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Volume 518, April 18 – April 21, 1942
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Volume 518, April 18 – April 21, 1942
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Henry Morgenthau, Jr. Papers
Diaries of Henry Morgenthau, Jr.
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DIARY
Book 518
April 18 - - 21, 1942
- A -
Book Page
Airplanes
Shipments to British Forces - Kamarck report -
4/20/42
518
195
American Federation of Labor
See Financing, Government: War Savings Bonds
Atlantic and Pacific Tea Company, Great
See Financing, Government: War Savings Bonds
- B -
Baldwin Locomotive Company
See Financing, Government: War Savings Bonds
Bethlehem Steel Corporation
See Financing, Government: War Savings Bonds
Biddle, Francis (Attorney General)
See Financing, Government; War Savings Bonds
Board of Economic Warfare
Additional functions - Executive Order for - 4/20/42..
199
a) Treasury offers full cooperation - 4/22/42:
See Book 519, page 217
Brazil
See Latin America
British Purchasing Mission
For vesting order sales, see Lend-Lease; United Kingdom
Business Conditions
Haas memorandum on situation, week ending
April 18, 1942 - 4/20/42
181.
- 0 -
Canada
See Lend-Lease: United Kingdom
Chamber of Commerce, United States
See Financing, Government: War Savings Bonds
Chase National Bank
See Germany
China
Stabilization Board: Weakening of Board decried by
Phillips and White - 4/21/42
261
a) Cable to Adler - 4/22/42: Book 519, page 351
(See also Book 521, pages 174 and 180 -
4/27/42)
Congress of Industrial Organisations
See Financing, Government: War Savings Bonds
Coughlin, Father
James Rowe (White House) and HMJr discuss - 4/20/42..
149
- D -
Dupont Company
See Financing, Government: War Savings Bonds
Regraded Unclassified
- I -
Book Page
arfare. Board of
rd of Economic Warfare
arket
- 4/18/42. etc
518
74,221,341
- 1 -
Government
ings Bonds:-
ntic and Pacific Tea Company, Great (See also
Book 519, page 85)
win Locomotive Company
lehem Steel Corporation
nt Company
York Central Railway
York Shipbuilding Corporation
ey, J. C., Company
sylvania Railroad
ing Railroad
ed States Steel Corporation (See also Book 520,
page 199)
em Electric Company
worth Company
eral Reserve Bank of New York reports on status of
esignating as issuing agents - 4/20/42
120,122
sentatives of Congress of Industrial Organizations,
ional Association of Manufacturers, United States
mter of Commerce, American Federation of Labor,
lway Labor Executives' Association, and Secretary
Agriculture asked to broadcast with HMJr in
nching "new and intensive drive" - 4/18/42
42,78
(See also Book 519, Speeches by HMJr)
) Lieutenant Edward Henry O'Hare to appear on
broadcast also
287
) State and county quotas for May, June, and
July discussed by Treasury group - 4/20/42
83
rative statement of sales during first 15 business
B of February, March, and April, 1942 - 4/18/42
45
8 newsreel talk - 4/20/42
115,117
(American Federation of Labor) confers with
ghteling on future program - 4/20/42
124,258,285
Every Doorbell in the Country": Mail report on
r's proposal - 4/20/42
125
(Attorney General) reports salary deductions at
aval aircraft factory for which there are no
ceipts - 4/20/42
128
rson contributes 10% of pay - 4/20/42
136,137
Relations: HMJr and Callahan discuss - 4/20/42.
151
on bond purchasing discussed by HMJr. Likert, and
th Kane - 4/20/42
154
on and HMJr discuss War Department participation -
21/42
239
Motors program (See also Book 516): Mille reports
Detroit trip to HMJr and Bell - 1/21/42
267
ter
as
Regraded Unclassified
- G -
Book Page
General Motors Corporation
See Financing, Government: War Savings Bonds
Germany
Rueckwanderer Marks: Justice-Treasury correspondence
concerning agencies engaged in distribution of
(Chase National Bank, etc.) - 4/21/42
518 329
Gold
See Latin America: Venesuela
If U.S.S.R.
Goodbar, Joseph E.
For war emergency income tax and correspondence with
Mrs. FDR, nee Revenue Revision
- I -
Henderson, Leon
See Financing, Government: War Savings Bonds
Hunter, Howard (Work Projects Administration)
See Inflation
- I-
Inflation
Future delivery of certain consumers' goods for which
payment would be made now suggested by Howard Hunter
(Work Projects Administration) - 4/20/42
130
MacLeish at first opposed volunteer plan - HMJr tells
Mrs. Rosenberg - 4/20/42
142
Ingersoll, Ralph: Use of billboards discussed by
Ingersoll and HMJr - 4/20/42
144
a) Mrs. Rosenberg--HMJr conversation
140
Vandenberg-HMJr correspondence concerning absorption
of excess purchasing power by voluntary bond
purchases - 4/21/42
290
Ingersoll, Ralph
See Inflation
Insurance, Veterans'
See Veterans' Insurance
- J -
Japan
Taylor (William) and Frese (Walter): State Department
expects them to be repatriated on first Japanese
exchange vessel - 4/18/42.
72
- K -
Kane, Keith
See Financing, Government: War Savings Bonds
Regraded Unclassified
- L -
Book Page
Lasker, Albert
See Lord and Thomas
Latin America
Brazil: Dollar exchange - Bank of Brazil and Banco de
Portugal - 4/21/42
518
334
Venezuela: Additional gold to be purchased and
carmarked 4/20/42
214
Lend-Lease
United Kingdom:
See also Book 513
Contracts financed by United Kingdom and utilized by
United States or transferred to U.S.S.R.:
Conference: present: representatives of Lend-Lease:
White and Miss Kistler - 4/18/42
28
Conference with State Department representatives -
4/20/42
146
War Department estimates of money available -
4/20/42
192
McCloy-HMJr conversation - 4/21/42
252
a) Planes - $67- instead of $80 million:
See Book 520, page 28
b) Preliminary payment of $70 million recommended
to FDR by Secretary of War - 2/24/42:
Book 520, pages 247 and 248
c) HMJr tells Phillips he resents letter urging
$70 million check by month's end - 4/27/42:
Book 521, page 40
d) Conference; present: HMJr, McCloy, General
Meyers, D. W. Bell, White, and Phillips -
4/27/42: Book 521, page 50
1) Check delivered and document given
McCloy by Phillips
e) Bewley asks that "ordnance" be explained -
4/30/42: Book 522, page 272
Phillips confers with White - 4/21/42
260
Vesting order sales - 4/18/42
30-33
Report for week ending April 18, 1942
36
U.S.S.R.: Vessels clearing Eastern Seaboard ports
through April 22, 1942
331
Likert, Dr. (Agriculture Department and Office of Facts
and Figures)
See Financing, Government: War Savings Bonds
Lord and Thomas
Lasker (Albert) thanked by HMJr for services of Weir -
4/21/42
262
- M -
MacLeish, Archibald
See Inflation
Military Reports
British operations - 4/18/42, etc
76,77,222,342
Coordinator of Information reports:
British Political Warfare Executive Weekly:
French directive - 4/20/42
223
German " # - 4/20/42
227
Kamarck summary - 4/20/42
230
Regraded Unclassified
- M - (Continued)
Book Page
Morgenthau, Henry, III
War Duty:
Correspondence concerning - 4/20/42
518
166,168
Entering Army as private late in May - Office
for Emergency Management release from Cleveland -
4/21/42
284
- N -
Nash, Ogden
Assistance offered Treasury in any way possible -
4/20/42
178
National Association of Manufacturers
See Financing, Government: War Savings Bonds
New York Central Railway
See Financing, Government: War Savings Bonds
New York Shipbuilding Corporation
See Financing, Government: War Savings Bonds
- 0 -
O'Hare, Edward Henry - Lieutenant
See Financing, Government: War Savings Bonds
- P -
Penney, J. C., Company
See Financing, Government: War Savings Bonds
Pennsylvania Railroad
See Financing, Government: War Savings Bonds
Portugal
See Latin America: Brazil
Press Relations
See Financing, Government: War Savings Bonds
- R - -
Railway Labor Executives' Association
See Financing, Government: War Savings Bonds
Reading Railroad
See Financing, Government: War Savings Bonds
Revenue Revision
Joint Returns: Treasury position explained for Mrs. FDR -
4/21/42
310
Goodbar, Joseph E.: Treasury--Mrs. FDR correspondence
concerning - 4/21/42
320
Rosenberg, Anna
See Inflation
Rueckwanderer Marks
See Germany
- S -
Book Page
Speeches by HMJr
See also Financing, Government: War Savings Bonds
War Savings Bonds newsreel talk - 4/20/42
518 115,117
Stimson, Henry L.
See Financing, Government: War Savings Bonds
- T -
Taxation
See Revenue Revision
Taylor, William
See Japan
- U - -
U.S.S.R.
See also Lend-Lease
Bullion deposited with Mint by Federal Reserve Bank
of New York - 4/21/42
326,332
United Kingdom
See Lend-Lease
Budget, 1942-1943 - White memorandum - 4/18/42
52
United States Chamber of Commerce
See Financing, Government: War Savings Bonds
United States Steel Corporation
See Financing, Government: War Savings Bonds
- V -
Vandenberg, Arthur H. (Senator, Michigan)
See Inflation
Venezuela
See Latin America
Veterans' Insurance
Treasury advises Mrs. FDR in connection with request
for support for bill extending period of five-year
term insurance for veterans of first World War -
4/21/42
315
- W -
War Department
See Financing, Government: War Savings Bonds
War Savings Bonds
See Financing, Government
Weir, Walter J.
See Lord and Thomas
Western Electric Company
See Financing, Government: War Savings Bonds
Woolworth Company
See Financing, Government: War Savings Bonds
Work Projects Administration
See Inflation
1
April 18, 1942
10:00 a.m.
HMJr:
Hello. Can I talk now to Mr. Graves?
Miss
Chauncey:
The three gentlemen are here.
pl
HMJr:
Well, let me talk to them. I want a record
made.
C:
I'm making that. Do you want the loudspeaker
on?
HMJr:
Yes.
C:
All right, sir.
HMJr:
Then it's not necessary for you to stay if
you've fixed up the mechanics for it.
C:
They're all in order.
HMJr:
I'll talk to you later in your own office.
C:
All right, sir. (talks aside) Mr. Graves,
the Secretary wants to speak to you first.
Harold
Graves:
Good morning, sir.
HMJr:
Hello, Harold.
G:
How are you?
HMJr:
I'm all right.
G:
Well, that's good.
HMJr:
I'm alive, anyway.
G:
Yes, sir.
HMJr:
That was great stuff over Tokyo.
G:
It was. It thrilled me to death. I hope
there's 8. lot of it and that it's all pretty
bad.
Regraded Unclassified
2
- 2 -
HMJr:
It's the most thrilling thing, I think, since
Russia came in.
G:
Yes, sir, it's great stuff.
HMJr:
And especially after they announced the number
of people captured yesterday in Bataan.
G:
Yes.
HMJr:
But it showed the American Navy can do it.
G:
That's right.
HMJr:
Yeah. Harold, I've had - was in communication
with the President for a long time last night.
G:
Yes.
HMJr:
And you know, Kuhn asked me to take up with
him about doing these movies.
G:
Yes.
HMJr:
I don't know whether you know about it.
G:
I do know about it, yes, sir.
HMJr:
So I said, "What do you think about the timing
at the Treasury?" And he said, "Well, I tell
you, Henry, on the timing I think what you
should do is Wednesday or Thursday, go ahead
with a lot of ballyhoo and announce it if you
are willing to 88y that you can average next
year about a billion a month!
G:
Yes.
HMJr:
See?
G:
Yes.
HMJr:
And he said, "I will come along," and, of course,
this we've got to keep terribly confidential, "on
the following Monday, and back you up."
G:
Yes.
Regraded Unclassified
3
- 3 -
HMJr:
He said, "By doing it this way, we get away
from the controversial issue whether I, the
President, was for or against forced savings."
G:
Yes.
HMJr:
So, I said, "Well, I think it's - I'm willing
to do it, Mr. President, but let me argue with
you just a minute." I said, "Don't you think
it would be better if you announced it yourself
as a part of a comorehensive plan?" So he said,
"No, no, no." He said, "It's not necessary,"
and he said, "You go ahead. I'll give you some-
thing if you want to, to cuote from me direct."
He said, "I think it would be much better if
you did it, and you'll get a good press, and
every newspaper will have to back you up and
say, 'this is fine'" and he said he gets out
of this controversial question.
G:
Yes.
HMJr:
"Well," I said, "I'm willing to do it and glad
to do it." And it sort of, you know, say, put
it on - "Are you willing to come out?" You
see?
G:
Yes.
HMJr:
Well, I thought there was only one answer, and
I hope that the three of you agree with me.
G:
That 18, that we're willing to give some sort
of assurance that we can reach a billion dollars
8. month.
HMJr:
He said for the year average.
G:
Yeah, yeah, yeah.
HMJr:
Average for the year, see.
G:
Yes.
HMJr:
See?
G:
Yes.
Regraded Unclassified
4
- 4 -
HMJr:
But I don't - he couldn't very well have
thought this thing out in advance - but on
these questions of timing and all that, well,
he's 80 much better than I am; and anyway, on
the whole thing, unless he's back of me -
evidently he wants to pick this one thing out.
G:
Yes.
HMJr:
What?
G:
Yes.
HMJr:
And I had a chance to tell him all about what
happened on the Hill, and with Walter Reuther
and all that, and it just tickled him pink.
G:
Good.
HMJr:
He had never read it in the papers.
G:
Yes.
HMJr:
And the fact that we decorated the hall and
all that, he just thought it was unbelievable
and wonderful.
G:
Yes.
HMJr:
Now, I can't see the other two - what do they
think?
G:
Ferdie asked me, "What about the movie with
the.....
HMJr:
No, he doesn't want to do the movie in advance.
G:
He does not.
HMJr:
No.
G:
But that might, I suppose, be a possibility
within the next few days after we start it.
HMJr:
Well, he'll do - you see, he doesn't want
to do that.
G:
Yes.
5
in I I
HMJr:
So the movie - ask him do the movies - point
this out, he wants me to go out in advance.
G:
Yes.
HMJr:
I realize, I think, what he's doing. He wants
me to stick my neck out, and I'm willing to do
it.
G:
Yes.
HMJr:
In fact, I told him I'd do it.
G:
Yes. Well, I think that's right. I think we
ought to do it, even though there is some risk
in it that we may not meet this figure; but I
think we ought to try.
HMJr:
What do the others think? Let me talk to each
of them.
G:
Yeah, just a minute. I'll out Peter on.
Peter
Odegard:
Hello.
HMJr:
Peter, what do you think about the psychology of
it?
0:
Well, I think it's good. I
HMJr:
What?
0:
I think it's very good. Now, Vince had a plan,
you know, for plugging in after the President's
speech for getting on the air labor people and
then getting in the Governors and the Mayors,
and the Chairmen of our local committees on a
State program immediately following these others.
HMJr:
Well, I've got a plan, too, I want to put up. But
what do you think of my going out Wednesday or
Thursday and doing this thing? I mean, do you
think that I've got power enough to do it?
0:
Sure.
HMJr:
What?
6
- 6 -
O:
Sure. Sure. And I think we can make this.
I don't think that you're sticking your neck
out too far.
HMJr:
You think we can make it?
0:
Yeah.
HMJr:
Well, my - you do.
0:
I do.
HMJr:
You do.
0:
Yeah.
HMJr:
Well, I'll tell you how I want to do it in a
minute, but I want to find out if each of you
think I'm making a mistake.
O:
No, I don't think 80.
HMJr:
What?
0:
No, I don't think so, and Ferdie doesn't.
HMJr:
Well, let me hear Ferdie
0:
Yeah, here's Ferdie.
HMJr:
say his own little piece.
0:
(Laughs)
Ferdinand
Kuhn:
Hello, Mr. Secretary.
HMJr:
What do you think?
K:
Well, I think it would be fine 80 long as the
President does back us up within a few days.
HMJr:
Oh, he said he would, the following Monday.
K:
He would do it in his talk.
HMJr:
Definitely.
Regraded Unclassified
7
- 7 -
K:
Well, that's swell. Then I think it's fine to
go ahead and, well, they've all been shaping
it - on it - wanting to get this thing going.
HMJr:
You don't think I'm taking too great a risk?
K:
I don't think so.
HMJr:
You don't.
K:
I'm sure we all feel that we can do this thing,
and especially if the President puts it on a
basis of an average of a billion a month for
a year.
HMJr:
Yeah.
K:
That means we don't have to reach the billion
a month in May or in June.
HMJr:
No. No, he said, "Do you think you could say
you'd average a billion a month for the year?"
K:
Well, that - we could say that.
HMJr:
Beginning the first of July.
K:
We could say that. That's what you said to the
President.
HMJr:
Yeah.
K:
How would you start this, Mr. Secretary?
HMJr:
Well, you out Harold on, and I'll tell him.
K:
All right. Harold. Just a minute.
Harold
Graves:
Yes, sir.
HMJr:
Harold, this is my thought.
G:
Yes.
HMJr:
I don't want - I'd make the announcement jointly
with labor, agriculture, and industry.
Regraded Unclassified
8
- 8 -
G:
Yes.
HMJr:
And if we - I'm sure we can get the time - and
I want a representative, and I've checked it
as to the oneswith the President and he agreed,
C.I.O., A. F. of L., and the Railroad Brother-
hood
G:
Yes.
HMJr:
the Chamber of Commerce
G:
Yes.
HMJr:
the N.A.M.....
G:
Yeah.
HMJr:
and then for Agriculture, unless somebody
can think of somebody better, Claude Wickard.
G:
Yes.
HMJr:
See?
G:
Yes.
HMJr:
I don't know how many that 1s.
G:
That's six.
HMJr:
Six. And myself.
G:
That's seven.
HMJr:
And nobody talk more than three minutes
G:.
Yes.
HMJr:
with the Marine Band here in Washington
giving it the zip.
G:
Yes.
HMJr:
A little Marine band at the beginning, and
two or three times in between, and at the
end; and maybe even the sound of Marine - I
don't know but what that would be enough. I
Regraded Unclassified
9
- 9 -
don't think we need a singer.
G:
No, I shouldn't think so.
HMJr:
But the Marine band at the start, in between,
and in the end, and all of them, each one
pledging that they will do their utmost to
help.
G:
Yes.
HMJr:
And outting them on record.
G:
Yes.
HMJr:
But Claude Wickard with his various committees
on - these counties - it would be terribly
important to get him.....
G:
That's right.
HMJr:
What?
G:
That's right.
HMJr:
What do you think?
G:
Well, I think we ought to do it.
HMJr:
Well, don't you think that is the way to do it?
G:
Yes.
HMJr:
I mean, not just have me go on alone.
G:
No. I think that this would be the right
way to do it.
HMJr:
And then whatever Vince can get - whatever he
can revolve in the way of backing up from the
field, that would be just that much plush.
G:
Well, we can get a lot of that.
HMJr:
And I think that - the President said Wednesday
or Thursday - I think that I would shoot for
Thursday. If I'm not mistaken, they say Thursday
Regraded Unclassified
10
- 10 -
is the best radio night.
G:
Thursday. Yes. Well, that gives us more
time, anyway.
HMJr:
They tell me Thursday is maids' night out,
and it's considered the best night.
G:
Yes.
HMJr:
If people have a maid.
G:
Yeah.
HMJr:
But the group we're trying to reach are maid-
less.
G:
That's right.
HMJr:
But it's known as the best. I think Wednesday's
too early.
G:
Yes. Well, we
HMJr:
What do the other boys think about this?
G:
I think they're in entire accord.
HMJr:
We'd have to get - I mean, we'd have to write
these fellows' speeches.
G:
That's right.
HMJr:
Whoever did that job on that other symposium
was good.
G:
Yeah. (talks aside) Who was that, Ferdie?
That was Herman Wolfe, they tell me.
HMJr:
Well, you can't get a better man than Wolfe,
and Odegard and Kuhn.
G:
Yes, that's right.
HMJr:
What?
G:
Peter, of course, would ordinarily not be here
Regraded Unclassified
11
- 11 -
between now and Thursday.
HMJr:
Well, that's true, but he could be thinking
about it
G:
Yes.
HMJr:
.....and jot down a few good ideas.
G:
That's right.
HMJr:
A couple of slogans.
G:
That's right.
HMJr:
What?
G:
That's right.
HMJr:
A couple of slogans.
G:
Well, suppose we see if we can't develop
something pretty concrete and have it for
you Monday morning.
HMJr:
Yeah. I thought that these people - you
might get out, now that you can use my name
again
G:
(Laughs) Yes.
HMJr:
get out a few telephone - telegrams this
morning.
G:
Yeah.
HMJr:
And try to get these people - I wouldn't worry
about the air. I'm sure we can get the air.
G:
Yes.
HMJr:
And get the people, but I think you ought to
start it this morning.
G:
All right, we'll start it.
HMJr:
But don't, for God's sake, "yes" me, unless
Regraded Unclassified
12
- 12 -
you're with me.
G:
Well, I'm not - I'm with you. I - as I said
at the beginning, there's some element of
risk in this thing in my opinion, but I think
we ought to take It.
HMJr:
Oh, I'm willing to take it.
G:
Yes.
HMJr:
General Marshall said he's making up his mind
every day, he told me. He said he can't -
somebody always says, "Well, look out. You're
going to be investigated by Congress."
G:
Yeah. (Laughs)
HMJr:
But I'm willing to take it, and I think that -
well, I think it's worth the risk.
G:
I think 80, too. I think it's our job to take
it.
HMJr:
And if we get these people behind us - now,
one other thing I'd like to do if Ferdie agrees,
I think we ought to invite down Monday a repre-
sentative of the advertising agencies, and I'd
like to meet him and talk to hi m and get all
of them to help, not just one.
G:
You, of course, know, that there 1s here under
the auspices, I suppose, of Lowell Mellett -
or perhaps it's MacLeish - it 18 MacLeish,
Ferdie says - what they call an Advertising
Council.
HMJr:
Yeah, but they've never used them. MacLeish
said 80.
G:
Well, perhaps we ought to begin to use them?
HMJr:
Well, I'd like - they mentioned - MacLeish said
we ought to get them down. He said we should
do it.
G:
Yeah.
Regraded Unclassified
13
- 13 -
HMJr:
Some one person. I think we ought to have
him down Monday.
G:
Yes.
HMJr:
And I'd like to sit down and talk with him.
G:
That would be the head of what they call
the Four A's, I believe. Is that what you
mean?
HMJr:
Well, Ferdie was there.
G:
The Association of Advertis
HMJr:
He knows what MacLeish said. He said that
there's some person representing what they
call the Advertising Council.
G:
Yeah, that's right.
HMJr:
What?
G:
That's right.
HMJr:
I don't know whether it's the Four A's or
what, but Ferdie ought to be able to find
out.
G:
Yeah. Ferdie will know.
HMJr:
What?
G:
Ferdie will know. He says that it corresponds
to the movie committee that Mr. Harmon has -
same sort of set-up.
HMJr:
Well, whoever the person 1s, let's get him
down Monday and I want to talk to him.
G:
All right, sir.
HMJr:
I have an appointment for three o'clock Monday,
but I could - I haven't anything on, we can
see him at eleven.
G:
Eleven o'clock Monday.
Regraded Unclassified
14
- 14 -
HMJr:
Yeah.
G:
I'll let Ferdie do that one.
HMJr:
Yeah.
G:
Fine.
HMJr:
But this other thing will be something that
you boys will have to turn loose on still
this morning.
G:
Well, I think what we'd better do then will
be to send telegrams in your name to the
six people that would have a part in that
broadcast on Thursday.
HMJr:
That's right.
G:
And do you think we had better omit for the
moment Secretary Wickard, 80 that you might
ask him personally, or do you want us to send
8. telegram also to him?
HMJr:
Oh, I'd send it also to him.
G:
All right, sir. We'll do it.
HMJr:
And better find out - the operator could find
out in case - what their home addresses are.
G:
Yes.
HMJr:
Because these business men might not - I think
I'd send it both to their offices and their
homes.
G:
Home and office.
HMJr:
Yeah.
G:
All right, sir. We'll do it that way.
HMJr:
Home and office. Send it to both places.
G:
Yes, sir.
HMJr:
And I think I'd shoot for Thursday night.
Regraded Unclassified
15
- 15 -
G:
All right, sir. We'll do it that way.
HMJr:
Yeah. And I don't suppose you've had time
to work out a receipt yet.
G:
Well, we stayed here last night until late,
and had some of our New York people down.
I planned to go to New York myself on Wednesday
HMJr:
Yeah.
G:
to discuss this with some of the bankers
up there, because I think we do have the germ
of an idea that will permit a follow-up on
this thing, which is what you want.
HMJr:
Yeah.
G:
But it will depend - whether we can work it
or not will depend, I think, on what kind of
cooperation we can get from the banks. The
idea that we have is that a copy of the pledge
or order that is taken from the person visited,
will be furnished the agency which he designates
as the place where he's going to buy his bond;
and then we'll have that agency - a bank or
post office - follow up and see that he does
buy his bond or bonds.
HMJr:
Well, send a wire to B. M. Edwards to be there
Monday morning.
G:
I think that's a good idea.
HMJr:
And I mean - because I - you won't be able to
go uo to New York Wednesday, because I'll want
you at my elbow.
G:
Yes, sir. Well, I'll postpone that. I'll make
it some other day.
HMJr:
But send for B. M.
G:
Yeah, I'll get him here.
HMJr:
Now, what's his name told me - Buffington -
that on Thursday at Chicago, International
Regraded Unclassified
16
- 16 -
Harvester are getting eight hundred business
men together
G:
Yes.
HMJr:
.....
to tell them their plan, and they want
somebody out there.
G:
Yeah. Dan was to go to that, according to
Buffington.
HMJr:
Well, I told him that I didn't want Dan to go
out there.
G:
Oh.
HMJr:
I don't think Dan's the right fellow to go.
G:
Uh huh.
HMJr:
I mean - in the first place, Dan's awfully
tired, and I don't think he's the fellow.
G:
Yeah.
HMJr:
You know - I'm just going to make a suggestion -
but the best speaker I heard yet is that
St. Louis ball team owner.
G:
Yeah, that's right. But I don't think he'd
do for this kind of thing.
HMJr:
Well, you think it over.
G:
What you've got to have on this is somebody
who knows the details of this payroll allotment
thing, and how it can be promoted and how it
can be managed, and - but Rickey wouldn't
do for that.
HMJr:
He wouldn't?
G:
No.
HMJr:
Well, think about it.
G:
We can send - I think probably the best man we
Regraded Unclassified
17
- 17 -
could send would be Gamble.
HMJr:
That'd be okay. I'd approve of that.
G:
I think Gamble knows more of the details of
this thing and can talk better about it than
anybody else.
HMJr:
I mean, I sold myself the suggestion of this
broadcast.
G:
Yes.
HMJr:
You see what I mean?
G:
Yes, I do. Well, I think we'll just draft
Gamble for that job.
HMJr:
That's all right. And you send a telegram to
B. M. Edwards.
G:
I will.
HMJr:
And tell him to be up here.
G:
Yes, sir. I'll put your name on it.
HMJr:
What?
G:
I'll put your name on the telegram.
HMJr:
All right. Do that.
G:
In spite of this order that we got the other
day.
HMJr:
I rescinded the damn order yesterday.
G:
(Laughs) Can you hear the boye laugh?
HMJr:
Yeah.
G:
All right. That's fine.
HMJr:
I did that as a very small gesture of my very
large confidence in the three of you.
Regraded Unclassified
18
- 18 -
G:
(Laughs) Yeah, that's swell. That's swell.
We won't abuse it.
HMJr:
Didn't Ferdie give that to you?
G:
No, he didn't.
HMJr:
He didn't?
G:
He didn't. Well, he's been 80 busy.
HMJr:
The little rascal. I told him, I said, "Word
for word, repeat it."
G:
Yeah. Well, we'll govern ourselves accordingly.
HMJr:
What?
G:
We'll govern ourselves accordingly.
HMJr:
We'll get Ferdie writing these religious
speeches until he gets his mind off money.
G:
(Laughs) Yeah.
HMJr:
Incidentally, I gathered that Mrs. Morgenthau
did very well yesterday, and Mr. Rainey was
very nice up there.
G:
These boys are shaking their heads approvingly,
and I'm very glad to hear that.
HMJr:
Ask them to have Rainey send down a little
report to me.
G:
Yes.
HMJr:
Here's one thing for future, none of the New
York people were invited
G:
Oh.
HMJr:
and knew about it, and Colonel Patterson
felt badly.
G:
Uh huh.
HMJr:
Because he would have liked to have been there.
19
- 19 -
G:
Yeah. Well, I'll make a note of that.
HMJr:
See?
G:
Yes.
HMJr:
But they want - there was no
G:
Yes.
HMJr:
And New York Times carried a nice story.
G:
Good. Good.
HMJr:
But she evidently did - I gather - did very
well.
G:
Yes. Ferdie says so.
HMJr:
And Mrs. Morgenthau said that this Mrs. Floyd
Odlum was God-awful.
G:
(Laughs) Yeah.
HMJr:
She spent her whole time criticizing us on
using the word "War Bonds" instead of
G:
"Freedom Bonds".
HMJr:
What?
G:
"Freedom Bonds".
HMJr:
"Freedom Bonds". She got - she went into
perfect tantrums over it.
G:
Yeah.
HMJr:
And it didn't help.
G:
Well, we have to put up with a certain amount
of that kind of thing.
HMJr:
I know. But the Mrs., I gathered, did all
right.
G:
Well, that's swell.
20
- 20 -
HMJr:
Does Ferdie have anything?
G:
Apparently he has, because he
HMJr:
Let me talk to him.
G:
Just a minute.
Ferdinand
Kuhn:
Mr. Secretary, I was only judging from the
papers, and I think she did very well.
HMJr:
The Times gave a good write-up.
K:
Yes, and they pick out good stuff; and if
she hadn't done well, I don't think that they
would have had all that good, friendly publi-
city.
HMJr:
Well, tell Rainey to send me down a little
note about what his reaction 1s.
K:
Good. Did Rainey do all right for her?
(The record bearing the last part of this
conversation was damaged. The following 18
the version as dictated by Mr. Kuhn.)
I asked the Secretary whether the President
would do that movie for us, and the Secretary
said, "No."
He asked me whether I thought it was all right
to go ahead on the basis of an average of a
billion dollars a month for 8. year as our goal,
and I said, "Yes."
I asked the Secretary whether Mr. Rainey had
been helpful, and the Secretary said that
Mrs. Morgenthau was very, very pleased with
the way Mr. Rainey had handled matters. She
heard that the New York War Savings people
were upset because they had not been informed
Regraded Unclassified
21
- 21 -
about her talk, but I said I thought there
had been some slip-up in the New York Office
itself as we had informed them, I thought.
22
April 18, 1942
Reading copy of Secretary's radio address
over Blue Network for the Jewish Welfare
Board (25th anniversary) April 18, 1942
23
Tonight's anniversary broadcast
has given all of us, I think, a clearer
understanding of the great work that the
Jewish Welfare Board and other service
organizations are doing for our men in
uniform.
This is a war in which we
stay-at-homes can see very little of the
men who are training in far-off camps or
serving in still more distant posts of duty
abroad. We civilians often wish that there
were some way of showing our admiration and
gratitude to the men who have given up so
much to fight for us.
Regraded Unclassified
24
2
We have had too little opportunity to
invite soldiers and sailors into our homes
for a meal, or to cheer them on parade,
or to do anything to take away from the
loneliness that all of them feel in strange
places far from home.
The Jewish Welfare Board and
similar service agencies are doing
precisely what so many of us would like
to do for the soldiers and sailors 1f
we could.
Regraded Unclassified
25
3
Starting its work twenty-five years ago
in the First World War, and now in this
far greater war, the Jewish Welfare Board
has joined hands with the five other
agencies in the U. S.O. to make all
men in uniform feel at home, wherever
they may be. It does much more than care
for the religious needs of Jenish soldiers of Jewish faith
It does its best to give recreation,
comfort and companionship to all service
men, whatever their religion.
Regraded Unclassified
26
4
For this reason I believe that
the work of these agencies deserves every
bit of support and encouragement that we
can give. We on the home front will be
asked to make many sacrifices to win this
war, but nothing we can do can possibly be
compared to the sacrifices by the men who
have interrupted their careers and offered
their very lives in the service of our
freedom. We cannot go to the camps and
battle stations to lighten the load of the
men in uniform; we can, however, be thankful
to the service organizations which are doing
that job on our behalf.
Regraded Unclassified
27
5
They are developing the qualities of heart
and mind that have always marked American
fighting men. They are helping to build
an army and navy of free men that will
outfight, outlast and destroy all the
drilled and regimented armies of our
enemies.
Regraded Unclassified
28
April 21, 1942
MEMORANDUM FOR THE FILES:
Meeting in Mr. White's Office,
April 18, 1942
3:30 p.m.
Present: Messrs. McCabe, Rostrow,
Noyes and Echer of Lend-
Lease;
Mr. White and Mies Kistler
of Treasury
Mr. McCabe reviewed the current status of British contract
transfers. He stated that the Army has agreed to take over up to
$300 million of British contracts provided the President gives a
directive. It was agreed that although the British dollar position
will be reasonably comfortable during the next few months even if
no contracts are taken over by the Army, something should be done
during the remainder of this year to increase Britain's cash balance.
It was agreed that if the British were taken out of some of their
contracts it would reduce the necessity of pressing for alternative
measures of relieving the British dollar position, as well as increase
our bargaining power with Britain for reciprocal Lend-Lease aid.
Mr. McCabe reported that all supplies used by our Army in Ireland
are being supplied by the British, on their own initiative, under
reciprocal Lend-Lease arrangements, and that Australia is likewise pay-
ing for supplies for the American armed forces there on the assumption
that a similar Lend-Lease agreement will be reached with that country.
Mr. McCabe reported that over a month ago Lend-Lease had approved
a requisition for the purchase of $29 million of corvettes in Canada
and that it had held up the approval for the remaining $20 million
pending a study of Canada's D. S. dollar position and pending further
discussion with the Navy on the desirability of this Government acquiring
these boats. It was agreed, after reviewing Canada's U. S. dollar posi-
tion, to hold the decision on the remaining $20 million of boats in
abeyance.
Mr. White stated that Canada's U. S. dollar prospects for the
remainder of the year give no grounds for concern, that the present
forecast is for the Canadian Government to end the year with about $110
million of gold and U. S. dollars.
Regraded Unclassified
29
- 2 -
Mr. McCabe left a copy of a letter from Mr. Land of the War Shipping
Administration to the President, dated March 30 and marked "approved",
in which he requested the President's consent for the purchase by the
United States of $200 million of ships being constructed in Canada,
under contract to the British and Canadian Government, for Lend-Leasing
by us to Britain. These ships seem to be the same ones covered by the
$160 million of probable orders for ships shown in the Canadian
Government's report of estimated receipts from exports to the United
States under the Hyde Park Declaration. They are in addition to the
$50 million Naval program discussed above.
T. M. Kistler
Regraded Unclassified
30
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
Chauncey
DATE April 18, 1942
TO
Secretary For Morghthau
FROM Mr. Dietrich
Official sales of British-owned doller securities under the various vest-
ing orders since February 19, 1940:
No. of Shares $ Proceeds of Nominal Value $ Proceeds of
Sold
Shares Sold
of Bonds Sold
Bonds Sold
Apr. 6
-
-
-
-
7
-
-
-
-
8
-
-
-
-
9
-
-
-
-
10
-
-
-
-
11
-
-
-
-
-
-
-
-
Sales from
Feb.22,1940 to
Apr. 4, 1942 9,847,610-1/6
281,858,763
45,648,016
37,474,216
Sales from
Feb.22,1940 to
Apr.11,1942
9,847,610-1/6
281,858,763
45,648,016
37,474,216
A
Regraded Unclassified
31
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
Miss Chauncey
DATE April 18, 1942
TO
Secretary Mangenthau
FROM Mr. Dietrich
Official sales of British-owned dollar securities under the various vest-
ing orders since February 19, 1940:
$ proceeds of
$ proceeds of
Shares Sold
Bonds Sold
Total
Apr. 6
-
-
-
7
-
-
-
8
-
-
-
9
-
-
-
10
-
-
-
11
-
-
1
-
-
-
Sales from
Feb.22,1940 to
Apr. 4,1942
281,858,763
37,474,216
319,332,979
Sales from
Feb.22,1940 to
Apr.11,1942
281,858,763
37,474,216
319,332,979
319,332,979
$ proceeds of non-vested securities sold
Mar. 30, 1942 to April 4, 1942
400,000
$ proceeds of non-vested securities sold
Sept. 1, 1939 to March 28, 1942
246,000,000
$ proceeds of non-vested securities sold
Sept. 1, 1939 to April 4, 1942
246,400,000
246,400,000
GRAND TOTAL
565,732,979
Jan. 7. 1942 - Cash Dividend on 156 Shares
$
61
Jan. 9, 1942 - Partial Liquidating Dividend
125
9 Units sold from Aug. 18, 1941 - April 11, 1942 for
42
11 Shares Stock Dividend sold Aug. 18, 1941 - Apr. 11, 1942 for
123
56,007 Rights sold from July 24, 1941 - April 11, 1942 for
102,938
D
Regraded Unclassified
TREASURY DEPARTMENT
32
INTER-OFFICE COMMUNICATION
DATE
April 18, 1942
TO
Secretary Morgenthau for Mike Chauncey
FROM Mr. Dietrich
Official sales of British-owned dollar securities under the various vest-
ing orders since February 19, 1940:
No. of Shares $ Proceeds of Nominal Value $ Proceeds of
Sold
Shares Sold
of Bonds Sold
Bonds Sold
Apr. 13
-
-
-
-
14
-
-
-
-
15
-
-
-
-
16
-
-
-
-
17
-
-
-
-
18
-
-
-
-
-
-
-
-
Sales from
Feb.22,1940 to
Apr.11,1942
9,847,610-1/6
281,858,763
45,648,016
37,474,216
Sales from
Feb.22,1940 to
Apr.18,1942
9,847,610-1/6
281,858,763
45,648,016
37,474,216
A
Regraded Unclassified
33
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
Chauncey
DATE April 18, 1942
TO
Secretary Morgenthau
FOR
FROM Mr. Dietrich
Official sales of British-owned dollar securities under the various vest-
ing orders since February 19, 1940:
$ Proceeds of
$ Proceeds of
Shares Sold
Bonde Sold
Total
Apr. 13
-
-
-
14
-
-
-
15
-
-
-
16
-
-
-
17
-
-
-
18
-
-
-
-
-
-
Sales from
Feb.22,1940 to
Apr.11,1942
281,858,763
37,474,216
319,332,979
Sales from
Feb.22,1940 to
Apr.18,1942
281,858,763
37,474,216
319,332,979
319,332,979
$ proceeds of non-vested securities sold
Apr. 6, 1942 - Apr. 11, 1942
100,000
$ proceeds of non-vested securities sold
Sept. 1, 1939 - Apr. 4, 1942
246,400,000
$ proceeds of non-vested securities sold
Sept. 1, 1939 - Apr. 11, 1942
246,500,000
246,500,000
GRAND TOTAL
565,832,979
Jan. 7. 1942 - Cash Dividend on 156 Shares
$
61
Jan. 9. 1942 - Partial Liquidating Dividend
125
9 Units sold from Aug. 18, 1941 - Apr. 18, 1942 for
42
11 Shares Stock Dividend sold Aug. 18. 1941 - Apr. 18, 1942 for
123
56,007 Rights sold from July 24, 1941 - Apr. 18, 1942 for
102,938
R
Regraded Unclassified
The Willard Hotel
Washington, D.C.
April 18, 1942
Dear Mr. secretary,
I passed on to the Chancellor of the
Exchequer your enquiry bout special campaigns for ruising
funds in the United Kingdom, and no nas now asked me to give
you the following message.
The War Ships Week campaign was organized by
the National Savings Committee and its Scottish and Ulster
counterparts. These central committees are responsible under
the Treasury for the conduct of the War Savings Campaign and
operate through a network of approximately 1470 voluntary
local committees covering the whole of Great Britain and
Northern Ireland. Well over 95% of these committees organized.
a local week during the period of the campaign.
The series is not quite finished, but to
date it has raised 526 million pounds. The similar War Weapons
Week series in 1940-1941 raised 460 million pounds. The appeal
is confined solely to subscribers to war Loans as the Treasury
has avoided making any official appeal for gifts to the Exchequer
on the ground that this form of patriotism should be left to
individual initiative. The series has, however, stimulated a
considerable number of gifts and loans free of interest.
The fundamental idea of the Week was to link
an apneal for subscriptions to War Loans with the Royal Navy
by "adoption" of H:M. ships by the communities holding the
week. Each community chose as a target for its week the cost
of building a particular class of vessel and a vessel of this
class was then allocated to it by name. The week was marked
by service and civil defence pageentry centering round this
name and special centers for sale of securites were set up
throughout the district. If the target figure was reached (as
it was in practically every case) the community then "adopted"
its warship and a suitable exchange of courtesies and trophies
was arranged to mark the occasion.
AS regards large and institutional investors
it may be that some money which would normally only be made
availabe to the Government on short term loan through the banks
(a type of loan which did not count in the Warship Week total)
has been diverted to dated loans and has to this extent eased
our problem of cost mar finance, but such diversions should
not be exaggerated. The main effect of the week has been to
impress upon the general public most foreibly the enormous cost
The Honourable
Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D.C.
Regraded Unclassified
- 2 -
of the war and the consequent necessity for the reduction of
civilian consumption to an absolute minimum and for lending
the resulting savings to the State. The results of the War
Weapons Week series show that we can hope for a further gen-
eral increase in the level of personal savings. One further
result of the Week has been to strengthen the machinery of
voluntary local Savings Committees, to introduce new blood
into them and generally to act as a tonic to the War Savings
Campaign.
Yours sincerely,
Hhillips
Regraded Unclas
36
TREASURY DEPARTMENT
PROCUREMENT DIVISION
OFFICE OF THE DIRECTOR
WASHINGTON
April 18, 1942
MEMORANDUM TO THE SECRETARY:
There is submitted herewith the operating
report of Lend-Lease purchases for the week
ended April 18, 1942.
In order to expedite the shipment of Lend-
Lease materials, teletypes have been installed
in our principal field offices whereby we obtain
current information as to the movement of supplies.
Gift Ciffton E. Mack
Work
Director of Procurement
FORDEFENSE
BUY
UNITED
STATES
SAVINGS
BONDS
AND STAMPS
Regraded Unclassified
37
LEND-LEASE
TREASURY DEPARTMENT, PROCUREMENT DIVISION
STATEMENT OF ALLOCATIONS, OBLIGATIONS (PURCHASES) AND
DELIVERIES TO FOREIGN GOVERNMENTS AT U. S. PORTS
AS OF APRIL 18, 1942
(In Millions of Dollars)
ADMINISTRATIVE UNDISTRIBUTED &
Total
U.K.
RUSSIA
CHINA
EXPENSES
MISCELLANEOUS
Allocations
$1401.3
$ 663.0
$ 246.8
$ 55.2
$ 1.6
$ 434.7
1393.3
642.2
230.5
54.6
( .9)
465.1
Purchase Authoriza-
tion (Requisitions)
$ 888.9
$ 597.3
$ 241.4
$ 46.0
-
$ 4.2
( 873.8)
( 588.8)
( 235.6)
( 46.0)
-
3.4)
Requisitions cleared
for Purchase
$ 828.3
$ 569.2
$ 211.3
$ 43.6
-
$
4.2
821.3)
( 565.9)
(
208.4)
(
43.6)
-
3.4)
Obligations (Pur-
chases)
$ 799.1
$ 550.8
$ 204.7
$ 40.2
.8
< 782.0)
( 542.0)
(
196.7)
( 39.9)
( .8)
$ 2.6)
*Deliveries to For-
eign Governments
at U. S. Ports
$ 307.8
$ 255.8
$ 34.4
$ 16.7
-
(
295.4)
( 246.8)
( 31.5)
<
₹
.9
16.3)
-
.8)
#Deliveries to foreign governments at U. S. Ports do not include the tonnage that is either in
storage, "in-transit" storage, or in the port area for which actual receipts have not been re-
ceived from the foreign governments.
Note: Figures in parentheses are those shown on report of April 11, 1942.
Unclass
38
EXPLANATION
Allocations, Purchase Authorizations, Requi-
sitions Cleared for Purchase, Obligations, and
Deliveries to Foreign Governments at U. S. Ports,
increased in total and for each requisitioning
government.
Regraded Unclassified
39
IN REPLY REFER TO
FEDERAL SECURITY AGENCY
FILE No. 11:R0-II
SOCIAL SECURITY BOARD
REGIONAL OFFICE-NEW YORK, N. Y.
OFFICE OF THE REGIONAL DIRECTOR
11 West 42 Street
April 18, 1942
The Honorable
The Secretary of the Treasury,
Washington, D. C.
My dear Henry:
I tried to get you on the telephone
today but you had left for the weekend.
At the last labor meeting. the enclosed
telegram was read by the President. Phil Murray,
who attended the showing by Ingersoll, was most
enthusiastic, and Bill Green had his representatives
there.
The President asked that I communicate with
you and Mr. MacLeish and request you to be good
enough to see whatever Mr. Ingersoll has prepared
to determine whether it had any merit. I have
sent a copy of the telegram to Mr. MacLeish and
have told Mr. Ingersoll that he will hear from you.
The labor people, particularly, were anxious
that you see it as soon as possible, and as I feel
that Mr. MacLeish may delay doing anything about it,
would you be good enough to take the initiative.
Sincerely,
am
Anna M. Rosenberg,
Regional Director
Personal and Confidential
Regraded Unclassified
COPY
40
P031 269 IL
KH BROOKLYN NY APR 15 1942
BRIG GEN EDWIN M WATSON SECRETARY
TO THE PRESIDENT WASHDC
I WILL PHONE YOU IN THE MORNING REGARDING THE FOLLOWING
MATTER IN WHICH I BELIEVE THE PRESIDENT WILL BE INTERESTED.
AN AGGRESSIVE OUTDOOR ADVERTISING CAMPAIGN TO SELL THE AMERICAN
PEOPLE THE IMMEDIACY OF THEIR PERIL IN THIS WAR. THIS PROGRAM
WHICH IS COMPLETELY DEVELOPED CAME TO PM FROM WITHIN THE ADVERTISING
INDUSTRY AFTER IT HAD RECEIVED ONE HUNDRED PERCENT APPROVAL
GOVERNMENT, INDUSTRY AND LABOR, BUT ZERO BACKING, NIGHT BEFORE
LAST I TOOK IT PERSONALLY TO HEADS OF A F OF L, CIO AND RAILWAY
BROTHERHOODS. THEY so ENTRUSIASTIC THAT GREEN'S REPRESENTATIVES,
LUHRSEN AND MURRAY HAVE ASKED ME TO REQUEST A FIFTEEN MINUTE
SHOWING OF THIS PROGRAM TO THE PRESIDENT. THESE MEN HAVE SAID
THEY WOULD LIKE TO COME WITH ME TO ENDORSE PROGRAM PERSONALLY,
SEEKING FINAL ADVICE ON WHETHER GOVERNMENT INTERESTED AND IF so
WHAT AGENCY AND IF NOT ENDORSEMENT so THAT WE CAN PROCEED RAISING
NECESSARY FUNDS FROM PUBLIC. SINCE PROJECT IS VISUAL AND THE
ESSENCE OF IT IS ITS SIMPLICITY AND DRAMATIC IMPACT AND THE
SCALE ON WHICH IT IS TO BE DONE, WRITTEN DESCRIPTION WHOLLY
INADEQUATE AND EXHIBITS MUST BE SEEN, HOWEVER, BRIEFLY, TO
APPRECIATE THE MEASURE OF THEIR USEFULNESS TO THE NATION. I AM
AUTHORIZED BY GREEN'S REPRESENTATIVES, LURRSEN AND MURRAY TO MAKE
THIS REQUEST FOR THE BRIEFEST DEMONSTRATION TO THE PRESIDENT.
AT EARLIEST CONVENIENCE BECAUSE OF URGENT FEELING ON ALL OF OUR
Regraded Unclassified
41
PARTS THAT COUNTRY NEEDS VITAL INJECTION EQUIVALENT
PSYCHOLOGICALLY TO AN ENEMY BOMB FALLING ON EVERY SINGLE
CITY IN THE UNITED STATES. THIS IS WHAT MAKES ME PERSONALLY
CONFIDENT THAT THE PRESIDENT WILL VERY MUCH WANT TO SEE WHAT
WE ARE TALKING ABOUT. REGARDS
RALPH INGERSOLL.
1146P
Regraded Unclassified
42
STANDARD FORM No. 14
APPROVED #T THE PRESIDENT
FROM
MARCH 10, 1526
BUREAU
TREASURY
TELEGRAM
CHG. APPROPRIATION Defense Savings
OFFICIAL BUSINESS-GOVERNMENT RATES
Expenses of Loans
a - - -
10-17
APRIL 18, 1942
BROADCAST
WILL YOU WITH ME FROM KY OFFICE IN WASHINGTON
THURSDAY EVENING APRIL TWENTY-THIRD ON MATIONWIDE
HOOK-UP TO LAURCH NEW.AND INTENSIVE DRIVE FOR THE
SALE OF WAR SAVINGS BONDS. WE ARE AT THAT TIME
ANNOUNCING NATIONAL AND STATE QUOTAS FOR THE MONTHLY
SALE OF BONDS. I AM BENDING SIMILAR INVITATION TO
SECRETARY WICKARD REPRESENTING AGRICULTURE AND TO
OTHERS REPRESENTING LABOR AND MANAGEMENT. SCRIPT OF
THREE TO FIVE MINUTE TALK WILL BE PREPARED FOR YOU
SUBJECT TO YOUR APPROVAL. I NEED YOUR HELP. PLEASE
LET WE KNOW AS SOON AS POSSIBLE.
