S RECEIPTS\nBall and Dat Fund and will pay\nwill expebies of all Brooklyn play-\nera accepted We will also play\nexhibition games during the\ntraining endado and during the\nEbbets Field Gate to Go to a\nregular sesson WID camp tesms,\nWar Charity-One Game on\ndociating all hur receipts, as well\nAE \"up espenase, to camp athletic\nRoad Also to Be Benefit\nfunds\n4. We propose to admiss to\nEbhets Field (under plane to be\nsupplied upon by all New York\nBOND SALE TO BE PUSHED\nelubal at lesst 100,000 service\nmen in uniformo without charge\nand We will make the services of\nIRIP chaches and scouts and play-\n150.000 Service Men Will Be\nen available for Instruction and\nsuch other services as have been\nAdmitted Free-Contests\nrequested by the athletic officers\nScheduled in Camps\nand health service of the Army,\nNavy and civillan defense organ-\nlestions. We are willing to ($)\ntend all of our factures, invisid-\nBy JAMES P. DAWSON\nThe N/A If comparation with\nThe Dodgers, through President\nother milistries inr organizations\nassisting in programs of the vs.\nLarry MacPhail, yesterday an-\nnout agencies.\nnounced an all-not program in sup-\nConsent Is Norded\nport of the nation's prosecution of\nMacthail pointed out he would\nthe war.\nhave to get the consent of other\nThe entire receipts at one Ebbets\nclub owners to the proposal to due\nField game and the Dodgers' share\nnate the entire receipts from -\nthe gate at one road game will\nchampionship game at Ebbele\ndonated to a national service\nFSuld, since visiting cloba share in\nagency. Every person in the Brook-\nthe recipts.\nlyn organization will buy defense\n\"I prohably will be criticized for\nthis mine, but I can take n.° raid\nhorrida and stamps and the club will\nMacPhail \"AC the league mestings\nhelp to promote their sale $ the\nexclier this mindle I adversied\nputitle. A/t many echibitions as\nof plan for\npossible will be played with carop\nCORE all-nd Due the was that with.\nteams Ebsets Field will be thrown\n3 am determined the\nopen to an estimated 150,000 serve\nEVITY will def werything\nIce men during the campaign.\nvilly possible to aid the ear Base:\nThese and other points in the\ncold commet content monty\nDodgers' program were revealed\nwith giving Insulance\nby MecPhall before he boarded .\nis the and of the\nplane for Miami\ncountry,\nThe detailed plan. the first ad-\nMM number be done, and may be\nvanced by any major league base-\nbeginning AT lesser E Time the\nball club, and providing even for\nother chalam will comon suit before\nthe Brooklyn organization to del\nthe championship evanue gets -\nfray all expenses for any of (ER\nder RAY.\"\nplayers selected for the two major\nDefend by FOR in bis enginal\nleague all-star charity pours, is\ntight plans, Machalt Dealty took\nset furth in the following state-\nnft shortix 1. Tue\nment:\nMary by Signatury\nStatement From the Cinb\nJuhn\nRecognizing its obligations and\nTemp/t Camilia, fir a to\nDATE every maDers will -\ngrateful for an opportunity to be\nDetoin name the claim\nof service in this crisis our did\nrectors have adopted the follows\nbounde 1159 statement fillie\nat Miami Der Line Thank\nIng program for 1042:\n1. The entire receipts for one\nIAL Havans. where the THEREOF\nday at Ebbete Field will be de-\nproduct Exte united way\nnated in sume national accive\nagency. We will also donate our\nshare of the receipts of one read\ngame for the same purpose.\n2. Every individual in the\nBrooklyn organization from prom\nIdent to betboy will purchase\ndefense bonds and stamps. We\nexpect our club will be 100 per\ncent in this respect before -\nopen our gates We will counte\nfacilities of radio accessits of HTTP\ngames hillbnards,\nand icore cards to help promote\nthe sale of deferine tionda -\nstamps\nRegraded Unclassified\nTHE WHITE HOUSE\nWASHINGTON\nFebruary 23, 1942\nDear Henry:\nI am sending you the latest letter from\nJohn Golden about the tax on cut-rate theatre\ntickets for the soldiers. Is there any\nchance that Congress would eliminate the full\ntax?\nSincerely yours,\nThan Roseault\nRegraded Unclassifie\nC\no\nP\nOffices of\nI\nJohn Golden, Inc.,\nSaint James Theatre\n246 West 44th Street\nNew York City\nFebruary 18th, 1942.\nNice Malvina Thompson,\nThe White House,\nWashington, D. C.\nDear Miss Thompson:\nThank you for your note and the tax nomo. I'm afraid the\nTreasury Department hasn't got the point I've been trying to make.\nThe managers, theatre owners, and producers of pictures and\nplays have been giving away the only thing they have to sell, seats\nto their entertainments, in numbers that go into the hundreds of\nthousands.\nMrs. Roosevelt in my opinion did much toward taking the taxes\noff the free seats. Now, the Government still persists in asking\na tax on cut-rate seats to soldiers and sailors --- and it seems\nto no that if the theatrical people can make these concessions,\nthe Treasury Department should be willing to take the taxes off\ntickets to fighters.\nIt will help their morale and their pocket-books, and in its\ntotal will be a very small source of income to the Treasury.\nRoughly, assuming that 2,000 tickets were given weekly to the\nyounger officers, the average --- from the $4 musical seate (at\nhalf rate) to the modest prices at picture houses --- would not\nbe over $1 --- or a gross of $2,000 a week --- and a 10% tax on\nthat sum would yield $200 to the U. S. Treasury.\nI can't believe but what the folks in Washington could be\nmade to see that, at this cheap price, the gesture 10 worth the\nprice.\nWith thanks,\nSincerely,\n(Signed) John Golden\nRegraded Unclassified\n- 2 -\nthe Nalvina Thompson\nFebruary 18th, 1942.\n2.5.\nPlease call to Mrs. Roosevelt's attention the enclosed\nelipping from the Times.\nThis is the thing that I told her would be dissipated\nIf\n10 was done by just an occasional baseball team.\nWhat Mr. Connolly, Ed Cochrane, Bill Corum and the local Army\npeople had hoped for and believed could be accomplished was one\nNational Baseball Day, with every league and every little team\nLove to the smallest bush players giving the receipts of that day,\nestimated to be over $1,000,000, for Army and Havy relief.\nJ.G.\nRegraded Unclassified\n2015\nTREASURY department\nINTER OFFICE COMMUNICATION\nCONFIDENTIAL\nDATE March 5. 1942\nSecretary Mörgehthau\nTO\nFROM\nMr, Hass CA\nsubject: Sears' and Ward's sales by types of\ngoods and by regions.\nDate obtained by & field trip to the offices of Sears\nRochuak and Montgomery Ward in Chicago are summarized here-\n=1th an an indication of (1) what types of goods consumers\nare buying, (2) what geographical regions are showing the\nlargest sales increases, and (3) what types of goods are be\ncoming woarce.\nIt has not been found practicable to combine the date\nfor the two companies, because Sears Roebuck uses 8 4-week\nanles period in place of the calendar month, and because\nthe geographical sales districts of the two companies are\ndissimilar, The types of goods sold by both companies,\nhowever, have been re-classified into similar groups.\nWhat goods are consumers buying?