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Volume 732, May 16 – May 17, 1944
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Volume 732, May 16 – May 17, 1944
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Henry Morgenthau, Jr. Papers
Diaries of Henry Morgenthau, Jr.
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Diary
Book 732
May 16-17, 1944
- A -
Book Page
Appointments and Resignations
McConnell, Robert B.: Assignment nearly finished; new
duties discussed by 9:30 group - 5/17/44
732 150
- B -
Bergson, Peter
See War Refugee Board: Hebrew Committee of National Liberation
- C -
Cochran, John J. (Congressman, Missouri)
See Engraving and Printing, Bureau of
- D - -
Dies Committee on Un-American Activities
See Internal Revenue, Bureau of
- I -
Engraving and Printing, Bureau of
Salary adjustments of foremen of plate printers - -
Congressman Cochran (Missouri)-Treasury correspondence
concerning - 5/16/44
86
- F -
Financing, Government
Non-essential Expenditures, Committee on Reduction of:
Report on ownership and operation of non-military
Government automobiles, and Treasury comment thereon -
5/17/44
164
a) Discussion by 9:30 group
145
War Savings Bonds
5th War Loan Drive: Sample wire and letter to be sent to
all firms employing over (a) 3000 persons, (b) 100 persons - -
5/16/44
74
- G - -
George, Walter F. (Senator, Georgia)
See Social Security
Gold
Sample of each coin made returned to Treasury by Federal
Reserve Bank of New York - 5/17/44
147
- H - -
Book Page
Hebrew Committee of National Liberation
See War Refugee Board
- I -
Internal Revenue, Bureau of
Dies Committee on Un-American Activities: Inspection of
income tax returns by Executive Order - FDR-Treasury
correspondence concerning - 5/17/44
732 184
(See also Book 734, page 273 - 5/23/44)
- K -
Kitchen, Mills
HMJr-Doughton conversation concerning - 5/16/44
22
a) Sullivan memorandum.
25
- M -
Marshall, General George c.
Congratulates HMJr on birthday - 5/16/44
71
McAdoo, Eleanor Wilson
Trip to Europe for Office of War Information discussed by
9:30 group - 5/16/44
13
McConnell, Robert 1.
See Appointments and Resignations
Morgenthau, Henry, Jr.
Marshall, General George C., congratulates HMJr on birthday -
5/16/44
71
Morgenthau, Robert
See Havy Department
- X -
Navy Department
Following Robert Morgenthau's return after sinking of his
ship, HMJr discusses at 9:30 meeting an investigation
on lack of support on battlefields - 5/16/44
1
a) HMJr-Navy conversation: HMJr wishes to see officers
who saved his son - 5/31/44: See Book 737, page 128
Non-essential Expenditures, Committee on Reduction of
See Financing, Government
- 0 -
Occupied Territories
Italy
(Pesenti, Antonio
(Quintieri, Quinto
White memorandum on - 5/17/44
202
- P -
Book Page
Patman, Wright (Congressman, Texas)
See Revenue Revision
Paul, Randolph 3.
See Pension Trust Amendment
Pension Trust Amendment (as introduced by Senator Taft)
Discussion by Treasury group - 5/16/44
732 33
a) Paul memorandum - 5/16/44
51
Pesenti, Antonio
See Occupied Territories: Italy
- of -
Quintieri, Quinto
See Occupied Territories: Italy
- R - -
Revenue Revision
Proposed Constitutional amendment to prohibit Federal tax
rates exceeding 25% - Treasury point of view contained
in House of Representatives statement by Congressman
Patman (Texas) - 5/17/44
171
- 8 -
(Social Security
(Unemployment Relief
Senator George proposal for an emergency unemployment
insurance program - Blough memorandum on - 5/17/44
200
Stage Door Canteen
Joint dance with Treasury discussed by 9:30 group - 5/16/44
15
a) FDR may come, HMJr tells Bell - 5/31/44: See Book 737,
page 122
b) Washington Post article - 5/31/44: Book 737. page 125
- T -
Taft, Robert A. (Senator, Ohio)
See Pension Trust Amendment
Taxation
See Revenue Revision
- U - -
Unemployment Relief
See Social Security
- U - - (Continued)
Book Page
U.S.S.R.
$10 billion reconstruction credit by United States -
memorandum for FDR (not sent) - 5/16/44
732
97
- W -
War Refugee Board
The Hebrew Committee of National Liberation: Press releases
and editorial comment on - 5/17/44
211
a) Nahum Goldmann letter - 5/19/44: See Book 733, page 206
b) #
#
sends copy of press release and letters
to Embassies - - 5/25/44: Book 735, page 212
c) Pehle describes Committee to HMJr - 5/20/44: Book 734,
page 3
d) Bergson (Peter) discussed by Treasury group - 5/24/44:
Book 735, pages 22,55
International Committee of the Red Cross: Reply to request
by War Refugee Board concerning treatment of Jews and others
held in Germany and satellite countries - 5/17/44
223-A
1
May 16, 1944
9:30 a.m.
GROUP
Present: Mr. D.W. Bell
Mr. C.S. Bell
Mr. White
Mr. Sullivan
Mr. O'Connell
Mr. Smith
Mr. Blough
Mr. Pehle
Mr. Luxford
Mr. Lynch
Mrs. Klotz
Mr. Gamble
H.M.JR: One thing, Charlie, I would like you to do
out in the open - yourself and Mrs. Doyle.
I was down at Norfolk yesterday when Bob came in
and this, as far as I can gather, is the first full troop-
ship that came back with five thousand men from the Fifth
Army.
Now, the Army tells me that a man comes in; he has
lost his stuff; he goes before an officer and the officer
then and there issues his clothing and his money - no
questions asked. One man has the decision, do you see?
They get this stuff because they want to send them home
looking right.
Now, I don't know whether they do or they don't,
but they say they do. The Navy - all kinds of papers
and this and that, and red tape, and so forth and so
on. And a Lieutenant Commander Taylor, Aide to the
Admiral, said, "I wish it would be investigated, Mr.
Morgenthau."
Regraded Unclassified
2
- 2 -
There must be other troopships coming in. They may
have had an excuse. But they held these people God
knows how long there, and there is no Red Cross, no
nothing. And I thought that some place - - because this
gets back to this Army and Navy Relief Society, which
is privately supported, do you see?
MR. C.S. BELL: Yes, sir.
H.M.JR: Just the way we made the investigation of
the Army. on bonds. I want to do it over and aboveboard.
I either want you, yourself, or somebody and Mrs. Doyle
to do it. I want to get a report on what happens to
returning soldiers, sailors and marines. I don't want
to do it with that ship because it will look too much
as though I were checking up what they were doing for
Bob, but I would like to know.
Then here the Admiral says, "I wish you would make
an investigation; it is terrible." I know the Army does
it on the spot - one man can decide, "Yes, you can have
80 much money."
Of course - to talk about War Bonds when this thing
hits the country - now, here are five thousand men who
came back, who have been in this fight since Africa.
Some of these regiments are a hundred percent lost -
and the stories that they are bringing back. When this
hits the country it is just going to be - I mean, who
kept these people since we have been down at the front
for eight months without any support - somebody. I
think they have a terrific thing to explain. And it is
only now, after eight months, that General Clark and
General Alexander are getting the support.
But somewhere down the line I know that the losses
have just been unbelievable of the English and ours, and
I certainly wouldn't want it on my conscience.
A number of psychiatric cases - one hundred and forty-
three psychiatric cases - some of them in padded cells.
They bring back every trip thirty or forty older men who
3
- 3 -
aren't fit to be officers and return them to private
life. But this is the first big contingent of troops
being brought back on rotation.
As I say, when this hits the country - and they
are going to talk and talk plenty, because they have
their belly full and they have seen the worst.
(Mr. Gamble enters the conference)
H.M.JR: Hello, Ted. I was just saying that when
these five thousand troops I saw yesterday hit this
country, who have been there through this campaign -
there has been a hundred percent loss - what it is
going to do to the morale of this country, I don't know.
For eight months they have been there facing two or
three times the number of Germans that we have had -
and why, with all this Army, why we haven't sent people
down there to help them, is awfully hard to explain.
Somebody has made, certainly, a major blunder. It is
terrific.
Anyway, it gives you a certain feel - I say, I am
going to have Colonel Gow - is that his name?
MR. GAMBLE: Gow.
H.M.JR: I am going to ask him what they do about
this thing when these people hit the country.
MR. GAMBLE: That would likely make people sore and
not feel any better about the war - that sort of informa-
tion.
H.M.JR: No, because these men have seen everything
that has gone wrong, and it is going to make them awfully
sore. Now maybe, if the Italian thing is moving well, maybe
they knew that and felt, "Well, we can let them come back."
But if the invasion doesn't go well, these men standing
on the street corners and cracker boxes, and every place
else, and telling how they have been there, and the lack
of support, and the lack of this and that, it isn't
4
- 4 -
going to make our job - I want to talk with Colonel Dow
as soon as I can and ask him, "What is the Army's plan?
What are you going to do?"
It gives you a pretty sick feeling.
MR. WHITE: Is the principal gripe that they have
been kept on the front too long without relief, or that
they haven't had what they regard as adequate technical
support?
H.M.JR: No, you know when we were there in October
there were three and a half American divisions and three
or four English, and twenty-five German divisions they
were facing, and they haven't given them anything up to
now. These men have been in continuous front-line action
since they have been in Africa, and some of the regiments
have been a hundred percent casualties. Then they make
this landing in Anzio, made it brilliantly, and the
stories are that they got within eight miles of Rome
and then something happened - they didn't get the support.
Now, why didn't they get the support?
Bob was up with his escort. He was off. Anzio Beach
between five and six weeks before this other thing. He
has actually been there between five and six weeks. I
don't want to give you the shivers, because you hope the
rest of the thing is planned better than was done in the
last eight months. What have we got - seven or eight
million men, supposedly, under arms?
MR. WHITE: Eight million in the Army.
H.M.JR: Where the hell are they? What are they
doing? All the shipping, all the supplies - where is
the support? The English and all the rest - where is
it? My god, they have got every kind of troops down
there but an English one; I don't think there is hardly
an English soldier down there.
I have been following this SKF thing, and that is
one of the reasons I wanted you in. And you know my
5
- 5 -
earlier interest in SKF. Are we going to do something,
or just talk it out in the papers?
MR. O'CONNELL: Well, there is a meeting this morn-
ing between the State Department and representatives of
Treasury and FEA and the Department of Justice - or APC,
rather. They had a meeting preliminary to that, yester-
day afternoon, and they are going to propose to the State
Department this morning that, assuming that the negotia-
tions in Sweden aren't concluded satisfactorily at the
meeting this morning they intended to propose to the
State Department that we investigate SKF industries in
this country if the negotiations being conducted in
Sweden don't result satisfactorily in the next two or
three days.
H.M.JR: What about this fellow Batt, I told Nelson
about a couple of years ago? Are they still going to let
him be their Assistant to Nelson?
MR. O'CONNELL: I wouldn't know about that.
H.M.JR: Who is going to do something about that?
MR. PEHLE: That group wouldn't decide it. It will
have to be the President, or possibly Nelson - I assume
it would have to be the President.
H.M.JR: I laid it in Neison's lap a year and a
half ago.
MR. WHITE: Isn't there some additional information?
I don't think all of that was available a year and a
half ago.
MR. PEHLE: There is additional information now that
tends to point the thing up.
MR. O'CONNELL: That was in & memorandum we sent
you last week - & couple of letters, one from Batt and
one to Batt, which add & little more color to the situa-
tion. But the investigation has hardly begun.
6
- 6 -
They have been on SKF for about two weeks, now.
H.M.JR: It can't be too tough from my standpoint.
Whatever we do, let's do it in writing so we have a
record, see?
I haven't heard from the President on the Argentinian
thing, but I don't know whether the papers are right, that
this is General Marshall, but if General Marshall is
interested, let's bring it to General Marchall's attention,
or Bob Patterson's attention, or somebody - about this
stuff that is going from the Argentine to Spain to Germany.
Tell Luxford - I think he has it all, and I gave
him a copy, but let's bring up the strategic materials
that we know are going from the Argentine to Spain to
Germany. Have you got that, John?
MR. PEHLE: Yes, sir.
H.M.JR: And that report which they gave us - General
Strong gave us - showed industrial diamonds, platinum, and
what-not.
Who is feeding all this stuff to the papers? I know
the Treasury isn't.
MR. O'CONNELL: I believe it is FEA, but I don't
know that. All I know is that it isn't Treasury.
MR. WHITE: There was a meeting Friday, an informal
meeting after a formal meeting, in which Currie and Acheson
stayed, and Currie asked me to remain, in which he was
trying to convince Acheson they ought to give publicity
in a press release on action which we had taken. It was
a very simple release on a very technical matter, but
Acheson expressed himself very strongly against the
slightest information being given to the public here
on the matter while the negotiation was going on.
Did you read the letter from Secretary Hull with
reference to any information - further information -
being given out?
7
- 7 -
H.M.JR: No.
MR. WHITE: I guess it came either Saturday or
Monday.
MR. O'CONNELL: I think it came Saturday.
MR. WHITE: He requests very definitely that no
information be given out because it is interfering with
their ability to conduct their negotiations in Sweden.
The Swedes are being angered by the publicity.
H.M.JR: Does he imply we are doing it again?
MR. O'CONNELL: He was addressing himself, primarily,
to the publicity that has attended the visit of the FEA
man to Sweden, because he accompanies his letter with a
cable from the British in which they complain.
MR. WHITE: It makes his request broader.
H.M.JR: He ought to be able to find out where it
is coming from. I haven't heard yet from the President
on that.
Anyway, my instructions to you fellows - get tough
and rough, will you, please?
MR. O'CONNELL: Yes,sir.
H.M.JR: Or tougher and rougher. I don't want to
fight it out in the papers. If it gets to the point, I
will do what I did in the Argentine thing, I will put
it right on the line to the President.
The amusing thing that after doing that on the Argen-
tine thing, and sending Mr. Hull a letter, the next day
he writes me - which he has never done before - & very
nice letter about my birthday, and a very nice letter
about Bob, after getting the thing on Argentina. So
maybe down in the Tennessee mountains they first get you
drunk and then shoot you in the back.
8
- 8 -
On the lighter side, showing the President is in a
good humor, I spoke about this advertisement of the
Safeway Stores, showing three hundred articles and what
they cost compared with this year and last. Did I men-
tion it in here? I sent it over to him. This is the
answer:
"That advertisement is really interesting. I had
not seenit. On the lighter side, I am glad to know that
Clabber Girl can be got for eight cents and a larger
size for nineteen cents. I am also glad to know the
cost of toilet-bowl brushes remains constant!" -
So he is feeling ail right.
MR. WHITE: I am supposed to appear before the
Foreign Affairs Committee on the Dewey bill at ten
o'clock.
H.M.JR: All right.
MR. O'CONNELL: Can Harry and I be excused for that?
H.M.JR: Sure. Good luck.
MR. BLOUGH: The Senate Finance Committee is meet-
ing at ten; I would be convenienced if I might go, too.
I would like to see you later in the day, if possible.
MR. D.W. BELL: Three o'clock.
MR. BLOUGH: That is all right.
H.M.JR: O.K.
(Mr. Blough, Mr. O'Connell and Mr. White leave
the conference)
9
- 9 -
H.M.JR: Do you have to be somewhere, too?
MR. D.W. BELL: Senate Finance Committee by ten-
thirty on the debt.
H.M.JR: Lots of time. Do you have anything?
MR. C.S. BELL: Well, the draft situation is
straightening itself out. We expect regulations out
of Hershey today. It will be a new form.
H.M.JR: Today's form!
MR. C.S. BELL: Yes, sir; after that 42-B. All.
we have to do is state the man is in an essential in-
dustry, and I think from now on they will draft him--defer him.
(Laughter)
MR. SULLIVAN: You had it right the first time.
MR. C.S. BELL: I just wondered if you would have
any objection to our clearing all of those with the draft
boards on this form, or whether you still wanted to see
them.
H.M.JR: I don't think it is necessary until he
changes his mind again.
MR. C.S. BELL: Commerce is going ahead with the
deferment policy for the entire Department. That is,
they are going to declare all of their people.
H.M.JR: Show it to me in the first instance and
let me do it once; then if I am satisfied--
MR. C.S. BELL: All right, sir.
10
- 10 -
H.M. JR: Charlie, you had a good idea - I don't
know whether it saw life or whether it was stillborn -
on getting out something once a month - what we do.
I referred it to Smith.
MR. SMITH: We have discussed it and are moving
ahead, aren't you?
MR. C.S. BELL: Fred has made a very good sugges-
tion that we send this out, you see. We have a man
that represents the administrative office in practically
every city in the U.S. - typical Mobile, Alabama, it has
Collector of Customs. We thought we would fix it up
that he would make the following announcement, and then
come through with the first announcement, and in that
way we would get more publicity.
MR. SMITH: In his own locality to all over the
country.
H.M.JR: I don't see why we shouldn't tell the
story of what we did - I mean, is this story finished -
this first one?
MR. C.S. BELL: Yes, sir.
H.M.JR: Am I tied into it in any way, or not?
MR. C.S. BELL: Yes, sir, in this way; that you
had appointed Mrs. Doyle to look after the welfare of
the people in the Treasury.
This is Project No. 1. It is associated with the
centralization.
11
- 11 -
H.M.JR: Has it gone, Charlie? Could I see it again
before it goes?
MR. SMITH: Sure. It is Charlie's. If he will let
you, you can.
H.M.JR: You bring it to my attention today.
MR. SMITH: Today?
MR. C. S. BELL: Yes, sir.
H.M.JR: I think, for instance, for a while they said
I was a good administrator, and then this Republican propa-
ganda--now, you take the story of what we did before the
Africa invasion in printing money, being ready, being on
time--I would like that to go out as a departmental story,
as the next one.
MR. PEHLE: Mr. Secretary--
H.M.JR: Excuse me one minute. And in connection with
that, take the Bureau of Engraving, what they have done on
the money and on the war bonds, their part of it.
MR. D. W. BELL: The Mint has done a good job, too.
H.M. JR: All right, the Mint is keeping up. I think
you could get one out once a week. There is enough around
here, Charlie.
MR. C. S. BELL: Yes, sir.
MR. PEHLE: Did you see the Foreign Funds story in the
Readers Digest? Do you want me to send it in?
H.M. JR: Copied from Mercury?
MR. PEHLE: It was cleared here before it was sent out.
H.M.JR: The one in Mercury--I thought it was terrible.
12
- 12 -
MR. PEHLE: Why did you think it was terrible?
H.M.JR: You wouldn't know I was the Secretary of the
Treasury.
MR. PEHLE: They took it all out. It was all in there.
It was written by a fellow named Bellamy who is very friendly
to us, to the Treasury. He has done a lot of work in Foreign
Funds. There were all sorts of references in the Readers
Digest. They X'd them all out, but there was a very good
story there, and a lot of good stories in Foreign Funds
Control that will play up this administrative angle, which
I think is a very important one.
H.M.JR: I am being very frank, and as I say, when I
read a story I would like to know I am connected with the
Treasury. But you wouldn't know it there. And they never
mentioned you.
MR. PEHLE: They X'd all the references out, Mr.
Secretary; there were several references to you and one to
me and one to Joe O'Connell. They took them all out.
H.M. JR: The way they say it on the farm, they de-sexed
it. And you needn't try to improve on that, Fred, either.
MR. SMITH: I am 8. perfect picture of self control this
morning.
MR. PEHLE: But there are some very good stories, Mr.
Secretary, in connection with what Foreign Funds has done.
H.M.JR: I think there is enough to do one a week.
MR. SMITH: I don't think you could get one a week
printed.
H.M.JR: Well, let's see. We will see.
MR. C. S. BELL: I have a letter appointing Orson
Welles at & dollar 8. year as a consulting expert for Mr.
Smith and Mr. Ted Gamble.
13
- 13 -
H.M. JR: And are we going to take advantage of the
services of his wife?
MR. SMITH: That comes along, no extra charge.
H.M.JR: What is that word? it is worth a dollar a
year. How much for Mrs. Orson Welles? I was disappointed.
MR. SMITH: He is going to be gone next week; he has
a radio show next Wednesday which he will move to the East
Coast 80 it won't be in his way.
MR. C. S. BELL: Mrs. Eleanor Wilson McAdoo is employed
in War Bonds. She wants to use her annual leave to go to
Europe for the Office of War Information. The regulations
would cover it if you see no objection.
H.M.JR: No, I don't understand.
MR. C. S. BELL: She has the annual leave. They would
like to have her services.
MR. D. W. BELL: She would go over there and represent
them while she is on leave.
H.M.JR: Why should she go to England when she has
done a very good job for us? Why shouldn't she work for
us during the Fifth War Loan?
MR. GAMBLE: They have been trying to get her to go
over there for a year, Mr. Secretary. They have talked
to Miss Elliott and others about it.
H.M.JR: Let her go after--
MR. GAMBLE: I think they have a little problem of
digging over there.
H.M.JR: I still say, we have this investment in this
woman. Nobody wanted her; nobody would give her a job.
I gave her a job at the request of Mrs. Roosevelt. We have
an investment. She is a good speaker, and I say, let her
14
- 14 -
go after the Fifth War Loan. To hell with the OWI and
Ferdie Kuhn who is sending her over there. Let her go
after the Fifth War Loan.
MR. C. S. BELL: All right, sir.
H.M.JR: You have a problem with me.
MR. GAMBLE: But you wouldn't mind if it happened to
fall the third week of the War Loan, would you?
H.M.JR: Yes, I would. Miss Elliott didn't go. She
had a chance to go. Let her go when the War Loan is over.
I am not going to be generous to anybody with Treasury
people, and last of all, OWI. You can't budge me today;
don't try to. Today is a bad day.
MR. C. S. BELL: Since this was up, Ted, I think they
have decided they can't get her over there right away, any-
way. England won't let her come in just at the present time.
H.M.JR: Mr. Butler, with the rank of Minister to the
British Embassy, can't get back to England. I am sure they
won't let this woman back.
MR. C. S. BELL: Not now.
H.M.JR: Well, we are all right. Do it on that ground.
MR. PEHLE: They won't let a U. S. Government employee
in?
H.M.JR: They won't let Mr. Hugh Butler in.
MR. PEHLE: They won't let their own people in now?
H.M.JR: Lord Halifax said he wanted to send Mr. Butler
back and couldn't get a visa for him to come back, and
he has the rank of Minister.
They couldn't get Mr. Taylor who was going to go back
and sit on this very important committee until I brought i
15
- 15 -
to McCloy's attention through Harry White, and they let
him go because McCloy wanted him there.
O.K.?
MR. C. S. BELL: There is one other little item. We
discontinued parcel post packages at our post office in
this building after Pearl Harbor. We would like to resume
that.
H.M.JR: Good.
When are we going to have our first dance in the evening
for the employees of the Treasury?
MR. C. S. BELL: We had one not long ago at the Wardman
Park.
H.M.JR: I mean regular, both to give the girls &
little exercise and to keep up the morale of the soldiers.
MR. C. S. BELL: In the cafeteria?
H.M. JR: Yes, that is a beautiful place to have a
dance at night.
MR. C. S. BELL: We might have it out on this portico.
MR. D. W. BELL: How about the boys of the Treasury?
H.M.JR: Iwould have them once a week. Fred will say
every two weeks, but let's try one and see how they like it.
MR. C. S. BELL: We might hook it up with the Stage Door
Canteen and get them over here once a week.
MR. D. W. BELL: It is very difficult. We tried it
once before, Mr. Secretary, and they couldn't get attendance.
H.M.JR: Try it, will you?
MR. D. W. BELL: It was downstairs once & week, and
it was very difficult.
16
- 16 -
H.M.JR: The soldiers wouldn't show up, or the girls?
MR. D. W. BELL: The soldiers would show up and didn't
dance. They would stand around. They would stand around,
and the girls got more or less disinterested.
H.M.JR: Let's try it over again.
MRS. KLOTZ: Well, I can understand. They had to dance
in the lobby down there. That wasn't very conducive.
MR. C. S. BELL: We will put some lanterns out there
and make it attractive.
H.M.JR: Try it once; if it is & bust, no good--
MR. C. S. BELL: Using the Canteen girls? They have
all been investigated by Hoover.
MR. PEHLE: Good or bad?
MR. C. S. BELL: Good.
MR. D. W. BELL: No soap!
MR. SMITH: We could get a radio show for everyone, I
bet.
H.M.JR: This is very interesting. (Reads from Index to
Secretary's Diary under dates of January 29, 30, February 5,
April 16, May 6, 7, 11, 13, a nd 15, 1942.)
Acheson knows all about it and everything else.
MR. PEHLE: American Bosch was investigated finally.
H.M.JR: Dan?
MR. D. W. BELL: I don't know whether George has reported
to you his conversation with Walter Stewart about the curren
H.M.JR: No. Where is George?
17
- 17 -
MR. D. W. BELL: George is ill today.
H.M.JR: Again?
MR. D. W. BELL: Yes. But Walter is against your
taking any action along the lines suggested, and so is
Jake Viner. Jake Viner said he would think a bout it and
come down this week if you wanted him to. I didn't definitely
ask him to c ome, but I think I can get his views.
H.M.JR: If he is on my side--
MR. D. W. BELL: I don't think he is. I had a conference
with the Federal Reserve people, Mat Szymczak, Hugh Leach,
and Hap Young; and sitting in the room discussing it, they
were opposed to any action. They didn't think it would be
effective; they thought you would have just as much hoarding
as you do now and it might be dangerous and disturb people.
Hugh Leach went back home and discussed it with his officers,
and they all feel the same way. Now, they have sent me a
letter on it. I haven't heard from Hap Young.
My main point in bringing it up is I want to know
whether you would like to have Jake down this week.
H.M.JR: No.
MR. D. W. BELL: Q.K.
(The Secretary holds a telephone conversation with
Congressman Doughton.)
H.M.JR: There is no use kidding him. I think in the
long run they prefer it that way. That has been up about
ten times.
MR. SULLIVAN: That is right.
Now, to protect yourself with Doughton, it doesn't
look at all sure that these four are going to be named;
and if somebody else is named, you better get word to him.
18
- 18 -
H.M.JR: Well, I tell you what you do. You draft a
letter from me simply along these lines today: "My dear
Mr. President: I am on record," and so forth, and so on.
"If, however, you decide that you are not going to re-
appoint them, I would like to bring to your attention Mr.
Kitchen," and so forth. Do you see?
MR. SULLIVAN: O.K. And a copy to Bob.
H.M.JR: Will you fix them up and get them to us by
two o' clock?
MR. SULLIVAN: Yes.
H.M.JR: Very good idea. You have a lot of good
ideas up in New Hampshire.
MR. SMITH: We have a crew of five men arriving in
Texarkana today to take over that, from here. And it is
going high, wide, and handsome down there.
H.M.JR: Could you tell me more about it at lunch,
Fred?
MR. SMITH: Yes, surely.
MR. GAM BLE: Yes.
MR. SULLIVAN: I may have to go up tonight for one
day.
H.M.JR: Yes, sir.
MR. GAMBLE: Everything I have can wait until noon,
Mr. Secretary.
H.M.JR: Are you getting pretty pictures for me to
see?
MR. GAMBLE: I hope to have today or tomorrow a new
war bond film for you to see, about eleven minutes.
(Mr. Lynch enters the conference.)
19
- 19 -
(Mr. Luxford enters the conference.)
H.M.JR: There are two things: Can you explain to
me why Hancock gets the job of adjusting Army and Navy
controversies over amortization certificates? Do either
of you know anything about that?
MR. LYNCH: No, sir, I don't. That matter was before
the Joint Contract Termination Board at a meeting in which
Mr. Sullivan was present about two weeks ago, and at that
time it was deferred. My own guess on that is that it is
a stale news item, but I am not too sure of it.
MR. SULLIVAN: I know about it, Mr. Secretary. This
thing has been going on for six months, and Ben Cohen
had some hearings. The Army, Navy Maritime Commission,
WPB, and ourselves--it is the old fight as to who is going
to issue these certificates. The Army and Navy have wanted
to pin it on us. Ben had a couple of conferences, and then
I think Hancock got into it to put a little heat on the
boys. We are in good shape on it.
H.M.JR: We are all right?
MR. LYNCH: It might be well to say this: The statute
fixes the responsibility upon the Secretary of the Navy
and on the Secretary of War to issue the certificates of
non-necessity.
Now, there is a question as to whether they would do
it, and under what circumstances, and also there is a
question of whether it shouldn t be done for them by the
War Production Board. The Navy and the War Department dis-
agree as to that, and as to some aspects of relations. That
is true, isn't it, John, the responsibility is in the
Department?
MR. SULLIVAN: That is right. The question is whether
or not they will delegate it. Of course, the War Department
has been after us, saying it is perfectly horrible that
because they are conducting the war they cannot issue a
certificate saying that any facility will not be needed.
They came to that conclusion after having for twelve months
20
- 20 -
ridden us on a certain plant. Then they took another look
at the plant which they said never was going to be used
for war work and they found out for the previous six months
it had been a hundred percent engaged in war work.
H.M.JR: That is all I have.
I would like to see Luxford and Pehle.
21
May 16, 1944
10:05 a.m.
HMJr:
Hello.
Robert
Doughton:
Hello, Henry. How are you?
HMJr:
I'm fine. How are you?
D:
First rate, I think, all right.
HMJr:
That's ....
D:
I understand the Senate Finance Committee adopted
our Simplification Bill without any change in
policy at all.
HMJr:
Well, that's wonderful.
D:
Just a few little minor changes about little details
or something that didn't amount to anything so I
don't think we'll ever have to go to conference on
it if the Senate passes it like the Finance Committee
has reported out.
HMJr:
Well, it seems as though they're going to take advan-
tage of your very hard and excellent work.
D:
Ah -- well, I think we've got them hypnotized.
(Laughs)
HMJr:
May be.
D:
Yeah.
HMJr:
Too bad we couldn't have done it a couple of times
before.
D:
Yeah, you're right about that. Glad to get rid of
it anyway and I reckon the debt limit bill will soon
be adopted, too.
HMJr:
Good.
D:
And say, Henry.
HMJr:
Yeah.
D:
I've got a matter I've been interested in a long
time and you might be helpful..
HMJr:
Yes, sir.
- 2 -
22
D:
....
if you felt justified
....
HMJr:
Yes, sir.
D:
and I know you could be. And that is this:
I've been trying to get a better position for
my friend and the son of my -- one of the best
I ever had and one of the ablest men that ever was
in Congress, Mills Kitchen, son of Claude Kitchen.
HMJr:
Oh, yes.
D:
He's down at the Department of Justice and been
holding a position there a long time that 1s not
commensurate with his experience nor his ability
either.
HMJr:
Yeah.
D:
The President -- two or three or four years ago I
talked to him about it and I talked to him two or
three times and he made it -- wrote a note and
sent down there but it dragged along and dragged
along and has never done anything. Now, there are
four vacancies on the Tax Court -- going to be four
appointments to make. Now, this man is a specialist
in taxes. He has just inherited good tax sense and
he's got a brilliant mind. Judge Hayes told me --
the middle district of North Carolina -- when he
came down there in the Courts in big cases -- said
he was the equal to any corporation lawyer that
ever appeared in his court.
HMJr:
Yeah.
D:
And he is really entitled and can serve the Govern-
ment in a much better position than he is in.
HMJr:
Yeah.
D:
And Joe -- Secretary Daniels is very much interested
in him -- Ambassador Daniels and has taken it up with
the President at different times. Anything you could
do, you'd be helping the Government because he's just
the kind of a man to have on that Court. He's got
the ability and his attitude and set-up is right and
everything about him 1s right.
HMJr:
Well, Bob
....
23
- 3 -
D:
If you could speak a word for him, I just don't
know anything I can think of -- I wouldn't
appreciate your doing anything for me half as
much as I would for him.
HMJr:
Well, now, Bob, you and I always deal them straight
across the table.
D:
Yeah.
HMJr:
And, now, let me tell you, as you know, that I'll
do anything in the world for you but I want you
to know that I have recommended to the President
about a month ago that all four of these people
be reappointed.
D:
Well, ain't they -- most of them Republicans and
haven't they got more Republicans than anything
else?
HMJr:
Two of them are Republicans.
D:
Uh huh.
HMJr:
But this thing, as you know, was originally set
up by Jack Garner.
D:
Yeah.
HMJr:
And he always kind of felt that these people, if
they did a good job, they should succeed themselves.
Now, I'm on record to the President, recommending
the reappointment of these four and I -- I want
you to know the facts.
D:
Yeah, that's right. I appreciate your candor.
HMJr:
And I don't want to say to you that I'm going to go
out and do something when I've already ....
D:
Oh, no, I know you wouldn't do that. I wouldn't be
talking to you if I didn't have absolute confidence
in you.
HMJr:
But that 18 the situation, but I'll tell you what I
can do. I can take a look around. I don't know if
there's anything else that he'd be interested in,
but I know of your interest in the son of Claude
Kitchen and
....
- 4 -
24
D:
Well, my chief interest is in -- -- of course, I've
got a sentimental interest
....
HMJr:
I know.
D:
....
but my chief interest is in the man's
worthiness and capacity and that he deserves a
better job than he's got.
HMJr:
Well, let me have a look around the Treasury and
see what we have.
D:
Well, I appreciate that more than anything I can
tell you.
HMJr:
And that I will do and do gladly, and
....
D:
He'd be a great asset to you in some responsible
position. Now, he's not a mediocre man by any
means.
HMJr:
No. No. But the other thing -- my hands are tied --
about a month ago.
D:
Well, all right. Well, thank you very much.
HMJr:
Thank you, Bob.
D:
Good bye.
HMJr:
Bye.
25
May 16, 1944.
MEMORANDUM FOR THE SECRETARY
Jrs
FROM: Assistant Secretary Sullivan
This morning you asked me to prepare for you a letter to the
President and to Congressman Doughton in regard to the candidacy of
Mr. Ville Kitchen who aspires to an appointment on the Tax Court of
the United States. I am sending you drafts of these two letters
with the recommendation that they not be sent.
On March 18th you sent the President a memorandum commenting
upon a letter Senator Glass had written the President. You also
forwarded to the President a letter for him to send to Senator Glass
stating that he was not free to appoint Senator Glass' candidate,
Robert Nelson Anderson, because of his intention of renaming the
four members of the Court whose terms are to expire. In November 1943,
Senator Chavez urged the appointment of John E. Miles, and Frank
Walker advised the Senator that Miles' name had been presented to
the Treasury Department with the approval of the National Committee.
April 27th Senator Russell of Georgia called me to recommend Marion
Allen. I advised him that the Treasury had recommended the re-
appointment of the four members whose terms were expiring, and he
said that was agreeable to him but that if these four were not re-
named he wanted an opportunity to talk to us about Allen. On May 1st,
Joseph 0'Connell acknowledged the letter of Senator Maybank addressed
to the President and endorsing a Mr. Girard Hartzog.
Whether or not other members of the Treasury have discussed
this problem with other members of the Congress I do not know.
However, I fear that if we reopen this matter with the President,
recommending Congressman Doughton's candidate, we will have to square
ourselves with Senators Glass, Chavez, Maybank and Russell. Accordingly,
I recommend that these letters not be sent.
26
THE SECRETARY OF THE TREASURY
WASHINGTON
Dear Bob:
After hearing from you this morning
in behalf of Mills Kitchen and your interest
in his appointment to the Tax Court of the
United States, I wrote to the President about
this matter.
I thought you would like to have a
copy of this letter and I am herewith enclos-
ing it.
Sincerely,
Hon. Robert L. Doughton,
House of Representatives.
Enclosure
27
MR. SULLIVAN:
Mr. Vanech telephoned again to
say that Kitchen is from Scotland
Neck, N. C.
vls
5/16/44
28
THE SECRETARY OF THE TREASURY
WASHINGTON
My dear Mr. President:
On March 18, 1944, I sent you a memorandum
recommending the reappointment to the Tax Court of the
United States of J. Edgar Murdock, William M. Arnold,
Eugene Black, and Ernest H. Van Fossen. I would like to
repeat By recommendation of those men at this time.
However, if for any reason you do not wish to
reappoint any one of these men, I would like to suggest
consideration of Mr. Vills Kitchen of Scotland Neck,
North Carolina. Mr. Kitchen is now in the employ of the
Tax Division of the Department of Justice. His candidacy
is being advocated very forcefully by Congressman Robert
L. Doughton.
Sincerely yours,
The President,
The White House.
BYICTORY
BUY
VRITED
STATES
WAR
BONDS
AND
STAMPS
29
May 16, 1944
10:15 a.m.
JEWISH EVACUATION
SKF INDUSTRIES
Present: Mr. Pehie
Mr. Luxford
Mrs. Klotz
MR. PEHLE: I would like a chance sometime today,
if possible, to go over with you the documents which we
have now prepared to be sent to the President, which
would put into effect the suggestions which he made at
our conference and also discuss strategy with you, and
get the documents there under such auspices that we have
some chance of getting them approved.
H.M.JR: I will see you at three-thirty.
MR. LUXFORD: One other thing here I should mention
to you. We had & little note yesterday from Hull com-
plaining about all the news on the SKF. We are preparing
a reply.
H.M.JR: Did you tell him we are as Phoebe Snow is
to the Lackawanna Railroad? Are you fellows old enough
to know Phoebe Snow?
MRS. KLOTZ: I don't, either.
MR. PEHLE: I know the driven snow.
H.M.JR: The Lackawanna Railroad used to have these
little jingles with this girl always dressed in white -
about Phoebe Snow, who rides on the Lackawanna and comes
outimmaculate. Do you people remember Sunny Jim with
his breakfast food?
MR. LUXFORD: I remember Wheaties and Cheery Oats.
Regraded Unclassified
30
- 2 -
MRS. KLOTZ: No.
MR. PEHLE: I heard one thing yesterday, Mr. Secretary.
A reporter told me that he had got from Crowley & pretty
direct story of what had happened on the Spanish thing,
and that the United States had taken the position that
we ought to go much further than the British were going in
this deal; and when Halifax heard that he came storming
down to see Hull, and Hull and Crowley - do you know this?
H.M.JR: No.
MR. PEHLE: Huil and Crowley together. Crowley
thought he was going to have to carry the fight in de-
fending our position, but Hull took the thing right away
from him and just stormed at Halifax - just raised Cain
with Halifax and told him that he would be damned if he
was going to see American soldiers get shot because we
weren't tough enough with Spain, and letting them con-
tribute to the German war machine. And it is that posi-
tion that Acheson later said that he just saved Hull -
that Hull was forced by Acheson's persuasion to back
down from this tough position with Halifax.
MR. LUXFORD: Don't you remember Crowley spoke to
you in the morning and said he had Hull in line? That
afternoon Acheson said he had saved him from making a
very serious mistake, but means he got him to change his
position vis-a-vis Spain.
MR. PEHLE: He just raged at Halifax and was de-
termined to take a strong position. Acheson is now the
guy that was behind the Argentine thing, always appeasing
on the Argentine thing, and the Spanish thing, and the
Swedish thing, and the dollar balances thing - all of
which are the British line.
MR. LUXFORD: At eleven-thirty we go to Acheson's
office to decide what to do with SKF.
H.M. JR: I told the boys here - it is time to be
tough. You can't be too tough. I don't believe in
Regraded Unclassified
31
- 3 -
fighting it out in newspapers, but I certainly would be
tough.
Again I told them, "I want the Treasury position to be
in writing if we are overruied" - just like I did.
MR. LUXFORD: You are ready to investigate SKF
here?
H.M.JR: If you recommend it.
MR. LUXFORD: I am recommending it because that will
be the fight this morning because State will not go that
far.
H.M.JR: Are you recommending it?
MR. LUXFORD: Yes, sir; and so is FEA. we will
probably end up with a Supervisory Order.
H.M.JR: Sure! I will investigate!
32
May 16, 1944
10:44 a.m.
Jack
McCloy:
Hello.
HMJr:
Hello, Jack.
M;
I wonder if I could see you for a couple of minutes.
It won't take much more than that if I came over there
some time today.
HMJr:
Sure. When do you want to come?
M:
Well, I'll come any time. Could I come now or
could I come later?
HMJr:
I could see you at eleven-fifteen.
M:
Eleven-fifteen. I'll be there on the dot.
HMJr:
I see
....
M:
It won't take more than three minutes.
HMJr:
Take all you want.
M:
Well, it will be very short.
HMJr:
Thank you.
M:
Okay.
Pogradod
33
May 16, 1944
3:00 p.m.
PENSION TRUST AMENDMENT
Present: Mr. D. W. Bell
Mr. Sullivan
Mr. O'Connell
Mr. Blough
Mr. Surrey
Mr. Olrich
Mr. Nunan
Mr. Cann
Mr. DeWind
Mr. Reagh
H.M.JR: My God: I have all the experts in the world.
How is Mr. Mesta?
MR. SULLIVAN: I talked with McCloy. Iveson is
coming down.
H.M.JR: Are you going to see him? Is it a typical
case?
MR. SULLIVAN: No, it is a unanimous opinion in our
case.
I have that letter you wanted in regard to the matter
Mr. Doughton spoke about. I think it should not go. I
have a memorandum. Later on I want to speak to you about
it.
H.M.JR: Go ahead.
MR. BELL: Senator Taft has introduced an amendment
in the Senate which he wants to attach to the debt bill.
It has to do with pension trusts.
Senator George, as I understand it--you correct me if
I am wrong--has set up a sub-committee, which Senator Radcliffe
34
- 2 -
is chairman of, to consider Senator Taft's amendment.
They won't start hearings until May 26, which delays the
debt bill, certainly well over in June, because even
though they get it through the Senate, I have an idea
it will be controversial in the House.
The question here today is, first, how strongly we
should present the Treasury case on the pension trust, and
second, if it looks as though Senator Taft is going to
insist upon the amendment being attached to the debt
bill, whether or not we shouldn't have a conference with
Mr. Doughton on the thing before May 26 so that there
won't be a controversy in conference after it passes the
Senate.
H.M.JR: Could I interrupt a minute? I don't know
what the hell this is; I haven't read this memorandum
(indicating memorandum to the Secretary from Mr. Paul
dated May 12, 1944). So, Roy, let me do my homework now.
Do you know it?
MR. BLOUGH: I don't know it as well as Surrey does.
H.M.JR: All right, Surrey, do your stuff so you can
tell me what it is all about, will you?
MR. SURREY: I can go into the pension trust problem.
Do you want to go into that ahead of the immediate problem
of trying to free the debt bill from this?
MR. BELL: Yes, I think he ought to tell you what
the pension problem is.
H.M.JR: I would like to know what the pension problem
is and the mechanics afterwards.
MR. SURREY: In 1942 the Treasury went up and said
there would be a great deal of tax avoidance in the pension
trust field unless certain things were adopted. That pro-
voked & good deal of discussion, and we had & long wrangle
with the Senate Finance Committee. We came up with some
provisions in the 1942 Act. When we got to administering
those provisions--
Regraded Unclassified
35
- 3 -
H.M.JR: Go on the assumption I don't know what the
pension trust is.
MR. SURREY: Pension trust is a device set up by
an employer to provide pensions at retirement for his
employees.
MR. BELL: Just a pension fund?
MR. SURREY: In a sense it is in with what the Govern-
ment has.
H.M.JR: Who writes it? Does he run his own insurance
fund?
MR. SURREY: Some run their own and others do it
through insurance companies. They were not a problem
under the revenue laws until recent years. They do have
tax advantages under the revenue laws, because, typically,
the employer is contributing money while the employee is
in his service.
H.M.JR: Is the employee contributing money?
MR. SURREY: Some do and some don't. It depends on
the particular plan. The amounts vary; the pensions that
people can get under these plans vary from company to
company. The kinds of employees that are eligible vary
from company to company. Some companies cover all their
employees. Some only cover just the top management group.
Some had a dividing line around three thousand dollars.
Others covered only their salaried employees, and the
benefits they paid varied.
Some put on top limits of ten thousand dollars a year
pensions, no more. Others would go as high as--
H.M.JR: Go to the Metropolitan Life, say, and they
will write this for them? They will pick out a blanket
policy?
MR. SURREY: That is right.
Regraded Unclassified
36
- 4 -
MR. REAGH: Some of them do it; others put it into
8. rust fund and run it themselves.
MR. BELL: The Bankers Trust Company has quite a
business in this field, just pension trusts.
MR. SURREY: Now, we were not very much troubled
by them, although they do have tax advantages. The tax
advantages are these: The employer when he contributes
money to the trust fund, or when he pays money into the
insurance company as premiums, gets a deduction from the
corporation tax for that money. The employee, however,
doesn't pay any tax upon his pension until he retires.
The money that is in the trust fund, and the interest
that is earned is tax-exempt. Now, it is a device whereby
employers can put money into the trust fund now and get
deductions for them, and it is really giving salary in-
creases to the employees which are not in effect received
by them until they get their pension. At that time they
pay a tax.
And what worried us in 1942--
H.M.JR: You may get some good ideas out of this
before you are through. (To Mr. Olrich)
MR.
SURREY:
was that the corporate tax rate is
getting SO high, the amount of money put in these trust
funds would be mostly paid for by the Government because
they are deductible from an excess profits tax of ninety
or ninety-five percent. At the same time they don't give
salary increases to their top personnel, because with the
very high individual income tax rates you had an officer
getting fifty thousand a year and you wanted to give him
more money, but it wouldn't do much good. However, if
you gave him 8 pension when he retired, that pension would
be taxed at a much lower rate. So people naturally started
to look to pension trusts as a means of providing higher
salaries now for their top personnel at the expense, largely,
of the Government.
The Treasury called that to the attention of the Finance
Committee and said that there should be some limits to
Regraded Unclassified
37
- 5 -
these pension trusts. It was a very difficult thing to
work out because you have all kinds of pension trusts.
Some are not tax devices. Some have been in existence a
long time. Some are coming into it just the last few
years. The treatment in the law is very unsatisfactory.
It leaves it to the Commissioner, because it provides
that you can have what are called non-discriminatory
pension plans. You can't discriminate in favor of the
higher paid people in your employment.
If you are going to set up pension plans, you have
to set them up on a non-discriminatory basis, which meant
you could no longer have pension plans just for the top
management group.
H.M. JR: You could have it for the lower group?
MR. SURREY: Yes, but not for the top group only.
However, there is a provision in the law which is
very ambiguous, which indicated you might set up a classi-
fication of three thousand dollars to have a pension plan
for everybody over three thousand dollars.