HENRY MORGENTHAU, JR.
SECRETARY OF THE TREASURY
sand this telegram to the following people - 1 copy to
the residence of each, and & copy to the business
address.
17. Philip Marray, President
Copy to Mr. Philip Murray,
Congress of Industrial Organizations
President
Caráten Hotd
Congress of Industrial
mashington, D. c.
Organization
900 16th Street, 1.1.
mahington, D. C.
ir. 11. P. "itherow, President
Copy to Mr. be P. witherow,
National Association of Manufacturers
President
5448 Borthumberland
Nat'l. Association of
Pithsburgh,
Manufacturers
Blaw-Knox Company
Farmers Building
Pittsburgh, Penna,
Regraded Unclassified
43
STANDARD FORM No. 14
APPROVED BY THE PRESIDENT
FROM
MARCH 10. 1926
BUREAU
TELEGRAM
CHG. APPROPRIATION
OFFICIAL BUSINESS-GOVERNMENT RATES
a. a - - -
10-1728
Page 2
Mr. Albert No Hawkes, President
(No other copy)
United States Chamber of Commerce
1615 il Street, Northwest
Washington, D. C.
Mr. William Green, President Copy to Mr. William Green, Pres.
American Federation of Labor
American Federation of
Hamilton Hotel
Labor
Washington, D. c.
901 Massachusetts Ave.,N.K.
mashington, D. C.
NP. T. C. Cashen, Chairman Copy to Mr. T. c. Cashen, Chairman
Hailway Labor Resoutives Issociation
Railway Labor Executives
Lin Nor Apartments
Assoc.
Linwood Ive. at North
3 Linwood Avenue
Buffalo, New York
Buffal, New York
Regraded Unclassified
44
STANDARD FORM No. 14
APPROVED BY THE PRESIDENT
FROM
MARCH 10, 1925
BUREAU TREASURY
TELEGRAM
CHG. APPROPRIATION
Defense Savings,
OFFICIAL BUSINESS-GOVERNMENT RATES
Expenses of Loans
- - -
10-1733
APRIL 18, 1942
HONORABLE CLAUDE R. WICKARD
SECRETARY OF AGRICULTURE
THE WESTCHESTER APARTMENTS
39TH & CATHEDRAL AVE., N.W.
WASHINGTONYD.C.
BROADCAST
WILL YOU EXXXXXWITH ME FROM MY OFFICE IN WASHINGTON
THURSDAY EVERING APRIL TWENTY-THIRD ON MATIONWIDE
HOOK-UP TO LAUNCH NEW AND INTENSIVE DRIVE FOR THE
SALE OF WAR SAVINGS BONDS. WE ARE AT THAT TIME
ANNOUNCING NATIONAL AND STATE QUOTAS FOR THE MONTHLY
SALE OF BONDS. I AM SENDING SIMILAR INVITATION TO
OTHERS REPRESENTING LABOR AND MANAGEMENT. SCRIPT
OF THREE TO FIVE MINUTE TALK WILL BE PREPARED FOR YOU
SUBJECT TO YOUR APPROVAL. I NEED YOUR HELP. PLEASE
LET ME KNOW AS SOON AS POSSIBLE.
HENRY MOROENTHAU, JR.
SECRETARY OF THE TREASURY
SEND COPY TO
HONORABLE CLAUDE R. WICKARD
SECRETARY OF AGRICULTURE
204 AMINISTRATION BUILDING
DEPARTMENT OF AGRICULTURE
WASHINGTON, D. C.
FK:blb
Regraded Unclassified
CONFIDENTIAL
UNITED STATES SAVINGS BONDS
Comparative Statement of Sales During
First Fifteen Business Days of April, March and February 1942
(April 1-17, March 1-18, February 1-18)
On Basis of Issue Price
(Amounts in thousands of dollars)
:
:
Amount of Increase
Sales
: Percentage of Increase
:
:
or Decrease (-)
:
or Decrease (-)
Item
:
:
:
:
April
:
March
: April
:
March
: April
:
March
: February
:
over
:
over
:
over
:
over
I
:
:
:
March
:
February
:
March
:
February
Series I - E Post Offices
$ 45,367
$ 52,783
$ 60,245
-$ 7,416
-$ 7,462
- 14.0%
- 12.4%
Series E - E Banks
133,502
152,247
225,241
- 18,745
- 72,994
- 12.3
- 32.4
Series I - Total
178,870
205,030
285,486
- 26,160
- 80,456
- 12.8
- 28.2
Series F - Banks
21,582
25,126
35,164
- 3,544
- 10,038
- 14.1
- 28.5
Series G - Banks
94,792
114,964
178,238
- 20,172
- 63,274
- 17.5
- 35.5
Total
$295,244
$345,120
$498,887
49,876
-$153,767
- 14.5%
- 30.8%
Office of the Secretary of the Treasury, Division of Research and Statistics.
April 18, 1942.
Source: All figures are deposits with the Treasurer of the United States on account of proceeds
of sales of United States savings bonds.
Note: Figures have been rounded to nearest thousand and will not necessarily add to totals.
Regraded Unclassified
46
CONFIDENTI
UNITED STATES SAVINGS BONDS
Daily Sales - April 1942
On Basis of Issue Price
(In thousands of dollars)
Post Office
Bank Bond Sales
All Bond Sales
Date
Bond Sales
Series E
Series E
Series F
Series G
Total
Series I
Series 7
Series G
Total
April 1942
1
$ 2,476
$ 10,517
$ 2,380
$ 9,608
$ 22,504
$ 12,993
$ 2,380
$ 9,608
$ 24,980
2
2.999
8,264
2,119
7,570
17,953
11,263
2,119
7,570
20,953
3
3,222
7,572
1,185
6,235
14,992
10,794
1,185
6,235
18,214
4
2.778
9,292
1,387
5,334
16,013
12,070
1,387
5,334
18,790
6
4,961
13,035
2,329
8,027
23,391
17,996
2,329
8,027
28,352
7
2,958
5.722
834
8.983
15,539
8,680
834
8,983
18,497
8
2,309
9,610
1,142
6,562
17,314
11,919
1,142
6,562
19,623
9
2,906
9,304
955
5,715
15,974
12,210
955
5,715
18,880
10
2,730
8,052
1,573
5,261
14,885
10,782
1,573
5,261
17,615
11
2,150
5,224
668
2,720
8,613
7,374
668
2,720
10,762
13
4,619
17,572
2,432
8,604
28,609
22,192
2,432
8,604
33,228
14
2,513
6,152
1,076
3,333
10,561
8,665
1,076
3.333
13,074
15
2,584
5,102
1,251
5.374
11,728
7,686
1,251
5.374
14,312
16
3,472
10,008
1,400
7,773
19,180
13,480
1,400
7.773
22,652
17
2,690
8,076
850
3,695
12,621
10,766
850
3,695
15,311
Total
$ 45,367
$133,502
$ 21,582
$ 94,792
$249,876
$178,870
$ 21,582
$ 94,792
$295,244
Office of the Secretary of the Treasury, Division of Research and Statistics,
April 18, 1942.
Source: All figures are deposits with the Treasurer of the United States on account of proceeds of
sales of United States savings bonds.
Note: Figures have been rounded to nearest thousand and will not necessarily add to totals.
Regraded Unclassified
47
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE April 18, 1942,
TO
FROM
Mr. Hade
Secretary M Morgenthau
Subject: Conversation with Governor Ransom, of the Federal
Reserve Board, with regard to consumer credit
regulations.
Governor Ranson telephoned me and said they were now working
on plans to bring about 8 restriction in charge account credit.
He said they were considering plans for tightening the down
payments and shortening the terms, their over-all objective being
to bring about a decrease in consumer credit of about $4 billions
by the end of the year -- that would mean 8 decline from $9.5
billions of consumer credit as of December 31, 1941 to about
5.5 billions by December 31, 1942.
As one means of further restricting consumer credit, he
asked if the Treasury would consider a proposal to place a 10%
tax on all charge accounts, the tax to be billed separately to
the customer. He thought this would be a very strong deterrent
in the use of consumer credit. The tax, of course, would not be
a revenue measure but strictly a regulatory device. In fact the
less revenue it produced the more effective the tax would be in
restricting consumer credit. I have turned Governor Ransom's
memorandum concerning the tax over to Randolph Paul and he, no
doubt, will mention it to you after he has had an opportunity to
analyze the proposal.
Governor Black, of the Farm Credit Administration, has also
asked for the Treasury's views on a tex proposal, the purpose of
which 18 to retard inflation of farm land values such 8.8 followed
as 8 consequence of the last World War inflation.
Regraded Unclassified
CORRECTED COPY
48
PARAPHRASE OF TELEGRAM RECEIVED
FROM: American Embassy, Chungking, China
DATE: April 18, 1942, 10 a.m.
NO. 2 427
This is B. message which is strictly confidential, No. TF-28,
for Mr. Manuel A. Fox, in care of the Secretary of the Treasury, from
Mr. Adler.
1. The Minister of Finance sent the Board an official communication
on April 14, 1942 in which he asked for a reduction in the rate of exchange.
On April 16 the Board sent a memorandum to the Minister of Finance indicating
its agreement in principle to the suggested change but adding:
(a) The Board hoped that sales of saving certificates would in fact
be increased by the reduction:
(b) Holders of blocked funds may exploit the reduction unless
appropriate counter neasures are taken to prevent the holders of such funds
from moving them into saving certificates without China deriving any
adventage therefrom.
(c) More harm than good would result from any further reduction or
reductions of the rate in order to stimulate the sale of Government securi-
ties.
Dr. Kung assented verbally to the above and action will be taken by
the Board when assent in writing is received.
2. The new official rate, 8.0 intended by the Board, will be 5-1/16
cents in United States currency and 3-1/16 pence. At this rate the new
cross rate would be £1 equalling $4.029 in United States currency; and the
new selling rates would be 3 pence and 5 cents in American currency. It 1e
indicated by the Central Bank that the telegraphic expenses may not be
covered by this new sterling margin and the Central Bank has objected to
the sale of dollars for sterling below 3 pence since it fears an unfevorable
impression may result. The above official rates are preferred by the
Board with an understanding that if that is necessary the Board would
make up to the Central Bank any lossee in cable expenses as an alterna-
tive to the establishment of official rates of 3-1/16 pence and 5-3/32 cente
U. 8. currency which rates in connection with the selling rate of 5 cents
would involve a mergin of 1,84% on transactions in American dollars.
Regraded Unclassified
- 2 -
49
3. Concerning telegram TF-25, dated April 8, Section One, (5),
additional conformation of the destructions of its records has been
received by the Board from another of its employees who has just
reached here from Hong Kong. He also stated that before the fall of
Hong Kong a complete set of the minutes of the Board was hidden in a safe
place. The employee mentioned above stated in addition that he smuggled
out in the form of wrapping paper the balance sheet of the operations
of the Board up to December 6 which was completed on the 14th of December
by Frese.
4. Weekly reports will be sent to you and to Dr. White when air
mail communications are resumed.
GAUSS
eh: copy
4-21-42
Regraded Unclassified
50
C
0
P
Y
DM
Yunnanfu via Chungking & N.R.
This telegram must be
paraphrased before being
Dated April 18, 1942
communicated to anyone
other than a Governmental
Rec'd 8:01 a.m., 21st
agency. (BR)
Secretary of State,
Washington.
April 18, 10 a.m.
Figures for truck arrivels at Kunming over
Burma Road in March show traffic as a little below
normal for first half of month but a sharp decrease occurred
during second half. It is understood that the concentrated
use of trucks nearer border and the diversion of a quantity
of them for military purposes were factors in reduction of
cargo arrivals at this place.
PERKINS
RR
eh:copy
4-24-42
Regraded Unclassified
51
Treasury Department
Division of Monetary Research
Date May 4, 1942. 19
To:
Miss Chauncey
From:
H. D. White
The Secretary may or may not
be interested in glancing at this.
I had been keeping it thinking I
might report to him orally about
it, but it is getting too late.
52
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE April 18, 1942
TO
Mr. White
FROM
Mr. Hoflich
Subject: The British Budget, 1942-43
SUMMARY
Cable information has been received from Mr. Casaday on the 1942-
43 budget statement presented to the House of Commons on April 14 by
the Chancellor of the Exchequer. A summary of the cable is attached.
Following are the highlights:
1.
The Chancellor did not recommend any fundamental tax changes.
Higher luxury taxes are depended upon to raise additional revenue
and reduce consumption. The purchase tax 18 to be doubled, substan-
tially higher rates levied on alcoholic beverage and tobacco products,
and amusement taxes boosted.
A number of alterations were suggested in the income tax as
applied to wage earners, in order to meet popular criticism. The more
important recommendations are (a) minimum weekly pay left after deduo-
tion of tax to be raised from $7.50 to $8.00 for single men, and from
$11.50 to AB high 8.8 $20.00 for married men, depending on the number
of dependents; (b) married women's personal allowance for earned in-
come to be raised from $180 to $320 per year; (c) & simpler form for
returns; (d) income-tax payers to receive certificates showing credits
for post-war rebates, free from liability for tax arrears.
A slight concession was recommended in the excess profits tax,
to make the 20% post-war rebate a statutory liability of the State,
but not to be used for dividend payments or bonus shares.
2. 1942-43 expenditures are estimated at $21,144 million, revenue
at $9,608 million, leaving a budget deficit of $11,536 million. This
compares with $19,104 million actual expenditures, $8,296 million
revenue receipts and a budget deficit of $10,808 million for the 110-
cal year ending March 31, 1942.
These figures do not include the value of Lend-Lesse goods.
The Chancellor estimated that, including Lend-Lease, total resources
at British disposal in 1942-43 will exceed $26 billion, compared with
less than $22 billion in 1941-42 and $16 billion in 1940-41.
3. Press reaction to the budget statement was generally favorable.
The increased luxury taxes were accepted in good spirit. Some papers
thought the Chancellor had not gone far enough in concessions to
wage-earners, and disappointment was expressed in some quarters at
the failure to revise the excess profits tax.
Regraded Unclassified
53
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE April 17, 1942
TO
Mr. white
FROM
Mr. Hoflich
Subject: The British Budget, 1942-43
We have received from Mr. Casaday, by cable, a summary of the 1942-43
budget statement presented to the House of Commons on April 14 by the
Chancellor of the Exchequer, and the British press reaction thereto. The
following are the more significant points:
1. The new budget contained no basic tax innovations, but recommended
A number of rather significant adjustments. The outstanding feature is the
almost exclusive dependence on higher luxury taxes for increased revenue
and reduced consumption. The following tax changes were proposed:
n. In the income tax as applied to wage earners:
(1) Minimum weekly pay to be left after deduction of tax
to be raised from $7.50 for single men and $11.50 for
all married men, to $8.00 for single men, $12 for
married men with no children, $16 for those with one
child, and (20 for those with two or more children.
(2) Married women's personal allowance for earned income
to be raised from $180 to $320 per year.
(3) A simpler form to be provided for income tax returns,
and greater efforts made to educate taxpayers with
respect to tax provisions and the reasons for them.
(4) Certificates to be issued to income-tax payers,
giving tangible evidence of post-war rebates, the
rebate credits to be free from liability for tax
arrears.
(5) Deductions to be spread more evenly over the entire
year in seasonal industries, as by collecting the
tax on five months of higher earnings during the fol-
lowing seven lean months.
(6) No tax deductions from wages in July, 1942, to give
the inland révenue authorities time to assess weekly
wage earners without telescoping deductions into a
shorter period and making the weekly burden greater,
as happened last year. Thus, between August 1, 1942
and January 31, 1943 deductions will be made from
wages on the basis of earnings in the period January 1
to June 30, 1942.
Regraded Unclassified
54
Division of Monetary
- 2 -
Research
D. In the excess profits tax, a slight concession was recommended,
namely that the 20% post-war rebate be specifically confirmed
by act of Parliament as a statutory liability, but not to be used
for dividend payments or bonus shares.
n. In luxury taxes:
(1) Purchase tax on list of luxuries to be increased from
33 1/3% to 66 2/3%.
(2) Higher rates on liquor and tobacco products, which will
raise the price of (a) beer by about 3 1/2¢ a pint,
(b) whiskey by about 94# a bottle, (c) cigarettes by
about 10# per package of 20, (d) tobacco by about 10# an
ounce. It is proposed also to double the import duties
on wines.
(3) Increase in amusement taxes.
(4) "Utility" clothing and shoes, being produced in increasing
quantities under Government specification and price control,
to be exempt from the purchase tax.
2. 1942-43 budget totals compared with 1941-42 results (in millions),
1942-43
1941-42
Expenditures
21,144
19,104
!levenue
9,608
8,296
Budget deficit
$11,536
$10,808
The above figures do not include provision for Lend-Lease goods from
the United States. The Chancellor estimated that with lend-lease, "the
grand aggregate of the total resources at our disposal under all heads in
the coming financial year will probably exceed £6,500 million ($26,000
million), compared with a total of less than 54,000 million (816,000 mil-
lion) in 1940-41 and less than 65,500 million ($22,000 million) in 1941-42".
3. In his general survey of economic and financial conditions, the
Chancellor:
1. paid tribute to American and Canadian aid;
b. pointed out that Britain's financial problems elsewhere
make it necessary to safeguard exchange resources;
Regraded Unclassified
55
Division of Monetary
- 3 -
Research
C. called attention to the fact that the general price level has
remained steady for the past ten months, the index of food
prices having actually declined, and that wage rate increases
during the past year have averaged only six per cent.
d. reviewed steps taken during last year to prevent undue infla-
tion-(1) extension of rationing, (2) limitation of supplies,
(3) heavier taxation, (4) national savings movement, (5) price
control;
e. defended the Treasury from charges of imposing brakes on the
war effort.
4. Press reaction to the new budget was generally favorable, eight
of ten leading London newspapers viewing it as realistic, austere, and
sound.
There was no adverse criticism of the increased luxury taxes. Some
papers thought the Chancellor had not gone far enough in tax concessions to
wage earners. Considerable disappointment was expressed at the failure to
alter the excess profits tax.
Only two papers criticized the budget as a whole. The Daily Herald
criticized it as unrealistic, mediocre, mild and merciful, as it "still
leaves a great gulf between the well-to-do and the rest of the community".
The Financial News, which has been campaigning for lower excess profits tax
rates, claimed that the budget emphasized revenue first, avoidance of in-
flation second and encouragement of the war effort last, whereas the order
should be reversed.
(Cable no. 1908, Tondon, April 16, 1942)
Regraded Unclassified
56
BAS
PLAIN
London
Dated April 16, 1942
Reo'd 8:32 p.m.
Secretary of State,
Washington.
1908, sixteenth
FOR TREASURY FROM CASADAY
Embassy's telegram no. 1401, March 24, no. 1488,
March 27 and no. 1769, April 11.
1. The 1942-43 budget was presented in Commons
April 14 by Sir Kingsley Wood. Owing to the mass
of material dealt with only the principal features
of the budget and the press reaction thereto will
bE indicated in this telegram with detailed figures
and analysis and copies of the financial statement
and the two White Papers to bE forwarded by the
next air pouch.
The new budget contained no basic innovations
but did recommend a number of significant adjustments.
The outstanding feature of the new budget is that
the Chancellor is depending for increased revenue
and reduced consumption almost entirely on further
"swinging" increases in Existing EXCISE taxes on
luxuries.
Regraded Unclassified
57
-2- #1908, April sixtenth from London
luxuries. HE stated that the heavy additional
burdens and the widening of the area of direct
taxation imposed in last year's budget "are too
recent for me to contemplate further Exactions at
the moment. The weight of the last budget (as
regards direct taxation) is only now being borne
in its full severity". The Chanotllor EVEN went so
far as to make several concessions with respect to
direct taxation on wage earners in reply to the many
criticisms of the Existing tax which have been reported
from time to time.
2. Following the precedent of last year the
Chancellor devoted a considerable part of his speech
to a "General survey of the financial and Economic
front". His opening tribute to the lend-lease aid
of 6600,000,000 provided by the United States up to
March 31 and to Canada's proffer of $1,000,000,000
worth of supplies free of charge was enthusiastically
received by the House. The Chancellor indicated
that supplies from North America, which constituted
ONE of his chief preoccupations last year, are no
longer a financial problem but now depend principally
upon strategical requirements and transport facilities,
HE pointed out however that Britain's financial problems
in other
Regraded Unclassified
58
-3- #1908, April sixteenth from London
in other parts of the world have not been solved
and that it is still nEcEssary to safeguard EX-
change resources to meet needs not covered by
special forms of assistance.
Sir Kingsley next reviewed the various steps
taken during the past year to prevent undue inflation.
These included: the Extension of rationing to
clothing, soap and food, limitation of supplies,
heavier taxation, the "unremitting efforts of the
national savings movement" and perhaps most important
of all the control and stabilization of prices.
The general price level hE said has remained steady
for the past ten months, the index of food prices
having actually declined. Wage rate increases during
the past year have averaged only six per cent. Sir
Kingsley declared that although the present situation
does not justify any relaxation of vigilance it
indicates that "the whole Economic policy of the
Government has attained a considerable degree of
success".
Early in his speech the Chancellor referred to
the criticisms frequently leveled at the Treasury
in connection with the war effort and with a typically
Keynesian
Regraded Unclassified
59
-4- #1908, April sixteenth from London
Keynesian touch offered a general justification
of Treasury's war-time position. It is not the
function nor the intention of the Treasury hE said
to impose brakes or checks upon the war effort yet
it is responsible for seeing that waste and Extravagance
are Eliminated. The Treasury is always willing
to investigate any specific charges of this kind
but it is often accused at one and the same time
of laxness in allowing such conditions to Exist and
of interfering with the war effort when it undertakes
to investigate and Eliminate the practices complained
of. "It is my own belief", the ChanoEllor added
"that the Treasury walks this particular tight-rope
with a substantial measure of care and skill".
3. The specific taxation changes proposed
by the Chancellor include six modifications in the
income tax as applied to wage earners. These are:
(A). That the minimum weekly pay packet
after deduction of income tax bE raised from L1.17.6
for single men and L2.17.6. for married men (regard-
less of SiZE of family) to 62 for single men, L3
for married men with no children, 64 for married
with one child and 15 for morried men with two or
more childredn.
(B).
Regraded Unclassified
60
⑉5⑉ #1908, April sixteenth from London
(B). That the personal allowance for
married women's earnings bE raised from L45 to L80
for the war period.
(c). For seasonal Employments where the complaint
has been that during the thin-garning season deductions
from wages are made in respect of assessment on the
fat-garning period, the ingenious proposal is made
that the payment for five months of tax on the
better earnings shall bE spread over seven months
of lower earnings thus leveling out the deductions
over the two half year periods. This system is to
bE elastic other periods being chooseable where such
would spread the deductions most Evenly.
(D). In order to give the inland revenue
sufficient time to ASSESS weekly wage earners without
as last year telescoping deductions into shorter periods
and therefore making them a greater burden from
week to week, the deduction periods are to start
one month later beginning with the period due to
commence July 1 this year when deductions in respect
of the second holf year's tax for 1941-42 would take
place. These will begin instead on August 1 and
continue to the End of January 1943. No deductions
will therefore bE made in July 1942 which will bE a
tax deduction holiday for the worker.
(E).
Regraded Unclassified
61
-6- #1908, April sixteenth from London
(E). That greater efforts be made to Educate
the masses of new income tax payers with regard
to the provisions of the tax and the reasons therefor.
The Chancellor announced that new literature EX-
plaining the tax in "simple terms" (laughter)
was being prepared as WELL as a new and simpler
form for making income tax returns.
(F). That official certificates bE issued to
income tax payers giving tangible evidence of the
amount of post-war rebates promised and that the
post-war credit bE free from liability for tax arrears.
It would appear that without altering the
basic system these changes meet in considerable measure
all of the criticisms that have been advanced against
the income tax on wage earners EXCEPT that con-
cerning the incidence of the tax on overtime earnings
and the resulting alleged adverse Effect on "marginal"
effort. It is significant that the income tax in
relation to weekly wage earners was made the subject
of a special White Paper of sixteen clostly printed
pages analyzing the problem in detail, Explaining
the foregoing changes as well as the reasons for the
rejection of some of the more commonly urged schemes.
No change
Regraded Unclassified
62
-7- #1908, April sixteenth from London
No change was made in the EXCESS profits tax but
a slight concession was allowed in one direction
by the proposal that the post-war rebate bE
specifically confirmed by act of Parliament as a
statutory liability subject only to the conditions
that the tax has in fact been paid and that the
rebate is not to bE used for payment of dividends
or the issuing of bonus shares.
The only other change in direct taxation
was an alteration in the basis of assessment of
income tax on farming profits designed to bring the
small farmer into line with large farmers and other
businesses. This will only increase income tax
receipts by ₺3 million in the current year and
by 67 million in a full year.
In announcing his drastic increases in certain
customs and EXCISE duties and ENTERTAINMENTS tax the
Chancellor of the Exchequer stressed the advantages
of indirect tax increases from the revenue point
of view. They not only involve no delay in operation
as is the Case with direct taxation but call for
no new machinery or EXPENSES in collection. HE
chose customs and EXCISE duties which he said "have
for years
Regraded Unclassified
63
-8-#1908, April sixteenth from London.
for years stood up to any strain put upon them and
are at present proving very lucrative" and noted
furthermore that they are on products where the present
supply is not Equal to demand and where it would bE
Enitrely wrong to provide additional shipping space
or deflect labor to increase the supply. The Effects
of these changes will bE as follows: The British
public will pay another 2 pence per pint for beer,
another 4 shillings 8 pence per bottle for whisky (a
bottle of whisky will now cost 22 shillings 2 pence)
while the duties on wines are doubled; another 6 pEncE
for 20 cigarettes, another 6 pence an ounce for tobacco
(Except by members of the fighting services purchasing
tobacco and cigarettes in SERVICE canteens), they will
also pay more for their movie, theatre, football Etc.
tickets, while the purchase tax on wholesale prices
of a list of luxuries is to bE doubled from 33-1/3 to
66-2/3 percent. These articles include such items as
furs, silk articles, leather luggage, photographic and
musical articles, jewelry, toilet preparations, fancy
goods and works of art. The purchase tax increases on
luxuries will bring an added 510 million in the
present year which will bE however
offset
64
-9- #1908, April sixteenth from London
offect by the Exemption as from September of purchase
tax on utility cloth and clothing, boots and shoes
which are being produced in increasing quantities
under Government specification and priot control.
The changes in customs and EXCISE duties will
yield £160 million this year while the net result
of changes in direct taxation will bE a reduction
of 12 million, the change in farming profits adding
L3 million and the allowance for WIVES' earned
income reducing receipts by L5 million this year.
(in a full year added receipts from farmers' profits
will bE L7 million and the reduction resulting
from the increased allowance for wives' earned in-
come will bE 125 million while the net increase
in customs and EXCISE duties will bE L164 million).
The most lucrative items in the customs and EXCISE
list are tobnoco, including cigarettes, and beer
which together will bring in an added 130 million
this year.
4. The totals of the new budget follow:
Total Expenditure hE put at L5,286 million or L510
million over Expenditure in 1941-42. Since he is
treating the assistance from the Canadian Government
as a cash receipt the L225 million from that source
is not
Regraded Unclassified
65
-10- #1908, April sixteenth from London
is not deducted from the VOTE of credit figure of
L4,500 million, but the latter figure does not include
provision for lease-lend goods from the United States.
HE estimated that with lease-lend "the grand aggregate
of the total resources at our disposal under all
heads in the coming financial year will probably
EXCEED 66,500 million, compared with a total of
less that 4,000 million in 1940-41 and leas than
5,500 million in 1941-42.
Of the Exchuquer total of L5,286 million civil
supply SERVICES are placed at L444 million (ns
compared with L400 million last year) the fixed
debt charge at L325 million (1257 million lnst year)
and 617 million for contractual sinking funds; with
L4,500 million or an increase of ₺700 million over
the last year for votes of credit (including this
year non-lease-lend payments to United States and
substantial payments to Canada). For social
services 1234 million is included in the totals
ns well 08 a sum EXCEEDING last year's 125 million
for price stabilization subsidies and 132 million
for the higher pay to soldiers Etc. already
committed.
Examining the resources available to meet the
65,286 million
66
-11- #1908, April sixteenth from London
L5,286 million Expenditure hE considered that foreign
disinvestments including the growth in sterling
belonces of overseas countries together with the
Conadian Government's contribution would reduce
to L4,500 million the figure required from
domestic resources which compared with 63,800
million estimated in the new White Paper for the
calendar year 1941 and L2,600 million in 1940.
His proposed tax changes together with increasing
yields he estimated would raise revenue to L2,402
million (as compared with L2,074 million received
in 1941-42) leaving £2,100 million to bE derived
from extra-budgetary funds, company depreciation
and sinking funds and personal and insti tutional
savings which hE compared with about L2,000 million
as estimated in the new White Paper as nohieved in
the calendar year 1941,
5. As is customary in the budget speech before
dealing with this year's changes and Estimotes the
Chancellor of the Exchequer reviewed last year's
figures not only of the Exchequer returns but
also of the estimates contained in lest year's and
in the new White Papers. Since an analysis of these
figures
67
-12- #1908, April sixteenth from London
figures would have to bE long and involved if the
reader has not e. copy of the White Papers available,
full discussions of these statistics will bE dealt
with in a mailed memorandum. The Chanocllor of the
Exchequer's general conclusions may bE briefly
summarized as follows:
HE found that his forecasts of domestically
financed expenditure were "fairly close" that the
target for savings had been "substantially attained"
that there was an actual increase in Government
stocks of Essential goods and that hE could "say with
confidence that there had been no dangerous inroad
into private stocks although supplies of non-essential
goods no longer produced were naturally drying up."
As for his notual Exchequer returns revenue at
£2,074 million was 1288 million above estimates
while expenditure at I 4,776 million EXCEEDED the
Estimate (no revised in December by adding 1300
million for non-lense-lend payments to the United
States) by 1269 million . The year's budget deficit
was therefore £2,702 million as comparado with the
original estimate of last .pril of £2,421 million
with which the 6300 tillion added in DECEMBER for pay-
ments to the United States would have been 62,721
million.
6. Press
68
-13-41908, April sixteenth from London.
6. Press reaction to the nEw budget was
generally favorable, Eight our of ten leading London
newspapers viewing the budget as realistic, austere
and sound. On the whole there was no unfavorable
criticism of the nEw tax increases on beer, tobacco
Etc., typical comment being: "it is a small Enough
price to pay for victory" (NEWS CHRONICLE April 15).
"The increases are severe especially when regard is
had to the size of the imposts most of these commodit-
iES were already bearing but no one will contend that
they involve any real hardship or that the war Economy
will not benefit from reduced consumption" {DAILY
TELEGRAPH April 15).
With regard to the income tax prtss comment was
favorable on the increase in married women's allowances,
the raising of the minimum weekly wage after payment
of income tax and the proposed method of adjusting
taxation in the case of sensonal wage Earners. Some
papers however notably the MANCHESTER GUARDIAN and the
DAILY HERALD urged that the Chancellor of the Exchequer
had not gone far enough and Expressed the hope that
deduction of income tax on current earnings would be
considered at a later date.
The fact that the Chancellor of the Exchaquer die
Regraded Unclassified
69
-14- #1908, April sixteenth from London
not make any change in EXCESS profits tax is widely
regarded C.S the most disappointing feature of the
budget. The DAILY TELEGRAPH predicted that more
would bE hard of EXCESS profits tax before the
finance bill became E. law.
The removal of the purchase tax on utility
clothing WC.S regarded universally AS an EXCELLENT
proposal. The MANCHESTER GUARDIAN pointed out that
it WCS the only really unusual feature of the whole
budget.
Press comment on the alteration in the tax
assessment on sint.11 farmers was generally favorable.
THE DAILY HERALD and the FINANCIAL NEWS were the
two papers which criticized the budget. The former
criticised it C.S. unrealistic, mediocre, mild and
merciful because it "still leaves C. great gulf between
the WEll-to-do and the rest of the community." The
FINANCIAL NEWS which has continually stressed the
importance of the role of incentives in wer production
claimed that the budget emphasized revenue first,
avoidance of inflation second and encouragement of
the wer Effort Inst, wherens this order should bE
reversed.
M..TTHEWS
CSB
Regraded Unclassified
70
April 18, 1942
Mr. Livesey
Mr. D. W. Bell
Will you please send the following cable to the American
Embassy, London, England:
"From Treasury.
Reference No. 1468, April 8, midnight.
1. Procedure outlined in telegram No. 1468, April 8,
midnight, relative to checks drawn on Treasurer of United
States and the sale of U. S. currency is hereby extended to
the London branches of the Bankers Trust Company of New York
and the Central Hanover Bank & Trust Company of New York.
2. The London branches of the Bankers Trust Company
and the Central Hanover Bank & Trust Company are hereby
designated depositaries of public moneys of the United
States in order to carry out the procedure in telegram
No. 1468, April 8, midnight.
3. Please advise the London branches of the banks
designated and other Government officials appropriate parts
hereof."
EDB:m1b 4-17-42
Copy:bj:4-18-42
Regraded Unclassified
71
TELEGRAH SENT
PH
GR.Y
..pril 18, 1942
Noon
MERBASSY
LONDON (ENGLAND)
1645
FROM TREASURY
QUOTE. Your 1468, ..pril 8, midnight.
l. Procedure outlined in telegrom no. 1460,
April 8, m.dnight, relative to checks drewn on
Treasurer of United States and the sale of U. S.
currency is hereby extended to the London branches
of the Banke 3 Trust Company of Kew York and the
Central Henover Bank & Trust Company of NEW York.
2. The London branches of the Bankers Trust
Company and the Central Hanover Bank is Trust Company
are hereby designated depositarito of public moneys
of the United States in order to carry out the
procedure in t Elegram no. 1468, April 8, midnight.
3. Please advise the London branches of the
banks designated and other Government officials
appropriate parts hereof. END QUOTE.
WELLES
..CTING
FD:FL:11BcB
(FL)
Regraded Unclassified
In reply refer to
Apell 18, 1942
3D 390.1115/2866
My dear Mr. Secretary:
I have received your letter of Acril 11, 1942,
inquiring whether arrangements for th. mutual exchange
of American and Japanese officials have been completed
and whether Treasury officials in the Far Rest including
essrs. illian Taylor and alter Frese at Hong Kons,
are included in the list of American officials to be
excessiged.
Although negotiations have not yet been completed,
the a ;reement of the Japanese Government has been ob-
tained in principle and on a basis of reci rocity to
the exchunge of official personnel in Japan and Japanese-
occupied areas, with the exception of the Philippines.
The Juphaese Government has not a ;roed to the inclusion
in the exchange arran;ements of American officials XMX
other accidents in the Philippine Islands or other
American territory under the occupation of its armed
forces. It is expectav, however, that except for those
persons will ATE in the milippines, the Trensury erson-
nol in e.e.y territory in the enclo ure to your
letter of February 6, 1942, as 1,011 auf .r. Taylor and
r. Trade, will liet repatriated on the first Jananese
e versal, 5.1e date I Whose 511 rture has not
yet been determined.
Sincerely yours,
Wellee
cting Decretary
The to House blo
leary or ntatu, Jr.,
X the Trousury.
Regraded Unclassified
73
11 1942
By dear Mr. Secretary:
I have received unofficial information that
arrungements have been made for the exchange of
United States officials in the Par East. I shall
be glad if you would inform ae whether such an
exchange has been arranged and whether Treasury
officials in the Far East and Messrs. William
Taylor and Walter Frese in Hong Kong are included
in the list of American officials to be exchanged.
Sincerely yours,
(Signed) 8. Borgenthes. is.
Secretary of the Treasury
The Monorable
The Secretary of State
Cc- n.m.c,
Copies w Lompone
By Memenant 11:50 Seinmons
ISF/efe
4/10/42
Return to Sec'y office
Regraded Unclassified
74
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
Chauncey
DATE April 18, 1942
TO
Secretary Morgenthau
FOR
FROM Mr. Dietrich
CONFIDENTIAL
Registered sterling transactions of the reporting banks were as follows:
Sold to commercial concerns
£18,000
Purchased from commercial concerns
£11,000
Open market sterling held at 4.03-3/4, with no reported transactions.
The Canadian dollar discount narrowed to 12-5/8%, as against 12-13/16%
yesterday and 13-1/8% a week ago.
The Cuban peso improved slightly to an offered rate of 1/4% premium.
In New York, closing quotations for the foreign currencies listed below
were as follows:
Argentine peso (free)
.2370
Brazilian milreis (free) .0516
Colombian peso
.5775
Mexican peso
.2064
Uruguayan peso (free)
.5295
Venezuelan bolivar
.2860
There were no gold transactions consummated by us today.
No new gold engagements were reported.
A
75
TO THE SECRETARY
April 19, 1942.
In compliance with the request made to you by Mr. Richard
Jenkins of Arizona, we were able to arrange for the appearance
of Mr. Charles Laughton on Sunday evening, the 19th, in Tucson.
Ted R. Gamble
Regraded Unclassified
76
MOST SECRET
Copy No:
13
U.S. SECRET
19th April, 1942.
OPTEL No. 127
Information-receivedt up to seven A.M. 18th April, 1942.
1. NAVAL
MURMANSK Harbour was heavily bpmbed on the 15th. One British
Merchant ship is a total loss and another is aground badly damaged. Two
Platouns of Royal Marines were landed from two of H.M. Destroyers during night
15th/16th on the Greek island of KOUPHONESI south-east of CRETE and destroyed
the N/T station, the enemy retreated with casunlties, four Royal Marines were
slightly wounded. One medium sized British Merchant vessel was reported sunk
on the first off Cape HATTERAS, other attacks on shipping are reported from
south-west Pacific, Atlantic, Wcst Indies and off BEIRUT where 8: seven thousand
ton British Tanker and a small Free French Trawler were sunk.
2. MILITARY
BURMA. Irrewaddy Front. 15th/16th. Our forces were attacked
and withdrew to an area about seventeen miles south of YENANGYAUNG. The King's
Own Yorkshire Light Infantry successfully broke off thoir delaying action near
MYINGUN and have rejoined, they inflicted heavy casualties and suffered small loss
Pittang Front. Chinese forces at SWA have withdrawn to new
positions near PYINMANA.
3. AIR OPERATIONS
Western Front, 17th. A total of thirty Bostons and eight Hurri-
cano bombers with fighter escort attacked CHERBOURG docks,a power station and
ship yards at ROUEN, n. shell factory at MARQUISE and a parachute factory at CALAIS
At ROUEN direct hits were made un the power station, on four shipa (one of
three hundred feet) and on throe oil cisterns. At MARQUISE the main factory
building was hit. Fighter command despatched over six hundred and fifty
offensive sorties. Enemy casualties were three destroyed, two probably dest-
royed and four damaged. 110 lost three Spitfires (two pilots safe) and one
Boston.
German defensive patrols involved three hundred and thirty sorties
but their fightors seemed unwilling to become involved. Twolve Lancastors
were sent to attack E noval armament factory at AUGSBURG, four were shot down
by fighters en route and three by A.A. over the target. Proliminary reports
show that a damaging attack was dolivered end that thirty-two one thousand pound
bombs wore dropped from two hundred - four hundred feet. 17th/18th. 236 air-
craft despatched, HAMBURG 175. ST NAZAIRE 22. Aerodromes 20. Preliminary
reports state visibility at HAMBURG was good and may firos wore started. Nine
bombers are missing. One enemy aircraft was shot down over this country and
another over Franco.
MALTA. During fifty-four hours ending one P.M. 17th no bombs were
dropped.
4. HOME SECURITY
17th/18th. Some mild scattered bombing occured in southorn countier
thore were some service casualties at a supply depot nour Southampton.
Regraded Unclassified
77
Copy No.
13
BRITISH MOST SECRET
(U.S. SECRET)
OPTEL No. 128
Information received up to 7 A.M., 19th April, 1942,
1. NAVAL
16th. Dutch tanker torpedoed and sunk off TRINIDAD.
2, MILITARY
BURMA. IRRAWADDY FRONT. 16th/17th. The Japanese established 8. road
blook north and south of the PIN CHAUNG just north of YENANGYUANG, The results
of our attack on the morning of the 17th to clear this block are not yet known,
KARENNI FRONT. The Chinese report an unsuccessful attempt by 700
enemy to cross the HTU CHAUNG North of PASAWNG,
3. AIR OPERATIONS
WESTERN FRONT. 17th, Correction, We lost one Spitfire not three,
17th/18th. HAMBURG. 113 aircraft dropped about 74 tons of high
explosive (including twelve 4,000 pounders) and about 105 tons of incendiaries
(including nearly 500 250-pounders). No cloud, visibility good except for haze
but much searchlight glare and intense anti-aircraft, Many fires seen. 16 R.C.A.F.,
10 R.A.A.F. and 9 New Zealand aircraft participated without loss.
19th. 16 Squadrons of Spitfires swept over Northern FRANCE. Enemy
reaction slight, no losses either side,
MALTA. 18th. Between 0415 and moon about 110 bombers escerted by
fighters attacked. One bomber was destroyed and two others probably destroyed
by anti-aircraft. Damage was caused at HAL FAR, LUQA and GRAND HARBOUR, and
serious damage by bombs and fire to workshops at KALAFRANA where many aircraft
under repair were destroyed.
BURMA. 16th/17th. United States aircraft bombed the docks area
at RANGOON. Poor visibility prevented observation,
Regraded Unclassified
R
78
Y
T
E
L
E
G
1942 APR 20 AM 8 20
R
WUE26 30 DL
A
WASHINGTON DC APR 18 525P
P
H
HONORABLE HENRY MORGENTHAU JR
T
SECRETARY OF THE TREASURY
R
E
A
S
I AM PLEASED TO COMPLY WITH YOUR REQUEST TO PARTICIPATE IN
U
A RADIO BROADCAST WITH YOU IN YOUR OFFICE AT WASHINGTON ON
R
THURSDAY EVENING APRIL TWENTY THIRD STOP I ESTEEM IT A
T
PRIVILEGE AND PA PLEASURE TO DO so
E
L
WILLIAM GREEN PRESIDENT AMERICAN FEDERATION OF
E
LABOR.
R
P
H
Regraded Unclassified
E
79
L
E
G
WUWE9 40 NT
R
À
BUFFALO NY APR 19 1942
P
H
HENRY MORGENTHEAU
1942 APR 20 AM 7 48
T
SECRETARY OF TREASURY
R
E
A
RETEL SHALL BE VERY GLAD TO JOIN WITH YOU IN A BROADCAST FROM
S
U
YOUR OFFICE THURSDAY EVENING IN CONNECTION WITH SALE OF WAR
R
Y
SAVINGS BONDS PLEASE ADVISE AS TO TIME ALSO SEND ME AIR MAIL
T
COPY OF SCRIPT REFERRED TO
L
T C CASHEN.
E
745AM APR 20.
G
R
A
P
R
Regraded Unclassified
R
80
A
P
H
T
R
E
1942 APR 20 AM II 29
A
S
U
R
WU E44 20 DL
Y
MRPITTSBURGH PENN APR 20 1942 1007A
T
E
HENRY MORGENTHAU JR
L
E
TREAS
G
R
X
WILL BE PLEASED BROADCAST WITH YOU THURSDAY TWENTY THIRD
P
H
STOP WILL BE NEWYORK THURSDAY AND FRIDAY KINDLY ADVISE WHAT HOUR
T
WILLIAM P WITHEROW.
R
&
1129A.
S
Regraded Unclassified
R
81
Y
T
E
L
E
G
1942 APR 20 AM 7 50
R
A
WUWE 12 13
P
H
WASHINGTON DC APR 18 1124P 1942
HENRY MORGENTHAU
SECY OF TREASURY
T
R
I SHALL BE HAPPY TO SPEAK ON THURSDAY NIGHTS
E
A
DEFENSE BOND RADIO PROGRAM
CLAUDE WICKARD SECY OF AGRICULTURE.
U
R
749 (-AM APR 20.
YI
2:5 VA
T
R
A
Regraded Unclassified
Treasury Department
82
Division of Monetary Research
Date April 20, 1942
19
To:
Mr. Graves
From:
Mr. White
Mr. Philip Murray of the C.I.O. telephoned
me at 9:30 Monday morning. He said he tried
to get the Secretary, who was reported to be
out. He said he received a telegram from
Secretary Morgenthau, asking him to appear on
a radio program Thursday evening, but unfortunately,
he had a long-standing appointment for that
evening, to appear at a public event in
Philadelphia. He said he would be very happy
to participate at any other time. He asked
whether I would communicate that to the Secretary
and I replied that I would report it at once to
Mr. Graveswho was, I believe, in charge of the
program.
a
83
April 20, 1942
11:00 a.m.
DEFENSE SAVINGS BONDS
Present: Mr. Sloan
Mr. Gamble
Mr. Sparks
Mr. Graves
Mr. Callahan
Mr. Gaston
Mrs. Klotz
Mr. Kuhn
H.M.JR: Go ahead, Harold
MR. GRAVES: We have now completed the state and
county quotas for May, June, and July. I thought that
we perhaps should on Friday release the state quotas for
May, only the state quotas, and tell what the aggregate
of those quotas is. It is seven hundred million. And
then say that June and July quotas will be subsequently
announced. Our quotas fixed for June and July are eight
hundred twenty-five million, and a billion. The county
quotas We sent last week to our state administrators,
asking them to make any suggestions for revision that
might occur to them. We don't know too much about these
county quotas here. I think it would be unwise to
release them until our state people had had a chance to
release them.
H.M.JR: Before you go further, may I argue with
you a little bit?
MR. GRAVES: Yes, sir.
H.M.JR: I have come back Monday tired because I
have been doing nothing but thinking about this thing.
We all agree that we should hit & billion dollars, I
take it, of "E" Bonds by July.
Regraded Unclassified
84
- 2 -
MR. GRAVES: Not "E" Bonds, total.
H.M.JR: All right. One of the many handicaps
which I have to fight against now is the fact that our
sales rate is still running below March by eighteen or
nineteen percent, 80 I just wondered - and you see, I
have told them I wanted until the first of July to make
good. I had in mind - what will we do this month?
MR. GRAVES: I think we will do about three hundred
twenty million of "E" Bonds.
H.M.JR: I mean total.
MR. GRAVES: And the total, I think, will be five
hundred and twenty or SO.
H.M.JR: Well, I was thinking in terms of six,
eight, and a billion. I wanted to make it low enough so
we could hit it, you see. I would much rather hit it
and go over than to go under. It would be a tragedy if
we went under.
MR. GRAVES: You are referring to our suggested
seven hundred million in May?
H.M.JR: Yes, I had six. Let's say we do five
hundred. Twenty percent increase is a hundred million,
so that is six hundred million, isn't it? Then you
take twenty percent of that is another-hundred and twenty
million, is seven twenty. Well, at any rate, I was think-
ing of six, eight, anda billion. Now, if we go over - I
mean, here it is the twentieth of April and we have got
80 much to do. Supposing we did - went over - well, if
we did seven hundred, it would be wonderful. But if we
only did five fifty, everybody would be harping, you see,
that it is 8 failure.
MR. GRAVES: That is right.
H.M.JR: And we still haven't got the pay roll thing
working smoothly. Incidentally, I wish we could have
Regraded Unclassified
85
- 3 -
some one person so if I ever want to talk pay-roll
deduction I would send for Mr. Jones. Will you think
of that?
MR. GRAVES: Yes.
H.M.JR: Just some fellow. That is big enough for
just one fellow. Some one person would be pay roll Jones."
MR. GRAVES: All right.
H.M.JR: Because there are 50 many things. So I
shoot at Dan. Dan oughtn't to have anything to do with it.
Here you have got fifty-four thousand concerns, and there
is this whole question of licensing, as I call it, and so
forth and SO on. I think this thing is big enough that
there should be - isn't there some fellow like Ted Gamble
in the field who has made an outstanding success of hand-
ling that?
MR. GRAVES: The best man we have in my opinion is
the man I mentioned the other day, Mr. Seese in Chicago.
He has done better on pay-roll savings than - you remember
I tried at your suggestion to get him here, and found that
he was sick.
H.M.JR: What is the matter with him?
MR. GRAVES: I think he has worn himself out on this
job.
H.M.JR: Well, I don't want anybody that is worn out.
That is my privilege. Is he better than Keller?
MR. SPARKS: Well, he is the man that sold Keller on
the idea of putting the plan in and guided him in his
steps.
H.M.JR: Well, is Seese well enough to be here
tomorrow?
MR. SPARKS: I think SO. I think it was just a
temporary thing.
Regraded Unclassified
86
- 4 -
H.M.JR: Is he well enough to be here tomorrow?
MR. GRAVES: I think 50.
MR. SPARKS: I think so, Mr. Secretary.
MR. GRAVES: He would have come before, but I thought
he should not be asked to come.
H.M.JR: He could be here anyway to talk about that
Thursday meeting. You got my telegram on the Thursday
meeting, didn't you?
MR. GRAVES: I did, yes. I think that you have the
wrong impression of what that meeting is. It is eight
hundred people to be at that meeting, and they are not
people outside International Harvester. It. is just, as
I understand, people within that company.
