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Volume 714, March 25 – March 27, 1944
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Volume 714, March 25 – March 27, 1944
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Henry Morgenthau, Jr. Papers
Diaries of Henry Morgenthau, Jr.
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Diary
Book 714
March 25-27, 1944
Regraded Unclassified
josk Inco
Alcohol Conference Board
See Liquor Control
American Bankers' Association
See Financing. Government: War Savings Bonds
(5th War Loan Drive)
American Red Cross
See Financing, Government: War Savings Bonds
(5th War Loan Drive)
Asaleas for Fishkill, New York
Agriculture consulted for new types and colors -
3/27/44
714 157
- B -
Business Conditions
Haas memorandum on situation. week ending
March 25, 1944 - 3/27/44
200
- C -
China
Military Expenditures (United States)
Financing to be explored further with Kung - cable
from American Embassy, Chungking - 3/26/44
80
Effect on China's economy. as described by Adler.
reviewed in White memorandum - 3/27/44
215
Current status of negotiations reported by Adler -
3/28/44: See Book 715, pages 201,204
Colombia
See War Refugee Board
Crowley, Leo T.
See Financing, Government
- 7 -
Federal Reserve System
See Financing, Government
Financing. Government
Chart showing receipts, expenditures, and deficit,
1940-44 (estimated) - 3/27/44
185
Table showing receipts, expenditures, and deficit,
1938-43 and 1944,1945 (estimated) - 3/29/44:
See Book 716, page 120
Conference: present: HMJr, Bell, Haas, Murphy. Tickton.
and Lindow - 3/28/44: Book 715. page 1
a) Securities last sold and price thereof discussed
3) Bell recommends reopening of the last two and a
half instead of reissuing a. new two and - half
e) Ive percent bond discussed
a) Federal Reserve's correspondence explaining terms
or which Federal insures lank of In York will
transact business with brokers el tealers to
Dated Plater Government securities for System
1 = = I I I atter =
- onder standing discussed lost
paper 15
Regraded Unclassified
- 1- - (Continued)
my I
Planning invertment (Continued)
far Serings Bends
bu Var Loss Drive
American Bankers' Association Committee appointed -
3/27/44
714 187
American Bankers' Association meeting with
Treasury group: Burgess resume - 3/27/44
189
Halsey (Admiral)-HMJ: correspondence concerning
Ingenuity Contest sponsored by Red Cross among
South Pacific servicemen - 3/27/44
196
- G -
George, Walter F. (Senator, Georgia)
See Liquor Control
- H -
Halsey, Admiral W. F., Jr.
See Financing, Government: War Savings Bonds
Carlton J.H.
(5th War Loan Drive)
Hayes, Ambassador
See War Refugee Board: Spain
- L -
Land, Admiral Emory S. (War Shipping Administrator)
See War Refugee Board
Latin America
Colombia: See War Refugee Board
Lend-Lease
United Kingdom: Federal Reserve Bank of New York
statement showing dollar disbursements, week ending
March 15, 1944 - 3/25/44
16
Liquor Control
George (Senator, Georgia) thanks HMJr for steps taken
in connection with sale of misbranded liquor at above-
ceiling prices - - 3/25/44
7
Alcohol Conference Board: Baxter and Jones memorandum
concerning breaking of black market together with
Fred Smith covering memorandum - 3/25/44
8.12
- M -
Recember Beary, is.
Consults Agriculture for ON types and mines of
againer for Fishkill - 3/27/46
157
Regraded Unclassified
Book Page
Spain
See War Refugee Board
- = -
Turkey
See War Refugee Board
- W -
War Conditions
Shortening, as well as winning, war discussed by
HMJr and Treasury group: Cox present - 3/27/44
714 160
a) Hull, Crowley, and HMJr a committee with
General Strong as director suggested by HMJr
1) Currie suggested by White
179
War Refuges Board
Developments during March 20-25, 1944
21
Goldmann, Nahum, report on conferences while in
London - 3/25/44
36
Portugal: American Legation, Lisbon, transmits reports
and suggestions of World Jewish Congress - 3/25/44
49
Spain: Hayes (Ambassador) lack of cooperation with
Board reviewed by Pehle - 3/27/44
217
a) Cables from Hayes supporting this conclusion
218-A
War Shipping Administrator Emory Land thanked for
cooperation - 3/27/44
221
Colombia: American Embassy, Bogota, outlines future
cooperation of Government - 3/27/44
225
Turkey: Charter price of 175,000 Turkish pounds ($97,200)
for projected voyage of eight days reported by
Hirschmann - 3/27/44
237
Weismann correspondence commenting on situation in
Palestine, etc. - 3/27/44
216-L
Regraded Unclassified
1
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
TO
Secretary Morgenthau
March 25, 1944
FROM
Joseph J. O'Connell, Jr.
During the course of hearings held last Monday
and Wednesday before the Banking and Currency Committee
in the House, charges of incompetence and mismanage-
ment were made against the Procurement Division by
Representatives Patman and Crawford. The criticisms
were leveled at the Procurement Division while
Mr. Clayton and Mr. Hancock were testifying in con-
nection with a bill introduced by Congressman Patman
relative to the disposition of surplus property.
Congressman Crawford was particularly severe
in his criticism, although many of his charges were
general and without supporting facts. In a few
instances he cited specific cases.
A summary of the charges, both general and specific,
follows:
(a) The Procurement Division has failed to use
normal advertising channels, and as a result
has failed to advise interested parties of what
property is being offered for sale;
(b) The Division has, in a majority of cases,
given notices of its sales only to those who
request that their names be placed on a mailing
list, and that these mailing lists apparently
consist largely of speculators;
(e) There is no central point where buyers
the P to obtain direct information, and certain
regional offices offer Items not affered
through other regional affices:
Regraded Unclassified
2
Secretary Morgenthau,
2.
(d) The Division has not supplied interested
purchasers with full and complete descriptions
of items offered for sale (Congressman Crawford
at this point cited a case in which four
thousand pounds of new automobile parts, con-
sisting of engine and compressor parts, were
offered for sale. His language is somewhat
obscure but apparently it is his point that an
inadequate description was made of the goods
being offered);
(e) The Division sells food stocks which
normally require ration points without requiring
the purchaser to surrender points at the time
of purchase (an illustration is cited of an
offering of 75,000 bags of pea beans, sold by a
private company in Washington as Government
surplus merchandise pursuant to an advertisement
which said "No points; prices less than ceiling");
(f) The Division sells items which require WPB
priority under normal circumstances, and sells
them without requiring the purchaser to comply
with the WPB priority regulations (here Congressman
Crawford cited a sale of 1504 pounds of sheet
copper without requiring a priority, although
the material sold was of a class under WPB control);
(g)
The Procurement Division offers its surpluses
in lots under which the successful bidder must
take all the items listed in a lot. These lots
are offered without reference to the needs or
requirements of the average bidder. (Congresseen
Crawford names one lot containing several hundred
used drinking fountains, 10,000 DAW parts to
Regraded Unclassified
3
Secretary Morgenthau,
3.
repair the fountains and a quantity of
kerosene lamps. He has difficulty in
imagining a man who would want to purchase
both the drinking fountains and the kerosene
lamps. He also refers to 8. case in which
drill bits and glass test-tubes were combined,
and to a case in which fluid for duplicating
machines and fluid for hydraulic brake systems
were offered together);
(h) Lots offered for sale are often assembled
in such large quantities that only the very
largest firms can afford to purchase or bid on
them, thus discriminating against smaller firms
(he cited one lot of electrical equipment
offered by the Fort Worth regional office of the
Procurement Division, which had more than 81,000
electrical items, a majority of which were
scarce items for civilian use);
(i) Procurement has sometimes failed to obtain
a high enough price for items transferred to
it (he cites as an example a case in which the
Procurement Division obtained eight cents per
plate for chinaware for which the Army secured a
sale price of twelve and one-half cents. Some-
what in the same connection, Congressman Crawford
stated that on the same day that the Navy Depart-
ment was buying new soup plates for eighteen cents
8. piece, the Treasury was disposing of the same
kind of plates at prices ranging from four cents
to eight cents).
132
Congressman Patmen, whose criticisms of the
Insurant Division NN more restrained
Regraded Unclassified
Secretary Morgenthau,
4.
as well as less extensive than Congressman
Crawford's, stressed the need for better
coordination between procuring and disposing
agencies. (He cites as an example of the
lack of it, a sale by the Procurement regional
office in Cincinnati of 32,063 pounds of horse-
shoes, followed sixty-eight days later by 8.
purchase by the Procurement Division of 242,560
pounds).
Mr. Sullivan is sending you a memorandum indicating
the answers to some if not all of the criticism out-
lined herein.
Regraded Unclassified
5
Mirch 25, 1944
MEMORANDUM FOR SECRETARY MORGENTHAU
JLS
From: Assistant Secretary Sullivan
I wish to briefly summarize the answer of the Treasury Pro-
curement Division to the charges made this week before the Banking and
Currency Committee of the House as outlined to you in Mr. O'Connell's
memorandum:
A. The Procurement Division always uses direct mail cir-
cularization of prospective purchasers. We have never used
paid advertising but have released information of special items
to the appropriate trade journals.
B. Mailing lists are developed trade directories and
classified listings. The field has been directed to avoid
transactions with speculators.
C. All information is now available centrally here in
Washington. The transportation situation requires us to dis-
pose of most of the goods in the same region in which we ac-
quire them.
D. Every effort is made to supply purchasers with com-
plete descriptions. I believe there is still room for im-
provenent in this field. (The sale of airplane parts is still
being checked. : do not believe 11 was . Treasury sale.)
L Treasury Innest sells very little
canned pode. New - Clad as such sale d - - - la
provide referred 18.
Regraded Unclassified
6
2
F. 966 pounds of used copper sheets were sold to the City
of !!inneapolis without priority clearance. The St. Paul office
has been warned again that no invitations to bid on critical
materials should be issued without containing the notice that
a WPB priority is required.
G. Errors of this type have been made. Instructions have
been given the field and I believe that this has been remedied.
In most instances where unrelated commodities have been offered
in one lot, they have been in very small amounts.
H. The testimony on the Fort Worth offering of electrical
items is correct. The Regional Director was instructed to re-
duce the size of the lots the day we here in Washington learned
of the offering.
I. The Navy was fully advised about the soup plates and
rejected them. (I suspect that the "U.S.Q.M.C." on the plate
may have affected their decision.)
J. Mr. Patman's information on the horse shoe transaction
is incorrect. We sold horse shoes in Cincinnati on December 22,
1943. Our last purchase of horse shoes was on February 16, 1943.
FEA is now processing a requisition for horse shoes of different
sizes and weights than those we sold in Cincinnati, but we have
not yet been authorized to buy any. Te had no notice that YEA
will require my borne shoes etil 2/9 the too antie after
the Cinclosati mis.
Regraded Unclassified
m
United States Senate
COMMITTEE ON FINANCE
KOMEZY, CLEAN
March 25, 1944
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
My dear Secretary Morgenthau:
You will permit me to thank you for your
letter of March 17, with further reference to my com-
munication of December 20, 1943, to which I attached
a letter from Honorable John A. Boykin, Solicitor General,
Atlanta Judicial District, Atlanta, Georgia, relative to
the sale of misbranded liquor at above ceiling prices,
particularly in the dry counties of Georgia.
The effective manner in which you have handled
this matter is greatly pleasing to the writer and to the
people of Georgia.
Sincerely yours,
Marcet
Regraded Unclassified
M
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
March 25, 1944
TO
Secretary Morgenthau
FROM Fred Smith
&
Mr. Baxter of the Alcohol Conference Board called the
other day and I asked him to prepare a very brief memorandum
stating how much gallonage the distillers actually needed,
in their estimation, to break the black market, and then to
translate that gallonage into terms of revenue to the Govern-
ment, and in terms of grain requirements, and to point out
where they thought it might come from other than in additional
production.
Baxter and Jones delivered the memorandum this afternoon.
(It is attached).
I talked to them further about their actual requirements,
and after some discussion an idea evolved. Here it is:
(1) The liquor Industry believes that a great part of
the black market is "psychological". People are over-buying
and paying high prices because they are afraid they soon won't
be able to get liquor. Consequently, if the stores suddenly
coold be fully stocked, and If it were possible to announce
that De liquor shortage was over, they believe the following
age would happen:
Regraded Unclassified
2
(a) people would stop buying liquor to store away;
(b) the market for imported junk would collapse,
and foreign manufacturers would be forced to sell raw
alcohol (to add to the stockpile) instead of bad liquor
in America;
(c) there would be no profit in black market operations;
(d) people would start using up hoarded stocks.
(2) Assuming for the moment that this was the case, I then
asked how much alcohol would be required at one time to
completely stock the retail outlets, and keep them stocked
for two or three months.
They told me that five to seven million gallons would
provide enough liquor to stock the stores, and keep them
stocked for almost three months (if buying were normal).
They also pointed out that when coffee was taken off rationing,
sales slumped for two and one-half months, which would indi-
cate that hoarded coffee was being used up. This same situation
might exist in liquor.
I then asked what the reaction of the industries might be
if, instead of releasing 25 million failous, the Government
was to be able to release SEVEE million plint with the unler-
risabing that - equal enrost mails be released every ! mur
edu providing natising ID of to increase the needs for
or reques the
Regraded Unclassified
10
- 3 -
Mr. Baxter and Mr. Jones felt that the industries would
cooperate to the fullest on such a plan, and more than that,
they felt that the industries would consider this an incentive
to increase production in industrial alcohol. They both felt
that the industry was not actually producing at peak, although
they didn't estimate how far from peak production was.
They said the gallonage for beverage purposes should be
apportioned on the basis of the distillers' contribution in
industrial alcohol, which would be added incentive for individual
firms in the industry to step up their production.
They pointed out that seven million gallons of alcohol,
turned into liquor, would produce almost $150,000,000 in
revenue for the Government.
I am bringing this idea up because it might be better to
focus on seven million gallons rather than 25 million; and
there is the bare possibility that in the two or three months
during which this would supply the distillers;
(1) war needs for alcohol might be decreased,
(2) the increased production of the distillers, due to
the incentive, night add to the stockpile;
(3) undermining the market for imported substitutes
signt increase the amount of insustrial alcohol and relasses
available for the UPS - - shreet;
Regraded Unclassified
11
(4) if it is true that a great deal of liquor is
hoarded, and that the shortage is making liquor buying abnormally
high, then an ample supply would reduce buying and encourage
the using of hoarded supplies to the extent that it might not
be necessary to release as much liquor in the final analysis
as the industry believes necessary to keep the black market
under control.
Of course, this is a gamble. The only things we can be
sure of are that the stockpile would be seven million gallons
lighter and that the Government would be $145,000,000 richer,
and the black market should have its back broken.
Carbon Copy to Mr. O'Connell
Attachment.
Regraded Unclassified
Black bootlegging, hi-jacking and smuggling.
Danger of prohibition.
Protection of Government tax income.
Reasonable satisfaction of public demand for quality beverage spirits.
BASIC SOLUTION:
The situation can be substantially corrected by diversion of 25 million
190° proof gallons of alcohol for beverage purposes.
Output for consumption of beverage distilled spirits is diminishing
and in view of unbalanced investories, with particular respect to shortage
of grain neutral spirits, it is doubtful if the total for 1944 will exceed
100 million proof gallons - unless some resumption of beverage production
is permitted. The 25 million high-proof gallons will bring total beverage
output approximately up to pre-war level, adding some 450 million dollars of
revenue to the Government.
SOURCES OF 25 MILLION GALLONS OF ALCOHOL:
1. The most direct and sensible approach is the stockpile itself which
can immediately be reduced by this amount without in any way affecting the
war effort. In the first place, after this year completion of projected
production facilities and reduction in requirements due to oil process rubber
plants should bring total production of alcohol substantially in excess of
requirements.
There seems no reason why the alcohol stockpile cannot be viewed by the
1508 standards that prem other as aterials. liast war themicals carry no
Dres in the ISN of citial metain, 6 DAR aplied 1 rule that
the
and
-
-
/
B
dine
I 10 I
Regraded Unclassified
13
Present stockpile is in the neighborhood of 80 million gallons. One
month's requirements would be 53 million gallons - leaving an excess of some
27 million gallons. Likewise, the difference between 1944 total require-
ments and domestic production is 54 million gallons - also resulting in
an excess of 26 million gallons.
Thus by the most conservative of the various methods for figuring stock-
pile, there should be at least 25 million gallons for immediate beverage
purposes.
2. Nearly one-third of the alcohol program is allotted for so-called
"indirect military, civilian and anti-freeze" uses, Practically every peace
time use of alcohol has been permitted some degree of supply - except
beverages.
Prior to the national defense period, annual requirements of industrial
alcohol for all purposes, including anti-freeze, ranged in the neighborhood
of 100 million gallons per year.
In 1942, the total for these uses was 149,800,000 gallons - and in
1943, 198,700,000 gallons. For 1944, the estimated requirements for these
purposes are 197,000,000 gallons.
If the question of public moralo and liquor control intertime is of
grave concern, then should not the alcoholic beverage industry be classed
equally in importance with those commercial uses which may, after all, be
deemed marginal but which are DOW allotted 15% to 50% of their alcohol re-
sureet! Could there ant be a readjustment of such allocations to include
de lenner Industry service . ablie seed?
Regraded Unclassified
,
3. In addition, the alcohol requirements, both for war and beverage
purposes, could be met in part by projects already under consideration by
the WPB, such as increased distilling facilities, using non-food and other
base materials, and imports from foreign countries as well as from our
insular possessions.
GRAIN:
Production of 25 million high proof gallons of alcohol would require
only 10 million of the 4 billion bushels of grain annually produced in this
country - about one quarter of one percent, or an amount so small as to be
lost in the factor of error in the figures themselves.
As a matter of fact, actually the grain usage would be even less. A
distillery equipped with complete feed recovery apparatus will return into
feed channels at least 50% of the feed value of the whole grain. Distillers
are now recovering approximately half of their potential feed production and
are steadily increasing this as the WPB-WFA feed recovery program nears
completion.
Accordingly, on a feed value basis, the net amount of grain represented
by 25 million gallons of alcohol would thus amount to no more than 7½ million
bushels and when all distilleries are completely equipped, this would be
reduced to about 5 million bushels - only one-eighth of one percent of the
grain supply!
Objections have sometimes been raised to production of beverage alcohol
Lecause *corra 10 needed for food and feeds". This is not & realistic state-
sent of Six diatin.
Regraded Unclassified
15
It is expected that the bulk of the spirite covered by the current
proposal would be 190° proof alcohol, which can be made from practically
any grains that may be available - and there are ample supplies of several
grains that could be used. Should there be any stringency in domestic
grains, the carry-over of Canadian wheat estimated at 375 million bushels,
Argentine wheat at 200 million bushels and an estimated corn crop of 240
million bushels, plus a substantial United States rye surplus, offers
substantial opportunity.
Thus, bearing in mind the infinitesimal amount of grain shortage scarcely
seems a justifiable reason for preventing a program to eliminate the many
serious social problems with which we are faced today.
Regraded Unclassified
16
TREASURY DEPARTMENT
OFFICE OF THE SECRETARY
March 25, 1944
CONFIDENTIAL
Received this date from the Federal Reserve
Bank of New York, for the confidential information
of the Secretary of the Treasury, compilation for
the week ended March 15, 1944, showing dollar dis-
bursements out of the British Empire and French
accounts at the Federal Reserve Bank of New York
and the means by which these expenditures were
financed.
EMB
Regraded Unclassified
lid
FEDERAL RESERVE BANK
OF NEW YORK
March 24, 1944.
CONFIDENTIAL
Dear Mr. Secretary:
Attention: Mr. H. D. White
I am enclosing our compilation for the week ended
March 15, 1944, showing dollar disbursements out of the British
Empire and French accounts at this bank and the means by
which these expenditures were financed.
Faithfully yours,
/s/ Robert G. Rouse
Robert G. Rouse,
Vice President.
The Honorable Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington 25, D.C.
Enclosures
COPY
Regraded Unclassified
Regraded Unclassified
(In Illions of Dollars)
Week Ended March 15, 3544
BANK OF INGLAND (BRITISH GOVERNMENT)
BANK or OMB
DEBITS
CREDITS
Net Incr. (+)
Gov's
to
Proceeds of
Transfers
Sales of
_from
Other
or Decr. (-)
Total
Total
Securities
Official
Total
Credits
in 0 Funds
Debits
Credits
--
targe
Other
(Official)
Australian
(O)
Debite
Credits
Gold
(b)
Account
(c)
(d)
(a)
(*)
60dge
20.9
2,166.7
1,828,2
1,356.1
52,0
3.9
416,2
+ 35.0
866,3(f)
1,095,3(r)
20.9
1,335.8
2,793.1
2,109.5
108,0
14.5
561,1
+ 10,8
878,3
1,098,4
X
407.4
2,189.8
1,193.7
274.0
16.7
705.4
- 13.2
38.9
8.6
204al
707
223.1
1,361.5
21,8
5.5
57.4
1,276,8
+ 125,9
16,5
4.4
112-7
178.4
260,9
1,072.3
-
0.5
155.1
916.7
+ 308,3
10.3
1.0
16.8
10.6
22,0
86,2
-
-
15,0
71,2
+ 36,8
-
160
*
22,2
115.4
-
-
40.5
74.9
+ 77,2
-
as
=
17.6
89.0
-
-
3.5
85.5
+ 23,1
-
1603
-
81,8
134.5
-
-
36.5
98,0
+ 36.4
-
22,2
146
12,0
127.5
-
-
1,0
126,5
+ C2,7
-
163
2.1
127.4
144.5
-
-
29.0
115.5
+ 0.7
-
0.6
63.4
57.2
-
-
-
-
57.2
- 6.8
-
la4
5.7
19.2
-
-
2.1
9a0-
10.2
+. 10.0
.
1003
SeB
-
4.5
17.0
-
-
8.0
9,0
+ 6.2
-
52.501
34.8(k)
-
-
4.1
305
15.0
19,8(k)
- 25.3
-
Outlineak
of
in
See attached
willine
1940) $37.6 million
1940 to March 12, 1941) 05409 million
million
Central, and Ministry of Shipping.
Insure payments for account of British Ministry of Supply Mission, British Supply Board, Ministry of Supply Timber
Received Figures based on transfers from the New York Agency of the Bank of Montreal, which apparently represent the
provide of afficial British sales of American securities, including those effected through direct negotiation. In and
- - =fftetal solling, substantial liquidation of securities for private British account occurred, particularly during M
- movide of the war, although the receipt of the proceeds at this Bank cannot be identified with any accuracy.
- supplied by the British Treasury and released by Secretary Morgenthau, total official and private British
- securities through December, 1940 amounted to $334 million.
about B45 million received during October, 1939 from the accounts of British authorised banks with New York bases,
reflecting the requisitioning of private dollar balances. Other large transfers from such accounts since Octoils
- apparacity represent current acquisitions of proceeds of exports from the sterling area and other accruing dollar
receipts, See (x) below.
definits will change in all dollar holdings payable on demand or maturing in one year.
No by types of debita and credits see tabulations prior to March 10, 1943.
- allminate the effect of $20 million paid out on June 26, 1940 and returned the following g day.
- anthing see tabulations prior to April 23, 1941.
- monthly breakdown see tabulations prior to October 8, 1941.
INI
- morthly breakforn see tabulations prior to October 14, 1942.
her withly breakdown see tabulations prior to September 29, 1943.
18.8 million apparently representing current and ACCU ulated dollar proceeds of starling area services
exports.
(1) Includes 851.0 million paid to the Commodity Credit Corporation for purchase of American tobacco for British civilian
requirements.
Regraded Unclassified
Regraded Unclassified
AMALYSIS OF CANADIAN AND AUSTRALIAN ACCOUNTS
(In Millions of Dollars)
Week Ended March 15. 1964
BANK
OF
CANADA (and Canadian Government)
COMMINSEALTH BANK OF AUSTRALIA (and Australian
UNITS
CREDITS
DEBITS
Transfere
Transfers
Transfers from Official
to
Proceeds
Net Incr.
to
Processis
British A/C
Official
of
(+) or
Official
of
For French
Decr. (-)
Total
British
Other
Total
Gold
Children's
Total
British
Others
Total
Gold
For Own
Other
Details
A/C
Debits
Credits
Sales
A/C
A/C
Credits
in $Runds
Debits
A/C
Debits
Credits
Sales
MILO
16.6
306.4
504.7
412.7
20,9
38.7
32.4
+ 181.7
31,2
3.9
27.3
36,1
30.0
677.2
16.6
460.6
707.4
534.8
20.9
110.7
41.0
+ 230.2
57.9
14.5
43.4
62.4
50,1
-
460.4
462.0
246.2
3.4
123.9
88.5
+ 1.6
72.2
16,7
55.5
81,2
62.9
0,3
525.5
566.3
198.6
7.7
-
360.0
+ 40.5
107.2
57.4
49.8
112.2
17.2
W1.6
-
723.6
958.8
47.1
170,4
-
741.3
+ 235.2
197.0
155.1
41.9
200.4
-
47.2
70.1
10.6
59.5
+ 22,9
16.8
15.0
1.8
20.0
-
-
-
-
-
12.1
71,3
-
-
-
71.3
+ 39.2
42,8
40.5
2.3
26,5
-
0,1
15.3
95,1
-
5.9
-
89.2
+ 79.7
6,6
3.5
3.1
18,2
-
0.3
146.5
55.1
-
-
-
55.1
- 91.7
39.7
36.5
3.2
27.0
-
-
32.3
78.5
-
10.6
-
67.9
+ 46.2
6.0
1,0
5.0
11.)
I
25.4
118,5
23,1
2.1
-
93.3
+ 93.1
31.3
29.0
2,3
28,6
.
7.4
32.6
-
-
-
-
32,6
+ 25.2
-
-
-
7,5
-
6.6
18.4
-
2.1
-
16.3
+ 11.8
9+9
9.0
0,9
4,0
-
0.6
27.5
-
-
27.5
+ 26.9
10,0
5.0
2.0
7.6
5+1
26,4(f)
15.0(1)
4.1
-
1.3(a)+ 20.7
15,6
15.0
0,6
15.4(b)
them
for
(a) For monthly breakdown see tabulations prior to April 23, 1941.
6.2 million.
(b) For monthly breakdown see tabulations prior to October 8, 1961.
8.9 million.
(c) For monthly breakdown see tabulations prior to October 14, 196
10.1 million.
(d) For monthly breakdown see tabulations prior to September 29, 1941-
13.9 million.
(e) Reflects changes in all dollar holdings payable on demand or
March 15, 1944)
10.9 million.
(f) Does not reflect transactions in short term U. 5, securities.
(g) Includes $ 6.6 million deposited by War Supplies, Ltd.
and
$
0,1 million received from New York account'ol
(b) Includes $15.0 million in connection with the expenses of our arred
(1) Represents sale of $15.0 million of Canadian gold to Sveriges
20
FOREIGN ECONOMIC ADMINISTRATION
WASHINGTON 25, D.C.
March 25, 1944
My dear Secretary Morgenthau:
The proclamation on refugees which
the President issued yesterday is a superb
job.
Sincerely yours,
Oscar Cox
The Honorable
The Secretary of the Treasury
Regraded Unclassified
21
Developments furlag the week of
1944 Ki Rd P #
1. STATEMENT OF AXIS ATROCITIES
At our instance, the President has issued a strong state=
ment concerning the systematic torture and murder of
civilians by the Nasis and Japanese with particular -
phasis on the barbaric campaign of extermination waged
by the Nazis against the Jews. The statement points out
that with the Jews in the Balkans now facing annihilation
as the result of Hitler's recent moves in that area, it
18 filting to proclaim again the determination of this
government to pursue and bring to justice all who parti-
cipate in these acts of savagery. The United Nations
have made it clear that this is their intent and that
this "warning applies not only to the leaders but also
to their functionaries and subordinates in Germany and
in the satellite countries," the President stated.
The statement called attention to Hitler's claim that
these acts were being committed in the name of the German
people. The President therefore called upon every German
and every other person under Nazi domination "to show
the world by his action that he does not share Hitler's
insane criminal desires."
The President further stated that until victory 1s won
this government "will persevere in its efforts to rescue
the victime of brutality of the Nazie and the Japs, using
all means at its command, no far as military operations
permit, to aid the escape of intended victims." He called
upon "the free peoples of Europe and Asia temporarily
to upen their frontiers to all victime of oppression."
He also reaffirmed the determination of this government
to find havens of refuge for these people and to find
the means to maintain and support them until their home-
lands are freed and they say return.
Since the effectiveness of the President's statement will
depend largely upon the extent to which it 10 publicized in
Germen-controlled Dirope. we prepared and the State Depart-
ment very promptly transmitted cables to our Missions st
Regraded Unclassified
22
2 -
Bern, Stockholm, Lisbon, Madrid, inkars, and Cairo, which
contain the statement issued by the President and request
our Missions to see to it that the utmost publicity is
given it immediately in local newspapers, radio, and in
any other manner feasible. These Missions are also being
requested to endeavor to have this publicity included in
the foreign radio broadcasts emanating from the countries
to which they are accredited. We are also suggesting to
our Missions in these countries that they attempt to
obtain and publicize favorable comment on the President's
statement from prominent government officials or other
personages in said countries. The Missions are also being
asked to report the measures taken to comply with these
instructions together with the results thereof.
We have also prepared cables to be sent to Winant and
Harriman asking them to make the President's statement
available to the British and Russian Governments and
to emphasise to such governments the importance our
government attaches to the value of a psychological pro-
gram designed to change the actions and attitudes of the
enemy, particularly his antellites, functionaries and
subordinates. Winant is also being asked to call the
President's statement to the attention of the representa-
tives in London of the governments-in-exile and to advise
them of our desire that it be given widespread publicity.
Wilson and Ackerman in Algiers are also being furnished
with a copy of the President's statement and we are like-
wise requesting them to have it publicized effectively.
OWI is employing its full facilities to give publicity
to the President's statement.
2. APPROACH TO THE SATELLITES
In view of German military operations in Hungary and re-
ports of increased Nasi pressure on that country to deport
Polish and other Jews who have found refuge there, we
have sent a cable to State to be transmitted to Norweb
at Liebon, asking him to approach the Hungarian Government
through available channels and make it clear that notwith-
standing Nasi pressure, any action by the Hungarian
Regraded Unclassified
Government to inflict new persecutions or to continue
existing persecutions of Jevs will be looked upon with
the greatest disfavor by this government and will be
taken into account in the future, Norweb is also being
asked again to approach the Rumanian Government, through
similar channels, and advise it that this attitude of
our government likewise applies to any such action by
Rumania.
We have also transmitted to the Apostolic Delegate in
Washington a copy of the statement issued by the President
and have asked him to suggest to the Holy See that action
on its part may facilitate the adoption of measures by
the people and governments of Hungary and Rumania to
protect the Jewish population of these countries.
3.
COOPERATION WITH OTHER GOVERNMENTS
(a) British
A reply has been received through the London Embassy
from the British Foreign Office to the suggestion made
by this government that the British authorise the allo-
cation of immigration certificates to children 80 as to
permit them to enter Palestine within the total allowed
under theWhite Paper. The suggestion by this government
had been made in connection with the Swiss effort to
obtain exit permits for Jewish children in France. The
British have replied that since the Swies have not yet
Obtained any promise of exit permits and have made no
representations to the Intergovérnmental Committee or
British Government regarding conditions upon which they
would receive the children, the question of the children
eventually going to Palestine is entirely hypothetical.
The Foreign Office therefore feels that "1t would be
undesirable to freeze any substantial number of certifi-
cates for cases which may never arise." However, the
Foreign Office states that it will give appropriate con-
sideration to this matter if and when the Swime Govern-
ment approaches the Intergovernmental Committee for con-
crete assurances. Our Embasey in London has also been
informed by the Foreign Office that the unused balance
of the quote of 75,000 Jewish immigrants for Palestine
Regraded Unclassified
fixed by the White Paper bis - beez refuced to
instely 28,000. TheSecretary of State for the Colonies
said in Parliament la November 1943 with respect to the
balance admissible under the existing Palestine quota
system that those unable to reach Palestine by March 31,
1944, would not be excluded by the time factor and that
"no effort will be lacking on the part of His Majesty's
Government to facilitate their arrival subject to the
criterion of economic absorptive capacity."
(b) United Nations
We have been advised by Scheenfeld of the substance
of conversations he has had with Count Czapeki, Deputy
Secretary General and Head of the Refugee Department of
the Polish Ministry of Foreign Affairs. Crapski is in
full accord with the policy set forth in theRxecutive
Order creating the Board and indicated that we would re-
ceive the fullest possible cooperation from his govern-
ment. He stated that because of the great number of
Poles held in concentration camps by the Germans, the small
percentage who do manage to escape makes up a considerable
number of people. He mentioned as the principle obstacles
interfering with the rescue and relief of Nazi victims
the failure of some of the governments of the countries
where the victims attempt to find refuge to give suffi-
cient cooperation, the problem of passports, the matter
of obtaining necessary funds and the visa problem. Ve
felt that an important thing to be done immediately was
to provide more passports entitling Polish refugees in
Switzerland to go to South America. Czapski stated the
most helpful measures this government could take for the
rescue and relief of refugees would be to intervene with
the governments of these countries in which the United
States is represented, to assist with the passport and
visa problems and to permit funds to be transferred from
this country to Europe for relief and rescue work.
We have also received a report from Schoenfeld of
his conversations with Dr. Sowerlin, who 1a in charge of
refugee matters for the Norwegian Government-in-exile.
Dr. Severiin stated that this Government's refugee policy
has the full sympathy of the Norwegian authorities and that
they would cooperate with as in every way that night be
Regraded Unclassified
25
be that Date NAD no difficulty in
the 14 of Norweglana cocuping to Sweden once they
resolved the frontier. The chief obstacle to their es-
caps lies in their inability to nove about within Horway.
According to Dr. Seweriin, approximately 24,000 Norwe-
gluns have thus far escaped to Sweden and about 2,000
have escaped to the United Kingdom and other areas. The
Jewish population of Norway amounting to about 670 was
deported to Poland, and the Norwegian Government has no
knowledge of their fate. The report also states that
between 6,000 and 8,000 Norwegians are now in Germany,
2,000 of these are being held as prisoners of war and
the remainder are in concentration camps or are in prison
AB the result of court martial.
(c) The Neutrals
(1) Switzerland
In a cable to Minister Harrison now pending at
State, the Board refers to certain apparent inconsistencies
between the official statement of Swiss Government policy
with respect to the admission of refugees and actual
practice at Swiss frontiers, as reported by the Union
of Orthodox Rabbis, in refusing entry to various cata
gories of persons whose lives are in danger and whom we
consider to be political refugees. Since the question
appears to be the interpretation Swiss authorities place
on the term "political refugees, we are asking Harrison
to approach appropriate officials of the Swise Government
with a view to ascertaining the extent to which Swiss
authorities - including the Swiss Foreign Police Depart-
ment, border guards, and cantonal police - consider the
following to be political refugees: stateless Jews,
Jewish nationals of United Nations now occupied by the
Germans, Jewish nationals of Germany and her satellites,
and nationals generally of United Nations now occupied
by the Germans. At the same time we are asking Harrison
to make clear to the Swiss Government our belief that
persons in all four of these categories should be con-
sidered political refugees and should, after appropriate
security checks, be afforded temporary refuge without
regard to age, sex, or the existence of close relatives
in Switzerland.
Regraded Unclassified
(11) Turney
We have been advised by Hirschmann that the
Turkish Government 1s making available the "S.S. Tari,"
a 4,000 ton passenger vessel having a capacity of 1,500
persons, to evacuate refugees from Constanza to Istanbul.
However, the Turkish Government will not permit the vessel
to continue with this evacuation work after the completion
of the first trip unless by that date this government has
made a substitute vessel available to the Turks. There-
after Hirschmann went to Istanbul regarding the charter
of the vessel. He has informed us that our Naval Attache,
Black of the War Shipping Administration, the Turkish
Naval Attache, and himself were agreed that the "S.S.
Tari" is highly desirable for our purposes and that it
will sail for Constanza as soon as supplies have been
loaded, charter price agreed upon, safe-conduct obtained
and-insurance placed. Hirschmann reported that we prob-
ably would be required to pay about $4,000 per day ex-
clusive of insurance. The length of the voyage has been
estimated at from thirty to thirty-six days. Hirschmann
requested authority to enter into a charter party on
behalf of the Board with the Turkish State Steamship Lines
for the charter of the "S.S. Tari" for one voyage at $4,000
per day. He also estimated that the premiums for insur-
Ance on the vessel would amount to approximately $80,000
if the insurance were placed in Turkey. Hirschmann also
asked that this Government give the Turkish Government a
guarantee of replacement in the event of the loss of the
"S.S. Tari" similar to that given the Turks in the case
of the "S.S. Vatan." We have cabled Hirschmann authorizing
him to enter into a charter party for the "S.S. Tari" at
the price indicated and to place the insurance on the
vessel in Turkey. We also obtained the requested guarantee
of replacement from the War Shipping Administration and
the Foreign Economic Administration and have advised
Hirschmann of this.
The International Red Cross is attempting to
obtain safe-conducts for the "S.S. Tari" from all belliger-
onts except Russia. Safe-conduct from the latter has
been requested through the Russian Ambassador in Ankara,
Regraded Unclassified
requestion - to st
instructing do to ARE She Swine Government to support
:ce International Red Cross request for safe-conduct.
We discussed with the War Shipping Administration
the matter of this Government's making a substitute vessel
available to the Turks 80 that the "S.S. Tari" may make
additional voyages to evacuate refugees after completion
of its Initial trip. They have cabled their representa-
tive in Turkey for further information and have advised
him that any recommendation made by him will receive
sympathetic consideration even if practical difficulties
are involved. The War Shipping Administration is also
cabling its representative in Algiers to ascertain if the
French or Italians are willing to charter a vessel for
this purpose or if there is any small freighter available
in the Mediterranean which could be chartered to the
Turks. However, the War Shipping Administration is of
the opinion that the best solution of this problem would
be to treat it as one of allocation and attempt to work
out an arrangement with the Turks whereby an equivalent
amount of space on an Allied vessel proceeding to the
eastern Mediterranean would be made available for Turkish
requirements in lieu of chartering a vessel to them. We
are advising Hirschmann of these developments, pointing
out to him the difficulties in the way of putting a
vessel in the hands of the Turks by the date of the com-
pletion of the "Tari's" first voyage and suggesting to
him that, if he could induce the Turke to accept an
arrangement whereby equivalent spacerion an Allied vessel
would be made available to them in lieu of a substitute
ship, such an arrangement would be more feasible from a
shipping standpoint.
In connection with the projected voyage of the
"S.S. Tari, the representative of the Jewish Agency in
Ankara has informed Hirschmann that it will be five or
six weeks before a sufficient number of refugees at Con-
stanza will be ready to embark despite his previous
assurances that they would be ready to embark on ten days
notice.
Regraded Unclassified
28
We have also been advised by Hirschmann with
respect to the proposed purchase of the "S.S. Necat" for
donation to the Turkish Red Crescent, to be used for
evacuation work, that the Turkish Government deems it im-
possible to withdraw a second ship from its small supply
to be used for evacuation purposes. We have asked Hirsch-
mann if he has explored the possibility of the Turks
making the "S.S. Necat" available for use by the Turkish
Red Crescent as soon as the "S.S. Tari" completes its
voyage in case arrangements cannot be made to have the
"S.B. Tari" make repeated voyages. Hirschmann has also
advised that if this government will donate a vessel to
the Turkish Red Crescent, the Turks would be willing to
have the Turkish Red Crescent operate it under the Turkish
flag to evacuate refugees for the duration of the war,
the vessel to become the property of the Turkish Red
Crescent.
