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DIARY
Book 665
September 17-20, 1943
Regraded Unclassified
- B -
Book Page
Brooklyn, New York
See Financing. Government: War Savings Bonds
(3rd War Loan Drive)
Business Conditions
Haas memorandum on situation, week ending September 18, 1943 -
9/20/43
665 234
- C -
Canada
Quarterly statement and forecast of Canada's holdings of
United States dollare - - 9/17/43
126
Correspondence
Mrs. Forbush's mail report - - 9/17/43
94
- 1- -
Eccles, Marriner S.
"The Dual System of Banking": Address before National
Association of Supervisors of State Banks, Cincinnati,
Ohio - 9/17/43
115
- F -
Financing, Government
War Savings Bonds:
3rd War Loan Drive:
See also Speeches by HMJr in St. Louis and New York City
Lag in sales discussed by HMJr (in St. Louis) and
Bell - 9/17/43
1
(See also Book 666, page 1- - 9/21/43)
a) Federal Reserve Bank of St. Louis report
11
b) Brooklyn, New York, set-up described by
Scripps-Howard newspaper woman: See Book 666,
page 6
"The Road to Victory": Assigned to Treasury by its
composer, Private Frank Loesser - 9/17/43
90
a) Loesser thanked - 9/29/43: Book 668, page 80
John Golden thanked for cooperation - 9/20/43
230
- G -
Gold
See Lend-Lease: United Kingdom
Golden, John
See Financing, Government: War Savings Bonds
(3rd War Loan Drive)
Regraded Unclassified
- K - -
Book Page
Keynes, John Maynard
See Post-War Planning: Currency Stabilization
(United Kingdom)
- L -
Lend-Lease
United Kingdom:
Gold and dollar figures for August - 9/19/43
665 189
Gold and dollar balances and external liabilities:
Chancellor of Exchequer provides fuller information
(confidential)
268
Loesser, Frank
See Financing, Government: War Savings Bonds
(3rd War Loan Drive -
"The Road to Victory")
- M -
Missouri, St. Louis
See Speeches by HMJr
- N -
New York
See Speeches by HMJr
- P -
Post-War Planning
Currency Stabilization:
United Kingdom: Chancellor of Exchequer-HMJr
correspondence concerning visit of Keynes - 9/20/43.
250
- R -
"Road to Victory" (Song)
See Financing, Government: War Savings Bonds
(3rd War Loan Drive)
- S -
St. Louis, Missouri
See Speeches by HMJr
Regraded Unclassified
- S - (Continued)
Book Page
Speeches by HMJr
3rd War Loan Drive:
St. Louis, Missouri, before Chamber of Commerce and
War Finance Committee, September 17, 1943:
Reading copy.
665
16
Walter Head's introduction
14
Dinner program
13
Drafts
26
New York speech discussed by Treasury group - 9/20/43
200
a) Itinerary: See Book 666, page 199
b) Luncheon guests at Federal Reserve Bank: Book 666,
page 202
c) Speech: Book 666, page 203
d) War Plants checked on sales - 9/29/43: Book 668,
page 82
- U -
United Kingdom
See Lend-Lease
II Post-War Planning: Currency Stabilization
- W -
War Savings Bonds
See Financing. Government
Regraded Unclassified
1
September 17, 1943
10:55 a.m.
HMJr:
They're terribly pessimistic. The papers greeted me
when I got off, "I suppose you came here because the
thing's in a slump." Well, I don't know what's the
matter but before I leave town I'm going to find out.
Somebody has been kidding somebody. I don't know
who. But certainly -- Walter Head here says, "Well,
we don't know -- we've got a wonderful organization
but we're not making the sales."
Dan
Bell:
Uh.
HMJr:
I talked to the man at the Federal Reserve and
neither Chester Davis nor the man in Kansas City
are on the Job.
B:
Yes. They're probably at the Bankers' Convention.
I don't know.
HMJr:
Well, God damn it! Why go to a Bankers' Convention
when we're trying to sell stuff? I mean, their job
1s supposed to be on the bridge and not out -- they
say Chester Davis is in Washington on something to
do with post-war planning.
B:
Yes, he's on that committee.
HMJr:
Why isn't he on the job? And the fellow from Kaneas
City is in New York.
B:
I see.
HMJr:
Maybe it's the Federal Reserve that's throwing us
overboard. I don't know but there's something
wrong. Now, this 18 what I want you to do, Dan.
Hello?
B:
Yes.
HMJr:
I want you to spend the rest of the day on the
telephone calling up everyone of the Federal Reserve
people and finding out how they think the thing is
going and what they think is wrong.
B:
All right.
HMJr:
Now, I've got the fellow from the Federal - -- I don't
know what his name 16, coming to Bee me in an hour.
Regraded Unclassified
2
- 2 -
B:
Hitt?
HMJr:
Who?
B:
Hitt?
HMJr:
No, he's not here either.
B:
Attebery?
HMJr:
Attebery.
B:
Yeah, that's it.
HMJr:
Now, Attebery -- Ted tells me it's the little fellow
that isn't buying -- Attebery tells me it's the big
fellow that isn't buying.
B:
I see.
HMJr:
But, I want you to do that and then I want Gamble
and I -- to do -- to order -- uh -- the fellow at
the head of our Labor Section
B:
Houghteling.
HMJr:
Houghteling -- to ask the Federal -- the C.I.O. and
A.F. of L. to make a survey of the country for me.
Hello?
B:
Yes.
HMJr:
And I want that back by Monday if possible. Now,
when they make that survey they can kill two stones
for -- two birds with one stone -- I want them to
be given a questionaire, "How would the labor people
feel on the alternatives -- one, of the Social Security
vs. a post-war credit, you see?
B:
Yes.
HMJr:
And when they send the thing out on the bond, they
can send it out on the other thing. Now what they
say here is -- another thing they say -- it's this
September 15th tax thing which has bothered everybody.
B:
Uh huh.
Regraded Unclassified
3
M 1 I
HMJr:
But it's in an awful slump here, Ted.
Ted
Gamble:
Yes.
HMJr:
You didn't tell me that before I came here. I don't
know whether you knew it or not.
G:
I certainly didn't know that.
HMJr:
But they say that the people are just not coming
through. Head 18 an all-time low.
G:
Yes.
HMJr:
He said he talked to you yesterday. Now for God's
sake, the one thing (interference on the wire) Hello?
G:
Yes?
HMJr:
I don't want to be kidded. I've told you that ten
times.
G:
Well, you know everything that we know, Mr. Secretary.
HMJr:
Then you don't know what's going on, Ted, and it's up
to you to find out.
G:
Well, I can tell you this much.
HMJr:
You've been sitting there and telling me how lovely
everything is. I've told you again and again I want
to know. There's something definitely wrong in this
big section here. Hello?
G:
Yes, I'm listening to you.
HMJr:
And it's up to you -- you said you talked to Head --
Head said he talked to you yesterday.
G:
I talked to Head yesterday.
HMJr:
Yeah.
G:
That is correct.
HMJr:
Did he tell you things aren'
Regraded Unclassified
4
- 4 -
G:
He did not tell me that. No.
HMJr:
Well, anyway, let's get Houghteling on this job and
find out those two things.
B:
This -- that would be impossible, wouldn't it, to get
a survey through by Monday?
HMJr:
Well, let's get it started.
B:
All right.
HMJr:
Let's find out from the Local Unions how they think
the thing 18 going. Is the thing going -- I don't want
to plant any defeatism in their heads -- let's just
ask them how they think they are going. Are they going
to make their plant quotas?
B:
I see. (Aside: You got that, Ted?)
G:
Yes, I have that.
HMJr:
Hello.
G:
Yes.
HMJr:
But the other thing -- Gaston and Paul could prepare
a questionaire on this question of Social Security VB.
the post-war credit. Hello?
G:
Yes.
HMJr:
Now Gaston and Paul could prepare that for you.
G:
Yes, they're listening.
HMJr:
Hello.
B:
They're listening to you.
HMJr:
All right. Now, I've got the head -- Mr. Roberts, the
head of the paper coming here -- Mr. Head is here -- and
I'm going to ask him what he thinks 18 the matter. He
owne the radio station here.
B:
Uh huh.
HMJr:
Then in a half an hour I've got C.I.O. and A.F. of L.
coming and then at 11:00 o'clock Attebery of the Federal
Reserve. When I get through I ought to know something.
Regraded Unclassified
5
- 5 -
B:
Uh - you don't want me to call St. Louis?
HMJr:
No.
B:
You're going to take care of that?
HMJr:
No, but....
B:
I'll call all the rest of them.
HMJr:
says on their war loan the banks have to increase
-- their war loan account.
B:
You mean increase their designations.
HMJr:
Yeah, because they're handling 80 much business.
B:
Un huh. Well, that is simple.
HMJr:
He thinks it's the big subscriptions which aren't coming
in.
B:
Uh huh.
HMJr:
And Ted says it's the little ones which aren't coming
in. But that's what I'm out here for and I'm going to
find out and when I find out I'll pass it along to you
fellows. But let me handle St. Louis while I'm here
and that goes for Gamble and for Bell both.
B:
Yes, okay.
HMJr:
I mean -- I don't want Ted to suddenly get on the phone
and barge in on this thing now as long as I'm here. Ted.
G:
I beg your pardon?
HMJr:
I don't want you to get busy on the phone and do any
checking in St. Louis while I'm here.
G:
No. I understand.
HMJr:
And - I mean let me handle this situation.
G:
Yeah.
HMJr:
And 8.8 soon as I've got it I'll let you know what it is.
G:
Yes.
Regraded Unclassified
6
- 6 -
HMJr:
If I find out.
G:
Yes.
HMJr:
And - but we've got two weeks to go and let's get -
let's get the facts.
B:
All right. Well, I'll call all of the Federals except
St. Louis today.
HMJr:
And you understand, Ted, please don't check up on me
out here, now.
G:
No, I understand that.
HMJr:
Because -- let me handle this and I'll let you know
what the facts are.
G:
Fine.
HMJr:
And, please, if a situation similar to St. Louis is
anywhere else in the country, please let us know.
G:
Well, I think you ought to know that I talked to
Burgess last night.
HMJr:
Yeah.
G:
And he had been over to the bank in the afternoon.
HMJr:
Yes.
G:
And the Federal Reserve Bank in New York advised him
that they were between two and three days behind on
E Bonde, and that their guess was that every issuing
agent was anywhere from two to five days behind.
HMJr:
Well, now Head talked with Burgess and D'Olier in
New York yesterday.
G:
Yes.
HMJr:
And both -- I'm reporting only what he tells me....
5:
Yes.
HMJr:
both Burgess and D'Olier told him that New York
and New Jersey were not going well on the little
bonds.
Regraded Unclassified
7
- 7 -
G:
Yes.
HMJr:
Now, maybe this is a local situation, Ted, and I hope
and pray that that's what it 18. See? Hello?
G:
Yes, I'm listening to you.
HMJr:
As soon as I have the facts, I'll call back and give
you the facts.
G:
Yes.
HMJr:
But, we're all together sink-or-swim and I'll do the
best I can and you've got to trust me to handle the
thing out here.
G:
Fine.
HMJr:
And as soon as I have it, I'll let you know but let's
get -- through organized labor let's find out those
two things. I mean, if the President says to me --
this is for Paul and Gaston -- "Well, how does organized
labor feel about 8. post-war credit?" I'd like to be
able to tell him.
G:
Fine.
HMJr:
And how they feel about Social Security -- I want to
know. I just don't want to have what Paul found out
in St. Louis alone.
G:
Yes.
HMJr:
That's not enough.
G:
Yes.
HMJr:
Now, does anybody want to contribute -- I'm determined --
I'm not angry -- I am a little upset but we'll win the
way we always have but it takes hard work.
G:
Well, I think you ought to know, Mr. Secretary, so far
as our people in the field are concerned, we're handling
them as though we have 9/10th of the job jet to do and
have been every night sending them information. We
wired them last night that the whole success of this
drive depended on their doing the job on the E Bonds
and asking them personally to give us a report on it.
Regraded Unclassified
8
- 8 -
HMJr:
Well, in the meantime my speech is all -- I'm holding
up my whole speech until I can find out what 1s what.
G:
But I think you also ought to know that at this stage
of the 2nd war loan drive we hadn't reported 80 much
as a single E Bond sale for the 2nd war loan.
HMJr:
Well, that don't seem possible.
G:
Sir?
HMJr:
That don't seem possible.
G:
Well, I'll tell you when it started - our first
reporting started on the 26th day of April. I have
the report right in front of me.
HMJr:
Yes.
B:
You mean the increase.
G:
The increase. The 26th day of April before we showed
any response to the reporting of individual sales.
We had a four hundred million dollar week that week
on E bonds.
HMJr:
Well, here in St. Louis the banks say they are current.
G:
Says they are what?
HMJr:
They are current.
G:
They are current?
HMJr:
Yeah.
G:
Well, they may be current, but the issuing agents may
not be current.
HMJr:
Well, this man Attebery is calling up moving picture
houses, drug stores and everything and then he 1s
coming out to see me.
B:
There is bound to be a lag in the E bond -- in the
issuing of the savings bonds.
HMJr:
I hope that everything is lovely, but I'm going
to find out. That's what I'm out here for.
Regraded Unclassified
- 9 -
9
G:
Well, there's no harm in that, sir, certainly.
HMJr:
What's that?
G:
I say that there -- that's certainly the thing
to do.
HMJr:
And as soon as I've got the good or bad news, I'll
call back.
G:
Well, we're going on the assumption here, and
have to go on the assumption, Mr. Secretary, that
it's bad.
HMJr:
All right.
G:
So far as the E bonds are concerned until they
start to be good.
HMJr:
Okay. All right.
B:
Well, we may have something to report when you
call back.
HMJr:
All right.
B:
From the other districts.
G:
Now, on this O.W.I. matter
....
HMJr:
Yeah.
G:
it'll be in about fifteen or twenty minutes
yet before I can give you that
HMJr:
Well, phone it in to Fred Smith.
G:
but I'll phone it in to him the minute we get it.
HMJr:
Right.
G:
All right, sir.
B:
Hello?
HMJr:
Right.
B:
Gaston wants to know if you want him to do
anything about your speech.
Regraded Unclassified
10
- 10 -
HMJr:
I can't hear you.
B:
Gaston wants to know if you want him to do
anything about your speech at this time.
HMJr:
I -- I'm sorry -- I don't know what you're saying.
B:
Gaston
HMJr:
Yes.
B:
....want to know -- if you want him to do anything
about your speech.
HMJr:
No.
B:
....at this time.
HMJr:
No - no, the speech is not written yet.
B:
All right.
HMJr:
No.
B:
Then you'll give him instructions when you want
him to work on it.
HMJr:
Right. All right, ask Mrs. Klotz if she'll go to
her room.
B:
All right. She's going.
Regraded Unclassified
11
FEDERAL RESERVE BANK
OF
ST. LOUIS
(2)
September 17, 1943
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Park Plaza Hotel, Room 1504
St. Louis, Missouri
for dear Mr. Secretary:
We have contacted a number of the larger war plants
issuing E Bonds and with one exception, which will be brought
to the attention of Mr. Head, sales are running well ahead of
the April Drive.
None of the plants contacted knew anything about quotas.
One stated sales will be two to three times larger than during
the Second War Loan Drive; another expects sales to be far above
the April Drive; another feels confident sales will show consid-
erable increase over April sales; and one stated that they would
be ten times greater than in April.
All of the plants are accounting to us regularly and the
backlog of orders should be no more than normal, having in mind
increased sales.
Since talking with you this morning, we have compiled
figures which show that sales of E Bonds from September 1 to 15,
for the Eighth District, are approximately 27% greater than for
the corresponding period in April. This compares with an increase
of 30% for the City of St. Louis and 31% for St. Louis County.
There is no question, however, but that sales will have to be in-
creased to reach quotes assigned to states. From my observations
and contacts, sales of Series R: Bonds are coming along nicely, but
will require intensive sales efforts the balance of this month.
I regret that in the absence of quotas, I um unable to
give you figures along the line suggested this morning.
Regraded Unclassified
12
Hon. Henry Morgenthau, Jr.
Page 2
I WRS talking with the Managing Director of our Louisville
Branch this afternoon and he tells me that there is no question
but that Jefferson County, in which the City of Louisville is lo-
cated, will reach its quota and feels reasonably sure that that
part of the state located in the Eighth District will do likewise.
Sincerely
Anthany Vice President
0. M. Attebery
Regraded Unclassified
13
Dinner
in honor of
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
by the
St. Louis Chamber of Commerce
and the
War Finance Committee of Missouri
Friday, September the Seventeenth
Nineteen hundred and forty-three
Chase Club, Hotel Chase
Regraded Unclassified
7
Henry MargenthanJo.
Dinner Menu
CHILLED MELON
MIXED OLIVES
HALF-BROILED CHICKEN
GREEN PEAS
PARSLEY POTATOES
LETTUCE SALAD, FRENCH DRESSING
RASPBERRY ICE
CAKES
COFFEE
Regraded Unclassified
Program
CHARLES BELKNAP, Presiding
Chairman of the Board, St. Louis Chamber of Commerce
STAR SPANGLED BANNER
Scott Field Air Forces Band
The Rt. Reverend WILLIAM SCARLETT, Bishop of the Diocese of Missouri
Honorable ALOYS P. KAUFMANN, Mayor of St. Louis
Honorable FORREST C. DONNELL, Governor of Missouri
The Bomber Crew, "OLD HELLCAT"
Capt. Henry A. Potter
Lt. Harold A. Kohnert
Technical Sergeant Leo F. Mohensky
Technical Sergeant Harry E. Barr
Staff Sergeant Frank A. Ross
Technical Sergeant Dean B. Smith
WALTER W. HEAD
Chairman, War Finance Committee of Missouri
Honorable HENRY MORGENTHAU, JR.
Secretary of the Treasury
Regraded Unclassified
RECEPTION COMMITTEE
Charles Belknap, Chairman
H.G. Leedy
Wilbur B. Jones, Vice-Chairman
Walter W. Head
Hon. Forrest C. Donnell
Wm. C. Connett
Hon. Aloys P. Kaufmann
Rhodes E. Cave
Walter W. Smith
Dan M. Nee
Guy A. Thompson
David T. Beals
Tom K. Smith
Frank C. Rand
J. Lionberger Davis
Charles W. Moore
Jaçob M. Lashly
Harry B. Wallace
W. L. Hemingway
R.B. Caldwell
Bernard F. Dickmann
Robert E. Hannegan
Sidney Maestre
Arthur G. Drefs
John I. Rollings
Samuel W. Fordyce
Boyle O. Rodes
Oscar Ehrhardt
Carl W. Allendoerfer
L. Wade Childress
Albert M. Keller
Hon. Lloyd C. Stark
Chester C. Smith
James M. Kemper
J. Wesley McAfee
Chester C. Davis
Robert E. Lee Hill
ATTENDANCE COMMITTEE
W.H. Bryan, Chairman
W.C. Connett
Wm. J. Bramman
William G. Moore
Judge Allen May
Boyle O. Rodes
Henry Riester
Raymond F. McNally
Tom Halley
L.E. Crandall
W.H. Semsrott
O. W. Attebery
Claude H. Webster
ARRANGEMENTS COMMITTEE
Frank E. Agnew, Jr., Chairman
Clarence M. Turley
E. W. Mentel, Vice-Chairman
H.H. Edmiston
Warren T. Chandler
James P. Hickok
10$
9-25-43
4
MoHugh
This is Walter Head's
speech introducing the Secretary
at St. Louis. / You might want
it; also wire from Ernie Pyle
to Secretary while in
Charlottesville. - Fils
Fred Smith
Room 8901
fil 9/17/43- 15
Mr. Toastmaster, Your Excellency Governor Donnell, Your Honor
Mayor Kauffman, Distinguished Guests, Ladies and Gentlemen:
It is A. real pleasure, a high privilege and a great
honor to present to you our honored guest who very graciously
responded to our invitation to bring us a message concerning the
Third War Loan Drive in the success of which we are all so vitally
interested.
For almost ten years, since January 1, 1934, our dis-
tinguished visitor has served his country, and served it well, as
the Secretary of the Treasury. During this entire period he has
carried A heavy burden of responsibility, for each of these ten years
has been fraught with trying and difficult problems. It has been his
duty and his great responsibility to handle the financial affairs of
the richest, the greatest and the most powerful nation in all the
world. During his period of service the world has been torn loose
from its moorings. rent asunder by the terrific shock of severe
depression, rocked by the terrible impact of global war.
His basic code end his guiding philosophy have been the
welfare of his fellow citizens. Evident in his actions are his
fundamental faith in the American people and his confidence in the
soundness of their judgment.
Be has steadfastly held to the belief that the citizens
of our Republic are desirous of finencing the war on A. voluntary basis,
that they are able to do so and that they will do EO.
Ladies -nd Gentlemen, I present to you the Honorable
Henry Morgenthau, Jr., Secretary of the Treasury.
Regraded Unclassified
16
pre Jr's speech before St. Louis Chamber
O₂ Commerce and War Finance Committee of
Missouri on 9/17/43
Regraded Unclassified
17 9/17/13
LADIES AND GENTLEMEN:
to congress
Today we have had a message ^ from President Roosevelt,
our Commander-in-Chief.
As he points out -- and Iquote -- "We are in the
midst of the Third War Loan Drive seeking to raise a sum
unparalleled in history -- 15 billion dollars. This is
a dramatic example of the scale on which this war still
has to be fought, and presents some idea of how difficult
and costly the responsible leaders of this Government
believe the war will be." (UNQUOTE)
82
Regraded Unclassified
18
- 2 -
I may say right here that I am not in the least
frightened by this prospect. I am sure that we can get
the money. Our national income, this year, will be nearly
150 billion dollars. I am equally confident that the
American people will not balk at any cost -- because
they fully realize that, the more money we spend on
equipment and materiel, the fewer lives will be lost in
battle.
It is to start meeting these huge war expenditures
that we set up the enormous goal of 15 billion dollars, --
exclusive of banks -- for this Third War Loan.
/ and
Regraded Unclassified
19
- 4 -
It is because we have confidence in the American people that
we set out, during the month of September, to get 5 billion
dollars of this 15 billion from the American people -- from
individuals.
Pause
I have heard it said many times that this job cannot
be done -- that the people of the United States are too fond
of their comfort to skimp and sacrifice -- that they do not
have enough knowledge of what this war is about to dig down
and come up with 5 billion dollars. And I can tell you this:
This defeatist attitude toward the Third War Loan is being
aided and abetted by enemy propagandists, who are busy
piling rumor upon rumor. They are passing the word around
that subscriptions are falling behind, that the Government
will never refund the money you put into Bonds, and even --
and this is the most fantastic rumor of World War Two --
that the war will last only as long as people continue to bey
Regraded Unclassified
20
- 5 -
buy Bond
You can take your pick of those rumors. There is not
a vestige of truth in any of them. They are all desperate 1/1/3
attempts on the part of the Axis to make the Third War Loan
fail at any cost.
Well, I have one report tonight that I should like
to pour into Axis ears. Less than an hour ago I had a call
from Washington. I learned that the total sales reported
to Washington, up to this time, have passed the 91 billion
dollar mark. Do you hear that, Germany? Do you hear that,
Japan? The American people, of their own free will, have
turned over to the Government, in nine days, a total of more
over
than 91 billion dollars, or an average of 1 one billion dollars
a day.
Regraded Unclassified
21
- 6 -
And let me tell you something else. I did some
telephoning today to the Federal Reserve System, and I find
that the people of America are buying Bonds so rapidly that
tonight, in one Federal Reserve District, there are literally.
millions of Bonds backed up. We simply cannot work fast
enough to keep up with the selling pace of the War Finance
Committees.
Now all this is good news. It is testimony to the
fact that the ordinary people of America -- those that
Abraham Lincoln so feelingly called "the common people" --
are really behind the Third War Loan. They are like the
local union official who came to see me today. He said:
"Mr. Secretary, we are doing everything we can. But that
is not enough. I know it. I feel this war, because I have
five brothers in it."
Regraded Unclassified
22
- 7 -
Pause
Last night I visited the 6900 block on Berthold
Street, here in St. Louis. The very first day of this Third
War Loan Drive, every family in every house on this block
bought 8. Bond.
I wish Herr Goebbels, Germany's Number Two Big
Mouth, could have visited the homes on this block with me.
He would have had 8. lesson in the American way of life.
Pause
The front door of every house was open. All the
lights were on. All the families sat out on their porches --
from grandmothers down to babies. I went from house to
house -- and one man offered a big, friendly hand and said:
"Howdy, Hank. Give my regards to Franklin when you get
back to Washington."
Well, gentlemen, that's Democracy. That's our America,
Pause How different Germany is!
Regraded Unclassified
23
- 8 -
The typical block leader on Berthold Street is a fine
American woman. Everybody loved her and wanted to help her
put the block over the top. In Germany, the block leaders
are Nazi party members. They come around for contributions,
with 8. couple of Storm Troopers carrying clubs and brass
knuckles. They are SO thoroughly hated that people escaping
from over there say they will be the first men killed when
Germany has a revolution. The Germans support the war out
of terror. They "contribute," or else they disappear into
concentration camps and their families never see them again.
I think our way is better. And so do you.
The rest of the way to our 15 billion dollar goal,
I agree, calls for sacrifice if by sacrifice we mean
doing without a new hat, or a piano, or a beefsteak dinner.
Regraded Unclassified
24
- 9 -
But when I think of the men dying at Salerno, at this
very moment, I wonder if it is really a sacrifice to lend
your money to the Government. I'm not asking you to give
simply
it. I'm asking you to put an extra $100 into a Bond that
1
is a safer investment even than cash, because the number of
every Bond you own is registered in your name at the Treasury.
Sacrifice? Tell that to the youngster who lost his
legs, or arms, tonight in Italy!
Regraded Unclassified
25
M
- 10 -
I know that the job ahead of us is hard but let me
say flatly, here and now, that I am confident we will
reach our goal of 15 billion.
And if the long war ahead makes it necessary for us
to have a Fourth War Loan, and a Fifth, and a Sixth -- I
am also confident the American people will meet their
and
responsibility. Realistically. Grimly. ^ With determination.
For we all understand, now, how much depends upon us.
We know that we must 'Back the Attack.' We must be sure,
as our Commander-in-Chief said today -- and I quote --
"We must be sure that we have assembled the strength to
strike, not just in one direction, but in many directions --
by land, and sea, and in the air -- with overwhelming forces
and equipment."
(END)
Regraded Unclassified
#1
DRAFT -- St. Louis Speech
26
If ever in all history there was a nation that did not want
war, that nation was the United States -- two years ago!
Virtually every man, woman and child in this country -- thanks
to the education that 18 possible under Democracy -- knows that
war is needless. We can settle our problems with our brains. We
don't need to use machine-guns.
The same thing may be said of the nations that are our allies.
When this war started, there were only 11 anti-aircraft guns to
protect the whole city of London. I didn't say 11 hundred. I said
11! Millions of Englishmen, in B. country-wide vote, had made it clear
that they would not support a war. The very attempt to appease Hitler,
which we criticized so bitterly at the time, although we were doing
the same thing ourselves, was a measure of Britain's desire for
peace. Certainly nobody can say that England wanted this war.
The same with Russia. The Russians were trying to lift
themselves out of the Middle Ages, leaping over whole centuries in
a few years' time. They were building dams and hydro-electric
systems; they were teaching themselves to read and write. They
were busy with housing projects. War would interrupt their
industrial development. They were ready to go to any length to
escape or postpone it -- up to and including a non-aggression pact
with Germany, the country that threatened them.
Nor can anybody say that China wanted war.
Regraded Unclassified
- 2 -
27
The long centuries of education have borne had fruit. Every
writer, every teacher for a thousand years has told us that war is
we had
cruel and faelish and unnecessary. And at last, because books are no
longer chained to the churches or hidden away in the libraries of
noblemen, all of us know that to be true. #6 have learned the
lesson. War to needless
Then why if war 18 needless -- are we at war?
For one reasons
We are at war because we made a mistake.
In a sense, it is a mistake of which we may be proud.
It 18 a mistake that could only be made by & Democracy.
100 didn t want war that we
We were so sure, in our Demeeracy that all men were free and
equal; that we thought oguntries war as did.
thought nobrdy felt about wanted it, -
We were stupid enough to want anything no Chastly and horrible as
^
war. Was there, anywhere on earth, a mother mad enough to want to see
her son wounded, or blinded, or killed? No; a mother like that would
be a monster. Was there, anywhere on earth, a father vicious
enough to want his son to crouch behind a machine-gun and commit
murder? No; a father like that would be a monster.
HAnd Monsters, like dragons, were creatures of legend, we thought --
creatures out of the age of fable.
We were sure there were no monsters in our modern world.
We found out that there were.
So today we are at war -- the strangest war in the history
of mankind. For all of us who are fighting it, except the Germans
and Japanese, know that it is unnecessary.
today at
Regraded Unclassified
- 3 -
28
The waste of it! The sheer waste!
during
We will spend for war, this year alone, a hundred billion
what A
dollars. Think of the things we could do with that only money!
Take public health, for instance. If we spent a billion dollars
a year for ten years
total
B
ten
dollars,
B
one-tenth
of the hundred billion we will spend this year alone on the war
we could enough build hospitals 360 thousand beds and We could build
to
S
nine than we now dovès
500
/
supply
5
hundred
health
centers
Added
to
the
facilities
to
could
full-time health service every community in the
provide fatel care for all american
United States. We could provide full care both before and the
and their Faties who mild such care at childbirth
birth of their babies, for all the American mothers who de not
now receive such care.
We could have allthe local and State cancer clinics we need.
We could probably wipe out venereal diseases altog
We could
vertarily put an end to
probably tuberculosis. We could put acide 10 million dollars
for mental hygiene and 20 million for industrial hygiene, making sure
that the people in our factories worked under healthy, safe con-
ditions.
and many other thing and n
We could do all that/wi th 10 billion dollars. To this war, we
that amount every
are spending roughly 10 month!
Think of the housing we could build with 100 biblion dollars.
Think of the automobiles we could buy with 100 billion dollars.
And think #We are spending the harry on was
But of this instead
on
We aren't getting that cancer clinics, the housing, the auto-
mobiles, for one reason and only one reason because the Germans
and Japanese have taken them away from us! because
Japan døve was freed AMA voto
Regraded Unclassified
- 4 -
29
This war unnecessary? When a hold up Jabe a pistol
into the emall of doing Come thing about it becomes
It This war is necessary because the Germans and value the Japs
have made it necessary, Welve got win want to livel
H It is to necessary It we our
That the is necessaryl was lives. and A open we livep freet, that, we may lose
Drifung + and dreaming along, blandly certain that nobody
would ever attack us, we nearly were in & frame of mind, when
lost
that
was
at
the
start
the war began, which can still lose it for use Yes, lose it!
The Army was sound sleep at Pearl Harbor,
so was the Nevy
After the Japs over-ran the Phillipines our troops fought
bravely -- but that does not alter the fact that in the Phillipines
too, we were caught napping Virtually every Pal ane we had
blown to bits
was bonhed to pieces on the ground.
The point I AB making that a certain frame of mind to Delieving
that ave don 7 need to hate
that this war isn't necessary, believing senit to IN
and Bill
we still
and destroy in order to win -- can CRITE to lose.
^
If, as you hear me speak these words, you say to yourself.
'6h, but we'll win, we're winning,' then you are in exactly the frame
of mind
+
which can 1 lose the was fa us,
us to stay
It 18 exactly the frame of mind Germany wants you to be in.
The German propaganda experts go to any length to get Americans
even
to thinking them Cormana that are dead 2000 people. They have gone
80 far as to send photographs of American flyers' graves to the
flyers' mothers and fathers here in the United States. The photo-
graphs are show that they in are burying American flyors in neat,
are that expected shuch lose to say net of to by German they
well-kept cemeteries.
The the flyn
are
14
r/ be 45 drd,
Regraded Unclassified
30
-5-
And
that is just what the Germans want. They want to keen as many Americans
A possible from hating them -- because, if we don't hate them, we won't
as
We can be
fightyxwix sunnort the ware Our soldiers won't fight well, and
$
killed
able to kill our boys more easily.
Both the Germans and the Jananese know the it 5 hard for
Americans to learn to hate.
And when you don't hate,
-
in battle, you'reary game. you die.
Regraded Unclassified
31
-5-
We haven't seen the enemy at work. We haven't been
bombed. We have seen pictures of bombed buildings in Hamburg
RXX and London, but they have only been pictures. We have
never dragged the torn bodies of our own relatives out of such
buildings.
The British know what they are fighting for because
they have been in this war a long time, The British fight for
their very lives; they fight to stop the Germans from bombing
their homes; to stop them from killing their families. The British
front line soldier slashes forward without mercy. He hates the
enemy.
a
Our troops learned slowly. When American soldiers
were first sent abroad, enemy pr isoners marveled at *** the
thoughtlessness with which they moved. They couldn'
It took awhile for the American soldiers to learn
to hate. At the Kasserine Pass, in North Africa, scores of
them died because they learned too late.
Let me quote from an eyewitness description of that
battle. These are the words of a private who was there. I
quote:
Regraded Unclassified
32
7
6
a
under his chute. That is German efficiency. If they can kill OUT pilot
before he lands safely, he won't fly against then again.
$ 9/ws that DAW that happen, a
wid
few
times,
get over our
donnatle
y notions that the German boys are decent, supert youngsters like our
own.
111 might are
Or year missi an American RÉEXEX medical corps man afx crawl
out to take carry water and medicine to a wounded German in the field. Then
we'd all
a German machine gun that has been miting open up and chops him to
in hits half 4 The Japs are very good at that, too. They masks have comb
sharnshooters
with
1
instructions to ambush and kill every
me
of
Red Cross men they are
In the First World War we heard hundrede many atrocity stories.
After the war we learned **** most of them were untrue. In this war there
and
streetly the conduct of the German or Jan-
chese soldierfinxwx day after day, is more shen shocking than any
atrocity story.
1
burn
to
the
grounds
They *** don't way They to just improck shoot 16 pat priseners. with capture thesex They horrible village. torture cruelty Play them. They That go way, out they of their
they'll frighten us out of the war.
reported that the Germans at Salerno
Only two days ago the newspapers
twice were truce, advancing + then throwing under down white the flags flags fand
treachery doesn't were shock us, geal to
sttacking In this war, much I'm
Bheled the Germans:
didn't fore our solders, either They
Regraded Unclassified
33
-6-
"I know so well those men who were cut to ribbons
at the Kasserine Pass, and I knew why they were thrown into con-
fusion, panicked by attacks, and accepted their fate almost par-
alyzed. When they jumped into foxholes to let the tanks roal
over them, and were bayonetted in these foxholes by the infantyy
that came behind the tanks, they died with an astonished look on
their faces, as if they wanted to ask: 'Could that be possible,
would they really do that?'" (Unquote.)
It takes a lang time for Americans to learn to hate.
But we had better learn fast, now -- all of us -- just
as our soldiers and sailors have had to learn.
How are we going to do it?
If we could all take a trip to the front, it would
be easier. We'd see an American fighter pilot, with his plane
in flames, take to his parachute. Then we'd watch while half a
dozen German planes circled back and machined-gunned him as he
dagi dangled helpless
Regraded Unclassified
12
DRAFT -- St. Louis Speech
34
If ever in all history there was a nation that did not want
war, that nation was the United States -- two years ago!
Vir
bually
and
child
in
Unite
country
hanks
-
education
We of the possible democracies Democracy
to
Wav
to
know
that war
is needless. We can settle our problems with our brains. We don't
need
machine-guns,
A The This same is true thing may not fn be instance, us, the nations but for are
our allies.
When this war started, there were only 11 anti-aircraft guns to
protect the whole city of London. B aidn e 11 hundred. I said
in
Millions of Englishmen, in a country-wide vote, had made it
clear that they would not support
war.
The
Hitlery which we oriticized so bitterly at the timey although we were
doing the thing ourselves,
of
Britain
desire
for
Certainly nobody can say that England wanted this conflict.
The
came
The Russians were trying valiantly to lift them- m-
selves out of the Middle Ages, leaping over whole centuries in
a few years' time. They were building dams and hydro-electric systems,
they were teaching themselves to read and write.
housing War ould only interrupt their development.
They were ready to go to any length to escape or postpone it,
and including
aggression
pact
$
Germany,
the
country
threatned them.
Nor can anybody say that China wanted war.
Every writer, every teacher for a thousand years had told us that
was
war
unnecessary. And at last we had learned the lesson.
Regraded Unclassified
- 2 -
35
Then why if war is needless -- are we at war?
thinks
For
one
because we made a mistake.
In a sense, that it 18 a mistake of which we may be proud.
believed
We were BO sure we didn't want war that we nobody wanted
^
insane
it. Was there. anywhere on earth, a mother
enough to want to see
her son wounded, or blinded, or killed? No; B. mother like that would
be 2. monster. Was there, anywhere on earth, a father vicious enough to
want his son to crouch behind a machine-gun gun and commit murder? No;
8 father like that would be & monster.
And monsters, like dragons, were creatures of legend, we thought --
creatures out of the age of fable.
We were sure there were no monsters in our modern world!
We found out
there were!
And
today, we are at war.
The waste of it! The sheer waste!
We will spend
during this year alone, a hundred billion
dollars for war.
Think of what we could do with
vast that money! sum of
In
public health, for instance. If we spent only & billion
dollars a year for ten years -- one-tenth of the hundred billion we
the
will spend this year on war -- we could build enough hospitals to ve
us 360 thousand beds more than we now have.
/
We could build 500 health
a
centers and supply full-time health service to every community in the
United States. We could provide full care for all American mothers
and their babies who need such care at childbirth.
Regraded Unclassified
- 3 -
36
We could have all of the local and State cancer clinics we need.
We could probably wipe out venereal disease. We could almost certainly
put an end to tuberculosis.
We could do all that and many other things with 10 billion dollars.
And in this war, we are spending roughly that amount every month!
Think of the housing we could build with 100 illion dollars.
Think of the automobiles we could buy with 100 billion dollars.
We are spending the money on war instead of cancer clinics, or
housing, or automobiles, because Germany and Japan have forced us
toto
to go to was.
This war unnecessary?
This war 18 necessary because the Germans and the Japs have made
it necessary.
It 18 necessary if we value our both lives and our freedom.
If we forget that, we may lose the war and our lives and freedom
Drifting and dreaming along, blandly certain that nobody would
ever attack we nearly lost the war at the start.
#Pemember us, Pearl Harbor! Remember the Phillipines!
After the Japs over-ran the Phillipines, our troops fought
bravely but that does not alter the fact that in the Phillipines, too,
practically
every plane we had was blown to bits on the ground.
Believing that this war isn't necessary, believing that we don't
need to hate and kill in order to win -- we can still lose.
If, as you hear me speak these words, you say to yourself, 'Oh,
but we'll win, we're winning,' then you are in the frame of mind which
can lose the war for us.
Regraded Unclassified
4 -
37
have
It 18 exactly the frame of mind Germany wants us to
The German propaganda experts go to any length to get Americans to
fail, thank that way. They even send photographs of dead American flyers'
graves to the flyers' mothers and fathers here in the United States. The
photographs show In neat, well-kept cemeteries. The flyers'
parents are expected to say, "If the Germans are showing that much
love and respect to my boy, they can't be BO bad."
And that 1s Just what the Germans want. They want to keep as
many Americans as possible from hating them -- because, if we don't
hate them, we won't support the war. Our soldiers won't fight as
let them hill and
well. We can more easily.
Both the Germans and the Japanese know it's hard for Americans
to learn to hate.
It hard for MA to learn to bate,
And / when you don't hate, in battle, you're easy game. You die.
We haven't seen the e enemy at work. We haven't been bombed.
We have seen pictures of bombed buildings in Hamburg and London,'
to
yes
they have only been pictures We have never dragged the torn bodies
loved one
fombed
of our own
out of
buildings.
The British know what they are fighting for because they have
been in this war a long time,
lives; they fight to stop the Germans They from bombing their homes; to keep
fight
savagely
for
their
very
etop them from killing their families. The British front line soldier
slashes forward without mercy. He hates
It took a while for
American soldiers to learn to hate.
Amindan
At the Kasserine Pass, in North Africa, scores of
died because
they learned too late.
Regraded Unclassified
- 5 -
38
Let me quote from an eyewitness description of that battle.
These are the words of a private who was there. I quote:
"I know so well those men who were cut to ribbons at the
Kasserine Pass, and I knew why they were thrown into confusion,
panicked by attacks, and accepted their fate almost paralyzed.
When they jumped into foxholes to let the tanks roll over them, and
were bayonetted in these foxholes by the infantry that came behind
the tanks, they died with an astonished look on their faces, as if
they wanted to ask: 'Could that be possible, would they really do
that? (Unquote.)
It takes a long time for Americans to learn to hate.
But we had better learn, now -- all of us -- just as our
soldiers and sailors have had to learn.
How are we going to do it?
visit
might
If we could
the front/ it
be
easier.
We'd see an American fighter pilot, with his plane in flames, take
to his parachute. Then we'd watch while half a dozen German planes
circled / back and machine-gunt him as he dangled helpless under his
chute. That is German efficiency. If they can kill a pilot before
he lands safely, he won't fly again.
when
notion
we saw that happen a few times, we'd get over our
that
the German boys are decent, honorable youngsters like our own.
,I
watch
Or we might
an American medical corps crawl out to carry water
and medicine to a wounded German in the field. Then we'd see a German
machine-gun open up and chop him to bits.
Regraded Unclassified
- 6 -
39
The Jape are very good at that, too. They have sharpshooters
will th ins tructions to ambush and kill every one of our Red Cross men
they 0001
there were
In the First World War many atrocity stories. After the
that
war we learned most of them were untrue. In this war the conduct of
^
the German and Japanese soldiers, day after day, 18 more shocking than
any atrocity story.
Only two days ago the newspapers reported that the Germans at
Salerno were advancing under white flags of truce, contemptate and then throwing
our men.
down the flags and attacking In this war, such treachery doesn't
even shock us. I'm glad to say/ it didn't fool our soldiers,
They killed the Germans and laughed at them.
Regraded Unclassified
40
-7-
Only yesterday the New York Times reported a meeting of leading
educatora soletern of 30 fanalga nations at Harper's Ferry
in West Virginia. Again / I quote: "As educators from Czechoslovakia,
Greece, Poland, Belgium, Norway and China rose to tell what has harmened
to education under Nazi or Japanese rule, the story was all the same.
It was a refrain of destruction, plunder, torture, death and mutilation;
schools have been burned, libraries sacked, scientific equipment stolen.
miseums closed. The Nazis have succeeded in making an intellectual des-
ert of the European lands." (Unguste)
There are no atrocity stories in this war because every story
we hear is an atrocity!
Slowly but surely, as we hear more and more of them, we are
learning
to hate our musder ous, arrugant enemy.
We know that at this very moment, on the beach at Salerno,
American soldiers are dying by thousand5. Gone are the days when
the casualty lists told
of a hundred killed here, a hundred killed
there. Xyxxxxxx We have landed on the continent of Europe. The war is
really beginning, for us. Italy is already a consuming faxxxxxxxx fur-
nace. And the fuel the Germans are burning in that furnace
is
the life of een. Not hundreds but thousands of our American
American for
soldiers, fighting the tought - doing to them at this sement
see
in Italy, will never walk again, will never again -- will never breathe
agin.
Salema
Maybe will teach us to hate the Nazial
Let me quote again -- this time from John Steinbeck, the novelist.
He writes. from Europe: "I have seen the hospitals with mauled men, the
Regraded Unclassified
41
-8-
legless and the blind.
the fingerless hande and burned faces
all
the ***** destruction that steel and fire can do to & man's body and
mind. I have seen children hauled out of blasted buildings.
lumps of
crushed, dirty meat in pinafores.
dead, boxed and buried.
carrion.
"All this," Steinbeck says, "is the backdrop of the Third War
Loan
the drive for 15 billion dollars. It should not be a matter
of who will lend his money.
All this is the backdrop
but, of rather, the Third who War dares Loan. not to?" (Unguate).
Yes
yes, it is
All this is why. as the Secretary of the Treasury of the United
States, I must demand ask from you your taxes to for heavier than any other generation of
Americans has ever paid. All this is why I must ask you to get along with only
no
the bare necessities of life in order to subscribe
the
total of 15 billion do Hers to the Third War Loan. All this is why I XXXX
warn
must
you that there will be a Fourth War Loan, and a Fifth, and a
Sixth.
I think we have
reason enough to Date the Nazis. I say,
"Damn them to Hell - the Hell
they have created for the world!"
Regraded Unclassified
42
#
#3
Regraded Unclassified
43
DRAFT - St. Louis Speech
If ever in all history there was 8. Nation that did not
want war, that Nation was the United States -- two years ago!
Thanks to education, we of the democracies, know that war
is needless. We can settle our problems with our brains. We
don't need machine-guns.
This is true not only of us, but of our Allies.
When this war started, for instance, there were only 11
anti-aircraft guns to protect the whole city of London.
Millions of Englishmen, in a country-wide vote, had made it
clear that they would not support war. Certainly nobody can
say that England wanted this conflict. The Russians were trying
valiantly to lift themselves out of the Middle Ages, leaping
over whole centuries in a few years' time. They were building
dams and hydro-electric systems, they were teaching themselves
to read and write. War could only interrupt their development.
They were ready to go to any length to escape or postpone it.
Nor can anybody say that China wanted war.
Every writer, every teacher for & thousand years had told
us that war was unnecessary. And at last we had learned the
lesson.
Then why -- if war is needless -- are we at war?
Regraded Unclassified
1
44
- 2 -
For one thing, because we made a mistake.
In a sense, it is a mistake of which we may be proud.
We were 80 sure that we didn't want war that we believed
nobody wanted it. Was there, anywhere on earth, a mother
insane enough to want to see her son wounded, or blinded, or
killed? No; a mother like that would be a monster. Was there,
anywhere on earth, a father vicious enough to want his son to
crouch behind & machine-gun and commit murder? No; a father
like that would be a monster.
And monsters, like dragons, were creatures of legend, we
thought creatures out of the age of fable.
We were sure there were no monsters in our modern world!
We found out there were!
And, today, we are at war.
The waste of it! The sheer waste:
We will spend, during this year alone, a hundred billion
dollars for war.
Think of what we could do with that vast sum of money!
In public health, for instance. If we spent only a billion
dollars a year for ten years -- one-tenth of the hundred billion
we will spend this year on the war -- we could build enough
hospitals to give us 360 thousand beds more than we now have.
Regraded Unclassified
45
- 3
We could build 500 health centers, and supply a full-time
health service to every community in the United States. We
could provide full care for all American mothers and their
babies who need such care at childbirth.
We could have all of the local and State cancer clinics
we need. We could probably wipe out venereal disease. We
could almost certainly put an end to tuberculosis.
We could do all that, and many other things, with 10
billion dollars. And, in this war, wo are spending roughly
that amount every month;
Think of the housing we could build with 100 billion
dollars:
Think of the automobiles we could buy with 100 billion
dollars!
We are spending the money on war - instead of cancer
clinics, or housing, or automobiles - because Germany and Japan
have forced us to go to war.
This war unnecessary?
This war is necessary because the Germans and the Japs
have made it necessary!
It is necessary if we value our lives and our freedom!
If we forget that, we may lose both the war and our lives
and freedom!
Regraded Unclassifie
46
- 4 -
Drifting and dreaming along, blandly certain that nobody
would ever attack us, we nearly lost the war at the start.
Remember Pearl Harbor! Remember the Philippines!
After the Japs over-ran the Philippines, our troops fought
bravely - but that does not alter the fact that in the
Philippines, too, practically every plane we had was blown to
bits on the ground.
Believing that this war isn't necessary, believing that
we don't need to hate and kill in order to win -- we can still
lose.
If, as you hear me speak these words, you say to yourself,
'Oh, but we'll win, we're winning,' then you are in the frame
of mind which can lose the war for us.
It is exactly the frame of mind Germany wants us to have.
The German propaganda experts go to any length to get Americans
to feel that way. They even send photographs of dead American
flyers' graves to the flyers' mothers and fathers here in the
United States. The photographs show the graves arranged in
neat, well-kept cemeteries. The flyers' parents are expected
to say, "If the Germans are showing that much love and respect
to my boy, they can't be so bad."
Regraded Unclassified
47
- 5 -
And that is just what the Germans want. They want to
keep as many Americans as possible from hating them -- because,
if we don't hate them, we won't support the war. Our soldiers
won't fight as well. We will let them kill us more easily.
Both the Germans and the Japanese know it's hard for
Americans to learn to hate.
And when you don't hate, in battle, you're easy game.
You die.
It is hard for us to learn to hate.
We haven't seen the enemy at work. We haven't been bombed.
We have seen pictures of bombed buildings in Hamburg and London;
yes. But they have only been pictures to us. We have never
dragged the torn bodies of our own loved ones out of bombed
buildings.
The British know what they are fighting for because they
have been in this war a long time. They fight savagely for
their very lives; they fight to stop the Germans from bombing
their homes; to keep them from killing their families. The
British front line soldier slashes forward without mercy. He
hates.
It took a while for our American soldiers to learn to hate.
At the Kasserine Pass, in North Africa, scores of Americans
died because they learned too late.
Regraded Unclassified
48
- 6 -
Let me quote from an eyewitness description of that battle.
These are the words of a private who was there. I quote:
"I know 80 well those men who were cut to ribbons at the
Kasserine Pass, and I knew why they were thrown into confusion,
panicked by attacks, and accepted their fate almost paralyzed.
When they jumped into foxholes to let the tanks roll over them,
and were bayonetted in these foxholes by the infantry that came
behind the tanks, they died with an astonished look on their
faces, as if they wanted to ask: 'Could that be possible, would
they really do that?'" (Unquote.)
Yes - it takes a long time for Americans to learn to hate.
But we had better learn, now -- all of us -- just as our
soldiers and sailors have had to learn!
How are we going to do it?
If we could visit the front it might be easier. We'd see
an American fighter pilot, with his plane in flames, take to
his parachute. Then we'd watch half a dozen German planes
circle back and machine-gun him as he dangled helpless under his
chute. That is German efficiency. If they can kill & pilot
before he lands safely, he won't fly again.
When we saw that happen 8. few times, we'd get over our
notion that the German boys are decent, honorable youngsters
like our own.
Regraded Unclassified
49
- 7 -
Or we might watch an American medical corps man crawl
out to carry water and medicine to a wounded German in the
field. Then we'd see a German machine-gun open up and chop
him to bits.
In the First World War there were many atrocity stories.
After the war we learned that most of them were untrue. In
this war the conduct of the German and Japanese soldiers, day
after day, is more shocking than any atrocity story.
Only two days ago the newspapers reported that the Germans
at Salerno were advancing under white flags of truce, and then
throwing down the flags and attacking our men. In this war,
such contemptible treachery doesn't even shock us. I'm glad
to say it didn't fool our soldiers. They killed the Germans
and laughed at them!
Only yesterday the New York Times reported a meeting of
leading educators of 30 nations at Harper's Ferry in West
Virginia. Again I quote: "As educators from Czechoslovakia,
Greece, Poland, Belgium, Norway and China rose to tell what has
happened to education under Nazi or Japanese rule, the story
was all the same. It was a refrain of destruction, plunder,
torture, death and mutilation; schools have been burned,
Regraded Unclassified
50
- 8 -
libraries sacked, scientific equipment stolen, museums closed.
The Nazis have succeeded in making an intellectual desert of
the European lands." (Unquote.)
There are no atrocity stories in this war - because every
story we hear is an atrocity!
Slowly but surely, as we hear more and more of them, we are
learning to hate our murderous, arrogant enemy.
We know that at this very moment, on the beach at Salerno,
American soldiers are dying by thousands. Gone are the days
when the casualty lists told of a hundred killed here, a hundred
killed there. We have landed on the continentof Europe. The
war is really beginning, for us. Italy is already a consuming
furnace. And the fuel the Germans are burning in that furnace
is the life of American boys. Not hundreds, but thousands of
our American soldiers, fighting tonight in Italy, will never walk
again, will never see again -- will never breathe again.
Maybe Salerno will teach us to hate the Nazis!
Let me quote again -- this time from John Steinbeck, the
novelist. He writes, from Europe: "I have seen the hospitals
with mauled men, the legless and the blind
...
the fingerless
hands and burned faces
...
all the destruction that steel and
fire can do to a man's body and mind. I have seen children
Regraded Unclassified
51
- 9 -
hauled out of blasted buildings
...
lumps of crushed, dirty
meat in pinafores
...
dead, boxed and buried
...
carrion.
"All this,' Steinbeck says, "is the backdrop of the Third
War Loan
... the drive for 15 billion dollars. It should not
be a matter of who will lend his money
...
but, rather, who
dares not to?" Unquote
All this is the backdrop of the Third War Loan.
Yes -- yes, it is.
All this is why, as the Secretary of the Treasury of the
United States, I must ask you to pay taxes heavier than any
other generation of Americans has ever paid. All this is why
I must ask you to get along with only the bare necessities of
life, in order to subscribe 15 billion dollars to the Third War
Loan. All this is why I must warn you that there will be a
Fourth War Loan, and a Fifth, and a Sixth.
I think we have reason enough to hate the Nazis. I say,
"Damn them to Hell -- the Hell they have created for the world!"
Regraded Unclassified
# 4
52
Tonight thousands of British and Canadian
troops are driving hard into the heart of Italy.
DEPENDERS
The Italian troops, confused and bewildered by the
driving force of the men and the equipment of the
United Nations, have not yet been able to put up a
strong defense.
The American Seventh Army, after having driven
the Nazi and Fascist leaders to near distraction by
simply disappearing from sight, is now about to
materialize. Soon, very soon, this well-equipped
Seventh Army will strike. At this moment there 18
such power poised as our adversaries have never
=
seen and could never imagine. And it is power that
counts. Power is the only thing that Axis leaders
can understand.
The reason I am telling you this tonight is
because the job of developing and maintaining
overwhelming power for the United Nations is largely
your job. To create this power requires tireless
effort on the Home Front. It means long hours in the
factories and shops and offices everywhere in the
country.
requires
requires
But 1t dess not only need effort, it also needs
money. To do the job with which we are faced, to
supply our attacking forces with the machines of war,
Regraded Unclassified
53
- 2 -
with ammunition, and transportation, and to maintain
takes staggering
an army of six million men, requires huge amounts
of money.
The American people have shown a commendable
willingness to supply this money. They have not
stopped to reckon the cost of preserving civilization.
They know there can be no economic justification for
failing to save freedom.
Now the Government could get the money required
in several ways. Our credit is the best in the world,
and we could simply go to the banks and ask them for
enough money to finance the war. Or we could print
the money, as they do in some of the Axis countries,
but but 1f we took either of these two easy courses we
would be certain to lose the peace whether or not
we won the war. We would have an inflated economy,
which would spread out for decades the period of
reconstruction.
We can get the money for the war mily without
risking our future only 1f we get it from the American
people. For this reason we are asking you to help us
keep our books balanced to the greatest possible
degree through your payment of taxes and through your
lending your the Government money by buying War Bonds.
Regraded Unclassified
54
- 3 -
Tonight, we are launching a campaign to raise
fifteen billion dollars through this voluntary War
Bond program.
Whole communities -- whole states -- are on
a war-time alert toright, with people waiting in
their homes for flying squadrons of special Bond
salesmen.
In these weeks to come, every home, every office,
every factory -- even remote farms will be visited
by War Bond salesmen. Every state of the 48 has its
plans for parades, carnivals, and mass meetings.
So eager are the armed forces to do everything in
their power to help this Drive that General Eisenhower
has sent home thirteen hundred tons of captured enemy
who MR berry to Grey bonds
equipment, so that you can see the kind of weapons
that our weapons must destroy.
We can be sure that our enemies will watch this
drive with the keenest interest. They know that
success in this undertaking can and will materially
shorten the war. They know that the more money the
American people lend to their Government, the more
powerful and relentless will be the American forces
in the field. And finally, they know that only a
united and determined America could possibly produce
so large a sum of money on a voluntary basis as 15
Regraded Unclassified
55
- 4 -
billion dollars.
Last April, when we launched the Second War
Loan drive for 13 billion dollars, the radio stations
of Germany, Japan, and Italy filled the air with jeers,
certain
pointing out that the drive was bound to fail, that
Americans would never lend SO much money to their
Government. Then, when the Government not only received
what it asked for, but found that the people had sub-
scribed an extra billion or so for good measure, the
air became suddenly quiet. The overwhelming success
of the Second War Loan drive demonstrated to the huge
disappointment and chagrin of Axis propagandists that
the people of this woule and Limid democracy stood firm
behind their troops. The axis leaders were forced to
recognize that the American people meant to buy and
build whatever machines of war were necessary to get
equipment was
this war over and finished. The American people were
determined to have victory no matter what the cost in
dollars, or Sacrifice.
The Third War Loan, which we are starting tonight,
will also succeed.
It will succeed because, by this time, every man
and woman in the United States recognizes the importance
of generously financing the costs of war. They know
that good equipment and plenty of it, means less loss
Regraded Unclassified
- 5 -
56
of life on the battle front. They have seen what
happened at Kiska when the Japs, cringing at the
thought of meeting the power and force of American
and Canadian troops, simply withdrew, in the black
of night, to parts unknown.
It is not likely that we can move into Berlin
the way our troops marched into Kiska without a living
enemy in sight because, there will be Corman planes
the last of the Luftwate will he there
to ward off to final defeat; there will be guns
blazing away in defiance. But one thing is certain;
the more bombs and shells that we can pour into
Germany's war production and transportation centers,
the weaker Germany's resistance will be, and the
more American lives we shall be able to save.
It 18 the sum total of your War Bonds, translated
into planes and gasoline and bombs and well-trained
pilots and coldiers and suttors, that the Axis nations
fear above all things. Therefore your bonds -- that
extra $100 bond that you are being asked to buy in the
Third War Loan will help MAS crush the enemy into
the unconditional surrender which will alone satisfy
us in our just wrath
Regraded Unclassified
/ 9/17/43
ST LOUIS SPEECH
57
all
If
ever
in
history
of
the
there XXXRX was a
that nature
nation that did not want war, was the United States years ago!
And with good of Virtually every that man, woman and child in this
country -- thanks to the education is possible under democracy --
our
knows that war is needless. Te can settle problems with
our brains. We don't need to use
machine-guns.
The same thing may be said of the shor nations which that
are today our welcome allies.
Be Thxthmxxhainx When this war
motule
started, there were only 11 anti-aircraft gune to protect the city of
London. I didn't say 11 hundred. I said 111 Something like e million
A
of
country-wide made it chas
Englishmen, in a vote, had that they would not support
a
^
to approve
"ar. Thexaxyx very attempt Hitler, which we criticized
the enth they surselves, was
so bitterly at the time / although we were doing
8.
measure
of Britain's desire for neace. Certainly nobody can say that England
wanted
this was.
The name with Russia. The Russians were trying to lift
out
themselves
from
of
over
the
Middle
Ages
leaning XXXX whole
,
centuries, in & few years' time. They were building dams and hydro-
They avore
Theynic busy
electric systems, teaching xix themselves to read and write,
s
would
industrial
housing projects. War was bound to interrunt their development,
action. They were ready to go to any length to escape or - nost-
none it
un to and including & non-aggression nact with
Germany, the country that threatened kings them
The same with Ohina Any body who and calls the Chinese
a
wer like moonle to too ignorant to deserve serious consideration.
Add no was, can anybody eng that China
Regraded Unclassified
58
-2-
The he long cent ries of education have borne fruit. Every
fn a thousand years
-riter, every teacher:
has told us that war is cruel
and foolish and unnecessary. And at last because books are no longer
the
chained
to
the
in churches, or hidden away in the libraries of
3
that betwee. We have learned the lesson
for noblemen, all of us know War is needless. will will
1the genere Vion that learned - there could be - end to -
is
Then why if war needless -- are we at war?
"e are at war because we made a mistake. H In a sense, it only is a mis-
take
of
which
we
may
1
be proud. 91% It is a mistake that could be made
only
by a democracy.
We were BO sure, XX in our democracy, that all men were free and
equal, that thatx we thought all theratherx countries felt about war
as we did. To nut it simply, - couldn't believe Any other countries
were stunid enough to want anything as ghaetly and horrible as war. Was
son wrunded,
there, anywhere on 8a. th, a mother mad enough to want to see her
lg
on fulled ?
the that
blinded, his arme No; such a mother would be a monster.
A
Yes there, anywhere on earth, a father
went
vic ous enough to bolieve his son memby to crouch behind
commit muder ?
a machine-gun and shou down the women and children of some other nation?
like the
No: such a father would be & monster.
withought- creatines
Monsters, like dragons, were creatures of legend out of the
age of fable.
Livere no
our
To were sure there be monsters in modern world,
^
automobiles and sirplanes.
Te found out that there were.
A
today we are at war
the strangest war in
the history of mankind. For all of us who are fighting it, excent the
Germane and Japanese, know that were it to cheatly and horrible and, most
Regraded Unclassified
59
-3-
The waste of it! The sheer waste!
Te will spend for war, this year alone, a hundred billion dollars.
Think of the things we could do with that money!
Take public health, for instance. If we spent a billion dollars
is year for ten years -- a total of ten billion dollars, or one senth of the
hundred billion we will spend this year alone on the war -- we could build
hospitals providing 360 thousand beds. We could build 5 hundred health
centers, Added to the facilities we already have, we could nut 8. full-
time health service into every community in the United States. We could
provide full care, fax both before and after the birth of their babies,
for ell the American mothers who do not now receive such care.
Te could have all the local and State cancer clinics me need.
Te could probably wine out venereal diseases altogether. Te could probably
wine out tuberculosis. 7e could nut aside 10 million dollars for mental
hygéene and 20 million for industrial ygiene, making sure that sex the
neonle in our factories worked under healthy, safe conditions.
lie could do all that with 10 billion dollars. In this war, we
roughly
are spending 10 billion dollars & month!
or Taink hink of the housing we could bu build with 100 billion dollars.
Think of the automobiles we could buy with 10 billion dollars.
And think of this -
Dut
It
1
high
time
to
reflect
that
Earen't getting
the cancer clinics, the housing, the automobiles, for one reason and only
one reason -- because the Germans and Japanese have taken them away from
us!
IV 18 high time for un to stop thinking that
his war
un-
necessary. When R hold-un man jabe a vistol into the small of your back,
Regraded Unclassified
60
doing something about it becomes necessary. This war is necessary because
the Germans and the Jape have made it necëssary. We've got to win it if we
want to live! That is necessary!
Drifting and dreaming along, blandly andx
daily certain that nobody would ever attack us, we Americans were in a
frame of mind, when the war began, which can still lose it for us. Yes,
lose it!
The Army was sound alseen, at Pearl Harbor.
So was the Navy.
After the ****** Japs over-ran the Phillipines, our troops
fought bravely -- but that does not alter the fact that in the Phillinines,
too, we were caught nanning. Virtually every plane we had there was
bombed to pieces right on the ground.
The noint I em making that a certain frame of mind -- believing
that this war isn't necessary, believing that it isn't necessary to kill
and destroy in order to win # -- can cause us to lose.
If, as you hear me speak these words, you say to yourself,
'Oh, but we'll win, we're winning,' then you are in exactly the frame of
mind I mean.
It is exactly the frame of mind Germany wants you to be in.
The German propaganda emerts go to any length to get Americans backnet
sweet,
to thinking that Germans are friendly, good people. They have gone 80
far AS to send photographs of American graves to mothers and
flyers' the flyers'
fathers here A in prove the United Stale that The
they are burying dead American flyers in neat
graves in well=kent cemeteries,
and the mothins
d fathers are expected to thank,
they he caring for my by like
Regraded Unclassified
where I's 75 Mu
# 2 61
DRAFT - St. Louis Speech
we ned mush again
t will he hand- you may hat
want 4 services but dischat
we must do . wo didn't rob
If ever in all history there was a Nation that did not
but
want war, that Nation was the United States -- two years ago:
wer
Thanks to education, we of the democracies, know that war
is needless. We can settle our problems with our brains. We
don't need machine-guns.
and
This is true not only of us, but of our Allies.
you
When this war started, for instance, there were only 11
anti-aircraft guns to protect the whole city of London.
form
Millions of Englishmen, in a country-wide vote, had made it
1
clear that they would not support war. Certainly nobody can
say that England wanted this conflict. The Russians were trying
valiantly to lift themselves out of the Middle Ages, leaping
over whole centuries in a few years' time. They were building
dams and hydro-electric systems, they were teaching themselves
to read and write. War could only interrupt their development.
They were ready to go to any length to escape or postpone it.
Nor can anybody say that China wanted war.
Every writer, every teacher for & thousand years had told
us that war was unnecessary. And at last we had learned the
lesson.
Then why -- if war is needless -- are we at war?
Regraded Unclassified
62
- 2 -
For one thing, because we made a mistake.
In a sense, it is a mistake of which we may be proud.
We were so sure that we didn't want war that we believed
notody wanted it. Was there, anywhere on earth, a mother
Insane enough to want to see her son wounded, or blinded, or
killed? No; a mother like that would be a monster. Was there,
anywhere on earth, a father vicious enough to want his son to
crouch behind a machine-gun and commit murder? No; a father
like that would be a monster.
And monsters, like dragons, were creatures of legend, we
thought -- creatures out of the age of fable.
We were sure there were no monsters in our modern world!
We found out there were!
And, today, we are at war.
The waste of it! The sheer waste!
We will spend, during this year alone, a hundred billion
dollars for war.
Think of what we could do with that vast sum of money!
In public health, for instance. If we spent only a billion
dollars a year for ten years -- one-tenth of the hundred billion
we will spend this year on the war -- we could build enough
hospitals to give us 360 thousand beds more than we now have.
Regraded Unclassified
63
- 3 -
We could build 500 health centers, and supply a full-time
health service to every community in the United States. We
could provide full care for all American mothers and their
babies who need such care at childbirth.
We could have all of the local and State cancer clinics
we need. We could probably wipe out venereal disease. We
could almost certainly put an end to tuberculosis.
We could do all that, and many other things, with 10
billion dollars. And, in this war, we are spending roughly
that amount every month!
Think of the housing we could build with 100 billion
dollars!
Think of the automobiles we could buy with 100 billion
dollars!
We are spending the money on war - instead of cancer
clinics, or housing, or automobiles - because Germany and Japan
have forced us to go to war.
This war unnecessary?
This war is necessary because the Germans and the Japs
have made it necessary!
It is necessary if we value our lives and our freedom!
If we forget that, we may lose both the war and our lives
And freedom:
Regraded Unclassified
64
- 4 -
Drifting and dreaming along, blandly certain that nobody
would ever attack us, we nearly lost the war at the start.
Remember Pearl Harbor! Remember the Philippines!
After the Japs over-ran the Philippines, our troops fought
bravely -- but that does not alter the fact that in the
Philippines, too, practically every plane we had was blown to
tits on the ground.
Believing that this war isn't necessary, believing that
we don't need to hate and kill in order to win -- we can still
lose.
If, as you hear me speak these words, you say to yourself,
'Oh, but we'll win, we're winning,' then you are in the frame
of mind which can lose the war for us.
It is exactly the frame of mind Germany wants us to have.
The German propaganda experts go to any length to get Americans
to feel that way. They even send photographs of dead American
flyers' graves to the flyers' mothers and fathers here in the
United States. The photographs show the graves arranged in
neat, well-kept cemeteries. The flyers' parents are expected
to say, "If the Germans are showing that much love and respect
to my boy, they can't be so bad."
Regraded Unclassified
65
- 5 -
And that is just what the Germans want. They want to
keep as many Americans as possible from hating them -- because,
if we don't hate them, we won't support the war. Our soldiers
won't fight as well. We will let them kill us more easily.
Both the Germans and the Japanese know it's hard for
Americans to learn to hate.
And when you don't hate, in battle, you're easy game.
You die.
It is hard for us to learn to hate because
We haven't seen the enemy at work. We haven't been bombed.
We have seen pictures of bombed buildings in Hamburg and London;
yes. But they have only been pictures to us. We have never
dragged the torn bodies of our own loved ones out of bombed
buildings.
The British know what they are fighting for because they
have been in this war a long time. They fight savagely for
their very lives; they fight to stop the Germans from bombing
their homes; to keep them from killing their families. The
British front line soldier slashes forward without mercy. He
hates.
It took a while for our American soldiers to learn to hate.
At the Kasserine Pass, in North Africa, scores of Americans
died because they learned too late.
Regraded Unclassified
66
- 6 -
Let me quote from an eyewitness description of that battle.
These are the words of a private who was there. I quote:
"I know so well those men who were cut to ribbons at the
Kasserine Pass, and I knew why they were thrown into confusion,
panicked by attacks, and accepted their fate almost paralyzed.
When they jumped into foxholes to let the tanks roll over them,
and were bayonetted in these foxholes by the infantry that came
behind the tanks, they died with an astonished look on their
faces, as if they wanted to ask: 'Could that be possible, would
they really do that?'" (Unquote.)
Yes - it takes a long time for Americans to learn to hate.
But we had better learn, now -- all of us -- just as our
soldiers and sailors have had to learn!
How are we going to do it?
If we could visit the front it might be easier. We'd see
an American fighter pilot, with his plane in flames, take to
his parachute. Then we'd watch half a dozen German planes
circle back and machine-gun him as he dangled helpless under his
chute. That is German efficiency. If they can kill a pilot
before he lands safely, he won't fly again.
When we saw that happen a few times, we'd get over our
notion that the German boys are decent, honorable youngsters
like our own.
Regraded Unclassified
67
- 7 -
Or we might watch an American medical corps man crawl
out to carry water and medicine to a wounded German in the
field. Then we'd see a German machine-gun open up and chop
him to Lits.
In the First World War there were many atrocity stories,
After the war we learned that most of them were untrue. In
this war the conduct of the German and Japanese soldiers, day
after day, is more shocking than any atrocity story.
Only two days ago the newspapers reported that the Germans
at Salerno were advancing under white flags of truce, and then
throwing down the flags and attacking our men. In this war,
such contemptible treachery doesn't even shock us. I'm glad
to say it didn't fool our soldiers. They killed the Germans
and laughed at them!
Only yesterday the New York Times reported a meeting of
leading educators of 30 nations at Harper's Ferry in West
Virginia. Again I quote: "As educators from Czechoslovakia,
Greece, Poland, Belgium, Norway and China rose to tell what has
happened to education under Nazi or Japanese rule, the story
was all the same. It was a refrain of destruction, plunder,
torture, death and mutilation; schools have been burned,
Regraded Unclassified
68
- 8 -
libraries sacked, scientific equipment stolen, museums closed.
The Nazis have succeeded in making an intellectual desert of
the European lands. " (Unquote.)
There are no atrocity stories in this war - because every
story we hear is an atrocity!
Slowly but surely, as we hear more and more of them, we are
learning to hate our murderous, arrogant enemy.
We know that at this very moment, on the beach at Salerno,
American soldiers are dying by thousands. Gone are the days
when the casualty lists told of a hundred killed here, a hundred
killed there. We have landed on the continent of Europe. The
war is really beginning, for us. Italy is already a consuming
furnace. And the fuel the Germans are burning in that furnace
is the life of American boys. Not hundreds, but thousands of
our American soldiers, fighting tonight in Italy, will never walk
again, will never see again -- will never breathe again.
Maybe Salerno will teach us to hate the Nazis!
Let me quote again -- this time from John Steinbeck, the
novelist. He writes, from Europe: "I have seen the hospitals
with mauled men, the legless and the blind
the fingerless
hands and burned faces
all the destruction that steel and
...
fire can do to a man's body and mind. I have seen children
Regraded Unclassified
69
- 9 -
hauled out of blasted buildings
lumps of crushed, dirty
meat in pinafores
dead, boxed and buried
carrion.
"All this,' Steinbeck says, "is the backdrop of the Third
"ar Loan
the drive for 15 billion dollars. It should not
...
be a matter of who will lend his money
but, rather, who
dares not to?" Unquote.
All this is the backdrop of the Third War Loan.
Yes -- yes, it is.
All this is why, as the Secretary of the Treasury of the
United States, I must ask you to pay taxes heavier than any
other generation of Americans has ever paid. All this is why
T must ask you to get along with only the bare necessities of
life, in order to subscribe 15 billion dollars to the Third War
Loan. All this is why I must warn you that there will be a
Fourth War Loan, and a Fifth, and a Sixth.
I think we have reason enough to hate the Nazis. I say,
"Damn them to Hell -- the Hell they have created for the world!"
Regraded Unclassified
#
70
Last night I visited the 1600 block on Berthold
street here in St. Louis. Every family in this block, on
both sides of the street, has bought at least one extra
hrn Bond since the beginning of the Third War Loan Drive.
And
on the corner, is buying a Bmdtr match
On
Mr. Kemmer had bought amboal for every bond
that any of his neighbors hasing unusual buys.
# I am told that this is not an block in St.
St.Louis
Louis. The War Finance Committee has the effective coopera-
As
tion of the O.C.D.
a result, nearly 9000 block
workers are covering the City of St. Louis house by house,
block by block, neighborhood by neighborhood.
$ Pour I toll am you gead I
NOV "ghty to see this
job being done so effectively. Let me tell you why:
When we set the goal for the Third War Loan at 15
fifts billion dollars, we knew that there would be abt
only one way in the world that to get that ^ money. amount of
We know that wild have to have person
We knew we would have to get people to lend the money they
had put away in safety deposit boxes, in sugar bowls, and
under the mattress. This is the money that getting.
I Was told 8 story last night of an American of
Italian birth, He was asked by one of his neighbors to buy
Regraded Unclassified
71
-2-
this man
& $100 Bond. After they had talked it over
out
Italian American took $10,000, his life savings
of
keptulen a safety deposit box and lent it all to the
government.
All of this, as I say, is gratifying and inspiring.
9
It is gratifying to know, too, that after only days of
the Third War Loan we have are well past the half_way mark/
on our
quota of fifteen million dollars. A half hour
ago / I received the figures to date. We-have solly of
The
The
salve
es of tonight ^ are nine billion dollars.
now,
For three consecutive days, we have been able to report more
2
than billion dollars 8. day.
in
Box
our
fift
So
of This is a brilliant record,
I am proud of it,
as I know we all must be.
we are
But in a sense,
in the Third War Loan, just
surrendered?
about where we were in the war when Italy
is a strong Landency throw Late in and consider
the job proctically donor
But-li
Is
The bitter truth is
that the Third War Loan, like the war in Italy, has just
begun. From here on it will take grim determination and real
willing gress to go without - to
buy the number of Bonds you must buy.
Regraded Unclassified
72
-3-
" Out of if 15
worth of Bonds,
billion dollars we must sell five
billion
6
to individuals --
to people like those in the 1600 block on Berthold Street.
That s a lot
And
that
is
1
of
money.
It can't come out of
current earnings without
tightening belts,
without skimping
without your feeling it
Now there are & lot of people who won't want to make
the necessary caorifices. say ornment doesn't
$ But the money will must the be raised, because
need your all this country money, nuds but 1 can it. assure night the before government last, does in
need whington, the * few nights I reported X our losses in
Sicily. I told you how we had lost as much as 54 per cent of
material
some of our materiel. All that has to be replaced; for
A
this point on,
General Marshall has focured me that, from the war
will be an all-consuming furnace. The cost in
lives and in equipment will be sheke and
and
suckens us, $ In this past I days, we have raised
During this year alone, it will sest us
w
9
billion dollars,
$ Do you realis how much money that is?
9TO give yeal called an up idea Doctor show Thomas much Parran, it the is,
Surgeon General of the United States Public Health Service.
art
he could do toward makes the haten hall with 9 or
and I asked him what & hundred billion
billion dollars. A
him. He replied that if we spent only one billion dollars
8 year for t en years,
one
hundreth
of
what
the
our
18
we could
Regraded Unclassified
73
-4-
additional
build enough hospitals to give us 360,000 beds more than we
have now. We could build 500 health centers, and supply
to
full time health service every community in the United
States. We could provide full care for all American mothers
and their babies who need such care at childbirth. We could
we nud.
have all of the local and state cancer clinics
We
could probably wipe out venereal diseases. We could almost
certainly put an end to tuberculosis.
We could do all that, and many other things, with
ten billion dollars approximately as much as this was
costs DO every month.
on
We are spending
money on war, instead of cancer
clinics, or health centers, or ziin housing, or automobiles
and homes
because Germany and Japan forced us to go to war.
must be won
Ansd this war
i
horrible as it is,
if
to save
our lives, our freedom, and our future.
If, as you hear me speak these words you say to
yourself, "Oh, but we'll win, we're winning," then you are
in the frame of mind which can lose the war / for us.
It is exactly the frame of mind Germany wants us to
have. The German propaganda experts go to any length to
get Americans to feel that way. They even S end photographs
of dead American flyers' graves to the flyers' mothers and
Regraded Unclassified
74
-5-
and fathers here in the United States. The photographs show
the graves arranged in neat, well-kept cemeteries. The
flyers' parents are expected to say, "If the Germans are
showing that much love and respect to my boy, they can't be
so bad."
Adm And And that is just what the Germans want. They
want to keep as many Americans as possible from hating them--
because if we don't hate we won't support the war. Our
soldiers won't fight as well. We will let them 1111 us more
easily.
are counting on the that that
Both
he Germans and the Japanese
it's hard for
Americans to learn to hate.
It is hard for us to have because We haven it
seen bed. pictures of bombod building in Humburg and Bonder been
combut. We have seen pictures of bombed bui dlugs in Hamburg
and London: yes But they have only been pictures to us. We
have never dragged the torn bodies of our loved ones out of
INSER?
bombed buildings,
The British know what they are fighting for because
they have been in this war a long time. They fight savagely,
for their very lives; they fight to stop the Germans from bomb-
ing their homes; to keep them from killing their families.
The British front line soldier slashes forward without mercy.
He hates.
Regraded Unclassified
75
-6-
It took a while for our American soldiers to learn
to hate. At the Kasserine Pass, in North Africa, scores of
Americans died because they learned $00 late.
Let me quote from an eyewitness description of that
battle. These are the words of a private who was there. I
quote:
"I know so well those men who were cut to ribbons at
the Kasserine Pass and I know why they were thrown into con-
fusion, panicked by attacks, and accepted their fate almost
paraly When they jumped into foxholds to let the tanks
roll over them, and were bayonetted in those foxholes by the
infantry that came behind the tanks, they died with an
astonished look on their faces, as if they wanted to ask:
'Could that be possible, would they really do that?"
Yes - it takes a long time for Americans to learn to
hate, hate, But our soldiers have done At- and non we
But we had better learn now all of us just as
<<<<
our soldiers and sailors have had to learn!
County
Regraded Unclassified
76
#4
4
6900
Last night I visited the 1600 block on Berthold
Street, here in St. Louis. Every family in this block, on
both sides of the street, has bought at least one extra
Bond since the beginning of the Third War Loan Drive. And
Kingel
Mr. Kemmer, on the corner, is buying a Bond to match every
Bond any of his neighbors buys.
This is not an unusual block in St. Louis. The
St. Louis War Finance Committee has the effective cooperation
of the O. C. D. As a result, nearly 9000 block workers are
covering the City of St. Louis house by house, block by
block, neighborhood by neighborhood.
I am glad to see this job being done so effectively.
Let me tell you why:
When we set the goal for the Third War Loan at 15
billion dollars, we knew there would be only one way in the
world to get that amount of money. We knew we would have
to get people to lend the money they had put away in safety
deposit boxes, in sugar bowle, and under the mattress.
I was told a story last night of an American of
Italian birth. He was asked by one of his neighbors to buy
8 $100 Bond. After they talked it over, this man took
$10,000, his life savings, out of 8. safety deposit box and
lent it all to the Government.
Regraded Unclassified
77
-2-
All of this, as I say, is gratifying and inspiring.
It is gratifying to know, too, that after only 9 days of the
Third War Loan we are well past the halfway mark on our
quota of 15 billion dollars. A half hour ago I received the
figures to date. The sales reported, as of tonight, are
9 billion dollars. For three consecutive days now, we have
been able to report more than 2 billion dollars a day.
This is a brilliant record; 80 I am proud of it, as
I know we all must be.
But in a sense, in the Third War Loan, we are just
about where we were in the war when Italy surrendered. The
bitter truth is that the real man-sized job in the Third War
Loan, like the war in Italy, has just begun. From here on,
it will take grim determination and real willingness to go
without -- to buy the number of Bonds you must buy.
It is my duty to make it clear to every man, woman, and sh
child in the United States that the first half of the Third
War Loan has been the easy half. From now on it's going to
be hard unbelievably hard.
Regraded Unclassified
78
-2A-
Out of 15 billion dollars worth of Bonds, we must
sell five billion to individuals -- to people like those in
the 1600 block on Berthold Street. That's 8. lot of money!
It can't come from current earnings without tightening
belts, without skimping, without your feeling it.
But the money must be raised, because your country
needs it. Night before last, in Washington, I reported to
you our losses in Sicily. I told you we had lost as much
Regraded Unclassified
79
-3-
as 54 per cent of some of our material. All that materiel
has to be replaced; for General Marshall says that, from this
point on, the war will be an "all-consuming furnace." The
cost in equipment, and их in lives, too -- will shake and sicken
us.
In this past nine days, we have raised 9 billion
dollars.
Do you realize how much money that is?
To give you an idea how much it is, I called up
Doctor Thomas Parran, the Surgeon General of the United States
Public Health Service. I asked him what he could do toward
making the nation well with 9 or 10 billion dollars. He
replied that, if ate spent one billion dollars a year, for
ten years, we could build enough hospitals to give us 360,000
additional beds.
We could build 500 health centers, and supply full
time health service to every community in the United States.
We could provide full care for all American mothers and their
babies who need such care at childbirth. We could have all
the local and state cancer clinics we need. We could probably
wipe out venereal diseases. We could almost certainly put an
end to tuberculosis.
We are raising this money to spend on war, instead
of cancer clinics, or health centers, or housing, or automobiles
Regraded Unclassified
80
-4-
and homes, because Germany and Japan forced us to go to war.
This war, horrible as it is, must be won if we want to save
our lives, our freedom, and our future.
If, as you hear me speak these words, you say to
yourself, "Oh, but we'll win, we're winning," then you are
in the frame of mind which can lose the war for us.
It is exactly the frame of mind Germany wants us to
have. The German propaganda experts go to any length to get
Americans to feel that way. They even send photographs of
dead American flyers' graves to the flyers' mothers and
fathers here in the United States. The photographs show the
graves arranged in neat, well-kept cemeteries. The flyers(
parents are expected to say, "If the Germans are showing that
much love and respect to my boy, they can't be so bad."
And that is just what the Germans want. They want
to keep as many Americans as possible from hating them --
because if we don't hate, we won't support the war. Our
soldiers won't fight as well. You won't buy Bonds "until it hurts."
The Germans are counting on the fact that it's hard
for Americans to learn to hate.
One thing that makes it so difficult for us here at
home, I think, is that millions of us in the United States
have not been touched, per personally, by the enemy's passion
for murder and destruction. We know that American soldiers
and
Regraded Unclassified
81
-5-
and sailors have been killed -- but except in relatively few
cases, they have not been our brothers, our husbands, our sons.
We know what England, and Russia, and all the other countries
have suffered at the hands of Germany. We've seen pictures of
the bombed houses, the burning towns. But they haven't been
our houses, our towns.
The British know what they are fighting for because
they have been in this war a long time. They fight savagely,
for their lives; they fight to stop the Germans from bombing
their homes; to keep them from killing their families. The
S
British front line soldier wlashes forward without mercy.
He hates.
It took a while for our American soldiers to learn to
hate. At the Kasserine Pass, in North Africa, scores of
Americans died because they learned too late.
Let me quote from an eyewitness description of that
battle. These are the words of B. private who was there. I
quote:
"I know so well those men who were cut to ribbons at
Kasserine Pass. When they jumped into foxholes to let the
German tanks roll over them, and were bayonetted in those
foxholes by the infantry that came behind the tanks, they
died with an astonished look on their faces, as if they wanted
Regraded Unclassified
82
-6-
to ask: 'Could that be possible, would they really do that?'"
Yes - it takes a long time for Americans to learn to
hate, but our soldiers have done it -- and now we must learn.
Regraded Unclassified
83
LADIES AND GENTLEMEN :
Today we hanndx have had a message from President
Roosevelt, our Commander-in-Chief.
As he hasx points out -- and I quote -- "We are in
the midst of the Third War Loan Drive seeking to raise a
sum unparalleled in history -- 15 billion dollars. This
is a dramatic example of the scale on which this war still
has to be fought, and presents some idea of how difficult
and costly the responsible leaders of this Government
believe the war will be."
(UNQUOTE)
I may say right here that I am not in the least frightened
by this prospect. I am sure we can get the money. Our
national income, this year, will be nearly 150 billion
dollars. I am equally confident tha t the American people
will not balk at any cost -- because they fully realize
that, the more money we spent on equipment and ma teriel,
the fewer lives will be lost in battle.
It is to start meeting these huge war expenditures
that we set up the enormous goal of 15 billion dollars --
3xclusive of banks -- for this Third War Loan.
Regraded Unclassified
84
-2-
are depleted.
laborand
This is & job that American industry can and will do -- and do
10 well. It al so calls for the solution of tramendous problems
in shipping and transportation, but by now we have proved that
we can tak e care of those, too. And it is 8 job that will re-
quire so huge 8 financial transaction, before this war is ulti-
mately won, that it staggers the imagination.
The coming battle for Europe will cost us billions upon
billions of dollars.
I might say right here that I am not in the least frightened
by this prospect. I am sure we can get the money. Our national
income, this year, will be nearly 150 million dollars. I am
equally confident that the American people will not balk at any
cost -- because they fully realize that, the more money we
spend on equipment and materiel, the fewer lives will be lost in
battle.
Exclusive
It is to start meeting these huge war expenditures that we
set up the enormous goal quota of 15 billion dollars for the Third
Sutnice of Banks
War Loan. It is because we have confidence in the American people
that we set out, during the month of September, to get 5 billion
dollars of this bxxx 15 billion from the American people -- from
individuals.
I want to be perfectly truthful with your
I have heard it said many times that this job can not be
done -- that the people of the United States are too fond of their
comfort to skinp and sacrifice 22x -- that they do not have
enough knowledge of what this war is about to dig down and come
up with 5 billion dollars.
Regraded Unclassified
85
-3-
And I can tell you this: This defeatist attitude toward the Third
War Loan is being aided and abetted by enemy propagandists, who
are busy piling rumor upon rumor. They are passing the word
around that subscriptions are falling behind, that the Government
will never refund the money you put into Bonds, and even --
and this is the most fantastic rumor of World War 2 -- that the
war will last only as long as people continue to buy Bonds.
take
You can/your pick of those rumors. There is not a vestige
of truth in any of them. They are all desperate attempts on the
part of the Axis to make the Third War Loan fail at any cost.
Well, I have one report tonight that I should like to
pour into Axis ears. Less than an hour ago I had a call from
Washington. I learned that the total sales reported to Washington,
up to this time, are 9/billion that dollars mark Do you hear that
bane passed the
germany
Mr.
Hitler? Do you hear it you Japan hj The American
people, of their own free will, have turned over to the Govern-
mive
ment, in ton days, a total of more than 9 billion dollars.
of billim dollars
And let me tell you something else. I did some telephoning
Federal lessue System
today to the people, who are responsible for clearing, and recording,
and reporting to Washington on the sales of these Bonds; and I
find that the little people of America are buying Bonds so
rapidly that tonight in one Federal Reserve District there are literally
we
millions of Bonds backed up. This simply means that the machines,
and men and women cannot work fast enough to keep up with the selling pace
of the War Finance Committees.
Regraded Unclassified
86
-4-
Now all this is good news. It is testimony to the
undisputable fact that the ordinary people of America -- those
that Abraham Lincoln so feelingly called "the common people" --
are really behind the Third War Loan. They are like the local inion
À. F. of ₺. official who came to see me today. He said: "Mr.
Secretary, we are doing everything we can. But that is not
enough. I know it. I feel this war, because I have five brothers
in it."
Last night I visited the 6900 block on Berthold Street,
here in St. Louis. The very first day of this Third War Loan
Drive, every family in every house on this block bought a Bond.
And with typical American enthusiasm, the man whó lives on the
corner, Mr. Kinnel, is matching every one of his neighbors, Bond
for Bond.
I wish German
Herr Goebbels germany's the Propagandist, Number Two could have Bg Mouth
visited the homes on this block with me. I can secure you lie
would not have had & very pleasant time. He would have had &
lesson in the American Democrabic way of life, that would.have
shaken him down to his choos.
The front door of every house was open. All the lights
were on. All the families sat out on their porches -- from
grandmothers down to babies. I went from house to house, and
one man thrust forth offend 8. big friendly hand, and said: "Hewdy,
Hank. Give my regards to Franklin when you get back to
Washington."
Regraded Unclassified
87
-5-
Well, gentlemen, that's Democracy. That's our America.
What How different different picture Junna y from Germany!
The typical block leader on Berthold Street is a fine
American woman. Everybody loved her and wanted to help her put
the block over the top. In Germany, the block leaders are Nazi
party members. They come around for contributions, with a couple
of Storm Troopers carrying clubs and brass knuckles. They are so
Seople 20 escaping fun
over
thoroughly hated that regugees say they will be the first men
killed when Germany has a revolution. Over there, he Germans
else
support the war out of terror. They contribute, or eli
disappear into concentration campsand their famille S never see
them again.
I don't know of any sigle single way to more simply or
clearly demonstrate the difference between the @memanxNxi Nazi
way of life and our way, than to compare the way in which these
two nations are financing the war. We have no laws, nor any
other way to force you to buy a single Bond. Yet, even before
the Third War Loan began, even before the block leaders started
to work on Berthold Street, and on all the Berthold Streets
across the country, we already could boast that five-sixths of
all the working people in the country had bought at least one
Bond, When the figures are finally compiled for the Third War
Loan I am sure the number of people participating will not only
frighten our enemies but will greatly strengthen the morale of
our men onthe fighting fronts. For as Colonel Elliott Roosevelt
Regraded Unclassified
-6-
(latest draft) 88
I think our way is better.
And so do you,
go the rest of the way to our 15 billion dollar goal, nith I agree,
calls
we
and for sacrifice a piano, if or by 8 sacrifice banksts yes beefsteak mean dinner.
doing without B new hat, or
The very people who are already doing so much for the
war -- sending their brothers and sons off to fight -- working
day and night in the war plants -- are going to have to buy these
small Bonds upon which the success or failure of the Third War
Loan absolutely depends from now on.
But when I think of the men dying at Salerno, at this very
wonder yetis meallya
moment, I dont that it 18 sacrifice/ to lend your money
to the Government. I'm not asking you to give it. I'm asking you
put
to lend it, at a good rate of interest. I'm asking you to ******
into
an extra $100 in B Bond that is ихайх B safer investment even than
^
cash, because the number of every Bond you own is registered in
your name at the Treasury.
Sacrifice? Tell that to the youngsters who
lost legs, or arms, tonight Salerno! in Italy /
hard,
In full realization that the job shead of us is let
A
me say flatly, here and now, that I am confident we will reach
our goal of 15 billion.
And if the long war xxxxxx shead makes it necessary for us
to have a RifthxWarx Fourth war Loan, and a Fifth, end a Sixth
andx I am confident that the American people will meet the ir
responsibility there also. Roalistically. Grimly. with Clam
determination.
In the words of 8 war correspondent, writing from
"It should not be a matter of who will lend his noney but, rather,
Regraded Unclassified
89
-7-
understand
For we all know, now, how much depends upon us. We know
that we must 'Back ^ the Attack', We must make be sure, 89
our Commander-in-Chief said todayxxxxx -- and I quote --
"We must be sure that we have assembled the strength to
strike, not XXXX just in one direction, but in many directions
-- by land, and sea, and in the air -- with overwhelming forces
and equipment ." If
Thank you.
Regraded Unclassified
90
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
TO
Secretary Morgenthau
SEP 17 1943
FROM Randolph Paul
There are annexed an original and a duplicate
of an assignment to you, by the composer, of all rights
to the song, "THE ROAD TO VICTORY", subject to the
rights of the American Society of Composers, Authors
and Publishers. The holder of the sheet music publica-
tion rights has agreed to turn over all profits to the
National War Fund and to furnish to the Treasury appro-
priate financial statements at regular intervals on re-
quest.
This transaction was arranged by Mr. Vincent F.
Callahan, Radio, Press and Advertising Director, Nar
Finance Division. I recommend that you execute the
acceptance at the place indicated on both the original
and duplicate of the annexed forms.
BT
Regraded Unclassified
NOW ALL III su THESE massets, that I, the
FRANK LUSSUM, Levels, give, transfer, assign
Ever to HENRY MORGENTHAU, Ja., as Secretary of the
and his successors in office, the original musical
tion written and composed by me entitled, "THE ROAD
TOTORY", includin the title, words and music thereof,
ther with all rights therein for all countries and
including, without limitation, the exclusive right to publish
said work and to secure copyrights therein, and each and
every exclusive ri Lt with respect to said work embraced
within any and all CO yri hts at any time existing therein,
subject to any ri hts of the American Society of Composers,
Authors and Publishers.
IN WITNESS MEREOF, I have executed the foregoing
affixed my seal at has angelea, in the State of
fornia, on the 13th day of September, 1943.
(L.S.)
Frank Loesser
OF CALIFORNIA
)
OF has angeles SS:
On the
13th day of September, 1943, before me
RANK LOESSER, to "me known to be the individual described
who executed the foregoing instrument, and acknowledged
be executed the same.
Georgia Public Little
My Commission Expires Feb. SB, 1944
pted:
Whynethaid Henry Morgenthau, Jr
Secretary of the Treasury.
Regraded Unclassified
925
WAR ADVERTISING COUNCIL, Inc. Smith
Please return
A non-profit organization, representing all phases of advertising, created to enlist the power of advertising for victory
JOED VERMONT AVENUE, N.W.
60 EAST 42wo STREET
WASHINGTON 5, D.C.
NEW YORK 17, N.Y.
Telephone: District 9043
Telephone: MUrray Hill 2-2773
New York, New York
September 17, 1943
Board of Directors
Comma J. LAReest, Chairman
Dow Become
Chairman of Board
Fulls, Cone & Belding
ALLEN L BILLIPCILEY
Mr. Henry Morgenthau, Jr.
President, Fuller & Smith & Ron Inc.