H.M.JR: Well, my informant was George Buffington,
that there were eight hundred manufacturers.
MR. GAMBLE: What the International Harvester people
would have done if you had come out was to invite some
outside people, but the eight hundred are their own people.
When they learned you were not coming, they confined it
to their own company, and it has been suggested that a
similar meeting to what you suggested yourself be held in
the Illinois area, possibly ten days later.
H.M.JR: Well, gentlemen, I would rather lower my
sights for May for six hundred million, eight hundred,
and then a billion. What do you think?
MR. GRAVES: Six hundred, eight hundred, and a bil-
lion. I think that would be better. You see, when we
supposed we would announce the whole program much earlier -
we have now lost so much time I think it would be better
to drop that.
H.M.JR: We have lost ten days. What?
MR. GRAVES: We have lost more than ten days.
Regraded Unclassified
87
- 5 -
H.M.JR: Well, we were going to do it on the
thirteenth.
MR. GRAVES: Yes.
H.M.JR: We are doing it now on the twenty-third.
MR. GRAVES: Well, the quotas, you see, we will not
now be able to get them out until next Monday.
H.M.JR: I thought we never were going to do it
before the thirteenth. Anyway, what did we do while we
were losing time?
MR. GRAVES: I mean--
H.M.JR: We were having the most severe battle,
inter-departmental battle, that I have ever been in. I
haven't recovered from it yet. But what do you think,
gents?
MR. SPARKS: I think six, eight, and ten is B. better
arrangement.
H.M.JR: What do you think, Herbert?
MR. GASTON: Yes, I think SO, You say we don't
want to set a thing we can't reach. It is better to
go over it. It would be a very fine effect if we would
sell a billion in June on an eight hundred quota.
H.M.JR: Anybody object to six, eight, and ten?
MR. GRAVES: George Haas will be the only one that
will object.
H.M.JR: Why?
MR. GRAVES: He has got to do this job over again.
H.M.JR: Well, George doesn't mind that.
MR. GRAVES: Would you like to see what it looks
like?
Regraded Unclassified
88
- 6 -
H.M.JR: Well, what do you men think?
MR. GRAVES: I think you are right.
H.M.JR: Especially if you say we have lost time?
MR. GASTON: You will just have to take eighty
percent of each figure. That isn't hard.
H.M.JR: Well, Tickton and George had the privilege
of staying home Saturday and Sunday, and their crowd.
MR. GRAVES: Here are the average monthly sales
from last July through January.
H.M.JR: And this is what you are going to give
them?
MR. GRAVES: We will cut it down now.
H.M.JR: This is the average?
MR. GRAVES: Average monthly sales.
H.M.JR: And if you do that, it would be how much?
MR. GRAVES: That would be on a basis of seven
hundred million for May, eight twenty-five for June.
It would be a billion for July.
H.M.JR: Well, I would cut it to six, Harold.
Do you think so?
MRS. KLOTZ: I would, definitely.
H.M.JR: Don't you think so?
MR. GRAVES: Yes.
MR. SLOAN: Six, eight, and ten, yes.
H.M.JR: Six, eight, and a billion.
Regraded Unclassified
89
- 7 -
MR. GRAVES: Now, you will recall that we were
ready to send out earlier this month the General
Electric pamphiet with a letter for your signature which
was drafted by Mr. Odegard. I think we ought to go ahead
with that now.
H.M.JR: With just the GE pamphlet?
MR. GRAVES: That will be the first of a series.
We are getting fifty thousand copies of B. similar pam-
phlet from General Motors which we ought to have in a
couple of weeks, and we will do the same thing with that.
H.M.JR: Will you say this is the first of a series?
MR. GRAVES: That is what we do say. It is number
one of EL series of case histories.
H.M.JR: Would you mind putting it in the letter?
Just add on a p.s., "This is the first of a series."
MR. GRAVES: Yes, we do say that.
H.M.JR: But in the light of everything that has
happened, I would like to reread this letter. When do
you want a clearance on this?
MR. GRAVES: Well, I think we ought to get it out
as quickly as we can. I will leave that with you if you
like.
H.M.JR: When, tonight? I mean, I can read this
after supper. And then please, somebody, make a note for
Mr. Graves, I want a letter to go to every Senator and
every Congressman. "My dear - along this line. "My
dear Senator Barkley: I take pleasure in sending you
herewith enclosed a copy of 8. letter and e leaflet which
is going to each of fifty-four or fifty-five thousand
manufacturers who employ twenty million workers. After
reading the same, I would be glad to receive any suggestions
or criticisms from you. Yours sincerely," see? And that
will go to the Vice President, to all of these people who
Regraded Unclassified
90
- 8 -
have been fighting this like Henderson and Eccles, and
all the members of the Federal Reserve Board, the twelve
presidents of the Federal Reserve Board, each director
of the twelve banks of the Federal Reserve Board. I mean,
of the regional - they each have directors. And then
this list which Mrs. Klotz has or Miss Chauncey has, has
about twenty-five or thirty heads of independent agencies
in Washington. Each one of those should get that, you see.
Miss Chauncey knows which of those I sign. I think I
only sign those which go to the Cabinet. This would go to
the Cabinet, the heads of the thirty-five independent
agencies, every Senator and every Congressman, and the
whole Federal Reserve Board here and every director and
member of the twelve banks of the Federal Reserve Board,
you see.
And I think a little something in the letter should
read like this "I am counting on your cooperation to
assist ne in putting this plan over." That ought to go
out at this time.
MR. GRAVES: Very good.
H.M.JR: All right.
MR. GRAVES: Now, would you like Mr. Callahan to
tell you what we have tentatively decided upon as pub-
licity for this thing?
H.M.JR: We will keep talking until Ferdie comes
in with my talk as editor.
(Mr. Kuhn entered the conference.)
H.M.JR: We were just talking of the devil. Here
he comes - & nice devil. We will stop everything now for
you, Ferdie.
MR. KUHN: I talked to Mr. Weir. He had only two
minor suggestions.
H.M.JR: Will you give them to me? What was the
reaction?
Regraded Unclassified
91
- 9 -
MR. KUHN: Very good, except the two minor points.
H.M.JR: Let ne read a paragraph and stop, and
then we will get Mr. Weir's suggestion and anybody else's
in the room. Let me read the whole thing through once
to you until you get it. This is, so to speak, the
opening gun. You are all interested. This is for the
news reel at two thirty. "In a nation at war "spending
as usual" is as dangerous as "business as usual. We can't
have all we want for ourselves and at the same time give
our fighting men all they must have. Every one of us
is as deeply involved in this war as our soldiers at the
front and our sailors on the sea. It is time for us 88
individuals to make our own declaration of war against
the Nazis and the Japanese - now. We have got to think
war and act war in our personal everyday lives.
"There is no better way for civilians to get behind
the war effort than to cut down spending, to save materials,
to buy War Savings Bonds.'
MR. KUHN: Weir has one suggestion there. We would
like to make that," and most important of all, buy War
Savings Bonds. "I question whether we are entitled to say
that our show is more important than Mr. Nelson's.
MR. GASTON: It isn't SO,
H.M.JR: No. We crossed that in some other speech.
You remember, we kept watering it down. You remember,
Mrs. Klotz, it was some speech you were worried about. It
was the speech I made in Baltimore.
MR. KUHN: We have never said it was the most impor-
tant. We have said it was the easiest--
MR. GASTON: I think there is a very great danger
to morale in saying that, giving people the idea that by
buying three percent bonds they are doing all they need
to do.
H.M.JR: Right. "Nearly ten million Americans are
now buying War Bonds, but at a leisurely pace and in
modest amounts."
Regraded Unclassified
92
- 10 -
MR. KUHN: Now here is Mr. Weir's second suggestion.
He thinks it is bad psychology to emphasize the leisurely
pace and the modest amounts. He would prefer to say,
But with the war costing us a hundred million dollars 8
day, we have got to raise vastly greater amounts than
before, or we have got to subscribe at a much greater
pace than before.'
H.M.JR: I like that.
MR. GASTON: O.K.
MR. KUHN: It fits in well there, doesn't it?
MRS. KLOTZ: That is right.
H.M.JR: I like that. Get your figure right. I
think it is a hundred million.
MR. KUHN: I think it is an improvement.
H.M.JR: I think that is all right, Ferdie.
MR. KUHN: I think it is an improvement. I think
it is worth knowing that it is bad psychology to talk
about the leisurely investment.
H.M.JR: Are those the only two suggestions?
MR. KUHN: Yes.
H.M.JR: The one he wins on, and the other he doesn't.
Do you agree with that?
MRS. KLOTZ: Absolutely.
H.M.JR: "We have got to step up the sale of War
Bonds to a billion dollars every month. Every community
in this country will have to do its share to reach its
quota. Everyone who earns regular pay should set aside
an average of at least ten percent of it every week for
buying War Bonds. The most convenient way of doing this
Regraded Unclassified
93
- 11 -
is through the payroll savings plan, under which you
authorize your employer to set aside a part of your
earnings every payday.
"So let's stop needless spending and start to save
for victory. It's not only smart to be thrifty, but our
future depends upon it. Remember, what you save now
serves your country today and yourself tomorrow."
MR. KUHN: I asked him especially about the "smart
to be thrifty." He said he liked it. He said first of
all you wouldn't make it sound frivolous and flip.
Secondly, he said that phrase has become part of the
American language; and secondly, the last part of the
sentence, "our future depends on it," protects it com-
pletely from any suggestion of flippancy.
H.M.JR: Mr. Gaston thought it was kind of flippant
to say it is smart to be thrifty. I kind of lean toward
it. Starting with Harold, any suggestions?
MR. GRAVES: I was wondering whether that "average"
belongs in that sentence. "Everyone who earns regular pay
should set aside an average of et least ten percent."
I wonder if the "average" belongs in there. You could say,
Everyone should set aside at least ten percent."
MR. KUHN: We don't say that, Harold, because we
always recognize the fact that some people can't set
aside ten percent.
MR. GRAVES: But when you say, "Everyone should
set aside an average of at least ten percent," to me
that means that some weeks it would be eight and some
weeks twelve, but for every person it would average ten
percent. That is the meaning of your sentence as I get
it.
H.M.JR: I think that is what he does mean.
MR. KUHN: I mean all of us together who get regular
pay should set aside an average of at least ten percent.
Regraded Unclassified
94
- 12 -
MR. GRAVES: To change your word "everyone," and
say "All of us who earn regular pay should set aside
an average, that then, I think, does affect it; but
to say 'Everyone should set aside an average of at
least ten percent," I think it is different.
H.M.JR: I don't get it.
MR. GASTON: Yes.
MR. KUHN: Well, the point is you are not setting
an individual quota. We don't do that in this campaign.
What we talk about is an average of what employed persons
get in any factory. So if we were to say, "All of us who
are on regular pay should set aside an average of at least
ten percent,' I think that is more accurate.
H.M.JR: To say what?
MR. KUHN: "All of us."
(The Secretary held an unrecorded telephone conver-
sation with Mr. Bell)
H.M.JR: He says he thinks it will be 8 hundred
and twenty-five.
MR. KUHN: It is very high.
H.M.JR: You are impressed?
MR. KUHI: Yes.
H.M.JR: I was impressed when it was ninety. I.
tried this. People don't realize we are spending that
much.
MR. GASTON: You talk about a billion a month from
Savings Bonds. You might say three and three-quarters
billions a month is what we are spending.
H.M.JR: No, I like it on 8. per day basis. It hits
you between the eyes, a hundred and twenty-five million
dollars e day. If you are going to do it, I like to do
Regraded Unclassified
95
- 13 -
it on a per day basis. You made B. suggestion, Harold.
Anything else?
MR. GRAVES: Nothing else.
H.M.JR: Vince?
MR. CALLAHAN: I would like the word "should" taken
out, "Everyone who earns regular pay should,' and sub-
stitute, "owes it to his country," or something like that.
H. M.JR: Where is that?
MR. CALLAHAN: At the bottom of the same page. I
would like to put in the word "must," or "owes it to his
country," or "it is his duty to." To me it is a very
indifferent word.
H.M.JR: We use "must" there once, and I let it go
by. There is one "must" in there now. Where do we say
"must"? There is one place we say it.
MR. KUHN: "Every community must do its share."
That is all right. But when you get down to "everyone,"
or "all of us--"
H.M.JR: No, You say "Every community will have to
do its share." You don't think "should" is powerful
enough?
MR. CALLAHAN: I don't think "should" means anything.
H.M.JR: Well, if you say "must," then the fellows
will say, "What is the difference between that and having
forced savings?"
MR. CALLAHAN: That is what you want to tell them,
I think, that they must do it to win the war instead of
having forced saving.
H.M.JR: I don't think SO. It is pretty powerful, I
think, as it is. It is all right. Got anything else?
Regraded Unclassified
96
- 14 -
MR. CALLAHAN: No.
H.M.JR: I think I will leave that. Sloan?
MR. SLOAN: No, sir.
H.M.JR: Sparks?
MR. SPARKS: Mr. Secretary, my feeling is that
people who listen to the Secretary of the United States
Treasury forget about themselves and think about the
Secretary; and where we say in the first paragraph,
"Everyone of us is as deeply involved in the war as
our soldiers, II I am & little bit fearful that the
listener may be thinking of Cabinet Officers and such,
whereas if we said "everyone of you" or "you and you
and all of us must de it, and pin it right on the person
who is listening. That is the second sentence in the
first paragraph.
H.M.JR: Well, why am I not as deeply involved as
the man listening to me?
MR. SPARKS: You are as deeply involved, but my
point is that we want to make him feel that he is just
as deeply involved as the Secretary of the Treasury.
MR. KUHN: You would like to put it "Everyone in
this audience is as deeply involved in this war as the
soldiers and sailors"?
MR. SPARKS: That is right.
MR. GRAVES: I think that that is a good point.
MR. KUHN: I would be glad to change it to that.
H.M.JR: "Everyone in this audience"?
MR. KUHN: "Everyone in this audience."
MR. GRAVES: It personalizes it.
Regraded Unclassified
97
- 15 -
H.M.JR: That is all right. I am willing to take
that. "Everyone in this audience."
MR. SPARKS: That is all I have.
H.M.JR: I think it is good. I had something
earlier than that. I wanted to say, "You and I, and
you didn't want me to say that. But this doesn't talk
down to them.
MR. KUHN: No.
H.M.JR: I think it is all right. I think it is
good. Ted?
MR. GAMBLE: Mr. Secretary, I like the talk very much
with the exception of the closing paragraph. I don't
think it has enough force. It is the parting shot that
is the thing that they are likely to carry away with them,
and I don't think - I think it flattens out a little bit.
I don't think it gets across the thing that we are attach-
ing so much importance to, and that is, we are going to
start looking for ten percent of everybody's income right
now, and it is of vital concern. And then to start quoting
phrases, "It is smart to be thrifty," and so forth, I don't
think it has enough punch to it. And I am thinking of
theater audiences. I know what they get out of newsreels.
You have their full attention. You have made no gesture
to - such as a person would if they were addressing a
person, and it is shut off in a hurry, as you know, when
you see people speak in a newsreel.
MR. KUHN: Ted, would it meet your point if we were
to take that sentence about the declaration of war out
of the first paragraph and put it down to the end, and
say, "It is time for everyone of us to declare war against
the Axis now"?
MR. GAMBLE: Yes, it would.
MR. GRAVES: I think that would be very good.
MR. GAMBLE: I think we should leave the thought
with them in the closing line that they have got a job
Regraded Unclassified
98
- 16 -
to perform. This is not a casual talk by the Secretary
of the Treasury. There is 8. reason for it.
H.M.JR: Would that do it?
MR. GAMBLE: Yes, I think that would do it, and I
think you should have something to say in the closing
paragraph that gives you a chance to close your remarks.
MR. KUHN: I think this would help it.
H.M.JR: Just that one line, that "It is time for
us to make our own war now"?
MR. GAMBLE: Yes.
MR. GASTON: Wouldn't you lift that out and leave
this last paragraph as it is, but let that sentence
follow it?
MR. KUHN: That is what I thought.
MR. GAMBLE: That is it. Close with it.
H.M.JR: Well, instead of saying "It is time for us,"
let's say "It is time for you.
MR. GAMBLE: That is right.
H.M.JR: "It is time for you as individuals to make
your own declaration of war against the Nazis and the
Japanese." Then I can say, "Let's do it now."
MR. GAMBLE: That is right. And that is the kind
of talk you should make, and that is the kind of impres-
sion they should take away.
H.M.JR: "It is time for you as individuals to make
your own declaration of war against the Nazis and the
Japanese. Let's do it now."
MR. GAMBLE: That is it. If you will do it just
that way.
Regraded Unclassified
99
- 17 -
H.M.JR: I will do it. I think it is O.K.
Herbert?
MR. GASTON: I think that is good.
H.M.JR: How about you?
MRS. KLOTZ: It starts out with a punch, and ends
with one.
H.M.JR: Now, have it all on one page, please.
MR. KUHN: We don't want the big blown-up letters.
I don t think it is any good.
H.M.JR: As soon as it comes back, I will begin to
learn it.
MRS. KLOTZ: I still feel that you ought to read it.
MR. KUHN: Supposing you had a slanting thing on your
desk with the thing up like that. Then you would be able
to look at the audience.
MRS. KLOTZ: Yes, they do that.
H.M.JR: I wonder if I couldn't stand up instead of
siting down at the desk? Everybody sits down. How about
standing up?
MR. KUHN: With one of those reading things in front
of you? Ted, would that be all right?
MR. GAMBLE: Yes, if it is possible with their
equipment.
H.M.JR: I think, if you stood up--
MR. GAMBLE: If they have got proper angles, it
would be all right. Otherwise, they may not be able to
do it.
H.M.JR: The trouble with my glasses, if I --
Regraded Unclassified
100
- 18 -
MR. KUHN: I think if it is blown up, Mr. Secretary,
you look over the heads of the people in the audience.
You never look them right in the eye.
MRS. KLOTZ: That is right. And that is why sit-
ting puts you at the level.
H.M.JR: Do you like it blown up or not?
MRS. KLOTZ: Oh, I do, but I don't like the standing
up.
H.M.JR: How did you mean?
MRS. KLOTZ: Sit down and work it out so that you
can read this thing in front of you.
MR. KUHN: My feeling is that this business of
having letters on a wall is bad, because you are look-
ing over. their heads at some letters, and you are trying
to catch them.
H.M.JR: No, have it just below the lens of the
cameras. Let's try it once more.
MRS. KLOTZ: It is still better than looking up
and down. That is awful.
H.M.JR: Let's try it once more. The trouble
was, I didn't have these glasses. I have got these
Regraded Unclassified
101
- 19 -
glasses now; and if it is there, you see, I can see it.
MR. KUHN: I was thinking of something on the desk
which would hold the paper like that.
H.M.JR: That doesn't help. Let's have George
Haas do the letters once more. Let's try it. What?
MR. KUHN: O.K.
H.M.JR: And you see what they can do is to have
it in two pieces. They can do first one, and then
they can stop the camera, and then do the second half.
But with these glasses, I can see some distance. There
is all the difference in the world with these glasses.
I can see fifty feet with these. Let's have it done
both ways, but the reading copy should be done just as
quickly as possible so I can familiarize myself with it.
MR. KUHN: Do you want this part, "It is smart to
be thrifty," in or out?
H.M.JR: I like it in. Does it rub you the wrong
way?
MR. CALLAHAN: It had no effect on me at all.
MR. SPARKS: I am conscious of it, but I think it
is mainly because I come from New York. I think out-
side of New York no one has ever heard the phrase.
Regraded Unclassified
102
- 20 -
H.M.JR: You mean you are thinking of Macy's?
MR. SPARKS: Yes.
H.M.JR: Well, they have done pretty well on it.
MR. SPARKS: They have done very well on it. I
don't think that is an objection for 8. national usage
on it.
MR. GAMBLE: I don't mind it so long as we have
gotten the force of it in.
MR. KUHN: Would you mind if it were left out?
MR. GAMBLE: I don't think it is 8. bad reference,
the idea of thrift.
H.M.JR: I like it. I will use anything. I will
use "eventually, why not now, Pillsbury Flour, anything.
I think it is good. I think it is all right.
MR. KUHN: I will get this typed and come back.
H.M.JR: Ferdie, you are going to have it done
for me on the board so I can try to read it?
MR. KUHN: Yes, sir.
H.M.JR: Now, Mr. Callahan, you wanted to speak.
MR. CALLAHAN: I have got some suggestions here,
the first of which cover an intensive campaign for the
first week. It starts off on--
H.M.JR: Talk a little louder.
MR. CALLAHAN: I have & plan here covering an in-
tensive campaign for one week beginning Thursday night
with the broadcast with labor, management, the Secretary
of Agriculture. On the next morning, Friday, April 24,
Regraded Unclassified
103
- 21 -
we release quota figures of the country and of the individual
states. Simultaneously we furnish newspapers with a map
of the country with the quotas printed in each state.
The next thing that happens in the campaign is the
President's talk from the White House. That is next
Monday.
H.M.JR: Yes. You don't let anyBody - that is
supposed to be a secret, you know.
MR. CALLAHAN: I know that.
H.M.JR: Closely guarded. And what he has agreed to
do now, is to back us up if I go first.
MR. CALLAHAN: That is what we have in here. The
following Thursday or Friday, May 1, we are going to
release the quota figures of the various counties through-
out the country. Simultaneously with that we will re-
lease 8. map of each state containing the quota figures.
MR. GRAVES: For each county?
MR. CALLAHAN: For each county. In other words, we
will have the state of New York with all of the counties
and all of the quota figures in that. We feel that these
maps will be carried by most of the papers and we have
arranged a rush job 80 we will have these maps there in
time. They will be matted and plated. They will go not
only to the daily newspapers, but to the weekly newspapers.
On Thursday, April 30--
H.M.JR: Excuse me. Are you going to try to get that
into weekly papers through our county chairmen?
MR. CALLAHAN: No, sir, through the Western News-
paper Union. We can't do it through the county chairman.
There is too much of à time lag there. Western Newspaper
Unions have the facilities and the entree. On April 30,
Thursday, special broadcast over local radio stations
with state and county chairmen presiding and introducing
104
- 22 -
labor and management, duplicating the Washington meeting--
H.M.JR: When will that be?
MR. CALLAHAN: That will be Thursday, April 30.
:
H.M.JR: That is a week from this Saturday?
MR. CALLAHAN: Yes. What we will do, we will take
the Thursday tal k here, use that as an example, and
try it in as many cities 8.8 possible, getting the local
people to do the same thing. On Friday, May 1, we are
asking the Governors of the states and the mayors of
the cities to go on the radio and make talks. They
will be introduced by our state chairman and by our
county chairman. Also on May 1, we are sending out B.
series of transcribed one minute announcements in which we
have people in every walk of life talk about the campaign.
We have a bunch here, 8. baker, 8. motorman, and so forth
and so on. We expect to get about forty of them altogether,
so we will have the people talking to the people.
H.M.JR: Good.
MR. CALLAHAN: On the same day we are sending out
releases and other special material for future issues
for the newspapers. One feature of that is one and
two column boxes in which direct appeals are made to
the readers of the newspapers. Not publicity, but 8.
plea to buy bonds, buy them now, and tell them where
they can be purchased.
Also on the same day we are sending a special letter
and a copy of your Thursday night talk to all business
publications and house magazines. We may do that before
May 1. We are also asking newspapers sometime during the
month of May, or as soon as figures are available on the
quotas, that is, the amount of money they are raising,
to run thermometers or something similar to that to
Regraded Unclassified
105
- 23 -
show the progress of the campaign. On the same day,
May 1, we are going to try to round up a series of
statements from the Vice President and leading members
of the House and Senate to release from Washington to
the newspapers, their comments on the campaign.
H.M.JR: Incidentally, they had an Oregon state
meeting Sunday night at which McNary was present, and
it was reported to Kuhn and me that McNary was very
much in our corner and so is Justice Douglas. You
know, there is no reason - I don't know why a Justice
of the court shouldn't go on for us, on this thing.
Put down Justice Douglas.
MR. CALLAHAN: I have got him down. We thought
we would get ten or twelve.
H.M.JR: Put down Justice Douglas. He is in our
corner and he usually is with the crowd which has been
fighting us.
(The Secretary held an unrecorded telephone con-
versation with Under Secretary Bell.)
H.M.JR: Go ahead, please.
MR. CALLAHAN: We are back to the same day, Friday,
May 1, 8. broadcast on the blue network of radio correspondents
from different parts of the world. Now, these correspondents
talk about the soldiers who are fighting and how happy
they are to hear that this campaign has started and the
people are going to back up the soldiers with money.
MR. GASTON: Let some of them talk about how the
Japanese, in order to build up their material to fight
us with, live on a handful of rice and a small fish
once a week.
MR. CALLAHAN: It is a very good idea.
H.M.JR: Well, when you are through, I have got a
Regraded Unclassified
- 24 -
106
couple of suggestions.
MR. CALLAHAN: Now, we are asking newspapers through-
out the country, the daily newspapers, to run special
editorials and cartoons. We hope that we can send out
your Thursday night speech, if we can get it tomorrow,
to 8. selected list of newspapers for comment on the
following day. I don't know how practical that will be,
but we have done that before, and we have been very,
very successful in it. I think we did it about six
months ago and we got tremendous response, editorial re-
sponse. We are going to ask the Office of Facts and
Figures to turn over the program, "This is War," to us
on Saturday, May 2. We are asking them this morning.
I don't know whether we will get that or not. Sunday,
May 3, we would like to have a national broadcast with
representatives of the Catholic, Jewish and Protestant
faiths.
H.M.JR: We have got that set-up right here in
Washington, if you want it.
MR. CALLAHAN: Well, this is all subject to your
approval.
H.M.JR: Well, the reason that I suggested here in
Washington, you don't have to argue who is going to pick.
They have an inter-faith group with Bishop Freeman,
Rabbi Gerstenfeld, and some Protestant. They are all
here in Washington, and the Catholics, you see. They
have 8 forum of the air here in Washington, so my
suggestion is use that, and then you don't get down
to which Catholic and which Protestant and which Jew
and 80 on. It would save a lot of time, unless you
want to pick them.
MR. CALLAHAN: No, I want to get out of picking them.
H.M.JR: Well, then if you don't, there is 8 group
and if they say, "Well, why pick those?" "Well, they
are in Washington and four of them have been going on
the air together. So we picked those.' If you have
107
- 25 -
8 better suggestion O.K.
MR. CALLAHAN: I haven't.
H.M.JR: But there is that group right here and
they are all good talkers. Could I interrupt you a
minute? And I wish you would make B. note of this.
I would like to have, 8.5 an assistant to every county
chairman, 8 man who would contact the press locally,
because I know the difference between B. man in Duchess
county walking into the Poughkeepsie newspaper and
saying,"I would like to have you put this in the paper,"
than getting some from Washington. There is all the
difference in the world.
MR. CALLAHAN: I agree with you 8 hundred percent,
and that is what we are endeavoring to do now, Mr.
Secretary.
H.M.JR: I think we should have thirty-two hundred
volunteer people in the thirty-two hundred counties
whom you can send stuff to and tell them, "Now, would
you mind sending us the clippings from your county,"
and Graves is going to get 8. million dollars 8 month
to run this organization and he is going to have plenty
of money to do this thing. But I am very strong for a
man in each county who would go to the local papers,
you see. he would be responsible. And then make them
send the stuff in. There is all the difference in the
world.
Saturday night I made a little talk. There were
no copies of my speech. The local paper was there.
Nobody had given out any copies. I happened to have an
extra copy. I gave it to the fellow. He couldn't get
a copy of my speech. And then he ran it in full in the
Sunday paper. The New York Times got it somewhere, I
don't know where--
I say, what I am very strong for is to have in
every county 8 volunteer assistant to the chairman
108
- 26 -
who will contact the local press, because you can send
out all the press releases from Washington, but they
don't get in the same as if Mr. Jones, a prominent
citizen of the county, goes to the local paper. No
argument about that. Let me speak 8. minute, now.
Instead of your foreign correspondents, I want to get -
if you will let me know tomorrow. I have asked Mr.
Hopkins to go on as our guest star Thursday night. I
don't know whether he will or not. It will be the first
time in a year he has been on the air. If he doesn't,
I want Lt. O'Hare, the fellow who brought down six
Japs, and instead of correspondents we can get enough
people coming back now all the time. On these big
broadcasts we can get an aviator - not this stuff -
look how wonderful we were - this morning I heard on
the air that Bataan is the same as Valley Forge -
in other words, I want to put on the people who won,
like Lt. O'Hare, you see, who licked the enemy. Now,
there are enough of them around. We will know tomorrow.
I will know from Hopkins tomorrow. Then the other thing,
I don't know whether they are going to let us get away
with it, but I want to give you this. There is a Nether-
lander in this town and I am going to find out who it
is who saw the President and who is a Filipino citizen,
who escaped from Hong Kong, and he is the only man that
has come out of Hong Kong, and he is here in Washington
and he saw these atrocities. Now, if we could put this -
talk about getting to hate our enemies - if we could
get this fellow to go on the air and tell what he saw
in Hong Kong with his own eyes and say, "Any children
listening please get off the air because this is only
for grownups,' But I am throwing it out at you. The
O'hares, if we can get them to go on, I think it would
be great stuff. Don't you?
MR. CALLAHAN: So do I.
MR. KUHN: Van Mook is coming to Washington today
or tomorrow, and he was all through the Java business.
H.M.JR: Those are the kind of people. The fellow
who sold me on it is Lowell Thomas with his guest star.
Regraded Unclassified
109
- 27 -
You know how he does it.
MR. CALLAHAN: Yes. We ought to do that on a
transcription series.
H.M.JR: Right.
MR. CALLAHAN: Which is the only outlet we have for
material of that kind.
H.M.JR: Right, but I would get everyone of them.
In other words, I want to put on the fellows who licked
the enemy. They can get up and say, "I did so and 50 and
so and 30. But I got down six Japs." Now, we want the
audience to give us the bonds to keep the O'Hares flying,
not just keep the Air Corps, but the O'Hares. They have
got to have more planes and more bombs and they will have
to have them faster, and there are many O'hares. This is
just one, a typical American aviator, you see. Go ahead,
please.
MR. CALLAHAN: I want to put out--
H.M.JR: I want to press on you, a volunteer press con-
tact in every county.
MR. CALLAHAN: That is what I wanted to mention to you.
We do not send out releases as other Government Departments
do. If we have something which we think is news, we send
it to the press associations only, but we do not issue
general statements about anything to the general news-
paper list. We don't do it, because we find that it
doesn't get printed.
H.M.JR: Well, but supposing you had something that
wasn't - I mean, that was good a week from now as well as
today. You could send it to your county chairman. He
wouldn't care what day they printed it.
MR. CALLAHAN: The county chairman can get it into
the papers where we just can't.
Regraded Unclassified
110
- 28 -
H.M.JR: You and I agree.
MR. CALLAHAN: Absolutely.
H.M.JR: The rest of the stuff is 8 waste of paper.
MR. CALLAHAN: That is right.
H.M.JR: You are arguing on my side, I take it.
MR. CALLAHAN: I wanted to point out to you that we
did not issue releases. Now, in addition to these things
I have mentioned in the intensive campaign, we are send-
ing out regular material which we have been sending out
before and we are changing our radio programs to conform
with the War Bond Quota Campaign. We are also sending
to city, state, and county chairmen B. list of suggestions
8.S to how they can publicize the campaign in their own
areas. We probably will have fifty to sixty suggestions
about news stories, about radio. It is a long list. We
are setting down a campaign which they can follow.
H.M.JR: Well, at first blush, O.K., see. There are
two things which I have done which will keep this thing
fluid. One is - Graves, did you tell them about my editorial
board which will meet every morning at ten-thirty?
MR. GRAVES: I did.not.
H.M.JR: I am having an editorial board meeting every
morning at ten-thirty, and everything that has to do with
reaching the public would clear that board, you see. It
would go to Mr. Kuhn, too, you see. You would get it
cleared every day.
MR. CALLAHAN: Fine.
H.M.JR: And if I have any suggestions to make
that I want, I will tell the board and they will tell
it to you. They will pass on mine and then Kuhn will
keep in touch with Macleish to make sure that we are in
tune with MacLeish, you see, but I want my own editorial
Regraded Unclassified
111
- 29 -
board. Then the other thing, tomorrow the head of the
Advertising Council--
MR. KUHN: Miller McClintock,
H.M.JR:
is coming down and I want to put
them to work and my thought particularly - I mean, I
would tell them my whole problem, but I particularly
want to get them helping in the communities, each agency
in the communities, to get the factories going with
their publicity on the pay-roll deduction. The first
job I was thinking of giving them was that. There
is nothing in your stuff about pay-roll deduction.
So if Mr. McClintock will take the job, taking what
General Motors and General Electric have and these
fifty-four thousand which I hope will be seventy-five
thousand and getting this stuff over to the workers,
and working with the unions to sell the people on pay-
rolls, you see. There is nothing in your list on that.
Right?
MR. CALLAHAN: That is right.
H.M.JR: And especially as they have people in every
fairly large community. They can say, "Now, will you put
your whole group to work on 8 sales campaign to the
factory workers of America?" having them, you know, keep
in tune. But that is what I had in mind.
MR. KUHN: I believe that he corresponds, in & way,
to Harmon in the movie industry. he has been appointed
to be a contact man with the Government on any job of
this kind.
MR. SPARKS: He is being subsidized, Ferdie, by most
of your big business firms that have big advertising as
a civil policing agency to keep unethical practices down
to 8 minimum.
H.M.JR: What is that concern in New York?
MR. SPARKS: Better Business Bureau. The Better
Regraded Unclassified
112
- 30 -
Business Bureau does it pretty much through its member-
ship and gets down into local--
H.M.JR: That isn't the man--
MR. KUHN: That is not his entire job.
MR. SPARKS: No, that is one phase of it.
MR. KUHN: One of the things he does.
MR. CALLAHAN: This is a combination of the four
A's and the ANA, the Association of National Advertisers,
and this is the most responsible group of advertising
men in the country.
H.M.JR: Well, we will have him down and then this
is all right. But, you see, there is nothing in there
about movies.
MR. CALLAHAN: This is purely publicity, that is all.
This is publications and radio.
H.M.JR: Well, now, who does movies?
MR. CALLAHAN: Mr. Duffus.
H.M.JR: Well, has he got 8, campaign, Harold?
MR. GRAVES: Duffus is away, is he not, now? No,
we have not--
MR. GAMBLE: He has something, Mr. Graves.
MR. SPARKS: One thing he has in mind is going out-
unless he has changed while I was away, he had 8. group
that was going out to International Harvester to make
actual moving pictures in the plants out there.
H.M.JR: Well, Harold, put down on your thing,
if we can't get the moving picture industry in view
Regraded Unclassified
113
- 31 -
of this intensive drive, to send somebody down here to
be with us.
MR. GRAVES: Well, I am sure we can.
H.M.JR: I mean, somebody who will come down from
their war group, some fellow. I am not going to name
him. Let them pick somebody to see us through the next
month.
MR. KUHN: Mr. Secretary, Duffus has got three
newsreel crews going around the country doing the thing
by localities.
H.M.JR: And nobody has ever asked me to see one.
MR. KUHN: Oh, there are scores of them.
H.M.JR: I know, but I haven't yet been asked to
see one.
MR. CALLAHAN: Mr. Secretary, you were asked about
two months ago. Mr. Duffus told you about it and said
he had them available downstairs, and I think they are
down there now.
H.M.JR: Well, all I can say is, it is like the
pledge campaign. If you don't remind me a half dozen
times I don't see it. Anyway, Harold, let's get some-
body down here. I don't want to say Howard Dietz. Let
them pick somebody who will come down and help us from
the movie industry.
MR. GAMBLE: They are well organized to do it, too.
H.M.JR: The radio seems to be well under hand and
the newspapers. All right now? Harold, when are you
going to be ready to talk to me about this thing that
Odegard wrote out?
MR. GRAVES: Right now if you like.
Regraded Unclassified
114
- 32 -
H.M.JR: No. Are you ready?
MR. GRAVES: 1 think so. As I told you over the
phone--
H.M.JR: Well, would you be ready at eight-thirty
tonight?
MR. GRAVES: I expect we would.
H.M.JR: Or would you rather let it go until tomorrow
morning?
MR. GRAVES: Whatever you say.
MR. GAMBLE: We are ready any time, sir.
H.M.JR: I am not ready now, but I would be good
for an hour at eight-thirty. Unless that is crowding
you fellows too much.
MR. GAMBLE: I think it would be well for us to
submit it at the earliestpossible time so we can move
forward.
H.M.JR: Who would that be, Harold?'
MR. GRAVES: Well, I think Mr. Sparks, and Mr. Gamble,
and I, perhaps, would be adequate for that.
H.M.JR: All right. At eight-thirty at my house?
MR. GRAVES: Yes.
H.M.JR: Can you stand up at eight-thirty?
MR. GRAVES: Sure.
MR. KUHN: May I come along?
H.M.JR: Eight-thirty, one hour. Class is excused.
Regraded Unclassified
(actually (20/42) pored
DRAFT OF SECRETARY MORGENTHAU'S
115
TALK FOR THE NEWSREELS - APRIL 20, 1942
In a nation at war "spending as usual" is as dangerous
as "business as usual". C Everyone in this audience knows
that our enemies will stop at nothing to divide us and
destroy us.
Every one of us is as deeply involved in
this war as our soldiers at the front and our sailors
on the sea. It is time for us as individuals to make
our own declaration of war against the Nazis and the Japanese --
now. We have got to think war and act war in our personal
everyday lives.
baildoun standing to There is no sare better materials, way for civilians save to get money behind and
the war effort than by buy War Savings Bonds. Nearly
ten million Americans are now buying War Bonds, but at
a leisurely pace and in modest amounts. We have got
to step up the sale of War Bonds to 8. billion dollars
every month. Every state and every county will have to
Regraded Unclassified
-2-
116
reach its share of this quota. Everyone who earns
regular pay should set aside an average of at least ten
per cent of it every week or every month for buying
War Bonds. The most convenient way of doing this is
through the payroll savings plan, under which you authorize
your employer to set aside 8. part of your earnings every
payday.
So let's stop needless spending and start to save
for victory. (Let's decide now how much we can cut down
our spending of all kinds so that we can enlist our
savings in the war JIt's not only smart to be thrifty,
but our future depends upon it. Remember, what you save
now serves your country today and serves yourself tomorrow.
rul 4/20
In a nation at war "spending as usual" 18 as
117
dangerous as "business as usual." We can't have all we
want for ourselves and at the same time give our fighting
men all they must have. Every one in this audience 1s as
deeply involved in this war as our soldiers at the front
and our sailors on the sea. We have got to think war and
act war in our personal everyday lives.
There is no better way for civilians to get behind
the war effort than to cut down spending, to save materials,-
to buy War Savings Bonds. Nearly ten million Americans are
now buying War Bonds, but with the war costing us one
hundred and twenty million dollars every day, we have got
to save and buy Bonds on a vastly greater scale. We have
got to step up the sale of War Bonds to a billion dollars
every month. Every community in this country will have to
do its share to reach this quota. All of us who earn
regular pay should set aside an average of at least ten per
cent of it every week for buying War Bonds. The most
convenient way of doing this 18 through the payroll savings
plan, under which you authorize your employer to set aside
a part of your earnings every payday.
So let's stop needless spending and start to save for
victory. It's not only smart to be thrifty, but our future
depends upon it. Remember, what you save now serves your
country today and yourself tomorrow. It's time for us as
individuals to make our own declaration of war against the
Nazis and the Japanese. Let's do it now!
Regraded Unclassified
118
COPY OF TELEGRAM SENT TO STATE ADMINISTRATORS IN CONNECTION WITH
PAYROLL SAVINGS PIANS:
April 20, 1942.
The Secretary has requested that information be secured from
you relative to the following firms employing over 5,000 people
and which are not reported as having a payroll savings plan:
(list of firms here)
Also he has requested information on the following firms in
your State which have defense contracts and which are not reported
to have a payroll savings plan:
(list of firms here)
Please advise me direct as quickly as possible.
Ted R. Gamble
Assistant to Mr. Graves
( In response to
seeing memo to
m gamele dated
and filer 4/16/42
119
April 20, 1942
My dear Mr. President:
I an sending you herewith a
unique document. As far as I know,
this is the first time that a Committee
has ever reprinted an advertising cam-
paign in a Committee Hearing Report.
I an sure that you will be
interested in leafing through it.
Yours sincerely,
(Signed) H. Morgenthau, JR.
The President,
The White Rouse.
attacher committerHearing Report
n.m.c.
Secret Service 4:15
Regraded Unclassified
120
THE UNDER BECRETARY OF THE TREASURY
WASHINGTON
April 20, 1942
TO THE SECRETARY:
I received the following telephone report
this morning from Mr. Jones of the Federal Reserve
Bank of New York on the status of designating the
following companies as issuing agents to sell
United States War Savings securities:
United States Steel Corporation: The bank
officials appreciated that this would be a rather
difficult company to deal with, SO they asked one
of their directors, Leon Frazer, who is also a
director of United States Steel, to take the matter
up with the corporation. He reported today that
he was having some difficulty but is still working
hard on the matter. Re contemplates talking with
the Chairman of the Board either today or tomorrow
and will report again to the Federal Reserve Bank
after that conversation.
Bethlehem Steel Corporation: The main offices
of this company are apparently in Philadelphia and
Mr. Jones asked Mr. Donaldson of the Federal Reserve
Bank of Philadelphia to look into this corporation.
He said that he understood that the matter had been
passed by the company's Executive Board and we would
hear more about in in the next few days. He said
he understood there was also a question involved on
getting priority on the material needed to handle
the bonds.
New York Central Railway: Mr. Williamson,
the President, is also a director of the Federal
Reserve Bank of New York. He is giving it very
earnest consideration and hopes to have a decision
FORDEFENSE
in the next few days. Here again is involved the
question of equipment.
BUY
VISTES
SISINGS
*MONDS
When
Regraded Unclassified
121
- 2 -
Western Electric Company: This is a sub-
sidiary of A T & T and I believe the only subsidiary
that has not qualified as an issuing agent. It has
SO many offices throughout the country that they have
found some difficulty in working out a program. They
are interested in the subject and are trying to work
out a procedure whereby the bonds will be issued in
New York and Chicago for all of their offices. The
question of equipment is also involved here.
Great Atlantic and Pacific Tea Company: The
Federal has been working on this company for some time.
At first they were turned down cold. They had another
interview with them last week and they believe they
are now getting the company interested in the matter
as they have asked the Federal representative to come
back for another interview on Wednesday of this week.
They have a great many stores throughout the country
but there are very few employees in each store, so
they are trying to work out a scheme whereby the bonds
will be issued in say, four or five places rather than
in each city where they have stores.
Woolworth and J. C. Penney Companies: These
companies have not yet been contacted. The man that
the Federal wants to use on these contacts has been
in Albany for the past few days, but will be back
tomorrow morning. He will then take un these two
companies and we will get a report on it later this
week.
DWB
122
THE UNDER SECRETARY OF THE TREASURY
WASHINGTON
April 20, 1942
TO THE SECRETARY:
The following telephone report was received
this morning from Mr. Williams, President of the
Federal Reserve Bank of Philadelphia, on the status
of designating the following companies as issuing
agents to sell War Savings securities:
Bethlehem Steel Corporation: He is now
advised that this company will qualify as an issuing
agent and be ready by June 1. The delay is due to
working out a procedure for all of their offices
and the matter of equipment.
Pennsylvania Railroad: Mr. Williams has had
several conferences with Mr. Deasy, Vice President
in charge of Operations, and he has been rather
disappointed at the results. He says he did not
want to go at this time to the President as he is
a man of rather quick decisions and he did not want
him to say no, which is what he thought he might say
at this time. He expects to have another conference
with the Vice President in charge of Finance either
today or tomorrow to see what can be done about it.
He says the last conversation he had with representa-
tives of the company were more encouraging than the
previous ones, but they have not come through yet.
Dupont Company: The Executive Committee has
approved the company's designation as an issuing
agent. There has been a great deal of correspondence
between the company officials and the Federal Reserve
Bank of Philadelphia regarding the responsibility of
the company for losses, thefts, etc. He expects these
matters to be ironed out within the course of a. few
FORDEFENSE
days.
BUY
USUED
sivings
/
/
Regraded Unclassified
123
- 2 -
New York Shipbuilding Corporation: This
company has taken a very definite stand against
becoming an issuing agent. They say there is too
much paper work and they have not sufficient office
space to do this job. They say that they are working
as hard as they can on producing ships and they do
not think they should be required to do all this paper
work in addition. However, Mr. Williams is still
working on them with the hope of getting them to
change their views.
Reading Railroad: Mr. Hare, the Secretary-
Treasurer, with whom the conversations have been
held, has shown little interest in the matter.
Apparently he is following the progress of conversa-
tions between the Federal Reserve Bank and Pennsylvania
Railroad officials. Mr. Williams feels that if they
can get the Pennsylvania to qualify, the Reading will
follow suit.
Baldwin Locomotive: So far they have had no
success with this company. They claim they do not
have the space and they do not have the personnel to
handle the increase in the volume of work which would
result if they became issuing agents. Mr. Williams
is going to contact the President of this company
within a day or 80 to see if he will not take a
personal interest in the matter.
DwB
TREASURY DEPARTMENT
124
INTER OFFICE COMMUNICATION
DATE April 20, 1942
TO
Secretary of the Treasury
FROM Kr. Houghteling
Saturday afternoon I had a long and very satisfactory talk
with William Green, President of the American Federation of Labor,
about the War Savings Program.
(1) Mr. Green expressed himself as satisfied that a voluntary
program for the investment of 10% of all gross pay rolls was both
possible and reasonable. In some of the lower wage brackets and in
a few special cases, he believes that 10% cannot be reached, but in
general he saw no reason why a worker earning $35.00 a week should
not set aside $3.50 to buy War Bonds; those in the higher wage brackets
should be stepped up to 15%, 20% and even 25%, He stated that he
would like to work out a suggested schedule along these lines, for
transmission to members of his executive council and through them to
the entire membership of the A.F. of L.
(2) President Green said that he thought it was reasonable to
put at the disposal of the Treasury a great many of the organizers
employed by the national union of the A.F. of L. He stated that
the central body itself had 120 or more organizers who could cer-
tainly be made available to work for the Treasury on this campaign.
(3) Mr. Green stated that many national unions of the A.F. of L.
and a few of the larger local unions are very anxious to have the
$50,000 limit on the purchase of Series F and Series G Bonds materially
increased. He realizes that this is not a substitute for the purchase
of E Bonds by individual members, but states that he believes consider-
able additional money can be raised by the Treasury by increasing the
$50,000 limit.
(4) Mr. Green would be very glad to join in any program of broad-
casting in a follow-up of the official pronouncement which is to be
made on April 27.
(5) He was much pleased when I told him of Philip Murray's sug-
gestion that Green and Murray call on the Secretary of the Treasury
to discuss this matter and to present a joint front in favor of the
Secretary's program.
Mr. Oreen thoroughly approves of the Secretary's stand in
favor of voluntary action and understands the necessity of demonstrat-
ing before July 1 that we can reach a goal of $1,000,000,000 of bonds
per month. The only regret that he has is that the executive council
does not meet until the middle of May. He wishes to have a full die-
cussion of this matter with his council at that time.
Jhrongthy
125
MEMORANDUM FOR THE SECRETARY.
April 20, 1942.
Special Mail Report on "Ringing
Every Doorbell in the Country'
Of the 19 letters elicited by the Secretary's
proposal to ring every doorbell to stimulate sale of
war bonds, 10 express enthusiastic approval of the plan,
1 endorses it by suggesting a slogan, and 8 voice dis-
approval, usually for entirely personal reasons.
you
126
Favorable Comment
Lee Armstrong, San Antonio, Tex. Your future plan to
"ring every doorbell in the country once & month", is
8. highly commendable one. *** Apparently there is
something wrong with the present approach and it may
well be corrected in a very simple manner. Instead of
"Defense Bonds", a new issue calfed "Victory Bonds" may
be the answer.
W. K. Carr, Secretary-Manager, Chamber of Commerce,
Wagoner, Okla. Your idea to sell war bonds and stamps
door to door is excellent. It will work if properly
organized. # A courteous, well informed salesman
armed - if thought advisable - with war bonds and stamps,
could do a swell job of not only selling his wares but
also selling Uncle Sam and an "all out" for war conscious-
ness.
Harry J. Hartley, Syracuse, N. Y. Door to door with
War Bonds is & great idea. (Applies for job as salesman.)
D. G. O'Heron, Sales Manager, Los Angeles Furniture Co.,
Los Angeles, Calif. In one of your recent newspaper
articles you mentioned soliciting "house to house for
Government Defense Bonds. In my opinion, your idea hits
the nail right on the head. *** I firmly believe that
voluntary contribution would be of greater value to our
liberty loving people than compulsory measures.
Charles F. Dunville, Citizens Motor Company, Madisonville,
Ky. Wish to state that, being an automobile dealer, #
I feel that you have something that will really get results.
Yes, I am leading up to a plan whereby the present un-
employed automobile salesmen and dealers might be gainfully
employed and at same time make a contribution to the war
effort in the field at which they are best qualified.
UUnclassified
127
Unfavorable Comment
George K. Weeks, New York. I know as a matter of fact
through my efforts to expedite the sale of these bonds
that one of the principal adverse factors is the uncer-
tainty on the part of citizens as to approximately what
their tax liability in respect to this year's earnings
will be. # I am sure that important results cannot
be had from the door-to-door canvass planned by the
Secretary of the Treasury until the provisions of the
1942 tax law are known by our citizens generally.