Hirschmann was informed on March 16 by the
Rumanian Ambassador to Turkey that the latter had received
& reply from his government to the effect that it had
decided to transfer to Rumania proper all Jews in Trans-
nistria at the present time and that the Government of
Rumania will facilitate in any possible manner the emi-
gmation of Jews. The International Red Cross has reported
that this movement from Transnistria to Rumania has already
begun and that 48,000 Jewish refugees had been moved up
to March 20th.
We have also advised Hirschmann of information
received from the International Red Cross to the effect
that the Bulgarian ship "Bellacitta" is available to
transfer 150 refugees weekly. from Mangalia to Istanbul
and that two other Bulgarian ships are available for this
purpose, the "Maritza" and the Milka." Presumably, the
latter two ships are not now usable since Turkey is only
permitting rail transport to Palestine at the rate of
150 persons weekly, and the "Bellacitta" would supply this
number. We are asking Hirschmann to do everything possible
to enable these vessels to evacute refugees and have
cabled Harrisan requesting prompt action by the Russians
OR the International Red Cross request for sufe-conduct
for the "Ballacitta."
Regraded Unclassified
29
- 9 -
A full report has been received from Stein-
hardt in response to the circular airgram of January 25th
which we are now studying.
Hirschmann will return early in April to report
personally on the situation in Turkey.
(iii) Spain
Our cable to Hayes, containing the new measures
we are suggesting to facilitate the evacuation of refugees
to Spain, is still pending at State.
A cable has been received from Hayes with
respect to the license issued with our approval to the
JDC for the purpose of evacuating refugee Jewish chil-
dren from France to Spain, Hayes has not advised Sequerra,
the JDC representative, of the terms of this license,
taking the position that Sequerra's loyalty to the Allied
cause is doubtful and that all JDC business with the En-
bassy, as heretofore, should be transacted through Blick-
enstaff. More important is Hayes' objection to any Amer-
ican charitable organization engaging in the clandestine
operations contemplated by this license as it is his
opinion that such actions could jeopardize the position
of such organizations in Spain and might be turned by
the Germans to their own advantage and used as a device
for getting their agents into. Spain and Allied Territory.
We received another cable from Hayes in which
he states his opposition to the War Refugee Board's
sending a representative to Spain and recommends that if
the Board wishes to work in Spain, it should work through
Blickenstaff, thereby obtaining the value of his exper-
ience in this field. Blickenstaff, Hayes is certain,
would be acceptable to the Spanish, while a representative
from the outside would not, as the Spanish would feel -
such designation contrary to the agreement centralizing
refugee work in Spain in the hands of Blickenstaff.
The have proposed to State that the Unitarian
Service Committee be permited to operate In Spain with
offices of Marcelons and that 5 cable be sent to Rayes,
welking the to estado the consent of the Spartish -
Regraded Unclassified
30
ment. We believe this organization would be of considers-
ble assistance in carrying out the War Refugee Board
policies in Spain.
With respect to the movement of stateless and
enemy national refugees from Spain to Camp Lyautey, we
received a cable from Ackermann that the French were
objecting to the admission of certain stateless persons
upon the ground that they were not refugees as they had
not been in Spain prior to 1938. Since we do not appear
to be receiving the full cooperation of the French Com-
mittee on National Liberation in connection with this
program, we have discussed the matter with Jean Monnet,
stressing the various problems involved, the delays
attendant upon existing procedures and the necessity for
general cooperation. Monnet has agreed to cable Algiers
on the matter.
(iv) Sweden
With the approval of the Treasury Department
we cabled Minister Johnson that subject to his consent
we propose to appoint Iver Olsen, Treasury Representative
in Stockholm, as the Special Representative of the War
Refugee Board in Sweden. It is also contemplated that
State will designate Olsen as Special Attache to the
Legation on War Refugee matters.
(d) Latin American Countries
(i) Paraguay
Ambassador Frost has devised us that Paraguayan
officials are now at work on plans for immigration and
colonization and in this connection are bearing in mind
the problem of evacuating and relieving European refugees.
(ii) Bolivia
In 8. communication from our Embassy in Bolivia
- have been advised that it in practically impossible
- Intergine onder present circumstances (and, as directed,
without present Solivian authorities) te
what estent of refusees 179 persitted No eder
is
$
of
digimatic
È
Regraded Unclassified
31
- 11 -
prodence the revolutionary government is reported to have
indicated that, as a member of the Intergovernmental
Committee, "its conduct with respect to Semites will be
in accordance with that adopted by the other nations of
the continent. Within the country, nationals and for-
eigners shall enjoy the same guarantees under the Poli-
tical Constitution of the State without distinction as
to whether they are Jews or not."
The Embassy also reports a general resentment
that Jewish immigrants admitted to Bolivia in recent
years have competed with established Bolivian merchants
and small shopkeepers when many of these immigrants were
officially admitted with the understanding that they were
to engage in agriculture.
(iii) Haiti
In a reply from Ambassador White in Haiti we are
advised that a Committee of Aid for Refugees has been
appointed by the Haitian Government. At its first meeting
on February 7 the Committee is reported not only to have
endorsed the objectives of our Government with respect
to refugees, but also to have voted to obtain funds by
a special state lottery for $10,000 and by a special
issue of five-centime póstage stamps. Monies obtained
in these ways would be devoted to refugee projects, per-
haps through the United States War Relief Fund.
(iv) Peru-
Reports have been received from our Embassy in
Peru with respect to the Peruvian attitude toward the
rescue and relief of the Jews of Europe and other victims
of enemy persecution. Pending the receipt of a formal
reply on refugee policy from the Peruvian Ministry for
Foreign Affairs (which the Embassy expects to be non-
committal or negative as well as delayed), we are advised
that little assistance or real sympathy can be expected
from Peru.
(-) Mexico
about Department has followed or tda
regurl - the posethin Include attitude with
to the reside and Inper mine an
19
Exain
with
-
for
E
1
Code
is
30
to
Regraded Unclassified
- 12
32
of Mexican hospitality to Jews is concerned, Nesseramith
reports that there is no particular problem there, Mexico
having afforded refuge to large numbers of refugees with-
out question as tb their religion. We are advised, how-
ever, that, while Mexico is entirely in sympathy with the
proposed activities of the Board, it, nevertheless, can-
not take any active part in the transportation of refugees
to this continent nor can it assume any responsibility
for the maintenance of such refugees in Mexico,
(vi) Nicaragua
After further discussion with the Nicaraguan
Foreign Office as to that country's willingness to rescue
refugees, our Embassy advises that information will ge
required regarding the practical steps envisaged by the
Board to put our Government's policy into effect, such
as the probable number of persons to be received by the
United States, the facilities for transport which may be
available, the time of the expected evacuations, the
nationality of the refugees, etc. With respect to the
possibility of the Nicaraguan Government's issuing a
public statement on the subject, our Embassy believes
that embarrassment might result from our requesting such
a statement at this time.
4. COOPERATION WITH THE INTERGOVERNMENTAL COMMITTEE
Myron Taylor, after discussing with Secretary Morgenthau
the respective fields of action of the ,Intergovernmental
Committee and the War Refugee Board, suggested that
Emerson and Malin of the Intergovernmental Committee come
to Washington to discuss this subject further with
Secretary Morgenthau, Mr. Pehle and others interested.
We have been advised by Winant that Emerson will arrive
here shortly for this purpose.
The plenary session of the Intergovernmental Committee
has been called for June 19, unless the director and
chairman find it impractical to hold such meeting at that
time.
5. SPECIAL PROJECTS
In
Regraded Unclassified
33
from disease and Inade vate living confitions, - have
been advised that mini-ittion 11 00
and that there is some salaria and other diseases, Food,
clothing and medicines are needed.
(b) Evacuation of Refugees from Rab
We were advised by the British that they had facil-
ities for making local funds available for the evacuation
of refugees on the Island of Rab. We approached the JDC,
which was willing to furnish $25,000 for this project.
A license has been issued under which the JDC has remitted
that Amount to the Finance Officer of the British Foreign
Office. The lira equivalent will be made available by
the British Paymaster in southern Italy.
(Signed) J. W. Pehle
CC: Miss Chauncey (for the Sec'y) Abrahamson, Akzin, Bernstein,
Cohn, DuBois, Friedman, Gaston, Hodel, Laughlin, Lesser,
Luxford, Mann, McCormack, Paul, Pollak, Rains, Sargey,
Standish, Stemrt, H. 3. thite, Pehle, Files
Regraded Unclassified
EXECUTIVE OFFICE OF THE PRESIDENT
ok 1m.n
AR REFUGEE BOARD
INTER-OFFICE COMMUNICATION
DATE Mar. 25, 1944
Secretary Morgenthau
J. W. Pehle
If you agree, I propose to have the following
minute inserted in the Minutes of the Third Meeting
of the War Refugee Board:
"5. The Board discussed naming Pehle a.8
permanent Executive Director and it
was agreed that provided the President
concurred Pehle should be 80 designated.
(The Acting Executive Director was not
present during the discussion of this
item.)
Regraded Unclassified
35
March 25, 1944
3:30 p.m.
TO WILSON FOR ACHERMANN FROM WAR REFUGEE BOARD
This is WRB Cable to Algiers No.
2
The
following is for your information. On March 23, 1944 we talked with
Jean Monnet about the desirability of securing better cooperation from
the French Committee of National Liberation on the matter of evacuat-
ing stateless and enemy national refugees from Spain to French North
Africa. We particularly stressed the security problem, the delays
attendant upon existing procedures, the problem of Sephardic Jews, and
the necessity for general cooperation.
Monnet agreed to cable Algiers promptly and indicated that
he thought Fresnay, a member of the Committee, would be the one to
handle the problem. He thought that Fresnay would probably contact
Ackermann.
JHMurphysdh 3/24/44
Regraded Unclassified
EXECUTIVE OFFICE OF THE PRESIDENT
WAR REFUGEE BOARD
INTER-OFFICE COMMUNICATION
TO
M
DATE MAR 25 1944
Secretary Morgenthau
FROM
Mr. Pehle
The attached memorandum from
Dr. Nahum Goldmann of the World Jewish Con-
gress will be of interest to you in connec-
tion with the reaction in Great Britain to
the establishment of the War Refugee Board.
Intruec
Regraded Unclassified
37
Washington, D. C.
March 23. 1944
MEMORANDUM:
War Refugee Board
During my stay in London, I had occasion to meet
with the various governments-in-exile, with members of the
British Foreign Office, with Sir Herbert Emerson and his
staff, a. great number of British members of Parliament,
journalists, publicists, and leaders of public opinion.
They were all deeply interested in the news of the estab-
lishment of the War Refugee Board. Some attempt was made,
unofficially, in British circles to whittle down the im-
pression made by this news, by characterizing it as
window-dressing and a political manoever in an election
year. I dia my best, and, I believe, with some success,
to convince all those with whom I talked and the private
groups which I addressed, that the War Refugee Board meant
real business and was set up because of the sincere desire
01 the American Government to do something effective to
save the Jews of Europe. On the whole, though, the cre-
ation of the Board made a. very deep impression.
I suggested to various governments-in-exile,
that they take similar action and establish War Refugee
Boards of their own on which should be appointed high
officials assigned to deal exclusively with the problem
of saving European Jews. The Polish Government decided
to set up such a Committee, which will soon be announced.
The French Military Association agreed to appoint a high
official in Algiers to deal with the question of the
rescue of Jews and has instructed M. Boris, its repre-
sentative in London to lend his support. A similar assur-
ance was given to me by President Benes and Mr. Masaryk,
whose department is in charge of such activities. The
representatives of the Dutch, Belgian and Norwegian
governments had several talks with representatives of the
world Jewish Congress in London concerning their partici-
pation in such work and are prepared to allocate con-
miderable amounts of money for saving deported or nignen
Lutea. Belgian and Norwegian Jews.
Is peneral, I 57 convinces that the creation of
inz LAS Delped emergency 10 30/1 all
Regraded Unclassified
38
- 2 -
:nese governments conscious of their responsibilities in
this matter. I came back from London with the definite
imoression that all these governments, not excluding
the British, will sooner or later follow the policy of
the American Government, which today, is the farthest
ahead in its understanding and methods. But the initiative
will have to continue to come from Washington. As regards
Great Britain, public opinion was also greatly impressed
by the creation of the War Refugee Board, as indicated by
numerous articles in the British press. wide sections
of Parliament, especially the Committee to save the victims
of the Nazi terror, of which Miss Eleanor Rathbone, M.P.,
is the leading member, were ready to renew their public
campaign in order to get the British Government to adopt
policies similar to those of the War Refugee Board.
Nanum Goldmann
Regraded Unclassified
39
TELEGRAD SENT
PLAIN
March 25, 1944
U.S. URGENT
AMEMBASSY,
LONDON.
2277, twenty-fifth.
FOR WINANT
Mr. Taylor requests that you suggest to Emerson
that Malin's participation in proposed conversations
in Washington will be helpful and that he arrange to
have Malin come to Washington with him.
HULL
(GLW)
WRB : GLW
3/25/44
Regraded Unclassified
PARAPHRASE or TERM DC
TROM
Secretary of State, Washington
TO:
AMENBASSY, London
DATED:
March 25, 1944, 5 p.m.
NUMBER: 2292
CONFIDENTIAL
Department's telegram of January 14, 1944 no. 371
1s referred to herewith.
One of the most pressing and immediate problems
before the War Refugee Board is the finding of havens
where refugees may remain for the duration of the war,
In the opinion of the Department and the Board,
Cyrenaica and Tripolitania might be suitable for this
purpose.
Ever since the Bermuda Conference, at which it was
specifically recommended that admission of refugees to
Cyrenaica be considered by the British, Cyrensica and
Tripolitania have been under consideration as havens.
Thereafter, when agreement was reached to consider a
refuge camp in North Africa, the President in a message
to Prime Minister Churchill commented on his interest in
the possibility of using Cyrensica and Tripolitania
as havens of refuge. The suggestion was again made to
the British informally in the manner described in the
aforementioned cable as recently as January of this year.
No decision has apparently yet been taken in this
important matter although many months have passed. It
18 requested that you reopen the matter at once and
raise with the British Government the question of using
Cyrenaica and Tripolitania as havena of refuge, subject,
of course, to the later approval of the Combined Chiefs
of Staff. The consent of the British should be secured
before any approach is made to the Combined Chiefs of
Staff, You should inform the British Government that
this Government is prepared to share the responsibility
for financing the establishment and naintenance if
cause in Cyronatics of Tripolitania, including the cost
of transporting the refuges is Date - Ye are
earliest
Regraded Unclassified
-
confident that part of this cost say be borne by private
refugee agencies 15 it later seens desirable, The
transportation problem can be worked out cooperatively
between the British Government and ourselves,
With respect to Cyrenaica and Tripolitania a
division of obligations and responsibilities between the
two Governments, similer to the case of the transfer of
refugees from Spain to North Africa, can be worked out.
It is extremely important that havens of refuge be
established in Cyrenaica and Tripolitania. The War
Refugee Board 1s convinced that there is a real opportunity
for bringing many refugees out of occupied areas,
especially from areas contiguous to Turkey and the Black
Sea. The Board is determined to do everything it can to
rescue refugees in as large numbers as possible, as you
have previously been informed, Once these refugees are
evacuated to Turkey it is important that areas be found
to which they can be removed expeditiously.
For this purpose camps in Cyrenaica and Tripolitania
could be used, Also such camps would facilitate the
escpae of refugees from other areas. For instance,
refugees from Southern Italy can be removed from camps
there to Cyrenaica and Tripolitania, thus making room
for other refugees who are successful in escaping from
Itelian occupied areas,
It is requested that you give your urgent and per-
sonal attention to this matter and inform the Department
of the progress of your conversations at the earliest
possible moment.
HULL
Regraded Unclassified
PARAPHER J
FROM:
Secretary of State, Washington
TO:
AMEMBASSY, London
DATED:
March 25, 1944, 9 p.m.
NUMBER: 2303
CONFIDENTIAL
The message given below refers to our telegrams of
February 29 and March 10, 1944, nos. 1503 and 1812,
which partially presents the steps the War Refugee Board
has taken or is prepared to take in order to implement
the Board's announced policies. The more detailed state-
ment given below is for the British and refers to
remittances of funds and similar transactions which have
been authorized following the War Refugee Board's
recommendation.
Relief and specific rescue projects:
A number of private organizations in the United
States have been granted authority to carry on evacua-
tion and relief operations in occupied Europe. Follow-
ing the Board's recommendation, the Treasury Department
has issued licenses granting the representatives of these
organizations in Switzerland permission to finance their
operations by acquiring the requisite local currency if
necessary from persons in enemy territory against the
payment of free exchange and to carry on such communica-
tions as may be necessary with persons in enemy territory.
The Board, Treasury and State Departments have taken the
position that in these cases the main consideration is
the saving of lives and that this is paramount to the
possibility that certain amounts of free exchange may
become available in enemy territory. Among the relief
and rescue projects the execution of which has been
facilitated by the Board and which have been sponsored
by private organizations are the following:
1. fracuation from
Regraded Unclassified
1. the how M are
(m) Incurtion de Ind Chiltren.
There has been issued 5. license for one rescue pro-
gram involving abandoned children in hiding in
France numbering several thousand who may be deported
to Poland in the near future. Attempts are being
made to sustain and keep alive these children in
France but they cannot be brought into Switzerland
in large numbers until some assurance 1s received
by the Swiss Covernment that the children will be
removed after the hostilities end. The Board has
proposed that this Government give the Swiss
assurances that American visas will be granted to
4,000 children from France entering Switzerland
and that removals will be granted for these visas
as necessary.
(b) The removal of Political and Christian
Refugees and Scholers. Also steps have been taken
by the Board to facilitate the operations which
several private organizations are carrying out
designed to rescue end give relief to political
end Christian refugees and scholars who have been
unable to leave France. Upon the recommendation
of the Board, the Treasury issued licenses to make
funds available in Switzerland for use in carrying
forward this program.
(c) World Jewish Congress Program. With the
aid of the Board, the World Jewish Congress has
worked out a program to evacuate refugees into
North Africa, Switzerland and Spain from Rumania
and France. The Treasury Department has issued
licenses authorizing the necessary operation up to
8 total cost of $100,000 of which amount $25,000
has already been sent to Switzerland.
2. Evacuation from Poland to Hungary.
Between the Nar Refugee Board and the Union
of Orthodox Rabbie of the United States and Canada
there bas been worked out a plan to emounts Jess
(rm Poland to Hungary. In Hungary there 678 14/-
KW do are is - position to att refune seress
the
Regraded Unclassified
the Polish border late happy shore there is
already . large Jewish community to help the
refugees and aid them to become absorbed into the
Rungarian economy. The Union has been granted
authorization to communicate with and transmit
funds to these persons. To meet the requirements
of this plan, $100,000 has been sent to Switzerland.
3. Program for Feeding Internees in Crostia,
Hungary, Rumania and Czechoslovakia.
The International Red Cross has informed the
Intergovernmental Committee of an urgent need for
funds to purchase foodstuffs for distribution to
internees in Czechslovakia, Rumania, Hungary and
Croatia. A large private organization in the
United States privided $100,000 at once after an
approach was made by the Board. Under Treasury
Department license, this sum has been remitted to
Switzerland which permits the buying of the required
foodstuffs not only in neutral countries but in
Hungary and Rumania as well.
4. Plans for the Relief of Refugees in Shanghai.
Relief is presently being administered to 10,000
stranded refugees in Shanghai pursuant to licenses
granted by the Treasury Department at the request of
the Board to two private organizations. Authorization
is given by these licenses for the borrowing of funds
in Shanghai against a promise for reimbursement after
the war's end.
HULL
Regraded Unclassified
BJR - 5
London
This telegrem must be
paraphrased before being
Dated March 25, 1944
communicated to anyone
other than 8. Governmental
Rec'd 9:20 p.m.
agency.
(BR)
Secretary of State,
Washington.
2453, March 25, 10 p.m.
Please inform Leavitt Schwartz has departed for
Lisbon (see Embassy's 2245, March 20, 5 p.m.) and
Department's 2224, March 23, midnight, therefore has
not been delivered.
WINANT
WTD
Regraded Unclassified
= $
100
11
AIRGIAM
To the American Embassy
Port-au-Prince, Haiti
Reference to your report No. 2521 of January 31, 1944.
It was a source of satisfaction to the War Refugee Board
to learn of President Lescot's plan to make available $10,000 to
be used in refugee work. Your report of February 10, No. 2559
brings further encouragement through the announcement of the
establishment of a committee by President Lescot for the aid
of refugees and by the fact that a portion of the above sum has
been made available for immediate use.
Please express to President Lescot the sincere appreciation
of the War Refugee Board.
If a definite plan presents itself in which Haiti can
render concrete assistance, it will be submitted to you for your
consideration and counsel. The Board is aware of the limited
possiMities in Had ti for a program for the immigration into
Haiti of refugees, but it hopes that small numbers "If TOABL may
be absorbed by the Republic.
ALaughlinilr 3/24/44
Regraded Unclassified
am 3, 1944
- X
4242 M.
from for infuge Board to Screet
Please deliver the following message to Joseph J. Schwarts,
242 Rua Aurea, Lisbon, from M. A. Leavitt of the American Jewish
Joint Distribution Committee:
"Can Saly Mayer make discreet inquiry regarding request
for funds to rescue Jews from Northern Italy made by Donati,
Volobrand, Lopez as repre sentatives Italian colony. Cable
reply"
FHilab 3/24/44
Regraded Unclassified
1 ID?
no:
nome 27 THE -
é
AMERICATION. LISNE
DATED:
MARCH 25, 1944
NUMBER:
860
CONFIDENTIAL
The following ie the substance of a message from the
War Refugee Board from Joint Distribution Committee for
Joseph Schwartz, Care of Donald Hurwits, 242 Rua Aurea,
Lisbon.
Nothing is known here regarding any remittance of two
hundred thousand dollars for medical supplies and food to
Intercross. Joint Distribution Committee remitted one hundred
thousand dollars for purchases of food and other supplies in
Switzerland, Hungary and Rumania to be distributed by Inter-
cross in Czechoslovakia, Hungary, Yugoslavia and Rumania.
Our first remittance of one hundred thousand dollars to Ankara
probably cause the confusion. An inquiry as to who remitted
two hundred thousand dollars should be made through Saly Mayer
from Intercross. The Joint Distribution Committee is prepared
to make an initial grant of one hundred thousand dollars for
expense of bringing children into Spain. If abandoned children
are brought from France to either Spain or Portugal, we expect
United States Committee guarantee will be available. We have
requested Washington to confirm this to the Legations in
Spain and Portugal so that required assurances can be given
to each country. We have remitted tan thousand dollars to
you for Portugal under special license no. W-2134 and twenty-
five thousand dollars under special license no- W-2155 as first
installment toward expense of children from France into Spain.
The Legations in Madrid and Liebon will supply you with in-
formation about these licenses. It is especially important
that you ascertain London policy and procedures with respect
to issuance of certificates for Palestine after March 31. It
is sincerely hoped that the procedure can be greatly simplified
80 as to facilitate the issuing of certificates with the least
possible delay taking into consideration the potential emigration
from the countries of the Balkans. You should keep us informed
through the War Refugee Board and the Legations.
Regraded Unclassified
AMERICAN LEGATION
Liabon, March 25, 1944
Subject: Transmitting Reports and Suggestions from
Lisbon Representative of Torld Jewish Congress
in Connection with Tar Refugee Board
The Honorable
The Secretary of State
Washington, D. C.
Ste:
I have the honor to refer to the Logation's despatch
no. 217, February 16, 1944, transmitting memoranda containing
comments and suggestions from four relief organizations in Lisbon
on the subject of relief for the victims of Nazi oppression in
Europe, and to submit herewith two additional reports, with en-
closures, prepared on the same subject by Mr. Isaac Teissman,
local delegate for the World Jewish Congress.
It will be noted that in both his reports Mr. Teissman
advocates Portugal as a reception center and first point of refuge
for persons evacuated from enemy-dominated areas. On page 3 of
Ma report entitled "Children in Distress", accompanying his
letter of March 17, 1944, he states his reasons for preferring
Portugal to Spain for this purpose. "ith these reasons I are essen-
Mally in accord, assuming that Portugal would grant entry permits
Regraded Unclassified
SD
substantial minber of such refrigers 10! the this cointry
be assured that, within a reasonable period of His, the
admitted will have 9 further destination. In has second
secort, however, accompanying his letter of March 20, 1944, he sug-
jasts that Portugal be requested to admit ten thousand refugees.
I am confident that Portugal not only would not, but could not
accede to such a proposal. The number of permanent refugees now
in this country has for some time fluctuated between 700 and 800
persons and existing facilities for their care and supervision have
been somewhat taxed. Hotel and housing accommodations are such
that an influx of only an additional one thousand persons, as
occurred at the time of the recent "GRIPSHOLM" exchange, leaves
hotels and pensions in the Lisbon area completely occupied. Like-
vise, it is now nearly impossible to secure housing accommodations
in the town of Caldas da Rainha, designated for forced residence
of refugees, although only some 300 persons are now segregated
there. Any considerable number of persons admitted into Portugal
would, in order to be accommodated, have to be dispersed through-
out the whole country. For political and security reasons, in
view of the small area and population of this country, I am sure
that the Portuguese Government would refuse entry to "s large
number at once.
The greatest factor, however, tending to operate as B.
deterrent to Portuguese acceptance of Mr. Weissman's proposal,
is that of food supplies sufficient to maintain any additional
influx of persons. The country has long been an importer of
road supplies, and current poor crops coupled with shipping
shortages, have necessitated a curtailment of food supplies to
restaurants and hotels, as well as a carefully regulated con-
sumer rationing system. The present relatively small population
of Portugal is constantly confronted with the fact or the
probability of shortages of verious types of foods, and this
food problem 1a always an element in the granting of any indiv-
idual visa to Portugal, let alone visas for some thousands of
persons.
I de not believe that the economy of Portugal can, without
assistance, support Q8 any as several thousand additional
refugees. Likesine, because of existing shortages, I do not
Regraded Unclassified
51
feel that the Portuguese Red Cross will be able to transmit any
large quantity of food parcels to refugees in the concentration
camps of enemy-dominated Birope, unless such food is supplied
by the Allied Nations.
Respectfully yours,
For the Minister:
Edward S. Crocker
Counselor of Legation
Enclosures:
1. Letter of March 17, 1944,
with report and enclosures from
World Jewish Congress, Lisbon
2. Letter of March 20, 1944,
with report and enclosures from
World Jewish Congress, Lisbon
300
MCR/mvd
Regraded Unclassified
a
E
I
for
and Spelms
330 Test at street,
Tasac "visomen.
Yes Took
Lisbon, March 17th, 1946
Dear, Mr. Crocker,
Referring to our conversation of yesterday,
I enclose a Report (confidential) as suggested by you
and should you require any further information I am
entirely at your service.
with regard to your very kind offer to
intervene together with your British colleague with
the Portuguese Police, I would like to draw your
attention to the fact that Mr. J. Hart, of the British
Embassy, has already had satisfactory conversations
with the Chief of Police regarding the rescue of the
children.
I saw Mr. Hart again after our conversation
who informed me that he was only awaiting instructions
to go ahead immediately.
I should be extremely grateful to you if
would come to a very early decision with your colleague
of the British Embassy as you can readily understand
that the matter is an urgent one.
I would like to repeat that my collaborators
the Uni and the American Friends Committee are
in complete accordance with our plan.
Yours sincerely,
/=/ Issae "eissman.
Edward J. Crocker, Require,
Legation of the Itates of and
LISBON
Regraded Unclassified
53
to
Street,
Tes
Tast.
Dosar
CONFIDENTIAL
Report.
CHILDREN IN DISTRESS
The Life of Jewish Children in France
is in grave danger
Last December we received reports from France, gathered in
the month of November, informing us that the Germans were
organizing a hunt against the remaining Jewish children living
in hiding in France, and that some of the reception centers had
already been ransacked by the Gestapo and the children and
personnel deported en bloc immediately. These reports make
special mention of the Brout-Verbot center, directed by Mr.
Joseph Cogan; the arrest of l'adame Nicole Teil, who directed
the Jewish welfare societies in Nice and the closing of many
reception centers in Savoy, the regions of Marseille, Nice,
Limoges, Aveyron, La Creuse, etc.
Te immediately applied to the French Government in Algiers,
in the persons of Monsieur Masigli, Foreign Minister and
Monsieur Mendes-France, Finance Minister, requesting them to
appeal to the population of France to assist in saving the
children from certain death by keeping them hidden from the
German authorities. Attached are copies of this correspondence
for your information. This request was complied with, as can
be seen from the attached copies of letters from Monsieur
Mendes-Prance, dated January 3rd and 21st, 1944.
" are, however, fully sware that these measures are only
pullistive ones and that the persecution of our children 1s
likely to treat out again with unpredictable strocities in its
trail. The only certain My Te have of seving then is to get
the mst Trance and any from the clutches of the Germans.
Regraded Unclassified
54
India, I Trieury 1st, 1944, I wrote 1 further letter
of which letter I am do attaching
- requesting the Tread Covernment to help de to evacuate
these through their underground organisation, or through
realing want the illied Nations rescue facilities.
In the meuntime, to be precise on February 19th, 1944, I left
for London for the special purpose of discussing with our organi-
sations the possibilities of rescuing our children from France.
It was agreed that our immediate efforts be concentrated on this
task.
It became clear to us that this rescue work could and
should be possible in view of President Roosevelt's recently
created War Refugee Board. In this order of ideas, Dr. Nahoum
Goldman, president of our Administrative Committee, has submitted
to the United States Ambassador to London a plan of rescue which
(r. Wynant forthwith cabled to Washington with his recommendation.
On the other hand, ne contacted the Polish, Dutch and Belgian
Governments and with the London representatives of the French
authorities in Algiers. To all these Allied Governments we
appealed for help through their underground channels for evacuat-
ing Jewish children from France.
These negotiations had the following results: - The POLISH
Government, informed us through their Minister of Interior
Monsieur Benacyk, that they fully agree to assist us in this
task through their own special channels and specified that they
had received information from their offices in Spain that this
could be done on a large scale and that they propose to utilize
these facilities to their full extent for bringing important
groups of children across the border.
The DUTCH authorities informed us, through the Chairman of
the Governmental Repatriation Committee, Vonsieur Ferwerda,
that they are willing to place at our disposal, and to that of
the rescuework of Jews in general, important sums of money. On
the other hand, from our conversations with the heads of the
underground organisations resulted the following:- 1) Recommenda-
tion to a person actually in London who would personally organize
such rescue work for us, for which effect this person would
leave London; 2) Their connections in Lisbon and Madrid would
be Informed of my return to Lisbon and Instructed to grant (11) all
possible assistance.
Regraded Unclassified
the not arthorities If chistred INC interview x(t)
Torris, head of the Tranch Delegation in Lmin. -
der Borris In the first place rebled sur suggestions that -
special department be created by then in accordance with the
sims of the Tar Refugee Board, to Algiers. Secondly, and after
consultation with their respective underground connections,
Monsieur Borris inforced us that they had decided to create a
special team which would be used in our rescue work, and cabled
to Algiers submitting 8 plan by which 8 number of young men and
women would be enrolled and start work after a six weeks'
period of instruction. At the same time, they for their part
and our organisations themselves are taking steps to obtain from
the respective British authorities an agreement to these French
decisions.
The decision of the BELGIAN authorities is not yet known to
our organisations, but I expect to hear of them from London
within the next few days.
To all this we must add that we have already succeeded in
rescuing some children who left on the s/a "Nyassa" and have
already arrived in Palestine. These rescues were made possible
through the offices of professional smugglers, which course
involves immense funds.
On my return to Lisbon, on March 12th, I found a letter
awaiting me from our connections in Barcelona informing me
that four more children had arrived there in the meantime and that
twenty more were expected at the end of this week.
Thilst in London I was also informed that a Monsieur Jean
Chatain (formerly a well-known French official whose connection
with this case can be explained verbally) who lives in Madrid,
is conducting conversations with Count Jordana, Spanish Foreign
Minister with a view to obtaining permission from the German
authorities for the release of children up to 10 years of age
registered by the Germans. These registered children number
between 2,000 and 3,000. Monsieur Chatain requests us to
guarantee transport and maintenance expenses should these en-
deavors be successful. On by return to Lisbon, I telephoned
through to Monsieur Chatain who confirmed his efforts and ex-
pressed his hopea of good results. I wrote his on Merch 14th
and sttach - cosy of #) letter,
Regraded Unclassified
Y NUM M . Card Ter magtin entere to be
created La el not in Spain - 23 22 should to
resier so to setain persician for these
centers to be organized; 2) Provier notrition facilities;
3) Pag dillities of departure to final destinction older than
In Spain.
Once the Portuguese authorities consider fevourably the
creation of reception centers in Portugal, the Spanish author-
ities will raise no difficulties of letting children through
whose identification or other documents have been taken by the
German authorities. But to obtain this agreement of the local
authorities, the International Police will have to be approached
at once and directly.
The necessary means for the instalation, feeding and
clothing of these rescued children will at first hand be pro-
vided by us. But no sooner do we obtain the permission of the
Portuguese authorities than we shall be able to contact the other
locally represented organisations, such as the Joint, the American
Friends Service Committee and the Unitarians with a view to their
participation in these expenses. On the other hand, as soon as
the nationality of the children can be ascertained, the respective
Ingations will be expected to care for their nationals.
-END-
Regraded Unclassified
57
/ - Invoice,
TID 77"15" DONORESS
Delegate for
Portugal and Spain:
330 West 42nd Street,
Isase Veissman.
New York.
Lisbon, March 20th, 1944
Dear Mr. Crocker,
Following up my letter of March 17th, and at
your request, I now enclose our suggestions for
further rescue work, in connection with the WAR
REFUGEE BOARD recently created by President Roosevelt.
No doubt I shall hear from you in this respect,
and, needless to say, I await your views with the
greatest interest.
Yours sincerely,
(Signed) Isase Meissman.
Enclosure.
Edward J. Crocker, Esquire,
Legation of the United States of America,
LISBON.
Regraded Unclassified
TAX TO TRACTING TAXE III
DOCUPIED III VITY If D
BOARD BY PROSIDENT
Thilst such European neutral countries as Sweden, Switzer-
land and Turkey have offered asylum to tens of thousands of
=gr victims, such refuge has so far been refused by Spain and
Portugal and only transit visas have been facilitated.
It is also B. fact that whilst tens of thousands of refugees,
fleeing from certain death and travelling without papers, have
in the former countries automatically been legalized and received,
those unfortunate persons who clandestinely crossed into Spain
or Portugal were imprisoned and, in Spain, even concentrated
into camps. This consciously inhuman attitude on the part of
Spain must be attributed to the influence and demands of the
Germans.
On the other hand, Portugal's anxiety for strict neutrality
has led her to misinterpret her role in this connection, and to
overlook her humanitarian duty as a neutral country in the face
of such overwhelming European disaster.
It must be said in all fairness, however, that the Portu-
gase authorities have always lent a sympathetic ear when
approached on humanitarian issues. Towards the end of 1942,
we intervened in the question of clandestine immigrants, at
that time 3 delicate one, but the Portuguese showed understanding
und came to the agreement hard out in the enclosed photostat
of a letter dated December 12th, 1942. Thanks to this arrange-
ment, the total number of these so-called illegal immigrents
(shout 200), living in hiding in this country, were legalized
and about 50 more released from prison, amongst which latter
number were come who had been for more than 1" months in custody
For no other reason then that of having entered the country
without visas. To all these, refuge was granted at Priceira,
under 18 regist or enforced residence, as suggested by us. This
141 - Pan weeks later to the release by the Spenish authorities
and intenquent Ingalization) of thousands of refugees from
- *VIN of ay large number from the concentration cares
Regraded Unclassified
59
conth - -
at authorities - approached kg & Trited Date and
initals, total mill " to participate is
0+ in V: " undertaken through the the of the
= WE 30%
The Torld Jewish Congress submite the following three points:
1) In our opinion, it would not be exaggerated to apply to
Portugal for permission for entry into this country of some
TTN THOUSAND REFUGETS. To give the example of Switzerland,
where supplies of food are much more difficult to obtain
then in Portugal, but who nevertheless has so far taken sixty
thousand refugees. In this way, numberless people could be
anved from Slovakia and Hungary. Portugal would have to.
guarantee refuge to these ner arrivals until after the war,
but on the other hand, the United States and Great Britain
should guarantee to Portugal their evacuation up to a period
not exceeding one year after peace.
2) Portugal should also immediately authorize the Portuguese
Red Cross to transmit food parcela, such as chocolate, coffee
and other essential foodstuffs, on a large scale to the con-
centration camps and ghettos for the purpose of saving the
interness from certain starvation. At the same time, parcels
of old clothing should also be permitted to be sent via the
Portuguese Red Cross - as this channel 1a the surest means
of ensuring their safe arrival at their ultimate destination.
2) Ince permission 1s granted by Portugal for the entry of
the 3000 registered Jewish children in France, an urgent
sppeal should be made by the Portuguese clergy to obtain
their Immediate release by the Germans.
These steps should be undertaken only -ith the will offi-
clal and solemn support of the Portaguese Government, one, in-
atdentally, the more the Portugueze Press campaigna for thene
measures, the wider the possibilities of success.
in the other heal, Portugal mgt " insured that no
November allobrative la registion -11) this plug =!11 he
- let, - that the en " generated O+ []-
NV -
Regraded Unclassified
60
" believe that 12 agreement with the Portuguese authori-
time mill have immediate repersension with the Spanish autho-
rities, $5 vitness the example given in the last sentence of
para. i, page 1.
Regraded Unclassified
PARAPERASE 7 TELEGRAM RECEIVED
FROM:
American Legation, Bern
TO:
Secretary of State, Washington
DATED:
March 25, 1944
NUMBER: 1840
CONFIDENTIAL
Following is the substance of a message for
Dr. Stephen S. Wise, President, World Jewish Congress,
330 West 42nd Street, New York, from Gerhardt M. Riegner,
World Jewish Congress. Geneva:
Because of recent political developments in Hungary
I'm most angious about latest report Hungarian Jewry
numbering about 800,000 and only existing important section
European Jewry. Anglo-Saxon personalities, Jewish and non-
Jewish, including leaders of Protestant and Catholic
Churches and outstanding Americans of Hungarian origin
have suggested that a world-wide appeal beaddressed to
Hungarian people warning them to endeavor to keep Jews by
every possible means from falling into German hands and
not to permit application of policy of extermination of
Jews by Hungarian Quislings or German butchers.
that one of the most important tests of behavior to
be considered by the United Nations in post-war peace
settlement will be the attitude of the Hungarian people
towards Jews should be particularly a part of the warning.
Similar broadcasts should be made in Hungarian
language every night during the next few weeks.
HARRISON
Regraded Unclassified
PARAPHRASE OF TOPA ESCEIVED
FROM:
American Legation. Born
TO:
Secretary of State, Washington
DATED:
March 25, 1944
NUMBER:
1850
CONFIDENTIAL
Reference is made to Legation's telegram of March 23,
no. 1774.