\nOfficials of both Sears Roebuck and Montgomery Ward eay\nthat their sales have increased sharply in practically all\nlines, and this is born out by the salee figures. It should\nbe kept in mind, of course, that the classes of goods sold by\nthe two companies are largely those bought by people in the\nlower income groups. (A tabulation of the reported incomes\nof Sears Roebuck customers in March 1941, as indicated on\ntime-payment applications, showed an average of $1,345 for\nmil order customers and $1,869 for retail customers).\n1100, the two companies sell little or none of certain 10-\ncontant kinds of consumer goods, such as automobiles and\nfoods.\nIn Table 1. & comparison 18 made of the percentage in-\nin the sales of Sears Roebuck and Company in the 1941\nflocal year (ended January 31, 1942) as compared with the\nprevious year, for 5 major classes of goods and 21 sub-\nclasses, Similar year-to-year percentage increases are shown ended\nfor the most recent period available, the 4-week period\nJanuary 29, 1942.\nRegraded Unclassified\n204\n- 2 -\nThe largest group increases in the full-year comparison,\nit will be noted, are those for farm equipment and building\nmaterials, and for the miscellaneous group comprising items\nof 8 semi-luxury nature. Nevertheless, the percentage in-\ncreases for the various sub-classes do not show any great\nvariation. In the most recent period, however, considerable\nvariation may be noted. Sales tend to be concentrated in\nsuch items as clothing, farm equipment, auto accessories,\nand sporting goods, while sales of certain articles hit by\nmaterials shortages show declines or but slight increases.\nIn Table 2, similar data are shown for Montgomery Ward\nand Company, although the latest available period data for\nthis company are for December 1941. This company has not\nshown such large percentage increases as Bears Roebuck,\npartly because of & prolonged strike in the West Coast\nstores of the company in the spring and summer of 1941, and\nperhaps partly because a smaller proportion of sales are\nmade through retail stores. The general conclusions, how-\never, do not differ markedly from those drawn from the Seare\nRoebuck sales date.\nWhat regions show the largest sales increases?\nIt 18 unfortunate for our purposes that the two\ncompanies have different regional breakdowns, which makes\nsales comparisons difficult. The Montgomery Ward figures\nare rendered less useful by the 1941 strike on the Pacific\nCoast, by the relatively emall number of districts, and by\nthe fact that the latest recent data are for December 1941.\nThe Sears Roebuok figures may, for the present, be taken as\na more satisfactory indication of regional sales variations,\nparticularly since a relatively large proportion of this\ncompany's sales are made through their retail stores.\nIn Table 3. the percentage increases in Sears Roebuck's\ncombined sales by 7 geographic regions are shown for the\nlast fiscal year and for the most recent 4-week period. As\nmight have been expected, the largest cales increases are\nrecorded in regions strongly affected by the defense program,\nPacific Northwest. In the farming areas, on the other hand,\nnotably the New England and Middle Atlantic regions and the\nparticularly those of the South, the sales increases are\nnoticeably smaller. The discrepancies are particularly\nmarked in the more recent period.\nComparable data for Montgomery Ward are shown in\nTable 4.\nRegraded Unclassified\n205\n- 3 -\nIndioation of available supplies\nA partial indication of the supplies of consumer goods\navailable, in relation to demand, 18 provided by the per-\ncentage of mail orders \"omitted\" by the two companies. These\nrepresent, for the most part, orders that could not be filled\nbecause the goods ordered were not available. In this con-\nnection, officials of both companies mentioned that supplies\nof many goods are already definitely short, end that measures\nare being taken to make the remaining supplies last as long\nas possible, through various rationing plans and by with-\ndrawing them from their advertising.\nThe percentages of omissions are shown for Sears\nRoebuck and for Montgomery Ward in Table 5 and Table 6,\nrespectively. The general similarity between the omissions\nfor the two companies will be noted, although certain ex-\nceptions exist. The figures do not reveal, of course, the\nnumber of potential orders that were withheld because the\ncustomer knew that supplies were not available.\nOfficials of both companies showed a willingness to\ncooperate in supplying any sales statistics that we may de-\nsire, and will send us periodic reports to keep up to date\nthe information obtained on this trip.\nRegraded Unclassified\nTable 1\n206\nCONFIDENTIAL\nCombined mail order and retail sales\nSears, Roebuck and Company\nPercent increase\nFiscal year ended\nLatest period 1/\nClass of goods\nJanuary 31, 1942\nover previous year\nover previous year\nNothing\n27.6\n45.3\nWomen's clothing\n26.6\n48.7\nMen's and boys' clothing\n34.8\n63.3\nShoes - men's and women's\n24.3\n50.5\nRubber footwear\n12.1\n24.8\nDress goods and misc.\n17.9\n2.4\nRouse furnishings\n29.8\n25.9\nDraperies, blankets, linens\n34.6\n41.8\nFloor coverings\n39.9\n49.1\nElec.appliances and stoves\n19.7\n3.4\nRadios, phonographs, etc.\n24.7\n39.5\nFurniture and misc.\n39.4\n29.9\nAre equipment and building mat'l.\n34.9\n48.1\nFarm machinery and supplies\n53.8\n89.4\nHardware\n34.8\n44.4\nPlumbing and heating\n31.1\n41.4\nPaints and oils\n20.1\n48.4\nOther building materials\n42.8\n23.8\ninto accessories, etc.\n23.9\n-11.5\nAuto accessories\n30.9\n57.8\nAuto tires and tubes\n17.9\n-94.6\niscellaneous\n35.0\n30.8\nSporting goods and toys\n37.7\n65.2\nBooks and stationary\n40.9\n21.4\nJewelry, clocks, etc.\n36.9\n-28.1\nDrugs and toilet articles\n21.9\n24.2\n1/ Four-week period ended January 29, 1942.\nTable 2\nCONF IDENTIAL 207\nCombined mail order and retail sales,\nMontgomery Ward and Company\nPercent increase\nCalendar year 1941 December 1941 over\nClass of goods\nover 1940\nprevious December\nnothing\n20.1\n20.8\nWomen's clothing\n21.9\n18.9\nMen's and boys' clothing\n20.0\n21.1\nShoes - men's and women's\n11.2\n14.3\nRubber footwear\n13.3\n39.6\nDress goods and misc.\n31.8\n33.4\nlouse furnishings\n23.7\n22.9\nDraperies, blankets, linens\n23.2\n24.9\nFloor coverings\n24.1\n29.2\nElec. appliances and stoves\n22.4\n2.0\nRadios, phonographs, etc.\n8.9\n28.5\nFurniture and misc.\n28.8\n27.0\narm equipment and building mat'l.\n23.9\n34.9\nFarm machinery and supplies\n35.5\n77.6\nHardware\n20.3\n17.8\nPlumbing and heating\n23.5\n38.6\nPaints and oils\n10.4\n28.9\nOther building materials\n30.7\n36.5\nluto Accessories, etc.\n20.4\n0.1\nAuto accessories\n12.9\n26.6\nAuto tires and tubes\n25.4\n- 25.0\niscellaneous\n20.0\n9.4\nSporting goods and toys\n22.7\n11.2\nBooks and stationary\n24.7\n15.8\nJewelry, clocks, etc.\n12.5\n- 5.3\nDrugs and toilet articles\n13.9\n15.2\nRegraded Unclassified\nCONFIDENTIAL\n208\nTable 3\nCombined mail order and retail sales,\nSears, Roebuck and Company\n:\nPercent increase\n:\nFiscal year ended:Latest period 1/\nDistrict\n:\nJanuary 31, 1942 :over previous\n:\nover previous year:\nyear\n:\n:\nNew England (Boston)\n44.1\n66.0\nMiddle Atlantic (Philadelphia)\n31.0\n54.5\nSoutheastern (Atlanta)\n31.7\n19.7\nNorth Central (Chicago)\n28.1\n49.8\nSouth Central Dallas)\n28.6\n27.2\nNorth Pacific Seattle)\n51.5\n66.3\nSouth Pacific (Los Angeles)\n37.0\n47.3\n1/ Four-week period ended January 29, 1942.