Theodore H. Joseph, Electrical Engineer, New York. I
have made out applications yesterday for four $1,000
bonds. However, if I am to be pestered with monthly calls
from solicitors, I will not present these applications
now but will hold them back and make monthly subscriptions,
through the solicitors, unless the Treasury Department
will furnish the solicitors with lists of persons who have
already bought bonds and instruct them that these persons
are not to be solicited.
Regraded Unclassified
128
April 20, 1942
Dear Francis:
I wish to thank you for your letter of April 14 concerning
an employee of a naval aircraft factory who states that deductions
are being made from his pay for the purchase of War Savings Bonds
and that be is not receiving any receipts for these deductions and
has not as yet received his Bonds.
I should be very happy to have this matter investigated further
if you would care to give as the name of the factory in which this
gentleman is employed.
Certainly, we do not want anything of this kind to hamper the
program that - are working 80 hard to put over. I think you know
something of the fight which I have been putting up recently to
nake it possible for the people of our country to take part in the
financing problems of the var in a voluntary manner. I sincerely
believe that because of the voluntary aspects of the War Savings
Program, the morale of our people is strengthened. It is of utmost
importance that - do not have an occurrence of the kind of
situation which you have brought to Ky attention.
I deeply appreciate the interest which prompted you to call
this matter to my attention.
Sincerely,
(Signed) B, Morgenthan, nd
Honorable Francis Biddle
The Attorney General
Fils to Thompson
cc.n.m.c. cc.
By Messenger Bundy 5:10
129
April 14, 1942
PERSONAL
Dear Henry:
I an in receipt of a letter from a man I know,
who does not want his name used, to the following effect:
"The fact which occasions no to write this letter
is that I, employed at the Naval Aircraft Factory along with
some six thousand others, have for the past twelve weeks had
$3.75 deducted from our pays for the purpose of buying
Defense Bonds. is yet there have been no receipts in our
envelopes and no Bonds. Aside from this the management is
rotten in other respects and should be replaced."
I thought I should transmit this to you.
Sincerely yours,
Honorable Henry Morgenthan, Jr.
The Secretary of the Treasury
Washington, D. Co
Regraded Unclassified
130
APR 20 1942
aty dear Mr. Menters
Thank you very much for the suggestion contained in your
letter of April 13. The treasury is exploring all pessible
- of increasing voluntary saving at the present time, end
- are interested in any seund device for saking seving more
attractive.
However, at the present stage is our examination of the
question, - use several difficulties in Government particips-
tion in any plan which would link saving MW with the delivery
of particular emergers' durable goods in the post-mar period.
The Government is not & producer of - durable goods
and therefore could not guarantee the prices of such goode in
the post-mar period. Mareover, designs change and therefore it
would be difficult to say have much many saved now would be needed
to buy the article which the consumer would want to have several
years from now. Furtherners, tastes changes in the post-war
period the - say not - airplane and not an automobile.
Most people save, at least in part, as a sefeguard against
special needs, illness, death in the family, etc. Therefore, they
profer to have their savings convertible into money, which they
can use for any purpose they please. They de not want their noney
tied up for a durable article. It is consequently quite uncertain
that may individuals would prefer to buy durable goods certificates
rather than regular savings bonds.
It 10 eartainly true that individuals would be willing to do
1921 additional saving even if only in exchange for a priority right
to buy M entemobile (or any other durable article), without speci-
fying the particular article to be bought or the particular price to be
paid. Further, it is also true that the certificates for the purchase
of durable goods could be made convertible into eash, provided the
purchaser of the certificate wished to give up me priority right.
But if these refineemts are made, administrative défficulties arise
int administrative sosts increase. the would be justified in insurring
these essts only if it seemed libely that the sale of certificates
Regraded Unclassified
131
- 2 -
entitling consumers to priority rights to purchase durable goods
would result in a considerable not increase in individual saving.
These difficulties appear to - to be serious at the present
stage in our examination of your suggestion. It say be that they
can be surnounted by further thought and investigation.
You say be confident that we will continue to explore any
method which pay lead to an expansion in the voluntary saving
which is so greatly needed at this time.
Very truly yours,
(Wither) 22 one
Secretary of the Treasury.
Mr. Howard 0. Hunter,
Commissioner of Work Projects,
Federal Works Agency,
1734 New York Avenue, N.W.,
Washington, D. C.
Filst Thompson
R bota filonm.c.
00-ef 4/20/42
Regraded Unclassified
FEDERAL WORKS AGENCY
WORK PROJECTS ADMINISTRATION
1734 NEW YORK AVENUE NW.
WASHINGTON, D.C.
April 13, 1942
Honorable
Secretary of the Treasury
dear Mr. Secretary:
Here is an idea in connection with the overall problem
excess income.
After increased taxes, withdrawal taxes, forced savings,
tc. there will still be a substantial excess national income.
Why not encourage and promote the uge of this excess
Income to buy certain capital consumers goods such as automobiles,
redios, etc. for future delivery?
For instance, a consumer could pay in money and receive
certificates for purchase of an automobile after the war and
fter automobile production can get started again. This would
aiphon off that excess income now and, just 8.5 importent, provide
8. large backlog for immediate production after the war and for
1 mediate employment.
These purchases would be guaranteed by the government.
It would also be possible to have the government hold the money, to
be released to the particular automobile manufacturer after the war.
Insofar as automobiles go, the Germens have been selling
cars for a long time although they do not either make or deliver
cars. Cars are to be delivered after the war (they hope). In the
case of the Germans, of course the government takes the money and
spends it. In our case we would hold the money and distribute it
to private manufacturers after production can be started.
Incidentally, manufacturers could employ & certain
nmber of salesmen now to promote this plan and to secure counit-
nts from individuals, thereby helping with one of the most
arious employment dislocation problems we have at the moment.
Sincerely yours,
Regraded Unclassified
CONFIDENTIAL
UNITED STATES SAVINGS BONDS
Comparative Statement of Sales During
First Sixteen Business Days of April, March and February 1942
(April 1-18, March 1-19, February 1-19)
On Basis of Issue Price
(Amounts in thousands of dollars)
1
:
Amount of Increase
: Percentage of Increase
Sales
:
:
or Decrease (-)
:
or Decrease (-)
Item
:
:
:
:
April
I
March
: April
:
March
: April
:
March
: February
:
over
:
over
:
over
:
over
:
:
:
:
March
:
February
:
March
:
February
Series E I - Post Offices
$ 48,478
$ 55.342
$ 63,391
-$ 6,864
-$ $ 8,049
- 12.4%
- 12.7%
Series 1. Banks
140,678
160,158
234,408
- 19,480
- 74,250
- 12.2
- 31.7
Series E 1- Total
189,156
215,500
297,799
- 26,344
- 82,299
- 12.2
- 27.6
Series 1- Banks
22,530
26,146
36,565
- 3,616
- 10,419
- 13.8
- 28.5
Series G - Banks
98,095
120,491
187,638
- 22,396
- 67,147
- 18,6
- 35.8
Total
$309,780
$362,136
$522,003
-$ 52,356
-$159,867
- 14.5%
- 30.6%
Office of the Secretary of the Treasury, Division of Research and Statistics.
April 20, 1942.
Source: All figures are deposits with the Treasurer of the United States on account of proceeds
of sales of United States savings bonds.
Note: Figures have been rounded to nearest thousand and will not necessarily add to totals.
Regraded Unclassif
CONFIDEN
UNITED STATES SAVINGS BONDS
Daily Sales - April, 1942
On Basis of Issue Price
(In thousands of dollars)
Post Office
Bank Bond Sales
All Bond Sales
Date
Bond Sales
Series E
Series 3
Series 7
Series G
Total
Series X
Series 7
Series G
Total
April 1942
1
$ 2,476
$ 10,517
$ 2,380
$ 9,608
$ 22,504
$ 12,993
$ 2,380
$ 9,608
$ 24,980
2
2,999
5,264
2,119
7.570
17,953
11,263
2,119
7.570
20,953
3
3,222
7,572
1,185
6,235
14,992
10,794
1,185
6,235
18,214
4
2,778
9,292
1,387
5,334
16,013
12,070
1,387
5,334
18,790
6
4,961
13,035
2,329
8,027
23,391
17,996
2,329
8,027
28,352
7
2,958
5.722
834
8,983
15,539
8,680
834
8,983
18,497
8
2,309
9,610
1,142
6,562
17,314
11,919
1,142
6,562
19,623
9
2,906
9,304
955
5,715
15,974
12,210
955
5,715
18,880
10
2,730
8,052
1,573
5,261
14,885
10,782
1,573
5,261
17,615
11
2,150
5,224
66g
2,720
8,613
7.374
668
2,720
10,762
13
4,619
17,572
2,432
8,604
28,609
22,192
2,432
8,604
33,228
14
2,513
6,152
1,076
3,333
10,561
8,665
1,076
3,333
13,074
15
2,584
5,102
1,251
5,374
11,725
7,686
1,251
5,374
14,312
16
3,472
10,008
1,400
7,773
19,180
13,480
1,400
7.773
22,652
17
2,690
8,076
850
3,695
12,621
10,766
850
3,695
15,311
18
3,111
7,175
948
3,303
11,426
10,286
948
3,303
14,537
Total
$ 48,478
$140,678
$ 22,530
$ 98,095
$261,302
$189,156
$ 22,530
$ 98,095
$309,780
Office of the Secretary of the Treasury, Division of Research and Statistics.
April 20, 1942.
Source: All figures are deposits with the Treasurer of the United States on account of proceeds of
sales of United States savings bonds.
Note: Figures have been rounded to nearest thousand and will not necessarily add to totals.
Regraded Unclassif
135
CONFIDENTIAL
POSTAL SAVINGS STAMPS
Estimated Total Value and Number of Units Sold
by Denominations and by Months
May 1941 - March 1942
(All figures in thousands)
:
#
Number of Units by Denomination
:
:
Total
Month
:
:
1
#
:
:
:
Value
10$
:
25/
:
50$
:
$1.00
:
$5.00
Total
:
:
:
1941
9,567
$
3,349
May
2,444
5,170
1,169
673
111
June
1,557
5,595
855
457
60
8,524
2,738
July
1,739
7.859
1,111
571
51
11,331
3.520
August
2,617
9,946
1,198
751
55
14,567
4,372
September
4,120
12,347
1,318
687
69
18,542
5,192
October
4,664
14,526
1,516
787
68
21,563
5,985
vember
5,799
14,996
1,575
847
78
23,295
6,354
December
53,528
53,022
4,983
2,636
384
114,553
25,657
1942
January
110,440
85,992
7,158
3,653
279
207,522
41,169
100,023
82,749
6,504
3.327
262
192,865
38,580
February
March
100,253
85,440
6,742
3,786
287
196,507
39,976
Total
387,183
377.641
34,130
18,175
1,705
818,834
Total
Value
$38,718
$94,410
$17,065
$18,175
$8,524
$176,893
April 20, 1942.
Office of the Secretary of the Treasury,
Division of Research and Statistics.
Source: Division of Postal Savings, Post Office Department. Total dollar sales
for May through January are audited figures. Number of units by
denominations for these months, as estimated by the Post Office Depart-
ment, are prorated in this table to agree with audited dollar sales.
Dollar sales and number of units for February and March are reported by
central postal savings depository offices and those first class offices
ote:
Figures have been rounded to nearest thousand and will not necessarily
supplied directly by the Post Office Department.
add to totals. For the same reason, the sum of units times denominations
does not necessarily agree exactly with the total value.
Regraded Unclassified
FROM
136
Leon Henderson
To
HENRY MORGEN TAU
Personally
AND I REALLY MEAN
PERSONAL
4-20
FROM THE DESE OF
LEON HENDERSON, ADMINISTRATOR
Y2
OFFICE OF PRICE ADMIRISTRATION
AND CIVILIAN SUPPLY
136
Henry Norgenthan
for your own
special. private -
infidential secret
Informational see
Leon
DUPLICATE Y-20
FROM THE DESE OF
LEON HENDERSON, ADMINISTRATOR
42
OFFICE OF PRICE ADMINISTRATION
AND CIVILIAN SUPPLY
136
L-
Till further
notice- increase
my purchase
of wards to savings 10 10 of
meore
41
137
April 20, 1942
1:02 p.m.
HMJr:
Hello.
Operator:
They said Mr. Henderson has gone to lunch.
HMJr:
Well, I'll - leave word I'll call and I'll
call again.
Operator: Right.
HMJr:
Thank you.
April 20, 1942
2:23 p.m.
HMJr:
Hello.
Operator: Leon Henderson.
HMJr:
Hello.
Leon
Henderson: Hello, Henry.
HMJr:
Leon, I got your triple confidential note in
its fifteen envelopes.
H:
(Laughs) Yeah.
HMJr:
And I got quite a thrill out of it.
H:
Well, thought we ought to go along and where
you're going to be, we know we're back there
pitching.
HMJr:
Well, I'll
H:
I'll add to it.
HMJr:
What's that?
H:
I'll get - we'll think up ways that we can help
in our organization, too.
HMJr:
Well, you can help a lot, and we're stressing
Regraded Unclassified
138
- 2 -
the thing, that 18, about being smart to be
thrifty, but now I eay our future depends upon
it.
H:
Yeah.
HMJr:
And our whole thing is now going to stress
people have to save.
H:
Yeah.
HMJr:
And not to spend less, which is down your alley.
H:
Yeah. It will be helpful.
HMJr:
And you don't know - does your thing go when
the President speaks, is that the 1dea?
H:
I don't know. I haven't had the official word
yet.
HMJr:
I see.
H:
I hope SO.
HMJr:
Well
H:
And - because we're ready and sort of getting -
chewing the - chewing at our bit.
HMJr:
Were you serious about that you didn't want me
to show this to anybody?
H:
Oh, well, I mean
HMJr:
Was that humor?
H:
Well, I mean, I didn't want any publicity or
anything like that on it.
HMJr:
Oh, no.
H:
I didn't want it spread.
HMJr:
I get you. No, I won't. Well, anyway, I hope
to see you soon; and the sooner you get started,
the sooner it will help us.
Regraded Unclassified
139
- 3 -
H:
All right, Henry.
HMJr:
Thank you.
H:
Good-bye.
Regraded Unclassified
140
April 20, 1942
2:18 p.m.
HMJr:
Hello.
Operator:
Mrs. Rosenberg.
HMJr:
Hello.
Mrs. Anna
Rosenberg: Hello.
HMJr:
Good afternoon.
R:
How are you?
HMJr:
Fine.
R:
Are you calling me?
HMJr:
No, they said you called me Friday.
R:
Oh, I called you Friday, and when I couldn't
get you, I wrote you a letter. I don't know
if you've received it yet.
HMJr:
No.
R:
At Friday's meeting, the President read a
telegram from Ingersoll of the PM......
HMJr:
Oh, yes.
R:
.....about a plan of his. I don't know if
you know anything about the plan.
HMJr:
No, I don't.
R:
He had called the labor people together and
showed a plan to them for outdoor advertising.
In other words, his ideas about how to get the
1dea of - a more militant idea of the war across
to people.
HMJr:
Oh, yes.
R:
Phil Murray was terribly enthusiastic about it.
HMJr:
Yeah.
141
- 2 -
R:
And Green's man equally - Green didn't Bee it
himself.
HMJr:
Oh.
R:
They asked the President to see it, and the
President asked that I get in touch with you
to have you and Archie MacLeish see it.
HMJr:
Fine.
R:
Now, I got Archie MacLeish and told him, and
then I wrote to you and sent you a copy of the
telegram and asked you to take the - I'm sure
you will have to take the lead in it, because
Archie's a little bit slow about these things.
HMJr:
Well, when and how can I see it?
R:
All you have to do is get in touch with Ingersoll.
He's awaiting your call.
HMJr:
Well, that's
R:
He was notified that the President had turned
it over to you and to MacLeish.
HMJr:
Well, I'll call him today.
R:
I haven't the least 1dea if the plan 1s good,
bad, or indifferent.
HMJr:
Yeah. Well, we're starting our - well, you
eaw, I don't know whether you noticed - our
opening gun today.
R:
I did. I thought it was fine.
HMJr:
And then I've got this group of industry,
agriculture, and labor. We're going on 8
joint broadcast Thursday night.
R:
Yes.
HMJr:
The President's asked me to go ahead of him
on the thing.
R:
Yes.
Regraded Unclassified
142
- 3 -
HMJr:
He wants me to go first.
R:
Yes.
HMJr:
And - which I'm going to do - and 80 anything
on the publicity thing
R:
I don't know what this 1s. I - - from what the
labor people told the President, he has -
Ingersoll felt that the outdoor advertising
as a method of advertising has not been used.
HMJr:
Well, he's wrong. We've got, I think it's
either thirty or thirty-five thousand bill-
boards
R:
Yes.
HMJr:
with our sign on it now.
R:
oh, that's the Defense Bonds.
HMJr:
Yes.
R:
This is a general war effort.
HMJr:
I know, but I mean - oh, I thought he meant the
billboards hadn't been used.
R:
No, they all agreed that you have used them,
but generally, on the war effort, they haven't
been used. So I say, I haven't the least idea
if the plan 18 good or not.
HMJr:
Well, I'll call Ingersoll this afternoon.
R:
Fine. The President said that he felt that if
you and MacLeish saw it, and then told him what
you thought of it.
HMJr:
You know, MacLeish wrote us a letter, going on
record against the volunteer plan.
R:
He did?
HMJr:
Yeah.
R:
Good God!
Regraded Unclassified
143
- 4 -
HMJr:
But I had him over here for lunch.
R:
For a morale building, I'm a little bit
astonished.
HMJr:
Well, you
R:
I should imagine he would be the strongest
advocate.
HMJr:
Yeah. You watch us go to town now.
R:
Oh, I haven't the least doubt that you're going
to make it much more than if you had a com-
pulsory one.
HMJr:
Well, everybody seems to think so.
R:
I'm quite certain of it, and it's going to be
the one thing that people will feel is their
own - they can do.
HMJr:
Right. Well, if you get any more ideas, call
me.
R:
Fine. Now, this isn't mine, as I say. He just
asked - this was on Thursday, at the labor
meeting.
HMJr:
Righto.
R:
And 80 he asked me to get in touch with you.
HMJr:
Thank you.
R:
All right.
HMJr:
Good-bye.
R:
Good-bye.
Regraded Unclassified
144
April 20, 1942
2:28 p.m.
HMJr:
Henry Morgenthau, Jr.
Ralph
Ingersoll:
How are you?
HMJr:
Fine.
I:
This is Ralph Ingersoll.
HMJr:
Before I get to the purpose of my call, may I
tell you I think you're doing a wonderful job?
I:
Well, from you, that means a great deal, sir.
Thank you kindly.
HMJr:
In fact, I think along the lines of the war
effort, you're doing the best job in America.
I:
I'm terribly pleased with that. I wish we could
do twice as well.
HMJr:
Well, keep up what you're doing. Mr. Ingersoll,
I got a message from the President via Anna
Rosenberg
I:
Yes.
HMJr:
that you have a billboard plan.
I:
Yes.
HMJr:
I'd love to see it.
I:
I'd like to bring it down and show it to you.
HMJr:
Any time.
I:
Well, now, it requires getting together some
fellows, but it would only take you fifteen
minutes. I have to get some exhibits together.
HMJr:
All right. What day do you want to do 1t?
I:
Well, let me see. I'm "calendar looking at" here.
I have one or two things that I've got to - how
about tomorrow morning?
Regraded Unclassified
145
- 2 -
HMJr:
Oh, well, now wait a second.
I:
No fair, eh?
HMJr:
No, no. How early?
I:
Any time. Eleven o'clock?
HMJr:
No, I've got - it's - could you do it at ten?
I:
Ten o'clock.
HMJr:
Yes.
I:
Fine.
HMJr:
Ten o'clock in my office?
I:
Ten o'clock tomorrow morning in your office
we'll be there.
HMJr:
Well, now - well, all right. And then I'll
leave word that you'll come 80 they'll let
you in.
I:
Right.
HMJr:
All right. I'll be looking forward to it.
I:
We'll come to the Treasury and ask for your
office, and they'll expect me.
HMJr:
That's right.
I:
And I'll have a fellow with me with a big
bundle of papers. I showed this to Murray
and two or three others, but I think I can
just bring it down and show it to you direct.
I don't need them with me.
HMJr:
You show it to us, because with this volunteer
bond plan, why we're ready to go on anything.
I:
All right. I'll be there tomorrow morning at
ten o'clock.
HMJr:
Thank you.
I:
Right.
Regraded Unclassified
146
Regraded Unclass
Meeting in the Secretary's Office
Monday, April 20, 1942
3:00 P.M.
Present: The Secretary
Mr. Acheson
Mr. McCloy
Mr. MoCabe
Mr. Ecker
Mr. Moyes
Mr. White
Mr. Hicks
The meeting was called to discuss the results of negotiations
between the War Department and the Land-Lease Administration on the
question of taking over British supply contracts in the United States.
The Secretary recalled that he had been trying for a year to have
some of these contracts purchased, but that the agreement reached
between the Lend-Lease Administration and the War Department, as repre-
sented by Mr. McCloy's memorandum to Mr. McCabe of April 14, was not
very encouraging. The Secretary said that he would like to have a
letter from the War Department stating what it would do in such form
that he could take it to the President and get his O.K.
Mr. MoCabe said that he and Mr. McCloy had had another confer-
once since the date of the memorandum and had agreed upon the follow-
ing program:
(1) The War Department would take over non-aircraft British
contracts with ordnance funds amounting to over $100
million;
(2) The Land-Lease Administration would provide up to $100
million through more liberal eligibility interpretations
on British Lend-Lease requisitions; and
(3) The British and the Lend-Lease Administration would
share equally the costs of civilian pay for the con-
struction of American bases in the Sterling Area, thus
providing an additional $200 million that the British
would not have if all such civilian pay were to be taken
as reciprocal aid.
147
- 2 -
Mr. McCabe explained that this program would provide $400 willion for
the British, or as much as could be provided through the War Department's
purchase of British supply contracts.
Mr. McCloy explained that Mr. Lovett was still unwilling to use
air funds for the purchase of British contracts, and that the War
Department was still unwilling to purchase British supply contracts
without requesting additional funds from Congress, However, the Var
Department felt that if the program could be reduced to $100 willion
of ordnance contracts, there would be sufficient funds to finance the
project without going to Congress.
The Secretary said that he did not like indirect methods. He
said that it would be preferable to assume the English contracts and
openly request Congress for the funds. Be emphasized the difficulty of
the British dollar problem by informing the Mesting that the British
had recently been forced to agree to pay in dollars its monthly trade
balance of $5 million to a certain country in order to keep that coun-
try neutral.
Mr. McCloy said that he also felt direct methods were preferable,
but that he thought that it had been agreed that it would be politically
impossible to obtain the funds by requesting them from Congress.
The Secretary then raised the question of payment for planes
diverted from British dollar contracts, stating that Mr. Stimson's
recent letter on the subject was not entirely clear.
Mr. McCloy replied that the Army was willing to pay cash for
planes diverted before January 1, 1942, but that payment for those
diverted since that date would be made as 8 credit on Britain's Lend-
Lease account. Those diverted before January 1 were said to amount
to between $75 and $80 million.
Mr. White remarked that if the British should obtain $100 million
on planes, $100 million on ordnance, $100 million in additional Land-
Lease, and if the costs of civilian pay in the Sterling Area should be
shared equally, the British would have an ample dollar balance. If,
in addition to all of that, funds were to be requested from Congress
to take over a. large part of Britain's supply contracts, they would
have more dollars than they need,
The Secretary said that he was not willing to accept the Land-
Lease program, but that be would accept Mr. McCloy's offer to provide
$100 million on ordnance contracts and $100 million on planes diverted
from the British. He asked if he might have & firm decision by
tomorrow, and he asked whether it would be necessary for the War
Regraded Unclassified
148
- 3 -
Department to get the approval of the President. Mr. McCloy replied
that the President's approval would not be necessary if the Budget
Director and Mr. Stimson gave their approval. He said that he could
get a firm decision quickly, although not necessarily by tomorrow.
E. Hicks
Regraded Unclassified
149
April 20, 1942
3:52 p.m.
HMJr:
Hello.
Operator:
James Rowe.
HMJr:
Hello.
James
Rowe:
Jim Rowe, Mr. Secretary.
HMJr:
How do you do.
R:
I've just been talking to Elmer Irey, and
the Attorney General asked me to call you
because I know more about it than he does.
HMJr:
Yes.
R:
About Father Coughlin. We'd sort of like 8
pretty full out investigation on the income
tax and everything else.
HMJr:
Yeah.
R:
And Mr. Irey said of course he would, and
he'd cooperate one hundred per cent, but he
wanted - he asked if we'd call you, just to
let you know about it.
HMJr:
Well
R:
To see if you might have some ideas on it.
HMJr:
He might what?
R:
You might have some ideas on it.
HMJr:
Well, look, do you mind if I turn you over to
Herbert Gaston?
R:
Not a bit. I'll call him directly.
HMJr:
No, if you'll just hang on, see.
R:
All right, sir.
HMJr:
Just hang on, and I'll tell him - you could
Regraded Unclassified
150
- 2 -
listen, and then I'll tell him to talk to you.
Just a minute, please.
Operator:
Operator.
HMJr:
I want Mr. Gaston on this same wire, please.
Operator:
All right.
HMJr:
Keep Mr. Rowe on.
Operator:
Right. Just a moment.
HMJr:
Hello.
Herbert
Gaston:
Hello.
Operator:
Go ahead. There's Mr. Gaston.
HMJr:
Herbert.
G:
Yes.
HMJr:
Jim Rowe 1s on this wire, and he just called
me up about Father Coughlin and some help that
they want.
G:
Yes.
HMJr:
Of course, we'll give them all the help that
we can, but I'd like you to handle it for me.
G:
All right.
HMJr:
He's on the wire now, and he'll talk to you.
G:
Okay.
R:
Hello.
G:
Yeah, hello.
R:
Hello, Herb.
Regraded Unclassified
151
April 20, 1942
4:37 p.m.
HMJr:
Hello.
Operator:
Mr. Callahan.
HMJr:
Hello. Vince.
Vincent
Callshan:
Yes, sir.
HMJr:
I just had a thirty-five minute press con-
ference that started off with the newspaper
men giving me hell
C:
Yeah.
HMJr:
because your news release on Sunday never
reached our Treasury press room.
C:
Mr. Secretary, we called the Treasury press
room Saturday and we contacted the press
associations, and we got instructions from
them as to what to do with the story.
HMJr:
Well, now, listen. I tell you what I want you
to do.
C:
Yes, dr.
HMJr:
Who handles press for you?
C:
Mr. McCarty.
HMJr:
Well, will you and McCarty please come over
here now.
C:
All right, sir.
HMJr:
And get Chick, and the three of you go down to
the press room and have a little talk with the
boys, will you?
C:
All rightie.
HMJr:
Because they've been doing this for three
months, and they're all full of complaints;
and now's the time to get it out.
152
- 2 -
C:
All rightie.
HMJr:
And then they went back to the time we opened
the Treasury Glass House - they said they never
were invited there.
C:
Yeah.
HMJr:
And - it's worthwhile. I had to take it for
ten minutes.
C:
Uh huh.
HMJr:
So take - come on over with McCarty, see?
C:
All right.
HMJr:
Who - I don't think I've ever met him.
C:
A little short man.
HMJr:
I don't think I've ever met him.
C:
You met him once.
HMJr:
Well, you and he come over, and get Chick,
and the three of you go down and let them
get it off their chest.
C:
All rightie. Fine.
HMJr:
Because they say that any releases like that
should come to the Treasury press room. Work
it out.
C:
They're quite right
HMJr:
What?
C:
and that's what we tried to do Saturday,
but we - the story wasn't ready until one
o'clock and McCarty sat here in my office;
and to take care of that situation, we did
that.
HMJr:
Well, they left here sore, and, oh, they've
got all kinds of complaints; and I think if
Regraded Unclassified
153
- 3 -
the three of you walk down there, it will do
a lot of good.
C:
Be very happy to.
HMJr:
Thank you.
C:
Thank you.
HMJr:
Please do it right away.
C:
All right. Right away. Good-bye.
1
154
April 20, 1942
5:00 p.m.
HMJr:
Hello.
Keith
Kane:
Yes, Mr. Secretary.
HMJr:
Mr. Kane. This 1s Henry Morgenthau, Jr.
K:
Yes, Mr. Secretary.
HMJr:
Dr. Likert 1s here in my office now, and I'm
asking him and you whether we could get some
help on making some tests in the community
on why people do or don't buy our bonde.
K:
Yes, sir. Well, we'll be very glad to, of
course.
HMJr:
Will you give us some help on that?
K:
We'll be very glad to, right away.
HMJr:
Can you turn Dr. Likert loose on this?
K:
That is right, sir. The first step would be -
if it meets with your approval - would be to
arrange a conference with those in your depart-
ment most familiar with the problem - two or
three, perhaps, selected - and we can go right
to work on it.
HMJr:
Fine. Well, Ferdinand Kuhn 1s sitting here
now with Dr. Likert.
K:
Fine.
HMJr:
And the man - when he comes down Wednesday -
would be Peter Odegard.
K:
Oh, yes.
HMJr:
And you could all get together.
K:
Well, we can probably make a little progress
even before Wednesday.
HMJr:
But even if you could get this thing started -
just sort of preliminary - I told Dr. Likert
Regraded Unclassified
155
- 2 -
what I'd like to have, if you people would
let him go to it.
K:
Fine. Well, we'd be very glad to, sir.
HMJr:
And if you want any money from us, let us
know.
K:
Very good, Mr. Secretary.
HMJr:
Thank you.
K:
Thank you, sir.
00 - Mr. Graves
Mr. D. Bell
156
April 20, 1942
5:02 p.m.
HMJr:
Hello.
Operator:
Go ahead.
Abbott
Mills:
Mr. Secretary, this is Abbott Mills speaking.
HMJr:
Go ahead.
M:
You'll be glad to know that we've had our
conference with the Automobile Industry and
with the Army representative and the represen-
tative of the Comptroller General
HMJr:
Yeah.
M:
and everything points to the fact that
we can work out a good plan that will be
acceptable to the Army and the Comptroller
General and the Industry.
HMJr:
Wonderful. When?
M:
And what they are doing, they will draft a
plan and Colonel McEkronhas already submitted
it verbally to the Army and the Comptroller
General will submit his representatives to
Mr. McFarland on Wednesday.
HMJr:
Yeah.
M:
And with that accepted, it looks as though
the automobile companies would become issuing
agents. I have no promises, but there is a
good deal of encouragement.
HMJr:
Well, that sounds good. Now you think that
may be cleared up by when?
M:
Well, they will present the draft of the plan
on Wednesday.
HMJr:
Yes.
M:
Then how long it would take to out that draft
Regraded Unclassified
157
- 2 -
in final form and through their Legal
Department, they can't promise; but they're
just as anxious as you are to get it through,
and they see the importance of it.
HMJr:
Now, what are you going to do the next day or
two?
M:
I was going to take a train at 5:50 and come
back to Washington.
HMJr:
Okay. All right.
M:
And I'd like very much to see you when I get
back and tell you more about it.
HMJr:
I want to see you.
M:
All right, sir.
HMJr:
Thank you.
M:
You bet.
HMJr:
Good-bye.
Regraded Unclassified
158
April 20, 1942
5:14 p.m.
Robert
Patterson: This is Bob.
HMJr4
Henry talking.
P:
I looked into the Baltimore situation.
HMJr:
Yeah.
P:
It's reported good.
HMJr:
Good, 1s it?
P:
Yes. They had twenty-five hundred cars
HMJr:
Yeah.
P:
but they say they can take four thousand,
without danger of congestion.
HMJr:
I see.
P:
There are eight ships there now loading, and
seven expected.
HMJr:
Good.
P:
More - seven more expected.
HMJr:
Good.
P:
But he says that the port can handle much more
cargo, and still remain liquid.
HMJr:
I see. Well, until I get some more complaints
P:
All right.
HMJr:
I - we'll let her ride.
di
Right.
HMJr:
I see they reported the bill out on the Hill.
P:
Yes.
Regraded Unclassified
159
- 2 -
HMJr:
Is that all right?
P:
They say 80.
HMJr:
What?
P:
Yes, they say it 1s. I haven't read the text
of it, but my men are not excited.
HMJr:
Okay.
P:
It's all right.
HMJr:
Thank you.
P:
Thank you, Henry.
HMJr:
Thank you.
P:
. Good-bye.
160
THE UNDER SECRETARY OF WAR
WASHINGTON
April 20th, 1942.
Dear Henry:
I have inquired into the cargo
situation at the port of Baltimore. I am
told that there are eight ships there now
loading with seven more expected in the near
future. There were 2500 freight cars in port
on April 16th. The port can take 4000 or more
cars without congestion.
I am told that there is no conges-
tion at the present time and that loading con-
ditions are favorable.
Sincerely yours,
RLP.P.P.t
Honorable Henry Morgenthau,Jr.,
Department of the Treasury,
Washington, D. C.
161
April 20, 1942
Dear Dont
I an enclosing herewith last week's report
on the movement of bottom cargo from the various plants
to the ports of Philadelphia, Baltimore and New York.
You will notice that 43,000 tons was the
amount required and that 54,631 tons were delivered.
This is by far the best week we have had to date and
I want to thank you for the splendid cooperation which
you have given Mr. Clifton Mack of the Treasury Pro-
curement in making this possible.
Yours sincerely,
(Stgnes) Heavy
non. Donald Nelson,
Mar Production Board,
Washington, D. C.
Copies to:
Mr. Hopkins
Mr. McCabe
"[= thalas sent to m mack
but was not indicated
on etc to m belson.
Regraded Unclassified
162
Bottom cargo for Russlans sent from mill to port
(In tons)
STRICTLY CONFIDENTIAL
:
Philadelphia
:
:
Baltimore
:
New York
:
Total
Record of actual tonnage sent
from mill to port:
Sunday
April 12
1,576
684
500
2,760
Monday
April 13
2,268
2,148
3,356
7,772
Tuesday
April 14
4,205
2,573
1,919
8,697
Wednesday April 15
2,949
2,638
2,377
7,964
Thursday
April 16
3,339
2,416
3,228
8,983
Friday
April 17
2,245
1,922
7,847
12,014
Saturday April 18
2,220
1,168
3,053
6,441
Total actual shipments,
April 12 - April 18
18,802
13,549
22,280
54,631
Amount required to be sent from
mill to port for the week April 12
to April 18
18,000
6,000
19,000
43,000
Office of the Becretary of the Treasury,
Division of Research and Statistics.
April 20, 1942
Source: Procurement Division, Treasury Department.
Regraded Unc assified
STRIGTLY
CONFIDENTIAL
Bottom cargo for Ruesians sent from mille to Philadelphia,
total April 5 to 11 and daily April 12 to 18, 1942
Tonnage
Name of company and
Total
--
:
:
:
:
commodity
April 5
Sunday
:
Monday
Tuesday
:
Wednesday
:
Thursday:
to
Friday
Saturday
April 12:
April 13
April 14:
April 15
April 16:
April 11:
April 17
April 18
:
:
:
:
Brass
American Brose Co
513
75
39
92
Chane Brees & Copper Co
131
58
28
Devere Copper & Brass do
176
58
36
35
43
Scovill Manufacturing Co
43
97
39
wyllingford Steel Co
16
Cooper
American Prone Do
19
Anaconde Wire & Cable Co
24
Nickel
International Nickel Co
200
Steel
Alsa Wood Steel Co
152
405
365
115
Allegheny Ludlum Steel Co
440
144
94
154
17
incrican Rolling Mille
264
Armoo International Co
1,762
300
213
143
620
562
453
Pathlohem Steel Co
2,331
128
103
103
217
309
352
145
Brainerd Steel Co
50
Cargenter Steel Co
5
Cold Tetal Products Do
50
66
42
45
36
Collyer Insulated Wire Do
15
Crucible Steel Co
27
Elliott Bros
65
$
Brast Lakes Steel Corp
1,420
37
Creer Steel Co
64
Inland Steel Co
547
55
Jessop Steel Co
3
Johnson Strel & Wire Co
24
Jones & Laughlin Steel Corp.
837
41
58
310
53
334
Keyetone Steel & Tire Co
330
109
93
Medison Tire Co
81
34
31
34
VaLouth Steel Co
622
135
52
76
44
29
28
National Standard Co
50
National Tube Co
185
yes England High Carbon Wire Co
9
Newport Rolling Mills
90
85
119
Otie Steel Co
772
99
102
52
215
111
37
PA M Co
255
Pitteburgh Steel do
457
Republic Steel Corp:
3,838
1,074
254
1,258
862
126
189
38
Benece Steel Co
30
46
38
Sheron Steel Co
37
62
Superior Steel Co
217
25
Thomas Steel Co.
234
60
Thoopson Steel & Wire Co
200
98
38
75
36
Union Drawn Steel do
460
136
U. 5. Steel Emort Oo
309
269
1,122
701
955
154
929
Universal Cyclope Co
9
Vulcan Crucible do
1
Wallingford Steel Co
138
52
26
Weirton Steel Co
231
71
74
62
69
Wheeling Steel Corp
1,365
193
132
Youngetown Sheet & Tube Co
221
58
29
199
309
231
29
Miscellaneous
Electro Co
130
Venedium Corp.
56
Total
18,952
1,576
2,268
4,205
2,949
3,339
2,245
2,220
Office of the Secretary of the Treasury,
Division of Research and Statistics.
April 20, 1942
Source: Procurement Division, Treasury Department.
Regraded Unclassified
164
STRICTLY CONFIDENTIAL
Bottom cargo for Russiane sent from mille to Baltimore,
total April 5 to 11 and daily April 12 to 18, 1942
:
Tonnage
:
Name of company and
:
Total
:
commodity
:
April 5
:
Sunday
:
Monday
:
Tuesday
:
Wednesday
:
Thursday
:
Friday
:
Saturday
:
to
April 12
April 13
:
April 14
:
April 15
:
April 16
April 17
:
April 18
:
April 11
:
:
:
:
:
:
Brass
American Brass Co
329
47
45
48
47
Chase Brass & Copper Co
42
40
Steel
Allegheny Ludlum Steel Co
11
33
Armco International Co
116
Bethlehem Steel Co
334
70
141
96
270
178
161
Blair Strip Steel Co
19
23
33
39
Brainerd Steel Co
50
Colonial Steel Co
33
Colorado Fuel & Iron Co
548
658
590
Eaton Steel Co.
6
Follansbee Steel Corp
24
34
Great Lakes Steel Co
731
247
45
226
92
87
Inland Steel Co
1,010
Johnson Steel & Wire Co
44
25
Jones & Laughlin Steel Corp
3,342
92
339
167
Otis Steel Co
293
89
135
P & M Co
51
Republic Steel Co
3,830
253
448
643
689
718
444
504
John A. Roebling & Sons
33
Seneca Steel Co.
54
37
Sharon Steel Co
194
71
50
59
28
Thomas Steel Co.
35
25
25
25
37
U. 3. Steel Export Co
2,736
334
491
285
291
202
254
Weirton Steel Co
644
106
35
106
107
71
Youngstown Sheet & Tube Co
1,310
431
710
819
297
83
80
Miscellaneous
McKenne Metale Co
353
Total
15,478
684
2,148
2,573
2,638
2,416
1,922
1,168
Office of the Secretary of the Treasury,
Division of Research and Statistics.
April 20, 1942
Source: Procurement Division, Treasury Department.
Regraded Unclassified
165
STRICTLY CONFIDENTIAL
Bottom cargo for Ruesiane sent from mills to New York,
totel April 5 to 11 and daily April 12 to 18, 1942
:
Tonnage
:
:
Total
:
:
Name of company and
:
:
:
:
commodity
:
April 5
Sunday
:
Monday
Tuesday
Wednesday
:
Thursday
:
Friday
Saturday
:
to
April 12
April 13
April 14
:
April 15
April 16
April 17
April 18
:
April 11:
Brass
Phelps Dodge Co
113
Revere Copper & Brass Co
71
Iron
Oliver Iron Co
22
Steel
Allegheny Ludlum Steel Co
330
Armeo International Co
530
356
283
252
113
84
147
Bethlehem Steel Co
123
65
195
117
410
134
Cold Metal Products Co
53
Colorado Fuel & Iron Co
629
Crucible Steel Co
28
60
68
54
Great Lakes Steel Co
1,641
230
84
126
39
22
Halcomb Steel Co
66
34
Hepnenstahl Co
59
46
Indiana Steel & Wire Co
135
137
55
92
Inland Steel Co
956
1,783
148
786
456
168
Jones & Laughlin Steel Corp
469
46
46
61
409
144
McLouth Steel Co
National Tube Co
3,804
2,057
Otis Steel Co
981
90
289
375
259
150
P & M Co
51
1,473
403
Pittsburgh Steel Co
Republic Steel Co
391
52
97
52
103
158
120
Sheffield Steel Co
65
Thomas Steel Co
30
51
30
U. S. Steel Export On
3,103
52
597
632
1,224
1,252
516
165
Wellingford Steel Co
25
Techington Tin Plate Co
34
34
Weirton Steel Co
45
Wyckoff Drawn Steel do
348
166
84
127
42
125
107
Youngetown Sheet & Tube Co
2,939
114
213
245
130
Miccellaneous
National Standard Co
54
Total
13,679
500
3,356
1,919
2,377
3,228
7,847
3,053
Office of the Secretary of the Treasury,
April 20, 1942
Division of Research and Statistics.
Source: Procurement Division, Treasury Department.
Regraded Unclassified
166
April 20, 1942
Dear Mrs. Weber:
Secretary Morgenthau has asked me to reply on
his behalf to your letter of April 12th addressed
to him.
You may be interested to know that the
Secretary's younger son, Robert, is now on active
duty in the war zone aboard a United States destroyer.
His older son, Henry, is awaiting a call to Army
service and intends to enter the service as a private.
I feel that if you had known the facts you would
not have written the Secretary as you did.
Sincerely,
Ferdinand Kuhn, Jr.
Assistant to the Secretary
Mrs. Maude Weber
1855 Lincoln Avenue
E. E. Pittsburgh, Pennsylvania
FK:blb
Regraded Unclassified
Pgh Pa-1942
167
Mr Marganthan
Pleasi informan
in uniform. the same as myson
why your son Henry isent in Camp
I have one dowin Camp and
and the rest of the millioneboys.
another son togo Living
jobs only recently
So the administration wants
a united perfle. it is so easily
seen why the country is who diveded
for example, your son
will do his fighting from
7
are being defered in chair. with with the
you love yours. ready in a war to give not
I love my soris but as well anount as millions of our boyo their all. in camp.
influence to have them making. ofthem who are
in a position to usermy most of their
defered to sit in a suriel as able as your sou.
can ait in a nice clean
chair.
office and receive a fat
address to
Mrs In and Weber
salary paid frome the
(why)
1855 Lincoln are should the movie people
RR. Piltsburghta be are in not
termed England
who are the people who
To the Editor of the Post:
Sir May 1. my that Secret 4/18/47
MORGENTHAL'S SONS
Firtinand Kuhn Jr 170 1/20
genthey
roungest son. Robert, is now
on act juty in the war some aboard
& United States
His older 405, 168
ter
the Secretary
the services as
JULIUS LEVINSON.
Sir:
47 Greenock street, Dorchester.
april 20, 1942
Perhaps you
will be interested
in the enclosed
SONS IN SERVICE
To the Editoral Dost:
Sir-The following aditorial is from a
national
Heary Morgention, 12d. = years of
clipping
la the eldest son of this Secretary
the Treasury. Recently. be was as
pointed a housing specialist in the DI
vialon of Housing Co-ordination, Office
of Emergency Management. He will
be stationed in Claveland," etc.
Good luck to Henry Morgenthau.
Swell Job. One of my bons, 22 years old.
43 Greenock St
Julius Levinson
left & good job in the Carney Hospital
to defend democracy. Another to tn
the NJ. S. marine corpu. He is 19 years
old. He left A good job with the N. I.,
Dorchester, Mass
NJ X. H. SEPTO demo-
cratity principals Price Glogy."
J. J. MAHONI
345 West Fourth street, South Boston
Indivisible with
liberty and justice
Drall
Ferdirnand Kuhn on A2 3
THERETY Department
E
172
weshington, D.C.
4114
I just reed yourletter jup 13,
B
and are right when happensing you say,
the I facts feel yrs would as
DEFENS
STAMPS BONDSANDS,AMPS
inc that y you downtter
you did means the best the way facts but
me By may offinding categate out them.
330PM OSTON.MAS
3
to think directly thirpoves thus. det
)
1942
facts there 5 is - at is needof publicing to inform publicing themmon the at meetings- in
Have
and personal are statements I alsenders to way and the come in information and the tellime- look next 11 comect theras for minute misleading you the
writing sent to the Edith of
Baton Post
Inlies Sincerely Levinson
J Levinson
s 3 Greensch st
Darchester, Mass
No: in Treasurer's Office
7 Ferdonand Kuhn fr
Secretary to D the ept teasurer
Treasury
vashington, D. C. D.C.
AFTER 5 DAYS. RETURN TO
Endivisity with Liberty and Justice
+s breental it
Dondester, mass.
for all
Regraded Unclassified
173
April 13, 1942
Dear Mr. Levinson:
Secretary Morgenthau has asked me to reply
on his behalf to your post card of April 8th addressed
to him.
You may be interested to know that the Secretary's
younger son, Robert, is now on active duty in the war
zone aboard a United States destroyer. His older son,
Henry, is awaiting a call to Army service and intends to
enter the service as a private.
I feel that if you had known the facts you would not
have written the Secretary as you did.
Sincerely,
Ferdinand Kuhn, Jr.,
Assistant to the Secretary.
Mr. Julius Levinson,
43 Greenock Street,
Dorchester, Mass.
FK/cgk
Regraded Unclassified
173
April 13, 1942
Dear Mr. Levinson:
Secretary Morgenthau has asked me to reply
on his behalf to your post card of April 8th addressed
to him.
You may be interested to know that the Secretary's
younger son, Robert, is now on active duty in the war
zone aboard a United States destroyer. His older son,
Henry, is awaiting a call to Army service and intends to
enter the service as a private.
I feel that if you had known the facts you would not
have written the Secretary as you did.
Sincerely,
Ferdinand Kuhn, dr.,
Assistant to the Secretary.
Mr. Julius Levinson,
43 Greenock Street,
Dorchester, Mass.
PK/cgk
Regraded Unclassified
Segulary of the Tree
11
is shington, D. C
MO.F
1
1
CENT
174
Sir I read a letter in the Broton
look by a man whose two into come the
left merines-and good jobs- in N one send 4 80 Cranch
the services duply resenting your
you out sputher mm/ danger
being specialist sme-
3md, in into in
and thing funanture to the sin 3
most you sereously danger inform unveling X this
country by are a (ww an
yours, pictured Rosewell above? in duply advanted
Pre. his and are in the shouldnt days
because also GN. long
Jone demand informal 7 your aboved
you noft spots will
mOnty serious thought and
the t must amv, 3 very and truly, low
Julies Levens on
43 Green och St, Dorchester, man
4/20 142
175
(T. D.
)
TITLE 26 -- INTERNAL REVENUE
CHAPTER I
SUBCHAPTER E, PART 458, SUBPART I
INSPECTION OF EXCIS_ TAX RETURNS
Regulations governing the inspection of
excise tax returns.
TREASURY DEPARTMENT,
Washington, D. C.
April 15, 1942
TO COLLECTORS OF INTERNAL revenue
AND OTHERS CONCERNED:
Section 458.610 Introductory. (a) Section
55 (a) (2) of the Internal Revenue Code, as amended,
provides:
"And all returns made under this chapter,
Subchapters 4, B, D, and E of Chapter 2, sub-
chapter B of chapter 3, chapters 4, 7, 12, and
21, subchapter A of chapter 29, and chapter 30,
shall constitute public records and shall be
open to public examination and inspection to
such extent as shall be authorized in rules and
regulations promulgated by the President."
(b) Section 55 (Title I) of the Revenue Act of
1932, as amended by section 218 (L), Title II, of
the National Industrial Recovery Act, approved June
16, 1933 (48 Stat. 195, 209), provides:
"Returns made under this title shall be
open to inspection in the same manner, to the
Regraded Unclassified
176
- 2 -
same extent, and subject to the same provi-
sions of law, including penalties, as returns
made under Title II of the Revenue Act of
1926; and all returns made under this Act
after the date of enactment of the National
Industrial Recovery Act shall constitute
public records and shall be open to public
examination and inspection to such extent as
shall be authorized in rules and regulations
promulgated by the President."
(c) Section 55 (a) (Title I) of the Revenue
Act of 1934, provides:
"Returns made under this title shall be
open to inspection in the same manner, to the
same extent, and subject to the same provi-
sions of law, including penalties, as returns
made under Title II of the Revenue Act of 1926;
and all returns made under this Act shall con-
stitute public records and shall be open to
public examination and inspection to such ex-
tent as shall be authorized in rules and regu-
lations promulgated by the President."
Sec. 458.611 Inspection of excise tax returns.