When the Treasury came to preparing its regulations
under the Statute, it came to this problem: Three thousand
dollars is the line where social security breaks off. And
social security gives benefits on the first three thousand
dollars.
Now, employers were saying that they were going to
set up their own private private plans limiting it to
people over three thousand, because they wanted to supple-
ment social security. We found that the three-thousand-
dollar dividing line in most plants comes at just about
the supervisory level, the foreman level in the plant,
and the people earning over three thousand dollars a
year, basic salary, generally number about only four
percent of the total personnel in the plant. We thought
that these were in a sense very discriminatory trusts
and only covered a limited amount. But the reason for the
dividing line was, people below three thousand were covered
by social security. Hence our regulations state that you
Regraded Unclassified
38
- 6 -
can set up plans for this limited group, but you can't
pay them more proportionately on their higher salary
than social security gives on the first three thousand
dollars. Social security gives, say, a thirty percent
annuity on men earning three thousand dollars.
We said, "You can cover only the group above three
thousand dollars, and you can give them pensions equal to
thirty percent of their salary, but you can't give them
pensions equal to, say, fifty percent of their salary and
exclude everybody earning less than three thousand dollars
on the ground they are covered by social security." That
regulation created a great deal of furor in this pension
trust field when it was issued.
MR. BLOUGH: There is a little more, isn't there,
that you cannot pay on the first three thousand?
MR. SURREY: When you cover people only who earn
three thousand and above, you can't in providing them with
pensions figure the amount you are going to give them on
the first three thousand dollars of their salary, because
social security takes care of that. That was done to pre-
vent discrimination under those plans. It created a great
deal of furor, because those plans are easily susceptible
to tax avoidance. The old tax avoidance used to be in
covering the management. You now had to widen your plan
a bit, drop down to three thousand dollars a year level,
but you were still covering only a small portion of your
employees.
We felt it was necessary to prevent discrimination
in this field, to prevent what we thought was abuse of
the policy of the Statute. You may recall you had a press
conference on that, because Senator Taft objected at that
time. We had gone up to the Senate Finance Committee for
a preview--
H.M.JR: And we got pretty tough, and he didn't come
back at us.
MR. SURREY: That is right, but now he is coming
back at us. His amendment is to knock out those regulations
Regraded Unclassified
39
- 7 -
on this particular point. Now, he thinks we are wrong
under the Statute.
H.M.JR: Which?
MR. SURREY: He tried to put it on the simplification
bill. They talked him out of that. It is now the public
debt bill, an amendment pending to the public debt bill.
H.M.JR: Do you have a rule on it? Sabath wants to
see me this afternoon.
MR. SULLIVAN: This is on the other side.
H.M.JR: We could settle for wastepaper if this were
worth while.
MR. SULLIVAN: I am going to call him. If I am unable
to see him this afternoon, then that will give Joe an
opportunity to listen to them tomorrow.
H.M.JR: Joe who?
MR. SULLIVAN: Joe O'Connell.
MR. O'CONNELL: You mean on that wastepaper deal!
H.M.JR: That is really Procurement, isn't it?
MR. SULLIVAN: Sure. Joe was in on it all the time.
MR. SURREY: To give you an idea of the magnitude of
the problem, there are over two thousand pension plans
awaiting ruling in the Bureau of Internal Revenue. Those
are more than all the pension plans ever adopted up until
1942. The Commissioner, under the law, is about in the
position where he has to pass on all these plans.
H.M.JR: He doesn't look worried.
MR. CANN: Tell the Secretary, Stanley, about the
time limitation on that.
Regraded Unclassified
40
- 8 -
MR. SURREY: He is worried, I think, although he
doesn't look it.
MR. NUNAN: December is coming very quickly.
MR. BELL: November!
H.M.JR: You mean November, or December?
MR. NUNAN: I am not worried about November; I am
worried about December.
MR. SURREY: Under the law the Commissioner should
pass on these plans before December this year. However--
H.M.JR: This is the 16th of May.
MR. SURREY: I think the Commissioner could pass on
them, but we have a number of policy questions that we
were working out as best we could under the present Statute.
Anf if there had been no legislation in the field and
Senator Taft hadn't proposed this amendment, we would have
worked out as best we could some administrative controls
which we thought would be valid under the Statute to stop
the worst abuses. We couldn't stop them all. For example,
a pension plan was approved giving pensions of fifty thou-
sand dollars a year in the movie industry for about ten or
fifteen top executives. The other danger is that these
plans will terminate after the war is over and the excess
profits tax is out of the picture. The result will be
pensions to the few officials at the top of the company.
We are trying to work out rules that will stop that.
Some of the plans are highly beneficial to stockholders
who are also employees of the company. There could be a
lot of abuse, but we were trying to work it out as best we
could under the statute. Now, Senator Taft comes along
with his amendment and hits at one part of our regulation
which does to some extent keep pensions within reasonable
bounds. He wants to have public hearings on that amendment.
He will be supported by a great many of the people selling
these plans, and by companies who would like to adopt them,
although privately many of the insurance companies think
we are quite right in the position we have been taking.
41
- 9 -
Our problem is, leaving aside the debt limit bill, what
should we do? The Committee is loaded against us. Senator
LaFollette, who is on the Committee, called me up and said
his Committee was stacked against it. The only way we can
do anything is to come up and say that these are the abuses
that exist in this pension.
H.M.JR: Do you want to strike out the whole law?
MR. SURREY: He just wants to strike out the one pro-
vision in the regulations which eliminates the discrimination
in trusts limited to three thousand and over people.
H.M.JR: If he has his way then, what will happen?
MR. SURREY: If he has his way, one of the controls
which we have on pension trusts will drop out, and it will be
much easier to give high pensions to the top officials of
the company.
H.M.JR: I can't get awfully excited about this.
MR. BLOUGH: It comes down to whether in these hearings
we endeavor just to fight Taft's point, in which case this
will be quickly over--we will lose that point, and that will
be the end of it; or whether we should do more than fight
Taft's point, whether we should come up and say the whole
pension trust provision is being used as a tax avoidance
device costing the Government a great deal of money; and, "We
suggest that if you are going into it at all you take care of
this case and this case and this case, If in which case we probably
wouldn't get very far either unless we get support from the
House. But at least we will have made a positive approach to
it instead of just resisting the Taft amendment.
H.M. JR: I have nine minutes to go. John, have you an
opinion?
MR. SULLIVAN: Yes, sir, I am in favor of Roy's suggestion.
H.M.JR: He gave me an alternative.
MR. SULLIVAN: Well, the latter, to go in there and say
that if they are going to tinker with this thing let's do a
thorough overhauling job. And I think that if an aggressive
fight is made there is some chance that the Senate Finance
Committee may decide, "Well, it is getting along toward June 15;
we had better wait and take that up some other time."
42
- 10 -
H.M.JR: Commissioner?
MR. NUNAN: I haven't any suggestions other than this
is the first I have heard of John's and Mr. Blough's. I
think it would be a good idea. Mr. Cann, who is more
familiar, seems to be most heartily in favor of that.
MR. CANN: I am very much in favor of it, Mr.Secretary.
H.M.JR: Are you going to open it?
MR. CANN: Yes, sir - make a full presentation. But
I would say, it leaves some sort of dilemma in this respect,
that it has already been mentioned that these cases should
be acted upon before December 31. Now, actually, in
order to take care of this situation we have got to
act on those cases by October in order to permit these
companies to re-form their trusts if they don't meet
our tests. So we would have to have some assurances
that in any event if such a hearing is held, that the
statute will be extended, and yet I don't think the
Treasury would want to be in the position of asking the
statute to be extended. That is to say, it is not our
fault; we will do the job, and we are prepared to do it.
MR. O'CONNELL: Well, all this later discussion
assumes this will not be involved in the public debt
bill, and it seems to me it is about a ten to one bet
for the reasons that have been mentioned, the debt bill
will be out of the way. If this does not become in-
volved with the debt bill, then I think we ought to go
into the thing on an over-all basis.
MR. NUNAN: Doesn't it have to become involved
with the debt bill if you are going to offer it as an
amendment?
MR. O'CONNELL: No, because the Committee has your
debt bill out on Friday and the hearings will go on the
latter part of next week on this, and they will have to
wait for other legislation to tack this on.
43
- 11 -
H.M.JR: I thought the worry was that you couldn't
keep him from putting it on the debt bill.
MR. BELL: No, I think that is up to the
Committee. He is proposing it, but I would say the
Committee pretty well feels that if this is going
to be delayed beyond, say, June 1, that they would not
put it on the debt bill.
H.M.JR: If that is the case, to me the thing is
very simple. I don't think there is any argument to
try to keep the debt bill from having any amendment.
MR. BELL: That is right - any controversial amend-
ment, anyway.
H.M.JR: Then there is this exchange of letters
between the Committee and myself - we are not going
to take up any new taxes, are we?
MR. SURREY: That was just that the simplification
was out.
H.M.JR: Well, I personally--
MR. SULLIVAN: I think you may have something there,
Mr. Secretary. That letter was drafted so that it was
just while simplification was up, but the spirit of the
conference at that table went beyond what was said in the
letter.
H.M.JR: That is right. You were worried I might
have gone too far.
MR. SULLIVAN: That is right, I was. Now I think
that a telephone conversation with Senator George on
this might be helpful.
MR. NUNAN: Mr. Secretary, I was up at the Senate
Finance Committee the other day and Senator George
fulfilled what he had said he would do down in this
office, by getting Mr. Taft to withdraw this amendment
44
- 12 -
to the simplification bill. He told them of the
agreement he had, not to take any amendments if he
could possibly escape it. The only way that Senator
Taft withdrew his amendment to the simplification bill
was on a promise that he would be able to offer it to
the debt limit bill; and to that they all agreed - every
member of the Senate Finance Committee agreed to allow
him to offer it as an amendment to the debt limit bill.
H.M.JR: But you don't know whether they will
accept it or not.
MR. NUNAN: Wouldn't they have to wait until they
find out what is going to happen to the amendment be-
fore they could report the bill out - either as amended
or not? They have to pass on the amendment first.
There it is going to take a month. They certainly
wouldn't hold the debt limit bill until they pass on
the amendment.
MR. BLOUGH: Senator George said at the end of the
meeting that of course, if we find this is delaying
things too much, we will have to go ahead with the debt
limit bill.
H.M.JR: May I just say - in business, have you
heard anything about it?
MR. OLRICH: Yes, it is a problem of most business-
men who are trying to protect their employees who are not
unionizing. When they get down to the three thousand
dollar limit the supervisory employee can't get time and
a half or double time, and he is working long hours; so
a reasonable pension plan beginning at three thousand
is a businessman's idea of protecting his investment
in the supervisory force, providing he does not get
it into the fifty thousand trust. We have a pension
trust we started prior to this thing, up before the
Treasury now. We started at three thousand dollars, but
we have a top limit of any executive in the company at
six thousand dollars. And we have limited the amount
45
- 13 -
of the total pension that may be allocated to the entire
group as the amount that would be allowable if we had
integrated the entire pension plan with Social Security.
MR. SURREY: You follow our regulations?
MR. OLRICH: Well, no; for instance, I want the
lower bracket men to get more than the fifty a month.
I am entitled, under your Treasury plan, to twelve
thousand dollars pension. Under the plan I drew up, I
limited myself to six thousand dollars, and took the
six thousand that I would get and spread it out over
the lower group. The three top executives contributed
about ten or twelve thousand dollars towards the lower
group.
MR. SURREY: You place the voluntary limit at six
thousand?
MR. OLRICH: Yes, make it non-revokable and by
annuities; if 8. man leaves, he gets that annuity. There
are no strings on it, but it is to his interest to stay,
and we take the top brackets and say, "Well, here, if
we had integrated this man, we would spend thirty
thousand dollars for this pension trust; that is all we
will spend. But we will divide it so that the men with
the lesser incomes will get more, and the men with the
higher income - in the higher income tax bracket will
get less."
MR. SURREY: But, unfortunately, the other companies
aren't doing that.
MR. OLRICH: No, but we think that a man who is
entitled to a fifty thousand dollar pension ought to
be able to save enough that he wouldn't need the
fifty thousand dollar pension.
MR. SURREY: Our position is not that your plans
should not be permissible. They should be.
MR. BELL: Plans like that should be encouraged.
46
- 14 -
MR. CANN: This particular plan probably doesn't
present any insurmountable problem.
MR. OLRICH: We indicated three thousand dollars
as a fair limit because it takes in the supervisory
force. The management is attempting to prevent or
discourage the unionization of the supervisory force so
that it will have one control of its employees. It
must offer something, and that something is a pension
higher than Social Security.
H.M.JR: Now, let me ask you this. You started to
tell me, and I didn't understand. You said something
about unionizing--
MR. OLRICH: There is a concerted action among
employers to prevent the unionization of foremen, be-
cause ifthe foremen, who are the top-sergeants of industry,
are unionized, there is no assurance that the will of
the management is exercised down through the employees.
In other words, you have to be a vice president in order
to give orders.
In order to make it attractive that you are a super-
visory force, and that you are set apart, and that you
do not get time and a half, and that management offers
you some inducement for your independent action, pension
trusts will be set up wherever possible, just as in the
early days, group insurance was set up to attract the
lower-priced employee to work for a particular employer.
That is one approach to it that you have to make. The
lower bracket of the supervisory force has to have
some attraction to stay with you and remain part of
management rather than part of the rank and file employees.
You must remember, the Army, in its recent strike,
where the foremen struck, refused to accept the product
of that plant because they had no assurance of the
proper inspection of the product because the super-
visory force was out.
47
- 15 -
So, if you can relax in that three thousand dollar
group in some way, you are helping management - not
employees, but management - sustain itself, because
they do not get time and 8 half or double time. They
work long hours and they get no other advantage than an
employee has, except some slight increase in pay; and
if you get the pay brackets too high, you are putting
them out of line with relationship between the worker
and a person of reasonable skill.
H.M.JR: What I would say is this, Dan - this is
the way I feel. I would get it over to Mr. Doughton
and Mr. George that we are not looking to start any-
thing now. This happens to be Senator Taft's pet; I
have a couple of pets, too - community property, joint
returns, oilwell depletion, those gas things that the
fellow got through from Oklahoma, tax-exempt securities -
I have got a lot of them, see?
Now, if Mr. Taft has one, I have six; if they want
to start something, O.K., but I don't want to start
anything. I have a lot of loopholes that I would like
to go up there and talk about, but I am not particularly
anxious to do it between now and - what was that?
MR. NUNAN: Second Tuesday! (Laughter)
H.M.JR: And my suggestion is that they better lay
off. If we are going to go up there, we will tell the
whole story, and the first thing you know, somebody is
going to make a slip and talk about something else the
Treasury doesn't like - and something else - and you
will have a regular hearing on the tax bill.
Now, who is contacting them up there?
MR. BELL: Stanley Surrey has been conferring with
Taft. I believe you thought that Taft weakened a little
on Saturday morning about the extent of this hearing.
MR. SURREY: I think the fact that he has put it
over to the 26th indicates that it won't go on the debt
bill if you push Senator George pretty hard, and Congress-
man Doughton.
48
- 16 -
H.M.JR: Why don't you get in on this?
MR. BELL: I will be glad to talk to Senator George
about the thing if you want me to.
H.M.JR: I would like you to.
MR. BELL: I would like for Doughton to know about
it. I assume he does, but we haven't told him.
H.M.JR: Would you mind talking to both of them for
me and report back?
MR. BELL: Glad to.
H.M.JR: Let's get the thing settled on the basis
that the Treasury doesn't want any amendments brought
up to the tax bill now.
MR. BELL: But if they are going into the pension
trust phase of the tax law, they should go into it thoroughly.
H.M.JR: Yes, and I have a couple, too, that I want to
bring up! I am serious.
MR. BELL: I know you have! I know you are serious.
You better wait until next year, though.
H.M.JR: On the tax front I am a peace-loving fellow
and I don't want to start an Anzio Beach.
MR. SURREY: This will involve naming names, puiling
out plans we think are pretty raw, and calling the atten-
tion of the Committee, and so forth.
H.M.JR: The raw ones will all be in the State of
Ohio. (Laughter)
Mr. O'Connell, Mr. Olrich, Mr. Nunan, Mr. Cann, Mr.
DeWind, and Mr. Reagh leave the conference)
49
- 17 -
MR. BLOUGH: Paul mentioned pension trust and tax
avoidance. He called me and suggested we get him a
memorandum on these. He has seen both of them and made
some suggestions for changing them.
The question is now under the circumstances that we
mentioned the other day; do we finish these up and give
them to him?
H.M.JR: Yes, that is all right.
MR. BELL: Give them to Paul? He is out of the
Treasury, isn't he, definitely?
MR. SURREY: You have one already.
H.M.JR: I have confidence in Mr. Paul; if I want
to use him on this thing, I can use him. If I don't,
it is a slap in the face, and I don't want to do that.
I have confidence in him. After he has read it, I
want him to advise me.
MR. BLOUGH: We are entirely willing.
H.M.JR: Any doubts?
MR. BELL: No, except he is a practicing attorney.
H.M.JR: Well, the thing is a little bit unusual, and
if I didn't do it, it would look as though I didn't trust
him.
MR. SURREY: we do use people on gift taxes. The
Committee is giving us advice.
MR. BELL: I suppose it is the same thing.
H.M. JR: Magill is a practicing attorney; does that
take care of that?
MR. BLOUGH: Yes.
50
- 18 -
MR. SULLIVAN: You wrote the President a memorandum
after Carter Glass su gested a new man on the Court, and
you sent the President a letter for him to send to
Carter Glass saying that he was going to name these
four men, and Senator Chavez was interested in somebody
who was endorsed by the National Committee; Senator
Russell called me in behalf of somebody; I told him
we would recommend these four men and were going to
stay with them. Senator Maybank wrote to you, I think,
and Joe 0' Connell answered it.
In other words, if we write now the type of letter
suggesting Kitchen, in the first place, we are weakening
our position on those four, and we are in wrong with
all the other people.
H.M.JR: I accept your statements. The answer is
we shouldn't.
The thing is, I am going to take Mr. Sullivan's
excellent advice and put these on ice.
MR. SULLIVAN: I didn't know but what I should talk
with Herb, but Herb did not sleep at all last night, and
he got a shot this morning.
H.M.JR: I spoke to Mrs. Gaston this afternoon
and she said, "Don't you want to talk to Herb?" - which
I did.
MR. BELL: How did he feel?
H.M. JR: lie said not to worry, that he is feeling
all right. But I do worry.
51
May 16, 1944
This memorandum presents the pension trust situation
as of May 12. It does not deal with the problems created
by the appointment on that date of a Subcommittee of the
Senate Finance Committee to consider a pension trust
amendment to the public debt limit bill submitted by
Senator Taft.
REP.
52
MEMORANDUM
TO:
Secretary Morgenthau
May 12, 1944
FROM:
Mr. Paukep.
SUBJECT: Pension Trust Problems
The Revenue Act of 1942 completely revised the
tax treatment accorded to employee pension plans.
The Treasury Department in proposing the legislation
hoped to obtain definite rules which would prevent
tax avoidance in this field. The statute as finally
drawn, however, does not achieve this objective, and
offers potentialities for tax avoidance on a major
scale.
Such possible abuses may to some extent be blocked
through vigorous administrative action in the appli-
cation of the statute. Such effective administration
may invite recourse to legislation by those who dis-
agree with the results. Moreover, the present law
will not permit all undesirable practices to be
curtailed. While it probably would be undesirable
at this time for the Treasury to initiate legislation
to strengthen the statute, if the subject comes up for
legislative consideration the Treasury will not only
be able to present a defense for its interpretation
of the statute, but could also show the need for
additional safeguards.
In addition to the complexity of the substantive
problems involved and the difficulty of devising
appropriate rules, a very grave administrative prob-
lem is presented by the large number of pension trusts
that are being adopted and presented to the Commissioner
for approval. The magnitude of the problem, the lack
of trained personnel in the Bureau, and the high stakes
Regraded Unclassified
53
- 2 -
inducing strong opposition from certain taxpayers,
are serious obstacles to successful administration.
The attached memorandum discusses this situation
in detail and contains a description of the major
abuses possible under the statute and the action being
considered by the Bureau of Internal Revenue.
54
May 12, 1944
MEMORANDUM FOR THE SECRETARY ON PENSION TRUST PROBLEMS
Background: Revenue Act of 1942
Section 162 of the Revenue Act of 1942 completely
revised the tax treatment accorded to employees'
pension plans. Pension plans which qualify are now
permitted the following major tax advantages and ex-
emptions: First, employer contributions to such plans
are deductible for both excess profits tax and normal
tax purposes; second, the income of the fund estab-
lished under the plan is exempt from tax; third, the
employee pays no tax until the benefits are ultimately
paid to him; and, fourth, under the salary stabilization
regulations, the amounts contributed are exempt from the
established controls. These are very substantial bene-
fits, especially at a time when tax rates are so high
that deductions and exemptions are very profitable.
In order to qualify for these benefits a plan
must meet the following principal requirements: First,
it must be for the exclusive benefit of employees;
second, it must be irrevocable as to the amounts con-
tributed; and, third, it must not discriminate in favor
of officers, stockholders, highly paid or supervisory
employees. The main test is that of discrimination
and here the statute leaves it to the Commissioner of
Internal Revenue to determine whether or not the plan
is discriminatory.
In several respects these pension trust provisions
afford potentialities for tax avoidance on a major
scale. These may or may not prove susceptible to
elimination in the administration of existing law.
Four of these possibilities for abuses have already
become apparent. The administration of the statute
and the possibility of further legislation in this
field are also matters for concern.
55
- 2 -
I. Plans For Salaried Employees Earning Over $3000
Plans which include only employees earning salaries
of over $3000 present serious problems. On the average
such plans cover only about 4% of the employees of a
concern. The International Shoe Company has such a
plan which in 1941 covered 321 employees out of a total
of 33,727, or less than 1%. Consolidated Aircraft
Corporation adopted a similar scheme covering 1,069
employees in 1941 out of a total of 44, 201, or about
24%. The Bigelow-Sanford Carpet Company plan covers
154 employees out of a total of 5,424. The DeVoe &
Reynolds Company, Inc., plan covers 204 employees out
of a total of 2,054, or close to 10%. It is generally
recognized that the covered groups in these plans are
almost entirely made up of officers, executives,
managers and supervisors. The usual reason given for
adopting an eligibility requirement of $3000 is that
those earning less are provided for by Social Security.
The validity of some plans of this type is assumed
by the statute in that it expressly provides that a
plan shall not be deemed discriminatory "merely" be-
cause it excludes employees whose entire earnings are
covered by the Social Security Act (earnings up to
$3000). The Treasury Department from the outset has
construed this provision to mean that such plans are
qualified only if the contemplated benefits they provide
will be no greater in proportion to salary than those
provided by Social Security. Thus, since the maximum
benefit a $3000 a year employee can obtain from Social
Security is a 34% of salary pension, no pension under a
$3000-and-over plan may exceed 34% of salary and in
most cases will be somewhat less.
While this limitation has received a substantial
measure of acceptance in new plans, the principle has
also been attacked as a violation of the law by many
taxpayers and by a few Members of Congress (notably
some Members of the Senate Finance Committee such as
Senators Taft, Vandenberg and Radcliffe). The intro-
duction of legislation to prevent its continued
56
- 3 -
application is not unlikely. This likelihood may, how-
ever, be reduced if some measure of tolerance can be
applied with respect to the relatively few such plans
adopted prior to 1942. Attention is being given to the
feasibility of allowing some leeway as to these older
established arrangements. It may be found practicable
to approve such of those plans as provide excessive
benefits only as to the salary groups immediately above
$3000.
The rules for integrating the $3000 and over plans
with the Social Security program have not yet been com-
pletely worked out. A further problem exists as to the
provisions in many of these plans for additional benefits
in the form of death benefits either before or after
retirement. These vary but are generally expensive and
represent increased values which may reasonably be con-
sidered to be proportionally in excess of the Social
Security Act benefits. However, controversy may be
provoked by the requirement now being considered that
such benefits be reduced or eliminated.
The integration of these plans with Social Security
does not assure an absence of discrimination and tax
avoidance. Because of the exclusion of most employees,
the annual cost of the benefits provided is largely con-
centrated in the higher salary groups. Partial studies
would indicate that for the first ten or fifteen years
of such plans as much as 80% of the annual contributions
of the employer may in many cases be applied for the
benefit of the highest paid 20% of the covered employees.
At the same time, the exclusion of the large contribu-
tions made for a high paid employee from taxable income
in the years when he is subject to high surtax rates
produces a great tax saving which will be offset in
only a limited manner by later tax payments at lower
surtax rates on the pension after retirement. Thus, a
pension of $35,000 for an employee age 60 who will retire
at 65 may cost as much as $100,000 a year for five years.
The tax on this contribution imposed on top of a $100,000
present salary would obviously be much greater than the
57
- 4 -
tax on subsequent payments of $35,000 after the salary
is discontinued. The $3000 plan makes possible this
type of advantage for top employees, at relatively
little cost for lower paid younger employees, who in
any event will be almost entirely in the management
group. There seems to be little that can be done to
correct this situation under existing law.
The present law specifically states that a plan
shall not be deemed discriminatory merely because the
benefits it provides bear a uniform relationship to
salary. The Treasury rule as to integration observes
this principle. However, at least in the case of
$3000 plans, there is a basic question as to the sound-
ness of the policy in the statute. A pension of 34%
of a $100,000 salary appears to be much more adequate,
even in relative terms, than a similar rate of pension
applied to a $3000 salary. The Social Security law
recognizes the validity of this consideration by pro-
viding benefits of as much as 80% of compensation at
the $600 level and a maximum of only 34% upon earnings
of $3000.
II. Benefits For Stockholder Employees
The second problem has to do with stockholder
participation. The statute implicitly permits the
inclusion of stockholder employees by providing that
the plan must not discriminate in their favor. Many
plans now being adopted by smaller corporations cover
employees owning all or a large part of the company's
stock. In some instances plans submitted to the Bureau
of Internal Revenue for approval have provided for as
much as 75% or 80% of the annual employer contribution
being allocated to three or four shareholders owning
all the stock. If a company is subject to the excess
profits tax, the result of such an arrangement will be
to allocate to shareholders from the profits contributed
to the plan several times as much as would have been
payable as dividends if no plan had been adopted and a
tax had been paid by the corporation on the amount con-
tributed. The most glaring of these plans have been
scaled down upon the objections of the Bureau, but in
58
- 5 -
some instances the Commissioner has felt obliged to
approve plans where more than 50% of the annual cost
is being allocated to stockholders. The tax avoidance
is only partially reduced in such cases and is still
most material. If this particular avoidance is to be
substantially reduced, a company should not be able to
allocate to its shareholders at the most more than
about 20% of the total cost if it is subject to the
present excess profits tax. The adoption of such a
rule is being considered by the Commissioner's office
currently. If it is adopted, it may provoke further
controversy and claims that the authority given by the
statute is being exceeded. The statute is 80 broadly
drawn as to permit such arguments.
III. Possible Early Termination
A third difficult problem that has arisen relates
to the matter of possible early termination of plans.
The customary pension plan provides benefits for the
older employees as well as the younger. Usually the
older group will include the highly paid. The com-
bination of high pay and advanced age renders the cost
of benefits with respect to such employees very heavy.
In extreme cases the annual cost of an individual's
pension spread over the years remaining before retire-
ment may exceed his direct compensation. Accordingly,
if the plan is terminated after a few years, its
practical effect may have been to benefit only the
highly paid. A study of 536 plans adopted prior to
1942 has revealed that 60% of them were adopted in
1940 and 1941. Literally thousands have been adopted
or submitted for approval since 1941. It is clear that
if corporate tax rates were substantially reduced and
profits declined the pressure to adopt plans for tax
purposes would largely disappear. If this should occur
in three or four years, it might also be followed by a
wave of terminations, the net effect of which would tend
to be large scale tax savings for a few older employees
with none of the social purposes in a pension plan having
been served in any substantial way.
59
- 6 -
Methods for controlling this situation are being
studied currently. The problems involved in eliminating
this potentiality for tax avoidance are extremely diffi-
cult and complex. Any far reaching solution is likely
to produce controversy and further arguments as to the
lack of statutory authority.
IV. Excessive Funding During Years Of High Tax Rates
A fourth matter of considerable importance during
the war relates to excessive funding of pension plans.
A war plant may now employ many times the number of
employees it will have in the future. If it includes
all or many of these in its pension plan and makes con-
tributions towards the cost of their pensions, it may be
laying aside funds which will never be used for the
benefit of most of the present employees. The statute
does not require vesting of benefits and employees
leaving after the war might forfeit all claim upon the
fund. In that event the balance in the fund, which may
have cost the Government from 80% to 100%, may be suf-
ficient to carry the cost of the plan for many years
for the benefit of a few key employees remaining. This
problem may be most acute in the aircraft corporations,
several of which have adopted $3000 plans covering all
employees earning in excess of that figure and having
six months or a year of service. As compared with the
present number of employees covered, the key group re-
maining after the war could conceivably be relatively
very small. If such concerns have cost plus contracts
or have been subject to renegotiation the entire cost
of pension benefits may have been borne by the Govern-
ment in the form of cost allowances. In the case of
cost plus contracts the War Department is alive to the
problem and is reported to be taking steps to disallow
excessive amounts as items of cost. In the case of
renegotiation the statute specifically compels
recognition of all Internal Revenue Code deductions
as costs and no solution appears possible there. From
the tax point of view it may be possible to view these
plans as potentially discriminatory and for employer
60
- 7 -
benefit. Consideration is being given to dealing with
this problem by permitting no funding for employees
having less than five years service or some similar
period. Again controversy may arise over such a rule.
V. Administration Of The Present Law
Close to three thousand plans have been submitted
to the Bureau of Internal Revenue for approval since
August 1943. The initial lack of trained personnel
to handle these applications has presented substantial
difficulèies. Moreover, it required several months to
secure the services of two competent actuaries to handle
the actuarial and cost problems involved. Consequently,
relatively few cases have been disposed of as yet and a
considerable backlog has developed. Many complex prob-
lems, chiefly those outlined above, are proving most
difficult of solution and it is necessary for the Bureau
to feel its way carefully. Every effort is being made
to expedite the completion of rulings. Some progress
has been made but the problem remains substantial. It
is hoped that the issuance of rulings will be greatly
accelerated in the next two months. A staff of approxi-
mately 70 persons has completed a course of training
designed to permit the satisfactory handling of cases
with the assistance of the two actuaries now available.
In addition, the services of two more actuaries are
being sought.
VI. Possible Further Legislation
As has been indicated the extent to which admin-
istrative controls will prove effective is not yet
clear, but it is apparent that their successful appli-
cation is problematic and most likely to be the subject
of much controversy. It may well have legislative re-
percussions, in which event the Treasury will probably
wish to make recommendations. In view of the latter
possibility, attention is being given to preparation
of material to present to the Congress in support of
the Treasury's rulings and interpretations and in sup-
port of possible amendments to the statute should the
61
- 8 -
Congress wish to consider such a program. However,
pending further experience with the present statute
and in view of the controversial background of this
subject, it appears advisable that the Treasury should
not initiate any proposals for new legislation at the
present time.
62
May 16, 1944
3:45 p.m.
WAR REFUGEE BOARD
Present: Mr. Pehle
Mr. Luxford
Mr. DuBois
Mrs. Klotz
H.M.JR: All right, go ahead.
MR. PEHLE: This takes up from where I saw the
President. I want to amplify it & little bit about
what he said. He was very, very favorably disposed
toward the whole idea. He had read it the night before
in one of Grafton's columns. He thinks Grafton is a
good man. He didn't like the name FreePort, says
we have to get something that indicates the temporary
nature of this thing, and that these people will go
back, but he started to get very expansive about Army
camps in the South, and the Navy to bring the people
over. I showed him all the publicity on the thing;
this report of William Green, all the letters of
testimony. He was very interested in that. We hadn't
got any opposition to date.
Then he asked whether Congressional approval was
necessary. I outlined to him the views on that; what
Attorney Biddle had said about the legal side, but
Biddle said he thought he ought to get Congressional
approval - what Stimson felt, how you feit, and
Secretary Hull.
I said personally that I felt it was too late to
get Congressional approval, that there wasn't time re-
maining to get it.
Regraded Unclassified
63
- 2 -
So he said if there were 8. specific situation in-
volving a small group of people somewhere, say, be-
tween five hundred and a thousand, that needed help,
that he would be willing to bring them into the United
States, and at the same time, send a message to Congress
saying what he had done.
I said, "Can I leave the memorandum with you that
has the views of the three Secretaries?" He said, "No,
I know what this is now."
He said, "Send it to me with another memorandum
explaining how this thing can be done." Then we started
to canvass the situation following that as to whether
there was such a situation, and we found there was such
a situation in Italy, today.
We just got more information which indicates that
it is & real emergency, and that it has very vast pro-
portions, and if something isn't done - just that many
lives that won't be saved, that is all.
Joe can outline to you what that is, because I
think it is a very important situation.
MR. DuBOIS: It indicates that if we can take
large numbers of refugees from Italy, it would save
thousands of lives. A report just came through from
our man in Algiers - Ackermann - in which he describes
the various conferences he has had over there with the
Jugoslavs, and with Bob Murphy.
The facts, briefly, are that refugees have been
escaping from Jugosiavia on small boats to Southern
Italy, that during the last six weeks, up to the end
of April, they were coming in at the rate of eighteen
hundred and fifty 8. week.
H.M.JR: How many?
MR. DuBOIS: Eighteen hundred and fifty. Understand,
they are not all Jewish refugees. It was indicated
64
- 3 -
clearly in his talks with the Partisans, that the
Jugoslav civilians were being murdered indiscriminately
by the Germans, so the Jugoslavs were bringing them
in through their lines to save their lives.
Of course, they couldn't take care of them in too
large numbers in their own territory, and they were
getting them out to Italy. During the course of his
conversation, Ackermann's conversation, with the Jugoslavs,
they raised the problem of giving aid to the Jews in
Roumania and Hungary.
At first the Jugoslavs were rather reluctant, as
they point out, not for lack of humanitarian motives,
but solely because of the limit of supplies and facili-
ties.
Finally, however, Tito agreed he would do what he
could to aid the escape of Jews from Hungary through
Jugoslav territory. But he wanted our cooperation to
the extent possible in that whole effort.
In the midst of all that, Bob Murphy sent a memo-
randum to the Military Government which resulted in a
directive being issued in which he said, "I feel that
not only should we not encourage Partisans to send
further refugees out of Jugoslavia, we should, in fact,
take positive action to discourage - to disregard" - -
and then he quotes the facts about refugee facilities
in Southern Italy being overtaxed, in that connection.
H.M.JR: The best thing is - I have Winant coming
here at four, see? If you men aren't busy, I can see
you at the house tonight at eight-thirty.
MR. DuBOIS: This is very important.
H.M.JR: I can't do it this way.
MR. DuBOIS: It will take some time.
H.M.JR: If you people are free, I will be free at
eight-thirty tonight.
65
- 4 -
MR. PEHLE: That will be fine.
H.M.JR: And bring what's-his-name with you -
doesn't he work with you?
MR. PERLE: Abramson? Sure.
H.M.JR: And you people come to the house.
MR. PEHLE: Right.
H.M.JR: What happened this morning?
MR. LUXFORD: We had a very tough fight. The issue
was, what are we going to do if Sweden throws up her
hand on the negotiations on ball bearings; FEA proposed,
first, that we cut off the trade agreement with Sweden;
second, that we investigate SKF; third, that we proclaim
a list of all their companies throughout all the world.
Acheson threw up his hands and would not hear of
investigating SKF. He, moreover, said that Batt had
been to see him and production in SKF in the U.S. was being
greatly reduced - some eighteen percent, just by virtue
of what we had done so far in newspaper comment.
He did agree, however, that they would suspend the
trade agreement and cut off all exports to Sweden, and
would go through with the proclaim listing. We all
threw in the hopper that we wanted to revoke the general
license.
H.M.JR: Was Patterson there?
MR. LUXFORD: No one from the War Department there.
H.M.JR: Well, I will get more.
MR. LUXFORD: One thing, Mr. Secretary, they are
insistent that we and the APC issue a statement that the
American production of SKF, that is going into the war
effort, because the workers in SKF have a feeling that
they are producing for the Axis.
66
- 5 -
That has been an eighteen percent drop. Is that
all right?
H.M.JR: Oh, no--
MR. LUXFORD: If it is all right in the Treasury,
may we issue that statement?
H.M.JR: Yes, but I don't want the Treasury to
issue it.
MR. LUXFORD: It would have to be issued by us
and the APC.
H.M.JR: I will abide by what you fellows say.
O.K.
67
May 16, 1944
3:55 p.m.
CONGRESSIONAL INQUIRY
Present: Mr. Smith
Mr. C. S. Bell
Mrs. Klotz
(The Secretary reads ticker report of 3:20 p.m.
May 16, 1944, attached.)
H.M.JR: Now, the thought I have is this: I don't
know whether it is good or not, but I was thinking--and I
wanted you to think about it--of getting our State Chairman
for South Dakota, where this man comes from, to get after
this fellow and tell him to lay off. Do you see? What
is your attitude?
MR. SMITH: Well, it depends on whether our Chairman
in South Dakota is friendly with him or not. He is very
likely to say they are trying to put the pressure on him
to keep him still.
H.M.JR: Let me find out from Gamble.
MR. SMITH: It could backfire.
H.M.JR: All these things can if you don't do anything.
MR. SMITH: I am not being timid on the thing; I
just wonder if that is the thing to do.
(The Secretary holds a telephone conversation with
Mr. Gamble.)
68
916KHR ****
VGES
Mag 16. 1944
3:20 P. M.
the Comptroller General reported that the expense accounts of
Secretary Morgenthan and two addes totalled $158 for their three-wook
tour of African and Italian battle areas last October. This assust
was spent for feed. the Army provided transportation and ledging.
Senator Bushfield, who had asked for a complete accounting of
expenses insurred during the trip. used the Comptroller's report was
"Indierous."
"This fails to disclose the information I was after." he ofded.
"It is obvious that 6158 is only a simute partien of the extent of the
cost when you consider the cost of gaseline. oil, calaries of the CTOV,
depresiation, ets."
69
Meeting in Secretary Morgenthau's Office
May 16, 1944, 4:00 P.M.
Present: Secretary Morgenthau
Ambassador Winant
Mr. White
The Ambassador stated that he was disappointed that he couldn't get
more of a commitment out of the British Government with respect to their
adherence to the principles set forth by the technical experts on the
International Monetary Fund. He said that the Prime Minister was very
careful not to permit the adoption of any measures or policy which would
split the Conservatives and that he probably felt that an attempt to ob-
tain a decision on the question of the adherence of the principles of
the monetary fund would create a schism on the Conservative part. Winant
said that Lord Beaverbrook is heading the opposition to the Fund on the
grounds that it constituted a wedge in the first line of defense of a
strong Empire. Beaverbrook favored Empire preference and felt that ad-
herence to a monetary union would threaten it. By knocking the monetary
proposal out at this early stage it would remove a potential threat to
the Empire. Lord Amery also was strongly opposed, Winant said, because
he is a very strong Empire man and feels that the Empire could best be
held together if it didn't adhere to such international arrangements.
Hudson, who was strong for the promotion of agriculture in the United
Kingdom, likewise joined the opposition.
Ambassador Winant went on to say that on the other hand Sir John
Anderson was very strong for adherence and worked hard for it. Like-
wise Lord Keynes had spent the last month in visiting members of
Parliament and getting their support. Lord Cato was for it, as was Eden.
All the "good men", he thought, were for it. The Ambassador said he
(Winant) was very disappointed that he could not get a stronger state-
ment from the British than that Anderson cabled the Secretary. He said
that even Anderson felt disappointed.
The Secretary said that he didn't understand the purpose of
Ambassador Winant's cable asking him (Secretary Morgenthau) not to
reply to Anderson's cable until Ambassador Winant had had an opportunity
of conferring with him. The Secretary said that apparently we were not
to move ahead until Winant had discussed the matter with us in Washington.
The Ambassador said that had not been his intention. He had not meant
that we should delay going ahead with the invitations. We had apparently
misinterpreted the cable. He cabled as he did because he was afraid the
Secretary, being disappointed in the answer he received from Anderson,
might show that disappointment in a reply to Anderson. The Ambassador
Regraded Unclassified
70
- 2 -
wished an opportunity to explain the background to Secretary Morgenthau
80 that Secretary Morgenthau would not be tempted to send a response
that would be critical of action taken by Anderson.
The Secretary replied that Lord Halifax and Mr. Opie had carefully
explained just what the situation was with respect to the British Govern-
ment's inability to commit themselves now and that their explanation had
been clear to us and we had not expected the Government to commit itself
at this time. He had explained to Halifax that he could not commit
Congress and, therefore, we neither expected nor wanted a commitment now;
all we had wanted from them was their agreement to participate in the
conference. The Ambassador said he had not quite understood that. He
had been hoping to get something more than that from the British because
if all that was being asked for was acquiescence to participate in a
conference there's no reason why the British couldn't have given that
several weeks ago.
The Secretary asked what was his suggestion as to what we could do
now and the Ambassador replied that he recommended we hasten the invita-
tions and set the date. The Secretary asked whether there was any cer-
tainty that the British Government would permit representatives of the
exiled governments to leave the United Kingdom at this time in order to
attend a conference. The Ambassador replied that he thought they would
permit small groups.
The Secretary then said he would like to talk to the Ambassador
alone for a while and Mr. White left the room.
The Secretary called Mr. White about half an hour later and said
that he wanted to talk to the Ambassador alone because he thought that
probably the Ambassador might be withholding something that related to
the date of the invasion which might have restrained him from saying
more while I was at the conference.
The Secretary said that he had asked for an appointment with the
President to get his approval for a specific date for the conference.
The date which the Secretary said he would prefer would be the 21st
of June.
H. D. White
71
MAY 1 6 1944
My dear General Marshall:
I was greatly pleased by your
friendly note of birthday greeting
and I thank you for it.
You know that it has been my
ambition to relieve you of all worry
as to the basic financing and it is
gratifying to hear that you have felt
assurance on that score. We in the
Treasury in turn have been immensely
helped in our part of the task by our
confidence and the Nation's confidence
in you.
I an happy to feel a sense of
partnership with you in the great
enterprise.
Sincerely,
(Signed) Henry Morgenthau, Jr.
General George c. Marshall
Chief of Staff
War Department
Washington, D.C.
<<<
Inclassified
72
WASHINGTON
May 11, 1944.
Dear Mr. Secretary:
I offer my heartiest congratulations
on your birthday. Your tireless efforts to
provide a sound financial background for this
tremendous war is a great assurance to me, and
I want you to know that your personal interest
in the affairs of the Army is much appreciated.
Faithfully yours,
You
The Honorable,
The Secretary of the Treasury.
73
TREASURY DEPARTMENT
fill
INTER OFFICE COMMUNICATION
Date
TO
Secretary Morgenthau
May 16, 1944
FROM Fred Smith AS
Following up Mike Cowles' letter, I talked to
Richard Wilson of LOOK magazine. He says all the
material has been sent to New York, but he is asking
the New York office to copy off all comments about
you and get them back to him. When he gets them
he will call me.
I will follow him up.
Regraded Unclassified
74
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE May 16, 1944
TO Secretary Morgenthau
FROM Ted R. Gamble
This is a sample wire for your approval. It should be
returned to my office. We plan to send this wire to all firms
employing over one thousand persons, of which there are
approximately 3000.
There is also attached a sample letter to be sent to the
twenty-four thousand odd firms employing over 100 persons. We
would like your signature on the letter and it should also be
returned to my office.
approved after changes
m Hm.
75
War Finance Division
Expenses of Loans
Mr. Robert H. Smith
President
Simplex Motor Company
Detroit, Michigan
This wire is sent to you as Chief Executive of your Company
to enlist your active support in the forthcoming War Loan Drive.
Past experience shows that best results are obtained only where
definite plant quota is established, person-to-person canvass
organized and where the drive is supported enthusiastically by
top management. I am asking all companies of your standing to
establish a Fifth War Loan quota averaging $100 cash investment
per employee. All payroll deductions during June and July will
be credited toward this quota. We are entering one of the most
critical stages of the war, and we need your all-out support.
Please wire whether I can count on your full cooperation so that
I may notify our state committee who will supply yötz with
all details and materials necessary to get the job done.
Henry Morgenthau, Jr.
Secretary of the Treasury.
Regraded Unclassified
76
ANDARD FORM No. 14
THE PRESIDENT
FROM
MARCH 10, 1926
BUREAU
War Finance Division
TELEGRAM
CHG. APPROPRIATION Expenses of Loans
OFFICIAL BUSINESS-GOVERNMENT RATES
May 17, 1944
- -
10-1728
Mr. Robert H. Smith
President
Simplex Motor Company
Detroit, Michigan
This wire is sent to you as Chief Executive of your Company
to enlist your active support in the forthcoming War Loan Drive.
Past experience shows that best results are obtained only where
definite plant quota is established, person-to-person canvass
organized and where the drive is supported enthusiastically by
top management. I am asking all companies of your standing to
establish a Fifth War Loan quota averaging $100 cash investment
per employee. All payroll deductions during June and July will
be credited toward this quota. We are entering one of the most
critical stages of the war, and we need your all-out support.
Please wire so that I may notify our state committee who will
whether 2 can count on you full corpenation
supply you with all details and materials necessary to get the
job done.
Henry Morgenthau, Jr.
Secretary of the Treasury
OK. 10m 2
77
Dear Mr. Smith:
I am writing this letter to you as chief executive
of your company to enlist your active help in the Fifth
War Loan Drive. We need your all-out support in selling
"E" Bonds to the men and women workers on your payroll.
Experience in the Third and Fourth War Loans proves
conclusively that sales to employees can best be obtained
where a definite plant quota is established, a person-to-
person canvass organized, and where a company Drive is
endorsed enthusiastically by top management as well as
labor and other employee groups.
Therefore, I am asking all companies of your stand-
ing to establish a Fifth War Loan quota averaging a $100
cash investment per employee, and in cooperation with
local bond committees, to organize such plans as may be
necessary to reach that objective. All payroll deductions
during June and July will be credited toward this quota.
As we enter one of the most critical stages of the
war, we need the all-out support of management and labor.
I would appreciate your writing me in Washington
whether I can count on your full cooperation 80 that I
may notify your State War Finance Committee to supply you
with all details and material necessary to help you get
the job done.