\nRegraded Unclassified\n209\nCONFIDENTIAL\nTable 4\nCombined mail order and retail sales,\nMontgomery Ward and Company\n:\nPercent increase\n:\n:\nDistrict\n: Calendar year 1941:December 1941 over\n:\nover 1940\n:previous December\n:\n:\nAtlantic Coast and\nSoutheastern\n29.7\n20.8\nChicago-Detroit area\nand Ohio Valley\n30.5\n22.6\nSouth Central\n23.4\n15.1\nworth Central\n21.7 8.7\n14.5\nPacific\n20.8\n1/ Months February through July omitted in this comparison\nowing to strikes which closed both mail order stores in\nthis area.\nTable 5\nCONFIDENTIAL\n210\nPercentage of mail orders omitted 2/\nby Sears, Roebuck and Company,\n4-weeks ended January 29,1942\n(Based on dollar totals)\nPercent of total\nClass of goods\norders omitted\nClothing\n15.0\nWomen's clothing\n19.5\nMen's and boy's clothing\n7.6\nShoes - men's and women's\n7.2\nRubber footwear\n36.8\nDress goods and miscellaneous\n17.1\nHouse furnishings\n12.6\nDraperies, blankets, linens, etc.\n17.1\nFloor coverings\n1.4\nElectrical appliances and stoves\n19.9\nRadios, phonographs, musical instruments\n17.8\nFurniture and miscellaneous house furnishings\n5.5\nFarm equipment and building material\n12.9\nFarm machinery and supplies\n20.7\nHardware\n10.4\nPlumbing and heating\n8.8\nPaints and oils\n1.8\nOther building materials\n11.2\nAuto Accessories, eto.\n11.8\nAuto accessories\n9.4\nAuto tires and tubes\n40.8\nMiscellaneous\n12.5\n16.9\nSporting goods and toys\nBooks and stationary\n9.2\n20.3\nJewelry, clocks, etc.\n6.8\nDrugs and toilet articles\n1/ Representing orders that could not be filled, usually\nbecause the goods ordered were not available. It thus\nserves as an indication of relative shortages.\nRegraded Unclassified\nTable 6\nCONFIDENTIAL\nI\nPercentage of mail orders omitted 1/\n211\nby Montgomery Ward and Co.\nDecember, 1941\n(Based on dollar totals)\nPercent of total\nClass of goods\norders omitted\nClothing\n11.0\nWomen's clothing\n11.4\nMen's and boys' clothing\n9.9\nShoes - men's and women's\n9.2\nRubber footwear\n19.2\nDress goods and miscellaneous\n12.8\nHouse furnishings\n7.4\nDraperies, blankets, linens, etc.\n7-7\nFloor coverings\n2.4\nElectrical appliances and stoves\n5.9\nRadios, phonographs, musical instruments\n7.9\nPurniture and miscellaneous house furnishings\n8.3\nFarm equipment and building material\n9.5\nFarm machinery and supplies\n9.0\nHardware\n11.7\nPlumbing and heating\n11.1\nPaints and oils\n2.4\nOther building materials\n2.8\nAuto Accessories. stc.\n16.5\nAuto accessories\n5.8\nAuto tires and tubes\n29.5\nMiscellansous\n5.4\n6.2\nSporting goods and toys\n5.5\nBooks and stationary\n3.9\nJewelry, clocks, etc.\n1.6\nDrugs and toilet articles\n2/ Representing ordere that could not be filled, usually\nbecause the goods ordered were not available. It thus\nserves as an indication of relative shortages.\nRegraded Unclassified\n212\nTREASURY DEPARTMENT\nINTER OFFICE COMMUNICATION\nDATE March 5, 1942.\nTO\nSecretary Morgenthau\nFROM Jacob Viner\nMy leave-cf-absence from the University terminates on\nMarch 30, and I plan therefore to return to Chicago at the\nend of this month. I will be badly tied-up with University\nduties during the spring quarter. Beginning with June, I\nplan to devote my time as fully as circumstances permit to\npost-war problems. If there are any special problems to\nwhich you would like me to give thought before I leave, I\nwould much appreciate your letting me know,\ngo\n213\nCONGRESS OF THE UNITED STATES\nJOINT COMMITTEE ON REDUCTION OF\nNONESSENTIAL FEDERAL EXPENDITURES\nThere will be a meeting of the Joint Committee in\nRoom 314 Senate Office Building on Thursday, March 5,\nat 10:00 a.m.\nTo\nhear Mr. J. E. Barnes of the Todd\n3-K-42\nShipbuilding Corporation.\nByebs office\nHARRY FLOOD BYRD, Chairman.\nmeeting aro eassa\n1\nEJ7\nRegraded Unclassified\n21\nAUTOMOBILE AIRCRAFT AGRICULTURAL IMPLEMENT WORKERS\nUNITED\nof\nAMERICA (UAW-CIO)\nFISHER BOOY LOCAL BUE\nnee BALDWIN -\nTHE\nSTATE\nTHE\nPONTIAC MICHIGAN\nINTERNATIONAL\nINION\nMarch stb. 1942\nHon. Henry Morgenthau, Jr.,\nSecretary of the Treasury,\nWashington, D. C.\nDear Sir:\nI did not think at the time of our meeting in Pontisc In Sen-\ntember of last year when you were in attendance et one of our\nmeetings at which Mr. Frank Isbey spoke on the sale of Govern-\nment Stamps and Bonds, that it would become necessary for me\nto make an appeal to you for assistance in obtaining defense\norders for the Fisher Body plant in Pontisc.\nThe Pontiac Fisher Body plant employe around 5,000 persons, but\nsince January 30th of this year, only approximately 400 employee\nhave been working. We have made every effort for the past sev-\neral months, to get the local plant management to obtain some\ndefense orders to supplement the curtailment of automobile oro-\nSuction, but without success.\nThe training facilities in Pontiac have been entirely instituste\nto provide training for the thousands of automobile workers who\nhave been thrown out of work because of the curtailment of cuto-\nmobile production. Some six or seven months ago, I arranged A\nseeting with E. R. Leeder, Manager of the Pontisc Fisher Body\nplant, and at that time asked that every effort be made to ot-\ntain defense orders for this plant.\nI also asked Mr. Leeder if it wouldn't be possible to not aside\n9. certain portion of the plant for training purposes 88 the\nplant, even at that time, wea on 8 reduced schedule of automo- about\nbile I felt that if Management were sincere\ncontributing production. their share to the defense program, they could have\nand set some of over in some part of the plant and permitted work,\ntaken their Welding Bucks, Lathes, Milling Machines, the etc.\nworkers to them prepare themselves for the defense production\nMr. snowered me in this way: \"Due to the fact that that we\ndon't Leeder defense orders that will require them.\" In\nother words, if General Motors WAB not going to be\ntype of anticipate skill, we any do not feel obligated to train able to\nURE these men themselves once they were trained, they die not\nRegraded Unclassified\nPage #2\n215\nfeel obligated to train them for someone else which, in my opinion,\nwas a very narrow and unpatriotic point of view to tak.\nThe employes of this plant are in B very serious predicament as\nother employee are refusing to hire anyone with a great deal of\nseniority in this plant because they feel that they will be\ncoming back to this plant if and when work 18 available here.\nYet there is very little if any work in sight for them at this\nplant.\nMany of our people have sons in the armed forces of this country\nand can't understand why a plant of this size is allowed to stand\nidle while their sons go into battle poorly equipped for laok of\nthe necessary weapons to prosecute a winning fight to preserve\nthe democratic principles of their Country.