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Volume 727, May 3 – May 4, 1944
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Henry Morgenthau, Jr. Papers
Diaries of Henry Morgenthau, Jr.
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Diary
Book 727
May 3-4, 1944
- A -
Book Page
Appointments and Resignations
Assistant Secretaryship discussed by HMJr, Gaston, Smith,
White, O'Connell, and C.S. Bell - 5/4/44
727 137
a) White and Blough discussed
b) Blough discussed - 5/9/44: See Book 730, page 1
c) Murchison, Charles, discussed: Book 730, page 3
d) Palmer, Ellison C., discussed: Book 730, page 8
e) Atkeson, T.C. (now in Bureau of Internal Revenue),
discussed: Book 730, page 8
Shivers, Robert: Collector of Customs, Honolulu -
White House-Treasury correspondence concerning
appointment - 5/4/44
189
(See also Book 731, page 81 - 5/13/44)
a) Papers for appointment to be prepared - - 5/16/44:
Book 732. page 84
Taylor, William H.
Appointed as Treasury Representative in London HMJr's
letter to Winant - 5/4/44
205
Winant's reply . - 5/9/44: Book 730, page 102
Atkeson, T. 0.
See Appointments and Resignations: Assistant Secretaryship
- B -
Blough, Roy
See Appointments and Resignations
- I -
Europe, Western
See Occupied Territories
- F -
Financing, Government
Security Markets (High-grade) - current developments in:
Haas memorandum - 5/4/44
167
War Savings Bonds
5th War Loan Drive
Gamble reports on progress in the field - - 5/3/44
37
a) Mager (Harold) "in charge" worries HMJr
38
Forrestal asks cooperation of all naval stations in
United States - 5/3/44
73
Washington Monument grounds: Interior Department grants
use of one portion - 5/4/44
177
(See also Book 731, page 92)
War Finance Committee chairmen - 5/4/44
179
War Department designates officers in headquarters of
Service Commands for liaison work - 5/4/44
181
- G -
Book Page
Gallup Poll
See Morgenthau, Henry, Jr.
Gregory, Nicholas
See Morgenthau, Henry, Jr.
- I -
Incentive Taxation
See Revenue Revision
Interior, Department of
See Financing. Government: War Savings Bonds
(5th War Loan Drive)
Italy
Pirelli Chemical Works: War Department report on - 5/4/44.. 727 200
- X - -
King, Mackenzie (Canadian Prime Minister)
See Post-War Planning: Currency Stabilization
(International Conference)
- L - -
Lend-Lease
U.S.S.R. : Negotiations on extension of credits - White
memorandum - 5/4/44
208
Library of Congress Trust Fund
Real estate transactions in Philadelphia approved by HMJr -
5/3/44
80
LOOK Magazine
See Morgenthau, Henry, Jr.
Luxembourg
Iron and Steel Industry: War Department report on - 5/4/44
200
- M - -
Mager, Harold
See Financing, Government: War Savings Bonds
. (5th War Loan Drive)
Magill, Roswell
See Post-War Planning
Morgenthau, Henry. Jr.
Gallup Poll on rating as Cabinet officer, together with
Shaeffer comment on LOOK Magazine Poll - 5/4/44
160
a) Gregory, Nicholas (Philadelphia Inquirer), plans
article on Foreign Funds Control and HMJr for
COLLIER'S to offset LOOK Poll
165
Murchison, Charles
See Appointments and Resignations: Assistant Secretaryship
Regraded Unclassified
- I -
Book Page
Navy Department
See Financing, Government: War Savings Bonds
(5th War Loan Drive)
- 0 -
Occupied Territories
Exchange Rates for Western Europe
White memorandum concerning - 5/4/44
727 211
"Odd and even" rates described by White to Treasury
group - 5/5/44: See Book 728, page 14
HMJr tells McCloy not necessary to consult FDR; HMJr
will assume responsibility - 5/11/44: Book 731, page 1
- P -
Palmer, Ellison D.
See Appointments and Resignations: Assistant Secretaryship
Pirelli Chemical Works
See Italy
Post-War Planning
(Magill, Roswell
(Ruml, Beardsley
Blough reports on conversations in New York City -
5/3/44
11,13
Currency Stabilisation - - International Conference:
Canadian Prime Minister King's statement on Plan -
5/4/44
156
- R - -
Revenue Revision
Incentive Taxation: Blough report on Fourth Interdepartmental
meeting on - 5/4/44
195
Ruml, Beardsley
See Post-War Planning
- 6 -
Secret Service
Reduction in men and area patrolled discussed by Gaston at
9:30 meeting - 5/3/44
3
Shivers, Robert
See Appointments and Resignations
- :-
TARI, SS
See Var Refugee Board
Taxation
See Revenue Revision
Regraded Inclassified
- T - - (Continued)
Book Page
Taylor, William H.
See Appointments and Resignations
Turkey
See War Refugee Board
- U -
U.S.S.R.
See also Lend-Lease
League of Nations-U.S.S.R. relations in 1939 covered in
White memorandum - - 5/4/44
727 207
- V -
War Department
See Financing, Government: War Savings Bonds
(5th War Loan Drive)
War Refugee Board
Turkey: SS TARI - progress report on negotiations - 5/3/44
107,108
Report, April 24-29 - 5/4/44
212
War Savings Bonds
See Financing, Government
Welles, Sumner
HMJr thanks him for "pat on back" in New York Herald Tribune
article - - 5/3/44
62
a) Welles' acknowledgment - - 5/5/44: See Book 728, page 71
Western Europe
See Occupied Territories
White, Harry D.
See Appointments and Resignations: Assistant Secretaryship
1
May 3, 1944
9:30 a.m.
GROUP
Present: Mr. D. W. Bell
Mr. Gaston
Mr. Smith
Mr. Sullivan
Mr. White
Mr. Haas
Mr. Blough
Mr. C. S. Bell
Mr. Olrich
Mr. O'Connell
Mrs. Klotz
H.M.JR: Did you give me a report on your conference
with Judge Rosenman?
MR. GASTON: Yes. We laid the whole case before
Judge Rosenman, and I think in a fairly forcible way.
The Judge said that he retained the two drafts of letters
to consider, but his offhand judgment was that another
letter wouldn't do any good at this time. He wants to
talk to you about it today, but he was inclined to think.
that a conference with the Attorney General was the proper
next step. But he added that he thought the whole matter
would have to go, probably, ultimately to the President
for a decision.
He asked us for the legal opinion on the jurisdictional
question as to whether we had jurisdiction, whether they
had jurisdiction, and whether both had jurisdiction. Joe
had such a memorandum which we sent over to him, as to the
law in the matter.
H.M.JR: Was he sympathetic to us?
MR. GASTON: He seemed to be so, yes.
2
- 2 -
H.M.JR: But he thinks there would have to be a
conference?
MR. GASTON: He thinks that you ought to talk to
Biddle before we go further, but probably the whole
matter will have to be submitted to the President, assum-
ing that the law is as we said; it is an administrative
question which he thinks only the President can decide,
unless we come to an agreement with Biddle.
H.M.JR: Well, I don't see thata conference with Biddle
would get us anywhere.
He is going to think it over?
MR. GASTON: He is going to think it over and talk
to you.
H.M.JR: Talk to me at lunch today? He doesn't think
another letter would do any good?
MR. GASTON: No, not at this point.
MR. SULLIVAN: Hig phrase was, "You would be right
back where you were in January."
H.M.JR: Where was I in January?
MR. SULLIVAN: When you wrote the first letter.
H.M.JR: Well, I think it was good to sort of plan it.
MR. GASTON: Yes. He commented that this man over
there had been above all control, and none of his nominal
superiors had been able to control him.
MR. WHITE: I thought John had a good suggestion for
an approach.
MR. SULLIVAN: I didn't tell him, but I think what it
may be heading up to now--I would suggest that you might
want to talk with the Postmaster General, Stimson, Forrestal,
Regraded Unclassified
3
- 3 -
and the heads of the other Departments who are troubled
with this same gentleman, and then bring it up at Cabinet
and let the others join you.
H.M.JR: Are they having trouble?
MR. SULLIVAN: I understand the postal inspectors are.
Isn't that correct, Herbert?
MR. GASTON: Well, Elmer tells me that they are engaged
in a furious dispute with him right now.
H.M.JR: Well, I will see. I am glad you people went
over. You people thought it was worth while going over?
MR. SULLIVAN: I think Herbert did a swell job--excellent.
MR. GASON: Oh, yes, Sam is a first-rate judge. He
hears everything you say to him. He follows everything
closely.
H.M.JR: Well, I will see him.
Herbert, I got your memorandum on the White House
guards, and I would like really to put it up to the President
whether he wouldn't be satisfied with one hundred and seventy
men, the lower number.
MR. GASTON: Yes. You understand the situation, don't
you? They are patrolling quite a wide area of those proper-
ties around there, and Reilly says that if they cut it to
one company, one hundred and seventy men, they would have
to out the area they patrol down.
H.M.JR: I think they should. Will you get off 8.
message to Reilly?
MR. GASTON: Yes.
H.M.JR: To put it up to the President--would he be
satisfied with one company at Hyde Park?
4
- 4 -
MR. GASTON: Yes. It is rather odd. Marshall wants
to cut down, but these fellows up there, the local
commanders up in New York, don't want to do anything.
They made a point of this Vanderbilt estate. They didn't
want to cut the force down 80 it would be necessary to
abandon that property.
H.M.JR: Yes. Well, it is a nice place to live. There
is a beautiful view. Well, I would like to have Reilly put
it up to the President.
MR. GASTON: Yes, I think that is right.
H.M.JR: That takes care of that.
Now, who is interested in a report from Mr. Nelson
of March 15 in regard to the aluminum position in Canada--
that we might want to cancel on that?
MR. WHITE: Well, that relates to the question which
you initiated as to whether you wanted to take action in
that direction. You were going to wait until you heard
from him.
H.M.JR: Here is a thing from A. H. Bunker to Donald
Nelson. Here is the memo.
MR. WHITE: It has taken almost six weeks to get it,
Mr. Secretary, and each week--
H.M.JR: Here is the answer. There it is (hands
memorandum to Mr. White). I haven't read it.
Here is a funny one, Herbert, I would like you to take
on--how to answer it. Senator Truman and Congressman
Wadsworth are inviting me to come to a Moral Rearmament
meeting.
MR. SULLIVAN: I don't figure that one at all.
MR. D. W. BELL: It is a movie.
5
- 5 -
H.M.JR: I know, but here they are interested in this
thing, Moral Rearmament. Isn't Wadsworth the ranking
Republican Member on the Military Affairs Committee?
MR. GASTON: I think he is.
MR. O'CONNELL: He is on Foreign Affairs. I didn't
think he was on both Committees.
H.M.JR: I think he is the ranking Member.
MR. GASTON: I will take a look at it.
(The Secretary hands letter from Senator Truman and
Congressman Wadsworth, dated April 24, 1944, to Mr. Gaston.)
H.M.JR: Incidentally, that other letter you wrote
was beautiful, Herbert.
Now, we might as well get used to these things.
Sometimes they are embarrassing to the people involved,
but in this setup that you (Olrich) have, Mr. White, who
is in charge of Monetary Research--
MR. WHITE: That is as bad a name as any I can think
of.
H.M.JR: All right. He has brought to my attention
that he thinks it would be very useful to you, as I do,
if you would set up a little economic group. I don't
know whether you agree or not. I don't expect you to say
yes or no. But he thinks so, and has given me a memorandum
on the thing, why he thinks you should have one or two
economists over there who would be planning for you.
I would like to give you this memorandum. If you
want to discuss it with Mr. White or with me, he has
named a person whom I haven't met, but Mr. White thinks
very highly of, which rates very highly with me. But I
think if you had a little research group that would go
with you right from the beginning, a first-class economist,
it would be distinctly useful. And there is no such thing
over there.
6
- 6 -
MR. SULLIVAN: I beg your pardon.
MR. HAAS: He means a large group.
MR. SULLIVAN: There were two that were brought in for
exactly this same purpose, Al Frey, and the fellow named
Bright.
MR. WHITE: No. Maybe they are fulfilling the same
functions. I never heard of them.
H.M.JR: Frey is an economist?
MR. SULLIVAN: Yes, he is the head man at the Tuck
School of Administration at Dartmouth, brought down here for
that particular purpose.
MR. HAAS: In any case, Tickton and I arrived at the
same conclusion that Harry did independently, and we think
what you need is a group of commodity specialists for market
analysis.
H.M.JR: That isn't what you mean?
MR. WHITE: No, I assumed that they would have that.
I thought they would have a small group on top, two or
three who would also be in charge of that to a dvise and
and work out problems for Mr. Olrich. I didn't know they
had anybody over there. I hadn't heard.
H.M.JR: Anyway, here is the memorandum. Here is
Mr. White, and here is Mr. Haas, who is in charge of
Statistics and Research. He has his man over there who
has done a lot of pinch hitting around here waiting for
you.
Herbert?
MR. GASTON: I haven't anything else.
H.M.JR: Any time you want to go, it is all right.
MR. GASTON: All right, I will go in about five minutes.
7
- 7 -
MR. SULLIVAN: Wadsworth's only committee is Foreign
Affairs, of which he is the top ranking Member.
MR. D. W. BELL: He was on the Military Affairs Com-
mittee before he was defeated. I think he was Chairman of
it.
H.M.JR: Yes. Wasn't he sponsor of the present draft
law?
MR. O'CONNELL: Of the Universal Service Statute. He
was prominent in connection with the Selective Service Act.
He is a very good Congressman.
MR. SULLIVAN: The Schram thing is still pending. Would
you like 8. memorandum on that? There are some legal questions
involved. You might want an opinion from Wenchel, too.
That is all I have.
H.M.JR: All right. You are not yet ready yet?
MR. OLRICH: No, sir.
MR. SMITH: I have nothing.
H.M.JR: Frederik, my wife spoke to me last night about
this Chinese picture. I don't know whether Harry would agree
with me, but I don't think from my contact with the Chinese
on the monetary fund that this is a very good time to build
up a wave of sympathy for the Chinese in this country, because
they are behaving--
MR. WHITE: I agree with you thoroughly; I think it is
a bad time.
H.M.JR: She wanted me--
MR. SMITH: We can drop that off. I didn't know that.
H.M.JR: That is the point. She says she hears me
discuss things at home, and it is one advantage. But to
build up a lot of sympathy for the Chinese at this time is
bad. Right?
8
- 8 -
MR. WHITE: It is bad. It may be propitious later,
but not now.
H.M.JR: But right now with all the troubles with the
Army-believe me, if General Somervell or General Clay
knew this, they would burn the film.
MR. WHITE: They might not, because besides stirring
up sympathy for the Chinese, it certainly does a beautiful
job on the Japs. It makes you get up and find one, any one;
it doesn't matter who he is.
H.M.JR: Well, I am just saying right now that a pro-
Chinese film--
MR. SMITH: We can get along without it very nicely.
H.M.JR: It is not very propitious, I know, from the
Army standpoint, and from our standpoint. I mean, I
wouldn't just ballyhoo it. You agree with me on that, don't
you?
MR. WHITE: Yes. The situation is a very precarious
one now. It is uncertain what developments will take place
in the next few months. You might have wished that we
didn't build them up as much as we already have.
.MR. SMITH: We will put that one on ice. Do you want
to get somebody else's opinion on it? Do you want to call
attention to it? It is new, and they are about to spring
it as far and as fast as they can.
H.M, JR: Whatever they do, I would let them do it. I
just don't want to--
MR. WHITE: Is it 8. full-length movie?
MR. SMITH: About an hour and ten minutes. It is won-
derfully done. It is a Frank Capra thing.
MR. WHITE: Have you seen it?
H.M.JR: No.
9
- 9 -
MR. WHITE: It might be worth seeing.
MRS. KLOTZ: Do you want to go to the movies today?
H.M.JR: What time do you want to go?
MR. WHITE: Any time that suits you as long as it is
before five.
MR. SULLIVAN: Ah ha. (Laughter)
H.M.JR: You don't want it to interfere--
MR. WHITE: I think the staff needs a little of the
sort of lift they would get out of helping the war effort.
MR. SMITH: It is the nastiest picture yet. Some
missionary took a lot of picture of the Japanese atrocities
when they first went into Shanghai, and it is perfectly
terrible. That is part of the picture.
MR. WHITE: Well, it may be more anti-Japanese than
pro--one would have to see it.
MR. SMITH: There is one spot in it that is very pro-
Chinese when they are moving their whole nation two thousand
miles.
H.M.JR: Any time before five?
MR. WHITE: That is right.
MR. D. W. BELL: What is the matter with that other
half hour?
MR. WHITE: I am not sure that I will be here then.
MR. GASTON: He has to do his days work then.
MR. D. W. BELL: I will have to take lessons.
MR. O'CONNELL: I don't have anything.
10
- 10 -
MR. HAAS: We have been promised by the War Production
Board some material on this Public Works project that you
inquired about.
H.M.JR: When?
MR. HAAS: Towards the end of the week.
H.M.JR: Do you mean to say that they don't know over
there what public works they have?
MR. HAAS: Oh, yes, but I have asked for a breakdown
geographically so I could pick out the ones that give the
appearance that there is no military justification for.
Otherwise, I would be up against reviewing eight thousand
particular folders, do you see? It is quite a job. That
Bristol project--they had to write out to the field or
telephone to get a report.
H.M.JR: Then you will overlay it?
MR. HAAS: Yes, if it is out here in Utah in the
sticks, some project, I will ask for the folder to see
why that was put there.
H.M.JR: They are investigating WPB's approving
projects for cities, schools, and so forth, which I am
challenging the need of at this time. There is such a
shortage of manpower. Have you heard of any of that up your
way?
MR. OLRICH: Not yet, sir.
H.M.JR: They are letting them have steel pipe and that
sort of thing.
Roy?
MR. BLOUGH: The tax debate starts today. There will
be two days of debate, and then they vote. It looks pretty
favorable, because there is no particular controversy.
11
- 11 -
H.M.JR: Did you see the beautiful letter we got
from Mr. Doughton?
MR. BLOUGH: No.
H.M.JR: You might send him & copy.
MR. BLOUGH: Frame it quickly before we get another
one.
H.M.JR: One to Blough and one to Surrey.
It was so "be-ootiful!" I sent a copy to the President.
MR. BLOUGH: What has come over the old man? In New
York yesterday, in addition to talking with Young and Rubicam,
the advertising people, on income tax returns, in an inter-
esting preliminary conference with a roomful of a million
dollars worth of talent, I suppose--
MR. SMITH: A million and a half.
MR. BLOUGH: I talked to Beardsley Ruml and Ros Magill
for quite a while. I will write you a report. If you want
an oral report--
H.M.JR: How long would an oral report take?
MR. BLOUGH: As long 8.8 you like. I could make it
five minutes or an hour.
H.M.JR: Make it five minutes.
MR. BLOUGH: Well, Mr. "uml is giving all of his time
to post-war planning these days. He has already indicated
his general philosophy in a series of speeches and in articles
in the New Republic. What he thinks ought to be done now is
an adoption by the Administration, preferably both parties,
of this policy, a reduction of taxes after the war to the
point where the budget would be balanced at a high level
of employment. He figures that the national income at
present--
12
- 12 -
(Mr. Gaston leaves the conference.)
MR. BLOUGH: Well, Ruml would like to see this adopted
as the policy for the Administration in the post-war period.
He would like to see it announced as soon as possible, namely
that they were going to adopt the policy of reducing taxes
after the war to the point where you had a balanced budget
at high levels of employment, and you were going to hold the
rates there so that when employment fell below that level
and income fell below that level you would have a deficit
with its stimulating effects, and at that level you would
have a balanced budget. He is worried about the interest.
He is afraid the interest payment will be quite deflationary.
He doesn't seem to anticipate any reduction of the debt,
although, of course, the debt will be paid on the dot when
it comes due--
MR. D. W. BELL: Oh!
MR.
BLOUGH:
by borrowing from somebody else, Federal
Reserve Banks if necessary.
He then would like to see public works used as a
stabilizing factor, not for the economy as a whole, but
for construction, and the Government adopt a ten or twelve
million dollar level as the level of construction industry.
And when private construction is up to that point, the
public. doesn't. put in any public works. When private. con-
struction is below that point, then you have public works.
Now, he has a lot of other things, but those are the
two basic elements in it. He doesn't think there should be
any detailed post-war plan announced at this time.
Magill feels also that there ought not be any post-war
tax plan announced at this time, although you ought to
have post-war plans.
H.M.JR: Did you see them together?
13
- 13 -
MR. BLOUGH: No indeed. I had a two-hour talk
with Forml at his store, then I had lunch with Magill
before the Young and Rubicam meeting. Magill feels
that the idea of a committee setting up a committee to
help you would be a very bad move, from most points of
view, at any rate.
He figures that Mr. White's idea of calling a con-
ference of people in different industries and represent-
ing different groups, is an excellent one. He is not
sure in his own фinion whether it isn't too late to do
that, in view of the politics of Election year.
But, aside from that, he felt that was & good idea.
H.M.JR: Can I interrupt you a minute? Paul told
me. I didn't know we had & committee of five advising us
on estate taxes.
MR. BLOUGH: We have & technical committee - I am
not sure how many people are on it - might well be five -
comprised mostly of either law professors or practicing
attorneys. It is a good group, but it is not at the
policy level. They are working out alternative techni-
cal approaches to our deathtaxes. They are meeting
again on Saturday, incidentally.
That was given a little publicity some months ago
but it is working quietly along.
H.M:JR: That kind of a committee wouldn't do.
MR. BLOUGH: That is not the kind of committee that
the people who want a committee want. They want a com-
mittee which would go into policy aspects. See, here is
8. technical group who are studying a very narrow field
here, the problem of transfer tax at death, or accession
tax as & means of curing our present death and gift tax
problems.
The kind of committee that has been urged upon you,
I think, is supposed to go into broad tax policies and
14
- 14 -
that is what Magill feels would not serve you in this
particular instance. I am not going into his reasons
because time doesn't permit, but I will report them to you.
There were other things, but those were the important
points.
H.M.JR: I haven't got - no one has told me what we
expect Young and Rubicam to do for the Treasury.
MR. BLOUGH: We hope we can do what was done last
fall with Form 1040A; namely, to take the Bureau of
Internal Revenue's - last fail we took the Bureau of
Internal Revenue's Form 1040A and had Mr. Frederick,
who is working with Mr. Smith, get in touch with some of
the advertising people in New York and make it understand-
able to the taxpayer, make it easier for him to follow,
test it out on the public to see whether it is workable.
It is the thought that if the arrangement can success-
fully be made within our budgetary and legal requirements,
that we could do a similar job, only a better one, with
the new forms which will come out of this law; and that
some of us feel strongly that it would give us a much
better return and instructions, and to the extent that it
was not a full success, we could at least be in a position
to say. we. did. everything that was. possible to do to get
it in shape.
Now, I don't know - there are some dangers, I think,
of tying up with any agencies, and we will have to explore
those. There was a room-full of presidents and vice
presidents, including Vice President George Gallup,
there yesterday afternoon, and they were just like a
bunch of boys with a new toy.
They had a couple of these return forms there, and
they talked about them like any roomful of men will, and
complained about them, and so forth. It was a conference -
you know what a conference is.
H.M.JR: But they were interested?
15
- 15 -
MR. BLOUGH: They were interested, and the Presi-
dent, Mr. Larmon is apparently approaching it from the
point of view of being helpful. Of course, it isn't
going to hurt them any if they are successful in this,
but I think they had a genuine public-spirited attitude
toward it.
MR. WHITE: What is the fee-on a commission basis
of the returns?
MR. BLOUGH: Mr. Smith has talked with them. I
don't know anything about that angle, but they agreed
to do it on a non-fee basis - just whatever the costs
involve. We couldn't pay their fee. This isn't ivory
soap, after all.
MR. SMITH: We didn't have any time to do anything
with the big time, but we did take the simplified form
and we didn't have a single complaint from anybody
about that.
MR. BLOUGH: Well, hardly.
MR. SMITH: Didn't have any published complaints.
MR. HAAS: That is good. You took care of that!
H.M.JR: It just reminded me, while on Galiup -
what would you think if either you or I called up Cowles?
Didn't you know him very well at Des Moines?
MR. SMITH: Yes, I have written to Cowles and asked
him if he would give me a break-down.
H.M.JR: My wife drew my attention to the fact, they
couldn't poll fifty-two people and not have them mention
either Stimson or Frank Knox, and neither Frank Knox or
Mr. Stimson is mentioned. You can't ask fifty-two news-
papermen and not have them mention Stimson or Knox.
MR. SMITH: Not one of our men in the press room
ever saw the thing. I am tracking it down and I think
16
- 16 -
it was a Columbia survey which is handled by a man
by the name of Wingo who almost got put in jail for
espionage. But anyway, he is very likely to have
framed it by getting the view of the right people.
H.M.JR: Well, the fact that neither Stimson or
Knox is mentioned looks very suspicious. Didn't Gailup
do one where I was mentioned, about a year ago? Yes,
there was one. Look it up, will you? There was a cer-
tain kind of one as to what the people in the field
thought.
MR. SMITH: That is very interesting because Cowles
made a survey in the Des Moines register and Stimson
came out second.
H.M.JR: well, you look it up. He did one as to
what the people think as to who is doing a good or bad
job.
MR. WHITE: I think that was two years ago.
H.M.JR: But look it up and think about getting
Gallup to do another one. Not just for me, but the same
group, to see what they think. Will you do that today?
Do you call Gallup "George"?
MR. SMITH: Sure.
H.M.JR: Anyway, would you ask him whether he
wouldn't do another one in the light of this faulty one -
not just for me, but the same kind of one. I didn't
come out too good, but I was somewhere in the middle,
as to what the people in the field thought of all of us.
I was somewhere in the middle.
MRS. KLOTZ: That is right.
H.M.JR: Mr. White?
MR. WHITE: On this cable that we sent yesterday,
we changed the last sentence which I think will take
17
- 17 -
care of the difficulty slightly - made it "The Govern-
ments in Exile."
H.M.JR: This is a loan to the Netherlands which
Jones has again put up to me. Before answering him, I
am laying it before the President to get his reactions.
This last sentence, "If you agree, I will advise Jones
that in my opinion, granting & loan at this time would
be premature and 8 nstitute a policy commitment on loans
for post-war purposes to Governments in "xile that we
are not competent to prepare to undertake" - that is
very good.
In this thing they were very dirty. Did you hear
about it - where they said that if they can't get this,
they will have to look to England and Germany to do
business with?
MR. D.W. BELL: I didn't get that. I got that
they thought they had an enemy in the Treasury.
MR. WHITE: This other was in their letter.
MR. D.W. BELL: This is the cable you got?
MR. WHITE: No, this was a letter. You have a
copy. It is in the Dutch Minister's letter.
The Army is bringing pressure on the final deter-
mination of the French rate. The Finance Minister is on
his way and will arrive here Friday. It won't be settled
before then, but we have informed them if by some chance
they happen to have a rate before they come, and they
use a rate which is tentatively set, which is two hundred -
the Dutch, as you know, and the Belgians, have given us
their final rate--
H.MJR: I knew the Beigians had.
MR. WHITE: The Dutch have, too.
H.M.JR: I don't think you advised me.
18
- 18 -
MR. WHITE: I thought I mentioned it.
H.M.JR: You sent in Belgium's yesterday.
MR. WHITE: We just got the Beigian's; we got the
other a week or ten days ago. We haven't heard finally
from the Norwegians, but there is a tentative rate.
When you say you saw this telegram - there were two
telegrams, one last night and one this morning. You saw
both?
H.M.JR: I didn't see the one this morning.
MR. WHITE: There is one that Luxford sent me last
night.
H.M.JR: No, I haven't seen this.
MR. WHITE: It just came about five minutes before
the meeting.
H.M.JR: Who is this?
MR. WHITE: I think he is the Vice Commissar. I
thought he was the Vice Commissar of Foreign Affairs.
H.M.JR: I think that is wonderful, Harry.
MR. WHITE: Yes, that leaves just - I would suggest
to the boys that they draft a cable to Winant that you
might consider sending, in the light of this. They are
drafting it now, so if you have a few minutes any time--
H.M.JR: What I am going to do is - I made a fool
appointment to have my statue done. They are having all
these done - I don't know - Kiplinger is financing it -
having busts made of them. I checked it up. It is
strictly kosher.
MR. WHITE: The statue or the pose?
19
- 19 -
H.M.JR: The project.
MR. WHITE: We haven't seen the statue yet.
MR. BLOUGH: they looked practically finished.
H.M.JR: While the artist does me, Mrs. Klotz is
going to take care of the manager.
Then I was going to take Mr. Olrich over to Procure-
ment, Suilivan and I are going to take him over. By the
time I come back you will be ready?
MR. WHITE: Yes, we will be ready.
H.M.JR: Before tweive?
MR. WHITE: Any time you name.
H.M.JR: Well, when I come back. This is fine.
MR. WHITE: With your permission, I would like to
inform the Russian Ambassador of that.
H.M.JR: Yes. You should or I should?
MR. WHITE: It would be & nice thing if you would
call him because he helped - I know not recently, but
earlier. He put pressure on them, or at least he said
he sent--
H.M.JR: Then I would like to say that if he sends
somebody down they can read the cable.
MR. WHITE: He can send the head of the delegation
down.
(The Secretary places a cail to the Russian Ambassador
H.M.JR: That is fine. I didn't realize it. I
thought it was the one Luxford sent out last night.
20
- 20 -
MR. WHITE: No, that just came at nine-twenty.
H.M.JR: Without giving any details, I had lunch
with McCloy yesterday and he reports he had a wonderful
opportunity in England to see the Military. He comes
back very much encouraged. He thinks we are ready - we
are on our toes. He thinks the soldiers are in good
shape and he thinks that we can do the job. He is very
much ouraged. The first man who has talked to me that
I really believe. He read me pages and pages of excerpts
from his diary. He thinks we can do it and the English
are keen for it now.
All over England you go around and hear, "What are
we waiting for? Let's do it now" - all that kind of
stuff - chalked up on the wall. But he also said a lot
of people can't take this bombing much longer over there.
He said the women are awfully tired. This, coming now, on
top of all the other things, and all the work, he says the
women are just tired out.
MR. WHITE: You can imagine what is true in Germany.
The Dutch Ambassador--
MR. D.W. BELL: Did he mean the English women are
tired?
H.M.JR: Yes, awfully tired.
Would you draft a cable to Hamilton for me, thanking
him for that? Isn't Hamilton the fellow who used to be
in charge of the Near East - China?
MR. WHITE: I think it is the same Hamilton, but
I am not certain. That Hamilton is no longer here. I
don't know where he is. I will find out.
H.M.JR: I teil you what I think will be nice to do.
I would write & letter to Mr. Huil for me to sign -
21
- 21 -
"Would you please thank Mr. Hamilton for me for the
excellent work that he did," and so forth.
MR. WHITE: That Hamilton did?
H.M.JR: Yes. A letter from me to Hull.
MR. WHITE: Yes, I understand. I don't know how
much work Hamilton did. Harriman is in charge.
H.M.JR: We have gotten telegrams twice a day from
him.
MR. WHITE: For one day! Right.
MR. D.W. BELL: Harriman isn't there, is he?
H.M.JR: No. It doesn't do any harm. Why not say
both Harriman and Hamilton?
MR. WHITE: I think that would be better.
MR. D.W. BELL: I haven't anything except a letter
of resignation from LaFollette in the United States
Mint at Denver. He is resigning to accept a Civil
Service job in the Mint.
H.M.JR: Yes, sir. (Secretary signs letter to LaFollette)
MR. C.S. BELL: Mr. Stimson has turned us down on
Paul Dudley. He claims he is bringing in all of the
boys he can bring in for combat serivce and he can't go
along with us.
H.M.JR: No argument, except I wish you would please
serve notice on Mr. Coyne and Mr. Steele to get somebody -
not for me, I mean for over there.
MR. SMITH: Your wife wanted to talk about it first,
I think.
H.M.JR: She is coming down to see you today.
22
- 22 -
MR. SMITH: All right, I will be here.
H.M.JR: Good.
Well, the Navy could do the same when they get a
couple of thousand people. Did you notice along the
streets the number of young Navy lieutenants who are
lining the streets? Did you ever see such a display
of manhood? No ribbons of any kind. Did you notice it?
MR. SULLIVAN: Yes.
H.M.JR: Terrific.
MR. WHITE: Most of them here are quite unhappy and
feel frustrated that they aren't doing much.
H.M.JR: Well, anything else?
MR. C.S. BELL: One of the little things - Danny and
I have discussed renumbering the building, going into
four numbers. We have put in so many partitions that we
have got too many half rooms in the building. We have
gone into it quite thoroughly. We would like to go into
a system.
H.M.JR: Don't say anything, Harry. Harry thinks
there is only a quarter of a person in half a room.
MR. C.S. BELL: We would like to go into four
numbers.
H.M.JR: Doesn't make any difference to me.
MR. C.S. BELL: Based on corridors.
H.M.R: That is an important decision for the two
Mr. Bells.
When I go over to Procurement, I want you to go with
me I don't know what you have been doing to get ready.
M
S
23
- 23 -
MR. C.S. BELL: Yes, sir. We have an office for
Mr. Olrich and an anteroom, and & room for an aide, to
begin with.
H.M.JR: You go over with us.
All right.
24
May 3, 1944
11:30 a.m.
CABLE TO WINANT
Present: Mr. White
Mr. Smith
Mr. Luxford
Mrs. Klotz
Mr. Bernstein
MR. WHITE: Joe O'Connell was also in the discussion
because we didn't know just how far to push them, and so
forth. This is the additional sentence. (Refers to
attached draft)
H.M.JR: Do you mind telling me the subject?