Sincerely,
Mr. Robert H. Smith
President
HM
Simplex Motor Company
Okd.
Detroit, Michigan
with conschy
Regraded Unclassified
78
THE SECRETARY OF THE TREASURY
WASHINGTON
Dear Mr. Smith:
I am writing this letter to you as chief executive
of your company to enlist your active help in the Fifth
War Loan Drive. We need your all-out support in selling
"E" Bonds to the men and women workers on your payroll.
Experience in the Third and Fourth War Loans proves
conclusively that sales to employees can best be obtained
where a definite plant quota is established, a person-to-
person canvass organized, and where a company Drive is
endorsed enthusiastically by top management as well as
labor and other employee groups.
Therefore, I am asking all companies of your stand-
ing to establish 8. Fifth War Loan quota averaging 8. $100
cash investment per employee, and in cooperation with
local bond committees, to organize such plans as may be
necessary to reach that objective. All payroll deductions
during June and July will be credited toward this quota.
As we enter one of the most critical stages of the war,
we need the all-out support of management labor, and every
other force in America
I would appreciate your writing me Washington
whether Hat Icancienton in your fulled. pertion
60 that I may notify your State War Finance Committee to
supply you with all details and material necessary to
help you get the job done.
Sincerely,
K. Am.Jr.
Mr. Robert H. Smith
PORVICTORY
President
BUY
VRITED
STATES
Simplex Motor Company
WAR
BONDS
Detroit, Michigan
AND
STAMPS
79
Mr. Smith had this letter
signed and sent air mail
special delivery from his office.
80
May 16, 1944
Dear Mr. Welles:
I am sorry I missed you when you were
here, but Fred tells me you will be back
next week, and I am looking forward to talk-
ing with you then.
I am sure you will be very helpful to
us in the Fifth War Loan Drive. This will
give you an opportunity to put your talents
to better use inthe war effort than you
have been able to do thus far. The job
that lies ahead of us is tremendous.
I am anxious to see the script on the
opening broadcast.
Sincerely,
Mr. Orson Welles
427 North Canon Street
Beverly Hills
Hollywood, California
FSt]f
81
May 16, 1944
Dear Bob:
I want to thank you for the excellent job
you did for us in connection with the Bond program.
The energy and effort which you expended on this
job, and your genuine interest in it have shown
fine results.
I have enjoyed having you here, and I am
sorry we had to terminate the fine work which you
had started because of your Army obligations.
Sincerely,
Pfc. George R. Carley
c/o Captain Russell Stone
205 East 42nd Street
New York, New York
FS:mlf
82
copy of this letter went to Carley
83
May 16, 1944
My dear General Somervell:
Now that Pfe. George R. Carley has returned
to his Army duties, I want to thank you for making
him available to us. He was able to do an out-
standing piece of work, and he was given every
cooperation by the Army in getting across to the
troops the information about America's War Loan
effort.
During the course of his stay, he was able,
with the cooperation of the officers put at his
disposal, to develop a program of over eighty
projects. Some of these were suggestions from
the officers, and practically all of them were
carried out successfully and without difficulty.
We have a complete report of the work done
in case you, or any of your officers, should want
it for the record.
I should like to especially commend General
Byron whom you put in charge of this effort for
the effective way in which he corrdinated the work.
Pfc. Carley proved to be a very capable man,
and he is now with the Army's Morale Division in
New York, and will work on the Army's own Bond
promotion program.
Sincerely,
Lieut. General Brehon Somervell
Commanding
Army Service Forces
Pentagon Building
Arlington, Virginia
CC: Bob Carley
FStmlf
Regraded Unclassified
84
May 16, 1944
FROM:
SECRETARY MORGENTHAU
TO:
Mr. Gaston
Mr. Charles Bell
At the request of the President of the
United States, please proceed to prepare the necessary
papers for the appointment of Mr. Shivers as Collector
of Customs in Hawaii.
85
No
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE May 16, 1944
TO
Mrs. Klotz
FROM
Mr. Tickton
In accordance with your request for information on the heavy artillery
program, and particularly information on orders placed since January 1, I
checked with Colonel J. D. Witten who is primarily responsible for the War
Department statistics contained in the "Official Munitions Production"
report that the Secretary sees from time to time. Colonel Witten said
that the information was available only at the War Department, that it
was super-confidential, and that it could be obtained only by addressing
8. letter to General Somervell. I should appreciate your further instruc-
tions in this matter.
86
MAY 16 1944
My dear Mr. Ceshrans
Agreeable to the suggestion centained in your letter of
April 25, 1944, I have given further consideration to the matter
referred to therein; namely, the adjustment of salaries of foremen
of plate printers in the Bureau of Engraving and Printing.
At the outset let use say that it is my opinion that the report
of the Treasury Wage Beard, which recommended the disapproval of
the requests for increases filed by the various crafts last year,
and in which I consurred, was based upon & sincere effort, free of
prejudice, to maintain an equitable balance of salary and wage
rates as nearly as possible under present conditions. There can be
no argument against appropriate differentials for jobs of varying
responsibilities, and we in the Treasury recognise that fact. On
the other hand, however, there are obstacles which appear to be
insurmountable which stand in the my of establishing such differ-
entials. For example, the superintendents and the assistant
superintendents of all divisions are paid on a per annua basis in
accerdance with grades allocated to these positions by the Civil
Service Commission. In the Plate Printing Division, the position
of superintendent is in Grade CAF-13, with a basic salary range of
$5600 to $6400. The position of assistant superintendent is in
Grade CAF-11, with a basic salary range of $3800 to $4600. The
occupants of these positions have supervision over approximately
2700 employees. The basic salary of foremen in the Plate Printing
Division is $3400 (now paid on a per diem basis), with supervision
over only ninety to one hundred employees.
In the Construction and Maintenance Division, employing
machinists, electricians, carpenters, painters, plumbers, brick-
layers, etc., and in which the duties are varied, the position of
superintendent is is Grade CAF-12, with a basic salary range of
$4600 to 85400. The position of assistant superintendent is in
Grade CAF-10, with a basic salary range of 83500 to $4100. The
basic annual salary of foremen in this division is $3250 (now paid
on a per diem basis).
In the Surface Printing Division, where also a large group of
craftemen is employed, a similar situation exists. The position
of superintendent is in Grade CAF-19, with & basic salary range of
Regraded Unclassified
87
Regraded Inclassified
page 2 - Memorable John do Cochran
$5600 to $6400. One assistant superintendent is in Grade GAF-11,
the basic salary ranging from 83800 to 84600, and the other is in
Grade GAF-10, with a basic salary range of 83500 to $4100. The
basic answal salaries of formen in this division are 83250 and
$3350 (now paid on a per diem basis).
Appeals for higher grades for assistant superintendents have
been denied by the Civil Service Comission. The grades established
for these positions by the Commission are, therefore, considered
standards in regulating the basie salaries for foremen under their
supervision.
with & desire to increase the earing power of foremen through
paying them for any overtine they may be required to work, and at
the same time to avoid establishing a salary rate for foremen that
would equal or enceed that paid their imediate supervisors, the
Department, after careful consideration, converted the annual rates
of foremen from & par annum to a per diem basis. As the result of
the Executive Order which inaugurated a six-day wook, foremen as
well as all other employees enjoy a substantial increase in caro-
ings. The 500 hours of overtime referred to in your letter are
largely made up of the sixth working day which all employees in the
Bureau have been required to work in order to earn their overtime pay.
The relationship between the amount paid foremen of plate print-
ing, and that earned by the sen they supervise, is unique in the
Bureau, but in private industry it is not unocesson to find piece
rate workers who make more than their feremen. Ad; previously pointed
out, nearly all of the plate printers are paid piece rates. For
example, during the fiscal year 1919, the plate printing foremen
were paid $2200 a year, or an equivalent of $7.03 a day, while
rotary press plate printers received $8.00 a day, average piece work
plate printers received 87.69 a day, and some plate printers during
the same year earned as high as $11.35 a day. A comparable differ-
ential has continued through the years. For the calendar year 1943,
the superintendent of the Plate Printing Division received $6100.
The assistant superintemient would have received 84424, if the
position had been filled the entire year. The formen of plate
printing during the same year carned from 84418 to $5582. Plate
printers under the supervision of these efficials during the same
year earned from 84661 to $6600.
On September 15, 1943, the Washington Plate Printers Union,
Local No. 2, potitioned the Department for an increase in the
salaries of their foremen, M wall as similar increases for all
plate printers. Former of the Construction and Maintenance
Division, and of the Surface Printing Division have on several
occasions also requested increases up to 84000 per annu.
88
Page 3 - Honorable John J. Cochran
Any consideration in the adjustment of salaries of plate
printing foremen would necessarily involve consideration of
adjustments for the foremen of all the trades, with consequent
consideration of all trade rates for journsymen.
The facts presented herein are given you in support of our
earlier decisions on this matter. However, in order to remove any
doubt from your mind as well as from the minds of other interested
parties that this matter is receiving further impartial consider-
ation, I am recrganizing the Treasury Wage Board. No member of
the Bureau staff will be a member of the new Board.
May I assure you that the study which will be made by the
new Board will have my close personal attention.
Very truly yours,
(Wigned) H. Morgenthau, Jr.
Secretary of the Treasury
Henorable John J. Cochran
House of Representatives
Washington, D. c.
ANHall/cla/mb
3/5/44
Regraded Unclassified
89
MAY 1 1944
My dear Mr. Cochran:
This will acknowledge receipt of your letter of
April 25, 1944, relative to the adjustment of the
salaries of foremen of plate printers in the Bureau of
Engraving and Printing.
The matters presented by you will be given careful
consideration, and as soon as a decision is reached you
will be fully informed.
Very truly yours,
(Signed) II. Morgenthau, Jr
Secretary of the Treasury.
Monorable John s. Cochren,
House of Representatives,
Washington, D. c.
JAJ:mbije
OHN J.
COMMITTEES
(3ml
Dues
CHAMMAN, COMMITTEE ON ACCOUNTS
EXPENDITURES - THE EXECUTIVE DEPART-
MENTS
CONGRESS OF THE UNITED STATES
Comme, WEIGHTS, AND MEASURES
SELECT COMMITTEE ON CONSERVATION OF
WILDLIFE RESOURCES
HOUSE OF REPRESENTATIVES
MIGRATORY Bino CONSERVATION
Commission
WASHINGTON, D.C.
April 25, 1944
PERSON
ATTENTION
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
My dear Mr. Secretary:
I have received a letter dated April 19 and signed by
Honorable Charles S. Bell in answer to my letter to you in which
I urged the adjusting of the salaries of foremen, plate printers,
and 80 forth in the Bureau of Engraving and Printing so this group
would receive the same benefits that are paid foremen at the
Government Printing Office.
It is true that the foremen are now paid on a per diem
basis and receive time and a half for all hours worked in excess
of forty, and I assume, it is likewise true that at times the
salary more than equals the pay of employees of the Printing
Office. This is due, however, to this overtime work.
I do not want to be critical at all but it seems to me
that I am warranted in appealing to you to have this matter re-
considered. First let me say it is my understanding that the
group that considered the request of the foremen was composed
of a Mr. Slindee, Mr. Hall, the Director of the Bureau of En-
graving and Printing, and Mr. Wilson, Chief of the Appointment
Division. It is also true that Mr. Wilson has been critically
111 for quite a time and had little opportunity to hear this case.
I talk to Mr. Wilson about the case and from the conversation
I
that he was inclined to side with the foremen, or at least
alt very sympathetic. Here we find a situation where the
D
tor of the Bureau that is involved in a controversy is sitting
committee to render a decision in connection with that contro-
I do not think that is sound business judgment.
The same principle involved in this controversy existed
inection with certain officials of the Fire Department in
strict of Columbia. Their salary was less than the salary
icials of the folice Department of equal rank. Only yester-
ie House completed action on Senate Bill 1757 equalizing
laries of officers and members of the Police Force and
re Department.
Regraded Unclassified
- 2 - -
On June 1, 1928, Mr. George Carter, who was then the
Publ Printer, advanced the rate paid foremen of these craftsmen
to 3600 a year, leaving the foremen of the Bureau of Engraving
and Printing hundreds of dollars behind, and as was to be ex-
pected, the Bureau foremen made a request of Mr. Hall for
equalization. While he has maintained the same pay status for
the tradesmen all these years, he has denied any equal compensa-
tion for the foremen. If you were one of them, can you say you
would have been contented with Mr. Hall's decision?
Then, September 15, 1941, the present Public Printer in-
creased these same positions to $4000 basic salary, and this was
with the consent of the Joint Committee on Printing of Congress.
The foremen requested Mr. Hall for consideration and he
refused.
The foremen in the Bureau of Engraving and Printing were
placed on a per diem basis August 1, 1942 without a hearing.
They wanted a settlement of the basic pay problem and not the
overtime. As I understand it, they did not want their status
changed.
It is true that the foremen's compensation in some cases
amounted to over $4500 but they were required to work over 500
hours overtime to get it.
The purpose of this letter is to urge that further con-
sideration be given to the matter and that a new committee be
appointed and that neither Mr. Hall nor any of the foremen be
members but that both sides have a right to appear before the
Ce ittee and state their case. I cannot conceive but this is
If you do not desire to do that, then appoint some offi-
02 to reconsider the matter, let the foremen choose a member,
a then let the two of them choose a third.
John Sincerely g yours, bocher
Regraded Unclassified
92
VICTORY
TREASURY DEPARTMENT
BUY
VALUED
-
PROCUREMENT DIVISION
WASHINGTON 25
CE OF THE DIRECTOR
SECRET
May 16, 1944
M
MEMORANDUM TO THE S ECRETARY:
There is submitted herewith the weekly
report of Lend-Lease purchases.
A requirement for completing a 1,500 barrel
a day refining unit for China has been received.
This requirement comprises instruments, pumps,
piping, valves and alloy tubes. It is necessary
that this equipment be flown to its destination.
Approximately 30 tons are involved and no package
can exceed 2,000 pounds. Delivery from this
country is required in June, 1944.
your Clifton E. Mack
Director of Procurement
LEND-LEASE
TREASURY DEPARTMENT, PROCUREMENT DIVISION
STATEMENT OF ALLOCATIONS, OBLIGATIONS (PURCHASES) AND
DELIVERIES TO FOREIGN GOVERNMENTS AT U. S. PORTS
AS OF MAY 10, 1944
(In Millions of Dollars)
Administrative
Miscellaneous &
Total
U.K.
Russia
China
Expenses
Undistributed
Allocations
$4740.1
$2294.7
$1877.3
$133.9
$12.6
$421.6
(4739.9)
(2294.5)
(1877.3)
(133.9)
(12.6)
(421.6)
Purchase Authoriza-
$3773.8
$1927.7
$1483.1
$ 83.9
-
$279.1
tions (Requisitions)
(3764.4)
(1914.2)
(1485.3)
(84.4)
-
(280.5)
Requisitions Cleared
$3685.7
$1896.8
$1456.8
$ 62.2
-
$269.9
for Purchase
(3671.5)
(1885.9)
(1452.3)
(61.3)
-
(272.0)
Obligations
$3577.4
$1877.2
$1419.9
$ 61.1
$11.6
$207.6
(Purchases)
(3558.1)
(1867.9)
(1412.9)
(60.9)
(11.5)
(204.9)
Deliveries to Foreign
$2023.1
$1274.5
$ 685.4
$ 23.1
-
$ 40.2
Governments at U. S.
(2007.4)
(1267.2)
(678.3)
(23.1)
-
(38.8)
Ports*
*Deliveries to foreign governments at U. S. Ports do not include the tonnage that
is either in storage, "in-transit" storage, or in the port area for which actual
receipts have not been received from the foreign governments.
Note: Figures in parentheses are those shown on report of May 3, 1944.
SECRET
93
Regraded Unclass
94
May 16, 1944
FROM:
SECRETARY MORGENTHAU
TO:
DR. WHITE
I have signed your letter to the President
about the rates of exchange of the Netherlands, Belgium
and Norway and the French Comite'. I am confident
that he isn't going to be pleased with these rates
because all of them go out to three decimal places.
It certainly is too bad that you could not make the
units of foreign currency in round figures.
95
MAY 16 1944
My dear Mr. President:
I wish to inform you that after consultations with the
British Treasury the rates of exchange proposed by the Govern-
ments of Netherlands, Belgium and Norway and the French Comite
and accepted by the United States are as follows:
Units of foreign
Units of foreign
U. S. cents per
currency por one
currency per one
unit of foreign
British pound
U. S. dollar
currency
French france
200
49.566
2.018
Belgian france
176.625
43.773
2.285
Netherlands guilder
10.691
2.649
37.742
Norwegian kroner
20
4.957
20.175
(Dollar-pound-sterling erossrate at $4.085 to 1 ±)
In addition to the above, the rate agreed upon between the
United States Treasury and the British Treasury for the Danish
krener was 24 to the British pound or 16.818 U. S. cents per
kroner.
The above rates have been accepted by the United States
after consultation with State Department and the Army.
You may be interested to know that the above rates repre-
sent depresiation from their pre-war rates of the following
approximate persentages:
French franc
ao persent
Belgian frans
38
Netherlands guilder
al
Nerwegian kroner
18
Danish krener
28
Regraded Unclassified
96
- 2 -
It is our view that the rates for France, Belgium,
Netherlands and Norway are all on the high side and that it
will be very difficult for them to maintain those rates after
commercial trade and financial transactions are resumed.
Nonetheless, we did not deem it expedient nor wise to object
to the rates selected by these governments and attempt to
impose a lower rate. Tie have, however, received assurance
from W. Mendes-France, Commissaire of Finance, who has just
arrived from Algiers to discuss the matter with us, that it
is the intention of the Comite that the rate of exchange
between the U. S. dollar and the French frano used for the
computation in any over-all financial settlement between
France and the United States shall be equitably adjusted in
the light of the rate of exchange finally established after
the liberation of continental France. We contemplate trying
to make similar arrangements with the Dutch, Belgian and
Norwegian Governments.
There are a number of exchange rates which have not yet
been fixed. These include the currencies of Germany, Austria,
Japan and Dutch East Indies. Discussions are now going forward
with a view to fixing these rates. The British are being con-
sulted in all of the above rates and the U.S.S.R. is being con-
sulted in the matter of the German currency.
Faithfully yours,
(Rigned) III. Morgenthau, Jr.
Secretary of the Treasury
The President,
The white House.
HDW:AFL/jm 5/15/44
5/16/94
97
THE SECRETARY OF THE TREASURY
not
WASHINGTON
MEMORANDUM FOR THE PRESIDENT
U. S. Extension of $10 Billion Reconstruction
Credits to the U.S.S.R.
The time seems propitious for initiating negotiations
looking toward a financial agreement whereby the U. S. would
extend by Congressional action a credit of $10 billion to the
U.S.S.R. for the purchase of industrial and agricultural
products over a five-year period, in return for (a) full repay-
ment with interest over 30 years or so--repayment to be chiefly
in form of raw materials, and (b) guarantee to the United States
during the period of repayment of an annual supply of needed
strategic raw materials.
1. This dramatic step could have the following important
consequences:
Offer concrete assurance to American industry
and labor that the post-war years will not usher
in another era of unemployment and stagnant
business conditions.
Give the Congress and the American people confi-
dence that this country has a guaranteed source
of supply for important strategic raw materials
to supplement our rapidly dwindling domestic
resources.
Open up to this country a new and expanding
market in the post-war period for our tremendous
productive facilities--an export market offering
the most assurance of repayment capacity and the
least risk of interfering with our export trade
with other countries.
Give you a powerful lever for use in the coming
world negotiations vis-a-vis both Russia and the
OBVICTORY
other United Nations. Moreover, it is not an ex-
BUY
aggeration to say that the consummation of such a
UNITED
STATES
WAR
financial agreement would be one of the most im-
BONDS
ass
portant non-military steps that could be taken at
STAMPS
this time to shape the pattern of post-war inter-
national economic relations.
98
- 2 -
The present negotiations with the U.S.S.R. for winding up
Lend-Lease deliveries under a Fourth Protocol are an excellent
provisional measure but they obviously do not come to grips
with the problem of a fundamental long-term program and are
insignificant in terms of the objectives outlined above.
2. Our dwindling supply of important strategic materials
is not generally recognized. The following table prepared
from some recent confidential reports for the Under Secretary
of Interior on our raw material resources discloses the rapidly
increasing dependence of the United States on foreign sources
of supply.
Reserve Domestic Supplies
On Basis of our
On Basis of our
1938 Domestic
Current Consumption
Consumption
1943
Petroleum
16 years supply
13 years supply
9
=
the
Manganese
3
If
Ti
"
"
3
If
"
Tungsten
23
Zinc
17
:
is
8
u
"
Lead
7
=
"
6
=
If
Chrome
No record
Less than 1 year's supply
Mercury
3 years supply
The Soviet Union represents an extensive reservoir of
these strategic materials. Rapid economic reconstruction and
expanded resource development in Russia made possible by the
U.S. exports of capital equipment would serve to enhance the
number and volume of these materials which the Soviet Union
could make available to the U.S.
3. The Soviet Union has a superior repayment potential
compared with other foreign buyers of American products. The
financial record of the U.S.S.R., coupled with her enormous
natural resources and gold production, renders her a good credit
risk. In contrast with many other countries, she does not have
any large foreign indebtedness which would exert prior claim on
her export surplus.
99
- 3 -
Since the U.S.S.R. has a completely State-controlled
economy, the volume and character of its imports and exports
are largely determined by planning decisions covering the
domestic allocation of manpower, materials and equipment. It
will be possible for the U.S. to influence the U.S.S.R. pat-
tern of foreign trade to gear in with our own foreign trade
needs.
4. Since the U.S.S.R. will, in the absence of some such
arrangement as suggested above, be compelled to direct the
bulk of her capital equipment purchases elsewhere, it is
important that a secure commitment be obtained at this time
so that the reconversion of our heavy industries which is
presently being planned may proceed on the basis of assured
demand. This is particularly urgent since other countries
are extremely eager to negotiate trade arrangements to secure
the raw materials from the U.S.S.R. and to cultivate the
Russian market for their products.
5. In view of the magnitude and financial importance
of this proposal I would suggest for your consideration that
I be sent to Moscow as your personal representative to fully
explore these possibilities with the Soviet Government. I
would, of course, wish to take a small staff of competent
advisers including some outstanding businessmen interested
in the Russian market.
It was my thought that on the basis of an exploratory
visit this summer, I would submit a report to you which would
then be available for your use whenever you deemed the time
propitious to raise the question with Congress.
100
AIRGRAM
FROM LA PAZ, BOLIVIA
DATED MAY 16, 1944
REC'D: May 22, 3 pm
CONFIRMPTIAL
Secretary of State,
Washington.
4=212, May 16, 1944, 5&Q0 Pollo
Reference Department's airgram 4-161, May 1, 1944,
10:45 a.m. concerning efforts to remove from Axis-
deminated territory Jews with Belivian identification
documents.
I mentioned this miter unefficially to the Minister
of Foreign Affairs of the Belivian Provisional Governo
ment and be said that be 414 net recall having heard of
any bene fide B elivian Jews, either naturalised or
native-bern, who are new in Axis=dominated territory,
The Foreign Minister, Sr. Marique Baldiviese, asked no
if I would find out as such as pessible concerning the
identity of such Jews. Accordingly. it would be appre-
ciated if the Department could supply this effice with
available information en the subject.
WOODWARD
If fave
Regraded Unclassified
101
NEM-381
This telegram must be
Santiago
paraphrased before being
dommunicated to anyone
Dated
May 16, 1944
other than a Government
agency. (BR)
Rec'd 6:41 p.m.
Secretary of State,
Washington.
851, May 16, 5 p.m.
Foreign Office has just advised that consideration
is being given to the suggestion that the Chilean Govern-
ment admit a specific number of refugees, as referred
to in the Department's confidential circular airgram
of April 15, 7 p.m., and will submit a definite reply
as soon as the necessary study can be made. Department
will be informed as soon as a definite reply is received.
BOWERS
HTM
Regraded Unclassified
102
PARAPHRASE OF TELEGRAM RECEIVED
FROM: American Embassy, San Jose
TO:
Secretary of State, Washington
DATED: May 16, 1944
NUMBER: 304
SECRET
Formal consent to upholding validity of all Costa Rican pass-
ports held by P rsons whose lives may otherwise be in danger has been
given by the Costa Rican Government. On the understanding that they
do not come to Costa Rica, such persons may be declared eligible for
exchange.
In regard to Jules Grunstein and wife (see my cable of May
13, no. 299) no special mention has been made and, although they are
not eligible for entry into the country until written assurances are
received, they should be considered in the category of persons holding
valid Costa Rican passports.
The original note will be transmitted by despatch to follow.
The foregoing message is in reference to Embassy's despatch
1279, April 17 and Department's secret airgrams dated May 1 and 10.
DESPORTES
Regraded Unclassified
103
EMBASSY OF THE
UNITED STATES OF AMERICA
No. 1400
San Jose, Costa Rica,
May 16, 1944.
Subject: Costa Rica censents to uphold validity of
all Costa Rican passports held by persons
whose lives might otherwise be in danger.
STRICTLY CONFIDENTIAL
The Honorable
The Secretary of State,
Washington, D. C.
Sir:
With reference to my telegram no. 304 of May 16,
4 p.m., concerning the precarious situation of a
number of persons holding passports issued in the
name of the Costa Rican Government and the Costa Rican
Government's agreement to uphold the validity of such
passports, I have the honor to enclose the original
7/
note, No. 948-B of May 15, 1944, from the Foreign Of-
2/ fice, together with the translation of that note, con-
firming the verbal assurance which had previously been
given to me by then Foreign Minister Echandi.
While the matter was taken up orally with the For-
eign Minister, he requested that a written note present-
ing the views of the United States Government be sent
him for the archives. The enclosed note is his reply.
The attached note does not state specifically that
the persons holding these Costa Rican passports may be
considered eligible as Costa Rican citizens for inclusion
in the exchange of German and Costa Rican nationals, but
I have received verbal assurances from the Foreign Office
that the language of the note implies such an inclusion
since the Costa Rican Government cannot deny citizenship
to the holders of such passporte at the same time they
uphold the validity of the passports. However, while
the note in question also omits specific mention of the
fact that the Costa Rican Government would not welcome
the holders of such passports to Costa Rican territory,
this connotation is likewise brought out in the second
sentence of the first paragraph of the Foreign Minister's
note where he refers to the fact that the United States
Government will assume the responsibility for all the
arrangements necessary for the transportation of such
persons to non-Costa Pican territories.
Regraded Unclassified
104
-2-
The Foreign Winister appears to be of the opinion
that his note No. 948-B gives the Costa Rican Government's
consent to all the recommendations set forth in the
Department's secret airgrams of March 31, April 11 and
May 1 and 10, and unless the Department thinks it advis-
able or necessary I shall not approach him again to
formulate a demand addressed to the German Government,
through the protecting power, that the lives of all per-
sons holding Costa Rican passports be safeguarded and
that they be given all rights, privileges and immunities
accorded to civilian internees of enemy nationality to
which the Geneva Conferences regarding the treatment of
prisoners of war is applied by analogy, since the United
States Government is the channel of communication for
the Costa Rican Government to the Swiss Government which
is protecting Costa Rican interests.
Respectfully yours,
Fay Allen Des Portes
Enclosures:
(1) Original note dated May 15, 1944
from Costa Rican Minister for
Foreign Affairs;
(2) Translation of note.
SRT-mm
Regraded Unclassified
105
Enclosure No. 2 to despatch No. 1400
of May 16, 1944 from the
Embassy at San Jose, C.R.
Republic of Costa Rica
Ministry of Foreign Relations
948-B
San Jose, May 15, 1944.
Mr. Ambassador:
I have the honor to inform Your Excellency of
the receipt of your very courteous, strictly confiden-
tial note No. 251 of the 15th instant, by which you
request the opinion of the Government of Costa Rica
with respect to the possibility of preserving the
legal value of various passports possessed by Europeans,
usually Poles and Jews, in connection with which there
might be some doubt with respect to the legality of
their expedition, in order to protect their holders
against acts of cruelty of the German authorities.
Your Excellency adds that your Government will assume
the responsibility for all the arrangements necessary
for the transportation to non-Costa Rican territories
of the holders of such passports by virtue of analogous
rights granted to them by the Geneva Convention with
regard to Prisoners of War.
I an very pleased to communicate to Your Excellency
the agreement of my Government with the procedure
indicated in your above cited note, since, and until
there has been effective proof of the reasons for the
invelidity of the passports under reference, they are
to be held valid by reason of their having been issued
by Costa Rican consular officials, particularly if a
humane duty is thereby fulfilled.
I take this opportunity to reiterate to Your
Excellency the sentiments of my highest and most
distinguished consideration.
Julio Acosta
His Excellency
Fay A. Des Portes
Ambassador Extraordinary and
Plenipotentiary of the United States.
Translated by: me
Checked by:
srt
Regraded Unclassified
106
PHOPOSED CABLE TO AMERICAN EMBASSY, CUIDAD TRUJILLO
If Foreign Office has not instructed its Mission,
Bern, to notify Swiss Government of Dominicen willing-
ness accept children as reported your 219, May 4, please
request it to do 80s Inform Department.
Please e express this Government's sincere appre-
citation Dominican Government's generous offer.
May 16, 1944
2:55 p.m.
MStandishilcm 5-12-44
Regraded Unclassified
107
CABLE TO AMERICAN EMBASSY, LONDON, ENGLAND
The War Befuges Beard requests that you deliver the
following mesage to Mr. Ernest Frischer, member of the
Crechoslovak National Council, 100 Oaklfood Court, London
Wel4:
QUOTE Are anxieus to know how many Terezin inmates
receive regularly food parcels. Understand 6000 people
receive two parcels monthly from Lisbon. Ignore number
of people provided from Switzerland and Istembul. Also
what frequency. Would be grateful for accurate survey
covering individual collective dispayches. Also can
your lists. World Jewish Congress Leon Kubowitski UNQUOTE
ceraing Birkensu. Also number individual interness on
May 16, 1944
5:10 p.m.
BAksint jp
5/12/44
108
870-469
PLAIN
Helsinki
Regraded Unclassit
Dated May 16, 1944
Rec'd. 8:45 P.B.
Secretary of State
Washington
399. 16th
FOR WAR REFUGES BOARD
Newspaper UUSI SUOMI reports from Steckholm that
after negotiations between American, Swedish and Finnish
Foreign Offices agreement reached that 106 Jewish
refugees arriving in Finland from Central Europe who
had remained there on Mansen passports will receive visas
for Sweden. The greater part of them has already arrived
there. This is in consequence of the extensive American
plan to find and exile for Jewish refugees in neutral
countries "till they can be sent to USA. A committee
in Helsinki attends to their transfer to Seesen,
Reppeated to Stockholm as my 103.
On May 15th HUFFUDBLADET, principal Swedish lan-
guage paper, reports that Stiller prominent Heleingfors
Jettsh figure has stated in an interview to DAGINS
STENTER that group of 110 Jewish refugees which in
1938 came to Finalda from Germany is now going to
Sweden. According to Mr. Stiller all these refugees
intend after war to 60 to USA or other transocean
countries.
Irrespective other motives naturally more practicad
these refugees await travelling facilities in neutral
Sweden than belligerent Finland Director Stiller says.
Treatment of the Jews in Findand in itself gives no cause
for verry. After the Russian time the Jews have drays
been treated as fully equal citizens both under the laws
and in attitude of people. Director Stiller finally
also says that Fialand is only one of the countries
fighting with Germany against Russia which has introduced
no anti-Jevish laws.
Minister of Interier Bhrnrooth has stated that no
obstacle has been P ut in way of refugee's permanent
stay in country. Finnish authorities been completely
passive in matter. 4a refugees were received so we
have been prepared failitate their departure.
Great number of above already arrived Stockholm
GULLION
KIM
KEV
109
CONFIDENTIAL
FROM
Regraded Unclassifie
LONDON
May 16, 1944
Reod: May 23 8 A.M.
Secretary of State,
Washington, D. 0.
A-631, May 16
FOR DEPARTMENT AND FEA AND WAR HEFUCEE BOARD
Reference Embassy's 3481, April 28.
1. The fellowing is the text of a letter from Mr.
E.H.Bliss of the lassy Transactions Department of M.E.V.
to Mr. Riefler, dated May 11, concerning the implements-
tion of the licenses granted at the instance of the War
Refuges Beard to the World Jewish Congress and the Joint
Distribution Committee:
"At a meeting last week of the Relief Sub-Committee
ve discussed with Mise Camp a telegram from H.M. Minister,
Berne asking for instructions with regard to the program
of the Joint Relief Missions.
"The telegram raised two questions on which our
Mission asked for guidance. One, with which I as not now
cencerned, related to the class of goods whose export might
be permitted. The other concerned the implementation of
the terms of the license given by the U.S. Treasury for
the remittance of the funds to be used for these purchases.
This license, as understeed in Ovitzerland, allowed -
limited discretion to purchase goods in enemy territories
under the relief programs.
. This appears to be the same as, or similar to, the
license referred to is the third paragraph of Lord Dregheda's
letter to you of 8th April concerning the question of ⑉
ordination in the work of the War Refuges Beard. (Forvard-
ed to the Department as enclesure to the Rubassy's despatch
No. 15 a. April 17, 1944). It was pointed out there
that the terms of this license were centrary to the policy
previously agreed between u. The I.R.C.C. themselves
have also raised this point, on the grounds that the pre-
posed use of the fulls was centrary to the joint statement,
handed to them by our Missions last November, on the sub-
jest of transmission of funds to enemy territory. We asked
that in reply they should be informed that the British
Bleckade Authorities had net yet agreed to such a
deregation free their forger policy.
"We have since learned that the terms of the licenses
granted, with the support of the War Befuges Beard, for
relief-resous operations, lay down that the funds may be
used for the acquisition of easay currencies, either (a)
purchase
London A-621
-3-
110
by purchase free residents in Switserland who have obtain-
ed the currency in an unobjectionable manner; the currency
to be used for payments in eccupied countries to support
would=be refugees or to facilitate their escape, or (b)
by leans from residents in the occupied country concerned,
against a premise to pay dollars after the war. The
actual expenditure of dellars or other hard eurrencies in
ecoupied countries is, we understand, only to be permitted
when 11 is strictly necessary in order to secure assistance
in effecting actual rescues.
"It seems from this that the actual expenditure of
hard currency in enemy eccupied territories on goods for
internal relif purposes, is net envisaged by the terms of
the licenses. It is desirable that we should clear up
this point and should be in a positien to give clear in-
structions to our Missions, and to the International Bed
Cross Committee. We agree that easay eurrencies obtained
by either of the methods (a) or (b) above, may be used for
purchases of goods in the enemy countries concerned for the
relief of would-be refugees " leng as they remain there.
Ve see strong objection, however, to the expenditure of
dellars or Swiss france directly in enemy territory on goods
for this purpose. We believe that the view of the U. S.
Treasury coincides with eurs on this point.
"We are ausious to secure the fullest ce-erdinatick
both here and between our Missions in thefield on this
question of reseue and relief programmes. We should,
therefore, be glad to know whether you censider our Missions
in Berne instructed that deblars or ether hard currency
should net to used to cover the purchase of relief supplies
in any territory."
END would appreciate confirmation of the specific point
raised by KIM in this letter, 1100 that the expenditure of
hard currencies in occupied countries is authorised only
when it is strictly necessary to secure assistance in effect-
ing actual receive and that it is not authorised for the
purchase of relief supplise in easmy territory. Such
"relief action" should be financed by mothods (a) or (b)
as net forth in paragraph 4 of the letter quoted.
2. IND would also appreciate being informed of ally
general instructions sent Bera in connection with the pre-
cedure be be fellowed in the future comeerning purchases
made in Svitzerland at the instance of the No. IF Refugee
Beard. In this commestion, please ... paragraphs S and
4 of the Embassy's telegram under reference.
BUCKNELL
MGMH
Hestographed by: JH
Regraded Unclassified
111
CABLE TO AMERICAN CONSULATE GENERAL, JERUSALEM
The War Refugee Board requests that you deliver
the following message to Bhiahu Debkin, Jewish Agency,
Jerusalent
QUOTE Acknowledge receipt your cable concerning
Wladyslaw Nathanson. Glad to learn you now have special
lists France, Belgium also. Please cable through American
Consulate and War Refugee Board full details on operation
your scheme concerning occupied countries. How people
informed, what risks involved, how certificates delivered.
Especially what is your scheme regarding Hungary with same
details. World Jewish Congress, Leon Kubowitski UNQUOTE
May 16, 1944
5110 p.m.
BAksint jp 5/13/44
Regraded
112
PARAPHRASE OF TELEGRAM RECIEVED
FROM:
American Consulate, Casablanca (via War)
TO:
Secretary of State, Washington
DATED:
May 16, 1944
NUMBER:
138
SECRET
Following is no. 2 for Lehman and Crowley from Beckelman.
This has been repeated to Algiers for Ferguson, FEA.
Now well settled at camp are the 38 refugees who
arrived a few days ago and security check practically com-
pleted without incident. It is urgent that I know the
action taken on my message of May 10, no. 132, as in a few
days a boat is ready to proceed to Spain to embark main
refugee group of approximately 800. If it is not possible to
to provide Army guard might possibly arrange external
guard reliable French civilians at cost of about $3,000
per month provided American Army issued fire arms, which
doubtful.
Accountant Kose arrived unannounced, expects to pro-
ceed to Algiers, for your information.
RUSSELL
Regraded Unclassified
113
PROPOSED CABLE TO AMERICAN EMBASSY, NICARAGUA
Please express this Government's sincere appre-
ciation Nicaraguan action reported your 271, May 5.
May 16, 1944
2:55 p.m.
MStandish:lom 5/13/44
Regraded Unclassified
114
EMBASSY OF THE
UNITED STATES OF AMERICA
No. 2095
Asuncion, Paraguay, May 16, 1944
Subject: Conditions surrounding the immigration to Paraguay
of persecuted minorities from Europe.
STRICTLY CONFIDENTIAL
The Honorable
The Secretary of State,
Washington.
Sir:
I have the honor to refer to the Department's circular air-
gram of January 26, 1944 with regard to the immediate rescue and
relief of the Jews of Europe and other victims of enemy persecu-
tion. Reference is also made to Embassy's airgram No. A-85 of
March 11, 9 a.m. Pursuant to this Embassy's initial reply con-
tained in airgram No. A-45 dated February 12, 8:15 a.m., there
follows an outline of some of the factors affecting the immigra-
tion of Jews to Paraguay.
Anti-Semitism has flared up periodically in the government
press under the Morinigo Administration, and it has often been
interpreted as a reflection at first of Nazi ideology and more
recently of Argentine anti-Semitism. Nevertheless, a study of
Embassy files for the past five years reveals that opposition to
Jewish immigration was active under previous administrations.
Reference is made to Legation despatches
Regraded Unclassified
115
- 2 -
Nos. 743, December 8,
762, December 29, 1938;
783, January 20,
785, January 26,
799, March 9,
868, June 1, 1939;
32, May 26, 1941;
347, January 7, 1942.
As early as 1936, under the Franco Administration, a decree
was passed prohibiting the immigration of Jews regardless of
nationality. This still-outstanding decree, according to con-
temporary accounts of the circumstances surrounding it, did not
so much reflect anti-Semitism on the part of the Franco Government
as it did a drastic move to forestall a hegira of persecuted Jews
to Paraguay arranged by certain unscrupulous individuals who were
seeking exclusively their own enrichment by swindling the Jews
in question.
Decree 12,277 of March 6, 1939 (transmitted with despatch
No. 799, cited) specifically excluded Jews from the provisions
authorizing the immigration of Czechoslovakian agriculturists.
During 1938 and '39 there was considerable anti-Semitic agitation
in the Paraguayan Chamber of Deputies, and a bill was introduced
to prohibit all Semitic immigration (see despatch No. 785 cited),
notwithstanding the existence of the Franco decree of 1936. It
appears that the emphasis on anti-Semitic restrictions at that time
was in part the result of the exposure of large numbers of illegal
visas issued to Jews in Europe by unscrupulous Paraguayan consular
officers who lined their pockets through this traffic in visas.
The record discloses that through our own government a substantial
portion of these irregular visas were disclosed, and even during
the past three years this Embassy has brought to the attention of
the Foreign Office a number of similar cases with the result that
at least three Paraguayan consular officers have been dismissed.
Although the prohibition against the immigration of Jews into
Paraguay still remains legally in effect, until only a few months
ago Jews were being admitted to the country after having been sub-
jected to extortion by consular officers abroad and by the Immi-
gration Department here upon their arrival. Abuses were frequent
and newly-arrived immigrants were often stripped of any valuables
they still possessed after the voyage to Paraguay (see confidential
1943 Colonel Juan Lisboa was appointed Director of the Department
paragraphs of despatch No. 347 dated January 7, 1942). In December
Regraded Unclassified
116
- 3 -
of Lands and Colonization, which includes the Office of Immigration.
Colonel Lisboa was given this post by the President in order to
purge this department of the scandalous notoriety associated with
its name as the result of the nefarious activities of preceding
directors, notably Agusto FUSTER (brother of Secret Police Chief
Marcos FUSTER, and shady ex-employee of the German Legation).
Colonel Lisboa is living up. to the President's expectations and
is effecting thoroughgoing reforms and reorganization of his de-
partment.
Consequently, since December 1943 the administration of the
immigration laws has been fairly humane, just and regular. The
Director's personal sympathies are not only pro-Allied but sin-
cerely humanitarian toward the plight of persecuted minorities.
When a case comes to his attention involving the racial extraction
of inmates of German concentration camps or persons who have an
opportunity to escape the Nazi grip, he derives genuine satisfac-
tion in facilitating officially their immigration to Paraguay.
Although he is aware of the decree prohibiting Jewish immigration,
he bases his decisions on immigration applications entirely on
non-racial considerations, i.e. nationality, vocation and aptitude
for settlement in Paraguay.
Nevertheless, in accordance with standing immigration regu-
lations and traditional Paraguayan policies on this subject, an
effort is made to obtain & maximum number of agriculturists, with
a sprinkling of other vocations for which there is a local need.
Thus the practical application of the immigration laws disregards
racial discrimination and emphasizes rational and reasonable factors.
When queried by a member of my staff as to the possibilities
of annulling the 1936 Franco decree (in view of the incompatibility
of Paraguay's official assurances tending to aid the rescue of
Jews from Europe with a law forbidding Jewish immigration), the
Director stated that he favored the drafting of a new decree which
would unobtrusively leave the 1936 decree without effect by re-
stating immigration requirements in accordance with the new bases
on which they are being applied.
As a result of the Embassy's efforts to obtain definite in-
formation as to the number and kind of refugees that would be
accepted as colonists in Paraguay, the Department of Lands and
Colonization has been preparing a systematic study of all the fac-
tors affecting this problem. Maps have already been prepared for
half of eastern Paraguay showing lands that would be available for
Regraded Unclassified
117
- 4 -
colonization (some 500,000 hectares), including those tracts which
already have both foreign and native colonists. This work will
also cover the facilities which could be offered to immigrants,
including rudimentary housing, agricultural implements and farm
credits. This Embassy has placed the STICA (Coordinator's Food
Project) in touch with Colonel Lisboa so that the two organizations
may cooperate on this problem.
In the meantime, a Note from the Minister of Agriculture
transmitted through the Foreign Office has set forth the general
bases for Paraguay's rapidly forming Immigration Plan. (Reference
is made to Embassy's despatch No. 2093 of May 13, 1944). Point 2
of the same makes history by stating that Paraguay will not dis-
criminate against immigrants because of race, color or creed (with
the exception of the negro and yellow races). Although this
categoric statement of policy is as yet contained only in a Note
from a Minister, the latter has taken up the whole question in a
Cabinet meeting, and it is therefore a very encouraging turn to
the negotiations to bring immigrants here which have been dragged
out over a period of eight years.
Additional signs of the earnestness of Colonel Lisboa's ef-
forts to reorganize his Departamento and to shape plans for colo-
nization by immigrants during the post-war period are various
newspaper articles and radio speeches by Lisboa and the Secretary
of the Departamento, which have appeared during the past few weeks.
In each case an attempt has been made to restore the dignity and
self-respect of the Departamento, to explain the measures being
taken to reorganize it, and to point out the advantages and condi-
tions surrounding a new flow of immigrants to Paraguay.
Further reports of the progress of specific plans for the
resettlement of refugees in Paraguay will be transmitted as the
work develops.
Respectfully yours,
Wesley Prost
848
GDH/wsr
118
CABLE TO AMERICAN LEGATION, LISBON
The War Refugee Board requests that you deliver the
following message to Isaac Weissman, 179 Avenida da Liber-
dade, Lisbon, Portugal:
QUOTE We have complete list most distinguished
Hungarian rabbis. Are considering ask for them Mauritius
visas as for other rabbis in Nazi-occupied countries.
Would like you however to inform us by return mail how
the Mauritius scheme worked out; how many rabbis
benefited by it; where they now are; what is the attitude
of the Portuguese authorities in regard to granting transit
visas, etc. According to some, it would be safer to have
them provided with Palestine certificates. Expecting your
prompt advice and report. World Jewish Congress, Leon
Kubowitski UNQUOTE
THIS IS WRB LISBON CABLE NO. 25
May 16, 1944
5:10 p.m.
BAksin:jp 5/13/44
Regraded Unclassified
119
ORGINAL TRXT OF TELEGRAM SENT
FROM: Secretary of State, Washington
TO:
American Legation, Lisbon
DATED: May 16, 1944
NUMBERS 1379
CONFIDENTIAL
From War Refuges Board to Norweb
Please deliver the following message to Dr. Joseph Schwarts, 242 Rua
Aures, Lisbone from Moses 4. Leavitt of the American Jewish Joint
Distribution Committee:
"Arahein Stockholm advises 150 stateless refugees formerly
Finded now Sweden request $20,000 their care for one year. Please
inquire Mesaiska Feersamlingen and advise. Patrick Malin nov planning
arrive Casablanca about June first. Suggest you meet him there."
THIS IS VMI LISBON CABLE NO.A...22...
HULL
120
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
American Legation, Lisbon
TO:
Secretary of State, Washington
DATED:
May 16, 1944
NUMBER:
1477
CONFIDENTIAL
Following is WRB no. 38.
Department's no. 1365, WRB no. 23, is referred to
herewith.