\nWe have had very good success in the sale of stamps and bonds\nin Pontiac. Some of the local unions are making regular monthly\ninvestments in Government bonds. However, these people who are\nout of work want to do their part for their Country also, and\nare not able to because there is no work available.\nI sincerely hope that you will make every effort to assist our\nCommittee in getting defense orders for this plant while they\nare in Washington. The three members of this Committee have\nbeen provided with credentials from this local. They are\nBrothers Arthur J. Law, Ted Helgeson and William Morris.\nI am sure that you will do whatever you can for this Committee\nand I wish to assure you that if there 18 any way in which I\ncan reciprocate, do not hesitate to ask.\nD.V.C.le Sincerely yours,\nD. V. Cote', Fin. Secy.\nFisher Local #596, UAW-CIO\n:kf\nuopwa.cio\nRegraded Unclassified\nDaily changes in the stock of Series E savings bonds on hand 1/\n(In thousands of pieces)\n: Number of : Number of pieces : Stock on hand :\nIBM\n:pieces sold :\nmanufactured\n:\nat close of\n:\ndeliveries\n: this day\n:\nthis day\n:\nday\n:\nthis day\nFeb. 23\n214\n800\n21,905\n1\n24\n55\n800\n22,650\n11\n1,600\n25\n104\n800\n23,346\n700\n26\n158\n800\n23,988\n875\n27\n240\n800\n24,548\n660\n28\n162\nnone-closed\n24,386\nI\nMer. 1\nnone-closed\nnone-closed\n24,386\n-\n2\n304\n500\n24,582\n-\n3\n160\n500\n24,922\n625\n4\n171\n500\n25,251\n-\nOffice of the Secretary of the Treasury,\nMarch 5, 1942\nDivision of Research and Statistics.\n1 Includes stock in hands of (1) Federal Reserve Banks and branches, (2) Post\noffices, (3) Federal Reserve Bank issuing agents, and (4) Treasury vaults\nin Washington.\nRegraded Unclassified\nUNITED STATES SAVINGS BONDS\nComparative Statement of Sales During\nFirst Three Business Days of March, February and January 1942\n(March 14. February 1-4, January 1-3)\nOn Basis of Issue Price\n(Amounts in thousands of dollars)\nI\nI\nAmount of Increase\nIf Percentage of Increase\nSales\nI\n:\nor Decrease (-)\nI\nor Decrease (-)\nItem\n#\nI\n:\nI\nMarch\n:\nFebruary\n:\nMarch\n:\nFebruary\nI\nMarch\n: February\nI\nJanuary\n:\nover\n:\never\n:\nover\n:\nover\n:\n:\n:\n#\nFebruary\n:\nJanuary\nI\nFebruary\n:\nJanuary\nSeries 1. Post Offices\n$ 12,180\n$ 16,899\n$ 13,242\n-$ 4,719\n$ 3,657\n- 27.9%\n27.6%\nSeries 1 - Banks\n33,160\n58,575\n30,522\n- 25,415\n28,053\n- 43.4\n91,9\nSeries 1- Total\n45,340\n75,474\n43.764\n- 30,134\n31,710\n- 39.9\n72.5\nSeries I - Banks\n6,329\n12,921\n5,299\n- 6,592\n7,622\n- 51.0\n143.8\nSeries G - Banks\n30,064\n57,828\n20,837\n- 27,764\n36,991\n- 48.0\n177.5\nTotal\n$ 81,733\n$146,223\n$ 69,900\n-$64,490\n$76,323\n- 44.1%\n109,2%\nOffice of the Secretary of the Treasury, Division of Research and Statistics.\nMarch 5. 1942.\nSource: All figures are deposits with the Treasurer of the United States on account of proceeds\nof sales of United States savings bonds.\nNote: Figures have been rounded to nearest thousand and will not necessarily add to totals.\nRegraded Unclassi\n218\nUNITED STATES SAVINGS BONDS\nDaily Sales - March, 1942\nOn Basis of Issue Price\n(In thousands of dellars)\nPost Office\nBank Bond Sales\nAll Bond Sales\nBond Sales\nDate\nSeries E\nSeries E\nSeries ,\nSeries G\nTotal\nSeries I\nSeries I\nSeries 0\nTotal\nMarch 1942\n2\n$ 5,811\n$ 15,868\n$ 2,043\n$ 8,726\n$ 26,636\n$ 21,678\n* 2,043\n$ 8,726\n$ 32,447\n3\n2,975\n8,459\n1,629\n8,780\n18,868\n11,434\n1,629\n8,780\n21,843\nit\n3.395\n8,833\n2,658\n12,558\n24,048\n12,228\n2,658\n12,558\n27,443\nTotal\n$ 12,180\n$ 33,160\n$ 6,329\n$ 30,064\n$ 69.553\n$ 45,340\n$ 6,329\n$ 30,064\n$ 81,733\nOffice of the Secretary of the Treasury, Division of Research and Statistics.\nMarch 5, 1942.\nSource: All figures are deposits with the Treasurer of the United States on account of proceeds of\nsales of United States savings bonds.\nNote: Figures have been rounded to nearest thousand and will not necessarily add to totals.\nRegraded Uncla\nTREASURY DEPARTMENT\n219\nINTER OFFICE COMMUNICATION\nDATE March 5, 1942\nSecretary Morgenthau\nTO\nMr. Haas\nFROM\nSubject: The Export Freight Situation.\nThe amount of lighterage freight in storage and on hand\nfor unloading at New York harbor at the end of last week\nshowed the slight decrease of 203 care to a total of 19,913\ncars. (See Chart 1.) On February 28 there was additional\nstorage space available for 7,963 cars, 8. decrease of 838\ncars from the previous week.\nExports from New York last week showed a further 1n-\ncrease of 263 cars to an estimated total of 6,232 cars.\n(See Chart 2, upper section.)\nReceipts of export freight at New York increased fur-\nther by 675 cars last week to a total of 6,049 cars. (Refer\nto Chart 2, lower section.) Receipts for export at 9 other\nNorth Atlantic ports increased sharply by 1,113 cars to\n4,116 cars. However, receipts for export at 6 Pacific\nports showed but 8. slight increase, reaching a level of\n1,960 cars.\nRegraded Unclassified\nLIGHTERAGE FREIGHT IN STORAGE\nAND ON HAND FOR UNLOADING IN NEW YORK HARBOR\n1941\n1942\nCARLOADS\nCARLOADS\nThousands\nThousands\n24\n24\n22\n22\n20\n20\n18\n18\n16\n16\n14\n14\n12\n12\n10\n10\nB\n8\nMAR\nMAY\nJULY\nSEPT\nNOV.\nJAN\nMAR.\nMAY\nJULY\nJAN\nSEPT.\nNOV.\n1941\n1942\nLargely export freight, But about 10% represents freight for local\n220\nand coastal shipment, Figures exclude grain.\nChart 1\nOffice of the Secretary of the Treasury\n- of - and Statistics\nC-303-0\nRegraded Unclass\nEXPORT FREIGHT MOVEMENT\n1941\n1942\nCARLOADS\nCARLOADS\nThousands\nThousands\nExports\n10\n10\n9\n9\n8\nB\nFrom New York\n7\n7\n6\n6\n5\n5\n4\n4\n3\n3\nit\n2\n2\nJAN.\nMAR.\nMAY\nJULY\nSEPT.\nNOV.\nJAN.\nMAR.\nMAY\nJULY\nSEPT.\nNOV.\n1941\n1942\nCARLOADS\nCARLOADS\nThousands\nThousands\nReceipts for Export\n10\n10\n9\n9\n8\n8\nAt New York®\n7\n7\n6\n6\n5\n5\n4\n4\nAt 9 other North\nAtlantic Ports\n:\n3\n3\n2\n2\nI\nI\nAt 6 Pacific Ports\n:\no\no\nJAN.\nMAR.\nMAY\nJULY\nSEPT.\nNOV.\nJAN.\nMAR.\nMAY\nJULY\nSEPT\nNOV.\n1941\n1942\nAs estimated from date of general monagers' association of New York.\n221\ne Association of American Reiroade.\nOffice of the Secretary of the Transury\n2 state\nC-382-B\nDivision of - - -\nRegraded Un\n222\nTREASURY DEPARTMENT\nINTER-OFFICE COMMUNICATION\nDATE March 5, 1942\nTO\nSecretary Morgenthau\nFROM\nMr. White\nI EUTI giving you herewith a comparative statement of the\napproximate earnings of the Stabilization Fund for the months\nof January and February, 1942.\nEarnings\nJanuary 1942\nFebruary 1942\ninterest earned on investments\n$ 20,220.69\n$ 18,263.85\nInterest earned on Yuan\n24,359.81\n22,030.43\nInterest earned on Milreis\n9,804.29\n3,101.38\nTotal\n$ 54,384.79\n$ 43,395.56\nProfits on handling charges on gold\n208,470.08\n369,415.87\nGrand Total $262,854.87\n$412,811.53\nExpenses\nSalaries\n$ 19,659.23\n$ 16,655.79\nTravel\n663.06\n462.51\nSubsistence\n123.17\n1,274.11\nTelephone and Telegraph\n1,528.37\n1,884.18\nStationery\n21.88\n13.04\nAll others\n738.34\n1,759.32\nTotal\n$ 22,734.05\n$ 22,048.95\nSet earnings\n$240,120.82\n$390,762.58\nThe increase in the earnings for February resulted from\n= greater turnover in gold trensactions with foreign countries\n9A which the handling charge of 1/4 of 1% was collected.