Pursuant to the above-mentioned provisions of law
excise tax returns filed with respect to any tax
imposed by chapter 7 or 12 or 21, or subchapter A
of chapter 29, or chapter 30, of the Internal
Revenue Code, or filed after June 16, 1933, with
respect to any tax inposed by Title IV, V, or VII
of the Revenue Act of 1932, or filed with respect
to the tax imposed by Title IV of the Revenue Act
Regraded Unclassified
177
- 3 -
of 1934, or by any of the above-mentioned provi-
sions as amended, shall be open to inspection to
the same extent as provided with respect to in-
come tax returns in subpart B and sections 463C.31,
4630.32, 4630.33(a), 4630.34, 463C.35, 4630.36, and
463C.37 of subpart D of Treasury Decision 4929,
approved August 28, 1939, as amended by Treasury
Decision 4991, approved July 20, 1940 L26 C.F.R.,
1939 Sup., 458.301 to 458.307, both inclusive,
458.331 to 458.337, both inclusive, 1940 Sup.,
458.333(a)7.
(This Treasury decision is issued under the
authority contained in section 55 (a) (2), as
amended, of the Internal Revenue Code (53 Stat.
29, 26 U.S.C. 55, 1940 ed.); section 55 (Title I),
as amended, of the Revenue Act of 1932 (47 Stat.
189); and section 55 (a) of the Revenue Act of
1934 (48 Stat. 680).)
John Secretary of mithand. the Treasury.
APPROVED:
THE WHITE HOUSE.
Regraded Unclassified
178
4300 Rugby road
Baltimore, Maryland
April 20, 1942
My dear Mr. Secretary:
It was very good of you to take
the time to write me about my tax poem and I am ex-
tremely proud of your letter. Although I feel very
strongly and very humbly that this war is going to
be won by the soldiers and sailors rather than the
writers, I am very anxious to contribute anything
that I can and I hope that you will call on me if
there is any way I can be of use,
Sincerely yours,
Orden bash
OGDEN NASH
Regraded Unclassified
179
treasury department
TREASURY ENFORCEMENT AGENCIES
OFFICE OF
WASHINGTON
CHIEF COORDINATOR
April 20, 1942.
TO:
Mrs. Klotz
FROM:
Elmer Irey
Attached is a clipping from the New York
World-Telegram of March 16, 1942, containing
the article written by Walter J. Weir, of Old
Greenwich, Connecticut, entitled Wanted--For
War, Fighting Spirit of 1918."
Rst.
Enc.
I want provide INFORMATION Dated of - pain
180
one. I want something to fisht for-I'm sick and
used of having only tomething to fight against.
I'm hungry for something to get. pepped up about
Wanted-For War
-I'm repelled from having only something to fear.
I want something to do-not just to wait for.
It hasn't been so long since the last war that
Fighting Spirit of 1918
I forgot what happened then. I remember the
parades and the speeches and the ringing slogans.
Then we fought to make the world safe for de-
mocracy. We bought Liberty Bonds. We sang
The following article, written by W. J. Weir,
that the Yanks were coming.
copy director of Lord & Thomas. and published
We set out to avenge Belgium-not Just to re-
En Printers Ink. 13 reprinted here by permission of
member it. We made a vow that we'd reach Berlin
Printers Ink.
or bust. We toyed with plans to hang the Eniser.
We warned the Hun to "keep your head down,
By W. J. WEIR.
"ritzie-boy!" We girded ourselves for n Crusade
Don't get me wrong-I'm just AD ordinary suy.
we didn't close the doors for a singe.
1 am not trying to pose as AD expert on the
We hated the Kaiser-we didn't laugh at him.
molding of public opinion. I'm not talking big
We likened his upturned handle-bars to the
about what I'd do il IL was my job to whin up
devil's horns-not to anything so harmless and
the country on the war effort.
pathetic as the famous hirsute prop Charlle Chap-
Im talking 44 an average citizen. I'm say-
Un plasters on his upper Up, We saw nothing 18
ins. not what Id like to tell them. but what rd
be amused about in his vain and pompous postur-
like to be told. Soop.
ings-as we do today to Mussolini's puffy strutting.
Because I'm concerned, and I've been concerned,
We didn't pin our hopes on the defective eyesight
about my reaction to all that's been happening.
of our enemy.
Sure, I'm buying bonds. I'm paying taxes. I'm
doing with less sugar.
We planted war gardens. We poured our
But deep down inside, down where it really
money into war chests, We had gastess Sundays
matters, something hasn't taken place yet that I
and yelled "Stacker!" at anyone who dared lo
feel ought to take place. I'm all & welter of con-
venture out in his Winton or Hupmobile OF
fusion there. It keeps me scratching my head
Stearna-Knight. We churned one pound of butter
and mopping my brow when I know 1 ought to
into two pounds and did It with as much will
be clenching my fists.
as IT we were turning out ammunition
You understand? It's like this:
We took the offensive psychologically long be-
I want to be told-not to buy Defense Stamps
fore we took it physically. And if we hadn't taken
or Defense Bonds. I want to be told to buy
16 psychologically we'd never have developed the
drive to take If physically, And don't tell me we
V° my Stamps or War Bonds.
can't do the same now.
want to be told-not about the construction
I want to sing that today we control our OWN
of nouses in Defense Areas. I want to be told
dealiny, tomorrow the destiny of the whole world.
about the construction of houses in War Produc-
I want to sail against Germany, sgainst Day,
tion Areas.
against Japan. If they can sil sgainst us and
I want to be told-not to remember Pearl Har-
our allies, why can't we sail against them?
bor. I want to be told to take Tokyo, to bomb
I want to construct a greater American 00-
Berlin. to rase Rome.
prosperity sphere. I want to correct the mistakes
I want to be told-not to de my part to keep
the Versailles treaty insofar as they allowed all
Nazism or Pascism from these shores. I want le
its to happen. I want to win lebensraum for
be told to do my part to spread Americanism to
the democratic way of life.
all shores.
I'm fed up with singing plaintive songs-I want
I want to be cold-ool to help keep our world
la sing battle sungs. Don't tell me there'll Tam
and our way of life from being lost. I want to be
bluebirds over the white cliffs of Dover. To
told to help build a new world and & better way
hell with bluebirds. Tell me there'll be vultures
of life.
and à deathly silence over Berchtesgaden.
I'm bored with keeping B stiff upper lips-I
went to develop B stiff uppercut, I'm tired of
being made to feel sad, I want the experience-
the purgins, marshaling, driving experience-of be-
ins made to feel mad. Fighting madi
You gift me?
Regraded Unclassified
TRE JAY DEPARTMENT
181
INTER OFFICE COMMUNICATION
CONFIDENTIAL
DATE April 20, 1942
TO
FROM
Mr.
Secretary 92 Morgenthau
Subject: The Situation,
Week ending April 18, 1942.
Summary
(1) Transportation difficulties, due principally to the
shortage of ships, are becoming the outstanding obstacle to the
fullest prosecution of the war effort. The shipbuilding pro-
gram is still behind schedule, due largely to shortages of steel
and propulsion machinery. In order to avoid freight congestion
at ports, a general embargo on all commercial exports has been
put into effect.
(2) The general price level continues its steady advance.
As a result of a further rise of 0.2 percent, the BLS all-
commodity index in the week ended April 11 stood at 98.1, or
nearly 31 percent above the pre-war level of August 1939. How-
ever, last week basic commodity prices receded slightly. Wheat
prices fell to the lowest level since last November and the ex-
tended rise in hog prices has been followed by a downturn.
(3) Industrial stock prices last week sagged to the lowest
levels since 1934, although trading activity was still light
and prices firmed slightly at the end of the week. Apprehen-
sion over Laval's return to power in France was cited as a
dominant factor in the decline, but continuing concern over the
outlook for earnings and dividends doubtless contributed to the
market weakness.
(4) Department store sales have shown the customary
slackening after the Easter buying rush. In reflection of the
unusually high levels attained in the opening months of the
year, sales in March showed somewhat less than the usual
seasonal rise. The advance in retail prices of department store
items slowed down in March, but still stood 18.7 percent above
year-earlier levels.
to divert the construction industry to war work, rather than to
(5) Restrictions imposed on building activity have served
construction aggregate contract awards in the first quarter of 1942, as
reduce the volume of construction activity. Total
reported by the F. W. Dodge Corporation, were 29 percent above
year-earlier levels.
Regraded Unclassified
182
Shipping difficulties menace war effort
While attention continues to be centered on production pro-
blems in the effort to speed up the war program, transportation
difficulties, particularly ocean shipping shortages, threaten
to become the primary obstacle to the fullest prosecution of
the war effort. Thus, Admiral Land last week characterised
shipping as the most serious bottleneck of the war program. He
indicated that labor and management would have to increase pro-
duction by 13 percent, and that steel promised by the WPB would
have to be delivered promptly, to attain this year's ship-
building goal.
Aided by increased conversion of strip mills to plate pro-
duction, the steel industry's shipments of plates last month
rose 16 percent to a record high of 879,000 tons. Furthermore,
plate deliveries to shipyards for merchant ship construction
actually increased 30 percent during the month. Nevertheless,
lack of steel plate continues to be cited as a major factor in
the lag in the shipbuilding program. Another retarding factor,
according to press reports, is a laok of propulsion machinery,
described by some shipbuilding executives 86 the most serious
bottleneck of all,
General embargo on exports put into effect
AB a result of the shipping shortage, the Association of
American Railroads last week put into effect & general embargo
on loading of all goods for export, except war shipments, in
order to prevent freight congestion at ports. In announcing
this step, the railroads characterized It as a purely preventive
measure and claimed that traffic conditions at all ports were
"liquid". Since embargoes on normal commercial exports to
certain areas were already operative, the effect of the order
W&B merely to broaden existing restrictions. Nevertheless,
this latest move serves to emphasize the growing pressure on
transport facilities.
While the primary concern in the shipping situation 18 to
produce more ships to move an increasing flow of war materials
to far-flung battlefronts, it is also vitally necessary to
maintain the inflow of essential raw materials. Moreover, the
domestic transportation situation 18 being viewed with increas-
ing concern. Among other developments, the shipbuilding and
other war industry requirements seem likely to prevent the
railroads from obtaining sufficient materials to build up
their equipment facilities adequately,
Regraded Unclassified
183
- 3 -
Price trend compared with that in first World War
General commodity prices continue a steady but gradual
advance. In the week ended April 11, the BLS all-commodity
index rose 0.2 percent to 98.1, which makes an increase of
30.8 percent since the pre-war level of August 1939, and
6.4 percent since the week before the Pearl Harbor attack.
As compared with the rise in early 1917, however, the
present advance appears noticeably restrained. (See Chart 1,
upper section.) In the previous war, severe inflation got
under way before the first war-time price controls were 10-
posed in the summer of 1917. Food prices (lower section of
chart) are continuing to advance steadily, but in recent weeks
they have diverged somewhat from the steep trend of the 1917
war period.
Basic commodity prices in slight recession
Basic commodity prices receded slightly last week. (See
Chart 2.) The recession was featured by further weakness in
wheat prices, which dropped to their lowest level since
November, after & continuous decline of five weeks. The
weakness reflects the outlook for record supplies with the
prospective large new crop, and uncertainty over storage
space.
Prices for hoge declined last week, for the first time
since January, on an OPA revision of the ceiling on pork
prices. Prices for steers, on the other hand, advanced
sharply to & new high point for the war period. Butter quo-
tations, supported by Government purchases, continued their
advance.
Among industrial raw commodities, wool and cotton prices
declined slightly, and print cloth prices were reduced.
Domestic consumption of cotton during March, although at &
new record high, was somewhat disappointing on 8. daily basis
in comparison with trade expectations. The CCC again sold
its monthly quota of cotton for April.
high March level. The decline was due largely to realization
Flaxseed prices declined for the second week from their
that shipping space from Argentina had been booked for sub-
WPB order restricting private construction activities, which
stantial quantities to be delivered this spring, and to the
may result in reduced demand for linesed oil. Flaxseed prices
Government loan rate, designed to encourage planting of this
will be supported, however, by a recent increase in the
crop.
Regraded Unclassified
84
Pork oeiling revised
The OPA wholesale price ceilings on pork have been revised
to eliminate injustices resulting from the advantage taken of
advance information by some wholesalers. These wholesalers
manipulated their prices upward immediately before the ceilings
were fixed, thus establishing artificially high margine for
themselves during the base period of March 3-7. Subsequently,
they were in a position to bid more for live hoge than those
who traded as usual before the temporary ceilings were announced.
To remedy the situation the OPA moved the base period back to
the period of February 16-20. In order to comply with the
price control act, which requires that temporary ceilings
must be based on the level prevailing during the five days prior
to their imposition, an adjustment was provided for the rise of
hog prices between the February and March periods.
Parity formula to cover labor costs proposed
Announcement has been made by Representative Fulmer that
ne proposes to have the House Agriculture Committee hold hear-
ings for the purpose of working out legislation to set up a
new formula for parity prices. The proposal apparently would
require inclusion of wages in the parity index. According
to the press, Mr. Fulmer said, "The present parity formula 18
unfair to farmers, in that it does not take into consideration
labor on the farm, as well as 8 fair and just portion of the
national income compared with other groups'. Secretary Wickard
18 reported to have opposed the plan, pointing out that pre-
sent statutory authority would not permit inclusion of wages
in the parity index, and that such inclusion in March would
have raised the current index by only 2 points.
Stocks deoline to new low
Stock prices last week sagged to new lows. The Dow-Jones
average of industrial stocks at Friday's closing prices was
down nearly 4 percent from week-earlier levels, and stood at
price of railroad stocks receded to a new low since 1940,
the lowest point since 1934. At the same time, the average
while the Dow-Jones average of utilities eased to the lowest
point since compilation was begun in 1929. The volume of
trading stepped up slightly, but still remained at low levels.
Adverse implications of Laval's return to power in France al- were
apparently the dominant influence in the week's deoline,
increased taxes and stiffening war restrictions were said to
though fears of lower earnings and dividends as a result of
have contributed to the weakness.
Regraded Unclassified
- 5
185
The probability that foreign developments vere only parti-
ally responsible for the decline is emphasized by the fact
that industrial stock prices in the London market actually
showed a gradual upward trend during the week. (See Chart 3.)
It will be noted, in fact, that stock prices in the London
market have been rising very gradually since the third week
in March, in contrast to the weakening tendencies noted in
the New York market.
Department store sales show seasonal downturn
With the Easter buying peak passed, department store sales
in the week ended April 11 showed the customary deoline, and
fell below year-earlier levels for the first time this year.
However, the decline from the corresponding week of last year
18 without special significance, since the 1941 period covered
Easter week which fell a week later last year. (See Chart 4.)
On a seasonally adjusted basis, department store sales
have shown some recession from the record levels attained in
January, when the FRB adjusted sales index reached 138. The
decline to 126 in February was followed by a further decrease
to 122 in March, as the expansion in actual sales fell some-
what short of the usual seasonal showing.
The rise in retail prices of typical department store
items, as measured by the Fairchild index, slowed down some-
what in March and advanced only 0.5 percent over the previous
month. Nevertheless, the gain over year-earlier levels
amounted to 18.7 percent. Since the value of March sales
ran 24.7 percent above the corresponding month of 1941, it
will be seen that the bulk of this year's sales gain was due
to the rise in prices.
Although department store sales for the year to date have
averaged 23 percent above year-earlier levels, B. growing short-
age of various civilian goods may reduce this margin later
in the year, unless offset by price advances. However, de-
partment stores have anticipated this situation to some extent
by building up stocks. In February the FRB seasonally ad-
justed index of department store stocks (in dollar value)
jumped sharply to a new high, and stood 41 percent above the
corresponding month in 1941.
Construction industry heavily converted to war work
While numerous restrictions on construction activity have
been imposed by the WPB, the net effect of these has been to
duction in aggregate construction activity. Thus, total
convert the industry to war work rather than to cause 8. re-
Regraded Unclassified
- 6 -
186
construction awards in March, as reported by the F. W. Dodge
Corporation, were the highest for that month since 1927 and
exceeded the corresponding month of last year by 27 percent.
Total construction awards during the first quarter of
1942 ran 29 percent above year-earlier levels. Restrictions
on private residential construction were more than offset by
gains in low-cost defense housing and various types of
military housing, with the result that total residential con-
struction awards in the first quarter were 31 percent above
the corresponding quarter of 1941. The progress in convert-
ing the construction industry to war work may be seen from
the fact that public construction contracts comprised 72 per-
cent of total awards in the first quarter of this year, as
compared with only 47 percent a year earlier. These figures,
moreover, do not cover all war work, since large amounts of
war construction have been let for private account,
Similar trends are revealed by heavy construction data
compiled by the Engineering News Record. During the first
three months of 1942 aggregate engineering construction
awards were 36 percent above the corresponding period in
1941, and contracts have continued to be let at & high level
during the current month. (See Chart 5.)
Regraded Unclassified
PRICES, 1939 TO DATE COMPARED WITH 1914 TO 1918
July 1914 100 World War Period; Aug. 1939-100 Present Period
PERCENT
PERCENT
All Commodities
200
200
1918
180
180
1917
160
160
140
140
1916
Weet Dated
$ =
120
First Month
1942
of For
120
1915
1940
1941
1939
100
1914
100
80
J
M
M
J
5
N
J
M
M
J
80
5
N
J
E
M
J
5
N
J
M
M
J
$
N
J
M
M
J
5
N
PERCENT
PERCENT
Foods
200
200
1918
180
180
1917
160
160
- Enter
- #
140
140
1942
1941
First Month
120
of Mar
120
1916
1939
1940
100
1915
100
1914
80
J
M
M
J
$
#
J
M
M
J
80
5
N
J
M
M
J
$
N
J
E
3
J
8
N
J
M
M
di
5
N
Source: D.L.S.
187
Office of the Secretary of the Trumery
- of Board and fairio
Regraded Unclassi
MOVEMENT OF BASIC COMMODITY PRICES
AUGUST 1939 100
PERCENT
PERCENT
PERCENT
PERCENT
Weekly Average
Daily
220
220
200
200
200
200
190
12 Feedatuffa
190
12 Foodstuffs
180
180
180
180
160
160
170
170
140
140
160
16 Row Industrial
160
16 Row Industrial
Materials
Materials
120
120
150
150
100
100
140
140
JUNE
AUG.
OCT.
DEC.
FEB.
APR.
JUNE
AUG.
OCT.
DEC.
as
28
,
N
at
26
.
"
=
e
.
.
.
=
-
.
17
FEB.
MAR.
APR.
MAY
JUNE
1941
1942
1942
PERCENTAGE CHANGE FOR INDIVIDUAL COMMODITIES
Aug. 1939 to Apr. 17, 1942
Dec. 6. 1941 to Apr. 10. and Apr. 17, 1942
PERCENT
Cottonesed
PERCENT
12 Foodstuffs
12 Foodstuffs
+40
Hoge mas
Hoge MRS%
120
Tollow HETA
Lard INIX
+30
Coooo
Barley #7.8%
Lard 117%
Com 162X
80
+20
Stame NJX
Coffee 772X
Carn 120%
Steers MAX
Wheat 619%
donley nes
Outter an
Butter SL4X
+10
Tallow 7FZ
40
Sugar 6.9%
Cottonesed our 425
Sugar 30.8%
o
Coffee ex
Coooo -EX
Wheat -1.6%
o
-10
Aug.
Apr. 17
Dec.6.
Apr. 10
Apr. 17
1939
1942
1941
1942
1942
PERCENT
PERCENT
16 Raw Industrial Materials
16 Raw Industrial
Materials
+40
Flassed sess
120
Cotton 120.02
Burlep max
+30
Print Cloth aux
Zino east
Cotton N.S.
80
Floread de.2x
+20
Lood IIII
Who/ max
Print Cloth 6.7%
Nideo BL7X
Wbo/ 4z
St. Screp.dom 36.8%
Zine 28
Pubber MAX
+10
0% Change
40
frein aux
Shallac. Tin,
Load na
Copper
& 17.0%
o
Hides.
Copper NEX
St. Soron abm,
- -
Rubber,
St. Scrqp exp.
0
Tin ear
Apr. 17
-10
Aut,
Dec.6.
Apr. ID
Apr.17
Your -18t
1939
1942
1942
1942
Buniqo -45%
1941
188
"Bieck lines indicate commodities under prés callings - other central
- e - - el - -
I 1
Regraded Unclas
Chart 3
INDUSTRIAL STOCK PRICES IN U.S. AND U.K.
189
AUGUST 1936 - 100
Weekly
(AVERAGE OF DAILY)
1941
1942
JAN.
FEB.
MAR.
APR.
MAY
JUNE
JULY
AUG.
SEPT.
ocT.
NOV.
DEC.
JAN.
FEB.
MAR.
APR.
MAY
JUNE
JULY
AUG.
SEPT.
PER
PER
CENT
GENT
100
100
95
95
90
90
85
85
U.S. 30 INDUSTRIAL
STOCKS (DOW-JONES)
80
80
75
75
70
70
65
65
60
60
U.K. 56 INDUSTRIAL
STOCKS
55
55
50
50
45
45
40
40
JAN.
FEB.
MAR.
APR.
MAY
JUNE
JULY
AUG.
SEPT.
OCT.
NOV.
DEC.
JAN -
FEB.
MAR.
APR.
MAY
JUNE
JULY
AUG.
SEPT.
1941
1942
Office of the Secretary of the Treasury
F0 - 156
Division of Research and Statistics
Chart 4
DEPARTMENT STORE SALES
190
1935 - '39 . 100, UNADJUSTED
JAN.
MAR.
MAY
JULY
SEPT.
NOV.
PER
PER
CENT
CENT
Weekly
260
260
240
240
220
220
200
200
180
180
160
160
140
140
120
120
'41
'42
100
100
80
80
'40
60
60
JAN.
MAY
JULY
SEPT.
NOV.
MAR.
This of the - of the Incorry
C - 390
- di - and Date
HEAVY CONSTRUCTION CONTRACT AWARDS
DOLL ARS
DOLL ARS
Millions
Millions
Heavy Engineering Contracts
44
Eng. News Rec., Daily Ave.
44
40
40
36
36
1941
32
32
28
28
24
24
20
20
1942
16
16
1940
12
12
8
JAN.
FEB.
MAR.
APR.
MAY
JUNE
JULY
AUG.
SEPT.
8
OCT.
NOV.
DEC.
Chart 5
"Four-week moving average placed on fourth
Office of the Secretary of the Transy
191
Christer of - - Date
C-303-A-1
Regraded Unc a
192
OFFICE OF LEND-LEASE ADMINISTRATION
FIVE-FIFTEEN 22d STREET NW.
WASHINGTON, D.C.
E. R. Stettinius, Jr.
Administrator
April 20, 1942
The Honorable Henry Morgenthau
The Secretary of the Treasury
Treasury Department
Washington, D. C.
Dear Mr. Secretary,
Immediately upon receipt of the
memorandum from Mr. McCloy, copy of which
is attached, I telephoned Mr. Harry White
and asked him if he would convey the
answer to you. Mr. White tells me that he
sent you the copy I sent over especially
for him with the suggestion that you
telephone me if there were any further
questions.
In compliance with your suggestion,
I will be very glad to talk with you about
this subject at three o'clock this afternoon.
Sincerely yours,
Cale
Thomas B. McCabe
Acting Administrator
Attachment
C
193
0
P
Y
WAR DEPARTMENT
OFFICE OF THE ASSISTANT SECRETARY
WASHINGTON, D. C.
April 14, 1942
MEMORANDUM FOR MR. McCABE:
SUBJECT: Taking out British Contracts.
After an investigation of the moneys available in
our existing or pending War Department appropriations (including
those for articles for export to other governments), I find
that there are as yet uncommitted funds which could be used to
buy out British contracts in the following approximate amounts:
Air items
I
up to $250,000,000
Ordnance items
-
as required (up to $200,000,000)
Others
-
as required (up to $20,000,000)
In every instance, however, these appropriations
were or are being obtained on the basis of estimates which we
submitted to Congress and which do not include the British
contracts. If these moneya are utilized for the purpose of
taking out the early British contracts, it will be necessary
for us to reapply to Congress immediately for the restoration
of these amounts for they will be needed for the programs we
already have under way for our own Army and for the foreign
governments whose interests are represented in the appropriations.
The particular items which are involved in the British
contracts that are the subject of discussion are in many cases
not items which the War Department would desire to procure and, in any
event, it is certainly contemplated that the British will want
(and no doubt will eventually receive) the articles that are
covered by the contracts.
For this reason, as well as for the reason that the
appropriations based on estimates for our own armies are so
largely committed, or at least earmarked, we can look, as a
practical matter, for money to take over British contracts, only
to the appropriations set up for articles for export. These
moneys are available in the quantities set forth above, but as
Regraded Unclassified
194
-2-
they were obtained on testimony which not only did not disclose
that they might be utilized for the purpose now contemplated but
created clearly the impression that they were to be used for
purchases not yet contracted for, we feel that if they are to be
employed for this purpose the Chief Executive, acting either
directly or through the Budget Director, should so direct the
War Department. Such direction is the more necessary because
the operation is being urged primarily as & means for improving
the British dollar exchange which is not normally a War Department
function.
(Signed) John J. McCloy
John J. McCloy
Assistant Secretary of War
Regraded Unclassified
195
L-
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE April 20, 1942
TO
Secretary Morgenthau
Mr. Kamarck
FROM
Subject: Shipment of Planes to British Forces, Week Ending
April 14, 1942
1. In the week ending April 14, 1942, a total of
183 planes of all types (154 combat planes) were
shipped to British forces.
2. The largest shipment of combat planes to the
British Pacific forces to date occurred during the
week with 45 Kittyhawks being sent to Australia and 15
Lockheed Hudson bombers being sent to New Zealand and
Australia.
3. A total of 33 Grumman Martlet aircraft carrier-
based fighters has now been shipped to India in 1942.
- 2 -
196
Table A - Shipments by Area
Week
Total Shipped
Total Shipped
Ending
in 1942
since
Apr. 14, 1942
to date
Jan. 1, 1941
To the United Kingdom
Light and medium bombers
32
146
1,307
Heavy bombers
7
24
128
Naval patrol bombers
o
8
110
Pursuit
25
542
853
Army Cooperation
6
44
75
Trainers
O
0
24
Total to the United Kingdom
70
764
2,497
To the Middle East
Light and medium bombers
7
186
516
Heavy bombers
0
o
5
Pursuit
0
163
1,011
Army Cooperation
0
12
12
Trainers
0
8
150
Total to the Middle East
7
369
1,694
To the Canadian Forces
Light and medium bombers
1
27
195
Heavy bombers
0
1
1
Naval patrol bombers
0
23
31
Pursuit
0
30
72
Trainers
29
253
1,494
Total to the Canadian Forces
30
334
1,793
To the British Pacific Forces
Light and medium bombers
15
121
216
Naval patrol bombers
o
o
27
Pursuit
45
113
281
Trainers
o
0
105
Total to Pacific Forces
60
234
629
To the British Indian Forces
Pursuit
16
33
33
Total to Indian Forces
16
33
33
Total
Light and medium bombers
55
480
2,234
Heavy bombers
7
25
134
Naval patrol bombers
O
31
168
Pursuit
86
881
2,250
Army Cooperation
6
56
87
Trainers
29
261
1,773
Totals
183
1,734
6,646
197
- 3 -
Table B - Shipments by Types
Week
Total Shipped
Total Shipped
Ending
in 1942
since
Apr.14,1942
to date
Jan. 1, 1941
Bell Airacobra
25
288
442
Boeing B-17
2
7
27
Boston III
o
5
29
Brewster Buffalo
o
o
168
Cessna Crane I-A (AT-17)
5
26
26
T-50
0
86
700
Consolidated Catalina
o
31
168
Liberator
5
18
107
Curtiss Kittyhawk
45
310
692
Tomahawk
0
o
544
Douglas Boston I and II
o
0
82
Boston III
0
0
410
Fairchild 24 R-9
6
46
68
Glenn Martin Baltimore
7
189
257
Maryland
0
0
150
Grumman Martlet II
16
38
79
Lockheed Hudson
35
228
1,198
Lightning
0
3
3
Ventura I
0
12
12
Ventura Bomber
12
44
44
North American B-25B
1
2
2
Harvard II
0
51
948
Mustang
0
242
322
Pitcairn Autogiro
o
o
5
Stearman PT-27
24
98
99
Vought Sikorsky Chesapeake
o
0
50
Vultee Stinson-049
0
10
14
Grand Total - All Types
183
1,734
6,646
Regraded Unclassified
Table C - Plane Shipments to the British by Weeks
198
Light and
Neval
Week
medium
Heavy
patrol
Army
Ended
bombers
Bombers
bombers
Pursuit
Cooperation
Trainers
Total
Weekly Average
of shipments
in 1941
36
2.2
2.7
28.3
.6
30.2
100
January 6,1942
24
o
5
30
4
9
72
January 13,1942
3
o
2
58
o
42
105
January 20,1942
8
0
O
14
0
60
82
January 27,1942
24
o
1
100
5
13
143
February 3,1942
9
o
3
10
4
4
30
February 10,1942
33
0
3
59
o
4
99
February 17,1942
12
0
2
41
7
0
62
February 24,1942
33
0
2
86
7
1
129
March 3,1942
26
0
1
80
6
o
113
March 10,1942
29
2
o
78
1
O
110
March 17,1942
34
1
0
94
8
0
137
March 24,1942
94
9
12
79
0
84
278
March 31,1942
49
1
o
58
4
10
122
April 7,1942
69
2
0
8
4
5
88
April 14,1942
55
7
0
86
6
29
183
Total shipments
since January 1,
1941 to date
*
2,234
134
168
2,250
87
1,773
6,646
.
These totals include a few aircraft shipped prior to March 17, 1942, which are not listed in
the weekly figures. Due to a mistake by the source of the data, Lend-Lease aircraft flight
deliveries were not included in the weekly statements. The correction has now been made in
the totals.
Regraded Unclassified
Treasury Department
199
Division of Monetary Research
Date April 21
42
19
To:
Miss Chauncey
If the Secretary has not yet
read the Executive Order referring
to the additional functions of the
Board of Economic Warfare he should
glance at the appended summary.
MR. WHITE
Branch 2058 - Room 214}
TREASURY DEPARTMENT
200 for
INTER OFFICE COMMUNICATION
DATE April DATE 20, 1942
TO
Secretary Morgenthau
Mr. White
FROM
Subject: Executive Order - Board of Economic Warfare
1. The Board 16 to be responsible for determining and directing
the "policies, plans, procedures" of the several Federal
agencies with respect to the production and procurement
(including the financing) of materials which are to be
imported -- using W.P.B. directives 8.8 a guide.
For carrying out this responsibility and to take any other
action "deemed necessary", the Board is to direct the
organization and financing of a Government corporation.
2. The Board is to:
(a) Advise the State Department on terms included in
Lend-Lease agreements.
(b) Arrange for receipt by the United States of any
reciprocal aid and benefits received from Lend-Lease
countries.
(c) Represent the Government in dealing with other countries'
economic warfare agencies - and relate our effort to
theirs.
3. The Board may "arrange through the Department of State" to send
abroad representatives responsible to the Board.
Comment: The order leaves some points yet to be settled. For
example, it can extend its activities as "deemed
necessary to facilitate the war effort". The order
does not say who 18 to make this determination.
Similarly, it 18 to "arrange through" State to send
representatives abroad. There may be some conflicting
interpretations of this provision.
Regraded Unclassified
#9128
201
EXECUTIVE ORDER
DEFINING ADDITIONAL FUNCTIONS AND DUTIES
OF THE BOARD OF ECONOMIC MARFARE
By virtue of the authority vested in me by the First
War Powers Act, 1941, approved December 18, 1941 (Public
Law 354, Seventy-Seventh Congress), and the Act of March 11,
1941 (Public Law 11, Seventy-Seventh Congress), as President
of the United States and Commander in Chief of the Army and
Navy, it is hereby ordered as follows:
1. In addition to the responsibilities and duties hereto-
fore conferred, the Board of Economic warfare is authorized and
directed to:
a. Receive and be responsible for executing
directives from the Chairman of the har Pro-
duction Board as to quantities, specifications,
delivery time schedules, and priorities of
materials and commodities (other than ams,
munitions, or weapons of war as defined in
the President's Proclamation of May 1, 1937,
as amended) required to be imported for the
war production effort and the civilian economy;
and determine the policies, plans, procedures,
and methods of the several Federal departments,
establishments, and agencies with respect to
the procurement and production of such materials
and commodities, including the financing
thereof; and issue such directives, or initiate
Regraded Unclassified
- 2 -
202
such proposals in respect thereto as it may
deem necessary.
b. Direct, with the approval of the President,
the creation, organization, and financing of
a corporation or corporations, pursuant to
subsection 3 of the fourth paragraph of
section 5(d) of the Reconstruction Finance
Corporation Act, as amended, the objects and
purposes of which shall be:
(1) To obtain from foreign sources such mate-
rials, supplies, and commodities (other
than arms, munitions, or weapons of war
as defined in the President's Proclamation
of May 1, 1937, as amended) as are neces-
sary for the successful prosecution of the
war, and provide for the production, de-
livery, sale, or other disposition thereof;
and
(2) To take such other action as may be deemed
necessary to facilitate the war effort and
strengthen the international economic
relations of the United States.
C. Advise the State Department with respect to the
terms and conditions to be included in the master
agreement with each nation receiving lend-lease
aid under the Act of March 11, 1941, entitled
"An Act Further to Promote the Defense of the
United States and for Other Purposes," and Acts
amendatory or supplemental thereto.
- 3 -
203
d. Provide and arrange for the receipt by the
United States of reciprocal aid and benefits
(other than arms, munitions, or weapons of
war as defined in the President's Proclamation
of May 1, 1937, as amended) from the government
of any country whose defense shall have been
determined by the President to be vital to
the defense of the United States pursuant to
the Act of March 11, 1941 (Public Law 11,
Seventy-Seventh Congress), and determine the
terms upon which such aid and benefits shall
be received, including the authorization of
other governmental agencies to receive such
aid and benefits.
e. Represent the United States Government in
dealing with the economic warfare agencies
of the United Nations for the purpose of
relating the Government's economic warfare
program and facilities to those of such nations.
2. For the purpose of carrying out its responsibilities,
the Board of Economic Warfare may arrange through the Department
of State to send abroad such technical, engineering, and economic
representatives responsible to the Board as the Board may deem
necessary.
3. The responsibilities, duties and powers transferred
to and conferred upon the Board of Economic Warfare by this
Order may be exercised and performed by the Chairman of the
Board, or by the Executive Director of the Board, or such
other officials or employees as the Chairman may dosignate.
Regraded Unclassified
204
- 4 -
4. Executive Orders No. 8839 of July so, 1941; No. 8900
of September 15, 1941; No. 8952 of December 17, 1941; No. 8926
of October 28, 1941 are amended accordingly; and any provisions
of these or other portinent Executive Orders conflicting with
this Order are superseded.
FRANKLIN D. ROOSEVELT
THE WHITE HOUSE
April 13, 1942
Regraded Unclassified
205
COPY
DEPARTMENT OF STATE
Washington
In reply refer to
April 20, 1942
FF 840.51 Frozen Credits/6010
The Secretary of State presents his compliments to the
Honorable the Secretary of the Treasury and transmits for the
information of the Treasury Department copies of telegram no.
476, April 6, 1942, 5 p.m., to the American Embassy at Buenos
Aires, and of the Embassy's reply thereto, telegram no. 654,
April 11, 1942, 1 p.m., concerning the funds in the amount of
$103,995 deposited by Frederick J. Gilfillan, a native American
citizen, in the Banco de la Provincia de Buenos Aires, January 13,
1942, via the Guaranty Trust Company of New York City. and which
was later transferred to the name of his wife, a Swiss national,
as well as a copy of a letter dated March 28, 1942, from Mr. C.
Romanet, with its enclosure, a letter dated March 26, 1942, from
Mr. Gilfillan.
The Secretary of State would appreciate being advised as
to what reply, if any, should be made to telegram no. 654 from
the Embassy at Rio de Janeiro.
Enclosures:
1. Telegram no. 476 to
Buenos Aires,
April 6, 1942.
2. Telegram no. 654 from
Buenos Aires,
April 11, 1942
3. From Mr. C. Romanet,
March 28, 1942, with
enclosure.
*
Should be "Buenoe Aires" instead of "Rio de Janeiro".--F.D.
COPY:lap-5/9/42
Regraded Unclassified
206
COPY
TELEGRAM SENT
BAS
This telegram must be para-
April 6, 1942
phrased before being communi-
cated to anyone other than a
5 p.m.
Governmental agency, (BR)
AMEMBASSY
BUENOS AIRES
476
Investigate and telegraph report concerning alleged
transfer in January 1942 to Banco de la Provincia de
Buenos Aires of funds totaling $103,000 by Frederick J.
Gilfillan, native American citizen. An applicant for
passport facilities, he plans to visit Buenos Aires to
buy wool with said funds for sale in the United States.
He is said to be married to a Swiss citizen, maiden name
Jeanne A. Eckert. Under terms of two marriage contracts
most of his assets in Europe were placed under wife's
control. He offers as reference Guaranty Trust Company
of New York City.
WELLES
ACTING
(DH)
FF:PRA:LM PD
COPY:lap-5/9/42
Regraded Unclassified
207
COPY
AS
This telegram must be para-
Buenos Aires,
phrased before being communi-
cated to anyone other than a
Dated April 11, 1942
Governmental agency. (BR)
Rec'd 1:21 p.m.
Secretary of State,
Washington.
654, April 11, 1 p.m.
Department's 476, April 6, 6 p.m.
$103,995 was deposited by Gilfillan in the Banco
de Brazil la Provincia January 13 through the Guaranty
Trust Company of New York and this was later transferred
to his wife's name by order dated January 17 the dollars
being held in the Guaranty Trust Company in the general
deposits of the local bank. The bank here does not know
purpose but has offered to inform the Embassy before any
substantial withdrawal is made. Further details are being
reported by despatch. If the Department wishes to be con-
sulted before withdrawal I should appreciate receiving
instructions.
ARMOUR
RR
COPY:lap-5/9/42
Regraded Unclassified
208
COPY
Miami, March 26, 1942.
Coudert Brothers,
Washington, D. C.
Gentlemen:
Thank you for your letter of the 25th, which has just arrived.
As the Passport Division seems to be desirous of having more
information about me, especially in regard to the funds I sent to
South America, allow me to give you some more details covering the
case:
Hearing last September while in St. Paul, Minn. that the Govern-
ment was issuing new passporte, and having decided to go to South
America, I sent in my old passporte to the State Department in
Washington and obtained a new one. I was in New York in October and
intended to take a ship for South America at that time, but family
reasons prevented me.
End of November, while in Winter Park, I inquired of my bank in
New York whether there were any restrictions as to sending of funds
to the Argentine. They answered that, excepting some cases of people
who were "on the black list", there were no restrictions whatsoever
and that I was entitled to send as much as I wanted there. Thereupon
I instructed them to eend funds which I judged sufficient to finance
my export projects from the country in question. - which they did.
There was no question whatsoever of applying for any license to enable
me to do this at that time.
In December, I inquired of the Pan American office in Miami, by
writing as to what papers were required for 8. trip to the Argentine,
and was told by them that a passport, vaccination and police certifi-
cates and visas were necessary. I thereupon got all these papers
for myself and wife, and bought the tickets.
Although the writing back and forth extended beyond January 15th,
the Pan American Office wrote me nothing about any validation of my
passport. When we arrived here in Miami and presented ourselves to
their local office with all the required papers (and this was on the
11th of February). we were not told even then that a validation of my
passport was required. We waited around till there was 8. chance to
get off, and not till the day before there were 2 vacant places was I
told that my passport needed a validation.
Regraded Unclassified
209
- 2 -
I understand that, in these troublous times, the Government has
to be careful in allowing too much liberty of action to citizens whose
part may be doubtful, but as I have no fear of my record being examined,
I do not quite see why I should be condemned to sit around as a useless
consumer for the duration, when I feel myself well and active enough to
be up and doing something useful in this terrible emergency.
Thanking you for your efforts on my behalf, I am
Very truly yours,
FREDERICK J. GILFILLAN
F. J. Gilfillan
c/o American Express Co.
330 Flaglerstreet,
Miami, Fla.
COPY:lap-5/9/42
210
COPY
COUDERT BROTHERS
The Bond Building
RusseTE I. Hare
Washington
March 28, 1942
Mrs. R. B. Shipley, Chief,
Passport Division,
State Department,
Washington, D. C.
Re: Frederick J. Gilfillan.
Dear Mrs. Shipley:
Pursuant to Mr. Shay's letter to you of March 25,
1942, in connection with the application for validation
of Mr. Gilfillan's passport, I now send you herewith
copy of a letter received from Mr. Gilfillan giving us
further information concerning his funds in the Argentine.
Although Mr. Gilfillan, in a letter to us of March 10th,
stated that he had been "permitted" to send money to the
Argentine, it now develops from the enclosed letter that
no license had been required for the transfer of the
funds.
I am at your entire disposition for any further
information you may require in this connection and remain
Respectfully yours,
C. ROMANET
CR
Encl.
COPY:1ap-5/9/42
C
211
0
P
Y
DEPARTMENT OF STATE
WASHINGTON
April 20, 1942
In reply refer to
FF 740.00112 European
War/5249
The Secretary of State presents his compliments to
the Honorable the Secretary of the Treasury and trans-
mits copies of paraphrases of two telegrams, no. 1259,
April 13, 1942, 11 p.m., from the American Embassy at
Rio de Janeiro, and no. 844, April 1, 1942, midnight,
to the American Embassy at Rio de Janeiro, concerning
the release of funds to Martinique in the amount of
$150,000 a month.
Enclosures:
1. Copies of paraphrase of
telegram no. 1259 from
American Embassy,
Rio de Janeiro, April 13,
1942.
2. Copies of paraphrase of
telegram no. 844 to
American Embassy,
Rio de Janeiro, April 1,
1942.
Copy:bj:4-21-42
Regraded Unclassified
212
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
AMEMBASSY, Rio de Janeiro.
TO
Secretary of State, Washington.
DATED:
April 13, 1942, 11 p.m.
NUMBER:
1259
Reference telegram 844, April 1, midnight, from the
Department.
The Bank of Brazil's written acceptance of the
conditions which the Treasury Department prescribed has
been received by the Embassy. The French Commercial
Attache has also accepted the conditions. Despetch by
airmail.
CAFFERY
Copy:bj:4-21-42
213
PARAPHRASE OF TELEGRAM SENT
TO:
AMEMBASSY, Rio de Janeiro
FROM:
Secretary of State, Washington
DATE:
April 1, 1942, Midnight
NUMBER: 844
Reference is made to telegram 925, March 18, 3 p.m.,
from the Embassy at Rio de Janeiro.
The Treasury Department under the monthly license
for release of funds to Martinique is prepared to permit under
the following conditions the transfer of $150,000 monthly
to Brazil:
1. The Bank of Brazil should acquire the dollar
amount of the remittance and credit the milreis equivalent
thereof to an account with the Bank of Brazil in the name
of the Commercial Attache of France (or some other accept-
able designation).
2. The French Commercial Attache should clear in
advance with the American Commercial Attache all payments
from such an account.
3. The Bank of Brazil should have access to the French
Commercial Attache's records of the account for the
American Commercial Attache's inspection.
If these conditions are acceptable to the French
Commercial Attache and to the Bank of Brazil, please
telegraph.
WELLES
Acting
Regraded Unclassified
214
INCOMING CABLEGRAM
Date: April 20, 1942
From: Caracas
Federal Reserve Bank of New York
#6
We are remitting approximately $4,000,000 for our
credit. After reception of remittance buy for our account
$4,000,000 in gold debiting our account plus charges, gold
to be earmarked and left with you for our account. This
gold is to strengthen our gold reserves. Cable execution.
Banco Central de Venezuela
(Received by telephone from Federal Reserve Bank of New York,
New York, 3:30 p.m., April 21, 1942)
lc
C
0
P
215
Y
DEPARTMENT OF STATE
WASHINGTON
In reply refer to
April 20, 1942
FD
The Secretary of State presents his compliments to
the Honorable the Secretary of the Treasury and encloses
copies of telegram No. 431, dated April 18, 1942, from
the American Embassy, Chungking, China, reporting that
the Ministry of Finance has put into circulation a
quantity of customs gold unit notes.
Enclosure:
From Embassy, Chungking,
No. 431, April 18, 1942.
eh:copy
4-20-42
Regraded Unclassified
C
O
216
P
Y
HRL
Chungking via N. R.
This telegram must be
paraphrased before being
Dated April 18, 1942
communicated to anyone
other than a Governmental
Rec'd 3:38 p.m.
agency. (BR)
Secretary of State,
Washington.
431, April 18, 1 p.m.
Ministry of Finance has put into circulation
& quantity of customs gold unit notes. In order to
give these notes a face value equivalent to one American
dollar (or 20 Chinese fapi dollars) the gold content of the
customs unit has been raised and customs duty schedules are
being lowered in proportion. The gold unit value of the notes is
approximately 100 million making the fapi value 2 billion.
GAUSS
JRL
ehicopy
4-20-42
Regraded Unclassified
217
C
0
P
Y
APR 20 1942
Cable received by Chase National Bank from Guayaquil
office of the Banco Central del Ecuador.
By order of and for account of Quito head office
buy 50,000 ounces troy gold and earmark in Federal
Reserve Bank and continue buying and earmarking up
to a limit of 50,000 ounces more as our funds may
permit. Wire execution.
Copy:1c:4/21/42
Dearaded
C
0
218
P
Y
For. Accts. Div.
April 20, 1942
Banco Central del Ecuador
quito
1
Understand your Guayquil office has requested Chase National
Bank to arrange for the purchase of up to 100,000 ounces of
gold to be earmarked with us in your name STOP We shall be
pleased to apply to our Treasury Department for license to
acquire such gold on your behalf on receipt of confirmation
from you by cable that you require the gold for the purpose
of strengthening your gold reserve STOP We believe such ap-
plication would receive favorable consideration STOP With re-
gard to the earmarking of this gold by us for your account
Please confirm by tested cable that you have signed and are
returning to us the copy of our revised letter of terms and
conditions dated December 1, 1937, whereupon we shall be
pleased to apply to our Board of Directors for its approval
STOP For further details refer our letter June 20, 1941
FEDERAL RESERVE BANK OF NEW YORK
Copy:vw:4-21-42
DEPARTMENT OF STATE
219
WASHINGTON
In reply refer to
April 20, 1942
FD 861.51/2953
The Secretary of State presents his compliments
to the Honorable the Secretary of the Treasury and encloses
copies of telegram no. 318, dated April 18, 1942, from the
American Embassy, Kuibyshev (Moscow), Union of Soviet Socialist
Republics, concerning an announcement by the Soviet press that the
1942 National Defense Loan vas over-subscribed within two days.
Enclosure:
From Embassy, Kuibyshev,
no. 318, April 18, 1942.
eh:copy
4-20-42
Regraded Unclassified
C
0
P
220
Y
(Moscow)
KD
Kuibyshev
This telegram must be
paraphrased before being
Dated April 18, 1942
communicated to anyone
other than a Governmental
Rec'd. 1:54 p.m.
agency. (BR)
Secretary of State,
Washington.
318, April 18, 3 p.m.
Reference Embassy's 316, April 15, the Soviet
press of April 17 publishes an announcement that the 1942
National Defense Loan was over-subscribed within two days. Former
loans have usually required from one to four weeks until fully
subscribed.
Repeated to Moscow.
REINHARDT
HPD
eh:copy
4-20-42
Doaraded
TREASURY DEPARTMENT
221
INTER-OFFICE COMMUNICATION
-
DATE April 20, 1942
TO
Secretary Morgenthau
FROM Mr. Dietrich
CONFIDENTIAL
Registered sterling transactions of the reporting banks were as follows:
Sold to commercial concerns
£59,000
Purchased from commercial concerns
£61,000
Open market sterling remained at 4.03-3/4, and there were no reported
transactions.
In New York, closing quotations for the foreign currencies listed below
were as follows:
Canadian dollar
12-5/8%
Argentine peso (free)
.2370
Brazilian milrois (free)
.0516
Colombien peso
-5775
Mexican peso
.2064
Uruguayan peso (free)
.5295
Venezuelan bolivar
.2865
Cuban peso
1/4% premium
We sold $4,988,000 in gold to the Central Bank of the Argentine Republic,
which was added to its earmarked account.
The Federal Reserve Bank of New York reported that the Bank of Canada was
making two shipments of gold with 8. total value of $5,212,000 from Canada to the
Federal for account of the Government of Canada, for sale to the New York Assay
Office.
In London, spot and forward silver remained at 23-1/2d, equivalent to 42.674.
The Treasury's purchase price for foreign silver was unchanged at 35#.
Handy and Harman's settlement price for foreign silver was also unchanged at
35-1/8#.
We made no purchases of silver today.
A
Regraded Unclassified
222
Copy No. 13
BRITISH MOST SECRET
(U.S. SECRET)
OPTEL No. 129
Information received up to 7 A.M., 20th April, 1942.
1, NAVAL
Another ship in homeward Russian convoy has been sunk
by enemy action, making four altogether.
2, MILITARY
BURMA. IRRAWADDY FRONT. By midday 17th road blocks
mentioned yesterday had been cleared by our armoured forces and a heavy
A.A. battery which had been overrun was relieved. Fighting is continuing.
Demolitions at YENANGYAUNG were completed successfully.
3. AIR OPERATIONS
WESTERN FRONT. 19th/20th. 65 seamines were laid,
Two aircraft are missing.
MALTA. Between noon 18th and 2 P.M. 19th about 200
bembers, escorted by fighters, attacked. Damage was caused to buildings
at GRAND HARBOUR and at KALFRANA aerodrome. A.A. destroyed three
bembers, probably destroyed three more and damaged five.