Mains BRITTON, Treasurer
Secretary of the Treasury
The President
Treasury Department
McGraw-Fill Publishing Co.
Washington 25, D. C.
THOMAS D'A. Beamin
President, Kenyon & Eckhanic Inc.
A.O. ПОСКОНСНАМ
Dear Mr. Secretary:
Vice President
Classt, Perbody & Company, Inc.
RICHARD Courton
I am most proud of the autographed picture which you BO
President, Comptem Advertising, Inc.
kindly sent me. It is the best "distinguished service
EDWARD C. DOMMELLY, 18.
ribbon" a man in advertising could get.
Denally & Soon
EDWIM 5. FAIREDLY
While I think we have done some very helpful things for
General Manager, The New York Sun
the Treasury in an advertising way, I want you to know
KERWIN H. FULTON
President, Outdoor Advertising Inc.
that your support and appreciation of advertising, your
FATURRIC R. GARRIE, Secretary
sense of showmanship, and your fundamental belief that if
Minaging Director, American
you explain things to the American people they will re-
Assin of Advertising Agencies
Kous HAVEN
spond, all combine to make you claiment to the title
Seation Manager, WGY
"Advertising Man of the Year."
CARLETON HEART
Vice President and Advertising
Manager, Hiram Walker Inc.
I know how busy you are these days, but I am planning to
Benil W. Henson
attend one of your rallies or broadcasts and at that time
Publisher, The Woonsocket Call
hope to have a chance to tell you personally what an out-
PAUL W. KESTEN
the President and General Manager
standing job I think you are doing.
Colombia Broadcasting System, Inc.
CHARLES G, MONTIMER, JR.
Sincerely,
Nove Problem
Kinneral Foods Sales Company, Inc.
Stuart PEASODY
Drone of Advertising
The Bentin Company
chity
WILLIAM REVIEL
Chairman
Partner, Newd-Emment Co.
Chester J. LaRoche
II. W. Brogy
btl
President, Harold H. Clapp, Inc.
HAMP 11. THOMAS, V. Chm
Product, The Centaur Co.
Provident PASS IL Wast, V, Chm.
Instruction of National Advertisers
-PUT E. WINGER
Executive Vice President
Consell-Coller Publishing Cn.
JAMES W. Yorko
Senior Consultant
J. Walter Thompson Company
Yourn
Adventing Director
Unned States Rubber Cod.
Regraded Unclassified
93
THE WHITE HOUSE
WASHINGTON
Sep.17, 1943.
FOR: The President.
FROM: Secretary Morgenthau.
Think your message to Congress
marvelous. Right on the target.
My very heartiest congratulations.
***
8pm-mc
Regraded Unclassified
94
MEMORANDUM FOR THE SECRETARY.
September 17, 1943.
Mail Report
In the week's heavy mail, the Declaration of
Estimation and the Third War Loan Drive completely
overshadowed all other topics. The moods of
letters dealing with these two matters were, of
course, far apart. The Declaration brought in not
8 single kind word, whereas the Drive brought hardly
an unkind one. No other subject since the mail
report has been issued has touched the bitterness
of the protests now being received about the
Declaration. These complain unanimously of the
complexity of the forms and the waste of material,
time, and manpower in completing them. In addition
to the protests, more than 60 filled-in 1040-ES
Forms, some accompanied by payments, were mailed to
the Secretary. There were also a number of informal
itemized statements enclosing checks or money orders
and B. great many letters asking information without
comment. These showed in the main complete ignorance
of what was necessary; many naively left the figuring
to the authors of the perplexing form, and others
just said they couldn't understand what was expected
and could find no local adviser to help them out.
A dozen correspondents spoke of the hardships
that would result from further taxation, and a few
still complained of the injustice of deducting the
Victory tax from wages earned before it became
effective. There were occasional reports of absen-
teeism on the part of workers who thus keep their
wages from rises into higher withholding brackets.
Regraded Unclassified
95
- 2 -
Memorandum for the Secretary. September 17, 1943
Four letters approved the tax program of the
C.I.O., seven, the sales tax. An oddity was a
group of three letters urging higher taxes to
prevent the cost of the war from burdening later
generations.
Bond mail was bulky with magazines, newspapers,
tear sheets, posters, and photographs. Reprints
of the telegram "Will the Fall of Italy Mean Home
Front Defeat?" appeared most frequently in newspaper
material thus submitted. There was 8. great increase
in the number of slogans, poems, and sales promotional
ideas received. Occasional criticism was directed
against use of movie stars, the radio programs, or
some speakers' statements. These "kicks", however,
represented 8. small part of the mail. On the whole,
the tone of Bond correspondence is sure and confident.
The 57 Bonds submitted for redemption represented
such & small increase over the number received last
week, that it does not seem that the September 15 tax
payment resulted in unusual cashing of Bonds. Employees
of the War Department (or their relatives) continue
to complain of the nonreceipt of Bonds paid for in
1942. These, together with three or four from the Navy,
amounted to 52 in all.
With the reconvening of Congress, mail from the
Hill took a sharp upturn. Most of the communications
transmitted letters from constituents, and these
followed the same course - tax complaints and Bond
comments - as those received in the Treasury.
Of the attached excerpts, Pages 17, 18, and 19
contain comments on speeches and radio programs. These
might have been listed under Bonds Favorable or
Unfavorable, but in view of the recent special radio
programs, it seemed interesting to segregate comments
in this way.
get orbish
Regraded Unclassified
96
General Comments
Melchòr Leòn, Objectos De Arte Chino Para Regalo, Mexico,
D.F. With reference to your letter #7092, I take the
pleasure to enclose herewith New York draft in the
amount of $180.84, equivalent of $877.05, to which
amounted the 25% of all purchases made by American
citizens in this store during the month of August,
1943, that is donated to the U. S. Government for
"National Defense".
Vasilios D. Economou, Dayton, Ohio. Because of the
many blessings received from the goodness of this
Country, I felt that I should make a gift to the Trea-
sury Department. I am therefore enclosing herewith
one hundred dollars as such. Will you kindly accept
same, giving me your personal acknowledgment of same?
H. D. Carper, 2nd Lt. AUS, Asst. Mess Officer, Jefferson
Barracks, Mo. It is respectfully requested that you,
on behalf of the U. S. Government accept the enclosed
$50.00 War Bond, made payable to the Treasurer of the
U. S. of America, as a contribution towards the Third
War Loan Drive. The purchase of this Bond was made
possible by the enthusiastic voluntary donations of
officers and enlisted men who are assigned to the
Reception Center Mess, Jefferson Barracks, Missouri.
The Reception Center Mess, I am proud to say, has a
representation of 100 percent of its officers and en-
listed men receiving War Bonds through the Army Class B
Allotment Plan. This 100 percent record is also shared
by the sections and companies of the entire Reception
Center.
A. M. Wright, Treasurer, Harvard Trust Co., Cambridge,
Mass. You will find enclosed our check for $20 sent
to you as an anonymous gift. The giver wishes the
U. S. Government to use this for the purpose for which
the Third War Loan Bonds are to be used.
Regraded Unclassified
97
- 2 -
Sidi Mohamed Ali Barada, Hollywood, Calif. Enclosed is
9. check, the reimbursement for one Bond which I bought
as a small contribution to the Treasury Department.
But after many difficulties I was forced to redeem it,
and herewith I am sending the check which I received
for it. I do not recall where I read it, but while
reading the history of the United States, preparatory
to becoming an American citizen, I recall the statement
to the effect that in wartime any citizen may make con-
tributions to the Treasury of the United States for the
war effort. I have now been repeatedly told by so many
people that no gift of Bonds or money is acceptable to
the Treasury Department. I tried to buy a Bond each
week through payroll deductions at the Lockheed Aircraft
Industry and named the U. S. Treasury as my co-signer.
But six weeks have passed without 8. single purchase of
Bonds, only notes of rejection of my application for Bonds,
saying that my desire to name your Department as co-owner
was unlawful. # # # Please help me to do my small part
in this war, as up to now my contributions to the Red
Cross, slogans, hours on Lockheed's final assembly line,
seem to me all too little. Your accepting the enclosed
check and any other contribution I may send will help
me do a bit more.
James W. Weir, Secretary, West Virginia Publishers Assn.,
Elkins, W. Va. As you are well aware, and as you have
most graciously acknowledged, the newspapers of the United
States have given unstintedly of their space, without
charge, in editorials, news articles, pictures, and ad-
vertising for war financing and the winning of the war
for the salvation of the country, but if I may be per-
mitted to say so, a great many newspapers are going to
be handicapped in rendering such 8. service by a ruling
of the Post Office Department which provides that where
a weekly paper is owned by B. daily paper, published in
the same plant, the weekly paper cannot pick up the type
of the daily unless the major portion of the front page
in the weekly is different from that of the daily, and
unless one-sixth of the inside pages are different. For
such a ruling there is no law, as the Post Office Depart-
ment admits. I am submitting the matter to you as the
Regraded Unclassified
98
- 3 -
head of another Department 80 that you may know the
handicap placed by the Post Office Department on many
newspapers insofar as cooperating with the Treasury
Department is concerned. ###
M. L. Long, Long & Freeman, Attorneys and Counselors
at Law, Jacksonville, Florida. Of course you make the
coins, but I want to tell you your new pennies are the
worst things you ever put out. It is almost impossible,
without the aid of 8. microscope, to tell whether they
are dimes or pennies, and the amount of kicking about
them here is amazing. I suggest the next ones you make,
you either change the size of them or put in some color-
ing matter so they will not look so much like dimes.
I understand also that the penny vending machines throw
them out. I do not know that personally, because I have
not tried it, but I have heard it.
Regraded Unclassified
99
- 4 -
Favorable Comments on Bonds
Rose Brown Bracy, Field Secretary of the National
Negro Business League, St. Louis, Mo. Your address
delivered to the National Negro Business League in
Baltimore W&S as far reaching in its healthful in-
fluence as it was from 8. geographic angle. 4b * #
I wish to express my appreciation of your message,
and I hereby pledge my cooperation to make my people
conscious of OUR country's need, which will be ex-
pressed through cooperation with any program you
initiate. Enclosed is my check for $37.50 for a Bond,
and a subscription for 8 monthly purchase of the same
denomination for at least 8. year.
A. A. Arbetter, Arbetter Ribbon Company, Chicago, Ill.
With the Third War Loan Drive now under way, we thought
you might be interested in the little sticker we have
created for use on our circular mail. We actually buy
$15.00 worth of War Stamps every time we send 1,000
pieces of mail to our trade. # * # Perhaps others might
like to adopt this idea, which is entirely original
with the writer, and which he is submitting to you to
use in any manner you desire. % # (The sticker reads
as follows: "The postage we save sending you this un-
sealed letter is invested in War Savings Stamps."
Gabriel Lowenstein, Chairman of the Board, Fred Fear &
Company, Quality Food Products, Brooklyn, N.Y. This
Company would like very much to subscribe to the Third
War Loan. The individuals of the Company are subscrib-
ing personally. We come under the classification of
Small Business, and we have now tied up with the Treasury
Department as of this date, about $100,000.00 in refunds
due us on Alcohol purchases since the inception of the
new tax law. Quarterly reports from the inception of
the law in November, 1942, to and including June 30,
1943, have already been filed with the Treasury, and the
total of such reports filed represents $56,094.06. The
Regraded Unclassified
100
- 5 -
balance of the $100,000.00 above referred to will be
filed as of the September 30th quarterly report. #
We would like to convert all of the refund due us, or
as much of it as you will permit, into the purchase
of the Third War Loan issue 1964-1969. Will you
please advise if this can be arranged, and no doubt
many others could be induced to take Third War Loan
issue Bonds in settlement of their refunds.
Charles B. Dulcan, Sr., Vice President and General
Manager, The Hecht Company, Washington, D.C. I want
to thank you for your kind and generous note which
arrived this morning and for your commendation of
our publicity activities in support of our country's
war effort. I need not tell you that we are striving,
as you are, to lend every ounce of energy and zeal to
help bring about complete success of the Third War Loan
and the total fulfillment of your plans. Consequently,
your expression of approval is received wi th deep satis-
faction, and I want you to know that I am grateful for
this friendly and courteous gesture on your part.
Regraded Unclassified
101
- 6 -
Unfavorable Comments on Bonds
A. D. Shamberg, Auditor & Accountant, Telephone Build-
ing, York, Pennsylvania. # # Form P.D. 1787, in
addition to requiring the signature of the owner of
the Bond, requires the signature of the beneficiary,
consenting to the change of beneficiary. This latter
requirement is very embarrassing; it would appear the
Treasury Department would have foreseen the absurdity
of such a requirement. In the case at hand, as would
apply in countless others, the beneficiary has no knowl-
edge of his potential benefits. Since he has no in-
terest in the Bond, why must he consent to any change
of beneficiary? In the course of one's life, reasons
may necessitate the change of beneficiary to his estate
perhaps many times. Was the embarrassment to the bene-
factor given any consideration in devising Form P.D.
1787 in requiring that the beneficiary, in the presence
of an authorized certifying officer, consent to being
deprived of the potential benefit by having to sign the
form? # #
Wallace Odell, Westchester County Publishers, Inc.,
Yonkers, N.Y. I noticed today that you sent 8. three-
page telegram to all papers about a special advertise-
ment on the War Bond Drive. This must have tied up a
great amount of the telegraph companies' facilities.
* " # I think if you had offered this copy to the three
press associations -- A.P., U.P., and INS., that they
would gladly have put it on their trunk lines, thus
saving a lot of time, expense, etc. Their services
reach all papers. It is a suggestion and made only
with the thought of being helpful in case such a situa-
tion arises in the future.
Charles F. Andrews, Adjutant Quartermaster, Veterans
of Foreign Wars of the U.S., Alexandria, Virginia.
At a regular meeting of Post #609, VFW of US of Alex-
andria, Va., September 7, some pictures of dead American
soldiers published in the Washington Daily News, were
Regraded Unclassified
102
- 7 -
shown. After various discussions it was regularly
moved and seconded that this Post go on record as pro-
testing the publishing of this kind of pictures in the
future. We understand these pictures were published
to arouse the public to subscribe more heartily to
the Third War Loan Drive to start this week. It is
our belief that pictures of this sort are more harmful
to the morale of the home front than good.
R. A. Avenius, White, Weld & Co., N.Y.C. Last night
I listened to your appeal over the radio, also that of
President Roosevelt! As I was listening it came to my
mind that perhaps a little check-up on the War Bond
Division of the Army Service Forces might not do any
harm. My son, Rodney G. Avenius, enlisted in the Service
in August, 1942. He contracted to buy a $25.00 Bond each
month, and the money has been taken out of his pay each
month. Up to this writing one Bond has been received,
dated October, 1942. Since then nothing has come with
the exception of a Form Letter which I am enclosing.
I have written various times to the War Bond Division
in Chicago asking for some information, and this same
Form Letter comes back every time. Personally, I do not
see how the desire of the soldiers to buy these Bonds
can be maintained if the Bonds they buy and pay for are
not sent to their families.
J. L. Harris, President, Security National Bank, Cairo,
Ill. The Treasury Department has requested the banks
not to ask 8. service charge for sending in War Savings
Bonds to Federal Reserve Banks for redemption. I think
this would encourage more people to cash in their Bonds.
People who cash in Bonds lack patriotism, and should pay
for service rendered by the banks. We have instructed
our personnel to try to discourage people from cashing
Bonds, and to offer to lend them a limited amount, which
they can repay weekly or monthly. Ninety percent of the
people could keep their Bonds if they did not buy that
which they could do without for the duration of the war.
Many have larger wages than they ever dreamed of earn-
ing and are spending it freely. I believe that people
Regraded Unclassified
103
- 8 -
should be discouraged in cashing Bonds and that news
broadcasts should be sent out, saying it is unpatriotic
to cash in Bonds instead of helping finance the war,
while our boys are giving their lives to win the war.
The percentage of Bonds cashed in may be small, but it
should be less. My observation of this practice in our
bank is sufficient evidence. Why print Bonds, have
banks sell them, and then cash them in sixty-days later.
All this is expense and time lost. It should be dis-
couraged by sufficient charge to justify the banks for
their time and effort. #
*
Harry L. Augusta, Framingham, Mass. Last night in your
broadcast you stated that Mr. Winston Churchill pur-
chased the first War Bond on the new Drive which opened
this week. Now the following question comes up. A friend
of mine who is a pilot in the British Air Service tried
to buy some Bonds recently but was told that he could
not because he was not an American citizen. Is there
a distinction between Mr. Churchill (British subject)
and my friend (British subject)? My friend had in mind
the fact that after the war he would like to settle here
and his savings in War Bonds would help him out, but he
felt rather sheepish to find he could not because of his
nationality. This question will arise many times in the
coming months and I feel that if one nationality is at
liberty to purchase Bonds, then all persons of that
nationality should be allowed to do SO.
Mrs. E. L. Edwards, Johnstown, Pa.
I
have
a
sister
working in New Cumberland, Pennsylvania, at the Induction
Centre, packing soldiers' clothes. She has worked there
for 14 months and they are compelled to buy War Bonds
amounting to $12.50 in six weeks. In all these months,
most of the girls have not received either the Bonds or
a receipt to show what they have paid out, and they can
get no information about them. Isn't this a little
irregular? Most every one whom I know in civilian life
Regraded Unclassified
104
- 9 -
gets their Bonds as soon as they are paid for. Most
of these girls and women are in very modest circum-
stances, and when they are willing to buy them, surely
they should get either the Bonds or B. receipt. # #
James Bly, Brookhaven, Ga. Today Mrs. Bly and I walked
to our little Post Office to buy a $100 War Bond, but
the clerk would not accept our personal bank check,
although they were very kind and considerate -- "We",
they said, "have orders not to take personal checks".
We have no Bonds and we do so much want to loan our
money to this Third War Loan Drive. If a Postmaster
knows a citizen, and knows his check is good, why doesn't
this branch of our Government cooperate? If necessary,
the Postmaster could run this check through the clearing
house in two days; they then could mail us our Bond.
I don't think it would take an Act of Congress for the
Post Offices to be helpful in this grim time.
Oscar Lange, Washington, D. C. $ My wife and I went
last night to the exposition grounds fully enthused to
"Back the Attack", and bought two $100 War Bonds for our
grandchildren. We inquired for tickets to the show in
the Arena there and all over the place there were none
to be had and no one could tell us where or how we could
get any. Now it is the people's money that is being
spent, and the people should enter on the basis of first
come, first served, and not on the basis of democrats,
bureaucrats, or Government employees -- very likely 50%
of all those who gain admission have not bought any extra
Bonds. While standing for almost an hour to get in,
there was quite some talk in the crowd of tickets being
passed out freely in the different Government Departments,
which is not FAIR.
O. H. Lachenmeyer, Publisher, The Cushing Daily Citizen,
Cushing, Okla. We have your four-page telegram of
September 9, suggesting a page display ad for the
Third War Loan. We will make an effort to have it
Regraded Unclassified
105
- 10 -
under-written in a local way. We find these pages in-
creasingly difficult to sell. The firms feel that they
are called upon to purchase the maximum amount of Bonds
and should not likewise be asked to buy the display
space. We feel that it is asking too much of the news-
papers, with all of the news publicity that they give,
to run this advertising free. Did the telegraph company
send this four-page telegram without charge? Do the mat
people make your mats without charge? 42 * * Smaller news-
papers of the nation are facing the most critical time
in their history. It is fast becoming a question,
not of whether newspapers are willing, but of whether or
not they can continue to do all that they are being asked
to do, at their own expense. We feel that the
Treasury Department represented by you, is taking very
arbitrary stand in opposing paid display advertising
by newspapers. Because they accepted pay from the Govern-
ment for & commodity that they sell every day would not
mean that they are being subsidized, any more than any
other manufacturer of a staple product. #
Philip L. Soljak, San Francisco, Calif. I am a New
Zealander, employed by the British Ministry of War Trans-
port in San Francisco, and have been very happy to invest
10% of my salary in U. S. War Bonds. However, I have
been disturbed by frequent remarks made to me by American
friends that War Bonds "may not be worth much after the
war", and that for this reason they are not putting more
than they can help into Bond purchases. They base this
belief on the fact that Liberty Bonds depreciated after
the last war, and that a repetition may be expected.
This unintentional encouragement of Axis propaganda is
indulged in by people of educational and professional
standing who ought to know better. None of those I know
have any Axis contacts or relationships, but are of
"Anglo-Saxon" American stock. + * # Personally, I have
as much confidence in U. S. Bonds as I would have in
British or Dominion Government stock. However, I feel
certain that the spread of this dangerous talk is damag-
ing the sale of War Bonds, and inducing many people to
cash those they have purchased. I would like to suggest
Regraded Unclassified
108
- 11 -
that your public relations department check on this
situation and take the necessary measures to correct
it. # * #
W. H. Fletcher, Pittsburgh, Pa. In the news reel at a
theatre the other night Mr. Churchill was shown as
getting the first Bond under the 3rd War Loan. Mr.
Churchill being Prime Minister of England is not B. U.S.
citizen nor a resident. How can he own one of these
Bonds? When I started to buy them two years ago, I
wanted them to be issued in mine and my sister's name
jointly, or as co-owners, but this was turned down
because, while I am a U. S. citizen, she is a Canadian
(living in Canada), and because she is a Canadian, and
no Bonds can be sold other than to U. S. citizens,
I had to have them issued in my name solely.
E. W. Newman, Chairman, 3rd War Loan Campaign, Stone Wall
District, Shen County, Virginia. (Telegram) Due crop
shortage with apples should be good prospective buyers
3rd War Loan Bonds. Present harassment by Washington
heading entire industry toward calamity and apples now
falling while alphabetical administration organizations
fiddle and play, regardless of nature. Orchard industry
will not only suffer, but also consumer account of in-
difference, etc., on part of OPA and others. Sixteenth
set for release of prices. This too late. However,
should not be delayed one minute. Use every ounce of
your influence and efforts; have decision made and
announced no later. May be able yet to place Bonds with
orchardists before end of drive.
Regraded Unclassified
107
- 12 -
Favorable Comments on Taxation
Copy of letter addressed to Senator McKeller by Leon
Ferguson, Memphis, Tenn. I have noticed newspaper
stories about possible new taxes to help pay for this
war; also the Third War Loan Drive is now under way,
and I want to let you and some of the other Senators
and Congressmen know what I think about all this. *
Naturally, I don't want to pay any more taxes than I have
to, but this war has got to be paid for and I think we
should make an effort to pay a greater part of our war
costs as we go along. # # # If prosperity continues for
a few years after the war's end, that's fine; we can con-
tinue to pay high taxes. * # * On the other hand, if we
have a depression and can ill afford to pay high taxes
out of reduced income, we will have a good part of the
war debt out of the way. Thus I feel that I would rather
pay as much as I can stand now than later on when I might
not be as well off. I have read that Senator George
thinks the American people cannot stand any more taxation,
but it's my opinion we can stand higher income taxes. ++ #
We know the war has got to be paid for and I guess we
might as well get the unwelcome job over with as fast as
possible. # * * And in this connection, I have one special
request that every taxpayer will welcome wholeheartedly,
please have the Treasury Department use some sort of
simplified income tax return form, and don't make it too
hard for us to figure our taxes out.
Regraded Unclassified
108
- 13 -
Unfavorable Comments on Taxation
Alvin F. Harlow, 382 Wadsworth Avenue, New York City.
I am sending with a copy of this letter my "Declara-
tion of Estimated Income and Victory Tax" for Sept.
15 to the local tax collector, and I wish to take
this opportunity of going on record as protesting
against this absurd and impossible requirement. My
total income so far for 1943 has actually been only
about $500.00. I have & new book published this
summer, but I have no more idea how many copies of
that book the public is going to buy during the re-
mainder of the year than I have of knowing what will
happen to me, if anything, beyond the grave.
#
Under such conditions, how on earth can I guess what
my income will be during the remainder of the year?
And yet I am told that I will be penalized if I guess
wrongly. # # I shall hold a copy of this letter as
proof that I warned you of the impossibility of comply-
ing with so nonsensical a law. It is feasible for a
man who is on B. regular salary, but not for the rest
of us.
Herman Krohn, Public Accountant, Easton, Pa. It has
been my privilege to deal with the Internal Revenue
Department over a period of 28 years that I have been
in public practice. Never before has my work become
so burdensome and impossible of performance as it is
at this time in connection with the preparation of the
Declaration of Income and Victory Tax due September 15.
We are short of help in the office and cannot obtain
relief. In addition to this work, my office is also
engaged in assisting the various clients, some in the
defense industries, in meeting with Government repre-
sentatives in re-negotiation conferences and much other
paper work from other Government agencies. The situa-
tion is impossible of solution, except if 8. 30-day
blanket extension is granted by you for the filing of
the September 15 returns.
+
#
We are doing the best
Regraded Unclassified
109
- 14 -
we can, but physical and mental endurance under
pressure of a tremendous amount of cumulative paper
work is becoming unbearable.
*
#
Harry A. Trumbore, Brown & Bigelow, Remembrance Advertis-
ing, St. Paul, Minn. Recently I received as a prize
for work well done, a Bond, $50.00, in reality, only
$37.50 in cash. On this Bond the company collected the
sum of $9.38 in taxes. Which means 25% of the real
cash value of Bond. Have had them re-check this sum,
and they insist it is correct. Please advise what the
correct tax should be, was not aware of any tax at all,
had not paid it before. They say this amount is made
of the Social Security tax on Bond, never heard of such
S. thing. Please clarify and state source of tax, etc.,
on Bonds given as gift by company for whom person is
working.
Copy of letter addressed by Arthur J. Chadwick, Phila-
delphia, Pa., to the Editor of the Philadelphia Record.
Knowing that one of the requirements of newspaperdom is
to express thoughts clearly, I ask that you render unto
the public an understandable interpretation of Mr.
Morgenthau's #36206 wherein I find the following lan-
guage: "Generally speaking you will not have to file
this declaration or make a payment on September 15 if
your wage or salary is subject to withholding, and if
your income is not more than $2,700 a year if single,
or more than $3,500 a year if married. Yr I have not
been able to find any two people to agree as to what
is meant by the above. One says that if your wages
are subject to withholding, then in no event must you
file a Declaration or make & part payment. Another says
that if you are single and your wages are less than
$2,700 per year, the same is true. The third insists
that any married person making more than $3,500 need
file no Declaration. From which the professor says
that 8 Declaration need be filed and a payment be made
Regraded Unclassified
110
- 15 -
only by single and married men with incomes between
$2,700 and $3,500. The question is: Who is right?
If no one of the four, please have the Philadelphia
Lawyer give his answer. Incidentally, the public
would like to know what salary Mr. Morgenthau's lan-
guage expert receives for his aptitude in setting forth
simple ideas in the language used.
Fred Damrau, N.Y.C. $ # # I am a member of the Police
Department of the City of New York. In 1939 I was sus-
pended without pay and remained so until February, 1942,
when I was re-instated and back pay for this entire
period was given to me. " # # In February 1942 I was
given all my pay. Thus my earnings, which are the
basis of income tax, were given to me in 6. lump sum of
$7,500, and during the balance of the year I earned
enough to top $10,000. I did not earn $10,000 during
that particular year. # # Your office at 1 Hanson
Place, Brooklyn, says I earned over $10,000 in one year
and must pay at this rate, instead of permitting me to
file each year separately. This will cost me an extra
$564.47. If I were to file this figure I would be com-
mitting perjury -- I am required to file on annual
earnings -- my annual earnings are fixed by law at
$3,000.00. I put this matter to an Appeal Board. They
decline to rule and inform me I must go into the Tax
Court. This will cost me about $200, which I do not
have. Also, bear in mind that during my suspension
period I did not file any return on any other income
because I did not earn enough. # # # Every available
Government official that I have been able to contact
informs me that the procedure is unjust, but inasmuch
as one agent decided I am in the $10,000 per annum class,
I must pay accordingly. This ruling is outrageous; it
is not even common sense. Am I to have no defense with-
out going to borrow more m oney to pay legal fees?
R. G. Lochiel, Treasurer, Pennsylvania-Central Airlines
Corporation, Washington, D. C. It has been brought to
the attention of the management of Pennsylvania-Central
Airlines that an alarming number of our hourly-rate
Regraded Unclassified
111
- 16 -
employees are absenting themselves from work when their
earnings have reached the top of a wage bracket, in
order to avoid the additional withholding tax which would
occur if these employees worked additional hours. In
many cases, employees actually draw a larger pay check
by this stoppage, the pay for the additional hours being
less than the withholding tax difference between the two
brackets. # # * If your Department has prepared any
material which could be used, or has any suggestions to
offer to combat this unpatriotic waste of time, this
company would be very grateful to hear from you.
Lemuel A. Boyce, Peach Bottom, Pa. I received your
notice asking for an estimate of my income tax for 1943,
or, as per 1942, whichever is the greater. I have not
made more than $2.50 in 1943, since January 1, 1943, on
account of sickness. Will my income tax be the same as
it was in 1942 when I made about $1,400, and where is
the money to come from to pay said tax? * # #
Regraded Unclassified
112
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Comments on Speeches & Radio Programs
J. S. Marie, Philadelphia, Pa. That well-known "beer
garden" comedian who preceded you and the President
last night during the Invasion Bond selling campaign
was & very poor representative for the Treasury Depart-
ment inasmuch 8.5 he used propaganda invented by the
gambling racketeers, and these latter, I think you
should know, are mostly fascists in America. He prob-
ably got a high price from the gamplers for taking the
spotlight on a U. S. Treasury Department program in
which both the President and the Secretary of the
Treasury participated.
Harriot T. Cooke, Washington, D. C. Do you really think
that the American people are appealed to by such maudlin
programs 88 that of the Treasury last night? # #
I have a son-in-law and a grandson at the front.
They are patriotically serving their country and I am
trying to do my bit in the only way I can at over three
score years and ten. In the last war I was Vice Chairman
of three Liberty Loans (Women's Division, Orange, N.J.),
and Chairman of the Victory Loan.
Quite
frankly,
the appeals of Hollywood stars would have left me cold
then R.S they do now. Let's put this thing on a higher
plane -- not on emotionalism, but on one of realistic
approach to what each of us is fighting for -- "our life,
our liberty and our sacred honor.
Postal Card from Mrs. E. A. Giard, Willmar, Minn. Except
for the President's address and yours, what a sad program
your Bond Drive program was. Why do you have to have
mediocre talent like that? Why can't we have something
dignified, beautiful and moving, worthy of a great national
drive?
J. Henry Haggerty, N.Y.C. Regarding the program of Sept.
8th promoting the sale of War Bonds. Whoever wrote the
Regraded Unclassified
113
- 18 -
script of this program either didn't know what he was
supposed to put across, or he avoided the issue to gain
a few laughs. The program, I understand, was to arouse
the public to purchase War Bonds. An attempt was made,
by means of B. battle-front skit, to show the sufferings
and hardships of our soldiers "over there"; dramatic
music and moving commentary accompanied. But just as soon
as we had realized the seriousness of the war and had
come to realize also that we "home-fronters" were being
too complacent about the whole thing, some writer decides
to fill up time or get some cheers for a few laughs by
throwing in George Burns and Gracie Allen. These two
certainly put on a humorous act; but their jokes removed
the serious and contemplative mood instilled in our minds
by the previous dramatic skit. Consequently, the first
skit was forgotten. Again a soul-stirring drama was
portrayed; and was followed by Edgar Bergen and an un-
spirited rendition of an uninspiring song called "Praise
the Lord and Pass the Ammunition". Each time our minds
were worked up to 8 bond-buying pitch, boom, some fri-
volity would ruin it all. The whole affair was ridiculous.
It is no way to arouse people to buy Bonds. Either give
them free laughs, or make them realize the seriousness of
the national emergency. I realize that it is too late now
to do anything about that broadcast, but when you begin
campaigning over the radio for the Fourth War Loan, please
have your program manager use a little common sense.
Vr. S. Bezuhly, Hillside, N.J. The night of September 7
I heard the official opening of the Third War Loan over
the air on the "Cavalcade of Stars Program". I heard you
and our President make a plea to the people to invest
their money in War Bonds to help put over the $15,000,000,000
quota. Your words gave me an inspiration to write about
this loan. You will do me a great honor in reading the
enclosed poem.
Hobert A. Sutherland, Wilmette, Ill. I have just heard
on the radio a few minutes ago an announcement stating,
"This is the Treasury of the United States, and we now
Regraded Unclassified
114
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introduce So-and-So's Jazz Band", or word to that effect.
Whereupon followed a cacophony of outrageous sounds, with
an occasional appeal to buy Bonds. This is to advise that
I most strenuously protest, as I am sure millions of
Americans do, the use of tax money or any part of the
proceeds of Bond sales in paying for the use of jazz bands
to endeavor to promote sales of Bonds. Our honored dead
would turn in their graves if they knew that the U. S.
Government had descended to such lack of dignity in pro-
moting what should be and I am sure is with nearly all
people, a patriotic, conscientious and dignified duty.
John Gray, Los Angeles, Calif. (Telegram) Local papers
do not have full text of your address. It is very nec-
essary that the full text be sent from your office at
once because we want to put it into the hands of 12,000
men in the Los Angeles Ship Building and Dry Dock Corp.
at Sen Pedro. It was an inspiring speech and just what
the home troops needed. We want to emphasize it in con-
nection with not only our Bond Drive but in the actual
replacement of equipment gloriously lost. Send to Room
713, Broadway Arcade Building.
Mrs. Mary Woodhull Stevens, Haddon Heights, N.J. ***
May I tell you that your message of last night to our
citizens stirred my heart to its patriotic depths. Every
time I contemplate Thomas Jefferson's life, I love and
admire him the more. Wish I had your splendid message
in type to read and re-read. ***
Regraded Unclassified
115
ADDRESS BEFORE THE
NATIONAL ASSOCIATION OF SUPERVISORS
OF STATE BANKS
IN CINCINNATI, SEPTEMBER 17, 1943
BY
MARRINER S. ECCLES
CHAIRMAN OF THE BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
"THE DUAL SYSTEM OF BANKING"
FOR RELEASE WHEN DELIVERED
AT 2:15 P.M.
Regraded Unclassified
116
THE DUAL SYSTEM OF BANKING
When your President, Mr. Perry, wrote to ne in July inviting me
to attend this annual convention of your Association, he told me that he
wished to build the program around this central theme:
"In the wartine and postwar eras, how far, and by what means,
is it desirable or possible to preserve the dual system of banking?".
That is an important and challonging subject. It implies that
there are two sides to the issue. It implios that you are willing to hear
both sides. I could, of course, be politic and say only what I think you
would prefer to hear, but I doubt that your invitation to ne was based upon
the assumption that I would appear here as EL champion and defender of the
dual system. On the contrury, I imagine that you expected me to play the
role of the devil's advocate, though, of course, as I see it, I am on the
side of the angels. On one thing, however, we can agree. As public officials
responsible for banking regulation, we all want B. strong and successful
banking system. It cannot be strong unless it is successful. We all favor
what we believe to be in the public interest. And what, in fact, best serves
the public interest will survive in the long run.
As B. one-time banker and then as a sharer of the numerous super-
visory headaches with which you are all familiar, I have known a good many
of the State supervisors well and favorably, despite their tendency to
differ with my views. So fur as I am aware, I have never succeeded in con-
verting any of them to my viewpoint, notwithstanding the cogency of the argu-
nonts on my side of the case. So I will be noither surprised nor dis-
appointed if in this session you are not won over to my side. Nor is there
cause for alarm lost your commissions be swopt suddenly away, for this is a
nost venerable issue, this question of the dual banking system, and the re-
lated issue of branch and unit banks. In all probability wo, or our suc-
cessors, will still be debating these issues far into the post-war world.
Economic forces and modern needs, rather than what may be said here, will
ultimately determine the character and functions of our banking system.
In what I have to say I can speak only for myself. I am well
aware that the division of opinion on questions of unification and branch
banking extends beyond State boundaries into the Federal banking agencies,
including the Board of which I am but one member, But I am confident that
the cordial and cooporative relationships which have existed between the
Federal Reserve and the State banking authorities will not be marred because
I happen to believe in & unified banking system and in well-regulated branch
banking limited to trade areas.
Our banking structure has had a piecemeal growth throughout our
history. It reflects the cumulative efforts of public authorities, State
and national, to meet recurrent emergencies and to deal with specific
problems and competitive conditions. It has not been developed in accordance
Regraded Unclassified
117
- 2 -
with any comprehensive plan based on the country's banking needs taken as a
whole. As the country expanded, its need for money and credit grow. In
order to supply those demands, banks were formed in the quickest and easiest
manner possible, with little or no direction or regulation, until abuses
and difficulties arose, We all know that the history of banking in this
country is filled with crises and disasters, with fulminations and fumblings
for reform. What has developed hardly justifies the term "banking system".
Although we can now have far more confidence in the soundness of our banks
than at any time in the past, further improvements are urgently needed.
They will cone about, no doubt, in the future as in the past by gradual
steps. To those who believe, as I do, that it is not in the best interest
of the public or of the private banking system to maintain things BS they
are, the process will seem painfully slow.
The first duty of the Government, as I see it, is to create 6.
climate and fi condition conducive to EL maximum of sustained private pro-
duction and employment. Its next obligation, inescapable in the modern
world, is to provide the opportunity for employment, in a way that will
stimulate and not impede private enterprise, at such times 85 deflationary
forces endanger economic stability. Conversely, its powers must be used
to offset inflationary developments at the other end of the cycle. In
other words, Government can and should be an economic balance wheel, help-
ing to keep the economy going aliead on an even keel.
The most important governmental powers affecting economic sta-
bility are fiscal and monetary. Most of us recognize that it is essential
in wartime to have close coordination between Government policies and those
of the banking system. The banking system fully subscribes to the ob-
jective of financing war costs, not covered by taxation, by borrowings from
nonbank sources. It is clearly recognized that the banks should finance
only that residue of war costs which cannot, or at least are not, met by
taxing and borrowing from the public. There is general acceptance both of
the policy of maintaining approximately the present pattorn of interest
rates and of limiting Government obligations purchased by the banks to
cortain types and maturities of issues. Central banking operations have
at the same timo supplied the banking system with such additional reserves
us are necessary to effuctuate those policies.
Essential as it is in the national interest to have this high
digree of coordination in fiscal and monotary action in wartine, it is
equally important from the standpoint of national economic welfare to con-
tinus it in poacotine. Looking to the futuro, the Fedoral Government is
destined to play a crucial rolo in the maintenance of oconomic stability.
It is difficult to sue how ita basic functional powers can be offectively
mployed to this end so long as the nation's banking machinory 10 to hodge-
podgo of some fifty-two difforent jurisdictions, laws, and suporvisory
aconoios, so long us approximately half of the banks of the country are
subject to uniform contral banking policy and half are not, so long us
Regraded Unclassified
118
- 3 -
these multiple agencies, State and Federal, with their differing philoso-
phios, divided and conflicting policies, dominate the banking picture.
tille coordination is extremely difficult, admirable efforts have been made
in this direction. They are in reality an admission of the need for uni-
fication of banking regulation and for clearly fixing responsibility where
those who bear it can be effective and be held accountable.
The sovereignty of Government over the nation's money supply is
beyond challenge. It is clearly recognized and declared by our Constitu-
tion. Denand deposits, as you all know, have become in the past sixty
years the major part of our money supply. Control over their expansion
and contraction should reach to all banks that are in a position to create
then, Banking reserves which limit the money supply are thus crucial. It
follows that reserve requirements should be made applicable to all banks
of deposit. It is inequitable B.G woll as ineffective that only the mumber
banks of the Reservo System are subject to changes in such requirements
chile those banks which elect to remain outsido the System, or those which
are now mumbors und which choose to withdraw, can escape sharing in what
is B national rosponsibility.
Thilo it is true that somo Statos voluntarily sot the samo ro-
servo requirements for nonmumber State banks that are fixed for member
banks, the Stato banks are pormittod to count vault cash and to carry their
reserves as deposits with other commorcial banks, This has a very difforent
monutary offect from carrying those reservos with Fodoral Roservo Banks. Ro-
serves curried with Fodoral Rosorvo Banks are ontiroly unavailable for lond-
the but only twenty por cont or loss of roservos carried with momber banks
are unavailable. This makes for a heavy dilution, but not for effective
control.
Likewise, bank examination policy, with its direct influence upon
bank lending and investment, which are money-creating operations, needs to
be closely coordinated with national monetary policy. Notwithstanding the
dogree of coordination sought by the agreement among the three Federal bank
supervisory agencies in 1938 and subscribed to generally by the State
authorities, the result is at best a compromise and not EL real solution.
Almost every aspect of banking regulation and supervision is made
nore difficult and less effective by the existing structure. I need not re-
count to you the innumerable conflicts, discriminations, divided and over-
lapping authorities, that characterize the banking picture in this country.
AS the Federal Reserve Board declared in its Annual Report for 1938, "The
banking picture emerges as a crazy quilt of conflicting powers and juris-
dictions, of overlapping authorities and gaps in authority, of restrictions
making it difficult for banks to serve their communities and make to living,
and of conditions making it next to impossible for public authorities to
apply adequato restruints at N. time and in conditions when this may be in
the public interest." That report suffices to show the need for modernizing
Regraded Unclassified
119
- 4 -
and stroanlining the banking structure of this country as modern business and
industry in almost every conceivable line of endeavor have been modernized
and streamlined. Attempts at coordination, commendable as they are, reflect,
but are not a practical solution of the problems.
Now all of this, you may say, is just my philosophic approach.
I am trying to sketch it in because it is my basic reason for believing that
the dual banking system, as now constituted, is outmoded and that economic
forces -- not mere debute -- will compel its adaptution to the financial
needs of modern economic life.
It is not long ago, as time is mensured, that we were pro-
dominantly un agricultural nation. Local communities wore relatively solf-
austaining. Industrios wore largely locally ownod and comparatively small.
As the great ruilroad systems of the nation developed with the westward
march, new towns and villages sprang up along the way. Each had its local,
more or loss self-contained economic life, its stores and its banks. This
was in a day of R relative scarcity of capital. Interest rates were high.
Too often banks took the risks and the losses that should have been borne
by risk capital and not by bank stockholders and depositors. This ora of
rupid, steady expansion faded out with the advent of the large mergers and
consolidations in the industrial world, with the development of modern
trunsportation end distributive systems. Attempts to halt this march of
progress by anti-trust, anti-chain store legislation or other statutory
pains and pomities have largely been in vain. It requires no gift of
prophocy to foresee that the scmo oconomic forces will in time compol the
banking system to follow is parallel pattorn.
The answer to the thome question of this session is not hard to
discern as you look back at the fate of thousands upon thousands of the
small unit banks which once thrived. By 1921 we had more than thirty thousand
commercial banks in this country. More than twenty-two thousand of them were
State banks, while some eight thousand were national banks. As of last June
thirtieth, the number of State banks had shrunk from twenty-two thousand to
about nine thousand, and there were about three thousand fewer national
banks. There has been no banking mortulity remotely approaching this sad
record in any other nation on earth. The disappourance of more than thirteen
thousand State banks and three thousand national banks as well -- whether it
be through failure, through merger, or through voluntary liquidation -- is
eloquent proof that something was fundamentally wrong with a system that
permitted so large B. number even to come into being.
We have expended more in time and money on bank examination and super-
vision, conducted by at least 52 soparate State and Federal agencies, than any
nation in the world. It involves unnecessary waste of manpower at a time like
this. It did not and could not of itself protect the depositors, stock-
holders or customers of the thousands of banks that went to the wall, even
during the so-culled prospurous Twenties. Aside from voluntary liquidations
or abscrptions, nearly ten thousand Stato banks, with aggregate deposits of
Regraded Unclassified
120
- 5 -
clozy to five billion dollars, folded up in the Twentios and early Thirties.
At the surr timo moro than two thousand national banks, with duposits of
only slightly loss thun two and EL half billions, wont to the wall. Most of
these were independent unit banks. Banks that survived the Twenties and
then weathered the economic disaster of the early Thirties were necessarily
the strong and not the weak. What saved them in the end was the avalanche
of money poured out by the Federal Government -- the billions in loans and
capital supplied directly to the banks by the RFC and the additional billions
furnished to others through the RFC, the Farm Credit Administration and the
done Amer's Loan Corporation, which made it possible to liquidate the frozen
and defaulted credits held by the banking system.
As you in this audience know, bad management and other human de-
fects were minor and not major reasons for the epidemic of failures. The
mortality was greatest through the Twenties among the smaller institutions
In the agricultural regions. They were the victims of depressed agri-
cultural conditions. Thousands that managed to come through in the country
and in the cities only to succumb in the early Thirties, were likewise
prinarily the victims of economic distress and disaster with which they
could not copo individually and from which the most diligent supervisory
and examination policy could not save them. Since the bank holiday, the
rising price level has made good the assets of numerous banks that were
closed then and of many that would not have been reopened had strict ex-
aminution policy been uniformly applied. The rising price level, not deposit
insurance, has reduced bank mortulity to EL minimum.
The record of bank failuros in this, the richest country on
earth, night have been much better -- it could hardly have been much worse --
had examination and chartering policy been more restrictive in boom times
und if, especially during dopression, runs had been averted by deposit
Insurance. llowever, deposit insurance, which I strongly fuvored at & time
when most of my bunking contemporaries regarded it LS A scheme for making
good banking pay for the mistakes of bad banking, cannot cure the basic
worknesses. The attempt to do so at this stage by muking chartering und
examination policy increasingly rostrictive, would loud only to depriving
the public of needed banking services in innumerable communities. This,
in turn, would load to domands upon Government to furnish through its
Aguncies the credit services that the banks would otherwise supply. It
would neun additional Government encroachment upon the fiold of private
bunking enterpriso.
Even today, during the groatost of all war booms and despite the
unormous growth of deposits, many of the smaller bunks are having difficulty
In meking - living. It is difficult to attract now capital into the banking
system. Horoover, the process of contraction in number of banks is oon-
tinuing -- fortunately through voluntary liquidation of existing units un-
able to operate successfully, und through mergors and consolidations, rather
than through the disnstrous process of fuilures.
Regraded Unclassified
121
- 6 -
The solution is not to be found in more and more restrictions
applied to la basically faulty structure. The solution lies in & unified
system with branch banking. We alone among the leading nations have
failed to develop such a system. We alone have deposit insurance. We need
it no long as the basic faults of our banking structure remain uncorrected,
but the need for it would disappear, and bank failures would be us rare in
our country as they are in other great nations, if we would doul with the
cauces insteud of continuing to doul with the effects of the basic weak-
nosses in our system.
Meroly to unify the banking system under one regulatory authority
would not be u sufficient remody. As I have sought to stross, the problem
is basically an uconomic one. The question 10, our the smull independent
unit banks expoct botter ournings in tho future? Or, of greator importance,
oun they provide their communities with adequate cradit facilities and bank
services at costs as low as those prevailing elsewhere? In this vast
country there are many so-called ereditor areas which have a surplus of
savings over local credit and investment needs, and others, dobtor areas,
where the derind for funds exceeds the local supply. But we have D. banking
system which requires for the sake of liquidity that banks in the debtor
APUND send funds to the creditor urous, wherous the reverse should be the
caso. Farmurs und homo owners and small businosses are demanding buttor and
chosper crodit fucilitios, whilo bunks in thoir communition hold idlo
bulances in largo city banks or buy low intorust-boaring bonds. But to pro-
tuct their depositors thoy curnot afford the risk of having all thoir assots
Invested at homo. Is thoro any wonder that borrowers como to Washington, in
timos of business contraction, and ask for now Government crodit agoncios?
I in opposed to Government subsidized competitive agencies taking away busi-
ness from the bruiks. But is the widesproud outery ugainst farm credit
ligencies really based upon n. four of socialized credit end does it really
attack the CLUSO of the trouble?
These Federal agencies, LE has been stid, were "born of pitiless
and inexorable necessity" in D. time of adversity when the banks could not
seet desporate agricultural needs, und at the time wore welcomed by the
banks CS they were by farmors. Muny of the credits they extended were not
bankuble louns. But even if they could bo abolished over the opposition of
organized agriculture today, which I very much doubt, that would hardly
notes the difference betwoon profitable and unprofitable banking oporations.
You have only to look at the unprocodented and still growing
volume of bank doposits created 1,8 a result of wer financing to realize
that relief cannot be expected to como through a rising interest rate
structure after the war. The command over the interest rate structure
Which governments have exercised during the war will not, in my opinion,
be relinquished afterward. In view of the huge debt-refunding operations
that the Government will have to carry on and the disruptive effects of a
falling bond market, or, otherwise stated, of a rising interest rate on
Regraded Unclassified
122
- 7 -
those operations, it is hardly likoly that the responsible authorities
would fail to exercise thoir undoubted powers of control to provent any
such wido fluctuations in interost ratos as would afford the banks B. hope
of rising returns from this source,
Moroover, the vast volume of funds that have alroady como or
will como into oxistence before the end of the war presents a competitive
situation that is hardly dosigned to rosult in increased ratos and carnings
by the banks. Those doposits are owned by insurance companies, mortgage
companies, financo companios, building and loan associations, business and
industry, as well as by many other potential lendors, individual und
corporato. I have recontly soun funds advortized for lending in the mortgage
field for as long as forty years at but four per cent. Banks must face the
necessity of adapting themselves to meet such competition and at the same
time, through diversification and sound management, safeguard the interests
of their depositors and stockholders.
I recognize that a banking structure that may best serve one part
of the country may not be adapted to another part. Generally speaking, in
the Eastern States, where larger diversified banking Units predominate and
distances are relatively short, there is no such public noud for trade-area
branch banking as is the case in those sections of the country whoro
distances are great and where the banking units are necessarily smallor and
far loss divorsified in their londing and investing activities -- indood,
often they are too reliant upon conditions in one or only a few lines of
agriculture or industry.
I have 10mg felt that limited branch banking is the practical
solution of the banking problems confronting those areas where unit banks
cannot succeed, I have never favored nation-wide branch banking, or its
extension over wide areas. I do feel, however, that it should be permitted
within limited trade areas, in no case exceeding the limits of the immediate
area served by the head office or by a branch of a Federal Roserve Bank. I
believe that the independent unit bank should be protected, however, by a
statutory provision prohibiting establishment of any brunch in A community
alroady served by EL unit bank or by EL branch of another bank. The banking
authorities could, of course, permit establishmont of another bank in a
community if the need for it existed, but under the provision I have in
mind, a branch could only como into the community by acquiring a unit bank
which hud boon in oxistonce for at loast five years. Such an acquisition
would have to have the consent of tho bank supervisory authorities in order
to provent monopolistic tondoncios, Undor such provisions, & market would
be provided for the stock of a unit bank in caso the stockholders dosired to
sell because of unprofitable opurations or for any other roason. At prosent
the owners of the smaller unit banks are greatly handicapped in having no
pportunity, in most cases, to dispose of their investment, if they wish to
4a so, at anything like a satisfactory price.
The smaller unit banks face many difficulties and disadvantages as
compared with branch banks. The snaller units are so limited in their lend-
Regraded Unclassified
123
- 8 -
INC capacity that nore and more, as business, industrial and agricultural
enterprises have enlarged, they have had to turn to the banks with large
resources for their financial requirements. The smallor units do not have
the opportunities afforded the larger institutions to diversify their lend-
10G oporations and thus apread the risks. They cannot offord to employ the
specialized nanagement in the various lines of lending and investing activity
that our be employed by the larger banks. Thoy are not able to offer the
varioty of credit and other services, and they lack stability and continuity
in management, as compared with larger banks with branchos. Accordingly, I
see in 6, branch banking set-up such as I have outlined B. practical and
12g10al solution of the problem, both from the standpoint of providing
needed banking services for the public in many communities and from the
standpoint of the interest of the unit banks themselves.
The present branch banking laws discriminate unfairly against
national banks. While Federal law permits a national bank to have branches
in those States where State law permits branch banking, the Federal law re-
quires the same capitalization for each branch of a national bank as for
establishment of a new national bank. Most State laws impose no such capital
requirements. If both State and national bunks wore put on an equal footing
with respect to branches and the indepondent unit banks wore protocted E.S I
have suggested, it scoms to no that it would bo in the intorost of all con-
cornod.
The public interest and public needs will, I am confident,
determine in the end the pattern that will be followed. It is not the
public which has opposed branch banking. As Senator Glass said when the
subject was being debated in the Senate some years ago and he has had
more legislative experience with banking problems than any nan in public
life in ur times --
"The plea against branch banking comes from bankers and not
from people who transact businoss, not from people who want to
borrow money, not from people who want to buy credit. It comes
from bankers who want to exclude from their peculiar communities
anybody olse who wants to sell credit."
And you will perhaps pardon no if I recall to your mind that the some
Senator is the Author of the statement that "the curso of the banking busi-
noss of this country is the dual system".
New, I have not advocted abolishing State chartoring and super-
visi in because I have folt, or at loust hopod, that & sufficient dogroo of
unifiod policy and notion could be brought about, short of 50 drustic to
change, by requiring that State banks, like national banks, bo members of
the Federal Reserve System, by a consolidation of Federal regulatory and
supervisory authorities, and by development of branch banking as I have
indicated. Nevertheless, I must confess that the cold logic of the situa-
tion calls for the more drastic readjustment to modern conditions.
Regraded Unclassified
124
a , ,
In the carlier days of the Republic when State banks were em-
powered to issue currency, thore was B. reason for State chartering and
supervision that ceused to exist when State bank notes were taxed out of
existonce. In the light of the clearly recognized soveroignty of the
Federal Government over the issuance of currency, the logic of the case
calls equally for onding State authority to charter banks which, in turn,
while they no longer issue currency, can oreate bank credit that has so
largoly supplanted currency as the country's chief medium of exchange.
As Professor Westerfield of Yale has pointed out:
"It has boen seriously argued that the Constitution not
merely permits but requires that the power of the states to
charter commercial bunks be abolished and control of commercial
banking be exercised by the federal government alone, because
the Constitution expressly gives Congress control of the
monetary system and forbids interference with it by the states,
and commercial bank deposits are the principal element of the
monotory system."
Having a regard for the antiquity of this issue of the dual sys-
tum and the controversy which has ruged about the subject for so many
generations, I have perhaps boon more prudent than logical in stopping
short of advocenting that you gontlemen be legislated out of your present
occupations -- but la long lino of ominent authorities, who could hardly
be charged with indifforenco to State Rights, have not stoppod short.
Sonutor Shorman, of Ohio, that distinguishod loador in establishmont of
the national banking system, concluded nourly oighty yours ugo that, end
I quoto, "The whole system of state banks, however carefully guarded, was
both unconstitutional and inexpedient and ought to be overthrown".
Daniel Webster, specking in the Senate on the subject of State
bank circulation, said:
"I confess, Mr. President, that the more I reflect upon this
subject, the more clearly does my mind approach the conclusion
that the creation of stuto banks, for the purpose und with the
power of circulating paper, in not consistent with the grants and
prohibitions of the Constitution."
Even 50 ardent a champion of State Rights us Thomas Jefferson
wrote in 181L that, "The state logislatures should be immediately urgod
to relinguish the right of establishing banks of discount".
My own approach and viewpoint wore well exprossed by an editorial
in the New York Times of July 23, 1936, omphusizing the fact that "un
obvious und pressing nood" for fundumental banking reform still oxisted.
Regraded Unclassified
125
- 10 -
"If the exporience of the doprossion yours showed anything," this odi-
torial continuod, "it showed the glaring woaknesses inhorent in n bank-
ing system which is conducted under no loss than fifty different sots of
Federal and local regulations, with many communities denied by law the
services of banking institutions equipped with adequate financial resources.
The remedies for these weaknesses are unified regulation obtained through
membership of all banks in the Federal Reserve System and an extension of
the practice of sound branch banking."
You will not, I trust, accuse me of radicalism or of favoring
buresucracy because I find myself allied in my thinking with so many
others who, down through the years, have shared my general viewpoint;
sone, like Jefferson, being much more drustic than I have been. And you
will not, I trust, think that I have any less desire to work cooperatively,
closely, and in hurmony with you to make the bust of our prosent situation
Just because I bolieve that timo and economic progress will ultimatoly
bring fundamental changes in the banking structuro. I do not caro what
system, whother ducl or unified, provuils, or how many banking authoritics
there are, if the system, whatever it may be, best serves the public
interest and preserves privute banking in this nation.
Regraded Unclassified
DEPARTMENT OF FINANCE
CANADA
Ottawa, Sept. 17, 1943.
Dear Dr. White:-
As Mr. Plumptre is absent from Washington
on holidays he has asked me to send you direct the
attached quarterly statement and forecast of Canada's
holdings of U.S. dollars.
This statement would normally have gone
forward some time ago, but it has been delayed in
order to include the latest information concerning
the steps taken to bring our balances within the
agreed limits.
Yours very truly,
T D. White,
at
to the Secretary,
Department,
ON, D.C.
Regraded Unclassified
CANADA'S RECEIPTS AND DISBURSEMENTS OF UNITED STATES DOLLARS
Report, September 1943.
General Comments.
Table I. Summary Table.
Table II. Current Account.
Table III. Capital Account.
Table IV. Hyde Park Transactions.
Table V. U.S. Dollars Obtained Outside the
United States.
Table VI. Canada's Liquid Reserves.
Footnotes on the Tables.
Regraded Unclassified
'S RECEIPTS AND DISBURSEMENTS OF UNITED STATES DOLLARS
Report, September 1943
ints on the Report
forecast places Canada's probable stock of gold and U.S. dollars
and of 1943 at $444 million, excluding the proceeds of the net capital
on security transactions (estimated at $98 million for the calendar
THE
1943) and before taking account of the cancellations of War Supplies
Ltd. orders now in process. Contracts aggregating $100 to $107 million
during the remainder of their terms are being cencelled outright. The Depart-
ment of Munitions and Supply estimates that deliveries through War Supplies
Ltd. will be reduced by $80 to $86 million by December 31, 1943, as a result.
It is difficult, however, to forecast the timing of the effect which these
reductions in deliveries will have on net cash receipts from month to month
because of the lag of payments behind deliveries and because payments will
continue to be received on account of past deliveries. In addition to the
effects of these cancellations, it is expected that further refunds will be
to the United States as a result of retroactive price adjustments on
through War Supplies Ltd. similar to the refund of $50 million last
Nothing of this nature has been included in the forecast.
Do high level at which Canada's stock of U.S. exchange has been
in recent months is due in part to the fact that some unusual receipts
U.S. dollars received in settlements from the United Kingdom - Table I,
fell in the early part of the year while certain heavy payments (e.g.,
for "Canpay" imports from U.S. - Table I, Item 7) will not occur until
ter part of the year. It is also due in part to the continued high rate
al inflow from security transactions, estimated at $98 million for the
year 1943 (net, after the redemption on August 15th of Dominion of
bonds amounting to $106 million).
Regraded Unclassified
2.
changes made in methods of estimating used in this report.
Some alight changes have been made in the arrangement of the items in
namery table, Table I, particularly to give emphasis to the importance
tch payments on Canpay account and special adjustments to receipts through
at Supplies Ltd. have now achieved. Payments on Canpay account now appear
only in Table I, Item ?; they have been entirely eliminated from Table II where
they were formerly included in the estimated payments for imports from the
United States. Hyde Park receipts are stated in Table IV and in Table I,
Item 9, before allowing for the effect of the cancellation of War Supplies
Ltd. orders described above, for the reasons there given. For convenient
reference Items 15 to 18 have been added to Table I. These give the U.S.
dollar position, actual and forecast, at the end of each quarter of 1943
both before and after the elimination of the net effect of security tran-
sactions on the position.
Since no further changes of importance are likely to be made in the
estimates for 1942, the detailed estimates for each quarter of 1942 have
been omitted; the total for the year will be found in each table for com-
rison with 1943. In some tables the forecasts have been carried through
first quarter of 1944. For the less predictable items, however, the
last has only been carried to the end of 1943.
A considerable reduction in the estimated payments to the United States
rdinary current account (Table I, Item 1) by contrast with the estimated
into for 1943 shown in the May report is to be accounted for almost
oly by the elimination of payments on Canpay account. These now appear
(tom 7 of Table I. The forecasts of current receipts made in May were
low for the second quarter. The estimated total current account receipts
1943 have been increased somewhat in this report (Table I, Item 2).
Regraded Unclassified
3.
these changes account for the reduction in the estimated excess
rent payments over receipts for 1943 from the 3544 million forecast
May report to the $280 million here forecast (Table I, Item 3).
Regraded Unclassified
CANADA'S RECEIPTS AD DISBURSEMENTS OF UNITED STATES DOLLARS
Report, September 1943
Table I. Summary Table
(in millions of United States Dollars)
Item
Calendar
Quarters of 1943
No.
1942
1943
I
II
III
IV
Ordinary Current Account Transactions, excluding
Canpay and Hyde Park transactions (from Table II):
Payments
1.
1,466
1,546
340
397
396
413
Receipts
2.
1,027
1,266
256
346
342
322
Excess of payments (-) (1-2)
3.
-439
-280
-84
-51
-54
-91
Capital Transactions excluding Security Transac-
tions (from Table III):
Net capital inflow (f)
4.
/38
427
/10
45
t6
to
U.S. Dollars Obtained from Newfoundland and other
Non-Sterling Area Countries Outside the United
Stetes (from Table v):
Net receipts (f)
5.
460
/58
All
/23
to
417
Special Receipts of U.S.Dollars from the United
Kingdom (f)
6.°
427
/165
/139
to
/10
48
Payments for Canpay imports (-)
7.
-1
-163
-
-50
-71
-42
Surplus (t) or Deficits (-) on the above transac-
tions (1.e., all except Hyde Park and security
transactions) (3/4/5/6/7)
8.
-315
-193
476
-65
-102
-102
Net Receipts from Hyde Park Transactions (from
Table IV) :
Net Receipts (without taking account of any
cancellation of War Supplies Ltd. orders.)
(See Note below)
9.
/310
/332
477
/59
/92
/104
Surplus (f) or Deficit (-) on all the above Transac-
tions (1.0., all except security transactions)
(8/9)
10.
-5 /139 /153
-6
-10
+2
Security Transactions (from Table III) :
Net capital import (f) or export (-)
11.
/114
698
/53
63
-61
/43
Surplus (t) or Deficit (-) on all the above Tran-
sactions, (10/11)
12.
/109
/237
/206
457
-71
/45
Actual Increase (+) or Decrease (-) in Canada's
U.S. Dollar Position
13.
/131
/218 /31
Errors and Omissions (13-12)
14.
/22
A12 -26
Regraded Unclassifie
2.
Item
Calendar
Quarters of 1943
No.
1942 1943
I
II
III
IV
lar Position at the End of
Canada
Kach
uarter:
Ad
Table VI)
15.
319
537
568
For
thout taking account of
and
llation of War Supplies
LE
See Note below.)
(f)
12)
16,
542
497
542
Canada
Dollar Position at the End of
Each
or Quarter (excluding the net
inflow of capital from security transac-
tions
Actual (Item 15 less the cumulative
capital inflow shown in Item 11)
17.
205
484
452
Forecast (without taking account of
any cancellation of War Supplies Ltd.
orders. See Note below.) (Item 16
less the cumulative capital inflow
shown in Item 11)
18.
444
442
444
Note:
Items 9, 16 and 18 take no account of cancellations of War Supplies
Ltd. orders resulting from implementation of maximum-minimum balances
arrangement. Contracts for such orders aggregating 100 to 107 million
dollars during the term of the contracts are now being cancelled out-
right. The Department of llunitions and Supply estimates that deliveries
through War Supplies Ltd. will be reduced by 80 to 86 million dollars
by December 31, 1943, as a result of these cancellations, It is difficult,
however, to forecast the timing of the effect of these reductions in de-
liveries on net cash receipts month by month because of the lag of payments
behind deliveries and because of payments on account of past deliveries.
In addition, it is expected that further refunds will be made to the
United States as a result of retroactive price adjustments on sales through
War Supplies Ltd., similar to the refund in June 1943. Nothing of this
nature has been included in the forecast.
Regraded Unclassified
CANADA'S RECEIPTS AND DISBURSEMENTS OF UNITED STATES DOLLARS
Report, September 1943.
Table II Current Account
(in millions of U.S. dollars)
Item
Calender
Quarters of 1943 of 1944
Fiscal
No.
1942
1943
I
II
III
IV
I
1944
Payment
cada to the U.S.
Payment
cated by the
adjuste
of total merch-
endise
ed, excluding
Lend-Le
ind Canpay imports
1.
1014
1068
234
274
280
280
265
1099
of which imports for the prod-
uction of military equipment
2.
436
517
124
128
132
133
133
526
of which imports for other
(mainly non-war) purposes
3.
578
551
110
146
148
147
132
573
Freight payable in U.S. dollars.
4.
145
160
31
40
46
43
30
159
Tourist and other travel in
the U.S.
5.
14
19
4
5
5
5
5
20
Interest payments
6.
88
92
20
25
21
26
21
93
Dividends and profits payments
7.
114
110
25
30
20
35
18
103
Miscellaneous
8.
91
97
26
23
24
24
24
95
Total Payments (1/4/5/6/7/8)
9.
1466
1546
340
397
396
413
363
1569
Receipts
Canada from the U.S.
Export
rchandise by Canada,
(exc)
all Hyde Park exports,
10.
567
629
125
168
171
165
135
639
see
Expor
tals to Motals
Resel
oration
11.
33
86
14
24
24
24
24
96
Export
(ly-mined gold
167
134
36
35
33
30
25
123
12.
Proig
ts in U.S.dollars.
13.
74
101
19
34
26
22
18
100
Touri
Sher travel by the
U.S
do
14.
56
59
9
15
22
13
9
59
Inter
dends and profits
from
15.
51
55
13
16
12
14
11
53
Aleak
and other U.S.
Gove
jects
16,
26
130
28
36
36
36
30
138
Misca
17.
53
72
18
18
18
19
18
72
Total
(10/11/12/13/14/
15/1
18.
1027
1266
256
346
342
322
270
1280
Exces
wnts over
Receipt
18)
19.
439
280
84
51
54
91
93
289
Regraded Unclassified
RECEIPTS AND DISBURSEMENTS OF UNITED STATES DOLLARS
Report, September 1943.
Table III. Capital Account
(in millions of U.S. dollars)
Item
Calendar
Quarters of 1943
No.
1942 1943
I II III IV
Section I Non-Security
Transactions
Sales by Canadians of U.S.
and other assets:
U.S. assets
1.
23
15
4
3
4
4
Canadian assets
2.
19
11
2
3
3
3
Other new borrowing
3.
-
5
5
-
-
-
Total Receipts on these items
(1/2/3)
4.
42
31
11
6
7
7
Less debt payments
5.
4
4
1
1
1
1
Net capital inflow on these
items
6.
/38
/27
/10
/5
/6
to
Section II, Security Transactions
Sales of securities by Canadians:
U.S. and other foreign
securities
7.
22
41
6
14
11
10
Canadian outstanding issues
8.
112
205
67
48
50
40
New Canadian issues
9.
-
124
97
27
-
-
Total (7/8/9)
10.
134
370
170
89
61
50
Less turities of Canadian
seo ties in the U.S
11.
20
56
7
26
16
7
Less
adian securities
cal
for redemption payable
in
dollars
12.
-
216
110
- 106
-
Net
1 inflow (f) or out-
fl.
on security trans-
ac
(10-11-12)
13.
/114
/98
A53
/63
-61
+43
Recap
ion
Tot
tal receipts (4/10)
14.
176
401
181
95
68
57
Tot
tal payments
)
15.
24
276
118
27 123
8
Net
1 inflow (14-15 or
6
16.
/152
/125
/63
/68
-55
/49
Regraded Unclassified
BANADA'S RECEIPTS AND DISBURSEMENTS OF UNITED STATES DOLLARS
Report, September 1943.
Table IV. Hyde Park Transactions
(in millions of U.S. dollars)
Item
Calender
Quarters of 1943
Lio.
1942
1943
I
II
III
IV
Prepayments and capital advances
1.
79
7
-
2
5
-
Current receipts on orders placed
through for Supplies Ltd
2.
231
377
77
100
100
100
Refund by Canada of prepayments
by the U.S. included in Item 1...
3.
-
21
-
1
20
-
Payments by Canada on account of
"retroactive price adjustments"
4,
-
50
-
50
-
-
on W.S.L. contracts
liet receipts through War Supplies
Ltd. (1/2-3-4)
5.
310
313
77
51
95
100
Petroleum Products Lend-Leased by
the U.S. to the U.K. for the
Combined Air Training Plan
6.
-
19
-
e
7
4
Net receipts of U.S. dollars by
Canada under Hyde Park trans-
actions (5/6)
7.
310
332
77
59
92
104
Additional Information
Canada's Hyde Park Exports:
Exports against prepayments
and cemital advances
8.
17
39
13
12
8
6
Total arts (2/8)
9.
248
416
90
112
108
106
edjustments, Item
4...
10.
50
50
-
-
Loss
-
-
Rece
rom Thoada's Hyde
Par
11.
248
366
90
62
108
106
ter 9-10)
U.S
content of Canada's
Hy
exports estimated
at
Item 11
12.
30
44
11
7
13
13
Net
of U.S. dollars from
Hg
exports (11-12)
13.
218
322
79
55
95
93
прог
components and
mate
obtained by the U.K.
un
-Lease for the ex-
ocut
British orders in
Седа
50
19
7
8
2
2
14.
Regraded Unclassified
138
IPTS AND DISBURSEMENTS OF UNITED STATES DOLLARS
CA
Report, September 1943.
able V. U.S. Dollars Obtained Outside the
United States.
(in millions of U.S. Dollars)
Item
Calendar
Quarters of 1943 of 194 Fiscal
No.
1942
1943
I II III IV I
1944
eceipts by Canada
From non-sterling area
countries other than
Newfoundland and the
United States
1.
82
99
20
32
18
29
20
99
syments by Canada
To non-sterling area
countries other than
Newfoundland and the
United States
2:
55
64
18
14
16
16
16
42
et Receipts (1-2)
3.
27
35
2
18
2
13
4
et Rec
of U.S.
Dollar
Newfoundland.
4.
33
23
9
5
5
4
3
Total
Receipts
(37)
60
58
11
3
7
17
7
64
5.
.
Regraded Unclassified
DS RECEIPTS AND DISBURSEMENTS OF UNITED STATES DOLLARS
Report, September 1943.
Table VI. Canada's Liquid Reserves
(in millions of U.3. dollars)
of which held to
U.S.
Total
Private
offset net securit)
Gold
Balances
Official
Balancesja
Total
movements in 1943
Amounts
Sept. 15, 1939
205
56
261
133
394
Dec. 30, 1939
218
88
305
99
405
Dec. 31, 1940
136
194
330
3
333
Dec. 31, 1941
136
52
188
-
188
Dec. 31, 1942
155
164
319
-
319
Mar. 31, 1943
124
413
537
-
537
53
June 30, 1943
162
406
568
-
568
116
Aug. 31, 1943
181
364
545
-
545
Memo: Net Capital
Import
I. Change in Amounts from Previous Period
Sept. 15, 1939
-
-
-
-
-
Dec. 30, 1939
/13
+32
/45
-34
/11
Dec. 31, 1940
-82
/106
/24
-96
-72
Dec. 31, 1941
-
-142
-142
-3
-145
61
Dec. 31, 1942
/19
/112
/131
-
/131
152
Mar, 31, 1943
-31
/249
/218
63
-
/218
June 30, 1943
/38
-7
/31
/31
68
-
Aug. 1943
/19
-42
-23
-
-23
F Tot
fficial" holdings - Foreign Exchange Control Board, Minister of Finance
Bhink of Canada.
17 Tot
dings of U.S. dollars by all other residents of Canada, excluding
in banks end insurance companies whose holdings of U.S. dollars are
di for the purpose of their U.S. business. The totals shown are
e of $20 million in minimum working balances.
to the war, a very large proportion of Canada's exchange reserves
by private rather than official agencies. In the spring of 1940,
1gn Exchange Control Board, which had been charged with responsibility
ging the country's exchange reserves, took over all such balances in
hands other than the minimum amount considered essential for day-to
king balances.
Regraded Unclassified
DA'S RECEIPTS AND DISBURSEMENTS OF UNITED STATES DOLLARS
Report, September 1943.
100
to the Tables.
tes to Table II.
It
For the past total imports are arrived at by adjusting
Cust import statistics to eliminate imports for which no pay-
nent has been made. Canpay imports and Lend-Lease imports were
also liminated. The forecast was made after examination of the
past trend of imports in each of the groups into which the
Dominion Bureau of Statistics divided merchandise imports. It is
estimated that total imports will be slightly above the level of
the second quarter for the third and the fourth quarter of this
year. It is also estimated that the first quarter of 1944 will
be above the same quarter of 1943 because total imports in that
quarter were unduly reduced by a severe winter's effects upon
transportation facilities. Prices will probably be somewhat
bigher also.
The reduction in the total imports forecast for 1943
to
$1,215 million of the May report to $1,068 million in the
report is almost entirely due to the elimination of Canpay
1
for treatment elsewhere in the balance of payments.
and 3.
These items are added for information only; they are
anywhere in the balance of payments. Item 2 is the U.S.
ontent of military equipment purchased by the Department
ions and Supply. It 18 not inclusive enough to be
d. as imports for "War" production which was the title
used. No attempt is made here to separate imports on
Regraded Unclassified
from what might be called "civilian" imports. Isem 1
erely the difference between Items I and : must there-
many items which might properly be called imports for
uction.
The following table shows how the estimates of Item 2
iled:
Table II. Current Account.
Item Quarters of 1945 or 1944
No. I II III IV I
Payments for U.S. purchases by
contractors and suppliers
1 103 115 124 130 130
Expenditures in the U.S. for
capital equipment
2
20
15
10
5
5
Direct purchases by the Dept. of
Munitions and Supply on other
than Canpay account
3
83
6
6
6
6
Total of the above items
4
131
156
140
141
141
Deduct estimated freight payments
included in the above items but
included here in the freight
payments item of Table II, (1.0.
$5 of item 4.)
5
7
8
8
8
8
Estimated imports for the produc-
on of military equipment (4-5)
6 124 128 152 153 135
A comparison of this table with the similar table is-
ed
in the May Report, shows a reduction which is due to the
intion of the payments on Canpay account. Excluding those
the figures given in the table above are somewhat higher
those of the May estimate. This increase is due mainly to
oments effected in the methods of estimating which soon
tify a somewhat higher estimate for some production pro-
18 than had been made previously.
ent of Campay imports in the present Report.
The only payments made by Canada for imports from the
Regraded Unclassified
5.
rranged through the Canpay procedure to date are
that
in 1942 and $50 million in the second quarter of
1948
all previous reports, payments for imports have
book
4d on the basis of Customs statistics which included
Cam]
received in Canada but not yet paid for. To that
exte
tated payments for imports has been too high. Part of
the
Brunke
and Omissions item in Table I of the previous reports is
thus inined. So far as possible Canpay imports have now been
eliminated from the record of payments for imports for the first
two quarters of 1943 and from the payments forecast for the rest
of the year as shown in Table II, item 1, though it has not been
possible to eliminate them from the record for 1942. This revision
has been the major factor in reducing the Errors and Omissions itom
of $30 million shown for the first quarter of 1943 in the May report
to the $12 million shown for the first quarter of 1943 in Table I,
item 18, In the present report payments for Canpay imports are en-
tered only in Table I, item 2.
The forecast of Canpay payments made there is based on
ostil
deliveries on Canpay account. The total deliveries on
Call
count to the end of the present quarter are estimated to
$122 million. As $51 million has been paid on this account
al
he payment of the remainder of Canada's liability, $71
D
therefore forecast. In the last quarter the deliveries
of
imports are estimated at $42 million; this amount of pay-
erefore forecast.
reight Payable in U.S. Dollars.
This item includes inland freight on coal and other com-
ported from or through the U.S., ocean freight on in-
oh is payable in U.S. dollars to U.S. or other foreign
and such part of the freight on Canadian exports to
Regraded Unclassified
4.
a countries as is payable by Canada in U.S. dollars,
X6
A some of these payments, O.B., freight on coal imports,
R up-to-date information; for other parts of the es-
as
=
basic data is usually one quarter behind. As a record,
t)
mates of the larger part of the freight payments are pro-
bai
to accurate.
Its Tourist Payments,
These are based upon Foreign Exchange Control Board data
as to funds sold to tourists for travel in the United States.
Item 6. Interest Payments.
Based upon Dominion Bureau of Statistics estimates of the
holdings of Canadian bonds in the United States. The quarterly
distribution was made after studying the seasonal tendency in the
sales by the Foreign Exchange Control Board of U.S. dollars for
the servicing of Canadian bonds.
Item 7. Dividends and Profits Payments.
Based on F.E.C.B. records of approvals for the remittance
of dividends and profits to residents of the U.S. dollar area. The
forseast has been made on the assumption that remittances will con-
ti
to be below earnings as they have been in the recent past and
1
ere will be no tendency to remit to the U.S. the considerable
of profits eligible for remittance under the regulations of
.C.B. which have thus been built up.
Miscellaneous,
This item includes mainly payments for commercial and
al services and payments to companies in the U.S. for
ent, engineering, and similar professional services.
Exports (excluding Hyde Park exports).
The value of exports in the past is arrived at by
ting from Customs statistics of exports those items for which
Regraded Unclassified
5.
us received, as well as exports included in Table IV,
ransactions.
Exports for the second quarter of this year were higher
the
lovel forecast in May. The Torecast is therefore at a
all
higher level also. This change seems justified by an
analysis of the probable trend in each of Canada's main export
commodities.
Item 11. Exports of metals to Metals Reserve Corporation.
The increase in this item over the May forecast is due
to 48 adjustment in the valuation of aluminum exports under the
provisions of an escalator clause in the contracts.
Item 12. Gold exports.
Our estimate of receipts from gold exports was again
somewhat below the actual figure for the second quarter of 1943.
The forecast has therefore been raised somewhat. The decline
foreeast for the future is based on a projection of current pro-
duction trends which man-power shortage may alter.
Alaska Highway and other United States Government Project
The amounts shown include only those receipts that can
lfied with certainty as arising from this source. They
morly included in miscellaneous receipts, but have now
10 considerable as to justify placing them in a separate
is explains the reduction in the size of item 19, mis-
as receipts, by comparison with the May report.
Regraded Unclassified
6.
Excess of Payments over Receipts.
The excess of payments forecast for 1943 in the May
$544 million. In the present report the kcess is
so
$280 million. This is explained by a reduction "
ion in payments (largely because of the elimination of
for Canpay imports) and an increase in estimated
receipts
of $132 million which current trends seen to warrant.
Regraded Unclassified
Table III. Capital Account
is table does not include the capital imports in the
spayments, advances and other loans by United States
al agencies and some banks which have resulted from
ark arrangements. These are given in Table IV, item 1,
what
included in the balance of payments in Table I, item 9.
For items 1,2,3,5,7,8 and 9 of Table III the record is
provided by the Foreign Exchange Control Board; the forecasts are
rough estimates only.
Items 11 and 12 are a breakdown of former item 11. In
view of the magnitude of recent calls of securities for payment
before maturity, it seems advisable to state their amount separate-
ly. The forecast given for item 11 is based on the estimated
forsign holdings of Canadian bonds maturing in the United States.
Because of the proven difficulty of forecasting security
movements, this estimate has not been carried beyond 1943.
Regraded Unclassified
to Table IV. Hyde Park Transactions,
All the estimates included in this table come from
t. of Munitions and Supply, with the exception of
hich comes from the Department of National Defence
Item 4 shows the retroactive price adjustment on
the sales through War Supplies Ltd., made in June 1945.
Further adjustments will be required in the future, but their
amount and timing is uncertain, so nothing of this nature has
been forecast before the end of the year.
Item 7 shows the net receipts of U.S. dollars by
Canada through Hyde Park Transactions before taking account
of the cancellation of War Supplies Ltd. orders now in process.
See the note at the foot of Table I.
Items 8 to 14 of the table provide additional in-
formation and calculations of interest. None of these items
appear in the balance of payments in the form here given.
of the exports included in Item 8, together with the cash
nd of Item 3, refund prepayments of War Supplies Orders
ded in Item 1. The remainder of the prepayments of Item
the exports against them which are shown for the future
on 8have to do with aluminum contracts.
Regraded Unclassified
to Table V. United States Dollars Obtained Outside
The United States.
Receipts by Canada.
Customs figures for exports (adjusted to eliminate
producing no U.S. dollars), including wheat exports to
neutral countries in Europe from U.S. ports, and F.E.C.B.
data on dividends transferred to Canada by Canadian companies
operating abroad. The irregularities in the second and fourth
quarters are mainly the effect of dividend receipts. The May
forecast of this item proved an under-estimate; the present
forecast is somewhat higher.
Item 2. Payments by Canada.
Customs figures adjusted to eliminate items for
which no payment in U.S. dollars is required.
Item 4. Net Receipts of U.S. Dollars from Newfoundland.
Net amount of exchange sold to the Foreign Exchange
Control Board.
Regraded Unclassified
147
PARAPHRASE OF TELEGRAM SENT
TO:
AMERICAN EMBASSY, CHUNGKING, CHINA
DATE: September 17, 1943, 4 p.m.
NO.: 1298
FOR ADLER FROM THE SECRETARY OF THE TREASURY.
Please discreetly consult the proper authorities
of the Chinese Government and -- unless there is objection
by the Chinese authorities -- arrange through reliable
and confidential channels for the delivery of the follow-
ing message which the American Jewish Joint Distribution
Committee is very anxioue to have reach its representatives
(either Laure Margolis or Manuel Siegel) in Shanghai:
Could you, under existing conditions,
utilize authorization to borrow locally up
to $40,000 monthly for 8. period of the next
six months in order to carry on relief acti-
vities among refugees? Should such an
authorization be desired, proupt favorable response
may be expected,
Any reply which may be received should be given the
same facilities for transmission.
The Embassy is requested, in the absence of Adler,
to carry out the above request. Should the Embassy
not be in a position to carry out this request, the
message should be held until the return of Mr. Adler.
HULL
Regraded Unclassified
148
PLAIN
NC
Chungking via N.R.
Dated September 17, 1943
Rec'd 1127 p.m.
Secretary of State
Washington
1743, seventeenth
Central News Agency in referring to resolution adopted by
CEC session September 11 on program for intensification of price
control states that "arrangements have been made with the United
States for the purchase of United States $200,000 worth of gold."
In the resolution appears a statement that "the United States has
promised to lend to China a large quantity of gold."
Government spokesman at press conference September 15 as
reported by Central News Agency stated that Chinese Government
has proposed to use US $200,000 from balance of US $500,000 credit
extended by American Government to buy gold bullion to combat
inflation in China. Spokesman also said that Chinese Government
has decided to revise stabilization agreement and is negotiating
with US Government at Washington.
NOSHHOLV
DD
eh:copy
9-20-43
Regraded Unclassified
149
NOT TO BE RE-TRANSMITTED
13
COPY NO.
BRITISH MOST SECRET
U.S. SECRET
OPTEL No. 307
Information received up to 10 A.M., 17th September, 1943.
1. NAVAL
16th. H.M. ships continued their bombardment of the SALERNO
bridgehead which together with air bombing was an important factor in the 1m-
provenent of the military situation. In the AEGEAN one of H.M. Subnarines sank
a schooner And a tug on the 5th. Another of H.M. Submarinos sank a caique on
31st of August end B. 1,000 ton ship on 2nd September.
2. MILITARY
ITALY. 5th Army, By last light 15th there had boen no enjor
onemy attack for 48 hours and the situation in the bridgehead had temporarily
been stabilised. On the 16th A limited Allied counter attack was nade from
the area south of the SELE. Reinforcements are arriving steadily.
8th Army. On 15th units of 5th Division word concentrating in
SCALEA and by first Jight on 16th reconnaissance units were in SAPRI with pntrol
beyond. There was no repatition no contact with enemy.
3. AIR OPERATIONS
WESTERN FRONT. MONTLUCON. 15th/16th. 1,017 tone including
35 4,000 pound and 527 tons of incondiarios dropped at Dunlop factory. Marker
bomba seem to have been accurately placed but bombing from above clouds THE
somewhat scattered at first. Later arrivals at lower altitude identified
factory buildings and therenfter better concentration resulted. The pilot of
a Spitfire yesterday BCW that the factory was extensively damaged and WAD
burning fiercoly.
GREVEN. 16th. Thick ground haze hampered successful attnck.
A total of 220 Fortresses bombed the docks and an airfield at MANTES, U-bont
pens and docks at LA PALLICE and 2 airfields in Western France dropping 588
tons in all. 99 medium bombors droppod 130 tons on BEAUMONT LE ROSER and
TRICQUEVILLE tirfields, Serqueux Railway cuntre and a power station near
HOUEN. 43 squadrons of fighters provided support. Enemy casualties 35, 10, 6.
12 Fortresses and 3 fighters missing. Hamplens torpedoud n. 3,000 ton ship off
NORWAY and fighter bombers damaged 3 1,000 ton ships and several smallor vessels
off FRANCE and HOLLAND. 5 fighter bombers missing.
16th/17th. Aircraft desputched - MODANE Railway Centre 345 (4
missing); another railway vinduct near ST. R.PHAEL 12 (one missing); BERLIN 5;
Leaflets 3; Intruders 44 (1 missing). Wenther over MODANE good and bombing well
concentrated.
ITALY. 14th/15th. 186 medium and light bombers attacked enumy
communications in the SALERNO area dropping 315 tons.
15th. 357 hoavy, medium and light bombers dropped about 420 tond
on roads and enomy troop concentrations in the NAPLES, EBOLI and POTENZA are
Beaufighters torpedoed a 2,000 ship off LEGHORN.
Regraded Unclassified
1000 part
U.S. COAST GUARD
150
TREASURY DEPT.
HEADING RW94/544Y
PTA 544Y 181805 QUAT W QUAH GR19
TRLP 12453..
LOS o N o T
SECTREAS OFFICE..
COMDT cg..
TEXT
CHARLES BELL MAIN TREASURY BLDG X CHARLIE COULD YOU
ARRANGE BERTH NEWYORK TO WASHINGTON MIDNIGHT MONDAY
X GEORGE ALBEE
BT 181805
3
TOD 1809 18 SEPT 43 JG
OPERATOR'S TH RECORD AND DATE
OFFICIAL INITIALS
Regraded Unclassified
100 HIP
U. S. COAST GUARD
151
TREASURY DEPT.
HEADING RW62/544Y
PT A Q2U 181508 QUAT W QUAH GR23
/
SECRETARY OF THE TREASURY
OFFICE OF SECTREAS
o
COMMANDANT CG
TEXT
CHARLES BELL SECTREAS OFFICE X ARRIVING PITTSBURG 12400 CAN YOU
GET ME OUT OF THERE FOR WASHINGTON ON PLANE PLEASE
X FRED SMITH BT 181508
3
TOD: 1516 SEPT 18 1943/SX
MO
OPERATOR'S RECORD AND DATE
OFFICIAL INITIALS
$
Regraded Unclassified
152
Copy
9/18/43-
U. S. Coast Guard
From:
Sec. Treas. Office
To:
Fred Smith
For Fred Smith X Check with reservations at
sirport Pittsburgh X Your reservation priority three
Pennsylvania Central Airlines departing Pittsburgh
1355Q arriving Washington 1516Q X Signed Charles Bell.
18 September, 1943. 1641.
Regraded Unclassified
YORK
U.S. COAST guard
153
o
TREASURY DEPT.
MEADING
RW60/N0I 544Y PT A Q2U 181504 QUAT W QUAH GR28
SECRETARY OF THE TREASURY
OFFICE OF SECTREAS
COMMANDANT CG
TEXT
THEODORE GAMBLE MAIN TREASURY BLDG WASHN DC X KINDLY ASK
MARK ODEA SUGGEST BEST SHIPYARD I CAN DELIVER SPEECH ON
MARITIME DAY ANSWER WITHIN HOUR IF POSSIBLE BT 181504
3
CC (C - GR27) TOD: 1510 SEPT 18 1943/SX
OPERATOR'S RECORD AND DATE
MO
OFFICIAL INITIALS
$
Regraded Unclassified
154
all
U.S. COAST guard
TREASURY DEPT
HEADING RW64/544Y
PTA Q2U 181514 QUAT W QUAH GR20
SECRETARY OF THE TREASURY
0
OFFICE OF SECTREAS
COMMANDANT CG
TEXT
PRIORITY
BELL AND GAMBLE SECTREAS OFFICE X PLEASE CHECK ON NUMBER
OF BOND OUTLETS OPERATING AT NIGHT X HAVE WE ENOUGH
BT 181514
3
TOD: 1520 SEPT 18 1943/SX
OPERATOR'S RECORD AND DATE
OFFICIAL INITIALS
$
5
Regraded Unclassified
155
121 gift
U.S. COAST GUARD
TREASURY DEPT
HEADING
RW46/544Y PTA 02U 181400 QUAT W QUAH GR34
SECTREAS
SECTREAS OFFICE
COMDT CG
TEXT
FOR BELL AND GAMBLE OFFICE OF SEC OF TREAS X PLANTS HERE
HAVE NO BOND QUOTAS X KE EVIDENTLY THIS IS TRUE IN ILLINOIS
ALSO X QUESTION HOW MANY STATES HAVE GIVEN QUOTAS TO PLANTS
BT 181400
3
OFFICIAL INITIALS
8NdSEPT 1943 JO
5
Regraded Unclassified
156
your yes
U.S. COAST GUARD
TREASURY DEPT.
RW53/544Y
PT A 544Y 181428 QUAT W QUAH GR36
HEADING
TRLP 12453
SECTREAS OFFICE
0 0
COMDT CG
TEXT
THEODORE ROOSEVELT GAMBLE MAIN TREASURY BLDG X WOULD YOU PHONE
" SATEVEPOST ASK IF INTERESTED IN BUYING STORY TITLED QUOTE
WORLDS MOST FANTASTIC SALES ORGANIZATION UNQUOTE THE INSIDE STORY
OF SELLING WAR BONDS BY ME X ALBEE BT INN 181428
3
TOD 1435 18 SEPT 1943 JO
OPERATOR'S RECORD AND DATE
MO
OFFICIAL INITIALS
$
Regraded Unclassified
157 0
or HIP
U.S. COAST GUARD
TREASURY DEPT.
HEADING
RW47/544Y PT A 5448 181403 QUAT W QUAH GR30
TRLP 12453
SECTREAS OFFICE
COMDT CG
TEXT
GAMBLE SECS OFFICE X SECRETARY WANTS TO KEEP REPORTS COMING
FROM OWI ON AXIS REACTION TO THIRD WAR LOAN FOR DURATION OF
DRIVE X CAN YOU FIX IT X FRED BT 181403
is
3
TOD 1407 18 SEPT 1943 JO
PEPATOR'S RECORD AND DATE
MO
OFFICIAL INITIALS
$
Regraded Unclassified
COPY
158
U. S. Coast Guard
From: Office Sec. Treas.
To:
Sec. Treas.
Mark Odea recommends Southeastern Shipyard Savannah
Georgia X They have big day planned X Grace Tully 18 christening
ship X Plant to receive special M award that day X Maritime
and state officials to make big day of it and believe ideal
spot for you to broadcast from X Your participation would be
separately handled and be one of several important events
during day X Suggested hour 1100Q X Reference bond outlets
at night we have six thousand theaters two thousand drug stores
and yesterday asked fifteen hundred Chambers of Commerce to
sponsor a merchants night like that being staged in Chicago
tonight X Every State Street store from Marshall Fields down
remaining open tonight for the sale of bonds only preceded by
big promotion campaign X Feel we have night outlets sufficiently
taken care of X Have report for you on plant quotas from cross
section of country that I think looks pretty good X If Albee
18 not ribbing I can sell story X OWI continuing monitor reports
X This cleans the desk 80 give us some more X Love and kisses X
Gamble.
18 September, 1943. 1630.
Regraded Unclassified
159
U. S. COAST GUARD
TREASURY DEVE
RW49/544Y
PTAI Q2U 181407 QUAT W QUAH GR49
HEADING
SECTREAS TREAS
SECTREAS OFFICE
COMDT CG
TEXT
DAN BELL AND TED GAMBLE OFFICE OF SEC OF TREAS X FEDERAL RESERVE
BANK OF STLOUIS HAS SET UP QUOTA BY STATES FOR EIGHTH DISTRICT
AND HAS RESULTS OF BOND D SALES EVERY NIGHT X QUESTION WHY CAN
NOT EVERY FEDERAL RESERVE BANK DO LIKEWISE AND WIRE IN RESULTS
NIGHTLY BT 181407
3
OPERATOR'S RECORD AND DATE
OFFICIAL INITIALS
TOD 1616 18 SEPT 1943 JO
$
DWB:ew
Regraded Unclassified
160
September 18, 1943
Memorandum to be radioed to Secretary Morgenthau
Re: Quota and bond sales by States in
Eighth District
System for reporting sales which St. Louis has
is result of our instructions. All Federal Reserves
have it. We get these reports each day from Federal
Reserve banks and such reports form the basis of
daily State figuresgiven to the Press.
(Initialed) D.W.B.
DWB:ew
Regraded Unclassified
161
COPY
U. S. Coast Guard
From:
Office Seo. Treas.
To:
Sec. Treas.
Re Quota and bond sales by states in Eighth District X
System for reporting sales which St. Louis has 1s result
of our instructions X All Federal Reserves have it X
We get these reports each day from Federal Reserve Banks
and such reports form the basis of daily state figures
given to the press X D W Bell.
18 September, 1943. 1633 NM
Regraded Unclassified
100 N°
U.S. COAST GUARD
162
TREASURY DEPT.
RW55/54AW
PT A 02U 181441 QUAT W OUAH GR33
HEADING
SECRETRARY OF THE TREASURY
OFFICE OF SECTREAS
COMMANDANT CG
TEXT
PRIORITY
HARRY WHITE OFFICE OF SEC OF TREAS X WILLING TO GO BEFORE
CONGRESSIONAL COMMITTEES NEXT WEDNESDAY TO EXPLAIN WORLD
STABILIZATION OF CURRENCY PROGRAM X HAVE TO BE IN NEWYORK CITY
ALL DAY THURSDAY BT 181441
(SEC SEZ RUSH THIS ONE PLEASE)
3
TOD: 1448 SEPT 18 1943/SX
OPEPATOR RECORD AND DATE
OFFICIAL INITIALS
MO
$
Regraded Unclassified
EXP SALE
U.S. COAST GUARD
163
HEASURY DEPT
HEADING RW108/546Y
PTA NE546Y 181913 QUAT W QUAH GR24
TRLP 12453..