It is difficult to press the Government of Portugal
further, at the moment, concerning Sephardics, claiming
Portuguese citizenship, now in Greece, If all registered
Jews are now in Theresienstadt, it would be difficult, if
not dangerous for Jews themselves if the Portuguese were
to intervene in behalf of unknown claimants to Portuguese
nationality who are now in hiding. Our efforts to obtain
assent repatriation in principle will be continued. It
might apply to claimants in Theresienstadt if granted.
NORWEB
Regraded Unclassified
121
MESSAGE TO AMBASSADOR HAYES, MADRID, FROM WAR REFUGEE BOARD
(BY COURIER)
Annexed is a copy of a communication received by the
World Jewish Congress, New York, from Isaac Weissman, its
representative in Portugal.
The Board would appreciate any comments or suggestions
you might make regarding the conversation between Ambassador
Franco and Mr. Weissman, reported in this communication.
In this connection, the Board would be grateful for
any information bearing upon Department's cable no. 1108
to Madrid of April 21.
BAksin:jp 5/16/44
Regraded Unclassified
122
COPY
WORLD JEWISH CONGRESS
Lisbon
Spanish Sephardi Jews in Greece
(see enclosed copy of cable from
Mr. c. Barlas).
Confidential
Note
on my meeting with D. Nicolau France, Spanish
Ambassador to Lisbon, on April 8th, 1944,
The Ambassador began by enquiring if the Jews in Athens are Spanish citizens or only
Spanish protected people (among the Sephardi Spanish Jews part are considered only 8.8
protected people owing to lack of certain administrative formalities which they did not
fulfill in time, and part are considered as regular Spanish citizens). He added that
he was asking this question merely from an informative point of view, since the answer
would have no influence on the action to be taken. I then showed the Ambassador the
cable in which mention is made of Jewish Spanish citizens and not of protegees.
D. Nicolau tried to explain that the world overestimates the so-called influence of
Spain on Germany, saying that Spanish relations with Germany are only friendly and
nothing more. On my remark that neither influence nor special friendship applied when
a country intervenes on behalf of its own citizens, the Ambassador answered that inter-
veri in would take place.
He then explained in friendly words that Spain is not only not anti-Semetic but on
the contrary, his brother, General Franco, is very interested in the Jewish question,
especially in the Sephardi Jews. He told me further that in spite of all endeavors by
the Germans Spain has introduced no anti-semitic laws and that his brother has always
avoided introducing measures which might involve difficulties for the Jews in Tanger,
where banking and commerce are, to a large extent, in their hands. At this, I ventured
to draw the attention of the Ambassador in clear terms to the difficulties which Sephardi
Jews of Spanish citizenship are enduring in Spain and all the occupied countries. I
also mentioned the fact that 450 Sephardi Spanish Jews who entered Spain some weeks ago
must leave that country before any more are allowed to enter. There are about 200 such
Jews on the Franco-Spanish border at Perpignan who are unable to obtain their Spanish
visas, although they are Spanish citizens, 80 long as the aforementioned 450 Jews are
still in Spain. I then went on to inform him of the 500 Spanish Jews at present interned
and who cannot obtain visas for Spain and are in no way protected by the Spanish Consu-
in the Camp of Drancy near Paris; about the many Jews (Spanish) living in hiding in Paris
lates in spite of their Spanish citizenship. I added that I surmised that these facts
were not of the knowledge of the high officials, and even less in the possession of the
Spanish ministers, otherwise and seeing what he had just told me, they would have pro-
ferred protection to their nationals.
Regraded Unclassified
123
Page 2
The Ambassador was visibly impressed by my remarks and assured me that his
Government is sincerely interested in helping all these unfortunate people. He
said he was grateful to us for turning the light on these events.
We finally came to the decision to deal in the first place with the 400 Spanish
Jews in Greece, mentioned in the cable, and as soon as this is achieved, D. Nicolau
France will request my presence again for the purpose of submitting our other claims.
With regard to the 400 Spanish Jews in Greece, the Ambassador promised me he
would immediately contact by telephone Count Jordana, Spanish Minister for Foreign
Affairs and he assured me again that steps will be taken without delay to obtain
from the Germans their release and permission to leave Greece.
I.W.
Lisbon, April 11th, 1944.
124
COPY of a cable received from Istanbul the 5th April 1944
ISTANBUL 5/4/44
WEISSMAN AVENIDA LIBERDAD LISBON
1982 ACCORDING RELIABLE INFORMATION 400 JEWS SPANISH CITIZENS LIVING IN
ATHENS SENT TO CONCENTRATION CAMP HAIDARI STOP NECESSARY INTERVENE THROUGH
SHAGRIRUT MADRID ASKING PROTECTION SPANISH GOVERNMENT STOP NEGOTIATING RE
POSSIBILITY ARRANGING TRANSPORTATION BY SWEDISH BOAT RUNNING FOR INTERNATIONAL
REDCROSS RELIEF STOP ON ARRIVAL HERE IMMIGRATION CERTIFICATES PALESTINE
ASSURED STOP ESSENTIAL PREVENT DEPORTATION TIMEBEING WIRE ACTION - BARLAS
May 24, 1944
2:25 p.m.
Regraded Unclassified
PARAPHRASE OF TELEGRAM SENT
125
FROM:
Secretary of State, Washington
TO:
American Embassy, Madrid
DATED:
May 16, 1944 10:00 p.m.
NUMBER:
1384
SECRET (NIACT)
Contrary to the recommendations of the United States Government and
the other American Republics associated with it, there are included, (a)
alien relatives of American citizens and (b) persons bearing Iatin*American
passports whose nationality has not yet been established, in the list of
nationals of the United States and the other American Republics approved
by the Germans for exchange against a group of 60 Germans from the United
States being repatriated on the GRIFSHOIM.
In respect to (a) and persons under (b) for whose embarkation
authorization is contained in this telegram, you are informed that upon
arrival in Barmelona the Department is waiving non-immigrant visa requirements
for all alien passengers not in possession of appropriate visas. After their
admission on a temporary basis, those persons coming to the United States
as immigrants will be admitted as non-immigrants and will be able to
arrange for the procurement of immigration visas. Admittance will be
granted only in transit to those aliens in transit to Western Hemisphere
destination.
With respect to (b), Pedro and Lydia Chuprine and Jules and Anna
Grunstein, bearers of Costa Rican passports, the Costa Rican Government has
authorized entrance into that country. Embarkation on the GRIFSHOLM will
therefore be accorded to them.
Authorization has not as yet been granted for admission to their
respective countries of the following individuals:
Mexico
-
1. Alexander Schweitzer
Columbia
-
1. Ramon Morano
2. Alvarex Morano
Peru
-
1. Clementine Muller
2. Isidore Poiry
3. Zisold de Valdes
4. Mario Baretto
El Salvador
-
1. Bruno Hecht-Sandoval
Nicaragua
-
1. Herman Zwillenberg
2. Zwillenberg - wife
3. Zwillenberg - child
4. Zwillenberg - child
Dominican Republic
-
1. Sinia Maria Castillo
2. Jacques Castillo
3. Robert Castillo
The surname is-given last in the foregoing list.
Authorisation is
Regraded Unclassified
126
- 2 -
Authorization is granted by the, Department for embarkation on the
GRIFSHOLM of such of the foregoing individuals who are bona fide nationals
of the American Republics and whose status has been clearly established
upon the arrival at Barcelona. You should telegraph most urgently from
Barcelona passport or other identifying data regarding them. The
Department will inform you urgently if it is subsequently informed by the
Republics named that any of the above individuals, who may be unable to
qualify for embarkation on basis of examination at Barcelona, are
admissible to their territory.
Information has already reached the Department that admittance to the
countries whose documentation they bear will be denied to the following
individuals:
Nicaragua
-
1. Otto William Strauss
2. Regina Strauss nee Maier
Dominican Republic
-
1. Jenny Muller nee Silverstei
Accordingly, authorization for embarkation of the foregoing individuals
on the GRIFSHOLM cannot be granted.
Until they can be included in & transfer of refugees to the Fedhala
Camp, North Africa, arrange through Blickenstaff to provide at the expense
of the War Refugee Board for care of those of the foregoing individuals
who are not embarked on the GRIFSHOLM.
The foregoing message was repeated to Barcelona for attention of Smith.
HULL
DCR:MAS:HL
5/17/44
Regraded Unclassified
127
CABLE TO STOCKHOLM
From War Refugee Board to Johnson
Please deliver the following message to Hilel Storch,
Furusundegatan 10, Stockholm, from Dr. A. Leon Kubowitski of
the World Jewish Congress:
"Please have urgently thorough discussion on rescue
program for Hungary with Wilhelm Bohm, Uppfortovagen 5/4,
Stockholm - Rasunda, and have the program forwarded to us
through American Legation. Forward also urgently through
same channel Hungarian rescue program agreed upon with
Chief Rabbi Ehrenpreis. Are very much worried because
had no report recently on situation Lithuania, Latvia
and Estonia, Expect to hear from you without delay."
THIS IS WRB STOCKHOEM CABLE NO. 10
May 16, 1944
4:00 p.m.
FH:lab 5/15/44
Regraded Unclassified
128
CABLE TO AMERICAN LEGATION, STOCKHOLM
The War Refugee Board requests that you deliver the
following message to Rabbi Wilhelm Wolbe, 11 Olefsgotten
Strasse, Stockholm, Bweden:
QUOTE Received your message concerning Lithuania.
Advise exact nature of permits you request, how many
needed an sums necessary. Ready cooperate fully supply
larger sums. Deeply concerned whether actual present
possibilities exist for rescue from ghettos. Vaad
Hahatzala Emergency Committee Rabbi Kalmanowitz UNQUOTE
THIS IS WRB STOCKHOIM CABLE NO. 11
May 16, 1944
5:10 p.m.
BAksin:jp 5/12/44
129
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
American Legation, Stockholm
TO:
Secretary of State, Washington
DATED: May 16, 1944
NUMBER: 1738
SECRET
OLSEN TRANSMITS THE FOLLOWING FOR ATTENTION OF
WAR REFUGEE BOARD.
NO. 14.
A program for accomplishing evacuation of Estonian
political and intellectual refugees has been discussed with
a group comprising the former Estonian Minister here, Mill-
tary Attache and Attache. The group as a whole is in danger
and during the past two weeks over 700 such leaders have
been arrested by German occupying authorities.
Through excellent underground organization the above
three persons are currently operating a limited evacuation
program. Having only extremely limited funds, the group
at present has facilities to make not more than two trips a
month. Requiring the equivalent of $50,000 and coverning a
period of the next three months, a program has been
developed to accomplish the evacuation of perhaps 1000
Estonian political, intellectual and other refugees. It
will be necessary to purchase suitable boats which will
require approximately half of the aforementioned amount.
Can guarantee close financial control and accounting of
expenditures and I believe arrangements can be made to
advance funds on a piocemeal basis against established
results, provided the Board can find financial support
for theabove program. Gasoline requirements in this
program is one of the important complications; however,
if the Board approves of the program this will be further
explored. If sent, the funds must not be transmitted
through banking channels and it is obvious that we must
keep strictly confidential the entire operations.
Although it is extremely complicated and will be
sensitive to changed developments in the Baltic, the success
of this operation seems favorable. Although this problem to
has been explored carefully, it is also not possible
precisely control the types of refugees which will be
evacuated. A gamble appears justifiable because of human-
Regraded Unclassified
130
itarian considerations which are extremely urgent. We
have also had discussions with an identical type of group
representing Latvians and Lithuanians who, even though
more limited, also operate a similar underground work.
In the next few days we will forward the final proposal
for these two groups. On the foregoing underground oper-
ations it appears that the three former Baltic Ministers
in Stockholm work together very closely. Perhaps all three
groups can jointly use some of the facilities required to
operate the program, particularly scouting vessels.
The aforementioned operations are known to and facil-
itated by the Swedish Foreign Office which, through its
general staff, is actually supplying the group with German
identification cards and gasoline and this information has
been conveyed individually to Olsen by these three former
Ministers.
On a preliminary and confidential basis, the above
three operations have been discussed with an appropriate
official of the Foreign Office by Olson. This official
is sympathetic and, on a very secret basis, will cooperate.
JOHNSON
Regraded Unclassified
131
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
American Legation, Stockholm
TO:
Secretary of State, Washington
DATED:
May 16, 1944
NUMBER: 1740
CONFIDENTIAL
The following is No. 16 for War Refugee Board.
Given below is the substance of a message from Frank
Kingdom, New York, care of International Rescue and Relief
Committee, from Elise Ottesen Jensen:
We received May 2 cable and $1000, which was greatly
appreciated. We have sent report through Ivan Olsen. Pur-
suant to your wish, money is paid regularly to Lubinger and
others.
JOHNSON
132
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
America Legation, Steckholm
TO:
Secretary of State, Washington
DATED:
May 16, 1944
NUMBER: 1744
SECHET
Following is our No. 15 for VIB in reply to War Refugee Board, No. 9
(Department's mossage dated May 12, No. 895).
We have approached the Swedish Foreign Office with respect to the
vessel BANDALAND and it seems distinctly cooperative and if all details
can be satisfactorily worked out it is villing to divert the beat. This
evening. as preliminary to problem, the Foreign Office is wiring the ship's
master to determine whether he considers the boat sufficiently seawerthy for
this purpose. You will recall that the vessel is being vithdrawn from
Greek relief primarily because it is badly in need of overhauling. Pending
receipt of advice, the fellowing information from the War Refuges Beard
would be appreciated by the Legation.
(a) We would like to know how may refugees are invelved also how many
trips are involved and between what ports. you should note that the
RANDALAND is a carge vessel of 4575 deadweight tons vi th virtually no
accomedations for passengers.
(b) We would like to know who the charter party will be. We mggest
that you give consideration to the international Red Cross or other neutral
organisation which would be in a position to make original request for
safe-cenduct instead of the Var Refuges Board (Department's No. 895).
(e) Until the refugees reach their final destination, what organisation
will assume responsibility of taking care of them?
(a) On May 18, the vessel will be released from charter to Swedish
Red Cress, which charter cost runs between 3,000 and 4,000 krener daily.
Ve would like to know if the Var Refuges Board will asmns responsibility
for charter costs beyend May 13 which are occasioned bydelays is negotiations
to place the vessel in refuges work OVER if such negotiations are unsuccess
ful ultimately.
(o) Upon withdrawal from Greek relief, the BANDALAND was to return
directly to Swedish waters under agreements concluded separately with the
Germans and Dri tish. The Swedish Foreign Office, consequently, will be
required to secure German permission to divert the beat. in/addition to
German safe conduct. It is asked by the Foreign Office whether it should
take steps to secure such permission immediately. Hewever, it is believed
by the Legation that the first question which will be asked by the Germane
is who 1e the charter party, and the Legation feels that until this point
10 clear, the Bredes should not make approach. It is noted confidentially
that after May 18 the BANDALAND vas scheduled to depart for Lisbon and cross
the Atlantic to pick up cargeofer which German permission vas secured.
This will suggest favorable prespects that for the refugee work the vessel
is sufficiently seaverthy
JOHNSON
DOR:VAGINL 5/18/44
Regraded Unclassified
133
CABLE TO BERN
From War Refugee Board to Harrison for McClelland
United Yugoslav Relief Fund being requested supply
assistance Jugoslav nationals Switzerland following categories
(a) Jewish refugees (b) students (c) interned escaped civilians
(d) escaped prisoners of war. These groups under care of Swiss
Government and Swisscross. Accounts here vary as to seriousness
unmet needs.
United Yugoslav Relief Fund willing to supplement
current program if necessary. Please cable report covering
nature and extent of needs of these groups and if Swiss Govern-
ment and Swisscross welcome assistance.
THIS IS WRB BERN CABLE NO. 19
May 16, 1944
11:25 a.m.
PJMcCormack:FH:lab 5/15/44
Regraded Unclassified
134
PARABHRASE OF TELEGRAM RECEIVED
FROM:
American Legation, Bern
TO:
Secretary of State, Washington
DATED:
May 16, 1944
NUMBER: 3105
SECRET
The following message is for Leiper, American Committee for Christian
Refugees, 297 4th Avenue, New York City, from Thooft, Freudenberg and
Seguin (from McClelland).
Reference is made herewith to the Department's telegram of April 27, 1944
No. 1452. It has been decided by Swiss authorities to unblock 1943 balance
and on conditions that balance of American gifts is transmitted in free francs,
they are ready to unblock in 1944, $132,000 representing 71,000 Bible, 48,000
refugees and 13,000 Council.
Consequently, Freudenberg asks to prepare for sending at least 48,000
in free francs representing four months as only January-February have been
paid in free francs so far.
The budget of Beguin is based on the expectation that 7,000 in dollars
and counter part of 71,000 in free francs will be sent by Bible Society
and he is convinced that printing scriptures here to meet the increasing
Bible famine in Easter and Central Europe remains an urgent task; and larger
editions would not be expensive now that Polish, Caech, Serb, Italian Galvanos
are available. It is suggested that your recenstruction committee send $42,000
for reconstruction, making use of the above mentioned to unblock, since $100,000
would be sufficient to meet most urgent printing needs this year and since fund #
to meet first urgent relief needs are required by reconstruction committee. It
is requested that you discuss with North the foregoing.
HARRISON
DCR:IDB:HL
5/10/44
Regraded Unclassified
135
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
American Legation, Born
TO:
Secretary of State, Washington
DATE: May 16, 1944
NUMBERS 3107
COMPIDENTIAL
Mc01elland transmite the fellowing for attention
of the Visa Division and VRB.
Reference is nade herein to the Legation's calls
of April 6, No. 2123.
20 date no visas have been issued to refugee children
and the following reasons are submitted as the explanation.
In order to determine the eligibility of a child for over
coas emigration the organizations officially responsible
for all refugee and emigrant children now in Switserland
desire first to conduct a therough investigation in each
ease, This vas started early in April and it is ained
particularly at securing as accurate information as possible
the whereabouts of the child's near relatives. Also the
organizations are concerned as to the advisability of
enigrating children whose parents havebeen deported to
the east, but who cannot at the came time be considered
as deceased. In some cases the question therefore arises
whether 1t will net be advisable to plan for awaiting
period after consation of hostilities or until it can be
determined by various channels whether parents are still
in Burope and whether they are alive. No doubt such
vaiting would be in Switzerland in which case assurance of
material assistance from overseas for ildren here would
be desirable. All children, unequivacally eligible for
migration to the United States can begin receiving their
visas, as seen as investigation individual cases this angle
is completed.
Approximately 3,500 refuges and emigrant children
under 16 years, who arrived prior to January 10 1944 are
at present in Ovitserland. Due to death, deportation or
disappearance of parents, of these 3,500 between 700 and
1,000 only can be considered as abandoned and consequently
in the first instance eligible for part of the 4,000 visas
of the United States. Not only relief organisations but
Svice authorities desire postwar enigration possibilities
especially for this group. the paramount concern of Svice
in whole refuges problem being assurances that there be
reduced to a minisus the number of refugees liable to remain
on their hands after the var. From their point of view this
question is vital and their whole policy regarding admission
of additional refugees has an important bearing.
- 2 -
136
About 350 parentless Jewish children under 16 entered
Switserland clandestinely from France between January 1 and
May 4, 1944. Along with parents or relatives approximately
125 more have entered, Although border control measures
on the German-scoupied side particularly in Faute Savoie
are becoming increasingly stringent, they continue to arrive
irregularly in small groups. Becuase all movement of persons
are strictly controlled it is progressively more difficult
for organisations effecting resoue, primarily the Jewish
*Oenvre de Secours aux Enfants", to bring children within
striking distance of the border on the French side. At
present Raute Savoie is now "sone interdite", Considered
as a safer route, children who recently arrived in Geneva
were brought through Department of Ain and Rellegarde.
Naturally, with coming military operations, this rescue
work will become more difficult than now if not impossible,
a factor is general which will operate more against the
arrival of refugees in Switzerland than limited measures
of "refoulement" of the Swiss. It is doubtful for this
reason that a number of children eligible for visas able
to reach Switzerland from France by July 10 1944, will reach
six hundred.
Would it not be possible, in view of the small overall
number of refugee and emigrant children at present in
Switserland eligible for United States immigration visas
(including arrivals up to May 4, 1944 et maximum would be
1,500) to consider our visas as available to all of them,
provided this would be in harmony with our immigration laws,
rather than just to those who have entered the country sines
January 10 The number eligible will further be refuced by
the fast that at least 10% of these children will have passed
their 16th year w December 31, 1944 toward alleviation of
Ovitserland's refuges problem after the war such a possibility
would constitute valuable if small concrete gesture by our
Government and any other stops which ve might desire to
take in order to persuade the Swise to admit additional
refugees would thus be facilitated.
HARRISON
DOR:MASSIM
5/17/44
Regraded Unclassified
137
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
American Legation, Bern
TO:
Secretary of State, Washington
DATE:
May 16, 1944
NUMBER: 3110
SECRET
McClelland sends following for WRB attention.
This refers to April 22 telegram No. 1405 from
Department.
Your greetings and the confidence placed in me
by Board's nomination are sincerely appreciated.
Although practical possibilities are distinctly
limited as regards refugee reseue work from Switzerland
I will do all in my power to forward aims of the Board.
Continued assistance to reliable relief organizations
is recommended, and as initial step of great practical
importance in this direction it would be helpful to
enable them to receive their funds for use in occupied
territories regularly at official rate of exchange.
If possible all publicity should be avoided and only
in strictest confidence should reports concerning
progress and plans of relief rescue operations be
discussed with organizations in the United States. To
certain extent publicity given through U. S. press
dispatches to my appointment has already compremised
aid which neutral authorities such as the International
Red Cross and Swiss authorities might be prepared to
lend to refugee rescue operations from base in
Switzerland.
Fairly close contacts have been established
with situation of refugees of France. I also hope
to send you shortly reliable reports on Jewish
situation and other endangered refugees of Hungary
and northern Italy together with whatever suggestions possible
as to steps concerning rescue or practical
relief. However, I fear that very little can be
accomplished from Switzerland in case of Hungary.
HARRISON
Regraded Unclassified
138
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
American Legation, Bern
TO:
Secretary of State, Washington
DATE:
May 16, 1944
NUMBER: 3122
SECRET
For WRB from McClelland for Union of Orthodox Rabbis
from Sternbuch.
Since March of 1943 there has been a camp at Bergen
near Hannover. Bergen Belsen is located in province
called Celle. Between 150 and 200 people in this camp
possess South American papers at present time. Many
have been deported we fear. Near Dresden at Bergau
there is another larger camp with at least 1,400 internees
whose protective powers are Switzerland and Spain. It
is understood that in these two camps the situation
is worse than at Theresienstadt camp. To our surprize
the Red Cross has not been admitted to them thus far.
It is said that internees there are actually starving
and do not receive any Red Cross parcels. Apparently
they are not permitted to receive mail or to dispatch it.
Camp is excluded from outer world and news is very rare.
According to reports deportations have been made.
It is urgent that steps be taken by protecting
powers for both camps similar to other camps as
Department's April 22 telegram to Legation at Bern
indicated. Red Cross parcels and free post should be
accorded internees of these two camps. It might be that
transfer could be promoted to Vittel or other safer
places.
It is very difficult to get assistance to those in
Hungary. Various things are being tried but to date
with no evident success. As yet situation is not clear.
A courier with eighty South American papers has been
sent by us once again. If Turkish transit permits
were given many families would like to try to emigrate
illegally. However, until now this has not been the
case. For people who escape through or from Rumania
such transit possibilities are urgent. The family of
Bobbow-Halberstarm has arrived in Bucharest now.
Although we
Regraded Unclassified
- 2 -
139
Although we are in contact with Griffel he cannot
render great assistance as long as transit through
Turkey is not allowed. Our recommendation is that
no langer amounts be sent to that place. If he can do
something positive he can get as much money as he needs
from us.
Only San Salvador papers are available for this
rescue work. It is requested that whatever steps are
necessary be taken by you in order that such papers
can be granted by some other Consulates in Switzerland
also. In order to save his family of twenty-seven
persons the Wisnitzer Rabbi Hager of Cross Wardein has
asked for help. Twenty thousand Swiss francs have been
sent via courier to him.
Our telegraphic requests for certificates which
Jim Lewin passes on are being handled very slowly by
Jewish agency at Jerusalem. In our opinion it would
be most helpful if we intervened by wire.
With various good results our rescuing of men
from Italy and France to Switserland has been begun.
Pressing calls for help are coming to us from
Theresienstadt Krakau and other towns for clothing and
food parcels to same the lives of people hiding in
vicinity. Calls are coming from working camps in
Poland also. Kindly inform us if we may participate
in this matter.
Their parents having been deported approximately
one hundred children have crossed the border into
Switzerland illegally and these children are from our
best families in Belgium and Holland. Part of them
we were able to place with families but as there were
not sufficient private places available, part had
necessarily to go to Klosters. Permission from Swiss,
supported by Polish Legation, has been received to
supervise their education and to place them in children's
homes. For 100 to 150 children it costs 150 francs
monthly pet child at present moment in a home. However,
only half of this sumacan be raised by us. Permission
is hareby requested by us to help in this work also.
HARRISON.
140
MESSAGE FROM DR. LEON KUBOWITZKI, WORLD JEVISH CONGRESS,
1834 BROADWAY, NEW YORK 23, NEW YORK, TO MR. BARLAS, PERA
PALACE, ISTANBUL, TURKEY.
We strongly recommend for granting Palestine certificates
following outstanding Hungarian people selected by special
subscommittee:
Dr. Inre Gyorki - Member of House of
Representatives & Wife
Budapest
T. Honred-u 16
Mano Buchinger
#
#
XIV. Nuraberg-u 29
Dr. Erne Brody
-
I. Ferry Oskarwy 78
Dr. Bela Fabian
.
VI. Teres-korut 43
Dr. Geza Desi
#
V. Bathory-u 5
Dr. Lajos Smabelcsi - Editor
I. Trembitas-ut 16
Dr. Huge George
- Writer
VIL. Sip-ucca 12/Pesti
Israelia Hitkosseg Ssekhare
Jossef Buchler
- Journalist
VII. Nepezinhas=u 21
Dr. Mihaly Revess
- Editor
IX. Ulloieut 63
Jeno Walless
-
#
XIV. Americai-ut 74
Mane Abrahamson
- Canter
VII. Hombach-u 9
Abraham Freudiger de Obuda
VI. Isabella-u 51
Denes
#
#
-
VI. Andressy-ut 128
Fulop
#
"
.
V. Csakywu
9
J. Lipot
.
-
.
VI. Andrassy-ut 128
Karoly
#
.
#
VI. Podmaniczky-y 35
Samuel
-
.
-
V. Nador-u 31
Dr. Henrik Endrei
VII. Erzsebetkorut 26
4. Emil Dinner
VII. Dob-u 18
Bela Fulop
VI. Ssinnyei Merse-u 1
Kalman Donath
V. Pannomis-u 8
Bela Revess
- Writer
VI. Brondy-u 93
Lajos Land Dr.
- Senator
V. Deak Ferenoeu 16=18
Ander Glucksthal
- Advecate
I. Naphagy-ter 3
Karely Keleti /28 Tears/Wife Iva 23 Years/Daughter Judis 1 Tr./Budapest Kirdy-
Kiraly ut3/0
Lasslo Hirschler
Wife Klara
Son 3 Yrs.
Budapest, Dohany-u 30
Klein Issake, 52 yes. and 5 children, Sateraljaujhely, Earolyi uoca, 18, Hungary
Katz Terex, 50 years, and 5 children, Kisvarda, Hungary
Lemberger, Brace rabbi, 37 yes. and 4 children, Szerence, Hungary
Lefkovits Lipotne, 42 yes. and 7 children, Kisvarda, Hungary
Osstreicher Resa, 43 yrs. and 4 children, Husst, Hungary
Perlstein Kati, 56 yrs. and 4 children, Suatmarnemeti, Tompa ucca 15, Hungary
Pollak Erne, 28 yrs., c/o Lemberger Rabbi, Bserance, Hungary
ellak Jeno, 27 yrs., c/o Lemberger Rabbi, Sserenos, Hungary
Pollak Jamone, and 2 children, Kisvarda, Hungary
Regraded Unclassified
141
- 2 -
Rottenberg Israel, 63 yrs., and wife, Mezokassony, Hungary
Shonfeld Marton, Rabbi, 32 yrs. and 2 children, Ermihalyfalva, Hungary
Schuck Soma Rabbi, 40 yrs. wife and 2 children, Budapest, Istvan ucca 20, Hungary
Spitzer Milksa, Hajduboszormeny, Pecsy ucca 20 - Csechoslovak
Stern Daniel, 51 yrs. and 5 children, Kisvarda, Hungary
Engel Mor, 65 yrs. and wife, Szerencs, Hungary
Engel Jozsef, 38 yrs. wife and 3 children, Szerence, Hungary
Ehrenfeld Samuel, 49 yrs. and wife, Nagysurany, Hungary
Frankl Lazar, Rabbi, wife and 5 children, Salgotarjan, Hungary
Friedman Samunne, 50 yrs. and 3 children, Nyirbator, Piaczter, Hungary
Fleishman Hermin, 30 yrs. and 3 children, Make, Deak, Ferencz ucca, Hungary
Fruchter Fani Feige, 56 yrs. and 2 children, Maramaros Sziget, Hungary
Gruber Lazar, 55 yrs. wife and 5 children, Budapest, Hungary
Teitelbaum Joel, 58 yrs. and wife, Szatmarnemeti, Hungary
Teitelbaum Zal an Leb, 35 yrs. wife, Maramarosszieget, Hungary
Weinstock Lina, 51 yrs. and 5 children, Dees, Hungary
World Jewish Congress, Leon Kubowitski
May 16, 1944
5:10 p.m.
BAksin:jp 5/13/44
Regraded Unclassified
142
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
American Embassy, Ankara
TO:
Secretary of State, Washington
DATED:
May 16, 1944
NUMBER:
876
SECRET
Following is No. 54 from Ankara for the Wati Refugee Board.
Department's cable of May 13, No. 425, is referred to herewith.
I again urged the Minister for Foreign Affairs, in the course of one
of my recent talks with him, that he should do everything within his power
to stay the deportation from France of Jews who claim Turk nationality. I
was informed by the Minister that on several occasions the Turk Ambassador
in Vichy had received specific instructions to do everything within his
power to be of help in those cases, and that it was indicated from the
very considerable humber of Jews claiming Turk nationality who have already
arrived in Turkey that the Ambassador's efforts had been partially success-
ful at least. It was stated by the mInister that the Ambassador's position
in dealing with the authorities in Vichy was "none too advantageous" in
that ever 90% of the Jews in France who claim Turk nationality "have not
the remotest claim tehereto, since in many instances their ancestors
left Turkey several generations ago".
I was informed by the Spanish Minister, with when I have had a talk,
that he has made representations to the government of Turkey on behalf of
Spanish Jews in Greece and other Axis occupied countries. I offered to
support his representations to the Turk Foreign Office should he wish
me to do 80. It was stated by the Minister that I would be informed by
him if the Turk authorities failed to act and he would further discuss
the matter with me.
STEINHARDT
DCR:VAG:HL 5/18/44
Regraded Unclassified
143
MJR-790
Ankara
This telegram must be
paraphrased before being
Dated May 16, 1944
communicated to anyone
other than a Government
Rec'd 9:04 p.m., 17th
Agency. (BR)
Secretary of State,
Washington.
880, May 16, 6 p.m.
Department's 433, May 15.
FOR HIRSCHMANN OF WAR REFUGEE BOARD FROM THE :
AMBASSADOR.
Ankara's 55.
Delighted to learnyou have been able to arrange
your affairs so as to permit of your early return to
Ankara.
STEINHARDT
EH
HTM
Regraded Inclassified
144
NOT TO BE RE-TRANSMITTED
COPY NO. "
SECRET
OPTEL No. 156
Information received up to 10 a.m., 16th May, 1944.
1. NAVAL
On 14th aircraft from the Home Fleet attacked RORVIK north
of TRONDHEIM. 1 ship of 4/6,000 tons was hit and 3 possibly
damaged. 4 Heinkel aircraft were destroyed and another probably
destroyed. 1 Hellcat lost. Later a fish oil factory northeast of
STADTLANDET and 2 armed trawlers were damaged. During the with-
drawal an attack on H.M. Ships by ME 110 aircraft was driven off by
gunfire. One of H.M. Submarines off Southern FRANCE sank an 800
ton ship on 11th and damaged and beached a small coaster on 15th.
Another of H.M. Submarines sank 5 caiques in the AEGEAN between
3rd and 5th. One of H.M. Submarines sank a large junk northeast
of SUMATRA on 7th. A native dhow was sunk by U-boat east of the
MALDIVE ISLANDS, on 10th. 28 survivors rescued.
2. MILITARY
ITALY. 8th Army. No further developments north of CASSINO
or in town itself, but severe fighting has continued to the south,
especially against U.K. troops. Indians have advanced to within a
quarter of a mile of PIGNATARO, 4 3/4 miles southwest of CASSINO.
We now have 9 bridges over RAPIDO.
5th Army. South of the LIRI S. GIORGO and a height to the
west of it have fallen to French troops who are now pressing on
towards ESPERIA. Goums have taken 2 heights west of AUSONIA. On
the left U.S. forces have pressed on across the AUSONIA-FORMIA
road and captured SPIGNO. Excellent air support over whole front
of attack.
3. AIR OPERATIONS
WESTERN FRONT. 15th. U.S. heavy bombers dropped 432 tons
dropped by medium, light and fighter bombers on 4 airfields and 6
on military objectives in the PAS DE CALAIS. Total of 131 tons
railway centres in Northern FRANCE.
15th/16th. Aircraft despatched:
LUDWIGSHAFEN
30 Mosquitoes
Other Objectives
13 Mosquitoes
Sea-mining
33 (3 missing)
Intruders, Leaflets, etc,
42 (3 enemy aircraft des-
troyed, 1 Wellington
missing).
About 80 German aircraft operated over the South coast
with some concentration over PORTSMOUTH, ISLE OF WIGHT area. 5
were destroyed by night fighters. Damage to property and 1 fatal 8
casualty, PORTSMOUTH. Hits on hospital and a factory, COWES,
killed.
bombers on airfields and railways in Northern ITALY. Photographs
ITALY. 14th. About 1,400 tome were dropped by U.S. heavy
show severe damage to railway centres at VICENZA, TREVISO and
MESTRE,
Regraded Unclassified
145
May 17, 1944
9:30 a.m.
GROUP
Present: Mr. D.W. Bell
Mr. C.S. Bell
Mr. Haas
Mr. O'Connell
Mr. Smith
Mr. Blough
Mr. White
Mrs. Klotz
H.M.JR: I signed that thing to Byrd. I don't
know who wrote it. I don't think it is too hot.
MR. D.W. BELL: Don't you? It is hot from Byrd's
standpoint. It criticizes his report, I think, rather
severely.
MR. C.S. BELL: Would you have gone stronger?
H.M.JR: Yes, I would show how many cars we had, and
how many we laid off.
MR. D.W. BELL: There is a statement in there that
the use of the cars was materially reduced. It doesn't
show the number, it is true.
H.M.JR: Yes, but it - I don't think it goes far
enough, if our record is all right.
MR.,C.S. BELL: Our record is all right. This is
the second time we have torn one of his reports to
pieces. A year ago we took it all apart and they sent
their men down here.
H.M.JR: If you men are satisfied - I signed it.
Regraded Unclassified
146
- 2 -
MR. C.S. BEIL: I thought it was pretty strong.
H.M.JR: O.K. All right.
Dan?
MR. D.W. BELL: I think he will change it, based
on that report. I don't think he will want that letter
printed in the record; at least, he never has printed
one of your critical letters in the record.
H.M.JR: I don't like comparing it to the other
Departments.
MR. C.S. BELL: You have seen his report; he makes
those comparisons.
H.M.JR: Oh, does he? O.K.
MR. D.W. BELL: It is a little critical of us - of
the Department of Justice; not too much, I don't think.
H.M.JR: That won't bother them!
MR. D.W. BELL: I called Senator George yesterday
afternoon about the debt bill and told him I thought
that in view of the fact that the other subcommittee
was not going to start hearings until the 26th that it
would be too late, and we would get into quite a wrangle
over the pension trust amendment.
Now, I asked him if he thought the house would
accept that amendment, and he said, "No, I am sure they
won't."
I said, "Don't you think an attempt ought to be
made to keep it off the debt bill."
He said, "Yes, when I come back Friday I will take
it up with Taft and see if we can't get him to eliminate
his thoughts about the debt bill. I think I can get him
to agree to it."
147
- 3 -
So in view of his attitude, I did not call Doughton.
I thought I would wait until Friday and see what the
results are.
You saw in the paper, probably, or on the ticker,
about the reduction of the Budget's expenditures. That
is entirely wrong. The President got all mixed up on
a statement which Smith had sent to him, and I guess
they found out afterwards it wasn't a very good state-
ment. It is a reduction in contemplated appropriations,
and not expenditures at all.
In other words, he said that in the budget of last
January there probably would be ninety billion dollars
in appropriations - additional appropriations - to run
the Army and Navy in 1945. Instead of asking for ninety,
he is going to ask for eighty-two, or something like
that. The expenditure figure isn't changed one bit.
H.M.JR: Who is going to catch up with him on that?
MR. D.W. BELL: I called them last night and asked
them if they wouldn't hold a press conference in the
Budget after the President's press conference, and
Smith agreed to it. He did straighten some of it out.
The Post wasn't bad, but the ticker was terrible. They
did straighten some of the papers out before it got
out.
We have received from the Federal Reserve Bank of
New York those gold coins - do you remember - that we
talked about.
H.M.JR: Oh, did we?
MR. D.W. BELL: The box has not yet been opened, but
there are seven hundred and two coins. They must have
had one of every mint and every mintage, because there
are one hundred and seventy-one twenties, and one hundred
and seventy-eight tens, two hundred and twelve fives,
eleven threes, one hundred and twenty-nine two-and-a half's,
and one one-dollar piece, which ought to be quite valuable.
148
- 4 -
H.M.JR: Do they keep one set for themselves?
MR. D.W. BELL: Yes. Now, that is going to take
quite a case. I think possibly we ought to take out
one of each and put those in the case.
H.M.JR: What about the others?
MR. D.W. BELL: We are required by law to destroy
them or melt them down.
H.M.JR: Oh, I wouldn't do that.
MR. D.W. BELL: But we can hold them in the vault,
I think, temporarily.
H.M.JR: Some day, when the Treasury is hard up,
they can seil them to some collector and make money.
MR. D.W. BELL: They are probably collectors'
pieces - old coins. 'Frisco kept a collection and we
told them that they could keep one, too. They only kept
one hundred and sixty-eight dollars in their collection.
We will open them up and see what we can do about
a case. I think we will have to have a very strong
case, probably steel lined, and something to put over
the top of it at night, or steel bars to go across, so
people can't break the glass.
H.M.JR: You can have this bullet-proof glass
which is two or three inches thick.
MR. C.S. BELL: Hook it up by an alarm system to
the guard's office. How many thousand dollars will it
represent?
MR. D.W. BELL: It won't represent so many dollars,
I think.
MRS. KLOTZ: To one of the guards who stole it
before? I don't think I would do that!
149.
- 5 -
H.M.JR: All right?
MR. D.W. BELL: Probably wouldn't be over & couple
of hundred dollars in the case, at the most.
That is all I have.
H.M.JR: Charlie?
MR. C.S. BELL: This letter that Mr. Mackhas pre-
pared to Secretary Stimson is for you to sign. I think
it is all right. It contemplates the Army making
these inspections of warehouses. It is a one-time pro-
position. They will make up their own minds as to
which should be kept on a current basis.
H.M.JR: How are we getting along over there, anyway?
MR. C.S. BELL: I think we are coming along very
well. Mr. Olrich was out of town for two or three days.
I talked with him yesterday and told him I was coming
down to see him today. He is perfectly satisfied -
Olrich - but there may be some things that he will
need a little guiding on. He is accepting practically
everything up to this point.
H.M.JR: Is he making progress?
MR. C.S. BELL: Yes, sir. He received his first
statement of fifty thousand and over, yesterday. That
was in a little memo that I gave you. A copy of that
is coming over here today.
He also will receive this morning the first IBM
statement, which will put some bugs in it.
H.M.JR: Does Haas' office supervise this?
MR. C.S. BELL: I have the report that you spoke of,
already, and I talk d with him about that yesterday.
That is one of the things he wants to go into today -
that Mr. Haas' office prepared. It is rather an elaborate
report that Tickton got up.
150
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H.M.JR: Will I see it?
MR. C.S. BELL: I thought I would talk with Olrich
first and see if he understood it thoroughly; then we
would bring it in. There may be some things he wants
to eliminate, himself.
H.M.JR: He is coming at three-thirty. How about
that?
MR. C.S. BELL: All right, sir. It is a dummy
report - an outline of a report.
MR. D.W. BELL: Mr. McConnell is about to wind up
his work over there on the contract termination of
financing. He isn't so worried about it, himself, but
he says it isn't costing the Government very much for
him, at a dollar a year, but Mr.Claire is here helping
him, and he will finish up, too.
H.M.JR: Who is he?
MR. D.W. BELL: The gentleman we got from Harvard
Business School. We thought at the time we were getting
him for Procurement because they were then going into
surplus property matters. But McConnell got tied up
with this contract termination of which he was the chair-
man of the subcommittee, and he used him, and the man
detailed from the Securities and Exchange Commission.
I think it might be a good thing to give r.Claire to
Mr. Olrich. He is an excellent man.
H.M.JR: See if he wants him. I can't make any
work for Bob McConnell?
MR. O'CONNELL: No.
H.M.JR: Do you know of anything?
MR. O'CONNELL: No, I have been puzzled about what
he ought to do, frankly. He has done very well with
what he has been doing, but he has just about worked
himself out of a job.
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H.M.JR: What is there we could give him?
MR. D.W. BELL: I don't know of anything, unless
he could help out on post-war taxes. He is not an
expert at all. You would get the businessman's view-
point.
H.M.JR: I wouldn't have him on there.
MR. BLOUGH: Thank you, sir.
H.M.JR: No, I wouldn't pick him for that.
MR. WHITE: Couldn't he be available until something
does develop? He is in and out.
MR. D.W. BELL: I think he would probably like to
loaf awhile. He has a beautiful summer home up here.
H.M.JR: The only thing he might do - we could put
him to work looking around the raw materials situation
in the world. I mean, he does know that; that is his
line - what raw materials we need - the question of
barter with Russia, and 80 forth.
MR. WHITE: I don't think it is very fruitful.
Anything he could find out at this stage of the game -
I doubt whether it will affect any decisions, but you
could try.
MR. D.W. BELL: Anything he could do to help out
in Procurement?
H.M.JR: No, he doesn't want to. He says it isn't
his business. Do you want him on any of that raw
material stuff, Harry?
MR. WHITE: I shouldn't think SO. Certainly not
for this stage of the game. I think if it could be
arranged, and I gather from his own remarks that it
would fit his needs if he could just be available.
Let him take a few weeks or a month off; something
152
- 8 -
is certain to turn up in which I think you would be glad
to have him, but I think it is better to have it that
way than to pick something for him to work on merely
to keep him busy when there really isn't something worth
it.
Isn't it true, Joe, that he would be available
or is he planning to go to something else?
MR. O'CONNELL: Oh, sure. I think he would be
entirely happy with that sort of arrangement for the
summer, because, as you say, he has a nice place, and
enough varied interests SO that he won't be particularly
bored. I think he would be happy to just keep an anchor
to windward here.
H.M.JR: Who is going to tell him?
MR. O'CONNELL: I don't think anybody needs to
tell him.
MR. D.W. BELL: I can talk to him. I know him pretty
well.
H.M.JR: Supposing you have a talk with him, will
you?
MR. D.W. BELL: Sure, I see him every day or two.
H.M.JR: Is he around?
MR. D.W. BELL: Yes, he was around last week up
to about Thursday or Friday morning. I don't know
whether he is here this week or not.
MR. O'CONNELL: I haven't seen him.
MR. D.W. BELL: He goes to New York about every
other week and stays there three or four days.
MR. WHITE: While we are on it, I tell you & spot
he could do well, but I don't know how to work him in
on it - whether it is at all possible - but I believe
153
- 9 -
we are getting rooked in Spain on what we are paying
for that stuff, and in Portugal. I believe that they
are just running up the price on us without our getting
any more, and I think he would be & man who would
certainly know a good deal about it.
H.M.JR: Yes, but that isn't our business, Harry.
MR. WHITE: No, I was just wondering whether we
could suggest him to FEA for that job.
H.M.JR: That is their business.
MR. WHITE: Definitely their business.
H.M.JR: Are they interested?
MR. WHITE: With your permission I'd like to sound
out Currie on it, and if they want to use him,
then it will be all right for you to loan him for a few
months.
H.M.JR: I have a much better suggestion than that.
If we take over SKF, I'd like to see him put in as
Government manager there.
MR. O'CONNELL: I don't see how you could do that,
because it will be the APC that takes over SKF.
H.M.JR: You could tell it to Lauch Currie.
MR. O'CONNELL: All right, but--
MR. D. W. BELL: They are not very friendly to
him, are they?
MR. O'CONNELL: In the past there was a differ-
ence of view which resulted in his being relieved of
his job in running General Aniline; but for that it
would be a good idea, because he would be good for
that thing.
154
- 10 -
H.M.JR: Letting the past be the past, that
would be a job for Bob McConnell.
MR. O'CONNELL: He wouldn't be very happy to do
it.
MR. D. W. BELL: It would be a good job for him.
No, I don't think he wants to work with Crowley.
MR. WHITE: I think the conversation has indicated
that something is bound to come up sooner or later in
which he will be a useful man.
H.M.JR: Yes, that would be a good job for him.
I didn't see the release, incidentally, on SKF.
Will you ask them?
MR. SMITH: Oh, yes. It was all over the papers
this morning - the Treasury and the other agency, APC.
MR. WHITE: I think you can be certain that that
release will get plenty of publicity.
MR. SMITH: It certainly did. And Batt was there
with an Admiral and a General, making speeches yesterday,
up at SKF.
MR. WHITE: That press release exonerated the
management.
H.M.JR: Luxford wanted to do it.
MR. WHITE: I know it. We talked it over. There
really wasn't much choice.
155
- 11 -
H.M.JR: You heard what happened? The SKF baseball
team played another one and they broke the game up because
the other company called the SKF nothing but a bunch of
Nazis, and there was a free-for-all fight. We had to do
something about it.