MR. WHITE: The subject is a cable to Winant.
H.M.JR: Mrs. Morgenthau has just been talking to
me about Smith and the Star Parade - to ask if she could
have my room at twelve-fifteen - yes, she could have
Smith to advise her--
MR. WHITE: The Parade of Stars--
H.M.JR: Then Smith walks in here, and then you
start in. I am kind of confused.
This is to Winant? (Secretary reads draft to himself)
Why do you add, "...if a invited"?
MR. WHITE: Because they haven't been invited.
H.M.JR: Why not say "we" instead of "if"?
MR. LUXFORD: Well, the second sentence says that
whether or not a conference is held depends on the British.
25
- 2 -
H.M.JR: I still say there is no doubt whether we
are going to invite them. It is "when we invite them."
MR. WHITE: Yes.
H.M.JR: I mean, unless Harry doesn't want to invite
them.
MR. SMITH: I would rather out the whole thing out.
MRS. KLOTZ: Why not leave it all off?
H.M.JR: Yes, he is wonderful at that, you know.
MR. WHITE: Deleting, you mean?
H.M.JR: Yes. He is wonderful. (Refers to Mr. Smith)
(Reading) "Therefore, whether or not a conference
is held depends entirely on the response of the Dritish
Government to the question whether they would participate
in the conference if invited by the President.
MR. WHITE: This cable will refer to that.
H.M.JR: I don't like that "if." "Would participate
in the conference."
MR. WHITE: If you don't put that in - I see.
H.M.JR: "Would participate in the conference." I
would just put a period there.
MR. LUXFORD: Yes, I think so.
H.M.JR: "Therefore, whether or not & conference is
held depends entirely on the response of the British
Government to the question whether they would participate
in the conference, period.
"For your guidance the President has indicated that
he would like to have the conference."
26
- 3 -
MR. WHITE: Do you think that is too strong?
H.M.JR: No - - or you can put, "For your guidance,
the President has approved the calling of a conference."
Which do you gentlemen prefer?
MR. WHITE: This is a little stronger, if you think
it is justified by the way he feels. The other is more
accurate.
H.M.JR: I think I would say, "For your guidance,
the President has approved the calling of a conference."
MR. WHITE: I think we told them that before.
(Mr. Bernstein entered the conference)
H.M.JR: Hello, Bernstein. Where did you come from?
MR. BERNSTEIN: I just hopped in later with a little
addition.
H.M.JR: You would!
(Reading) "We have informed the British many times
during the past several months of the reasons for the
limitations on our.time schedule." That, I think, sounds
kind of ill-tempered. I don't like that.
MR. WHITE: Our thought was merely--
H.M.JR: No, I don't like the rest of this at all.
I would simply say, "The question of cailing ornot calling
a conference entirely depends upon what success you have
been having."
MR. LUXFORD: Of course, there was one further
thought.
H.M.JR: Now, the whole question of calling or not
calling a conference depends upon what success you can
have in convincing the British Government that this is
27
- 4 -
something they should take part in. I don't like the
tone here at all.
MR. WHITE: Do you think something like this might
be added? (Wands Secretary suggested addition to cable)
H.M.JR: No, I don't think so. I would just put it
up to him. You can say, "We don't have to point out to
you the implications if the British turn us down." After
all, the other nations have said yes.
MR. LUXFORD: Mr. Secretary, I think the argument
that Harry advanced this morning is very strong for some-
thing like this last paragraph. He pointed out the
British will never say no to a conference. Rather, they
will stail or they will give you an equivocal answer, or
say, "Hold it later." You will never have the British
in the position of saying no. The only answer that means
yes, is yes; that any other action they take really means
no, and they should take the responsibility for that.
MR. WHITE: The thought in my mind is that the
struggle is not solely between the U.S. and Great Britain;
that the struggle on now is between Churchill on the one
hand leading that group, as against the others. And I
think if they can crawl out they would like to.
But if they are made, to see that their failure to
acquiesce is a failure to attend, then, I don't think
they can stand that before their own public.
H.M.JR: Well, don't you think Harriman knows all
this?
MR. WHITE: I don't know. Maybe we can tell him
without passing it on. He knows that part, that I just
said, but whether he knows - well, he should know that.
But I don't know how much he is thinking about it.
H.M.JR: If you want to do that I would spell the
thing out carefully. You have plenty of time. Anything
28
- 5 -
that goes today he won't get it today, so you can work
on it and get it off in the middle of the afternoon.
He would get it tomorrow morning. But I would take the
time and spell the thing out.
MR. WHITE: Make it a long cable for his own
guidance and preface it that it is up to him whether
or not--
H.M.JR: Yes, as I say, the fretting over there--
MR. LUXFORD: The intent was to place responsibility
on the British if they turn it down.
H.M.JR: Well, that is obvious, also.
MR. LUXFORD: If they--
H.M.JR: Well, anyway, you have to explain the thing
to me, 80 there is no reason Harriman can understand it.
What are you (Smith) doing here? What contribution
do you have to make?
MR. SMITH: I took off the "if invited," and I am
about to spout on the international implications, if
anybody will give me &' chance.
I would like to have in this spelling out, to be sure
and call to his attention - he may be fully aware of it -
but if this thing falls apart, there "ain't" no inter-
national cooperation and collaboration after this war.
We have laid ourselves wide open and it is all over but
the shouting. This thing has been at a monetary level
for so long that the people don't automatically think of
its implications from that standpoint. That is what I
would like to get registered.
H.M.JR: You didn't see this before you came?
MR. SMITH: I saw that end of it. That is what we
put that in there for as it was.
29
- 6 -
MR. WHITE: Yes, we talked about that and tried
many, many ways.
H.M.JR: I think you have to take many more words
to do it this time.
MR. SMITH: I agree with that.
MR. WHITE: Weil, words are something we have plenty
of. We will try.
MR. BERNSTEIN: That is our stock in trade.
MR. WHITE: Ail right. We will try it.
H.M.JR: Keep in mind that you want to keep it in
such shape that we can sum this thing up, I hope, in a
good way if it is necessary to say to the President, "I
would like you to send the following cable to Churchill."
MR. WHITE: As a final, or this cable? Bear that in
mind with respect to this, or to a second, final step?
H.M.JR: Bear this in mind when you send this cable
to Harriman. The last thing we will do will be to ask
the President to send one to Churchill.
MR. WHITE: I see.
H.M.JR: Now, another thing, Huil may feel strongly
enough that he may want to put in a sentence. He might
say, "I concur as to the importance of this with Secre-
tary Morgenthau."
MR. WHITE: That was one reason why we put this--
H.M.JR: Why don't you get Huil to add to this?
MR. WHITE: I am sure we could.
H.M.JR: I think that would help. I think a sentence
30
- 7 -
should go in there for Mr. Hull - "I concur with every-
thing that Secretary Morgenthau said here."
After all, the cables have his name signed to
them.
MR. WHITE: Yes, that could go in. All right.
H.M.JR: A message came to me after I went home
last night saying that Mr. Acheson called up and said
there was nothing to report.
MR. LUXFORD: I understand that they thought they
would have something to do.
H.M.JR: Right.
You men let me know when you are ready.
MR. WHITE: It will be sometime this afternoon.
31
DRAFT
To Winant from the Secretary of the Treasury
1. The Soviet Government has now advised us of their intention
to participate in the conference and to send a delegation to the
United States invited. Therefore, whether or not a conference is
held depends entirely on the response of the British Government to
the question whether they would participate in the conference if
invited by the President. See cable
For your guidance the President has indicated that he would
like to have the conference. In accordance with your suggestion it
may be possible to postpone the date of the conference a week. We
have informed the British many times during the past several months
of the reasons for the limitations on our time schedule. Consequently,
further delay in making an answer, or any answer short of a clearcut
"yes" amounts to a "no" so far as we are concerned.
HDW:FS:AFL:jm 5/3/44
32
May 3, 1944
12:48 p.m.
HMJr:
Hello.
Operator:
Gromyko.
Ambassador
Gromyko:
Hello.
HMJr:
Mr. Ambassador.
G:
Good morning, Mr. Secretary.
HMJr:
How are you?
G:
Thank you very much. I am all right.
How are you today?
HMJr:
Fine. Mr. .Ambassador, I was so pleased we've
gotten word from our Embassy in Moscow that
your Government is prepared to send a delegation
to this Monetary Conference.
G:
I see. I see.
HMJr:
And if you would care to send someone down here
G:
Uh huh.
HMJr:
....
to Mr. White's office.
G:
Uh huh.
HMJr:
I'd be glad to let him read the cable that
we got.
G:
I see.
HMJr:
See?
G:
All right, I will send.
HMJr:
Because they mention who would come in the -- as
the head of the delegation.
G:
I see. You mean the cable from the Embassy?
HMJr:
From our Embassy.
G:
All right, I will send to
....
HMJr:
And ....
33
- 2 -
G:
To Dr. White.
HMJr:
And thank you for all the help you've given us.
G:
I'm very glad. I'm very glad. Thank you very much.
HMJr:
And I know how much you've helped and now we'll see
what happens.
G:
Thank you very much.
HMJr:
Thank you.
G:
We're glad to give this. Thank you. Good bye.
HMJr:
Good bye.
34
May 3, 1944
12:51 p.m.
Operator:
Go ahead.
HMJr:
Hello.
Dean
Acheson:
Henry.
HMJr:
Yes.
A:
I tried to reach you yesterday to give you
a report as I said I. would.
HMJr:
Well, I got the message that there was nothing
to report.
A:
Well, there was not at that time.
HMJr:
Oh, yes.
A:
I saw the Secretary after that and took the
matter up with him.
HMJr:
Yes.
A:
He's very troubled about it and he wants to
have the political fellows, Duggan and those
others, meet with him....
HMJr:
Yes.
A:
.... to go over the whole thing.
HMJr:
Yes.
A:
He can't do it this afternoon because he's
tied up and he wants to do it tomorrow morning.
HMJr:
Yes.
A:
I told him that I thought we ought to get on
with it and -- ah -- get his own ideas straightened
out and meet with you.
HMJr:
Right.
A:
And I'm pushing it along.
HMJr:
Good.
35
- 2 -
A:
The principal worry that he has in mind is
that he says that he did not think we were
too terribly successful before, and he said
although this pressure resulted in a break,
it really produced a worse situation than we
had before there, and he wants to know where
we go from here, whether we can do any --
please the people - -- whether we can do anything
more that will be effective, or whether we are
stuck, or what our plan is.
HMJr:
Yeah.
A:
I think that's the reasonable thing to want
to know what you do after you start something
and -- as we're trying to work out with him.
But I'll give you a call some time tomorrow
and tell you where we are.
HMJr:
Will you do that?
A:
Yes. It may be that he'll want to meet with
you after he's gone over the whole thing with
with us....
HMJr:
Right.
A:
and talk it over directly with you.
HMJr:
Right. Thank you.
A:
You saw the message from the Russians?
HMJr:
Yes. That was very good.
A:
Yeah.
HMJr:
Now, we're trying to draft, here, a message
to go to -- to Winant to try to get him to
follow up.
A:
Yes. I think they ought to be told that the
Russians have come through.
HMJr:
Yeah. And there'll be a message over sometime
this afternoon to go. Now, I think it's fine of
the Russians. If we can only get the English, now.
A:
Yes, I think the Russians have been extraordinarily
good. It may be that they think they are going to
take up some of these difficult points later on. ...
- 3 -
36
HMJr: I
Yeah.
A:
....in conferences, but certainly they're going
along fine, now.
HMJr:
Yeah. Well, thank you. Then I'll -- call me
one way or the other tomorrow. Will you?
A:
I will. Yes.
HMJr:
Thank you.
May 3, 1944
37
2:15 p.m.
HMJr:
Hello.
Operator:
Ready with Mr. Gamble.
HMJr:
Thank you.
Operator:
Go ahead.
HMJr:
Hello.
Ted
Gamble:
Hello, Mr. Secretary.
HMJr:
Hello. Are you amongst the living or the dead?
G:
I'm amongst the living, sir.
HMJr:
Well, as far as I know you are amongst the dead.
G:
(Laughs)
HMJr:
Well, I'm dead. I don't know
G:
I'm sorry to hear that.
HMJr:
Well, I -- I haven't heard a single thing about
War Bonds or War Finance since before you left
town.
G:
Well, I was talking to the Under Secretary a
couple of times.
HMJr:
Well, I
....
G:
I called to report our progress.
HMJr:
Yeah, but you might have given me a ring.
G:
Well, I had learned, Mr. Secretary, that you
were going to be away for a part of the first
week that we were away.
HMJr:
Oh, well, that was only a few days.
G:
Yeah.
HMJr:
Well, I'm worried. I don't know. Here we are
approaching the loan and I don't know whether
things -- how things are going.
38
- 2 -
G:
Well, part of our people left last night for
Washington. Miss Elliott and Dr. Blake leave
tonight and I leave this afternoon and will be
in there Friday night.
HMJr:
Yeah.
G:
We just finished our meeting and I have never
felt better about a War Bond operation than I
do at the present time.
HMJr:
Well, I really think, Ted -- I don't like to be
complaining, but the ultimate responsibility is
mine.
G:
That's right.
HMJr:
And I haven't had a word or telegram or telephone
call from you.
G:
It was only just not to bother you, Mr. Secretary.
HMJr:
Well....
G:
That was all.
HMJr:
And then if something goes wrong, it's all with
Morgenthau.
G:
Well, I thought maybe Mr. Bell would report to
you what I had reported to him.
HMJr:
Well, I did ask Bell. He didn't take the
initiative and then when I wanted to find some-
thing out, I frankly was shocked to learn that
Harold Mager is in charge of War Bonds.
G:
Well, he is only in charge in the office, Mr.
Secretary, because we needed all the people we
had
HMJr:
Yeah.
G:
to do this job. The most important job we
had to do was to be sure that the people in the
field are ready to make these additional calls
that they're going to have to make.
HMJr:
Yeah, but supposing you start -- I don't know
where -- let's say you start in New York and
you're out.
39
- 3 -
G:
Yes.
HMJr:
If Randolph Burgess or somebody else wants somebody,
his contact 18 Harold Mager.
G:
He only goes through Mager to clear to us. Wa've
been in touch with the whole country since we've
been on this trip.
HMJr:
Well
G:
As a matter of fact we've transacted business with
not less than twenty states while we were on tour.
HMJr:
Yeah.
G:
And Mager 18 just as a clearing house. He's not
in charge of anything and he's just set there as
a clearing house to be sure that someone who at
least knew where we were and what could be done
about a matter could be properly handled.
HMJr:
Well, I hope things are going all right, but I
might just as well be in another country as far as
War Bonds are concerned.
G:
Well, if I had not -- as a matter of fact, I gave
Mr. Bell a comprehensive report from Minneapolis
about our meeting with the Bankers. I gave him
a report on what I -- had happened in our other
meetings and -- hoping that he would, in his
leisure, get an opportunity to report it to you.
HMJr:
Well, a couple of times I'd say to Bell, "Have
you heard anything?" And he said, "Yeah, things
are going all right." And that's the extent of
my report.
G:
of course, we have done this, Mr. Secretary. We
have travelled nights in order not to lose any
time.
HMJr:
Yes.
G:
Today is the first day that we've had where we
haven't been en route to somewhere.
HMJr:
No, but....
G:
We wanted to get the whole job done in about eight
days' time.
40
- 4 -
HMJr:
Well, look, in the future, Ted, and I want to get
this out of my system, please don't ever be away
80 long without letting me have some "feel" how
things are going, direct.
G:
Well, as a matter of fact, it would have been a
pleasure to have done that.
HMJr:
I mean, after all, I've poured my whole heart
into this thing and then to be completely isolated
for weeks.
G:
Yes.
HMJr:
from this organization, isn't right. And
then to have a person like Mager if I want to do
business with
G:
Well, it isn't for him to -- it wasn't
HMJr:
Well, I haven't done any business with him
because I wouldn't take anything up with him.
G:
Well, that's right. That's right.
HMJr:
But I'm going to be here this week-end.
G:
Yes.
HMJr:
And as soon as you get the cinders out of your
ears, I do want to sit down and talk with you.
G:
Fine. I'd like to sit down on Sunday if that's
convenient for you and give you'a full report
on it.
HMJr:
Well, I'll -- I'll try to make it convenient
because you can't -- not knowing anything I can't
help but worry.
G:
Well, let me make this report to you, Mr. Secretary,
briefly, that w.e have met in -- have finished now
with the whole country.
HMJr:
Yeah.
G:
We've met with every one of the forty-eight
States' leaders. We've met with not'less than
the twenty-five top people in every State. We
nave met with these new Panking Committees. We've
had our whole National Retail Committee out in the
field. We've had our War Activities Committee out
- 5 -
41
G:
Cont'd.
in the field. We have never been in better
shape than we're in right today. Now, there
isn't any mystery about how to do a better job
in the Fifth War Loan and we're going to have
to find the ten million people that Mg haven't
sold in these loans and sell them. And we're
going to have to sell the fort; million that
we sold in the Fourth War Loan more War Bonds.
And it just means all of those additional steps
are going to have to be taken and the people in
the field have never been in better shape to do
that than they are now. And when
HMJr:
Well
G:
....we are able to show you our whole plans --
what we presented to them, you'll feel better
about the Drive than you've felt about any of
them.
HMJr:
Well, I -- I -- I hope you're right, but you've
just left the Treasury proper high and dry.
G:
Well -- uh
....
HMJr:
....as far as I'm concerned and -- but I'm not
going to keep repeating myself. I wanted to
tell it to you and I'll -- I'll try to save time
on Sunday and see whether we can't get together.
G:
Yes.
HMJr:
But I mean; I don't want to be BC/ detached
that I lose interest in the thing.
G:
Well, I didn't -- I didn't feel that way, Mr.
Secretary. As a matter of fact, I thought in
making these tour reports across the country to
Mr. Bell, that I was saving your time in doing
it.
HMJr:
No, well, it -- you're wrong.
G:
It would have been just as easy and more pleasant
for me to call you and make the same reports to
you that I made to him.
HMJr:
Now, today is Wednesday and you're not going to
be back until Saturday?
- 6 -
42
G:
I'll be back. Friday night.
HMJr:
I see. Well, I'll look forward to seeing you.
G:
All right, sir.
HMJr:
Right.
G:
It was nice to talk to you. Bye.
HMJr:
Good bye.
May 3, 1944
2:28 p.m.
43
HMJr:
Hello.
Operator:
Mr. Hannegan is out of the city until late
tomorrow afternoon.
HMJr:
All right.
Operator:
They do expect to hear from him if there's a
message.
HMJr:
Well, you ask him whether he'd like to have
lunch with me on Friday.
Operator:
Friday?
HMJr:
Yeah.
Operator:
All right.
HMJr:
At one o'clock.
Operator:
All right.
HMJr:
Have you got the other call?
Operator:
No, sir. He hasn't returned from lunch yet.
HMJr:
Thank you.
Operator:
Yes, sir.
HMJr:
Tell Fitz about the Friday luncheon.
Operator:
Right.
44
May 3, 1944
3:30 p.m.
CABLE TO WINANT
Present: Mr. Smith
Mr. White
Mr. Bernstein
Mr. Luxford
Mrs. Klotz
H.M.JR: I have sent a message to the Air Corps
Intelligence. I asked them why they don't bomb Luxembourg
and the Italian chemical plant of Pirelli's.
MR. WHITE: Does that go to the Air Chief?
H.M.JR: To the Air Corps Intelligence.
MR. WHITE: It would be interesting to hear their
reply.
The Ambassador was going to see you tomorrow, Halifax,
and I gather that with Opie what he is going to do is to
plead for a delay, but I am not sure.
H.M.JR: You take some extra spinach for breakfast.
What is the name of that man--
MR. WHITE: Popeye.
H.M.JR: I think I told you all coming down on the
train the other day this fellow says, "I want two orders
of spinach." Yes, sir. He waited until the line was
almost through and then came to the fellow. They had no
spinach at all. He just didn't give him any spinach.
What do I do about Halifax?
MR. WHITE: I think we ought to get this out before we
see him.
45
- 2 -
H.M.JR: Have they asked you to see him?
MR. WHITE: Opie asked me whether I thought Halifax
could see you. I said I was sure that the Secretary would
always see the Ambassador if he wanted to be seen.
I asked him to get in touch with Fitzgerald and make
the arrangements if he wanted to be seen. I presume he
either did or will.
I think we had better get this off first.
H.M.JR: I got you, Harry. You interrupted me by
telling me about Halifax and all that.
MR. WHITE: I was going to interrupt you again, because
this is kind of pleasant. A man from the French Underground
who was chief of the Underground Movement with ten divisions
until the thing got so hot for him that he had to leave--he
left by plane to England--told me--I will cover it in a
couple of sentences--that in the central part of France there
is a very large area--an extremely large area--in which there
are no Germans at all, and in which the French come and go
as they please with planes. They have constant communications
with London. He was in constant communication with London.
In his own division he said they had forty receiving and
transmitting stations to London. They have substantial
amounts of small arms and small artillery, mostly grenades,
however.
H.M.JR: Did this fellow come to see you?
MR. WHITE: Yes.
H.M.JR: Through Monet?
MR. WHITE: He works for Monet now. He escaped through
London and was then sent to Algiers and put on Monet's
staff because he is supposed to be 8 timber expert.
H.M.JR: Does he speak English?
46
- 3 -
MR. WHITE: Pretty well.
H.M.JR: Why couldn't I see him?
MR. WHITE: I am sure he would be delighted--any time.
MR. LUXFORD: I guess they will allow you to see him.
H.M.JR: Listen, you think that is funny! It isn't.
Harry's sources of information are as to Donovan as black
is to white.
MR. WHITE: In other words, the Secretary is trying to
convey to you that the source of some of my information
is pretty poor.
H.M.JR: No, so super, super that it is easy to get
something out of Donovan.
MR. WHITE: I think you would be interested in talk-
ing to him, because on the whole what he has to say was to
me surprisingly encouraging.
This is a redraft that I think comes close to what
you had in mind.
(The Secretary reads draft of cable to Winant aloud.)
H.M.JR: Have you cleared that?
MR. WHITE: No.
H.M.JR: It is all right.
MR. WHITE: There are some changes.
H.M.JR: I don't care.
MR. WHITE: We can get something like this by Dean
Acheson.
H.M.JR: Did you see my conversation with Dean?
47
- 4 -
MR. WHITE: Yes, I did.
MR. LUXFORD: I think they are going to give you the
goose egg.
H.M.JR: That means nothing! Oh! Well, they will
give me the goose egg, if that is the expression.
MR. LUXFORD: I asked them to show you the cable that
came through from Armour.
MR. BERNSTEIN: It is on the way to your office now
through Mr. White's office.
H.M.JR: No, I didn't see it.
MR. LUXFORD: State is worried sickfor fear Perlinger
will come out on top, and they are now appeasing Peron.
H.M.JR: I am going to do this: If Mr. Hull says no,
I am going to say, All right, Cordell, I want to go back to
where we were last January; last January you were willing to
do this thing, and everything since then has gotten worse.
And I am not going to be a party. If you want to carry this
responsibility, it is all right; the blood is on your head.
All right.
48
Draft
THE SECRETARY OF THE TREASURY
WASHINGTON
Please send the following cable to the American
Embassy, London.
"To Winant from the Secretary of the Treasury.
"Refer to our No. 3390 and your No. 3507.
"The Soviet Government has now advised us of their
intention to participate in the conference and send a
delegation to the United States. Therefore, whether or not
a conference is held depends entirely on the response of the
British Government to the question as to whether they would
participate. This means that the calling of the conference
depends now upon your success in obtaining British parti-
cipation.
"The President, as you know, has approved the calling
of & conference at this time. While time is vital it may
be possible to postpone the date of the conference a week
in accordance with your suggestion. But if we are to pro-
ceed with the arrangements the President has approved, we
must have a 'yes' reply without delay. Because of the tight
time schedule, will you please telephone to me as soon as
you hear from them.
"I am putting the problem Before you in full because
I know you appreciate the wider importance of the reply
from the British Government. We are aware of the difference
of opinion in the British Government with respect to wisdom
of participating in a conference at this time. We wonder,
however, whether there is full appreciation of the impli-
cation that might be drawn by the public from a decision
by the British not to participate in a conference after the
prolonged preparations and the announcement of agreement
by the technical experts. Among a large segment of our
people Britain's failure to participate in & United Nations
conference at this time would indicate that the United Nations
ORVICTORY
BUY
STATES
WAR
BONDS
ASS
STANDS
49
- 2 -
are finding it difficult to agree on a policy of postwar
collaboration, and will have an unfortunate impact on the
favorable movement for international cooperation which has
been developing in this country.
"From Secretary Hull. Please inform the Foreign Office
of the substance of this message. Explain to them that I
am in complete agreement with Secretary Morgenthau's mes-
sage and indicate to them the important effect of the British
decision on public opinion in this country."
50
Mr. White's office advised that State Dept.
transmitted this cable without any changes
pept to leave out the sentence Refer to
our No. 3390 and your No. 3507
51
Cable No. 3545 as sent by State Dept.
Amb. Winant on May 3, 1944
52
THE SECRETARY OF THE TREASURY
WASHINGTON
no.3545-
MAY 3 1944
Please send the following cable to the American
Embassy, London.
"To Winant from the Secretary of the Treasury.
"The Soviet Government has now advised us of their
intention to participate in the conference and send a
delegation to the United States. Therefore, whether or
not a conference is held depends entirely on the response
of the British Government to the question as to whether
they would participate. This means that the calling of
the conference depends now upon your success in obtaining
British participation.
"The President, as you know, has approved the calling
of a conference at this time. While time is vital, I
think it would be possible to postpone the date of the
conference a week in accordance with your suggestion.
But if we are to proceed with the arrangements the President
has approved, we must have a 'yes' reply without delay.
Because of the tight time schedule, will you please tele-
phone to me as soon as you hear from them.
"I am putting the problem before you in full because
I know you appreciate the wider importance of an affirma-
tive reply from the British Government. We are aware of
the difference of opinion in London with respect to a con-
ference at this time. We wonder, however, whether there
is full appreciation of the implication that might be
drawn by the public from a decision by the British not to
agree to a conference after the prolonged preparations
and the announcement of agreement by the technical experts.
Among a large segment of our people Britain's failure to
agree to a United Nations monetary conference at this time
would engender serious doubt whether the United Nations
can get together on any definite program of postwar economic
VICTORY
BUY
UNITED
STATES
WAR
BONDS
STAMPS
Regraded Unclassified
53
- 2 -
collaboration, and will have an unfortunate impact on the
favorable movement for international cooperation which has
been developing in this country.
"From Secretary Hull. Please inform the Foreign Office
of the substance of this message. Explain to them that I
am in complete agreement with Secretary Morgenthau's mes-
sage and indicate to them the important effect of the British
decision on public opinion in this country."
54
paraphrase OF TELEGRAM RECEIVED
FROM: American Embassy, London
TO:
Becretary of State, Washington
DATED: May 4, 1944
NUMBER: 3640
SECRET
THE FOLLOWING MESSAGE IS MARKED PERSONAL AND SECRET
TO THE SECRETARY AND IS FOR TRANSMISSION TO THE SECRETARY
OF THE TREASURY.
Reference is made herein to the Department's message
of May 3, no. 3545.
I wish to convey my thanks to you for forwarding
Secretary Morgenthau's message to me, which I received
this morning, and for the supporting statement you added
to it. Since that time I have talked with Mr. Eden,
Lord Catto, Lord Keynes, and Sir John Anderson and believe
that progress has already been made. The subject will be
discussed tomorrow by the Dominion Prime Ministers and the
Cabinet and next Wednesday a debate thereon will be held
in the House of Commons, to which the following resolution
will be presented: there follows the substance of this
resolution in paraphrase:
It is considered by this body that a suit-
able foundation for further international consulta-
tion is provided by a statement of principles
contained
Regraded Unclassified
55
&
contained in Command Paper 6519 looking toward the
improvement of monetary cooperation after the war
has ended.
The foregoing information should be treated as confi-
dential since no announcement of the scheduling of this
discussion is being made here.
WINANT
TELEGRAM SENT
56
LEG
This telegram must be
May 3, 1944
paraphrased before being
communicated to anyone
8 p.m.
other than a Government
egency. (BR)
DEPARTMENT OF STATE
U.S. URGENT
ON
OF
MAY 5
AMENBASSY,
MINICATIONS
AND RECORDS
LONDON.
3545
The Secretary of the Treasury has asked mo to
transmit the following message to your
BEGIN QUOTE The Soviet Government has now advised us
of their intention to participate in the conference and
sent a delegation to the United States. Therefore, whether
or not A conference 10 hold depends entirely on the
response of the British Covernment to the question as
to whether they would participate. This means that
the calling of the conference depends now upon your
success in obtaining British participation.
The President, as you know, has approved the calling
of a conference at this time. While time is vital, I
think it would be possible to postpons the date of the
conference a wook in accordance with your suggestion.
But 1f we are to proceed with the arrangements the
President has approved, vo met have a "yes" reply
without delay. Because of the tight time schedule, will
you please telephone to me as soon as you hear from them.
Regraded Unclassified
57
-2- # 3545, May 3, 8 Dollars to wondon.
I 62 putting the problem before you in full because
I lenow you appreciate the wider importance of an affirma-
tive roply from the British Government. We are sware of
the difference of opinion in London with respect to a con-
ference at this time, 1/e wonder, however, whether there
10 full approciation of the implication that might be
drawn by the public from EL decision by the British not to
agree to a conference after the prolonged preparations
and the announcement of agreement by the technical exports.
Among a large segment of our people Britain's feilure to
agree to a United Nations monetary sonference at this time
would engender serious doubt whether the United Nations
oan get together on any definite program of postwar coonomic
collaboration, and will have an unfortunate impact on the
favorable movement for international cooperation which has
bean developing in this country. END QUOTE
Please inform the Foreign Office of the substance of
this massage. Please explain to them that I am in complete
agreement with Secretary Morgenthau's massage and indicate
to them the important effect of the British decision on
public opinion in this country.
FLA:EGC:ja 5/3/44
HULL
(DA)
Regraded Unclassified
58
May 3, 1944
3:50 p.m.
JEWISH EVACUATION
Present: Mr. Pehle
Mr. DuBois
Mr. Luxford
Mrs. Kiotz
H.M. JR: I teil you, this thing will be cleaned up
tomorrow. You both know about the Argentine. If
tomorrow they say, "Well, it is up to you to come and
see Mr. Hull," or if they are going to stall me
definitely, then I will ask for this.
MR. LUXFORD: I think 80.
H.M.JR: I agree with Luxford, if you can tie
these two things up, it won't do either any good.
There is nothing for me to do on this, is there?
(Refers to Recommendations from the Board to the President)
MR. PEHLE: No.
(Mr. DuBois enters the conference)
H.M.JR: You are too late, Joe. Now, if you had
only had Joe here you could have gotten your way. This
way it is too bad.
MR. LUXFORD: We sold you down the river, Joe.
MR. DuBOIS: I will have to do it some other way,
I guess. (Laughter)
H.M.JR: Well then, let's wait, and we will hear
on the Argentinian thing tomorrow. If we don't hear, we
will move forward. Right?
59
- 2 -
MR. DuBOIS: Why are they tied together?
H.M.JR: We don't want to tie them together, but I
am waiting to see Mr. Hull. I said I wanted to clean
up the Argentinian thing first. They said they would
do it Monday, and yesterday he phoned please to wait.
Today he phoned again. He has seen Huil. I gave him
until tomorrow. If we don't get it tomorrow, then we
will go forward on this.
In other words, I want to clean this up before the
President gets back.
MR. DuBOIS: Yes.
H.M.JR: I want to see Hull before the President
comes back.
>
60
May 3, 1944
4:29 p.m.
HMJr:
Oscar.
Oscar
Cox:
Yes, sir.
HMJr:
Do you remember some time ago you spoke to me
about Mr. Stevens over in the Navy Department?
C:
Yeah.
HMJr:
But he was tied up 80 closely with Mr. Knox I
never wanted to do anything.
C:
Yeah.
HMJr:
I wondered if you wanted to make some inquiries
about him.
C:
Yeah.
HMJr:
As to what his future plans are now that Mr.
Knox has passed away.
C:
I know what they are.
HMJr:
What are they?
C:
Well, in the first place, I think, in terms of
dividing up Knox's work, he feels he ought to
stick around and not walk out on it until they
get that organized.
HMJr:
I see.
C:
Secondly, because of his great personal loyalties
to Knox, the likelihood is that he won't stay there
when they pick a new Secretary.
HMJr:
Uh huh.
C:
Thirdly, he has been offered a job to do some
work on the Chicago Daily News in Chicago, which
he's, by no means, sincere about.
HMJr:
Yes.
C:
And thirdly, we're interested in him in F.E.A.
and asked him not to
....
61
- 2 -
HMJr:
That was fourthly -- you got mixed up.
C:
Fourthly, not to make any decision if he could
avoid it until we had a chance to talk to him
in more detail.
HMJr:
Yeah.
C:
So, I should think it would be open season for
you, too, if you're interested.
HMJr:
Oh, I can't come in on it fifthly.
C:
Well, make it Three-A, as far as we're concerned.
HMJr:
No. Well, anyway I just wanted to check with you.
C:
He's a very good man.
HMJr:
Right.
C:
All right.
HMJr:
Thank you.
62
May 3, 1944
Dear Summer:
I have just read your article in
today's New York Herald Tribune, and
I am writing to say thank you for the
nice pat on the back that you gave me.
As you know, a kind word of this sort
comes rarely when one is in office.
with best regards,
Sincerely,
(Signed) Henry
honorable Sumner Welles,
Oxon Hill Manor,
Oxon Hill, Maryland.