SECTREAS OFFICE..
COMDT CG..
TEXT
ISABEL DIAMOND MAIN TREASURY BLDG X KINDLY GET SEVERAL 1917
SPEECHES WILSON AND MCADOO ETC ESPECIALLY THOSE RELATING TO WAR
BONDS y GEORGE ALBEE BT 181913
2
3
TOD 1916 18 SEPT 43 JG
OPERATOR'S RECORD AND DATE
OFFICIAL INITIALS
TH
$
Regraded Unclassified
- 04/9
U. S. COAST GUARD
164
TREASURY DEPT
HEADING
RW67/54AY
P T A 02U 181533 QUAT W QUAH GR63
SECTREAS
SECTREAS OFFICE
COMDT
TEXT
GAMBLE SECTREAS OFFICE X STAND BY FOR CALL FROM ME
FROM PITTSBURG 12200 TO CLEAR ANY STATEMENT FOR TONIGHT X
SMITH WILL BE IN OFFICE THIS AFTERNOON TO CLEAR ANY
LATER STATEMENT THIS WEEK END X WHERE WE ARE LOTS
OF SUNSHINE AND PLENT; OF OXYGEN AND IN CASE YOU
DONT KNOW IT WE ARE OVERFLOWING WITH GOOD CHEER AND PLENTY
OF IDEAS
BT 181533
3
TOD 1443 18 SEPT 43 JG
OPERATOR'S RECORD AND DATE
OFFICIAL INITIALS
MO
$
Regraded Unclassified
110 HIP
U.S. COAST GUARD
165
REASURY DEPT.
HEADING
RW45/544Y PTA Q2U 181357 QUAT W QUAH GR13
SECTREAS
SECTREAS OFFICE
COMDT CC
TEXT
FITZGERALD OFFICE OF SEC OF TREAS X ARRANGE TO HAVE JOE MEET ME
BT 181358
3
&NDSEPT 1943 JO
OFFICIAL INITIALS
NI
$
Regraded Unclassified
self
U.S. COAST GUARD
166
TREASURY DEPT
HEADING
RW65/54AY PT A 02U 181520 QUAT W QUAH GR13
SECTREAS
SECTREAS OFFICE
COMDT CG
TEXT
PLEASE FURNISH MRS KLOTZ WITH COPY OF ALL MESSAGES WE HAVE
SENT TODAY BT 181520
3
ENGENT 1943 JO
OFFICIAL INITIALS
$
MO
Regraded Unclassified
167
September 18, 1943
Dear Mr. Craw:
I want you to know that I appreciate
your coming on the radio program with me
last Sunday in connection with our Bond
drive.
I have received a number of letters
and calls that would indicate that the pro-
gram was very effective and successful, and
you can be proud of the part you played to
make it so.
Sincerely,
(Signed) H. Morgenthau, Jr.
Mr. Nicholas Craw
1345 Hilltop Road
Charlottesville, Virginia
FS:gr Rs
Regraded Unclassified
168
September 18, 1943
Dear Lieutenant Davis:
I want you to know that I appreciate
your coming on the radio program with me
last Sunday in connection with our Bond
drive.
I have received a number of letters
and calls that would indicate that the pro-
gram was very effective and successful, and
you can be proud of the part you played to
make it 80.
Sincerely,
(ligned) H. Morgenthau. IT
Lieutenant Landon Davis, Jr.
Oxford Road
Charlottesville, Virginia
FS:gr
Regraded Unclassified
169
September 18, 1943
Dear Mrs. Harlow:
I want you to know that I appreciate
your coming on the radio program with me
last Sunday in connection with our Bond
drive.
I have received a number of letters
and calls that would indicate that the pro-
gram was very effective and successful, and
you can be proud of the part you played to
make it so.
Sincerely,
(Signed) II. Morgenthon, Jr.
Mrs. Henry Harlow,
Route 2,
Charlottesville, Virginia.
FS:gr is
9-17-43
Regraded Unclassified
170
September 18, 1943
Dear Mr. Henderson:
I want you to know that I appreciate
your coming on the radio program with me
last Sunday in connection with our Bond
drive.
I have received a number of letters
and calls that would indicate that the
program was very effective and successful,
and you can be proud of the part you played
to make it 80.
Sincerely,
(Signed) I. Mergenthau, Jr.
Mr. Willis Henderson
Monticello, Virginia
FS:gr By
Regraded Unclassified
171
September 18, 1943
Dear Mr. Hope:
I want you to know that I appreciate
your coming on the radio program with me
last Sunday in connection with th our Bond
drive.
I have received a number of letters
and calls that would indicate that the pro-
gram was very effective and successful, and
you can be proud of the part you played to
make it so.
Sincerely,
(Signal) 1. Mergenthan, Jr.
120
Mr. Bob Hope
Del Monte Lodge
Pebble Beach, California
FS:gr
Regraded Unclassified
172
September 18, 1943
Dear Mrs. King:
I want you to know that I appreciate
your coming on the radio program with me
last Sunday in connection with our Bond
drive.
I have received a number of letters
and calls that would indicate that the pro-
gram was very effective and successful, and
you can be proud of the part you played to
make it SO.
Sincerely,
(Signed) M. Mergenthau, Jr.
Mrs. Betty King
c/o IX Silk Mills
Charlottesville, Virginia
FS:gr #
9-16-43
Regraded Unclassified
173
September 18, 1943
Dear Sergeant Kozak:
I want you to know that I appreciate
your coming on the radio program with me
last Sunday in connection with our Bond
drive.
I have received & number of letters
and calls that would indicate that the
program was very effective and successful,
and you can be proud of the part you played
to make it so.
Sincerely,
(Signed) H. Merganthon, H.
Sergeant Frank Kozak
Archbald Street
Carbondale, Pennsylvania
F8:gr
R
9-17-43
Regraded Unclassified
174
September 18, 1943
Dear Ernie Pyle:
I want you to know how much I appreciated
your coming on the "We the People" program
last Sunday. From all reports, our program
was very successful and effective, and in a
large measure this was due to the contribution
you were able to make.
I also appreciate the time you gave me
for our private discussions. I am sure the
information which you have will prove very
helpful to the war effort when it is passed
along to the right places.
Sincerely,
(Rigned) H. Morgentham, Jr.
Mr. Ernie Pyle
o/o Lee Miller
Scripps-Howard Newspaper Alliance
1013 Thirteenth Street, Northwest
Washington, D. C.
FS:gr
9-16-43
&
Regraded Unclassified
175
September 18, 1943
Dear Mrs. Truscott:
I want you to know that I appreciate
your coming on the radio program with me
last Sunday in connection with our Bond
drive.
I have received & number of letters
and calls that would indicate that the pro-
gram was very effective and successful, and
you can be proud of the part you played to
make it BO.
Sincerely,
(Migned) H. Mergenthan, Jr.
Mrs. Lucian King Truscott, Jr.
Jefferson Park
Charlottesville, Virginia
FS: gr if
Regraded Unclassified
176
September 18, 1943
Dear General Wickersham:
I want you to know that I appreciate
your coming on the radio program with me
last Sunday in connection with our Bond
drive.
I have received a number of letters
and calls that would indicate that the pro-
gram was very effective and successful, and
you can be proud of the part you played to
make it so.
Sincerely,
(Signed) H. Morgenthan, Jr.
Brigadier General Cornelius W. Wickersham
Commandant of the School of Military Government
University of Virginia
Charlottesville, Virginia
FS:gr
to
Regraded Unclassified
177
September 18, 1943
My dear Mr. Celler:
In the absence of the Secretary.
I am acknowledging your letter of
September 16, together with the on-
closed statement released on August 12.
Just as soon as Mr. Morgenthau is
back in his office I shall be glad to
bring both your letter and the enclosure
to his attention.
Very truly yours,
(Signed) H. S. Klotz
H. S. Kletz,
Private Secretary.
Honorable Emanuel Celler
House of Representatives
Washington, D. c.
GEF:fw
9/18/43
Regraded Unclassified
fol Has been arboro
178
[MANUEL CELLER
NEW YORK OFFICE
box
10TH DISTRICT NEW York
1450 BROADWAY
New York CITY
MEMBER OF
MMITTER ON THE JUDICIARY
Congress of the United States
1924 NEW HOUSE OFFICE BUILDING
WASHINGTON
MASSINGTON SECRETARIES
bouse of Representatives
NEW YORK SECRETARIES.
- EFFRAT MARGARET BROOKS
JACOB GRALLA
MARY DOUGHENTY
Washington, D.C.
September 16, 1943
Honorable Henry Morgenthau, Jr.,
Secretary of the Treasury
Washington, D. C.
My dear Mr. Secretary:
views
I was keenly disappointed that my aintement did
not find P. responsive chord within you this morning.
I am sending you herewith a statement which I
prepared, entitled the "Betrayal of Palestine." You
may not have time to read it now. Lay it aside for
a more leisurely moment.
Yours truly,
Emamuel
EMANUEL CELLER
ENC:
Regraded Unclassified
179
For Immediate Release
August 12th, 1943
THE BETRAYAL OF PALESTINE
STATEMENT BY CONGRESSIAN EMANUEL CELLER, REPRESENTATIVE
TENTH CONGRLSSIONAL DISTRICT, IN YORK
From thoroughly relisble sources, information of a bitterly dismaying
nature has come forth that a joint statement will be issued shortly by the
British Foreign Office and the State Department, silencing all discussion on
the Arabinn-Jewish question in Palestine, and which will with one duvastating
stroke the hopes of those who dared look towards Palestine as the one
realistic approach to the solution of the homelessness of e driven people. It
will, in effect, be an implied, but nonetheless conclusive, acceptance of the
MacDonald White Paper of 1939 which decreed that no more than 75,000 Jews will
be admitted to Palestine for a five year period. The joint statement will with
its "Silence, please", drown the clamour of the tortured Nazi victime pleading
for a haven of refuge. or the alloted 75,000 certificates of entrance, less
than 29,000 now remain unused. These, more or less, will be confined to
children. Adherence to the MacDonald White Paper means that in 1944 Jowish
immigration into Palestine must cease altogether if so voted by El majority of
Arubs.
Even more alarming is the accompanying information that the joint state-
ment will be issued with the knowledge and consent of the President. Although
he NES importuned to stay the hand of the State Department, the reactionary
forces were stronger, and, while it may be somewnat softened as a result of the
intercession of the President, it apulls the doom of the Zionist cause and the
beginning of the end of the long trek home. In the name of expediency and
appeasement, under the shallow pretense of cilitary and political necessity,
Pulestine 60 EL homeland for the Jews becomes the "lost Atlentis" of & helplens,
hopeless, unwanted people.
Neither we nor Dritain can fall back upon the hackneyed, amaggeroted and
convenient excuse of military necessity or expediency. The lessons of history
seem unavailing. Our scrup iron and oil did not appease Japan. Our appeasement
of Vichy and Petain gave us Laval. Our diploancy with Pronce and his Falange
and with Argentine has been artless and childlike. They play and continue to
play ducks and drakes with us.K
How 111 have the June used Palestine that now the one open door must like-
wise be slammed shut in their search for dignity and security. They husbanded
the arid soil of Palestine and made it rich in the fruits of the earth; they
built hospitals for the Jen and Arab alike; they brought the lamp of learning
to the desort with schools and the world-runswned University; they brought music
and science to a world that had been left behind in civilization's murch.
That which WELD uncultivated and considered uncultivable by the Araos hue
bown cuitivable and cultivated by the Jews. The sands of Rishon 10 Zion, the
swemps of Hedra, the rocks of Motza, blue stoney hills of Henito, and the largest
malarial Are in Poluatine, the Hulch Booin, which has been classified not only
By the Arabs but also by the British Government E.O uncultivable land ie-now-
are now being turned into the most prosperous and productive land of Palestine.
They had to reclaim, drain, reforest, fertilize and irrigate; they introduced
modern and intensive muthods of cultivation, modern machinery, new breede of
enttle and poultry, new plants and need rotation of crops. In 1939, the Peel
Royal Commission stated: 12 years "go the national home was an experiment; today
16 is a going concern!
There has been since then further expansion. Now industries have been
started, bextile, chemical, wood, metal, electrical, food, building clothing
which supply the home market and the Near Last L8 far as India. In 1941 alone,
over 200 new Jowish industrial undertalding were established.
Nor has the Lanigration and auttlement of Jeus in Polestino boen at Arob
expense. The increase in the yield of the land has unde it possible not meroly
to provide for additional settlers, but ackes it possible for the old acttlers
to enjoy z. higher standard of living. The Arabs, it was shown, have chosen to
live in gruatest numbers in the neighborhood of Jowlsh suttlements, and the in-
crease of the Arcb population has closuly paralleled the Junish increase, not
Regraded Unclassified
180
-2-
only through the lowered death rate, but also Decluse large numbers of non-
Polustinion Araba had neeped into the country to enjoy the highest standard
of living in the Near East. Indued, it would be E calamity for the Arabs
If the Junish settlement in Polustine were to DE liquidnted. The much
vainted limitations of "absorptive capacity" of Palestine 1a & myth in the
light of Dr. statement that there is room for 2,000,000 more souls
in Polestine, Cnd oven that estimate has boon deced conservative. It in
time to ask why those facts are not given space in newspapers and magazines
of Large circulation? Have not they earned a right to be heard?
Lut the Juice go elowhere, it will be said in mocking perallel to "Let
than vot cake." Of all the nations fighting together in the name of freedom
and liberty, not one has raised its voice to make then welcome, to offer them
rescue, refuse or asylum.
what answers can those responsible for the statement give when 48kud:
"What in the rumedy?" Whore shall these people guilty of no crime but that
of buing born Jun to? what plans are offored by the authore of the Atlantic
Charter end the Four Freedoms for the re-suttlement of the June after the
4019 Will the anti-Sumites give the finel answer to an uprosted people?
On the contrary, it would appear that curtain forces have done their
work exceedingly well in preparing for an uncritical receptivity of the
forthcoming atatement. A number of inspired articles have appeared, all
following in what to be E planned suguence, to crecto the proper et-
nonphere, buginnin with the publication of King I'm Soud's statement in ita
opposition to Zionism end continuing through with the publication of the
crticles by Cyrus L. Sulzberger in recent issues of the "Now York Times"
which more sunsational Will occurate and more impolitic than wise.
ay WER this puriod chosen to review adversely the Junish question in Files-
tine? Is Unive any connection between the appearances of these articles and
the mischier to ou loosed shortly by V.itchell Street in London and our
State Department?
How relevant MY or asy not be the fact that one or"more of our in-
dustricl glants have received valuable concussions from Kin: Ibn Saud we
do not know. Public Relations Counsolors cro cenny people.
Small wonder that Ur. Churchill lias sloupless nights when he thinks of
fda friend Choin luizmann, Zionist lunder, for did not Dr. Churchill say
Ln 1939 at the appearance of the nou 1.ferious W: aDonald Thite Paper:
"I bound to vote against the proposale
of His Wajesty's Government. As one intimately
and responsibly concurned in the earlier stages
of our Palestine policy, 1 could not stand by and
sue solemn engogements into which Britain has
entered before the world set acide for reasons of
administrative convenience or - and it will be
a voin hope - for the salte of c quiet 11ft. I
should feel personally unbarre: satd in the most
acute manner If I lent myself, by silvnce or
inaction, to what I must regard ZS an act of ru-
pudietion.
I DES from the beginning a sincere advocate
of the Balfour Declaration and I have made repeated
public statements to that effect There is much in
this White Paper which is clien to the spirit of the
Balfour Declaration, but I will not trouble about that.
I select the one point upon which there is plainly
D. breach end repudiation of the Dolfour Declaration -
the provision that Juvish indigration can be stopped in
five years' time by on Arcb ME. jority hot is that
but the destruction of the Bolfour Declaration? /het
is that but 2 breach of faith? What is it but e one-
sidul denunciation - that La celled In the Jergon of the
present time, 2 unilatoral denunci, tion of on engagement?
In our condition 30 perious 206 our state so poor that
we must, in our weakness, make this scorifice of our
declared purpose?"
Regraded Unclassified
181
Kr. Churchill WCD aware that 53 nations including the United States had
retified the Halfour Declaration. On the 21st day of September, 1922, our
American Congruss by wey of Resolution approved the establishment of e national
hode for the Jewish People in Palestino. May, over and beyond the universal
acceptance and approval of the Belfour Doclapation, on December 23, 1924, E
Convention was signed by the then Prine Minister of Great Britain, Austen
Chamburlain, and our then Secretary of State, Frank B. Kollogg, concerning the
rights of Britain and the United States in Palestine. Significantly, Article
15 and subcrticle 7 of Article 28 read as follows:
Article 15
1 The mendantory shall See that no discrimination of any
kind shall be made between the inhabitants on the ground
of rece, religion, or language. Ho person shall be excluded
from Prlestine on the sole ground of religious buliefs.
Subarticle 7 of Article 28
Nothing contained in the present convention shall be
affected by any modification which may be mede in the
terms of the mandate, as recited above, unloss such
modification shell have Suan assented to by the United
States.
Yet in open violation of both the Balfour Declaration and the Convention
of 1924, the MacDonald White Poper finunted the neighted decision of responsible
government heads. The Belfour Declaration IES consented to by the United States
The Convention of 1924 was consented to by the United States. Who consented
to the promulgation of the White Paper? That can Mr, Anthony Eden say when
confronted with the forthcoming statement as his own phrases attured in this
country re-ucho through his aind, "Never again", he said, "must the civilized
world be rundy to tolerate unilatural infrection of trusties. That would be
to sap the whole foundation of the socure international 111'e which it is our
principal purpose to restore." "That in the Thite Paper but a unileteral in-
fraction of a treaty solumnly entered into?
Sursly silunce cennot break the back of bigotry and recial antipathies.
Zalightonment cen only follow in the nake of the trubh, the truth about the
Arabs, for instance. The Allied Nations are well aver- that of all the
senitic tribes in the East only the June contributed the full sucoure of
loyalty to the Allied cause, bringing in proud bulief their blood and humble
treasures. Not DO did the Arabs of Egypt, Syria, Iraq and Iron. For from
boing deutral, they were actually hostile, wasy prey to the foul noises of
Gurman propaganda, In it nocessary to point to the Iraq revolt to illuminate
that point?
The
The Arab londed aristocrate, the eniro and military chieftens are as
insatiable as Satan. It were just as impossible to actiofy or appease them as
is to try to hold back the tidu with a groan, You cannot dual with them
"cartus sur table". And be it remembered these potentation end princes are
Arabia - Pan Arabic. Moduration and palliation are considered by them as
signs of weakness, They take suitable advantage. Just CO Rommel and his
Afrike Korps Were ready to leep from KL Alomein to Cairo and then sual the
fate of the Allies in the llver Last by closing up the Suez Conal, the lately
avoued friund of America and Britain, King Ibn Soud, had not / word to say,
could not sper- E. single trooper, occul or donkey for Britcin's use. More
British troops aure required to patrol the doubtful Arab areas and citius,
especially in Egypt, than there actually focing Roumel's Afrike Korpa in
the Lybian descrt, Piorro von Pesson reports.
It WEB the June of Polustine that stepped forward 88 El man, voluntarily,
not waiting for on army call. How may know or cir- to know that Palestine
furnished the British armius in Lybia, Eritroa, Ethiopic and Sommliland
thousands of doctors, nurses and duntists and placed the great Hedassah mudical
center of Jurusalem at the disposal of the Empire? Who in there now to give
public recognition to the courage, loyalty end stendfestness of the Jeas in
their aid to the Allied nations in nohieving the trumendous victories? The
Regraded Unclassified
182
The striking fact remains that the countries of the Nuar Gost with an
regregate population of 45,000,000 (if Turkey is included) have contributed
not a single soldier to the forces of the United Nations, the one exception
ouing Polustine which has given her voluntuurs of whom more than 3/4 are
Jown, Those Palestinian June clone in the British Imporial forous numbered
17,000 in September, 1942 in addition to the 10,000 in the military constabu-
lary of the country.
Yet, such has been the reward of the June that Areb appersement is
placed above Junish honor. In Algiors, another cruel blow is struck by
General Giroud's abrogation of the Crumieux docroe, depriving the Algurien
Justa of their French citizenship, theirs since 1870 when Minister Crumisux
in recognition of their loyalty and survice to France 30 ducroed, a citizen-
ship that the Areb never wanted and never nulcomed.
The MecDonald White Paper must be exemined in the light of events
since 1939. If it nos a "breach of faith" then, how much gronter is the
betrayal today? No other course but its abrogation in open now and the
entire problem of the June and Polostine must Do et the forth-
casing Intergovernmental Conference on Rufugeos. To foreclose considera-
tion of additional Jewish innigration into Palestine by any joint pronounce-
not now would doom the conforence to failure. It would suruly report the
cruel mockery unceted it Burrauda and the tragedy of errors at Evian. It
could cake us co-conspiratoro in the violation of international decency and
honor.
In the weke of the turrible scourge of wer, the bitter lesson is
hermured hoge that the Junish problem is a problem of the civilized world,
Jun and Guntile clike. The apathy of nations to the burning, sloughtering
and mossering of June in Geranny did not prevent the horror from spreading
to Cauchoslovakie, to time Polus, to the Dutch, to the Frunch. That which
was violied as et Jondan question become a world conflegration. Inhuncrity in
not exclusive; it cannot confine itcolf to one people without overflowing
in all directions to drown E world in hatred and in flacks,
No puace can be just or adequato until the Juvish problem in outtled.
The one realistic approach in Poleutino.
I yield to no non in my admiration for the British mort and woon and
their mcgnificent efforts in this treasandous crises. The "comon men" in
England has performed heroically the supurhumen tasks occasioned by this
groctunt scourge in civilized history. The English people and the American
people, however, should not be blinded by the dust-storms of official pro-
tust BD to the fate of the Juice in Europe; they should not be duefened by
the noise. Conversation is one thing; it cen be chariting, interesting and
often vducational. But the situation her long since pessed the conversational
obego. Action now is necessary.
Thun the surgoon enters the operating room and his stoff of cosistents
close in on his at the table upon which the patient rosts, immodiate action
classt clways recults, The surguon dous not take scalpul in hand end meke
a fun decisions and then cordially invite the boys to n. game of poker.
From then on F.11 is deftness, co-ordination and cooperation. A human life
is at stoke and time lo of the sssunce. If, in the interests of humenity,
the surgeon doos not hositate, whet certhly russon can pe presented at this
time to countenance dulty when the circumstances cro surrounded by E complete
sura of fatality.
have seved us r.nd the world. But how reconcil< that with her attitudo towards
I Peport by nvowel of addiration for Ingland's unintly uncrifices that
Privatine. A helo need slip but e full inchus to become A noose. She must
opun Polustine to mass Junish indigration it anou; otherwise, Europe
bucomes a mosive Jewish supulchre.
an insupurable burden that must bu gotton rid of willy-nilly, I must remind
Because some of the English Incore regard the Jonish question CB
them of C. classic, favored story of their own King George VI. A boy is
cerrying an oven child up the hill. then asked if bire ourden VICA
too much for his, he replied, "It in not C burden, it is W brother."
Regraded Unclassified
183
-5-
Eithur Christianity in England and America give concrete merning to "Love
they neighbor EJ theyself" or buar the stizar of hypocricy. Be it remembered
that not everyone who LOVE, "Lord, Lord", shell enter the Kingdom of Hurven.
Reading the official protestations of horror, listuning to the verbel
expressions of compassion and voinly writing for the bands of inortie to drop
from the hends of officialdom, I can almost hour the White Queen of "Alice
in Nonderland" anying to Alice, "The rule is: Jen tomorrow end Jam yesterdry,
but nuver jam today."
What schoolroom cat and mouse geme la this to promise, thun plague? Are
the insotiable Aroba to be fud while the cry of distrossed millions finds no
answering call?
The British Empire upon which "the sun nover gets" with its for flung
possessions can now find it in her heart and aind to dony the tiny portion
thursof that is Polectine to C. people who have watered and nourished it in
reliance upon C nighty promise. Had she offered other havens to the storm³
toased of Europe, she night then have said ES did King James to the fly: "Have
I three kingdoms and thou must needs fly into ay wye?"
What are au offering but silence?
The Jens everyahere - horo and abroad - look to President Roosevelt ID
their only hope, their modern Roses to lead then out of the ,ilderness, to
St.Ve them from E now and /Dro terroristic disspora. It apparently is too
Into to change the apulo of opinion of Churchill, Eden, Helifex end other
English leadors SEV4 by drratic name. Their iduns oro congerled except as
Rossevelt will dumand change. in humbly potition his to benr upon the
Britisa Foreign Office to code the light that only justice, Mercy and
humanity con bring. He must bring Ingland back onto the both of the Belfour
Declaration.
I ctll upon the good people of America to help in this crises. There is
so little time to not. Soon Roosevult will must Churchill. They any be in
conclave now. Express your views to thos in cuthority in Enchington - to the
President, to Secretary Hull, Secretary Morgunthou end other members of the
President's Cabinet, your Send tors, your Congressmen. Your voice will shatter
this conspiracy of silunce.
Regraded Unclassified
NOT TO BE RETRANS !ITTED COPY NO.
13
184
BRITISH HOST SECRET
U.S. SECRET
OPTEL 308
Information received up to 10 8.m. 18th September,
1943.
1. Naval
Two of H.M. Dattleships bombarded the Salerno
area on 16th. One was severely damaged by rocket bonbs
and is proceeding to Malta in tow. A floot auxiliary
was also bombed on 14th and is in tow. About 8 Italian
cargo ships arrived at Malta on 14th including one of
over 5,000 tons. An Italian Hospital Ship of 9,500
tons arrived on 15th. The port of Drindisi was opened
on 14th and is in working order but labour is scarce.
The Italian islands of Procida and Ponza were occupied
by Allied forces on 15th. Ischia sur rondered on 16th.
2. Military
Italy 16th. By four p.m. leading elements of the
Eighth Army had reached Villapiana on coast opposito
Scalea where they were in contact with our patrols from
Taranto. Further inland patrols had reached
Castrovillaco and Lagonegro where they were in touch with
the enemy, and Vaclo where they have since been reported
in touch with the Fifth Army. South East of Salerno
the Fifth Army have reccempied Albanella and Eest and
North of Salerno have driven off enemy counter attacks
near Nontecorvino and Cappezzano.
3. Air Oporations
Western Front. 16th/17th Modeno 651 tons Propped.
Cloud and icing met on the way but clear visibility
at Modane, Objective identified visually, many firos
scon burning well.
Antheor No cloud, good visibility torgot
clearly seen all crows confident bombing vas occurate
and one arch reported definitely hit.
17th/18th. Aircraft despatched:sea mining
eight, Berlin six, railways Britanny soventeen.
Italy 15th/16th. Wellingtons dropped 240 tons
on the Torro Annenziata/Pompoii road.
16th. 357 heavy, medium and light hombers
attacked communications in the Naples and Solorno
aroas. Liborators dropped 74 tuns on a supply tump
and road junctions at Potenza.
Regraded Unclassified
185
NOT TO BE RETRANSMITTED
COPY NO. 13
BRITISH MOST SECRET
U.S. SECRET
OPTEL NO, 311
Following is supplementary resume of
Operational events covering the period 11th to 18th
September, 1943.
1.
NAVAL
TIRPITZ and SCHARNHORST are back in Altenfjord.
Mediterranean. Five Italian battleships,
eight cruisers, eight destroyers, twenty submarines and
at least forty smaller craft are now in Allied hands.
One old battleship refitting, one Littorio Class under
construction, two damaged Cruisers, 24 destroyers, 35
torpedo boats and about 40 to 45 submarines are under
German control or unaccounted for. H.M. and U.S. Commsers
and Destroyers, augmented on 15th and 16th by 2 of H.M.
Battleships. Have maintained constant bonbardment of
enemy positions in Salerno Area. Initial landings took
place in good weather but ships' movements were hampered by
mines. Naval Seafires gave Fighter cover from H.M.
Aircraft Carriers for four days until they could use an
airfield ashore.
On 14th naval barrage was used to break up
enemy tank attacks. H.M. Cruisers also brought reinforcements
from Tripoli to Battle Area. French Destroyers and a
submarine have landed troops at Ajaccio. Brindisi, Bari,
Cotrone and Capri are in Allied hands. H.M. Submarines
have sunk two small Merchantmen, hit 7,000 ton tanker with
torpedo and bonbarded Samos. Allied Forces have landed on
Kos, Leros and Sanos, Allied Naval casualties have been
light.
SUBMARINE WARFARE
Summary of anti-submarine attacks in September
reported to noon fifteenth.
Number of attacks by shore-
based aircraft nineteen, by carrier-borne aircraft one, by
Warships fourteen. Sunk and probably sunk by aircraft 2,
possibly sunk by Warships 2. Probably damaged by aircraft 1,
Possibly damaged by aircraft 1, by Warships 3.
Shipping Casualties.
In September to date
no Merchant ship is known to have been sunk in any theatre
by U-boat, Week ending 12th six Ocean convoys arrived
destinations without loss. From 11th to 17th inclusive four-
SECRETARY OF OFFICE TREASURY
1943 SEP 23 AM 8 54
TREASURY DEPARTMENT
Regraded Unclassified
186
-2-
known casualties all by aircraft. British ship in tow West
of Portugal bombed and sunk, British Hospital Ship bombed
off Falerno sank two days later, one U.S. ship bembed and
sunk a nd one damaged in Itelian Operations.
Trade.
Imports in convoy into United Kingdom week
ending
11th.
1,396,000 tons including 699,000 oil,
2.
MILITARY
Italy, Salerno,
Four German Divisions now identi-
fied by Fifth Army, two of which believed not repeat not
fully engaged, Air reconnaissance suggests elements of a
Division from Rome Area moving South. In addition Division
which has been acting as rearguard in Calabria now likely to
be available although advance of Eighth Army will increasingly
complicate enemy's position on his left Flank,
Summary of Operations.
On 11th Port of Salerno opened and A/A defences
installed. Enemy by this time realised importance our attack
and had concentrated his Forces. Object to cut bridgehead
in half.
12th heavy enemy counter attacks launched which cen-
tinued throughout following day. Situation became critical
forcing British to withdraw from Battipaglia.
13th considerable penetration on 2-mile front made
along line River Sele, U.S. troops withdrew from Altavilla
and Albanella.
14th reinforcements including armour continued to
arrive by sea and air. German attempt to break through held.
15th our positions consolidated and very dangerous
moment passed,
16th Several counter attacks repulsed. and on 17th
position continued to improve with enemy attacks again
repulsed, Albanella and Altavilla recaptured by R.S.
Troops in Taranto Area. There are seven airfields in good
condition. Three hundred British Prisoners of War were
rescued from a camp at Pisticci, Reinforcements have
arrived and situation here 1s satisfectory.
German divisions.
No change in general disposition
as between North and South Italy. Total remains eighteen,
all offensive,
Burma, Further reports of Japanese carrying out
relief in Buthidaung Area, where enemy troops suffering
from dysentery.
3.
AIR OPERATIONS
Western Front, Night. 929 Sorties. 18 aircraft
missing. Very Successful attack on Dunlop factory, Montlucon
12 out of 26 major buildings destroyed and remainder damaged.
Modane Railway centre attacked with objective interrupting
cemmunications between Germany and Italy via France. Antheor,
Railway viaduct attacked with same object. Day. Fortresses -
Hispanne Suiza successful three of main workshops destroyed
bombed factories in Paris Area with following results
Caudron-Renault very successful every building hit, Renault
at Billancourt heavy damage. Citroen damaged. Fortress
attacks Nantes docks very successful, one destroyer sunk
and much on damage caused. In R.A.F. attacks one 3,000 ton
ship torpedoed off Norway, three 1,000 ton ships damaged
Regraded Unclassified
187
(3)
damaged off France and Helland and several small craft
damaged off Dutch Islands.
Mediterranean Area.
Italy. Allied heavy, medium, light
and Fighter bombers maintained heavy scale attacks in support
of our troops. Bomber Sorties totalled 720 in one day alone,
Enemy positions and communications round Area Salerno
Bridgehead were repeatedly attacked. In one day 741 Fighter
Sorties were flown over Salerno Beaches where they encountered
total 120 enemy Fighters and Fighter bombers. A 2,000 ton
enemy ship was torpedoed off Leghorn. In all these operat-
ions Allies lost 23 aircraft,
Russia. In the Den Basin the Russian Air Force
heavily bombed the German lines of retreat by day and night
and damaged many troop trains and motor vehicles, German
Airfields were attacked by day and many aircraft reported
destroyed on the ground, Elsewhere in the active sectors
of the Front the Russian Air Force was chiefly engaged in
direct support of their ground forcès,
4,
Extracts from Photographic and Intelligence Reports
of Allied A1r attacks.
Mannheim. Attacked 5th/6th. Photographs 9th show
considerable damage to business and residential property
in the most closely built-up areas of both Mannheim and
Ludwigshafen many streets between Mannheim Main Railway
Station and river are devastated. New Industrial damage
includes factories making Antillery Tractors and Tank
dompenents, chemicals, Marine Diesel Engines (Sulzer)
etc., Also Railway Repair Shops, Gas Works and Main Post
Office.
Hamburg. Final summing up indicates destruction on
scale far beyond anything yet achieved in Air bomberdment.
There are thousands of acres in which every building in every
street is ruined.
Special Items. Over 77 percent of the fully built-up
Area destroyed or damaged., all four main shipyards damaged,
five floating docks sunk or damaged also many ships
including 12 Medium sized or Larger., in one diock every
warehouse for about a mile is burnt out,, 2 important power
stations appear to have been idle every since, two other
power stations badly damaged, two very large gasholders
burnt out,
5.
HOME SECURITY
Although over 20 bomb incidents reported. 15th/16th
only one civilian in Kent Village killed during period.
Regraded Unclassified
188
1
NOT TO BE RE-TRANSMITTED
COPY NO. 13
BRITISH LOST SECRET
U.S. SECRET
OPTEL NO. 309
Information received up to 10 0.m., 19th September, 1943.
1. NAVAL
Reconnaissance of SPEZIA 15th showed 1 Italian Cruiser, 1
Destroyer, 1 torpedo bost and El cargo ship had been scuttled. An 8 inch
Oruiser appears to be damaged by fire, At SAVONA, 4 merchant vessels had
been scuttled and at TRIESTE, 1 Tanker, 1 merchant ship and a coaster,
17th. A Hospital Ship was ineffectively bombed off SALERNO and
on Italian Hospital Ship WCS attacked by aircraft south of COTHONE. One of
H.L. Destroyers was damaged by near misses. Another of H.K. Dostroyers sonk
2 cargo ships in the Southern AEGEAN on 17th.
2. MILITARY
ITALY. To 4 p.m., 17th. 5th Army. South of SELE, the front
remains fluid. On 16th, U.S. troops ceptured ROCCADASPIDE end on 17th, ALTA-
VILIA. Air Reconneissenco report Allied Troops ct CONTRONE, 6 miles north of
ROCCADASPIDE. British troops have receptured BATTIPAGLIA.
8th Army, Londing clements are moving north from LAGENEGRO
towards LONTESANO.
TARANTO AREA. There was strong roaction from Gormans in small
night ongagoments at GIOJA and LATENZA.
SARDINIA. Germans reported to have almost completed ovocuction
to CORSION after attacks by 2 Itelian Divisions. Some Italion borbers have
been attacking Gorman craft in the STRAIT OF BONIFACIO.
CORSICA. Itelions and patriots have nade SOLD gains in the south.
GREEGE. Most Italien formations have been discraed by the Gormont
Itolian Gorrison. Portison Guorillos have ceptured SUSAK end SPLIT. Italians
ADRIATIC. Gormons have seimed 'LJUBLJANA' and discried the
have overcome Gormon opposition in the CETINJE-KOTOR Gulf Area and word rc-
sisting tho Germons and Croat Pro-Gornen troops ct DUBROVNIK on 14th.
3. AIR OPERATIONS
WESTERN FRONT. 18th. A total of 52 escorted light and mcdium
bonbers attacked cirfields at BEAUVAIS end ST. GER and 1. ef the reilway
1 missing. ROUEN, Typhoons damaged o 1,500 ton ship, 6 tugs, 9 cosstors - bargos
contros at dropping 55 tons in all. Enemy cosunlties: 1.0.1. and 15 Ours:
"ff the Dutch Coast. 18th/19th. Aircraft despritched: Scc-mining 45,
COLOGNE - 5,
16th. Lustings drophed 30 tons on ronds and trensport 81
dostroying 16 ITALY. vehicles. Lightnings petrolled the benehes and relotsed tons
over the battle pron.
Airficld und other circraft attacked communio: tions dropping : ltogothor about
16th/17th. "ollingtons dropped 150 tons on CISTERN../LITTORIA
65 tons.
78 tons were rolenace by Liberators on reflusy objectives modium
at bonbors. PESCARIA. of 242 tons was (5 corrupt groups) circraft :nd 18 gliders 120
Airficlds 17th, at outskirts of RO.E were bombed by he vy cod
very reported A total dostroyed on the ground. Lightnings and Lustongs dropped
tons over the bottle STOC.
Regraded Unclassified
NITED KINGDOM TREASURY DELEGATION
BOX 660
BENJAMIN FRANKLIN STATION
WASHINGTON, D.C.
September 19, 1943
TELEPHONE EXECUTIVE 2020
4
SECRET
Dear Dr. White:
The gold and dollar figures for August 1943 are as follows:
Aug.6
Aug.13
Aug.20
Aug.27
Total Gold
977
982
968
972
Official Dollar Balance
444
449
479
505
Total Gold and Dollars
1421
1431
1447
1477
Scattered Gold
232
237
235
234
Gold Reserve against
1: ediate liabilities
10
10
10
10
AVAILABLE GOLD AND DOLLARS
1179
1184
1202
1233
Yours sincerely,
A.T.K.
A.T.K.R.V.
A.T.K. Grant.
Dr
White,
int to the Secretary,
ed States Treasury,
shington, D. C.
Regraded Unclassified
130
September 20, 1943
9:40 a.m.
HMJr:
Is -- What's new, Herbert?
Herbert
Gaston:
Well, I haven't heard anything new. The -- the group
is here. It's Dan and Randolph Paul and John Sullivan
and Harry White, Norman Thompson and George Haas and
Ted Gamble.
HMJr:
Well, you might tell Fred Smith that he might get in
touch with Colonel Sexton in General Marshall's
office.
G:
To get in touch with Colonel Sexton in General
Marshall's office?
HMJr:
When he gets in
G:
Yes.
HMJr:
and ask him if there's any new directives other
than the last one that General Marshall gave me in
regard to Colonel -- General Eisenhower's suggestion
as to what we should say in regard to Italy
G:
Uh huh.
HMJr:
and that I'm thinking -- I don't know whether I'll
do it -- of talking to the Italian population in New
York on Thursday
G:
Yeah.
HMJr:
and have they got anything over there other than
what General Marshall gave me.
G:
Uh huh.
HMJr:
They had a directive from Eisenhower what they'd
like us to say.
G:
Uh huh.
HMJr:
It's a week old -- now, they may have something
else.
0:
Uh huh.
Now, what day are you going to talk on
that?
Regraded Unclassified
191
- 2 -
HMJr:
Pardon me?
G:
What?
HMJr:
I may go down on the Lower East Side and talk to
the Italians.
G:
On -- -- tomorrow, Tuesday?
HMJr:
Thursday.
G:
Oh, Thursday.
HMJr:
Thursday.
G:
Yeah.
HMJr:
Yeah.
G:
Uh huh.
HMJr:
And Smith should contact Colonel Sexton.
G:
Yes. Yes.
HMJr:
That's about all I've got. Uh --
G:
Randolph Paul....
HMJr:
Does Paul know anything on taxes?
G:
No. He'd like to ask you about the suggestion of
Lee Pressman thathe attend that meeting of the
Steel Workers' Executive Committee on Tuesday.
HMJr:
I think he should do it.
G:
Yes. Yes. All right.
HMJr:
And I'm anxious that you gentlemen contact --
continue to contact them.
G:
Yes. Yes. We're trying to get hold of some of
the A.F.of L. people this morning.
HMJr:
Good.
G:
And....
HMJr:
What 18 -- is Paul there?
Regraded Unclassified
192
- 3 -
G:
Yes, Paul 18 here.
HMJr:
May I talk to him then?
G:
Yes.
Randolph
Paul:
Hello.
HMJr:
Paul?
P:
Yeah.
HMJr:
Good morning.
P:
Good morning.
HMJr:
What is the temperature of Doughton and Stam?
P:
Well, Doughton -- Doughton is all right. of course,
Stam 1s perennially sore at us, but....
HMJr:
Perennially -- that's an annual isn't it?
P:
Well, I mean continuously and perennially.
HMJr:
Right. (Laughs)
P:
He - - uh - but he's being quiet now and Doughton is
very -- of course, you know I -- We told Doughton
that we would be glad to get the hear -- start the
hearings in the month of September
HMJr:
Yeah.
P:
since he was so pressing about it....
HMJr:
Yeah.
P:
and he seemed to feel very friendly about that.
HMJr:
Very what?
P:
Very pleased that we were.
HMJr:
Oh.
P:
And he's planning on sometime next week
Regraded Unclassified
193
4
HMJr:
Well, listen, fellow, about the only day I'm going
to be in town next week, when I won't be out speaking,
I think, will be Monday.
P:
Well, of course, it has to be fitted in with Stam.
We'd be ready to go Monday, but Stam may get in a --
a postponement, but I don't care if you put it off
on account of Stam.
HMJr:
I haven't seen the columniste and all the other s.c.b.'s.
P:
(Laughs)
HMJr:
But I haven't -- what I saw -- I haven't seen any
unfavorable comment on postponing it.
P:
Well, there was an editorial in the Times that was a
little critical, but
HMJr:
Oh, what the hell!
P:
but they'd be anyway.
HMJr:
On the other hand, I've seen plenty of editorials
about Doughton's crack that he couldn't make out his
income taxes.
P:
Yeah. He's very sore that that got out.
HMJr:
But he doesn't blame us, I hope.
P:
No, not at all. He's feeling very good toward us.
HMJr:
If we'd -- every day that we can gain, we can make
some friends for my plan.
P:
Yeah.
HMJr:
And
P:
But on the other hand, we've got to maneuver so that
Stam asks for the time and not us.
HMJr:
I agree with you. You're good at that.
P:
(Laughs) Well, did you - you want us to go to
Pittsburgh -- you want me to go to Pittsburgh to
see this convention?
Regraded Unclassified
134
- 5 -
HMJr:
Oh, I think it's very important.
P:
All right. Well, we'll -- we couldn't get any of
the labor people except Pressman Saturday. We're
after the A.F.of L. people but they're awful hard
to stir up.
HMJr:
Yeah.
P:
However, they have issued a -- they have issued a
resolution in favor of Social Security.
HMJr:
I think it will be swell for you to go to Pittsburgh.
P:
Well, I'll go tonight then.
HMJr:
All right.
P:
And we're writing your statement now.
HMJr:
Good. Well, uh -- I
P:
I'd like to get ahold of your speaking schedule.
I guess somebody here has that, hasn't he?
HMJr:
Well, the only set speech that I have 1s for
Thursday, all day, in New York.
P:
This coming Thursday?
HMJr:
This week. And I'm supposed to be somewhere on the
27th, either in New Orleans or Houston or someplace.
Gamble would know.
P:
Well, the 27th is Monday.
HMJr:
Is Gamble there?
P:
Yeah. Just a minute. He says that you are tentatively
set for New Orleans on the 27th.
HMJr:
Well.
P:
So, that would mean that you'd rather have it the
28th or 29th.
HMJr:
I didn't know the 27th was on Monday. I'll be down
this afternoon and Gamble and Smith and Gaston and I
will set our speaking date, you see?
Regraded Unclassified
195
- 6 -
P:
Yeah, well we have to fit this other thing into that,
you know.
HMJr:
Well, I think I'm pretty well committed for the 27th.
P:
Well, that will be all right. We can get it to a
day -- some other day right near there, but Doughton
is very anxious to get it -- to start them in the
month of September. It's like a Macy bargain -- a
$1.99.
HMJr:
Yeah. At least it isn't one of those Ruml bargains
P:
(Laughs) Yeah, that was an unfortunate reference
I'm afraid. It always stirs you up. (Laughs)
HMJr:
in the basement.
P:
Or anything will get you fighting mad....
HMJr:
You can't get me fighting mad. I'm too low this
morning.
P:
(Laughs) Any -- do you want to speak to anybody
else here?
HMJr:
I'd like to talk to Gamble a minute.
P:
Gaston wants to speak to you again, too.
HMJr:
All right.
P:
Here's Gaston. (Aside: Gamble, he wants to talk to
you.)
Herbert
Gaston:
We might do something on the newspaper front. I
noticed that Kiplinger's tax letter this morning
says that there is discussion in some quarters
of trying to combine increased Social Security
taxes with the income tax schedules
HMJr:
Yeah.
G:
So it's out in that way.
HMJr:
Yeah.
Regraded Unclassified
196
- 7 -
G:
And maybe we could feed it a little bit.
HMJr:
Well, I'll leave that to you and Smith.
G:
All right, I'll talk it over with Smith.
HMJr:
I'll leave it to the two of you.
G:
Okay, here's Ted.
HMJr:
All right.
Ted
Gamble:
Good morning.
HMJr:
Hello, Ted.
G:
How are you, sir.
HMJr:
Pretty good. Three speeches in a week has kind of
got me.
G:
Well, it's all the preparation and all the moving
around more than the speeches, I think.
HMJr:
Well, what -- my pilot says I have to leave here
at two.
G:
Yes.
HMJr:
So I thought when I got down there, you and Fred
and I could settle that New York schedule.
G:
Fine. Well, we sent those people up this morning.
HMJr:
Yes.
G:
We have three of them up there
HMJr:
Good.
G:
getting all that information.
HMJr:
Good.
G:
So we'll be available when you get in.
HMJr:
If they say anything to you, "When is Morgenthau ?"
:
you can tell them by five o clock tonight you'll know.
Regraded Unclassified
197
- 8 -
G:
Fine. Fine. Well, that's time enough.
HMJr:
And I think that that will be good.
G:
Fine. Well, I'll give you a report on New Orleans
then, too, and you can settle the whole thing.
HMJr:
Right.
G:
All right, sir.
HMJr:
And that's about all I've got.
G:
Fine.
HMJr:
Except that I think that if the gang hasn't seen it --
that's Burgess' statement in this morning's paper on
com -- against compulsory savings is a very powerful
statement.
G:
Yes. Well, I'll see that they -- that it's circulated.
HMJr:
Yeah.
G:
All right, sir.
HMJr:
Okay.
G:
Fine. Bye.
Regraded Unclassified
198
9/19/43
Statement by W. Randolph Burgess
In 8. recent report, Mr. Burgess stated he was
insuvertently quoted as saying that the average New Yorker
was falling down on buying bonds, and that unless individual
purchases increased, the alternative might be a change from
voluntary to involuntary methods of reaching war swollen
incomes. I should like to clarify these two points.
In the first place, individual buyers are not falling
down on the job. The figures for individual purchases
are naturally smaller at this stage in the campaign then
the figures for life insurance companies, savings banks,
and corporations, which have large sums available to invest
immediately. On the other hand, the campaign of individual
buying has only just well started. There is always 8. lag
in putting through and recording the huge volume of small
bona purchases; so that the reported figures are several
days behind the actual buying. Individuals are now making
pledges both through payroll savings and house-to-house
canvasses which will appear in the figures later. The
campaign to reach individuals is getting 8. magnificent start.
Regraded Unclassified
199
- 2 -
It will need all the energy and vigor that we have; but
the results so far are encouraging.
The argumentation about compulsory savings is the
old fallacy that there is some substitute in this country
for voluntary effort and initiative. Compulsory savings
in England and Canada and elsewhere has never produced
substantial amounts of money, and it can not. Such a
program, like any tax program, applies inflexibly to every-
body, and there are a large group of citizens who are
doing everything they can. The great virtue of voluntary
subscriptions is our flexibility. Each subscribes accord-
ing to his ability. We are raising virtually larger sums
than any program of compulsory savings would bring in,
anddoing it in the democratic way. Now it is up to all of
us to prove this American method by reaching every possible
individual buyer of bonds.
Regraded Unclassified
200
September 20, 1943
4:35 p.m.
THIRD WAR LOAN DRIVE
Present: Mr. Bell
Mr. Gaston
Mr. Smith
Mr. Gamble
Mrs. Klotz
H.M.JR: This is what I would like to talk with
you people about: I don't know which States, and so
forth, but you have it in mind, I am sure. You fellows
know. I really had a wonderful time in St. Louis.
I thought of the farmers. I listened this morning
to the WOR six to seven program, and they were very good.
They announced that the Farm Credit Bank at Springfield
had some kind of a competition for farmers which they
would announce in more detail tomorrow. But I got to
thinking about the farmer; we haven't talked of the
farmer. That is what I thought about.
On the other hand, I don't know how many gripes
the farmers have and how bitter they feel. That will
he maybe all the more reason to do something. I don't
agree with Fred. I think I have got to go to New York.
I will tell you why: After all, in the first place,
New York represents forty percent of our money, doesn't it?
MR. GAMBLE: About thirty-three and 8 third.
H.M.JR: Burgess stood by me when no other finance
man would.
MR. SMITH: I didn't say you shouldn't go to New
York. I said you could go as well to New York next week
BE you could this week, that you weren't going to achieve
Regraded Unclassified
201
- 2 -
anything by the week's advance in time, particularly, and
you can't - if you are going to do anything for farmers,
you have to do it for farmers this week in order to get
any good out of it. If you wait until next week, the drive
will be over by the time the farmers are contacted, by
the time they know anything has happened. That is all.
H.M.JR: What do you think?
MR. GAMBLE: I think that the best fellow to answer
that is Burgess, if he is not too far along in his plans.
I wouldn't want to disappoint him. I agree with you. If
it is going to be embarrassing to them, of course, to
postpone it a week, I wouldn't postpone it. Otherwise, I
agree with Fred.
H.M.JR: I can go on the noon hour on the radio here
from Washington.
MR. SMITH: Yes, you can, you can do that. You could
do it from New York or any place else.
MR. GAMBLE: On Saturday we had the Farm and Home
Hour.
H.M.JR: How are the farmers doing?
MR. GAMBLE: The farmers seem to be doing very well.
The State leading the E bond sales is Iowa. They are
shead of any other State in E bonds. We contacted every
program director of the United States, and they are making
special appeals.
H.M.JR: What do you mean?
MR. GAMBLE: Farm program directors. They have these
early morning hours on the radio.
H.M.JR: I heard WOR, which is Mutual; then the end
of WEAF, and they both did the farm stuff. They both have
agricultural hours.
Regraded Unclassified
202
- 3 -
MR. GAMBLE: All we heard from agreed to ao it.
They are making special appeals.
H.M.JR: Let me ask Burgess.
Admiral King is coming here at eight-thirty tomorrow
morning - I am switching, but it is all on the same thing.
I asked to go to him, and he very kindly offered to come
here. I want to say to him, "Admiral, what is it that I
can do through the bond drive on the home front which
would help you?" and get him to think. I don't know
what he is going to say, but I am going to listen.
I certainly got good ideas from Marshall. I am human
enough, but I can't help but be pleased that through that,
the way the boys helped me write it--
MR. GAMBLE: It made an impression.
H.M.JR: The President followed right along. There
is no question about it. I think this thing about the
Navy being 80 big and all that - it is just braggadocio.
It is stupid to say how big we are.
He might say, "I would like you to go - we are falling
behind on destroyers, and I would like you to go to a
destroyer yard,' or, "We are falling behind on battleships.
I would like you to go to 8 battleship yard. That is why
I want to hold up on the thing with Maritime.
MR. GAMBLE: That is tentatively scheduled for Delta
Shipyards at New Orleans.
to do something on it, see, I want to do that which would
H.M.JR: That is why I want to hold up. If I am going
be most pleasing to Admiral King.
MR. GAMBLE: He has 8 lot more information like
General Marshall that hasn't been given out.
morning. Nobody but Eleanor Roosevelt could do what
H.M.JR: I just don't know. He will be here tomorrow
Regraded Unclassified
203
- 4 -
Burgess plans for me that day and live the next day.
(Laughter) I mean, nobody but 8. Roosevelt could do
that.
MR. GAMBLE: Of course you really do those things.
You always say you aren't going to do them. Then you get
in & town and you go through that same schedule. You
went to Cedar Rapids, and you made more calls than that.
You went to Portland - I told you you didn't have to do
any of those things, and you do them all. (Laughter)
MR. BELL: He doesn't want to be scheduled. (Laughter)
MR. GAMBLE: You end up doing them all. (Laughter)
(The Secretary held a telephone conversation with Mr.
Burgess, as follows:)
Regraded Unclassified
204
September 20, 1943
4:45 p.m.
Randolph
Burgess:
Hello, Henry.
HMJr:
How are you?
B:
I'm pretty well. How are you?
HMJr:
Well, I'm fine. You fellows are going great guns
up there.
B:
Well, we're trying hard.
HMJr:
Well
B:
I think it's going pretty well.
HMJr:
Looks good to me -- a man in the street.
B:
Well, the -- the problem is the individual sales.
Of course, that's still the problem and.
HMJr:
Yeah.
B:
the danger 18 that when we get over our quota
which we're going to do in a few days -- 18 that
there should be a let down and we're doing everything
We can to have a program which will keep it going.
HMJr:
Right.
B:
And I thought your being here Thursday, if you will,
would be an enormous help on just that.
HMJr:
Well, what I'm calling up on, before I get on that,
I also loved your talk on "compulsory savings".
B:
Good. I thought you might like that.
HMJr:
Yeah.
B:
Well, the boys -- the boys misquoted me on Saturday
and had me arguing that if this didn't succeed, we'd
have to go to compulsory savings.
HMJr:
Oh. I didn' t
B:
I couldn't let that stand on the record.
Regraded Unclassified
205
- 2 -
HMJr:
I didn't see that. Well, hit it again.
B:
All right. We will.
HMJr:
What I'm talking about 10-- -- how important would --
18 it to you -- I'm coming but I want to know whether
it's this week or next week.
B:
Oh, well, I think this is the week to do it, Henry
HMJr:
You do?
B:
if you possibly can.
HMJr:
I see.
B:
We're getting pretty well all set for it.
HMJr:
Uh huh.
B:
And this is about the right time to give it a kick.
HMJr:
Uh huh.
B:
Next week would be a little late.
HMJr:
It would be.
B:
We've got a parade on next Tuesday
HMJr:
Yeah.
B:
which I think will give us our next week's kick.
HMJr:
Yeah. I see.
B:
So, if you could do it this week, it would be a great
help.
HMJr:
Well, we're just sitting here now -- there's Bell and
Gamble and Fred Smith and Gaston and myself and we'll
settle it in the next fifteen minutes.
B:
That's fine. I hope you're feeling good and strong
because we want you to see the works.
HMJr:
Nobody but a Roosevelt -- Mr. or Mrs. Roosevelt could
do what you plan for me Thursday and live.
Regraded Unclassified
206
- 3 -
B:
No, it will be very nice and easy. We'll just put
you in a comfortable car and whisk you around.
HMJr:
Yeah.
B:
I did it the other night. I went around and saw
all of our
HMJr:
Well, you're a young fellow.
B:
zone outfit.
HMJr:
You're young
B:
The younger boys started this.
HMJr:
You're just a young fellow.
B:
(Laughs)
HMJr:
Well, when we get through, Ted will give you a call.
B:
Very good.
HMJr:
It will be within the next half hour.
B:
Thank you very much, Henry.
HMJr:
Well, thanks for wanting me.
B:
All right. Well, we're delighted that you can come.
HMJr:
All right.
B:
All right.
Regraded Unclassified
207
- 5 -
H.M. JR: Now, I owe that fellow - it is the first
thing he has asked me, Fred; I mean, I owe that man a lot.
MR. SMITH: That is true. I grant you that. Of course
you could. - it would be pushing your schedule up a little
bit, but you could go on the Farm and Home Hour from your
farm on Saturday.
H.M.JR: Well, let's settle Thursday now - what I
am going to do - shall we? Then we will do the other.
MR. GAMBLE: Fine. Here is what they would like
you to do. They would like you in the morning to visit
three offices, Queens, Brooklyn and the Bronx. That is
cutting it down. Then they would like to add to that,
either in the morning or afternoon, a visit - preferably
in the morning so you would have your afternoon free - to
the Italian settlement - some Italian community where
they have a War Bond office and are working - not one
of Generalissimo Pope's. (Laughter)
Then they would like you to have lunch at the Federal
Reserve Bank, not a formal or publicized affair, but 8.
small luncheon including Allan Sproul and his Board of
Directors, W.C. Potter, and two or three of the leading
bankers that have helped Burgess. They would like the
Stock Exchange - I think we can waive that so that you
have the whole afternoon free.
Then you can meet with the War Finance Committee of
New York at five or six, before your broadcast, and go on
at six-thirty on the CBS network, and do this show with
this group of people.
H.M.JR: Just 8. minute - I am personally not crazy
to do the New York Stock Exchange.
MR. GAMBLE: Of all the things that they had planned -
I talked to Burgess this morning about the possibility of
scratching that off. I don't think he would be too much
disappointed if we didn't.
Regraded Unclassified
208
- 6 -
MR. BELL: What does that mean?
MR. GAMBLE: They want to have a bond rally at the
Stock Exchange - shut down the Exchange and have this
rally coincidental with the Secretary's visit there.
Emil Schram is going to have all the Stock Exchange mem-
bers and have a bond sale - close the Exchange.
MR. BELL: Take very long? He has been very
cooperative.
MR. GAMBLE: I should say half an hour.
H.M.JR: Some of them did a whale of a job. It
has to be at three, that is the only trouble.
MR. GAMBLE: Yes.
H.M.JR: They won't shut it down--
MR. GAMBLE: Just ahead of the closing.
MR. BELL: That would be right after your luncheon
at the Federal.
H.M.JR: Yes, but I have got to get a little rest.
Well, the only thing - if I am to do the New York Stock
Exchange - I would want lunch at twelve o'clock and I
know that they have rooms there where I could go and rest
afterwards.
MR. BELL: That is right, they have good beds. They
have beds in the Federal Reserve Bank.
H.M.JR: Right in Sproul's room, too.
You fellows are invited here not for your decorative
qualities-- (Laughter)
MR. GASTON: I think there is no objection to the
Stock Exchange. I think it has some advantages, but it
is a question of your endurance - whether you can fit it
in or not.
Regraded Unclassified
209
- 7 -
(Mrs. Klotz entered the conference.)
H.M.JR: I don't mind going to the New York Stock
Exchange. I think it would be rather amusing.
MR. GAMBLE: I think, as a matter of fact, .Secretary,
it is & tribute to you and to the manner in which this
whole program has been smoothed out, for these people to
enthusiastically want you to come. They have had great
interest.
H.M.JR: Sproul has got to send me an invitation if
I am going to go. I can't do it through Burgess.
MR. GAMBLE: He will invite you.
H.M.JR: I was saying, if I could go to the Federal
Reserve at twelve for lunch - they have regular rooms
there - I can have about an hour's rest.
Are you opposed to the Stock Exchange?
MR. SMITH: I am not opposed to it. I think that
you got a good chance - you have got to recognize the
possibility that this whole business of Morgenthau versus
the bankers may crop out again, If you go to New York
and wind up going both to the Federal Reserve luncheon -
which they say is not 8. publicized event, but I don't
believe it - I think that the columnists, Leslie Goulds,
aregoing to know about it - and the Stock Exchange--
H.M.JR: If they invite me, why isn't it on the plus
side?
MR. SMITH: The only thing is that you have said
it is going to be very difficult to raise the last five
billion dollars and you are giving the columnists an
opportunity to point out that the bankers raised at least
thirty percent of all your money - the bankers in New
York. And if they do do that - if the columnists do
break that all up again and have you tipping your hat to
the Federal Reserve Bank and the bankers, you are going
Regraded Unclassified
210
- 8 -
to have D'Olier and all the outlying bankers in the
country who don't like Wall Street getting the impression
you are paying tribute to Wall Street bankers for what
they have done, aren't you?
H.M.JR: That is one way to look at it.
MR. SMITH: The wrong way, I grant you. I say that
is the liability.
H.M.JR: I tell you how we could offset that. What-
ever the radio program is, let's make it a strictly
people's program. I don't know what the program is.
I tell you how I feel - very human. I never go to these
financial writers' dinners. The only dinner I have gone
to in ten years - one was 8. farewell dinner to George
Harrison and I once had lunch at the Federal Reserve. That
is twice in ten years that I have been there.
Now, these fellows have gone to town and I think it
is the generous thing to do.
MR. GAMBLE: I think you can afford to be magnanimous
about it.
H.M. JR: I think it is the generous thing for me to
say thank you. Sproul certainly knows I am coming and I
can say, "As far as I am concerned, look, I don't care
who I eat with."
MR. GASTON: The point of view of the whole thing is
that bankers and stockbrokers, they, too, are citizens.
H.M.JR: You know, that was what Sproul wrote me
after this meeting. He said, "Bankers, and so forth, also
send their sons to war." That is in his letter to me.
That was the thing he wrote to me. "We also send our
sons to war" - that is exactly what he wrote to me -
"We also send our sons to war."
Now, I tell you, Fred, you see, you are a cynical
Regraded Unclassified
211
- 9 -
fellow that has been burnt up in New York - and so have
I. But I rather kind of like to go in the lion's den.
I like to be David.
MR. SMITH: I won't oppose it.
H.M.JR: You cancarry on the - what do you call it -
the comparison of David - the analogy of David. As far
as I am concerned, I would rather like to be David up
there.
MR. BELL: I think you will get good treatment and
be glad you went.
MR. GAMBLE: I certainly have seen no evidence but
that these people have done 8. good job.
H.M.JR: Do you suppose they are going to say, "Why
tweive o'clock?"
MR. GAMBLE: No. As a matter of fact, I suspect
that is their lunch hour.
MR. BELL: One o'clock is the lunch hour for the Fed.
H.M.JR: Let's say twelve o'clock.
MRS. KLOTZ: Why do you want to eat at twelve o'clock?
H.M.JR: So I can be at the Stock Exchange at three.
MR. GAMBLE: This way you will know you can leave
your luncheon and have your rest.
MR. GASTON: Being one of the Quiz Kids, I want to
call your attention to the fact that it was Daniel and not
David that went into the lion's den. (Laughter)
H.M.JR: Again I felt on shaky ground, but I knew
in front of these people, somebody would correct me.
(Laughter) It was Daniel. It was David who threw the
sling shot.
Regraded Unclassified
212
- 10 -
We will do that, then at three o'clock the Stock
Exchange. Then when is my next appearance?
Mr. GAMBLE: At five o'clock.
H.M.JR: Where?
MR. GAMBLE: At five o'clock with the New York War
Finance Committee, in their office.
H.M.JR: Just "Hello"?
MR. GAMBLE: That is right.
H.M.JR: And then what?
MR. GAMBLE: Then Burgess has invited you to have a
quiet dinner with him at his apartment. This is not an
arranged thing, Mr. Secretary. He said he would like to
have you do it so you could be away from the crowd.
H.M.JR: I think, as far as I know, Mrs. Morgenthau
is going to be up there and if she is, then I will have a
quiet dinner with her. I have asked her to go on this
thing. She will if she is well. We are terribly worried
about her legs. She doesn't know whether she will or
won't be--
MR. GAMBLE: That can be left open. I want you to
know we discussed what you were going to do about dinner.
At six-thirty, before dinner, you will be on the CBS net-
work - six-thirty to six-forty-five.
H.M.JR: What do I do at six-forty-five?
Mit. GAMBLE: Six-thirty, that is your radio program.
MR. GASTON: A fourteen-minute speech?
MR. GAMBLE: Following the original suggestion that
was made, we have discussed only the possibility of the
Secretary visiting with these people on the air - a round-
or four minutes to make & statement about what he saw in
table affair, with the Secretary taking the last three
New York.
MR. GASTON: That is better than an actual town meeting.
Regraded Unclassified
213
- 11 -
MR. GAMBLE: I think, Fred, you will want to go up
to New York and sit down with the CBS people.
H.M.JR: No, these fellows have got to stay here
with me tomorrow. We have to write a speech tomorrow.
When I leave here Wednesday afternoon to go up to
New York, I am going to the theater, taking Mrs. Morgenthau
and my father to the theater. We are going to see
"Oklahoma." Incidentally, if we go to lunch with the
Fed, I would like my father invited.
I leave here Wednesday, and that speech has got to
be finished, and none of this nonsense business. (Laughter)
MRS. KLOTZ: Mr. Morgenthau, I don't see how you can
have the luncheon at twelve.
H.M.JR: I think Mrs. Klotz is right. Let's tell
them to get me - I want to be at the Fed one hour before
lunch. She is right. I can get there one hour before-
hand and rest an hour before lunch.
Now, I an on the air from when?
MR. GAMBLE: Six-thirty to six-forty-five, CBS.
H.M.JR: Doing what?
MR. GAMBLE: The only suggestion that has ever been
made, which is the one we have worked on, is the idea of
you doing the round-table with these New York War Finance
leaders, Burgess and four or five of his people, & discussion
of what you have seen in New York that day, the progress
of the campaign, and the program will end up by you making
a six or seven minute statement to the nation about your
impressions. You could bring in this Italian visit to
tie in with your talk.
H.M.JR: I suggested this: We sent three reporters
up to New York today to get local material. They will be
back tomorrow. Right after Admiral King at nine o'clock,
we go into a huddle - play conference.
Regraded Unclassified
214
- 12 -
MR. GAMBLE: That winds that up in nice shape.
H.M.JR: Then that is all. I don't have to go to
the tent?
MR. GAMBLE: No, you do not. If you decide that day
that you want to do something like that, that should be
left completely open.
H.M.JR: He is one of the smartest fellows. (Laughter)
MRS. KLOTZ: I agree with you.
H.M.JR: I think it would be nice if you accompany
me that day. It is & big thing up there. I would like
you to share the kudos with me.
MR. GAMBLE: I really am needed here. I can go, but
I really am needed here.
H.M.JR: Let's think about it. I have 8 tight
schedule. I am going out to the Navy Hospital. Let's
stop now; you can work on this.
All right, Herbert?
MR. GASTON: Yes.
MR. BELL: Yes.
H.M.JR: I am not at all certain I want to do the
thing that way - for local color this is just to throw
out - I would love to do the thing with a lot of refugees.
That is what I would like to do - the people who have come
out of Germany recently - I would like to have them sit
around the table. If we are going to do it, I would want
Dave Levy to run it.
MR. GAMBLE: If you decide you don't want to do the
shipyard thing, you could do that the following week.
H.M.JR: Let me throw that out. If Dave Levy and
his gang would help us on that--
Regraded Unclassified
215
- 13 -
MR. SMITH: Ted wants this as a strictly war bond
thing. I think he is right. Why not leave this just as--
H.M.JR: I don't know if he is right or not.
MR. GAMBLE: From our organization point of view we
are right. Public-relations-wise we may not be.
H.M.JR: Anyway, get the thing set. What we will do
is, we will have 8. play conference tomorrow morning -
you, George, and I, and I would like Herbert to sit in on
it, and get a report from these men.
MR. GAMBLE: Ten o'clock would be better for that.
Fred won't have his material until ten.
H.M.JR: All right, ten o'clock - a radio conference
at ten o'clock. All right?
MR. GAMBLE: Yes, sir.
MR. BELL: A financing conference tomorrow morning?
H.M.JR: All right, eleven o'clock, Mr. Bell.
MR. GAMBLE: Ten billion two thirty-nine breaks down
to thirty-three and a third of the individual quota.
H.M.JR: You mean we have over three billion?
MR. GAMBLE: No, individual quota is five, and we
have over thirty-three and a third percent in that ten,
two thirty-nine.
MR. BELL: That means some place between 8. billion
six and a billion seven.
H.M.JR: That isn't very good.
MR. GAMBLE: It is pretty good for this stage.
MR. BELL: Better than two hundred million above the
Friday night figure.
Regraded Unclassified
216
- 14 -
H.M.JR: You haven't the five o'clock figures?
MR. BELL: No, they are late coming in.
H.M.JR: Can you get them to me at the house tonight?
I would like to have them.
Let's stop now.
MR. GAMBLE: Maryland went over today, 8. hundred and
three percent of the quota.
MR. BELL: We have had pretty good reports from
these Federals.
H.M.JR: I would like to - could you be in the office
tomorrow morning from nine o'clock on, this office? I
would like to go over the situation with you and Bell, and
either Tickton or Lindow. Let's put Tickton down for nine
o'clock. King won't be here more than a half an hour -
Gamble and Bell and Tickton and Lindow. I would like to
go in the Chart Room with you.
MR. BELL: Tickton is in Chicago.
Regraded Unclassified
385
217
COPY
NA831 43 GOVT COLLECT NL
TOWO BEACON NY 19
1943 SEP 20 - 8 46
TED GAMBLE
OFFICE OF SECRETARY OF THE TREASURY WASHDC
PLEASE GIVE TO MRS KLOTZ ANY IMPORTANT TELEGRAMS WITH MY
SIGNATURE THAT WENT OUT LAST WEEK WITHOUT MY APPROVAL. REASON
FOR THIS TELEGRAM IS THAT I SAW A MESSAGE IN LOCAL PAPER SUPPOSEDLY
COMING FROM ME THAT I HAVE NO KNOWLEDGE OF
HENRY MORGENTHAU JR
SEP 20
Regraded Unclassified
218
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE September 20, 1943
TO: Mrs. Klotz
FROM: Mr. Gamble
At the request of the Secretary I am enclosing for you
copies of the messages sent out for his signature in the past week.
TRG
Regraded Unclassified
WESTERN
219
CLASS OF SERVICE
1201
MBOLS
This is a full-rate
Lasse
Telegram or Cable-
grame unless in de-
UNION
NL-Night Laner
ned character is In-
LC=Deferred Cable
and by a suitable
ymbol above or pre-
NLT-Calle Hight Letter
coding the address.
A. N. WILLIAMS
NEWCOMB CARLTON
J. c. WILLEVER
PRESIDENT
CHAIRMAN OF THE BOARD
FIRST E-PRESIDENT
Ship Radingram
the sling time shown in the date line on telegrama and day letters is STANDARD TIME at point of origin. Time of receipt in STANDARD TIME at polat of destination
NA831 43 GOVT COLLECT NL=TDWD BEACON NY 19
TED GAMBLE=
IDEP 10 PM
OFFICE OF SECRETARY OF THE TREASURY WASHDC=
LEASE GIVE TO MRS KLOTZ ANY IMPORTANT TELEGRAMS WITH MY
IGNATURE THAT WENT OUT LAST WEEK WITHOUT MY APPROVAL. REASON
FOR THIS TELEGRAM 18 THAT J SAW A MESSAGE IN LOCAL PAPER
SUPPOSEDLY COMING FROM ME THAT I HAVE NO KNOWLEDGE OF=
HENRY MORGE NTHAU JRs
THE COMPANY WILL APPRECIATE SUGGESTIONS FROM rrs PATRONS CONCERNING ITS SERVICE
Regraded Unclassified
220
ANDARD FORM No. 14A
TREASURY DEPARTMENT
APPROVED BY THE PRESIDENT
G)**
MARCH 10. 1926
WASHINGTON
COPY
TELEGRAM
CHARGE TREASURY DEPARTMENT. APPROPRIATION FOR
OFFICIAL BUSINESS-GOVERNMENT RATES
(The appropriation from which payable must be stated on above line)
. a. - numes -
2-14117
SEPT 17 1943
MR JOHNNY THOMPSON
RADIO STATION WTTM
35 WEST STATE ST
TRENTON NJ
ON BEHALF OF THE TREASURY DEPARTMENT I WANT TO CONGRATULATE THE
B'NAI BRITH ORGANIZATION AND SPECIFICALLY THE B'NAI BRITH BODGE
IN TRENTON FOR ITS SPLENDID COOPERATION WITH THE THIRD WAR LOAN
DRIVE. I KNOW THAT THIS SPECIAL RADIO PROGRAM WILL HELP TO SELL
MANY EXTRA WAR BONDS TO BACK THE ATTACK OF OUR FIGHTING MEN OVER
THERE
HENRY MORGENTHAU JR
SECRETARY OF THE TREASURY
11
Regraded Unclassified
221
ANDARD FORM No. 14A
TREASURY DEPARTMENT
PROVED BY THE PRESIDENT
COPY
WASHINGTON
MARCH 10. 1925
TELEGRAM
CHARGE TREASURY DEPARTMENT, APPROPRIATION FOR
OFFICIAL BUSINESS-GOVERNMENT RATES
(The appropriation from which payable must be stated on above line)
. & - - -
3-14117
EUGENE G GRACE
PRESIDENT
SEPT 17 1943
BETHLEHEM STEEL CORP
25 BROADWAY
NEWYORK NY
THE TREASURY DEPARTMENT ASKS YOUR FULL COOPERATION AND SUPPORT IN
THE THIRD WAR LOAN DRIVE. WILL YOU IMMEDIATELY INSTRUCT MANAGERS
OF ALL PLANTS OF BETHLEHEM STEEL CORPORATION TO CONTACT LOCAL
COUNTY CHAIRMEN OF WAR FINANCE COMMITTEE AND ARRANGE WAR BOND
RALLIES IN ALL PLANTS AND ON COMPANY TIME TO COVER ALL SHIFTS.
WE NEED THE SUPPORT OF EVERY AMERICAN IN THIS EMERGENCY. RALLIES
AT THE PLACE OF EMPLOYMENT ARE THE MOST EFFECTIVE MEANS OF BRINGING
THE MESSAGE TO THE WORKERS IN WAR INDUSTRIES, PLEASE ADVISE ME
IMMEDIATELY so I CAN ADVISE COUNTY CHAIRMEN
HENRY MORGENTHAU JR
SECRETARY OF THE TREASURY
nAt
Regraded Unclassified
222
AMERICAN BY THE PRESIDENT
ANDARD FORM NO. 14
FROM TED R. GAMBLE
MARCH 10. 1926
BUREAU WAR FINANCE DIVISION
TELEGRAM
CHG. APPROPRIATION EXPENSES OF LOANS
OFFICIAL BUSINESS-GOVERNMENT RATES
TRG:ecb SEPTEMBER 17, 1943.
ALLEN T. ARCHER
a. . - - -
10-1783
PRESIDENT, TOWN HALL
1321 BILTMORE HOTEL
LOS ANGELES, CALIFORNIA
I APPRECIATE YOUR THOUGHTFUL INVITATION TO APPEAR AT A LUNCHEON MEETING AT
TOWN HALL. HOWEVER, I REGIST THAT I CANNOT AVAIL MYSELF OF IT, AS I NOW
FIND THAT I WILL BE UNABLE TO COME TO LOS ANGELES DURING THE DRIVE.
HENRY MORGENTHAU, JR.
SECRETARY OF THE TREASURY
MA
Regraded Unclassified
223
EXPENSES OF LOANS
WAR FINANCE DIVISION
PLEASE SEND AS STRAIGHT WIRE TO
NAMES ON ATTACHED LIST:
SEPTEMBER 15, 1943
I HEREBY OFFER YOU APPOINTMENT AS A MEMBER OF THE STATE ADVISORY
COMMITTEE FOR THE WASHINGTON WAR FINANCE COMMITTEE. I BELIEVE
YOUR ASSISTANCE WILL BE MOST HELPFUL IN MAKING OUR WAR FINANCING
IN YOUR AREA EFFECTIVE. WILL YOU PLEASE SIGNIFY YOUR ACCEPTANCE
TO ME. JOEL E. FERRIS, 901 FEDERAL OFFICE BUILDING, SEATTLE.
HENRY MORTENTHAU, JR.
SECRETARY OF THE TREAURY
Regraded Unclassified
224
TREASURY DEPARTMENT
WAR FINANCE DIVISION
EXPENSES OF LOANS
SEPTEMBER 14, 1943.
JOHN A LOGAN
NATIONAL ASSOCIATION OF FOOD CHAINS
DRAKE HOTKL
CHICAGO, ILLINOIS
ON THE OCCASION OF THE TENTH ANNUAL MEETING OF NATIONAL
ASSOCIATION OF FOOD CHAINS I WISH TO CONGRATULATE THESE
CHAIN FOOD STORE COMPANIES UPON THEIR RECORD OF COOPERATION
AND ACHIEVEMENT IN THE SALE OF WAR BONDS AND STAMPS. I AM
FAMILIAR WITH THE PLANS WHICH THE FOOD CHAIN COMPANIES HAVE
MADE TO PARTICIPATE IN THE THIRD WAR LOAN DRIVE AND I KNOW
THAT THESE EFFORTS CAN BE PRODUCTIVE OF MILLIONS OF DOLLARS
OF EXTRA SALES OF WAR BONDS AND STAMPS TO THE TWENTY MILLION
CUSTOMERS OF CHAIN FOOD STORES. I ALSO WANT TO THANK YOU
AND THE MEMBERS OF YOUR STAFF FOR EXCELLENT COOPERATION
AND EFFECTIVE COORDINATION IN PROVIDING YOUR ASSOCIATION
MEMBERS WITH INFORMATION AND ASSISTANCE REGARDING WAR BOND
PHOGRAMS. SUCH INTELLIGENT AND UNSKLFISH COOPERATION BY
PATRIOTIC CITIZENS AND THEIR ORGANIZATIONS IS NEEDED TO
INSURE THE SUCCESS OF OUR WAR FINANCING EFFORTS.
HENRY MORGENTHAU, JR.
SECRETARY OF THE TREASURY
"INITIALED - 'T.R.G.' and "HMJR"
Regraded Unclassified
225
TREASURY DEPARTMENT
WAR FINANCE DIVISION
EXPENSES OF LOANS
DAY LETTER
SEPTEMBER 13, 1943.
JULIUS EMSPAK
GENERAL SECRETARY
UNITED ELECTRICAL, RADIO AND MACHINE WORKERS UNION
HOTEL NE. YORKER
NEW YORK, NEW YORK.
PLEASE ACCEPT AND EXTEND TO YOUR MEMBERS IN CONVENTION ASSEMBLED THE SINCERE THANKS OF
THE TREASURY DEPARTMENT FOR YOUR AID IN THE WAR FINANCE PROGRAM. OUR PAY ROLL SAVINGS
RECORDS IN THE ELECTRICAL AND RADIO INDUSTRY ARE CONVINCING EVIDENCE OF THE PATRIOTIC
WAY IN WHICH YOUR MEMBERS ARE BUYING WAR BONDS UNDER THE SPONSORSHIP OF YOUR UNION AND
INS LEADERS. WE ASK YOUR INTENSIFIED SUPPORT FOR THE CRUCIALLY IMPORTANT THIRD WAR
LOAN DRIVE NOW UNDER WAY. WE MUST BACK THE ATTACK WITH WAR BONDS IF OUR HOME FRONT IS-
TO HELP OUR FIGHTING MEN DO THE BEST POSSIBLE JOB IN THE INVASION OF EUROPE AND JAPAN
PLEASE ASK ALL YOUR MEMBERS TO BUY AT LEAST ONE EXTRA WAR BOND DURING SEPTEMBER.
HENRY MORGENTHAU JR.
SECRETARY OF THE TREASURY.
Regraded Unclassified
226
TREASURY DEPARTMENT
WAR FINANCE DIVISION
EXPENSES OF LOANS
DAY LETTER
SEPTEMBER 13, 1943.
RETD ROBINSON, ESQ.,
INT'L. PRESIDENT, UNION OF MINE, MILL & SHELTER WORKERS, C.I.O.,
BUTTE, MONTANA.
PLEASE ACCEPT AND EXTEND TO YOUR MEMBERS THE SINCERE THANKS OF THE
TREASURY DEPARTMENT FOR YOUR AID IN THE WAR FINANCE PROGRAM. WE NEED
YOUR CONTINUED HELP BOTH BY ADDED AND INCREASED ALLOTMENTS FOR WAR BOND
PURCHASE THROUGH THE PAYROLL SAVINGS PLAN AND ALSO BY THE PURCHASE OF
ADDITIONAL BONDS DURING THE THIRD WAR LOAN DRIVE IN SEPTEMBER. IT IS
CRUCIALLY IMPORTANT FOR THE FUTURE OF A FREE LABOR MOVEMENT THAT WE
SHOULD WIN THIS WAR. THE HOME FRONT MUST SUPPORT OUR FIGHTING MEN BY
GIVING THEM THE BEST POSSIBLE WEAPONS AND EQUIPMENT. THE MOST EFFECTIVE
WAY IN WHICH MOST OF US CAN DO THAT IS BY BACKING THE ATTACK WITH WAR
BONDS. PLEASE URGE EACH OF YOUR MEMBERS TO BUY AT LEAST ONE EXTRA BOND
DURING SEPTEMBER,
HENRY MORGENTHAU, JR.
SECRETARY OF THE TREASURY.
Regraded Unclassified
U.S. COAST GUARD
227
BOAN MIP A
TREASURY DEPT.
9/202
G16 P T A QUAT 201855 Q2U GR 223 BT
HEADING
SECYTREAS OFFICE
SECUTREAS
TEXT
KNOWING HOW BORED YOU GET ON AIRPLANES ESPECIALLY WHEN I
AM NOT THERE WOULD LIKE TO MAKE A SUGGESTION WHICH
WILL THROW EVERYTHING INTO A TAILSPIN X QUERY COLON WOULD
IT BE WISER THIS WEEK TO GO TO A STRICTLY
FARM COMMUNITY IN A FARM STATE AND APPEAL TO FARMERS (50)
RATHER THAN GO TO NEWYORK WHICH CAN BE DONE AS
WELL NEXT WEEK QUESTION UNDERSTAND WHEAT SEASON JUST FINISHED
COTTON 1555 SEASON JUST BEGINNING so THERE MUST BE MONEY X IF
YOU WAIT UNTIL NEXT WEEK IT WILL BE PHYSICALLY IMPOSSIBLE
TO CARRY THE WORD TO FARMERS EVERYWHERE BEFORE THE END (100)
2
PERATOR'S RECORD AND DATE
OFFICIAL INITIALS
$
Regraded Unclassified
U.S. COAST GUARD
228
REASURY DEPT.
HEADING
CG16 PAGE TWO
TEXT
OF THE DRIVE X FARMERS ARE LAGGING BEHIND IN BOND
SALES AND YOU HAVE NOT MADE DIRECT APPEAL TO THEM
X LICKERT TELLS ME THEIR INCOMES ARE WAY UP X
YOU COULD PROBABLY TAKE OVER NBCS FARMA AND HOME HOUR
SATURDAY NOON AS WELL AS A RADIO NETWORK SATURDAY EVENING (150)
IF TIME IS AVAILABLE X SCENE OF OPERATION COULD BE
EITHER SOUTH OR WEST OF MISSISSIPPI OKLAHOMA CITY BEING HIGHLY
RECOMMENDED BY SECRETARY WHO USED TO WORK FOR CHAMBER
OF COMMERCE X LICKERT SUGGESTS WESTERN END OF CORNBELT WHERE
CROPS WILL BE BEST IN YEARS X I CAN GET (200)
EXCITED ABOUT THIS BECAUSE IT GIVES US A WHOLE NEW
APPROACH X BESIDES THERE IS PLENTY 2 OF OXYGEN DOWN HERE
X FRED SMITH BT 201855
TOD 1857 SN 20 SEPT 43 END
OFFICIAL INITIALS
PERATOR'S RECORD AND DATE
$
Regraded Unclassified
NV 04/2
U.S. COAST guard
229
REASURY DEPT
RW52/544Y
PT A 02U 201909 QUAT W QUAH GR42
HEADING
SECTREAS
OFFICE SECTREAS
COMDT CG
TEXT
FRED SMITH OFFICED OF SEC X I AM NEVER BORED
WHEN I SLEEP X AS A MATTER OF FACT I
ALSO THOUGHT OF FARMERS APPLES TO YOU HOLD EVERYTHING FOR
AN HOUR AND WHEN OUR TWO GREAT MINDS WILL SPARK
AS ONE BT 20189 201909
3
TOD 1917 20 SEPT 1943 VB
OFFICIAL INITIALS
PERATOR'S RECORD AND DATE
$
Regraded Unclassified
230
September 20, 1943.
Dear Mr. Golden:
I was delighted to learn of the manner in which
Miss Weston and her colleagues of the cast of "Three's
a Family" bettered your request that they help out
in the Third War Loan drive. I wish you would ex-
press my personal appreciation to them and of course
my warmest thanks go to you for asking their help and
approving the turn it took, as well as for passing on
the suggestion to the other producers.
It is a little early for congratulations on the
result of the drive but it is encouraging to receive
them from you. We must make the campaign a success
and we are grateful for all the fine cooperation we
are getting.
Sincerely,
(Signed) H. Mergenthau, Jr.
Secretary of the Treasury.
Mr. John Golden
Saint James Theatre
246 West 44th Street
New York 18, N. Y.
Regraded Unclassified
In the Scretamp Signature 231
date sent 20
Dear Mr. Golden:
the Manner in which miss
I was delighted to learn 7
Wrston and her cilleague 7 the
Cael f "Thre's a Family"
bettered you request that they
help out in The There has Loan
drive. I with you would
exhices my husmal appreciation
to them and of cause my
Wäimert Thanks 80 to you fn
asking Their help and approving
The turn it Took, as well as pin
passing on The suggestion to the
other producers,
It is a little early for confeatulation
in the result of the drive het
it is encouraging to receive The cambaign them hm
you We must make X a Ruccess
and in are scateped m all the five
Correcation we are getting which
Regraded Unclassified
Offices of
212
JOHN GOLDEN, Inc.
SAINT JAMES THEATRE
246 WEST 44TH STREET
BRYANT 9-6994
New York 18, N. Y.
September 13, 1943
Zon. denty orgenthau
secretary of the Treasury
amenington, D. C.
Desr ni, Morgenthau:
First, of course, I'd like to congratulate you on the magnifi-
cent you una the effective results of the bond drive,
Also, I think you will De interested to know of a clever and
sit 14ter-sting stunt that Ruth Weston, one of my actresses, wrote
late 163 anow, "3 Is A Family." I had asked Miss Weston and the other
Dars of the cast to step out between the acts, each on a succeeding
birht. and make an appeal to buy bonds. They got together, however,
and bent that idea by putting some bond drive speeches not between the
asts, out actually into the play.
In other words, during the performance of "3 Is A ramily,"
sure of the cheracters talks about needing money and thinking of selling
$ 500 she hus. To which Miss Weston replies -- "No, this is not the
time to soll, it's the time to Buy Bonde." Then she turns to the audienc
and 40,0018 to them directly, just as Maude Adams used to step down to
the footlights in "Peter Pan" and ask "Do you believo in fairies?" --
and says, "Don't you think we must help our boys and win this War
sconor. all of you, everywhere?" And our audiences, by their applause,
seem to like this idea of the actress stepping completely out of the
play and talking directly to them.
The idea is so good, I wish I had thought of it myself. At any
rate, I am pleased, as I know you will be, that they are doing it in a
of mine.
Sincerely
John Golden
P.S. Incidentally, I have sent word about this to other play producers
around the town, suggesting that they try something similar in their
productions,
Cable Active
JOHN GOLDEN THEATRE : 252 WEST 45TH STREET : NEW YORK CITY
josenare
LIGHTYIN
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THE FIRST TEAR
DEAR ME
THANK U
SPITE CORNER
EVENTH HEAVEN
WAGES POR WIVES
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Regraded Unclassified
233
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
Secretary Morgenthau
September 20, 1943
TO
FROM Randolph Paul
You may be interested in the remarks made by
Congressman Disney relating to the Treasury's state-
ment on renegotiation, which I quote below:
"Mr. Disney. Did you hear Mr. Randolph
Paul's testimony of the Treasury Depart-
ment? He made & statement before the
committee last week. Did you hear or read
that testimony?
"Mr. Schneider. No; I was not here.
"Mr. Disney. That relates to the subject
that has been discussed here some before the
committee of renegotiation after taxes. I
wish you would do me the favor of reading
that statement, which seems to be 8. complete
one and showed a lot of thought, and give the
clerk of the committee the benefit of your
views on that subject after having read
Mr. Paul's statement.
"Mr. Schneider. I shall be glad to do that.
I read the statements made by the other
government officials in the hearing before
the House Naval Affairs Committee, and I am
not impressed with any reasons they gave.
"Mr. Disney. Mr. Paul made a clear study
of it.
"Mr. Schneider. If he made a better state-
ment than was made by the others, I will be
glad to read it."
Art
Regraded Unclassified
234
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
CONFIDENTIAL
DATE Sept. 20, 1943
TO
FROM
Mr. Hass
Secretary GOH Mongenthau
subject: The Business Situation,
Week ending September 18, 1943
Summary
Prices: Commodity prices firmed last week, when optimism
over an early peace was dampened by the hard fighting in
Itely. Stock prices made further recovery on increased
trading volume, with railroad stocks gaining 38 percent
for the week. Industrial stocks on the London exchange,
however, were alightly lower.
Para products: The reconvening of Congress again brings
to the foreground the problems of farm prices and food
production. Average prices of farm products in August
reached the highest level since September 1920, and in
the four years since the war began they have increased
119 percent as compared with 91 percent in the compar-
Able period of the first World Mar. Farm prices in
August overaged 17 percent above parity.
subsidies: Congress is apparently still opposed to subsidies
for holding down livin costs, 28 indicated by unfavorable
reaction of the Venate Banking and Currency Committee to
Administrator Jones' proposals for subsidizing milk prices.
PA rollback program: Details released by CPA on the
proposed program for reducing living costs to the
Bettember 1942 level do not appear to bear out OPA expecta-
tions that this can be accomplishef with on expenditure of
only 100 millions.
V YRB index: A revision of the FRB industrial production
intex, necessitated by the expension of menufacturing
Activity under the var program, shows current total
production one-fifth higher then indicated by the former
index. (Confidential data).
Regraded Unclassified
235
Stock orices moderately Righer
In C week marked by the reconvening of Congress, and by
tendorary setback to the Americah invasion forces in Italy,
stook prices on the New York Exchange have extended their
rine on somewhat heavier trading volume. (See Chart 1.)
The advance in stock prices was most noticeable at the
end of the week, when the war news had turned more favorable,
end included all major groups, with no apparent distinction
between "var" stocks and "peace" stocks. Railroad issues were
particularly strong, gaining 3+ percent for the week according
to Dow-Jones averages, while the gains in industrial and
utility stocks were about half that amount. All three groups
rerched the highest levels since the end of July. In the London
market, on the other hand, industrial stocks declined slightly
during the week.
Congress brings back farm price problems
With Congress again in session, the problems of food
production and the handling of farm prices again becomes
en active subject. While total food production in 1943 1s
estimated at 5 percent above the record levels of 1942, civilian
per capita food consumption will be reduced about 4 percent
below that of last year due to the increased demands for the
armed forces and lend-lease, although it will still be above
tue 1935-39 average. The management of farm prices in such B.
way 25 to maintain food production with the minimum infla-
tionary influence remains a critical problem.
In retrospect, farm prices have risen almost continuously
during the bast three years, with the index of prices received
by farmers reaching in August the highest point since September
1920. (See Chart 2, upper section.) Farm prices, in fact,
have shown a greater rise during this war to date than during
the comperable period of World War I. From August 1939 to
August 1943, for example, the index of prices received by
farmers rose 119 percent, 2.8 compared with a rise of 91 percent
from July 1914 to July 1918 in the first World Mar.
rapid rise than the index of prices received by farmers. Con-
The index of prices paid by farmers has shown a less
secuently, since July 1942, farm prices have averaged higher
farm prices as a whole average 17 percent above parity last
then parity. (See Chart 2, lower section.) Not only d1c
month (August), but prices were above parity in that month
for all groups of farm products except grains.
Regraded Unclassified
236
- 3 -
Grain prices show sharp rise during year
Although form prices of grains ES E roup are still
helor parity, they have risen more sharply during the past
year than any other group of form products except fruit.
(See Chart 3.) Prices received by fermers for barley end
whent payanced 64 and 33 percent, respectively, in the year
ended must. The 31 percent increase in corn prices shown
for the period would undoubtedly have been much larger if it
and not oeen for the imposition of D. price ceiling in January.
Phe huze feed recuirements of our record livestock pooula-
tion ne the heavy demende of industrial alcohol producers have
been important factors in the rise in grein prices. In the
finerl year 1943, the 000 sold 275 million bushels of wheat
for feed nurposes, most of this during the last half of the
year. The 000 18 continuing to sell whent for feed, having
1800sec of 88 million bushels in July end August, end its
stocks are now Jown to approximately 127 million bushels.
Secause most grain prices have been below parity, it has been
impossible to impose effective price ceilings on any except corn.
Fara prices of milk and butterfat have increased 24 end 22
percent, respectively, during the past year, but large increases
in feed and la or costs have been an of feetting factor from 2
monuction standpoint.
Other 0011 odities for which farm prices have increased
substantially ove- the past year are: potatoes, 40 percent;
flaxseet, 24 percent, and esse, 20 percent. The price of wool,
of which the total output is purchased by the CCC, and the price
of cottonseed, have shown more moderate increases. Large stocks
have tended to retard an advance in cotton prices, which rose only
10 percent during the year.
In contrast to the share advances in the prices received
iv Termers for most products, prices received for hoge in
Aunust were 3 percent below those of last year, end farm
vices of beef cattle were only 11 percent higher. The decline
in hop prices and the moderate rise in beef cattle prices have
been ue largely to price ceilings and to rationing of meat.
Heavy marketings of hors have also tended to lower prices.
Commodity prices firm
The stron occosition which our crmies are encountering
1n Italy, and the President's declaration that c. long, hard
11 ht 1 still shend, has E. somethat bul 18h effect on the
178.2 percent of the August 1939 average, the index 18 1 percent
competities rose =11 htly to a new 1gh. (See Thirt 4.) ..t
it:- markets last week, one the BLS index of 25 basic
Regraded Unclassified
237
4
higher than in early April 1943, when the President's hold-the-
line order was issued. While this 1s not a large increase in
itself, the almost continuous gradual rise in the index since
mid-July is not encouraging. Most of the rise in the index
during the past two months has been due to advancing prices
for grains and meat animals.
Last week wheat orices rose 1- cents per bushel and
barley prices 3¥ cents. Cotton prices rose fractionally, but
prices of hoge were slightly lower.
The BLS all-commodity index continues its sidevise move-
ment of the past two months, holding unchanged in the week
ended September 11 at 102.8 percent of the 1926 average. The
index 1s now 3.6 percent above the corresponding week of last
year and is 37.1 percent above the pre-war level of August 1939.