Regraded Unclassified
223
INFORMATION DISCORPATION OFFICE FORMATIC DIFFERENT
UNITED STATES GOVERNMENT
COORDINATOR OF INFORMATION
WASHINGTON, D. c.
SECRET
COORDINATOR
April 20, 1942
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
Dear Henry:
The attached is a summary of the
weekly French directive of the British
Political Warfare Executive.
Sincerely,
Bree
William J. Donovan
Attachment
223
UNITED STATES GOVERNMENT
INFORMATION ORIGINAL
COORDINATOR OF INFORMATION
WASHINGTON, D. c.
SECRET
COORDINATOR
April 20, 1942
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
Dear Henry:
The attached is a summary of the
weekly French directive of the British
Political Warfare Executive.
Sincerely,
Bree
William J. Donovan
Attachment
224
SECRET
- INFORMATION
1. Fundamental Objectives.
a. To hinder use of French economic resources
by the enemy and to demoralize the German civil and military
forces of occupation.
b. To convince the French people, especially
those in the unoccupied zone that the Vichy Government cannot
be considered an independent sovereign power representing
France itself. The Germans foster its existence because
they know they can make it do what they want in the last resort.
2. Problems. It must be bornein mind: First.
With the return of Laval the end of the Vichy regime as we
have known it seems apparent.
a. Laval will probably go slowly, at the
beginning refraining from such startling concessions to
Germany as handing over the French fleet or Mediterranean bases
b. At the start he will probably concentrate
most of his attention on improving the French internal
situation liquidating his most dangerous opponents in some
way or other and strengthening police precautions.
c. We may expect him to obtain some German con-
cessions to cover his activities on their behalf. He may well
obtain some relief of occupation costs and the return or
conditional release of some prisoners, in order to show the
relations between France and Germany in a new light.
d. Laval will not want necessarily to sever
diplomatic relations with America. Bear in mind that he
considers he is popular in America. ite has family connections
in America. Keeping France quiet during the spring compaigns
and putting French economic resources and manpower at
Germany's service is his immediate business.
e. Though lacking any sense of financial or
political morality, nevertheless Laval brings to his task great
skill in political maneuver and negotiation and great
experience. His profound conviction that he is more than a
match for anybody is his principal weakness. As a result
he is a bad judge of public opinion.
Regraded Unclassified
225
-2-
SECRET
f. Laval is fully aware that the new regime
is against French public opinion. Therefore, he is ready
to override public opinion, but will do utmost to avoid clash.
g. Daval is preferred to Darlan by the
Germans, because Darlan's usefiness as a politician has been
outlived.
Second. Strong measures to insure public order
in Paris have been taken by Germany. Von Waldeck's presence,
not yet confirmed, is an indication that strong repressive
measures' will be taken to keep Paris quiet if necessary.
Third. The wheat sitation in France is
becoming extremely serious. One of the main points of
Vichy propaganda has been to persuade the peasants to hand
over their wheat stocks.
3. Personalities.
Petain. He should still not be attacked directly.
He has been completely out-maneuvered and too weak to resist.
He no longer controls France.
Laval. The name Laval should as far as possible
take the place of the name of Vichy, which should be named
"the government of waval." The distinction between wavel
and the French people should be deepened.
Darlan. Despite nis concessions he has failed
to pacify France's German masters. Do not assume that he
desires to hand over the French fleet to the Germans.
Dents. The man who surrendered Paris, tried
to surrender Vichy and then did not hesitate to shed Allied
and French blood for the Germans.
Pecheu. He has been out-mansuvered in his bid
for power by police control by Laval. Do not spare Pecheu
insofar as he invented the present French police system
which has suppressed and muzzled the French people.
Deat. Used by Laval as the apostle of the
German new order in France. Is not corrupt or venal but a
Nazi and pro-German of conviction.
Regraded Unclassified
226
SECRET
un IMPORTATION
-3-
Doriot. Would-be leader of Nazified France.
The man who wore the swastika and the German uniform.
Benoist-Mechin. Treat with contempt as the
creature of the Germans and the lackey of Laval.
4. France and Vichy. Toward the situation our
attitude must to a large extent be governed by that of
the American government. Do not anticipate on any account
what these reactions may be. Press comment of America
should be used to the full. Bear in mind that to resist
Laval's accession is a challenge.
5. French merchant marine. With the advent of
Laval, Germany's plan for the exploitation of the French
merchant fleet with the hope of provoking a major clash
between the French and British fleets now becomes more
dangerous than any time before.
Regraded Unclassified
227
UNITED STATES GOVERNMENT
COORDINATOR OF INFORMATION
SECRE
WASHINGTON, D.C.
COORDINATOR OF INFORMATION
April 20, 1942
The Honorable
The Secretary of the Treasury
Washington, D. C.
Dear Henry:
The attached is from the British Political
Warfare Executive German Weekly Directive.
Sincerely,
Bill
William J. Donovan
Regraded Unclassified
228
SECRET
OF
German home front appreciation:
a. German home propaganda.
German mind has been centered on potatoes, ration,
call-up and RAF offensive, since once again there is nothing
but expectation in Russia and remote Far Eastern news to re-
lieve tension. Appearing now are the first real evidences of
the moral effect of the bombings. Their major worry is the
ration cut and potato shortage, explanations of which are
continuing. German propaganda, true to its tradition of at-
tack, is trying to divert attention from man power crisis by
attacks on "Forms of Bureaucracy".
b. Treatment of news.
In the coming offensive, delayed only by thaw, con-
fident expectation is expressed. The Malta raids are em-
phasized. Stress on Cripps failure in India. The Mediterra-
nean is still important. Shipping sinkings are even more im-
portant. Emphasis on "discomfiture of megalomanica Roosevelt"
is another important line.
Strategy points:
a. General picture.
Our picture, once again, is of Germany preparing last
effort to break out of Anglo-Russian net. Russia and Britain
share the chief responisibility for strategy against Germany,
and America is responsible for that against Japan.
b. Malta and Mediterranean remain serious major diversion
In describing Britains part in Anglo-Russian strategy, stress
that Northern route is now such a menace that Hitler has been
forced to organize major Air-Naval effort to try to interrupt
it.
C. Wherever possible, German manpower crisis should be
repeated in the news.
d. Commandos and RAF are holding down men and equipment
Regraded Unclassified
- 2 -
229
vitally needed in Russia. The RAF offensive is systematic
attack on German war machine, both inside and outside Reich.
e. Use the French crisis to illustrate:
1. Shortage of manpower.
2. Germany's fear of intervention in the west.
As part of combined strategy designed to push Ger-
many's manpower crisis, resistance in occupied territories
should be angled. We can now leave the 1917 and use the 1918
Spring parallel.
Naval points:
a. Indicate forthcoming action in the Baltic and the
Black Sea, by the Russians.
b. Reiterate that German subs have been frightened off
the vital Atlantic routes between America and Britain and be-
tween S. Africa and Britain.
Military points:
a. Libya. Rommel is faced with a time problem.
b. Yugoslavia. Diversion of German Allied forces should
be stressed.
c. Russia. Local Russian attacks preventing necessary
German withdrawals, mud notwithstanding.
Talks and features.
Stop all good-humored, easy stuff and generalities
about heroism, freedom etc. and present information toughly.
Our talks should be suited to the severity of internal German
tension.
Regraded Unclassified
230
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE April 20, 1942
TO
Secretary Morgenthau
FROM
Mr. Kamarok
Subject: Summary of Military Reports
R.A.F. Activity
(The magnitude of the R.A.F. deylight sweeps over western
Europe is the greatest of the war. On April 17, the high point
was reached with 650 fighters on offensive patrol over northern
France, thirty Douglas bombers and eight Hurricane bombers
attacking French tergets, and twelve Lancaster bombers sent to
bomb Augsburg.
The Lancaster bombers have finally been unveiled. Their
performance seems noteworthy: their speed 18 high enough to
risk daylight bombing, yet each plane carried over two tone of
bombs 500 miles into Germany and then dropped them, practically
from roof-top level.)
(U.K. Operations Reports, April 16,17,18,19, 1942)
Italian Armed Forces
After a long period of inactivity, Italian bombers have
recently taken part again in offensive operations in the Mediter-
ranean. Up to the 1st of April, the attacks on Malta were carried
out exclusively by German planes. Since the lat of April, Italian
bombers have joined in the attacks. The renewal of Italian
activity 18 believed to be partly due to popular dissatisfaction
in Italy at the inactivity of the Italian air force, and partly
due to German pressure to relieve the strain on the German bomber
force during the present intensive attack on Malta.
(U.K. Operations Report, April 17, 1942)
According to a recently compiled list, since the start of
the war, Italy has lost 44 percent of her merchant shipping:
half of her submarines; more than one-third of her destroyers;
one-third of her light cruisers and five out of seven heavy
cruisers. Of the five Italian battleships, it is believed that
the two newest are undergoing repairs, while the three in service
were all constructed prior to World War I.
(c.o.I., "The War This Week", April 9 - 16, 1942)
Regraded Unclassified
- 2 -
231
Far East
A. Japanese Air Force
The Japanese are estimated to have 700 planes in Burma and
the Bay of Bengal and 650 in the New Guines area (1.e., a good
third of the Japanese air force is accounted for in these two
areas.)
(C.O.I., "The War This Week", April 9 - - 16, 1942)
B. Weather in Burma
The weather in Burma will not be 8.6 important 8 factor in
the fighting 88 the newspapers have been playing it up to be.
The heavy monsoon rains generally do not come until around the
end of May. In any case, the fighting has moved out of the worse
rain belt. The rain will probably be heavy enough to impose some
hindrances on the fighting but not enough to cause R. cessation
of military operations.
(C.O.I., "The War This Week", April 9 - 16, 1942)
Voice of the Chief
The "Chief" exposes & graft intrigue which has thus far
prevented introduction of improved oxygen breathing apparatus in
the Luftwaffe.
"For the third time, Chief Engineer Luchs of the German
General Staff has rejected the new oxygen breathing apperatua
invented by First Lieut. of Engineers Hensken, despite its
approval by the Department for Laboratory Tests. Teste have
proven that the Hensken equipment has much more stability against
hits from fire arms, whereas the old Draeger containers will
explode under the impact of the smallest splinter.
"Herr Luchs pretends that the difference in performance is
not great enough to warrant mass production of the new containers.
His real motive 1s, however, his silent partnership in the
Draeger Works Limited at Luebeck.
"In a Hensken container, an explosion is as good 88 1m-
possible. Nevertheless, the equipment contains just 8.8. much
oxygen and is only 10 percent heavier than the Draeger container.
But that 1e not enough to break the Draeger monopoly: For the
ties between the Commune heads who profit from this war are iron-
clad."
(Federal Communications Commission, April 15, 1942)
Regraded Unclassified
232
TREASURY DEPARTMENT
Washington
FOR RELEASE, MORNING NEWSPAPERS,
Press Service
Tuesday, April 21, 1942.
No. 31-25
4/20/42
The Secretary of the Treasury announced last evening that
the tenders for $150,000,000, or thereabouts, of 91-day Treasury
bills, to be dated April 22 and to mature July 22, 1942, which
were offered on April 17, were opened at the Federal Reserve Banks
on April 20.
The details of this issue are as follows:
Total applied for - $332,677,000
Total accepted - 150,058,000
Range of accepted bids:
High - 99.960 Equivalent rate approximately If 0.158 percent #
Low - 99.914
If
if
0.340
Average
Price - 99.920
n
Il
If
0.317
#
(85 percent of the amount bid for at the low price was accepted).
-000-
233
April 21, 1942
9:11 a.m.
HMJr:
Hello, Harry.
Harry
Hopkins:
Hello, Henry.
HMJr:
How are you feeling?
H:
Oh, I'm feeling pretty good. I went to bed
at nine o'clock.
HMJr:
You did.
H:
I feel pretty good.
HMJr:
Well, you certainly - I certainly take my
hat off to you.
H:
I really think I'm - these doctors have got
hold of something with me now.
HMJr:
You mean they've got a new wrinkle?
H:
I think so. I think the last time I went to
the hospital they got a combination of stuff
for me that may do the business.
HMJr:
Well, that'll be marvelous.
H:
I'm very hopeful of it.
HMJr:
Well, anybody - I couldn't take what you took
the last two weeks.
H:
Well, it wasn't as bad as it sounded.
HMJr:
Yeah. Harry, did you and the President talk
over about this broadcast?
H:
No, I haven't, Henry.
HMJr:
Oh.
H:
He sounded the other day on the train - you
know, he usually - he must have something in
234
- 2 -
his mind.
HMJr:
Well, let's forget it.
H:
He'd have said "yes" right there.
HMJr:
Well, let's forget about it.
H:
I'd love to do it for you, you know.
HMJr:
But - I mean, it isn't
H:
It ien't that important. I can do it some
other time.
HMJr:
Well, I mean there are some other - we - I've
got all of my speakers. It isn't as though -
but some other time, maybe you'd go on alone.
H:
Yeah. Sure.
HMJr:
What?
H:
Sure.
HMJr:
Would you do that?
H:
Oh, of course.
HMJr:
Well, if you'd do that, then very soon I'd
love to have you go on. Any time, I mean,
that - let you go on alone, and we'll
H:
All right, Henry.
HMJr:
What?
H:
I'd love to do it.
HMJr:
Okay.
H:
All right, old boy.
HMJr:
Thank you.
H:
Good-bye, Henry.
HMJr:
Good-bye.
Regraded Unclassified
235
April 21, 1942
9:13 a.m.
HMJr:
Hello.
Operator: Mr. Callahan.
Vincent
Callahan:
Good morning, sir.
HMJr:
Good morning, Vince. Vince, what would you
think if we had a guest star on Thursday
night in this Lieutenant O'Hare.
C:
For a minute or two?
HMJr:
Yeah.
C:
I think it would be very good, sir.
HMJr:
Well, I'd give him three minutes anyway.
C:
Well, what I meant was two or three minutes,
something like that.
HMJr:
Well, would you take it up with the Navy?
C:
Yes, sir. Mr. Gilchrist has a date with him
at twelve o'clock today - with O'Hare.
HMJr:
Oh, has he?.
C:
On the Treasury Star Parade.
HMJr:
Oh, well I - oh, I didn't know that. Well,
when I want him 1s for Thursday night.
C:
Well, he could do both.
HMJr:
Why not?
C:
It would be a very good idea.
HMJr:
I think it kind of peps it up.
C:
I think it would be swell. It will be the
first time he's on, too.
HMJr:
Yeah. Well, I'd - the President evidently
Regraded Unclassified
236
- 2 -
is giving him a medal today.
C:
Uh huh.
HMJr:
And whatever music is going to be played
Thursday night, I'd like it submitted to
me.
C:
Well, I think there'll only be about two
numbers - one at the opening, and probably
one at the close, but the
HMJr:
Well, I thought one in the middle.
C:
All right. Have you any ideas?
HMJr:
Yeah.
C:
All rightie.
HMJr:
At the end, I want "The Star Spangled Banner".
C:
All rightie, fine.
HMJr:
And I thought at the beginning - what would
you think of "Over There"? The Yanks are
coming.
C:
Uh huh.
HMJr:
What?
C:
Very good.
HMJr:
And
C:
"Over There".
HMJr:
What?
C:
I'm just telling Mr. Gilchrist, who's sitting
here, to take it down.
HMJr:
Yeah. I tell you, what you might do is this
way. Put it this way. Let's open up with
"Stare and Stripes Forever"
.....
C:
All right.
Regraded Unclassified
237
- 3 -
HMJr:
which 18 one of my favorite bands.
C:
All right.
HMJr:
And then if we have O'Here
C:
All right.
HMJr:
after O'Hare, we could play "Over There",
the Yanks are coming. It would be very appropri-
ate.
C:
Very good.
HMJr:
What?
C:
I think it's very good.
HMJr:
I mean we could have O'Hare, and then give
them a little music right afterwards.
C:
That'll be swell.
HMJr:
See?
C:
Yes, sir.
HMJr:
And, as I say, I like "Stars and Stripes
Forever". The Marine band would do it swell,
and they can finish with "The Star Spangled
Banner".
C:
I think it would be swell. Now, we're pretty
well lined up on the Thursday night.
HMJr:
Well, I wrote you a whole series of memos
this morning on my machine, which will be
over to you in about a half an hour.
C:
All rightie, fine.
HMJr:
Okay.
C:
Now I just wanted to tell you this. Everyone
will be there except Mr. Murray
.....
HMJr:
Yeah.
238
- 4 -
C:
who's getting a degree in Philadelphia,
and we're picking him up there.
HMJr:
Fine.
C:
Mr. Hawkes is in the hospital, and Mr. Leary
will substitute for him.
HMJr:
I don't know - who's Hawkes?
C:
He's Chamber of Commerce.
HMJr:
Right. Well, you'll get my suggestions, and
you can let me know.
C:
All right, sir.
HMJr:
Thank you.
C:
Okay. Thanks.
239
April 21, 1942
9:17 a.m.
HMJr:
Hello.
Secretary
Stimson:
Hello, Henry.
HMJr:
Good morning.
S:
Good morning. I have before me a proposal
about this eystem of getting - urging men
in the Department, or people in the Depart-
ment to buy bonds.
HMJr:
Yes, sir.
S:
And also a proposed statement by me and by
somebody else to say that I'm doing it myself
and 80 on.
HMJr:
Yeah.
S:
And therefore they should do it.
HMJr:
Yeah.
S:
Frankly, Henry, I don't like it that way. Now,
I mean it rather outs me in a false position.
HMJr:
I see.
S:
I've gone ahead - I've bought $50,000 of those
bonds some time ago.
HMJr:
Yeah.
S:
I'll buy any more that you want me to
HMJr:
Yeah.
S:
that I can afford.
HMJr:
Yeah.
S:
But you see, when you make me say that to the
men here, they at once would feel that, "Why,
that ien't anything for him to do, because his
240
- 2 -
salary 1e larger than mine."
HMJr:
Well
S:
And it may be - it's a big sacrifice to me.
HMJr:
Well, Henry, I haven't - I don't - I per-
sonally don't see what they write, BO I don't
know what they gave you.
S:
Yes.
HMJr:
I mean, I
S:
I've got it right here. I mean, they out it
a straight, flat thing that
HMJr:
Well, I haven't seen it.
S:
by saying that the War Department has
inaugurated the olan whereby all men can pur-
chase bonds by authorized deductions from
their pay, and they suggest, I think, ten
per cent - something like that.
HMJr:
Well, frankly I
S:
And I'm happy to
HMJr:
Could I say this?
S:
Yes.
HMJr:
Yes. Two things. In the first place, 1 haven't
seen it; and in the second place, what your own
good, common sense and judgment tells you will
be entirely agreeable to me.
S:
Well, I don't like to be in the position of
imposing or - I mean, or not helping out.
HMJr:
No, no.
S:
You understand me.
HMJr:
No, I appreciate that. Well, any way you want
to do it, I'll be delighted. See?
Regraded Unclassified
241
- 3 -
S:
Yeah.
HMJr:
Hello.
S:
Yes.
HMJr:
Any way that you think is good taste and
proper, 18 satisfactory to me.
S:
Well, I'll think it over and look it over and
see if there's - what - I haven't talked with
the man who, the finance officer, who represents
me yet. This 1s
HMJr:
Somebody in your own office may have written
it. I don't know.
S:
Very likely, very likely.
HMJr:
What?
S:
Very likely it was.
HMJr:
I mean, I don't know whether the Treasury
S:
What I - but I wanted to go right to you be-
cause I don't want you to misunderstand me.
HMJr:
Well, I appreciate that; but anything that
your conscience tells you is the right way
to do it, will be more than satisfactory to
me.
S:
All right. I'll see what we can do.
HMJr:
Now, while I've got you on the wire
S:
Yeah.
HMJr:
your Department and ours and the rest
have been horse-trading on this aid to Britain
money, and McCloy was over here yesterday.
Hello.
S:
Has been doing what on it?
HMJr:
Horse-trading.
S:
Frustrating?
Regraded Unclassified
242
- 4 -
HMJr:
Yeah. Ever heard that word?
S:
Frustrate?
HMJr:
Horse-trading.
S:
Oh, horse-trading.
HMJr:
Yes.
S:
(Laughs)
HMJr:
I don't know whether
S:
I thought you said
HMJr:
I don't know when you were the leading member
of the
8:
Oh, Lord, I've never been a very good horse-
trader myself, but I've been in the Job of
being swindled by others.
HMJr:
(Laughs) Touche.
S:
(Laughs)
HMJr:
Well, believe me, I told McCloy yesterday
when he came over we were moving in such fast
company, I sent my pocket-book out.
S:
(Laughs) That's why - I mean, I feel I'm 80
bad that I send a man along like McOloy.
HMJr:
Well, he's damned good. Well, he's got a
proposal, and all I'm asking 18 - he's
recommending it now
S:
Well, I don't know what it's all about. What
1e it about, really?
HMJr:
Well, it's - he'll give you the story, but
all I'm asking 18, I hope you'll say yes today.
This has been going on almost a year.
S:
Well
HMJr:
McCloy will exolain it. . After all, in the
Regraded Unclassified
243
- 5 -
letter you wrote me, you told me that if I
didn't understand it, I'd have to get McCloy.
S:
(Laughs)
HMJr:
That was wonderful.
S:
(Laughs) I begin to remember that I out some
such sassy expression in a letter to you, but
I'd forgotten what it was about.
HMJr:
Well, it was a four-page letter, that would
take 2 Philadelphia lawyer to understand it.
At the bottom of it, you said
S:
I'm sure it wasn't written by me.
HMJr:
So I gathered.
S:
Wasn't dictated by me.
HMJr:
So I give you back McCloy to explain it.
S:
All right, I'll fix him up.
HMJr:
It'll cost you about two hundred million
dollars.
S:
(Laughs) For him to explain it?
HMJr:
Yeah.
S:
(Laughe) Well
HMJr:
He's a high-priced man.
S:
Well, what do you - no, what do you really
mean? Is it the adjustment of
HMJr:
It's an adjustment about these planes you
took away from England.
S:
Oh, now it comes back to me, yes. Now I
remember. You mean
HMJr:
You grabbed
Regraded Unclassified
244
- 6 -
S:
about American dollars.
HMJr:
Yeah. You grabbed a lot of planes, and
S:
(Laughs) That's a good phrase, that's a
good phrase.
HMJr:
And up to now you haven't paid for them.
S:
(Laughe) Well
HMJr:
But I give you back McCloy. He will explain
it.
S:
(Laughs) Well - but as I remember it there,
the point was that you were such a - your
Department
HMJr:
Yeah.
S:
was such a good Philadelohia lawyer for
my British friends
HMJr:
Yeah.
S:
that you not only - that they not only
wanted the planes, but they wanted the same
amount in dollars as well as the planes.
HMJr:
Well, now I think it's gotten down to - you've
got the planes, and all I want to get them 1s
the dollars.
S:
Well, as I understood it, we had neither -
neither the planes nor, if you were lucky,
the dollars.
HMJr:
Well, I think you gave the planes to the
Russians, but that's something else.
S:
(Laughe) I know. All right. I've
HMJr:
There's such a thing as - have you ever been
to a county fair where they have such B. thing
called the shell game?
S:
I have.
Regraded Unclassified
245
- 7 -
HMJr:
Well, this - well, I'm trying to find the pea
under the shell.
8:
(Laughs) Well, I felt very much like the rube
myself, when I thought that I was the fellow
that was trying to follow the pea.
HMJr:
(Laughs) Well, I think it's the - the War
Department
S:
The only thing that I know 18 that everybody
else is getting the planes, and at the same
time we're shelling out the dollars.
HMJr:
Yeah. Well, McCloy seemed entirely satis-
fied yesterday; and he said he'd present it
with a recommendation for action.
8:
Well, if he does that, why it'll probably go
through.
HMJr:
Okay. Thank you.
S:
All right.
HMJr:
Good-bye.
Regraded Unclassified
246
April 21, 1942
9:39 a.m.
HMJr:
Hello.
Operator:
Mr. Henderson.
HMJr:
Hello.
Operator:
Go ahead.
HMJr:
Leon.
Leon
Henderson: Yes, Henry.
HMJr:
I was playing with the radio last night
about ten minutes of ten, and I turned in
and I got your program.
H:
My program?
HMJr:
Yeah.
H:
Which one was that?
HMJr:
Well, it was a program they said sponsored
by your office on inflation, and it was
wonderful. One of the best programs I ever
heard.
H:
Hmm.
HMJr:
You don't even know about it.
H:
Wait a minute. They shifted some from the
twenty-third - that's right.
HMJr:
They had a wonderful actor. I forget the
man's name. He was a
H:
They were just talking - was that the one
where they just sat around and talked about
what it meant?
HMJr:
Well, about how the dollar was going down
ten cents every month and how much it cost.
I mean sitting around in a little
247
- 2 -
H:
Yeah.
HMJr:
.....
town. Yeah.
H:
That's right. Well, we had to rearrange
on account of the President's schedule, and
I thought that was going on the twenty-third.
HMJr:
Well, it was one of the best I ever heard.
Now, who does that for you?
H:
Well, Bob Horton has a group that work - of
radio people - that work with my publicity
man.
HMJr:
Yeah. Well, it was a.s good a one as I've
ever heard.
H:
Well, I'm very gratefully encouraged.
HMJr:
Yeah. I thought you'd like to know it.
H:
All right, Henry.
HMJr:
I hope you do more like it.
H:
Well, we've got some more coming along.
HMJr:
Okay.
H:
All right, Henry.
HMJr:
Good-bye.
00 - Mr. Graves
P.
248
April 21, 1942
9:56 a.m.
HMJr:
Hello.
Allan
Sproul:
Hello, Mr. Secretary.
HMJr:
How are you?
S:
Fine.
HMJr:
Allan, I got that - something to ask of you
and the group of bankers that signed that
manifesto.
8:
Right.
HMJr:
As you see, we're getting ready for a real
drive on our War Bonds.
S:
Yeah.
HMJr:
And Harold Graves and Ted Gamble are coming
up to New York tomorrow, and they want to
test out some ideas that they've worked up
on how to deliver these bonds into the hande
of the people. You see?
S:
Uh huh.
HMJr:
And they want to sit down and talk with the
bankers about it, see?
8:
Yeah.
HMJr:
Now do you suopose you could get that group
together 80 that Harold Graves and Gamble
could meet them?
S:
I think 80.
HMJr:
They've also wired for B. M. Edwards.
S:
What time will they be here? What time would
they want to meet?
HMJr:
They'll be up there in the morning. I'll
Regraded Unclassified
249
- 2 -
leave the time to you.
S:
Well, I'll see what time I can.....
HMJr:
See what time you can get them. It'll be
Graves, and Gamble, and B. M. Edwards.
S:
Yeah.
HMJr:
And will you let - communicate directly with
Graves?
S:
Yes, I will.
HMJr:
Okay.
S:
That's tomorrow.
HMJr:
Yes, sir.
S:
All right. We'll do that.
HMJr:
I thank you.
S:
All right.
HMJr:
Good-bye.
S:
Good-bye.
250
April 21, 1942
10:50 a.m.
HMJr:
Hello.
Operator:
Mr. Callahan.
HMJr:
Hello.
Vincent
Callahan:
Yes, sir.
HMJr:
Vince, I got your memo. It's all okay,
except what you want to do with our county
chairmen.
C:
Yes.
HMJr:
Now, if the Department of Agriculture can
send telegrams to their war committees,
which is a county committee
C:
Yes.
HMJr:
we certainly can send night letters to
our county chairmen, and I'm very anxious to
pep them up, you see?
C:
All right, sir.
HMJr:
So let's - if the Department of Agriculture
can do it, we can do it.
C:
All right, sir.
HMJr:
Now I'd like telegrams to go to our county
committees.
C:
We'll send them out.
HMJr:
You can use night letters.
C:
Yeah, that's what we'll do.
HMJr:
What?
C:
We'll take care of it.
HMJr:
Just keep it in mind, we've got to build up
Regraded Unclassified
251
- 2 -
these county committees.
C:
Well, I'm absolutely with you on it, and
we're working on, you know, the volunteer
publicity thing.
HMJr:
Righto.
C:
I mean, that's more important than anything
we do in Washington.
HMJr:
Well, it's important. Let's out it that way.
C:
(Laughs) All right.
HMJr:
Why, Vince, how could anything be more 1m-
portant than what we do in Washington?
C:
Yes, sir.
HMJr:
Yes.
C:
The boys out in the fields are the ones who
have to buy the bonds, not us.
HMJr:
Right. Okay.
C:
Okay, sir.
CC - Dr. White
252
April 21, 1942
11:40 a.m.
John J.
McCloy:
Hello.
HMJr:
How's the McCloy?
Mc:
How are you?
HMJr:
I'm okay.
Mc:
First on - I've got Clear and Brink - Colonel
Clear and Colonel Brink coming over at three
o'clock tomorrow afternoon.
HMJr:
Just a. minute. Clear and Brink. Well, that's
wonderful.
Mc:
Yeah. Brink's been around more than Clear
has, as a matter of fact, although Clear has
a more intimate account of what went on at
Bataan.
HMJr:
What's Brink's title?
Mc:
Colonel.
HMJr:
They're both Colonels.
Mc:
They're both Colonels, and both very good
men.
HMJr:
They won't kill each other off?
Me:
No, they won't. They won't. You mustn't
mind how Brink looks, because he just came
ashore and he hasn't any clothes.
HMJr:
Sure.
Mo:
All right.
HMJr:
Yeah.
Me:
Two. On the ourchase of the planes
HMJr:
Yeah.
Mc:
.....I
think I've cleared that this morning,
Regraded Unclassified
253
CV 1 I
and I think we can probably complete that
transaction within a very short time, say,
twenty-four or thirty-six hours.
HMJr:
Wonderful.
Me:
Now, somebody over at your shop has to tell us
how that check should be drawn out or how you
want it set up. Who do we pay, and what is the
mechanics in order to serve its most useful
purpose so far as you're concerned.
HMJr:
Well
Mc:
Had we better talk to Frederick Phillips?
HMJr:
I think - yes. Yes.
Me:
Uh huh.
HMJr:
Phillips, and White, in my place.
Me:
All right.
HMJr:
I'll tell White to get on it, but I think that
if you asked Phillips how he wants it
Mc:
All right.
HMJr:
Yeah.
Mc:
All right. Now, so much for that; that's been
cleared. I've got that clear all along the
line, and we can go ahead and they assure me
that they can do it immediately, for all
practical ourposes.
HMJr:
I hereby make you 8 Knight of the Garter.
Me:
No, all I'll do is bring out the old leather
and dust it off
HMJr:
Did you hear what I said?
Me:
and put it back in the file again.
HMJr:
I make you a Knight of the Garter.
Regraded Unclassified
254
- 3 -
Mc:
Knight of the Garter.
HMJr:
Yeah.
Mo:
(Laughs) Now, wait. Now, the next ones I was
Just talking to Mr. Stimson.
HMJr:
Yeah.
Me:
And he said that he'd had a conversation with
you this morning about it. I had a little more
HMJr:
Well, he called me up himself on another matter.
Me:
Yes. And you spoke about this thing, apparently,
and he said that - he asked me about it - and I
didn't get a chance to see him last night, although
I did see Harold Smith and I cleared it with Harold
Smith.
HMJr:
Yeah.
Mc:
Now, Stimson said this. "Can you eay reasonably
that there'd be a danger in the situation of the
British exchange, as such, that there would be a
danger of a default on those British contracts
unless we oick them up." I said I thought that
the situation was so acute, but that was an element
in the picture. Probably as a practical matter,
we'd find money somewhere that would take them on,
but I - their exchange situation is so acute, that
it was a question of scraping the bottom of the
till to find the money to meet the current pay-
ments. And I justified it largely on the ground
that all we were doing was using the Lend-Lease
appropriations which had been given to the War
Department for the purpose of buying goods for
export.
HMJr:
Yeah.
Me:
But we were using it for old contracts rather than
new contracts, and we were using it for old con-
tracts which were in jeopardy. And he said, "Well,
on that basis, it's okay."
HMJr:
Well, I'm not going to get in on the argument
Regraded Unclassified
255
- 4 -
between you and Stimson.
Mc:
Well, now can you - you've got to tell us the facts
88 to the British exchange.
HMJr:
Well, look, any reputation that I have left in this
town 18 due, I think, to my honesty and frankness
for
Xe:
Yes.
HMJr:
Now, they can get along this year, but they have
this new thing coming up in the Middle East, they
have things like that coming uo all the time
Me:
Yes.
HMJr:
they get very nervous about it
Me:
Yes.
HMJr:
you never know when they're going to have
some extraordinary expenditure upon them, and I
feel that with what we're doing and with what
they have, it'll keep them in a good frame of mind
on their financial front, which I think is very
important; and I'm willing to say that to anybody.
Me:
Yes.
HMJr:
What?
Me:
Yes.
HMJr:
I mean, they're not right uo against the gun now,
but their money is going out very fast; and as I
say, they've got this plan which will take five
million dollars a month to keep one of these
countries in the Middle East happy
Me:
Yes.
HMJr:
and you never know where they may need some-
thing else.
Me:
Yes.
Regraded Unclassified
256
- 5 -
HMJr:
And when they're down so low, they just can't
move.
Mo:
Yes.
HMJr:
So I think it's all to help the war effort.
Mo:
Right. I have no doubt of it. I - - it's only a
matter of degree. I mean, even if they haven't
got the money
HMJr:
Well
Mc:
they have to
HMJr:
I don't know when you take the British
Empire, how much their working balance should
be.
Mc:
Yes.
HMJr:
How do I know?
Me:
Yes.
HMJr:
What? They've lost all their shipping revenues,
you know.
Mc:
Yes.
HMJr:
They've lost all their revenue from the Malay.
Me:
Yes.
HMJr:
That whole group. And they're not getting their
gold from South Africa.
Me:
Yes.
HMJr:
So a lot of this stuff that they used to get to
produce dollars, they're not getting any more.
Me:
Yeah.
HMJr:
So the situation 18 critical.
Me:
Yes. Well, that's all I want. That's the only
Regraded Unclassified
257
- 6 -
statement here, the only condition.
HMJr:
The situation 18 critical.
Mc:
Critical. Okay. That's all I need.
HMJr:
What?
Mc:
That's all I need.
HMJr:
Okay.
Me:
And we'll start that train right away, and I think
we ought to be able to get that to you - there again
it's a matter of mechanics, but I suppose White's
the man to deal with that, isn't he?
HMJr:
Yeah. I'll - White has been handling this thing
for me.
Mo:
Yeah.
HMJr:
And I'll see that he knows about this conversation.
Me:
All right. Thank you very much.
HMJr:
I thank you.
Mc:
Not at all. Fine. Good-bye.
Regraded Unclassified
00 - Mr. Graves
258
April 21, 1942
11:43 a.m.
HMJr:
Hello.
Operator:
Mr. Houghteling. Go ahead.
HMJr:
Hello.
James
Houghteling: Hello.
HMJr:
Mr. Houghteling.
H:
Yes, sir.
HMJr:
Good morning.
H:
Good morning.
HMJr:
I read your memorandum, and also about the
hundred and twenty organizers that Mr. Green
has. Hello.
H:
Yes.
HMJr:
Now, when can some of those go to work in
A. F. of L. plants that have payroll deduction?
H:
I think right away.
HMJr:
Yeah. Well, don't let's wait.
H:
Yeah, that WA8 what I was feeling. It was
a good offer, and I'd like to take advantage
of it.
HMJr:
Well, the purpose of my call 18, tell them,
"Let's go to it," and what I'd like you to
do would be to talk to them, and wherever they
feel they can, you see.
H:
Yes.
HMJr:
And you can find out where we have payroll
allotment plans already established.
H:
Yes.
HMJr:
And I think I'd let them go to work on those
Regraded Unclassified
259
2 * I
and then we can give them a list a little
bit later of where we haven't got any; but
maybe they can help us get them in there.
H:
Yes.
HMJr:
Now, George Haae has all those lists.
H:
Yes, I'll get them from George Haas and
get Mr. Green and get his people together
and tell them what it's all about and what
we want, and out them. to work.
HMJr:
That's right.
H:
Fine. I thought that was a fine offer, and
I think I can get the same thing from the
CIO.
HMJr:
Well
H:
I wae talking to Leo Goodman today, and he's
going to talk to Phil Murray a little later
today. All right, sir.
HMJr:
And I'll leave it with you that you synchronize
what you're doing with Graves' office.
H:
Yes. Oh, surely.
HMJr:
Please.
H:
All right.
HMJr:
Thank you.
H:
Good-bye.
260
Conference in Mr. White's office
April 21, 1942
12:00 noon
Present: Sir Frederick Phillips
Mr. White
Mr. Hicks
Sir Frederick called upon Mr. White to discuss the status of
negotiations for the purchase of British plant facilities. He
reported the total value of British armament plants was approximately
$110 million, of which $93 million represented purchasable items,
i.e. not jigs and staff training. He said that an agreement to
purchase the Packard plants, $24 million, should be easily reached
since the Army already owns one-third of the facilities.
Mr. White told Sir Frederick that Secretary Jones had written
the Treasury stating that purchase of the list of plants recommended
by the War Department was waiting upon the completion of the audit-
ing operations. Mr. White thought it might be desirable to write
Secretary Jones in a few weeks to ask if the auditing had been
completed.
It was agreed that it might be a good idea to ask the Secretary
to call Sir Frederick, Secretary Jones, and a representative of the
Army to a meeting to see if the cause of the delay could not be
discovered and ironed out.
Sir Frederick also said that the accumulation of the British
overseas debt was now running at a rate of $2 billion per year.
J. E. Hicks
Regraded Unclassified
261
April 21, 1942
MEMORANDUM FOR THE SECRETARY'S FILES
Conference in Mr. White's office
April 21, 1942
12:00 noon
Present; Mr. White
Sir Frederick Phillips
Mr. Friedman
Sir Frederick Phillips called to discuss cable which he
received from Hall-Patch supposedly giving copy of cable sent
by Adler, indicating that the position of the Board was being
weakened. Sir Frederick asked whether Mr. Fox was going back
and wondered what the Treasury attitude was going to be regard-
ing the Stabilization Board. Mr. White replied that he assumed
Mr. Fox was going to return and said that the Treasury would
dislike to see the long-run position of the Board weakened and
that after all it was expected that the Board would play an active
role in the financial situation in China, particularly during the
post-war period. Sir Frederick said that the British had an
identical attitude.
Sir Frederick asked whether we distinguished between the
use of the fund for different types of imports, particularly
Governmental as against commercial. Mr. White replied that
as long as the Board received all of current receipts and was
kept duly informed, it was not the policy of the Treasury to
try to get the Board to distinguish between different types
of imports.
ISF/efs
4/27/42
262
April 21, 1942
4:18 p.m.
Albert
Lasker:
Yes.
HMJr:
Henry Morgenthau, Jr.
L:
Yes, Mr. Secretary.
HMJr:
How are you?
L:
I'm fine. And you?
HMJr:
Very well.
L:
That's good.
HMJr:
Mr. Lasker, I just wanted to take this oppor-
tunity to tell you that I appreciate your lending
me the services of Mr. Weir.
L:
Yes.
HMJr:
I take it you still are the head of Lord and
Thomas.
L:
I'm still the head and the sole owner.
HMJr:
(Laughs)
L:
What?
HMJr:
Well, I - he couldn't have been nicer, and he's
working for us.
L:
Yes. Now, Mr. Secretary
HMJr:
Yes.
L:
not only Mr. Weir is coming down
HMJr:
Yes.
L:
but Mr. Masius, who 1s the Executive Vice
President and Manager of our New York Office
HMJr:
Fine.
263
- 2 -
.....
who has been with us since '26 and and run
our foreign affairs
HMJr:
Yes.
L:
who 1s a very, very able man.
HMJr:
Yes.
L:
Our organization as an organization is ready to
do anything that we can.
HMJr:
Well, that's terribly nice. Now, Mr. McClintock
was down today. I don't know whether you know
him.
L:
Mr. McClintock?
HMJr:
Yes.
L:
No.
HMJr:
Well, he evidently represents some association
of all advertisers and has en office here in
Washington.
L:
Yeah.
HMJr:
They've set up sort of & war-time committee, and
I told them what you were doing.
L:
Yes.
HMJr:
And they seemed very much pleased, and I just
didn't want to let it go on without letting you
know how pleased I was.
L:
That's very, very fine of you, and I deeply
appreciate it. I want to say what I said to
Mr. Weir. In the end, this is a matter that
you want words written down on paper which will
inspire people.
HMJr:
That's right.
L:
If we get the words on paper, then we'll - and I
Regraded Unclassified
264
- 3 -
have not yet seen the work, so I do not know
how far they are in it.
HMJr:
Yes.
L:
They're working on it, and - but if we get words
on paper that are inspiring.
HMJr:
Yes.
L:
that is the seasoning that you need
HMJr:
That's right.
L:
for the meal you want to serve.
HMJr:
That's right.
L:
You want us as a condiment
HMJr:
Well
L:
not as a. meal.
And I have told them not to worry organizationally
about your place, but to write words and bring
those words to you personally.
HMJr:
That's right.
L:
So - - you see, I was in Government for many years.
HMJr:
Yes.
L:
And I was, at the end of the last war, the Chair-
man of the Shipping Board.
HMJr:
Yeah, I know you were.
L:
And I know how much was short-circuited from
coming to me by people under me.
HMJr:
That's right.
L:
And I've told them in your instance that they are
to take it - see that it reaches you direct, and
265
- 4 -
then you can percolate downward if you want to.
HMJr:
That's all right. Well, I had Weir with me
most of the day the day he was here.
L:
Yes, he told me.
HMJr:
And I don't know whether he enjoyed it or not.
L:
Oh, he 1s 80 excited, Mr. Secretary. I'll give
you his words to me.
HMJr:
Yeah.
L:
He says, "I'm sick at my stomach. I can't hold
my food on my stomach."
HMJr:
(Laughs) Well, I
L:
The way you needled him.
HMJr:
(Laughs) Yeah.
L:
Huh?
HMJr:
Well
L:
The man has to make good to save his immortal
soul.
HMJr:
(Laughs) Wonderful.
L:
I don't know. Maybe he's overly stimulated.
If he falls down, it's because he's too excited.
HMJr:
Well, the next time you come to Washington, give
me 8. day's notice. I'd like you to have lunch
with me.
L:
I certainly shall, Mr. Secretary. It would be
a very great pleasure.
HMJr:
Fine.
L:
And we will go the limit.
HMJr:
Fine. Let me ask you this - well, I'll wait to
266
- 5 -
see Weir. You people, you also have - you do
radio, don't you?
L:
Oh, yes.
HMJr:
You do.
L:
Oh, yeah, we do radio.
HMJr:
Well, I
L:
In a very large way.
HMJr:
Well, I may want to call on you for that.
L:
We'll furnish you with our radio people.
HMJr:
But right now, I'll wait and see what Weir brings
down. I gave a copy of his booklet to the President,
and he enjoyed reading it.
L:
Well, I know he'll be thrilled by that. If he
doesn't get the words this week, and he may not
the first time
HMJr:
No.
L:
because he has to get settled down, he ought
to have them for you next week.
HMJr:
Righto.
L:
So this week, don't be disappointed if they aren't
the right words. They'll be the right words next
week.
HMJr:
Fine.
L:
All right, Mr. Secretary.
HMJr:
Thank you.
L:
Righto.
HMJr:
Thank you.
267
April 21, 1942
4:45 p.m.
DEFENSE SAVINGS BONDS
Present:
Mr. Bell
Mr. Mills
Mrs. Klotz
H.M.JR: Go ahead, professor.
MR. BELL: To start out, you might let me tell you
that the Fed took twenty-six million dollars, today, of
bills. They took six million off the market. Twenty
miltion was to relieve the dealers, who went in for a
larger block of bills yesterday, because Sproul thought
the rate would be 8. little high if they didn't. It
would have been higher had they not gone in. They
picked up forty-nine million of yesterday's bills and
the Fed took twenty million. They sold fourteen million
in the market and they still have fourteen million seven
fifty of which the Fed may get some tomorrow.
H.M.JR: Now say it again, Dan.
MR. BELL: The dealers took forty-nine million of
yesterday's issue of bills. They sold, of that forty-
nine million, fourteen million in the market today.
The Federal took twenty million off their hands and in
addition took six million out of the market and the
dealers still have fourteen million seven fifty left.
H.M.JR: Then the Fed is working?
MR. BELL: Yes. The Federal has bought thirty-five
million dollars in bills since about the tenth of April.
Regraded Unclassified
268
- 2 -
H.M.JR: How much?
MR. BELL: Thirty-five million, I think it is,
in bills. This will make about fifty-three - about
sixty million.
H.M.JR: 0. K.
MR. BELL: And they are studying the whole problem
as to how to go further.
MR. MILLS: well, this is to report on our Detroit
trip and Mr. Iseby's problems out there, which probably
go beyond Detroit. It must be the same sort of a hindrance
that they have out with those West Coast airplane manu-
facturing concerns, possibly the steel concerns and so
forth: and if it can be solved in Detroit, it ought to
answer the same question everywhere else, and the solution
goes back to the Army and to the Comptroller General. The
Army was represented by Lt. Col. McEachren from Washington,
and the Comptroller General, as Mr. Bell knows, by Mr.
Nevitt, Mr. Perry, Mr. Bartelt and Mr. Ziegenfus, from
Mr. Bell's office. The answer was that both the Army
and the Comptroller General's Office were more than
cooperative. The representatives of all the leading
automobile manufacturing concerns were there. They are
finance men, not their treasurers but the men who have
the problem to live with every day. They were very anxious
to simplify their procedure by being able to get their
gross payrolls and then with the deductions audited
back in the future, which the Comptroller and Mr. -
Col. McEachren both agreed was & practical thing to do.
Col. McEachren, after the meeting, called back to a
Col. Stewart here, and they looked at the head of it
to a General Carter and Col. Stewart approved the
procedure up to the explanation that Col. McEachren
gave him.
H.M.JR: Who is the finance officer?
MR. MILLS: Carter, sir.
- 3 -
269
MR. BELL: Carter is, I believe, a member of the
firm of that Montgomery - Ross Montgomery, I think
he is, and Stimson brought him in to see whether or not
he could simplify some of the procedures in the War
Department.
(Mrs. Klotz entered the conference.)
MR. MILLS: Col. McEachren is 8. partner in Ernst
and Ernst.
MR. BELL: He is a general now.
MR. MILLS: And they have it right at their finger-
tips, and thought it was 8. possibility. They may have
some little kinks in there, and the result is, Col.
McEachren should be back with the Comptroller General's
representatives tomorrow, and Mr. Bartelt and Mr. Ziegenfus
will be back and the thought was that they would have a
draft prepared for General Carter's review, their
council and that of the Comptroller General's Office and
it would seem quite important that the Treasury have some
chance to see that draft before it goes up to them
because they might work into it some complications that
could be avoided.
MR. BELL: They promised us that. Before they sent
out any general directive, they would let us see it.
MR. MILLS: That would be 8 great big help.
H.M.JR: Now, the same troubles that the Army have,
does that apply to the Navy?
MR. MILLS: I understood from this Col. McEachren
and the Comptroller General's Office that the answer
to one would be the answer to the other, that if this
directive cameout from - is that correct? - from the
Army it would also apply on the Navy contracts and the
Ordnance and all the different Army branches.
MR. BELL: You see, the trouble with the whole thing
is that the ordnance is the only one that has issued a
Regraded Unclassified
- 4 -
270
directive, and the War Department was in the process
of issuing a general directive, so all the services
could have it, and the Navy, I understand, was going to
follow the War Department directive. This is really
all the fault of the War Department. They worked up
this scheme and the Comptroller General says "O.K." He
didn't change one letter. He just said, "It is all
right with me, the way you worked it out."
H.M.JR: On timing, when do you think you can help
us?
MR. MILLS: That will depend on this meeting that
they propose tomorrow and how far they can get it through
General Carter, and through the Comptroller General.
MR. BELL: In the next forty-eight hours, I think,
when they come back in town.
H.M.JR: Well, the only way to get anything done
is to--
MR. MILLS: That was the thought you might want to
contact Mr. Patterson, Judge Patterson, the Assistant
Secretary of War, and possibly get his help to push it
over at the last minute.
MR. BELL: I think General Carter will do it. He
is very much in favor of simplifying every procedure
and he was in favor of doing this.
H.M.JR: Patterson is wonderful on these things,
if I just told him I was interested.
MR. BELL: I don't know whether it goes to Patterson
or not. It is really a directive of the Adjutant General's
Office, I think.
MR. MILLS: The Secretary's interest in it they
know so well that that was the opinion out there, that
if he wanted to just give it that little push, it would
hurry it up.
Regraded Unclassified
271
- 5 -
H.M.JR: Patterson is swell. General Carter?
MR. BELL: Yes.
H.M.JR: What is he in?
MR. MILLS: He must be in this Specialist Corps.
MR. BELL: He is in the Secretary's Office, I think.
Col. McEachren is his assistant.
MR. MILLS: When that is done, this directive is
drafted and everyone should approve it, that will clear
the cloud in the automobile industry very much.
H.M.JR: Won't this be helpful to the Army, too.
MR. MILLS: Oh, it will be helpful to all of them,
and it may mean some little risks in the long run to the
Government, but compared to the whole work that they
are doing, the responsibility that is placed on them
now, I think they all figure that maybe after everyone
is dead and gone somebody's bones will be dug up and
hurt then but--
MR. BELL: Well, it was drafted over here without
any experience. Now, the auditors in the field are
very much pleased that this thing will be changed,
because they have had some difficulty with it. The
head of the Audit Division in the General Accounting
Office never has seen much excuse for all the procedure.