Regraded Unclassified
63
Dear Summer:
I read your article in today's Tribune, and I
just wanted to say thank you for the nice pat on
the back that you gave me which, as you know, is
rare while you are in office.
Sincerely yours,
64
NEW
YORK
Herald
Tribune
MAY
3
1944
Welles Sees Churchill Speeches
established between the United
Angdom and the Dominions.
In the face or these discourag-
par. Churchill also said that be
Ing developments the announce-
Pointing Need of Allied Council
had inststed upon the reservation
ment last week by Secretary
to the great principles contained
genthau of the agreement of the
in the fourth article of the At-
experts of all of the United Na-
Inntio Charter by which Grast
tions upon the principles Hirough
Deplores Lack of Post-War Plans for Germany
Britain and the United States
which world currencies will be ata-
and of Agreement on Trade Barriers; Praises
promised all peoples equal access
bilized after the war is especially
to raw materials and to Interna-
heartening. There can. of course,
Morgenthau World Currency Project
tional trade.
be but little trade between nations
Mr. Churchill is. of course, en-
in the post-war world unless Inter-
By Sumner Welles
tirely correct in stating that the
national currency stabilization is
words of that reservation, "with
secured. The chief credit for this
Former Under Secretary of State
due respect for their existing obli-
accomplishment n que to Henry
The statements made by Mr. Churchill on April 19 and on April
gations." were Inserted in the At-
Morgenthau himself. He has for
21, in their Intrinsic interest to the people of
the
United
States,
are
THE
fintic Charter upon his insistence.
many 100g months been tireless in
more important than any political
which the Prime
But he did not mention the fact
expediting the agreement which
eventy
situation sharpens the
Minister has made for & long time
that both Article 4 of the Atlantic
has now been perfected. He has
anxiety
which so mady of us have
Charter and Article VII of the
believed that the way to achieve
past.
felt at the failure & the major
In the former. & reply made in
Lend-Lease Agreement were writ-
practical results in bringing about
powers to create machinery which
the House of Commons to & ques-
ten in order to hold out the hope
a United Nations Organization is
would bring together policy-mak-
tion as to Allied war atons, Mr.
to peoples everywhere that in the
through notions rather, than
ing representatives of all of the
Churchill announced that:
post-war world autarchic trade
through words. He has made It
United Nations in such a manner
"Preliminary exchanges of opin-
systems and stiffing forms of eco-
clear that the propitious moment
as to facilitate and expedite
ion on post-war questions are
nomic discrimination, such as the
to obtain fundamental agree
agreements between them for the
constantly taking place between
Imperial preferences themselves,
ments between the United Na
attainment of those fundamental
various members of the thirty-
would be abolished and that the
tions is before, and not after the
objectives which alone can make
four United Nations."
two governments signing these
victory is won,
He added that he could offer
their common victory & victory for
documents would assume the lead-
lasting peace. It makes the argu-
no hope that "any agreed state-
ership in that endeavor. Unless
ment will be made in the near
ments advanced by spokesmen for
the British government and the
certain officials in our own gov-
United States government co-op-
futa
ernment, when they try to explain
erate in leading the way toward a
Other Allies Left Out
away the need for the establish-
leveling of trade barriers and the
Put into even more blunt lan-
ment of an executive council of
abolition of discriminatory com-
guage than that which the Prime
the United Nations, seem doubly
percial treatment there will be no
Minister cared to employ. this
unconvincing. For every week that
ope of any healthy and expand-
means that discussions of such
passes makes It more plain that
international trade in the
vital problems as the future
without the means for agreement
years after the war.
international organization, the
and for initiative which only such
treatment to be accorded Ger-
Need for Understanding
$ council can provide the condi-
many, and basic European terri-
tions admitted by Mr. Churchill
Mr. Churchill may have In-
torial changes, are still being car-
will persist until
he time available
tended his statement as a bar-
ried on in desultory fashion by
for far-sighted Manning for the
gaining leverage in the event of
the governments of the Soviet
day of victory will have passed.
a recrudescence of Smoot-Haw-
Union, Great Britain and the
Imperial Preference
leyism in the United States. It
United States, and that no agree-
ment in principle has yet been
The second statement made by
may well be feared that such a
pronouncement from him will
reached. It also means that so far
Mr. Churchill was more precise-
strengthen. rather than weaken.
none of the other thirty-one mem-
but equally momentous. In his
the high-tariff forces in this
bers of the United Nations have
speech in the House of Commons
on April 22, while discussing his
country. But the incident, re-
been permitted any real oppor-
plans for knitting the British Em-
gretted by all who are anxious
tunity to take part in such dis-
cussions.
pire more closely together, the
that there should be no cloud
Prime Minister emphasized most
upon the horizon of Anglo-Amer-
No one can foresee what the
forcefully that Article VII of the
ican relations, could not have
coming months may bring forth.
But if, as a result of coming mill-
Lend-Lease Agreement with the
occurred had there already ex-
tary operations, the collapse and
United States-the master agree-
isted some understanding between
surrender of Germany were to be
ment upon which all subsequent,
the United Nations upon the po-
brought about sooner than is gen-
agreements have been modeled
litical and economic principles
erally anticipated. just what Xtod
not commit the Britich gov-
which they will be guided in the
of w political preparation for that
ernment to the sbrogation of the
post-war years.
event would the United Nations
Ottawa agreements through which
then possess?
imperial trade preferences-were
REPUBLIQUE FRANCAISE
5-5- 44 65
COMITE FRANCAIS DE LA LIBERATION NATIONALE Original to me what
Photostatt m Bell
1783 R STREET, N. w.
WASHINGTON 9. D. c.
FRENCH SUPPLY COUNCIL
TELEPHONE DECATUR 7035
No. 106/D.
May 3rd., 1944.
Mr. H. Morgenthau, Jr.,
Secretary of the Treasury,
WASHINGTON, D.C.,
Dear Mr. Secretary:
I wish to acknowledge receipt of your
letter of April 28th., advising ne that the Treasury is prep-
ared to proceed with our order for the printing of an addition-
al 255 million individual franc notes.
I have duly noted the verious remarks
contained in your letter and I wish to take the opportunity
to convey to you my sincere thanks for the cooperation that
you and the Treasury have given us in this difficult matter.
Very truly yours,
66
THE WHITE HOUSE
WASHINGTON
3 May 1944
MEMORANDUM FOR:
The Secretary of the Treasury
The following message from the President was received
in the White House Map Room this date:
"From the President for Secretary Morgenthau.
"Replying to your message of May 2nd, para-
graph 4, please take no action until we have an
opportunity to talk over the problem.
"I am inclined to believe that granting a
loan to Holland on good security in this country
to be used for purchase in America of reconstruct-
ion materials would not establish an undesirable
precedent.
"American industry in the post-war period may
probably need all the foreign orders that can be
safely accepted in order to benefit employment and
dispose of surpluses.
"From information now available to me it
appears that the implied threat can be ignored.
"In view of the above, I should like to have
us both give further consideration to the matter
presented in your message and also talk with State."
Respectfully,
CHESTER C. WOOD,
Captain, U. S. Navy,
Assistant Naval Aide to the President.
67
May 5, 1944
Mr. Ernest Le Olrich,
Washington, D. c.
Sir:
You are hereby appointed an Assistant to the
Secretary in the Procurement Division, with compensation
at the rate of $1.00 per amun, payable from the
appropriation "Federal Property Utilisation Program,
Procurement Division, 1944," effective today.
Very truly yours,
(Wismed) M. Merganthon, h.
Secretary of the Treasury.
Regraded Unclassified
68
VICTORY
TREASURY DEPARTMENT
BUY
WAR
SONDS
PROCUREMENT DIVISION
WASHINGTON 25
THE DIRECTOR
May 3, 1944
M
MEMORANDUM TO THE SECRETARY:
Discussed with Mr. E. L. Olrich the present activities
related to the disposal of surplus property and described
generally the existing organization.
Mr. E. E. Black, Territorial Director of the Office of
Civilian Defense for Hawaii and Mr. Irwin B. Silverman,
Counsel for Division of Territories and Island Possessions,
Department of the Interior, called this afternoon relative
to certain farm equipment purchased by the War Department
and distributed through the Office of Civilian Defense to
the farmers because of a possible emergency food situation,
which equipment the Army has now requested the Office of
Civilian Defense to pay for. The Office of Civilian Defense
in turn have indicated their intention to declare this
property surplus so that it can be sold to the growers.
The point was also made that there will be other
property declared surplus by the Office of Civilian Defense
in fairly substantial quantities which will be of the type
handled by the Procurement Division as the disposal agency.
Mr. Black specifically referred to the equipment purchased
to furnish a 500-bed hospital for emergency purposes which
they are prepared to declare surplus along with the other
similar property acquired for defense purposes, subject,
however, to War Department 80 proval.
Mr. Black stated that he would advise us 8.8 soon as
decisions are reached relative to declaring this property
surplus, and in this connection, referred to the possibility
of other property being declared surplus in the near future
by various Federal agencies located in the Territory of
Hawaii.
Crifton E. Mack
Director of Procurement
69
R
VICTORY
TREASURY department
BUY
VRITED
WAR
PROCUREMENT DIVISION
SONDS
ITAMN
WASHINGTON 25
OF THE DIRECTOR
MEMORANDUM TO THE SECRETARY:
May 3, 1944 Alt
We are having delays with the purchase of textiles
for the Middle East and Australia which may necessitate
requesting WPB compliance orders to obtain all available
goods to be applied to these needs.
The requirements were not furnished sufficiently in
advance to make purchases from current production, but we
have obtained information from the War Production Board
as to existing production and are issuing priority ratings
with orders, and in the event of failure to deliver, we
will then request compliance orders which will enforce
the application of goods not covered by higher ratings
to our orders.
We have sent the Chief of the Purchase Division,
the Commodity Group Chief for Textiles, and his assistant,
to New York City to do all possible in this matter.
Mork
Clifton E: Mack
Director of Procurement
70
May 3, 1944
Dear Mr. Secretary:
I have received your letter of May 1, advising
me that you cannot continue to make available to
the Treasury Department the services of Sergeant
Paul Dudley.
When I wrote you on April 28, what I had in
mind was simply to advise you that Sergeant Dudley
had proved himself extremely useful to the Treasury
Department in preparing radio programs in connection
with the war finance effort and that if he were
available for continued work of similar character
we should like very much to retain his services.
However, I agree completely and emphatically
with the policy you announce of utilizing for
combat service all physically fit men who are
available. I would not for a moment wish to use
the services of Sergeant Dudley on propaganda work,
no matter how great its importance, if it conflicts
with such a policy.
Sincerely yours,
(Wigned) E. Margenthan, Jr.
Secretary of the Treasury
The Honorable Henry L. Stimson
Secretary of War
HEG:ym
war DEPARTMENT
WASHINGTON, D.C.
1 May 1944.
The Honorable
Henry Morgenthau, Jr.,
The Secretary of the Treasury.
Dear Mr. Secretary:
I have been apprized of your desire to utilize the
services of Sergeant Paul Dudley in connection with a radio
program sponsored by the Treasury Department.
The Army is so hard pressed to find men to fill
combat units scheduled for early overseas shi ment that I am
forced to restrict rigidly the many requests which the War
Department is receiving to furnish military personnel for
tasks which can be performed by personnel not in the Army.
If I yield to your request, I will be forced to accede to in-
numerable other pleas for assistance from other Government
agencies. It is with regret that I inform you that the ser-
vices of Sergeant Paul Dudley cannot be made available to the
Treasury Department.
Sincerely yours,
Secretary of War.
CTORY
BUY
NATES
WAR
KINDS
-
RELATE
Regraded Unclassified
72
APR 28 1944
Dear Harry:
The War Department has been most cooperative in making
available to the Treasury Department for the past several
months the services of Sergeent Paul Dudley to assist in the
preparation of broadcasts for our Mar Bond drives. Sergeant
Dudley has exceptional talent in this field, and his con-
tribution has been most valuable.
Our Fifth War Loan drive will commence in June, and I
had hoped to introduce a new radio appreach on bond cales.
In contemplation of this, arrangements had been made for
Sergence Dudley to be assigned to us on a full-time basis
rather than on a part-time basis, and plans are already
under way which will have to be anerificed unless we can
depend upon his assistance.
I have just learned that Bergeant Dudley has been
ordered to report back to his Army station at Tale University,
apparently in accordance with the regular policy of ourtail-
ing outside assignments for service mm. It would be of
instimable help to m and to our easing drive to have the
benefit of his talent until July 1, and if you are able to
grant this request I shall be most grateful.
Sincerely,
(018400) Heary Morgenthan, it.
Henorable Heary L Standard,
Secretary of Mar,
Pantagen Fuilding,
Arlington, Virginia.
CSB:
4-28-44
Regraded Unclassified
5/5/14 73
original to
DEPARTMENT OF THE NAVY
Photostats to mutal
OFFICE OF THE SECRETARY
are smith
WASHINGTON
3 May 1944
Dear Henry:
The attached dispatch on the Fifth War
Loan Drive has been sent today to all Naval Estab-
lishments in the United States. As you will see,
wording similar to that suggested in your letter
of April 25 has been included.
Sincerely yours,
Jame ames Forrestal Fouestal
Acting Secretary of the Navy
Hon. Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D.C.
Regraded Unclassified
74
00R-9
VA
MESSAGE
FJC:JAI
NAVY DEPARTMENT
ADDRESSERS
MESSAGE
ep:
Ext. No. 5145
PRECEDENCE
TO:
From
ACTING SECHAV
CHIFFS OF ALL BUREAUS AND
HFADS OF ALL DIVISIONS AND OFFICES
PRIORITY
cleased by
ACTION
MAVI DEPARTMENT COMMANDANT, U.S.MARINE
CORPS COMMANDANT, U.S. COAST GUARD
ROUTINE
to
3 MAY 1944
COMMANDANT, NAVAL DISTRICTS SEA
FRONTIERS AND RIVER COMMANDS
DEFERRED
Unless classified RESTRICTED this dis-
COMMANDING OFFICERS, MAJOR AND
stch will be classified PLAIN.
MINOR SHORE STATIONS IN CONTIN-
ENTAL UNITED STATES
PRIORITY
If CONFIDENTIAL or SECRET use
recial blank.
INFORMATION
ROUTINE
DEFERRED
dicate by asterisk addressees for which mail delivery is satisfactory.
Onless otherwise designated this dispatch will be transmitted with DEFERRED precedence. Originator fill
date and time for DEFERRED and MAIL delivery. Date
Time
G.C.T.
EXT:
MAILGRAM
TREASURY DEPARTMENT WILL OPEN THE FIFTH NAR LOAN 12 JUNE AND CONTINUE IT
THROUGH 8 JULY I THE IMPENDING DRIVE FOR SIXTEEN BILLION DOLLARS IS LARGER
THAN ANY OF ITS PREDECESSORS AND REQUIRES FVFRY POSSIBLE SUPPORTING EFFORT
so THAT WAR EXPENDITURES, NHICH NOT ARE REACHING A PEAK, MAI BE MITX FULLEST
COOPERATION, IN ANY FEASIBLE MANNER, SHOULD BE CIVEN THE FAR FINANCE DIVISION,
TREASURY DEPARTMENT, BY GRANTING REQUESTS FOR NAVAL PERSONNEL AND MATERIAL
EN THEIR *AR BOND SALES CAMPAIGN.
lis SPACE IS FOR ABSTRACT OF PREVIOUS REFERENCES. IF THIS IS A REPLY,
LE
RENCE NUMBERS OF INCOMING DISPATCH MUST BE SHOWN HERE.
ock copy for File Room. Remove before sending book to Communication Office. (See Art. 51, Navy Department 6
lions, 1988.)
- PROOTING arrica
-
Regraded Unclassified
75
May 3, 1944
My dear Chairman Doughton:
I was very much pleased to receive your
letter of April 27th expressing your appreciation
of the aid rendered by the Treasury's technical
people in the preparation of H. R. 4646.
I want to compliment the Committee on Ways
and Means and you as its Chairman on the excellent
job done by the Committee in the preparation of
this bill, and also to thank you for the fine
consideration shown to the Treasury's representa-
tives during the process of the formulation of the
bill.
I agree with you fully that the friendly and
cooperative spirit manifested in connection with
the preparation of this bill forms an excellent
pattern for future joint efforts which will hold
forth the greatest promise of continued improvement
of the revenue system.
with cordial personal regards, I am
Sincerely yours,
(Wigned) II. Margerthan, "
Secretary of the Treasury
The Honorable R. L. Doughton
Chairman, Committee on Ways and Means
House of Representatives
Washington, D. C.
HEG:pm
mr
sending Pee has copy 3 Cong Doughton's letter
etr to Pres a 1/2
Regraded Unclassified
3:37 P.M.
TO:
5-2-44
76
Mr. Gaston:
Mrs. McHugh brought this in.
Said that the Secretary would
like to have you polish this.
(He would like to have it
back the first thing in the
morning).
ds
FROM: MR. GASTON
77
DRAFT
My dear Chairman Doughton:
It was with great pleasure that I received your letter
of April 27th, and learned that you are pleased with the coopera-
tion between the various technical staffs.
May I compliment the Committee on Ways and Means, and also
the technical staff of your Committee on the spirit of cooperation
which has been shown to the Treasury staff and also on the very
excellent bill which the Committee has just recommended to the
Congress. It is this kind of cooperation between the Ways and
Means Committee, under your excellent leadership, which I feel
leads to a more just and useful tax legislation.
Sincerely yours,
Regraded Unclassified
78
5/3/44
0
Photostats to: Mr. Blough
Mr. Surrey
79
SEVENTY-EIGHTH CONGRESE
ROBERT L DOUGHTON, M. c., CHAIRMAN
DMAR H. CULLEN, N. Y.
ALLEN Y. TREADWAY, MASS.
COOPER. TENN.
HAROLD KNUTSON, MINNIN.
LEY E. DISNEY, CKLA.
DANIEL A. REED, N. Y,
ROY o. WOODRUFF, MICH,
COMMITTEE ON WAYS AND MEANS
D. DONGELL, MICH.
VILUS ROBERTION, VA.
THOMAS A. JENKING, CHIO
TON H. WENT, TEX,
DONALD H. MC LEAN. N. J.
LAW D. MILLS. ARK.
BERTRAND w. GEARMANT, CALIF,
HOUSE OF REPRESENTATIVES
at & GREGORY. KY.
FRANK CARLSON, KANS,
MONEY CAMP, GA.
RICHARD M. SIMPSON, PA.
CHARLES a. DEWEY, ILL
WASHINGTON, D. C.
LTER A. LYNCH, N. %
4. FORAND, a L
- F. WASHELEWSKI, will
M. MALONEY, LA.
BMAN P, EBERHARTER, PA
c. MALOOLM HEVENOR. CLERK
April 27, 1944
Honorable Henry Morgenthau, Jr.,
Secretary of the Treasury
Treasury Department
Washington, D. C.
Dear Mr. Secretary:
May I extend to you and to your staff my appreciation
for their sincere and helpful aid in the preparation of H.R. 4646,
the Individual Income Tax Simplification Bill recently reported
by the Committee on Ways and Means. I think the results of our
deliberations on this bill show how much can be accomplished by
having our staff and the Treasury staff, including the staff of
the Bureau of Internal Revenue, work together in the formulation
of suggestions to be presented to our committee. Through their
joint efforts, the greatest good can be accomplished in assisting
our committee in formulating tax legislation. I am more than
gratified with the way in which your staff cooperated with our
staff in the preparation of this legislation.
Now that we have seen the results which can be accom-
plished through such cooperation, I hope we shall be able to have
it continued im connection with future revenue bills.
We have the utmost confidence that this joint effort and
cooperation of all members of the committee, and those who have
aided them in its preparation, has resulted in a bill that pro-
vides simplification that will lessen the difficulties of making
income tax returns and strengthen our income tax system.
Cordially yours,
R. E. Doughton,
CHAIRMAN
80
LIBRARY OF CONGRESS
WASHINGTON
OFFICE OF THE LIBRARIAN
May 3, 1944
ky dear Mr. Korgenthau:
The Provident Trust Company has submitted
offers for two pieces of property owned by the Library
of Congress Trust Fund Board. The first offer is
$4,500 for the property at 1262 North Frazier Street,
Philadelphis, The second is $2,800 for the property
at 702 Ritner Street, Philadelphia.
Both offers have been considered by the
Under Secretary of the Treasury who favors the sale
in accordance with the pending proposals. I recommend
acceptance of the offers.
Faithfully yours,
known marker
Archibald MacLeish
The Librarian of Congress
I vote (in favor of) acceptance of the offer.
)
The Honorable
DWB
Minuthanp
Henry Morgenthau, Jr.
Chairman, Library of Congress Trust Fund Board
Secretary of the Treasury
Washington 25, D.C.
81
MFG-527
Algiers
This telegram must bE
paraphrased before being
Dated May 3, 1944
communicated to anyone
other than a Governmental
Rec'd 7:35 p.m.
agency (SCOO)
DEPARTMENT OF STATE
Storetary of State,
DIVISION OF
Washington.
MAY & 1944
COMMUNICATIONS
1449, May 3, 9 p.m.
1:0 RECORDS
FOR MORGENTHAU FROM SAXON.
Mendes-France EXPECTS depart Friday.
CHAPIN
WHB
EEC
82
PARAPHRASE or TELEGRAM RECEIVED
FROM:
American Missions Algiers
TO:
Secretary of State, Washington
DATED:
% 3, 1944
NUMBERS 1450
CONFIDENTIAL
FROM ACKEHMAN FOR ATTENTION OF WRB.
No. 17.
In commestion with the rescue of Hungarian
refugees, MacVeagh in Cairo reports that information has
been received fres the British Embassy indicating that
Marshal Tito has promised support. Tito will assist them
to join this forces or to be evacuated when possible.
The help that Tite can furnish partly depends upon
the assistance & ven him is by opinion.
In order to get more information on shipping and
related problems I will leave for Italy on the advice of
Kallech as seen as arrangements are completed. While
there will also fellow up Tito proposal.
Since reception facilities in Italy are again be
coming overtaxed the Army here is issuing a directive
prohibiting temporarily the transport by Allied vessels of
Tugeslav refugees. The directive will slow up the refugee
flov, but 10 will not be stepped. Arrangement. of addre
tional evacuation areas in France or British North Africa
will depend on whether the Aray restriction will be
relaxed. An immediate effort will be made to arrange
such additional areas.
CHAPIN
Regraded Unclassified
83
PARAPHRASE OF TELEGRAM RECEIVED
FROM
: American Mission, Algiers
TO
: Secretary of State, Washington
DATED : May 3, 1944
NUMBER : 1453
CONFIDENTIAL
FOLLOWING IS NO. 16 FROM ACKERMAN FOR WRB.
The question of admission of additional Sephardic
Jews had already been informally discussed by me with
a member of Comite prior to the arrival of your Algiers
no. 5, dated April 25, 1944. Beckelman talked with
Massigli after your cable arrived and Massigli replied
that there would be no change in the original agreement
providing for admission ar 2000. This has been confirmed
by us by note and we asked for reply to make the under-
standing certain and definite.
Taking request to the French regarding admission
of about 750 Jews now in Italy to Fedhala is being
considered by AFHQ. I am requesting Robert Murphy and
others concerned to consider relative priorities of further
Sephardic Jews as the group in Italy plus refugees arriving
soon from Spain will practically fill the quota. Please
inform us how many more Sephardics might be rescued from
occupied territory, if it is possible to do 80. In order
that Schwartz
Regraded Unclassified
84
that Schwartz can inform us as to his information on the
question, we have repeated the foregoing message to
Lisbon as our cable no. 97.
CHAPIN
85
CABLE TO AMERICAN EMBASSY, LONDON
The Var Refugee Board requests that you deliver the
following message to Albert Cohen, World Jewish Congress,
55 New Cavendish Street, London, England:
QUOTE Most anxious receive urgently detailed report
your conferences Spaak Dents and other officials concerning
resoue Belgian and Dutch Jews, what agreement reached, what
instructions sent, what contact people appointed, Also
what latest suggestion made by Boris. World Jewish Congress
Leon Hubowitski UNQUOTE
May 3, 1944
4:40 P.M.
cc: Mess
Regraded Unclassified
86
CABLE TO AMERICAN EMBASSY, LONDON
This is WRB Cable to London No.
.
Refer to your 12822
of December 18, 1943, 1708 of March 2, and 3033 of April 14, 1944.
The Department and the War Refugee Board have been apprised by
Minister Harrison at Bern that the Vatican had attempted to work out
relief measures for Polish and other European Jews in German-controlled
territory who hold Latin American documents but who face deportation
and death owing to the lack of confirmation of these documents by
the countries in whose name they were issued. Cuba is reported to
have replied to the Vatican that passports issued in the name of Cuba
to Jews in German-controlled territory would be recognized by Cuba
if no (repeat no) objection is made by Great Britain and the United
States.
Ambassador Braden in Habana has been instructed to convey to the
Cuban Authorities the Department's appreciation of Cuban attitude and
the assurance that the United States has no (repeat no) objection to
Cuban recognition of such documents. Please approach the appropriate
officials of Foreign Office with the request that it give a similar
assurance to Cuba.
For your confidential information, this Government is asking all
Latin American countries concerned for their consent to the United
States initiating through proper channels negotiations with Germany
for an exchange of nationals on a hemispheric basis for which refugees
holding Latin American passports would be eligible. Assurances have
been given to the countries concerned that in event of exchange they
would not (repeat not) be expected to grant physical admission to
persons involved but that such persons would be routed elsewhere.
Among the Latin American countries approached, Honduras and Venezuela
have already acceded to all our requests in this matter.
May 3, 1944
12:15 a.m.
BAksin:LSLesser:als 5/1/44
87
SECRET BY COURIER
Regraded Unclassifi
A-738
May 3, 1944
2:00 p.m.
SENT BY SECRET AIRGRAM
AMERICAN MISSION,
HABANA (CUBA).
FOR THE PERSONAL AND CONFIDENTIAL INFORMATION OF THE AMBASSADOR
Reference is made to your 6149 of March 1. Department has been
apprised that Papal Nuncio at Bern informed Minister Harrison that
Vatican had attempted to work out relief measures for Jews in
German-held territory who face imminent danger of deportation to
Poland and death. It is understood that some of these Jews have
been found, or may be found, to hold passporte or consular documents
issued in the name of Latin American republics. Where such documents
have been given recognition by country in whose name they were issued,
they have in the past afforded some protection to the persons holding
them.
In view of this Government's policy with respect to victims of
enemy oppression, the Department has been particularly gratified to
learn from the Bern report that when approached by the Vatican, Cube
replied that passports issued in her name to Jewe in German-held
territory, would be recognised by Cuba if Great Britain and the
United States have no objection.
Please verify abova information. If correct, please convey to
to Cuban authorities the Department's appreciation of Cuban
attitude and the assurance that the United States has no objection
to Cuban recognition of such documents.
Department understands that, in approaching Cube, Vatican
raised the question of eventual immigration as result of possible
exchange in addition to the question d recognition of documents.
It is not clear what position Cuba took on this point. Please
ascertain Cuba's attitude. If Cube is not agreeable to the admis-
sion of such persons holding Cuban documents, please emphasise that
Department's request with respect to opening discussions concerning
exchange does not involve immigration but, on the contrary, contains
assurances that Cuba will not be expected to admit persons concerned
even on a temporary basis. At any rate, we hope that Cuba, in the
interests of humanity, will postpone until after the war any question-
ing of said documents, and in the meantime, request Germany through
the protecting power to accord holders of documents issued in Cuba's
name the name treatment that Germany hopes will be received by her
88
Habana A-738
&
nationals in the Western Hemisphere, and will also agree to the per-
sons concerned being considered exchange material for German
nationals held in this hemisphere provided such holders of Cuban
passporte are sent to havens elsewhere than in Cuba,
To acquaint you fully with this Government's attitude in this
matter, circular airgrams of March 31, 1:05 p.m., of April 11,
11:00 a.m., and of April 22, 7:30 p.m. which have been sent to
various Latin American republics, are being repeated to you, by
separate circular airgram, and you are requested to urge Cuban
authorities to act accordingly in connection with Jews and other
Nasi victims in German-controlled territory who have been found,
or may be found, to hold documents issued in the name of Cuba.
In the light of the above assurances, please impress upon the
Cuban government the extreme urgency with which this Government
views the necessity of acting favorably without delay on these pro-
posals. You should impress upon Cuben officials that failure to
act would almost certainly spell death for the persons involved.
If appropriate, you may add that since no responsibility to receive
the people concerned would result for Cuba from acquiescence in our
requests, we would be soraly disappointed if Cuban authorities should
not whole-heartedly cooperate with our efforts to save these people.
Please advise Department of the result of our efforts.
HULL
WRB:GLN:KG
89
AIRGRAM
(American Embassy)
FROM (San Salvador, E1 Salvador
DATED May 3, 1944
REC'D May 5 1pm
Secretary of State
Washington
A-184, May 3.
The Peruvian Charde d'Affaires has informed me that he
has now received a note from the Salvadoran Minister for
Foreign Affairs stating that five of the persons to whom he
had granted asylum and against whom no serious charges have
been preferred may return to their homes without fear of
molestation. The remaining three refugees, upon two of
whom death sentences have been pronounced, will be granted
safe conduct to proceed to Peru.
It is my understanding that the two refugees harbored
in the Costa Rican Legation are also to be permitted to
leave the country under safe conduct.
It is probably that the same procedure will Madopted
with respect to the refugees sheltered in the Guatemalan and
other diplomatic missions.
Repeated to American Embassies at Guatemala City,
Tegucigalpa, Managua, and San Jose, and Lima.
THURSTON
800
ST/mgm
Regraded Unclassified
90
SECRET
VIA COURIER
AIRGRAM
FROM American Mabassy
SECRET
San Salvador, El Salvador
DATED May 3, 1944
HEC'D May 10 llan
Secretary of State
Washington.
A-186, May 3.
The Salvadoran Minister for Foreign Affairs advised
me this morning with respect to your secret airgram of
April 22, 7:30 p.m. (received May 2) that immediately
following our interview on April 15 (airgram no. A-164,
April 18), he had addressed a note to the Spanish Minister
in this city along the lines of my suggestions based on the
Department's secret airgram of a few days before. He
assured me that the Spanish Minister had acknowledged the
receipt of this note and it is to be presumed that he
duly informed Madrid.
THURSTON
711
WT/mgm
91
SECRET by Courier
AIRGRAM
From: Port-au-Prince, Haiti
Date: May 3, 11 a.m., 1944
Rec'd. May 6 a am
The Secretary of State,
Washington.
A-244, May 3, 11 a.m., 1944.
Department's circular April 22, 1944, 7:30 p.m.
Minister for Foreign Affairs now states that his
Government has in final analysis been reluctant to take
positive steps suggested through protecting power. He
ascribes reason to ignorance as to whether any Haitian
passports may be produced for recognition of validity
by refugees concerned. If no such passports are pro-
duced, Foreign Minister states that gratuitous blanket
statement of recognition at this time might later prove
prejudicial to bona fide cases. He has constantly
maintained negative position, however, of being willing
to acknowledge validity if question is raised in specific
cases. No requests of this nature have been currently
received.
CHAPIN
VC/let
Regraded Unclassified
92
AIRGRAM
FROM
Tangier, Morocco
DATED May 3, 1944
KEC'D May 154p.m.
Secretary of State,
Washington.
4-76, May 3, 6 p.m.
Department's telegram No. 47 of April 14, 1944, 8 pollo
and Legation's despatch No. 2042 of April 10 concerning shipment
of feed parcels to internment camps in Czechoslevakia.
Mrs. Benee Reichmann had already arranged with Mr. Mordecai
Kessler of the American Joint Distribution Committee at present in
Tangier. for the list of recipients to be submitted to Dr. Joseph
Schwarts in Lisban for checking against the list held by his in
order to avoid duplication. she is also bringing a copy of the
list to the Legation.
RICK
840.1
PRG/ pas
Regraded Unclassified
93
CARLE TO LISBON
From War Refugee Board to Norweb for Dexter
Reference your WEB 8 of April 26.
Please deliver following mesage to Philip Consed from
the American Friends Service Committee:
"Clarifying our position various projects affecting
French relief Step Stress urgency prOmpt shipment food
supplies from Portugal recently licensed for children in
France Stop Inadquately informed details project bring
French children temporarily Portugal Stop Considering
grave plight reguges children France believe other groups
projects to resous these children take procedence over
temporary care French children Portugal"
THIS IS WEB LISBON CABLE NO. 11
May 3, 1944
3:12 p.m.
Fililab 5/2/44
94
CABLE TO LISBON
Please deliver the following message to Minister Norweb, Lisbon,
for Dexter, War Refugee Board Representative, from J. W. Pehle
Following discussions with Mr. Joy, and in the interest of simplifying
accounting, arrangements have been made for the Embassy to pay you
full-time salary of sixty-five hundred dollars per annum effective as
of date you entered on duty as War Refugee Board Special Attache.
Unitarian Service Committee has granted you indefinite leave of absence
for this purpose and we assume you have no objection to this arrangement.
THIS IS WRB LISBON CABLE NO. 12
May 3, 1944
4:15 p.m.
WStewart; pdk 5/2/44
Regraded Unclassified
95
RECT-428
Lisbon
This telegram must be
paraphrased before being
Dated May 3, 1944
communicated to anyone
other than a Government
Rec'd 3:30 p.7.
Agency. (BR)
Secretary of State,
Washington.
1335, May 3, 5 p.m.
WRB 17:
Reference Department's 1223, April 29 . No
information available re person mentioned. If
further clarification sent might uncover something.