It is stated by Intercross that recent developments
in Balkans necessitate change in entire plan of action
and that they doubt whether it is possible to obtain
from Hungary any more foodstuffs. In a few days Inter-
cross will report further, according to their statement.
HARRISON
Regraded Unclassified
PARAPYRANT 28 can 100m
no.
americas Legative. in
70:
Secretary of State, Weshington
DATED:
March 25, 1944
NUMBER:
1851
CONFIDENTIAL
Given below is the substance of a message for trans-
mission to World Jewish Congress at Department's discre-
tion from Gerhart Riegner (see my cable no. 1160).
Have transmitted Bo far 4,000,000 French
france to France against the counter value of
71,600 Swise france. In order to include Belgian
Jews in evacuation action and place at their dis-
posal through France sums for evacuation from
Belgium to France, working arrangements have been
established with the National Committee for Defense
of Jews in Belgium affiliated to Belgian Front
of Independence. Correspondents in Holland
authorized to raise local currency up to 12,000
Swise france for evacuation of Dutch Jews to France
from where evacuation may be financed by French
center. Similar measures are being negotiated for
evacuation from Northern Italy and 15,000 france
are being reserved for this purpose. Several
hundreds of persons have been hiding until now in
Nice region provided with Aryan identity papers
and ration cards. Similar measures have been
taken in Paris whence several hundreds have been
transferred to less dangerous regions and are
awaiting evacuation. Last weeks first contingent
of fifty persons have been sent to Spain by our
evacuation center in Southern France; all arrived
Further groups active Spanish frontier are helping
others cross and when relieved are ready to cross
themselves. A certain number of children have been
placed with non-Jews. Last week approximately 120 -
children passed the Swies frontier. A certain
number of persons, especially compromised in
resistance movement, have been hidden and their
arrest prevented. Prospects of further action are
encouraging especially since Spring will facilitate
the crossing of the Spanish frontier. The transfer
of an additional $50,000 is urgently requested for
enlargine at continuation of rescue activities.
In no any should the above information be disclosed.
concernally that months Switzerlant, which to
cirictly confidential.
WINT
Regraded Unclassified
National = - -
TO:
below les
100
Secretary of State, Washington
DATED:
March 25, 1944
NUMBER: 1852
CONFIDENTIAL
Reference is made herewith to my cable of March 25,
no. 1851.
The summary report from Riegner regarding the third
financial transaction undertaken in accordance with
license Y-2115 as amended,
Arrangements have been made by Riegner to purchase
2,000,000 French francs from Rene Bickert, stated by
R to be E. Swiss citizen and a prominent member of the
Geneva Jewish community. The rate is 1.78 Swise france
per 100 French france. Until presentation of receipt
signed by R's representative in France, the Swiss francs
counter value deposited with Armand Brunschvig former
President Geneva Jowish community. It is stated by R
that Bickert has produced convincing evidence of owner-
ship of several millions French francs in investments in
France dating from before the war. In view of the neces-
sity to take advantage of the possibility of communications
with France, he states that he is unable to consult
Legation before arranging the transaction, R states that
the above names are not to be divulged under any
circumstances,
HARRISON
Regraded Unclassified
1853
CONFIDENTIAL.
The following message is for Tar Refuges Board's
sitention.
: e refer herovith to your telegram of March 24,
1944, no. 991.
A distributing agency servicing 165 Swiss papers
will be given the President's statement.
One hundred or more will carry it, according to
,ast experience. To will contact several leading
editoriel writers with a view for favorable comment.
it will approach two well-known Swiss commentators and
auk them to give the statement prominence during their
broadcest.
The official Swiss radio will be requested indirectly
to broadcest the announcement in German and French as a
news item. Clandestine tracts will be printed and dis-
tricuted across the border. it is suggested that
jusflets be on chews territory by Allied street.
Regraded Unclassified
N. -
10s20 M.
ENERA -
From Mr Refuges lours to farriers
Please deliver the following message to Isaac Sternbuch,
3 Teufener Strasse, St. Gallen, from the Vaad Hahatzala Emergency
Committee:
"Greatly concerned fate Lithuanian Jews. Do everything
possible to save maximum number especially great religious
leaders Stop Take all available addresses from Boteko, Eis,
Erlanger and others Stop Consult Griffel in Turkey about
all phases rescue work send him money for rescue if re-
quired. Expand rescue work in every way. Give us concrete
plans and money will be no object. Advise if received
answer from Shanghai. Please send periodic reports on all
phases of rescue program."
FHilab 3/23/44
Regraded Unclassified
March 3, 1944
3:30 p.m.
CABLE 20 HARRISON FROM WAR REFUGES BOARD
Please deliver following message to the Inter-
national Red Cross, Geneva, from War Refugee Board:
"In view of German occupation of Hungary, War
Refugee Board urges that Intercross send effective
representation to Hungary in order to protect the
well being of groups facing persecution"
FHilab 3/25/44
Regraded Unclassified
w $
10g20 &
CARLE 20 TANGIER
From War Refugee Board to Childs
Please deliver the following message to Renee Reichman,
25 Rue Moliere, Tangier, from Rabbi Abraham Kalmanowitz and Stephen
Klein of Vaad Hahatzala:
"Green wald received your letter detailing possiblities
send food parcels to Jews in ghettos Stop We guarantee
payment up to $3,000. Send immediately parcels to all pos-
sible ghettos of Slovakia, Poland, Lithuania elsewhere Stop
Contact Aaron S. Cohen Stop Availability of further funds
dependent on licenses which will be issued providing you
can let us have information assuring War Refugee Board
packages delivered to bonafaide persons. Contact American
Legation Tangier consult reply via Legation"
FHilab 3/14/44
Regraded Unclassified
Barth 25, 1044
10:20 1.2.
CABLE TO STEINHARDT FOR HIRSCHMANN FROM WAR REFUGEE BOARD
This is WRB Cable to Ankara No. 14 - Refer your No. 465 of
March 16, 1944.
Notwithstanding delay in transmission to Washington, Board
desires to have pictures of evacuated refugees coming from Balkans
through Turkey. Board appreciates your caution against publicity
in the United States at this time regarding your efforts in Turkey.
Pictures will not be used until you agree to their publication.
FHilab 3/24/44
Regraded Unclassified
P
IST
This telegra must be
March 25, 1944
peraphresed before being
communicated to anyone
1 p.m.
other than a Government
Agency. (BR)
PLAIN
AMEMBASSY,
ANKARA.
256
FOR HIRSCHMANN FROM PEHLE.
This is War Refugee Board's No. 9.
Your return to the United States to report to the
War Refugee Board has our full approval. We are taking
up with the War Department the matter of priority. The
swell job which Ambassador Steinhardt and you have done
has received the highest praise. We obviously desire
the continuance of your activities on behalf of the
board and I will discuss this with you when I see you.
HULL
(GLW)
HULL
7/22/44
IS
Regraded Unclassified
I - 5
1
CARE 20 and
From War Refugee Board to "mbastador Steinhardt.
Re your 508. Army Transport Command Cairo has been requested by
War Department to grant Hirschmann No. 2 priority.
This is Ankara Cable No. 15.
WStewart: pdk 3/25/44
Regraded Unclassified
X
issn
Dise Wign at X
paragement before bets
2nted March =, 2544
comminted to
other the - Gevernmental
3ec'd 11:22 7.0.
agency. (BR)
Secretary of State
Washington
525, March 25, 10 p.m.
FOR DEPARTMENT AND WAR REFUGEE BOARD. Ankara's
number six,
Hirschmann who plans to leave here March 30 en
route to Washington has requested that there be
available for him immediately upon his arrival a
full set in paraphrase of all tolegrams which have
been exchanged with this Mission relating to his work.
STEINHARDT
EDA
Regraded Unclassified
PARAPERASE or mm RECEIVED
7ROM:
American Embursy, Ankura
TO:
Secretary of State, Washington
DATED:
March 25, 1944
NUMBER:
527
CONFIDENTIAL
The following message from Hirschmann for the WRB.
No. 8.
Reference is made to Department's cable No. 230.
For over a month, we have been aware of the desire of
certain individuals to make use of Bulgarian boats MILKA
and MARITZA to transport Jewish refugees from Constenza to
Istanbul but due to objection of International Red Cross
representative in Bucharest to the use of these two vessela
as unseaworthy. have taken no action in the matter. On the
other hand, since the BELLACITTA is regarded as seaworthy,
we are attempting to expedite her from Constanza which is
being delayed from day to day for a reason which we have been
unable to discover. Either the failure to receive Soviet
safe conduct thus far or some connection with illegal traffic
in refugees may be the reason for delay.
STEINHARDT
Regraded Unclassified
74
2299 -
1 of -
March 25, 1944
My dear Mr. Pehle:
I acknowledge your esteemed letter of March
24, 1944, with the enclosed copy of the statement issued by
President Roosevelt in behalf of civilian victims of the war.
It. is a pleasure to inform you that I have already sent
& communication to His Eminence, the Cardinal Secretary of
State, invoking every possible assistance by the Holy See,
through its diplomatic representatives, the Bishops and clergy,
that the lot of these unfortunates may be rendered less difficult.
I am confident that the Holy Father personally, and the
agencies of the Holy See will cooperate to the utmost in the
humanitarian cause,
With the assurances of my highest consideration, and of
my deep personal regard, I remain
Yours very sincerely,
/s/ A. G. Cicognani
Archbishop of Laodicea
Apostolic Delegate
Mr. John W. Pehle
Executive Director
War Refugee Board
cet Miss Chauncey (For the Sec'y) Abrahamson, Akain, Bernstein, Cogn,
DuBois, Priedman, Gaston, Hodel, Laughlin, Lesser, Luxford, Mann,
Vannen, Marks, MeCormack, Murphy, Poul, Pehle, Pollak, Rains,
Sargoy, Salth, Standish, Stewart, Weinstein, E. 3. litte, Piles
Regraded Unclassified
2
Information moded 4 to 10 L.K. 25th March 1544.
ADRIATIC On 19th combined British/Ameriean Commando
Force raided SOLTA Island. Entire German garrison of 106
liminated, 98 priseners taken. Our casualties 1 killed,
1 wounded. Germans reported evacuating HVAR.
2.
MILITARY
Italy 24th. CASSINO. Our troops have made little
progress. German opposition continues stubborn.
Russia Russians have crossed SERET North of TARNOPOL
and have cut road and railway thence to LWOW.
South of TARNOPOL in four days advance they have reached DNEISTER
at ZALESHCHIKI capturing much booty. They are fighting in
outskirts of PROSKUROV and BALTI and have captured VOZNESENSK
on lower BUG.
Burma CHINDWIN Strong Japanese attack repulsed with
heavy casualties and our attack on Japanese astride
road North West TUITUM and South of TAMU has made progress. Other
parties Japanese continue to advance parallel to and further
up roads to IMPHAL.
Hukawng Valley Chinese and U.S. Forces, despite Japanese
counter-attacks, are closing in on
SHADUZUP from North and East.
3. AIR OPERATIONS
Western Front 23rd/24th. 298 tons dropped at LAON and
51 at LYON.
24th. Fortresses bombed FRANKFURT 341 tons and
SCHWEINFURT 115 tons, both blind. Liberators bombed airfields
ST. DIZIER 414 tons and NANCY 84 tons. 51 Fighter hombers
attacked military constructions Northern FRANCE and 87 bombed
a NORMANDY Airfield, destroying a hangar and headquarters
building.
Day's Total:
Aircraft despatched: 593 bombers, 627 Fighters
Enemy casualties: 3 Fighters destroyed,
Our Casualties: 3 Fortresses, 9 Fighters missing.
24th/25th. Aircraft despatched:- REPLIN 811,
Mosquitoes against cirfields 19, KIRL, WINSTER and MISRIRG 15,
Intruders 38, Leaflets 5.
Berlin Preliminary reportes Visibility cood, benting,
though senttend at first, will medical later, Fire mill
grouped sainly to et DUT of City, 2 at
present outstanding. shot the 1 Fighter
3762 BERLIN Ares - bething lateged U.M R
in GER-ANY.
Regraded Unclassified
Brief German raid by 5 aircraft on Coastal districts
South East ENGLAND followed by attack by about 115 aircraft
most of which flew to GREATER LONDON. At least 5 destroyed
by night fighters. Bombs mainly incendiary scattered widely
over South Eastern Counties and LONDON where 23 Boroughs
affected but attack nowhere concentrated. One large fire
in city. Killed so far reported 26.
Italy
22nd/23rd.
Liberators and Wellingtons
:
dropped 161 tons at PADUA.
23rd. Marauders dropped 120 tons at FLORENCE railway
centre and Mitchells effectively attacked railway bridge at
PONTASSIEVE. Gun positions and transport in battle area
attacked by 123 fighter bombers: railway bridge hit near
ANCONA.
- 2 -
OFFICE
aff
Panrow
alle
of
2
of
the
SECRETARY
TREASURY
thes probably sink = 000 tan tanker off Dest
Barly 25th cae of E.M. Destroyers ranned and senk
-N/IO and took 2 German and 5 Italian prisoners.
ILITARY
ITALY. To noon 25th. CASSINO. No further progress
in town. Our forward troops who had been holding the feature on
MONASTERY HILL, called HANGMAN'S HILL, and other troops on a
feature southwest of the town were withdrawn night 24th/25th.
RUSSIA. Russians have captured PROSKUROV and have
widened their salient southwest of the town reching outskirts
KAMINTS PODOLSK. More progress southwest and south of MOGILEV
PODOLSK and north of RIBNITSA. Russians now within 2 miles of
NIKOLAEV.
BURMA. Chindwin. Japanese are increasing their
pressure against TAMU and have made more small infiltrations to-
words LIPHAL. HUKAVING VALLEY - U.S. and Chinese troops have 00-
cupied SHADUZUP.
3.
AIR OPERATIONS
/ESTERN FRONT. 24th/25th. BERLIN. 973 tons H.E.
and 1,267 tons incendiary dropped including 396 4,000-1b. bombs.
Medium cloud with some breaks. Visual identification possible,
but strong /inds met. A Mosquito pilot over BERLIN at 10.30 a.m.
25ch reported fires still burning and several colunns of smoke
vising from POTSDAMER end ANHALTER Station areas. German raiders
dectroyed - 5 by night fighters, 3 by A/A. 25th. 146 escorted
Marguders dropped 240 tons at HIRSON Railway centre in good
visibility with fairly good results. Intense A/A fire. Enemy
4. 3, 7. Ours 4 bombers, 2 righters missing
25th/26th. Aircraft despatched.
Railway Centre AULNOYE
(South East valenciennes)
192
sero engine works near LYON
22
BERLIN
10
HAMM
2
Intruders (1 missing)
13
Dec mining
12
Letilete
13
Regraded Unclassified
2
PLATT
listem
Intel Burdh 16, 1944
Sec'd 10:50 1.8.
Secretary of State,
Washington.
905, Twenty-sixth, 4 p.m. (SECTION ONE)
Department's 850, March 24.
President's statement on refugees was prominently
published in all Lisbon and Oporto morning papersof
March 25 with sole exception of A voz. DIARIO DE
NOTICIAS largest Portuguese daily printed statement at
top of front page as did PRIMEIRO JANEIRO leading Oporto
paper and JORNAL DE NOTICIAS of Operto. Other papers
carry statement prominently on main inside news pages.
Typical headlines were "United Nations fight for world
in which all reces may live with peace, honor and
dignity, says Roosevelt" and "Roosevelt appeals to free
peoples of Europe and Asia to give shelter to victims
of persecutions". Sending clippings by next air pouch.
NORWEB
KDA
Regraded Unclassified
BJR - 150
Lisbon
This telegram must be
peraphrased before being
Dated March 26, 1944
communicated to anyone
other than a Governmental
Rec'd 4:51 p.m.
agency. (BR)
Secretary of State,
Washington,
905, March 26, 4 p.m. (SECTION TWO)
No editorial comment has appeared as yet but will
endeavor to utilize press contacts to give statement
fullest discussion. We are arranging for commentary
over local commercial station.
NORWEB
EDA
Regraded Unclassified
- # - BITE
=
arrice Mary, Dayting
51
Decretary of State, Reliagion
DATED:
March 26, 1944
NUMBER:
531
SMORET
1. A cable requesting authorisation to explore in informal
discussion with Kung a new approach to the question of financing our
military expenditures was sent to War Department for Somervell and
Clay by headquarters on March 25. (It has been requested by us that
State and Treasury receive a copy of that cable). Of course, we do
not know whether Generalissimo and Kung will be more receptive to this
approach than to the ones made previously but it is felt by us that
it may offer an opening for a possible solution from the Chinese view
point, especially since it would accomplish the vitally important con-
sideration of saving the Generalissimo's face with respect to the
question of official rate of exchange. There is no need for us to try
to impress upon the Department how concretely and overridingly impor-
tant considerations of face are to Chiang or to the Chinese in general.
These are considerations which Var and Treasury officers, who have not
previously been confronted with the peculiar difficultion of dealing
with the Chinese, may not fully comprehend and therefore we express
earnest hope that the suggested approach will be given the support of
the Department, at least as basis for further discussion with Kung.
2. We are sending this cable urgently in order to communicate
the above information to the Department and make comments. In our
opinion, the question of trying to reach final agreement with the
Chinese should not at this particular time be rushed. If our under-
standing of the military factors involved approaches correctures, the
essential thing is to get the air fields and other installations con-
structed and in operation. Construction is going forward at the present
time and as long as the Chinese continue to advance funds for that
Regraded Unclassified
purpose and the with afreases at - reseonable apret, 15 sight not be to
- disadvantage If - definite be entre as the currtion of rate of -
varsion to avoided until completion of the construction project. No
understand that the principal and most urgently required fields will
probably be completed by the middle of next month and it would help carry
us up to that time if the proposal suggested by headquarters were dis-
cussed with the Chinese.
GAUSS
sh: copy
3-29-44
Regraded Unclassified
Earth 19, LOVER
8:18
LISFOSAL OF SURPLUS PROPERTY
Present: Mr. Bell
Mr. Sullivan
Mr.
Mr.
Mr.
Mr. O'Connell
Mr. McConnell
Mr. Thompson
Mr.
Mr.
Mr.
Tickton Gaston Haas Mack Frey Widmann Loeb Smith
Mr.
Mr.
Mrs. Klotz
H.M.JR: Afraid you won't find me in & very good
humor this morning on Procurement, Mr. Suilivan. In
the first place, I got these criticisms and I have got
the answers. If you don't mind my saying it, I don't
think the answers were at all satisfactory.
MR. SULLIVAN: I am sorry, Mr. Secretary. I
thought you wanted a factual report.
H.M.JR: Yes, but this doesn't answer the criticisms.
MR. SULLIVAN: You mean it doesn't explain them
away.
H.M.JR: Yes.
MR. SULLIVAN: I can't explain them away when we
have been wrong.
Regraded Unclassified
E.K.J.: Tes, but it doesn't say 30. You have
Iven them a sort of white-wash.
Mile SULLIVAN: I beg your pardon. I think not.
H.M.JR: I will prove it to you. Take this thing
on publicity, for instance, using direct mail circular-
ization - "We have never used paid advertising" -
"Mailing lists are developed from trade directories" -
and so forth. In other words, I call that white-wash
because it didn't give them satisfactory publicity.
(The Secretary refers to Memorandum of March 25, 1944,
from Mr. Sullivan, attached)
P.132
Months ago I suggested that every time they have
anything for sale they give it to the press room - give
out publicity, and so forth and so on.
MR. SULLIVAN: On a new technique, certainly. And
we have done that.
H.M.JR: Not only on a new technique, on every
article. The answer is, just using the old method.
When the Air Corps wanted to sell something, they had
an exhibit, and everything else, and they have let the
people come in and see the things. They bring it to
the public so the public knows.
MR. SULLIVAN: Yes, and we intend to do that when
we get stuff in volume to sell.
H.M.JR: What are you waiting for?
MR. SULLIVAN: Because we haven't got the stuff.
H.M.JR: What do you mean "stuff"?
MR. SULLIVAN: Not in any great volume.
H.H.JR: No new techniques have been developed. I
made suggestions as to how to bring it to the attention
of the public when DE have things to dispose of.
Regraded Unclassified
MR. SILLIVER: I leg year pardon, Lr. Secretary.
The trade magazines in automotive equipment have been
full for three weeks of our stuff. I will be glad to
get you a file on it.
H.M.JR: (The Secretary quotes from Memorandum of
March 25, 1944, from Mr. O'Connell) "There is no central
point where buyers can go to obtain direct information,
and certain regional offices offer items not of fered
through other regional offices."
That is the same thing on publicity.
MR. SULLIVAN: That is one of the things that I have
corrected. That is being set up here in Washington
right now. That charge has been true in the past.
There was no central inventory; there was no central
record.
H.M.JR: Where is there one now?
MR. SULLIVAN: Right here in Washington. It will
be partially ready by April 15. It will be in full
operation by July.
H.M.JR: How many million dollars are we handling
a month, now?
Mk. TICKTON: You only have thirty-two million
dollars on inventory on hand at the moment. Seven
milion of that is automobiles which are going to be
sold to Government agencies.
H.M.JR: Those same automobiles we were talking
about last December?
MR. TICKTON: No, they got them in January.
MR. SITL IVAN: Yes, seventy-five hundred, of which
there are now three thousand left.
Regraded Unclassified
That 10 inexcusable. est else de they
save?
HR. TICKTON: They have a very long list of items,
most of which are small amounts.
H.M. JR: What is some of the bigger stuff?
MR. TICKTON: They have some metal working machinery
which they have had on hand since January - some furni-
ture since January. The items that they got two weeks
ago, for example, were turned out two weeks ago. They
had a lot of steel and construction machinery turned
over in the same period they got it. The things they
have on hand now are primarily things they have had on
hand since January.
Everything they have had since January has been
turned over about the same time they got it.
MR. HAAS: Takes a couple of months.
Mk. TICKTON: The procedure they have set up would
take two months from the time they get the material
until it has been offered to the Federal agencies and
into the State and local governments, and then to private
parties. They allow two weeks for the Government to take
it, and another week for State and local governments, and
three or four weeks for private parties, so that in the
normal course it would take two months from the time
they get the material until it is disposed of and goes
to private parties.
MR. BELL: Is that a priority fixing?
MR. TICKTON: Government gets first crack at it, and
gets two weeks. If the Government wants it, they put
their bic in within two weeks.
Às far as automobiles are concerned, I LE told the
Government indicated they wanted thes, but they are tied
-> with getting allocations Government agencies and
Day spent 100m the st the bureau.
Regraded Unclassified
M...JR: I meant the 16th, 17th, and 18th of Decem-
ber. They told me to move the automobiles and move
them fast - these same things.
M.S. SULLIVAN: We didn't have them.
H.M.JR: I can't help it. You knew about them.
They have served notice on you for either six or seven
thousand passenger cars.
MR. SULLIVAN: We were going to get them.
H.M.JR: You knew about them - you had time. You
could turn around and sell them in a month.
MR. SULLIVAN: We have to give the other Government
departments their opportunity.
H.M.JR: What are we operating here for, just to
give automobiles to other departments? If they can't
get them, get them into the trade. To hell with the
Government people if they can't operate any quicker.
MR. SULLIVAN: I am sorry. The statute says--
H.M.JR: Why should I sit here and have to take
all the criticisms on the Hill? I would like to know
who is toanswer.
MR. SULLIVAN: I am to answer, Wednesday.
H.M.JR: And all of the last week and you wait
until Wednesday to answer it. The time to answer is the
same day.
MR. SULLIVAN: I know, but when a Committee adjourns
there isn't anything I can do about it.
H.A.JR: But the public - what about informing the
publict It sinks into their minds for one week and nobody
from the Treasury c.mes to the Treasury's defense.
Regraded Unclassified
are Le a united Irm you about these lease.
is DO 12 to mether we did or didn't.
Mile SULLIVAN: There will be when I testify Wednes-
day.
H.M.JR: If you want to take the attitude that
everything over in Procurement is fine - if you say to
me, "Look, boss, I have done the best I can. It is a
lousy outfit and I can't do anything" - and come over
on my side of the table - O.K.
MR. SULLIVAN: I thought I was very frank in this
memorandum, acknowledging the things that are wrong.
Now, there have been mistakes - there have been 8. number
of mistakes.
H.M.JR: Yes, but how long is the Office of the
Secretary of the Treasury going to have to take this
thing? When these people made these criticisms, before
the sun set there should have been an answer. Here
I asked for the answers on these seventy-five thousand
bags of beans, and I haven't got the answer now.
MR. SULLIVAN: I will tell you about the bags of
beans. The information the Committee got was that some-
body on the staff went to this concern here in washing-
ton, and the person on the staff said that the beans
were bought from Treasury Procurement in Atlanta. We
have checked with Atlanta. There is no record of any
such sale. We believe that the person who made the remark
was not telling the truth. There are a lot of people
who advertise Government surpluses, who have no Govern-
ment surpluses. We are hoping to get them.
H.M.JR: Where is the answer on the beans? Do you
mind finding it for me?
MR. O'CONNELL: Paragraph E at the bottom of the
first page. (Refers to Yr. Swilivan's memorandum)
Regraded Unclassified
(seating) "He CAR Find no puth sale of
leans as Congression cranford referred to."
See either did sell them or me didn't.
MR. SULLIVAN: We say we didn't.
H.M.JR: That doesn't say you didn't. You tell me
that the records of Procurement are no good. Maybe we
did sell them.
MR. SULLIVAN: That is why we checked by telephone
with Atlanta.
H.M.JR: But this is written on the 25th.
MR. SULLIVAN: That is right.
H.M.JR: Did we or didn't we sell them?
MR. SULLIVAN: So far as we know, we did not.
H.M.JR: Can you take an oath on it?
MR. SULLIVAN: I think 80.
H.M.JR: But you are not sure.
MR. SULLIVAN: I will tell you why I am not sure.
There is an item here about nine hundred and sixty-six
pounds of copper. The charge there was that the invita-
tion to bid did not contain the warning that the purchaser
would have to have a WPB priority. The information I
had Saturday on that item was that there was only nine
hundred and sixty-six pounds, and it was all sold to the
City of Minneapolis under the misapprehansion that
there was no need of a priority because it was a tax-
exempt institution. That quite begs the question, be-
cause the charge is that the warning was not on the invi-
tation that went out to all bidders.
Regraded Unclassified
Yesterday afternoon ne learned of another three
hundred pounds that went to the State Prison at Stillwater,
Vinnesota.
Now, I have acknowledged errors in this memorandum
and I am not taking the position that they haven't
made any mistakes over there. They have made mistakes.
I think that in comparison to the amount of work they
are doing, the fact that they are shifting from one type
of business to another, they might have been very much
worse.
We are trying very hard to do everything we can to
correct these errors, but if you expect me to say that
it is all black or all white, I am afraid I can't oblige
you, because it isn't so.
H.M.JR: Well, let's have the other people. Do
you mind if I jump on these people direct instead of
doing it through you?
MR. SULLIVAN: Not at all. You handle it any way
you want to.
H.M.JR: Well, I asked, for instance, Mr. Mapes to
come over here, who was here on the 15th. I hear he is
in Chicago. Why did they move him out?
MR. SULLIVAN: Because he was very unsatisfactory.
H.M. JR: When they are here I am not going to jump
on you in their presence.
MR. SULLIVAN: It won't bother me a bit if you do,
sir.
H.M.JR: Now, I have a memorandum here for February
3, 18 follows: "bell, Thompson, Blough, McConnell, Lynch,
0'Connell, Sullivan net with HM,Jr. On disposition of
surplus, Sulliva says Procurement is lacking in records
of any kind, 10 centralized record of inventories or
14:00 2 prices and DD saster record in the field offices.
Regraded Unclassified
lasts permission to get 4 or 5 good men with experience
in various types of merchandise and would like permis-
sion to talk to Nelson about borrowing Eddy Locke.
O.K. with HM, Jr. HM, Jr. does not want anybody to sit
around and wait for him to come back."
So I gave you carte blanche on February 3. What
has happened?
MR. SULLIVAN: We got the IBM in and we set up a
system of record that is in process of being set up,
which Mr. Tickton has had a chance to take & look at, and
which he just told me he thinks is very comprehensive and
will do the job. In the various commodity fields we
have been getting people; we expect to get many more.
H.M.JR: Have you got four or five good men with
experience in various types of merchandise?
MR. SULLIVAN: Yes, sir.
H.M.JR: You have? Who is going to tell me who
they are?
Mil. SULLIVAN: They will tell you about them.
MR. HAAS: You had better point that out.
MR. TICKTON: A system is being set up by IBM with
an eye to giving you everything you wanted. It will
depend on who is running it after the thing gets into
operation, but the mechanics of the system are scheduled
to give you all the kinds of things that are needed.
Of course, one of the problems is the shortage of
machine operating men around the country. All the mechan-
ics, as far as IPM can go, were set up in the last week
and they expect to have it in operation the middle of
April.
E.M.7R: What about the torses and mules and the
tracks and motor cycles which Lave been is the shop
Regraded Unclassified
SI
-
Ter months" have they been cleared?
MR. Maybe b. Hack can tell you about
the horses and mules. The trucks and motor cycles are
still here. Here are the largest items they have on
hand. (Hands the Secretary the attached list of surplus
property, dated December 22, 1943)
Two months from the time they get them to the time--
H.M.JR: Two months!
MR. TICKTON: The reason it takes two months, they
allow the Federal Government two weeks, State and local
so many, and private parties so many. It takes them
time to get the stuff priced and quotedand put in catalogs.
The running time is two months, assuming nothing goes
wrong. If something goes wrong it will take longer.
H.M.JR: I knew about the motor vehicles on December
17.
MR. TICKTON: I said, if nothing goes wrong.
H.M.JR: I asked whoever the man now in charge is
to bring them along. (Mack)
MR. SULLIVAN: John Loeb and Al Frey.
H.M.JR: He brought somebody else when I asked
for Mapes.
MR. SULLIVAN: Widmann.
H.M.JR: who is he?
1. SULLIVAN: He has been in the Service. lie is
an excellent man.
(Mr. Loob, Mr. Frey, Mr. Mack, and Vr. Widness
entered the conference)
Regraded Unclassified
- 11 -
E.F./R: Mr. Back, I 12 considerably disturbed
over the criticiam of Procurement before Banking and
Currency last week, and that there has been no answer
made publicly. How long do we have to wait before we
get answers?
MR. MACK: We have prepared the material to answer
those charges.
H.M.JR: Why don't you try to answer them? They
should be answered the same day they are made or not
later than the next day.
MR. MACK: I believe they have been answered
promptly.
H.M.JR: To whom?
MR. MACK: As each of these allegations came out
we prepared explanations and I think Mr. Sullivan--
MR. SULLIVAN: If I may interrupt just a moment, I
called the Chairman of the Committee Thursday and told
him that I wanted to come up to answer these. He said
he thought they might be closing the hearing. He then
wanted to know about the Hancock bill and I talked with
him. He talked with Hancock and it was at that time it
was arranged that I would testify the next time the
Gommittee met.
H.M.JR: Do you mind letting Mack - he started
telling me what he was going to do with it.
MR. SULLIVAN: I wasjust telling you that he had
gotten the information promptly to me.
MR. MACK: The information which I have prepared
has gone to Mr. Sullivan.
Did you or didn't you handle at: per hears?
Regraded Unclassified
12
Visa KGC: be did aut. The information VAS that
our atlanta office bad sold size pen beans to the
Surplus Sales and Salvage Company. be checked with our
Atlanta office and they said very definitely that it
was not our transaction.
H.M.JR: well, now look, Mack, I met with you on
December 16, 17, and 18 about some automobiles, see?
MR. MACK: Yes, sir.
H.M.JR: And we decided to go ahead and I stressed
to you that I wanted to move them and move them fast -
everything.
MR. MACK: That is right.
H.M.JR: Now, on January 1 you had three million
six motor vehicles on hand, and right up to date I
can't see you have moved but very few. You have seven
and 8. half million on hand now. How long does it take
you to move this stuff?
MR. MACK: well, the automobiles are broken down
into two major groups, one would be passenger cars and
those were held up because the Bureau of the budget
wanted first to determine what the Federal needs would
be, because that is a first consideration in moving
surplus property. That has been determined, and sales
are now being made to tax-supported organizations.
As to the others--
H.M.JR: It doesn't show in the work that Mr. Tickton
has done that you are moving it. I mean, we have discussed
it. December 17, that is, three months have passed.
The same thing holds true on metal-working machinery
and furniture - leather goods. The stuff lies around.
I mean, the time to learn how to sell stuff is before
tala stuff is dumped. be ment all over this with you
and Mr. Mapes at that time.
Regraded Unclassified
2 2018 you, the building ovganization, 1= handle
tala staff, and now I have get to valt etll I 42
publicly criticized, and it is the speasury. I 6 not
Coing to let the Treasury be beamirches. 1 an not going
to take it.
I want to know what you have done since December
17. I met here on February 3 and I told the people -
"Don't sit around and wait for me. Get anybody that you
want." I told that to Mr. Sullivan on the 3rd of
February.
I want to know how many you have had since I first
started to talk on December 15. And I told Mr. McConnell
that we would build an organization and he could tell
that to Mr. Baruch. Now, what has happened? What have
you done?
MR. MACK: Well, since that time I think there has
been quite a lot done. we have made a number of changes
in our field organization. We have made changes here in
our Washington office.
H.M.JR: Specify them.
MR. MACK: For example, Mapes was in charge here.
He has been transferred to Chicago. Widmann was brought
in.
H.M.JR: Remember what you said about Mapes - what
a wonderful fellow he was? I got the report you gave me
on Mapes. The sun rose and set with Mapes. Everything
was wonderful. Do you remember?
Mk. MACK: That is right.
H.M.JR: Now he is no good.
MR. MACK : That isn't it. I think that we need the
strength in our field organization.
You sent him out because be is good?
Regraded
- NACT: no, I sent him out because I telt that
Ly seving a switch of Widmans to the uradquarters
organization and Mapez to the regional office that It
-3018 be better for the organization as an over-all.
Now, since that time Mr. Sullivan has brought in
Mr. Frey and organizational recommendations have been
made by him. I think Mr. Sullivan has those. We have
interviewed a number of commodity specialists and all of
this has taken some time.
H.M.JR: Toomuch. which is Mr. Frey?
MR. FREY: Right here, sir.
H.M.JR: Mr. Frey, would you mind telling me what
has happened that you can tell me, who has been brought
in to strengthen this organization?
MR. SULLIVAN: I will give you a memorandum right
here, sir. (Hands the Secretary attached list of
new personnel, dated March 27, 1944)
MR. FREY: I have been on the job one month and
studying to find out what the job is all about in order
that I might make some good recommendations as to the
organization.
I am prepared now to suggest what the organization
should be. We have accumulated the names of a number
of men who are possible candidates for positions in
the organization. Vre are not ready - we will be by the
end of the week - to present some specific names of men
whom we will stand behind as being of proper caliber.
But I have had nothing to do with adding anybody as yet.
I am collecting the information.
H.M.JR: You are making a survey?
M. FREY: Yes, sir.
Regraded Unclassified
will well, of 120, DATE you have cot this
organization and you can't evec 2016 three or four
=illion dollars' worth of automobiles. I just can't
understand it.
Just from previous experience of handling Treasury
surplus, if you can't handle a couple of million dollars'
worth of stuff, why should I be convinced that this
organization can handle ten times or a hundred times
that stuff?
MR. MACK: Well, the actual situation is this, that
we have disposed of about seventy million dollars'
worth of surplus.
H.M.JR: In what time?
MR. MACK: That is from July 1, 1943. We have
received a hundred and four million, and, of course, we
have the inventory of the difference.
H.M.JR: Yes, but the things you have got are easy
by comparison to what we are going to get. I mean, shoes -
all of these things are easy. But when you begin to get
the odds and ends they are going to dump on us, how are
you going to move?
MR. MACK: They look easy, but now you spoke of
motor vehicles; weeks have been spent to try to get the
OPA to establish price ceilings. Now, that isn't Procure-
ment Division; that is a job of going to OPA, establish-
ing price ceilings, and then, following that, the Office
of Civilian Requirements has to get into the picture.
H.M.JR: Look, Mack, you have been around here a
long time. Nobody has served notice on me that there is
any trouble until I read about it in the paper, and I
get it Thursday morning in a press conference and they
ask me a lot of questions about blankety-blank horse
abnes, and a lot of other stuff, and nobody prepares If.
Regraded Unclassified
= liste talked to you before about Details ameraida
12 = and preparing of 40 Rust I LaTe to sent Lie press,
and 1 Date not to take It for the Treasury, I E pre-
gared.
MR. MACK: There isn't an item that has come out
in the Congressional Record that I have not answered.
Memoranda have been prepared, and on the horse shoes,
I gave Mr. Sullivan a memorandum on that.
H.M.JR: Yes, but it doesn't help me. I have to
defend the Treasury. I have to sell twenty or thirty
billion dollars' worth of bonds to one hundred and thirty-
six million people, and I can't let the Treasury be be-
smirched and I am not going to. My job is to finance
the war, it is not to sell 8. lot of junk. The Treasury's
credit and name has to be the best in the world and I
can't be fussing around with a lot of stuff and be faced
at a press conference, when I want to tell them about the
Fifth "ar Loan, and have a lot of horse shoes thrown at
me, or 8 lot of this other stuff.
I have told you againand again, if it is OPA or
something else - I don't know whether you put Mr. Sullivan
on notice - I haven't been put on notice. I have to
have somebody like Mr. McConnell come and tell me that
the people who are friendly, like Will Clayton, and 80
forth, are worried, that they have gone down the line
because I told them we could do it. Now Will Clayton
is worried.
What have I got to tell them? I have got Lt.F.W.Brill
in charge of Chemicals. I don't know who he is. (Reading
from attached personnel list) "Construction Equipment -
Mr. Art Jenvy, Industrial Specialist. Frederick .Walker -
Industrial Specialist" - maybe these are all the greatest
people in the world, but I would like to stack them up
against dill Clayton or Baruch or Hancock.
These aren't top men. These 4:00
Specimitate la individual commodities that THE have
is to at (et ready for stuff when it comes.
Regraded Unclassified
-
Primary
3.
you
lad
&
fist
of
people.
Ma. SELIVAN: Yes, and ne have a much bigger list
right now.
H.M.JR: Às far as I know, from the outside, you
haven't added one person except Mr. Frey, and he is
studying.
MR. SULLIVAN: Mr. Secretary, there is a lot of talk
about how much stuff is coming. We have understood for
six weeks that we were getting a hundred million dollars'
worth of drugs. We haven't gotten them. We are going
to be ready to do this job, but we are not going to be
ready to do this job by rushing pell-mell to get stuff out
as quickly as we can rather than formulating, in the first
instance, the right kind of a plan.
Now, we have had our difficulties with OPA--
H.M.JR: That has nothing to do with bringing ranking
people from industrial and commercial worldsinto Procure-
ment to assist us, which we agreed on during the month
of January.
MR. SULLIVAN: Certainly, and we are going to.
H.M.JR: When?
Mr. SULLIVAN: live want our plans perfected and
approved before we go ahead and bring people in pell-mell.
H.M.JR: Pell-mell isn't it. When you begin to talk
about the thing the middle of December - when was it we
had that luncheon with Baruch and Hancock, and I assured
them we could do this?