Rising wheat prices squeeze millers
With wheat prices having risen over 5 percent since mid-
July, flour millers are being squeezed between the higher
wheat prices and the fixed flour price ceilings set last
December by the OPA, it 18 reported in the press, Because of
the squeeze, business of mills in some sections is reported
at E standstill, with many millers doing business at a price
sacrifice.
Although the use of a flour subsidy to relieve this
squeeze has been studied by the OPA, it 18 possible that
critical. However, when Government parity payments to wheat
nothing will be done until the situation becomes more
growers ceare at the end of the 1943 crop, some definite
action vill be necessary, since the legal basis for the
present flour price ceilings, fixed at 39 percent of parity
(including benefit payments), will have been removed.
Hog price ceiling imposed
A price ceiling on live hoge at 14.75 per hundredweight,
Chicago basis, was announced by the OPA recently to become
effective October 4. Since present prices of hoge are above
this the price ceiling should tend to reduce prices.
However, corn and prices, which has made it more While
level, it will do little to nerrow the wide margin profitable between
to it feed corn to hoge great increase in the production fundamental of pork
prices hog than to sell it in the market.
and has resulted favorable in a corn-hog ratio has been a regions,
factor lerd, the the tight feed situation in some dairy Likewise,
causing decline in milk production. for
which it has 16 been threatening chiefly responsible a for the shortage of corn
industrial uses.
Regraded Unclassified
238
- 5 -
The MFA ennounced recently a reduction in the Government
support price for hoge of $1.25 per hundredweight, effective
cotober 1, 1944. Certain heavier weights are dropped from the
support price schedule and lighter weights added, with the in-
tention of discouraging feeding hors to heavy weights. While
the lower support price may serve as 2 warning to farmers
neainst further increasing hog production, it will have little
immediate influence since it does not beçome effective for
more than n year.
Congress 0000888 milk subsidies
Indications appeared last week that Congress 1s still
обловед to the use of subsidies for holding down living
costr. A suggestion by Food Administrator Jones that subsidies
be used to bolster milk production met Congressional opposition
visen presented before the Senate Banking and Currency Committee.
Although no formal vote was taken, Senators Bankhead and Ball
indicated that the majority opinion of the Committee vas favor-
able to AD increase in retail milk prices in preference to the
use of subsidies.
Milk production, Mr. Jones said, will decline considerably
unless steps are taken to vive dairy farmers 8. better price for
fluid milk, particularly during the winter months. Although
mill: production usually drops during the last half of the year,
A reater than seasonal fiecline is now expected by the Bureau
of Apricultural Economics. Moreover, under present conditions
milk production in 1944 may be reduced to only 115 billion
mounds, as compared with an expected 118 billion in 1943 and
119 in 1942. The threatened decrease 16 due not only to an
unfavorable cost-price relationship but also to a failure of
feed to move in sufficient quantities to feed-deficit dairy
regions.
The several alternative subsidy suggestions to bolster
ailk production which Mr. Jones submitted to the Committee
were: (1) a straight subsidy to producers, probably everag-
in- 1 cent a quart, which would cost about #50 millions for
the last three months of this year; (2) an area subsidy, in
which the Government would allow a rise in retail ceilings
in the low-orice areas, and would pay a subsidy to producers
=0 hold prices stable in the high-price areas; (3) a feed-
cort subsidy, which would compensate producers for increased
feed costs since September 1942, and would cost bout 128
Millions for the final ouarter of this year.
Regraded Unclassified
239
- 6 -
Detoils of rogram to cut food prices released by OPA
More details of the recently reported program to reduce
living costs tero given last week by the OPA General Manager,
Chester Bowles. The program, which is in the final stages of
preparation. 1s intended to reduce the BLS cost-of-living index
to corroximately the levels of September 15, 1942 or a 4.6
percent reduction from present levels. It will cost about
100 millions annually, according to the OPA, and the money
to finance it 18 available in funds of the Commodity Credit
Corporation and the Reconstruction Finance Corporation. The
alan contemplates some transportation subsidies, some purchase-
ond-resale operations, and some straight rollback subsidies.
The program would effect the following reductions in
IVENT retail prices: apples would be reduced from between
10 and 12 centa a. pound to 9 cents a pound, onione from 5 to
6 cents, oranges from 10.2 to 9.7 cents, potatoes from 4 to
3.5 cents, beanut butter from 33.3 to 26.5 cents, lard from
18.9 to 17.9 cents, end shortening other than lard would be
reduced about 1 cent a pound. It vas indicated that this
portion of the program would lower the cost-of-living index 2.3
percent. (Our calculations indicate that such reductions would
lower the index only 0.8 percent.) Stricter compliance with
orice regulations are expected by the OPA to produce another
1 percent reduction. The remaining 1.3 percent reduction
necessary to bring the index down to last September's figure,
according to the OPA, will result from regulations to be 18-
sued on fresh fruits and vegetables.
It seems doubtful that the program will achieve the
results expected with en expenditure of only 8100 millions.
Mr. Bowles intimated that more subsidies may be necessary in
order to hold prices at the September 1942 level once the
initial reduction has been achieved. However, "It will be
the policy of the OPA to hold all its subsidy recommendations
to En absolute minimum," and they are to be used only when
there is no other vey to prevent E. rise in retail prices.
New FRB production index
The broad expansion in the war production program, with
its fer-reaching effects on manufacturing activity, has
index of industrial production. The revised index, now avail-
Recessitated a general revision of the Federal Reserve Board
able on & confidential basis, shows a current level of production
about one-fifth higher than that indicated by the old index.
(See Chart 5.)
Regraded Unclassified
240
- 7 -
The July preliminary FRB index of 243 (1935-39 = 100),
on the new basis, compares with an index of 203 (revised)
for that month on the old basis. More recent data, however,
indicate that production in July was not as high as preliminary
figures had indicated, according to confidential information
from the Federal Reserve Board, and the index may be revised
downward to 241 or 242, about equal to the previous peak of
241 in May. The August figure 1s currently expected to be
around the 242 level.
The Board has added 20 new series to the production index
to make it more inclusive, and has substantially revised others.
Greatest increases over the old basis are shown, respectively,
by chemical products, transportation equipment, and machinery.
The present revision makes the FRB index more consistent with
economic data of other Government agencies covering such factors
as employment, payrolls, and national income.
Regraded Unclassified
Chart 1
STOCK PRICES, DOW-JONES AVERAGES
241
Daily
1943
AME/ET
SEPTEMBER
15
-
153
155
30 Industrial Stocks
IN
150
(40
145
140
140
-
135
T.N.
130
(25
is
12
120
20 Relircade
*
-
x
No
-
34
W
a
K.
2
a
e
24
&
is Utilities
-
22
a
x
21
18
18
-
INDIA
!
-
Volume of Trading
a
/
-
-
-
o
M
1
14
21
28
-
DI
19
25
-
9
16
23
34
4.
13
20
17
4
If
.
,
is
22
a
5
12
=
A
is
APRIL
-
MLT
1
SEPTEMENTS
-
-
1943
- # the Secretary of - Treasury
F
144
- é - - -
Regraded Unclassified
Chart 2
242
PRICES RECEIVED AND PAID BY FARMERS
1909-14-100
1939
1940
1941
1942
1943
PERCENT
PERCENT
180
180
160
160
Prices Paid
140
140
Prices Received
120
120
100
100
80
80
$
N
J
M
M
J
$
N
J
M
E
J
5
N
J
M
M
J
S
N
J
M
M
J
$
N
1939
1940
1941
1942
1943
RATIO
RATIO
120
120
100
100
Ratio of Prices Received
10 Prices Paid
80
80
60
60
M
J
S
N
J
M
M
J
$
N
5
N
J
M
M
J
S
N
J
M
M
J
S
N
J
M
1939
1941
1942
1943
1940
a Prices Paid, Including interest and Three
Office of the Secretary of the Treasury
P-252
Divides of Remark and -
Regraded Unclassified
Chart 3
243
PRICES OF SELECTED FARM PRODUCTS
Percentage Change in Prices Received by Farmers, August 1942 to August 1943
PCR
CENT
BARLEY
+60
+50
+40
POTATOES
WHEAT
CORN
+30
FLAXSEED
MILK
BUTTERFAT
+20
EGGS
COTTONSEED
TOBACCO
BEEF CATTLE
+10
COTTON
WOOL
0
HOGS
-10
AUGUST
AUGUST
1943
1942
SOURCE: AGRICULTURE DEPARTMENT
Office of the Secretary of the Treasury
F-
Division of Research and Statistics
Regraded Unclassified
MOVEMENT OF BASIC COMMODITY PRICES
1942
1943
1944
PERCENT
PERCENT
AUGUST 1939-100
220
220
210
210
200
200
9 Uncontrolled Commodities*
190
190
180
28 Commodities
180
170
170
19 Controlled Commodities
160
160
OCT.
DEC.
FEB
APR.
JUNE
AUG.
OCT
DEC.
FEB
1942
1943
1944
PERCENTAGE CHANGE DEC. 6, 1941 TO SEPT. 10, AND SEPT. 17, 1943
PERCENT
PERCENT
Barby anzx
19 Controlled
9 Uncontrolled
Flasseed 6462
Commodities
Commodities
+60
+60
+50
+50
Nops 4861
Carn 44.6%
+40
+40
Aven 366X
+30
Lard 280X
+30
Wheat 287 2
244
Shellec 123%
llood 111%
Steers 2352
+20
Corronseed Oil 8.2%
+20
Sugar 6.9%
Butter max
Wool Tope SBX
Catton BOX
Print Cloth 4.9 I
Zine 3%
410
0% Change
.10
Mides. Sills
Tin, Rubber,
Coffee, Copper,
o
St. Screptem,
o
St Screp exp
Cocoo BX
Tollow 4.12
Burlop 432
10
-
10
Dec. 6
Sept. NO
Sept. 17
Dec. 6
Sept. ID
t I
1941
1943
1943
1941
1943
1943
20 Controlled a Uncontrolled previous 10 June 26, 1942
Office of the Secretary of the Treasury
- of - and States
P-244-A
Regraded.Unclassifie
F.R.B. INDEX OF INDUSTRIAL PRODUCTION, REVISED
1935-39=100, Seasonally Adjusted
1937
1938
1939
1940
1941
1942
1943
PERCENT
PERCENT
Monthly
275
275
250
250
225
225
Revised Index
200
200
Old Index
175
175
150
150
125
125
100
100
75
J M M J S N J M M J S N JMMJSNJMMJSNJMMJSN 1939 J M M J S N J M M J S N J M M
75
1937
1938
1940
1941
1942
1943
1944
Chart
little of the Secretary of The Treasury
245
MU
Dese and Statistics
Regraded Unclassified
DEPARTMENT OF STATE
WASHINGTON
rep.
efer to
Dear Henry:
With reference to your letter of September 8, 1943,
regarding possible proposals to levy exclse taxes on
coffee, tea and COCOE and to increase the existing excise
tax on sugar, I am enclosing 2 copy of an informal тешо-
rendum describing briefly provisions in our trade agreements
which would have a bearing on proposels to Impose excise
taxes on these products. This memorandum was recently
prepared at the request of Mr. Colin F. Stam, Chief of
Staff, Joint Committee on Internal Revenue Taxation.
The situation which the enclosed memorandum endeavors
to bring out may be briefly restated. Since sugar is pro-
duced domestically a.s well as imported, an increase in
the existing excise tax applying equally to both domestic
and foreign sugar would not disturb the competitive rela-
tionship between the two. A nondiscriminatory increase
in the tax on sugar, therefore, would not conflict with
either the letter or spirit of the trade agreements in which
this Government has granted & duty concession on that product.
With regard to ooffee, cocoa and tea, however, the aitua-
tion is different. Since the supply of these products 1s
almost wholly imported, the application to them of an excise
tax would be no different in its economic effects from a
customs duty. For this reason, the imposition of excise
taxes on these products would ordinarily be regarded as
inconsistent with the spirit, if not the letter, of the
trade agreements in which this Government has guaranteed
their duty-free entry. As pointed out in the memorandum,
in excise tax on coffee would directly contravene the letter
of the trade agreements with Brazil and Colombia. However,
it has been the policy of the Department to take the posi-
1on that nothing in any trade agreement shall be construed
to
The Honorable
Henry Morgenthau, Jr.,
Secretary of the Treasury.
Regraded Unclassified
7
- 2 -
prevent the adoption of measures imposed for the pro-
ction of the country's essential interests in time of
ar or other national emergency. Other countries follow
the same policy.
It is understood from your letter that any excise
tax proposals with regard to coffee, cocoa and tea would
originate in Congress. If the appropriate committees
of the Congress should give serious consideration to the
imposition of excise taxes on coffee, cocoa and tea as
temporary measures deemed essential to the war financing
program, the Department would take up the matter with the
foreign governments concerned in accordance with the
policy stated above.
Sincerely yours,
Correstwee
Enclosure:
Memorandum
Regraded Unclassified
August 11, 1945
Proposed Excles Taxas an Coffee, Cames.
Tea and Bugar
In the event serious consideration should be given,
in connection with current studies in regard to a new
tax bill, to any proposal to impose excise taxes on
coffee, 0000A, tea or sugar, the Committee on Ways and
Means would undoubtedly give due consideration to the
bearing of such & proposal on the foreign consercial
relations and international obligations of the United
States. The following information concerning these
commodities may therefore be useful for reference pur-
poses.
The continued duty-free entry of coffee into the
United States is provided for in trade agreements between
the United States and eleven other American republics,
namely, Brasil, Colombia, Venezuela, Eoundor, E1 Salvador,
Costa Hios, Honduras, Gustomala, Halti, Peru and Mexico.
The continued duty-free entry of cocoa beans 1s pro-
vided for in trade agreements with seven American republies
(the same countries mentioned in the previous paragraph,
except Colombia, Guatomala, Peru and Mexico), and also in
the trade agreement with the United Kingdom.
The continued duty-free entry of tea 10 provided
for in the trade agreement with the United Kingdom.
In the trade agreements with Brazil and Colombia,
resiprosal commitments have also been undertaken by the
United States and the two countries mentioned not to impose
any new OF increased federal internal taxes on the articles
on which duty concessions were granted, including in the
wase of the agreement with Colombia, ooffee, and in the
case of Brazil, both ooffee and 0000R beans. The other
trade agreements mentioned above do not contain a specific
provision of this kind. However, since all or almost all
if the ooffee, 00002 beans and tea consumed in the United
States is imported, an "excise" tax on any of these com-
odities would be, in effect, equivalent to a customs
tuty. For this reason, the foreign governments concerned
exclse" tax on any of these products as an impairment of
ould almost certainly consider the imposition of an
the
Regraded Unclassified
- 2 -
lertaking by the United States to maintain the
00 status of the product, in return for which
ing they granted valuable concessions on Ameri-
export products.
with regard to sugar, duty concessions on this prod-
ust have been grented by the United States to Cuba and
7ard. Although there is nothing in either of these
agreements which would prevent the application to imported
sugar of an increased excise tax so long as such increase
were also applied to domestic sugar, it is noted that the
dovernment of the United States has purchased the entire
exportable pertion of the Cuban sugar erop for this year,
en a basis assuring a fixed return to the Cuban producer,
and Is new negotiating for the purchase of next year's
crop on a similar basis. It would appear, therefore,
that under the terms of existing and proposed sugar pur-
chase contracts, any increase in the excise tax would,
in respect of the bulk of our sugar imports, have to be
absorbed by the Government of the United States.
The foregoing indicates in a general way our exist-
ing commitments tmente with regard to coffee, 00002, tea and
sugar. The Department of State would, of course, be glad
to furnish any additional information in regard to these
commi twents, or information in regard to other matters
within the responsibility of this Department, which the
Comuittee may 06 weasion desire in comnection with its
consideration of new tax proposals.
Regraded Unclassified
V
250
September 20, 1943
Dear Waley:
will you please transmit the
enclosed letter to the Chancellor of the
Exchequer? It is from Secretary Morgenthau
in reply to the Chancellor's letter of
September 3, 1943, with regard to the visit
of Lord Keynes and his colleagues to discuss
tentative proposale for international monetary
cooperation.
Sincerely yours,
(Signed) H.D. White
H. D. White,
Assistant to the Secretary.
Sir David Waley,
United Kingdom Treasury
Representative,
British Supply Council,
Willard Hotel,
Washington, D. C.
Enclosure
9/21/43 - Forwarded to adresses by
special messenger from Mr. White's
office - 10:00 s.m.
LS
9/21/43
Regraded Unclassified
251
SEP 20 1943
Dear Mr. Chancellor:
I am glad that you have sent Lord Keynes and his colleagues
to Washington to discuss with lb. White and the American techni-
cal experts the tentative proposals for international monetary
cooperation. Their discussions are now going on. I share with
you the hope that these discussions will make it possible for
our countries and the other United Nations to bring to the so-
lution of the problems of peace the same spirit that has marked
our common war effort.
I appreciate your difficulty in choosing a successor to
Sir Frederick Phillips. Frankly, we have come to regard the
representative of your Treasury in Washington as an important
link in the maintenance of close relations with you. I have
every confidence that the representative you choose will con-
tinue the tradition of cooperation between the Treasuries of
the United States and the United Kingdom. You may be sure
that your representative in Washington will always find a
cordial welcome here.
Sincerely yours,
(Signed) W. Mergenthau, Jr.
Secretary of the Treasury
Sir Kingaley Wood,
The Chancellor of the Exchequer,
London, England.
EMB/jm
9/20/43
Regraded Unclassified
UNITED KINGDOM TREASURY DELEGATION
BOX 680
BENJAMIN FRANKLIN STATION
WASHINGTON, D.C.
REFERENCE:
TELEPHONE EXECUTIVE 2020
21st September, 1943.
Dear White,
Thank you for your letter of September 20th
enclosing a letter from Secretary Morgenthau to
Sir Kingsley Wood's letter of September 3rd, 1943.
I am sending the letter on to London, as I assume that
this will be the Secretary's wish despite the tragic
news of Sir Kingsley's death.
Sincerely yours,
S.D. walay
Dr. Harry White,
U.S. Treasury.
Greasory Chambers,
S.M.
3rd September, 1943.
bean hn Morgen th an
I am very glad that it has been possible to arrange
for Lord Keynes to come to Washington to discuss with you
and Dr. White and others the important proposals for an
international monetary scheme after the war. Dr. White
and Lord Keynes have both made this, as it were, their
own subject, and have brought all their knowledge and
experience to it, T am very hopeful that in the friendly
discussions which they will have satisfactory progress will
be made which will enable both our Governments to proceed
to the next 'mportant stage.
I need not introduce Lord Keynes to you. He brings
my best wishes for the success of his task, and I know
that he will have yours.
Sir David Waley is Also returning to act for the
time being as the representative of our Treasury in
Washington. I am afraid, however, that I shall not be
able to let him stay indefinitely as Sir Frederick Phillips'
successor, for there pre other parts of his work at the
Treasury on which he has specialised experience not easily
Regraded Unclassified
obtainable elsewhere.
As you will understand, I am very anxious to make &
right choice in succession to Frederick Phillips, who was
your friend as well as mine, and enjoyed equally the
confidence of both of us. I want to take time to choose
someone who seems suitable and before I reach a decision
I shall ask the Anbassador to see you personally and to
tell you of my intentions.
Yours Suncerely
/ none
Henry Morgenthau, Esq.
SEP1
254
25
SEP 20 1943
Dear Sir David:
would you be se kind M to transmit the enclosed
latter to the Chancellor of the Exchequer acknowledging
receipt of his two letters of September 3, 19437 The
first concerns the receipt by the United States of zuw
materials from British Empire areas as recipresal aid
and the second served to transuit the memorandum on
the Overeses Assets and Liabilities of the United King-
don.
Thanking you in advance, I an,
Sincerely yours,
(Signed) H. Mergenthau, Jr.
NP
Secretary of the Treasury.
Sir David Waley,
United Kingdom Treasury
Representative,
British Supply Council,
Willard Hotal,
Washington, D. C.
Enclosure.
TMK:ff 9/20/43
Regraded Unclassified
255
25
SEP 20 1943
Dear Sir Kingsley:
I as writing to acknowledge receipt of your two letters
of September 3, 1943, - of which dealt with the receipt by
the United States of THE materials from British Empire areas
M resiprosel aid and the second of which served to transmit
copies of the memorandum on the Overness Assets and Liabili-
ties of the United Kingdom.
I appreciate your giving these matters your close
personal attention. You may be assured that the points
raised in your letter and the assorandum will receive our
most careful consideration.
Sincerely yours,
(Signed) H. Morgenthau, Jr.
Secretary of the Treasury.
The Hemorable Sir Kingsley Wood,
Chanceller of the Imchequer,
Landon, England.
THE:ff 9/20/43
Regraded Unclassified
Creasury Chambers,
Whiteball S.M.
3rd September, 1943.
bean his Morgentha
In my message to you of the 23rd August I said that
I would give close personal attention to the aide
memoire on Reciprocal A1d which our Embassy received on
the 18th August and would write to you about it. I am
now taking advantage of Sir David Waley's return to
Washington to send you this personal letter as it seemed
to me best that I should ac uaint you myself with the
position as I Bee it. In doing so, I know I can count on
the ready understanding with which you have approached the
problems of my country in the past.
I should first tell you that my overnment have
now given instructions for the reply to the State
Department on the aide memoire which the Embassy received
from them. I think it will be found convenient that our
ply should be (iven orully in the first place;
scussions as ,e both know often prevent misunderstandings.
reover the representatives of our Departments in
shington will then be competent to settle the administrative
cedure for the new arrangements and thus to save time in
/bringing
Regraded Unclassified
bringin bittem into effect. Afterwards, 1f it suits you,
our agreement might be appropriately recorded in an
exchange of notes which could be published for the
information of our peoples,
When I learned at the beginning of June that
you had in mind proposing that raw materials should be
given aB Reciprocal Aid, I viewed the idea with
imedia to sympathy. It was a natural development
bf the pooling of resources between our countries,
which is illustrated by the Lend-Lease system, and on
behalf
or the United Kingdom and the Colonies, I
obtain
the concurrence of my colleagues to the general
princ
underlying your proposal.
question of our gold and dollar balances,
which
now has been causing you some concern and
which
aed been hoping to discuss with Sir Frederick
Ph11
seems to me a separate question and I can
portu
efer to it more conveniently later in this
lett
/As
Regraded Unclassified
Commany
Creaters,
As regards the proposals for raw materials,
the Governments of Australia and New Zealand have
their own Lend-Lease Agreements with the United States
Government, and the Union of South Africa 18
negotiating such an Agreement. While the Government
of India have no Agreement, they are giving Reciprocal
Aid, they have direct relations on Lend-Lease with the
United States Administration and they are, as you know,
fiscally independent. The position is therefore that all
these Governments will expect to be approached direct
on the programme as it affects each one of them and to
give their own answer. When the proposal was
specifically made to us at the end of June, we
naturally told the Dominions and India of our own
policy in regard to it. We are, of course, also
keeping them informed of the subsequent developments
and, while you will appreciate that I cannot speak for
them, I am not unhopeful of the attitude which they will
take up.
When we received the provisional list of raw
/materials
Regraded Unclassified
unterials
more
tentative
311'
Fr
we
did
not
PC
the
illustration
scale
of
and
I
certainl:
aid system should kept Plexible :0 must
changed needs, de Are rendy to regard one offer
as elastic and coverin all the procurements by the
United States Government 01° uncontial reguire nts for var
needs of food-stuffs and PAV datori lo, in so far as they
can be supplied from the inited Ein do., ANd the Colonies.
Somi precision in the 20 wasse is ocessar for smoth
wo ng, but this CO., no donbt be achieved 1.1 the sa to vay
as the case of Lend-Lease, through the sub.Hosion to
us
pro ranmes and requis tions which may very 1.48.
to time and which, T can assure you, we will
/
e:
de in the same way and with the same desire to help
/as
Regraded Unclassified
Greaming Chambers,
delhiteball
S
the Lend-Lease Administration have always shown in
dealing with our requirements of United States resources.
As regards the date of the 1st October. This
as only suggested by us to give time for the arrange-
ments which would be necessary for the switch-over from
direct procurement by the United States Government to
procurement by us. It was not our intention that you
should complete all your contracts outstanding on that
date. We are perfectly ready to make such arrangements
as will permit supplies under Reciprocal Aid to commence
st the earliest possible date.
On these lines, which will be discussed with
the Administration by Sir David Waley and his colleagues,
I should expect that a satisfactory arrangement between
our two Governments could speedily be made.
It seems to me, however, that the proposal in the
aldo memoire that financial reimbursement should be
made to the United States Government, retrospectively
10 the 1st July, for all deliveries covered by the new
arrangemente which were made between the 1st July and
the
Regraded Unclassified
, to
Which 1.00
ly nei lace in
chelle
the
e materials m
this raises
and doll
letter.
Here I should be
eness of our rel 1f
:
erstan that
Inces and Ir
riticis
-]
int scale. I
boldue
10
lities
the Noble
45
RES
nc
los
Il
no
8.8
Regraded Unclassified
Treasury Chambers,
Whiteball S.M.
United States Government and of the Dominion of Canada.
In many other parts of the world, however, We have to
provide the finance for the war. We call only do this
in the main by borrowing local currencies against a
credit in sterling to the respective countries, and
thus we re incurring unfunded indebtedness on a vast
scale. We could not continue this policy indefinitely
without having some proportion of liquid assets out of
which the more pressing part of the liquid indebtedness
could be met if called for from time to time. But our
liabilities, which are liabilities of the United Kingdom
alone, are several times as great as our reserves, and
the disproportion between our reserves and liabilities is
also reflected in their growth.
Moreover, the gold and dollar balances, which are
shown as United Kingdom balances, are not in fact our
reserves alone; they are the pooled reserves of the
sterling area. As you know, the members of the sterling
area turn over to us their surplus dollar earnings in
exchange for sterling credit. But this carries with it
/an
Regraded Unclassified
toll a 1
ng
erlin
Poots suns =
t ose W
on the
nce between the
But that is
hol
BEGANE
receivi
resms
scale beer 50
ol
an
:oramo na
of
lité of
Il
Regraded Unclassified
Contain Crambers,
SM.
January Sir Frederick Phillips delivered to you a
message from me on a proposal that Lend-Lease might be
restricted if our reserves rose above a certain
figure. It was, I think, on the 15th February that he
gave a note to the Treasury briefly explaining the
position. It is clear to me that possibly because the
discussions on the subject 80 far have been incomplete,
we have not been successful in demonstrating how we view
this matter or the principles involved in it. I have
therefore given instructions that the particulars in the
note which Sir Frederick Phillips gave to the Treasury
in February should be brought up to date, and I am
arranging that a fuller confidential statement should be
delivered to you for your consideration, and for
discussions between the representatives of the United
States Administration and our representatives in
Washington.
When you have studied this statement I am sure you
will understand me when I say that my Government could
not regard it as reasonable that a limit should be
/placed
Regraded Unclassified
plac
to our cold end doll e holdings which pays no
region
to our liabilities and the'r growth, or to the
war irc mstances which leve brought about this position,
particularly the fact that the have to finance practically
the whole of th war expenditure in the iddle Mast and
India. Indeed I real entitled to hope that when the
whole position is d'scussed and is clear, we may count,
while the war circumstances remain as they are at
present, unon the continuance of Lend-Lease on its
present lines.
Our external financial usition naturally
gives me grown for concePa AND in MY maiget Speech on
the 12th April - outlined to Parliament the resent
losition. This state ent 0.0 seit viúo interest and
Parl ament is increasi. attention to the shole
sub, ct; Part*
e
exhaple,
that
QUE
Coli ind dollar
Lel
inst very uch
lar
increasing.
*...
red
ise
sheald talid
ste
of various inús disferent times to
/
Regraded Unclassified
Creasurg Chankers,
Whiteball S.M.
discharge some of these liabilities, through the use
of our gold and dollar balances. I shall welcome a full
discussion on the problem and our representatives have
instructions to disclose the whole situation to the
United States Administration. I cannot say here and now
what we shall find It best to do, but I shall keep you
informed of the lines on which we are proceeding.
As regards the publication of Reciprocal Aid
figures, I think that it 18 necessary to publish a
White Paper here as soon after the re-assembly of
Parliament in the latter part of September as is found
convenient. Parliament and our people are entitled to
know of the magnitude of our effort and of the burden it
entails. A copy of the White Paper in its present form
has been given confidentially to the United States
Treasury and to other representatives of the United States
Administration and I shall be glad to consider any
suggestions you or others may make on it. Then when we have
it in the final form in which I think it should be
presented to Perliament, I will arrange that you are
/given
Regraded Unclassified
RE CRIVED
Treasury Department
SEP 17 1943
Division of
Monstary Research
given an on ort nity of seeing it before 1 t, is published.
I have tried in this letter to :ive you a broad
outline of our position, as I se it, Athont: tronbling
"on with unnecessary detail. Even so the letter has
perhaps become overlong. d'remistances, however,
unfortunately make it impossible for us to sit lown
together and tslk over this important subject. In au
particularly anxious that you, ./ho have so clearly
understood onr financial osition in the post 1.1:2
gave us your icl; at 2* 11:10 1t time, onlă have a
full story and start Keve it street 1: a personal
my from me.
nich an good wishe
Jun Sincerely
Noral
ent Nor enthan, use,
Regraded Unclassified
Creasurg Chambers,
5.00.
3rd September, 1943.
bean her Margen than
In the personal letter from me which Sir David
Waley has delivered to you I refer to a fuller
memorandum on the subject of our gold and dollar
balances and our external liabilities which I was
having prepared for the confidential information of
yourself and other members of the United States
Government.
This letter covers the memorandum which, as
you see, not only sets out the details of the position
for your information but gives 9 full account of the
circumstances which has led to this nosition and of
our present policy in regard to it.
Im Sincerely
Mugley Nill
Henry Morgenthau, Esq.
Regraded Unclassified
RANDUM BY THE BRITISH TREASURY
THE OVERSEAS ASSETS AND LIABILITIES OF
THE UNITED KINGDOM
I. THE OVERSEAS FINANCIAL POLICY OF THE UNITED KINGDOM.
1. The passage of the Lend-Lease Act early in 1941 and the assistance
given by Canada from 1942 onwards have dealt most liberally with the more
recent financial requirements of the United Kingdom in North America. These
measures are well known and widely appreciated. In most other parts of the
world, however, His Majesty's Government have to pay for the war by acquiring
local currencies against B. liability to repay sterling and are thus incurring
unfunded indebtedness on a vast scale. It would not be possible or reasonable
to continue this policy indefinitely without having some proportion of liquid
assets out of which the more pressing part of the liquid indebtedness could
be discharged if called for from time to time. It has, therefore, been our
deliberate policy to accumulate a reserve (though, relatively, a small one)
against these liabilities - not out of our net external earnings because, of
course, there are none - but partly by ad hoe capital transactions and partly
by holding on to B. portion of such current dollars and gold 8.6 come our way
(mainly from other parts of the Sterling Area) instead of using the whole of
them to meet our liabilities. The dollars acquired from other part of the
Sterling Area, however, have to be paid for in sterling, which increases our
overseas indebtednoss, This system has, therefore, the effect of increasing
our gross indebtedness but does, at least, mean that we hold something against
it. For example, it has seemed to us more advisable to borrow in the course
of the year (say) $3,200 million and retain $800 million to meet pressing
claims, than to borrow $2,400 million and retain nothing against it.
2. The recent increase in British liquid assets is thus an essential
component in a careful (though nevertheless vulnerable) financial policy by
which, though with tho most dangerous risks to our post-war position, we
have managed to finence a vast war exponditure in India, the Middle East and
alsewhore - an expenditure which is, of course, vitally essential to the
prosecution of the war. To set a limit to our assets while disrogarding the
growth in our liabilities would tear this delicate system to pieces. Only
If we are left free to pursue our existing policy can we hope successfully to
finance our vast and essential commitments outside North America.
Regraded Unclassified
STATISTICS ILLUSTRATING THE OVERSEAS FINANCIAL POLICY OF THE UNITED
KINGDOM.
(a) Growth of Liabilities in Relation to Assets.
3. The statistics which show how this policy has worked out in practice
are given in dotail below.
4. The excess of the financial burden overseas beyond what could be met
out of current income in the last 3/2 years has been met in four ways as follows:-
$ million
Jan.1,1940
Jan.1,1940
to
In
1st half
to
Dec.31,1941
1942
1943 (approx.)
Juno 30,1943
(1) By overseas loans*
R.F.C. loan
345
15
- 10
350
Canadian secured loan
-
635
- 15
620
Sundry loans & advancos
115
125
15
255
Total Loan
460
775
- 10
1,225
(11)By sale of overseas
invostments
(including sinking funds) 1,545
845
5359
2,925
(111)By not increase of
quick liabilitios#
(oxcl. those carry-
ing a gold or dollar
liability)
2,5857
1,240
1,235
5,060
(1v)By sale of gold and
dollars (not, 1.0.
allowing for gold
and dollar liabili-
tics)
1,950
- 305
- 330
1,315
Grand Total
6,540
2,555
1,430
10,525
*
No crodit is hero taken for cortain loans advanced during the var
to Alliod Government.
√
The figures for the first half of 1943 are provisional and subject
to correction.
#
1,0, Banking liabilities and liabilities of Grown Agents and of
Currency Boards.
7
The of this figure requires an catimato of the quick
calculation at the commencement of the period on January 1st, and 1940.
liabilities estimate of this assumed above is $2,000 million approx., to
The is this figure which has to be added to the figures above
it the correct total of the quick liabilities at any examination subsequent
date, give This figure of $2,000 million is under further
and may have to be roducod.
Regraded Unclassified
5. The effect of these changes on the aggregate of the gold and
ar reserves has been as follows: -
$ million (Gold at 835 per fine OZ,)
Dec.31
Dec.31
Dec.31
June 30
1939
1941
1942
1943
Cross gold and dollar
reserves#
2,335
500
930
1,335
less gold end dollar
liabilities
-
115
240
315
Quick reserves
2,335
385
690
1,020
/Exclusive of dealers' balances.
DIncluding an approx. allowance for 200 million held in private accounts
at that date, but subsequently requisitioned and added to the
official balances.
6. The relation between the growth in quick liabilities and in the
quick assets held against them was, therefore, as follows:-
$ million
1942
1st half 1943
Increase in quick liabilities 1,240
1,235
Increase in quick assets
305
330
The accompanying increase in total liabilities has been 2,015 and 1,225
respectively.
7. It will also be observed that, whilst gold and dollar reserves
have increased in the last eighteen months, they have fallen by more than
half over the period as a whole. Quick liabilities (namely $7,000 million
approx.) are now about seven times the quick reserves held against them.
(b) The Sources out of which the Quick Reserves have been Accumulated.
8. The following paragraphs analyse the sources out of which 1st an
January 1942 to 30th June 1943. Particular attention may be drawn the
increase in our quick reserves has been accumulated in the period to
following points: -
(1)
Of the total net increase in the period of $635 million, by
far the most important source has been the dollars acquired rom
the rest of the sterling area ($594 million) which has involved
a corresponding growth in our liabilities,
(11)
-
Of represents pay of U.S. troops. A further $95
the dollars acquired from the rest of the sterling area
million $462 million was received in respect of the pay of U.S. troops in the U.K.
(111)
between Apart the U.K. and U.S.A. was during the period adverse the
from troop payments the balance on current account to
U.K. by $349 million.
(iv)
A further Africa provided for the repatriation of South African in
important source has been $182 million of gold
from sterling South Government securities, which represents no increase
our total assets.
Regraded Unclassified
with below, has been as follows: .
United States. This account, apart from troop payments which are dealt
favourable balance on current account between the United Kingdom and & the
9. The growth of our quick reserves has not arisen through
million
1942
1943 1st half
1943 2nd half
Receipts
forecast)
825
324
Outgoings
312
1,112
386
394
Balance
287
- 62
- 82
The further reduction in net expenditure on pre-Lend-Lease
commitmento during 1943 compared with 1942 has considerably reduced the
deficit, but has not been suffidient to wipe it out. The prospective cost
of the further reciprocal aid now proposed on raw materials will largely
offset the saving on old commitments, but as its allocation between the
U.K. (which boars the cost) and the Colonies (which produce the materials)
is not casy to define in a balance of payments context, the matter is dealt
with below in connection with the current balance with the U.S. of the
Storling Area ao A. whole,
10. The troop paymonte which are not included in the above table
ariso oving to the fact that, whatever else may be provided under Lond-Lease
or Reciprocal Aid, it has been recognised from the beginning that
Governments must rotain diroct responsibility for the pay of their own
forces in all parts of the world. Receipts of the U.K. under this head
have boon: -
8 million
1942
1943 lat half
1943 2nd half
(forocast)
U.S. troops in U.K.
50
45
150
It vill be seon that, ovon after allowing for these receipts,
there still romains a deficit of $237 million in 1942 and $17 million
in the first half of 1943 against the U.K. in favour of the United States,
11. Às mentioned above a special consideration applies to this item
and to the similar receipts (acc below) by other parte of the Sterling
Aroa. To offect these receipts by a reduction of Lend-Lease Aid to the
U.K. would como to the same thing as asking for the pay of American
troops throughout the Sterling Arca to be charged on the British Budget
as a part of Reciprocal Aid. This proposal, if it were made, would be
contrary to the principles of Mutual Aid, as understood hithorto, which
have regarded the pay of the troops of each Ally, wherever situated, as
the responsibility of that Government.
12, In addition to the outgoings included above, certain dollar
payments have been made by the United Kingdom outside the Unitod States,
insignificant in 1942, but amounting to 5165 million, chiefly to Canada,
in the first half of 1943.
13. Capital transactions in the United States, after touching high
levels in 1940 and 1941, nade only a small contribution to meeting the
deficits in the poriod undor considoration:-
$ million
1942
1943 1st half
Salos of gold in U.S.
B
4
Salos of securities in U.S.
22
21
Instalment of R.F.C. Loan
40
70
25
Regraded Unclassified
14. All the above items taken together show A deficit of over $900
million against the U.K. in the eighteen months ending Juno 1943. How,
then, has the increase of the British quick reserves como about? There
have boon three main sources.
(1)
By far the most important source has been the dollars
acquired from the rost of the Storling Area. The current account
between the rest of the Storling Area and the Unitod States has
been as follows: -
$ million
1942
1943 1st half
1943 2nd half
(forecast*)
Rocoipts
600
292
262
Outgoings
481
177
158
Balance
119
+
115
104
Boforo allowing for further reciprocal aid in raw materials.
Taking those figuros in conjunction with those for the U.K., it vill be
observed that in the eighteen months ended June 30th 1943 there has been
a deficit of $115 million adverse to the Sterling Area as a whole in the
above curront account with the United States outside Lend-Lenso and
Reciprocal Aid. This may not have been appreciated in all quartors, and
it may have been orroncously bolieved that the Unitod Kingdom quick
reserves had increased because the greater scope of Lond-Lease compared
with that of Reciprocal Aid had lod to a current balance with the Unitod
Statos substantially favourable to the Sterling Arca. The new proposels
for reciprocal aid in raw matorials will probably convort into a deficit
the small surplus which might otherwise accrue from non on ns a result
of the completion of payments on the pro-Lend-Loase contracts.
The receipts arising from the presence of U.S. troops in the
rost of the Storling Area (which are not included above) vero
3194 million in 1942 and $166 million in the first half of
1943. Receipts from this source in the second half of 1943 are
conjecturally catimated at $200 million.
All those dollars, both those arising from the favourable
current account and also those in connection with U.S. troops,
amounting altogother to $594 million in the eighteen months
onding Juno, 1943, have been acquired by the United Kingdom
under the pooling arrangements by which numbors of the Sterling
Area soll to the United Kingdom for storling any dollars which
thoy carn in excess of their own direct requirements. Thus the
quick storling liabilities of the United Kingdom have been
increased by the samo amount GD the dollar assets 60 acquired.
(11)
llo have received, mainly in the first quarter of 1943,
$182 million of gold from South Africa for the repatriation of
South African Government storling socurities. This has not
represented an increase in our assets, but only n. change in
thoir form.
(111)
Re also receive gold, chiefly from South Africa, against
payment in storling, and since 1941 have retained a part of this
gold to moet contingoncios, instoad of applying it at onco to
moot current linbilities.
15. The above analysis of the sources of the quick assots of the
Unitod Kingdom can be summed up na follows:-
Regraded Unclassified
million
1942
1943 1st half
U.K. curront account with U.S.
- 287
- 62
U.S. troops in U.K.
+ 50
+ 45
U.K. dollar payments outside U.S.-
2
- 165
Salo of gold and securities and
loans in U.S.
+ 70
+ 25
Rest of Storling Area current
account with U.S.
+ 119
+ 115
U.S. troops in rest of Sterling
Aroa
+ 194
+ 166
Special gold from South Africa
for repatriction of South
African Government storling
securities
+ 15
+ 167
Other gold and dollar movements
(not)
+ 146
+ 39
Increase in U.K.:s quick assots
+ 305
+ 330
Regraded Unclassified
IN
THE ADEQUACY OF THE UNITED KINODOE'S QUICK RESERVES.
16. Having regard to the size of the quick liabilities, it 1a obvious
on by criterion that the quick reserves are seriously inadequate. But there
at also certain other considerations which are, in greater or less degree,
want to this question.
(a) The liabilities are liabilities solely of the United Kingdom and
x of any other part of the Sterling Area. But the quick assets cannot be
garded as wholly available for the United Kingdom's requirements. A large
purt of them has been acquired under the pooling arrangement referred to
above by which all parts of the Sterling Area (other than some of the
tesporary adherents) sell to the United Kingdom for sterling any dollars
which they earn in excess of their own small direct requirements. These
arrangements carry with them an implied obligation on the U.K., no far as
is possible, to provide dollars for other parts of the Sterling Area, which
have retained no significant dollar holdings of their own, when subsoquently
they have a logitimate need for them.
(b) The quick liabilities are the more burdensome because of the
disposal of many of the more saleable capital assets, which otherwise would
have served as a second line of defence. As the table above shows, the
total loss of assets and increase of liabilities no far suffered by the
United Kingdom during the war has amounted to 10+ billion dollars. In this
respect our position is unique amongst the United Nations. In fact more than
90 per cont of this loss has accrued to the advantage of other members of
the United Nations, many of whom have improved their overseas position during
the war. The United Kinpdom alone has been expected to mortgage the future
on a large scale by incurring overseas liabilities. During the earlier
period of the war, expenditure in North America was the main cause of the
deterioration of the United Kingdom's financial position. More recently
her responsibility for mooting the groater part of the local cash expenditures
in the whole area of hostilities from Tunis to Burna has been the main
influence. At the present time the United Kingdom's local cash expenditure
in Eypt, the Middlo East and India, over and above the supplies shipped
across the seas, is amounting to somo $2/ billion annually, the greator
part of which has to be borrowed from the countries concerned. Between the
beginning of the war and the und of 1943, for example, it is estimated that
we shall have incurred an indebtodness to India of some $3,750 million, of
which some $1,200 million will have been used to discharge her Government
storling debt and the balance will remain owing to her,
(c) In judging whether, in spite of the above considerations, the
United Kingdom is nevertholoss accumulating unnecessarily large quick
reserves 1t is rolevant to consider the relationship botreen the United
Kingdom's resources as shown above and those of other members of the United
Nations. For example, the gold and dollar reserves of the U.S.S.R., which
are not published, are estimated by the United States Treasury at $1,600
million and those of China at $750 million. The corresponding figures of
France can be put at $2,875 million, of the Nethorlands at $690 million and
Belgium at $870 million. None of these countrics have any significant
amount of overscas quick liabilities against those reserves. The figures
for the United Kingdom (which in respect of dollars include the whole of
the Storling Ares) are at present, as shown above, about 11,000 million
with storling liabilition seven times this amount against them. The not
gold reserves of the United States (1.e. after doducting all foreign balances
held in United States) are about eighteen times the gross reserves of the
United Kingdom (1.e. before deducting the storling foreign balances held in
United Kingdom which are soven times as great as the reserves).
17. If, therofore, in spite of a progressive deterioration in her
net position, the United Kingdom 1s in a position, as we hope, to increase
her quick reserves above the present figure by retaining certain liquid
resources earnod outside our balance of trado with the United States instead
of applying them forthwith to a reduction of hor liabilities, this cannot
be Judgod, in the light of the above considerations, to be a matter for
criticism or open to legitimate objection.
14th September, 1943.
Regraded lassified
UNITED KINGDOM TREASURY DELEGATION
BOX 680
BENJAMIN FRANKLIN STATION
WASHINGTON, D. c.
TELEPHONE EXECUTIVE sozo
Se tember 22, 1943
The Honourable Henry J.
Morgenthau Jr.
Secretary of the Treasury
Washington 25, D. C.
Dear Mr. Secretary:
Thank you for your letter of September
20th enclosing a letter to Sir Kingsley Food acknowledg-
ing receipt of his two letters of Se, tember 3, 1943. I
am forwarding these to London, as I assume this would be
your wish despite the sad news we have had in the mean-
time of Sir Kingsley hood's death.
Sincerely yours
S.D. Waley
Sir David Waley
SDW:bj
Regraded Unclassified
277
TREASURY DEPARTMENT
PROCUREMENT DIVISION
OFFICE OF THE DIRECTOR
WASHINGTON
September 20, 1943
MEMORANDUM TO THE SECRETARY:
Supplementing report to you of September 13,
1943, the purchases against the African Program from
September 13, 1943, to September 19, 1943, totaled
$1,796,865.98, or a total of purchases for the program
thus far of $61,755,847.44.
Attached is report giving status of shipping
against these purchases.
is
Clif for .. Mack
Director of Procurement
SECRET
PORVICTORY
BUY
UNITED
STATES
persons
BONDS
AND
STAMPS
(37861)
Regraded Unclassified
278
SHIPPING REPORT AS OF SEPTEMBER 18, 1943
Tonnage
Tonnage
Tonnage
Tonnage
Shipped to Date
Under Load
On Hand At Port
En Route
Commodity
From U. S. A.
At Port
Waiting Vessels
To Port
Agric. Mach, & Implements
1776.38
172.82
381.94
136.32
Automotive Eqpt. & Parts
801.17
121.94
141.55
Batteries
120.77
.25
18.5
7.46
Dearings
2.21
.23
.63
.29
Brass & Bronze
288.4
2.5
87.6
Brushes & Brooms
.8
.15
Bldg. Hdw. & Material
310.07
76.82
268.51
22.94
Chemicals
17943.14
1491.98
6781.11
4107.27
Clothing, Notions & Textiles
16602.5
16.73
3095.86
4467.51
Construction Machinery
.44
Copper in Various Forms
336.3
98.18
10.57
Elec. Eqpt. & Supplies
74.44
22.76
7.45
36.97
Explosives
14.15
Ferro-Alloys
73.88
11.32
.53
Food & Food Products
6032.
Furniture & Office Eqpt.
.11
.49
.01
1.71
Glass
194.82
95.12
7.66
690.44
Graphite Products
92.66
.32
13.23
Hand & Cutting Tools
995.64
61.04
381.19
369.26
Industrial Machinery
49.85
73.2
106.14
243.52
Iron
145.
810.
222.65
1028.35
Jute Bags
857.47
535.
Lead & Lead Alloys
73.18
102.5
Medical Supplies
56.12
.68
5.02
.3
Non-Ferrous Metals, Other
434.02
20.84
.81
Paper & Paper Products
4586.16
1605.09
1948.39
1939.12
Rope & Twine
247.7
34.75
14.
12.
Rubber
778.48
20.
319.79
434.47
Regraded Unclassified
279
- 2 -
Tonnage
Tonnage
Tonnage
Tonnage
Shipped to Date
Under Load
On Hand At Port
Enroute
Commodity
From U. S. A.
At Fort
Waiting Vessels
To Port
Shoes & Boots
315.68
5.34
539.38
1465.2
Steel, Alloy & Carbon
7733.93
225.36
7392.58
5831.47
Steel, Pipe & Tubing
251.47
129.54
313.72
Tin Plate
845.
357.55
204.95
2431.05
Zinc
27.96
27.29
Totals
62,033.5
5112.46
22,831.88
23,712.27
Regraded Unclassified
280
25
September 20, 1943.
Dear Mr. Payeers
Per the Becretary, I - acknovledging
your letter of September 19, which enclosed
a copy of a report vysa the progress of the
Seviet Protecol. Mr. Margenthan is glad to
have this material and will read it with in-
terest.
Sincerely yours,
(Signed) H. S. Klotz
1. S. Nots,
Private Secretary.
Momerable B. A. Payser,
Mrester, Foreign Division,
Var Prodmation Board,
Vackington, D. c.
Regraded Unclassified
WAR PRODUCTION BOARD
281
WASHINGTON, D. C.
IN REPLY REFER TO:
September 17, 1943
Mr. Henry Morgenthau
Room 280
Treasury Department
Washington, D. C.
Dear Mr. Morgenthau:
I am enclosing a copy of the report upon
the progress of the Soviet Protocol. This is the
second report during the Third Protocol Period.
Sincerely yours,
E./A. Peyser
Director, Foreign Division
Attachment
PYICTORY
BUY
ENITED
STATES
WAR
BONDS
AND
STAMPS
Regraded Unclassified
282
WAR PRODUCTION BOARD
WASHINGTON, D. C.
September 15, 1943
IN REPLY REFER TO:
My dear Mr. President:
The accompanying tabulation shows the progress made during
August, and during the two months ending August 31, towards fulfil-
ment of Third Protocol materials and equipment production programs
for the Union of Soviet Socialist Republics.
Practically all raw materials programs are now on a satis-
factory basis. Some adjustments in steel schedules remain to be made
because of & 210,000 S.T. reduction in the Soviet request (1.e. from
710,000 S.T. to 500,000 S.T.), and allocations of & fev items, primar-
ily chemicals and farro-alloys, are being held up pending elimination
of excessive stockpiles; but details relative to other programs have
been fully worked out and production in accordance with terms of Pro-
tocol offers 1e under way,
In contrast, much remains to be done before industrial equip-
ment programs will be completely rounded out. Although orders for a
large part (approximately two-thirds) of the industrial equipment called
for by Third Protocol offers were accepted and put into production in
advance of the opening of the Third Protocol period, there remained as
of July 1, 1943 important blocks of orders still to be placed in the
case of & number of categories. To date, many of these orders have not
been forwarded to the War Production Board. In consequence, appreciable
fractions of programs for tool tips and blanks, small cutting tools,
measuring tools, electric furnaces, rolling mill equipment, wire draw-
ing equipment, cranes, compressors, pumps, equipment for blast furnaces,
valves and fittings, pnsumatic tools, and control instruments and test-
ing machines have not yet been scheduled or even requisitioned. Be-
cause of tight supply conditions, or the long-run nature of the equip-
ment involved, several months are required after placement of contracts
for shipment of items such as these to begin. The result is that &
serious obstacle has been placed in the way of achievement of promised
goals in the case of these categories.
The principal reason for holding back these requisitions has
been concern over the possibility that industrial equipment stockpiles
will get out of hand. As of July 1, stocks of industrial equipment are
estimated to have totaled approximately 180,000 short tons shipping
weight. New production offered in the Third Protocol is estimated at
about 510,000 tons. Thus, during the twelve month period there should
VICTORY
be available for shipment to the USSR about 690,000 short tone of
BUY
VRITED
STATES
WAR
BONDE
-
STAMPS
-an
Regraded Unclassified
283
industrial equipment. Soviet representatives have stated that they ex-
pect liftings to average around 50,000 short tone per month, a rate
which would not only prevent a further growth of stocks but which would
bring stocks down to 100,000 short tone or less, that is, to a reason-
ably satisfactory level. However, past performance has given cause to
doubt that exports will take place at this rate. During the Second Pro-
toool period the monthly average was less than 20,000 short tons ship-
ping weight. In June and July, the average increased to slightly more
than 30,000 short tons, and in August the total came to approximately
75,000 short tons. This great acceleration was brought about, however,
solely through petroleum refinery equipment being granted priority over
practically all other export items. Of a total of some 135,000 short
tone of industrial equipment lifted in the June-August period, approxi-
mately 75,000 tons consisted of petroleum refinery items. During July
and August, stocks of other equipment in warehouses and depots alone
increased by more than 50,000 short tons. While it seems likely that
with the completion of the petroleum refinery program, shipment of other
equipment will greatly increase, it is questionable whether the increase
will be sufficient to prevent stocks from growing appreciably during
the Third Protocol period.
It 1e noteworthy that in the case of most other items included
in the War Production Board Soviet Program the stocks situation now seeme
to be reasonably well in hand. Through diversions and increased liftings,
steel stocks have been cut to less than 400,000 short tone. Non-ferrous
metale have been reduced to the minimum required for pipe lines, and,
through control of allocations, chemicals are being held to a reasonable
level. Cable stocks have increased to some extent, but it is anticipated
that recently insugurated reductions in schedules will shortly result in
production falling behind exports with a consequent lowering of stock-
piles.
Respectfully yours,
/s/
Donald M. Nelson
The President
The White House
Washington, D. C.
Attachment
Regraded Unclassified
SECRET
DATE of - EDIPANT - THE increased all or - ", uni
Indents - Sales - -
DELIVERY Data - = and
he
Item
Unit
jed.
Mate Available
Kale Available
Percent of
Metto of
Balance to be
Comments
tarel
Protect
et Kill in U.S.A.
et Mill to C.C.A.
3rd Proto
Actual
Professor
Item
Production
Ang. 1, 19k3 -
July 1, 1943 -
Program
Seliveries to
- of Sept. 1, 1963
To.
Program
- 31. 1943
Ang. 31. 1943
Completed
Prot.Sched.
To Complete
- of
(Prot.Sched.-100)
3rd Protocol
Sept. 1, 1943
Prod. Program
METALS
The fairt Protocol
and has tem formally Increased
from 35,750 S.T. to 39,180 1.2. la
eMities, - effort Le being male
.
(Inpt - Patricated)
S.T.
39,120
6,328
17,600
R
1St
26,570
to - by 2,2%0 s.r. the earthly
called for by this remit-
mail. Deliveries to fale
7,290 S.T. primary 1agst, 2,74 1.7.
segundary lagal, and 2,576 I.T.
fabricated almism,
%
Final
&
PLE Fishel
8.7.
3,600
150
soo
17
100
3,000
inpart chipments - to
companate for July
A total of 600 I.f. of nichal la
.
Find la Food Serve
1.7.
mossi scrap has has affored, trail
-
R
50
-
I
(50
the V.I.S.B. - not gst inficated
that is Sestres se Sale 11. The
- nate available la depail -
ordered for experiental persons,
Contated sichal inliveries la date
e
Vichal is Steel and Other
I.T.
2,100
consist of as 1.1. la stati; as 1,7.
185
NOT
17
100
Protects
1,993
is sictrow size and wirig: 66 1.7.
La musro-mickal string - 10 I.f.
la sictross squares,
,
1,9.
4,000
335
6ra
17
100
3,330
Biostrulytie - figure refer
to copper castalant is nrima -
terials requiring regular with are
€
Comer, Bestralytie
1,7.
(171,400)
(6,709)
being applied the De-
(13,854)
(11)
(65)
(107,532)
liveries is date taclude 4,372 4, I.f.
restatant is exper bace allays;
1,17% s.f. contalad is - pois
and tubent 95 S.T. contained is 11-
motal and 4,379 N.T. outstand is
alre will products,
SECRET
- - - - M
284
Regraded Unclassified
SECRET
Successive Fundale laty - M
Tree
Tax
yi
Tale available
Rade
Percent of
of
to be
toral
et 9433 in C.B.A.
at min Lr, C.S.A.
374 From
attual
Produced
Item
Production
Add 1, 1943 - -
July 1, 1943 -
Program
Deliverier to
-- of Test. 1, 1943
To.
Program
31, 4353
- 34, 1943
Completed
Ts Complete
-- of
3rd Protocol
lest. 1, 1943
Fros, Program
expes (Contimed)
States of copper tase alleys have
been rebuted to & reasonable write
7
3am Alleys
1,1,
107.520
5,993
5,134
#
4
N,M
the level through Increased un-
lage: production is therefore
currently beling memberated.
.
Experies
1.7.
4,03P
336
672
17
100
3,30
,
line
S.T.
13,40
1,120
2,2%0
17
100
11,700
States have been referst to -
11
Cooser Soote and Tabes
1.7.
15,000
able working levels and protection
ns
1,17%
.
ky
13,6%
is currently being accularated.
the U.S.B.R. has ast -
quality production et the full rate
called for ky the Protocal.
E
Special Aller
S.T.
26)
Only very small qualities of special
,
11
.
K
Vires
258
me-ferrous aller vires have been
requisitional be date,
IF
Wire
1.7.
538
11
107
20
in
431
The production program above is for
9%
Cotal
S.T.
80.5
21
to
the first half of the Protocol period
is
157
40.5
only: the ratto of actual Seliveries
to the Protocol schedule - there-
fare, been adjusted to taxe this Le
in account.
Total Retain
(Resinting Them 6,
1.1.
189,779.5
15,124
77.700
15
..
Commer, Electrolytic)
162,294.5
FERIO-ALLOTS
The U.S. has offered 4 resir 18
1"
Perrontlicio
1.1.
-
o
c
1.1. of farrosilican ant - 1.1.
-
-
-
if ferrochrose per anth, but by
agreement this offer la to because
11
E.T.
-
o
o
effective only shes statio tall an
-
-
-
U.S.A.R. account an retured " two
nonths' requirements. AL present,
*tocks Total more than fine
Total Ferra-allige
.
o
e
regiremente ent as lifting are
1
-
-
currently taking place, is couse-
surve, no allocation von rate is
lagat and - la planned for the
Impliate future.
SECRET
- - being M
28
8
Regraded-Unclassified
SECRET
- - M
-
Item
Out
11
Rate Available
Rade valiable
Percess of
Ratio of
Primate le be
total
Pretual
at will La U.S.A.
Commits
et -111 la P.S.A.
3rd. Prat.
Actual
Product
Item
Probaction
Aug. 1, 1943
vary 1, 19-3 -
Progres
Selivarias to
Tax
-- of lest. 1, 199
the
Area n. 19/3
- 11, 1543
Comleted
to Comiste
-- of
3rd Protocol
Sect., 1. 1943
Pred. Program
ACLOT TTEXL
16
Policied Drill Rate
»
ne food
S.T.
%
#
17
14
106
19
o
Other Aller
1.7.
is
9
11
7
142
you
17
ne feel Stast
1,7.
1,180
N33
916
R
118
3,9%
1°
Tgel Risel
3
Alley n?
1,7,
672
47
115
17
100
557
e
Alley DN
1.7.
ST2
37
or
15
16
58%
D
Other Allego
I.T.
1.30
yes
1,02%
30
17€
.
Die Viscis
S.T.
2,358
1,166
o
e
o
o
1,480
19
Cold Fistehel lare
1.7.
10,0%
EM
la adjusting Third Protosal profis-
1,765
16
gt
9,133
Use programs ** shipping mossibili-
ties, the C.B.B.A. selected . total
R
13. Aller here - Billets
1.7.
67,569
1,905
of only 300,000 s.r. of steel -
7,056
10
99
60,523
ben and alleg) la be product - the
account lasted of the 710,000 S.T.
:
Statement Start
offered by the U.S. A detailed no-
&
Therte
S.T.
2,872
30
30
1
5
vorking of the stest program to -
7,64
,
Strie
S.T.
3%
265
421
fleet this relection to currently
125
735
e
3are
S.T.
(es Immed
756
in
41
in where, Pending completion of
5
26
715
this, - - evaluation of -
gross made toward falfilment of the
-
Wire
riesi commitment La pensible. m
&
Bell Vire
1.7.
6,563
275
E
1
a
gross against the all program
3
Strie
1,f.
6,119
è
97
113
la stows, however, in order is 1a-
-
e
Other Alleg
1.7.
&
(113 Basees)
75
dinate La . general way the trand
191
.
-
(191 incose)
of production.
F
Steel Alley The
à
185 RL.
S.T.
99%
0
0
0
o
,
L/S Chinger
1.7.
1,625
99º
793
1,5%
If
104
0-8
Certin - Floe Siven
S.T.
o
2
1,079
5
,
1
1.1. Nail Bearting Tabee
s.r.
5.376
(9 Income)
o
e
0
e
5,376
H
Signature Steel Wire
s.r.
o
69
764
-
-
(MA Income)
X
Nertal Allay Vira
1,7,
o
702
261
-
-
(26) Invoice)
Total Aller Steel
1.7.
114,603
7,469
14,322
12
71
100,251
SECRET
- - - - M
286
Regraded Unclassified
SECRET
- - - -
Pro
Item
Thalk
In
Kate Available
Hinte Available
Percent of
Rette of
Palance to be
Commente
toest
Protocol
et =111 in 7.5.A.
at La 7.3.A.
Va Proto
actual
Protoced
Item
Protaction
- L. 1943 -
any 1, 1343 -
Program
Deliveries to
- of Sent, 1, 1543
1..
Program
Ave. 9, 1543
402. 3., 1943
Completed
Prgt. Sched.
To Complete
en of
3rd. Protocol
Sept. 1, 13%3
Prot. Program
CARROT STREL
ins-f
Nalla, Accossories missing Other
S.T.
100,770
11,837
105,049
11
S
375,221
Ballway Faterial
10
Couser Class Strts (Pressal)
N.T.
11,120
o
o
o
e
11,170
16
Pints Carbon Tool Stand and
1.7.
5,81
522
1,089
16
5.
5,715
. 198
Drill Red
Sex alley Steal for
199
Plate Carbos Ballet Care
1.7.
11,200
1,970
4,567
41
Z
6,633
/
Timelate
1.7.
60,000
5,776
6,417
11
is
53,383
Other Cerbon Steal
s...
36,000
3,7%
10,157
K
165
25,03
Total Carbon Steel
1,7.
50.397
11,000
67,509
17
71
477.000
CHEMICALS
V6
Phenel
U.T.
12,000
750
750
5
35
11,750
18
Ethylene Giyesl
8.7.
3,360
o
o
o
c
3,360
by
Nethers3
S.T.
6,720
o
o
o
o
6,770
M
Protrosize
3.7.
6,720
e
e
o
o
6,770
Deceise et excessive stacks, alle-
GIAL
Giycerine
1.7.
5,720
1,657
1,857
M
us
4,863
nations of shemicals are still -
lag hald to . states La all -
except glycerine, causile soda and
6141
Casatic Soda
1,7.
40,320
9,668
10,179
*
153
29,051
ethy) aleobal.
1%
Sthyl Alcohol
3,1,
107,520
16,114
23,0%
27
179
13,664
6185
Acetane
1.2.
6,720
5
657
10
59
5,063
6ta
Other Chestrais
s.r.
17,096
452
75%
6
35
11,150
Total Chestrels
1.7.
302,176
23,477
96,20
19
112
163,889
SECRET
- - - Colop M
287
Regraded Unclassified
SECRET
Insured Passacia - Imp le
Pro-
Date
East
5
Fair evailable
Lade Available
Percent of
total
Ratto of
et 1111 la U.S.A.
Talance La be
at R:11 Le U.S.A.
Item
trd. Prot.
Commete
actual
Protuction
4vg. 1, 1943
July 1, 1941-
Produced
Prime
/
Juliveries to
Fragra
- S1, 1363
Mid. 31, 1943
Comisted
- of Sept. 1, 1943
Prat.Schei,
% Complete
- of
(Pres,Sched.=100)
3rd Protocol
Seel, 1, 1313
Prot. Program
MARI ? 47 REMARKS CARLE
1.
Marine Cakle
D.
1,200
43
133
1:
65
1,067
Deliveries of et
cable shows are still apainst -
tracts carried over fre the Second
Protocol period. Angust skipmente
of minurise cable marked virtual
completion of . Trans-Compter
#
Calls
d.
600
119
115
20
project which - give under vap
118
MI
is Foresber, 1942. Completion of
use wajest, which case le more
the $1,500,000 is value sal with
involved rach naterial end squis-
mest Sesides cable, Le experied to
Total Marine and
DL
1,800
162
252
facilitate greatly see of the
1%
Cable
e
1,54
Samptan Tra in the movement if
products late the 0.0.3.1.
M/D an RELATED CARER
7%
Torglated Cable end Vin
S.T.
21,516
1,7%
(Conner Contact)
4,303
&
TM
17,713
Power and related cable probaction
7%
Somer Cable and Wire
9.7.
70,000
a
6
has been est considerably below the
Conser Content)
-
-
19,994
Protocol rate because of
enstoard stocks (1.0. approximately
60,000 1,7, gress weight " if
Total Fover end Related
S.T.
41,516
1,756
1,309
10
August 1.1
Sable
5)
17,707
HISCOLLATION PATERIALS use
1
The entire that filser countract
3
thert Filer
S.T.
1,000
I
-
53
18 covered by contracts carried over
112
N71
from the Second Prisol period.
Prosect schedules call for the -
sistion of these by December,
=
Partment Pener
1,7.
1,6%
o
:
0
e
1,680
RIA
Condater Person
5,7,
146
o
6
o
e
By *emisitions have been submitted
146
to date for paper probate,
19
Cigarette Pener
1.7.
3%
a
=
0
9
13E
The offer of "other materials is
. mine offer and la la he used
,
Other Materials and Their
. 5,000,000
-
Propects
-
saly to cover regula.
-
-
Orders to date total only . Trae-
tion of #5,000,000 and deliveries
against there have been slight -
cause of load factors,
SECRET
- - - Expirap M
2
Regraded Unclassified
SECRET
- - Imp -
he
tes
Date
3rd
Nate Available
Rate Available
Percent of
Bahin of
taes?
Protocal
Inlance to be
at la P.S.A.
at Mill - P.S.A.
Commate
3rd Prot.
Actual
Item
Protection
Protuced
1, 1963 -
itly 1, 1963 -
Program
Deliveries le
To.
Program
has 2. 1943
- of Seut, 1, 1993
400 31, 1943
Presisted
Prot,Schei,
To Complete
- of
3rd Protocol
Sent. 1, 1943
Prot. Program
INDUSTRIAL AND RELATED EXPIRYENT
1%
Consted Carbita Time and
$
3,000,000
182,042
51,917
is
a
Marks
2,544,00)
Regulations for à Large part of the
199
Smill Delting Tools
a
15,000,000
1,106,655
offered quantities of these Items
1,756,250
12
71
13,763,509
have not pet been forwarded se the
1.1.3.
150
Fermaring Tosts
a
3,000,000
23,466
201,617
7
the
2,799,383
Eyes
Abrosive Profects
.
4,000,000
491,526
674,896
17
130
3,325,104
August machine teal delivery date
a
Rechine Tosls
a 120,000,000
5,713,200
are based - Interplete reports
11,209,250
is
106
98,590,750
the fobricators and will probably
be witject to - appreciable supvent
revision when All information is
reselved.
Et
Rectrie Pursices
I 12,000,000
05,904
Regulations for . large part of
99°,760
.
47
11,007.200
the electric fersaces offered have
and yes been forwarial La the V.P.A.
or the $16,000,000 affered, the
V.P.S. expected $11,000,000 to be
used to cover . rail mill, It has
been facidad by the O.L.L.A., -
mar, that mistellaneous rolling
still seutneent should be mistituted
for the rail sill, to date to -
64a
Valling mills and
a 16,000,000
9,729
$9,645
per of eshetituta equipment has
1
6
15,910,355
lass forwarded to the V.P.I. Detil
such . program has loss Curvarded
and restruel from the standpolat of
production fassibility, and will
requisitions are claimat and -
tracte production cashet
legis. Progress spinst this offer,
therefore, has boan, and will incre-
willy costime to be, slow,
Esa
Process, forms, Family
- 30,000,000
1,565,100
2,886,500
10
1 1 5 I
- Related Instruct
"
27,113,500
prolisinary reports and will problem
by be encloyed to - approciable
vard revision.
SECRET
- - - bing M
28
Regraded?Unclassifi
SECRET
- Possible - Culemps -
Pro-
Item
Dait
3rd
Mate Available
Trie desidable
Priment of
loss)
Matto of
Protent
at MILL in U.S.A.
balance to the
at HILL In U.S.A.
3rd Prot.
Esemente
Item
Actual
Productive
ing. 1, 1963 -
July 1, 1943 -
Protuces
The
Program
Deliveries 1d
Mass
Ang. n, 1943
- 3, 1943
as of lest. 1, 1945
To Comlete
-- of
3rd Protocal
Sest, 1, 1943
Prot. Program
AND RELATED
("estionet)
Requisitions against the Third Pro-
44
Wire Prestage Internet
. 2,000,000
,
local affer lass and pt less for-
o
o
P
2,000,000
varded to the 123. It les less
therefore, se gl -
dactime under w/.
is
Tarlour Intestrial
$ 170,000,000
13,300,362
54,19,113
411 requisitiess for Items in this
20
us
95,565.007
estagory have been claired and -
tracts placed for - lies, he
farties is considered antisfactory.
7a - Thirt Protossi requisitions
56
Control Inst. est Testing
I
1,700,000
31,969
304,653
have less forverted to Like V.P.3.
14
106
1,395,997
4a date, A large part of the pre-
one las, therefore, miss per been
pites under -
69-70
Anti-Priction levings
I 15,000,000
969,691
1,826,867
12
n
13,173,133
The Block Signal System offered to
in
Floor Signal System
$ 14,591,500
15,376
28,016
covered by one order. Substantial
e
o
13,563,48
delivaries against this are not -
sected to begin will awiy 1544.
The entire power program offered Le
now under requisities. Nost -
tracts here Seen placed and major
to
Power
I 15,000,000
6,577,950
14,078,974
19
Items have been worked into -
112
60,923,076
faction schedules, Orders carried
over from the Second Protocol perial
an expected to be completed La the
next two - deliveries
spinist seu orders are schedniel to
begin 1. December,
Total Infustrial - Related
$ 131,299,500
94,376,666
69,135,649
16
$
362,155,851
SECRET
- Public - being M
2
Regraded 3 Unclassity
SECRET
- - 1 las
Pra-
Itm
Unit
3rd
Sale Available
Rade Available
Percent of
Letio of
tocal
Protucal
Valance 11 To
at mill in U.S.A.
Commate
at RUI is U.S.A.
let Prot.
Item
Actual
Productice
Protoral
Ave. 1, 1943 -
July 1. 1)43 - -
Program
to
Yo,
Prigram
Ang. 31. 1943
or of Sept. 1, 1943
Aug. a. 1543
Completed
Prit,Schet,
To Complete
as of
(Prot.Schet.=100)
3rd Protocol
Sept. 1. 1943
Prot. Program
MISCULLATION LOWER ITMS
67A
Abrasive árais
1.1.
4,000
170
967
>
141
3,033
6KA
Grankite Electroles
1.7.
5,757
680
1,014
is
106
4,743
6ml
Other Draphite Goods
S.T.
1,691
19?
Zip
1%
52
1,450
6ac
Granhite Powder
S.T.
1,120
185
316
28
165
RA
74
Tires, Tabes, Other Butter
s.r.
40,370
1,5%
7,852
20
115
Protucts (Rubber Content)
your
4
Retailic Cloth and Bereez
,
1,000,000
25,463
Tery few Thirt Protocol requisitions
12,85
13
76
467,075
for metallie cloth and screen have
M yet been So the V.P.B.
The C.S. has offered to empoly -
" $25,000,000 of Beargeacy Aquip-
sent provided the Surist Generament
certifies Lise need for particular
e
Endoment
. 75,000,000
Items totaling this - and -
wided specifications are moneptable
to the V.P.S. lo far only . fee -
misitions have been placed under
this category. Fecause of load tm-
tara, as deliveries Look place
against there is August.
Var Production Poard
Foreign Division
Texter est Analysis Branch
14, 1943
SECRET
I I I I 3
291
Regraded Unclassi
292
MFG
Celcutta
This telegram must bE
paraphresed before being
Dated September 20, 1943
comminicated to snyone
other than a Governmentel
Rec'd 3:20 p.m.
agency (BR)
Secretary of State,
Washington.
PRIORITY.
1210, September 20, 3 p.m.
FOR SECRETARY OF THE TREASURY FROM ADLER
OnE. Arrived Calcutta September .18. Used
short time in Bombay to get cross section of
Indian unofficial opinion on monetory situation
and tc study bullion market.
Two. Sending summary general observations
and conclusions in separate cable. Material col-
lected En-route by pouch. Shall finish full
report by the End of WEEK and also forward by
pouch. Expect to return Chungking on 27th.
Three. US Army medical Examination in
Calcutto gives me cleen bill of health.
PATTON
MRM
Regraded Unclassified
293
NOT TO BC RETRANSMITTED
COPY NO.
13
BRITISH MOST SECRET
U.S. SECRET
OPTEL NO. 310
Information received up to ton A.M. 20th Soptember,
1. NAVAL
Last night our Constal forces off the Dutch Const torpodood
a large ship and sot two trawlers on fire. A notor gun boat was
damaged and had two casualties. One of H.M. Frigatos was torpedood
carly this norning while oscorting nn outward Convoy South West of
Iceland (C).
2. MILITARY
ITALY
To 1600Z 18th. Fifth Army. The Salient on the Rivor Sele
has now been consolidated and our advance is continuing North
Eastwards. A slight advance has boon nade North of Salerno, lfuch
enemy novement Northwards from Battipaglin suggests that ho is
thinning out in the Southorn sector of the front. EighthArmy.
Satisfactory progress continues our loading troops advancing
Northwards on Potenza are noaring Corleto and firm contact has been
established with the Fifth Army. Taranto area. Our troops are now
in possession of Gioja whenco the onony withdrow his rearguard on
17th. Tatrols have reached Trani and Potonza.
RUSSIA.
See D.D.M.I.'s tologram to Ililitory Attacho. Russians are
stendily approaching the Dniopor along the greater part of its longth
and it is becoming increasingly likely that the Gormans will withdraw
to the West bank botwoon Orsha and Zaporozho. This is first good
defonce lino to which they can now retire and they will doubtless
try to stand here. Further South they will probably try to hold the
lino Zaporozho - Melitopol to protoct Crinoa although country hore
unsuitable for defence.
3. AIR OPERATIONS
WESTERN FRONT
19th. Snall scalo attncks by oscorted Hodium and Fightor
bonbers were nade on airfields in Northorn France and low countries.
Enony casualties in the air 6, o, 6 ours 3 Spitfiros.
ITALY
17th/18th. Wellingtons dropped 119 tons on an airfield in
Rône area. 1 missing. 84 Modium nnd Light bombors attacked Torro
Annunziata and conmunications in the battle area.
18th. Heavy Bonbers dropped 125 tons on Vitorbo airfield
and 123 Medium Bonbers attacked two other nirfiolds noar Rono.
Mirfiolds noar Foggia wore attacked by Lightnings of which three are
missing. Dodocanose 18th. Eneny aircraft nade three attacks on
Kos Island destroying three Transport aircraft on the ground. Fivo
JU 88 and two III. 109 were destroyed by Spitfiro of vi.ich two are
missing.
CORRECTION TO OPTEL 309
For "(5 corrupt groups)" in third line from botton of page
road "dropped and 57".