NORWED
WSB
MRM
oc:Miss Chauncey (For the Sec'y), Abrahamson, Aksin, Bernstein,
Cohn, DuBois, Firedman, Gaston, Hodel, Laughlin, Luxford, Mann,
Mannon, Marks, McCormack, Paul, Pehle, Pollak, Rains, Sargoy,
Smith, Standish, Weinstein, H. D. White, Files.
Regraded Unclassified
96
BJR-528
Lisbon
This telegram must be
paraphrased before being
Dated May 3, 1944
communicated to anyone
other than a Governmental
Rec'd 7:10 P.M.
agency. (scoo)
Secretary of State,
Washington.
1341, May 3, 7 p.m.
FOR SECRETARY OF TREASURY FROM WOOD
War Refugee Board has no facilities of its own
to make disbursements of pesetas in Spain. Office of
Financial Attabhe has taken steps to effect payment
25,000 pesetas in Spain but does not desire conduct
other such transactions without approval of Washington.
Please inform Pehle of foregoing and advise me of how
Board is arranging for financing and paying in Spain.
NORWEB
EDA
WMB
Miss Chauncey (for the Sec'y) Abrahamson, Aksin, Bernstein, Cohn,
DuBois, Friedman, Gaston, Hodel, Laughlin, Lesser, Luxford, Mann,
Mannon, Marks, McCormack, Pehle, Pollak, Rains, Sargoy, Smith,
Standish, Weinstein, H. D. White, Files
97
DSH-860
Madrid
This telegram must be
paraphrased before being
Dated May 3, 1944
communicated to anyone
other than a Government
Rec'd 5:54 p.m. 4th.
Agency. (sc-oo)
Secretary of State,
Washington.
1532, May 3, midnight
In accordance with instruction Department's 1008,
April 12, Embassy herewith returns as unused one third of
block quota numbers allotted for refugee children.
Following inclusive numbers returned: German 3505 to 3704,
Polish 1798 to 1847, Belgian 243 to 252, Netherlands 485
to 511, Czech 541 to 560, French 459 to 485,
HAYES
EEC
EDA
98
BJR-531
Stockholm
This telegram must be
paraphrased before being
Dated May 3, 1944
communicated to anyone
other than a Governmental
Rec'd 7:51 p.m.
agency. (scoo)
Secretary of State,
Washington.
1565, May 3, 7 p.m.
Following telegram has been sent American Embassy
at Ankara.
2, May 3, 7 p.m.
FOR WAR REFUGEE BOARD ATTACHE
Legation is informed that Kalman (repeat Kalman)
Gelber (repeat Gelber) with wife, small child and father
are presently in Bucharest to which they were evacuated
with aid of Swedish Legation.
Group has Swedish passport, Rumanian exit visa,
Bulgarian trensit visa and Palestine immigration cer-
tificates. However group has been unable to secure
Turkish trensit visa.
My 1565, May 3, 7 p.m. to Department repeats this.
Please endeavor on urgent basis to secure necessary
Turkish transit visas and have authority cabled to
Turkish mission in Bucharest. Upon arrival of group
in Turkey it will then be possible for them to pick up
immigration certificates, which Jewish Agency has issued,
and to have their Palestine visas stamped in passports.
This procedure is not possible in Rumania because
Palestine visa is stamped by British Consul.
JOHNSON
WSB
REP
99
CABLE TO AMERICAN EMBASSY, BERN
The War Refugee Board requests that you deliver
the following message to Gerhard Riegner, 37 Quai Wilson,
Geneva, Switzerland.
QUOTE Easterman and Rubenstein cable re Vittel
that they have been in close contact with Red Cross who
have reassured them concerning pàsition which they are
carefully watching. Please contact Red Cross and forward
all information available. World Jewish Congress
Leon Kubowitski UNQUOTE
THIS IS WRB CABLE TO BERN NO. 14
MAY 3, 1944
4:40 p.m.
BAKzin:jp
5/2/44
100
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
The American Minister, Born
TO:
The Secretary of State, Washington
DATE:
May 3, 1944
NUMBER: 2798
Secret
The following masage is from Sternbuch and refers to
number 1174 dated April 6 from the Department.
For two months Mueller was a member of our committee and
for private matters he misused his position. & short time
age be resigned in accordance with our vishes. Weil was re-
quested by us to direct OPR French relief work in March and
be displays such interest in cooperating although he is very
busy with work for children. Due to illness he was not able
to accept our appointment but we will do all we can to obsain
his cooporation and ve hope to ... him very soon. Very soon
we hope to give you further news.
HARRISON
DORIMPL
5/5/44
Regraded Unclassified
101
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
American Legation, Bern
TO:
Secretary of State, Washington
DATED:
May 3, 1944
NUMBER: 2799
CONFIDENTIAL
Reference By cable of April 19 no. 2467.
It is stated by Sternbuch that he has received from
Shanghai a telegram signed by Ssmulewicz, as follows:
Arrangement fifty Rabbie temporarily very diffi-
cult Rosenheim's support urgent aivance two months
save.
A request is made by Sternbuch that the Union of
Orthodox Rabbis be advised of the foregoing.
HARRISON
Regraded Unclassified
102
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
AMLEGATION, BERN,
TO:
Secretary of State, Washington,
DATED: May 3, 1944.
NUMBER: 2800
CONFIDENTIAL
Department's telegram of April 22, 1944, no. 1402
is referred to herewith.
Given below is the substance of cable sent to
Lisbon on May 3, 1944 as no. 103.
Following for WRB's attention.
David P. Joffo, expected at Palace Hotel,
Lisbon, May 3, may be informed by you that Islambek
Khan has been contacted by Bern and Joffo's message
was delivered.
HARRISON
Regraded Inclassified
103
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
AMLEGATION, BERN
TO:
SECRETARY OF STATE, WASHINGTON
DATED:
MAY 3, 1944
NUMBER: 2803
CONFIDENTIAL
My cable of May 2, 1944, no. 2793 was crossed by the
Department's telegram dated May 1, 1944, no. 1508.
Notification of approval of the entire list of medical
supplies and foodstuffs in question is being given to IRC
today by the Legation.
The foregoing was repeated 88 my no. 738 to London for
the information of our Embassy there.
HARRISON
DOR:IDB:JTM
5/5/44
Regraded Unclassified
104
PARAPHRASE OF TELEGRAM RECEIVED
FROM :
The American Minister, Bern
TO
:
The Secretary of State, Washington
DATE:
May 3, 1944
NUMBER: 2810
SECRET
In order to clarify the situation the possibility was
discussed by me with Minister Bonna of obtaining permission
for children to come to Switzerland. (Refers to your number
1459, WRB number 5, dated April 27.) According to Minister
Bonna, it was his understanding that in approaching the French,
Minister Stucki had attempted to secure general permission for
the children to depart from France and had not restricted the
request to exit permits for Spain only. Permission to come
to Switzerland would have been included if this were true.
Nevertheless, in order to be sure, Minister Bonna said he would
inquire of Stucki who last week departed for Vichy. Children
have been denied permission to come to Switzerland for a
temporary sojourn (rehabilitation) for some time now, accord-
ing to Minister Bonna.
Developments will be reported.
HARRISON
DCR:MPL
5/5/44
Regraded Unclassified
105
PARAPHRASE OF TELEGRAM RECEIVED
FROM: AMLEGATION, Bern
TO:
Secretary of State, Wasnington,
DATED: May 3, 1944
NUMBER: 2814
CONFIDENTIAL
Reference is made herewith to your telegram
of April 29, 1944, no. 1503.
On April 14, we took up with the Foreign
Office in person and in writing the subject matter
of the Department's telegram dated April 10, 1944,
no. 1221.
HARRISON
106
TREASURY DEPARTMENT
All
INTER OFFICE COMMUNICATION
DATE MAY 3 1944
Secretary Morgenthau
TO
Mr. Pehle
FROM
We have Just been advised that the "S.S. Milka"
arrived again in Istanbul on April 30th carrying 272
refugees from Constanza. This is the second voyage
for the "S.S. Milka,' which carried 239 refugees on its
first trip early in April. The "Milka" is one of three
small vessels which have recently been put in use for
Black Sea evacuations. The "S.S. Maritza" arrived in
Istanbul on April 10th with 244 refugees and the "S.S.
Bellacitta" arrived in Istanbul on April 24th with 152
refugees.
During the month of April a total of 907
refugees were evacuated from Constanza to Turkey on these
three small boats. All of the rescued people have been
permitted transit through Turkey to Palestine.
We are still awaiting German safe-conduct for
the "S.S. Tari" which we are advised will accommodate
1500 refugees.
Regraded Unclassified
107
CARLE TO AMBASSADOR STEINHARDT, ANKARA, TURKEY FROM WAR REFUGEE BOARD
Please refer to your No. 725 of April 32 and our No. 377 of April 27 concerning
the delay being ascountered in obtaining a German safe conduct for the voyage of the
BS TARI from Congtansa to Haifa.
In view of the urgency of the matter ve have been attemtping to canvase all
possiblities for breaking this impasse and putting the TARI into immediate service.
In view of the suggestion made in your No. 725 that the Germans might grant a safe
conduct for the TARI more rapidly if the voyage were to terminate at a Turkish port
rather than at Haifa, we have discussed with Mr. Austrian of yea the question of
railroad facilities in Turkey. Mr. Austrian has given us an additional description
of the many effective measures which you have taken in aiding the rescue of refugees,
and in particular has mentioned your successful efforts to have the Turkish Government
make available additional railread facilities for the transportation of refugees
through Turkey.
Mr. Austrian feels strongly that under existing circumstances railroad facilities
Turkey are sufficient to enable the transportation across the ountry from Istanbul
of many more refugees than are presently being accomodated. This possibility was, of
course, suggested in your No. 713 of April 19. As Mr. Austrian views the situation,
the question is simply whether or not the Turkish Government is disposed to make
these additional facilities available. Mr. Austrian's appraisal of the transportation
situation apparently is based not only on the probability that rail traffic between
Turkey and other European countries is likely to decrease, but also on the view that
existing equipment is sufficient oven if this traffic does not decrease as anticipated.
With particular reference to the case of the TARI we are inclined to believe that
if the urgency of the matter is presented to the Turkish Government it may well agree
to have the TARI unload its passengers at Istanbul from whence they could be taken by
rail to Palestine. If it were not possible to take all of the evacuees in a special
train the Turkish Government could be requested to add additional care to the regular
trains until all the refugees are transported. In the latter case the refugees could
remain on the boat until transported by raile If the agreement of the Turkish
Government can be obrained for this arrangement you would then be in a position to
have the TARI souted to Istanbul, and the Germans could b requested to grant a safe
conduct on this basis.
We are aware of the fact that your knowledge of the railroad situation in Turkey
is such greater than ours. However, ve do feel strongly that the above mentioned
possibility of obtaining promptly the use of the ss TARI should not be neglected.
Ve are confident that you will take all possible steps to obtain from the Turks
additional rail transport facilities.
This is VRB Cable to Ankara No. 33 .
May 3g 1944
4:40 p.m.
JBFsbbk. 5/3/44
Regraded Unclassified
108
ORIGINAL TEXT OF TELEGRAMSENT
FROM:
Secretary of State,
TO:
AMEMBASSY, Ankara,
DATED: May 3, 1944.
NUMBER: 388
SECRET
FROM WAR REFUGEE BOARD TO STEINHARDT
Please refer to your no. 725 of April 22 and
our no. 377 of April 27, concerning the delay being
encountered in obtaining a German safe conduct for
the voyage of the SS TARI from Constanza to Haifa.
In view of the urgency of the matter we have
been attempting tocanvass all possibilities for
breaking this impasse and putting the TARI into
immediate service. In view of the suggestion made
in your no. 725 that the Germans might grant a safe
conduct for the TARI more rapidly if the voyage were
to terminate at a Turkish port rather than at Haifa,
we have discussed with Mr. Austrian of FEA the
question of railroad facilities in Turkey. Mr.
Austrian has given us an additional description of
the many effective measures which you have taken ins
aiding the rescue of refugees, and in particular has
mentioned your successful efforts to have the
Turkish Government make available additional rail-
road facilities for the transportation of refugees
through Turkey.
Mr. Austrian feels strongly that under existing
circumstances railroad facilities in Turkey are
sufficient to enable the transportation Across the
country from Istanbul of many more refugees than are
presently being accomodated. This possibility was,
of course, suggested in your no. 713 of April 10.
As Mr. Austrian views the situation, the question is
simply whether or not the Turkish Government is
disposed to make these additional facilities available.
Mr. Austrian's appraisal of the transportation
situation apparently is based not only on the proba-
bility that rail traffic between Turkey and other
European countries is likely to decrease, but also
on the view that existing equipment is sufficient
even if this traffic does not decréase as anticipat-
ed.
With particular reference to the case of the
TARI we are inclined to velieve that if the urgency
Regraded Unclassified
109
of the matter is presented to the Turkish Govern-
ment it my well agree to have the TARI unload its
passengers at Istanbul from whence they could be
taken by rail to Palestine. If it were not possible
to take all of the evacuees in a special train the
Turkish Government could be requested to add addit-
ional cars to the regular trains until all the refugees
are transported. In the latter case the refugees
could remain on the boat until transported by rail.
If the agreement of the Turkish Government can be
obtained for this arrangement you would then be in
a position to have the TARI routed to Istanbul, and
the Germans sould be requested to grant a safe
conduct on this basis.
We are aware of the fact that your knowledge
of the railroad situation in Turkey is much greater
than ours. However, we do feel strongly that the
above mentioned possibility of obtaining promptly
the use of the SS TARI should not be neglected.
We are confident that you will take all possible
steps to obtain fromthe Turks additional rail trans-
port facilities.
This is WRB Cable to Ankara no. 33.
HULL
Regraded Unclassified
110
NOT TO BE RE-TRANSMITTED
COPY NO.
SECRET
OPTEL No. 142
Information received up to 10 A.M., 3rd May, 19/2.
1. BILITARY
ITALY. Bridgehead. On 1st U.S. special troops in
battalion strength raided objectives southwest of LITTORIA and
three miles forward of our lines. Objectives found evacuated
and all troops returned. Two tanks and a tank retriever ran
into mines.
On 2nd in British sector strong German raid across
the HOLETTA was repulsed, but an attack further west penotrated
our positions which were later restored by local counter attacks.
2. AIR OPERATIONS
WESTERN FRONT. 1st/2nd. Total 1,597 tons dropped
on railway objectives and 1,146 tons on other objectives as
follows:
ST. GHISLAIN
546 tons H.E.
MALINES
525 tons H.E.
CHAMBLY
526 tons H.E.
LUON-BERLIET Works
351 tons H.Z.
Crews reported seeing fires still burning at MAINTENON ammuni-
tion dutip.
TOULOUSE Aircraft assembly plant 264 cons H.E.
TOULOUSE Explosive Works
250 tons H.F. and
26 incendiary
YOURS Aircraft Repair Works
187 tons H.E. and
35 incendiary
2nd. 687 aircraft - 3 missing - dropped total
550 tons and fired 535 rocket projectiles on Goods Yards and
numerous other transport targets in Northern France. Escorted
Liberators dropped 176 tons on military constructions. In
attacks on airfields enemy casualties air and ground 15, 1, 2.
Ours - one fighter missing.
2nd/3rd. Aircraft despatched:
leverkusen
29 Rosquitoes
Sea-mining
10
Intrudors, etc.
12
6 enery aircraft destroyed. ,11 aircraft returned safely.
ITALY. 30th. bombers dropped 277 tons on
bridges in Central Italy and PLORINCE rea and 215 light and
fighter bombers attacked contunications etc.
Regraded Unclassified
cc-Fred Smith
111
May 4, 1944
9:55 a.m.
Operator:
Go ahead.
HMJr:
Hello.
James
Barnes:
Good morning, sir.
HMJr:
Good morning. Who is this?
B:
This is Barnes.
HMJr:
Oh.
B:
How are you, sir?
HMJr:
I'm all right.
B:
I had breakfast this morning with Governor
Bob Kerr of Oklahoma.
HMJr:
Yes.
B:
And he asked me to get in touch with you.
You are going to be, as I understand it, on
June 12th in Texarkana to launch a War Bond
Drive.
HMJr:
That's right.
B:
He advises me that on June 9th, 10th and 11th
the Army 18 going to put on a huge free demon-
stration in Taft Stadium in Oklahoma City.
HMJr:
Yeah.
B:
Of which fifteen hundred soldiers and many
war planes and so forth will be there.
HMJr:
Yeah.
B:
They say they have never had a top-ranking
individual come for any of their War Bond
Drives and they wondered if one of those
three dates, it would be possible, as long
as you're going to be in that area, for you
to be in Oklahoma City.
HMJr:
Now, look, tell me this again will you please?
I didn't quite -- when are they having their
show?
Regraded Unclassified
- 2 -
112
B:
They are having an Air Show.
HMJr:
Yes.
B:
Bob Patterson has got the Army to put on an
air demonstration and soldier show in the Taft
Stadium in Oklahoma City.
HMJr:
Right.
B:
And the show is going to take place for three
days.
HMJr:
I see.
B:
The 9th, 10th and 11th.
HMJr:
Oh, yeah.
B:
And they'd like to embody that in a War Bond
Drive.
HMJr:
I see.
B:
And as long as you're going to be in Texarkana
the 12th, they'll be glad to fly you up from
Oklahoma City to Texarkana if you want to come
there. And they'd like very, very much -- they
say Oklahoma has never had anyone outside of
their State to come and make a presentation and
to be there and they very, very much want you to
come if possible.
HMJr:
Well, now, let me tell you something. I was
going to go originally to Texarkana the night
of the 11th.
B:
Yes.
HMJr:
And then they told me there that it was a mistake
to come there on a Sunday that that was a
Bible Belt and we'd better not do anything there
Sunday.
B:
But Governor Kerr
HMJr:
Yeah.
B:
who is in town now.
HMJr:
Yeah.
113
- 3 -
B:
....and I had breakfast with -- says that if
the 11th 1s satisfactory with you, the 11th
would be fine for them.
HMJr:
They don't read the Bible quite 80 assiduously
in Oklahoma?
B:
I can't under -- I don't know that.
HMJr:
(Laughs) Well, look, in the first place, may
I thank them for the compliment that they want
me? That's number one. And humber two: Ted
Gamble will be back Saturday or Sunday
B:
Yes.
HMJr:
who is in charge of the thing, and I will
talk it over with him. I am seeing him on
Sunday. And will it be time enough if I let
you know Monday?
B:
That will be fine. And I would like to see you
do it. Bob Kerr is a great friend of ours.
HMJr:
Right.
B:
And you know that election that they put over
down there
HMJr:
It was wonderful.
B:
swung the tide, I think, psychologically, and
helped down in Alabama and Florida, too.
HMJr:
Well, if I can do it, and it fits in, as I say,
it would be something that I'd like to do. But
I just don't know what Gamble has in mind for
me other than that one thing.
B:
Well, that will be grand. If you'll let me know
Monday, I can get word to them. That will be
fine.
HMJr:
Whatever I do, I'll do through you.
B:
Thank you -- well, it don't make any difference
about that.
HMJr:
No, well, I'll be glad to.
- 4 -
114
B:
Yes, sir.
HMJr:
And what did you hear about Florida? Is Pepper
across?
B:
Well, the last word I had -- I talked to Brown,
his secretary, and he told me he was. of course,
you never can tell on uncompleted returns.
HMJr:
Well, that's fine. Thank you for calling.
B:
You bet.
115
May 4, 1944.
11:15 a.m.
DISPOSAL OF SURPLUS PROPERTY
Present: Mr. C.S. Bell
Mrs. Klotz
H.M.JR: Tell me where we are now on Procurement.
What happened?
MR. BELL: Weil, I took Mr. Olrich down and left
him - you took him down - with 8. pretty good organiza-
tion to get started with. I gave him an organization
chart of Procurement. I had him meet the administra-
tive people down there - Paul King on Personnel, Tom
Murphy on Budget and Transportation. Thurman Hill was
out but he has met him aiready this morning, or late
yesterday afternoon; and Thurman Hill will clear ali of
his signals and give him 8. memorandum on just what he
can do and what he can't do. And those are the things
that he wanted.
Now, this Mr. Oirich wants purely a sales organi-
zation; he doesn't want to get into the mechanics of
Procurement. He wants to keep as far away from that
as possible, and he wants no dupiication. So we worked
that out with Cliff providing him with every service
that they have available down there.
There are only two spots where there isn't suffi-
cient service. I don't believe their press relations
would ever satisfy this gentieman. I think we should
get a press relations man.
H.M.JR: What's-his-name has something cooking on
this.
MR. BELL: I talked to Fred Smith and he has.
116
- 2 -
Then I think he should have 8. good administrative
man to contact these various fellows to keep him from
having to bother with personnel problems, and the like.
That is & very light individual, but he should have 8
very strong individual, & man that knows Procurement
and has been in Procurement for a matter of years,
that can tie in his program of work with Cliff's program
of work. Otherwise he is apt to find himself all bogged
up in a haze about inventories and getting this property
made available to him.
So I have written him a complete memorandum covering
everything that transpired yesterday. I thought I would
give him a little organization chart outlining exactly
what was agreed to yesterday, subject to his approval,
and I have already dictated a memorandum covering every
point that we discussed yesterday.
I think when this is done he is going to have a
good working organization to start out with. There is
a weak spot in Procurement, and that is on those inven-
tories. They are bad. They are bad for a couple of
reasons.
One is that the Army in reporting this material to
Cliff is not using Cliff's code, they are using their
own code. Cliff is trying to force them around to his
code. Until that is done, we will never be able to
properly identify this material.
Now, I am working on that today and I think we will
have something worked out satisfactory to Mr. Olrich.
I don't think he is interested in twenty-five thousand
items; he wants general material at least to begin with.
Secondly, this inventory is weak because I don't
believe they have an inventory. I am checking that
today.
H.M.JR: Sullivan has been talking about it for two
or three months.
117
- 3 -
MR. BELL: They are talking about it in connection
with an elaborate IBM system that hasn't been installed
nor have the men been selected to instail it and synchro-
nize it: One, in connection with all of these phoney
codes that are coming in to them; and two, synchronize
it with their accounting method, and that is a matter
of months, if it doesn't go into a longer period of time.
I have talked to Cliff this morning and told him we would
have to get away from that, and ask advice from Mr. Olrich.
He has agreed.
I am working now on some system of providing Olrich
with the information as red-hot as Cliff gets it.
Now, you have one difficulty there. Much of this
stuff is offered to other Government agencies. I heard
what you said on that the other day and took steps to
hold back some of these sales to other Government agen-
cies for the reason that Cliff is offering them lists of
material. And these fellows that have unexpended balances
in their appropriations are buying stuff that they could
do without.
H.M.JR: Well, look, I caught the automobiles -
where they were going to stockpile automobiles for the
next fiscal year--
MR. BELL: Yes, sir, that was the Bureau of the
Budget.
H.M.JR: I know. They are just as bad as anybody
else. Let me just say this - I want to get this over
to you - look how everybody in this room feels today
that the points are off today and you can go out and buy
something. Supposing in household goods, or something,
you could begin to buy something. They say, "Gee, it
is wonderful."
MR. BELL: We don't want to run into a situation
where we would be buying for the Government, materials
that we are selling cheaper. That is what I am working
on now.
118
- 4 -
H.M.JR: I know, but if some of this stuff can
get into the hands - I will give you an example: Supposing
in my house - it doesn't happen - I had a pipe that froze
last winter and I wanted to buy the brass pipe. I can't
buy it, but the junker--he gets it for ten cents on the
dollar. I mean, how many people had frozen pipes last
winter who didn't have enough heat? They can't buy a
piece of pipe, and still we have it.
Now, I agree; I don't want to sell an article to an
individual for two dollars and next day have the Govern-
ment go out and buy the same thing for three dollars.
MR. BELL: I think we can get around that if we get
these Government agencies to file a requisition with
what they want in advance, and we will fill them. That
throws it back to them.
H.M.JR: That is ail right. Let me see your little
chart.
MR. BELL: It is pretty rough.
H.M.JR: How much time did you spend over there?
MR. BELL: I came back, I think, at three o'clock.
H.M.JR: Did you have lunch over there?
MR. BELL: Yes, sir.
(Indicating) These are the forty and fifty thousand-
dollar-a-year men who are going to come in here and help
him. They are commodity specialists. We set up about
fifteen jobs, fifty-six and sixty-five for him - for
fellows who want a salary. Then he will have the service
liaison; that will be primarily for the moment, anyway -
this fellow AL Waish, and the fellow Widmann who was
there. But this will be no good to him unless he has
his own coordinator to drive these fellows, and he won't
have time to drive them.
119
- 5 -
Then over in here I was very much impressed with this
fellow Frey on Research there yesterday.
H.M.JR: Yes, well, 1 don't know how good or bad he
did, but Harry White is very anxious that you take this
fellow. Harry says he is tops. He recommends his own
office be abolished, and Harry thinks - this is among
ourselves - that I should have somebody there who will,
very definitely, keep a line on it. I haven't told that
to anybody, but Harry thinks we should have somebody.
I have never met the man, but he thinks we should have
somebody there who would be watching.
MR. BELL: And be a part of this organization.
H.M.JR: Under Research.
MR. BELL: All right, sir. I will have a good look
at him.
H.M.JR: So have a look at him.
MR. BELL: I am getting details on the man down
there now, this fellow Frey.
H.M.JR: The trouble with Frey is he is scared of
his life.
MR. BELL: He is & little timid.
H.M.JR: I don't want a timid fellow.
MR. BELL: He is going to make 8. speech. I might
get around to listen to him.
Then you have Cliff over here in & double job on
strictly Procurement.
H.M.JR: But that line (indicating) shouldn't come
between me and the Sales Director.
120
- 6 -
MR. BELL: You have got & direct line to this man
right here, and the only reason this line goes over to
Cliff is for the reason he is going to use all of Cliff's
services. Now, we have al cady established him with
Tom Murphy, the Transportation and Finance man.
H.M.JR: Do you mind if I change this?
MR. BELL: No, sir. You know the Executive Order
setting all of this up refers to the Procurement Division.
I don't know that that is important.
H.M.JR: I think you can do it all right. I will
use a name here, you see, Olrich and Mack.
MR. BELL: You don't want a line between those two,
I see. That is really what you have here.
H.M.JR: I don't want the line to go between Olrich
and me - Cliff up in between us. What is the matter with
that?
MRS. KLOTZ: Because Cliff Mack is servicing Olrich.
H.M.JR: But they both go directly to me.
MR. BELL: All right, sir. This, as I told you, is
rough. It hasn't been finished. Here is Cliff coming
directly to you. That is the same thing you have there
with a line in between these two.
H.M.JR: There is a difference. The difference is
that Cliff breaks in between me and the fellow. I don't
want that.
MR. BELL: I see. All right, sir.
H.M.JR: There is a difference.
MR. BELL: Well, this hasn't been finished. I am
just roughing it.
121
- 7 -
H.M.JR: I know, but I want to make sure there is
nobody between Olrich and me.
MR. BELL: No, sir.
H.M.JR: Nobody between Mack and me. Now, eventuaily
I have to get somebody in here. I haven't got that fellow
yet.
MR. BELL: Maybe an Assistant Secretary; somebody
who can take the burden off of you.
H.M. JR: I am sorry I can't use the word because the
ladies are here, but it starts with a "b".
MR. BELL: He will use the six million dollars that
was appropriated for this work. I have had them transfer
out of that appropriation, to make available for this
man, a sufficient appropriation. All of his services
should be paid out of that six million dollars made
available to Procurement for Surplus Property, and not
out of Lend-Lease.
Paul King is good on personnel; Thurman Hill on
legal clearances. I have talked to Joe O'Connell about
that. Tom Lynch is going down today.
H.M.JR: Where does Tom Lynch fit in?
MR. BELL: He will sort of coordinate for O'Connell.
They haven't decided what they are going to do about
having certain cases sent over here. If they have a
hundred-million-dollar sale, it may be that 0' Connell
will want to pass on that, or see it. Tom Lynch will
work that out with Thurman Hill.
H.M.JR: Well, that relationship between Thurman
Hill, whom I have never met, Joe O'Connell, and Lynch -
I would like that straightened out in my own mind.
MR. BELL: Yes, sir, I am working on that.
122
- 8 -
Press relations - we have to be careful the type
of person we put in there. Murray, down there, hasn't
the capacity for it.
H.M.JR: O'Connell, Lynch, Morgenthau relationship -
I don't know about that.
MR. BELL: I will develop that. My girl was in the
middle of drawing this up in the office. Then I will
have down here all of the regional offices for his in-
formation.
(The Secretary holds a telephone conversation
with Mr. Acheson, as follows:)
123 L
May 4, 1944
11:27 a.m.
Operator:
Go ahead.
HMJr:
Hello.
Dean
Acheson:
Hello, Henry.
HMJr:
Good morning.
A:
This is in fulfilment of my obligation to tell
you today.
HMJr:
Yeah.
A:
We had a very encouraging discussion this
morning.
HMJr:
Good.
A:
And I think that we're making very distinct
progress.
HMJr:
Really?
A:
We've got a program now which we're going to
send down and get Armour's comments on and I
think he wants -- I think the Boss wants to do
something.
HMJr:
Could I see it?
A:
Ah ....
HMJr:
Why not?
A:
We haven't got it written down yet.
HMJr:
Well, ....
A:
We'll be glad to show it to you.
HMJr:
Yeah, I wish you would. I mean, if you're going
to send it down to Armour, I'd like to see it.
A:
Yeah. I do not want to get this involved in your
organization
HMJr:
That's all right.
124
- 2 -
A:
except for clearance and things.
HMJr:
Well, when you come over, just you and me.
A:
Yeah. That would be fine. And one thing that
I'm terribly anxious to be careful about now is
not to have any comment anywhere in the press.
HMJr:
Well, you can be sure that there won't from this
end.
A:
Well, that's ....
HMJr:
A lot of these things come out -- I can take care
of my end.
A:
Fine. Well, we're trying to cut down the people
over here to a very small group.
HMJr:
Yeah.
A:
Because I think if anything does, it will just
spill the beans. We won't get anywhere.
HMJr:
When will you have this drafted?
A:
Collado is working on it now. We'll have to show
it to him probably toward the end of the afternoon.
HMJr:
Yeah. Do you want an appointment for tomorrow
morning?
A:
I beg your pardon?
HMJr:
Would you like an appointment for tomorrow morning?
A:
Yes, I think it might be a good 1dea to get this
off to Armour tonight.
HMJr:
Yeah. Well, I just as -- or would you want to
come over this afternoon?
A:
If I can come over this afternoon, why don't I do
that?
HMJr:
Now, let me tell you what's happening and you're
invited to this if you want to come. I don't know
whether you want to come. Lord Hallifax and Opie
have asked to see me.
125
- 3 -
A:
Yes.
HMJr:
And it's in connection, undoubtedly, with this
World Monetary Conference.
A:
Yes.
HMJr:
I don't know whether you'd care to sit in on
that or not.
A:
What time does that
....
HMJr:
That's four o'clock.
A:
Would you like to have me? Or would you rather
just sound them out?
HMJr:
Well, I'd be glad to have you. I mean, I just
don't know whether you think that
....
A:
It might be better for you just to find out what
it's all about without
....
HMJr:
Well, how about four-thirty?
A:
All right. I think I can get over at that time
with it if we have gotten it cleared here. We're
going to have a fight on it here but I think the
battle will be over
....
HMJr:
Well, let me do it this way....
A:
If it isn't over then, I'll come over in the
morning.
HMJr:
Supposing I say -- I don't care -- I mean, I don't
care -- I mean, I'm not so anxious to see it before
it goes down, but I just want to see what goes down.
A:
Oh, I see. Certainly.
HMJr:
So, why not let's put it in the morning?
A:
All right.
HMJr:
Do you want to stop by on your way to work?
Do you want nine. clock?
A:
Well, I won't have the thing. Let me come over --
I have a meeting of the Post-War Policy Committee --
let me come over there say about eleven-thirty.
- 4 -
126
HMJr:
Eleven-thirty.
A:
That's Friday.
HMJr:
Friday.
A:
Eleven-thirty. All right.
HMJr:
All right. Hello?
A:
Yes, sir.
HMJr:
Eleven-thirty.
A:
And then you can tell me what happened this
afternoon, too.
HMJr:
Right.
A:
All right, Henry. Thank you.
HMJr:
Thank you.
127
- 9 -
H.M.JR: Now where were we?
MR. BELL: He wants no salary. A dollar a year
would make him a Treasury employee and puts him on that
appropriation down there as Assistant.
(The Secretary signs letter of appointment for
Ernest L. Oirich)
MR. BELL: Would you want to see 8 copy of the memo
I wrote Olrich and this little organization chart when
it is finished?
H.M.JR: Yes, sir.
Wait a minute. You act as though you are busy.
MR. BELL: I am just afraid you might be.
H.M.JR: That is all right.
MR. BELL: Yes, sir!
(The Secretary holds a telephone conversation with
Mr. Olrich, as follows:)
May 4, 1944
128
11:34 a.m.
HMJr:
Hello.
Operator:
Mr. Olrich
HMJr:
Hello.
Ernest
01rich:
Good morning, Mr. Secretary. This 1s Olrich.
HMJr:
How are you?
0:
Fine, thank you, sir.
HMJr:
How are you getting along?
0:
Enjoying it very much and find I have a good
nucleus for going forward and we've already
made plans and started already to arrange for
interviews with men that will be interested in
joining the unit.
HMJr:
Good. Any question you want to raise?
0:
No -- none. The relationship, the set-up and
everything is going to be very pleasant. The
men that were left over are going to be very
helpful. We've already had a long talk with
Mr. Mack.