30. McCURRELL: I think in January, sir.
The time to bring the people in is to help
build the organization, before if get the stuff, DC not
dies
Regraded Unclassified
-
That is right.
E.V.JR: From the outside, I would like to know one
top industrialist or merchant who has been brou ht in.
MR. SULLIVAN: There hasn't been one.
H.M.JR: I think that is wrong and leaves us in a
very awkward position. And as I say, if you had said to
me, "Well, look, boss, you wanted to pass on every one
yourself" - but on February 3 I told you you could bring
in anybody you wanted. Today is March 27 and nobody has
been brought in.
MR. SULLIVAN: That is right.
11.M.JR: I think it is wrong.
MR. SULLIVAN: Maybe I am. But we have tried to
get on top of this job, to learn what our job is going
to be, and we think that when we know that, that is the
time to talk with these people.
H.M.JR: If you don't mind, I have felt I had a
smooth-running organization and had learned from experi-
ence how to dispose of small amounts; that we could
bring in able people from the business world which
would strengthen the organization; and then we could go
ahead and multiply the thing by a hundred, and it hasn't
been done.
MR. SULLIVAN: I beg your pardon. I think a great
deal has been done. I think the organization is vastly
better than it was three months ago.
H.M.JR: But I can't understand - why do I have to
send Tickton over to get information like this?
Mr. SULLIVAN: You don't. we could have given you
that.
Do you aind If I question you?
Regraded Unclassified
X. BILLIVAN: Net s. Nt.
H.V.JR: What to your to that, Tickton?
Blue TIRTH: well, I got that out of reports
that they sent over to Mr. Sullivan. The difference
between that report and the one that Mr. Sullivan had
is that I have given you other reports that looked like
that before, and it is all in this report, though it
has to be dug out.
H.M.JR: It is a question of rearranging it?
MR. SULLIVAN: that is right. It has to be rear-
ranged. I told you that.
H.M.JR: Well, my impression, Mack, is this: I
am terribly disappointed, see? My main job is to finance
the war. What I have got to think about is, can I fuss
with this Procurement Division. I mean, can we afford
to take the public criticisms which evidently will come?
From my way of sizing up Procurement, we are not
ready to do the job. Mr. McConnell and I have gone off
on the deep end and told these people we could do it.
Nothing has been said here this morning that makes me
think we can do it. I don't know why when we go into
a thing like this, we suddenly have to go through a
reorganization of Procurement - why you people weren't
ready. Why do we have to get IBM to come in and set up
reports? What have you been doing over there? Why do
we suddenly have to do this thing?
MR. MACK: Mr. Morgenthau, seventy million dollars'
worth of stuff has been moved since the first of July.
This matter of reports that you speak about was started
months ago, It is a classification system of over a
million items which are in several di ferent degrees of
condition.
45 1 result of seving started it sever 17 eight
nots of NATE 1 at the end of net
Regraded Unclassified
anti, and of will be the my agency in the Government
that wh life NR I report that will break down the
rescription in s sech more detailed say than the report
you IN Mr.
As a matter of fact, RFC are copying, or at least
indicate that they want to use our method.
H.M.JR: Do you want to say anything, McConnell?
MR. McCONNELL: I don't think SO.
H.M.JR: Would you mind telling them--
MR. SULLIVAN: I would like to hear about Will Clayton.
H.M. JR: Do you mind telling them about the impression
that is around? God, you can talk as frank as I can!
MR. McCONNELL: Clayton has asked once or twice
what the setup was at Procurement. I haven't been able
to answer him. I don't know it.
As you know, at the luncheon with Baruch and Hancock
they discussed the question as to how Procurement was
organized and set up to handle the large amount of
material that will be forthcoming as soon as surpluses
begin to fall on you.
Clayton hasn't, Mr. Secretary, evidenced any appre-
hension. ne has evidenced interest, just on one or two
occasions, as to what progress was being made in getting
ready to dispense with this material. Hancock has men-
tioned it once or twice, but not pointedly.
In the first instance there was some question, as
you know, ES to whether it would be good policy to move
Recordement andy from the Treasury Department. That we
- f occesfully, and arranged the present setup,
I TAX etirely satisfactory with every-
-
the
Teassury.
Regraded Unclassified
in doing 10, however, I think the Treasury DUB
Indicated that they are prepared to handle the job as It
ses to them.
As you know, I have been submerged with this other
business, and I have no knowledge whatsoever to give you
on the question of whether or not you are prepared.
H.M.JR: Look, Mack, I got a report from you,
December 1 to 21, 1943, "Surplus Property Reported to
the Procurement Division by the War Department." (Refers
to attached report)
I would like to know how much of this stuff listed
between December 1 and December 21 has been disposed of,
and what is left on hand, see?
I just don't know whether I am going to have the
time. I have so many things to do. If I have got to
take the time, personally, to build this organization
the way I want to see it built, I just don't know whether
I am going to have the time.
I am very disappointed that since the middle of
December to the end of March, the thing that I wanted -
the thing that I stressed about bringing top people in -
you had carte blanche to do anything that you wanted.
According to Mr. Sullivan, nobody from the outside has
been brought in. It is very disappointing.
MR. MACK: You are disturbed because of these com-
plaints that have come out of the House Currency and
Banking Committee. I think you should have the story as
to that.
H.M.JR: No, that was the red flag that went up. I
always say, in Washington you get three warnings. That
in the first one. I as not going to wait for the third.
What disturbs or is pare ne have been fooling
and I can't see any concrate evidence that se are
collding E organization to handle the thing. which I
mile candle.
Regraded Unclassified
That is what disturbs me. There is no evidence of
It. Without in any way trying to embarrass this gentle-
man, I would like to have his record. You put him in.
I would like to have his previous experience to handle
such work. What makes you think he can handle it?
MR. MACK: Mr. Widmann for the past two and a half
years has handled the inspection, expediting the move-
ment to port areas, of all Lend-Lease material, running
from six hundred thousand to a million tons a month.
My thought is that on surplus property, which is very
similar - the examination, the appraisal, the movement
and such - that that experience is just made to order.
H.M.JR: Well, it doesn't sound that way to me.
With all due respect - I mean, I am human. You
may be right and I may be wrong, but it doesn't sound
that way to me.
MR. WIDMANN: I think I can handle it, Mr. Secre-
tary.
H.M.JR: Handle me?
MR. WIDMANN: No, the operating job.
H.M.JR: You answer it. All this stuff is here.
What makes you think you can handle that?
Instead of having two and three million dollars'
worth, you are going to have thirty and forty million
dollars' worth of each item.
VH. WIDWANN: Well, we certainly have to build our
organization to an extent greater than It is today.
Name
is
LE
to
the
the
312
Regraded Unclassified
UNITED: It should happen pretty soon.
H.M.JR: It should have happened. You are new - 1
mean, it should have happened from February 3 on.
Well, now, let me say this. I want to caution the
people who have never attended a meeting before. What
goes on in this room I don't want discussed out of this
room. I don't want to read it in a column. It is my
privilege to talk freely in this room. I don't want
anybody to gossip about it, and I don't want any of
this conversation repeated. I have to talk, so please,
everybody in Procurement - my own Treasury people under-
stand this - no discussion of what has taken place in
this room. I am going to think this thing over. When
I have decided what I am going to do, I will let you
know.
I am very, very much discouraged and disappointed.
The war doesn't wait for anybody. You just can't sit
here and wait. I can't wait. And I have got to decide
whether I want to take the time myself to get into this
thing and have it done the way 1 want it done. I don't
know whether I nave the time.
I am not going to let the Treasury Department - we
have got all these millions and millions of bondholders
buying these things on faith - I just have to protect
the Treasury's reputation. That is my job.
Now, whether I can take on Procurement or not, I
don't know.
Anyway, thank you all.
(vs. Loeb, Mr. Frey, Mr. Widmann, and Mr. llack
the conference/
Regraded Unclassified
- 24 -
Dan, the thing I want you people to think
over Is this: I have done 8. lot of thinking about this
over the neek. I can smell this thing, see? It smells
to high heaven. Now, I just don't know whether I have
the personal energy to throw myself into this thing.
And what do I want to do it for? I have two things I am
interested in. One is to help win the war, and over the
week end I have added something new which I have started,
that is, how to end it quicker. This thing doesn't fall
into either one of these categories. It won't help win
the war or bring it to an end any sooner.
Frankly, it sounds terribly conceited, and so forth,
and so on, but unless I throw myself into this thing
personally--and the way I feel now, I don't want to. I
just don't think it is worth my time. I can spend my time
for the Government to better advantage. You people can
think it over. Anybody talk up. John, hit just as hard
as I have hit.
MR. SULLIVAN: Frankly, I think there is an awful lot
of smoke here for a very little fire. I am the fellow who
should be as equally disturbed about the situation, if there
is anything to be disturbed about, as you are. I am not
disturbed. There hasn't been as much progress made as I
would like to have seen, but there has been a great deal of
progress made.
Something was said earlier in the morning about Mr.
Clayton being disturbed about this situation. I talk with
Clayton at least once every other day. I meet with him at
least once a week. He has evidenced a great deal of satis-
faction with the way things are going in his conversations
with me. I am convinced we are going to work this thing
out, and it isn't going to require your personal attention,
either. I can do this job, but if you think that I or
anybody is going to do this job without criticism, I think
you should be disabused of that idea right now, because
whenever you are going to make 8. sale to a man in business,
vis-a-vis 8 speculator, there is going to be criticism.
There isn't any way that this surplus can be handled without
same criticls. That doesn't disturb ae either.
Regraded Unclassified
H.W.JR: RcConnell aarned DE of this thing before I
got into it, and I didn't listen to him. I wish now I
had. But it is not too late, and I am just going to let
the thing simmer. My estimation of the situation is dif-
ferent from yours, as I evidenced here this morning.
MR. SULLIVAN: Apparently you have heard other things
that I haven't heard.
H.M. JR: I haven't heard anything but what I have here,
but, my God, I don't need anything more. I can't do what
I did with the Russians on Procurement and the rest. But
I could practically go to the docks myself and load this
stuff, which we practically did, and get the President of
the United States to give the kind of directive which he
gave me 80 I could get the stuff for the Russians. I
burned myself out on the thing, and it was worth burning
myself out for. We got the stuff and piled it up 80 on the
docks that I made everybody's life around here miserable
until we got the stuff down to the docks for the Russians,
which the President gave me B. little chit for.
Now, I'll go all out on that. Tickton used to go out
on the docks. I had Lew Douglas and Admiral Land and
Bob Patterson and the whole Army on their ear until we got
the thing settled. That is worth doing. And I just drove
Procurement crazy. I thought, as 8. result of that, that
they had an organization that we could build on. But,
by God, we had the stuff there! No ship had to wait, did
it?
MR. TICKTON: That was right.
H.M.JR: It was the bottom cargo, and it had to go on
the bottom, 80 it had to be there first. That is worth-
while. But I want somebody to sell to me why this is
worth while.
MR. SULLIVAN: I tell you, you can't name any one thi ng
that is going to have I more direct effect OD our post-war
recomy than the intelligent disposal of these surpluses.
11.2
:
the
It
doest't
E
4/
pattern.
Regraded Unclassified
- 365
E of course, Fr. Sullives has said
just stat : tried to say in the beginning, that it is
subject to criticism and there is no other my oct of it.
You are going to be criticized even if you do I perfect
job.
H.M.JR: I don't mind criticism - I get it, anyway -
if I feel at the end of the day I have done something.
MR. SULLIVAN: Let's just see if we are not changing
our position. The attitude you took that I expressed to
committees on the Hill, that I expressed to Baruch and
Hancock, was that the Treasury Department was not out
looking for new fields to conquer. On the other hand, we
would not shirk a job if, after a considered survey of the
whole situation, it was decided that we were better equipped
than anybody else to handle certain things. As a matter
of fact, we came out of the split-up of the disposal of
different types of property far better than anybody else.
We didn't get any of the dangerous stuff; we didn't get
any of the dirty stuff. We got the cleanest-cut classifi-
cation of goods to dispose of that we could possibly hope
for, and I think Bob will agree with me that a far better
solution than we had at any time dared hope for.
It was given to us because they all felt that we were
in a better position to handle this than anybody else.
I think we are. However upset you are about this thing,
you are not half as much upset as I have been at many
things in Procurement. I haven't come running to you
with a lot of little things, but there have been times when
I have been much more disturbed than you are this morning.
H.M.JR: Just so we get this thing straight, nobody
has run to me with anything on Procurement other than
what I have said here today. I have got no pipeline
into Procurement.
MR. SULLIVAN: I wasn't concerned about that.
H./.JR: I want that understood. ALL I anos is
Mat has been telling Sell and the other people.
have M pipeline inte Procurement. I could have one,
WD I and't get M.
Regraded Unclassified
- 27 -
MEL SULLIVAN: I see no reason ety you shouldn't
DATE, Mr. Secretary.
H.M.JR: I don't want one. I don't do business that
way. But I want you to know, everything I know is here
and nobody is feeding me stuff out of Procurement.
MR. SULLIVAN: Certainly, there is nothing in what
Bob said this morning that should upset us.
MR. BELL: I think, Mr. Secretary, that John has been
the strongest critic of Procurement over the past three or
four months. He has come to me several times with his
worries, and I certainly think you shouldn't take on this
job. You have enough to do in other lines - let John
go ahead and see if he can't strengthen the organization
along the lines you have indicated. I think he has had
it in mind; he has been the strongest critic.
MR. SULLIVAN: I got Dan to give us a couple of people
to inspect our accounting system over there.
H.M.JR: Yes, but I can't get through my head, why
do we have to send inspectors over there now? Why do
we have to?
MR. SULLIVAN: Because it wasn't done two years ago.
H.M.JR: Why wasn't it?
MR. SULLIVAN: I am sure I don't know.
H.M.JR: Mack was there.
MR. SULLIVAN: I think he has been there three or
four years.
H.M.JR: I didn't want to be too sercastic, but if
Kack instead of writing 8 book--
KR. SULLIVAN: Just s. minute. He hean't made one
speech since I have been handling Procurement, and he has
ad at least fifty invitations.
This Government thing that - goes around on.
Regraded Unclassified
28 -
MR. BELL: Government budiness organization.
H.M.JR: He still travels on that, doesn't he?
MR. SULLIVAN: Very little, sir.
H.M.JR: But he did spend an awful lot of time on
that Government thing and on the book.
MR. SULLIVAN: And in making a lot of speeches. That
has been stopped. I stopped it, myself.
H.M.JR: But the part that bothers me is, I thought
here was a nice little organization, well-run, everything.
Mack has been there - I don't know - two or three years.
MR. SULLIVAN: I never shared that view.
H.M.JR: I did, because when I put the heat on them
on the Russian thing, they did come through, didn't they?
MR. TICKTON: Yes, sir.
H.M.JR: Everybody was pleased, and they got the
stuff there first. I thought here was & nice little org-
anization, just like if I give Haas a job I know the thing
is going to come out. He will get it here ahead of
schedule for me. I don't have to worry. If I throw some-
thing at Bell, I know the thing will come out. I just
thought we could throw this thing at this group and they
could pick it up, and here we an organization that could
expand. But now the time is being spent trying to correct
it.
MR. SULLIVAN: And there isn't any other answer to
that, Mr. Secretary. It has to be corrected. The organiza-
tion was not there to dispose of surplus property. I told
you that.
MR. GASTON: I think you recell, Mr. Secretary, how
case to be appointed in Procurement. You thought the
organization was good, but I got some evidence and 40. fall
got sale evidence that it wasn't so good, that it needed
supervision that it ment (etting. and that 1sm't 80 very
mg 160.
Regraded Unclassified
-
E.M.JR: How long has John been in there?
MR. SULLIVAN: To tell you the truth, I don't know.
It seems forever.
MR. O'CONNELL: A little less than a year.
MR. SULLIVAN: It seems a lot longer.
MR. GASTON: I don't think it is over six months.
H.M.JR: It must be a year.
(The Secretary asks Miss Chauncey over the phone to
bring in the order placing Mr. Sullivan in charge of Pro-
curement.)
H.M.JR: Anyway, let me ask you this question. Again,
I am purely thinking out loud. Is there a way of saying
to the Baruch Committee that we don't want to handle this
surplus, or do you have to say to them, "Take Procurement
and give it to some other Department"? Is there a half-
way way of doing it?
MR. THOMPSON: No, I think you have to follow through
with Procurement to do the job.
H.M.JR: Now wait a minute. I mean, can you say that
we will let Procurement go along handling the odds and ends
for the Government, I mean, the way we always have?
MR. THOMPSON: You mean a new agency to take over the
war job?
H.M.JR: Or, do you have to say that if you are going
to do the war surplus you have to take Procurement along?
MR. BELL: They have always split the war surplus,
and the discretion is with the Administrator to give any
50# of these designated agencies any part of the surplus.
EL sime certain Lines--I come If goods you
1971
question
sustem
nonething
to
a
Regraded Unclassified
111
or capital goods, then will has the power to say which is
which.
H.M.JR: What would be the answer to my question?
MR. SULLIVAN: I hadn't thought of it, because I
think it would be a very, very bad thing for the country.
This thing has been set up; it is going along; we are
every day receiving expressions of confidence from the
public about the way we are going to handle this thing.
I think if you tried to change now, the results would be
very unfortunate.
H.M.JR: For whom?
MR. SULLIVAN: For the Administration and for the
public.
H.M.JR: I mean, who else is there in the Government
who could handle this?
MR. SULLIVAN: I don't know. There isn't anybody else
who is 88 well-qualified to handle it.
H.M.JR: Didn't the Bureau of the Budget want Procure-
ment?
MR. BELL: They wanted to dictate the policy.
MR. THOMPSON: Procurement has been building up every
day and enlarging their regional office.
H.M.JR: My God, when I questioned this fellow, whatever
his name was--this fellow who was here in December-Cliff
Mack said he was a world-beater.
MR. SULLIVAN: I will tell you what 6 world-beater be
261. I argued for three days, not about the kind of central
record, at the necessity of central records. be still today
coeen't think there 18 any send of having in Washington e
testral inventory at . central recent of prices.
Regraded Unclassified
112
II
11. NO: that is Mapes doing now?
KR. SULLIVAN: Running the regional office in Chicago.
H.M.JR: Is he good enough?
MR. SULLIVAN: I don't know. I would rather have
nimthere than here.
(Miss Chauncey brings in memorandum requested by the
Secretary.)
MISS CHAUNCEY: May 27, 1943.
H.M.JR: I will give it back to you.
MISS CHAUNCEY: Oh, thank you.
(Miss Chauncey leaves the conference.)
H.M.JR: As. I say, I am still asking the question,
if I said I didn't want to handle this thing, where could
it go to?
MR. BELL: To the RFC, some subsidiary of RFC, or it
could remain in the Departments like the War and Navy.
MR. O'CONNELL: The bill that was being discussed at
the hearing when Crawford and Patman made the criticisms
of the Procurement Division was a bill which would have put
the whole job into the Reconstruction Finance Corporation,
which is a partial answer to your question. Legally, I
take it, without any legislation they could recruit this
baby and put the whole job in RFC. As it now stands, 8 part
of the job is in the Procurement Division.
Now, there are E lot of practical reasons why, having
cone this far :- dividing it up and having the Procurement
Elvision bandle part of the job--it would HE to se to be
TNT) difficult to taxe that part of the job my from the
Procurement Ariss. It weile be a terrific slap st
incurent. it ⑉ the M It were saice 1074 NEW to
Regraded Unclassified
101 Procurement 20 to RFC and continue to do the job than
to try to pull back from taking on the job that we said in
December and January we could do.
H.M.JR: You mean let Procurement go, too?
MR. SULLIVAN: Yes, if you are going to drop it, that
is the way.
MR. O'CONNELL: I think that is better than to try to
pull back from taking the job and let Procurement go back
to its old job of purchasing Government-owned property,
because that would be an admission that the Procurement
Division was not equipped to do the job. They a re better
equipped than anybody else, but it is only because it is
the only outfit in town that has any personnel. It is
8. relative thing, but there isn t anyone here who wouldn't
believe there are a lot of weak spots in the Procurement
Division.
I have been looking at it from the outside longer than
anyone else here, and I don't think there are three top-
notch men in the whole Division. At least I haven't met
three.
H.M.JR: Who are the three you would name?
MR. O'CONNELL: I couldn't name three. I don't think
there are three. I was being safe. But when they had a
regular routine job for Procurement to do they didn't have
so much trouble. This is a new type of job, and a terrific
job, too.
H.M.JR: In all sincerity I sold the idea to Mr.
McConnell that we could do this. Mr. McConnell took ne at
good faith, I take it, based on what I have done here, and
sole Itto ar. Baruch.
A. That is right, yes, eir. of 150738,
principal argument, lb. Secretary==st least Bancork's
et the time me that the Government corporations
size more THE performing . just of
that
Regraded Unclassified
124
33
DAVE to abide by Civil Service rules or departmental rules
in Government. That, I don't know about.
H.M.JR: You think you have sold it.
MR. SULLIVAN: Yes, I do, sir.
H.M.JR: You weren't at the luncheon.
MR. SULLIVAN: I beg your pardon; I was at the luncheon.
H.M.JR: If you think it is so, we had better put the
entire responsibility on you.
MR. SULLIVAN: I thought so from the very beginning,
Mr. Secretary.
H.M.JR: Well, I don't agree with you.
MR. SULLIVAN: Certainly it is very childish for us
to be arguing about who sold it.
H.M.JR: It isn't childish, but I just noticed you were
smiling. I felt the responsibility personally for telling
you people to do it.
MR. SULLIVAN: So did I.
H.M.JR: Well, there is nothing here to convince me.
The more I listen to Joe--evidently the Procurement Division
is terrible.
MR. GASTON: I think it is undoubtedly a better Division
than it was in May a year ago, a much better Division. There
was 8 very bad situation a year ago, in May of last year.
They had no supervision, and they lacked it badly. Joe was
disturbed about it; Dan was disturbed about it; I was dis-
turbed shout it. The organization had gone to pieces.
I G sure it improved under Sullivan, at
is
too
Regraded Unclassified
XR. SULLIVAN: Well, that may be, Mr. Secretary. On
the other hand, there is such 8 thing as going at it too
fast. That is all 8 matter of judgment. As I said, I am
not as disturbed about this as you are. I am confident a
good job can be done. Sure, you are the general, but I
am the colonel, and I have just as much at stake here as
you have.
H.M.JR: Yes, but I am the boy who takes it publicly.
That is the only difference. And I should.
MR. SULLIVAN: Yes, I think that is true.
H.M.JR: What do you think, Joe? Do you think we
should?
MR. O'CONNELL: I think we have got to, for the time
being, try it out a little more than we have. I think
this meeting has been very helpful.
H.M.JR: Wait 8. minute. If we are going to make 8.
change, isn't the time to make e change through this bill
on the Hill?
MR. O'CONNELL: This bill, I think, on the Hill has
been killed temporarily.
MR. SULLIVAN: The new one comes in Wednesday.
MR. CONNELL: That will be broad enough SO that I think
the change can be made under the bill without having to
have 8 specific provision in the bill which will transfer
the Procurement Division to some other agency. The President
has the authority now to transfer functions, and so forth.
That bill, which will set up an administration in the Division
of War Mobilization, the function of which will be to handle
" : remember the bill, pretty broad power, and I think we
the disposition of surplus property--that setup will have,
any be able t= 00 it.
think it well be - mistake to suggest specific
transferring the Procurement et Livision to the
it
-
Regraded Unclassified
confized in December that there were weak spots is Procure-
sent, tut we did have something no other agency had, and
that was an organization. We had five thousand people and
fourteen regional offices. There was no other outfit in
town that had anything, and such experiences as existed in
the Government was in the Procurement Division.
Now, all that has happened, it seems to me, is that
we have not done as much as some people, and I am one of
them, think should have been done in getting ready to meet
this problem that we are cominginto. My own view is that
Cliff Mack and the two or three or four men upon whom he
relies are completely inadequate to do the type of job that
the Procurement Division is going to be called upon to do.
I wouldn't hesitate to say that to Mr. Mack or the men I
am thinking of. The answer to that, I thought in December,
and I still think, was that we had to move more rapidly in
the direction that you mentioned early in the meeting of
getting top-notch men in here to look the situation over,
and help us to re-staff that organization. Now, I don't
think it needs a thousand people. I think you need a few
top-notch people with a little more freedom of mind, and
80 forth, than Mr. Mack and some of his immediate assistants
have.
I have not talked particularly with Mr. Sullivan in
the past two or three months about this situation. It may
be that the situation has progressed more rapidly than
my remarks would seem to indicate, but I have felt disturbed
right along. I have felt that we are not moving as fast as
we could, and that one day we were going to have not only
the sort of criticism that we got last week, only & part
of which could be considered 88 justified, but we might
have 8 big flood of legitimate criticiam if surplus property
begins to come to us in great volume and we are not ready
to move.
H.M.JR: What I want you people--if you are not ready
to ADDRESS it, you don't have to. Here you are my Acting
General Counsel. Here se are 10 the 27th of March. Is
- something that I should take on and try to rest
in facts smething morth while?
Regraded Unclassified
v3. O'CONSELL: Hell, the job is 8 terribly important
job, not only for the post-nar period, but certainly it is
an important job to be done between now and the end of the
war, because, depending on the volume of this stuff, it
is certainly entirely possible there will be literally
billions of dollars' worth of inventory and materials
owned by Government industry that should be disposed of
during the war.
H.M.JR: Don't avoid me, Joe. If you say you want
twenty-four hours to think it over, that is all right.
But from what you know and what you have heard, if you
want to think it over, I want advice.
Mr. CONNELL: I would like twenty-four hours then,
because I don't know the answer.
H.M.JR: I am going to ask everybody in the room the
same question.
MR. SULLIVAN: What is the question, sir?
H.M.JR: Whether we should decide that I should sweat
this thing through or whether I should tak e the steps to see
that the Procurement Division is transferred out.
MR. SULLIVAN: Whether you should handle the thing
personally?
H.M.JR: Well, I don't want to put it just that way.
MR. BELL: Whether the Treasury should continue to handle
the disposal of surplus property or should the Secretary
recommend it be transferred to some other agency?
MR. GASTON: I think the Treasury has accepted a certain
responsibility, and it is a logical responsibility in view
of the function that we have had over here in the Procure-
amt Division, and I think it would be 8. terrible black eye
to the Treasury Department If " should attempt now to
viggle out of It. I think 11 have to F through with it,
and I 5 net at all sure-thir material If DATE seart take
Regraded Unclassified
10 a little confusing, and I wouldn't met to
were è judgment on this particular thing, but 1 have s.
/eberal impression that our organization over there
needs some decided rebuilding, and I think probably
John feels the same way about it.
MR. SULLIVAN: I do.
MR. BELL: I think we ought to keep the Procurement
Division and go on with this job. As far as the Procurement
Division is concerned, I don't think it makes much difference
whether you transfer it out of the Treasury to some place
else. I don't know where it would go. I think it just as
logically belongs in the Treasury as some place else.
I.M.JR: Well, I will have you in again most likely
sometime tomorrow, but I have been doing a lot of thinking
about this thing since Friday, and I am more discouraged
after this conference than I was before. What you are really
saying to me is, Cliff Mack isn't up to his job. If he was,
ne would be ahead of it. Instead of that, he is dragging
his feet.
MR. O'CONNELL: It was almost by accident that Cliff
Mack became the Director of Procurement. He was an investi-
gator, and was sent down with Harold Graves to look the
place over.
H.M.JR: And he did a good job. The time I was close
to the thing and we were handling the purchasing for Lend-
Lease, we were all up and on time, and the stuff was there
alongside shipboard. That was what we were interested in.
We ran a tight schedule, and I knew what happened. There
never WAS even 8 smell of graft or anything else. We ran
that thing, and it went like clockwork. It was based on
that, that I thought we could do this.
Rom, maybe they did it without any record, but et least
De stuff got there, and M more crowding every other agency
town to take the stuff off the seeks and out ef 567 1171-
z know that to be I fact, Service I 2874 followed
cap and night, lat when BE that jub. se sere cal
- 0079
Regraded Unclassified
everybody size was BO lousy. At least our stuff was there
utt went in the bottom of the ships. Is that right?
MR. TICKTON: That is right.
MR. HAAS: It got there after you worked on it a while.
You stayed right on it personally.
H.M.JR: Sure, I did.
Now, am I going to take the time out to sell a lot of
automobiles and a lot of dishes, a lot of second-hand trucks
to see that they move out into consumption? I don't mind
the criticism if the job is worth while. I can't see it
right now, if it is going to fall on me. I just can't see
it.
MR. SMITH: If you are going to give it up, shouldn't
you give it up before you get another beating in Congress?
Before they do make a bill, if you decide to do it, just
write the President and say that it would be in the
interest of keeping all of Procurement in one agency,
suggesting that you let RFC have it. Then you don't have
this business of criss-crossing agencies' responsibilities,
which has been criticized so profusely.
MR. SULLIVAN: I beg your pardon. Where has the
criticism been?
MR. SMITH: I am not talking about us; I am talking
about general criticism that comes out with OPA, WPB--
everybody has to go to seventeen agencies to get something
done.
MR. SULLIVAN: That is the very thing that is solved
have bed the Army and Nevy and everybody in the world selling
In this problem by this Executive Order. Up to now you
this article.
D
it
if
M/Y
all
Regraded Unclassified
13. SILLIVAN: I think not, Fred. I think that the
trend of the conversation indicates that you think if ne
are going to handle this you will have to handle this
thing personally. That raises a very pertinent question
85 to whether or not you think I can do the job. If
you think I can't, I think right this morning is the time
to say BO,
H.M.JR: I will say this, as long 85 you are asking,
I am disappointed in what has been done to date.
MR. SULLIVAN: That is evident. I am perfectly
willing to give this up, Mr. Secretary, if you have somebody
you would rather put in charge.
H.M.JR: Look, John, I have nobody, nothing up either
sleeve. You know everything that I know. There is nothing
hidden, see? Now, you know me when I say that, because
that is true. I am not gunning for John Sullivan. I am
not gunning for anybody. I am simply facing this thing.
It is my fault that I haven't faced it before, but I
have been awfully busy. And now suddenly this very minor
picayune criticism has brought Procurement to my attention.
And as I look at it, I don't like it. I feel, as I say,
it sounded conceited, but in order to lick it I would have
to take off my coat and roll up my sleeves and do it myself.
If I don't do it, I don't think it will be done.
Naturally you differ with me; you think you can do
it; without being discourteous, I don't. I think that
the things you have done on the Hill recently for me have
been magnificent. I think the way you have handled Internal
Revenue is swell. I have no criticism whatsoever. It is
entirely satisfactory.
VR. SULLIVAN: I think I an doing = far better job with
Procurement than I all with the other.
It isn't that I 5 disantisfied with John
Bollivan. I talnk on these things yes done, every
- is smell. De this start use, : just feel that
Se tion - rolled by: 1x still feeling
il the of December, and think
Regraded Unclassified
= GO# the thing soould be running with 5 let of capable
people. be put Kr. McConnell in on General iniline. be
20% three our four top-notch people and sent in there and
licked the job. If at the end of three months be was
still studying it, I would say at the end of three months
he wasn't the man to do the job.
MR. McCONNELL: Of course, I say again, Mr. Secretary,
this job is a type of thing that is going to be criticized.
I am just repeating; it is a question of whether the Treasury
is in 8. position to take that criticism.
What you said about the bond sales and the question
of confidence of the people in the Treasury--the question
in my mind has always beenas to whether this type of
disposal of surpluses, which is going to be criticized
if it is done one hundred percent right--I think there
will be elements who are able to criticize anything you
do, no matter how right it is. That is the whole point
that I have always had with that question. When you get
into large figures and Government surpluses, it seems to
me that it is inevitable that that criticism is going to
flow, no matter how good a job you do.
H.M.JR: As well as I understand, supposing we do it
as near perfect as anybody could, we will still have criticism,
and that in turn will hurt things like our bond sales.
MR. McCONNELL: That is the only thing that worries me.
MR. SULLIVAN: But we are all forgetting, Bob, that
there is B. great deal of credit that can go with doing this
job well.
MR. McCONNELL: That is true.
MR. GASTON: I don't think we should handle it solely
basis of monther se set blane or credit; I think there
20 " 1. responsibility here. It 1. logically the responsibility it
of - the Treasury Department, and - DATE already take 11.
= to = = 5 you 1 = 181
Regraded Unclassified
122
=
MR. NeCOBELL: You have the best part of it. Mr.
Clayton, I think, is the very best are is Washington to
undertake the job over there.
H.M.JR: I didn't think he was under RFC.
MR. McCONNELL: I understand the brickbats that he
is going to get on any kind of a job he does. The most
difficult and most subject to criticism will be the scrap
materials.
MR. SULLIVAN: And your defense plants.
MR. McCONNELL: We are out of those.
MR. SULLIVAN: Scrap was coming here, and didn't.
MR. McCONNELL: You have the cleanest part of it, the
best job of the whole to do. But still it is one of those
things, I think, you can expect to be criticized for, no
matter how well you do it.
MR. BELL: There wasn't much criticism throughout the
last war, was there?
MR. SULLIVAN: A great deal.
MR. BELL: In the Treasury?
H.M.JR: Don't you remember that fellow up in New York
who had all that second-hand stuff? This fellow bought some
underwear or something from the Army that never left his
warehouse, and Sears Roebuck paid him fifty cents for the
same stuff without his ever touching it. It was some
fellow who more or less controiled the whole thing. That
it just one item that Nelson told me about.
VI., O'CONNELL: That MY all pretty much direct Army
in sales.
MIL-
The
Treasury
CHM
of
-
lat.
Regraded Unclassified
- 42 -
well, think the thing over, in the lost
is cest for the Treasury. When does this HILL
in. SULLIVAN: Probably I will testify Wednesday.
H.M.JR: Do you have to know before then?
MR. SULLIVAN: Oh, yes, surely. I can't go up there
and tell them what we are going to do on Wednesday and then
on Thursday have it announced we are not going to do anything
about it.
H.M.JR: What committee is it?
MR. SULLIVAN: Banking and Currency.
H.M.JR: You are testifying in support of what?
MR. SULLIVAN: You see, there were several Congressional
Committees who were dealing with this problem, discussing
legislation, when the Hancock-Baruch Report came out, and
the Executive Order. Since that time, Baruch and Hancock--
or rather, Hancock has been trying to iron out with these
Committees the differences between the procedure as set
up in the Executive Order and the proposals they were con-
sidering. They now have 8. bill that would formalize by
legislation most of the provisions of the Executive Order.
There are a few points, such as whether Clayton will have
an advisory council or whether there will be 8 board, and
he will run it under the direction of the board, and a
few questions of that kind. That comes up Wednesday.
According to present plans I may be called upon to testify
before the Banking and Currency Committee of the Senate
tomorrow on the work that the salary stabilization unit
has been doing, and I as very sure that at that time they
will ask 20 questions about the disposal of surplus.
Regraded Unclassified
1.24
- w -
B.M.JR: That is rushing a little bit. De JOD go
refore Banking and Currency?
MR. SULLIVAN: In the Senate.
H.M.JR: Tomorrow?
MR. SULLIVAN: It may be tomorrow.
H.M.JR: But you are not sure?
MR. SULLIVAN: No.
H.M.JR: If it is tomorrow, will you let me know?
MR. SULLIVAN: Sure.
MR. O'CONNELL: That is on another subject, John.
MR. SULLIVAN: Yes, but I am sure they will ask ques-
tions about this.
Regraded Unclassified
125
March 25, 2964
MEMORIAN FOR SECRETARY
From: Assistant Secretary Sullivan
I wish to briefly summarise the enswer of the Treasury Pro-
cureasnt Division to the charges made this work before the Banking and
Currency Committee of the House as outlined to you in Mr. O'Cennell's
memorandums
A. The Prosurement Division always uses direct mail cir-
cularisation of prospective purchasers. We have never used
paid advertising but have released information of special items
to the appropriate trade journals.
B. Mailing lists are developed from trade directories and
classified listings. The field has been directed to avoid
transactions with speculators.
0. All information is now available centrally here in
Washington. The transportation situation requires us to dis-
pase of most of the goods in the - region in which we 4-
quire them.
D. Every effort is made to supply purchasers with -
plote descriptions. I believe there 10 still room for 10-
provent is this field. (The sale of airplane parts is still
bating stated. I a and bullion n - a Treasury sale.)
I R 1 ] 9 I -
- - - fiel - - who / - - # la
- - - M.
Regraded Unclassified
126
- 2 -
F. 966 pounds of used copper sheets very sold to the City
of !!innespolis without priority clearance. The St. Paul office
has been warned again that no invitations to bid on critical
materials should be issued without containing the notice that
a WPR priority is required.
0. Errors of this type have been mde. Instructions have
been given the field and I believe that this has been remedied.
In most instances where unrelated commodities have been offered
in one lot, they have been in very small amounts.
H. The testimony on the Fort Worth offering of electrical
items is correct. The Regional Director was instructed to re-
duce the sise of the lots the day we here in Washington learned
of the offering.
I. The Navy was fully advised about the soup plates and
rejected them. (I suspect that the "U.S.Q.M.C." on the plate
may have affected their decision.)
J. Mr. Patmen's information on the herse shoe transaction
is incorrect. We sold heree shoes in Cinsinnati on December 22,
1943. Our last purchase of heree shoes vsa on February 16, 1943.-
FKA is now processing a requisition for herse shoes of different
sises and weights than those w sold in Cincinnati, but we have
not yet tem authorized so buy any. To had as notice that PIA
will require my - - until - the two - ofter
the min.
Regraded Unclassified
CONFIDENTIAL
- Investory of Federal surplus and
- Property by Major Items
2
1944
class
#
Jun. I Jan. I Jan. $ Feb. # 703. # have
I 1
:
15
1
31
1
15
I
29
:
15
(In millions of dollars)
notor vehicles and parts,.
3.6
6.4
6.4
6.6
7.0
7.4
Retal-working anchinery
2.9
4.2
4.0
3.9
3.8
3.5
Furniture
1.2
2.1
2.3
2.4
2.4
2.3
Leather end products
.
1.9
1.9
1.9
1.9
1.9
Apparel (except shoes)
1.4
2.7
1.8
1.8
1.8
1.6
Fabricated metal basic
anterials
1.1
1.6
1.6
1.7
1.6
1.6
Finished products-metal
working industry
1.2
1.6
1.6
1.5
1.5
1.4
Miscellaneous end products
manufacturing industry
.4
1.2
1.1
1.2
1.3
1.3
Lumber basic materials
.9
1.4
1.4
1.4
1.1
1.1
Special industry machinery
.9
1.2
1.1
1.1
1.1
1.1
Electrical machinery and
apparatus
.6
1.0
1.0
1.0
1.0
1.0
All other
4.3
7.4
8.0
8.0
7.9
8.4
Total
18.5
31.6
32.2
32.5
32.4
32.6
Office of the Secretary of the Treasury,
March 22, 1944.
Division of Research and Statistics.
Less than 150,000.
Regraded Unclassified
128
March 27, 1944
NEW PERSONNEL ALREADY HIRED FOR PROCUREMENT
Chemicals - Lt. F.W. Brill, Medical Division, U.S.
Coast Guard.
Construction Equipment - Mr. Art Jenvy, Industrial
Specialist, Used Machinery
Section, Construction Machinery
Division, War Production Board
Electrical Supplies - Mr. Frederick T. walker, Industrial
Specialist, Conservation Division,
War Production Board.