Well, I think the thing will get hot enough 80 that
something will happen.
MR. C. S. BELL: Did you want to have the Executive
Order changed to eliminate the General Counsel as an
Acting Secretary in the absence of the Secretary? It
stands on the books now on this Executive Order dated
March 1941.
H.M.JR: The answer is yes. Then when these fellows
come around and get kind of hot and tired on Saturday and
they want him to act--
MR. O'CONNELL: I can take the afternoon off!
H.M.JR: Yes, they will be around.
MR. C. S. BELL: That is all.
H.M.JR: Harry?
MR. WHITE: I have nothing. We will continue with
the hearings this morning. They will be over today.
MR. D. W. BELL: I understand Mr. Dewey is going to
take you on this morning.
MR. WHITE: He asked to testify. I didn't know whether
he was going to ask questions or make a statement.
MR. O'CONNELL: He was a little confused. He asked for
an opportunity to appear as a witness, and at the end of the
hearing Bloom announced that he had given Mr. Dewey permission
to ask questions.
Now, Dewey hasn't asked to ask questions, 80 whether
he will want to ask questions this morning is not entirely
clear to me, although I think he probably will. He will ask
Harry some questions and make a statement.
156
- 12 -
MR. WHITE: He was writing questions and giving them
to Voorhis. Voorhis was asking them.
H.M.JR: Do you think this was a mistake, this state-
ment?
MR. WHITE: No, sir. The release? No, I don't think
we could have done other in view of their claim that there
was a reduction in output and that it was necessary to
reassure the workers that they were not working for Germany.
That release was all right. There was only one phrase put
in there which we didn't think was necessary, but we didn't
think it was worth fighting about. It was added by Markham,
who, I understand, was quite friendly with Batt.
H.M.JR: What is Markham's background, anyway?
MR. WHITE: Wasn't he with Jones in RFC?
MR. O'CONNELL: He has been with Leo Crowley in FDIC
for almost the past ten years. Before that, I believe he
was a lawyer, and I know he is from Boston, but what his
earlier history was before he came here, I don't know. He
has been here about ten years.
H.M.JR: He used to do all of Crowley's political work.
He was his political contact on the Hill, and so forth.
MR. O'CONNELL: I think he was his General Counsel.
H.M.JR: He wasn't a General Counsel.
MR. D. W. BELL: Brown was.
MR. O'CONNELL: Before Brown. Brown used to be
assistant, and I think Markham was his General Counsel.
H.M.JR: Anything else, Harry?
MR. WHITE: No.
MR. BLOUGH: Henry Long of Massachusetts, whom you
may know, heads up a joint committee of the American Bar
157
- 13 -
Association and the National Tax Association on Federal,
State, and fiscal relations. They are having a big
shindig in New York on Friday, a sort of semi-final report,
and have invited me to be present. I would like to go if
it is not inconsistent with other work.
H.M.JR: These little trips all count up against your
trip to England, don't they?
MR. BLOUGH: No, I hope not.
May I report on the English situation briefly? King
and Fales had about a week's discussion with the British.
Then the British said, "We will have to go to our principals
and find out whether they want to go ahead on an income tax
treaty, and if so, along what lines. It will take a while,
ten days or two weeks, because they are busy with the budget."
Well, it was two weeks last Saturday. We have heard
nothing yet. Unless the British are ready to go into it,
really there is no sense in sending anybody else over. If
the British really want to go into it and the war isn't too
hot, I would like to go over.
H.M.JR: All right, sir. Are you on the Hill today?
MR. BLOUGH: No, there is nothing going on there.
The bill comes up on Friday in the Senate for debate. The
present prospects are that things will be very mild.
H.M.JR: Should I do anything about telling George I
am pleased at the way it went through the Committee yesterday,
or not?
MR. BLOUGH: At some stage, I think you should.
H.M.JR: Is today the stage?
MR. D. W. BELL: He is out of town.
MR. BLOUGH: He will be out of town today a nd tomorrow.
158
- 14 -
H.M.JR: Will you keep that in mind?
MR. BLOUGH: Yes. I think after the bill has passed
the Senate it would be a very nice thing.
H.M.JR: Let me know when I should butter him, and
you supply the butter.
MR. O'CONNELL: They report the Public Debt Bill
Friday. You might cover both.
MR. BLOUGH: I have nothing else, sir.
MR. HAAS: I am still looking for a "hot sewer. You
couldn't give us another clue, could you? Some of the boys
will have a nervous breakdown.
H.M.JR: I want to know what the breakdown is on the
four hundred million dollars of non-military work that
they are doing.
MR. HAAS: Oh! Well, they claim all of it fits into
the form of military necessity or--
H.M.JR: Have you seen the justification?
MR. HAAS: Yes, we have their formula which they use,
and here is what we aré doing, but we haven't been able to
unearth anything: We haven't completed them, but we have
covered several stages. For instance, we have taken all
the cities reported by War Production that have large war
contracts. That is one criterion. Then we match the
sewers up and eliminate some of them for those we fear we
have no case against. Then we take the defense housing
areas. If there are sewers in that, we have not much of a
case. But we go through that, and today--well, I know for
California and Texas--you only have four śewer jobs outside
of that. Now, we are looking into that, but we are not very
hopeful that we will get very much out of this thing.
H.M.JR: They have other things besides sewers.
MR. HAAS: We are going to take those up, too.
159
- 15 -
H.M.JR: Why don't you send somebody in the field?
Supposing they say it is a housing thing.
MR. HAAS: That is what we are going to do as soon
as it looks like a suspicious situation.
H.M.JR: Yes, but you say housing--you may go there
and find out they don't need it.
MR. HAAS: You mean even if it is a defense factory
town, and so forth?
H.M.JR: You might say Bridgeport. Well at Bridgeport
the peak of the thing is over. Let's say they are building
a sewer in Bridgeport. They can't claim it, particularly.
MR. HAAS: Well, we intend to have someone go out there
as soon as we got a suspicious area, but otherwise we would
be running all over the country.
H.M.JR: But they are working on it?
MR. HAAS: Yes.
H.M.JR: What other things are you working on?
MR. HAAS: On the one job you gave to us about this
post-war thing, I mean, what the budget is going to be.
Then we are working on this whole financial picture from
now until the end of the year, revising all our estimates
on that. Murphy and his crowd are fooling around with this
whole problem of Federal ratios. We have Likert going on
a new job in Louisville. He is making another effort.
H.M.JR: Get me up a little short report and send it
to me through Charlie Bell, just what is going on in your
shop, will you, please? I would like it by tomorrow
morning.
MR. HAAS: All right.
MR. O'CONNELL: The ad that you mentioned yesterday,
the Safeway ad, made the Congressional Record yesterday, too.
160
- 16 -
The Congressman made a nice little speech pointing out the
implications in terms of price control. It may be more
than a coincidence. It is the same statement that Fred
Smith wrote, and which I sent down to Wright Patman. He
gave it to another Congressman to make for him, but it
was a pretty good job.
H.M.JR: A statement about what?
MR. O'CONNELL: Fred wrote a short statement, a couple
of pages, around the ad of Safeway's.
H.M.JR: I didn't know this.
11
MR. SMITH: It said this was the final proof on
whether or not price control worked. Here was a store
that was obviously making a good living, and yet its
prices were less than a year ago.
MR. O'CONNELL: It is part of our general arrangement
with Wright Patman on which we give him material on occasions.
H.M.JR: He sparked on this?
MR. SMITH: We sent it to Wright Patman. He is now
spreading out, and we are apparently getting some more
Congressmen on his team.
MR. O'CONNELL: This Congressman was a friend of
Patman's named Dilweg from Milwaukee, or Wisconsin.
H.M.JR: Is it in the Record? Will you mark up those
two things?
MR. O'CONNELL: Sure.
H.M.JR: Fred is spreading out, too, isn't he?
MR. SMITH: Getting practically subversive here!
MR. O'CONNELL: He made another good speech yesterday
on this proposed constitutional amendment which Gannett and
his group are sponsoring, limiting inheritance taxes.
161
- 17 -
Patman has made two good speeches on that. I think he is
going to be quite effective in scotching that scheme.
Without any publicity at all, they have had sixteen State
legislatures approve a constitutional amendment which would
limit the income tax amendment in that fashion.
H.M.JR: I tell you what you might do. Why don't
you take Porter out and buy him a luncheon. Isn't he the
man that works with Hannegan?
MR. SMITH: That is right.
H.M.JR: Find out what he is doing. "Well, I wish I
knew you were doing that, he might say, or "I am doing this,"
or "I am doing that."
MR. SMITH: For your own information, every time we do
something like this, we send Hannegan copies so he can
spread it around.
H.M.JR: I still think it would be good to take Porter
around. Do you know him?
MR. SMITH: Yes. I don't know him well; I have met
him two or three times.
H.M.JR: Find out what they are doing.
MR. HAAS: I know him well.
H.M.JR: Do you? From where?
MR. HAAS: Don't you recall him from in the early days?
He was Chester Davis' assistant. ne was at meetings in
the White House in 1933. But I have known him since. That
is where I first ran into him.
H.M.JR: I would like to know him, myself.
MR. O'CONNELL: He worked for Leon Henderson and went
over and worked for Marvin Jones.
MR. WHITE: He is 8. very fine chap.
162
- 18 -
H.M.JR: I think it would be a good idea.
MR. D. W. BELL: I wonder if some place along the line
we should do something about this group that is advocating
the constitutional amendment. They have sixteen States
now to take action in their legislatures.
MR. BLOUGH: We have a memorandum in your hands,
George, to fill in some figures, which pretty well takes
the thing to pieces. I hope it does, anyway. I don't
know to what extent we could make some public use of that,
but that ought to be ready V ery shortly. Some effort is
needed, because you talk to people like--well, I talked to
Beardsley Ruml about this when I was in New York a couple
of weeks ago. He said, "If anybody but Gannettwas back of
this, the businessman would take up with it." They don't
like Frank Gannett.
But Bob McConnell the other day didn't say anything
about this amendment, but he said he thought that twenty-
five percent of the income was about as much as the Govern-
ment ought to count on taking, or something like that. A
lot of businessmen have--
MR. O'CONNELL: Bob is against income taxes, anyway,
on principle. He really is. He is in favor of & spendings
tax as the usual method of taxation. He thinks it is the
only tax, on the basis of what you spend, and not what you
earn.
MR. WHITE: He must have been conferring with Blough.
H.M.JR: Well, don't hurt yourself, Roy.
MR. WHITE: You will hear about him sooner or later.
He is spreading around.
MR. D. W. BELL: About sixteen States have gone on
record, and they have done it very quietly without any
publicity at all. It seems to me--
H.M.JR: That is about all I have.
163
- 19 -
MR. HAAS: May I ask something? Do you have to have
this report from my shop? It is a tremendous mechanical
job putting all these in. We have a project card for
every project in the place. Do you remember those monthly
reports you used to get up? It took several days each
month to put it together. I mean, if you have to have it
tomorrow, we would have to stay here tonight to work it
out.
H.M.JR: No, I don't want anybody to work tonight.
Get it in in a couple of days.
MR. HAAS: O.K., fine.
MR. BLOUGH: For the record, that name is Hazlitt.
164
Regraded Unclassified
AY
17 1944
My dear Mr. Chairwans
I have received your letter of May 12, with which you
transmitted a draft copy of a report proposed to be submitted
by the Joint Committee on Reduction of Nonessential Federal
Expenditures, regarding the ownership and operation of non-
military Government passenger-carrying automobiles.
You request that I furnish you with my coments and
suggestions, and that I indicate by approval of the proposed
report. Since the report as drafted contains certain state-
sents in which I an unable to concur, I regret that I cannot
approve it in its present form.
On page 3, under "Analysis of the Ascords of Certain
Agencies," the report presents what are purported to be
comparative figures relating to the operation of passenger-
carrying automobiles in the Department of Agriculture, the
Department of the Interior, the Department of Justice, the
Treasury Department, and the Tennessee Valley Authority.
As Secretary of the Treasury, I cannot subscribe to
the statement on page 4 of the report, that the Treasury
"did not make particularly good utilisation of its vehicles."
It is not understood how this conclusion could have been
reached, nor is it possible, on the basis of available in-
formation, to confirm the statement that the Treasury's cost
of operation "me the highest of these five agencies named."
The Treasury's average cost of operation, per vehicle, was
$276.29 as compared with the Tennessee Valley Authority's
average of $347.88, and with respect to total expenditures,
the Treasury's total cost of operation was $710,624 as -
pared with $781,215 for the Department of Agriculture and
$812,445 for the Department of Justice. On the basis of
the foregoing figures, it would not appear that the Treasury's
cost of operation was as high as that reported by the other
agencies above-nemed. It is noted, however, that considerable
emphasis has been placed an the average mileage of cars open-
ated by the Department of Justice, which leads - to believe
that certain important factors must have been ignored, inso-
far as the Treasury Department is concerned.
165
- 2 -
AS you know, the Treasury Department's utilisation of
passenger-carrying vehicles is necessitated almost entirely
by the law-enforcement activities of the Bureau of Marcotics,
the Bureau of Customs, the Secret Service, and the Alcohol
Tax Unit of the Bureau of Internal Revenue. You are familier,
I believe, with the type of law enforcement performed by these
agencies, which involves constant activity against criminals
who themselves use motor vehicles as a means of transporting
counterfeit money, smiggled merchandise, narcotics, illicit
spirite, and the like. The pursuit and arrest of these law
violators calls for exceedingly hard usage and constant risk
of wreckage of the Government's automobiles. lie should not
overleok the additional important fact that over 50 per cent
of the automobiles operated by the Treasury are care which
were originally confiscated from law violators. Nearly all
of these cars had already been subjected to hard use by the
persons from whom they were taken, and it naturally follows
that they would be substantially more expensive to operate
and mintain than in the case of new care obtained through
purchase. In most cases the confisented care are in need
of repair before they can be placed in service, and, in
addition, the Treasury must pay the storage charges which
have accumulated on the care while under seisure, all of
which obviously increases the operating costs as compared
with new care acquired by purchase. AB to the number of
cars operated by the Treasury, it is believed that the
existing total represents the sinimm number necessary to
accomplish the law-enforoement programs of the various
bureaus, with due allowance for adequate geographic distri-
bution of the care.
In its analysis of the record of certain agencies, the
report refers to an annual average of 25,279 miles per
vehicle operated by the Department of Justice. In comparing
this figure with the Treasury's average of 11,625 miles per
vehicle, 11 is implied that the oar utilization record of
the Department of Justice is the more favorable. This Do-
partment does not consur in such implication, but would, on
the other hand, regard its om record as the dere favorable.
Since the entry of the United States into the mar, Federal
departments and agencies have been urged to reduce transporte-
tion by moter vehicles to an absolute minimum. To this end,
a goal of 40 per cent below the 1941 mileage - urged. In an
Regraded Unclassified
166
- 3 -
effort to comply with this policy, the various bureeus of
the Treasury Department have reserted to the use of common
carriers in every instance where the latter means of trans-
portation could be substituted for motor vehicles without
serious impairment of eperations. in evident wealmess of
the proposed report, in my opinion, is its failure to clarify
what the Committee regards as "good utilisation of motor
vehicles." In view of the appeal of the Office of Price
Administration for nation-wide conservation of gasoline and
rubber, it would appear to be inconsistent for the Committee
to regard as commendable the recerd of the Department of
Justice in utilising its automobiles to an annual average
of 25,379 miles per vehicle, while the Treasury's average
mileage of 11,625 miles is criticised as reflecting poor
utilisation. It is believed that under the conditions pre-
vailing today, a reduction rather than an increase in the
aileage of passenger-carrying vehicles should be regarded
as the more desirable achievement. I constion this fast only
for the reason that the report, as drafted, might be errone-
ously construed as urging the resumption of high mileage at
a time when equipment, gasoline, and rubber should be care-
fully conserved.
For the foregoing reasons I feel that the Treasury's
record is a good one, and I take pride in the fact that
despite the great volume of additional work imposed by
reason of the Mar, this Department has been able to make
a considerable over-all reduction in its automobile adleage.
It has not been possible, of course, to attain a reduction
of 40 per cent below the 1941 figures, but in the face of
its heavy additional duties, the Treasury has nevertheless
been able to achieve substantial progress, which compares
very favorably with the record of other agencies.
On page e, under the captien "Cenclusions," the Consittee
proposes to recomend "that 8 provision be placed in all apo
prepriation bills which will reduce travel expenditures of
this nature by 40 per cent." I desire to point out, first,
that the report fails to state the basis upon which the pre-
posed reduction would be computed. Moreover, the proposal,
in by opinion, would be far too drastic, since a statutory
reduction of any such preportions would undoubtedly jespardise,
if not impair, the Government's functions.
Regraded Unclassified
167
- 4 -
I an not familiar, of course, with the problems of
other departments and agencies, but there are a number of
factors that should be considered in connection with any
reduction such as that proposed in the report. In w
opinion, this matter is one for consideration by the Bureau
of the Budget and the Appropriations Committees of Congress,
who should be able, after proper inquiry, to determine the
extent to which the various Federal departments and agencies
might be able to curtail their use of motor vehicles without
actual impairment of essential functions.
with further reference to the Committee's "Conclusions,"
I do not feel that I can approve the introductory paragraph,
which implies that the Federal government has been unable
to accomplish any reduction in the operation of its passenger-
carrying vehicles. In comparing the reductions accomplished
by the State governments with the record of the Federal govern-
ment, the fact has apparently been overlooked that while the
State governments are making a splendid contribution to the
Har effort, the Federal government is bearing the major share
of the burden of the present emergency. IS follows naturally,
therefore, that the Federal departments and agencies cannot
at this time curtail their activities in the same proportion
as the State governments.
Certain of the Federal agencies which the report describes
as heavy users of passenger-vehicles, 1.0., the Department of
Interior, the Department of Agriculture, and the Department
of Justice, are engaged in essential activities, such as
the conservation of natural resources, the control of 10ml-
gration, the preservation of the forests, soil conservation,
public power projects, etc., which require extensive use of
passenger-carrying automobiles. I believe it only fair, there-
fere that the Committee, before recommending a reduction in
the activities of these agencies, should grant them an epper-
tunity to appear for the purpose of explaining and justifying
their requirements.
Finally, it is believed that a slight change should be
mde on page 4 of the report, where reference issuado to the
"ntressential passenger travel paid for by the Federal -
ment." Since the travel reported by this Department, and, I
presume, by other Federal agencies, was essential in every
respect, it is suggested that the use of the word "nenessential"
be avoided in this connection.
Regraded Unclassified
168
- 5 -
I shall appreciate your consideration of the foregoing
suggestions. If the report could be revised to meet these
objections, I shall then be pleased to give it my approval.
Very truly yours,
w. / W. I
Secretary of the Treasury.
Honorable Harry F. Byrd,
Chairman, Joint Committee on Reduction
of Nonessential Federal Expenditures,
Congress of the United States,
Washington, D. C.
- -
-
FROM MORTH CABOLINA, VICE COMPRAR
- -
-
ALLEN T. TREADWAY. DEPRESENTATIVE FROM MASSACHUSETTS
1
1
- COMPER. REPRESENTATIVE FROM TENNESSEE
1 1 1 di I
CLARCICE CARROL REPRESENTATIVE FROM -
-
I 1 I I I
-
currer & - REPRESENTATIVE FROM -
1.
- TAMEL REPRESENTATIVE FROM BEW -
Congress of the United States
A
1
1
a. SECRETARY # - TREASURY
JOINT COMMITTEE ON REDUCTION OF NONESSENTIAL
- - - If TM - or - INDECT
FEDERAL EXPENDITURES
- L - CLESS
CREATED PURBUANT TO SEC. m. or THE REVENUE AGT or -
May 12, 1944
r
Honorable Henry Morgenthau, Jr.
The Secretary of the Treasury
My dear Mr. Secretary:
I am enclosing a copy of the Committee's
report on Ownership and Operation of Nonmilitary
Government Automobiles. I would appreciate your
comments, suggestions and approval.
I hope it can be presented to Congress
early next week.
With kindest regards.
Cordially yours,
Hany 7. fum
AS
Regraded Unclassified
170
[COMMITTEE PRINT]
0
78TH CONGRESS)
2d Session
SENATE
REDUCTION OF NONESSENTIAL FEDERAL
EXPENDITURES
ADDITIONAL REPORT
OF THE
JOINT COMMITTEE ON REDUCTION
OF NONESSENTIAL FEDERAL EXPENDITURES
CONGRESS OF THE UNITED STATES
PURSUANT TO
SECTION 601 OF THE REVENUE ACT OF 1941
OWNERSHIP AND OPERATION OF NONMILITARY
GOVERNMENT AUTOMOBILES
MAY - (legislative day, MAY -), 1944.-Referred to the Committee
on Appropriations and ordered to be printed
-
UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1944
THIST
THE
ПТАИЗИ
MS
JASHIER 30
тяочзя
NITT NO
70 тито
LETTER OF TRANSMITTAL
CONGRESS OF THE UNITED STATES
40
JOINT COMMITTEE ON REDUCTION OF NONESSENTIAL FEDERAL EXPENDITURES
CONGRESS OF THE UNITED STATES,
CREATED PURSUANT TO SECTION - OF THE REVENUE ACT OF 1941
JOINT COMMITTEE ON REDUCTION OF
HARRY FLOOD BYRD, Senstor from Virginia, Chairman
NONESSENTIAL FEDERAL EXPENDITURES,
ROBERT L. DOUGHTON, Representative from North Carolina, Vice Chairmen
May -, 1944:
SENATE
HOUSE OF REPRESENTATIVES
The VICE PRESIDENT,
WALTER F. GEORGE, Senator from Georgia.
ALLEN T. TREADWAY, Répresentative from
Massachusetts.
United States Senate, Washington, D. C.
ROBERT M. LA FOLLETTE, JR., Benstor from
Wisconsin.
JERE COOPER, Representative from Tennessee.
SIR: In accordance with title 6 of the Revenue Act of 1941, Public
CARTER GLASS, Benator from Virginia.
CLARENCE CANNON, Representative from
Law No. 250, Seventy-seventh Congress, as chairman of the Joint
KENNETH McKELLAR, Senstor from Tennes-
Missouri.
CLIFTON A. WOODRUM, Representative from
Committee on Reduction of Nonessential Federal Expenditures, it
see.
GERALD P. NYE, Senator from North Dakota,
Virginia.
gives me pleasure to present to you an additional report of this
JOHN TABER, Representative from New York,
committee, which I ask that you lay before the Senate of the United
f
HENRY MORGENTHAU, JR., Secretary of the Treasury
States, with a view to its being printed as a Senate document.
HAROLD D. SMITH, Director of the Bureou of the Budget
Respectfully submitted.
II
HARRY F. BYRD, Chairman.
III
without odt of VAM Feeb evitabligal) - YAM
Badring and 02 benefino birn my
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additament
REPORT ON THE OWNERSHIP AND OPERATION OF
FEDERAL AUTOMOBILES
In accordance with title VI of the Revenue Act of 1941, Public Law
250, Seventy-seventh Congress (55 Stat. 726), an additional report
herewith is presented by the Joint Committee on Reduction of Non-
essential Federal Expenditures.
Two previous investigations by this committee on the nonmilitary
operating costs of passenger automobiles, owned and operated by the
United States Government, have shown that substantial economies
can be effected by eliminating all nonessential automobile travel by
officials and employees of some 40 agencies of the Federal Govern-
ment. In the committee's two reports to the Congress it was obvious
that the travel expenses of the various Government agencies were
extravagant beyond measure and that the justifications for such
expenditures should be carefully scrutinized by the Appropriations
Committees of the House and Senate. From facts presented to the
committee, it is evident that a substantial reduction in these expenses
can be made in the executive branch of the Government.
The committee herewith presents to the Congress a third report
on the total number and operating costs of automobiles owned and
operated respectively by the various Government agencies, exclusive
of those used by the War and Navy Departments.
f
GOVERNMENT COOPERATION NEEDED
The Office of Price Administration has repeatedly called upon the
civilians of the Nation and upon the officials of the various State
governments to cut their mileage by 40 percent. It appears that both
of these groups have substantially complied with this request. On
the other hand, the record of the Federal Government shows that it
has only cut its mileage by 10 percent. The committee desires to
emphasize this fact, for if the nonmilitary departments and agencies,
of the Federal Government had fully complied with the request to
cut mileage by 40 percent there would have been enough gasoline
available to send 1,000 Flying Fortresses over Berlin for a 1-week
period, or enough gasoline to operate 1 entire motorized division of
the Army for a 2-week period.
THE RECORD OF THE PAST 2 YEARS
Upon investigation the committee found that in the fiscal year
1943 executive agencies of the Government owned 1,788 more cars
than they did for the previous fiscal year. The committee is glad to
repòrt that there was & decrease of 1,845,605 in the number of gallons
of gasoline used in these automobiles, but it is convinced that further
In
prices.
and
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this?
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II
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cannot
be
decreas
that
2
REDUCTION OF NONESSENTIAL FEDERAL EXPENDITURES
REDUCTION OF NONESSENTIAL FEDERAL EXPENDITURES
3
reductions in the number of gallons of gasoline consumed by Govern-
ment-owned cars can be made.
owned and operated by such agencies. This statement is based on
While most civilians were severely restricted in the use of their
reports on reduction in official travel by State governments to the
Office of Price Administration.
automobiles through gasoline and tire rationing, the reduction in
miles traveled in automobiles owned or operated by the executive
For example, the Federal Government agencies reported a saving
branch of the Government was only 10 percent. The greater part of
of 12,736,680.5 miles for the fiscal year 1943. The State of Con-
the civilian population would have felt fortunate indeed if they could
necticut alone, for the same period, reported a reduction of about
have driven 10 percent of the peacetime mileage to which they were
17,000,000 miles. While agencies of the United States Government
accustomed. While civilian car owners were thus restricted, Govern-
effected & saving of a little more than 5 percent, the State of Con-
ment cars were driven about 90 percent of their 1942 mileage.
necticut reduced its mileage figures by 56 percent, a typical and not
an isolated instance.
Specifically, many of the cars of Government agencies traveled
greater mileage than they did before the paramount need for conser-
Figures on 8 other States are equally significant. New Hampshire
vation of automobiles, tires, and gasoline developed.
reports a reduction in official mileage traveled of 5,000,000 miles or
The committee wishes to restate its conviction that the same stand-
64 percent; South Carolina, 20,000,000 miles, or 60 percent; North
ard of strictly essential driving should be applied to Government
Dakota, 5,000,000 miles or 48 percent; South Dakota, 3,500,000 miles,
officials and employees traveling in nonmilitary Government auto-
or 47 percent; Nevada, 2,500,000 miles, or 45 percent; New Mexico,
mobiles as is now applied to invididual citizens. On the basis of a
6,000,000 miles, or 42 percent; Idaho, 2,363,000 miles or 41 percent;
comparison of 1942 and 1943 figures, the committee concludes that
and Washington, 5,000,000 miles, or 40 percent. Thus, the savings
these steps are not being undertaken as conscientiously as they
of official miles traveled is about 66,000,000 miles for these 8 of the
48 States, a record more than 5 times better than that of the executive
might be,
branch of the entire Federal Government.
INCREASED NUMBER OF CARS OWNED
At the close of the fiscal year 1943, the Federal Government owned
ANALYSIS OF THE RECORD OF CERTAIN AGENCIES
19,093 passenger automobiles. This figure excludes those operated
The committee is convinced that it would be worth-while economy
by the War and Navy Departments and also excludes trucks and
to examine the number of automobiles, the miles driven, the number
motorcycles. This is & substantial increase over the fiscal year 1942
of gallons of gasoline consumed, and the cost of operation in the 5
figures of 17,305 cars.
Government agencies which own more than 1,000 vehicles, exclusive
In the fiscal year 1942, the cost of operating these vehicles, exclu-
of the War and Navy Departments.
sive of interest charges and depreciation, was $4,243,602. In the last
The committee found that during the 1943 fiscal year the Depart-
fiscal year, the figure was $3,941,557, a reduction but not a substan-
ment of Agriculture owned more cars than any other Government
tial one.
agency.
Comparing the miles traveled by Government automobiles in the
5.
The Departments of Agriculture, Interior, Justice, Treasury, and
fiscal years 1942 and 1943, the committee found that in the former year
the Tennessee Valley Authority together own 15,288 of the 19,093
mileage on these Government-owned or rented passenger automobiles
automobiles owned and operated by the various agencies in the execu-
totaled 203,550,280 miles, and in the latter year, 190,813,600 miles.
tive branch of the United States Government. The Department of
Federal Government agencies effected some savings in the consump-
Agriculture on June 30, 1943, owned 4,559 passenger automobiles.
tion of gasoline in both of these fiscal years. The amount used by
The average mileage driven in each of these automobiles was 8,795.7
Government-owned cars in the fiscal year 1942 was 13,793,594 gallons.
miles, which consumed, per car 523.15 gallons of gasoline. The cost
In the fiscal year 1943 gasoline consumption amounted to 11,947,989
of operation for each of these passenger vehicles for the Department
gallons.
of Agriculture was $171.36
In balancing these figures with the restrictions placed on the
Next in the list of the largest owners of automobiles in the execu-
civilian population, the committee finds that while there were some
tive branch of the Government comes the Department of the Interior
reductions in the cost of operating these nonmilitary vehicles, the
with 3,936. For this Department, the committee finds each auto-
number of gallons of gasoline used, and the number of miles driven,
mobile traveled 7,953.8 miles and consumed 491.65 gallons of gasoline
these reductions, the committee is certain, are neither substantial,
per vehicle. The cost of operating these passenger automobiles on
nor impressive. It is the opinion of the committee that the increase
an average equaled $154.23.
in the number of motor vehicles owned by the Federal Government
The Department of Justice, the third largest owner of automobiles
agencies is wholly unwarranted.
among Government agencies, possessed at the end of the fiscal year
1943, 3,204 passenger automobiles. Analyzing the figures, it is seen
COMPARISON OF FEDERAL AND STATE CONTROL
that this Government department makes the greatest utilization of
the automobiles that it owns in that these cars traveled on an average
The committee finds that there is nothing special about the work of
of 25,379 miles and consumed 858.3 gallons of gasoline. This im-
some Federal Government agencies that would not permit drastic re-
proved utilization of automobiles by a Government agency resulted
ductions in the number of miles traveled in Government automobiles
in a higher cost of operation per vehicle, i. e., $253.57.
over
REDUCTION OF NONESSENTIAL FEDERAL EXPENDITURES
REDUCTION OF NONESSENTIAL FEDERAL EXPENDITURES
5
At the end of the last fiscal year, the Treasury Department owned
2,572 passenger vehicles. The ayerage mileage traveled by these
The Department of the Interior, at the end of the last fiscal year,
cars was 11,623 miles while the gasoline consumption was 737 gallons
had 27 more cars than it did at the end of the 1942 fiscal year. The
per automobile. In this Department, which did not make particu-
Department of Justice closed the last fiscal year with 837 more
larly good utilization of its vehicles, the cost of operation was the
automobiles; the Treasury Department, 67; and the Tennessee Valley
Authority, 257.
highest of these five agencies named. The average cost of operation
In all fairness the committee is aware that some increase in the
of the vehicles owned by the Treasury Department was $276.29.
The Tennessee Valley Authority owned 1,017 cars. These vehicles
number of automobiles in 8 Government agency, such as the Depart-
ment of Justice, is justifiable due to the numerous and varied activi-
operated by that agency traveled on the average 10,030.18 miles and
ties of the Federal Bureau of Investigation, but it sees no reason for
consumed 669 gallons of gasoline. The average cost of operation for
a 400-percent increase in the number of cars owned by the Selective
the automobiles operated by this department was $347.88.
Service System.
A more striking comparison was noted by the committ in the aver-
age number of milos that each of these vehicles was able to gat out of
PRESENT CONTROL SYSTEM FAILS
each gallon of gasoline. The Departme of Agricultura automobiles
averaged 16:813 miles per gallon; Interior, 16.179 miles par gallon;
Under the terms of Circular No. 422 of the Bureau of the Budget
Justice, 15.368 miles per gallon; Treasury, 15.762 miles per gallon, and
all departments, independent establishments, and agencies, except
Tennessee Valley Authority, 14.992 miles por gallon.
the War and Navy Departments, the Maritime Commission, and the
The committee observed that in the fiscal year 1942 the average
War Shipping Administration, are required to submit to the Public
Government car traveled 14.757 miles per gallon of gasoline, while a
Roads Administration pertinent information concerning Government-
year later the average Government car traveled 15.97 miles per gallon.
owned vehicles, In the course of its investigation the committee was
Considering the average Government car for the fiscal year 1942 and
notified that the system of reporting was not being carried out effec-
tively by all the agencies. Some failed to supply the exact infor-
the average Government car for the fiscal year 1943, the committee
finds that for the former fiscal year each car traveled 11,762.5 miles
mation requested and others delayed sending in the information until
and consumed 797 gallons of gasolino, while in the latter fiscal year
it was of no value to the controlling agency. To further aggravate
the situation, it was found that the information now gathered by the
each car traveled 9,993.9 miles and used 625.77 gallons of gasoline.
Public Roads Administration failed to meet the needs of the Office
The average operating cost for the fiscal year 1942 was $245.22 and
of Price Administration, thus necessitating the setting up of a separate
$206.44 for the fiscal year 1943.
system.
These figures do not tell the entire story of nonessential passenger
It is the opinion of the committee that when information on a
travel paid for by the Federal Government. It is a recognized fact
subject as important as this one is compiled only on an annual basis,
that Government departments allow employees to travel and be rew
its value is nowhere as great as it would be if the agencies were re-
imbursed for expenses incurred in privately owned automobiles. Em-
&
quired by law to supply this information on a quarterly basis. Thus,
ployees on official business are paid on aimileage basis. In the fiscal
if the committee had known that in the first quarter of the fiscal year
year 1942, 5 agencies report that they paid employees $7,261,856.32
1944 the Federal Power Commission effected a reduction of 66 percent
for 145,606,241 miles.
in miles traveled over the same period in 1941, while the Federal
It is evident to the committee, therefore, that much more Govern-
Communications Commission's savings totaled only three-tenths of
ment travel was done in private automobiles, also at Government
1 percent, at that time it could have taken steps immediately to deter-
expense. It is difficult to supervise traveling habits of officials and
mine if the Federal Power Commission or any other agency had
employées of the many bureaus of the Federal Government which
developed an adequate system of reducing travel in Government-
result in wasteful expenditures of this nature. A conservative esti-
owned cars. In this way prompt attention could have been given the
mate of the total number of miles traveled on Government business
problem of travel expenditures in Government-owned passenger auto-
at Government expense in passenger automobiles is still between
mobiles, while most agencies, to give this matter any serious consider-
400,000,000 to 500,000,000 miles per year with an accompanying
ation at all, either were failing on a quarterly or an annual basis.
consumption of between 25,000,000 and 35,000,000 gallons of gasoline.
CONCLUSIONS
INCREASE IN NUMBER OF AUTOMOBILES OWNED
It is apparent that the Federal Government is in the embarrassing
The committee finds that it is particularly extravagant for non-
position of urging the State governments and its citizens to drastically
military Government agencies to have purchased more than 1,700
cut down on the use of automobiles, the consumption of gasoline and
new automobiles in the last fiscal year. Again taking the examples
tires, while it is unable to see that its own employees do likewise and
of the 5 largest owners of automobiles among the Government depart-
set an example.
ments, the committee finds that the Department of Agriculture has
1. The committee recommends once again that any Government
200 additional automobiles. This, the committee is certain, is
official or employee who uses or authorizes the use of any Government-
entirely wasteful in these days when it is extremely difficult for the
owned or leased vehicle other than for official purposes shall be sum-
average citizen to obtain a, new automobile.
marily removed from office, and may, also, upon conviction thereof,
6
REDUCTION OF NONESSENTIAL FEDERAL EXPENDITURES
REDUCTION OF NONESSENTIAL FEDERAL EXPENDITURES
7
be subject to a fine of not more than $1,000, or imprisonment for not
D
Nonmilitary automobiles (passenger) owned by the U. 8. Government-aummary of
more than 1 year, or both.
operating costs and mileage by departments, fiscal year 1943-Continued
2. The committee recommends that the Appropriations Committees
of Congress carefully survey the need for passenger cars owned by each
Vehicles as
Number
Cost of
Agency or department
of June 30,
Miles driven
gallons pm-
opera-
of the agencies of the Federal Government and adjust accordingly the
1943
oline used
tion
appropriation requested for such cars as are necessary.
3. The committee recommends that the various agencies consider
Veterans' Administration
257
2,059,600
158,075
$46,110
War Manpower Commission
10
56,800
8.611
937
establishing merit raises for employees who suggest successful ways of
War Relocation Authority
339
8,095,700
227,539
58,380
Office of Censorship
X
268,900
18,256
4,951
decreasing the use of Government-owned automobiles, saving gasoline,
and reducing the cost of operation.
Total
19,093
190,813,600
11,947,989
3,941,557
Fiscal year 1942
17,305
203,550,280
13,793,504
4,243,602
4. The committee recommends that the Bureau of the Budget study
methods of operation of the agencies which get the most miles per
gallon and have the lowest cost of operation and which make the
o
best use of their automobiles in order to determine if some standard
operating procedures might not be profitably adopted by all Govern-
ment agencies.
5. The committee recommends that the Congress enact legislation
requiring all Government agencies, except the War and Navy Depart-
ments during wartime, to report to the Public Roads Administration,
each quarter, the number of passenger automobiles owned, the number
of miles traveled, the number of gallons of gasoline consumed, the
cost of operation, and all other information which is now required by
the Office of Price Administration.
6. That a provision be placed in all appropriation bills which will
reduce travel expenditures of this nature by 40 percent.
Nonmilitary automobiles (passenger) owned by the U.S. Government-summary of
operating costa and mileage by departments, fiscal year 1948
Vehicles as
Number
Cost of
Agency or department
of June 30,
Miles driven
gallons par-
opera-
1943
oline used
tion
Department of Agriculture
4,559
40,000,700
2,385,080
$781,215
Department of Commerce
725
9,125,500
526,640
167,081
Department of the Interior
3,938
31,322,100
1,935,028
607,370
Department of Justice
3,204
42,260,900
2,749,944
812,445
Department of Labor
6
32,900
2,796
1,206
Post Office Department
49
200,300
24,019
13,105
Department of State
159
693,000
37,595
12,322
Department of Treasury
2,572
29,898,500
1,896,919
710,624
Board of Economic Wazfare
6
59,900
5,305
2,000
Bureau of the Budget
3
20,700
2,080
547
Civil Aeronautics Board
20
305,000
17,807
5,959
Federal Communications Commission
176
2,302,700
137,889
38,10
Federal Power Commission
15
121,600
6,620
1,964
Federal Security Agency
588
5,609,700
346,409
100,053
Federal Works Agency
624
6,291,500
361,538
96,708
General Accounting Office
2
8,800
830
104
Government Printing Office
4
24,200
2,072
1,174
Interstate Commerce Commission
133
1,240,900
68,633
Library of Congress
20,455
2
13,900
863
126
Maritime Commission
44
248,000
16,830
4,545
National Advisory Committee for Aeronauties
33
381,300
National Archives
28,545
8,996
1
5,400
400
88
National Capital Park and Planning Commission
1
7,000
491
8
National Housing Agency
Office of Defense Transportation
283
1,522,400
99,114
38,644
2
20,300
1,073
DRE
Office for Emergency Management
Office of Strategie Services
79
639,800
48,415
13,533
Office of War Information
26
270,600
23,095
8,905
Panama Canal
8
39,200
2,860
1,103
2
Petroleum Administration for War
8,000
747
183
Railroad Retirement Board
21
218,700
12,5%
2,365
Reconstruction Finance Corporation
3
36,700
3,380
1,393
Securities and Exchange Commission
22
859,100
20,534
5,109
Selective Service System
1
2,700
260
83
Smithsonian Institution
120
1,676,100
92,204
19,334
Tennemen Valley Authority
1
4,800
478
a
1,017
10,200,700
680,381
353,803
171
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
Date 5/17/44
TO Secretary Morgenthau
FROM Mr. O'Connell
MA
Attached is the short statement Congressman
Dilweg made on the floor of the House yesterday.
As I told you, it is the statement we sent to
Congressman Patman. Congressman Patman called
me yesterday and told me he had given the state-
ment to Dilweg.
You may not care to take the time to read
it, but there is also attached a statement by
Congressman Patman with respect to the consti-
tutional amendment sponsored by Frank Gannett's
Committee for the Constitutional Government, Inc.,
which would limit income and inheritance taxes
to 25 percent. It's well worth reading.
J.J.O'C.J.
Regraded Unclassified
172
HON. LA VERN R. DILWEG
OF WISCONSIN
IN THE HOUSE OF REPRESENTATIVES
Monday, May 15, 1944
Mr. DILWEG. Mr. Speaker, we have
discussed for some weeks now the pros
and cons of price control. We have
heard its virtues extolled, and we have
heard the opposition's attempt, with all
the eloquence at Its command, to prove
that price control has not worked. We
have been treated to endless facts and
figures, many of them conjured up more
to prove a point than to reveal an exist-
ing situation.
I have contended since the beginning
that price control has worked extraor-
dinarily well, in the face of great diffi-
culties; and that it has stabilized our cost
of living with remarkable efficiency. It
has lessened the impact of war on this
country to such an extent that the op-
position is inclined to claim that we
faced no danger in the first place. This,
of course, is a far-fetched Idea, and we
need only to look to those other coun-
tries without efflicient price-control
methods, and see that the cost of living
has doubled, trebled, quadrupled or
multiplied so many times that only the
wealthiest people can afford even the
most common living requirements.
I have an exhibit I want to show you
today which, in my estimation, proves
beyond doubt the efficacy of our price-
control methods. It is not a document
conceived and written by an economist;
It is not a voluminous analysis by a gov-
ernmental department: it is not a politi-
cally inspired screed. Mr. Speaker, what
I have to show you today is nothing more
or less than a newspaper advertisement,
which I tore out of the Evening Star last
Monday-an advertisement for a grocery
store.
This advertisement lists 330, articles-
meats, soaps, coffee, household needs,
canned soups, canned vegetables-all the
things a housewife needs to run her
home.
The prices of all these 330 articles
added together total $69.64, as of May 8,
1943-a year ago: and do you know what
the price of the same articles is as of,
May 8, 1944-last Monday? The total
price as of last Monday was $69.10-54
cents less than a year ago.
Now, this store surely is not running
at a loss, yet they are selling the same
goods they sold last year, not for more
money but for less money.
What does that mean? It means that
the United States Government has done
so excellent a job of holding down the
prices of goods at the wholesale levels
that this store can hold down its retail
prices, and even in a few cases reduce its
prices, and still make money.
What better proof can we have than
this? This is fact. It is experience. It
cannot be denied that price control has
worked.
173
HON. WRIGHT PATMAN
FOUNSERS OF COMMITTEE
OF TEXAS
Let us look specifically into the back-
IN THE HOUSE OF REPRESENTATIVES
ground and early history of this organ-
ization, the Committee for the Consti-
Monday, May 15, 1944
tutional Government, Inc. Let us see
Mr. PATMAN. Mr. Speaker, I de not
who founded this committee originally
contend that anyone who does not agree
and who runs Its affairs today for all
with me is a Pascist. I know a lot of
practical purposes.
old dealers would like to have us say
I have in my hand a booklet put out
by this committee. It bears a copyright
that, but I do not say it.
mark of the year 1944 and is therefore
As far as Mr. Frank Gannett is con-
recent enough for these purposes,
cerned, he is advocating B very damag-
This booklet says that in the organiza-
tion's early days it was known as the
ing amendment to the Constitution of
the United States. That amendment, if
National Committee to Uphold Consti-
passed, will restrict even inheritance
tutional Government, and was origi-
taxes to 25 percent; all gift taxes, estate
nally headed by Mr. Frank Gannett, as
taxes, incomes, corporate as well as In-
chairman, and that "to finance the com-
dividual, will be limited to 25 percent.
mittee's first operations, Mr. Gannett
That means we will never pay off the
advanced a considerable sum before any
war debt; we will never be able to pay,
cash came from the public."
more than the carrying charges. That
The booklet, a little further on, then
means that small business will be de-
says:
stroyed, because big business could keep
As of January 21, 1940, former Congress-
so much of their proñts that they could
man Samuel B. Pettengili succeeded Mr.
run all small businesses out of exist-
Gannett as committee chairman.
ence. It would mean there would be no
A little further on, the text says:
aid to veterans. The veterans' aid laws
The old committee (meaning the National
now on the books would have to be re-
Committee to Uphold Constitutional Gov-
pealed. There would be no aid to our
ernment) decided early in 1941 to disband.
servicemen. There would be no social-
But many of its supporters, saying "we have
security benefits. We would only have
just begun to fight," were determined to
enough money to pay the interest on the
put the work on a more solid and permanent
national debt and the running expenses
footing. The Committee for Constitutional
of our Government.
Government, incorporated under the laws of
Bo, I say It is a very dangerous and
the District of Columbia, with Samuel B.
Pettengill as chairman and president, be-
Pascist-inspired amendment to our Con-
gan functioning in April 1941.
stitution.
DISORACEFUL AND INSIDIOUS PLOT
Therefore the new group is a continu-
ation of the old one.
A few days ago, May 11, I made men-
CHAIRMAN OF REPUBLICAN FINANCE COMMITTEE
tion of a foul and un-American conspir-
A LEADER
acy which is all too close to being foisted
upon this Nation. I refer to the dis-
Mr. Pettengill continued as chairman
graceful and insidious plot to secure pas-
of the committee until early 1943 and
held that office during 1942 at the same
sage through the legislatures of our set-
eral States of the so-called twenty-sec-
time that be also held the office of Chair-
ond amendment to the United States
man of the Republican national finance
Constitution.
committee, according to information
supplied me through the office of Mr.