HMJr:
Yeah.
0:
And the only additional thing that's being
saddled on this particular Division is a
merchandising and selling organization. All
other agencies of Procurement Division will
be our agencies. There will be no duplication
of any kind.
HMJr:
You're just going to do the selling?
0:
We're going to do the selling. It would be a
mistake to attempt to duplicate any of their
service. We'll use their personnel service.
We'll use their legal department. We will set
up our own statistical department as far as the
records we need for our own staff experts. We
will not duplicate any statistical work that's
already being done.
HMJr:
Fine.
129
- 2 -
0:
We like the idea of an economist and we're
starting to try to get one or two business
economists rather than the Ph.D. type that
are economists just for the sake of being
economists
HMJr:
Yeah.
0:
....and see if we can anticipate some of the
things that are being done.
HMJr:
Well, have a look at that fellow that Harry
White recommended.
0:
Yes, I will.
HMJr:
Yeah.
?
We'll do that one day next week.
HMJr:
Good. So you're all right for twenty-four
hours?
0:
Yes, sir, enjoying it immensely.
HMJr:
Don't boast too much, now.
0:
We're not -- we're not talking. That's our....
HMJr:
I ain't talking.
0:
All right.
HMJr:
I mean don't boast too much about having a
good time.
0:
No. Well, that -- the headaches will come.
HMJr:
No, that's what I meant.
0:
This is just the honeymoon. -
HMJr:
No, you misunderstood me.
0:
I see.
HMJr:
I mean, as an old man in Washington, I just
say that I hope that your good time lasts as
long as you're here.
0:
Well, I'm going to try and make it SO.
HMJr:
Wonderful.
- 3 -
130
0:
I've had some calls already from people on
Capitol Hill. For instance Maury Maverick's
office and some of the Minnesota Delegation
and
HMJr:
What do they want?
0:
Just to say "hello". Some of the people from
those places have known me in work I've done
in other divisions in industry.
HMJr:
Oh, do you know Maury?
0:
I don't know Maury but one of Maury's right-
hand men
HMJr:
Yeah.
0:
....was an associate of mine many years ago.
HMJr:
Oh, good.
0:
And 80 he can simply tell Maury, "Well, we
haven't got horns." And one of Judge Truman's
right-hand men -- hello?
HMJr:
Yes, I hear you.
0:
One of Judge Truman's right-hand men is an old
friend and I knew Truman from Independence,
Kansas.
HMJr:
Oh. You mean Senator Truman?
0:
Senator Truman, yes.
HMJr:
Right. Well
0:
We're keeping away from him except to let them
know we're here and if they want us we're here
again.
HMJr:
Well, if you get into any -- under any political
pressure, that's part of my job to release you or
protect you.
0:
Right. I will, maybe, need help along that line
some day.
HMJr:
Well, don't
- 4--
131
0:
It hasn't started but it will.
HMJr:
Right.
0:
All right, Mr. Secretary.
HMJr:
Thank you.
0:
Is there a meeting this afternoon at Mr.
Clayton's office at three-thirty?
HMJr:
Well, I ....
0:
I think I'll have to take that up with Mr.
Sullivan.
HMJr:
Right. I'm not familiar with that.
0:
Right.
HMJr:
But Sullivan would know.
0:
All right, sir.
HMJr:
If you don't mind. I just never keep track
of those.
0:
Right. I'll talk to him.
HMJr:
Thank you.
0:
All right, sir.
HMJr:
Bye.
0:
Bye.
132
- 10 -
H.M.JR: He is having a good time for twenty-four
hours! (Refers to Olrich)
MRS. KLOTZ: I hope you won't have to say, "I told
you so."
H.M.JR: That fellow is an experienced fellow. He
has come up the hard way.
MRS. KLOTZ: But he still doesn't know Washington.
There is & difference.
H.M.JR: I know, but he will learn. There are two
fellows over there. I have met Walsh in New York. When
I met him he certainly knew what he was talking about.
The other fellow who is supposed to be the head of this
Surplus Property--
MR. BELL: Widmann?
H.M.JR: Yes. This fellow will find out whether
Widmann is any good.
MR. BELL: Widmann has very little experience.
H.M.JR: Widmann was a Forwarding Agent. He saw
that the stuff got out. You are not going to bluff
this fellow.
Do you enjoy taking something new like this? That
is fun, isn't it?
MR. BELL: Yes, sir. Everything I do is fun. I make
it fun.
H.M.JR: Now listen, I can't take it today.
MR. BELL: There are no exceptions.
MRS. KLOTZ: It is true. That is the quality he has.
MR. BELL: Yes, sir.
133
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE May 4, 1944
to
Mr. Olrich
FROM
Charles Bell
BM
Following our discussion in the Procurement Division
yesterday, you might find it helpful to have on paper,
at least as a starter, the organizational facilities
tentatively agreed upon, together with a few comments
on how this would function.
As I am to keep the Secretary pretty well posted
on administrative progress and make available for your
ourpose every possible green light, will you indicate
if this general outline expresses the understanding
reached yesterday.
(1) The attached organizational sketch provides
only a top layer skeleton but embodies the principal
suggestions made by Director Mack of Procurement and,
I think, indicates a pattern for the successful develop-
ment of marketing facilities which is distinguished from
the servicing functions that will support the sales
program.
(2) In terms of actual operations, the commodity
specialists would use the research and planning group as
their information developing body.
(3) The service liaison group should probably be
headed by an experienced Procurement Division employee
since the necessity for a tight and effective coordina-
tion between the sales and servicing operations cannot
be overemphasized. The officer in charge of this
service liaison should rank high in your group of
specialists, inasmuch as his principal function will
be to accept and translate into action the policies
hended down by the Director of Surplus Sales. He, of
course, will be expected to participate in overall
planning to whatever extent is necessary to insure the
best use of warehousing and inspection facilities and
134
- 2 -
inventory methods, now a part of the Procurement Divi-
sion. Added to your immediate staff should be a competent
press relations man.
(4) The ordinary administrative services of
personnel, budget, legal clearance on sales, etc., should
continue to be handled by the present Procurement organi-
zation inasmuch as it would be an outright duplication
to develop a parallel set of administrative offices
serving only the surplus sales side of the business.
This will necessitate the use of a good administrative
assistant attached to the sales side and capable of
transacting all of the necessary business with the
regularly functioning Procurement units involved and
who would keep the office of the Administrative Assistant
to the Secretary fully advised on all matters of major
importance, seeking advice and clearance as the occasion
demanded.
(5) It may appear necessary for the sales organiza-
tion to develop a field organization geared to the
pattern set by Procurement. This organizational pattern
should, of course, be in harmony with the desires of
the Surplus War Property Administration; however, for
the present at least field services of Procurement would
seem adequate until stock piles are much in excess of
the current actual and potential inventories for the
next 60 days.
(6) The attached Executive Order provides the
authority and working base for the entire sales program
and it should be noted that it names the Procurement
Division of the Treasury Department as the sales outlet
for consumer goods. This apparently necessitates
identifying the sales organization as a part of our
Procurement Division if the terms of the Executive Order
are to be adhered to in the present form.
any
135
SECRETARY
SURPLUS SALES DIRECTOR
DIRECTOR OF PROCUREMENT
COMMUNITY SPECIALISTS
SERVICE LIAISON
RESEARCH + PLANNING
GOVERN
L Automative Equipment
t Procurement Division
1. Market Analysis
OPERATIONS
2 Building Materials, Himbusers
2. Surplus War Property
Potential Ortlets
& Constinution Equipment
Handling warchousing,
2 Declaration Estimates
4. Etc.
Rehabilitation
Issuming Potential
Transportation, Inspection
Classification of queds
FIELD
Regional Organization (Prestement)
BUDGET FINANCE
PERSONNEL
LOGAL CLEARANCE
Ptans RELATIONS
TRANSFORTATION
Ton Mumphy
Pasl King
Thorman Hu
REGION I
REGKS II
Grow III
REGION II
REGION V
REGIONTI
REGION VII
REGION VIII
REGION IX
REGION X
REGIONAL
- You City
Dinsinenti
Chicago
Atlanta
Fart Worth
Vansas City
Denver
Eas Francisco
Smitle
I
Regraded Unclassifie
136
VICTORY
TREASURY department
BUY
PRITES
STATES
PROCUREMENT DIVISION
SOMOS
WASHINGTON 25
ICE OF THE DIRECTOR
May 4, 1944
MA
MEMORANDUM TO THE SECRETARY:
A representative of Treasury Procurement met
with other members of the Space Control Committee,
which drew up 8. tentative draft of an order to be
submitted to Mr. Clayton for his signature and issuance.
This order will formally establish the Space Control
Committee and state its purposes.
Attended a short meeting of the Surplus War
Property Policy Board.
Interviewed applicants for positions in the
surplus property disposal organization and made
arrangements to interview others.
A conference was held with representatives of
the Treasury Department and the Bureau of the Budget
for the purpose of coordinating the procedure relative
to property accountability and reporting and with a
view to expediting the completion of the field in-
stallation.
ELORAL
L. Olrich
Assistant to the Secretary
137
May 4, 1944
11:45 a.m.
APPOINTMENT OF ASSISTANT SECRETARY
Present: Mr. Gaston
Mr. Smith
Mr. White
Mr. O'Connell
Mr. C. S. Bell
Mrs. Klotz
H.M.JR: I am sorry Dan Bell isn't here, but he is
out. But John Sullivan told me yesterday that he is leaving
the Treasury on the 1st of June.
I told Mr. White last night that after he leaves I am
going to recommend to the President Mr. White be appointed
Assistant Secretary in Charge of Foreign Affairs for the
Treasury. Mr. White didn't object.
MR. GASTON: Nobody objects.
H.M.JR: So I thought you people would like to know
that.
MR. WHITE: I am very pleased.
H.M.JR: Did you say your wife was pleased?
MR. WHITE: My wife was equally pleased, at least.
H.M.JR: And a little surprised, I gathered.
MR. WHITE: Yes, indeed.
H.M.JR: In talking with Harry, we were talking last
night about who should handle Internal Revenue, and I want
to get advice on having Roy Blough as assistant to me. I
would like to see what you people think.
138
- 2 -
Now, an alternative to that is getting Jome fellow
from the outside like Murchison. Is that his name?
MR. GASTON: Charles Murchison.
H.M.JR: Of Florida, Jacksonville. ne is a friend
of John Sullivan's. He is a good, able New Dealer, managed
Pepper's campaign, former regional director for six States
for OCD, and liked by the Governors, and 80 forth, and so
on--a total stranger.
MR. GASTON: You might not be able to get him. He
has a very considerable and growing law practice.
H.M.JR: But I am just using him as an example, some-
body from the outside that you might get.
MR. GASTON: By the way, that other man that you asked
the name of in Chicago is Laird Bell.
H.M.JR: No, the man I wanted is pretty well spoken for.
MR. WHITE: Didn't Murchison just receive a good deal
of publicity as being critical of the President? Or is that
my mistake?
MR. GASTON: I don't know, Harry.
MR. WHITE: Maybe it is Michelson.
H.M.JR: No, this fellow comes from Jacksonville,
Florida. I imagine he is a classmate of both John and
Pepper, because they all went to Harvard together, Harvard
Law School.
MR. GASTON: Yes, I think so.
H.M.JR: What do you fellows think of putting Roy in
there?
MR. O'CONNELL: I will stick my neck out; I don't think
that Roy would be a particularly good choice, although when
I consider the alternatives, it is a little unsafe probably
to take that position. Roy is, I think,a little on the
139
- 3 -
academic side. I think ne is a little out of character.
To get away from the sort of operation he does 80 well in
the Tax Research--I would think that the type of fellow
to have to run the Bureau of Internal Revenue is a fellow
with a little more iron in his soul than John Sullivan has.
H.M.JR: A little more what?
MR. O'CONNELL: A little more iron than John ever had
with the Bureau. And I think Roy has--it seems to me that
Roy is not tough enough to deal with people in the Bureau.
H.M.JR: Well, we get down to alternatives.
MR. WHITE: Is Surrey an alternative?
H.M.JR: No, Surrey is going into the Army.
MR. SMITH: Would Lynch be any good?
H.M.JR: No.
MR. WHITE: I think it is a question within the Treasury.
Without, there must be many choices. We just haven't can-
vassed the field at all.
MR. GASTON: Harold Graves is pretty well settled in
that job you have him in over there. You wouldn't want
to move him back over here?
H.M.JR: Definitely not. There wouldn't be any
addition. It would be just adding water.
MR.WHITE: Joe, I think Roy has a lot of backbone.
I don't know how much is needed.
MR. O'CONNELL: It would be easier to consider it, if
we have some definite alternatives. Of course, Roy is a
very competent fellow, but I haven't visualized him--
H.M.JR: Roy has lots of Indiana Dutch in him.
140
- 4 -
MR. SMITH: He apparently gets along with Doughton.
That is a factor.
H.M.JR: That is recent.
MR. GASTON: Does he get along very well?
MR. SMITH: Since this last business--
H.M.JR: As long as you don't have to push the old man,
you get along with him. As soon as you have to push him--
it wouldn't be very acceptable on the Hill, but what I am
thinking of is a watchdog.
MR. GASTON: How about over in the Pureau?
H.M.JR: Nobody over there--
MR. GASTON: I mean, if Roy were selected, how would it
set over there?
H.M.JR: Not very well. Whoever I put in, he would
be over there to watch them.
MR. WHITE: The trouble is, if you get & new man, it
will take him at least six months before--I mean, if he is
not in the Bureau or here--it will take him at least six
months before he knows the score. Six months will bring
you to the end of the year. You have lost whatever value a
man in that position could be to the Secretary during the
remainder of this year.
MR. O'CONNELL: I don't agree with that. I think
that the right kind of fellow might be as effective in
thirty days operating in the Bureau as a man who had had
ten years of experience behind him.
H.M.JR: That is one of the trickiest places.
MR. BELL: Plenty tricky.
H.M. JR: Look what I am up against when I want to
change 8. letter. When I wanted to change & letter, there
141
- 5 -
was such a major row--just because I wanted to change a
letter. They know it all; they have all the answers.
Paul said that this Schoeneman we put in there--
MR. GASTON: Yes.
H.M.JR: He says he is an awful dumb cluck. He
thinks it was a major blunder, putting him in, one of the
dumbest persons he knows.
MR. BELL: He knows the collector offices; he knows
collection of taxes.
H.M. JR: He said he couldn't understand it. I said
I didn't know; everybody who comes in wants him.
MR. BELL: I think it is a good selection for the type
of work he is going to do.
H.M.JR: I don't know; I am just repeating Paul.
Now, to bring in one of the collectors from out of
the United States--I don't think that would be good.
MR. GASTON: They haven't any that are good enough to
bring in.
H.M. JR: I slept on this thought of Roy. I don't know
whether he wants it; I haven't talked to him. You fellows
sleep on it, and I will have a talk with you tomorrow.
MR. WHITE: I think something might depend on what Roy
feels about the possibilities there. He is familiar enough
with it, I should imagine, 80 that he either has some ideas
or would have after he sat down for a few days and thought
about them as to what kind of 8. program he envisages or what
kind of a program you envisage.
It appears to me that a man in that capacity who isn't
directly responsible for the administration--that is taken
care of. The value lies in seeing how the whole thing can
be improved or in making suggestions, using his imagination
a bit, and not in direct administrative ability to see that
142
- 6 -
people are working efficiently--I take it that is in the
first place under the Commissioner, and in the second
place probably taken care of-but to take a look-see at
the whole thing from a fresh point of view.
H.M.JR: The main thing is to see that they stay
straight.
MR. BELL: They have quite a few administrative prob-
lems.
MR. GASTON: Yes, I think the administrative responsi-
bility is much greater than--
H.M.JR: Yes, but what has John done?
MR. BELL: I think possibly it was a little embarrassing
for John to have worked under Helvering and then come over
here and be over Helvering.
MR. WHITE: I don't think you are going to get anyone
from the outside, in my judgment, who can step over a Commissioner
who has a certain degree of independence in any case and
interfere very much or attempt to influence very much the
actual administration. I think any changes that can come
from the outside with a man who is directly responsible
to the Secretary is more in the realm of suggested changes,
large changes, changes in policy, changes in approach,
rather than an attempt to correct administrative defects.
H.M.JR: Well, anyway, you men think it over.
Charlie, will you tell Dan about this conversation
to bring him up to date so when I talk with him again
tomorrow Dan can sit in on it?
MR. BELL: Yes, sir.
H.M.JR: O.K.
143
Meeting in the Secretary's Office
Thursday, May 4, 1944
4:00 P.M.
Present: Secretary Morgenthau
Lord Halifax
Mr. Opie
Mr. White
Halifax and Opie, of the British Government, called to see the
Secretary at their request. Lord Halifax began by saying that a
number of cables that had been going back and forth from London and
Washington at various levels dealing with the question of a conference
on international post war monetary problems and that he thought it
would be useful if he could review the matter with the Secretary and
Mr. White and make certain that we understood what was in London's
mind and London understood what was in our mind.
He said there were two separate points that he would like to
bring up with respect to the conference. One was the date and the
second was the kind of conference. He said the date of May 26 was
impossible for his government for two reasons: first, the question
of security. He explained that the military restrictions on the
departure and arrival of persons from England was extremely strict.
Mr. Opie said that, for example, Mr. Butler, who was here in the United
States was having great difficulty obtaining permission to go home to
London. Lord Halifax said that the chief difficulty would probably be
the granting of permission to members of the exiled governments to
leave the United Kingdom for the conference.
The second reason why the May date was unacceptable was that the
Dominions and many of the other countries had not had time enough to
study the statement of principles and would not have enough time to
prepare their views if the conference were held at the end of May.
Halifax turned to me and asked what I thought of the two reasons.
I said I was afraid that I wasn't terribly impressed with either of the
reasons. The British Government could adequately screen departures
of the few members of the exiled governments who would be asked to come.
There already were some men here who would doubtless be members of the
delegation from the Polish, Dutch, French Governments and possibly the
Belgian and Norwegian. In some cases higher officials would doubtless
want to come.
With respect to the second point made by Halifax, I said that I
didn't think it was fully appreciated that the representatives of the
various governments had been discussing these points for many months
and there was very little in the statement of principles that would be
new to any of them, that most of the points that were new were matters
144
Division of Monetary
Research
- 2 -
which many of the delegates of the exiled governments had wanted in the
first place. I didn't think they would need any additional time to
become acquainted with the details of new material in the principles.
The Chancellor said they would do everything they could to expedite
cideration of the statement, as well as discuss in Parliament, but
they would have to have in his opinion adequate time for reflection over
the joint statement.
Lord Halifax wanted to know whether the date of the conference
couldn't be postponed a couple of weeks. The Secretary's reply was
non-commital. The Secretary then asked "Do I understand that your
government favors a conference but the sole matter of issue was the
question of the time" and Lord Halifax replied "Yes, the time and the
nature of the conference."
We then went on to discuss the nature of the conference. He said
the Chancellor, himself, could not attend at the end of May (Mr. Opie
told me after the meeting that he seriously doubted whether the Chancellor
himself would come even if the date were postponed. He thought they
would send a small delegation.)
Lord Halifax said that it might be possible to arrange for a
"conference of experts" early in June. Lord Halifax and Mr. Opie then
discussed the distinction between a conference of experts and a confer-
ence of the character that the United States was contemplating. It
was finally agreed that there was no difference, that the ministers or
their representatives who would come would not come as plenipotentiaries
expected to commit their government to support a program formulated by
the conference. Secretary Morgenthau said it was definitely and clearly
understood that the various governments were not committed to accept the
findings of the conference, that he could not and would not commit his
government and he assumed that the same was true of the British Govern-
ment. It was agreed that the representatives attending the conference
would be coming in a sense in their expert capacity though they need
not be designated experts.
Lord Halifax suggested, "Why not have the meeting called of experts?"
I pointed out the word might have a supplementary meaning. Secretary
Morgenthau stressed the view that it would be much more desirable from
our point of view and the State Department's point of view to have the
delegates attending the conference referred to as representatives rather
than experts. It was agreed that the conference should be referred to
as a conference of the representatives of the governments.
Lord Halifax then raised the question of the Bank. He said he
didn't know whether the Bank would be discussed at the same time or
145
Division of Monetary
Research
- 3 -
whether it was possible to discuss the Bank at the same time. I
replied that the discussions were going forward with the representatives
of some countries on the Bank and that we hoped to clear up some of the
difficulties with the British representatives by cable. I said that
there would doubtless remain some differences between our positions but
that it would be possible to make sufficient progress during the period
prior to the opening of the conference to warrant going on with it at
the conference. It was expected that there would be & committee of
representatives of some 10 countries or so coming to the United States
two or three weeks prior to the opening of the conference to consider
the agenda and prepare material for the conference. It was expected
that during that period enough progress would be made in the discussions
of the Bank to make it possible for the conference to proceed on the
Bank at the same time as the Fund.
Lord Halifax asked the Secretary whether it was necessary for the
conference to be held in the spring, couldn't it be held after the
conventions or at some other time. The Secretary said "Well, frankly
I haven't asked the President about that and I don't know what the
President's views are. I myself feel that we ought to disregard the
dates of the convention in fixing the conference but some of the men in
the Treasury here feel doubtful about it." He said that the President
had displayed greater interest in this matter than he would have expected,
that the State Department and Secretary Hull were just as eager to go
ahead with it. He said he couldn't give an answer to Lord Halifax's
question. He would have to take it up with the President.
I said one of the dangers I SBW in a postponement was that if the
conference was held at any time during the Republican Convention that
the Republicans might be quite resentful of that. The President had
indicated he was going to appoint members of Congress as members of the
delegation and members of the minority probably would be included.
They would likely be important members of the minority party and they
would be unable to attend both the conference and their own convention
and they might suspect that the date was selected with that end in view.
Furthermore if the conference were postponed to some time beyond
the Republican Convention then we ran the danger that the matter would
be brought to the attention of the convention some way or other and a
resolution might be forthcoming which would be couched in such terms as
to tie the hands of the American representatives in the conference or
place the American representatives of the conference in the position of
knowingly disregarding the will of the Republican Party as expressed by
the convention. I said that would be unfortunate. The Republicans might
well make it a political issue and impose such restrictions as would
render the conference unsuccessful because other countries would not
accept the kind of conditions that they might impose. Therefore, I
146
Division of Monetary
Research
- 4 -
thought it was important to have the conference out of the way before
the Republican Convention.
Lord Halifax said he was impressed with the point and would try to
communicate with his government our feelings in the matter. The
Secretary informed Lord Halifax that we had just received word that the
British Cabinet was going to consider the matter the following day, i.e.,
Friday. He asked Lord Halifax whether he wanted the Secretary to find
out from the President whether the date could be postponed so that he and
Lord Halifax would be able to communicate with his government prior to
their meeting of the Prime Ministers on Friday. It was agreed that there
wouldn't be time for that. Lord Halifax asked the Secretary whether he
and Mr. Opie might leave some notes of the discussion and the Secretary
said he would like that and the appended was left by Mr. Opie as a gist
of what Lord Halifax had come to convey to the Secretary.
H. D. White
147
The Chancellor's Statements
Date of Conference
1.
The first definite proposal
Chancellor could not himself
for a formal conference of
attend at end of May and he
Finance Ministors was made in
believes that it is not feasible
Mr. Morgenthau's message to the
in any case to hold a conference
Chancellor of April 26th.
then. Would the conference help
Pressure of financial business
Mr. Morgenthau for his purposes
would make it impossible for
if it were possible to convene
the Chancellor to attend.
it two or three weeks later
But two difficulties make it
as the Chancellor had suggested
impossible to call the confer-
to Mr. Winant?
ence in May:
(1) Security regulations, the
implication of which the Chan-
cellor realised only a few days
ago.
(2) Consideration of the joint
statement by other.governments
(European Allies and Dominions)
has just started. The Chancel-
lor will do everything to ex-
pedite their consideration of
the statement (as well as dis-
cussion in Parliament), but
there is still a lot for them
to think about and it is not
feasible to give them proper
notice for a conference by the
end of May and at the same time
allow them a decent interval
for reflection.
But it might be possible to
arrange for a conference of
experts early in June.
Regraded Unclassified
148
The Kind of Conference
(a) The conference must be one
of experts.
(b) If practicable, it will be
a large conference compris-
ing representatives of all
the United Nations. If this
is impossible, then a
smaller meeting of experts
to establish the details of
a text.
0
3. Scope of Conference
The U.K. experts could
simultaneously discuss with the
U.S. Treasury the Reconstruction
Bank, with a view to reaching an
agreed statement of principles.
The point is that H.M.G. want
this prior discussion with the
U.S. to reach an agreed statement
before throwing the subject into
the conference.
149
Personal telegram from the
Chancellor of the Exchequer
to Viscount Halifax, despatched
May 4th, 1944.
Please give the following personal message
from me to Mr. Morgenthau.
Message begins.
With the concurrence of the Minister of Food
(Colonel Llewellin), I have decided to appoint
Robert H. Brand to be the representative of the
United Kingdom Treasury in the United States, in
succession to the late Sir Frederick Phillips.
I know that you appreciate the importance which I
attach to this appointment, and it was on my assur-
ance that the choice of Brand would best serve the
common interest of our two countries that the
Minister of Food agreed to an appointment which
deprives him of a valued representative in Washington
as head of the British Food Mission.
This is at present for your own personal in-
formation and I am deferring publication of the
appointment until I hear from Lord Halifax that he
has communicated this message to you.
Message ends.
Regraded Unclassified
150
May 4, 1944
5:20 p.m.
CONVERSATION WITH AMBASSADOR HALIFAX
Present: Dr. White
Mrs. Klotz
H.M.JR: Ambassador Halifax stayed behind at the
meeting - this is the second half; Dr. White will take
care of the first half.
He gave me a memorandum from the Chancellor of
the Exchequer, in whi ch he advises me that they are
going to appoint Mr. Robert Brand as representative
of the United Kingdom Treasury here.
He said, "I know how you feel about Mr. Brand,
because we had & talk about him once before when
Mr. Llewellyn was here."
MR. WHITE: I don't remember that.
H.M.JR: I remember when Llewellyn was here I
spoke to him about Brand and Lazard Freres, and got
nowhere.
So he said, "The Chancellor asked me about this,
and I told him how you felt." But he said if he decided
that he wanted to go along, he, Halifax, would say it
was all right.
And 80 I said, "I don't know whether it is too
late or not. He said, "No." And I said, "Well, I
want to tell you that I have been here for eleven years,
and it is the only eleven years in the Treasury that
there hasn't been somebody in the Treasury who wasn't
very close to the firm of Lazard Freres. They have
always had somebody here who was their friend, and that
is what they do in every capital."
And I said, "It was a very close call with the firm
of Lazard Freres in New York, whether We should close
Regraded Unclassified
151
- 2 -
them up and take them over, or let them put up a two
million dollar bond, because they did business through
a dummy corporation in Panama in which they got money
into Switzerland to go into Free France."
I said, "It is very questionable - the whole
business. But we decided that we would let them stay
open. Mr. Frank Altschul, the head of the firm, got
out. He is related to me by marriage, 80 I know him
very well."
And I said, "I objected to the way they have done
business. I had strong objections some years ago when
they welshed on a purchase of ten million dollars
worth of gold, and frankly I don't want anybody--"
I said, "You say Mr. Brand is a highly honorable
man. I take your word for it. The Chancellor of the
Exchequer says he is a highly honorable man. I take
his word for it. But Mr. Brand will be entertained
by members of the firm of Lazard Freres, just the way
they entertained Mr. Bonnet. I'll not feel comfortable
with the man."
"Now," I said, "you have a man - Mr. Opie. I don't
know what his background is, but he is doing a good
job here."
Well, they wanted an important person. I said,
"As far as we are concerned, all we want is a man with
an honest intellect."
So he said, "Well, Mr. Opie isn't of the Treasury,
isn't of the Foreign Office. He is my economic adviser."
I said, "Take it from me, he is doing a good job;
and we don't need somebody who is an important person."
He even wanted to send Lord Catto over; "he wouldn't
have any more influence with us than Mr. Opie, because
he is an honest intellect and Mr. White has confidence
in him."
So he said, "Well, would you not accept him?"
152
- 3 -
I said, "No, I want you to tell them how I feel."
He said, "Well, can I say that you are not saying
they can't have him?"
I said, "I am not going to tell the British
Treasury whom they can or cannot have."
"Well, can I say" - this isn't exact - "that you
will do business with them?"
I said, "I have got to do business with them, but
you are going to make things very much more difficult
for me, and I can't give him my confidence because I
don't 3 know whom he is going to see over the weekends."
"After all," I said, "when the war is over, he
goes back to work for Lazard Freres."
"But would you feel any better if I said he wasn't?"
I didn't answer.
I finally said, "Look, Mr. Ambassador, with things
as difficult as they are, what do you have to pick
Mr. Brand for?"
MR. WHITE: Sure. He is already doing a job.
It isn't as though he is unemployed.
H.M.JR: I said, "Why can't you give me .somebody
who makes it at least as easy as possible for me?"
He said, "I understand. I'll send a personal
cable that you are not saying whom they can or cannot
send. But this fact, this information, about Lazard Freres
of New York had not been made available before to the
British Government. You have told us now, etc.
And I said, "Don't forget Jose' Laval, either -
or Madame Chambrun."
MR. WHITE: My memory slips me. How do you tie
those two up?
153
- 4 -
H.M.JR: Rene Chambrun is the Captain who came
out right after Dunkirk. The President of the United
States and Mr. Bill Bullitt took him down on his boat,
and I had to stop everything while I saw Captain Rene
Chambrun, who is married to the daughter of Laval.
He went right down with the President. He since has
gone back. He is one of the high members of the Vichy
Government.
She happened to be on very intimate terms with
one of the partners in New York of Lazard Freres. That
is all - very intimate!
MR. WHITE: I see. I get it. Well, I think you
are a hundred percent right. Here are the relations
between two governments, and the mere fact that you
even raise your eyebrows ought to be enough for them
to pick somebody else.
H.M.JR: You know what is going to happen? I'll
tell you. Mr. Brand will come as a representative of
the Treasury.
MR. WHITE: You think so?
H.M.JR: Absolutely.
MRS. KLOTZ: I don't think so.
H.M.JR: Yes, he will. It is like the time, in my
innocence, I wanted to send home this fellow who was
here representing them on the sale of securities. I
didn't know he was personal adviser to the Prince of
Wales - not the present King.
MR. WHITE: That is right.
H.M.JR: I was so bold as to raise the question,
as to advise that the Financial Adviser to David might
have to be sent home if he didn't get busy!
You take it from me. Don't forget that Halifax
went to Munich. I know. I'll bet you that this man
Regraded Unclassified
154
- 5 -
will come as a representative of the British Treasury.
MR. WHITE: When Opie told me, I said, "Does the
British Government recommend somebody tied up with
Lazard Freres?"
Well, I don't know; you may be right.
H.M.JR: Believe me, I was just as emphatic as
I am here.
MR. WHITE: He says he is an intimate friend of
Halifax's.
H.M.JR: This is very interesting. Halifax said,
"I may not like what you are saying, but at least I
understand it."
MR. WHITE: Well, he is an intimate friend of his,
and that probably explains it.
H.M.JR: "I may not like what you are saying, but -- If
And I said, "Don't forget, also, that I protested
about Mr. Monet."
MRS. KLOTZ: Which - Monet or Bonnet?
H.M.JR: Monet; and Mr. Bath, of SKF. If they
live long enough, they'll all come up, if the war lasts
long enough.
MR. WHITE: Brand is a very able fellow.
H.M.JR: Wouldn't it be wonderful, having him here!
MR. WHITE: They make the mistake in their own
interests.
MRS. KLOTZ: This is the cable from Winant. (Hands
document to the Secretary)
H.M.JR: Please look up and see if France is the
son of Anatole France.
155
- 6 -
MR. WHITE: If he is, he'll be quite an illustrious
gentleman.
I sent you a note on that League of Nations thing.
H.M.JR: I got it. What & wonderful day!
Halifax said he would send a cable, tonight.
MR. WHITE: Do you know, the first element in
protocol of sending 8. representative from one country
to another is to find out if he is acceptable to the
man he deals with?
H.M.JR: They know now that he is not.
MR. WHITE: It would be surprising if they sent
him. If he comes, we'll do business with him.
H.M.JR: We'll do it.
MR. WHITE: But he better be good!
H.M.JR: They had thought of sending Lord Catto.
I'll show you how old this is. This was when Halifax
was in England three or four months ago.
MR. WHITE: They haven't had any top man here.
H.M.JR: Isn't Opie all right?
MR. WHITE: Fine, because he does what he should
do in the interest of his own country, and tries to
understand what we are doing. He communicates back
and tells us what his Government is doing. He does
not belittle the interests of his own Government, but
he is reasonable. It isn't a fencing match with him
all the time. He very much would like that job.
You said something about his background. He used
to teach here at Harvard. He was one of my colleagues
there. I taught there when he did. He is now &
Professor at Oxford.
Treasury Department
Division of Monetary Research
156
0
Date May 4, 1944 19
To:
Secretary Morgenthau
You may be interested in reading
the full statement of Prime Minister
King on the International Monetary
Fund - Pages 2 and 3.
H.D.W.
MR. WHITE
Branch 2058 - Room 214-1/2
157
EMBASSY
XXXXXXXXXX
an
Ottawa, April 22, 1944
No. 987
Subject: Canadian Statement on Monetary Plan
The Nonorable
The Secretary of State,
Washington, D. c.
Sir:
1/
I have the honor to attach hereto copy of the statement
made by the Canadian Prime Minister in the llouse of Commons on
April 21, 1944 in connection with the proposals for the establish-
ment of an international monetary fund.