\nThe various expense items fluctuate from month to month.\nIn December they totaled $27,231.87.\nThis report was completed from figures supplied by\nMr. O'Daniel.\nRegraded Unclassified\nSTRICTLY CONFIDENTIAL\nPRINCIPAL BUSINESS INTERESTS OF VICTOR BWANDEL, 45 DERIYED FROM PUBLISHED sounces\n(Interests de not represent\nJanuary 1. 1042\nVictor Eminue)\nAVIATION 453\nNEPUBLIC min\nTRANSPORTATION\nEMAIL are\ncome.\nAUGHERT MARL\nFORM\nCOMP.\nCOMPANY\nTirier -\n- the\n440 LIMIT\n-\nCIMI\nName\nat\n- -\nTheir -\nResoutive Committee\nno williams\nInvoice\nthe themal\ndi the\nLimited facture\nhart - Treatment\n- contraire\nAVIATION CORP.\nSTANTATO 348 AIC\nCHRAFT\n-\n27 more-\n-\nPrestrant\nLABIER\nChaires -\ninstitutes\n4D Hold\net\nADMIRE CENTRAL\nAMERICAN\nAVIATION MPS.\nAMERICAN\nCALIFORNIA\nMOUNTAIN\nDELAITIRA GAS\nWITH CIRP.\nAIRPLANE AND\nCORP.\n. OTHER\nAIRLINES use?\nENSIRE 2012.\nPRIDON POTER\nstarts\nAND ELECTRIC\nDISCOMADO FOREE\nTIME -\nuse check\nSUBSIDIANTES\n435\n= -\nCOMPANY\npara SMITH\nCOMPANY\nCOMPANY\n- the\n100: Dien\n- instruction\n-\nID TOWN\nMODEVELT\nWINE\nFAR AMERICAN\nTURCHTO\nMADRET STREET\nwe\nWITHES\nNOTE GAS\nSHIPSTILDING\nAIRCRAFT no.\nADDRESS LES.\nFUILADELPHIA\nTELD INC.\nALPHATE\nCOMP.\nPAILWAT\nAND ELECTRO\nCATE portes\nPUBLIC SERVICE\nARE ELECTRIC\nCOMPANY\npl -\nAPT - -\n- IMPLE\n- -\nCOMPANY\nCOMPANY\nCONTANT\n:\nCIRPANY\n114 -\n0334 millions\nIVS stillens\n-\n-\n-\n- signature\n-\nCOMPULITATED\nAIRCRAFT DRF,\n19 SUBSID-\nAM:\nM STATES\nIS state\nIABIER\n3\n- you\nDe streets\nMARCHETTE\n5\nam militant\nRAILWAY\nTARIES\nLIART ARE\nLARTED\n- contrasts\nZARINO\nTRACTICE a\nMONTIER\na\nPLEET\n\" -\nENTERPRISE\nSINCIAFT\nAIRCRAFT\nLIGHT R.\n180.\nen.\n477\n\"AVIATION Derporation's Internet is If item of services Ave Lines is tell LA with - Herribly if -\n- Name: of Involvents and for Thank benefit\n224\nBRITISH AIR COMMISSION\n1785 MASSACHUSETTS AVENUE\nWASHINGTON, D.C.\nTELEPHONE HOBART 9000\nPLEASE QUOTE\nREFERENCE NO\nwith the compliments of British (Ir Commission,\nwho enclose Statement No. 23 - Aircraft Despatched\n- for week ended March 3, 1942.\nThe Hon. Henry Morrentheu, Jr.\nSecretary of the Trensury\nWashington, D. C.\nMarch 5, 1942.\nRegraded Unclassified\nSTATEMENT NO. 23\nYOST SECRET\nAIRCRAFT DESPATCHED FROM THE UNITED STATES\n225\nDURING WEEK ended, MARCH 3rd, 1942\nDESTINATION\nASSEMBLY POINT\nFLIGHT DELIVERED\nS\nBY SEA\nBY AIR FOR USE IN CAN.\ntill\nrecobra\nU.K.\nU.K.\n40\nISOLIDATED\nvelins\nU.K.\nU.K.\n1\n(via Bermuda)\nECHILD\n19\nMiddle East\nSuez\n6\nMARTIN\naltimore\nCanada\n1\nMiddle East\nPort Suden\n3\nTIES\nstyhawks\nAustralia\nMelbourne\nIO\nAMERD\nuon III\nAustralia\nSydney\n18\nAL 12A (Used)\nU.K.\nU.K.\n1\ntura\nU.K.\nU.K.\n2\n2\nCanada\n48 AMERICAN\nIN\nU.K.\nU.K.\n30\n7\n110\n1\n3\ntish Air Commission,\nreig 5th. 19/2.\nRegraded Unclassified\n235.A\nBRITISH AIR COMMISSION\n1785 MASSACHUSETTS AVENUE\nWASHINGTON, D.C.\n-\nTELEPHONE HOBART 9000\nQUOTE\nNO\nWith the compliments of British Air Commission\nwho enclose weekly Statement No. 41, covering\naircraft flight delivery as at March 2, 1942.\nThe Hon. Henry Morgenthau, Jr.\nSecretary of the Treasury\nWashington, D. C.\nMarch 4, 1942.\nIn 0-55\nUS SECRET - BRITISH MOST SECRET\nMARCH 2, 19/2\nof OCEANIC FLIGHT DELIVERY AIRCRAFT -- WEEKLY REPORT NO, 11\nIs LIBERATOR II off Contract 8-677\n55 in U.K.\n5 in M.S. (including I creshed in Africa, Nov. 25)\n4 at Montreal\n*75 taken by U.S.A.A.C., including 1 crashed neur Tucson,\nAriz., Dec. 23, and 1 crached near San Diego, Jan. 2.\n139\n-\n2. HUDSON V (LONG RANGE) off Contract A-1749\n173 in U.K.\n39 at Debert\n1 at Nontreal\n6 under repair\n219 (a)\n3. HUDSON III (LONG PANGE) off Contruct A-68\n211 in U.K.\n1 at Durtnouth\n3 at Nontreal\n19 for U.S.A.A.C. Familiarization Program\n1 under repair\n235 (b)\nàt off Contracts A-2587, F-270, A-37, MIS-58, 0/11-78\n91 in U.E.\n9 at Singapore\n18 in Australia\ny at Dartmouth\n9 in Bormida\n3 en route San Diego for Australia\n8 at Elisabeth City, N.C.\n6 at Fensacola, Fla. (diverted to U.S. llavy)\n153\n5, VINTURAS (LONG BANCE) off Contract 1-34\n2 at Nontreal\n2 in transit\n12 at Long Beach\n16\nbe LODESTARS off Lend-Lünce Contruct AC-53 (ESC Req. 1049)\n(a) C-59\n1 departed Viesi (A.C.F.C. reports it crushed)\n3 arrived Memi for British\n3 taken by U.S.A.A.O.\n?\n(B) C-60\n2 departed Viami\n1 arrived Viami for British\n3\n7. SUBON III-A\n(A) Off Lend-Dease Contract 10-5 (BSC Rec. 62)\n96 at Debert\n4 at Nontreal\n2 at Ottama\n19 in transit for Pritish ( following certal number 97613)\n6 at Montreal, em route Debert\n10 at Maini\n5 under repair\n22 for China\n20 diverted to V.S. Navy\n159 taken by D.S.A.A.C.\n337 (c)\n(B) Off Lond-beare Contract 10-251 (I' 100\n23 in transit (un route Nontreal)\n1 at Long Beach\n24 (d)\nRegraded Unclassified\n225.C\nSheet 2\nINFIDENTIAL REPORT\nMARCH 2, 1942\nE. NC, D-55\nU.S. SECRET. BRITISH MOST SECRET\nLOCATIONS OF OCEANIC FLIGHT DELIVERY ATRORAFT - WEZKLY REPORT NO. 41\nE. B-17 E'p (Army Release) RSC Reg, 10552\n7 at modification center (Cheyenne)\n9. B-25 3's (Any Release) BSC Reg. 10558\n9 at modification center (St. Paul)\n1 en route modification center\n10\n10, B-26 4's (Army Release) RSC Roa. 10556\n6 en route modification center (Omeha)\n1\nat Baltimore\n7\n1\n2\n3\n4\n5\n6\n7\n8\n9\n10\nTOTAL\nDD EINGDOM\n55\n173\n211\n91\n530\n== EAST\n5\n5\nSTATE\n18\n18\n9\n9\n1\n9\n10\n4\n1\n3\n2\n4\n14\nat\n39\n96\n135\ncired, en route Debert\n6\n6\ntan\n2\n2\nemia\n2\n9\nquarted Viand\n3\n3\nland\n4\n10\n14\nnoute San Diego for Australia\n3\n,\nMarbeth City, N.C.\n8\n8\ntransit\n2\nIf\n4\ncenters\n7\n9\n16\n1\n6\n7\nrulte nod. centers\nof Beach\n12\n1\n13\n1\n1\nEtimore\nbirr repair\n6\n5\n12\n1\nto China\n22\n22\ninterted to U.S. Mary\n6\n20\n26\n19\nMAAC Fan. Fro.\n19\nWere by ISUC\n75\n3 153\n231\nOTAL\n219\n235\n153\n16\n10\n361\n7\n10\n7\n1157\n139\nNo indication that last one has left factory.\nImluding six which crashed - two in the United States, four after loaving.\nProluding ten which crashed - one In the United States, three in Canada, and\ndis en route U.S.\nc) Broluding eight which crasted seven in the United States, and CSA in\n4) Excluding one which creshed in the United States\nDIVISION\nPLANNING AND PRODUCTION DEPARTMENT\nERITISE ATE COMMISSION\nRegraded Unclassified\n226\nNote\nthe attached material, just re-\nceived from the State Department, is\ndated November 1941. The two docu-\nments conferring authority on the\nIcelandic Delegation and Vilhjalmur\nThor have been superseded by nov\ndocuments transmitted by the American\nLegation, Reykjavik, in its cable\nNo. 140 dated March 5. 1942. The\nlatter confer authority OB Thor Thore.\n1. Dietrich\nRegraded Unclassified\nTELEGRAM SENT\nDEPARTMENT OF STATE\nWashington.\nNovember 21, 1941\n7 p.m.\nAMERICAN LEGATION,\nREYKJAVIK.\n129.\nYour 124, November 20, 10 p.m. was received too\nlate for transmission to the Icelandic delegation who\nhave already left Washington on their journey home.\nPossibly the Icelandic Government and the National\nBank may wish to give you new documents in the name\nof the Icelandic Minister in Washington.