H.M.JR: While we are waiting, tomorrow morning
Tickton - do you know Tickton?
MR. MILLS: Yes.
H.M.JR: He is preparing a list for me. he is going
companies who employ the most people, and there will be
to give me, tomorrow morning, 8 list of the five hundred
a column saying, do they have 8 pay-roll deduction plan,
yes or no. Are they issuing agents, yes or no, see, and
Regraded Unclassified
272
- 6 -
several other things. I gave him three more columns.
You ought to get that tomorrow. Then when we get that,
those who have pay-roll deduction and those haven't, see,
I want you to take those that have not been made issuing
agents, you see. I want you to take that over and sit
down with Mr. McKee in the Federal Reserve Board and
try to get him interested in this thing so he really will
help us go to town.
MR. MILLS: I had this in mind if it could be worked
out, and if it isn't an improper request, to ask & privilege.
My feeling of it is that the Federal Reserve are very
thorough, and they go after it, but they need a little
polite nagging right along to get it done.
H.M.JR: That is what I want. McKee is B. good nagger.
I thought I would explain. to him that you were helping
Mr. Bell and me on this thing, and I thought you might
explain to him about your Detroit trip. In other words,
I want to service him and I want to get him a little
excited about this thing.
MR. MILLS: That would certainly help this work a
great deal to be able to do that.
H.M.JR: When he is in the office here he certainly
pounds my desk, so I would like him to pound somebody
else's desk. I will ask him if he can see you tomorrow.
Tickton and you will have this thing finished in the
morning. But every place in these five hundred of the
big companies who have the plan in, you see who are
not issuing agents, I want the two of you to go after
them.
MR. MILLS: Personal contact, wouldn't you feel,
is as good B. way as any? They are big companies and
they are hard headed, and they don't react to the--
H.M.JR: All right. You talk it over with John
McKee. Maybe the two of you can take the road. You
can start with New York. U.S. Steel is number one.
Regraded Unclassified
- 7 -
273
MR. BELL: I told you they are working on it.
H.M.JR: I know. While you were away I asked
Mr. Bell to do 8. little something on it, and this is
his memorandum to me on this thing, see and--
MR. MILLS: I wonder if I don't have it, sir.
Yes, sir, I have it.
H.M.JR: Good. Well, I will call McKee and I
will make an appointment. What I want to try to do
is get him 8. little bit excited about this thing.
Then you talk over with him how we can go after these
Federal Reserve fiscal agents. Maybe he will go up
to New York with you, see. I agree with you that you
should take the road. I wouldn't want you to take the
road, though, until we get this thing settled.
MR. MILLS: It probably should take another trip
to Detroit when this is worked out, because then the
Treasury will have done them a very real favor, and
they would be much more in 8 frame of mind to come
back and put in their issuing agents.
H.M.JR: Well, on that thing Mr. - what is our
evangelist's name out there?
MR. MILLS: Frank Iseby?
H.M.JR: Yes. He said he could get thirty-two
of those leading companies together and get them áll
more or less to agree to become issuing agents on
the promiseor threat that I would come out. Now,
I would go on a thing like that, you see, do the
thing en masse, and I would take John McKee with me.
MR. BELL: How many were represented in this
conference?
MR. MILLS: Well, there were probably ten.
MR. BELL: He said he was going to get & lot of
them in.
Regraded Unclassified
274
- 8 -
MR. MILLS: There were.
H.M.JR: Who was there?
MR. MILLS: Hudson, Ford, General Motors.
MR. BELL: Chrysler?
MR. MILLS: Packard, Chrysler, Dodge, Fisher Body.
H.M.JR: It is like all of these things. You can
say to these people, to U.S. Steel, "Now after all, if
the automobile crowd does it, why wouldn't the steel
crowd do it?" There is no question in either of your
minds that once these people become issuing agents, the
bonds will flow much quicker?
MR. MILLS: Oh, not at all. That is correct, isn't
it? The Federal Reserve are satisfied on that?
MR. BELL: I don't know as it would be in a Federal
Reserve city, but generally speaking, it would be.
H.M.JR: Well, take General Motors with ninety branch
offices.
MR. BELL: Yes. We are having a little difficulty
in getting equipment. We have 8 letter going today to the
Federal Reserve Banks asking them about the problems in
all their districts with respect to issuing agents, getting
them and we have the matter up with the War Production
Board, and they said they would do all they could for
us, but I understand they have actually quit manufactur-
ing typewriters and they are going to have to probably
go to renting. He said there is quite a supply of
secondhand typewriters in the country and they are
probably going to have to rent them. I can tell you
about two more of those companies in New York, if you are
interested. Woolworth and J.C. Penney. Neither one of them is
an issuing agent or have adopted the pay-roll allotment plan,
and apparently, they are not much, interested in it. I think
Regraded Unclassified
275
- 9 -
there is one little store in St. Louis, Woolworths,
that has adopted the pay-roll allotment plan. But
every one of the Woolworth stores, I believe, has a
sign saying that the employees of this store are
participating one hundred percent in the Defense Bond
program, and the fellow who contacted them thinks that
the way they got that one hundred percent is buying a
twenty-five cent Savings Stamp and giving it to each
one of their employees.
H.M.JR: Well, Dan--
MR. BELL: And Penney has a pension plan, or a
savings plan, which takes fifteen percent of the
employees' salary every month and puts it in a savings
account and they invest those savings in Government
securities. Now, they apparently think that is enough.
H.M.JR: Well, I want to keep Mills on this issuing
agent thing. The thing of getting them to adopt the
pay-roll thing, that is another organization.
MR. BELL: That is the promotion end. Those two
companies he should not contact until the other get through.
H.M.JR: No, he won't contact anything until they
have the plan. But we think we have somebody in today
from the Penn Mutual who is a great fellow. De will
handle the whole country. I think he is in industrial
insurance or something like that. What I am proposing,
just as & matter of interest, 1 am taking these five
hundred companies who employ the greatest number of
people, and I may write each one a telegram over my own
name, and send 8. copy to the State Administrator,
and ask him to follow up. I will bet we get four hundred
ninety-nine out of the five hundred. As rapidly B.S I
get them I will send Mills down to see that they are
made issuing agents.
MR. BELL: How many are there?
- 10 -
276
MR. MILLS: Just five hundred.
MR. BELL: Oh, that is the--
H.M.JR: There are five hundred who employ five
thousand or over who represent eight million people.
Now, if we get tho se--
MR. BELL: We have gotten four hundred sixty of
those in the plan now.
H.M.JR: That is right, but there are only a very
few of them that are issuing agents.
MR. BELL: About two hundred.
H.M.JR: Well, it sounds all right. Tomorrow I
will call up Mr. McKee and tell him I would like you
to come over and sit down with him, but tomorrow we
will have this list from Tickton of the people who
employ five thousand or over, and in that will be a list
of those who have the plan but who are not issuing
agents, and you and John McKee - what was the word you
say?
MR. MILLS: Polite nagging?
H.M.JR: I wouldn't be too polite. I think that is
all right. Then when we can clean up the people who
employ five thousand or over - 8 thousand or over--
MR. BELL: I thought the next list you had was
five hundred or over.
H.M.JR: Well, that is enormous. But I agree with
you. I don't think the Fed has gotten sufficiently
excited. The Fed doesn't get that way about anything.
MR. BELL: I think they are going after it, and
they have all hired - gone out and hired additional
people, outside people who have had public relations
Regraded Unclassified
277
- 11 -
work in banks and so forth.
H.M.JR: Well--
MR. BELL: They have really done a lot of work
in the last two weeks.
H.M.JR: That is good, Mills?
MILLS: All right, sir.
Regraded Unclassified
278
April 21, 1942
5:05 p.m.
LIMITATION OF PROFITS
Present: Mr. Sullivan
Mr. Paul
H.M.JR: I just wanted to know - Professor Sullivan,
I got your notes on these returns which are coming in.
Are they encouraging or discouraging in terms of how
good are our Treasury proposals?
MR. SULLIVAN: They are both ways, sir. Fellows
are running away on executive salaries in most instances.
In some instances they have reduced salaries. Dupont in '41
paid a million dollars less in executive salaries than they
paid in '40. But when you have so many subsidiaries, you
can split it up among the corporations. The Western
Cartridge gave us nothing on '41, so I had Tim telephone
back out there and get it.
H.M.JR: They wouldn't play ball?
MR. SULLIVAN: They wouldn't play. That got in;
and just as you called me, Roy phoned and said, "I have
got Western Cartridge." I had them sent direct from
the Bureau to Roy, because he is compiling it all. He
said, "It is perfectly obvious from what they have why
they didn't want to give it away," and that was being
sent up to me when I came in here.
H.M.JR: When I so rudely interrupted you?
MR. SULLIVAN: No.
MR. PAUL: How do these excessive salaries hurt
the tax? We just disallow them.
Regraded Unclassified
279
- 2 -
MR. SULLIVAN: That is another phase of the thing.
MR. PAUL: That doesn't have - that is good dramatic
stuff, but it doesn't have very much to do with our tax
proposals.
MR. SULLIVAN: Oh, it is going to have quite a bit
of effect on the legislation.
H.M.JR: Well, can you disallow them?
MR. PAUL: Sure, we can if they are over what is
reasonable.
MR. SULLIVAN: Well, the only cases in which the
courts have upheld our disallowances have been where a
person receiving salary was a stockholder, and where
it appeared that the distribution was in lieu of divi-
dends.
MR. PAUL: Well, I don't believe that is 8 correct
interpretation.
MR. SULLIVAN: I don't know whether it is a correct
interpretation, but--
MR. PAUL: It may happen that those are the only
cases the Treasury has previously pushed. Of course,
this is 8 pretty old story now.
H.M.JR: Well, get together, boys.
MR. PAUL: But that doesn't seem to me to be too
much of 8 problem. If that is the trouble, we could
easily correct them all without any trouble at all.
MR. SULLIVAN: That is one of the things, as a
result of this, you will want to go into, Randolph.
H.M.JR: Well, go ahead.
MR. SULLIVAN: We can't be sure that the figures
in all of these companies are comparable. If they are,
Regraded Unclassified
280
- 3 -
there is quite a wide spread. We have & compilation
that you might want to look over. It is already on
my desk now.
H.M.JR: No, I don't want to see it tonight. I
just didn't want to let the sun set without talking to
you.
MR. SULLIVAN: The reason I sent you the memo was
because you had asked us to have it by Tuesday, and I
just wanted you to know that we did have it. Although
we didn't have the complete picture, We had a great
deal more than I had expected we would have.
H.M.JR: That is good. We will put it on the
table and take a look at it. What I was thinking about
was that we might want to get it to the President before
he makes his speech, so I pushed.
MR. PAUL: Monday is his speech?
H.M.JR: It is supposed to be.
MR. SULLIVAN: What happened to the publicity on
it, or rather the non-publicity?
H.M.JR: I read about it in the paper today.
MR. SULLIVAN: Yes.
MR. PAUL: It was on the radio yesterday.
H.M.JR: Well, it looks as though Steve Early let
it out, but I don't know.
MR. SULLIVAN: I got the impression that Connally
carried it back.
H.M.JR: I think that when they went back they all
talked. I saw John McCormack talked, and they all talked.
But from what you tell me, at least as far as getting
results is concerned, it looks - I mean, we have got more
Regraded Unclassified
281
- 4 -
information than we thought we would get.
MR. SULLIVAN: Yes, a great deal more.
H.M.JR: Well, I would push on this thing.
MR. SULLIVAN: In fact, such a good job that I
think it would be nice to drop a little note to the
Commissioner.
H.M.JR: Will you do it, and I will sign it?
MR. SULLIVAN: Yes.
H.M.JR: But let's get it down; and if it is the
salaries, let's take a look at it, and take a look at
the
MR. PAUL: What do the profit amounts show?
MR. SULLIVAN: Before taxes some of them run pretty
high, Randolph, particularly in the new companies that
are doing all war work.
H.M.JR: I would like it if you gentlemen would sort
of go over it together with Blough and Tarleau before you
come in, and then I will see the four of you together.
MR. SULLIVAN: Sure. That is a good idea.
H.M.JR: Take off the rough edges.
MR. SULLIVAN: Would you like to see us tomorrow?
H.M.JR: Well, I have got it very much in mind,
but I am sales manager now for & thing called War Bonds.
MR. SULLIVAN: Yes. I was surprised when I heard
you call this afternoon. I didn't expect to see you
before the first of July.
H.M.JR: Well, I have got everybody else worn out.
Regraded Unclassified
282
- 5 -
MR. PAUL: We have to start the executive session
tomorrow.
H.M.JR: Well, does that take Roy out from this
thing?
MR. SULLIVAN: Yes.
MR. PAUL: Well, we can - he will have to be up
there tomorrow, but we can work it out somehow.
H.M.JR: I am just playing a hunch. I have got a
hunch, you know, and I think if We could get this thing
to the President not later than Friday - as far as I
know, he is all right, but somebody is needling him all
the time about this and that and the other thing and
particularly on salaries.
MR. PAUL: Well, I haven't any doubt--
H.M.JR: He may go right out of his speech. He
has got it very definitely in his mind to have a limita-
tion of fifty thousand dollars.
MR. PAUL: Of course, I can't feel very bad about
that myself.
H.M.JR: Neither can I.
MR. SULLIVAN: This is going to push him in that
direction. The Diamond T Cab Company in Chicago has a
salary listed that will knock your hat off. Three men
were down on the list as Washington representatives.
H.M.JR: Don't you mean the Diamond T Truck Company?
MR. SULLIVAN: Yes, I beg your pardon. What did I
say, Cab?
H.M.JR: Yes.
MR. SULLIVAN: I meant truck company.
Regraded Unclassified
283
- 6 -
H.M.JR: I thought it was the truck company.
MR. SULLIVAN: I think the highest salary in the
corporation, the president, I think, gets sixty thousand,
but there were three Washington representatives, and the
three of them get over two hundred fifty thousand. One
gets ninety. That is the dynamite.
MR. PAUL: That reminds me of a piece of dirt I
heard Saturday.
H.M.JR: Let's have it.
Regraded Unclassified
284
OFFICE FOR EMERGENCY MANAGEMENT
Division of Information
472 Union Commerce Building
A-404
Cleveland, Ohio
Cherry 7913
April 21, 1942
FOR IMMEDIATE RELEASE, APRIL 21, 1942
Cleveland, Ohio, April 21-
Henry Morgenthau, III, will resign as Assistant to the Regional
Director of the National Housing Agency in Cleveland the latter
part of May to enter the Army as a private.
Morgenthau, 25, who is the eldest son of the Secretary of the
Treasury, Henry Morgenthau, Jr., is a graduate of Princeton
and studied housing and public administration at the University
of Chicago.
He is the second son of the Secretary of the Treasury to join
the armed forces. A brother, Robert, is now serving on a
destroyer in the Havy.
Morgenthau came to Cleveland about two years ago as Research
Assistant with the Cleveland Metropolitan Housing Authority.
He recently joined the staff of the National Housing Agency as
Assistant to the Regional Director. This office handles defense
housing in Ohio, West Virginia, Michigan, and Kentucky.
-30-
Regraded Unclassified
285
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE April 21, 1942
TO
Secretary of the Treasury
FROM Mr. Houghteling
I talked today on the telephone with Fresident Green of
the American Federation of Labor. He repeated his willingness to
make available for the Treasury as many A.F. of L. organizers as
we might need for our Pay Roll Savings Campaign. He suggested that
I give him a memorandum on which he could base a letter to the heads
of all the national unions affiliated with the A.F. of L.
I suggested that it might bring quicker results if I
worked this out with Frank Fenton, Director of Organization of the
A.F. of L., as we would want to mobilize a considerable number of
the 125 to 150 organizers directly connected with the Federation's
central office. Mr. Green thought that was a fine idea and said
that he would instruct Mr. Fenton to work out with us any suitable
arrangements. Mr. Fenton is away from Washington today but will
return Thursday morning. I plan to take this whole matter up with
him and with Gilbert Hyatt and Elmer Dowell of the Labor Section of
the War Savings Staff on Thursday.
James L.
:
Regraded Unclassified
TREASURY DEPARTMENT
286
INTER OFFICE COMMUNICATION
DATE April 21, 1942
TO
Secretary Morgenthau
FROM
Vincent F. Callahan
We have asked AF of L, CIO, Reilroad Brotherhood,
U. S. Chamber of Commerce, and NAM to send out notices to
their membership about the Thursday night broadcast.
Because of the shortness of time they advise that it would
only be possible for them to notify their key people.
The Department of Agriculture is sending telegrams
to all of their war committees.
We are sending to all stations on the Blue Network
special announcements for use as frequently as possible on
Thursday.
A telegram is being sent to all State Administrators
about the broadcast.
It is not possible to send out a postal card from
Washington to reach the County Chairmen in time. Instead of
doing this we are wiring a news story to all State Adminis-
trators and asking them to send the story to each County
Chairman for use in local newspapers,
Vincent A. Carlahan
Regraded Unclassified
287
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE April 21, 1942
TO
Secretary Morgenthau
FROM
Vincent F. Callahan
Arrangements have been made for Lieutenant
Edward Henry O'Hare to appear with you on the broadcast
Thursday night of this week.
Vincent 7 Callahan
Regraded Unclassified
288
April 21, 1942
My dear Senator:
Attached is a copy of the last issue of
"Our America." We are very grateful to you for
your contribution to this rotogravure circular
which was delivered by Postal Carrier to
approximately 25,000,000 homes.
Your message was very much to the point and
was greatly appreciated by the Treasury Department.
Sincerely,
(Signed) 1. Morgenthan, 17.
Honorable Carter Glass,
United States Senate,
Washington, D. C.
n.m.c.
FK:blb
Copies tw Hompoon
Regraded Unclassified
289
April 21, 1942
My dear Senator:
Attached is a copy of the last issue of
"Our America." We are very grateful to you for
your contribution to this rotogravure circular
which was delivered by Postal Carrier to
approximately 25,000,000 homes.
Your message was very much to the point and
was greatly appreciated by the Treasury Department.
Sincerely,
(Hismed) a. Morgansbane a
Honorable Warren R. Austin,
United States Senate,
Washington, D. C.
FK:blb
n.m.c.
Copies to Jhompson
Regraded Unclassified
290
35215
APR 21 1942
My imp Senater:
I have you letter of April 15, 1942. in which
you refer to & foremet attributed to the Treasury
Department which you read in the - that
"volutery parchases of war busis on w stopped -
to eleven Million dollars a year' inquire whether
much & foremat "indwies any BBY mothods to
minimum yardences"; and convent that own if
your cleven William dollar prophecy - true 99 shall
still have asswered only shout ome-third of our befree-
ing problem for the ment fiscal year."
I de not - the - of the sleven billion
dellar prophecy to which you refer, but I would have 20
quarrel with 15 as a reasonable ml for mush miss in
the fiscal year 1943. It 1s, If anything, a little Lower
then I would expect.
% do have in exatemplation - methods to encourage
voluntary yourdesse of sush consurities. to are working
my hard on voluntary payrell savings scheme and are
beginning to secure real results. Ye also intend "to
pack decatells" throughout the country to seach persons
met covered w payrell eavings plans. 1 think that you
would w way - interested is this commention in the
testiness before the wage and Vesse Committee of the
House of Representatives last Therefor w Mr. Faiter
Nore/sher of the United Automobile Workers, Magars. John 11.
Jeeps sal 1, 1. Anderson of the General Maters Corporation,
and myself with peepent to MV methods of selling avings
bonds.
w the use of these methods and without moreive
pressure, 15 hope and expect to attain a goal at least
Regraded Unclassified
291
- 2 -
agral to the aloma billion dollar figure which you
cited. 1 - emplasies too strengly. however,
that the funds obtained through the sale of my
cavings bests are w as - the only real savings
insured W the Treasury. Sales of all types of
Government complities to insurance companies, savings
basks, individuals, trust accounts, and other bons
fide investors, all draw on real savings, This is
true oven is the case of salse to comercial banks
to the extent that such sales either effect the
liquidation of other accete of these institutions or
are covered by getraine eavings accuralating ⑉ their
backs. These severes, taken in the aggregate, will
probably provide the Treasury during the maing fiscal
year with as aggregate volume of real savings in excess
of that derived from the sale of vir savings securities.
Finally, I should like to coment that the real
problem to to stimulate the total savings of the -
nity. rather than to drus mush savings into say partie-
dar security. the stimulation of total savings is
best accomplished by estting off alternative
of expenditure, and this already is being done W
restrictions - openiing imposed incident to the ver
effort. AS the President said in his Budget Measage,
Allesations and priorities.
negositated w sharinges of mierial, are
NW in operations they curtail private our
lays for consumers' dupable mode, private
and public construction. expansion and even
replacements in nondefence plant and equip-
mett. These drastic curtailments of monde-
frase expenditures add, therefore, to the
private table smilable for moninflationary
financing of the Covernment deficit."
Regraded Unclassified
292
n # 6
These restrictions will and above become
increasingly severe M the mp offert progresses.
From the mest fundamental point of nov, 10 to these
restrictions upon spending which are the most impor-
tast mothod of encouraging purchases of deverument
securities of all types.
Very truly yours.
[Signed] 1. Morgenthse, JR,
Secretary of the Treasury
Honorable Aptime H. Vandenberg
United States Somete
s ₫
By Messenger Simmons 3:00
Photole n.m. C.
Regraded Unclassified
TEX., CHAIRMAN
HIRAM w. CALIF.
ARTHUR CAPPER, KANS,
ROMERT M. LA POLLETTE, a., VIL
ARTHUR H. WANDENSIONS, MICH.
WILLACE H, WHITE, A. MAINE
REMARK SHIPSTEAD. MINIR,
United States Senate
BERALD F. NYE. N. DAK.
COMMITTEE ON FOREIGN RELATIONS
BILAND YOUNG. close
April 15, 1942.
rable Henry Norgenthau, Jr.,
etary 01' the Treasury,
35215
dngton, D. C.
dear Secretary Morgentheu:
ead in last night's newspapers R report that you have been "represented"
your aides as believing that "voluntary purchases of war bonds can be
pped up to eleven billion dollars a year" thus absorbing excess purchasing
seems to me that this raises n. question which is fully as vital as the
question, and it is one in which I am keenly concerned because of my
found conviction that at the end of this conflict, the war debt must be
in the hands of our whole people and not in the vaults of our banks.
I have seen no evidence to encourage your optimistic prophecy - if
are correctly quoted.
derstand that our largest sale of defense bonda and defense stamps was
billion dollars in January, 1942 - followed by a slump to eight hundred
don dollars in February and around six hundred million dollars in March.
not advised regarding the April figures: but it seems to me that this
d 1e rather ominous. Apparently we need to sell at least two billion
ra in defense bonds and defense stamps a month during the balance of
fiscal year and at least three billion dollars in defense bondo and
88 stamps a month during the next fiscal year in order to finance the
it after we have passed a new Tax Bill raising at least seven billion
"8, plus two billion dollars in increased social security taxes. It
to me that there is an ominous gap between these necessities and the
rate of voluntary purchases of defense bonds and defense stamps by
ople of the country. It further seems to ae that this presents us.
problem which must be promptly explored and answered because it is
85 imminent and fully as serious as our tax necessities.
ald welcome your comments upon my figures and upon their discrepancy
pect to a prospect that "voluntary purchases of war bonds can be
up to eleven billion dollars a year". I beg to inquire whether
rospectus includes any new methods to encourage voluntary purchases.
like very much to know whether your quoted prophecy is sufficiently
ted - in your own judgment - to relieve us of any necessity for
wring other than voluntary methods in this field. I particularly have
the fact that even if your aloven billion dollar prophecy comes true
Regraded Unclassified
d
-2-
still have answered only about one-third of our borrowing problem
ext fiscal year.
appreciate any comment you care to nake to me upon this subject.
personal regards and best wishes,
attach Cordially and faithfully,
Regraded Unclassified
Presented again to
295
seen by me graven
4/21 142.
Date
296
April
,
1942
Dear Sir:
Since the Defense Savings Program was launched in May 1941,
events of far-reaching importance have occurred. To preserve
our very existence we have been compelled to wage war upon far-
flung battle lines. To maintain these lines, the President has
said that during 1942 we must produce over 60,000 planes; 45,000
tanks; 20,000 anti-airoraft gune; 8,000,000 tons of shipping; in
addition to mobilising, training and equipping millions of fight-
ing men. Upwards of 50% of our total productive capacity and an
equal share of our national income must be diverted to making war
materials.
This has meant a. tremendous increase in the magnitude of the
financial problem facing the Government. Reliable estimates in-
dicate that during the next fiscal year, that is from July 1, 1942
to June 30, 1943, we shall spend in the neighborhood of 60 billion
dollars.
The Revenue Aot as it comes from Congress will determine how
much of the money needed to finance the war is to be raised by
taxation. The balance must be borrowed by the Treasury. In all
probability, we shall have to borrow from 30 to 35 billion dol-
lars between now and this time next year.
If the Government is compelled to go for these funds to the
commercial banks, the result will be to increase inflationary
tondencies which are already serious. This is true because when
commercial banks buy Government Bonds they do not pay for them
with actual cash taken from their vaults, but by placing on their
books newly created deposits to the credit of the Government. When
the Government draws upon these deposits to pay for the goods and
services it buys, the purchasing power of those to whom these pay-
ments are made is increased without any decrease in the purchasing
power of those from whom the money is borrowed.
When bonds are purchased with savings out of current income,
on the other hand, such savings help to reduce 020005 consumer in-
come which if spent for a limited supply of consumer goods would
tend to force prices up. It is for this reason, among others, that
Regraded Unclassified
297
-$=
We are still & long way from that goal. Among the nearly 50,000
firms having a. payroll savings plan the average participation at the
present time 1s about 46% of the employees. The average monthly set-
ing is about $7.50 per cepita, representing in the neighborhood of
4.8% of the pay of those participating, In other words, if we con-
sider all the employees of all the participating firms, only a bit
more than 2% of the gross payroll is now being invested in Defense
Bonds.
Considering the difficulties involved in the initial installa-
tion of payroll savings plans this 18 a good record. But we must go
forward nowon two fronts, first, we must increase the percentage of
employees participating in payroll savings plane from approximately
45% to at least 90% of the total number. Second, we must encourage
all participating employees to increase their average monthly allot-
ment from about $7.50 per capita to an average of nearly $20 por capita.
To help achieve this new goal I am sending you herewith the story
of one successful method for accomplishing this. This is the first of
a. series of "case histories" which we hope to send to you from time to
time. This campaign conducted by the General Electric Company has not
succeeded in reaching our new goal, but it seems to me that it is along
lines such as are here outlined that we can most quickly and simply suc-
ceed.
You will, of course, realise that a flat 10% allotment of indivi-
dual wages and salaries by all employees will not accomplish this pur-
pose. It does not take account of individual differences either as to
income received or personal and family responsibilities. Some indivi-
duala will be able to set aside a good deal more than 10% of their pay;
others less. The overall result, however, should equal 10% of the grose
payroll. I also realize that the formula according to which the savings
quota 10 distributed among the employees will vary from place to place.
To help in making such 6. distribution, I Am enclosing A savings sobsdule
for the systematic purchase of United States Bonds for persons at dif-
ferent income levels. The allotments indicated are based on national
averages and will serve merely no a. guide in setting up & suggested
schedule to fit your own payroll.
In conducting a drive for increased participation at higher rates
of saving, the friendly, active cooperation of the workers themselves
ie of the utmost importance. Organised labor, including the A.?. of L.,
C.I.O and Railroad Brotherhoods, and the constituent unions almost with-
out exception, have pledged their full all-out support of this program.
Working together, labor and management can insure not only the success
of this important war effort but can lay the founcations for improved
industrial relations which will bear increasingly rich fruit in the
years to come.
Regraded Unclassified
298
we are going directly to the people for as much a.e possible of the
money needed for the war.
It would be difficult to say exactly how much we can borrow
directly from the people. We cannot, of course, hope to borrow in
this way all that will be needed. Nevertheless, some definite ob-
jective 1a desirable if we are to have a. standard by which to mea-
sure our success.
We have, therefore, set ALE our goal for the twelve month period
beginning July lat, the sale of United States Savings Bonds, Series
E, F and G, having an initial cost value of not less than $12,000,-
000,000. This will be equal to slightly more than 10% of our esti-
mated national income during this period.
Sales of Defense Bonds during the period May 1941, through
March 1942, amounted to $4,860,000,000, or an average of approximate-
ly $440,000,000 per month. If we are to reach our goal, an average
of a billion dollars e. month, we shall have to increase this rate of
sale by approximately 20 times. This should not be difficult to do
in view of the repidly increasing national income and in view also
of the fact that the supply of many commodities upon which people
would normally spend their income will be restricted by the demands
of war production.
The setting of a definite goal or quota does not mean an aban-
donment or basic change in our fundamental objectives and methods.
It does mean an intensification of activity all along the line. It
does mean that henceforth our savings campaign must move on a war
basis. If we are to achieve the goal outlined for the nation as a
whole, it will be necessary to etablish subsidiary goals or quotas
for states and counties. These quotas will be announced on April 13.
The most effective, single method for promoting the systematic
purchase of United States Savings Bonds is through the payroll savings
plan. Already nearly 50,000 firms in the United States employing a
total of almost 20,000,000 people have made such plans available to
their employees. You are mong those who are cooperating in this pro-
gram, and I an writing to you, not only to thank you for your helpful
cooperation up to date, but to ask for your increased effort in the
future.
Time is short. The ever-increasing demands of our war machine
create an urgency that we cannot escape or evade. To raise the bil-
lions which We now need to win the war, and to do all in our power
to cheok inflation, we must raise our sights. I am suggesting, there-
fore, as a total or quota for those administering the payroll savings
plan, that at least 10% of gross payroll be not aside by the employees
for the purchase of United States Savings Bonds.
Regraded Unclassified
299
-4-
Many questions will undoubtedly occur to you concerning this
new and intensified program. I should be glad to hear from you
and I shall welcome any inquiries or comments you may wish to make.
I want to express my appreciation again for your generous 00⑉
operation thus far. I know that in the months ahead you will not
fail.
Sincerely yours,
Secretary of the Treasury
300
PAY-ROLL SAVINGS
BOND PROGRAM
General Electric Company
Employees
No. 1 of a Series of Case Histories Outlining Successful Promotions Used by Various
Companies for Increasing Participation in the Pay-Roll Savings Plan
DEFENSE SAVINGS STAFF, TREASURY DEPARTMENT, WASHINGTON, D.C.
Regraded Unclassified
general
ELECTRIC
COMPANY
GENERAL OFFICE
SCHENECTADY, N, T.
I River Road
SCHENECTADY. N. Y.
February 9, 1942.
MR. HANOLD N. GRAVES,
Assistant to Secretary of the Treasury Morgenthau,
Treasury Department,
Fashington, D. C.
Dear Mr. Graves:
drive, employees pledged the December. In addition to a number of cash sales, about Savings Bond
I which am sttaching was conducted a summary last of the results of the General Electric Company's Defense
average our shout 8200 per employer regular (maturity purchase value of Bands of Bonds) under na our 4a pay-roll annual deduction basis. plan. 83 The percrat pledges of
with These which figures, while they testify to the success of the drive, tell nothing of the
a sam large of our employees carried on this effort, and which was responsible for its tremendous enthusi-
tion of the employees have consistently been months ahead of the general public in than . year,
General part Electric our manufacturing facilities have been devoted to war production for surress. more Berause
pledge "all-out" seriousness of the war effort. This has been evidenced by the many These their realize.
given dedication ceremonies held when new buildings have started war production, the hang in
the shops, the war production, the hundreds of American Bags purchased by employees meetings and held to
suggestions From employees on ways la spend war production.
parties of Army and Navy officers when they have visited our plants, and by the constant receptions Bow of
The Defense Sevings Bond drive was a further manifestation of this determination
secrifice on their part, then is is only one of the many servifices they have already made to further the a
employees to do everything possible to help win the war. If this pindge to buy Defense Bonds among is our
was effort, and of the many more they are prepared to make in the future.
But various reasues for buying Bonds-as . good investment, as . means of retarding inflation, and gave
la the meetings that were held to instruct those working on the drive, various speakers
themetres-their enthusiastic desire to spare no secrifice that would help smash the forces of
the spirit that made the drive so outstandingly successful was the patriotic spirit of the employees NO on.
largest factory, and therefore represented the biggest job of organization in this drive, More than our 95
We were particularly pleased with the showing made by our Schenertady works, since this is
protent of these employees subscribed-93 perent joining in the pay-roll deduction plan. The RYDE-
Age piedge was 8330 per subscriber per year (maturity value of Bonds). Obviously the reason for -
of Brat . response goes far deeper than just the effort exeried during this drive-it show a recognition
within the company and the civie activities of their communities.
tivic responsibility by these employees acquired through years of participation in group artivities
Yours very truly,
Mhuch
W. W. Trench, Secretary,
GENERAL ELECTRIC COMPANY.
WT.MR
DEFENSE SAVINGS BOND PROGRAM
General Electric Company Employees
THE GENERAL ELECTRIC DEFENSE BOND DRIVE
This report summarizes the progress made in General Electrie's Defense Bond selling program through
December 31, 1941. This program has been planned as . series of 1-week drives, reported about twice
Because the General Electric Company Defense Savings Bond compaign has been
@ year for the duration of the war effort. The first of these drives was carried on during December in
among the most successful so for conducted, une are including here a detailed descrip-
all plants and offices of the company.
tion of how General Electric sevent about the job of soliciting its 121,270 employees,
RESULTS
Three methods of purchasing Defense Savings Bonds were offered General Electric employees
General Electrie's employees are scattered in name than - hundred units from const to coast, About
(1) By pay-roll deductions regularly each pay period. Only the Series E Bonds were affered
under this plan.
Sales offices are located in 86 cities, and associated with these offices are other units-warehouses and
Works, with several thousand people, to the smallest factory with only Iwo ur three hundred employees.
110,000 General Electric people are situated in about 30 factories, runging in also from the Schenectudy
(2) For eash.
enice shops. This General Electric's Defense Savings Bond drive envered the whole range of rundi-
(3) By income accumulation. Under this plen the employee authorises the company to pay inter-
tions likely to be faced by any company, large or small.
est due him on his General Electric employees bonds and his profit-eharing payments in the
When the Defense Savings Bonds were first offered in May 1941, General Electric immediately
form of Series E Defense Savings Bonds.
nounced a plan to make it convenient for the employees to obtain them. This plan was worked out an- by
The 121,270 employees on our pay rolls et the beginning of December responded as follows:
purchased: the company's treasury department and offered three ways by which Defense Savings Bonds could be
Number of Employers
Maturity Value of Bends
Perventage of Employees
Form of Payment
Partitipating
Furchased
Participating
(1) By Pay-Roll Deduction (in installments)
Pay-roll Deduction
101,025
#20.205,000*
83.0%
By filling out a form, obtainable from his paymaster, any employee could authorize the com-
For Cash
6,770
$1,025,625
5.6%
pany in make regular dednetions from his pay checks. These amounts would accumulate,
Facome Accumulation
2,700
$154,750
2.2%
and each time the total renched the required amount the company would purchase a bond and
have it mailed Tax his home.
*Annual basis
(2) For Cash
Savings Stamps with a value of $46,600 were alm purchased during 1941.
Since the close of the drive in December, additional authorizations have continued to come in. The
By applying to Refer paymaster, any employee could request the company to purchase bunds for
him and have them mailed in his home.
figures for January are not yes tabulated but will increase those given above.
(3) By Income Accumulation
The average amhorization, INS an annual basis, is about $200 (maturity value) per participating -
playee, representing on a eash basis about 6.5 percent of the company earnings of these employees.
By filling out a form, obtainable from his paymaster, any employee muld authorize the com-
At our Schenectady plant approximately 95 percent of the employees authoribed, pledging an average of
pany in pay interest due him on his General Electric employees bunds and his profit-sharing
payments in the form of Series E Defense Savings Bonds.
8330 per subscriber per year (maturity value of bonds). This means that these General Electric mein
RECORDS AND REPORTS
and women are subscribing about 10 percent of their company earnings for Defense Bonds.
The General Electric treasury department worked with each of the paymasters in setting up - uniform
provedure for keeping records. After the authorization form filled cart by the employee has been
resided by the local paymaster me the employee's pay-roll record. the form is sent to the company's
treasury department al Schenectady, where a record in kept no that all bonds can be purchased by the
treasury department at Schenectady as needed.
INFORMING THE EMPLOYEES
The job of informing employees an the features of the Defense Savings Bonds and the provisions of the
General Electric purchase plan was begun ni onee. A booklet describing the bunds and the purchase
all plan was prepared and a copy given lar each employee. Posters describing the plan were displayed on
1,500 bulletin boards throughout the organization. The employee publications look up the job of
education and of arousing interest lo bond purchases,
Since no une publication covers all General Electric employees, much of this material was prepared at
Schenectady and syndicated to the editors of nine employee pupers. Week after week from then on
hundrede of articles, editorials, cartoons, and news items were used to tell the story from all angles and
in the simplest possible terms. At the same time, the urgency of the defense effort was being empha-
boards, and In other ways,
thed in these same publications and by ialks, milion pictures, dedication ceremonies, posters, Bags, bill-
Regraded Unclassified
Sizing Up the Defense Savings Bonds
Subscribe
UCH DEPENDS upon the worms of the Defense heriogs Boods. Union
FORDEFENSE
M money for the Reterment Program, If casi berry much higher taxe, ut
we pecture dem liberally the Generament bes only new sibernatives in
FORDEFENSE
BUY
berrowing - du more dangerous. It can Ired - alain-gally increasing the
STATES
DEFENSE
It
/,
raising on resort to frum the banks The effect of higher - is drive-
the it effect of bask have - an obrices Hus of these pro alternatives, bank
BUY
DEFENDS
UNITED
UNITED
SAVINGS
SAFINGS PLAN
STATES
- of everything FT his
SAVINGS
BONDS
The is the - emergency, buying Defease Savings Bands in - only pt
BONDS
eriotic, is è gobe note It's . - of either loaning um crobey volontirity ne PAY
ing a out (re higher survey and higher living - And when that invertable
day" comes, the Defease Serings Boads we've laid any will help - les
=
"
SAVINGS
ME through.
Bademption Value
ALL DEFENSE BONDS
THE SERIES E BONDS appear -
be the bein for mail of - M
Berause the comit - beth Series I and Serior
ARE REGISTERED
lands is will MI and la - withdraws,
Servings Bends are required -
BONDS
/
shown by the number below.
dete Soule increase - valid during del life
of de owner, - carem, -
/
Rate of Interest
Series G brads CBA be take instructions
The rain of imme depende - how long yes
sur of a ME stan below).
protection spinir has - theft. They - -
which prevents vision less und
use the balk The leager you hold the Insule
- ascurity for . tast ban. They
behim cashing them in due higher die raid of
be redemed in pm. The the aur of . les
Green they am. If hold - mainty, Some
Now
Commentator
Series E bord muld, - any please of the and
-
I
SIZING UP THE
/
E lends yield 19% - sumpared - 7425
do-day priof, exchange in be - if - fry
fur Series F. and 1.1% for Sering G.
bonds and cash for the redemption
of the purpose retirmed
ses
.
-
-
DEFENSE BONDS ARE
By Payroll Deductions
SAVINGS BONDS
NOT TAX-EXEMPT
Insure Tax of Series G linda -
GENERAL ELECTRIC
-
The Delme Bonds etc - everyt from Entiral
1 1 Signature
report
the
interest
der
as
-
-
year
in
desc
issues
148
When
- Artes -
of
E
and
Service
F
-
und
$
calor
as form manufity - they review The - dan für
Limitation on Yearly Purchase
their
lands
than
they
part
for
them.
end they forwin for n. must lie reported as
the
cost
of
the
lend
-
du
I
Esch and pay purchase up to (montaty
TEXAS
value) of Seriet K brinds in any -
To the year in which the temale et
El
year. Annual purchase of bonde a the F ANÁ G
Life
Series are fininal toos and of $50,000 (om prize)
Segior E - mature in la years the other -
for birth combined
INTEREST RATES
Benefit Any Limit - Defense
-
erio inspect in
ARE LIBERAL
Nonredermable Preiod
Compand with de other Government known
Registration
Servi B kanida - be redemed at ent time die
the market today, de Driver of interes laving Two I 5
Serim E. londs must be regatend in the name of
yeld
a
-
Users
1912
80 days from date of - The naker service cafient
be released and BY after - dair.
eliber
duree
other
Transity
1
currently the market. willing The Transary is yidal bends - en unling date if -
%
bioth
of
(i) - individual
Method of Rushmption
Treasury
14%
Alm the period has classed, Serior
(c) individuals às -
am
will
vida
K Inde may le cabed any demand. The calier
1
yjeld
isn write require inr month's entive fa
(1) - individual and &
and sa% the to Transity will date, at current in within
redesprist.
Series F and G Iseds may also le registered in
the Drime Surings Bends de nid
the name of 42 associates, trainle,
valor as do other (ignt asix
Depuminations Available
- oxperition accepting demand departe
charge
Small can be invoiced in Servi F. bosis.
are extudel).
Sunar E
BONDS MAY
Defense NEWS Plan Now - In Operation in -
Marrin Take
- I , - - -
- Price
par
une
(If
1.515
17F
Interest Payments
BE EXCHANGED
Service ,
of the the white, de anly DRA had provides
Some employees who have authorized
I
i
-
Yes
No - Brown sport -
cirritt payments. These umi-annal
purchase of Serios bonds on the and
- Price
1%
-
.
TAP
from
-
payments are at the FACT el :w% pm I left
ment plan have asked have as be they dont
Seta d
7
interest
F
Series
E
and
F
londs
is
-
switch pew syplication to Series le E Bd Tale at unce at your
Manarity Value
-
Iga
-
1
hue
commission, de the value of these lends in
laws the
1
-
for
-
pervationlly,
Payroll Department.
L'VS
I
Officed Plan Defense of Be
The
et
in
Deptro
and
the to 116 Deductions New
withing
the
Themas
2
/
=
in
THE (bro Hunt in teneral
PLANNING THE SALES DRIVE
THE IMPORTANT THING
Payments terminated in December on subscriptions under the company's former savings plan, which
offered bunda of General Electrie Employees Securities Corporation as the investment medium, These
subscriptions ran concurrently with subscriptions to Defense Sevings Bonds made in May. No further
offering of General Electric employees bonds has been made.
ALL OUT FOR AMERICA!
WHAT HARREN TOMORROW
By this time is was obvious that most General Electric employees had made up their minds in purchase
Defense Savings Bonds, but for one reason or another had not yes gotten around lat it. It therefore
decided to solicit each employee individually, making sure that each understood the bands, the purchase
plan, and the reasons for purchasing Bonds regularly.
The New York State Director of the U.S. Defense Bond Staff was contacted by General Electric be Iram
BUT
what promotional materials were available to maint them in this Bond-selling drive, After selecting the
AMAT
ME
pieces they wanted, they designed several additional items for their own use.
In order to work out the details of the drive quickly, the personnel supervisors from the several plans
TODAY!
were called to a meeting at Scheneriady. At this meeting the principal decisions made trem as follows:
(1) The solicitors should be a voluntary organization of employees.
(2) Each solicitor should be responsible for personally contacting about 20 employees, although
WAIT TILL HE WAKES UP
- The LIZATION
the exact number would vary, depending on local conditions.
(3) At each factory and office a drive chairman should be appointed by the local manager, He
/ 1 / / ,
INVEST IN FREEDOM TOA
would select a captain in each department of the local organization: each captain would
seleet a lientenant in each section of his department: and within each section the Rentenants
would select their own solicitors. Thus the solicitor organization closely paralleled the
AND WE'LL DO IT EVERY DEFENDS TIME Day - -
physical organization of the company inelf.
(1) No qualas would be sei, but if employees asked how muels they should subscribe for, is ve
decided to recummend about 10 percent of their income, in time with the expectations of the
U. 5. Treasury Department.
(5) It was decided to stress the Series E Bonds. Only the Series E Bonds were offered for sale
under the Pay-Roll Savings Plan. Series F and G Bonds were offered for cash sale.
(6) The Pay-Roll Savings Plan would be emphasized, although if unsurcessful In getting as -
ployee to use this plan, the cash and insume accumulation plans would be offered by le
solicitor.
WATCH OUT, PALI
Many other details were worked oui al this meeting. The training of solicitors, the promotional main-
rials, the timing of all parts of the program, and other questions were reviewed and decisions readied
At this same time the General Electric treasury department called a meeting of all paymesters. These
also met in Schenectady and worked out the details of the accounting procedure and the bandling of the
records.
Following the plans outlined, the personnel supervisors returned to their respective units and began
building the solicitor organizations. The paymasters began augmenting their facilities for handling the
authorizations. The publicity department al Schenectady prepared the promotional materials, and the
There
employer publications stepped up their efforts and began releasing details regarding the coming drive.
The smaller units of the company mot covered by the personnel supervisors who attended the Schenno
tady meeting were contacted by mail and given their instructions in this way.
-
are
/
as
/
THE PROMOTIONAL MATERIALS
(5) A leaflet thousand listing the principal reasons for buying Bonds was prepared. One hundred and
The promotional materials prepared by the publicity department to aid the Bond-selling drive were
each five employee copies be was were to contact, distributed to the various chairmen, who gave each solicitor one copy twenty. for
follows:
(1) Special articles, editorials, cartoons, and similar items were syndicated to the nine employee pub.
(6) A form authorizing pay-roll savings was prepared for each employee to 611 out. One hundred and
lications. The editors of these publications added a good deal of material of their own to give local
fifty thousand copies were distributed to the respective paymasters. Each employee's name and
color and arouse local pride in making . good showing.
company address was placed on one of these forms. These were then turned over to the chairmen
(2) Several thousand posters were obtained from the U.S. Treasury Department and distributed to all
for distribution to solicitors. Thus each solicitor received individual authorization forms for each
employee he was to contact.
units of the company for display purposes. Fifteen hundred bulletin-board posters were printed
and put on company bulletin boards to advertise the General Electric pay-roll deduction plan.
(7) A smaller number of forms authorizing cash purchases, and a like number of forms authorising
(3) A. booklet of instructions for solicitors was prepared and Afteen thousand copies distributed to the
income accumulation payments, were prepared, and each solicitor was given two or three of each for
respective chairmen to assist in training solicitors.
any employee who preferred this method of purchase. The various forms were printed on differ-
ent colored papers to avoid confusion.
(4) The company's Defense Savings Plan was published in booklet form. The plan described euro-
pletely the features of the Bonds and the method of purchase available. One hundred and twenty.
(8) In addition, various mimeographed letters and instructions were prepared to keep the solicitor or
five thousand copies were distributed to the various chairmen so that a copy could be handed each
ganization informed on steps being taken, meetings being held, and other events from time to time
both before and during the drive.
employee just before the drive opened.
print meeting held for and rether No
Regraded Unclassified
These
lo
all
!
TRAINING THE SOLICITORS
/
II
11
/
/
E
i
/
/
/
/
/
/
The training of the solicitors was carried out step by step before the drive opened. The
/
/
various chairmen instructed their esptains, the captains in turn trained their lientenants, and
/ , / /
the lientenants instructed their solicitors. The booklet of instructions and other promo-
DEFENSE BOND SAVINGS
The
tional materials were distributed in time to be useful in this training process.
CANDAISH
/
/
/
11
s
/ / //
I
I
1
The second step consisted of calling the solicitors together just before the drive opened in
/
s
11.
/
large meetings. In some of the larger factories several hundred solicitors attended each
/
DEFENSE / SAVINGS PLAN
/
il,
/
meeting, and more than one meeting had to be arranged to accommodate them all. While
I
/
/
general instructions were repeated al these meetings, their purpose was primarily to arouse
/
1
enthusiasm for the job ahead. The program varied from factory to factory, but a typical
/
meeting was supervised by the works manager or by the local drive chairman. At one meet-
ing the secretary of the company pointed out that the Bonds are an excellent investment,
/ P / /
/
/
s
reading the interest rates of other leading bonds from the morning paper for comparison.
/
U
This was followed by a talk given by a local union representative, who urged all employees to
//
subscribe, appealing to their pride as a group which had already contributed greatly to the
E
-
-
I
we
I
!
national war effort.
/ /
The final speaker was the company vice president in charge of war projects, a forceful
speaker who emphasized what war means to each eitizen and what will be required for vietory.
-
-
DEFENSE Subscribe 4,
/ PLAN / / : SAVINGS DEFENSE
4.
they
BUT
He emphasized regular Bond purchases as one of the duties and privileges of every citizen
SAVINGS
today, and told the solicitors that the job they were about to do was as important as any in the
BONDS
war effort.
By Payroll NOW Deductions
I)
H
/ /
4
/
i
/
/
/
/
Regraded Unclassified
Facts About Defense Savings Bonds
SERIES E DEFENSE SAVINGS BONDS
NATIONWIDE YES Boods, SINCE livery day LAST for the April less DEFENSE bone houring BOND CAMPAIGN GETS UNDER WAY
PAYROLL DEDUCTIONS
so - $1.00 or - in multiples of 50 -
WEAT you OUT at NATURITY $500.00
$1000.00
have plinted Billboards our the and posters have appealed Minote Man - cur . to
Americana Magazine Adi have descriptions made the of Concerd Happark annuations THE herings
appeals with their tight mustly redio *ppeale to buy Define
DENOMINATIONS
WEBALT DISTALLMENTS
ENTALLMENTS
$100.00
$25.00
$50.00 WHAT THE BOHER com $375.00 you
13.00 of more to maleiple of $1.00
$750.00
$75.00
Or you - buy a hand nach pay period
adring heartify And All NI with buy the Riber everything school Defense that Bonds the And the being form for aid Right time base NY country have - name Misstally of use have prospaper in agreed sur triscle. articles at
$18.75
$57.50
Your service 33 1/2% in sen years
ADVANTAGES
(1) Serv - M peniod your -
and less Department, hundreds of and throughout superhing site of the - Defense heing Dunde deas and above has bees is gue disappointing Full-time and regions] NY M b. the U.S. Transpy way, have No.