Automotive Supplies - Mr. D.C. Barnhart, Senior Business
Specialist, Automobile & Parts
Section, OPA.
Regraded Unclassified
SURPLUS PROPERTY REPORTED TO THE
PROGUREMENT DIVISION BY THE w DEPARTMENT
FROM DECEMBER 1 TO DECEMBER 21, 1943, INCL.
ESTIMATED
IN THE PROCESS
COMPODITY
QUANTITY
VALUE
OF DECLARING
2,299
$ 68,970
Horses
253
Vules
22,770
harness
22,000 sets
889,247
Smoke Rots
108,000
1,620,000
New Cars
6,483
5,500,000
Trucks
10,500
RAC Buttons
8,733,450
Clothing & Shoes
181,900
352,700
Sandbags
3,900,000
400,000
Gauze, Bandage
24,790 pkgs.
2,479
Burn Ointment
7,683 sets
2,100
Cement
15,000 bags
7,500
Bolos & Scabbards
28,000
Electrical & Plumbing
Supplies & Material
190 page (no values listed on declaration -
listing to be appraised)
Shearlings
4,000,000 sq. ft.
Construction Equipment
3,600 pieces
Butyl Alcohol
45,313 gals.
51,656
Drill, Cotton
65,000 yds.
18,411
Bars, Steel
589 lbs.
468
Tool, Steel
200 lbs.
150
Tire Repair Material
3 lots
18,153
Caustic Soda
670 STN
30,150
TOTAL
$ 9,012,754
10,000,000 approx.
In addition to the foregoing, normal surpluses are being declared
cirectly to our eleven Regional Offices.
(a) Clif liack
Cliften 1. Bank
Director of Promperment
Regraded Unclassified
w = -
130
NEW PERSONNEL ALREADY HIVED 10 -
Chemicals - Lt. F. W. Brill, Medical Division, 1. S. Coast Guard.
Construction Equipment - Mr. Art Jenvy, Industrial Specialist, Used Machinery
Section, Construction Machinery Division,
Tar Production Board.
Electrical Supplies - Mr. Frederick T. Walker, Industrial Specialist, Conserva-
tion Division, War Production Board.
Automotive Supplies - Mr. D. C. Barnhart, Senior Business Specialist, Automobile
& Parts Section, OPA
Regraded Unclassified
131
and Disposals of Federal Surplus
and Incens Property, Two Weeks Ended
March 15, 1944
:
:
Item
: Acquisitions : Disposals
To
:
:
:
:
inventory
(In millions of dollars)
Steel
$4.0
$4.0
8 #
Construction, mining, and
excavating machinery
2.3
2.2
+.1
Fabricated metal basic
materials
2.1
2.1
*
Tractors
.6
.6
#
Motor vehicles and parts
.5
.1
+.4
All other
1.3
1.5
-.2
Total
10.8
10.6
+.2
Office of the Secretary of the Treasury,
March 22, 1944.
Division of Research and Statistics.
Note: Figures are rounded and will not necessarily add
to totals.
Less than $50,000.
Regraded Unclassified
132
is,
1343.
milliver, O'Connell, Mackand Mapes net with
tack reviewed surplus disposal to date. Be-
ginning in February, received WPA surplus. In July,
.YA was liquidated and Procurement has that surplus
to dispose of.
Recently have received surplus material from
military services - trucks and automobiles. On their
disposal, will give Federal agencies first choice.
have had conferences with General Motors, Chevrolet,
etc., re their taking the cars back and disposing of
them through normal distributor channels. HM, Jr
suggested manufacturers and their own distributors
sork with us on the program.
Also have 2,000,000 bed comforters which have
cono to UNRRA; 4,000,000 square feet of shearlings;
$2,000,000,000 CCC clothing; harness, etc.
2. Jr said Treasury has not sold Procurement
to McConnell; Sullivan fell down on this. Referred
to VcConnell's memo of 12/9 recommending RFC as agency
to handle disposition of surplus.
Lec. 15, 1943.
biographical sketch of Frederick A. Mapes
Lec. 16, 1943.
Sulliven. O'Connell, Mack, Mapes, 16V met
Jr. J: disturbed over MeConnell's meno of 12/7.
le Comment speary set NF to hendle
property,
I.m
Regraded Unclassified
133
(Imitinued)
Jack does not think Procurement should have
unything to do with defense plants operated by RFC:
sullivan, O'Connell and Mapes agreed. On con-
sumer goods, dry goods, horses and mules, will work
on merchandising men who have been advising also on
rurchases.
McConnell asked if Mack wanted the junk
business and scrap metal; Sullivan said somebody
has to do it; HM, Jr said just because it is à tough
lob we should not duck it.
Group let except Mapes. See below.
Dec. 16, 1943
Mapes met withdiM, Jr. following above meet-
inc.
On sale of used autos and trucks, HM, Jr
suggested bringing in three big financing companies.
51,Jr would invite them down for Saturday and then
bring them over to HM, Jr after Mapes has told them
the problem. HM, Jr said there are some small ones
we should invite in. Mapes agreed.
Dec. 17, 1943.
Sullivan, O'Connell, Mapes, Mach, HSK met
sith 40, Jo. IN, Jr annoyed st Mapes (with whom he
hes noly met twice) because yesterday he agreed
Jo's suppestion re bringing in three like
was 3e inc not naved :- 513 CIT
COD'T
Regraded Unclassified
134
Bulliven, O'Connell, Mapes and HSK met with
papresentatives of automobile financing concerns.
HM, Jr told them the problem of receiving 8.
lot of surplus materials, not only automobiles, and
it isn't a muestion of financing, but wondered if
they could not help us in repossession and reselling.
Each representative gave description of how
he operates and his ideas on disposition.
Dec. 22. 1943.
List of surplus property reported to Procure-
ment by War Dept from Dec. 1 to Dec. 21, 1943.
Dec. 23, 1943.
Sullivan and Mack met with HM, Jr on surplus
items received by Procurement. Discussed disposal
of liarses, harnesses. Attached is memo "PROGRAM
FOR DISPOSITION 07 surplus LIVE STOCK"
1944.
and Fex 201 with to dis-
Its of souplaint
Regraded Unclassified
-4-
i, 1944.
Sullivan, O'Connell and HSK met with
Sullivan said that at first Mack was opposed to
setting up central inventory sustem.
Sullivan said Sen. George very cordial at
lis meeting this morning on post-war committee.
Lain issue is whether or not Congress should set
up over-all commission to dispose of surplus
materials and plants.
Jan. 15, 1944.
Mr. Sullivan attaches Mack's report ondis-
position of surplus property from July 1, to Dec. 31.
Form of report will be improved.
Feb. 3, 1944.
Be 1, Thompson, Blough, McConnell, Lynch,
O'Connell, Sullivan met with HM, Jr.
On disposition of surplus, Sullivan says
Procurement is lacking in records of any kind, no
centralized record of inventories or sales or prices
and no master record in the field offices. Wants
jermission to met 4 or 5 good men with experience
in various types of merchandise and would like per-
ission to talk to Nelson about corrowing Eddie Locke.
7.7. with Ines not sent anyboy to
and no't Tet biz 10 care look.
Regraded Unclassified
106
fee
100
-
Itstact.
-
ent.
ALLA
Good morning, Mr. Secretary.
HMM:
Good morning. I'm sorry I couldn't talk earlier.
S:
I understood fully. You asked me to call you
before 9:30
HXJr:
Yes.
B:
and I didn't get in until 9:30 and I went
over some names here.
HMJr:
Yes.
in
So that was the reason I didn't call you sooner.
TMJr:
Right.
S:
Now, I didn't see Mr. Potter because he's at
home and still suffering from the broken tendon,
so I didn't trouble him.
HMM:
Yes.
S:
But I've got you a list of names here.
MMr:
Good.
And I -- we haven't, of course, tried to check
with anybody because that was not our business.
I was just to give you the names.
Date right.
100, the first 1230 -- If 11ke to have your
take this cown, or you, either
Regraded Unclassified
137
=
34%
16 e can that I know intimately.
0.1
Yes.
ii
His name is Dr. W. -- William G. Lee, L-e-e.
HMJr:
L-e-e.
S:
He's the Chairman of the First National Bank and
Trust Company of Macon, Georgia, but he's not
active.
HMJr:
I see.
8:
He's about sixty-four years of age.
HMJr:
Yes.
8:
If anybody knows values, he does.
HMJr:
I see.
3:
Because he's been a farmer.
H/Jr:
Yes.
S:
He's now spending most of his time growing
flowers.
EMr:
Is that right?
S:
He made his money selling mules.
HMJrt
Selling what?
B:
Mules.
Mules?
Thise and horses.
PARTAY?
Regraded Unclassified
: one.
M one of the finest sen : DOV.
It that right?
He's 8 Democrat.
HMJr:
Yeah.
S:
And a great backer of the President.
HMJr:
Oh, really?
S:
Yes.
HMJr:
Funny I haven't heard of him.
in
Well, he's a very modest fellow.
HMJr:
Yes.
S:
Now, he's a man that would not be interested
in any way himself in purchasing from the
Government
HMJr:
Yeah.
S:
but he'd be a fellow that would protect
everything
HXJr:
Yeah.
S:
that he has anything to do with.
HXJr:
Well, he
#:
He's Just the type that I should think you'd
want if you can get him.
Right.
SM, se's JUST lost. dis sonths ass, two
B
Regraded Unclassified
139
cips
it sale intervated st all.
Total right,
You, : give you his name with an unqualified
récommendation because I know this fellow. I
grew up with him.
unde:
on, really?
3:
Yes.
HMJr:
I didn't know that you came from that part of
the world.
S:
Yes, I did. I came from that -- that city;
been here twenty-eight years.
MMJr:
I see.
:
I lived there all my life up to the time I
came here.
MJr:
I see.
S:
So, I give you his name as a man that if you
get, he could organize this department for you,
if you needed him to do it.
HNJr:
Really? He's big enough for that?
is
Oh, yes. Oh, my, yes.
HWr:
I see.
He'e quite a fellow and if you could get him to
come to see you
Yes.
- would be very helpful and I'm satisfied
the so would cash If per colled No = and
U.K the
Regraded Unclassified
5
even't
said
anything
to
bin
I took the liberty
Yes.
==
on Friday
MATE:
Yeah.
S:
to call in one of our Vice Presidents
HMJr:
Yes.
S:
who knows -- uh -- who 1s the head of all of our
credit work of the entire bank.
HWr:
Oh, yes.
S:
His name is Henry Stevens.
TMJr:
Henry Stevens?
S:
Now, he went out to get me some names because
I knew he could get them much better than I
could.
"Wr:
Yes.
S:
And he's here now
WWW:
Yes.
8:
and with your approval, I'm going to put
him on the phone.
WWr:
Right.
And he will give you the names and tell you about
proy of these people because be's had the checked.
30%
Regraded Unclassified
141
-
:--
you.
(Aride: This 10 Secretary Margentheu.)
Thorangt
Pood morning, Mr. Secretary.
HMJr:
Hello, Mr. Stevens.
5:
The first name that I have here is a man named
Howard Veit, V-e-1-t.
HXJr:
B-e-1 -- what was that, B like in "berry"?
B:
V for victory.
HMJr:
Oh, V for "very" V-e-1-t.
6:
That's right.
HMJr:
Howard.
is
That's right.
HMJr:
Yes.
9:
Box 176, Pebble Beach, California.
HMJr:
I see.
B:
He was, for many years, an executive of -- Vice
President of M. Lowenstein and Sons, one of the
leading textile houses here. You may know who
they are.
No. I don't.
Vall, 15's 1 very prominent textile house. Mr.
TV: business for many years....
Regraded Unclassified
112
well
:
com.
-
retired
10
1944
40's THE e great deal of experience in merchan-
dising and in managing textile operations.
I see.
is
And, I think, is a very promising candidate for
such work as you are seeking.
RMJr:
Right.
3:
Now, the next man is 2. -- 2 for zebra
HMJr:
Yes.
S:
G. for George.
HXJr:
Yes.
S:
McGee -- M-c-G-e-e.
HMJr:
McGee, yes.
S:
120 Broadway, New York.
HJr:
Yes.
in
He's a young man about forty years of age.
Jr:
Yes.
He's now with the Allen Property Custodian
Oh.
of
Regraded Unclassified
113
3t vas is here gust TWO vode 400 and : talled
with the and several others of out officers, and
DR. 1 think, 18 8. very estortent M.
: see.
He's been working for several years in disposing
of various kinds of property and has had a wide
experience.
TWe:
Good.
S:
The third name 18 Richard Large, L-a-r-g-e.
4MJr:
Large, yes.
S:
Who is now Special Deputy Superintendent of Banks
of New York City.
HMJr:
Oh, yes.
S:
He was in charge of the Bank of Chosen, the
Japanese Bank -- I think you know that name.
HMJr:
Oh, yes.
is
It was taken over by the New York State Superin-
tendent of Banks
HMJr:
Yes.
B:
and naturally, Mr. Large had to be investigated
pretty well because of his having had a connection
with the Japanese Bank.
HNJx:
Yeah.
S:
And after he we e investigated, he was appointed
8 Special Deputy Superintendent to continue the
liquidation of this bank and other Japanese banks
1.00 were taken over.
Right.
DN
Regraded Unclassified
144
right.
Tes.
E:
21 East 40th Street.
HMJ::
Yes.
S:
He's a partner in the Asset Realization Company.
HKJr:
S.S.?
9:
A-s-s-e-t.
HMJr:
Well, when you get through, I'm going to ask you
to drop me these so I'll sure have the right
names.
is
Yeah, I'll do that. I have them -- I'll mail
this to you.
MJr:
Yes.
B:
Care of the Asset Realization Company, 21 East
40th Street.
UNJr:
Yes.
He formerly was an officer of this bank.
"Jr:
Yes.
Re left here about a year ago to go into business
for himself and while he was with the bank, he
warked in -- in our liquidation department and
step - period of years has had quite S. B betantial
importance in disposing of various kinde of como-
11.00.
Regraded Unclassified
195
Robert V. Waller, W-8-1-1-8-r
-- D-c-e-r-1-n-g.
Yey, Cranford, New Jersey.
ph, yes.
St
He's had about twenty-five years experience in
industrial management, including quite a lot of
foreign service.
UNITED
Yeah.
In 1941 he spent six months with the British
Purchasing Commission in charge of rifle procurement.
"Nr:
Oh, yes.
9:
And in 1940 he was in France and he organized and
headed a Company which manufactured uniforms for
the French Army.
WMJP:
I SEP.
is
That project, of course, closed up when the Country
was invaded.
SWr:
Yes.
The next name le Albro, A-1-b-r-o.
Yes,
C. = too
Regraded Unclassified
11 -
146
Hello.
7 see.
He'e with the Witherby-Sherman Competion at
Port Henry, New York.
Oh, yes. Now, have you got many more?
:
Just one.
WITH
Right.
3:
The next name 1s H. -- H for Henry -- M. for
Michael -- Fick, F-1-c-k.
EMJr:
Fick.
S:
Care Harry Harris and Company at Kearney, New
Jersey.
H.Jr:
Yes.
S:
K-e-a-r-n-e-y.
HMJr:
Yes.
8:
He's had about twenty-five years experience in
sales and liquidation and credits, all in connec-
tion with the steel business.
H&Jr:
I see.
=
Thet's the complete list, Mr. Secretary.
MJr:
Well, you've gone to a lot of trouble and if you
will -- wouldn't mind to just -- I don't want it
confirmed, but I'm not sure that I got them all
down.
Yes.
: net it to of Air thing Mail, :- Special the
I's
it
the
Regraded Unclassified
167
12 -
A It to the Treasury bet that it If the
- Mattention of Mrs. Date
IN. Date
- 11 (PM directly to her office and I'll (st
: -
N - it to you at the Treasury and send
11 AIR Hall, Special Delivery?
Tes.
..
I'll do that right away.
Jr:
And then I'll get it.
5:
Yeah.
HMJr:
I'm ever so much o'bliged. I hope I haven't put
you to too much trouble and I want to thank Mr.
Stetson, too.
5:
All right. Thank you very much. I'll tell him.
HMJr:
Right.
S:
All right.
HKJr:
Bye.
Regraded Unclassified
14
Guaranty Trust Company of New York
-
-
140 Broadway
Persign Office
Calle
-
New York
-
---
London
St.
IN
1
March 27, 1944
- replying please refer to
VIA All MAIL
Honorable Henry Morgenthau Jr.
Secretary of the Treasury,
Washington, D. C.
Dear Mr. Secretary:
As you requested there is enclosed a list
of the names, with brief information about each, which
Mr. Stetson and I gave you over the telephone this morning.
If you shall desire additional information
about any of the names on this list both Mr. Stetson and I
will gladly respond to your further request, as it is a
privilege to be of any service to you that we can.
Hedeemens Very truly yours,
Henry C. Stevens,
Enclosure 1.
Vice President.
163
X. 2. 2
may, 2.
Trust Company, are, Georgia. nepty will
4pd del & Claims of the hard First Dational - -
aggressive; Eiglest integrity. the a HGH Non.
A as of substantial NO) the da aection, lawing min de May
W . doctor of médicine, farmer, dealar in horser of min ml
trader. Bas & variety of interests. is . hobby, on Other
and camellias. Is a Democrat and 1 strong supporter of the
President. & man of fine character and habits. Street
inactive in the operations of the bank.
HOWARD VEIT
Aged about 52. Lifetime experience in textile management and
BOX 176
merchandising. Retired since 1940. Excellent qualifications.
PEBBLE BEACH, CALIFORNIA
2. C. McGEE
Aged around 40. Now with Alien Property Custodian, New York
120 BROADWAY
office, in charge of Liquidation.
NEW YORK CITY
RICHARD LARGE
Aged around 50. For many years managed Bank of Chosen
SPECIAL DEPUTY SUPERINTENDENT
(Japanese bank). Is American citizen. Taken into
OF BANKS - NEW YORK STATE
Superintendents office when Bank of Chosen taken over.
526 BROADWAY, NEW YORK CITY
Substantial experience in liquidation and disposal of
(
various kinds of merchandise and property. Good executive.
JAMES D. ORR
Aged around 52. Former bank executive - substantial experience
c/o ASSET REALIZATION CO.
in liquidation and property disposal.
21 EAST 40 STREET, N.Y.C.
RICHARD V. WALLER
Aged about 51. 25 years experience in industrial management -
16 DOERING WAY
including foreign service. Six months with British Purchasiting
CRANFORD, NEW JERSEY
Commission in 1941. In 1940 headed a company in France
manufacturing uniforms for French Army.
ALBRO C. FOWLER
Aged around 50. General management, sales and reorganization
c/o WITHERSEE SHERMAN CORP.
experience - largely in heavy industry - machinery
PUET HENRY, NEW YORK
manufacturers - paper company - iron ore mines - rubber company.
Recent connection - managing executive of nased iron - stateg
company.
- J FE
Aged around 50. 25 years experiences is min, Dedation of
- 4 CO.
credits pertaining le steal -
- 0 DE.
Regraded Unclassified
150
s
Itres
I I =
I -
G. Law
/% not a16 - investive
hirms, First National last and Trust Company
Macon, Georgia
Howard Veit
(retired)
Textile business
Box 176, Pebble Beach, California
Z. G. McGee
(40 years old)
Alien Property Custodian's Office
120 Broadway, New York, New York
Richard Large
Special Deputy Superintendent of Banks of
New York City
526 Broadway, New York, New York
James D. Orr
Asset Realization Company
21 East 40th Street, New York, New York
Richard V. Waller
16 Boering Way
Cranford, New Jersey
Albro C. Fowler
Utterby-Sherman Corporation
> Manry, Yes York
new
- in Inter
Regraded Unclassified
151
Serv's
a
Judge.
Redio.
10's stating right on, sir.
Ballo.
Henry?
TWIS
Yeah.
R:
This is a very important call.
MJr:
Yes.
R:
I want to know what you know about the weather at
the Homestead this time of the year.
EMP:
The weather at the Homestead? My
R:
(Laughs)
HMr:
You mean my place?
R:
Oh, no. The Homestead, West Virginia.
SWe:
Oh, well, if you really want to know, I'll call
up Secretary of Agriculture and get a....
ill
(Laughs)
TV:
first-hand report.
No, I -- don't you -- don't you go there frequently?
No.
THE I'm all vide. : thought 116 : wanted
to 1110 veck : VII whether
21
be
tas
Regraded Unclassified
If
152
nod, sex
les
So, : cand't biren there, oh, in ten or fifteen
18179. : should think It would be pretty good
be it's =0 pretty high. I wouldn't know.
Casy.
WAS
What else do you know?
E:
Sorry to bother you.
MJ:
You haven't bothered me yet.
R:
That's all I wanted to know.
HWr:
Is that all?
in
That's all.
HN:
All right.
is
All right. Thanks very much.
ThJr:
Good bye.
in
Bye.
Regraded Unclassified
153
March 27, 1944
11:35 a.m.
18. David Miles.
24% you.
X mhead.
TU:
Hello.
Hello, Mr. Secretary. This is David Niles.
Rev are you? I see -- the papers say that
you're trying to get rid of Farley.
Yeah. I didn't succeed.
RW:
No.
(Laughs) Well, you should have given me better
instructions.
You go on.
(Laughs)
If I had, maybe you'd have been successful.
(Laugha) Mr. Secretary, what I called you about,
Thursday, April 6.
PAINT
Yes.
Five to five-thirty, the Jewish Welfare Board --
that's cart of the U.S.O., you know ....
TVE:
Yeah.
....828 sending a broadcast to our boys all over
the world. You see?
swe
Team.
And they'd 11km to have you participate in that
regram with R ten-minute word to those boys.
Regraded Unclassified
154
- 2 -
You can broadcast right from your office.
HW:
April
#:
6th.
HAJr:
6th.
N:
From five -- the broadcast -- a half an hour
broadcast from five to five-thirty.
HMJr:
Who's handling it? Who's in charge of it?
N:
Mr. Phil Schiff.
HMJr:
Phil?
Philip Schiff.
HMJr:
Philip Schiff?
::
Yes. Jewish Welfare Board. And he can sit
down with your people.
HMJr:
Well, would you tell him to talk to Frederik
Smith in my office?
%:
Yes.
HMr:
And I will tell Fred that he will hear from him.
X:
Yes. Well, now, can I tell him that you'll do it?
HMJr:
Well, I'd like to think about it.
N:
I see.
HMJr:
I'à like to think about it.
Well, then I'll have him talk with your office.
HWr:
Smith is my manager.
Okay. (Laughe)
25:
You tell him to talk to my manager.
All right.
Regraded Unclassified
155
After all, If a price fighter CAP Date 8
visy can't If
You should have a manager.
"J::
I do.
::
Okay.
HYJr:
Well, thank you for thinkinf of me anyway.
N:
Well, we really think that you're the -- you're
the top man to do this job. Really.
4XJr:
Well, I'll be interested and I'll tell Fred to
think about it and this is not a run-around.
N:
No, no.
MJr:
No.
y:
Okay.
Thank you.
%:
Thank you.
Regraded Unclassified
156
8, 1994
12:55
=
inc.
7. Secretary, I've just learned that because of
the the Benate :8 taking -- the Congress
Le taking, I will not be testifying tomorrow on
that bill and probably will not testify this
week. I thought I'd better let you know because
that gives you more time.
SMJr:
Which bill do you mean?
is
That's on the Economic Stabilization
Oh.
8:
bill.
Oh. But you still may go up Wednesday?
is
I hope to go Wednesday, yes.
VVr:
But you don't know?
8
No.
XMr:
But I don't have to make up my mind by tomorrow?
::
That's right. I thought I'd better tell you SO.
M.Jr:
And what else?
S:
That's all.
PN:
Cheerio.
Teach you.
Regraded Unclassified
157
land 2. 1944
2104 14
The 2011 look when to expect Dr. Auchter and
hearative 11 out of the 7015 for A few minutes.
I sec. You mean, they don't know when to expect
him?
NT:
No, sir, they say he is not in and they don't
know just when he will be in.
Well, when will his secretary be in?
Crerator:
She'll be back in just a few minutes.
RMJr:
Well, the thing that I -- find out from her who
in the Department there looks after ornament --
I'll tell you -- don't I get something out of --
I talk to somebody in the Secretary of Agriculture's
office? Give me his secretary.
Dierator:
All right.
2:06 p.m.
HVJr:
I wish you could help me out. I don't know who
in the Department looks after ornamental shrubs.
I know you have somebody.
Visa
Longe:
Yes, we would have.
MMr:
And I'd like to find out about the latest variety
of Azaleas which will grow in the Hudson Valley --
either Azaleas or Mountain Laurel.
Either Amaleas or Mountain Laurel?
both.
-
Regraded Unclassified
158
- 2 -
All right.
And if there are any particular new colors. You see?
Uh huh.
20:
Now, do you think you could get that out still today
for me?
Oh, I'm sure I can.
Mr:
And get it over here?
21
Yes, sir. I'll have a little memorandum prepared for
you.
HMJr:
And then, if possible -- if there's some one person
who follows that in the Department -- if you could
give me his name and I might want to ask him some
questions.
L:
All right. I'll put that in the memo.
ENJr:
But they have to be of a kind that will grow --
well, around Poughkeepsie, you see?
L:
Yes, sir.
HMJr:
And stand our winters.
B:
Un huh. Yes.
Wr:
Thank you.
L:
You are very welcome. Bye.
Regraded Unclassified
159
March 27. 1944
3:32 ML
Hello.
742AV
Cox:
Yes, Mr. Secretary.
HWr:
Oscar, when are you going to be free? I've got
a red-hot idea.
0:
Any time that will suit you.
KMJr:
Well, when can you come over?
C:
I can come over right away.
MMJr:
You could?
2:
Yes, sir.
MJ:
Well, come on over. I've got something that I
think can -- it's worth something.
0:
All right. I'll be right there.
HMJ:
Okay.
C:
Bye.
Regraded Unclassified
160
March 27, 1944
3:40 p.m.
PRESIDENT'S COMMITTEE - ECONOMIC WARFARE
Present: Mr. White
Mr. O'Connell
Mr. Pehle
Mr. Luxford
Mr. DuBois
Mr. Cox
Mr. Abrahamson
Mrs. Klotz
H.M.JR: Here is the fellow (Cox) who is responsible
for your being here.
MR. ABRAHAMSON: We are contemporaries, you know,
born in the same town and went to school together.
H.M.JR: Really?
MR. COX: I can still see him cutting paper dolls!
H.M.JR: When he said you went to Bowdoin College--
I forget the remark that White paid to Bowdoin College.
MR. WHITE: He is starting me off on the right foot,
isn't he?
H.M.JR: I got an idea over the week end which I
think has great possibilities, and that is this: Up to
now those of you who have worked with me right along know
do to win the war? I would like to add another one. What
I have only had one objective, and that is, what can we
can we do to shorten the war?
With that in mind, I started you (Luxford) there is
a man loose in this town whom I thought I might get to
help me. He is General Strong. I have been thinking of
Regraded Unclassified
2
Dr possibility of setting up a committee at the front
milar to this one, with Mr. Hull, Hr. Crowley, and myself,
whose object would be to prepare stuff for the President on
now to shorten the war, with General Strong 85 director.
I had General Strong over here, and he is very enthusias-
tic; he was kind enough to say there was nobody in town he
would rather work for than me. He would love it, provided
you would throw diplomatic protocol out the window and get
tough. Then he said that all kinds of things could be done.
Now, I tried this out at lunch on General Arnold, how
he felt about General Strong, because we, none of us, have
time enough. He said, "For heaven's sake, start with ball
bearings and Sweden.
MR. COX: That is right.
H.M.JR: We have these eight or ten million tons of
steel from Sweden, the ball bearings, and so forth, and so
on. I don't think I am breaking any confidence in this
crowd. Strong said, "Well, I know what Sweden wants. They
don't want very much, and I think you can get it. They want
8. few Curtiss-Wright engines. They want 8 few repairs for
their airplanes. There are 8 few things like that," he
said, "which you have to get over the dead body of Robert
Patterson.'
and a half when Mr. Churchill took me down to Dover, he
Now, I know about the chrome in Turkey, because 8 year
the Ambassador ago with me and asked me to be nice to him.
They took the done about, parts had something eight a as steel far or with ten mill as million forth. Turkey. I half know. completed. I tons And But am in of sure there those steel, everybody They is days chrome the have you ball in that never could the bearings I know gotten room have
from Sweden, we know--the and so diamonds and the platinum from South
here, America as which we know is going in, and these things which
could very easily shorten the war from three to six months--
COX: That is right. It is more complicated than
you have MH. given of the Swedish thing, but that doesn't mean
It isn't 5. good idea.
Regraded Unclassified
182
=
dat now Look, Occar, hom would Cromley and
you people feel If the President die this thing, that be
be stepping across you?
NR. COX: I wouldn't feel that way at all. I would
De all for it, for the simple reason we could convince
Crowley, too, this involved the combination of diplomatic
pressure, or chucking it out the window, the use of all
the weapons you have in the economic sense and being tough
at this course of the war, because all the neutrals know
pretty damn well you are going to win. They have certain
interests in being on the winning side, but you have to
be pretty tough with them at the same time.
I would think we would all be for any assistance that
would go toward shortening the war, and I should think
this would.
MR. WHITE: I would like to introduce a little sour
note into this. I don't think you can shorten the war one
hour by small steps. I think the idea is excellent, pro-
vided you want to take on some real fights, and then, I
think, you can do 8 great deal to shorten the war, or you
can shorten the war by 8 great deal, let me say, if you
use the full power of the United States against these
neutral nations.
I don't think the approach in getting 8 little more
ball bearings or less, 8. little more of this item and less
of that item is going to affect the war at this stage of
the game at all. They have been trying that, and I think
that any attempt to buy Sweden off in any case is in the
direction. I think that with your objective, if
wrong you could outline the policy--and I am a little skeptical
about your achievement, because you are running counter to
some very large forces, which require an entire reversal
in attitude toward neutral nations. The time being
with our then I think you can accomplish something, but I
think us, the approach must be or. some very drestic reversal of
14: foreign policy and not through methods slee
R. COS: Do beth, Barry. Dr revered. let already
to take place. For 100 is the nace < Tyain--
Regraded Unclassified
152
4
DRJ tried solely preclusive buying of wolfram, which we
COR isn't an effective thing until the pressure got so
110006 on the State Department that they made three clear-
rut demands on an oral basis to the Spaniards. One was
tjet they clear the spies out of Tangiers, that they
release some of the Italian ships they had, and cut down
on the shipments of wolfram to Germany. That was on the
diplomatic front. At the same time, it doesn't exclude
the other.
On the Turkish thing, in addition to preclusive and
getting them supplies--and this is very much off the
record--the President has just sent a letter to Inonau
in which he says, without making any threats, won't you
do something to cut down the chrome shipments to Germany?"
Now, the Turks know. They happen to be a people that
know when you say that--they always figure out what you are
going to do if you don't do it. You have to combine all
these technical things.
But I would say in hastening the pressures on the
tough basis that Harry is talking about, I think this kind
of board would help.
MR. WHITE: Only if that were its objective.
H.M.JR: Let me put it the other way, Harry. Supposing
if Oscar Cox says, "Look, Morgenthau, everything is being
done; there is no room for such 8 board."
MR. WHITE: Everything is being done, or almost
everything is being done at the low level which in my
opinion is wholly ineffectual.
MR. COX: It is being done at higher levels.
ER. LEITE: I de very aceptical of that.
18. = It is -ot enough.
13. and think anything 1100 the sort of
are are trising that is 200+ st the
Regraded Unclassified
104
-
H.2.JR: Now look, Harry, can we get a little rough
around here?
MR. WHITE: If we can't, me won't get anywhere.
H.M.JR: If you don't mind, I think for once you have
a very defeatist attitude. I am talking about a group
working with the President, supplying the material to the
President so that he will use it. I am giving the window
dressing with three Cabinet Officers and suggesting putting
a fellow in like Strong, who knows his stuff, and has an
accumulation and is rough and tough. I know it, and he
is willing to take chances. In other words, what I was
trying to duplicate on this front is something which has
worked, like having Pehle and having us stuffed shirts up
front.
All Strong said was that he needs two people. That
is all he wants. Then this thing would be fed to the
President and explained to the President, and if necessary
8 little pressure put on the President. We can satisfy
that to do this thing.
MR. DuBOIS: I want to say that the defeatist attitude
that Harry has, or whatever you want to call it--it seems
to me that what you are really asking for is some group
that is going to be able to change our State Department's
policy. That is 8 big order.
MR. LUXFORD: That is right.
MR. DuBOIS: That is the basic difficulty, as I see it.
MR. COX: Let me give you an illustration of the proof
of the Secretary's thing. One--
H.M.JR: No--may I interrupt you? You are my guest;
you talk first.
MR. COX: No, after you.
H.M.JR: These fellows emase me. Now listen, the only
thing the President can put in a positive foreign policy
Regraded Unclassified
TVE
ID -
after last week's attack on Hull and him is the first
paragraph of this Refugee Committee. Read that. You don't
have to ask.
Now, if my guess is right, I think it would fall on
most welcome ears, and he would love it. Let's be a little
bit practical. Just as this thing was timely because
Congress had a bill, there isn't a man, woman, or child who
hasn't some relative in service; and if the President of
the United States begins to talk about doing this, that,
and the other thing to shorten the war, my God, I don't
see what is the matter with you fellows. If the President
doesn't want it, he can say so, because in the first place,
why do I go on? I go on there to be the SOB on the thing.
Hull and Crowley can say, "We don't need Morgenthau;
that is none of his business. We don't need General Strong;
that is none of his business." But if the President says,
"I want Morgenthau and I want Strong to feed this stuff to
me and he is welcome to it," what more do you fellows want?
The President has to say, "I want it. I want to know
what I can do. I will handle this myself."
MR. LUXFORD: Mr. Secretary, I think that all we are
saying is--
H.M.JR: You fellows had better get some fresh air.
MR. LUXFORD: There is 8 battle that in any way you
slice it is with the State Department. You just can't get
away from it. That means even against the President.
H.M.JR: You are wrong there. Listen, you fellows, I
have forgotten--I can take care of the Democratic State
Chairman in three seconds, and I will be back.
(The Secretary leaves the office temporarily.)
H.M.JR: Have you gotten anywhere?
MR. COX: I think me have moved Harry a notch.
:
alsunderstood. Vh. Now that I understand your position
WHITE: He baz moved 28 over to ais position, is but
Regraded Unclassified
11X
7 -
nest it is, I gather it is the same as mine. It is fine.
(Laughter)
I am willing to agree with him since he believes as
1 do.
MR. COX: Monday afternoon double talk. Tell him
what we agreed on.
H.M.JR: Somebody will have to take the Professor
from Bowdoin afterwards out of here and explain to him
that these things go on every day.
MR. COX: You don't need to.
H.M.JR: Is he all right?
MR. COX: Yes.
H.M.JR: Harry, now I find myself in the same position
as you.
MR. WHITE: No, I want to make certain that Oscar is
interpreting you correctly. He seems to be pretty certain
that that is his view.
MR. COX: I didn't say it was his view, but I said it
was my view.
MR. WHITE: Don't back down.
H.M.JR: Can Oscar talk for himself?
MR. WHITE: Yes, while we are here, sure.
of
access views this MR. thing, that to COX: the may Mr. President, My be Secretary, major imbedded point out is in from three 8.8 that the to under State it examples. the gives advantage any Department you particular In direct the or
any for place 5. inertia. few on Turkey, minutes. I can Win He give Riefler talked you went about in preclusive to see the turned buying. President to first At
Cabinet Stettinium and Crowley and said, "IN don't you
meeting I understand the President buy
chrone for cash in Turkey
Regraded Unclassified
- a -
of course, we have been buying for cash, and that
waso't the problem at all. Apparently nobody has ever
told the President what the problem WBS in the chrome
shipments from Turkey to Germany, and they were going up.
%in was just on his way back and was caught at that
point, and the State Department was on this preclusive thing.
MR. WHITE: Didn't Riefler explain to the President?
MR. COX: No, he just happened to mention it in pass-
ing. The President got it in his mind and mentioned it at
Cabinet. Riefler got up after clearing with the State
Department and Crowley this letter to Inonau, which makes
sense and is adapted to the particular thing.
H.M.JR: Do you have a meeting going on in your room,
Harry?
MR. WHITE: I had a group coming at four. They are
our boys, and they should discuss it for twenty minutes
before I come in.
MR. COX: The second thing is the Spanish thing where
certain people in this town were pressing. At first the
Combined Chiefs of Staff said, "Lay off being rough on
Spain until we are ready." Then they gave the green light
after some pressure. They got a little bit tough.
weakest ones. You have particular problems. Acheson has
Now, the Swedish and the Swiss things are the two
always had strong views as to how you should deal with
Sweden. That viewpoint is the only one, if presented at
all to the President. I bet you fifty to one today the
President hasn't any idea shat the policy on Sweden is.
Nobody has taken any initiative on putting it up to him.
I at this stare of the 117 if you say to the Swedes, to
"If say don't cut - your iron are by fifty percent it.
: Termany the nost effective thise jes ell do, quite aside be
you se will take roath seasures," the, will do from That
part of too init. M = think yes cash do E good
supplying 1:40 with enginee of curr things which job. may
Regraded Unclassified
168
What I mated Iron you was, if you tell me,
Doe, look, please keep out of this; everything is lovely"--
zin. COX: I can't tell you that; I don't think every-
thing is lovely.
H.K.JR: I don't know what Harry was talking about.
I just can't get it. I am talking about supplying materiel
to the President 80 that he can act. I should think all
of you would be delighted with that.
MR. WHITE: I am very skeptical, but it is all right.
I am skeptical that you are not going to shoot at drastic
enough measures. I gather from Oscar that I am wrong. If so,
fine!
MR. COX: I think Harry's quarrel, which is sound, is
that if you only go to Sweden and say, "Now, look, stop
sending ball bearings, and we will get you some airplane
engines," that isn't enough at this stage of the war,
necause victory is sufficiently close, and the Swedes are
worried about how they will stand with the Scandinavians
and with us in terms of trades. If you are absolutely
tough with them and say, "Now, look, 8 lot of people have
been killed in this war 80 far; you haven't taken the
responsibility; you are sending 50 much iron," they will
come back and say, "We need coal from Germany." You will
and will have to use all the methods in your hands,
BBY, "Well, you will just have to put up with less coal,
which you are blockades, outting off all supplies, if necessary."
But be absolutely tough and get the thing done.
de that particular problem. I think by access to would the
Sow, the State Department is not ready to act in that
- President you can get a lot tougher action than you
jes den't have this group.
- the attempt to do that up to now nas failed, and
a WHITE: May I follow that line of thought? Iss it
lave been too difficult to do it.
Loste is something new is the situation,
- 26467 special point of your idea, and the 14.
Regraded Unclassified
- 10 -
St victory seems 80 close that it is possible that
sould start an avalanche of the neutral nations
being shut off very hard on Germany, then I
think you might well hasten the end of the war. You
souldn't have done that before. You may be able to do
It now.
H.M.JR: I haven't made myself clear at all here.
I have to be a little franker.
MR. COX: I get it.
H.M.JR: No, I mean they have no head start on you (White)
other than their own brain.
MR. WHITE: Well, their brain is better than mine.