CONTRESS WILL HAVE NO RECOURE
Spangler, chairman of the present Re-
This proposed amendment has now
publican National Committee.
been endorsed by the legislatures of 16 of
AMEND AND THEN UPHOLD CONSTITUTION
our sovereign States. Under article 5 of
the Constitution, If 36 of our States ex-
Although the old committee (the Na-
tional Committee to Uphold Constitu-
press their approval of this program
tional Government) was technically dis-
through their legislatures, the Congress
banded in 1941, practically without ex-
has no recourse but to act as & clearing-
house for the amendment's formal
ception its same officers and members
of its board of advisers were named in
ratification.
similar capacities with the successor
VICTOUS PROGRAM RPONSORED BY GREEDY GROUP
group the present Committee for Con-
If this amendment was only sponsored
titutional Government, Inc. Mr. Gan-
by persons whose reputation for patriot-
nett and Mr. Pettengill made the switch
ism and clear thinking was above re-
and are still listed as members of the
proach and these sponsors were people
board of advisers of the Committee for
with whom others could sit down in n-
Constitutional Government. They prob-
tional discussion and sift through the
ably decided It did not look so well to
arguments, pro and con, I would possibly
advocate amending the Constitution be-
not be as genuinely alarmed about this
fore upholding it.
matter as I actually am. The true facts
FASCEST GROUP
in the case, however, are that a little
The gentleman from Illinois asked me
group of greedy men who place love of
why I chose to call this organization a
personal gain above love of their coun-
Fascist group. Due to limited time, 1 only
try's best interesta are sponsoring this
answered him briefly, Today I would
victous program.
like to direct your attention to one man
Let no man who reads the printed
whose connection with this committee is
literature of the organization which
an established and admitted fact. This
sponsors this plan believe that such is
man, who has been described by the
not the case.
present acting head of the committee,
2.
174
Dr. Peale, as "an expert on machinery of
SUMELY CONVICTED FOR OFFENSE COMMITTED
organization" is, in my opinion, the real
DURING WORLD WAS NO. 1
directing head of the organization in its
manifold slimy and viclous activities and
Time will not permit me to dwell over-
is the man principally responsible for the
long on Dr. Rumely at this time. For
phenomenal progress which the organi-
those who wish to know his record in
zation has made in distributing Its thou-
World War No. 1, they have only to
sands of propaganda pieces and making
check the official court records of the
such a successful presentation to the
Federal Circuit Court of Appeals-two
various State legislatures before men-
hundred ninety-three Federal 532, ap-
tioned.
proximately page 500 and thereafter--
for a description of the crime for which
AN EXPERT ON FASCISM ONE OF LEADERS
he was tried and sentenced to serve a
This man, aided and assisted by a once
year and a day in the Atlanta Federal
respectable newspaperman, one 8. 8. Mc-
Penitentiary. For those who do not
Clure, whose record shows that he spent
know the details, let it suffice for me
2 years In Italy studying the workings of
to say that Dr. Rumely was tried and
fascism in that country, has for more
convicted for accepting the sum of more
than 25 years worked often in the name
than a million and a quarter dollars from
of McClure to accomplish those things he
the German Imperial Government for
did not feel free to advocate in his own
use by him in this country during World
name. Even with this willing and cor-
War No. 1 and for failure to report his
rupted stooge, this man could not pos-
connections with Count von Bernstorff
sibly have accomplished what he has thus
and Dr. Heinrich Albert, the paymasters
far succeeded in doing without the aid of
of the Kaiser on all espionage matters at
the free-flowing purses of Mr. Gannett
that time.
and his other rich and greedy friends.
GANNETT ORGANIZED WITHOUT ANY ORGANIZA=
I call your attention to one Dr. Edward
TION MEETING
A. Rumely, originally the cofounder with
Let me read to you a little from the
Mr. Gannett of the National Committee
actual testimony of Dr. Rumely when he
to Uphold Constitutional Government
appeared before the Select Committee
and the executive secretary of that com-
mittee until the engle eye of a senatorial
of the United States Senate Investigating
Lobbying Activities in 1938. The date
committée brought his present activities
and sordid World War No. 1 record once
was March 18, 1938. The interrogator
was Senator Sherman Minton, the chair-
more before public notice.
man of the select committee. The ex-
Incidentally, I have been informed
change was as follows:
since speaking May 11, that If I ex-
The CHAIRMAN. What is your business now?
pected to link the Committee for Con-
Mr. RUMELY. I am working with Mr. Frank
stitutional Government with Dr. Rum-
E. Gannett of Rochester, N. Y.
ely, I would be making a grievous error
The CHATEMAN. Doing what?
because, they said, "Dr. Rumely severed
Mr. RUMELY. Acting under his direction as
his connection with that organization
executive secretary of a committee that be
several years ago." Such is far from the
organized.
The CHAIRMAN. What in the committee,
case.
Doctor?
RUMELY IN DIRECT CHARGE OF NEW YORK OFFICE
Mr. RUMELY. The National Committee to
I hold in my hand a photostatic copy
Uphold Constitutional Government.
of a letter signed by Mr. Homer Dodge
The CHAIRMAN. How long have you been
in response to a letter addressed to the
with this committee?
Committee for Constitutional Govern-
Mr. RUMELY Ever since it was organized.
The CHAIRMAN. Did you attend the organi-
ment. Mr. Dodge's reply. which is dated
mation meeting?
September 4, 1943, is written on the
Mr. RUMELY. Why. there was no organiza-
stationery of the Committee for Con-
$ton meeting. Mr. Gannett formed is. He
stitutional Government. He says as fol-
put out & statement. And then he saled me
lows in reference to the activities of the
to cooperate in handling the mailings, and
committee:
doing executive work under his direction.
The principal office is in New York-and to
FINANCES 00 TO ROCHESTER, N. X.
in direct charge of Dr. Edward A. Rumely,
Then again, let me read from the testi-
assistant secretary. The Washington office to
mony of Mr. Glen Hancock before the
used chiefly for the collection of information
same senatorial committee on March 23,
in which the Committee finds interest.
1938. Mr. Hancock identified himself as
You will therefore see that Dr. Rumely,
the assistant secretary of the National
the evil spirit; Frank Gannett, the money
Committee to Uphold Constitutional
and power-loving rich man Pettengill,
Government and stated that his su-
the Republican money raiser and the
perior was Dr. E. A. Rumely. The testi-
Fascist expert have been and still are the
mony went as follows:
sinister influences which control the
The CHAIRMAN. Do you keep the financial
destinies of this flag-waving, but Nation-
records in New York?
destroying Insidious organisation.
Mr. HANCOCK. No. As far as I know, they
are kept in Rochester.
3.
175
The CHATEMAN. Who keepa them?
Mr. HANCOCK. Bo far as 1 knew, the assist-
Remember, Vivian Kellems, who re-
ant secretary.
fuses to pay her Income taxes and asks
The CHAIRMAN. Who 18 the assistant secre-
other people to do the same is one of
tary?
their platform orators.
Mr. HANCOCK. & Mr. Franklin.
I realize that these words of mine are
The CHAIRMAN. His first name, please.
but general charges. It is not my inten-
Mr. HANCOCK. Y am unable to say. 1 do
tion to let my case rest here. In a few
not recall."
The CHAIRMAN. But be does not stay to the
days I propose to submit to the House
New York office?
more cold facts and figures to further
Mr. HANCOGN. No.
support the assertions which I have just
The CHAIRMAN, And It in your informa-
made.
tion that he keeps the records in Rochester?
I am inserting herewith n. statement
Mr. HANCOCK. Yes, sit.
appearing in the CONGRESSIONAL RECORD
The CHAIRMAN. And no récords are kept in
in 1938:
the New York office?
Mr. HANCOCK. No records of that nature.
THE NATIONAL COMMITTEE TO UPHOLD
CONSTITUTIONAL GOVERNMENT
Then again, on April 20, 1938, one
(Extension of remarks of Hon. Lewis B.
Sumner Gerard, who identified himself
Schwellenbach, of Washington, in the Ben-
as treasurer of the National Committee
ate of the United States, Thursday, April 14
to Uphold Constitutional Government
(legislative day of Wednesday, January 5),
and who is at present the very active
1938)
letter-writing treasurer of the Commit-
Mr. SCHWELLENDACH. Mr. President, the
tee for Constitutional Government, Inc.,
Portland Oregonian is one of the oldest news-
testified before this same senatorial
papers on the Pacific coast. It is and has
been conservative and Republican in its
committee.
polley. Because of this background, the edi-
Mr. Gerard, after acknowleding that
torial printed in that newspaper on April 7
he had been requested to bring certain
on the National Committee to Uphold Con-
financial information which is custom-
stitutional Government is of particular in-
arily in the possession of any organiza-
terest. I ask unanimous consent that It may
tion, testified that be never handled the
be printed in the RECORD.
funds of the organization. He testified
There being no objection, the editorial was
that such checks as happened to reach
ordered to be printed in the RECORD, as fol-
lows:
him personally by mistake were immedi-
"MISSUIDED EFFORT
ately turned over by him to Dr. Rumely.
"The so-called National Committee to Up-
whom, he stated, he believed sent the
hold Constitutional Government has done
money on to a Mr. Franklin in Rochester.
and is doing vast harm to the movement to
Mr. Franklin, he said, he believed to be
a certified public accountant employed
prevent passage of the reorganization bill in
Its present mischievous form. Through high-
by Mr. Frank Gannett.
pressure propaganda methods, directed first
Thus we see that the man of money
at Senators and now against Representatives,
handles the moneys which are contrib-
it is hurting the cause it seeks to help.
uted to this organization by, in many
"The voluntary sending of telegrama and
instances, well-intentioned persons
letters of protest to Benators and Representa-
whom I fear have been misled as to the
tives by individuals or groups who sincerely
real and underlying purposes of this
fear the effects of the proposed legislation
efficient and definitely sinister propa-
upon constitutional government is one
thing. That kind of effort is legitimate and
ganda machine.
right. But the organizing of a mass cam-
I am now in the process of securing
paign directed by a highly paid secretary to
certain additional information on this
flood Congress with thousands of telegrams
organization, Its purposes, and its execu-
prepaid by the organizera bears an aspect
tive personnel. I propose to submit this
that la repugnant to fair-minded people.
additional information to the Congress
There is altogether tuo much of & show about
It of attempted coercion and of vast expendi-
at an early date and to show, beyond the
tures of money by sources not in the open.
shadow of any reasonable doubt to any
Even If disclosures regarding this campaign
Congressman and citizen that this dia-
do not actually cause passage of the bill,
bolical group, this sinister syndicate
there are bound to be later repercussions in
composed of a czar of Journalism, a con-
lobbying Investigations.
victed enemy agent, a Republican money
"This Dr. Rumely, who fronts for the Na-
raiser, and a Fascist expert, all of whom
tional Committee to Uphold Constitutional
have clasped and been clasped to the
Government, is not much of an asset to any
bosom of a great political party, are
worthy public movement. He served a Jall
sentence back in the war years for having
pressing upon this country a program
made false statements to the Alien Property
which can only lead to & return to feudal
Custodian in connection with his purchase
practices, pauperism for the many, and
of control of the New York Mall in 1915 with
power and riches for the few. What is
money furnished by BD agent of the German
this, I ask, but one step removed from the
Government. Burely ainotre opposition to
day when the rabble-rousing orator and
the pending reorganization bill could have
the ignorant few who have followed for
found a better manager than he."
promise of reward move into the driver's
I am also Inserting another statement
seat, even then throwing aside those
appearing in the CONCRESSIONAL RECORD
who have devised this nefarious million-
in 1938:
aire's scheme, and throw this country
Mr. GARMETT'S COMMITTES
into the chaos and confusion which pre-
(Extension of remarks of Non. Bherman Min-
ceded the accession to power of men like
ton. of Indiana, in the Benate of the United
Hitler and Mussojini? What is this but
States, Monday, March 29 (legialistve day
fascism of the rankest sort swathed in
of Wednesday, January 5). 1938)
its infant's clothes?
176
Mr. MINTON. Mr. President, I ask unsni-
mous consent to have printed in the Appen-
were too numerous to mention, and the
dix of the RECORD an editorial published in
amounts each kicked in were almost all small
said he.
the Capital Times, of Madison, Wis., in the
issue of March 23, 1988.
"We are not astonished, therefore, that Mr.
There being no objection. the editorial was
Gannett should fly into a rage at the Benate
ordered to be printed in the RECORD, as fol-
Lobby Committee and shout about such tré
lows:
relevant matters as 'the sanctity of the home,"
"THE PROBE OF MI. GANNETT'S COMMITTEE
even though nobody la threatening the sanc-
tity of anybody's home or Mr. Gannett's
SHOULD GO or
"freedom of thought.'
"The loudest squawk of the week is coming
"The Capital Times hopes that the Senate
from the headquarters of the so-called Na-
Lobby Committee, now chairmaned by Sens-
tional Committee to Uphold Constitutional
tor Bherman Minton, of Indiana, will con-
Government, Publisher Frank Gannett's anti-
tinue its investigation of Mr. Gannett's prop-
New Deal propaganda outfit that spent large
aganda organization and exercise its full au-
sums of money fighting the Supreme Court
thority to bring out the facts.
reform bill last year and is now engaged.
"They should make interesting reading,
tooth and nail, in & costly assault on the
judging from the extreme reticence of the
President's plan to reorganize Federal depart-
National Committee to Uphold Constitutional
ments.
Government to make them public."
"The reason for the loud lament is this:
The Senate lobby investigating committee
There is inserted herewith an excerpt
has recently come to life and is Inquiring into
from a tax letter, as follows:
the identity of the interesta behind certain
TRYING TO SNEAK THROUGH AMENDMENT TO
lobbying groups in the Nation's Capital. The
CONSTITUTION
National Committee to Uphold Constitu-
tional Government has come under the lobby
ENDICOTT, N. Y., March 27, 1944.
committee's searchlight.
DEAR TAXPAYER:
"Whereupon Mr. Gannett, in a furious
Most serious of all, a. lobby, or pressure
statement widely circulated this week by his
group, working for the interesta of large tax-
propaganda agency, declares that "the In-
payers, is trying to eneak through an amend-
famous Black committee of the United States
ment to the Constitution limiting Income
Benate is again at work in an effort to de-
taxes after the war to 25 percent of 8 per-
stroy one of the most vital liberties of the
son's income. This will not SATE you money;
American people-the sanetity of their homes,
It will cost you money, because what the
the freedom of their thought, and the pri-
wealthy save will be levied on the broke.
The wealthy, whose fair share of taxes, even
vacy of their papers."
before Pearl Harbor, had been set from 25
"Actually, Mr. Gannett's committee was
to 90 percent of their incomes, will save
asked by the Senate investigators to produce
huge sums of money which the Government
records showing the committee's source of
will need to win the peace and provide em-
funds and other pertinent Information to
ployment for the veterans. You will have to
which Congress and the public in certainly
pay for this lost revenue by & sales tax,
entitled. An organization that proposes to
which will be the inevitable result. As a tax-
advise lawmakers what to do and what not to
payer having a net income of under 65,000
do should surely operate out in the open and
and spending by far the larger part of your
not behind the anonymity of a high-sound-
earnings for food and goods, you will be hit
Ing title.
hardest by 6. sales tax. Again you will be
"A subpena issued by the Senate investiga-
carrying the tax byrden for the wealthy who
tors was served on the executive secretary
will be literally having A "piggy-back ride"
of the Gannett organization, one Dr. Rumely.
on your shoulders. This lobby just falled by
That gentleman, on the advice of a former
the wilmmest of margins, but do not doubt
Hearst attorney, defied the Benate commit-
for a minute that they won't try again.
tee and refused to produce the records.
During wartime It to necessary to pay more
taxes. However, It is becoming increasingly
"While the Senate probers consider bring-
evident that the tax increases are being
Ing contempt proceedings against Rumely, the
thrust upon the smaller taxpayers while
facts about the National Committee to Up-
special interesta and upper-bracket taxpayers
hold Constitutional Government remain a
are not only escaping their just share of the
secret.
tax burden through the existence of loop-
"The Capital Times la not surprised at the
holes in our present law which Congress has
Gannett committee's refusal to reveal its sig-
refused to close but are also seeking further
nificant background. Some months ago this
relief at your expense.
newspaper in an open letter challenged Mr.
Very truly yours,
Gannett to make public the names of the
JOHN J. DAPOLITO.
individuals and organizations who financed
MARVIN 8. TANENHAUS.
its obviously expensive propaganda campaign.
"Mr. Gannett's reply was angrily evasive-
The SPEAKER. The time of the gen-
the contributors to his propaganda jackpot
tleman has expired.
177
SEATING ARRANGEMENT
for
LUNCHEON FOR MENDES FRANCE
Wednesday, May 17, 1944
White
Wolcott
Spence
France
Bell
H.M.Jr.
Monnet
Jones
Crowley
Szymczak
178
LUNCHEON FOR MENDES FRANCE
Wednesday, May 17, 1944
Secretary Morgenthau
M. Pierre Mendes France, Commissioner of Finance
of the French Committee of National Liberation
Mr. Jean Monnet, Commissioner at Large, French Committee
of National Liberation
Mr. Jesse Jones, Secretary of Commerce
Mr. M. S. Szymczak, Member of the Board of Governors
of the Federal Reserve System
Mr. Leo Crowley, Administrator, Foreign Economic
Administration
Congressman Brent Spence, Chairman, House Banking and
Currency Committee
Congressman Jesse P. Wolcott, Ranking Minority Member
House Banking and Currency Committee
D. W. Bell, Under Secretary of the Treasury
Dr. Harry White, Assistant to the Secretary of the
Treasury
179
LUNCHEON FOR MENDES-FRANCE
Wednesday, May 17, 1944
Secretary Morgenthau
M. Pierre Mendes-France
Jean Monnet
Jesse Jones
M. S. Szymczak
Leo Crowley
Rep. Spence
Rep. Wolcott
D.W.Bell
Harry White
180
May 17, 1944
2:35 p.m.
HMJr:
If you weren't an Ambassador, I'd ask you where
you slept last night.
Ambassador
Winant:
(Laughs)
HMJr:
But being an Ambassador
W:
All right, one of your people was responsible.
I got up very early. I want you to know I got
out at seven-thirty.
HMJr:
But having ex-territorial rights, I have no
right to question you.
W:
(Laughs) As a matter of fact, I was with one of
your fellows
HMJr:
You were?
W:
talking about New Hampshire politics.
HMJr:
I see.
W:
(Laughs)
HMJr:
Well, I tried to get you. I spoke to them last
night and they said that they were going to put
you in to see the President first because the
President wanted to get your report.
W:
I see.
HMJr:
And I would have to wait
W:
I see.
HMJr:
until he had seen you first.
W:
I see.
HMJr:
And that was the message that Miss Tully gave me.
W:
I see.
HMJr:
And then I spoke to her again this morning and
she said she appreciated it and -- but that you
would see the President before me, alone.
W:
I see.
Regraded Unclassified
181
- 2 -
HMJr:
So, I said that was quite proper and I would
wait, so that's where it stands.
W:
I see. Well, I'm to see him tomorrow at
eleven.
HMJr:
Yes.
W:
All right.
HMJr:
Well, then, he may or may -- I have received
no word yet.
W:
I see. All right.
HMJr:
You're seeing him at eleven.
W:
All right, Henry.
HMJr:
He wanted to see you first alone.
W:
I see. All right, Henry.
HMJr:
Thank you.
W:
Thanks ever so much and I'll report to you as
soon as I leave there.
HMJr:
Fine.
W:
All right.
HMJr:
Bye.
W:
Thanks for calling.
182
MAY 17 1944
Gentlement
From the beginning of this wer your Club has, I
understand, turned over all its facilities for war
service. As Secretary of the Treasury, I know that
your members have helped us to sell War Bonds for
many millions of dollars; end on your Silver Anniversery
you are pledging even greater support to the Fifth Wer
Loan Drive.
Our Wer Loan Program does double duty in girding
the people for successful achievement in the coming
attack. It not only provides the Government with
funds urgently needed to buy more guns, tanks, planes
end ships, but also it performs an added service in
helping civilians to stand eside in the marketplace for
scarce manpower and materials, putting their money to
work for a more plentiful future instead.
Please accept our sincere thanks for your help.
Sincerely,
(Signed) Henry Morgenthau, Jr.
The Mercantile Club of Beltimore,
Baltimore, Maryland.
JLH:hsh
air mail
Regraded Unclassified
INSPECTIONS
E.MILTON ALTFELD
CHAIRMAN
SENATE OF MARYLAND
ANNAPOLIS, MARYLAND
Office address: 1311 Munsey Building
Baltimore 2, Maryland
May 10th, 1944
Hon. Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
Dear Mr. Morgenthau:
You will recollect that I had the pleasure of being
introduced to you by Governor O'Conor on the platform when you ad-
dressed the Business Colored Men's Association at the church in
Baltimore recently.
The Mercantile Club of Baltimore, consisting of
three hundred business and professional men, are going to cele-
brate its Silver Anniversary on Saturday evening, May 20th, at
the Hotel Belvedere. Since the commencement of the war our Club
has practically turned over all its facilities for war service.
So far our members have sold Ten Million Dollars worth of bonds.
Coincidental with our Silver Jubilee, we propose to inaugurate
the Fifth War Loan Bond Drive.
lie are having an elaborate printed program but
what we should like is to have a brief message from you on the
importance of buying bonds. This message we will print on the
back cover of our beautiful silver embossed program.
I should esteem it, as well as every member of our
Club, a high privilege to have this message from you. I think it
would stir much interest in the War Bond Drive and generate con-
siderable enthusiasm for the cause which we are so deeply and
vitally interested.
The program is in process of being printed and I
would appreciate receiving your message immediately.
Sincerely yours,
ε mieton actibled
b. MILTON ALIFORD
Regraded Unclassified
184
MAY 17 1944
My dear Mr. President:
I have your memorandum of May 11, 1944, returning
& proposed Executive order entitled "Inspection of In-
come, Excess-Profits, Declared Value Excess-Profits,
and Capital Stock Tax Returns by the Special Committee
on Un-American Activities, House of Representatives"
authorising the Special Committee on Un-American Acti-
vities, House of Representatives, or any duly authorised
subcommittee thereof to inspect certain returns.
You inquire as to whether the proposed Executive
order opens to the Special Committee the right to see
anything they want under any of their own resolutions.
The Special Committee was authorized by House
Resolution 282 of the 75th Congress, 3d Session, passed
May 26, 1938, to conduct an investigation of "(1) the
extent, character, and objects of un-American propaganda
activities in the United States, (2) the diffusion within
the United States of subversive and un-American propa-
ganda that is instigated from foreign countries or of a
domestic origin and attacks the principle of the form of
government as guaranteed by our Constitution, and (3)
all other questions in relation thereto that would aid
Congress in any necessary remedial legislation."
Each subsequent Congress has authorized the Special
Committee to continue such investigation and provided
that for such purposes the Committee should have the
House Resolution 282 of the 75th Congress. H. Res. 26,
same power and authority as that conferred upon it by
76th Congress; H. Res. 321, 76th Congress; H. Res. 90,
77th Congress; H. Res. 420, 77th Congress; H. Res. 65,
78th Congress.
Regraded Unclassified
185
- 2 -
Prior Treasury decisions implementing Executive
orders relating to the inspection of returns by the
Special Committee on Un-American Activities, as well as
the Treasury decision accompanying the proposed Executive
order, provide that such returns shall be open to in-
spection by such Special Committee or any duly authorized
subcommittee thereof "for the purpose of carrying out
the provisions" of the respective House resolutions.
Under prior Executive orders this Department has
never questioned the authority of the Special Committee
to inspect the returns mentioned in such Executive orders.
It has been assumed that such Committee's inspections
have been in conformity with the purpose for which it
was established. From an administrative point of view,
it would not be feasible for the Department to establish
to its own satisfaction the relationship of each parti-
cular return inspected by the Special Committee to the
purposes for which the Special Committee was established.
If, however, the Special Committee on Un-American Acti-
vities were to adopt a resolution inconsistent with the
purposes named in House Resolution 282 of the 75th
Congress, the inspection of returns under such resolu-
tion would not be authorized under the proposed Executive
order.
The papers are returned herewith.
Faithfully yours,
(Rigned) H. Morgenthau, Jr.
Secretary of the Treasury.
The President,
The White House.
Enclosures.
Regraded Unclassified
186
THE WHITE HOUSE
WASHINGTON
May 11, 1944.
MEMORANDUM FOR
THE SECRETARY OF THE TREASURY:
Doesn't this proposed executive
order open to the Dies Committee the right
to see anything they want under any of
their own resolutions? I think it goes
awfully far.
F.D.R.
Regraded Unclassified
187
The following were also returned
to the President:
Unsigned Executive Order
TD approved by HMJr
SUMMARY OF ATTACHED MATERIAL
The documents herewith are responsive to the request of
the Special Committee on Un-American Activities for the issu-
ance of an Executive Order permitting inspection of income,
excess-profits and cenital stock tax returns. The request 1s
based on House Resolution 65, adopted February 10, 1943,
authorizing the Committee to continue its activities. The
documents include, in addition to the Executive Order requested,
a Treasury decision regulating the inspection, and a detailed
explanation from the Secretary of the Treasury. The Executive
Order and Treasury decision have the same effect as the previous
Executive Order issued and Treasury decision approved on
December 9, 1942, except AB e different Resolution of A differ-
ent Congress 18 involved.
Regraded Unclassified
189
STATE
Office of he Attorney General
Washington,B.C.
May 1, 1944
Through Division of the Federal Register.
The President,
The White House
My dear Mr. President:
I am transmitting (1) a proposed Executive order
entitled "Inspection of Income, Excess-Profits, Declared
Value Excess-Profits, and Capital Stock Tax Returns by the
Special Committee on Th-American Activities, House of
Representatives", and (2) a Treasury Decision signed by the
Secretary of the Preasury, prescribing regulations governing
the inspection of the returns to which the order applies
The proposed order, presented by the Secretary of
the Treasury and forwarded for my consideration by the
Acting Director of the Bureau of the Budget by letter of
April 20, 1944, has my approval as to form and legality.
Respectfully,
received INCOMIN
HarmiN PM MA
Attorney General
THE NATIONAL
MAIL SECTION
Regraded Unclassified
130
GC:L&R:PAV
A-390359
Through the Bureau of the Budget
Through the Attorney General
Through the Division of Federal
Register
My dear Mr. President:
I herewith submit to you for your considera-
tion with the recommendation that it be approved,
a proposed Executive Order permitting the Special
Committee on Un-American Activities to inspect
income, excess-profits, declared value excess-
profits, and capital stock tax returns made under
the Internal Revenue Code and prior revenue acts,
beginning with the Revenue Act of 1932. This
inspection is to be made in accordance with regu-
lations prescribed by me and approved by you. A
proposed Treasury decision making applicable such
regulations is likewise submitted.
The Special Committee on Un-American
Activities was appointed under authority of House
Resolution 282 (Seventy-fifth Congress, third
session), passed May 26, 1938. Continuance by
Regraded Unclassified
191
-2-
the Committee of its activities was authorized by
resolutions adopted in the Seventy-sixth and
Seventy-seventh Congresses. Inspection of returns
was authorized by several Executive Orders, each
supported by a Treasury decision approved on the
same date, as follows: Treasury Decision 4849,
approved July 14, 1938; Treasury Decision 4900,
approved May 11, 1939; and Treasury Decision 5200,
approved December 9, 1942.
On February 10, 1943, the House agreed to
House Resolution 65 which authorizes the Committee
to continue the investigation begun under authority
of House Resolution 282 of the Seventy-fifth
Congress. The Committee under date of March 17,
1944, requested that an Executive Order be issued
permitting it to inspect returns made under the
Revenue Act of 1932 and subsequent revenue acts.
The proposed Executive Order and Treasury
decision now submitted for your consideration have
the same effect as the last prior Executive Order
and Treasury decision, except that the present
192
-3-
documents cover the activities of the Committee
pursuant to House Resolution 65 (Seventy-sighth
Congress, first session), adopted February 10,
1943.
Faithfully yours,
"
(Signed) H. Mergenthaw, Jr.
Secretary of the Treasury.
The White House.
PAV/Mew 3-24-44
193
OFFICE
OF
TREASURY department
WASHINGTON
THE
SECRETARY
May 17, 1944
M
MEMORANDUM TO THE SECRETARY:
Met with Special Committee on Redistribution,
Removal and Disposal of Surplus War Property,
Automotive Council for War Production, to acquaint
them with the disposal problem in the field of
automotive equipment and to ask their assistance
in setting up an advisory committee. They will
send a list of names within two weeks. The auto-
motive men present stressed the fact that we will
have considerable quantities of surplus equipment
which must be sold as scrap.
Office of Defense Transportation will provide
us with a map showing the relative need for trucks
in the 142 districts into which this Office divides
the country. The map will be changed as the relative
need changes in any important degree. We can use this
map as a general guide in disposing of trucks.
when
Fland
E. L. Olrich
Assistant to the Secretary
Invould you like set to this see map it
the
194
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
the
DATE
Secretary Morgenthau
TO
May 17, 1944
FROM Fred Smith PS
You will be interested in the analysis of editorials on
the Montgomery Ward case.
Please note that there was an average of more than one
editorial for each paper read by the OWI, and that 70% of
these editorials were critical of the Government.
I think Mr. Roosevelt should insist upon having a good
public relations man on hand whenever Biddle takes any action.
The stupid way in which he went about taking over Ward's is
obviously a chief reason for the violent reaction. He also
has a nasty habit of blaming the President when anything goes
wrong.
195
DIVISION OF RESEARCH
BUREAU OF SPECIAL SERVICES
Office of War Infornation
May 12, 1944
This ANALYSIS OF EDITORIAL OPINION No. 48 -
is propared primarily
for the Offico of Ear Mobilization. It covers 796 oditorials
on a solocted list of topics alished betwoon April 18 -
May 9, 1944, and distributed a bollows:
Pago
Topic
Number of Editorials
2
Tho Montgonory Ward Caso
409
10
Relaxation of Mont Antioning
60
12
Economic Stabilization Issues
288
15
"The G. I. Bill of Rights"
39
TOTAL
796
Sourco: Tho oditorials were provided by the Division of Pross
Intolligonco, OWI, from thoir linstor Subscription
List of 369 daily nowspapers.
Regraded Unclassified
196
-2-
THE MONTGONERY WARD CASE (CONTINUED)
Critical of Government's Position. 70%
Period covered: April 26 - May 6, 1944
Neutral, or Critical of Both
Number of editorials: 409
Government and Ward's
25%
Approval of Government's Position
The previous analysis of editorial comment on the Ward case (Edit-
Solocted sampros or comment unter each of the abovo catogories
orial Analysis, No. 47) was based on a sample of editorials of
follow:
which the greater number had been written prior to the presenta-
A. Critical
tion of the Government's and the company's briefs before Federal
Judge Holly and bofore the crystalising of Congressional moves
to investigate. The earlier analysis cited the clustering of
"Violates Spirit of Constitution" (Syracuse, N. I., Post
comment around the five following issues: (1) individual freedom
Standard)
vs. governmental control, (2) executive authority in wartine,
"No Limit?
(3) the wartine responsibilities of individuals and groups,
(4) the legitimacy and limits of WLB's ordors, and (5) the war-
relatedness of Ward's business, Continuing concern over these
"Even if Mr. Avery's stand should sorve no other good
issues is apparent in later comment but the emphasis changes
purpose, it will binofit the nation as a whole by forcing
significantly. Writing against the background of the events
judicial examination of the President's broad judicial
mentioned and the wide publicity given the picture of the soldiers
powors." (Pontine, Mich., Press)
carrying Mr. Avery from the Ward premises, later editorials were
"Avory Is Right" (Wilmington, N. C., Star & News)
most exercised over the issue of executive authority in wartime.
This was a concern not only over the constitutionality or legality
of the authority wielded by the Presidont, but also over the
"The rights of the Amorican poople have boon takon from thom
appropriateness of its uso in this case, and the larger implications
ono by ono on the plea of necessity of war needs, The
of the Government's conduct.
American peoplo cortainly sowed the wind when the Now Doal
was put into powor and now it commoneos to bo ovidont they
In commenting on this question, oditors examined Mr. Biddle's
will roap the whirlwind." (Waterville, Mo., Sentinel)
statements setting forth the basis and extent of the President's
powers. The great majority took 1ssue with Mr. Biddlo or expressed
"What Attornoy Genoral Biddlo in arguing, in offect, is
that the Prosident in wartino has the right to do just
grave concern. In addition a considerable number castigated the
man and his rocord. Biddle W&B variously tormod:
about what ho pleasos regardless of tho writton body of
law and without ovon the courts to say him nay.
"No, 1 Ja! Jal man" (Now York Daily Mirror)
"Tho Supromo Court has had somothing to say on just that
"Synthetic Himmlor" (Savannah, Ga., Nown)
point and it said it with undoniable vigor, In tho
femous 'Ex Parto Milligan' docision handed down by
"The most radical Attorney-General since. James Spoed."
Abraham Lincoln's great friend, Judgo Davis, the Court
(Richmond, Va., Name Leader)
said that military tribunals must not suporcodo whore the
civil courts are open, It clearly comminated this great
"Jeffroys do Richelieu Biddle" (Groon Bay, Wis., Pross Gasette)
principlo which 10 portinent right now, (Providonco,
R. I., Journal)
1, Executivo Authority: Validity of Its Uso and Implications.
"Porhaps circumstances might have lopod that would
In this particular samplo of oditorials,90 percent ovaluated the
have justified tho government in using forco in ordor
Administration's handling of the Hard case and the Attorney
to guarantoo continued oporations of the big mail ordor
down: Gonoral's rationale. A rough tabulation givos the following break-
business, but to us it sooms apparent that all the moans
to bring this about had not boon exhausted whon fodoral
authoritics word ordered to tako over its operations.
Regraded Unclassified
197
1/6
-5-
Cortainly there should have boon an appeal to the courts bo-
of production was ossontial to early victory.
foro troops were novod in, not after thoy had takon chargo
It also was rogrottable that, Biddle decided that it was
"Wo roitorato that position. Howover, wo shall havo to
necessary to ordor soldiors to ojoct Sowoll Avory
admit that in giving that support the idoa novor occurred
(Paducah, Ky., Sun Domocrat)
to us that 'var industrios' included the business of a
Chicago mail ordor house.' (Syracuse, N. Y., Horald-Journal)
"It marked the first timo on tho Amorican mainland sinco
Cornwallis and his British laid dom thoir guns and
B. Noutral.
bayonots to Goorge Washington, moro than a century and a
half ago that bayonets have boon turnod against Amorican
About ono in overy four of the oditorials oithor took a middlo
citizons not charged with or ongugod in any overt criminal
ground, usually cri loising both partios and insisting that wo
act and not over pormitted the processos of the courts."
"got on with the or commonted sololy on non-controversial
(Shrevoport, La., Times)
features of the CABO,
Somo of those oditors who were wont to stross the opic or procodent-
"Tho Ugly Case of Ward's
making character of the case mado & varioty of allusions to
Amorican and Europoan history. Five oditors made reforence to
oxcoption any bo takon to the courso of action of all of
"Ex Parto Milligon, The Lowiston, Mo., Sun averred that the
tho throo partics involved -- the company itsolf, the labor
"tho Prosident's order to Montgomory Ward to mako de now contruct
union and the Government, (St. Louis, 110., Post Dispatch)
with tho labor union ranks in tho same dubious famo with the
Drod Scott docision of 1857," Ono oditor mado roforence to Goorge
"Frankly, wo admit that wo are not truly convinced which
III's invasion of the colonists rights, two to Marbury vs.
party is right in the controvorsy. (Devenport, Iowa,
Madison, and a largo number clludod to Nazion and Italian fascism.
Domocrat and Londor)
Commonting on ono such refortnce, the Louisvillo Timos stated that
"Tho assortion that not sinco King John has a hoad of government
"It isn't sottlod, and sottlod right, by saying this *govorn-
taken similar not in pungont."
mont of laws' has becone government by bayonot.
A sprinkling of tho oditors specifically blaned NLRB and the
"Lot it be sottlod in the courts, lawfully. Division at
Administration for not holding the olsotions soonor, Thoy agreed
this timo plays into the hands of tho onomy. Enough of
with the Rono, Nov., Gazotto that "this imbroglio could have
the supercharged oratory and commont." (Brockton, Moss.,
boon avoided if tho NLRB had -- in January -- takon the action
Entorprise & Timos)
which it finally took yostorday.
,And noanwhile, lot's got on with tho war." (Chicago,
"Failuro to hold the aloction months ago constitutos the
Ill., Nows)
work spot in the Government's position, regardloss of its
powers. It raisos two conjectures. One is as to whother
"Whilo lawyors are studying doop lugal tomos and pro-
tho purpose was to offect a showdownwith tho management
paring briofs and a fodoral judge is pondoring over the
The other in as to whother the dolay vas duo to a look
constitutional questions one mattor of & practical
of propor co-ordination of functions botwoon the War Labor
naturo intrudos: Who word the two unknown soldiors that
Board and the National Labor Relations Board. If (Nowark,
?"
N. J., Evening Nows)
carried Sowoll Avory out of Hontgonory Ward's
(Quincy, Ill., Horold-Whis)
A tabulation of the respectivo positions on the quostion as to
C. Approval or Favorable
whother Ward's in a war industry within the mooning of the
Smith-Connally act showed an overwholmingly largo numbor taking
Those oditorials favorable to the Government's position or highly
a nogativo position a ratio of 12 to 1,
critical of Ward's managomont roitorated and doveloped the thomo
"Evor
sinco
exprossed by the Madison, Wis., Timos:
Docembor
Government program to provent 1941, production stoppagos in war
7,
(w) have supported tho
"In Mr. Avery Biggor Than This Government?
industrios, not bocause wo had any sympathy for somo of the
mothods employed, but because it was cloar that continuity
"Is proporty moro secred than human rights?
198
-6-
-7-
"If the United Statos government can tako human boings, put
Timos Dispotch suggosted. that:
thom in uniform, and order thom to fight this war, porhaps
at the sacrifico of thoir livos, should not the government
co the case of Unclo San vs. Sowell Avery develops,
have tho right to tako over proporty, if necossary, to
the fodoral authorities soom to bo doing a poor job of
pronoto the war offort?
public relations Mr. Roosovolt's supposed suporlativo
MO know of no roason why on arrogant and dofiant
ability to fool the pulso of tho poople sooma to bo going
multi-millionairo liko Sowoll Avory should bo allowod to
back on him,"
do as ho darm plonses and thunb his nono at the Unitod
"Wo boliovo that if the pooplo word told tho issuo at stako,
States government."
they would overwholmingly agroo with tho Prosidont."
The Docatur, Ill., Forald doscribod Mr. Avory as:
(Charlotto, N. O., Nows)
Tho Dotroit Nown connonted that Mr. Biddle's "position that in
tho sort of a man the shouts at public authority,
wartino 'no business or proporty is inmino to a Prosidential
'You can't do this to mo,' Liko most browlors who uso
the phraso, ho askod for it and got it. Sonsiblo mon
order' may be good law but in tho circumstances is vory poor
don't arguo with policonon; thoy yiold to uniformed
politics, as astuto Er. Avory apparontly forosaw."
authority on the spot and tako thoir complaints into
court."
2. The Role and Ro iponsibility of Congross.
"Avory's Martyrdon A. Pharisoo's Pipodroam"
Approximately a third of the aditorials made spocific reforence
to Congross. Thoso statements included oxhortations and appools
"Nover was pioty tioro pathotic or nock horror moro disnal
to not, criticisms of past nots or lock of action and statemonts
than in the frantic offorts of Amorica's nowspapor Pharisoos
pro and con the scopo and nunbor of proposed or activo in-
to paint Sowell Avory (a) as a horo, (b) no a. martyr."
vestigating Committocs.
(Philadolphia, Pa., Rocord)
Thoro was gonoral agroement that Congross should novo to clarify
the Smith-Connally Act. Socio oditors noroly nado a broad suggestion
around Mr. Avory's woll-tailorod figuro and the
sprawling moreantilo ompire that is Montgonery Ward,
in the following voin:
has swirled in the past fow days n. rising flood of monn-
"Yos, Congross had bottor invostigato what has happoned --
Congross ingloss sound and fury from thoir oratorical champions in
lost wo find that ours is a government b/ oxocutivo uso
of troops rathor than c. government by low." (Pittsburgh,
"The most curious foature of this indignant stampodo to
Pa., Pross)
tho defonso of Mr. Avory 10 the insonsitivity of Congross
toward the contompt for its processos ovinced for so long
Howover, othors discussed the norits of the spocific proposals
by its now martyr. For almost ton yoars now the prosident
bofore tho Sonato and the House. Most froquont was the following
of Montgonory Ward has boon dirocting his marked ingonuity
position:
and an exponsivo array of logal brillianco toward the ovasion,
the Sonato has accopted the proposal of Sonator Barkloy
circumvontion or downright dofianco of laws passod by the
that the inquiry include also the nanagement's labor policy
Congross (Louisvillo, Ky., Courior Journal)
and the ovents londing up to the soizuro.
it my bo safoly assuned that the Prosident did. not go
off half-cocked The cry of 'wolf! no longor croates a
"Thoro is, of courso, no roason why all the circunstancos
ripplo in the ovun tonor of Anorican lifo." (Montgonory,
portinent to this nattor should not bo inquired into
Al., Advortisor)
thoroughly, for the information of the public and tho
guidanco of Congross.
Fivo oditors pointod out that the Government's problem was
fundomontally ono of public rolations. Although not as fully
"The primiry objoct of such an inquiry should bo kopt in
favorable as somo of the other aditors, the Richmond, Va.,
nind, howover. It is to dotornino, as wo 800 it, whether
soisuro of this proporty excoods the authority which
Congross intonded to givo..." (Groonvillo, S. O., Nown)
Regraded Unclassified
199
-8-
-9-
"Noithor the House resolution nor the carlior Sonato
"If Now Doal Courts Sustain Soisure of Ward's, Thon Congross
rosclution is designed by its phrasoology to dotormino
Should Act Immodiately to 'Clarify' Statutes
whother the administration excooded its lawful authority."
(Washington, D. C., Stor)
"Congross is, as usual, in the position of boing the only
barrior botwoon the pooplo and nn arrogant and prodatory
Sovoral oditors, agrooing that an investigation would bo desirable,
bureaucracy. If the courts doclino tho protoction which
suggested that one inquiry would bo enough. Undor the hoad
the pooplo have de right to expoct, thon it is up to the
"Duplicato Inquirios" ono papor wont furthor:
national logislature to make the law so cloar and plain that
not ovon a Frankfurter can nisintorprot it." (Knoxville,
Wo sharo this anxioty ovor the rockloss uso of
Tonn., Sontinol)
oxocutivo power, but to also boliovo that the Houso
invostigation is likoly to rosult in a wasto of tino
It is well to noto that such a position as that exprossed abovo
and monoy.
was woll in the minority. The majority of the oditors in
strossing the noed for logal and ordorly proceduro B&W no con-
"Basically, the question raised by this soizuro is a logn1
flict botwoon the two artis of Government but rathor citod thoir
ono. It must bo dotermined by the courts. Thoro 10 ovory
rospoctivo rolos. Specifically, in roaction to the Attorney
Gonoral's statement that undor cortain conditions "tho court
indication that it will bo carriod to the Suprono Court,
which noans that the final docision my not bo known
should not substituto its judgmont for that of the Exocutivo,
boforo noxt your.
they roaffirmod faith in the rolo and authority of the judiciary.
If
"Tho Sonato Judiciary Connittoo was alrondy naking a gonoral
thoro appoars to bo a call for judicial detormination
study of exocutivo orders and diroctivos Sonator McCarran
of this point whother the Prosidential powers givon by
sont an invostigator to Chicago ovon boforo the Byrd
Congross to insure that war industry good on without in-
rosolution. l'onrings will also bo hold by this comittoo,
torruption oxtond also to this caso." (San Francisco,
To instituto a soparato House inquiry is on inoxcusable
Cal., Chroniclo)
wasto of offort Tho procoduro it has chosen servos chiefly
If
If the courts docido it can bo, Congross can exercise
to emphasiso the inofficioncy of Congross as a logislativo
body and thus to distract attontion from the powor-grobbing
corroctivos by changing tho law." (Albany, N. Y. Nows)
proclivitios of the Administration." (Washington, D. c,, Post)
The Louisvillo Courior Journal askod "Why Not Mako This A Roal
Inquiry?"
"Tho Sonato and House aro now roady to onbark upon thoir
invostigations. But TO should liko to suggest a change
of ouphasis. Tho courts are compotent, as the Congross
is not, to docido the quostion of Ward's status as a war
plant and the constitutionality of the Attorney Gonoral's
actions. The Congross may woll rolinquish thoso to the
branch of government appointed by the constitution to do-
cido thon. But it could porform a useful and an oducative
function if it aut itsolf to oxanino tho ontiro picture
of lir. Avery's attitudo to the law of the land as fixod
by the Congross."
Tho above stand tras ochood in Max Lornor's PM oditorial --
"Uninvited Tostinony Boforo An Unformed Connittoe."
A fow of tho oditors oxprossed suspicion of what they tornod
the "Now Doal courts" and for such reasons ophnsized the rolo
of Congross as clarifier of law and protoctor of liborty.
200
th
May 17, 1944
MEMORANDUM FOR THE SECRETARY
From:
Mr. Blough
Subject: Emergency unemployment insurance.
(For your consideration; no present action required)
1. Yesterday Senator George asked the Social
Security Board to present to his Postwar Committee,
within about ten days, any recommendations it may have
for an emergency unemployment insurance program.
2. The position of the Social Security Board
undoubtedly will be that the Federal Government should
set standards and qualifications for the payment of
unemployment insurance benefits under existing law, but
should offer no supplementary compensation and no
assistance to the States unless and until the reserves
which have been accumulated by the States are exhausted.
3. Justice Byrnes (in his recent speech before
the Academy of Political Science) has recommended a
Federally-financed supplement to the present unemploy-
ment insurance law. Both he and the Social Security
Board oppose dismissal compensation.
4. The position of the Treasury Department may be
asked on this legislation. An informal technical
committee 1s examining the problem and we may have a
recommendation to make in a few days.
RB
Regraded Unclassified
201
May 27, 1944
menorandum FOR THE SECRETARY
From:
Mr. Blough
Subject: Emergency unemployment insurance.
(Fer your consideration; no present action required)
1. Insterday Senster George asked the social
Security Heard to present to his Postwar Committee,
within about tea days, any recommendations 18 may have
for as emergency uneuployment insurance program.
2. The position of the Social Security Heard
undoubtedly will be that the Federal Government should
not standards and qualifications for the payment of
unexployment insurance benefits under existing law, but
should offer no supplementary compensation and no
accistance to the States unless and until the reserves
which have been accumulated by the States are exhausted.
3. Justice Byrnes (in his recent speech before
the Academy of Felitical Science) has recommended a
Federally-finaneed supplement to the present unemploy-
ment insurance law. Both he and the Social Security
Beard oppose dismissal compensation.