\nHULL\n859A.51/13\nRegraded Unclassified\n228\n/\nAct\nauthorizing the Government to guarantee a\nworking loan for the national Bank of Icaland.\nArt. 1\nTl.= overnment 3. representiti, the Treasury Is\nauthrized to Pushintee DE t.=\n3 at t-- 1.1100\nwited tate.\nart.\nThis Act 8,311\nTranslated from the official Icelandic text.\nSuctiornJonson\nRegraded Unclassified\n229\nWith reference to an Act passed Sixe\nthe 15th November, 1941, authorizing :..: - tc\nguarantee a working loan Ter t. e e National\nI the undersigned Jakes USITED, Iceland's\nFinance, acting or. behalf of the Treasury, 18 sinder bith\nthe Icelandic Trade Commission at \"reselt in\nNamely r. Vilhjél ur Thor, JONK mentger, ::\nson, bank manager, and Sr. 3,0m. .........................\nerciant, full and unrestricted power el attorney\na declaration sinding the 20 gurun\nof full and due repayment of principal\ninterest on = loan not\ndollars - which the Bational of propured perro-\ning from the _tabilization Fund, Thest con,\ntis 20%\n/\nRegraded Unclassified\nLANDSBANKI ÍSLANDS\n230\nREYKJAVIK,\nThis is to certify that we do hereby give Mr. Vilhjálmur\n.hor, General Vanager of our Bank, the National Bank of Iceland\n(Landsbanki Islands) in Reykjavík, on our behalf a full and\nalimited power to take and sign & loan or overdraft at the\ntabilization Fund in Washington, D. C., amounting to L. 3.\nOllars 2,000,000.- -two million U.S. A. dollers - and that\n....tever 321d Mr. Vilhjálmur Thor may do in connection with\nVds matter is equally valid 8,8 1f \"e had done it ourselves.\nDone in Leykjevík, on the 17th day of October 1941\nTHE DARK OF ICE/AD\nMinume\nRegraded Unclassified\nSECOND CORRECTED COPY\nPARAPHRASE or TELEGRAL RECEIVED\nY\nFROM: American Imbresy, Chungsting. China.\nDATE: March 5, 1942, 10 a.m.\nNO.: 190, Section I,\nThis is a message for the Secretary of the Treatury and is from\nAdler. It in a strictly confidential message marked TF-18.\n(1) On March 3 et the Board meeting Hall Patch said that he had\nreceived a cable from the bank of England that after furnishing Board\nwith 1750,000 in order to meet the requirements for sterling since the\noutbresk of the var in the Pacific, presunably DO further calla from the\nBoard need be expected by the Bank of England P.P. a result of the loan\nof 150,000,000 end the changed cituation, Therefore, Hall Patch in\ninclined to desire the suspension of the operations of the Sorri but he\ngave in to the general feeling of the meeting including that of the\nchairman which was one of strong opposition.\nAt this time it would be very unfortunate to suspend operation of\nthe Board, since it would place emphasis on China's isolation, venicen\nto et greater extent the influence and prestige of America and Great\nDritain, end would be welcomed by some groups in the Government of\nOnce operations were suspended, it would be very difficult for the Board\nto regume them. Some commercial careo still remains in Lastio and\nWanting and the Foard should finance the import of these. Even before\nthe regular new route is established from Burne end India E trickle of\ngoods are expected over B. rule treak which DOW existe. À final considera-\nis that, as In suggested originally, the Board's existence may because\nof the confidence which it enjoye afford an instrument which will Se\nconvenient for the use of the loan. (End of Section =)\nGAUSS\nCopy:ime\n3/21/42\nRegraded Unclassified\nG\n0\nP\n232\nY\nPARAPHRASE OF TELEGRAM RECEIVED\nFROM: & merican Embassy, Chungicing, China\nDATE: March 5. 1942, 10 a.m.\nNO. # 190 (Section 2)\nA number of articles in the Press have proposed the\nuse of the Stabilization Board for bond issue, in this\nconnection. We do not have any information here as to\nwhether or how the status of the Board has been affected\nby new British and American loans.\n2. The claims of the Central Bank described in TF-17\nand the fact that the Board while committed by its under-\nstanding with Foreign Exchange Commission to meet (2)\nGovernment of China foreign exchange requirements worry\nHall-Patch. In regard to Central Bank application described\nin TT-17. no action has been taken as yet. Any attempt by\nthe Board to assert any control over any foreign exchange\nexpenditures in the present political situation would be\nmost inadvisable. The oversold foreign exchange position\nof the Central Bank increased, in the meantime, by approxi-\nmately £1,075,000 (sterling) and U.S. dollars $1,300,000 in\nJanuary and February and all (r) remittances to China have\ndried up although remittances from the U.S. still continue.\n3. A letter from & Chinese employee of the Board, who\nescaped from Hong Kong and wrote from (?)1in states that he\nvali with Taylor and Prese until January 5 when they were\ninterned and shared a room in & Chinese hotel in Hong Kong.\nThis\nRegraded Unclassified\n233\n+\nThis employee tried to see them before he left Hong Kong\nbut failed to do 60. He did learn, however, that they\nwere well and safe. Upon his arrival in Chungiding we may\nbe able to send more details.\nThis is the end of the message from Mr. Adler.\nGAUSS\neh:dopy\n3-12-42\nRegraded Unclassified\n0\no\n234\nP\nY\nTRB 3\nRio de Janeiro\nThis telegram must be\nparaphrased before being\nDated March 5, 1942\ncommunicated to anyone\nother than a Governmental\nRec'd 6:11 p.m.\nagency. (BR)\nSecretary of State,\nWashington.\n706, March 5, 4 p.m.\nThe Bank of Brazil will distribute during March\napproximately $5,005,000 to American companies and the\nequivalent of $2.005,000 in sterling area to British\ncompanies for transfer abroad of profits and dividends\nrepresented by applications registered and approved\nthrough February 28.\nInform Treasury and Commerce.\nAirmail despatch follows.\nCAFFERY\nKLP\n0opy:bj:3-13-42\nRegraded Unclassified\nCOPY\n235\nPARAPHRASE OF TELEGRAM RECEIVED\nFROM: American Embassy, Rio de Janeiro, Brazil\nDATE: March 5, 1942, 10 p.m.\nNO. : 717\nThis telegram contains a message for Dr. White of\nthe Treasury Department.\nAgain the Director of Exchange has stated his hope\nthat steps will be taken by our Government to restrict\nthe free circulation in foreign countries of American bank\nnotes. Before issuing instructions for the control of trad-\ning in bank notes, which he is willing to do, he wants to\nascertain your suggestions and views. The Director suggested\nthat restricting to the Bank of Brazil the sale and purchase\nof United States currency might solve the problem. Of course,\nhe realizes that it is not possible to stop currency smuggling\nbut he thinks that something should be done immediately to\nimpede enemy acquisition of bank notes.\nThe Director made the statement that no estimate of the\namount of American currency in Brazil is possible, but we do\nknow, however, that approximately $2,500,000 was received by\nthe Italian Enbassy (refer to telegram 590 dated November 14,\n1940, from the Embassy) and that reasonable amounts of bank\nnotes are held by Germans and Japanese. The total of American\nbank notes which the Bank of Brazil holds is 10,310 and accord-\ning to the Uruguayan Legation, other commercial banks held\ninsignificant amounts.