H.M.JR: I am not saying that. What I am trying to
get over is this: We keep talking about Hull all the
time. Mr. Roosevelt is Commander-In-Chief; he has 8. brain
of his own. Now, if you get certain things to him in spite--
I mean, the best illustration--John and these fellows know
what I have gone through the last six weeks, I mean, to get
the thing through. I am not going to tell them. They know.
Despite Judge Rosenman and his publicity man over there, we
have gotten this out.
MR. COX: It is one of the best damn things that has
come out.
H.M.JR: But if you sit back and say, "Here everybody
in the White House is against it; you shouldn't start,"
all right, that is the same theory. "Everybody is against
the thing." But finally the President makes up his own mind
that he wants to do it.
Now, all I am saying is where I differ, I don't think
victory is in sight, end I haven't yet talked to a top rank-
beach-head. I don't think you can leave a stone unturned
ing soldier who has convinced me that we are going to get a
to make this operation, when it comes, & success, and you
just can't sit back and say that x th these troops that we
Regraded Unclassified
178
- 11 -
leve, are 20 forth, and 20 ca--- General Arneld said te
18 don't know whether the estimate is correct--
10 said, "Do you know how many sec the Hussians have
thrown into this?"
I said, "No."
He said, "Twenty-five million."
Put that in terms of the United States. And we sit
back here and we still aren't really getting down to cases
in this war. And I don't think that anybody that I have
talked to has convinced me that it is a foregone conclusion
that the spring operation is going to be 8 success.
I think the President, himself, has to make up his
mind that he is really going to get tough and not leave a
stone unturned anywhere in the world to keep the stuff
from going into the hands of the Germans. Now, in order
to do that, he has to do things differently than he has
ever done them before. I have enough energy left and
enough daring to be willing to be the spearhead on this
thing, and have it known around Washington that I am the
spearhead on this thing.
I am going to explain it to him in advance, and he can
say, "Henry, this is none of your business. Please keep
out." But if he says, "No, I would like you to do it,"
what have I to lose? And if, for instance, somebody has
done the most terrific job on the President--Hull said
last week they have no foreign policy with the exception
of the Jewish Proclamation.
Suddenly somebody like Mr. Willkie is going to be
smart enough and simply ask the President point blank,
is asked that, what is his answer going to be? He hasn't
"What have you done to shut off the neutrals?" When he
any. And I am saying that I think, according to my judgment,
the time is right to feed this stuff to the President, and
I think there is better than 8 fifty-fifty chance he will
take it.
VR. WITE: That is fine.
Regraded Unclassified
- 12 -
W.E.JR: Don't be so patronizing; I am really talking
getting rough.
WR. WHITE: I am not patronizing. I am directing my
remarks to your original remarks in which you said you would
get General Strong and he would give various ideas. One of
his first ideas was that Sweden would stop sending ball
bearings to Germany. I think that is peanuts.
H.M.JR: General Strong said he wasn't interested
unless all protocol went out of the window. Maybe you didn't
hear me say that. He said, "There is no use talking, Mr.
Morgenthau, unless you agree from the start all protocol
is out, State Department is out."
MR. WHITE: That presents possibilities; it is very
worth while exploiting, sure.
MR. LUXFORD: But do you think that the State Department
is going to agree to that, that Hull is going to agree?
Let's go a step further. State is going to begin slugging
you at once, saying you are leaving Britain in & wonderful
position. We are going in and making all the sacrifices
and Britain gets all the post-war markets. They won't go
along. It will be the same story as Argentina.
H.M.JR: You can't tell, after what Mr. Hull went
through last week. He may wake up some morning and decide
he is going to get tough. If you had told me a couple
of months ago that he would let the cables go out that have
gone out from his place, I would have laughed at you. I
wouldn't have believed you.
MR. PEHLE: I think we tend to forget how impossible
it would have looked.
Regraded Unclassified
=:
TH: You had better shout in this room.
Mr. ABRAHAMSON: I think, in that connection, it
was a very pleasant shock to me over the past month to
see what the War Refugee Board is doing. For twenty-
two months I was with a private agency on the outside
wondering why things weren't done, and you can say -
and I can still be detached about it - that every
reasonably promising idea in the field of refugee work
is being followed and followed rather toughly - some-
times a little brashly - but even that is good.
Now, I think that there may be some analogy here,
that just as the President was happy to use the Proclama-
tion, not only for its intended purpose, but as 8. state-
ment of foreign policy, that some group like this,
particularly if it has ingenuity, can furnish him, and
maybe Mr. Hull, with some ideas which they would find
useful.
MR. COX: There is one other factor here that is
of tremendous importance to my mind, and that is the
American public has understood the connection between
foreign policy and lives. I don't think, as far as the
President is concerned, that the initiative, in terms
of the regular agency, is ever going to get off the
defensive in terms of protection of the President - in
addition to its other merits - unless you do something
like this kind of thing, followed through, because the
President has no access to these problems. He doesn't
know - the chances are better than even that in almost
any of these cases you follow through and you will have
an open road and publicly foreign policy is made up out
of a bunch of concrete things, and it is pathetic that
he had to fail back on this statement as one of the
concrete things to indicate what the foreign policy was.
MR. ABRAHAHSON: And then you had the follow-up
bull's every Seventeen-Point Plan - but what, specifically,
in newspaper, simost - "This is a fine statement,
are you going to do about Spain, about France, about
Regraded Unclassified
africas" Lod torm they wanted implementation in
of actual pulletes.
My guess is the nepublican National Com-
mittee has done 8 job. It smells like it and it looks
like it. They have gone to work on it.
MR. COX: They will keep it up through the campaign,
no question about it.
MR. ABRAHAMSON: Look at that group led by our
Congressman, Robert Hale. He led seventeen people in
to see Secretary Hull and they came out and said the
American foreign policy seems to be silence. And
Hull had to come out and say, "I was misquoted, as
frequently happens when & small group gathers, off
the record. They didn't quote me correctly." Then
a few days before that he had to say to reporters, "I
don't want to talk specifically about foreign policy
because I am preparing a radio broadcast. I don't want
to take the edge off of it."
I think they are on 8. spot.
MR. COX: One key illustration in this particular
field, and that is in the field of Federal alloys.
Since the Russians have recaptured Nikopol, most of
the stuff, steel-making in terms of alloy steels,
comes from Switzerland, Sweden, Portugal, and Spain,
with some from Rumania. Now, if you can close off the
neutrals you have done & major job in terms of war-
making.
Min. WHITE: No question about tiat, if you can
close them off.
R. COX: But it is worth a try.
Your point is, if you go into
100 10 In Is a tough may.
Regraded Unclassified
274
15
Date: In state wris, the Secretary Das to be
to spend 5. lot of time = the thing. That is
it beils down to, Hr. Secretary. If you 178 pre-
to spend 8. lot of time--
WHITE: For big stakes.
MR. DuBOIS: For real big things, that is something
different. But going in for the sort of things that I
understood, I don't see much hope. But if you are going
in with full responsibility for the conduct of it, then
there is hope.
MR. LUXFORD: The square issue is; one, we are
going to have to change it from the State Department
policy to & fundamental policy. If we are willing
to take that job on, we may be successful, but we can't
do it with instinct.
MR. WHITE: Let's not lose sight of what has just
emerged from the last ten minutes. The avenue the
Secretary has provided, the plan he has provided - the
only thing that there has been some disagreement about,
and the only thing I would like to see clarified, and is
being clarified, is that what you have gone after through
those channels are the big stakes.
Mh. PEHLE: Major foreign policy.
MR. WHITE: Major matters.
the PERIE: Including the whole attitude toward
Spain.
R.M.JR: This is must 1 dictateo on my machine at
home. : dictated this as a memoranóum: "Suggestions for
the President; tust he set up a Committee of Hull,
Drowley, and syself, with General Strong as Director and
=xecutive Secretary, to push economic varfare OR our
coosies with the objective to depri the of highly
critical strategic interials. The notts of this Committee
showld be, 'What Cill se de to and the ne? main
Regraded Unclassified
175
18
24: is shat I last distated at of 4 lieud if &
It any not be inglish.
WIT: I would make it broader.
H.M.JR: I just wanted to say, Harry, that I
musn't thinking of a pea-shooter.
MR. WHITE: Well, I was misled by your illustra-
tion.
MR. COX: The only other question - not knowing
Strong well enough - is he the kind of fellow you want
as Executive Director of the thing?
H.M.JR: Well, he talked about bringing two people
over with him - what is his name?
MR. WHITE: Neff.
H.M.JR: No.
MR. PEHLE: Towson.
H.M.JR: Towson and Walter Smith.
MR. WHITE: Neff would be a good man.
Mr. ABRAHAMSON: You would have to get the people
under Strong, I think, to be a little more shrewd on
on the economic side than Strong has been. From some
experiences I have had, I think it is fair to say that
even just before he retired, Strong had a very imperfect
knowledge of the economic strength of the enemy and of
the neutrals, and there have been occasions when his
Coionels have been willing to subtract as high as
twenty or thirty or forty percent from the figures he
Lad been using. Á lot of that comes in on the OSS busi-
mean, which probably wouldn't have been set up if he
not 15 adequate--
Regraded Unclassified
176
- 17 -
WITH: I would rather see Strong 8. member of
cord, just have a General on the woard and get
benefit of whatever knowledge he has, and then have
ministrative Secretary, somebody who is much more
overful than Strong ever gave any su gestion of being,
Rx. COX: One other question here you ought to
consider pretty carefully. If you can bring the Com-
tined Chiefs of Staff in, in the sense that you have a
link to the people on the Staff, then you can get more
effective action.
In other words, even if somebody in the State
Department stands up in the way, and the Combined Chiefs
of Staff say, "All right, we want to go ahead, and we
will take the risk" - as they did in Spain, then you can
go ahead.
MR. WHITE: Combined Chiefs of Staff? That includes
England.
Mile COX: Yes.
MR. WHITE: England--
MR. ABRAHAMSON: I thought you meant the Joint
Chiefs.
MR. PEHLE: I don't think you can get anybody with
the Combined Chiefs.
MR COX: No, but somebody to talk to the people on
the Staff, somebody who knows Arnold. I think Strong
WO ld fit that part of the bill. The only question I
have is whether he is tough enough and smart enough.
The one who has been the toughest and has fought right
MR. WHITE: I have a suggestion, Mr. Secretary.
along and has, I think, exactly the same views as you
Live on this thing, is Patterson.
Regraded Unclassified
177
. 18 -
H.M.JR: He says Patterson would be one of the
stumbling blocks.
MR. WHITE: Not on Sweden, Switzerland, and Spain.
MR. PEHLE: He was very good, and the man, Neff, is
excellent.
H.M.JR: On getting material out of the country.
MR. PEHLE: I don't blame him for being stuffy be-
cause you send it out and it doesn't accomplish a damned
thing because the State Department's policy is to let
Sweden send anything in, anyhow.
MR. ABRAHAMSON: You know, where liopkins was Chair-
man, and Lubin was - the Munitions Assignment Board,
mich reported directly to the Joint Chiefs of Staff,
is sort of going out of business.
MR. COX: Burns is sick. lie would be all right
for this sort of thing because he knows all those
fellows on the Joint and Combined Staffs. He is an
active guy. York is taking his place.
MR. PENLE: The kind of guy I think you ought to
get for Executive Secretary is Coionel Bernstein, then
you would have something. Then you would have somebody
TWO is really going to drive and see it in big terms.
MR. LUXFORD: Couldn't have a better one. If you
want to put Bernie under Strong and Strong is going to
be the figurehead, and let Bernie operate, it will be
all right.
MIL WHITE: Strong shouldn't be on the Administra-
tive Board.
MIL PERLE: Bernie would make the difference between
success and failure, I think.
IL.M.JR: Are you fellows beginning to like the idea?
Regraded Unclassified
. 19 -
MR. ABRAHAMS N: Wouldn't you gather 10?
MR. COX: You don't ask the girl whether she wants
the engagement ring unless you like her. They have
come around.
H.M.JR: God! I never worked so hard in my life!
Mr. ..HITE: Your sights are in exactly the same
place as they were when we started, but we have seen
them differently.
H.M.JR: That is right.
No, I am going on the assumption that the President
has to do something in the foreign policy field which is
quite different from anything he has done before. And
he needs help to do it. Where is he going to look for it?
Is Crowley going to give it to him, personally? I mean,
is Crowley going to walk over there and say, Mr. President,
I think you ought to get tough and rough with Sweden"?
MR. COX: Well, he has done it with the State Depart-
ment, but he hasn't done it--
H.M.JR: My question is, with the President?
MR. COX: I doubt it, unless you get this kind of
& mechanism, because the principal advantage, as I see,
of this is if it is a Board set up by the President,
have direct access as a board, and you don't have have to
you clear everything with the State Department. If you
two votes the board, even if there is a dissenting
vote, you on can deal directly with the President. It has
an enormous advantage.
MR. ABRAHAMSON: I think the analogy with the War
Refugee Board is very good.
E.V.JB: That is where I got the thing going over
the neek end.
Regraded Unclassified
who It is . good analy.
It is & product If you have 1 strong
de the executive Secretary.
чк. WHITE: Currie would be 8 good man, in FEA. Le
would be a logical man. He certainly would be much
better than Strong. I think Strong is a good man, but
I think he belongs on the Board, if anywhere, as an
adviser. The very fact that he didn't see Patterson's
point in this thing shows he has missed the boat,
completely.
Patterson has fought against giving Sweden even nickel
and a few other items because he has said that whatever we
give Sweden is a help to Germany and we can't trust her.
In other words, what he has conceived to be Patterson's
obstacle is, in effect, Patterson's strength.
H.M.JR: Is Neff an attorney?
MR. WHITE: No, an economist. He is a very deceptive
fellow. lie acts about sixty. lie is very shrewd, very
persistent, very capable, and his heart is in the right
place.
H.M.JR: where is he deceptive, Harry?
MR. WHITE: He looks ineffectual when you first
meet him.
MR. PEHLE: But he is very good, particularly on
these questions.
Mr. WHITE: lie has been Patterson's adviser for the
last couple of years.
is such better than X unk appear to be. (Laughter
O'CONNELL: DE 10 8. deceptive poster player, too.
the
n
will
on the what aministrative Town Le IM
Regraded Unclassified
4
I
seet
E
the
any
in
this
ulti: 1 datt think you need a bright 547
in problem, I think all you need--
M. WX: I mean, he sees the objective with great
clarity.
Use ABRAHAMSON: Has to be willing to slug.
MR. WHITE: The objectives are much clearer. I
don't think you need nearly the ingenuity and imagina-
tion that you do in this other job.
Mia COX: Why don't they go into subcommittee and
recommend names to you.
H.R.JR: I am not worried about names. I just
wanted to talk the thing out and see that I was in agree-
ment with you people.
MR. WHITE: Doesn't the Directive in the FEA include
the same thing as Board of Economic Warfare, or has it
been modified?
MR. COX: No Board.
ML. WHITE: I mean, haven't they carried over?
MR. COX: They have carried over all the functions,
yes.
V.. VI ITE: And this economic warfare is a function.
reason why this shouldn't go forward, but I think it
reason why they have got to appear to play 8 major
no, I n action as through 1 just TMP L
wanted 10 that 1
Regraded Unclassified
171
22 -
det an anything about Washington or anything else.
cast to et something cope, see?
Cn. COX: Se is having unusual trouble:
H.V.JR: O.K. I enjoyed myself. I hope you all
did.
Regraded Unclassified
Hello.
Yes.
Is this the secretary to the Secretary of Treasury?
No, this is Mr. Morgenthau speaking.
Mr. Morgenthau?
Yes.
This 18 Ambassador Gromyko's secretary.
Yes.
I would like to speak to the secretary -- that's
all right. You see, a week ago Mr. White was
here at the Embassy and he saw one of our pictures.
Yes.
And he asked if it will be possible for us to send
it to the Treasury Department
MJr:
Yes.
for the Secretary.
Yes.
And the Ambassador promised to send it
Yes.
and he would like to send this picture today.
Yes.
And to whom shall we address -- I'll send my
challfeur with this gicture.
Regraded Unclassified
183
=
You 10% for Mr. FitzGerald.
%=.
THE
FitzGerald.
:
Fitch?
HMJ:
Fitz.
S:
Will you spell it please?
HMJr:
F like in Frank.
S:
Yes.
HNJr:
I.
S:
Yes.
HMJr:
T.
S:
Yes.
HMJr:
z.
S:
z.
HMJr:
G.
S:
G.
HMJr:
E.
S:
E.
HMJr:
R.
8:
R.
HMJr:
A.
S:
A.
HMJr:
L.
S:
Yes.
EMJr:
D.
Regraded Unclassified
194
5
L-d. 20 but. At the Treasury?
Yes. He's in my outer office.
in
I see.
H.Jr:
And this is Mr. Morgenthau you're speaking to.
5:
Uh huh. Thank you.
HMJr:
You're welcome.
S:
Thank you, sir. Bye.
Regraded Unclassified
Given to the Secretary by < b. line
185
on 3/27/66.
-
Regraded Unclassified
FEDERAL EXPENDITURES. RECEIPTS AND DEFICIT
with Estimates for IS44 - - - Postits:
-
-
Expenditures
-
90
11
N
:
so
10
10
60
NO
mor
9
9
70
TO
-
8
60
57.8
60
7
7
50
50
6
6
5
40
40
5
4
4
30
30
3
3
206
20
20
2
2
9.8
10
10
I
I
0
o
o
0
1940 1941 1942 1943 1944
1940
1941
1942
1943
1944
60
60
7
7
Receipts, Yearly
Receipts, Monthly
50
50
6
6
42.6
5
5
40
40
34.6
4
4
30
30
3
3
20
16.4
20
2
2
10
8.9
5.8
10
I
I
0
0
o
0
1940 1941 1942 1943 1944
1940
1941
1942
1943
1944
70
70
7
7
Deficit, Yearly
Deficit, Monthly
60
6
6
55.5
56.6
60
50
5
5
50
4
414
4
:
40
3
3
30
30
2
2
20
20
#
4
:
o
D
o
$
1942
1543
Regraded Unclassified
197
27 1904
Dear Mr. Wiggins:
I have your letter of March 24,
1944, advising me of the names of
the individuals appointed to the
subcommittee of the American Bankers
Association Committee on Treasury War
Borrowing to work closely with the
Treasury on banker participation in
the next War Loan Drive.
I am very well pleased with the
individuals appointed to this committee
and I appreciate your taking such
prompt action. I am sure that the
committee will be very helpful to all
of us.
Thanking you for your splendid
cooperation, I am
Sincerely yours,
(Higned) E Jr.
Mr. A. L. M. wiggins
President
American Bankers Association
Hartsville, South Carolina
DWB:NLE
outs
Regraded Unclassified
THE AMERICAN BANKERS ASSOCIATION
CARCUM
New York, N. Y.
March 24, 1944
Honorable Henry Morgenthau Jr.
Secretary of the Treasury
Washington, D. C.
Dear Mr. Secretary:
In accordance with your suggestion at our con-
ference on Tuesday, with which we are in full agreement, I am
pleased to appoint a subcommittee of the American Bankers Asso-
ciation's Committee on Treasury War Borrowing to work closely with
the Treasury on banker participation in the next War Loan Drive.
The members of this committee are:
Tom K. Smith, President The Boatmen's National Bank,
St. Louis 2, Missouri, Chairman
W. Randolph Burgess, Vice Chairman of the Board The
National City Bank, New York 15, N. Y.
B. M. Edwards, President South Carolina National Bank
Columbia, Box 750-E, South Carolina
Robert V. Fleming, President The Riggs National Bank,
Washington 13, D. C.
Charles E. Spencer Jr., President First National Bank,
Boston 6, Massachusetts
Bankers throughout the country have been glad to
make a substantial contribution to the success of all the War Loan
Drives, and I am sure they will be willing to put forth the extra
effort that will be needed to make the Fifth War Loan Drive a suc-
cess.
I am notifying Under Secretary Bell and Mr. Gamble
of the appointment of this committee and of the readiness of the com-
mittee to respond to the call of the Treasury at any time.
On behalf of our committee, I wish to thank you for
your hospitality and for your consideration of our recommendations.
Yours Mmm very truly,
President
Regraded Unclassified
195
MAR 27 1944
Dear Randolph:
I have your letter of March 22,
1944, enclosing a memorandum of
recommendations concerning the
Treasury's financing program for
the next few months as submitted
by the American Bankers Association
Committee on Treasury War Borrowing.
I appreciate the splendid work
this committee is doing in helping
us make plans for our financing
program for the months ahead. It is
very helpful to me in every way.
Sincerely yours,
(Stgned) Heary
Mr. W. Randolph Burgess
Vice President
American Bankers Association
22 East 40th Street
New York 16, N. Y.
DWB:NLR
owB
Regraded Unclassified
THE
AMERICAN BANKERS
ASSOCIATION
I I 2
22 East 40 Street. Now York 10.NY
ENGON
REMO -
4CmL COMMES
WALTER a. FRENCH
STATE BANK Invoice
BRANCH OFFICE
SANE MANAGEMENT COMMIS
719 is STREET, N.W. WASHINGTON S.D.C.
CREDIT POLICIES COMMISSION
MEDIAM
EDGAR 1. MOUNTJOY
NATIONAL BANK DIVISION
Bur
WILLIAM POWERS
ICHARD W, MILL
CUSTOMER AND PERSONNEL .
March 22, 1944
MERLE I. SELECMAN
CONTROLUR
TRUST DIVISION
11. IDDNEY
PUBLIC RELATIONS COUNCIL
C/Xy
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
Dear Mr. Secretary:
In accordance with Mr. Wiggins' under-
taking yesterday, I enclose herewith B. transcript
of the findings of the Committee on Treasury War
Borrowing of the American Bankers Association which
were given orally by Mr. Wiggins at our meeting
yesterday afternoon. May I add that we have all
enjoyed this opportunity to participate in the
planning which you and your Department are doing
in connection with this important national under-
taking.
Yours sincerely,
whandas Buyess
Vice President
WPB:TE
Inc.
Regraded Unclassified
é I 1 3 I a 1
Y I 3 I
less the Committee - Treasury hr Borrowing of the
Larias Bankers Association
leeting - March 20 to 21, Treasury Department
Washington, D. C.
The following were present:
A. L. M. Wiggins, President Bank of Hartsville,
Hartsville, South Carolina, CHAIRMAN
Robert V. Fleming, President The Riggs National
Bank, Washington, D. C., VICE CHAIRMAN
Harold Stonier, Executive Manager A.B.A., 22 East
40th Street, New York City, SECRETARY
J. E. Drew, Deputy Manager A.B.A., 22 East 40th
Street, New York City, ASSISTANT SECRETARY
Edward E. Brown, President First National Bank,
Chicago, Illinois
W. Randolph Burgess, Vice Chairman of Board The
National City Bank of New York, New York City
B. M. Edwards, President South Carolina National
Bank, Columbia, South Carolina
R. B. Newell, President Hartford National Bank and
Trust Company, Hartford, Connecticut
Tom K. Smith, President The Boatmen's National Bank
St. Louis, Missouri
Robert Strickland, President Trust Company of Georgia,
Atlanta, Georgia
The Committee discussed the financing program with Mr.
Daniel Bell, Mr. Ted Gamble, Mr. George Haas, and other Treasury
experts. It has reviewed three confidential memoranda. It then
devoted most of its time to the problems of the 5th War Loan and
particularly to the specific problems suggested in an agenda presented
to it by Mr. Dardel Bell.
Before recential - MILD - x specific parts of the
program the general - M - set the Committee 808 in-
pressed by the affered in connection
Regraded Unclassified
192
etc the 56h Tat Loss trim is to the facts State companies end
wrings beach in the cerlier frime - und 4 their DE received and
(nif made available by the rale of other obligations; similarly that
seilthier individuals have also bought bonds in previous drives out of capital
and this operation cannot be repeated. Higher taxes are also & handicap. Much
of the newly created funds are in areas less readily reached. The Committee
found no magic formula for overcoming these difficulties, but concluded that
the prime necessity was careful planning and hard work to sell as large as
possible a sum to non-banking investors and keep at a minimum the amount of
securities necessarily absorbed by the banks with their consequent inflationary
dangers.
(a) DATE OF DRIVE. We recommend that the drive begin June 7 and end
July 5, thus bringing in the 4th of July holiday for its concluding effort. We
recommend that savings bonds received during the full months of June and July
be included in the drive. We believe the drive for all types of investors
should be simultaneous as in the 3rd Loan.
(b) BASKET OF SECURITIES. We recommend that the following securities
be offered: Series E, F, and G Savings Bonds, Series C Tax Notes, a One-Year
7/8% Certificate of Indebtedness, a 23% bond of approximately 25 years under
the same general restrictions as the long-term bond in previous loans, and a
21 merket bond of approximately 10 years maturity.
(c) PARTIAL PAYMENT PLANS. We do not favor the setting up of a new
will payment plan through the banks. The banks do not have available the
in clerical help for this purpose and it is doubtful whether any substantial
aubscriptions would be received. Those desiring to make such pur-
am swillable the $25 bond and savings stamps.
is repia, however, the great value of the partial payment
" the payroll savings program which already covers a large
more I 4 bond buyers and we believe that these plans stould
claim
und
(Jaste
and
num
to
A
studied in the plan triel in In York of
for the to Loan 50 three-sonth payments under
Live revings plan in addition to extra bond subscriptions.
(d) DEFERRED PAYMENT FOR INSURANCE COMPANIES, ETC, We
approve e plan of deferred payment for insurance companies, savings
banks, pension funds, and similar institutions under which these
institutions may purchase bonds against deferred payment for EL
period of three months following the drive.
(e) INVESTMENT OF SAVINGS FUNDS BY COMMERCIAL BANKS.
We recommend that commercial banks be permitted to subscribe for any
of the long-term securities in the basket (except E bonds, and subject
to the usual limitations in respect to F & G) up to 10% of their savings
deposits or $500,000, whichever is less, but that in the definition of
savings deposits, time certificates of deposit of & type similar to
savings deposits be included. We believe the experiment in this direction
which was tried in the last loan was successful, but that the limit
should be raised to take care of medium size banks which are doing
a substantial savings business corresponding to the business of mutual
savings banks. In a number of States time certificates of deposit take
the place of savings pass books and the definition of savings deposits
needs to be modified to make this provision applicable to these States.
(f) WITHDRAWAL OF COMMERCIAL DEPOSITS TO PURCHASE GOVERNMENT
securities. The banks of the country generally have encouraged the
purchase of bonds by their customers through a withdrewal of deposits.
large number of the backs um MÃO a going canvres of their
- for U.S. M of roved to be 028 of the most
Regraded Unclassified
of leas. The instice and the results are not
- throughout the country and 20 believe that results can
through a further additional program on the part of the
Association. This Committee will undertake to follow up this
star end will see that the question is fully discussed at the meeting
of the Executive Council of the Association in Chicago in April. This
Council is the governing body of the Association between meetings of the
nanual convention. We recognize that in addition to this effort within
the banks that the primary source of new funds must be wage-earners in
sar industries who can probably be reached best by the payroll savings
mechanism described above.
(g) SIZE OF DRIVE. lie recommend a drive quota of $14 billion,
the same as in the 4th drive. As previously noted, certain types of buy-
ing will be reduced, such as that by insurance companies, savings banks
and wealthier individuals. To offset losses from this source it would
probably be desirable to include in this drive quota subscriptions received
from commercial banks for their savings departments. A more vigorous
carvass of corporations will also be necessary and increased sales effort
among workers receiving high wages. This will require an intensified
effort.
(h) ISSUE OF CERTIFICATES MAY 1. The Committee has carefully
considered the proposal to issue on May 1 an additional market issue of
2 billion dollars of 7/8% one year certificates. As many corporations
DUE purchase these certificates, tae funds available for the 5th War
wan curraign would be reduced. In Committee also believes that, unless
CRED belances of tie Transfy would is the judgest of the Secretary
Regraded Unclassified
195
- 5 -
ce the issuance of these certificates eligible for bank purchase
would be deferred until later in the year.
(1) REDEMPTION AND HOARDING. The Committee has considered the
desirability of lessening the redemption of savings bonds and the amount of
hoarding of currency and believes that advertising and other publicity should
be studied to counteract these tendencies. It recognizes, however, that the
subject is a delicate one and must be handled carefully.
(j) TREASURY BILLS. We believe the Treasury should continue to
issue 90-day bills rather than longer maturities. We approve the proposal
for & gradual increase in the amount of bills issued when and in the amount
required to enable the Reserve System to make available the increased bank
reserves probably required by the proposed financing program.
(k) POSTAL SAVINGS DEPOSITS. Except in New Jersey, the same
rate of interest has been paid on Postal Savings Deposits since the inaugura-
tion of the System. Consequently the rate is much too high in relation to
bank interest rates and the yield on government securities, and should be
lowered. The present increase of $200,000,000 B. month in Postal Savings
Deposits interferes with the War Loan Campaigns.
Regraded Unclassified
196
March 27, 1944.
My dear Admiral Halsey:
I have received your letter of March 18 with
its enclosures telling about the Ingenuity Contest
sponsored by the Red Cross Service Clubs among
servicemen in the South Pacific area. We shall be
very glad to discuss with Miss Colletta Ryan methods
of making use of the exhibit in War Bond sales.
Knowing what responsibilities you have on your
shoulders and the incessant demands on your time and
energy that must result, I appreciate more than I
can say your kindness in writing to me about this
project. We shall try to make It 80 useful that
your men who have participated in it will feel re-
warded when the word gets back to them.
We continue here at home to watch the achieve-
ments of the South Pacific Force with the most in-
tense interest and with the highest admiration for
the great qualities of leadership its Commander has
displayed and is displaying.
Sincerely,
#
(Signed) Henry Morgenthau, Jr.
Secretary of the Treasury.
Admiral William F. Halsey, U.S.N.,
Commander, South Pacific Force,
Fleet Post Office,
San Francisco, California.
Regraded Unclassified
197
March 24, 1944
My dear Admiral Halsey:
Do have not yet heard from Miss Colletta
Ryan, the Director of the American Red Cross
Service Clubs in the South Pacific Area; but
when we do, NO will ask her to lend us the
display. We have many uses for exhibits of
this sort in connection with War Bond drives,
and I am sure this one will be helpful.
Thank you for calling it to my attention.
Sincerely,
Admiral W. F. Halsey, Jr., U.S.N.
Commander, South Pacific Area
U.S. Pacific Fleet Headquarters
Fleet Post Office
San Prancisco, California
Plant
CC, to 17. Sed Danble
Regraded Unclassified
MATH PACTPE POBLE
13 March 1944.
Dear Mr. Secretary:
The enclosed copy of a. letter from the American Red
Cross Service Club, with accompanying photographs and de-
scriptions presents a remarkable exhibit which I have viewed
personally.
It occurred to me that it might be a very interesting
and appealing collection to display in conjunction with
the War Bond drives, and I have requested Miss Colletta
Ryan, the Director of the American Red Cross Service Clubs
in the South Pacific Area, who has returned to the mainland
for a speaking tour, to present to your department the avail-
ability of this exhibit.
Sincerely yours,
W. F. HALSEY.
The Secretary of the Treasury,
Washington, D. C.
Regraded Unclassified
+
AMERICAN RED CROSS
Service Club.
HOUREA.
February, 25, 1944.
W.F. Haleey Jr. U.S.N.
South Pacifie Area,
Destr Admiral Halsey,
with reference to the Ingenuity Contest sponsored by Lucy
Credit which you were kind enough to suggest sending to the United States
for Haplay, I enclose a sories of photographs and descriptions which would
is of interest to anyone desiring to show it.
All of the entries which were cade in spare the from naterials
at band were submitted by servicemen in the South Pacific Area. Done are
for sale but the contributors would be glad to have then shown in the States.
If this collection could be of any value in a ar Bond Drive,
the
contributors and we ourselves would be delighted to have it DO used,
help you could give us in furthering this would be imensely approciated
$
are all grateful for your interest.
Very sincerely yours,
(Isobel Loo)
Assistant Club Director.
Regraded Unclassified
TREASURY DEPARTMENT
200
INTER OFFICE COMMUNICATION
DATENarch 27, 1944
Morgenthau
FROM
The Business Situation,
Week ending March 25, 1944.
Summary
production: The FRB adjusted index of industrial
nction for February rose to 243 from 242 in the previous
The slight rise WAS entirely due to seasonal adjustment
LE the unadjusted index of production showed no change
the previous 2 months. Despite the slight gain in
Delivery, the adjusted index for the month was 4 points
the wr-time beak reached last October and November.
Factory employment showed & further decline of
NO in February, reducing the total number of factory
to less than 13.6 millions as compared with 14 m11-
it the war-time penk last November. The reduction W86
in met to production cutbacks, and in part to the
chortage, which 1s becoming a more serious factor
injustry.
Stock trading on the New York Exchange declined
in volime last week, while the Dow-Jones price average of
stocks at the close on Saturday was about 1 percent
Wer then a week earlier. Railroad stocks continued to
Apply comevhat greater strength than industrial or
tility stocks.
prices: While considerable strength was evident in
Ivin end cotton futures markets, spot commodity prices
irregularly loot week. The BLS index of 28 basic
production, which has shown D. gradual rise since last
242, declined all'htly. In the week ended March 18
IS -ll-commodity index rose 0.2 percent, but at 103.6
1s only 0.6 percent above that of a year ago.
destings: Farmers' nienting intentions indicate
0503 acresse this year, almost 1: percent larger
of last year. Most of the expansion in noresse
tobacco, and certain vegetables, with
(noreases in screent. Perr of 10bor
sent situation appear to be having
1=
Regraded Unclassified
201
Insustrial production standy
misserous cross currents due to shifts in wer
accreate industrial output in recent months has
stondy, with the FRB unadjusted index of production
showing no change from the level of the two previ-
months. Since a slight decline in industrial output 16
in February, the FRB adjusted index of industrial
milletion for the month advanced elightly to 243 from 242
:- January. The index, however, was still 4 points below the
wantine benk of 247 attained in October and November of last
Steel output rose in February, but nonferrous metal
showed little change as curtailment of aluminum
dut at VI'S offset by increases in other metals. Production
1° fuels rose slightly, with production of soft coal and
oil maintaining high levels, while anthracite coal
de jumped sharply in reflection of the 7-day work week in
affect during the month. Activity in the transportation
end machinery industries, which are heavily engaged
vir work, decreased very slightly in February.
Nondurable goods production, after allowance for seasonal
05028, showed an insignificant increase last month. Cotton
and rayon deliveries increased very slightly while
mtent of manufactured food products declined less than
rensonally, despite a noticeable drop in hog slaughtering
exceptionally high levels attained in January. Chemical
outout declined as explosives and small arms ammunition
excuption showed further curtailment.
Factory employment lower
Last month's steady industrial output was achieved in
58 Shoe of an estimated decline of 83,000, or 0.6 percent, in
"No number of factory workers employed. From the war-time peak
er hearly 14 millions last November, factory employment has
z) redual reduction to less than 13.6 millions in February.
The Invest decline during the month occurred in the transportation
And ment roun, principally engaged in turning out aircraft, which
-19E, and other vor material. The mannower shortage,
incoming more serious, has apparently been B contributing
in the employment decline, but production cutbacks were
for reduction in employment in the chemical,
some industries. The largest increase occurred excended
missumication
industry, equipment. in reflection of
reduction
of
Regraded Unclassified
mjr injustry livitime end
1.50 mills utilities late risort faclines to
Severer, the overwhelming propertion of the
for been due to a 5ª. percent 1290 in
1A construction activity.
DIS basic commodity index slightly lower
shot commodity prices moved irregularly last week and
the 310 index of 28 basic commodities declined slightly. (See
1.) Noticeable declines in hog and steer prices more
this offset continued small advances in cotton and rosin
nicec.
In the week ended March 18 the BLS all-commodity index
nivenced 0.2 percent, due largely to higher prices for grains,
Ilvestook, and cotton. The index, however, has moved within a
yer norrov range during the past year, and at 103.6 percent of
the 192% overage 1s only 0.6 percent higher than the corres-
noncing week of last year. It is 38.1 percent above the pre-
you level of August 1939.
Futures prices show strength
In contrast to the slight declines in spot commodity
incexes last week, the Dow-Jones futures index registered a
unticeable rise largely due to strength in grain and cotton
futures. An accentuation of the corn shortage, which has
resulted in e WFA set-aside order, together with an increase
in the Canadian export tax on oats, had & bullish effect on
rein futures, which are generally below ceiling levels.
(Since most spot grain prices are around ceiling levels, no
significant changes occurred in the spot markets.) The rise
12 cotton futures reflects in - heavy demands of the armed
forces and lend-lease for cotton textiles.
Both the Dow-Jones futures index and Moody's spot index
love shown D rising tendency since last November, although
- Luie been a considerable degree of variation in the
internatiste movements of the two indexes. (See Chart 2.)
yes wristion 16 due to differences in the items included
In two indexes, and their relative veights. HOE prices,
which have on important influence on Xoody's
not included in the Dov-Joane fature index.
Regraded Unclassified
-
=
writer,
ville
the
nime
have
VM
noticessly
of stock grices to nake further handway
poperently generated a more cautious attitude
of traders and investors, and on Friday stock
on the llew York Exchange dropped below the
UTION dare daily rate for the first time since March 9.
deference to Chart 3 will disclose that, despite the
im]=tively heavy volume of trading since the date mentioned,
only reilroad stocks as a group showed any net advance by
the end of last week.
Antlroad stock prices rise despite less favorable earnings
Following persistent gains in January and February,
willrond stock prices in the past 2 weeks have again displayed
beater strength than industrial or utility stocks. The rise
in reilrond security prices in recent months has occurred in
the face of a generally declining earnings trend, which has
been in evidence since last May. (See Chart 4.) Monthly net
operating income (earnings after taxes but before
frilen consistently below year-earlier levels since May 1943.
interest and other fixed charges) of Class I railroads has
Contrery to the customary trend, railroad earnings failed to
ul.or the usual seasonal expansion last fall and were actually
lower than in the spring. In addition to the adverse effect
of C. reduction in freight rates last May, railroad earnings
lave been out by increased operating costs, including a
retronctive wage increase, and the virtual exhaustion of
PRONTS profits tax credit carryovers.
Decuite the drop in the Intter half of 1943, railway 8
income for the year as B. whole was only per-
In the sharp contrast, railrond stock prices in 1943 As
1942 peak and stood 17 percent above the 1925-29 were
38 of in the 1925-29 period.
the relationship between reilroud earnings with
has diverged widely During the 122,
Lover than in 1938 consite
is
Regraded Unclassified
204
of product tixts and future receipts
unser. fligible pursianers of the set-
stocks, to be !ssignted by the THA, will
the alevators.
if 0020 forced the Corn Products Refining Company
to suspend operations at its large Kansas City
21.2 other plants of this company have only enough
on made to take them through the middle of this week,
a reported. Horeover, a survey of the Corn Industries
United Foundation revealed that the Keokuk, Iowa plant of
the Wyoinger Company had been closed all last week, Anheuser-
impoide St. Louis plant was operating on a reduced scale,
The several other plants faced & shutdown if corn supplies
tere not obtained within the next few weeks. These processors
- corn products needed for the production of critical war
wherials as well 8.6 for essential civilian uses.
While corn marketings increased somewhat during January
have February, in recent weeks they have been less than half
WE for e E.S. during the corresponding period of last year.
DE fundomental factor in the shortage of corn has been
Use preater profitability of feeding it to hogs than selling
it unier the existing price ceilings. A recent factor has
Teen unfavorable weather in the Corn Belt, closing country
rords and hindering farmers in marketing their corn.