It will be noted that the Prime Minister again stressed
that monetary plans only represent one part "of a general plan
of international economic cooperation" and that "a reduction in
the barriers to trade expansion" is necessary "if conditions
favorable to stable mone arrangements are to be achieved."
Stressing the position of the Canadian Government further, the
Prime Minister stated:
"The view which will ultimately be taken by the
Canadian Government of any proposed monetary
arrangements will be greatly, perhaps decisively,
influenced by the progress which it is possible
to make in achieving agreement on other aspects
of international economic policy with which
monetary arrangements are inseparably linked,"
Accordingly, it may be anticipated that the Canadian
Government will avoid taking a final position on any monetary
arrangement until sufficient progress has been made along other
economic plane to allow a reasonable expectation of the success
of a monetary plan.
Respectfully yours,
For the Ambassador:
"Tue any of the
John Warts Horner
original simed by:
Third Secretary of Mebasy
Just/ge
861 Original and heotograph to Department
(Copy to J. Graham Parsons, Beq.)
Inclosure: 1/ Axtract from House of Commons Debates, April 21, 1944.
my egraded Bernstein Unclassified
158
inclosure NO. 1 to Despatch GO, 987
dated April 22, 1944 from the
American Embassy, Ottawn, Carada.
(extract from the House of Commons Debates, April P1, 1944)
International MONETARY FUND
Principles Governing Constitution and Operation
Right Hon. 7. L. MACK/INZIE KING (Prime Minister): I desire to
take this opportunity of making an announcement which is being made
to-day in other capitals.
Over many months, officials of a number of the United Fations
have been giving close study to the international monetary arrange-
mente which will be desirable after the war. The house will
recall that on April 14, 1943, I tabled in the house a proposal
by United Kingdom officials for an international clearing union
and one by United States officials for an international stabilization
fund. On July 12, 1943, the Minister of Finance tabled tentative
draft proposals of Canadian experts for an international exchange
union. These proposals were all directed to the same ends, namely,
the achievement of international monetary arrangements compatible
with the balanced growth of international trade and with domestic
economic policies aimed at high employment and incomes, but there
was a considerable divergence in the methods suggested for achiev-
ing these objectives. Since that time, continuous efforts have
been made to reach a common view as to the principles to be
followed in post-war monetary arrangements.
I all glad to be able to announce that as a result of dis-
cussions among experts of the United Nations there is now a
consensus of opinion among those participating on the need for
the establishment of an international monetary fund and e
statement has been drawn UD of the principles which should
govern its constitution and oneration. I wish to make avail-
able, with the permission of the house, a document setting out
this statement of principles, but to conform to arrangements
with other governments, it will be tabled when the house re-
assembles at 8 o'clock.
In announcing this agreement on the principles which should
govern the constitution and operation of an international monetary
fund, I should like to make quite clear that what has been achieved
1s an agreement among experts. No government is in any way com-
mitted to this document or to the views of its experts. The
statement is made public at this time in order that there may be
public knowledge of the progress which has been made and informed
discussion of the proposals before governments proceed further,
This statement of principles on international monetary
relationships is conceived as part of a general plan of inter-
national economic cooperation, which as a whole will have for
its objects the progressive expansion of international trade,
high levels of employment, improved standards of living,
reasonable stability of prices and machinery for orderly
exchange arrangements. The Canadian Government is thoroughly
aware of the importance of establishing international monetary
arrangements favourable to the expansion of trade and employ=
ment, and is beenly sympathetic with the particular objects to
which
Regraded Unclassified
159
- = -
which this statement of principles is directed. It is squally
anxious that common views should be reached on other parts also of
a general plan of international economic cooperation, particularly
on a reduction in the barriers to trade expension, a reduction vital
to Canada's welfare and necessary if conditions favourable to stable
monetary arrangements are to be achieved. The view which will
ultimately be taken by the Canadien Government of any proposed
monetary arrangements will be creatly, perhaps decisively,
influenced by the progress which it is possible to make in
achieving agreement on other aspects of international economic
policy with which monetary arrangements are inseparably linked.
160
TREASURY DEPARTMENT
-mel
INTER OFFICE COMMUNICATION
Date
TO
Secretary Morgenthau
May 4, 1944
FROM Fred Smith FS
(1) I talked to Gallup yesterday and they are going
to seriously consider making another survey on the cabinet.
Attached is a copy of the last one. I am to be given a
definite yes or no within a few days.
(2) Attached is a report Shaeffer gave me last night.
The more evidence that turns up on this, the more it
looks as though the newspaper men queried were carefully
hand-picked to come up with the right answers. I don't
believe LOOK knows that this is the case. I think if the
working newspaper man of the city were given a chance,
their answers would be much different. Bob Hannegan might
consider having 8. third party make such a survey among
six hundred newspaper men instead of fifty Bureau Chiefs
and super columnists.
Attachment
Regraded Unclassified
The vote is:
The Gallup₁₆₁
Hrll
MASS
Kunx
18
Morgenthan
12
Poll
Wichard
10
Washington Post
R
It's
6
Walker. Biddle,
By George Gallup
Unine
Perkins, Jones
6%
Director, American Institute
No opinion
13
of Public Opin:on
JAN 28 1943
The percentages total more
than 100 per cent because some
Princeton, N. J., Jan. 28 -In
respondents named two or more
Cabinet members.
a public opinion survey from
Secretary Hull's prestige in
coast to coast, Cordell Hull, Sec-
the public's eye extends hack
retary of State, and Frank Knox,
over many years. A similar In-
Secretary of the Navy, receive
stitute survey conducted as long
the highest votes from the public
ago as July. 1938, found him
as Cabinet members who have
leading all Cabinet members in
done the best job with their de-
povularity.
partments during the past year.
Regardless of his Information,
Henry Morgenthau, Secretary
or the lack of It, concerning
of the Treasury; Claude Wickard,
present party affiliations in the
Secretary of Agriculture, and
Cabinet, the average American
Henry L. Stimson, Secretary of
approves a bipartisan Cabinet,
War, likewise stand high on the
as the following shows:
list, the study shows.
"P" you approve or disap-
The survey, conducted by the
prove of having some Repub-
Institute, found overwbelming
licins in the President's Cab-
public sentiment in favor of a bi-
inet?"
partisan Cabinet. More than
three-fourths of all voters in the
Anprove
77%
survey approve the idea of hav-
Disannents
4
inst home Republicans working
No opinion
19
with the President as Cabinet
members.
The general attitude is ex-
To measure attitudes toward
pressed in such typical comment
the Cabinet, interviewers for the
as those from voters:
Institute handed voters a card
"I don't think any party has a
corner on brains."
bearing the names of Cabinet
members, and asked:
"Mix 'em up: that's what
makes America."
"Whice of these Cabinet
The premium is on the man
members has done the best job
and his ability, rather than on
mill, his department during the
the party."
part year?"
When Secretaries Knox and
Stimson were appointed by the
President in the summer of 1940,
the Institute found general pub-
lie approval of this step to In-
162
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
TO Mr. Fred Smith
May 3, 1944
FROM Mr. Shaeffer CP CONFIDENTIAL
An extensive canvass of legitimate Washington news-
paper men has produced not a single instance of agreement
with the recent LOOK MAGAZINE poll. By "legitimate" I
mean those who actually cover regular assignments, and
exclude those who are allowed much editorial latitude such
as bureau chiefs, columnists, editorial writers and others.
I understand the questionnaire went only to bureau chiefs,
the majority of whom write one story 8. day out of
Washington along editorial, columnar or critical lines.
John MacCormac of the New York Times, a crack news-
paper man and author of two books, was representative of
the legitimate group in a conversation this afternoon. He
said the survey was "very unfair" and appeared to him to
be mainly the work of "idealists." He ventured the opinion
the questionnaire went to people such as his own Arthur
Krock, Frank Kent, David Lawrence, and John 'Donnell.
He said any fair minded person could never include
Secretary Morgenthau in the second classification of the
poll, pointing out Mr. Morgenthau's splendid success in
originating Lend-Lease, as well as his unqualified success
in financing the war thus far, as outstanding instances of
his worth. MacCormac included the good efforts of Vice
President Wallace, Attorney General Biddle, and Paul McNutt
in his denunciation of the "tarnished ten.
I think it would be & splendid stunt to suggest that
LOOK reverse the process now and let 52 government officials
give their opinions of the 10 best and the 10 worst news-
paper men in the Capital. This thought is original with
me, but I can't do anything about it because I would be
charged with taking up Secretary Morgenthau's cudgels at
his behest. What do you think?
Apropos of nothing at all how about "Give our Ship
of State a Bond voyage" as the slogan for the Fifth War
Loan?
163
52
LEADING
CORRESPONDENTS
PICK
The 10 Most
Men who run the war-and a Senator
who checks up on them-outdistance
home front figures in poll by LOOK
asked a representative cross-section of
100K able corps of Washington correspondents
to pick Simple questionnaires were sent to
L the the 10 most useful officials in the nation's 68
capital. top-flight writers for newspapers reflecting
shade of editorial opinion from ultra-con-
servative every to ultra-liberal. Replies came from 52,
who devoted much time, much thought, to their
selections. They were guided by Webster's defi-
nition of "useful" as "full of use; producing, or
having power to produce good
Representatives of LOOK and affiliated
publications did not participate in the poll, but
us
taking part were many writers who serve as
your eyes and ears in Washington. They ques-
tion officials at press conferences, report the
news, measure the reaction.
LOOK's rating (of 90 nominees) was based
1. General George C. Marshall
2. Cordell Hull
on total number of times an official was named
in the first ten. In addition to leaders pictured
Army Chief of Staff and member of the Joint and
This Tennessee-born statesman served 24 years in
here, the 10 runners-up were:
Combined Chiefs of Staff, he directs war strategy.
Congress, is in his twelfth as Secretary of State.
Senators Harry F. Byrd, Democrat, of Vir-
the lists of 44 correspondents, this great,
oft-spoken Secretary Hull was listed by 33
ginia: James F. Byrnes, Director of War Mobi-
O
grave general led LOOK's poll. Writers
correspondents. Their comments on his han-
lization; Sam Rayburn, Democrat, of Texas,
Speaker of the House of Representatives; Sena-
said he was a "cornucopia of military knowl-
dling of diplomatic phases of the war included:
for Robert A. Taft, Republican, of Ohio; Byron
edge," and "effective in the prosecution of the
"for his Latin-American and Russian victories,"
Price, Director of Censorship: Senator Alben W.
war." Others added "his record tells the story,"
"standout of the cabinet," "stabilizing factor,"
"he has the confidence of military and civilians,"
"outstanding statesman," and "towers above
Barkley, Democrat, of Kentucky: Chester
and "he, not the Commander-in-Chief, is run-
everyone." Others said he is a "sound, cour-
Bowles, Administrator of OPA; Representative
ning the Army." One reporter hesitated to rank
ageous fighter," "not as good as some rate him,
Joseph W. Martin, Jr., Republican, of Massa-
him ahead of the President, but was convinced
but able." One added that "his Moscow success
chusetts; Rear Admiral Emory S. Land, War
that "this military genius is more useful today."
should even convince Vice-President Wallace."
Shipping Administrator, and Judge Robert P.
Patterson, Undersecretary of War.
5. Donald M. Nelson
&-Franklin D. Roosevelt
4. Admiral Ernest J. King
He is 55, choirman of the War Production Board,
Aged 62, he is the first third-term President of the
He member of the Joint and Combined Chiefs of
commands the U. 5. Fleel, directs strategy Staff. as
in civil life wes chemical engineer and merchant.
United Siates, and its wortime Commander-In-Chief.
or co-ord`nating the tremendous task of pro-
The President's name was on the most useful
hirty-one correspondents picked Admiral record
ducing war materiel for the United Nations,
lists of 32 correspondents. It led more lists
King as among the most useful. "His of
Nelson was recognized as a most useful official
than any other-24. Writers commented: "The
tells the story," was the simple explanation
by 25 writers, They commented: "splendid
horse that can't be changed in midstream,"
Another measured the Navy leader against vic-
job," "tough man in a tough job," and "wise in
"after all, be runs the show," and "meets the
one. definition of useful, with recent Pacific
handling business and labor." Others indicated
tories the in mind, and found him "producing good." naval
reservations, noted "seems to have M-
challenge of our times." One called him "useful
but not indispensable," but another observed,
mentioned his "proven ability in well
some gained his balance and redeemed himself," and
"no available substitute." LOOK was told some
Others operations," and noted that he "works that
"delivered the goods after all." Another declared
with Marshall and Arnold to make a team history."
he was "doing a great job under a handicap."
correspondents omitted Mr. Roosevelt because
they didn't think that be should figure in the poll.
ought to get generous treatment from
26
LODE MAY 16
Regraded Unclas sified
164
seful Officials in Washington
6. Charles E. Wilson
7. Bernard M. Baruch
8. Harry 5. Truman
57, he is vice-choirman of the War Production
Home-front trouble-shooter in two wors, of 73 he's
He is 59, Senator from Missouri and chairman of
and, former president of General Electric Company.
special adviser to the Director of War Mobilization.
the Committee to Investigate the Defense Program.
Charing credit with Nelson for war-production
T
he financier who was chairman of the War
S
ole member of Congress among the top-rank-
achievements, Wilson was selected by 23
Industries Board in the first World War is still
ing 10, Democratic Senator Truman was on
errespondents who called him "the most com-
going strong. Eighteen correspondents called
17 lists. The continuing inquiry of his committee
etent emergency official," "farsighted busi-
him one of the most useful officials in this war.
keeps an eye on the men who run the war.
eseman" and "a doer with clear vision." Others
Comment included: old man common sense,"
Correspondents hailed him "for his committee
emmented that "he's really running the WPB,"
"balance wheel for government," and "a unique
investigating," "most effective critie of war-
he put efficiency into war production," and "he
adviser." Writers said he is "the nation's best
program conduct." They said his committee
enderstands and inspires production." Wilson
economic brain," "has real wisdom with power
"helps Congress to win the war," and "checks
tarted work at 13 in General Electric's ship-
to foresee," and "people believe him." His re-
waste and inefficiency." He was a World War I
ing department, became its president in 1940.
ports on rubber and reconversion won praise.
artillery officer, then a Missouri county official.
Writers turn to home front
for "least useful" officials
T
oday's hero in Washington may be
given an impossible job, become to-
morrow's target. Jobs as well as men
were appraised by correspondents who
also named for LOOK the officials they
thought least useful. Lists differed
widely, included 112 names, centered
on home-front figures. Several writers
said the men they named "never had a
chance," or were by-passed by war
agencies. Others disagreed with poli-
cies, theories. Ten officials listed most
often were:
Frances Perkins, Secretary of Labor and
first woman cabinet officer.
Henry Morgenthau, Jr., Secretary of the
Treasury since 1933,
Cloude R. Wickord, Secretary of Agricul-
ture since 1940.
Henry A. Wallace, Vice-President of the
9. Jesse H. Jones
10. Harold L Ickes
United States.
John E. Rankin, Democratic Representa-
Texas builder, banker, publisher, 01 Secretary of Com-
Self-styled "curmudgeon of the Cobinet," at 70 he
tive from Mississippi.
time he heads several government loun agencies.
is Secretary of the Interior and Fuel Administrator.
Joseph F. Guffey, Democratic Senator
ecretary Jones tied with Senator Truman
part-tongued Secretary Ickes engages in fre-
from Pennsylvania.
Hamilten Fish, Republican Representa-
with 17 votes. Lender of billions before and
quent skirmishes with Washington corres-
tive from New York.
during the war, he was termed "a workhorse
pondents and their editors, but 15 voted him one
Harry L Hopkins, Special Assistant to the
whose leadership has never been fully appre-
of the 10 most useful officials. They called him
President.
ciated here," and "a great balance wheel." Others
"FDR's best administrator," "most useful pack-
Francis Biddle, Attorney General of the
said be "sees through pipe dreams," "encourages
horse in the Cabinet," mind that keeps alive,"
United States.
pund business, hence employment," and "re-
"occasionally wrong but usually right." Others
Paul V. McNott, head of War Manpower
minds you there are still courage and common
acclaimed him "a good hatchet man," one who
and Federal Security agencies.
sense." He quarreled publicly with Vice-Presi-
President, he was the only New Dealer named.
"fights our native Hitlers." Except for the
dent Wallace, seemed to emerge the winner.
END
27
165
De Secretary said he would be glad to" co-.
Told Mr. Smith and Mr. Shaeffer that
operate on this.
166
TREASURY department
INTER OFFICE COMMUNICATION
DATE May 4, 1944
TO Mr. Fred Smith
FROM Mr. Shaeffer CP2
Partly because he thinks the Secretary was hit below
the belt by LOOK MAGAZINE, Nick Gregory of the PHILADELPHIA
INQUIRER is planning to do a piece for COLLIERS on Foreign
Funds Control in which he will give the Secretary a very
ardent pat on the back.
Nick points out that such an article would do much to
offset the bad taste left by LOOK inasmuch as COLLIERS has
many times the circulation of the picture periodical.
Also, he is completing a book on "Profiteering in
War", and there are a few questions involved which he
desires to discuss with Mr. Morgenthau.
He appreciates Mr. Morgenthau cannot service the
Foreign Funds story, but feels he would be glad to issue
a strong directive to the Division after hearing the out-
line of what Nick proposes to write.
Could such a conference with the boss be arranged?
TREASURY DEPARTMENT
167
INTER OFFICE COMMUNICATION
DATE
MAY 4 1944
TO
Secretary Morgenthau
FROM
Mr. Haas and
Subject: Current Developments in the High-grade Security
Markets; Bank Earnings
I. Government Securities Move in Narrow Range
The market for taxable Government securities has moved
within a narrow range during the present calendar year, but
the general trend has been upward. A week ago, most taxable
issues were selling at or near their highs for the year; but
they have since registered modest declines.
Fluctuations in the prices of the partially tax-exempt
securities have been somewhat greater than in the case of the
taxable issues. Since reaching their highs for the year in
the first week of March, partially tax-exempt bonds have de-
clined as much as 1-7/32 in the case of the longest-term bonds
which are now quoted at or around their lows for the year.
The decline in prices of the medium-term issues has been more
modest. It should be noted, however, that partially tax-
exempt Treasury securities are still selling at prices sub-
stantially above their pre-Pearl Herbor levels.
II. Excess Reserves Near Ten-Year Low of March 29
On the last weekly report date in April, excess reserves
of all member banks were $640 millions, only $10 millions above
the 10-year low established on March 29 (Chart I). In that
period of four weeks, Federal Reserve purchases of Government
securities amounted to $701 millions (net), more than enough to
offset the effects of gold outflow ($171 millions), increase of
foreign deposits ($65 millions), and increase of money in cir-
culation ($359 millions). However, the increase of required
reserves resulting from the growth of deposits was nearly $100
millions greater than the outflow of Treasury funds from the
Federal Reserve Banks. This factor, together with small changes
168
Secretary Morgenthau - 2
in various subsidiary items, held the net increase in excess
reserves to $10 millions between March 29 and April 26.
It should be noted, however, that between the dates of
these recent low points, excess reserves rose to $986 millions
on April 12. It is, of course, impossible to avoid week-to-week
fluctuations, sometimes of considerable magnitude, in the ex-
ceas reserves of 6,700 individual member banks. It would
appear, however, that the average level about which such flue-
tuations occur has been allowed to fall in recent weeks, in
which case the money market is approaching the Fifth War Loan
in a less liquid position than it enjoyed before previous loans.
This situation may be due in part to the diminishing supply of
Treasury bills in the market. The Federal Reserve Banks held
$7.4 billions, or 57 percent, of the total outstanding on
April 26. Weekly reporting member banks in central reserve
cities held $1.3 billions. The prospective increase in bill
offerings should result in a more liquid position.
III. National Bank Earnings at New High
National bank earnings rose to a new high in 1943, the
5,046 national banks active at the close of the year report-
ing net profits, after taxes, of $350 millions for 1943. This
compares with net profits of $243 millions in 1942 and the pre-
vious high of $314 millions reached in 1936.
By far the most important factor contributing to the in-
crease in bank earnings during 1943 was the increase in revenue
resulting from the substantial expansion of bank holdings of
United States Government securities. Interest and dividends
on securities in 1943 were $150 millions greater than in 1942.
This increase was offset in part by B. decline of $67 millions
of interest and discount on loans. Substantial gains in re-
coveries on securities and loans, and profite on securities
sold or redeemed also contributed to the better earnings record
in 1943.
Profits (after taxes) of national banks during 1943 repre-
sented & return of 8.9 percent on invested capital as of the
end of the year. This rate of return was moderately below the
rate of 10.0 percent earned in 1936, but has been exceeded in
only a few years since national bank earnings figures first
became available in 1869.
169
Secretary Morgenthau - 3
IV. Bank Stocks Continue to Rise
Since their lows at the close of April 1942, quotations
for the capital stocks of banks located inside and outside of
New York City have risen substantially. Stocks of banks in
New York City are currently as high as they were in the latter
part of 1939. Those of banks in other cities are now at their
highest levels since the fall of 1937 (Chart II). The Dow-Jones
Composite Average of sixty-five corporate stocks has also
registered a marked rise during this period, but the performance
of the bank stocks has been considerably better. The rise in
bank stock quotations during the past two years would seem to
indicate that the fears expressed in some quarters regarding
bank earnings prospects have not been shared by those who have
invested their funds in the capital of these institutions.
Attachments
170
Chart I
MEMBER BANK EXCESS RESERVES
1941
1942
NOV
JAN
MAR.
MAY
JULY
1943
SEPT.
1944
NOV.
JAN.
MAR,
MAY
JULY
SEPT.
NOV
JAN.
MAR.
MAY
DOLLARS
DOLLARS
Bullions
Billions
3.6
3.6
3.2
3.2
2.8
2.8
All Member Banks
2.4
2.4
2.0
2.0
1.6
1.6
1.2
1.2
.8
8
4
.4
o
o
1.2
1.2
8
.8
New York City Banks
4
4
o
o
-.4
- 4
4
4
Chicago Banks
o
o
4
-.4
NOV
JAN.
MAR.
MAY
JULY
SEPT.
NOV.
JAN.
MAR.
MAY
JULY
SEPT.
NOV.
JAN.
MAR.
MAY
1941
1942
1943
1944
"Change - recerve requirements
Office of - Secretary of the Trumpy
F-231-8
from - and -
171
Chart II
PRICES OF BANK STOCKS INSIDE AND OUTSIDE OF NEW YORK CITY
AND THE DOW-JONES AVERAGE OF 65 STOCKS
End of Month Quotations, 1936-39-100
PERCENT
PERCENT
150
150
140
5 New York City Bank Stocks
140
130
130
120
120
110
10 Other Bank Stocks
110
100
100
90
90
80
80
70
70
Dow-Jones Average
60
60
50
50
40
40
1936
1937
1938
1939
1940
1941
1942
1943
1944
Office of the Secretary of the Treasury
Division of Research and Statistics
P-281
172
Regraded Unclassified
Secretary Morgenthau
Mr. Hass
Subject: Current Developments in the High-grade Security
Markets; Bank Earnings
I. Government Securities Move in Narrow Range
The market for taxable Government securities has moved
within a narrow range during the present ealendar year, but
the general trend has been upward. A week ago, most taxable
issues were selling at or near their highs for theyear; but
they have since registered modest declines.
Fluctuations in the prices of the partially tax-exempt
securities have been somewhat greater than in the case of the
taxable issues. Since reaching their highs for the year in
the first week of March, partially tax-exempt bonds have de-
clined as such as 1-7/32 in the case of the longest-term bonds
which are now quoted at or around their lows for the year.
The decline in prices of the medium-term issues has been more
modest. It should be noted, however, that partially tax-
exempt Treasury securities are still selling at prices sub-
stantially above their pre-Pearl Herbor levels.
II. Excess Reserves Hear Ten-Year Low of March 29
On the last weekly report date in April, excess reserves
of all member banks were $640 millions, only $10 millions above
the 10-year low established on March 29 (Chart I). In that
period of four weeks, Federal Reserve purchases of Government
securities amounted to 0701 millions (not), more than enough to
offset the effects of gold outflow ($171 millions), increase of
foreign deposits (865 millions), and increase of money in air-
reserves resulting from the growth of deposits was nearly $100
culation ($359 millions). Novever, the increase of required
millions greater than the outflow of Treasury funds from the
Federal Reserve Banks. This factor, together with small changes
173
Secretary Morgenthan - 2
in various subsidiary items, held the net increase in excess
reserves to $10 millions between March 29 and April 26.
It should be noted, however, that between the dates of
these recent low points, excess reserves rose to $986 millions
es April 12. It 18, of course, impossible to avoid weak-to-veek
fluctuations, sometimes of considerable magnitude, in the 02-
cose reserves of 6,700 individual member banks. It would
appear, however, that the average level about which such flue-
tuations occur has been allowed to fall in recent weeks, in
which case the money market 10 appreaching the Fifth War Lean
in a less liquid position than it enjoyed before previous leans.
This situation may be due in part to the diminishing supply of
Treasury bills in the market. The Federal Reserve Banks held
87.4 billions, or 57 persent, of the total outstanding on
April 26. Weekly reporting member banks in central reserve
cities held $1.3 billions. The prospective increase in bill
efferings should result in a more liquid position.
III. National Bank Karnings at New High
National bank earnings rese to a new high in 1943, the
5,046 national banks active at the close of the year report-
ing net prefits, after taxes, of #350 millions for 1943. This
compares with not profits of #243 millions in 1942 and the pre-
vious high of #314 millions reached in 1936.
crease in bank carnings during 1943 was the increase in revenue
By far the most important factor contributing to the in-
United States Government securities. Interest and dividends
resulting from the substantial expansion of bank holdings of
This increase was effect in part by a decline of #67 millions
on securities in 1943 were $150 millions greater than in 1942.
of interest and discount on leans. Substantial gains in 10-
oeveries securities and leans, and prefits on securities
sold or redeemed on also contributed to the better earnings record
in 1943.
Prefits (after taxes) of national banks during 1943 repre- the
rate of of the 10.0 year. percent earned in 1936, but has been exceeded first
end sented a return This rate of return was moderately below in the
of 8.9 percent on invested cepital as of
only a few years since national bank earnings figures
became available in 1869.
Regraded Unclassified
174
Secretary Mergenthau - 3
IV. Bank Stecks Continue to Rice
since their lows at the close of April 1942, quotations
for the capital stocks of banks located inside and outside of
New York City have risen substantially. Stocks of banks in
New York City are currently as high as they vere in the latter
part of 1939. These of banks in other cities are new at their
highest levels since the fall of 1937 (Chart II). The Dow-Jones
Composite Average of sixty-five corporate stocks has also
registered a marked rise during this period, but the performance
of the bank stocks has been considerably better. The rice in
bank steck quotations during the past two years would seen to
indicate that the fears expressed in some quarters regarding
bank earnings prospects have not been shared by those who have
invested their funds in the capital of these institutions.
Attachments
Regraded Unclassified
175
Chart I
MEMBER BANK EXCESS RESERVES
1941
1942
NOV
JAN
MAR
MAY
JULY
1943
SEPT.
NOV.
1944
JAN.
MAR.
MAY
JULY
SEPT.
NOV.
DOLLARS
JAN
MAR.
MAY
Billions
DOLLARS
Billions
36
36
3.2
3.2
2.8
2.8
All Member Banks
2.4
2.4
20
2.0
1.6
1.6
1.2
1.2
.8
-
4
4
o
o
1.2
1.2
8
.8
New York City Banks
4
.4
o
o
-4
-.4
4
4
Chicago Banks
o
0
.
4
MAR.
JULY
SEPT.
NOV.
JAN.
MAR.
MAY
NUV
JAN.
MAR.
MAY
JULY
SEPT.
NOV.
JAN.
MAY
1944
1943
1941
1942
"Change - receive requirements
F-251-0
Office et - Recretary of - Treasury
from of - and -
176
Chart II
PRICES OF BANK STOCKS INSIDE AND OUTSIDE OF NEW YORK CITY
AND THE DOW-JONES AVERAGE OF 65 STOCKS
End of Month Quotations, 1936-39-100
PERCENT
PERCENT
150
150
140
5 New York City Bank Stocks
140
130
130
120
120
110
10 Other Bank Stocks
110
100
100
90
90
80
80
70
70
Dow-Jones Average
60
60
50
50
40
40
1936
1937
1938
1939
1940
1941
1942
1943
1944
Office of the Secretary of the Treasury
P-281
Division of Research and Statistics
177
MAY 1 1944
My dear Mr. Secretary:
I have received your letter of April 21
regarding the use of area within the Washington
Monument grounds to be used for the exhibition of
captured enemy air combat equipment as a means to
promote the sale of War Savings Bonds during the
Fifth War Loan Campaign, the recruitment of Air
Wacs and the stimulation of general morale.
After investigation by representatives of the
Army Air Forces and the Treasury Department it is
found that the alternate site suggested by you has
many advantages over the original proposed area.
I therefore want to thank you for your suggestion
and cooperation.
The Treasury Department will take complete
responsibility for the rehabilitation cost of the
site at the conclusion of the show.
I assume that the Department of Interior
(National Capital Parks Service) is agreeable to
joining the Army Air Forces and the Treasury
Department (D. C. War Finance Committee and the
Welfare and Recreation Association) in the sponsor-
ship of this exhibit, as suggested in my letter of
April 14.
I again thank you for your kind consideration.
Sincerely yours,
(Signed) II Mergenthau, Jr.
Honorable Harold L. Ickes
Secretary of the Interior,
Washington 25, D. C.
H Lynch/vb
Regraded Unclassified
COPY
178
THE SECRETARY OF THE INTERIOR
WASHINGTON
Apr. 21, 1944
My dear Mr. Secretary:
I have received your letter of April 14 requesting the use of
the area within the Washington Monument grounds bounded by Fourteenth
and Fifteenth Streets, Constitution Avenue and Madison Drive from June 4
to September 4, inclusive, for the exhibition of captured enemy air com-
bat equipment as an instrumentality in promoting the sale of War Sw ings
Bonds during the Fifth War Bond Campaign, the recruitment of Air WAC's,
and the stimulation of the general morale.
This Department is anxious to cooperate with the Treasury and
War Departments in the accomplishment of their objectives, but the use
of the above-described area would be detrimental to the park values
within the site. The large trees located therein were subjected to hard
treatment during the "Back the Attack" show held in the Washington
Monument grounds in September 1943, and it will require considerable
time and care before they will regain normal vigor. The lawn also re-
quired rehabilitation and the now turf is just beginning to establish
itself. It would be a mistake to subject the area to intensive use
during the coming season.
I suggest, as an alternate site, an area immediately south of
the proposed site. This area is within the Monument grounds and is
bounded by Madison and Jefferson Drives, Fourteenth and Fifteenth Streets.
is an open space, a feature which should lend itself more readily to the
installation of exhibits. Mereover, it has the advantage of being on a
higher elevation and therefore would be more readily observed by the
public. The conveniences of a comfort station are provided in close
proximity to this area. It also is located within view of the Sylvan
Theatre, which it is understood will be used for the presentation of
special features in connection with the War Bond Drive.
I am agreeable to granting a permit for the use of the last-
named area, provided that the Treasury Department will assume complete
responsibility for its rehabilitation at the conclusion of the show.
It has been estimated that the cost of rehabilitation would be ap-
proximately $1,000.00.
Sincerely yours,
(SGD.) Abe Fortas
Acting Secretary of the Interior
Hon. Henry Morgenthau, Jr.
Secretary of the Treasury
179
WAR FINANCE COMMITTEE CHAIRMEN
W. Randolph Burgess
New York, New York
G. Ruhland Redmann
Philadelphia, Pa.
Renslow P. Sherer
Chicago, Illinois
Walter W. Head
St. Louis, Missouri
Philip J. Trounstine
Cleveland, Ohio
Robert H. Moulton
Los Angeles, Calif.
Merrill Cooley
San Francisco, Calif.
F. Winchester Denio
Boston, Mass.
Eugene C. Pulliam
Indianapolis, Ind.
Frank N. Iseby
Detroit, Michigan
Franklin D'Olier
Newark, New Jersey
(Secretary planned to phone these men, but
changed his mind)
5/4/44
180
O
Original to Mr. Gamble
Photostats to Mr. Bell
Mr. Smith
181
war DEPARTMENT
WASHINGTON
MAY 4 1944
The Honorable,
The Secretary of the Treasury.
Dear Mr. Secretary:
Officers in the headquarters of service commands
for liaison with the Treasury Department and State War Finance
Chairmen have been designated as follows:
First
Major William T. Coloney, QMC
Second
Colonel George W. Hinman, Jr., GSC-
Third
Colonel James P. Wharton, Inf.
Fourth
Major Harold A. Tyler, MI
Fifth
Major Joseph F. Deutschle, GSC
Sixth
Lt. Col. Oscar N. Taylor, GSC
Seventh
It. Col. Robert N. Reed, AGD
Eighth
Captain John L. Briggs, AUS
Ninth
Lt. Col. Irvin Clawson, Inf.
Military
District of
"ashington Colonel William F. Rehm, GSC
You will note that six of these officers served in
a similar caracity during the Fourth War Loan Drive.
Let me amin assure you of our desire to cooperate
fully with the Treasury Department in the forthcoming drive.
Sincerely yours,
Henryt Elimson
Secretary of War.
PORVICE
Regraded Unclassified
182
TREASURY DEPARTMENT
XR
INTER OFFICE COMMUNICATION
Date
May 4, 1944
TO Secretary Morgenthau
FROM Fred Smith PR
Re: Schenley Indictments
I think it is understandable that when we turn
over evidence on such cases to the Department of Justice,
the Department of Justice handles matters by itself up
until the time the case breaks. It is too much to expect
them to think of us.