HOW TO BUY BONDS
I 1 2 ] 1 E
I
-
atter prope Are a) entra may Arnu, ringle the Person organization in the country, stork
storph
-
I
la
1
de
Deleme
$
-
-
1
be
-
I
-
PRODUC
ING
as (4) their AM provide -
1
APRIL, 1941
also
to
1
BELOW)
-
JUNE
MR. BISBEE BUYS BONDS
(NOTE
SAMPLE
experiment
LIFE
pm - Payment Dept.
pre
FOR DEFE NSE
JULY
- la - yours.
AUGUST
INTEREST
CASH PURCHASES
AM " M - -
I , i 1 I .
to - at - - I No-
BUY
will Dept.
REDEEMABLE
BONDS
Any - dom - fall
/
-
-
paid - (stemal des you
REGISTRATION
SEPTEMBER
1
for DEFENSE
Not
stain
-
of
OCTOBER
5
Des
1
F and G BONDS
Two
1
-
G.E EMPLOYEES
(1)
(1)
the
and
-
NOVEMBER
1
Met - parked - Par
DECEMBER, 1941
pail Dept. in 1 - tell -
of
Follow This Sample Form When Making Out Your Authorization MP -
-
/
1
NATIONAL TO CAMPAIGN EFFORT
-
1
BE MADE IN DECEMBER
AND FOR THE DURATION
-
-
-
-
of
this
WHAT G.E. CAN DO
Primal
/
they
I
4
-
I
1
-
DEPENDS ON US
-
-
of
Thering
-
-
a
They
of
April
/
I
1
HILLSIDE
AVE
1
I
alimants
f
the
ou
and
-
Grand
the
Defense
Transary
Department
(ube
MARY
R.
BROWN
123
MATS
Define
A
Drfine
was
first
Program
LYNN
I
parchase
Plan
E
123 HILLSIDE MASS AVE
of
1
Delease
MATER
1
LYNN
-
all
I.
la
G.F.
-
Name
may
and
-
-
for
the
the
of
Define
-
taxá
Eleven
Transury
-
11
/
1
like
&
F
for
the
hring
1
8
purchase
fellow
monthly
information
Tickne
from
due
-
-
dow.
take
their
h
3
the within M. Invo - Give
to
- be Forthases
par
of
F
fame
/
%
ELECTRIC
THE DRIVE
GENERAL
Commentator
The drive scheduled le last I week, although is was realized that anniher week would prohably be
required for the anlicitors to clean up surpe of their contacts who happened lu la away during the drive
or who were slow in making a decision,
1
1
NATIONWIDE DEFENSER WAY
On the Friday before the drive opened, each employee was given . cupy of the Defense Sevings Plan.
1
11
of
CAMPAIGN -- - (4) - - - - - -
These were hundest out by the foremen and other supervisors. On the following Munday the solicitors
started work.
it
W
I
-
I
3
Y
1
Y
<<<
-
1
-
-
1
<<<<
1
1
a
1
Each solicitor had the following materials,
il
1.
t
-
-
11
n
(1) A paymill dedaction authorization form for each employee be vas to contact, filled in with
y
MPF
the employee's name and location.
1
3
1
-
V
1
-
AND
as
1
1
-
(2) A. few cash authorization forms and il few income accumulation forms in case any employee
1
-
be contacted preferred one of these methods of subscription.
W
1
1
W
-
-
-
1
3
1
(3) A leaflet for each employee giving the principal réasons for buying Hands.
Was
-
V
\
-
-
-
-
1
Y
(4) A. copy of the Defense Savings Plan booklet describing the Bonds and Pay-Roll Savings Plan,
-
V
for reference.
1
Y
1
1
If
1
-
i
-
y
1
1
-
-
SCHENKITABY WORKS
1
I
3
1
1
1
(3) A copy of the bookler "Instructions for Solicitors." for reference,
\
-
-
-
HAPPY new YEAR 520,920
le contecting each employee, the suliction first reviewed beiefly the features of the Bonds and the provi-
stone of the Pay-Roll Savings Plan, to make sure that the person he was consulting understand them. He
cleared up any questions that arone and gave the principal reasons for buying Bonds. Then be gave his
prospert the pay-roll savings authorization form with his name imprinted on it and urged him to take
E°W S
E
is home and discuss is with his family. He also gave his prospers # empy of the leader explaining the
Bond N
principal reasons for buying Bonds to help him in selling the idea to his wife or other members of his
V
family interested. The solicitor then made en appointment to call back later in the week and gent the
inthorization form.
1
1
v. S. War The IDEAD Bond Answer - ABIX - Sale WORKS RMEGIER ANY High In of del To Works View - spend with - III
If, en Isla return call, the employee indicated that be did not wish to authorize pay-roll deductions, the
à
anlicitor then explained the each payment and income necumulation plans, urging Iske prospect to sub-
seribe in one of these ways,
1
II
QUESTIONS RAISED
1
To Great
The questions must frequently asked by employees were abnut the Bonds themselves: "What le the dif-
Tax Alsoad
&
ference between Series E, F. and 6?" "How SINIES can I cash them if I need the money in a hurry
-
"What in the best denumination la buy 1 "Do I gel any interest if I eash them in the first year?" "Do
SavingsBond 'ampaign Planned Here Be Held =
la
1 - Defense = - -
I pet hock less than I paid if I cash them before maturity? "Whet if I lost the Bond "Can I pul the
Bond las the name of my youngster "What la a co-inner or beneficiary "Will some place of safe-
w
keeping for provided
11
- -
11,
37
In a 1
Subjeitors were instructed that if any questions came up that they could net answer, in who their leader,
in this way all questions were apowered currectly-some of them were even referred back to the head-
in
-
-
puilt
gift
t
quarters at Scheneriady in order in be sare of the answer.
1
1
1
PRODUCING For DEPENSE
By the end of the week the drive was practically complete, although some "cleaning up" remained. The
empleted forms were passed back through the organization to the chairman, what turned them user to
Schenectady ISSUCIAN Works
N
the local pay-roll department.
GENERAL
CONCLUSIONS
The "pyramid" type of solicitor organization used proved
ideally suited to the Joh. It was possible to organize it in a
few days; is made the training of the actual solicitors relatively
easy: it was a simple matter to give instructions and distribute
a half million pieces of literature quickly and efficiently; it
was easy to expand quickly in those areas where additional
help was found necessary as the drive progressed: and it made
possible a day-by-day check of results.
The same procedure was found to be efficient in large fac-
tories with several thousand employees and In small units of
a hundred or so people. In the smaller units the effort was,
of course, less formal. The meetings consisted of smaller
groups, and there were fewer sleps in the "pyramid" of the
solicitor organization.
War was declared just prior to the opening of the drive, and
large outdoor mass meetings were held at most of the large
factories to pledge an "all-out" war effort. This be doubt
helped in boosting enthusiasm still higher and contributed
to the results.
The field organization of the U.S. Treasury Department De-
fense Savings Staff was just getting under way at the time the
drive was being planned and in several instances was of help
in furnishing materials and in giving talks before groups of
solicitors and others working on the drive. In one case the
General Electric group helped the Defense Savings Staff in
getting the city organized so that the city-wide effort could
start at the same time as the drive in the local General Electric
factory.
The elapsed time, from the day the idea of sponsoring such -
drive was conceived until the day the drive ended, was only
about I month. Urgeney was stressed all through the effort,
and this no doubt contributed to getting the job dune quickly
and efficiently. On the other hand, sufficient time was given
to make sure that the organization was properly set up and
trained before the drive was started.
In order to forestall the possibility of employees cashing in
their Bonds to pay income taxes, General Electrie moved
ahead the date on which the next profit-sharing payment
would normally be made to employees by about . month, so
as to distribute this money early in March instead of in April.
a - 5. GOVERNMENT PRINTING OFFICE - -
301
CONFIDENTIAL
UNITED STATES SAVINGS BONDS
Comparative Statement of Sales During
First Seventeen Business Days of April, March and February 1942
(April 1-20, March 1-20, February 1-20)
On Basis of Issue Price
(Amounts in thousands of dollars)
:
:
Amount of Increase
:
Percentage of Increase
Sales
:
:
or Decrease (-)
:
or Decrease (-)
Item
:
:
:
:
April
:
March
:
April
:
March
: April
:
March
: February :
over
:
over
:
over
:
over
:
:
:
:
March
:
February
:
March
:
February
Series 1- Post Offices
$ 53.730
$ 58,853
$ 66,622
-$ 5,123
-$ 7,769
- 8.7%
- 11.7%
Series 1- Banks
154,012
173,464
246,176
- 19,452
- 72,712
- 11.2
- 29.5
Series 1- Total
207.742
232,317
312,798
- 24,575
- 80,481
- 10.6
- 25.7
Series 1- Banks
24,757
27,656
38,021
- 2,899
- 10,365
- 10.5
- 27.3
Series G - Banks
107,096
126,015
193,776
- 18,919
- 67,761
- 15.0
- 35.0
Total
$339,594
$365.988
$544,595
-$ 46,394
-$158,607
- 12.0%
- 29.1%
Office of the Secretary of the Treasury, Division of Research and Statistics.
April 21, 1942.
Source: All figures are deposits with the Treasurer of the United States on account of proceeds of
sales of United States savings bonds.
Note: Figures have been rounded to nearest thousand and will not necessarily add to totals.
Regraded Unclas
CONFIDENTIAL
UNITED STATES SAVINGS BONDS
Daily Sales - April 1942
On Basis of Issue Price
(In thousands of dollars)
Post Office
Bank Bond Sales
All Bond Sales
Date
Bond Sales
Series I
Series 1
Series I
Series G
Total
Series I
Series I
Series G
Total
April 1942
1
$ 2,476
$ 10,517
$ 2,380
$ 9,608
$ 22,504
$ 12,993
$ 2,380
$ 9.608
$ 24,980
2
2,999
8,264
2,119
7,570
17,953
11,263
2,119
7.570
20,953
3
3,222
7.572
1,185
6,235
14,992
10,794
1,185
6,235
18,214
4
2,778
9,292
1,387
5.334
16,013
12,070
1,387
5,334
18,790
6
4,961
13,035
2,329
8,027
23,391
17,996
2,329
8,027
28,352
7
2,958
5.722
834
8,983
15,539
8,680
834
8,983
18,497
5
2,309
9.610
1,142
6,562
17,314
11,919
1,142
6,562
19,623
9
2,906
9.304
955
5,715
15,974
12,210
955
5,715
15,880
10
2,730
8,052
1,573
5,261
14,885
10,782
1,573
5,261
17,615
11
2,150
5,224
668
2,720
8,613
7.374
66g
2,720
10,762
13
4,619
17,572
2,432
8,604
28,609
22,192
2,432
8,604
33,228
14
2,513
6,152
1,076
3.333
10,561
8,665
1,076
3.333
13,074
15
2,584
5,102
1,251
5,374
11,728
7,686
1,251
5.374
14,312
16
3,472
10,008
1,400
7.773
19,180
13,480
1,400
7.773
22,652
17
2,690
8,076
850
3,695
12,621
10,766
850
3,695
15,311
18
3,111
7.175
948
3,303
11,426
10,286
948
3,303
14,537
20
5.252
13,334
2,227
9,001
24,562
18,586
2,227
9,001
29,814
Total
$ 53.730
$154,012
$ 24,757
$107,096
$285,864
$207.742
$ 24,757
$107,096
$339.594
Office of the Secretary of the Treasury, Division of Research and Statistics.
April 21, 1942.
Source: All figures are deposits with the Treasurer of the United States on account of proceeds of
sales of United States savings bonds.
Note: Figures have been rounded to nearest thousand and will not necessarily add to totals.
Regraded Unclassified
V
303
APR 21 1942
35714
My dear Mr. President:
Is accordance with your request of April 15.
19he. I - enclosing a suggested reply. for your
signature, to the attached letter of Vice President
Vallace.
Faithfully.
(Signed) H. Morgenthau, and
The President,
The White House.
Inclecures
By Messenger Simmons sign
Phato file n.m.c.
Capies to shompson
Millips 4-15-18
Regraded Unclassified
304
35024
but m. Vice Procident:
11
1942. is which you urge that a system of compulsory sevings be
I have given careful consideration to your letter of April 13,
instituted and challenge the statement of the Secretary of the
(PM of voluntary envings.
Treasury that such a system would interfore with the existing pro-
The figures which you present with respect to the distribution
of sevings bend sales seen to indicate that those bends have been
sold largely to the voll-te-de classes to the community, This Le a
situation which the Secretary of the Treasury hopes and believes
vill change with the development of voluntary payrell savings plans.
but there is m question that 10 has been the case,
I agree with you that it would be a mistake to try to sell
these bonds to vage carners by so-salled voluntary methods which,
is fast, would involve recorting to extrese social pressure. The
Secretary of the Treasury concers is this view and told the Vage
and Messe Connittee of the lleuse of Representatives that be ase
not propose "W point us houses yellow or pat people behind barbed
vires."
It 10 mother matter, however, whether compulsory seving 10 the
correct solution to this problem. what is really needed is the "sea-
spending" of Income, at there my be a more effective and direct my
of accomplishing this then by the foreed purchase of savings bends.
The nothed which I have in sind 10, of course, retioning.
is this commestion. I find the following excerpt from a confiden-
tial pemphlet on "Rationing", written by Mossre. Upgrea and Mesell
of the Department of Commerce, interesting:
"Ia the abstract the problem of coping with as
imposting inflation 10 simple. The weapess consist
of taxation. the berrowing pover, and, perhaps. the
person to compel saving. Yes, despite the universal
Regraded Unclassified
305
2
agreement upon the officer if these devices for pre-
venting inflation, recent ovidence from the experience
of other countries reveals that the problem is never,
in fact, solved is this way. Mather, the weight of
the oridence (especially from britain and Germany)
is is support of the view that the sejor and primary
responsibility for the avoidance of inflation falle
upon those endoved with the power of retioning.
#
.
In this w Ley rationing/ is created a
surplus of purchasing power for which imediate and
enstomary use shannele are not open. 4a a result the
consumer far more villingly acquiress is the drive
of government to secure these funds: whos Me ordinary
alternatives, even at rising prices, are svailable to
his be remains an unvilling subject or accomplice."
It - to BE that this passage states very well what has been
the legie of create is other countries and will prove so be the case
is our ova also. A little compulsory seving will net de the trick
and as adoquate amount will be impossible to obtain. This 10 true
becomes as adoquate accunt of compulsory saving is a great doal 1a-
dood - as it must be enough to "mop up" not merely excess numer
purchasing power, but also the reduction is voluntary savings videh
vill certainly take place.
Entioning. on the other hand. appeale to the ordinary BN as
the legical sasvey to the problem of shortages. It only through
the intervening dollar signs and strikes directly at its object.
Rationing can consequently ashieve with less resistance the -
results as a large-seale plan of compulsory saving.
in adequate system of retioning will areate antomatically a
flew of what are really "compulsory savings". but which to not
Regraded Unclassified
306
- 3 -
agyear to be smoh to the servers. 10 come to - that w met leek
is this direction for the major portion of the colution of -
problem. although $$ is clear that even the met adequate eystem
of rationing must be supplemented by action on may fronts, 1a-
cluding rigerens tamation. stringent controls of consumer credit,
and price fixing.
Sincerely.
the Fice President.
United States Senate,
Vashington, D. 0.
HCM:jpm 4-18-42
307
THE WHITE HOUSE
WASHINGTON
April 15, 1942.
MEMORANDUM FOR
THE SECRETARY OF THE TREASURY
FOR PREPARATION OF REPLY
FOR MY SIGNATURE.
F.D.R.
HEGEINED
OFFICE OF THE VICE PRESIDENT
WASHINGTON
April 13, 1942
The President
35214
The White House
Dear Mr. President:
I should like to challenge the statement made by
the Secretary of the Treasury at the last Cabinet meeting
to the effect that a universel savings olan would interfere
with the program of genuine voluntary saving. The break-
downs of the denominations of savings bonds sold in
December and January, the last months for which reasonably
satisfactory breskdowns are evailable, do not support this
contention. Of the €529 million savings bonds sold in
December, ¿188 million were in Series F and G - series
intended for large investors which may be taken up to
£50,000 a year. Only £341 million were the Series E type,
which are available for individuals up to a maximum of
$5,000 a year per individual. of this $341 million, only
22 percent were in denominations of $50 or less, indicating
that most of it was purchased by fairly high income classes,
and, indeed, 34 percent were purchased in denominations of
$1,000, showing clearly that this proportion was purchased
by the very well-to-do. The figures for January are very
similer. In that month 667 million of Series E were sold
(by the way, the sale of Series E dropped to 4398 million
in February and #338 million in March.) of the total sold
in January, only 19 percent were in denominations of $50
or less, while 40 percent mere in denominations of $1,000.
Considering the fact that incividuals in the higher income
brackets buy a considerable amount of bonds of the $25 and
$50 denominations, the conclusion can be drawn that the bond
purchases of people in the lower income brackets are running
certainly billion of bondom 1942
$50 million B. month, or £600 million a year drecognize
This analysis shows, I think, quite clearly, that the
lower income groups, whose purchasing power must be tapped
to prevent inflation, are not in any appreciable way affected
by the voluntary war savings bond campaign.
310
April 21, 1942
Dear Eleanor:
I am inclosing herewith a
memorandum, prepared by the Treasury
Tax Staff, explaining the Treasury's
position on joint returns.
Affectionately,
(Signed) Heary
Mrs. Franklin D. Roosevelt,
29 Washington Square, West,
New York, New York.
SPECIAL
AIR MAILIVEWY
File m.m.c.
Regraded Inclassified
311
Prepared for Mrs. Roosevelt's
column.
4/20
312
Mandatory Joint Returns
The Treasury's purpose of meking Joint tax re-
turne mendatory is to equalize tax burdens among
families. A family with an income of $5,000 earned
or received only by the husband -- or only by the
wife -- is affected by a dollar of taxes in the SOME
way as a family with the same total income earned or
received by husband and wife equally. If Joint tax
returns are required, both families pay the some tax,
but if separate returns are allowed the first family
pays a substantially larger tax than the second.
About 9 couples out of 10 have been filing joint
returns right along even though they have had the
option of filing separate returns. Separate returns
can save taxes only for 8 smell minority of married
couples where both husband and wife receive substantial
amounts of income.
It shows a lack of understanding of the Treasury
proposal to say that the elimination of this tax nd-
vantage of the relatively few undersines women's
rights. The incomes of the husband and wife are
added for the purpose of computing the total family
tax, The total tax is then divided into shares to
be paid by the husband and wife in proportion to their
respective incomes. Neither spouse has & favored
position. Each pays a somewhat larger tax then if
separate returns were filed, but this has nothing
to do with the sex of either spouse. There is no
subjugation of the wife, and the larger tax she--
and the husband - has to pay doce not deprive her
of any rights or individual status. She 18 not made
lisble for her busband's tax. She herself simply pays
a higher tax because she has a better financial posi-
tion from the realistic standpoint of the family
economic unit than the single woman with the same
amount of income, and by doing DO she assumes her
fair share of the tax burden.
Part of the proposal for mandatory joint tax
returns enlarges the rights of the working wife by
providing a special earned income credit to the
spouse who earns the smaller income. This is some-
thing which should have been allowed before, regard-
less of joint returne, since in the lower income
Regraded Unclassified
313
- 2 -
families the wife who works outside the home 18
not available to render the same service to the
family as she would if not employed outside.
Extra expense for & servant is necessitated.
This is not very important if the family income is
larger since a servant would probably be employed
in any event, but it is very important for low
income families. Great Britain, where joint returns
have long been required, makes such an allowance.
The interests of the vast majority of the
women in the United States would be promoted by
mandatory joint returns, since their families are
called on to pay the several hundred million dol-
lare a year saved by a small minority through
filing separate returns.
REP:EW
4/20/42
Regraded Unclassified
314
WUE24 29 GOVT COLLECT XC
1942 APR 20 AM 8 16
BEACON NY APR 18 1942 516P
RANDOLPH PAUL AND MR ROY BLOUGHT
TREASURY DEPT
PLEASE LET ME HAVE BY NOON MONDAY A STATEMENT GIVING THE
TREASURY POSITION ON JOINT RETURNS FOR MRS ROOSEVELT TO USE
IN HER COLUMN. COPY TO MRS KLOTZ
HENRY MORGENTHAU JR.
HS 70 1345
Regraded Unclassified
315
APR 21 1849
Dear Eleanor:
I have Mrs. Thompson's note of April 16,
1942, indicating that you would like my advice
on the merits of an appeal contained in a wire
of April 8 to you from Mr. John J. Noll of
Groat Reck, New York, urging your support of
H.R. 4402, & bill to extend the period of 5->
year term insurance for veterans of the First
World Ear.
Though the 6111 is essentially a matter
for the Vaterans' Administration, 1 believe it
is without merit. It would provide the fifth
extension of the right to renew the temporary
term insurance of the First World Var. The
President vetoed a bill to provide a fourth
extension of this privilege on May 28, 1937,
but the 75th Congress passed it overwhelmingly
over his veto, and it become law on June 1,
1937. The Veterans' Administration has con-
sistently opposed legislation of this sort,
and I attach 8. copy of their adverse report on
the present bill, as well as & copy of the
President's veto message on the 1937 bill.
I have learned that the House Committee
on World War Veterans' Legislation unanimously
ordered H.R. 4402 reported favorably last week.
Regraded Unclassified
316
- 2 -
The committee report has not been filed yet,
but it probably will be today or tomorrow,
and the committee expects early House con-
sideration on the neasure.
Sincerely,
(Signed) Heavy
Mrs. Franklin D. Roosevelt,
The White House,
Washington, D. C.
&JS:EHF:vls - 4/20/42
Regraded Unclassified
317
THE WHITE HOUSE
WASHINGTON
April 16, 1942
Dear Mr. Secretary:
Mrs. Roosevelt would appreciate your
advice as to he worthiness of the appeal
made in the enclosed telegram, concerning
H.R. 4402, a bill to extend the period of
five-year term insurance for veterans of the
first World War.
Very sincerely yours,
Maloria @ Thompson
Secretary to
Mrs. Roosevelt
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D.C.
318
APR 8 II 17 PM 1912
RB72-91WH
WB92 169 NT 5 EXTRA
NEWYORK NY APR 8 1942
MRS FRANKLIN D ROOSEVELT
THE WHITE HOUSE
YOUR REVIVAL OF INTEREST IN VETERANS OF WORLD WAR 1,
RECENTLY EXPRESSED, CAN BE GIVEN PRACTICAL DEMONSTRATION
THROUGH YOUR SUPPORT OF H. R. 4402 TO EXTEND THE PERIOD OF
FIVE YEAR TERM INSURANCE WHICH ORIGINATED AS WAR RIS IN-
SURANCE IN OUR EARLIER WAR. THIS LEGISLATION AFFECTS SIXTY
THOUSAND VETERANS AND THEIR FAMILIES, VETERANS WHO FOR A
PERIOD OF ALMOST TWENTY FIVE YEARS HAVE BEEN PAYING INSURANCE
PREMIUMS TO THE GOVERNMENT ONLY TO FIND THEMSELVES WITHOUT
Regraded Unclassified
31
THIS PROTECTION IF THE EXTENSION IS NOT GRANTED. THE
PRESIDENT VETOED SIMILAR LEGISLATION FIVE YEARS AGO. THE
ONLY ALTERNATIVE IS CONVERSION TO POLICIES REQUIRING
INCREASED PREMIUMS WHICH VETERANS OF OUR AGE WILL BE UNABLE 10
MEET IN ADDITION TO OUR FULL FINANCIAL SUPPORT OF THE PRESENT
WAR PROGRAM. IF MILLIONS OF DOLLARS ARE STILL AVAILABLE FOR
NON-DEFENSE EFFORTS, SURELY THE GOVERNMENT WILL EXTEND THIS
BENEFIT TO MEN WHO FOUGHT IN THE EARLIER WORLD WAR TO
SAVE OUR NATION FOR THE PROGRAM OF SOCIAL AND ECONOMIC
REFORMS DURING SUBSEQUENT YEARS
JOHN J NOLL 9 MAGNOLIA DRIVE GREATNECK NY.
320
APR 21 1942
Elean
1 I
in complance with your request, 1 as
enclosing - analysis of the tax proposals
% 1 & w the I
witted to you is m. George 4. Hiller's
letter of March 27. 1942, which you my find
useful in the programmen of year reply to
Mr. Miller if you does such a reply decimble.
Yes my be intervated is loweing that
M. Coodbar has written both the White Home
# I 1 I to e
time ta the past sine years, submitting his
reggestions - commis and monetary maters.
Mr. Miller's letter to returned herewith.
(Signed) Heary
É
the White House
Photo file n.m.c.
copies By to 3:00
Messenger
Indicares
Mui
20
MMR102 4/20/42
321
Analysis of the Tax Proposals of
Dr. Jeseph E. Goodbar
Dr. Goodbar proposes a flat and universal war-ener-
geney income tax, in addition to all other taxes, of 25
percent on all income, to be deducted at the source. The
income receiver would, however, be permitted to work an
additional 10 hours a week (25 percent of the normal 40-
hour week assumed to be the work-week for everyone) and
the employer would turn over the day for these hours to
meet the employee's tax liability.
Employees working in war industries would continue to
be employed there, with a work-week of 50 hours instead of
40 hours. In sivilian industries, however, the plan would
be effected by releasing employees so that the now smaller
number of employees, each working 50 hours a week, would
yield as sany man-hours as were formerly obtained with all
employees working 40 hours. The employees released would
be employed in var industries.
I am certainly in sympathy with the final goals at
which Dr. Goodbar is aiming -- the prevention of inflation
by increased production of the real goods and services
needed to fight the mr and to maintain the civilian popu-
lation.
There are, however, fundamental questions to be raised
about the practicability of making taxes payable in the
manner Dr. Goodbar suggests. The suggestion is essentially
8 retrogression from our present monetary economy to & sort
of barter economy, where obligations AP+ paid in kind,
rather than in money. Such a retrogression would saerifice
the greater floxibility and case of adjustment in the soon-
ony secured by payments in money.
The proposal does not make clear how it will be poe-
sible for employees in war industries already operating on
a 24-how day to work an additional 10 hours & week. If,
for example, 4 particular power drill (on which only one
person can efficiently be employed at n time) 10 worked by
three 6-hour shifts, how sould it be possible for each of
the three workers to be employed an additional two hours
a day? There would have to be either six man-hours of
Regraded Unclassified
322
- 2 -
labor wasted because of no tools with which to work, or these
workers would have to be shifted to other MP plants net al-
ready operating at full capacity. The amount of effort mee-
essary to allocate such workers for 10 hours labor & work to
the plants where their skills could be utilized during hours
when they were not occupied at their principal places of
employment, would be tremendous and might more than outweigh
the gain in total output.
Nor is it over stated how the 25 percent income tax
would be collected from employees already working overtine
in some cases up to 55 hours a week. It would presumably
be impossible for these workers to pay in kind. Purther-
more, how would the self-employed -- the dostor, dentist,
or lawyer -- Many of whom work just as long hours as they
can be of service, be able to pay their taxes in kind? If
they were to sit in their offices an additional 10 hours &
week, this would not necessarily result in their servicing
more clients and producing more with which to pay the 25 per-
cent tax. How could dividend receivers pay their taxes in
kind? How would the small business man producing non-war
goods, with only two employees, for example. be able to make
the necessary adjustments? Previously, he utilized 80 man-
hours of labor with two workers. Now, one employee would
work 50 hours, but the other could work only 30 hours in his
plant and would have to work 20 hours elsewhere. The 005-
plexities and confusion that might very likely result are
obviously very great.
It would seem, therefore. that it would be better to
continue to collect all income taxes in money. This would
permit each individual to make the necessary arrangements
in the most efficient manner possible to augment his income
by working harder to meet his greater tax liability.
MMR/jpm 4-20-42
Regraded Unclassified
32567
1/21
THE WHITE HOUSE
WASHINGTON
323
4/15/42
Referred by Mrs. Roosevelt to the
Secretary of the Treasury
American Banker
STONE 5
NEW YORK N
March 27th, 1942
Yrs. Eleanor Roosevelt,
The White House
Tashington, D.C.
ky dear Mrs. Roosevelt:-
Your suggestion the other day that labor be paid in
Government Defense bonda for its overtime work struck me 6.6 interesting
and important.
A day or two later the attached statement of Dr. Joseph =. Coodbar,
of New York, a recognized pioneer of thought in money, banking and economics,
came over my desk. His statement was made before the ways and Means
Committee on Maroh 19th,
I wrote the attached story, which appeared in our March 20 issue, and
feel that Dr. Goodbar's plan more completely serves our present needs
than anything that has come to my attention.
It might really unite Labor and Management, and utilize ell their energies
for the "Winning of the Ner"; and perhaps engender enough mutual confidence
to make them continue to stand shoulder to shoulder in "Winning the Peace",
The President has promised us that we will Win the War and also Win the
Peace. I believe him wholeheartedly. But to accomplish both these objectives
we must have a form of cooperation between labor and management which will
MOBILIZE OUR FULL ECONOMIC ENERGIES - YES, EVEN OUR FULL HUMAN ENERGIES,
Dr. Goodber's proposals will, of course, impose a tremendous effort upon
the management of every kind of non-war activity - as well 85 upon labor.
First, management will have to rearrange its working schedules in order to
free one out of every five of its employees for war production. Second, it
will have to reverse the process when, at the end of the war, normal peace-time
working achedules are restored.
Protection against inflation - the imperative need for which apparently
prompted your own proposals in large part - is assured under Dr, Goodbar's
suggestions. For example, money payments coming to the Government by virtue
of almost universal overtime would be sufficient to Day the full 40 hour
weekly wages of the TEN MILLION MAR WORKERS MADE AVAILABLE by the process
he describes.
Every day there is some new acheme, such se the "Buy a Bomber" campaign
of the Hearst papers, intended to personalize the citizen's part in the mr.
Regraded Unclassified
Reserican Banker
Mrs. Roosevelt - Page Two
How much more personalized would his part be if, instead of making modest
gifts out of his pocket, he were to contribute actual blows of the hammer
(directly or indirectly) towards building of a tomber, a fighter, a ship,
à rifle? In the case, say, of 8. secretary, she could almost Imagine hereelf
in uniform if ten hours of her extra work each work were releasing another
secretary who might possibly type the very order of attack which finally
wins the war.
This proposal means that no industries will be sheltered from the effects
of war - and none should be, None will avoid their proportionate contribution
to the war. Reletively few will be completely done in by the war, because
each will be mobilized in the same degree.
When the Iroquois Indians made a raid on the upper Hudson, the settlers
never asked who in management end who 1a labor. Every man took his place on the
stockade. That is what Americans need to do right now, The lack of a fast
and accurate typlat might be 08 disastrous as the lack of a plane or a
torpedo; by delaying the order to "make same or send same". (Remamber the
despatch - "saw sub- senk same"?)
This OPTIONAL ZAR P ODUCTION TAX, PAYABLE IN WORK OR CASH, as outlined by
Dr, Goodbar, looks to me like a dynamic plan of action; one that will enable
and induce labor end management to stand shoulder to shoulder in all-out
effort for victory; one that will bank the fires of inflation, lead US
back safely into free enterprise with the coming of peace, end provide us
with necessary breathing space for beating our swords back into ploughshares
again,
This letter is purely a personal expression on my part, and in no
way involves the American Banker - e daily newspaper going to some 6,000
bankers - which I serve as News Editor. I do bring it to your attention,
however, with the feeling and hope that you my find here the key to
UNLOCK THE ENTIRE HUMAN ENERGY of our American people, end to LOCK UP THE
DOCR against inflation.
Sincerely yours
George Seorae A, Miller, A News Milly Editor
M/S
Regraded Unclassified
326
No. A876
By order of Ger of U.S.S.R.
Form 42A.
TREASURY DEPARTMENT,
U.S. MINT SERVICE.
FOREIGN
rt is for the information
depesitor,
and is of no other value,
MEMO. REPORT ON (SILVER) GOLD BULLION deposited at the Assay Office of the United States at New York
APRIL 21, 1942
,
193 , by FEDERAL RESERVE BANK OF NEW YORK, FOR Credit of Secty. of the Tree Treasury
Special Account.
WEIGHT.
GOLD.
SILVER.
DESCRIPTION OF
BEFORE MELTING.
AFTER MELTING.
FOREHEST,
VALUE.
FINENESS.
VALUE AT
CHARGES.
NET VALUE.
BULLION.
Cents per fine os.
RUSSIAN
Ounres.
Dec.
Onner
Dec.
1,000ths.
Dollars.
Cts.
1,000ths.
Dollars.
Cts.
Dollars.
Cta.
Dollars.
de
REFD BARS
a 065 ST
999.7
B 165 00
999.0
8
117 62
999.7
8
978 91
999.7
7 976 56
999.7
8
040 Le
999.6
8 339 se
999.7
8 286 16
999.7
8
see
14
999.7
8
162 60
999.6
9
720
85
999.7
1
719
96
999.7
1
214
55
999.6
9
963 92
999.6
IN GOLD BARS,
$
net value of the above deposit is
IN SILVER BARS,
$
payable as follows:
IN CASH,
$
Georgia For
By CHECK, $
l'me Sliver, are.
fine
-
3-0411
Regraded Unclassified
327
No. 6876
By order of Gev. U.S.S.R.
Form 42
TREASURY DEPART
U.S. MINT SERVI
FORE
NOTE This Report is for the Information
and is of no other value.
MEMO. REPORT ON (GOLD) BULLION deposited at the Assay Office of the United States at New You
APRIL 21, 1942
,
193 , by FERRAL RANK OF YORK, For Credit of Secty. of the
Special Account
WEIGHT.
GOLD.
SILVER.
DESCRIPTION OF
BEFORE MELTING.
AFTER
VISENESS,
Vanya,
FOREINES.
VALUE AT
CHARGES.
NET VALUE.
BULLION.
15
Cents per fine a
RUSSIAN
Ounos.
Dea.
Owners.
Dec.
1,000ths.
Dollars,
Cts.
1,000ths.
Dollars.
Cts.
Dollars.
Cta.
Dollars.
REFD BARS
181
12
199.7
962
999.7
8
459
$
999.7
8
481
68
mr
8
513
se
999.7
8
046
$0
999.8
,
984
19
999.7
8
625
61
999.7
8
075
a
999.8
,
645
58
999.7
a
...
"
m.
8
001
69
999.6
8
635
50
999.7
9.
955
or
119.8
IN, GOLD BARS,
$
!
net value of the above deposit is
IN SILVER BARS,
$
payable as follows:
IN CASH,
$
Geocosing For the the
BY CHECK,
$
Pine Silver, oza.
fine
I I I : di di
0-4411
328
No. 6876
By erder of cov. U.S.S.R.
Form 42A.
TREASURY DEPARTMENT,
U.S. Must SERVICE.
FOR
EICN NOTE ort in for the Information
and is of no other value.
MEMO. REPORT ON (SILVER) GOLD BULLION deposited at the Assay Office of the United States at New York
APRIL 21, 1942 1 193 - by BANK OF YORK, FOR Credit et Secty. of the
special Account.
WEIGHT.
GOLD.
SILVER.
DESCRIPTION OF
BEFORE MELTING.
Artes MELTINO.
VALUE AT
CHARGES.
BULLION.
VALUE.
NET VALUE
FINENESS.
Centa per fine of.
HUSSIAN
Ounces.
Dec.
Ounces.
Dec.
1,000(hs.
Dollars,
Cla.
1,000ths.
Dollars,
Cts.
Dollars.
Cts.
Dollars.
KEED BARD
6
048
66
999.7
8
598
61
999.7
9
860
06
111.8
946
39
999.7
9
974
74
999.8
7
980
68
999.7
8
034
55
999.7
1
886
91
999.7
9
945
se
999.6
9
596
07
999.6
9
530
09
999.6
381
553
$
8
OFR
81
999.7
11,250
RE
28,448
00
11,11
15
Fine Gameda
Sal
444
518
$
321 60 Melting chg.
e net value of the above deposit is
$
28,126.40 Handling Chg
payable as follows:
Geocssick
$
26,448.00 Total Charges
BY CHECK,
$11,282,110.13
Per the
Fine Sliver, as.
fine
- - -
I-aill
Regraded Unclassified
329
APR 21 1942
Dear Mr. Barger
Reference is made to your letter of March 16, 1942,
respecting the Ruschwanderer Hearts problem and inquiring as to
this Department's attitude concerning possible action to be
taken against the Chase National Bank.
I wish to advise you that the Treasury Department
has no objection to the Department of Justice taking whatever
action or proceedings it deens appropriate in connection with
this matter.
I an also enclosing for your information copies
of correspondence between this Department and the Chase National
Bank and the State Department in May and July of 1941, which
correspondence has just come to the attention of the people in
the Treasury Legal Division working on the Rusclosanderer Mark
investigation. Such enclosed correspondence in no wise affects
the views of this Department herein expressed.
Very truly yours,
(Signed) E.H. Foley, Jr.
General Counsel,
Honorable Wendell Herge,
Assistant Attorney General,
Department of Justice,
Washington, D. Co
inclosures.
BB:nrd - 4/17/12.
Regraded Unclassified
330
COPY
WB:FR:AM
235-536-5
DEPARTMENT OF JUSTICE
Washington, D.C.
March 16, 1942
Honorable Bernard Bernstein
Assistant General Counsel
Treasury Department
Washington, D. C.
Sir:
Transmitted herewith is a copy of a memorandum
dated March 13, 1942, discussing the law applicable to
those agencies which have engaged in the distribution of
so-called Rueckwanderer Marks. You will note that this
discussion is keyed to a set of exhibits, copies of which
accompany the memorandum.
This material is transmitted to you in an effort
to meet your request that you be given an opportunity to
review the evidence against The Chase National Bank. It
is our hope that this report together with the exhibits
will facilitate your decision on the important question of
policy which is raised by the proposal that The Chase
National Bank be indicted for its part in the so-called
Rueckwanderer program.
Respectfully,
For the Attorney General
/8/ Wendell Berge
WENDELL BERGE
Assistant Attorney General
Enclosure No. 240558
Regraded Unclassified
331
STRICTLY CONFIDENTIAL
Number of Vessels with Lend-Lease Cargo for Russia
Clearing Eastern Seaboard Ports
(Weeks ending March 11, 1942 to date)
:
:
Week
:
Port
:
ending
:
:
Total
New York
:
.....
Philadelphia
:
Baltimore
:
:
:
Mar. 11
7
3
-
10
18
1
5
-
6
25
1
4
-
5
Apr. 1
3
4
2
9
OR
4
12
2
18
15
6
OR
5
19
22 1/
9
3
3
15
-
-
-
-
Total
31
39
12
82
=
Office of the Secretary of the Treasury,
Division of Research and Statistics.
April 21,1942
1/ Includes ships that sailed through midnight April 21,
and ships to sail on April 22.
Regraded Unclassified
332
April a. 1942
Chauncey
FOX Miss Dictrich
11
This morning I called the Department of Commerce, Division of Foreign
trade Statistics, Nice Schnochel, and sentioned to has the chigment of Receive
gold, valued at $11,853,203.78. which arrived in Sev Yesk yesterday. I told
Nice Schnochel that this gold vas shipped by the Bank of Canada be the Federal
Recerve Bank of New York and that the customs documents would indicate that the
chipment use from Canada. 1 pointed out to har, however, that the Gold
originally case from Imssia and that the Division of Foreign trade Statistics
should smit their records accordingly.
Regraded Unclassified
333
AF
Sydney
This telegram must bE
paraphrased before being
Dated April 21, 1942
communicated to anyone
other than a Governmental
Rec'd 8:20 a.m.
agency. (BR)
Secretary of State,
Washington.
227, April 21, 4 p.m.
REference my telegram no. 216, April 10.
Referring to the Department's telegram no. 100,
March 14, aggregate amount Treasury checks received
from Commonwealth Bank last night $27,041.91.
PALMER
NPL
C
0
334
P
Y
DEPARTMENT OF STATE
WASHINGTON
In reply refer to
April 21, 1942
FF 840.51 Frozen Credits/5862
The Secretary of State presents his compliments to
the Honorable the Secretary of the Treasury and transmits
copies of telegram no. 911 to the American Embassy at
Rio de Janeiro, dated April 8, 1942, and telegram no. 1275
from 1 the American Embassy at Rio de Janeiro, dated April 15,
1942, concerning dollar exchange with the Bank of Brazil in
favor of the Banco de Portugal.
Enclosures:
1. From Rio de Janeiro,
no. 911, April 8, 1942.
2. To Rio de Janeiro,
no. 1275, April 15,
1942.
eh:copy
4-21-42
335
TELEGRAM SENT
KLP
April 8, 1942.
This telegram must be
paraphrased before being
10 p.m.
communicated to anyone
other than a Governmental
agency. (BR)
Amembassy,
Rio de Janeiro.
911
Your 1113, March 31, noon; your 1020, March 24, 9 p.m.
This Government is gratified by the cooperative attitude
of the Director of Exchange. You should, however, point
out to the Director of Exchange that the establishment of
a dollar account on the books of the Bank of Brazil in favor
of the Banco de Portugal would make possible dollar transactions
not covered by the assurances given by the Portuguese Govern-
ment and the Banco de Portugal, or by the certifications re-
quired in the Portuguese general license for transactions
other than those on behalf of the Portuguese Government or
the Banco de Portugal. Dollar transactions not covered by
these assurances or certifications may be carried out only
under specific licenses. The proposed procedure, would
therefore, circumvent the controls set up by the provisions
of the general license issued to the Government of Portugal
under our freezing order. Moreover, the nature of the under-
lying transactions would be unknown to either the Banco de
Portugal or the Banco de Brazil.
While this Government appreciates the expressed intent
of the Director of Exchange not to effect dollar transfers
without informing the Embassy, it is believed that a more
satisfactory solution would be obtained if the Director could
decline the Banco de Portugal's proposal.
It is suggested that unless you perceive objection the
Director should be strongly urged to decline the proposal.
WELLES
Acting
(DA)
840.51 Frozen Credits/5862
FF:JNP:MFA
EO
RA
A-A
FD:GL
Copy:bj:4-21-42
Regraded Unclassified
C
0
336
P
Y
DM
Rio de Janeiro
This telegram must be
paraphrased before being
Dated April 15, 1942
communicated to anyone
other than a Governmental
Rec'd 8:41 p.m.
agency. (BR)
Secretary of State,
Washington.
1275, April 15, 6 p.m.
Department's 911, April 8, 10 p.m.
The Director of Exchange has not found it possible to
make a blanket rejection to the proposal. He has, however,
given the Embassy assurances that the account will be
handled with the same caution and guarantees required for
transactions in New York and that the account will not be
permitted to reach large amounts. He considers advisable
periodic exchange of information with the Embassy on trans-
actions with Portugal.
Any detailed information which the Treasury can make
available to the Embassy in regard to the Portuguese exchange
situation will be of assistance in following operations
locally.
CAFFERY
HTM
Copy:1c:4/21/42
337
COPY
INCOMING CABLEGRAM
April 21, 1942
Chungking, April 21, 1942
Federal Reserve Bank of New York
New York
No. 6
Please pay Chase National Bank of the City of
New York for credit of The Central Bank of China Chungking
U.S. dollars 587,427.97
Stabilization Board of China
Copy:10:4/23/42
Regraded Unclassified
338
COPY
OUTGOING CABLEGRAM
April 21, 1942
Stabilization Board of China
Chungking
No. 6
Your No. 6 Payment made
Federal Reserve Bank of New York
Copy:bj:4-23-42
C
0
P
339
I
DEPARTMENT OF STATE
WASHINGTON
In reply refer to
FD
April 21, 1942
The Secretary of State presents his compliments to
the Honorable the Secretary of the Treasury and encloses
copies of telegram no. 577, dated April 20, 1942, from
the American Embassy, Vichy (Paris), France, transmitting
the translation of an informal note dated April 11
from a competent official of the Ministry of National
Economy and Finance, concerning German decrees regarding
Jowish property and enemy property.
Telegram no. 401, dated March 17, 1942, was trans-
mitted to the Treasury Department on April 10, 1942.
Enclosure:
From Embassy, Vichy,
no. 577, April 20, 1942.
Copy:bj:4-21-42
MEV
(Paris)
This telegram must be
Vichy
340
paraphrased before being
communicated to anyone
Dated April 20, 1942
other than a Governmental
agency. (BR)
Rec'd 1 p.m.
Secretary of State,
Washington.
577, April 20, noon.
Embassy's 401, March 17, 11 a.m.
Following is translation of informal note dated April 11 from a
competent official of the Ministry of National Economy and Finance:
"No French legislative measure prescribes the blocking of assets
belonging to Jews or to American nationals and the German decrees re-
garding Jewish property and enemy property (in the meaning of the German
decrees) are applicable only in the occupied zone.
However, the application of these decrees results in entailing in
certain cases blocking measures affecting detrimentally persons residing
in the unoccupied zone. In general the occupying authorities require the
blocking of Jewish and 'enemy' assets when these assets appear in the
accounts of a firm having its office in the occupied zone even though
the owners reside in the unoccupied zone or the assets are physically held
in the unoccupied none. All Jewish and 'enemy' property in the occupied
zone is also blocked in the hands of the third parties holding it no
matter where the owner resides. Registered securities belonging to Jews
or to 'enemies' are blocked if the register of transfers of the issuing
organisation is kept in the occupied zone."
LEAHY
RR
Copy:bj:4-21-42
Regraded Unclassified
TREASURY DEPARTMENT
341
INTER-OFFICE COMMUNICATION
DATE April 21, 1942
TO
Secretary Morgenthau
FROM MrV Dietrich
FOR
CONFIDENTIAL
Registered sterling transactions of the reporting banks were as follows:
Sold to commercial concerns
£44,000
Purchased from commercial concerns £14,000
Open market sterling held at 4.03-3/4, with no reported transactions.
The Canadian dollar discount narrowed to 12-1/2%, as against 12-5/8$
yesterday.
The Cuban peso moved off slightly to an offered rate of 3/16% premium.
In New York, closing quotations for the foreign currencies listed below
were as follows:
Argentine peso (free)
.2375
Brasilian milreis (free)
.0516
Colombian peso
.5775
Mexican peso
.2064
Uruguayan peso (free)
.5295
Venezuelan bolivar
.2860
We sold $750,000 in gold to the Central Bank of Venezuela, which was ear-
marked for its account. An additional $3,250,000 will be sold to that bank when
the Federal receives dollar funds to cover the transaction. The Veneruelan Bank
has advised that it is remitting these funds.
No new gold engagements were reported.
In London, spot and forward silver remained at 23-1/2d, equivalent to
42.67$.
The Treasury's purchase price for foreign silver was unchanged at 35$.
Handy and Harman's settlement price for foreign silver was also unchanged at
35-1/84.
We made no purchases of silver today.
2
342
Copy No. 13
BRITISH MOST SECRET
(U.S. SECRET)
OPTEL No. 130
Information received up to 7 A,M,, 21st April, 1942.
1. NAVAL
Two of H.M. Destroyers and a British and Belgian merchant vessel, both
of small tonnage, were mined off the East coast yesterday. The two destroyers have
reached harbour but the merchant ships sank. On the 16th, a British merchant ship
in convoy to RUSSIA and carrying 20 Hurricanes and 25 Matilda tanks TAB sunk by U-
boat south of BEAR ISLAND. On the 17th, off PORT SAID, an Egyptian ship WELB set
on fire by bombe but it may be possible to tow her into harbour,
2, MILITARY
BURNA. IRRAWADDY FRONT, It now appears that the road block south of
the PIN CHAUNG 10 still held by the Japanese consequently come of our troops are
held up on the south of the River. Simultaneous attacks on the early morning of
the 19th by the Chinese, supported by some U.K. armoured troops, from the north
and our own forces from the South failed to dislodge the enemy, the attack from
the north having gone wide of the objective. No enemy pressure in TAUNGDWINGYI
area and road from here to MAGWE reported clear of enemy.
SITRING FRONT, No change reported.
KARENNI FRONT. Japanese forces reported 20 miles south of LOIKAW.
3. AIR OPERATIONS
MALTA. Between 2,0 p.m. 19th and 2,0 p.m. 20th, 240 bombers, escorted
by fighters, attacked, The aerodromes were hit, barracks at KALAFRANA destroyed
and the torpedo depot severely damaged. One of our aircraft was destroyed ORL the
ground and 11 damaged. Our fighters and Д.А. artillery destroyed 12 enemy aircraft,
probably destroyed 1 and damaged 9. A reinforcement of 47 Spitfires reached MALTA
yesterday.
BURNA. On the 18th and 19th, Blenheims bombed BASSEIN, ALLANMYO and
SIFBAUNGWE and made low flying attacks on enemy troops and transport south cast of
MAGWE. 1 Blenheim is missing.
ANDAMAN ISLANDS. 18th, Two Hudsons attacked 12 Japanese Flying
Boats in PORT BLAIR Harbour destroying two and damaging three,
Regraded Unclassified