H11k production shows normal seasonal increase
M11k production has shown about the usual seasonal
increase in the last few months, but continues slightly below
the levela of & year ago. Production in February was about
2 percent larger than that of last year, due entirely to the
estra day in the month, since on a daily basis it was slightly
1000 than in February 1943. (See Chart 6, upper section.)
of increase in dairy production subsidy payments, which should
min the March milk-feed ratio to one of the best for the
in recent years, and widespread rains aiding the
of spring pastures, should help stimulate ailk
::00 this month.
reduction, while Increasing remecoally, LAB
substantielly below the Service of - THIS NO. the
evicence. LOVETED, that the limitation investuted on
of Male and ETMIL, -
de payment to offent upe
4 jestaction. to
Regraded Unclassified
Government line not been purchasing butter during
several months, but has been meeting its requirements
from the large stocks accumulated last year. While Government
will be resumed starting April 1, manufacturers will
required to set aside only 10 percent of their output as
with the 30 percent required last April. Despite the
112 é requirements of the armed forces and lend-lease, stocks
of latter on March 1 were almost 9 times as large as & year
. 0, with over two-thirds owned by the WFA. (See Chart 6,
lover dection.)
Crop acreage near record levels
1th farmers pushing production close to the limit of
their resources, total acreage of crops is likely to be almost
ercent greater than was grown last year and but slightly
kelow the record crop acreage of 1932, according to the
Projective plantings report released by the Department of
Amiculture last week. Practically all the increases in
over last year will be for grains, tobacco, and
certain vegetables. (See Table I, column 1.) The wheat
Appen's will show the largest gain, consisting of about a 25 per-
cent increase in winter wheat and nearly a 15 percent increase
in curing wheat. A noticeable expansion in the acreage of oats
In indicated. The prospective acreage to be planted in tobacco
P. sharp increase over that of last year while, on the
20 cie of incomplete reports, the acreage of truck crops harvested
for the fresh market may show an increase of almost one fifth.
On the other hand, substantial decreases in the acreage
of important war crops are indicated. The prospective flaxseed
ceren e shows the largest decrease, over 31 percent, but
tecreases of from 7 to 10 percent are noted for peenuts, dry
penns, dry peas and potatoes.
A marked divergence between the 1944 goals set for various
and the prospective acreage of these crops 16 apparent.
for whent, corn, rice and tobacco does the prospective
pporoximate that of the 1944 goals. (See Table I,
While the acrenge to be planted in onts 18
Unity larger than the 1944 goal calls for, the
creage of meny important crops falls considerably beete
the pals. The prospective acreege of sugar
and below the 2944 goal.
of forders to fullow note closely the 19th
their 15 " Eur
of Labor and to the food
Is
Regraded Unclassified
DE - date dependence upon labor
their families can provide. Moreover, the
payort indicates that the individual former intends
every effort to secure an adequate supply of grain
ivestock. Other factors affecting the crops planted
(1) formers' plans seem to have been influenced more
by prices and profits during the past year, and
(-) unfovorable experiences in some parts of the country with
IN cross last year have made farmers reluctant to try the
cross again this year.
Rains improve crop outlook
Henvy precipitation during the past two months has
coved the crop outlook, as all the principal agricultural
are now supplied with ample, or more than ample, moisture
for resent needs. The moisture situation has completely
reversed itself, for drought conditions in the fall and early
vister lind caused considerable apprehension with regard to
the Milter wheat crop. Spring planting, however, is now being
in the southern and central portions of the country
27 mins which are keeping fields too wet for operations.
Truck crops in the South have been making good progress,
recent roins have greatly helped the Florida citrus fruit
roves. In California, however, rather serious losses have
eveloped in navel oranges because of decay and water rot,
coording to the Weather Bureau. While early fruit trees in
:- southern helf of the country are abnormally advanced, the
Bureau reports no frost damage from the recent cold
RATE except in portions of the southern Plains, particularly
:- northern Oklahoma.
Department store sales rise
Stimulated by Easter buying, department store sales in
17 sercent above the corresponding week in 1943. (See Chart 7.)
tient: ended March 18 rose to a new high for the year,
since Enster this year falls on April 9 as compared with
oil 15 last year, it has been estimated that earlier 4 Easter
alone should cause March 1944 sales to rise percent will
l'aroh 1943. It now seeme likely that this figure
is e-tix the buying of Jevelry, fure, at other items rebject to
last In week 12 March undoubtedly will be swelled by
eddition to favorable seasonal influences,
? expline taxes effective 41012 1.
Regraded Unclassified
MOVEMENT OF BASIC COMMODITY PRICES
1943
1944
AUGUST 1939.100
210
#10
9 Uncontrolled Commodities
200
100
190
190
28 Commodities
ISO
160
170
170
19 Controlled Commodities
160
160
DEC.
FEB
APR
JUNE
AUG.
OCT
DEC.
FEB
APR.
JUNE
1942
1943
1944
PERCENTAGE CHANGE DEC. 6. 1942 TO MAR.17, AND MAR.24, 1944
PERCENT
19 Controlled
9 Uncontrolled
Bariey 75.3%
Commodities
Commodities
+70
Ream ....N
y
i
I
+60
Care seen
se
50
207
- andrew
+ 40
Hope
Lard 28.8%
NO
Shellec 12.3%
+30
Leed 111%
Segar 6.9%
Cottonseed 0116.3%
Collee more
20
Print Clam49%
+20
r$more 1148
Burlep 26%
Wool Tops 19%
Zine 3%
Butter ⑉
0% Change
+ 10
Hides, Silt,
Tin, Rubber,
Coffee, Copper,
St. Seraa, dom,
St. Scrap,exp.
0
Cocoa -.0%
Tellew -4.1%
-
10
Mer.17,
Mor.24.
Dec 6,
Net it,
Mar.24,
1944
1944
1941
1944
1944
Regraded Unclassified
COMMODITY PRICE INDEXES IN U.S.
1943
1944
I
one
AUG
SEPT
OCT
NOV
DEC
JAN
FEB
MAR
APR
PERCENT
(Dae doment
Daily
IDO
99
---
98
=
07
218
Commodity Futures
96
and
(Dow-Jones)
1924-26-100
95
ent
04
249
95
HM
92
⑉
Moody's Index
in U.S.
91
-
December 31, 1931-100
90
ESP
89
134
88
-
-
87
86
-
65
-
IS
14
.
,
4
-
20
4
II
e
as
=
9
16
23
30
6
13
20
27
4
-
16
as
I
e
22
29
5
12
IS
26
4
"
18
25
-
.
15
22
as
JULY
AUG
SEPT.
OCT.
NOV.
DEC.
JAN.
FEB.
MAR.
APR.
-
1943
1944
P-MAIL
Regraded Unclassified
you
203
STOCK PRICES, DOW-JONES AVERAGES
Daily
1944
DEC
JAN
FEB
MAR
APR
MAY
ARE
14
I
9
#
D
30
6
13
to
ET
5
12
IS
26
2
9
16
23
30
,
1
24
29
4
#
-
=
DOLLARS
DOLLARS
155
155
30 Industrial Stocks
150
150
145
145
140
140
135
135
130
130
125
125
120
120
40
40
per
38
38
20 Railroads
36
36
34
34
32
32
30
30
24
24
15 Utilities
22
22
20
20
18
SHARES
Milliams
Volume of Trading
2
Regraded Unclassified
RAILROAD EARNINGS
Net Roilway Operating Income* Closs I Railroods
DOLLARS
*
DOLLARS
-
Millions
180
180
1942
160
160
140
140
1943
120
120
100
100
1944
80
80
40
60
40
40
1935-39 Average
20
20
0
0
Jan
Feb
Mar
Apr.
Moy
June
July
Aug.
Sept.
Oct.
Nov.
Dec
"Earnings after taxes, but before interest and other fixed charges.
their
The - - . - Treasury
# Hound -
C-483-4
Regraded Unclassified
RAILROAD EARNINGS AND STOCK PRICES
1925-29-100
950
31
32
33
34
'35
'36
'37
'38
'39
'40
'41
'42
43
44
PERCENT
HERIBHT
120
20
100
100
*
Net Railway Operating Income
(Class / Railroads)
80
=
60
-
40
40
Latest Figures
March 25 1944
20
ED
Railroad Stock Prices
(Dow - Jones Average)
o
0
1930
M
32
'33
'34
'35
'36
'37
'38
'39
'40
'41
'42
'43
'44
Court
# Earnings after taxes, but before interest and other fixed charges.
- - - Sever - the Insury
P-253
- - - - -
211
Regraded Unclassified
be C. -
MILK PRODUCTION AND BUTTER STOCKS
212
POUNDS
POUNDS
Billions
Total Form Milk Production
12
12
1942
II
11
10
10
1941
9
9
1944
1943
8
8
7
7
JAN
FEB.
MAR.
APR.
MAY
JUNE
JULY
AUG.
SEPT.
OCT.
NOV.
DEC.
POUNDS
POUNDS
Millions
Millions
Creamery Butter
Cold Storage Holdings
200
200
1943
1941
150
150
1944
1942
100
100
50
0
- 5 9d 18 -
Regraded Unclassified
Table I
213
untive plantings for 1944 compared with plantings
in 1943 and goals for 1944
Indicated
1944 acreage
1944 goal
Indicated
as percent of
as percent
1944 acreage
of 1943
as percent of
1943
1944 goal
12/20 srops:
Great
121.5
121.6
99.9
30Pm
102.5
103.2
99.3
WAVE
107.7
92.3
116.7
Spley
87.0
100.2
86.8
011 words:
-, beins for beans 1/
102.6
126.2
81.3
Produce
90.4
118.4
76.4
68.8
93.3
73.8
We etable crops:
Patations
92.7
102.6
90.4
suit ototoes
100.4
117.6
85.4
Ser:
92.5
111.5
82.9
1802
92.7
107.6
86.1
Toeta
99.4
153.6
64.7
117.4
120.1
97.7
=
Agriculture.
Regraded Unclassified
for 7
214
DEPARTMENT STORE SALES
1935-39 . 100. Unadjusted
PERCENT
PERCENT
300
300
Weekly
280
280
260
260
240
240
220
220
200
200
180
180
160
160
1944
1943
140
140
120
120
1942
100
100
80
NC
60
=
MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEG
Regraded Unclassified
TREASURY DEPARTMENT
INTER IFFICE COMMUNICATION
Secretary Morgenthau
is. White
act: Effect on China's economy of U. S. Army expenditures.
1.
On March 11 cable was sent to Adler instructing him to
send immediately his evaluation of the economic situation
in China, with particular reference to the effects of
our present and projected military activities. He was
asked to comment especially on the relative importance
of our military expenditures in bringing about the rapid
rise in prices a.B compared with the other causes of
inflation and the imminence of an economic collanse,
On March 25 a cable was received from Adler dated
March 23, copy of which is attached hereto, replying
to our cable. In general Adler takes the position that
the economic situation in China 18 very serious. In
1043 prices trebled, while in 1944 prices are rising
even more rapidly. Production 16 declining and the
Chungking Government continues to finance its expendi-
tures largely by the use of the printing press. Adler
points out that the basic causes of China's economic
difficulties are the growing disintegration of the
military and political power of the Central Government,
the isolation of China from the outside world and the
failure of the Government to make necessary internal
reforms.
With regard to the effect of the contemplated U. S.
Army program, he concludes that while the Chinese strain
economy might be able to stand this extra it 16 --
highly questionable whether we should incur the has risk
"nd he emphasizes the "might" -- he feels that
over-riding strategic reasons for doing 80. recom-
of imposing this strain on her unless the Army He
sends construction projects after June,
strongly that the Army should not make plans 1944
would entail the erenditures which At are
for the all for of this year. months,
Regraded Unclassified
216
- 2 -
very coused by factors other than the United
- Army military program, and that these would
chase to grow even if our military program was
ly curtailed. The decision, however, to carry
me our contemplated military program at this stage
of economic deterioration will gravely accentuate
economic difficulties and the Army, by insist-
10g on continuing without reduction its contemplated
program 16, of course, assuming a grave responsibility
witch can be justified only by important military
considerations.
Regraded Unclassified
216-A
SJR - 122
Ohdngking via N.R.
This telegram must be
peraphrased before being
Dated March 23, 1944
communicated to anyone
other than a Governmental
Rec'd 3:40 p.m.
agency. (scoo)
Secretary of State,
Washington.
DEPARTMENT OF STATE
2
517, March 23, 1 p.m. (SECTION ONE)
AND RECORDS
TO SECRETARY OF TREASURY FROM ADLER
One. Fully agree with the conclusions of Ambassa-
dor's cable of March 8. Re your 331, March 11. (All
sums in CN dollars unles otherwise specified.
Two, Over all picture, Economic situation in
China while extremely unstable will not come apart
from undue strain from expension of American military
operations, collapse for gome time as long as harvests
continue satisfactory. Growing disintegration of
military and political power of Central Government,
weakening of its war effort such 88 it is and of its
military potential, and spread of malpractices In-
evitable unless and until (A) China's isolation is
broken (B) internal reforms take place - A remote
imtingency.
Three. Last years permit that
1342
that
Regraded Unclassified
216-B
-2- #517, March 23, 1 p.m. (SECTION ONE) from Chungking
via N.R.
1942 though there were again acute localized famines;
it is too early as yet to predict 1944 crops. Decline
in industrial production can be expected to continue.
Prices in 1943 more than trebled and note issue more
than doubled, 1.e. rate of increase in both was only
slightly greater than in 1942. (Published and official
price data are becoming increasingly unreliable. Since
beginning of year, however, there has been a spectacu-
larly sharp rise in prices. Preliminary estimated
increase in average of retail prices in leading cities
(February level 300 times 1937) 1s about thirty percent
for first two months of year. Increase in Chungking
retail index for same period only 12 percent but this
obviously incorrect as even official opinion estimates
it at nearer sixty percent. In Kweilin same index shows
rise of over forty percent while buck's wholesale and
cost of living indices for Chengtu show increases of
65 percent. Causes of this sharp spurt partly seasonal
portly impact of United States expenditures (as in
Changts, CF. by 292, February 29). in reasing specula-
tim in communities wide fluctuations in price of gold
el bird States currency NEW of currulative loog
- PART
Regraded Unclassified
218-C
-3- #517, March 23, 1 p.m. (SECTION ONE) from Chungking
via N.R.
run fact or of expanding note issue. Unfortunately
recent marked upward trend in prices still being main-
tained, seasonal pre-harvest factor likely to continue
and United States expenditures to increase for some months.
Four. Budgetary situation. 1943 expenditures were
about 48 billion and revenues under 20 billion (pre-
liminary). It should be noted that for first time
expansion of note issue of over 40 billion was sub-
stantially higher than official deficit of 30 billion
due to direct United States Army expenditures of over
two billion, probable existence of concealed deficits
and fact that Government banks used newly issued notes
to make loans for Government approved projects. This
year estimated expenditures are 80 billion and revenues
35 to 40 billion but actual expenditures will probably
be nearer 100 billion and actual revenues nearer 25
billion. Thus apart from concealed deficite and
Government bank loane note issue will double 1.e.
increase by 75 billion in 1944. Given game rate of
increase 08 last year it will expend by nearly 90
billion. Above retimated do not (repert noz) allow
for heavy contemplated INFORM 15 rependitares 11 et
for United States APRT suring 1044.
VATIO
Regraded Unclassified
216-D
-134
Chungling
111 trigram must be
nrophrased before being
Dated Herch 23, 1944
communicated to anyone
other than a Government
Rec'd 4:00 p.m.
agency. (SCOO)
Secretary of State,
DEPARTMENT
STATE
ashington.
COMMUNICATIONS 1341
517, March 23, 1 p.m. (SECTION TWO) RECORDS
Impact of United States Army expenditures.
OnE. Up to End of 1943 United States Army had
spent directly under two and one-fourth billion, while
according to Kung's message to YFC of January 24 Chinese
Government had spent five and three-fourths billion in
connection with our Army operations. Since then Army
has spent directly one half a billion yuans, Ministry
of Finance has advanced one billion a month for direct
Expenditures in February and March. In addition |'inistry
has spent one point four billion in January and February
for Chengtu projects, an unspecified but much smaller
amount for construction and maintenance Elsewhere and
for living costs of American Army in China, and has
allotted one point SEVEN billion for construction projects
in arch. All In all - right billion were agent by
for United States M in 1943 end another six billion
m Mr
Regraded Unclassified
216-E
1025, Earch 23, 1 p.m., (SECTION T.10) from Changhing.
2vo. hile these expenditures undoubtedly con-
tributed to aggravating inovation, Especially in areas
in which they were concentrated (Kunming, Kweilin and
Chengtu), they did not constitute an intolerable burden
on Chinese Economy, as is borne out by fact that 1943
rate of increase in prices and like issue was not per-
ceptibly greater than in 1942. Total Expenditures by
and for United States Army in 1943 constituted 20% of
Expansion of note issue and lESS than one-fourth of
budgetary deficit. In Yunnan United States Army direct
Expenditures totaled one point four billion in 1943 and
three-fourths billion for January February 1944, and in
Kwangsi one billion and under one hundred, million for
same perlods. /hile no breakdown of Central Government
Expenditures in these areas is available, presumably a
substantial portion of its disbursements of three billion
in 1943 and three-fourths billion in January February
1944 in Yunnan and of one point one billion and three
hundred million in Kwangsi for same periods was incurred
in connection with United States Army operations.
Three. The immediate impact of these itures
in these areas was to push up prices, to intensify
socculation and hearding in antitipation of further
United States Army and thus approvate
print
Regraded Unclassified
216-F
-5- 517, March 23, 1 p.m., (SECTION TWO) from Chunghing
rice situation still further (this process inevitable
1: absence of Effective government Economic and political
controls Given which problem would have been much more
tractable), to create acute shortages of (*) maintenance
of EVEN a few thousand American troops also taxes food
supply in areas where they are located owing to huge
discrepancy between war and normal Chinese living stand-
ards, Rate at which this impact is transmitted to other
cities and country as a whole is slow in China its
Economy is so loosely integrated. Data on differential
impact of Army expenditures and speed of its transmission
inconclusive. Farmers Bank retail index reveals in-
creases in Kweilin and Kunming of three and one-half
and over three times in 1943 as compared with somewhat
under three times in Chungking and Chengtu, cities where
United States Army expenditures were small in 1943; but
too much weight cannot bE attached to this index.
Thurbucks Changtu cost of living index just about
quadrupled in 1943, while 1944 rate of increase in
hengtu prices under impact of heavy Army expenditures
THE beginning of year is only slightly greater than
Hungking. EVEN Is cast of Dunsing where prices
TMC highest in China is tool the 1and na far beet: M
Pour. It
Regraded Unclassified
216- G
-4- 7517, March 23, 1 p.m., (SECTION TWO) from Chungking
Four, It is important to bear this qualification
in nind in view of noticeable tendency increasingly
prevalent in Chinese Government circles to lay responsi-
bility for inflation on our Army Expenditures in order
to: (a) strengthen their bargaining position with respect
to current financial negotiations (b) put themselves
in a better position should they make another request
for a loan, (c) find a convenient alib1 for a situation
which they have been very far from handling as WEll as
they could (d) make us morolly responsible for Extricating
them from the collapse if and when it comes,
GAUSS
EDA
(*) Apparent omission.
Regraded Unclassified
216-H
FMH-3
Chungking via N.R.
This telegram must bE
paraphrased before being
Dated March 23, 1944
communicated to anyone
other than a Government
REC'd
agency. (SCOO)
DEPARTMENT OF STATE
DIVISION OF
MAR 25 1944
Secretary of State,
Washington.
COMMUNICATIONS
AND RECORDS
517, March 23, 1 p.m. (SECTION THREE)
One. But (repeat but) scale of Expenditures for
US Army now contemplated far greater than in WEST and
will moreover bE suparimposed on a more advanced
stage of inflation. Projected Expenditures for April
June 1944 are twelve billion not allowing for increase
in prices in interim and are much more likely to
EXCEED fifteen billion. Even with active sale of
gold and US currency, by far largest part of these
Expenditures will have to bE met by Expanding note
issue. Given continuance of present Chinese attitude
towards sale of gold and US currency, with the
implementation of US Army plans there will bE an
increase in note issue of Eleven billion & month for
next three months (six billion for the "normal"
increase and five billion for our army). while Chings
Economy may (repeat may) be able to stand chis EXT78
strain it is highly questionable abitier or should Insur
the risk
Regraded Unclassified
216-I
-1- #517, March 23, 1. Pello (SECTION TRREL) Inc
Chungking via 1.1.
the risk of imposing it on her, unless army tax
overriding strategic reasons for doing 50. Subject
to this suggest figure it is desirable not to EXCEED
is three billion per month for next three months.
Two. Certainly Army should not make plans for
further construction projects Entailing such heavy
Expenditures after June. I understand its present
plans call for a tapering down of expenditures after
June; it is to bE hoped these plans will not bE
revised, as otherwise note issue fight increase by
anywhere between 120 to 150 billion in 1944.
Three. Note that:
(a) Chinese Government has avoided and will
probably continue to avoid suggesting limits to Army
expenditures in China for reasons of diplomatic
prestige, in spite of fact that it has been asked
to do so.
(b) Army 1s olready experiencing difficulties
letting contracts and spending monty at speed It
THE and which 10 necessary for completion of 198
of schedult, preticularly is Chrages. and
repositures in short run, projects
5075 IN they to complete.
19. I i 2
Regraded Unclassified
216-J J
-3- #517, March 22, 1 Date (SECTION THREE) from
Chungking via N.R.
possible only to recomend palliative messures as
follows:
(s) Aggressive sale of gold and US currency to
mitigate to some extent however slight inflationary
effects of Army expenditures. Unfortunately in spite
of his recent request for US ten million of gold and
US twenty million of US currency Kung is at present
apathetic to such sale (with continuance of his
present attitude it is impossible to clarify request
in your 314 of March 8) I suggest your considering
personally recommending to him more active sale of
gold and possibly US currency.
(b) Shipment by air from India of token amounts
of commercial goods to China.
(c) Improvement in US Army's methods of contracting
and purchasing. There is sufficient EVIDENCE that con-
tracting and purchasing is often lEft to inexperienced
younger officers who SEEM to pay little attention
fither to cost or to normal Chinese commercial practice,
- which mkra them rasy victims of unscrupulous businessmen.
into both increases burden on US texpayers and adds
Inflation in China. Civilians MM carry little
Lent with amy and pointing out to USE that they
out employ experienced is contracting
In Intertor
Regraded Unclassified
216-K
-4- #517, March 23, 1 p.m. (SECTION THREE) from
Chungking via N.R.
in interior China and reliable Chinese has had little
Effect.
Five. Letter by pouch month ago contains further
information on Army Expenditures and possible sale of
gold and US currency.
(END OF MESSAGE)
GAUSS
WFS
Regraded Unclassified
216-L
MUSEUM 3818,
77. GREAT RUSSELL STREET,
W.C.1.
PERSONAL
27th March, 1944.
Miss Henrietta Klotz,
Private Secretary to Mr. Secretary Morgenthau,
Treasury,
WASHINGTON, D.C.
MA
My dear Henrietta,
I attach another letter for the
Secretary, and shall be most grateful if
you will pass it on to him.
With kindest regards to you and
yours, I am
Yours very Chaigmany sincerely,
Enclosure.
Regraded Unclassified
216- M
MUSEUM -
77. GREAT RUSSELL STREET.
W.C.1.
PERSONAL
27th March, 1944.
Hon. Henry Morgenthau,
Treasury,
WASHINGTON, D.C.
Dear Mr. Secretary,
Since my letter of March 10th, some rather disturbing rumours have
come to my notice, about which I feel I ought to inform you. While the mat-
ter may not as yet be one of practical politics, yet it does seem to me to
call for careful watching, if only because it seems so very plausible. We
hear that Lord Moyne has been asked to try and induce the Arabs to agree to
a Jewish immigration of something like 25,000 a year for the next ten years.
This would obviate the need for any change in the White Paper (which express-
ly provides that immigration can proceed after March 1944 if the Arabs agree).
It would also take some of the sting out of the situation, and might salve a
good many non-Jewish consciences, - and even some Jewish ones, 0.6. Proskauer
and Lessing Rosenwald. It would not alter the political situation, since
after the ten years, the relative proportions of the populations would remain
unchanged - 25,000 a year being just about enough to balance the Arab natural
increase. We would, therefore, at the end of the ten years, still find our-
selves in a one-third minority; but by then it would be very much more dif-
fioult to reopen the struggle for our rights.
I do not for a moment believe that this proposal emanates from the
War Cabinet, or that it has the approval of the P.M. But it my well have
appealed to people in Cairo and Jerusalem, and may certainly make things more
complicated and difficult for us.
There is another consideration: our enemies know very well that
pressure from Poland and Central Europe may decrease after this war, because
Hitler has killed off & good part of the Jewish populations. (Though there
will still be Jews in Hungary, Roumania, and other places, and may also be
some emigration from South America and the States.X) Therefore, 25,000 or
so a year taken out from the remnant will not look such a negligible figure.
Of course, nobody mentions it now, because it would look ungracious to try
and make political capital out of the unspeakable disaster which has befal-
len the Jews. But after the war, when the facts become known and speak for
themselves, the conclusion will be inscapable.
I Since writing these lines, the posi-
tion in Hungary and Roumania has radi-
/Flease
cally changed.
Regraded Unclassified
Please understand that the above is pure conjecture. But the more
one thinks about it, the more one is driven to the conclusion that it is 8,
piece of low ounning which may serve to embarrass us very considerable.
Incidentally, all this goes to show how dangerous it is to post-
pone decisions on important matters until after the war. I feel certain that
when the war is over, the world will be tired out, and there will be 80 many
other problems having priority over ours that I dread to think of the place
we shall occupy in the queue. I therefore believe that decisions have to
be taken now; they need not necessarily be announced, but they have to be
taken. The conduct of affairs in Palestine now should be modified with an
eye on the long-term policy to be produced after the war. Otherwise, all
the hostile forces in Cairo, in Jerusalem, and here, will go on sapping and
mining, and may eventually force the hands of the leaders on the upper level.
We are trying to imprese this point of view on the people here. We have
seen from the practice of the last twenty-five years how, in spite of a
friendly attitude on the part of the Government at home, the local adminis-
tration has succeeded in thwarting our efforts at every turn: untold energy
has had to be expended to counteract all the chicanery to which we have been
subjected. It is a commonplace now that, if the Mandate had been carried
out in the spirit and in the letter, and not subjected to misinterpretation
all these years, we would by now have been a ajority in Palestine, and been
spared many of our troubles. But progress has been retarded through the
grudging attitude of the administration, which has consistently interpreted
the Mandate against us, and not for W. I dread & repetition of the 1130
story now. No my have the support of Mr. Churchill and k. Roosevelt, but
they are both very busy, deoply pre-occupied with great affairs, and with
little thought or time to give to & problem like ours. Thus the opportuni
ty is created for all our apponents to to their meet la devising ashemes
which 179 likely to projudice the situation in Palastine.
Generally, is surveying administrative practice to Palastics is
the last fee years, - is fired is the conclusion that there 30 # law
for the Araba and studer for the im. hr
(a) the as and is Ma(M with area, - is maily transfill
before . tribani, MI prix all with 4. Im agrived
If s mall flas. . in, sinilarly - - - ump active of
Regraded Unclassified
216-N
CONTINUATION SHEET No 2
If ten years true a allitary sourt - and a great deal is mdo of it in
the international press.
(b)
The Government always says its min object is to maintain
the status quo, so as not to disturb the peace or interfere with the
war effort. To would gladly accept this point of view, if we did not
500 every claim of the Arabe encouraged both by British and Americans
in Cairo and Jerusalem. In fact, Buri Pasha, who is at present play-
ing a leading part in the preliminaries to the so-called (andvery
problematic) Arab Federation, when asked whether his activities were
known to his British friends, replied that he would never have thought
of taking any such steps without informing the British Government.
No doubt some of Mr. Eden's statements, vague as they are, my have
encouraged the Araba to take these steps in the direction of an Arab
Federation. Not that we have any quarrel with these activities of the
Arabs: it is their business, and they are perfectly entitled to do as
they please. But if direct encouragement is given by the British,
this is clearly in contradiction to the maintenance of the status quo.
(o) Legislation is now being enacted in Palestine imposing heav-
ier direct taxation. Now of the total income tax paid in Palestine,
72% is paid by the Jews (who constitute one-third of the population),
18% by the Arabs (two-thirds of the population), and 10% by a very
few British officials, foreign companies, etc. It is clearly ridiou-
lous and unfair, and means that in effect the Jews are paying for the
Arabs. The Government knows this, but does not mean to disturb the
Arabs. There are substantial Arab towns which have as yet paid no-
thing, or almost nothing, in income tax.
(d)
The Ministry of Information is sending to America speakers
- like Freya Stark - who are definitely anti-Zionist.
We have no redress against all these things. I hear that
Mr. Stattinius, who is coming over here shortly, has instructions to
get into touch with us, and ascertain our views. is already non-
tioned, the President has made & very important and useful statement,
which has given us all great encouragement. But I ... that Mr. Stet-
tinius is to be accompanied by Mr. Wallace Murray - a definite and
overt opponent of curs. Probably the same applies to the other two
people who are coming with thes. So whatever good the people oz the
upper levels may try to do for as will certainly be destroyed by these
If the lower levels of the administration. I feel that - are threst-
not with very (769) dangers.
2 thought I ngth to let you - all this, thingh I is at
- whether there 18 enything that - be does to change meters. 4.
- to be beart W - part may - - attacking as fee,
is fasti
and sanglash
Regraded Unclassified
77. GREAT RUSSELL STREET,
W.C.1.
27th March, 1944.
Bryir T. Weisgal. Esq.,
344 Madison Avenue,
YORK, N.Y.
Her
dear Meyer,
I have been writing to you from time to time, and no doubt Goldmann
will have given you a full report, so that it is not necessary for me to send
X anything in the way of a comprehensive statement. There are, however, one
two points about which I would like you to know.
be helpful. 1) I still do not understand why we rushed the whole adventure of the
The President's statement has made matters a little easier, and will
Resolution without making very sure of the attitude of the Government. Felix P.
should have seen Stimson and made sure what the view of the War Department would
be. Nowever, I don't want to indulge in ex-post-facto criticism, particularly
as the damage is perhaps less than we feared it might be.
of 2) practical politics, yet requires watching, because it soons 80 plausible. I
I have heard lately of a proposal which, though it may not be a matter
understand that Lord Moyne has been asked to try and induos the Araba to agree
to a Jewish immigration of something like 25,000 a year for the next ten years.
This would obviate the need for any change in the White Paper (where express
provision is made for immigration to continue after March 1944, if the Arabs
sonsent). It would also take some of the sting out of the situation, and might
salve a good many non-Jewish consciences - as well as some Jowish ones, 0.8.
Preskauer's and Lessing Rosenwalds. It would not alter the political situation
since after the ten years, the relative proportions of the populations would
remain unchanged - 25,000 a year being just about enough to balance the Arab
natural increase. We would, therefore, at the end of the ten years, still
find ourselves in a one-third minority; but by then it would be very much more
difficult to re-open the struggle for our rights.
I do not for a moment believe that this proposal emanates from the
Mar Cabinet, or that it has the approval of the P.M. But it my well have ap-
pouled to people in Cairo and Jerusalem, and may certainly mke things more com-
plicated and difficult for us.
There is another consideration: our enemica know very well that pres-
R. from Poland and Central Europe my decrease after this war, because Hitler
has billed off & good part of the Jowish populations. (Though there will still
be James is Supery, Roumania: and other places, and my also be some emigration from
IL flace dirtation wis, the position
to leary and Transit LAD redically
from South America and the States). Therefore, 25,000 a year taken out
from the remnant will not look such a negligible figure. Of course, nobody
mentions it now, because it would look ungracious to try and male political
capital out of the unspeakable disaster which has befallen the Jews. But
after the war, the facts will become known and speak for themselves, and the
conclusion will be incsompable.
Please understand that the above is pure conjecture. But the more
one thinks about it, and more one is driven to the conclusion that it 1a a
piece of low ounning, which may serve to embarrass us very considerably. I
was anxious to let you have word of it, and Am also writing to Mr. Morgenthau
on the same subject. I would urge you to try and 500 him.
Incidentally, all this goes to show how dangerous it is to postpons
decisions on important matters until after the war. I feel certain that when
the war is over, the world will be tired out, and there will be 60 many other
problems having priority over ours that I dread to think of the place we shall
occupy in the queue. I therefore believe that decisions have to be taken now;
they need not necessarily be announced, but they have to be taken. The son-
duot of affairs in Palestine now should be modified with an eye on the long-
term policy to be produced after the war. Otherwise, all the hostile forces
in Cairo, in Jerusalem, and here will go on sapping and mining, and may even-
tually force the hands of the leaders on the upper level. We are trying to
impress this point of view on the people here. Tie have seen from the prac-
tice of the last twenty-five years how, in spite of a friendly attitude on the
part of the Government at home, the local administration has succesded in
thwarting our efforts at every turn: untold energy has had to be expended
to counteract all the chicanery to which we have been subjected. It is &
commonplace now that, if the Mandate had been carried out in the spirit and
in the letter, and not subjected to misinterpretation all these years, we
would by now have been a majority in Palestine and been spared many of our
troubles. But progress has been retarded through the grudging attitude of
the administration, which has consistently interpreted the Mandate against
us and not for us. I dread a repetition of the same story now. No my have
the support of Mr. Churchill and Mr. Roosevelt; but they are both very busy,
deeply preocoupied with great affairs, and with little thought or time to
/give
Regraded Unclassified
/ AGENCY FOR PALESTINE
CONTINUATION 2
give to a problem like ours. Thus, the opportu :ity is created for
all our opponents to do their worst in devising schemes which are
likely to prejudice the situation in Palestine.
3)
Generally, in surveying administrative practice in Palestine
in the last few years, one is forced to the conclusion that there is one
law for the Jowa and another for the Araba. For instance:
(a) When an Arab is caught with illioit arms, he is usually brought
before a. civilian tribunal and gets off with B. few months' imprisoment
or a. small fine. A Jow, similarly accused, gets 6. savage sentence of
eight or ton years from a military court - and a great deal is made of it
in the international press.
(a)
The Government always says its min object is to maintain the
status quo, BO as not to disturb the peace or interfore with the war of-
fort. We would gladly accept this point of view, if we did not see every
olaim of the Arabs encouraged by both British and Americans in Cairo and
Jerusalem. In fact, Nuri Pasha, who is at present playing a leading part
in the preliminaries to the so-called (and very problematic) Arab Federa-
tion, when asked whether his activities were known to his British friends,
replied that he would never have thought of taking any such steps without
informing the British Government. No doubt some of Mr. Eden's statements,
rague as they are, may have encouraged the Arabs to take these steps in
the direction of an Arab Federation. Not that we have any quarrel with
these activities of the Arabs; it is their business, and they are perfect-
ly entitled to do as they please. But if direct encouragement is given
by the British, this is clearly in contradication with the maintenance of
the status quo.
direct (o) taxation. Now of the total of income tax paid in Palestine, 72%
Legislation is now being enacted in Palestine imposing heavier
is paid by the Jews (who constitute one-third of the population), 18% by
the Arabs (two-thirds of the population), and 10% by a very for British
officials, foreign companies, eto. It is clearly ridioulous and unfair,
and moans that the Jews are, in effect, paying for the Arabs. Government
knows this, but does not mean to disturb the Arabs. There are substantial
Arab towns which have as yet paid nothing, or almost nothing, in income
tax.
like (d) Freya Stark - who are definitely anti-Zionist.
The Ministry of Information is sending to America speakers -
Stettinius, who is coming over here shortly, has instructions to get into
Against all these things we have no redress. I hear that Mr.
touch with us and ascertain our views. As already mentioned, the President all
has made a useful and important statement, which has given as
by Mr. Wallace Murray - a definite and overt opponent of Probably /the
great encouragement. very But I see that Mr. Stattinium is to be accompanied
the Har applies to the other two people who 1.7 to COME F.E is.
statement good the people con the upper levels may try to do for W rill
certainly be destroyed by those on the lower levels of the
I feel that 11 are threatened with very grave dangers. To oren to be less:
by a great many enemies - so many attacking so few, in fact:
I thought I ought to tell you all this, though I hardly know
whether there is anything that can be done to improve matters.
4)
There is another matter which worries me greatly. I can see that
the work for the Institute in Rehovot does not propper. There was some
talk about creating a fund on the occasion of my seventieth birthday, but
80 far all I gather is that the collections in Chicago and Philadelphia,
and most certainly in New York, have been a dismal failure in 1943, and
that the position is gradually decaying. Nothing came from Canada. I
really don't know what to do. The only men who seem to be doing & job of
work are Dewey Stone and Harry Levine. It is important not only that
Rehovot should exist, but that it should be recons tructed and enlarged after
the war, and funds for that should be built up now. Please advise me what
to do. I don't want to write to Josef - I am too angry with him now, and
may say something that might be too hurtful.
5)
Thanks for your telegram about Blumenfeld. It is & riddle to me
that he never writes or telegraphs, though he solemnly undertook to send
reports every fortnight. He is supposed to be dealing with some of my
chemical affairs, but I have had no word from him since Bergmann arrived
here. What a crew!
Love,
Chain
Regraded Unclassified
V. Delegal,
With trame,
101, V.Y.
Dear Exyor,
I was very happy to receive your long of March 2nd. or
rse, a good deal of anything one says is obsolgte by the time letters
arrive, and one has already heard the results of action reported in letters.
I believe myself that the hearings were good and useful, but whether the
sat-back we have suffered has been neutralised by the fevourable effect
of the hearings, it is difficult to say. I still believe it would have
been a good thing not to have embarked on this project at all. But I
an not going to conduct any post mortems. Our enemies here are certainly
rejoicing over it; myself, I - not too depressed,
That I am far more worried about is the lack of co-ordination
and discipline anong ourselves. But of this - little later on.
The paramount question to-day, to my mind, - what governs and
will increasingly govern, the situation is the disappearance of the
Jews of Europe. Now that Roumania and Hungary have fallen into the
clutches of the Germans, and that preparations are alroady being made for
the extermination of those last groups of European Jews, we shall be left
in Europe with one huge cemetary of everything Jowish that has been built
up over the last thousand years. So the picture "hich presents itself to
one's mind to-day is roughly as follows:
There is one large comunity in the Americas; a f'em small commat-
nities in the British Empire; and an important comunity in Falestine, which
though numerically mich maller then the Americans, differs from it in quality
and is in many respects superior to It. But in spite of obvious differen-
ces, these two commities have a great deal in common. If I may speak
frankly, both are young - without traditions; both are more or less provin-
cial; both are excitable, md apt to overplay their hands. In the past,
this lack of balance has always been counteracted by the Europeans, who
had traditions, who inured to suffering, and who with it had learnt
patience.. With this comunity cone, I can see grave dangers looding shead
of 18. The next Congress - should 19 live to see it - will consist of two
great delegations: the American and the Falostinian. I confess I find it
something of e nightaire to contraplate: it is as if lightning had struck
an old tree-trunk, el clan it into two, totally destroying half of it.
and feels doubtral If the other talf will survive. I here been wondering
the " 1100 by or of st least a partial remedy. or course,
11 1+ not - power - - san, or of any group of men, to counterari
the - but there are one or two things
which it - - - - eight No, and do now. First of all, a group
of miss time Palantine should 8° to the United States
and to these problems. Even more 100
should be taken to induce American
BY soon M ever possi le - in other
chalute movement of sizeable 11-
and of the war. I maline that s/R.