I am suggesting to Shaeffer that our Public
Relations enforcement man, Coffelt, get in touch with
the Department of Justice, with the help of Joe O'Connell,
and with the idea of cooperating on the publicity that
results from such cases.
183
May 3, 1944
Fred Smith
Secretary Morgenthau
Re: Schenley Indictments
I cannot understand why in a case like this, where
the evidence was furnished by us to the Department of Justice,
that we do not get some credit for it in the newspapers.
I wish you would look into this matter and report to me.
184
May 3, 1944
MEMORANDUM FOR SECRETARY MORGENTHAU
JLS
From: Assistant Secretary Sullivan
Re: Schenley Indictments
Mr. Dwight Avis of the Alcohol Tax Unit informs me
that the Alcohol Tax Unit instigated the above investigations
and carried them on to the point where it became desirable
to have grand jury inquiry. The Alcohol Tax Unit then called
upon the United States District Attorney of New Jersey to
assist in the investigation through the use of a grand jury.
The Department of Justice came into the case at our request.
185
TICKER NEWS
WCNS
1:01 P.M.
May 2, 1944
The Department of Justice announced that Schenley Distillers
Corporation of New York and 11 other defendants have been charged with con-
spiring to deal in a liquor black market involving 15,000 cases of liquor
and with falsifying Internal Revenue reports.
The indictment alleged a conspiracy based on an agreement
between Schenley and another defendant to dispose of 15,000 cases of
liquor over and above the monthly allotments assigned by Schenley to
its regular distributors.
The indictment asserted that the bulk of the liquor passed
into the hands of black market dealers in Georgia, Texas and Louisiana,
where it was sold above ceiling prices.
186
May 2, 1944
MEMORANDUM FOR SECRETARY MORGENTHAU:
Ths
From: Assistant Secretary Sullivan
Re: Schenley Distillers, Inc.
This case relates to an alleged conspiracy to violate the
Price Control Act by Schenley Distillers, Inc., Benjamin F. Pross,
Executive Business Manager of the Wine, Liquor and Distillery Workers
Union No. 1, Cluff and Pickering, a wholesale liquor dealer and prin-
cipal Schenley distributor in New York City, the F & A Distributing
Company, Newark, New Jersey, also a Schenley distributor, Frank Mayer
& Company, & Newark, New Jersey wholesale liquor dealer, Edward
Gottehrer, Jack Shapiro and Kenneth Levine, whisky brokers, by intro-
ducing into the black market approximately 10,500 cases of Schenley
whisky at over ceiling prices ranging from $6 to $17 & case through
sales to retail liquor dealers in the States of Georgia, Texas and
Louisiana.
The conspiracy had its inception following a labor dispute
which arose as a result of the efforts of the Schenley Company to
dismantle the rectifying plant of the Oldtime Distillers, Newark, New
Jersey, a subsidiary. After a strike was threatened, the dismantling
of the plant was suspended and after negotiations between the represen-
tatives of the Union and certain officials of the Schenley Company, an
187
- 2 -
arrangement was arrived at whereby the Union agreed to the dismantling
of the plant conditioned on the corporation's making a special alloca-
tion of 15,000 cases of whisky to one or more wholesale liquor deslers
to be named by the Union. As a result of this arrangement 10,500 cases
of whisky were allocated to Cluff and Pickering and on the insistence of
the Company 4,500 additional cases to Austin-Nichols & Company, a New
York wholesale liquor dealer, the liquor to be delivered to each concern
in three equal monthly installments.
The Union's explanation of this arrangement was that these
wholesalers had agreed at the insistence of the Schenley Corporation
in light of this additional allocation to hire certain employees formerly
employed by the Oldtime Distillers. The officials of the Schenley Cor-
poration denied this allegation and insisted that the arrangements with
Cluff and Pickering were effected by the Union. The investigation made
by the Alcohol Tax Unit and the grand jury disclosed that it was in-
possible to identify the employees hired by these concerns. The inquiry
further disclosed that Benjamin F. Pross, acting in his capacity as
business manager of the Union, took advantage of the labor dispute to
secure this allocation of whisky and through subsequent connivance with
these concerns and individuals already referred to, channeled the
whisky secured into the black market. The investigation did not indicate
that any of the whisky allocated to the Austin-Nichols Company was
channeled into the black market.
No evidence was developed indicating that any of the cash "side
money" paid in connection with these transactions was received by the
188
- 3 -
Schenley Corporation or any official thereof. There was, however,
evidence which indicated certain officials of the company either knew
or should have known that the liquor in question was being channeled
into the black market. This no doubt accounts for the grand jury nam-
ing the Schenley Corporation as a defendant.
This memorandum didated by Stewart Berkshire, over telephone.
189
May 4, 1944
My dear Mr. President:
In answer to your memorandum of April 8th in re-
gard to the appointment of Mr. Shivers, the work of
the Collector of Customs in Hawaii during wartime is
very important, and as far as I know is being well
done by the present Acting Collector, a career em-
ployee. Because of the distance and difficulty of
communication, the Bureau of Customs attaches value
to having in charge there during the war period 8. man
who is thoroughly familiar with Customs law and pro-
cedure. For the reason we have not made any recom-
mendation for an appointment.
We have been informed that Mr. Shivers would like
to return to Hawaii and more or less retire into the
position of Collector of Customs. We have not in-
vestigated him, but all the voluntary reports we have
had about him are to the effect that he is a man of
fine character.
Sincerely yours,
Jr.
The President,
The White House.
COLLECTOR OF CUSTOMS
AT HONOLULU
THE SECRETARY OF THE TREASURY
WASHINGTON
April 17, 1944
morantum to the President:
This refers to your memorandum of April 8 and
08 attachment, which I am returning.
The position of Collector of Customs at Honolulu
has been vacant since May 5, 1941, when Collector Doyle
died. The Democratic Territorial Central Committee
submitted several names but we did not find any of the
candidates fully satisfactory. Then came Pearl Harbor
and we decided it would he unwise to disturb conditions
by recommending any arrointment: We have an excellent
Assistant Collector, Marde C. niberly, who has been
carrying on as Acting Collector. The office is doing
an efficient wartime job.
Robert Snivers was formerly F.B.I. agent-in-charge
at Honolulu. ..e are informed he sought transfer to the
mainland because the strain had affected his health. he
spent some time in Florida and is now, we understand,
assigned to the Los Angeles office. he would like to
return to the islands, where he has many friends. While
We have made no formal Investiration of him, the character
of his recommendations indicates he is 8 high-grade man
and probably would make & better-than-average Collector
f an ordinary Customs district.
nonolulu is not, nowever, an ordinary district. It
is the headquarters of an important theater of military
perations. The closest cooceration with the military
rvices is escential. Due to the distance and the diffi-
alty of promot communication the Collector must make many
dependent decisions on matters that normally would be
ferred to aushington. These are decisions that in
neral require broad knowledge of Customs law and pro-
dure. The Fureau of Customs has confidence in the
formed judgment of the Acting Collector, a career man
long experience in the district. It could not have
he same confidence in the judgment of a new Collector
thout the specialized experience which the present
Regraded Unclassified
- 2 -
Acting Collector possesses, regardless of the can-
didate's general character and native ability.
For these reasons I have refrained from making
any recommendation for appointment of a Collector at
Honolulu and believe that an appointment should not
be made there until after the war.
Secretary of the Treasury.
Regraded Unclassified
April
TC.,
Brought in ::- Mrs.
"Secretary wants to talk to you short
thin."
4/18 -
The Secu yeard
"Let's do Nii
m the piece -
WES.
FROM: MR. GASTON
quar
193
THE WHITE HOUSE
WASHINGTON
April 8, 1944.
MEMORANDUM FOR
THE SECRETARY OF THE TREASURY
THE ATTORNEY GENERAL
Can you do this?
F.D.R.
194
THE WHITE HOUSE
WASHINGTON
April 7, 1944
MEMO FOR THE PRESIDENT:
Mr. Hung Wai Ching of Hawaii, came
to see me this afternoon and he wants you to
know that the Hawaiinna, both Democrate and
Republicans, are extremely anxious to have
& Mr. Shivers of the F.B.U. appointed to a
position hic} has been vacant for a year
in the Customs Service in Hawaii. Everyone
out there 13 in agreement on this.
The difficulty AD arently 1s that
Mr. Shiv- rs 18 in the FBI ani this is a
Treasury appointment.
Mr. Shivers story 8PPMB to be rather
unique. He 1A a Tennesseenn by birth and has
served for many years in Hnwaii for the FBI.
He hal the complete confidence of the Army and
Navy and after the Pearl Harbor attack, they
gave him complete control of the picking up
of suspect people. He has the confidence of
labor and the emp oyers. The people of mixed
backgrounds All trust him And they would like
to have him in the post-var period RB their
soldiers core home. Be '111 be glad to
spend his remaining years in Hawaii. He has
been twenty-three years with the FBI.
Governor Stainbeck and Rep.
Ferrington are for "1n. They beg you to
talk to Henry Morgenthau end make this
appointment now.
E.R.
195
MX
May 4, 1944
MEMORANDUM FOR THE SECRETARY
From: Mr. Blough
(For your information; no action required)
Attached is a summary discussion of the fourth
interdepartmental meeting on the incentive effects
of taxation, held in the Treasury, April 20, 1944.
RB
Attachment
Regraded Unclassified
196
Fourth Meeting on the Incentive Effects of Taxation
The fourth in a series of meetings on the Incentive
Effects of Taxation was held on April 20, 1944 in the
Treasury Department and was attended by representatives
of various Government agencies (see attached list).
The discussion of business taxation was continued from
the previous meeting.
Additional consideration was given to the removal
of the existing discrimination in favor of loan financing
by broadening the tax base, 1.e., by disallowing the in-
terest deduction. The suggestion was made that the main
step in the direction of equalizing the attractiveness of
equity and debt financing would be the disallowance of
interest on new capital. While it was admitted that the
definition of new capital would raise problems, it was
suggested that refunding or borrowing of new capital to
meet maturing debt obligations should not be treated as
new capital.
Since this adjustment would have a very limited
effect by preventing the present situation from getting
worse, it was further suggested that the deduction of
interest on old capital might be made contingent upon
the application of the tax savings from the interest
deduction to debt retirement. Or, instead of penalizing
the company 1f debt were not reduced, 2. reward might be
given by allowing a credit of a certain percentage of
equity investment used to retire indebtedness.
Under the approach requiring liquidation of debt
with the tax savings from the interest deduction, it
was evident that a considerable length of time would
elapse before existing debt was liquidated. For example,
under a 25-percent tax it would take a hundred years to
retire a 4-percent bond issue.
The question was also raised whether the impact of
the disallowance of the interest deduction would, in fact,
be mitigated if the tax savings resulting from this allow-
ance had to be used for the reduction of indebtedness.
If the objection to the disallowance of this deduction
primarily stems from the fear of a cash shortage, this
alternative requirement would be open to a similar ob-
jection, although with the same cash outlay the equity
Regraded Unclassified
197
- 2 -
investment would, of course, be gradually increased. If,
on the other hand, the transitional problem is rather
one of avoiding a sudden increase in the tax burden on
certain equity shareholders, th_ rule that reduction in
indebtedness should be effected only to the extent of the
tax saving 16 not especially relevant. The allowance of
the interest deduction could be conditional upon the re-
tirement of a stated percentage of outstanding debt. Or,
an alternative standard to take care of hardship cases
would be the use of a. certain percentage of net income
(after deducting interest) to be required for use in debt
payment.
The question was raised whether the effect of these
changes, by encouraging debt repayment, might not have a
deflationary tendency, particularly under depressed cir-
cumstances. If funds which would otherwise have been
spent in ways which would raise the level of employment
are instead used to repay debt, the net effect may be
deflationary. This result would be more likely to follow
if the change in capital structures came about through a
reduction in the level of capital rather than a relative
shift in capital from equity to debt.
There was general agreement that, if tax revision
was aimed solely at eliminating the discrimination between
equity and debt capital, broadening the corporation tax
base would be the more satisfactory method of achieving
this result. However, if broader considerations are in-
volved, such as the desire to eliminate the discrimination
against certain kinds of unearned income, then an approach
which would narrow the corporation tax base by integrating
it with the individual tax base would need to be adopted.
The discussion then turned to this phase of the problem.
The first question raised was whether or not undis-
tributed corporate profits should be taxed. It was
generally agreed that over time undistributed earnings
should be taxed in the same way as other income. There
were, however, differences of opinion 8.8 to the most
appropriate time for the imposition of this tax and the
point at which to levy it.
198
- 3 -
It was held that retained earnings should not be
taxed to the corporation if they were invested in new
assets. However, the question was raised whether such
encouragement of new investment should be tied up with
any particular source of funds such as retained earnings.
The point was also made that under this approach retained
earnings would represent a very privileged source of in-
vestment funds. Their exemption would free them from any
taxes, whereas other sources of investment funds would
have to pass through the screen of the individual income
tax, Furthermore, it was admitted that outright exemp-
tion of undistributed earnings would not be feasible
since many corporations have used retained earnings to
acquire control of other corporations rather than to ac-
quire assets or reinvest.
The question then arose - if undistributed earnings
are to be taxed, how are they to be taxed and to whom?
It was pointed out that the British method of taxing cor-
porations and the flat-rate undistributed-profits tax
(given sufficient carry-overs) were identical systems of
taxing corporations. Some advantages were claimed for
the undistributed-profits tax on the grounds of greater
ease of administration, and the elimination of the need
to keep the corporation tax rate in line with the first
bracket rate applicable to individuals.
The partnership method of taxing corporations was
presented 8.8 the only way of retaining the progressive
features of the tax system. Objections were raised to
this method not only on the basis of the theory under-
lying it - control by stockholders over retention or
distribution of earnings -, but also on administrative
grounds. It was pointed out that the problem of allo-
cating earnings to shareholders would be extremely
difficult for large corporations, and that the intro-
duction of averaging into the system would bring enormous
complications.
Treasury Department, Division of Tax Research April 29,
1944
199
List of people attending Interdepartmental Meeting
on Incentive Taxation, April 20, 1944
Federal Trade Commission
- Wm. H. England
Federal Reserve Board
- Evsey D. Domar
R. A. Musgrave
Securities and Exchange Commission
- Roger Foster
Leslie T. Fournier
Walter Louchheim, Jr.
Department of Commerce
- Howard R. Bowen
S. Morris Livingston
Bureau of the Budget
- Gerhard Colm
War Production Board
- P. Bernard Nortman
Herbert Stein
Office of Price Administration
- Walter Salant
Social Security Board
- Daniel Gerig
Department of Agriculture
- James G. Maddux
Bushrod W. Allin
Board of Investigation and Research
- Ronald B. Welch
Federal Depositors Insurance Corporation - Clark Warburton
Treasury Department
- Henry C. Murphy
Louis Shere
F. N. Campbell
A. G. Hart
M. Farioletti
Walter Heller
E. Gordon Keith
L. S. Hellborn
E. Cary Brown
SECRET
SECRET
By Authority of
200
WAR DEPARTMENT
The Commanding General
HEADQUARTERS OF THE ARMY AIR FORCES
Army Air Forces AFIAN-JEU
WASHINGTON
MAY 4 1944 JPT
Date
Initials
MEMORANDUM FOR THE SECRETARY OF THE TREASURY
1. With respect to your verbal inquiry concerning the iron
and steel industry in Luxemburg and the Pirelli Chemical Works in
Italy, we have the following information.
2. The Pirelli Chemical Works, located in Milan, Italy, was
engaged in the production of rubber, part of which vas synthetic and
from which tires were manufactured. This factory was hit. by bombs
the latter part of 1943 and in October 1943 was estimated to be two
thirds destroyed.
3. The iron and steel industry in Luxemburg is estimated to
produce approximately 2,000,000 tons of steel per year. There is no
report of any of these factories in Luxemburg having been hit by
bombs.
4. The efforts of the Eighth Air Force, as you probably know,
have been directed primarily against targets where aircraft or air-
craft components are manufactured and ball bearings are made, and
more recently against communication targets, military objectives and
airfields mostly in France, the Low Countries, and Western Germany.
The iron and steel industry of Luxemburg, as you can readily see,
does not fit into the type of target which now has priority on the
Eighth Air Force's operations. In fact, the steel industry has never
been & priority target of the Combined Bomber Offensive.
5. It may be of interest to you to point out that total German
steel production is estimated to be approximately 35,000,000 tons per
year, of which less than 20,000,000 tons are required for military
purposes. 14,000,000 of these tone are produced in the Ruhr area.
The quality of steel produced in the Ruhr is much higher than that
produced in Luxemburg, primarily due to the use of Swedish ore and more
modern processes and factories. The Ruhr area has been heavily
attacked by the R.A.F. Futhermore, Luxemburg is one of the occupied
countries of Europe and so far the R.A.F. has not attacked targets in
such occupied areas.
QUICTORY
BUY
ENITED
STATES
WAR
BONDS
489
STAMPS
SECRET
201
M
May 4, 1944
MEMORANDUM FOR THE SECRETARY'S INFORMATION
You requested that I furnish you with a summary
of the January "freeze" of Argentine assets which I
reviewed with you last night.
On January 12, 1944 Secretary Hull reviewed with
you the Argentine situation. He stated that they were
satisfied that the Bolivian revolution was inspired by
Argentina. He said that within the next few days he would
issue a statement on the matter and "rawhide" Argentina.
Simultaneously they planned to recall Ambassador Armour
and freeze Argentine assets.
On Friday, January 22, 1944, in your absence,
several of us accompanied Mr. Paul to Acheson's office where
we were informed that the President and Mr. Hull had agreed
on the following Argentine program which was to be announced
by Secretary Hull on Monday noon, January 24, 1944:
1. That we would not recognize the new Bolivian
Government;
2. That we were aware of Argentina's part in
fomenting the Bolivian revolution;
3. That we were recalling Ambassador Armour
(Argentina) and Ambassador Boal (Bolivia);
4. That we were freezing Argentine assets.
Bonsal explained that the purpose of the meeting was
to determine the type of freezing program we should adopt.
He made it very clear that State was strongly of the opinion
that we should announce the issuance of a general license
covering Argentine trade at the same time we announced the
freezing. Acheson in particular felt strongly about this.
Regraded Unclassified
202
- 2 -
We opposed the issuance of a general license cover-
ing trade and told State that we could guarantee 24-hour
service on all trade applications. We agreed that we would
not interfere with trade transactions without State's
consent. We argued, however, that the simultaneous
announcement of the general license would destroy most of
the psychological effect of freezing and at the same t ime
make it far more difficult for us to modify our program
without public announcement. We also told them that you
would have strong objections to the general license and we
would have to consult you before we could agree to its
issuance.
Finally Acheson stated that he would have to take
the matter up with Stettinius. He returned shortly and
stated that Hull and Stettinius preferred a general license
but would yield to Treasury if we accepted the responsibility
of not interfering with trade. We told Acheson we were
prepared to accept this responsibility.
On Saturday, January 23, 1944 we sent the Executive
Order by Secret Service Agent to Hyde Park for the President's
signature. That same evening State sent a cable to all their
Missions in Latin America informing them that Argentina would
be frozen on Monday.
On Monday morning we received the signed Executive
Order from the President and Stephen Early's clearance on
the press release. While we were in Mr. Paul's office
(about 10 o'clock) getting the various other documents
signed, Stephen Early called Mr. Gaston and reported that
he had received instructions to hold up the Executive Order
and press release since no action might be taken. About
that same time State called Mr. Paul and said that there
might be a delay.
Mr. Paul advised you immediately. Shortly after
11 o'clock you called Mr. Paul and informed him that you
had talked with Stettinius; that Stettinius had been in
touch with Armour, who had reported that Argentina was about
to break with the Axis and wanted us to hold up action. Just
before 12 o'clock you called again and advised that you had
203
- 3 -
spoken to Stettinius again, that Stettinius had discussed
the problem with the President, and that it had been decided
that freezing action would not be taken at that time.
Meanwhile we learned that State had issued its
announcement but had avoided reference to Argentina and the
recalling of Armour.
The next day Donald Hiss told us "off the record"
that the Argentine Foreign Minister, Gilbert, had calle
Armour urgently (either Sunday night or Monday morning).
He pleaded that we hold up our action and promised that
Argentina would break with the Axis and take effective
measures to wipe out Axis activities in Argentina. We also
learned that Gilbert had called in the British Ambassador
about the same time and made the same plea. It also appe ared
that Gilbert had been warned of the impending action,
probably by the Brazilian Ambassador.
I have the further recollection that London
(probably Churchill) cabled either the President or Hull
urging us to hold up action.
Thereafter President Ramirez of Argentina did break
with the Axis as promised and he was promptly forced to
resign by Colonel Peron (dominant man in Colonel's clique)
and Farrell was made the puppet President of Argentina.
This was the end of Argentine cooperation with us in taking
effective measures against the Axis and the beginning of a
whole series of actions directed against American and
British interests in Argentina.
State refused to recognize Farrell and Colonel
Peron (who had been the chief antagonist against the
United States and Britain) began to lose power in favor of
General Perlinger, Minister of War, who was even more
extreme than Peron in his hatred of the United States.
204
- 4 -
Cable No. 1069 of April 26, 1944 from Armour
reports that Perlinger's position is growing stronger and
that Peron is apparently attempting to be more moderate
toward the United States in an effort to strengthen his
position. Armour concludes:
"A reorientation of the anti-American policy
of this Government and the possibility of constructive
changes in the Cabinet are diminishing. That we are
engaged in an endurance test with a regime which appears
to be confident it can hold out longer than the united
front of the nations refusing to maintain normal relations
with it is the situation which must be faced by us.
aos
205
MAY 4 1944
My dear Mr. Ambassador:
This will introduce to you Mr. William H. Taylor,
who will serve as United States Treasury Representative
on the Combined Civil Affairs Committee, London, under
arrangements approved by the Departments of State, War
and Treasury in Washington.
Mr. Taylor is thoroughly versed in the financial
and monetary aspects of civil affairs problems. He
landed with the invasion forces in North Africa and was
Treasury Representative on-the North African Economic
Board until his return to Washington in March 1943. After
his return, Mr. Taylor was given primary responsibility,
under Mr. White, for the handling of all civil affairs
problems affecting the Treasury.
You will also be interested in knowing that Mr. Taylor
was alternate United States member on the Chinese Currency
Stabilization Board, and served in that capacity until
interned in Hong Kong in January 1942.
I have asked Mr. Taylor to act generally as Treasury
Representative in London on all matters arising out of the
anticipated military operations as well as on those matters
specifically before the Combined Civil Affairs Committee.
Mr. Taylor has been instructed to keep you fully informed
and to consult with you about these matters. In order
that I may be kept fully informed and that I may communicate
with Mr. Tayler, I would greatly appreciate it If you would
permit the transmission of cable massages through the
Embassy for this purpose.
I have asked Mr. Tayler to cooperate fully with you
and the nembers of your staff. Needless to add, I hope
Regraded Unclassified
206
- 2 -
that you will not hesitate to draw upon his experience and
his services whenever you feel that he can be helpful to
you.
Very truly yours,
(Signed) II. Morgenthau, Jr.
Secretary of the Treasury
Honorable John G. Winant,
American Ambassador,
London, England.
LCA :meu
5/3/44
Regraded Unclassified
207
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE May 4, 1944
TO
Secretary Morgenthau
FROM Mr. White
Subject: U. S. S. R. and the League of Nations
1. On December 11, 1939 the League of Nations requested
the U.S.S.R. to cease hostilities and negotiate a settlement
with Finland.
2. On December 12, 1939 in a note from Molotov to the
Secretary of the League of Nations the U.S.S.R. stated "the
Soviet Government thanks you Mr. President for the kind in-
vitation to take part in the discussion of the Finnish ques-
tion. At the same time the Soviet Government informs you it
is not in a position to accept this invitation for the
reasons given in the telegram of December 4 from the Commis-
sariat of Foreign Affairs sent in respect to a communication
from the Secretary General". (The December 4th telegram con-
tained an explanation by the U.S.S.R. for the hostilities with
Finland).
3. On December 13, 1939 a League of Nations Committee
of 13 report, condemned the U.S.S.R. for aggression against
Finland, urged cooperation and aid to Finland and alleged
that Russia had by her own action placed herself outside the
League Covenant. (This report was drafted by a sub-committee
composed of representatives of Britain, France, Sweden,
Bolivia and Portugal).
1939
4. On December 14, the U.S.S.R. was formally declared
by resolution of the Assembly of the League no longer 8. member
of the League of Nations.
208
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE May 4, 1944
TO
Secretary Morgenthau
FROM
Mr. White
HDW
Subject: U.S. - U.S.S.R. Negotiations on Extension of
Lend Lease Credits.
Summary of Agreement Reached to Date
A. No substantial agreement has yet been reached in
the conversations held by Harriman with Mikoyan on the pro-
posals put forward by the Foreign Economic Administration
and the State Department with regard to the extension of
lend lease credits under the Fourth Protocol for capital
equipment of post-war utility.
B. The U.S.S.R. has expressed its satisfaction that
reconstruction equipment which will aid in the further pro-
secution of the war will be made available under lend lease
and has agreed to repay in full for such equipment as is
undelivered at the termination of hostilities. No agreement
has been arrived at, however, with regard to the terms of
repayment - or the classification of equipment items as be-
tween those which are primarily of war or post-war utility.
C. The U.S.S.R. has agreed to transmit detailed infor-
mation regarding equipment requirements under their long
range reconstruction program, to the U. S.
209
APPENDIX
Summary of Negotiations
A. Early in March, Harriman was informed that the FEA
and State Department approved the continued shipment of such
capital goods under lend lease as would contribute to the
fullest prosecution of the war. It was proposed, that in view
of the fact that some of the equipment may be undelivered at
the conclusion of hostilities that the U.S.S.R. agree to take
equipment in certain categories, undelivered at the conclusion
of hostilities, under a separate contract calling for full pay-
ment with appropriate terms of interest and amortization.
Harriman was also requested to procure a detailed list of items
required by the U.S.S.R. under their long range reconstruction
program.
B. After preliminary conversations, on the above propo-
sal, the Russians suggested an interest rate of 1/2 of 1% with
repayment not to begin until the 16th year; payments thereafter
to be made in equal annual installments over a twenty-year per-
iod.
C. Harriman then advised the State Department that he con-
curred with the U.S. proposal that an interest rate approximat-
ing the present rate of U.S. Government long-term securities
should apply to the Russian credits. He also recommended that
an accelerated schedule of repayment should be adopted five
years after commencement of the credits and the total credits
extended should be amortized over 30-year period. Harriman
advised that agreement would have to be reached on each lend
lease item to be shipped as to whether it fell under Article
II of the proposed agreement which covered direct war purposes,
or Article III which covered post-war items. Harriman further
recommended that the detailed terms of the proposed agreement
be negotiated in Washington.
D. In response to Harriman's cable, the State Department
set the following terms as the basis for further negotiations--
an interest rate equal to the present average rate of cost on
the U.S. public debt or 2.1%; amortization over 20 years after
a period of 3 years of grace.
Regraded Unclassified
210
- 3 -
It was estimated that the value of lend lease shipments
to the U.S.S.R. under the Fourth Protocol for the next 15
months would aggregate $300 to $500 million.
E. When informed of the proposed terms for the Fourth
Protocol, Mikoyan stated that he did not understand the
distinction drawn between goods under Article II and Article
III inasmuch as all projects submitted under the Fourth Pro-
tocol would be useful for the prosecution of the war and
could be quickly installed. Mikoyan also stated that he
hoped the financial terms now under consideration in Washing-
ton could be improved. Mikoyan then provided an estimate
of U.S.S.R. equipment requirements under the Fourth Protocol,
to be delivered by the end of 1945, valued at $1 billion.
211
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE May 4, 1944
TO
Secretary Morgenthau
FROM
Mr. White HDW
Subject:
Exchange Rates for Western Europe
1. The Belgians have recommended a rate of 176.625 Belgian
francs to the pound or 43.827 francs to the dollar (1 Belgian
franc equals $.022817).
The Dutch have recommended a rate of 10.691 Netherlands
guilder to the pound or 2.6529 guilder to the dollar (one
Netherlands guilder equals $.37695).
These rates have been computed on the basis of the cross
rate of $4.03 to the pound.
2. The new rates set for the Belgian franc and for the
Netherlands guilder represent a depreciation of about 30 per-
cent as compared with the official pre-war rate.
3. The French are inclined to set the rate for the franc
at $.02. However, we have not received official word as to the
official French recommendation with regard to the rate.
M. Mendes-France, Minister of Finance for the French Committee
of National Liberation, is expected in Washington on Friday to
discuss the French rate of exchange with you.
4. The Treasury has not received any official word as
yet from the Norwegian Government-in-Exile as to the rate of
exchange it proposes to set. The British, however, have in-
formed us that the Norwegian Government has proposed a rate
of 20 Norwegian crowns to the pound or 4.9628 Norwegian crowns
to the dollar. (The Norwegian crown equals $.2015). This
represents a depreciation of about 13 percent as compared with
the pre-war rate.
212
EXECUTIVE OFFICE OF THE PRESIDENT
WAR REFUGEE BOARD
14
INTER-OFFICE COMMUNICATION
DATE
TO
Secretary Morgenthau
MAY 4 1944
Mr. Pehle
FROM
I am attaching herewith a copy of
the report of the War Refugee Board for April 24
to 29, 1944.
Justine
Attachment.
213
Developments during the week of
April 24 - 29, 1944
1. COOPERATION WITH OTHER GOVERNMENTS
(a) United Nations
(1) Great Britain
In a cable from Ambassador Winant we have been
advised that, in line with our request, the British Govern-
ment has been asked to approve the diversion of a Swedish
ship from the Greek relief fleet for the ourpose of carrying
additional refugees from Constanza to Turkey. Because of
the urgency of the matter, Winant simultaneously approached
the head of the Relief Section in the British Ministry of
Economic Warfare. Although the reply of the British Govern-
ment has not yet been received, Winant reports that the MEW
official has now agreed to such a diversion. Choice of the
ship to be diverted would be left to the Swedes, though use
01 the "S.S. Bardalanda" seems most likely if Russian and
German naval and air safe-conducts can be obtained.
We are asking Winant to take up with the Swedes
the matter of the use of such a boat as soon as formal
British approval has been obtained. We are also asking
Winant to inform the Swedes that the necessary financial
arrangements for the use of the vessel will be made by the
Board.
In response to a line of action previously suggested
to Winant, both the British Foreign Office and the Ministry
of Was Transport have now been approached on the matter of
enlisting the assistance of the British representative on
the Mediterranean shipping board (MEDBO) in exploring the
possibility of arranging for the use by the Turkish Govern-
ment of an Italian ship during the projected diversion to
evacuation operations of a Turkish vessel. "Generally
favorable" instructions are reported to have gone forward
on this score.
Information available to the Board indicates that
Switzerland and other neutral countries contiguous to enemy-
held territory would be in a position to receive larger
numbers of children and presumably of adult refugees from
enemy oppression if facilities for additional imports of
clothing and foodstuffs were granted. Accordingly, we are
cabling Winant, asking him to undertake to obtain from the
214
- 2 -
appropriate British authorities prompt concurrence in our
position that definitive assurances should be given to the
neutrals that additional food and clothing will be allowed
through the blockade, subject to appropriate safeguards,
in amounts sufficient to meet increased needs arising from
their reception of refugees. We have been advised in this
connection that a meeting held at the Ministry of Economic
Warfare in London in March, to discuss with the Swiss the
possibility of their receiving still more child refugees
from German-held territory, touched upon this question.
Dorothy K. Brown (Mrs. La Rue Brown) has been
named assistant to the Board's Special Representative in
Great Britain. The Board's Special Representative for that
country is yet to be named.
(11) Russia
In a recent cable to Moscow we indicated to Ambassa-
dor Harriman that, subject to his approval, we proposed to
name Robert J. Scovell, former representative of the Amer-
ican Red Cross in Russia and now on the headquarters staff
of that organization, as Special Representative of the Board
in the Soviet Union with the designation as Special Attache
to the Embassy on war refugee matters. Harriman has replied
that in his opinion it would be definitely inadvisable that
such a representative be sent to Russia. Matters of this
sort, he pointed out, must be handled with high officials
of the Soviet Government who do not receive attaches or
junior officers of the Embassy. It was also suggested that
such a representative would not be permitted to travel about
the country or to develop direct contacts with various
agencies of the government. In the event of any substantial
increase in the volume of war refugee work in Russia, however,
Harriman indicated that he would wish to review the situation
and at that time express his views as to the type of repre-
sentative required for the work involved.
(111) French North Africa
In D. despatch from the U. S. Legation in Algiers
we have been advised that the question of the issuance of
special instructions by the French Committee of National
Liberation to implement cooperation with this Government on
war refugee matters has been discussed with a French official.
The issuance of a declaration of policy similar to the Presi-
dent's statement of March 24 is also reported to be under
consideration.
215
- 3 -
(1v) Australia
According to a cable from Canberra the U. S. Lega-
tion there has sent a formal note to the Minister for Exter-
nal Affairs, stressing the urgency of the refugee question
and asking for Australian cooperation. A reply stating
the position 07 the Australian Government has been promised
at an early de se.
(v) India
We have been advised through the U. S. Mission in
New Delhi that B. reply has been received from the Indian
Government in response to the Mission's note requesting
cooperation in war refugee matters. India's refugee problem,
according to this reply, is "probably greater than that of
any other allied or neutral country. An official statement
accompanying the reply indicates that in addition to some
500,000 evacuees from British colonies in southeast Asia and
from China, an estimated 3500 Poles and a scattering of
Europeans of various other nationalities have been given
refuge in India since the outbreak of hostilities. The
Indian reply points to the possibility of a "further lia-
bility for 8,000 additional Poles." It is also suggested
that the advance of the Allied armies into Burma may well
result in a renewed flow of refugees from Burma into India.