Regraded Unclassified
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"ocrText": "DIARY\nBook 665\nSeptember 17-20, 1943\nRegraded Unclassified\n- B -\nBook Page\nBrooklyn, New York\nSee Financing. Government: War Savings Bonds\n(3rd War Loan Drive)\nBusiness Conditions\nHaas memorandum on situation, week ending September 18, 1943 -\n9/20/43\n665 234\n- C -\nCanada\nQuarterly statement and forecast of Canada's holdings of\nUnited States dollare - - 9/17/43\n126\nCorrespondence\nMrs. Forbush's mail report - - 9/17/43\n94\n- 1- -\nEccles, Marriner S.\n\"The Dual System of Banking\": Address before National\nAssociation of Supervisors of State Banks, Cincinnati,\nOhio - 9/17/43\n115\n- F -\nFinancing, Government\nWar Savings Bonds:\n3rd War Loan Drive:\nSee also Speeches by HMJr in St. Louis and New York City\nLag in sales discussed by HMJr (in St. Louis) and\nBell - 9/17/43\n1\n(See also Book 666, page 1- - 9/21/43)\na) Federal Reserve Bank of St. Louis report\n11\nb) Brooklyn, New York, set-up described by\nScripps-Howard newspaper woman: See Book 666,\npage 6\n\"The Road to Victory\": Assigned to Treasury by its\ncomposer, Private Frank Loesser - 9/17/43\n90\na) Loesser thanked - 9/29/43: Book 668, page 80\nJohn Golden thanked for cooperation - 9/20/43\n230\n- G -\nGold\nSee Lend-Lease: United Kingdom\nGolden, John\nSee Financing, Government: War Savings Bonds\n(3rd War Loan Drive)\nRegraded Unclassified\n- K - -\nBook Page\nKeynes, John Maynard\nSee Post-War Planning: Currency Stabilization\n(United Kingdom)\n- L -\nLend-Lease\nUnited Kingdom:\nGold and dollar figures for August - 9/19/43\n665 189\nGold and dollar balances and external liabilities:\nChancellor of Exchequer provides fuller information\n(confidential)\n268\nLoesser, Frank\nSee Financing, Government: War Savings Bonds\n(3rd War Loan Drive -\n\"The Road to Victory\")\n- M -\nMissouri, St. Louis\nSee Speeches by HMJr\n- N -\nNew York\nSee Speeches by HMJr\n- P -\nPost-War Planning\nCurrency Stabilization:\nUnited Kingdom: Chancellor of Exchequer-HMJr\ncorrespondence concerning visit of Keynes - 9/20/43.\n250\n- R -\n\"Road to Victory\" (Song)\nSee Financing, Government: War Savings Bonds\n(3rd War Loan Drive)\n- S -\nSt. Louis, Missouri\nSee Speeches by HMJr\nRegraded Unclassified\n- S - (Continued)\nBook Page\nSpeeches by HMJr\n3rd War Loan Drive:\nSt. Louis, Missouri, before Chamber of Commerce and\nWar Finance Committee, September 17, 1943:\nReading copy.\n665\n16\nWalter Head's introduction\n14\nDinner program\n13\nDrafts\n26\nNew York speech discussed by Treasury group - 9/20/43\n200\na) Itinerary: See Book 666, page 199\nb) Luncheon guests at Federal Reserve Bank: Book 666,\npage 202\nc) Speech: Book 666, page 203\nd) War Plants checked on sales - 9/29/43: Book 668,\npage 82\n- U -\nUnited Kingdom\nSee Lend-Lease\nII Post-War Planning: Currency Stabilization\n- W -\nWar Savings Bonds\nSee Financing. Government\nRegraded Unclassified\n1\nSeptember 17, 1943\n10:55 a.m.\nHMJr:\nThey're terribly pessimistic. The papers greeted me\nwhen I got off, \"I suppose you came here because the\nthing's in a slump.\" Well, I don't know what's the\nmatter but before I leave town I'm going to find out.\nSomebody has been kidding somebody. I don't know\nwho. But certainly -- Walter Head here says, \"Well,\nwe don't know -- we've got a wonderful organization\nbut we're not making the sales.\"\nDan\nBell:\nUh.\nHMJr:\nI talked to the man at the Federal Reserve and\nneither Chester Davis nor the man in Kansas City\nare on the Job.\nB:\nYes. They're probably at the Bankers' Convention.\nI don't know.\nHMJr:\nWell, God damn it! Why go to a Bankers' Convention\nwhen we're trying to sell stuff? I mean, their job\n1s supposed to be on the bridge and not out -- they\nsay Chester Davis is in Washington on something to\ndo with post-war planning.\nB:\nYes, he's on that committee.\nHMJr:\nWhy isn't he on the job? And the fellow from Kaneas\nCity is in New York.\nB:\nI see.\nHMJr:\nMaybe it's the Federal Reserve that's throwing us\noverboard. I don't know but there's something\nwrong. Now, this 18 what I want you to do, Dan.\nHello?\nB:\nYes.\nHMJr:\nI want you to spend the rest of the day on the\ntelephone calling up everyone of the Federal Reserve\npeople and finding out how they think the thing is\ngoing and what they think is wrong.\nB:\nAll right.\nHMJr:\nNow, I've got the fellow from the Federal - -- I don't\nknow what his name 16, coming to Bee me in an hour.\nRegraded Unclassified\n2\n- 2 -\nB:\nHitt?\nHMJr:\nWho?\nB:\nHitt?\nHMJr:\nNo, he's not here either.\nB:\nAttebery?\nHMJr:\nAttebery.\nB:\nYeah, that's it.\nHMJr:\nNow, Attebery -- Ted tells me it's the little fellow\nthat isn't buying -- Attebery tells me it's the big\nfellow that isn't buying.\nB:\nI see.\nHMJr:\nBut, I want you to do that and then I want Gamble\nand I -- to do -- to order -- uh -- the fellow at\nthe head of our Labor Section\nB:\nHoughteling.\nHMJr:\nHoughteling -- to ask the Federal -- the C.I.O. and\nA.F. of L. to make a survey of the country for me.\nHello?\nB:\nYes.\nHMJr:\nAnd I want that back by Monday if possible. Now,\nwhen they make that survey they can kill two stones\nfor -- two birds with one stone -- I want them to\nbe given a questionaire, \"How would the labor people\nfeel on the alternatives -- one, of the Social Security\nvs. a post-war credit, you see?\nB:\nYes.\nHMJr:\nAnd when they send the thing out on the bond, they\ncan send it out on the other thing. Now what they\nsay here is -- another thing they say -- it's this\nSeptember 15th tax thing which has bothered everybody.\nB:\nUh huh.\nRegraded Unclassified\n3\nM 1 I\nHMJr:\nBut it's in an awful slump here, Ted.\nTed\nGamble:\nYes.\nHMJr:\nYou didn't tell me that before I came here. I don't\nknow whether you knew it or not.\nG:\nI certainly didn't know that.\nHMJr:\nBut they say that the people are just not coming\nthrough. Head 18 an all-time low.\nG:\nYes.\nHMJr:\nHe said he talked to you yesterday. Now for God's\nsake, the one thing (interference on the wire) Hello?\nG:\nYes?\nHMJr:\nI don't want to be kidded. I've told you that ten\ntimes.\nG:\nWell, you know everything that we know, Mr. Secretary.\nHMJr:\nThen you don't know what's going on, Ted, and it's up\nto you to find out.\nG:\nWell, I can tell you this much.\nHMJr:\nYou've been sitting there and telling me how lovely\neverything is. I've told you again and again I want\nto know. There's something definitely wrong in this\nbig section here. Hello?\nG:\nYes, I'm listening to you.\nHMJr:\nAnd it's up to you -- you said you talked to Head --\nHead said he talked to you yesterday.\nG:\nI talked to Head yesterday.\nHMJr:\nYeah.\nG:\nThat is correct.\nHMJr:\nDid he tell you things aren'\nRegraded Unclassified\n4\n- 4 -\nG:\nHe did not tell me that. No.\nHMJr:\nWell, anyway, let's get Houghteling on this job and\nfind out those two things.\nB:\nThis -- that would be impossible, wouldn't it, to get\na survey through by Monday?\nHMJr:\nWell, let's get it started.\nB:\nAll right.\nHMJr:\nLet's find out from the Local Unions how they think\nthe thing 18 going. Is the thing going -- I don't want\nto plant any defeatism in their heads -- let's just\nask them how they think they are going. Are they going\nto make their plant quotas?\nB:\nI see. (Aside: You got that, Ted?)\nG:\nYes, I have that.\nHMJr:\nHello.\nG:\nYes.\nHMJr:\nBut the other thing -- Gaston and Paul could prepare\na questionaire on this question of Social Security VB.\nthe post-war credit. Hello?\nG:\nYes.\nHMJr:\nNow Gaston and Paul could prepare that for you.\nG:\nYes, they're listening.\nHMJr:\nHello.\nB:\nThey're listening to you.\nHMJr:\nAll right. Now, I've got the head -- Mr. Roberts, the\nhead of the paper coming here -- Mr. Head is here -- and\nI'm going to ask him what he thinks 18 the matter. He\nowne the radio station here.\nB:\nUh huh.\nHMJr:\nThen in a half an hour I've got C.I.O. and A.F. of L.\ncoming and then at 11:00 o'clock Attebery of the Federal\nReserve. When I get through I ought to know something.\nRegraded Unclassified\n5\n- 5 -\nB:\nUh - you don't want me to call St. Louis?\nHMJr:\nNo.\nB:\nYou're going to take care of that?\nHMJr:\nNo, but....\nB:\nI'll call all the rest of them.\nHMJr:\nsays on their war loan the banks have to increase\n-- their war loan account.\nB:\nYou mean increase their designations.\nHMJr:\nYeah, because they're handling 80 much business.\nB:\nUn huh. Well, that is simple.\nHMJr:\nHe thinks it's the big subscriptions which aren't coming\nin.\nB:\nUh huh.\nHMJr:\nAnd Ted says it's the little ones which aren't coming\nin. But that's what I'm out here for and I'm going to\nfind out and when I find out I'll pass it along to you\nfellows. But let me handle St. Louis while I'm here\nand that goes for Gamble and for Bell both.\nB:\nYes, okay.\nHMJr:\nI mean -- I don't want Ted to suddenly get on the phone\nand barge in on this thing now as long as I'm here. Ted.\nG:\nI beg your pardon?\nHMJr:\nI don't want you to get busy on the phone and do any\nchecking in St. Louis while I'm here.\nG:\nNo. I understand.\nHMJr:\nAnd - I mean let me handle this situation.\nG:\nYeah.\nHMJr:\nAnd 8.8 soon as I've got it I'll let you know what it is.\nG:\nYes.\nRegraded Unclassified\n6\n- 6 -\nHMJr:\nIf I find out.\nG:\nYes.\nHMJr:\nAnd - but we've got two weeks to go and let's get -\nlet's get the facts.\nB:\nAll right. Well, I'll call all of the Federals except\nSt. Louis today.\nHMJr:\nAnd you understand, Ted, please don't check up on me\nout here, now.\nG:\nNo, I understand that.\nHMJr:\nBecause -- let me handle this and I'll let you know\nwhat the facts are.\nG:\nFine.\nHMJr:\nAnd, please, if a situation similar to St. Louis is\nanywhere else in the country, please let us know.\nG:\nWell, I think you ought to know that I talked to\nBurgess last night.\nHMJr:\nYeah.\nG:\nAnd he had been over to the bank in the afternoon.\nHMJr:\nYes.\nG:\nAnd the Federal Reserve Bank in New York advised him\nthat they were between two and three days behind on\nE Bonde, and that their guess was that every issuing\nagent was anywhere from two to five days behind.\nHMJr:\nWell, now Head talked with Burgess and D'Olier in\nNew York yesterday.\nG:\nYes.\nHMJr:\nAnd both -- I'm reporting only what he tells me....\n5:\nYes.\nHMJr:\nboth Burgess and D'Olier told him that New York\nand New Jersey were not going well on the little\nbonds.\nRegraded Unclassified\n7\n- 7 -\nG:\nYes.\nHMJr:\nNow, maybe this is a local situation, Ted, and I hope\nand pray that that's what it 18. See? Hello?\nG:\nYes, I'm listening to you.\nHMJr:\nAs soon as I have the facts, I'll call back and give\nyou the facts.\nG:\nYes.\nHMJr:\nBut, we're all together sink-or-swim and I'll do the\nbest I can and you've got to trust me to handle the\nthing out here.\nG:\nFine.\nHMJr:\nAnd as soon as I have it, I'll let you know but let's\nget -- through organized labor let's find out those\ntwo things. I mean, if the President says to me --\nthis is for Paul and Gaston -- \"Well, how does organized\nlabor feel about 8. post-war credit?\" I'd like to be\nable to tell him.\nG:\nFine.\nHMJr:\nAnd how they feel about Social Security -- I want to\nknow. I just don't want to have what Paul found out\nin St. Louis alone.\nG:\nYes.\nHMJr:\nThat's not enough.\nG:\nYes.\nHMJr:\nNow, does anybody want to contribute -- I'm determined --\nI'm not angry -- I am a little upset but we'll win the\nway we always have but it takes hard work.\nG:\nWell, I think you ought to know, Mr. Secretary, so far\nas our people in the field are concerned, we're handling\nthem as though we have 9/10th of the job jet to do and\nhave been every night sending them information. We\nwired them last night that the whole success of this\ndrive depended on their doing the job on the E Bonds\nand asking them personally to give us a report on it.\nRegraded Unclassified\n8\n- 8 -\nHMJr:\nWell, in the meantime my speech is all -- I'm holding\nup my whole speech until I can find out what 1s what.\nG:\nBut I think you also ought to know that at this stage\nof the 2nd war loan drive we hadn't reported 80 much\nas a single E Bond sale for the 2nd war loan.\nHMJr:\nWell, that don't seem possible.\nG:\nSir?\nHMJr:\nThat don't seem possible.\nG:\nWell, I'll tell you when it started - our first\nreporting started on the 26th day of April. I have\nthe report right in front of me.\nHMJr:\nYes.\nB:\nYou mean the increase.\nG:\nThe increase. The 26th day of April before we showed\nany response to the reporting of individual sales.\nWe had a four hundred million dollar week that week\non E bonds.\nHMJr:\nWell, here in St. Louis the banks say they are current.\nG:\nSays they are what?\nHMJr:\nThey are current.\nG:\nThey are current?\nHMJr:\nYeah.\nG:\nWell, they may be current, but the issuing agents may\nnot be current.\nHMJr:\nWell, this man Attebery is calling up moving picture\nhouses, drug stores and everything and then he 1s\ncoming out to see me.\nB:\nThere is bound to be a lag in the E bond -- in the\nissuing of the savings bonds.\nHMJr:\nI hope that everything is lovely, but I'm going\nto find out. That's what I'm out here for.\nRegraded Unclassified\n- 9 -\n9\nG:\nWell, there's no harm in that, sir, certainly.\nHMJr:\nWhat's that?\nG:\nI say that there -- that's certainly the thing\nto do.\nHMJr:\nAnd as soon as I've got the good or bad news, I'll\ncall back.\nG:\nWell, we're going on the assumption here, and\nhave to go on the assumption, Mr. Secretary, that\nit's bad.\nHMJr:\nAll right.\nG:\nSo far as the E bonds are concerned until they\nstart to be good.\nHMJr:\nOkay. All right.\nB:\nWell, we may have something to report when you\ncall back.\nHMJr:\nAll right.\nB:\nFrom the other districts.\nG:\nNow, on this O.W.I. matter\n....\nHMJr:\nYeah.\nG:\nit'll be in about fifteen or twenty minutes\nyet before I can give you that\nHMJr:\nWell, phone it in to Fred Smith.\nG:\nbut I'll phone it in to him the minute we get it.\nHMJr:\nRight.\nG:\nAll right, sir.\nB:\nHello?\nHMJr:\nRight.\nB:\nGaston wants to know if you want him to do\nanything about your speech.\nRegraded Unclassified\n10\n- 10 -\nHMJr:\nI can't hear you.\nB:\nGaston wants to know if you want him to do\nanything about your speech at this time.\nHMJr:\nI -- I'm sorry -- I don't know what you're saying.\nB:\nGaston\nHMJr:\nYes.\nB:\n....want to know -- if you want him to do anything\nabout your speech.\nHMJr:\nNo.\nB:\n....at this time.\nHMJr:\nNo - no, the speech is not written yet.\nB:\nAll right.\nHMJr:\nNo.\nB:\nThen you'll give him instructions when you want\nhim to work on it.\nHMJr:\nRight. All right, ask Mrs. Klotz if she'll go to\nher room.\nB:\nAll right. She's going.\nRegraded Unclassified\n11\nFEDERAL RESERVE BANK\nOF\nST. LOUIS\n(2)\nSeptember 17, 1943\nHonorable Henry Morgenthau, Jr.\nSecretary of the Treasury\nPark Plaza Hotel, Room 1504\nSt. Louis, Missouri\nfor dear Mr. Secretary:\nWe have contacted a number of the larger war plants\nissuing E Bonds and with one exception, which will be brought\nto the attention of Mr. Head, sales are running well ahead of\nthe April Drive.\nNone of the plants contacted knew anything about quotas.\nOne stated sales will be two to three times larger than during\nthe Second War Loan Drive; another expects sales to be far above\nthe April Drive; another feels confident sales will show consid-\nerable increase over April sales; and one stated that they would\nbe ten times greater than in April.\nAll of the plants are accounting to us regularly and the\nbacklog of orders should be no more than normal, having in mind\nincreased sales.\nSince talking with you this morning, we have compiled\nfigures which show that sales of E Bonds from September 1 to 15,\nfor the Eighth District, are approximately 27% greater than for\nthe corresponding period in April. This compares with an increase\nof 30% for the City of St. Louis and 31% for St. Louis County.\nThere is no question, however, but that sales will have to be in-\ncreased to reach quotes assigned to states. From my observations\nand contacts, sales of Series R: Bonds are coming along nicely, but\nwill require intensive sales efforts the balance of this month.\nI regret that in the absence of quotas, I um unable to\ngive you figures along the line suggested this morning.\nRegraded Unclassified\n12\nHon. Henry Morgenthau, Jr.\nPage 2\nI WRS talking with the Managing Director of our Louisville\nBranch this afternoon and he tells me that there is no question\nbut that Jefferson County, in which the City of Louisville is lo-\ncated, will reach its quota and feels reasonably sure that that\npart of the state located in the Eighth District will do likewise.\nSincerely\nAnthany Vice President\n0. M. Attebery\nRegraded Unclassified\n13\nDinner\nin honor of\nHonorable Henry Morgenthau, Jr.\nSecretary of the Treasury\nby the\nSt. Louis Chamber of Commerce\nand the\nWar Finance Committee of Missouri\nFriday, September the Seventeenth\nNineteen hundred and forty-three\nChase Club, Hotel Chase\nRegraded Unclassified\n7\nHenry MargenthanJo.\nDinner Menu\nCHILLED MELON\nMIXED OLIVES\nHALF-BROILED CHICKEN\nGREEN PEAS\nPARSLEY POTATOES\nLETTUCE SALAD, FRENCH DRESSING\nRASPBERRY ICE\nCAKES\nCOFFEE\nRegraded Unclassified\nProgram\nCHARLES BELKNAP, Presiding\nChairman of the Board, St. Louis Chamber of Commerce\nSTAR SPANGLED BANNER\nScott Field Air Forces Band\nThe Rt. Reverend WILLIAM SCARLETT, Bishop of the Diocese of Missouri\nHonorable ALOYS P. KAUFMANN, Mayor of St. Louis\nHonorable FORREST C. DONNELL, Governor of Missouri\nThe Bomber Crew, \"OLD HELLCAT\"\nCapt. Henry A. Potter\nLt. Harold A. Kohnert\nTechnical Sergeant Leo F. Mohensky\nTechnical Sergeant Harry E. Barr\nStaff Sergeant Frank A. Ross\nTechnical Sergeant Dean B. Smith\nWALTER W. HEAD\nChairman, War Finance Committee of Missouri\nHonorable HENRY MORGENTHAU, JR.\nSecretary of the Treasury\nRegraded Unclassified\nRECEPTION COMMITTEE\nCharles Belknap, Chairman\nH.G. Leedy\nWilbur B. Jones, Vice-Chairman\nWalter W. Head\nHon. Forrest C. Donnell\nWm. C. Connett\nHon. Aloys P. Kaufmann\nRhodes E. Cave\nWalter W. Smith\nDan M. Nee\nGuy A. Thompson\nDavid T. Beals\nTom K. Smith\nFrank C. Rand\nJ. Lionberger Davis\nCharles W. Moore\nJaçob M. Lashly\nHarry B. Wallace\nW. L. Hemingway\nR.B. Caldwell\nBernard F. Dickmann\nRobert E. Hannegan\nSidney Maestre\nArthur G. Drefs\nJohn I. Rollings\nSamuel W. Fordyce\nBoyle O. Rodes\nOscar Ehrhardt\nCarl W. Allendoerfer\nL. Wade Childress\nAlbert M. Keller\nHon. Lloyd C. Stark\nChester C. Smith\nJames M. Kemper\nJ. Wesley McAfee\nChester C. Davis\nRobert E. Lee Hill\nATTENDANCE COMMITTEE\nW.H. Bryan, Chairman\nW.C. Connett\nWm. J. Bramman\nWilliam G. Moore\nJudge Allen May\nBoyle O. Rodes\nHenry Riester\nRaymond F. McNally\nTom Halley\nL.E. Crandall\nW.H. Semsrott\nO. W. Attebery\nClaude H. Webster\nARRANGEMENTS COMMITTEE\nFrank E. Agnew, Jr., Chairman\nClarence M. Turley\nE. W. Mentel, Vice-Chairman\nH.H. Edmiston\nWarren T. Chandler\nJames P. Hickok\n10$\n9-25-43\n4\nMoHugh\nThis is Walter Head's\nspeech introducing the Secretary\nat St. Louis. / You might want\nit; also wire from Ernie Pyle\nto Secretary while in\nCharlottesville. - Fils\nFred Smith\nRoom 8901\nfil 9/17/43- 15\nMr. Toastmaster, Your Excellency Governor Donnell, Your Honor\nMayor Kauffman, Distinguished Guests, Ladies and Gentlemen:\nIt is A. real pleasure, a high privilege and a great\nhonor to present to you our honored guest who very graciously\nresponded to our invitation to bring us a message concerning the\nThird War Loan Drive in the success of which we are all so vitally\ninterested.\nFor almost ten years, since January 1, 1934, our dis-\ntinguished visitor has served his country, and served it well, as\nthe Secretary of the Treasury. During this entire period he has\ncarried A heavy burden of responsibility, for each of these ten years\nhas been fraught with trying and difficult problems. It has been his\nduty and his great responsibility to handle the financial affairs of\nthe richest, the greatest and the most powerful nation in all the\nworld. During his period of service the world has been torn loose\nfrom its moorings. rent asunder by the terrific shock of severe\ndepression, rocked by the terrible impact of global war.\nHis basic code end his guiding philosophy have been the\nwelfare of his fellow citizens. Evident in his actions are his\nfundamental faith in the American people and his confidence in the\nsoundness of their judgment.\nBe has steadfastly held to the belief that the citizens\nof our Republic are desirous of finencing the war on A. voluntary basis,\nthat they are able to do so and that they will do EO.\nLadies -nd Gentlemen, I present to you the Honorable\nHenry Morgenthau, Jr., Secretary of the Treasury.\nRegraded Unclassified\n16\npre Jr's speech before St. Louis Chamber\nO₂ Commerce and War Finance Committee of\nMissouri on 9/17/43\nRegraded Unclassified\n17 9/17/13\nLADIES AND GENTLEMEN:\nto congress\nToday we have had a message ^ from President Roosevelt,\nour Commander-in-Chief.\nAs he points out -- and Iquote -- \"We are in the\nmidst of the Third War Loan Drive seeking to raise a sum\nunparalleled in history -- 15 billion dollars. This is\na dramatic example of the scale on which this war still\nhas to be fought, and presents some idea of how difficult\nand costly the responsible leaders of this Government\nbelieve the war will be.\" (UNQUOTE)\n82\nRegraded Unclassified\n18\n- 2 -\nI may say right here that I am not in the least\nfrightened by this prospect. I am sure that we can get\nthe money. Our national income, this year, will be nearly\n150 billion dollars. I am equally confident that the\nAmerican people will not balk at any cost -- because\nthey fully realize that, the more money we spend on\nequipment and materiel, the fewer lives will be lost in\nbattle.\nIt is to start meeting these huge war expenditures\nthat we set up the enormous goal of 15 billion dollars, --\nexclusive of banks -- for this Third War Loan.\n/ and\nRegraded Unclassified\n19\n- 4 -\nIt is because we have confidence in the American people that\nwe set out, during the month of September, to get 5 billion\ndollars of this 15 billion from the American people -- from\nindividuals.\nPause\nI have heard it said many times that this job cannot\nbe done -- that the people of the United States are too fond\nof their comfort to skimp and sacrifice -- that they do not\nhave enough knowledge of what this war is about to dig down\nand come up with 5 billion dollars. And I can tell you this:\nThis defeatist attitude toward the Third War Loan is being\naided and abetted by enemy propagandists, who are busy\npiling rumor upon rumor. They are passing the word around\nthat subscriptions are falling behind, that the Government\nwill never refund the money you put into Bonds, and even --\nand this is the most fantastic rumor of World War Two --\nthat the war will last only as long as people continue to bey\nRegraded Unclassified\n20\n- 5 -\nbuy Bond\nYou can take your pick of those rumors. There is not\na vestige of truth in any of them. They are all desperate 1/1/3\nattempts on the part of the Axis to make the Third War Loan\nfail at any cost.\nWell, I have one report tonight that I should like\nto pour into Axis ears. Less than an hour ago I had a call\nfrom Washington. I learned that the total sales reported\nto Washington, up to this time, have passed the 91 billion\ndollar mark. Do you hear that, Germany? Do you hear that,\nJapan? The American people, of their own free will, have\nturned over to the Government, in nine days, a total of more\nover\nthan 91 billion dollars, or an average of 1 one billion dollars\na day.\nRegraded Unclassified\n21\n- 6 -\nAnd let me tell you something else. I did some\ntelephoning today to the Federal Reserve System, and I find\nthat the people of America are buying Bonds so rapidly that\ntonight, in one Federal Reserve District, there are literally.\nmillions of Bonds backed up. We simply cannot work fast\nenough to keep up with the selling pace of the War Finance\nCommittees.\nNow all this is good news. It is testimony to the\nfact that the ordinary people of America -- those that\nAbraham Lincoln so feelingly called \"the common people\" --\nare really behind the Third War Loan. They are like the\nlocal union official who came to see me today. He said:\n\"Mr. Secretary, we are doing everything we can. But that\nis not enough. I know it. I feel this war, because I have\nfive brothers in it.\"\nRegraded Unclassified\n22\n- 7 -\nPause\nLast night I visited the 6900 block on Berthold\nStreet, here in St. Louis. The very first day of this Third\nWar Loan Drive, every family in every house on this block\nbought 8. Bond.\nI wish Herr Goebbels, Germany's Number Two Big\nMouth, could have visited the homes on this block with me.\nHe would have had 8. lesson in the American way of life.\nPause\nThe front door of every house was open. All the\nlights were on. All the families sat out on their porches --\nfrom grandmothers down to babies. I went from house to\nhouse -- and one man offered a big, friendly hand and said:\n\"Howdy, Hank. Give my regards to Franklin when you get\nback to Washington.\"\nWell, gentlemen, that's Democracy. That's our America,\nPause How different Germany is!\nRegraded Unclassified\n23\n- 8 -\nThe typical block leader on Berthold Street is a fine\nAmerican woman. Everybody loved her and wanted to help her\nput the block over the top. In Germany, the block leaders\nare Nazi party members. They come around for contributions,\nwith 8. couple of Storm Troopers carrying clubs and brass\nknuckles. They are SO thoroughly hated that people escaping\nfrom over there say they will be the first men killed when\nGermany has a revolution. The Germans support the war out\nof terror. They \"contribute,\" or else they disappear into\nconcentration camps and their families never see them again.\nI think our way is better. And so do you.\nThe rest of the way to our 15 billion dollar goal,\nI agree, calls for sacrifice if by sacrifice we mean\ndoing without a new hat, or a piano, or a beefsteak dinner.\nRegraded Unclassified\n24\n- 9 -\nBut when I think of the men dying at Salerno, at this\nvery moment, I wonder if it is really a sacrifice to lend\nyour money to the Government. I'm not asking you to give\nsimply\nit. I'm asking you to put an extra $100 into a Bond that\n1\nis a safer investment even than cash, because the number of\nevery Bond you own is registered in your name at the Treasury.\nSacrifice? Tell that to the youngster who lost his\nlegs, or arms, tonight in Italy!\nRegraded Unclassified\n25\nM\n- 10 -\nI know that the job ahead of us is hard but let me\nsay flatly, here and now, that I am confident we will\nreach our goal of 15 billion.\nAnd if the long war ahead makes it necessary for us\nto have a Fourth War Loan, and a Fifth, and a Sixth -- I\nam also confident the American people will meet their\nand\nresponsibility. Realistically. Grimly. ^ With determination.\nFor we all understand, now, how much depends upon us.\nWe know that we must 'Back the Attack.' We must be sure,\nas our Commander-in-Chief said today -- and I quote --\n\"We must be sure that we have assembled the strength to\nstrike, not just in one direction, but in many directions --\nby land, and sea, and in the air -- with overwhelming forces\nand equipment.\"\n(END)\nRegraded Unclassified\n#1\nDRAFT -- St. Louis Speech\n26\nIf ever in all history there was a nation that did not want\nwar, that nation was the United States -- two years ago!\nVirtually every man, woman and child in this country -- thanks\nto the education that 18 possible under Democracy -- knows that\nwar is needless. We can settle our problems with our brains. We\ndon't need to use machine-guns.\nThe same thing may be said of the nations that are our allies.\nWhen this war started, there were only 11 anti-aircraft guns to\nprotect the whole city of London. I didn't say 11 hundred. I said\n11! Millions of Englishmen, in B. country-wide vote, had made it clear\nthat they would not support a war. The very attempt to appease Hitler,\nwhich we criticized so bitterly at the time, although we were doing\nthe same thing ourselves, was a measure of Britain's desire for\npeace. Certainly nobody can say that England wanted this war.\nThe same with Russia. The Russians were trying to lift\nthemselves out of the Middle Ages, leaping over whole centuries in\na few years' time. They were building dams and hydro-electric\nsystems; they were teaching themselves to read and write. They\nwere busy with housing projects. War would interrupt their\nindustrial development. They were ready to go to any length to\nescape or postpone it -- up to and including a non-aggression pact\nwith Germany, the country that threatened them.\nNor can anybody say that China wanted war.\nRegraded Unclassified\n- 2 -\n27\nThe long centuries of education have borne had fruit. Every\nwriter, every teacher for a thousand years has told us that war is\nwe had\ncruel and faelish and unnecessary. And at last, because books are no\nlonger chained to the churches or hidden away in the libraries of\nnoblemen, all of us know that to be true. #6 have learned the\nlesson. War to needless\nThen why if war 18 needless -- are we at war?\nFor one reasons\nWe are at war because we made a mistake.\nIn a sense, it is a mistake of which we may be proud.\nIt 18 a mistake that could only be made by & Democracy.\n100 didn t want war that we\nWe were so sure, in our Demeeracy that all men were free and\nequal; that we thought oguntries war as did.\nthought nobrdy felt about wanted it, -\nWe were stupid enough to want anything no Chastly and horrible as\n^\nwar. Was there, anywhere on earth, a mother mad enough to want to see\nher son wounded, or blinded, or killed? No; a mother like that would\nbe a monster. Was there, anywhere on earth, a father vicious\nenough to want his son to crouch behind a machine-gun and commit\nmurder? No; a father like that would be a monster.\nHAnd Monsters, like dragons, were creatures of legend, we thought --\ncreatures out of the age of fable.\nWe were sure there were no monsters in our modern world.\nWe found out that there were.\nSo today we are at war -- the strangest war in the history\nof mankind. For all of us who are fighting it, except the Germans\nand Japanese, know that it is unnecessary.\ntoday at\nRegraded Unclassified\n- 3 -\n28\nThe waste of it! The sheer waste!\nduring\nWe will spend for war, this year alone, a hundred billion\nwhat A\ndollars. Think of the things we could do with that only money!\nTake public health, for instance. If we spent a billion dollars\na year for ten years\ntotal\nB\nten\ndollars,\nB\none-tenth\nof the hundred billion we will spend this year alone on the war\nwe could enough build hospitals 360 thousand beds and We could build\nto\nS\nnine than we now dovès\n500\n/\nsupply\n5\nhundred\nhealth\ncenters\nAdded\nto\nthe\nfacilities\nto\ncould\nfull-time health service every community in the\nprovide fatel care for all american\nUnited States. We could provide full care both before and the\nand their Faties who mild such care at childbirth\nbirth of their babies, for all the American mothers who de not\nnow receive such care.\nWe could have allthe local and State cancer clinics we need.\nWe could probably wipe out venereal diseases altog\nWe could\nvertarily put an end to\nprobably tuberculosis. We could put acide 10 million dollars\nfor mental hygiene and 20 million for industrial hygiene, making sure\nthat the people in our factories worked under healthy, safe con-\nditions.\nand many other thing and n\nWe could do all that/wi th 10 billion dollars. To this war, we\nthat amount every\nare spending roughly 10 month!\nThink of the housing we could build with 100 biblion dollars.\nThink of the automobiles we could buy with 100 billion dollars.\nAnd think #We are spending the harry on was\nBut of this instead\non\nWe aren't getting that cancer clinics, the housing, the auto-\nmobiles, for one reason and only one reason because the Germans\nand Japanese have taken them away from us! because\nJapan døve was freed AMA voto\nRegraded Unclassified\n- 4 -\n29\nThis war unnecessary? When a hold up Jabe a pistol\ninto the emall of doing Come thing about it becomes\nIt This war is necessary because the Germans and value the Japs\nhave made it necessary, Welve got win want to livel\nH It is to necessary It we our\nThat the is necessaryl was lives. and A open we livep freet, that, we may lose\nDrifung + and dreaming along, blandly certain that nobody\nwould ever attack us, we nearly were in & frame of mind, when\nlost\nthat\nwas\nat\nthe\nstart\nthe war began, which can still lose it for use Yes, lose it!\nThe Army was sound sleep at Pearl Harbor,\nso was the Nevy\nAfter the Japs over-ran the Phillipines our troops fought\nbravely -- but that does not alter the fact that in the Phillipines\ntoo, we were caught napping Virtually every Pal ane we had\nblown to bits\nwas bonhed to pieces on the ground.\nThe point I AB making that a certain frame of mind to Delieving\nthat ave don 7 need to hate\nthat this war isn't necessary, believing senit to IN\nand Bill\nwe still\nand destroy in order to win -- can CRITE to lose.\n^\nIf, as you hear me speak these words, you say to yourself.\n'6h, but we'll win, we're winning,' then you are in exactly the frame\nof mind\n+\nwhich can 1 lose the was fa us,\nus to stay\nIt 18 exactly the frame of mind Germany wants you to be in.\nThe German propaganda experts go to any length to get Americans\neven\nto thinking them Cormana that are dead 2000 people. They have gone\n80 far as to send photographs of American flyers' graves to the\nflyers' mothers and fathers here in the United States. The photo-\ngraphs are show that they in are burying American flyors in neat,\nare that expected shuch lose to say net of to by German they\nwell-kept cemeteries.\nThe the flyn\nare\n14\nr/ be 45 drd,\nRegraded Unclassified\n30\n-5-\nAnd\nthat is just what the Germans want. They want to keen as many Americans\nA possible from hating them -- because, if we don't hate them, we won't\nas\nWe can be\nfightyxwix sunnort the ware Our soldiers won't fight well, and\n$\nkilled\nable to kill our boys more easily.\nBoth the Germans and the Jananese know the it 5 hard for\nAmericans to learn to hate.\nAnd when you don't hate,\n-\nin battle, you'reary game. you die.\nRegraded Unclassified\n31\n-5-\nWe haven't seen the enemy at work. We haven't been\nbombed. We have seen pictures of bombed buildings in Hamburg\nRXX and London, but they have only been pictures. We have\nnever dragged the torn bodies of our own relatives out of such\nbuildings.\nThe British know what they are fighting for because\nthey have been in this war a long time, The British fight for\ntheir very lives; they fight to stop the Germans from bombing\ntheir homes; to stop them from killing their families. The British\nfront line soldier slashes forward without mercy. He hates the\nenemy.\na\nOur troops learned slowly. When American soldiers\nwere first sent abroad, enemy pr isoners marveled at *** the\nthoughtlessness with which they moved. They couldn'\nIt took awhile for the American soldiers to learn\nto hate. At the Kasserine Pass, in North Africa, scores of\nthem died because they learned too late.\nLet me quote from an eyewitness description of that\nbattle. These are the words of a private who was there. I\nquote:\nRegraded Unclassified\n32\n7\n6\na\nunder his chute. That is German efficiency. If they can kill OUT pilot\nbefore he lands safely, he won't fly against then again.\n$ 9/ws that DAW that happen, a\nwid\nfew\ntimes,\nget over our\ndonnatle\ny notions that the German boys are decent, supert youngsters like our\nown.\n111 might are\nOr year missi an American RÉEXEX medical corps man afx crawl\nout to take carry water and medicine to a wounded German in the field. Then\nwe'd all\na German machine gun that has been miting open up and chops him to\nin hits half 4 The Japs are very good at that, too. They masks have comb\nsharnshooters\nwith\n1\ninstructions to ambush and kill every\nme\nof\nRed Cross men they are\nIn the First World War we heard hundrede many atrocity stories.\nAfter the war we learned **** most of them were untrue. In this war there\nand\nstreetly the conduct of the German or Jan-\nchese soldierfinxwx day after day, is more shen shocking than any\natrocity story.\n1\nburn\nto\nthe\ngrounds\nThey *** don't way They to just improck shoot 16 pat priseners. with capture thesex They horrible village. torture cruelty Play them. They That go way, out they of their\nthey'll frighten us out of the war.\nreported that the Germans at Salerno\nOnly two days ago the newspapers\ntwice were truce, advancing + then throwing under down white the flags flags fand\ntreachery doesn't were shock us, geal to\nsttacking In this war, much I'm\nBheled the Germans:\ndidn't fore our solders, either They\nRegraded Unclassified\n33\n-6-\n\"I know so well those men who were cut to ribbons\nat the Kasserine Pass, and I knew why they were thrown into con-\nfusion, panicked by attacks, and accepted their fate almost par-\nalyzed. When they jumped into foxholes to let the tanks roal\nover them, and were bayonetted in these foxholes by the infantyy\nthat came behind the tanks, they died with an astonished look on\ntheir faces, as if they wanted to ask: 'Could that be possible,\nwould they really do that?'\" (Unquote.)\nIt takes a lang time for Americans to learn to hate.\nBut we had better learn fast, now -- all of us -- just\nas our soldiers and sailors have had to learn.\nHow are we going to do it?\nIf we could all take a trip to the front, it would\nbe easier. We'd see an American fighter pilot, with his plane\nin flames, take to his parachute. Then we'd watch while half a\ndozen German planes circled back and machined-gunned him as he\ndagi dangled helpless\nRegraded Unclassified\n12\nDRAFT -- St. Louis Speech\n34\nIf ever in all history there was a nation that did not want\nwar, that nation was the United States -- two years ago!\nVir\nbually\nand\nchild\nin\nUnite\ncountry\nhanks\n-\neducation\nWe of the possible democracies Democracy\nto\nWav\nto\nknow\nthat war\nis needless. We can settle our problems with our brains. We don't\nneed\nmachine-guns,\nA The This same is true thing may not fn be instance, us, the nations but for are\nour allies.\nWhen this war started, there were only 11 anti-aircraft guns to\nprotect the whole city of London. B aidn e 11 hundred. I said\nin\nMillions of Englishmen, in a country-wide vote, had made it\nclear that they would not support\nwar.\nThe\nHitlery which we oriticized so bitterly at the timey although we were\ndoing the thing ourselves,\nof\nBritain\ndesire\nfor\nCertainly nobody can say that England wanted this conflict.\nThe\ncame\nThe Russians were trying valiantly to lift them- m-\nselves out of the Middle Ages, leaping over whole centuries in\na few years' time. They were building dams and hydro-electric systems,\nthey were teaching themselves to read and write.\nhousing War ould only interrupt their development.\nThey were ready to go to any length to escape or postpone it,\nand including\naggression\npact\n$\nGermany,\nthe\ncountry\nthreatned them.\nNor can anybody say that China wanted war.\nEvery writer, every teacher for a thousand years had told us that\nwas\nwar\nunnecessary. And at last we had learned the lesson.\nRegraded Unclassified\n- 2 -\n35\nThen why if war is needless -- are we at war?\nthinks\nFor\none\nbecause we made a mistake.\nIn a sense, that it 18 a mistake of which we may be proud.\nbelieved\nWe were BO sure we didn't want war that we nobody wanted\n^\ninsane\nit. Was there. anywhere on earth, a mother\nenough to want to see\nher son wounded, or blinded, or killed? No; B. mother like that would\nbe 2. monster. Was there, anywhere on earth, a father vicious enough to\nwant his son to crouch behind a machine-gun gun and commit murder? No;\n8 father like that would be & monster.\nAnd monsters, like dragons, were creatures of legend, we thought --\ncreatures out of the age of fable.\nWe were sure there were no monsters in our modern world!\nWe found out\nthere were!\nAnd\ntoday, we are at war.\nThe waste of it! The sheer waste!\nWe will spend\nduring this year alone, a hundred billion\ndollars for war.\nThink of what we could do with\nvast that money! sum of\nIn\npublic health, for instance. If we spent only & billion\ndollars a year for ten years -- one-tenth of the hundred billion we\nthe\nwill spend this year on war -- we could build enough hospitals to ve\nus 360 thousand beds more than we now have.\n/\nWe could build 500 health\na\ncenters and supply full-time health service to every community in the\nUnited States. We could provide full care for all American mothers\nand their babies who need such care at childbirth.\nRegraded Unclassified\n- 3 -\n36\nWe could have all of the local and State cancer clinics we need.\nWe could probably wipe out venereal disease. We could almost certainly\nput an end to tuberculosis.\nWe could do all that and many other things with 10 billion dollars.\nAnd in this war, we are spending roughly that amount every month!\nThink of the housing we could build with 100 illion dollars.\nThink of the automobiles we could buy with 100 billion dollars.\nWe are spending the money on war instead of cancer clinics, or\nhousing, or automobiles, because Germany and Japan have forced us\ntoto\nto go to was.\nThis war unnecessary?\nThis war 18 necessary because the Germans and the Japs have made\nit necessary.\nIt 18 necessary if we value our both lives and our freedom.\nIf we forget that, we may lose the war and our lives and freedom\nDrifting and dreaming along, blandly certain that nobody would\never attack we nearly lost the war at the start.\n#Pemember us, Pearl Harbor! Remember the Phillipines!\nAfter the Japs over-ran the Phillipines, our troops fought\nbravely but that does not alter the fact that in the Phillipines, too,\npractically\nevery plane we had was blown to bits on the ground.\nBelieving that this war isn't necessary, believing that we don't\nneed to hate and kill in order to win -- we can still lose.\nIf, as you hear me speak these words, you say to yourself, 'Oh,\nbut we'll win, we're winning,' then you are in the frame of mind which\ncan lose the war for us.\nRegraded Unclassified\n4 -\n37\nhave\nIt 18 exactly the frame of mind Germany wants us to\nThe German propaganda experts go to any length to get Americans to\nfail, thank that way. They even send photographs of dead American flyers'\ngraves to the flyers' mothers and fathers here in the United States. The\nphotographs show In neat, well-kept cemeteries. The flyers'\nparents are expected to say, \"If the Germans are showing that much\nlove and respect to my boy, they can't be BO bad.\"\nAnd that 1s Just what the Germans want. They want to keep as\nmany Americans as possible from hating them -- because, if we don't\nhate them, we won't support the war. Our soldiers won't fight as\nlet them hill and\nwell. We can more easily.\nBoth the Germans and the Japanese know it's hard for Americans\nto learn to hate.\nIt hard for MA to learn to bate,\nAnd / when you don't hate, in battle, you're easy game. You die.\nWe haven't seen the e enemy at work. We haven't been bombed.\nWe have seen pictures of bombed buildings in Hamburg and London,'\nto\nyes\nthey have only been pictures We have never dragged the torn bodies\nloved one\nfombed\nof our own\nout of\nbuildings.\nThe British know what they are fighting for because they have\nbeen in this war a long time,\nlives; they fight to stop the Germans They from bombing their homes; to keep\nfight\nsavagely\nfor\ntheir\nvery\netop them from killing their families. The British front line soldier\nslashes forward without mercy. He hates\nIt took a while for\nAmerican soldiers to learn to hate.\nAmindan\nAt the Kasserine Pass, in North Africa, scores of\ndied because\nthey learned too late.\nRegraded Unclassified\n- 5 -\n38\nLet me quote from an eyewitness description of that battle.\nThese are the words of a private who was there. I quote:\n\"I know so well those men who were cut to ribbons at the\nKasserine Pass, and I knew why they were thrown into confusion,\npanicked by attacks, and accepted their fate almost paralyzed.\nWhen they jumped into foxholes to let the tanks roll over them, and\nwere bayonetted in these foxholes by the infantry that came behind\nthe tanks, they died with an astonished look on their faces, as if\nthey wanted to ask: 'Could that be possible, would they really do\nthat? (Unquote.)\nIt takes a long time for Americans to learn to hate.\nBut we had better learn, now -- all of us -- just as our\nsoldiers and sailors have had to learn.\nHow are we going to do it?\nvisit\nmight\nIf we could\nthe front/ it\nbe\neasier.\nWe'd see an American fighter pilot, with his plane in flames, take\nto his parachute. Then we'd watch while half a dozen German planes\ncircled / back and machine-gunt him as he dangled helpless under his\nchute. That is German efficiency. If they can kill a pilot before\nhe lands safely, he won't fly again.\nwhen\nnotion\nwe saw that happen a few times, we'd get over our\nthat\nthe German boys are decent, honorable youngsters like our own.\n,I\nwatch\nOr we might\nan American medical corps crawl out to carry water\nand medicine to a wounded German in the field. Then we'd see a German\nmachine-gun open up and chop him to bits.\nRegraded Unclassified\n- 6 -\n39\nThe Jape are very good at that, too. They have sharpshooters\nwill th ins tructions to ambush and kill every one of our Red Cross men\nthey 0001\nthere were\nIn the First World War many atrocity stories. After the\nthat\nwar we learned most of them were untrue. In this war the conduct of\n^\nthe German and Japanese soldiers, day after day, 18 more shocking than\nany atrocity story.\nOnly two days ago the newspapers reported that the Germans at\nSalerno were advancing under white flags of truce, contemptate and then throwing\nour men.\ndown the flags and attacking In this war, such treachery doesn't\neven shock us. I'm glad to say/ it didn't fool our soldiers,\nThey killed the Germans and laughed at them.\nRegraded Unclassified\n40\n-7-\nOnly yesterday the New York Times reported a meeting of leading\neducatora soletern of 30 fanalga nations at Harper's Ferry\nin West Virginia. Again / I quote: \"As educators from Czechoslovakia,\nGreece, Poland, Belgium, Norway and China rose to tell what has harmened\nto education under Nazi or Japanese rule, the story was all the same.\nIt was a refrain of destruction, plunder, torture, death and mutilation;\nschools have been burned, libraries sacked, scientific equipment stolen.\nmiseums closed. The Nazis have succeeded in making an intellectual des-\nert of the European lands.\" (Unguste)\nThere are no atrocity stories in this war because every story\nwe hear is an atrocity!\nSlowly but surely, as we hear more and more of them, we are\nlearning\nto hate our musder ous, arrugant enemy.\nWe know that at this very moment, on the beach at Salerno,\nAmerican soldiers are dying by thousand5. Gone are the days when\nthe casualty lists told\nof a hundred killed here, a hundred killed\nthere. Xyxxxxxx We have landed on the continent of Europe. The war is\nreally beginning, for us. Italy is already a consuming faxxxxxxxx fur-\nnace. And the fuel the Germans are burning in that furnace\nis\nthe life of een. Not hundreds but thousands of our American\nAmerican for\nsoldiers, fighting the tought - doing to them at this sement\nsee\nin Italy, will never walk again, will never again -- will never breathe\nagin.\nSalema\nMaybe will teach us to hate the Nazial\nLet me quote again -- this time from John Steinbeck, the novelist.\nHe writes. from Europe: \"I have seen the hospitals with mauled men, the\nRegraded Unclassified\n41\n-8-\nlegless and the blind.\nthe fingerless hande and burned faces\nall\nthe ***** destruction that steel and fire can do to & man's body and\nmind. I have seen children hauled out of blasted buildings.\nlumps of\ncrushed, dirty meat in pinafores.\ndead, boxed and buried.\ncarrion.\n\"All this,\" Steinbeck says, \"is the backdrop of the Third War\nLoan\nthe drive for 15 billion dollars. It should not be a matter\nof who will lend his money.\nAll this is the backdrop\nbut, of rather, the Third who War dares Loan. not to?\" (Unguate).\nYes\nyes, it is\nAll this is why. as the Secretary of the Treasury of the United\nStates, I must demand ask from you your taxes to for heavier than any other generation of\nAmericans has ever paid. All this is why I must ask you to get along with only\nno\nthe bare necessities of life in order to subscribe\nthe\ntotal of 15 billion do Hers to the Third War Loan. All this is why I XXXX\nwarn\nmust\nyou that there will be a Fourth War Loan, and a Fifth, and a\nSixth.\nI think we have\nreason enough to Date the Nazis. I say,\n\"Damn them to Hell - the Hell\nthey have created for the world!\"\nRegraded Unclassified\n42\n#\n#3\nRegraded Unclassified\n43\nDRAFT - St. Louis Speech\nIf ever in all history there was 8. Nation that did not\nwant war, that Nation was the United States -- two years ago!\nThanks to education, we of the democracies, know that war\nis needless. We can settle our problems with our brains. We\ndon't need machine-guns.\nThis is true not only of us, but of our Allies.\nWhen this war started, for instance, there were only 11\nanti-aircraft guns to protect the whole city of London.\nMillions of Englishmen, in a country-wide vote, had made it\nclear that they would not support war. Certainly nobody can\nsay that England wanted this conflict. The Russians were trying\nvaliantly to lift themselves out of the Middle Ages, leaping\nover whole centuries in a few years' time. They were building\ndams and hydro-electric systems, they were teaching themselves\nto read and write. War could only interrupt their development.\nThey were ready to go to any length to escape or postpone it.\nNor can anybody say that China wanted war.\nEvery writer, every teacher for & thousand years had told\nus that war was unnecessary. And at last we had learned the\nlesson.\nThen why -- if war is needless -- are we at war?\nRegraded Unclassified\n1\n44\n- 2 -\nFor one thing, because we made a mistake.\nIn a sense, it is a mistake of which we may be proud.\nWe were 80 sure that we didn't want war that we believed\nnobody wanted it. Was there, anywhere on earth, a mother\ninsane enough to want to see her son wounded, or blinded, or\nkilled? No; a mother like that would be a monster. Was there,\nanywhere on earth, a father vicious enough to want his son to\ncrouch behind & machine-gun and commit murder? No; a father\nlike that would be a monster.\nAnd monsters, like dragons, were creatures of legend, we\nthought creatures out of the age of fable.\nWe were sure there were no monsters in our modern world!\nWe found out there were!\nAnd, today, we are at war.\nThe waste of it! The sheer waste:\nWe will spend, during this year alone, a hundred billion\ndollars for war.\nThink of what we could do with that vast sum of money!\nIn public health, for instance. If we spent only a billion\ndollars a year for ten years -- one-tenth of the hundred billion\nwe will spend this year on the war -- we could build enough\nhospitals to give us 360 thousand beds more than we now have.\nRegraded Unclassified\n45\n- 3\nWe could build 500 health centers, and supply a full-time\nhealth service to every community in the United States. We\ncould provide full care for all American mothers and their\nbabies who need such care at childbirth.\nWe could have all of the local and State cancer clinics\nwe need. We could probably wipe out venereal disease. We\ncould almost certainly put an end to tuberculosis.\nWe could do all that, and many other things, with 10\nbillion dollars. And, in this war, wo are spending roughly\nthat amount every month;\nThink of the housing we could build with 100 billion\ndollars:\nThink of the automobiles we could buy with 100 billion\ndollars!\nWe are spending the money on war - instead of cancer\nclinics, or housing, or automobiles - because Germany and Japan\nhave forced us to go to war.\nThis war unnecessary?\nThis war is necessary because the Germans and the Japs\nhave made it necessary!\nIt is necessary if we value our lives and our freedom!\nIf we forget that, we may lose both the war and our lives\nand freedom!\nRegraded Unclassifie\n46\n- 4 -\nDrifting and dreaming along, blandly certain that nobody\nwould ever attack us, we nearly lost the war at the start.\nRemember Pearl Harbor! Remember the Philippines!\nAfter the Japs over-ran the Philippines, our troops fought\nbravely - but that does not alter the fact that in the\nPhilippines, too, practically every plane we had was blown to\nbits on the ground.\nBelieving that this war isn't necessary, believing that\nwe don't need to hate and kill in order to win -- we can still\nlose.\nIf, as you hear me speak these words, you say to yourself,\n'Oh, but we'll win, we're winning,' then you are in the frame\nof mind which can lose the war for us.\nIt is exactly the frame of mind Germany wants us to have.\nThe German propaganda experts go to any length to get Americans\nto feel that way. They even send photographs of dead American\nflyers' graves to the flyers' mothers and fathers here in the\nUnited States. The photographs show the graves arranged in\nneat, well-kept cemeteries. The flyers' parents are expected\nto say, \"If the Germans are showing that much love and respect\nto my boy, they can't be so bad.\"\nRegraded Unclassified\n47\n- 5 -\nAnd that is just what the Germans want. They want to\nkeep as many Americans as possible from hating them -- because,\nif we don't hate them, we won't support the war. Our soldiers\nwon't fight as well. We will let them kill us more easily.\nBoth the Germans and the Japanese know it's hard for\nAmericans to learn to hate.\nAnd when you don't hate, in battle, you're easy game.\nYou die.\nIt is hard for us to learn to hate.\nWe haven't seen the enemy at work. We haven't been bombed.\nWe have seen pictures of bombed buildings in Hamburg and London;\nyes. But they have only been pictures to us. We have never\ndragged the torn bodies of our own loved ones out of bombed\nbuildings.\nThe British know what they are fighting for because they\nhave been in this war a long time. They fight savagely for\ntheir very lives; they fight to stop the Germans from bombing\ntheir homes; to keep them from killing their families. The\nBritish front line soldier slashes forward without mercy. He\nhates.\nIt took a while for our American soldiers to learn to hate.\nAt the Kasserine Pass, in North Africa, scores of Americans\ndied because they learned too late.\nRegraded Unclassified\n48\n- 6 -\nLet me quote from an eyewitness description of that battle.\nThese are the words of a private who was there. I quote:\n\"I know 80 well those men who were cut to ribbons at the\nKasserine Pass, and I knew why they were thrown into confusion,\npanicked by attacks, and accepted their fate almost paralyzed.\nWhen they jumped into foxholes to let the tanks roll over them,\nand were bayonetted in these foxholes by the infantry that came\nbehind the tanks, they died with an astonished look on their\nfaces, as if they wanted to ask: 'Could that be possible, would\nthey really do that?'\" (Unquote.)\nYes - it takes a long time for Americans to learn to hate.\nBut we had better learn, now -- all of us -- just as our\nsoldiers and sailors have had to learn!\nHow are we going to do it?\nIf we could visit the front it might be easier. We'd see\nan American fighter pilot, with his plane in flames, take to\nhis parachute. Then we'd watch half a dozen German planes\ncircle back and machine-gun him as he dangled helpless under his\nchute. That is German efficiency. If they can kill & pilot\nbefore he lands safely, he won't fly again.\nWhen we saw that happen 8. few times, we'd get over our\nnotion that the German boys are decent, honorable youngsters\nlike our own.\nRegraded Unclassified\n49\n- 7 -\nOr we might watch an American medical corps man crawl\nout to carry water and medicine to a wounded German in the\nfield. Then we'd see a German machine-gun open up and chop\nhim to bits.\nIn the First World War there were many atrocity stories.\nAfter the war we learned that most of them were untrue. In\nthis war the conduct of the German and Japanese soldiers, day\nafter day, is more shocking than any atrocity story.\nOnly two days ago the newspapers reported that the Germans\nat Salerno were advancing under white flags of truce, and then\nthrowing down the flags and attacking our men. In this war,\nsuch contemptible treachery doesn't even shock us. I'm glad\nto say it didn't fool our soldiers. They killed the Germans\nand laughed at them!\nOnly yesterday the New York Times reported a meeting of\nleading educators of 30 nations at Harper's Ferry in West\nVirginia. Again I quote: \"As educators from Czechoslovakia,\nGreece, Poland, Belgium, Norway and China rose to tell what has\nhappened to education under Nazi or Japanese rule, the story\nwas all the same. It was a refrain of destruction, plunder,\ntorture, death and mutilation; schools have been burned,\nRegraded Unclassified\n50\n- 8 -\nlibraries sacked, scientific equipment stolen, museums closed.\nThe Nazis have succeeded in making an intellectual desert of\nthe European lands.\" (Unquote.)\nThere are no atrocity stories in this war - because every\nstory we hear is an atrocity!\nSlowly but surely, as we hear more and more of them, we are\nlearning to hate our murderous, arrogant enemy.\nWe know that at this very moment, on the beach at Salerno,\nAmerican soldiers are dying by thousands. Gone are the days\nwhen the casualty lists told of a hundred killed here, a hundred\nkilled there. We have landed on the continentof Europe. The\nwar is really beginning, for us. Italy is already a consuming\nfurnace. And the fuel the Germans are burning in that furnace\nis the life of American boys. Not hundreds, but thousands of\nour American soldiers, fighting tonight in Italy, will never walk\nagain, will never see again -- will never breathe again.\nMaybe Salerno will teach us to hate the Nazis!\nLet me quote again -- this time from John Steinbeck, the\nnovelist. He writes, from Europe: \"I have seen the hospitals\nwith mauled men, the legless and the blind\n...\nthe fingerless\nhands and burned faces\n...\nall the destruction that steel and\nfire can do to a man's body and mind. I have seen children\nRegraded Unclassified\n51\n- 9 -\nhauled out of blasted buildings\n...\nlumps of crushed, dirty\nmeat in pinafores\n...\ndead, boxed and buried\n...\ncarrion.\n\"All this,' Steinbeck says, \"is the backdrop of the Third\nWar Loan\n... the drive for 15 billion dollars. It should not\nbe a matter of who will lend his money\n...\nbut, rather, who\ndares not to?\" Unquote\nAll this is the backdrop of the Third War Loan.\nYes -- yes, it is.\nAll this is why, as the Secretary of the Treasury of the\nUnited States, I must ask you to pay taxes heavier than any\nother generation of Americans has ever paid. All this is why\nI must ask you to get along with only the bare necessities of\nlife, in order to subscribe 15 billion dollars to the Third War\nLoan. All this is why I must warn you that there will be a\nFourth War Loan, and a Fifth, and a Sixth.\nI think we have reason enough to hate the Nazis. I say,\n\"Damn them to Hell -- the Hell they have created for the world!\"\nRegraded Unclassified\n# 4\n52\nTonight thousands of British and Canadian\ntroops are driving hard into the heart of Italy.\nDEPENDERS\nThe Italian troops, confused and bewildered by the\ndriving force of the men and the equipment of the\nUnited Nations, have not yet been able to put up a\nstrong defense.\nThe American Seventh Army, after having driven\nthe Nazi and Fascist leaders to near distraction by\nsimply disappearing from sight, is now about to\nmaterialize. Soon, very soon, this well-equipped\nSeventh Army will strike. At this moment there 18\nsuch power poised as our adversaries have never\n=\nseen and could never imagine. And it is power that\ncounts. Power is the only thing that Axis leaders\ncan understand.\nThe reason I am telling you this tonight is\nbecause the job of developing and maintaining\noverwhelming power for the United Nations is largely\nyour job. To create this power requires tireless\neffort on the Home Front. It means long hours in the\nfactories and shops and offices everywhere in the\ncountry.\nrequires\nrequires\nBut 1t dess not only need effort, it also needs\nmoney. To do the job with which we are faced, to\nsupply our attacking forces with the machines of war,\nRegraded Unclassified\n53\n- 2 -\nwith ammunition, and transportation, and to maintain\ntakes staggering\nan army of six million men, requires huge amounts\nof money.\nThe American people have shown a commendable\nwillingness to supply this money. They have not\nstopped to reckon the cost of preserving civilization.\nThey know there can be no economic justification for\nfailing to save freedom.\nNow the Government could get the money required\nin several ways. Our credit is the best in the world,\nand we could simply go to the banks and ask them for\nenough money to finance the war. Or we could print\nthe money, as they do in some of the Axis countries,\nbut but 1f we took either of these two easy courses we\nwould be certain to lose the peace whether or not\nwe won the war. We would have an inflated economy,\nwhich would spread out for decades the period of\nreconstruction.\nWe can get the money for the war mily without\nrisking our future only 1f we get it from the American\npeople. For this reason we are asking you to help us\nkeep our books balanced to the greatest possible\ndegree through your payment of taxes and through your\nlending your the Government money by buying War Bonds.\nRegraded Unclassified\n54\n- 3 -\nTonight, we are launching a campaign to raise\nfifteen billion dollars through this voluntary War\nBond program.\nWhole communities -- whole states -- are on\na war-time alert toright, with people waiting in\ntheir homes for flying squadrons of special Bond\nsalesmen.\nIn these weeks to come, every home, every office,\nevery factory -- even remote farms will be visited\nby War Bond salesmen. Every state of the 48 has its\nplans for parades, carnivals, and mass meetings.\nSo eager are the armed forces to do everything in\ntheir power to help this Drive that General Eisenhower\nhas sent home thirteen hundred tons of captured enemy\nwho MR berry to Grey bonds\nequipment, so that you can see the kind of weapons\nthat our weapons must destroy.\nWe can be sure that our enemies will watch this\ndrive with the keenest interest. They know that\nsuccess in this undertaking can and will materially\nshorten the war. They know that the more money the\nAmerican people lend to their Government, the more\npowerful and relentless will be the American forces\nin the field. And finally, they know that only a\nunited and determined America could possibly produce\nso large a sum of money on a voluntary basis as 15\nRegraded Unclassified\n55\n- 4 -\nbillion dollars.\nLast April, when we launched the Second War\nLoan drive for 13 billion dollars, the radio stations\nof Germany, Japan, and Italy filled the air with jeers,\ncertain\npointing out that the drive was bound to fail, that\nAmericans would never lend SO much money to their\nGovernment. Then, when the Government not only received\nwhat it asked for, but found that the people had sub-\nscribed an extra billion or so for good measure, the\nair became suddenly quiet. The overwhelming success\nof the Second War Loan drive demonstrated to the huge\ndisappointment and chagrin of Axis propagandists that\nthe people of this woule and Limid democracy stood firm\nbehind their troops. The axis leaders were forced to\nrecognize that the American people meant to buy and\nbuild whatever machines of war were necessary to get\nequipment was\nthis war over and finished. The American people were\ndetermined to have victory no matter what the cost in\ndollars, or Sacrifice.\nThe Third War Loan, which we are starting tonight,\nwill also succeed.\nIt will succeed because, by this time, every man\nand woman in the United States recognizes the importance\nof generously financing the costs of war. They know\nthat good equipment and plenty of it, means less loss\nRegraded Unclassified\n- 5 -\n56\nof life on the battle front. They have seen what\nhappened at Kiska when the Japs, cringing at the\nthought of meeting the power and force of American\nand Canadian troops, simply withdrew, in the black\nof night, to parts unknown.\nIt is not likely that we can move into Berlin\nthe way our troops marched into Kiska without a living\nenemy in sight because, there will be Corman planes\nthe last of the Luftwate will he there\nto ward off to final defeat; there will be guns\nblazing away in defiance. But one thing is certain;\nthe more bombs and shells that we can pour into\nGermany's war production and transportation centers,\nthe weaker Germany's resistance will be, and the\nmore American lives we shall be able to save.\nIt 18 the sum total of your War Bonds, translated\ninto planes and gasoline and bombs and well-trained\npilots and coldiers and suttors, that the Axis nations\nfear above all things. Therefore your bonds -- that\nextra $100 bond that you are being asked to buy in the\nThird War Loan will help MAS crush the enemy into\nthe unconditional surrender which will alone satisfy\nus in our just wrath\nRegraded Unclassified\n/ 9/17/43\nST LOUIS SPEECH\n57\nall\nIf\never\nin\nhistory\nof\nthe\nthere XXXRX was a\nthat nature\nnation that did not want war, was the United States years ago!\nAnd with good of Virtually every that man, woman and child in this\ncountry -- thanks to the education is possible under democracy --\nour\nknows that war is needless. Te can settle problems with\nour brains. We don't need to use\nmachine-guns.\nThe same thing may be said of the shor nations which that\nare today our welcome allies.\nBe Thxthmxxhainx When this war\nmotule\nstarted, there were only 11 anti-aircraft gune to protect the city of\nLondon. I didn't say 11 hundred. I said 111 Something like e million\nA\nof\ncountry-wide made it chas\nEnglishmen, in a vote, had that they would not support\na\n^\nto approve\n\"ar. Thexaxyx very attempt Hitler, which we criticized\nthe enth they surselves, was\nso bitterly at the time / although we were doing\n8.\nmeasure\nof Britain's desire for neace. Certainly nobody can say that England\nwanted\nthis was.\nThe name with Russia. The Russians were trying to lift\nout\nthemselves\nfrom\nof\nover\nthe\nMiddle\nAges\nleaning XXXX whole\n,\ncenturies, in & few years' time. They were building dams and hydro-\nThey avore\nTheynic busy\nelectric systems, teaching xix themselves to read and write,\ns\nwould\nindustrial\nhousing projects. War was bound to interrunt their development,\naction. They were ready to go to any length to escape or - nost-\nnone it\nun to and including & non-aggression nact with\nGermany, the country that threatened kings them\nThe same with Ohina Any body who and calls the Chinese\na\nwer like moonle to too ignorant to deserve serious consideration.\nAdd no was, can anybody eng that China\nRegraded Unclassified\n58\n-2-\nThe he long cent ries of education have borne fruit. Every\nfn a thousand years\n-riter, every teacher:\nhas told us that war is cruel\nand foolish and unnecessary. And at last because books are no longer\nthe\nchained\nto\nthe\nin churches, or hidden away in the libraries of\n3\nthat betwee. We have learned the lesson\nfor noblemen, all of us know War is needless. will will\n1the genere Vion that learned - there could be - end to -\nis\nThen why if war needless -- are we at war?\n\"e are at war because we made a mistake. H In a sense, it only is a mis-\ntake\nof\nwhich\nwe\nmay\n1\nbe proud. 91% It is a mistake that could be made\nonly\nby a democracy.\nWe were BO sure, XX in our democracy, that all men were free and\nequal, that thatx we thought all theratherx countries felt about war\nas we did. To nut it simply, - couldn't believe Any other countries\nwere stunid enough to want anything as ghaetly and horrible as war. Was\nson wrunded,\nthere, anywhere on 8a. th, a mother mad enough to want to see her\nlg\non fulled ?\nthe that\nblinded, his arme No; such a mother would be a monster.\nA\nYes there, anywhere on earth, a father\nwent\nvic ous enough to bolieve his son memby to crouch behind\ncommit muder ?\na machine-gun and shou down the women and children of some other nation?\nlike the\nNo: such a father would be & monster.\nwithought- creatines\nMonsters, like dragons, were creatures of legend out of the\nage of fable.\nLivere no\nour\nTo were sure there be monsters in modern world,\n^\nautomobiles and sirplanes.\nTe found out that there were.\nA\ntoday we are at war\nthe strangest war in\nthe history of mankind. For all of us who are fighting it, excent the\nGermane and Japanese, know that were it to cheatly and horrible and, most\nRegraded Unclassified\n59\n-3-\nThe waste of it! The sheer waste!\nTe will spend for war, this year alone, a hundred billion dollars.\nThink of the things we could do with that money!\nTake public health, for instance. If we spent a billion dollars\nis year for ten years -- a total of ten billion dollars, or one senth of the\nhundred billion we will spend this year alone on the war -- we could build\nhospitals providing 360 thousand beds. We could build 5 hundred health\ncenters, Added to the facilities we already have, we could nut 8. full-\ntime health service into every community in the United States. We could\nprovide full care, fax both before and after the birth of their babies,\nfor ell the American mothers who do not now receive such care.\nTe could have all the local and State cancer clinics me need.\nTe could probably wine out venereal diseases altogether. Te could probably\nwine out tuberculosis. 7e could nut aside 10 million dollars for mental\nhygéene and 20 million for industrial ygiene, making sure that sex the\nneonle in our factories worked under healthy, safe conditions.\nlie could do all that with 10 billion dollars. In this war, we\nroughly\nare spending 10 billion dollars & month!\nor Taink hink of the housing we could bu build with 100 billion dollars.\nThink of the automobiles we could buy with 10 billion dollars.\nAnd think of this -\nDut\nIt\n1\nhigh\ntime\nto\nreflect\nthat\nEaren't getting\nthe cancer clinics, the housing, the automobiles, for one reason and only\none reason -- because the Germans and Japanese have taken them away from\nus!\nIV 18 high time for un to stop thinking that\nhis war\nun-\nnecessary. When R hold-un man jabe a vistol into the small of your back,\nRegraded Unclassified\n60\ndoing something about it becomes necessary. This war is necessary because\nthe Germans and the Jape have made it necëssary. We've got to win it if we\nwant to live! That is necessary!\nDrifting and dreaming along, blandly andx\ndaily certain that nobody would ever attack us, we Americans were in a\nframe of mind, when the war began, which can still lose it for us. Yes,\nlose it!\nThe Army was sound alseen, at Pearl Harbor.\nSo was the Navy.\nAfter the ****** Japs over-ran the Phillipines, our troops\nfought bravely -- but that does not alter the fact that in the Phillinines,\ntoo, we were caught nanning. Virtually every plane we had there was\nbombed to pieces right on the ground.\nThe noint I em making that a certain frame of mind -- believing\nthat this war isn't necessary, believing that it isn't necessary to kill\nand destroy in order to win # -- can cause us to lose.\nIf, as you hear me speak these words, you say to yourself,\n'Oh, but we'll win, we're winning,' then you are in exactly the frame of\nmind I mean.\nIt is exactly the frame of mind Germany wants you to be in.\nThe German propaganda emerts go to any length to get Americans backnet\nsweet,\nto thinking that Germans are friendly, good people. They have gone 80\nfar AS to send photographs of American graves to mothers and\nflyers' the flyers'\nfathers here A in prove the United Stale that The\nthey are burying dead American flyers in neat\ngraves in well=kent cemeteries,\nand the mothins\nd fathers are expected to thank,\nthey he caring for my by like\nRegraded Unclassified\nwhere I's 75 Mu\n# 2 61\nDRAFT - St. Louis Speech\nwe ned mush again\nt will he hand- you may hat\nwant 4 services but dischat\nwe must do . wo didn't rob\nIf ever in all history there was a Nation that did not\nbut\nwant war, that Nation was the United States -- two years ago:\nwer\nThanks to education, we of the democracies, know that war\nis needless. We can settle our problems with our brains. We\ndon't need machine-guns.\nand\nThis is true not only of us, but of our Allies.\nyou\nWhen this war started, for instance, there were only 11\nanti-aircraft guns to protect the whole city of London.\nform\nMillions of Englishmen, in a country-wide vote, had made it\n1\nclear that they would not support war. Certainly nobody can\nsay that England wanted this conflict. The Russians were trying\nvaliantly to lift themselves out of the Middle Ages, leaping\nover whole centuries in a few years' time. They were building\ndams and hydro-electric systems, they were teaching themselves\nto read and write. War could only interrupt their development.\nThey were ready to go to any length to escape or postpone it.\nNor can anybody say that China wanted war.\nEvery writer, every teacher for & thousand years had told\nus that war was unnecessary. And at last we had learned the\nlesson.\nThen why -- if war is needless -- are we at war?\nRegraded Unclassified\n62\n- 2 -\nFor one thing, because we made a mistake.\nIn a sense, it is a mistake of which we may be proud.\nWe were so sure that we didn't want war that we believed\nnotody wanted it. Was there, anywhere on earth, a mother\nInsane enough to want to see her son wounded, or blinded, or\nkilled? No; a mother like that would be a monster. Was there,\nanywhere on earth, a father vicious enough to want his son to\ncrouch behind a machine-gun and commit murder? No; a father\nlike that would be a monster.\nAnd monsters, like dragons, were creatures of legend, we\nthought -- creatures out of the age of fable.\nWe were sure there were no monsters in our modern world!\nWe found out there were!\nAnd, today, we are at war.\nThe waste of it! The sheer waste!\nWe will spend, during this year alone, a hundred billion\ndollars for war.\nThink of what we could do with that vast sum of money!\nIn public health, for instance. If we spent only a billion\ndollars a year for ten years -- one-tenth of the hundred billion\nwe will spend this year on the war -- we could build enough\nhospitals to give us 360 thousand beds more than we now have.\nRegraded Unclassified\n63\n- 3 -\nWe could build 500 health centers, and supply a full-time\nhealth service to every community in the United States. We\ncould provide full care for all American mothers and their\nbabies who need such care at childbirth.\nWe could have all of the local and State cancer clinics\nwe need. We could probably wipe out venereal disease. We\ncould almost certainly put an end to tuberculosis.\nWe could do all that, and many other things, with 10\nbillion dollars. And, in this war, we are spending roughly\nthat amount every month!\nThink of the housing we could build with 100 billion\ndollars!\nThink of the automobiles we could buy with 100 billion\ndollars!\nWe are spending the money on war - instead of cancer\nclinics, or housing, or automobiles - because Germany and Japan\nhave forced us to go to war.\nThis war unnecessary?\nThis war is necessary because the Germans and the Japs\nhave made it necessary!\nIt is necessary if we value our lives and our freedom!\nIf we forget that, we may lose both the war and our lives\nAnd freedom:\nRegraded Unclassified\n64\n- 4 -\nDrifting and dreaming along, blandly certain that nobody\nwould ever attack us, we nearly lost the war at the start.\nRemember Pearl Harbor! Remember the Philippines!\nAfter the Japs over-ran the Philippines, our troops fought\nbravely -- but that does not alter the fact that in the\nPhilippines, too, practically every plane we had was blown to\ntits on the ground.\nBelieving that this war isn't necessary, believing that\nwe don't need to hate and kill in order to win -- we can still\nlose.\nIf, as you hear me speak these words, you say to yourself,\n'Oh, but we'll win, we're winning,' then you are in the frame\nof mind which can lose the war for us.\nIt is exactly the frame of mind Germany wants us to have.\nThe German propaganda experts go to any length to get Americans\nto feel that way. They even send photographs of dead American\nflyers' graves to the flyers' mothers and fathers here in the\nUnited States. The photographs show the graves arranged in\nneat, well-kept cemeteries. The flyers' parents are expected\nto say, \"If the Germans are showing that much love and respect\nto my boy, they can't be so bad.\"\nRegraded Unclassified\n65\n- 5 -\nAnd that is just what the Germans want. They want to\nkeep as many Americans as possible from hating them -- because,\nif we don't hate them, we won't support the war. Our soldiers\nwon't fight as well. We will let them kill us more easily.\nBoth the Germans and the Japanese know it's hard for\nAmericans to learn to hate.\nAnd when you don't hate, in battle, you're easy game.\nYou die.\nIt is hard for us to learn to hate because\nWe haven't seen the enemy at work. We haven't been bombed.\nWe have seen pictures of bombed buildings in Hamburg and London;\nyes. But they have only been pictures to us. We have never\ndragged the torn bodies of our own loved ones out of bombed\nbuildings.\nThe British know what they are fighting for because they\nhave been in this war a long time. They fight savagely for\ntheir very lives; they fight to stop the Germans from bombing\ntheir homes; to keep them from killing their families. The\nBritish front line soldier slashes forward without mercy. He\nhates.\nIt took a while for our American soldiers to learn to hate.\nAt the Kasserine Pass, in North Africa, scores of Americans\ndied because they learned too late.\nRegraded Unclassified\n66\n- 6 -\nLet me quote from an eyewitness description of that battle.\nThese are the words of a private who was there. I quote:\n\"I know so well those men who were cut to ribbons at the\nKasserine Pass, and I knew why they were thrown into confusion,\npanicked by attacks, and accepted their fate almost paralyzed.\nWhen they jumped into foxholes to let the tanks roll over them,\nand were bayonetted in these foxholes by the infantry that came\nbehind the tanks, they died with an astonished look on their\nfaces, as if they wanted to ask: 'Could that be possible, would\nthey really do that?'\" (Unquote.)\nYes - it takes a long time for Americans to learn to hate.\nBut we had better learn, now -- all of us -- just as our\nsoldiers and sailors have had to learn!\nHow are we going to do it?\nIf we could visit the front it might be easier. We'd see\nan American fighter pilot, with his plane in flames, take to\nhis parachute. Then we'd watch half a dozen German planes\ncircle back and machine-gun him as he dangled helpless under his\nchute. That is German efficiency. If they can kill a pilot\nbefore he lands safely, he won't fly again.\nWhen we saw that happen a few times, we'd get over our\nnotion that the German boys are decent, honorable youngsters\nlike our own.\nRegraded Unclassified\n67\n- 7 -\nOr we might watch an American medical corps man crawl\nout to carry water and medicine to a wounded German in the\nfield. Then we'd see a German machine-gun open up and chop\nhim to Lits.\nIn the First World War there were many atrocity stories,\nAfter the war we learned that most of them were untrue. In\nthis war the conduct of the German and Japanese soldiers, day\nafter day, is more shocking than any atrocity story.\nOnly two days ago the newspapers reported that the Germans\nat Salerno were advancing under white flags of truce, and then\nthrowing down the flags and attacking our men. In this war,\nsuch contemptible treachery doesn't even shock us. I'm glad\nto say it didn't fool our soldiers. They killed the Germans\nand laughed at them!\nOnly yesterday the New York Times reported a meeting of\nleading educators of 30 nations at Harper's Ferry in West\nVirginia. Again I quote: \"As educators from Czechoslovakia,\nGreece, Poland, Belgium, Norway and China rose to tell what has\nhappened to education under Nazi or Japanese rule, the story\nwas all the same. It was a refrain of destruction, plunder,\ntorture, death and mutilation; schools have been burned,\nRegraded Unclassified\n68\n- 8 -\nlibraries sacked, scientific equipment stolen, museums closed.\nThe Nazis have succeeded in making an intellectual desert of\nthe European lands. \" (Unquote.)\nThere are no atrocity stories in this war - because every\nstory we hear is an atrocity!\nSlowly but surely, as we hear more and more of them, we are\nlearning to hate our murderous, arrogant enemy.\nWe know that at this very moment, on the beach at Salerno,\nAmerican soldiers are dying by thousands. Gone are the days\nwhen the casualty lists told of a hundred killed here, a hundred\nkilled there. We have landed on the continent of Europe. The\nwar is really beginning, for us. Italy is already a consuming\nfurnace. And the fuel the Germans are burning in that furnace\nis the life of American boys. Not hundreds, but thousands of\nour American soldiers, fighting tonight in Italy, will never walk\nagain, will never see again -- will never breathe again.\nMaybe Salerno will teach us to hate the Nazis!\nLet me quote again -- this time from John Steinbeck, the\nnovelist. He writes, from Europe: \"I have seen the hospitals\nwith mauled men, the legless and the blind\nthe fingerless\nhands and burned faces\nall the destruction that steel and\n...\nfire can do to a man's body and mind. I have seen children\nRegraded Unclassified\n69\n- 9 -\nhauled out of blasted buildings\nlumps of crushed, dirty\nmeat in pinafores\ndead, boxed and buried\ncarrion.\n\"All this,' Steinbeck says, \"is the backdrop of the Third\n\"ar Loan\nthe drive for 15 billion dollars. It should not\n...\nbe a matter of who will lend his money\nbut, rather, who\ndares not to?\" Unquote.\nAll this is the backdrop of the Third War Loan.\nYes -- yes, it is.\nAll this is why, as the Secretary of the Treasury of the\nUnited States, I must ask you to pay taxes heavier than any\nother generation of Americans has ever paid. All this is why\nT must ask you to get along with only the bare necessities of\nlife, in order to subscribe 15 billion dollars to the Third War\nLoan. All this is why I must warn you that there will be a\nFourth War Loan, and a Fifth, and a Sixth.\nI think we have reason enough to hate the Nazis. I say,\n\"Damn them to Hell -- the Hell they have created for the world!\"\nRegraded Unclassified\n#\n70\nLast night I visited the 1600 block on Berthold\nstreet here in St. Louis. Every family in this block, on\nboth sides of the street, has bought at least one extra\nhrn Bond since the beginning of the Third War Loan Drive.\nAnd\non the corner, is buying a Bmdtr match\nOn\nMr. Kemmer had bought amboal for every bond\nthat any of his neighbors hasing unusual buys.\n# I am told that this is not an block in St.\nSt.Louis\nLouis. The War Finance Committee has the effective coopera-\nAs\ntion of the O.C.D.\na result, nearly 9000 block\nworkers are covering the City of St. Louis house by house,\nblock by block, neighborhood by neighborhood.\n$ Pour I toll am you gead I\nNOV \"ghty to see this\njob being done so effectively. Let me tell you why:\nWhen we set the goal for the Third War Loan at 15\nfifts billion dollars, we knew that there would be abt\nonly one way in the world that to get that ^ money. amount of\nWe know that wild have to have person\nWe knew we would have to get people to lend the money they\nhad put away in safety deposit boxes, in sugar bowls, and\nunder the mattress. This is the money that getting.\nI Was told 8 story last night of an American of\nItalian birth, He was asked by one of his neighbors to buy\nRegraded Unclassified\n71\n-2-\nthis man\n& $100 Bond. After they had talked it over\nout\nItalian American took $10,000, his life savings\nof\nkeptulen a safety deposit box and lent it all to the\ngovernment.\nAll of this, as I say, is gratifying and inspiring.\n9\nIt is gratifying to know, too, that after only days of\nthe Third War Loan we have are well past the half_way mark/\non our\nquota of fifteen million dollars. A half hour\nago / I received the figures to date. We-have solly of\nThe\nThe\nsalve\nes of tonight ^ are nine billion dollars.\nnow,\nFor three consecutive days, we have been able to report more\n2\nthan billion dollars 8. day.\nin\nBox\nour\nfift\nSo\nof This is a brilliant record,\nI am proud of it,\nas I know we all must be.\nwe are\nBut in a sense,\nin the Third War Loan, just\nsurrendered?\nabout where we were in the war when Italy\nis a strong Landency throw Late in and consider\nthe job proctically donor\nBut-li\nIs\nThe bitter truth is\nthat the Third War Loan, like the war in Italy, has just\nbegun. From here on it will take grim determination and real\nwilling gress to go without - to\nbuy the number of Bonds you must buy.\nRegraded Unclassified\n72\n-3-\n\" Out of if 15\nworth of Bonds,\nbillion dollars we must sell five\nbillion\n6\nto individuals --\nto people like those in the 1600 block on Berthold Street.\nThat s a lot\nAnd\nthat\nis\n1\nof\nmoney.\nIt can't come out of\ncurrent earnings without\ntightening belts,\nwithout skimping\nwithout your feeling it\nNow there are & lot of people who won't want to make\nthe necessary caorifices. say ornment doesn't\n$ But the money will must the be raised, because\nneed your all this country money, nuds but 1 can it. assure night the before government last, does in\nneed whington, the * few nights I reported X our losses in\nSicily. I told you how we had lost as much as 54 per cent of\nmaterial\nsome of our materiel. All that has to be replaced; for\nA\nthis point on,\nGeneral Marshall has focured me that, from the war\nwill be an all-consuming furnace. The cost in\nlives and in equipment will be sheke and\nand\nsuckens us, $ In this past I days, we have raised\nDuring this year alone, it will sest us\nw\n9\nbillion dollars,\n$ Do you realis how much money that is?\n9TO give yeal called an up idea Doctor show Thomas much Parran, it the is,\nSurgeon General of the United States Public Health Service.\nart\nhe could do toward makes the haten hall with 9 or\nand I asked him what & hundred billion\nbillion dollars. A\nhim. He replied that if we spent only one billion dollars\n8 year for t en years,\none\nhundreth\nof\nwhat\nthe\nour\n18\nwe could\nRegraded Unclassified\n73\n-4-\nadditional\nbuild enough hospitals to give us 360,000 beds more than we\nhave now. We could build 500 health centers, and supply\nto\nfull time health service every community in the United\nStates. We could provide full care for all American mothers\nand their babies who need such care at childbirth. We could\nwe nud.\nhave all of the local and state cancer clinics\nWe\ncould probably wipe out venereal diseases. We could almost\ncertainly put an end to tuberculosis.\nWe could do all that, and many other things, with\nten billion dollars approximately as much as this was\ncosts DO every month.\non\nWe are spending\nmoney on war, instead of cancer\nclinics, or health centers, or ziin housing, or automobiles\nand homes\nbecause Germany and Japan forced us to go to war.\nmust be won\nAnsd this war\ni\nhorrible as it is,\nif\nto save\nour lives, our freedom, and our future.\nIf, as you hear me speak these words you say to\nyourself, \"Oh, but we'll win, we're winning,\" then you are\nin the frame of mind which can lose the war / for us.\nIt is exactly the frame of mind Germany wants us to\nhave. The German propaganda experts go to any length to\nget Americans to feel that way. They even S end photographs\nof dead American flyers' graves to the flyers' mothers and\nRegraded Unclassified\n74\n-5-\nand fathers here in the United States. The photographs show\nthe graves arranged in neat, well-kept cemeteries. The\nflyers' parents are expected to say, \"If the Germans are\nshowing that much love and respect to my boy, they can't be\nso bad.\"\nAdm And And that is just what the Germans want. They\nwant to keep as many Americans as possible from hating them--\nbecause if we don't hate we won't support the war. Our\nsoldiers won't fight as well. We will let them 1111 us more\neasily.\nare counting on the that that\nBoth\nhe Germans and the Japanese\nit's hard for\nAmericans to learn to hate.\nIt is hard for us to have because We haven it\nseen bed. pictures of bombod building in Humburg and Bonder been\ncombut. We have seen pictures of bombed bui dlugs in Hamburg\nand London: yes But they have only been pictures to us. We\nhave never dragged the torn bodies of our loved ones out of\nINSER?\nbombed buildings,\nThe British know what they are fighting for because\nthey have been in this war a long time. They fight savagely,\nfor their very lives; they fight to stop the Germans from bomb-\ning their homes; to keep them from killing their families.\nThe British front line soldier slashes forward without mercy.\nHe hates.\nRegraded Unclassified\n75\n-6-\nIt took a while for our American soldiers to learn\nto hate. At the Kasserine Pass, in North Africa, scores of\nAmericans died because they learned $00 late.\nLet me quote from an eyewitness description of that\nbattle. These are the words of a private who was there. I\nquote:\n\"I know so well those men who were cut to ribbons at\nthe Kasserine Pass and I know why they were thrown into con-\nfusion, panicked by attacks, and accepted their fate almost\nparaly When they jumped into foxholds to let the tanks\nroll over them, and were bayonetted in those foxholes by the\ninfantry that came behind the tanks, they died with an\nastonished look on their faces, as if they wanted to ask:\n'Could that be possible, would they really do that?\"\nYes - it takes a long time for Americans to learn to\nhate, hate, But our soldiers have done At- and non we\nBut we had better learn now all of us just as\n<<<<\nour soldiers and sailors have had to learn!\nCounty\nRegraded Unclassified\n76\n#4\n4\n6900\nLast night I visited the 1600 block on Berthold\nStreet, here in St. Louis. Every family in this block, on\nboth sides of the street, has bought at least one extra\nBond since the beginning of the Third War Loan Drive. And\nKingel\nMr. Kemmer, on the corner, is buying a Bond to match every\nBond any of his neighbors buys.\nThis is not an unusual block in St. Louis. The\nSt. Louis War Finance Committee has the effective cooperation\nof the O. C. D. As a result, nearly 9000 block workers are\ncovering the City of St. Louis house by house, block by\nblock, neighborhood by neighborhood.\nI am glad to see this job being done so effectively.\nLet me tell you why:\nWhen we set the goal for the Third War Loan at 15\nbillion dollars, we knew there would be only one way in the\nworld to get that amount of money. We knew we would have\nto get people to lend the money they had put away in safety\ndeposit boxes, in sugar bowle, and under the mattress.\nI was told a story last night of an American of\nItalian birth. He was asked by one of his neighbors to buy\n8 $100 Bond. After they talked it over, this man took\n$10,000, his life savings, out of 8. safety deposit box and\nlent it all to the Government.\nRegraded Unclassified\n77\n-2-\nAll of this, as I say, is gratifying and inspiring.\nIt is gratifying to know, too, that after only 9 days of the\nThird War Loan we are well past the halfway mark on our\nquota of 15 billion dollars. A half hour ago I received the\nfigures to date. The sales reported, as of tonight, are\n9 billion dollars. For three consecutive days now, we have\nbeen able to report more than 2 billion dollars a day.\nThis is a brilliant record; 80 I am proud of it, as\nI know we all must be.\nBut in a sense, in the Third War Loan, we are just\nabout where we were in the war when Italy surrendered. The\nbitter truth is that the real man-sized job in the Third War\nLoan, like the war in Italy, has just begun. From here on,\nit will take grim determination and real willingness to go\nwithout -- to buy the number of Bonds you must buy.\nIt is my duty to make it clear to every man, woman, and sh\nchild in the United States that the first half of the Third\nWar Loan has been the easy half. From now on it's going to\nbe hard unbelievably hard.\nRegraded Unclassified\n78\n-2A-\nOut of 15 billion dollars worth of Bonds, we must\nsell five billion to individuals -- to people like those in\nthe 1600 block on Berthold Street. That's 8. lot of money!\nIt can't come from current earnings without tightening\nbelts, without skimping, without your feeling it.\nBut the money must be raised, because your country\nneeds it. Night before last, in Washington, I reported to\nyou our losses in Sicily. I told you we had lost as much\nRegraded Unclassified\n79\n-3-\nas 54 per cent of some of our material. All that materiel\nhas to be replaced; for General Marshall says that, from this\npoint on, the war will be an \"all-consuming furnace.\" The\ncost in equipment, and их in lives, too -- will shake and sicken\nus.\nIn this past nine days, we have raised 9 billion\ndollars.\nDo you realize how much money that is?\nTo give you an idea how much it is, I called up\nDoctor Thomas Parran, the Surgeon General of the United States\nPublic Health Service. I asked him what he could do toward\nmaking the nation well with 9 or 10 billion dollars. He\nreplied that, if ate spent one billion dollars a year, for\nten years, we could build enough hospitals to give us 360,000\nadditional beds.\nWe could build 500 health centers, and supply full\ntime health service to every community in the United States.\nWe could provide full care for all American mothers and their\nbabies who need such care at childbirth. We could have all\nthe local and state cancer clinics we need. We could probably\nwipe out venereal diseases. We could almost certainly put an\nend to tuberculosis.\nWe are raising this money to spend on war, instead\nof cancer clinics, or health centers, or housing, or automobiles\nRegraded Unclassified\n80\n-4-\nand homes, because Germany and Japan forced us to go to war.\nThis war, horrible as it is, must be won if we want to save\nour lives, our freedom, and our future.\nIf, as you hear me speak these words, you say to\nyourself, \"Oh, but we'll win, we're winning,\" then you are\nin the frame of mind which can lose the war for us.\nIt is exactly the frame of mind Germany wants us to\nhave. The German propaganda experts go to any length to get\nAmericans to feel that way. They even send photographs of\ndead American flyers' graves to the flyers' mothers and\nfathers here in the United States. The photographs show the\ngraves arranged in neat, well-kept cemeteries. The flyers(\nparents are expected to say, \"If the Germans are showing that\nmuch love and respect to my boy, they can't be so bad.\"\nAnd that is just what the Germans want. They want\nto keep as many Americans as possible from hating them --\nbecause if we don't hate, we won't support the war. Our\nsoldiers won't fight as well. You won't buy Bonds \"until it hurts.\"\nThe Germans are counting on the fact that it's hard\nfor Americans to learn to hate.\nOne thing that makes it so difficult for us here at\nhome, I think, is that millions of us in the United States\nhave not been touched, per personally, by the enemy's passion\nfor murder and destruction. We know that American soldiers\nand\nRegraded Unclassified\n81\n-5-\nand sailors have been killed -- but except in relatively few\ncases, they have not been our brothers, our husbands, our sons.\nWe know what England, and Russia, and all the other countries\nhave suffered at the hands of Germany. We've seen pictures of\nthe bombed houses, the burning towns. But they haven't been\nour houses, our towns.\nThe British know what they are fighting for because\nthey have been in this war a long time. They fight savagely,\nfor their lives; they fight to stop the Germans from bombing\ntheir homes; to keep them from killing their families. The\nS\nBritish front line soldier wlashes forward without mercy.\nHe hates.\nIt took a while for our American soldiers to learn to\nhate. At the Kasserine Pass, in North Africa, scores of\nAmericans died because they learned too late.\nLet me quote from an eyewitness description of that\nbattle. These are the words of B. private who was there. I\nquote:\n\"I know so well those men who were cut to ribbons at\nKasserine Pass. When they jumped into foxholes to let the\nGerman tanks roll over them, and were bayonetted in those\nfoxholes by the infantry that came behind the tanks, they\ndied with an astonished look on their faces, as if they wanted\nRegraded Unclassified\n82\n-6-\nto ask: 'Could that be possible, would they really do that?'\"\nYes - it takes a long time for Americans to learn to\nhate, but our soldiers have done it -- and now we must learn.