X
ann just a good déal of than here
rifters or sixtem, like the
[elantine
in
a
year
to
100.
position may be vitited by
argument based on provide
Regraded Unclassified
to anti-semitism losse Its for or if only - very mall number of
-- remain alire in Burope Eter this I - Juite sure that our
pponents are already reckoning on this in their own minds, though
hey do not speek about it you because it would be very ungrecious
Lo make political capital out of such e catastrophe. But when every-
shing 1s over, and the facts become known, they will speek for them-
solves. And any demand of ours based on the imporative necessity of
transferring large numbers of loss speedily to Palestine will then
fall to the ground. This emphasises the importance of a movement
in American Jerry, particularly anong the young people, in favour of
emigration to Palestine. I do not see how they can possibly bar
American citizens from settling in Palestine if they choose to do 80 .
All this requires imagination, thought, and rapid action.
We have discussed it here among ourselves. Moshe will be
in Palestine very soon, and will return here shortly. I have asked him
to discuss it with our colleagues there, and also to select a group of
young people to go to the States on this mission. We are propared to
finance it from here.
Now I believe, dear Meyer, that this is a matter of persmount
importance which over-rides almost everything else, and I want you to
consider it carefully with our colleagues and friends: with Wise, Lipsky,
Silver, Rothenberg. Our friend will be travelling back here, I understand,
in a very short time. You can - and certainly you will send
é manager
lample
me a telegram on receipt of this letter.
2.
Now a few words about the Hays report, the summary of which arrived
with your letter of March 2nd, and which I an studying very carefully. or
course, I an a layman, and am at a great disadvantage in these matters. But
I admit I found the report somewhat disappointing. First of all, I think
it is no use our counting on being able to use the waters of the Liteni for
irrigating the Smok and the Negar. It will take a very long time to bring
either Arabs or French (much less both) to let us use this water, even
though hoy may not need it thouselves. I well resember how difficult
they all were when we were trying to delimit the frontiers between Palestine
and Syria after the lastwer. If not for Mr. Lloyd George's insistance on
the present frontiers (themselves far from ideal) our case would have been
hopeless. We have therefore to reckon only with the other projects, which
altogether would give us about another million dunams of irrigated land,
of which almost a quarter will be in Transjordan, and probably out of reach
for Jewish cultivation. Some of the land in western Palestine will, of
course, also he Arab-owned. 30 I think we can count on some 600,000 dunams
accruing to us under these schemes (i.e. without the Litani). It is not
negligible: it means another 30,000 families. And for every family on
the land, experience shows that one can settle three familios in urban pur-
suite, Sey 6. total of shout another helf-million people.
Another difficulty I can see is the removal of Tel-Or, which is
no sary matter. I don't 100 very much in the report about the rest of the
incor, which according to other experts can be utilised, and at least in
part irrigated. I was always under the impression that quite a good deal
could 14 done there with rainwater stored from the Jerusal en and Hebron
- reserveire into the plains of the llagov. So
rainwater Is, in winter, cerried down to the see by the Audja, Jordan
other streams, that if proper arrangement were made
is, - eight do a fair amount of irrigation in the Neger from
: little surprised to find no reference to this
-- Leas's letter with great care, and it seams to se
- personal the political: be and Goldown
of - there 1- socetting In enst be says:
on soch other's Loes in Wathington. But
cov? be avoided or would not
Regraded Unclassified
for so mich. But here T fail to 190 what can from
st in his heart of hearts Warybody "A America has written
00. There my be some lack of pisty in their hesto, but from
Buropem Jewry; they are ready proparing to take over the inherj-
dress point of view, 1t. might be a good prectivel proposition. - You
right that it reminds one # 146t14 of 1321 - except that "- CB : ot
ng to bear the forces which 19 mistered in Europe in 192. lo I
S as best they can for themelves, - so long " they don't do anything
raid that the whole thing will have to he last to theAmerisms to fight an
We or in the States.
injure the general political position, which 19 nt *11 cood either
4.
Talk of partition is still going on, but I have not 30 for been
able to gather enything about its direction. Nor do T k OF when we are
likely to hear mything definite. The fect that :r. Stettinlus has brought
ith him Wallace Murray and Bowman does not augur too well for the attitude
which America is likely to take up in our offairs. By the way, I heard
from Isaish that the President, in his talk with in and lilver, is suppos-
ed to have said that he would instruct Stattinius to got into touch =1
no here. So far I have heard nothing. I have written to the
asking him to arrangsan interview, but T should imagine that Stettinius is
very busy; he is staying here orly e limited time - I hear a fortnight at
the out side - and no doubt there Is a long queue waiting to son him. My
priority in the queus is probably 5. low one. I would the refore suggest
that you should 803 Wise without Salay, en-7 that he should try and arrange
for 6. telegram to he sant at once to London, instructing tottinium to 000
no. This is particularly essential in via of the presence of Mallace
Murray, who no doubt will find good friends here, who see eye to eye with
him on many points concerning us.
5.
There are B few minor matters which I would like to mestion:
(a) I do not hear mything from Joner about nis doings on bahelf of
the Institute. Heither has any word reached me about the plena which you
and others had in connection min raining a fund for the Institute on the
occasion of my seventieth birthday. All I have had from Josef is e Fasiover
telegram, informing me al so of lisa departent Coint that he is having him
Seder with the Maiditches - which, in the midnt of n. world-shaking war,
would appear to argue some 190k of a sense of proport'on.
(b) Then I must poster you again thout slummofold. Be did undertake
to watch over my chemical affairs. No doubt-he her doce nothing at all
but I would like to hear from him that be bas done nothing et all, and than
I shell stop worrying. en Permann, who is en inco rigible optimist, ar-
rived here, he assured me that all these antions in very good hands.
I fear Ser-mann's judgment in there matters is not nearly 30 sound 83 his
chemistry. Do please advise mo what I am to do. It 11 serious, 83 5 great
deal of work and effort expended during my stay in America is going by the
board. Something was to his Are also by Indre, but after net you write
I doubt wheller you will "eel whis to opproach him in thin notter. I have
written to him myself, so Nor't trouble if you don't real like it.
(c) To are acitine by the - weil to " - called Deutart, in
Weshington, F |0 occupies 6 high conflien in of He 1 6
in-lew of the Into Joon n° M.S. ! halped I.Em to int en T.e
his feet when in America. Re lien note n. there. He
WAY dealdre with my rubber - in Nelson's I - 1.0.m. that in.
Fameh be tean anythe that he -ta that Tid did 10t 05:16 Fy
tions. T have written ahgel M.5% both to the ord to Pen
Cohm, end now to Dentrict: Put 14-18k Trutish fiss are to be son, end I
woul 15kg you to N/ ast from to statter 11454 1- entitline in are perti-
bility of revising the DATE 110 or at. If not, I shill - - in mit
by and not better state it.
80y- whether Autor
which -
in
Regraded Unclassified
Would you be so kind as to write and telegraph to no about
nil these questions?
I am afraid this letter is getting rather long, end would like
only to add, in conclusion, that the conference of the Premiers, which
will bring to London General Smuts, Mr. Mackenzie King, and others, may
well be of importance for us, and that I shall watch it with great care.
If anything definite concerning our problem should emerge, I shall natur-
ally let you know. Thankyou again for all your various messages. Is
there any likelihood of seeing you over here?
Please give my love to everybody - particularly Wise, Lipsky,
and Silver; my affectionate regards to Mrs. Sheparde Shirley ofeourn.
Ever yours affectionately,
Chains
P.S. I understand that George Backer has also written to Sam Rosenman
about my seeing Stettinius.
Regraded Unclassified
IN n I If
AV REFUGEL BOARD
COMMUNICATION
$
Mr.
n,
2944
Secretary Morgenthan
Mr. Pohle
180M
The War Refugee Board's experience indicates clearly the absolute in
possibility in the present circumstances of obtaining the cooperation of
Ambassador Hayes in Spain. It demonstrates the necessity of the President's
amointing and sending to Spain at once an outstanding person, preferably a
Catholic, ae his personal representative to handle War Refugee Board matters.
This secas to be our only hope of getting anything accomplished in this most
imortant area. It is essential that the President confer on his representa-
tive such authority that his efforts cannot be hampered by the obstinacy of
Albasrador Hayes.
The following is a brief record of Hayes' refusal to cooperate with the
Board:
1. At the time the Board was established, Hayes was requested by the
Banch and the State Department to bring the President's policy to the attention
of the Spanish Government and ask whether it was prepared to cooperate. Hayes
curtly refused this request, stating that it was reither necessary nor desir-
able to explain our policy to the Spanish Government.
2. Subsequently, both the Board and the State Department presented to
Hayes a detailed plan for increasing the flow of refugees from France to
Spain. Hayes was requested to present this plan to the Spanish Government with
view to securing its approval. Hayes bluntly refused. In effect he indicated
that for various reasons he believes that nothing worth while can be done in
Spetr to increase the flow of refugees.
3. The Board requested Hayes' consent to designate as its representative
Spain David Blickenstaff, whom Hayes had already out in charge of all relief
organizations there. Hayes replied that he did not wish Blickenstaff to spend
All :1ve 17 the Board's work, indicating is effect that he would not approve
cintment if Blickenstaff were required to give up Ms other vork.
the Board then, to view of se absolute secensity of taving - full
*trusentative := Spain, asked Septe' served for see comination of
Sexon, Treasury representative in Service Africa, - Its termitary
Egyee flatly rejected this NEW infication that be
understand via the heart really valid a regroantative 1a. Spain,
Regraded Unclassified
uned a preference for the designation of Blickenstaff, apparently
1120 basis, If the Buard Insists that BORWODA be appointed, Ee
pade % indicate bis view that there 10 nothing the Board can
5. := accordance with the settled policy of the Board, a Treasury
LORIZE VAL granted authorizing the JDC representative in Spain to spend up
to 102, to evacuate refugees, principally children, from France to Spain.
Fire license permits communication with persons in enemy territory. The
Board requested Hayes to transmit a copy of this license to the JDO repres-
entative in Spain. Hayes most recent response is a flat refusal to do so,
replete with a number of irrelevant and spurious reasons which indicate that
he is simply opposed to extensive refugee operations in Spain,
Attached are the two most recent cables from Hayes.
From the record to date it is clear that Hayes does not intend to permit,
if he can help it, the evacuation of any more refugees than possible from
France to Spain, and that he is determined completely to bury the refugee
issue, liquidating as soon as possible the very small refugee business now
60156 on in Spain. He has rejected every request of the War Refugee Board
even though such requests have had the full backing of the State Department
itself. He has given as his excuse a variety of arguments which, while they
may possibly sound reasonable to someone completely ignorant of the refugee
problem, in reality add up to the simple fact that he intends to oppose the
War Refugee Board's efforts actually to bring more people out of occupied
areas into Spain.
As you know, the War Refugee Board's experience with Hayes 1s not the
first one of its kind. You will recall that Myron Taylor voluntarily informed
you that the Intergovernmental Committee had found it impossible to get any
cooperation from Hayes on refugee matters. We have also been reliably
informed that Hayes has made life miscrable for other government agencies
sttempting to work in Spain. Apparently he has been responsible for having
088 representatives recalled from that country. In the refugee field he has
Manstrung private organizations by making them all subject to the control of
his assistant, Mr. Blickenstaff, who helped dispense relief on the Franco
$1.36 turing the civil war.
:- to circumstances, the operations of the Board in Spain are cos-
coints maralyzed and ve are losteg practically the only opportunity we
" the contat for actually bringing people est of secupied territory.
Regraded Unclassified
218-A
PARAPSBLARE CF TELEGRAM RECEIVED
The American Embanay, Madrid
The Secretary of State, Washington
March 20, 1944
976
(SECTION ONE)
SECRET
Answering Department's message number 726 deted March 16
should like to call attention to the considerations which my
***** number 683 dated February 28 raised,
The ao far an it applies to Spain, it has not yet been
to my stainfaction that the proposed program of
far Refugee Board without incurring risks which would out-
1gh the possible humanitarian benefits could make any sub-
mustial contribution toward the rescue of refugees from Germen-
compled regions of Europe. I find myself firmly disagreeing
with the Board as I have already pointed out, for reasons which
number 683 set forth regarding the efficncy and windom of
the program which Department's number 453 dated February 18
villand, The attempted implementation of the program would
only jeopardize the continued effectiveness of refuges
valief operations being carried on by Blickenstoff's office and
Allied missions by virtue of which more than twenty thousand
ware evacuated through Speta to further dentiner
sering 1944 but also would endanger objectives of invediate
end military importance such 48 the control of Germen
and the resous of Allied and American airman from German-
verritory, Therefore what functions the Board's proposed
sine representative would perform or in what manner be
would be useful is not yet clear to me,
HAYES
Visa Character (for the Dec'y) Abrahman, Akain, Barnstein, Oohn,
adidas Printent, carton, Hodel, Laughlin, Leaser, instord, Mann,
Feel, Pallak, Buine, Standish, Steart, B. D. White,
Twice 711es
Regraded Unclassified
08 TIC-BORAM RECEIVED
FROM:
The American Embasy, Madrid
218-B
TO:
The Secretary of State, Washington
DATE: March 20, 1944
NUMBER: 974 (SECTION TWO)
SECRET
If the War Refugee Board wishes to work in Spain I an of
the opinion that it should try to take full advantage of the
experience which has beengained by those who have been actively
working with this problem during the past fifteen months and
should try to shape its efforts to fit conditions the existence
of which have been shown by this experience. Since Hlickenstaff
bee demonstrated his ability to cope with the problems of evacus-
tion, relief and resous 8.5 khey exist here and is thoroughly.
femiliar with them I feel for this reason that the Board should
evail itself of his services. Wish reference to the feeling of
the Board that it should have a full time representative here
it 10 my feeling that the work which it could profitably do in
Spain is already being done or can best by done by Blickenstaff's
office and that the appointment of a representative from outside
would involve EL duplication of effort in addition to the waste
of time involved in having to familiarize a "now" person with
the Spanish situation.
I feel sur 9 that the Foreign Minister would question the
appointment of a representative from the outside as being contrary
to the spirit of my agreement with him early in 1943 that
activities of all American organizations desiring to partici-
pase in refuges relief work in Spain should be centralized
in Elickenstaff's office and on the other hand I feel equally
sure that in addition to Blickenstaff's other duties the
Foreign Minister would give sympathetic consideration to the
acceptance of him (Blickenstaff) 0.6 the Board's representa- of
tive although I have made no approach to the Government
Spain regarding the Board's representation in Spain-
In view of the already large number of persons which other
view of the desirability of keeping such appointments from
government agencies desire to send to Spain as attaches and the in
outside to an absolute minimum consistent with the effective
prosecution of the war effort, the designation of Blickenstaff be so
would be highly preferable. Moreover it would not
likely to provoke. German reaction which might embarrass the
Government of Spain and make difficult its cooperation.
of the reasons given above I strongly recommend
that if it feels that it is necessary to have a representative
Because Hlickenstaff be designated as representative by the Board in
Spain at this time.
The foregoin repeated to London end Algiers.
HATES
DCR /MPL
oct 3/23/44 Valla McCormack, DuBoia, Chauncey Friedman, Paul, (for Pollak, Gaston, the Secty Reine, Hodel, Abrahamaga Standish, Laughlin, Akzin Stewart, Lesser, Bernatein, Luxford, B. D. White, Cohn Mann Peble
218-C
DMB-53
Madrid
This telegram must be
paraphresed before being
Dated
March 22, 1944
communicated to anyone
other than e Governmental
Rec'd
1:30 p.m., 23rd
agency. (SC-00)
Secretary of State,
Washington.
997, March 22, 6 p.m.
In light of following considerations I em not (repeat
not) trensmitting substance Department's 752, March 18, to
Sequerra, JDC representative, Barcelona:
One. It is my understanding that principal JDC repre-
sentative in Spain is not (repeat not) Sequerra but is David
Blickenstaff and it is Embassy's practice to transact all
business with that organization through latter.
Two. Although it has apparently not been brought to
Department attention, Sequerre's loyelty to Allied cause
is not considered beyond question. He is a Portuguese and
therefore 8 neutral subject and, although hebas apparently
done effective refugee relief work, there is little if any-
thing to indicate that he would be above dealing with our
enemies, particularly if subjected to pressure. Sequerre's
.. reputable individual who was refused Palestine visa by
British because of suspicion that he had been giving infor-
mation to the Germans. To entrust such a person with carry-
ing out of operations described in Department's telegram
would therefore appear to be inviting obvious and unneces-
sary risks which could have gravest consequences.
Three. Participation of any private American charitable
organization or its representatives in such clandestine op-
perations as those envisaged under authorization contained
in Department's telegram might well prejudice entire posi-
tion of such organizations in Spain. With Embassy's sup-
port these organizations, centralized in Blickenstaff's
office, have won respect and confidence of Spanish Govern-
ment and have been enabled thereby to do valuable work on
behalf of stateless and unprotected refugees often to acute
discomfort of Germans who would welcome pretext to force
Spanish Government to suppress their activities. Their
participation in operations authorized by license W-2155,
which we must assume would not long remain unknown to
Germans, would provide such a pretext.
**Omission of following:
personal representative in Madrid, until recently, was die-
Regraded Unclassified
218-D
- March 2, 6 1.8., from Matrid
hur, If as the other hand, Decrease and emelder
it BITH profitable se tarn these continues to their OWL
ends 1.147 signt I allowing the to continue provide the
selves wish as additional channel through which to send s-
gents into Spain had Allied controlled territory.
five of even greater importance is danger that much
operations wight compro mise existing underground facilities
within German occupied territory by means of which han-
drede of American and Allied airmen have been enabled to
reach the Spanish frontier without detection. It is my
firm at determined conviction that, regardless of humani-
tarian considerations involved with which I a, of course,
entirely in sympathy, no (repeat no) steps should be taken
which might in even the slightest measure jeopardize the
chances of escape of these airmen whose safety must have
a prior claim on the efforts of our Government to that of
any other class of refugees.
Six. In view of above consideration and of the in-
evitable military significance which we must attach at
this crucial time to any activitiesinvolving passage of
communications and persons into or out of occupied France,
it is my feeling that any operation such as that envisaged
in Department's telegram under reference should be sub-
mitted for prior approval to Joint Chiefs of Staff who
shall be made acquainted with my views in the matter.
It is my intention to take no (repeat no) action on
Department's 752 pending consideration by Department of
points raised herein.
Repeated to London and Lisbon.
HAYES
WTD
sol Cobe, Intel, Lengils, Fals, Directment, Aksin, Bernet412, 202010
Friedma, lesters, Leaser, Landerd, Mane, McCormack, Paul, Pollak,
Rates, Refid. Stewart, 1. 2, Rite 7:1es.
Regraded Unclassified
219
MAR 27 1944
My dear Mr. Secretary:
There is attached hereto for
your files a photostat of a memorandum,
dated March 24, 1944, signed by the
President approving the appointment of
John W. Pehle as Executive Director of
the War Refugee Board.
Very truly yours,
(Signed) H. Morgenthau, Jr.
Secretary of the Treasury.
The Honorable
The Secretary of State.
Enclosure
JWP:1hh 3/25/44
Regraded Unclassified
220
MAR 27 1944
My dear Mr. Secretary:
There is attached hereto for
your files a photostat of a memorandum,
dated March 24, 1944, signed by the President
approving the appointment of John W. Pehle
as Executive Director of the War Refugee
Board.
Very truly yours,
(Rigned) H. Mergenthau, Jr.
Secretary of the Treasury.
The Honorable
The Secretary of War.
Enclosure
JWP:1hhh 3/25/44
Regraded Unclassified
221
MAR 27 1944
My dear Admiral Land:
Thank you very much for the real
assistance which you have given to the War
Refugee Board in connection with the many
shipping problems which it has encountered.
As you know, shipping is one of the most
urgent matters with which the Board must deal
in its efforts to save the lives of innocent
people. Your speedy and wholehearted cooper-
ation in aiding our efforts to obtain ships
for the evacuation of refugees to Turkey, and
your help generally in these matters, has given
us hopes of success in our endeavors.
I also sincerely appreciate your
making available to the Board the valuable
assistance of Lt. Commander Arthur M. Becker,
Mr. Hyron Black and others of your staff.
Sincerely yours,
(Signed) H. Morgenthau, Jr.
Secretary of the Treasury
Honorable Emory 8. Land,
War Shipping Administrator,
Washington 25, D. C.
JHM:JBF:lab 3/25/44
Regraded Unclassified
222
EXECUTIVE OFFICE OF THE PRESIDENT
WAR REFUGEE BOARD
INTER-OFFICE COMMUNICATION
DATE Mar. 23, 1944
TO
Secretary Morgenthau
FROM
J. W. Pehle
As I have told you, Admiral Land has been
very helpful in working out our shipping problems.
Accordingly it would be extremely helpful
if you could telephone Admiral Land at your convenience
to thank him for what he is doing for the War Refugee
Board.
4 / Vel JUST
Regraded Unclassified
223
ORIGINAL TEXT OF TELEGRAM SENT
FROM:
SECRETARY 07 STATE, WASHINGTON
TO:
AMREP. ALGIERS
DATED:
March 27, 1944
NUMBER: 919
SECRET
TO WILSON FOR ACKERMANN FROM WAR REFUGEE BOARD.
This is WRB Cable to Algiers no. 2. The following is
for your information. On March 23, 1944, we talked with
Jean Monnet about the desirability of securing better coopera-
tion from the French Committee of National Liberation on
the matter of evacuating stateless and enemy national refugees
from Spain to French North Africa. We particularly stressed
the security problem, the delays attendant upon existing
procedures, the problem of Sephardic Jews, and the necessity
for general cooperation.
Monnet agreed to cable Algiers promptly and indicated
that he thought Fresnay, a member of the Committee, would be
the one to handle the problem. He thought that Fresnay would
probably contact Ackermann.
HULL
Regraded Unclassified
224
FGH - 491
Algiers
This telegram must be
Dated March 27, 1944
paraphrased before being
Rec'd 5:35 a.m., 28th
communicated to anyone
other than a Governmental
agency. (SC-00)
Secretary of State,
Washington.
1009, March 27, 3 a.m.
FOR WAR REFUGEE BOARD FROM ACKERMANN.
War Refugee representative number 6.
Program mentioned cable Combined Chiefs of
Staff, fan (fan) 347, being forwarded Marshal
Tito for his views. AMFA (AMFA) has been designated
as agency to handle financial matters. AMFA repre-
sentatives inquire as to method of reimbursement,
also raise question as to whom cost of caring
for refugees will be charged once they arrive
Italy. Cost of care for some earlier Yugoslav
refugees charged to Italian Government on basis
that they come either from Italian concentration
camps or were refugees as a result of Axis oppres-
sion.
CHAPIN
WSB
Regraded Unclassified
EMBASSY OF THE
225
UNITED STATES OF AMERICA
Bogeta, Colembia, March 27, 1944.
No. 3511
Subject: Assistance to War Refugees.
The Homerable
The Secretary of State,
Washington, D. C.
Sirt
Supplementing the Embassy's despatch no. 3321
of February 4, 1944, and with reference to the De-
partment's circular airgram of February 29, 7130 p.m.,
I have the honer to report that the policies and
activities of the War Refugee Board were again dis-
cussed today with the Acting Secretary General of the
Ministry of Foreign Affairs. It was suggested that the
Colembian Government might wish to implement its con
operation in the humanitarian work of the War Refugee
Board by issuing a declaration of policy similar to
that made by President Recsevelt, and issue instructions
to Colombian representatives abread to cooperate in the
work of the War Refuges Board.
Dr. Caballers Escovar said that he would discuss
with other efficials the possibility of Acting Presi-
dent Behandis issuing a public declaration of sympathy
and support for the work of the War Refugee Board,
and seemed persenally to be sympathetic to the suggestion.
He was non-committal with regard to the possibility of
sending instructions to Colembian diplematic and con-
sular officers. The Embassy will continue to follow
this matter and keep the Department informed of develop»
ments.
Respectfully yours,
Arthur Bliss Lane
Original to the Department.
800=0en/840.1
PGD/hl
Regraded Unclassified
226
EMBASSY OF THE
UNITED STATES OF AMERICA
Ciudad Trujillo, D. R., March 27, 1944
No. 1635
Subject: Dominican Foreign Office Note
Concerning Rescue and Relief of
Victims of Enemy Oppression.
The Honorable
The Secretary' of State
Washington, D. C.
Sir:
With reference to the Department's circular
airgram of January 26, 1944, 7 p.m. and the
Embassy's airgram No. 62 of February 4, 1944,
10:30 a.m., with regard to the President's
Executive Order issued January 22, 1944, estab-
lishing measures to rescue the victims of enemy
1/2
oppression, I have the honor to enclose a copy
and translation of Foreign Office Note No. 71.64
dated March 20, 1944 in reply to the Embassy's
memorandum of January 31, 1944.
Respectfully yours,
/s/ A. M. Warren
A. M. Warren
Enclosures:
1. Copy of Foreign Office note.
2. Translation of Foreign
Office note.
848
HCR:eng
Regraded Unclassified
227
Enclosure No. 1 to despatch No. 1635, lated March 27, 1944 from
the American Embassy, Ciudad Trujillo, D. 2.
(Translation by:HCR)
Dominican Republic
Department of State
for Foreign Affairs
Ciudad Trujillo, D.S.D.
7164
March 20, 1944
Mr. Ambassador:
I have the honor to acknowledge the receipt of
the memorandum submitted to my Foreign Office by that
Embassy on January 31 of this year in which Your
Excellency is good enough to transcribe the declara-
tions made by His Excellency the President of the United
States in the Executive Order promulgated on the 22nd
of the month and year mentioned above to the effect
that the policy of the United States of America is to
take all measures within its power to rescue the vic-
tims of enemy oppression who are in imminent danger of
death or otherwise threatened and to afford such vic-
time all possible relief and assistance consistent
with the successful prosecution of the war; Your
Excellency adds that said order establishes special
governmental machinery for executing this policy and
that it furthermore creates a War Refugee Board con-
sisting of the Secretaries of State, Treasury and War
which is charged with direct responsibility in seeing
that the announced policy is carried out. Your Excel-
lency also adds that His Excellency the President of
the United States has stated that he expected the
cooperation of all members of the United Nations and
other governments in carrying out this difficult and
important task and that he would make use of the exist-
ing facilities of the State, Treasury and War Depart-
ments to furnish aid to Axis victims to the fullest
extent possible.
On informing Your Excellency of the favorable
disposition of the Dominican Government to cooperate
with the policy announced by Hie Excellency the Presi-
dent of the United States I take pleasure in pointing
Regraded Unclassified
228
- 2 -
out that the high notives of that policy coincide with
those which have been followed by the Dominican Govern-
ment since the year 1937 when on the occasion of the
Evian Conference His Excellency President Trujillo in-
structed our delegation to the effect that our country
was prepared to receive up to 100,000 European emigrants
and which began to be put into practice with the signing
a short time afterward of a contract with the Associa-
tion for the Establishment of Colonists in the Republic
by virtue of which a great number of said refugees have
found adequate protection.
I take advantage of this opportunity to renew to
Your Excellency the assurances of my most distinguished
consideration.
/s/ M. Pena Batlle
His Excellency
Avra M. Warren
Ambassador Extraordinary and Plenipotentiary
of the United States of America
EMBASSY
Regraded Unclassified
229
TELEGRAM SENT
RMN
PLAIN
MERICAN EMBASSY,
March 27, 1944
PORT-AU-PRING, HAITI.
104, twenty-seventh
Reference to your despatch No. 2521 of January 31, 1944.
It was a source of satisfaction to the War Refugee
Board to learn of President Lescot's plan to make avail-
able Elo, 000 to be used in refugee work. Your despatch of
February 10, No. 2559 brings further encouragement through
the announcement of the establishment of a committee by
President Lescot for the aid of refugees and by the fact
that a portion of the above sum has been made available
for immediate use.
Please express to President Lescot the sincere
appreciation of the War Refugee Board.
If a definite plan presents itself in which Haiti can
render concrete assistance, it will be submitted to you
for your consideration and counsel. The Board is aware of
the limited possibilities in Haiti for a program for the
immigration into Haiti of refugees, but it hopes that small
numbers at least may be absorbed by the Republic.
HULL
(GLW)
WRB:GLW:VHJ
CCA
SWP
3-27-44
Regraded Unclassified
230
NO - 406
Lisbon
This telegram must be
paraphrased before being
Dated March 27, 1944
communicated to anyone
other than a Government
Rec'd 9:02 p.m.
Agency. (BR)
Secretary of State
Washington
918, March 27, 6 p.m.
Following message is for War Refugee Board for
transmission to Moses Leavitt, Joint Distribution
Committee, New York City.
"Your March 20, 5 p.m. Ira Hirschmann advises
Turkish vessel has not been promised for Balkan
evacuation therefore suggests we take no steps connection
Portuguese steamer until number of refugees available for
embarkation Constansa determined. Resnik informs us
Turkish vessel for one trip Constanza to Haifa will
involve cost approximately $250,000 for 800 children
and urges you provide funds War Refugee Board this
purpose. Understand Hirschmann concurs this suggestion.
Please discuss immediately with Pehle and advise".
Signed Schwarts.
NORWEB
KMB
Regraded Unclassified
231
NO - 377
PLAIN
Lisbon
Dated March 27, 1944
Rec'd 8:16 p.m.
Secretary of State
Washington
919, Twenty-seventh. 6 p.m.
Following message is for War Refugee Board for
transmission to Moses Leavitt, Joint Distribution
Committee, New York City.
"Your March 23rd 9 p.m.
Number Jewish refugees on our rolls after
departure Canadian group approximately 500 Madrid
and 1,050 Barcelona including about 560, Sephardic
group leaving balance 990 most of whom stateless.
Difficult estimate number refugees Spain not on our
relief rolls but total does not exceed 450 excluding
of course French who being constantly evacuated. Of
total 1550 refugees our rolls 865 have applied for
North African camp but French authorities have rejected
approximately 10 percent making total likely to be
moved about 775 which will include at least 365,
Sephardic group. Believe some others might be willing
depart after first group leaves provided French
authorities accept additional groups but must point
out very little enthusiasm among refugees for any type
camp and difficult for Backelman or us utilize suasion
especially view uncertainties regarding right to work
and other conditions which will prevail. Also many
refugees especially Barcelona have close relatives in
France whom they feel they can help from Spain there-
fore refuse to leave for any point from which contact
impossible. Have nevertheless cooperated fully and
you may be certain we shall try get out maximum
number without using undue pressure." Signed
Joseph Schwarts.
NORWEB
EJH
Regraded Unclassified
232
RECT-393
PLAIN
Lisbon
Dated March 27, 1944
Rec'd 8:36 p.m.
Secretary of State,
Washington.
920, 27th, 6 p.m.
Following message is for War Refugee Board for
transmission to Moses Leavitt, Joint Distribution
Committee, New York City.
"Your March 23rd, 8 p.m.
Have put off trip Algiers and will try visit
Madrid if possible arrange quickly which uncertain.
For time being will not be necessary utilize special
license since all payments now in pesetas to Spanish
nationals. Important however you transfer this
connection 500,000 pesetas for which we asked. Will
give full consideration possibility stationing
Laura Margolis Spain connection this program although
believe at least for time being Sequerra can handle it
adequately". Signed Joseph Schwartz.
NORWEB
MRM
Regraded Unclassified
233
ORIGINAL TEXT OF TELEGRAM SENT
FROM:
SECRETARY OF STATE, WASHINGTON
TO:
AMEEGATION. BERN
DATED:
MARCH 27, 1944
NUMBER: 1023
SECRET
FROM WAR REFUGEE BOARD TO HARRISON.
Please deliver the following message to the International
Red Cross, Geneva, from War Refugee Board:
"In view of German occupation of Hungary, War
Refugee Board urges that Intercross send effective
representation to Hungary in order to protect the
well being of groups facing persecution."
HULL
Regraded Unclassified
234
PARAPHRASE OF TELEGRAM SENT
FROM:
The American Legation, Bern
TO:
The Secretary of State, Washington
DATE:
March 27, 1944
NUMBER: 1871
CONFIDENTIAL
For transmission to the respective authorities of
all three governments message has been passed on to secret
intermediaries (your number 770 dated March 7, 1944). I
am not able to predict ultimate delivery to destinies because
of current developments.
HARRISON
DCR:MPL
3/29/44
Regraded Unclassified
235
ORIGINAL TEXT OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
Amembassy, Ankara
DATED: March 27, 1944
NUMBER: 264
CONFIDENTIAL
This is WRB Cable to Ankara No. 14. Refer your
No. 465 of March 16, 1944.
Notwithstanding delay in transmission to Washington,
Board desires to have pictures of evacuated refugees
coming from Balkans through Turkey. Board appreciates
your caution against publicity in the United States at
this time regarding your efforts in Turkey. Pictures
will not be used until you agree to their publication.
HULL
(GLW)
Regraded Unclassified
236
TELEGRAM SENT
RESTRICTED
WAR REFUGEE BOARD
RMN
March 27, 1944
This télegram must be
paraphrased before being
9 p.m.
communicated to anyone
other than aGovernment
agency (BR)
AMEMBASSY
ANKARA
268
FOR THE EMBASSY FROM THE WAR REFUGEE BOARD
In answer to your no. 508. Army Transport
Command Cairo has been requested by War Department
to grant Hirschmann no. 2 priority. This is
War Refugee Board's No. 15.
HULL
(GLW)
HULL
(GKW)
WRB:GLW:
NE
3/27/44
Regraded Unclassified
237
BJR - 874
Ankara
This telegram must be
Regraded Unclassified
paraphrased before being
Dated
March 27, 1944
communicated to anyone
other than a Governmental
Rec'd
9 a.m. 29th
agency. (scoo)
Secretary of State,
Washington.
PRIORITY
547, March 27, midnight
FROM THE AMBASSADOR AND HIRSCHMAN FOR THE WRB.
Department's 250, March 24, 10 p.m.
Ankara's 9.
(One) The Turk authorities have now agreed to a
charter price of 175,000 Turk pounds (approximately
$97,200) for the projected voyage, eight days being
allowed for embarkation and debarkation. For any
period of time in excess of eight days required for
embarkation or debarkation we will be required to pay
5833 Turk pounds (approximately $3245) per day. In
view of the fact that the Jewish Agency for Palestine
had made a firs offer of $250,000 (repeat dollars) for
the charter of the SS VATAN for the projected voyage
and was merely awaiting the consent of the Turk Govern-
ment to the charter, and that we have obtained a desirable
passenger vessel in lieu of an old cargo ship which
would have requised the installation of passenger
facilities entailing & delay of two months, and which
could not have carried more than half the passengers
the SS TARI will take, W consider the price now agreed
upon to be extremely favorable having regard to the
exorbitant prices demanded for charters in these waters.
Our financial negotiations were made difficult by the
price offered the Turks for the 88 VATAN. Black, who
has been present throughout the negotiations, regards
the price finally agreed upon as reasonable under all
of the circumstances.
(Two) The Turk Government will not (repeat not)
accept a replacement guarantee on the basis of "2 cargo
vessel of comparable up and tounage" for the SS TARI,
which is one of its six smilable desirable passenger
vessels. The Turk Government requires a guarantee
that the SS TARI will be replaced with a similar passenger
vessel of comparable up and tormage.
(Three) no, too, are asseming that there will be
refugees available for omeration de the - to
undertaken and are relying e to this effect
from the representative d the Jostish Agency is Istentral,
the representative of the International let trees in
238
-2- #547, March 27, midnight, from Ankara
Busharest and the Rumanian Minister in Ankara, Obviously
having no control over the movement and departure of
refugees Rumania at this time, we are in no better
position than the Board to give positive assurances
on this subject.
(Four) In view of the conditions of the charter
which provides, as stated above, for additional payments
in the event of delays in embarkation or debarkation
on a daily basisk the board will be in a position to
terminate excessive delays should the cost become too
great. In this connection based on experience in this
part of the world and existing conditions, we feel
obligated to invite the attention of the Board to the
probabilityd very great delay in connection with on-
barkation resulting either from failure of safe conducts
to arrive, difficulties in moving prospective refugees
to the portof Constansa, or other difficulties in
connection with the documentation of refugees. In our
opinion only exceptionally favorable circumstances will
permit of the completion of the projected voyage within
two months.
(Five) We invite the attention of the Board to
the fact that we have now taken every step which it is
within our power to take to obtain the German safe conduct.
As the representative of the International Red Cross in
Ankara informs us that he has received word from
Geneva that there will be considerable delay in
obtaining the German safe conduct and as the TARI
which will be prepared to sail within a week, will
not be permitted to depart until the German safe
conduct is forthcoming, we urge the Board to exert
every possible effort towards expediting the German
safe conduct.
STEINHARDT
JT
Regraded Unclassified
239
NOT TO BE-RE-TRANSMITTED
COPY NO
SECRET
OPTEL No. 99
Information received up to 10 A.M. 27th March 1944.
1. NAVAL
On 25th/26th E-Boats off East coast were driven away by H.M. Destroyer
and one of H.M. Corvottes. At least one E-Boat was damaged. Motor torpedo boats
damaged an enemy trawler off the Dutch Coast.
On 22nd/23rd. Royal Marine Commandos landed without opposition on
HVAR ISLAND and re-embarked on 24th/25th. On 20th one of H.M. Submarines in
AEGEAN sank an armed Caique and on 26th probably torpedoed a German 2,000 ton
ship.
2. MILITARY
Russia Russians have captured BALTI and have reached PRUTH on 50 mile
front. They have further advanced South-west of TRANOPOL and
south west of PROSKUROV and have surrounded the Germans in TARNOPOL and
KAMENETS-PODOLSKI.
Burma About 500 Japanese have infiltrated into the area 7 miles
North-west of BUTHIDAUNG. A Jananese force is moving North-west
from UKHRUL (North-west of IMPHAL).
3. AIR OPERATIONS
Western Front 25th/26th. AULNOYE. 807 tons H.E. dropped. Clear
weather, one particularly large explosion reported.
LYON. Aero engine work, weather clear, no cloud, most bombs appear
to fall off the target.
26th. Totals of 1,008 bombers and 821 fighters despatched:
8 bombers, one fighter missing. Military constructions NORTHERN FRANCE attacked
by 500 escorted Fortresses and Liberators and later by 146 modium and fighter
bombers; total 1,268 tons dropped. Medium bombers dropped 657 tons in IJMUIDEN
PORT Area and Mustangs bombed railway centres BEAUVAIS and CREIL. Good results
reported everywhere.
26th/27th. Aircraft despatched: ESSEN 705 (9 missing). COURTRAI
railway centre 109, Sea-mining 20, Leaflets 18, HANOVER, AACHEN, JULIANADORF
and Intruder patrols total 68 Mosquitoes, ESSEN bombed-blind through heavy
cloud.
Italy 25th. Maranders dropped 27 tons RIGNANO and 42 tons LEGHORN.
Warhawks attacked gun positions ANZIO area with good results.
Bulgaria 24th/25th. Wellingtons and Liberators dropped 97 tons at
SOFIA, results unobserved.
OFFICE
RETARY OF TREA SURY
MAR 28 AM 9 31
ASURY DEPARTMENT
Regraded Unclassified