"In the light of the present food and accommodation problems
and the general economic situation" the Indian Government
concludes that it is not in a position to accept more war
refugees.
(v1) Greek Government-in-Exile
In a recent report from the American Consul General
in Istanbul we were advised that the task of rescuing many
hundreds of Jews in Greece now threatened with deportation
and death is primarily a question of organization and
financial support. We have in turn asked the Consul General
to develop in greater detail his suggestions for the evacus-
tion of Greek Jews and non-Greek refugees in cooperation
with local patriots and Allied escape services operating in
that area. We have also indicated that we believe it is
possible to arrange for the necessary funds and assistance.
In a cable to Ambassador MacVeagh and Minister
Kirk in Cairo we are indicating that, subject to their approval,
we propose to appoint Charles R. Joy, acting executive
director of the Uniterian Service Committee, as the Board's
Special Representative for Greece, Egypt, and Yugoslavia,
with the designation as Special Attache to both the Embassy
and the Legation on war refugee matters.
216
- 4 -
(b) Neutrals
(1) Spain
Ambassador Hayes reports that he has transmitted
to the Spanish Ministry of Foreign Affairs a copy and trans-
lation of the President's statement of March 24, with the
request that it be given the fullest measure of publicity in
Spain. The only mention known to have been made on this
subject in the Spanish press to date was that contained in
a brief syndicated despatch.appearing in Madrid newspapers.
We have recently asked Hayes to inform appropriate
Spanish officials of the plight of the 400 Sephardic Jews,
Spanish nationals recently interned in Athens. This approach
toward obtaining their recognition as Spanish nationals and
their consequent protection is in addition to that which we
requested Tittmann to make through the Vatican.
(11) Portugal
We have asked Minister Norweb and Board Representa-
tive Dexter to lend all possible assistance to the represen-
tative of the American Jewish Joint Distribution Committee
in Lisbon in his efforts to obtain 2. Portuguese ship for
the purpose of evacuating refugees from Rumania to Turkey.
(111) Sweden
It has been reported that several Polish ships
carrying food and clothing originally intended for the Po-
lish civilian population have been tied up for some time
at Stockholm. We are asking Minister Johnson and Board
Representative Olsen to attempt to verify this report and,
in the event it proves to be accurate, to report in detail
on the ships and their cargoes.
(1v) Eire
Minister Gray reports from Dublin that an affirma-
tive reply has been received from the Irish Department of
External Affairs in response to our request that Eire guar-
antee to receive 500 Jewish refugee children from Switzerland.
The Irish indicated, however, that so far they have had no
success in securing permission for Jews to leave occupied
countries. Accordingly, it was suggested that this Govern-
ment ask the Swiss Government to obtain the necessary permits,
even though the Irish Charge d'Affaires in Berlin has been
instructed to make a similar request.
217
- 5 -
(c) Latin American Countries
(1) Haiti
We have been advised by Charge d'Affaires Chapin
at Port-au-Prince that a reply has been received from
President Lescot with respect to Haitian cooperation in war
refugee matters. Lescot pointed out that, contrary to
previous reports, it was his intention that Haiti's contri-
bution -- in the form of profits from the state lottery --
be made available to the National War Fund, United Nations
Relief Wing, rather than to the War Refugee Board.
Lescot indicated, however, that the Haitian Govern-
ment is now looking into the possibility of organizing through
the state lottery a special drawing, from which all profits
would be turned over to the Board.
(11) Panama
The U. S. Embassy in Panama has transmitted a
memorandum from the Panamanian Foreign Office in connection
with the proposal that Panama cooperate with this Government
in war refugee matters. In this memorandum the Ministry
of Foreign Relations indicates that it will lend its "decided
cooperation" to the realization of the principles represented
in the Board's work.
(111) Peru
In a cable from Lima Ambassador White reports that
he has requested a statement from the Peruvian Foreign Min-
ister on the matter of possible cooperation in the rescue
and relief of refugees.
(a) Conditions in Hungary
In a cable from Minister Harrison in Bern we have been
advised of a report from Budapest to the effect that while
Jews are not now to be concentrated into a ghetto, they will
be assigned to districts where "terroristic aviation attacks
are to be expected." The Hungarian press early in April
is said to have announced the evacuation of residential
quarters in the exposed factory and other districts of the
capital and its suburbs, and it is apparently into such
areas that the 400,000 Jews reportedly residing in the
Hungarian capital are to be moved.
218
- 6 -
2. RESCUE AND RELIEF PROJECTS
(a) Relief through Vatican to Jews in Rome
The American Jewish Joint Distribution Committee has
asked the British Foreign Office to return to it the $20,000
remitted some time ago to London in connection with the
provision of relief to Jewish refugees in Rome. These funds
are to be placed in a blocked account in the United States
in the name of Delasem, the recipient organization in Rome.
London and Bern have been requested to notify Delasem that
the JDC is establishing an additional credit uo to $100,000
for the balance of 1944, against which Delasem is authorized
to borrow in Italy.
(b) JDC Food Parcels
On April 26 the Treasury Department, upon our recommen-
dation, issued a license to the JDC permitting it to send
up to $5,000 to its representative in Lisbon for the purchase
in Portugal of food for individual parcels to be distributed
to internees in enemy territory. This license will enable
the JDC to send food parcels "on an experimental basis"
to internees in a camp at Celle near Hanover, Germany, and
is in addition to the food package licenses previously issued
to the JDC permitting it to supply food parcels to internees
for Czechoslovakia, Poland and the Netherlands.
(c) Evacuation of Children from France to Spain and Portugal
We have been advised by Minister Norweb of a report from
the JDC representative in Portugal that six children have
arrived in Spain as the first in a series of groups being
brought through the Pyrenees by professional guides.
Board Representative Dexter has brought to our attention
certain proposals on the part of Isaac Weissman, representa-
tive in Portugal of the World Jewish Congress, concerning
the eventual destinations of refugee children arriving in
Portugal from France. We are advising Dexter that the
problem of where to send the children who are being rescued
should be determined after they have reached safety, on
the basis of facilities existing at that time.
(a) Evacuations from Spain to Lyautey
We have recently been advised through the JDC repre-
sentative in Lisbon that the French are refusing to clear
for admission to Camp Lyautey Sephardic Jews arriving in
Spain after March 1 of this year. On the basis of the
219
- 7 -
reported ruling, 50 such refugees now in Perpignan, France,
awaiting admission into Spain, 8,8 well as others still en
route, would be excluded, since the Spanish Government will
do nothing to rescue Sephardics unless it is assured that
they will be removed from Spain soon after arrival.
In a cable to Board Representative Ackermann we are
asking that the report be investigated. If the report proves
to be correct, we are instructing Ackermann to take up at
once with French representatives the matter of obtaining a
reversal of the ruling.
(e) Evacuation to and through Turkey
Ambassador Steinhardt has advised us of the safe arrival
in Istanbul of the "S.S. Bellacitta" with 152 Jewish refugees
on board. We have also been advised of the safe conclusion
of the second voyage of the "S.S. Milka" with 272 refugees
on board. 907 refugees were evacuated during the month of
April from Constanza across the Black Sea to Turkey. All
of the refugees have been permitted transit through Turkey
to Palestine.
Another report from Steinhardt indicates that informa-
tion has reached the International Red Cross representative
in Ankara to the effect that if the projected destination
of the "S.S. Tari" were changed from Haifa to Iskenderun
(Alexandrette), a German safe-conduct for the ship might
be granted. Inasmuch as such a change of destination would
involve reshipping the refugees from Iskenderun, presumably
on some United Nations' ship, Steinhardt has advised the
IRC representative that such a change would be agreenble
only after all hope of securing a German safe-conduct to
Haifa has been abandoned.
We are cabling Steinhardt that his action with respect
to the proposed change of destination has our approval.
For his information, however, we are relaying information
received through the JDC to the effect that the Turkish
representative of-the Jewish Agency can probably arrange
for coastal schooners to convey refugees from Iskenderun
on to Haifa, 1f the voyage of the "Tari" were to terminate
at Iskenderun. We are suggesting that Steinhardt explore
this possibility, since expediting the German sefe-conduct
may become e. paramount issue.
In connection with pressing for the German safe-conduct
to Heifa, we have been advised that the IRC representative
has now conferred with von Papen on three occasions; the
220
- 8 -
Turkish Minister for Foreign Affairs has also personally
twice requested such a safe-conduct. Steinhardt indicates
that he is satisfied that von Papen has in turn been pressing
for the safe-conduct from his government.
(f) Evacuations to Italy and the Mediterraneen Area
Board Representative Ackermann reports from Algiers
that he has again discussed with a Yugoslav Partisan general
the problem of evacuations through Partisan territory. We
are advised that from 15 to 20 schooners with 2 speed of at
least ten knots are needed immediately. Tne need for a
number of smaller vessels for the Journey from the Yugo-
alavian mainland to the Delmation Islands is also reported.
Ackermann further indicates that it may be possible to obtain
certain 200-ton ships, for evacuation purposes, provided
their allocation can be arranged through MEDBO.
At our request, Admiral Land of the War Shipping Admin-
istration has agreed to instruct Kallock, the WSA repre-
sentative in that area, to explore with Ackermann the shipping
problems involved in the projected evacuations.
(g) Recognition of Latin American Passports
The U. S. Embassy in Caracas has at our request taken
up with the Venezuelan Foreign Minister the matter of the
reported deportation of internees from Camp Vittel. As a
result, full Venezuelan cooperation has been promised in
connection with the projected exchange against German
nationals of internees holding Latin American passports or
consular papers. The Foreign Minister has also promised
that his government will approach the Germans, through the
protecting power, with a demand that the rights of internees
holding Venezuelan passports or claiming citizenship on the
basis of Venezuelan consular documents be respected.
Ambassador Hayes has reported from Madrid in this
connection that representations have been made to the Spanish
Foreign Office with regard to the internees reportedly
removed from Vittel. This approach to the Germans through
the Spanish Government is in addition to representations
previously made on our behalf through the Government of
Switzerland. Hayes reports that although the Spanish Govern-
ment indicated that it had no information on the matter,
it has given assurance that it will attempt to learn the
facts as soon as possible with a view toward endeavoring to
arrange for the return of these refugees.
221
- 9 -
Minister Harrison has advised us that, in line with
the instructions despatched by State, he has requested the
Swiss Government to extend protection to two internees in
the Camp Vittel group who recently claimed U. S. citizenship,
pending action on their claims.
(h) Reinst:cement of Turkish Citizenship to Refugees in
France
According to a JDC report, there are approximately 6,000
Turkish nationals in France, the status of whose repatriation
to Turkey is still undertain. We have recently been advised
that approximately 800 Jews in this category are in increasing
danger of deportation. Lists of these refugees are said to
have been forwarded to Ankara by Turkish consuls, who are
now awaiting a decision concerning their status. We are
pressing the Turkish Ambassador in this country to lend
every possible assistance in effecting the reinstatement of
Turkish citizenship to these refugees, similar representations
having already been made by Ambassador Steinhardt to the
Turkish Minister for Foreign Affairs in Ankara.
(1) Joint Exchange Project
In order to clarify certain aspects of the Joint
exchange project which the World Jewish Congress has urged
that we undertake, Minister Harrison in Bern has been asked
to forward, if possible, more detailed information with
respect to how the exchange proposal originated and with
respect to the date and manner of the Germen Government's
reported acceptance.
Justice
222
Regraded Unclassified
CABLE TO AMBASSADOR WILSON, ALGIERS, FOR ACKERMANN FROM WAR REFUGEE BOARD
Please refer to your No. 1337 of April 22, 1944.
As previously indicated, and after discussions with Hoffman, we are
exploring all possibilities in Tugoslav situation as outlined by you and
Saxen, There are, of course, numerous problems involved in the situation,
some of which probably cannot be dealt with promptly. However, we have
arranged for a sume qual - to $50,000 to be furnished to the Refugee
Committee in Bari for the resoue and relief of refugees regardless of
race, religion or nationality. In order that this amount may be made
available promptly and in a manner to ensure its best use, it is
suggested that you report immediately the form in which the remittance
should be made₄ Specifically would lire be satisfactory? If 10, it is
contemplated that payment will be made in Bari by the Army Finance
Officer there. If you consider it advisable that payment be made to a
representative of the Board for transfer by him to the Yugoslav committee,
so advise us,
This is WRB Cable to Algiers No. 7
May 4, 1944
11:45 A.M.
JBF:EFR:bbk - 5/3/44
223
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
American Embassy, Ciudad Trujillo
TO:
Secretary of State, Washington
DATE:
May 4, 1944
NUMBER: 219
CONFIDENTIAL
With reference to Department's April 15 circular
airgram Foreign Office informed Embassy this morning
that Deminisan Government would receive a minimum of
1000 refuges children up to 16 years of age, and a
maximum of 2000. Upon their arrival in this country,
he stated that private institutions subsidized by the
state would take care of them.
NEWEEGIN
224
ORIGINAL TEXT OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
AMERRASSY, London
DATED:
May 4, 1944.
NUMBER: 3560
SECRET
CARLE TO LONDON
FROM WAR REFUGEE BOARD TO WINANT
Reference your no. 3224, April 19, 1944.
Please advise Finance Officer of British Foreign
Office that American Jewish Joint Distribution Come
mittee hereby requests return to them of 4,968 pounds
eighteen shilling tenpence recei ved by Foreign
Office on March 8 from American Jewish Joint Distri-
bution Committee for relief in Rome. This sum will
be hold by American Jewsh Joint Distribution Come
mittee in a blocked account on its books in name of
Delases until after ware Please request the Foreign
Office to notify Delasem, Bone branch, of foregoing
and that American Jewish Joint Distribution Committee
is - etting up in the same blocked account in the
United States an additional eredit up to $100,000
for the balance of 1944 against which Delasem is
authorised by American Jewish Joint Distribution Com-
mittee to berrow.
HULL
225
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
American Embassy, London
TO:
Secretary of State, Washington
DATED:
May 4, 1944
NUMBERS 3641
SECRET
Following is for War Refugee Board's attention.
A copy of a cable from the Gruenbaum Jewish Agency in
Jerusalem concerning deportation of Jews from Hungary was
left at the Embasey by Messre. Locker and Linton, two
representatives of the London office of the Jewish Agency
for Palestine, who called here this afternoon. It is stated
in this eable that depèrtation of Jews from Hungary has al-
ready began and that 24,000 had been deported from Karpathggus
to date, in addition to genreal deportation of Pelash refugses
whose names are known to the Hungarian police, according to
information received. The Jewish agency for Palestine is
urged by the cable from Jerusalem to do everything possible to
prevent further deportation and it states, that the influence
of the Pope might be a decisive factor.
It was stated by Mr. Locker that the above facts had been
given to Dr. Kullman of the other governmental committee in
London and to the British Foreign Office but that since it was
felt American influence in Axis Satellite States was consider-
able, he desired to bring the matter to the attention of the
State Department and the War Befugee Board. The Embassy informed
him that the matter would immediately be brought to War Refugee
Board's attention.
WINANT
226
Regraded Unclassifie
PARAPHRASE OF TELEGRAM RECEIVED
FROM: AMEMBASSY, LONDON,
TO:
Secretary of State, Washington,
DATED: May 4, 1944.
NUMBER: 3642.
SECRET
FOLLOWING IS FOR WAR REFUGEE BOARD'S ATTENTION
Reference is made to my immediately preceeding
telegram dated May 4, 1944, no. 3641.
A copy of the cable from Meilech Neustadt in
Tel Aviv was furnished to the Embassy by Mr. B.
Locker of the Jewish Agency for Palestine, mentioned
in my cable.
This cable which Locker provided stated in
effect that 30 Rumanian Jews are still confined in
Bucharest and that it is feared their lives will be
endangered if they are tried within the next few
days as may happen. It is requested by Neustadt
that everything possible be done through the Red
Cross to increase pressure for theliberation of
these Jews.
It was stated by Mr. Locker that these Jews
are the remainder of a large group arrested in
Bucharest for their activity in aiding the escape
of Jewish refugees from Hungary and other areas.
It appears that all but these 30 have been released
and it was stated by Mr. Locker that the matter
had been discussed with Dr. Kullmann of the IGC
and it was hoped that it would be possible for the
War Refugee Board to do something through their
agents in behalf of these people as it was agreed
that under present circumstances the Red Cross was net
in position to bring adequate pressure for their
release.
WINANT
227
Regraded Uncla
PARAPHRASE OF TELEGRAM RECEIVED
FROM: AMEMBASSY, LONDON
TO:
Secretary of State, Washington
DATEDs May 4, 1944
NUMBER: 3653
SECRET
The Department's cable of April 28, 1944, no. 3434 from
the War Refugee Board and the previous are referred to here-
with.
With respect to the diverting of a Swedish vessel for the
purpose of evacuating refugees, a favorable reply has now been
received from the Foreign Office. The ben on code cables for
foreign diplomats other than American or Russian has been put
into effect since the receipt of War Refugee Board's cables
under reference, in which the Embassy was requested to take
the matter tup with the Swedish Minister in London as soon as
favorable reply was received from the British and we presume
that the Swedish Minister would not be able to communicate with
his Government in cipher regarding this matter. Consequently
I hesitate to approach him and it is suggested that the War
Refugee Board my under these circumstances desire to communicate
with the Swedish Government directly either through our Legation
in Stockholm or through the Swedish Legation in Washington,
It was stated by the Foreign Office in its reply that it
has no objection to the BARDALANDA being used forthis purpose
and is willing to grant a safeconduct provided the Government
of Sweden agrees and that safeconducts are obtained from the
Russian Government and from the German Government on behalf
of itself and its Allies. The letter from the Foreign Office
states that it is understood that the BARDALANDA is at Piraeus
at the present time and is due to return to Sweden, leaving
the Greek relief service. The Foreign Office letter adds
that the Swedes have put forward proposals that on her way
home this ship should collect the cargo of various imports for
Sweden.
We have not communicated with Ambassador Harriman concern-
ing the procuring of a safeconduct from the Soviet Government.
WINANT
228
San Salvador, El Salvador, May 4, 1944
No. 1531
CONFIDENTIAL
SUBJECT: Admission of Jews and other war refugees
into El Salvador.
The Honorable
The Secretary of State
.Washington
Sir:
I have the honor to refer to the Department's con--
fidential circular airgram dated April 20, 7:35 p.m., and
to report that I conveyed its purport to the Salvadoran
Minister for Foreign Affairs at an interview on the morn-
ing of April 25, which was supplemented by a note later
the same day, a copy of which is attached hereto.
I have now received from Dr. Avila a personal letter,
the English version of which is transcribed below:
"San Salvador, May 2, 1944.
My dear Mr. Thurston:
I take pleasure in advising you that my Govern-
ment views with sympathy and in principle is in agree-
ment with the suggestion to which your esteemed letter
of April 25 refers to the end that El Salvador would
229
- 2 -
grant refuge to orphaned or abandoned children now
within the territory occupied or controlled by the
enemy, and that to this end it would construct a suitable
building; but, before reaching a final conclusion it
would desire to know whether the cost of the building,
the feeding and education etc. of the children would
be borne by the War Refugee Board; and finally all the
expenses which that Board would be willing to meet for
more or less 100 children.
I beg you therefore to give me this information
if convenient.
For your kindness I thank you in advance.
I am, as always your affectionate friend.
/s/ A. R. Avila"
When I spoke to Dr. Avila he made no mention of the
fact that his Government might expect us to defray the
cost of a building in which to lodge the refugees under
consideration, but did inquire whether the War Refugee
Board would defray all costs of transporting the refugees
to El Salvador, maintaining them here for such time as
might be decided upon, and of their eventual removal from
the country. His letter makes no reference to the latter
point and introduces the new one relating to the cost of
the building.
Respectfully yours,
Walter Thurston
To the Department in
original and hectograph
Enclosure
Copy of letter to
Dr. Avila dated 4/25/44
711
WT/mgm
230
Enclosure to despatch no. 1531, dated 5/4/Wi, from the
American Embassy at San Salvador, El Salvador, on the
subject: Admission of Jews and other war refugees into
El Salvador.
San Salvador, April 25, 1944
My dear Dr. Avila:
In confirmation of my statements this morning I take
pleasure in advising you that my Government has now
authorized the American consular officers in Switzerland
to issue up to four thousand quota immigration visas to
refugee children up to sixteen years of age without regard
to religion, nationality or stateless status, to close
relatives residing in enemy, enemy-occupied or controlled
territory, or to the availability of means of transportation
to the United States. The purpose of this authorization
is to facilitate the escape to Switzerland of orphaned or
abandoned children by giving assurances to the Swiss Govern-
ment that these children will not remain in Switzerland
after the termination of hostilities in Europe. The
authorization contains provisions for the continued re-
newal of the visas until such time as adequate transporta-
tion facilities to the United States become available.
Private sources have posted bond with the Attorney General
of the United States to assure this Government that the
immigrating children will not become public charges.
Should there be private agencies in El Salvador willing
and able to undertake a program for the care of refugee
children, the War Refugee Board is confident that it can
make arrangements to provide these agencies with adequate
funds for the maintenance, education and welfare of as many
children as the Government of El Salvador would be willing
to admit. Should it prove necessary, funds would undoubtedly
be available to meet transportation expenses from Switzerland
to this country.
With respect to the foregoing, it would be gratifying
were the Government of 31 Salvador to give assurances to the
Swiss Government of its willingness to accept & certain num-
ber of refugee children in a similar manner. It is conser-
vatively estimated that there are in France alone èight to
ten thousand 'abandoned or orphaned refugee children.
231
- 2 -
Should the Government of El Salvador be willing to make
this humanitarian offer, it is suggested that the Salvadoran
representative in Bern issue the appropriate number of 1mmi-
gration visas and maintain their validity until suitable
transportation facilities from Switzerland to El Salvador
become available. The special representative of the War
Refugee Board attached to the American Legation in Bern will
be glad to cooperate with the Salvadoran representatives in
this as well as in all other refugee matters.
I shall be grateful if Your Excellency will inform me
as quickly as may be possible of the attitude of the Govern-
ment of El Salvador toward this question and, if the sugges-
tion above' presented is favorably received, what number of
children it is prepared to admit into this country.
Cordially and sincerely,
78/ Walter Thurston
232
ORIGINAL TEXT OF TELEGRAM SENT
FROM:
Secretary of State, Washington
E
American I gation, Helsinki
DATED:
May 4, 1944
NUMBER: 104
SECRET
War Refugee Board sends the following.
Refer your 341 of April 20. While granting the desir-
ability of an official Finnish statement on victims of Hasi
oppression and persecution Var Refugee Board feels, and the
Department agrees, that the phitical factors as reported by
you may be considered to outweigh any advantages that might
asorue through the issuance at this time of such a statement
by the Finnish Government.
The Board would appreciate, however, your employing delay-
ing tactics with the Foreign Office in the event that the state-
ment might be considered opportune and of value at some later
date.
With reference to movement from Finland to Sweden of vari-
our refuges groups and Finnish Jewish community listed your 303,
April 3, Minister Johnson has just reported that Swedish Govern-
ment does not believe that minority groups in Finland are in
serious danger from the Germans but that refuge would probably
be extended if Finnish Government requested Swedish Government
to allow entry of these persons on ground that they may be in
jeopardy in Finland,
Should circumstances so warrant, you are in your discretion
authorised to approach appropriate officials of the Finnish Govern-
ment in this connection. Please keep abreast of developments
which make desirable the movement from Finland of potential
victims of the Gestage in the event the Germans take action in
Finland paralleling that taken by them in Hungary, Rumania and
Bulgaria, and keep the Department advised.
Foregoing repeated as Department's no. 829 to Stockholm,
HULL
233
SECRET
AIRGRAM
FROM: Port-au-Prince, Haiti
DATE: May 4, 1944, 4 p.m.
Rec'd: May 8 8pm
The Secretary of State,
Washington.
A-248, May 4, 4 p.m., 1944.
Department's A-144, Mai, 1944, 10:45 a.m.
Minister for Foreign Affairs states that only occasions
on which question of ultimate destination with respect to
immigration and recognition of documents has arisen has been
in recent conversation on the subject with me. He said
Vatican Charge here had spoken to him only on very general
lines of safeguarding refugees in Axis controlled countries
and could ascribe report mentioned in Department's airgram
to some perhaps distorted opinion expressed on the subject
by the Haitian Charge in Bern. Minister for Foreign Affairs
confirmed his understanding that there was no question of
any physical admission of refugees into Haiti involved.
Despite foregoing he stands on previous position with
regard to takkng any positive steps in this connection. He
cites the continuing efforts which had been made throught
the Swiss Government to recover all Haitian passports
fraudulently issued or dishonestly acquired and states that
his Government cannot now very well ask the Swiss Government
to do the reverse. He refers to measures taken here to this
end when notice of cancellation of citizenship was given
by Decree in December 1942 (please Bee Embassy despatch
no. 1623 of December 12, 1942, also no. 1578 of November
13, 1942). He also points to the case of Arpad Blesch
(Embassy despatch 1576 of November 13, 1942 and previous)
and redalls the efforts which had been made through the
intermediary of the Swiss Government to have his Haitian
passport taken from him.
On the other hand, the Foreign Minister stated that he
remained entirely sympathetic with the motives which have
prompted the United States Government to take this initiative
and was prepared to accept any formula which could take above
reservations into consideration. He said that he would be
agreeable to any plan wherein the United States, as agents
for the Haitian Government, took the immediate responsibility
to implement the protection which the recognition of docu-
ments might afford the refugees in question. In other words
he 1s entirely willing that the American Government act within
its discretion
Regraded
Unclassified
234
- 2 -
the Haitian Govt.
its discretion to obtain the desired objectives without/ having
to take any position on its own account which would only re-
verse its present position and might also be prejudicial to
such bona fide holders of Haitian documents who might new or
later claim full protection. (Embassy's A-244, May 3, 11 a.m.)
CHAPIN
VC/let
235
ORIGINAL TEXT OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
American Legation, Lisbon
DATED:
May 4, 1944
NUMBER:
1252
SECRET
From War Refugee Board to Norweb.
Please deliver the following message to Dr. Joseph Schwartz,
242 Run Aurea, Lisbon, from Moses A. Leavitt of the American Jewish
Joint Distribution Committee:
We requesting Finance Office British Foreign office
return $20,000 to us which we will hold as blocked account
for repayment after war. This done at request Delasem Rome.
We also requesting London and Bern to notify Delasem that we
setting up additional credit up to $100,000 for balance this
year against which they authorized borrow. Remitting $5,000
to you for food parcels for internees Celle. This is
experimental remittance and would appreciate your keeping us
informed through Legation channels results transmissions.
Remitted April allotment Jewish Agency. Do you recommend
continuation? We have received no reports from Hirschmann
or Resnik and believe you should be kept informed if grants
are to be continued.
THIS IS WRB LISBON CABLE NO. 10
HULL
Regraded Unclassified
236
PARAPHRASE OF TELEGRAM RECEIVED
FROM
: AMLEGATION, Lisbon
TO
: Secretary of State, Washington,
DATED
: May 4, 1944.
NUMBER : 1343
CONFIDENTIAL
FOLLOWING IS FOR WAR REFUGEE BOARD'S ATTENTION
You are informed that no directives from
Jewish Labor Committee for expenditure of fuuds
mentioned in Department's telegram no. 1133, April 22,
is possessed by Duarte. It is requested that you con-
tact the Committee and ask them to send through
the Embassy for the representative as complete
directives as possible.
NORWEB
237
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
The American Minister, Lisbon
TO:
The Secretary of State, Washington
DATE:
May 4, 1944
NUMBERs 1344
SECRET
The following missage is from Isaac Weissman for Rabbi
Wise, New, York, and WEB, as WRB number 19.
Jointhas informed the Var Refugee Board in Washington
that Joint is resouing persons from enemy territory at the
present u. no, according to By information.
This is not true. Up to the present time Joint has not
Brought out a single person. However, to refugees brought
over the berder by Congress workers Joint lays claim. For
support these refugees must then " to Joint.
The World Congress has an opportunity within a short time
to save hundreds of children not to mention adults 10 funds
for expenses are sent here. Our frontier organization 80 far
built up-and maintained by the Congress and the only one now
in existence for this specific purpose will disintegrate if a
large amount is not sent immediately for this purpose. Please
answer by calle at once.
NORWEB
DCRIMPL
5/5/44
238
ORIGINAL THAT OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
American Legation, Stockhelm
DATED:
May 4, 1944
NUMBER: 831
SECRET
FROM WAR REFUGEE BOARD TO JOHNSON.
For Wilhelm Welbe, 11 Olefsgotten Strasse, Stockholm,
from Rabbi Abraham Kalmanowitz of the Vaad Hahatzalla Emergency
Committee.
Your April 24th received please inform Ssmulevics that
85,800 Swiss france remitted through Sternbuch Switserland-
if this transfer method preferable, advisable temporarily post-
pone support additional fifty Rabbis. Greatly concerned fate
great Rabbie religious leaders in Lithuania e if possible
arrange courier to Lithuania endeavor rescue maximum number we
guarantee expenditures and necessary fush. Advise through
American Legation.
This is WEB Stockholm cable no. 8.
Dograded
239
CABLE TO AMERICAN EMBASSY, BERN
The War Refugee Board requests that you deliver
the following message to Gerhard Riegner, 37 Quai Wilson
Geneva, Switzerland:
QUOTE We acknowledge receipt of your message of
April 18th forwarded through American Legation. We
discussed its contents with War Refugee Board.
Policy asking Hungarian population to hide and safe-
guard Jews has been accepted, and appeals are geing broad-
cast in consequence.
We call your attention to important duties which
International Red Cross may perform regarding Hungarian
Jews detained or interned in camps. We trust that
Hungarian Government may be induced to consider these
Jews as civilian internees and permit these camps to
be visited by Red Cross delegates and food parcels
despatelled to inmates. We expect your urgent and detailed
report on this subject. World Jewish Congress Leon
Kubowitski UNQUOTE
THIS IS WRB BERN CABLE NO. 15
May 4, 1944
10:00 a.m.
BAksin:jp
5/2/44
240
ORIGINAL TEXT OF TELEGRAM SENT
FROM
: Secretary of State, Washington
TO
: AMLEGATION, Bern
DATED : May 4, 1944
NUMBER : 1551
CONFIDENTIAL
From War Refugee Board to Harrison
Reference your 2592 of April 22, 1944.
Please notify Delasem at once that (1) arrangements
are being made for retransfer to blocked account with
American Jewish Joint Distribution Committee in United
States of $20,000 credit established in London for Delasem
and (2) American Jewish Joint Distribution Committee is
setting up in same blocked account in United States an
additional credit up to $100,000 for the balance of 1944
against which Delasem is authorized by American Jewish
Joint Distribution Committee to borrow.
Please advise Saly Mayer of foregoing.
THIS IS WRB BERN CABLE NO. 11
HULL
Unclassified
241
ORIGINAL TEXT OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
AMLEGATION, Bera
DATED: May 4, 1944
NUMBER: 1556
SECRET
FROM WAR REFUGEE BOARD TO HARRISON.
Please deliver the following message to Isaac Sternbuch,
3 Teufener Strasse, St. Gallen, from Rabbi Abraham Kalmanowitz
of the Vand Hahatzela Emergency Committee:
"Addice Samulevics that Rosenheim Agudas Ierael
cannot give any financial support. All requests for
aid on behalf Rabbis, scholars, Kellelin families must
be directed to Vaad Habatsala Rabbi Kalmanowitz. Advise
him also 85,800 Swies france sent through you and arrang-
ing additional such transmissions - if this method is
preferable, advisable temporarily postpone support
additional fifty Rabbis".
THIS IS WEB CABLE NO. 13.
HULL
242
NOT TO BE RE-TRANSMITTED
SECRET
COPY NO
OPTEL No. 143
Information received up to 10 A.M. 4th May, 1944.
1. NAVAL
Home Waters. 4th. One of H.M. Destroyers slightly damaged by
aircraft of ISLE OF VIGHT.
North Atlantic 3rd. A U.S. Destroyer escorting Eastbound convoy
torpedoed in .S.W. Approaches and is in tow.
2. MILITARY
Burma In KOHIMA aroa several attacks repulsed with high proportion
of onemy casualties. Anemy remain in strength North of town
and are digging in across KOHIMA-IMPHAL road.
3. AIR OPERATIONS
Western Front 3rd. 129 aircraft (3 missing) dropped 190 tons on
military constructions in Northern FRANCE and attacked
transportation targets. Escorted Typhoons bombed and hit a beached Destroyer
off CHERBOURG Peninsula.
3rd/4th. Aircraft despatched:
Military Depot, MAILLY-Le-CAMP
(50 milese S.E. of PARIS)
362 (42 missing)
MONTDIDIER Airfield
92 (4 missing)
LUDWIGSHAFEN and CHATEAUDUN
41
Sea-mining
32,
Leaflets
39
Bomber support and Intruders
32 (1 missing)
Good concentration in bright monnlight achieved at MAILLY-Le-CAMP
in early stages, but later smoke obscured aiming point. Technical difficulties
in operating bombors caused attack to be unduly protracted whilst enemy fighter
activity over target and also on return route was intense.
Italy 1st/2nd. Wellingtons and Halifaxes dropped 75 tons on
railway yurds at ALESSANDRIA whilo 70 tons were dropped
at SPECIA, LEGHORN and GENOA. 2nd escorted Liberators dropped 155 tons
on SPEZIA and 225 tons in PARMA area. Enemy casualties 3:0:2: for loss of
5 aircraft.