\nRegraded Unclassified\n83\nLADIES AND GENTLEMEN :\nToday we hanndx have had a message from President\nRoosevelt, our Commander-in-Chief.\nAs he hasx points out -- and I quote -- \"We are in\nthe midst of the Third War Loan Drive seeking to raise a\nsum unparalleled in history -- 15 billion dollars. This\nis a dramatic example of the scale on which this war still\nhas to be fought, and presents some idea of how difficult\nand costly the responsible leaders of this Government\nbelieve the war will be.\"\n(UNQUOTE)\nI may say right here that I am not in the least frightened\nby this prospect. I am sure we can get the money. Our\nnational income, this year, will be nearly 150 billion\ndollars. I am equally confident tha t the American people\nwill not balk at any cost -- because they fully realize\nthat, the more money we spent on equipment and ma teriel,\nthe fewer lives will be lost in battle.\nIt is to start meeting these huge war expenditures\nthat we set up the enormous goal of 15 billion dollars --\n3xclusive of banks -- for this Third War Loan.\nRegraded Unclassified\n84\n-2-\nare depleted.\nlaborand\nThis is & job that American industry can and will do -- and do\n10 well. It al so calls for the solution of tramendous problems\nin shipping and transportation, but by now we have proved that\nwe can tak e care of those, too. And it is 8 job that will re-\nquire so huge 8 financial transaction, before this war is ulti-\nmately won, that it staggers the imagination.\nThe coming battle for Europe will cost us billions upon\nbillions of dollars.\nI might say right here that I am not in the least frightened\nby this prospect. I am sure we can get the money. Our national\nincome, this year, will be nearly 150 million dollars. I am\nequally confident that the American people will not balk at any\ncost -- because they fully realize that, the more money we\nspend on equipment and materiel, the fewer lives will be lost in\nbattle.\nExclusive\nIt is to start meeting these huge war expenditures that we\nset up the enormous goal quota of 15 billion dollars for the Third\nSutnice of Banks\nWar Loan. It is because we have confidence in the American people\nthat we set out, during the month of September, to get 5 billion\ndollars of this bxxx 15 billion from the American people -- from\nindividuals.\nI want to be perfectly truthful with your\nI have heard it said many times that this job can not be\ndone -- that the people of the United States are too fond of their\ncomfort to skinp and sacrifice 22x -- that they do not have\nenough knowledge of what this war is about to dig down and come\nup with 5 billion dollars.\nRegraded Unclassified\n85\n-3-\nAnd I can tell you this: This defeatist attitude toward the Third\nWar Loan is being aided and abetted by enemy propagandists, who\nare busy piling rumor upon rumor. They are passing the word\naround that subscriptions are falling behind, that the Government\nwill never refund the money you put into Bonds, and even --\nand this is the most fantastic rumor of World War 2 -- that the\nwar will last only as long as people continue to buy Bonds.\ntake\nYou can/your pick of those rumors. There is not a vestige\nof truth in any of them. They are all desperate attempts on the\npart of the Axis to make the Third War Loan fail at any cost.\nWell, I have one report tonight that I should like to\npour into Axis ears. Less than an hour ago I had a call from\nWashington. I learned that the total sales reported to Washington,\nup to this time, are 9/billion that dollars mark Do you hear that\nbane passed the\ngermany\nMr.\nHitler? Do you hear it you Japan hj The American\npeople, of their own free will, have turned over to the Govern-\nmive\nment, in ton days, a total of more than 9 billion dollars.\nof billim dollars\nAnd let me tell you something else. I did some telephoning\nFederal lessue System\ntoday to the people, who are responsible for clearing, and recording,\nand reporting to Washington on the sales of these Bonds; and I\nfind that the little people of America are buying Bonds so\nrapidly that tonight in one Federal Reserve District there are literally\nwe\nmillions of Bonds backed up. This simply means that the machines,\nand men and women cannot work fast enough to keep up with the selling pace\nof the War Finance Committees.\nRegraded Unclassified\n86\n-4-\nNow all this is good news. It is testimony to the\nundisputable fact that the ordinary people of America -- those\nthat Abraham Lincoln so feelingly called \"the common people\" --\nare really behind the Third War Loan. They are like the local inion\nÀ. F. of ₺. official who came to see me today. He said: \"Mr.\nSecretary, we are doing everything we can. But that is not\nenough. I know it. I feel this war, because I have five brothers\nin it.\"\nLast night I visited the 6900 block on Berthold Street,\nhere in St. Louis. The very first day of this Third War Loan\nDrive, every family in every house on this block bought a Bond.\nAnd with typical American enthusiasm, the man whó lives on the\ncorner, Mr. Kinnel, is matching every one of his neighbors, Bond\nfor Bond.\nI wish German\nHerr Goebbels germany's the Propagandist, Number Two could have Bg Mouth\nvisited the homes on this block with me. I can secure you lie\nwould not have had & very pleasant time. He would have had &\nlesson in the American Democrabic way of life, that would.have\nshaken him down to his choos.\nThe front door of every house was open. All the lights\nwere on. All the families sat out on their porches -- from\ngrandmothers down to babies. I went from house to house, and\none man thrust forth offend 8. big friendly hand, and said: \"Hewdy,\nHank. Give my regards to Franklin when you get back to\nWashington.\"\nRegraded Unclassified\n87\n-5-\nWell, gentlemen, that's Democracy. That's our America.\nWhat How different different picture Junna y from Germany!\nThe typical block leader on Berthold Street is a fine\nAmerican woman. Everybody loved her and wanted to help her put\nthe block over the top. In Germany, the block leaders are Nazi\nparty members. They come around for contributions, with a couple\nof Storm Troopers carrying clubs and brass knuckles. They are so\nSeople 20 escaping fun\nover\nthoroughly hated that regugees say they will be the first men\nkilled when Germany has a revolution. Over there, he Germans\nelse\nsupport the war out of terror. They contribute, or eli\ndisappear into concentration campsand their famille S never see\nthem again.\nI don't know of any sigle single way to more simply or\nclearly demonstrate the difference between the @memanxNxi Nazi\nway of life and our way, than to compare the way in which these\ntwo nations are financing the war. We have no laws, nor any\nother way to force you to buy a single Bond. Yet, even before\nthe Third War Loan began, even before the block leaders started\nto work on Berthold Street, and on all the Berthold Streets\nacross the country, we already could boast that five-sixths of\nall the working people in the country had bought at least one\nBond, When the figures are finally compiled for the Third War\nLoan I am sure the number of people participating will not only\nfrighten our enemies but will greatly strengthen the morale of\nour men onthe fighting fronts. For as Colonel Elliott Roosevelt\nRegraded Unclassified\n-6-\n(latest draft) 88\nI think our way is better.\nAnd so do you,\ngo the rest of the way to our 15 billion dollar goal, nith I agree,\ncalls\nwe\nand for sacrifice a piano, if or by 8 sacrifice banksts yes beefsteak mean dinner.\ndoing without B new hat, or\nThe very people who are already doing so much for the\nwar -- sending their brothers and sons off to fight -- working\nday and night in the war plants -- are going to have to buy these\nsmall Bonds upon which the success or failure of the Third War\nLoan absolutely depends from now on.\nBut when I think of the men dying at Salerno, at this very\nwonder yetis meallya\nmoment, I dont that it 18 sacrifice/ to lend your money\nto the Government. I'm not asking you to give it. I'm asking you\nput\nto lend it, at a good rate of interest. I'm asking you to ******\ninto\nan extra $100 in B Bond that is ихайх B safer investment even than\n^\ncash, because the number of every Bond you own is registered in\nyour name at the Treasury.\nSacrifice? Tell that to the youngsters who\nlost legs, or arms, tonight Salerno! in Italy /\nhard,\nIn full realization that the job shead of us is let\nA\nme say flatly, here and now, that I am confident we will reach\nour goal of 15 billion.\nAnd if the long war xxxxxx shead makes it necessary for us\nto have a RifthxWarx Fourth war Loan, and a Fifth, end a Sixth\nandx I am confident that the American people will meet the ir\nresponsibility there also. Roalistically. Grimly. with Clam\ndetermination.\nIn the words of 8 war correspondent, writing from\n\"It should not be a matter of who will lend his noney but, rather,\nRegraded Unclassified\n89\n-7-\nunderstand\nFor we all know, now, how much depends upon us. We know\nthat we must 'Back ^ the Attack', We must make be sure, 89\nour Commander-in-Chief said todayxxxxx -- and I quote --\n\"We must be sure that we have assembled the strength to\nstrike, not XXXX just in one direction, but in many directions\n-- by land, and sea, and in the air -- with overwhelming forces\nand equipment .\" If\nThank you.\nRegraded Unclassified\n90\nTREASURY DEPARTMENT\nINTER OFFICE COMMUNICATION\nDATE\nTO\nSecretary Morgenthau\nSEP 17 1943\nFROM Randolph Paul\nThere are annexed an original and a duplicate\nof an assignment to you, by the composer, of all rights\nto the song, \"THE ROAD TO VICTORY\", subject to the\nrights of the American Society of Composers, Authors\nand Publishers. The holder of the sheet music publica-\ntion rights has agreed to turn over all profits to the\nNational War Fund and to furnish to the Treasury appro-\npriate financial statements at regular intervals on re-\nquest.\nThis transaction was arranged by Mr. Vincent F.\nCallahan, Radio, Press and Advertising Director, Nar\nFinance Division. I recommend that you execute the\nacceptance at the place indicated on both the original\nand duplicate of the annexed forms.\nBT\nRegraded Unclassified\nNOW ALL III su THESE massets, that I, the\nFRANK LUSSUM, Levels, give, transfer, assign\nEver to HENRY MORGENTHAU, Ja., as Secretary of the\nand his successors in office, the original musical\ntion written and composed by me entitled, \"THE ROAD\nTOTORY\", includin the title, words and music thereof,\nther with all rights therein for all countries and\nincluding, without limitation, the exclusive right to publish\nsaid work and to secure copyrights therein, and each and\nevery exclusive ri Lt with respect to said work embraced\nwithin any and all CO yri hts at any time existing therein,\nsubject to any ri hts of the American Society of Composers,\nAuthors and Publishers.\nIN WITNESS MEREOF, I have executed the foregoing\naffixed my seal at has angelea, in the State of\nfornia, on the 13th day of September, 1943.\n(L.S.)\nFrank Loesser\nOF CALIFORNIA\n)\nOF has angeles SS:\nOn the\n13th day of September, 1943, before me\nRANK LOESSER, to \"me known to be the individual described\nwho executed the foregoing instrument, and acknowledged\nbe executed the same.\nGeorgia Public Little\nMy Commission Expires Feb. SB, 1944\npted:\nWhynethaid Henry Morgenthau, Jr\nSecretary of the Treasury.\nRegraded Unclassified\n925\nWAR ADVERTISING COUNCIL, Inc. Smith\nPlease return\nA non-profit organization, representing all phases of advertising, created to enlist the power of advertising for victory\nJOED VERMONT AVENUE, N.W.\n60 EAST 42wo STREET\nWASHINGTON 5, D.C.\nNEW YORK 17, N.Y.\nTelephone: District 9043\nTelephone: MUrray Hill 2-2773\nNew York, New York\nSeptember 17, 1943\nBoard of Directors\nComma J. LAReest, Chairman\nDow Become\nChairman of Board\nFulls, Cone & Belding\nALLEN L BILLIPCILEY\nMr. Henry Morgenthau, Jr.\nPresident, Fuller & Smith & Ron Inc.\nMains BRITTON, Treasurer\nSecretary of the Treasury\nThe President\nTreasury Department\nMcGraw-Fill Publishing Co.\nWashington 25, D. C.\nTHOMAS D'A. Beamin\nPresident, Kenyon & Eckhanic Inc.\nA.O. ПОСКОНСНАМ\nDear Mr. Secretary:\nVice President\nClasst, Perbody & Company, Inc.\nRICHARD Courton\nI am most proud of the autographed picture which you BO\nPresident, Comptem Advertising, Inc.\nkindly sent me. It is the best \"distinguished service\nEDWARD C. DOMMELLY, 18.\nribbon\" a man in advertising could get.\nDenally & Soon\nEDWIM 5. FAIREDLY\nWhile I think we have done some very helpful things for\nGeneral Manager, The New York Sun\nthe Treasury in an advertising way, I want you to know\nKERWIN H. FULTON\nPresident, Outdoor Advertising Inc.\nthat your support and appreciation of advertising, your\nFATURRIC R. GARRIE, Secretary\nsense of showmanship, and your fundamental belief that if\nMinaging Director, American\nyou explain things to the American people they will re-\nAssin of Advertising Agencies\nKous HAVEN\nspond, all combine to make you claiment to the title\nSeation Manager, WGY\n\"Advertising Man of the Year.\"\nCARLETON HEART\nVice President and Advertising\nManager, Hiram Walker Inc.\nI know how busy you are these days, but I am planning to\nBenil W. Henson\nattend one of your rallies or broadcasts and at that time\nPublisher, The Woonsocket Call\nhope to have a chance to tell you personally what an out-\nPAUL W. KESTEN\nthe President and General Manager\nstanding job I think you are doing.\nColombia Broadcasting System, Inc.\nCHARLES G, MONTIMER, JR.\nSincerely,\nNove Problem\nKinneral Foods Sales Company, Inc.\nStuart PEASODY\nDrone of Advertising\nThe Bentin Company\nchity\nWILLIAM REVIEL\nChairman\nPartner, Newd-Emment Co.\nChester J. LaRoche\nII. W. Brogy\nbtl\nPresident, Harold H. Clapp, Inc.\nHAMP 11. THOMAS, V. Chm\nProduct, The Centaur Co.\nProvident PASS IL Wast, V, Chm.\nInstruction of National Advertisers\n-PUT E. WINGER\nExecutive Vice President\nConsell-Coller Publishing Cn.\nJAMES W. Yorko\nSenior Consultant\nJ. Walter Thompson Company\nYourn\nAdventing Director\nUnned States Rubber Cod.\nRegraded Unclassified\n93\nTHE WHITE HOUSE\nWASHINGTON\nSep.17, 1943.\nFOR: The President.\nFROM: Secretary Morgenthau.\nThink your message to Congress\nmarvelous. Right on the target.\nMy very heartiest congratulations.\n***\n8pm-mc\nRegraded Unclassified\n94\nMEMORANDUM FOR THE SECRETARY.\nSeptember 17, 1943.\nMail Report\nIn the week's heavy mail, the Declaration of\nEstimation and the Third War Loan Drive completely\novershadowed all other topics. The moods of\nletters dealing with these two matters were, of\ncourse, far apart. The Declaration brought in not\n8 single kind word, whereas the Drive brought hardly\nan unkind one. No other subject since the mail\nreport has been issued has touched the bitterness\nof the protests now being received about the\nDeclaration. These complain unanimously of the\ncomplexity of the forms and the waste of material,\ntime, and manpower in completing them. In addition\nto the protests, more than 60 filled-in 1040-ES\nForms, some accompanied by payments, were mailed to\nthe Secretary. There were also a number of informal\nitemized statements enclosing checks or money orders\nand B. great many letters asking information without\ncomment. These showed in the main complete ignorance\nof what was necessary; many naively left the figuring\nto the authors of the perplexing form, and others\njust said they couldn't understand what was expected\nand could find no local adviser to help them out.\nA dozen correspondents spoke of the hardships\nthat would result from further taxation, and a few\nstill complained of the injustice of deducting the\nVictory tax from wages earned before it became\neffective. There were occasional reports of absen-\nteeism on the part of workers who thus keep their\nwages from rises into higher withholding brackets.\nRegraded Unclassified\n95\n- 2 -\nMemorandum for the Secretary. September 17, 1943\nFour letters approved the tax program of the\nC.I.O., seven, the sales tax. An oddity was a\ngroup of three letters urging higher taxes to\nprevent the cost of the war from burdening later\ngenerations.\nBond mail was bulky with magazines, newspapers,\ntear sheets, posters, and photographs. Reprints\nof the telegram \"Will the Fall of Italy Mean Home\nFront Defeat?\" appeared most frequently in newspaper\nmaterial thus submitted. There was 8. great increase\nin the number of slogans, poems, and sales promotional\nideas received. Occasional criticism was directed\nagainst use of movie stars, the radio programs, or\nsome speakers' statements. These \"kicks\", however,\nrepresented 8. small part of the mail. On the whole,\nthe tone of Bond correspondence is sure and confident.\nThe 57 Bonds submitted for redemption represented\nsuch & small increase over the number received last\nweek, that it does not seem that the September 15 tax\npayment resulted in unusual cashing of Bonds. Employees\nof the War Department (or their relatives) continue\nto complain of the nonreceipt of Bonds paid for in\n1942. These, together with three or four from the Navy,\namounted to 52 in all.\nWith the reconvening of Congress, mail from the\nHill took a sharp upturn. Most of the communications\ntransmitted letters from constituents, and these\nfollowed the same course - tax complaints and Bond\ncomments - as those received in the Treasury.\nOf the attached excerpts, Pages 17, 18, and 19\ncontain comments on speeches and radio programs. These\nmight have been listed under Bonds Favorable or\nUnfavorable, but in view of the recent special radio\nprograms, it seemed interesting to segregate comments\nin this way.\nget orbish\nRegraded Unclassified\n96\nGeneral Comments\nMelchòr Leòn, Objectos De Arte Chino Para Regalo, Mexico,\nD.F. With reference to your letter #7092, I take the\npleasure to enclose herewith New York draft in the\namount of $180.84, equivalent of $877.05, to which\namounted the 25% of all purchases made by American\ncitizens in this store during the month of August,\n1943, that is donated to the U. S. Government for\n\"National Defense\".\nVasilios D. Economou, Dayton, Ohio. Because of the\nmany blessings received from the goodness of this\nCountry, I felt that I should make a gift to the Trea-\nsury Department. I am therefore enclosing herewith\none hundred dollars as such. Will you kindly accept\nsame, giving me your personal acknowledgment of same?\nH. D. Carper, 2nd Lt. AUS, Asst. Mess Officer, Jefferson\nBarracks, Mo. It is respectfully requested that you,\non behalf of the U. S. Government accept the enclosed\n$50.00 War Bond, made payable to the Treasurer of the\nU. S. of America, as a contribution towards the Third\nWar Loan Drive. The purchase of this Bond was made\npossible by the enthusiastic voluntary donations of\nofficers and enlisted men who are assigned to the\nReception Center Mess, Jefferson Barracks, Missouri.\nThe Reception Center Mess, I am proud to say, has a\nrepresentation of 100 percent of its officers and en-\nlisted men receiving War Bonds through the Army Class B\nAllotment Plan. This 100 percent record is also shared\nby the sections and companies of the entire Reception\nCenter.\nA. M. Wright, Treasurer, Harvard Trust Co., Cambridge,\nMass. You will find enclosed our check for $20 sent\nto you as an anonymous gift. The giver wishes the\nU. S. Government to use this for the purpose for which\nthe Third War Loan Bonds are to be used.\nRegraded Unclassified\n97\n- 2 -\nSidi Mohamed Ali Barada, Hollywood, Calif. Enclosed is\n9. check, the reimbursement for one Bond which I bought\nas a small contribution to the Treasury Department.\nBut after many difficulties I was forced to redeem it,\nand herewith I am sending the check which I received\nfor it. I do not recall where I read it, but while\nreading the history of the United States, preparatory\nto becoming an American citizen, I recall the statement\nto the effect that in wartime any citizen may make con-\ntributions to the Treasury of the United States for the\nwar effort. I have now been repeatedly told by so many\npeople that no gift of Bonds or money is acceptable to\nthe Treasury Department. I tried to buy a Bond each\nweek through payroll deductions at the Lockheed Aircraft\nIndustry and named the U. S. Treasury as my co-signer.\nBut six weeks have passed without 8. single purchase of\nBonds, only notes of rejection of my application for Bonds,\nsaying that my desire to name your Department as co-owner\nwas unlawful. # # # Please help me to do my small part\nin this war, as up to now my contributions to the Red\nCross, slogans, hours on Lockheed's final assembly line,\nseem to me all too little. Your accepting the enclosed\ncheck and any other contribution I may send will help\nme do a bit more.\nJames W. Weir, Secretary, West Virginia Publishers Assn.,\nElkins, W. Va. As you are well aware, and as you have\nmost graciously acknowledged, the newspapers of the United\nStates have given unstintedly of their space, without\ncharge, in editorials, news articles, pictures, and ad-\nvertising for war financing and the winning of the war\nfor the salvation of the country, but if I may be per-\nmitted to say so, a great many newspapers are going to\nbe handicapped in rendering such 8. service by a ruling\nof the Post Office Department which provides that where\na weekly paper is owned by B. daily paper, published in\nthe same plant, the weekly paper cannot pick up the type\nof the daily unless the major portion of the front page\nin the weekly is different from that of the daily, and\nunless one-sixth of the inside pages are different. For\nsuch a ruling there is no law, as the Post Office Depart-\nment admits. I am submitting the matter to you as the\nRegraded Unclassified\n98\n- 3 -\nhead of another Department 80 that you may know the\nhandicap placed by the Post Office Department on many\nnewspapers insofar as cooperating with the Treasury\nDepartment is concerned. ###\nM. L. Long, Long & Freeman, Attorneys and Counselors\nat Law, Jacksonville, Florida. Of course you make the\ncoins, but I want to tell you your new pennies are the\nworst things you ever put out. It is almost impossible,\nwithout the aid of 8. microscope, to tell whether they\nare dimes or pennies, and the amount of kicking about\nthem here is amazing. I suggest the next ones you make,\nyou either change the size of them or put in some color-\ning matter so they will not look so much like dimes.\nI understand also that the penny vending machines throw\nthem out. I do not know that personally, because I have\nnot tried it, but I have heard it.\nRegraded Unclassified\n99\n- 4 -\nFavorable Comments on Bonds\nRose Brown Bracy, Field Secretary of the National\nNegro Business League, St. Louis, Mo. Your address\ndelivered to the National Negro Business League in\nBaltimore W&S as far reaching in its healthful in-\nfluence as it was from 8. geographic angle. 4b * #\nI wish to express my appreciation of your message,\nand I hereby pledge my cooperation to make my people\nconscious of OUR country's need, which will be ex-\npressed through cooperation with any program you\ninitiate. Enclosed is my check for $37.50 for a Bond,\nand a subscription for 8 monthly purchase of the same\ndenomination for at least 8. year.\nA. A. Arbetter, Arbetter Ribbon Company, Chicago, Ill.\nWith the Third War Loan Drive now under way, we thought\nyou might be interested in the little sticker we have\ncreated for use on our circular mail. We actually buy\n$15.00 worth of War Stamps every time we send 1,000\npieces of mail to our trade. # * # Perhaps others might\nlike to adopt this idea, which is entirely original\nwith the writer, and which he is submitting to you to\nuse in any manner you desire. % # (The sticker reads\nas follows: \"The postage we save sending you this un-\nsealed letter is invested in War Savings Stamps.\"\nGabriel Lowenstein, Chairman of the Board, Fred Fear &\nCompany, Quality Food Products, Brooklyn, N.Y. This\nCompany would like very much to subscribe to the Third\nWar Loan. The individuals of the Company are subscrib-\ning personally. We come under the classification of\nSmall Business, and we have now tied up with the Treasury\nDepartment as of this date, about $100,000.00 in refunds\ndue us on Alcohol purchases since the inception of the\nnew tax law. Quarterly reports from the inception of\nthe law in November, 1942, to and including June 30,\n1943, have already been filed with the Treasury, and the\ntotal of such reports filed represents $56,094.06. The\nRegraded Unclassified\n100\n- 5 -\nbalance of the $100,000.00 above referred to will be\nfiled as of the September 30th quarterly report. #\nWe would like to convert all of the refund due us, or\nas much of it as you will permit, into the purchase\nof the Third War Loan issue 1964-1969. Will you\nplease advise if this can be arranged, and no doubt\nmany others could be induced to take Third War Loan\nissue Bonds in settlement of their refunds.\nCharles B. Dulcan, Sr., Vice President and General\nManager, The Hecht Company, Washington, D.C. I want\nto thank you for your kind and generous note which\narrived this morning and for your commendation of\nour publicity activities in support of our country's\nwar effort. I need not tell you that we are striving,\nas you are, to lend every ounce of energy and zeal to\nhelp bring about complete success of the Third War Loan\nand the total fulfillment of your plans. Consequently,\nyour expression of approval is received wi th deep satis-\nfaction, and I want you to know that I am grateful for\nthis friendly and courteous gesture on your part.\nRegraded Unclassified\n101\n- 6 -\nUnfavorable Comments on Bonds\nA. D. Shamberg, Auditor & Accountant, Telephone Build-\ning, York, Pennsylvania. # # Form P.D. 1787, in\naddition to requiring the signature of the owner of\nthe Bond, requires the signature of the beneficiary,\nconsenting to the change of beneficiary. This latter\nrequirement is very embarrassing; it would appear the\nTreasury Department would have foreseen the absurdity\nof such a requirement. In the case at hand, as would\napply in countless others, the beneficiary has no knowl-\nedge of his potential benefits. Since he has no in-\nterest in the Bond, why must he consent to any change\nof beneficiary? In the course of one's life, reasons\nmay necessitate the change of beneficiary to his estate\nperhaps many times. Was the embarrassment to the bene-\nfactor given any consideration in devising Form P.D.\n1787 in requiring that the beneficiary, in the presence\nof an authorized certifying officer, consent to being\ndeprived of the potential benefit by having to sign the\nform? # #\nWallace Odell, Westchester County Publishers, Inc.,\nYonkers, N.Y. I noticed today that you sent 8. three-\npage telegram to all papers about a special advertise-\nment on the War Bond Drive. This must have tied up a\ngreat amount of the telegraph companies' facilities.\n* \" # I think if you had offered this copy to the three\npress associations -- A.P., U.P., and INS., that they\nwould gladly have put it on their trunk lines, thus\nsaving a lot of time, expense, etc. Their services\nreach all papers. It is a suggestion and made only\nwith the thought of being helpful in case such a situa-\ntion arises in the future.\nCharles F. Andrews, Adjutant Quartermaster, Veterans\nof Foreign Wars of the U.S., Alexandria, Virginia.\nAt a regular meeting of Post #609, VFW of US of Alex-\nandria, Va., September 7, some pictures of dead American\nsoldiers published in the Washington Daily News, were\nRegraded Unclassified\n102\n- 7 -\nshown. After various discussions it was regularly\nmoved and seconded that this Post go on record as pro-\ntesting the publishing of this kind of pictures in the\nfuture. We understand these pictures were published\nto arouse the public to subscribe more heartily to\nthe Third War Loan Drive to start this week. It is\nour belief that pictures of this sort are more harmful\nto the morale of the home front than good.\nR. A. Avenius, White, Weld & Co., N.Y.C. Last night\nI listened to your appeal over the radio, also that of\nPresident Roosevelt! As I was listening it came to my\nmind that perhaps a little check-up on the War Bond\nDivision of the Army Service Forces might not do any\nharm. My son, Rodney G. Avenius, enlisted in the Service\nin August, 1942. He contracted to buy a $25.00 Bond each\nmonth, and the money has been taken out of his pay each\nmonth. Up to this writing one Bond has been received,\ndated October, 1942. Since then nothing has come with\nthe exception of a Form Letter which I am enclosing.\nI have written various times to the War Bond Division\nin Chicago asking for some information, and this same\nForm Letter comes back every time. Personally, I do not\nsee how the desire of the soldiers to buy these Bonds\ncan be maintained if the Bonds they buy and pay for are\nnot sent to their families.\nJ. L. Harris, President, Security National Bank, Cairo,\nIll. The Treasury Department has requested the banks\nnot to ask 8. service charge for sending in War Savings\nBonds to Federal Reserve Banks for redemption. I think\nthis would encourage more people to cash in their Bonds.\nPeople who cash in Bonds lack patriotism, and should pay\nfor service rendered by the banks. We have instructed\nour personnel to try to discourage people from cashing\nBonds, and to offer to lend them a limited amount, which\nthey can repay weekly or monthly. Ninety percent of the\npeople could keep their Bonds if they did not buy that\nwhich they could do without for the duration of the war.\nMany have larger wages than they ever dreamed of earn-\ning and are spending it freely. I believe that people\nRegraded Unclassified\n103\n- 8 -\nshould be discouraged in cashing Bonds and that news\nbroadcasts should be sent out, saying it is unpatriotic\nto cash in Bonds instead of helping finance the war,\nwhile our boys are giving their lives to win the war.\nThe percentage of Bonds cashed in may be small, but it\nshould be less. My observation of this practice in our\nbank is sufficient evidence. Why print Bonds, have\nbanks sell them, and then cash them in sixty-days later.\nAll this is expense and time lost. It should be dis-\ncouraged by sufficient charge to justify the banks for\ntheir time and effort. #\n*\nHarry L. Augusta, Framingham, Mass. Last night in your\nbroadcast you stated that Mr. Winston Churchill pur-\nchased the first War Bond on the new Drive which opened\nthis week. Now the following question comes up. A friend\nof mine who is a pilot in the British Air Service tried\nto buy some Bonds recently but was told that he could\nnot because he was not an American citizen. Is there\na distinction between Mr. Churchill (British subject)\nand my friend (British subject)? My friend had in mind\nthe fact that after the war he would like to settle here\nand his savings in War Bonds would help him out, but he\nfelt rather sheepish to find he could not because of his\nnationality. This question will arise many times in the\ncoming months and I feel that if one nationality is at\nliberty to purchase Bonds, then all persons of that\nnationality should be allowed to do SO.\nMrs. E. L. Edwards, Johnstown, Pa.\nI\nhave\na\nsister\nworking in New Cumberland, Pennsylvania, at the Induction\nCentre, packing soldiers' clothes. She has worked there\nfor 14 months and they are compelled to buy War Bonds\namounting to $12.50 in six weeks. In all these months,\nmost of the girls have not received either the Bonds or\na receipt to show what they have paid out, and they can\nget no information about them. Isn't this a little\nirregular? Most every one whom I know in civilian life\nRegraded Unclassified\n104\n- 9 -\ngets their Bonds as soon as they are paid for. Most\nof these girls and women are in very modest circum-\nstances, and when they are willing to buy them, surely\nthey should get either the Bonds or B. receipt. # #\nJames Bly, Brookhaven, Ga. Today Mrs. Bly and I walked\nto our little Post Office to buy a $100 War Bond, but\nthe clerk would not accept our personal bank check,\nalthough they were very kind and considerate -- \"We\",\nthey said, \"have orders not to take personal checks\".\nWe have no Bonds and we do so much want to loan our\nmoney to this Third War Loan Drive. If a Postmaster\nknows a citizen, and knows his check is good, why doesn't\nthis branch of our Government cooperate? If necessary,\nthe Postmaster could run this check through the clearing\nhouse in two days; they then could mail us our Bond.\nI don't think it would take an Act of Congress for the\nPost Offices to be helpful in this grim time.\nOscar Lange, Washington, D. C. $ My wife and I went\nlast night to the exposition grounds fully enthused to\n\"Back the Attack\", and bought two $100 War Bonds for our\ngrandchildren. We inquired for tickets to the show in\nthe Arena there and all over the place there were none\nto be had and no one could tell us where or how we could\nget any. Now it is the people's money that is being\nspent, and the people should enter on the basis of first\ncome, first served, and not on the basis of democrats,\nbureaucrats, or Government employees -- very likely 50%\nof all those who gain admission have not bought any extra\nBonds. While standing for almost an hour to get in,\nthere was quite some talk in the crowd of tickets being\npassed out freely in the different Government Departments,\nwhich is not FAIR.\nO. H. Lachenmeyer, Publisher, The Cushing Daily Citizen,\nCushing, Okla. We have your four-page telegram of\nSeptember 9, suggesting a page display ad for the\nThird War Loan. We will make an effort to have it\nRegraded Unclassified\n105\n- 10 -\nunder-written in a local way. We find these pages in-\ncreasingly difficult to sell. The firms feel that they\nare called upon to purchase the maximum amount of Bonds\nand should not likewise be asked to buy the display\nspace. We feel that it is asking too much of the news-\npapers, with all of the news publicity that they give,\nto run this advertising free. Did the telegraph company\nsend this four-page telegram without charge? Do the mat\npeople make your mats without charge? 42 * * Smaller news-\npapers of the nation are facing the most critical time\nin their history. It is fast becoming a question,\nnot of whether newspapers are willing, but of whether or\nnot they can continue to do all that they are being asked\nto do, at their own expense. We feel that the\nTreasury Department represented by you, is taking very\narbitrary stand in opposing paid display advertising\nby newspapers. Because they accepted pay from the Govern-\nment for & commodity that they sell every day would not\nmean that they are being subsidized, any more than any\nother manufacturer of a staple product. #\nPhilip L. Soljak, San Francisco, Calif. I am a New\nZealander, employed by the British Ministry of War Trans-\nport in San Francisco, and have been very happy to invest\n10% of my salary in U. S. War Bonds. However, I have\nbeen disturbed by frequent remarks made to me by American\nfriends that War Bonds \"may not be worth much after the\nwar\", and that for this reason they are not putting more\nthan they can help into Bond purchases. They base this\nbelief on the fact that Liberty Bonds depreciated after\nthe last war, and that a repetition may be expected.\nThis unintentional encouragement of Axis propaganda is\nindulged in by people of educational and professional\nstanding who ought to know better. None of those I know\nhave any Axis contacts or relationships, but are of\n\"Anglo-Saxon\" American stock. + * # Personally, I have\nas much confidence in U. S. Bonds as I would have in\nBritish or Dominion Government stock. However, I feel\ncertain that the spread of this dangerous talk is damag-\ning the sale of War Bonds, and inducing many people to\ncash those they have purchased. I would like to suggest\nRegraded Unclassified\n108\n- 11 -\nthat your public relations department check on this\nsituation and take the necessary measures to correct\nit. # * #\nW. H. Fletcher, Pittsburgh, Pa. In the news reel at a\ntheatre the other night Mr. Churchill was shown as\ngetting the first Bond under the 3rd War Loan. Mr.\nChurchill being Prime Minister of England is not B. U.S.\ncitizen nor a resident. How can he own one of these\nBonds? When I started to buy them two years ago, I\nwanted them to be issued in mine and my sister's name\njointly, or as co-owners, but this was turned down\nbecause, while I am a U. S. citizen, she is a Canadian\n(living in Canada), and because she is a Canadian, and\nno Bonds can be sold other than to U. S. citizens,\nI had to have them issued in my name solely.\nE. W. Newman, Chairman, 3rd War Loan Campaign, Stone Wall\nDistrict, Shen County, Virginia. (Telegram) Due crop\nshortage with apples should be good prospective buyers\n3rd War Loan Bonds. Present harassment by Washington\nheading entire industry toward calamity and apples now\nfalling while alphabetical administration organizations\nfiddle and play, regardless of nature. Orchard industry\nwill not only suffer, but also consumer account of in-\ndifference, etc., on part of OPA and others. Sixteenth\nset for release of prices. This too late. However,\nshould not be delayed one minute. Use every ounce of\nyour influence and efforts; have decision made and\nannounced no later. May be able yet to place Bonds with\norchardists before end of drive.\nRegraded Unclassified\n107\n- 12 -\nFavorable Comments on Taxation\nCopy of letter addressed to Senator McKeller by Leon\nFerguson, Memphis, Tenn. I have noticed newspaper\nstories about possible new taxes to help pay for this\nwar; also the Third War Loan Drive is now under way,\nand I want to let you and some of the other Senators\nand Congressmen know what I think about all this. *\nNaturally, I don't want to pay any more taxes than I have\nto, but this war has got to be paid for and I think we\nshould make an effort to pay a greater part of our war\ncosts as we go along. # # # If prosperity continues for\na few years after the war's end, that's fine; we can con-\ntinue to pay high taxes. * # * On the other hand, if we\nhave a depression and can ill afford to pay high taxes\nout of reduced income, we will have a good part of the\nwar debt out of the way. Thus I feel that I would rather\npay as much as I can stand now than later on when I might\nnot be as well off. I have read that Senator George\nthinks the American people cannot stand any more taxation,\nbut it's my opinion we can stand higher income taxes. ++ #\nWe know the war has got to be paid for and I guess we\nmight as well get the unwelcome job over with as fast as\npossible. # * * And in this connection, I have one special\nrequest that every taxpayer will welcome wholeheartedly,\nplease have the Treasury Department use some sort of\nsimplified income tax return form, and don't make it too\nhard for us to figure our taxes out.\nRegraded Unclassified\n108\n- 13 -\nUnfavorable Comments on Taxation\nAlvin F. Harlow, 382 Wadsworth Avenue, New York City.\nI am sending with a copy of this letter my \"Declara-\ntion of Estimated Income and Victory Tax\" for Sept.\n15 to the local tax collector, and I wish to take\nthis opportunity of going on record as protesting\nagainst this absurd and impossible requirement. My\ntotal income so far for 1943 has actually been only\nabout $500.00. I have & new book published this\nsummer, but I have no more idea how many copies of\nthat book the public is going to buy during the re-\nmainder of the year than I have of knowing what will\nhappen to me, if anything, beyond the grave.\n#\nUnder such conditions, how on earth can I guess what\nmy income will be during the remainder of the year?\nAnd yet I am told that I will be penalized if I guess\nwrongly. # # I shall hold a copy of this letter as\nproof that I warned you of the impossibility of comply-\ning with so nonsensical a law. It is feasible for a\nman who is on B. regular salary, but not for the rest\nof us.\nHerman Krohn, Public Accountant, Easton, Pa. It has\nbeen my privilege to deal with the Internal Revenue\nDepartment over a period of 28 years that I have been\nin public practice. Never before has my work become\nso burdensome and impossible of performance as it is\nat this time in connection with the preparation of the\nDeclaration of Income and Victory Tax due September 15.\nWe are short of help in the office and cannot obtain\nrelief. In addition to this work, my office is also\nengaged in assisting the various clients, some in the\ndefense industries, in meeting with Government repre-\nsentatives in re-negotiation conferences and much other\npaper work from other Government agencies. The situa-\ntion is impossible of solution, except if 8. 30-day\nblanket extension is granted by you for the filing of\nthe September 15 returns.\n+\n#\nWe are doing the best\nRegraded Unclassified\n109\n- 14 -\nwe can, but physical and mental endurance under\npressure of a tremendous amount of cumulative paper\nwork is becoming unbearable.\n*\n#\nHarry A. Trumbore, Brown & Bigelow, Remembrance Advertis-\ning, St. Paul, Minn. Recently I received as a prize\nfor work well done, a Bond, $50.00, in reality, only\n$37.50 in cash. On this Bond the company collected the\nsum of $9.38 in taxes. Which means 25% of the real\ncash value of Bond. Have had them re-check this sum,\nand they insist it is correct. Please advise what the\ncorrect tax should be, was not aware of any tax at all,\nhad not paid it before. They say this amount is made\nof the Social Security tax on Bond, never heard of such\nS. thing. Please clarify and state source of tax, etc.,\non Bonds given as gift by company for whom person is\nworking.\nCopy of letter addressed by Arthur J. Chadwick, Phila-\ndelphia, Pa., to the Editor of the Philadelphia Record.\nKnowing that one of the requirements of newspaperdom is\nto express thoughts clearly, I ask that you render unto\nthe public an understandable interpretation of Mr.\nMorgenthau's #36206 wherein I find the following lan-\nguage: \"Generally speaking you will not have to file\nthis declaration or make a payment on September 15 if\nyour wage or salary is subject to withholding, and if\nyour income is not more than $2,700 a year if single,\nor more than $3,500 a year if married. Yr I have not\nbeen able to find any two people to agree as to what\nis meant by the above. One says that if your wages\nare subject to withholding, then in no event must you\nfile a Declaration or make & part payment. Another says\nthat if you are single and your wages are less than\n$2,700 per year, the same is true. The third insists\nthat any married person making more than $3,500 need\nfile no Declaration. From which the professor says\nthat 8 Declaration need be filed and a payment be made\nRegraded Unclassified\n110\n- 15 -\nonly by single and married men with incomes between\n$2,700 and $3,500. The question is: Who is right?\nIf no one of the four, please have the Philadelphia\nLawyer give his answer. Incidentally, the public\nwould like to know what salary Mr. Morgenthau's lan-\nguage expert receives for his aptitude in setting forth\nsimple ideas in the language used.\nFred Damrau, N.Y.C. $ # # I am a member of the Police\nDepartment of the City of New York. In 1939 I was sus-\npended without pay and remained so until February, 1942,\nwhen I was re-instated and back pay for this entire\nperiod was given to me. \" # # In February 1942 I was\ngiven all my pay. Thus my earnings, which are the\nbasis of income tax, were given to me in 6. lump sum of\n$7,500, and during the balance of the year I earned\nenough to top $10,000. I did not earn $10,000 during\nthat particular year. # # Your office at 1 Hanson\nPlace, Brooklyn, says I earned over $10,000 in one year\nand must pay at this rate, instead of permitting me to\nfile each year separately. This will cost me an extra\n$564.47. If I were to file this figure I would be com-\nmitting perjury -- I am required to file on annual\nearnings -- my annual earnings are fixed by law at\n$3,000.00. I put this matter to an Appeal Board. They\ndecline to rule and inform me I must go into the Tax\nCourt. This will cost me about $200, which I do not\nhave. Also, bear in mind that during my suspension\nperiod I did not file any return on any other income\nbecause I did not earn enough. # # # Every available\nGovernment official that I have been able to contact\ninforms me that the procedure is unjust, but inasmuch\nas one agent decided I am in the $10,000 per annum class,\nI must pay accordingly. This ruling is outrageous; it\nis not even common sense. Am I to have no defense with-\nout going to borrow more m oney to pay legal fees?\nR. G. Lochiel, Treasurer, Pennsylvania-Central Airlines\nCorporation, Washington, D. C. It has been brought to\nthe attention of the management of Pennsylvania-Central\nAirlines that an alarming number of our hourly-rate\nRegraded Unclassified\n111\n- 16 -\nemployees are absenting themselves from work when their\nearnings have reached the top of a wage bracket, in\norder to avoid the additional withholding tax which would\noccur if these employees worked additional hours. In\nmany cases, employees actually draw a larger pay check\nby this stoppage, the pay for the additional hours being\nless than the withholding tax difference between the two\nbrackets. # # * If your Department has prepared any\nmaterial which could be used, or has any suggestions to\noffer to combat this unpatriotic waste of time, this\ncompany would be very grateful to hear from you.\nLemuel A. Boyce, Peach Bottom, Pa. I received your\nnotice asking for an estimate of my income tax for 1943,\nor, as per 1942, whichever is the greater. I have not\nmade more than $2.50 in 1943, since January 1, 1943, on\naccount of sickness. Will my income tax be the same as\nit was in 1942 when I made about $1,400, and where is\nthe money to come from to pay said tax? * # #\nRegraded Unclassified\n112\n- 17 -\nComments on Speeches & Radio Programs\nJ. S. Marie, Philadelphia, Pa. That well-known \"beer\ngarden\" comedian who preceded you and the President\nlast night during the Invasion Bond selling campaign\nwas & very poor representative for the Treasury Depart-\nment inasmuch 8.5 he used propaganda invented by the\ngambling racketeers, and these latter, I think you\nshould know, are mostly fascists in America. He prob-\nably got a high price from the gamplers for taking the\nspotlight on a U. S. Treasury Department program in\nwhich both the President and the Secretary of the\nTreasury participated.\nHarriot T. Cooke, Washington, D. C. Do you really think\nthat the American people are appealed to by such maudlin\nprograms 88 that of the Treasury last night? # #\nI have a son-in-law and a grandson at the front.\nThey are patriotically serving their country and I am\ntrying to do my bit in the only way I can at over three\nscore years and ten. In the last war I was Vice Chairman\nof three Liberty Loans (Women's Division, Orange, N.J.),\nand Chairman of the Victory Loan.\nQuite\nfrankly,\nthe appeals of Hollywood stars would have left me cold\nthen R.S they do now. Let's put this thing on a higher\nplane -- not on emotionalism, but on one of realistic\napproach to what each of us is fighting for -- \"our life,\nour liberty and our sacred honor.\nPostal Card from Mrs. E. A. Giard, Willmar, Minn. Except\nfor the President's address and yours, what a sad program\nyour Bond Drive program was. Why do you have to have\nmediocre talent like that? Why can't we have something\ndignified, beautiful and moving, worthy of a great national\ndrive?\nJ. Henry Haggerty, N.Y.C. Regarding the program of Sept.\n8th promoting the sale of War Bonds. Whoever wrote the\nRegraded Unclassified\n113\n- 18 -\nscript of this program either didn't know what he was\nsupposed to put across, or he avoided the issue to gain\na few laughs. The program, I understand, was to arouse\nthe public to purchase War Bonds. An attempt was made,\nby means of B. battle-front skit, to show the sufferings\nand hardships of our soldiers \"over there\"; dramatic\nmusic and moving commentary accompanied. But just as soon\nas we had realized the seriousness of the war and had\ncome to realize also that we \"home-fronters\" were being\ntoo complacent about the whole thing, some writer decides\nto fill up time or get some cheers for a few laughs by\nthrowing in George Burns and Gracie Allen. These two\ncertainly put on a humorous act; but their jokes removed\nthe serious and contemplative mood instilled in our minds\nby the previous dramatic skit. Consequently, the first\nskit was forgotten. Again a soul-stirring drama was\nportrayed; and was followed by Edgar Bergen and an un-\nspirited rendition of an uninspiring song called \"Praise\nthe Lord and Pass the Ammunition\". Each time our minds\nwere worked up to 8 bond-buying pitch, boom, some fri-\nvolity would ruin it all. The whole affair was ridiculous.\nIt is no way to arouse people to buy Bonds. Either give\nthem free laughs, or make them realize the seriousness of\nthe national emergency. I realize that it is too late now\nto do anything about that broadcast, but when you begin\ncampaigning over the radio for the Fourth War Loan, please\nhave your program manager use a little common sense.\nVr. S. Bezuhly, Hillside, N.J. The night of September 7\nI heard the official opening of the Third War Loan over\nthe air on the \"Cavalcade of Stars Program\". I heard you\nand our President make a plea to the people to invest\ntheir money in War Bonds to help put over the $15,000,000,000\nquota. Your words gave me an inspiration to write about\nthis loan. You will do me a great honor in reading the\nenclosed poem.\nHobert A. Sutherland, Wilmette, Ill. I have just heard\non the radio a few minutes ago an announcement stating,\n\"This is the Treasury of the United States, and we now\nRegraded Unclassified\n114\n- 19 -\nintroduce So-and-So's Jazz Band\", or word to that effect.\nWhereupon followed a cacophony of outrageous sounds, with\nan occasional appeal to buy Bonds. This is to advise that\nI most strenuously protest, as I am sure millions of\nAmericans do, the use of tax money or any part of the\nproceeds of Bond sales in paying for the use of jazz bands\nto endeavor to promote sales of Bonds. Our honored dead\nwould turn in their graves if they knew that the U. S.\nGovernment had descended to such lack of dignity in pro-\nmoting what should be and I am sure is with nearly all\npeople, a patriotic, conscientious and dignified duty.\nJohn Gray, Los Angeles, Calif. (Telegram) Local papers\ndo not have full text of your address. It is very nec-\nessary that the full text be sent from your office at\nonce because we want to put it into the hands of 12,000\nmen in the Los Angeles Ship Building and Dry Dock Corp.\nat Sen Pedro. It was an inspiring speech and just what\nthe home troops needed. We want to emphasize it in con-\nnection with not only our Bond Drive but in the actual\nreplacement of equipment gloriously lost. Send to Room\n713, Broadway Arcade Building.\nMrs. Mary Woodhull Stevens, Haddon Heights, N.J. ***\nMay I tell you that your message of last night to our\ncitizens stirred my heart to its patriotic depths. Every\ntime I contemplate Thomas Jefferson's life, I love and\nadmire him the more. Wish I had your splendid message\nin type to read and re-read. ***\nRegraded Unclassified\n115\nADDRESS BEFORE THE\nNATIONAL ASSOCIATION OF SUPERVISORS\nOF STATE BANKS\nIN CINCINNATI, SEPTEMBER 17, 1943\nBY\nMARRINER S. ECCLES\nCHAIRMAN OF THE BOARD OF GOVERNORS\nOF THE\nFEDERAL RESERVE SYSTEM\n\"THE DUAL SYSTEM OF BANKING\"\nFOR RELEASE WHEN DELIVERED\nAT 2:15 P.M.\nRegraded Unclassified\n116\nTHE DUAL SYSTEM OF BANKING\nWhen your President, Mr. Perry, wrote to ne in July inviting me\nto attend this annual convention of your Association, he told me that he\nwished to build the program around this central theme:\n\"In the wartine and postwar eras, how far, and by what means,\nis it desirable or possible to preserve the dual system of banking?\".\nThat is an important and challonging subject. It implies that\nthere are two sides to the issue. It implios that you are willing to hear\nboth sides. I could, of course, be politic and say only what I think you\nwould prefer to hear, but I doubt that your invitation to ne was based upon\nthe assumption that I would appear here as EL champion and defender of the\ndual system. On the contrury, I imagine that you expected me to play the\nrole of the devil's advocate, though, of course, as I see it, I am on the\nside of the angels. On one thing, however, we can agree. As public officials\nresponsible for banking regulation, we all want B. strong and successful\nbanking system. It cannot be strong unless it is successful. We all favor\nwhat we believe to be in the public interest. And what, in fact, best serves\nthe public interest will survive in the long run.\nAs B. one-time banker and then as a sharer of the numerous super-\nvisory headaches with which you are all familiar, I have known a good many\nof the State supervisors well and favorably, despite their tendency to\ndiffer with my views. So fur as I am aware, I have never succeeded in con-\nverting any of them to my viewpoint, notwithstanding the cogency of the argu-\nnonts on my side of the case. So I will be noither surprised nor dis-\nappointed if in this session you are not won over to my side. Nor is there\ncause for alarm lost your commissions be swopt suddenly away, for this is a\nnost venerable issue, this question of the dual banking system, and the re-\nlated issue of branch and unit banks. In all probability wo, or our suc-\ncessors, will still be debating these issues far into the post-war world.\nEconomic forces and modern needs, rather than what may be said here, will\nultimately determine the character and functions of our banking system.\nIn what I have to say I can speak only for myself. I am well\naware that the division of opinion on questions of unification and branch\nbanking extends beyond State boundaries into the Federal banking agencies,\nincluding the Board of which I am but one member, But I am confident that\nthe cordial and cooporative relationships which have existed between the\nFederal Reserve and the State banking authorities will not be marred because\nI happen to believe in & unified banking system and in well-regulated branch\nbanking limited to trade areas.\nOur banking structure has had a piecemeal growth throughout our\nhistory. It reflects the cumulative efforts of public authorities, State\nand national, to meet recurrent emergencies and to deal with specific\nproblems and competitive conditions. It has not been developed in accordance\nRegraded Unclassified\n117\n- 2 -\nwith any comprehensive plan based on the country's banking needs taken as a\nwhole. As the country expanded, its need for money and credit grow. In\norder to supply those demands, banks were formed in the quickest and easiest\nmanner possible, with little or no direction or regulation, until abuses\nand difficulties arose, We all know that the history of banking in this\ncountry is filled with crises and disasters, with fulminations and fumblings\nfor reform. What has developed hardly justifies the term \"banking system\".\nAlthough we can now have far more confidence in the soundness of our banks\nthan at any time in the past, further improvements are urgently needed.\nThey will cone about, no doubt, in the future as in the past by gradual\nsteps. To those who believe, as I do, that it is not in the best interest\nof the public or of the private banking system to maintain things BS they\nare, the process will seem painfully slow.\nThe first duty of the Government, as I see it, is to create 6.\nclimate and fi condition conducive to EL maximum of sustained private pro-\nduction and employment. Its next obligation, inescapable in the modern\nworld, is to provide the opportunity for employment, in a way that will\nstimulate and not impede private enterprise, at such times 85 deflationary\nforces endanger economic stability. Conversely, its powers must be used\nto offset inflationary developments at the other end of the cycle. In\nother words, Government can and should be an economic balance wheel, help-\ning to keep the economy going aliead on an even keel.\nThe most important governmental powers affecting economic sta-\nbility are fiscal and monetary. Most of us recognize that it is essential\nin wartime to have close coordination between Government policies and those\nof the banking system. The banking system fully subscribes to the ob-\njective of financing war costs, not covered by taxation, by borrowings from\nnonbank sources. It is clearly recognized that the banks should finance\nonly that residue of war costs which cannot, or at least are not, met by\ntaxing and borrowing from the public. There is general acceptance both of\nthe policy of maintaining approximately the present pattorn of interest\nrates and of limiting Government obligations purchased by the banks to\ncortain types and maturities of issues. Central banking operations have\nat the same timo supplied the banking system with such additional reserves\nus are necessary to effuctuate those policies.\nEssential as it is in the national interest to have this high\ndigree of coordination in fiscal and monotary action in wartine, it is\nequally important from the standpoint of national economic welfare to con-\ntinus it in poacotine. Looking to the futuro, the Fedoral Government is\ndestined to play a crucial rolo in the maintenance of oconomic stability.\nIt is difficult to sue how ita basic functional powers can be offectively\nmployed to this end so long as the nation's banking machinory 10 to hodge-\npodgo of some fifty-two difforent jurisdictions, laws, and suporvisory\naconoios, so long us approximately half of the banks of the country are\nsubject to uniform contral banking policy and half are not, so long us\nRegraded Unclassified\n118\n- 3 -\nthese multiple agencies, State and Federal, with their differing philoso-\nphios, divided and conflicting policies, dominate the banking picture.\ntille coordination is extremely difficult, admirable efforts have been made\nin this direction. They are in reality an admission of the need for uni-\nfication of banking regulation and for clearly fixing responsibility where\nthose who bear it can be effective and be held accountable.\nThe sovereignty of Government over the nation's money supply is\nbeyond challenge. It is clearly recognized and declared by our Constitu-\ntion. Denand deposits, as you all know, have become in the past sixty\nyears the major part of our money supply. Control over their expansion\nand contraction should reach to all banks that are in a position to create\nthen, Banking reserves which limit the money supply are thus crucial. It\nfollows that reserve requirements should be made applicable to all banks\nof deposit. It is inequitable B.G woll as ineffective that only the mumber\nbanks of the Reservo System are subject to changes in such requirements\nchile those banks which elect to remain outsido the System, or those which\nare now mumbors und which choose to withdraw, can escape sharing in what\nis B national rosponsibility.\nThilo it is true that somo Statos voluntarily sot the samo ro-\nservo requirements for nonmumber State banks that are fixed for member\nbanks, the Stato banks are pormittod to count vault cash and to carry their\nreserves as deposits with other commorcial banks, This has a very difforent\nmonutary offect from carrying those reservos with Fodoral Roservo Banks. Ro-\nserves curried with Fodoral Rosorvo Banks are ontiroly unavailable for lond-\nthe but only twenty por cont or loss of roservos carried with momber banks\nare unavailable. This makes for a heavy dilution, but not for effective\ncontrol.\nLikewise, bank examination policy, with its direct influence upon\nbank lending and investment, which are money-creating operations, needs to\nbe closely coordinated with national monetary policy. Notwithstanding the\ndogree of coordination sought by the agreement among the three Federal bank\nsupervisory agencies in 1938 and subscribed to generally by the State\nauthorities, the result is at best a compromise and not EL real solution.\nAlmost every aspect of banking regulation and supervision is made\nnore difficult and less effective by the existing structure. I need not re-\ncount to you the innumerable conflicts, discriminations, divided and over-\nlapping authorities, that characterize the banking picture in this country.\nAS the Federal Reserve Board declared in its Annual Report for 1938, \"The\nbanking picture emerges as a crazy quilt of conflicting powers and juris-\ndictions, of overlapping authorities and gaps in authority, of restrictions\nmaking it difficult for banks to serve their communities and make to living,\nand of conditions making it next to impossible for public authorities to\napply adequato restruints at N. time and in conditions when this may be in\nthe public interest.\" That report suffices to show the need for modernizing\nRegraded Unclassified\n119\n- 4 -\nand stroanlining the banking structure of this country as modern business and\nindustry in almost every conceivable line of endeavor have been modernized\nand streamlined. Attempts at coordination, commendable as they are, reflect,\nbut are not a practical solution of the problems.\nNow all of this, you may say, is just my philosophic approach.\nI am trying to sketch it in because it is my basic reason for believing that\nthe dual banking system, as now constituted, is outmoded and that economic\nforces -- not mere debute -- will compel its adaptution to the financial\nneeds of modern economic life.\nIt is not long ago, as time is mensured, that we were pro-\ndominantly un agricultural nation. Local communities wore relatively solf-\naustaining. Industrios wore largely locally ownod and comparatively small.\nAs the great ruilroad systems of the nation developed with the westward\nmarch, new towns and villages sprang up along the way. Each had its local,\nmore or loss self-contained economic life, its stores and its banks. This\nwas in a day of R relative scarcity of capital. Interest rates were high.\nToo often banks took the risks and the losses that should have been borne\nby risk capital and not by bank stockholders and depositors. This ora of\nrupid, steady expansion faded out with the advent of the large mergers and\nconsolidations in the industrial world, with the development of modern\ntrunsportation end distributive systems. Attempts to halt this march of\nprogress by anti-trust, anti-chain store legislation or other statutory\npains and pomities have largely been in vain. It requires no gift of\nprophocy to foresee that the scmo oconomic forces will in time compol the\nbanking system to follow is parallel pattorn.\nThe answer to the thome question of this session is not hard to\ndiscern as you look back at the fate of thousands upon thousands of the\nsmall unit banks which once thrived. By 1921 we had more than thirty thousand\ncommercial banks in this country. More than twenty-two thousand of them were\nState banks, while some eight thousand were national banks. As of last June\nthirtieth, the number of State banks had shrunk from twenty-two thousand to\nabout nine thousand, and there were about three thousand fewer national\nbanks. There has been no banking mortulity remotely approaching this sad\nrecord in any other nation on earth. The disappourance of more than thirteen\nthousand State banks and three thousand national banks as well -- whether it\nbe through failure, through merger, or through voluntary liquidation -- is\neloquent proof that something was fundamentally wrong with a system that\npermitted so large B. number even to come into being.\nWe have expended more in time and money on bank examination and super-\nvision, conducted by at least 52 soparate State and Federal agencies, than any\nnation in the world. It involves unnecessary waste of manpower at a time like\nthis. It did not and could not of itself protect the depositors, stock-\nholders or customers of the thousands of banks that went to the wall, even\nduring the so-culled prospurous Twenties. Aside from voluntary liquidations\nor abscrptions, nearly ten thousand Stato banks, with aggregate deposits of\nRegraded Unclassified\n120\n- 5 -\nclozy to five billion dollars, folded up in the Twentios and early Thirties.\nAt the surr timo moro than two thousand national banks, with duposits of\nonly slightly loss thun two and EL half billions, wont to the wall. Most of\nthese were independent unit banks. Banks that survived the Twenties and\nthen weathered the economic disaster of the early Thirties were necessarily\nthe strong and not the weak. What saved them in the end was the avalanche\nof money poured out by the Federal Government -- the billions in loans and\ncapital supplied directly to the banks by the RFC and the additional billions\nfurnished to others through the RFC, the Farm Credit Administration and the\ndone Amer's Loan Corporation, which made it possible to liquidate the frozen\nand defaulted credits held by the banking system.\nAs you in this audience know, bad management and other human de-\nfects were minor and not major reasons for the epidemic of failures. The\nmortality was greatest through the Twenties among the smaller institutions\nIn the agricultural regions. They were the victims of depressed agri-\ncultural conditions. Thousands that managed to come through in the country\nand in the cities only to succumb in the early Thirties, were likewise\nprinarily the victims of economic distress and disaster with which they\ncould not copo individually and from which the most diligent supervisory\nand examination policy could not save them. Since the bank holiday, the\nrising price level has made good the assets of numerous banks that were\nclosed then and of many that would not have been reopened had strict ex-\naminution policy been uniformly applied. The rising price level, not deposit\ninsurance, has reduced bank mortulity to EL minimum.\nThe record of bank failuros in this, the richest country on\nearth, night have been much better -- it could hardly have been much worse --\nhad examination and chartering policy been more restrictive in boom times\nund if, especially during dopression, runs had been averted by deposit\nInsurance. llowever, deposit insurance, which I strongly fuvored at & time\nwhen most of my bunking contemporaries regarded it LS A scheme for making\ngood banking pay for the mistakes of bad banking, cannot cure the basic\nworknesses. The attempt to do so at this stage by muking chartering und\nexamination policy increasingly rostrictive, would loud only to depriving\nthe public of needed banking services in innumerable communities. This,\nin turn, would load to domands upon Government to furnish through its\nAguncies the credit services that the banks would otherwise supply. It\nwould neun additional Government encroachment upon the fiold of private\nbunking enterpriso.\nEven today, during the groatost of all war booms and despite the\nunormous growth of deposits, many of the smaller bunks are having difficulty\nIn meking - living. It is difficult to attract now capital into the banking\nsystem. Horoover, the process of contraction in number of banks is oon-\ntinuing -- fortunately through voluntary liquidation of existing units un-\nable to operate successfully, und through mergors and consolidations, rather\nthan through the disnstrous process of fuilures.\nRegraded Unclassified\n121\n- 6 -\nThe solution is not to be found in more and more restrictions\napplied to la basically faulty structure. The solution lies in & unified\nsystem with branch banking. We alone among the leading nations have\nfailed to develop such a system. We alone have deposit insurance. We need\nit no long as the basic faults of our banking structure remain uncorrected,\nbut the need for it would disappear, and bank failures would be us rare in\nour country as they are in other great nations, if we would doul with the\ncauces insteud of continuing to doul with the effects of the basic weak-\nnosses in our system.\nMeroly to unify the banking system under one regulatory authority\nwould not be u sufficient remody. As I have sought to stross, the problem\nis basically an uconomic one. The question 10, our the smull independent\nunit banks expoct botter ournings in tho future? Or, of greator importance,\noun they provide their communities with adequate cradit facilities and bank\nservices at costs as low as those prevailing elsewhere? In this vast\ncountry there are many so-called ereditor areas which have a surplus of\nsavings over local credit and investment needs, and others, dobtor areas,\nwhere the derind for funds exceeds the local supply. But we have D. banking\nsystem which requires for the sake of liquidity that banks in the debtor\nAPUND send funds to the creditor urous, wherous the reverse should be the\ncaso. Farmurs und homo owners and small businosses are demanding buttor and\nchosper crodit fucilitios, whilo bunks in thoir communition hold idlo\nbulances in largo city banks or buy low intorust-boaring bonds. But to pro-\ntuct their depositors thoy curnot afford the risk of having all thoir assots\nInvested at homo. Is thoro any wonder that borrowers como to Washington, in\ntimos of business contraction, and ask for now Government crodit agoncios?\nI in opposed to Government subsidized competitive agencies taking away busi-\nness from the bruiks. But is the widesproud outery ugainst farm credit\nligencies really based upon n. four of socialized credit end does it really\nattack the CLUSO of the trouble?\nThese Federal agencies, LE has been stid, were \"born of pitiless\nand inexorable necessity\" in D. time of adversity when the banks could not\nseet desporate agricultural needs, und at the time wore welcomed by the\nbanks CS they were by farmors. Muny of the credits they extended were not\nbankuble louns. But even if they could bo abolished over the opposition of\norganized agriculture today, which I very much doubt, that would hardly\nnotes the difference betwoon profitable and unprofitable banking oporations.\nYou have only to look at the unprocodented and still growing\nvolume of bank doposits created 1,8 a result of wer financing to realize\nthat relief cannot be expected to como through a rising interest rate\nstructure after the war. The command over the interest rate structure\nWhich governments have exercised during the war will not, in my opinion,\nbe relinquished afterward. In view of the huge debt-refunding operations\nthat the Government will have to carry on and the disruptive effects of a\nfalling bond market, or, otherwise stated, of a rising interest rate on\nRegraded Unclassified\n122\n- 7 -\nthose operations, it is hardly likoly that the responsible authorities\nwould fail to exercise thoir undoubted powers of control to provent any\nsuch wido fluctuations in interost ratos as would afford the banks B. hope\nof rising returns from this source,\nMoroover, the vast volume of funds that have alroady como or\nwill como into oxistence before the end of the war presents a competitive\nsituation that is hardly dosigned to rosult in increased ratos and carnings\nby the banks. Those doposits are owned by insurance companies, mortgage\ncompanies, financo companios, building and loan associations, business and\nindustry, as well as by many other potential lendors, individual und\ncorporato. I have recontly soun funds advortized for lending in the mortgage\nfield for as long as forty years at but four per cent. Banks must face the\nnecessity of adapting themselves to meet such competition and at the same\ntime, through diversification and sound management, safeguard the interests\nof their depositors and stockholders.\nI recognize that a banking structure that may best serve one part\nof the country may not be adapted to another part. Generally speaking, in\nthe Eastern States, where larger diversified banking Units predominate and\ndistances are relatively short, there is no such public noud for trade-area\nbranch banking as is the case in those sections of the country whoro\ndistances are great and where the banking units are necessarily smallor and\nfar loss divorsified in their londing and investing activities -- indood,\noften they are too reliant upon conditions in one or only a few lines of\nagriculture or industry.\nI have 10mg felt that limited branch banking is the practical\nsolution of the banking problems confronting those areas where unit banks\ncannot succeed, I have never favored nation-wide branch banking, or its\nextension over wide areas. I do feel, however, that it should be permitted\nwithin limited trade areas, in no case exceeding the limits of the immediate\narea served by the head office or by a branch of a Federal Roserve Bank. I\nbelieve that the independent unit bank should be protected, however, by a\nstatutory provision prohibiting establishment of any brunch in A community\nalroady served by EL unit bank or by EL branch of another bank. The banking\nauthorities could, of course, permit establishmont of another bank in a\ncommunity if the need for it existed, but under the provision I have in\nmind, a branch could only como into the community by acquiring a unit bank\nwhich hud boon in oxistonce for at loast five years. Such an acquisition\nwould have to have the consent of tho bank supervisory authorities in order\nto provent monopolistic tondoncios, Undor such provisions, & market would\nbe provided for the stock of a unit bank in caso the stockholders dosired to\nsell because of unprofitable opurations or for any other roason. At prosent\nthe owners of the smaller unit banks are greatly handicapped in having no\npportunity, in most cases, to dispose of their investment, if they wish to\n4a so, at anything like a satisfactory price.\nThe smaller unit banks face many difficulties and disadvantages as\ncompared with branch banks. The snaller units are so limited in their lend-\nRegraded Unclassified\n123\n- 8 -\nINC capacity that nore and more, as business, industrial and agricultural\nenterprises have enlarged, they have had to turn to the banks with large\nresources for their financial requirements. The smallor units do not have\nthe opportunities afforded the larger institutions to diversify their lend-\n10G oporations and thus apread the risks. They cannot offord to employ the\nspecialized nanagement in the various lines of lending and investing activity\nthat our be employed by the larger banks. Thoy are not able to offer the\nvarioty of credit and other services, and they lack stability and continuity\nin management, as compared with larger banks with branchos. Accordingly, I\nsee in 6, branch banking set-up such as I have outlined B. practical and\n12g10al solution of the problem, both from the standpoint of providing\nneeded banking services for the public in many communities and from the\nstandpoint of the interest of the unit banks themselves.\nThe present branch banking laws discriminate unfairly against\nnational banks. While Federal law permits a national bank to have branches\nin those States where State law permits branch banking, the Federal law re-\nquires the same capitalization for each branch of a national bank as for\nestablishment of a new national bank. Most State laws impose no such capital\nrequirements. If both State and national bunks wore put on an equal footing\nwith respect to branches and the indepondent unit banks wore protocted E.S I\nhave suggested, it scoms to no that it would bo in the intorost of all con-\ncornod.\nThe public interest and public needs will, I am confident,\ndetermine in the end the pattern that will be followed. It is not the\npublic which has opposed branch banking. As Senator Glass said when the\nsubject was being debated in the Senate some years ago and he has had\nmore legislative experience with banking problems than any nan in public\nlife in ur times --\n\"The plea against branch banking comes from bankers and not\nfrom people who transact businoss, not from people who want to\nborrow money, not from people who want to buy credit. It comes\nfrom bankers who want to exclude from their peculiar communities\nanybody olse who wants to sell credit.\"\nAnd you will perhaps pardon no if I recall to your mind that the some\nSenator is the Author of the statement that \"the curso of the banking busi-\nnoss of this country is the dual system\".\nNew, I have not advocted abolishing State chartoring and super-\nvisi in because I have folt, or at loust hopod, that & sufficient dogroo of\nunifiod policy and notion could be brought about, short of 50 drustic to\nchange, by requiring that State banks, like national banks, bo members of\nthe Federal Reserve System, by a consolidation of Federal regulatory and\nsupervisory authorities, and by development of branch banking as I have\nindicated. Nevertheless, I must confess that the cold logic of the situa-\ntion calls for the more drastic readjustment to modern conditions.\nRegraded Unclassified\n124\na , ,\nIn the carlier days of the Republic when State banks were em-\npowered to issue currency, thore was B. reason for State chartering and\nsupervision that ceused to exist when State bank notes were taxed out of\nexistonce. In the light of the clearly recognized soveroignty of the\nFederal Government over the issuance of currency, the logic of the case\ncalls equally for onding State authority to charter banks which, in turn,\nwhile they no longer issue currency, can oreate bank credit that has so\nlargoly supplanted currency as the country's chief medium of exchange.\nAs Professor Westerfield of Yale has pointed out:\n\"It has boen seriously argued that the Constitution not\nmerely permits but requires that the power of the states to\ncharter commercial bunks be abolished and control of commercial\nbanking be exercised by the federal government alone, because\nthe Constitution expressly gives Congress control of the\nmonetary system and forbids interference with it by the states,\nand commercial bank deposits are the principal element of the\nmonotory system.\"\nHaving a regard for the antiquity of this issue of the dual sys-\ntum and the controversy which has ruged about the subject for so many\ngenerations, I have perhaps boon more prudent than logical in stopping\nshort of advocenting that you gontlemen be legislated out of your present\noccupations -- but la long lino of ominent authorities, who could hardly\nbe charged with indifforenco to State Rights, have not stoppod short.\nSonutor Shorman, of Ohio, that distinguishod loador in establishmont of\nthe national banking system, concluded nourly oighty yours ugo that, end\nI quoto, \"The whole system of state banks, however carefully guarded, was\nboth unconstitutional and inexpedient and ought to be overthrown\".\nDaniel Webster, specking in the Senate on the subject of State\nbank circulation, said:\n\"I confess, Mr. President, that the more I reflect upon this\nsubject, the more clearly does my mind approach the conclusion\nthat the creation of stuto banks, for the purpose und with the\npower of circulating paper, in not consistent with the grants and\nprohibitions of the Constitution.\"\nEven 50 ardent a champion of State Rights us Thomas Jefferson\nwrote in 181L that, \"The state logislatures should be immediately urgod\nto relinguish the right of establishing banks of discount\".\nMy own approach and viewpoint wore well exprossed by an editorial\nin the New York Times of July 23, 1936, omphusizing the fact that \"un\nobvious und pressing nood\" for fundumental banking reform still oxisted.\nRegraded Unclassified\n125\n- 10 -\n\"If the exporience of the doprossion yours showed anything,\" this odi-\ntorial continuod, \"it showed the glaring woaknesses inhorent in n bank-\ning system which is conducted under no loss than fifty different sots of\nFederal and local regulations, with many communities denied by law the\nservices of banking institutions equipped with adequate financial resources.\nThe remedies for these weaknesses are unified regulation obtained through\nmembership of all banks in the Federal Reserve System and an extension of\nthe practice of sound branch banking.\"\nYou will not, I trust, accuse me of radicalism or of favoring\nburesucracy because I find myself allied in my thinking with so many\nothers who, down through the years, have shared my general viewpoint;\nsone, like Jefferson, being much more drustic than I have been. And you\nwill not, I trust, think that I have any less desire to work cooperatively,\nclosely, and in hurmony with you to make the bust of our prosent situation\nJust because I bolieve that timo and economic progress will ultimatoly\nbring fundamental changes in the banking structuro. I do not caro what\nsystem, whother ducl or unified, provuils, or how many banking authoritics\nthere are, if the system, whatever it may be, best serves the public\ninterest and preserves privute banking in this nation.\nRegraded Unclassified\nDEPARTMENT OF FINANCE\nCANADA\nOttawa, Sept. 17, 1943.\nDear Dr. White:-\nAs Mr. Plumptre is absent from Washington\non holidays he has asked me to send you direct the\nattached quarterly statement and forecast of Canada's\nholdings of U.S. dollars.\nThis statement would normally have gone\nforward some time ago, but it has been delayed in\norder to include the latest information concerning\nthe steps taken to bring our balances within the\nagreed limits.\nYours very truly,\nT D. White,\nat\nto the Secretary,\nDepartment,\nON, D.C.\nRegraded Unclassified\nCANADA'S RECEIPTS AND DISBURSEMENTS OF UNITED STATES DOLLARS\nReport, September 1943.\nGeneral Comments.\nTable I. Summary Table.\nTable II. Current Account.\nTable III. Capital Account.\nTable IV. Hyde Park Transactions.\nTable V. U.S. Dollars Obtained Outside the\nUnited States.\nTable VI. Canada's Liquid Reserves.\nFootnotes on the Tables.\nRegraded Unclassified\n'S RECEIPTS AND DISBURSEMENTS OF UNITED STATES DOLLARS\nReport, September 1943\nints on the Report\nforecast places Canada's probable stock of gold and U.S. dollars\nand of 1943 at $444 million, excluding the proceeds of the net capital\non security transactions (estimated at $98 million for the calendar\nTHE\n1943) and before taking account of the cancellations of War Supplies\nLtd. orders now in process. Contracts aggregating $100 to $107 million\nduring the remainder of their terms are being cencelled outright. The Depart-\nment of Munitions and Supply estimates that deliveries through War Supplies\nLtd. will be reduced by $80 to $86 million by December 31, 1943, as a result.\nIt is difficult, however, to forecast the timing of the effect which these\nreductions in deliveries will have on net cash receipts from month to month\nbecause of the lag of payments behind deliveries and because payments will\ncontinue to be received on account of past deliveries. In addition to the\neffects of these cancellations, it is expected that further refunds will be\nto the United States as a result of retroactive price adjustments on\nthrough War Supplies Ltd. similar to the refund of $50 million last\nNothing of this nature has been included in the forecast.\nDo high level at which Canada's stock of U.S. exchange has been\nin recent months is due in part to the fact that some unusual receipts\nU.S. dollars received in settlements from the United Kingdom - Table I,\nfell in the early part of the year while certain heavy payments (e.g.,\nfor \"Canpay\" imports from U.S. - Table I, Item 7) will not occur until\nter part of the year. It is also due in part to the continued high rate\nal inflow from security transactions, estimated at $98 million for the\nyear 1943 (net, after the redemption on August 15th of Dominion of\nbonds amounting to $106 million).\nRegraded Unclassified\n2.\nchanges made in methods of estimating used in this report.\nSome alight changes have been made in the arrangement of the items in\nnamery table, Table I, particularly to give emphasis to the importance\ntch payments on Canpay account and special adjustments to receipts through\nat Supplies Ltd. have now achieved. Payments on Canpay account now appear\nonly in Table I, Item ?; they have been entirely eliminated from Table II where\nthey were formerly included in the estimated payments for imports from the\nUnited States. Hyde Park receipts are stated in Table IV and in Table I,\nItem 9, before allowing for the effect of the cancellation of War Supplies\nLtd. orders described above, for the reasons there given. For convenient\nreference Items 15 to 18 have been added to Table I. These give the U.S.\ndollar position, actual and forecast, at the end of each quarter of 1943\nboth before and after the elimination of the net effect of security tran-\nsactions on the position.\nSince no further changes of importance are likely to be made in the\nestimates for 1942, the detailed estimates for each quarter of 1942 have\nbeen omitted; the total for the year will be found in each table for com-\nrison with 1943. In some tables the forecasts have been carried through\nfirst quarter of 1944. For the less predictable items, however, the\nlast has only been carried to the end of 1943.\nA considerable reduction in the estimated payments to the United States\nrdinary current account (Table I, Item 1) by contrast with the estimated\ninto for 1943 shown in the May report is to be accounted for almost\noly by the elimination of payments on Canpay account. These now appear\n(tom 7 of Table I. The forecasts of current receipts made in May were\nlow for the second quarter. The estimated total current account receipts\n1943 have been increased somewhat in this report (Table I, Item 2).\nRegraded Unclassified\n3.\nthese changes account for the reduction in the estimated excess\nrent payments over receipts for 1943 from the 3544 million forecast\nMay report to the $280 million here forecast (Table I, Item 3).\nRegraded Unclassified\nCANADA'S RECEIPTS AD DISBURSEMENTS OF UNITED STATES DOLLARS\nReport, September 1943\nTable I. Summary Table\n(in millions of United States Dollars)\nItem\nCalendar\nQuarters of 1943\nNo.\n1942\n1943\nI\nII\nIII\nIV\nOrdinary Current Account Transactions, excluding\nCanpay and Hyde Park transactions (from Table II):\nPayments\n1.\n1,466\n1,546\n340\n397\n396\n413\nReceipts\n2.\n1,027\n1,266\n256\n346\n342\n322\nExcess of payments (-) (1-2)\n3.\n-439\n-280\n-84\n-51\n-54\n-91\nCapital Transactions excluding Security Transac-\ntions (from Table III):\nNet capital inflow (f)\n4.\n/38\n427\n/10\n45\nt6\nto\nU.S. Dollars Obtained from Newfoundland and other\nNon-Sterling Area Countries Outside the United\nStetes (from Table v):\nNet receipts (f)\n5.\n460\n/58\nAll\n/23\nto\n417\nSpecial Receipts of U.S.Dollars from the United\nKingdom (f)\n6.°\n427\n/165\n/139\nto\n/10\n48\nPayments for Canpay imports (-)\n7.\n-1\n-163\n-\n-50\n-71\n-42\nSurplus (t) or Deficits (-) on the above transac-\ntions (1.e., all except Hyde Park and security\ntransactions) (3/4/5/6/7)\n8.\n-315\n-193\n476\n-65\n-102\n-102\nNet Receipts from Hyde Park Transactions (from\nTable IV) :\nNet Receipts (without taking account of any\ncancellation of War Supplies Ltd. orders.)\n(See Note below)\n9.\n/310\n/332\n477\n/59\n/92\n/104\nSurplus (f) or Deficit (-) on all the above Transac-\ntions (1.0., all except security transactions)\n(8/9)\n10.\n-5 /139 /153\n-6\n-10\n+2\nSecurity Transactions (from Table III) :\nNet capital import (f) or export (-)\n11.\n/114\n698\n/53\n63\n-61\n/43\nSurplus (t) or Deficit (-) on all the above Tran-\nsactions, (10/11)\n12.\n/109\n/237\n/206\n457\n-71\n/45\nActual Increase (+) or Decrease (-) in Canada's\nU.S. Dollar Position\n13.\n/131\n/218 /31\nErrors and Omissions (13-12)\n14.\n/22\nA12 -26\nRegraded Unclassifie\n2.\nItem\nCalendar\nQuarters of 1943\nNo.\n1942 1943\nI\nII\nIII\nIV\nlar Position at the End of\nCanada\nKach\nuarter:\nAd\nTable VI)\n15.\n319\n537\n568\nFor\nthout taking account of\nand\nllation of War Supplies\nLE\nSee Note below.)\n(f)\n12)\n16,\n542\n497\n542\nCanada\nDollar Position at the End of\nEach\nor Quarter (excluding the net\ninflow of capital from security transac-\ntions\nActual (Item 15 less the cumulative\ncapital inflow shown in Item 11)\n17.\n205\n484\n452\nForecast (without taking account of\nany cancellation of War Supplies Ltd.\norders. See Note below.) (Item 16\nless the cumulative capital inflow\nshown in Item 11)\n18.\n444\n442\n444\nNote:\nItems 9, 16 and 18 take no account of cancellations of War Supplies\nLtd. orders resulting from implementation of maximum-minimum balances\narrangement. Contracts for such orders aggregating 100 to 107 million\ndollars during the term of the contracts are now being cancelled out-\nright. The Department of llunitions and Supply estimates that deliveries\nthrough War Supplies Ltd. will be reduced by 80 to 86 million dollars\nby December 31, 1943, as a result of these cancellations, It is difficult,\nhowever, to forecast the timing of the effect of these reductions in de-\nliveries on net cash receipts month by month because of the lag of payments\nbehind deliveries and because of payments on account of past deliveries.\nIn addition, it is expected that further refunds will be made to the\nUnited States as a result of retroactive price adjustments on sales through\nWar Supplies Ltd., similar to the refund in June 1943. Nothing of this\nnature has been included in the forecast.\nRegraded Unclassified\nCANADA'S RECEIPTS AND DISBURSEMENTS OF UNITED STATES DOLLARS\nReport, September 1943.\nTable II Current Account\n(in millions of U.S. dollars)\nItem\nCalender\nQuarters of 1943 of 1944\nFiscal\nNo.\n1942\n1943\nI\nII\nIII\nIV\nI\n1944\nPayment\ncada to the U.S.\nPayment\ncated by the\nadjuste\nof total merch-\nendise\ned, excluding\nLend-Le\nind Canpay imports\n1.\n1014\n1068\n234\n274\n280\n280\n265\n1099\nof which imports for the prod-\nuction of military equipment\n2.\n436\n517\n124\n128\n132\n133\n133\n526\nof which imports for other\n(mainly non-war) purposes\n3.\n578\n551\n110\n146\n148\n147\n132\n573\nFreight payable in U.S. dollars.\n4.\n145\n160\n31\n40\n46\n43\n30\n159\nTourist and other travel in\nthe U.S.\n5.\n14\n19\n4\n5\n5\n5\n5\n20\nInterest payments\n6.\n88\n92\n20\n25\n21\n26\n21\n93\nDividends and profits payments\n7.\n114\n110\n25\n30\n20\n35\n18\n103\nMiscellaneous\n8.\n91\n97\n26\n23\n24\n24\n24\n95\nTotal Payments (1/4/5/6/7/8)\n9.\n1466\n1546\n340\n397\n396\n413\n363\n1569\nReceipts\nCanada from the U.S.\nExport\nrchandise by Canada,\n(exc)\nall Hyde Park exports,\n10.\n567\n629\n125\n168\n171\n165\n135\n639\nsee\nExpor\ntals to Motals\nResel\noration\n11.\n33\n86\n14\n24\n24\n24\n24\n96\nExport\n(ly-mined gold\n167\n134\n36\n35\n33\n30\n25\n123\n12.\nProig\nts in U.S.dollars.\n13.\n74\n101\n19\n34\n26\n22\n18\n100\nTouri\nSher travel by the\nU.S\ndo\n14.\n56\n59\n9\n15\n22\n13\n9\n59\nInter\ndends and profits\nfrom\n15.\n51\n55\n13\n16\n12\n14\n11\n53\nAleak\nand other U.S.\nGove\njects\n16,\n26\n130\n28\n36\n36\n36\n30\n138\nMisca\n17.\n53\n72\n18\n18\n18\n19\n18\n72\nTotal\n(10/11/12/13/14/\n15/1\n18.\n1027\n1266\n256\n346\n342\n322\n270\n1280\nExces\nwnts over\nReceipt\n18)\n19.\n439\n280\n84\n51\n54\n91\n93\n289\nRegraded Unclassified\nRECEIPTS AND DISBURSEMENTS OF UNITED STATES DOLLARS\nReport, September 1943.\nTable III. Capital Account\n(in millions of U.S. dollars)\nItem\nCalendar\nQuarters of 1943\nNo.\n1942 1943\nI II III IV\nSection I Non-Security\nTransactions\nSales by Canadians of U.S.\nand other assets:\nU.S. assets\n1.\n23\n15\n4\n3\n4\n4\nCanadian assets\n2.\n19\n11\n2\n3\n3\n3\nOther new borrowing\n3.\n-\n5\n5\n-\n-\n-\nTotal Receipts on these items\n(1/2/3)\n4.\n42\n31\n11\n6\n7\n7\nLess debt payments\n5.\n4\n4\n1\n1\n1\n1\nNet capital inflow on these\nitems\n6.\n/38\n/27\n/10\n/5\n/6\nto\nSection II, Security Transactions\nSales of securities by Canadians:\nU.S. and other foreign\nsecurities\n7.\n22\n41\n6\n14\n11\n10\nCanadian outstanding issues\n8.\n112\n205\n67\n48\n50\n40\nNew Canadian issues\n9.\n-\n124\n97\n27\n-\n-\nTotal (7/8/9)\n10.\n134\n370\n170\n89\n61\n50\nLess turities of Canadian\nseo ties in the U.S\n11.\n20\n56\n7\n26\n16\n7\nLess\nadian securities\ncal\nfor redemption payable\nin\ndollars\n12.\n-\n216\n110\n- 106\n-\nNet\n1 inflow (f) or out-\nfl.\non security trans-\nac\n(10-11-12)\n13.\n/114\n/98\nA53\n/63\n-61\n+43\nRecap\nion\nTot\ntal receipts (4/10)\n14.\n176\n401\n181\n95\n68\n57\nTot\ntal payments\n)\n15.\n24\n276\n118\n27 123\n8\nNet\n1 inflow (14-15 or\n6\n16.\n/152\n/125\n/63\n/68\n-55\n/49\nRegraded Unclassified\nBANADA'S RECEIPTS AND DISBURSEMENTS OF UNITED STATES DOLLARS\nReport, September 1943.\nTable IV. Hyde Park Transactions\n(in millions of U.S. dollars)\nItem\nCalender\nQuarters of 1943\nLio.\n1942\n1943\nI\nII\nIII\nIV\nPrepayments and capital advances\n1.\n79\n7\n-\n2\n5\n-\nCurrent receipts on orders placed\nthrough for Supplies Ltd\n2.\n231\n377\n77\n100\n100\n100\nRefund by Canada of prepayments\nby the U.S. included in Item 1...\n3.\n-\n21\n-\n1\n20\n-\nPayments by Canada on account of\n\"retroactive price adjustments\"\n4,\n-\n50\n-\n50\n-\n-\non W.S.L. contracts\nliet receipts through War Supplies\nLtd. (1/2-3-4)\n5.\n310\n313\n77\n51\n95\n100\nPetroleum Products Lend-Leased by\nthe U.S. to the U.K. for the\nCombined Air Training Plan\n6.\n-\n19\n-\ne\n7\n4\nNet receipts of U.S. dollars by\nCanada under Hyde Park trans-\nactions (5/6)\n7.\n310\n332\n77\n59\n92\n104\nAdditional Information\nCanada's Hyde Park Exports:\nExports against prepayments\nand cemital advances\n8.\n17\n39\n13\n12\n8\n6\nTotal arts (2/8)\n9.\n248\n416\n90\n112\n108\n106\nedjustments, Item\n4...\n10.\n50\n50\n-\n-\nLoss\n-\n-\nRece\nrom Thoada's Hyde\nPar\n11.\n248\n366\n90\n62\n108\n106\nter 9-10)\nU.S\ncontent of Canada's\nHy\nexports estimated\nat\nItem 11\n12.\n30\n44\n11\n7\n13\n13\nNet\nof U.S. dollars from\nHg\nexports (11-12)\n13.\n218\n322\n79\n55\n95\n93\nпрог\ncomponents and\nmate\nobtained by the U.K.\nun\n-Lease for the ex-\nocut\nBritish orders in\nСеда\n50\n19\n7\n8\n2\n2\n14.\nRegraded Unclassified\n138\nIPTS AND DISBURSEMENTS OF UNITED STATES DOLLARS\nCA\nReport, September 1943.\nable V. U.S. Dollars Obtained Outside the\nUnited States.\n(in millions of U.S. Dollars)\nItem\nCalendar\nQuarters of 1943 of 194 Fiscal\nNo.\n1942\n1943\nI II III IV I\n1944\neceipts by Canada\nFrom non-sterling area\ncountries other than\nNewfoundland and the\nUnited States\n1.\n82\n99\n20\n32\n18\n29\n20\n99\nsyments by Canada\nTo non-sterling area\ncountries other than\nNewfoundland and the\nUnited States\n2:\n55\n64\n18\n14\n16\n16\n16\n42\net Receipts (1-2)\n3.\n27\n35\n2\n18\n2\n13\n4\net Rec\nof U.S.\nDollar\nNewfoundland.\n4.\n33\n23\n9\n5\n5\n4\n3\nTotal\nReceipts\n(37)\n60\n58\n11\n3\n7\n17\n7\n64\n5.\n.\nRegraded Unclassified\nDS RECEIPTS AND DISBURSEMENTS OF UNITED STATES DOLLARS\nReport, September 1943.\nTable VI. Canada's Liquid Reserves\n(in millions of U.3. dollars)\nof which held to\nU.S.\nTotal\nPrivate\noffset net securit)\nGold\nBalances\nOfficial\nBalancesja\nTotal\nmovements in 1943\nAmounts\nSept. 15, 1939\n205\n56\n261\n133\n394\nDec. 30, 1939\n218\n88\n305\n99\n405\nDec. 31, 1940\n136\n194\n330\n3\n333\nDec. 31, 1941\n136\n52\n188\n-\n188\nDec. 31, 1942\n155\n164\n319\n-\n319\nMar. 31, 1943\n124\n413\n537\n-\n537\n53\nJune 30, 1943\n162\n406\n568\n-\n568\n116\nAug. 31, 1943\n181\n364\n545\n-\n545\nMemo: Net Capital\nImport\nI. Change in Amounts from Previous Period\nSept. 15, 1939\n-\n-\n-\n-\n-\nDec. 30, 1939\n/13\n+32\n/45\n-34\n/11\nDec. 31, 1940\n-82\n/106\n/24\n-96\n-72\nDec. 31, 1941\n-\n-142\n-142\n-3\n-145\n61\nDec. 31, 1942\n/19\n/112\n/131\n-\n/131\n152\nMar, 31, 1943\n-31\n/249\n/218\n63\n-\n/218\nJune 30, 1943\n/38\n-7\n/31\n/31\n68\n-\nAug. 1943\n/19\n-42\n-23\n-\n-23\nF Tot\nfficial\" holdings - Foreign Exchange Control Board, Minister of Finance\nBhink of Canada.\n17 Tot\ndings of U.S. dollars by all other residents of Canada, excluding\nin banks end insurance companies whose holdings of U.S. dollars are\ndi for the purpose of their U.S. business. The totals shown are\ne of $20 million in minimum working balances.\nto the war, a very large proportion of Canada's exchange reserves\nby private rather than official agencies. In the spring of 1940,\n1gn Exchange Control Board, which had been charged with responsibility\nging the country's exchange reserves, took over all such balances in\nhands other than the minimum amount considered essential for day-to\nking balances.\nRegraded Unclassified\nDA'S RECEIPTS AND DISBURSEMENTS OF UNITED STATES DOLLARS\nReport, September 1943.\n100\nto the Tables.\ntes to Table II.\nIt\nFor the past total imports are arrived at by adjusting\nCust import statistics to eliminate imports for which no pay-\nnent has been made. Canpay imports and Lend-Lease imports were\nalso liminated. The forecast was made after examination of the\npast trend of imports in each of the groups into which the\nDominion Bureau of Statistics divided merchandise imports. It is\nestimated that total imports will be slightly above the level of\nthe second quarter for the third and the fourth quarter of this\nyear. It is also estimated that the first quarter of 1944 will\nbe above the same quarter of 1943 because total imports in that\nquarter were unduly reduced by a severe winter's effects upon\ntransportation facilities. Prices will probably be somewhat\nbigher also.