4. The position of the Treasury Department say be
asked on this legislation. AB informal technical
committee 10 examining the problem and we may have a
recommendation to make is a few days.
5/17/44
Regraded Unclassified
Treasury Department
Division of Monetary Research
202
Date
May 20
1944
To:
Secretary Morgenthau
From:
Mr. White
You may be interested
in glancing at the appended
brief description of the new
Secretary and Under Secretary
of Finance in Italy.
203
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
MA
DATE May 17, 1944
TO
Secretary Morgenthau
FROM Mr. White
HOW
ubject: Quinto Quintieri, Italian Minister of Finance and Antonio
Pesenti, the Under Secretary of Finance
The Allied Control Commission reports that Quinto
Quintieri was appointed as Guido Jung's successor as
Minister of Finance at the insistence of Marshal Badoglio,
apparently on the recommendation of Jung and of Mr. Arturo
Rossignoli, a Jung appointee as General Manager of Bank
of Naples. During the negotiations between Marshal
Badoglio and the six opposition parties in Italy leading
to the formation of the new Italian Cabinet, representa-
tives of the Six Parties had demanded that Guido Jung be
dismissed.
Quintieri belongs to a very wealthy family of land-
owners and is regarded as one of the richest men in Italy.
For many years he has been President of a small banking
institution in Naples, the Bank of Calabria, which has
three branches in Southern Italy. By profession Quintieri
is an engineer and is generally reputed to have consider-
able banking and business ability. He was a member of the
Fascist Party but took no active part. He is a monarchist
in sentiment.
Antonio Pesenti is the present Under Secretary of
Finance. He graduated from the University of Padua in
1931 and studied for three months under a fellowship at
the London School of Economics. He continued his studies
in Vienna where he became a Marxist. On returning to
Italy he became an instructor in economics. He was ar-
rested by the Fascists in 1935 for subversive activities
and sentenced to 24 years in prison. He was released in
July 1943. Since the Armistice he has been one of the
leaders of the Communist Party in Italy, acting as editor
of the Communist Party newspaper.
Regraded Unclassified
204
MAY 17 1944
My dear Mr. Secretary:
This will acknowledge receipt of your
letter of May 13, 1944, concerning the need for
secrecy with reference to the current negotiations
with the Swedish ball bearing manufacturer SKF.
I have discussed this matter with my
staff and I an confident that no information with
respect to these negotiations has been made public
by Treasury representatives. Nevertheless I have
issued Instructions to my staff in accordance with
your request.
Sincerely,
(Higned) W. Morgenthau, Jr.
The Honorable
The Secretary of State
AFL:00 5/16/44
Regraded Unclassified
205
MEMORANDUM FOR THE FILES
Secretary Hull's letter of May 13, 1944 indicates
that some Government representatives have "leaked"
information concerning the current negotiations with
SKF, Sweden.
The undersigned have checked with those members
of their respective staffs familiar with the problem
and are satisfied that no representatives of the
Treasury have disclosed any information concerning
such negotiations.
It should be noted, however, that State, War,
Navy, Justice, F.E.A. and the APC are all participat-
ing in the SKF program too, and that without question
one or more representatives of these agencies have
disclosed information on the subject.
In any event, the undersigned have again instructed
their respective staffs on the subject of secrecy in the
manner suggested by Secretary Hull.
good
- OFFICIAL TO
THE SECRETARY OF STATE
, 1 P
DEPARTMENT OF STATE
WASHINGTON
May 13, 1944
In reply refer to
NOE
SECRET
My dear Mr. Secretary:
I enclose herewith a copy of telegram no. 3804
dated May 10, 1944 from the American Embassy in London
reporting the views of the Ministry of Economic War-
fere with respect to the publicity which has-been
given to the ball bearing negotiations with the
Swedish ball bearing manufacturer SKF.
I fully share the British concern with respect
to the adverse effects of the release to the press
of details of our negotiations with the Swedes with
respect to this matter and the serious prejudice to
our chances of reaching a satisfactory agreement with
the Swedes which has resulted. Accordingly, I am in-
structing officers of this Department to refrain from
releasing any information to the press with respect to
this matter without my express approval which will be
given only after consultation with the other interested
agencies of this Government and the British Government
and after obtaining the views of our negotiators in
Sweden. If you concur with me as to the advisability
of this course of action, I should greatly appreciate
your issuing similar instructions to officers of your
Department to the end that full coordination with re-
spect to this vitally important matter may be achieved.
The foregoing restrictions do not, of course, apply
to appropriate comments with respect to Swedish trade
with Germany in general but only to the negotiations as
such.
I am
The Honorable
Henry Morgenthau, Jr.,
ERVICTORY
Secretary of the Treasury.
BUY
STATES
BoHpa
Regraded Unclassified
-2-
I am sending similar letters to the Secretary of
War, the Acting Secretary of the Navy and the
Administrator of the Foreign Economic Administration.
I am also informing the Embassy in London of my
action in this matter with instructions that the
British Government is to be informed thereof.
Sincerely yours,
Enclosure:
Telegram no. 3804,
London, May 10, 1944.
Regraded Unclassified
DEPAR MENT
INCOMING
DIVISION OF
COMMUNICATIONS
STATE
TELEGRAM
AND RECORDS
VMT-501
London
This telegram must be
paraphrased before being
Dated May 10, 1944
communicated to anyone
other than a Government
Rec'd 10:25 p.m.
Agency. (SC-00)
Secretary of State,
Washington.
PRIORITY.
3804, May 10, 8 p.m.
FOR DEPARTMENT AND STONE, FEA.
Riefler received a letter from Foot, Parliamentary
Secretary of MEW on May 10 as follows: (Reference Depart-
ment's 3221, April 22.
"As you know, we are seriously concerned about the
publicity which has been given to the ball-bearing nego-
tiations with the SKF company. We had certainly assumed
that every effort would be mado to keep secret the fact
that approaches were now being made to the company rather
than the Swedish Government and that nothing would be said
in public about Mr. Stanton Griffis mission. I gathered
at our meeting last week that Mr. Griffis himself was under
the same impression. We were, therefore, extremely per-
turbed to 800 fairly full particulars in the press. I
know well that it is often extremely difficult to keep
the nowshawks at bay and that it is sometimes necessary
to make a statement in order to avoid the publication of
wild surmises. Neverthcless, this publicity is bound
seriously
Regraded Unclassified
⑉2⑉ #3804, May 10, 8 p.m., from London
seriously to prejudice our chances of reaching a satis-
factory agreement, since the Swedish Government cannot
pretend that they have been ignorant of the negotiations.
"We have received a telegram from Stockholm, dated
yesterday, stating that the front pages of all important
Stockholm newspapers carry photographs of Griffis, and
that one paper has a picture of him and Poteat leaving
Wallenberg's house yesterday. Our Minister goes on to
say that the Associated Press statement can only render
delicate negotiations far more difficult. Both he and
Waring feel that this publicity has scriously reduced any
prospects of success.
"I am afraid there can be no doubt that a good deal
of damage has been done. It seems to us most important
that from now until the end of negotiations further pub-
licity should be avoided. In particular, we fool that
the extent to which the company has taken us into its con-
fidence should on no account be revealed. I have given
instructions that no statement rogarding the negotiations
shall be made to the press hore without first being re-
ferred to me. I propose to say nothing excopt that nogo-
tiations are proceeding. Would you consider asking Washing
ton to make n similar arrangement?"
Please adviso urgontly if it is possible to take
parallol action.
WINANT
Regraded Unclassified
210
May 17, 1944
MEMORANDUM FOR THE FILES
Subject: Discussion with Frank Coe concerning the background of the Swedish ball
bearing question.
This afternoon I telephoned Frank Coe and inquired about the history of the
Swedish ball bearing question and the extent to which the military had partici-
pated. The picture given to me was substantially as follows.
(1) At the time the Swedish Trade Agreement was signed there was a strong
group within FEA which felt that it was wrong to enter into an agreement con-
doning substantial exports of critical materials from Sweden to Germany. About
November of last year, shortly after the signing of the agreement, FEA acquired
some information indicating that Sweden was not living up to the spirit of the
agreement. This information apparently supported the group that had not favored
the agreement and caused FEA to feel that the matter ought to be reopened. FEA
raised the matter with State and also brought information supporting its position
to the attention of Secretary Knox through Captain Puleston. Knox wrote a strong
letter to Hull about the matter.
(2) The subject continued to be discussed, and in January the Swedish Trade
Agreement was subjected to re-examination at a series of meetings in which
Rieffler, then back from London, participated. Rieffler represented the British
point of view, which felt the agreement to be a fine accomplishment which should
not be questioned in any way. Apparently Patterson was also interested in the
problem, and General Arnold took an active interest about this time. General
Arnold became so interested that he sent one of his agents up to Princeton to
see Rieffler and to take him to task for his position in the matter. Apparently
as a result of these discussions State finally agreed to consider sending 8.
strong note to the Swedes. The subject was referred to London, however, and
London did not respond favorably to the idea. Both Knox and Crowley protested
to Hull and recommended that action be taken to curtail shipments.
(3) Apparently many conferences were subsequently held with Acheson, the
military fully supporting FEA's position. Coe indicated that Donovan also be-
came interested in the matter and took it to the White House. Finally, about a
week before Hull made his speech (on April 9, 1944) saying that we must crack
down on the neutrals, State and the British agreed that the strongest pressure
should be used on Sweden, including the threat of blacklisting and the suspension
of trade.
(4) Coe said that General Marshall had never shown interest in the problem
or made any recommendations with respect thereto. In fact, Coe indicated that
just recently FEA had been prevented by General Marshall from. stopping a Swedish
tanker.
Schmidt
5/11/44
211
A CALL BY THE HEBREW NATION
FOR HELP IN ITS MORTAL STRUGGLE
FOR LIFE AND LIBERATION
ISSUED BY THE HEBREW COMMITTEE OF NATIONAL LIBERATION
We Hebrews, descendants of the ancient Hebrew Nation, surviving today
on God's earth amidet the dreadful catastrophe of torture and death that has
befallen our people, have joined together in the Hobrew Committee of National
Liberation to dodicato oursolves and our lives to secure the deliverance and
independence of the remaining millions of our desperate people, struggling
for life itself in the vast hell of German-occupied Europe.
What has happened to the Jewe of Europe was not sudden. It 1a the
culmination of centuries of oppression and persecution; centuries of ghot-
toe and pogroms, economic strangulation and endless humiliation and insult.
In this war this cumulative attack has resulted in the staggering
climax of three million innocent men, women and children deliberately mas-
sacred.
In the face of such disaster, the bitter status quo of the Jews in
Europe must give way to a new, bold and total attempt at salvation.
These Jews, today, have no effective protection of citizenship from
any nation. They can no longer be considered Rumanians, Hungarians, Poles,
Germans. Certainly they are not Axie nationals. They are the first and
bitterest enemies of the Axis. They belong to no nation and have no nation
of their own. That is why the murder of three million Jews - & number as
large as the total population of many a European nation - has been possible.
Common disaster brings them together, even as Death has hunted them
together.
We therefore proclaim to the people of this land, and through them to
all civilized men the world over, that the dry and tormented bones of the Jews
in European lands have now been united, that the blood of our three million
dead has done more than fertilize the earth of the people who have mirdered
them. It has molded the survivors into a single living entity. It has brought
forth a renascent Hobrew Nation.
The Jews who live today in the hell of Europe together with the Jewa
of Palestine constitute the Hobrew Nation.
There is no other Nation to whom they owe allegiance but the Hebrew
Nation.
It is as & part of these millions that we exercise the right of self-
determination; that ve proclaim the existence of the Hebrew Nation and its
Regraded Unclassified
-2-
212
determination to speak for itself and its elementary right to be represented
by ito own sons.
We confidently believe that the present day heirs of the American
Revolution will understand, recognize and support us in this mortal struggle
for our life and liberation.
It 1e proper that we have chosen Washington as the site for this his-
toric rededication of the Hebrew Nation as a democracy - Washington, eternal
symbol of democracy and of the greatness of the human epirit and of its revo-
lutionary demand for justice, decency and freedom.
Let it be clearly understood that the Hebrew Committee of National
Liberation does not attempt to speak for the Jewe of the United States. They
are an integral part of the American Nation; an integral part of a nation made
up of people of every descent.
These Jews are Americans of Hebrew descent. They do not belong to Pal-
estine and thereby to the renascent Hebrew Nation any more than Justice Frank
Murphy "belongs" to the Irish Nation, or General William Knudsen "belongs" to
the Danish Nation; though both certainly are proud of their ancestry.
And let there be no confusion because the vast majority of Americans
of Hebrew descent are faithful adherents of the Jewish religion.
Hebrews and Jewe are not synonymous terms. Religion and State are
separate. The common adherence of members of the American Nation and of the
Hebrew Nation to the Jewish religion 1s no different than the common adherence
of Americans and Germans to the Protestant religion; or the common adherence
of Americans and Italians to the Catholic religion. Everywhere in the world
people share religions without sharing nationhood. The people of the Hebrew
Nation, and Americans of Hebrew descent, whose religion 1a the same, are no
different from the others. They still are members of different states.
#
We proclaim that Palestine, in its historic boundaries, 18 the terri
tory of the Hebrew Nation by the will of God as was set forth in the Bible.
In our own time this was politically ratified by fifty-two nations who, in
1922, "recognized the historic connection between the Hebrew people and Palestine.
Although it 18 the national territory of the Hebrews, Palestine is to
be & free state in which the present Arab and other non-Hebrew residents of
the land will share full equality and privileges of citizenship and government;
will be full partners in the upbuilding of & free country and a democratic
civilization.
In the present condition of our Nation, we are dedicated primarily to
only one task - the rescue of our people. Wo, therefore, proclaim that the
Hebrew Nation postpones the settlement of the political and boundary problem
of Palestine until after victory when, as one of the United Nations, we hope
to partake in the post-war settlement of political territorial problems. Un-
til that time ve shall cooperate and assist Great Britain as the Mandatory
for Palestine.
Regraded Unclassified
-3-
21
We do, however, insist, in the name of humanity, that the right and
the ability of all Hebrews in Europe to find shelter in Palestine be facili-
tated by the Mandatory Power, lest it be guilty of sacrificing them to their
ruthless German murderers.
We proclaim the Hebrew Nation & co-belligerent in the United Nations
war against Axis tyranny. Our dead, who have bloodied the steps of civiliza-
tion, can no longer be considered useless victims of insane massacre. They
are honored casualties in the United Nations common war for freedom. Our sur-
viving four million people in Europe are prisoners of var, and the Interna-
tional Red Cross should do everything it can to succor them even as it deals
with all other prisoners of war.
But not all of our people have been victims.
We have contributed more fighters to the common struggle than most of
the United Nations. Thousands of our men have fought and are daily fighting
the enemy - whether as Hebrew guerrilla unite harassing the enemy's lines in
Poland and Yugoslavia; whether in the numerous underground sabotage groups,
or as regular fighters and commandos as part of the 30,000 Hebrews who are
serving in the Palestinian regiments, and in other units of the Middle Eastern
British Army. They have fought and died all the way from El Alemein to Cassino,
and from Syria to Addis Abbaba.
Because we are, in fact, a co-belligerent against the Axis, we con-
sider ourselves one of the United Nations and seek recognition as such, and
as the nation against which more atrocities have been committed than against
all the other United Nations combined we surely should be represented on the
Inter Allied Commission on War Crimes.
We also seek & seat on the Board of the United Nations Relief and Re-
habilitation Administration and all other United Nations councils in which
the interests of our nationals are involved.
In addition, the tens of thousands of Hebrew fighting men should now
be given the elementary right to fight the Nazis under their own banner and
in their own name - as the Hebrew Army - with a status comparable to that of
the armies of the other Nations which have been overrun by the Nazis.
These are the minimum needs of our nation at a time when the very
existence of its people 1a at stake. Their denial by the United Nations would
be contradictory to the very aims for which the war 1s being fought; would be
a defeat of Justice now and in the future; would be an endless threat to Peace
in the world of tomorrow. For in ignoring the principle for which the war 18
being fought, we can cheat no ono but ourselves and our children.
The Hobrew Nation can no longer endure the status quo. An intoler-
able whirlpool of death and disaster has shattered this status quo. There
1a a limit to the blood and suffering any people can endure.
Regraded Unclassified
214
-4-
It 1e in this spirit of desperation, and with humility and reverence
that we of the Hebrew Committee of National Liberation have undertaken to be
the servants and spokesmen of the Hebrew Nation, until such time as our Na-
tion shall be free to elect its own spokesmen and representatives in a demo-
cratic form. We solemnly swear to serve our Nation with all our energies and
might, and not to falter if we should need sacrifice life itself, 80 help us
God.
Washington, May 17, 1944.
215
THE HEBREW COMMITTEE OF NATIONAL LIBERATION
2315 Massachusetts Avenue, N. W,
Washington, D. C.
Adams 8800
FOR IMMEDIATE RELEASE
For the first time in 1,809 years, (the last Hebrew revolt under
Bar-Kochba was crushed in 135 A.D.) a unified group of Hebrews has joined
together to redeem the Hebrew national sovereignty and to establish, in exile,
the Hebrew Committee of National Liberation. The new Committee, as the tem-
porary trustee of Hebrew national interests, will apply to the Allied powers
for the same degree of recognition now accorded other committees of liberation
in exile, it vas announced today by Peter H. Bergson, head of the now Committee
of Liberation.
The initial members of the Hobrew Committee of National Liberation,
which 16 housed in its newly acquired Embassy building, 2315 Massechusetts
Avenue, N. W., Washington, D. C. are, in addition to Mr. Bergson, the follow-
ing: Arieh Ben Eliezer, Theodore Bennahum, Professor Pinhas Delougaz, Capt.
Jeremiah Helpern, Eri Jabotinsky and Samuel Merlin.
Though the Hebrew Committee of National Liberation is being only
now officially organized, the activities of its members on behalf of the Hebrew
people of Europe and Palestine are well known the world over. It vas this
group who initiated, prior to the outbreak of the war, the evacuation of tens
of thousands of Hebrews from menaced zones in Eastern and Middle Europe to
Palestine. In the United States, some of its members initiated, as spearheads
in the fight for the survival of the Hobrew poople, the following organizations
in this country: The American Friends of a Jevish Palestine, the Committee for
a Jewish Army of Stateless and Palestinian Jews, the Emergency Conference and
the Emergency Committoe to Save the Jewish Peoplo of Europe. As well as the
organization of the great documentary pageant, "We Will Never Die" and the
nation-wide Proclamation on the Moral Rights of Stateless and Palestinian Jews.
Members of the Hebrew Committee of National Liberation are now
on missions in Europe, in the Middle East, in Palestine and in England.
In announcing the formation of the Committee, Peter H. Bergson declared:
"What 10 happening to the Hebrews of Europe is not sudden. It is the culmination
Regraded Unclassified
- 2 -
216
of centuries of oppression and persecution; of ghettos, pogroms, economic
strangulation and endless humiliation and insult. The Hebrew Nation can no
longer endure the status quo, It has been swept away by an intolerable whirl-
pool of death and disaster. There 1e a limit to the blood and suffering any
people can endure."
The Hebrew Committee of National Liberation has been organized to
obtain recognition of the Hebrew people of Europe and Palestine as a sovereign
nation with the right of self-determination. It will seek representation in
the councils of the United Nations. It will demand the right for its Hebrew
Army to fight on an equal footing with other United Nations armies against the
Axis.
While the Hebrew Committee of National Liberation will not press
the settlement of political and boundary problems of Palestime until the end
of hostilities, it will insist on the immediate opening of Palestine to all
Hebrewe who can manage to escape from Europe today.
The ultimate goal of the Hebrew Committee of National Liberation is
the establishment of a Free Palestine with the Arab population as partners in a
democratic and civilized Palestine, and with a legally constituted international
authority in control of the holy places of all faiths.
"Let it be clearly understood" the statement goes on to say --
"that the Hebrew Committee of National Liberation does not attempt to speak for
the Jews of the United States. They are an integral part of the American Nation;
an integral part of a. nation made up of people of every descent. These Jews
are Americans of Hebrew descent. They do not 'belong to Palestine' and thereby
to the renascent Hebrew Nation either, any more than Justice Frank Murphy
'belongs to the Irish Nation' or Lieut. General William Knudsen 'belongs to the
Denish Nation,' though they both certainly are proud of their ancestry."
It 18 no accident that Washington has been chosen as the site for
this historic rededication of the Hebrew Nation as a democracy. "The site was
deliberately selected,"th statement asserts "because Washington is the eternal
symbol of democracy and of the greatness of the human spirit and of its revolution
ary demand for Justice, decency and freedom."
Regraded Unclassified
217
New York Post
MAY 19 1944
lew Palestine Group Stirs Opposition
By CHARLES VAN DEVANDER
Tremist clique" which had been
outlawed in Palestine because, of
Post Staff Correspondent
its "anti-democratic and terroris
Washington, May 19 - An-
tie tacties."
nouncement by a group of seven
Co-chairmen of the AJC Inter-
Palestinian Jews that they have
im Committee are Dr. Israel Gold-
organized as the "Hebrew Com-
stein, Rabbi Wise and Henry Mon-
sky of Omaha.
mittee of National Liberation" and
Dr. Goldstein, as president of
intend to seek recognition of the
the Zionist Organization of Amer-
United Nations today was met by
ica, called the Bergson commit-
a storm of protests from Zionist
tee's members "a self-appointed
group of four or five irresponsi-
leaders.
ble young men" and said their
Chairman of the new commit-
previous "paper organizations
tee is Peter H. Bergson, a 34-year-
must have been lucrative enough
old Palestine national who previ-
to finance the opening of a sumpt-
usly has been active in organiz-
uous building on Massachusetts
ing the American Friends of a
Av."
Jewish Palestine, the Committee
Hadassah, the Women's Zionist
for a Jewish Army, and the Em-
Organization of America, attacked
ergency Committee to Save the
formation of the committee as "a
Jewish People of Europe.
viclous attempt to undermine the
Bergson disclosed the forma-
position of the Jewish Agency for
tion of the "Hebrew Committee of
Palestine" as the recognized rep-
National Liberation" at a press
resentative of the Jewish people
conference in a newly acquired
PETER H. BERGSON
in building up Palestine.
building on Washington's "Em-
Heads "Liberation Group"
Halls "Rebirth"
bassy Row" which Bergson, re-
Bergson told 25 reporters at his
ferred to as the committee's em-
no standing, no credentials, no
"embassy" press conference that
bassy." A Jewish and an Ameri-
mandate from anyone."
they were witnessing the "re-
can flag flew over the entrance
Sponsors of the committee, he
birth" of the Hebrew Nation
of rthe building. which is as yet
declared have "thrived on pub-
after 18 centuries with his com-
unfurnished.
licity tricks" in their earlier or-
mittee as the temporary custo-
Serk Place at Pesce Table
ganizations, which he asserted
dian of its interests,
have had "one common feature-
Bergson claimed no specific
Bergson said his committee
a persistent request for contribu
mandate, but said his committee
would seek recognition from the
tions."
represents the Interests of "mem-
Dr. Nahum Godmann. Washing
bers of the Hebrew Nation,"
Allied governments as spokesman
for the "Hebrew Nation" and
ton representative of the Jewish
whom he defined as the Palestine
Agency for Palestine and of the
Jews and those living in the
that it would request membership
World Zionist Organization, said:
Axis and occupied countries.
on the War Crimes Commission,
"The attempt of a few persons,
"I consider the Palestine Jews,
United Nations Relief and Re-
who have come from Palestine
who are dominated by the British,
habilitation Administration and
without any authority, without
as absolutely not free to speak for
other United Nations' bodies as
having been delegated by any
themselves and absolutely not
well as a seat, eventually at the
group in Palestine, having played
free to act for themselves," he
peace table.
no role whatever in Jewish life
said In reply to a question.
Dr. Leon Feuer, Washington
n Palestine or elsewhere, to pro-
Plans to Sell Bonds
director of the American Zionist
claim themselves as the "trustees
The committee hopes to finance
Emergency Council, which is joint-
of the Hebrew Nation's Interests'
Its activities by selling Interest-
ly headed by Dr. Stephen S. Wise
$ an act which, I am sure, will
bearing "Free Palestine" bonds
of New York and Dr. Abba Hillel
be rejected by all sections of the
as an obligation of the Hebrew
Silver of Cleveland and speaks
lewish people as a fraud."
Nation, he said, mentioning $1,-
for all major Zionist groups in
Called "Irresponsible"
000,000 as the desired amount for
the U. S., promptly denounced
The new organization was simi-
the first issue. Asked whether
the new Bergson venture as "a
larly denounced by the adminis
the Treasury Dept. had given per-
orazen fraud," and said the com-
trative committee of the Ameri-
mission for sale of such bonds,
mittle consisted of "half'a dozen
can Jewish Conference, which
adventurers from Palestine with
he replied: "Not yet." Bergson
said that the leaders of the "He-
added that the committee had
brew Committee of National Lib-
paid $65,000 for its "embassy,"
eration" were linked with an "ex
which was formerly occupled by
the Iranian government.
Members of the National Lib-
eration Committee, in addition to
Birgson, are Arieh Ben Elizer,
Theodore Bennahum, Pinhas De-
lougaz, Jeremiah Helpern, Eri
dootinsky and Samuel Menin.
Jabotinsky is the son of Vladithir
Jabotinsky, one of the early
ploneers of Zlonist.
Regraded Unclassified
218
The Epening Star
MAY 19 1944
Hebrew Liberation
the Allied powers for the same de-
hum, Pinhas Delougas, Jeremiah
gree of recognition now accorded
Helpern, Eri Jabotinsky, and (amuel
other committees of liberation in
Merlin,
exile.
Committee Assailed
Mr. Bergson said the committee
was the first effort to re-establish
Hebrew self-determination in 1,809
By Jewish Leaders
years, and would insist on the im-
mediate opening of Palestine to all
Formation of the Hebrew Com-
Hebrews who can escape from
mittee of National Liberation was
Europe.
announced here yesterday and im-
The ultimate goal of the com-
mediately drew sharp criticism from
mittee, he said, is the establishment
long-established Jewish organiza-
of & free Palestine with the Arab
tions.
population as partners in & demo-
Both Dr. Leon Feuer, director of
cratic and civilized Palestine, and
the Washington bureau of the
with a legally constituted interna-
American Zionist Emergency Coun-
tional authority in control of the
ell, and Dr. Nahum Goldman, Wash-
holy. places of all faiths.
ington representative of the Jewish
Initial members of the commit-
agency for Palestine and the World
tee, in addition to Mr. Bergson, are
Zionist organization, denounced the
Arieh Ben Ellezer. Theodore Benna-
committee in unequivocal terms.
Dr. Feuer branded the organiza-
tion "fantastic" and said "a hand-
ful of young men are attempting to
perpetrate & colossal hoax." Dr.
Goldstein characterized It as "buf-
foonery" and predicted its rejection
by all sections of the Jewish people.
The committee, with headquarters
in the former Tranian Embassy at
2315 Massachusetts avenue NW.,
announced the redemption of
Hebrew national sovereignty NE its
obj ctive.
Peter H. Bergson, head of the
committee, said It would apply to
The News
219
MAY 19 1944
Hebrew 'Embassy' Here
Castigated by Zionists
By United Press
The Zionist organizations today denounced as a "fraud," "buf-
foonery," and "comic opera drollery if it were not so tragic" the
bid of the Hebrew Committee of National Liberation for recogni-
tion as temporary trustee of "the Hebrew nation's interests."
The criticism by the established
Jewish organizations had been pre-
dicted earlier when Peter H. Bergson,
Isations immediately ridiculed the com-
head of the new committee, formally
mittee's proposals. Dr. Israel Gold-
announced its formation at its new
stein, Zionist Organization of America
headquarters-a $63,000 mansion at
president, said that the committee was
2315 Massachusetts-av nw.
composed of % self-appointed group
Bergnon proclaimed the "rebirth of
of four or five Irresponsible young
the Hebrew nation" after 1809 years of
men" who have equipped themselves
Hebrew dispersion over the world and
with a toga of "trusteeship of the
announced this his committee would
Hebrew nation."
seek:
NO NEW 'MOSES'
SEEK $1,000,000
"The extent to which the previous
1. Recognition as one of the United
undertakings by this small group of
Nations.
boys has already succeeded in mislead-
2. Representation on the Inter-Allied
ing a guilible public must have gone
Commission on War Crimes.
to their heads," he said.
3. A seat on the United Nations re-
Dr. Leon Feuer, Washington Bureau
lief and rehabilitation administration
of the American Zionist Emergency
board.
Council director, sald: "Every move-
4. The right for tens of thousands of
ment has Its funatic fringe and Irre-
-News-Acme
Hebrews to fight the Nazis tn their
sponsible splinter factions. The danger
In front of the new Hebrew Em-
own name-as the Hobrew army.
is that an uninformed people may be
bassy are, left to right: Theedore
Bergson also announced that the
taken in and may be led to elleve
Brennahum, executive committee
committee would. attempt at once to
that & new Moses has arisen in irael."
sell $1,000,000 worth of free Palestine
Dr. Nahum Goldmann, representa-
member; Peter Bergson, committee
bonds to the American public. He
tive of the Jewish Agency for Palestine,
chairman, and Samuel H. Merlin, ex-
said the committee had been financed
charged that the committee was &
ecutive committee member.
60 far by interested persons who also
"fraud."
had advanced the $63,000 purchase for
the former Iranian Embassy building.
In the diplomatic field, in addition
to seeking recognition similar to that
granted to the French Committee of
National Liberation, the Hebrew Cons-
mittee will soon issue a formal diplo-
matic note to the U. 8. stating Its alms.
Bergson and seven other members
of the committee emphasized that they
did not claim to speak for U. B.
Hebrers, but only for those in Pales-
time and Occupted Europe.
Even so, the American Zionist organ-
220
Tye Washington Post
MAY 19 1944
Hebrew Nation
Committee of National Liberation
does not attempt to speak for the
dows of the United States. They
Is 'Reborn' in
are an integral part of the Awer-
lean Nation; an integral part of a
Bare Mansion
Nation made up of people of every
descent."
The committee is dedicated pri-
The "rebirth" of the Hebrew
marily to the task of rescuing the
Nation took place yesterday in a
Jewish people in Europe, he said,
$63,000 mansion-grandiose but
and "proclaims that the Hebrew
unfurnished-at 2315 Massachu-
nation postpone the settlement of
the political add boundary prob-
setts ave. nw., with the 10-day-old
lems of Palestine until after victory
Hebrew Committee of National
when, as one of the United Nations,
Liberation officiating.
we hope to partake in the postwar
Witnessed by about 50 slightly
settlement of political and terri-
torial problems."
nonplused members of the Wash-
'Buffoonery,' Say Zionista
ington press corps, the opening of
Simultaneously with the an-
the so-called "Hebrew Embassy"
nouncement of the new "embassy,"
took place on the second floor of a
Dr. Israel Goldstein, president of
mansion which contained 30 gold
the Zionist Organization of Ameri-
chairs, a speaker's table and a bar.
ca, characterized the establishment
The 63,000 American dollars for
of the committee as "buffoonery
purchase of the structure, Chair-
and comic opera drollery."
man Peter Bergson (self-styled
Said Dr. Goldstein: "Here is
"nuisance diplomat") explained,
truly a case of a self-appointed
were contributed by Americans of
group of four or five irresponsible
the Hebrew race-who, it was em-
young men who have assumed the
phasized, are not represented by
role of Don Quixote and Pancho
the new committee, which is pure-
setting forth singlehanded to 're-
ly for Hebrews of Nari-occupied
establish Hebrew self-determina-
countries.
tion in 1809 years."
They Are on Committee
He added, "This entire exhibi-
Also on the committee are Ariah
tion would be comical indeed were
Ben Eliezer, Theodore Bennahum,
It not for the fact that an insignifi-
Prof. Pinhas Delougar, Capt. Jere-
cant group of people responsible to
mish Helpern, Eri Jabotinsky and
no one, flaunting public opinion, is
Samuel Merlin.
endeavoring to exploit the tragedy
Bergson identified the citizens of
of its own people by fantastic
this dovernment-in-exile as "the
schemes which are prone to beguile
Jews the live today in the hell of
well-meaning friends of the Jewish
Europe together with the Jews of
people who may be ignorant of the
Palest the."
activity-ofvthis group."
"Let it be clearly enderstood,"
Bergson added, "that the Hebrew
The New Mark Times.
221
NEW GROUP SETS UP
"We speak," he added, "as He-
brews in exile and not as Ameri-
ish Agency for Palestine and a ma-
term-of Jewish faith. There is a
Netous attempt to destroy its le-
A 'HEBREW NATION'
great distinction. The latter are
gally recognized status."
a part of the American nation,
The American Jewish Confer-
made up of people of every
ence also Issued a statement last
descent."
night attacking the Hebrew Com-
The committee would present
mitteo of National Liberation. The
Committee Opens 'Embassy'
formal diplomatic appeals to the
Conference said:
United Nations for recognition,
"The Committee has no mandate
in Capital, but Organized
Mr. Bergson said, but was not very
from the Jewish National Assem-
Bodies Call Move a 'Hoax'
optimistic of immediate results,
bly, which is the authorized and
depending instead upon "the re-
democratically-elected spokesman
sponse of the American people."
of the Jews in Palestine. On the
By FREDERICK R. BARKLEY
Of the new committee, the
contrary, the leaders of this com-
American Zionist Emergency
mittee are linked with an extrem-
Special to THE New York TIMES.
Council said that it was "made up
clique in Palestine, which
WASHINGTON, May 18-In an
of half a. dozen adventurers from
amounts to less than one per cent
unfurnished thirty-room mansion
Palestine with no standing, no cre-
of the Jews of that country, and
on Massachusetts Avenue's "Em-
dentials, no mandate from anyone
which has been outlawed by the
bassy Row," a "Hebrew Commit-
unless from the Irgun Z'Vai in
Jews of that country."
tee for National Liberation" set up
Palestine, an insignificantly small,
today what It called an "unofficial
pistol-packing group of extrem-
embassy" fo ra proposed "really
ista who are claiming credit for the
independent Hebrew Nation in
recent terror outrages."
Palestine," and announced plans
"Every movement has its luna-
for seeking a "co-belligerent
tie fringe and irresponsible splin-
status' "with the United Nations in
ter factions, and it is natural that
fighting the Axis powers.
they should exist also /in our
The 10-day-old committee of
midst," It stated.
seven members, which they hope to
"These boys are stuntists," the
increase to twenty-one members in
statement continued. "They have
a few weeks, had the blue-and-
thrived on publicity tricks. They
white-striped flag of Judah flying
come in one day as a Committee
on the mansion's flagpole, along
for a Jewish Army; the next & as
with the American flag, and voiced
Committee for the Rescue of Euro-
hope that before long the big lime-
pean Jews; today as a 'Committee
stone residence would become
for National Liberation' with an
recognized as the embassy of &
"Embassy."
Hebrew Nation with & legal
The comment of the Zionist Or-
entity.
ganization of America of which
The action of the group of seven,
Dr. Israel Goldstein is president,
all professed Palestinian or state-
took the same tone, characterizing
less Jews, was assailed before its
creation of the committee as "buf-
press conference ended by three
foonery" and "comic opera drol-
other Jewish organizations-in the
lery." It said the same group also
words of the American Zionist
had created the "American Friends
Emergency Counell as the effort of
of & Jewish Palestine," and "The
"a handful of young men to per-
American League for a Free Pales-
petuate a. colossal hoax upon the
tine."
Dr. Nahum Goldman, representa-
American people."
tive of the Jewish Agency for Pa-
Says Mansion Cost $65,000
lestine and the American World
Peter H. Bergson, head of the
Zionist Organization in Washing-
new liberation committee, conduct-
ton, said that the new committee
ed a conference for a group of
members had "come from Pales-
about twenty newspaper and radio
tine to this country without any
correspondenta, and said that the
authority, having played no role
whatever in Jewish life in Pales-
mansion had been bought for $63,-
000 and that he expected the "un-
tine- or elsewhere."
Others bestdes Mr. Bergson list-
official embassy" and its activities
ed by the Committee of Liberation
to be financed by sympathetic
as its present members were Arian
Americans, largely through the
Ben-Ellezer, Theodore Bennahum,
sale of 10-year bonds of the pro-
Prof. Pinhas Delougas, Capt. Jere-
posed independent Hebrew Na-
mish Helpern, Eri Jabotinsky and
tion. He expected a $1,000,000
Samuel Merlin.
fund to result, he said,
The committee did not expect,
Hadassah Assalls the Move
Mr. Bergeon said, that any nat-
uralized Jews in any of the United
Hadassah, the Women's Zionist
Nations would seek to declare
Organization of America, issued &
their affiliations with the proposed
tatement yesterday to Its 125,000
Hebrew Nation.
Members criticising the Hebrew
"This is the rebirth of the
Committee of National Liberation
Hebrew Nation right here in this
for its declaration that its purplise
room," he said. "Practically 100
visa to establish itself as temjio-
per cent of the Jews in occupied
ning trustee. of the Hebrew 2/a-
Europe, if asked by sm beratic
tion's interest"," and "No take the
prochas, would say that the want
tirst step to reestablishe Hebrew
to e recognised as mem of
self-determination in 1,809 years'
this proposed Hebrew Natish. The
Hadassah stated that "the Com-
Jows now in Palastine are not
mittee must be recognised for
fre to speak as a nation short of
what a viclous attempt to
& successful revolution."
undermine the position of the Jew-
NEW
YORK
222
Herald
Tribune
MAY 19 1944
Zionists Assail
mittee - as he has been of many
years, Mr. Bergion sold, but he
similar committees formed by the
admitted that permission of the
Committee for
same group - claimed that his
Treasury Department has not yet
"revolutionary" group represnted
been sought. The committee, he
the voiceless Jews of Europe and
said, will seek diplomatic recog-
Hebrew Nation
the Jews of Palastine but now any
nition from the United Nations,
American Jews. He said these
and intends to become one of them.
Jews "constitute the Hebrew na-
Mr. Bergson, who was born in
tion," whose existence he pro-
Lithuania and is the son of Rabbi
Liberation GroupOpèns Up
claimed that Palestine is the ter-
Dov Kook, who became a. leading
'Embassy' in Washington
ritory of this Hebrew nation.
Palestine rabbi, emphasized that
to Press for Recognition
Mr. Bergson repudiated the as-
the committee did not speak for
sertion presented by reporters of
the United States Jews, holding
Jewish-language papers that the
they are not Jews but "Americans
By Ann Cottrell
people of Palestine are already
of Hebrew descent." He did not
WASHINGTON, May 17-The
represented by the National Coun-
make exactly clear how the essen-
establishment of & Hebew Com-
ell in Palestine-an elective body
tial aim of his new committee dif-
which is part of the Jewish agency
fered from the purpose of the
mittee of National Liberation, the
for Palestine. The latter is officially
Zionist movement, many of whose
$63,000 purchase and opening of
recognized in the Palesting man-
members reside in the United
an "embassy" and the proclams-
date w represent Jews and their
States. Both desire to establish a
tion of the existence of a Hebrew
interest in Palestine.
national homeland for Jews in
nation by seven young men from
Palestine. Mr. Bergson said his
The claims made by the new
alestine was met with hostility by
liberation committee, which has
committee will postpone until the
leaders of the Zionist movement,
already hung the Jewish fing with
end of the war any controversy
which the new committee re-
its Star of David from the flag
over the British white paper and
pudiates.
pole, were challenged immediately
"will co-operate and assist Great
Members of the ten-day old
in statements issued by Dr. Leon
Britain as the mandatory power."
committee admitted at a press con-
Freuer, director of the Washington
Its present aim will be rescuing
ferance held in the spacious and
bureau of the American Zionist
Jews from unoccupled Europe, he
Emergency Council, headed by Dr
said.
former Iranian legation in
asachusetts Avenue that they
Stephen 8. Wise, of New York, and
Mr. Bergson, who is thirty-four
did not represent any parent or-
Dr. Abba Hillel Silver, of Cleve-
years old, has been devoting him-
gaflization in Palestine. Peter
land. and by Dr. Nahum Gold-
self to the task of rescuing the
Bergson, chairman of this com-
mann, representative of the Jew-
Jews for many months as one of
Ish Agency for Palestine and the
the chairmen of the Emergency
World Zionist Organization in
Committee to Save the Jewish
Washington. Dr. Goldmann said
People of Europe, which is still
the group had no authority and
in existence and will occupy space
will not be recognized by the Allied
in the new "embassy" headquar-
governments.
ters. The personnel of the two
After the house-party atmos-
committees is approximately the
phere of cocktails and exhibition
same. Mr. Bergson has also been
of the twenty-odd-room mansion
affiliated with the American
subsided. Mr. Bergson told the
Friends of Jewish Palestine and
press: "You are now on what-
the Committee for & Jewish Army
after 1,800 years-we are going
of Stateless and Palestinian Jews,
to claim as Hebrew territory, and
Five of the other members of
technically this building is nearest
the committee are also Palestini-
to Hebrew sovereign territory of
any place in the world." No de-
ans. They are Arich Ben Eliezer,
tails were given as to how the
born in Poland: Theodor Benna-
purchase of the $63,000 structure
haum, born in Russia: Professor
was being financed except that it
Pinhas Delougaz, born In Polend:
is through unnamed friends of the
Captain Jeremiah Helpern, forn
group. The movement will be
in Palestine: Erl Jabotaky, forn
financed. however. by the issuance
in Russia, and Samuel Merlin, who
of $1,000,000 worth of Pree Pales-
was born in Russia but is "state-
tine bonds, redeemable in ten less."
Regraded Unclassified
Times
Therald
223
MAY 19 1944
Committee Asks
U.S. to Recognize
Hebrew Nation
By R. H. SHACKFORD
The Hebrew Committee of Na-
tional Liberation set itself up last
night in the $63,000 former
Iranian Embassy Building. an-
nounced the rebirth of the He-
brew nation after 1800 years. ano
made its first unofficial bid for
recognition as one of the United
Nations.
One of its first steps will be an
attempt to sell $1,000,000 worth
of Free Palestine bonds to Amer-
icans. Treasury Department per-
mission has not yet been obtained.
Begks Recognition
D the diplomatic field It seeks
recognition of the committee as
the temporary trustee of Hebrew
national interests on the basis
similar to that granted Gen.
Charles de Gaulle's French Com-
mittee of National Liberation.
The committee intends soon to
issue a formal diplomatic note to
the United States Government
and to the American people. set-
ting forth its long-term postwar
atims and its immediate destres.
Spokesmen for the committee
ertiphasized that it does not claim
tomspeak for Jews in America.
will. they said, have become in-
tearal parts of the United States,
but rather for the oppressed Jews
of occupied Europe.
Political, Not Religious
They differentiated between
the Jewish religion and the He-
beew nation, emphasizing that
us present committee was polit-
ical, not religious. There may bei
Christian or Moslem members of
the Hebrew nation, they said.
The committee will postpone
until after the war settlement of
the political and boundary prob-
less of Palestine, when, it said,
"& one of the United Nations,
wg hope to partake in the post-
ver settlemen, of political ter-
rhorial problems."
Peter H. Bergaon, Lithuanian-
burn Palestinian, announe di &
formation of the committee in
special press conference in the
edit (mittee's new home. He pre-
dated vigorous opposition from
the other Jewish Zionist organi-
rellons and was correct.
223-A
No. 8203
Bern, May 17, 1944.
Subject: International Committee of the Red
Cross: Reply to Request by the War
Refugoe Board in the Mattor of Treat-
mont of Jews and Other Persons Detained,
Interned or Otherwise Confined in
Germany and its Satellite Countries.
Confidential
The Honorable
Tho Secretary of State,
Washington.
Sir:
I have the honor to enclose herewith a copy of a letter from the
Presidont of the International Committee of the Rod Cross dated May 12,
1944 on the above-indicated subject, which is in reply to my communie
cation of May 2, 1944 to Prosident Huber.
In my lotter of May 2 I transmitted to Prosident Hubor the mossage
from the War Refugee Board which was convoyed to no by the Department in
its tologram No. 1498 of April 29, 1944. This present dospatch is con-
firmatory, the roply of the International Committoe having proviously
been transmitted to the Department in my telograms Nos. 3144 and 3147
dated May 17, 1944.
Respectfully yours,
Leland Harrison.
Enclosure:
Copy of letter from International
Committee of the Red Cross,
May 12, 1944.
File no. 840.1
JKH/mjb
In triplicate to Department.
001 Miss Chauncey (For the Sec'y.) Abrahamson, Akzin, Cohn, Drury,
DuBois, Friedman, Gaston, Hodel, Lesser, Mannon, Marks, No Cormack,
Pehle.
Regraded Unclassified
223-B
(Enclosure to Despatch No. 8203 dated May 17, 1944 from
American Legation, Bern)
COPY
COMITE INTERNATIONAL DE LA CROIX-ROUGE
Agence Centrale des Prisonniers de Guerre
Rappeler dans la reponse:
Geneve, Way 12th, 1944
G.59/7 G.59/4
Palais du Conseil-General
My dear Mr. Minister:
I beg to thank you sincerely for your kind letter of 2 May 1944, in
which you reproduce a message from the War Refugee Board, requesting the
International Committee of the Red Cross to approach certain Governments
with a view to obtaining for Jews and other persons interned treatment
comparable with that which is accorded to civilian internees to whom the
Geneva Convention relative to the treatment of prisoners of war is applied
by analogy, or, failing such treatment, that such persons be placed on
an equal footing with civilian internees as regards permission to receive
relief.
We desire, in the first place, to point out that steps of this nature
by the International Committee would go far beyond the limits of their
traditional capacity and that the Governments to whom such a request
might be addressed would not fail to view this proposal from that parti-
cular angle.
In the provisions of the International agreements the International
Committee have only a. slender basis upon which to found their humanitarian
activities. The latter are, therefore, dependent upon the good will of
bolligorontStates, and can only take practical shape in so far as they
are accepted or solicited by the Governments concerned.
Consequently, the International Committee of the Red Cross might. lay
themselves open to the objection that they were going beyond the limits
of their competences, and trespassing upon the internal concerns of a
State, should they attempt to a ct on behalf of certain categories of
persons whom that State considered to be subject exclusively to its
domestic legislation.
The exceptional position of the International Committee of the Red
Cross as neutral intermediary between belligerent countries precludes
their seeking other solutions than those which offer practical hope of
realization, through appropriate action in quarters where the best results
may be expocted.