\nCAFFERY\nCopy:bj:3-7-42\nRegraded Unclassified\n236\nNATIONAL CITY BANK OF NEW YORK\nNew York\nMarch 5. 1942\nIn replying please quote\ninitials JAH\nMr. L. W. Knoke, Vice-President,\nFederal Reserve Bank of New York,\n33 Liberty Street,\nNew York, New York.\nDear Mr. Knoke:\nThis will confirm our telephone conversation of this\nmorning in which we informed you that we had received a. cable\nfrom Amministrazione Pontificia per le Opere di Religione,\nCitta del Vaticano, acknowledging receipt of our cable advice\nconcerning the 104 bars of gold which you purchased and are\nholding earmarked for their account. Their cable states:\n\"PLEASE COMPLETE OPERATION GOLD PURCHASING\nAGAINST FOR OUR ACCOUNT GOLD FOR $2,000,000.\"\nWe understand you will give this matter your prompt\nattention and advise us of your decision regarding the purchase\nof additional gold, which we may transmit to Amministrazione\nPontificia per le Opere di Religione.\nVery truly yours,\nTHE NATIONAL CITY BANK OF NEW YORK p.p.\n(Signed) John A. Herber\n(Received by telephone from Federal Reserve Bank of New York, N.Y.\n1:15 p.m. March 11, 1942.)\nle\nRegraded Unclassified\n237\nFEDERAL RESERVE BANK OF NEW YORK\nKarch 5. 1942\nNational City Bank of New York,\n55 Wall Street,\nNew York, N. Y.\nDear Sirs:\nAttention: Mr. J. A. Herber\nWith reference to your letter of today's date, in which\nyou quoted a cable received by you from Amministrazione\nPontificia per le Opere di Religione, Citta del Vaticano,\nregarding the purchase and earmarking of an additional $2,000,000\nin gold, we authorize and request you to transmit by cable to\nAmministrazione Pontificia the following message from us:\n\"We understand Treasury is at present agreeable\nto sale of additional $2,000,000 gold under same\nconditions as gold sold to you on February 26, 1942.\nWe are willing to earmark this and further amounts\nof gold under same terms and conditions as gold\nearmarked for your account on February 26, 1942 as\nfollows: 'We are authorized to receive and hold in\ncustody under earmark for your account, gold which\nis your property, subject to the terms of the\nlicense issued to us by the Secretary of the\nTreasury of the United States. Gold which is re-\nceived and earmarked by us for your account under\nsuch authority is held subject to our usual rules with\nregard to the earmarking and custody of gold. We\nwill provide the same facilities for the custody of\nsuch gold as we provide for our own similar property\nbut beyond that we assume no responsibility. We\nreserve the right at any time to terminate this\narrangement with you in whole or in part upon notice\nto that effect except as to transactions previously\ninitiated.' If the foregoing terms and conditions\nare agreeable to you please so inform us by authenti-\ncated cable through National City Bank of New York.\nIt is understood that for the time being and until\nfurther notice you will give us your instructions\nrespecting gold held by us for your account through\nthe medium of National City Bank of New York and that\nRegraded Unclassified\n238\n-2-\nwe are authorized to act on any instructions relating\nto such gold which National City Bank advises us it\nhas received from you and believes to be genuine.\"\nVery truly yours,\nD. J. Cameron,\n1\nManager, Foreign Department.\n(Received by telephone from Federal Reserve Bank of New York,\nN. Y., 1:15 p.m., March 11, 1942.)\nle\nRegraded Unclassified\nC\no\nP\nY\nDEPARTMENT OF STATE\nWASHINGTON\nMarch 5, 1942\nIn reply refer to\nFD 852.5151/520\nThe Secretary of State presents his compliments to\nthe Honorable the Secretary of the Treasury and encloses\nconies of the paranhrase of telegram No. 208, deted\nRarch 2, 1942, from the American Embassy, Medrid, Spain,\nconcerning the utilization of American currency held by\nthe Snanish Foreign Exchange Institute.\nTelegram So. 99 was transmitted to the Secretary of\nthe Treasury in this Department's letter of February 17,\n1942.\nEnclosure:\nFrom Embassy. Medrid,\nNo. 208, Marca 2, 1942.\nRegraded Unclassified\nC\no\n239\nP\nY\nDEPARTMENT OF STATE\nWASHINGTON\nMarch 5, 1942\nIn reply refer to\nFD 852.5151/520\nThe Secretary of State presents his compliments to\nthe Honorable the Secretary of the Treasury and encloses\ncopies of the paraphrase of telegram No. 208, dated\nMarch 2, 1942, from the American Embassy, Madrid, Spain,\nconcerning the utilization of American currency held by\nthe Spanish Foreign Exchange Institute.\nTelegram No. 99 was transmitted to the Secretary of\nthe Treasury in this Department's letter of February 17,\n1942.\nEnclosure:\nFrom Embassy, Medrid,\nNo. 208, March 2, 1942.\nRegraded Unclassified\n310\nPARAPERASE C7 TILEGRAN RECEIVED\nFROM: American Embassy, Madrid, Spain.\nDATE: March 2, 1942, 5 p.m.\n10. : 308.\nThe Foreign Exchange Institute has been informed by ne that we can-\nnot accede to its request to utilize currency which It nov holds in\norder to buy wheat and coal. I based this on the ressons given in the\nfirst paragraph of the Department's confidential telegram No. 99. 10\ndated the 16th of February.\nIt was stated by the Director of the Foreign Exchange Institute that\nhe felt certain that political considerations sre the besir for the refusal\nof the Government of the United States to allow these bills to be re-\ncatriated end for the blocking of the three million dollers credit obtained\nfrom the Swies. The Director considers the United States Government's\nection unnecessarily harsh because Spain had been given no previous\nindication of a change in attitude in sufficient time to cereit it to make\nother arrangements, and because during 1941 it wee permitted to utilize funds\ntransferred to its account by Switserland. He also pointed out that until\nthe British intervened no objections were nede to the regatriation of\ncurrency. In contrast with the United States' treatment, Suain WER given a\ncertain length of time within which to ship the notes it had accumulated\nwhen the Government of Greet Britzin imposed restrictions against re-\npatriation of counds.\nWith reference to the currency, the Director insisted that it had all\nbeen obtained through norwal channels, that any quesicions that the currency\nwas partly looted could be dissigated by having his booke execined end their\nit would seen that the U. S. Government would avail itself of the opportunity\nRegraded Unclassified\n- 2 -\n241\nto investigate his books if these suspicions were the real reasons. The\nDirector stated that neither of the Axin powers had approached the Institute\nto accept dollar currency for any purpose, nor anyone in the Government\n80 far as he knew. He has continued to buy U. S. dollar currency at the\nrecently fixed official rate as these bills continue to be offered especially\nby travelers arriving from South America. He does not anticipate that\nsuch purchases will be discontinued within the near future.