\nThe reduction in the total imports forecast for 1943\nto\n$1,215 million of the May report to $1,068 million in the\nreport is almost entirely due to the elimination of Canpay\n1\nfor treatment elsewhere in the balance of payments.\nand 3.\nThese items are added for information only; they are\nanywhere in the balance of payments. Item 2 is the U.S.\nontent of military equipment purchased by the Department\nions and Supply. It 18 not inclusive enough to be\nd. as imports for \"War\" production which was the title\nused. No attempt is made here to separate imports on\nRegraded Unclassified\nfrom what might be called \"civilian\" imports. Isem 1\nerely the difference between Items I and : must there-\nmany items which might properly be called imports for\nuction.\nThe following table shows how the estimates of Item 2\niled:\nTable II. Current Account.\nItem Quarters of 1945 or 1944\nNo. I II III IV I\nPayments for U.S. purchases by\ncontractors and suppliers\n1 103 115 124 130 130\nExpenditures in the U.S. for\ncapital equipment\n2\n20\n15\n10\n5\n5\nDirect purchases by the Dept. of\nMunitions and Supply on other\nthan Canpay account\n3\n83\n6\n6\n6\n6\nTotal of the above items\n4\n131\n156\n140\n141\n141\nDeduct estimated freight payments\nincluded in the above items but\nincluded here in the freight\npayments item of Table II, (1.0.\n$5 of item 4.)\n5\n7\n8\n8\n8\n8\nEstimated imports for the produc-\non of military equipment (4-5)\n6 124 128 152 153 135\nA comparison of this table with the similar table is-\ned\nin the May Report, shows a reduction which is due to the\nintion of the payments on Canpay account. Excluding those\nthe figures given in the table above are somewhat higher\nthose of the May estimate. This increase is due mainly to\noments effected in the methods of estimating which soon\ntify a somewhat higher estimate for some production pro-\n18 than had been made previously.\nent of Campay imports in the present Report.\nThe only payments made by Canada for imports from the\nRegraded Unclassified\n5.\nrranged through the Canpay procedure to date are\nthat\nin 1942 and $50 million in the second quarter of\n1948\nall previous reports, payments for imports have\nbook\n4d on the basis of Customs statistics which included\nCam]\nreceived in Canada but not yet paid for. To that\nexte\ntated payments for imports has been too high. Part of\nthe\nBrunke\nand Omissions item in Table I of the previous reports is\nthus inined. So far as possible Canpay imports have now been\neliminated from the record of payments for imports for the first\ntwo quarters of 1943 and from the payments forecast for the rest\nof the year as shown in Table II, item 1, though it has not been\npossible to eliminate them from the record for 1942. This revision\nhas been the major factor in reducing the Errors and Omissions itom\nof $30 million shown for the first quarter of 1943 in the May report\nto the $12 million shown for the first quarter of 1943 in Table I,\nitem 18, In the present report payments for Canpay imports are en-\ntered only in Table I, item 2.\nThe forecast of Canpay payments made there is based on\nostil\ndeliveries on Canpay account. The total deliveries on\nCall\ncount to the end of the present quarter are estimated to\n$122 million. As $51 million has been paid on this account\nal\nhe payment of the remainder of Canada's liability, $71\nD\ntherefore forecast. In the last quarter the deliveries\nof\nimports are estimated at $42 million; this amount of pay-\nerefore forecast.\nreight Payable in U.S. Dollars.\nThis item includes inland freight on coal and other com-\nported from or through the U.S., ocean freight on in-\noh is payable in U.S. dollars to U.S. or other foreign\nand such part of the freight on Canadian exports to\nRegraded Unclassified\n4.\na countries as is payable by Canada in U.S. dollars,\nX6\nA some of these payments, O.B., freight on coal imports,\nR up-to-date information; for other parts of the es-\nas\n=\nbasic data is usually one quarter behind. As a record,\nt)\nmates of the larger part of the freight payments are pro-\nbai\nto accurate.\nIts Tourist Payments,\nThese are based upon Foreign Exchange Control Board data\nas to funds sold to tourists for travel in the United States.\nItem 6. Interest Payments.\nBased upon Dominion Bureau of Statistics estimates of the\nholdings of Canadian bonds in the United States. The quarterly\ndistribution was made after studying the seasonal tendency in the\nsales by the Foreign Exchange Control Board of U.S. dollars for\nthe servicing of Canadian bonds.\nItem 7. Dividends and Profits Payments.\nBased on F.E.C.B. records of approvals for the remittance\nof dividends and profits to residents of the U.S. dollar area. The\nforseast has been made on the assumption that remittances will con-\nti\nto be below earnings as they have been in the recent past and\n1\nere will be no tendency to remit to the U.S. the considerable\nof profits eligible for remittance under the regulations of\n.C.B. which have thus been built up.\nMiscellaneous,\nThis item includes mainly payments for commercial and\nal services and payments to companies in the U.S. for\nent, engineering, and similar professional services.\nExports (excluding Hyde Park exports).\nThe value of exports in the past is arrived at by\nting from Customs statistics of exports those items for which\nRegraded Unclassified\n5.\nus received, as well as exports included in Table IV,\nransactions.\nExports for the second quarter of this year were higher\nthe\nlovel forecast in May. The Torecast is therefore at a\nall\nhigher level also. This change seems justified by an\nanalysis of the probable trend in each of Canada's main export\ncommodities.\nItem 11. Exports of metals to Metals Reserve Corporation.\nThe increase in this item over the May forecast is due\nto 48 adjustment in the valuation of aluminum exports under the\nprovisions of an escalator clause in the contracts.\nItem 12. Gold exports.\nOur estimate of receipts from gold exports was again\nsomewhat below the actual figure for the second quarter of 1943.\nThe forecast has therefore been raised somewhat. The decline\nforeeast for the future is based on a projection of current pro-\nduction trends which man-power shortage may alter.\nAlaska Highway and other United States Government Project\nThe amounts shown include only those receipts that can\nlfied with certainty as arising from this source. They\nmorly included in miscellaneous receipts, but have now\n10 considerable as to justify placing them in a separate\nis explains the reduction in the size of item 19, mis-\nas receipts, by comparison with the May report.\nRegraded Unclassified\n6.\nExcess of Payments over Receipts.\nThe excess of payments forecast for 1943 in the May\n$544 million. In the present report the kcess is\nso\n$280 million. This is explained by a reduction \"\nion in payments (largely because of the elimination of\nfor Canpay imports) and an increase in estimated\nreceipts\nof $132 million which current trends seen to warrant.\nRegraded Unclassified\nTable III. Capital Account\nis table does not include the capital imports in the\nspayments, advances and other loans by United States\nal agencies and some banks which have resulted from\nark arrangements. These are given in Table IV, item 1,\nwhat\nincluded in the balance of payments in Table I, item 9.\nFor items 1,2,3,5,7,8 and 9 of Table III the record is\nprovided by the Foreign Exchange Control Board; the forecasts are\nrough estimates only.\nItems 11 and 12 are a breakdown of former item 11. In\nview of the magnitude of recent calls of securities for payment\nbefore maturity, it seems advisable to state their amount separate-\nly. The forecast given for item 11 is based on the estimated\nforsign holdings of Canadian bonds maturing in the United States.\nBecause of the proven difficulty of forecasting security\nmovements, this estimate has not been carried beyond 1943.\nRegraded Unclassified\nto Table IV. Hyde Park Transactions,\nAll the estimates included in this table come from\nt. of Munitions and Supply, with the exception of\nhich comes from the Department of National Defence\nItem 4 shows the retroactive price adjustment on\nthe sales through War Supplies Ltd., made in June 1945.\nFurther adjustments will be required in the future, but their\namount and timing is uncertain, so nothing of this nature has\nbeen forecast before the end of the year.\nItem 7 shows the net receipts of U.S. dollars by\nCanada through Hyde Park Transactions before taking account\nof the cancellation of War Supplies Ltd. orders now in process.\nSee the note at the foot of Table I.\nItems 8 to 14 of the table provide additional in-\nformation and calculations of interest. None of these items\nappear in the balance of payments in the form here given.\nof the exports included in Item 8, together with the cash\nnd of Item 3, refund prepayments of War Supplies Orders\nded in Item 1. The remainder of the prepayments of Item\nthe exports against them which are shown for the future\non 8have to do with aluminum contracts.\nRegraded Unclassified\nto Table V. United States Dollars Obtained Outside\nThe United States.\nReceipts by Canada.\nCustoms figures for exports (adjusted to eliminate\nproducing no U.S. dollars), including wheat exports to\nneutral countries in Europe from U.S. ports, and F.E.C.B.\ndata on dividends transferred to Canada by Canadian companies\noperating abroad. The irregularities in the second and fourth\nquarters are mainly the effect of dividend receipts. The May\nforecast of this item proved an under-estimate; the present\nforecast is somewhat higher.\nItem 2. Payments by Canada.\nCustoms figures adjusted to eliminate items for\nwhich no payment in U.S. dollars is required.\nItem 4. Net Receipts of U.S. Dollars from Newfoundland.\nNet amount of exchange sold to the Foreign Exchange\nControl Board.\nRegraded Unclassified\n147\nPARAPHRASE OF TELEGRAM SENT\nTO:\nAMERICAN EMBASSY, CHUNGKING, CHINA\nDATE: September 17, 1943, 4 p.m.\nNO.: 1298\nFOR ADLER FROM THE SECRETARY OF THE TREASURY.\nPlease discreetly consult the proper authorities\nof the Chinese Government and -- unless there is objection\nby the Chinese authorities -- arrange through reliable\nand confidential channels for the delivery of the follow-\ning message which the American Jewish Joint Distribution\nCommittee is very anxioue to have reach its representatives\n(either Laure Margolis or Manuel Siegel) in Shanghai:\nCould you, under existing conditions,\nutilize authorization to borrow locally up\nto $40,000 monthly for 8. period of the next\nsix months in order to carry on relief acti-\nvities among refugees? Should such an\nauthorization be desired, proupt favorable response\nmay be expected,\nAny reply which may be received should be given the\nsame facilities for transmission.\nThe Embassy is requested, in the absence of Adler,\nto carry out the above request. Should the Embassy\nnot be in a position to carry out this request, the\nmessage should be held until the return of Mr. Adler.\nHULL\nRegraded Unclassified\n148\nPLAIN\nNC\nChungking via N.R.\nDated September 17, 1943\nRec'd 1127 p.m.\nSecretary of State\nWashington\n1743, seventeenth\nCentral News Agency in referring to resolution adopted by\nCEC session September 11 on program for intensification of price\ncontrol states that \"arrangements have been made with the United\nStates for the purchase of United States $200,000 worth of gold.\"\nIn the resolution appears a statement that \"the United States has\npromised to lend to China a large quantity of gold.\"\nGovernment spokesman at press conference September 15 as\nreported by Central News Agency stated that Chinese Government\nhas proposed to use US $200,000 from balance of US $500,000 credit\nextended by American Government to buy gold bullion to combat\ninflation in China. Spokesman also said that Chinese Government\nhas decided to revise stabilization agreement and is negotiating\nwith US Government at Washington.\nNOSHHOLV\nDD\neh:copy\n9-20-43\nRegraded Unclassified\n149\nNOT TO BE RE-TRANSMITTED\n13\nCOPY NO.\nBRITISH MOST SECRET\nU.S. SECRET\nOPTEL No. 307\nInformation received up to 10 A.M., 17th September, 1943.\n1. NAVAL\n16th. H.M. ships continued their bombardment of the SALERNO\nbridgehead which together with air bombing was an important factor in the 1m-\nprovenent of the military situation. In the AEGEAN one of H.M. Subnarines sank\na schooner And a tug on the 5th. Another of H.M. Submarinos sank a caique on\n31st of August end B. 1,000 ton ship on 2nd September.\n2. MILITARY\nITALY. 5th Army, By last light 15th there had boen no enjor\nonemy attack for 48 hours and the situation in the bridgehead had temporarily\nbeen stabilised. On the 16th A limited Allied counter attack was nade from\nthe area south of the SELE. Reinforcements are arriving steadily.\n8th Army. On 15th units of 5th Division word concentrating in\nSCALEA and by first Jight on 16th reconnaissance units were in SAPRI with pntrol\nbeyond. There was no repatition no contact with enemy.\n3. AIR OPERATIONS\nWESTERN FRONT. MONTLUCON. 15th/16th. 1,017 tone including\n35 4,000 pound and 527 tons of incondiarios dropped at Dunlop factory. Marker\nbomba seem to have been accurately placed but bombing from above clouds THE\nsomewhat scattered at first. Later arrivals at lower altitude identified\nfactory buildings and therenfter better concentration resulted. The pilot of\na Spitfire yesterday BCW that the factory was extensively damaged and WAD\nburning fiercoly.\nGREVEN. 16th. Thick ground haze hampered successful attnck.\nA total of 220 Fortresses bombed the docks and an airfield at MANTES, U-bont\npens and docks at LA PALLICE and 2 airfields in Western France dropping 588\ntons in all. 99 medium bombors droppod 130 tons on BEAUMONT LE ROSER and\nTRICQUEVILLE tirfields, Serqueux Railway cuntre and a power station near\nHOUEN. 43 squadrons of fighters provided support. Enemy casualties 35, 10, 6.\n12 Fortresses and 3 fighters missing. Hamplens torpedoud n. 3,000 ton ship off\nNORWAY and fighter bombers damaged 3 1,000 ton ships and several smallor vessels\noff FRANCE and HOLLAND. 5 fighter bombers missing.\n16th/17th. Aircraft desputched - MODANE Railway Centre 345 (4\nmissing); another railway vinduct near ST. R.PHAEL 12 (one missing); BERLIN 5;\nLeaflets 3; Intruders 44 (1 missing). Wenther over MODANE good and bombing well\nconcentrated.\nITALY. 14th/15th. 186 medium and light bombers attacked enumy\ncommunications in the SALERNO area dropping 315 tons.\n15th. 357 hoavy, medium and light bombers dropped about 420 tond\non roads and enomy troop concentrations in the NAPLES, EBOLI and POTENZA are\nBeaufighters torpedoed a 2,000 ship off LEGHORN.\nRegraded Unclassified\n1000 part\nU.S. COAST GUARD\n150\nTREASURY DEPT.\nHEADING RW94/544Y\nPTA 544Y 181805 QUAT W QUAH GR19\nTRLP 12453..\nLOS o N o T\nSECTREAS OFFICE..\nCOMDT cg..\nTEXT\nCHARLES BELL MAIN TREASURY BLDG X CHARLIE COULD YOU\nARRANGE BERTH NEWYORK TO WASHINGTON MIDNIGHT MONDAY\nX GEORGE ALBEE\nBT 181805\n3\nTOD 1809 18 SEPT 43 JG\nOPERATOR'S TH RECORD AND DATE\nOFFICIAL INITIALS\nRegraded Unclassified\n100 HIP\nU. S. COAST GUARD\n151\nTREASURY DEPT.\nHEADING RW62/544Y\nPT A Q2U 181508 QUAT W QUAH GR23\n/\nSECRETARY OF THE TREASURY\nOFFICE OF SECTREAS\no\nCOMMANDANT CG\nTEXT\nCHARLES BELL SECTREAS OFFICE X ARRIVING PITTSBURG 12400 CAN YOU\nGET ME OUT OF THERE FOR WASHINGTON ON PLANE PLEASE\nX FRED SMITH BT 181508\n3\nTOD: 1516 SEPT 18 1943/SX\nMO\nOPERATOR'S RECORD AND DATE\nOFFICIAL INITIALS\n$\nRegraded Unclassified\n152\nCopy\n9/18/43-\nU. S. Coast Guard\nFrom:\nSec. Treas. Office\nTo:\nFred Smith\nFor Fred Smith X Check with reservations at\nsirport Pittsburgh X Your reservation priority three\nPennsylvania Central Airlines departing Pittsburgh\n1355Q arriving Washington 1516Q X Signed Charles Bell.\n18 September, 1943. 1641.\nRegraded Unclassified\nYORK\nU.S. COAST guard\n153\no\nTREASURY DEPT.\nMEADING\nRW60/N0I 544Y PT A Q2U 181504 QUAT W QUAH GR28\nSECRETARY OF THE TREASURY\nOFFICE OF SECTREAS\nCOMMANDANT CG\nTEXT\nTHEODORE GAMBLE MAIN TREASURY BLDG WASHN DC X KINDLY ASK\nMARK ODEA SUGGEST BEST SHIPYARD I CAN DELIVER SPEECH ON\nMARITIME DAY ANSWER WITHIN HOUR IF POSSIBLE BT 181504\n3\nCC (C - GR27) TOD: 1510 SEPT 18 1943/SX\nOPERATOR'S RECORD AND DATE\nMO\nOFFICIAL INITIALS\n$\nRegraded Unclassified\n154\nall\nU.S. COAST guard\nTREASURY DEPT\nHEADING RW64/544Y\nPTA Q2U 181514 QUAT W QUAH GR20\nSECRETARY OF THE TREASURY\n0\nOFFICE OF SECTREAS\nCOMMANDANT CG\nTEXT\nPRIORITY\nBELL AND GAMBLE SECTREAS OFFICE X PLEASE CHECK ON NUMBER\nOF BOND OUTLETS OPERATING AT NIGHT X HAVE WE ENOUGH\nBT 181514\n3\nTOD: 1520 SEPT 18 1943/SX\nOPERATOR'S RECORD AND DATE\nOFFICIAL INITIALS\n$\n5\nRegraded Unclassified\n155\n121 gift\nU.S. COAST GUARD\nTREASURY DEPT\nHEADING\nRW46/544Y PTA 02U 181400 QUAT W QUAH GR34\nSECTREAS\nSECTREAS OFFICE\nCOMDT CG\nTEXT\nFOR BELL AND GAMBLE OFFICE OF SEC OF TREAS X PLANTS HERE\nHAVE NO BOND QUOTAS X KE EVIDENTLY THIS IS TRUE IN ILLINOIS\nALSO X QUESTION HOW MANY STATES HAVE GIVEN QUOTAS TO PLANTS\nBT 181400\n3\nOFFICIAL INITIALS\n8NdSEPT 1943 JO\n5\nRegraded Unclassified\n156\nyour yes\nU.S. COAST GUARD\nTREASURY DEPT.\nRW53/544Y\nPT A 544Y 181428 QUAT W QUAH GR36\nHEADING\nTRLP 12453\nSECTREAS OFFICE\n0 0\nCOMDT CG\nTEXT\nTHEODORE ROOSEVELT GAMBLE MAIN TREASURY BLDG X WOULD YOU PHONE\n\" SATEVEPOST ASK IF INTERESTED IN BUYING STORY TITLED QUOTE\nWORLDS MOST FANTASTIC SALES ORGANIZATION UNQUOTE THE INSIDE STORY\nOF SELLING WAR BONDS BY ME X ALBEE BT INN 181428\n3\nTOD 1435 18 SEPT 1943 JO\nOPERATOR'S RECORD AND DATE\nMO\nOFFICIAL INITIALS\n$\nRegraded Unclassified\n157 0\nor HIP\nU.S. COAST GUARD\nTREASURY DEPT.\nHEADING\nRW47/544Y PT A 5448 181403 QUAT W QUAH GR30\nTRLP 12453\nSECTREAS OFFICE\nCOMDT CG\nTEXT\nGAMBLE SECS OFFICE X SECRETARY WANTS TO KEEP REPORTS COMING\nFROM OWI ON AXIS REACTION TO THIRD WAR LOAN FOR DURATION OF\nDRIVE X CAN YOU FIX IT X FRED BT 181403\nis\n3\nTOD 1407 18 SEPT 1943 JO\nPEPATOR'S RECORD AND DATE\nMO\nOFFICIAL INITIALS\n$\nRegraded Unclassified\nCOPY\n158\nU. S. Coast Guard\nFrom: Office Sec. Treas.\nTo:\nSec. Treas.\nMark Odea recommends Southeastern Shipyard Savannah\nGeorgia X They have big day planned X Grace Tully 18 christening\nship X Plant to receive special M award that day X Maritime\nand state officials to make big day of it and believe ideal\nspot for you to broadcast from X Your participation would be\nseparately handled and be one of several important events\nduring day X Suggested hour 1100Q X Reference bond outlets\nat night we have six thousand theaters two thousand drug stores\nand yesterday asked fifteen hundred Chambers of Commerce to\nsponsor a merchants night like that being staged in Chicago\ntonight X Every State Street store from Marshall Fields down\nremaining open tonight for the sale of bonds only preceded by\nbig promotion campaign X Feel we have night outlets sufficiently\ntaken care of X Have report for you on plant quotas from cross\nsection of country that I think looks pretty good X If Albee\n18 not ribbing I can sell story X OWI continuing monitor reports\nX This cleans the desk 80 give us some more X Love and kisses X\nGamble.\n18 September, 1943. 1630.\nRegraded Unclassified\n159\nU. S. COAST GUARD\nTREASURY DEVE\nRW49/544Y\nPTAI Q2U 181407 QUAT W QUAH GR49\nHEADING\nSECTREAS TREAS\nSECTREAS OFFICE\nCOMDT CG\nTEXT\nDAN BELL AND TED GAMBLE OFFICE OF SEC OF TREAS X FEDERAL RESERVE\nBANK OF STLOUIS HAS SET UP QUOTA BY STATES FOR EIGHTH DISTRICT\nAND HAS RESULTS OF BOND D SALES EVERY NIGHT X QUESTION WHY CAN\nNOT EVERY FEDERAL RESERVE BANK DO LIKEWISE AND WIRE IN RESULTS\nNIGHTLY BT 181407\n3\nOPERATOR'S RECORD AND DATE\nOFFICIAL INITIALS\nTOD 1616 18 SEPT 1943 JO\n$\nDWB:ew\nRegraded Unclassified\n160\nSeptember 18, 1943\nMemorandum to be radioed to Secretary Morgenthau\nRe: Quota and bond sales by States in\nEighth District\nSystem for reporting sales which St. Louis has\nis result of our instructions. All Federal Reserves\nhave it. We get these reports each day from Federal\nReserve banks and such reports form the basis of\ndaily State figuresgiven to the Press.\n(Initialed) D.W.B.\nDWB:ew\nRegraded Unclassified\n161\nCOPY\nU. S. Coast Guard\nFrom:\nOffice Seo. Treas.\nTo:\nSec. Treas.\nRe Quota and bond sales by states in Eighth District X\nSystem for reporting sales which St. Louis has 1s result\nof our instructions X All Federal Reserves have it X\nWe get these reports each day from Federal Reserve Banks\nand such reports form the basis of daily state figures\ngiven to the press X D W Bell.\n18 September, 1943. 1633 NM\nRegraded Unclassified\n100 N°\nU.S. COAST GUARD\n162\nTREASURY DEPT.\nRW55/54AW\nPT A 02U 181441 QUAT W OUAH GR33\nHEADING\nSECRETRARY OF THE TREASURY\nOFFICE OF SECTREAS\nCOMMANDANT CG\nTEXT\nPRIORITY\nHARRY WHITE OFFICE OF SEC OF TREAS X WILLING TO GO BEFORE\nCONGRESSIONAL COMMITTEES NEXT WEDNESDAY TO EXPLAIN WORLD\nSTABILIZATION OF CURRENCY PROGRAM X HAVE TO BE IN NEWYORK CITY\nALL DAY THURSDAY BT 181441\n(SEC SEZ RUSH THIS ONE PLEASE)\n3\nTOD: 1448 SEPT 18 1943/SX\nOPEPATOR RECORD AND DATE\nOFFICIAL INITIALS\nMO\n$\nRegraded Unclassified\nEXP SALE\nU.S. COAST GUARD\n163\nHEASURY DEPT\nHEADING RW108/546Y\nPTA NE546Y 181913 QUAT W QUAH GR24\nTRLP 12453..\nSECTREAS OFFICE..\nCOMDT CG..\nTEXT\nISABEL DIAMOND MAIN TREASURY BLDG X KINDLY GET SEVERAL 1917\nSPEECHES WILSON AND MCADOO ETC ESPECIALLY THOSE RELATING TO WAR\nBONDS y GEORGE ALBEE BT 181913\n2\n3\nTOD 1916 18 SEPT 43 JG\nOPERATOR'S RECORD AND DATE\nOFFICIAL INITIALS\nTH\n$\nRegraded Unclassified\n- 04/9\nU. S. COAST GUARD\n164\nTREASURY DEPT\nHEADING\nRW67/54AY\nP T A 02U 181533 QUAT W QUAH GR63\nSECTREAS\nSECTREAS OFFICE\nCOMDT\nTEXT\nGAMBLE SECTREAS OFFICE X STAND BY FOR CALL FROM ME\nFROM PITTSBURG 12200 TO CLEAR ANY STATEMENT FOR TONIGHT X\nSMITH WILL BE IN OFFICE THIS AFTERNOON TO CLEAR ANY\nLATER STATEMENT THIS WEEK END X WHERE WE ARE LOTS\nOF SUNSHINE AND PLENT; OF OXYGEN AND IN CASE YOU\nDONT KNOW IT WE ARE OVERFLOWING WITH GOOD CHEER AND PLENTY\nOF IDEAS\nBT 181533\n3\nTOD 1443 18 SEPT 43 JG\nOPERATOR'S RECORD AND DATE\nOFFICIAL INITIALS\nMO\n$\nRegraded Unclassified\n110 HIP\nU.S. COAST GUARD\n165\nREASURY DEPT.\nHEADING\nRW45/544Y PTA Q2U 181357 QUAT W QUAH GR13\nSECTREAS\nSECTREAS OFFICE\nCOMDT CC\nTEXT\nFITZGERALD OFFICE OF SEC OF TREAS X ARRANGE TO HAVE JOE MEET ME\nBT 181358\n3\n&NDSEPT 1943 JO\nOFFICIAL INITIALS\nNI\n$\nRegraded Unclassified\nself\nU.S. COAST GUARD\n166\nTREASURY DEPT\nHEADING\nRW65/54AY PT A 02U 181520 QUAT W QUAH GR13\nSECTREAS\nSECTREAS OFFICE\nCOMDT CG\nTEXT\nPLEASE FURNISH MRS KLOTZ WITH COPY OF ALL MESSAGES WE HAVE\nSENT TODAY BT 181520\n3\nENGENT 1943 JO\nOFFICIAL INITIALS\n$\nMO\nRegraded Unclassified\n167\nSeptember 18, 1943\nDear Mr. Craw:\nI want you to know that I appreciate\nyour coming on the radio program with me\nlast Sunday in connection with our Bond\ndrive.\nI have received a number of letters\nand calls that would indicate that the pro-\ngram was very effective and successful, and\nyou can be proud of the part you played to\nmake it so.\nSincerely,\n(Signed) H. Morgenthau, Jr.\nMr. Nicholas Craw\n1345 Hilltop Road\nCharlottesville, Virginia\nFS:gr Rs\nRegraded Unclassified\n168\nSeptember 18, 1943\nDear Lieutenant Davis:\nI want you to know that I appreciate\nyour coming on the radio program with me\nlast Sunday in connection with our Bond\ndrive.\nI have received a number of letters\nand calls that would indicate that the pro-\ngram was very effective and successful, and\nyou can be proud of the part you played to\nmake it 80.\nSincerely,\n(ligned) H. Morgenthau. IT\nLieutenant Landon Davis, Jr.\nOxford Road\nCharlottesville, Virginia\nFS:gr\nRegraded Unclassified\n169\nSeptember 18, 1943\nDear Mrs. Harlow:\nI want you to know that I appreciate\nyour coming on the radio program with me\nlast Sunday in connection with our Bond\ndrive.\nI have received a number of letters\nand calls that would indicate that the pro-\ngram was very effective and successful, and\nyou can be proud of the part you played to\nmake it so.\nSincerely,\n(Signed) II. Morgenthon, Jr.\nMrs. Henry Harlow,\nRoute 2,\nCharlottesville, Virginia.\nFS:gr is\n9-17-43\nRegraded Unclassified\n170\nSeptember 18, 1943\nDear Mr. Henderson:\nI want you to know that I appreciate\nyour coming on the radio program with me\nlast Sunday in connection with our Bond\ndrive.\nI have received a number of letters\nand calls that would indicate that the\nprogram was very effective and successful,\nand you can be proud of the part you played\nto make it 80.\nSincerely,\n(Signed) I. Mergenthau, Jr.\nMr. Willis Henderson\nMonticello, Virginia\nFS:gr By\nRegraded Unclassified\n171\nSeptember 18, 1943\nDear Mr. Hope:\nI want you to know that I appreciate\nyour coming on the radio program with me\nlast Sunday in connection with th our Bond\ndrive.\nI have received a number of letters\nand calls that would indicate that the pro-\ngram was very effective and successful, and\nyou can be proud of the part you played to\nmake it so.\nSincerely,\n(Signal) 1. Mergenthan, Jr.\n120\nMr. Bob Hope\nDel Monte Lodge\nPebble Beach, California\nFS:gr\nRegraded Unclassified\n172\nSeptember 18, 1943\nDear Mrs. King:\nI want you to know that I appreciate\nyour coming on the radio program with me\nlast Sunday in connection with our Bond\ndrive.\nI have received a number of letters\nand calls that would indicate that the pro-\ngram was very effective and successful, and\nyou can be proud of the part you played to\nmake it SO.\nSincerely,\n(Signed) M. Mergenthau, Jr.\nMrs. Betty King\nc/o IX Silk Mills\nCharlottesville, Virginia\nFS:gr #\n9-16-43\nRegraded Unclassified\n173\nSeptember 18, 1943\nDear Sergeant Kozak:\nI want you to know that I appreciate\nyour coming on the radio program with me\nlast Sunday in connection with our Bond\ndrive.\nI have received & number of letters\nand calls that would indicate that the\nprogram was very effective and successful,\nand you can be proud of the part you played\nto make it so.\nSincerely,\n(Signed) H. Merganthon, H.\nSergeant Frank Kozak\nArchbald Street\nCarbondale, Pennsylvania\nF8:gr\nR\n9-17-43\nRegraded Unclassified\n174\nSeptember 18, 1943\nDear Ernie Pyle:\nI want you to know how much I appreciated\nyour coming on the \"We the People\" program\nlast Sunday. From all reports, our program\nwas very successful and effective, and in a\nlarge measure this was due to the contribution\nyou were able to make.\nI also appreciate the time you gave me\nfor our private discussions. I am sure the\ninformation which you have will prove very\nhelpful to the war effort when it is passed\nalong to the right places.\nSincerely,\n(Rigned) H. Morgentham, Jr.\nMr. Ernie Pyle\no/o Lee Miller\nScripps-Howard Newspaper Alliance\n1013 Thirteenth Street, Northwest\nWashington, D. C.\nFS:gr\n9-16-43\n&\nRegraded Unclassified\n175\nSeptember 18, 1943\nDear Mrs. Truscott:\nI want you to know that I appreciate\nyour coming on the radio program with me\nlast Sunday in connection with our Bond\ndrive.\nI have received & number of letters\nand calls that would indicate that the pro-\ngram was very effective and successful, and\nyou can be proud of the part you played to\nmake it BO.\nSincerely,\n(Migned) H. Mergenthan, Jr.\nMrs. Lucian King Truscott, Jr.\nJefferson Park\nCharlottesville, Virginia\nFS: gr if\nRegraded Unclassified\n176\nSeptember 18, 1943\nDear General Wickersham:\nI want you to know that I appreciate\nyour coming on the radio program with me\nlast Sunday in connection with our Bond\ndrive.\nI have received a number of letters\nand calls that would indicate that the pro-\ngram was very effective and successful, and\nyou can be proud of the part you played to\nmake it so.\nSincerely,\n(Signed) H. Morgenthan, Jr.\nBrigadier General Cornelius W. Wickersham\nCommandant of the School of Military Government\nUniversity of Virginia\nCharlottesville, Virginia\nFS:gr\nto\nRegraded Unclassified\n177\nSeptember 18, 1943\nMy dear Mr. Celler:\nIn the absence of the Secretary.\nI am acknowledging your letter of\nSeptember 16, together with the on-\nclosed statement released on August 12.\nJust as soon as Mr. Morgenthau is\nback in his office I shall be glad to\nbring both your letter and the enclosure\nto his attention.\nVery truly yours,\n(Signed) H. S. Klotz\nH. S. Kletz,\nPrivate Secretary.\nHonorable Emanuel Celler\nHouse of Representatives\nWashington, D. c.\nGEF:fw\n9/18/43\nRegraded Unclassified\nfol Has been arboro\n178\n[MANUEL CELLER\nNEW YORK OFFICE\nbox\n10TH DISTRICT NEW York\n1450 BROADWAY\nNew York CITY\nMEMBER OF\nMMITTER ON THE JUDICIARY\nCongress of the United States\n1924 NEW HOUSE OFFICE BUILDING\nWASHINGTON\nMASSINGTON SECRETARIES\nbouse of Representatives\nNEW YORK SECRETARIES.\n- EFFRAT MARGARET BROOKS\nJACOB GRALLA\nMARY DOUGHENTY\nWashington, D.C.\nSeptember 16, 1943\nHonorable Henry Morgenthau, Jr.,\nSecretary of the Treasury\nWashington, D. C.\nMy dear Mr. Secretary:\nviews\nI was keenly disappointed that my aintement did\nnot find P. responsive chord within you this morning.\nI am sending you herewith a statement which I\nprepared, entitled the \"Betrayal of Palestine.\" You\nmay not have time to read it now. Lay it aside for\na more leisurely moment.\nYours truly,\nEmamuel\nEMANUEL CELLER\nENC:\nRegraded Unclassified\n179\nFor Immediate Release\nAugust 12th, 1943\nTHE BETRAYAL OF PALESTINE\nSTATEMENT BY CONGRESSIAN EMANUEL CELLER, REPRESENTATIVE\nTENTH CONGRLSSIONAL DISTRICT, IN YORK\nFrom thoroughly relisble sources, information of a bitterly dismaying\nnature has come forth that a joint statement will be issued shortly by the\nBritish Foreign Office and the State Department, silencing all discussion on\nthe Arabinn-Jewish question in Palestine, and which will with one duvastating\nstroke the hopes of those who dared look towards Palestine as the one\nrealistic approach to the solution of the homelessness of e driven people. It\nwill, in effect, be an implied, but nonetheless conclusive, acceptance of the\nMacDonald White Paper of 1939 which decreed that no more than 75,000 Jews will\nbe admitted to Palestine for a five year period. The joint statement will with\nits \"Silence, please\", drown the clamour of the tortured Nazi victime pleading\nfor a haven of refuge. or the alloted 75,000 certificates of entrance, less\nthan 29,000 now remain unused. These, more or less, will be confined to\nchildren. Adherence to the MacDonald White Paper means that in 1944 Jowish\nimmigration into Palestine must cease altogether if so voted by El majority of\nArubs.\nEven more alarming is the accompanying information that the joint state-\nment will be issued with the knowledge and consent of the President. Although\nhe NES importuned to stay the hand of the State Department, the reactionary\nforces were stronger, and, while it may be somewnat softened as a result of the\nintercession of the President, it apulls the doom of the Zionist cause and the\nbeginning of the end of the long trek home. In the name of expediency and\nappeasement, under the shallow pretense of cilitary and political necessity,\nPulestine 60 EL homeland for the Jews becomes the \"lost Atlentis\" of & helplens,\nhopeless, unwanted people.\nNeither we nor Dritain can fall back upon the hackneyed, amaggeroted and\nconvenient excuse of military necessity or expediency. The lessons of history\nseem unavailing. Our scrup iron and oil did not appease Japan. Our appeasement\nof Vichy and Petain gave us Laval. Our diploancy with Pronce and his Falange\nand with Argentine has been artless and childlike. They play and continue to\nplay ducks and drakes with us.K\nHow 111 have the June used Palestine that now the one open door must like-\nwise be slammed shut in their search for dignity and security. They husbanded\nthe arid soil of Palestine and made it rich in the fruits of the earth; they\nbuilt hospitals for the Jen and Arab alike; they brought the lamp of learning\nto the desort with schools and the world-runswned University; they brought music\nand science to a world that had been left behind in civilization's murch.\nThat which WELD uncultivated and considered uncultivable by the Araos hue\nbown cuitivable and cultivated by the Jews. The sands of Rishon 10 Zion, the\nswemps of Hedra, the rocks of Motza, blue stoney hills of Henito, and the largest\nmalarial Are in Poluatine, the Hulch Booin, which has been classified not only\nBy the Arabs but also by the British Government E.O uncultivable land ie-now-\nare now being turned into the most prosperous and productive land of Palestine.\nThey had to reclaim, drain, reforest, fertilize and irrigate; they introduced\nmodern and intensive muthods of cultivation, modern machinery, new breede of\nenttle and poultry, new plants and need rotation of crops. In 1939, the Peel\nRoyal Commission stated: 12 years \"go the national home was an experiment; today\n16 is a going concern!\nThere has been since then further expansion. Now industries have been\nstarted, bextile, chemical, wood, metal, electrical, food, building clothing\nwhich supply the home market and the Near Last L8 far as India. In 1941 alone,\nover 200 new Jowish industrial undertalding were established.\nNor has the Lanigration and auttlement of Jeus in Polestino boen at Arob\nexpense. The increase in the yield of the land has unde it possible not meroly\nto provide for additional settlers, but ackes it possible for the old acttlers\nto enjoy z. higher standard of living. The Arabs, it was shown, have chosen to\nlive in gruatest numbers in the neighborhood of Jowlsh suttlements, and the in-\ncrease of the Arcb population has closuly paralleled the Junish increase, not\nRegraded Unclassified\n180\n-2-\nonly through the lowered death rate, but also Decluse large numbers of non-\nPolustinion Araba had neeped into the country to enjoy the highest standard\nof living in the Near East. Indued, it would be E calamity for the Arabs\nIf the Junish settlement in Polustine were to DE liquidnted. The much\nvainted limitations of \"absorptive capacity\" of Palestine 1a & myth in the\nlight of Dr. statement that there is room for 2,000,000 more souls\nin Polestine, Cnd oven that estimate has boon deced conservative. It in\ntime to ask why those facts are not given space in newspapers and magazines\nof Large circulation? Have not they earned a right to be heard?\nLut the Juice go elowhere, it will be said in mocking perallel to \"Let\nthan vot cake.\" Of all the nations fighting together in the name of freedom\nand liberty, not one has raised its voice to make then welcome, to offer them\nrescue, refuse or asylum.\nwhat answers can those responsible for the statement give when 48kud:\n\"What in the rumedy?\" Whore shall these people guilty of no crime but that\nof buing born Jun to? what plans are offored by the authore of the Atlantic\nCharter end the Four Freedoms for the re-suttlement of the June after the\n4019 Will the anti-Sumites give the finel answer to an uprosted people?\nOn the contrary, it would appear that curtain forces have done their\nwork exceedingly well in preparing for an uncritical receptivity of the\nforthcoming atatement. A number of inspired articles have appeared, all\nfollowing in what to be E planned suguence, to crecto the proper et-\nnonphere, buginnin with the publication of King I'm Soud's statement in ita\nopposition to Zionism end continuing through with the publication of the\ncrticles by Cyrus L. Sulzberger in recent issues of the \"Now York Times\"\nwhich more sunsational Will occurate and more impolitic than wise.\nay WER this puriod chosen to review adversely the Junish question in Files-\ntine? Is Unive any connection between the appearances of these articles and\nthe mischier to ou loosed shortly by V.itchell Street in London and our\nState Department?\nHow relevant MY or asy not be the fact that one or\"more of our in-\ndustricl glants have received valuable concussions from Kin: Ibn Saud we\ndo not know. Public Relations Counsolors cro cenny people.\nSmall wonder that Ur. Churchill lias sloupless nights when he thinks of\nfda friend Choin luizmann, Zionist lunder, for did not Dr. Churchill say\nLn 1939 at the appearance of the nou 1.ferious W: aDonald Thite Paper:\n\"I bound to vote against the proposale\nof His Wajesty's Government. As one intimately\nand responsibly concurned in the earlier stages\nof our Palestine policy, 1 could not stand by and\nsue solemn engogements into which Britain has\nentered before the world set acide for reasons of\nadministrative convenience or - and it will be\na voin hope - for the salte of c quiet 11ft. I\nshould feel personally unbarre: satd in the most\nacute manner If I lent myself, by silvnce or\ninaction, to what I must regard ZS an act of ru-\npudietion.\nI DES from the beginning a sincere advocate\nof the Balfour Declaration and I have made repeated\npublic statements to that effect There is much in\nthis White Paper which is clien to the spirit of the\nBalfour Declaration, but I will not trouble about that.\nI select the one point upon which there is plainly\nD. breach end repudiation of the Dolfour Declaration -\nthe provision that Juvish indigration can be stopped in\nfive years' time by on Arcb ME. jority hot is that\nbut the destruction of the Bolfour Declaration? /het\nis that but 2 breach of faith? What is it but e one-\nsidul denunciation - that La celled In the Jergon of the\npresent time, 2 unilatoral denunci, tion of on engagement?\nIn our condition 30 perious 206 our state so poor that\nwe must, in our weakness, make this scorifice of our\ndeclared purpose?\"\nRegraded Unclassified\n181\nKr. Churchill WCD aware that 53 nations including the United States had\nretified the Halfour Declaration. On the 21st day of September, 1922, our\nAmerican Congruss by wey of Resolution approved the establishment of e national\nhode for the Jewish People in Palestino. May, over and beyond the universal\nacceptance and approval of the Belfour Doclapation, on December 23, 1924, E\nConvention was signed by the then Prine Minister of Great Britain, Austen\nChamburlain, and our then Secretary of State, Frank B. Kollogg, concerning the\nrights of Britain and the United States in Palestine. Significantly, Article\n15 and subcrticle 7 of Article 28 read as follows:\nArticle 15\n1 The mendantory shall See that no discrimination of any\nkind shall be made between the inhabitants on the ground\nof rece, religion, or language. Ho person shall be excluded\nfrom Prlestine on the sole ground of religious buliefs.\nSubarticle 7 of Article 28\nNothing contained in the present convention shall be\naffected by any modification which may be mede in the\nterms of the mandate, as recited above, unloss such\nmodification shell have Suan assented to by the United\nStates.\nYet in open violation of both the Balfour Declaration and the Convention\nof 1924, the MacDonald White Poper finunted the neighted decision of responsible\ngovernment heads. The Belfour Declaration IES consented to by the United States\nThe Convention of 1924 was consented to by the United States. Who consented\nto the promulgation of the White Paper? That can Mr, Anthony Eden say when\nconfronted with the forthcoming statement as his own phrases attured in this\ncountry re-ucho through his aind, \"Never again\", he said, \"must the civilized\nworld be rundy to tolerate unilatural infrection of trusties. That would be\nto sap the whole foundation of the socure international 111'e which it is our\nprincipal purpose to restore.\" \"That in the Thite Paper but a unileteral in-\nfraction of a treaty solumnly entered into?\nSursly silunce cennot break the back of bigotry and recial antipathies.\nZalightonment cen only follow in the nake of the trubh, the truth about the\nArabs, for instance. The Allied Nations are well aver- that of all the\nsenitic tribes in the East only the June contributed the full sucoure of\nloyalty to the Allied cause, bringing in proud bulief their blood and humble\ntreasures. Not DO did the Arabs of Egypt, Syria, Iraq and Iron. For from\nboing deutral, they were actually hostile, wasy prey to the foul noises of\nGurman propaganda, In it nocessary to point to the Iraq revolt to illuminate\nthat point?\nThe\nThe Arab londed aristocrate, the eniro and military chieftens are as\ninsatiable as Satan. It were just as impossible to actiofy or appease them as\nis to try to hold back the tidu with a groan, You cannot dual with them\n\"cartus sur table\". And be it remembered these potentation end princes are\nArabia - Pan Arabic. Moduration and palliation are considered by them as\nsigns of weakness, They take suitable advantage. Just CO Rommel and his\nAfrike Korps Were ready to leep from KL Alomein to Cairo and then sual the\nfate of the Allies in the llver Last by closing up the Suez Conal, the lately\navoued friund of America and Britain, King Ibn Soud, had not / word to say,\ncould not sper- E. single trooper, occul or donkey for Britcin's use. More\nBritish troops aure required to patrol the doubtful Arab areas and citius,\nespecially in Egypt, than there actually focing Roumel's Afrike Korpa in\nthe Lybian descrt, Piorro von Pesson reports.\nIt WEB the June of Polustine that stepped forward 88 El man, voluntarily,\nnot waiting for on army call. How may know or cir- to know that Palestine\nfurnished the British armius in Lybia, Eritroa, Ethiopic and Sommliland\nthousands of doctors, nurses and duntists and placed the great Hedassah mudical\ncenter of Jurusalem at the disposal of the Empire? Who in there now to give\npublic recognition to the courage, loyalty end stendfestness of the Jeas in\ntheir aid to the Allied nations in nohieving the trumendous victories? The\nRegraded Unclassified\n182\nThe striking fact remains that the countries of the Nuar Gost with an\nregregate population of 45,000,000 (if Turkey is included) have contributed\nnot a single soldier to the forces of the United Nations, the one exception\nouing Polustine which has given her voluntuurs of whom more than 3/4 are\nJown, Those Palestinian June clone in the British Imporial forous numbered\n17,000 in September, 1942 in addition to the 10,000 in the military constabu-\nlary of the country.\nYet, such has been the reward of the June that Areb appersement is\nplaced above Junish honor. In Algiors, another cruel blow is struck by\nGeneral Giroud's abrogation of the Crumieux docroe, depriving the Algurien\nJusta of their French citizenship, theirs since 1870 when Minister Crumisux\nin recognition of their loyalty and survice to France 30 ducroed, a citizen-\nship that the Areb never wanted and never nulcomed.\nThe MecDonald White Paper must be exemined in the light of events\nsince 1939. If it nos a \"breach of faith\" then, how much gronter is the\nbetrayal today? No other course but its abrogation in open now and the\nentire problem of the June and Polostine must Do et the forth-\ncasing Intergovernmental Conference on Rufugeos. To foreclose considera-\ntion of additional Jewish innigration into Palestine by any joint pronounce-\nnot now would doom the conforence to failure. It would suruly report the\ncruel mockery unceted it Burrauda and the tragedy of errors at Evian. It\ncould cake us co-conspiratoro in the violation of international decency and\nhonor.\nIn the weke of the turrible scourge of wer, the bitter lesson is\nhermured hoge that the Junish problem is a problem of the civilized world,\nJun and Guntile clike. The apathy of nations to the burning, sloughtering\nand mossering of June in Geranny did not prevent the horror from spreading\nto Cauchoslovakie, to time Polus, to the Dutch, to the Frunch. That which\nwas violied as et Jondan question become a world conflegration. Inhuncrity in\nnot exclusive; it cannot confine itcolf to one people without overflowing\nin all directions to drown E world in hatred and in flacks,\nNo puace can be just or adequato until the Juvish problem in outtled.\nThe one realistic approach in Poleutino.\nI yield to no non in my admiration for the British mort and woon and\ntheir mcgnificent efforts in this treasandous crises. The \"comon men\" in\nEngland has performed heroically the supurhumen tasks occasioned by this\ngroctunt scourge in civilized history. The English people and the American\npeople, however, should not be blinded by the dust-storms of official pro-\ntust BD to the fate of the Juice in Europe; they should not be duefened by\nthe noise. Conversation is one thing; it cen be chariting, interesting and\noften vducational. But the situation her long since pessed the conversational\nobego. Action now is necessary.\nThun the surgoon enters the operating room and his stoff of cosistents\nclose in on his at the table upon which the patient rosts, immodiate action\nclasst clways recults, The surguon dous not take scalpul in hand end meke\na fun decisions and then cordially invite the boys to n. game of poker.\nFrom then on F.11 is deftness, co-ordination and cooperation. A human life\nis at stoke and time lo of the sssunce. If, in the interests of humenity,\nthe surgeon doos not hositate, whet certhly russon can pe presented at this\ntime to countenance dulty when the circumstances cro surrounded by E complete\nsura of fatality.\nhave seved us r.nd the world. But how reconcil< that with her attitudo towards\nI Peport by nvowel of addiration for Ingland's unintly uncrifices that\nPrivatine. A helo need slip but e full inchus to become A noose. She must\nopun Polustine to mass Junish indigration it anou; otherwise, Europe\nbucomes a mosive Jewish supulchre.\nan insupurable burden that must bu gotton rid of willy-nilly, I must remind\nBecause some of the English Incore regard the Jonish question CB\nthem of C. classic, favored story of their own King George VI. A boy is\ncerrying an oven child up the hill. then asked if bire ourden VICA\ntoo much for his, he replied, \"It in not C burden, it is W brother.\"\nRegraded Unclassified\n183\n-5-\nEithur Christianity in England and America give concrete merning to \"Love\nthey neighbor EJ theyself\" or buar the stizar of hypocricy. Be it remembered\nthat not everyone who LOVE, \"Lord, Lord\", shell enter the Kingdom of Hurven.\nReading the official protestations of horror, listuning to the verbel\nexpressions of compassion and voinly writing for the bands of inortie to drop\nfrom the hends of officialdom, I can almost hour the White Queen of \"Alice\nin Nonderland\" anying to Alice, \"The rule is: Jen tomorrow end Jam yesterdry,\nbut nuver jam today.\"\nWhat schoolroom cat and mouse geme la this to promise, thun plague? Are\nthe insotiable Aroba to be fud while the cry of distrossed millions finds no\nanswering call?\nThe British Empire upon which \"the sun nover gets\" with its for flung\npossessions can now find it in her heart and aind to dony the tiny portion\nthursof that is Polectine to C. people who have watered and nourished it in\nreliance upon C nighty promise. Had she offered other havens to the storm³\ntoased of Europe, she night then have said ES did King James to the fly: \"Have\nI three kingdoms and thou must needs fly into ay wye?\"\nWhat are au offering but silence?\nThe Jens everyahere - horo and abroad - look to President Roosevelt ID\ntheir only hope, their modern Roses to lead then out of the ,ilderness, to\nSt.Ve them from E now and /Dro terroristic disspora. It apparently is too\nInto to change the apulo of opinion of Churchill, Eden, Helifex end other\nEnglish leadors SEV4 by drratic name. Their iduns oro congerled except as\nRossevelt will dumand change. in humbly potition his to benr upon the\nBritisa Foreign Office to code the light that only justice, Mercy and\nhumanity con bring. He must bring Ingland back onto the both of the Belfour\nDeclaration.\nI ctll upon the good people of America to help in this crises. There is\nso little time to not. Soon Roosevult will must Churchill. They any be in\nconclave now. Express your views to thos in cuthority in Enchington - to the\nPresident, to Secretary Hull, Secretary Morgunthou end other members of the\nPresident's Cabinet, your Send tors, your Congressmen. Your voice will shatter\nthis conspiracy of silunce.\nRegraded Unclassified\nNOT TO BE RETRANS !ITTED COPY NO.\n13\n184\nBRITISH HOST SECRET\nU.S. SECRET\nOPTEL 308\nInformation received up to 10 8.m. 18th September,\n1943.\n1. Naval\nTwo of H.M. Dattleships bombarded the Salerno\narea on 16th. One was severely damaged by rocket bonbs\nand is proceeding to Malta in tow. A floot auxiliary\nwas also bombed on 14th and is in tow. About 8 Italian\ncargo ships arrived at Malta on 14th including one of\nover 5,000 tons. An Italian Hospital Ship of 9,500\ntons arrived on 15th. The port of Drindisi was opened\non 14th and is in working order but labour is scarce.\nThe Italian islands of Procida and Ponza were occupied\nby Allied forces on 15th. Ischia sur rondered on 16th.\n2. Military\nItaly 16th. By four p.m. leading elements of the\nEighth Army had reached Villapiana on coast opposito\nScalea where they were in contact with our patrols from\nTaranto. Further inland patrols had reached\nCastrovillaco and Lagonegro where they were in touch with\nthe enemy, and Vaclo where they have since been reported\nin touch with the Fifth Army. South East of Salerno\nthe Fifth Army have reccempied Albanella and Eest and\nNorth of Salerno have driven off enemy counter attacks\nnear Nontecorvino and Cappezzano.\n3. Air Oporations\nWestern Front. 16th/17th Modeno 651 tons Propped.\nCloud and icing met on the way but clear visibility\nat Modane, Objective identified visually, many firos\nscon burning well.\nAntheor No cloud, good visibility torgot\nclearly seen all crows confident bombing vas occurate\nand one arch reported definitely hit.\n17th/18th. Aircraft despatched:sea mining\neight, Berlin six, railways Britanny soventeen.\nItaly 15th/16th. Wellingtons dropped 240 tons\non the Torro Annenziata/Pompoii road.\n16th. 357 heavy, medium and light hombers\nattacked communications in the Naples and Solorno\naroas. Liborators dropped 74 tuns on a supply tump\nand road junctions at Potenza.\nRegraded Unclassified\n185\nNOT TO BE RETRANSMITTED\nCOPY NO. 13\nBRITISH MOST SECRET\nU.S. SECRET\nOPTEL NO, 311\nFollowing is supplementary resume of\nOperational events covering the period 11th to 18th\nSeptember, 1943.\n1.\nNAVAL\nTIRPITZ and SCHARNHORST are back in Altenfjord.\nMediterranean. Five Italian battleships,\neight cruisers, eight destroyers, twenty submarines and\nat least forty smaller craft are now in Allied hands.\nOne old battleship refitting, one Littorio Class under\nconstruction, two damaged Cruisers, 24 destroyers, 35\ntorpedo boats and about 40 to 45 submarines are under\nGerman control or unaccounted for. H.M. and U.S. Commsers\nand Destroyers, augmented on 15th and 16th by 2 of H.M.\nBattleships. Have maintained constant bonbardment of\nenemy positions in Salerno Area. Initial landings took\nplace in good weather but ships' movements were hampered by\nmines. Naval Seafires gave Fighter cover from H.M.\nAircraft Carriers for four days until they could use an\nairfield ashore.\nOn 14th naval barrage was used to break up\nenemy tank attacks. H.M. Cruisers also brought reinforcements\nfrom Tripoli to Battle Area. French Destroyers and a\nsubmarine have landed troops at Ajaccio. Brindisi, Bari,\nCotrone and Capri are in Allied hands. H.M. Submarines\nhave sunk two small Merchantmen, hit 7,000 ton tanker with\ntorpedo and bonbarded Samos. Allied Forces have landed on\nKos, Leros and Sanos, Allied Naval casualties have been\nlight.\nSUBMARINE WARFARE\nSummary of anti-submarine attacks in September\nreported to noon fifteenth.\nNumber of attacks by shore-\nbased aircraft nineteen, by carrier-borne aircraft one, by\nWarships fourteen. Sunk and probably sunk by aircraft 2,\npossibly sunk by Warships 2. Probably damaged by aircraft 1,\nPossibly damaged by aircraft 1, by Warships 3.\nShipping Casualties.\nIn September to date\nno Merchant ship is known to have been sunk in any theatre\nby U-boat, Week ending 12th six Ocean convoys arrived\ndestinations without loss. From 11th to 17th inclusive four-\nSECRETARY OF OFFICE TREASURY\n1943 SEP 23 AM 8 54\nTREASURY DEPARTMENT\nRegraded Unclassified\n186\n-2-\nknown casualties all by aircraft. British ship in tow West\nof Portugal bombed and sunk, British Hospital Ship bombed\noff Falerno sank two days later, one U.S. ship bembed and\nsunk a nd one damaged in Itelian Operations.\nTrade.\nImports in convoy into United Kingdom week\nending\n11th.\n1,396,000 tons including 699,000 oil,\n2.\nMILITARY\nItaly, Salerno,\nFour German Divisions now identi-\nfied by Fifth Army, two of which believed not repeat not\nfully engaged, Air reconnaissance suggests elements of a\nDivision from Rome Area moving South. In addition Division\nwhich has been acting as rearguard in Calabria now likely to\nbe available although advance of Eighth Army will increasingly\ncomplicate enemy's position on his left Flank,\nSummary of Operations.\nOn 11th Port of Salerno opened and A/A defences\ninstalled. Enemy by this time realised importance our attack\nand had concentrated his Forces. Object to cut bridgehead\nin half.\n12th heavy enemy counter attacks launched which cen-\ntinued throughout following day. Situation became critical\nforcing British to withdraw from Battipaglia.\n13th considerable penetration on 2-mile front made\nalong line River Sele, U.S. troops withdrew from Altavilla\nand Albanella.\n14th reinforcements including armour continued to\narrive by sea and air. German attempt to break through held.\n15th our positions consolidated and very dangerous\nmoment passed,\n16th Several counter attacks repulsed. and on 17th\nposition continued to improve with enemy attacks again\nrepulsed, Albanella and Altavilla recaptured by R.S.\nTroops in Taranto Area. There are seven airfields in good\ncondition. Three hundred British Prisoners of War were\nrescued from a camp at Pisticci, Reinforcements have\narrived and situation here 1s satisfectory.\nGerman divisions.\nNo change in general disposition\nas between North and South Italy. Total remains eighteen,\nall offensive,\nBurma, Further reports of Japanese carrying out\nrelief in Buthidaung Area, where enemy troops suffering\nfrom dysentery.\n3.\nAIR OPERATIONS\nWestern Front, Night. 929 Sorties. 18 aircraft\nmissing. Very Successful attack on Dunlop factory, Montlucon\n12 out of 26 major buildings destroyed and remainder damaged.\nModane Railway centre attacked with objective interrupting\ncemmunications between Germany and Italy via France. Antheor,\nRailway viaduct attacked with same object. Day. Fortresses -\nHispanne Suiza successful three of main workshops destroyed\nbombed factories in Paris Area with following results\nCaudron-Renault very successful every building hit, Renault\nat Billancourt heavy damage. Citroen damaged. Fortress\nattacks Nantes docks very successful, one destroyer sunk\nand much on damage caused. In R.A.F. attacks one 3,000 ton\nship torpedoed off Norway, three 1,000 ton ships damaged\nRegraded Unclassified\n187\n(3)\ndamaged off France and Helland and several small craft\ndamaged off Dutch Islands.\nMediterranean Area.\nItaly. Allied heavy, medium, light\nand Fighter bombers maintained heavy scale attacks in support\nof our troops. Bomber Sorties totalled 720 in one day alone,\nEnemy positions and communications round Area Salerno\nBridgehead were repeatedly attacked. In one day 741 Fighter\nSorties were flown over Salerno Beaches where they encountered\ntotal 120 enemy Fighters and Fighter bombers. A 2,000 ton\nenemy ship was torpedoed off Leghorn. In all these operat-\nions Allies lost 23 aircraft,\nRussia. In the Den Basin the Russian Air Force\nheavily bombed the German lines of retreat by day and night\nand damaged many troop trains and motor vehicles, German\nAirfields were attacked by day and many aircraft reported\ndestroyed on the ground, Elsewhere in the active sectors\nof the Front the Russian Air Force was chiefly engaged in\ndirect support of their ground forcès,\n4,\nExtracts from Photographic and Intelligence Reports\nof Allied A1r attacks.\nMannheim. Attacked 5th/6th. Photographs 9th show\nconsiderable damage to business and residential property\nin the most closely built-up areas of both Mannheim and\nLudwigshafen many streets between Mannheim Main Railway\nStation and river are devastated. New Industrial damage\nincludes factories making Antillery Tractors and Tank\ndompenents, chemicals, Marine Diesel Engines (Sulzer)\netc., Also Railway Repair Shops, Gas Works and Main Post\nOffice.\nHamburg. Final summing up indicates destruction on\nscale far beyond anything yet achieved in Air bomberdment.\nThere are thousands of acres in which every building in every\nstreet is ruined.\nSpecial Items. Over 77 percent of the fully built-up\nArea destroyed or damaged., all four main shipyards damaged,\nfive floating docks sunk or damaged also many ships\nincluding 12 Medium sized or Larger., in one diock every\nwarehouse for about a mile is burnt out,, 2 important power\nstations appear to have been idle every since, two other\npower stations badly damaged, two very large gasholders\nburnt out,\n5.\nHOME SECURITY\nAlthough over 20 bomb incidents reported. 15th/16th\nonly one civilian in Kent Village killed during period.\nRegraded Unclassified\n188\n1\nNOT TO BE RE-TRANSMITTED\nCOPY NO. 13\nBRITISH LOST SECRET\nU.S. SECRET\nOPTEL NO. 309\nInformation received up to 10 0.m., 19th September, 1943.\n1. NAVAL\nReconnaissance of SPEZIA 15th showed 1 Italian Cruiser, 1\nDestroyer, 1 torpedo bost and El cargo ship had been scuttled. An 8 inch\nOruiser appears to be damaged by fire, At SAVONA, 4 merchant vessels had\nbeen scuttled and at TRIESTE, 1 Tanker, 1 merchant ship and a coaster,\n17th. A Hospital Ship was ineffectively bombed off SALERNO and\non Italian Hospital Ship WCS attacked by aircraft south of COTHONE. One of\nH.L. Destroyers was damaged by near misses. Another of H.K. Dostroyers sonk\n2 cargo ships in the Southern AEGEAN on 17th.\n2. MILITARY\nITALY. To 4 p.m., 17th. 5th Army. South of SELE, the front\nremains fluid. On 16th, U.S. troops ceptured ROCCADASPIDE end on 17th, ALTA-\nVILIA. Air Reconneissenco report Allied Troops ct CONTRONE, 6 miles north of\nROCCADASPIDE. British troops have receptured BATTIPAGLIA.\n8th Army, Londing clements are moving north from LAGENEGRO\ntowards LONTESANO.\nTARANTO AREA. There was strong roaction from Gormans in small\nnight ongagoments at GIOJA and LATENZA.\nSARDINIA. Germans reported to have almost completed ovocuction\nto CORSION after attacks by 2 Itelian Divisions. Some Italion borbers have\nbeen attacking Gorman craft in the STRAIT OF BONIFACIO.\nCORSICA. Itelions and patriots have nade SOLD gains in the south.\nGREEGE. Most Italien formations have been discraed by the Gormont\nItolian Gorrison. Portison Guorillos have ceptured SUSAK end SPLIT. Italians\nADRIATIC. Gormons have seimed 'LJUBLJANA' and discried the\nhave overcome Gormon opposition in the CETINJE-KOTOR Gulf Area and word rc-\nsisting tho Germons and Croat Pro-Gornen troops ct DUBROVNIK on 14th.\n3. AIR OPERATIONS\nWESTERN FRONT. 18th. A total of 52 escorted light and mcdium\nbonbers attacked cirfields at BEAUVAIS end ST. GER and 1. ef the reilway\n1 missing. ROUEN, Typhoons damaged o 1,500 ton ship, 6 tugs, 9 cosstors - bargos\ncontros at dropping 55 tons in all. Enemy cosunlties: 1.0.1. and 15 Ours:\n\"ff the Dutch Coast. 18th/19th. Aircraft despritched: Scc-mining 45,\nCOLOGNE - 5,\n16th. Lustings drophed 30 tons on ronds and trensport 81\ndostroying 16 ITALY. vehicles. Lightnings petrolled the benehes and relotsed tons\nover the battle pron.\nAirficld und other circraft attacked communio: tions dropping : ltogothor about\n16th/17th. \"ollingtons dropped 150 tons on CISTERN../LITTORIA\n65 tons.\n78 tons were rolenace by Liberators on reflusy objectives modium\nat bonbors. PESCARIA. of 242 tons was (5 corrupt groups) circraft :nd 18 gliders 120\nAirficlds 17th, at outskirts of RO.E were bombed by he vy cod\nvery reported A total dostroyed on the ground. Lightnings and Lustongs dropped\ntons over the bottle STOC.\nRegraded Unclassified\nNITED KINGDOM TREASURY DELEGATION\nBOX 660\nBENJAMIN FRANKLIN STATION\nWASHINGTON, D.C.\nSeptember 19, 1943\nTELEPHONE EXECUTIVE 2020\n4\nSECRET\nDear Dr. White:\nThe gold and dollar figures for August 1943 are as follows:\nAug.6\nAug.13\nAug.20\nAug.27\nTotal Gold\n977\n982\n968\n972\nOfficial Dollar Balance\n444\n449\n479\n505\nTotal Gold and Dollars\n1421\n1431\n1447\n1477\nScattered Gold\n232\n237\n235\n234\nGold Reserve against\n1: ediate liabilities\n10\n10\n10\n10\nAVAILABLE GOLD AND DOLLARS\n1179\n1184\n1202\n1233\nYours sincerely,\nA.T.K.\nA.T.K.R.V.\nA.T.K. Grant.\nDr\nWhite,\nint to the Secretary,\ned States Treasury,\nshington, D. C.\nRegraded Unclassified\n130\nSeptember 20, 1943\n9:40 a.m.\nHMJr:\nIs -- What's new, Herbert?\nHerbert\nGaston:\nWell, I haven't heard anything new. The -- the group\nis here. It's Dan and Randolph Paul and John Sullivan\nand Harry White, Norman Thompson and George Haas and\nTed Gamble.\nHMJr:\nWell, you might tell Fred Smith that he might get in\ntouch with Colonel Sexton in General Marshall's\noffice.\nG:\nTo get in touch with Colonel Sexton in General\nMarshall's office?\nHMJr:\nWhen he gets in\nG:\nYes.\nHMJr:\nand ask him if there's any new directives other\nthan the last one that General Marshall gave me in\nregard to Colonel -- General Eisenhower's suggestion\nas to what we should say in regard to Italy\nG:\nUh huh.\nHMJr:\nand that I'm thinking -- I don't know whether I'll\ndo it -- of talking to the Italian population in New\nYork on Thursday\nG:\nYeah.\nHMJr:\nand have they got anything over there other than\nwhat General Marshall gave me.\nG:\nUh huh.\nHMJr:\nThey had a directive from Eisenhower what they'd\nlike us to say.\nG:\nUh huh.\nHMJr:\nIt's a week old -- now, they may have something\nelse.\n0:\nUh huh.\nNow, what day are you going to talk on\nthat?\nRegraded Unclassified\n191\n- 2 -\nHMJr:\nPardon me?\nG:\nWhat?\nHMJr:\nI may go down on the Lower East Side and talk to\nthe Italians.\nG:\nOn -- -- tomorrow, Tuesday?\nHMJr:\nThursday.\nG:\nOh, Thursday.\nHMJr:\nThursday.\nG:\nYeah.\nHMJr:\nYeah.\nG:\nUh huh.\nHMJr:\nAnd Smith should contact Colonel Sexton.\nG:\nYes. Yes.\nHMJr:\nThat's about all I've got. Uh --\nG:\nRandolph Paul....\nHMJr:\nDoes Paul know anything on taxes?\nG:\nNo. He'd like to ask you about the suggestion of\nLee Pressman thathe attend that meeting of the\nSteel Workers' Executive Committee on Tuesday.\nHMJr:\nI think he should do it.\nG:\nYes. Yes. All right.\nHMJr:\nAnd I'm anxious that you gentlemen contact --\ncontinue to contact them.\nG:\nYes. Yes. We're trying to get hold of some of\nthe A.F.of L. people this morning.\nHMJr:\nGood.\nG:\nAnd....\nHMJr:\nWhat 18 -- is Paul there?\nRegraded Unclassified\n192\n- 3 -\nG:\nYes, Paul 18 here.\nHMJr:\nMay I talk to him then?\nG:\nYes.\nRandolph\nPaul:\nHello.\nHMJr:\nPaul?\nP:\nYeah.\nHMJr:\nGood morning.\nP:\nGood morning.\nHMJr:\nWhat is the temperature of Doughton and Stam?\nP:\nWell, Doughton -- Doughton is all right. of course,\nStam 1s perennially sore at us, but....\nHMJr:\nPerennially -- that's an annual isn't it?\nP:\nWell, I mean continuously and perennially.\nHMJr:\nRight. (Laughs)\nP:\nHe - - uh - but he's being quiet now and Doughton is\nvery -- of course, you know I -- We told Doughton\nthat we would be glad to get the hear -- start the\nhearings in the month of September\nHMJr:\nYeah.\nP:\nsince he was so pressing about it....\nHMJr:\nYeah.\nP:\nand he seemed to feel very friendly about that.\nHMJr:\nVery what?\nP:\nVery pleased that we were.\nHMJr:\nOh.\nP:\nAnd he's planning on sometime next week\nRegraded Unclassified\n193\n4\nHMJr:\nWell, listen, fellow, about the only day I'm going\nto be in town next week, when I won't be out speaking,\nI think, will be Monday.\nP:\nWell, of course, it has to be fitted in with Stam.\nWe'd be ready to go Monday, but Stam may get in a --\na postponement, but I don't care if you put it off\non account of Stam.\nHMJr:\nI haven't seen the columniste and all the other s.c.b.'s.\nP:\n(Laughs)\nHMJr:\nBut I haven't -- what I saw -- I haven't seen any\nunfavorable comment on postponing it.\nP:\nWell, there was an editorial in the Times that was a\nlittle critical, but\nHMJr:\nOh, what the hell!\nP:\nbut they'd be anyway.\nHMJr:\nOn the other hand, I've seen plenty of editorials\nabout Doughton's crack that he couldn't make out his\nincome taxes.\nP:\nYeah. He's very sore that that got out.\nHMJr:\nBut he doesn't blame us, I hope.\nP:\nNo, not at all. He's feeling very good toward us.\nHMJr:\nIf we'd -- every day that we can gain, we can make\nsome friends for my plan.\nP:\nYeah.\nHMJr:\nAnd\nP:\nBut on the other hand, we've got to maneuver so that\nStam asks for the time and not us.\nHMJr:\nI agree with you. You're good at that.\nP:\n(Laughs) Well, did you - you want us to go to\nPittsburgh -- you want me to go to Pittsburgh to\nsee this convention?\nRegraded Unclassified\n134\n- 5 -\nHMJr:\nOh, I think it's very important.\nP:\nAll right. Well, we'll -- we couldn't get any of\nthe labor people except Pressman Saturday. We're\nafter the A.F.of L. people but they're awful hard\nto stir up.\nHMJr:\nYeah.\nP:\nHowever, they have issued a -- they have issued a\nresolution in favor of Social Security.\nHMJr:\nI think it will be swell for you to go to Pittsburgh.\nP:\nWell, I'll go tonight then.\nHMJr:\nAll right.\nP:\nAnd we're writing your statement now.\nHMJr:\nGood. Well, uh -- I\nP:\nI'd like to get ahold of your speaking schedule.\nI guess somebody here has that, hasn't he?\nHMJr:\nWell, the only set speech that I have 1s for\nThursday, all day, in New York.\nP:\nThis coming Thursday?\nHMJr:\nThis week. And I'm supposed to be somewhere on the\n27th, either in New Orleans or Houston or someplace.\nGamble would know.\nP:\nWell, the 27th is Monday.\nHMJr:\nIs Gamble there?\nP:\nYeah. Just a minute. He says that you are tentatively\nset for New Orleans on the 27th.\nHMJr:\nWell.\nP:\nSo, that would mean that you'd rather have it the\n28th or 29th.\nHMJr:\nI didn't know the 27th was on Monday. I'll be down\nthis afternoon and Gamble and Smith and Gaston and I\nwill set our speaking date, you see?\nRegraded Unclassified\n195\n- 6 -\nP:\nYeah, well we have to fit this other thing into that,\nyou know.\nHMJr:\nWell, I think I'm pretty well committed for the 27th.\nP:\nWell, that will be all right. We can get it to a\nday -- some other day right near there, but Doughton\nis very anxious to get it -- to start them in the\nmonth of September. It's like a Macy bargain -- a\n$1.99.\nHMJr:\nYeah. At least it isn't one of those Ruml bargains\nP:\n(Laughs) Yeah, that was an unfortunate reference\nI'm afraid. It always stirs you up. (Laughs)\nHMJr:\nin the basement.\nP:\nOr anything will get you fighting mad....\nHMJr:\nYou can't get me fighting mad. I'm too low this\nmorning.\nP:\n(Laughs) Any -- do you want to speak to anybody\nelse here?\nHMJr:\nI'd like to talk to Gamble a minute.\nP:\nGaston wants to speak to you again, too.\nHMJr:\nAll right.\nP:\nHere's Gaston. (Aside: Gamble, he wants to talk to\nyou.)\nHerbert\nGaston:\nWe might do something on the newspaper front. I\nnoticed that Kiplinger's tax letter this morning\nsays that there is discussion in some quarters\nof trying to combine increased Social Security\ntaxes with the income tax schedules\nHMJr:\nYeah.\nG:\nSo it's out in that way.\nHMJr:\nYeah.\nRegraded Unclassified\n196\n- 7 -\nG:\nAnd maybe we could feed it a little bit.\nHMJr:\nWell, I'll leave that to you and Smith.\nG:\nAll right, I'll talk it over with Smith.\nHMJr:\nI'll leave it to the two of you.\nG:\nOkay, here's Ted.\nHMJr:\nAll right.\nTed\nGamble:\nGood morning.\nHMJr:\nHello, Ted.\nG:\nHow are you, sir.\nHMJr:\nPretty good. Three speeches in a week has kind of\ngot me.\nG:\nWell, it's all the preparation and all the moving\naround more than the speeches, I think.\nHMJr:\nWell, what -- my pilot says I have to leave here\nat two.\nG:\nYes.\nHMJr:\nSo I thought when I got down there, you and Fred\nand I could settle that New York schedule.\nG:\nFine. Well, we sent those people up this morning.\nHMJr:\nYes.\nG:\nWe have three of them up there\nHMJr:\nGood.\nG:\ngetting all that information.\nHMJr:\nGood.\nG:\nSo we'll be available when you get in.\nHMJr:\nIf they say anything to you, \"When is Morgenthau ?\"\n:\nyou can tell them by five o clock tonight you'll know.\nRegraded Unclassified\n197\n- 8 -\nG:\nFine. Fine. Well, that's time enough.\nHMJr:\nAnd I think that that will be good.\nG:\nFine. Well, I'll give you a report on New Orleans\nthen, too, and you can settle the whole thing.\nHMJr:\nRight.\nG:\nAll right, sir.\nHMJr:\nAnd that's about all I've got.\nG:\nFine.\nHMJr:\nExcept that I think that if the gang hasn't seen it --\nthat's Burgess' statement in this morning's paper on\ncom -- against compulsory savings is a very powerful\nstatement.\nG:\nYes. Well, I'll see that they -- that it's circulated.\nHMJr:\nYeah.\nG:\nAll right, sir.\nHMJr:\nOkay.\nG:\nFine. Bye.\nRegraded Unclassified\n198\n9/19/43\nStatement by W. Randolph Burgess\nIn 8. recent report, Mr. Burgess stated he was\ninsuvertently quoted as saying that the average New Yorker\nwas falling down on buying bonds, and that unless individual\npurchases increased, the alternative might be a change from\nvoluntary to involuntary methods of reaching war swollen\nincomes. I should like to clarify these two points.\nIn the first place, individual buyers are not falling\ndown on the job. The figures for individual purchases\nare naturally smaller at this stage in the campaign then\nthe figures for life insurance companies, savings banks,\nand corporations, which have large sums available to invest\nimmediately. On the other hand, the campaign of individual\nbuying has only just well started. There is always 8. lag\nin putting through and recording the huge volume of small\nbona purchases; so that the reported figures are several\ndays behind the actual buying. Individuals are now making\npledges both through payroll savings and house-to-house\ncanvasses which will appear in the figures later. The\ncampaign to reach individuals is getting 8. magnificent start.\nRegraded Unclassified\n199\n- 2 -\nIt will need all the energy and vigor that we have; but\nthe results so far are encouraging.\nThe argumentation about compulsory savings is the\nold fallacy that there is some substitute in this country\nfor voluntary effort and initiative. Compulsory savings\nin England and Canada and elsewhere has never produced\nsubstantial amounts of money, and it can not. Such a\nprogram, like any tax program, applies inflexibly to every-\nbody, and there are a large group of citizens who are\ndoing everything they can. The great virtue of voluntary\nsubscriptions is our flexibility. Each subscribes accord-\ning to his ability. We are raising virtually larger sums\nthan any program of compulsory savings would bring in,\nanddoing it in the democratic way. Now it is up to all of\nus to prove this American method by reaching every possible\nindividual buyer of bonds.\nRegraded Unclassified\n200\nSeptember 20, 1943\n4:35 p.m.\nTHIRD WAR LOAN DRIVE\nPresent: Mr. Bell\nMr. Gaston\nMr. Smith\nMr. Gamble\nMrs. Klotz\nH.M.JR: This is what I would like to talk with\nyou people about: I don't know which States, and so\nforth, but you have it in mind, I am sure. You fellows\nknow. I really had a wonderful time in St. Louis.\nI thought of the farmers. I listened this morning\nto the WOR six to seven program, and they were very good.\nThey announced that the Farm Credit Bank at Springfield\nhad some kind of a competition for farmers which they\nwould announce in more detail tomorrow. But I got to\nthinking about the farmer; we haven't talked of the\nfarmer. That is what I thought about.\nOn the other hand, I don't know how many gripes\nthe farmers have and how bitter they feel. That will\nhe maybe all the more reason to do something. I don't\nagree with Fred. I think I have got to go to New York.\nI will tell you why: After all, in the first place,\nNew York represents forty percent of our money, doesn't it?\nMR. GAMBLE: About thirty-three and 8 third.\nH.M.JR: Burgess stood by me when no other finance\nman would.\nMR. SMITH: I didn't say you shouldn't go to New\nYork. I said you could go as well to New York next week\nBE you could this week, that you weren't going to achieve\nRegraded Unclassified\n201\n- 2 -\nanything by the week's advance in time, particularly, and\nyou can't - if you are going to do anything for farmers,\nyou have to do it for farmers this week in order to get\nany good out of it. If you wait until next week, the drive\nwill be over by the time the farmers are contacted, by\nthe time they know anything has happened. That is all.\nH.M.JR: What do you think?\nMR. GAMBLE: I think that the best fellow to answer\nthat is Burgess, if he is not too far along in his plans.\nI wouldn't want to disappoint him. I agree with you. If\nit is going to be embarrassing to them, of course, to\npostpone it a week, I wouldn't postpone it. Otherwise, I\nagree with Fred.\nH.M.JR: I can go on the noon hour on the radio here\nfrom Washington.\nMR. SMITH: Yes, you can, you can do that. You could\ndo it from New York or any place else.\nMR. GAMBLE: On Saturday we had the Farm and Home\nHour.\nH.M.JR: How are the farmers doing?\nMR. GAMBLE: The farmers seem to be doing very well.\nThe State leading the E bond sales is Iowa. They are\nshead of any other State in E bonds. We contacted every\nprogram director of the United States, and they are making\nspecial appeals.\nH.M.JR: What do you mean?\nMR. GAMBLE: Farm program directors. They have these\nearly morning hours on the radio.\nH.M.JR: I heard WOR, which is Mutual; then the end\nof WEAF, and they both did the farm stuff. They both have\nagricultural hours.\nRegraded Unclassified\n202\n- 3 -\nMR. GAMBLE: All we heard from agreed to ao it.\nThey are making special appeals.\nH.M.JR: Let me ask Burgess.\nAdmiral King is coming here at eight-thirty tomorrow\nmorning - I am switching, but it is all on the same thing.\nI asked to go to him, and he very kindly offered to come\nhere. I want to say to him, \"Admiral, what is it that I\ncan do through the bond drive on the home front which\nwould help you?\" and get him to think. I don't know\nwhat he is going to say, but I am going to listen.\nI certainly got good ideas from Marshall. I am human\nenough, but I can't help but be pleased that through that,\nthe way the boys helped me write it--\nMR. GAMBLE: It made an impression.\nH.M.JR: The President followed right along. There\nis no question about it. I think this thing about the\nNavy being 80 big and all that - it is just braggadocio.\nIt is stupid to say how big we are.\nHe might say, \"I would like you to go - we are falling\nbehind on destroyers, and I would like you to go to a\ndestroyer yard,' or, \"We are falling behind on battleships.\nI would like you to go to 8 battleship yard. That is why\nI want to hold up on the thing with Maritime.\nMR. GAMBLE: That is tentatively scheduled for Delta\nShipyards at New Orleans.\nto do something on it, see, I want to do that which would\nH.M.JR: That is why I want to hold up. If I am going\nbe most pleasing to Admiral King.\nMR. GAMBLE: He has 8 lot more information like\nGeneral Marshall that hasn't been given out.\nmorning. Nobody but Eleanor Roosevelt could do what\nH.M.JR: I just don't know. He will be here tomorrow\nRegraded Unclassified\n203\n- 4 -\nBurgess plans for me that day and live the next day.\n(Laughter) I mean, nobody but 8. Roosevelt could do\nthat.\nMR. GAMBLE: Of course you really do those things.\nYou always say you aren't going to do them. Then you get\nin & town and you go through that same schedule. You\nwent to Cedar Rapids, and you made more calls than that.\nYou went to Portland - I told you you didn't have to do\nany of those things, and you do them all. (Laughter)\nMR. BELL: He doesn't want to be scheduled. (Laughter)\nMR. GAMBLE: You end up doing them all. (Laughter)\n(The Secretary held a telephone conversation with Mr.\nBurgess, as follows:)\nRegraded Unclassified\n204\nSeptember 20, 1943\n4:45 p.m.\nRandolph\nBurgess:\nHello, Henry.\nHMJr:\nHow are you?\nB:\nI'm pretty well. How are you?\nHMJr:\nWell, I'm fine. You fellows are going great guns\nup there.\nB:\nWell, we're trying hard.\nHMJr:\nWell\nB:\nI think it's going pretty well.\nHMJr:\nLooks good to me -- a man in the street.\nB:\nWell, the -- the problem is the individual sales.\nOf course, that's still the problem and.\nHMJr:\nYeah.\nB:\nthe danger 18 that when we get over our quota\nwhich we're going to do in a few days -- 18 that\nthere should be a let down and we're doing everything\nWe can to have a program which will keep it going.\nHMJr:\nRight.\nB:\nAnd I thought your being here Thursday, if you will,\nwould be an enormous help on just that.\nHMJr:\nWell, what I'm calling up on, before I get on that,\nI also loved your talk on \"compulsory savings\".\nB:\nGood. I thought you might like that.\nHMJr:\nYeah.\nB:\nWell, the boys -- the boys misquoted me on Saturday\nand had me arguing that if this didn't succeed, we'd\nhave to go to compulsory savings.\nHMJr:\nOh. I didn' t\nB:\nI couldn't let that stand on the record.\nRegraded Unclassified\n205\n- 2 -\nHMJr:\nI didn't see that. Well, hit it again.\nB:\nAll right. We will.\nHMJr:\nWhat I'm talking about 10-- -- how important would --\n18 it to you -- I'm coming but I want to know whether\nit's this week or next week.\nB:\nOh, well, I think this is the week to do it, Henry\nHMJr:\nYou do?\nB:\nif you possibly can.\nHMJr:\nI see.\nB:\nWe're getting pretty well all set for it.\nHMJr:\nUh huh.\nB:\nAnd this is about the right time to give it a kick.\nHMJr:\nUh huh.\nB:\nNext week would be a little late.\nHMJr:\nIt would be.\nB:\nWe've got a parade on next Tuesday\nHMJr:\nYeah.\nB:\nwhich I think will give us our next week's kick.\nHMJr:\nYeah. I see.\nB:\nSo, if you could do it this week, it would be a great\nhelp.\nHMJr:\nWell, we're just sitting here now -- there's Bell and\nGamble and Fred Smith and Gaston and myself and we'll\nsettle it in the next fifteen minutes.\nB:\nThat's fine. I hope you're feeling good and strong\nbecause we want you to see the works.\nHMJr:\nNobody but a Roosevelt -- Mr. or Mrs. Roosevelt could\ndo what you plan for me Thursday and live.\nRegraded Unclassified\n206\n- 3 -\nB:\nNo, it will be very nice and easy. We'll just put\nyou in a comfortable car and whisk you around.\nHMJr:\nYeah.\nB:\nI did it the other night. I went around and saw\nall of our\nHMJr:\nWell, you're a young fellow.\nB:\nzone outfit.\nHMJr:\nYou're young\nB:\nThe younger boys started this.\nHMJr:\nYou're just a young fellow.\nB:\n(Laughs)\nHMJr:\nWell, when we get through, Ted will give you a call.\nB:\nVery good.\nHMJr:\nIt will be within the next half hour.\nB:\nThank you very much, Henry.\nHMJr:\nWell, thanks for wanting me.\nB:\nAll right. Well, we're delighted that you can come.\nHMJr:\nAll right.\nB:\nAll right.\nRegraded Unclassified\n207\n- 5 -\nH.M. JR: Now, I owe that fellow - it is the first\nthing he has asked me, Fred; I mean, I owe that man a lot.\nMR. SMITH: That is true. I grant you that. Of course\nyou could. - it would be pushing your schedule up a little\nbit, but you could go on the Farm and Home Hour from your\nfarm on Saturday.\nH.M.JR: Well, let's settle Thursday now - what I\nam going to do - shall we? Then we will do the other.\nMR. GAMBLE: Fine. Here is what they would like\nyou to do. They would like you in the morning to visit\nthree offices, Queens, Brooklyn and the Bronx. That is\ncutting it down. Then they would like to add to that,\neither in the morning or afternoon, a visit - preferably\nin the morning so you would have your afternoon free - to\nthe Italian settlement - some Italian community where\nthey have a War Bond office and are working - not one\nof Generalissimo Pope's. (Laughter)\nThen they would like you to have lunch at the Federal\nReserve Bank, not a formal or publicized affair, but 8.\nsmall luncheon including Allan Sproul and his Board of\nDirectors, W.C. Potter, and two or three of the leading\nbankers that have helped Burgess. They would like the\nStock Exchange - I think we can waive that so that you\nhave the whole afternoon free.\nThen you can meet with the War Finance Committee of\nNew York at five or six, before your broadcast, and go on\nat six-thirty on the CBS network, and do this show with\nthis group of people.\nH.M.JR: Just 8. minute - I am personally not crazy\nto do the New York Stock Exchange.\nMR. GAMBLE: Of all the things that they had planned -\nI talked to Burgess this morning about the possibility of\nscratching that off. I don't think he would be too much\ndisappointed if we didn't.\nRegraded Unclassified\n208\n- 6 -\nMR. BELL: What does that mean?\nMR. GAMBLE: They want to have a bond rally at the\nStock Exchange - shut down the Exchange and have this\nrally coincidental with the Secretary's visit there.\nEmil Schram is going to have all the Stock Exchange mem-\nbers and have a bond sale - close the Exchange.\nMR. BELL: Take very long? He has been very\ncooperative.\nMR. GAMBLE: I should say half an hour.\nH.M.JR: Some of them did a whale of a job. It\nhas to be at three, that is the only trouble.\nMR. GAMBLE: Yes.\nH.M.JR: They won't shut it down--\nMR. GAMBLE: Just ahead of the closing.\nMR. BELL: That would be right after your luncheon\nat the Federal.\nH.M.JR: Yes, but I have got to get a little rest.\nWell, the only thing - if I am to do the New York Stock\nExchange - I would want lunch at twelve o'clock and I\nknow that they have rooms there where I could go and rest\nafterwards.\nMR. BELL: That is right, they have good beds. They\nhave beds in the Federal Reserve Bank.\nH.M.JR: Right in Sproul's room, too.\nYou fellows are invited here not for your decorative\nqualities-- (Laughter)\nMR. GASTON: I think there is no objection to the\nStock Exchange. I think it has some advantages, but it\nis a question of your endurance - whether you can fit it\nin or not.\nRegraded Unclassified\n209\n- 7 -\n(Mrs. Klotz entered the conference.)\nH.M.JR: I don't mind going to the New York Stock\nExchange. I think it would be rather amusing.\nMR. GAMBLE: I think, as a matter of fact, .Secretary,\nit is & tribute to you and to the manner in which this\nwhole program has been smoothed out, for these people to\nenthusiastically want you to come. They have had great\ninterest.\nH.M.JR: Sproul has got to send me an invitation if\nI am going to go. I can't do it through Burgess.\nMR. GAMBLE: He will invite you.\nH.M.JR: I was saying, if I could go to the Federal\nReserve at twelve for lunch - they have regular rooms\nthere - I can have about an hour's rest.\nAre you opposed to the Stock Exchange?\nMR. SMITH: I am not opposed to it. I think that\nyou got a good chance - you have got to recognize the\npossibility that this whole business of Morgenthau versus\nthe bankers may crop out again, If you go to New York\nand wind up going both to the Federal Reserve luncheon -\nwhich they say is not 8. publicized event, but I don't\nbelieve it - I think that the columnists, Leslie Goulds,\naregoing to know about it - and the Stock Exchange--\nH.M.JR: If they invite me, why isn't it on the plus\nside?\nMR. SMITH: The only thing is that you have said\nit is going to be very difficult to raise the last five\nbillion dollars and you are giving the columnists an\nopportunity to point out that the bankers raised at least\nthirty percent of all your money - the bankers in New\nYork. And if they do do that - if the columnists do\nbreak that all up again and have you tipping your hat to\nthe Federal Reserve Bank and the bankers, you are going\nRegraded Unclassified\n210\n- 8 -\nto have D'Olier and all the outlying bankers in the\ncountry who don't like Wall Street getting the impression\nyou are paying tribute to Wall Street bankers for what\nthey have done, aren't you?\nH.M.JR: That is one way to look at it.\nMR. SMITH: The wrong way, I grant you. I say that\nis the liability.\nH.M.JR: I tell you how we could offset that. What-\never the radio program is, let's make it a strictly\npeople's program. I don't know what the program is.\nI tell you how I feel - very human. I never go to these\nfinancial writers' dinners. The only dinner I have gone\nto in ten years - one was 8. farewell dinner to George\nHarrison and I once had lunch at the Federal Reserve. That\nis twice in ten years that I have been there.\nNow, these fellows have gone to town and I think it\nis the generous thing to do.\nMR. GAMBLE: I think you can afford to be magnanimous\nabout it.\nH.M. JR: I think it is the generous thing for me to\nsay thank you. Sproul certainly knows I am coming and I\ncan say, \"As far as I am concerned, look, I don't care\nwho I eat with.\"\nMR. GASTON: The point of view of the whole thing is\nthat bankers and stockbrokers, they, too, are citizens.\nH.M.JR: You know, that was what Sproul wrote me\nafter this meeting. He said, \"Bankers, and so forth, also\nsend their sons to war.\" That is in his letter to me.\nThat was the thing he wrote to me. \"We also send our\nsons to war\" - that is exactly what he wrote to me -\n\"We also send our sons to war.\"\nNow, I tell you, Fred, you see, you are a cynical\nRegraded Unclassified\n211\n- 9 -\nfellow that has been burnt up in New York - and so have\nI. But I rather kind of like to go in the lion's den.\nI like to be David.\nMR. SMITH: I won't oppose it.\nH.M.JR: You cancarry on the - what do you call it -\nthe comparison of David - the analogy of David. As far\nas I am concerned, I would rather like to be David up\nthere.\nMR. BELL: I think you will get good treatment and\nbe glad you went.\nMR. GAMBLE: I certainly have seen no evidence but\nthat these people have done 8. good job.\nH.M.JR: Do you suppose they are going to say, \"Why\ntweive o'clock?\"\nMR. GAMBLE: No. As a matter of fact, I suspect\nthat is their lunch hour.\nMR. BELL: One o'clock is the lunch hour for the Fed.\nH.M.JR: Let's say twelve o'clock.\nMRS. KLOTZ: Why do you want to eat at twelve o'clock?\nH.M.JR: So I can be at the Stock Exchange at three.\nMR. GAMBLE: This way you will know you can leave\nyour luncheon and have your rest.\nMR. GASTON: Being one of the Quiz Kids, I want to\ncall your attention to the fact that it was Daniel and not\nDavid that went into the lion's den. (Laughter)\nH.M.JR: Again I felt on shaky ground, but I knew\nin front of these people, somebody would correct me.\n(Laughter) It was Daniel. It was David who threw the\nsling shot.\nRegraded Unclassified\n212\n- 10 -\nWe will do that, then at three o'clock the Stock\nExchange. Then when is my next appearance?\nMr. GAMBLE: At five o'clock.\nH.M.JR: Where?\nMR. GAMBLE: At five o'clock with the New York War\nFinance Committee, in their office.\nH.M.JR: Just \"Hello\"?\nMR. GAMBLE: That is right.\nH.M.JR: And then what?\nMR. GAMBLE: Then Burgess has invited you to have a\nquiet dinner with him at his apartment. This is not an\narranged thing, Mr. Secretary. He said he would like to\nhave you do it so you could be away from the crowd.\nH.M.JR: I think, as far as I know, Mrs. Morgenthau\nis going to be up there and if she is, then I will have a\nquiet dinner with her. I have asked her to go on this\nthing. She will if she is well. We are terribly worried\nabout her legs. She doesn't know whether she will or\nwon't be--\nMR. GAMBLE: That can be left open. I want you to\nknow we discussed what you were going to do about dinner.\nAt six-thirty, before dinner, you will be on the CBS net-\nwork - six-thirty to six-forty-five.\nH.M.JR: What do I do at six-forty-five?\nMit. GAMBLE: Six-thirty, that is your radio program.\nMR. GASTON: A fourteen-minute speech?\nMR. GAMBLE: Following the original suggestion that\nwas made, we have discussed only the possibility of the\nSecretary visiting with these people on the air - a round-\nor four minutes to make & statement about what he saw in\ntable affair, with the Secretary taking the last three\nNew York.\nMR. GASTON: That is better than an actual town meeting.\nRegraded Unclassified\n213\n- 11 -\nMR. GAMBLE: I think, Fred, you will want to go up\nto New York and sit down with the CBS people.\nH.M.JR: No, these fellows have got to stay here\nwith me tomorrow. We have to write a speech tomorrow.\nWhen I leave here Wednesday afternoon to go up to\nNew York, I am going to the theater, taking Mrs. Morgenthau\nand my father to the theater. We are going to see\n\"Oklahoma.\" Incidentally, if we go to lunch with the\nFed, I would like my father invited.\nI leave here Wednesday, and that speech has got to\nbe finished, and none of this nonsense business. (Laughter)\nMRS. KLOTZ: Mr. Morgenthau, I don't see how you can\nhave the luncheon at twelve.\nH.M.JR: I think Mrs. Klotz is right. Let's tell\nthem to get me - I want to be at the Fed one hour before\nlunch. She is right. I can get there one hour before-\nhand and rest an hour before lunch.\nNow, I an on the air from when?\nMR. GAMBLE: Six-thirty to six-forty-five, CBS.\nH.M.JR: Doing what?\nMR. GAMBLE: The only suggestion that has ever been\nmade, which is the one we have worked on, is the idea of\nyou doing the round-table with these New York War Finance\nleaders, Burgess and four or five of his people, & discussion\nof what you have seen in New York that day, the progress\nof the campaign, and the program will end up by you making\na six or seven minute statement to the nation about your\nimpressions. You could bring in this Italian visit to\ntie in with your talk.\nH.M.JR: I suggested this: We sent three reporters\nup to New York today to get local material. They will be\nback tomorrow. Right after Admiral King at nine o'clock,\nwe go into a huddle - play conference.\nRegraded Unclassified\n214\n- 12 -\nMR. GAMBLE: That winds that up in nice shape.\nH.M.JR: Then that is all. I don't have to go to\nthe tent?\nMR. GAMBLE: No, you do not. If you decide that day\nthat you want to do something like that, that should be\nleft completely open.\nH.M.JR: He is one of the smartest fellows. (Laughter)\nMRS. KLOTZ: I agree with you.\nH.M.JR: I think it would be nice if you accompany\nme that day. It is & big thing up there. I would like\nyou to share the kudos with me.\nMR. GAMBLE: I really am needed here. I can go, but\nI really am needed here.\nH.M.JR: Let's think about it. I have 8 tight\nschedule. I am going out to the Navy Hospital. Let's\nstop now; you can work on this.\nAll right, Herbert?\nMR. GASTON: Yes.\nMR. BELL: Yes.\nH.M.JR: I am not at all certain I want to do the\nthing that way - for local color this is just to throw\nout - I would love to do the thing with a lot of refugees.\nThat is what I would like to do - the people who have come\nout of Germany recently - I would like to have them sit\naround the table. If we are going to do it, I would want\nDave Levy to run it.\nMR. GAMBLE: If you decide you don't want to do the\nshipyard thing, you could do that the following week.\nH.M.JR: Let me throw that out. If Dave Levy and\nhis gang would help us on that--\nRegraded Unclassified\n215\n- 13 -\nMR. SMITH: Ted wants this as a strictly war bond\nthing. I think he is right. Why not leave this just as--\nH.M.JR: I don't know if he is right or not.\nMR. GAMBLE: From our organization point of view we\nare right. Public-relations-wise we may not be.\nH.M.JR: Anyway, get the thing set. What we will do\nis, we will have 8. play conference tomorrow morning -\nyou, George, and I, and I would like Herbert to sit in on\nit, and get a report from these men.\nMR. GAMBLE: Ten o'clock would be better for that.\nFred won't have his material until ten.\nH.M.JR: All right, ten o'clock - a radio conference\nat ten o'clock. All right?\nMR. GAMBLE: Yes, sir.\nMR. BELL: A financing conference tomorrow morning?\nH.M.JR: All right, eleven o'clock, Mr. Bell.\nMR. GAMBLE: Ten billion two thirty-nine breaks down\nto thirty-three and a third of the individual quota.\nH.M.JR: You mean we have over three billion?\nMR. GAMBLE: No, individual quota is five, and we\nhave over thirty-three and a third percent in that ten,\ntwo thirty-nine.\nMR. BELL: That means some place between 8. billion\nsix and a billion seven.\nH.M.JR: That isn't very good.\nMR. GAMBLE: It is pretty good for this stage.\nMR. BELL: Better than two hundred million above the\nFriday night figure.\nRegraded Unclassified\n216\n- 14 -\nH.M.JR: You haven't the five o'clock figures?\nMR. BELL: No, they are late coming in.\nH.M.JR: Can you get them to me at the house tonight?\nI would like to have them.\nLet's stop now.\nMR. GAMBLE: Maryland went over today, 8. hundred and\nthree percent of the quota.\nMR. BELL: We have had pretty good reports from\nthese Federals.\nH.M.JR: I would like to - could you be in the office\ntomorrow morning from nine o'clock on, this office? I\nwould like to go over the situation with you and Bell, and\neither Tickton or Lindow. Let's put Tickton down for nine\no'clock. King won't be here more than a half an hour -\nGamble and Bell and Tickton and Lindow. I would like to\ngo in the Chart Room with you.\nMR. BELL: Tickton is in Chicago.\nRegraded Unclassified\n385\n217\nCOPY\nNA831 43 GOVT COLLECT NL\nTOWO BEACON NY 19\n1943 SEP 20 - 8 46\nTED GAMBLE\nOFFICE OF SECRETARY OF THE TREASURY WASHDC\nPLEASE GIVE TO MRS KLOTZ ANY IMPORTANT TELEGRAMS WITH MY\nSIGNATURE THAT WENT OUT LAST WEEK WITHOUT MY APPROVAL. REASON\nFOR THIS TELEGRAM IS THAT I SAW A MESSAGE IN LOCAL PAPER SUPPOSEDLY\nCOMING FROM ME THAT I HAVE NO KNOWLEDGE OF\nHENRY MORGENTHAU JR\nSEP 20\nRegraded Unclassified\n218\nTREASURY DEPARTMENT\nINTER OFFICE COMMUNICATION\nDATE September 20, 1943\nTO: Mrs. Klotz\nFROM: Mr. Gamble\nAt the request of the Secretary I am enclosing for you\ncopies of the messages sent out for his signature in the past week.\nTRG\nRegraded Unclassified\nWESTERN\n219\nCLASS OF SERVICE\n1201\nMBOLS\nThis is a full-rate\nLasse\nTelegram or Cable-\ngrame unless in de-\nUNION\nNL-Night Laner\nned character is In-\nLC=Deferred Cable\nand by a suitable\nymbol above or pre-\nNLT-Calle Hight Letter\ncoding the address.\nA. N. WILLIAMS\nNEWCOMB CARLTON\nJ. c. WILLEVER\nPRESIDENT\nCHAIRMAN OF THE BOARD\nFIRST E-PRESIDENT\nShip Radingram\nthe sling time shown in the date line on telegrama and day letters is STANDARD TIME at point of origin. Time of receipt in STANDARD TIME at polat of destination\nNA831 43 GOVT COLLECT NL=TDWD BEACON NY 19\nTED GAMBLE=\nIDEP 10 PM\nOFFICE OF SECRETARY OF THE TREASURY WASHDC=\nLEASE GIVE TO MRS KLOTZ ANY IMPORTANT TELEGRAMS WITH MY\nIGNATURE THAT WENT OUT LAST WEEK WITHOUT MY APPROVAL. REASON\nFOR THIS TELEGRAM 18 THAT J SAW A MESSAGE IN LOCAL PAPER\nSUPPOSEDLY COMING FROM ME THAT I HAVE NO KNOWLEDGE OF=\nHENRY MORGE NTHAU JRs\nTHE COMPANY WILL APPRECIATE SUGGESTIONS FROM rrs PATRONS CONCERNING ITS SERVICE\nRegraded Unclassified\n220\nANDARD FORM No. 14A\nTREASURY DEPARTMENT\nAPPROVED BY THE PRESIDENT\nG)**\nMARCH 10. 1926\nWASHINGTON\nCOPY\nTELEGRAM\nCHARGE TREASURY DEPARTMENT. APPROPRIATION FOR\nOFFICIAL BUSINESS-GOVERNMENT RATES\n(The appropriation from which payable must be stated on above line)\n. a. - numes -\n2-14117\nSEPT 17 1943\nMR JOHNNY THOMPSON\nRADIO STATION WTTM\n35 WEST STATE ST\nTRENTON NJ\nON BEHALF OF THE TREASURY DEPARTMENT I WANT TO CONGRATULATE THE\nB'NAI BRITH ORGANIZATION AND SPECIFICALLY THE B'NAI BRITH BODGE\nIN TRENTON FOR ITS SPLENDID COOPERATION WITH THE THIRD WAR LOAN\nDRIVE. I KNOW THAT THIS SPECIAL RADIO PROGRAM WILL HELP TO SELL\nMANY EXTRA WAR BONDS TO BACK THE ATTACK OF OUR FIGHTING MEN OVER\nTHERE\nHENRY MORGENTHAU JR\nSECRETARY OF THE TREASURY\n11\nRegraded Unclassified\n221\nANDARD FORM No. 14A\nTREASURY DEPARTMENT\nPROVED BY THE PRESIDENT\nCOPY\nWASHINGTON\nMARCH 10. 1925\nTELEGRAM\nCHARGE TREASURY DEPARTMENT, APPROPRIATION FOR\nOFFICIAL BUSINESS-GOVERNMENT RATES\n(The appropriation from which payable must be stated on above line)\n. & - - -\n3-14117\nEUGENE G GRACE\nPRESIDENT\nSEPT 17 1943\nBETHLEHEM STEEL CORP\n25 BROADWAY\nNEWYORK NY\nTHE TREASURY DEPARTMENT ASKS YOUR FULL COOPERATION AND SUPPORT IN\nTHE THIRD WAR LOAN DRIVE. WILL YOU IMMEDIATELY INSTRUCT MANAGERS\nOF ALL PLANTS OF BETHLEHEM STEEL CORPORATION TO CONTACT LOCAL\nCOUNTY CHAIRMEN OF WAR FINANCE COMMITTEE AND ARRANGE WAR BOND\nRALLIES IN ALL PLANTS AND ON COMPANY TIME TO COVER ALL SHIFTS.\nWE NEED THE SUPPORT OF EVERY AMERICAN IN THIS EMERGENCY. RALLIES\nAT THE PLACE OF EMPLOYMENT ARE THE MOST EFFECTIVE MEANS OF BRINGING\nTHE MESSAGE TO THE WORKERS IN WAR INDUSTRIES, PLEASE ADVISE ME\nIMMEDIATELY so I CAN ADVISE COUNTY CHAIRMEN\nHENRY MORGENTHAU JR\nSECRETARY OF THE TREASURY\nnAt\nRegraded Unclassified\n222\nAMERICAN BY THE PRESIDENT\nANDARD FORM NO. 14\nFROM TED R. GAMBLE\nMARCH 10. 1926\nBUREAU WAR FINANCE DIVISION\nTELEGRAM\nCHG. APPROPRIATION EXPENSES OF LOANS\nOFFICIAL BUSINESS-GOVERNMENT RATES\nTRG:ecb SEPTEMBER 17, 1943.\nALLEN T. ARCHER\na. . - - -\n10-1783\nPRESIDENT, TOWN HALL\n1321 BILTMORE HOTEL\nLOS ANGELES, CALIFORNIA\nI APPRECIATE YOUR THOUGHTFUL INVITATION TO APPEAR AT A LUNCHEON MEETING AT\nTOWN HALL. HOWEVER, I REGIST THAT I CANNOT AVAIL MYSELF OF IT, AS I NOW\nFIND THAT I WILL BE UNABLE TO COME TO LOS ANGELES DURING THE DRIVE.