The proposal contained in point (1) of the mossage from the War Re-
fugee Board has, we may add, been submitted on several occasions to the
International Committee of the Red Cross by the World Jewish Congress.
His Excellency
Mr. Loland Harrison,
American Minister,
Legation of the United Statos of America, Born.
Regraded Unclassified
223-C
- 2 -
On each occasion, the International Committee was obliged to never that
the numerous endeavours they had made on behalf of the Jews had invari-
ably met with a negative answer, with the exception of certain concessions
with regard to relief measures.
Under thoso circumstances, we must admit that application by our Com-
mittee to the German authorities in this matter would not only havo no
prospect of success, but might oven, in the eyes of these authorities,
appear-quite unjustifiably--dictated. by political rather than by humani-
tarian notivos.
We deeply regret having to confine ourselves to purely relief activi-
ties on behalf of persons who do not enjoy the protection of the Conven-
tion applicable to prisoners of war and civilian internees. This cir-
cumstance is not due to absence of endeavours of all kinds by the
Committee on behalf of such persons--irrespective of race-with 8. view
to their assimilation with civilian internees, by reason of their enemy
nationality. Unfortunately, not one of these approaches has been
successful.
As regards point (2), the International Committee is compelled, in
view of experiences in this field, to admit likewise the fact that such
application would be considered incompatible with the domestic legis-
lation of the detaining Power, and moreover would constitute serious
menace not only to the general activities of the International Committee
of the Red Cross on behalf of prisoners of war and civilian internees,
but also endanger the limited possibilities which we enjoy of assisting
the few groups of persons who are not protected, either directly or by
analogy, by international Conventions. The International Committee must,
it will be remembered, take extreme care that a province, in which the
belligerents have accepted our ministrations, should not be closed to
future action.
The same observation applies to the proposal contained in the last
paragraph of the message from the War Refugee Board "to rescue from the
occupied areas Jews and other persons who are victime of porsecution".
Any such attempt by the International Committee of the Red Cross would at
once have the most unfortunate consequences for their entire work--an
eventuality which they cannot conscientiously envisage.
Since repeated and conclusive experience in this field leads us to
suppose that any steps of this kind would not only be altogether fruit-
less, but might even do more harm than good, the International Committee
must, to their regret, abide by the proposals they have already sub-
mitted to the authorities in Washington and to the Intergovernmental
Committee in London. After careful consideration of the problem and
thorough exploration of all avenues in other fields of action, the
International Committee are, in other words, compelled to confine
themselves strictly to relief work, within the limits which circumstances
prescribe.
Regraded Unclassified
223-D
- 3 -
The scheme for the relief of civilian war victims, irrespective of
race and religion, with which the War Refugee Board is familiar, is to
our mind, and for the present, the only province in which action by the
International Committee can produce useful results. Moreover, the scope
of such action can be widened, in obedience to conditions prevailing,
only in BO far as publicity of any kind is avoided. In this connection,
we are happy to stress the fact that the International Committee have
achieved encouraging results in the field of relief work. It was
largely due to the kind support given to our suggestions by the War
Refugee Board a short time ago, that relief activities on behalf of Jews
in certain countries could be undertaken. This work is worth being
pursued.
As regards the other countries mentioned in the message of the War
Refugee Board, and in which the International Committee are also engaged
actively, here too we must confine ourselves to questions of purely
material relief, and we shall be pleased to receive, as soon as possible,
any assistance the War Refugee Board is able to give us, with a view to
our taking practical action along the lines WO have submitted to their
consideration on behalf of civilian war victims without distinction of.
race or creed.
In certain countries of South-Eastern Europe, and as far as circum-
stances allowed, the International Committee have, nevertheless, been
instrumental in facilitating Jewish emigration to Palestine. On 5 May,
1944, we forwarded to the United States Legation at Bern a note (G.59/5)
on the work done during the preceding months. In this respect also--the
question concerns primarily safe-conducts--the degree of responsibility
we are in a position to assume, depends not upon ourselves, but on the
extent to which circumstances and the Governments interested permit.
The International Committee of the Red Cross would be extremely
grateful to you, my dear Mr. Minister, if you would inform the War
Refugee Board of the above reply, and request them to consider this com-
munication as confidential, since any publicity given to these mattors
can be prejudicial to the same persons whom we are endoavouring to assist.
I remain, my dear Mr. Minister,
Yours Sincerely,
MAX HUBER
President of the International
Committee of the Red Cross.
224
CARLE TO WILSON AND MUNPHY, ALGIBES, FROM THE STATE DEPARTMENT
The Executive Director of the War Refuges Board, Mr. John V.
Pehle, has asked the Department, in cenfermity with the President's
Resecutive Order of January 22, 1944, to obtain diplomatic status for
Mr. Leonard 1. Ackermann who is now the Board's Special Representative
for the Neditorranean area. Accordingly, you are requested to ... that
diplematic status is accorded My. Ackermann at the earliest practicable
date and that he be given the title "Special Attache". Please advise
the Department and the War Refuges Board when this has been accomplished.
THIS IS VEB ALGINES CABLE NO. 11
May
11:25
06%
cash
May 17. 1944
11:25 Molle
5/16/44
225
CABLE TO MUMPHY, CHAP IN AND ACKEHMANN, ALGIERS FROM WAR REFUGEE BOARD AND
DEPARTMENT
Please refer your No. 1529 of May 11.
Cable regarding appointment of Lawler to which reference is made vas
net (repeat not) intended to change Ackermann's status as Board's Special
Representative for the Mediterranean Area. Ackermann is expected to continue
work in connection with Yugoslav and and Italian problems as well as all others
arising in the area. Proposal to sppoint Lawler is implementation of
Ackermann's recommendation that Board have a full time representative in Italy.
Board is considering possibility of sending representative to Cairo to
operate under Ackermann's general supervision.
Board believes that overall coordination in Algiers of Board's
activities in Mediterranean Area is desirable.
In view of thefact that Ackermann's activities extend beyond North
African territories, be should, with Murphy's approval, be regarded as
attached to Murphy as well as to the Embassy in Algiers.
THIS IS WEB CABLE TO ALGINES NO. 12
I
May 17, 1944
11:25 a.m.
JBFibbk- 5/16/44
Regraded Unclassified
226
PARAPHRASE OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
Amembassy, Bogota
DATED: May 17, 1944
NUMBER: 659
SECRET
Careful study has been given to the matter referred
to in your April 29 letter to Keith and in your airgram
of April 28, 1944, no. A-401.
It is the opinion of the Department that in light
of Resolution XX of the Emergency Advisory Committee for
Political Defense at Montevideo the approach of the Polish
Government, as suggested in the draft communication of your
Polish colleague, might be embarrassing to other American
republics. It is felt by the Department that the Govern-
ment of Poland would best be advised to take up this matter
first with the Committee with a view to obtaining a recom-
mendation supplementing Resolution XX by the Committee to
the American republics.
It is noted by the Department that in the draft
Polish communication the last sentence asserts that the
exchange of nationals would not take place but that the
lives of the persons in question would be saved by a mere
declaration, First-hand information from Berlin is posses-
sed by the Department to the effect that an empty declaration
will not be regarded by the German Government as satis-
factory in respect to these individuals and it is further
confronted by the fact that about a dozen such persons
are being placed in the current exchange of nationals with
Germany in place of bona fide nationals of the American
republics nominated for inclusion in this exchange by them.
Arrangements to find a haven for these persons are being
made.
It is requested that you carefully explain the fore-
going to your Polish colleague and inform him that we are
thoroughly sympathetic to the achievement of the purpose
he has in mind but the Department believes that the par-
ticular method of approach suggested by him is not the
wisest at this particular moment for the reasons given.
You may inform him that strong representations concerning
individuals in question have been made by the United
States Government and there are being made through various
channels other efforts in their behalf.
HULL
(AAB)
Regraded Unclassified
227
PARAPHRASE OF THERGRAM SENT
TROM:
Secretary of State, Washington
TO:
Amenbassyk San Jess
DATED:
May 17, 1944
NUMBER: 223
COMFIDENTIAL
Madrid was informed by the Department, upon the basis
of your telegram of May 13, 1944, no. 299, that Grunsteins
and Chuprines would be admitted inte Costa Rica and their
embarkation on GRIPSHOLM was authorised. It is requested
that in view of the Imbassy's telegram of May 16, 1944,
no. 304, you urgently ask the Government of Cesta Rica to
cenfirm that Cesta Rica will admit these persens.
HULL
(JHK)
Regraded Unclassified
228
ORIGINAL TEXT OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
American Embassy, Ciudad Trujillo
DATED:
May 17, 1944
NUMBER: 200
CONFIDENTIAL
If Foreign Office has not instructed its Mission, Bern, to notify
Swiss Government of Dominican willingness accept children as reported
your 219, May 4, please request it to do 30. Inform Department.
Please express this Government's sincere appreciation Dominican
Government's generous offer.
HULL
Regraded Unclassified
229
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
American Legation, Cairo
TO:
Secretary of State, Washington
DATED:
May 17, 1944
NUMBER:
Greek 158
SECRET
The following has been repeated to Ankara and to Algiors for Murphy.
Please ... By despatch of May 2, No. 107, and previous.
It has been recommended by Besnik of the Joint Distribution Committee
in conversations with the Treasury representative and the Embassy here
during the past week, concerning the ressue of refugees from Greece, that (one)
you request the British War Office and the War Department to instruct their
respective secret organisations which are concerned with the transportation
of persons between Greece and Turkey to accelerate the transport
of refugees over those routes; (two) that you inform the Greek resistance
organisations (principally BAM) of American interests in such operations;
(three) that you despatch funds in the form of gold severeigns to Greece to
help Jews in hiding there; and (four) that with a view to their more energetic
protection of their own Jewish nationals in Europe, representations be made
to neutral governments especially Spain, Portugal, and Turkey.
MACVEAGH
DCR1VAG:HL 5/19/44
Regraded Unclassified
230
ORIGINAL TEXT OF TELEGRAM SENT
FROM:
Secretary of State, Washington
i
American Embassy, London
RATED:
May 17, 1944
NUMBER: 3934
SECRET
American Embassy in Moscow has been informed of the contents of
your 3641 of May 4 and has been requested to endeavor to have Rue sign
breadeasts in appropriate languages beaned on Germay and German-
satellite countries transmit varaings to German and German-satellite
military and civilian personnel carrying out deportation proceedings
that they persenally will be hold respensible by the United Nations
for their actions and the deaths that may result from deportation.
The Bussian Foreign Office is also being approached in an attempt to
use its influence upon the satellite governments and populations by
all pessible means to cause their resistance to German demands for
the deportation and persecution of minority grups under their control.
Please make similar endoavors with regard to the Ministry of
Information and the Foreign Office. Please consult with Schoenfeld in
this matter with a view to having Oxech Government request Moscow to
take all possible action to protect Osech nationals in Sub-Carpathe-Bassia.
For your information, the OWI transmitters are carrying similar
warnings. The Embassy at Ankara states that the Turk Consul at Budapest
had sent the Foreigh Office word that every Jev entering Turk Consulate
there was arrested as seon as he left and transported to an unknown place.
The Vatican is being approached with a view to obtaining its support
in applying pressure on satellites, particularly Hungary, in this matter.
Action being taken on your 3642 through Ankara.
HULL
Regraded Unclassified
231
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
American Embassy, London
TO:
Secretary of State, Washington
DATED:
May 17, 1944
NUMBER: 3982
SECRET
Message below refers to May 6 telegram No. 3644.
from the Department.
Foreign Office has just informed the Embassy that
His Majesty's Minister at Habana has been instructed
to assure the Government of Cuba that the recognition
of Cuban passports issued to Jewish persons in countries
under enemy control is welcomed by His Majesty's
Government and latter appreciates the Cuben Government's
reply to the Vatican regarding this matter.
BUCKNELL
Regraded Unclassified
232
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
American Embassy, London
TO:
Secretary of State, Washington
DATED: May 17, 1944
NUMBER: 3988
SECRET
ATTENTION OF THE WAR REFUGEE BOARD.
The Department's cable of May 4, no. 3560 is referred
to herewith.
A payable order for 4968 pounds, 18 shillings, 10 pence
for transmittal to the American Jewish Joint Distribution
Committee in the United States has now been received from
the Foreign Office by the Embassy. There is being trans-
mitted by despatch 8. draft on New York payable to the
Secretary of State for the equivalent in United States
currency of this amount.
On April 13, the Foreign Office states, it received
a further check in the amount of 6188 pounds, 2 shillings,
4 pence and that it will return this money to the Embassy
for betransfer to the United States upon receipt of the
Embassy's request. In this respect we request your in-
structions. In regard to the arrangements which have been
made, the Foreign Office further states that the British Minister
at Vatican City is being informed.
BUCKNELL
Regraded Unclassified
233
PARAPHRASE OF TELEGRAM SENT
FROM: Secretary of State, Washington
TO:
American Consulate, Jerusalem
DATE: May 17, 1944
NUMBER:103
CONFIDENTIAL
It is requested that you check delivery contents
Department's March 16 tlegram No. 46 to Remez and
March 28 telegram No. 60 to Meyerhoff. Please send
report relative thereto via cable.
HULL
Regraded Unclassified
234
ORIGINAL TEXT OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
American Embassy, Managua
DATED:
May 17, 1944
NUMBER: 212
CONFIDENTIAL
Please express this Government's sincere appreciation Nicaraguan
action reported your 271, May 5.
HULL
Regraded Unclassified
235
CARLE TO LISBON
Please deliver following message to Minister Norweb, Lisbon, from
J. W. Pehle, War Refugee Board.
On basis of your 1327 approving our 1208 we made commitment to Eleanor
Widen on salary and per diem figures. Difficult if not impossible to
change terms of offer at this time. We feel $2000 salary and $7 per
diem fully justified, particularly in view of emergency nature of work
and probability of relatively short duration. Would appreciate your
reconsideration and approval as eriginally proposed.
THIS IS VRB CARLE TO LISBON NO. 26
May 17, 1944
3125 P.M.
WStewart; pdk 5/16/44
Regraded Unclassified
236
AIR MAIL
No. 513
EMBASSY OF THE
UNITED STATES OF AMERICA
Lisbon, May 17, 1944
Subject: Transmitting Memorandum regarding Refugee Children
from France.
CONFIDENTIAL
The Honorable
The Secretary of State,
Washington.
Sir:
I have the honor to transmit herewith a memorandum
of Robert C. Dexter, Special Attache, representing the
War Refugee Board, to John W. Pehle, Director of the War
Refugee Board, regarding details of methods of bringing
children out of France into Spain and Portugal; also a
translation of a Portuguese report to Dr. Isaac Weissman,
the representative of the World Jewish Congress in Lisbon,
by one of his agents Manuel Alves, which gives further
details of the situation.
If the Department sees no objection, it would be
appreciated if copies of both documents were transmitted
to the War Refugee Board with the request that, if the
latter have no objection, a copy of Mr. Alves' report be
sent to Rabbi Stephen Wise, Chairman of the World Jewish
Congress Committee in New York.
Respectfully yours,
For the Ambassador:
/s/ Edward S. Crocker
Counselor of Embassy
Enclosures:
1. Memorandum of
Dr. Robert C. Dexter;
2. Translation of Report of
Manuel Alves.
300
RCD/ajl
Regraded Unclassified
237
Enclosure no. 1, despatch no. 513 dated May 17, 1944, from
the American Embassy in Lisbon.
CONFIDENTIAL
In transmitting herewith the translation of a report
made to Mr. Weissman by Manuel Alves, I take the liberty
of making several comments:
1) In regard to Alves himself, I have attempted to
carefully check this man's bona fides. He is a Portuguese
citizen, a wounded veteran of the last war. He makes a
very fair impression and seems especially good in dealing
with children. The refugee children now here adore him and
he seems particularly interested in them. He has been em-
ployed at one time or another by both the British and the
"Fighting French" missions here for intelligence work and
both give him an excellent report for honesty and usefulness.
He apparently has good contacts in Spain and France. He
also claims, although this I have not been able to check,
to be in contact with the American military mission in Madrid
and to be used by them. At the present moment he is being
employed by the Poles and being paid a salary of 4,000 escudos
per month and whatever he does for the evacuation of children
or adults from France through Mr. Weissman's organization he
does voluntarily with no pay, purely because of his interest
in the work. It may well be that he also secures certain
information this way and of course some of those saved are
Polish citizens. You will note that he has now three or
four channels of communication with France and says that he
can open up many others provided the funds are available.
He claims that all his work for the Poles is purely of an
intelligence nature.
2) Regarding Jean Chatain, I have already communicated
with you. However, I should re-state that he is well and
favorably known to the Military Attache here, who made some
of the arrangements for his recent visit to Lisbon. Colonel
Solberg speaks very highly of M. Chatain and I had a most
favorable impression of him.
3) While it is not the function of your representative
to take sides in what is apparently a very bitter internecine
quarrel between two Jewish organizations, I should add that
I am personally much impressed with the character and apparent
frankness of those members of the Congress staff that I have
met. They deny absolutely the allegation made by the Joint
Regraded Unclassified
238
- 2 -
Distribution Committee that they have taken children away from
the Joint and I should add that the children who are now here
and whom I have seen, at least the older ones, are enthusiastic
Zionists. They are singing songs and playing games about re-
turning to Jerusalem, which seems to indicate that their
Zionism antedates their coming across the frontier; I should
also add that we have supplied Mr. Weissman and Sr. Alves
with a number of names and addresses of non-Jewish children
and adults who should be gotten out and that they are
now making arrangements to get these individuals out of
France. They are mostly children of people who are well
known anti-Nazis. Sr. Alves is also contacting leading
French personalities, Protestant and Catholic, who know
about the location of children in hiding, and I hope will
secure a number of children through these channels.
4) As I cabled recently, it seems to me that, regard-
less of what the Joint Distribution Committee may or may not
do, here is a channel for getting children, and adults as
well, out of France which should not be allowed to dry up
for lack of the necessary funds.
5) Regarding Mr. Weissman himself, it is quite clear
that he is somewhat of a visionary and that he frequently
talks bigger than he performs, but nevertheless he seems to
have done something on what might be termed, in common par-
lance, a shoe-string.
6) One other point that should be mentioned but con-
cerning which I have no data, is that both Alves and Chatain
claim that practically all the Jewish adults who have recently
crossed the Pyrenees, came through their organization at the
instigation and with the definite planning of M. Croustillon,
referred to in the memorandum. However, as soon as these
people reach Spain they are obliged to go to the Joint for
maintenance and the Joint then claims them as people whom
they have evacuated. What the truth of this is I have no
means of knowing.
7) I should also add that my own previous experience
with the representatives of the Joint in Spain, Mr. Blicken-
staff and Mr. Sequerra, bears out the statement in Alves re-
port that up to very recently they would have nothing to do
with bringing people into Spain without proper papers. Weiss-
man's organization has done this sort of thing for some time
and it seems reasonable to suppose that they have facilities
for doingoit now when it has become the policy of the Board.
Regraded Unclassified
239
- 3 -
8) This whole question, indeed the entire usefulness
of the War Refugee Board's program here in the Peninsula, is
bound up with the possibilities of the Board's having adequate
representation in Spain. Some comparatively small services
can be rendered here in Portugal but Spain is the key to the
situation. Many of the difficulties that exist here could
probably be overcome if we had a representative in Spain with
the full backing of the Embassy there and certainly the matters
of fact which are at issue could be much more easily clarified
from Madrid or Barcelona than from Lisbon. So far as the
program of the War Refugee Board is concerned, it is my per-
sonal opinion that its activities in the Iberian Peninsula
are really a unit, even though there are two separate countries
involved, and that comparatively little progress can be made
until the situation in Spain is clarified. This is of course
a matter which must be decided by the Board after consultation
with Ambassador Hayes and lies without the province of this
Mission.
/s/ Robert C. Dexter
Special Attache.
Lisbon, May 17, 1944.
Regraded Unclassified
240
Enclosure no. 2, despatch no. 513 dated May 17, 1944, from
the American Embassy in Lisbon.
TRANSLATION
Sir,
The following is an account of the work I have done in
evacuating child refugees from France and other occupied coun-
tries, work with which I was charged by you.
On April 6th I left Lisbon, arriving in Madrid on April 7th.
This was during the festive season of Holy Week and I used the
time to make contact with my former collaborators, with whom on
other occasions I have taken recourse. I explained the case
and they all promised to help me, as they had done before, with
all devotion.
On April 11th I went to see my friend Jean Chatain, to whom
I explained my mission, requesting his valuable assistance, which
was immediately given me.
Sure of being able to reckon with these valuable elements
for my work, I went to see Senhor Jose Croustillon, a person in-
dicated by you and who directs, from Madrid, a powerful organiza-
tion for saving those unfortunate people for whom life in the
occupied countries is a torment. I told hfm of my plans and he
accepted them gladly.
It would perhaps be useful if I give the story of this Senhor
Croustillon, in as complete a form as possible, because his
modesty does not permit me to give it as entirely as I would like to.
Joseph Croustillon, a name by which he is known, a Rumanian
by birth, of Jewish race, professor, lived in France, where he was
educated. He emigrated to Spain in order to prepare in collabora-
tion with his friends in Toulouse the rescue of his racial brothers.
He entered Spain and declared himself English in order not to be
interned. Once in the presence of the English Consul in Madrid,
he told the whole truth of his mission, asked for protection to
carry on his work: as he was not British, this was denied him
and he had to appeal, as an apartride, for protection to the presi-
dent of the Jewish Committee in Madrid. Again he explained, again
his request was refused and, in spite of all this, without any-
one's help, he continued his work.
On the day of our first encounter, Joseph Croustillon had
saved from the hands of the Gestapo, 210 men who were already in
Regraded Unclassified
241
- 2 -
Spain, waiting to be taken to some place where they could fight
in defence of the Allies.
This is the man whom you asked me to visit. As I said,
after having told Senhor Croustillon of my plans, it was decided
that I leave for Barcelona, not only to organize my services but
to come to an understanding with Snr. Herman and Joseph, the guide.
This I did. Not as quickly as I would have desired to but as
soon as I could get a ticket on the train, which is very difficult
these days.
In Barcelona, after having seen Snr. Herman, I was shown
six little beings who were waiting, in a boarding house, that
someone save them - something that Snr. Herman, with all the
good will at his disposal, could not accomplish. It was urgent,
therefore, to get them to Madrid, and in spite of all difficul-
ties in the way of transportation and the Police, I managed to
get them there safe and sound, accompanied by our collaborator
Maria and with the assistance of our collaborator Antonio Alarma,
who obtained the tickets for the express train and undertook all
the other steps which you will imagine. were necessary for this
task, such as safe-conducts, etc.
In Madrid, our friend Snr. Jean Chatain had not been losing
his time, and had managed to get the protection for our work of
the President of the French Red Cross and the President of the
Spanish Red Cross, it being easy therefore to obtain safe-conduct
as far as the Portuguese frontier for the first children.
We were taking these steps when Snr. Herman telephoned me
saying that four more children had arrived. I was glad, but
could not immediately go to Barcelona to fetch them, and as I
delayed, the Joint's representative, Sr. Sequerra found about
the arrival of the children and notified Snr. Herman to hand
them over, saying that if he did not do this he would denounce
the children to the Police, and they, being refugees, would
immediately be sent to Miranda. Snr. Herman could do nothing
else but hand over the children (the four of them) but on that
same day another six arrived and it was necessary to overcome
all difficulties and get them to Madrid and this is what was done.
Meantime, the situation was getting complicated, for Sr. Sequerra
was notifying Snr. Herman to tell him what was going on, on the
contrary he would denounce him, taking away his protection which
was equivalent to Herman's internment. Fortunately, I was in
Barcelona and I told Herman to tell Sequerra that I am alone
the person charged to save the children and only I am respónsible
for what happens. I am looked up by Sequerra twice, but he was
not there and I decide to come to Portugal to make the situation
clear, as to be able to fight men with such means as Sequerra,
Regraded Unclassified
242
- 3 -
equal means would have to be at our disposal. I arrive in Madrid
and explain the case to my friend J. Chatain, who also feels the
necessity to come to Lisbon to clear up this matter, seeing that
M. Blickenstaff, of Madrid, had gone to the Ministry of Foreign
Affairs to complain against the fact that Jewish children are
being evacuated from France without his knowledge, he being the
only accredited person in Spain to do this. This seems at first
sight quite natural, but it is really a dirty trick, because as
Snr. Chatain told you, this person had never been occupied with
saving anybody from France and what is more he never wanted to.
hear anything about clandestine rescue work, and so therefore
he had no rifht to prevent that other more human people than him
did 80. "His Excellency" did not like this and requested assis-
tance from Lisbon and from here the Director of the Joint, Sr.
Schwartz, departed immediately, and as soon as he arrived in
Madrid he demanded the presence of Snr. Croustillon and with
promises of all kinds and even with veiled threats, tried to con-
vince Snr. Croustillon to work for his organization. Snr. Crous-
tillon declared that he had put himself at the disposal of the
Joint a long time ago, to whom he had applied for help for his
work which help was always denied him on the pretext that S.
could not protect his work which was always illicit, such as
carrying out the evacuation from France of his racial brothers
in danger and for that reason he had applied for help to you,
Mr. Weissman, that you had given him this help and that whatever
happened he would not leave you. I am not surprised at this
attitude of Snr. Croustillon, firstly because I think he is &
person worthy of confidence, devoted to his cause to extract
from the German claws as many unfortunates as possible, and
secondly because he is alone and has nothing to be afraid of,
which does not occur with Snr. Herman who has a. wife and young
child, thirdly because he knows he has exhausted all means with
S. and that only now that these gentlemen see that someone else
is doing the work they could not do, they want, as it is their
custom to sabotage, to use all means even the lowest.
This is, in its general lines, the situation, Sir.
But there is one person who is not afraid and who will
not sell himself and you know this through many things. This
person is myself and I will continue to work, even fighting
against all the organizations - even against all S.'s that
one can put in my way and so, I organized with my old guides,
three services that will have as outlets Pycerda and Villallovent
and, near France, Barcelona. This in respect of children. As
regards adults I intend to create a reception centre in Puycerda
or Lerida, for the purposes I have already explained verbally
to you and as contained in the other report.
The service for the children should already be producing
useful work, as my guides had to arrange women on the frontier
Regraded Unclassified
243
- 4 -
that would go to Toulouse to the centres and bring the children
to be evacuated, as men cannot do this, since the German vigi-
lance is always exercised on men and very rarely on women.
Thus, I expect on my return to have everything ready for
the weekly evacuation of an appreciable number of children,
but it is necessary to explain the question of the cost of this
work.
When I arrived in Barcelona, the guides took for each child
Ps. 4,000, all expenses of maintenance, clothes and transporta-
tion to Lisbon being added to this charge, which increases it
vastly. The reason for this is again Sequerra who paid for the
only two children he ordered through, four thousand pesetas
each child, but talking with my former guide, he told me that
he sometimes makes four trips without bringing any children
because there are none in Toulouse. This being the case I
decided to make a monthly wage, with a bonus for each child and,
as in Toulouse they are now organized and it is certain that
each trip the guides make will result in there being children
there, because the women earn on a monthly basis, and go over
many more times, when they were not sure of earning anything at
all.
I therefore hope that on my return this matter will have
been solved and that, if I have the necessary funds, I am sure
that it will be possible to re-obtain what we want, that is,
to save hundreds of children from death.
These funds should not only enable the Toulouse Com-
mittee to exist more freely but will also have its effect
in Barcelona, as there is nothing worse than the arrival
of a guide with no money to pay him and the deeper the con-
fidence we inspire, the bigger the services we may demand
from the guides.
Under these circumstances, if we are in the first place
able to obtain a residence permit for Snr. Croustillon, a
matter being dealt with by mr friend Snr. Chatain, a letter
for Snr. Herman, I believe we shall need nothing further.
But should this be impossible, if we have to loose the
help of Snr. Croustillon and Snr. Herman, we shall not have
to stop saving children, as I am outside the Joint's juris-
diction and my former collaborators are, as proved by the
evacuated children, at my orders for anything I wish.
Regraded Unclassified
244
- 5 -
Here then, Sir, is all I have to say on the work that
you have entrusted to me and with which I willingly go on,
giving to it all my devotion and goodwill. I therefore
hope that you will solve this matter urgently, as the case
demands, and if you can prepare a journey to Spain what
would be ideal even to take over the responsibility of the
negotiations in course - and which I hope will come to a
satisfactory and through my friend Snr. Chatain - for the
mass evacuation of registered refugee children which I hope
will in the near future be handed over by the French authori-
ties with the consent of the German authorities.
I think it is my duty to remind you of the convenience
of awarding to Snr. Croustillon and Snr. Herman a monthly
remineration of Pesetas 2,000, so that they could devote
their efforts only and exclusively to this work, without
having the necessity of waiting for the Joint to give them
means with which to live.
I hope, therefore, that if we are given the amounts
necessary to this work, we shall be able, not only to bring
to Portugal hundreds of children every month, but, even more,
reduce to a minimum the expenses which are at this moment very
high. I hope that the expenses for the rescue of a child
will not exceed Pesetas 1,000, once we have our rescue workers
properly organized.
Regraded Unclassified
245
SFG-835
PLAIN
Lisbon
Dated May 17, 1944
Rec'd. 10 p.m.
Secretary of State
Washington
1494, Seventeenth, 6 p.m.
WRB 39. Representative American Polish Relief
Council here has applied his committee for increased
remittances packages Poland and also for administrative
expenses. WRB representative Portugal informed of
needs and approves increases. Hopes WRB will support
increase of license if committee applies.
NORWEB
LET
EDA
Regraded Unclassified
246
KEM-834
PLAIN
Lisbon
Dated May 17, 1944
Rec'd 10:02 p.m.
Secretary of State,
Washington.
1495, Seventeenth, 6 p.m.
WRB 40 FOR LEAVITT JOINT FROM SCHWARTZ VIA PILPEL
"Wish advise military have asked Max Perlman
proceed Italy immediately collaborate Intergovernmental
Committee and Allied Control Commission. At May
suggestion has delayed departure ten days await my
arrival and arrangements for Kessler to proceed Algiers.
Can you advise what plans arranged with Sir Herbert
Emerson regarding relationship functions et cetera.
Believe Greenleigh if available might be assigned Cairo."
NORWEB
LET
EDA
Regraded Unclassified
247
PARAPHRASE OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
American Consul, Barcelona
DATED: May 17, 1944
NUMBER: 37
SECRET
Following is for Smith and Consulate on the Gripsholm.
With reference to the Department's instructions concern-
ing embarkation of civilians on GRIPSHOLM Department's cable
of May 16, no. 33 A), the following persons are bona fide
Peruvian nationals:
Menchacca y Castro
Maria Therese Menchacca y Castro
They may embark on the GRIPSHOIM and advances of funds to
them for use on the vessel is authorized by the Government
of Peru.
The entrance into Peru of Isidore Poiry, former Honor-
ary Consul of Peru at Brussels and presumably a Belgian
national, whom the German Government has named for exchange
as a Peruvian national, is authorized by the Peruvian Govern-
ment.
The Government of Peru is instructing its Consul at
Barcelona to investigate the status of Mario Baretto, Clemen-
tine Muller and Zizold de Valdes as there is no information
concerning them.
His investigations should guide you in determining
whether they will be admitted into Peru and thus able to
embark on the GRIPSHOIM.
Please arrange through Blickenstaff to provide for the
care of those individuals who are not embarked on the GRIPS*
HOLM at the expense of the War Refugee Board.
Foregoing repeated to Madrid as no. 1398.
HULL
Regraded Unclassified
248
ORIGINAL TEXT OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
American Legation, Bern
DATED:
May 17, 1944
NUMBER: 1721
SECRET
From War Refugee Board to Harrison for McClelland
United Yugeslav Relief Fund being requested supply assistance
Jugeslav nationals Switzerland following categories (a) Jewish refugees
(b) students (e) interned escaped civilians (d) escaped prisoners of
war. These groups under care of Swiss Government and Swisscross.
Accounts here vary as to seriousness and unmet needs.
United Yugoslav Relief Fund willing to supplement current program
if necessary. Please cable report covering nature and extent of needs
of these groups and if Swiss Government and Swisscross welcome assistance.
THIS IS WRB BERN CABLE NO. 19
HULL
Regraded Unclassified
249
PARAPHRASE OF THLEGRAM ENCERIVED
FROM:
American Legation, Bern
TO:
SecretaBy of State, Washington
DATE:
May 17, 1944
NUMBER: 3144
SECRET
A fifteen paragraph letter dated May 12 has been
received from the President of IRC, Mr. Max Huber, in
reply to may May 2 letter which contained information
setforth in April 29 telegram No. 1498 from the
Department. My May 17 telegram No. 3147 transmitted
first thirteen paragraphs of text of Huber's letter
under reference, in which "subjects" means the Jaws"t
"umpire" means "German authorities"; "league" means
"world Jewish Congress"; "respendents" means "the
International Committee of the Red Cross": and
"inquirer" means "War Refugee Beards".
The following is a paraphrase of paragraph fourteen!
Novertheless so far as conditions permitted IRC have
been instrumental in facilitating emigration of Jews
from some southeastern Buropean countries to Palestine.
Memerandum dated May 5 describing work done has been
furnished U. s. Legation at Bern by use (Note from
Legations If and when mailing facilities permit, copy
will be ferwarded by micrefilm.) As regards responsi-
bility whick we can assume primarily in matter of safe
conduct for vessels it does not depend upon ourselves but
rather on interested governments and on ciecumstances.
As regards fifteenth paragrapht It is desire
of IRC that War Refuges Beard be informed but that since
any publicity can be prejudicial to same persons we
are trying to help, it requests that communication be
kept confidential.
HARRISON
Regraded Unclassified
250
MJK-884
PLAIN
Born
Dated May 17, 1944
Rec'd 3123 18th
Secretary of State,
Washington.
3147, Seventeenth.
One. I beg to thank you sincerely for your kind
letter of 2 May. 1944, in which you repreduce message
from INQUIRER Requesting respondents to approach certain
governments with view to obtaining for subjects and other
persons interned treatment comparable with that which is
accorded to vivilian internees to whom Geneva Convention
relative to treatment of prisoners of war is applied by
analogy or failing such treatment that such persons be
placed on equal footing with civilian internees as regards
permission to receive relief.
Two. Ve desire is first place to point out that steps
of this nature by respon dents would go far beyond limits
of their traditional capacity and that governments to whom
such request might be addrisssed would not fail to view
this proposal from that pasticalar angle.
Three. In previsions of international agreements
respondents have only slender basie upon which to found
their humanitaMan activities. Latter are therefore
dependent upon goodwill of belligerent states and can
only take practical shape insofar as they are accepted
or selicited by governments concerned.
Four. Consequently respondents might lay themselves
open to objection that theywore going beyond limits
of their competences and trespassing upon internal comcerns
of state should they attempt to act on behalf of certain
categories of persons whom that state considered to be
subject exclusively to its demestic legislation.
Five. Exceptional position of respondents as
neutral intermediary between behlignMent countries
precludes their seeking other solutions than those
which offer practical hope of realization through
appropriate action is quarters where best results may
to expected.
Six. The propesal contained in point cae of message
from INQUINER has we may add been submitted on several
occasions to respondânts by League. On each occasion
respondents were obliged to answer that numerous endeavors
they ded made on behalf of subjects had invariably net
with negative answer with exception of certain comcessions
with regards to relief neasures.
Seven....
Regraded Unclassified
251
-2- 43147. Seventeenth from BEEN
Seven. Under these circumstances ve must admit
that application by respendents to umpire in this matter
would net only have no prespect of success but night
even is eyes of umpire appear . quite unjustifiable -
distated by political rather than by humanitarian notives.
Rights V9 deeply regret having to comfine ourselves
to purely relief activities on behalf of persons who do
not enjoy pretection of convention applicable to priseners
of var and civilian internes. This circumstance is
net due to absence of endeavors of all kinds by respondents
on behalf of such persons - irrespective of race -
vi th view to their assimilation with civilian internees
by reason of their enemy nationality. Unfortunately
net one of these appreaches has been successful.
Sinc. M regards point two respondents are compebled
is view of experiences in this fied to admit likewise
fact that such application would be considered incompatible
with domestic legislation of detaining pewer and mereever
would constitute serieus neasce not only to general
activities of respondents on behalf of prisoners
of var and civilian interness but also endanger limited
possibilities which ve enjoy of assisting few groups
of persons who are not protected either directly or by
analegy by international conventions. Respondents
must it will be remembered take extrame care that
prevince is which belligerents have accepted our
ministrations should not be clesed to future action.
Ten. Same observation applies to preposal contained
in last paragraph of message from INQUIRER "to resoue
from the occupied areas subjects and other persons who
are victime of persecution". Any such attempt w respondents
would at once have most unfortunate consequences for
their entire work - an eventuality which they cannet
conscientously envisage.
Eleven. Since repeated and conclusive exprience
in this field leads us to suppose that any steps of
this kind would net only be altegether fruitless but
might even de more harm than good respondents must to
their regret abide by propesals they have already submitted
to authorities in Washington and to Inter=Covernmental
Committee in Londen. After careful consideration of
problem and exploration of all avenues in other fields
of action respondents are in other words compelled to
confise thomselves strictly to relief work within limits
which siremetances preseribe.
Twelve. "cheme for relief of civilian var victims
irrespective of rase and religion with which INQUIRER
is familiar is to our mind and for present ealy province
is which actich w respendents can preduce useful
results.
Regraded Unclassified
252
-3- #8147. Seventeenth from Born
results. Mereever scope of such action can be widened
in obedience to conditions prevailing only insefar as
publicity of any kind is avoided. In this commition
we are happy to strees fact that respondents have
achieved encouraging results in field of relief work.
It vgs largely due to kind support given to our suggestions
by INQUIRER short time age that relief activities on
behalf of subjects in certain countries could be undertaken.
This work is worth being pursued.
Thirteen. is regards ether countries mentioned
in message of INQUIRER and in which respondents are also
engaged actively here too we must confine ourselves to
questions of purely material relief and we shall be pleased
to receive as seen as pessible any assistance INQUIRER is
able to give us with view to our taking practical
action along lines we have submitted to their consideration
on behalf of civilian war victims without distinction
of race of creed.
HARRISON
HTM
Regraded I Inclassified
253
CABLE TO ANKARA
Please deliver following message to Ambassador Steinhardt, Ankara from
J. W. Pehle, War Befuges Board.
All necessary preparations being made here for Hirschmann's return to
Ankara. Would like immediate response to our No. 28.
THES IS WRB ANKARA CABLE NO 38
May 17. 1944
12:10 P.M.
VStewart; pdk 5/17/46
Regraded Unclassified
254
ORIGINAL TEXT OF TELEGRAM SHNT
FROM:
Secretary of State, Washington
TO:
American Embassy, Ankara
DATED: May 17, 1944
NUMBER: 438
CONFIDENTIAL
Please deliver following message to Ambagsador Steinhardt, Ankara, from
J. W. Pehle, War Refugee Board.
All necessary preparations being made here for Hirschmann's return to
Ankara. Would like immediate response to our No. 38.
THIS IS VIB ANKARA CABLE NO.,,A2..................
HULL
Regraded Unclassified
255
ORIGINAL TEXT OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
American Embasay, Ankara
DATED:
May 17, 1944
NUMBER: 440
SECRET
American Embassy, London, reports that it has been informed by
London representatives of Jewish Agency, Palestine that deportation
of Jews from Hungary and territories under its control has already
begun and that 24,000 had been deported from Sub-Carpatho-Russia to
date, in addition to general deportation of Polish refugees whose
names are known to Hungarian police. American diplomatic missions
at Moscow and London are being requested to endeavor to have the
broadcasts from their respective countries in appropriate languages
beamed on Germany and German-satellite countries transmit warnings
to German and German-satellite military and civilian personnel
carrying out deportation proceedings that they personally will be
hald responsible by the United Nations for their actions and the
deaths that may result from deportation. Moscow and London have
been asked to approach the Foreign Office in an attempt to have them
use their influence upon the satellite governments and populations
by all possible means to cause their resistance to German demands
for the deportation and persecution of minority groups under their
control.
For your information, OWI transmitters are carrying similar
warnings. The Vatican is being approached with a view to obtaining
its support in applying pressure on satellites, particularly Hungary,
in this matter.
The essence of your 794 of May 2 has also been transmitted to
London and Moscow. The Board hopes you will continue your efforts
to have Turk authorities admit refugees from Balkans with or without
transit visas. In this connection, if not already used in your
approaches and if in your discretion it would not prejudice established
movement of refugees from that quarter, you may wish to invite atten-
tion Foreign Office officials to the fact that they have reportedly
admitted without visas large numbers of persons from Greece.
Embassy, London, further reports that Jewish Agency has informed
its London representatives that of large group arrested in Bucharest
for their activity in aiding escape of Jewish refugees from Hungary
and other areas, all but 30 Jews have been released. Remaining 30 are
about to be tried. Board has requested American Consul General.
Regraded Unclassified
256
- 2 -
Jerusalem, to have Jewish Agency furnish you either through him or
through its Ankara representatives all available details concerning
these 30 persons, if, upon receipt of information, you deem action
advisable, please request Simond to communicate with Cretzianu and
refer to assurances given by Cretzianu in his conversation of March 29
as reported in numbered paragraph 2 of your 581, March 30. While Board
is not unmindful of release of majority of persons charged with aid -
ing Jews to escape, it hopes that 30 detained persons will likewise be
released and possible opportunity to leave Rumania given them,
THIS IS WRB ANKARA CABLE NO. 36.
HULL
Regraded Unclassified
257
PARAPHRASE OF TELEGRAM RECEIVED
Regraded Unclassified
FROM: American Embassy, Ankara
TO:
Secretary of State, Washington
DATED: May 17, 1944
NUMBER: 888
SECRET
Following is Ankara's No. 56, from the Ambassador, personal for
Policy VII,
Reference is made herewith to Department's message dated May 15,
No. 431.
On By arrival next month, I had hoped to confer with you and
Hirschmann in Washington. However, the possibility of oriticism from
relief circles if Hirschmann is not in Turkey while I am in Washington
for consultation is recognised by no. I agree with you accordingly,
that 10 is preferable that he return to Ankara as soon as it is practicable.
I will try to meet him en route if he is not able to reach Ankara before
June 15.
I welcome the assignment of Katski to deal with routine war refugee
matters, especially as I an being flooded with letters from relatives in
Palestine and the United States of refugees whom they believe to to
located in the Balkans and on whose behalf they are seeking intervention.
It has been By practice up to the present time, to give By personal attention
to each of these letters, but in view of my obligations to the State
Department and the other agencies of our Government and their steadily
increasing volume, the prompt arrival of Katski to deal with routine
war refugee matters is most desirable. As my clerical staff is not adequate
to permit my assigning a stenographer to him, a qualified stenographer
should accompany him.
I take this occasion to thank you pessonally for the generous
cooperation and wholehearted support which you have extended to me in
by efforts on behalf of WRB.
STEINHARDT
DCR3VAG:HL 5/19/44
258
ORIGINAL TEXT OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
American Embassy, Moscow
DATED:
May 17, 1944
NUMBER: 1225
SECRET
American Embassy, London, reports that it has been informed
that deportation of Jews from Hungary and territories under its
control has already begun and that 24,000 had been deported from
Sub-Carpatho-Russia to date, in addition to general deportation of
Polish refugees whose names are known to the Hungarian police. The
Embassy at Ankara states that the Turk Consul at Budapest had sent the
Foreign Office word that every Jew entering Consulate there was
arrested as soon as he left and transported to an unknown place.
Please endeavor to have Russian broadcasts in appropriate
languages beamed on Germany and German-satellite countries transmit
warnings to German and German-satellite military and civilian
personnel carrying out deportation proceedings that they personally
will be held responsible by the United Nations for their actions and
the deaths that may result from deportation. Please also approach the
Foreign Office in an attempt to have it use its influence upon the
satellite governments and populations by all possible means to cause
their resistance to German demands for the deportation and persecution
of minority groups under their control.
For your information, the OWI transmitters are carrying similar
warnings and the American Embassy, London, is being requested to make
similar approaches to the Ministry of Information and the Foreign Office.
HULL
Regraded Unclassified
259
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
American Embassy, Montevideo
TO:
Secretary of State, Washington
DATE:
May 17, 1944
NUMBER: 457
SECRET
Reference is made herewith to Department's airgram
of May first no. 194, which was received on May 12 by
the Embassy.
Government of Uruguay has expressed its readiness
to cooperate fully in all the various ways which were S
suggested in your airgram under reference.
DAWSON
Regraded Unclassified
260
NOT TO BE RE-TRANSMITTED
COPY NO 11
SECRET
OPTEL No. 158
Information received up to 10 A.M. 17th May 1944.
1. NAVAL
Early this morning one of H.M. Destroyers engaged three E-Boats
off Great YARMOUTH and damaged one of them.
2. MILITARY
Italy 16th. On main battle front good progress in all sectors
South of CASSINO.
Eighth Army. In the area South of the CASSINO-ROME railway U.K.
have taken PIGNATARO and Canadians on their left North of LIRI have pushed
troops are now 1,000 yards Test of the CASSINO-SANGIORGIO Road. Indian troops
forward to positions nearly a mile Rest of the PIGNATARO-SANGIORGIO Road in
line with French across the river.
GOUMS have taken MONTE CHIAVICA. In Coastal Sector U.S. Troops have reached
Fifth Army. French are heavily engaged against Permans covering
MONTE SAN ANGELO three miles due Vest of SPIGNO and the ACQUA TRAVERSA stream
five miles West of MINTURNO.
Burma IMPHAL. On 15th 2 enemy road blocks on KOHIMA road 12 miles
North of IMPHAL were cleared and the road 3 miles further
North behind the Japanese was cut. KOHIMA - further progress made. In
fighting Pouth of town 13th no known over 300 Japanese killed.
3. AIR OPERATIONS
Western Front 16th. 2 Mosquitoes on patrol over Northern GERMANY the
destroyed 5 German aircraft in the air and 3 on
ground. 1 Mosquito missing. 16th/17th. 29 Mosquitoes bombed BERLIN, all
returned safely.
Italy 14th. 187 medium and 232 fighter bombers attacked commun- light
ications in Central and Easte n ITALY. About 1,000
and fighter bombers conducted offensive operations over the battle area.
26 enemy aircraft destroyed. 5 fighters missing.
TREASURY
1344 MAY 17
SECRET ARY OFFICE OF TPF
Regraded Unclassified