\nWith reference to the blocking of funds transferred from Swiss accounts,\nthe Director's impression is that the Government of the U. S. allows the\nSwies to utilise its credits in the U. S. for the purchase of American\nmaterials. Since, however, the United States Government will not permit\nSpain to utilize the funds transferred from Switzerland for the movement\nof Swies purchases to Switzerland from Spain or for the transportation of\nSwies goods 8. general policy of emberassing Spain must necessarily be\ninferred. The fear was expressed by him that if doller funds acquired by\nSpain from sources other than the sale of its products to the U. S. are\nto be blocked Portuguese payments for the use of Spenish tankers would also\nprobably be affected. Permission to charter such boats for urgent Portuguese\nrequirements would eventually be necessarily refused by Spain because of\nthis.\nHe regrets that in view of Spain's shortage of dollars it will\nprobably find it impossible to meet payments now due in the United States\nunless such funds are released.\nThe point vas made that the volume of American accounts frozen in\nSpain exceeded these funds. In reply the Director said that there had been\nRegraded Unclassified\n- 3 -\n242\naccumulation of American accounts prior to the outbreak of the Civil War;\nthat during his encumbency Spain has attempted scrupulously to meet its\ncommitments and had done so until this extraordinary action by the Govern-\nment of the United States.\nWith reference to blocked American accounts, he hoped that we might be\nable to go into this question more fully in the near future in order to\nexplore the possibility of working out some arrangement for their eventual\nliquidation. In all probability this would depend upon the extent to\nwhich Spanish products purchased by American exceeded American products\npurchased by the Spanish.\nBEAULAC\nCopy:bj:eh 3-7-42\nRegraded Unclassified\nTREASURY DEPARTMENT\n243\nINTER-OFFICE COMMUNICATION\n-\nDATE March 5. 1942\nTO\nSecretary Morgenthau\nFROM Mr. Dietrich\nCONFIDENTIAL\nRegistered sterling transactions of the reporting banks were 8.0 follows:\nSold to commercial concerns\n£72,000\nPurchased from commercial concerns\n£29,000\nOpen market sterling held at 4.03-3/4, with no reported transactions.\nThe Uruguayan free peso, which moved off from .5295 to .5275 last week,\nreturned to .5295 today.\nThe Cuban peso moved off to an offered quotation of 3/16% premium today as\ncompared with 3/8% yesterday and the recent high of 7/8% reached on February 9.\nIn New York, closing quotations for the Toreign currencies listed below\nwere as follows:\nCanadian dollar\n11-1/2% discount\nArgentine peso (free)\n.2370\nBrazilian milreis (free)\n.0516\nColombian peso\n-5775\nMexican peso\n.2065\nVenezuelan bolivar\n.2500\nThe Federal Reserve Bank of New York purchased 250,000 Swedish kronor in\nSev York at the rate of .2385-1/2 by order and for account of the Central Bank\nof the Uruguayan Republic, who advised that the kronor were needed to pay for\nUruguayan imports.\nThere were no gold transactions consummated by us today,\nNo new gold engagements were reported.\nIn London, spot and forward silver remained et 23-1/2d, squivalent to 42.67#.\nThe Treasury's purchase price for foreign silver was unchanged at 35#. Handy\nand Harman's settlement price for foreign silver vas also unchanged at 35-1/84.\nWe made no purchases of silver today.\nR\nRegraded Unclassified\n214\nTREASURY DEPARTMENT\nINTER OFFICE COMMUNICATION\nDATE March 5. 1942\nSecretary Morgenthau\n10\nMr. Kamarok\nFROM\nSubject:\nMonthly Report: Royal Air Force Bombing Activity\nin February, 1942.\n1. Bombing activity of the Royal Air Force\nduring February, 1942, WAS on a very low level.\nAs nearly AS it can be made out from the data,\nthe R.A.F. bombers were only about one-fourth\nas active in February as they were in July And\nAugust last summer.\n2. It can be definitely asserted that the\nBritish promises of intensified bombing attacks\nduring this winter have not been fulfilled.\nBad weather conditions during to: winter may be\n8. part of the exulenation. inc development\nof better anti-sircraft defenses on the part\nof the Germans may have become An increasingly\ndeterrent factor.\nRegraded Unclassified\n- ? -\n245\nI. Losses\nTotal Losses in\nLosses during\nraids to\nFebruary\nMarch 1,1942\nR.A.F. bomber losses in\nbombing raids in\nNorthern Europe\n49\n1,439\nII. Analysis of Targets\nTotal Number of\nAttacks during\nattacks to\nFebruary\nMarch 1, 1942\nPorts, docks, shipping\n29\n1,517\nIndustrial plants\n10\n906\nAirdromes and seaplane\nbases\n7\n871\n011 refineries, synthetic\nplents and tank farme\n0\n358\nTotal of above\n46\n3,652\nIII. Leading Cities Attacked\nTotal Number of\nAttacks during\nattacks to\nFebruary\nMarch 1, 1942\nA. Germany\nCologne (industriel center)\n1\n95\nBremen (port)\n0\nR7\nHamburg (port)\n0\n85\nEmden (port)\n0\n71\nWilhelmshaven (cort)\n0\n61\nMennheim (industrial center)\n2\n57\nKiel (port)\n2\n57\nBerlin (industrial center)\n0\n50\nGelsenkirchen (synthetic oil)\n0\n43\nEssen (industrial center)\n0\n43\nHanover (synthetic oil)\n0\n42\nTotal of above (11 cities)\n5\n691\nRegraded Unclassified\n246\n- 3 -\nB. Occupied Areas\nTotal Number of\nAttacks during\nAttacks to\nFebruary\nMarch 1, 1942\nBoulogne (port)\no\nBrest (port)\n119\n2\nOstend (port)\n107\n3\n100\nCalais (port)\n0\n79\nFlushing (port)\nO\nLorient (port)\n63\n0\n52\nTotal of above (6 cities)\n5\n520\nC. Italy\nNaples (port)\n1\n24\nTurin (industrial center)\no\n13\nTotal of above (2 cities)\n1\n37\nRegraded Unclassified\n347\nBISTRICTED\nMID 319.1\nSituation\nNo. 64g\nM.I.D., V.D.\n11:00\nA.M.\nMarch\n5.\n8-11-41\n1945,\nSITUATION REPORT\nI. Pacific Theater.\nPhilippines: No change in the situation to report. Hawali:\nThree medium sized bombs, believed to be from an emeny plane, were\ndropped on Honolulu at 2:15 A.M. today, the Army announced. There were\nno casualties. Burma: The Japanese have crossed the Sittang River in\nforce, causing is British withdrawal on Pegu. Both sides have employed\ntanks in recent fighting. The Rengoon-Mandalay road is atill not occu\npied by the enemy in force, but it probably is not being used by the\ndefenders. Australia: The Japanese made their sixth and seventh air\nattacke on Port Moresby, New Guinea, early today In two small scale\nraids. Some damage was reported but no casualties. Australian aircraft\nagain attacked Gasmata, New Britsin. Japan: The Imperial Japanese\nheadquarters announced today that 30 enemy planes had attacked\nMinamitori Shima, a Japanese island about 1,200 miles southeast of\nTokyo.\nIL. Western Theater.\nVichy: Naval Captain Jean Fontaine, Chief of Vice Premior\nDarlan's Cabinet, declared tonight that the Renault, Selmson and Ferman\nplants were badly hit by the British in the air raid on Paris suburbs.\n111. Fastern Theater.\nThere 1a no reported change in the general situation. The\nRisulans continue to claim successes, especially on the Central and\nNorth Central Fronts. (A situation map will not be (ssued this date.)\nRuesia reports the fact that Germans are using reserve trans\nport planes from Denmark end Yugoalavia in their effort to ferry men and\nsupplies to the 16th Army.\nIV. Middle Tastern Theater.\nNo changes in the situation to report.\nRESTRICTED\nRegraded Unclassified"
}