\nHENRY MORGENTHAU, JR.\nSECRETARY OF THE TREASURY\nMA\nRegraded Unclassified\n223\nEXPENSES OF LOANS\nWAR FINANCE DIVISION\nPLEASE SEND AS STRAIGHT WIRE TO\nNAMES ON ATTACHED LIST:\nSEPTEMBER 15, 1943\nI HEREBY OFFER YOU APPOINTMENT AS A MEMBER OF THE STATE ADVISORY\nCOMMITTEE FOR THE WASHINGTON WAR FINANCE COMMITTEE. I BELIEVE\nYOUR ASSISTANCE WILL BE MOST HELPFUL IN MAKING OUR WAR FINANCING\nIN YOUR AREA EFFECTIVE. WILL YOU PLEASE SIGNIFY YOUR ACCEPTANCE\nTO ME. JOEL E. FERRIS, 901 FEDERAL OFFICE BUILDING, SEATTLE.\nHENRY MORTENTHAU, JR.\nSECRETARY OF THE TREAURY\nRegraded Unclassified\n224\nTREASURY DEPARTMENT\nWAR FINANCE DIVISION\nEXPENSES OF LOANS\nSEPTEMBER 14, 1943.\nJOHN A LOGAN\nNATIONAL ASSOCIATION OF FOOD CHAINS\nDRAKE HOTKL\nCHICAGO, ILLINOIS\nON THE OCCASION OF THE TENTH ANNUAL MEETING OF NATIONAL\nASSOCIATION OF FOOD CHAINS I WISH TO CONGRATULATE THESE\nCHAIN FOOD STORE COMPANIES UPON THEIR RECORD OF COOPERATION\nAND ACHIEVEMENT IN THE SALE OF WAR BONDS AND STAMPS. I AM\nFAMILIAR WITH THE PLANS WHICH THE FOOD CHAIN COMPANIES HAVE\nMADE TO PARTICIPATE IN THE THIRD WAR LOAN DRIVE AND I KNOW\nTHAT THESE EFFORTS CAN BE PRODUCTIVE OF MILLIONS OF DOLLARS\nOF EXTRA SALES OF WAR BONDS AND STAMPS TO THE TWENTY MILLION\nCUSTOMERS OF CHAIN FOOD STORES. I ALSO WANT TO THANK YOU\nAND THE MEMBERS OF YOUR STAFF FOR EXCELLENT COOPERATION\nAND EFFECTIVE COORDINATION IN PROVIDING YOUR ASSOCIATION\nMEMBERS WITH INFORMATION AND ASSISTANCE REGARDING WAR BOND\nPHOGRAMS. SUCH INTELLIGENT AND UNSKLFISH COOPERATION BY\nPATRIOTIC CITIZENS AND THEIR ORGANIZATIONS IS NEEDED TO\nINSURE THE SUCCESS OF OUR WAR FINANCING EFFORTS.\nHENRY MORGENTHAU, JR.\nSECRETARY OF THE TREASURY\n\"INITIALED - 'T.R.G.' and \"HMJR\"\nRegraded Unclassified\n225\nTREASURY DEPARTMENT\nWAR FINANCE DIVISION\nEXPENSES OF LOANS\nDAY LETTER\nSEPTEMBER 13, 1943.\nJULIUS EMSPAK\nGENERAL SECRETARY\nUNITED ELECTRICAL, RADIO AND MACHINE WORKERS UNION\nHOTEL NE. YORKER\nNEW YORK, NEW YORK.\nPLEASE ACCEPT AND EXTEND TO YOUR MEMBERS IN CONVENTION ASSEMBLED THE SINCERE THANKS OF\nTHE TREASURY DEPARTMENT FOR YOUR AID IN THE WAR FINANCE PROGRAM. OUR PAY ROLL SAVINGS\nRECORDS IN THE ELECTRICAL AND RADIO INDUSTRY ARE CONVINCING EVIDENCE OF THE PATRIOTIC\nWAY IN WHICH YOUR MEMBERS ARE BUYING WAR BONDS UNDER THE SPONSORSHIP OF YOUR UNION AND\nINS LEADERS. WE ASK YOUR INTENSIFIED SUPPORT FOR THE CRUCIALLY IMPORTANT THIRD WAR\nLOAN DRIVE NOW UNDER WAY. WE MUST BACK THE ATTACK WITH WAR BONDS IF OUR HOME FRONT IS-\nTO HELP OUR FIGHTING MEN DO THE BEST POSSIBLE JOB IN THE INVASION OF EUROPE AND JAPAN\nPLEASE ASK ALL YOUR MEMBERS TO BUY AT LEAST ONE EXTRA WAR BOND DURING SEPTEMBER.\nHENRY MORGENTHAU JR.\nSECRETARY OF THE TREASURY.\nRegraded Unclassified\n226\nTREASURY DEPARTMENT\nWAR FINANCE DIVISION\nEXPENSES OF LOANS\nDAY LETTER\nSEPTEMBER 13, 1943.\nRETD ROBINSON, ESQ.,\nINT'L. PRESIDENT, UNION OF MINE, MILL & SHELTER WORKERS, C.I.O.,\nBUTTE, MONTANA.\nPLEASE ACCEPT AND EXTEND TO YOUR MEMBERS THE SINCERE THANKS OF THE\nTREASURY DEPARTMENT FOR YOUR AID IN THE WAR FINANCE PROGRAM. WE NEED\nYOUR CONTINUED HELP BOTH BY ADDED AND INCREASED ALLOTMENTS FOR WAR BOND\nPURCHASE THROUGH THE PAYROLL SAVINGS PLAN AND ALSO BY THE PURCHASE OF\nADDITIONAL BONDS DURING THE THIRD WAR LOAN DRIVE IN SEPTEMBER. IT IS\nCRUCIALLY IMPORTANT FOR THE FUTURE OF A FREE LABOR MOVEMENT THAT WE\nSHOULD WIN THIS WAR. THE HOME FRONT MUST SUPPORT OUR FIGHTING MEN BY\nGIVING THEM THE BEST POSSIBLE WEAPONS AND EQUIPMENT. THE MOST EFFECTIVE\nWAY IN WHICH MOST OF US CAN DO THAT IS BY BACKING THE ATTACK WITH WAR\nBONDS. PLEASE URGE EACH OF YOUR MEMBERS TO BUY AT LEAST ONE EXTRA BOND\nDURING SEPTEMBER,\nHENRY MORGENTHAU, JR.\nSECRETARY OF THE TREASURY.\nRegraded Unclassified\nU.S. COAST GUARD\n227\nBOAN MIP A\nTREASURY DEPT.\n9/202\nG16 P T A QUAT 201855 Q2U GR 223 BT\nHEADING\nSECYTREAS OFFICE\nSECUTREAS\nTEXT\nKNOWING HOW BORED YOU GET ON AIRPLANES ESPECIALLY WHEN I\nAM NOT THERE WOULD LIKE TO MAKE A SUGGESTION WHICH\nWILL THROW EVERYTHING INTO A TAILSPIN X QUERY COLON WOULD\nIT BE WISER THIS WEEK TO GO TO A STRICTLY\nFARM COMMUNITY IN A FARM STATE AND APPEAL TO FARMERS (50)\nRATHER THAN GO TO NEWYORK WHICH CAN BE DONE AS\nWELL NEXT WEEK QUESTION UNDERSTAND WHEAT SEASON JUST FINISHED\nCOTTON 1555 SEASON JUST BEGINNING so THERE MUST BE MONEY X IF\nYOU WAIT UNTIL NEXT WEEK IT WILL BE PHYSICALLY IMPOSSIBLE\nTO CARRY THE WORD TO FARMERS EVERYWHERE BEFORE THE END (100)\n2\nPERATOR'S RECORD AND DATE\nOFFICIAL INITIALS\n$\nRegraded Unclassified\nU.S. COAST GUARD\n228\nREASURY DEPT.\nHEADING\nCG16 PAGE TWO\nTEXT\nOF THE DRIVE X FARMERS ARE LAGGING BEHIND IN BOND\nSALES AND YOU HAVE NOT MADE DIRECT APPEAL TO THEM\nX LICKERT TELLS ME THEIR INCOMES ARE WAY UP X\nYOU COULD PROBABLY TAKE OVER NBCS FARMA AND HOME HOUR\nSATURDAY NOON AS WELL AS A RADIO NETWORK SATURDAY EVENING (150)\nIF TIME IS AVAILABLE X SCENE OF OPERATION COULD BE\nEITHER SOUTH OR WEST OF MISSISSIPPI OKLAHOMA CITY BEING HIGHLY\nRECOMMENDED BY SECRETARY WHO USED TO WORK FOR CHAMBER\nOF COMMERCE X LICKERT SUGGESTS WESTERN END OF CORNBELT WHERE\nCROPS WILL BE BEST IN YEARS X I CAN GET (200)\nEXCITED ABOUT THIS BECAUSE IT GIVES US A WHOLE NEW\nAPPROACH X BESIDES THERE IS PLENTY 2 OF OXYGEN DOWN HERE\nX FRED SMITH BT 201855\nTOD 1857 SN 20 SEPT 43 END\nOFFICIAL INITIALS\nPERATOR'S RECORD AND DATE\n$\nRegraded Unclassified\nNV 04/2\nU.S. COAST guard\n229\nREASURY DEPT\nRW52/544Y\nPT A 02U 201909 QUAT W QUAH GR42\nHEADING\nSECTREAS\nOFFICE SECTREAS\nCOMDT CG\nTEXT\nFRED SMITH OFFICED OF SEC X I AM NEVER BORED\nWHEN I SLEEP X AS A MATTER OF FACT I\nALSO THOUGHT OF FARMERS APPLES TO YOU HOLD EVERYTHING FOR\nAN HOUR AND WHEN OUR TWO GREAT MINDS WILL SPARK\nAS ONE BT 20189 201909\n3\nTOD 1917 20 SEPT 1943 VB\nOFFICIAL INITIALS\nPERATOR'S RECORD AND DATE\n$\nRegraded Unclassified\n230\nSeptember 20, 1943.\nDear Mr. Golden:\nI was delighted to learn of the manner in which\nMiss Weston and her colleagues of the cast of \"Three's\na Family\" bettered your request that they help out\nin the Third War Loan drive. I wish you would ex-\npress my personal appreciation to them and of course\nmy warmest thanks go to you for asking their help and\napproving the turn it took, as well as for passing on\nthe suggestion to the other producers.\nIt is a little early for congratulations on the\nresult of the drive but it is encouraging to receive\nthem from you. We must make the campaign a success\nand we are grateful for all the fine cooperation we\nare getting.\nSincerely,\n(Signed) H. Mergenthau, Jr.\nSecretary of the Treasury.\nMr. John Golden\nSaint James Theatre\n246 West 44th Street\nNew York 18, N. Y.\nRegraded Unclassified\nIn the Scretamp Signature 231\ndate sent 20\nDear Mr. Golden:\nthe Manner in which miss\nI was delighted to learn 7\nWrston and her cilleague 7 the\nCael f \"Thre's a Family\"\nbettered you request that they\nhelp out in The There has Loan\ndrive. I with you would\nexhices my husmal appreciation\nto them and of cause my\nWäimert Thanks 80 to you fn\nasking Their help and approving\nThe turn it Took, as well as pin\npassing on The suggestion to the\nother producers,\nIt is a little early for confeatulation\nin the result of the drive het\nit is encouraging to receive The cambaign them hm\nyou We must make X a Ruccess\nand in are scateped m all the five\nCorrecation we are getting which\nRegraded Unclassified\nOffices of\n212\nJOHN GOLDEN, Inc.\nSAINT JAMES THEATRE\n246 WEST 44TH STREET\nBRYANT 9-6994\nNew York 18, N. Y.\nSeptember 13, 1943\nZon. denty orgenthau\nsecretary of the Treasury\namenington, D. C.\nDesr ni, Morgenthau:\nFirst, of course, I'd like to congratulate you on the magnifi-\ncent you una the effective results of the bond drive,\nAlso, I think you will De interested to know of a clever and\nsit 14ter-sting stunt that Ruth Weston, one of my actresses, wrote\nlate 163 anow, \"3 Is A Family.\" I had asked Miss Weston and the other\nDars of the cast to step out between the acts, each on a succeeding\nbirht. and make an appeal to buy bonds. They got together, however,\nand bent that idea by putting some bond drive speeches not between the\nasts, out actually into the play.\nIn other words, during the performance of \"3 Is A ramily,\"\nsure of the cheracters talks about needing money and thinking of selling\n$ 500 she hus. To which Miss Weston replies -- \"No, this is not the\ntime to soll, it's the time to Buy Bonde.\" Then she turns to the audienc\nand 40,0018 to them directly, just as Maude Adams used to step down to\nthe footlights in \"Peter Pan\" and ask \"Do you believo in fairies?\" --\nand says, \"Don't you think we must help our boys and win this War\nsconor. all of you, everywhere?\" And our audiences, by their applause,\nseem to like this idea of the actress stepping completely out of the\nplay and talking directly to them.\nThe idea is so good, I wish I had thought of it myself. At any\nrate, I am pleased, as I know you will be, that they are doing it in a\nof mine.\nSincerely\nJohn Golden\nP.S. Incidentally, I have sent word about this to other play producers\naround the town, suggesting that they try something similar in their\nproductions,\nCable Active\nJOHN GOLDEN THEATRE : 252 WEST 45TH STREET : NEW YORK CITY\njosenare\nLIGHTYIN\n1 WISE POOLS\nTHE FIRST TEAR\nDEAR ME\nTHANK U\nSPITE CORNER\nEVENTH HEAVEN\nWAGES POR WIVES\nTHE WISDOM TOOTH\nTWO GIRLS WASTER\nPIGS\nTHAT CRATITUE\nAJ HUMANDS 00\nAFTER TOMORROW\nLET US SE GAT\nSALT WATER\nDIVINE DRUDGE\nTHE BISHIP MMBINAMES\nA JOINH of NUMSTONE\nTHE LADres MEET\nTAXICO A FAMILY No\nMILORK\nCLAUDIA\n\"THEATRE\nRegraded Unclassified\n233\nTREASURY DEPARTMENT\nINTER OFFICE COMMUNICATION\nDATE\nSecretary Morgenthau\nSeptember 20, 1943\nTO\nFROM Randolph Paul\nYou may be interested in the remarks made by\nCongressman Disney relating to the Treasury's state-\nment on renegotiation, which I quote below:\n\"Mr. Disney. Did you hear Mr. Randolph\nPaul's testimony of the Treasury Depart-\nment? He made & statement before the\ncommittee last week. Did you hear or read\nthat testimony?\n\"Mr. Schneider. No; I was not here.\n\"Mr. Disney. That relates to the subject\nthat has been discussed here some before the\ncommittee of renegotiation after taxes. I\nwish you would do me the favor of reading\nthat statement, which seems to be 8. complete\none and showed a lot of thought, and give the\nclerk of the committee the benefit of your\nviews on that subject after having read\nMr. Paul's statement.\n\"Mr. Schneider. I shall be glad to do that.\nI read the statements made by the other\ngovernment officials in the hearing before\nthe House Naval Affairs Committee, and I am\nnot impressed with any reasons they gave.\n\"Mr. Disney. Mr. Paul made a clear study\nof it.\n\"Mr. Schneider. If he made a better state-\nment than was made by the others, I will be\nglad to read it.\"\nArt\nRegraded Unclassified\n234\nTREASURY DEPARTMENT\nINTER OFFICE COMMUNICATION\nCONFIDENTIAL\nDATE Sept. 20, 1943\nTO\nFROM\nMr. Hass\nSecretary GOH Mongenthau\nsubject: The Business Situation,\nWeek ending September 18, 1943\nSummary\nPrices: Commodity prices firmed last week, when optimism\nover an early peace was dampened by the hard fighting in\nItely. Stock prices made further recovery on increased\ntrading volume, with railroad stocks gaining 38 percent\nfor the week. Industrial stocks on the London exchange,\nhowever, were alightly lower.\nPara products: The reconvening of Congress again brings\nto the foreground the problems of farm prices and food\nproduction. Average prices of farm products in August\nreached the highest level since September 1920, and in\nthe four years since the war began they have increased\n119 percent as compared with 91 percent in the compar-\nAble period of the first World Mar. Farm prices in\nAugust overaged 17 percent above parity.\nsubsidies: Congress is apparently still opposed to subsidies\nfor holding down livin costs, 28 indicated by unfavorable\nreaction of the Venate Banking and Currency Committee to\nAdministrator Jones' proposals for subsidizing milk prices.\nPA rollback program: Details released by CPA on the\nproposed program for reducing living costs to the\nBettember 1942 level do not appear to bear out OPA expecta-\ntions that this can be accomplishef with on expenditure of\nonly 100 millions.\nV YRB index: A revision of the FRB industrial production\nintex, necessitated by the expension of menufacturing\nActivity under the var program, shows current total\nproduction one-fifth higher then indicated by the former\nindex. (Confidential data).\nRegraded Unclassified\n235\nStock orices moderately Righer\nIn C week marked by the reconvening of Congress, and by\ntendorary setback to the Americah invasion forces in Italy,\nstook prices on the New York Exchange have extended their\nrine on somewhat heavier trading volume. (See Chart 1.)\nThe advance in stock prices was most noticeable at the\nend of the week, when the war news had turned more favorable,\nend included all major groups, with no apparent distinction\nbetween \"var\" stocks and \"peace\" stocks. Railroad issues were\nparticularly strong, gaining 3+ percent for the week according\nto Dow-Jones averages, while the gains in industrial and\nutility stocks were about half that amount. All three groups\nrerched the highest levels since the end of July. In the London\nmarket, on the other hand, industrial stocks declined slightly\nduring the week.\nCongress brings back farm price problems\nWith Congress again in session, the problems of food\nproduction and the handling of farm prices again becomes\nen active subject. While total food production in 1943 1s\nestimated at 5 percent above the record levels of 1942, civilian\nper capita food consumption will be reduced about 4 percent\nbelow that of last year due to the increased demands for the\narmed forces and lend-lease, although it will still be above\ntue 1935-39 average. The management of farm prices in such B.\nway 25 to maintain food production with the minimum infla-\ntionary influence remains a critical problem.\nIn retrospect, farm prices have risen almost continuously\nduring the bast three years, with the index of prices received\nby farmers reaching in August the highest point since September\n1920. (See Chart 2, upper section.) Farm prices, in fact,\nhave shown a greater rise during this war to date than during\nthe comperable period of World War I. From August 1939 to\nAugust 1943, for example, the index of prices received by\nfarmers rose 119 percent, 2.8 compared with a rise of 91 percent\nfrom July 1914 to July 1918 in the first World Mar.\nrapid rise than the index of prices received by farmers. Con-\nThe index of prices paid by farmers has shown a less\nsecuently, since July 1942, farm prices have averaged higher\nfarm prices as a whole average 17 percent above parity last\nthen parity. (See Chart 2, lower section.) Not only d1c\nmonth (August), but prices were above parity in that month\nfor all groups of farm products except grains.\nRegraded Unclassified\n236\n- 3 -\nGrain prices show sharp rise during year\nAlthough form prices of grains ES E roup are still\nhelor parity, they have risen more sharply during the past\nyear than any other group of form products except fruit.\n(See Chart 3.) Prices received by fermers for barley end\nwhent payanced 64 and 33 percent, respectively, in the year\nended must. The 31 percent increase in corn prices shown\nfor the period would undoubtedly have been much larger if it\nand not oeen for the imposition of D. price ceiling in January.\nPhe huze feed recuirements of our record livestock pooula-\ntion ne the heavy demende of industrial alcohol producers have\nbeen important factors in the rise in grein prices. In the\nfinerl year 1943, the 000 sold 275 million bushels of wheat\nfor feed nurposes, most of this during the last half of the\nyear. The 000 18 continuing to sell whent for feed, having\n1800sec of 88 million bushels in July end August, end its\nstocks are now Jown to approximately 127 million bushels.\nSecause most grain prices have been below parity, it has been\nimpossible to impose effective price ceilings on any except corn.\nFara prices of milk and butterfat have increased 24 end 22\npercent, respectively, during the past year, but large increases\nin feed and la or costs have been an of feetting factor from 2\nmonuction standpoint.\nOther 0011 odities for which farm prices have increased\nsubstantially ove- the past year are: potatoes, 40 percent;\nflaxseet, 24 percent, and esse, 20 percent. The price of wool,\nof which the total output is purchased by the CCC, and the price\nof cottonseed, have shown more moderate increases. Large stocks\nhave tended to retard an advance in cotton prices, which rose only\n10 percent during the year.\nIn contrast to the share advances in the prices received\niv Termers for most products, prices received for hoge in\nAunust were 3 percent below those of last year, end farm\nvices of beef cattle were only 11 percent higher. The decline\nin hop prices and the moderate rise in beef cattle prices have\nbeen ue largely to price ceilings and to rationing of meat.\nHeavy marketings of hors have also tended to lower prices.\nCommodity prices firm\nThe stron occosition which our crmies are encountering\n1n Italy, and the President's declaration that c. long, hard\n11 ht 1 still shend, has E. somethat bul 18h effect on the\n178.2 percent of the August 1939 average, the index 18 1 percent\ncompetities rose =11 htly to a new 1gh. (See Thirt 4.) ..t\nit:- markets last week, one the BLS index of 25 basic\nRegraded Unclassified\n237\n4\nhigher than in early April 1943, when the President's hold-the-\nline order was issued. While this 1s not a large increase in\nitself, the almost continuous gradual rise in the index since\nmid-July is not encouraging. Most of the rise in the index\nduring the past two months has been due to advancing prices\nfor grains and meat animals.\nLast week wheat orices rose 1- cents per bushel and\nbarley prices 3¥ cents. Cotton prices rose fractionally, but\nprices of hoge were slightly lower.\nThe BLS all-commodity index continues its sidevise move-\nment of the past two months, holding unchanged in the week\nended September 11 at 102.8 percent of the 1926 average. The\nindex 1s now 3.6 percent above the corresponding week of last\nyear and is 37.1 percent above the pre-war level of August 1939.\nRising wheat prices squeeze millers\nWith wheat prices having risen over 5 percent since mid-\nJuly, flour millers are being squeezed between the higher\nwheat prices and the fixed flour price ceilings set last\nDecember by the OPA, it 18 reported in the press, Because of\nthe squeeze, business of mills in some sections is reported\nat E standstill, with many millers doing business at a price\nsacrifice.\nAlthough the use of a flour subsidy to relieve this\nsqueeze has been studied by the OPA, it 18 possible that\ncritical. However, when Government parity payments to wheat\nnothing will be done until the situation becomes more\ngrowers ceare at the end of the 1943 crop, some definite\naction vill be necessary, since the legal basis for the\npresent flour price ceilings, fixed at 39 percent of parity\n(including benefit payments), will have been removed.\nHog price ceiling imposed\nA price ceiling on live hoge at 14.75 per hundredweight,\nChicago basis, was announced by the OPA recently to become\neffective October 4. Since present prices of hoge are above\nthis the price ceiling should tend to reduce prices.\nHowever, corn and prices, which has made it more While\nlevel, it will do little to nerrow the wide margin profitable between\nto it feed corn to hoge great increase in the production fundamental of pork\nprices hog than to sell it in the market.\nand has resulted favorable in a corn-hog ratio has been a regions,\nfactor lerd, the the tight feed situation in some dairy Likewise,\ncausing decline in milk production. for\nwhich it has 16 been threatening chiefly responsible a for the shortage of corn\nindustrial uses.\nRegraded Unclassified\n238\n- 5 -\nThe MFA ennounced recently a reduction in the Government\nsupport price for hoge of $1.25 per hundredweight, effective\ncotober 1, 1944. Certain heavier weights are dropped from the\nsupport price schedule and lighter weights added, with the in-\ntention of discouraging feeding hors to heavy weights. While\nthe lower support price may serve as 2 warning to farmers\nneainst further increasing hog production, it will have little\nimmediate influence since it does not beçome effective for\nmore than n year.\nCongress 0000888 milk subsidies\nIndications appeared last week that Congress 1s still\nобловед to the use of subsidies for holding down living\ncostr. A suggestion by Food Administrator Jones that subsidies\nbe used to bolster milk production met Congressional opposition\nvisen presented before the Senate Banking and Currency Committee.\nAlthough no formal vote was taken, Senators Bankhead and Ball\nindicated that the majority opinion of the Committee vas favor-\nable to AD increase in retail milk prices in preference to the\nuse of subsidies.\nMilk production, Mr. Jones said, will decline considerably\nunless steps are taken to vive dairy farmers 8. better price for\nfluid milk, particularly during the winter months. Although\nmill: production usually drops during the last half of the year,\nA reater than seasonal fiecline is now expected by the Bureau\nof Apricultural Economics. Moreover, under present conditions\nmilk production in 1944 may be reduced to only 115 billion\nmounds, as compared with an expected 118 billion in 1943 and\n119 in 1942. The threatened decrease 16 due not only to an\nunfavorable cost-price relationship but also to a failure of\nfeed to move in sufficient quantities to feed-deficit dairy\nregions.\nThe several alternative subsidy suggestions to bolster\nailk production which Mr. Jones submitted to the Committee\nwere: (1) a straight subsidy to producers, probably everag-\nin- 1 cent a quart, which would cost about #50 millions for\nthe last three months of this year; (2) an area subsidy, in\nwhich the Government would allow a rise in retail ceilings\nin the low-orice areas, and would pay a subsidy to producers\n=0 hold prices stable in the high-price areas; (3) a feed-\ncort subsidy, which would compensate producers for increased\nfeed costs since September 1942, and would cost bout 128\nMillions for the final ouarter of this year.\nRegraded Unclassified\n239\n- 6 -\nDetoils of rogram to cut food prices released by OPA\nMore details of the recently reported program to reduce\nliving costs tero given last week by the OPA General Manager,\nChester Bowles. The program, which is in the final stages of\npreparation. 1s intended to reduce the BLS cost-of-living index\nto corroximately the levels of September 15, 1942 or a 4.6\npercent reduction from present levels. It will cost about\n100 millions annually, according to the OPA, and the money\nto finance it 18 available in funds of the Commodity Credit\nCorporation and the Reconstruction Finance Corporation. The\nalan contemplates some transportation subsidies, some purchase-\nond-resale operations, and some straight rollback subsidies.\nThe program would effect the following reductions in\nIVENT retail prices: apples would be reduced from between\n10 and 12 centa a. pound to 9 cents a pound, onione from 5 to\n6 cents, oranges from 10.2 to 9.7 cents, potatoes from 4 to\n3.5 cents, beanut butter from 33.3 to 26.5 cents, lard from\n18.9 to 17.9 cents, end shortening other than lard would be\nreduced about 1 cent a pound. It vas indicated that this\nportion of the program would lower the cost-of-living index 2.3\npercent. (Our calculations indicate that such reductions would\nlower the index only 0.8 percent.) Stricter compliance with\norice regulations are expected by the OPA to produce another\n1 percent reduction. The remaining 1.3 percent reduction\nnecessary to bring the index down to last September's figure,\naccording to the OPA, will result from regulations to be 18-\nsued on fresh fruits and vegetables.\nIt seems doubtful that the program will achieve the\nresults expected with en expenditure of only 8100 millions.\nMr. Bowles intimated that more subsidies may be necessary in\norder to hold prices at the September 1942 level once the\ninitial reduction has been achieved. However, \"It will be\nthe policy of the OPA to hold all its subsidy recommendations\nto En absolute minimum,\" and they are to be used only when\nthere is no other vey to prevent E. rise in retail prices.\nNew FRB production index\nThe broad expansion in the war production program, with\nits fer-reaching effects on manufacturing activity, has\nindex of industrial production. The revised index, now avail-\nRecessitated a general revision of the Federal Reserve Board\nable on & confidential basis, shows a current level of production\nabout one-fifth higher than that indicated by the old index.\n(See Chart 5.)\nRegraded Unclassified\n240\n- 7 -\nThe July preliminary FRB index of 243 (1935-39 = 100),\non the new basis, compares with an index of 203 (revised)\nfor that month on the old basis. More recent data, however,\nindicate that production in July was not as high as preliminary\nfigures had indicated, according to confidential information\nfrom the Federal Reserve Board, and the index may be revised\ndownward to 241 or 242, about equal to the previous peak of\n241 in May. The August figure 1s currently expected to be\naround the 242 level.\nThe Board has added 20 new series to the production index\nto make it more inclusive, and has substantially revised others.\nGreatest increases over the old basis are shown, respectively,\nby chemical products, transportation equipment, and machinery.\nThe present revision makes the FRB index more consistent with\neconomic data of other Government agencies covering such factors\nas employment, payrolls, and national income.\nRegraded Unclassified\nChart 1\nSTOCK PRICES, DOW-JONES AVERAGES\n241\nDaily\n1943\nAME/ET\nSEPTEMBER\n15\n-\n153\n155\n30 Industrial Stocks\nIN\n150\n(40\n145\n140\n140\n-\n135\nT.N.\n130\n(25\nis\n12\n120\n20 Relircade\n*\n-\nx\nNo\n-\n34\nW\na\nK.\n2\na\ne\n24\n&\nis Utilities\n-\n22\na\nx\n21\n18\n18\n-\nINDIA\n!\n-\nVolume of Trading\na\n/\n-\n-\n-\no\nM\n1\n14\n21\n28\n-\nDI\n19\n25\n-\n9\n16\n23\n34\n4.\n13\n20\n17\n4\nIf\n.\n,\nis\n22\na\n5\n12\n=\nA\nis\nAPRIL\n-\nMLT\n1\nSEPTEMENTS\n-\n-\n1943\n- # the Secretary of - Treasury\nF\n144\n- é - - -\nRegraded Unclassified\nChart 2\n242\nPRICES RECEIVED AND PAID BY FARMERS\n1909-14-100\n1939\n1940\n1941\n1942\n1943\nPERCENT\nPERCENT\n180\n180\n160\n160\nPrices Paid\n140\n140\nPrices Received\n120\n120\n100\n100\n80\n80\n$\nN\nJ\nM\nM\nJ\n$\nN\nJ\nM\nE\nJ\n5\nN\nJ\nM\nM\nJ\nS\nN\nJ\nM\nM\nJ\n$\nN\n1939\n1940\n1941\n1942\n1943\nRATIO\nRATIO\n120\n120\n100\n100\nRatio of Prices Received\n10 Prices Paid\n80\n80\n60\n60\nM\nJ\nS\nN\nJ\nM\nM\nJ\n$\nN\n5\nN\nJ\nM\nM\nJ\nS\nN\nJ\nM\nM\nJ\nS\nN\nJ\nM\n1939\n1941\n1942\n1943\n1940\na Prices Paid, Including interest and Three\nOffice of the Secretary of the Treasury\nP-252\nDivides of Remark and -\nRegraded Unclassified\nChart 3\n243\nPRICES OF SELECTED FARM PRODUCTS\nPercentage Change in Prices Received by Farmers, August 1942 to August 1943\nPCR\nCENT\nBARLEY\n+60\n+50\n+40\nPOTATOES\nWHEAT\nCORN\n+30\nFLAXSEED\nMILK\nBUTTERFAT\n+20\nEGGS\nCOTTONSEED\nTOBACCO\nBEEF CATTLE\n+10\nCOTTON\nWOOL\n0\nHOGS\n-10\nAUGUST\nAUGUST\n1943\n1942\nSOURCE: AGRICULTURE DEPARTMENT\nOffice of the Secretary of the Treasury\nF-\nDivision of Research and Statistics\nRegraded Unclassified\nMOVEMENT OF BASIC COMMODITY PRICES\n1942\n1943\n1944\nPERCENT\nPERCENT\nAUGUST 1939-100\n220\n220\n210\n210\n200\n200\n9 Uncontrolled Commodities*\n190\n190\n180\n28 Commodities\n180\n170\n170\n19 Controlled Commodities\n160\n160\nOCT.\nDEC.\nFEB\nAPR.\nJUNE\nAUG.\nOCT\nDEC.\nFEB\n1942\n1943\n1944\nPERCENTAGE CHANGE DEC. 6, 1941 TO SEPT. 10, AND SEPT. 17, 1943\nPERCENT\nPERCENT\nBarby anzx\n19 Controlled\n9 Uncontrolled\nFlasseed 6462\nCommodities\nCommodities\n+60\n+60\n+50\n+50\nNops 4861\nCarn 44.6%\n+40\n+40\nAven 366X\n+30\nLard 280X\n+30\nWheat 287 2\n244\nShellec 123%\nllood 111%\nSteers 2352\n+20\nCorronseed Oil 8.2%\n+20\nSugar 6.9%\nButter max\nWool Tope SBX\nCatton BOX\nPrint Cloth 4.9 I\nZine 3%\n410\n0% Change\n.10\nMides. Sills\nTin, Rubber,\nCoffee, Copper,\no\nSt. Screptem,\no\nSt Screp exp\nCocoo BX\nTollow 4.12\nBurlop 432\n10\n-\n10\nDec. 6\nSept. NO\nSept. 17\nDec. 6\nSept. ID\nt I\n1941\n1943\n1943\n1941\n1943\n1943\n20 Controlled a Uncontrolled previous 10 June 26, 1942\nOffice of the Secretary of the Treasury\n- of - and States\nP-244-A\nRegraded.Unclassifie\nF.R.B. INDEX OF INDUSTRIAL PRODUCTION, REVISED\n1935-39=100, Seasonally Adjusted\n1937\n1938\n1939\n1940\n1941\n1942\n1943\nPERCENT\nPERCENT\nMonthly\n275\n275\n250\n250\n225\n225\nRevised Index\n200\n200\nOld Index\n175\n175\n150\n150\n125\n125\n100\n100\n75\nJ M M J S N J M M J S N JMMJSNJMMJSNJMMJSN 1939 J M M J S N J M M J S N J M M\n75\n1937\n1938\n1940\n1941\n1942\n1943\n1944\nChart\nlittle of the Secretary of The Treasury\n245\nMU\nDese and Statistics\nRegraded Unclassified\nDEPARTMENT OF STATE\nWASHINGTON\nrep.\nefer to\nDear Henry:\nWith reference to your letter of September 8, 1943,\nregarding possible proposals to levy exclse taxes on\ncoffee, tea and COCOE and to increase the existing excise\ntax on sugar, I am enclosing 2 copy of an informal тешо-\nrendum describing briefly provisions in our trade agreements\nwhich would have a bearing on proposels to Impose excise\ntaxes on these products. This memorandum was recently\nprepared at the request of Mr. Colin F. Stam, Chief of\nStaff, Joint Committee on Internal Revenue Taxation.\nThe situation which the enclosed memorandum endeavors\nto bring out may be briefly restated. Since sugar is pro-\nduced domestically a.s well as imported, an increase in\nthe existing excise tax applying equally to both domestic\nand foreign sugar would not disturb the competitive rela-\ntionship between the two. A nondiscriminatory increase\nin the tax on sugar, therefore, would not conflict with\neither the letter or spirit of the trade agreements in which\nthis Government has granted & duty concession on that product.\nWith regard to ooffee, cocoa and tea, however, the aitua-\ntion is different. Since the supply of these products 1s\nalmost wholly imported, the application to them of an excise\ntax would be no different in its economic effects from a\ncustoms duty. For this reason, the imposition of excise\ntaxes on these products would ordinarily be regarded as\ninconsistent with the spirit, if not the letter, of the\ntrade agreements in which this Government has guaranteed\ntheir duty-free entry. As pointed out in the memorandum,\nin excise tax on coffee would directly contravene the letter\nof the trade agreements with Brazil and Colombia. However,\nit has been the policy of the Department to take the posi-\n1on that nothing in any trade agreement shall be construed\nto\nThe Honorable\nHenry Morgenthau, Jr.,\nSecretary of the Treasury.\nRegraded Unclassified\n7\n- 2 -\nprevent the adoption of measures imposed for the pro-\nction of the country's essential interests in time of\nar or other national emergency. Other countries follow\nthe same policy.\nIt is understood from your letter that any excise\ntax proposals with regard to coffee, cocoa and tea would\noriginate in Congress. If the appropriate committees\nof the Congress should give serious consideration to the\nimposition of excise taxes on coffee, cocoa and tea as\ntemporary measures deemed essential to the war financing\nprogram, the Department would take up the matter with the\nforeign governments concerned in accordance with the\npolicy stated above.\nSincerely yours,\nCorrestwee\nEnclosure:\nMemorandum\nRegraded Unclassified\nAugust 11, 1945\nProposed Excles Taxas an Coffee, Cames.\nTea and Bugar\nIn the event serious consideration should be given,\nin connection with current studies in regard to a new\ntax bill, to any proposal to impose excise taxes on\ncoffee, 0000A, tea or sugar, the Committee on Ways and\nMeans would undoubtedly give due consideration to the\nbearing of such & proposal on the foreign consercial\nrelations and international obligations of the United\nStates. The following information concerning these\ncommodities may therefore be useful for reference pur-\nposes.\nThe continued duty-free entry of coffee into the\nUnited States is provided for in trade agreements between\nthe United States and eleven other American republics,\nnamely, Brasil, Colombia, Venezuela, Eoundor, E1 Salvador,\nCosta Hios, Honduras, Gustomala, Halti, Peru and Mexico.\nThe continued duty-free entry of cocoa beans 1s pro-\nvided for in trade agreements with seven American republies\n(the same countries mentioned in the previous paragraph,\nexcept Colombia, Guatomala, Peru and Mexico), and also in\nthe trade agreement with the United Kingdom.\nThe continued duty-free entry of tea 10 provided\nfor in the trade agreement with the United Kingdom.\nIn the trade agreements with Brazil and Colombia,\nresiprosal commitments have also been undertaken by the\nUnited States and the two countries mentioned not to impose\nany new OF increased federal internal taxes on the articles\non which duty concessions were granted, including in the\nwase of the agreement with Colombia, ooffee, and in the\ncase of Brazil, both ooffee and 0000R beans. The other\ntrade agreements mentioned above do not contain a specific\nprovision of this kind. However, since all or almost all\nif the ooffee, 00002 beans and tea consumed in the United\nStates is imported, an \"excise\" tax on any of these com-\nodities would be, in effect, equivalent to a customs\ntuty. For this reason, the foreign governments concerned\nexclse\" tax on any of these products as an impairment of\nould almost certainly consider the imposition of an\nthe\nRegraded Unclassified\n- 2 -\nlertaking by the United States to maintain the\n00 status of the product, in return for which\ning they granted valuable concessions on Ameri-\nexport products.\nwith regard to sugar, duty concessions on this prod-\nust have been grented by the United States to Cuba and\n7ard. Although there is nothing in either of these\nagreements which would prevent the application to imported\nsugar of an increased excise tax so long as such increase\nwere also applied to domestic sugar, it is noted that the\ndovernment of the United States has purchased the entire\nexportable pertion of the Cuban sugar erop for this year,\nen a basis assuring a fixed return to the Cuban producer,\nand Is new negotiating for the purchase of next year's\ncrop on a similar basis. It would appear, therefore,\nthat under the terms of existing and proposed sugar pur-\nchase contracts, any increase in the excise tax would,\nin respect of the bulk of our sugar imports, have to be\nabsorbed by the Government of the United States.\nThe foregoing indicates in a general way our exist-\ning commitments tmente with regard to coffee, 00002, tea and\nsugar. The Department of State would, of course, be glad\nto furnish any additional information in regard to these\ncommi twents, or information in regard to other matters\nwithin the responsibility of this Department, which the\nComuittee may 06 weasion desire in comnection with its\nconsideration of new tax proposals.\nRegraded Unclassified\nV\n250\nSeptember 20, 1943\nDear Waley:\nwill you please transmit the\nenclosed letter to the Chancellor of the\nExchequer? It is from Secretary Morgenthau\nin reply to the Chancellor's letter of\nSeptember 3, 1943, with regard to the visit\nof Lord Keynes and his colleagues to discuss\ntentative proposale for international monetary\ncooperation.\nSincerely yours,\n(Signed) H.D. White\nH. D. White,\nAssistant to the Secretary.\nSir David Waley,\nUnited Kingdom Treasury\nRepresentative,\nBritish Supply Council,\nWillard Hotel,\nWashington, D. C.\nEnclosure\n9/21/43 - Forwarded to adresses by\nspecial messenger from Mr. White's\noffice - 10:00 s.m.\nLS\n9/21/43\nRegraded Unclassified\n251\nSEP 20 1943\nDear Mr. Chancellor:\nI am glad that you have sent Lord Keynes and his colleagues\nto Washington to discuss with lb. White and the American techni-\ncal experts the tentative proposals for international monetary\ncooperation. Their discussions are now going on. I share with\nyou the hope that these discussions will make it possible for\nour countries and the other United Nations to bring to the so-\nlution of the problems of peace the same spirit that has marked\nour common war effort.\nI appreciate your difficulty in choosing a successor to\nSir Frederick Phillips. Frankly, we have come to regard the\nrepresentative of your Treasury in Washington as an important\nlink in the maintenance of close relations with you. I have\nevery confidence that the representative you choose will con-\ntinue the tradition of cooperation between the Treasuries of\nthe United States and the United Kingdom. You may be sure\nthat your representative in Washington will always find a\ncordial welcome here.\nSincerely yours,\n(Signed) W. Mergenthau, Jr.\nSecretary of the Treasury\nSir Kingaley Wood,\nThe Chancellor of the Exchequer,\nLondon, England.\nEMB/jm\n9/20/43\nRegraded Unclassified\nUNITED KINGDOM TREASURY DELEGATION\nBOX 680\nBENJAMIN FRANKLIN STATION\nWASHINGTON, D.C.\nREFERENCE:\nTELEPHONE EXECUTIVE 2020\n21st September, 1943.\nDear White,\nThank you for your letter of September 20th\nenclosing a letter from Secretary Morgenthau to\nSir Kingsley Wood's letter of September 3rd, 1943.\nI am sending the letter on to London, as I assume that\nthis will be the Secretary's wish despite the tragic\nnews of Sir Kingsley's death.\nSincerely yours,\nS.D. walay\nDr. Harry White,\nU.S. Treasury.\nGreasory Chambers,\nS.M.\n3rd September, 1943.\nbean hn Morgen th an\nI am very glad that it has been possible to arrange\nfor Lord Keynes to come to Washington to discuss with you\nand Dr. White and others the important proposals for an\ninternational monetary scheme after the war. Dr. White\nand Lord Keynes have both made this, as it were, their\nown subject, and have brought all their knowledge and\nexperience to it, T am very hopeful that in the friendly\ndiscussions which they will have satisfactory progress will\nbe made which will enable both our Governments to proceed\nto the next 'mportant stage.\nI need not introduce Lord Keynes to you. He brings\nmy best wishes for the success of his task, and I know\nthat he will have yours.\nSir David Waley is Also returning to act for the\ntime being as the representative of our Treasury in\nWashington. I am afraid, however, that I shall not be\nable to let him stay indefinitely as Sir Frederick Phillips'\nsuccessor, for there pre other parts of his work at the\nTreasury on which he has specialised experience not easily\nRegraded Unclassified\nobtainable elsewhere.\nAs you will understand, I am very anxious to make &\nright choice in succession to Frederick Phillips, who was\nyour friend as well as mine, and enjoyed equally the\nconfidence of both of us. I want to take time to choose\nsomeone who seems suitable and before I reach a decision\nI shall ask the Anbassador to see you personally and to\ntell you of my intentions.\nYours Suncerely\n/ none\nHenry Morgenthau, Esq.\nSEP1\n254\n25\nSEP 20 1943\nDear Sir David:\nwould you be se kind M to transmit the enclosed\nlatter to the Chancellor of the Exchequer acknowledging\nreceipt of his two letters of September 3, 19437 The\nfirst concerns the receipt by the United States of zuw\nmaterials from British Empire areas as recipresal aid\nand the second served to transuit the memorandum on\nthe Overeses Assets and Liabilities of the United King-\ndon.\nThanking you in advance, I an,\nSincerely yours,\n(Signed) H. Mergenthau, Jr.\nNP\nSecretary of the Treasury.\nSir David Waley,\nUnited Kingdom Treasury\nRepresentative,\nBritish Supply Council,\nWillard Hotal,\nWashington, D. C.\nEnclosure.\nTMK:ff 9/20/43\nRegraded Unclassified\n255\n25\nSEP 20 1943\nDear Sir Kingsley:\nI as writing to acknowledge receipt of your two letters\nof September 3, 1943, - of which dealt with the receipt by\nthe United States of THE materials from British Empire areas\nM resiprosel aid and the second of which served to transmit\ncopies of the memorandum on the Overness Assets and Liabili-\nties of the United Kingdom.\nI appreciate your giving these matters your close\npersonal attention. You may be assured that the points\nraised in your letter and the assorandum will receive our\nmost careful consideration.\nSincerely yours,\n(Signed) H. Morgenthau, Jr.\nSecretary of the Treasury.\nThe Hemorable Sir Kingsley Wood,\nChanceller of the Imchequer,\nLandon, England.\nTHE:ff 9/20/43\nRegraded Unclassified\nCreasury Chambers,\nWhiteball S.M.\n3rd September, 1943.\nbean his Morgentha\nIn my message to you of the 23rd August I said that\nI would give close personal attention to the aide\nmemoire on Reciprocal A1d which our Embassy received on\nthe 18th August and would write to you about it. I am\nnow taking advantage of Sir David Waley's return to\nWashington to send you this personal letter as it seemed\nto me best that I should ac uaint you myself with the\nposition as I Bee it. In doing so, I know I can count on\nthe ready understanding with which you have approached the\nproblems of my country in the past.\nI should first tell you that my overnment have\nnow given instructions for the reply to the State\nDepartment on the aide memoire which the Embassy received\nfrom them. I think it will be found convenient that our\nply should be (iven orully in the first place;\nscussions as ,e both know often prevent misunderstandings.\nreover the representatives of our Departments in\nshington will then be competent to settle the administrative\ncedure for the new arrangements and thus to save time in\n/bringing\nRegraded Unclassified\nbringin bittem into effect. Afterwards, 1f it suits you,\nour agreement might be appropriately recorded in an\nexchange of notes which could be published for the\ninformation of our peoples,\nWhen I learned at the beginning of June that\nyou had in mind proposing that raw materials should be\ngiven aB Reciprocal Aid, I viewed the idea with\nimedia to sympathy. It was a natural development\nbf the pooling of resources between our countries,\nwhich is illustrated by the Lend-Lease system, and on\nbehalf\nor the United Kingdom and the Colonies, I\nobtain\nthe concurrence of my colleagues to the general\nprinc\nunderlying your proposal.\nquestion of our gold and dollar balances,\nwhich\nnow has been causing you some concern and\nwhich\naed been hoping to discuss with Sir Frederick\nPh11\nseems to me a separate question and I can\nportu\nefer to it more conveniently later in this\nlett\n/As\nRegraded Unclassified\nCommany\nCreaters,\nAs regards the proposals for raw materials,\nthe Governments of Australia and New Zealand have\ntheir own Lend-Lease Agreements with the United States\nGovernment, and the Union of South Africa 18\nnegotiating such an Agreement. While the Government\nof India have no Agreement, they are giving Reciprocal\nAid, they have direct relations on Lend-Lease with the\nUnited States Administration and they are, as you know,\nfiscally independent. The position is therefore that all\nthese Governments will expect to be approached direct\non the programme as it affects each one of them and to\ngive their own answer. When the proposal was\nspecifically made to us at the end of June, we\nnaturally told the Dominions and India of our own\npolicy in regard to it. We are, of course, also\nkeeping them informed of the subsequent developments\nand, while you will appreciate that I cannot speak for\nthem, I am not unhopeful of the attitude which they will\ntake up.\nWhen we received the provisional list of raw\n/materials\nRegraded Unclassified\nunterials\nmore\ntentative\n311'\nFr\nwe\ndid\nnot\nPC\nthe\nillustration\nscale\nof\nand\nI\ncertainl:\naid system should kept Plexible :0 must\nchanged needs, de Are rendy to regard one offer\nas elastic and coverin all the procurements by the\nUnited States Government 01° uncontial reguire nts for var\nneeds of food-stuffs and PAV datori lo, in so far as they\ncan be supplied from the inited Ein do., ANd the Colonies.\nSomi precision in the 20 wasse is ocessar for smoth\nwo ng, but this CO., no donbt be achieved 1.1 the sa to vay\nas the case of Lend-Lease, through the sub.Hosion to\nus\npro ranmes and requis tions which may very 1.48.\nto time and which, T can assure you, we will\n/\ne:\nde in the same way and with the same desire to help\n/as\nRegraded Unclassified\nGreaming Chambers,\ndelhiteball\nS\nthe Lend-Lease Administration have always shown in\ndealing with our requirements of United States resources.\nAs regards the date of the 1st October. This\nas only suggested by us to give time for the arrange-\nments which would be necessary for the switch-over from\ndirect procurement by the United States Government to\nprocurement by us. It was not our intention that you\nshould complete all your contracts outstanding on that\ndate. We are perfectly ready to make such arrangements\nas will permit supplies under Reciprocal Aid to commence\nst the earliest possible date.\nOn these lines, which will be discussed with\nthe Administration by Sir David Waley and his colleagues,\nI should expect that a satisfactory arrangement between\nour two Governments could speedily be made.\nIt seems to me, however, that the proposal in the\naldo memoire that financial reimbursement should be\nmade to the United States Government, retrospectively\n10 the 1st July, for all deliveries covered by the new\narrangemente which were made between the 1st July and\nthe\nRegraded Unclassified\n, to\nWhich 1.00\nly nei lace in\nchelle\nthe\ne materials m\nthis raises\nand doll\nletter.\nHere I should be\neness of our rel 1f\n:\nerstan that\nInces and Ir\nriticis\n-]\nint scale. I\nboldue\n10\nlities\nthe Noble\n45\nRES\nnc\nlos\nIl\nno\n8.8\nRegraded Unclassified\nTreasury Chambers,\nWhiteball S.M.\nUnited States Government and of the Dominion of Canada.\nIn many other parts of the world, however, We have to\nprovide the finance for the war. We call only do this\nin the main by borrowing local currencies against a\ncredit in sterling to the respective countries, and\nthus we re incurring unfunded indebtedness on a vast\nscale. We could not continue this policy indefinitely\nwithout having some proportion of liquid assets out of\nwhich the more pressing part of the liquid indebtedness\ncould be met if called for from time to time. But our\nliabilities, which are liabilities of the United Kingdom\nalone, are several times as great as our reserves, and\nthe disproportion between our reserves and liabilities is\nalso reflected in their growth.\nMoreover, the gold and dollar balances, which are\nshown as United Kingdom balances, are not in fact our\nreserves alone; they are the pooled reserves of the\nsterling area. As you know, the members of the sterling\narea turn over to us their surplus dollar earnings in\nexchange for sterling credit. But this carries with it\n/an\nRegraded Unclassified\ntoll a 1\nng\nerlin\nPoots suns =\nt ose W\non the\nnce between the\nBut that is\nhol\nBEGANE\nreceivi\nresms\nscale beer 50\nol\nan\n:oramo na\nof\nlité of\nIl\nRegraded Unclassified\nContain Crambers,\nSM.\nJanuary Sir Frederick Phillips delivered to you a\nmessage from me on a proposal that Lend-Lease might be\nrestricted if our reserves rose above a certain\nfigure. It was, I think, on the 15th February that he\ngave a note to the Treasury briefly explaining the\nposition. It is clear to me that possibly because the\ndiscussions on the subject 80 far have been incomplete,\nwe have not been successful in demonstrating how we view\nthis matter or the principles involved in it. I have\ntherefore given instructions that the particulars in the\nnote which Sir Frederick Phillips gave to the Treasury\nin February should be brought up to date, and I am\narranging that a fuller confidential statement should be\ndelivered to you for your consideration, and for\ndiscussions between the representatives of the United\nStates Administration and our representatives in\nWashington.\nWhen you have studied this statement I am sure you\nwill understand me when I say that my Government could\nnot regard it as reasonable that a limit should be\n/placed\nRegraded Unclassified\nplac\nto our cold end doll e holdings which pays no\nregion\nto our liabilities and the'r growth, or to the\nwar irc mstances which leve brought about this position,\nparticularly the fact that the have to finance practically\nthe whole of th war expenditure in the iddle Mast and\nIndia. Indeed I real entitled to hope that when the\nwhole position is d'scussed and is clear, we may count,\nwhile the war circumstances remain as they are at\npresent, unon the continuance of Lend-Lease on its\npresent lines.\nOur external financial usition naturally\ngives me grown for concePa AND in MY maiget Speech on\nthe 12th April - outlined to Parliament the resent\nlosition. This state ent 0.0 seit viúo interest and\nParl ament is increasi. attention to the shole\nsub, ct; Part*\ne\nexhaple,\nthat\nQUE\nColi ind dollar\nLel\ninst very uch\nlar\nincreasing.\n*...\nred\nise\nsheald talid\nste\nof various inús disferent times to\n/\nRegraded Unclassified\nCreasurg Chankers,\nWhiteball S.M.\ndischarge some of these liabilities, through the use\nof our gold and dollar balances. I shall welcome a full\ndiscussion on the problem and our representatives have\ninstructions to disclose the whole situation to the\nUnited States Administration. I cannot say here and now\nwhat we shall find It best to do, but I shall keep you\ninformed of the lines on which we are proceeding.\nAs regards the publication of Reciprocal Aid\nfigures, I think that it 18 necessary to publish a\nWhite Paper here as soon after the re-assembly of\nParliament in the latter part of September as is found\nconvenient. Parliament and our people are entitled to\nknow of the magnitude of our effort and of the burden it\nentails. A copy of the White Paper in its present form\nhas been given confidentially to the United States\nTreasury and to other representatives of the United States\nAdministration and I shall be glad to consider any\nsuggestions you or others may make on it. Then when we have\nit in the final form in which I think it should be\npresented to Perliament, I will arrange that you are\n/given\nRegraded Unclassified\nRE CRIVED\nTreasury Department\nSEP 17 1943\nDivision of\nMonstary Research\ngiven an on ort nity of seeing it before 1 t, is published.\nI have tried in this letter to :ive you a broad\noutline of our position, as I se it, Athont: tronbling\n\"on with unnecessary detail. Even so the letter has\nperhaps become overlong. d'remistances, however,\nunfortunately make it impossible for us to sit lown\ntogether and tslk over this important subject. In au\nparticularly anxious that you, ./ho have so clearly\nunderstood onr financial osition in the post 1.1:2\ngave us your icl; at 2* 11:10 1t time, onlă have a\nfull story and start Keve it street 1: a personal\nmy from me.\nnich an good wishe\nJun Sincerely\nNoral\nent Nor enthan, use,\nRegraded Unclassified\nCreasurg Chambers,\n5.00.\n3rd September, 1943.\nbean her Margen than\nIn the personal letter from me which Sir David\nWaley has delivered to you I refer to a fuller\nmemorandum on the subject of our gold and dollar\nbalances and our external liabilities which I was\nhaving prepared for the confidential information of\nyourself and other members of the United States\nGovernment.\nThis letter covers the memorandum which, as\nyou see, not only sets out the details of the position\nfor your information but gives 9 full account of the\ncircumstances which has led to this nosition and of\nour present policy in regard to it.\nIm Sincerely\nMugley Nill\nHenry Morgenthau, Esq.\nRegraded Unclassified\nRANDUM BY THE BRITISH TREASURY\nTHE OVERSEAS ASSETS AND LIABILITIES OF\nTHE UNITED KINGDOM\nI. THE OVERSEAS FINANCIAL POLICY OF THE UNITED KINGDOM.\n1. The passage of the Lend-Lease Act early in 1941 and the assistance\ngiven by Canada from 1942 onwards have dealt most liberally with the more\nrecent financial requirements of the United Kingdom in North America. These\nmeasures are well known and widely appreciated. In most other parts of the\nworld, however, His Majesty's Government have to pay for the war by acquiring\nlocal currencies against B. liability to repay sterling and are thus incurring\nunfunded indebtedness on a vast scale. It would not be possible or reasonable\nto continue this policy indefinitely without having some proportion of liquid\nassets out of which the more pressing part of the liquid indebtedness could\nbe discharged if called for from time to time. It has, therefore, been our\ndeliberate policy to accumulate a reserve (though, relatively, a small one)\nagainst these liabilities - not out of our net external earnings because, of\ncourse, there are none - but partly by ad hoe capital transactions and partly\nby holding on to B. portion of such current dollars and gold 8.6 come our way\n(mainly from other parts of the Sterling Area) instead of using the whole of\nthem to meet our liabilities. The dollars acquired from other part of the\nSterling Area, however, have to be paid for in sterling, which increases our\noverseas indebtednoss, This system has, therefore, the effect of increasing\nour gross indebtedness but does, at least, mean that we hold something against\nit. For example, it has seemed to us more advisable to borrow in the course\nof the year (say) $3,200 million and retain $800 million to meet pressing\nclaims, than to borrow $2,400 million and retain nothing against it.\n2. The recent increase in British liquid assets is thus an essential\ncomponent in a careful (though nevertheless vulnerable) financial policy by\nwhich, though with tho most dangerous risks to our post-war position, we\nhave managed to finence a vast war exponditure in India, the Middle East and\nalsewhore - an expenditure which is, of course, vitally essential to the\nprosecution of the war. To set a limit to our assets while disrogarding the\ngrowth in our liabilities would tear this delicate system to pieces. Only\nIf we are left free to pursue our existing policy can we hope successfully to\nfinance our vast and essential commitments outside North America.\nRegraded Unclassified\nSTATISTICS ILLUSTRATING THE OVERSEAS FINANCIAL POLICY OF THE UNITED\nKINGDOM.\n(a) Growth of Liabilities in Relation to Assets.\n3. The statistics which show how this policy has worked out in practice\nare given in dotail below.\n4. The excess of the financial burden overseas beyond what could be met\nout of current income in the last 3/2 years has been met in four ways as follows:-\n$ million\nJan.1,1940\nJan.1,1940\nto\nIn\n1st half\nto\nDec.31,1941\n1942\n1943 (approx.)\nJuno 30,1943\n(1) By overseas loans*\nR.F.C. loan\n345\n15\n- 10\n350\nCanadian secured loan\n-\n635\n- 15\n620\nSundry loans & advancos\n115\n125\n15\n255\nTotal Loan\n460\n775\n- 10\n1,225\n(11)By sale of overseas\ninvostments\n(including sinking funds) 1,545\n845\n5359\n2,925\n(111)By not increase of\nquick liabilitios#\n(oxcl. those carry-\ning a gold or dollar\nliability)\n2,5857\n1,240\n1,235\n5,060\n(1v)By sale of gold and\ndollars (not, 1.0.\nallowing for gold\nand dollar liabili-\ntics)\n1,950\n- 305\n- 330\n1,315\nGrand Total\n6,540\n2,555\n1,430\n10,525\n*\nNo crodit is hero taken for cortain loans advanced during the var\nto Alliod Government.\n√\nThe figures for the first half of 1943 are provisional and subject\nto correction.\n#\n1,0, Banking liabilities and liabilities of Grown Agents and of\nCurrency Boards.\n7\nThe of this figure requires an catimato of the quick\ncalculation at the commencement of the period on January 1st, and 1940.\nliabilities estimate of this assumed above is $2,000 million approx., to\nThe is this figure which has to be added to the figures above\nit the correct total of the quick liabilities at any examination subsequent\ndate, give This figure of $2,000 million is under further\nand may have to be roducod.\nRegraded Unclassified\n5. The effect of these changes on the aggregate of the gold and\nar reserves has been as follows: -\n$ million (Gold at 835 per fine OZ,)\nDec.31\nDec.31\nDec.31\nJune 30\n1939\n1941\n1942\n1943\nCross gold and dollar\nreserves#\n2,335\n500\n930\n1,335\nless gold end dollar\nliabilities\n-\n115\n240\n315\nQuick reserves\n2,335\n385\n690\n1,020\n/Exclusive of dealers' balances.\nDIncluding an approx. allowance for 200 million held in private accounts\nat that date, but subsequently requisitioned and added to the\nofficial balances.\n6. The relation between the growth in quick liabilities and in the\nquick assets held against them was, therefore, as follows:-\n$ million\n1942\n1st half 1943\nIncrease in quick liabilities 1,240\n1,235\nIncrease in quick assets\n305\n330\nThe accompanying increase in total liabilities has been 2,015 and 1,225\nrespectively.\n7. It will also be observed that, whilst gold and dollar reserves\nhave increased in the last eighteen months, they have fallen by more than\nhalf over the period as a whole. Quick liabilities (namely $7,000 million\napprox.) are now about seven times the quick reserves held against them.\n(b) The Sources out of which the Quick Reserves have been Accumulated.\n8. The following paragraphs analyse the sources out of which 1st an\nJanuary 1942 to 30th June 1943. Particular attention may be drawn the\nincrease in our quick reserves has been accumulated in the period to\nfollowing points: -\n(1)\nOf the total net increase in the period of $635 million, by\nfar the most important source has been the dollars acquired rom\nthe rest of the sterling area ($594 million) which has involved\na corresponding growth in our liabilities,\n(11)\n-\nOf represents pay of U.S. troops. A further $95\nthe dollars acquired from the rest of the sterling area\nmillion $462 million was received in respect of the pay of U.S. troops in the U.K.\n(111)\nbetween Apart the U.K. and U.S.A. was during the period adverse the\nfrom troop payments the balance on current account to\nU.K. by $349 million.\n(iv)\nA further Africa provided for the repatriation of South African in\nimportant source has been $182 million of gold\nfrom sterling South Government securities, which represents no increase\nour total assets.\nRegraded Unclassified\nwith below, has been as follows: .\nUnited States. This account, apart from troop payments which are dealt\nfavourable balance on current account between the United Kingdom and & the\n9. The growth of our quick reserves has not arisen through\nmillion\n1942\n1943 1st half\n1943 2nd half\nReceipts\nforecast)\n825\n324\nOutgoings\n312\n1,112\n386\n394\nBalance\n287\n- 62\n- 82\nThe further reduction in net expenditure on pre-Lend-Lease\ncommitmento during 1943 compared with 1942 has considerably reduced the\ndeficit, but has not been suffidient to wipe it out. The prospective cost\nof the further reciprocal aid now proposed on raw materials will largely\noffset the saving on old commitments, but as its allocation between the\nU.K. (which boars the cost) and the Colonies (which produce the materials)\nis not casy to define in a balance of payments context, the matter is dealt\nwith below in connection with the current balance with the U.S. of the\nStorling Area ao A. whole,\n10. The troop paymonte which are not included in the above table\nariso oving to the fact that, whatever else may be provided under Lond-Lease\nor Reciprocal Aid, it has been recognised from the beginning that\nGovernments must rotain diroct responsibility for the pay of their own\nforces in all parts of the world. Receipts of the U.K. under this head\nhave boon: -\n8 million\n1942\n1943 lat half\n1943 2nd half\n(forocast)\nU.S. troops in U.K.\n50\n45\n150\nIt vill be seon that, ovon after allowing for these receipts,\nthere still romains a deficit of $237 million in 1942 and $17 million\nin the first half of 1943 against the U.K. in favour of the United States,\n11. Às mentioned above a special consideration applies to this item\nand to the similar receipts (acc below) by other parte of the Sterling\nAroa. To offect these receipts by a reduction of Lend-Lease Aid to the\nU.K. would como to the same thing as asking for the pay of American\ntroops throughout the Sterling Arca to be charged on the British Budget\nas a part of Reciprocal Aid. This proposal, if it were made, would be\ncontrary to the principles of Mutual Aid, as understood hithorto, which\nhave regarded the pay of the troops of each Ally, wherever situated, as\nthe responsibility of that Government.\n12, In addition to the outgoings included above, certain dollar\npayments have been made by the United Kingdom outside the Unitod States,\ninsignificant in 1942, but amounting to 5165 million, chiefly to Canada,\nin the first half of 1943.\n13. Capital transactions in the United States, after touching high\nlevels in 1940 and 1941, nade only a small contribution to meeting the\ndeficits in the poriod undor considoration:-\n$ million\n1942\n1943 1st half\nSalos of gold in U.S.\nB\n4\nSalos of securities in U.S.\n22\n21\nInstalment of R.F.C. Loan\n40\n70\n25\nRegraded Unclassified\n14. All the above items taken together show A deficit of over $900\nmillion against the U.K. in the eighteen months ending Juno 1943. How,\nthen, has the increase of the British quick reserves como about? There\nhave boon three main sources.\n(1)\nBy far the most important source has been the dollars\nacquired from the rost of the Storling Area. The current account\nbetween the rest of the Storling Area and the Unitod States has\nbeen as follows: -\n$ million\n1942\n1943 1st half\n1943 2nd half\n(forecast*)\nRocoipts\n600\n292\n262\nOutgoings\n481\n177\n158\nBalance\n119\n+\n115\n104\nBoforo allowing for further reciprocal aid in raw materials.\nTaking those figuros in conjunction with those for the U.K., it vill be\nobserved that in the eighteen months ended June 30th 1943 there has been\na deficit of $115 million adverse to the Sterling Area as a whole in the\nabove curront account with the United States outside Lend-Lenso and\nReciprocal Aid. This may not have been appreciated in all quartors, and\nit may have been orroncously bolieved that the Unitod Kingdom quick\nreserves had increased because the greater scope of Lond-Lease compared\nwith that of Reciprocal Aid had lod to a current balance with the Unitod\nStatos substantially favourable to the Sterling Arca. The new proposels\nfor reciprocal aid in raw matorials will probably convort into a deficit\nthe small surplus which might otherwise accrue from non on ns a result\nof the completion of payments on the pro-Lend-Loase contracts.\nThe receipts arising from the presence of U.S. troops in the\nrost of the Storling Area (which are not included above) vero\n3194 million in 1942 and $166 million in the first half of\n1943. Receipts from this source in the second half of 1943 are\nconjecturally catimated at $200 million.\nAll those dollars, both those arising from the favourable\ncurrent account and also those in connection with U.S. troops,\namounting altogother to $594 million in the eighteen months\nonding Juno, 1943, have been acquired by the United Kingdom\nunder the pooling arrangements by which numbors of the Sterling\nArea soll to the United Kingdom for storling any dollars which\nthoy carn in excess of their own direct requirements. Thus the\nquick storling liabilities of the United Kingdom have been\nincreased by the samo amount GD the dollar assets 60 acquired.\n(11)\nllo have received, mainly in the first quarter of 1943,\n$182 million of gold from South Africa for the repatriation of\nSouth African Government storling socurities. This has not\nrepresented an increase in our assets, but only n. change in\nthoir form.\n(111)\nRe also receive gold, chiefly from South Africa, against\npayment in storling, and since 1941 have retained a part of this\ngold to moet contingoncios, instoad of applying it at onco to\nmoot current linbilities.\n15. The above analysis of the sources of the quick assots of the\nUnitod Kingdom can be summed up na follows:-\nRegraded Unclassified\nmillion\n1942\n1943 1st half\nU.K. curront account with U.S.\n- 287\n- 62\nU.S. troops in U.K.\n+ 50\n+ 45\nU.K. dollar payments outside U.S.-\n2\n- 165\nSalo of gold and securities and\nloans in U.S.\n+ 70\n+ 25\nRest of Storling Area current\naccount with U.S.\n+ 119\n+ 115\nU.S. troops in rest of Sterling\nAroa\n+ 194\n+ 166\nSpecial gold from South Africa\nfor repatriction of South\nAfrican Government storling\nsecurities\n+ 15\n+ 167\nOther gold and dollar movements\n(not)\n+ 146\n+ 39\nIncrease in U.K.:s quick assots\n+ 305\n+ 330\nRegraded Unclassified\nIN\nTHE ADEQUACY OF THE UNITED KINODOE'S QUICK RESERVES.\n16. Having regard to the size of the quick liabilities, it 1a obvious\non by criterion that the quick reserves are seriously inadequate. But there\nat also certain other considerations which are, in greater or less degree,\nwant to this question.\n(a) The liabilities are liabilities solely of the United Kingdom and\nx of any other part of the Sterling Area. But the quick assets cannot be\ngarded as wholly available for the United Kingdom's requirements. A large\npurt of them has been acquired under the pooling arrangement referred to\nabove by which all parts of the Sterling Area (other than some of the\ntesporary adherents) sell to the United Kingdom for sterling any dollars\nwhich they earn in excess of their own small direct requirements. These\narrangements carry with them an implied obligation on the U.K., no far as\nis possible, to provide dollars for other parts of the Sterling Area, which\nhave retained no significant dollar holdings of their own, when subsoquently\nthey have a logitimate need for them.\n(b) The quick liabilities are the more burdensome because of the\ndisposal of many of the more saleable capital assets, which otherwise would\nhave served as a second line of defence. As the table above shows, the\ntotal loss of assets and increase of liabilities no far suffered by the\nUnited Kingdom during the war has amounted to 10+ billion dollars. In this\nrespect our position is unique amongst the United Nations. In fact more than\n90 per cont of this loss has accrued to the advantage of other members of\nthe United Nations, many of whom have improved their overseas position during\nthe war. The United Kinpdom alone has been expected to mortgage the future\non a large scale by incurring overseas liabilities. During the earlier\nperiod of the war, expenditure in North America was the main cause of the\ndeterioration of the United Kingdom's financial position. More recently\nher responsibility for mooting the groater part of the local cash expenditures\nin the whole area of hostilities from Tunis to Burna has been the main\ninfluence. At the present time the United Kingdom's local cash expenditure\nin Eypt, the Middlo East and India, over and above the supplies shipped\nacross the seas, is amounting to somo $2/ billion annually, the greator\npart of which has to be borrowed from the countries concerned. Between the\nbeginning of the war and the und of 1943, for example, it is estimated that\nwe shall have incurred an indebtodness to India of some $3,750 million, of\nwhich some $1,200 million will have been used to discharge her Government\nstorling debt and the balance will remain owing to her,\n(c) In judging whether, in spite of the above considerations, the\nUnited Kingdom is nevertholoss accumulating unnecessarily large quick\nreserves 1t is rolevant to consider the relationship botreen the United\nKingdom's resources as shown above and those of other members of the United\nNations. For example, the gold and dollar reserves of the U.S.S.R., which\nare not published, are estimated by the United States Treasury at $1,600\nmillion and those of China at $750 million. The corresponding figures of\nFrance can be put at $2,875 million, of the Nethorlands at $690 million and\nBelgium at $870 million. None of these countrics have any significant\namount of overscas quick liabilities against those reserves. The figures\nfor the United Kingdom (which in respect of dollars include the whole of\nthe Storling Ares) are at present, as shown above, about 11,000 million\nwith storling liabilition seven times this amount against them. The not\ngold reserves of the United States (1.e. after doducting all foreign balances\nheld in United States) are about eighteen times the gross reserves of the\nUnited Kingdom (1.e. before deducting the storling foreign balances held in\nUnited Kingdom which are soven times as great as the reserves).\n17. If, therofore, in spite of a progressive deterioration in her\nnet position, the United Kingdom 1s in a position, as we hope, to increase\nher quick reserves above the present figure by retaining certain liquid\nresources earnod outside our balance of trado with the United States instead\nof applying them forthwith to a reduction of hor liabilities, this cannot\nbe Judgod, in the light of the above considerations, to be a matter for\ncriticism or open to legitimate objection.\n14th September, 1943.\nRegraded lassified\nUNITED KINGDOM TREASURY DELEGATION\nBOX 680\nBENJAMIN FRANKLIN STATION\nWASHINGTON, D. c.\nTELEPHONE EXECUTIVE sozo\nSe tember 22, 1943\nThe Honourable Henry J.\nMorgenthau Jr.\nSecretary of the Treasury\nWashington 25, D. C.\nDear Mr. Secretary:\nThank you for your letter of September\n20th enclosing a letter to Sir Kingsley Food acknowledg-\ning receipt of his two letters of Se, tember 3, 1943. I\nam forwarding these to London, as I assume this would be\nyour wish despite the sad news we have had in the mean-\ntime of Sir Kingsley hood's death.\nSincerely yours\nS.D. Waley\nSir David Waley\nSDW:bj\nRegraded Unclassified\n277\nTREASURY DEPARTMENT\nPROCUREMENT DIVISION\nOFFICE OF THE DIRECTOR\nWASHINGTON\nSeptember 20, 1943\nMEMORANDUM TO THE SECRETARY:\nSupplementing report to you of September 13,\n1943, the purchases against the African Program from\nSeptember 13, 1943, to September 19, 1943, totaled\n$1,796,865.98, or a total of purchases for the program\nthus far of $61,755,847.44.\nAttached is report giving status of shipping\nagainst these purchases.\nis\nClif for .. Mack\nDirector of Procurement\nSECRET\nPORVICTORY\nBUY\nUNITED\nSTATES\npersons\nBONDS\nAND\nSTAMPS\n(37861)\nRegraded Unclassified\n278\nSHIPPING REPORT AS OF SEPTEMBER 18, 1943\nTonnage\nTonnage\nTonnage\nTonnage\nShipped to Date\nUnder Load\nOn Hand At Port\nEn Route\nCommodity\nFrom U. S. A.\nAt Port\nWaiting Vessels\nTo Port\nAgric. Mach, & Implements\n1776.38\n172.82\n381.94\n136.32\nAutomotive Eqpt. & Parts\n801.17\n121.94\n141.55\nBatteries\n120.77\n.25\n18.5\n7.46\nDearings\n2.21\n.23\n.63\n.29\nBrass & Bronze\n288.4\n2.5\n87.6\nBrushes & Brooms\n.8\n.15\nBldg. Hdw. & Material\n310.07\n76.82\n268.51\n22.94\nChemicals\n17943.14\n1491.98\n6781.11\n4107.27\nClothing, Notions & Textiles\n16602.5\n16.73\n3095.86\n4467.51\nConstruction Machinery\n.44\nCopper in Various Forms\n336.3\n98.18\n10.57\nElec. Eqpt. & Supplies\n74.44\n22.76\n7.45\n36.97\nExplosives\n14.15\nFerro-Alloys\n73.88\n11.32\n.53\nFood & Food Products\n6032.\nFurniture & Office Eqpt.\n.11\n.49\n.01\n1.71\nGlass\n194.82\n95.12\n7.66\n690.44\nGraphite Products\n92.66\n.32\n13.23\nHand & Cutting Tools\n995.64\n61.04\n381.19\n369.26\nIndustrial Machinery\n49.85\n73.2\n106.14\n243.52\nIron\n145.\n810.\n222.65\n1028.35\nJute Bags\n857.47\n535.\nLead & Lead Alloys\n73.18\n102.5\nMedical Supplies\n56.12\n.68\n5.02\n.3\nNon-Ferrous Metals, Other\n434.02\n20.84\n.81\nPaper & Paper Products\n4586.16\n1605.09\n1948.39\n1939.12\nRope & Twine\n247.7\n34.75\n14.\n12.\nRubber\n778.48\n20.\n319.79\n434.47\nRegraded Unclassified\n279\n- 2 -\nTonnage\nTonnage\nTonnage\nTonnage\nShipped to Date\nUnder Load\nOn Hand At Port\nEnroute\nCommodity\nFrom U. S. A.\nAt Fort\nWaiting Vessels\nTo Port\nShoes & Boots\n315.68\n5.34\n539.38\n1465.2\nSteel, Alloy & Carbon\n7733.93\n225.36\n7392.58\n5831.47\nSteel, Pipe & Tubing\n251.47\n129.54\n313.72\nTin Plate\n845.\n357.55\n204.95\n2431.05\nZinc\n27.96\n27.29\nTotals\n62,033.5\n5112.46\n22,831.88\n23,712.27\nRegraded Unclassified\n280\n25\nSeptember 20, 1943.\nDear Mr. Payeers\nPer the Becretary, I - acknovledging\nyour letter of September 19, which enclosed\na copy of a report vysa the progress of the\nSeviet Protecol. Mr. Margenthan is glad to\nhave this material and will read it with in-\nterest.\nSincerely yours,\n(Signed) H. S. Klotz\n1. S. Nots,\nPrivate Secretary.\nMomerable B. A. Payser,\nMrester, Foreign Division,\nVar Prodmation Board,\nVackington, D. c.\nRegraded Unclassified\nWAR PRODUCTION BOARD\n281\nWASHINGTON, D. C.\nIN REPLY REFER TO:\nSeptember 17, 1943\nMr. Henry Morgenthau\nRoom 280\nTreasury Department\nWashington, D. C.\nDear Mr. Morgenthau:\nI am enclosing a copy of the report upon\nthe progress of the Soviet Protocol. This is the\nsecond report during the Third Protocol Period.\nSincerely yours,\nE./A. Peyser\nDirector, Foreign Division\nAttachment\nPYICTORY\nBUY\nENITED\nSTATES\nWAR\nBONDS\nAND\nSTAMPS\nRegraded Unclassified\n282\nWAR PRODUCTION BOARD\nWASHINGTON, D. C.\nSeptember 15, 1943\nIN REPLY REFER TO:\nMy dear Mr. President:\nThe accompanying tabulation shows the progress made during\nAugust, and during the two months ending August 31, towards fulfil-\nment of Third Protocol materials and equipment production programs\nfor the Union of Soviet Socialist Republics.\nPractically all raw materials programs are now on a satis-\nfactory basis. Some adjustments in steel schedules remain to be made\nbecause of & 210,000 S.T. reduction in the Soviet request (1.e. from\n710,000 S.T. to 500,000 S.T.), and allocations of & fev items, primar-\nily chemicals and farro-alloys, are being held up pending elimination\nof excessive stockpiles; but details relative to other programs have\nbeen fully worked out and production in accordance with terms of Pro-\ntocol offers 1e under way,\nIn contrast, much remains to be done before industrial equip-\nment programs will be completely rounded out. Although orders for a\nlarge part (approximately two-thirds) of the industrial equipment called\nfor by Third Protocol offers were accepted and put into production in\nadvance of the opening of the Third Protocol period, there remained as\nof July 1, 1943 important blocks of orders still to be placed in the\ncase of & number of categories. To date, many of these orders have not\nbeen forwarded to the War Production Board. In consequence, appreciable\nfractions of programs for tool tips and blanks, small cutting tools,\nmeasuring tools, electric furnaces, rolling mill equipment, wire draw-\ning equipment, cranes, compressors, pumps, equipment for blast furnaces,\nvalves and fittings, pnsumatic tools, and control instruments and test-\ning machines have not yet been scheduled or even requisitioned. Be-\ncause of tight supply conditions, or the long-run nature of the equip-\nment involved, several months are required after placement of contracts\nfor shipment of items such as these to begin. The result is that &\nserious obstacle has been placed in the way of achievement of promised\ngoals in the case of these categories.\nThe principal reason for holding back these requisitions has\nbeen concern over the possibility that industrial equipment stockpiles\nwill get out of hand. As of July 1, stocks of industrial equipment are\nestimated to have totaled approximately 180,000 short tons shipping\nweight. New production offered in the Third Protocol is estimated at\nabout 510,000 tons. Thus, during the twelve month period there should\nVICTORY\nbe available for shipment to the USSR about 690,000 short tone of\nBUY\nVRITED\nSTATES\nWAR\nBONDE\n-\nSTAMPS\n-an\nRegraded Unclassified\n283\nindustrial equipment. Soviet representatives have stated that they ex-\npect liftings to average around 50,000 short tone per month, a rate\nwhich would not only prevent a further growth of stocks but which would\nbring stocks down to 100,000 short tone or less, that is, to a reason-\nably satisfactory level. However, past performance has given cause to\ndoubt that exports will take place at this rate. During the Second Pro-\ntoool period the monthly average was less than 20,000 short tons ship-\nping weight. In June and July, the average increased to slightly more\nthan 30,000 short tons, and in August the total came to approximately\n75,000 short tons. This great acceleration was brought about, however,\nsolely through petroleum refinery equipment being granted priority over\npractically all other export items. Of a total of some 135,000 short\ntone of industrial equipment lifted in the June-August period, approxi-\nmately 75,000 tons consisted of petroleum refinery items. During July\nand August, stocks of other equipment in warehouses and depots alone\nincreased by more than 50,000 short tons. While it seems likely that\nwith the completion of the petroleum refinery program, shipment of other\nequipment will greatly increase, it is questionable whether the increase\nwill be sufficient to prevent stocks from growing appreciably during\nthe Third Protocol period.\nIt 1e noteworthy that in the case of most other items included\nin the War Production Board Soviet Program the stocks situation now seeme\nto be reasonably well in hand. Through diversions and increased liftings,\nsteel stocks have been cut to less than 400,000 short tone. Non-ferrous\nmetale have been reduced to the minimum required for pipe lines, and,\nthrough control of allocations, chemicals are being held to a reasonable\nlevel. Cable stocks have increased to some extent, but it is anticipated\nthat recently insugurated reductions in schedules will shortly result in\nproduction falling behind exports with a consequent lowering of stock-\npiles.\nRespectfully yours,\n/s/\nDonald M. Nelson\nThe President\nThe White House\nWashington, D. C.\nAttachment\nRegraded Unclassified\nSECRET\nDATE of - EDIPANT - THE increased all or - \", uni\nIndents - Sales - -\nDELIVERY Data - = and\nhe\nItem\nUnit\njed.\nMate Available\nKale Available\nPercent of\nMetto of\nBalance to be\nComments\ntarel\nProtect\net Kill in U.S.A.\net Mill to C.C.A.\n3rd Proto\nActual\nProfessor\nItem\nProduction\nAng. 1, 19k3 -\nJuly 1, 1943 -\nProgram\nSeliveries to\n- of Sept. 1, 1963\nTo.\nProgram\n- 31. 1943\nAng. 31. 1943\nCompleted\nProt.Sched.\nTo Complete\n- of\n(Prot.Sched.-100)\n3rd Protocol\nSept. 1, 1943\nProd. Program\nMETALS\nThe fairt Protocol\nand has tem formally Increased\nfrom 35,750 S.T. to 39,180 1.2. la\neMities, - effort Le being male\n.\n(Inpt - Patricated)\nS.T.\n39,120\n6,328\n17,600\nR\n1St\n26,570\nto - by 2,2%0 s.r. the earthly\ncalled for by this remit-\nmail. Deliveries to fale\n7,290 S.T. primary 1agst, 2,74 1.7.\nsegundary lagal, and 2,576 I.T.\nfabricated almism,\n%\nFinal\n&\nPLE Fishel\n8.7.\n3,600\n150\nsoo\n17\n100\n3,000\ninpart chipments - to\ncompanate for July\nA total of 600 I.f. of nichal la\n.\nFind la Food Serve\n1.7.\nmossi scrap has has affored, trail\n-\nR\n50\n-\nI\n(50\nthe V.I.S.B. - not gst inficated\nthat is Sestres se Sale 11. The\n- nate available la depail -\nordered for experiental persons,\nContated sichal inliveries la date\ne\nVichal is Steel and Other\nI.T.\n2,100\nconsist of as 1.1. la stati; as 1,7.\n185\nNOT\n17\n100\nProtects\n1,993\nis sictrow size and wirig: 66 1.7.\nLa musro-mickal string - 10 I.f.\nla sictross squares,\n,\n1,9.\n4,000\n335\n6ra\n17\n100\n3,330\nBiostrulytie - figure refer\nto copper castalant is nrima -\nterials requiring regular with are\n€\nComer, Bestralytie\n1,7.\n(171,400)\n(6,709)\nbeing applied the De-\n(13,854)\n(11)\n(65)\n(107,532)\nliveries is date taclude 4,372 4, I.f.\nrestatant is exper bace allays;\n1,17% s.f. contalad is - pois\nand tubent 95 S.T. contained is 11-\nmotal and 4,379 N.T. outstand is\nalre will products,\nSECRET\n- - - - M\n284\nRegraded Unclassified\nSECRET\nSuccessive Fundale laty - M\nTree\nTax\nyi\nTale available\nRade\nPercent of\nof\nto be\ntoral\net 9433 in C.B.A.\nat min Lr, C.S.A.\n374 From\nattual\nProduced\nItem\nProduction\nAdd 1, 1943 - -\nJuly 1, 1943 -\nProgram\nDeliverier to\n-- of Test. 1, 1943\nTo.\nProgram\n31, 4353\n- 34, 1943\nCompleted\nTs Complete\n-- of\n3rd Protocol\nlest. 1, 1943\nFros, Program\nexpes (Contimed)\nStates of copper tase alleys have\nbeen rebuted to & reasonable write\n7\n3am Alleys\n1,1,\n107.520\n5,993\n5,134\n#\n4\nN,M\nthe level through Increased un-\nlage: production is therefore\ncurrently beling memberated.\n.\nExperies\n1.7.\n4,03P\n336\n672\n17\n100\n3,30\n,\nline\nS.T.\n13,40\n1,120\n2,2%0\n17\n100\n11,700\nStates have been referst to -\n11\nCooser Soote and Tabes\n1.7.\n15,000\nable working levels and protection\nns\n1,17%\n.\nky\n13,6%\nis currently being accularated.\nthe U.S.B.R. has ast -\nquality production et the full rate\ncalled for ky the Protocal.\nE\nSpecial Aller\nS.T.\n26)\nOnly very small qualities of special\n,\n11\n.\nK\nVires\n258\nme-ferrous aller vires have been\nrequisitional be date,\nIF\nWire\n1.7.\n538\n11\n107\n20\nin\n431\nThe production program above is for\n9%\nCotal\nS.T.\n80.5\n21\nto\nthe first half of the Protocol period\nis\n157\n40.5\nonly: the ratto of actual Seliveries\nto the Protocol schedule - there-\nfare, been adjusted to taxe this Le\nin account.\nTotal Retain\n(Resinting Them 6,\n1.1.\n189,779.5\n15,124\n77.700\n15\n..\nCommer, Electrolytic)\n162,294.5\nFERIO-ALLOTS\nThe U.S. has offered 4 resir 18\n1\"\nPerrontlicio\n1.1.\n-\no\nc\n1.1. of farrosilican ant - 1.1.\n-\n-\n-\nif ferrochrose per anth, but by\nagreement this offer la to because\n11\nE.T.\n-\no\no\neffective only shes statio tall an\n-\n-\n-\nU.S.A.R. account an retured \" two\nnonths' requirements. AL present,\n*tocks Total more than fine\nTotal Ferra-allige\n.\no\ne\nregiremente ent as lifting are\n1\n-\n-\ncurrently taking place, is couse-\nsurve, no allocation von rate is\nlagat and - la planned for the\nImpliate future.\nSECRET\n- - being M\n28\n8\nRegraded-Unclassified\nSECRET\n- - M\n-\nItem\nOut\n11\nRate Available\nRade valiable\nPercess of\nRatio of\nPrimate le be\ntotal\nPretual\nat will La U.S.A.\nCommits\net -111 la P.S.A.\n3rd. Prat.\nActual\nProduct\nItem\nProbaction\nAug. 1, 1943\nvary 1, 19-3 -\nProgres\nSelivarias to\nTax\n-- of lest. 1, 199\nthe\nArea n. 19/3\n- 11, 1543\nComleted\nto Comiste\n-- of\n3rd Protocol\nSect., 1. 1943\nPred. Program\nACLOT TTEXL\n16\nPolicied Drill Rate\n»\nne food\nS.T.\n%\n#\n17\n14\n106\n19\no\nOther Aller\n1.7.\nis\n9\n11\n7\n142\nyou\n17\nne feel Stast\n1,7.\n1,180\nN33\n916\nR\n118\n3,9%\n1°\nTgel Risel\n3\nAlley n?\n1,7,\n672\n47\n115\n17\n100\n557\ne\nAlley DN\n1.7.\nST2\n37\nor\n15\n16\n58%\nD\nOther Allego\nI.T.\n1.30\nyes\n1,02%\n30\n17€\n.\nDie Viscis\nS.T.\n2,358\n1,166\no\ne\no\no\n1,480\n19\nCold Fistehel lare\n1.7.\n10,0%\nEM\nla adjusting Third Protosal profis-\n1,765\n16\ngt\n9,133\nUse programs ** shipping mossibili-\nties, the C.B.B.A. selected . total\nR\n13. Aller here - Billets\n1.7.\n67,569\n1,905\nof only 300,000 s.r. of steel -\n7,056\n10\n99\n60,523\nben and alleg) la be product - the\naccount lasted of the 710,000 S.T.\n:\nStatement Start\noffered by the U.S. A detailed no-\n&\nTherte\nS.T.\n2,872\n30\n30\n1\n5\nvorking of the stest program to -\n7,64\n,\nStrie\nS.T.\n3%\n265\n421\nfleet this relection to currently\n125\n735\ne\n3are\nS.T.\n(es Immed\n756\nin\n41\nin where, Pending completion of\n5\n26\n715\nthis, - - evaluation of -\ngross made toward falfilment of the\n-\nWire\nriesi commitment La pensible. m\n&\nBell Vire\n1.7.\n6,563\n275\nE\n1\na\ngross against the all program\n3\nStrie\n1,f.\n6,119\nè\n97\n113\nla stows, however, in order is 1a-\n-\ne\nOther Alleg\n1.7.\n&\n(113 Basees)\n75\ndinate La . general way the trand\n191\n.\n-\n(191 incose)\nof production.\nF\nSteel Alley The\nà\n185 RL.\nS.T.\n99%\n0\n0\n0\no\n,\nL/S Chinger\n1.7.\n1,625\n99º\n793\n1,5%\nIf\n104\n0-8\nCertin - Floe Siven\nS.T.\no\n2\n1,079\n5\n,\n1\n1.1. Nail Bearting Tabee\ns.r.\n5.376\n(9 Income)\no\ne\n0\ne\n5,376\nH\nSignature Steel Wire\ns.r.\no\n69\n764\n-\n-\n(MA Income)\nX\nNertal Allay Vira\n1,7,\no\n702\n261\n-\n-\n(26) Invoice)\nTotal Aller Steel\n1.7.\n114,603\n7,469\n14,322\n12\n71\n100,251\nSECRET\n- - - - M\n286\nRegraded Unclassified\nSECRET\n- - - -\nPro\nItem\nThalk\nIn\nKate Available\nHinte Available\nPercent of\nRette of\nPalance to be\nCommente\ntoest\nProtocol\net =111 in 7.5.A.\nat La 7.3.A.\nVa Proto\nactual\nProtoced\nItem\nProtaction\n- L. 1943 -\nany 1, 1343 -\nProgram\nDeliveries to\n- of Sent, 1, 1543\n1..\nProgram\nAve. 9, 1543\n402. 3., 1943\nCompleted\nPrgt. Sched.\nTo Complete\nen of\n3rd. Protocol\nSept. 1, 13%3\nProt. Program\nCARROT STREL\nins-f\nNalla, Accossories missing Other\nS.T.\n100,770\n11,837\n105,049\n11\nS\n375,221\nBallway Faterial\n10\nCouser Class Strts (Pressal)\nN.T.\n11,120\no\no\no\ne\n11,170\n16\nPints Carbon Tool Stand and\n1.7.\n5,81\n522\n1,089\n16\n5.\n5,715\n. 198\nDrill Red\nSex alley Steal for\n199\nPlate Carbos Ballet Care\n1.7.\n11,200\n1,970\n4,567\n41\nZ\n6,633\n/\nTimelate\n1.7.\n60,000\n5,776\n6,417\n11\nis\n53,383\nOther Cerbon Steal\ns...\n36,000\n3,7%\n10,157\nK\n165\n25,03\nTotal Carbon Steel\n1,7.\n50.397\n11,000\n67,509\n17\n71\n477.000\nCHEMICALS\nV6\nPhenel\nU.T.\n12,000\n750\n750\n5\n35\n11,750\n18\nEthylene Giyesl\n8.7.\n3,360\no\no\no\nc\n3,360\nby\nNethers3\nS.T.\n6,720\no\no\no\no\n6,770\nM\nProtrosize\n3.7.\n6,720\ne\ne\no\no\n6,770\nDeceise et excessive stacks, alle-\nGIAL\nGiycerine\n1.7.\n5,720\n1,657\n1,857\nM\nus\n4,863\nnations of shemicals are still -\nlag hald to . states La all -\nexcept glycerine, causile soda and\n6141\nCasatic Soda\n1,7.\n40,320\n9,668\n10,179\n*\n153\n29,051\nethy) aleobal.\n1%\nSthyl Alcohol\n3,1,\n107,520\n16,114\n23,0%\n27\n179\n13,664\n6185\nAcetane\n1.2.\n6,720\n5\n657\n10\n59\n5,063\n6ta\nOther Chestrais\ns.r.\n17,096\n452\n75%\n6\n35\n11,150\nTotal Chestrels\n1.7.\n302,176\n23,477\n96,20\n19\n112\n163,889\nSECRET\n- - - Colop M\n287\nRegraded Unclassified\nSECRET\nInsured Passacia - Imp le\nPro-\nDate\nEast\n5\nFair evailable\nLade Available\nPercent of\ntotal\nRatto of\net 1111 la U.S.A.\nTalance La be\nat R:11 Le U.S.A.\nItem\ntrd. Prot.\nCommete\nactual\nProtuction\n4vg. 1, 1943\nJuly 1, 1941-\nProduced\nPrime\n/\nJuliveries to\nFragra\n- S1, 1363\nMid. 31, 1943\nComisted\n- of Sept. 1, 1943\nPrat.Schei,\n% Complete\n- of\n(Pres,Sched.=100)\n3rd Protocol\nSeel, 1, 1313\nProt. Program\nMARI ? 47 REMARKS CARLE\n1.\nMarine Cakle\nD.\n1,200\n43\n133\n1:\n65\n1,067\nDeliveries of et\ncable shows are still apainst -\ntracts carried over fre the Second\nProtocol period. Angust skipmente\nof minurise cable marked virtual\ncompletion of . Trans-Compter\n#\nCalls\nd.\n600\n119\n115\n20\nproject which - give under vap\n118\nMI\nis Foresber, 1942. Completion of\nuse wajest, which case le more\nthe $1,500,000 is value sal with\ninvolved rach naterial end squis-\nmest Sesides cable, Le experied to\nTotal Marine and\nDL\n1,800\n162\n252\nfacilitate greatly see of the\n1%\nCable\ne\n1,54\nSamptan Tra in the movement if\nproducts late the 0.0.3.1.\nM/D an RELATED CARER\n7%\nTorglated Cable end Vin\nS.T.\n21,516\n1,7%\n(Conner Contact)\n4,303\n&\nTM\n17,713\nPower and related cable probaction\n7%\nSomer Cable and Wire\n9.7.\n70,000\na\n6\nhas been est considerably below the\nConser Content)\n-\n-\n19,994\nProtocol rate because of\nenstoard stocks (1.0. approximately\n60,000 1,7, gress weight \" if\nTotal Fover end Related\nS.T.\n41,516\n1,756\n1,309\n10\nAugust 1.1\nSable\n5)\n17,707\nHISCOLLATION PATERIALS use\n1\nThe entire that filser countract\n3\nthert Filer\nS.T.\n1,000\nI\n-\n53\n18 covered by contracts carried over\n112\nN71\nfrom the Second Prisol period.\nProsect schedules call for the -\nsistion of these by December,\n=\nPartment Pener\n1,7.\n1,6%\no\n:\n0\ne\n1,680\nRIA\nCondater Person\n5,7,\n146\no\n6\no\ne\nBy *emisitions have been submitted\n146\nto date for paper probate,\n19\nCigarette Pener\n1.7.\n3%\na\n=\n0\n9\n13E\nThe offer of \"other materials is\n. mine offer and la la he used\n,\nOther Materials and Their\n. 5,000,000\n-\nPropects\n-\nsaly to cover regula.\n-\n-\nOrders to date total only . Trae-\ntion of #5,000,000 and deliveries\nagainst there have been slight -\ncause of load factors,\nSECRET\n- - - Expirap M\n2\nRegraded Unclassified\nSECRET\n- - Imp -\nhe\ntes\nDate\n3rd\nNate Available\nRate Available\nPercent of\nBahin of\ntaes?\nProtocal\nInlance to be\nat la P.S.A.\nat Mill - P.S.A.\nCommate\n3rd Prot.\nActual\nItem\nProtection\nProtuced\n1, 1963 -\nitly 1, 1963 -\nProgram\nDeliveries le\nTo.\nProgram\nhas 2. 1943\n- of Seut, 1, 1993\n400 31, 1943\nPresisted\nProt,Schei,\nTo Complete\n- of\n3rd Protocol\nSent. 1, 1943\nProt. Program\nINDUSTRIAL AND RELATED EXPIRYENT\n1%\nConsted Carbita Time and\n$\n3,000,000\n182,042\n51,917\nis\na\nMarks\n2,544,00)\nRegulations for à Large part of the\n199\nSmill Delting Tools\na\n15,000,000\n1,106,655\noffered quantities of these Items\n1,756,250\n12\n71\n13,763,509\nhave not pet been forwarded se the\n1.1.3.\n150\nFermaring Tosts\na\n3,000,000\n23,466\n201,617\n7\nthe\n2,799,383\nEyes\nAbrosive Profects\n.\n4,000,000\n491,526\n674,896\n17\n130\n3,325,104\nAugust machine teal delivery date\na\nRechine Tosls\na 120,000,000\n5,713,200\nare based - Interplete reports\n11,209,250\nis\n106\n98,590,750\nthe fobricators and will probably\nbe witject to - appreciable supvent\nrevision when All information is\nreselved.\nEt\nRectrie Pursices\nI 12,000,000\n05,904\nRegulations for . large part of\n99°,760\n.\n47\n11,007.200\nthe electric fersaces offered have\nand yes been forwarial La the V.P.A.\nor the $16,000,000 affered, the\nV.P.S. expected $11,000,000 to be\nused to cover . rail mill, It has\nbeen facidad by the O.L.L.A., -\nmar, that mistellaneous rolling\nstill seutneent should be mistituted\nfor the rail sill, to date to -\n64a\nValling mills and\na 16,000,000\n9,729\n$9,645\nper of eshetituta equipment has\n1\n6\n15,910,355\nlass forwarded to the V.P.I. Detil\nsuch . program has loss Curvarded\nand restruel from the standpolat of\nproduction fassibility, and will\nrequisitions are claimat and -\ntracte production cashet\nlegis. Progress spinst this offer,\ntherefore, has boan, and will incre-\nwilly costime to be, slow,\nEsa\nProcess, forms, Family\n- 30,000,000\n1,565,100\n2,886,500\n10\n1 1 5 I\n- Related Instruct\n\"\n27,113,500\nprolisinary reports and will problem\nby be encloyed to - approciable\nvard revision.\nSECRET\n- - - bing M\n28\nRegraded?Unclassifi\nSECRET\n- Possible - Culemps -\nPro-\nItem\nDait\n3rd\nMate Available\nTrie desidable\nPriment of\nloss)\nMatto of\nProtent\nat MILL in U.S.A.\nbalance to the\nat HILL In U.S.A.\n3rd Prot.\nEsemente\nItem\nActual\nProductive\ning. 1, 1963 -\nJuly 1, 1943 -\nProtuces\nThe\nProgram\nDeliveries 1d\nMass\nAng. n, 1943\n- 3, 1943\nas of lest. 1, 1945\nTo Comlete\n-- of\n3rd Protocal\nSest, 1, 1943\nProt. Program\nAND RELATED\n(\"estionet)\nRequisitions against the Third Pro-\n44\nWire Prestage Internet\n. 2,000,000\n,\nlocal affer lass and pt less for-\no\no\nP\n2,000,000\nvarded to the 123. It les less\ntherefore, se gl -\ndactime under w/.\nis\nTarlour Intestrial\n$ 170,000,000\n13,300,362\n54,19,113\n411 requisitiess for Items in this\n20\nus\n95,565.007\nestagory have been claired and -\ntracts placed for - lies, he\nfarties is considered antisfactory.\n7a - Thirt Protossi requisitions\n56\nControl Inst. est Testing\nI\n1,700,000\n31,969\n304,653\nhave less forverted to Like V.P.3.\n14\n106\n1,395,997\n4a date, A large part of the pre-\none las, therefore, miss per been\npites under -\n69-70\nAnti-Priction levings\nI 15,000,000\n969,691\n1,826,867\n12\nn\n13,173,133\nThe Block Signal System offered to\nin\nFloor Signal System\n$ 14,591,500\n15,376\n28,016\ncovered by one order. Substantial\ne\no\n13,563,48\ndelivaries against this are not -\nsected to begin will awiy 1544.\nThe entire power program offered Le\nnow under requisities. Nost -\ntracts here Seen placed and major\nto\nPower\nI 15,000,000\n6,577,950\n14,078,974\n19\nItems have been worked into -\n112\n60,923,076\nfaction schedules, Orders carried\nover from the Second Protocol perial\nan expected to be completed La the\nnext two - deliveries\nspinist seu orders are schedniel to\nbegin 1. December,\nTotal Infustrial - Related\n$ 131,299,500\n94,376,666\n69,135,649\n16\n$\n362,155,851\nSECRET\n- Public - being M\n2\nRegraded 3 Unclassity\nSECRET\n- - 1 las\nPra-\nItm\nUnit\n3rd\nSale Available\nRade Available\nPercent of\nLetio of\ntocal\nProtucal\nValance 11 To\nat mill in U.S.A.\nCommate\nat RUI is U.S.A.\nlet Prot.\nItem\nActual\nProductice\nProtoral\nAve. 1, 1943 -\nJuly 1. 1)43 - -\nProgram\nto\nYo,\nPrigram\nAng. 31. 1943\nor of Sept. 1, 1943\nAug. a. 1543\nCompleted\nPrit,Schet,\nTo Complete\nas of\n(Prot.Schet.=100)\n3rd Protocol\nSept. 1. 1943\nProt. Program\nMISCULLATION LOWER ITMS\n67A\nAbrasive árais\n1.1.\n4,000\n170\n967\n>\n141\n3,033\n6KA\nGrankite Electroles\n1.7.\n5,757\n680\n1,014\nis\n106\n4,743\n6ml\nOther Draphite Goods\nS.T.\n1,691\n19?\nZip\n1%\n52\n1,450\n6ac\nGranhite Powder\nS.T.\n1,120\n185\n316\n28\n165\nRA\n74\nTires, Tabes, Other Butter\ns.r.\n40,370\n1,5%\n7,852\n20\n115\nProtucts (Rubber Content)\nyour\n4\nRetailic Cloth and Bereez\n,\n1,000,000\n25,463\nTery few Thirt Protocol requisitions\n12,85\n13\n76\n467,075\nfor metallie cloth and screen have\nM yet been So the V.P.B.\nThe C.S. has offered to empoly -\n\" $25,000,000 of Beargeacy Aquip-\nsent provided the Surist Generament\ncertifies Lise need for particular\ne\nEndoment\n. 75,000,000\nItems totaling this - and -\nwided specifications are moneptable\nto the V.P.S. lo far only . fee -\nmisitions have been placed under\nthis category. Fecause of load tm-\ntara, as deliveries Look place\nagainst there is August.\nVar Production Poard\nForeign Division\nTexter est Analysis Branch\n14, 1943\nSECRET\nI I I I 3\n291\nRegraded Unclassi\n292\nMFG\nCelcutta\nThis telegram must bE\nparaphresed before being\nDated September 20, 1943\ncomminicated to snyone\nother than a Governmentel\nRec'd 3:20 p.m.\nagency (BR)\nSecretary of State,\nWashington.\nPRIORITY.\n1210, September 20, 3 p.m.\nFOR SECRETARY OF THE TREASURY FROM ADLER\nOnE. Arrived Calcutta September .18. Used\nshort time in Bombay to get cross section of\nIndian unofficial opinion on monetory situation\nand tc study bullion market.\nTwo. Sending summary general observations\nand conclusions in separate cable. Material col-\nlected En-route by pouch. Shall finish full\nreport by the End of WEEK and also forward by\npouch. Expect to return Chungking on 27th.\nThree. US Army medical Examination in\nCalcutto gives me cleen bill of health.\nPATTON\nMRM\nRegraded Unclassified\n293\nNOT TO BC RETRANSMITTED\nCOPY NO.\n13\nBRITISH MOST SECRET\nU.S. SECRET\nOPTEL NO. 310\nInformation received up to ton A.M. 20th Soptember,\n1. NAVAL\nLast night our Constal forces off the Dutch Const torpodood\na large ship and sot two trawlers on fire. A notor gun boat was\ndamaged and had two casualties. One of H.M. Frigatos was torpedood\ncarly this norning while oscorting nn outward Convoy South West of\nIceland (C).\n2. MILITARY\nITALY\nTo 1600Z 18th. Fifth Army. The Salient on the Rivor Sele\nhas now been consolidated and our advance is continuing North\nEastwards. A slight advance has boon nade North of Salerno, lfuch\nenemy novement Northwards from Battipaglin suggests that ho is\nthinning out in the Southorn sector of the front. EighthArmy.\nSatisfactory progress continues our loading troops advancing\nNorthwards on Potenza are noaring Corleto and firm contact has been\nestablished with the Fifth Army. Taranto area. Our troops are now\nin possession of Gioja whenco the onony withdrow his rearguard on\n17th. Tatrols have reached Trani and Potonza.\nRUSSIA.\nSee D.D.M.I.'s tologram to Ililitory Attacho. Russians are\nstendily approaching the Dniopor along the greater part of its longth\nand it is becoming increasingly likely that the Gormans will withdraw\nto the West bank botwoon Orsha and Zaporozho. This is first good\ndefonce lino to which they can now retire and they will doubtless\ntry to stand here. Further South they will probably try to hold the\nlino Zaporozho - Melitopol to protoct Crinoa although country hore\nunsuitable for defence.\n3. AIR OPERATIONS\nWESTERN FRONT\n19th. Snall scalo attncks by oscorted Hodium and Fightor\nbonbers were nade on airfields in Northorn France and low countries.\nEnony casualties in the air 6, o, 6 ours 3 Spitfiros.\nITALY\n17th/18th. Wellingtons dropped 119 tons on an airfield in\nRône area. 1 missing. 84 Modium nnd Light bombors attacked Torro\nAnnunziata and conmunications in the battle area.\n18th. Heavy Bonbers dropped 125 tons on Vitorbo airfield\nand 123 Medium Bonbers attacked two other nirfiolds noar Rono.\nMirfiolds noar Foggia wore attacked by Lightnings of which three are\nmissing. Dodocanose 18th. Eneny aircraft nade three attacks on\nKos Island destroying three Transport aircraft on the ground. Fivo\nJU 88 and two III. 109 were destroyed by Spitfiro of vi.ich two are\nmissing.\nCORRECTION TO OPTEL 309\nFor \"(5 corrupt groups)\" in third line from botton of page\nroad \"dropped and 57\".\nRegraded Unclassified"
}